Issue 18
02 April 2019
Party in the USMCA NAFTA’s replacement threatens Mexico’s IP landscape
Also in this issue:
The shadow of Brexit Intellectual property royalty rates Artificial intelligence: the human part of a lawyer
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In this issue
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Trade Relations
UK Trademarks
Copyright Directive
Global Piracy
The controversial EU Copyright Directive has been approved by the European Parliament following a 348 to 274 vote
Global piracy numbers reached almost 190 billion pirate site visits in 2018, according to figures released by MUSO
USMCA, NAFTA’s replacement, has brought Mexico to a crossroads for its IP industry
Editor: Barney Dixon barneydixon@blackknightmedialtd.com +44 (0)203 750 6026 Reporter: Ben Wodecki benwodecki@blackknightmedialtd.com +44 (0)203 750 6017 Designer: James Hickman jameshickman@blackknightmedialtd.com +44 (0)203 750 6021 Contributors: Becky Butcher Associate Publisher: John Savage johnsavage@blackknightmedialtd.com +44 (0)203 750 6021 Publisher: Justin Lawson justinlawson@blackknightmedialtd.com +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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In the midst of changes to the UK’s trademark law, the towering shadow of Brexit threatens to wreak havoc on harmonisation efforts
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EPO Grants
IP Licensing
No Patents on Seeds has called for an end to the “legal chaos” of conventionally bred plant patents being granted by the EPO in a new report
Predicting in which direction IP licensing rates will swing can be quite difficul, but a recent survey by LES makes sense of it all
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Artificial Intelligence
Industry Events
TrademarkNow’s Nadaline Webster discusses the reluctance of legal practice to embrace technology
Pick up your copy of IPPro at these industry events
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p26
Subscribe now for free
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YOUR IP SOFTWARE SOLUTION IN THE CLOUD
Copyright · Latest News
EU Copyright Directive: A dark day for internet freedom?
The controversial EU Copyright Directive has been approved by the European Parliament following a 348 to 274 vote. The EU parliament voted to adopt the reform in September of last year. The texts for the controversial articles 11 and 13 were agreed in February.
image courtesy of NASA
What’s in the texts?
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In the agreed text of article 11 (now 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.
Article 13 (now 17)’s finalised text will see content platforms and apps like YouTube, Facebook and Twitter requiring individual licences from rights holders in order for users to post material.
No exceptions will be made for this, meaning individuals, small companies and non-profits will be affected.
Under article 13, sites would be found directly liable for copyright infringement if infringing content uploaded by a user is found to be on it.
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Copyright · Latest News
Those in favour Filters Speaking in the debate before the vote, the EU’s copyright rapporteur Axel Voss claimed that the centre of this debate is lost and that the reform “will not restrict reasonable freedom of expression”. He accused online platforms, such as Google, YouTube, and other major platforms of engaging in “a misinformation campaign”. Referring to the multitude of online petitions against the reforms, he said: “It is easy to use young people as a tool, [but] what is at stake is our democracy. This is a fundamental rights issue and is about fair remuneration for rights holders.” Much of the outcry has been against supposed filters which would likely be implemented as a result of article 13. In an exclusive interview with IPPro, Voss said that all that all measures that “might look like a filter” had been removed after failure in the first plenary vote. Many have spoken out against the reform, including Google, YouTube and German data privacy commissioner, Ulrich Kelber. Both YouTube and Google ran ad campaigns on their platforms warning users that the site may be drastically changed under article 13. Responding to the outcome of the vote, a Google spokesperson said: “The Copyright Directive is improved but will still lead to legal uncertainty and will hurt Europe’s creative and digital economies. The details matter, and we look forward to working with policymakers, publishers, creators and rights holders as EU member states move to implement these new rules.” Voss did not respond to a request for comment.
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A number of European publishers had expressed their support for the reform, particularly article 11. Following the vote, the president of European Newspaper Publishers’ Association, Carlo Perrone, said: “This is an historic vote for Europe’s soul and culture”. “After more than two years of debate and scrutiny, fairness has prevailed in the form of a copyright reform that will be essential for the future of press publishing and professional journalism.” “Thanks to this directive, web users are now guaranteed a pluralist and democratic internet in the years to come.” Xavier Bouckaert president of the European Magazine Media Association said that the vote was “against content theft”. He added: “Publishers of all sizes and other creators will now have the right to set terms and conditions for others to re-use their content commercially, as is only fair and appropriate.” Christian Van Thillo, chairman of the European Publishers Council claimed that the text “modernises copyright without stifling digital innovation”. Thillo continued: “This text modernises copyright without stifling digital innovation”. “As press publishers, we would like to thank Europe’s regulators for adopting this important directive that acknowledges the value of the press to society and the need for fair remuneration for the commercial re-use of our IP.” Fernando de Yarza Lopez Madrazo, president of News Media Europe, concluded: “This directive will help forge a healthier working relationship between creators and platforms and will help news publishers continue to invest in the creation of fact-checked, professional content to enrich the internet and benefit consumers.” www.ippromagazine.com
Copyright · Latest News Those opposed
Ghost debate?
There has been a gargantuan outcry from those opposed to the reforms, including an anti-article 13 petition that reached over four million signatures and protests from thousands in the EU the week before the vote. But on the whole, this opposition didn’t seem to be enough to sway individual members sentiments in the European Parliament, although a few minor edits were made to some areas of the reforms that were deemed unpalatable.
The Federal Chair of German Association of Journalists, Frank Überall, criticised the overheated debate regarding the copyright directive, arguing that it was a “ghost debate”.
Pirate party MEP and outspoken critic of the reforms, Julia Reda said that the vote was “a dark day for internet freedom”.
“As far as the protection of authors or serious concerns of users is concerned, but rather the defence of the privileges of large Internet corporations goes”. He argued that it has “nothing to do with censorship of the internet” and that anyone who confuses this “has not understood the freedom of expression”. “The draft directive does not foresee anything like that.”
She claimed that the new law, in is current form “threatens a free internet as we know it. Algorithms cannot distinguish between actual copyright infringements and the perfectly legal re-use of content for purposes such as parody. Obliging platforms to use upload filters will lead to more frequent blocking of legal uploads and make life difficult for smaller platforms that cannot afford expensive filter software. Voss and the majority of MEPs today missed the opportunity to give the EU a modern copyright law that protects both artists and users. We will continue to fight against upload filters and against this new European law.” Ska Keller, president of the Greens/EFA Group in the European Parliament and lead candidate of the European Green Party for the European elections, commented: “This is a lose-lose deal. This agreement is bad for artists, authors and small publishers and bad for internet users. The deal will end up further entrenching the dominant tech and media giants and lead to less diversity online. We strongly support the goal of fair remuneration for artists and creators of culture, but this deal helps neither creators nor internet users. Now it is up to the governments of the EU Member States to take into consideration the millions of people who stood up against this law and vote against the agreement in council.” Raegan MacDonald, Mozilla’s head of EU public policy said there was “nothing to celebrate today. With a chance to bring copyright rules into the 21st century the EU institutions have squandered the progress made by innovators and creators to imagine new content and share it with people across the world, and have instead handed the power back to large US-owned record labels, film studios and big tech. People online everywhere will feel the impact of this disastrous vote and we fully expect copyright to return to the political stage. Until then, we will do our best to minimise the negative impact of this law on Europeans’ internet experience and the ability of European companies to compete in the digital marketplace.”
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The legal view Kathy Berry, senior lawyer at Linklaters highlighted that the majority of the controversy surrounding the debate is “Hollywood v Silicon Valley tension between content creators that want a high level of copyright protection based on traditional models, and the tech industry that wants to clear the path for new and innovative ways to use and share content”. Berry recognised article 13’s “noble aims” but added that in its current form “it functions as little more than a set of ideals”. She added: “[Article 13 has] very little guidance on exactly which service providers will be caught by it or what steps will be sufficient to comply.” “This is likely to result in an ongoing lack of legal and commercial certainty until the scope of the Directive is fleshed out by either the Commission’s proposed guidance or by European jurisprudence.” Berry remarked that the deadline for implementation of the directive is expected to be in May 2021, which “may fall after the date on which the UK leaves the EU”. “If that is the case, the UK is unlikely to be required to implement its provisions. However, UK businesses providing their services in the EU will still have to comply, and it is at least conceivable that the UK will choose to implement it regardless.”
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Intellectual Property in an Innovative World
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Copyright · Latest News
Peloton faces copyright lawsuit over unlicensed music Peloton, a New York-based exercise equipment company, is the subject of a $150 million copyright lawsuit, which alleges it has infringed over 1,000 songs. Peloton allows users to partake in spinning and stationary cycling classes in their own home, selling subscriptions of exercise videos with music. Various music groups including Downtown Music Publishing, Reservoir Media Management, and The Royalty Network allege that Peloton obtained synchronisation licenses with owners of other musical works while unlawfully using works of the groups for years “without license or recompense”. Songs included SexyBack by Justin Timberlake, Roar by Katy Perry, and Bring Me to Life by Evanescence.
license fee might be, one should never simply ignore the rights of copyright owners.” “It should surprise no one that the musical works of these very well-known artists would be registered and enforced. If the facts pled are true, this is either a stunning oversight by Peloton or a reckless disregard for the rights of these artists. I’m anxious to see how Peloton responds.” Owen Sloane, partner in Eisner’s entertainment, media and the arts department, added: “The complaint seems to acknowledge that with co-written compositions, the defendant may have acquired licenses from some of the other co-writers not controlled by the plaintiffs.”
Ulmer & Berne partner Scott Rogers questioned why Peloton would consider using unlicensed music if it is essential to the Peloton experience.
“If the copyrights in question are co-owned by two or more persons or entities, and the synchronisation license actually obtained by the defendant is from one of the co-owners and is non-exclusive, there may be no liability. Under US copyright law, it is generally the understanding that any co-owner of a copyright can license 100 percent of the song non-exclusively and collect the license fee, subject to the obligation to pay the other owner or owner’s their share of the license fee.”
He continued: “Synchronisation licenses are unquestionably needed if a company wants to use another’s musical or sound recording in its own audiovisual work. However much the
Sloane concluded: “In practice, most licensees will require all co-owners to join in a license, but legally they may not be required to do so, at least in the US.”
The music groups have requested a trial by jury, along with the maximum statutory damages amount of $150,000 for each infringement.
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Copyright · Latest News Global piracy figures close to 190 billion pirate site visits Global piracy numbers reached almost 190 billion pirate site visits in 2018, according to figures released by MUSO. Over 189 billion visits were made to pirate sites in 2018, with MUSO’s figures showing that almost half of all pirated content was TV. In 2018, TV-related piracy took up 49.38 percent of all activity related to piracy, with only 17.9 percent for access to film. Music was the third most pirated medium in 2018, with a 15.87 percent share. Only publishing and software were lower (11.49 and 6.16 percent respectively). Despite holding only six percent of the total share of pirated mediums, software piracy increased by 17 percent globally in 2018. Almost 60 percent of all piracy visits are to unlicensed web streaming sites, whereas public torrent networks now only equate to 13 percent of piracy visit activity. The US was the nation with the most visits to pirate websites with well over 17 billion in 2018. Russia was only three billion visits behind the US with 14 billion visits. Andy Chatterley, CEO and co-founder of MUSO commented: “Digital piracy is still prevalent globally. TV is the most popular content for piracy and given the fragmentation of content across multiple streaming services perhaps this isn’t surprising.” “Whilst it’s important to restrict the distribution of unlicensed content, there is a wealth of insight to be garnered from piracy audience data that gives a comprehensive view of global content consumption.” Chatterley continued: “Interestingly, in 2018 we have seen a ten percent increase in people bypassing search engines and going directly to the piracy destination of their choice. Simply focusing on take-downs is clearly a whack-a-mole approach and, while an essential part of any content protection strategy, it needs to be paired with more progressive thinking.” “With the right mindsight, piracy audiences can offer huge value to rights holders.”
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Dentons hires former Dorsey & Whitney partner Dentons has added Robert Wasnofski as a partner to its intellectual property and technology practice in New York. Wasnofski joins from Dorsey & Whitney where he spent over 12 years as a partner. He brings over two decades of experience resolving intellectual property disputes for clients across many industries, including luxury brand, financial services, and telecommunications both nationally and abroad. He regularly litigates disputes in federal courts in cases covering trademark infringement, counterfeiting and copyright infringement. Dentons US CEO Mike McNamara commented: “Robert Wasnofski’s IP experience, particularly his focus on litigation, is an excellent complement to our thriving New York practice.” “His client base fits well with ours, and will help us leverage our shared US and international interests, to the benefit of our clients on many levels.” Wasnofski said he partly decided to make the switch due to the firm’s focus on innovation. He added: “Without question, my clients will benefit from Dentons’ footprint and its innovative culture.”
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Patents · Latest News Huawei, China, and Asia dominated 2018 PCT filings Chinese telecoms giant Huawei dominated patent cooperation treaty (PCT) applications in 2018, with more than 5,400 applications, according to figures released by the World Intellectual Property Organization (WIPO).
Despite Huawei dominating corporate applications, on the whole, the US filed the most PCT applications, with more than 56,000. Applications from China were less than the US by just 3,000.
In second place was Mitsubishi with 2,812 applications. Intel and Qualcomm placed third and fourth respectively.
Based on current trends, WIPO suggested that China will surpass the US “within the next two years”.
ZTE, which was the top filer of PCT applications in 2016, came fifth and saw a 29.8 percent drop in filings in 2018, its second year of decline.
WIPO director general Francis Gurry commented: “Asia is now the majority filer of international patent applications via WIPO, which is an important milestone for that economically dynamic region and underscores the historical geographical shift of innovative activity from West to East.”
Around two-thirds of the top 10 PCT filers were Asian companies, with just four hailing from outside of Asia.
“Intellectual property is a critical competitive element in the modern global economy, with everyone ultimately benefiting from this race to create and innovate that results in new products that transform our world and the way people live everywhere.”
More than half of all PCT applications filed in 2018 came from Asia (50.5 percent), with Europe (24.5 percent) and North America (23.1 percent) accounting for about a quarter each.
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Patents · Latest News Pressure group calls for ending to EPO plant patent ‘legal chaos’ Pressure group No Patents on Seeds has called for an end to the “legal chaos” of conventionally bred plant patents being granted by the European Patent Office (EPO) in a new report. The report details the plant patents granted by the EPO in 2018 and at the beginning of this year. It called for an end to “further monopolisation of resources for producing our daily food” and “the legal chaos at the EPO”. No Patents on Seeds’ report also stressed the need for patents granted on processes of genetic engineering to have their scope confined to the specific technical processes. Patents that cover the process of conventional breeding, as well as on plants an animals derived are prohibited by rule 28(2) for the interpretation of the European Patent Convention (EPC). According to the report’s findings, around 60 new patent applications covering conventionally bred plants were filed, but none were granted to companies Bayer, Syngenta, or DowDuPont, who have allegedly broken rule 28(2) of the EPC with plant-related patents at the EPO on previous occasions. No Patents on Seeds alleges that the EPO “was afraid of further public protests against these patents and therefore refrained from granting them”. The group’s report stressed that EPO president António Campinos “needs to stop ongoing proceedings to ensure that no further such patents are granted”. Representatives from the EPO’s member states met last month to discuss the plant patent crisis following several high profile invalidation cases. Around 30 organisations, including the outspoken No Patents on Seeds, have called for a protest to take place against the granting of patents on conventional bred plants and aminals by the EPO. The protest is due to take place on 27 March, the same day the Administrative Council is due to meet. The groups calling for the protest request the Administrative Council to ensure that the prohibition from EPC is enforced and effective. Other groups calling for the public demonstrations include Arbeitsgemeinschaft bäuerliche Landwirtschaft (AbL), Gen-ethisches Netzwerk, and WeMove Europe.
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Venable brings in Kelley Drye & Warren IP trio Venable has added three new intellectual property partners to its commercial litigation practice in Los Angeles. Lee Brenner, David Fink, and Sarah Cronin all join the firm from Kelley Drye & Warren. Brenner is a trial attorney and litigator who brings experience in the areas of IP, copyright law, and idea theft. Brenner said the trio are “looking to join a firm that would enable us to accomplish our goal of having a second-to-none entertainment and media litigation group with both a Los Angeles and a nationwide platform. Venable has a team of entertainment and media attorneys who are at the top of their game, as well as first-class litigators, and we want to surround ourselves with this calibre of talent.” Fink, an experienced and proven litigator at both the trial and appellate court levels brings more than two decades of experience in multifaceted state and federal litigation and dispute resolution. Cronin’s IP practice sees her representing and advising media and entertainment companies on copyright and trademark matters. She has served as counsel in connection with disputes before the Motion Picture Association of America Title Registration Bureau and appeared before a variety of state and federal courts. Mitch Evall, partner-in-charge of the firm’s Los Angeles office, commented: “We are bringing over a stellar team of top-notch litigators who know the ins and outs of the entertainment and media industry, which perfectly complements our existing capabilities in this sector and makes us even stronger. In addition to the lawyers, we are also looking forward to having one paralegal and three staff members join the team.” Geoff Garinther, chair of the firm’s litigation division, said: “Besides their impressive legal and business acumen, Lee Brenner, David Fink, and Sarah Cronin, and the rest of the team are truly great lawyers who fit nicely into our firm’s culture.”
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Patents · Latest News f11photo/shutterstock.com
IPOS to extend its Mediation Promotion Scheme The Intellectual Property Office of Singapore (IPOS) is extending its Mediation Promotion Scheme for a further three years. Effective as of 1 April 2019, the Enhanced Mediation Promotion Scheme (EMPS) will see an increase in funding from SGD 5,500 ($4073) to either SGD 10,000 ($7,405) or SGD 12,000 ($8,887) for each mediation case and will allow parties to claim for mediation-related agent fees. The Mediation Act came into force in Singapore in 2017, intended to make it easier for mediated settlement agreements to be enforced IPOS’ chief executive Daren Tang commented: “Innovation is becoming globalised, and increasingly, parties from across different regions have to work together to commercialise their IP. In such an environment, disputes will invariably arise. Singapore is already a hub for alternate dispute resolution and this scheme will position us more strongly to be a hub for the mediation of cross-border IP disputes. Local entrepreneurs and enterprises can also tap on this scheme to have a fair and cost-effective avenue for resolving their domestic IP disputes.”
Shanghai, China
Chinese patent and trademark review times to be cut China will cut its time needed for patent reviews by at least 15 percent, according to Gan Shaoning, deputy head of the Chinese National Intellectual Property Administration (CNIPA). In a state media release, Shaoning revealed that patent review times would be reduced, and the review times for trademarks will also be reduced within five months. Shaoning made the comments at the 20th China Development Forum during the session on intellectual property protection and open innovation. He also emphasised that further IP protections would be strengthened, with the costs for infringements increasing.
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Under EMPS, parties may appoint a mediation institution of their choice, including the World Intellectual Property Organisation Arbitration and Mediation Center, Singapore International Mediation Centre and Singapore Mediation Centre. IPOS has also appointed two new members to its IP Adjudicators Panel. Jason Chan and Tony Yeo join the Panel from their roles at Amica Law and Drew & Napier’s Intellectual Property Practice respectively. Chan brings more than 25 years experience on dispute resolution for IP and Technology. Yeo has almost three decades of experience in complex IP litigation. Chan commented: “Singapore is a well-regarded legal and business hub, known for its efficiency and transparency. I am pleased to be working alongside peers, and raising Singapore’s profile as an IP dispute resolution hub. The appointment of IP Adjudicators from private practice will bring to the table commercial perspectives. This is highly beneficial for Singapore to maintain its lead as Asia’s IP hub as companies look to Singapore as an emerging venue for complex IP dispute resolution. Such appointments also demonstrate a lot of foresight on the part of IPOS.” www.ippromagazine.com
Hong Kong gets a new director of IP following Leung retirement David Wong Fuk-loi has succeeded Ada Leung Ka-lai as Hong Kong’s director of intellectual property. Leung will now begin pre-retirement leave. She was appointed as assistant director of IP in 2002 and deputy director of IP in 2012. She had been director since May 2014. Wong Fuk-loi has served in various government departments including Transport, the Security Bureau, and the Food and Environmental Hygiene Department. Joshua Law, secretary for the civil service in Hong Kong, commented: “David Wong Fuk-loi has strong leadership and management skills as well as rich experience in public administration. I am confident that he will be able to lead the intellectual property department to meet the challenges ahead and continue to deliver quality service to the community. Ada Leung Ka-lai has served with dedication and professionalism in the civil service throughout the past 35 years. As director of IP, she has made exemplary contributions and led the department in taking forward various tasks, including enhancing the legislative framework of Hong Kong’s IP regime and promoting IP protection. I wish her a fulfilling and happy retirement.”
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Patents · Latest News
SCOTUS to rule whether patient treatment methods can be patented The US Supreme Court has agreed to hear a case concerning whether a method to treat patients can be patented. The issue of Hikma Pharmaceuticals USA v Vanda Pharmaceuticals revolves around whether patents that claim a method for treating a patient automatically satisfy section 101 of the US Patent Act, even if natural law is applied using only routine and conventional steps. The patent at the heart of the dispute is Vanda’s US patent (8,586,610), which covers the method of using iloperidone to treat sufferers of schizophrenia. The patent is due to expire in November of 2027. Vanda sells the drug under the brand name Fanapt. Vanda had been in a legal battle with Hikma subsidiary West-Ward, which claimed its iloperidone method patent was invalid due to its ineligible subject matter. The US Court of Appeals for the Federal Circuit affirmed a ruling from the US District Court for the District of Delaware that the patent was valid.
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Hikma wanted to market a generic version of iloperidone and sought a review of the Court of Appeal’s ruling. Vanda argued that Hikma’s petition wrongly asserted the Federal Circuit declaration that all method-of-treatment claims to be ‘automatically’ patent-eligible under section 101.
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Vanda said that the Federal Circuit applied Mayo case law to its patent claims and that it “held that those claims are not ‘directed to’ a law of nature itself, but to a patent-eligible “appl[ication]” of such laws”.
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Trademarks · Latest News IACC disrupts iOffer counterfeit marketplace The International AntiCounterfeiting Coalition (IACC) has disrupted the sale of counterfeits sold on iOffer, a popular online marketplace that offered easy access to counterfeit goods. iOffer temporarily shut down its website after the IACC and its partners took steps to stop payment processing on the site. According to the IACC, iOffer has been a tremendous point of frustration for brands and the IP community, with counterfeit goods found easily across the site. iOffer has more than 100 million items and millions of daily users on its site. The IACC worked through its RogueBlock programme, a payment processor initiative that creates a streamlined process for members to report online sellers of counterfeit or pirated goods directly to credit card and financial services companies.
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IACC president Bob Barchiesi commented: “iOffer advertises itself as an online marketplace where you can buy and sell ‘practically anything’.” “Unfortunately, ‘anything’ includes inferior and harmful fakes such as electronics, batteries, sneakers, jewelry and handbags, to name a few.” He added: “We hope iOffer will take this opportunity to protect their customers by building systems and processes to mitigate against fakes on their site.” Barchiesi applauded Mastercard and all the payment partners the IACC works with on RogueBlock. He said together the coalition and its partners were “protecting unwitting consumers from buying counterfeit, inferior goods”. “Our payment partners have become an integral part of our community of stakeholders committed to fighting fakes.”
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Trademarks · Latest News
WIPO Headquarters, Geneva, Switzerland
McDonald’s appeals Big Mac trademark revocation by EUIPO McDonald’s has filed an appeal against an EU Intellectual Property Office (EUIPO) revocation of its Big Mac trademark. The trademark was revoked after Irish fast food chain, Supermacs, attempted to register the term Big Mac in classes 29, 30, and 42. McDonald’s opposed, but failed. The EUIPO’s cancellation division ruled that McDonald’s had failed to “[prove] genuine use of the contested EU trademark for any of the goods and services for which it is registered” and revoked the mark. Supermacs had argued that McDonald’s is engaged in “trademark bullying; registering brand names which are simply stored away in a war chest to use against future competitors”. A McDonald’s spokesperson said they were confident that in the event of an appeal the decision would be overturned by the EUIPO Board of Appeals.
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International trademark applications under Madrid see six percent increase The World Intellectual Property Organization (WIPO)’s Madrid system saw more than 60,000 trademark applications in 2018, a 6.4 percent increase on the previous year. Figures released by WIPO show that applicants from the US filed the largest number of international trademark applications using the Madrid system, with 8,825 filed. Germany, which came in second place, filed nearly 7,500 trademark applications using the system, while China in third place filed 6,900. China came third with 6,900 international applications. Almost every country filing using the Madrid system saw growth in their number of filings, with only Australia and Austria filing less than in 2017. European entities made the majority of the top 10 corporate filers, with six originating from the continent. Only one came from the US. Computers and electronics were the most specified class in international trademark applications in 2018, accounting for over 10 percent of total applications. Among the top 10 classes, technological services (13.8 percent) and cleaning preparations (12.9 percent) saw the fastest growth. In terms of industrial designs, WIPO’s Hague system saw a 3.7 percent growth in 2018, with applications reaching more than 5,400. www.ippromagazine.com
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Mexico · Country Profile
Party in the USMCA: Mexico holds its hands up to IP changes USMCA, NAFTA’s replacement, has brought Mexico to a crossroads for its IP industry
As an intellectual property jurisdiction, Mexico offers the same IP rights as its North American neighbours, including registrable rights such as patents, trademarks, and designs, as well as non-registrable rights including copyright and trade secrets. Mexico also offers origin denominations, plant varieties, and neighbouring rights. New amendments to the Mexican Industrial Property Law modified the term of protection for industrial designs, introduced the protection of Geographical
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Indications and widened the concept of “trademark”, to include non-traditional marks. These changes might help Mexico to be more attractive for investment, at least compared with other countries, especially from Latin America. In general terms, the filing of patents and trademarks in Mexico has been increasing in the last few years and authorities have duly taken steps to improve and modernise the country’s processes. These steps have placed Mexico among the most competitive countries in Latin America. Just like its neighbours, the Mexican IP system has seen various numbers of amendments and changes in recently. The newest amendment to the Mexican Industrial Property Law modified the term of
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Ben Wodecki reports
The North American Free Trade Agreement’s replacement, the US-Mexico-Canada Agreement (USMCA), will shape American trade policy for years to come.
Mexico · Country Profile
Maria Belen Rivadeneira, director of the IP department at Vivanco & Vivanco notes that the amendments have been introduced in order to conform to the Trans-Pacific Partnership and the Hague Agreement, with the latter being required for the entry into force of the US-Mexico-Canada Agreement (USMCA). US president Donald Trump has emphasised that USMCA will “protect intellectual property” for US workers. But how will the agreement impact IP in Mexico? Rivadeneira said she expects USMCA to impact IP in Mexico, specifically in patent prosecution and plant varieties. USMCA will extend patent protection for pharmaceutical companies in Mexico and Canada to 10 years for biologics, bringing the term closer to the US’s 12-year protection. The agreement includes increased measures for copyright protection, 10 years of data protection for biologic drugs and new protections against the theft of trade secrets. A White House statement called these protections “vital to promoting innovation and economic growth”. Former Mexican president Enrique Peña Nieto signed the agreement on behalf of Mexico in November, but his successor Andrés Manuel López Obrador is a strong nationalist, and Rivadeneira questions whether or not he will take the agreement further. She points out that members of his team have mentioned that ratification might not happen if some import tariffs for steel and aluminium coming from Mexico are not eliminated.
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Rivadeneira notes that Mexico still has to sign to several international treaties and make some additional amendments to the Mexican legislation, and adds that the legislative process is “usually very slow”.
Problems with pirates Moving away from USMCA, one of the biggest issues facing the Mexican IP system is online piracy. Global piracy reached almost 190 billion pirate site visits in 2018 and Rivadeneira says it is the “second most damaging crime after drug trafficking”. Mexico is fourth in the world for piracy numbers and the highest in Latin America, according to figures provided by Rivadeneira. For copyright holders attempting to combat this, Rivadeneira says their biggest challenge is “the excessive bureaucracy of the criminal and administrative authorities”. She hits out at “the ignorance on IP topics of the officers in charge” as a reasoning why copyright enforcement is overlooked in Mexico. Copyright in Mexico is administered by the National Institute of Copyright (INDAUTOR) and sometimes mediates certain types of copyright disputes. Rivadeneira argues that INDAUTOR “lacks authority and [the] facilities to carry out enforcement of copyrights”. But despite problems with pirates and challenges to be faced with the upcoming USMCA, Mexico is beginning to position itself as a challenger to the behemoth IP jurisdiction that is the US. With a little more time, Mexico could shape itself as a modern, forward-thinking jurisdiction, with a lot to offer to any IP owner looking for rights there.
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protection for industrial designs, introduced the protection for Geographical Indications and widened the concept of a trademark, to include non-traditional marks.
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UK Trademarks · Feature
Harmony under the shadow of Brexit
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In the midst of changes to the UK’s trademark law, the towering shadow of Brexit threatens to wreak havoc on harmonisation efforts There has been plenty of change to UK trademark law in recent months, with increases to harmonisation and added provisions to non-traditional Ben Wodecki marks. Alongside these more reports routine changes, like a thick fog hanging overhead, the shadow of Brexit promises to alter UK trademark law even further, leaving attorneys adrift in a sea of new legislation and disruption.
The UK intellectual property industry had a successful 2018, ranking highly on the GIPC 2019 International IP Index as a result of its “sophisticated national IP environment”. But with changes set to come, former CITMA president Kate O’Rourke that changes in harmonisation and the impending doom of Brexit could be big distruptors in the future. O’Rourke expressed the importance of a harmonised approach and says it will benefit everyone in the IP sphere”.
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UK Trademarks · Feature Despite Brexit, EU member states are looking for greater harmonisation at the micro level down to the trademark offices. A lot of this harmonisation is led by demand from trademark and design owners “who don’t want to see minor differences in the law between countries”. The EU IP Office (EUIPO) also offers a number of convergence programmes, which support increased harmonisation with IP offices around the world. “This is a great initiative,” she says, but warns that these programmes need to be handled carefully “because there are different approaches in different countries”. Again, despite Brexit, O’Rourke says the EUIPO is keen to keep the UK involved in its harmonisation and convergence initiatives. O’Rourke adds: “The UK has a long and well-respected tradition of protection and enforcement of IP rights and the UKIPO has an international reputation for excellence, and there is no appetite to lose this expertise.”
Non-traditional marks Legislative changes at the start of the year have allowed UK rights holders the opportunity to obtain new types of marks, including moving, sounds, and motion types. Since the rule changes in Europe came into force in October 27, only 58 new types of European trademarks have been registered, while 36 are currently under examination and 16 being either refused or withdrawn. Speaking at the CITMA Spring Conference, O’Rourke said that these marks hadn’t seen such a huge take up and highlighted that low numbers of applications, in turn, means a low number of objections, admin decisions and case law. She added that attorneys need consistency for categorisation and guidance for these mark type selections.
Forward focuses Despite positive changes in terms of increased harmonisation, O’Rourke did warn that the slashing of budgets for trading standards has deeply damaged enforcement on the ground in the UK. She points to the two previous where the UK had trading standards officers who did a lot more enforcement on the ground, even in the suburbs of London. O’Rourke says she feels like the UK has “lost something” and added that if the resources were available, then that is where she thinks they should be put. She also expressed the need to focus on mediation and arbitration and the UK Intellectual Property Office and UK courts were pushing for this and resulting in more cases being settled than going to full trial.
Legislative wishes O’Rourke hopes for to UK legislation post-Brexit, because IP owners and professionals will need a period of consolidation to minimise further disruption. The main change she hopes for in the long term, is for the EUIPO system to become a regional European system, in the hopes that countries like Norway, Switzerland, and of course, the UK could join. She concludes: “We know that the pan EU system has worked well and that trademark and design owners benefit from the ability to secure protection across a number of countries with one registration and to enforce those registrations regionally. An expanded system would be even more welcome.”
A LOT HAS HAPPENED IN THE PAST 18 MONTHS AT MEWBURN ELLIS... You may notice we look a little different: we’ve rebranded to become ‘the forward-looking IP firm’. We’ve also opened an office in Munich, moved to larger offices in three locations, invested in our trade mark business and fully opened our doors to lateral hires. Our plans do not end there though… You will see and hear from us more as we continue to help you navigate your business journey, using intellectual property to imagine, plan, nurture and protect your innovations.
Find out more at mewburn.com
IP Licensing · Feature
A swinging pendulum
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Predicting in which direction IP licensing rates will swing can be quite difficult. A recent survey from LES attempts to swing understanding in the right direction
Ben Wodecki reports
In life, change can come at any moment. In intellectual property licensing, change, like a pendulum, switches direction every year.
According to the Licensing Executives Society (LES)’s High Tech Sector Royalty Rates & Deal Terms Survey, which surveyed over 150 specific IP deals transacted from 2014 through 2017, royalty rates have had peaks and troughs over the past few years.
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What has changed? At the beginning of the global financial crash in 2008, IP royalty rate averages were around five percent. They jumped up to seven percent by 2010 and went back down to four by 2013. A year later they shot up to 6.5 percent until resting at 4.5 in 2017. According to LES’ president and chair Bob Held, this volatility, described as “an almost sinusoidal wave”, has been in part caused by the 2011 America Invents Act (AIA) and various court rulings like Alice v CLS Bank, which have “taken a toll” on the industry. www.ippromagazine.com
IP Licensing · Feature
Approach [China] with eyes wide open and work with people who understand it
Despite inconsistencies in terms of royalty rate averages year-on-year, one point of note in the survey is that the aerospace technology industry has continued to hold the highest royalty rates. In this most recent survey, aerospace technologies held a royalty rate of 9.29 percent. Held, who spent eight and a half years in the aerospace industry, explains that the royalty rate is so high because of the excessive time it takes for this kind of technology to form during its development cycle. When aerospace technology finally reaches the commercial sector following applications in both the military and aerospace industries, they have been “fully-tested and developed many times over” and come with a full set of assets including technical data packages, software, and trade secrets. Other industries the survey shows as having high royalty rates are software (6.5 percent) and medical, health, and biotechnology (6.4 percent). In terms of the contents of these licensing deals, 61 percent of IP licensed assets included patents. Only 36 percent contained software, copyrights or trademark and just 34 percent of licensing deals involved trade secret or know-how components. Of the 150 deals analysed, 48 percent were exclusive grants, whereas 45 were non-exclusive. Held explains that nearly 80 percent of a company’s value “comes from its intangible assets”, and with that, it seems essential for a business to license its assets for financial gain. Of the 88 percent of respondents admitting to being licensors, only 35 percent said they entered into licensing deals for monetary gains. Instead, 28 percent of those licensors entered into licensing deals for strategic purposes, with just 11 percent conducting licensing of standard-essential patents.
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Given the way the industry is set up in terms of its development cycle, it’s likely the royalty rate for aerospace technologies will remain high, but what could change elsewhere? Patents could see a reduction in terms of being the most licensed IP asset. The validity of a patent can always be challenged and Held adds that, today, it is much easier to invalidate such an asset due to changes in cost, law and judicial proceedings. There also may be a swing toward China, where patents are growing in value. Held says that the outcome of China’s IP landscape is still speculative, however, he emphasises that countries and companies should “approach it with eyes wide open and work with people who understand it and can help them license technology into or out of China”. Elsewhere, Held observes that the role of non-practising entities (NPE) in licensing could all but disappear. Negative media portrayal has lead to a significant decline in such actors in this industry, he says, and it could decline further. Held reveals that two-thirds of the non-NPE respondents in LES’ most recent report stated that they would not use NPE services. Such entities are also struggling under the AIA’s IP rights provisions and the lack of injunctive relief, which is making patent litigation more difficult and as a result, resulting in many NPEs going out of business. Held continued: “Granted, there were bad actors in that realm, but there were also true licensing entities that had the wherewithal to help individual inventors and small companies protect their patents and their technologies.” Despite the doom and gloom for NPEs, Held explains that LES is seeing positive changes in industry and “hopes momentum continues”. No matter the changes, he holds that LES will be on hand to inform members about the latest trends and share best practices. Held concludes: “LES is growing, we’re getting stronger and we are continually taking steps to meet the needs of our community.” www.ippromagazine.com
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Nadaline Webster · Opinion
AI can’t replace the ‘human’ part of being a lawyer
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TrademarkNow’s Nadaline Webster discusses the reluctance of legal practice to embrace technology A recent article on legal technology by Max Cole, co founder of Autto, discussed some of the challenges in the adoption of technology in a cautious and conservative market such as the legal field. It had some interesting points to make about how outside the practice of law, legal work is done to one extent or another by virtually everyone and to a greater or lesser degree, this is absolutely true. In his article, Cole adopted the phrase ‘legalish’ to describe the activities within businesses that touch on legal processes regardless of
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whether the person completing the tasks is qualified as a lawyer or not. To that extent then, the market for legal technology that automates certain processes is exponentially larger and comprised of those who may well be more enthusiastic about the early adoption of technologies in general. So far, so good! www.ippromagazine.com
Nadaline Webster · Opinion
The rise of legal technology and indeed of ‘ legalish’ may indeed be treading on legal toes and eliciting emotional responses but slowly many lawyers are realising and embracing the fact that in some cases, the work being done is heavily manual and repetitive Nadaline Webster Director of content, trademarks TrademarkNow
The most interesting part for me is a comment on the article by Ed Goold, counsel and COO at Ohalo, which charted his journey of reluctant acceptance of the key proposition of the article and hints at the fact that some, at least, of the resistance to the adoption of legal technology by lawyers may come from an emotional response rather than any built in conservatism. He stated: “The idea that the study and the training and the general experience might not be necessary for legal work with the right (usually automated) tools is intrinsically galling for the lawyer who has been through the traditional wringer to get where they are and I think that, more than anything, else accounted for my initial reaction, which was essentially lead by emotion.” Sometimes we forget that lawyers are first and foremost, people. Like the rest of us, they have human responses to human concerns. This is where the key may lie in allaying concerns about both the ‘robots-lawyers’ of the future and legal functions en masse being taken over by a wide variety of people with varying amounts of legal education. My company provides also tools that support legal function and that are user friendly and understandable enough to be freely used by those without a legal background or education. But there are two caveats to that: One: whether or not any particular company might use the results of the data analysis provided without an accompanying legal opinion is going to depend on their own in-house expertise and acceptable risk level. I’m sure the same applies to many other legal technology tools available and Two: In our case (and I’m sure the same is true for many other legal technology companies) the workload covered by
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the tools is low-level cognitive work that is and has often been performed by non-lawyers in any event. The collection of reams of trademark data for analysis inhouse or even in private practice often falls to paralegals or administrative staff with the end results being sent to the lawyer for review. There is a considered difference between completing a given task or workload, regardless of the method used to complete it and making decisions based on the results of the work in question. This is where the very human experience and intuition of the seasoned lawyer cannot be replaced. The rise of legal technology and indeed of ‘legalish’ may indeed be treading on legal toes and eliciting emotional responses but slowly many lawyers are realising and embracing the fact that in some cases, the work being done is heavily manual and repetitive. In an interview with TrademarkNow, Marty Schwimmer of Leason Ellis highlighted the other side of the emotional response coin by pointing out the advantages in being freed up to be more creative in your legal practice. He said: “Technology frees you to be more analytical about important stuff because you are not busy just writing down numbers.” For a rapidly increasing number of lawyers, particularly those working in-house, being unleashed from tedious, time draining tasks has revealed opportunity rather than disaster. Demands on lawyers to play a bigger role within the company, serve as a business partner rather than simply serving legal interests and creating collaboration between departments has never been greater. Far from technology or ‘legalish’ diminishing their practice or position as a lawyer, it is enhancing it. www.ippromagazine.com
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