From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Sunday, 23 April 2017

Should investment in innovation worry about geographic dispersion? Steve Case says "yes", but what about Pareto?

Does it matter that most innovative activity, at least in the United States, is taking place in a small number of VC-funded locations? Steve Case seems to think so. For Kat readers who may not recognize the name, Case was co-founder in the 1980’s of what later was called AOL. The company was a pioneer internet company, particularly in its vision of exploiting the platform in the creation of on-line communities. Case and AOL gained particular notoriety as a result of the merger with Time Warner in 2001. The deal has been criticized by some as one of the worst mergers of the internet age. Whether or not, Case’s guru status in the digital world seems to have been unaffected.

Case has become preoccupied with the future sources of innovation (who can argue with that?) and he has penned a widely-discussed book, “The Third Wave: an Entrepreneur’s Vision of the Future”. One of Case’s recent concerns, as he discussed in a recent interview and podcast on Bloomberg radio, is that 78% of all venture capital is invested in only three locations—San Francisco/Silicon Valley, Boston, and New York. So troubled is Case about this state of affairs that he has embarked on Rise of the Rest road trips in the US to seek/encourage significant innovation that might/should take place in other locations and which, in time, will also presumably enjoy a fair share of venture capital funding.

He pointed to medical technology and the advantages of supporting the tethering of innovative activities to leading medical centers. I.e., instead of opening yet another start -up in Silicon Valley, why not promote start-ups in Cleveland to support the innovation coming out of the Cleveland Clinic, or in Baltimore to support similar activities at the Johns Hopkins School of Medicine. Or, more generally, to encourage start-ups in Detroit instead of, e.g., Boston or New York, to take advantage of the large pool of engineers in Michigan (due in part to the presence of the auto industry), the lower cost of living and the more relaxed Midwestern life style.

Far be it from this Kat to take on Steve Case. Still, this Kat is having some difficulty in understanding the advantages to entrepreneurship and innovation that would follow from a greater geographic dispersion of such activity. (For purposes of this post, I disregard what may be a prime political consideration, namely that such dispersion might help prevent a further economic hollowing out on a geographic basis, thereby reducing the likelihood of populist excesses.) Once we discount this, the question is whether such dispersion will lead to greater aggregate innovative activity at the national level.

What comes to mind in addressing this issue are the dynamics of the so-called Pareto principle, which is described by Wikipedia as follows--
"The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity states that, for many events, roughly 80% of the effects come from 20% of the causes. Management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896, as published in his first paper, "Cours d'économie politique". Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population; Pareto developed the principle by observing that about 20% of the peapods in his garden contained 80% of the peas.

It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients." Mathematically, the 80/20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution [footnotes omitted].
Is not the current dispersion pattern perhaps an exaggerated instance of the Pareto principle? This Kat understands that this principle is far more nuanced that a single quotation might suggest and indeed it means different things to different people. But the underlying point suggests that the concentration of venture capital funding in only three centers is not necessarily a bad thing, and may even be positive. If a fourth (or fifth or sixth) start-up center for attracting significant venture capital will emerge, it will do on an organic basis, because the factors that have facilitated the current locations will also find a home in these additional locations. But it cannot be willed into existence.

Kat readers who want further convincing are invited to read the piece that appeared on February 28, 2017, on, “Why It’s So Hard to Build the Next Silicon Valley: Google brought its high-speed internet to Kansas City, but it didn’t turn the city into a tech paradise.”

The image at the top right was originally posted to Flickr by Thiago Avancini

The image at the lower left was made by Bill Ebbesen

Trade mark trolls in Cuba: an update

Back in 2015 the IPKat hosted an interesting report by Jaime Ángeles (Angeles Pons) on the problem of trade mark trolls in Cuba. 

Jaime has now prepared an update on the situation. Here's what he writes: 

"In a post in March 2015 we discussed how the Cuban trade mark system had been invaded by numerous trade mark applications (at least 90 fillings, although the actual number might be around 100) by NON-owners of signs similar to registered US trade marks, most of them very well-known (and some including words and designs alike). Applicants have been Cuban citizens, US companies, and even Dominican Republic citizens.
Cuba is a country with a first-to-file regime and opposition process, and most of the real owners of the trade marks have filed oppositions to defend their rights. The first Cuban citizen that filed for several trade marks was Gustavo Fuentes Ledo. He filed applications for 66 trade marks, 39 of them were subject to a formal opposition.
In the latest publication of the Cuban Trademark Office (OCPI) (30 March) one could see the several appeals filed by Fuentes Ledo (arguably the first Cuban trade mark troll). The OCPI denied his applications on grounds of unfair competition and bad faith.
Trade mark applications already decided are:
·       SM SAM’S CLUB in class 35
·       Chase & design in class 36
·       Office Depot & design in class 35
·       Capital One & design in class 36
·       Carnival & design in class 39
·       Spirit Lines & design in class 39
·       Clark & design in class 7

From the review of the decisions (we reviewed the “Informe Conclusivo” of trade mark applications: SM SAM´S CLUB and design No.2014-0488, dated 3 February 2017), the OCPI searched the internet for the trade marks and found that the trade marks existed and had been subject to extended international use. However the Cuban Trademark Office considered that the trade marks were not well-known in Cuba, at least at the moment. It considered that the opponents could not demonstrate use by Cuban undertakings or foreign investors in Cuba. It however conceded that a small portion of the population might have been exposed to those trade marks.
The OCPI relied on bad faith and unfair competition to deny registration, and considered that:
·       The applicant (Fuentes Ledo) had filed for 66 different trade marks between June 2014 and January 2015 in twenty different classes.
·       The internet search confirmed that all the trade marks filed by Fuentes Ledo were at least “very similar” to those used by third parties.
·       The opponents are well-established in their own markets, notably the US.
·       Searches in international trade mark databases returned no registrations in the name of the applicant (Fuentes Ledo).
·       The applicant, being a Cuban citizen, does not have any official (Government) permits to operate in Cuba, in any or all the different economic areas affected by the perspective trade marks.
·       Part of the goods and services covered by the trade mark applications are forbidden activities for an individual person in Cuba (“trabajo por cuenta propia”), eg manufacturing pharmaceutical or dental products and cruise lines services, “to mention some”. The products and services would be only valid in Cuba for authorized legal persons and companies.

An individual person
operating a cruise line?
According to the OCPI, those elements all together amounted to unfair competition. The OCPI considered that the applications would harm the interest of different agents in the marketplace (actual and potential entities) and consumers alike, as well as being detrimental to the public order and fair competition that must prevail with transparency, loyalty and in such a way as to allow the good development of commercial relations and the principle of legal certainty.

The OCPI also considered that the ultimate goal of the applicant was to harm third parties in an irrational way.
The OCPI did not mention, value or consider in the decisions the Panamerican Convention. However it mentioned that the decisions would comply with the international commitments assumed by Cuba with the Paris Convention and TRIPS.
It is pertinent to mention that even way back in 1997, the OCPI denied several applications or cancelled registration of well know trade marks by third parties, including: GUESS, Old Spice, Pizza Hut, Duracell, Liz Claiborne, Calvin Klein, Hewlett-Packard, Kotex, Winchester, Hard Rock Café.  

In the following months, decisions will continue to flow. No doubt that the rights of original trade mark owners will also prevail in the decisions to come."

Friday, 21 April 2017

Fordham 25 (Report 6): The Judges

Brad Smith at last night's Gala Dinner
After an incredible night at the gala dinner, where the AmeriKat's new IP idol, Brad Smith (Microsoft), delivered and incredible an emotive speech on the stories of innovation, IP and society that makes our field so unique and exciting, Day 2 of the Fordham conference got into swing.  The AmeriKat, rarely a morning Kat, did not make it to the sunrise sessions but she prowled in for the ever popular view from the judges session with a smattering of trivia and more serious issues.

Mr. Justice Arnold (Chancery Division, High Court) recalled working with both Robin Jacob and Christopher Floyd when they were all barristers. He enjoys cooking, but within his job, he finds it fascinating rather than "fun" with the most interesting area being trade marks.  He agreed that the most challenging area in IP law right now is copyright because of the impact of the caselaw of the CJEU and because of the extensive technological developments in the tech sector.  It is difficult to find consistent principles in the decisions of the CJEU on copyright, in part because the problems they are addressing are not simple.  He expected that over time the CJEU caselaw would be refined through dialogue with the national courts, just as it had been in the area of trade marks.  He commented that all supreme courts, including the UK Supreme Court, found IP cases challenging, in part because they do not have a specialist IP background.

Hon Annabelle Bennett (Chancellor, Bond University) considers that patent law is changing the most.  When asked what annoys her the most about advocates it was lawyers who do not answer the question.  It is also not okay to be interrupted by advocates.  Judges get to do the interrupting.
Hon. Annabelle Bennett

Mr. Justice Birss (Chancery Division, High Court, London) commented that occasionally when judges from other divisions (who do not handle IP cases) get together they talk about the cases they are doing.  When some of his colleagues who do not do IP cases hear about what is preoccupying his attention in court, they think that Mr Justice Birss's cases are incredibly interesting.  That is because it is!  The subject matter - be it an invention, a product or a service - is incredibly interesting.  In answer to whether everyone can become a patent lawyer, Mr Justice Birss commented that you don't have to have a science degree to be a great patent lawyer.  A lot of great patent lawyers do not have science backgrounds.  A lot of great copyright lawyers, are scientist.  There is no predetermination as to whether someone is going to be a great IP lawyer by virtue of their background.

Hon. Edger F. Brinkman (Court of The Hague, The Hague)  spent a year in the Court of Appeal but has returned to first instance and much prefers being a trial judge.  He missed the freshness of the cases and (like Rian) the vibrancy and speed of summary proceedings that can be completed in just a few weeks.  His preference is for patents, especially pharmaceutical patents, which remind him of his chemistry background.  He enjoys the trials themselves most, and very much likes asking "trick" questions - he is most annoyed when advocates know the answer!  He is in favour of specialist courts, but queried whether judges should stay on those courts for the entirety of their careers.   

Lord Justice Floyd (Court of Appeal) said that the Chancery Division is very interesting.  He said that is where he had the most fun.  He considers that the US Supreme Court practices, with the greatest respect to them, are verging on the anti-patent side.  It is very difficult for non-specialist courts.  He considers that trade mark cases are the most fun, including the Kit-Kat case and color trade mark cases, which are pushing the limits of protection to trade mark law.

Hon. Dr. Klaus Grabinski (German Federal Supreme Court) commented on a question on amicus briefs: the German courts have no concept of these submissions and would simply send them back!  Arnold J commented that the UK Supreme Court receives increasing numbers of interventions and welcomes them.

Hon. Gordon Humphreys  (Chairperson of the Fifth Board of Appeal, European Union Intellectual Property Office) explains that decisions should be consistent and if there is a variance in decisions then they should refer it to the Enlarged Board.  This is happening increasingly. In the past year there have been 3 referrals and there are two pending.

Sir Robin Jacob (Faculty of Laws, University College London) responded to a question on allowing new evidence at appeal level.  He felt that this rendered the appeal stage a new hearing rather than being a true appeal - parties should bring all of their case, and make it their best case, at first instance. 
Judge Rian Kalden

Judge Rian Kalden (Court of Appeal of The Hague) relished her work as a first instance judge, particularly enjoying fast, summary proceedings, but on the other hand likes the additional time for reflection that that appeal court benefits from.  She sees copyright as a key area of development and noted that the CJEU has recently begun to take an interest in this area.  Her advice for advocates is to avoid verbosity in written arguments where that is not strictly necessary.

Maria Eugénia Martins de Nazaré Ribeiro (Formerly Judge of the General Court of the European Union, Luxembourg) has spent 30 years at the General Court, although she didn't initially mean to be a judge.

Hon. Pauline Newman (U.S. Court of Appeals for the Federal Circuit, Washington, D.C.) said her work in private practice was more "fun", but the job of a judge was very interesting.  On the appellate side, the argument is always full of tension and drama.  However, that comes with the obligation to try to find the "right" answer - she didn't necessarily call that "fun".  She thinks that the developments in the IP field reflect what is happening in the nation more broadly - the evolution of the tech sector is driving not just GDP and international development, but also the growth in the patent litigation business.  Patent litigation is no longer the sleepy boutique practice it was when she entered it, it is now a hugely interesting and dynamic area.  The tech sector has also driven huge developments in copyright law, and perhaps that is more fun!
Judge O'Malley

Hon. Kathleen M. O’Malley (U.S. Court of Appeals for the Federal Circuit, Washington, D.C.) read Gideon's Trumpet when she was 13 and that is when she knew she wanted to be a judge. She says that you are never really ever prepared to be a judge until you get on the bench and do it.  The experience of being a trial judge is the best preparation. She likes first principles - analyzing jurisdiction, procedure and separation of powers.  Sometimes they come up in patent law but they often come up in all cases and that is what she enjoys the most.  Congress went out of the way not to create a specialist court as they wanted the judges to have a general court experience.  About half of those on the Federal Circuit have technical background but everyone is equipped to deal with science.  She considers that IP is becoming much more global and noted how often judges refer to foreign precedents.

Hon. Gerard Rogers Chief Judge (Trademark Trial and Appeal Board, U.S. Patent and Trademark Office) was formerly an interlocutory attorney in the Court, which he remembered being a very satisfying role as it involved so much control over the procedural path of the cases, shepherding them through discovery and up to trial.  The work of the chief TTAB judge involves hearing fewer cases.  He always wanted to be a journalist rather than a lawyer (having graduated in the Watergate era), and particularly enjoys the writing of the decisions.  In response to a question about the value of oral argument, he noted that the TTAB only hears oral argument in around 15% of cases.  This low value is  partly due to the nature of many decisions being ex parte appeals of examiners' decisions where the record is already highly developed.  However oral argument is still important in cases where the goods or services diverge from regular, consumer goods and the Board needs additional help to understand the nature of the case.

Hon. Misao Shimizu (Intellectual Property High Court, Tokyo) has heard a broad variety of cases, including family and tax law, as well as IP.  His court now hears 50% patent, 25% trade mark, and 25% copyright cases and he enjoys patent cases the most.  He is looking forward to hosting a pan-Asian IP conference in the autumn at which judges from several Asian countries will exchange experience and hold a mock IP trial.

Double-check your docketing!

We rely upon automated systems for so much in modern society.  But an automated system is only as reliable as its human inputs.  Following a recent EPO Board of Appeal Decision J 0023/14 (Re-establishment of rights) of 15.12.2016, Katfriend Heiko Sendrowski alerts us to the dangers of deficiencies in docketing systems - and checking procedures - when deadlines are at stake:


On 5 November 2012, the applicant received a notice from the EPO drawing attention to the non-payment of the renewal fee for the fourth year in relation to a European patent application. This notice stated that "if the renewal fee and additional fee are not paid in due time, the European patent application shall be deemed to be withdrawn".  The European representative promptly alerted the applicant and US attorneys by email, initially receiving no response. After chasing, the US attorneys responded on 20 March saying "Received!!!"On 6 May 2013, the appellant's European representative was informed that the time limit pursuant to Rule 51(2) EPC had been missed and that the application was deemed to be withdrawn. 

The applicant therefore filed a request for re-establishment of rights on 4 June 2013.  The applicant submitted that the European patent application had been "inadvertently, inexplicably and unintentionally" not entered into its docketing system (apparently as a result of human error - various national applications arising out of the same international application had been entered into the system).  One standard practice of the applicant's docketing system was to send periodic reminders to the appellant regarding upcoming annuities for patent applications pending before the EPO, but because the system was unaware of the existence of the European application in question, the checking process failed in the present case. 


Before discussing re-establishment of rights, the Board disagreed with the reasoning of T 1402/13 of 31.5.2016 (not the one of 25.2.2016!) that the loss of rights ensues upon expiry of the normal due date unless the additional fees are paid, implying that missing the last date for paying the additional fees does not have the "direct consequence of causing a loss of rights" as required by Art 122(1) EPC.  The Board noted that such reasoning is irreconcilable with the protection of legitimate expectations of EPC users. It was not the intention of the legislator to cancel re-establishment of rights as a means of redress in such cases.  It is thus possible for the rights to be re-established upon payment of the annuities plus surcharge (see sec. 2.5).

Is Kitten input any more reliable?
However, on the facts, the Board noted that the initial mistake was that the application was not uploaded by the applicant into its docketing and annuity system.  A cross-check was only performed on the data entered into the docketing system against documentation provided by attorneys and its internal proceedings were unsuitable for detecting missing data in the docketing system; the applicant's cross-checking system could not be considered independent and effective as demanded by the Boards (see sec. 3.2.3, 3.2.4).

The applicant's argument of an isolated error in an otherwise functional system was dismissed, because "the mere allegation that the case at issue was the first instance of unintended failure does not show that a satisfactory system was in place and that thus all due care has been taken" (see sec. 3.2.6).  On the facts, the applicant's appeal for re-establishment of rights was dismissed. 


The real error by the applicant was losing or ignoring the EPO communications drawing the applicant's attention to the imminent loss of rights. After all, had the applicant compared these documents with the contents of its docketing system it could not have failed to notice that the corresponding application had not been entered into the system in the first place."

Fordham 25 (Report 5): IP Remedies

The IP Remedies panel
After an invigorating session on doctrine of equivalents (which the AmeriKat plans to write up), the final panel session of the day in the patents track was on IP remedies.  Although sometimes forgotten in the rough of tumble of validity and infringement, it is the remedies which are the big motivator - on both sides - in litigation.  Laura Whiting reports:

"Nicholas Groombridge, introducing the panel, commented that in his day, remedies was not the most popular subject.  The focus of practitioners, at least in patent matters, was usually on validity and infringement and then, almost as an afterthought, on damages. However, that seems to have changed.
Hon Mr Justice Birss opened on the role of legislators and the courts in "crafting appropriate IP remedies" and the extent to which judges must step in to exercise discretion where legislators have (inadvertently) left gaps which need to be filled.  He noted that although substantive IP laws around the world are fairly similar, the remedies available to litigants differ widely from jurisdiction to jurisdiction and are often subject to judicial discretion.  For example, final injunctions are not granted uniformly, even in common law jurisdictions where they are understood to be equitable remedies: in the UK, the position is that the successful claimant is generally regarded as entitled to an injunction (Vestergaard); in the US, by contrast, that is no longer the case following eBay v MercExchange
Mr Justice Birss
Birss J explained that judicial discretion can be useful in order to fill the gaps left by legislators or where the issue at hand had never been envisaged by the legislature.  By way of example, in the UK Cartierdecision, legislation had paved the way for blocking orders in the context of copyright infringement (s97A CDPA 1988), but that jurisdiction was extended by the judge to cover trade mark infringement.  A further example was publicity orders, where the UK courts had extended the provisions of Art 15 of the Enforcement Directive to entitle the defendant to such an order (as opposed to the claimant) as it was considered appropriate to do so. 
Birss J gave the example of SEPs (and in particular FRAND obligations) as a situation where judges were left to exercise their discretion in the absence of any special legislation.  The regulations of the various SSOs leave the majority of the questions on FRAND outstanding, especially on the issue of how a FRAND royalty should be set.  So, the judges must exercise their jurisdiction to answer these questions. 
Richard Vary
Richard Vary mentioned that judicial discretion can lead to unpredictable outcomes but this is also a pragmatic method of legislating as some space for discretion can be required – for example in the discussions around the Rules of Procedure for the UPC, there was not perfect agreement between the stakeholders as to how the procedure should work.  Therefore drafting the Rules in a manner that allowed for future judicial discretion was a way forward that allowed consensus to be reached. 
Andrew Bowler agreed that judicial flexibility was a good thing, but commented that providing for a final injunction order to be truly optional would in his opinion move too far towards a situation where an infringer had little to fear from a patentee other than a judicially enforced compulsory licence in certain circumstances.  He acknowledged that there were particular problems in second medical use cases in defining an appropriate scope for an injunction. 
Richard then presented on his experience (as a district judge) of small claims in IP courts being brought by individuals with no legal qualifications.  The UK's Intellectual Property Enterprise Court (IPEC) small claims track is for disputes of less than £10,000 concerning IP rights (other than patents).  He suggested that the most important factor in making the small claims track work is its simple procedures.  There is no need for interim applications or hearings, nor disclosure (which, in his view, may not be needed even in larger cases).  It also requires a more interrogatory (sometimes interventional) judge than is traditional in the UK system to compensate for the lack of legal experience of the litigants.

Other important factors and speed and (low) cost.  A year to resolve a simple copyright dispute is too long – Richard considers this ought to be done in a matter of months (perhaps 4 or so) – but of course, litigants sometimes slow the process down.  In the IPEC small claims track, litigants in person are not discouraged because of the risk of adverse costs awards since the costs are strictly limited and usually do not include the other side's legal costs.

Nicholas asked what has been learned from the small claims system that can be applied to commercial IP cases.  Richard identified the Shorter Trials Scheme.  He also suggested that the removal of the UK costs regime would make the UK more attractive to litigants and suggested that the German system was more appealing.  Birss J commented that another important factor in the success of the IPEC was that the judges are specialists (to some degree) in IP law – that is especially important when the litigants are not specialists and may not be represented by specialist lawyers.  The judges have also learned to "say no" to litigants and lawyers on procedural questions, which enables a smoother and more streamlined procedure. 
Jill Ge
Yijun (Jill) Ge next clearly and concisely explained some of the recent developments in obtaining damages in China.  Previously, the damages regime was purely statutory and typically provided for very low damages (with an upper limit of RMB 1 million - about £113,000).  However, recently, the Beijing IP Courts have made an award of RMB 49 million (about £5.5 million) in respect of patents on USB technology.  This was assessed on the basis of (i) the plaintiff's lost sales and (ii) the defendant's gains from selling the infringing products.  The court ordered the defendant to produce books of accounts and when they refused, assumed the plaintiff's assessment of quantum. 
In practice, the Chinese courts' damages assessments are still relatively rough.  In the damages area there is still some work to be done, but Yijun is hopeful for further caselaw developments to clarify the position. 
Andrew commented that the UK experience is that the courts are able to accurately assess damages even in the absence of the full financial picture.  He commented however that some companies may consider that when facing the risk of compensatory damages only, it may sometimes be worthwhile to infringe patents.  In his view it may be worth looking for inspiration to copyright cases where additional damages have been awarded in order to further deter infringement. 
Klaus Grabinski noted that in Germany injunctive relief is automatic, but this is usually accompanied by an order to render accounts.  If that is not done, then the penalty can be quite high.  However, it is relatively rare for a case to progress to the assessment of damages – the plaintiff usually obtains all the information necessary to assess the quantum of the infringer's profits through the disclosure order and can usually settle at this stage. 
Finally, Penny Gilbert spoke on the UK "Arrow" declaratory jurisdiction, which was recently revisited in the FKB v Abbvie case.  The panel debated whether the UPC would have competency to consider such declaratory relief, with some scepticism being expressed given the court's exclusive competence."

Thursday, 20 April 2017

Fordham 25 (Report 4): Trade Secrets

After lunch was the topic of "Trade Secrets".  A huge topic in a short session, proved happy hunting ground for interesting issues by Laura Whiting who reports:  
"After John White introduced the panellists, James Pooley spoke about the three developments in trade secrets law in the year or so that has elapsed in since the US Defend Trade Secrets Act (DTSA) came into force and the EU Trade Secrets Directive was signed.  First up, the death of the "inevitable disclosure" doctrine based on Pepsico v Redmond, 54 F.3d 1262 (7th Cir 1995) which assumed that any departing employee potentially carried knowledge acquired in their employment and could therefore be subject to an injunction. Under the DTSA this is no longer the presumption and proof of bad behaviour by the employee is required.   
Jim Pooley
Next, Jim discussed whether the DTSA has extra-territorial effect. According to the principles of US statutory interpretation, extraterritoriality has to be specifically intended by Congress.  He reported that the DTSA does not explicitly provide for extraterritoriality, but §4 suggests that overseas acts impacting US trade secrets may be subject to the DTSA.  Therefore whether or not there is extraterritorial effect in respect of any of the provisions of the DTSA remains unclear. 
Jim considered the Trade Secrets Directive  (the Directive) was a "huge step forward for Europe" and represented a vast improvement over the former patchwork of European trade secrets protection.  On the plus side, it provided for a single rulebook, however, there was some downside in the lack of clarity of the drafting of some of the provisions  He was also concerned that some of the exceptions to liability could ultimately prove harmful.  Jim finished by offering his view that TRIPS required trade secrets to be protected as IP and that therefore interpretation of the Directive in accordance with TRIPS could resolve some of the potential problems.
The AmeriKat in human form
On this point, Giovanni Casucci commented that trade secrets are not protected by TRIPS as a sui generis property right.  he reported that in Italy, the EU Enforcement Directive is not applied to enforcement of trade secrets, but instead national procedures are used to obtain seizures and evidence collection in order to prevent unfair competition.  These provisions are available in cross-border basis and therefore can provide

Huw Evans commented that the Directive is aimed at enhancing the protection of trade secrets in the EU and therefore it is to be hoped that it will be interpreted in a manner that supports this aim.  He acknowledged that various member states provided for procedural mechanisms to collect evidence (e.g: the saisie contrefaçon, UK disclosure). 
The IPKat's own Annsley Merelle Ward (a.k.a. the Amerikat) eloquently introduced the philosophical question: is there an existential crisis in the equilibrium between patent filings and trade secrets?  She noted that various commentators from industry have suggested an increased trend for a preference for trade secrets, leading to a decrease in innovation.

In Annsley's view, there is no need to choose between one or the other. Patents and trade secrets are complementary, providing the subject matter of protection does not overlap.  She suggested that perhaps the uncertainty is due to the inherent conflict in the patent bargain – does the disclosure requirement (sufficiency in Europe, enablement in the US) fail in communicating the essentials of the patented invention to researchers, on which to base further innovations, whilst at the same time disclosing too much for the comfort of some potential patentees?
She also suggested that the courts may also contribute to the move towards trade secrets.  A patentee has to face multiple challenges to the validity of their key patents – it is not in a patentee's interest to disclose too much in a patent, but disclose too little and they face potential invalidation.  Perhaps this underlies the current trend for sufficiency attacks?
Huw in Evans form
Proposing an answer to her own question, Annsley concluded that the patent bargain cannot be responsible for the increasing interest in trade secrets.  Instead, the upsurge in interest in trade secrets provides an opportunity to re-examine the patent bargain in relation to disclosure and, in particular, to carefully consider how this is evaluated.
Victoria Cundiff noted that, like a patent, trade secret litigation also involves disclosure of the details of an invention, albeit much further down the line and (hopefully) under a protective (or similar) order.
Giovanni commented that Italian courts are not pushing reliance on trade secrets (in preference to patents) as they require the plaintiff to prove the identity of his trade secret as well as to demonstrate that it has been kept securely.  He concluded that the Directive did not necessarily encourage reliance on trade secrets, and he did not consider it to be an alternative to patent protection.  Huw added that the trade secret route was only really viable for material which could genuinely be kept secret and, further, it frequently involved (at present) difficulties in enforcing of trade secrets.  There are also issues around the embarrassment which might be caused to clients as a result of trade secrets leak, since that involves acknowledging a security breach.  Further, trade secrets litigation is, in practice, messy and expensive.

Jim recounted that, in his experience, clients are increasingly focusing on high quality patents that can easily be asserted or defended.  Trade secrets are being created, not as a side project to patenting, but as an active choice.  The decision is being made on a case by case basis.  On enforcement, he said that the US discovery obligations make it easier to commence proceedings based on a reasonable suspicion – and while he did not endorse the EU adopting US style discovery (!), this did allow plaintiffs to start cases where otherwise they may not be able to obtain the necessary evidence.  Giovanni noted that since the IP Enforcement Directive had been implemented, most EU countries had provision for some form of ex parte search or seizure order.  Therefore a plaintiff could obtain evidence of wrongdoing.  Jim commented that by comparison to patent enforcement, it was clear that trade secrets cases required access to much more evidence in order to prove misappropriation.  Huw noted that UK Anton Piller orders (originating, as Sir Robin Jacob pointed out, in a trade secrets case) were difficult to obtain, but that was because regular disclosure was provided for in UK procedure.
Victoria Cundiff
Trevor Cook commented that the language of the Directive was inconsistent with the treatment of trade secrets as IP rights.  However, Recital 39 of the Directive should be interpreted so that the IP Enforcement Directive should fill any holes in the specific provisions of the Directive.  He further asked whether the planned UK implementation of the Directive in June 2018 would result in the replacement of the UK's "fully functioning judge-made trade secrets law" with the ambiguity of the freshly drafted provisions of Directive.  He questioned whether this was desirable when the UK will no longer have the ability to clarify these provisions via the CJEU.  Annsley commented that to her knowledge the UKIPO has not been particularly vocal on whether or not the Directive would be implemented as planned - likely as they have other issues to preoccupy themselves.  Watch this space!
Giovanni Cassuci
Annsley mentioned that the DTSA has changed pre-litigation behaviours: parties have started coming to court earlier in order to discuss what evidence might be ordered.  Victoria commented that the DTSA has focused lawyers' attention on how they should approach litigation of this type.  Often it is not possible for parties to establish the full extent of the evidence required to obtain an ex parte seizure order – where this is the case, the DTSA's provisions have encouraged parties to request early case management conferences with detailed provisions as to how the case should be actively managed.  Jim added that in US proceedings, he anticipated that parties would soon be required to define their trade secrets at an early stage in litigation in a manner similar to a patent claim. 
Jim mentioned that an early draft of the Chinese draft unfair competition law contained a burden shifting provision in trade secrets cases where the plaintiff could demonstrate that the defendant's product or process was so similar that it appeared inevitable that it incorporated the trade secret.  This was an interesting legislative approach which might address the evidential issues facing potential plaintiffs."

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