Issue 10
27 November 2018
The essentials
Standard essentials for 5G and the IoT
Changing China
A new global force in IP
Under the bridge
The US patent troll problem Harness the power of Patent information with Minesoft ·
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In this issue
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Editor: Becky Butcher beckybutcher@blackknightmedialtd.com +44 (0)203 750 6018 Deputy Editor: Barney Dixon barneydixon@blackknightmedialtd.com +44 (0)203 750 6026
Under the bridge
The essentials
Solving the issue of ‘patent trolls’ is not a simple matter
Nokia’s Kerry Miller discusses recent draft guidance for licensing SEPs
Brexit withdrawal
Pregbalin dispute
IP aspects of the UK’s draft withdrawal agreement analysed
Warner-Lambert’s appeal in the Pregabalin case has been dismissed
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Junior Reporter: Ben Wodecki benwodecki@blackknightmedialtd.com +44 (0)203 750 6017 Designer: James Hickman jameshickman@blackknightmedialtd.com +44 (0)203 750 6021 Contributors: Jenna Lomax, Ned Holmes, and Maddie Saghir
Office Manager: Chelsea Bowles accounts@blackknightmedialtd.com Published by Black Knight Media Ltd Copyright © 2018 All rights reserved
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.UK domains
China insight
The number .UK domains suspended for illicit activity has doubled
Unitalen’s Lei Zhao discuss recent changes to China’s ecommerce law
IP Portfolio Manager: Serena Franklin serenafranklin@blackknightmedialtd.com +44 (0)203 750 6025 Publisher: Justin Lawson justinlawson@blackknightmedialtd.com +44 (0)203 750 6028
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Inclusivity in IP
Trademark bullying
Fiona Watkins and Tim Hartland talk inclusivity measures in the IP sphere
TrademarkNow’s Nadaline Webster examines macrosocial changes
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Brexit Update · Latest News
The Palace of Westminster, London, UK
Brexit withdrawal agreement reveals IP rights future EU trademark rights and community designs will be maintained in the UK post-Brexit, according to the official UK government withdrawal agreement. Existing EU trademarks, registered designs and unregistered designs will be ‘cloned’ onto the UK register after the Brexit transition period. This had already been announced as part of a no-deal scenario, but is now part of the UK Government’s official draft Brexit withdrawal agreement. Holders of IP rights which have been registered or granted before the end of the transition period will become the holder of a comparable UK right. The trademark will consist of the same sign and the same goods and services. The registration, grant or protection of the equivalent mark will be granted free of charge. The EU Intellectual Property Office, the Community Plant Variety Office and the European Commission will now need to provide the UK Intellectual Property Office will the relevant information to make the cloning procedure commence accordingly. Rights of representation for attorneys at the EU Intellectual Property Office (EUIPO) will also be maintained throughout the transition period as part of the agreement. The withdrawal agreement was announced on the evening of 15 November as UK prime minister Theresa May claimed she had secured the backing of her cabinet for the agreement. However, Brexit secretary Dominic Raab has since resigned in protest of the agreement. Raab, the second Brexit secretary to resign after David Davis left the post in July, said in his resignation letter that he “cannot support the proposed deals”.
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Immediate past-president of the Chartered Institute of Trademark Attorneys Kate O’Rourke commented: “Businesses and IP rights owners will be reassured that the continued protection of registered EU trademarks and registered community designs in the UK has been reaffirmed in the draft withdrawal agreement.” “We are encouraged that rights of representation at the EUIPO will continue for ongoing proceedings.” O’Rourke said: “This ensures some continuity and is a step in the right direction.” “However, it is very disappointing that there is no clarity on continued rights of representation for UK chartered trademark attorneys before the EUIPO.” “We firmly believe that it is in the best interests of business and the UK legal professions that UK professional representatives should retain their rights to practice before the EUIPO” Mewburn Ellis partner Robert Watson said that the withdrawal agreement cannot come into force until it is approved the EU Council, the UK Parliament and the EU Parliament. Watson describes the process of getting the agreement signed as “[not] a straightforward process”. He reminds that further amendments could be added during the approval process. Watson also highlights that the agreement also provides a transition period until the end of 2020, during which period the UK will remain within the EU systems. The equivalent UK right will be provided to holders of EU trademarks, registered community designs and community plant variety rights at the end of the transition period. www.ippromagazine.com
Patents · Latest News
The European Patent Office, Rijswijk, The Netherlands
‘Urgent action’ needed on EPO disciplinary cases at ILOAT The European Patent Office (EPO)’s Central Staff Committee (CSC) has called for “urgent action” on two staff disciplinary cases currently before the International Labour Organisation Administrative Tribunal (ILOAT). In June 2018, the ILOAT set aside disciplinary measures on a number of EPO staff representatives, including one ex-staff member now employed by the Staff Union of the EPO (SUEPO). In a letter addressed to all EPO staff, the CSC said these cases resulted from “a political campaign launched by the previous president [Benoît Battistelli] and his administration, aimed at weakening any opposition to their plans”. The CSC explained that new president, António Campinos, had concluded cases relating to two of these employees— Malika Weaver and Ion Brumme—but this did not “clean the slate”. Weaver had been accused of breaching her duties by exerting “undue pressure” on a colleague in order to “prevent a settlement between the EPO and that colleague”, while Brumme was accused of “breaching the highest standards of integrity expected of him” under the EPO’s service regulations by encouraging staff members to sign an “unlawful agreement”. Weaver was downgraded by one grade and two steps by the office, and Brumme was dismissed. Both decisions were later overturned by the ILOAT together with moral damages. In its letter, the CSC remarked on other disciplinary cases against staff representatives and SUEPO officials and said it “cannot see that the office has learnt from the other cases”. The CSC specifically referred to the case of Elizabeth Hardon, which was also heard at the ILOAT. She was dismissed by the EPO, but the ILOAT reversed this, returning the case to the EPO’s disciplinary committee. The tribunal requested that the EPO president consider the possibility of an external reviewer for arbitration or mediation. The CSC said it does not see this happening.
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“Quite the contrary”, the letter said, “Elizabeth Hardon will soon face a new disciplinary committee instigated by the same old administration, and apparently with the same old charges— even though the administration’s behaviour has already been castigated by the tribunal”. It also took aim at the case of Laurent Prunier, whom it called the “last of the the staff representatives / SUEPO officials dismissed by [Battistelli]”. According to publicly available information, Prunier was accused of wrongdoings, which he denied. The CSC said in a letter to the EPO administrative council that these wrongdoings had not occured. It added: “The judgments have preserved the president’s dispositive powers. We, for our part, consider that amnesty would be a fair execution of the judgments. In all cases, it would also serve social peace and justice.” The CSC also called for the EPO’s internal appeals committee to be “repaired”. “Staff representatives face difficulties accommodating their workload in the appeals committee with the workload in their other duties”, the letter said, “judgments 3971 and 4050 made public these difficulties, resulting in disciplinary measures against Aurélien Pétiaud and Michael Lund, which the tribunal considered ‘within the range of acceptability’ or ‘not to be disproportionate’. It is now absolutely clear that those disciplinary measures were politically motivated as part of an intimidation campaign against staff representatives.” The CSC called for reparation of the “torts inflicted on Pétiaud and Lund”, which it said would serve social peace and justice and “draw a final line under an inglorious chapter in the office’s history”. Requests from the staff committee for the letter to be published on the its announcement area of the EPO’s intranet were denied by EPO principal director of human resources, Elodie Bergot. www.ippromagazine.com
Patents · Latest News Gilead withheld safer HIV drug to monetise its patent portfolio, claim attorneys Three US attorneys have filed a lawsuit against pharma company Gilead accusing it of hiding a safer HIV drug in order to protect its patent for a less safe drug.
Gilead only began warning consumers about potentially dangerous side effects of TDF, when its safer alternative, TAF, began its patent term.
Bob Hilliard, Steve Berman, and Ben Crump of Hilliard Martinez Gonzales claimed that Gilead was aware that Viread, also known as TDF, could damage a patient’s bones and kidneys, yet decided to delay the availability of a safer version of Viread called TAF.
Hilliard explained: “For nearly two decades, Gilead has been raking in billions of dollars each year from the sale of the TDF-containing drugs that are the subject of our lawsuit— medications used primarily for treatment of people living with HIV.”
According to Hilliard, Berman and Crump, Gilead delayed the safer version of Viread for 15 years in order to extend the commercial life of its original patented drug.
Hilliard concluded: “If Gilead withheld TAF during its patent exclusivity with regard to TDF, Gilead could maximise its profits by monopolising the market during the exclusivity period, releasing TAF prior to expiration of TDF exclusivity, and encouraging prescribers to switch patients from TDF to the safer TAF medications before entry of generic TDF into the market.”
They said that it was only when the original drug neared the end of its patent life that Gilead began to pitch the newer version as a safer drug. The lawyers claimed that Gilead stifled the potential market for generic TDF versions.
“This is what Gilead did do, and people living with HIV paid the price.”
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Patents · Latest News UK Supreme Court dismisses Warner-Lambert appeal The UK Supreme Court has dismissed an appeal from WarnerLambert in the Pregabalin second medical use case. The Supreme Court dismissed Warner-Lambert’s appeal with Lord Jonathan Mance and Lord Patrick Hodge questioning whether there was sufficient disclosure in the specification for certain claims. The court unanimously affirmed a lower court decision and rejected Warner-Lambert’s application to amend its patent in order to narrow it. The Supreme Court’s ruling could make patents for biotech pharma companies easier to avoid and make it them more vulnerable to invalidation. Mylan and Actavis were successful in revoking WarnerLambert’s patent at the UK High Court. On appeal, the UK Court of Appeals affirmed the High Court’s decision, ruling that High Court justice Richard Arnold’s rejection of Warner-Lambert’s arguments on the basis of lack of an inventive step was correct. On appeal to the Supreme Court, Warner-Lambert argued that all claims of its patent were valid and that its main aim was to establish the validity of its claims relating to neuropathic pain. Its appeal was dismissed after an Actavis and Mylan cross-appeal that argued that none of the claims relating to neuropathic pain were valid. Mewburn Ellis partner Nick Sutcliffe called the Supreme Court’s decision “bad news for patentees, not least in the biotechnology and pharmaceutical fields”. He said: “The ruling will make patents easier to avoid and more vulnerable to invalidation and thus weaken patent holders’ rights and ability to innovate with confidence.” “The ruling confirms that patentees need to provide a significantly broader range of evidence to justify the scope of their patent protection.” “[This] risks placing an onerous burden on rights holders and thus increases the cost and uncertainty of obtaining and enforcing patent rights.” Sutcliffe warns that patentees may need to increase the amount of experimental data in their patent filings as a result of the ruling.
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Womble Bond Dickinson hires patent superstar Brent Babcock, an intellectual property litigation attorney, has joined Womble Bond Dickinson. Babcock, who joins from Knobbe Martins, will head the firm’s US Patent Trial and Appeal Board trials practice group. He has represented clients in more than 130 PTAB proceedings and has also been involved in more than 35 patent interferences. He has over 25 years experience in patent litigation and focuses his practice on serving tech industry clients. Babcock has been involved in trials at the USPTO and has conducted his business in postgrant proceedings including inter partes reviews, post-grant reviews, and derivation proceedings. The leader of Womble Bond’s US intellectual property litigation group, John Morrow commented: “There is no substitute for experience, and Brent Babcock has an impressive track record in patent litigation. He understands the business needs of clients, not just their legal needs, and works to ensure that litigation serves those clients’ overall business goals.” Womble Bond’s California offices managing partner, Mike Gencarella, added: “Babcock brings a strong focus on tech sector patent litigation, and those skills are a perfect fit for our existing services here in our California offices. I know our clients will benefit from Babcock joining the Womble Bond Dickinson team.”
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Patents · Latest News
Qualcomm must licence SEPs to other modem chip suppliers Qualcomm is obligated to licence standard-essential patents (SEPs) to modem chip suppliers, according to a new ruling in its dispute with the US Federal Trade Commission (FTC). In a ruling at the US District Court for the Northern District of California, judge Lucy Koh granted the FTC’s motion for a partial summary judgement, which questioned whether two industry agreements require Qualcomm to licence its SEPs to other suppliers of baseband processors. The FTC took Qualcomm to court in January 2017, accusing it of engaging in anti-competitive tactics and acting in bad faith during SEP licensing. Qualcomm was accused of using unfair practices to maintain its monopoly on the supply of key semiconductor devices used in cell phones and other consumer products. The FTC’s complaint was brought under section five of the Federal Trade Commission Act, which prohibits “unfair methods of competition in or affecting commerce”. However, the FTC’s motion for partial summary judgement did not seek to prove that Qualcomm violated section five, and instead the FTC sought a ruling that Qualcomm’s voluntary fair, reasonable and non-discriminatory (FRAND) licensing commitments to the Alliance for Telecommunications Industry Solutions (ATIS) and the Telecommunications Industry Association (TIA) require it to make licences available to competing modem-chip sellers. ATIS and TIA, two standard-setting organisations, will approve a standard that requires the use of a SEP only if certain commitments are agreed to. As part of its agreement ATIS requests the SEP holder to provide “assurance that a licence to such essential patent claims will be made available to applicants desiring to utilise the licence for the purpose of implementing the standard … under reasonable terms and conditions that are demonstrably free of any unfair discrimination”. Obligations under TIA are similar, asking that SEP holders commit to licence SEPs to all applicants under terms and
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conditions that are reasonable and non-discriminatory and only to the extent necessary for the practice of any or all of the normative portions for the field of use of the practice of the standard. Qualcomm argued that these commitments only obligate it to licence its SEPs to applicants that supply complete devices like cellular handsets, not applicants that supply components like modem chips. The FTC contends that the policies require Qualcomm to licence its SEPs to all applicants, including competing modem chip suppliers. In considering the contractual scope of a SEP holder’s FRAND commitments under the ATIS and TIA policies, judge Koh looked at precedent from the US Court of Appeals for the Ninth Circuit. She found that Ninth Circuit precedent establishes that Qualcomm’s FRAND commitments include an obligation to licence to all comers, including competing modem chip suppliers. In Microsoft v Motorola, the Ninth Circuit ruled that standardsetting organisations require members who hold IP rights in SEPs to agree to licence those patents to all comers on reasonable and non-discriminatory terms. The Ninth Circuit repeated this core principle in a later ruling, holding that a SEP holder “cannot refuse a licence to a manufacturer who commits to paying the reasonable and nondiscriminatory rate”. Qualcomm argued that the Ninth Circuit’s rulings were not relevant to its case with the FTC, because the appeals court did not “consider whether any language in that policy limited the scope of the obligation to licence products that actually practiced the relevant standard”. But judge Koh disagreed. She argued Qualcomm was ignoring that the Ninth Circuit’s decision in the Microsoft case with Motorola was interpreting a standard-setting organisation www.ippromagazine.com
Patents · Latest News policy with almost identical language to the ATIS and TIA policies. The ruling stated: “Qualcomm’s own practices also contradict its current positions that the IP rights policies permit Qualcomm to discriminate against component suppliers—including modem chip suppliers—and that modem chip suppliers never receive SEP licences. Qualcomm concedes in its opposition brief that another modem chip supplier received a SEP licence to produce modem chips.” Judge Koh also found that Qualcomm itself had received such licences to supply components, such as modem chips. Furthermore, judge Koh observed that Qualcomm itself had emphasised—in prior litigation—that a SEP holder may not discriminate in licensing its SEPs. Ericsson sued Qualcomm for patent infringement, accusing Qualcomm products, including two modem chips, of infringing Ericsson’s SEPs. In that case, Qualcomm argued in a motion for partial summary judgement, that a TIA policy—the same policy at issue in the FTC’s motion for summary judgement— required Ericsson to license any patents required to develop products compliant with a given standard.
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Koh remarked: “Qualcomm trumpeted the same nondiscrimination principles it attempts to reject here, as Qualcomm argued that the TIA IPR policy ‘ensures that all industry participants will be able to develop, manufacture, and sell products compliant with the relevant standard without incurring the risk that patent holders will be able to shut down those operations.’” “In an affidavit filed in support of that motion, Qualcomm’s founder attested that Qualcomm licensed its SEPs ‘to companies interested in developing [standard] compliant products’ and that Ericsson assured Qualcomm that Ericsson would licence ‘any patents whose use would be required for compliance’ with the relevant standard.’” Qualcomm’s founder said that modem chips were among the products the company considered compliant with the relevant TIA standard. Considering this, judge Koh ruled in favour of the FTC, granting its motion for partial summary judgement.
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Copyright · Latest News Taste of cheese not eligible for copyright protection rules CJEU The taste of a Dutch cheese is not eligible for copyright protection, according to a ruling from the Court of Justice of the EU (CJEU). The CJEU made the decision in a hearing yesterday (13 November) as part of an ongoing dispute between Smilde Foods and Levola Hengelo BV over the taste of a spreadable cream cheese dip. The disputed dip, Heksenkaas, was created by a Dutch retailer in 2007. The intellectual property rights were later transferred to the current rightsholder, Levola. Smilde had been manufacturing Witte Wievenkaas, a cheese product that Levola alleged infringed its copyright for the taste of Heksenkaas. Levola asked the Dutch courts to order Smilde to cease the production and sale of Witte Wievenkaas. It claimed that the taste of Heksenkaas was protected by copyright and that Smilde’s product was a clear reproduction of that work. The Regional Court of Appeal for the Arnhem-Leeuwarden area (Gerechtshof Arnhem-Leeuwarden) forwarded the case to the CJEU, asking whether the taste of a food product can be protected under the EU Copyright Directive. The CJEU ruled that the taste of a food product cannot be identified with precision and objectivity. It argued that the factors for tasting a food product are based on age, food preferences and consumption habits, and is therefore far too subjective to be protected by copyright.
significant difficulties when defining the scope of the subject matter that was protected and assessing whether or not the taste of a second product was an infringement.” He added: “In addition to clarifying the legal position for the food and drink industries, the decision provides some insight into the test to be met for other potential copyright works. “The court has explained that it must be possible to identify the copyright work with sufficient precision and objectivity. In particular, the prospect of obtaining copyright protection for a scent would appear to be remote, despite a previous favourable decision of the Supreme Court of the Netherlands, given that the points made by the CJEU as to the subjectivity of taste and the impact of environment and context on taste could be said to apply equally to scents. The CJEU has delivered a pragmatic judgment which provides helpful clarification and yet—in its reference to the ‘current state of scientific development’—may have left the door open to an appropriate claim in the future, in the event it is possible to define a taste with enough precision to allow a meaningful comparison to be made with a taste of a second product.”
The CJEU added that currently, it is not scientifically possible to precisely distinguish food products from their taste.
Penelope Thornton, senior knowledge lawyer at Hogan Lovells, added: “The CJEU has held that the taste of food is not protectable as a copyright work under EU law because it cannot be pinned down with precision. The notion that a work has to be pinned down with precision and objectivity is new and raises questions about whether this test applies to all works, not just the taste of food.”
Alex Borthwick, of counsel at IP law firm Powell Gilbert, commented: “The CJEU’s decision was to be expected given the uncertainty that would arise were tastes to be protectable as copyright works. In its reasoning, it is clear that the CJEU was mindful that taste is highly subjective, which would cause
Clare Jackman, a trademark attorney from Norton Rose Fulbright, also weighed in on the case, saying: “Copyright primarily seeks to protect artistic works. Clearly, the cheesemaker here considered that his cheese was the product, or an expression of, his creativity.”
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Copyright · Latest News LoveRetro and LoveROMS must pay $12.2 million to Nintendo for infringement The owners of former retro video game emulator sites LoveRetro and LoveROMs must pay Nintendo $12.2 million in damages for trademark and copyright infringement.
In addition to hosting copyrighted games, Nintendo also alleged in its lawsuit that the sites also distribute proprietary BIOS software and utilises trademarked logos and characters.
Husband and wife Jacob Mathias and Cristian Mathias were ordered to pay the sum to Nintendo as part of a ruling from the US District Court for the District of Arizona.
Nintendo’s complaint referred to LoveRetro and LoveROMs as “open and notorious online hubs for pirated video games”.
Nintendo filed a complaint against LoveRetro and LoveROMs in July at the court accusing the two websites of trademark and copyright infringement.
Nintendo said the sites were being used to distribute proprietary BIOS software, and infringed trademarked logos and characters.
LoveRetro and LoveROMs allowed users to play older or ‘retro’ games meant for consoles on a PC using an emulator.
The Arizona court ruled in favour of Nintendo, ordering both sites and its owners to be immediately and permanently enjoined and restrained from infringing Nintendo content.
The two websites featured older games from now-defunct consoles, including those whose intellectual property rights are owned by Nintendo.
The court ordered both sites to destroy any infringing content and transfer the www.LoveRetro.co and www.LoveROMS.com domains to Nintendo.
More than 3 billion infringing URLs removed from Google search, says piracy report Google has removed more than 3 billion URLs from its search engine for infringing copyright in 2018, according to the tech giant’s most recent piracy report. The ‘how Google fights piracy’ report explains the programmes, policies and technology that Google employs to combat piracy online.
legitimate content, such as Google Play Music and YouTube. He explained that Google has been working towards cutting pirates off at their supply, preventing them from engaging in copyright infringement using Google’s ads and monetisation systems.
In its report, Google said it had invested more than $100 million in its Content ID rights management system and paid the music industry more than $1.8 billion between October 2017 and September 2018 in advertising revenue alone.
Manara said Google’s services are generating “more revenue for creators and rights holders, connecting more people with the content they love, and doing more to fight back against online piracy than ever before”.
Google also found that it had disapproved more than 10 million advertisements that were suspected of copyright infringement or linked to infringing sites.
“We’re proud of the progress this report represents. Through continued innovation and partnership, we’re committed to curtailing infringement by bad actors while empowering the creative communities who make many of the things we love about the internet today.”
In a blog post, Google’s head of copyright, Cedric Manara, explained the company’s five guiding principles on its investments in fighting piracy, which includes creating better legitimate alternatives, following the money involved in online piracy, and providing transparency to copyright owners. According to Manara, Google has been developing products that make it easy for users to access
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He added that Google’s investment in technology, tools and resources to prevent copyright infringement on its platforms, as well as its work with others across the industry on efforts to combat piracy, have resulted in a piracy decrease while spending on legitimate content rises.
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Copyright · Latest News UK domain names suspended for infringing activity doubles in 2018 The number of .UK domain names suspended for infringing activity has doubled in 2018, according to Nominet’s latest report on the top-level domain. According to the .UK domain name operator’s 2018 ‘tackling online criminal activity’ report, between 1 November 2017 and 31 October 2018, 32,813 .UK domain names were suspended, almost double the amount from the previous 12 month period. This number represents only 0.27 percent of the more than 12 million .UK domains currently registered. Nominet also revealed that the majority of takedown requests came from the City of London Police’s Intellectual Property Crime Unit, which sent more than 32,000 requests. Some 114 requests did not result in a suspension, up from 32 in the previous year. Reasons for domains not resulting in suspension ranges from the domain name already being suspended by the registrar or being transferred to the IP rights holder as a result of a court order. Only 16 suspensions were reversed following successful reviews. Nominet also revealed that it had flagged more than 2,700 domains under its proscribed names policy, though no suspensions were made. Nominet said that it “expressly prohibits” .UK domains from being used for any unlawful purpose and, when alerted by law enforcement agencies, works quickly with registrars to suspend domains. Russell Haworth, CEO of Nominet, commented: “The upward trend we are seeing in suspended domains confirms that criminals are continuing to seek opportunities in the UK namespace—be it the issue of counterfeits online, or where criminals relentlessly target consumers with malicious content, via domains registered for phishing.” “Our ongoing efforts to keep the namespace safe can also be seen through our domain watch initiative that uses a technical algorithm to promptly suspend newly-registered domains with a very high phishing risk.” He added: “Since July this year, 129 domains targeting the private and public sector have been suspended—for example, barc1ays.co.uk or security-paypal.co.uk. Working closely with the law enforcement community and using our established processes, network analytics and cyber security tools, will ensure that .UK remains a difficult space for criminals to operate.”
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Corsearch acquires Yellow Brand Protection Corsearch has acquired Swedish brand protection provider, Yellow Brand Protection. Yellow will immediately become a part of the Corsearch’s brand protection service. Corsearch says that the acquisition will help aid increasing online IP infringement. Yellow was founded in 2010 and provides clients with the necessary resources to prevent counterfeiting sales online. It currently operates in over one thousand online marketplaces and 35 social media platforms. Yellow CEO, Daniel Bennett, commented: “Companies large and small are realising the importance of protecting their brands, sales and consumers from online counterfeiting and IP infringement.” “Corsearch and Yellow are an outstanding fit. Our leading technology and employee expertise, combined with Corsearch’s trusted industry presence with leading companies and IP law firms, will further increase our value to businesses in the marketplace globally.” Corsearch’s CEO Tobi Hartmann added: “We are thrilled to be combining these two wellestablished companies.” “Corsearch and Yellow will be even stronger together, providing our clients with a robust offering of trademark, domain and online brand protection solutions.”
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Patent Trolls · Feature
Hvitserkur ‘the Petrified Troll’, Iceland;
Under the bridge Solving the issue of so-called ‘patent trolls’ is not a simple matter Barney Dixon reports Dealing with the issue of genuine patent trolls is something most agree on, but the solutions to this ever present problem are rarely black and white. Take, for example, recent comments from the US Patent and Trademark Office (USPTO) director Andrei Iancu, who has called for the US to avoid “throwing out the baby with the bathwater”.
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In a speech at the Eastern District of Texas Bar Association inaugural Texas dinner, Iancu claimed that US “zeal” to eliminate patent trolls has resulted in an overcorrection that risks the country’s innovation economy. From a legislative standpoint, the America Invents Act, introducted underpresident Barack Obama’s administration did wonders to remedy the patent troll problem. www.ippromagazine.com
Patent Trolls · Feature
If all we care about is getting rid of the wolf, we can drop a bomb on the whole forest and the wolf is gone. But so, unfortunately, is Little Red Riding Hood and Grandma too! Andrei Iancu, director, USPTO
Inter partes reviews added another layer of protection for legitimate rights owners and the introduction of the firstinventor-to-file system brought benefits—and some problems— for both larger businesses and smaller companies. Iancu suggests that further unbalanced measures could frighten inventors and entrepreneurs, while driving government officials toward over-broad policies that “inhibit innovation”. He described the American patent system as a “crown jewel” and “gold standard”. Iancu said the country must “work together towards policies that help our inventors and entrepreneurs navigate our system to maximise their potential—to invest, to invent, to start new companies, to grow old ones, to create jobs, and to change the world”. He remarked that focusing exclusively on selected problems can have damaging consequences. Using the fairy tale of Little Red Riding Hood as a metaphor, Iancu said: “If all we care about is getting rid of the wolf, we can drop a bomb on the whole forest and the wolf is gone.” “But so, unfortunately, is Little Red Riding Hood and Grandma too!” Since coming to power, Iancu has made a number of changes at the USPTO that have limited the applicability of inter partes review, including a recent alteration to the standard by which patents are challenged and overturned in inter partes review, post-grant review, and covered business method review proceedings. This particular change—from the broadest reasonable interpretation (BRI) standard to the clam standard used
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in federal district courts—has drawn the ire of many in the industry. Joshua Landau, patent counsel at the Computer & Communications Industry Association (CCIA) and lead blogger on the Patent Progress blog, says that while he agrees with Iancu on many things, he believes some of his recent speeches have had “significant problems”. Landau agrees that the US should celebrate brilliant inventions, but argues these aren’t the ones that are getting challenged and revoked. He explains: “The reforms that have limited the impact of low-quality patents (and by extension, patent trolls) don’t impact the high-quality patents we want to preserve—they impact low-quality patents, patents that claim things that weren’t actually new or non-obvious, or that essentially claim something that was never intended to be patentable—an abstract idea or a natural phenomenon.” “That’s not throwing the baby out with the bathwater—it’s making sure the dirty water goes down the drain, rather than clinging on to actual innovators.” According to the USPTO, the standard shift is aimed at increasing the consistency between the patent office and the courts. But Landau says that the shift will make it harder to successfully challenge claims in America Invents Act trials. He summarises: “Given that the shift will decrease consistency between AIA trials and other proceedings (like ex parte reexams), there’s reason to doubt that the shift will actually improve consistency.” www.ippromagazine.com
Patent Trolls · Feature The shift fails to actually ensure consistent claim constructions between a district court and the Patent Trial and Appeal Board (PTAB), according to Landau, who explains that district courts have reached distinct claim constructions on the same terms in the past.
Furthermore, patent trolls remain a real concern. Nonpracticing entities make up a significant percentage of filings and, according to recent analysis from Unified Patents, patent assertion entities filed 57 percent of high-tech patent litigation during Q1 to Q3 2018.
He says there is “limited reason to think that problem will not recur between district courts and the PTAB”.
Landau says that small- and medium-sized enterprises (SMEs) face a similar proportion of asserts from patent assertion entities, and while patent cases have dropped significantly in cost, they remain an expensive proposition for SMEs.
“This, in turn, creates a risk that, under a district court construction, a claim will be found to infringe prior art that the PTAB’s construction did not consider to be prior art, resulting in a truly inconsistent situation,” Landau says. Landau adds that the shift will create a risk in that claims will be issued that were never examined under the BRI standard, increasing the risk of inconsistent application of prior art. He explains that the “essence of the issue” is that the USPTO will be obligated to try to specifically predict how a district court might interpret a claim instead of interpreting the claims in a way that covers any reasonable interpretation a district court might use.
Landau suggests, alongside ensuring reforms aren’t eroded, that the US could more stringently enforce the “means-plus-function clause so that patent claims without any structural content are limited to the structures and algorithms that the inventor actually knew about and disclosed in the patent specification, rather than granting broad functional claims”. He says: “We could limit the presumption of validity to the art that the USPTO actually examined, rather than assume a patent is valid even over art the USPTO never saw.”
In another speech at the Intellectual Property Owners Association’s 46th Annual Meeting, Iancu said that the US must stop commingling the categories of invention with the conditions of patentability.
In terms of more general reforms of litigation, Landau says parallel litigation could be stayed when an inter partes review is filed or instituted, in order to help control costs and avoid duplication of work.
Focusing specifically on section 101 of the US Patent Act, Iancu said that “significantly more work” needs to be conducted on the exception of an abstract idea.
He adds that the US could “legislatively overrule the Halo decision’s determination that objective malfeasance isn’t required to award enhanced damages so that there’s no windfall damages without objective malfeasance”.
He explained that the USPTO was contemplating revising guidance to categorise exceptions and to help instruct examiners on how to apply them. But Landau says successful reforms, such as the precedent for section 101 established in Alice v CLS Bank, along with inter partes review, help to improve the quality of patents. These reforms have helped limit the significant growth in patent litigation that was seen in the early to mid 2000s, according to Landau. However, according to Landau, with the BRI standard change and other rule changes that have limited the applicability of inter partes review, as well as the recent decision in Berkheimer v HP, some of these improvements are being rolled back. He says this is likely to lead to an increase in litigation and litigation cost.
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On top of this, the country could “delay discovery on nonclaim construction issues until after claim construction is complete, given how frequently claim construction is casedispositive”, according to Landau. Finally, Landau says the USPTO must have the resources it needs to do its job as well as is reasonably possible. He explains: “It’s unreasonable to expect the USPTO to never get it wrong.” “Making sure that you never issue a patent that shouldn’t have issued is a very difficult job when you have 600,000 applications a year, and that’s why we’ll always need postgrant reviews at the PTAB and in the courts.” He concludes: “The more you can limit how many poorquality patents get issued, the better it is for the patent system as a whole.” IPPro www.ippromagazine.com
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Lei Zhao · Interview
Chengdu, China
Changing China Unitalen’s Lei Zhao discusses recent changes to China’s ecommerce law and outlines the future of its IP systems What do China’s new ecommerce laws mean for thirdparty businesses selling on sites like Alibaba? According to China’s new ecommerce law, the ecommerce platforms shall review, publish, and/or update the business registration information of a third-party seller on the site, preserve the whole trade records between this third-party and the buyers for not less than three years, and also shall provide the above trade records to the court or other authorities as per the requirements of them. This means the third-party may need to apply for the certificate, and/or give it more thoughts before conducting any infringement activities on the site. The new e-commerce law expressively prescribes the notice anti-notice mechanism under the safe-harbor principle. That is, a platform receiving a complaint from a rights holder shall transfer the complaint to the infringer, and the infringer shall respond to the complaint, providing preliminary evidence to prove its non-infringement. It would be easier for the right owner, once providing preliminary evidence for the infringement, to take down the infringing products, and as a result the infringer shall answer the complaint more actively.
How will this affect brands using the platforms? It will provide a more efficient way for the rights holder to block those infringers from the platform or get infringement evidence when taking legal action against those conducting infringement activities on the site.
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The legislation also covers social media operators, like WeChat. How difficult will it to be to enforce the legislation on these types of platforms? Overall, it’s the same as platforms like Alibaba. However, since there are a number of individual sellers other than the company sellers on WeChat, it may have some difficulty in enforcing the legislation on such individual sellers, because individuals only selling self-produced agricultural products and household handicraft products will not be regarded as the ecommerce sellers under the new laws. Nevertheless, there still is dispute on whether a social media platform should be deemed as an ecommerce operator, particularly, the social media platform Weibo and the public account on Wechat. As a result these types of platforms would not be bound by the ecommerce law but the Tort-Law.
NCAC recently revealed that it is monitoring 58 major online platforms as part of its copyright protection efforts. How significant is this number? Could more be done? The National Copyright Administration of the People’s Republic of China (NCAC) is laying stress on the monitor of the 58 major online platforms involving video websites, music websites, internet drives, and literature websites. This number is aimed at making some cases more high profile in order to further educate the public to respect others’ intellectual property. www.ippromagazine.com
Lei Zhao · Interview Actually, various copyright enforcement bureaus at all levels across the country are monitoring over 3,000 online platforms.
How have China’s copyright protection laws changed over the last few decades? What changes are needed to further improve them? Over the last few decades China’s copyright protection laws not only reconstructed the legislative purpose and object of the copyright protection, but also built a complex right system for the copyright owner. We have seen innovation in connection with statutory licences and community management for copyrighted works. The construction of a ‘public domain’ needs to be improved, in order to seek balance between protecting lawful copyrighted work and reserving suitable domain for public. At the same time of encouraging work creation, the laws should also establish a space that allows the public consumers to perform its free rights in learning knowledge and exchanging information and culture.
CNIPA announced a work plan to fight copyright infringement back in July. How has this been received? On 31 July 2018 the Chinese National Intellectual Property Administration (CNIPA) released the working plan on Internet+ IPR Rights Protection. According to the plan, Internet+ will be used as a key tool in deepening IP rights protection reform. Big data, artificial intelligence and other ICTs will play a role in identifying, monitoring and tracing IP rights infringement and counterfeiting online. All efforts are made to minimise the
impact of illegal acts on normal production and operation of enterprises, strengthen the fight against IP rights infringement and counterfeiting in a more efficient, accurate and forceful way, scientifically promote sound IP rights protection and advance IP rights governance. According to their work schedule, it is still in the stage of data research, system building and technical preparation. The preparation is scheduled to be completed by next June, before it goes to the next step.
China is at the forefront of patent filing across the world. Will this ever slow down? Are there any specific sectors or technologies that are seeing any interesting trends? So far China is still at the forefront and we don’t think it will slow down drastically in the following years as more and more companies begin to recognise the importance of accumulating patents. According to the information released at the regular press conference of for Q3 2018 held by the CNIPA, overseas IP applications filed by the Chinese companies have increased steadily. In the first half of 2018, there were 17 domestic companies each submitting more than 100 international patent applications (PCT), which was the same as the same period of the previous year. Filing patents upon the nano technology seems like an interesting trend in China, the number of Chinese patent applications in this field is already at the first place in the world according to the report released by the Chinese Academy of Sciences Document Information Center last year. IPPro
So far China is still at the forefront and we don’t think it will slow down drastically in the following years as more and more companies begin to recognise the importance of accumulating patents Lei Zhao, Partner Unitalen Attorneys at Law
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SEP Licensing · Feature
The essentials Kerry Miller, head of IP regulatory affairs at Nokia Technologies, discusses a recent draft agreement on guidance for licensing SEPs in 5G and the internet of things, following a successful CEN-CENELEC workshop Barney Dixon reports
What are the core parts of the CEN-CENELEC Workshop Agreement that was recently produced? The purpose of this document—entitled ‘principles and guidance for licensing standard essential patents in 5G and the internet of things, including the industrial internet’—is to share information, especially with sectors and businesses that have not been involved in wireless and cellular standards licensing before. The advent of 5G means that for the first time these standardised connectivity technologies will be implemented not just by handset makers, but a whole variety of new players who may not have been involved in licensing before. In fact, 5G and the internet of things are expected to create $12.3 trillion of economic value by 2035. To ensure European businesses capture these benefits they need to understand the wireless technology licensing environment.
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That is why we—a group of world leading users and developers of wireless technology standards with decades of experience—have created the draft CEN-CENELEC Workshop Agreement as a primer for new entrants on standard essential patent (SEPs) licensing. It is composed of six key principles that describe at a high-level the foundations that underpin a healthy standards development and licensing ecosystem; such as the view that everyone should have access to standardised technologies. In addition, it contains guidance that fleshes-out and explains those principles. For example, the guidance makes clear that a business can implement wireless and cellular technologies to create connected products either directly through its own license, or via a third-party licence further down the supply chain. It often surprises people to know that typically only one business in the supply line needs a licence. That is the sort of detail that are pointed out in the guidance. We’ve also included a set of Q&As to help beginners www.ippromagazine.com
SEP Licensing · Feature understand the marketplace. We attempted to answer questions that any newcomer to licensing would have in a down-to-earth, easy to read, and non-legalistic manner.
Why is an industry standard on the licensing of internet of things technology important? What we are going to see in the move to 5G and the internet of things is a lot more companies becoming involved in this area. One of the basic requirements for 5G was a massive increase in the number of connections that can be sustained. Not just speed, but the number of connections that could be maintained because it has been envisioned that this is going to be in all sorts of devices—from vending machines that require restocking, to autonomous automobiles and remote surgery units that will need constant connectivity to manage a wide range of operational and safety features. Therefore, there are going to be a lot of companies that have not been involved in licensing before that may feel intimidated by it and may not know how to approach the topic. That was a concern expressed to us by the European Commission and in response we have set-out to demystify wireless and cellular standards licensing and explain to new entrants how the fair, reasonable and non-discriminatory (FRAND) licensing system has supported the successful global implementation and development of successive generations of standards from 2G to 4G. We hope this guidance can be an easy first step for businesses that would like to develop connected products in new sectors. The draft document is currently in the midst of a public comment period that will end on 13 December. We recognise
that getting more high-quality feedback from stakeholders on this draft will enable us to make it more helpful. With CENCENELEC’s permission we have therefore launched an easy feedback tool to encourage the widest possible consultation.
What are your thoughts on the European Commission’s new internet of things standard-essential patent licensing expert group? We feel it is important for businesses and policymakers to understand licensing in this space to ensure that we maintain a healthy and efficient open technology standards ecosystem that support the development of new connected products and future generations of globally interoperable wireless and cellular standards. We hope that expert group will look at our document and consider it a good input for informing them what works in industry and enables mainly European technology companies to keep driving forward innovation in this highly strategic field. We very much hope that they find its contents helpful and at it and we look forward to working with them.
Will we see a lot of change in the next five years? Yes—a lot of new sectors are starting to get involved in implementing wireless and cellular technology standards. I think there is going to be tremendous growth in this industry. For example, an IHS study has estimated that 5G and internet of things will create $12.3 trillion of economic value by 2035. I don’t know how much stock you can put in these forecasts, but everybody sees it as a new, huge growth area. IPPro
We feel it is important for businesses and policymakers to understand licensing in this space to ensure that we maintain a healthy and efficient open technology standards ecosystem that support the development of new connected products and future generations of globally interoperable wireless and cellular standards Kerry Miller Head of IP regulatory affairs and chair of the CEN CENELEC Workshop group Nokia
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Fiona Watkins & Tim Hartland ¡ Interview
Inclusivity in IP Fiona Watkins and Tim Hartland give insight into recent inclusivity and diversity measures in the intellectual property sphere 22 IPPro
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Fiona Watkins & Tim Hartland · Interview Do you feel intellectual property has become more diverse and inclusive? Fiona Watkins: Yes and no. I definitely think there is an increased awareness in the profession, but whether it is actively embracing and demonstrating diversity and inclusivity is difficult to say. The IP Inclusive Charter is a great example of this, by being founder signatories we take great pride in this and we can tangibly demonstrate our commitment to being more diverse and inclusive now and in the future. Tim Hartland: I certainly think our firm has become more inclusive over the years and we are far more diverse as an organisation now in 2018. I am sure that this will have been reflected across the industry, as we frequently see the fantastic work being undertaken by groups such as IP Inclusive to promote greater diversity and inclusivity and are proud to stand beside other firms to support greater equality and representation.
What do you feel has been the greatest barrier in IP to diversity and inclusivity? Watkins: A lack of employee involvement. Traditionally in IP firms, only partners or those at board level would have discussions and make business decisions, often in areas outside of their expertise. This inhibits innovative thinking and progression in making the right and appropriate business decisions. At Wynne-Jones IP, our approach is anything but that. All staff are equipped with the ability to be included in the decision-making process based on their skills and experiences.
Wynne-Jones IP recognises that diversity and inclusivity fosters a culture of innovative thinking and the firm has seen real growth of 20 percent over the last five years.
Has Wynne-Jones IP become more diverse? Watkins: Absolutely, and our commitment to be one of the founding signatories of the IP inclusive Charter is testament to that. We have no enforced hierarchy and staff at all levels of seniority are encouraged to be involved in projects across the business to continuously enhance our way of working. Our Change Champions project, enables staff to work with management to make key decisions and implement more efficient ways of working that will benefit both our team and clients. We pride ourselves on our inclusive and forwardthinking culture. Diversity is integral to the backbone of Wynne-Jones IP’s values and the firm’s success. Our culture is continuously evolving and we are far removed from what you might find in a traditional IP firm. We encourage career progression, professional development, contributions and inclusion, whilst at the same time ensuring all staff feel supported and able to thrive. We actively welcome individuals from a variety of backgrounds with varied skill sets and we are committed to helping make the IP profession more inclusive. We pride ourselves on being a multinational, multi-faith, firm, with employees from different educational, religious and geographical regions.
What has CJCH done to ensure it is more inclusive and diverse? Hartland: In terms of our IP division specifically, we have a particular focus on diversity. We currently have around 60
We actively welcome individuals from a variety of backgrounds with varied skill sets and we are committed to helping make the IP profession more inclusive Fiona Watkins, HR and operations director Wynne Jones
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Fiona Watkins & Tim Hartland ¡ Interview people in this division, and we actively seek out people from various cultural backgrounds, as we feel that people with different backgrounds and experiences can only strengthen our offering.
and mathematics and promoting the IP profession not just to women, but also their male counterparts too. For us, it’s important to fly the IP flag and shout about the great opportunities available.
Rather than adopting a specific policy or initiative for our IP division, our firm-wide approach is embedded into everything we do. We live and breathe an inclusive working environment from the executive level down.
Hartland: Definitely, although at CJCH we have a number of talented female solicitors in high ranking positions, and acting as leaders in their specialist departments already, and that number is only set to grow.
We have produced an inclusivity and diversity policy which our staff members can access via our website, which clearly displays our aims and beliefs around diversity in the workplace.
To us, gender is not a deciding factor, we want to provide equal opportunities to the most talented and capable within our team, and support them to achieve highly within their careers and throughout the firm.
We also carry out a bi-annual diversity and inclusivity audit, which measures how diverse CJCH is, tracks if we as a firm have improved since the last report, and enables us to set goals for the coming year and tackle any areas where there may be concerns. We feel that our inclusive ethos is reflected in the hugely talented team of people we have around us. We currently have 22 different languages spoken throughout all our offices, our workforce is comprised of 59 percent females, we have representatives across nine different ethnicity groups, members of the LGBTQ+ community, and actively support those with medical or physical disabilities.
Do you feel encouraged by the number of women entering the IP field? Watkins: Yes, and I’m confident that number will only increase. We fully support science, technology, engineering
What can others throughout the industry do to promote greater inclusivity and diversity? Hartland: There are numerous groups and organisations working tirelessly to ensure the IP sector continues to be more diverse and inclusive. These groups, such as Chwarae Teg and IP inclusive, can work with both staff and management to help them identify and address a lack of gender representation or tackle preventable issues including cultural, religious, or disability discrimination. In a bid to demonstrate our commitment to greater diversity and inclusivity, we are participating in the Chwaere Teg fair employer process. We have also conducted unconscious bias training for all leadership and are in the process of participating in their Woman in Leadership programme.
To us, gender is not a deciding factor, we want to provide equal opportunities to the most talented and capable within our team, and support them to achieve highly within their careers and throughout the firm Tim Hartland, managing partner CJCH Solicitors
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Nadaline Webster · Opinion
Should we rethink our approach to ‘trademark bullying’? TrademarkNow’s Nadaline Webster examines changes to macrosocial order and how they can affect the lives of attorneys working on behalf of their clients The instant global communication gifted to us by the internet has been transformative and opinions are divided as to whether this is a good or bad thing. Regardless of which side of the divide you stand, there is no denying that it has been impactful. Media and social media reports and commentary are changing how we view other people, businesses, perspectives and actions. We live in a time of change, challenging long-standing patterns of thought and behaviour. That which only a year or two ago was considered socially acceptable is no longer acceptable today and the list of ‘challenged, changing or changed’ is growing by the day. This list includes how lawyers communicate with opposing parties. Cease and desist letters (in particular those relating to intellectual property infringement) have been in the line of fire for being overly aggressive and/or unnecessary. Many companies have been
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praised on social media for a ’softer’ and more creative approach whilst others who have not, have been dubbed ‘trademark bullies’ and roundly criticised. Undoubtedly, there are cases where the term ‘overly aggressive’ as applied to practices is merited, however ‘unnecessary’ can and I believe should, be challenged in this context. Consistency in court decisions across regions and indeed courtrooms within a region is a significant issue in trademark practice everywhere. Given the predilection of courts to hand down decisions that are sometimes bewildering, can companies be blamed for not taking chances with exceptionally valuable assets of their business? Deciding what is a necessary action and what is not can be something of a ‘lucky dip’ and so it is difficult to criticise companies if they err on the side of caution. www.ippromagazine.com
Nadaline Webster · Opinion
The costs for failure to do so are high. Unchecked inappropriate use of your trademarks can result in the loss or depletion of your rights in relation to the trademarks you created, with associated loss of revenue and market share Nadaline Webster, director of content, TrademarkNow
Who polices trademarks? In every other arena of life, the responsibility for the policing of property lies within governmental structures. Any attempts by individuals to protect or regain their property is termed ‘vigilantism’ and is very much frowned upon. However, in the trademark world, the onus is on the businesses themselves to monitor potentially infringing trademarks or inappropriate use of their intellectual property—the exception being in relation to actual counterfeit products which are managed differently. Depending on the region, there are then a number of civil law processes available to them to halt and correct such use— very often expensively. The costs for failure to do so are high. Unchecked inappropriate use of your trademarks can result in the loss or depletion of your rights in relation to the trademarks you created, with associated loss of revenue and market share. Other than the advice of counsel and perhaps that of relevant membership bodies, there is little in the way of formal training for businesses (especially younger companies) in best practices. Most companies acquire experience over time. Infringement, deliberate or otherwise, is more rampant in some industries than others and it is little wonder that companies who are repeatedly infringed upon may find themselves acting a little more zealously than others. Ultimately, this social perspective is driving change in how businesses and their lawyers communicate with the public regarding infringement, particularly in perceived ‘David and Goliath’ circumstances. Better communication is never a bad thing and where it encourages the speedy and inexpensive resolution of an issue
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rather than it becoming more contentious, it is definitively a positive. But there are also downsides. Many current cease and desist letters are standard, formulaic letters that, in some cases, issue almost automatically. For a company that experiences an incidence of infringement quite rarely, it is entirely possible to spend some time investigating the potentially infringing party, understanding their expertise on the topic and position and crafting a communication that will both be effective and win approval. Increasingly, companies are being encouraged to take this approach and turn an infringement into a potential marketing win. That is a process that is difficult to scale. For companies that experience a lot of infringement, it is a challenge to see how that could be implemented for anything other than particular individual cases that clearly merit such. It should be borne in mind that companies are imbued with the responsibility to police their own creations and expected to enforce their correct use. They face harsh potential penalties for failing to do so and perhaps now, even harsher ones for doing it but getting the approach wrong. There is a strong argument for softening communications across the board, reducing incomprehensible legalese, examining the content of standardised response letters and eliminating potential unpleasantness or aggression wherever possible. However, we should still remember that in many cases, businesses, whether they are large or small, are just doing their best to fulfill their obligations to protect core assets of their business. IPPro www.ippromagazine.com
Industry Events
Intellectual Property Awareness Summit New York City
www.ipawarenesssummit.com
29 November 2019 Life Sciences London IP Week IP Summit London
www.lifescienceip.iqpc.co.uk www.londonipweek.com
27-28 10-13 November December 2018 46th Global Legal & IP ConfEx Singapore
www.events4sure.com/singapore2019
21 February 2019 IP Law Summit Los Angeles
www.events.marcusevans-events.com/iplawsummit-2019
10-12 March 2019 28 IPPro
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