IP Value 2012

2012
10th Edition
2012
Managing editor Joff Wild Editor Jo Moore Sub-editor Carolyn Boyle Publications manager Harriet Marchant Design and production Natalie Clarke, Nicky Phillips Distribution manager Amanda Green Publisher Gavin Stewart gstewart@theipmediagroup.com Associate publishers John Eborall, Patrick Speedie Publishing director Tony Harriss Printed and bound in England by Advent Print Group IP Value 2012: Building and enforcing intellectual property value An international guide for the boardroom is published by Globe White Page Ltd New Hibernia House Winchester Walk London Bridge London SE1 9AG United Kingdom Tel +44 20 7234 0606 Fax +44 20 7234 0808 Email info@globewhitepage.com www.globewhitepage.com
www.buildingipvalue.com First published 2002 ISBN 978-1-905773-13-8 ISSN 1751-0414 Price GB150 (inc P&P) IP Value 2012: Building and enforcing intellectual property value An international guide for the boardroom 2011 Globe White Page Ltd No photocopying: copyright licences do not apply DISCLAIMER This publication is written as a general guide only. It should not be relied upon as a subsitute for a specific legal and/or other professional advice. Professional advice should always be sought before taking any action based on the information provided. Every effort has been made to ensure that the information given is correct at the time of publication. The publishers and authors stress that this publication does not purport to provide investment advice, nor do they bear responsibility for any errors or omissions contained herein. The views expressed in the chapters contained in this publication are those of the authors. Copyright in the individual chapters rests with Globe White Page Ltd and the authors.
Cover image istockphoto
Contents
Foreword Introduction Introduction The year it all changed Joff Wild Editor, Intellectual Asset Management magazine Introduction NYSE Euronexts IP challenges Janet Parkhurst NYSE Euronext Introduction The current state of innovation in China Bob Stembridge Thomson Reuters Legal perspectives Cross-border International All change at ICANN: domain names enter a new era Elaine Tan Amica Law LLC International Doing business through social media: much to gain, but a lot to lose Jean-Franoise Bretonnire and Thomas Defaux Baker & McKenzie
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International Milestones for improving the protection of SME innovations Paul Alexander Wacker Kuhnen & Wacker International A unitary patent: not if, but when Paul Clarkson Nederlandsch Octrooibureau Legal perspectives North America
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United States 46 Gene patents survive in the United States for now W Edward Ramage Baker Donelson Bearman Caldwell & Berkowitz PC United States Who owns federally funded inventions? Lewis F Gould Jr and Gretchen L Temeles Duane Morris LLP 49
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United States 53 To be a trade secret or not to be a trade secret: practical considerations when protecting IP assets Julie A Katz Husch Blackwell LLP United States The patent monetisation cookbook: a structured approach to monetising patents Craig Opperman and Marc Kaufman Reed Smith LLP Legal perspectives Latin America & Caribbean Caribbean 64 Pirates, plantations, rum and reggae: the complex business of protecting IP rights in the Caribbean Gabriela Bodden and Aarn Montero E-Proint 57
International 31 Worldwide trademark protection: coverage versus cost John L DuPr Hamilton Brook Smith & Reynolds PC International Key considerations in transitional patent litigation Jochen-Bhling Krieger Mes & Graf v der Groeben 34
4 Building and enforcing intellectual property value 2012
Contents
Jamaica Legal protection of databases: Jamaican litigants test the bounds of the Copyright Act Dianne Daley and Nicole Foga Foga Daley Mexico Applying the doctrine of equivalents in patent litigation Juan Carlos Amaro and Hector Chagoya Becerril, Coca & Becerril, SC Venezuela Standing on its own: Venezuela re-establishes its national IP system Matas Prez-Irazbal Hoet Pelez Castillo & Duque Legal perspectives Europe, Middle East & Africa Denmark On a journey towards a specialised patent court Susanne Hiberg and Louise Aagaard Hiberg A/S France French copyright law: a complex coexistence of moral and patrimonial prerogatives Jean-Franois Bretonniere and Thomas Defaux Baker & McKenzie Germany For your billing consideration: the Rechtsanwaltsvergtungsgesetz Gottfried Schll and Nazim Sylemezoglu COHAUSZ & FLORACK Greece Can Trademark Law amendments give the economy a welcome boost? Eleni Lappa IPWORK LLC
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Israel Qualitatively good, quantitatively poor Michael Factor JMB, Factor & Co Norway Norway to enforce tough measures for IP rights
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Amund Brede Svendsen and Felix Reimers Advokatfirmaet Grette Poland Professional representatives in IP cases 100
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Alicja Rogozi ska, Pawe Wac and Wojciech Trybowski Polservice Patent and Trademark Attorneys Office Romania 104 Trademark registration applications in no-mans land Denisa Markuev Rominvent SA Spain Decisions, decisions: the courts lead the way in developing IP rights and Rita Reyes Ros Amat i Vidal-Quadras Advocats Sweden Modernisation of Swedish IP law continues Stefan Widmark, Evelina Anttila and Emelie Nordh Mannheimer Swartling United Kingdom Developing patent law: the courts lead the way Pierre-Andr Dubois and Shannon Yavorsky Kirkland & Ellis International LLP Legal perspectives Asia-Pacific 115 111 107
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Miguel Vidal-Quadras Tras de Bes, Oriol Ramon Sauri
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Australia 120 Globally aligning the Australian IP environment Karen Sinclair, Mark Pullen, Andrea Allan, Bruce Dowsing and Peter Hallett Watermark
Building and enforcing intellectual property value 2012 5
Contents
China and Hong Kong China and Hong Kong step up IP protection Cedric Lam and Monique Lee Dorsey & Whitney LLP India Extending celebrity status to IP rights Nishchal Anand and Tanvi Misra Anand And Anand Advocates Japan Recent amendments to the Patent Act Hitomi Iwase and Naoko Abe Nishimura & Asahi Malaysia Courts tackle key issues: jurisdiction and broadcasting rights Michael Soo, Lin Li Lee and Bee Yi Lim Shook Lin & Bok
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Sri Lanka 141 Tackling the import of counterfeit products through border measures Sudath Perera and Aromi Silva Sudath Perera Associates Taiwan Overhauling the Trademark Law Yulan Kuo and Jane Wang Formosa Transnational 145
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133 Contributing firm directory 151
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Foreword
It is a great pleasure to welcome you to the 10th edition of IP Value: Building and enforcing intellectual property value. Now firmly established as the leading publication of its kind, IP Value 2012 presents a comprehensive range of chapters addressing crucial issues faced by IP owners worldwide. IP Value 2012 draws together world-class expertise across a variety of industries to provide senior executives with comprehensive guidance on key IP topics, in a userfriendly format, without unnecessary technical jargon. Like its predecessors, IP Value 2012 presents the full spectrum of IP-related topics considered from both national and cross-border perspectives. IP Value 2012 does not seek to offer specific advice and should not be read as if it does. However, the expert contributors to the book raise various important issues for senior executives to consider when dealing with intellectual property. The commitment of all our authors to providing expert insight underpins the book and ensures its continuing reputation as a vital reference tool for IP rights owners and their advisers, wherever in the world they are based. To ensure that IP Value 2012 maintains its reputation of publishing to the highest standards, only those firms and organisations with demonstrable expertise and track records in the field of intellectual property were invited to contribute. We would like to thank all the contributors for their hard work and continued commitment to this project. We would also like to thank the Licensing Executives Society (USA and Canada), Inc, NYSE Euronext and Thomson Reuters for all their assistance during the production of IP Value 2012. Jo Moore, Editor, IP Value 2012
Introduction
Joff Wild Editor, Intellectual Asset Management magazine
Introduction The year it all changed

A study published by the World Intellectual Property Organisation (WIPO) in mid-November 2011 reported that the global IP market is now worth $180 billion a year. According to the World Intellectual Property Report 2011 The Changing Face of Innovation, royalty and licensing fee revenue rose from $2.8 billion in 1970 to $27 billion in 1990, and hit $180 billion in 2009. This is faster than global gross domestic product rose over a similar period. In fact, because the statistics recorded by WIPO only went up to the end of 2009, it is possible that two years later the total may now have hit the $200 billion mark. Given that the WIPO report was released just weeks after another study, which claimed that the value of intellectual capital including patents, trademarks, copyrights and other forms of intellectual property owned by publicly quoted US companies exceeded $8 trillion, the case for intellectual property as a lever for growth and innovation has never been stronger. For firms operating in global markets, profitability depends to an increasing degree on the depth and quality of their intellectual capital, rather than merely on relative costs and sunk tangible investments. Firms with the most valuable intellectual capital are more likely to succeed in intensely competitive global markets and, therefore, are also more likely to have high market values, stated the authors of What Ideas Are Worth: The Value of Intellectual Capital and Intangible Assets in the American Economy. Looking at events during 2011, it is hard to avoid the conclusion that at long last, both investors and senior corporate executives are starting to look at the kinds of figures revealed in the two reports mentioned above and are concluding that intellectual property is a vital and valuable business asset. Over the last 12 months, it seems that intellectual property really has become a boardroom issue. The Nortel boost If in future years people look back at 2011 as the tipping point for perceptions of intellectual property, the auction of the patent portfolio owned by bankrupt Canadian telecommunications giant Nortel will no doubt be seen as a pivotal event. For four days at the end of June 2011, representatives of some of the worlds biggest players in the mobile communications sector set up camp in the New York offices of law firm Cleary Gottlieb as they vied for the 6,000 patents and related rights that Nortel had put on the table. At the end of a bidding process that lasted for more than 25 rounds, a consortium of companies made up of Microsoft, Apple, Research In Motion (RIM), EMC, Ericsson and Sony emerged victorious, having tabled an astonishing offer of $4.5 billion. Of the six, Apple paid by far the largest proportion in a successful effort to prevent Google, developer of the Android platform and the original stalking-horse bidder, from obtaining intellectual property that would have bolstered its ability to help Android manufacturers fight litigation attacks launched by Apple in the ongoing smartphone wars. The setback was a serious blow to Google, which until then had perhaps naively shown little inclination to build up a patent portfolio. However, the company did not take its defeat lying down. Instead, it paid $12.5 billion for Motorola Mobility and its arsenal of 17,000 patents, and also did a couple of deals with IBM, netting 2,000 more. This flurry of activity not only made the front pages of business publications across the world, but also caught the attention of investors and C-suites alike. Both Kodak and InterDigital have confirmed that they are interested in selling off parts of their patent portfolios in the hope of raising considerable sums of money; while others, including RIM and Nokia, are rumoured to be looking at their options. Beyond the bubble Lest anyone think that the activity is limited to the telecommunications and mobile communications sectors, speaking in October 2011 Peter Holden, who
Introduction
runs Coller Capitals IP investments business, stated that there is high demand for patents and growing sales values in areas as diverse as med-tech, e-commerce, LED and social networking. Companies, he stated, are voraciously buying up intellectual property as they come to realise that they will need patents in order to build sustainable competitive positions. Moreover, the activity is not just centred on the United States there is considerable interest in patents valid in Europe (especially Germany) and certain Asian countries, such as China. As the amount of IP dealmaking has increased, there has been talk of a bubble with some commentators stating that price levels are not sustainable. However, while it is true that current values are probably inflated, and that most patents are not worth the paper on which they are written, this does not mean that the patent marketplace has not reached a tipping point. Although the overall perception of the worth of patents may have become over-inflated and could be readjusted, the interest that has been sparked in them looks likely to last beyond the first disappointing sale results. And that
is because they are likely only to become more important. As Holden observed in October 2011, the volume of patent-related deals is likely to increase because there are more parties than ever interested in acquisitions. For large companies, intellectual property is now a driver in strategic decisionmaking in areas such as mergers and acquisitions, as well as being a revenue generator and a profit centre; further down the scale, for start-ups and SMEs, intellectual property is increasingly being seen as an important constituent of value in the overall determination of ongoing viability. Meanwhile, mainstream investors are beginning to see intellectual property as an asset with a proven ability to generate significant returns. In the end, it boils down to a simple truth: patents and other forms of intellectual property are attractive assets because they generate real money, underpin entire industries and give their owners the flexibility to do deals or to exclude. That is why people will always want to own intellectual property. For too long, it has been hidden away, but in 2011 that began to change. Intellectual propertys time, it seems, has finally come.
Joff Wild is managing editor of IP Value 2011 and editor of Intellectual Asset Management (IAM) magazine (www.iam-magazine.com). He can be contacted by email at jwild@iam-magazine.com.
Janet Parkhurst NYSE Euronext
Introduction NYSE Euronexts IP challenges

Introduction NYSE Euronext is a leading operator of financial markets in Europe and the United States and a provider of comprehensive trading technologies. The companys exchanges trade equities, futures, options, fixed-income and exchange-traded products. NYSE Euronexts equities markets the New York Stock Exchange, NYSE Euronext, NYSE Amex, NYSE Alternext and NYSE Arca represent one-third of the worlds equities trading and the most liquidity of any global exchange group, with approximately 8,000 listed issues (excluding European structured products) from more than 55 countries. NYSE Euronext recently announced its planned merger with Deutsche Borse which, pending regulatory approval, will expand this scope and create a world leader in equities and derivatives trading. With this prominent role in the global financial services industry comes a plethora of IP issues, ranging from the mundane to the unique. NYSE Euronexts focus on intellectual property as a core asset creates opportunities and challenges. In addressing these opportunities and challenges, NYSE Euronext strives to apply its stated corporate strategy by innovating with purpose, collaborating productively, engaging clients and thinking broadly. Establishing best practices Like other companies, NYSE Euronext deals with IP issues on a day-to-day basis, managing a portfolio of over 160 issued and pending patents in more than 13 countries and hundreds of trademarks worldwide at various stages of application and maintenance. The company constantly evaluates trademark, patent, copyright and database right opportunities for its products and services, taking precautions to protect its confidential information and trade secrets, and educating its employees about maximising the value of intellectual property to the company and its shareholders. Over the past two years, NYSE Euronext has created a senior level IP Rights Committee to address complicated and/or high-profile decisions relating to intellectual property and has conducted onsite employee IP training in five countries. In addition, NYSE Euronext periodically holds online innovation events to solicit employee ideas about a wide-range of topics. These events are organised and monitored by an innovation committee, and IP generation and protection are integrated into the process. Overall, these events have been successful in promoting innovation and productive collaboration. While these efforts are not particularly groundbreaking, NYSE Euronext believes that they are an integral part of a strong IP practice. In addition to reinforcing and instilling corporate strategy, NYSE Euronext demonstrates that it is also dedicated to providing its employees with the information and tools necessary to allow them to maximise the value of their efforts for the global organisation. With widespread awareness about IP issues and well-established IP policies and practices in place, NYSE Euronext can dedicate more time and resources to addressing and overcoming the more complicated challenges associated with creating and protecting its intellectual property, such as how best to leverage its status. Protecting an icon Unlike many companies, NYSE Euronext boasts among its IP assets a number of famous marks that require a nuanced approach to enforcement and protection. By way of example, the New York Stock Exchange (NYSE) name, the image of the NYSE trading floor, the image of the NYSE faade and the audio for The Opening Bell and The Closing Bell are all protected trademarks and, as a result of the NYSEs rich history and critical role in financial markets, are recognised around the world even by non-English speakers. The NYSE is an iconic US institution. Founded in 1792 through the Buttonwood Agreement, the NYSE is in its third century of facilitating trading. Today, the NYSE is the only stock exchange listed in the Fortune 500,
NYSE Euronext Janet Parkhurst
while also listing 81% of the Fortune 500 companies. In addition to large, established companies, in recent years the NYSE has gained a market share in listing new, technology-based companies. As a result of this iconic status, images of NYSEs trading floor and faade are projected daily by network and cable news in connection with reports about the performance of the markets or of the individual stock of a company of interest. On a particularly volatile day on the markets, you can almost be guaranteed to find an online or print image of a floor broker holding his head in his hands on the NYSE trading floor. The NYSE faade and trading floor are also popular images for book covers, greeting cards and film sets. Although any public misuse of trademarks poses risks, most companies benefit from positive public exposure, and the NYSE is no different. For example, The Opening Bell and The Closing Bell, which signify the start and end of trading each day on the NYSE, are also used as opportunities for listed companies, celebrities and public figures to celebrate anniversaries and accomplishments or to recognise historic events. Celebrities from rappers and Olympic athletes to Pulitzer prize-winning authors have all participated in these events. Notable visitors to the NYSE include Ronald Reagan, Nelson Mandela, Chinese Premier Wen Jiabao, actress Sarah Jessica Parker, basketball phenomenon LeBron James and Olympic gold medallist Michael Phelps. Telecasts of The Opening Bell and The Closing Bell are retransmitted around the world. However, there is a tension between the benefit that a company receives from public exposure and the need to restrict use of trademarks in order to protect ones rights in such marks. Should a company consistently object to unlicensed uses of its trademarks or target its objections towards non-favourable uses only? What company doesnt want to be a household name? For example, Johnson & Johnson would naturally want a mother to think immediately of Band-Aids when her son skins his knee, but in order to maintain ownership of that trademark, Johnson & Johnson polices use of that mark and carefully refers to that product as Band-Aid Brand Adhesive Bandages. Similarly, Kimberly-Clark takes great care in identifying its well-known facial tissue as Kleenex Facial Tissues, lest its trademark become the next aspirin, escalator or zipper. It is a delicate balancing act and one that NYSE Euronext is focused on navigating successfully. In order to make enforcement decisions, NYSE Euronext must distinguish between uses that constitute fair use and those that might cause dilution or create the risk of a mark becoming generic. The NYSEs marks are probably most vulnerable for genericity from widespread
misuse in the mass media for example, use of the phrase closing bell to refer to events other than the official end of the trading day at the NYSE, or a picture of the NYSE faade as a generic reference to activity on Wall Street. However, many uses of NYSE Euronext marks fall into the category of fair use, as they are used by legitimate news sources reporting on relevant current events and the performance of the financial markets. Preventing infringing uses requires strong relationships with media outlets to encourage them to use NYSE or NYSE Euronext and associated trademarks in their properly trademarked form. NYSE Euronexts legal, communications and marketing groups work closely together to identify potential problems and determine appropriate remediation. Interestingly, NYSE Euronexts perceived role in the financial services industry can make taking enforcement actions more difficult. Perhaps because the various exchanges operated by NYSE Euronext are so closely watched as the centre of market activity in their respective jurisdictions, or because NYSE Euronext operates in such a highly regulated industry, NYSE Euronext is often perceived as being a government agency and not as the publicly traded company that it is. While most companies would be lauded for responsible brand protection, we have frequently been criticised for our enforcement activities by those who are unfamiliar with the niceties of IP law and who believe that the NYSE brand is a public asset to be used without consent. Just recently, for instance, NYSE Euronext was criticised by some when it attempted to prevent online use of an image of the NYSE faade in connection with a story relating to alleged criminal activity by an unrelated broker dealer. Clearly, the use of the trademarked image of the faade in connection with an unrelated negative event could have the effect of tarnishing NYSE Euronexts reputation, but critics claimed that this was an inappropriate position for NYSE Euronext to take. A challenge for the NYSE is to communicate clearly that in addition to its public responsibility to maintain a stable and liquid market, it is a public company like any other and is thus entitled to IP protection to preserve and serve the interests of its shareholders. Innovating with purpose In addition to the unique challenges described above relating to IP protection, and in keeping with its corporate strategy, NYSE Euronext seeks to identify ways to increase the value of its IP assets and to maximise how it leverages such assets. It may be counterintuitive, but in some cases, NYSE Euronext has determined that the best way to leverage an
Introduction NYSE Euronext
IP asset is to make it widely available. For example, as an organisation with public responsibilities, the NYSE encourages the media to drive public dialogue about the markets and the NYSEs role. Indeed, the NYSE facilitates tapings of news anchors for network and cable television. The NYSE has no interest in quashing proper media usage of its registered trademarks. To the contrary, the perception of the NYSE as an active supporter of the financial services community is core to its values and reputation. Other examples of innovation relating to how NYSE Euronext leverages intellectual property can be found in its NYSE Technologies business. NYSE Technologies is the commercial technology division of NYSE Euronext and provides transaction, data and infrastructure services and end-to-end trading solutions to buy-side and sell-side firms, as well as to third-party exchanges and their trading communities. As a provider of managed services and licensed products, NYSE Technologies is maximising the value of NYSE Euronexts technologies by providing these best-of-breed solutions to the trading community. Third-party exchanges license the same state-of-the art technology on which NYSE Euronext operates its own equities and derivatives trading platforms. These smaller exchanges may not have the resources to devote to developing their own proprietary systems, but through a licensing and services agreement with NYSE Technologies, they benefit from NYSE Euronexts efforts and expertise. While the majority of NYSE Technologies services and products are offered under a standard commercial licensing model, NYSE Technologies is also thinking broadly and exploring new ways to leverage its assets and make them more readily available for traditional and non-traditional applications. As an example, NYSE Technologies is in the process of evaluating an open
source model for one of its key proprietary messaging technologies, MAMA API. Open sourcing is not a new concept, but it has not yet been widely adopted in the financial services space and is still subject to criticism by many who believe that software ownership should be coveted. Most open source models grant rights to allow an entity (eg, an end user or developer) to access the source code to a piece of proprietary software and to use, copy, modify and create derivative works of the source code on a royalty-free basis. Open source does not mean that the software is in the public domain or is no longer protected by copyright, but rather that the rights which the copyright holder has in the software are licensed pursuant to a broad public licence. By making the source code for MAMA widely available under a public licence, NYSE Technologies hopes to encourage innovation in the messaging space beyond what NYSE Euronext can accomplish on its own internally. NYSE Technologies would also continue to offer software support and will continue to work with end users and developers to identify ways to apply MAMA for new implementations. Comment NYSE Euronexts intellectual property is viewed as a core and valuable asset. As a result, NYSE Euronext devotes time and resources to making intelligent and informed decisions around intellectual property. It is crucial for NYSE Euronext to strike a balance between protecting its valuable IP assets and leveraging them for the broader benefit of the financial services community. While all companies should take care in maintaining their IP portfolios, this endeavour has added complexity when the company serves in a public capacity as a regulating entity and has iconic status. NYSE Euronext prides itself in managing these obstacles and in doing so in a manner consistent with its broader corporate strategy.
Janet Parkhurst Senior vice president, Legal and Government Affairs jparkhurst@nyx.com NYSE Euronext United States
Janet Parkhurst is a senior vice president in NYSE Euronexts global legal department, responsible for global IP and IT issues and for supporting the NYSE Technologies business. She joined NYSE Euronext in June 2008 from the IP and technology group of the New York office of Milbank, Tweed, Hadley & McCloy LLP. Ms Parkhurst has extensive experience in technology law, IP transactions and outsourcing, including in the drafting and negotiating of complex information technology and business process outsourcing agreements, software development, licence and maintenance agreements, IP licence agreements and internet site development, hosting and maintenance agreements.
Thomson Reuters Bob Stembridge
Introduction The current state of innovation in China

Since 1949 the Communist government has implemented a series of five-year plans that have guided the development of China from a poor developing nation to the second-largest global economy behind the United States in terms of both purchasing power and, more recently, gross domestic product (GDP). China has just completed the 11th Five-Year Plan for National Economic and Social Development. This plan highlighted innovation as a focus, and the corresponding science and technology plan articulated the countrys goal to become an innovation-oriented society by 2020. Many of the developments of the past five years illustrate how far China has moved towards that goal. The recently released 12th Five-Year Plan sets a number of challenging goals aimed at continuing the transition from Made in China to Designed in China. In order to achieve this, the government plans to invest heavily in science and technology education and research and development (R&D) and develop further Chinas IP rights system. This chapter examines the ways in which China is further transforming from a manufacturing to an innovation economy and the prospect of achieving the targets set for the next five years. The driving factors for Chinas patent boom are analysed using data drawn from Thomson Reuters. Patent volumes and trends are explored, as well as the underlying causes of increased innovation, including economic and government policy factors and the changing IP climate in China. Innovation trends In 2010 the patent offices of Japan, the United States, Europe, Korea and China accounted for 77% of all new invention patent applications published worldwide, with Japan, Korea and China accounting for 54.8% of these. An analysis of patent volumes over the past five years from these five major offices shows that inventions from China have been growing faster than any other region. Several attributes can be measured to identify and track innovation trends for a particular region: published patent application total volumes; local priority patent application volumes; and international patent application volumes.
Using data from the Thomson Reuters value-added patent collection Derwent World Patents Index (DWPI), the trends in patenting according to the numbers of published patent applications can be compared for the five jurisdictions. Looking at the total volumes of published patent applications from the five patent offices from 2006 to 2010 (Figure 1), Japan has the highest volumes year-toyear during the period, but its lead narrows as the United States catches up. Europe and Korea have similar volumes and growth trends. The striking difference among these regions is in China it is experiencing the most rapid growth and is poised to lead the pack in the very near future. The projected growth in published patent applications for these regions shows that China is set to dominate the patent information landscape in 2011 (Figure 2). In regard to the number of patent applications with local priority, China is again the exception, with dramatic growth in domestic applications from less than 90,000 in 2006 to nearly 230,000 in 2010 (Figure 3). The ratio of domestic patent applications (those with local priority) to total patent volume for each region from 2006 to 2010 ranges from 13.7% at the lowest (in Europe in 2008) to 86.6% at the highest (in Japan in 2006) (Figure 4). Japan shows a high proportion of domestic to total patent applications at a relatively steady level. The ratio for the United States declined over the period: domestic applications remained flat, while applications for patents made by foreign concerns have increased over time. Europe and Korea both display fluctuating ratios for the period, and the low ratios for Europe reflect the high proportion of applications with priority filings at patent offices other than the European Patent Office.
Introduction Thomson Reuters
Figure 1 By contrast, China is the only country in the group where the ratio of domestic to total applications has grown steadily, from less than 52% in 2006 to nearly 73% in 2010. Clearly, applications by domestic concerns are growing more rapidly than those by foreign entities and are fuelling the Chinese patent boom. Innovation is home grown By 2010 the number of home-grown patent applications outstripped foreign applications by nearly three to one (Figure 5). In an analysis conducted on Chinese domestic patent application volumes for 2006 to 2010 in selected technology fields, all sectors showed growth, with electrical machinery, digital communication, computer technology, measurement instruments and pharmaceuticals taking the top five slots in 2010 (Figure 6). In a further analysis which looked at the global share of Chinese domestic applications (ratio of Chinese domestic applications compared to global applications) by technology for 2006 to 2010, the dominant industries by global share in 2010 were pharmaceuticals, food chemistry and basic materials chemistry, closely followed by biotechnology and digital communication (Figure 7). A summary of the significant findings of these analyses is given here by technology area. Electrical engineering Dramatic growth rates over the period were observed for: electrical machinery, apparatus, energy (rising from 5,671 applications to 19,511 applications at a compound annual growth rate (CAGR) of 36.2%); digital communication (from 5,481 to 16,168 a CAGR of 31.1%); and computer technology (5,872 to 16,066 a CAGR of 28.6%). Domestic patent applications for digital communication grew 20% faster over the period than global applications in this technology, and the global share of domestic Chinese patent applications for digital communication jumped from 14.4% to 29.8% over the period. In addition, annually computer technology domestic applications grew 25.9% faster than global applications. Instruments Growth rates for the technology fields of measurement and control grew at a CAGR of 35.6% (from 5,071
Figure 2
Figure 3
Thomson Reuters Introduction
Figure 4
Ratio of domestic to total applications Japan US 2006 2007 2008 2009 2010 Average
86.6% 64.4% 16.5% 69.0% 51.9%
84.4% 60.7% 14.2% 61.1% 55.2%
81.9% 58.9% 13.7% 61.7% 62.2%
81.9% 55.6% 15.4% 72.0% 64.1%
82.1% 53.6% 15.1% 72.8% 72.7%
83.4% 58.6% 15.0% 67.3% 61.2%
Europe Korea China
Figure 5
Domestic vs Foreign patent applications
Figure 6
Domestic patent applications by technology
Figure 7
Figure 8
Automotive companies with patent applications in China 2010
Figure 9
Figure 10
Automative basics 2010 with Chinese priority
applications in 2006 to 17,126 in 2010) and 34.6% (from 2,007 applications in 2006 to 6,587 applications in 2010), respectively. Domestic applications grew 24.5% faster than global applications annually. Chemistry Microstructural technology and nanotechnology, macromolecular chemistry and polymers, chemical engineering and environmental technology grew at a CAGR of 36.8%, 32.8%, 32% and 31.2%, respectively. The global share of pharmaceutical domestic Chinese patent applications grew from 29.2% to 39.3% from 2006 to 2010, while the global share of food chemistry patents grew from 22.8% to 38.1% over the same period. Organic fine chemistry domestic applications grew 23.3% faster than global applications annually. Other fields In mechanical engineering, handling and machine tools grew at a CAGR of 35.9% and 40.4%, respectively, while in civil engineering domestic applications grew at a CAGR of 26.7%, rising from 3,696 applications in 2006 to 10,213 in 2010. Technology landscapes Further in-depth analysis was conducted for two specific technology sectors automotive and pharmaceutical to help to identify significant trends for these areas. Automotive sector A search to retrieve all basic patents (ie, the first instance of an invention) published in China in 2010
within the automotive sector was conducted using DWPI on Thomson Innovation. This data set was then analysed in two ways: basics with a Chinese application in the patent family; and basics with Chinese priority. Domestic and foreign filings Of the top 10 companies in China in 2010 based on basic patent publications (Figure 8), three each are Chinese and Japanese, followed by the United States (two), and Germany and South Korea (one each). GM Global Tech Operations Inc tops the list with over 600 basics in 2010. The Chinese automotive companies in this list are notable for their rapid rise in prominence. Although the other companies are longstanding concerns, the Chinese companies were all founded in the late 1990s: Chery Automobile was founded in 1997, the modern incarnation of ChongQing Changan Automobile was formed in 1997 and Lifan Ind Group was founded in 1997 as a motorcycle manufacturer, with car production beginning only in 2006. The Chinese automotive landscape based on basics published in 2010 is mapped out in Figure 9 There are significant clusters for fuel, engine combustion and exhaust technology, transmission and electric vehicle technology, but the most densely populated areas are around innovation in automotive information and communication technology. On closer inspection, a significant part of patenting in this area is for navigable map technology with real-time updating of traffic information with Chinese company Beijing
Figure 11
Figure 12
Figure 13
Year All pharma Traditional medicine Non-traditional
2006 2007 2008 2009 2010
10,799 12,658 12,246 12,833 14,005
6,967 8,513 7,820 7,798 8,111
3,832 4,145 4,426 5,035 5,894
CenNavi Technologies Co Ltd featuring a number of patent applications in this field. Domestic filings In terms of domestic activity (based on basics with Chinese priority published in 2010), in addition to the prominent Chinese automobile companies described above, some other notable organisations appear (Figure 10). BYD Co Ltd is the largest global supplier of rechargeable batteries and has the largest market share for nickel-cadmium batteries. The auto division, BYD Auto, leads the field of electric vehicles with unique technologies. Domestic automotive innovation is mapped out in Figure 11. Note the prominent clusters around electric vehicle technology and circuit power control, and around more traditional engineering technology in the area of frames, plates and seat fixings, as well as gear and wheel driving shafts. Pharmaceutical sector An analysis of the global distribution of pharmaceutical patent applications in 2010 shows that China was responsible for just over 50% of all pharmaceutical patent applications published worldwide in 2010 (Figure
12). However, a large proportion of these were traditional medicine patent applications. To determine the relationship between traditional medicine and Western pharmaceutical patenting, the patenting trends for Chinese domestic pharmaceutical inventions were analysed for 2006 to 2010, both with and without the traditional medicine inventions. All domestic Chinese patent applications for the period 2006 to 2010 within the pharmaceutical sector were retrieved using DWPI on Thomson Innovation (Figure 13). China accounts for between 70% and 75% of the worlds patents in traditional medicine. However, its contribution to Western-style medicine is increasing at an average annual growth rate of nearly 13%, from 14.3% in 2006 to 23.3% in 2010. Of the top assignees in the pharmaceutical sector, seven of the top 10 organisations are academic institutions (Figure 14). Looking outwards Chinese patent applications abroad are still at low levels, but are growing steadily (Figure 15). For the first time a Chinese company, Huawei Technologies, topped the list of applicants to the World Intellectual Property Office (WIPO) in 2008. However, it
Figure 14 slipped to second position behind Panasonic in 2009, and in 2010 Huawei was placed fourth behind Qualcomm (United States, third), ZTE Corp (China, second) and Panasonic (Japan, first). Patent Cooperation Treaty (PCT) filings originating from China are growing steadily (Figure 16). According to a 2010 WIPO report, they are experiencing the fastest growth rate of applications from any region in the world (Figure 17). Looking more closely at PCT applications published by WIPO gives a view on how Chinese organisations intend to protect their innovations more broadly into international markets. The majority of WIPO filings are passed on to the Chinese patent office to be processed as Chinese national patent applications, but significant numbers also pass through to the US, European, Australian, Japanese and Korean patent offices to be processed as national patents in these regions (Figure 18). Therefore, it is clear that China is beginning to look outwards to the broader international arena for protection of its indigenous innovation. Driving forces behind the patent boom The 12th Five-Year Plan for National Economic and Social Development was released in 2011. In this plan the Chinese government lays out its strategic vision and direction for the development of China up to 2016. A key strategic priority laid out in the plan is for China to transition from Made in China to Designed in China. This is part of a long-term strategy to transform China from a manufacturing to an innovation economy. To support this goal, there are plans to develop further Chinas IP rights system and for heavy investment in science and technology education and R&D through development in seven strategic emerging industries. These are: new energy nuclear, hydro, wind and solar power; energy conservation and environmental protection energy reduction targets; biotechnology drugs and medical devices; new materials rare earths and high-end semiconductors; next-generation information technology broadband networks, internet security infrastructure and network convergence; high-end equipment manufacturing aerospace and telecommmunications equipment; and clean energy vehicles battery cell technology with a target to produce one million electric vehicles a year by 2015.
Top 10 Chinese assignees in Pharma 2006-2010
There are plans to spend more than Rmb4 trillion on these industries over the next five years, with a view to increasing the strategic emerging industries share of GDP from around 5% in 2011 to 8% by 2015. The drive for domestic innovation continues with the implementation during 2011 of the 12th National Five-Year Plan on Science and Technology Development, which also sets out a number of ambitious goals for the further development of China as a technologically advanced nation: increase in R&D expenditure as a proportion of GDP from 1.75% in 2010 to 2.2% in 2015; improvement in the ranking of citations in international science papers from eighth to fifth; and increase in invention patent ownership per 10,000 head of population from 1.7 to 3.3. Measures to support this growth in indigenous innovation include: research and development investment in science and technology aimed at achieving key breakthroughs in targeted technology subsectors (eg, core electronic devices, integrated circuits, life sciences, space, marine, earth sciences and nanotechnology); IP improvements through efforts to strengthen creation, use, protection and management of IP rights; and incentives through fiscal and financial policies that support high-tech industry, including updating management of research funding and systems for venture capital investment. The recently published Chinese National Patent Development Strategy (2011-2020) also sets some
Figure 15
Chinese patent applications abroad
Figure16
PCT filings from China
Figure 17 additional specific patent targets, including the goal that by 2015 the annual quantity of applications for patents for inventions, utility models and designs will reach two million. At current rates, China is set to reach 1.86 million publications by 2015, so this seems to be a realistic yet challenging target (Figure 19). Other specific targets for achievement by 2015 are laid out in the patent development strategy, including the following: Annual invention patents granted to domestic entities shall rank within the top two in the world. The number of invention patents owned and external patents applied for every million people will be doubled. The ratio of patent applications by industry enterprises above a designated size will reach 8%, and the number of patents owned will be increased considerably. Driven by national strategic demand, a group of essential technology patents will be pre-deployed in critical areas to support emerging industry development and the industry structure adjustment.
Country of origin 2005 2009 Growth rate
(%) 2005-2009
United States of America 46,858 46,079 Japan Germany Republic of Korea China Figure 18 24,870 29,807 15,987 16,732 4689 2512 8049 7906
-0.4 4.6 1.1 14.5 33.2
Destination of Chinese PCT applications 1994-2010 passing into national phase
Figure 19
China invention, utility model and design patent application projections to 2015
Comment Thomson Reuters 2008 Patented in China report projected that China would become the top global publisher of invention patent applications by 2012. From the revised projections in this report, that milestone is due to be passed by the end of 2011, one year ahead of predictions. This will occur not by accident, but very much by design. The five-year plans focus on driving change in the economy to ensure that in future, prosperity is increasingly built on innovation, as well as continuing to generate wealth through being the worlds major goods manufacturer. Increasingly, that innovation is being fuelled by home-grown research and development, with nearly 73% of published Chinese invention patent applications originating from China in 2010. The latest five-year plan specifically sets a target for 2015 of a combined total of two million invention, utility model and design patents (which, from current figures, is a challenging yet achievable target) and a target to double patent ownership per 10,000 people from 1.7 in 2010 to 3.3. in 2015. This indigenous innovation is also being channelled into specific technology areas and while the major growth over the past five years has been in the areas of electrical machinery apparatus and energy, digital communications and computer technology, we can expect continued growth in these areas as well as in the seven strategic emerging industry areas laid out in the latest five-year plan. Whatever the future holds, it is clear from the targets laid out in the five-year plans that innovation in general, and patents in particular, form a central plank of Chinas strategy for future prosperity.
Bob Stembridge Customer relations manager bob.stembridge@thomsonreuters.com Thomson Reuters United Kingdom
Bob Stembridge graduated from University of Sussex with an honours degree in chemistry. He joined Derwent (one of the founding components of the Thomson Reuters IP Solutions) in 1980 and has held various roles in editorial, marketing, sales and product development. After leaving in 1988 for interludes working as a senior information analyst specialising in patent analytics at British Petroleum and a European sales liaison with Dialog, he returned to Thomson Reuters in 1996 and most recently became customer relations manager, with responsibility for liaison with customer user groups for the organisation. He is a member of various groups and is secretary of the Confederacy of European Patent Information User Groups and current chair of the Chartered Institute of Library and Information Professionals Patent and Trademark Group.
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Elaine Tan Amica Law LLC
International All change at ICANN: domain names enter a new era

The Internet has had a major impact on the way in which companies do business. It is an indispensable facility for companies and businesses to share information with customers and clients and to collate and collect feedback and opinions. Companies with a significant online presence, such as Amazon, Google, eBay, Yahoo! and Facebook, are among the most valuable and successful in the world. A company can establish its online presence in a number of ways. At the heart of a companys online presence is its portfolio of domain name registrations. These allow it to create user-friendly addresses or uniform resource identifiers (URLs) which are easier for customers to remember and use in comparison to numerical identifiers. Most companies include their portfolios of domain name registrations within their intellectual assets. Thanks to some recent changes instigated by the Internet Corporation for Assigned Names and Numbers (ICANN), the vast landscape of the World Wide Web has just become more interesting and challenging for rights holders and brand owners. The amendments could have a significant impact on a companys policy as regards its domain name registrations and online brand management. Is your brand protected? Since the domain name system was first created in the 1980s, available domain names have generally been divided into two groups: generic top-level domains (gTLDs) such as .com, .edu, .org and .net; and country-code top-level domains (ccTLDs) such as .uk, .sg, .ca, .jp and .hk. Until recently, there were approximately 22 gTLDS and 250 ccTLDs; a company that wished to acquire a domain name would contact one of many accredited registrars worldwide to acquire ownership of a second-level domain in connection with one of the established gTLDs or ccTLDs (eg, yourbrand.com or yourbrand.sg). Certain conditions may be imposed for certain gTLDs or ccTLDs, depending on the registry or registries administering any particular gTLD or ccTLD and on whether any gTLD is intended for a specific sponsored community (eg, .museum is reserved for museums and .aero is reserved for companies and businesses in the air travel and transport industry). Recently, ICANN has decided to open the floodgates and allow the use and registration of potentially any word or brand name as a gTLD. This new programme will allow companies or businesses to control gTLDs for ordinary generic words (eg, .bank, .flowers or .car), company names and trademarks (eg, .prada, .apple and .samsung) or even a geographical name (eg, .beijing, .london or .mounteverest). The new gTLDs may also include the diacritical or accent marks used in some European languages and non-Latin characters (eg, Chinese and Arabic scripts). Any established organisation, corporation or institution can apply for a new gTLD. While the possibilities may appear endless for any word, brand name or trademark to be registered as a gTLD, certain features of the new gTLD regime are designed to ensure that there will not be a flood of applicants seeking to acquire new gTLDs. Several barriers to entry are likely to be high enough to deter a companys name or trademark from being used as a new gTLD by cybersquatters or frivolous applicants. From January 12 2012, an applicant wishing to apply for a new gTLD must submit an application to ICANN and pay an evaluation fee of US$185,000. Together with the application, the applicant must answer a series of questions to provide general information about itself and to demonstrate that it has the financial, technical and operational capability to use, manage and maintain the gTLD. Supporting documents to show the applicants business status and capability to maintain the gTLD must also be submitted. To assist, the Applicants Guidebook is available on ICANNs website, providing information on the new procedures. Once the application has been submitted, it will
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Brand owners and right holders would be well advised to review their trademark portfolios to ensure that their brand names and trademarks are adequately protected in the local language
undergo an evaluation process in several stages. During this process the applicant may be required to pay additional fees if specialised tests are required. The fees paid will be refunded only if the application is withdrawn during the evaluation process. At the moment, ICANN estimates that the evaluation of a gTLD application could take between nine and 20 months, depending on the extent of the tests that must be conducted in the course of the evaluation process. If the proposed gTLD passes the initial evaluation stage, it will enter the objections phase of the process. During this part of the process, any third party can object to the proposed new gTLD on one of four grounds. The dispute will be administered by established dispute resolution service providers and the applicable fees, policies and procedures for the proceedings will be determined by the relevant service provider. If the application passes the evaluation and objections phases, ICANN will consider whether any parties hold valid applications for the same or a similar gTLD string. The String Contention Panel will review whether the competing gTLDs are identical or similar. If similar, the panel will consider whether there is a likelihood of consumer confusion if two similar gTLDs are delegated to the root zone. Parties are encouraged to reach an agreement should such a dispute arise, but in the event that an agreement cannot be reached, an auction will be conducted for the contested gTLD. If the application is approved and there are no objections to the new gTLD, the applicant must conclude an agreement with ICAAN and undergo further technical tests before the new gTLD is delegated to the root zone. In addition, once delegated, the applicant (which will be referred to thereafter as a registry operator) must pay US$6,250 per calendar quarter and a transaction fee of US$0.25 for the gTLD, and must abide by the obligations and terms imposed on registry operators by ICANN. Great excitement and alarm were generated by the initial announcement of the release of generic gTLDs. Companies welcomed the possibility of managing a family of domains within their own gTLDs, yet feared the possibility that their brand names and trademarks would become new gTLDs administered by cybersquatters or opportunistic registries. But once the initial excitement dies down, there is unlikely to be a flood of applicants seeking to acquire a new gTLD using another partys brand name or trademark, given the costs and the technical challenges involved. That said, brand owners and right holders should monitor applications filed for new gTLDs to guard against their brand name or trademark being registered as a gTLD by a third party. In order to oppose the creation of a new gTLD based on an existing legal right, the opponent need not have a registration or application for the same or a similar gTLD string. Is your brand .xxx rated? In addition to allowing the use of any word or brand as a gTLD, in March 2011 ICANN approved the launch of the .xxx gTLD, intended primarily for providers of adult entertainment and adult content websites. The .xxx gTLD will be registered through the Florida-based ICM Registry LLC and, according to ICM, websites bearing the .xxx suffix are intended for companies, entities and/or organisations officially associated with the adult entertainment industry, described by ICM as the adult sponsored community. It had been said that the new .xxx gTLD could help content providers in the adult sponsored community to target their websites to a specific class of users and, similarly, the users themselves would have a dedicated online red light district to patronise by using such gTLDs. Furthermore, ICM has indicated that the online risks associated with surfing adult content could be significantly addressed by use of the new .xxx gTLD by companies and organisations offering adult content. However, there is a fear that the names of certain prominent companies or organisations may become associated with the adult entertainment industry a third party could register a second-level domain with
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ICM, thereby creating a domain such as yourbrand.xxx, and then use the domain for malicious and improper purposes. To address this, the .xxx domain will be launched in phases. In the first phase, Sunrise A, which runs from September 7 2011 to October 28 2011, trademark owners and rights holders in the adult sponsored community can apply for a .xxx domain name on providing proof of a qualifying trademark registration. Companies in the adult sponsored community with an existing domain name in another gTLD or ccTLD can also apply during this phase (ie, the grandfathering of companies in the adult sponsored community to .xxx domain registrations). Concurrently, the Sunrise B phase will run for the same period, allowing trademark owners and IP rights holders outside the adult entertainment industry to opt out of the .xxx registration system. During this period, companies and organisations that do not wish to have their company name, trademark or brand name associated with a .xxx gTLD can apply to block that company name, trademark or brand name from being registered or associated with a .xxx domain. To qualify, the applicant must have a valid trademark registration as at September 1 2011 for the company name, trademark or brand name that it wishes to reserve. At the end of the sunrise period, if there are conflicting applications under the Sunrise A and Sunrise B phases, the Sunrise A applicant will be given priority. If there is no conflicting application by a Sunrise A applicant at the end of the period, the domain name applied for by a Sunrise B applicant will have its trademark or brand name effectively reserved or blocked from registration under the .xxx registration system by third parties for a specified period. After the sunrise periods, a landrush phase will commence. Scheduled to take place from November 8 2011 to November 25 2011 and intended only for companies in the adult sponsored community, registration of a .xxx domain would be on a first come, first served basis. Apart from being a member of the adult sponsored community, the applicant need prove no other trademark or pre-ownership rights. If there are competing applications for any .xxx domain at the end of this landrush period, the issue will be decided in a closed auction. After December 6 2011 the .xxx gTLD will become publicly available and registration for domains with this gTLD will be on a first come, first served basis. At this stage, domain names with the .xxx gTLD can be registered by any party and no proof of trademark or prior rights need be established.
So what does this mean for rights holders? If a rights holder believes that a yourbrand.xxx domain would be contrary to its image or values, it would do well to apply to register a .xxx domain during the Sunrise B phase in order to block or reserve the domain name from registration by third parties. Are you speaking their language? In another development, ICANN had announced that it will also allow registration of gTLDs with non-Latin characters, such as in Chinese, Arabic and Cyrillic this move has been referred to as the internationalisation of domain names. Launched in November 2009, the expansion of available gTLDs to include internationalised domain names (IDNs) has been greeted by many as a positive move for companies and businesses to reach out to markets where the local language does not use a Latin script. Countries and registries can submit requests for non-Latin scripts to be released as a ccTLD under what is known as the IDN ccTLD Fast-Track Process. At the time of writing, 33 requests have been submitted for IDN ccTLDs, representing 22 languages. However, as yet no IDN ccTLDs have been released for registration. The rules and policies for registering a domain name under a IDN ccTLD will be administered by the country or registry administering the ccTLD at issue. Therefore, brand owners and rights holders interested in acquiring a domain name with an IDN ccTLD should monitor the release of any IDN ccTLD, as the availability of domain names for registration is likely to be on a first come, first served basis. In the meantime, brand owners and right holders would be well advised to review their trademark portfolios to ensure that their brand names and trademarks are adequately protected in the local language to preserve their earlier rights to use the brand name or trademark as part of a domain name. What does this mean for brand owners and right holders? While the new gTLDs and IDN ccTLDs have opened up new avenues for companies to enhance their online presence, the expansion of existing gTLDS to generic gTLDs and the creation of IDN ccTLDS could present companies with a whole host of challenges. Even if a company does not wish to acquire a gTLD comprising its brand name and trademark, it should still monitor the list of gTLDs to guard against possible infringements of its legal rights. In the case of domain names registered in a nonLatin script, a company may find its rights and options limited if there is no known translation or equivalent of
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its brand name or trademark in the local language. Before the launch of any IDN ccTLD, a company may wish to protect its rights and build brand awareness for its trademark and brand name in the local language by registering and using a version of its brand name and trademark in the local language in order to establish prior rights to the trademark and brand name in that language.
Elaine Tan Director elaine.tan@amicalaw.com Amica Law LLC Singapore
Elaine Tan is a director in the litigation and enforcement practice group of Amica Law LLC. Before joining private practice in 2000, she was a deputy public prosecutor and state counsel in the Attorney Generals Chambers and was a partner in a large Singapore firm before joining Amica Law in 2007. Her main areas of practice are IP protection, litigation and enforcement. As well as being an experienced litigator, she also assists clients in the management of their trademark portfolios and the development and administration of anti-counterfeiting strategies for various clients. She is a member of the International Trademark Association and MARQUES, and currently serves on two practice committees of the Law Society of Singapore. She has spoken at various events and is currently an external adjunct lecturer in a local polytechnic.
Jean-Franois Bretonnire and Thomas Defaux Baker & McKenzie
International Doing business through social media: much to gain, but a lot to lose
Most companies, whether multinational corporations or smaller entities, now recognise the benefits of social media in doing business. By revolutionising the way in which companies communicate with existing and potential customers, and by offering a means of interacting with consumers who could not be reached by traditional means, social media has become an indispensable tool for modern marketing. However, not all players have understood the challenge of properly managing their advertising messages through such media, while simultaneously protecting their intangible assets and reputation. These factors are even more important in light of: the increasing number of social media users (there are 800 million Facebook accounts, 200 million users on Twitter, more than 500 million on Qzone and more than 230 million on Weibo); the pace at which people use these tools; and the strong impact of newcomers (in September 2011 Google+, created in 2011, had 40 million accounts, while in the same month Foursquare, created in 2009, had more than 10 million accounts). A key issue to have emerged is one of liability and exposure: the need to understand the full risks of using social media and to take precautions to protect players rights and interests. Some of the risks related to social media are obvious, such as protection of the companys online reputation or the issues related to employee use of social networks, but other aspects are much less considered, as is often the case with IP issues. Protecting your rights through preliminary steps In order to limit most of the social media risks related to IP issues, several preliminary steps should be addressed before doing business using social media in order to ensure the protection of the companys IP rights. These prior steps mainly consist of ensuring that trademark rights have been registered, but also include verifying the protection of domain names, corporate names or trade names. The most efficient title in relation to the protection of a name or sign on the Internet in general, and on social media in particular, is undoubtedly a trademark. Indeed, in the policies of most social networks, trademarks often benefit from the strongest protection and are the easiest right to enforce in comparison to copyright or other exclusive rights. Social media players are often quicker to react when facing a title emanating from a public office than when facing copyright. However, not all trademarks have the same strength when it comes to social networks. First, the choice of what should be registered as a trademark is important for example, a company should register not only its name or logo, but also the name of its flagship products or services. The second question to be addressed is where to register the trademark. The obvious answer is to designate the key territories of activity for the goods and services. However, being properly protected on social media networks also implies registering trademarks in the territories with the largest number of social network users (mainly the United States and Europe, but also Asia). In so doing, it is essential to register the right trademark for the right market. For example, a company operating on Chinese social networks, such as Renren or Weibo, should register its trademark locally in both Chinese and Roman characters. The terms of use of the targeted social networks may also influence the place where a trademark is registered. For example, Facebooks terms of use are governed by the law of California, and some social networks will be more likely to enforce a US federal trademark or will allow US federal trademark owners to make stronger demands in comparison to owners of trademarks from other countries. The final issue to address when filing trademark registrations for operating business on social media is choosing the right goods and services to designate. The obvious choice is to designate the key goods and services exploited by the company. The selection must take into account the requirement of use and the risk of cancellation for non-use found in most trademark legislations. However,
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the major question is whether it is necessary or even useful to register a specific trademark for social media services, such as those of Class 38 (telecommunications services), Class 41 (eg, online journals and blogs) or Class 42 (eg, providing online computer databases). This question is addressed differently by different countries and the answer can usually be found by analogy with the solutions used for domain names. However, the most common answer is that it is useful and sometimes necessary to register a trademark in one of these classes if the company actually acts as a provider of such services. That said, registering such a trademark for these classes of service will be insufficient to oppose any use of that trademark on social networks as a result of the principle of specialty. User names are the names under which each user is identified and are also sometimes used to create specific URLs, such as www.targetedsocialnetwork .com/mytrademark. Since they often work on a first come, first served basis, the registration of a companys name, key trademarks and flagship product names as user names on popular social networks is a priority to avoid various forms of cybersquatting. Even though most social networks apply policies which enable rights holders to claim or report user names that infringe their rights, this is not always an easy process and the conditions for doing so may be very restrictive. For example, while some social networks will merely request evidence of ownership of a trademark corresponding to the misappropriated name, others will require evidence that the account is also used in a manner that creates no likelihood of confusion with the registered trademark. These differences are often a result of how much the social network values its own relationship with trademark owners. Identifying and tackling infringement Once these rights have been protected, it is also essential to set up monitoring programmes to detect unlawful or detrimental use on social networks of the signs protected as trademarks. Such monitoring, which can be done internally or through an external monitoring service, should cover at least trademark infringement, dilution and the sale of counterfeit goods. Some social networks such as Facebook have recently made the work of trademark owners harder by allowing Community Pages and by allowing users to tag trademarks in their pictures, which are difficult for trademark owners to follow and control, thereby requiring intense monitoring. Social networking websites are fertile ground for IP rights infringement, which may originate from competitors, past or current employees or customers.
Such unlawful use of a companys rights can take many forms: unauthorised use of a trademark or company name as a user name or profile name or in the name of a page or account; using a logo as a profile picture; or posting pictures of fake products in a pages content. These unauthorised uses can be extremely harmful and can result in both infringement and dilution, by which the trademark loses its distinctive quality or tarnishment, which in turn causes harm to the trademarks reputation. However, not every unauthorised use of a name covered by a trademark registration constitutes trademark infringement. In order to be infringing, such use must: be for identical or similar goods or services; be considered as use as a trademark; and harm the trademarks function of indicating the origin of the goods. Dealing with trademark or other IP rights infringements on social networks also requires a certain degree of care and a different approach to that generally taken in other areas. Doing business on social networks, a brand owner must allow customers and users to quote the trademark and to make comments about the products or services. Being over-zealous about such use may lead to a severe backlash from genuine fans or followers. Indeed, it is not unusual for social network users who infringed IP rights innocently to receive strongly worded cease and desist letters and then to post such letters on their blogs or accounts, triggering negative comments from other users. As a result, trademark owners are often accused of bullying and are shamed in public by social network users. Therefore, it is necessary to adapt the answer to such use and to apply strong means only when the unlawful use was intentional or clearly intended to cause harm, and to take a softer approach in other circumstances. Social media is not only fertile ground for IP violations; it is also an arena where companies can easily find themselves in the position of the infringer. Once a company has organised the protection of its essential assets, there remains the question of the content. Each social media website provides space for a company or a specific brand to interact with its customers. This interaction requires content, logos, photographs, background themes and articles. All this content is protected by copyright, which raises many questions, particularly in countries where the work for hire principle is not followed as opposed to Japan, the United States or the United Kingdom. In France, for example, the mere existence of an employment agreement does
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not affect the ownership of rights over the works created by the employees. Therefore, in such cases, it is necessary to ensure, in compliance with the applicable law, that the company has acquired all the rights necessary to use copyrighted content online and that it is infringing no rights by posting works or referencing webpages. In addition, it is highly recommended to enforce a clear and strict internal policy on the use of the companys name, trademarks and any company material by all employees, not only by community managers (for whom the rules should be even more specific). Many employees have placed their companies in embarrassing or potentially liable situations by their posts or comments on social networking websites, sometimes even in cases when they honestly believed that they were acting in the companys best interests. One key issue is how to deal with user-generated content (UGC), which is at the heart of the social media relationship between companies and customers. Most UGC consists of short comments or tweets which rarely reach the threshold of originality. However, the position may be different when dealing with several posts or with different materials, such as photographs. The use of UGC by a company to promote a product must be done with care. For example, asking customers to tell a story about their relationship with the brand or about their use of a product to be used to promote the brand or product, requires that such use be provided for in terms and conditions that users must accept before they post such content.
Comment Social media presents many advantages for companies and offers many opportunities, which some players have grasped more quickly than others (thus explaining some of the differences between conventional brand rankings and the Facebook brand statistics). However, these possibilities entail great risks and constitute a major challenge to companies trying to protect their IP rights. The challenge can be tackled only through strong efforts both to ensure a strong presence on social networks, thereby preventing other players from taking advantage of a gap, and to limit potential damage to the companys rights. Such efforts are required at every stage: in the preliminary steps to protect rights and reserve names; in entering into and maintaining contact with social media players; in monitoring the rights of the company on the social network; in adapting to new players and their various policies and policy changes; and in finding the appropriate solution to the unlawful use of an IP right. The scale of the required effort is often discouraging to rights holders, particularly when coupled with other issues raised by social media, such as privacy, data collection or labour law. However, such effort may seem very small in comparison to the opportunities provided by social media when it is properly used.
Jean-Franois Bretonniere Partner jf.bretonniere@bakernet.com Baker & McKenzie France
JF Bretonniere heads the firms French IP practice group. His practice focuses on the protection and exploitation of IP assets, including soft and hard IP litigation in the French and European courts. He has experience in various industries, with an emphasis on business alliances concerning IP rights. Mr Bretonniere speaks French, English and Japanese, and has practised in both Asia and Europe. He was appointed counsellor for external trade by the French Ministry of Economy and Finance.
Thomas Defaux Associate thomas.defaux@bakernet.com Baker & McKenzie France
Thomas Defaux joined the Paris office of Baker & McKenzie in 2010 as an associate. He specialises in industrial property and IP law, including trademark and patent licensing, research and development agreements and patent and copyright litigation. Mr Defaux graduated from the University of Paris II Panthon-Assas (postgraduate degree in intellectual property) and the University of Oxford (Diploma in Legal Studies).
Hamilton Brook Smith & Reynolds PC John L DuPr
International Worldwide trademark protection: coverage versus costs

When it comes to international trademark protection, business people are rightfully concerned about two things. The first is having protection in countries where it is critical to safeguard the use of important marks; the second is paying thousands of dollars for protection in places where this cost is simply not justified. This chapter focuses on how to can make an intelligent determination of an appropriate level of protection and the considerations that go into that determination. Companies involved in international commerce find that trademarks can play an important role in their success as they expand their markets from country to country. Trademarks can create strong and consistent messages in the minds of consumers and can signify a high level of quality for the products and services being provided. Once a trademark has been established in the minds of consumers, it carries with it a wide array of information regarding the producer, the nature and type of product and the expected level of quality. With the increasing mobility of consumers across international lines, established trademark significance can be one of the most important factors in a companys success as it attempts to expand the range of its sales. It is clear, for example, that when McDonalds opens a restaurant in Taiwan, it is relying on the recognition of its trademarks in the minds of travellers to Taiwan from other countries, as well as in the minds of travellers from Taiwan who have seen the mark and experienced McDonalds in other countries. By themselves, trademarks can perform a significant amount of marketing without requiring rights holders to engage in expensive print or media marketing: secondary meanings are evoked in the minds of consumers at a cost that is significantly less than a marketing campaign. How to take best advantage of this significance? It is a rare company that does not intend to grow, and for many companies the best potential for growth lies across international boundaries. However, trademark rights generally exist only on a national basis. Thus, rights that exist in the United Kingdom may not exist in the United States, unless the rights holder takes action to protect its marks in the United States. A rights holder that has not taken the appropriate steps to protect its marks in a foreign country should not expect to have rights there. Another entity could secure rights in that trademark to the detriment of the initial owner. One of the first issues that a rights holder faces is how its rights arise and can be protected. The situation is not the same for all countries. In the United States, for instance, trademark rights arise based on use of the mark. While you could file an application to register a mark in the United States based on intent to use, rights are not established until actual use takes place. An intent-to-use application, once it is allowed, will not issue as a registration until a statement of use is filed and the scope of the registration will be limited to the scope of goods or services for which the rights holder has actually used the mark. Further, in the United States and a few other countries, trademark rights can arise by common law without the need to file an application. These common law rights could serve as a basis for pursuing infringers and for preventing another entity from registering the mark. While there are significant advantages to registering a trademark, even in common law jurisdictions, there is no absolute need to obtain registration as there is in many other countries. However, in other countries, such as France, Germany and China, trademark rights arise only once an application for registration has been filed. Even if your company is the prior user in those countries, if a subsequent user registers your mark first, it will be in a position to prevent you from using the mark and selling products under that name in that country. Thus, to the extent that a company wishes to use its mark on any substantial basis in other countries, it should invest the appropriate resources to register its trademarks there. In countries where rights arise based solely on registration, there is no need actually to use the mark before the registration issues. Generally, the owner of the registration has between three and five years in which to
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commence use in order to secure the registration. In the absence of such use, the registration is not automatically cancelled, but is susceptible to a claim for cancellation by another party that can assert a claim of non-use. Thus, while registrations need not be used in the first instance, there may be difficulties in maintaining the registration if the mark is not ultimately used in that country. For such reasons, a company should not automatically file for registration in all jurisdictions where the mark could be registered, because there is little value in registering your mark in a country where you do not at some point intend to use it to promote your products. Indeed, the projected level of use is one of the key factors in determining where to register a trademark from among the 100-plus countries that could be selected. On what basis should a company choose countries in which to register marks? One question that a company should ask itself is: Are the sales of my products in a particular country currently, or projected to be, at a level at which it would be significant for me if another entity registered my trademark and thereby forced me to sell my product there under a different brand name? Put another way: In light of the sales volume in that country, how much of an expense could my company absorb to register the mark? The minimum bottom-line cost per country would be in the order of $1,000, or between $4,000 and $5,000 if cancellation or opposition proceedings are involved. The answer to the question, What is the amount of actual or projected sales that is necessary to justify a trademark filing? will differ from company to company. If the sales are either non-existent or so small that a change of brand for that particular country is not a material factor, then filing for registration is not justified. One company may consider sales of $10,000 sufficient to justify the expense of filing, while another may decide that it needs many times that amount before proceeding. How does protection factor into the decision of where to register? In addition to the benefit of securing your companys right to use the mark in a particular country, a further factor to consider is the extent to which your registered mark can serve to prevent other entities from selling their products in that country under your mark. Generally, the question to be considered is whether another companys mark is likely to be confused with or is substantially similar to your registered mark. In such case you would be able to oppose or contest another companys use of the mark in that jurisdiction. This could be of substantial value to a company when it is attempting to secure an
exclusive position in the minds of customers for marks that are similar or confusingly close to its trademark. However, the scope of protection against infringers is not the same in all countries. Under US law, a registration can issue only for goods that have actually been used under the mark. When pursuing an infringer, the rights holder is not limited to pursuing infringers for the goods actually set forth in the registration, but can pursue those that use a similar mark on complementary or related goods when confusion is likely. In contrast, in many countries the ability to pursue infringers is limited to the goods set out in the registration, even if it can be shown that confusion in the minds of consumers is likely. If the infringers goods were not covered by the original registration, a claim of infringement will not stand. In countries such as Japan, the trademark office has determined categories and classes of product that are deemed to be overlapping in the marketplace and other categories of product even some in the same class that are deemed to be sufficiently distinct so that there is no confusion. Regardless of the circumstances in the marketplace and whether there is consumer overlap, if the products are sufficiently different under this predetermined categorisation, then infringement will be deemed not to exist. How can a company get the best value from its trademark filing fees and expenses? Once the company has developed its list of countries in which it wishes to pursue registration, and has decided that the value and amount of business in each such country justifies the expense of filing for registration, the question then becomes: what is the best strategy for securing those registrations while also minimising the cost for obtaining effective coverage? As noted above, trademark rights are for the most part national, and thus registrations should be sought in each country. The company should start by filing for registration in its home country. Under the appropriate treaties, the company will then have a six-month priority deadline for filing applications in other countries. The advantage of this priority claim is that the rights holder will be deemed to have filed in the other countries on the same date as the filing in its home country. This priority claim is particularly important in those first-to-file countries where the filing date determines rights. However, there are a number of significant filing strategies by which a company can obtain rights in more than one country with a single filing. These multicountry filings allow a company to obtain significant benefits in a number of countries at a cost that is
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substantially less than that of individual filings. For example, a single Community trademark filing can provide coverage in 35 European countries at a cost equal to filing directly in only about four or five of them. This registration is accomplished with a single filing, single examination and single registration fee for all 35 countries. Once registered, the registration gives coverage in all 35 countries and is subject to a single renewal due in 10 years. Thus, the Community trademark is a substantial advantage for companies seeking protection across multiple jurisdictions at significant savings. How can Madrid Protocol filings help provide broad protection at a lower cost? Another way in which rights can be obtained across multiple jurisdictions is to file for registration under the Madrid Protocol and designate countries under that process. Nearly 80 countries have signed up to the protocol and the cost of filing depends on the number of countries designated in the filing. Filing takes place within the trademark office of the companys home country and priority claims for filings within six months of the basic home country filing are recognised. The costs of a Madrid Protocol filing are significantly less than the costs of filing direct applications in each of the designated countries; even the European Union can be designated in a Madrid Protocol filing at a reduced cost. One of the downsides of a filing under the Madrid Protocol is that the listing of goods to be covered can be no broader than the list in the home country registration. This is a particular issue for US applicants, where the scope of the home registration must be limited to actual use. A Madrid filing also differs from a Community trademark filing in that after the international registration issues, the World Intellectual Property Office notifies the designated countries that protection is being sought there. The mark can then be subject to separate examination and opposition procedures in each of those countries. However, once the examinations are completed, the requested grant of protection will be
extended to one or more of the designated countries for which protection was allowed. At that point, the international registration in the approved countries will be subject to a single renewal fee, which is substantially cheaper than renewing individual registrations in each of those countries. An additional aspect of the Madrid Protocol registration is that it continues to depend on registration in the home country. Thus, if the home country registration is either cancelled or not renewed, the international registration and coverage in all designated countries will also fail in the absence of further action. Combining national and multinational filings In a number of countries, multiple filings are simply not available because the country in question is not a member of the European Union or of the Madrid Protocol. For such countries, including those in South America, as well as Mexico and Canada, trademark protection is available only through direct national filings. For countries in which options of multi-country filings exist, determining the desired scope of protection in each country, the independence of the registrations and the costs involved may lead a company to choose different strategies depending on the marks they need to protect. For example, while protection throughout the European Union could be sought under the Madrid Protocol, there may be circumstances in which broader protection could be obtained under a separate Community trademark than could be obtained through a Madrid Protocol filing designating the European Union. Conclusion Each of the above factors should be carefully considered by a company when it adopts an individualised filing strategy for international trademark protection. In this way, a company can get the best value and customised protection from its investment and avoid concerns about protection that is either too limited or too expensive for its business needs.
John L DuPr President and principal john.dupre@hbsr.com Hamilton Brook Smith & Reynolds PC United States
John DuPrs practice focuses on IP litigation and trademark prosecution. Since joining the firm, he has been involved in patent litigation, patent interferences, International Trade Commission proceedings, trademark and trade dress litigation, trademark oppositions and cancellation proceedings, and copyright litigation. Mr DuPrs expertise also includes IP portfolio strategy and counselling, due diligence studies and opinions, audits, trade secret advice, alternative dispute resolution, non-disclosure agreements, technology transfer, consulting, employment and community interest agreements.
Jochen Bhling Krieger Mes & Graf v der Groeben
International Key considerations in transnational patent litigation

At first glance, the issue of transnational patent litigation appears to be of interest only to patentees, who are interested in designing a strategy to make optimum use of their intellectual property and to enforce their rights. However, this topic is equally important from the perspective of a potential defendant. As part of a comprehensive strategy, companies must consider weaknesses and strengths which may be used to defend against attacks from patentees. This may include actions outside the jurisdiction where a patent case has been initiated. A controlled escalation of a dispute can help to put an end to the whole dispute much more quickly than proceeding through an extensive litigation process. Therefore, in this context the key considerations for transnational patent litigation also play a significant role. The issues to be considered may seem obvious, but nevertheless have their own delicate facets. It is important to examine these issues and consider how they are intertwined in order to develop an optimal strategy. Starting point The starting point must be a careful analysis of the problem to be solved. Is it only the infringement of a patent by a competitor? Is it a defence against an attack for alleged infringement of a competitors patent? Is it a general consideration of the market situation? This analysis is more of a business decision than a legal decision, although legal considerations have a strong impact. However, the overall strategic goal must be the driving force for any subsequent legal analysis. Existing patent portfolio The existing patent portfolio will be decisive. In principle, litigation is an option only where there is a patent or utility model. This seems so obvious that one may wonder why it is mentioned. There are two reasons. First, it may be tempting to overlook weaknesses in the patents when it comes to their enforcement, and instead simply rely on the existence of the patent. Second, the fact that there is no patent in a jurisdiction may not necessarily exclude actions. In specific circumstances it may be possible to extend the portfolio within a relatively short timeframe. For example, German law offers the possibility to branch off a utility model from a pending patent application (national or European). If a patent application encounters problems in prosecution, the observations and objections raised by the examiner may be taken care of not only by amending the patent application, but also by filing a corresponding utility model. This will quickly lead to an enforceable title and will offer the opportunity to enforce rights even before the patent has been granted. Another consideration is other types of IP right and remedy. Although they may not be the first choice, design rights or rights under the unfair competition regime may be used to flank patent actions, thus broadening the scope of the attack and offering a flexible way to achieve strategic goals. Evidence Often patentees seek advice against an infringer based purely on a conviction that infringement has occurred. Sometimes, once they are confronted with specific questions as to the evidence that they can produce, it becomes apparent that the evidence will not be strong enough to support their claims. In this situation, ways to obtain additional evidence must be considered. This may be done in the jurisdiction chosen by the patentee. Another option is to try to make use of tools which are available in other jurisdictions. Some jurisdictions may require that there be at least patent protection in that country, while others may require the commencement of infringement action there as well. Although this appears to be an additional and unanticipated burden, it may be helpful in order to produce the missing evidence which can then be used simultaneously in the jurisdiction originally sought. Under certain circumstances it may even be
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possible to start actions to gather evidence without having to file an infringement action before the court. Discovery may be a strong tool in this context. In the United States, discovery proceedings may be started if there is a sufficiently close relation between the parties to the discovery and the parties to the litigation. US discovery may thus help in proceedings abroad even if there is no infringement action in the United States. The same ideas apply to the defendant. When litigating in one jurisdiction, the defendant should also carefully assess options which could provide further evidence for its position outside that jurisdiction. In many jurisdictions evidence gathered abroad is admissible and cannot be denied by the other party, provided that the procedural aspects of gathering the evidence have been observed. Assessing validity The assessment of validity is crucial in regard to the decision to include a patent in the litigation. In transnational litigation the validity of the patent and its foreign counterparts may vary across different jurisdictions. The assessment must comprise substantive questions and procedural aspects. First, there are significant differences in various jurisdictions with regard to how the validity of a patent or utility model can be brought into the litigation by the defendant. While most jurisdictions deal with the invalidity as part of the infringement case, the German system separates the infringement case from invalidity action. The latter is subject to the exclusive jurisdiction of the Federal Patent Court. The civil courts (ie, the district court at first instance and the court of appeals at second instance) are bound by the administrative act of the grant of the patent and may not rule on invalidity. If they are convinced that a patent is invalid, they may stay only the infringement proceedings. Other jurisdictions may have limited options for invalidation of a patent (eg, re-examination in the United States, although the new America Invents Act will introduce a post-grant opposition into US law for the first time). It is imperative to anticipate possible invalidity arguments when selecting the patents for litigation. Another consideration is the possibility of amending the granted claims during proceedings. The defences raised against validity may give rise to amendments of the granted claims. However, some jurisdictions are rather limited in their opportunity to amend claims. Post-grant amendments are often not allowed if they incorporate new features into a claim which go beyond a pure combination of the granted main claims and sub-
claims. It is therefore important to look at these options in general before choosing a specific jurisdiction for litigation. Since it can never be excluded that the defendant will find prior art which was not previously known to the patentee, the possibility to amend claims must be taken into consideration as one of the key factors when deciding about transnational litigation. Transnational litigation The purpose of transnational litigation is to exercise effectively the rights conveyed by the patent so that the overall strategic goal is achieved. In many cases this goal may be to force the defendant to negotiate a settlement agreement. Nevertheless, this can be pursued seriously only if there is sufficient pressure on the defendant. Consequently, the remedies available in a particular jurisdiction in cases of patent infringement are of great importance. Industry has become concerned about developments in US case law regarding injunctions in patent infringement cases. Similar discussions have been initiated in Europe. However, the EU IP Rights Enforcement Directive (2004/48/EC) still provides a range of remedies, including injunctions, so that at present the patentee may be denied an injunction only in exceptional cases where the exercise of patent rights could be considered to be abusive. Damages also play a significant role. There is an equally broad range of options across the various jurisdictions. A patentee whose rights have been infringed may seek reasonable royalties from the infringer, but in some jurisdictions may also request double or treble damages (punitive damages). The conditions for claiming damages also vary greatly. While in Germany, a patentee can generally backdate damages to the date of the patent grant, other jurisdictions such as the Netherlands require that the patentee send a notice to the defendant. In that case, damages may go back only to the date of the notice. Clearly, this has a major impact on how seriously the litigation will be taken by the defendant and will thus influence the patentees decision. Similar issues arise when it comes to other remedies, such as the recall of infringing products from the market, the destruction of stock, the request of information about customers and other business information related to the infringing acts and actions outside the infringement action. In particular, this relates to criminal actions or actions with Customs (border measures) to prevent the import of infringing goods into the specific country.
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Procedural issues As part of a patent strategy, procedural issues must also be considered. When opting to litigate in several jurisdictions at once, it is crucial to be aware of the peculiarities of the proceedings available in each jurisdiction. The efficient enforcement of patents requires the effective use of the procedural tools available in each jurisdiction. Some issues that arise in the context of obtaining evidence have been mentioned above. Pre-trial discovery can help to support the claims. On the other hand, it may also be rather time consuming and thus may delay litigation, which will have a significant impact on the entire strategy. Another consideration concerns the plaintiff. In some jurisdictions it may be wise not only to start the litigation on behalf of the patentee, but also to include a licensee (in general, the local affiliate of the patentee). Although this may require certain additional preparations, it may turn out to be more effective or even less complicated. In particular, claims for damages can create problems when the patentee is not active on the market. Therefore, it may be wise to include the affiliate (or other licensee) which actively works the patent in the country of the litigation as a plaintiff. The question of separating infringement and invalidation actions has already been mentioned above. This is a matter of both procedural and substantive law. Timing and costs Timing and costs are issues which all patentees must consider. Careful budgeting and the close monitoring of costs are crucial. The budget for a certain case may be used for only one jurisdiction or may have to be split among several jurisdictions. The financial requirements of a transjurisdictional action depend on what actions are planned in the different countries. The decision as to which actions should be taken is based on weighing up the various aspects, including the timing of proceedings and their costs. In any given case it may be advisable to limit the actions to one jurisdiction if the timing would not be right. On the other hand, good timing and an effective overall strategy may justify transjurisdictional litigation, even if it may result in higher financial costs and risks. Another key issue with regard to timing is how to start transjurisdictional litigation. In general, a patentee will aim to file the actions against the targeted defendant simultaneously. In exceptional cases there may be good reason for staggered actions. In particular, this is necessary when a quick start is desired, which may not be achievable in all the targeted jurisdictions. A
quick start in one jurisdiction will send a signal to the defendant, which cannot be sure that no further actions will be started in either the same or other jurisdictions. This decision will also be affected by the varying timeframes required for litigation in the different jurisdictions. If the patentee knows that more time will be needed in one country than in another, it may start the litigation there and commence litigation in other jurisdictions in stages. Close communication between all legal advisers in the various jurisdictions is vital. Precise coordination is needed, and should be left to one of the plaintiffs external advisers. Experience shows that arguments made in one jurisdiction can be detrimental to the same case in another jurisdiction if they are not carefully checked by advisers in all jurisdictions involved. At the same time, the patentee should not lose sight of the defendants options for countermeasures once it faces litigation. The patentee must try to avoid counteractions which may block the start of further litigation in other jurisdictions. Defendants strategy Once confronted with patent litigation, the defendants first task is to counter the plaintiffs arguments and find ways to support its own position, either by denying infringement or by challenging the validity of the patent in dispute. Other defences, such as prior user rights or compulsory licences, may also be an option. However, this should not be the end of the defendants strategy. On the contrary, possible counteractions and counterclaims should be considered. Such actions are not limited to the jurisdiction in which an action against the defendant is already pending. The defendant must evaluate all available options, including those in other jurisdictions. Depending on the specific circumstances, there may be good reasons why the dispute could be transferred to another level this allows the defendant to open up new areas of the dispute. To some extent, initiating counteractions in another jurisdiction will take the plaintiff by surprise and may give the defendant some momentum in its defence. Counteractions need not be connected to the patents which are already in dispute. There may even be other technical fields in which the defendant has a strong position which it can then leverage against the plaintiff. However, parties should be careful not to get caught up in numerous attacks which may tie up too many resources. Any counterstrike must be effective in itself and should not lead to an overly complex dispute. The relevance of the counterattack for the business is key.
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Comment The considerations discussed in this chapter must be seen as part of a strategy to gain maximum flexibility for a party without being exposed to unforeseen and unnecessary risks. It is the role of the legal adviser to make clients aware of those risks. Any decision to be taken by the patentee must be an informed one, taking into account the considerations listed herein so that the overall strategic goal can be achieved with as much flexibility as possible.
Jochen Bhling Partner info@krieger-mes.de Krieger Mes & Graf v der Groeben Germany
Jochen Bhling focuses on patent and trademark law. Mr Bhlings practice involves national and cross-border litigation and counselling. His clients range from multinational companies to small and medium-sized enterprises, and he has been involved in a number of cases involving patent rights and standards, including one of the first cases to be heard before German courts invoking standard-essential patents. Until October 2010 Mr Bhling was reporter general of the International Association for the Protection of Intellectual Property.
Paul-Alexander Wacker Kuhnen & Wacker
International Milestones for improving the protection of SME innovations

Although there has been substantial progress in harmonising IP regimes both across the world (with the Patent Cooperation Treaty (PCT) (1970), the Agreement on Trade-Related Aspects of IP Rights (1994) and the Singapore Treaty on the Law of Trademarks (2004)) and in Europe (through the European Patent Convention, the Community trademark, the Community design and the EU IP Rights Enforcement Directive (2004/48/EC)), there is still a long way to go. Even once the proposed US patent reform and the long-awaited European patent have come into force, this is still likely to be the case. The disparity between the old world of Europe with its strict objectivity and the United States with its subjective national approach on the one hand, and the new world of the BRICS states (Brazil, Russia, China, India and South Africa) and Japan and Korea, with their flexible approach to IP rights on the other, presents a major challenge to entrepreneurs and managers: to adjust their strategies quickly in order to participate in the global race for the most innovative and environmentally friendly products and services. It is pointless to waste effort and money dealing with the existing practical differences between EU member states, which always defend their nationalistic positions while seeming unaware that if their legal and economic frameworks were adjusted to the needs of the entrepreneurs and small and medium-sized enterprises (SMEs) in their countries, they could help Europe and the United States to progress innovatively. The European Commissions main task is not only to attempt to balance the differences between member states with respect to security, bureaucracy and free trade, but also to monitor the performance of issues such as the common currency and economic competiveness, which includes job creation that is, the stabilisation of the creation and growth of SMEs. Some of the more innovative states have learned their lesson and have shifted their focus towards the creation of a global IP infrastructure and the sharing of work in order to deal with the huge amount of work resulting from the global increase in patent and other IP rights applications. However, these efforts are not enough to achieve simplified application procedures and cost reductions in this ever-growing area of protection. Neither open source nor open innovation movements can meet the real needs of globally competitive companies. Rather, the only answer is to implement legal frameworks which enable interested parties, particularly SMEs, to obtain fast and reliable prosecution (eg, by providing enough examiners) and which avoid the bureaucracy that can kill off the entrepreneurial and inventive spirit before the grant of a patent or other IP right. European officials (eg, examiners, appeal board members and judges) must adjust their daily working routine in order to consider applications subjectively and humanely, rather than narrowly interpreting outdated bureaucratic rules, so that important inventions and innovations can still be protected despite formal deficiencies in applications. The same is true for managers of major corporations, who must recognise that corporate compliance rules should include not only sustainability and long-term thinking, but also fruitful cooperation with SMEs, rather than subversive attacks against the innovative power of SMEs. This would provide real hope for allied efforts in the globally competitive world of IP rights and would provide new resources through trusted insourcing. This includes fair behaviour; for example, the fair, reasonable, and non-discriminatory terms that are commonly accepted in regard to standards must become equally accepted in regard to joint ventures and research cooperation. Between 2000 and 2006, major companies (3% of all patent applicants) increased their share of total patent filings from 50% to 60%, while the share of filings
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attributed to SMEs (the other 97% of all applicants) fell to 40%. These figures prove that SMEs are losing ground in the ability to defend their growing innovative power. While litigation frameworks in various jurisdictions hinder SMEs through high litigation costs, SMEs stemming from family businesses will continue to die out. For example, in the United States, each party to a patent litigation must bear its own costs, no matter whether the case is successful, so that a US SME must spend between $3 million and $5 million to protect its patent. Without amended rules to allow SMEs to grow, there will be no US economic recovery this is a view is shared by US Supreme Court judges. In Europe, some countries still have a strong SMEbased economy (eg, Germany, Austria and Denmark). However, in order for the governments of other countries to support or build a strong SME-based economy, which can create stable new jobs, the following goals must be achieved (at minimum): the fast and worldwide consideration of prior art; reasonably priced official IP fees; the fair distribution of financial risks between litigating parties; faster IP court proceedings (at both national and European level); nullity proceedings with technical experts on appeal; the obligatory valuation of IP assets in balance sheets; obligatory but simplified proof of use of trademarks; harmonised tax preferences on income resulting from IP rights; full (European) IP harmonisation, with a combined utility model system; international online exchange of prior art during examination; (inventors) grace period of 12 months; and online access to all published patent documents in English. In Germany, hidden champion SMEs can overcome pressures from competitors, major corporations, labour unions, finance authorities and bureaucracy by employing highly motivated inventors and consultants to make the most of Germanys well-established and highly developed IP system. This has led to 80% of European IP litigations being handled in Germany. Unfortunately, many SMEs have now given up the race to secure innovative results even though the combination of patents, utility models, designs and trademarks could have been a healthy basis for a more competitive edge.
Germany is still the only remaining country where a patent examination can be postponed for up to seven years, which allows applicants to speed up or delay the patent examination procedure depending on research and development (R&D) results and the marketing progress of the product at issue. A European-wide utility model may be branched off from or combined with a pending unified European patent, a PCT application designating the European Union or an application in a European patent member country. This allows SMEs from all over Europe to develop their competitive skills and thereby contribute to new European-wide cooperation and job creation, while simultaneously defending against non-EU counterfeits. A maximum patent duration of 10 years, as in Germany, could help to cover the core duration of patents. The efforts of the European Commission in creating the Community trademark, the Community design and the IP Rights Enforcement Directive have resulted in major success, and have thus made a huge contribution to keeping European companies in the global race. In addition, for 40 years the European Commission has pushed for the European patent and the European Patent Court against nationalistic egotism, particularly from those EU member states which are unable to balance their own economic systems and which, as a result, expect other states to subsidise their spending deficits. Fortunately, 25 of the 27 EU member states have now finally agreed on enforced cooperation for the single European patent and the European Patent Court (Italy and Spain are the two dissenting countries). The European Patent Court would be a major achievement and would allow for unified case law across Europe, issued by highly trained judges and technical experts. It is vital for competition between different courts to be maintained, at least at first instance. For example, in recent cases, before granting a preliminary injunction the Dusseldorf court has requested second patentability tests for patents which have successfully survived opposition or nullity proceedings. Luckily, this undermining of the work of patent examiners and patent attorneys has not been followed by the Munich or Mannheim courts (Dusseldorf, Munich and Mannheim are the three most important German patent courts). A user-friendly language regime (with an application filed in the applicants native language, followed by a sworn English translation within 12 months), supported financially by the European Commission in regard to the translation costs, could: broaden the knowledge base of SMEs in regard to emerging technologies and markets across Europe;
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The only answer is to implement legal frameworks which enable interested parties, particularly SMEs, to obtain fast and reliable prosecution
help to build a broader base of technical information on the Internet; and result in more IP experts by training them using different national patent translations. SMEs do not enjoy a six or 12-month grace period in Europe for patent applications. SMEs do not receive language support for the different European languages, while SMEs in most of the major countries outside Europe have the advantage of using a single language. SMEs do not have the staff resources for IP litigation and forum shopping. It is time for a new European IP policy which compensates for some or all of these disadvantages. Other countries have made moves towards this for example, the Chinese government supports its applicants in foreign PCT filings and in the following national phase. It is, of course, necessary to avoid duplication in the international patent system, where the know-how of examiners is used repeatedly in searches. The introduction of a patent prosecution highway will make sense only when all the countries involved have a deferred request for examination, so that within a period of, say, five years, there would be adequate time to await the outcome of a patent examination in one country before starting examination in another country. Finally, a Community trade secret which is not even under consideration could help to restrict the unintended flow of know-how from one competitor to another, even in cases where IP rights may not be appropriate. If this were combined with a one-year grace period for inventors, SMEs would be able to be far more open when cooperating with other companies and innovators.
European SMEs still suffer from a number of disadvantages when it comes to protecting and defending their IP rights, including the following: SMEs have inadequate financial resources to protect their ideas while also defending themselves against rivals which are ignorant of their IP rights. SMEs do not receive enough financial support from their governments for R&D. SMEs are still not allowed properly to value their IP rights in their balance sheets. This is likely to make them targets of unfriendly takeovers, rather than improving their capital basis. SMEs do not receive fee reductions at the European Patent Office (EPO) and most national offices (with the exception of France, plus the United States and Canada). SMEs experience specific disadvantages with the fee structure of the EPO and some national offices (eg, claim fees). SMEs cannot sell and lease back their IP rights into countries or states where royalty income is tax free (eg, Delaware and Utah in the United States). Only in the United Kingdom (and Denmark, to some extent) can SMEs deduct 200% of R&D expenses from their income tax to improve their financial basis for further R&D spending.
Paul-Alexander Wacker Senior partner info@kuhnen-wacker.de Kuhnen & Wacker
Paul-Alexander Wacker is the founding and senior partner of the patent and law firm Kuhnen & Wacker. He has extensive experience in the prosecution of trademark, patent, utility model and design applications, and provides specific advice for prosecution and litigation strategies in Germany, Europe and internationally. He has significant experience and a solid reputation in IP evaluation. Mr Wacker graduated from the Technical University of Munich with a degree in electrical engineering and a degree in economics. He became a patent attorney in 1975. He frequently lectures on IP-related matters and is a regular lecturer at Kuhnen & Wackers European patent practice seminars, held both in Germany and overseas.
Nederlandsch Octrooibureau Paul Clarkson
International A unitary patent: not if, but when

A unitary system providing patent protection throughout all EU member states has been the dream of many in the IP world for more than 50 years. Today, after many false starts and numerous changes, this goal appears to be within touching distance. Will it be realised, or is it a case of too little, too late? This chapter looks at past efforts to predict the consequences of change and at the implications that the arrival of a truly unified system would have on established systems and procedures. Background The roots of the European patent initiative can be traced back to the spirit of cooperation following the Second World War. In 1947 the Institut International des Brevets (IIB) was founded in The Hague with the objective of centralising the ever-growing burden of patent documentation. The IIB was later absorbed into the European Patent Office (EPO) upon its foundation in 1977. Today, the EPO has 38 members and grants around 60,000 European patents annually. It is effectively a unitary patent granting authority and, despite the odd complaint, most users are content with its operation. Nevertheless, despite their title, European patents cease to have any unitary character as of the moment of grant. Thereafter, they must be validated in each member state where protection is desired. This involves the filing of translations and the appointment of a local agent. Renewal fees must be paid in each state and administrative procedures must be carried out locally, all at significant extra expense. Out of economic necessity, patents are validated in only a handful of countries, thus seriously undermining the principle of a single market. Most importantly, for parties seeking to enforce or revoke these patents, any court action must be carried out under national law. The differences in approach between national courts can lead to inconsistent judgments and forum shopping. The cost of litigation across multiple jurisdictions has long been cited as a major drawback. Recent progress on the so-called unitary patent has all but resolved the problems of unitary title. In 2008 the London Agreement came into force, simplifying the translation requirements for those countries that chose to participate. On June 27 2011 the EU Competitiveness Council agreed on two key regulations that resolve the outstanding administrative and translation issues for 25 out of the 27 EU member states. Spain and Italy chose not to participate, and instead lodged a formal complaint with the European Court of Justice (ECJ) claiming that their industry would be prejudiced by the actions of the signatory states. Nevertheless, these regulations can and will come into force only once there is resolution of the last outstanding issue a litigation system for the enforcement of the resulting unitary patent. Current standing At present, the expectation is that the enforcement system will materialise in the form of the Unified Patent Court, set up by some or all of the 25 signatory states. The details have not yet been finalised, but it will likely combine a mixture of centralised and local courts, with additional involvement of technical judges, likely taken from the EPO Boards of Appeal. Agreements have been reached in the past that have never seen the light of day. The Community Patent Convention was signed in 1975, but is unlikely ever to enter into force. The London Agreement took eight years to come into force and has still been ratified by only 16 states. Will the Unified Patent Court be any different? EU Commissioner Michel Barnier and Hungarian Minister of State Zoltn Csfalvay, chairman of the Competitiveness Council, certainly think so, according to a joint statement issued on June 27 2011: With the commitment of the Polish presidency to work hard together with the delegations, the European Parliament and the Commission, a final political agreement can be reached on the patent reform by the end of 2011.
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Given these high expectations, it may no longer be politically possible to turn back. The Polish presidency is certainly doing all it can to keep up the momentum. Nevertheless, close as we may be to a solution, past experience shows that predicting the consequences remains a risky exercise. Past predictions To date, a driving force for progress has been the frequent predictions made regarding the anticipated benefits of reform. If accuracy had been a prerequisite, it is unlikely that the EPO would ever have got off the ground. On the basis of a theoretical maximum of 30,000 European patent applications a year, seven countries committed to join; this limit was surpassed within five years. European industry was clearly giving a solid thumbs-up to the principle of a centralised system. Not only was this enthusiasm evidenced in the filing figures, it was also tangible for EU member states. For example, the Irish Patent Office saw revenues almost double when it joined the EPO in 1992, and by 2009 it was collecting 10 million in renewal fees alone (of which around 50% is returned to the EPO). The register of patent agents counted 31 members in 1998 and 64 in 2008. In 2004 the Irish Commercial Court was established as a necessary venue for high-value patent litigation and Ireland is listed as a location of choice for IP-dependent companies. It is therefore unsurprising that not a single EU member state has remained outside the EPO system, which presently receives over 200,000 European patent applications annually. The question remains whether adoption would have been quicker had member states fully appreciated the benefits. A factor in the EPOs success seems to have been its open format. Not only was membership optional, but also it was not bound by territorial limitations. Switzerland was a founding member and was shortly followed by Austria, Liechtenstein and Sweden all non-EU members at the time. Turkey was a member of the IIB and joined the EPO in 2000, taking European patent protection up to its borders with Syria and Iraq. From 2002, the former Eastern Bloc countries joined, and a European patent application now gives provisional protection covering a market of more than 500 million people. Ironically, this freedom to opt in or opt out has also delayed change. In the 1960s progress was interrupted due to disagreement over whether non-EU member states could participate. In March 2011 some believed that the initiative was dead when the ECJ pronounced the proposed European and Community Patents Court
incompatible with the EU Treaty due to the inclusion of non-EU member states. Spain and Italy are now contesting the opt-out option. The arrival of the London Agreement gave an opportunity to review the accuracy of earlier predictions on the potential savings due to the (partial) abolition of translation requirements. According to the EPO annual report in 2003: Patent proprietors have a major interest in implementation of the London Agreement, as it would entail a 50% cut in the translation costs for a typical European patent valid in eight contracting states. A 2008 study suggested that translation cost savings of 3,600 per patent and total savings of about 220 million could lead to an increase in patent filings of between 8% to 12%. However, such a rise in filings is hard to perceive from the actual data. It is probably too early to tell where the predicted benefits have gone, but patent attorneys have already seen their bottom lines plunge. At present, a zero-translation-cost option covers Germany, the United Kingdom, France, Luxembourg, Ireland and Switzerland. The latter three countries could have been expected to benefit at the expense of countries that still require translations, yet neither Swiss nor Irish Patent Office statistics show a clear upsurge in validations over the past three years. Based on the reliability of past predictions, our ability to foresee the implications of a true unitary patent would still appear limited. This is especially the case because economic factors such as the level of renewal fees have not yet been determined. Balanced against the cost question will be industry acceptance of the Unified Patent Court. Looking forward Turning to the immediate future, the European Commission has promised that the final issues will be resolved by the end of 2011 and is aiming for the first unitary patents to be granted in 2013. This will apply directly to pending European patent applications and, on current form, may mean 60,000 unitary patents within the first year. Under the agreed draft regulations, applicants may choose for their European patent application to be granted either as a new unitary patent or as a bundle of national patents (as is presently the case). For countries beyond the EU borders and for Spain and Italy, they will be able to choose only national patents. The consequences of this choice are outlined in the table below based on protection for all 25 signatory states. Before agreeing on the draft regulations, the European Commission prepared a 50-page impact
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Unitary patent Action to be taken File a translation of the application into English (for patents granted in French or German) or another EU language Within one month of grant Less than 1,000
European (25) bundle patent File translations according to national requirements currently German, Dutch, Bulgarian, Greek, Czech, Estonian, English, Polish, Portuguese, Romanian and Slovakian Within three months of grant 28,000
Timeframe Estimated cost of translation Renewal fees (estimate for sixth year) Registration of licence or assignment
Single fee of around 1,600, roughly equivalent to four national fees Single action plus fee
25 separate actions at a cost of 8,500 plus agency fees Individual registration per country with an estimated cost more than 12,500
Minimum costs in of a small to medium-scale patent case
Maximum costs in of a small to-medium scale patent case
160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 DE FR GB NL EP Court
1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 DE FR GB NL EP Court
assessment of the likely costs and benefits. The results could be described only as unanimously favourable for patent owners at the expense of a further reduction in demand for patent attorney and translation services. As with the London Agreement, it may take time before these savings are converted into increased filings. As mentioned above, all this is subject to agreement on the Unified Patent Court. Here too, impact assessments have been performed in the past comparing the cost and efficacy of litigation across European member states. In 2006 the EPO presented the figures above for a first instance patent case, showing that a unified court would always cost less than two separate national proceedings. In addition to the obvious cost benefits, the impact assessments have consistently underlined the additional benefits of unitary protection across all member states: a single consistent result; reduced risk of delays; and less exposure to opportunistic forum shopping. Here, the only listed downside is a possible reduction in revenue for patent lawyers. They, like
patent attorneys, will have to adapt to survive in a more competitive marketplace. Those that embrace the change and work for its acceptance by industry will likely become party to its success. A quality patent at a reduced price must eventually lead to the increased filings predicted previously. Strategic options Within the confines of the new procedures, various strategic alternatives will remain available for the IP player. EPO opposition versus EU litigation Under the existing system, a centrally filed opposition within nine months of grant has been the only opportunity for third parties to attack a European patent in a single procedure for all 38 member states. The Unified Patent Court may remove the urgency to oppose, since centralised revocation will be available for the 25 signatory states throughout the life of the patent. Around 3,000 oppositions are filed annually, compared to 2,000 patent court actions across Europe. This balance will be sensitive to the perceived merits of
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these procedures. Oppositions are mainly conducted by patent attorneys rather than lawyers and are invariably cheaper than corresponding court actions. However, the EPO is considered less well adapted to dealing with nonwritten disclosures and oral evidence. It also has a significant backlog. A stay of proceedings by the Unified Patent Court is envisaged in case of a pending EPO opposition, but it is unlikely that judges will tolerate delays. The EPO will need to adapt if this procedure is to remain relevant as an alternative or a precursor to full litigation. EU versus national litigation For proprietors of unitary patents, the central revocation procedure also represents a threat. For strategic reasons, some may prefer not to put all their eggs in one basket and may choose to file national patents. Unexamined national patents and utility models giving broad coverage from an early date may also have a role to play. It is presently envisaged that European bundle patents will fall under the exclusive jurisdiction of the Unified Patent Court, but this is unlikely to apply to national patents. They may be enforced locally without necessarily putting other rights in jeopardy. At present, 30% to 40% of patent actions in Europe are based on national patents, and this figure will be a key indicator of acceptance for the Unified Patent Court. During an initial five-year period, patent applicants and proprietors will also still be able to opt out from the exclusive jurisdiction of the Unified Patent Court. Forum shopping Although the aim of the European patent litigation system is to have a single unitary system, the presence of a central court and local divisions must inevitably lead to certain differences. While users of the system may seek to exploit and expand on such differences, it is clearly the intention that they should be kept to a
minimum. The local divisions will have judges appointed from a central pool and the single appeal court will further ensure uniformity with referrals to the ECJ. EU versus international litigation Patent harmonisation at both substantive and procedural levels means that decisions in one jurisdiction will become more relevant to those taken elsewhere. The adoption of first to file in the United States will further influence this trend. Many countries already look to the European patent for guidance. A Unified Patent Court decision would therefore be influential both in the remaining EPO states and far beyond. Strategic talks are already established for recognition of European patents in Morocco and, given recent events, the whole of North Africa and the Mediterranean basin could be party to the European patent by the time that the Unified Patent Court takes its first decision. Radical change in Europe may therefore affect the global distribution of patent litigation. If the system succeeds, Europe will become a venue of choice for IP disputes. Comment Despite the inaccuracies of past predictions, the solution is close enough now for stakeholders to start to see certain benefits already. Deadlock at this point is politically not an option. The cost reductions associated with the unitary patent will make it attractive and, if the Unified Patent Court delivers, increased filings in Europe are inevitable. The new order may reduce revenues for IP lawyers and patent attorneys, but those who embrace change can likely benefit from the future status of Europe as an IP venue of choice. Most importantly, a patent granted and enforced in Europe will be not just a community patent, but also a global patent.
Paul Clarkson Partner clarkson@octrooibureau.nl Nederlandsch Octrooibureau Netherlands
Paul Clarkson joined the partnership of Nederlandsch Octrooibureau in 2010 after 10 years with an international IP law firm. He was previously an examiner at the European Patent Office in The Hague. Mr Clarkson operates in the mechanical and electrical fields and specifically works with clients in the agricultural, medical, textile, oil exploration and machinery segments. He is qualified as a European and UK patent attorney, and also advises on design protection and the use of trademarks in optimally exploiting an IP portfolio. Mr Clarkson has an MA in engineering from the University of Cambridge (1987), passed the European qualifying examination in 1995 and holds a certificate in intellectual property from Queen Mary, University of London (2002).
Legal perspectives
North America
W Edward Ramage Baker Donelson Bearman Caldwell & Berkowitz PC
United States Gene patents survive in the United States for now
The mid-Summer 2011 ruling by the US Court of Appeals for the Federal Circuit in Association for Molecular Pathology v United States Patent and Trademark Office (commonly referred to as Myriad) has helped to calm some of the ripples in the biotech industry created by the district courts ruling the previous year. In a split decision (two to one), the appellate court panel determined that isolated genes were not products of nature and thus could be patented. However, the majority of the method claims directed to ways to use genes were rejected. The rock was first tossed into the biotech pond in March 2010, when the US District Court for the Southern District of New York issued a 156-page opinion holding that without more, the purification of a natural product (in this case, human BRCA1 and BRCA2 genes) could not transform it into patentable subject matter. The judge relied on Supreme Court precedent, including the oft-cited Diamond v Chakrabarty, to determine that the appropriate test was whether the invention had markedly different characteristics from the natural product (ie, had a new or distinctive form, quality or property). The court then examined the isolated DNA for the BRCA1 and BRCA2 genes as claimed in the patents, and held that it was unpatentable as it was not markedly different from native DNA as it exists in the human body. The suit was brought by the American Civil Liberties Union (ACLU) and the Public Patent Foundation, a not-for-profit organisation, on behalf of numerous medical professionals and others. They asserted that several patents on two human genes associated with breast and ovarian cancer (BRCA1 and BRCA2) were unconstitutional and invalid. The plaintiffs included medical professionals, patent holders and an assortment of healthcare organisations, including the Association for Molecular Pathology, the American College of Medical Genetics, the American Society for Clinical Pathology, the College of American Pathologists, Breast Cancer Action and the Boston Womens Health Book Collective. Defendants included Myriad Genetics and the University of Utah Research Foundation, which exclusively license or own the patents in question, and the US Patent and Trademark Office (USPTO). The circumstances indicated that this was a case that the plaintiffs intended to pursue as an attack on gene patents in general. BRCA patents The plaintiffs chose a sympathetic vehicle to challenge the patentability of human genes. More than 40,000 women a year die from breast cancer in the United States and about one in eight US women will develop it at some point. Mutations in the BRCA1 and BRCA2 genes are associated with an increased risk of breast cancer, as well as ovarian cancer. Myriad Genetics owns the patents and is the only laboratory in the United States where diagnostic testing can be performed. The patents prevent others from testing these genes or developing alternative tests, which makes it impossible for women to use other tests or obtain an outside second opinion about test results. Moreover, the tests are expensive Myriad charges over $3,000 for the tests, which places them out of the reach of many. The plaintiffs included a number of sympathetic individuals, including patients and medical professionals. Based on court pleadings, one patient was unable to obtain a second opinion on her test, while another could not get Medicaid to pay for her test. Another patient submitted a blood sample to Myriad that her insurance company had informed her it would pay for, but allegedly Myriad would not accept that particular insurance coverage. The suit attacked both the patentability of human genetic sequences and at least some form of diagnostic method claims. With regard to the first, it asserted that the BRCA1 and BRCA2 genes, and their naturally occurring mutations, are natural phenomena, products
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of nature and manifestations of laws of nature, and thus are not patentable subject matter under 35 USC 101. With regard to the second, it asserted that claims for any method of looking for naturally occurring mutations in human genes that do not specify a particular method of analysis are invalid due to indefiniteness under 35 USC 101, as well as being directed to an unpatentable abstract mental process. Standing One of the initial hurdles was the procedural question of standing. None of the plaintiffs had individually been sued for infringement by Myriad, although several asserted that they had received cease and desist letters and had a reasonable fear of being sued. The case was a declaratory judgment action and thus at least one plaintiff had to meet the constitutional requirement of standing. In fact, the defendants had initially moved to dismiss all the claims for lack of standing, but the district court denied the request, finding that there was standing. The issue was raised again on appeal and the appellate panel affirmed that at least one plaintiff did have standing. While the question is likely to remain an issue if the case continues through the appellate process, it is secondary to the primary issue of patentability. Patentability of isolated genes There was no question that isolated human genes fall within the broad category of patentable subject matter as composition of matter. The issue was whether they fall within the judicially created exception that excludes products of nature from patent eligibility. As a first step, the appellate panel agreed with the lower courts determination that the Supreme Courts decision in Diamond v Chakrabarty established the proper framework. In Chakrabarty the court had determined that genetically engineered bacteria modified to break down crude oil were patentable subject matter because the patent claims were directed to a non-naturally occurring manufacture or composition of mattera product of human ingenuity having a distinctive name, character [and] use. More specifically, the key is whether the patent claims cover something that human intervention has given markedly different or distinctive characteristics. Applying this test, the appellate panel held that the isolated DNAs were patentable because isolated DNAs are markedly different from native DNAs in the human body. Isolated DNA is not simply purified DNA.
Instead, human intervention in cleaving or synthesising a portion of the native DNA imparts a distinctive chemical identity to the resulting isolated DNA. In nature, DNAs are covalently bonded to other materials (the covalent bond is the defining boundary between one molecule and another). When cleaved, an isolated DNA molecule is now a distinct chemical entity. Similarly, complementary DNA sequences (cDNA) also are patentable, as they are even more markedly different from native DNA. The nomenclature used may be of importance, as prior cases had referred to unpatentable natural substances being merely purified or isolated. The appellate panel clearly distinguished between isolated DNA and purified DNA. Purification, the court said, makes pure what was the same material, but was previously impure. A natural substance is not purified by being isolated. On the conceptual spectrum of manipulation for determining patentability, isolating a substance falls further towards the patentability end than purifying that substance. Of course, this should depend on what isolating a substance actually requires in the way of manipulation. For DNA, isolation requires cleaving the covalent bond, thereby creating a distinct chemical entity (in the eyes of the appellate panel, at least). A possible concern was the panels apparent deference to USPTO policy. It observed that the USPTO had issued gene patents for almost 30 years, and stated that if gene patents should be excluded from the broad scope of Section 101 patentable subject matter contrary to the settled expectation of the inventing community, the decision must come not from the courts, but from Congress. Interpreted broadly, this appears to give the USPTO law-making authority that it does not possess and may be a weak point on further appeal. Interestingly, the federal government had filed a brief that went against the longstanding USPTO policy cited by the court. The government had argued for application of a magic microscope test that is, if an imaginary microscope could focus in on and observe the claimed DNA molecule as it exists in nature (ie, in the human body), then the claim would be unpatentable. In fact, on this basis the government argued that the claimed isolated BRCA1 and BRCA2 sequences were not patent eligible as they exist in the human body. The appellate panel rejected this argument. Method claims not patentable The challenged method claims did not fare as well as the isolated DNA claims. The appellate court upheld the district courts finding that five of the six challenged
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claims did not meet the current machine or transformation test applied to method claims in the United States. The machine or transformation test requires a claimed process or method to be tied to a particular machine or apparatus, or to transform a particular article into a different state or thing. There were several variations of method claims (eg, a claim directed towards comparing two gene sequences to see whether any differences exist). The appellate court held that the Myriad patent claims were directed to abstract mental processes and did not describe a specific method of transforming material. The method claim that did survive was a method for screening potential cancer therapeutics via changes in cell growth rates. The appellate panel found that the claim included a transformative step in growing host cells transformed with an altered BRCA1 gene, as well as a step involving physical manipulation of the cells. These steps were central to the purpose of the claimed process and thus the machine or transformation test was satisfied. Next round An inordinate amount of attention has been paid to the decisions, and undoubtedly this will continue until there is a final resolution. The plaintiffs request for a re-hearing by the appellate panel was denied. The plaintiffs have stated that they will ask the Supreme Court will be asked to hear the case. The odds for this happening appear to be good, based on the Supreme Courts continuing interest in questions of patentable subject matter. As there appears to be little dispute about the applicability of the Chakrabarty test, the focus is likely to be technical that is, are isolated DNA fragments truly markedly different from native DNA? It should be borne in mind that only some of the claims in the Myriad patents were challenged and thus
potentially at risk. Claims directed to a kit for detecting mutations in the BRCA1 gene, for example, were unchallenged. Thus, even if all of the challenged claims are rejected on further appeal, the Myriad patents themselves will survive, albeit with a few holes where certain claims used to be. It should also be noted that the oldest of the Myriad patents will begin to expire in a couple of years, possibly even before this case is finally resolved. So, what should a biotech company do in the meantime? Patents will still need to be filed and prosecuted; and the delay in obtaining a patent is already so long that no company will want to put its patent programme on hold, even if it could. The best approach is to assume that the markedly different characteristic test will continue to apply. Applicants will still be able to get patents directed to genetic material, but will have to show that their claimed invention has markedly different characteristics from native DNA. Thus, any patent application of this sort should include some claims that at least arguably cross over the markedly different characteristics line. Of course, broader pre-Myriad claims should be included to maximise possible protection should the line between patentable and unpatentable subject matter ultimately be drawn closer to the natural product. However, this approach increases the likelihood that at least some of the claims in a resulting patent would survive a subjectmatter challenge. Flexibility is key. If a final determination is made during the pendency of the application, claims may be amended or cancelled as appropriate. If a patent has already issued, at least some of the claims will pass challenge. Alternatively, reissue may be an option. In addition, continuation practice is recommended. This allows a patent owner to respond to not only changes in the market, but also to changes or modifications in the law, such as have been seen in In re Bilski and as are likely to be seen on appeal in Myriad.
W Edward Ramage Shareholder eramage@bakerdonelson.com Baker Donelson Bearman Caldwell & Berkowitz PC United States
W Edward Ramage is a shareholder and chair of the firm's IP group. Mr Ramage concentrates his practice on patent prosecution and the litigation and licensing of IP rights. His patent prosecution experience includes business methods, medical devices and medical IT systems. He is registered to practise before the USPTO and is admitted to the US Courts of Appeal for the Federal and Sixth Circuits. He graduated from Harvard University cum laude and received his master's degree from Stanford University and his JD from Vanderbilt University.
Duane Morris LLP Lewis F Gould Jr and Gretchen L Temeles
United States Who owns federally funded inventions?

Recently, the Supreme Court reaffirmed the principle that an inventor has the right to patent his or her invention. Although this principle is rooted in the Constitution itself, the focus of the case had a decidedly modern twist. For anyone involved in the business of innovation universities, inventors, start-up companies and companies seeking to collaborate with university researchers the case underscores the importance of clarifying who owns what at the very earliest stages of the patent process. Stanford v Roche: the holding On June 6 2011, in Board of Trustees of the Leland Stanford Jr University v Roche Molecular Systems (2011 US LEXIS 4183), a case that has been closely followed by US universities, the Supreme Court confirmed that the rights to an invention belong to the individual inventor and held that inventions resulting from federally funded projects are not automatically owned by the institution where the federally funded research was conducted. (Gayler v Wilder, 10 How 477, 493 (1851) (the discoverer of a new and useful improvement is vested by law with an inchoate right to its exclusive use, which he may perfect and make absolute by proceeding in the manner which the law requires); Solomons v United States, 137 US 342, 346 (1890) (whatever invention [an inventor] may thus conceive and perfect is his individual property); United States v Dubilier Condenser Corp, 289 US 178, 188 (1933) (an inventor owns the product of [his] original thought).) The court reasoned that the Bayh-Dole Act provision that contractors may elect to retain title confirms that the act does not vest title (35 USC 202(a)). In addition, the court held that the provisions of the Bayh-Doyle Act do not usurp the inventors rights in favour of the contractor and that the act is triggered only when the contractor obtains the rights to an invention. Under the act, a federal agency may grant requests for retention of rights by the inventor [i]f a contractor does not elect to retain title to a subject invention (id 202(d)). The Bayh-Dole Act To understand the significance of the courts reasoning, it is helpful to understand the rationale behind the BayhDole Act. Congress enacted this measure (formally known as the University and Small Business Patent Procedures Act of 1980) to benefit the public by promoting the utilisation of inventions developed with federally supported research. The act provides a framework for universities, non-profit institutions and small businesses described in the act as contractors to elect to retain title in inventions resulting from that research. Contractors are expected to seek patent protection on inventions that they choose to own and to promote the commercialisation of those inventions. The government retains march-in rights. If the contractor chooses not to retain title to the invention, the government may grant requests for the return of those rights to the inventor or may grant a licence to a third party, pursuant to the governments march-in rights. The Bayh-Dole Act is widely credited with fostering the development of thousands of new businesses and the introduction of many new products to the market. Facts If the Bayh-Dole Act provides a framework for allocating patent rights, this case deals with when those rights vest. Stanford researcher Mark Holodniy was under a prior contractual duty to agree to assign invention rights to Stanford. Holodniy then began research to develop a sensitive polymerase chain reaction (PCR)based blood test for the detection of HIV. His supervisor at Stanford arranged for him to carry out his research at Cetus, a biotechnology company with significant knowhow in PCR technology. Holodniy then signed an agreement stating that he will assign and do[es] assign to Cetus his rights in inventions made during his work there. Holodniys research led to the successful development of a commercial assay kit for HIV detection in blood samples. Holodniys research also led Stanford to obtain three patents on the HIV detection technology.
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Lower court decisions When Stanford sued Roche (Cetus successor in interest) for patent infringement, Roches defence was that it was a co-owner of the invention and could not be held liable for patent infringement. The US Court of Appeals for the Federal Circuit agreed with Roche, holding that Holodniys promise to assign rights to Stanford did not block him from actually assigning rights to Cetus, and that Roche therefore held rights in the invention. The Federal Circuits decision turned on the wording of Holodniys assignments. The court noted that the assignment to Stanford amounted to a promise to assign future rights (agree to assign), while the assignment to Cetus provided the immediate assignment (do assign) of rights to Cetus. Stanford appealed. Supreme Court decision In a seven-to-two decision, the court emphasised that the acts disposition of rights serves to clarify the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more. In writing for the majority, Justice Roberts noted that: You cannot retain [title] unless you already have it. The court refused to construe the act such that title to an employees inventions could vest in his or her university employer even if the invention were conceived before the inventor became a University employee, so long as the inventions reduction to practice was supported by federal funding. The court concluded that such an interpretation would suggest that the contractor would obtain title to one of its employees inventions even if only one dollar of federal funding was applied toward the inventions conception or reduction to practice. In conclusion, the court stated that if Congress had intended to change one of the fundamental tenets of patent law thereby potentially depriving inventors of their rights to own their inventions it would have done so very clearly and without ambiguity. Stanford had contended that to interpret the Bayh-Dole Act as not vesting title to federally funded inventions in federal contractors fundamentally undermin[es] the acts framework and deeply impacts on its continued successful application. The court disagreed, pointing to the common practice of contractors in routinely obtaining assignments from their employees. Such a practice would be unnecessary if title in the inventions were automatically to vest with the contractor. Implications Although this case does not alter the fundamental rights of inventors in their inventions, it highlights the
significance of effective employment contracts and assignments of invention rights. These documents should contain specific and unequivocal language to guarantee the immediate transfer of rights to the employer. The ruling also underscores the need for universities and other non-profits to monitor collaborations with third parties prudently. This ruling is relevant for any industry that runs on innovation, but is of particular importance for those involved in the life sciences. A new therapeutic agent costs on average about US$500 million to develop and takes about 12 years to reach the market. The development process typically requires the collaborative effort of many different people and institutions with differing and complementary skill sets university researchers, technology transfer departments, entrepreneurs, large pharmaceutical companies with expertise in drug development and clinical trials, regulatory experts who deal with Food and Drug Administration approval and marketing departments. With the emphasis on the more rapid transfer of scientific discoveries from bench to bedside in these lean economic times, collaborations are increasingly important, not just for smaller players such as universities, non-profits and start-up companies, but also for larger pharmaceutical companies. Universities and non-profits Universities and other non-profit organisations benefit both tangibly and intangibly from collaborations with third parties. Such collaborations provide much-needed financial support, which is vital in these days of shrinking pools of grant money. Such collaborations also raise the profile of the university or non-profit and attract top-quality, entrepreneurially minded faculty, potential licensees and contributions from benefactors. Clearly, it is in the best interest of universities and non-profits to ensure a free flow of information between collaborators. A university or non-profit seeking to obtain maximum benefits while protecting its own interests should take heed of the following guidelines: Since this case ultimately turned on contract language, universities and non-profits should review all employment agreements to ensure that they are carefully drafted to provide for immediate transfer of rights to the employer. The agreements should be executed well in advance of any inventive activity. Where possible, universities and non-profits should review licensing agreements, previous contracts with prior employers and prior collaborations. Each of these may contain clauses that would require vesting of any new intellectual property arising from
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With the emphasis on the more rapid transfer of scientific discoveries from bench to bedside in these lean economic times, collaborations are increasingly important
continuing development of the original idea to the originating employer. It may not be possible to review a new employees previous employment contracts. The decision by the court in this case should at least ring some alarm bells for each institution to review its management style and approach to business. At a minimum, each university or non-profit should ensure that any new faculty are interviewed by the technology transfer office to determine whether there will be a continuation of work that originated with the previous employer. If so, the licensing offices should contact the previous employer to discuss and agree on ownership going forward. Assignments should be filed contemporaneously with the filing of each patent application, including provisional, non-provisional (including continuation-in-part) and international applications filed under the Patent Cooperation Treaty. The assignment should clearly identify the application by title, serial number and date of filing. The assignment should contain language with rights vesting immediately to the university or non-profit. In addition, the assignment should contain language that would vest any work arising from the present work. Universities and non-profits should educate their faculty, staff and students about their obligations to their employer. Universities should ensure that researchers understand their institutions patent policy, and that the university will have rights in any inventions made under federally sponsored research agreements. The university not only provides the facilities and environment to foster the creativity of its employees, but also assumes the cost and risks associated with securing patents, licensing, commercialising the invention and, if necessary, asserting and defending the patent. In turn, the
employees are compensated though salaries and royalty payments in the event that the invention is successfully licensed. The university environment also fosters academic productivity and advancement. Inventors Inventors should also review their employment contacts and their assignments. Predictability is particularly important for inventors who seek external collaborations outside of their universities. Third parties Third parties such as companies, entrepreneurs seeking to license university technologies, start-ups or even university faculty members looking to found a company based on the technology that they have developed must be more astute when dealing with universities and nonprofits. This is especially important for start-ups, since it is often the case that intellectual property is the companys only tangible asset: Intellectual property due diligence should include a review to determine whether the university or nonprofit actually owns the intellectual property being licensed. Licensing agreements should require that for further research occurring as part of the development of the product, the inventors execute joint assignments to the university and the third party. The rights to the intellectual property should be defined in the scope of the licensing agreement. Third parties must negotiate the terms of any licence agreement so that their rights vest immediately and not at some future point. The agreement should provide immediate vesting of rights in any new intellectual property being developed from the original idea. The percentage of ownership can be negotiated between the start-up or licensee and the university.
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The third party must make certain that anyone being hired by the company assigns all rights in any inventions immediately.
Comment The Stanford v Roche decision was not unanimous. Justice Breyer, in dissent, joined by Justice Ginsberg, took issue with the majoritys reliance on contractual language (this reasoning seems to make too much out of too little). Breyer focused instead on the acts public
policy objectives the commercialisation of inventions. In his view, the uncertainty in Bayh-Dole as it relates to contractors was sufficient to remand the case and allow the parties to argue the point more fully. It may be that when presented with different facts, the courts will address the interpretation of Bayh-Dole more directly. Until then, all those involved in the business of innovation must view the careful drafting of assignments and collaboration agreements as an essential step in any research project.
Lewis F Gould Jr Chair of IP practice group lfgould@duanemorris.com Duane Morris LLP United States
Lewis F Gould Jr chairs the IP practice group of Duane Morris LLP. For more than 40 years he has focused his practice on IP law, with emphasis on domestic and international patent and trademark matters. He advises clients on a broad spectrum of patent and related issues in a variety of technologies, and on trademark and copyright matters, including clearance, registration and litigation. He also manages patent and trademark litigation before the US Patent and Trademark Office and in federal courts, locally and nationally.
Gretchen L Temeles Associate gltemeles@duanemorris.com Duane Morris LLP United States
Gretchen L Temeles practises in the area of IP law, with a focus on patents in the biotechnology and pharmaceuticals industries. She has extensive experience in patent filing strategies and portfolio management, confidentiality agreements and material transfer agreements, freedom-to-operate searches and non-infringement and invalidity opinions, and has performed due diligence for patent licensing transactions. Dr Temeles has worked with large and small organisations in a wide range of life science technologies, including genetic engineering, immunology, biologics, vaccines, pharmaceuticals, probiotics, diagnostics, tissue engineering and transgenic plants and animals. Dr Temeles is a co-inventor on two US patents. She holds a PhD in cell and molecular biology.
Husch Blackwell LLP Julie A Katz
United States To be a trade secret or not to be a trade secret: practical considerations when protecting IP assets
When attempting to protect their inventions, companies must make a sometimes daunting decision between trade secret protection and patent protection. This dilemma often occurs at the beginning of a research and development project. Should the technology, know-how and other IP assets be protected through trade secret protection or patent protection? It is hard to predict the future, particularly in terms of optimal IP protection. How can you know for certain which aspect of the IP asset is most likely to be commercially successful, or which is more likely to be attractive to competitors in terms of knock-offs, counterfeits or competitive alternatives, when the final result may be a long way off? Federal level protection A good place to start is by considering what can actually be protected under US law. Title 35 of the US Code defines what is considered for patent protection under US law. Some of the primarily relevant definitions are as follows. Section 101 provides that: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. Section 102 provides that: A person shall be entitled to a patent unless (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or (c) he has abandoned the invention, or (d) the invention was first patented or caused to be patented, or was the subject of an inventors certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventors certificate filed more than twelve months before the filing of the application in the United States, or (e) the invention was described in (1) an application for patent, published under section 122 (b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351 (a) shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language; [1] or (f) he did not himself invent the subject matter sought to be patented, or (g) (1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes, to the extent permitted in section 104, that before such persons invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such persons invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other. Section 103 provides that: (a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been
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obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made. (b) (1) Notwithstanding subsection (a), and upon timely election by the applicant for patent to proceed under this subsection, a biotechnological process using or resulting in a composition of matter that is novel under section 102 and nonobvious under subsection (a) of this section shall be considered nonobvious if (A) claims to the process and the composition of matter are contained in either the same application for patent or in separate applications having the same effective filing date; and (B) the composition of matter, and the process at the time it was invented, were owned by the same person or subject to an obligation of assignment to the same person. (2) A patent issued on a process under paragraph (1) (A) shall also contain the claims to the composition of matter used in or made by that process, or (B) shall, if such composition of matter is claimed in another patent, be set to expire on the same date as such other patent, notwithstanding section 154. (3) For purposes of paragraph (1), the term biotechnological process means (A) a process of genetically altering or otherwise inducing a single- or multi-celled organism to (i) express an exogenous nucleotide sequence, (ii) inhibit, eliminate, augment, or alter expression of an endogenous nucleotide sequence, or (iii) express a specific physiological characteristic not naturally associated with said organism; (B) cell fusion procedures yielding a cell line that expresses a specific protein, such as a monoclonal antibody; and (C) a method of using a product produced by a process defined by subparagraph (A) or (B), or a combination of subparagraphs (A) and (B). (c) (1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person. (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if (A) the claimed invention was made by or on behalf of
parties to a joint research agreement that was in effect on or before the date the claimed invention was made; (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. (3) For purposes of paragraph (2), the term joint research agreement means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention. State-by-state protection Companies can also avail themselves of trade secret protection on a state-by-state basis. The model Uniform Trade Secrets Act was drafted by the National Conference of Commissioners on Uniform State Laws in 1979, and amended in 1985. As of 2011, most states have enacted some form of trade secret statute modelled on the act. States that have not adopted such a statute may rely on common law principles. The basic definition of a trade secret is set out in Section 1(4): Trade secret means information, including a formula, pattern, compilation, program device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. The following are some examples of IP assets that may be considered for trade secret protection, depending on various factors discussed below: Proprietary technology information covers three categories of information: proprietary information concerning research and development; proprietary information concerning production/processes; or information concerning quality control. Within each category, information may be broken down further into examples such as formulae, compounds, prototypes, processes, laboratory notebooks, experiments and experimental data, analytical data, calculations, drawings of all types, diagrams of all types, design data and design manuals, vendor/supplier information, research and development (R&D) reports of all types and formats,
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R&D know-how and negative know-how, cost/price data, special production machinery, process/manufacturing technology, specifications for production processes and machinery, production know-how and negative know-how, vendor/supplier information, quality control procedures, quality control manuals, quality control records, and maintenance know-how and negative know-how. Proprietary business information may include proprietary information concerning sales and marketing such as sales forecasts, marketing and sales promotion plans, sales call reports, competitive intelligence information, proprietary information concerning customers including proprietary customer lists, customer needs and buying habits, know-how concerning the management of customer confidence, and proprietary sales and marketing studies and reports. Proprietary financial information may include internal financial documents, budgets, forecasts, computer print-outs, product margins, product costs, operating reports and profit and loss statements. Proprietary administrative information may include internal organisation, key decision makers, strategic business plans and internal computer software.
guard the secrecy of the information? The greater the security measures taken to keep the information secret, the more likely it is a protectable trade secret. What is the value of the information to the company, particularly to competitors? The more valuable the information, the more likely the information is a protectable trade secret. To what expense has the company gone (eg, time, effort, money) to develop the information? The greater the expense, the more likely it is a protectable trade secret. How hard is it for others to acquire properly or duplicate the information? The easier it is, the less likely it is a protectable trade secret.
Protection of a companys trade secrets is one of the keys to economic success in todays international markets. This is particularly true in fields where employees typically move from company to company and where companies work with customers in joint developments or applications. Once an audit has taken place to determine whether the assets in question fit into the categories of protection for either patent or trade secret protection, a company must determine the appropriate level of security, particularly if it decides to focus on trade secret protection. The most critical element of claiming trade secret protection for an IP asset is that it must, in fact and by law, be an actual secret. This means employing certain security measures to maintain the secrecy. The following general questions (and the answers to them) should be considered: To what extent is the information known outside the company? The more it is known, the less likely it is a protectable trade secret. To what extent is the information known by employees and others involved in the company? The more employees know the information, the less likely it is a protectable trade secret. To what extent are measures taken by the company to
Applying these factors through a serious internal investigation of its business practices should allow a company to categorise its assets into those that would require higher levels of security and those that would require lower levels of security. This is not an all or nothing proposition. Different security levels within the company may be put in place. In this regard, the following are some examples of security measures that can be taken to protect trade secrets: Notify the trade secret recipient (preferably in writing) that the information is proprietary and is not to be disclosed or used by the recipient for the recipients benefit or the benefit of others without the express consent of the trade secret owner. Enter into confidentiality and non-disclosure agreements with employees and third parties who may be receiving trade secrets. Establish and maintain written confidentiality policies to be distributed to all employees, even if they are not trade secret recipients. Establish and maintain oversight policies and procedures to prevent the inadvertent disclosure of trade secrets by employees in written publications, by email or other electronic means, in seminars or speaking engagements or at trade shows. Institute overall bricks and mortar precautions such as perimeter fences at the companys premises, restricted access to certain entrances, exits or areas, alarms or self-locking doors, and after-hours security. Install and use visitor control systems. Maintain access to trade secrets on a need-to-know basis. Maintain secretly coded ingredients or data. Separate departments of the company. Separate components of a trade secret between departments and/or company personnel so that each has only a piece of the overall asset.
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Maintain separate and locked drawers or areas for secret documents and drawings. Mark documents and drawings confidential or proprietary. Enter into vendor secrecy agreements. Establish physical barriers to prevent unauthorised viewing of proprietary process technology. Install keep out or authorised personnel only signs at the access points to sensitive areas of the plant, and have an enforcement policy. Establish and maintain written rules and regulations prohibiting employees from remaining in the plant after hours without express permission from properly authorised personnel. Establish and maintain rules and regulations requiring employees to stay in controlled areas near their work stations. Require employees to wear identification badges or carry identification cards. Require sign-in/sign-out procedures for access to and return of sensitive materials. Reproduce only a limited number of sensitive documents and maintain procedures for collecting all copies after use. Require authorised codes or passwords for access to copying machines and computers. Use key and
encrypted computer data access to control theft of secret computer-stored information. Establish and maintain policies and procedures for the destruction of documents (eg, shredders). Establish and maintain a policy and practice for advising employees on a regular basis regarding the companys trade secrets and confidential business information. Hold exit interviews when an employee leaves the company in order to obtain the return of company documents and to remind him or her of the contractual obligation not to use confidential information belonging to the company for personal benefit or the benefit of others.
Companies must remember that implementing security measures is just one step; maintenance and enforcement of the measures are vital as courts give major weight to these when determining whether an asset, even if considered eligible for trade secret protection, should be enforced as such against a thief. An examination of the practical limitations of implementing these kinds of precautionary measure within a company should significantly help to answer the overriding question: trade secret protection or patent protection?
Julie A Katz Partner julie.katz@huschblackwell.com Husch Blackwell LLP United States
Julie Katz is a partner in the IP and IP litigation departments. She graduated from the University of Illinois College of Law in 1990. Her practice consists of all aspects of IP litigation and she also practises in matters of non-contentious trademark, copyright and design protection. She is an active member of the International Trademark Association and the Pharmaceutical Trademark Group, and a corporate partner of the National Association of Women Business Owners Chicago Chapter.
Reed Smith LLP Craig Opperman and Marc Kaufman
United States The patent monetisation cookbook: a structured approach to monetising patents
Introduction Businesses throughout the world are beginning to focus on the asset value of their patent portfolios. The rise of non-practising entities has also stemmed from the recognition that patents are valuable business assets that can be monetised. Recently, patent assets have been the primary driver of spectacularly large transactions. The speculation around the sale of a portion of Kodaks patent portfolio, the patent asset-driven purchase of Motorola Mobility by Google for $12.5 billion and the $4.5 billion sale of 6,000 Nortel patents to a consortium including Apple and Microsoft are all excellent examples. Inevitably, transactions such as these have prompted corporate executives and boards to look more closely at their patent holdings with an eye towards monetising those assets. To them and others, monetisation is particularly interesting for patent assets that have been developed as is often the case in order to protect clever ideas, but without being aligned to business strategies, and are thus not supporting current business objectives. These shelf assets, the thinking goes, are potential sources of cash. Despite its visceral appeal, however, patent monetisation is a complex, non-trivial task that is definitely not for the faint of heart or the cheap of wallet. Experience has shown that monetising patent assets requires a structured approach to extract maximum value. This chapter therefore explores the primary steps in a disciplined and informed patent monetisation programme and gives business executives considering monetising their patents an idea of what is involved. Overview In theory, patent monetisation, as with any other asset monetisation process, is made up of a few disarmingly simple and quite intuitive phases. These four distinct phases, as illustrated in Figure 1, are: an audit and analysis phase, which includes initial and mapping/detailed analysis sub-phases, to understand what patent assets a company owns; a market analysis phase to determine which markets are affected by the companys patents; a business decision phase to decide which patent assets to monetise and what approach to follow; and a deployment phase. Figure 1: The basic patent monetisation process
Understanding your asset base (initial)
Understanding your asset base (in detail)
Market analysis
Business decisions
Deployment
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While these four phases are fairly easy to define and quite logical, they require careful and complex analysis and difficult decisions. Each is considered in greater detail below. Patent audit and analysis phase The baseline of any patent monetisation programme is achieving an understanding of the businesss patent assets. It goes without saying that without knowing exactly what assets a business owns, there can be no systematic approach to monetisation. The patent audit and analysis phase provides this understanding. As some entities have a better understanding of their patent assets than others and the resources required in this phase will depend on each businesss starting point, the two sub-phases (initial and detailed) are discussed below with a focus on results as opposed to process. The first step is to identify all patent assets (ie, worldwide patents and pending patent applications). Although administrative in nature, this is rarely a trivial task. If adequate records of patent filings and status have not been maintained, it may be necessary to query the records of the various patent service providers and patent offices throughout the world. In addition, in the event of mergers and acquisitions, it may be necessary to review the transaction documents to determine any patent assets that were acquired. As painful as this process can be, it has the advantage of providing a good opportunity to clean up any title issues by ensuring that all patent assignments have been properly executed and recorded. Once the patent assets have been identified basically, a name and number listing the next step is to group the assets into families. A patent family is a group of patent assets having similar disclosures, although possibly different claims. (The disclosure of a patent is the technical description. The claims of a patent are the legal definition of what is protected by the patent. Complex patent families can have 10 or more members, both domestic and foreign.) After that, the detailed work starts: each asset family group must be reviewed to make an initial determination of which technologies are covered by the claims. The analysis in this step requires a review by patent specialists knowledgeable in the relevant technology, who should consult experts within the company to formulate an initial understanding of what each patent familys claims cover. This review produces a preliminary coverage determination for each patent family. This determination, which is essentially a summary of which technologies each patent family covers or applies to, should be captured in a written
document that is easily understandable by non-technical executives so that they can use it to make decisions based on business objectives. In summary, therefore, the output of the initial part of the patent audit phase is a patent asset summary, grouping patent assets by family and articulating which technologies are covered by each family. After the patents have been identified, classified and summarised at a high level, the business must determine which assets should be considered for monetisation. The first step in this sub-phase is to identify which patents are core (ie, substantially related to business objectives) and which are non-core. Typically, but not always, non-core assets are considered for monetisation (whether through sale or licensing), while core assets are retained to support business objectives. Of course, as objectives change, the definition of what constitutes a core asset will also change. While some accommodation can be made for such potential shifts in business objectives, the core and non-core asset determination must be made in the present timeframe. To determine whether an asset is core, it is axiomatic that the person or group making the determination must have a strong understanding of the companys business, strategy and objectives. These can be gleaned from, for example, business plans and discussions with executives. If the objectives of the entity are not articulated clearly, selecting which patent assets to monetise cannot be accomplished properly. Once the companys objectives have been articulated, the patent asset summaries can be mapped to these strategic objectives to determine which patent families are likely to help achieve the objectives. This process inevitably promotes a great deal of discussion, and possibly disagreement, on which patent assets are core. However, the mapping between the companys business and the patent asset summaries provides the necessary discipline and structure to the process. Ideally, the determination of which patent assets are core should be made by a spectrum of business executives, as opposed to only technologists or only the legal department. It is for this reason that the patent asset summaries must be in a form that can articulate the patent assets relevance in a way that is meaningful to non-technical business executives. An advantage of this process is that once the core patent families have been identified, resources can be focused with added confidence on this sub-group for more detailed review and reworking to make them even more relevant to the business. For each non-core patent asset, it is desirable to gain
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Figure 2: Understanding the assets and market analysis
Understanding the asset base (overview)
Identity patent properties (basic list)
Group properties by patent technology classification codes
Group properties by family
Per family patent coverageanalysis (preliminary)
Understanding the asset (detailed)
Select non-core, valuable fanilies
Select core families
Per family patent coverage analysis (detailed)
Identity applicable markets and valuations
Optional per family patent coverage analysis
Market analysis phase
Identify market players (optional)
Note; this step is useful as it defines the scope and relevance of the core patent assets
See Figure 3
a detailed understanding of the coverage of the patent. Once again, this requires a patent attorney to construe the claim language in a way that a court would be likely to do so in the event of patent infringement litigation. This coverage analysis can sometimes be very detailed and often requires that a patent attorney review the file histories (ie, all communications between the patent office during the patent obtaining process) to understand all representations and characterisations made to the patent offices, especially for US patent properties. As any patent attorney will attest, this is a
complex and expensive process, but the value derived from the process is a document describing the coverage of each patent family taking into account the meaning of all claim terms. This process leads to an understanding of what third-party activities (generally speaking) are covered by the patents. Market analysis phase Once the non-core patent assets have been identified and understood, the next step is to determine the value of these assets. In any specialised asset class, a lack of
Figure 3: Business decisions and monetisation deployment phases
Sell
Sell or license?
License
Private/ broker/ auction
Litagate or negotiate first?
Neg
Business decision phase
Pvt
Bkr
Auc
Lit
Preliminary infringement analysis
Infringement analysis and proof package
Full fee/ contingency/ partial fee?
FF
Con
Part
Detailed prospectus
Select broker
Basic prospectus
Deployment
Identify buyers
Broker marketing
Auctioneer advertising
Select lawyer and jurisdiction
Prepare for litigation
Approach buyers
Broker sells
Auction
File suit
Approach targets
understanding of the true value inevitably leads to asset mispricing. Patent assets are no different and stories abound of ridiculously unrealistic seller expectations or assets bought at bargain-basement prices that are immediately flipped for large profits. Clearly, this is an undesirable situation because under-pricing will leave money on the table, while significant over-pricing will result in a failure of the monetisation programme. The first step in determining the appropriate value is to identify the applicable markets. It is possible that a covered technology might be used in several markets.
Market identification can ordinarily be accomplished by the patent attorney and relevant business and technology experts within the company. It is, however, sometimes advisable to retain an industry expert, particularly in cases where non-core patent assets apply to markets not familiar to the company. Once the applicable markets have been ascertained, the next step is to identify the primary players in each market for each geographic region where patents exist. This is necessary because it helps to identify potential buyers or licensing targets and provides a way to
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Despite its visceral appeal, however, patent monetisation is a complex, non-trivial task that is definitely not for the faint of heart or the cheap of wallet
measure the revenue affected or addressed by the patents. This addressable revenue is the most reliable and widely used measure for determining the value of patents. For example, a rudimentary valuation of a US patent asset can be made by multiplying the addressable US revenue by an appropriate royalty rate (which depends on the industry), and then multiplying by a risk factor to account for the risk involved in extracting that addressable revenue. This valuation (minus an estimate of the resources required to extract the revenue) provides a basis for an asking price for the patent asset in the event of a sale or helps to drive a licensing programme decision. The result of the first two phases (illustrated in Figure 2) is an understanding of potential purchasers or licensors and a valuation for the patent assets. Business decisions phase At this point a company will have a good idea of what patent assets it is likely to monetise and what those assets are theoretically worth. The difficult decision will be how to extract the maximum amount of that worth. Essentially, this decision will hinge on whether the company wants to run a patent licensing programme or whether it is prepared to sell its non-core assets. Instinctively, executives tend towards a licensing programme. It is likely to extract the most money which, will show as revenue, rather than an asset sale, on its books. In addition, there is some comfort in that the business still retains ownership of the patent asset. Also, some companies suffer somewhat from the view that everyone will want to license our intellectual property. Unfortunately, however, the everyone will take a licence view is rarely shared by licensing targets and, in the United States at least, almost all successful licensing programmes require litigation or have the very real risk of litigation. As shown in Figure 3, there are many options for litigation. However, it is the risk of litigation that often drives executives away from a licensing programme towards an asset sale approach. For this
reason, the rest of this chapter focuses on the sale process. Deployment phase Deployment refers to the constructive steps taken to monetise the patents. If it is to be a patent sale, the first deployment step will be to decide on a sales channel for the patent assets. The three primary sales channels are: a direct sale to a buyer; using a broker as an intermediary; or selling the patents at auction. While there are other channels for selling patents, such as online markets and the like, these channels are not yet well established. A patent asset sale by the owner provides the opportunity for the owner to recover the largest value, as there are no commission fees or similar. However, direct sales require a commitment on the part of the patent owner to prepare a prospectus and identify, contact and negotiate with potential buyers. When the seller and/or its patent attorney have strong contacts in the relevant markets, a direct sale may be the best option. In contrast, patent brokers provide expertise in preparing the prospectus and presenting the patents to potential buyers. The right broker may have very strong relationships in the relevant industries, which can lead to a bidding war that increases the sale price. This is what appears to have happened with the Nortel portfolio. Of course, the broker will charge a fee often a large percentage (15% to 25%) of the sale price. Although selling at auction usually requires the fewest resources on the part of the seller, auctions are less likely to target the best potential purchasers and thus could result in a reduced sales price. Regardless of the selected sales channel, it is critical that the patents be presented to potential buyers in a manner that helps them understand quickly how those patents will be valuable assets for the buyer to acquire. Hence, the work accomplished in the patent and market
analysis and valuation phases will be invaluable. Patent asset value is greatly dependent on context (ie, the identity and circumstances of the owner, the buyer and the markets). For example, patent assets owned by an individual inventor with little financial resources may have a relatively low value because the owner is unable to enforce the patents through a prolonged licensing negotiation and possible litigation. However, these same patent assets will increase in value when owned by an entity with the resources to license and enforce the patent. Accordingly, it is critical that the patents be marketed to entities that will see the greatest value in the patents based on their activities and resources. Therefore, the sales channel that is most likely to reach these entities should be selected.
Comment A patent asset monetisation project requires a great deal of resources and patience, and is definitely not for the faint of heart. But, if properly done, monetisation can provide significant cash for a business. The asset owner should understand the context in which the patent asset has the greatest value in order to target the potential buyer that will pay the most for the asset. While licensing programmes have initial appeal, they have a high litigation risk, so asset sales are often preferred. There are several potential sales channels, each with distinct advantages and disadvantages the selection of the appropriate sales channel is critical in order to realise the greatest value of the patent asset.
Craig P Opperman Partner, Silicon Valley copperman@reedsmith.com Reed Smith LLP United States
Craig Opperman is a member of Reed Smiths IP Group and a founding partner of the firm's Silicon Valley office. He brings more than 25 years legal, international corporate executive and engineering experience to his practice. His primary focus is on quality intellectual property and he specialises in helping clients to design, build, leverage and enforce intellectual property as a corporate asset. Mr Opperman is a Stanford Business School alumnus and holds degrees in law and engineering. He is admitted to practice in California and South Africa and before both the US and South African Patent Offices. For the past three years he has been recognised as one of the world's 250 leading IP strategists. In 2011 the Daily Journal named Craig in its list of the "Top 25 Intellectual Property Portfolio Managers, Prosecutors and Licensing Specialists" in California.
Marc Kaufman Partner, Washington DC mskaufman@reedsmith.com Reed Smith LLP United States
Marc Kaufman is a partner in Reed Smiths IP Group in the Washington, DC office. He specialises in assisting clients in managing their IP assets. He has developed structured procedures for defining and executing IP strategies that are aligned with overall business strategies. From procuring and enforcing rights in the United States and abroad to structuring and negotiating IP transactions, Mr Kaufman helps his clients to achieve their objectives. His practice encompasses work in a wide variety of technical fields, including reconfigurable processors, content aggregation and targeting, digital rights management, database technology, document retrieval, search engine technology and data mining. Mr Kaufman was recognised by his clients in the 2006 Client Service All-Star national survey by the BTI Consulting Group, Inc, for his ability to understand clients needs and to deliver relevant, timely and practical business and legal advice.
Legal perspectives
Latin America & Caribbean
Gabriela Bodden and Aarn Montero E-Proint
Caribbean Pirates, plantations, rum and reggae: the complex business of protecting IP rights in the Caribbean
The effectiveness of the various IP registries in the Caribbean region is a common concern for IP rights holders wishing to obtain protection in the islands. While some registries offer excellent service, others are not yet automated and are governed by out-of-date legislation. Some Caribbean countries are working hard to ensure that their IP regimes encourage innovation and are competitive but this can pose a major challenge as, regardless of the amount of financial investment, what can be done when the relevant legislation is outdated? Filing requirements Of the Caribbean states and territories, some are part of the Commonwealth; some have become independent and others were never dependent on the United Kingdom. This has led to various legal differences, including the following: Grenada is the only country where a UK registration is a prerequisite for filing a trademark. Although in the Bahamas there is no legislation allowing the extension of a UK registration to the territory, priority can be claimed on a UK application and a UK registration can be considered as evidence of registrability at the discretion of the trademark examiner. In Bermuda, the Trademark Law 1974 (derived from the UK Trademark Law 1938) applies. In addition, Bermuda is a member of no international trademark conventions, and thus priority cannot be claimed there. A UK registration can be extended to Bermuda at the discretion of the trademark examiner in the same circumstances and under the same limitations imposed in the United Kingdom. In the British Virgin Islands (BVI), both national trademark applications and those based on UK registrations can be filed. The Nice Classification applies if an application is based on a UK registration, but for a national application the local classification is mandatory. In the US Virgin Islands (USVI), protection can be sought through a US registration that can be extended to USVI. In the Cayman Islands, a trademark application can be based on a UK, Community or international World Intellectual Property Organisation (WIPO) trademark registration. There is no need to register a trademark in all the classes of the underlying registration, but the underlying application must have matured to registration in order to be extended to Cayman. The Guyanan trademark legislation is in need of updating and service marks can be registered only if based on a UK registration. Montserrat has legislation in place permitting the extension of UK registrations to its territory. In the Turks & Caicos Islands (TCI), a trademark owner may file either a trademark application based on a UK registration or a national non-UK based application.
As a result of pressure from international business, the Caribbean countries have slowly adopted their own legislation and have updated their identities. In terms of IP rights protection, while the procedures are quite expedited in some countries (eg, Jamaica, Belize and Trinidad), they are slow and tedious in most of the Caribbean (eg, in Antigua, Barbados and Guyana). The Bahamas has by far the slowest system, with one trademark application taking more than six years to mature to registration. The speed of the process is hindered by the lack of personnel at the Caribbean registries for example, in Cayman, only one person handles all IP matters and if he or she goes on holiday,
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nothing is processed. In Anguilla, although the legislation provides for the registration of Community trademarks, this is subject to the governor publishing a notice to this effect in the Official Gazette. As this has not yet happened, no Community trademarks can be registered there. New legislation is expected to be enacted in Bermuda and Trinidad but, as yet, nothing has been confirmed. In Trinidad, the proposed trademark legislation has not yet been passed by Parliament, although this is scheduled to happen by the end of 2011. Extending UK registrations Although the extension of UK registrations is no longer possible in many Caribbean countries, this option is still available in Anguilla, Cayman, Bermuda, BVI, Dominica, Grenada, Guyana, Montserrat and TCI. The re-registration of UK trademarks in these islands is coterminous with the duration and validity of the mark in the United Kingdom. Hence, rights holders must remain vigilant if a UK registration undergoes changes or is renewed, such changes must be made to the marks underlying counterpart in each Caribbean country. While the Bermudan Trademarks Act 1974 provides for local trademark applications with effect from the date of application, no provision extends the registration of UK trademarks to Bermuda. Instead, under the act, trademarks registered in the United Kingdom (under UK rather than Community or international provisions) will automatically be deemed to meet the Bermudan registrability criteria, subject to the same conditions and limitations imposed by the UK registrar. In essence, this provision enables UK rights holders to have their trademarks re-registered in Bermuda expeditiously. Nevertheless, the act makes clear that the acceptance of such applications is at the discretion of the registrar. Only trademarks registered in the United Kingdom can be used as the basis for Bermudan re-registration. At present, Community trademarks and international registrations which designate the United Kingdom (and the European Union) cannot be re-registered. In contrast, Montserrat has established its own local trademark system which preserves the possibility of extending UK registrations. Hence, it has adopted a dual filing system providing for both local and UK registrations. Other countries that operate in this manner are Anguilla, Bermuda and BVI. On May 18 2004 St Vincent changed its trademark law to leave behind its UK dependency, and St Kitts and St Lucia have done the same. Dominicas Marks, Collective Marks and Trade Names Act 1999 entered into force on February 2 2009, 10 years after it was proposed.
Nice Classification The Ninth Edition of the Nice Classification system (the latest version) applies in the Caribbean countries of Anguilla, Antigua, Belize, Barbados, Cuba, the Dominican Republic, Guyana, Jamaica, Haiti, St Kitts, St Lucia, St Vincent and Suriname. In contrast, Trinidad applies only the Seventh Edition. In Belize, class headings cannot be filed; in cases of doubt, the Belize IP Office will issue an office action requiring that the specification be clarified. BVI and the Bahamas have developed their own local classification systems. Rights holders should bear this in mind when considering filing trademarks there, as they will probably need to tailor their specifications to these unique classifications. Single or multi-class application Various Caribbean countries allow for the filing of trademark applications in more than one class. However, Barbados, Bermuda, Guyana, Haiti, Suriname and TCI still use a single-class filing system. Although in Belize it is possible to file multi-class applications, each application is limited to five classes. Therefore, a new application is required from the sixth class onward. In Cayman, it is possible to restrict the extension of a UK registration to several classes covered by the UK registration. Service marks Service marks are now registrable in most Caribbean jurisdictions, with exceptions as follows: Service marks cannot be filed in the Bahamas, as the Trademarks Act dates back to 1906; In Suriname, it is not possible to obtain registration of a service mark through any alternative route as the registry is not yet automated, this presents risks to rights holders; and In Guyana and BVI, service marks can be registered only as an extension of a UK registration. Paris Convention priority The claiming of Paris Convention priority is often essential for an international filing. While priority can usually be claimed readily in the Caribbean, there are several exceptions (ie, Antigua, the Bahamas, Bermuda, BVI and Cayman). In the Bahamas, all priority documents are required at the time of filing; a certified copy of the priority application cannot subsequently be filed. Using trademarks The Caribbean trademark regime comprises legislation that is generally outdated compared to the minimum
Caribbean E-Proint
international standards imposed by WIPO and the World Trade Organisation Agreement on Trade-Related Aspects of IP Rights (TRIPs). However, the common factor is that a trademark must be used within a certain time after the registration date. Use of a trademark allows the owner to preserve its right over the registration, and is evidenced by the exploitation and commercialisation of the product or service protected by the trademark. The mandatory use of a trademark acquires international and national relevance due to economic globalisation. However, at national level each jurisdiction requires use of the trademark that is, international use of the mark will not suffice to satisfy the use requirement in each country. This is supported by TRIPs and the Paris Convention Treaty. The use of a trademark is vital given that one of the primary functions of a mark is its capability to identify the origin of goods and services. A rights holder must justify the exclusivity of the rights granted by the trademark; thus, a lack of use creates a loophole for a third party to initiate a cancellation action based on nonuse. In Anguilla, Aruba, Grenada and Cayman, no legislation regulates the use of trademarks. In Grenada and Cayman, both UK dependencies, local trademark registrations are subordinated to the existence of an underlying UK registration. In such cases, cancellation actions based on non-use have no basis. In Aruba, cancellation actions based on non-use are accepted. The use of a trademark within five years of the registration date is mandatory in Antigua, the Bahamas, Barbados, Belize, Bermuda, BVI, Curacao, the Caribbean Netherlands, St Maarten (Dutch side), Guyana, Haiti, Montserrat, St Lucia and Puerto Rico. In Antigua, a trademark owner can argue that it had good cause not to use the mark for example, the lack of demand for a product in Antigua. In Belize, use of a trademark outside the five-year period can overcome the lack of use if no third party has filed a cancellation action in the interim. In such case, the owner must pay a reactivation fee and justify the lack of use. Due to a lack of legislation regulating the revocation of trademark rights, in Bermuda it is unnecessary to prove use of a trademark; rather, in order to renew a registration it is sufficient to indicate that a trademark is in use in commerce. In Puerto Rico, a declaration of continuous use is required on renewal and evidence of use must be attached. In the case of applications filed on an intent to use basis, use of the mark should commence within five years of filing the application. Such use cannot commence once the five-year period has passed.
In Suriname, the use of a trademark for at least two to three months at least every three years is recommended. In Curacao, the Caribbean Netherlands and St Maarten (Dutch side), nullity cannot be invoked if, between the end of the five-year period and the filing of a cancellation action based on non-use, the trademark is used or reused in commerce. Initial or renewed use in the three months after the filing of the cancellation action will not be considered to be good use if the third party can show that the preparations to use the mark were made only after the owner became aware of the cancellation action. Use within a three-year period is imposed by the legislation in Cuba, Dominican Republic, Jamaica, St Kitts & Nevis and St Vincent. In St Vincent, a trademark can be subject to cancellation if it is not used in commerce in a continuous manner. The three-year period does not necessarily start to run from the registration date. In Dominica, the use period for a national registration is three years, while for UK-based registrations it is five years from the UK registration date. Undoubtedly the obligation to use a trademark in the Caribbean is a way of controlling possible conflicts between a rights holder and an interested third party. For this reason, the penalty in cases of non-compliance with the use requirement is cancellation of the exclusive right. Timeframes When filing applications in the Caribbean, it is important to consider the different timeframes taken across the different jurisdictions. In Guyana, the entire trademark recordal system is manual. There is no electronic filing and the whole registration process, from the date of filing to issuance of the certificate, can take three years. The validity of the registration certificate is retroactive to the filing date. The process commences with the filing of four copies of the mark, accompanied by an authorisation from the rights holder. The authorisation requires no notarisation, legalisation or protocolisation. After filing, the mark is advertised in the Official Gazette, and one month later the mark becomes eligible for registration if no opposition is filed. The registrar then issues a certificate of registration. In contrast, in the Bahamas no filing receipt is issued. Instead, a receipt of payment is granted within six to eight months of filing the application. The registry can then take between 16 and 18 months to issue a registration certificate. In Barbados, evidence of filing is made available within eight weeks of the filing date and the corresponding registration certificate is issued within 12 to 15 months.
E-Proint Caribbean
In Bermuda, the filing receipt is issued in between one and three months, and the certificate of registration within two to 13 months of the filing date. The registration date in Bermuda dates back to the application date, rather than the date on which the mark was advertised or the certificate was issued. In St Lucia, St Vincent and St Kitts, a registration certificate is issued within three to seven months. In general (with a few exceptions), the trademark registries in the Caribbean are understaffed and use hard-copy files, and in many cases documents go missing or files get lost for months or even years. How to benefit from a Caribbean filing No single trademark application is capable of securing protection across all the Caribbean countries. Rather, separate filings are required for each jurisdiction. The benefit of filing in the Caribbean is obvious: with the exception of the Dominican Republic, where a power of attorney must be legalised, all powers of attorney and agent authorisations require only notarisation. In some cases, simply affixing the company
seal will suffice. In Cuba and Belize, no formalities are required, while no power of attorney is needed in Puerto Rico or Jamaica. Therefore, when considering filing an application in a case with a tight deadline and where priority is being claimed, it is best to file in those islands where the power of attorney or agent authorisation and priority documents can be filed late (ie, Anguilla, Barbados, Belize, Cuba, the Dominican Republic, Haiti and Jamaica). In Antigua and Bermuda, the agent authorisation can be filed late, but priority cannot be claimed. The Caribbean countries now understand the importance of adequate IP legislation and are slowly streamlining their legislation in order to bring it into line with international standards. Legislative changes are awaited with great interest. They are increasingly making IP matters a top priority, which in turn attracts foreign investment to the region, providing for lower filing costs and resulting in more efficient management of trademark portfolios. All these efforts combine to strengthen the position of rights holders in the Caribbean.
Gabriela Bodden IP attorney gbodden@eproint.com E-Proint Caribbean
Gabriela Bodden is a recognised expert in international trademark law. She focuses primarily on trademark, copyright and patent matters, as well as advertising and legal disputes. Ms Bodden also counsels clients on the selection and registration process of IP rights and their enforcement, adding a significant competitive advantage to clients portfolios. She has extensive experience in handling complex international IP portfolios throughout the Latin American and Caribbean region, covering matters such as clearance searches, trademark filings, the prosecution and maintenance of trademarks, licence and franchising contracts, cautionary notices and piracy issues. She initiates and completes opposition actions, lawsuits and office actions before the registries and courts of various countries. Ms Bodden has written and co-written chapters on trademark practice and procedure for various IP publications.
Aarn Montero IP attorney amontero@eproint.com E-Proint Caribbean
Aarn Montero is a recognised expert on trademark law. He focuses primarily on trademark, copyright and patent matters, as well as advertising and legal disputes. Mr Montero also counsels clients on the selection and registration process for trademarks and the enforcement and registration of trademarks and copyrights in order to add value and a significant competitive advantage to clients portfolios. Mr Montero possesses vast expertise in the drafting, preparation and filing of patent applications and the analysis of invention disclosures and making patentability and infringement options, in addition to having prosecuted national and foreign patent applications in various fields. He is a lecturer in intellectual property at the University of Costa Rica and is a member of the Costa Rica Bar Association, the Costa Rican Institute of Technology and the Computer Law Association.
Dianne Daley and Nicole Foga Foga Daley
Jamaica Legal protection of databases: Jamaican litigants test the bounds of the Copyright Act
In early 2011 Jamaicas Supreme Court issued a critical ruling on the Copyright Act which directly impacts on the telecommunications industry, as well as developers and users of databases in Jamaica. Database protection has come a long way internationally since the 1995 World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). The agreements framers sought to make it explicit that only databases that, by reason of the selection and arrangement of their contents, constitute intellectual creations can qualify for copyright protection; such protection is independent of any protection that may exist over the databases contents. Since then, several jurisdictions in particular the United Kingdom and other members of the European Union have effectively created a new database right through the implementation of the EU Database Directive (1996). This protects databases which would be disqualified from copyright protection by virtue of the TRIPs standard. Although Jamaicas prevailing Copyright Act 1993 which repealed the century-old Imperial Copyright Act 1911 insofar as it applied in Jamaica was modelled on the copyright provisions of the UK Copyright Designs and Patents Act 1988, it has not kept pace with the numerous revisions that the UK act has undergone and does not recognise a sui generis database right. However, its only substantive amendment in 1999 to implement the TRIPs obligations recently took centre stage in a legal battle that sought to determine whether copyright extends to factual databases. The claims In May 2005 former monopoly telecommunications provider Cable and Wireless Jamaica Ltd (C&WJ), which held sole access to its directory services and products database, sought a declaration from the Supreme Court that it was the owner of the copyright and related rights in its customer and directory database/listings. The move was precipitated by the introduction of competition in Jamaicas telecommunications market and steps taken by the regulator, the Office of Utilities Regulation, to liberalise access to related directory services and products which included C&WJs directory database. C&WJ claimed that such access would infringe its copyright and related rights in the database and information. One of two new entrants in the mobile telecommunications market, Mossel (Jamaica) Limited (trading as Digicel), challenged C&WJs claim and asked the court to dismiss it for uncertainty of subject matter and uncertainty of the rights sought by the claimant. It also sought a number of alternative orders namely, that the court should find that the Copyright Act did not accord protection by way of copyright or related rights to facts or data comprised in the claimants directory database/listings, and/or that the claimants customer and directory database/listings did not qualify as original intellectual creations and as such were not protected by the Copyright Act. Finally, in the event that the court found that any copyright existed in the customer and directory database/listings, Digicel sought a declaration that such protection did not extend to the factual information or data comprised therein, and that accordingly, access to that information by Digicel ought not to be impeded by virtue of the Copyright Act. The other new entrant, Oceanic Digital Jamaica Limited (then trading as MiPhone), joined with Digicel in its challenge to C&WJs claim. The arguments In its claim C&WJ referred to different products comprising its customer and directory database listings, including the first telephone directory made available to the public in 1927 comprising: the White Pages, embodying subscriber information; the Yellow Pages listings; and the continuous updating of the first directory, including the rearrangement of the data in 1987 and 2004/2005.
Foga Daley Jamaica
C&WJ argued that all of these products were protected by copyright, relying on, among other things, its financial investment in their development. However, Digicel argued that the subject matter customer and directory/database listings over which C&WJ sought to claim ownership rights was too vague as it encompassed a number of outputs, including factual information, and could include proprietary material belonging to third parties. However, its strongest arguments were that the factual subscriber information such as names, addresses and telephone numbers included in the claimants database would not attract copyright, and that the database did not constitute an original intellectual creation based on the Copyright Act. If the court were to grant the declaration sought by C&WJ that copyright vested in its customer and directory database/listings, including continual updates, Digicel argued that the practical effect would be the grant of perpetual proprietary rights in facts and other non-copyrightable material. This would also be inimical to public interest. No copyright in ideas Digicel relied on Section 6(8) of the Copyright Act, which provides that Copyright protection does not extend to an idea, concept, process, principle, procedure, system or discovery or things of a similar nature, to support its assertion that a person who uncovers facts or makes a discovery cannot claim authorship of the facts so uncovered. Comparisons were drawn between Section 6(8) and an equivalent provision in the US Copyright Act 1976 ( 102(b)) which excludes ideas, procedures, processes systems, methods of operation, concepts, principles and discoveries from copyright protection. This provided a basis for Digicel to rely on US cases such as Feist Publications Inc v Rural Telephone Service Co (1991), the celebrated US authority that no copyright exists in a White Pages telephone directory, and Harper & Row, Publishers, Inc v Nation Enterprises (1985). In Feist v Rural it was stated that copyright is not to be used as a tool by which a compilation author may keep others from using the facts or data he or she has collected, while it was reiterated in Harper & Row that no author may copyright facts or ideas. These cases were contrasted with the approach taken by the English High Court in Waterlow Directories Ltd v Reed Information Services (1992), relied on by C&WJ. The court in that case held that copying entries in a directory infringed copyright. However, Digicel submitted that Waterlow Directories pre-dated the 1998 amendment of the UK copyright provisions, which expressly excludes ideas and mere data from copyright.
Copyrightable databases In considering whether the database itself qualified for copyright protection, the court was referred to Article 10.2 of TRIPs, which outlines that copyright protection is to be afforded to: compilations of data or other material, whether in machine readable or other form, which by reason of the selection or arrangement of their contents constitute intellectual creations. Such protection, which shall not extend to the data or material itself, shall be without prejudice to any copyright subsisting in the data or material itself. The 1999 amendment to the Copyright Act provides in Section 2 that: A literary work includes a compilation which means a collection of works, data or other material, whether in machine readable or other form, which constitutes an intellectual creation by reason of the selection or arrangement of the works, data or other material comprised in it. Section 3 (A) goes on to limit protection to the compilation itself by providing that: Copyright subsisting in a literary work that is a compilation does not extend to any works, data or other material comprised in the compilation and does not affect any copyright which may exist in such works, data or other material. Digicel argued that Section 6 of the Copyright Act outlines that copyright may subsist in original literary works, and that original literary has been interpreted as being a composite term in that neither can qualify for protection standing alone. It was submitted that it would therefore follow that a compilation of data would qualify for copyright protection under the Copyright Act only where, by virtue of the selection and arrangement of its contents, it constituted an original intellectual creation. Where copyright protection is found to exist by virtue of this criterion, such protection will be independent of the actual data found in the compilation. C&WJ countered that the words intellectual creation ought to be interpreted as meaning that the compilation must be original that is, that it is the authors own creation and not copied from someone else. In submitting that the labour, skill and capital it employed in canvassing, selecting and arranging raw material would justify copyright protection in the output, C&WJ relied on MacMillan and Co Limited v Cooper (1923), where Lord Atkinson opined that: To secure copyright for this product it is necessary that labour, skill and capital should be expended sufficiently to impact to the product some quality or character which the raw material did not possess, and which differentiates the product from the raw material. C&WJ also referred to the 1868 case of Morris v Ashbee, where copyright in directories was found to
Jamaica Foga Daley
The nature of the copyright in a database, it was argued, lies in the selection or arrangement of its contents and not in the nature of the contents themselves
exist. In that case Vice Chancellor Giffard stated that: the Plaintiff incurred the labour and expense first of getting the necessary information for the arrangement and compilation of the names as they stood in her directory, and then of marking the actual compilation and arrangement, that in a case such as this no one has a right to take the results of the labour and expense incurred by another for the purpose of a rival publication, and thereby save himself the expense and labour of working out and arriving at those results by some independent road. If this was not so, there would be practically no copyright in such a work as a directory. Digicel countered that C&WJ was attempting to claim and import a right namely the sui generis database right which is not conferred under the Copyright Act or the laws of Jamaica, and that, moreover, the cases relied on by C&WJ pre-dated the TRIPs Agreement and the 1998 amendments to the UK copyright provisions. The nature of the copyright in a database, it was argued, lies in the selection or arrangement of its contents and not in the nature of the contents themselves. It therefore follows that copyright in databases under the TRIPs definition, as implemented in Jamaican and UK law, is infringed where the selection or arrangement is copied, not where the content itself is copied. The post-TRIPs scenario has therefore impacted on previous compilation cases, particularly in the United Kingdom. Digicel sought to persuade the judge to consider cases from other jurisdictions, such as the United States and Canada, and referred to the different approaches to the protection of databases which prevailed prior to TRIPs, highlighting distinctions between: jurisdictions which deemed non-creative or factual databases (also termed sweat of the brow databases) copyrightable by virtue of the level of effort or investment in their creation; and those which followed the so-called creativity school by conferring copyright only on databases that were original and creative.
The US case of Feist v Rural followed the creativity school and consequently works resulting out of effort, industry or sweat of the brow only will not qualify for copyright protection. Digicel also relied on the 1997 Canadian case of Tele-Direct Publications v American Business Information, where the Court of Appeal upheld the lower courts finding that there was no copyright in the information contained in a Yellow Pages directory as there was not a sufficient degree of originality in the sub-compilation. There was only a minimal degree of skill, judgment or labour in its overall arrangement which was insufficient to support a claim of originality in the compilation so as to warrant copyright protection. Digicel went on to argue that TRIPs laid out a higher originality test for copyright protection in databases and had the effect of nullifying the sweat of the brow test as a definitive criterion, and that consequently factual databases which are purely the product of sweat of the brow efforts were no longer protected by copyright. The judgment Justice Rattray, who heard the matter, found merit in the submissions of counsel for Digicel and dismissed C&WJs application, stating as follows: I do not accept the submissions of Counsel for C&WJ that the words intellectual creation ought to be interpreted as meaning that the compilation must be original, that is, that it is the authors own creation, not copied from someone else. That in my view is too restrictive an approach to take. True it is that the compilation cannot belong to someone else or be copied from someone else. However, copyright subsists in original literary works. Literary works include a compilation, which is a collection of data, works or material which constitute an intellectual creation by reason of the selection or arrangement of the contents of the compilation. If the phrase intellectual creation is taken to mean that the compilation must be original, the only prerequisite for a compilation to be afforded copyright protection would be that the work in question ought not to be copied from someone else. Apart from originality in the selection or arrangement of the works
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contained in the compilation there must also be an element of intellectual creativity in that selection or arrangement for the compilation to be entitled to copyright protection under the Act. The judge went on to state that: I am further satisfied that in an instance where copyright subsists in such a compilation, the protection afforded by that copyright does not extend to the actual contents of the compilation. The court thus granted a declaration that the Copyright Act did not accord by way of copyright or
related rights to facts or data comprised in the claimants directory database/listing or at all, and that the claimants customer and directory database/listings did not qualify as original intellectual creations and as such were not protected by the Copyright Act. The ruling, which was handed down almost six years after the hearing while not yet affirmed by an appellate court, having been appealed by C&WJ should give pause to those who are heavy on investment but lacking in creativity in their development of databases in Jamaica.
Dianne Daley Partner daley@fogadaley.com Foga Daley Jamaica
Dianne Daley is Foga Daleys IP partner. Her principal practice areas include transactional IP rights, IP rights acquisition and IP portfolio management in the areas of trademarks, designs, copyright and related rights, patents and trade secrets. Ms Daley chairs the IP Committee of the Jamaican Bar Association and is vice chairman of the Jamaican Copyright Licensing Agency. She is a member of the International Association for the Advancement of Teaching and Research in Intellectual Property, the International Trademark Association (INTA) and the Global Advertising Lawyers Alliance. Ms Daley holds an LLM in comparative law from McGill University and an LLB from the University of the West Indies. She is the author of Jamaica: Intellectual Property, International Encyclopaedia of Laws, Kluwer Law International, Intellectual Property Suppl 47 (September 2008), and the Jamaica chapter in Copyright Throughout The World, edited by Silke Von Lewinski (Thompson West Vol 2 (2008) Chapter 21).
Nicole Foga Partner foga@fogadaley.com Foga Daley Jamaica
Nicole Foga is Foga Daleys managing partner and heads the communications, media and technology department. Her practice areas include communications law, information technology, intellectual property and commercial law. She holds an LLM in commercial law from Aberdeen University and an LLB and BA from the University of the West Indies. Ms Foga chairs the Technology, Broadcasting and Telecommunications Committee of the Jamaican Bar Association and is a member of Jamaicas Copyright Tribunal, the Jamaica Computer Society, INTA, the Global Advertising Lawyers Alliance and the Inter-American Bar Association, as well as an associate member of the American Bar Association. Her previous appointments include general counsel for the Office of Utilities Regulation, legal adviser to the Broadcasting Commission and crown counsel in the Attorney Generals Department. She has been a featured speaker on electronic transactions and IP issues, and has authored and co-authored several articles on intellectual property published internationally.
Juan Carlos Amaro and Hctor Chagoya Becerril, Coca & Becerril, SC
Mexico Applying the doctrine of equivalents in patent litigation

The scarcity of patent litigation cases in Mexico as compared to other jurisdictions has resulted in a lack of case law in several key areas of patent litigation. One such area is the situation where a product does not have all of the features of the claims of a granted patent, but is so close that it appears that a feature was changed to circumvent patent coverage through the incorporation of an equivalent feature. Under US practice, this is known as the doctrine of equivalents. Concept of equivalent features In addition to the legal definition that every jurisdiction gives to the term claim, in patent practice this term is understood to be a technical description of certain features that are considered essential in a patented invention, and which by virtue of such essential nature define the invention as unique. Such features are what make the invention special and are thus protected by the patent. Consequently, only those products or processes having all of the essential features recited in at least one of the claims of a patent would be considered to infringe that patent. However, the interpretation of a claim is dependent on how it is written; the skill and experience of the drafter of a claim and the knowledge available to him or her at the moment of drafting determine the writing of the claim. Accordingly, a badly written claim will make it harder to enforce that claim, thus giving infringers an opportunity to circumvent patent rights by making modifications that still fall under the teachings of the patent at issue. Therefore, under the doctrine of equivalents, the patent should be considered to be infringed if some of the claimed features were substituted by other features that are equivalent or perform the same function as the claimed feature. Sections XI, XII, XIII and XIV of Article 213 of the Industrial Property Law state that an infringement occurs when a patented product or process is exploited through means reserved to the patent holder. However, the law is vague in the sense that there are no rules for determining what constitutes a patented product or a patented process; rather, there is only the indication that the rights conferred by a patent shall be determined by the granted claims (Article 21 of the law), and that such claims should be interpreted by the description and drawings. This lack of clarity in the interpretation of patent infringement, which mostly affects the patent holder (which must prove the strict violation of the patent claims), should allow for the application of the doctrine of equivalents without the need for amendment of the Mexican law. Conceptually, the doctrine of equivalents is necessary to protect the patent holders from copies of their patented inventions that are expressly designed to avoid the language of the granted claims, but, at the same time, use the fundamental principles described in the patent. Express exclusion of features during prosecution The use of the doctrine of equivalents can, however, lead to abuse by patent holders by broadening the scope of the originally granted claims to features that the patent holder did not originally consider for protection. Under this approach, the public will never be able to read the claims and determine the actual scope of the granted exclusivity, thus potentially leading to abuse and a lack of clarity under the patent system. Accordingly, a necessary tool for a defence to infringement under the doctrine of equivalents is prosecution estoppel, which is equally applicable under Mexican law due to the vagueness described above. Thus, the patent rights must cover under the doctrine of equivalents or otherwise any form in which an invention could be copied, unless the patent holder has previously expressed the clear intention to exclude any such form.
Becerril, Coca & Becerril, SC Mexico
The unforeseeable feature and equivalents More recently, the criteria adopted and broadly studied in the United States, derived from cases such as Jonson & Johnston Ascos Inc v RE Serv Co (2002) and their further clarification in Festo Corp v Shlketsu Kinzoku Kogyo Kabushiki Co (2003), have shown the evolution of the doctrine of equivalents: If the equivalent feature is the result of a technology that was developed on a date later than the filing date of the patent, it would have been impossible for the patent holder to include such feature in the patent. Once the new technology has been developed, those skilled in the art can combine the knowledge of the patent with the new technology, thus obtaining a result which those skilled in the art would expect based on the later developed knowledge, by virtue of which such a feature would be considered equivalent and should be considered as infringement. If the feature that is allegedly equivalent was part of the prior art, the analysis must show whether those skilled in the art could have inferred or foreseen that the feature in question could be substituted by another feature. As infringement is an act that occurs after a patent application has been filed and granted, the modification for the sake of equivalence always happens after the event. Therefore, if the possibility of modifying the feature was evident before the event to those skilled in the art, a product with features that were foreseeable but not claimed would not be covered by the patent because the patent holder had the will to exclude such foreseeable features or variations from protection, given that he or she is a person skilled in the art. However, unlike in the United States, in Mexico, patents can be filed and prosecuted by any person, and inventors commonly file patents on their own without using a patent agent. Furthermore, there are no certifications available for patent prosecutors in Mexico, and therefore the quality of prosecution and drafting of certain patents is questionable. The criteria described above are certainly good for a jurisdiction that has an advanced level of development in the patent system, led by certified professionals in patent prosecution. Equivalence under Mexican law Literal approach to infringement Several articles of the Industrial Property Law are relevant for interpreting the claims of a patent in case of infringement. Article 12 defines the term claim as the essential feature of an invention which defines the scope of the patent (under Article 21).
Similarly, Article 25 expressly sets out the rights that are reserved to the patent holder, including the possibility of preventing others from using patented products and processes and from manufacturing, selling, offering for sale or importing patented products or processes. The law uses the vague expression patented product or patented process, which refers not to the claimed invention, but rather to the protection given by the patent. The interpretation of patents in Mexico is also affected by Article 12 of the Agreement Establishing the Rules for Filing Applications before the Mexican Institute of Industrial Property (IMPI). This article expressly governs the practice of drafting claims in two parts by stating that, when applicable, the claims of a Mexican patent must contain a first part describing features of the prior art that are essential for the practice of the invention, followed by the words characterised in that or a similar phrase, after which the novel and inventive features for which protection is sought must be listed. This legal framework makes it clear that Mexican law requires a literal approach to be taken in order to determine infringement. In other words, in order to determine whether a product infringes a patent under Articles 213 and 21 of the Industrial Property Law, an infringing product must contain every feature of at least one patent claim. Accordingly, technically it must be proven that all of the essential features of the claim are present in the infringing product in order for it to be considered an infringement. Here, the essential nature of the features in a claim must be emphasised, because this means that the number of features in the claim is the minimum number of features that must be present in a product or process in order for it to be considered to be the patented product or the patented process, depending on the specific writing of the claim itself with regard to the terms comprising, consisting of or similar. Consequently, if the allegedly infringing product lacks at least one of the essential features of a claim, under a literal approach it cannot be considered to infringe the patented invention, as it lacks one of the features defining its essence. Infringement when one essential feature is substituted by another One of the main requirements for the doctrine of equivalents to apply is that at least one of the features in a claim not be present in the infringing product. This means that the literal approach to infringement must have led to a negative result.
Mexico Becerril, Coca & Becerril, SC
In order to determine whether a product infringes a patent under Articles 213 and 21 of the Industrial Property Law, an infringing product must contain every feature of at least one patent claim
Strictly speaking, given that the Industrial Property Law does not establish a specific criterion for determining whether a process or product is patented, and given the failure of the literal infringement approach, the first conclusion could be that there is no infringement. However, Article 21 of the law clearly states that the claims can be interpreted in light of the description and drawings; therefore, it is clear that under the law the claims can be interpreted beyond the way in which they are actually written. Accordingly, where infringement could not be established under the literal approach because at least one of the essential features was not present in the allegedly infringing product, the nature of such feature must still be analysed in order to determine the possibility of infringement through an equivalent feature in the context of the description and drawings of the patent. Under the IMPI filing rules, when a patent is drafted in two parts it is also important to consider that not all of the features in the claim are novel and inventive, but only those after the characterising phrase. This involves consideration of the balance to be achieved by the public in understanding what is known and what is new and can be substituted by an equivalent. Accordingly, if an allegedly infringing product is different from the patent claims in a feature that is part of the prior art portion of the claim and not part of the characterising portion, it could be understood that the inventor sees these features not as novel and inventive, but rather as necessary to practise the invention. Therefore, the lack of such a feature in the infringing product must clearly be considered equivalent if all of the features in the characterising portion are present in the same product. This is consistent with the doctrine of equivalents because in this case, clearly the novel and inventive features of the invention are being used by the
infringing product even though the prior art features were substituted or even eliminated. The characterising portion supposedly includes the features that are intended to be protected and that are therefore novel and inventive. In principle, the absence of these features could lead to a fundamental difference from the infringing product. Therefore, under the traditional approach to equivalent features, such a feature must be analysed according to its function and in the context of the description in order to determine whether it has been substituted by an equivalent feature. Although the IMPI filing rules provide an initial guide to the interpretation of claims, the analysis of equivalents in Mexico cannot be reduced to this type of claim because some patents do not include such drafting, and the fact that a product does not have a certain feature it does not mean that it has not been substituted by another equivalent feature. Therefore, the same analysis of whether a person skilled in the art could substitute such a feature for an equivalent feature in light of the description and drawings must be carried out for all features in the claim, just as in the case of the features in claims drafted in two parts with a characterising portion. Evidently, this criterion is inconsistent with some US decisions in terms of foreseeable features, but two differences justify this criterion under Mexican law and practice with regard to the United States. First, as mentioned above, the Mexican patent system has no registry of certified professionals qualified for patent prosecution before the IMPI. Accordingly, many patents are filed directly by inventors or by legal professionals who are not necessarily skilled in patent prosecution. Therefore, the holders of such patents would be unable to use the doctrine of equivalents and would have no recourse against copies of their inventions with obvious and insignificant variations or changes.
Becerril, Coca & Becerril, SC Mexico
In addition, if the claim included a feature which the patent holder had expressly excluded from protection during prosecution, it would have been either excluded from the claim or put in the prior art section of a twopart drafting. Both these issues must be corrected through a nullity action before the same patent office, which is a separate proceeding unlike in the United
States, where validity and infringement are analysed by the same court concurrently. Therefore, it appears that for Mexican practice, an approach similar to that taken in Graver Tank & Manufacturing Company v Linde Air Products Company (1950) and later in Warner Jekinson v Hilton Davis Chem (1997) would be more suitable.
Juan Carlos Amaro Partner camaro@bcb.com.mx Becerril, Coca & Becerril, SC Mexico
Juan Carlos Amaro is an attorney at law. He joined Becerril, Coca & Becerril, SC in 2004 and became a partner of the firm in 2010. He is a member of the International Trademark Association, the American Intellectual Property Law Association, the International Association for the Protection of Intellectual Property Mexico, the International Chamber of Commerce, the Barra Mexicana Colegio de Abogados and the Intellectual Property Owners association, where he participates in the litigation and international trademark law and practice committees. Mr Amaro has participated in several forums on IP matters and has published various articles in different media. He focuses his practice on IP and administrative litigation, anti-counterfeiting and constitutional law. He is mainly involved in representing pharmaceutical clients in patent litigation.
Hctor Chagoya Partner hchagoya@bcb.com.mx Becerril, Coca & Becerril, SC Mexico
Hector E Chagoya is a chemical engineer. He joined Becerril, Coca & Becerril, SC in 1997 and became a partner in 2010. He is in charge of the firms technology transfer activities and advises on patent strategies, patent litigation and licensing. He is international vice president of the Licensing Executives Society International 2011 and part of various other national and international associations related to Intellectual Property and Chemical Engineering. Mr Chagoya is the first person in Mexico to achieve the Certified Licensing Professional certification and is recognised as a leading patent practitioner.
Matas Prez-Irazbal Hoet Pelaez Castillo & Duque
Venezuela Standing on its own: Venezuela re-establishes its national IP system

Protecting domain names In Venezuela, domain names are issued by and protected through the Centro de Informacin de la Red de la Repblica Bolivariana de Venezuela. The registry provides protection for second-level domain names for the .co.ve, .com.ve, .net.ve, .org.ve, .info.ve and .web.ve extensions. In a similar manner to trademarks, the registration of domain names is governed on a first come, first served basis, with the particularity that registration of domain names is not subject to an administrative procedure, as trademarks are. Sometimes it is unclear which extension should be chosen for registration, In order to decide, it is necessary to take into consideration the nature of the website and to bear in mind that in Venezuela, the most important extensions are .com.ve, .co.ve, .net.ve (which represents the word network) and .web.ve, which is designed to be used for publicity purposes (specifically for non-permanent campaigns). Therefore, when considering the registration of a trademark, it is vital to consider not only registering high-level domains such as .com.ve and .net.ve, but also protecting your trademark by using domain name protection to complement trademark protection. Trademark owners can register all possible extensions and redirect them all to one webpage by using the same domain name server. This additional protection prevents a third party from threatening the brand identity by using a third-level extension for derogatory purposes. Trademark infringement carried out through the use of domain names is common. Although the Internet Corporation for Assigned Names and Numbers Dispute Resolution Procedure is available, the Venezuelan national registry sets down requirements for domain name registration which, in most cases, are also used by the host provider. In practice, conflicts between trademarks and domain names, as well between domain names, have been resolved by the correct use of such requirements the host provider usually agrees to shut down the conflicting website. Even if the rights holder does not instigate court proceedings, the host provider is considered to be responsible for allowing or cooperating with an infringement. Therefore, trademark owners should also consider broader protection using the domain name system. New regulations on trademark and patent filings Recently, Venezuela has become more independent in terms of IP rights, specifically in relation to trademarks and patents. This is because in September 2008 the Venezuelan Patent and Trademark Office (VPTO) reinstated the enforceability of the Industrial Property Law 1955. The 1955 law applied until Decision 486 of the Andean Community of Nations came into force during the 1990s. As a result, the VPTO has issued new regulations governing the filing process; rights holders should bear the new regulations in mind when preparing a global filling programme. One VPTO notice stated that trademark applications shall be accepted only if they are submitted with all documents established by the law, including priority documents and power of attorney; previously, the late filing of these documents was allowed. In light of the above, in order to comply with the new regulations, all trademark, slogan and commercial name applications must be accompanied by the following: a phonetic search (denominative trademark); a graphic search (graphic trademark); a search of figurative and phonetic elements (complex trademarks); and a power of attorney (if the power of attorney comes from abroad, it must be notarised and certified by apostille or legalised by the Venezuelan consulate; if it has been granted in a language other than Spanish, it must be translated by a Venezuelan certified translator).
Hoet Pelaez Castillo & Duque Venezuela
Since the reinstatement of the Industrial Property Law, the VPTO has also ordered that all applications must comply with both local and international classifications. Applications may be subject to reclassification where an international class falls into more than one local class. In this respect, the local classification is the same local classification as is used in the United States, but with the particularity that instead of filing a single application indicating the international classification and the corresponding local classes, in Venezuela, it is necessary to submit as many applications as the number of local classes corresponding to each international class. In light of such requirements, the filing of trademarks takes more time than previously. Thus, this should be taken into consideration when a filing programme is based on the Paris Convention or a specific filing date is needed. Dealing with the lack of border measures Although the Industrial Property Law does not include the border measures and other enforcement procedures and remedies which were available under the Andean Community of Nations regime, trademark owners can still employ effective remedies against the commercialisation of counterfeit products. On one hand, the Customs Law provides that the National Integrated Customs and Tax Administration Service (SENIAT) shall, at the request of the competent IP authority, prevent the clearance of goods suspected of violating IP rights held in Venezuela or derived from an international agreements to which Venezuela is a party. At this time, Customs shall notify the owner, importer or consignee of the goods so that it can choose whether to initiate the corresponding legal actions (eg, obtaining provisional or final measures, or requesting the
imprisonment of the people involved in the illegal activity). However, SENIAT has issued the Administrative Order on the Enforcement of IP Rights in the Import and Transit of Goods through Customs. The purpose of this administrative order is to regulate the actions taken by the authorities and by rights holders in case of the infringement of validly granted IP rights. For this purpose, a verification procedure is available, according to which SENIAT is empowered to request documents from the consignee for example: documents attesting approval by the rights holder; a transfer or licence document; or a distribution or purchase contract for the goods. In the event that the consignee fails to provide the required documents, SENIAT officials shall proceed to retain or seize the goods and make the appropriate notifications to both the consignee and the rights holder. Both parties then have 10 days in which to initiate the actions deemed necessary. A lack of action by the parties does not constitute the end of the procedure; on the contrary, if no actions have been initiated by the deadline, SENIAT officials shall order the confiscation of the goods for the purpose of destruction, except for goods which can be donated, in which case any identifying trademark or design belonging to the rights holder must be removed before donation. Although the administrative order establishes that, for the purpose of customs control and facilitating the clearance of counterfeit goods, SENIAT may establish a registry of importers of IP assets, which should be organised together with the chambers and associations where rights holders may be grouped, as yet no such registry exists. It is hoped that SENIAT will improve its services in the near future.
Matas Prez-Irazbel Associate mperez@hpcd.com Hoet Pelaez Castillo & Duque Venezuela
Matias Prez is a junior partner with expertise in trademarks and intellectual property. He has a law degree from Universidad Fermn Toro and a masters in intellectual property from Universidad Metropolitana. Mr Prez is the author of a thesis on procedures to obtain a declaration of notoriety of trademarks in Venezuela and co-author of a thesis on illegal competition of Venezuelan trademarks within the Andean Community of Nations. He is a regular professor on intellectual property at the Caracas Design Institute and a guest professor on publicity law at Universidad Catlica Andrs Bello. His memberships include the Caracas Bar Association, the Venezuelan Association of Patent and Trademark Agents and the International Trademark Association.
Legal perspectives
Europe, Middle East & Africa
Susanne Hiberg and Louise Aagaard Hiberg A/S
Denmark On a journey towards a specialised patent court

Over the past few years, patent enforcement in Denmark at court level has become more centralised, which has gradually led to the development of a court with a higher level of experience in patent cases. This is likely to improve legal certainty greatly for both patentees and accused infringers. There are three levels in the Danish court system: district courts, the two high courts and the Supreme Court. Traditionally, patent disputes regarding infringement and invalidity were heard at high court level. Due to the low number of patent disputes and the high turnover of judges at the high courts, each high court judge would normally hear only a few patent cases during his or her career. Thus, there was a huge lack of experience among judges in the highly specialised patent field. Patent expertise, as well as technical expertise, has traditionally been brought into patent cases through court-appointed independent patent and technical experts. The case law shows that expert reports and testimonies were given much weight in the past, probably due to the high court judges own limited patent experience. Unfortunately, this lack of experience resulted in some unexpected rulings, giving rise to legal uncertainty in the patent field. In 2006 there was a general court reformation in Denmark. This led to various changes in court procedures and also changed the possible choice of courts for patent cases. As of January 2007, patent disputes, such as infringement and invalidity cases, can be heard in first instance by only one specialised court: the Copenhagen Maritime and Commercial Court. In addition to being a specialised court for maritime and commercial business matters, the Maritime and Commercial Court has been a specialised IP court for trademarks and designs (in particular European ones) for many years. Technical judges Unlike all the other courts in Denmark, due to its status as a specialised court, for a long time the Maritime and Commercial Court has had a combination of legal and technical judges (ie, technical judges with a maritime or commercial background). This tradition has now also been transferred to the patent cases it hears, and since the beginning of 2007, 15 technical judges with patent experience have been appointed. Generally, the patent technical judges have had many years of experience as either patent attorneys or in-house patent agents, and they have been appointed by either the organisation of in-house patent agents or the organisation of patent attorneys. Thus, the patent knowledge displayed in court hearings has increased significantly and will hopefully lead to more predictable results. Patent cases normally have one legal judge and two technical judges. The technical judges include one patent technical judge and either a patent technical judge or a commercial judge (the latter, in particular, being relevant when the case includes a request for damages). Second instance proceedings Under the previous legal system, the Supreme Court acted as the court of second instance in all patent cases, hearing appeals from high court decisions. It has been decided that it will continue this practice, since Maritime and Commercial Court decisions will usually be appealed to it. The Supreme Court has no technical judges with patent experience, but it can appoint patent experts and usually does so. In recent years, the Supreme Court has heard several patent cases. It has lately confirmed that it will adopt the same problem-solution approach for evaluating inventive step in Danish patents, as well as in Danish parts of European patents, as that implemented by the Boards of Appeal of the European Patent Office (EPO). This will help to ensure a similar application of patent law in Denmark as in other EU member states. The Supreme Court has also decided several cases involving equivalent infringement. Thus, it is well established in Denmark that a product or method may infringe a patent even if it does not fall within the literal
Hiberg A/S Denmark
scope of the claims. In order to be found to infringe a patent equivalently, the infringing product or method must take advantage of the core of the patent. In one of its latest decisions, the Supreme Court emphasised that in order to infringe a patent with an equivalent product, that product must apply the teaching of the patent to solve a similar technical problem. Apart from being the patent issuing authority, the Danish Patent and Trademark Office (DPTO) also offers various consultancy products. Recently, a high court deemed a company liable for patent infringement even though the company had previously obtained advice from the DPTO that it would not be infringing the patent in dispute. In this case, the Supreme Court placed much weight on the expert reports and ultimately ordered the company to pay 125,000 in damages and to destroy all the illegally prepared materials and tools used. In another recent case, the Supreme Court decided in favour of the accused infringer who had applied for a marketing authorisation for marketing a medicament in Denmark no medicaments had been sold or marketed. The Supreme Court decided that the act of merely applying for and obtaining a marketing authorisation could not be considered an infringing act. This ruling contrasts with several earlier district court decisions and it may end up changing a common practice in Denmark, which is to file a lawsuit at the same time as a marketing authorisation is given to a competitor. Outcome of court reformation Three-and-a-half years since the court reformation, it may be time to look back and evaluate the changes. In most patent cases, court-appointed experts are still used; however, it appears that technical judges have started using their expertise to form their own independent opinions. In a recent Maritime and Commercial Court decision, in particular, the judges provided for the first time a standard for the creative step of a utility model. Utility models are also called little patents as they expire after 10 years, whereas other patents can be valid for 20 years. Further, it is well established that the standard for creative step required for utility models in Denmark is set to be lower than that for the inventive step in patents. However, it has been unclear how much lower the standard actually is. The Maritime and Commercial Court has now defined the standard for creative step as being where the skilled person has narrower knowledge of the technical field than the skilled person in a patent case. Thus, in relation to a utility model, the skilled person could not have been expected to know of remote
prior art; as a consequence, the utility model was deemed valid in view of the discussed prior art. The courts decision has provided a useful tool to patent applicants. It is now possible to branch off a Danish utility model from a European patent application. If the examination of a European patent application is progressing slowly due to discussions of inventive step, it may be worth considering branching off a Danish utility model if infringement takes place in Denmark. Since the standard for creative step is lower than the standard for inventive step, this would thus give rise to a strong, albeit shorter-lived, right. In contrast to the situation in Germany, in Denmark a patentee is allowed to obtain both a utility model and a patent for an invention. It is too early to evaluate how predictable the Maritime and Commercial Court decisions in patent cases will be, but an improvement is expected. Appealing decisions from DPTO Board of Appeal Appeals arising from decisions of either the examination of patent applications or the opposition to patents may be further appealed. The high courts were previously the courts of choice for invalidity and infringement cases, but this has changed. The Maritime and Commercial Court is now the first instance for such cases, and as a result it will gain even more expertise in the patent field most likely to the benefit of both patentees and the other parties involved in patent cases. The number of decisions of the DPTO Board of Appeal appealed to the Maritime and Commercial Court varies from year to year, ranging from a few percentage points up to about 20% of the decisions. In about 10% to 15% of the cases appealed further, the decisions were reversed. Preliminary injunctions A preliminary injunction is a provisional court decision whereby a patentee may obtain, through a faster procedure, an injunction which would otherwise be jeopardised by the long duration of a regular lawsuit accordingly, preliminary injunctions can be a powerful tool. At present, a preliminary injunction in Denmark is requested at district court level and heard by only one legally appointed judge. Several disadvantageous situations have arisen from this arrangement. First, due to the low number of cases per district court, district court judges often hear only one or two (at most) patent cases during their career. This has biased the system towards supporting the patentees rights. District court judges are generally reluctant to find a patent invalid.
Denmark Hiberg A/S
This is because an issued patent has already been examined by patent experts, at either the DPTO or the EPO. Further, if a patent is assumed infringed by different parties domiciled or doing business in different jurisdictions (as is often the case in pharmaceutical infringement cases), several different district courts may be involved. Over recent years it has been shown that even if the subject of the cases is the same, various judges can still reach different decisions. This leads to increasing legal uncertainty, where the result of a preliminary injunction can largely depend on a particular district court. For many years there has been a consensus that preliminary injunction cases should be more predictable, for both patentees and accused infringers. Denmark seems to have come closer to a solution now that the Maritime and Commercial Court has been appointed as a specialised court for hearing preliminary injunction patent cases. Naturally, a subsequent regular lawsuit on the matter cannot be heard by the same court and will instead be heard at high court level. However, it
still seems advantageous that court cases relating to preliminary injunctions can now be heard by a court with patent experience. Future outlook At present, court-appointed experts are used in most patent cases except for cases with limited commercial potential. However, it is probable that the use of courtappointed experts will gradually decrease once the system of technical judges has raised the courts level of patent experience. The costs of patent cases may be reduced if no experts are appointed; further, quite often, the time involved in appointing experts and drafting expert reports may result in slower progress than desired by the parties. It may still be relevant to appoint experts (particularly non-patent technical experts in technically complex cases); however, it seems that the judges now have the necessary expertise to be able to evaluate most of the questions arising (including technical questions) in relation to inventions.
Susanne Hiberg European patent and trademark attorney shg@hoiberg.com Hiberg A/S Denmark
Susanne Hiberg founded Hiberg A/S in 1995, and is now chief executive officer and a member of Hibergs board of directors. Ms Hiberg is a qualified European patent attorney and trademark attorney. She has a background as a medical doctor. Since 1991 Ms Hiberg has advised on patent-related issues, in particular in the medical and biotechnology fields. She lectures in IP rights courses and is a tutor at CEIPI Denmark.
Louise Aagaard European patent attorney Hiberg A/S Denmark
Louise Aagaard is a partner at Hiberg A/S and a qualified European patent attorney. She graduated with an Msc in biochemistry from the University of Copenhagen and a PhD in genetics from the University of Vienna. Since 2001 Ms Aagaard has advised on patent-related issues, particularly in the area of life sciences. In addition, she lectures for IP rights courses and is chairman of EPCtutors, an organisation which organises the CEIPI basic course in Copenhagen.
Baker & McKenzie Jean-Franois Bretonnire and Thomas Defaux
France French copyright law: a complex coexistence of moral and patrimonial prerogatives
The French system of the droit dauteur (the right of the author) is generally perceived as being unique, and can be seen as a complex set of rules and principles that is directly opposed to the Anglo-Saxon copyright system. The particularity of the French system is mostly due to a single factor: the French concept of moral rights. While moral rights have been part of most copyright systems for some time, considerable discrepancies exist between the different systems in regard to both the scope of the rights that are protected and the legal regime that applies to such rights. Moral rights benefit from the strongest and broadest protection in France. This is evident not only when analysing the evolution of the French system of the droit dauteur, but also in the practice of this area of IP law, as highlighted by the case law on the issue in recent years. History of droit dauteur Many legal authors trace the origins of the droit dauteur and moral rights back to the French Revolution. Indeed, the idea of moral rights as an attempt to secure the bond between a work and the authors personality fits with the philosophy of individualism which prevailed during that period. An alternative view is that moral rights emerged in France during the 19th century. The perception of France as the home of moral rights finds support in the work of Andr Morillot (1849-1922), which established a more personal understanding of authors rights. While the French courts began acknowledging elements of moral rights from the start of the 19th century, Morillot sought to define clearly the nature of the prerogatives accruing to the author by virtue of his or her creation, distinguishing between proprietary rights and extra-proprietary rights. Morillot was the first to use the term droit moral, although he employed it in a much more technical sense than it is used today. Through his work Morillot helped France to become a pioneer regarding the perception of moral rights as a positive legal concept, which was recognised in judicial practice from the early 19th century. However, the work of Morillot, along with most of the doctrine of moral rights, was based on prior German legal theory. Indeed, Morillot relied mainly on the dualistic approach of German author Rudolf Klostermann, whereby moral rights exist alongside patrimonial rights. This dualistic theory prevailed in France in the early 20th century, while in Germany, the monist theory (whereby the personal and patrimonial rights are inseparable components of a single right) prevailed. In 1928 moral rights were expressly included in the Berne Convention for the Protection of Literary and Artistic Works. The newly introduced Article 6bis of the convention defined these rights as follows: Independently of the authors economic rights, and even after the transfer of the said rights, the author shall have the right to claim authorship of the work and to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, the said work, which would be prejudicial to his honor or reputation. It is clear from this definition that the convention favoured the dualistic approach of moral rights. By the end of the first half of the 20th century, the French droit moral was a solid set of rules emanating from, and regularly enforced by, the courts. The final consecration of the French construction of the droit moral arrived in 1957 with the insertion of moral rights into the Copyright Act 1957, codifying French case law. Features of moral rights regime Today French moral rights are codified in Articles L121-1
France Baker & McKenzie
to L121-9 of the IP Code, which recognises four main branches: the droit de paternit the right of attribution of a work, which is the right of an author to be identified as such (Article L121-1); the droit au respect de lintgrit de luvre the right of integrity, which is the right to prevent the work from being modified or destroyed (Article L121-1); the droit de divulgation the right of disclosure, which is the right of the author to decide when and how his work will be revealed to the public (Article L121-2); and the droit de repentir ou de retrait the right of withdrawal, which enables the author to take back works which have previously been disclosed to the public (Article L121-4). These moral rights are extensive not only in their scope, but also in their legal regime, which plays a major part in the concept of moral rights. This specific regime is closely linked to the perception of a work as an expression of the authors personality, and demonstrates the French choice of the dualistic theory. Indeed, very early on the French courts considered that moral rights should have the same traits as personality rights: inalienable and imprescriptible (Court of Cassation, March 31 1858, regarding the memoirs of Saint-Simon). These traits were expressly codified at Article L121-1 of the IP Code by the Copyright Act 1957. However, French moral prerogatives include one additional trait which results in a fundamental difference from the concept of moral rights in most other countries, particularly common law countries and Germany. Article L121-1 of the IP Code not only expressly provides for the possibility to transfer moral rights on the death of the author, but also provides for the perpetuity of moral rights under French law. This perpetual character, combined with the possibility of transferring a moral right due to death, offers a useful tool to maintain strong control over the use of a work beyond the scope of patrimonial rights and to protect cultural heritage. One of the strongest examples of this perpetuity was provided by the French courts in a case regarding the works of writer Victor Hugo (Paris Court of First Instance, September 12 2001) in which the judges considered that the moral rights over his works had been transferred to his heirs up until the present day. Another key feature of the moral rights regime is that the French courts consider it to be a matter of public policy, meaning that nobody, not even the author, should have the power to decide on the existence and
ownership of these rights. Therefore, not only can the prerogatives of moral rights not be transferred or assigned, but they also cannot be waived, unlike the position under the UK Copyright Act. Therefore, a refusal by the author to benefit from the moral rights attached to his or her works is said to be purely precarious under French law. Furthermore, in a well-known case regarding the film Asphalt Jungle by John Huston, the Court of Cassation decided not only that moral rights are a matter of public policy, but also that the provisions of the IP Code governing moral rights are of mandatory application as regards international private law (First Chamber, May 28 1991, Huston). This means that French judges must apply the provisions of the IP Code regarding moral rights, regardless of the traditional conflict of law rules. Although the French system rejected the German monist system, which includes moral prerogatives within a single right, moral rights have continued to be an essential part of the French copyright system. The importance of moral rights and the independent existence of such prerogatives in France become clear in relation to penalties for the infringement of authors rights. Indeed, the infringement of one of the branches of moral rights discussed above opens up the possibility of using the remedies applicable to an infringement of patrimonial rights. Particularities of moral rights regime However, not all of the various prerogatives included in French moral rights benefit from the same treatment and the same regime. The droit de divulgation has some major particularities which distinguish it from the other three prerogatives. According to the droit de divulgation, which was first recognised by the Court of Cassation in the Whistler case (Civil Division, March 14 1900), the author should be the sole decision maker in regard to making the work available. This prerogative has been the subject of several important decisions by the court in recent years, thereby demonstrating the continuing complexity and relevance of this right. The droit de divulgation, which consists of the discretionary and absolute right of the author to determine the disclosure of the work to the public, is considered to be the foundation of the droit moral. The importance of the droit de divulgation is reflected in the devolution of the moral rights prerogatives. Since 1989 the Court of Cassation, applying a dissociative approach to Articles L121-1 and L121-2 of the IP Code, has considered that the specific order of devolution of Article L121-2 applies only to the droit de divulgation and
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not to the other prerogatives, which are governed by the common inheritance law (First Civil Division, January 11 1989, Utrillo). As a consequence, the droit de divulgation, unless specifically attributed by the author to one person, follows its own path and may therefore end up in different hands from the other moral prerogatives. Although the French system is based on the dualistic approach to moral rights and patrimonial rights, the exercise of the moral rights prerogatives regularly interferes with the exercise of the exclusive economic right. This interference is particularly strong as regards the exercise of the droit de divulgation, since this right determines the moment when patrimonial rights are created. Indeed, before disclosure, the work exists only as part of the authors personality; upon disclosure, the work becomes a patrimonial asset, based on which such rights may be exercised. As a direct consequence of this, the droit de divulgation also interferes with the statutory exceptions to patrimonial rights. Indeed, all the exceptions provided for in Article L122-5 of the IP Code are applicable only once the work has been disclosed. Furthermore, the Court of Cassation recently reaffirmed that the authors droit de divulgation is the right not only to make the work available, but also to decide the means and conditions of disclosure, including the choice of publisher and the economic conditions of publication (First Civil Division, March 25 2010 regarding the rights over the works of philosopher Emmanuel Levinas). In that case the son of the deceased author, who had been designated by his father to exercise the droit de divulgation over his works, was the only person who could determine the financial Jean-Franois Bretonniere Partner jf.bretonniere@bakernet.com Baker & McKenzie France
conditions of publication with the editor, even though the patrimonial rights over the works were shared between him and his sister. Conversely, and more surprisingly, the exercise of patrimonial rights also interferes with the exercise of the moral rights prerogatives. For example, in practice, the moral droit de paternit is rarely respected in regard to ghost writers. Although, under French law, in theory the author can demand at any time that his or her authorship be recognised, it is rare for the author to do so for economic reasons. Regarding the droit au respect de lintgrit de luvre, the Court of Cassation recently held that the owner of this right could not renounce it in advance and in general (First Civil Division, April 2 2009, Barbelivien). This suggests that in the case of limited scope renunciation of this right, the assignment of the right and the specific renunciation would prevail on the principle of inalienability of moral rights. Comment Although the French system is based on a dualistic approach that separates moral and patrimonial prerogatives, the crossovers between moral rights and economic rights seem to be unavoidable. However, these points of crossover are healthy in order to maintain a balance between the various interests at stake and to limit the differences between the French system and monist copyright and common law systems. The main uncertainty for the future is how the increasing intervention of the Court of Justice of the European Union in copyright issues will address the issue of moral rights and the specificities of the various systems and regimes.
JF Bretonniere heads the firms French IP practice group. His practice focuses on the protection and exploitation of IP assets, including soft and hard IP litigation in the French and European courts. He has experience in various industries, with an emphasis on business alliances concerning IP rights. Mr Bretonniere speaks French, English and Japanese, and has practised in both Asia and Europe. He was appointed counsellor for external trade by the French Ministry of Economy and Finance.
Thomas Defaux Associate thomas.defaux@bakernet.com Baker & McKenzie France
Thomas Defaux joined the Paris office of Baker & McKenzie in 2010 as an associate. He specialises in industrial property and IP law, including trademark and patent licensing, research and development agreements and patent and copyright litigation. Mr Defaux graduated from the University of Paris II Panthon-Assas (postgraduate degree in intellectual property) and the University of Oxford (Diploma in Legal Studies).
Gottfried Schll and Nazim Sylemezoglu COHAUSZ & FLORACK
Germany For your billing consideration: the Rechtsanwaltsvergtungsgesetz

This chapter is a testimonial to the alternative fee arrangement adopted by German law decades ago and gives us the chance to promote the quality of (some) government regulations. In most jurisdictions, lawyers fees are calculated using billing by the hour. However, this is not the only method, nor necessarily the best. Particularly in regard to litigation, alternative fee arrangements are becoming increasingly popular. Mixed results: use around the world According to the 2011 Litigation Trends Survey, from 2009 to 2011 the percentage of US companies which relied on alternative fee arrangements in calculating the fees of their legal counsel in litigation rose from less than 50% to more than 60%. In the United Kingdom, this trend was even more pronounced, with two-thirds of surveyed companies now relying on alternative fee arrangements. In addition, it appears that alternative fee arrangements are particularly in demand among smaller companies, presumably because they allow the client to control costs more closely. Under the definition used in the survey, any arrangement that differs from hourly billing, whether at a regular or a discounted rate, is seen as an alternative fee arrangement. While the growing popularity of alternative fee arrangements is clear, what is less discernible is a consensus among clients as to the most effective type of alternative fee arrangement. In this regard, the survey results are decidedly mixed. In the United States, fixed fee and conditional fee arrangements have a joint lead, although both methods poll at less than 30%. Compare this to the United Kingdom, where a blended rate fee is slightly more popular than a conditional fee, and both methods have approval ratings of more than 75%. The perfect fee arrangement? It appears that if there is an optimal alternative fee arrangement for litigation, clients have been unable to agree on it. A workable fee arrangement must integrate the interests of both clients and their lawyers and, while there may be a greater or lesser overlap in their interests such as seeing their side win there is also an inherent conflict between the clients wish to spend less and the lawyers desire to earn more. But what if a specific alternative fee arrangement were prescribed by law, thereby making any deliberations regarding further fee arrangements moot? Of course, lawyers and clients are used to having the freedom to identify the best choice after careful deliberation, and nobody likes being dictated to. Yet sometimes a prescribed, imposed solution may be better than the solution which the parties could have reached through negotiation. If that solution had been used for decades and had never been found wanting, perhaps it would solve the problem for good. Enter the Rechtsanwaltsvergtungsgesetz (RVG), the Lawyers Compensation Act. The act presents a comprehensive rulebook for calculating lawyers fees for all kinds of situations, not solely restricted to litigation. It also prohibits lawyers from charging less than the calculated amount. In practice, the minimum fee prescribed by the RVG often becomes the actual fee. To understand the working and implications of the RVG, it is important to look not only at the RVG itself, but also at the Code of Civil Procedure, which codifies reimbursement in litigation, and the Court Fees Act, which quantifies court fees. The interplay of these laws results in three principles which together not only stipulate a particular fee arrangement between the lawyer and the client, but also more generally provide a comprehensive determination of both the total costs of litigation and the extent to which they must be borne by the parties involved.
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The three principles are as follows: The legal representatives of a party in litigation are entitled to (minimum) compensation according to the value of litigation. The court fees are calculated based on the value of litigation. To the extent that a side has lost in litigation, that side must bear the combined court and lawyers fees.
The value of litigation is the value under dispute. In cases where a party sues for a certain amount of money, the amount sued for is the value of litigation. In cases where no money is sought, or where the plaintiff seeks something in addition to money, the financial value of further objectives (eg, a claim for an injunction) is used as, or is added to, the value of litigation. For the typical value of litigation in IP cases (ie, more than 1 million), the RVG provides that the lawyers fee amounts to about 1% of the value of litigation. In patent litigation cases, both the plaintiff and the defendant will in addition to having an attorney at law each appoint a patent attorney as a further representative. Since the RVG also applies to patent attorneys, their separate fee (which is also a minimum fee) is set at the same amount. Finally, the Court Fees Act stipulates that the court fees amount to approximately 1.5% of the value of litigation. As to who picks up the tab, the Code of Civil Procedure states that the total costs of litigation (ie, the court costs and the legal representation costs according to the RVG) must be paid by the losing party to the degree that it loses. In other words, if the plaintiff succeeds on all counts, the defendant must pay its own costs, the plaintiffs costs and the court fees. If the plaintiffs suit is rejected on all counts, the same costs must be borne by the plaintiff. Any other proportional allocation is possible if the plaintiffs suit achieves mixed results. Thus, even though the individual provisions and calculation tables of the various acts may be rather complicated, their combined effect is surprisingly straightforward. In summary, in a patent litigation suit in which both parties are represented by an attorney at law and a patent attorney, total costs of about 5.5% of the value of the litigation must be borne by each side to the extent that it loses. That is about as pithy as compensation rules get. There are some additional rules that are worth knowing. For the appeal procedure, the same principle applies, with slightly higher adjustment factors for legal representation fees and court costs (nearly 7% in total). Since Germany implements the principle of separation, according to which patent infringement and patent validity are handled by different courts, there are also
separate proceedings with regard to compensation and cost allocation. As an infringement suit almost inevitably triggers a parallel revocation suit in which the roles of plaintiff and defendant are reversed this must also be considered for the fee calculation. The value of litigation in revocation proceedings is usually set at 1.5 times the value of litigation in the infringement proceedings. Revocation proceedings are heard by a special federal court and the share of the revocation court fees is higher than for the infringement proceedings. The total costs at stake for the revocation suit add up to 9.5% of the value of litigation in the infringement suit. Thus, the total costs to be distributed between the parties add up to 15%. To complete the picture, the attorneys settlement fees must also be mentioned. If a case is settled, according to the RVG, each attorney is entitled to an additional settlement fee of about 1% of the value of litigation. If a settlement is reached before the verdict, the court fees are reduced by approximately 2% of the value of litigation. Impact of the RVG on IP proceedings Now that the numerical results of the prescribed rules have been considered, the next issue to look at is the implications of these results. In other words, does this alternative fee arrangement encourage certain behaviour while discouraging other behaviour, and is this encouragement targeted correctly? At a superficial level, the most obvious merit of the RVG from a lawyers perspective is the binding regulation of minimum compensation, thereby limiting price competition. However, the act has many more important aspects, particularly as it relates to IP litigation. When applied in the IP field, the RVG is based on the idea of a party being represented by an attorney at law and a patent attorney in its scheme of fees. The two are comparable to a barrister and solicitor team, with transposed roles in infringement and revocation proceedings. Of course, either party is free to reach a fee agreement above the minimum fees based, for example, on billing by the hour once the minimum fees are exceeded. In the case of larger teams of lawyers (eg, as seen in proceedings in the United States and the United Kingdom), this can easily happen. However, the losing side must bear only the minimum legal representation costs set by the RVG. Any billing beyond this amount is at that partys own expense. This clearly encourages small legal teams in patent litigation, regularly consisting of only one attorney at law and one patent attorney. In practice, that is nearly always sufficient. Such a team has one dedicated expert for procedural and general legal matters and another for the
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technology at hand. Of course, both patent litigation attorneys at law and patent attorneys are experts in patent law. The complexity of a case does not necessarily result in enlarging such a team, as demonstrated by the observation that the most respected German IP attorneys at law and patent attorneys regularly work on several cases at once, much like their colleagues in other countries. It further helps that German IP proceedings do not also involve discovery, extensive case management or legal side issues (eg, antitrust, company responsibility or licensing), as may happen in some other jurisdictions. With regard to the minimum fee specified by the RVG, which in practice becomes a fixed fee, the effect is that a speedy resolution is in the best interests of all parties, and particularly in the best interests of the legal representatives involved. Another effect of the RVG is that it discourages the piling up of arguments without regard to their relevance. Everybody involved in either patent litigation or litigation in general is aware of a certain kind of argument. Although they are not central to the issue, they provide talking points which can be combined, at best amounting to a barrage of legal pinpricks. However, like pinpricks, they are rarely decisive. When billing is done by the hour and large legal teams must be kept occupied, arguing at length about insignificant points may be rather tempting; But this fails to serve the best interests of the client. While the number of arguments made in the represented partys favour may increase through this strategy, the quality of those arguments does not. Nor does this improve the partys standing with the court. The writs in patent litigation are always long and complex, even when kept as short as
possible; making them longer than they need to be does not help judges to do their job. Under a negotiated alternative fee arrangement, a client may be reluctant to pay his or her lawyer a high fee if there is a realistic chance that the case may involve relatively little work. On the other hand, a lawyer operating under a negotiated fixed fee must also consider that the opponents lawyer may be operating on an hourly rate. In such cases, the incoming writs are likely to be much heftier and to require lengthier responses. When the fee is fixed and its circumvention is penalised by the law for both parties, they can rest assured that they need not match an opposing lawyer who is charging his or her client based on the weight of the documents that he or she produces. Furthermore, the provision of the settlement fee, as mentioned above, promotes the assimilative capacity of the system. It is obvious that the system encourages settlements: it is cost-neutral for clients, the bonus motivates counsel not to overstretch cases; and settling saves the court time and work. Everybody wins. Comment Although the provisions of the RVG are prescribed by law, rather than being chosen by the parties, in practice its approach has been shown to be very effective and in the best interest of all stakeholders. What better praise is there for an imposed solution than that it is better than any solution with which the same people could have devised on their own? It is hard to tell whether such a model will ever become popular abroad, but, in Germany, there is little reason to start looking for an alternative to the system already in place.
Gottfried Schll Patent attorney gschuell@cohausz-florack.de COHAUSZ & FLORACK Germany
Gottfried Schll is a prominent and highly renowned patent litigator. He has handled various high-profile cases for global clients, both as lead counsel and as part of an international legal counsel team. The Dusseldorf Appeals Court has appointed him as an independent court expert. Based on his degree in physics from RWTH Aachen University, Mr Schll handles cases related to various sophisticated technologies.
Nazim Sylemezoglu Associate nsoylemezoglu@cohausz-florack.de COHAUSZ & FLORACK Germany
Nazim Sylemezoglu is an associate with COHAUSZ & FLORACK. Holding degrees in mathematics and electrical engineering from Harvard and RWTH Aachen University, he became a patent attorney after working for several years in software development and embedded systems.
IPWORK LLC Eleni Lappa
Greece Can Trademark Law amendments give the economy a welcome boost?
Although it is currently in a period of prolonged financial turbulence and the future is uncertain, Greece has finally taken a step in the right direction through efforts to amend its Trademark Law. The existing Trademark Law was enacted in 1994 to amend the previous Trademark Act 1939, and is already quite outdated due to some major developments since that time. In May 2011 the government issued a green paper detailing the proposed amendments and calling for public comment on the changes. The main amendments proposed to the Trademark Law are as follows: The opposition timeframe has been reduced from four-and-a-half months to three months. In addition, the opponent is now responsible for formally notifying the applicant of the opposition previously, this was done by the Greek Trademark Office through the court bailiff. Email or fax notification of a recourse and an invitation to file an intervention is now allowed, and in regard to a Community trademark or a national IP right, the onus to notify is on the party filing the recourse. Notification by fax or email is expected to expedite proceedings, as this is now considered to be sufficient formal notice to the applicant (the 1994 law was silent on this issue; thus, electronic notification was inadmissible). Misleading geographical indications for wines and spirits, and all such indications included in the list set out in Article 13 of the EU Geographical Indications and Designations of Origin Regulation (510/2006/EC), are now prohibited from being registered. Although misleading geographical indications have been an issue in the past, the trademark legislation has never included provisions to deal explicitly with such indications. A Community trademark is now fully recognised as a sufficient prior right in relation to any conflicting subsequent national application, even if it was based on a national priority mark that has since expired (under the 1994 law, only registered Community trademarks were recognised as sufficient prior rights). Consent letters continue to be accepted and the allowance of such letters has been extended beyond the Trademark Committee to other administrative court instances (ie, the Administrative Court of First Instance and the Administrative Court of Appeals), unless there is an obvious risk of public confusion in allowing the co-existence of the relevant trademarks (the 1994 law included a more vague reference to public interest as grounds for the Trademark Committee to refuse to apply a consent letter). The transliteration into Greek or Latin of any nonGreek or non-Latin character mark is now required for the filing of a trademark Divisional trademark applications are now allowed unless they stem from a pending opposition. Revocation proceedings against decisions of the Trademark Committee have been introduced. Such proceedings may be filed within 30 days of a decision to accept or reject a trademark, provided that there are grounds on which to allege that the Trademark Committee failed to consider pertinent documents in the case. These revocation proceedings effectively pause the statute of limitations for a recourse until the Trademark Committee has revisited the issue and decided whether to revoke its earlier decision. The Trademark Committee now has 14 divisions (up from 10) in an effort to expedite the resolution of proceedings before it. The amendments also propose that all members of the Trademark Committee have university degrees (in law, finance or philosophy) in order to improve the quality of decisions this is a positive step, since no such educational requirement applied previously.
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The examiners objections to a trademark registration application will now be available 15 days before the examination hearing in an effort to allow the applicant to formulate its arguments in favour of its acceptance (previously, objections could be obtained only unofficially and were available just a few days before the examination hearing). Restitutionary proceedings (particularly in regard to having missed a renewal, cancellation, opposition, recourse or appeal deadline) are now allowed if force majeure or unforeseeable circumstances can be claimed and the interested party files for restitutionary proceedings within two months of the date when the force majeure or unforeseeable circumstances ceased, up to a maximum of one calendar year from the missed deadline (exclusive of renewal deadlines). The restitutionary proceedings are expedited in nature as there is no appeal option this provision is particularly useful at present due to the number of strikes and other public sector delays which may also affect trademarks. The trademark owner is now entitled to prohibit the transit of infringing goods through Greece when such goods bear an imitation of that trademark, even though their final market destination is not Greece. It can also prohibit the affixing of a trademark on genuine goods which the trademark owner intended to circulate on the market without bearing such a trademark. In practice, both of these provisions were already applicable in Greece under EU law, but their explicit inclusion in the Greek legislation is a positive development. Parallel exports and grey market goods (traditionally a difficult issue in Greece) are now better defined and clarified. The principle of the exhaustion of rights applies that is, the trademark owner cannot object to goods that already exist in the European Economic Area unless such goods have been distorted and their quality changes after they have been placed on the market. If a trademark owner withdraws its mark, its right in that mark expires and the mark is deleted from the Trademark Register automatically. This helps to expedite proceedings, as in the past the deletion of a withdrawn trademark from the Trademark Register required special proceedings. A party can now rely on an assignment in order to qualify as a party with legitimate interest and to file an intervention in pending proceedings. Previously, the earlier owner was the only party recognised as having a legitimate interest and this also delayed business transactions.
Certain aspects of licensees rights have been fortified namely, provided that the licence is duly recorded in the Trademark Register, an exclusive licensee is now explicitly permitted to initiate legal proceedings against the infringement of a licensed mark if the licensor or trademark owner has been advised of such infringement and has failed to act. This issue was not dealt with by the earlier law and historically has led to conflicting decisions by the Greek courts, which often found in favour of the licensors exclusive right to initiate litigation. In the past this has been damaging to licensees, but they are now in a stronger position and also have a new express right to sub-license their rights. These improvements are expected to accelerate and support IP rights-related transactions and may help to boost the economy. The law now includes much more detail in regard to infringements. It explicitly discusses the removal and destruction of infringing goods, damages based on royalties, moral damage and damage to goodwill, and adverse financial circumstances, and sets penalties of a fine of 3,000 to 10,000 per infringement and/or imprisonment of up to one year. All these measures are expected to raise the trademark infringement bar in Greece and increase a rights holders chance of compensation in the event of infringement. The amendments incorporate the EU IP Rights Enforcement Directive (2004/48/EC) and go beyond the requirements of the directive in some cases. For example, in probative issues such as pre-hearing evidence, the judge may require the alleged infringer to provide information such as the name and contact details of the manufacturer of the allegedly infringing goods, the recipients and distributors thereof and information on the quantities available. The court may take action against any parties found to be implicated, including demanding the disclosure of bank account information if it is deemed to be relevant to the infringement. In general, the court can now take any actions necessary to avoid the destruction or fabrication of evidence by an alleged infringer. Ex parte proceedings are now allowed for petitions for injunctive relief and stricter penalties have been introduced against infringers. Such penalties include the freezing of bank accounts and the offering of confidential information. Another new measure, the conservative seizure or inventory of evidence, has also been introduced the main action must be filed within 30 days of the date of seizure. Cancellation actions are now allowed, even against
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national trademarks that provide national seniority on a Community trademark application. Moreover, if there is a decision to cancel a trademark irrevocably, the Trademark Registry must immediately delete the mark from the register without further proceedings. The amendments discuss and clarify national IP rights procedures in depth, and the ability to notify a rights holder by email or fax is further underlined as being sufficient for the notification of national trademark proceedings (eg, oppositions, cancellations). Official fees for filings, renewals and recordals have been reduced significantly (in some cases by between 20% and 50%), and the use of the Nice Classification is encouraged as the specification of goods or services previously used for applicants that were unfamiliar with trademark filing procedures was archaic.
The amendments are expected to improve the Greek market as, after two years of economic crisis, it is clear that trademarks reflect the market in general and must be protected and supported in order to stimulate market growth. After all, the market blossoms thanks to the consumption of branded goods and services. Although, at the time of writing, the finalised law has not yet been published, the main amendments are expected to remain unchanged. It is hoped that the new trademark law will take Greek trademark protection to a whole new level, which in turn, will help to bring muchneeded financial growth and development. Greece may not yet be out of the woods when it comes to its economy, but the measures discussed in this chapter are definitely a step in the right direction. It remains to be seen whether the new law will be passed intact and whether the courts will embrace its progressive provisions.
Eleni Lappa IP and ADR specialist and founder info@ipwork.gr IPWORK LLC Greece
Eleni Lappa holds an LLB (hons) from Kingston University, United Kingdom, and was selected for and completed two legal internships in the United States. Due to her extensive experience overseas, she has acquired and applies a combined knowledge of the UK, US and Greek legal systems and principles. Ms Lappa has been a member of the International Trademark Association for several years and has been elected as an Institute of Trademark Attorneys overseas member. She is also a member of the European Communities Trademark Association, and the Pharamaceutical Trademarks Group and attends all relevant conferences regularly. She has been involved for many years in various prestigious international IP publications and for the past decade has handled the full spectrum of IP rights issues in Greece for a large number of multinational entities.
Michael Factor JMB, Factor & Co
Israel Qualitatively good, quantitatively poor

In recent years the Israeli patent system has undergone some changes to improve access and protection for patent holders. In addition, the courts have issued some key rulings in IP cases. Changes at the IPO The Israel Patent Office (IPO) database is now online and is accessible from both the IPO website and via the World Intellectual Property Organisations Patentscope. During 2010 the IPOs Patent Department received International Organisation for Standardisation (ISO) certification, and it appointed an ombudsman to deal with complaints. Further, in September 2010 Israel implemented the Madrid Protocol on trademarks. The IPO has been invited to join the Patent Prosecution Superhighway. It has also implemented the following changes in order to make Israel patent examinations more efficient: In addition to filing copies of prior art cited either abroad or in an international search report as being novel or destroying an inventive step (X or Y citations), the inventor must also submit details of all prior art known to the inventor, whether cited abroad or otherwise believed to be relevant to the claimed invention. An inventor must pay a surcharge of NIS500 for each claim after the first 50; failure to pay will delay examination. No more than two independent claims in each category (ie, methods of manufacture, claims for a device or system, claims for a tool for manufacturing and Swiss-type use claims) are allowable. The number of monthly extensions available when prosecuting a patent application has been limited to six per office action and to 15 in total. However, it is still possible to suspend examination for longer periods prior to commencement of examination. Incorporation by reference in patent specifications is no longer acceptable. It is no longer possible to file a divisional (grandchild) application based on a divisional (child) application once the parent application on which the child divisional is based has issued. After serving for eight years, Israel Commissioner of Patents Dr Meir Noam completed his term of office at the end of December 2010. Asa Kling was appointed as the new commissioner of patents in March 2011. Although most of Noams term as commissioner was successful, one of his reforms was harshly criticised by MK David Rotem, chairman of the Knesset Constitution, Law and Justice Committee. Rotem claimed that the IPO had failed to print the basic details of new patent filings in the official paper journal, even though it continued to collect the publication fee from all applicants for four years, amounting to an estimated NIS3 million (more than $820,000). The Israeli government found a creative solution to the problem by retroactively amending the law in January 2011 to allow online publication as of January 2007. During Noams tenure the IPO made significant advances with regard to the services that it provides to both domestic and international applicants. However, the global recession has hit Israel, and in 2010 the number of patent, trademark and design filings all decreased. In total, 1,622 design applications were filed in 2010, which is lower than the annual totals of 2005 to 2009. In 2010 a total of 8,017 trademark applications were filed, lower than 2005 to 2009 and nearly 2,500 fewer than in 2008. The Madrid Protocol came into force in Israel in September 2010. In the last quarter of 2010, 463 filings were made in Israel through the protocol, with 37 international applications originating in Israel being filed. However, looking at data from the first half of 2011, a greater number of marks are being filed in more classes as a result of Israels accession to the Madrid Protocol; the number of marks filed increased by 22% from 7,845
JMB, Factor & Co Michael Factor
First filers in Israel can obtain a search report quickly and use it as a basis for deciding whether to file in other jurisdictions
to 10,029 from September 1 2010 to June 30 2011, compared to the same period one year earlier. This represents increased protection for applicants and greater filing fees for the government. However, with multi-class filings now allowed, the number of separate applications filed has dropped from 7,845 to 6,054 (23%). Furthermore, in this period 30% of applications were filed directly under the Madrid Protocol, rising to 50% in recent months; as a result, there has been a sharp drop in filings via local patent attorneys. In total, 7,266 patent applications were filed in Israel in 2010, up from 6,780 in 2009, but still below the levels in 2006 to 2008, which peaked at 8,064 in 2007. Most of these applications were Paris Convention or Patent Cooperation Treaty filings or divisional applications that claimed priority from earlier applications. The number of new applications first filed in Israel was 1,044, the lowest number for a decade. Therefore, it seems that Israeli applicants are increasingly filing regular or provisional applications in the United States first. Some 41% of patent filings into Israel are computer or electronics related, with 31% being chemical (mostly pharmaceuticals), 17% biotech and 11% mechanical or telecommunications related. The IPO receives a disproportionate number of high-tech and pharmaceutical patent filings compared to those in traditional industries. This reflects the fields in which Israeli industries are perceived by competitors as being a threat. At the end of 2009 Noam initiated a fast track for green patent applications. During 2010 there were 22 allegedly green patent applications; of these, 16 were accepted for the fast track. During 2010 Israeli activity in regard to patents, designs and trademarks, from both local entities and foreign applicants, was down. However, it appears that Israel has weathered the recession better than many other economies and patent, design and trademark filings have decreased everywhere, with the exception of China. Israeli Customs had a record year, with 745 seizures,
excluding cigarettes an increase from 426 seizures in 2009 and higher than any previous year. It has always been possible to jump the queue in Israel by requesting accelerated examination and submitting an affidavit testifying to due cause. Typical reasons for requesting accelerated examination include that an applicants competitors are already using the technology. In a notice published on November 28 2010, the IPO announced that from January 1 2011, the applicants for patents first filed in Israel can request accelerated examination based on an intention to file abroad under the Paris Convention. A search report will issue within three months. This means that first filers in Israel can obtain a search report quickly and use it as a basis for deciding whether to file in other jurisdictions. Depending on the results of the search report, applicants can make amendments to the specification and/or claims before filing abroad. Finally, since Israel is to become an international search authority, filers of a Patent Cooperation Treaty application claiming priority from the Israel application can request that the international search report and written opinion take the Israeli search findings into account. Israeli examiners have access to the same search engines as their counterparts at the European Patent Office. They also tend to be able to work in languages other than Hebrew and English, particularly other European languages, so the quality of the search is likely to be high. First filing in Israel makes strategic sense for several reasons: The cost of filing in Israel is low; The application may be filed in English; and At present, there is no automatic publication. Due to these advantages, first filing in Israel should be considered by non-Israeli applicants. Litigation In recent years the Israeli courts have issued a number of notable IP-related rulings.
Israel JMB, Factor & Co
Adidas sued an importer of sneakers with four parallel stripes on the grounds that the shoes infringed its three-stripe mark. The court ruled that there was no likelihood of confusion and rejected the case. Israeli Customs seizes goods that appear to infringe trademarks and design rights and, depending on the actions of the rights holder and the importer, may destroy the goods. If the importer defaults, the storage and destruction costs must be paid by the rights holder. In a case involving fake Levis jeans, a district court judge harshly criticised this practice and ruled that charging the costs to the rights holder was illegal. However, the Supreme Court has now heard a case concerning fake Dior perfumes, and has confirmed that Customs has the right to collect the costs of storing and destroying goods from the rights holder should the importer default. Merck tried unsuccessfully to obtain an injunction against generic pharmaceutical manufacturer Unipharm to prevent it from launching an at-risk generic equivalent of Focalin, a drug used to treat osteoporosis. Unipharm opposed the patent application and Merck argued that it was wrong to prevent a patent issuing while benefiting from manufacturing the patented matter. The court ruled that until a patent issues, there are no grounds on which to issue an injunction, and that if Merck succeeded in the opposition proceedings, it could retroactively file for damages from the date on which the allowed patent application published. Smith Kline Beecham (SKB), now GlaxoSmithKline, fared rather better when it sought an injunction against Israeli drug manufacturers Unipharm and Trima to stop them from manufacturing generic versions of rosiglitazone maleate (Avandia), a patented drug used for the treatment of Type II diabetes. Unipharm and Trimas defence was that the patent in question (IL106904), which claimed priority from an earlier UK application (UK9218830/9), was invalid since it lacked novelty and inventive step in light of an earlier European patent (EP0306228) filed by SKB. The European patent published before the priority date of the infringed patent. The first instance court found that Rosi, the generic product produced by Unipharm and Trima, infringed the Israeli patent. The lack of sales rendered the issue of unfair trade and compensation moot. The decision was appealed to the Supreme Court. On appeal, Unipharm and Trima claimed that the first instance court was wrong to determine that since there was novelty and inventive step, the issue of whether the patent in question was a selection patent did not need addressing. They argued that although a preferred salt had been isolated, it could not be used
fairly to extend the term of protection beyond the expiry date of the earlier patent. They also argued a lack of enablement. Finally, they pointed out that although rosiglitazone maleate was alleged to be superior to other salts, no evidence to support this assertion had been provided. The Supreme Court reminded the parties that it does not review factual determinations of the first instance courts, but only matters of law. It went on to rule that even were the wide Claim 1 to be invalidated, dependent Claim 4 for the specific rosiglitazone maleate could survive on its own merits if it was shown to be novel and inventive, as it was widely supported by the specification. However, it defended the principle of at risk manufacture, pointing out that Section 182 of the Patent Law allows invalidity as a defence for patent infringement. The first instance court was impressed by the patentees witnesses and by the fact that the defendants witness admitted that rosiglitazone maleate was novel. It considered indicative of the selected sale not being obvious that the patentee: could show trial and error in the research programme; considered other salts such as hydrochloride more likely to be appropriate; and almost gave up the project for lack of progress. The Supreme Court saw no reason to overturn this ruling. Pointing out that the Patent Law requires enabling disclosure for novelty, it stated that rosiglitazone maleate was nowhere mentioned in the earlier patent. By virtue of the earlier patent teaching basic salts and the present invention being an acidic salt, in view of improved efficacy, higher solubility and stability, rosiglitazone maleate was considered novel and inventive. The court pointed out that the ease of copying the patented salt by competitors after reading the disclosure in the patent was evidence that the description was enabling. Risedronate is used to treat Pagets disease, which results in abnormal bone formations, and osteoporosis, which reduces the density and strength of bones. By slowing down the rate at which bone is dissolved, risedronate increases the amount of bone. The Food and Drug Administration approved risedronate for treatment of Pagets disease in 1998 and for the prevention and treatment of osteoporosis in 1999. The drug is marketed as Actonel. Procter & Gamble filed International Patent Application WO/2001/056983 for selective crystallization of three-pyridyl-1-hydroxyethylidene-1,1-
JMB, Factor & Co Israel
bisphosphonic acid sodium as the hemipentahydrate or monohydrate. This patent has issued in Korea, Europe and the United States. After allowance in Israel, it published for opposition purposes and Unipharm filed an opposition. The claims in Israel were those allowed in the United States. The main claim is as follows: 1. A process for selectively producing 3-pyridyl-1hydroxyethlidene-1,1-bisphosphonic acid sodium hemipentahydrate and monohydrate comprising the steps of: a) providing an aqueous solution of 3-pyridyl-1hydroxyethlidene-1,1-bisphosphonic acid sodium; b) heating the aqueous solution to a temperature from about 45 C. to about 75 C.; c) adding a solvent to the aqueous solution; and d) optionally cooling the aqueous solution. The opposer claimed that the applicant knew that the hydrated salt was a mixture of the hemipentahydrate and the monohydrate, and that the method of crystallisation was the standard method of dissolution and lacking in inventive step. The applicant claimed to have been unaware of the monohydrate, although it is apparently
always precipitated with the hemipentahydrate. Deputy Commissioner Noach Shalev Shlomovits, who heard the opposition, was apparently impressed by the fact that the applicant produced no crystallographic evidence in the application or during the opposition proceedings, but simply deduced the two salts from the weight of the crystals, by estimating the water of crystallisation. Without any other evidence, it is clear that both crystal forms must have been known, and it appears that the general observation of controlling the rate of cooling and concentrations did not involve an inventive step. Shlomovits ruled not only that was there a lack of inventive step, but also that the application was not properly enabled. Furthermore, he stated that the claimed invention was not fairly based on the specification. Additionally, in order to punish the applicant for its greediness in claiming more than it was entitled to, the deputy commissioner ruled that the application should be rejected. Finally, he stated that the main claim included the pure hemipentahydrate which the applicant accepted was previously disclosed in its earlier patent.
Michael Factor Partner mfactor@israel-patents.co.il JMB, Factor & Co Israel
Born in the United Kingdom, Michael Factor relocated to Israel in 1994. He is a licensed Israel patent attorney with numerous professional affiliations, including the International Trademark Association, the Licensing Executives Society and the International Association for the Protection of Intellectual Property. Dr Factor has a PhD in applied physics from the Hebrew University of Jerusalem, an MEng in materials science and engineering from Imperial College, London and an LLB from the Ono Academic College, Israel. Dr Factor has broad experience in drafting patent applications and representing clients before local and international patent offices. He writes an IP blog, the IP Factor (http://blog.ipfactor.co.il/), which is devoted to reporting IPO and court decisions related to patents, trademarks, copyrights and designs in English. With several thousand hits a month, the IP Factor is the top Israeli IP resource.
Amund Brede Svendsen and Felix Reimers Advokatfirmaet Grette
Norway Norway to enforce tough measures for IP rights

Strengthening IP rights enforcement Background In April 2011 the Ministry of Justice issued a proposal to strengthen IP rights enforcement. One reason for the reform being proposed is increased public awareness of the need to combat dangerous counterfeit products (especially pharmaceutical ones). The proposal includes all IP rights laws, with the exception of copyright. Since Norway is not an EU member state, it is not obliged to implement the EU IP Rights Enforcement Directive (2004/ 48/EC). However, if the amendments proposed by the ministry are enacted, IP rights enforcement in Norway will become more similar (although not identical) to the solutions put forward by the EU directive. Calculating damages The proposals most fundamental amendment relates to the way in which damages are calculated for IP rights infringement. Under the ministrys proposal, if the infringer is negligent, the rights holder will be able to choose between: a reasonable licence fee; the patent owners financial loss (typically, lost profits); or the profits reaped by the infringer by the infringement. The final option is a novelty, although there have been some instances in recent case law where the courts have awarded damages on an account-of-profits basis. If there is gross negligence or wilfulness on the part of the infringer, the rights holder will also have the alternative option of claiming double licence fees. If enacted, this approach will be unique to Norway. The proposed changes will make Norwegian IP rights enforcement more efficient, especially in cases in which loss is difficult to substantiate. Crime without punishment Even though IP rights infringements have been punishable for a long time in Norway, the rules are not uniform across all IP rights and, generally, only wilful infringements are punishable. With the exception of infringements against trademarks and integrated circuit rights in certain aggravating circumstances, the maximum prison sentence is three months. It is thus unsurprising that only a few rights holders have taken the time to press charges against IP infringers. The ministry now proposes that all IP rights should have similar rules in this area, namely that: negligent infringements become punishable; the statutory maximum sentence be one year rather than three months; and the statutory maximum sentence be extended to three years in particularly aggravating circumstances. Procedural law Right to information New provisions modelled on the EU directive are proposed to ensure that rights holders have access to more information than before (eg, about the origin and distribution systems or networks of infringing or allegedly infringing products). The general procedural rules proposed will also apply to copyright infringement. However, the Ministry of Justice has made it clear that the rules on the right to information cannot be relied on to obtain information from internet service providers (ISPs) about the identity of subscribers that may have been involved in illegal file sharing and other online IP infringements. This remains the jurisdiction of the Ministry of Culture, which has prepared a study of measures to strengthen copyright enforcement. Exclusive jurisdiction Under existing Norwegian law, the Oslo District Court has exclusive jurisdiction in invalidity cases concerning patents, registered trademarks, designs and plant breeders rights. However, pure infringement cases (ie, cases where the defendant does not challenge the validity of the IP right as a defence) are heard by the ordinary district
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courts, and usually the court having jurisdiction is that where the defendant has its place of business. Thus, if infringement and invalidity cases about the same IP right are not consolidated and heard jointly before the Oslo District Court, such cases may be heard in different courts. As a result, the Ministry of Justice has proposed that the Oslo District Court should have exclusive jurisdiction in all cases concerning registerable IP rights. This will not affect preliminary injunction actions. The ministrys move is expected to reduce the risk of dilatory tactics. It will no longer be possible for a defendant to file an invalidity action in the final phase before an infringement trial, with the aim of slowing down court procedures and requiring the transfer of the infringement case to the Oslo District Court in order for it to be consolidated with the invalidity case. Also, this may potentially save time, as there will be no further need to transfer infringement cases to the Oslo District Court in order to consolidate them. Comment To date, reactions to the proposal have been positive. It is clear that Norwegian and foreign rights holders will benefit from IP rights enforcement in Norway becoming more similar to that in other European countries. The Ministry of Justice is now receiving comments, reports and proposals from interested parties and government agencies, but it is unknown when a bill will be put before Parliament. Since the proposal is not controversial in nature, the schedule will more than likely depend on the governments priorities. Recent IP case law In 2010 and 2011 the Norwegian courts decided numerous IP cases, but there has been an absence of watershed cases, particularly in regard to patents. Nevertheless, the cases below are notable, either because of their magnitude or because they demonstrate well how Norwegian courts interpret and apply IP law. Patents Kvassheim v SINTEF The Borgarting Court of Appeal has ruled twice on Kvassheim v SINTEF. Torbjrn Kvassheim sued the stateowned research foundation SINTEF, claiming damages for contributory infringement to his fish counter patent. He claimed that SINTEF was liable for delivering to his competitor software developed for fish counters that infringed his patent. In 2009 the appeal court ruled in favour of SINTEF, accepting its argument that research cannot infringe a
patent, and thus that delivering the results of research to a customer could not have infringed a patent either. In December 2009 the Supreme Court upheld an appeal by Kvassheim, quashing the earlier judgment and sending the case back to the appeal court for a full hearing (that landmark decision on the experimental exemption and contributory infringement was discussed in IP Value 2011). However, when the appeal court examined whether Kvassheims competitor had actually infringed the patent, it found that he had not. This ruling was surprising since in 2003, based on the same facts, another appeal court had awarded Kvassheim 750,000 in damages from the primary infringer. SINTEFs action to have the patent invalidated was unsuccessful. Mundipharma v Ratiopharm One of the biggest patent cases decided by a Norwegian court in 2010 was Mundipharma v Ratiopharm. The case concerned two patents for oxycodone formulations with controlled release for pain relief. In October 2008 Ratiopharm which intended to market and distribute medicaments with oxycodone together with the manufacturer Acino Pharma brought an action against Mundipharma, the owner of the patents, to have the patents invalidated for lack of inventive step and insufficiency, and for the claims scope having been expanded after the relevant date. Ratiopharm also brought an action to obtain a declaratory judgment that its as-yet undistributed oxycodone medicament did not infringe. Mundipharma brought a cross-action to obtain a restraining order. In 2009 the district court ruled against Mundipharma in both cases, and consequently: the patents were invalidated; the declaratory statement was returned as requested; no restraining order was granted; and Ratiopharm and Acino Pharma were awarded costs of 616,000. However, the Borgarting Court of Appeal reached opposing conclusions. It held that it was not obvious for the skilled person to consider that oxycodone was a better suited active ingredient for achieving the purpose of the formulation, and that the solution of the patent improved on the nearest prior art. The appeal court also found that the scope of the patents had not been expanded, and that the disclosure was sufficiently clear to enable a skilled person to work the invention. Thus, the patents were upheld as valid. On the issue of infringement, the appeal court found that the patents had been infringed. Referring to the fact that the construction of the patents had led to contrasting
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results, Ratiopharm defended itself by claiming that it had shown no negligence and had acted in good faith. The appeal court disagreed. It found that Ratiopharm had acted negligently and that it had taken a deliberate risk, gambling on its claim construction. Thus, it awarded Mundipharma 3.85 million in damages and 1.41 million in costs. Ratiopharms and Acino Pharmas further appeal to the Supreme Court was not granted a hearing before that court.. This judgment shows that even if a court construes the claims of a patent to mean that something is not infringing or that the patent is invalid, the party cannot escape liability for claiming that it acted in good faith and was not negligent if the court eventually decides the case by a different construction. Trademark law Kraft Foods v Juritzen Forlag In the Oslo District Courts October 19 2010 judgment, book publisher Juritzen Forlag AS was found to infringe Kraft Foods trademark rights. Juritzen Forlags Easter Crime book had on its cover the three-coloured stripes by which Kraft Foods well-known Kvikk Lunsj chocolate bar is identified. The Kvikk Lunsj chocolate bar is also known as the most popular Norwegian Easter chocolate, which underlined the unfair use of its colours on Easter Crimes cover. Juritzen Forlag was found to be in violation of Kraft Foods invoked trademarks and its use of Kvikk Lunsjs three-coloured stripes also constituted an act of unfair competition. Copyright law The BlackSheeps case On July 20 2011 the Indre Finnmark District Court pronounced its judgment in the The BlackSheeps, which involved an award-winning youth band. Two of the former BlackSheeps band members had filed a lawsuit regarding rights to the bands 10 songs and to the bands name. The court decided that: the remaining band members would have the rights to the band name; the individual band members share of the copyright in existing works should remain as reflected in the bands registration with the Norwegian performing rights society TONO, namely with: one member holding copyright in all of the bands songs; one member owning copyright in nine songs; one member holding copyright in six songs; and the last member being a co-owner of the copyright to just two songs.
In reaching its decision, the court determined as important: the age of the band members (16 and 17 years of age when the band dissolved); and the relatively short time that the band had played together (three years). According to the court, the position of the bands front figure was also of importance when considering the right to make use of the bands name. Come Dine with Me v 4-Star Dinner Do television programme formats or concepts enjoy protection under Norwegian law? If so, what is the nature of that protection and its scope? These questions have preoccupied the Norwegian media and entertainment industry, as well as IP lawyers, for some time now. In 2010 the Oslo District Court returned a judgment which, although it set no precedent, certainly gives an indication of how Norwegian courts may view such issues. In August 2009 ITV Studios, Scandinavian broadcaster Viasat and Swedish production and distribution company Silverback requested a preliminary injunction to have Norwegian broadcaster TVNorge AS discontinue all further marketing, production and broadcasting of its 4-Star Dinner television programme. They claimed that the programme infringed their copyright in the Come Dine with Me format. However, their request for an injunction was rejected. In January 2010 the plaintiffs appealed before the Oslo District Court. The court concluded that Come Dine with Me enjoyed no copyright protection, essentially because copyright protects form rather than content. The court also found that the broadcasting of 4-Star Dinner did not constitute an act of unfair competition. Supreme Court orders ISP to disclose customers identity Sandrew Metronome Norge AS and Filmkameratene AS filed a lawsuit against the Norwegian ISP Altibox AS in relation to a copyright infringement made by a third party who used Altiboxs services. The infringer had downloaded the Norwegian films Max Manus and The Kautokeino Rebellion without the copyright owners permission. As the copyright owners did not know the infringers identity, in an action to secure evidence they demanded that Altibox be ordered to disclose the identity of its customer who had held two IP addresses during two specific timeframes. The copyright owners prevailed in the district court and the appeal court. Altibox appealed before the Supreme Court, but the court upheld the earlier judgments. The Supreme Court
Advokatfirmaet Grette Norway
held that even though the information concerning Altiboxs customer was confidential under the Ecommerce Act, nonetheless it was not exempt from the rules of securing evidence. The Supreme Court found that the appeal court had thoroughly assessed the circumstances of the case, including the fact that the infringements in question could lead to both civil and criminal liability, which meant that the plaintiffs request was not disproportionate. Further, the Supreme Court found that ordering the ISP to disclose the requested information was not in violation of Article 8 of the European Convention on Human Rights. Thus, the Supreme Court found that Altibox should provide the copyright owners with information about the identity of its customer and the IP addresses used in the infringement. Unfair competition law Jurisdiction in Marin Alpin v Wrth International Norwegian company Marin Alpin AS sued Swiss company Wrth International AG in Norway for unfair competition
under Norwegian law, for having allegedly copied a sports jacket. The jackets in question had been distributed internally in the Wrth group in some European countries, but not in Norway. Wrth claimed that the case should be dismissed for lack of jurisdiction. Marin Alpin contended that under Article 5(3) of the Lugano Convention, Norwegian courts had jurisdiction as Norway was the place where the harmful event occurred its reasoning was that the loss of profits arose where Marin Alpin had its registered office. Wrth subsequently lost in the district court but won in the appeal court. The Supreme Court dismissed Marin Alpins further appeal on the merits. A majority of three justices found that the claimed loss of income was an indirect consequence of acts that occurred abroad. The fact that the loss was then felt by Marin Alpin in Norway was irrelevant. The court found that Marin Alpins interpretation of Article 5 (on jurisdiction and enforcement) would undermine the main rule in Article 2, which provides that the place of residence or business of the defendant has jurisdiction.
Amund Brede Svendsen Partner amsv@grette.no Advokatfirmaet Grette Norway
Amund Brede Svendsen is a partner at Grette. After obtaining a MSc in business, he studied law, graduating in 1981. He joined the predecessor firm of Grette (Smith Grette Eide Midelfart & Vik) as an associate in 1981, and became a partner in 1986. He is admitted to the Supreme Court of Norway. His practice includes IP law, particularly patents and trademarks, and both transactions and litigation. He also advises clients on competition law issues and assists in corporate transactions, especially those involving intellectual property or information technology. He is chairman of the board of the Norwegian Association for Industrial Property Rights and president of the Norwegian national group of the International Association for the Protection of Intellectual Property. Mr Svendsen regularly writes articles and speaks on subjects of patent law, IP enforcement and international dispute resolution.
Felix Reimers Partner felix.reimers@grette.no Advokatfirmaet Grette Norway
Felix Reimers is a partner at Grette. He graduated in 1997. After four years as an associate with two patent agent firms, he joined Grette as a senior associate in 2001, and was promoted to partner in 2005. He currently heads Grettes IP law department. His work includes contentious and non-contentious IP, unfair competition and competition law. Mr Reimers is an external lecturer (marketing law, EU/EEA law and competition law) and has lectured at the Norwegian National Academy of the Arts and at the Norwegian Patent Office. He is the co-author of Immaterialrett (IP Law) (Per Helset editor, Oslo, 2009).
Alicja Rogoziska, Pawe Wac and Wojciech Trybowski Polservice Patent and Trademark Attorneys Office
Poland Professional representatives in IP cases

Polish law provides that, in principle, a party may perform a legal action either personally or through a professional representative. In specific cases, a person may be represented by a family member, a company employee or another person who professionally represents other persons and companies before courts and public offices a so-called professional representative, such as an attorney at law, a legal adviser or a patent attorney The specific nature or complexity of a case or a particular procedural question may require the services of a professional representative. One area where it is both recommended and necessary to involve a professional representative is IP law, which entails a number of acts within the administrative, civil and criminal systems. Some of these acts may be performed only by specialised professional representatives. According to Polish law, parties in IP rights cases may be represented by patent attorneys, legal advisers or attorneys at law before the Polish Patent Office (PPO), the administrative, civil or criminal courts and other authorities with the power to decide on IP cases. (The law also allows a specific group of non-professional representatives, which are not discussed here.) Choosing the correct representative In specific circumstances, Polish law imposes an obligation on a party to appoint a professional representative specialised in IP law. This is known as compulsory representation by a patent attorney and may be absolute or optional. The scope of the exclusive competence of patent attorneys is determined by two criteria: the type of authority before which the proceedings are held and the type of case. These criteria are cumulative. The IP Law introduced the principle of optional compulsory representation by a patent attorney, which provides that in PPO proceedings relating to the filing and examination of applications, as well as the maintenance of patents, utility models, industrial designs, trademarks, geographical indications and topographies of integrated circuits, a party may be represented only by a patent attorney. Thus, unless a party chooses to represent itself, it must appoint a patent attorney as its professional representative. This limitation of the choice of representative to an IP professional with the necessary technical knowledge applies to both matters requiring in-depth technical knowledge (ie, patents) and other areas of intellectual property (eg, trademarks, industrial designs or geographical indications). The limitation results from the legislatures belief that only the specialised knowledge of a person skilled in the art, combined with his or her professional responsibility to perform his or her duties properly, can guarantee that the partys interests will be adequately protected before the PPO. However, this exclusive competence of patent attorneys is limited to proceedings before the PPO. Thus, it does not apply to proceedings before the administrative courts (which deal with appeals of PPO decisions) or the civil courts, where parties may be represented by an attorney at law or a legal adviser and a patent attorney. The regulations allowing a party either to appoint a professional representative or to represent its own interests before the PPO do not apply to persons who do not reside in or have a registered office in Poland. In such cases the principle of absolute compulsory representation by a patent attorney applies, meaning that such persons must be represented by a patent attorney. This principle also applies in many other countries and is used not only in purely national proceedings, but also in international proceedings before the PPO. For example, the holder of a European patent that is applying for temporary protection of that patent in Poland must appoint a Polish patent attorney. A non-Polish applicant must also be represented by a Polish patent attorney when appealing against a decision of the PPO acting as the authority of an appointed state in proceedings for the registration of an international trademark. Legal advisers and attorneys at law are admitted in
Polservice Patent and Trademark Attorneys Office Poland
A legal representative may represent his or her client only within the scope of the granted power of attorney
cases relating to the invalidation of a patent, a supplementary protection certificate, a protection or registration right, the grant of a compulsory licence or an amendment to a decision to grant a compulsory licence, all of which are decided by the adjudicative board of the PPO acting as a quasi-judicial body. This is vital, particularly in complex cases and where the appointed patent attorney is not a lawyer (but is admissible under the Patent Attorneys Law). Poland has no specialised patent courts. Decisions of the PPO may be appealed to a regional administrative court, where a party can be represented by a legal adviser or an attorney at law and a patent attorney. The option of joint representation by these professional representatives is highly recommended in cases relating to inventions, industrial designs, geographical indications, the topography of integrated circuits and trademarks. In administrative IP cases, each of the abovementioned representatives is authorised to submit a cassation complaint. IP cases decided through civil proceedings usually relate to: infringements of patents, utility models, designs or trademarks; the establishment of a right to use in local activity a designation subsequently registered as a trademark on behalf of another party; the establishment of a right to use an invention, utility model or industrial design; and the assignment of, among other things, a patent, a right to a utility model, a right to an industrial design and a right to a trademark or topography of integrated circuits obtained by an unauthorised person. According to civil procedure, a professional representative may be an attorney at law or a legal adviser. In IP rights cases an inventor may also be represented by a patent attorney or a representative of an IP rights organisation. In civil cases an attorney at law or a legal adviser and a patent attorney may act jointly at first and second instances. However, a cassation complaint to the
Supreme Court may be filed only by an attorney at law or a legal adviser. The criminal procedure sets out completely different requirements. Parties in criminal proceedings are represented by defence counsel, a legal representative or a statutory agent, with the latter being a parent or a guardian who is not usually a professional attorney. The professional representative is the defence counsel or the legal representative. According to criminal procedure, a defendant may be represented only by an attorney at law (defence counsel). Other participants in the criminal proceedings may be represented by an attorney at law or a legal adviser. A legal representative may represent his or her client only within the scope of the granted power of attorney. The representative is authorised to act at both first and second instance of the criminal proceedings. As in civil proceedings, compulsory representation by a lawyer applies in case of a cassation complaint. A patent attorney is not authorised to represent parties in IP rights cases decided within the criminal procedure. This principle was laid down by a judgment of the Constitutional Tribunal in 2002. Nevertheless, considering the specific nature of the subject matter and patent attorneys technical knowledge, they frequently attend to support attorneys at law during criminal proceedings, even though they do not act as legal representatives in the proceedings. Proving the right of representation before the courts and other authorities Polish law provides that every representative must prove his or her authorisation to act on behalf of another person, as well as the scope of that authorisation. Authorisation to perform legal acts on behalf of another person may be provided by a declaration of the represented person (ie, a power of attorney). As a rule, a power of attorney may be granted in any form, not necessarily written. However, there are exceptions to this rule in some situations the law requires a specific form of power of attorney (eg, a written power of attorney, a notary act or a power of attorney with certified signatures). For example, a general power of attorney to perform all acts should be
Poland Polservice Patent and Trademark Attorneys Office
granted in writing. A power of attorney for representation in court or PPO proceedings may be given orally by the granting party before the court and is recorded in the minutes. If the granting party does not participate in the trial, its representative should submit a written power of attorney to prove his or her authorisation to act on behalf of the principal. A written power of attorney should include: the actions and matters in which the authorised person may represent the party granting the power of attorney; the execution date of the power of attorney; and the signature of the grantor. If the grantor is a legal entity, a power of attorney should be signed by someone who is authorised to sign in the name of the legal entity (usually a board member). In order to prove the right to represent a legal entity (eg, a company), the power of attorney must be accompanied by documents confirming that the person who signed the power of attorney was authorised to do so at the date of its execution. In this respect, the courts require a certified copy of a company register, valid at the execution date of the power of attorney, showing the persons who are authorised to represent the company, and whether such persons are entitled to act alone or must act jointly with another authorised representative. It is therefore essential that a power of attorney be signed by all persons whose common actions are necessary for effective and valid representation of the company. In the case of foreign entities, the validity of a power of attorney must also be proven by similar documents confirming the right of representation. If there is no way to provide a certified copy of a company register, the Polish courts will accept company documents showing the persons who can represent the company and the scope of their authorisation (eg, articles of association or a shareholders resolution on the appointment of persons authorised to represent the company). In specific cases, translations of legal acts on the rules of company representation that are binding in the country are also acceptable. The originals of the documents confirming the right of representation must be provided. A professional representative of a company is authorised to certify copies of the original documents. In addition, the courts and other authorities may require particularly on request of other parties to the proceedings that public documents executed in another country be provided with an apostille. This is a certificate drawn up in the contracting state where the document was executed. It is issued by the competent
authority of that state and certifies: the authenticity of the signature; the capacity in which the person signing the document has acted; and where appropriate, the authenticity of the seal or stamp borne by the document. An apostille is required with respect to the following documents: documents emanating from an authority or a court official; administrative documents; notarial acts; and official certificates placed on documents signed by persons acting in their private capacity. PPO practice and the Singapore Treaty on the Law ofTrademarks The regulations and rules described above are generally applicable in all proceedings before the courts and other authorities, including the PPO. Consequently, the PPO requires professional representatives to file a power of attorney, as well as other documents confirming the rules and scope of representation. The Singapore Treaty on the Law of Trademarks and its corresponding regulations entered into force in Poland on July 2 2009. The treaty regulates various procedural matters in proceedings before the PPO relating to an application or registration, with the aim of simplifying them. The provisions of the treaty are applicable to all proceedings before the PPO. The treaty states that any contracting party (ie, an authority of a signatory state to the treaty) may require the appointment of a representative by means of a separate document (a power of attorney) and specifies the scope of the power of attorney. The power of attorney may relate to one or more applications and/or registrations identified in the power of attorney, or to all existing or future applications and/or registrations of the appointing person. Furthermore, the power of attorney may be limited to certain acts. Importantly, the treaty provides that a contracting party cannot demand compliance with requirements other than those set out in the treaty. Thus, the treaty requires the filing of no documents other than the power of attorney. Therefore, the PPOs practice in this respect may be considered to be contrary to the treaty. Nevertheless, the Polish courts treat registration documents confirming the rules of representation as a component part of the power of attorney. Thus, the question of how to interpret the treatys provisions in this respect remains controversial.
Polservice Patent and Trademark Attorneys Office Poland
Alicja Rogoziska Patent attorney alicja.rogozinska@polservice.com.pl Polservice Patent and Trademark Attorneys Office Poland
Alicja Rogoziska has been a patent attorney since 1999. She is a European patent attorney and a professional attorney before the Office for Harmonisation in the Internal Market (OHIM). She graduated from the Faculty of Material Engineering at the Warsaw University of Technology, and completed postgraduate studies in intellectual property at the Jagiellonian University, Krakow and the European School of Law and Administration. Since 1983 Ms Rogoziska has been on the NOT Register of Translators (German). She is a member of the epi Disciplinary Commission, secretary of the Mazowiecki PIRP District Council and secretary of the Licensing Executives Society.
Pawe Wac Patent attorney pawel.wac@polservice.com.pl Polservice Patent and Trademark Attorneys Office Poland
Pawel Wac is a patent and trademark attorney and a professional attorney before the OHIM. He joined Polservice in 2005 and specialises in trademark registration, the protection and transfer of rights, internet domain issues and unfair competition cases. Mr Wac represents his clients before the PPO, the OHIM and the Polish administrative and common courts. He is an active member of the Polish Chamber of Patent Attorneys, a member of the National Council of Patent Attorneys and editor in chief of Patent Attorney, the patent attorneys association magazine.
Wojciech Trybowski Legal adviser and advocate wojciech.trybowski@polservice.com.pl Polservice Patent and Trademark Attorneys Office Poland
Wojciech Trybowski is a legal adviser and attorney. He graduated from the Faculty of Law and Administration at the University of Warsaw. He completed postgraduate studies in international trade (University of Warsaw) and copyright and competition law (Jagiellonian University, Krakow), and British and European law courses (University of Cambridge). Mr Trybowski joined Polservice in 1986 and specialises in IP law, competition law, copyrights, trade and civil law. He is a member of the International Association for the Protection of Intellectual Property (AIPPI) and a board member of the AIPPIs Polish branch.
Denisa Markuev Rominvent SA
Romania Trademark registration applications in no-mans land

Introduction The amended Romanian Trademark Law came into force on May 10 2010. The new law aims to be fully harmonised with the EU Trademarks Directive (2008/95/EC), although it also contains some original provisions. The new law: introduces new types of sign (eg, holograms and sound signals) into the definition of trademark; slightly changes the definition of notorious trademark it specifically states that it is sufficient to demonstrate that a trademark is recognised by Romanian consumers, without additional conditions of registrability or use; and amends the trademark opposition procedure. Trademark opposition procedure Absolute grounds for refusal ROPTO will no longer conduct the examination of relative grounds. Instead, it will examine only the absolute grounds for refusal. Two new provisions have been added to the existing grounds, namely: refusal of a trademark if it contains signs of high symbolic value (religious symbols in particular); or refusal of a trademark if it contains, without permission from the competent authorities, badges, emblems, coats of arms or escutcheons other than those covered by Article 6 of the Paris Convention. Observations regarding the absolute grounds may also be filed within the two-month term by any interested party (however, according to the same regulations, the person referred to cannot have the status of a party to the examination procedure and shall receive no communication from ROPTO). The observation will be notified to the applicant, which may present its comments within the examination procedure. The observation shall be analysed during the procedure of examination of the trademark registration application. Relative grounds for refusal Within two months of the trademark applications publication date (which, according to the implementing regulations, will be provided in electronic format on the website of the Romanian Patent and Trademark Office (ROPTO) within seven days from the filing date of the request), any interested party may file an opposition against the registration of the trademark on the basis of relative grounds. Previously, the term for opposition was three months. Apart from the standard grounds that refer to the identity or similarity of goods, and the notoriety of trademarks for identical, similar or different goods, the new relative grounds set out by the law cover earlier rights concerning: a name; an image; a copyright; a collective mark conferring a right which has expired, within three years after its expiration date; a certification mark whose validity has lapsed, within 10 years after its expiration date; earlier trademarks registered for identical or similar goods or services; a trademark which has expired through failure to renew, within two years after its expiration date; and the right in a trademark which was in use abroad and which continues to be used there, where the application was made in bad faith by the applicant. The applicant will be notified of the opposition. Within 30 days of the date of notification, it may file
Rominvent SA Denisa Markuev
its arguments in defence of the application (the term is extendible up to 30 days). The opposition will be examined during the examination procedure of the trademark registration application and settled by a board of three specialists (appointed by the head of the Trademark Division), one of whom will be the examiner of the application. The board will issue a notice on whether to accept or reject the opposition either wholly or partially and this will be closely examined when determining whether to accept or reject a trademark registration. Appeal procedure Interested parties can appeal ROPTOs decision on the application within 30 days of the registrations communication or publication, upon the payment of the legal fee. Previously, the term for appeal was three months. Registration If the examination of the application shows that the conditions prescribed by law are satisfied, ROPTO will then proceed to registration. Subsequently, the trademark will be published in electronic format on the Industrial Property Bulletin website within two months of the date of the registration decision. Thereafter, the State Office for Inventions and Trademarks will issue the trademark registration certificate, but only after payment of the publication and issuance fee. Also, the implementing regulations provide that the recordal of the trademark registration in the Trademark Register, the publication thereof and the issuance of the trademark registration certificate will be subject to payment of a single fee. It is at this point that trademark registration applications can enter no-mans land. Registration and invalidation ambiguity The practice notice states that even if an opposition is not filed within the two-month period, an appeal may be filed by any interested party (other than the opponent, any other party may also be considered as interested) and thus accepted and examined, following the appeal procedure under the judgment of the Re-examination Commission. However, the legal text refers to two instances when the appeal term may be limited, namely: within 30 days from communication in instances of a previously filed opposition; and within 30 days from the publication of the
trademark registration, since the trademark should be published for registration within two months of the date of the registration decision. The recordal of the trademark registration in the Trademark Register, the publication thereof and the issuance of the trademark registration certificate are all subject to the payment of a single fee. A trademark enters no-mans landwhen an applicant fails to pay the single fee that is required for the trademarks final registration. As there is no legal term within which the payment must be submitted and no penalty for non-payment, the applicant cannot be forced to pay the fee. This means that: no appeal may be filed against a registration decision issued by ROPTO until this decision is published in the Official Gazette; and no registration will be recorded in the Trademark Register until the fee is paid. If a trademark is not registered or published for registration and no certificate is issued, then what other means are in place apart from the appeal procedure to protect earlier rights? The law provides the possibility for any concerned persons to apply to the Bucharest Law Court to invalidate a trademarks registration on various grounds, including: a registration contrary to any of the absolute or relative grounds; a registration applied for in bad faith, infringement of personal portrayal or name; a protected geographical indication or a protected design; or other industrial property rights or copyright. The time limit for requesting a registrations invalidation is five years from the trademarks registration date. This excludes requests for invalidating applications that have been made in bad faith, as these may be filed at any time. When it comes to relying on the five-year term from the registration date (as long as it is an unpublished decision for a trademark registration that is being dealt with), and the provisional and protective measures taken against such applications for invalidation, the following questions must be asked: Should the trademark be published for registration in order to enable third parties to initiate actions to protect earlier IP rights? Or will it be sufficient that the trademark be published as a mere application?
Romania Rominvent SA
Comment Although the new law has been in force for over a year now, undetermined trademark registration applications are a controversial topic that is still being highly debated. Until the courts rule on this issue, applications whose fees have not been paid will
remain ambiguous. In the meantime, in order for registered IP rights to be better protected, it is important that interested parties monitor the first publication of newly filed applications so that they can file oppositions against any potentially infringing trademarks.
Denisa Markuev European trademarks and designs attorney dmarkusev@rominvent.ro Rominvent SA Romania
Denisa Markuev has a BA in law and an MA in EU integration. She is a qualified European trademarks attorney and has been a member of the trademarks department since 1999. Her specific expertise focuses on trademark registration and prosecution. She is also involved in various works within IP organisations.
Amat i Vidal-Quadras Advocats Miguel Vidal-Quadras Tras de Bes, Oriol Ramon Sauri and Rita Reyes Ros
Spain Decisions, decisions: the courts lead the way in developing IP rights
After two decades of ongoing law reforms, the Spanish courts are now applying a mature legal IP regime. The modern IP law has resulted in specialised and semispecialised courts and appeal courts, with the latter mainly located in Barcelona, Valencia, Bilbao and Madrid. This has allowed the Supreme Court, which is continuously trying to reduce the time taken to rule on appeals, to issue some landmark decisions over the past year. The result has been better comprehension of the economic issues involved in different cases. This chapter looks at some key aspects of IP law involved in recent developments in Spain. Profits means just profits, not gross profits If the court considers that infringement has taken place, damages will be awarded subject to evidence being submitted during the proceedings. According to the IP legislation, the compensation for damages payable to the rights holder must be calculated in accordance with one of the following criteria, at the plaintiffs discretion: the negative economic consequences, including the profits that the proprietor could foreseeably have obtained from exploiting the IP rights if there had been no competition by the infringing party, the profits obtained by the latter party from exploiting the patented invention and, if any, the moral damages caused to the rights holder; or the amount that the infringing party would have paid to the proprietor for a licence allowing it to exploit the patent legally. If the plaintiff chooses the first option, it should be decided whether the profits (of either the plaintiff or the defendant) must be considered as gross, or which profits should be used to calculate the compensation. This option specifies that damages are payable for negative economic consequences. The way in which profits must be calculated depends on each product and the parties involved in the proceedings, as not all exploitation affects a companys business in the same way. In this way, in some cases the courts have found that the damages caused by an infringing party should not be calculated based on its gross profits. The important question when determining damages is what the real profits would have been as a consequence of an objective analysis of the negative economic consequences of the infringement. Spain and the European patent Spain and Italy have both rejected the European Unions proposal to create a future European patent. But why have they opposed a plan that is intended to simplify the European patent system and reduce the costs of protecting inventions? In fact, Spain and Italy are not objecting to a common European patent system, but merely to a proposal that discriminates against certain languages. According to the proposal, French, German and English would be accepted as the languages used to apply for and obtain a European patent. Spain has proposed that if the inclusion of Spanish as a fourth official language is not possible for economic reasons, then English should be the only official language applicable. In fact, as language is a crucial element in the interpretation of patents, the fact that patent infringement can be prosecuted only in English would benefit the whole European Union, since the vast majority of companies understand English, but not French or German. Defending language in this way is not a 19th century battle, but rather a need to remove artificial barriers within the EU territory. Language could be one such obstacle. The use of a single language, such as English, would allow for consideration of how a patent could affect a specific sector and interpretation of the patent according to how it was discussed during its prosecution. In addition, it should make it easier to understand a patents scope and limitations, which is vital in decisions related to research and development. Unfortunately, the inflexible stance of Germany and France again demonstrates the lack of consensus within
Spain Amat i Vidal-Quadras Advocats
It seems that the common views adopted when the EU trademark and design systems were approved should be the same for patents. However, it appears that certain countries are uncomfortable with this solution
the European Union. Equally important independent European countries, such as Spain and Italy, have taken a tough position on the subject and are defending EU-wide industry against the attempts of some countries to impose their domestic interests. This discussion has detracted from other issues that will arise, such as the substantive law on patents (which until now has not been subject to EU harmonisation) or the judicial system (there are different cultures in this respect and certain countries have difficulties in accepting the jurisdiction of others). The European Court of Justice has already objected to the establishment of a single court, whose decisions would not be subject to further appeal. In this respect, it seems that the common views adopted when the EU trademark and design systems were approved should be the same for patents. However, it appears that certain countries are uncomfortable with this solution. Supreme Court confirms validity of protocol questions to analyse equivalents In a judgment of May 10 2011, for the first time the Supreme Court confirmed the British protocol questions as a valid test to analyse patent infringement according to the doctrine of equivalents. The protocol questions are guidelines developed by UK case law (more useful in some cases than in others) for applying Article 1 of the Protocol on Interpretation of Article 69 of the European Patent Convention (EPC) to the doctrine of equivalents. As stated in the House of Lords decision in Improver Corporation v Remington Consumer Products Ltd, if the issue to be determined is whether a certain feature involved in an alleged infringement, which fell outside the primary, literal or contextual meaning of a descriptive word or phrase in the claim, was nevertheless properly interpreted within its language, the court should find an answer to the following three questions:
Does the variant have a material effect on the way the invention works? If so, the variant is outside the claim. If not, would this (ie, that the variant had no material effect) have been obvious on the date of publication of the patent to a reader skilled in the art? If not, the variant is outside the claim. If so, would the reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention? If so, the variant is outside the claim.
The Supreme Court considered that according to the EPC, the scope of a patent extends to the equivalent use of the invention, which takes place when the patented invention is used with means that are not expressly stated in the claims, but contains essential features of the patented invention. In so doing, the Supreme Court recognised the use of the protocol questions in a judgment of January 17 2008 by the Barcelona Appeal Court, which was upheld by the Supreme Court in its May 10 2011 judgment. Copyright and digital copy: changes ahead During 2011 significant regulatory change took place regarding intellectual property in the digital field when the so-called Sinde Law was published (the informal name for a section of the Sustainable Economy Act 2/2011, which affects IP rights) and the consolidation of judicial decisions issued by the courts. The Sinde Law amended certain IP laws regulating the information society in order to ensure quick proceedings to stop a service being offered online if it infringes IP rights and to take the required measures to remove infringing content from the Internet. In three recent judgments the Barcelona Provincial Court adopted criteria relating to the protection of
Amat i Vidal-Quadras Advocats Spain
copyrights in the digital environment and fees for private copies. In the first judgment, issued at the beginning of 2011, the owner of a website was ordered to pay compensation to the Spanish General Authors and Publishers Association (SGAE) because the website allowed users to download or listen to music files directly. Regarding the peer-to-peer (P2P) website, the court ruled that a party is deemed to carry out copying and public communication acts when it has a music or film file included in a shared folder of files that anyone can access by means of a P2P customer programme, whereas the owner of the website that provides the link, in addition to the prior selection of the files, cannot be considered to carry out these actions directly, even though it indirectly contributes to this infringement of IP rights used for public communication. Shortly afterwards, the same court acquitted the owner of a website on the same grounds. In regard to the website, it stated that: when the user of the website clicks on a link, the latter runs a customer program, which users install in their computers (eg, eMule), and begins downloading the files from the computers where the work is made available. During this download process, the data does not pass through the server where the internet link is hosted; therefore the user downloading it does not receive the data from the website, but directly from the computer where the file is hosted. Therefore there is no participation in the transfer that could be deemed as a kind of re-transfer. In this respect, the court considered that it had been proven that the defendants website copied nothing, since it merely provided a link. Finally, in regard to fees for private copies, a fee can be levied automatically on equipment that can reproduce or copy works protected by copyright. In another judgment issued at the start of 2011, the Barcelona Provincial Court ruled in favour of a computer shop being exempt from paying the digital fee claimed by SGAE merely for the sale of such data storage devices. The judgment referred to doctrine in which it was determined that the digital fee had to be paid only by private individuals. The court considered the possibility of discrimination in applying the fee in a new way, depending on whether the party making the copy was a private individual (the fee payer) or a company or professional (eg, a lawyer, auditor, engineer, or architect). In the latter case, the different use of equipment did not require the payment of a fee. In the case mentioned above, the defendant was exempted from payment since it was impossible to calculate which part of the material sold could be used for private purposes by the purchaser.
Supreme Court confirms validity of Bolar exemption The Bolar exemption was introduced in the European Union in 2004 and involves consideration of the actions carried out to obtain marketing authorisation for a medicine as actions that do not infringe the patent for that medicine. It was implemented in Spain in July 2006. In a common position adopted on September 29 2003, the EU authorities considered that regarding the applications submitted and authorisation granted, the Council considers that, due to being of an administrative nature, such actions do not infringe the protection of a patent. The Bolar exemption was implemented in Spain as a special clause for experimental use by stating that patent rights would not extend to any actions undertaken for experimental purposes referring to the object of a patented invention, in particular studies and trials conducted to obtain authorisation for generic medicines in Spain or abroad, and the resulting practical requirements, including preparing, obtaining and using the active ingredient for such purposes. In a June 2010 decision the Supreme Court explained that EU law had introduced the Bolar exemption, and that after the expiration of the period for adaptation of internal law to the directive, the jurisdictional bodies in member states must abstain, as far as possible, from interpreting their internal law in such a manner that could seriously compromise achieving the objective sought by the directive. The application of EU law in Spain in this case in regard to specific patent aspects affecting pharmaceutical products has undergone a swift evolution as a result of the European Commission changing its approach. Before 2000, the commission was against the Bolar exemption, but began to favour its implementation in 2001. After being adopted and implemented in Spain in 2006, it took four years before the Supreme Court had the chance to make a reference to the exemption in a case that began in 2002, before the Bolar exemption was included in EU legal texts. Validity of pharmaceutical product claims included in patents before 1992 Pharmaceuticals could not be patented in Spain until October 7 1992. However, several patentees disregarded this prohibition, which was expressly contained in Spains reservation to the EPC, and obtained European patents including product claims for Spain. For example, this occurred in relation to atorvastatin and olanzapine. Certain decisions issued by the Barcelona and Madrid Courts of Appeal in 2006 and 2008 recognised the validity of such claims in spite of the prohibition,
Spain Amat i Vidal-Quadras Advocats
mainly based on the application of the principles included in the Agreement on Trade-Related Aspects of IP Rights and conferring on this law preferential status over domestic law, as well as direct effect. On May 10 2011 the Supreme Court upheld this approach by dismissing an appeal filed against a judgment rendered by the Barcelona Appeal Court in the Olanzapine case.
Although other cases are pending before the Supreme Court, this recent decision has discouraged generic companies from having any expectations about the guarantees referred to in the laws from 1986 and 1992, which for several years allowed alternative technologies to be developed in Spain in order to obtain pharmaceutical products.
Miguel Vidal-Quadras Tras de Bes Partner mvq@avqadvocats.com Amat i Vidal-Quadras Advocats Spain
Miguel Vidal-Quadras Tras de Bes is head of the firms industrial property, IP and pharmaceutical law department. He graduated in 1993 from the University of Barcelona with a PhD in law and has been a member of the Barcelona Bar Association since 1997. He is the author of various IP publications and a professor of patent law at Universitat Ramon Llull and Universidad de Barcelona. His areas of expertise include litigation, intellectual property, technology transfer and pharmaceutical law.
Oriol Ramon Sauri Associate ors@avqadvocats.com Amat i Vidal-Quadras Advocats Spain
Oriol Ramon Sauri graduated in law in 2002 from Universitat Autnoma de Barcelona and holds an LLM in industrial property, IP and competition law from ESADE, Universitat Ramon Llull. He joined the Barcelona Bar Association in 2004 and joined the firm in the same year. He is a member of the International Association for the Protection of Intellectual Property. His main areas of expertise are litigation, intellectual property, competition, advertising and pharmaceutical law. He speaks Spanish, Catalan and English.
Rita Reyes Ros Associate rrr@avqadvocats.com Amat i Vidal-Quadras Advocats Spain
Rita Reyes Ros graduated in law from Universidad Catlica Andrs Bello, Venezuela (1998) and Universidad de Alicante (2005). She has an LLM in IP and information society law (Magister Lvcentinvs 2002). She joined the Barcelona Bar Association in 2006, and her main areas of expertise are litigation, intellectual property, competition, advertising and pharmaceutical law. She speaks Spanish and English.
Mannheimer Swartling Stefan Widmark, Evelina Anttila and Emelie Nordh
Sweden Modernisation of Swedish IP law continues

The past year has seen a number of important developments in Swedish IP law, including the introduction of a new Trademarks Act and developments in the process of amending the Copyright Act, as well as a number of noteworthy judgments. Amended laws and regulations New Trademarks Act and modifications to Trade Names Act On July 1 2011 a new Trademarks Act came into effect, replacing the previous act and the Collective Marks Act. The new act is the result of several years work to modernise the regulation of trademarks, particularly the application procedure, and should make it possible for Sweden to accede to the Singapore Treaty on the Law of Trademarks 2006. The act has been made easier to understand and includes numerous important amendments. In addition, the trademark and trade name legislation have been brought into line with each other. One of the main amendments is the introduction of an administrative procedure for the cancellation of registered but unused trademarks. Until July 1 2011 a revocation procedure by a holder or a third party after expiry of the opposition period required court proceedings. The new procedure enables a holder or a third party to file a revocation application directly with the Swedish Patent and Registration Office (PRV). However, if the holder opposes the application, the applicant must pass the application to a district court for further processing. The purpose of the administrative procedure is to facilitate and speed up the cancellation process when a trademark is no longer necessary or of any use or interest to the holder. As mentioned above, the new act introduces amendments to facilitate and clarify the application procedure handled by the PRV, including the following: The opposition period has been extended from two to three months. Partial rejection of an application for registration of a trademark is now allowed (previously, an application could be rejected only in its entirety). It is possible to request minor alterations to the trademark applied for, provided that these are not substantial and do not affect the overall impression of the mark. The new act allows the option to request that the PRV transfer a trademark application to a party with a stronger right to the trademark than the applicant (this proceeding was previously a court matter). In case of doubt, the PRV may order the party claiming the better right to bring a court action in court within a certain time. The option of using disclaimers has been limited in such a way that the PRV shall register a disclaimer for parts of a trademark that it is not possible to register only if there exists a clear risk that the trademark registration will become uncertain.
The new act also includes some amendments to the provisions on barriers to trademark registration. Following Article 15.2 of the EU Trademark Directive (89/104/EEC), the act now allows for the registration of marks designating a geographical origin of goods or services constituting collective, guarantee or certification marks. Another interesting amendment is the adaption to the Names Act, which means that the barrier to the registration of surnames has been limited. Under the new act, a trademark cannot be registered if it contains something which is meant to be perceived as someone elses distinctive surname if the use of the mark would disadvantage the bearer of the name and the name is clearly not referring to someone long since deceased. New Copyright Act postponed In April 2011 the Copyright Commission published its final report (SOU 2011:32) on a new Copyright Act to replace the Copyright Act (1960/729). Work on the new
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Copyright Act has been ongoing since 2008, when the Copyright Commission, chaired by Professor Jan Rosn, was appointed to conduct a review and propose revisions to the existing act. The purpose of the proposal is to make the new act more transparent and more easily accessible for both those who must apply the act directly and the general public. The new act was supposed to come into effect on July 1 2011 but, due to disagreements between the interested parties, this has been postponed and the minister of justice has decided to move forward only with the proposed amendments concerning contractual licences. However, on April 1 2011 a new provision relating to licence agreements (SFS 2011:94) was implemented into the existing Copyright Act, which makes it easier for radio and television companies to enter into comprehensive agreements with organisations representing several Swedish rights holders in the field regarding the reuse of copyright-protected materials. The provision allows a radio and television company to transfer published works to the public if the works are included in their own works or works commissioned by the company and have been broadcast before July 1 2005, provided that a licence agreement applies. The company may also make such copies of works as necessary for the transfer. The new Copyright Act and other legislative changes are expected to come into force on January 1 2013. Clarification of Patents Act new medical uses On July 1 2011 an amendment to the Patents Act (1967:837) came into effect. The amendment explicitly provides for the possibility of granting patents for new medical uses of already known materials. The amendment does not extend patentability or create new opportunities for patent protection. The possibility of patenting so-called subsequent medical indications already exists under Swedish law, and the sole purpose of the amendment is to clarify the regulations on pharmaceutical inventions. The amendment also means that the term news in the Patents Act will be harmonised with the European Patent Convention. Key cases Implied consent for use of photograph on album cover The Supreme Court recently dismissed a photographers claim for copyright infringement and ruled that, unless otherwise agreed, an agreement concerning the right to use a work on the packaging of a product intended for sale to consumers shall, in principle, implicitly include the right for the manufacturer and its retailers to use the packaging in the marketing of the product, provided
that such marketing is customary. The photographer commenced proceedings against a retailer, claiming that the retailer had infringed his copyright in a photograph taken by him by unlawfully reproducing the photograph by using an album cover in its sales catalogue. The photographer had previously entered into an agreement with a record company regarding the right for the record company to use the photograph in question on the album cover, and in turn the record company had entered into a distribution agreement with the retailer regarding the sale of the album, including the specific photograph. The court began its assessment by stating that the retailers use of the photograph in the sales catalogue constituted reproduction of the photograph (which was indisputably copyright protected). The court then referred to the Copyright Act, under which the right to use a copyright-protected work may not be further assigned unless otherwise agreed. However, the court held that such rights may be further assigned, despite explicit consent from the copyright holder, provided that the circumstances are such that the copyright holder can be deemed to have implicitly agreed to further assignment (reference was made to the preparatory works). The court then said that it must be clear to a copyright holder which gives a manufacturer the right to use a work on the packaging of a product intended for sale to consumers that such sale may occur through several operators in the distribution chain, and that each operator may need to market the product. The court found no circumstances in this case which indicated that the photographer had specifically objected to the use of the album cover for the marketing of the album, and thus deemed that the retailers use of the photograph in its sales catalogue fell within the scope of the agreement between the photographer and the record company. Two dissenting judges found that the retailer had no right to use the photograph under the agreement. Protection in relation to third parties when acquiring IP rights In 1999 a company entered into an agreement with an inventor to acquire all rights pertaining to an invention, including patents, patent applications and know-how. The agreement contained a clause pursuant to which either party could terminate it if the other party were declared bankrupt. All rights would revert to the inventor if the agreement were terminated. In September 2002, when the company still had not paid the purchase price in whole, the inventor terminated the
Mannheimer Swartling Sweden
agreement with immediate effect. The company was declared bankrupt in late November 2002 and in May 2003 the receiver sold the companys bankruptcy estates assets, including the patent rights, to a third party. The inventor brought an action against the bankruptcy estate asking the court to declare that he was the rightful owner of the patent rights at the time when the receiver sold the rights to the third party. In a December 22 2010 judgment, and with reference to a previous precedent (Case NJA 2009, page 695), the Supreme Court established that when acquiring IP rights, protection in relation to the sellers creditors is obtained through the agreement. No additional steps are required to obtain this protection because: as intangible property, IP rights cannot be handed over to the purchaser; there is no third party which is obliged to perform something that must be notified; and the law has not established that registration is necessary in order to obtain protection in relation to the sellers creditors. The Supreme Court continued its assessment by highlighting the following questions subject to discussion in the judicial literature: whether a seller must make a reservation of right to terminate a contract in order to revoke an assignment of IP rights; whether, if a purchaser has been granted a right to use the IP rights, a seller must make a reservation of right to terminate a contract in order to revoke an assignment of IP rights; and whether a purchasers right to use the IP rights or to dispose of them freely would mean that a seller no longer had a right to revoke the assignment, or at least that a revocation in the purchasers bankruptcy through which the rights return to the seller would not mean that he or she was protected in relation to the purchasers creditors. Unfortunately, the Supreme Court provided no answer to whether a reservation of right to terminate the contract is always required in order for the seller to be able to revoke the assignment, as the agreement between the inventor and the company contained such a clause. As regards the second question, the court said that the fact that a purchaser has been granted a right to use the IP rights does not mean that the seller has lost the right to revoke an assignment of these rights. On the third question, the court stated that if the purchaser is granted a right to dispose freely of the IP rights, this could mean that rights that revert to the
seller after termination of the agreement in case of the purchasers bankruptcy are not protected in relation to the purchasers creditors. The seller will not be in a better position compared to the bankruptcy estate in these cases. However, if the termination is made prior to the purchaser entering into bankruptcy, it will also be binding in relation to the bankruptcy estate. In the latter case it may be that the seller must respect a prior acquisition of the rights by a third party (special rules, not discussed here, apply in bankruptcies). The court then held that the fact that the inventor had granted the company a right to pledge the patents and patent applications did not affect whether the termination made before the companys bankruptcy meant that the reversion of rights was protected in relation to the companys creditors. The court found that the inventor was the rightful owner of the patent rights, and not the bankruptcy estate. Further developments regarding IP Rights Enforcement Directive As reported in the Swedish chapter of IP Value 2011, the Swedish implementation of the EU IP Rights Enforcement Directive has resulted in three cases dealing with one of the main features of the directive: the potential right for rights holders to obtain information regarding the origin and distribution networks of infringing goods and services. The common dominator of the three cases is the potential conflict between the rule allowing disclosure of information and the EU Privacy and Electronic Communications Directive (2202/58/EC). Since the publication of IP Value 2011, the courts have stayed the proceedings in all three cases in order to await the outcome of the preliminary ruling from the European Court of Justice (ECJ) in the EPhone case. The following is a short summary of the status of and the actions taken in the three cases. In the EPhone case ( 4817-09) five audiobook publishers claimed that internet access services provided by Perfect Communication Sweden under the name EPhone had enabled the infringement of copyright-protected audiobooks to be committed through a file transfer protocol server. They requested the court to order the provision of information about the identity of the infringer. The Supreme Court has now decided to stay the proceedings and has referred the matter to the ECJ for a preliminary ruling, the outcome of which is likely to affect the other two cases as well. The oral hearing at the ECJ was held in Summer 2011. The second case (Case 2472-10) concerns a similar order against Swedish internet service provider
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TeliaSonera. A number of film companies brought an action against TeliaSonera, arguing that a large amount of copyright-protected material was made available through the website Swetorrents via its servers, and requesting the court to order the provision of information about the identity of the infringer. Both the district court and the appeal court granted the claim, but the Supreme Court decided in December 2010 to stay the proceedings until the ECJ ruling in EPhone. The third case (Case 7705-10) is currently
before the appeal court and concerns the illegal uploading and downloading of music files. Several music companies represented by the International Federation of the Phonographic Industry requested an order to obtain information about the identity of the infringer from Com Hem AB, (a company offering television, broadband and telephone distribution service). The Stockholm District Court granted the claim and Com Hem appealed to the Svea Court of Appeal, which stayed the proceedings until the ECJ has issued its preliminary ruling in relation to EPhone.
Stefan Widmark Partner swi@msa.se Mannheimer Swartling Sweden
Stefan Widmark is a partner of Mannheimer Swartlings practice group for IP, marketing and media law. He is a member of the IP Rights Policy Group of the International Chamber of Commerce (ICC) Sweden and the Marketing and Advertising Policy Group of ICC Sweden. He has extensive experience of a wide range of both contentious and non-contentious IPrelated matters and is frequently ranked as one of the leading IP rights lawyers in Sweden.
Evelina Anttila Associate eve@msa.se Mannheimer Swartling Sweden
Evelina Anttila is an associate in Mannheimer Swartlings practice group for IP , marketing and media law. She joined the firm in 2010.
Emelie Nordh Summer trainee Mannheimer Swartling Sweden
Emelie Nordh is a law student at Stockholms University, presently completing her last semester. She was employed as a summer trainee in the practice group for IP, marketing and media law at Mannheimer Swartling during Summer 2011.
Kirkland & Ellis International LLP Pierre-Andr Dubois and Shannon Yavorsky
United Kingdom Developing patent law: the courts lead the way
This year has seen several interesting developments in UK patent law. The law relating to obviousness, which has been a recurrent topic in Court of Appeal decisions over the past few years, made a reappearance this year in a case relating to a drug patent. In Merck Sharp & Dohme Corp v Teva Ltd the Court of Appeal dismissed an appeal against an earlier High Court decision granting Teva UK Limiteds application for revocation of Merck Sharpes patent relating to ophthalmic compositions for the treatment of glaucoma on the basis of a prior art document published just six days before the priority date of the patent. In a rare outing, the issue of reconditioning a product and whether this constitutes making and therefore infringement under the Patents Act 1977 was examined by the Court of Appeal (Schtz (UK) Ltd v Werit (UK) Ltd). In the same case, the court went on to clarify the effect of Section 68 of the act relating to the recovery of damages and costs where a registrable transaction on which proceedings are based is not registered in a timely manner. Finally, the Supreme Court is due to rule soon on whether English courts are bound by decisions of the European Patent Office (EPO) (Human Genome Sciences Inc v Eli Lilly and Company). Outside the courts, the long-awaited Hargreaves Report on intellectual property was published and, among other things, provided support for the ever-elusive European patent system. Obviousness On April 11 1991 the Association for Research in Vision and Opthalmology published a paper related to the additive effect in reducing intraocular pressure of administering an eye drop including 2% of a drug then known as MK507 10 minutes after administering an eye drop containing 0.5% of a drug called timolol. The paper suggested that such consecutive administration improved intraocular pressure by about 17%. On April 14 1992 Merck filed its application for a European patent in respect of ophthalmic compositions comprising combinations of MK507 and timolol for the treatment of glaucoma, claiming a priority date of April 17 1991 (six days after the paper was published). Teva issued proceedings in the Patents Court seeking a declaration that the patent was invalid and should be revoked on the grounds of lack of novelty, lack of inventive step, insufficiency and added matter. Merck sought to meet these objections by applying to amend the patent. The judge concluded that the patent, both as originally granted and as proposed to be amended, was invalid for lack of an inventive step. The Court of Appeal granted Merck permission to appeal. On appeal, the court had to consider whether Teva had established that the outcome of its step-by-step approach would be a formulation of timolol and dorzolamide in the proportions specified in the relevant claim at a pH range of 5.5 to 6, as required by the proposed amended claim. Counsel for Merck said that the conclusion on this issue was in the negative and offered the following propositions: As the paper did not say how to suspend or dissolve both timolol and dorzolamide in water so as to constitute a co-formulation, the skilled team would have had to find that out in the six days which had elapsed between the publication of the paper and the priority date. Notwithstanding his correct self-direction on the law, the trial judge had wrongly applied hindsight in concluding that the skilled team starting with the paper would end up with a co-formulation within the amended claim. The appeal court agreed with Teva that the test of obviousness did not have an additional time requirement. If an invention was obvious, it could not have been rendered inventive because of some supervening publications. On the second point raised by Merck, the court held that there was nothing in the trial judges decision to suggest that impermissible hindsight
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had a bearing on his conclusions. The court then considered the issue of solubility and pH adjustments of the formulation, and stated that the trial judges conclusion was based firmly on his evaluation of the evidence adduced before him. Merck was unsuccessful in this case, given that it was obvious to attempt to create a co-formulation of the two drugs. Fine-tuning an experiment by adjusting pH, concentration or other parameters was a common trialand-error approach in the drug research field, and unfortunately in this case the result was obvious and not patentable. Reconditioning In Schtz (UK) Ltd v Werit (UK) Ltd the key issue before the Court of Appeal was whether reconditioning a product amounted to making the product within the meaning of Section 60(1) of the Patents Act 1977, and was therefore infringement. The patent at issue, of which Schtz was the exclusive licensee, was for an intermediate bulk container used for transporting large quantities of liquid. It consisted of a square plastic bottle housed within a square cage. If the bottle transported toxic liquids, it could not be reused. However, the cage could be repaired or reconditioned and reused several times over. Defendant Werit made its own bottles and sold them to Delta Containers Limited, which would then install the fresh bottles in the reused square cages and place the reconditioned intermediate bulk containers on the market. Both sides had relied on the House of Lords decision in United Wire v Screen Repair Services, in which it was established that the correct approach was to ask whether, when the part in question is removed, what was left embodied the whole of the inventive concept of the claim. In this case, the trial judge had held that it was the cage which embodied the whole of the inventive concept of the claim, and had reasoned that putting a new bottle into a cage was not making the patented article. However, the appeal court disagreed and held that what Delta had done was to recondition or repair a cage made by Schtz and re-use it to make an assembly as claimed in the patent at issue. Delta was therefore making intermediate bulk containers when it inserted Werit bottles into Schtz cages. Therefore, by supplying plastic bottles to Delta to fit into the Schtz cages, Werit was liable for contributory patent infringement. Effects of registrable transactions In the same case the court issued a further decision which has provided much-needed clarification of the effects of Section 68 of the Patents Act 1977 relating to
the recovery of damages and costs where a registrable transaction on which proceedings are based is not registered in time. Schtz was the exclusive licensee of the patent by virtue of a 1994 licence agreement with Swiss company Protechna, but had not registered the licence at the Patent Office until July 21 2008, shortly before it commenced the patent action on August 7 2008. The period for which compensation was sought by Schtz was from the date of the licence agreement (1994) to the time of the proceedings. Once the parties learned of the judgment on the patent issue, counsel for Werit informed counsel for Schtz that a point under Section 68 would be taken. That point was that although Schtz had been successful in its claim, because Schtzs exclusive licence had not been registered in time at the Patent Office the effect of Section 68 was that the court was precluded from awarding costs against Werit. Furthermore, Werit claimed that the court could not award Schtz damages for the period prior to the amendment of Section 68. Section 68 was amended on April 26 2006 to allow the courts to award damages and account of profits to patentees and exclusive licensees for infringements committed after the registration of the transaction, even if the registration was made after the expiry of the sixmonth time limit. The amendment also provided that a claimant would not be awarded costs and expenses in cases where the transaction was registered after the sixmonth time limit. In this case, Werit claimed that Schtz was not entitled to costs since it had registered outside the six-month time limit. As to whether it was too late for Werit to raise the Section 68 issue, the court stated that the purpose of the section was to: make people register relevant transactions timeously. Any benefit to a defendant is a happenstance. The section is not framed in terms of a defence which is there to be taken: the section says the court shall not. The court therefore considered that it was unnecessary to consider whether Section 68 had been properly raised. The court noted that Werits acts of infringement fell into three distinct periods: the period before the amendment of Section 68; the period following amendment of Section 68 until registration of the licence; and the period after the licence had been registered. Counsel for Werit suggested that if compensation was claimed for a period when the licence was not registered but should have been, then no costs could be awarded even for the later period when the licence was
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registered. The court disagreed, stating: if and insofar as a claim covers a period for which a relevant transaction was not registered when it should have been (a nonregistration period) then any costs incurred during that period cannot be recovered. Costs for periods outside a non-registration period are recoverable in the usual way. The court added that it was clear that Parliament did not intend to say that once a party had failed to register a document in time, it could never recover costs even if all the infringements complained of occurred only after registration. In this case, most of the costs were incurred as a result of Werit resisting the proceedings during the period when the transaction was registered, and it was only fair to make Werit pay those costs. The court noted that before the amendment, the penalty for nonregistration was no compensation rather than no costs for infringements carried out during the nonregistration period, and that after the amendment of Section 68, costs could be awarded for infringing acts done after late registration. Werit went on to argue that this construction meant that the exclusive licensee could get its full costs for the period after registration and this fact rendered Section 68 largely ineffective, since discovery of infringement usually triggered registration before an action started. On this point, the court agreed, saying that Section 68 was not a well thought-out piece of legislation in either its original or amended form. On costs, it was agreed that given the fact that the amendment was not retrospective, Schtz could not claim compensation for the pre-amendment period. Binding effect of EPO decisions In its forthcoming hearing of Human Genome Sciences Inc v Eli Lilly and Company the Supreme Court must consider whether English courts are bound by decisions of the EPO. The Court of Appeal upheld the High Courts decision that the patent at issue in this case was invalid for lack of industrial applicability. However, in concurrent opposition proceedings, the EPO Technical Board of Appeal had found the patent valid. The appeal court described the importance of the boards case law as follows: We follow any principle of law clearly laid down by them, only reserving the right to differ if we are sure that the commodore is steering the fleet on to the rocks. The judge added: I do not see why the English courts intense fact finding and evaluation process should give deference to the findings or evaluations of
fact by the [board] in other cases cases which, as we shall see, the [board] itself regards as fact-sensitive. The English Courts have never, for instance, given deference to the [board] in the case of the objection of obviousness. I do not see why the position should be different in the case of other fact-evaluation objections such as sufficiency or, here, susceptibility of industrial application. The Supreme Courts decision is eagerly awaited, as it will have bearing on the extent to which the English courts can differ from the Technical Board of Appeal. Hargreaves Report In May 2011 Professor Ian Hargreaves published his eagerly awaited report on intellectual property and growth in the United Kingdom. The independent report, entitled Digital Opportunity, a Review of Intellectual Property and Growth, commissioned by Prime Minister David Cameron in November 2010, is the product of a five-month review of the UK IP framework and the consideration of evidence submitted by almost 300 individuals and organisations, undertaken by Hargreaves, the chair of Digital Economy at the Cardiff School of Journalism, Media and Cultural Studies and Cardiff Business School and a panel of five experts. Although the report has no binding effect, opinion is that the government recognises that legislative reform is needed, and the proposals put forward in the report should provide a solid foundation for such reform. Two of the 10 recommendations in the report relate to patents. First, the report promotes the United Kingdoms role in the move to establish a European Patent Court and a unified European patent, stating that it should attach the highest immediate priority to this goal. Second, the report suggests ways in which barriers to innovation can be limited for example, by: establishing fee structures with international partners; limiting the extension of patents into sectors such as business methods and non-technical computer programs without clear benefit; and cutting the application backlog by managing the pressures of the increased numbers of patent applications. At this point, the report is conceptual in nature and contains scant detail of how the recommendations would work in practice.
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Pierre-Andr Dubois Partner pierre.dubois@kirkland.com Kirkland & Ellis International LLP United Kingdom
Pierre-Andr Dubois heads the firms UK and EU IP and competition group. His practice covers all aspects of IP and IT law, as well as UK and EU competition law. PLC Which Lawyer? Global 50 has named him as a leading lawyer every year since 2005. In addition, in 2010 and 2011, he was named by Intellectual Asset Management magazine as one of the worlds 250 leading technology licensing lawyers.
Shannon Yavorsky Associate shannon.yavorsky@kirkland.com Kirkland & Ellis International LLP United Kingdom
Shannon Yavorsky is an IP associate in the London office of the firm. Ms Yavorsky handles contentious and non-contentious IP and IT work. Her experience includes copyright, design right, trademarks, patents and data protection.
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Asia-Pacific
Karen Sinclair, Mark Pullen, Andrea Allan, Bruce Dowsing and Peter Hallett Watermark
Australia Globally aligning the Australian IP environment

Due to a steady increase in jurisprudence created under the three most recent of Australias four major IP acts, and through ongoing amendment of the Patents Act 1990 (Cth) in particular, the Australian IP environment is becoming increasingly aligned with those of the worlds major IP jurisdictions. Although in the past the quality of Australian court decisions has varied, the fact that there is now a bench of experienced IP judges (including the chief justice of the High Court of Australia) which pays close attention to decisions in other jurisdictions means that IP case outcomes in Australia can increasingly be expected to mirror those elsewhere. This chapter highlights recent cases and changes. New exclusions from patentability? For the first time in some years in Australia, the patentability of a class of subject matter has been the focus of debate. Against the background of the Myriad Genetics decision from the US District Court of the Southern District of New York, in June 2010 an application was lodged in the Federal Court of Australia seeking revocation of the Australian patent that protects the breast and ovarian cancer marker genes BRCA1 and BRCA2 (Australian Patent 686 004). The applicant consortium includes Cancer Voices Australia, an advocacy group for cancer sufferers, and an Australian woman suffering from breast cancer. In this respect the suit mimics the construction of the case concerning the patentability of corresponding US patents owned by Myriad Genetics Inc. In that case, the patent was initially held to be invalid because the subject matter was considered unpatentable under 35 USC 101, but this was overturned on appeal. The same argument which was successful in the first US case will no doubt be made in Australia under Section 18 of the Patents Act. The four companies against which relief is sought include Myriad Genetics Inc and Genetic Technologies Ltd, which holds an exclusive licence from Myriad to exploit the patent in Australia. The pressure of public opinion forced Genetic Technologies to back away from forcing an unlicensed Australian organisation to pay royalties for using BRCA1 and BRCA2 diagnostically, and it is understood that royalties are not currently charged for the non-licensed exploitation of the patent. The case is still in the early evidentiary stages and will be watched with interest for its impact on the scope of patentable subject matter. Concurrently, the Senate Community Affairs Committee was charged with determining the impact of the granting of patents over human and microbial genes and non-coding sequences, proteins and their derivatives, including those materials in an isolated form, with particular reference to the impact that such patents have on: the provision and cost of healthcare; the training and accreditation of health professionals; progress in medical research; and the health and well-being of Australians. The committee handed down its report in late 2010 and concluded that there was no basis to recommend that the Patents Act should be amended to exclude patentability for certain genetic materials. The circumstances of the previous attempts by Genetic Technologies to derive a royalty income from its patent rights over the use of the BRCA1 and BRCA2 genes piqued the interest of several members of Parliament, who have now introduced a private members bill seeking to exclude from patentability under Section 18 biological materials including their components and derivatives whether isolated or not and, however made, which are identical to such materials as they exist in nature. The bill was sent for in-depth consideration to the Senate Legal and Constitutional Affairs Committee, which handed down its report on September 21 2011 recommending that the bill not be passed by the Senate. At the time of writing further debate on the bill has not occurred. At present, Australian patent law takes a liberal
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approach to patentability, excluding under Section 18(2) only human beings and biological methods for their generation. This liberal approach follows from the landmark Australian High Court decision in NRDC v Commissioner of Patents ((1959) 102 CLR 252), in which it was held that as long as an invention results in an artificially created state of affairs, the subject matter is patentable. The Australian scientific community is divided over whether genes should be subject to patent protection and this has been reflected in submissions to both committees. Representatives of the Walter and Eliza Hall Institute for Medical Research, which is the seat of some of the most significant Australian scientific breakthroughs in medical science and which owns patents on gene sequences, have expressed their support for gene patents. Other eminent medical practitioners, including the presidents of the Royal College of Pathologists of Australia and the Clinical Oncology Society of Australia, have spoken in favour of a ban on patenting genes. Those members of Parliament who sought an exclusion from patentability of certain biological materials remain commited to their cause. The decision of the European Patent Office in Brustle regarding stem cells will no doubt give them new ammunition. Copyright in compilations changing the rules In recent years the issue of the existence of copyright in compilations has reached the dizzy heights of the High Court of Australia (in the Ice TV decision, discussed in the Australia chapter of IP Value 2010). In another battle over this issue, in a unanimous decision in Telstra Corporation Ltd v Phone Directories Company Pty Ltd ([2010] FCAFC 149), the Full Federal Court of Australia found that no copyright subsisted under the Copyright Act 1968 in the White Pages and Yellow Pages directories published by Sensis Pty Ltd, a wholly owned subsidiary of Telstra (once the monopoly provider of telecommunications services in Australia). The White Pages and the Yellow Pages list the names, addresses, telephone numbers and other information of residential and business customers in a particular geographic region. Since October 2003 the majority of the listing information has been entered into a database automatically, with only about 15% of information entered manually. The computer system automatically checks to ensure the completeness and accuracy of the information, and that it complies with rules prescribing the font, colour scheme and word spacing and prohibiting certain words or phrases. Data from one year acts as a template for the following year. Further programs compare and update the data for the new
edition and ensure that the information is correct, properly ordered and formatted before publishing. Some manual checks are undertaken to look for errors. The computer system comprises a number of programs, few of which were created by Telstra or Sensis employees. To succeed in the appeal, Telstra needed to establish that copyright subsisted in the directories. According to the Copyright Act 1968, copyright can subsist in a compilation and the author of a literary work is the owner of the copyright in that work. A work is made when it is first reduced to a material form, whether that is in writing or another material form (eg, a computer file). Under Australian law, in relation to original works, an author must be a human. The court reduced the directory production process into three main phases: the maintenance, updating and editing of a database containing customer details (the collection phase); the extraction from that database of information for each directory and the conversion of that information into an electronic form (the extraction phase); and the typesetting of that form and the physical production of the directories (the production phase). The court considered that although there was substantial effort in the collection phase, including intellectual effort by many employees, their efforts had no influence on the actual material form of the work. Therefore, they were not authors of the work. In relation to the extraction phase, the court agreed with the primary judge that this phase was when the work was first reduced to its material form (the galley file); it was ostensibly dictated by computer programs and any human involvement merely ensured that the rules of the extraction phase programs were observed. In what some will see as a blow to copyright protection for compilations, the court held that the directories had no author and consequently no copyright could subsist in them. Getting ownership right in designs Although the Designs Act 2003 is proving to be a good means of raising revenue for IP Australia, it has not resulted in Australian designs practice entering the 21st century. At their core, the disputes that arise remain oldfashioned. Mark Collymore was employed as a factory foreman at the Metroll Queensland factory, which produces metal products such as fencing, roofing and rainwater tanks. Collymore created a design for modular water tanks that could be connected together. His employment contract
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Post-registration, amendment of the Designs Register can be difficult, given that an obvious error or mistake must be explained with corroborating support, usually in the form of a statutory declaration
was silent regarding the creation and ownership of intellectual property. Collymore registered one design in his own name and a further two designs under his company name, Courier Pete Pty Ltd. In Courier Pete Pty Ltd v Metroll Queensland Pty Ltd ([2010] FCA 735) the judge stated that it was necessary to ask what was the employee employed to do?, and concluded that: If the employee was employed to make or discover inventions of the type ultimately produced [by the company], then that is work for which the employer had paid and the employer is entitled to the benefit of the invention. If the employee does not have any general duty to invent... then the only basis upon which an invention can be said to have been created in the course of employment is if it had been created pursuant to a specific direction by the employee to undertake work which results in the creation of the invention. Metroll produced a witness who said Collymore was part of Metrolls tank-making team and who claimed to have been given instructions to create new tank designs. This evidence was found to be weak and was unsubstantiated by the rest of the team. Collymore gave compelling evidence that he had created the tank designs at home and in his own time. The judge found it significant that any work carried out at Metroll on modular water tanks occurred after Collymore had applied to register the first design. This case highlights the age-old adage that it is essential that an employer defines an employees duties clearly, and that a written employment contract states that the employees duties include invention and creativity, and that all resulting IP rights will be owned by the employer. In Extreme Kayaks & Watersports Pty Ltd v Viking Kayak International Pty Ltd ([2010] ADO 1) Viking wrote to the Designs Office requesting that the Designs Register be amended to change the name of the designer from Michael Bennett to Phillip Mergard. A reply from the Designs Office advised Viking that the designers name on the register could be changed only if there had been a clerical error or obvious mistake. Viking replied that the designer name had been written down in error. Extreme Kayaks requested revocation of the design registration on the basis that the pattern maker had been contracted to Extreme Kayaks at the time the design was created, and that Extreme Kayaks had been manufacturing the design six months before Viking applied to register the design. The hearing officer concluded that Mergard was indeed the creator of the design. However, he also concluded that there was a contract for valuable consideration between Mergard and Extreme Kayaks to create the design and moulds to produce the kayak. Therefore, he found that Extreme Kayaks was entitled to be the registered owner of the design registration. It is vital that correct ownership be determined before design registration, and preferably before filing a design application. Post-registration, amendment of the Designs Register can be difficult, given that an obvious error or mistake must be explained with corroborating support, usually in the form of a statutory declaration. Sometimes using your own name is a defence but not always Optical 88 Limited v Optical 88 Pty Limited (No 2) ([2010] FCA 1380) dealt with the use of the name Optical 88 and trade indicia in Australia for retail sales of optical goods and accessories and optometry services. The first respondents company name and trading name was Optical 88, which it began using in 1993. The applicant failed to take action against the respondents despite becoming aware of the first respondents business in 2001, and gave notice of its claims only in October 2006. The applicants marks were all composite or device marks, in which Justice Yates found the essential feature to be the name Optical 88. However, all of the applicants claims for trademark infringement, copyright infringement, passing off and misleading or deceptive conduct ultimately failed, with the end result that two of the applicants marks were ordered to be removed from the register for non-use. The first respondent succeeded in its defence of using its own name in good faith. As Yates noted, the defence bites when the use of the persons name is the
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reason for the finding of infringement (provided the use has been in good faith). The first respondents full name was Optical 88 Pty Ltd, but the defence was held to apply to use of Optical 88 alone. The case suggests that honest adoption of a company name will provide a defence to an action for trademark infringement, and that the defence applies even if the likelihood of deception is brought to the attention of the alleged infringer. Two further recent decisions have involved the use of the own name defence, both involving high-profile individuals: former racing car driver and tyre magnate Bob Jane and well-known Australian fashion designer Peter Morrissey. The Federal Court of Australia granted an injunction against Jane personally and his new companies, restraining Jane from selling or offering for sale or advertising tyres, wheels, batteries, auto accessories or services relating to the installation and fitting of vehicle wheels, tyres, batteries and vehicle parts, including under the marks BOB JANE and BOB JANE GLOBAL (Bob Jane Corporation Pty Ltd v Bob Jane Global Tyres Corporation (Australia) Pty Ltd [2011] FCA 739). Justice North rejected the argument that it would not
be misleading for Jane to use his own name because it failed to address the claim that misleading conduct would occur as a result of confusion by consumers, who were likely to draw the conclusion that the new business was associated with Janes former business. In addition, the Trademarks Office recently found against fashion designer Morrissey (M Webster Holdings Pty Ltd v Peter Morrissey Pty Ltd [2011] ATMO 23). Morrissey sought, through his company Peter Morrissey Pty Ltd, to register three trademarks, which included the name Peter Morrissey and his signature in numerous classes with endorsements that Peter Morrissey has consented to the use of his name as a trademark. Morrissey had previously sold the MORRISSEY brand to another company. That company successfully opposed the applications under Section 60 of the Trademarks Act. The hearing officer was satisfied that, given the substantial reputation of the MORRISSEY trademark for jewellery, handbags, clothing, footwear and headgear, a significant number of consumers would at the very least experience a reasonable doubt as to the existence of some sort of connection between the opponents trade mark and the applicants PETER MORRISSEY trade marks.
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Karen Sinclair Principal k.sinclair@watermark.com.au Watermark Australia
Karen Sinclair is a registered patent and trademarks attorney in Australia and New Zealand and a principal of Watermark Patent and Trademarks Attorneys. She has over 20 years experience in assisting Australian companies with the successful commercialisation of research in international markets through strategic management of their intellectual assets. Ms Sinclair is a member of the Australian Professional Standards Board and lectures on intellectual property at two major Australian universities. Her technical skills are in chemistry, microbiology and biochemistry. Mark Pullen is a principal of Watermark Patent and Trademarks Attorneys. He holds an honours degree in physics and is a registered patent and trademarks attorney in both Australia and New Zealand. He trained as a marine engineer in the Royal Navy and has also worked as a patent examiner in the UK Patent Office, as well as working within the UK rail industry. Mr Pullen brings a wealth of practical experience and breadth of knowledge to his role as a patent attorney to assist clients in protecting and managing intellectual assets within their businesses. Andrea Allan is a lawyer with Watermark Intellectual Property Lawyers and a registered trademarks attorney with Watermark. She has degrees in arts and law from the University of Melbourne, and recently completed an LLM, also from the University of Melbourne. Ms Allan has over 12 years experience as a lawyer and has assisted Australian companies, organisations, individuals and government agencies with a range of IP issues, including licensing and litigation, across a range of sectors.
Mark Pullen Principal m.pullen@watermark.com.au Watermark Australia
Andrea Allan Lawyer and trademark attorney a.allan@watermark.com.au Watermark Australia
Bruce Dowsing Patent and trademark attorney b.dowsing@watermark.com.au Watermark Australia
Bruce Dowsing is a registered patent and trademarks attorney. He has a PhD from Sydney University and 16 years of research experience in the field of neuroscience, involving use of protein chemistry, molecular and cell biology technologies. Dr Dowsing assists Australian and overseas companies with their IP protection, including IP audits and intellectual asset management advice for a large Melbourne neuroscience research institute.
Peter Hallett Director p.hallett@watermark.com.au Watermark Australia
Peter Hallett is a director of Watermark Intellectual Property Lawyers. His practice encompasses the negotiation and drafting of commercial agreements relating to intellectual property. He holds degrees in science and law (with honours) from the University of Melbourne (1991). For the past 10 years Mr Hallett has been a subject coordinator and lecturer for the University of Melbournes post-graduate course in licensing law and technology transfer.
Dorsey & Whitney LLP Cedric Lam and Monique Lee
China and Hong Kong Onwards and upwards: the fight to protect IP rights continues
China China has continued to refine its legislative framework for the protection of intellectual property. Many new and draft laws and regulations concerning different aspects of IP rights have been issued over the past year. The judiciary and other enforcement authorities have also been active. Further, despite the slowdown in the Chinese economy, patent and trademark filings have increased. Filing statistics Trademarks The Chinese Trademark Office remains the busiest trademark registry in the world. In 2010 it received over 1 million trademark applications, a record high and a jump of nearly 29% from the previous year. Its efficiency also improved almost 1.5 million applications were examined in 2010 and the turnaround time was shortened from 36 months to 12 months. Patents In the first half of 2011 over 676,000 patent applications were filed with the State Intellectual Property Office (SIPO), a 45% increase on the same period last year. There was an 11% rise in the number of foreign filings, which accounted for 9% of all applications. Over 445,000 patents were granted during the same period a 24% increase on the same period last year and 35,000 of those were foreignrelated. Domain names The number of internet users in China reached 485 million in June 2011. The number of registrations for .cn domain names dropped to 3.5 million in June 2011 as a result of the stringent registration requirements implemented since 2009. New legislation and directives Criminal enforcement In January 2011 the Supreme Peoples Court (SPC) issued an opinion regarding the handling of criminal cases of IP infringement. In particular, the opinion: established that physical evidence from previous administrative actions such as raids can be used in subsequent criminal prosecutions, while testimonial evidence such as investigators statements cannot; set down a threshold for criminal copyright infringement against website operators; clarified that the for profit requirement for copyright infringement includes profits made from posting advertisements on the infringing site; and made online service providers jointly liable if they knowingly facilitate any criminal IP infringement. Administrative enforcement Among other continuing efforts to implement the National IP Strategy, plans were announced in April 2011 regarding the launch of a special campaign for the administrative enforcement of IP rights and the issuance of guidelines on the administrative enforcement of copyright. The SIPOs new measures for the administrative enforcement of patent rights came into effect in February 2011. Key provisions included that: complainants can request the administrative authorities to collect evidence if they are unable to obtain such evidence on their own; administrative authorities (usually the local SIPO offices) should make a decision on whether to commence an investigation within five days and, if such investigation takes place, the investigation report should be issued within four months; and administrative authorities may request that a complainant provide prior art search reports from the SIPO before enforcing rights in utility model or design patents.
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An updated measure requiring all licence agreements involving Chinese patents be recorded with the SIPO took effect in August 2011. In addition, the SIPO released two draft sets of new measures in October 2011, one on the compulsory licensing of patents and the other on patent marking, for public comments. The former described the conditions and procedures for requesting, granting and terminating compulsory patent licences in China, while the latter prescribed how patentees and their licensees could label their patented products. Trademarks A further draft amended Trademark Law was released for public consultation in September 2011. The major proposals include: filing trademark applications electronically; allowing an application to cover more than one class of goods or services; protecting against bad-faith registration; restricting standing to oppose only prior right holders or interested parties will be eligible; broadening acts of trademark infringement to cover parties that knowingly assist in an infringement by providing storage, transportation or delivery services; raising the maximum statutory damages from Rmb500,000 to Rmb1 million; and refusing to award compensation without use evidence of actual use in the past three years is required before damages for infringement may be sought. Enforcement initiatives A highly successful national campaign to crack down on IP infringement and sales of counterfeit goods was concluded in June 2011. All of the major criminal and administrative enforcement authorities were involved and a wide range of activities, including cross-border infringement and online privacy, were targeted. About 156,000 cases and goods worth nearly Rmb3.5 billion ($537 million) were examined; 9,000 locations were raided and 1,700 prosecutions were brought. Three notorious infringing websites (www.qishi.com, www.5474.com and VeryCD) were shut down and two of their operators were sentenced to three to five years in prison. Despite such efforts, China remained on the Priority Watch List of the 2011 Special 301 Report prepared by the Office of the US Trade Representative, although its commitments to protect IP rights and enact measures against counterfeiting were acknowledged.
Court statistics The number of civil IP cases in China continued to grow. Around 43,000 cases were commenced and 41,700 decided in 2010 an increase of 40% and 37%, respectively, from the previous year. Almost 60% of new cases were copyright-related; trademark and patent cases accounted for around 20% and 14%, respectively. About 1,370 of the new cases involved a foreign element. A study of such cases between 2006 and 2010 concluded that the success rate for foreign litigants was more than 55%, a figure supportive of the claim that the Chinese courts protect the interests of foreign IP owners just as vigilantly as those of their domestic counterparts. Notable cases The SPC has been busy issuing new precedents in IP cases. In 2010 it heard 313 and decided 317 IP cases. These cases highlighted for IP owners the importance of securing their IP rights early and putting in place contractual safeguards in order to avoid surprises when enforcing those rights in China. Unfair competition In Shanghai M&G Stationary v Ningbo Weiyada Pen Manufacturing the SPC settled a longstanding debate when it held that the shape of a product would be eligible for protection under the Anti-unfair Competition Law even if it had been the subject of an expired design patent, provided that the shape was nonfunctional and so distinctive that it had acquired secondary meaning (eg, where consumers would immediate associate the product with a particular source). Trade secrets and know-how One of the most controversial decisions affirmed by the SPC last year was the Seaweed Quota case, where it was held that steps taken by an employee to start a competing business before departure would not necessarily contravene the Anti-unfair Competition Law in the absence of a non-compete agreement. The court further held that employees might freely exploit any non-confidential know-how acquired during their previous employment. Although not an SPC case, a first instance decision concerning the dispute between Pepsi and its former joint venture partner Tianfu also grabbed headlines last year. The joint venture agreement between the parties was silent on the ownership of trade secrets and knowhow relating to recipes and manufacturing methods of beverages developed by Tianfu and used by the joint venture. The court held that Tianfus permission for the
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joint venture to use the trade secret was a mere licence and therefore, after Tianfu sold its interest in the joint venture to Pepsi, the implied licence ended and the latter could no longer freely use the trade secrets and knowhow. Trademark The SPC issued a significant trademark ruling of which all brand owners in China should be aware. In Sony Ericsson it was held that a party associated with a widely known unregistered mark would acquire no interest in the mark if it had never intended to adopt such mark, and passive use of the mark by others in referring to the associated party no matter how extensive would not be sufficient to establish lawful rights in the mark for the associated party. Sony Ericsson was thus unable to assert ownership right against a third party which sought to register an abbreviated Chinese name commonly used by the local media to refer to the telecommunications giant. Brand owners should take proactive steps to register names coined by the Chinese public to identify them or their products in order to pre-empt any undesirable trademark squatting activities in China. Method patent The SPC clarified the scope of protection afforded to products manufactured using a patented method in Zhang v Ouyi Co. A distinction was made between original products (ie, products made directly from performing a patented method) and subsequent products (ie, those obtained from further processing of original products); the court held that only original products were protected. Design patent In Honda the SPC refined the test for determining identity or substantial identity for the purpose of assessing design patent infringement. It directed the lower courts to focus on the decorative details that consumers would pay attention to, rather than the overall design common to the products in a specific category, as consumers would be more attracted to those details. Outlook The number of IP filings in China has been growing at a rapid pace and Chinese courts and other enforcement authorities have been delivering more meaningful results for IP owners. As a result, the Chinese IP landscape has become more litigious. In fact, Chinese courts are now seen as a strategic forum for resolving IP disputes between foreign parties because an IP lawsuit can disrupt
a competitors production of goods in China. Another emerging trend is that Chinese parties are no longer content with always being the defendants in IP lawsuits. With the increasing awareness of the competitive and financial advantages of IP ownership, and fuelled by record damages and settlement amounts received by Chinese parties (eg, Chint Group v Schneider Electric), many local IP owners are now ready to take on multinational companies. This trend will continue so that more hunters will become the hunted in the Chinese IP jungle. Hong Kong The local legislature has been busy considering and passing a number of IP-related laws in the past year, which should make Hong Kong a more attractive venue for carrying out IP transactions and enforcing IP rights. Shadow companies The Companies Registry has been plagued by companies formed in Hong Kong using names that are identical or confusingly similar to famous marks or names of others. These shadow companies have been giving IP owners a serious headache for several years. A legislative solution to this problem finally arrived in December 2010: among other things, the registrar of companies is now empowered to act on a court order to direct a shadow company to change its name or to substitute a noncompliant company name with its registration number. This and other new measures are expected to provide IP rights holders with more efficient and effective means of curbing abuses of the company name registration system. Copyright bill In June 2011 the Copyright (Amendment) Bill 2011 was tabled at the Legislative Council after almost five years of public consultation. The major proposed changes were summarised in the China and Hong Kong chapter of IP Value 2011. One of the most controversial provisions in the bill is the introduction of a safe harbour to limit the liability of online service providers for copyright infringement if they comply with certain prescribed conditions, including the guidelines and procedures laid down in a code of practice. A draft code was released in August 2011 for public comments and many IP owners criticised the fact that the proposed mechanisms stop short of deterring online copyright piracy. Patent reform In October 2011 the Hong Kong government issued a consultation paper putting forward a number of
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fundamental reform initiatives relating to the patent system. Two key proposals are replacing the current reregistration system with an original grant regime and regulating the local patent agency services providers. Tax incentives for IP transactions The Inland Revenue (Amendment) Bill, gazetted in February 2011, proposed to implement new tax incentives for the acquisition of IP rights to encourage
businesses to diversify and expand their IP portfolio. In addition to the existing deductions available for acquiring patents and know-how, expenses incurred in purchasing copyright, trademarks and designs would also qualify as deductible capital expenditures. Removal of the restriction that the IP rights acquired must be used in Hong Kong is another significant proposal. These changes will be closely watched by IP owners who plan to establish IP holding companies in Hong Kong.
Cedric Lam Partner lam.cedric@dorsey.com Dorsey & Whitney LLP Hong Kong China
Cedric Lam leads the IP team in Dorseys offices in Greater China and coheads the firms operations in Hong Kong. He has more than 15 years experience in counselling IP transactions and implementing IP protection strategies. Mr Lam is also experienced in anti-counterfeiting and other enforcement matters, and has served as Asia-Pacific regional counsel of an international IP collective.
Monique Lee Attorney lee.monique@dorsey.com Dorsey & Whitney LLP Hong Kong China
Monique Lee is an IP attorney in the Hong Kong office of Dorsey and Whitney. Her practice focuses on IP matters in Greater China and the United States, and she has handled a wide array of contentious and noncontentious IP matters. Ms Lee is a member of the New York Bar and a registered foreign lawyer in Hong Kong.
Anand And Anand Advocates Nishchal Anand and Tanvi Misra
India Extending celebrity status to IP rights

Legendary Bollywood actor Amitabh Bachchan recently lent his voice to an unusual IP rights case in the media and entertainment industry. He spoke out against the unauthorised use of a soundalike of his distinctive deep baritone in an advertisement promoting a brand of gutka (chewing tobacco), an association which was detrimental to his image. Previously, Rajnikant, another legendary actor from the South Indian film industry, issued a legal notice warning against the imitation of his persona and character traits for commercial gain, including unauthorised advertisements, before the release of his film Baba. The legal notice published in various leading regional and national newspapers was an assertion by Rajnikant of his personality rights. While Indian celebrities have intermittently attempted to protect their personality rights, the law on this aspect has taken a long time to develop. There have been many occasions some publicised, others not where a celebrity in India has been aggrieved by the unauthorised use of his or her name, likeness, voice, persona or other distinct personality trait. India has rapidly evolved into a consumer-driven market, with products advertised and promoted through every modern technology. Although advertisements and promotional gimmicks make concerted efforts towards establishing strong emotional bonds with consumers, the surest way to reach out to the masses is through celebrity endorsement of a product. With so many brands being endorsed by personalities, market forces are making it impossible for India to continue its laidback approach towards regulating the exploitation of personality rights and enforcing such rights effectively. The right to publicity is defined as the exclusive right of a celebrity to the profits made through the exploitation of his or her fame and popularity for commercial purposes. The right to exploit the economic value of a name, as measured by the fame and recognition earned by the individual, is a publicity/merchandising right. Personality rights are often lost within the area of privacy law, which makes the effort to regulate them objectively an overwhelming task. Following the global trend, the right to publicity in India has developed primarily through case law. Recent judgments in this relatively unexplored field signal a growing acceptance of the recognition and protection of the commercial value of an individuals name and personality traits. The development of personality rights is based on an increased interface with IP law. Relevant law Some jurisdictions have codified laws for personality rights, an example being the Californian Celebrities Rights Act 1985. In France, personality rights are recognised under Article 9 of the Civil Code. Most common law countries, including England and Wales, Australia, Canada and India, have no special legislation recognising personality rights. As a result, the Indian legislature has applied a variety of legal concepts to protect personality rights of individuals and corporations. These include the following. Article 21 of the Constitution This article recognises the international covenant of the right to life and personal liberty. This can be interpreted liberally to include a persons right to protect his or her name, persona or anything emanating from these. Trademarks Act 1999 While a trademark in a name or a corporate name is the most commonly recognised form of intellectual property, other forms emanating from a personality and duly recognised under the Indian trademark legislation have not been exploited at all. A prime example is the recognition of sound marks under Section 2(1)(zb) of the act. The voices of a host of celebrities, including actors, sportspersons, politicians and singers, are mimicked in order to promote products, services and events through various media. However, this provision is little known and so little used.
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Copyright Act 1957 Rights such as moral rights and performers rights. which have some elements of personality in them, are protected by statute. However, as applied at present, such rights are devoid of any aspect of branding that might be attached to a personality. How far protection under the copyright regime could be extended in order to regulate and enforce personality rights is still unexplored. Common law rights against passing off In the absence of any specific law on personality rights, one remedy is to claim passing off against any party which attempts to impersonate a right. India is increasingly recognising and extending this concept to encompass personality rights. Recent case law While courts in more developed jurisdictions have often considered the concept of personality rights, in India this issue is still in the early stages. The Indian courts have had limited opportunity to deliberate on the issue of personality rights and its importance in branding. However, initial tests based on the fundamental legal concepts discussed above are paving the way for increased recognition of the rights emanating from a personality. Three recent decisions of the Delhi High Court address different aspects of personality rights. Rights in an individuals personality In Jaitley v Network Solutions Private Limited ([181(2011)DLT716]) political leader Arun Jaitley sought a permanent injunction to restrain the defendants from misusing the domain name arunjaitely.com, and to order the immediate transfer of such domain name. Jaitley wished to register the domain name arunjaitley.com, which the defendants had already registered. On learning of this, Jaitley wrote to the defendants requesting the transfer of the domain name, as it had not been renewed and was pending deletion. In response, the defendants asked the plaintiff either to wait for the domain name to be deleted for non-payment or to make a certified offer to purchase the domain. It was alleged that after expiration of the domain name, the defendants did not delete it or transfer it to the plaintiff, but rather transferred it to an auction site for domain names (the third defendant). An interim injunction order granted by the court restrained the transfer, alienation or offer for sale of the domain name arunjaitley.com to any third party and the creation of any third-party interest therein. It was
contended that as far as individual persons or eminent personalities are concerned, their identity is established in the virtual world of the Internet. Therefore, it is incumbent to protect domain names so that the identified names of companies and individuals which are distinct in the marketplace may not fall into the hands of individuals who have no genuine link to those names. Furthermore, in order to prevent cybersquatting or trafficking or trading in domain names or marks, trademark law has been stretched to cover the Internet and domain names may be protected just like trademarks. The name Arun Jaitley fell within the category of personal names that have acquired a distinctive connotation or identity of their own. Therefore, due to its distinctive nature and popularity in several fields, the name had become a well-known personal name or mark under trademark law, thus enabling Jaitley to restrain others from using his name unjustifiably, in addition to his personal right to sue them for the misuse of his name. Rights in a corporate personality In Tata Sons Ltd v Chak ([CS(OS) No 392 of 2004]) the defendant sent out mass emails posing as an institution fighting against cancer with the endorsement of Tata Sons Ltd, its chairman Ratan Tata and its domain name tata.com. The defendant had been sending out emails requesting donations for three years before Tata found out about his activities. Tata is a well-renowned and well-respected company, both in India and internationally. Chairman Ratan Tata enjoys a similar reputation, both in association with the company and separately. Tata contended that it was in no way associated with the defendant; nor did it endorse the contents of the defendants emails. It further contended that the defendant had made multiple misrepresentations by putting the email into wide circulation, thereby sending out a false message which would be understood by a significant number of recipients as an endorsement, recommendation or approval by the plaintiff of the defendants activities. In fact, Tata received various queries about the email, thus proving the confusion caused among the public. Tata claimed that a person reading the email would be deceived into thinking that Tata had examined the defendants activities and supported them. That person would further be induced to believe that the company had lent support to the defendant by allowing it to use the Tata name in the emails. Another contention was that the public, which would not otherwise take such a representation seriously, might do so due to the
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mention of the names of Ratan Tata and the Tata group, and thus might be induced to forward the email or make a donation. The court agreed with Tatas contentions and injuncted the defendant from circulating any misleading material bearing the endorsement of Tata, the name of its chairman or its domain name. Rights in an individuals personality when represented through a company In DM Entertainment Pvt Ltd v Baby Gift House ([ CS(OS) 893 of 2002]) the plaintiff company was incorporated in 1996 to manage the career of popular singer Daler Mehndi. The plaintiff had also been assigned all rights, title and interests in Mehndis personality inherent in his right of publicity, along with his trademark DALER MEHNDI. The defendant had a successful business selling dolls bearing Mehndis likeness and singing voice, and consequently cashed in on his popularity. Aggrieved by the defendants unlawful acts, the plaintiff filed for a permanent injunction restraining the defendant from infringing the artists right of publicity and the false endorsement leading to passing off. It was contended that the unlicensed use of Mehndis persona by any party would leave a false impression on the public that the product or services originated from Mehndi, his sponsors or licensors, and that as such, the defendants activity constituted an act of false endorsement and passing off. The use of Mehndis persona to capitalise on his name by using it in conjunction with a commercial product was not proper or legitimate; rather, it amounted to a clear dilution of the uniqueness of such personality and gave rise to a false belief either that the plaintiff has licensed such use or that the defendant had a connection with Mehndi which allowed it to use its exclusive right to market images of the artist. In view of these arguments, the court granted the plaintiff a permanent injunction against the defendant, as well as ordering damages.
Rights in an individuals personality assigned to a corporate for the endorsement of their products In Titan Industries Limited v Ramkumar Jewellers ([CS(OS) 2662 of 2011]), the plaintiff had asked celebrity couple Amitabh Bachchan and Jaya Bachchan to endorse and advertise its range of diamond jewellery sold under the brand name Tanishq. The couple had assigned all the rights in their personality to the plaintiff to be used in advertisements in all media, including print and video. The plaintiff had invested huge sums of money in the promotional campaign. The defendant, a jeweller dealing in identical goods to those of the plaintiff, was found to have put up a hoarding identical to the plaintiffs, including the same photograph of the celebrity couple displayed on the plaintiffs hoarding. Since the defendant had neither sought permission from the couple to use their photograph, nor been authorised to do so by the plaintiff, the court held it liable not only for infringement of the plaintiffs copyright in the advertisement, but also for misappropriation of the couples personality rights. The court thereby granted an interim injunction in favour of the plaintiff while specifically recognising the couples rights in their personalities. The future India has finally begun to address the multi-dimensional concept of personality rights. The increase in the number of exorbitant endorsement deals being signed by famous personalities signifies that tremendous value is attached to such endorsements. If such commercial value in a personality is appropriated by persons who are not authorised to do so, should the personality not be granted the right to sue for such embezzlement? As a result, it is becoming legitimate to determine a personality right in India. With several jurisdictions, such as the United States and the United Kingdom, exonerating the personality rights of celebrities, it may be time for India to push further for judicial and legislative recognition of this concept and to develop a holistic approach to address it.
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Nishchal Anand Associate nischal@anandandanand.com Anand And Anand Advocates India
Nishchal Anand is an associate in Anand And Anands litigation department. He graduated with a BBA, LLB (hons) degree from Symbiosis Law School, Pune in 2009 and has been with the firm since graduating. His areas of practice include general IP litigation, with particular emphasis on software anti-piracy and enforcement and anti-counterfeiting actions. In addition to general trademark and copyright law advice, he advises clients on issues pertaining to parallel importation, cyber laws, data privacy, advertising and packaging laws, publicity rights and prevention of corrupt practices.
Tanvi Misra Associate tanvi@anandandanandcom Anand And Anand Advocates India
Tanvi Misra is an associate in Anand And Anands litigation department. She graduated with a LLB (hons) degree from Amity Law School, Indraprastha University in 2009 and has been with the firm since March 2010. Her areas of practice include general IP litigation with a special focus on copyright and trademark-related issues. In additional, she advises clients on various copyright issues encompassing publicity and personality rights.
Nishimura & Asahi Hitomi Iwase and Yoko Kasai
Japan Recent amendments to the Patent Act

Introduction As technology has become more sophisticated and complex in recent years, companies can no longer rely solely on their own development activities. In order to speed up the development of new technologies and introduce to the market value-added products using such technologies, the use of outside resources is inevitable. Thus, there has been a trend towards open innovation, which is where a number of companies share technologies for research, development and production. In order to respond to the changes in the innovation environment and to enhance the user-friendliness of patent procedures, on June 8 2011 the Act on Amendment of the Patent Act was promulgated; it is scheduled to come into force within one year. Although from time to time the Patent Act has been amended (the last being in 2008), the latest revisions are relatively major and have a significant impact on the practice and business of using patents or patented technologies. The key points of the amendments are as follows: enhancement of the protection afforded by a regular licence; a remedy for misappropriated applications; the restriction of retrials; and expansion of the exception for loss of novelty. This chapter considers these changes, focusing on the amendments to the regular licence system. Enhanced protection of regular licence The licence system set out under the Patent Act is one of the most difficult parts of Japanese IP law to understand, especially for non-Japanese parties. Under the act, there are two types of licence: a registered exclusive licence (senyo jisshiken), and a regular licence (tsujo jisshiken, the literal meaning of which is regular licence, but which in practice is often translated as non-exclusive licence, which complicates matters). The two licences differ as follows: A registered exclusive licence guarantees exclusivity under the Patent Act, while a regular licence has no exclusivity under the act. Although it can be exclusive if agreed by the licensor and the licensee, since such exclusivity cannot be registered, it is merely based on the agreement of the licensor and the licensee. The exclusivity of a registered exclusive licence is strong and, if granted, even the licensor cannot work the patented invention without the licensees consent. In contrast, the licensor of a regular licence can work the patented invention, unless it is restricted from doing so under the licence agreement. The licensee of a registered exclusive licence can seek an injunction or compensation for damages against the infringer of the patent (within the scope of the licence), while in principle, the licensee of a regular licence cannot seek an injunction or compensation for damages. Registration is necessary in order for a registered exclusive licence to take effect, and the licensor is obliged to cooperate with the registration. Registration is not necessary for a regular licence to take effect; however, under the current Patent Act, it can be registered. If registered, a regular licence can be asserted against those that are assigned the patent or those that are granted a registered exclusive licence. Furthermore, the licensor is not obliged to cooperate with the registration if the licensee wants its licence to be registered, it should expressly include in the licence agreement the obligation of the licensor to cooperate with the registration.
The 2011 amendments target the registration system for a regular licence. As explained above, since the exclusivity of a regular licence (even if agreed) cannot be guaranteed under the patent system, regular licences can exist in an overlapping manner. Unless bound by an agreement, a patentee can grant regular licences for the same content to multiple persons
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without the licensees consent. When a patentee assigns the patent right, it need not obtain consent from a licensee. Under the current Patent Act, a regular licensee cannot assert any right against the new patent owner without registration of the regular licence (a registered exclusive licence is always registered; thus, the licensee can assert its right against the new patent owner). Since registration of the regular licence is a requirement for asserting the licensees rights against those that are assigned the patent or those that are granted a registered exclusive licence, an unregistered regular licensee would be at risk of being the target of an injunction or a damages claim from subsequent third parties. In addition, under the Bankruptcy Act, in the case of bankruptcy of a licensor the bankruptcy trustee cannot terminate a licence agreement where the licensee has registered the regular licence. Therefore, the trustee can only sell the patent right subject to the licence. However, the trustee may terminate a licence contract and may sell the patent right without a licence where the licensee has not registered the regular licence. Although a regular licensee always faces the risk of suddenly being unable to use the patented invention, the registration system for regular licences has not been widely used. In fact, for several years the number of registrations for regular licences has been extremely low (around 200 to 500 each year). The registration system for regular licences has not been widely used for the following reasons: The procedure and its cost are burdensome. In many cases the parties do not want to disclose publicly the existence and contents of the licence agreement. In comprehensive cross-licensing agreements the target patent rights are not identified by a patent number. Since the registration system is basically designed for registration by patent number, comprehensive cross-licences cannot, or are difficult to, be registered under the Patent Act. Both the licensor and licensee are required to apply for registration; however, a regular licensee has no right to demand that a licensor cooperate with registration. Previously, since sales of patent rights were infrequent and the owners of licensed patents were usually large companies which rarely went bankrupt, the protection of licensees was not a major issue. However, in recent years there have been cases where large companies have become bankrupt and small or mediumsized companies, including start-ups, sometimes hold
the key patent right. Under the current Patent Act, companies often hesitate to obtain licences from small or medium-sized companies with a fragile management base, since there is a risk of becoming unable to use the patented invention and suffering significant loss. Therefore, it is difficult for a small or medium-sized company with unique or cutting-edge technology to grant a licence under this system the system itself is the cause of the patent cycles inefficiency. In addition, given that other countries (eg, the United States and Germany) have systems where a licensee can assert its right against a patentee without registration, the registration system in Japan has been a problem in light of the international harmonisation of the patent system. As it is now common for licences to be granted globally, such harmonisation is important from a practical viewpoint. In order to remedy the problems in the system and to protect the position of regular licensees, there have been various attempts to improve the registration system. In 2007 the registration system for a regular licence under a comprehensive cross-licensing agreement was introduced. Subsequently, in 2008 the Patent Act was amended and some items (ie, the name and address of the licensee, the scope of the licence and the licence fee) were removed from the list of publicly disclosed items, so that it would be easier to register a regular licence. However, despite these attempts, the number of registrations under the new system has remained extremely low. Therefore, the amendments introduce a system in which a licensee can assert its right against third parties without registration in order to protect regular licences properly and to secure the stability and continuity of companies businesses. Accordingly, in the case of the bankruptcy of a licensor, the bankruptcy trustee will be unable to cancel a licence agreement where the licensee shows the existence of a regular licence agreement, even if the licensee has not registered that regular licence. The amendments will abolish the current registration system for regular licences under the Patent Act. Similar amendments were made to the Utility Model Act and the Design Act, which have similar licence systems; however, the trademark licence system has not been amended. Since the above amendment to the regular licence system will make significant changes to licence practice, new legal issues may arise, which should be closely monitored. In addition, when obtaining a patent right from others (through a merger or otherwise), it will become more important to check the existence of the regular licence agreements carefully during due
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diligence, since the buyer may be unable to confirm the existence of the regular licence through checking the registration, as well as ensuring that the licence has proper representations and warranties and an indemnity clause. Remedy for misappropriated application Under the Patent Act, the person that originally makes an invention acquires the right to obtain a patent in that invention this is known as the inventor system. A patent right itself is not automatically granted to the inventor, but is granted to the inventor that files the application first. Under the inventor system, only the true inventor and the successor to the true inventors right can obtain a patent. As a matter of course, the inventor system principle prevents a patent from being granted to a person that files another persons invention without succeeding to the right to obtain a patent for that invention. Such a filing by a person that does not have the right to file a patent application is called a misappropriated application. In addition, where multiple persons jointly make an invention, the inventors rights are shared among all of the inventors; accordingly, only those that jointly own the rights can file a patent application for the invention. Therefore, if just one of the joint owners of the rights opposes the filing, the other owners cannot file a patent application for the invention. In recent years, as it has become increasingly common for multiple companies or universities to be involved in joint research and development projects, it has become more difficult to ensure that all involved apply jointly for the patent right on an invention resulting from such a project. For instance, one or more parties may opt to apply without the involvement of the other parties, or there may be a dispute as to whether the invention is a direct product of the joint research and development in question. However, under the current Patent Act, although a misappropriated application constitutes a reason for refusal and a reason for invalidation after registration, there is no provision for a right to demand the return of the right in the patent. Therefore, if the patent right is obtained by some of the joint inventors, the remedy available to the remaining joint inventors could be limited to invalidation of the patent right. The case law as to whether the true rights holder would be able to demand that the person that filed the misappropriated application return the patent to it is unclear. The lack of clarity as to whether a patent could be transferred to the true rights holder in order to remedy a misappropriated application was particularly
troublesome for jointly developed inventions, where an unscrupulous party may register for patent protection without the other contributors consent. The Japan Patent Office (JPO) has estimated that approximately 95% of businesses or universities have contributed towards the development of an invention jointly with another party and, problematically, approximately 40% of these entities have had a jointly developed invention registered without their consent. On the other hand, a system that allows the true rights holder to demand that the person that filed the misappropriated application return the right to obtain the patent has been adopted in Germany, the United Kingdom and France. In response to the problems with the current system and requests from industry, the 2011 amendments clarify the remedies available for claims involving a misappropriated application by permitting true rights holders to request the return of patent rights granted pursuant to a misappropriated application. Double track and restriction of retrial Under the Patent Act, regarding litigation concerning the infringement of a patent right, where it is held that a patent should be invalidated, the patentees right may not be exercised against the adverse party. Therefore, the rights holder must defend the validation of the patent in two procedures: a trial for invalidation and an infringement lawsuit (known as the double track issue). Thus, it is possible for different judgments to be issued in the trial and the infringement lawsuit. An appeal may be entered by filing an action for retrial against the final judgment in an infringement lawsuit, where the JPOs decision in which the final judgment was based has been modified by a subsequent invalidation trial decision by the JPO under the Civil Procedure Code. Although the parties involved in the infringement lawsuit have the right to challenge and defend the validation of the patent in the lawsuit, the current retrial system has been criticised for resurrecting disputes, thereby harming their resolution and business stability. Therefore, the 2011 amendments will prohibit parties to a patent infringement lawsuit for which the court has issued a final judgment from filing a subsequent claim with the JPO asserting the invalidity of the patent. Extension of grace period In general, under the Patent Act, once an invention is publicly known it loses its novelty and ceases to be
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patentable. The act provides that academics can disclose their inventions in writing only at seminars and conferences hosted by groups specifically approved by the JPO; otherwise, their inventions are deemed to have lost their novelty and to be unpatentable. The 2011 amendments will expand on the exception to this general rule by providing that an invention will not be deemed to have lost its novelty where the invention is disclosed by a person with the right to obtain a patent for such an invention and the application for the patent to the invention is filed within six months of the disclosure date. The 2011 amendments seek to encourage academic
discussion by expanding the disclosure exemption to allow inventors to maintain the novelty of their inventions. Conclusion In addition to the changes discussed above, the 2011 amendments will introduce other improvements to the Patent Act, such as the extension of the period for a patent fee reduction or exemption. However, under the new system, including those mentioned above, there remain various issues whose impact cannot be predicted, and which therefore should be monitored closely.
Hitomi Iwase Partner h_iwase@jurists.co.jp Nishimura & Asahi Japan
Hitomi Iwase is a partner at Nishimura & Asahi, specialising in copyright, patents, trademarks and trade secrets in multiple business sectors, including information technology, life sciences and healthcare, energy, entertainment, financial services, e-commerce and retail goods. Ms Iwases expertise encompasses all forms of transactional work, including licensing, strategic alliances, joint development, asset transfers, financing and development of IP portfolios and prosecution strategies. She obtained an LLM from Stanford Law School and an LLB from Waseda University.
Yoko Kasai Associate yo_kasai@jurists.co.jp Nishimura & Asahi Japan
Yoko Kasai is an associate at Nishimura & Asahi. Ms Kasai received her BS in pharmaceutical sciences from the University of Tokyo in 2005. She received her JD from the University of Tokyo, School of Law in 2008 and was admitted to the bar in 2009. Ms Kasai specialises in intellectual property, including patents, copyright, trademarks and unfair competition. Her practice focuses on pharmaceuticals, biomedical sciences, chemicals, information technology, entertainment and e-commerce.
Shook Lin & Bok Michael Soo, Lin Li Lee and Bee Yi Lim
Malaysia Courts tackle key issues: jurisdiction and broadcasting rights

This chapter explores two key decisions in Malaysian IP law: Yong Teng Hing B/S Hong Kong Trading Co v Walton International Ltd, a decision handed down by the Federal Court, the highest Malaysian appellate court, on jurisdiction; and MediaCorp News Pte Ltd v MediaBanc Sdn Bhd ([2010] 6 MLJ 657), a rare High Court decision on the issue of copyright in broadcasting. In Walton International it was held for the first time that the Registrar of Trademarks is not akin to a subordinate court and therefore its decisions do not carry the status of a court decision. Thus, when the High Court hears an appeal against a decision of the Registrar of Trademarks, the court is exercising its original rather than its appellate jurisdiction. This decision is significant for the development of trademark law in Malaysia. In MediaCorp News the High Court held that foreign broadcasts received in Malaysia are protected under the Copyright Act 1987, but are not caught by the Communications and Multimedia Act 1998. This is one of few broadcasting cases to have considered both copyright and communications law issues. Walton International Ltd Facts Walton, the owner of the mark GIORDANO, filed an opposition against Yongs application to register GIORDANO in respect of optical goods and sunglasses in Class 9. The application was dismissed by the Registrar of Trademarks. Walton filed an appeal to the High Court, which was dismissed on the grounds that, among other things, Yong was the first user of the GIORDANO mark in Class 9. Walton had no reputation or goodwill in the mark in connection with Class 9 goods as the goods sold by Walton and bearing the GIORDANO mark (mainly articles of clothing, leather goods and fashion accessories) were not goods of the same description as optical goods and sunglasses. Walton later filed an appeal with the Court of Appeal, which overturned the concurrent findings of the High Court and the registrar. The applicant applied for leave to appeal to the Federal Court, but Walton argued that the application should be dismissed without considering the merits, since a Court of Appeal decision hearing an appeal from a decision of a High Court exercising appellate jurisdiction is non-appealable to the Federal Court. Thus, the question before the Federal Court was whether the High Court, in hearing an appeal from the decision of the Registrar of Trademarks, was exercising its original jurisdiction or its appellate jurisdiction. Preliminary objection In its preliminary objection, Walton submitted that the decision of the registrar was akin to a decision of an inferior or subordinate court, and therefore the High Court was exercising its appellate jurisdiction in deciding the matter. Therefore, the final appeal should rest with the Court of Appeal under Section 96(a) of the Court of Judicature Act 1964. In response, the applicant contended that the proceeding before the High Court was an exercise of its original jurisdiction as the registrar was not an inferior or subordinate court. Decision Federal Court jurisdiction The Federal Court dismissed Waltons preliminary objection on four grounds: The appellate jurisdiction of the High Court applies in respect of decisions of subordinate courts. The Registrar of Trademarks is not a subordinate court under any statutory provision, and as such a decision of the registrar is not a decision of a subordinate court. When hearing an appeal against a decision of the registrar, the High Court is exercising its original
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jurisdiction. The word appeal in a statute does not necessarily mean an appeal as ordinarily understood it depends on the context in which it is used.
Section 96(a) of the Court of Judicature Act provides that an appeal shall lie from the Court of Appeal to the Federal Court with the leave of the Federal Court from any judgment or order of the Court of Appeal on any matter decided by the High Court in the exercise of its original jurisdiction. In other words, where the High Court exercises its appellate jurisdiction (ie, appeals arising from the subordinate courts), the matter ends at the Court of Appeal and there can be no appeal to the Federal Court. Status of Registrar of Trademarks The Federal Court held that the registrar was not a subordinate court based on statutory and case law. One example cited by the Federal Court is the express establishment of the Sessions Court, the Magistrates Court and the Penghulu Court by the Subordinate Courts Act 1948. The Registrar of Trademarks is not a subordinate court under this act. Under common law principles stemming from judicial decisions, the general rule is that only the Sessions Courts and the Magistrates Courts constitute subordinate or inferior courts. High Courts jurisdiction The Federal Court held that when the High Court hears an appeal from the decision of the Registrar of Trademarks, it is exercising its original jurisdiction. Since the registrar does not fall within the definition of a subordinate court, the High Court cannot be said to be exercising appellate jurisdiction when hearing an appeal from a decision of the registrar. Another important point noted by the Federal Court is that under Section 67 of the Trademarks Act 1976, the High Court has and exercises the same discretionary powers as the registrar in any appeal from a decision of the registrar. This further supports the proposition that the High Court exercises original jurisdiction when hearing appeals from the registrar. It is analogous to a High Court judge hearing an appeal from the decision of a senior assistant registrar attached to the High Court. Thus, the High Court, in hearing appeals from the registrar, does not exercise its appellate jurisdiction, but instead exercises its original jurisdiction in its supervisory capacity and in tandem with Section 67 of the Trademarks Act.
Appeal The Federal Court also referred to judicial pronouncements of the Australian courts on the interpretation of the word appeal under procedural rules. In Committee of Direction of Fruit Marketing v. Australian Postal Commission ((1979) 25 ALR 221) the Federal Court of Australia held that mere usage of the word appeal does not mean that it must be an appeal process as ordinarily understood. The context of its usage and the overall scheme of the particular statute must be taken into account. In Poletti v Deputy Commissioner of Taxation ((1994) 124 ALR 373) the Federal Court of Australia made it clear that appeals from federal administrative tribunals, although stated to be appeals, are not appeals in the strict sense of the word. For the reasons mentioned above, the preliminary objection raised by Walton was dismissed. MediaCorp News Facts MediaCorp News Pte Ltd is a Singaporean broadcasting and media group which produces and delivers information and news to the public through television, radio, newspapers, magazines, films and out-of-home media. MediaBanc Sdn Bhd is a group of companies incorporated in Malaysia that functions as a monitoring agency which collects, compiles and catalogues, among others, television and radio news programmes and newspaper and magazine advertising in a database. MediaBanc then sells the information (eg, selected footage or media clips taped off air from various television stations) to third parties which require information on what is said about them, their competitors or their products in the mass media. The provision of these media programmes gave rise to the dispute. MediaCorp claimed that the recording, reproduction or sale of media programmes by MediaBanc without its permission amounted to copyright infringement. It claimed that it suffered loss because it also sold video clips and sound clips to generate income. However, MediaBanc sold the clippings at a much lower rate, as MediaCorp had to factor production costs into its prices, while MediaBanc had no such costs. MediaCorp further stated that confusion would arise among the general public, resulting in them placing orders for video clips with MediaBanc instead of MediaCorp. MediaBanc denied copyright infringement and maintained that even if there was copyright infringement, its restricted use of the data as a monitoring agency amounted to fair use within the purview of Section 13 of the Copyright Act 1987.
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Since the registrar does not fall within the definition of a subordinate court, the High Court cannot be said to be exercising appellate jurisdiction when hearing an appeal from a decision of the registrar
Copyright ownership On the issue of whether MediaCorp had established copyright ownership in the news programmes, the court held that the news programmes were works eligible for copyright and, by virtue of Section 59A of the Act, the broadcasts from Singapore enjoyed protection under the Copyright Act. Section 59A provides that the minister may make regulations applying any provision of the act to a specified country, including broadcasts transmitted from that specified country, as it applies to broadcasts transmitted from Malaysia. MediaCorp had affirmed a statutory declaration claiming to be the copyright owner of the television news programmes in accordance with Section 42 of the act. The court stated that the declaration amounted to prima facie proof of copyright ownership in the television news programmes, and the onus to rebut this shifted to MediaBanc. Although relatively rare, in this case the court allowed MediaCorp to reopen its case after submissions had commenced at the close of trial. MediaBanc submitted that MediaCorp had failed to adduce evidence on copyright ownership of the television news programmes because MediaCorp had failed to produce samples of the original works. In response, MediaCorp submitted that the copyright ownership vested in MediaCorp was an agreed fact. However, MediaCorp applied to reopen its case to adduce evidence proving that copyright ownership subsisted in them. The court allowed MediaCorps application to reopen the case in the interests of justice so as to avoid the claim from being adjudicated without a full consideration of the issues raised in the course of the matter. Having succeeded in reopening its case, MediaCorp tendered a statutory declaration enclosing the original works for the broadcast of MediaCorps television news programmes to enable the court to compare the original works and the infringing copies. MediaBanc challenged the statutory declaration on
the basis that it contained typographical errors, but the court declared it to be still valid as the declarant had previously set out the full picture on the subsistence and devolution of the copyright. Contravention of communications and multimedia law? The court also considered whether MediaCorp had contravened the Communications and Multimedia Act 1998 by not possessing the relevant licence to broadcast in Malaysia, as contended by MediaBanc. It held that the act was inapplicable to MediaCorp as the broadcasts came from Singapore and were involuntarily caught in parts in Malaysia. However, MediaCorps television news programmes still fell within the purview of Section 10 of the Copyright Act and were eligible for copyright. The court reasoned that even if MediaCorp had contravened the Communications and Multimedia Act, the act had not deprived MediaCorp of its entitlement to broadcast copyright protection. In concluding that MediaBanc had infringed MediaCorps copyright, the court found that MediaBancs acts of recording, compiling, archiving, compressing, editing, reproducing and distributing, whether for sale or otherwise, amounted to a substantial reproduction of MediaCorps television programmes. MediaBancs defence MediaBanc had submitted that its relatively restricted use of such data as a monitoring agency amounted to fair use within the purview of Section 13 of the Copyright Act. MediaCorp argued that MediaBanc could not rely on the defence of fair use or fair dealing because it had recorded entire news programmes off air which, even if permitted, would still be unlawful since the act of recording was itself an infringement of MediaCorps rights. MediaBanc relied on the Supreme Court of Canadas decision in Canada Law Book Inc v Law Society of Upper Canada ([2004] SCC 13) in support of its contention that
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it had not infringed MediaCorps copyright because it had provided a copy of media excerpts to enable its client to conduct internal research. The court referred to Television New Zealand v Newsmonitor Services Ltd (27 IPR 441), a decision of the High Court of New Zealand and rejected MediaBancs argument that it was involved with non-profit research as it did not actually charge clients for media excerpts, but only for the compilation, editing and delivery services. In concluding that MediaBancs act did not fall within the exceptions of copyright broadcast control under the Copyright Act, the High Court took into account the totality of the defendants operations.
Decision The court granted MediaCorp an injunction to restrain MediaBanc from reproducing or copying the television news programmes aired by and belonging to MediaCorp for the purposes of selling or distributing in the course of business. MediaBanc was also restrained from copying, recording, reproducing, offering for sale, distributing, marketing, advertising, selling and/or dealing with the television news programmes. The court made an order for the removal of the listing of MediaCorps television programmes from MediaBancs library, both online and in the office, and for the delivery-up of the infringing copies of the materials for destruction.
Michael Soo Senior partner michaelsoo@shooklin.com.my Shook Lin & Bok Malaysia
Michael Soo is head of the IP and IT department. He received his LLB (hons) from the University of London and is a barrister at law of Grays Inn. Mr Soo is an advocate and solicitor of the High Court of Malaya and the Supreme Court of Singapore. He is a registered patent, trademark and industrial designs agent in Malaysia, and practises in all areas of IP law.
Lin Li Lee Partner linli@shooklin.com.my Shook Lin & Bok Malaysia
Lin Li Lee practises exclusively IP and IT law. She has previously handled civil litigation cases and corporate matters. Ms Lee graduated from the University of Leeds with an LLB (hons). She was admitted to the Malaysian Bar in 2001 and thereafter commenced her career as an advocate and solicitor with Shook Lin & Bok.
Bee Yi Lim Associate limbeeyi@shooklin.com.my Shook Lin & Bok Malaysia
Bee Yi Lim read law and received her LLB (hons) at the University of the West of England, Bristol. She is a barrister at law of the Honourable Society of the Inner Temple and was admitted as an advocate and solicitor of the Malaysian Bar in 2008. She practises IP law.
Sudath Perera Associates Sudath Perera and Aromi Silva
Sri Lanka Tackling the import of counterfeit products through border measures
As Sri Lanka is situated in an area where many international business and trade transactions take place particularly in regard to trade relations between the European Union, the United States and the emerging economies of East Asia many goods pass through Sri Lankan ports, through various channels of commerce. Among these transactions, a significant number of counterfeit products are often moved within and outside Sri Lanka. Therefore, the protection of IP rights at border crossings is vital to brand and copyright owners in order to safeguard their IP rights and sustain their businesses. The Intellectual Property Act (36/2003) is based on the guidelines set out in the World Trade Organisation Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs),and therefore can be said to be fully compliant with the TRIPS model. Of the major amendments introduced by the act, the changes to the Customs Ordinance and the High Court of the Provinces (Special Provisions) Act are most significant, as they introduced new IP enforcement provisions to Sri Lankan law. The IP Act grants the director general of Customs and the courts broad powers to control offences recognised by the act. These amendments play a vital role in strengthening the border protection measures available in Sri Lanka to combat counterfeit and pirated products. Amendments to Customs Ordinance The Customs Ordinance was amended by the IP Act, which introduced new exhaustive provisions for border protection. Unlike the previous IP legislation, the amendments introduced by the new act target both imports and exports, thereby strengthening the border protection measures available to Sri Lankan Customs. The provisions of the new act cover counterfeit, pirated and any other goods listed as prohibited goods for import and export under the Customs Ordinance. The act further provides for the disposal of such prohibited goods outside channels of commerce or, if such disposal would damage the interests of the rights holder, the destruction of such goods. The IP Act also introduced measures for the suspension of certain goods by Customs. Accordingly, a rights holder that has valid grounds to believe that the import of counterfeit or pirated goods which infringe IP rights recognised under the act is taking place may apply in writing to the director general of Customs requesting him or her to suspend the release of such goods into free circulation. Such application should provide adequate evidence to establish a prima facie case of infringement. The act further provides discretionary powers to the director general of Customs to require an applicant to provide security in order to prevent abuse. According to the act, a rights holder that makes an application to the director general for the suspension of counterfeit goods should institute proceedings regarding the release of such goods within 10 working days. If such action is not filed within the stipulated time, and Customs is not notified accordingly, the suspended goods shall be released. Procedure for recordal of trademarks with Customs Unlike in many other jurisdictions, as yet Sri Lankan Customs has no proper procedure for the recordal of trademarks with Customs. Although in recent years discussions have taken place in this regard, the authorities are yet to agree on suitable procedures for the registration of trademarks with Customs. However, until a proper procedure is introduced by law, Customs has adopted certain informal methods. Although the government took its first steps towards the implementation of a recordal process in 2010, Customs is still finalising some of the procedures with respect to
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the application process. Thus, at present, most brand owners follow this informal process associated with recording trademarks with Customs in order to facilitate the detection of counterfeit shipments of their brands. Amendments to High Court of Special Provisions Act The IP Act also introduced a provision stating that all proceedings under the act were to be instituted before the High Court of the Western Province (the Commercial High Court), and that this court is vested with sole and exclusive jurisdiction to hear and determine IP matters. According to the IP Act, the court has the power to provide the rights holder with sufficient opportunity to inspect any goods detained by Customs (as explained above) in order to substantiate the rights holders claims. The court also has the power to provide an equal opportunity to the importer of such goods to have the goods inspected. In addition, the court is vested with the power to order the destruction or disposal of any infringing goods as provided for in the act without prejudice to the rights of action available to the rights holder and the defendant. The act states that the court shall not allow the re-export of infringing goods to an unrelated state or subject them to a different customs procedure. Therefore, as observed above, the courts have broad powers in respect of protecting IP rights at the border level. Another advantage of establishing the Commercial High Court as the court with sole jurisdiction in IP matters is that appeals of its decisions are made directly to the Supreme Court. This avoids unnecessary delays in the appellate procedure. Enforcement mechanisms As discussed above, the IP Act sets down adequate provisions for the control of counterfeit and pirated products being exported and imported at the border. However, in practice, tackling counterfeit and pirated products can be a challenge. Although there are legal provisions that suspend the release, import and export of prohibited goods, no such provisions exist in respect of transshipments. Although many counterfeit goods pass through Sri Lankan Customs as transshipments, they often go undetected due to the lack of legal provisions relating to the detection of such goods. Case study Recently, the owner of a famous tea brand in Dubai filed an action in Sri Lanka to suspend the release for export of a consignment of tea containing counterfeit goods bearing its trademark. The brand owner had been
engaged in the tea business for more than 15 years and purchased tea from Sri Lanka, which was packaged in its unique packs and shipped to and distributed in various countries, particularly the United Arab Emirates, Iraq and Jordan. The tea was manufactured and packed into the packaging by the brand owners exclusive Sri Lankan supplier, and no other company had the authority to pack tea under the plaintiffs trademark or get-up. The plaintiffs action was filed on the basis that a consignment of counterfeit goods had been packed in packages almost identical to those used by the plaintiff, and claimed that the defendant had copied the trademark, trade name, trade dress and get-up of the plaintiff. The action was filed in the Commercial High Court of Colombo. The plaintiff sought injunctive relief and interim measures, as well as damages, as provided for in the IP Act. At the time of filing the action, the brand owner had applied to register its trademark and such registration was still pending. Therefore, the action was based on unfair competition, as provided for in the act. The case was supported ex parte and the plaintiff had to establish a strong prima facie case of infringement on the part of the defendant. The plaintiff satisfied the court that the defendant had copied its trademark and trade name, and that an almost identical get-up with a colour combination identical to that of the plaintiffs get-up and trade dress had been used by the defendant for the export of its tea. Therefore, the defendant had attempted to piggy back on the reputation of the plaintiff that was attached to the products and the trademark and trade name used by the plaintiff, as well as the plaintiffs business. Further, the plaintiff successfully established that the packaging used by the defendant to sell its tea created confusion among consumers with regard to the origin of the products, and that this confusion was accentuated by the fact that the defendants counterfeit products were sold in the same market as that of the plaintiffs products. The consignment of counterfeit goods in question had originated in India and was initially shipped to Iraq. However, after a previous consignment of the same counterfeit goods shipped by the same parties had been detained and destroyed by the Iraqi authorities based on a complaint made by the brand owner, upon arrival in Jordan the counterfeiters diverted the consignment back to India through Dubai and Colombo. It was revealed that the counterfeiters had a strong network and that several parties were involved in this transaction. Although the consignment in question was in fact a transshipment, the brand owners established a strong prima facie case and obtained an order preventing the
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export of the consignment from Sri Lanka. As requested by the plaintiff, the court also issued interim orders directing Customs to detain the consignment. It also ordered that the plaintiff be allowed to inspect the consignment in the presence of Customs and to remove samples for examination in order to prove its case. Upon examination of the samples removed from the detained shipment, the plaintiff discovered that both the inner packaging and the outer cartons were almost identical to the inner packaging and outer cartons of the plaintiffs product. Further, the outer carton contained other similar marks used by the plaintiffs tea supplier in Sri Lanka, such as its logo, business name, address, colour combination and layout design. The cartons also stated Packed in Sri Lanka, although the tea was actually manufactured in India. Further, the counterfeit packaging carried the Sri Lankan lion logo, which can be used only after obtaining approval from the Sri Lankan Tea Board, which certifies that the tea contained in the packaging is authentic Ceylon tea. The similarities and contents of the packaging clearly established that the defendant had violated the plaintiffs IP rights and attempted to copy the plaintiffs trademarks and trade dress, as well as having violated other local regulations. Interestingly, the counterfeiters used fictitious names and addresses (similar to that of the plaintiff) in the inner packaging and outer cartons, thereby attempting to mislead consumers further. However, the plaintiff traced the correct addresses of the parties involved from the shipping documents. Although notices have been served on the parties, they have thus far failed to come forward to claim the consignment. At the time of writing, the action is pending in court. This case is also significant for another reason. The trademark owner is a large importer of valuable tea from Sri Lanka, produced and shipped by its exclusive manufacturer in Sri Lanka. The brand is one of the most popular consumer teas in the United Arab Emirates. As a result, large quantities of counterfeit tea of this brand have been released on the same market by various parties. In recent years, upon thorough investigation,
the brand owner had identified several tea manufacturers in Sri Lanka which have been involved in the manufacturing, packaging and export of counterfeit tea from Sri Lanka. After a series of actions filed in the Sri Lankan courts over several years, these manufacturers gave an undertaking in the court and agreed to change their packaging and get-up. Accordingly, the brand owner had the counterfeiting issue under control for some time. However, more recently the brand owner noticed that counterfeit goods had again begun appearing on the Dubai and Iraqi markets. On conducting further surveillance, it was revealed that the counterfeiters had shifted their operations from Sri Lanka to India, and that the consignments now originated from India. Therefore, this case is vital to the brand owner, since it has been able to trace the counterfeiters and take action against them in Sri Lanka. Comment As demonstrated by this case study, it is important that both adequate legal provisions and proper enforcement mechanisms are in place for the protection of IP rights and for protection against counterfeit goods at the border to be effective. In the absence of appropriate practical enforcement methods, even properly formulated legal provisions can be ineffective and the objectives of such laws cannot be achieved. As shown by the case study, many counterfeiters now operate in a more organised manner and have established their own powerful networks. Therefore, it is important that brand owners take appropriate steps to investigate and take continuous action to combat the operations of counterfeiters. It has also become necessary to treat counterfeiting as a global issue and to establish links throughout the world to bring counterfeiters to justice. In some instances, since counterfeiting and piracy involve not only IP violations, but also the violation of other regulations, it is also important that the authorities work together in order to bring the infringers before justice.
Sri Lanka Sudath Perera Associates
Sudath Perera Managing Partner sudath@sudathpereraassociates.com Sudath Perera Associates Sri Lanka
Sudath Perera founded the law firm of Sudath Perera Associates in 2002. He is a member of the Bar Association of Sri Lanka, the International Bar Association, the International Trademark Association, the Asian Patent Attorneys Association and the International Association of Outsourcing Professionals, and was named a leading individual in Sri Lankan IP law by the Legal 500. Mr Perera specialises in administrative and IP law, with a focus on brand protection and anti-counterfeiting work. He currently serves on the board of investment firm Investec Capital.
Aromi Silva Senior Associate aromi@sudathpereraassociates.com Sudath Perera Associates Sri Lanka
Aromi Silva is a member of the firms anti-counterfeiting and brand protection team. As well as advising local and foreign clients on strategies to protect IP rights, her other areas of practice include civil litigation of corporate law, tax law, money recovery and criminal litigation of IP law and consumer protection law. Ms Silva is a member of the Bar Association of Sri Lanka and was the convener of the BASL ICT Law Committee in 2008/2009 and 2009/2010.
Formosa Transnational Yulan Kuo and Jane Wang
Taiwan Overhauling the Trademark Law

Background In order to harmonise national legislation with international law, satisfy industry needs, optimise the trademark examination system and enhance trademark protection, in recent years the Legislative Yuan has been working on amendments to the Trademark Law, effectively revising more than 85% of the current provisions. The amended act was promulgated on June 29 2011 following a first draft in 2007. Although the effective date of the amended law has not yet been announced, according to the Executive Yuans schedule it is expected to come into force in June 2012. The amended act includes many changes, such as the expansion of the definition of trademarks, a grace period for unintentionally missing the registration fee deadline, a clear definition of the term use of trademarks, the availability of reasonable royalties as a remedy for infringement and a burden of proof in invalidation proceedings. Civil remedies and criminal penalties for trademark infringement remain in the amended act.
Ten key points Definition of trademark expanded Current Trademark Law A trademark can be: a word; a figure; a symbol; a colour; a sound; a three-dimensional (3D) shape; or a combination of the above. Amended Trademark Law A trademark can be: a word; a figure; a symbol; a colour; a sound; a 3D shape; a motion; a hologram; any other sign with distinctiveness; or a combination of the above.
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Grace period for unintentional failure to pay registration fees added and priority date mechanism revised Current Trademark Law No way to save trademark rights if the registration fee is not paid by the deadline. No plural priority choices. No quasi-national treatment. No international exposition priority date. Amended Trademark Law A six-month grace period for those who unintentionally fail to pay the registration fee by the deadline. The applicant may file for priority date for the whole or part of the goods or services by referring to one or more trademark applications in World Trade Organisation member jurisdictions. An applicant residing in member states of the Paris Convention for the Protection of Industrial Property may enjoy national treatment. The date of international exposition can be claimed as priority date if the application is filed within six months of the exposition.
Categories of trademark licence defined Current Trademark Law No definition of the different types of trademark licence. Amended Trademark Law Trademark licences categorised as exclusive licence, sole licence or non-exclusive licence. Unless otherwise stipulated in a licence agreement, these terms are defined as follows: Exclusive licence only one licensee and the trademark owner cannot use its own trademark. Sole licence only one licensee and the trademark owner can use its trademark. Non-exclusive licence one or more licensee(s).
Joint ownership of trademark clarified Current Trademark Law No mention of joint ownership, although in practice the Taiwan Intellectual Property Office (TIPO) accepts jointly owned trademark applications. Amended Trademark Law Trademark can be jointly owned by two or more persons. New provisions regarding the application, assignment, division, contraction, licence and pledge of jointly owned trademark have been inserted. In summary, the joint owners exercise their rights together.
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Protection of geographical indications enhanced Current Trademark Law No geographical indications (GIs). GIs are regulated in TIPOs Guidelines on Certification Marks, Collective Trademarks and Collective Membership Marks. Amended Trademark Law Definitions of GI and geographical collective trademark provided.
Disclaimer system revised Current Trademark Law The applicant must disclaim the exclusive right to use of a specific part of the trademark if such part is non-distinctive, otherwise the registration will be denied. Amended Trademark Law The applicant must disclaim the exclusive right to use a specific part of the trademark only if such part is non-distinctive and is likely to cause confusion as to the scope of the protection.
Burden of proof in invalidation actions imposed Current Trademark Law No specific requirements. Amended Trademark Law Evidence proving the use of an earlier trademark for three years preceding the invalidation application is required if the owner of the earlier trademark wishes to invalidate a later trademark and the earlier trademark has been registered for three or more years.
Reasonable royalties and remedies for well-known trademarks added Current Trademark Law The remedies for trademark infringement include loss of profits, damage suffered, profits earned by the infringement or from 500 to 1,500 times the value of the unit price. The owner of a well-known trademark can claim against dilution only after actual dilution occurs. Amended Trademark Law The remedies for trademark infringement include loss of profits, damage suffered, profits earned by infringement, up to 1,500 times the value of the unit price or reasonable royalties. The owner of a well-known trademark can claim against dilution as long as the trademark is likely to be diluted.
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Use of trademark and additional trademark infringements clearly identified Current Trademark Law Use of trademark defined as using a trademark on goods or with services for promotional purpose. Amended Trademark Law Use of trademark refers to use of a trademark on the package or advertising documents, possession, display, sale, export or import. In addition to the unauthorised use of a trademark, acts in preparation for unauthorised use, such as preparing, processing and contributing acts, will also be deemed to be trademark infringement.
Border enforcement mechanism reinforced Current Trademark Law No mention of border enforcement mechanisms in the Trademark Law, but included in customs regulations. Amended Trademark Law Provisions for border enforcement mechanisms inserted.
Practical suggestions for trademark policy As a result of the amended Trademark Law, rights holders will need to formulate new or adjust existing trademark policies. The following are 10 practical suggestions of how this can be done: Consider applying for different trademarks that best fit particular transaction models. Additional types of mark may be protected and it may be prudent to utilise new types of mark in certain situations. Keep track of deadlines and establish evidence of unintentional failure if necessary, making use of the new priority date. If a payment deadline is missed unintentionally, inform TIPO that the failure was unintentional. If you are not a national of a Paris Convention member country but have residency in a member country, you will enjoy the same national treatment as citizens of the member country. Use the correct terms for a trademark licence in contracts, and draft and review licence agreements carefully. In particular, clearly define the relationship between licensor and licensee. Different terms will have different meanings if no specific definition is indicated in the agreement. Consider trademark ownership in particular, issues of joint ownership should be considered and understood.
Use geographical certification to create value. The amended law has enhanced protection of GIs, so consider this type of protection if appropriate. There is no need to disclaim unless necessary. Applicants need not disclaim the exclusive part of a trademark unless the mark is likely to cause confusion. Establish evidence of use of an earlier trademark. If you wish to base the invalidation of another partys trademark on your earlier trademark, ensure that you can prove use of your mark. Consider using reasonable royalties as a calculation basis when claiming damages, and prove that your trademark is well known and that dilution has taken place in order to obtain remedies. Rights holders can claim reasonable royalties and attack infringers to prevent dilution. Collect evidence of preparation to infringe to enhance claims. In addition to the unauthorised use, acts performed by an infringer when preparing to use a mark without authorisation will also be deemed trademark infringement. You will be able to stop the infringement earlier with sufficient evidence. Use border enforcement mechanism against infringers. This is an efficient way to protect your trademarks.
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Comment Overall, the amended Trademark Law favours rights holders more than the existing law. This is good news for those who do business in and wish to seek trademark protection in Taiwan. Rights holders should consult their trademark lawyer in order to make best use of their marks and enhance the value of their business.
Yulan Kuo Senior partner yulan.kuo@taiwanlaw.com Formosa Transnational Taiwan
Yulan Kuo is director of the IP and technology division at Formosa Transnational and former chairman of the Trademark Law and Patent Law Committee of the Taipei Bar Association. He has been honoured and rated as a world-class patent litigation attorney by the IAM magazine Patent Litigation 250. He was also counsel for the Judicial Yuan for setting up the IP C0ourt. Mr Kuo specialises in intellectual property, international trade and litigation. He holds an LLM from Minnesota University Law School (1998) and an LLB from National Taiwan University (1983).
Jane Wang Junior partner jane.wang@taiwanlaw.com Formosa Transnational Taiwan
Jane Wang is a junior partner in the IP and technology law division at Formosa Transnational. She is a member of the Trademark Law and Patent Law Committee of the Taipei Bar Association and the Intellectual Property Committee of the National Bar Association. Ms Wang specialises in intellectual property and litigation. She holds an LLM from the UC Berkeley Law School (2004) and an LLB from National Taiwan University (2000).
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Amica Law LLC 30 Raffles Place, 18-03/04 Chevron House, Singapore 048622 Tel +65 6303 6210 Fax +65 6303 6222 www.amicalaw.com
Baker & McKenzie 1 rue Paul Baudry, 75008 Paris, France Tel +33 1 44 17 53 03 Fax +33 1 70 92 53 03 www.bakernet.com Other offices Baker & McKenzie has offices in cities and towns across Europe, as well as globally.
Dorsey & Whitney LLP Suite 3008, One Pacific Place, 88 Queensway, Hong Kong, China Tel +852 2526 5000 Fax +852 2524 3000 www.dorsey.com
Duane Morris LLP 30 South 17th Street, Philadelphia PA 19103-4196, United States Tel +1 215 279 1282 Fax +1 215 689 2410 www.duanemorris.com
Formosa Transnational Attorneys at Law 13th Floor, Lotus Building, 136 Jen-Ai Road, Section 3, Taipei 106, Taiwan Tel +886 2 2755 7366 Fax +886 2 2755 6486 www.taiwanlaw.com
Hiberg A/S St Kongensgade 59 A, 1264 Copenhagen K, Denmark Tel +45 3332 0337 Fax +45 3332 0384 www.hoiberg.com
E-Proint Av 2 y 4, calle 15, n 260, PO Box 7131000, San Jos, Costa Rica Tel +506 2256 4260 Fax +506 2255 1010 www.eproint.com
Hamilton Brook Smith & Reynolds PC 530 Virginia Road, PO Box 9133, Concord MA 01742, United States Tel +1 978 341 0036 Fax +1 978 341 0136 www.hbsr.com
Husch Blackwell LLP 120 South Riverside Plaza, Suite 2200, Chicago IL 60606, United States Tel +1 312 655 1500 Fax +1 312 655 1501 www.huschblackwell.com
Foga Daley 7 Stanton Terrace, Kingston 6, Jamaica Tel +876 927 4371 3 Fax +876 927 5081 www.fogadaley.com
Hoet Pelaez Castillo & Duque Centro San Ignacio, Avenida Blandin La Castellana, Torre Kepler, Piso 2, Caracas 1060, Venezuela Tel +58 212 263 6744 Fax +58 212 263 7744 www.hpcd.com
IPWORK LLC PO Box 30092, 10033 Athens , Greece Tel +30 213 009 0738 Fax +30 213 009 0739 www.ipwork.gr
JMB, Factor & Co 1 Hamarpe Street, PO Box 45087 Har Hotzvim, Jerusalem, 91450, Israel Tel +972 2 571 4777 Fax +972 2 571 4455 www.israel-patents.co.il
Kuhnen & Wacker Prinz-Ludwig-Strasse 40 A, 85354 Freising, Germany Tel +49 8161 608-303 Fax +49 8161 608-100 www.kuhnen-wacker.com
Nishimura & Asahi Ark Mori Building, 1-12-32 Akasaka Minato-Ku, Tokyo, 107-6029, Japan Tel +81 3 5562 8500 Fax +81 3 5561 9711 www.jurists.co.jp/en/ Other offices Beijing, HCMC, Hanoi
Kirkland & Ellis International LLP 30 St Mary Axe, London, EC3A 8AF, United Kingdom Tel +44 20 7469 2000 Fax +44 20 7469 2001 www.kirkland.com Other offices Chicago, Hong Kong, Los Angeles, Munich, New York, Palo Alto, San Francisco, Shanghai, Washington DC
Mannheimer Swartling Norrlandsgatan 21, Box 1711, SE-111 87 Stockholm, Sweden Tel +46 8 595 060 00 Fax +46 8 595 060 01 www.mannheimerswartling.se
NYSE Euronext 11 Wall Street, New York NY 10005 United States Tel +1 212 656 6864 Fax +1 212 656 8101 www.nyx.com
Krieger Mes & Graf v der Groeben Georg-Glock-Strasse 3, D-40474 Dsseldorf, Germany Tel +49 211 440 3370 Fax +49 211 437 0707 www.krieger-mes.de
Nederlandsch Octrooibureau PO Box 29720, 2502 LS The Hague, The Netherlands Tel +31 70 331 25 00 Fax +31 70 352 75 28 www.octrooibureau.nl
Polservice Patent and Trademark Attorneys Office 73 Bluszczanska Street, 00-712 Warszawa, Poland Tel +48 22 44 74 600 Fax +48 22 44 74 666 www.polservice.com.pl
Reed Smith LLP 1510 Page Mill Road, Suite 110 Palo Alto CA 94304, United States Tel +1 650 352 0500 Fax +1 650 352 0699 1301 K Street North West, Suite 1100 East Tower, Washington DC 20005 3317, United States Tel +1 202 414 9200 Fax +1 202 414 9299 www.reedsmith.com
Sudath Perera Associates No 5, 9th Lane, Nawala Road, Nawala, Sri Lanka Tel +94 117 559944 Fax ++94 117 559948 www.sudathpereraassociates.com
Rominvent SA Ermil Pangratti Street No 35, Sector 1, Bucharest 011882, Romania Tel +40 21 231 2515 / 2541 Fax +40 21 231 2550 / 2454 www.rominvent.ro
Thomson Reuters 77 Hatton Garden, London, EC1N 8JS, United Kingdom Tel +44 207 433 4000 Fax +44 207 433 4001 http://scientific.thomsonreuters.com
Shook Lin & Bok 20th Floor, AmBank Group Building, 55, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia Tel +603 2031 1788 Fax +603 2031 1775 www.shooklin.com.my
Watermark Level 2, 302 Burwood Road, Hawthorn, VIC 3122, Australia Tel +61 3 9819 1664 Fax +61 3 9819 6010 www.watermark.com.au
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IP Value 2012

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IP Value 2012

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2012

Cover image istockphoto

4 Building and enforcing intellectual property value 2012

Miguel Vidal-Quadras Tras de Bes, Oriol Ramon Sauri

Building and enforcing intellectual property value 2012 5

133 Contributing firm directory 151

6 Building and enforcing intellectual property value 2012

Building and enforcing intellectual property value 2012 7

Joff Wild Editor, Intellectual Asset Management magazine

Introduction The year it all changed

10 Building and enforcing intellectual property value 2012

Building and enforcing intellectual property value 2012 11

Janet Parkhurst NYSE Euronext

Introduction NYSE Euronexts IP challenges

12 Building and enforcing intellectual property value 2012

NYSE Euronext Janet Parkhurst

Building and enforcing intellectual property value 2012 13

Introduction NYSE Euronext

14 Building and enforcing intellectual property value 2012

Thomson Reuters Bob Stembridge

Introduction The current state of innovation in China

Building and enforcing intellectual property value 2012 15

Introduction Thomson Reuters

16 Building and enforcing intellectual property value 2012

Thomson Reuters Introduction

86.6% 64.4% 16.5% 69.0% 51.9%

84.4% 60.7% 14.2% 61.1% 55.2%

81.9% 58.9% 13.7% 61.7% 62.2%

81.9% 55.6% 15.4% 72.0% 64.1%

82.1% 53.6% 15.1% 72.8% 72.7%

83.4% 58.6% 15.0% 67.3% 61.2%

Europe Korea China

Building and enforcing intellectual property value 2012 17

Introduction Thomson Reuters

18 Building and enforcing intellectual property value 2012

Thomson Reuters Introduction

2006 2007 2008 2009 2010

10,799 12,658 12,246 12,833 14,005

6,967 8,513 7,820 7,798 8,111

3,832 4,145 4,426 5,035 5,894

Building and enforcing intellectual property value 2012 19

Introduction Thomson Reuters

20 Building and enforcing intellectual property value 2012

Thomson Reuters Introduction

-0.4 4.6 1.1 14.5 33.2

Destination of Chinese PCT applications 1994-2010 passing into national phase

Building and enforcing intellectual property value 2012 21

Introduction Thomson Reuters

22 Building and enforcing intellectual property value 2012

Elaine Tan Amica Law LLC

International All change at ICANN: domain names enter a new era

24 Building and enforcing intellectual property value 2012

Amica Law LLC International

Building and enforcing intellectual property value 2012 25

International Amica Law LLC

26 Building and enforcing intellectual property value 2012

Amica Law LLC International

Elaine Tan Director elaine.tan@amicalaw.com Amica Law LLC Singapore

Building and enforcing intellectual property value 2012 27

Jean-Franois Bretonnire and Thomas Defaux Baker & McKenzie

28 Building and enforcing intellectual property value 2012

Baker & McKenzie International

Building and enforcing intellectual property value 2012 29