The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Thursday, 30 June 2016

In Memoriam of David Goldring

IPKat has received the sad news that David Goldring has passed away at the age of 61. David was a highly respected trade mark practitioner in London and this Kat was proud to have met him in both his professional and personal capacities. After reading Law at University College London, David practised initially as a UK trade mark attorney and subsequently as a European one. His career encompassed both in-house and private practice sectors. David's commitment to the trade mark community was best-exemplified by his long-term involvement with MARQUES, where he was a founder member and Treasurer of the organization. In 1984, even before the organization came into existence, he served as a member of the steering committee that contemplated the establishment of a European trade mark owners’ association.

David's son, Simon Goldring, has provided the following information about the burial and other arrangements. Today (June 30, 2016), the funeral will take place at 1.30pm (arrive at 1.00pm/1.15pm) at Bushey Cemetery, Little Bushey Lane, Bushey, Hertfordshire, WD23 3TP. After the funeral, the family will be heading back to 28 Oakleigh Avenue, Whetstone, London, N20 9JH for the afternoon and prayers in the evening at 8pm. In accordance with Jewish mourning practice, the family will be sitting Shiva (a week of mourning). The family will welcome visitors from 2pm-5pm on Friday, Sunday, Monday and Tuesday with evening prayers at 8pm on Sunday, Monday and Tuesday, again at 28 Oakleigh Avenue, Whetstone, London, N20 9JH.

Blessed be his memory.

Wednesday, 29 June 2016

Brexit and UK copyright: the story of a loss

On 23 June 2016 UK voters decided that their country would be better off outside the EU. 

To say the least, the historical outcome of the Brexit referendum will have a tremendously serious impact on the UK, the overall EU integration project, and the remaining Member States alike.

From an IP perspective, it is still very unclear what will happen, and what effects forthcoming developments will have on both UK law and the professional (and necessarily personal) lives of IP rightholders, practitioners, academics, students, civil servants, judges, and public affairs executives alike. 

Serious uncertainty surrounds the destiny of EU-wide registered rights, including trade marks and designs, and imminent EU-wide novelties, such as the Unitary Patent System [see here for an interesting take], in the UK. In the aftermath of the referendum outcome, the complexities of these rights  have seemingly overshadowed what will happen to copyright, an IP right that – it has now become apparent – is territorial only on paper.

During the CREATe Festival held in London last week, an understandably emotional Prof Lionel Bently (University of Cambridge) provided participants with thoughtful remarks regarding the fate of UK copyright. His conclusion? That, overall, Brexit 'freedom' will likely turn out to be an illusion, in the sense that UK copyright might become increasingly irrelevant on a global scale.

As both a non-UK, proudly Italian, citizen who has nonetheless found in the UK a fantastic place to learn, work and have fun in, and someone who has been an enthusiastic follower of EU copyright adventures since her PhD days, I am very concerned about the consequences of the Brexit referendum.

Here are my thoughts (to be hosted also on the Journal of Intellectual Property Law & Practice) on what the future of UK copyright in a post-Brexit world might look like.

UK courts and the CJEU?
What options for UK copyright?

Over the past few years, the copyright laws of EU Member States have increasingly become more similar, less alien to each other, less perched in the summa divisio common law’s copyright/French-style droit d’auteur

On the one hand, EU legislature has adopted several directives that have had the laudable objective of facilitating the free movement of goods and services based on or incorporating copyright works. 

On the other hand, the Court of Justice of the European Union (CJEU) – prompted by questions of national judges – has become a primary player in the EU copyright scene, acting in certain cases as de facto policy- and law-maker.

If and when Brexit happens, what will be the legacy of EU harmonisation in the area of copyright? The answer will depend on what route is eventually pursued.

If the UK leaves the EU but remains in the European Economic Area (possibly the most optimistic outlook in the very aftermath of the referendum), then the relevant body of EU copyright legislation will continue to apply in this country. 

The same could not be however true for CJEU case law, at least from a formal standpoint. Although the judgments rendered in the context of references for a preliminary ruling ex Article 267 of the Treaty on the Functioning of the European Union (ie the types of actions relevant in the area of copyright) would likely maintain a certain relevance for UK copyright, UK courts would arguably lose their power to make themselves references for a preliminary to ruling to the CJEU. In fact Article 267(2) reserves this possibility to the courts or tribunals of Member States. The result would be odd: the UK would still apply EU legislation but its judges would be no longer able to make queries on their correct interpretation (and application).

In any other scenario, the future relevance of EU copyright legislation and CJEU case law in the UK is extremely uncertain. Possibly bound to international copyright instruments only, the UK might decide to pursue routes that – so far – have appeared extremely unlikely to be followed at the EU level. For instance, it could decide to abandon a closed system of copyright defences and adopt an open norm instead, possibly modelled on US fair use.

... in a nutshell
The legacy of EU harmonisation

In times of profound confusion, what appears clear – yes – is that EU action in the area of copyright has BENEFITTED and IMPROVED UK law. 

First, it has created a harmonised space for 28 Member States that, albeit imperfect, is much better – for rightholders and users alike – than what, in a much more fragmented fashion, was the case 20-25 years ago. 

In addition, the harmonising, (possibly even undue in certain cases) efforts of the CJEU have brought increased uniformity and sometimes compelled Member States to either re-think/question certain approaches or meet the challenges facing technological advancement and digitisation of contents and their distribution channels. 

An example of the former is the impact of CJEU case law on the UK notion of originality and the (outdated, yet still formally in place) closed subject-matter categorisation envisaged by the Copyright, Designs and Patents Act (CDPA). 

An example of the latter is the availability of injunctions against intermediaries under s97A CDPA (introduced to implement into UK law ... an EU directive): the jurisprudence of UK courts, influenced by parallel developments at the CJEU level, has developed solidly and thoughtfully and has been looked at (whether with admiration or concern, but in any case regarded as IMPORTANT case law) in other Member States.

Will UK copyright be better off without EU copyright and the CJEU? 

No: the improvements to UK copyright over the past few years are in many instances greatly indebted to parallel developments at the EU level. 

Among other things, losing the dialogue between thoughtful UK judges and the CJEU will be one of the many other great losses for UK copyright.

Wednesday Whimsies

US Chamber Report measures the magnitude of global counterfeiting

counterfeiting copycats are everywhere!

According to the recent Counterfeiting Report from the Global Intellectual Property Center (GIPC) part of the Chamber of Commerce, global counterfeiting remains a 'tremendous and ever increasing global threat'. The report estimated that China alone is the source of more than 70% of global physical trade-related counterfeiting, or $285 billion worth. Physical counterfeiting makes up 12.5% of China’s exports of goods and over 1.5% of its GDP.

However, as the report shows, counterfeiting is far from confined to China (and Hong Kong) - it damages economies and public health across the globe. GIPC have modelled estimates of rates of physical counterfeiting and analysed the value of seized counterfeit goods of 38 economies sampled, totting up to a total of $5.2 billion, which is itself a mere 1.2% of the estimate of total global physical counterfeiting. The full report is available online here.

Unitary Patent

The Unitary Patent has been many years in the making, and its future is still not entirely clear. Dr. Ingve Björn Stjerna has published a series of papers on the subject, all of which are available to read along with links to other useful resources here. IPKat readers in particular may be interested in the “expert teams” of the Preparatory Committee, and the immediate implications for SMEs.


CIPA's shining stars will be performing on 5 July at The Borderline in London. You may have heard enough about borders to last you a lifetime recently, but this event promises to be something completely different - a very special night, featuring musical performances from CIPA members, and with profits raised going to Generating Genius, a charity supporting young people from disadvantaged backgrounds in STEM. You can register for the event through the CIPA website, or for non-members, by email. More information is here.

Mars in trade mark dispute with Mondelez International over m&m's 

A pawful outcome for Swedish
 m&m lovers?

The Svea Court of Appeal has ruled that Mars is not allowed to use its lower case m&m's logo in Sweden, as it is too similar to Mondelez International's Marabou brand (see left). Mars Nordic's corporate affairs director expressed disappointment at the court's decision, telling the press: "we have always believed no confusion exists between the colourful m&m's brand — one of the world's favourite chocolate products — and the Marabou M Peanut Brand." 

Marabou's 'm' branded chocolates have been on sale in Sweden since the 1950s. The m&m brand has existed in the USA since 1941, but took a while to expand into the global market. Swedish website The Local reports that Mondelez (then Kraft) signed an agreement with Mars in 1989 promising not to sell m&m's in Scandinavia. This agreement expired, and in 2009 Mars started selling m&m's in Sweden. It is not clear why it took Kraft/Mondelez so long to challenge Mars' use of the m&m's mark. If this decision is of interest you can read a summary of the decision here. Katfriend Nedim Malovic tells the IPKat that non-Swedish speakers will shortly be able to read about the decision in the Journal of Intellectual Property Law and Practice.

Beijing's Intellectual Property Bureau says iPhone 6 and iPhone 6+ infringe patent held by Chinese company

The Wall Street Journal reports that Chinese company Shenzhen Baili won a surprise injunction against sales of Apple's iPhone 6 and iPhone6+ in Beijing based on a design patent for its 100c smartphone. It's difficult to tell at this stage whether the Chinese company is a troll or whether it has a genuine case, but either way, this is an interesting example of what may become an increasingly common sight: Chinese companies using the domestic patent system to successfully attack Western tech giants. The iPhone models in question are still available in Beijing, as the injunction that was issued against their sale was stayed pending an appeal.

Book Review: IP Strategy, Valuation and Damages

I learned a few things reading this book. One, don’t judge a book by its green cover, and two, the IP valuation world is fascinatingly complex. A new book by Michelle Rakiec and Stevan Porter contains some very interesting insights on the evolving world of IP valuation and damages.

The meat of the book begins in the third chapter, where the authors address the principles of valuation.  Here the authors do an excellent job of laying out the principles of valuation and the variations of market, income and cost models.  Their explanation of binomial models and Monte Carlo methods was clear and not scary. (On a side note, not much appears to have fundamentally changed in valuation since this Kat was a bank-kitten at the beginning of the noughties.)

A chapter on damages presents a methodical, clear process for determining how damages might be assessed in the case of infringement.  There is an in-depth discussion of the Georgia-Pacific factors and some handy flow charts.  The authors discuss how courts may view various damages scenarios. For example, where lost profits may be accepted as a damages valuation method even if the patentee isn’t actually selling -- “lost profits also have been awarded when the patentee lost sales of its product not covered by the patent as a result of infringing use of the patented technology in a competitor’s product.”

Gildor Elendil. CC-BY
The section on strategic management of IP covers a lot more ground than just IP.  It looks at wider issues in business risk and financial decision-making.  It provides four generalised intellectual property strategies: commercialise, license, sell and abandon. The final chapter looks at managerial uses of intellectual property and includes a fascinating discussion on the role of IP in signalling. The authors frame signalling as the use of IP to send market signals about business strategy. Patenting activity sends subtle signals about a company’s intentions and can be used intentionally (‘actively’) to encourage a “beneficial competitive consensus.” Using the example of Apple and Microsoft, they detail how strategic signalling of IP assets thwarted Android’s market expansion. In an example of failed IP-backed market strategy, they examine Procter & Gamble’s attempt to use IP to block competitors from entering the new and profitable at-home teeth whitening market (clearly more popular in the US than elsewhere). The strategy back-fired as competitors worked around P&G’s patents and introduced much cheaper whitening products, driving prices and profits down.

An early chapter on the role of IP in society provides a whirlwind tour of IP; it touches on philosophical and policy debates that are interesting but seem a bit out of place. I was a bit frustrated by the use of American football to illustrate innovation in the absence of incentives. One, I associate football with bad food, and two, it’s not a great example. “Professional football teams also have been known to advance new formations and plays despite the fact that successful innovations can be quickly replicated by opposing teams.”  Surely IP over formations would be the equivalent of IP over chess moves – completely against the spirit of competition.

This book is handy for IP-savvy professionals, particularly US-based, who are not au-fait on the financial machinations of IP as an asset.  I found the non-IP/valuation bits clunky, but the IP discussions insightful and clearly written by experts. Ultimately it does what a book like this should to – enables the IP professional to know when to call a valuation expert, and how to have an intelligent conversation on valuation.

Porter, S., Rakiec, M., & In Kimball, A. B. (2015). IP strategy, valuation, and damages. Lexis Nexus. Rupture factor: low  Price: curiously $209 hard copy, $224 e-book

Tuesday, 28 June 2016

A possible way for a non-EU UK to participate in the Unitary Patent and Unified Patent Court?

The IPKat is delighted to receive this paper from Prof. Dr. Winfried Tilmann of Hogan Lovells which suggests that it might be possible for the UK, post-Brexit, to nevertheless be involved in the Unitary Patent (European Patent with Unitary Effect or EPUE) and Unified Patent Court (UPC).  Many have wondered whether this could be the case; few have come up with a plausible legal basis for such a scenario (given that the CJEU ruled the previous proposal for a European patent litigation system incompatible with the EU Treaties for reasons including the involvement of non-EU states).  The IPKat will present the paper and hopes that our dear readers may provide their comments.

EPUE-Reg and UPCA after Brexit
The British voters have voted for a Brexit. What does that mean for the EPUE-Reg and for the UPC Agreement (UPCA)?

There is no immediate effect, since Art 50(2) EUC provides for a two-year period for agreeing on the details of an exit. During that period, the details of any UK participation in the patent package must be agreed upon for the time after the legal effect of the exit has taken place (legal exit).

What are the options for the EPUE-Reg and for the UPCA if a continuing participation of the UK in the patent package is desired?

1. EPUE-Reg 
In case the UK leaves the EU, not having found a solution for the EPUE-Reg, the UK participation in the EPUE-Reg would end automatically with the UK losing the status of an EU Member State (EU-MS). 

However, since one of the two bases of the EPUE-Reg is Art 142 EPC [Merpel notes this is the European Patent Convention, and so independent of the EU and the UK's involvement in it] an agreement may be reached between the EPC member states being UPCA signatory states, including the UK, in the form of a Protocol to the UPCA agreeing that a unitary effect of an EPUE would be extended to the UK on the basis of Art 142 EPC. That agreement would be binding on the Participating Member States (PMS) and the UK on the basis of international law only. It would lead to two parallel unitary effects of the EPUE (1) in the participating member states of the EPUE-Reg (PMS) on the basis of the EPUE-Reg and (2) in the UK on the basis of the agreement pursuant to Art 142 EPC.

Union law would not definitely prohibit such internal agreement between EPC member states. The blocking effect of an EU competence used by the EU normally includes external agreements of the EU-MS on the same matter. But this is not the case, if the EU decides not to make use of its competence or even allow the external agreement by endorsing it. It could be envisaged that the endorsement would be included in the exit-agreement EU-UK. The unitary effect in UK would still be only a matter of international law. The endorsement is only needed for securing the competence of the contracting member states of the UPCA (CMS) to agree on that extension.

a) Art 84 UPCA provides that only EU Member States (EU-MS) may ratify the UPCA. If the UK has ratified at the time of the legal exit, absent any change of the UPCA, the UK (or the other CMS, being the other party) may theoretically cancel the adherence of the UK to the UPCA pursuant to Art 62, 65, 67 of the Vienna Convention, because a fundamental circumstance has changed (Art 62 Vienna Convention).

b) What kind of change of the UPCA would admit an adherence of the UK to a modified UPCA after the legal exit?

(1) The CJEU, in its Opinion 1/09, has decided, that the UPCA may be concluded only if the referral procedure under Art 267 TFEU is not jeopardized. Pursuant to Art 21 UPCA and its referral to Art 267 TFEU the UPC is obliged to refer all questions on the construction of EU law applied by it to the CJEU. Therefore, the requirements of Art 267 TFEU are met to a full extent. It is true that under Art 267 TFEU only the courts of EU-MS are permitted to refer questions pursuant to Art 267 TFEU, but the UPC is a common court of EU-MS (Art 71 a Brussels Ia-Reg) and would not lose that character, if a non-EU-MS (UK) who has ratified the UPCA being an EU-MS would continue to participate in the UPCA after leaving the Union, because that state, in ratifying, had fully accepted Art 21 UPCA and Art 267 TFEU and is bound to accept the Union law as defined by the CJEU. A statement to that effect could be included in the agreement based on Art 142 UPCA and also be endorsed in the exit-agreement EU-UK.

(2) Therefore, Union law would allow a change of the UPCA permitting a CMS, who had been an EU-MS at the time of ratification, to remain as a member state of the UPCA (CMS). This change could be made by the Administrative Council of the UPC pursuant to Art 87 (2) UPCA, if the exit-agreement (having the legal status of Union law) would contain a parallel text. In that case, no ratification by the CMS would be necessary (see 3. a below).

3. Implemention
a) EPUE-Reg 
The possibility of an extension of the unitary effect of an EPUE to the UK could be provided for by a Protocol of the Administrative Committee prepared by the Preparatory Committee. The competence of the Administrative Committee for that part of the proposed Protocol could be based not only on Art 142 EPC but also later on the exit-agreement UK-EU. If the Protocol were based (also) on the exit-agreement UK-EU, the competence of the Administrative Committee could be based on Art 87(2) UPCA, because the Protocol would bring the UPCA into line with Union law. In that case ratification by the CMS or by the UK would not be needed.

b) UPCA 
The same applies for the part of the proposed agreement of the CMS according to which a CMS who, at the time of ratification, was an EU-MS but does not continue to be an EU-MS may stay within the UPCA. This change may be brought about by a Protocol to the UPCA based on Art 149a(1)(a) EPC and later on the exit-agreement UK-EU, in combination with Art 87(2) UPCA, because the Protocol would bring the UPCA into line with Union law. Ratification by the CMS and by the UK would not be needed.

4.  The way forward (timetable)
a) The UK should use its present position as EU-MS and deposit its instrument of ratification of the UPCA as soon as possible. In that case the UPCA could enter into force well before the exit-agreement becomes operative.

b) After the entry into force of the UPCA, the Administrative Committee of the UPCA should amend Art 84 UPCA in saying that a CMS will not lose its contractual position if it leaves the EU.

c) The Administrative Committee should, at the same time, establish a Protocol containing an agreement of the EPC-MS providing for an extension of the unitary effect of an EPUE to the UK.

c) Both agreements should be endorsed in the exit-agreement EU-UK. With the exit-agreement becoming operative, the two agreements (b and c) would be covered by Union law (the exit-agreement being of such quality) thus providing the basis for a retroactive application of Art 87(2)) UPCA.

d) At the date when the exit-agreement becomes operative, the UK will stop being an EU-MS but its further adherence to the UPCA would be based on the amended Art 84 UPCA. The UK would be ready to receive the unitary effect of an EPUE on the basis of Art 142 EPC.

This Kat supposes there are two sets questions in response to this proposed route forward: 
1) is this legally possible - would the CJEU endorse the legal basis and conformity with EU law?; and 
2) is it politically achievable?
What do our readers think?

EU Trade Mark Owners: Article 28 declarations – have you filed yours yet?

Former Guest Kat, Darren Meale, of Simmons & Simmons, London, continues to share his thoughts about Article 28 declarations.  Over from one Darren to another...

Like this and this, this one is about Article 28 declarations. Those are the declarations you have until September 2016 to file to ensure your pre-22 June 2012 EUTMs cover all the goods and services you think they cover.

We are now halfway through the six month period the EUIPO has granted trade mark owners to file Article 28 declarations.

In that time, the EUIPO has made a few public statements on how these are going, and I have my own experience from filing a significant number of them. So here are a few pearls of wisdom, and a few of frustration, to help you along with your portfolio reviews and your declarations:

1.    More relevant to you than you think. It is surprising how some portfolio owners assume their portfolios will not be eligible for or benefit from Article 28 declarations. Experience tells me there are many more EUTMs with specifications covering entire class headings than their owners think. Remember that your registration only has to cover the class heading, it doesn’t have to have the exact wording.

2.    Plenty of declarations to come? The EUIPO has undoubtedly (optimistically) underestimated the number too. It reported in its April Alicante News newsletter than around 300 declarations had been filed in the first month, reflecting, in its view, that “affected trade mark owners have essentially understood that declarations should only be considered when there is a real interest in filing one”. In my view, the reality is that while some very well prepared EUTM owners will have filed once the window opened in March, most still have it on their to do list for the summer. We have recently filed more than 120 declarations for just one (major) portfolio owner. We also know, based on analysis we have conducted using software we have developed to automate Article 28 declarations, that there are a significant number of EUTM owners who can (if they wish) file declarations at this order of magnitude. World Wrestling Entertainment, for example, could file up to 285 declarations. El Corte Ingles, the largest department store group in Europe, could file up to 379. Intesa Sanpaolo, the Italian banking group, could file up to a massive 425.

3.    What declarants are getting wrong. Those who have filed declarations early on have frequently made mistakes, according to the EUIPO. Most of those mistakes arise from not reading the EUIPO’s guidance and a failure to understand exactly what Article 28 declarations are and what they are for. Here are the top mistakes according to the Office:
a.    Declarations containing long lists of terms clearly covered by the literal meaning of the relevant class heading. The EUIPO was very clear it would not accept these – it will only accept terms not clearly covered already. It has already published a list of “orphan” goods and services which it will accept. If a term is not in that list, you can still file a declaration, but be prepared to argue for it as and when the EUIPO issues a deficiency notice.
b.    Declarations for goods and services not contained in the Nice classification alphabetical list in force at the time of filing. The Nice classification has changed over time – make sure you are using the right one, or you’ll get a rejection.

4.    Unhelpful online form. The EUIPO is not making life easy for us all. Its online form, which it encourages us all to use, only allows a declaration for one mark at a time, which is a slow and tedious way of dealing with a large portfolio. The form is not mandatory.

5.    Too much paper. To make matters worse, even if declarations are filed together in a batch – because they all relate to one EUTM owner – the EUIPO is dealing with them all individually. So individual recordal numbers, potentially multiple examiners, individual acknowledgement letters, individual deficiency notices, individual acceptances, and so on. So if you file 100 declarations, you’ll be getting 100s of pieces of paper back. This is not how things are done for other recordals. Thanks EUIPO!

6.    Are you authorised? The EUIPO has refused to accept declarations where the filer is not the representative on file. It is often the case that EUTM owners manage their own portfolios, but instruct external counsel to correspond with the EUIPO on particular issues. This additional red tape simply adds time and cost to the whole exercise. The EUIPO tells us it is requiring this because of “the risks of our users being targeted by companies employing the sharp practice of filing declarations without their consent or authorisation in an attempt to charge for unsolicited services”. Different examiners are taking different approaches. Some require a power of attorney, some require a letter of authorisation, some require nothing. So be warned!

7.    Once a declaration is accepted. In future, it is not going to be easy to see whether or not a declaration has been filed for a particular EUTM and what was in the declaration, at least not until the EUIPO makes some updates to its database software. If you take a look at this example, which is one of the early declarations which has now been recorded, although there is a notice in the “Publications” and “Recordals” section of the EUTM’s entry, to see what’s gone on you have to log in to the EUIPO website. You can then download the EUIPO’s letter confirming recordal of the Article 28 declaration, which only shows what the entire specification looks like now. If you want to see what has actually been declared, you will have to download the TM owner’s own declaration.

Three months to go – so plenty more time – but don’t forget! 

Monday, 27 June 2016

Never Too Late: If you missed the IPKat last week

Is it safe to come out yet?
You could be forgiven for being too distracted by the last week of news to catch up with IPKat... but not to worry! Never Too Late 102 is here with what you missed.

 Neighbouring rights for publishers: are national and (possible) EU initiatives lawful?

Eleonora Rosati explains the limitations and restrictions on introducing a sui generis neighbouring right for publishers. National initiatives may fall short, but introduction at the EU level could be possible.

The Pendulum Swings: US Supreme Court Makes it Easier to Obtain Patent Enhanced Damages

The US Supreme Court unanimously rejected the Federal Circuit's standard for obtaining enhanced damages for willful infringement in Halo Electronics v. Pulse Electronics and Stryker Corp. v. Zimmer (Halo). Mike Mireles puts the decision in context - a swing by the Supreme Court away from anti-patent sentiment.

US Supreme Court in Halo and Kirtsaeng makes IP victory sweeter for successful parties

Amerikat Annsley Merelle Ward explains the additional factor sweetening the success for successful litigants, now the US Supreme Court has lowered the hurdles for both patent enhanced damages and recovering attorney's fees in copyright cases.

Enlarged Board publishes decision: EPO President violated judicial independence

Merpel bring us the latest decision from the extraordinary "House Ban" disciplinary action. The Enlarged Board of Appeal refused to make a proposal to terminate the appointment of the Board Member, ordered reimbursement of his costs, and ordered the decision to be published. You can find the document here.

We are so, so sorry. The UK has voted by a narrow margin to leave the EU; IPKat will continue to report for the global community and chart the future territory for IP.

The IPKat has been so grateful to receive so much support from our European IP colleagues at this turbulent and uncertain time. Sven Klos writes:
We must rid ourselves of unconstructive criticism and the mortal danger of taking everything our union has achieved for granted. We must rediscover, love and cherish it.


Never too late 101 [week ending on Sunday 19 June] Procedure to remove EPO Board Member ends abruptly | Trade mark "bully" | EU Trade Secrets Directive | Cannibalism, Branding and Market Segmentation | A-G Szpunar declares Rubik's Cube shape mark invalid | Apple and the podcast industry | IP Inclusive | Coke defends opposition to 'ZERO' marks

Never too late 100 [week ending on Sunday 12 June] 5G wireless technology | European Commission Update: Revised SPC tender now open | CJEU considers implemetation of the private copying exception | CJEU gives guidance for communication to the public cases  Google's fair use defence succeeds against Oracle | The state of patent valuation | EPO's plans to restrict post-service employment | Tuesday tiddlywinks (pirates and cake)| Is obscurity a greater threat than piracy? | Justice Slade delivers judgement in Arthur J Gallagher Services v Skriptchenko 

Never too late 99 [week ending on Sunday 5 June] German Constitutional Court sends sampling saga into another loop | Who should pay for the independence of the Boards of Appeal? | Sorry not sorry - Justin Bieber and Skrillex deny copying | CJEU gives guidance for communication to the public cases  Series marks are a bundle of separate marks, says Court of Appeal | Paying for peace of mind? C-567/14 | Life as an IP Lawyer: Dusseldorf, Germany | ISP's delay in removing content can remove safe harbour | Avengers: when is confusion not confusion? | De Minimis sampling of sound recordings is not infringing, says Ninth Circuit

Never too late 98 [week ending on Sunday 29 May] Are academic publishers liable for ginormous damages? | Update on UPC's draft code of conduct | Implications of new EU and US trade secret legislation | CJEU reference over Schweppes trade mark | New transfer and triage process for IPEC| Thursday Thingies | IP (Unjustified Threats) Bill: from the horses mouth | New Master of the Rolls | PRINCE's personality rights | EU Council adopts Trade Secrets Directive | Book review (copyright lawmaking) | Nominative Fair Use defence in trade mark law

US Supreme Court Accepts USPTO "Death Squad (?)" "Broadest Reasonable Construction" Standard

Will Congress react?  The US Supreme Court issued the much-awaited decision in Cuozzo Speed Technologies v. Lee.  In that decision, the Supreme Court upheld the United States Patent and Trademark Office's (USPTO) use of the "broadest reasonable construction" standard in reviewing claims challenged in Inter Partes Review Proceedings (IPRs) before the Patent Trial and Appeal Board (PTAB).  This standard makes it more likely that a challenged patent will be found invalid for obviousness.  The Supreme Court also decided that the decision to institute an IPR is not appealable.

In Couzzo Speed Technologies, Justice Breyer wrote the unanimous opinion basically affirming the USPTO's power to adopt the "broadest reasonable construction" standard in IPRs.  The Leahy-Smith America Invents Act clearly provided the USPTO with rule making authority concerning IPRs.  The Supreme Court had little trouble following the statute.  The Supreme Court also rejected arguments that IPRs were more like court proceedings than specialized agency proceedings.  For example, challengers do not have to have constitutional standing, have a different burden of proof, and the USPTO can continue to hear the action without the challenger.  Justice Breyer also noted that IPRs' predecessor was reexamination--essentially a return to review the agency's decision to grant a patent. The Court notes that there is nothing in the text, purpose or history of the statute to support a differing viewpoint. Notably, Justice Breyer recognizes that there may be inconsistent results between district courts and the PTAB, but that this was "inherent" in Congress' "regulatory design."

Justice Breyer also wrote the majority opinion on whether the decision to institute an IPR is not appealable.  This may prove to be important because it essentially allows the PTAB full authority to decide whether an IPR should be instituted.  Thus, ways to critique the application for an IPR may, over time, become more limited because of a lack (or threat) of judicial review.

"Looks like a job for Congress!"
Notably, the PTAB and its handling of IPRs and other proceedings has been subject to some controversy. For example, former Chief Judge Rader of the U.S. Court of Appeals for the Federal Circuit labeled it, "the death squad killing property rights".  However, some commentators have challenged that label and its meaning.  In a study including data in 2014, the law firm Fitzpatrick, Cella, Harper & Scinto concluded that challenges under American Invents Acts procedures such as IPRs were "challenger friendly," but did not go so far as to say that the PTAB was a "death squad."  IPRs can be based on section 102 (novelty) or 103 (non-obviousness).  The authors state that the percentage of successful challenges based on section 102 (novelty) was similar in district courts and at the PTAB.  Notably, the percentage of successful challenges based on section 103 (non-obviousness) were higher at the PTAB (58%) than in district courts (28%).  The authors' theory for the difference, in part, is that the PTAB uses the "broadest reasonable construction" standard and the district courts use the "person of ordinary skill in the art at the time of the invention."  The authors also state that the PTAB relies on the preponderance of the evidence standard for proof that a patent is invalid while the district courts presume the patent is valid and apply the clear and convincing evidence standard.

In an analysis published in 2016, Harper Batts of Baker Botts explains that the "death squad" label is fiction.  He argues that the relatively early high rates of invalidity were because those challenged patents were particularly weak and that defenders have learned how to successfully critique IPRs.  Moreover, he notes that the PTAB may have received a signal from Chief Judge Rader that they may want to proceed with care.  Additionally, a study published by Corporate Counsel announced that the "PTAB is Not a 'Property Rights' Death Squad." (behind a paywall).

In a study by Arti K. Rai, Jay Kesan and Saurabh Vishnubhakat titled, "Strategic Decision Making in Dual PTAB and District Court Proceedings," the authors state that, in part, based on the high percentage of PTAB proceedings that are instituted after a district court action is filed that the PTAB and district courts should apply the same standard.  However, they do note that a substantial percentage--about 30%--do not involve proceedings at the agency and court.

The impact of In re Cuozzo Speed Technologies and IPRs remains to be seen.  IPRs were designed to improve patent quality through a relatively quick and cheap method with knowledgeable judges.  Apparently, the bio-pharmaceutical industry has been somewhat surprised at the use of IPRs against pharmaceutical patents by the generic industry.  How did they not see this coming?  It will be interesting to see if Congress moves to change the USPTO's rules.

Sunday, 26 June 2016

Registration of a trademark license: the result of the CJEU is reasonable, but what about the Court's reasoning?

In the best of circumstances, the law of licensing is the murky side of trademark law. A broad chasm in approach between the common law and civil
law traditions has characterized trademark licensing for over a century and even within each of the legal traditions, differences remain. This Kat, having penned a treatise on the subject two decades ago, continues to prowl the legal landscape for current developments, although he admits to sometimes missing an event worthy of notice. For this reason, he is grateful to Eckhard Ratjen, a member of the Bremen office of Kat friend Boehmert & Boehmert, for discussing, in the firm’s most recent newsletter (and sharing his thoughts with this Kat), the judgment given by the CJEU on February 4, 2016 (Case C‑163/15, Youssef Hassan v Breiding Vertriebsgesellschaft mbH).

At issue is a question that has occupied trademark law and practice for many decades: must a trademark license be registered for a licensee to be authorized to bring an action for infringement? In the words of the referral—
“Does the first sentence of Article 23(1) of [the Regulation] preclude a licensee who is not registered …from bringing proceedings alleging infringement of a Community trade mark?”.
Member States of the EU differ on the answer to the question (e.g., Spain— “yes”; Germany— “no”). The answer given by the CJEU is that no registration is required. While this Kat believes that the result is reasonable, the legal analysis given shows how inadequate the nature of CJEU decision-making can sometimes be in providing a compelling explanation in support of it ruling.

The focus of the Court’s attention is Article 23(1) of the European Union Trademark Regulation, which provides that—
“Legal acts referred to in Articles 17, 19 and 22 concerning a Community trade mark shall have effects vis-à-vis third parties in all the Member States only after entry in the Register. Nevertheless, such an act, before it is so entered, shall have effect vis-à-vis third parties who have acquired rights in the trade mark after the date of that act but who knew of the act at the date on which the rights were acquired.”
The Court states (para. 18) that--
“Read in isolation, that sentence could be interpreted as meaning that the licensee cannot, if the licence has not been entered in the Register, rely on the rights conferred by that licence vis-à-vis third parties, including the party infringing the trade mark.”
However, the Court goes on to qualify what seems to be the plain meaning of Article 23(1) in favor or requiring registration of the license, stating that (para. 19) –
“… in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (citation omitted).”
Given this analytical framework for resolving the question, the Court reaches the conclusion that (para. 25)--
“With regard to the purpose of the rule laid down in the first sentence of Article 23(1) of the Regulation, the Court takes the view that … the lack of effects, vis-à-vis third parties, of the legal acts referred to in Articles 17 [transfer], 19 [rights in rem] and 22 [licensing] of the Regulation which have not been entered in the Register is intended to protect a person who has, or may have, rights in a Community trade mark as an object of property. It follows that the first sentence of Article 23(1) of the Regulation does not apply to a situation, such as that in the main proceedings, in which a third party, by infringing the mark, infringes the rights conferred by the Community trade mark.”
With all due respect, this Kat finds the Court’s reasoning conclusion unconvincing why the plain meaning of Article 23(1) should be disturbed. Even if we acknowledge that Articles 17, 19 and 22 all deal with trade marks as on object of property, this still does not explain why Article 23(1) does not govern the legal effect of a registration pursuant to Article 22(5) (“On request of one of the parties the grant or transfer of a licence of a trade mark shall be entered and published’). One gets the sense that the CJEU reached the result that it wanted and then it imposed a restriction on the scope of Article 23(1) to comport with this result, what Eckhard Ratjen calls a “teleological” construction of the Regulation.

The question of whether registration of a trademark license is mandatory or permissive has arisen in various jurisdictions and the ultimate result is not uniform. At the end of the day, the tribunal decides either “yes” or “no”. As such, whatever their decision, courts that place a value on fully disclosing the underlying policy grounds for their decision will need to address two major issues; (i) do we want to require registration in such circumstances, and (ii) if so, it is workable? It is unfortunate that the CJEU did not do so to provide a helpful window into its policy considerations in connection with its ruling on trademark licensing.

Dear UK...

Since publishing IPKat's letter to our European IP colleagues (see letter here) following Friday's EU referendum result, the IPKat has received an outpouring of comments, emails and tweets from across Europe and the globe.  Although there has been some criticism, the majority of responses have been warm and positive.  The IPKat received a letter in reply from Sven Klos of the Netherlands that the team thought was worth sharing with our readers:

Dear British IP friends,

We will miss you. We will be much weakened and diminished without you.

It has been an immense privilege travelling a considerable part of the long and winding road to unity with you.

It will be difficult reaching our goal of unity in the interest of lasting peace and prosperity without you.

We will sorely miss your sense of tradition, history, innate civility, benign conservatism, libertarian- and contrarian streaks, eccentricity, sense of fairness and humour. Your DNA, however, is woven into our union and we will therefore always recognize you as our brothers.

We will from now on be an incomplete family. We are left as orphans in the largest English-speaking IP jurisdiction in the world without native speakers to guide us. [Merpel considered correcting Sven on this point by uttering a brilliantly Wildean epigram, but thought better of it.]

The forging of a union is a fascinating, messy process. It takes, as Churchill famously said at the 1948 Congress of Europe, the pooling of all our comradeship and luck.

We will always have comradeship in plenty. But our luck ran out.

None of you, or hardly any of you, voted to leave us. You are the people of good will who run the country, legal system and government. You are the young, you are the educated. You are the 48 percent.

You are the victims of an insincere, clownish demagogue deftly stoking the visceral fears and unbritish xenophobia caused by a series of economic and political crises not of your making. You are caught in the destruction caused by a schoolboy rivalry played out on the world stage.

You are not to blame.

Well, there is perhaps one thing some of you could have done. Friends must be honest with each other. It is, however, something that all IP lawyers in all member states are guilty of.

We all could perhaps at times have been a little milder for the plodding European courts who have to wade through a swamp of 28 slowly converging legal cultures to make their essential contribution to our unity. A little less superior, a little less cynical. We have perhaps had a little too much CJEU bashing by judges and academics. Even British lawyers may someday find themselves nostalgic for that much maligned court.

So, that occasional we do-things differently attitude – that we are at times all guilty of - is the only thing we will not miss.

Once you re-apply to our by then far more perfect union you will be welcomed as the lost brothers you are. But we should in the meantime all learn the lesson that you are paying for so dearly.

We must rid ourselves of unconstructive criticism and the mortal danger of taking everything our union has achieved for granted. We must rediscover, love and cherish it.

Friday, 24 June 2016

Dear Europe...

The IPKat loves his European colleagues

Dear Europe

We are sorry.

Not one person in the IPKat team wanted to be writing this post this morning.  Least of all, me.  Despite my moniker, I have spent over 20 years in the UK, over half of which has been devoted to the study and practice of European intellectual property law.

As lawyers, we are taught that cases turn on the evidence.  Patent litigators will tell you that you win or lose on the credibility of your expert witness. Strong expert evidence, strong case, strong prospects of success.

The expert evidence was strong and unambiguous.  The UK must remain with the Union to continue to enjoy economic and political security and progress.  Business leaders, economists and heads of state all agreed that turning our backs on the European Union would spell disaster for the UK's economic future.  Our Katonomist, Nicola Searle, says she has never seen economists so unanimous on a subject.  They have so far turned out to be right with shares and the British pound plummeting to a 30 year low, this morning.  Experienced politicians and security advisers agreed that retreating from Europe would result in social and political insecurity.

The UK IP profession was in favour of remaining.  The negative impact on key innovative industries, including life sciences, could not be ignored.

On the cold, hard evidence, the UK should have voted to stay.  But the Leave campaign was built on emotion.  And instead of a judge, the vote went to a jury.  And any good trial lawyer will tell you, emotion can often displace the evidence.

And that is why we are writing to you.  We wanted to share our emotion this morning.

We are sad.

Many of us are angry.

Some are ashamed.

I am a European IP lawyer.  The IPKat team is heavily comprised of European IP lawyers, with representatives from the UK, Ireland, Italy and Switzerland in our mix.  Since the IPKat's founding in 2003, our blog's predominant focus has been on European IP developments.  A large proportion of our readership is European.

Although the IPKat has often been critical of decisions of European institutions, whether that be of the CJEU in SPC and trade mark matters, or the manner in which the Unified Patent Court came to fruition, we and the creative and innovative industries have overwhelmingly benefited from the European Union.  The harmonization of IP laws across such a significant marketplace has made it easier for industry to protect, exploit and enforce their IP.  It has led to job creation and fostered a shared understanding of how to improve IP law and practice for the benefit of all.

The European Union has made us stronger and closer as a profession.  At IP conferences, you often see mini reunions with UK lawyers running up to hug their German, French or Italian counterparts, opponents and friends.  It has benefited our clients, as much as it has enriched our professional and personal lives.

This morning's result is not a reflection of our profession's respect or love for our European colleagues or European IP law.  That, at least, remains.

We do not want to lose our bond and we will not.  You are our colleagues.  You are our friends.

One of the IPKat's key objectives is to bring our global IP community closer together by sharing IP decisions, legislation and practice from across the world with our readers.  Our aim is that by fostering a shared understanding of our unique perspectives, we can work together to improve IP law for innovators, creators, users and the public.

The IPKat's objective is now even more important.  We will be as engaged as ever in European IP law, sharing news and commentary from national and European courts.  With our readers, the IPKat will continue to foster the strong bond with our European colleagues that we have so luckily enjoyed for over forty years.

In the coming weeks, months and years, there will be a lot of questions about what the European IP landscape looks like without the UK.  We will keep you updated on the latest news and insight as matters progress.

But, for now, all we can say is - we are sorry.

Your friends

The IPKat Team

Thursday, 23 June 2016

Enlarged Board publishes decision: EPO President violated judicial independence

Merpel has now got her paws on several copies of the Enlarged Board of Appeal's decision in the latest round of the "House Ban" disciplinary action (reported here). If you like your IP decisions to be explosive, then she can't recommend it highly enough. The case reference is Art. 23 1/16, incidentally.

Readers can access the document here. It arrived in several copies today thanks to a number of correspondents who would no doubt prefer not to be identified, for reasons of modesty and career security. The decision is marked for "Publication in OJ", but the Board notes with admirable deadpan that its orders in the two earlier sets of proceedings, to publish those earlier decisions "have not yet been executed by the competent authorities of the Office."

It was already known that this third set of proceedings collapsed due to what was seen as an improper intervention by Mr Battistelli, the EPO President, regarding a decision by the EBA to hold oral proceedings in public, and that this was aggravated by the fact that the Administrative Council refused to distance itself from the actions of Mr Battistelli. Bear in mind, in what follows, that Mr Battistelli was not party to these proceedings, which were instigated by the Administrative Council (“Petitioner”) and the only other party was the impugned Board Member (“Respondent”).

Time prevents Merpel from doing full justice to this decision, but she believes that it speaks for itself pretty well in the most revealing passage, entitled:


36. In his letter of 10 June 2016 (see quotations in point XXVI. above), the Office President expressed his view that the Enlarged Board’s decision to hold public oral proceedings was unlawful. He further elaborated that the Enlarged Board does not have the competence to determine the facts in these proceedings. Finally, he indicated that he would not hesitate to take any appropriate steps available to him to ensure the orderly running of the Office and the safety of its employees in respect of the present case. 

37. The making of an unlawful decision is clearly misconduct. Hence the general, abstract threat to the independence of the Enlarged Board resulting from the amendment of Article 95(3) ServRegs (see para 8 to 13 above) has now crystallised as a result of the Office President’s procedurally irregular intervention in these proceedings. 

38. As the present case has shown, the Office President assumes the power to investigate and to suspend members of the Boards of Appeal and bar them from the Office. 

39. In addition, he may also propose any other disciplinary measures to the AC, pursuant to Article 10(2) (h)EPC. 

40. Thus, in the presence of these facts, ascertainable by any objective observer, all present members of the Enlarged Board find themselves threatened with disciplinary measures if they continue with these proceedings in the presence of the public, and seek to determine the facts of this case. This undermines the fundamental principle of judicial independence as set out in Article 23(3) EPC. Thus the conditions of Article 23(3) EPC are not fulfilled, unless the AC as appointing and disciplinary authority for all members of the Enlarged Board, including its external members, distances itself from this position of the Office President.

41. After having been given time during the in camera conference held on 14 June 2016 to reflect upon this situation, the Chairman of the AC made the following remarks in writing concerning the Office President’s letter and enclosure of 10 June 2016: 

"... Such a communication does not emanate from a party to the proceedings. In view of the fact that the Administrative Council is only represented in the proceedings pursuant to Article 12a(2) of the rules of procedure of the EBA, it cannot take position on a communication from the Executive Head of the Office. 

In this respect, and as per Article 23 (3) EPC, the EBA members are not bound by any instruction but must abide by the provisions of the EPC. This cannot be prejudicial to them, bearing in mind that the Council is the sole competent disciplinary authority for them ...”

42. The Petitioner in this case is the AC. The AC is the appointing and disciplinary authority for the Office President (the highest ranking appointee of the AC) , as well as for the members of the Enlarged Board, (the highest judicial authority of the EPO) . The Petitioner thus has an institutional obligation to clarify whether it endorses or not the Office President’s position as set out in his letter of 10 June 2016 and referred to above. 

43. For the Enlarged Board to be able to continue with these proceedings the position of the Petitioner would have to be that it did not agree with the Office President and acknowledged that, from an institutional point of view, the pressure exercised by the Office President in the present case was incompatible with the judicial independence of the Enlarged Board guaranteed by the EPC. As the Petitioner did not clearly distance itself from the Office President’s position, there is the threat of disciplinary measures against the members of the Enlarged Board. It is then the Enlarged Board’s judicial independence in deciding on this case which is fundamentally denied.

44. As can be derived from the statement of the Chairman of the AC, there was no clear and unequivocal declaration that the AC distanced itself from (or did not share) the Office President’s position. In such a situation, the Enlarged Board cannot legally continue with these proceedings. As a consequence it cannot make a proposal to the Petitioner to remove the Respondent from office. 

45. Thus to summarise, the Enlarged Board was reduced to the following alternatives:

— either, to take an “unlawful decision”; 

— or, to take a “lawful decision” according to the demands of the Office President, i.e. setting aside its decision on the public oral proceedings and taking as granted the facts established in the IU Report and/or the DC’s opinion.

46. In either case, the respective decision would be inherently vitiated because it would have been made under pressure from the executive and without the serenity and independence needed for a fair trial.

47. The intervention of the Office President, and this intervention alone, prevented the Enlarged Board from continuing the proceedings as had been planned, (see above points XVI to XXI) , from examining the case on its substantive merits as put forward by the Petitioner, and from establishing whether serious grounds for the removal from office of the Respondent existed in accordance with Article 23(1) EPC. 

The result of all this was that the EBA refused to make a proposal to terminate the appointment of the Board Member, ordered reimbursement of his costs, and ordered the decision to be published. Merpel is happy to comply with the last part.

One has to wonder how long Mr Battistelli's position can be considered tenable, given that he has been held by the highest tribunal in the European Patent system to have violated the judicial independence of that tribunal, and to have threatened its members? 

Then again, some AC delegates will not be fans of this decision (this being their third rebuff from the Enlarged Board in relation to a single disciplinary matter). Bear in mind that the AC was already given the opportunity to distance itself once from Mr Battistelli's actions and did not do so, or at least not unambiguously. One must assume that Mr Battistelli still enjoys the love and support of at least a faction within the AC (though Merpel hears that the faction shrinks at each meeting...).

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