Issue 21
14 May 2019
The US v the EU
How do trade secrets compare?
In this issue
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Jurisidiction Comparison
Editor: Barney Dixon barneydixon@blackknightmedialtd.com +44 (0)203 750 6026
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EU Copyright
Comparing the EU and the US, Nicholas Fox and Michael Grow analyse just how different their respective jurisdictions are when it comes to trade secret laws
The controversy surrounding the EU Copyright Directive felt like a war of words. Now it’s been adopted, what will European copyright look like?
Reporter: Ben Wodecki benwodecki@blackknightmedialtd.com +44 (0)203 750 6017 Designer: James Hickman jameshickman@blackknightmedialtd.com +44 (0)203 750 6021
EPO Goals
The EPO is “well on track” to meet its 2023 target of reducing filing backlogs to less than 7,000, according to the annual report of the Boards of Appeal
Contributors: Becky Butcher Account Manager: Bea Ipaye beaipaye@blackknightmedialtd.com +44 (0) 203 750 6025 Associate Publisher: John Savage johnsavage@blackknightmedialtd.com +44 (0)203 750 6021
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Breeding Patents
The US’ Section 101 Patent Reform Framework will “drive the patent system into uncharted territory” according to the Electronic Frontier Foundation
+44 (0)203 750 6028 Office Manager: Chelsea Bowles accounts@blackknightmedialtd.com Published by Black Knight Media Ltd Copyright © 2018 All rights reserved
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New Markets
Autonomous vehicle manufacturers could intentionally give away patents to create new markets
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Publisher: Justin Lawson justinlawson@blackknightmedialtd.com
Patent Evaluation
Amazon has opened the doors on its Utility Patent Neutral Evaluation, a beta process allowing patent owners to protect their rights on the platform.
Racing Commentator
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Latest Events
American horse racing commentator Dave Johnson, known for his “... and down the stretch they come!” catchphrase has sued Amazon
Pick up your copy of IPPro at the latest industry events
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Patents • Latest News Martin Good/shutterstock.com
EPO Boards of Appeal ‘well on track to reach backlog target’, claims report The European Patent Office (EPO) is “well on track” to meet its 2023 target of reducing filing backlogs to less than 7,000, according to the annual report of the Boards of Appeal.
Addressing this, the Boards of Appeal report notes that it has already announced an initiative on quality aimed at focusing on best practices for the drafting of decision.
The pledge is part of the office’s five-year objective, which it says it is “well on track to meet”.
Part of that initiative will involve a working group consisting of what the report called “experienced chairmen and members of the Boards of Appeal”.
The report states that a total of 3,032 technical appeals were received in 2018, an 8.4 percent increase on the previous year. In 2018, 2,733 technical appeal cases were settled, a 19.7 percent increase compared with the same period in 2017.
The working group will deliver its first results by mid-2019.
Despite its hopeful targets, the EPO warned that its backlog and pendency will “continue to grow in the short term” due to a larger number of cases being filed recently.
The Boards of Appeal is also undertaking a “comprehensive” revision of its rules. The report states that the aims of these revisions are intended to increase efficiency by reducing the number of issues to be treated, predictability for the parties, and harmonisation.
By the end of December 2018, 9,196 technical appeal cases were pending—300 (3.4 percent) more than at the same point in 2017.
The revised rules won’t enter into force until 2020, but the report highlights that active case management by the boards will be a central element to the changes.
Timings of examinations are of increasing concern to EPO users, with a majority of users requesting greater flexibility in the timing of examination.
In relation to the structural reform of the Boards of Appeal, which started in 2017, the report outlines the changes, and states that the reforms were to “increase the organisational and managerial autonomy of the Boards of Appeal, the perception of their independence, and their efficiency”.
The EPO has faced criticism in recent years over its approach to tackling its backlog. Some of these measures have been linked to an increase in production targets for staff and a drop in overall patent quality. The EPO has faced both protests and petitions against the perceived quality drop. 3 IPPro
A source close to the Staff Union of the EPO said that the Boards of Appeal have already increased their productivity by 18 percent since 2017 and that production/productivity figures are now the “predominant criterion for evaluation” in the Boards of Appeal. www.ippromagazine.com
Patents • Latest News Jonathan Weiss/shutterstock.com
GSK to pay $90 million in damages to Vectura UK-based Vectura has secured a major victory and $90 million in damages from GlaxoSmithKline (GSK) after a US district court found the pharma giant guilty of willfully infringing its US patent.
Amazon opens doors to utility patent evaluation service Amazon has opened the doors on its Utility Patent Neutral Evaluation, a beta process allowing patent owners to protect their rights on the platform. Utility Patent Neutral Evaluation is a test programme that will allow the owner of a utility patent to have their claim of infringement against a seller investigated by a neutral thirdparty evaluator with expertise in law and utility patents. The evaluation service was designed and developed specifically with small-and medium-sized enterprises in mind. The process aims to provide patent owners with a fast, lowcost process for obtaining a neutral evaluation of infringement claims and, if successful, a fast takedown of infringing listings. No fee is needed to participate and Amazon does not receive or hold any funds in the process, but a $4,000 deposit is required. All participants deposit their funds with the evaluator and the winner’s $4,000 deposit returned to them. The loser’s $4,000 deposit is paid to the evaluator for their time and work. An Amazon spokesperson commented: “Amazon respects the intellectual property rights of others and requires that thirdparty sellers do the same when listing items for sale on Amazon.” “While more than 99 percent of page views by our customers landed on pages without a notice of potential infringement, we continue to experiment and develop tools that will help us better protect rights owners and our customers, including this process for utility patent owners.” “The Amazon Utility Patent Neutral Evaluation process allows utility patent owners to more efficiently and effectively address suspected infringers, gives sellers a forum to contest accusations, and significantly reduces the time and cost burden on both parties.” 4 IPPro
Vectura secured a victory in the US District Court for the District of Delaware, which ruled that GSK’s Ellipta products infringed Vectura’s US patent (8303991). Vectura filed the lawsuit in July 2016, claiming that sales of certain GSK Ellipta products infringed its patents. Both parties entered into an agreement in 2010 under which GSK had taken a licence to formulation technology covered by a Vectura patent family. Those licensed patents expired in July 2016. GSK had the option to license additional patent families under the original agreement but declined to do so, resulting in the filing of the lawsuit by Vectura. Following a jury trial, the court awarded Vectura $89.7 million in damages based on a calculation of three percent of US sales of the infringing Ellipta products between August 2016 and December 2018. In a company statement, Vectura said it is seeking an application of the three percent royalty on sales of the infringing Ellipta products until the end of the patent term in mid-2021. The jury’s finding that GSK willfully infringed Vectura’s patents means it is entitled to seek enhanced damages, although GSK does have the option to appeal that decision. James Ward-Lilley, CEO of Vectura, commented: “Although we regret the need to take a longstanding partner to court, we are pleased with the jury’s verdict which confirms the validity of our intellectual property and the decision to progress this action with GSK. We will provide updates on this matter in due course.” GSK has been reached for comment, but is yet to respond.
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Patents • Latest News Patent system will drive into ‘uncharted territory’ with section 101 reforms The US’ Section 101 Patent Reform Framework will “drive the patent system into uncharted territory” according to the Electronic Frontier Foundation (EFF). In a blog post, the EFF slammed reforms proposed by bipartisan members of the US Senate Judiciary Subcommittee on intellectual property, claiming it would undo all progress made under section 101 of the Patent Act. The framework released by subcommittee chair Thom Tillis and ranking member Chris Coons would, among other things, eliminate within the eligibility requirement, that any invention or discovery be both “new and useful”. Instead, the committee proposes that patentees simply require that the invention meet existing statutory utility requirements. Also proposed is a list of several categories that shouldn’t be eligible for patent protection, which includes fundamental scientific principles, products that exist solely and exclusively in nature and pure mathematical formulas.
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A “practical application” test will also be introduced to ensure that statutorily ineligible subject matter is construed narrowly. The EFF slammed the reforms, claiming that companies that financially gain from aggressively licensing and litigating patents would benefit from the reforms most of all. The reforms would also “be a handout to patent trolls and other abusers of the system”, according to the EFF The proposal is also aimed at “killing the many Supreme Court decisions that have interpreted section 101 in ways that promote innovation”. Decisions from Mayo v Prometheus and Alice v CLS Bank are most at threat from the reforms, according to the EFF. The EFF warned that rewriting section 101 could “undermine all of US patent law and would open the door to patents on old and useless ideas as never before”. It called out to Congress to “listen to the people who work every day in technology and medicine—not just to companies that hold thousands of patents”.
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Patents • Latest News Pornpipat Charoenthai/shutterstock.com
Politicians should ‘take responsibility’ over conventionally bred patents The No Patents on Seeds Group has called on politicians to “take responsibility and to change the law” regarding the patentability of conventionally bred animals and plants. The group said politicians should make it “impossible to grant patents on conventionally bred plants and animals”. Johanna Eckhardt of No Patents on Seeds warned that if politicians fail to set limits, then “new facts will be constantly created for patent attorneys, companies and the EPO to make even more profit with such patents". She added: "In the near future even food and drink may be patented as an invention." Such patent types are prohibited by rule 28(2) for the interpretation of the European Patent Convention (EPC). However, the European Patent Office has come under fire for granting what the groups claim are conventionally bred patents on plants and animals. The most notable case covering such a patent, T1063/18, saw agrochemical company Syngenta appealing an EPO decision that saw its patent application for a pepper plant denied. The case caused protests outside the EPO’s office building in Munich. In response, EPO president António Campinos wrote a referral to the Board of Appeals. The aim of Campino’s referral, according to the office, is to “obtain an opinion from the Enlarged Board of Appeal on 6 IPPro
the patentability of plants exclusively obtained by essentially biological processes”. No Patents on Seeds warns that patents on conventionally bred plants and animals would “primarily serve the interests of large corporations, such as Bayer, who will ultimately take control of agriculture and food production”. Bayer bought a patent from Monsanto in 2013 that covered traditionally bred broccoli adapted for the ease of harvesting. This patent was revoked by the EPO in November last year. The group is currently working on an opposition to a patent that covers salmon fed with certain plants (EP1965658). The foodstuff for the salmon is also patented, along with the rearing and feeding of the fish, the fish itself and the fish oil. Foods derived from the disputed salmon have an increased content of omega-3 fatty acids, which are meant to hold health benefits. No Patents on Seeds argues it is “by no means new: it is known, for example, that the milk of pasturefed cows has a higher content of these fatty acids”. Erling Frederiksen from No Patents on Seeds warned that if animals become an invention just because they are fed a specific feedstuff, then “we will soon have pastured cows and pigs being patented”. He continued: "Such patents can affect agriculture very directly. Farmers would then not be allowed to milk a cow without permission from the patent holder, or to slaughter a pig, or sell chicken eggs." www.ippromagazine.com
Patents • Latest News PTAB’s IBM patent ruling reversed by Court of Appeals A Patent Trial and Appeal Board (PTAB) ruling that considered an IBM patent to be invalid has been reversed by the US Court of Appeals for the Federal Circuit. IBM’s US patent (7,631,346) covered a method and system for a user account creation option through a single sign-on process. It covers technology that gives a user access to multiple applications “without regard to authentication barriers that protect each particular system supporting those applications”. US Patent and Trademark Office (USPTO) director Andrei Iancu acted on behalf of several private companies in filing two inter partes reviews that argued several claims of the patent were invalid. Some of the private companies who took issue with the patent have settled with IBM and were not parties in this instance. The Patent Trial and Appeal Board (PTAB) found the claims unpatentable in two instances, due to anticipation from a
US patent (7,680,819) owned by Mellmer and Japanese Publication (Tokkai 2004-302907A) from Sunada. IBM appealed the PTAB’s ruling, with the US Court of Appeals for the Federal Circuit reversing the Mellmer ruling. The Court of Appeals said: “We have been pointed to no substantial evidence to support the PTAB’s finding that Mellmer discloses the separate ‘single-sign-on’ limitation of all claims at issue.” However, the court of appeals vacated the decision related to the Sunada ruling, due to it resting on an incorrect claim construction on the federated computing environment limitation of all the claims at issue. The court remanded the Sunada ruling for further consideration under the correct construction. With relation to the PTAB’s Mellmer decision though, the court of appeals found that it featured the same claim construction error, but
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Patents • Latest News
Huawei dominates 5G SEPs Chinese telecommunication giant Huawei holds the most standard essential patents (SEPs) related to 5G, according a report from iplytics.
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iplytics’ 5G patent race report shows that Huawei holds 1,554 5G SEPs, well ahead of Nokia, which stands in second place.
Carmakers could ‘intentionally’ give away patents to create new markets
The report also indicates that Huawei has submitted the most technical contributions towards 5G standards, with well over 10,000.
Autonomous vehicle manufacturers could intentionally give away patents to create new markets, according to David Wong, senior tech and innovation manager at the Society of Motor Manufacturers and Traders.
Huawei has contributed towards 5G more than Nokia and Qualcomm combined, according to the report’s figures.
Wong said no automotive company would, “in their right frame of mind would just give away its IP on a silver platter”, but could use its IP to kickstart a new industry. He was speaking at the Intellectual Property Awareness Network World IP Day celebration event, which focused on how IP affected autonomous vehicle technologies. Wong said that the automobile industry has accepted that its future involves the convergence of automated, connected, electrified and services. He added that the entire industry “must adapt or die”. In order to grow the autonomous vehicle markets, Manjari Chandran-Ramesh from Oxbotica suggested that patent offices shouldn’t grant broad patents covering the technology to “billion dollar companies”. Stephen Lambert, head of automotive electrification at McLaren Applied Technologies, added: IP isn’t in the average mindset of an engineer because filing patents means you lose your competitive advantage. We need to use IP more to retain our innovation culture and protect what we have.” Also speaking at the event was UK MP and minister for IP, Chris Skidmore. He stressed that the UK wouldn’t be a world leader if it didn’t respect IP.
The report states that owners of 5G patents will “likely become technology and market leaders”. 5G related patents surged in 2018, with 53,935 SEPs declared, compared to just 2,055 in 2015. So far in 2019, only 5,826 5G SEPs have been declared. The report states that the automotive industry will “most likely be one of the first industries to rely on 5G, connecting vehicles to other vehicles, roadsides, traffic lights, buildings and the internet to process data across cars or in the cloud”. The report shows that the automotive industry holds the largest percentage of SEPs when compared with that of the Internet of Things, smart energy, and smart factory applications. iplytics’ report warns that the licensing of 5G SEPs “looks set to become a major issue not only for the handset industry but for any manufacturing sector where connectivity will matter”. It also emphasises that patent directors should “consider royalty costs and appropriate security payments in advance”.
Fellow MP Pete Wishart echoed Skidmore’s comments at the event, saying the UK has designed an IP framework that is “the envy of the world”. 8 IPPro
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Trademarks • Latest News
Alibaba settles a $250 million lawsuit over concealing counterfeit regulatory warnings Alibaba has settled a $250 million US lawsuit that accused the ecommerce giant of concealing regulatory warnings about its ability to stop counterfeiting before it went public in 2014. Alibaba was accused of securities fraud for failing to disclose a meeting with China’s State Administration for Industry and Commerce in July, 2014, two months before the company’s $25 billion initial public offering. An Alibaba spokesperson said the company was “glad to have this matter behind [it]”.
Thomas Kelley/shutterstock.com
Legendary horse racing commentator hits Amazon with trademark infringement suit American horse racing commentator Dave Johnson, known for his “...and down the stretch they come!” catchphrase has sued Amazon for selling t-shirts featuring the phrase without his permission. Johnson, the voice of the Kentucky Derby, coined the phrase when broadcasting in the 1960’s. He registered the term as a trademark in 2012. The lawsuit claimed that the term is as famous as boxing announcer Michael Buffer’s “Let’s get ready to rumble!”, which is also protected by a trademark. Amazon’s t-shirts feature an image of a jockey riding a thoroughbred horse accompanied with Johnson’s phrase. According to the lawsuit, which Johnson filed in the US District Court for the Southern District for New York, the t-shirts are “tacky, low quality over-priced” and the product “infringes, damages, blurs, tarnishes, and dilutes the mark and the rights and reputation of the mark’s creator and owner”. Johnson is seeking injunctive relief against Amazon and the sellers of the t-shirts, as well as an order to recall and destroy all infringing products and treble damages and the profits the sellers obtained from selling the shirts. 9 IPPro
“Prolonged litigation is neither conducive to protecting the interest of our shareholders, nor does it help Alibaba to focus on creating more value for society.” According to Alibaba, the settlement ends all pending securities litigation against the company, its executive officers and its directors. Counterfeiting has been a major problem for the platform over the years. This year its Taobao site once again found itself on the US Trade Representative’s (USTR) Annual Notorious Markets List. However, despite former concerns, the company has made several positive leaps towards combating bad actors on the platform. Investigations by its Anti-Counterfeiting Alliance members led to counterfeit product seizures worth $536.2 million in 2018. Over 1,200 arrests were made and 524 counterfeit manufacturing and distribution locations were shutdown. Earlier this year, Alibaba’s vice president of global IP enforcement, Matthew Bassiur, won the Luxury Law Innovator in Intellectual Property Rights and Technology award at the Luxury Law Summit early this year.
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Trademarks • Latest News
New trademark bill could allow government entities to obtain trademarks for flags US Democrat congressman Hakeem Jeffries has introduced a bill that would allow government entities to obtain trademarks for flags and other symbols. The bipartisan and bicameral Fair Licensing Access for Governments (FLAG) Act will allow government entities to obtain federal trademark protection for their flags, symbols, insignia and seals.
EIP adds new patent partner EIP has added Kathleen Fox Murphy as a partner to its patent litigation group. Fox Murphy joins from Browne Jacobson where she was partner and head of the firm’s London patent litigation team for three years. Before that, she spent 18 years at Taylor Wessing. She brings extensive experience in multi-jurisdictional patent litigation across various industries, including electronics, pharmaceutical, and chemical industries. Gary Moss, partner at EIP, commented: “Kathleen Fox Murphy brings significant experience and expertise in major patent litigation at a time when our pipeline of active cases continues to expand.” “We are delighted that she has decided to join us and that we will be able to deploy her undoubted abilities in the management of cases for our clients.” “From a personal perspective, I am very pleased to witness the rapid growth of the litigation group at EIP, both in the UK and in Germany; the recruitment of Fox Murphy represents another significant milestone in that growth.” Fox Murphy added: “EIP’s international reputation and impressive track record were key factors in my decision to join the firm.” “EIP’s recent success in the Unwired Planet and Conversant cases was further evidence of the firm’s impressive credentials and I am confident that I will be able to help continue the fantastic momentum it has achieved so far.” 10 IPPro
Jeffries said that by allowing government entities to obtain such trademarks, it would “enable them to protect long standing assets, help eliminate public safety threats by stopping the production of counterfeit badges and uniforms and generate needed revenue for local public resources and services”. He added that a government entities symbols “are invaluable resources”. The bill is cosponsored by Republican Martha Roby, whilst its companion bill in the Senate is sponsored by Democrat Senators Amy Klobuchar and Chuck Schumer and Republican Thom Tillis, who is the chair of the US Senate Judiciary Subcommittee on intellectual property. Currently, the government entities cannot obtain protection for their intellectual property in order to maintain a separation between business and state influence. Roby said she was “proud” to cosponsor the bill in order to allow trademark protection for “the symbols that matter most”. The FLAG Act is supported by the American Bar Association (ABA), the US Conference of Mayors (USCM), the American Intellectual Property Law Association (AIPLA), and the International Association of Fire Fighters.
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Trademarks • Latest News
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Alibaba retains Notorious Markets List spot despite infringement improvements Alibaba has found itself on the US Trade Representative’s (USTR) Annual Notorious Markets List, despite winning recent awards for the enforcement of luxury goods. Alibaba’s head of global intellectual property enforcement, Matthew Bassiur, won the Luxury Law Innovator in IP Rights and Technology award at the Luxury Law Summit in early April, but, despite these successes, Alibaba’s Taobao site still featured on the list. The Notorious Markets List is an annual report that “identifies trading partners that do not adequately or effectively protect and enforce IP rights or otherwise deny market access to US innovators and creators that rely on protection of their IP rights”. It highlights online and physical markets that allege to engage in and facilitate substantial copyright piracy and trademark counterfeiting. According to the USTR, despite Alibaba’s positive efforts to curb infringement, “right holders, particularly small and medium-sized enterprises, continue to report high volumes of infringing products and problems with using takedown procedures”. The USTR stated: “Serious concerns remain about Alibaba’s responsiveness to SMEs, who continue to express concerns over ineffective takedown procedures, burdensome enrollment requirements for a Good Faith programme that reduces the evidentiary burden for takedown requests, and Alibaba’s delays in responding to SMEs.” The report “encourages” Alibaba to enhance its work with SMEs and all other stakeholders to “address ongoing complaints”. 11 IPPro
Alibaba must expand its ban on automotive airbags, improve the effectiveness of its repeat-infringer policy and improve tools to prevent unauthorised use of product images, according to recommended actions listed on the report. An Alibaba spokesperson commented: “While we do not agree with the USTR’s decision, their report recognises Alibaba’s work in protecting IP, including proactive outreach to rights holders, our one-stop IP Protection Platform, proactive screening of suspect listings, industry collaboration leadership, and coordination with law enforcement, leading to the arrests of counterfeiters.” “Our results and practices have been acknowledged as bestin-class by leading industry associations, brands and SMEs in the US and around the world.” “In fact, zero industry associations called for our inclusion in the report this year.” Notable sites alongside Taobao on the list include BeoutQ, a notorious broadcast pirate site which sells subscriptions and set-top decoder boxes and offers unauthorised streaming of beIN media products. Pinduoduo.com is the newest addition to the 2018 list. Currently the third largest ecommerce platform in China, the site offers low-priced goods, which has caused large numbers of counterfeit products to be offered. The list also notes physical markets, including Central Market in Phnom Penh, Cambodia, Tank Road in Delhi, India, and the Grand Bazaar in Istanbul, Turkey, that are notorious for being sources of counterfeit products. www.ippromagazine.com
Trademarks • Latest News
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Aldi sued for copycat baby bag BabaBing, a creator of products for children and babies, has accused discount supermarket chain Aldi of copying the design of one of its changing backpacks. BabaBing said they are “vowing to take their fight, all the way to ensure small businesses are protected against large retailers copying products”. It stated that Aldi had agreed to meet and discuss the issue previously, but was now more interested in fighting their case “not just to protect our personal reputation and brand but also to show other small nursery businesses that they don’t have to just accept that this kind of behaviour is part and parcel of developing a nursery brand”. Aldi is alleged to have copied BabaBing’s Mani Backpack, which features a super-sized changing mat. Aldi’s version of the Mani Backpack replicates the dimensions of the mat as well as featuring the signature striped lining and the insulated bottle holder. BabaBing’s backpack retails at £49.99, whilst Aldi’s only sells for £17.99. An Aldi spokesperson commented: “At Aldi, we aim to provide our customers with products of a similar high quality to the leading brands, but at a fraction of the price. We sell a wide range of baby products that are hugely popular with parents and we will consider Nick Robinson’s views when planning future ranges.” The spokesperson concluded: “We always listen to feedback on our products and would be pleased to meet with Robinson to discuss his concerns.” 12 IPPro
CompuMark and WebTMS enter into strategic partnership CompuMark and WebTMS have announced a strategic partnership that will see WebTMS users gain access to CompuMark’s trademarks databases. WebTMS users will be able to import trademark data from CompuMark which can be used to validate and update trademark portfolios. The aim of the partnership is to create “more efficient workflows”. CompuMark president, Jeff Roy, commented: “This strategic partnership is the answer to the growing request of clients for being able to access CompuMark data in their trademark management systems.” “By integrating both platforms we are better serving the trademark professional.” Rita Okyere, director of WebTMS, added: “This is a great opportunity for us to boost our services. By making CompuMark’s global data immediately available to our clients, we can ease their administrative burden thereby creating more time for them to focus on other important tasks.” “WebTMS acknowledges the ever-evolving digital landscape and to stay relevant it’s important we keep up with client expectations.”
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Copyright • Latest News US copyright bill aims to protect independent creators A new US copyright bill could create a Copyright Claims Board at the US Copyright Office aimed at reducing costs and easing the burden for creators defending their intellectual property. Democrat congressman Hakeem Jeffries proposed the Copyright Alternative in Small-Claims Enforcement (CASE) act on 1 May. A piece of bipartisan legislation, the CASE act aims to make it easier for independent creators to better defend their IP from theft. Jeffries commented: “The establishment of the Copyright Claims Board is critical for the creative middle class who deserve to benefit from the fruits of their labour.” “Copyright enforcement is essential to ensure that these artists, writers, musicians and other creators are able to commercialise their creative work in order to earn a livelihood.” “The CASE act will enable creators to enforce copyrightprotected content in a fair, timely and affordable manner. This legislation is a strong step in the right direction.” Introducing the bill alongside Jeffries is Republican congressman Doug Collins, who said that the US economy “depends on our ability to ensure IP, including copyrights, is protected”. He continued: “The CASE act would establish a copyright small claims court to give creators the ability to protect their livelihoods and fight back against infringement of their works. Protecting IP is critical to continue growing our economy, maintaining our position as a world leader and ensuring the creative spark remains alive with current and future generations.” Many US organisations are said to be supporting the bill, including the American Intellectual Property Law Association (AIPLA), the Songwriters Guild of America, and the Copyright Alliance. Copyright Alliance CEO Keith Kupferschmid said: “For more than a decade, individual creators and small businesses have been advocating for a change in the copyright law to address an inequity that has routinely provided them with rights but no remedies.” “The CASE act would make very targeted, very modest changes to the copyright law to address this inequity and give America’s creators the tools to protect the fruits of their creativity.” 13 IPPro
Solicitor general to weigh in on Google v Oracle The US solicitor general has been asked to file a brief on behalf of the government in the billiondollar copyright infringement dispute between Oracle and Google. Noel Francisco will weigh in on the case, which concerns whether copyright protection extends to a software interface and whether Google’s use of a software interface in the context of creating a new computer programme constitutes fair use. Oracle had sued Google for copyright infringement in 2010, accusing the search engine giant of illegally using Oracle’s Java APIs when creating their Android smartphones. Oracle had been seeking more than $9 billion from Google, including $475 million in damages and $8.9 billion in apportioned profits from Google’s sales. In May 2016, a jury at the US District Court for the Northern District of California ruled in favour of Google, declaring that its use of Java in the Android operating system was fair use. However, a March ruling from the US Court of Appeals for the Federal Circuit saw the case return to the district court for a trial deciding how much Google should have to pay in damages. There is no deadline for the solicitor general to file his brief.
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AIPPI
London 2 0 19
2019 AIPPI World Congress – London September 15 - 18, 2019
London
has progressed to be a global leader in arts, commerce, entertainment, tourism and development. In recent years London has pushed to become one of the most innovative and business driven nations in the world, which is why we find it a suitable location to debate the latest topics of IP. Whether you are visiting for the first time or returning once more, you will discover a city full of unforgettable landmarks, exciting things to do and extraordinary cuisine around every corner. Take advantage of the Early Bird discount, register by June 12 to secure a reduced registration rate. We look forward to seeing you in London, September 2019. The programme boasts a vast range of topics covering the entire field of intellectual property: PHARMA DAY
LUNCH SESSIONS
• Wait! Pay for delay
Lunch Sessions 1
• Patent Linkage: an international perspective
• An update from USPTO Director Andrei Iancu
• Hot and hostile: recent developments in SPCs and patent term extensions • Antibodies and epitope/competitive claims PANEL SESSIONS • The art of IP – museums & architecture • In-house perspectives on IP enforcement • Describe your best defense: trade mark infringement or not?
Lunch Sessions 2 • It’s natural … or is it? Greenwashing fashion Lunch Sessions 3 • Africa and innovation
• Protecting trade secrets in the EU – new and improved?
PLENARY SESSIONS
• A platform for discussion: liability & safe harbour
• Copyright in artificially generated works
• Forming portfolios for FRAND licensing: who decides?
• Consumer survey evidence
• Keep your hands off my brands
• IP damages for acts other than sales
• Patents and Artificial Intelligence: what’s next?
• Plausibiltiy
• BREXIT & IP: an update • Seize the day – customs & border control • Right on the money – IP & finance • Post-grant amendments: flexibility or certainty? • Designs on trial
More information on www.aippi.org
Jurisdiction Comparison • Feature
Trade Secrets: how the US and Europe compare Comparing the EU and the US, Nicholas Fox, partner at Finnegan, Henderson, Farabow, Garrett & Dunner and Michael Grow, counsel at Arent Fox, analyse just how different their respective jurisdictions are when it comes to trade secret laws
Europe
Trade secrets are protected by both the common law and European Law in England and Wales. The origins of common law protection are a case called Albert v Strange, which involved attempts to prevent the publication of extracts from Prince Albert’s diaries. That case established the courts could prevent unauthorised use or publication of information not generally known by the general public which had been shared in circumstances of confidence.
provides additional protection for trade secrets which have commercial value because they are secret. The emphasis of this new law which was enacted last year is that in order to be protected an owner needs to prove that they have taken reasonable steps to keep the trade secret a secret. If that is established and the secret has value then the courts will intervene to prevent unauthorised publication or misuse of that information.
The European aspect results from the UK’s implementation of the EU trade secrets directive. This law runs in parallel with the common law and
There is a lot of overlap between the two different types of protection. However, the underlying basis for the two different types of protection are very different.
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Jurisdiction Comparison • Feature
The underlying basis for common law is the idea that the courts will intervene to ensure that individuals keep information confidential when information is obtained in circumstances of confidence. In contrast, the new EU law views trade secrets much more as a form of business asset which can be identified by its value and the steps a trade secret owner takes to keep a secret secret. If a trade secret can be kept secret then potentially it can have unlimited duration. However, it is necessary to take steps to ensure that the trade secret remains secret and trade secrets provide no protection if competitors come up with the same idea independently. All these factors need to be considered. The most important consideration when choosing between patent and trade secret protection is the question of how easy it is to establish whether or not a third party is using a particular process or idea. If the use of a specific idea or processing will not be readily apparent in products put on the market then keeping an innovation secret is the better option. On the other hand, if the use of an idea or process will be evident once it is put on the market then potentially patent protection will provide stronger and more easily enforceable protection. Recall of infringing goods is expressly stated as one of the corrective measures for misappropriation of trade secrets under the EU trade secrets directive. Other corrective measures include orders to amend infringing goods to remove an infringing element or to destroy infringing goods or injunctions to prevent use or disclosure or sale of infringing goods.
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The issues in Europe are rather different from the US. Essentially the DTSA gave the Federal Courts jurisdiction over trade secrets issues. Before that, trade secrets were purely a matter for the state courts in the US. Since Europe does not have a Federal Court system this matter does not really apply. In addition to the jurisdictional issues, the DTSA also has a harmonising role in that the Federal protection of trade secrets is harmonized across the various states whereas, although most US states have adopted the uniform trade secret laws some differences do remain. Before the implementation of the EU trade secrets directive there were very significant differences in law across different EU countries. By way of example in France protection was limited to protection of manufacturing secrets and in Germany and the Netherlands, trade secrets were protected under the general principles of unfair competition law. Although these differences in national law remain the passage of the EU trade secrets directive means that the old protections are now supplemented by a uniform trade secrets law across the EU which in practice means that we are in much the same position as the US following the passage of the DTSA. Nicholas Fox Partner Finnegan, Henderson, Farabow, Garrett & Dunner
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Jurisdiction Comparison • Feature
The US
Trade secrets are recognised as an important type of IP in the US. They are protected under both state and federal law. Some 47 of the 50 states have enacted trade secret statutes based on the Uniform Trade Secrets Act (UCTA) published by the Uniform Law Commission (ULC) in 1979. The UCTA defines a trade secret as information, including a formula, pattern, compilation, program, device, method, technique, or process, that:
“(i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” The Defend Trade Secrets Act (DTSA) was enacted by the US Congress in May 2016. It allows an owner of a trade secret to sue in federal court when its trade secrets have been misappropriated. The federal law is similar to the UCTA. The DTSA extended the Economic Espionage Act of 1996, which criminalises certain types of trade secret misappropriation. Lawsuits seeking protection may be sought in both state and federal courts. Multiple parties may hold rights to the same trade secret, as they may all individually derive value from it. A trade secret ceases to exist when it becomes common knowledge within the community in which it is profitable. This means that the secret does not need to be known by the general public, but only throughout the industry that stands to profit from it. A party that reverse engineers a trade secret may also obtain trade secret protection for their knowledge, provided the reverse engineering process is non-trivial.
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The DTSA allows trade secret owners to seek an order for ex parte seizure of property “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action”. However, such orders are available only upon a showing of “extraordinary circumstances,” and a court “may not” issue an ex parte seizure order “unless the court finds that it clearly appears from specific facts” that eight separate statutory requirements are satisfied. So far, relatively few such orders have been issued. The federal court in New York granted such an order in Mission Capital Advisors v Romaka. There, the defendant was a former employee of a commercial real estate company who had downloaded contact lists without authorisation. He then falsely represented that he had deleted this data. In reality, the defendant merely changed the file names and failed to comply with the existing temporary restraining order. As a result, the court granted an order for ex parte seizure of the contact lists. So far, the DTSA is viewed as a success and as an improvement over the state statutes by many US practitioners. Whether to seek a patent or to rely on trade secret protection may depend on the nature of the invention. Some inventions in fields of rapidly advancing technology become obsolete before the expiration of the patent term. As a result, it may be worthwhile to opt for trade secret protection. On the other hand, owners of inventions that may easily be reverse engineered would be better advised to seek patent protection. Michael Grow Counsel Arent Fox
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EU Copyright • Feature
Silencing the guns: an end to the European war over copyright reform? The controversy surrounding the EU Copyright Directive felt like a war of words. Now it’s been adopted, what will European copyright look like? Ben Wodecki reports The proverbial lines in the sand in the war of words that surrounded the EU Copyright Directive have been washed away now that the directive has been adopted by the European Council. Years of controversial claims, outspoken antagonists and spiralling spats ended with only six nations standing opposed to its implementation. On one side of the argument were large entertainment platforms that argued against articles 15 and 17, claiming they would block freedom on the internet. This included by introducing so-called ‘filters’ against infringing content. Equally loud were the voices that claimed these companies were spreading misinformation.
European press publishers, including the European Magazine Media Association (EMMA), the European Newspaper Publishers’ Association (ENPA), and the European Publishers’ Council (EPC), have been some of the most outspoken backers of the reform, supporting it in all its forms across its creation. Some of Europe’s most influential filmmakers also came out in support of the reform. The likes of the Federation of European Film Directors (FERA), the Federation of Screenwriters in Europe (FSE) and the Society of Audiovisual Authors (SAA) all welcomed its adoption. However, many have raised their concerned voices against the reform. Various European versions of Wikipedia shut down in protest, petitions rallying against the reforms received millions of signatures and major US companies, like Google and YouTube undertook massive advertising campaigns.
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Reform rapporteur Axel Voss defended his reforms at every avenue and even argued that everything that looked like a filter had been removed from the reforms.
The European Council said that the directive will “ensure adequate protection for authors and artists while opening up new possibilities for accessing and sharing copyrightprotected content online throughout the EU”.
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EU Copyright • Latest News The arguments extended after the reform was adopted, with five of the six nations who voted against the reforms warning that they “lack legal clarity” and are “a step back” for the digital single market. Member states now have 24 months to transpose the directive into national law.
Extensions and evolutions The most universally talked about aspects of the directive, articles 15 and 17 are present. In the agreed text of article 15, the reproduction of more than single words or very short extracts of a news story would require a licence. This would cover snippets of news that appear alongside links. No exceptions will be made for this, meaning individuals, small companies and non-profits will be affected. Financial arrangements between web platforms and rights holders will be a far greater impact following the directive than the filtering of infringing content. Article 17 will see content platforms and apps like YouTube, Facebook and Twitter requiring individual licences from rights holders in order for users to post material. Under article 17, sites would be found directly liable for copyright infringing content uploaded to their platforms. Under article 17, start-up companies who operate in the EU are exempt if they generate annually less than €10 million. Cloud service providers and online marketplaces are also exempt. Those companies may not have to implement filters, but other companies will do. Filters can be time-consuming and costly and may damage smaller companies who simply cannot afford to implement them. Start-up companies who operate in the EU are exempt if they generate annually less than €10 million, observes Dorsey & Whitney partner Ron Moscona. Cloud service providers and online marketplaces are also exempt. Those companies may not have to implement filters, but other companies will do. US users will not be affected by this directive. However, US companies that operate in Europe will. Those companies will have to prepare and alter their operations to meet requirements. Many companies will have to change their approach and business model entirely, with some companies having to shut down altogether because they can’t meet that model. There are some non-controversial and universally welcomed aspects of the directive, such as article 3, which allows universities and cultural heritage institutions to extract 20 IPPro
and reproduce copyright-protected works for scientific research. Article 4 creates a framework for the use of copyright-protected material in digital classrooms and for cross-border distant teaching. Article 7 sets up mandatory licensing mechanisms to permit non-commercial use of outof-commerce works in the possession of cultural institutions via collective rights management schemes. However, the likes of articles 10 and 16a are gaining notoriety for their contents. Article 10 requires member states to set up or designate independent bodies to support parties negotiating licenses for audiovisual works on video on demand platforms. Article 16a states that rights in a work can be reclaimed in whole or in part by the author or performer where there is a lack of exploitation by the licensee.
What lies ahead? Under the directive, companies will be required to ensure that any content posted does not infringe copyright. O’Melveny special counsel Scott Pink suggests that instead of this concept, something similar to the US’ Music Modernization Act could be better. Under this, users can obtain mandatory licenses while somebody else manages the actual payment. In terms of the US adopting something similar, if there was a mechanism to allow easier access to readily obtaining rights, then that should be a path that the US should look at according to Pink. However, he added that he was unsure the system for requiring a company to ensure that any content posted by any user to the platform has sufficient rights is workable. This type of directive would not likely be implemented in the US or at least be harder to as it has a broad fair use doctrine, and what Pink describes as “rigorous recognition of First Amendment rights”. Pink, who admitted he wouldn’t be in favour of such a reform, said that if there was a real reason to protect the interests of rights holders, then it would have to be something more akin to a mandatory licensing scheme as “that would be easier to implement and comply with”. It is still early days for these reforms and it is now up to individual member states to implement the directive. While in many commentators eyes the directive is not perfect, it is for nations to make it their own and forge a path forward that works for everyone. www.ippromagazine.com
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