For the half-year to 30 June 2015, the IPKat's regular team is supplemented by contributions from guest bloggers Suleman Ali, Tom Ohta and Valentina Torelli.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 22 May 2015

Does a patent professional need to raise the trade secret option with the client?

I recall being in a meeting a while ago where the matter under consideration was whether to seek patent protection. All of the assembled, save this Kat, were patent professionals principally engaged in the non-contentious, registration side of the patent practice. Well into the discussion, this Kat raised the question of whether it would not also be useful to address trade secret protection, given the nature of the technology under discussion. One of those in attendance sniffed and said, “Come now--you can really protect only what you disclose”, meaning presumably that what you protect is only what you can register as a patent. No one took issue with this and the discussion continued, focusing solely on patent registration matters. The message conveyed to this Kat was that he was instructed, more or less, to return to his basket and do what he was told.

The question that has nagged this Kat since that meeting is the extent to which an attorney who is engaged in patent matters, or a more narrowly licensed patent attorney, has any duty or obligation to raise the trade secret option to a client and, if so, actively to counsel how the client might behave to protect is trade secret. From a different angle, if the patent professional is a licensed patent attorney but not a licensed lawyer, is he/she prohibited from providing legal advice on the trade secret aspects of a client’s invention? That trade secret protection, as weak or as strong as one views it, is an alternative form of protection for an invention was emphatically recognized by the United States Supreme Court in the 1974 case of Kewanee Oil Co. v Bicron Oil. There, the Court addressed the bedrock issue under United States law of whether the federal patent right, anchored in the U.S. Constitution, pre-empted the state law of trade secrets, rendering the latter legally void. In ruling against pre-emption (and thereby preserving the validity of the trade secret right under various state laws), the Court devoted extensive attention to explaining how trade secret protection was a desirable and robust legally alternative to the patent law.

The problem is that one who is engaged in the registration of patents derives no direct pecuniary benefit if a client seeks to protect his invention as a trade secret. As such, absent any legal mandate to do so and assuming that there is no legal prohibition, the incentive to address the possible trade secret aspects of an invention may be lacking or, in the current academic nomenclature, there may be a misalignment between the lawyer and his client.  Kewanee Oil sharpens our understanding of the circumstances in which the patent/trade secret interplay might arise: (i) the trade secret is clearly patentable subject-matter; (ii) the patentability of the trade secret is uncertain and (iii) the so-called invention is not patentable. Having regard to option (i), if the client seeks patent protection and the trade secret is clearly patentable, the rationale to expect the attorney to raise the trade secret option is weak. Regarding option (iii), since there is no reasonable patent option, the only question is whether the implications and operation of trade secret protection should be raised. More difficult is option (ii), which lacks the certainty of alternatives (i) and (iii). Should the patent professional pose the problem as choosing between two options—patents or trade secrets, or rather focus only on the patent option, setting the risks and likelihood of success?

But choosing between a trade secrets and patent protection does not depend solely upon the registrability of the invention. There are at least two additional factors. First, there is the issue of costs. Rarely can a client afford patent protection for all possible client inventions. Priorities must therefore be established about what to protect as a patent. In counselling the client on what his patent portfolio should look like, should such advice extend to actively suggesting how to manage those aspects of the client’s developments that will be protectable (perhaps by default) by trade secrets? Secondly, there is the potential role that trade secrets may play in the client’s broader business context. The report by Wesley Cohen, Richard Nelson and John Walsh, “Protecting Their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)”, NBER Working Paper 7552 (2000), is frequently cited for the proposition that (at least for R&D managers), first-mover advantage, undergirded by trade secret protection, may be the preferred way to monetize a company’s developments, except for the pharmaceutical and medical instrument fields. Should these research findings play any part in the counsel and advice given to a client who expresses an interest to patent a putative invention?

Circling back to the questions posed above, this Kat has no ready answers. Still, he has the lingering feeling that the nature of the relationship between the patent professional and the client does not always optimize the client’s appreciation for the potential trade secret alternative. Whether the patent professional can (or should) be doing so is a separate question.

Disturbing news from Eponia: staff union under fire

Merpel has been having a quiet May, but has been rudely awoken from her frolics in the amiable grass of Lincoln's Inn Fields (her preferred place for Spring gambolling) by disturbing news from the European Patent Office.

Improved social dialogue ...
The IPKat initially welcomed the call by the Administrative Council of the EPO for the President to work towards recognition of the trade unions of the EPO and to work towards improved social dialogue.  Then, an initial meeting seemed to achieve little more than to agree another meeting, which was at least better than not to agree another meeting.  But in the meantime, most of the reforms to which the EPO staff objected were being pushed through, and it began to appear as though, even if union recognition was achieved, it would be too late to achieve any of the modifications that were needed to the reforms.

"J'accuse!"  Bad
news for EPO staff
Through all of this, there have been many reports that staff representatives (people elected under EPO procedures to serve on the Central Staff Committee and attend the General Consultative Committee, which the is the body in which staff consultation takes place, in the absence of union recognition) have been investigated or disciplined in relation to their work as staff representatives.  They have also been publicly castigated for their work (see here and here), notwithstanding that they are elected under EPO procedures (recently reformed by the EPO administration to be by single non-transferable vote) and are performing their elected function.

Control all risks!
Now, SUEPO, the Staff Union of the EPO, has announced (see news item of 21 May) that it understands that Control Risks (who describe themselves as "an independent, global risk consultancy specialising in helping organisations manage political, integrity and security risks in complex and hostile environments") has been commissioned by the EPO to investigate staff members who are elected representatives of the Staff Committee and/or Staff Union.  Merpel considers that this completely undermines any attempt at social dialogue, or moves towards union recognition.  How are EPO employees to be expected to serve on the Central Staff Committee, or to represent the EPO unions, if at the same time they are to be harassed and investigated, apparently for performing this very service?

BB, or BB?
By this action, the President of the EPO and his administration risk being seen as acting to destroy utterly the very social dialogue that they claim to be seeking.  More seriously from the constitutional position of the EPO, they are contravening the explicit instructions of the Administrative Council, to whom the President is ultimately answerable, who have "call for a renewed social dialogue" and instructed the President to work towards formal recognition of the trade unions.  Sabotaging these talks by simultaneously investigating staff members flies against both the spirit and the letter of these instructions.  The talks are in danger of becoming a sham and a smokescreen, increasingly failing to hide that the President is determined that nothing will change.

As ever, Merpel welcomes comments, but begs to remind readers of the following:
Henceforth, in respect of all EPO-related blogposts, no comment will be posted if it is merely ascribed to "Anonymous".  Any reader wishing to conceal his or her identity must adopt a pseudonym (which should not be obscene and should not be the name, or the mis-spelling of the name, of a real person).  The pseudonym need not be an actual login name, as long as it is stated clearly at the beginning and/or end of the comment itself. This way, it will be easier for people who post later comments to identify and remember the earlier comment-poster and to recall the discussion string.  Where, as has already happened on occasion, a string carries over from one blogpost to a later one on the same or a related subject, readers will be encouraged to use the same pseudonym for the sake of continuity.

Do you value an invitation to the UPC court fees consultation event?

It's not about the money for the AmeriKat, just
about the correct level of padding required for a proper nap
US Vice President Joe Biden once said "Don't tell me what you value, show me your budget, and I'll tell you what you value."  That is to say, people put money towards what they consider to be valuable.  If the money is not there, chances are it is not valued.  The question now taking center stage in the on-going Unified Patent Court saga is all about money, budgets and value in the form of court fees, SME support and recoverable costs in the UPC (see Kat Darren's recent post on a different monetary debate regarding the unitary patent here and UPC court fees here).  

For months (if not years), private practice and industry members alike have demanded more clarity on the costs of the UPC - will it be more expensive than current litigation before national courts or does it represent value for money?  As reported by the IPKat earlier this month, stakeholders finally have an opportunity to state their case as part of the Preparatory Committee's consultation on court fees.  The consultation closes on 31 July 2015.  The link to the consultation can be found here and here.  

This morning the AmeriKat's friends at the UK Intellectual Property Office alerted her to news of a London-based event where these issues will be discussed.  The alert reads as follows:  
"CIPA, The IP Federation and the IPO will be hosting awareness raising events for individuals and businesses to gain a better understanding the background of the consultation, the details of the various elements contained within it and how best to get your views across. 
The London event will take place on the 23June 2015 from 18:00-19:30 at the Allen & Overy Offices (Allen  & Overy LLP, One Bishops Square, London, E1 6AD).
This will be an interactive event with a panel of experts discussing the key elements and generating discussion from the audience.  We are pleased that Mr Justice Birss, Kevin Mooney and Alan Johnson have all been confirmed for the panel.  A live and interactive webinar is also planned.  Details of how to join on-line  will be issued shortly.   
If you would like to attend the event please RSVP to Tina Alexander (Allen & Overy) at
The UK IPO are also exploring the possibility of hosting an event in Scotland and one in Manchester or Leeds. If you would be interested in attending any of these events, please click one of the links below, for your preferred location, and register your interest with the IPO:

I would like to go to an event in Scotland
I would like to go to an event in Manchester
I would like to go to an event in Leeds"
The AmeriKat is certain that this will be an entertaining and passionate discussion.  She hopes that in relation to Part B of the consultation document questions such as "How does one go about accurately valuing an action?" and "What happens if there is a dispute about the value of the action?" are thoroughly addressed.  Perhaps applications, like the one recently made in Big Bus (see Merpel report here), could assist the parties in determining the value of the action.  For those readers unable to attend the event (or watch via webcast), the IPKat will provide a summary of the proceedings following the event.  

When functionality cuts deep, it can be hard to handle: Yoshida appeal dismissed

Last year the Court of Justice of the European Union (CJEU) remitted to the General Court Joined Cases C337/12 P to C340/12 P Pi-Design AG, Bodum France SAS and Bodum Logistics A/S v OHIM, Yoshida Metal Industry Co. Ltd, in order to revisit the trade mark dispute concerning a Community trade mark (CTM) representing a surface with black dots, resembling a knife-handle, as reported by Alberto on the IPKat here.
In short, the dispute turned on the applicability of Article 7(1)(e) ii) of Regulation 40/1994 (long since superseded by Regulation 207/2009) to a figurative mark consisting of a two-dimensional representation of a three-dimensional shape of what was said to be the handle of one of Yoshida's knives.  That provision is aimed at prohibiting the registration as trade marks of (de)signs which consist exclusively of the shape of goods which is necessary to obtain a technical result. The public interest underling this provision is obvious and addresses the market’s need to keep technical solutions and functional characteristics free for use on part of the trade mark proprietor’s competitors. Moreover, the sign still must work as a commercial origin identifier.
In reliance on this ground of non-registrability, Pi-Design and the two Bodums applied to invalidate Yoshida's registration of an “array of dots appearing on the handles of knives”, registered for goods in class 8 “cutlery, scissors, knives, forks, spoons, whetstones, whetstone holders, knife steels, fishbone tweezers” and, in class 21, ”household or kitchen utensils and containers (not of precious metal or coated therewith),turners, spatulas for kitchen use, knife blocks for holding knives, tart scoops, pie scoops".

When the case was lodged the first time before the General Court, the latter considered that the Board of Appeal erred in applying a principle of reverse engineering to assess the real nature of the marks at issue on the basis of elements (Yoshida’s American patents) other than the trade mark applications. The Board of Appeal should not have concluded that the black dots were non-skid structures featured on the surface of the marks: it is the trade mark application that is the sole documentation to take into account since it includes the trade marks’ representations which define the scope of protection of the sign and must be self-contained.

That being said, the CJEU took a totally different stand upon receiving the appeal of Pi-Design, Bodum France and Bodum Logistic. The Court of Justice specified that the examination under Article 7.1.e.ii) must be in compliance with the provision’s purpose of public interest, so that it can encompass all relevant materials not limited to the trade mark’s graphic representation and descriptions.

In its judgment yesterday, the General Court ruled on the single plea in law raised by Yoshida, as divided into three parts, and rejected Yoshida's appeal.
First, the Court observed that, contrary to Yoshida's argument, Article 7(1)(e)(ii) applies not only to three-dimensional marks but also to two-dimensional marks representing the shape of a product, when all its features serve a technical function. 

Secondly, the General Court analysed whether the Board of Appeal correctly assessed the nature and the essential character of the contested marks’ main characteristics, identified in the contour of the trapezium shape and the arrays of black dots. Yes, said the Court: the Board of Appeal was right to conclude that the marks at issue constituted the shape of goods produced and marketed by the trade mark proprietor. Despite Yoshida’s denial, the trapezium shape was not a negligible element of the mark and indeed represented the handle of its knives or other cutlery. The Court also recognised that the array of black dots featured on the marks’ surface was nothing else than knives’ indentations.

Thirdly, the Court addressed the interplay between various IP rights (i.e. trade marks, patents, designs) and IP holders’ strategies to bolster those rights either by extending them or by replacing the protection of one of them with another.
 The Court took the view that, on the basis of Yoshida’s patents, the indentations included in the contested CTMs were there to obtain the technical result of providing the knives with a non-skid structure. Although the array of dots could not be patented, they were relevant in assessing the nature of the contested marks, where they were considered an essential feature of the products for trade mark purposes.
The fact that Yoshida’s patents and the contested CTMs were filed at the same time did not affect the outcome of the application since, bearing in mind the public interest of Article 7(1)(e)(ii), when patent protection expires, trade marks may grant protection for unlimited periods of time.

Other arguments set out by Yoshida were equally unsuccessful: that the shape of the handle could equally or even more contribute to the non-skid effect of the cutlery just confirmed that such a handle had a functional character; although the dents could not be necessary for the non-skid effect, also provided that the handle’s shape could serve that purpose, the invalidity ground was not to be excluded; finally, either the shape of the handle or the disposition of the array of black dots had no fanciful or ornamental character.
All in all, the Yoshida’s marks were found capable of preventing other competing undertakings from using either similar or identical shapes which were considered to be purely functional shape for a technical result. 

Thursday, 21 May 2015

Colourless Copaxone in the clear: Teva's synthesis patents held to be (mostly) valid

Glatiramer acetate in action
In the patent world, there are some cases that just keep on giving.  One such is the continuing litigation between Synthon and Teva over Copaxone (glatiramer acetate), which is a treatment for multiple sclerosis, and which is responsible for $4.2 billion worth of annual sales for Teva worldwide.  This has already given us interesting and striking decisions from the Patents Court  (also here) and the Court of Appeal in England, and also the US Supreme Court.  These cases concerned EP 07862888 and its equivalents.  The parties have been back in court to fight over other patents, resulting in the decision Synthon B.V. v Teva Pharmaceutical Industries Ltd [2015] EWHC 1395 (Pat), which came out this morning.

The patents concerned are EP (UK) 2 177 528 and EP (UK) 2 361 924, both divisionals of EP (UK) 1 799 703, which was revoked by the EPO in opposition proceedings pursuant to Teva's withdrawal of it after a negative preliminary opinion.  Both patents relate to reduction of metal ion impurities and/or free bromine in glatiramer acetate and the processes leading to it.  Free bromine was found to result in brominated side-products, while metal ion impurities were found to cause the glatiramer acetate to turn red on storage.  Synthon was seeking revocation of the patents.

A few claims fell because of added matter problems, but otherwise both patents were maintained as valid.  Mr Justice Birss decided in a compact and very readable judgment that both aspects of the invention were novel and not obvious:
  • Synthon had not established that the skilled person would necessarily note the brominated side-products in routine analysis of the product. Even though, once the issue was identified, it was obvious to remove any free bromine from the HBr reagent that was used, in order to prevent formation of the brominated side-products, it was not obvious to do that if the problem had not been identified.
  • It was not obvious that the red colour was caused by metal ion impurities.  The judge accepted the opinion of Teva's expert Prof Ben Davis that the standard practice of a skilled person faced with a problem of colouration would be to identify the cause of the colouration and then, having identified the cause, employ a solution based on that knowledge.  However, it was entirely clear on the evidence that identifying the cause of the red colour is challenging, so the presence of metal ions would not have obviously been identified as the cause.  Therefore, there would have been no reason to reduce the metal ion content.
In relation to the metal impurity aspect, Synthon also mounted an insufficiency squeeze argument that, if the patent was novel and inventive over the prior art, then the patent did not disclose sufficiently how to ensure the absence of metal ions.  This was pretty much doomed from the start, since it relied on equating the position of the skilled person following the prior art with the position of the skilled person after reading the patent.  There was no evidence adduced that the skilled person could not make glatiramer acetate with less than 100 ppm metal ion impurities without undue burden.  This illustrates that even in a squeeze argument, a pleading of insufficiency needs to be backed up with evidence.

These are the main substantive findings in the judgment.  There are however a number of other points of interest.

1) Synthon's expert, Professor Alethea Tabor, got into hot water because some inaccuracies in her initial expert report, pointed out by Prof Ben Davis in his reply report, were not corrected in a further reply report, but rather left to be dealt with in cross-examination. This was apparently on the advice of Synthon's legal team.  Although she was criticised by the judge for this, he also paid tribute to her oral evidence, and considered that the fact that this was her first time acting as expert witness contributed to the error.

2) The judge noted (at [115]) that there is no requirement for a patent specification to indicate that any particular element of the invention is surprising or difficult. While such language appears sometimes in patents, Birss J pointed out that it can be a hostage to fortune when it turns out that prior art, which perhaps was unknown to the inventors, shows that something was not so surprising after all.  He concluded "The primary task of the specification is to explain the invention so that the claims are supported and can be understood and so that the skilled person can perform the invention to the standard required by the law. That is quite enough."

3) Synthon tried to advance a case of lack of inventive step due to no technical advance, or lack of plausibility that the invention works (based on EPO caselaw of Agrevo/Triazoles [T939/92] ).  Birss J held that such a point has to be expressly pleaded, and it cannot be argued on the basis of a general pleading of lack of inventive step.  Because it was not specifically pleaded, he considered that Synthon could not advance it.  He doubted it on the merits in any event.

4) Synthon argued that the EPO decision  Novartis/Erythro-compounds T990/96, which states that "a document disclosing a low molecular chemical compound and its manufacture makes normally available this compound to the public ... in all desired grades of purity" created a general legal principle that purity is not patentable.  Birss J rejected this submission, partly distinguishing the decision because it related to small molecules, whereas glatiramer acetate is a larger biological molecule, and partly because  T990/96 itself accepts the possibility of exceptions.

5) Both patents had in the meantime been revoked on 22nd April 2015 by the Hague District Court, but Birss J considered that the evidence before the Dutch court was different in key respects.  He therefore had no compunction about reaching an opposite conclusion.

Merpel was very happy that the judgment came out just in time to note the election of Prof Davies as a Fellow of the Royal Society.  This Kat in the meantime is left wondering whether, when a point seems hopeless in the final judgment, did the team advancing it not notice, or did they have nothing better to put forward?

EPO revises proposals for renewal fees for Unitary Patents -- but does it really make any difference?

A couple of months ago Merpel reported on the first proposal presented by the President of the European Patent Office to the Select Committee of the Administrative Council concerning the level of renewal fees for the Unitary Patent.

This proposal was criticised by some, since in the first 10 years the level of renewal fees was determined by reference to the EPO's internal renewal fees that are payable to the EPO during the pendency of a European patent application before grant, rather than by reference to the (much lower) level of renewal fees payable to national patent offices in respect of a granted patent over the same period. Only after year 10 (by which time the fees, which get higher year-on-year, were themselves much higher) was the level of fees pegged to what would be payable in respect of either 4 or 5 of the top validation countries for European patents currently. 

In response to this, the IPKat has learned that the EPO has now proposed a revised level of renewal fees, which is actually along the lines suggested by the critics of the earlier proposal.  The proposal has been published, but not on the website of the EPO, rather on the website of the law firm Fish & Richardson.  (In the meantime, the IPKat has noticed that the original proposal document from March is available on the website of the law firm Allen & Overy).  

The IPKat is hugely grateful to Bernard McDonald, technical assisant at Gill, Jennings & Every, who not only alerted him to the issuance of the revised propsoal, but also prepared a note about it, which is reproduced below with enormous thanks and a hearty Katpat.  Over to Bernie:

Following discussion of its previous proposals for renewal fee levels by the Select Committee of the Administrative Council in March 2015, the EPO has submitted a set of revised proposals for further consideration.  The proposal document (SC/18/15 e) was submitted on 7 May 2015.

The EPO revisions include reduced fee levels for patent years 2 to 9 and a more comprehensive economic analysis to support the chosen fee structures.

The revised proposals
The revisions address concerns raised over the application of the EPO internal renewal fee level for the early years of patent protection and over the low unitary patent take-up rates used in calculating potential renewal fee income.  The resulting proposals provide “true TOP4” and “true TOP5” levels that include national renewal fees from year 2 onwards, and the previous proposals for a 25% fee reduction for SMEs and a 15% fee reduction where licences of right are available have been retained.

The revised proposals address specific concerns that the initial cost of unitary patents may prove too high and deter otherwise enthusiastic patent proprietors from using the new system.  The revised fees provide a theoretical saving of €2,440 (trueTOP4), €1,660 (true TOP5) or €2,843.75 (SME) compared to their counterparts in the original EPO proposal.  However, while this fee burden reduction is to be welcomed the numbers do merit further scrutiny.

Years 2-5
The lion’s share of further fee savings offered to patentees by the revised proposals are to be realised in patent years 2 to 5.  The “true TOP4” proposal provides 65.8% of further savings in this period, while the “trueTOP5” and “SME” proposals provide 75% and 52.2% in the same time frame.  This clear incentive to select unitary patent protection must be evaluated in light of length of time a patent application is likely to remain pending at the EPO before grant.

The most recently published EPO statistics for 2014 indicate that the median time to grant is 26.2 months, this period being calculated from the check of the request for examination. The period for requesting examination is 6 months from publication of the search report, which takes approximately 5.2 months according to the same EPO statistics.  These data provide a median time to grant of 31.4 months after receipt of an application by the EPO, during which time the proposed savings for years 2 and 3 will be lost.  Any additional delay in search or examination at the EPO would further erode the savings available to the patentee, and it is unlikely that any savings will be available in this time period for applications entering the EPO using the PCT route.

It is possible to accelerate the grant proceedings by paying the examination fee early, eg on filing.  Other steps that are available are a) to waive the right to the option to amend the claims early, b) to waive the obligation to confirm examination should go ahead after the search report is issues, c) to request accelerated processing (PACE) and d) to make use of the patent prosecution highway (PPH).  Waiver b) risks loss of the opportunity to receive a refund of the early paid examination fee on withdrawal after issuance of the search report, and option d) has some administrative burden.

It is clear therefore that the further saving suggested by the EPO in the revised proposals are likely to benefit those applicants who file applications directly in the EPO and who are flexible in adopting procedural approaches to speed up grant of their patents.

Years 6-9
The remainder of further fee savings offered to patentees by the revised proposals are spread over patent years 6 to 9.  These amount to €835 and €415 for “true TOP4” and “true  TOP5” proposals respectively, while the “SME” proposal offers a further saving of €1358.75 in the same period.  Clearly the incentives in the revised proposals are only slightly improved for patentees other than those that qualify for the SME fee reduction, but these may prove substantial if combined with savings in years 2 to 5.

Years 10-20
The revised proposals are unchanged with respect to the original EPO proposals for years 10 to 20.

Economic impact
The EPO’s economic analysis is repeated in the revised proposals to include unitary patent take-up rates identified as “upper+” and “BUSINESSEUROPE”.  The upper+ take-up rate is significantly higher than the EPO’s upper rate, and not surprisingly it yielded a positive forecast for the revised proposals.  The BUSINESSEUROPE rate is slightly below the upper rate used previously by the EPO, and it provides for a positive financial outcome for each of the revised proposals.

Inclusion of these new take-up rates builds a case for the adoption of a renewal fee schedule based on a TOP4 level instead of the higher TOP5 level that many commentators believe will prove too high to stimulate widespread use of unitary patents.

The Select Committee must choose between the TOP4 and TOP5 levels as the basis for the new renewal fee level, and it is likely that its decision will ultimately rest upon the take-up rates it expects to see once unitary patents become available.

The numbers indicate a clear saving for unitary patentees under these revised proposals as compared to the original EPO fee levels.  However, the amount of such savings will be determined by the filing route chosen and the efficiency of the EPO.  Significant savings will be available to innovators who file applications directly at the EPO and this should provide a clear benefit to European applicants.

In addition to the matters pointed out by Bernie, this Kat notes that the reduced fee proposals apply disproportionately in the early years, and so benefit in particular industries with short product lifecycles where patents are less likely to be maintained after, say, the first ten years.  Is this a sign of effective lobbying by those groups?  As usual, dear readers, over to you.

Thursday thingies

Every Kat's nightmare: the dreaded
Three Pekes Challenge ...
The name of Haydn Gush is unknown to most readers of this blog, but he is part of our IP ecosystem, being one of those "behind the scenes" folk who work so hard to help arrange IP conferences, summer schools and other events offered or managed by Informa.  Anyway, Haydn tells the Kats that he is attempting the Three Peaks Challenge this month, seeking to raise money for The Prince's Trust. Donations will be greatly appreciated, he adds.  To donate, just click here.

Given the option, Kats choose Farringdon --
though most humans prefer Chancery Lane
It's a Federal issue.  The London-based IP Federation, which "represents the views of UK research-based industry on policy and practice matters in in­tellectual property" [which of course we all do, adds Merpel,a little cheekily], is looking for a permanent part-time administrative assistant.   Particulars of this post can be accessed here. Bad news is that applicants have to be "well organised, with an eye for detail, and able to work without super­vision", which eliminates a number of good and well-meaning folk who would be quite happy with a post that only encroached on their time for 15 to 20 hours a week if they didn't have to work for it. A further obstacle to overcome is the need "to be familiar with Microsoft Word and Excel, and ideally with Outlook". The IP Federation's offices are conveniently situated near Farringdon and Chancery Lane Under­ground stations which means that, while The Old Nick is within walking distance, you will definitely need that refreshing pint of Badger by the time you get there.  Interested? Email David England at by 5 June 2015 -- and tell him you read it on the IPKat ...

Palomar, Solamar. Last week fellow Kat Neil posted this piece on an initial interest confusion experience he had in San Diego when attending this year's International Trademark Association (INTA) Meeting and found himself at the wrong venue.  Readers have had similar experiences.  One lawyer writes:
Not many hotels share
this name ...
"Just read your post on the IPKat. So true. My taxidriver certainly was confused between the two hotels when I asked him to take me to the Palomar and mentioned an address which he challenged, only to find out that ‘his’ address was for the Solamar. And, in an attempt to go to the CMS reception I walked into the Omni hotel where my puzzled look was quickly replied by one of the staff saying that I probably was looking for the Omnia San Diego, which is a club, a few blocks further on 6th Avenue".
And the IPKat received this missive from a correspondent who owns up to being senior in-house counsel to a well-known chain of hotels:
"Thank you for the blogpost – I think it is becoming more common for hotel companies to have conflicts within their own ranks than to have problems with competitors.  We are seeing a lot of these kinds of problems as we open additional hotels in areas where we already have a presence (although usually the conflict is due to the geographical components of individual hotel names, not to the name of the brand)".  
Duly noted. Now that the Kats have spotted these problems, will someone please be kind enough to do something about them?

19 inch plush tiger, from
FAO Schwarz (looks better
in the flesh ...)
Around the weblogs.  On the 1709 Blog, Ben Challis writes on the hitherto unknown streaming royalty arrangements between Sony and Spotify, while Andy Johnstone updates readers on the reasoning of Judge Kozinski's court in the difficult Innocence of Muslims litigation in Cindy Garcia v Google. PatLit invites patent-y readers to participate in the Wragge Lawrence Graham & Co survey on attitudes towards Europe's new unitary patent system and unified patent court [you don't have to be European to have an opinion -- or to express it, this Kat can confirm]. Elsewhere on the same weblog David Berry revisits the latest US case law on "divided infringement", Akamai v Limelight, where the alleged infringement is split between two or more parties rather than being monopolised by a single infringer. On SOLO IP, Barbara Cookson flags an initiative by fellow solo practitioner Roman Cholij who, wearing a slightly different hat, has put together a Cambridge conference programme on Patents on Life [this Kat has heard a rumour that outspoken fellow blogger and IP soloist Michael Factor may be speaking ...]. Finally, fellow Kat Neil has produced a blogpost for IP Finance that reflects his customary elegance and eloquence on hard times for the FAO Schwarz brand as the iconic toy shop leaves its flagship site for pastures green.

Fresh news from Lisbon.  Since this Kat's earlier post on the outcome of the past couple of weeks' negotiations on the international fate of geographical indications and appellations of origin, 11 countries have already become signatories to the Lisbon Agreement's Geneva Act. They are, in order of signing, Peru, Romania, Togo, Bosnia & Herzegovina, Burkina Faso, Congo, France, Gabon, Hungary, Mali and Nicaragua.  However, the Geneva Act of the Lisbon Agreement will not enter into force until three months after five eligible parties have deposited their instruments of ratification or accession. Thanks go again to MARQUES GI Team vice-chair Keri Johnston (katpat!) for letting us know.

A "transcendental moment" for "a very positive spirit", be it whiskey or Tequila

Document PR/2015/779 may not mean very much to anyone, but the title of this World Intellectual Property Organization (WIPO) media release tells a big story. But first, a little background, kindly provided by WIPO itself:

"Broadly speaking, a geographical indication is a sign used on goods that have a specific geographical origin and possess qualities, reputation or characteristics that are essentially attributable to that place of origin. An appellation of origin is a similar type of sign, but often with more stringent criteria for usage.

Scotch whisky
Appellations of origin and geographical indications both require a qualitative link between the product to which they refer and its place of origin. Both inform consumers about a product’s geographical origin and a quality, characteristic or reputation (for geographical indications) of the product linked to its place of origin. The basic difference between the two terms is that the link with the place of origin is stronger in the case of an appellation of origin.

The quality or characteristics of a product protected as an appellation of origin must result exclusively or essentially from its geographical origin. This generally means that the raw materials should be sourced in the place of origin and that the processing of the product should also happen there.

Parma ham
In the case of geographical indications, a single criterion attributable to geographical origin is sufficient for the geographical indication to qualify as such, which may also be the specific reputation of the product. Moreover, the production of the raw materials and the development or processing of a geographical indication product do not necessarily have to take place entirely in the defined geographical area.

Additional examples of appellations of origin and geographical indications are Gouda Holland, Argan Oil, Swiss watches and Tequila".
Readers will note that this background explanation does not mention the words "trade mark".  But never mind, now for the news:
"Negotiators Adopt Geneva Act of Lisbon Agreement at Diplomatic Conference

Negotiators approved a revision of an international registration system providing protection for names that identify the geographic origin of products such as coffee, tea, fruits, wine, pottery, glass and cloth.

A Diplomatic Conference was held in Geneva from May 11 to 21, 2015 and adopted the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications. The Geneva Act allows the international registration of geographical indications (GIs), in addition to appellations of origin, and permits the accession to the Lisbon Agreement by certain intergovernmental organizations.

WIPO Director General Francis Gurry concluded by thanking delegations from all WIPO member states for their very constructive engagement. He said all delegations showed “an openness to discuss different approaches in a very positive spirit.”

The President of the Diplomatic Conference Ambassador Luis Enrique Chávez Basagoitia, Permanent Representative of Peru to the United Nations Office and other international organizations in Geneva expressed satisfaction with the outcome of the diplomatic conference and called the adoption of the Geneva Act a “transcendental moment” for the Lisbon Union and WIPO.

Manx Cat: not a geographic indication
but a genetic mutation ...
The Geneva Act of the Lisbon Agreement further develops the legal framework of the Lisbon System, which helps promote many globally marketed products such as, for example, Scotch whiskey [not, presumably, to be confused with Scotch whisky], Darjeeling tea and Café de Colombia. Other changes affect fee provisions, scope of protection, protection against becoming generic, and safeguards for respect of prior trademark rights.

An official signing ceremony is scheduled for May 21, 2015 [that's today], at WIPO’s Geneva headquarters. The Geneva Act of the Lisbon Agreement will enter into force three months after five eligible parties have deposited their instruments of ratification or accession.

The basic negotiating text for the Diplomatic Conference was developed between 2008 and 2014 by a Lisbon System working group with the goal of attracting a wider membership to the System, while preserving its principles and objectives ...".
You can check out the original proposals for amendment on the WIPO website here. The final version, Document LI/DC/16 of 20 May 2015, of the Draft Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications and Draft Regulations Under the Geneva Act of the Lisbon Agreement on Appellations of Origin and Geographical Indications can be found here.

This blog will return to Lisbon, as it were, once there has been a good opportunity to read the final text and think about it.  Meanwhile this Kat can report that European trade mark organisation MARQUES is thrilled with the outcome, with its GI Team having taken an active part in the consultation process and having been very much in evidence in Lisbon over the past week or so [MARQUES's excitement can be sensed from the increasingly frenetic series of blogposts on its Class 46 weblog here, here, herehere and here].  The organisation's immediate response can be gathered from the text of the following letter to the Conference President, from MARQUES GI Team vice-chair Keri Johnston:
"Mr. President, 
On behalf of the Observer MARQUES, I have the pleasure of congratulating the Member and Observer Delegations, in particular, those who have attended and participated; WIPO; the Secretariat; and the Presidents of Main Committees I and II for their work and diplomacy over the past six years.   
MARQUES attended the first of the 10 Working Group Meetings in 2009.  During the intervening six years MARQUES has been fortunate to observe and participate up to and including this Diplomatic Conference in the form of both written and oral interventions.
Indeed, we were privileged, as an Observer Organization to see some of MARQUES and other Observer interventions over the past six years included in the basic and final text, and to hear and see diplomacy at work.  Congratulations, and thank you Mr. President."
Not everyone is so thrilled with the outcome, though, as Catherine Saez reports here on Intellectual Property Watch, opening:
"... a small number of World Intellectual Property Organization members adopted a new Geneva Act of a treaty protecting appellations of origin and geographical indications. The Act is the revision of a previous treaty which only covered appellations of origin. This adoption was made to the dismay of other WIPO members, which despite efforts to accommodate their views could not reconcile being denied the right to vote in a United Nations body. They said the agreement among a few members could affect all". 
Other trade mark organisations have been slower than MARQUES to react: the INTA Blog promises that an in-depth report of the Diplomatic Conference will be published in an upcoming issue of the INTA Bulletin (INTA is also holding a conference, Interplay between Trademarks, Geographic Names and Indications conference in Rome, Italy on 10 to 11 December 2015). The position of ECTA -- the European Communities Trade Mark Association -- is articulated in a blogpost of 15 May, here. There's nothing yet on the website of the US-based Intellectual Property Owners Association (IPO).

Wednesday, 20 May 2015

Horological Horror Show for Swatch, while Panavision has a Ball

In its decision yesterday, the General Court of the European Union warmed up with a case on reputation in what is expected to be a hot week for trade mark decisions. The Court was requested to interpret and to apply Article 8(5) of Regulation 40/1994 (as superseded by Regulation 207/2009).

The indisputably well known Swiss watch manufacturer Swatch SA failed before OHIM to protect its rights in the word SWATCH and for figurative Community trade marks (CTMs) and international registration for the sign SWATCH, all registered for, inter alia, goods in class 14 “precious metals and their alloys and goods in precious metals or coated therewith (excluding cutlery, forks and spoons); jewellery, precious stones, horological and chronometric instruments”.
Swatch’s opposition was directed against Panavision Europe Ltd‘s application to register the word mark SWATCHBALL for various goods and services in classes 9, 35, 41 and 42, in relation to electronic publications and computer software in the field of creation and selection of lighting, optical, lighting and photographic equipment and other visual effects in the cinematographic, television, video, and other visual and performing arts and lighting. Panavision expressly excluded protection in respect of goods and services relating to timekeeping.
Both the Opposition Division and the Board of Appeal rejected Swatch’s claims that the word SWATCHBALL created a likelihood of confusion with its well-known SWATCH marks and that at the same time it was taking unfair advantage of them and was detrimental to their reputation and the distinctive character. In particular, the Board of Appeal held that the relevant consumers would make no link between the conflicting marks, despite the reputation of the SWATCH marks in France, Germany and Spain, in that the goods and services respectively identified by them were too different. Moreover, Swatch failed to prove one of the requirements for protection under Article 8(5), as it could not demonstrate that the use of the SWATCHBALL mark could ‘cause a dilution of the earlier marks through the dispersion of their identity and their hold upon the public mind or take unfair advantage of the reputation or distinctive character of the earlier marks’.
On appeal to the General Court, Swatch pleaded the misapplication of Article 8(5), thus permitting the Court to review the construction of the rules on granting protection to trade marks with a reputation. In such instances, three cumulative conditions must be met: first, the respective marks must be similar or identical; secondly, the earlier mark must have a reputation; thirdly, there must be a risk that the use, without due cause, of the later mark could take unfair advantage of or be detrimental to the distinctive character or the repute of the earlier mark.
In the present case the General Court recognised that the first and the second conditions of Article 8(5) were fulfilled: the opposing marks were similar to an average degree, in that SWATCHBALL included the whole of the word mark SWATCH.  However, in respect of the risks stipulated in the third condition, those risks are based on the similarity of the marks and become real when the relevant public creates a link between the marks so that the later mark recalls the earlier one, without it being necessary for them to be confused. In any event, similarity between the marks is only one of the relevant factors to be considered in the overall assessment of the link’s existence. Due attention must be paid to how much the goods and services are similar or dissimilar, to the relevant public’s perception and the existence of the likelihood of confusion, to the strength of earlier mark’s reputation, to the degree of its inherent or acquired through use distinctiveness. Even when such a link exists, it may not be sufficient to conclude that one of the risks inferred by the later mark might materialise: it is for the proprietor of the earlier mark to prove them.
Limited degree of closeness
This being so, Swatch had not satisfied the burden of proving that the Board of Appeal had misapplied Article 8(5), said the General Court. No link between SWATCH and SWATCHBALL could be retained in the mind of their relevant publics. While SWATCHBALL’s public was specialised in the field of lighting, optical, lighting and photographic equipment and other visual effects, while it would know of the SWATCH marks, the latter addressed the general public. The goods and services protected by the respective marks were too different in their nature to lead to the creation of the required link between the marks. They had different distribution channels and purposes, they belonged to separate market sectors so that they were neither interchangeable nor in competition, all of which ruled out the closeness between the goods and services concerned.
In conclusion, the General Court stopped Swatch’s time for revenge without assessing the existence of the risks contained in Article 8(5), insofar as it had already excluded the necessary connection between its well known marks and the contested SWATCHBALL mark.

A test-drive for the Unified Patent Court: Part IV

Readers of this weblog who litigate patents in the old Europe may recall a series of past posts on the subject of litigating patents under the experimental, not quite hatched and [in this Kat's opinion] arguably not even half-baked Unified Patent Court (UPC) system that has been created for the new Europe, with its fascinating new collection of Rules.  This series has been masterminded by the Bristows brace of authors Alan Johnson and Alexandria Palamountain and the three earlier reports are "A test-drive for the Unified Patent Court" (June 2014, here), "A test-drive for the Unified Patent Court: Part II" (October 2014, here) and, perhaps unsurprisingly, "" (25 February 2015, here).  Now it's time for the fourth:
The interim conference

Slightly less than 12 months since the commencement of proceedings, the Bristows’ real time UPC moot is reaching its climax. The interim conference had been scheduled for 14 April, but was postponed by two weeks due to unavoidable diary conflicts (something that would not happen in real life) but took place on 23 April. 

The interim conference opened in a manner which took everyone by surprise –- and indeed completely bamboozled about half the participants who had little idea what was going on. Although the language of the proceedings was English, Judge Rapporteur Rieu opened the proceedings speaking in French. She noted that each party included in its legal team a fluent French speaker, and drew attention to Rule 105.3 of the [17th draft version of the] Rules of Procedure which states that the Judge Rapporteur may hold the interim conference in any language agreed by the parties’ representatives. 
Fortunately for the non-French speakers, the French-speaking representatives (Anne-Laure Bouzanquet and Laura von Hertzen), declined to agree to use French. In parenthesis, it may be noted that it is a good thing R.105.3 was amended to require the parties to agree, since the previous version of the rule appeared to leave the matter solely in the hands to the judge. After that entertaining start, the real business began. 
Dim view 
Making light of a dim view
In advance of the hearing, neither party had approached the other about trying to agree any orders being sought. Instead, each party had sent the Registry a note which set out the orders they would request. The Judge-Rapporteur took a rather dim view of this lack of cooperation in advance, despite the parties pointing out (diplomatically) that nowhere in the Rules is there any suggestion at all that this would be regarded by the Court as appropriate, let alone required.

Much of the discussion concerned whether any additional evidence could be filed, and whether disclosure should be ordered. Readers may recall that this is a second medical use case where the defendants were alleged to be actively promoting off-label use. Given this, the Judge Rapporteur acceded to the requests for some additional evidence and party disclosure, but not to the third party disclosure requested from one customer of the defendants. During the discussion about third party disclosure, it emerged that the Registry had not served the request for third party disclosure on the third party. The Registry, in its defence, does not appear to be under any obligation under the Rules to do so, whereas the whole scheme of the Rules is that it is the Registry, not the parties who must serve documents. In any event, the Judge Rapporteur considered such disclosure unnecessary on the facts. 
On one issue, however, the Judge-Rapporteur was undecided. Readers may recall that the procedural course of this action was a little unusual, with a second patent being added into the suit over half way through the proceedings. The Court was anxious to keep the timetable on track and had given the defendants relatively little time to deal with the second patent (an expired compound patent) in it defence. The defendants were unable initially to find any relevant prior art and had simply pleaded non-infringement as a defence. However, shortly before the interim conference they announced that they wished also to rely on invalidity, meaning they needed (under R.25) also to counterclaim for revocation. 
Judge Rieu pointed out that she found it odd that the Court would be asked to revoke an expired patent –- although this is something the EPO seems to have no trouble doing when its opposition procedures meander beyond the 20 year term. Judge Rieu therefore used R.102.1 to refer the question to the full panel for decision. In so doing, she asked the parties for further short written submissions on the point, but did not arrange a further hearing to hear the parties’ oral submissions. It was not explained to the parties exactly how the panel decided the matter, but later Judge Rieu issued a written judgment announcing that the Court declined the request to add the counterclaim for revocation, without prejudice to the defendant’s ability to rely on invalidity as a defence to damages under R.138 if there was a finding of infringement.

Do you want a review? 
At the end of the hearing, Judge Rieu also asked the parties whether they wanted any other part of her decision reviewed under R.102.2. The fact that she did so at the hearing, and the manner in which she initiated a review on one issue herself, highlights some uncertainties over this review process, which is separate from the appeal process which can also be invoked by a party which does not like the decision (seemingly even if it has not first requested a review). Indeed, there is no guidance at all in the Rules about how the review process should work: when a review has to be requested (at the hearing or within a period after the decision?) and how the review itself is conducted, in particular whether the parties have a right to be heard, or whether it will be purely decided (as in this case) on written submissions, exchanged blind, or even, perhaps without any more submissions, but with the Judge Rapporteur merely consulting with her colleagues.

Finally, Judge Rieu took a typically French approach by imposing a sanction for non-compliance of a daily fine.* 

The parties now have some steps to take in advance of the oral hearing, and this is scheduled to take place on 28 July, and is listed for one day.
* This raises some quick questions from Merpel: does any reader know what happens to the money collected from a party as a fine for non-compliance?  Does the court keep it, does it go to the other party, or can the judge keep it? Is it taxable income? And is it gross or net of currency exchange and bank charges?

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