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February 2015
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WELCOME TO THE FEBRUARY ISSUE OF

INTELLECTUAL PROPERTY MAGAZINE
Well that started with a bang. A flurry of judgments at the end
of January have kept us busy here at IPM, some of which we
tried to shoehorn in this issue.
With that in mind, it might seem strange that we devote significant
page count to one of the oldest, most talked about, issues in IP the
Unified Patent Court (UPC).
An interview with the most patient man in patents, Kevin Mooney
(p6), kicks off our coverage. His task, to deliver the UPCs rules, is
surely one of the greatest efforts in compromise and cooperation in
European history.
While Mooneys journey is almost at an end, that of the 40-yearold UPCs is just beginning. You would be hard-pressed to find
someone more knowledgeable about the court project than Winston
& Strawns Richard Price. His account of where weve come from and
where we are today (p8), reminds us that one of the positives to
come from decades of negotiation is a greater understanding and
appreciation between European IP systems.
The patent community has never been closer, which is not to
taken for granted in light of the chaos facing European copyright.
I dont think anyone is really expecting President Junckers Digital
Single Market to rid the continent of copyright altogether. But
something for its much-harried lawyers to reflect on: would a panEuropean project of this nature be such a bad thing, if it brought EU
members copyright systems closer together?
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Tom Phillips, Acting editor
INTELLECTUAL PROPERTY MAGAZINES ADVISORY PANEL

Intellectual Property Magazines advisory panel is made up of private practice and
in-house lawyers around the world. Each panel member specialises in one or more areas
of intellectual property, and has an important role in advising the editor on the content
and direction of IPM. Membership is reviewed annually.
Susan Hinchey, corporate trademark manager,
Allergan, US
Kenneth Adamo, partner, Kirkland & Ellis, US
Timothy Wilson, senior IP counsel, SAS Institute,
US
Kevin Mutch, group legal director, Faberg, UK
Daniel Glazer, partner, Fried, Frank, Harris, Shriver
& Jacobson, US
Cydney Tune, counsel, Pillsbury Winthrop Shaw
Pittman, US
Greg Novak, managing partner, Novak Druce &
Quigg, US
Steven Garland, partner, Smart & Biggar/
Fetherstonhaugh, Canada
Daniel Bereskin, founding partner, Bereskin & Parr,
Canada
Connie Carnabuci, partner, Freshfields Bruckhaus
Deringer, Hong Kong
Wes Jones, partner, Baldwins, New Zealand
John Hackett, AJ Park, New Zealand
www.intellectualpropertymagazine.com
February 2015
Simon Clark, partner, Berwin Leighton Paisner, UK

Evie Kyriakides, regional trademark counsel,
Europe, Russia and CIS, Mars, UK
Christopher Thornham, partner, Taylor
Wessing, UK
Frederick Mostert, group chief counsel,
Richemont Group, international
Justin Watts, partner, Freshfields Bruckhaus
Deringer, UK
David Taylor, partner, Hogan Lovells, UK
Patrick Melson, head of trademarks, Reckitt
Benckiser, UK
Francis Hagel, intellectual property advisor
Paul Tauchner, partner, Vossius & Partners,
Germany
Claus Eckhartt, partner, Bardehle Pagenberg,
Germany
Julia Holden, Trevisan & Cuonzo Avvocati, Italy
Dominic McGonigal, chairman, C8 Associates,
UK
Intellectual Property Magazine 3
Contents
Regulars
74
3 Editors letter
IPM Interview
6

Radical change is on the horizon for the EUs patent regime
in the shape of a new Unified Patent Court. But with such a

colossal task, Kevin Mooney explains the importance
of making, not breaking, rules

76

Directory of international IP firms

81

Latest appointments and company news
82

Classified
Movers and shakers
Clocking off
IP curiosities from around the world
Opinion
Dawn of the data

A difficult, but necessary journey
8
Having kept a keen eye on the UPCs progress over the decades,
Richard Price looks at the remaining issues
27
The unitary patent and the Unified Patent

11
Court an update
After four decades of development, legal challenges and falsestarts, it seems that a unified EU patent system is imminent

Commil v Cisco
13
The US is in the midst of rethinking defences to inducement of
patent infringement. Charles T Steenburg examines the case
15
oor opened for medical use

D
claims in Canada
Focus
on gTLDs
A Canadian Federal Court has rejected hitherto guidelines on

unpatentable methods of treatment, such as fixed drug dosage
schedule
Shape of childs chair not registrable

16
as a trademark
Avoid the Tripp Trapp! Farah Mukaddam discusses the CJEU ruling
on the validity of shape marks in Hauck v Stokke and Ors
Solving the Rubiks Cube challenge

18
COVER STORY
The EU General Court held that the 3D puzzles shape mark

is a valid trademark

Taste tactics
21
The US Patent and Trademark Office has yet to approve a taste
trademark for registration. Anjie Vichayanonda explains how to

acquire and enforce such rights
Judicial review of UK private

24
copying exception
The Musicians Union et al have applied for a judicial review of

the UKs private copying exception. Ben Gisbey and Dorothea
Thompson examine what it could mean for consumers

Brand strategies in the new gTLD era
28
Alexandre Nappey explores the strategies being used by trademark
owners to prepare for the TLDs reforms
eveloping a defensive domain

30 Dname
strategy
With cybersquatters still an ongoing problem, Gary McIlraith explains

how to establish a domain name strategy that works
yberswatting: eradicating domain

32 Cname
pests
Domain name governing body ICANN has been running its method
of dealing with cybersquatters since 1999, but how has it coped with
gTLDs?

Undressing the design copy issue
26
Tribal wars: a review of John Kaldor Fabricmaker v Lee Ann
Fashions
4 Intellectual Property Magazine
February 2015
Features

TTABs likelihood of confusion rulings
45

B&B Hardware may significantly influence brand owners trademark
policing and enforcement decisions

Tackling Tacking
47
Is trademark tacking a question of law or fact?
New approaches to piracy protection
49
Rightholders can tackle online pirates more effectively by targeting
the first few pages of search engine results, says Bill Freund
Trademark crash: Volvo v OHIM

50
A look at Volvos trademark opposition against Lovol
reform: back on the table but late

52 Ptoatent
the party?

Is the Innovation Act back on?

Whats wrong with UK innovation?
54
The UK needs to get better at turning great ideas into products for
the global market
Tackling
tacking
Legal Decisions
47
PC recap: have you been paying

55 Uattention?
Focus
on Asia
35
lntra-Presse SAS v Office for

60 Harmonization
in the lntemal Market
and Golden Balls Ltd
GOLDEN BALLS makes its way back to OHIM
Amneal Pharmaceuticals, Llc, v Supernus

62 Pharmaceuticals,
Inc
In the first trio of Hatch-Waxman IPR decisions, PTAB upholds the
patentability of all challenged claims

Flo & Eddie Inc v Sirius XM Radio Inc, et al
64
The recent Flo & Eddie cases against Sirius may be the wake-up call
needed to spur Congress into taking serious legislative action

DDR Holdings v Hotels.com
66
After a software claim was finally found eligible subject matter
(2) Dalhaus Ltd
A trademark dispute could have been avoided with written

permission
International Stem Cell Corporation v

70 Comptroller
General of Patents, Designs
in the Peoples Republic, explains Bob Stembridge
in China
41 ITPhe &UK SMEs

Intellectual Property Offices China IP attach, Tom Duke, provides tips
on how UK SMEs can seek advice when doing business in the country
atent battle
42 PPatent

owners must approach infringers with caution if they are to ultimately
Strategy
ow China claimed the global patent throne

38 HRecent
research has underlined the extraordinary growth of patenting
A review of competition law regarding injunctions for FRANDencumbered patents
Dalsouple Societe Saumuroise Du

68 Caoutchouc
v (1) Dalsouple Direct Ltd
Eugene Low reviews judicial regulations on issues arising from the infringement
of privacy on the internet
succeed in pharmaceutical litigation in Thailand
Huawei Technologies Co Ltd v ZTE Corp;

58 ZTE
Deutschland GmbH
under Alice, was it the good news coders have been waiting for?
pdates from China latest regulations on the

36 Uprotection
of privacy
An essential review of the journey so far
February 2015
and Trade Marks
Has the CJEU erred in its much anticipated ruling?
outsourcing made Microsoft

72 Ha ow
patent powerhouse

After putting the company among the top-10 patent filers in
the US, ex-Microsoft attorney Jeffrey L Ranck explains how to

implement a successful outsourcing strategy
Dawn of the data

74

Its here to stay and it could give you the edge data is an IP
portfolios best friend says Freddie McMahon
IPM Interview
IPM Interview
Kevin Mooney
The rule maker

Radical change is on the horizon for the EUs patent regime in the shape of a new
Unified Patent Court. But with such a colossal task, Kevin Mooney explains the
importance of making, not breaking, rules
he Unified Patent Court (UPC) is

the largest amendment to patent
law across the EU in over 40 years,
bringing the biggest change in the
litigation landscape the continent
has seen. Comprising a Court of First Instance,
a Court of Appeal and a Registry, the UPC
Agreement was historically signed by 25 EU
member states on 19 February 2013.
To enter into force, the treaty needs to be
ratified by at least 13 states, including France,
Germany and the UK. So far, only six have
ratified the Agreement.1
With the additional momentous task of
organising a unitary patent that will protect an
invention EU-wide for the first time, things are
bound to get messy. However, bringing order
to the chaos is Simmons & Simmons partner,
Kevin Mooney, chairman of the committee
tasked with the unenviable duty of drafting
the Rules of Procedure for the UPC. These
rules will ultimately dictate how the UPC will
operate and they reached a 17th draft at the
end of 2014, resulting in an oral hearing in
November.
Taking time out of his very hectic schedule,
Mooney talks to IPM about balancing his day
job and receiving ambush phone calls from a
certain retired Lord Justice.
How did you become chairman of the
committee for drafting the Rules of
Procedure of the UPC?
I am afraid we need to go into some history.
There was a long period where the UPC project

and its predecessor the so-called European
Patent Litigation Agreement were making
little progress. It was only in 2007 that the EU
Commission decided to start again, appointing
principal director of patent law and multilateral
affairs, Margot Frhlinger, to take over.
Although new to patents, Dr Frhlinger
had the common sense to abandon the
previous practice of the Commission to dictate
what the relevant instruments creating the
court would look like. Dr Frhlinger adopted
a totally different bottom up approach and
consulted users and others, so as to be guided
by what was actually wanted. Part of this
process involved setting up an expert group
of judges and lawyers whom she consulted. I
was one of the two UK representatives on this
group. The other was Sir Robin Jacob former
judge at the UK Court of Appeal.
The group met to discuss the agreement to
create the court for a number of years, but very
little work was done on the Rules of Procedure
for the court. In February 2012, it was expected
that the Agreement itself would be signed in
the summer. On 3 February, the expert group
was due to have a meeting with Dr Frhlinger
but prior to this, the Danish presidency had
said there were no resources available to draft
the rules and the Commission at the same
time also said the same. Also, industry was
threatening to lobby governments against
signing the Agreement unless the rules were
published in advance. On the evening prior to
February 2015
the 3 February meeting I received a telephone

call from Sir Robin Jacob, who was having
dinner with the other judges of the expert
group. He said that they had decided to ask
me to chair a small group to draft the Rules of
Procedure. After considerable hesitation I said
OK on two conditions: first that it had to be a
very small group as you cant draft things in a
large group, and I didnt really want any more
than five. Second, the members nominated
to the Committee had to command respect
within the European Patent Community. The
following day, this was proposed and agreed,
though the group was expanded to seven
four lawyers and three judges. The industry
representatives at the meeting also wanted to
be on the committee, but I said no as it would
become just too large.
The Commission, helpfully before the 3
February meeting, had in effect undertaken
to produce an advanced set of rules before
signature of the Agreement. So we had from
February to June to do the job. As the group
consisted of active judges and lawyers, we
agreed to work at weekends. We had three
all-weekend meetings and produced the first
draft for consultation by the end of March,
which was pretty good going. Now three years
later the work is continuing.
At the start, were you overwhelmed
by the challenging task before you?
I wouldnt say overwhelmed. I knew it was
going to be a very heavy task but I also realised
IPM Interview
that there was no one else to do it. I had been
involved in 2006 in a similar exercise with
patent judges at a meeting in Venice, when
we prepared a set of basic principles that we
thought the court should adopt if it were ever
to come into existence. So there was already a
skeleton set of principles and to some extent I
was already committed.
At the end of 2014, the 17th Draft Rules
of Procedure was published. How difficult
is it to manage these draft rules and
complete them in a timely fashion?
We imposed our own deadlines. In the early
stages, it was difficult because what we were
doing was preparing for the first time a set of
rules that would be pan-European, that would
reflect not only common law but civil law
practices in Europe. I used to start meetings by
saying look were not here to draft a better set
of English or German rules. Were here to draft
a set of rules that will work across Europe. Of
course everyone nodded, but this would last
for 10 minutes until somebody said thats not
how we do it in [X], and thats not the way
we do it in [Y]. So there were some interesting
sessions in the early days but I have to say, it
got a lot easier as people began to realise that
compromises had to be made.
What are you working on currently?
My committee has now handed over final
responsibility for the rules to the so-called
Preparatory Committee. We handed over the
16th draft in early 2014. Final responsibility now
lives with a group called the Legal Framework
Group of the Preparatory Committee, which
is chaired by former German judge, Johannes
Karcher. However, he has asked me and my
committee to remain involved, so after we
handed over the 16th draft we had meetings
with his group, which resulted in the 17th draft
that was the subject of a public consultation in
Trier. We will be meeting again to finalise the
draft rules in 2015.
When you draft a document this big, with
all the cross-referencing that takes place, there
will always be little glitches and one of my
tasks has been to maintain a document called
the tracker. This records all the Is that havent
been dotted and Ts that havent been crossed.
When we finally sit down in 2015 we will go
through this tracker and sort out the minor
technical problems.
There are still some big issues that need
to be sorted out, which are primarily on
languages and the opt-out provisions.
How are you balancing the chairmanship
with your day job at Simmons & Simmons?
Im still a partner at Simmons & Simmons but
Im not full time. A large part of my working
week is UPC related but Im also advising

the European Patent Office (EPO) academy
on training the judges for the court and still
consulting with Simmons & Simmons and its
clients.
Do you think it is possible for the first EU
patent with unitary effect to be granted
by 2016?
I dont think by 2016 is possible but I do think
during 2016 is a possibility. Late 2016 is most
likely.
When you draft

a document this
big, with all the
cross-referencing
that takes place,
there will always be
little glitches and
one of my tasks has
been to maintain a
document called the
tracker. This records
all the Is that havent
been dotted and Ts
that havent been
crossed.
There have been concerns over

bifurcation. How common do you think
this will be in the end?
There was a lot of concern over bifurcation
in the early days but as work on the rules has
progressed, I think this concern has lessened.
I dont think the divisions of this court will
bifurcate cases that often. There will of course
be times when it makes sense to, but I think
these cases will be rare.
Do you think there will be a rise in
competition between divisions to attract
business?
Yes, particularly between the major jurisdictions
the UK, Germany, France and Holland, all of
February 2015
whom will have local divisions and all will work

in English. I hope though that this competition
will be based on efficiency and quality and not
on procedural games.
How important is it for the Court of
Appeal to establish ground rules on
bifurcation guidance?
The rules give the divisions of the court a lot of
discretion as to how they will operate but its
important that this discretion will be exercised
consistently across all divisions, otherwise you
may get competition based on procedural
games. So its important particularly, in the
early years, that the Court of Appeal has the
ability to look at how these discretions are
being exercised, including how bifurcation
is operating, and to lay down guidelines if
necessary. This has been controversial as some
think that the Court of Appeal shouldnt
get involved in procedural appeals because
it wastes time. On the other hand, while
procedural appeals may become rare after a
few years, it will be important in the early years
for the Court of Appeal to ensure consistency.
How
will
EU-wide,
multi-lingual
litigation change the client and intra-firm
relationship?
I fully expect most divisions to eventually work
in English, so I dont expect there to be too
many multi-lingual problems. There will of
course be competition between the various
divisions and also fierce competition between
law firms for European litigation. It will be
interesting to see how this works out.
How are you instructing your clients to
get UPC ready?
I am urging my clients to start working on the
issues that need working on now! They should
come to a clear view as to whether they want
to apply for unitary patents or to continue to
apply for European patents. This is a difficult
issue but they need to have a policy in place
because the EPO is preparing to grant unitary
patents during 2016. Secondly, they must also
be considering, with regard to their existing
patents, whether to opt them out of the UPC
jurisdiction or not. Thirdly, if they are going to
apply for unitary patents, they must consider
the ownership issues that arise.
Lastly, they will have to give thought to all
the jurisdictional opportunities that will arise
when the court comes into existence. If they
decide to opt-out patents, there will be various
strategic opportunities that will be lost.
Footnote
1.
In December 2014, Malta became the sixth
country to ratify the Agreement, following
Austria, Belgium, Denmark, France and Sweden.
Opinion
PATENT FILE
A difficult, but
necessary journey
Having kept a keen eye on the UPCs progress over the decades,
Richard Price looks at the remaining issues as it shifts into what
could be its penultimate year before launch
A harmonized European patent litigation
system has had a long gestation. According
to Sir Robin Jacob,1 it was being talked
about in Germany in the 1930s during
the Nazi regime. The negotiations for the
European Patent Convention started in
the 1960s and reached a conclusion with
the coming into force of the European
Patent Convention in 1973. A European
Community Patent was envisaged and
a European patents court to deal with
disputes was also within contemplation.
As it was, for nearly 40 years, all we have had
is a limited type of patent dispute resolution in
the form of oppositions in the EPO to patent
applications that have been granted: so not a
lot of progress.
In the meantime, patentees and revoking
parties have had to litigate nationally, country
by country, to obtain relief, whether as an
injunction and damages, or in having the
patent in question nullified. This may have
suited some parties but, for others, it has
been too costly in time as well as in money.
The disparate practices and procedures of
the various national courts also did and still
do on occasions result in different results
for the same patent. This has led to forum
shopping, with a natural implication that that
particular tribunal was likely to be favourable
to the claimant. That clearly did not give rise
to justice being done.
The UPC is born

As part of the rolling programme to harmonize
commercial activities in the European Union at
the instance of the Commission, and partly
due to the pressure from certain sections of
industry, discussions resumed about having a
Europe-wide patent litigation system, and with
it a Community, or European Unitary, patent.
It was pressed
forward by the
bureaucrats as a
system that should
be, and would be,
favourable to small
and medium-sized
businessesthat
political imperative
has been rather lost
in transition, with
hardly lip-service
paid to it now.
Richard Price
It was pressed forward by the bureaucrats

as a system that should be, and would
be, favourable to small and medium-sized
businesses, as was the fashion at that time.
That political imperative has been rather lost
in transition, with hardly lip-service paid to it
now. The Commission, and the Committees
and Working Parties charged with seeing the
project through, have had their ears bent by
diligent and loud big industry groups, both in
Europe and in the USA. Lawyers both private
practice and of the judicial type have also got
stuck into the project. The politicians, who have
given the project a real shove (without which
it probably would never have happened),
favour a system that is quick and raw, but this
inevitably would have led to rough justice.
Whereas, the lawyers have fought a rearguard action to give the new litigation system
some sophistication and flexibility sensitive to
the scale of the issues in question, and the
commercial chips at stake. This, in my view, is
entirely appropriate, given the massive effect
of a pan-European injunction and the size of
damages likely to be awarded.
Nevertheless, while the system borrows
from the century or so of experience from
around 30 jurisdictions, big and small, it will be
revolutionary. Most European courts have been
used to a relatively stately progress of cases to
a trial, with appeals often taking a lot longer,
whether as a result of leisurely timetabling
Richard Price is a partner in the London office of Winston & Strawn and head of its IP group. Price litigates all aspects of IP law and has
a high success rate in securing victories for his clients before the highest courts, including the House of Lords (now the Supreme Court)
and Privy Council. His practice focuses on representing clients on patents, trade dress, trademark, passing off, and copyright matters. His
industry experience crosscuts several sectors, although he has particular experience in deriving IP solutions for clients working in medical
devices, genetically modified crops, consumer products, electronic equipment, carbon emissions, water purification, and computer
technology, in the UK and across Europe.
February 2015
Opinion
Aleksei Lazukov / Shutterstock.com
UPC judges will begin their training in Hungary in February this year
or of a rolling docket. Some judges have a

specialist professional lifetime in patents:
other judges in other countries are generalists.
That contributes to the risk of conflicting, and
unpredictable, results. With the new system,
all that will change and quickly.
European rocket docket?

European courts had heard of the rocket
docket system in forums like the Eastern
District of Texas and the International Trade
Commission in Washington. Few European
judges thought they would live to see it in
their life times in their backyards. Instead they,
and the litigation lawyers who practise before
them, have extolled the virtues of their own
national systems bifurcated or not; live trial
witnesses subject to cross-examination or not;
expert evidence or not. Over the last six or
more years this has changed.
The time it has taken could be criticised by
some, but wiser heads will see in hindsight it
as having been rather fortunate. It has allowed
a meeting of minds to take place to a much
greater extent than would have been dreamed
of even 10 years ago. How has this happened?
The consultations and meetings facilitated by
the Commission and the EPO have helped.
In particular the patent judges conferences
have allowed the judges to meet and come to
know and respect their colleagues and there
has been a greatly increased attention paid to
each others views and judgments.
Private practice lawyers in different
The claimants court
By the previous
standards of most
European courts, the
timetabling will be
brutal. It would also
be favourable to the
claimants, be that
party a patentee or
would-be revoker.
countries have also come to know each other
better, from tramping around the courts of the
regular patent litigation circuit and through
the setting up and work of the European
Patent Lawyers Association. All this activity and
experience has contributed to a substantial
degree of convergence.
So what is the nature of this revolution? At
the heart of it is the pan-European injunction
and pan-European revocation. The system had
to be quick and cost-effective even cheap.
Well, the pan-European nature will still there,
as is speed, but the cost to the parties? Only
time will tell.
February 2015
By the previous standards of most European

courts, the timetabling will be brutal. It would
also be favourable to the claimants, be that
party a patentee or would-be revoker. The first
to strike will have a double advantage.
Why? Because claimants can have as
much time as they like to prepare their
case, subject of course to the commercial
requirements of speed. That case will have had
to set out a full pleading of facts and matters
relied on, with the patent claims said to be
infringed listed, and the reasons given for that
assertion, together with relevant case law and,
most importantly, evidence by way of witness
statements where available, and an indication
of further evidence that will be filed in support.
The claimant has to set out all the facts relied
on as will amount to infringement of the
patent claims, including arguments of law
and where appropriate an explanation of the
proposed claim interpretation. In addition the
claimant must describe any prior proceedings
relating to the patents in question, give an
indication of which division should hear the
action, give an indication as to whether a
single judge would do (normally a panel of
three) and state whether an interim injunction
is asked for. So quite a lot of information to
prepare, but also to consider.
Then the pressure is on the defendants. They
have to answer all of this, in a like manner, and
make any counterclaim, deal with any interim
injunction application, challenge jurisdiction
Opinion
and/or apply for security of costs. There may

of course also be settlement discussions. The
defendants will have to assemble its legal
team, carry out prior art investigations and
find and interview potential expert witnesses.
All in three months. Non-extendable. It will be
a challenge for defendants, and their lawyers.
Writing the rule book

The drafting of the rules is now very well
advanced with only a few important topics
still up in the air. We all have to bear in mind
that fundamental changes to the system are
impossible, because the rules are hemmed
in by the Unitary Patent Statute and the
Agreement. Both are immutable.
The exchange of pleadings and evidence
with replies and rejoinders will have to
be completed in five months from the start
of the proceedings. There will then be the
interim conference (CMC), chaired by a
Judge Rapporteur (managing judge in English
parlance). That single judge will settle the
timetable through to trial. It will cover the
production of documents, the finalisation of
party expert reports, experiments and re-runs.
The oral hearing will be within 12 months from
the start and limited to 1-2 days. However
there is the opportunity to have a separate,
earlier, hearing for the cross-examination of
witnesses for which there is currently no time
limit. A decision on the merits is due in writing
within six weeks of the oral hearing.
Significant progress has been in the last
18 months. The nature of the outstanding
issues varies. There are some that are fixable
during the finalising of the rules. This is likely
to happen in the Spring. Others need political
input.
The former include:
The opt-out applicants for opt-outs
will be able to file them before the system
comes into force. Each one would then
remain on hold until the coming into force
of the Agreement. Unresolved is how the
fees payable on the opt-out will be paid.
This is important since no registration of an
opt-out can be made until the fees are paid
and there is currently no entity to receive
those fees. It has been suggested that
registering opt-outs should be delegated
to the EPO and not done by the Court.
However, the Agreement requires that optouts should be lodged in the Registry,
meaning the Registry of the Court.
Language of the proceedings before
any local or regional division the language
shall be an official European Union language
which is also the official language, or one of
the official languages, of the Contracting
Member State hosting the relevant division;
or the official language designated by

Contracting Member State sharing a
regional division (the Baltic regional division
has already said their language will be
English). The language of the Central
Division will be the language in which the
patent was granted. The debate continues
as to whether there should be one language
throughout, including for the judgment.
There are pros and cons. Even the national
judges are divided on this.
Only France has

ratified but UK is
going through the
Parliamentary motions
of doing so. It is
unclear what Germany
is doing about it. It
could just pull the
plug on the whole
enterprise.
Injunctions there is a continuing debate

concerning the extent of the discretion of
the Court. Industry groups want the judges
to operate within certain clear guidelines,
so that there is a good chance of harmony
between the various first instance courts
from the beginning. The judges predictably
do not want any felter on discretion, with
the Court of Appeal ultimately providing
co-ordinating guidance. Judge Colin Birss,
for one, declared at the Trier consultation
meeting on 26 November 2014 that
invariably there will be a permanent
injunction. The only debate concerns the
circumstances in which stays will be granted.
It should depend on the facts of the case. He
said all the judges are aware of the concerns
about trolls.
Procedural appeals there has been a
general objection to the suggestion that the
Court of Appeal may consult with the first
instance panel. If any consultation is done, it
should be public.
Appeals (other than procedural ones)
commentators have expressed the views
February 2015
that the court of first instance should decide

all issues so that no undecided points go
forward as part of an appeal; there should
be no ping-pong of appeals and references
back.
Actions against the EPO they are
required under the present wording of the
rules to be dealt with as soon as possible.
There has been uncertainty about what the
EPOs interlocutory review may mean.
It appears that the rules envisage that the
EPO can, within one month of the launch
of the action, rectify the contested decision
in accordance with the order or remedies
sought by the claimant.
Recruitment, administration
As to the political issues, these include the
financing of the courts (they are supposed
to be self-financing but of course no fees will
be generated in time to take on leases or fit
out the courts themselves), the fees that will
be charged by the UPC at the various stages
of actions, and the location of the courts
themselves. The UK has been charged with
the responsibility for the IT. The relevant civil
servants are working hard at this and to a tight
timetable (to be ready by December 2015),
but all those of us who have had experience
of the bringing in of a new IT system will be
watching this with some nervousness.
Apparently, the recruitment of judges to
the Court of Justice of the European Union
is not popular at least among eligible UK
practitioners. To the contrary, the UPC has
proved to be very popular. Some 1,300
applications have been received and training
will start, particularly of those with little or no
patent litigation experience, in February 2015.
There are the small matters of pay, holidays
and pensions to be decided. Unresolved also
is whether UPC judges can sit part-time,
with the rest of their time spent as national
judges. Spain is still challenging the whole
constitutionality of the UPC.
As to the coming in to being of the UPC,
2016 is still being talked about; sceptics think
2017 at best.
The Agreement has to be ratified by 13
Member States, including Germany, France
and the UK. Of those only France has ratified
but UK is going through the Parliamentary
motions of doing so. It is unclear what
Germany is doing about it. It could just pull
the plug on the whole enterprise.
However the momentum is there and
most think it is going to happen.
Footnote
1.
Winston & Strawn Seminar on the UPC, 1
October 2014
Opinion
PATENT FILE
The unitary patent
and the Unified Patent
Court an update
Alexander
Korenberg
Julia Venner
After four decades of development, legal challenges and false-starts, it seems that a unified
EU patent system is imminent. Alexander Korenberg and Julia Venner review
After decades of wrangling, the unitary
patent (UP) and Unified Patent Court (UPC)
looks set to become a reality. The last year
or so has seen great strides towards the
implementation of the new legal system
and, while uncertainties remain, it looks
likely that it will be in place by 2017.
This article will provide an overview of these
great strides, some remaining concerns,
and a summary of where we currently stand
in relation to this potentially game-changing
development.
The Spanish challenge

One potential threat to the new system, a
second Spanish challenge to the legality of the
UP, would appear to be fading. On 31 May
2013, Spain filed two cases before the Court of
Justice of the European Union (CJEU), seeking
annulment of the regulations forming part of
the new patent package on the grounds that
they lack legal basis, delegate too much power
away from the EU and require a discriminatory
language regime, among other objections.
The Advocate-General issued a nonbinding opinion in November 2014 asserting
that both challenges should be dismissed,
declaring that:
The unitary protection conferred
provides a genuine benefit in terms
of uniformity and integration, while
the choice of languages reduces
translation costs considerably and
safeguards better the principle of legal
certainty.
The CJEU follow the decision of the AdvocateGeneral around 80% of the time and it would
be surprising if it was not followed in this case,

particularly given the political momentum
behind the new system and the fact that the
comments of the CJEU on the legality of the
procedure used to create the UP (provided in
response to an earlier legal challenge by Spain
and Italy), were taken into account when
designing the new system. The final decision
is expected in early 2015.
Ratification of the UPC

Agreement
In order for the UPC to come into effect,
the UPC Agreement must be ratified by 13
contracting member states, including the UK,
France and Germany. Thus far, the Agreement
has been ratified by Austria, Belgium,
Denmark, France, Malta and Sweden. It is
therefore necessary for seven more countries
to ratify the Agreement, including the UK and
Germany.
With regard to Germany, it is reported that
ratification is unlikely to take place until all of
the other necessary ratifications have occurred
and all of the preparations for the UPC have
been completed, which is unlikely to be
before 2016. Progress is being made towards
ratification in the UK, following the passing
of the Intellectual Property Act 2014, which
provides the legal framework to bring the UPC
Agreement into effect in the UK.
Based on an informal poll of our
correspondents across Europe, headway is also
being made in Finland, where a government
bill will be put before the new parliament in
the autumn of 2015, and in Ireland, which
will hold a referendum of the Irish electorate
next year to amend the constitution, allowing
ratification to take place. It is also likely that

the Agreement will be ratified in Hungary,
Lithuania and the Netherlands sometime in
2015.
There has been little or no apparent
progress towards ratification in the Czech
Republic, Cyprus, Greece, Italy, Romania and
the Slovak Republic. Developments in Bulgaria,
Estonia, Portugal and Slovenia have been hard
to gauge due to a lack of publicly-available
information.
In summary, with nearly half of the
necessary 13 countries having ratified the
Agreement, and the other half looking set
to do so within a year or so, it would appear
that the ratification process is unlikely to hold
up implementation once all of the remaining
preparations are completed.
Setting up the UPC courts and

judges
Within the UPC, the Court of First Instance
(CFI) will comprise a central division (based in
London, Paris and Munich) and a number of
local and regional divisions. So far, single local
divisions are expected in Austria, Belgium,
Denmark, England & Wales, France, Finland,
Italy, Ireland and the Netherlands. No fewer
than four local divisions are planned for
Germany (in Dsseldorf, Mannheim, Munich
and Hamburg). A Nordic-Baltic regional
division comprising Estonia, Latvia, Lithuania
and Sweden is planned, while Bulgaria,
Romania, Greece, Cyprus and Slovenia are also
considering establishing a regional division.
One of the primary concerns regarding
the new legal system is the qualifications
and experience of the judges who would
Alexander Korenberg is a European and chartered patent attorney with clients across Europe and is a partner at Kilburn & Strode,
a top-tier European firm of patent and trademark attorneys based in London. Julia Venner is a European and chartered patent attorney
and an associate at Kilburn & Strode.
February 2015
Opinion
preside over cases before the UPC. However,
a dedicated training centre for the UPC
was officially opened on 13 March 2014
in Budapest, which will function as a coordinating office for the training of judges
and candidate judges. Shortly after, the UPC
Preparatory Committee approved a list of
almost 700 candidates deemed suitable to
become legal and technical judges in the UPC.
designated language for a preliminary

objection, written pleadings and oral hearings.
In effect, this rule will allow proceedings
to be conducted in two languages, in a
similar manner to some European Patent
Office opposition proceedings. However, it is
currently unclear whether these provisions will
be included in the final version of the Rules of
Procedure.
Rules of Procedure
Bifurcation
Bifurcation of infringement and validity
proceedings is a distinct possibility under the
new legal system, where local or regional
divisions handling infringement proceedings
can refer a counterclaim of revocation to
the central division. The latest draft of the
rules provide that, where a case is bifurcated
and the infringement proceedings are not
stayed, the revocation proceedings shall be
accelerated by the central division, who shall
endeavour to set a date for oral proceedings
on the revocation action prior to that for
the infringement action. This is generally
considered to be a welcome development,
reducing the threat of an injunction gap.
Still, effectiveness of this provision remains to
be seen, since the use of the non-committal
phrase shall endeavour in the revised Rule
40 could limit its impact in practice.
On 31 October 2014, the Preparatory

Committee for the UPC issued the 17th
version of the draft Rules of Procedure. Among
other things, this latest version provided some
clarification regarding the procedure for opting
patents out of the jurisdiction of the UPC,
the language regime, the extent to which
infringement and validity proceedings are
likely to be bifurcated and judicial discretion
for granting remedies.
Opting out
Rule 5, which will allow a patentee to opt
a standard European patent out of the
jurisdiction of the UPC during a transitional
period, has been clarified in a number of
ways. First, a 30 day time period has been
introduced for the payment of the opt-out
fee, following the filing of an application to
opt-out. Secondly, an amendment to Rule 5.7
clarifies that an action before the UPC (even if
concluded) represents an absolute bar to the
opting-out of a patent involved in that action.
Similarly, an action before a national court
(even if concluded) represents an absolute bar
to the withdrawal of any opt-out of a patent
involved in that action. Finally, because it is
not possible for a UP to avoid the jurisdiction
of the UPC, new Rule 5.10 provides that the
patentee shall notify the registry if a patent
application which has been opted out of the
UPC subsequently grants as a UP. The opt-out
will then be deemed to have been withdrawn
in respect of the contracting member states
covered by the UP. There are, however, still
concerns regarding the complexity of the optout procedure, the lack of detail in respect of
some of the provisions and the ability of the
register to handle the likely flood of opt-out
applications.
Language regime
One potentially controversial amendment
to the proposed language regime provides
for a possible partial use of an additional
language. Rule 14.2(a) contains the principle
that the plaintiff decides the language of the
proceedings by choosing from among the
languages designated by the local or regional
division. New Rule 14.2(c) provides that parties
(including defendants) may use an additional
result, any patents filed before that date will

not have legal effect in Malta. This could
potentially restrict unitary effect to European
patent applications filed on or after 1 March
2007.
A further potential complication arises
from the fact that Croatia only became a
fully contracting member state of the EPC
on 1 January 2008. Prior to that, it was
an extension state, to which European
Patent Applications could be extended upon
request. If Croatia decides to take part in the
UP and UPC, a literal interpretation of Article
3(1) would mean that it will not be possible
to request unitary effect for a European
patent filed before 1 January 2008, unless
the patentee had the foresight to extend the
patent application to Croatia.
This critical date could shift even further
forward, were a new country to join the
EPC and subsequently the EU, UPC and UP.
Some clarification will certainly be required
regarding how Article 3(1) is to be interpreted,
in practice.
Judicial discretion
An amendment to Rule 118 has also clarified
that a court can, at its discretion, order the
payment of damages or compensation
instead of granting an injunction. Previously,
such remedies were only to be available if
the infringer had acted both unintentionally
and without negligence, provisions which
would only vary rarely apply in practice.
This change means that injunctions will not
automatically be granted if there is a finding
of infringement, which could make the UPC
rather less attractive to patentees.
The final draft of the rules is expected
to be agreed in the spring of 2015 and
will represent a major step forward in the
implementation of the UPC.
Fees
Another concern regarding the new legal
system is the cost, including the level of the
single, annual renewal fee that will be payable
for a UP. An announcement is not expected
until June 2015, but it is anticipated that this
renewal fee will be equivalent to the cost of
renewing a standard European patent in the
five most popular European states. As this
would include Germany, which has relatively
expensive renewal fees, there are concerns
that the cost of renewing a UP might put
many patentees off the new system. This is
particularly true given than about half of all
European patents are currently validated in
fewer than five states (often including Italy
and Spain, which remain outside the UP
and would therefore incur additional cost
to cover), a scenario which seems likely to
remain cheaper using the current validation
system than obtaining a UP. It remains to be
seen if the concerns are heeded by the Select
Committee when the fees are set.
Remaining concerns
Comment
The Maltese problem

The participation of Malta in the new legal
system has potentially important implications
for the granting of UPs. A literal interpretation
of the wording of Article 3(1) of the UP
regulation would mean that a patent could
only have unitary effect if it is granted with
the same set of claims in respect to all of
the participating member states of the
regulation. This includes Malta, which only
became a member of the European Patent
Convention (EPC) on 1 March 2007. As a
After four decades of development,

numerous legal challenges and many falsestarts, it would appear that a unified EU
patent system is imminent. Several issues
still have the potential to derail the system,
not least the threat of the UK leaving the EU
following a referendum proposed for 2017.
Yet, this is certainly the closest we have ever
been to implementing the UP and UPC and
the biggest change to the European patent
system in most of our working lives may be
just around the corner.
February 2015
Opinion
PATENT FILE
Commil v Cisco
The US is in the midst of rethinking defences to inducement of
patent infringement. Charles T Steenburg examines the case
Charles T Steenburg
The Supreme Court of the US (SCOTUS)

upcoming decision in Commil USA, LLC v
Cisco Systems, Inc, may restrict the options
of defendants charged with inducing
patent infringement under 35 USC section
271(b). On its face, Commil presents a
narrow issue: whether a defendants
belief that a patent is invalid constitutes
a defence to inducement. However,
lurking below is a broader question:
whether a defendant should be liable for
inducing infringement if the defendant
knew about the asserted patent and the
patent owners view that the defendant
was encouraging infringement, but the
defendant reasonably disagreed.
Under current law, a good-faith belief
can immunise a defendants past conduct,
even if courts ultimately side with the patent
owner and determine that the activities in
question actually had caused others to directly
infringe the patent. For instance, a defendant
that instructs customers to use products in a
particular way is not necessarily liable under
section 271(b), even if (1) the patent owner
had previously warned the defendant that
the method described in the instructions was
covered by a patent; and (2) courts ultimately
agreed with the owners understanding. This
specific intent requirement has renewed
interest in formal opinions of counsel.
However, the US Patent and Trademark
Office (USPTO) has suggested the alternative
of holding inducers liable as a matter of
course, if they were aware of a patent in
question and encouraged acts later deemed
to infringe (regardless of what the defendant
believed about those acts). If SCOTUS takes this
approach, it would lessen the value of opinions.
Commil could also have significant impacts
even if the court focuses only on the letter of
the question presented. While clear in theory,
the distinction between non-infringement and
invalidity can be fuzzy in practice.
Why inducement matters

Inducement is a type of indirect
infringement. Unlike direct infringement,
inducement does not require that the
defendant make, use, sell, offer to sell, or
import a patented product or method. Further,
unlike contributory infringement, defendants
can be liable even for selling basic staples if
they encourage customers to use them in a
way that constitutes infringement.
Commil could also

have significant
impacts even if the
court focuses only
on the letter of the
question presented.
While clear in theory,
the distinction between
non-infringement and
invalidity can be fuzzy
in practice.
From the perspective of many patentees,
inducement offers a crucial fallback when
direct infringement claims are not practical. For
example, inducement theories offer a way to:
Enforce patents in which the only direct
infringers are individuals (eg, purchasers of
a particular product) and/or immune from
infringement claims (eg, doctors allegedly
infringing medical method claims);
Target the source of infringing products
even though the manufacturer sells the
products abroad to various importers; and
Pursue individual executives personally in

case their company is undercapitalised.
From this perspective, a state-of-mind
requirement creates a loophole for bad actors.
By contrast, accused infringers tend to cast
inducement as a disfavoured theory, that allows
patentees to extort money from innocents
and/or cover up mistakes that applicants made
in the patent drafting process.
In practice, the truth lies somewhere in the
middle. Inducement theories can be critical for
patent owners when facing knockoff artists
who seek to exploit technicalities. Yet, section
271(b) can also be abused. Indeed, one of the
underlying challenges with inducement is that
it spans so many different types of scenarios
and offers both sides an array of talking points.
Key inducement cases prior to

Commil
DSU and its progeny
In 2006, the US Court of Appeals for the
Federal Circuit (Federal Circuit) resolved an
earlier split and held that inducement requires
more than encouraging a third party to take
acts that constitute direct infringement. The
DSU Medical Corp v JMS Co, (DSU) decision
en banc in relevant part held that section
271(b) requires evidence of culpable
conduct, directed to encouraging anothers
infringement rather than mere knowledge
of the direct infringers activities.1
For this reason, the Federal Circuit found
sufficient evidence to support a jury verdict in
favour of the accused inducer. In particular,
the defendant had obtained several noninfringement opinions of counsel. Notably,
however, the jury had found that the product
in question actually did infringe. In other
words, the jury found that the opinions of
counsel were wrong.
DSU led many companies to consider
and patent lawyers to recommend obtaining
opinions of counsel in more situations than
Charles T Steenburg is a shareholder at the intellectual property firm Wolf, Greenfield & Sacks, in Boston, Massachusetts.
February 2015
Opinion
previous conventional wisdom would have
dictated.
Global-Tech Appliances
The SCOTUS 2011 Global-Tech Appliances,
Inc v SEB SA, (Global-Tech) decision2 also
concerned inducement, but with a different
twist. Unlike the accused inducer in DSU,
the defendant in Global-Tech did not claim
to have an opinion concerning the relevant
patent or otherwise believe that its products
did not infringe. The defendant instead pled
ignorance that the asserted patent even
existed, notwithstanding that the defendant
had copied the patent owners product a
fact it hid from the attorney who had been
responsible for conducting a right-to-use
study. Unaware of the patent owner itself,
the attorney failed to locate the applicable
patent. The defendant in turn relied on its
purported lack of knowledge as a defence to
inducement.
With these damning facts, the jury found
the defendant liable under section 271(b).
The Federal Circuit affirmed, holding that a
defendant can be liable for inducement if
it should have known about the asserted
patent and the alleged infringement. In
particular, the Federal Circuit stressed that the
defendant had deliberately disregarded a
known risk that the developer of the original
product (which the defendant had copied) had
a relevant patent.
SCOTUS affirmed the result, albeit on
a slightly different basis. First, the court
emphasised that it is not enough for the
accused inducer to lead another to engage
in conduct that happens to amount to
infringement. Inducement instead requires
knowledge that the induced acts constitute
patent infringement. However, the court
held that willful blindness can be a basis
for finding such knowledge. In essence, that
requires a defendant to bury its head in the
sand.
The Commil case

In Commil v Cisco, SCOTUS faces a scenario
closer to DSU than Commil. Instead of focusing
on infringement, however, Cisco proffered
evidence to support its purportedly goodfaith belief that Commils patent is invalid.
The trial court judge refused to allow Cisco to
present such evidence to the jury. However,
the Federal Circuit reversed and ruled that
Ciscos evidence was admissible. Citing DSU,
the decision found no principled distinction
between a good-faith belief of invalidity and
a good-faith belief of non-infringement for
purposes of inducement.3
Commil asked SCOTUS to reverse the
Federal Circuits decision and hold that
beliefs concerning invalidity are immaterial

to inducement. The court later invited the
government to file a brief expressing the
views of the US. The Solicitor General and the
USPTO recommended that the court grant
review and hold that a defendants belief as
to the invalidity of a patent is not a defence,
if the defendant is charged with inducing
infringement.
SCOTUS subsequently accepted the case
for review. As of this writing, the parties have
not filed their merits briefs. Oral argument will
likely occur in March or April, with a decision
by June.
If SCOTUS affirms
the Federal Circuit,
it will confirm the
ability to emphasise
ones best defences
in opinion letters,
even if those positions
concern validity
or other defences
aside from noninfringement.
Potential outcomes and
action items
There are three basic ways in which SCOTUS
could resolve Commil v Cisco on the merits.
Confirm the Federal Circuits decision. First,
the court may confirm the Federal Circuits
holding that a defendants beliefs concerning
invalidity can be relevant to inducement.
Although this is a possibility, SCOTUS typically
does not review Federal Circuit decisions with
an eye toward affirming them. In GlobalTech, however, the court affirmed the result
while stressing that willful blindness is
the only alternative to actual knowledge,
thereby making it somewhat harder to prove
inducement than it would have been under
the Federal Circuits standard.
If SCOTUS affirms the Federal Circuit, it
will confirm the ability to emphasise ones
best defences in opinion letters, even if those
positions concern validity or other defences
aside from non-infringement.
Reject the Federal Circuits decision.
Alternatively, SCOTUS may reject the Federal
February 2015
Circuits holding and draw a rigid line between

infringement and validity, yet confirm the
comment in Global-Tech that section 271(b)
requires knowledge that the induced acts
constitute patent infringement.
If so, patent attorneys would start
considering whether particular invalidity
opinions could be converted into noninfringement opinions. This may be easier
than it sounds. In particular, opinions could
invoke the cannon of construction that claims
normally should not be construed in a way
that renders them invalid.4 This maxim has
fallen out of favour with the Federal Circuit,
but has never been officially repudiated.
On the other hand, a rigid distinction could
make it harder for alleged inducers to rely
on exculpatory testimony from employees or
agents aside from trained attorneys. Laypeople
often lump validity and infringement
considerations together. In one recent case,
for example, an executive had testified that
he had not viewed the asserted patents as
presenting a barrier, because he thought
that the relevant products simply practised
the prior art. The jury found no inducement.
The Federal Circuit affirmed, finding that the
testimony was relevant under DSU despite the
general rule that practising the prior art is
no defense to infringement.5
Change direction. The final scenario is
that SCOTUS could revisit Global-Tech and
in particular the hold[ing] that induced
infringement under section 271(b) requires
knowledge that the induced acts constitute
patent infringement. Global-Tech itself did
not squarely present the issue. In asserting
that it never even knew the patent existed,
the accused inducer effectively conceded
that it would be liable for inducement if the
courts found otherwise.
The USPTOs brief in support of Commils
petition suggests that it would welcome such
a change at some point, but not necessarily
now, given the cases procedural posture.
If SCOTUS does revisit Global-Tech, it
could effectively overturn DSU and make it
significantly easier for patent owners to prove
inducement.
Footnotes
1. 471 F3d 1293 (Fed Cir 2006) (en banc in relevant
part).
2. 131 S Ct 2060 (2011).
3.
Commil USA, LLC v Cisco Systems, Inc, 720 F.3d
1361 (Fed Cir 2013).
4. Eg, Harris Corp v IXYS Corp, 114 F 3d 1149 (Fed
Cir 1997).
5. Kinetic Concepts, Inc v Blue Sky Med Group, 554
F 3d 1010 (Fed Cir 2009).
Opinion
PATENT FILE
Door opened for medical
use claims in Canada
A Canadian Federal Court has rejected hitherto guidelines on
unpatentable methods of treatment, such as fixed drug
dosage schedule. Jean-Charles Grgoire explains
The Canadian Intellectual Property Office
(CIPO) released examination guidelines
in 2013 titled Examination Practice
Respecting Medical Uses (PN2013-04).1
The guidelines affirmed CIPOs long-standing
position that methods of medical treatment
are unpatentable. The guidelines went on to
explain that medical use claims are generally
permitted, as long as they do not equate to a
medical or surgical method (eg do not include
an active treatment or surgical step) that would
prevent physicians from exercising their skill
and judgment. However, the guidelines took
the position that claims that include a dosage
regimen, or restrictions on how and when
to administer a drug, cover an unpatentable
method of medical treatment. In a recent
case, the Federal Court has criticised those
guidelines.
In AbbVie Biotechnology Ltd v Canada (AG)
(2014 FC 1251), the Federal Court considered
an appeal of a refusal of the Commissioner
of Patents to grant a patent on claims to a
fixed dosage and schedule. In refusing the
claims at issue (syringe claims, Swiss claims,
and use claims), the Commissioner cited the
examination guidelines as setting out the
Offices interpretation of case law pertaining
to medical use claims.
The Commissioner argued that the claims
were unpatentable in view of case law, on
the basis that they would place restrictions
on how and when to administer a drug.
The Federal Court rejected the argument,
and instead held that claims for a fixed
dosage and schedule do not automatically
Jean-Charles
Grgoire
constitute unpatentable subject matter. The

court held that claims to a fixed dosage, and/
or a fixed dosage schedule or interval, are not
unpatentable subject matter where there is no
evidence to contradict that claimed dosage,
ie no evidence that adjustments requiring skill
and judgment are needed.
The court held

that claims to a
fixed dosage, and/or
a fixed dosage
schedule or interval,
are not unpatentable
subject matter where
there is no evidence
to contradict that
claimed dosage.
The court held that the issue remains
whether the claims cover a method of
medical treatment that prevents physicians
from exercising skill and judgement. The
court considered that the Commissioners
focus on how and when to administer a
drug was misplaced. To the extent that the
Commissioner sought to advance new policy
as set out in the examination guidelines for
rejecting subject matter, the court considered

that he went too far.
Applying the foregoing to the claims
at issue, and distinguishing from the case
law, the Federal Court found there was no
evidence to suggest that the dosage would
not be fixed as claimed, and that adjustments
requiring skill and judgment would be needed
as a result. Accordingly, the Commissioner was
not justified in finding that the claims sought
to patent the exercise of skill and judgment,
and thus constitute an unpatentable method
of medical treatment. In the result, the Federal
Court directed the Commissioner to allow
the claims. The Commissioner has 30 days to
appeal the Federal Court decision.
In view of the decision, it appears that
applicants are free to pursue medical use
claims that include a (fixed) dosage regimen or
restrictions on how and when to administer
a drug, absent evidence that such claims
would prevent physicians from exercising skill
and judgment.
Footnote
1. http://www.cipo.ic.gc.ca/eic/site/cipointernetinternetopic.nsf/eng/wr03656.html
Jean-Charles Grgoire is an associate at Marks & Clerk in Ottawa, Canada. He is a registered Canadian patent agent, and is registered to
practice before the United States Patent and Trademark Office on behalf of Canadian clients. He is a member of the Intellectual Property
Institute of Canada, and sits on the Joint Liaison Committee on Industrial Designs. Jean-Charles is also a member of the International
Association for the Protection of Intellectual Property and American Intellectual Property Law Association (AIPLA); the Law Society of
Upper Canada (Ontario); and the Association des juristes dexpression franaise de lOntario.
February 2015
Opinion
TRADEMARK TALK
Shape of childs chair not
registrable as a trademark
Avoid the Tripp trap! Farah Mukaddam discusses the CJEU ruling on
the validity of shape marks in Hauck v Stokke and Ors
In the European Union, a three dimensional
shape can be protected by registering it
as a trademark or design. Registering a
trademark is generally considered a more
attractive option, as registered trademarks
confer indefinite protection (provided that
the mark is put to genuine use and the
renewal fees are paid), whereas registered
design rights are time limited.
To prevent companies obtaining an
indefinite monopoly over technical solutions
or functional characteristics of products and to
prevent trademark registrations being used to
extend other rights, which the EU legislature
had specifically sought to limit, Article 3(1)(e)
of the Trade Marks Directive sets out certain
absolute grounds for refusal or invalidity of
shape trademarks.
In a long-awaited ruling on the
interpretation of two of those absolute
grounds, the Court of Justice of the European
Union (CJEU) has held:
The Article 3(1)(e)(i) exclusion (relating to
the nature of the goods themselves) will not
apply to a shape which includes a decorative
or imaginative element, which plays an
important or essential role in the goods and
which is not inherent to the generic function
of the goods.
However, in respect of the Article 3(1)(e)(iii)
exclusion (relating to substantial value), a
product which has functional characteristics
as well as an aesthetic purpose may still
be caught if these characteristics give the
product significant value.
The CJEU also confirmed that the absolute
grounds are mutually exclusive and cannot be
applied in combination. As a result, obtaining
trademark protection for shapes of products is
certainly not getting any easier.
Legal background
The relevant grounds of refusal and invalidity
are set out in Article 3(1)(e) of the Trade
Marks Directive,1 which states that signs
which consist exclusively of any of the
following elements shall not be registered as a
trademark, or if registered shall be liable to be
declared invalid:
The shape which results from the nature of
the goods themselves (the first exclusion),
or
The shape of goods which is necessary to
obtain a technical result, or
The shape which gives substantial value to
the goods (the third exclusion).
The dispute
Stokke, a Norwegian manufacturer of childrens
furniture and accessories, brought a childs
chair to the Dutch market called Tripp Trapp.
Stokke subsequently registered a Benelux
trademark for a three dimensional mark
resembling the Tripp Trapp chair for chairs,
especially high chairs for children, which was
represented as illustrated below, (see Figure 1).
Farah Mukaddam
A rival German manufacturer, Hauck, also

manufactured, distributed and sold childrens
articles including two chairs, which were
similar to the Tripp Trapp chair called Alpha
and Beta.
Stokke commenced legal proceedings
in the Netherlands before the Rechtbanks
Gravenhage (district court), claiming that
Haucks activities with respect to the Alpha
and Beta chairs infringed copyright in the Tripp
Trapp chair and the Benelux shape trademark.
Hauck counterclaimed that the Benelux
trademark registration was invalid, relying on
Article 3(1)(e) of the Trade Marks Directive.
The district court upheld Stokkes claim
of copyright infringement. However it also
declared that the Benelux shape trademark
was invalid.
Hauck appealed the decision to the
Gerechtshof te s-Gravenhage (Dutch Court of
Appeal). In its judgment, the Court of Appeal
held that the Tripp Trapp chair was protected
by copyright and that Haucks Alpha and Beta
chairs infringed that copyright. However, the
Court of Appeal also upheld the declaration of
invalidity of the Benelux shape trademark, as
the shape was determined by the very nature
of the product (ie, a safe, comfortable, reliable
childs chair) and the design of the Tripp Trapp
chair gave the product substantial value.
On appeal to the Hoge Raad der
Nederlanden (the Supreme Court of the
Netherlands), the court referred certain
questions on to the CJEU. The questions and
the CJEUs decision are summarised as follows.
CJEU decision
Question1: Does the first exclusion
(relating to the nature of the goods
themselves) apply to a shape which is
indispensable to the function of the
Figure 1
Farah Mukaddam is an associate specialising in IP in the London office of Norton Rose Fulbright.
February 2015
Opinion
goods only, or can it also refer to a shape

with one or more substantial functional
characteristics that consumers may
possibly look for?
The CJEU first recalled that it was already
established that the absolute grounds of refusal
or invalidation set out in Article 3(1)(e) must
be interpreted in light of the public interest
considerations underlying each of them,
which were to prevent trademarks creating a
monopoly over functional characteristics and
to prevent trademark registrations being used
to extend other rights that the EU legislature
had specifically sought to limit.
With that in mind, the CJEU held with
respect to the first exclusion:
The national court must first identify the
most important (or essential) characteristics
of the sign. Applying Lego Juris A/S v OHIM &
MEGA Brands, Inc, the assessment could be
based on the overall impression of the sign
or by examining each of the components of
the sign in turn.
The first exclusion does not apply to shapes
that include a decorative or imaginative
element, which plays an important or
essential role in the goods and which is
not inherent to the generic function of
the goods. If the provision were to apply
to such shapes, this would leave the
manufacturer with no creative freedom to
make a personal essential contribution to
the goods. This would in effect render the
prohibition redundant as it would mean
that the first exclusion would only apply to
natural products (which have no substitute)
and regulated products (where the shape is
prescribed by legal standards), even though
such shapes could not be registered given
their lack of distinctive character.
The concept of a shape which results from
the nature of the goods themselves includes
shapes with essential characteristics, which
are inherent to the generic function(s) of
the goods. Reserving such characteristics
to a single manufacturer would make it
difficult for competitors to make their goods
in a shape which would suit the purpose
for which they were intended. Moreover,
consumers would be looking for those
characteristics in products of competitors.
Question 2: Does the third exclusion
(relating to substantial value) apply to the
shape being the predominant value in the
product only, or does it also apply where
other characteristics exist which give the
product substantial value? What is the
relevance of the perception of the public?
The CJEU held that:
The third exclusion would apply to shapes
of products which have essential functional

characteristics, as well as a significant
aesthetic element, which give the product
significant value. Otherwise, it would
be possible for a proprietor to obtain a
monopoly with regards to the essential
characteristics of the products, contrary to
the underlying objectives of the provision.
Following Lego Juris, the presumed
perception of the sign by the average
consumer is not decisive but may be one
of the relevant criteria for identifying the
essential characteristics of the sign.
The decision
provides some
clarity and guidance
on when shape marks
will fall within the
grounds for refusal
or invalidity.
Question 3: Can the two grounds of

invalidity under Article 3(1)(e)(i) and (ii)
be applied in combination?
The CJEU held that the fact that the three
grounds for refusal set out in Article 3(1)(e)
were set out as successive points, coupled with
the word exclusively, was indicative that each
ground must be applied independently of the
others.
In answer to the third question, the CJEU
held that the grounds of refusal set out in the
first and third indents of the Article 3(1)(e) are
mutually exclusive and may not be applied in
combination.
Implications
The decision provides some clarity and
guidance on when shape marks will fall within
the grounds for refusal or invalidity.
It is clear that the first exclusion will not
apply if the shape of the product includes a
decorative or imaginative element, which plays
an important or essential role in the goods and
which is not inherent to the generic function
of the goods.
However, a shape of product that has
functional characteristics as well as an
aesthetic purpose may still be caught by the
February 2015
third exclusion, if these characteristics give the

product significant value.
It is anticipated that, for these reasons,
the Tripp Trapp chair will fall outside the
scope of the first exclusion (it has bespoke/
unique design), but that it might be caught
by the third exclusion given it also has various
functional purposes (eg, safety, comfort and
reliability).
The CJEU also confirmed that the absolute
grounds are mutually exclusive and cannot be
applied in combination. This would seem a
logical conclusion as it is difficult to perceive a
situation where a shape includes characteristics
which are inherent to the generic function of
the goods, but those same characteristics give
the goods significant value.
Questions remaining
Leaving aside the guidance given, the
judgment raises a number of questions which
were not answered by the CJEU:
With regards to the first exclusion, how
is an essential characteristic inherent to
the generic function of a product to be
assessed?
Furthermore, the assessment of the

important characteristics of the goods could
be based on the overall impression of the sign
or by examining each of the components of
the sign in turn. When is it appropriate to
consider the individual elements of the sign
as opposed to the overall impression? It is
noted that the discretion is in contrast to the
requirements under Articles 1(b), 4 and 5
(ie, when considering the distinctiveness of
a sign or its similarity to another sign) where
the overall impression of the mark must be
considered. This has the potential to create
inconsistencies where different assessments
are deployed in the contexts of registrability
and infringement.
With regards to the third exclusion, the
CJEU held that other characteristics, may
also give the product significant value. Is
there a difference between substantial (as
per the wording of Article 3(1)(e)(iii)) and
significant as expressed by the CJEU?
Moreover, it is unclear how a trademark for
the shape of a product will give a monopoly
over the functional characteristics, if these
characteristics are derived from features
other than shape.
It remains to be seen how this ruling will
be applied by the Supreme Court of the
Netherlands.
Footnote
1.http://eur-lex.europa.eu/LexUriServ/LexUriServ.
do?uri=CELEX:31989L0104:en:HTML
Opinion
TRADEMARK TALK
Solving the Rubiks
Cube challenge
The EU General Court held that the 3D puzzles shape mark is a
valid trademark. Osborne Clarkes Abby Minns takes a look
In a battle between Seven Towns, the
owner of the Rubiks Cube shape mark
registration, and Simba Toys (Simba)
that has lasted for over eight years, the
owner of the Rubiks Cube mark has come
out on top. In November 2014, the EU
General Court upheld an earlier decision of
the Second Board of Appeal, that Simbas
application for a declaration of invalidity
should not be granted and rejected the
appeal on every ground.
Traditionally, shape marks offer limited
scope and there are several measures builtinto the Community Trade Mark Regulation
in order to prevent 3D marks being given
too broad protection. However, this decision
will be of interest to rightsholders with goods
that incorporate a shape which distinguish
their goods as those originating from the
rightsholder, as it demonstrates some of
the circumstances in which a shape mark
registration may be successful.
Background to the proceedings

Seven Towns filed an application for
registration of a Community trademark
(CTM) on 1 April 1996, for the 3D mark (the
Mark) shown in Figure 1.
Registration of the mark was applied for
in Class 28 for three-dimensional puzzles.
In November 2006, Simba applied for a
declaration of invalidity of the mark. By its
decision of 14 October 2008, the Cancellation
Division at the Office for Harmonization in the
Internal Market (OHIM) rejected the application
for a declaration of invalidity in its entirety.
Simba appealed this decision and in a decision
dated 1 September 2009, the Second Board
of Appeal maintained the decision of the
Cancellation Division and dismissed the appeal.
Abby Minns,
Osborne Clarke
Grounds relied on by Simba at

the General Court
Figure 1
This decision
will be of interest
to rightsholders
with goods that
incorporate a shape
which distinguish
their goods as those
originating from the
rightsholder, as it
demonstrates some
of the circumstances
in which a shape mark
registration may be
successful.
In its appeal to the General Court, Simba relied

on the following grounds:
Article 76(1) of Regulation No 207/2009
which provides that in proceedings before
it the office shall examine the facts of its
own motion; however in proceedings
relating to relative grounds for refusal of
registration, the office shall be restricted in
this examination to the facts, evidence and
arguments provided by the parties and the
relief sought. Simba alleged that the Board
of Appeal infringed the first part of Article
76(1) in its decision.
Article 7(1)(e)(ii) of Regulation No 40/94
which states the following shall not be
registered signs which consist exclusively
of the shape of goods which is necessary
to obtain a technical result.
Article 7(1)(e)(i) of Regulation No 40/94
states that signs which consist exclusively
of the shape which results from the
nature of the goods themselves shall not
be registered.
Article 7(1)(e)(iii) of Regulation No 40/94
notes that signs which consist exclusively
of the shape which gives substantial value
to the goods shall not be registered.
Article 7(1)(b) of Regulation No 40/94 holds
that trademarks which are devoid of any
distinctive character shall not be registered.
Article 7(1)(c) of Regulation No 40/94 states
that the following shall not be registered
trademarks which consist exclusively of signs
or indications which may serve, in trade,
to designate the kind, quality, quantity,
intended purpose, value, geographical
origin or the time of production of the
goods or of rendering of the service, or other
Abby Minns is a senior associate in the IP litigation team at Osborne Clarke. Abby advises on a wide range of intellectual property law
and has experience of a broad range of IP disputes covering a number of different sectors.
February 2015
Opinion
This comprehensive set of grounds of appeal

was comprehensively rejected.
Does the Rubiks Cube mark

consist of a sign which consists
exclusively of the shape of goods,
which is necessary to achieve a
technical result (Article 9(1)(e)(ii))?
The General Court explained that the wording
of Article 9(1)(e)(ii) reflects the balance of
two conflicting considerations. This first is
that the exclusion from registration of a sign
that consists of the shape of goods necessary
to obtain a technical result, ensures that
undertakings may not use trademark law in
order to perpetuate indefinitely exclusive rights
relating to technical solutions. Secondly, the
fact that the ground is restricted to signs which
consist exclusively of the shape of goods,
which is necessary to obtain a technical
result, accounts for the fact that any shape of
goods is to a certain extent functional and that
it would therefore be inappropriate to refuse
to register the shape of goods as a trademark,
solely on the grounds that it has functional
characteristics.
The General Court agreed with the Board
of Appeal in its finding that the essential
Popartic / Shutterstock.com
characteristics of the goods or service.

Article 7(3) of Regulation No 40/94

highlights that Paragraph 1(b), (c) and (d)
shall not apply if the trademark has become
distinctive in relation to the goods or
services for which registration is requested
in consequence of the use which has been
made of it. Simba complained that the
Board of Appeal did not decide whether the
Mark had acquired distinctive.
The first sentence of Article 75 of Regulation
No 207/2009 which states decisions of the
Office shall state the reasons on which they
are based.
The General
Court agreed with
the Board of Appeal
in its finding that
the essential
characteristics
of the mark do not
perform a technical
function of the goods
concerned.
characteristics of the mark do not perform a

technical function of the goods concerned.
According to the Board of Appeal, the cubic
grid structure gives no indication as to its
function. The General Court rejected Simbas
arguments under this ground noting that they
were based on knowledge of the rotating
capability of the vertical and horizontal lattices
February 2015
of the Rubiks Cube, but that capability cannot

result from the black lines in the mark. As a
result, the Board of Appeal cannot be criticised
for not having included an invisible element in
its analysis.
Other grounds
The General Court also held that the nature
of the goods, being 3D puzzles, in no way
requires that those goods have the shape of a
cube with a surface that has a grid structure,
therefore the shape did not fall foul of Article
7(1)(e)(i).
Further, the mark was not devoid of
distinctive character (under Article 7(1)(b))
since the applicant had not established that
the shape in question constitutes the norm in
the sector of 3D puzzles.
The General Court noted that, Even
if the shape in question were perceived by
consumers as representing a 3D puzzle, it
would still only be associated with a specific
product namely the Rubiks Cube and not
with a generic sub-section of 3D puzzles.
An extension of the scope of

shape marks?
Shape marks can be a useful IP right for
a business since they provide a potential
perpetual monopoly in relation to the shape of
a product and so can be a used to prevent the
sale of similar products. However, due to the
Opinion
potential for this to be exploited and prevent
competition, there are safeguards within the
legislation to prevent this monopoly extending
to, for example, shapes which cover technical
functions and which are the result of the
nature of the goods themselves.
Recent cases have demonstrated the
difficulty in obtaining registration for a shape
mark as shown by the decision in Lego Juris
A/S v OHIM & MEGA Brands, Inc.1 In this case,
Legos registration for a 3D mark consisting
of the upper surface and two sides of a Lego
brick was held to be invalid, since the shape
of the mark was necessary to perform a
technical function. The Court of Justice of the
European Union explained that the purpose of
Article 7(1)(e)(ii) is to prevent the granting of a
monopoly over technical solutions or functional
characteristics of a product. Thus, if Lego was
granted registration of the Lego brick, after its
patent had expired, it would reduce the ability
of competitors to use that technical solution in
producing similar, alternative, toy brick shapes.
The difference in the present case is that the
shape of the mark does not in itself perform a
technical function ie, the shape mark does not
indicate that parts could be moved or rotated
and so in the context of three-dimensional
puzzle games, the shape did not achieve a
technical function. Therefore, contrary to the
assertions of the applicant, the mark does

not prevent competitors from manufacturing
rotatable 3D puzzles. In contrast, in the case
of the Lego brick, there are two rows of studs
on the upper surface of the toy brick and the
goods concerned were for construction toys.
As such, it could be logically inferred that those
toy bricks contained a hollow underside and
secondary projections for stacking the bricks.
As a result, the shape of the mark is necessary
to obtain a technical result.
It would appear that the scope of shape
marks has not been extended, however the
case of the Rubiks Cube provides a useful
example of where a shape mark will fall on
the right side of the line of registrability.
Points to consider when applying

or considering applying for a
shape trademark:

Take care when making a graphical
representation of the shape mark. Consider
what the essential features of the shape are.
If any of the essential features of the shape
provide a technical function, the mark will
not be registrable. However, the technical
features must be evident from the graphical
representation of the trademark, (which was
not the case with the Rubiks Cube since it
was not clear that the pieces moved), or be
apparent from what can be clearly inferred

from the graphical representations, as was
the case with the Lego brick.
A shape mark can be a powerful monopoly
if you get the registration right. However,
due to the potential for this to inhibit
competition, its scope is limited. For example,
in the case of the Rubiks Cube, the shape
mark will not prevent others manufacturing
3D rotatable puzzles except where they
use the grid shape shown in the graphical
representation. Further, the owner of a mark
depicting a scrabble tile was unsuccessful
in preventing the invalidation of its mark.
The mark was said to consist of a threedimensional ivory-coloured tile on the top
surface of which is shown a letter of the
roman alphabet and a numeral in the range
1 to 10. The Court of Appeal held that
this mark was not a sign, since it could
potentially cover many signs achievable
by numerous permutations, presentations
and combinations.2 Therefore, consider
carefully whether a shape mark will give the
protection sought.
Footnotes
1. Case C-48/09.
2.
JW Spear & Son Ltd and Ors v Zynga Inc [2013]
EWCA Civ 1175.
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February 2015
Opinion
TRADEMARK TALK
Taste tactics
The US Patent and Trademark Office has yet to approve a taste trademark for
registration. Anjie Vichayanonda explains how to acquire and enforce such rights
Anjie Vichayanonda
Remember that scene from Willie Wonka

& the Chocolate Factory when Willie
Wonka debuts the lickable wallpaper
in his chocolate factory? Soon, your
favourite brands may also use your
taste to appeal to you. Brand owners
are testing the boundaries of trademark
law by using non-traditional trademarks
such as scents, sounds, textures, and
even taste, to identify and distinguish
their products. A London-based cookie
company, McVities, loved Willie Wonkas idea
so much that it ran an advertising campaign
introducing the Lickable Lift, an elevator
lined with lickable wallpaper containing 1,325
individual lickable stickers in varying McVities
Jaffa Cookies flavours.1 In 2013, Fanta ran a
Fanta-orange flavoured magazine print ad that
was entirely edible.2 A company named Mogo
makes flavoured mouthguards for athletes.3
Taste trademarks (also known as gustatory
marks or flavour marks) present a wide
range of registration and enforcement issues,
because they are more difficult to define than
word marks or logos.
Registration
In the US, the broad definition of trademarks
in the Lanham Act encompasses nontraditional trademarks such as fragrances,
sounds, and tastes. Section 45 of the
Trademark Act defines a trademark as any
word, name, symbol, or device, or any
combination thereof that identifies and
distinguishes the products of a person from
those of another and indicates their source.4
The legislative history of the Trademark Act
explains that the words symbol or device
were included in the statute so as not to
preclude the registration of colours, shapes,
smells, sounds or configurations where they
function as trademarks. Although there is
no express statement in the Lanham Act or
its legislative history that taste or flavour

can function as a trademark, there is similarly
nothing precluding the possibility of trademark
protection extending to such indicators.5
There are, however, two significant hurdles
facing an applicant seeking to register a taste
trademark. The US Patent and Trademark
Office (USPTO) and the Trademark Trial and
Appeal Board (TTAB), the administrative
board responsible for reviewing the USPTOs
decisions on registration, have refused
registration of taste marks on two grounds:
(1) the mark sought to be registered does not
act as a source identifier under Sections 1, 2,
and 45 of the Lanham Act,6 and (2) the mark
sought to be registered is functional under
Section 2(e)(5) of the Lanham Act.7
Functionality
A mark is functional if it is essential to the use
or purpose of the product or if it affects the
cost or quality of the product.8 Determining
functionality is a question of fact, and depends
on the totality of the evidence in each case.
The TTAB and the Federal Circuit, the TTABs
primary reviewing court, use the four MortonNorwich9 factors in determining whether a
mark is functional. For taste marks, those
factors are:
1) The existence of a utility patent disclosing
the utilitarian advantages of the taste;
2) Advertising materials in which the
originator of the taste touts the tastes
utilitarian advantages;
The availability to competitors of
3)
functionally equivalent tastes; and
4) Facts indicating that the taste results in a
comparatively simple or cheap method of
manufacturing the product.10
However, the Federal Circuit has also held that
if the mark to be registered is plainly essential
to the use or purpose of the product or if it
affects the cost or quality of the product, there

is no need to even assess the Morton-Norwich
factors.
In one of the first TTAB cases involving
taste marks, the TTAB found an orange
flavour was functional and thus ineligible
for registration for pharmaceuticals for
human use, namely, antidepressants in quickdissolving tablets and pills.11 The TTAB found
that the second and third Morton-Norwich
factors overwhelmingly weighed in favour of
a finding of functionality, while the first and
fourth factors were neutral. The applicants
advertising and promotional materials touted
the utilitarian advantages of the orange
flavour of its antidepressants. Although
the orange flavour did not increase the
effectiveness of applicants antidepressants in
a chemical way, the orange flavour indirectly
increases the efficacy of the medication
by making it easier to take the pill. The
evidence also showed that orange flavour was
consistently used in the pharmaceutical trade,
and applicant promoted its orange flavour as
being better than others.
Ability to function as a trademark

The statutory definition of a trademark requires
a direct association between the mark and the
products identified in the application, ie, the
mark must be used in such a manner that
would be readily perceived as identifying such
products.12 The TTAB has expressed a deep
skepticism that consumers will perceive taste
as an indicator of source. The board has held
that taste is generally seen as a characteristic
of products and not an identifier of the source
of the products, thus, as in the cases of colour
and scent, a taste can never be inherently
distinctive. Therefore, any registration of
a taste requires a substantial showing of
acquired distinctiveness.13 The TTAB has
only issued two opinions concerning taste
Anjie Vichayanonda is a trademark and copyright attorney at Kelly IP. Her practice encompasses all aspects of trademark and copyright
law, including counselling, prosecution, enforcement, and litigation.
February 2015
Opinion
trademarks and both involved applicants that
applied for taste marks for pharmaceuticals.14
In both cases, the board found that consumers
would most likely believe that the taste was an
inherent characteristic of the pharmaceuticals,
because of the widespread use of flavours to
enhance the palatability of pharmaceuticals in
the industry.
The USPTO has yet to approve a taste
trademark for registration. In addition to the
pharmaceutical cases discussed previously,
the only other applications involving taste or
flavour marks were for non-alcoholic flavoured
beverages. Those applications were rejected
for functionality because flavour is a general
characteristic of beverages.
The TTAB
has expressed
a deep skepticism
that consumers
will perceive taste
as an indicator
of source.
Beyond the issues of functionality and
distinctiveness, the TTAB has identified several
other issues that may hinder in the registration
of taste marks. Specifically, taste may be
perceived differently by each consumer, so
defining a taste mark may prove difficult.
Also, examination of a taste mark would be
problematic because it would be difficult to
consistently describe and evaluate tastes.
From a purchasing standpoint, it may also be
difficult for consumers to recognise the taste
of a product as its trademark, as the consumer
generally has no access to the products taste
prior to purchase.15
Enforceability
Enforcing a taste trademark may also be
difficult for brand owners because they must
overcome the obstacles of proving that the
taste mark is not functional, establishing that
the taste mark is distinctive, and proving that
a rivals use of a similar taste would be likely to
cause confusion. In an early case, the Supreme
Court of the US held that chocolate flavour
could not function as a source-indicator for
pharmaceuticals.16 The court found that
the chocolate flavour has no therapeutic
value; but it supplies the mixture with a
quality of palatability for which there is no
February 2015
equally satisfactory substitute, therefore the

chocolate flavour serves a substantial and
desirable use, which prevents it from being
a mere matter of dress. The Supreme Court
identified a key concern at issue under the
functionality doctrine, which is the necessity of
preventing one producer from monopolising
a product quality for which there are few or
limited substitutes.
Recently, New York Pizzeria, Inc, sued a
rival, Ginas Italian Kitchen, in the US District
Court for the Southern District of Texas,
alleging that it had trademark rights in the
taste of its pizza, chicken parmesan and baked
ziti, among other claimed rights.17 The court
dismissed the case holding that New York
Pizzeria could not acquire trademark rights in
the taste of its food products because taste is a
functional feature of food. The court reasoned
that in the case of food, it is likely that its taste
or flavour could never function as a trademark
because taste and flavour is a main attribute
and natural characteristic of the product.
Developments in the law and

practice tips
Although a taste mark has yet to be registered
before the USPTO, lessons learned from
the registration of scent or fragrance marks
provide useful guidance to those seeking
registration of taste marks. Scent marks have
faced many of the same hurdles as taste
marks, but the USPTO has granted registration
of scent marks.
Two key lessons can be learned from
the prosecution history of US Registration
No 4057947. In 2009, Moroccanoil, Inc,
(Moroccanoil) applied to register a high
impact fragrance primarily consisting of
musk, vanilla, rose, and lavender for hair
conditioners, namely, curl creams, hydrating
styling creams, intense moisturising masques,
and styling and finishing oils on the Principal
Register under Section 1(a) of the Trademark
Act, claiming a date of first use of 1 January
2007. The examining attorney issued an
office action refusing registration because
the applied-for mark failed to function as a
mark and was functional. Morrocanoil and
the examining attorney jousted back and
forth on these issues for several rounds over
whether the applied-for mark had acquired
distinctiveness, such that it served to identify
and distinguish the applicants products. To
satisfy its burden of providing substantial
evidence
of
acquired
distinctiveness,
Moroccanoil submitted hundreds of pages of
evidence, including over 300 declarations from
consumers testifying to their recognition of the
mark as a source identifier. Moroccanoil also
submitted evidence that its products bearing
the applied-for scent had been sold in 78,667
Opinion
of the 215,333 salons selling hair care products
in the US, thus achieving roughly a significant
market share. Ultimately, Morrocanoil
persuaded the examining attorney that the
applied-for mark had acquired distinctiveness
under Section 2(f) of the Lanham Act and the
mark proceeded to registration.
Like Morrocanoil, an applicant seeking
to protect and register a taste trademark
should consider selecting a unique blend of
tastes to identify and distinguish its products
and services. Secondly, the applicant should
maintain sales and advertising records to build
a case of acquired distinctiveness. Further,
the applicant should be prepared to fight a
formidable battle to register the mark that may
require significant time and expense. Just like a
scent mark, the amount of evidence required
to establish that a taste or flavour functions as
a trademark is substantial. From a practical
standpoint, prosecuting an application for
a taste trademark will likely involve several
rounds of office actions and possibly even a
request for reconsideration or TTAB appeal.
An applicant for a taste trademark may
also consider selecting a well-known taste
for a product that does not generally emit a
taste. If others in the same industry are not
using tastes or flavours for the same product,
it will be easier to establish that the taste of
the product is not functional. For example, an
individual doing business as Manhattan Oil
obtained US Registration No 2463044 for a
cherry scent used for synthetic lubricants
for high performance racing and recreational
vehicles. In support of its claim that the mark
had acquired distinctiveness, the applicant first
claimed that the mark had been in use for
five years. The Lanham Act provides that the
USPTO may accept as proof of distinctiveness
a claim that the trademark owner has made
substantially exclusive and continuous use of
the mark in commerce for five years. However,
the examining attorney has the discretion to
require more evidence to support the claim of
acquired distinctiveness. As explained earlier,
for scent and taste trademarks, the amount
of evidence necessary to establish acquired
distinctiveness is substantial, so it is unlikely
that a claim of five years use alone will be
sufficient. In further support of its claim for
acquired distinctiveness and in response to
the examining attorneys arguments that the
mark did not function as a trademark and was
functional, Manhattan Oil submitted evidence
that the mark had been in use for six years and
that no other competitor used a cherry scent
or any other fragrance for vehicle lubricant. It is
unclear from the prosecution file history what
other evidence was submitted. However, the
examining attorney eventually approved the
mark for publication.
Similarly, for a taste trademark, a claim

of five years of substantially exclusive and
continuous use alone would likely be
insufficient to establish acquired distinctiveness.
The applicant of a taste trademark should be
prepared to provide evidence of acquired
distinctiveness as explained previously, and
refute arguments that the mark is functional
or fails to function as a trademark. Evidence
that no other competitors use a taste for the
same products would help demonstrate that
the taste is not a functional feature of the
product and that consumers would not expect
the taste to be a characteristic of the product.
Moreover, if the applicant does not believe
that it has enough evidence to establish
acquired distinctiveness, and it would like to
obtain a registration on the Principal Register,
the applicant may consider filing an intentto-use based application and later on file an
amendment to allege use or a statement of
use and amend the application to make a
claim of acquired distinctiveness when it has
gathered sufficient evidence.
Further, the
applicant should
be prepared to fight
a formidable battle
to register the mark
that may require
significant time and
expense. Just like
a scent mark, the
amount of evidence
required to establish
that a taste or
flavour functions
as a trademark is
substantial.
Finally, a handful of scent trademarks

currently exist on the Supplemental Register,
which allows for registration of marks that
are not currently eligible for registration on
the Principal Register, but may eventually
be capable of distinguishing an applicants
February 2015
products or services. Generally, applicants

should always try to seek registration on the
Principal Register before seeking registration
on the Supplemental Register, because marks
registered on the Supplemental Register do
not enjoy the same benefits of registration. For
example, a Supplemental Registration does
not provide the owner with the presumptions
of validity, ownership, and exclusive rights
to use the mark. Further, an application for
registration on the Supplemental Register
is an implied admission that the term is
not inherently distinctive, which may be
problematic for the marks enforcement.
Comment
The law and practice relating to taste
trademarks remains largely undeveloped in the
US, so there is great opportunity for growth.
As trademark owners continue to chart new
territory in this area, they should navigate
carefully through the issues of functionality
and distinctiveness, as they develop the
strategy for marketing their taste trademarks
to consumers.
Footnotes
1. h t t p : / / w w w . d a i l y m a i l . c o . u k / n e w s /
article-2130829/Need-mood-lift-Office-firminstall-worlds-LICKABLE-elevator-lined-1-325Jaffa-Cakes.html
2. http://www.adweek.com/adfreak/fantaflavored-print-ad-probably-not-quite-tasty-orrefreshing-fanta-itself-147567
3. http://www.mogosport.com/mogo-technology
4. 15 USC 1127.
5. 15 USC 1051 et seq; S Rep No 100-515, at
44, 100th Cong, 2d Sess (1988).
6. 15 USC 1051, 1052 and 1127.
7. 15 USC 1052(e)(5).
8.
TrafFix Devices Inc v Mktg Displays Inc, 523 US
23, 58 USPQ2d 1001, 1006 (2001).
9.
Framework to assess whether a trademark
comprises matter that is merely functional.
10. In Re NV Organon, 79 USPQ 2d 1639, 1645
(TTAB 2006) citing In re Morton-Norwich
Products, Inc, 671 F 2d 1332, 213 USPQ 9, 1516 (CCPA 1982).
11. In Re NV Organon, 79 USPQ 2d 1639 (TTAB
2006).
12. Id at 1649.
13. Id.
14. In Re Pohl-Boskamp Gmbh & Co, 106 USPQ
2d 1042 (TTAB 2013) (holding the distinctive
flavour of peppermint not registrable for
pharmaceutical nitroglycerin); In Re NV Organon,
79 USPQ 2d 1639, 1649 (TTAB 2006).
15. In Re NV Organon, 79 USPQ 2d at 1650.
16. William R Warner & Co v Eli Lilly & Co, 265 US
526 (1924).
17. New York Pizzeria, Inc v Syal, No 3:13-CV-335,
112 USPQ2d 1610, 1611 (SD Tex 2014).
Opinion
COPYRIGHT COMMENT
Judicial review of
UK private copying
exception
Ben Gisbey
Dorothea Thompson
The Musicians Union, among others, have applied for a judicial review of the UKs private copying
exception. Ben Gisbey and Dorothea Thompson examine what it could mean for consumers
On 1 October 2014, the Copyright and
Rights in Performances (Personal Copies
for Private Use) Regulations 2014 came
into force, implementing Article 5(2)(b)
of the Copyright Directive (2001/29/EC)
(the InfoSoc Directive) to provide, for
the first time in UK law, an exception to
copyright infringement for the purposes
of private copying.
The UK exception, inserted at section
28B of the Copyright, Designs and Patents
Act 1988, allows individuals to lawfully copy
for private, non-commercial use, copyright
works (except computer programs) that they
have previously bought or been gifted on a
permanent basis. While the exception also
covers making back-up copies and cloud
storage, the main thrust of the exception is to
permit format-shifting, such as the copying
of CDs onto MP3 players and hard drives.
Further details of the exception are outlined
in our previous article: Musical Chairs
(Intellectual Property Magazine, 5 November
2014).
Judicial review
In November 2014, shortly after the
exceptions introduction, the Musicians Union
(MU), the British Academy of Songwriters,
Composers and Authors (BASCA) and industry
body, UK Music, announced their application
for judicial review of the UK governments
implementation of the exception, claiming
that it contravened the Directive.
Article 5(2)(b) of the Directive permits

member states to introduce a private copying
exception; but this is on condition that
rightsholders receive fair compensation.
Fair compensation is not defined in the
Directive and has been interpreted differently
across the EU. Most member states have
developed schemes of levies applied to media
(eg, blank CDs) and equipment (eg, CD-R
UK Music sought
to refute the
governments position
on this issue in its
response to the
2012 consultation,
arguing that a charge
for private copying is
not factored into the
price of a CD.
drives, MP3 players) that enable the making of

private copies. In contrast, the UKs exception
is not accompanied by any compensation
scheme. Furthermore, the Explanatory
Memorandum (the Memorandum) which
accompanies the implementing regulations,
makes clear that the government has no
intention to introduce private copying levies
as exist elsewhere.
It is on this basis that the claimants are
seeking judicial review. While they support
the introduction of a private copying
exception to allow consumers to copy legally
bought music for their own personal and
private use, they claim that the absence of
any provision for the payment of additional
compensation contravenes the requirement
under the Directive that rightsholders receive
fair compensation. They are therefore
seeking an amendment to the law to provide
compensation to rightsholders.
UK governments position
In the Memorandum, the government states
that although certain general principles
apply when determining fair compensation
and its payment, member states have
discretion over the details. It then goes on
to argue that a compensation scheme is not
necessary, placing particular emphasis on
the parts of Recital 35 of the Directive that
state that where rightholders have already
received payment in some other form, for
instance as part of a licence fee, no specific
Ben Gisbey is a senior associate and Dorothea Thompson is a trainee solicitor at Bray & Krais. Gisbey specialises in advising on both
corporate and commercial matters for the firms varied client base in the media and entertainment sector. Thompson assists across
all areas of the commercial music and entertainment practice.
February 2015
Opinion
or separate payment may be due and that in

certain situations where the prejudice to the
rightholder would be minimal, no obligation
for payment may arise.
The governments position is therefore
that, on the basis of the Recital, no
compensation scheme is needed because (i)
payment for private copying has already been
priced-in to relevant media when it was
originally purchased and (ii) the UK exception
has been narrowly drawn so that it does not
cause harm to rightsholders (or at most may
cause only minimal prejudice).
Compensation priced-in
The government argued in the 2012 report
Modernising Copyright, its response to
consultation on proposed exceptions and
clarifications to copyright law, that the ability
to make private copies, can be, and often is,
factored in at the point of sale. In support of
this, they refer to the fact that digital rights
management (DRM)-free music downloads
were sold at a higher price when they were
first introduced, albeit that many online stores
have since reverted to standard pricing for
DRM-free music. They go on to say that some
consumers say they would not buy CDs at all
if they were physically unable to format-shift
them to their personal media devices and
to some extent, the value that consumers
gain from being able to make personal copies
will be factored into the market via positive
effects on prices and demand.
UK Music sought to refute the
governments position on this issue in its
response to the 2012 consultation, arguing
that a charge for private copying is not
factored into the price of a CD and that current
economic realities prevent rightsholders from
doing so. They also seek to draw a distinction
between copying under a licence (eg, an
iTunes download), which is priced in, and
copying that is not (eg, a CD).
not own. Such exceptions, the government

concedes, clearly could lead to harm to
rightsholders as lost sales, so compensation is
required in that context. However, they argue
that because the UK exception is narrowly
drawn, being limited to private copying for
personal use only by an individual that already
owns a copy, such harm is prevented. The
government states that the purpose of the
UK exception is to make lawful a practice
that is both commonplace and regarded as
reasonable by the public and, given that few
people purchase two copies of the same
content and that historically rightsholders
have not taken action against private copying,
they therefore maintain that the activity is
unlikely to cause any harm to rightholders and
may even provide a benefit, by making copies
more useful and attractive to consumers.
The government
will be mindful that
consumers are
likely to see any levy
as a charge to do
something that they,
rightly or wrongly,
have always done
and that such a levy
is unfair.
Narrower exception
The purpose of fair compensation in the
context of the private copying exception was
considered by the Court of Justice of the
European Union (CJEU) in Padawan v SGAE
(C-467/08) and ACI Adam BV v Stichting de
Thuiskopie (C-435/12), where the CJEU said
that it is to provide recompense for harm
suffered by rightsholders.
In the Memorandum, the government
differentiates the UK private copying exception
from that of other EU member states which
have levy systems, on the basis that they have
wide private copying exceptions that often
allow the making of copies for friends and
family and from sources the individual may
The claimants argue that, where the

right to license is removed, rightsholders
should be compensated. Given their and
other opponents argument that payment
for private copying has not already been
priced in, and that private copying to cloud
locker services (which is permitted by the
exception) will affect the industrys ability to
agree licensing terms with such services, and
therefore the loss of that revenue stream, they
claim that the exception will cause harm to
rightsholders.
February 2015
Comment
Whether or not the UK implementation of the
private copying exception is in compliance with
European law seems likely to be a question for
the European courts. In Padawan, the CJEU
stated that fair compensation must be
interpreted uniformly throughout the EU; but
practice in other member states will provide
little coherent guidance for the government
if it is required to introduce a compensation
system. French levies are significantly higher
than in other member states; the Finnish
government has voted to replace the levy
system with a government compensation
fund; and Spain has referred questions to
the CJEU asking whether compensation via
public grants from the state budget instead
of its current levy scheme is compliant with
the Directive. There is also no uniformity over
whether electronic devices are included, with
France recently confirming levies on digital
tablets and the Dutch government agreeing
to pay 33.5m in damages to the Dutch
Foundation for Private Copies, to settle a claim
that the private copy levy had been too low to
qualify as fair compensation, as it had only
been levied on CDs and DVDs and not devices
on which copies were made.
If the exception is not found to be in
compliance with the Directive, it remains
to be seen how the UK government will
act. Repealing the exception so that a large
proportion of the public are frequently in
breach of copyright seems undesirable.
Although, the alternative of introducing a
form of levy system brings its own problems.
Limiting the levy to physical media such as
blank CDs would be outdated, applying it to
technology such as MP3 players and tablets
is likely to be strongly resisted by the tech
lobby and a public grant or compensation
fund seems unlikely in these times of
austerity. Furthermore, the government will
be mindful that consumers are likely to see
any levy as a charge to do something that
they, rightly or wrongly, have always done
and that such a levy is unfair, as it would
apply indiscriminately to consumers whether
or not they are using their laptop/tablet/
smartphone for private copying.
In our last article, we suggested that
the public may be unlikely to notice much
of a change following the introduction of
the private copying exception, given the
prevalence of format shifting that already
existed. However, this may cease to be
the case if the result of the judicial review
is the imposition of a levy, as whatever its
form, consumers are likely to see it as an
additional charge, rather than a payment
for a new right.
Opinion
COPYRIGHT COMMENT
Undressing the
design copy issue
Tribal wars: a review of John Kaldor Fabricmaker v Lee Ann Fashions
The John Kaldor Fabricmaker UK Ltd v
Lee Ann Fashions Ltd1 decision highlights
the difficulties a designer can face when
trying to enforce unregistered IP rights, as
a result of the requirement that the design
must have been copied for infringement
to have taken place.
The case
John Kaldor, a fabric design house, produced
the JK Fabric2 and supplied it to Lee Ann in
August 2012, based on a brief Lee Ann had
received from Marks & Spencer for the Per
Una Spring/Summer 2013 collection, the brief
including a request for tribal prints.
Lee Ann ultimately succeeded in supplying
dresses for this collection, but the JK Fabric
was not used. In February 2013, John Kaldor
became aware of a dress3 sold in the Per Una
range made out of the LA Fabric, which had
been produced and supplied by Lee Ann. John
Kaldor alleged that this LA Fabric infringed
the copyright of the JK Fabric design and the
unregistered Community design right.
In line with the streamlined ethos of the
Intellectual Property Enterprise Court (IPEC),
there were just two issues to be examined
at trial: the first was whether the designer of
the LA Fabric, Mrs Vance, had copied the JK
Fabric; and the second was whether the other
requirements for infringement were met.
For the purpose of copyright infringement,
this entailed whether Vance had copied a
substantial part of the design. For the
purpose of design infringement, the second
issue was whether the LA Fabric design does
not produce on the informed user a different
overall impression to that of the JK Fabric.
The claimant alleged infringement under
three hypotheses: conscious copying, where
Vance had knowingly copied the JK Fabric;
subconscious copying, where she had seen
the fabric but unknowingly copied it; and
indirect copying, where she had not seen the
fabric but where oral instructions she received

amounted to a description of it.
The defendant presented evidence from
Vance describing how she had started from
a general design brief rather than specific
instructions, adopting previous tribal prints from
her computer archive to create the LA Fabric.
Referring to Stoddard International v
William Lomas Carpets Ltd,4 Hacon J explained
that where a strong prima facie case of
copying can be inferred from the similarities
between the two designs, the defendants
evidence to rebut that inference must also be
strong. However, where the similarities lead
to a weaker prima facie argument, less of a
rebuttal will be necessary.
It was decided that there was a prima facie
possibility of copying, but that this possibility was
neither strong nor negligible, so the standard of
evidence required from the defendant to prove
independent creation was low.
Hacon J took the view that while it was
possible that Vance had seen the JK Fabric, there
was no evidence to support this. On the other
hand, he found her clear evidence sufficient
to conclude that she created the LA Fabric
independently, not copying the JK Fabric. The
claim for copyright infringement was therefore
dismissed. As was the claim for infringement
of unregistered Community design which also
relied upon copying having taken place.
Although the consideration of whether
asubstantial part of the JK Fabric had
been copied was not needed in this case,
Hacon J helpfully set out a framework for
copyright infringement comprising eight steps
to be followed, including steps taken from
Designers Guild Ltd v Russell Williams (Textiles)
Ltd5 relating to this requirement.
Practical implications
Building upon previous copyright decisions
such as Stoddard, this decision confirms the
relationship between the standard of evidence
Robert Watson
Emma Graham
required by a defendant to prove independent

creation and the level of similarities between
two designs. Where the level of similarities
between two designs give rise to a prima facie
possibility of copying which is neither strong nor
negligible, the decision is likely to depend on
the evidence of independent creation provided
by the defendant but the standard required for
this evidence is low.
This puts the defendant at an advantage as
it is difficult for a claimant to provide arguments
which counter this low standard.
Crucial to Lee Anns success was the fact
that the designer, Vance, had kept a record
of the design process, describing the steps by
which she arrived at her design independently.
As well as recording a design at its date of
creation, designers should aim to save records
at various stages of the development of their
designs, enabling the independent creation of
the design to be recounted from start to finish.
In this case, the instructions Vance received
were given over the telephone, so there was no
record of the nature of the instructions which
she claimed to be a general design brief. The
nature of the instructions was of some dispute
due to the allegation of indirect copying. Due to
the low level of evidence required, this was not
probed in detail. Had the judge decided that
there was a strong likelihood of copying based
on the design similarities, this evidence would
have been useful. Lee Ann would have been
in an even stronger situation had the general
nature of the instruction been recorded.
Footnotes
1. [2014] EWHC 3779 (IPEC).
2. Id 1. The JK Fabric can be found in the decisions
Annex section, under Annex 1.
3. Id. See Annex 2 of the decision.
4. Stoddard International v William Lomas Carpets
Ltd [2001] FSR 44, at [17].
5. Designers Guild Ltd v Russell Williams (Textiles)
Ltd [2001] A11 ER 700; [2001] FSR11 (HL).
Robert Watson is a partner and patent attorney at Mewburn Ellis, joining in 1995. Emma Graham is an associate and patent attorney who
joined the firm in 2009.
February 2015
FOCUS ON
Generic top-level domains

(gTLDs)
Who is winning the cybersquatter battle?
February 2015
Focus on gTLDs
Brand strategies
in the new gTLD era
French law firm FIDAL recently undertook a survey about the IP issues related
to new top-level domain names (TLDs). Alexandre Nappey explores the strategies being
used by trademark owners to prepare for the digital reforms
ntil recently, website addresses

usually ended with a .com or
a country code top-level domain
(eg .fr) these were the most
popular TLDs among French
companies, out of the 300 TLDs that exist.
The international authorities, primarily ICANN
(Internet Corporation for Assigned Names
and Numbers), have long been looking for
ways to open up the domain name system.
Therefore, ICANN began an extensive reform
in 2008 to allow any operator to become
an ICANN-accredited registrar. While 500
applications were expected, almost 2,000
were filed in 2012 alone. Now, over 480 new
TLDs are already operational and a further
1,000 new TLDs are expected to be released
over the next two to three years.
From now on, .paris, .clothing,
.email, .restaurant are just some of the

alternative names for designating websites
and email addresses. However, this digital
revolution offers businesses as many risks as
it does opportunities, as it will multiply their
chances of suffering an online infringement of
their rights.
It is in this context that FIDAL conducted
a survey among its clients to find out how
their domain name portfolios are currently
structured and managed and what they know
and intend to do in view of the changes in the
Internet naming system.
Main results of the survey

Companies are informed about this
digital revolution but not aware of the
risks it entails
A large majority of the surveyed companies
February 2015
(64.9%) say they are informed about the

launch of several hundred new top-level
domain names. However, 57.4% admit
not having assessed the risks related to this
launch, the most significant of which being
cybersquatting. Also, 95% of the survey
participants admitted not having carried out
an audit on this subject.
A majority of companies plan to register
any new domain names during the course
of this programme in order to optimise
their positioning on the internet
Considering the interest of this programme,
its seems essential for companies to lay
down the first building blocks of an online
communication policy as soon as the new
gTLDs are launched, and to then fine-tune this
policy as and when each new TLD is planned
Focus on gTLDs
for release. This prerequisite will prevent the
domain names that a company wants in a new
TLD from being reserved by a third party.
What monitoring and what measures in
the event of a dispute?
85% of the companies surveyed have not
set up any monitoring to detect online
infringement of their trademarks. In the
current context of the massive launch of
new domain names, not using a trademark
monitoring tool is a sizeable risk factor for
businesses, particularly in detecting fraudulent
reservations by third parties.
What defence solution?
Lastly, in the event of a dispute, 56.1% of
the companies declared they would prefer
an amicable transfer, as this solution has the
advantage of retrieving the domain names
registered fraudulently more quickly and at a
lower cost. In 26.3% of cases, the companies
opt for legal action or extrajudicial action such
as Uniform Domain-Name Dispute Resolution
(UDRP).
Last developments in the programme
In the first days of 2015, new gTLDs
registrations have topped 4m registrations
(among 280m domain name registrations
worldwide, including the whole TLDs like
.com). According to the specialists, more
than 25% of these are free domain name
registrations granted by the registries to
boost their extension and benefit from
media coverage (eg .xyz). Most of these
names may not be renewed when they come
to expiry and therefore a relevant analysis will
not be available on this topic before the middle
of 2015.
Nonetheless, the city TLDs are quite
successful (ie .nyc, .berlin, .london, .paris) and
a couple of famous cities around the world
have already announced their intent to apply
during the next ICANN round for new gTLDs
(in 2017 or late).
That is indeed the biggest scoop during the
last months: in a report released in September
2014, ICANN reveals that it will open a second
round for new gTLDs applications, probably
not before 2018, unless it would be urged to
do so by cities, communities or brand owners
that missed the current round.
A look at the recent trend of alternative
dispute resolution mechanisms reveals an
increase in domain disputes. According to the
statistics published by the World Intellectual
Property Organization Arbitration and
Mediation Center, which handles a majority
of domain name disputes, there were 2,634
cases filed in 2014. Not a record like the 2,885
cases of 2012 but a top three millesime.
In the current
context of the
massive launch of
new domain names,
not using a trademark
monitoring tool
is a sizeable risk
factor for businesses,
particularly in
detecting fraudulent
reservations by
third parties.
Even if new gTLDs were already involved in

UDRP cases last year, it is not possible to make
a direct connection at first sight between these
and the whole number of cases.
At last, it should be noticed that the Uniform
Rapid Suspension (URS) has had a good start
with more than 200 cases in 2014 (before the
NAF and the ADNDRC), almost 90% of which
have ordered the suspension of the domain
name in issue. The URS seems to have the
opportunity to become a real alternative to
the UDRP, even if a higher threshold of proof is
placed on the complainant (ie proof of use of
the trademark opposed, extension taken into
consideration during the comparison between
the trademark and the challenged domain
name). Upcoming decisions in the next
months will be deeply analysed to establish the
real burden of proof in both UDRP/URS.
Footnote
1.
About the survey: 255 companies took part
in the survey during the first half of 2014
and answered a series of 18 questions. The
companies industry sectors: 35% of the
surveyed companies operate in the services
industry (mainly B2B), followed by the retail
(19.1%), manufacturing (non-food) (17.9%),
construction / real estate (6.8%) and food
(5.6%) sectors. Companies headcount: 55%
of the survey participants are from companies
with less than 49 employees, compared to 45%
from companies with over 50 employees. Visit
www.fidal.com/ for more information.
February 2015
Author
Alexandre Nappey
is a lawyer at
FIDAL. He has 15
years experience in
IP/IT law.
He works for major
companies and
entrepreneurs in
the protection,
management and defence of their
assets in the digital world: trademarks,
domain names, software, cyberpiracy,
e-business, social media, data privacy.
Alexandre also serves as an expert with
the WIPO Arbitration and Mediation
Center (Geneva).
He regularly publishes articles and
speaks IT law in conferences and as a
lecturer in various law schools.
Focus on gTLDs
Developing a
defensive domain
name strategy
With cybersquatters still on ongoing problem,
Gary McIlraith explains how to establish
a domain name strategy that works
t is hard to believe that the first public

domain name, Symbolics.com, was
registered only 30 years ago. Today
there are over 270m domain names
representing some of the worlds biggest
brands and the internet is a global economy
worth trillions of dollars.
Growth in domain names has been
relatively constant since their launch but
in recent years, as the number of relevant
and meaningful domain names have been
exhausted, growth has slowed. In response to
the shortage in domain names, the Internet
Corporation for Assigned Names and Numbers
(ICANN) announced in 2012 that it would be
granting permission for brands to create their
own suffixes called generic Top Level Domains
(gTLDs), such as .bank, .hotel and .shop.
The first round of gTLDs began launching
last year and a recent study by NetNames
found that 92% of large companies have
already, or are planning to, invest in these new
domain names. It is therefore important that
businesses take the time to recognise that this
opening up of the internet means they will be
faced with both threats and opportunities.
This change to the internets addressing
system means that businesses will have to
work even harder to protect their valuable
The challenge for brands
NetNames recently
found that 92% of
companies said they
recognise that there
are potential risks
associated with the
introduction of new
domain names.
online real estate, with cybercriminals poised

to take advantage of well-known brands
by exploiting their domain names. On the
other hand, brands have an opportunity to
reach wider audiences, optimise their digital
marketing strategies and ultimately use
gTLDs to their advantage in the fight against
fraudsters.
February 2015
Although the development of the internet

and the introduction of new domain
names have created many opportunities for
businesses, the risks have also grown. The
US Federal Trade Commission stated that,
the proliferation of existing scams, such
as phishing, is likely to become a serious
challenge given the infinite opportunities
that scam artists will now have at their
fingertips.
Businesses are certainly aware of this. In
its Internet 2020 report which surveyed 400
business leaders, NetNames recently found
that 92% of companies said they recognise
that there are potential risks associated with
the introduction of new domain names.
Furthermore, 97% said they would be
worried to some degree about keeping their
brand and trademarks protected.
Indeed, the internet is a vastly
unregulated space where any party can
register a website or domain name. With
new gTLDs, the opportunities for domain
name hijackers, cybersquatters, traffic
diversion and counterfeiting have all grown.
In fact, NetNames found that the primary
concern for businesses, with the launch of
Focus on gTLDs
gTLDs, was the threat of cybersquatters and
domain name hijackers with over a third
(36%) of businesses stating this.
Brands are right to be concerned. The
research also revealed that brands could
face serious consequences if they do not
protect their customers in this new online
environment. 78% of consumers said they
would shun a brand if they found themselves
on a bogus website pertaining to that brand.
Clearly this is not a time for businesses
to sit still. A defensive domain name
strategy is key for businesses to protect their
customers from falling into the hands of
online fraudsters and ultimately protect their
reputation and intellectual property.
Using domain names for

greater online security
Despite the challenges brands face there is
also the chance for businesses to use the new
domain names to their advantage. One of the
biggest opportunities to arise from the new
gTLD programme is the chance for businesses
to own their own .BRAND Top Level Domain.
By adopting a .BRAND domain name,
companies will be able to manage their own
space on the internet by effectively controlling
their own domain name registry. Furthermore,
domain names using a .BRAND format are
likely to become a natural starting point for
direct-type browser-based navigation and are
also likely to be given the highest relevance
in searches relating to companies and brands.
This approach will allow brands to
review current online security measures and
investments, unlocking new strategies and
potential cost savings. As a result, online
criminals will quickly turn their attention to
the brands without their own namespace.
A further advantage of a .BRAND domain
name is that only the brand can apply for its
.BRAND domain name, eliminating the risk of
cybersquatters who purchase a domain name
only to sell them on for a large sum.
The business benefits of taking a .BRAND
approach are therefore clear, starting with
greater security. Much like the businesses
that adopted online security measures early
on, companies using their own gTLDs will be
seen as safe harbours by internet users
and will be able to increase consumer trust
and brand loyalty dramatically. Businesses can
educate and reassure their customers that
if they find themselves on a .BRAND web
page, it is the genuine website. This could be
particularly useful for brands within securitysensitive sectors, such as financial services. For
example, if a consumer were to navigate to
myaccount.barclays, they could be confident
that they are not on a phishing website. The
ring-fencing of their online entity will ensure
that their brands reputation, customers,

trademarks and ultimately, revenues are
protected.
Gateway to new markets

The introduction of Internationalised Domain
Names (IDNs) as part of the new gTLD
programme signals the opening up of the
web to new markets and a big opportunity for
businesses operating, or looking to operate,
on a global scale. The vast range of new
addresses available, including geographical
TLDs such as .london, .nyc, and international
suffixes using Chinese, Russian and Arabic
characters, will allow businesses to tailor their
online presence and marketing campaigns to
reach new markets and audiences.
The vast range of new

addresses available,
including geographical
TLDs such as .london,
.nycwill allow
businesses to tailor
their online presence
and marketing
campaigns to reach
new markets.
The launch of the new IDNs effectively
opens up the web to a vast new portion of
the worlds population. Moving forwards,
organisations with web addresses in local
languages will be able to fully engage with
targets in those markets. This is particularly
important for businesses wishing to develop
a robust international domain name strategy,
making it easier to manage a brands web
presence and online identity across numerous
global markets and legal jurisdictions.
NetNames found that many companies will
be looking to do just this. One-third (33%) of
companies we surveyed said they have applied
or will apply for IDNs and among those
who have already started to invest in new web
address endings, more than half (52%) stated
that they have or will apply for IDNs.
Developing an effective domain

name strategy
In order to maximise benefits and minimise
threats, firms need to know their options and
ensure they are taking the correct precautions
February 2015
to protect their brand names and trademarks.

It is not cost effective to register every brand
domain name rather it is a case of balancing
the cost of registrations with the cost of taking
action against abuse (in terms of dispute
resolution process costs and legal fees) in a
thought out domain name strategy. There are
plenty of avenues for rights holders to review
and assess in creating a cost-effective gTLD
trademark policy program for their business.
Some may choose a balanced mix of proactive
and defensive registration, combined with
monitoring, or may choose to invest more in
one approach.
However, it is not just gTLDs which brands
want to use that should be registered. Brands
should also look to register domain names that
they do not want themselves associated with.
Suffixes such as .porn and .adult and opinion
gTLDs such as .sucks, are available and, if
adopted by fraudsters, can result in negative
associations with a brand. In addition, other
more unusual existing gTLDs (.asia, .biz, .info,
.jobs, .mobi and .pro), have also been found to
be commonly associated with cybersquatters.
As such, registering these domain names can
also be a good investment in order to prevent
damaging third parties from doing so, which
could ultimately lead to a tarnished reputation.
One thing is clear: businesses should
be well prepared for these changes to the
internet. It is still not too late to develop a
holistic gTLD strategy, even if companies
missed out on applying for new gTLDs in the
first round. ICANN has begun planning for
an eventual second round and if executed
correctly, a complete strategy should result
in a shift from costly, defensive domain
registrations to owning digital domain assets
that can demonstrate measureable return on
investment.
Author
Gary McIlraith joined
NetNames as chief
executive in January
2012. Prior to this he
was managing director
of Digital Channels,
International and
Group Strategy for
Ladbrokes.
Previously he was a managing director
with AlixPartners, responsible for the
firms European TMT practice; customer
operations director and an executive
board member of BSkyB; a partner with
KMPG where he led the firms UK Hi-Tech
practice; and an associate partner with
Accenture where he led major projects
in the TMT sector.
Focus on gTLDs
Cyberswatting: eradicating
domain name pests
Domain name governing body ICANN has been running its method of dealing with cybersquatters
since 1999, but how has it coped with gTLDs? Joanne Goodchild reviews its progress
he internet is growing at an
exponential rate with more and
more domain names coming on
line than ever before. Added to this
are the hundreds of new generic
top level domains (gTLDs) becoming available
as they are rolled out following the last round
of applications.1
The ease of obtaining a domain name
at low cost in the growing domain space
presents trademark owners with not just the
occasional conflicting interest but also the
prospect of battling against serial offenders,
who knowingly register domain names
incorporating trademarks of others for
commercial gain.
One in a million
The registration of domain names incorporating
other parties trademarks is nothing new. By
1999, conflicts between trademark holders
and domain name holders were becoming
more common. Procedures for resolving these
conflicts were costly and cumbersome, relying
A reasoned
decision was promptly
produced containing
an interesting insight
into the legal principles
developing within this
vastly overlooked area
of trademark law.
February 2015
on old trademark law to settle disputes in a new

virtual world. One of the challenges related to
use: the unauthorised use of a trademark is
the cornerstone of an infringement action but
where a third party simply registers a domain
name incorporating the trademark and does
not use it, an infringement argument based on
standard trademark principles could fail.
The leading case in this field was One in
a Million, heard ultimately before the Court
of Appeal in the UK in 1999.2 It involved
claims by British Telecommunications Plc,
Virgin Enterprises Ltd, J Sainsbury Plc, Marks
& Spencer Plc And Ladbroke Group Plc against
One in a Million Ltd, a dealer in internet
domain names. The dealer had registered
trademarks of these parties as domain names.
In those days, when members of the public
would not ordinarily have a domain name,3
domain name dealing was a new business
model that became popular very quickly. But
the law was slow to catch up.
The Court of Appeal was fortunate as
it could depend on common law principles
Focus on gTLDs
to resolve the matter rather than being tied
to considering the case within the confines
of statute. The Court held, inter alia, that
there while there was a threat of trademark
infringement (the use being in relation to
the services provided by the registrant who
traded in domain names) the domain names
themselves were instruments of fraud
any use of them would result in passing-off.
Although the conclusion was favourable
to the trademark holders, it was a long and
expensive road to relief.
UDRP closing the net

The Internet Corporation for Assigned Names
and Numbers (ICANN), set up in 1998 to
assume responsibility for internet address
space) recognised the need for a quick,
inexpensive resolution for domain name
disputes. The World Intellectual Property
Organization (WIPO) produced a report for
ICANN on the conflict between trademarks
and domain names, recommending that
a mandatory administrative procedure
concerning
abusive
registrations
be
established to provide a, neutral venue in the
context of disputes that are often international
in nature.4 This resulted in the Uniform
Domain Name Dispute Resolution Policy (the

UDRP) which was adopted by ICANN and
launched on 1 December 1999.5
The AA
Trademark
holders have only
to file a complaint
with WIPO and wait
two months to see
whether or not the
domain name
is to be transferred
to them.
UDRP Procedure
Trade Mark owner files complaint with the WIPO Arbitration
and Mediation Center (the Center)
2 Months
The Center transmits by

email to the Registar
a request for registrar
verification
Registrar transmits
by email to Center
its verification response
confirmaing that
Respondent is listed
as the registrant and
providing the
contact details
The Center verifies

that the formal
requirements filing
the complaint are
satisfied and formally
notifies Respondent
of the Complaint
Respondent has 1 month

to respond
Decision
February 2015
Recently, WIPO decided that the company

behind a business model based on the new
generic Top-Level Domain (gTLD) .email must
transfer its domain names to the owners of
the corresponding trademarks.6
The AA provides car insurance and
breakdown cover in the UK. The respondent
was an individual domiciled in the US. He
registered aa.email for use as a backend,
non-public email server for routing emails and
certifying email delivery. Unlike many domain
name registrants in cases before WIPO, he filed
a response, asserting that his was a legitimate
and lawful business model and that no-one
outside his business would see the disputed
domain name.
A reasoned decision was promptly
produced containing an interesting insight
into the legal principles developing within this
vastly overlooked area of trademark law.
Under the UDRP, the AA had to prove that:
(i) The disputed domain name is identical or
confusingly similar to a trademark or service
mark in which complainant has rights; and
(ii) The respondent has no rights or legitimate
interests in respect of the disputed domain
name; and
(iii) That the disputed domain name has been
registered and is being used in bad faith.
Identical/confusingly similar: The AA had
registered AA as trademark. It was entirely
incorporated in the domain name so theaa.
email was deemed confusingly similar.
Rights or legitimate interests: There was
no evidence that the respondent was known
by the disputed domain name or had made
legitimate non-commercial or fair use of it. The
panel considered only whether or not it was
used in connection with a bona fide offering
of goods or services. The registration of the
AAs trademark as a .email domain name was
because of its goodwill. Its use in a for-profit
business model was not considered a bona
fide offering conveying rights or legitimate
interests in the domain name.
Registered and used in bad faith: It was
not helpful to the respondent that his business
model had recently been the subject of several
other UDRP decisions he had also registered
the trademarks of many other well-known
businesses as domain names. Such a pattern
of conduct can demonstrate bad faith.
The term use is broadly interpreted
in UDRP cases and the WIPO Panel did not
struggle to reach the same conclusion as the
Court of Appeal in One In a Million, ie that the
Focus on gTLDs
1999 and has a large body of searchable
decisions. Although prior WIPO decisions
are not binding, they are often cited and are
likely to have a highly persuasive effect before
a panel. Including reference to favourable
decisions can only assist an application under
the UDRP as well as searching the database to
see if the registrant has already been a party in
other cases.
The UDRP is justifiably favoured in the UK
over passing off actions. Recent WIPO cases
show that the UDRP is meeting its target of
dealing with cybersquatters quickly. Trademark
holders have only to file a complaint with
WIPO and wait two months to see whether
or not the domain name is to be transferred
to them. Although court action can still be
brought, it might not be necessary as the
UDRP delivers a complete remedy removal of
the instrument of fraud from the hands of
the registrant.
Trademark owners wanting to avoid
falling victim to cybersquatters should
review their trademark portfolio regularly to
ensure that their registered trademarks are
up to date because the UDRP requires proof
of trademark rights from the outset. The
defensive registration of key trademarks as
domain names in relevant gTLDs should also
be considered as a preventative measure. If
nothing else, a domain name watch would be
advisable to stay informed.
unauthorised registration of the domain names

was wrong. Quite simply, the registration of a
domain name in order to prevent the owner
of a trademarkfrom reflecting the mark in
a corresponding domain name, provided that
[respondent] has engaged in a pattern of
such conduct is evidence of the registration
and use of a domain name in bad faith.
The domain name was also deemed to be
used passively since the whole purpose of
its registration was as the basis of a business
model operating for commercial gain. Given
WIPOs interpretation of use, this suggests
that an action should succeed even against the
mere parking of a domain name.7
Summary
The UDRP faces challenges in achieving a
predictable outcome whilst responding to
the evolution of the internet but WIPO has
processed over 30,000 cases since December
Although court
action can still be
brought, it might
not be necessary as
the UDRP delivers
a complete remedy
removal of the
instrument of fraud
from the hands of
the registrant.
February 2015
Footnotes
1. http://newgtlds.icann.org/en/program-status/
delegated-strings.
2.
British Telecommunications plc v One in a Million
Ltd [1999] 1 WLR 903.
3. Aldous LJ.
4. http://www.wipo.int/export/sites/www/amc/en/
docs/report-final1.pdf.
5. https://www.icann.org/resources/pages/policy2012-02-25-en.
6. Case No. D2014-1444.
7. http://www.wipo.int/amc/en/domains/search/
overview2.0/.
Author
Joanne Goodchild
is a senior associate
at Appleyard Lees.
Working in the
profession since
1997, she is a
vastly experienced
trademark attorney
and advises on all
trademark issues from conception and
clearance to protection, enforcement and
maintenance. She has a particular interest
in the online marketplace.
FOCUS ON
Asia
Fireworks in the figures:
why Chinas patent stats
will surprise everyone
February 2015
Focus on Asia
Updates from China

latest regulations on the
protection of privacy
Eugene Low reviews judicial regulations on issues arising from the infringement of privacy on the
internet and draft rules on sending unsolicited spam SMS to phone users within the region
he Peoples Republic of China

(PRC) does not yet have a
specific piece of legislation on data
privacy. A draft law on data privacy
was once tabled before the PRC
State Council for consideration in 2008, but so
far there has been no further news as to its
implementation.
At the moment, data privacy protection is
scattered around various laws and regulations
in the PRC, which touch on or indirectly address
data privacy. For instance, as a broad principle,
the PRC Constitution protects the personal
integrity of PRC citizens and the citizens
freedom and secrecy of correspondence.
Personal integrity is not legally defined but is
generally perceived to cover a wide range of
matters, possibly including privacy. In addition,
the PRC General Principles of Civil Law and its
judicial interpretations, recognise a citizens
rights to his name, image and reputation.
The disclosure of a citizens privacy (again not
legally defined) whether in writing or verbally,
is considered a breach of his right to reputation
if the disclosure creates a considerable adverse
impact.
In recent years, however, there is no
doubt that the topic of data privacy has been
catching the attention of the PRC government,
as we notice that there has been an increasing
number of legislation, regulations and judicial
interpretations in the PRC, which seek to
beef up the protection of data privacy from

different aspects.
In this article, we will look at one recent
judicial interpretation issued by the PRC
Supreme Court and a set of draft rules
regulating short message services (SMS)
issued by the PRC Ministry of Industry and
Information Technology (MIIT). These
developments demonstrate the efforts of the
PRC government in enhancing the protection
of data privacy, especially in relation to the
use of internet and mobile phones. Given
the prevalent and popular use of internet
and mobile phones for retail and marketing
purposes in the country, companies doing
businesses in the PRC should take heed of
these developments and review their data
privacy policy to ensure compliance.
Judicial interpretation on
infringement of civil rights by
the use of information network
The PRC Supreme Court issued this Judicial
Interpretation (effective from 10 October 2014)
to unify judicial practice of all national courts
hearing cases involving the infringement of
civil rights by the use of information network,
in particular infringement of a persons right to
his name, portrait, reputation and importantly,
privacy. In the context of data privacy, such cases
may involve the unauthorised disclosure of
ones sensitive personal data over the internet,
February 2015
including through the use of social media.

This Judicial Interpretation addresses
important practical issues such as where
can the infringer be sued, when an internet
service provider (ISP) may be joined, and
when a PRC court may order an ISP to disclose
details of a user.
The key provisions of the Judicial Interpretation
are summarised below:
Jurisdiction of local courts:
Under the Judicial Interpretation, an aggrieved
person potentially has a wide selection of judicial
forum to lodge a lawsuit. This may include
the local PRC court governing the infringers
domicile or the place of infringement. The place
of infringement in turn may include the location
of the computer server of the infringer or where
the consequence of infringement materialises,
ie, the domicile of the aggrieved person.
Joining an internet service provider (ISP):
The Judicial Interpretation follows the PRC Tort
Law and expressly allows the aggrieved person
to sue either the internet user, the ISP, or both.
In case the lawsuit is brought against only the
user, the user can apply to the court to join the
ISP as a joint defendant, and vice versa.
An ISPs duty of disclosure:
When the lawsuit is brought against the ISP
and the ISP pleads a defence that the liability
Focus on Asia
falls on the user, the court may order the ISP
to disclose all details of the user in order to
ascertain the users real identity and contact
means. If the ISP refuses to comply with such
an order without proper reasons, the court
may impose a fine on the ISP or even make an
order of imprisonment.
Once the users real identity has been
disclosed, the aggrieved person is entitled to
join the user as a defendant to the lawsuit.
The purpose behind this provision is to
deter ISPs from hiding behind the cloak of
anonymity by trying to shift all the blame onto
the user.
Specific examples of personal data:
While the Judicial Interpretation does not
contain a precise definition on the scope of
the right to privacy, it does cite some specific
examples of personal data, the unauthorised
disclosure of which an information network
would be subject to the jurisdiction of the
court. These examples are:
Genetic information.
Patient records.
Health check records.
Criminal records.
Residential addresses.
Private and personal activities.
Exceptions to disclosure:
The following disclosure of personal data
would be exempted from liability:
Disclosure with the aggrieved persons
consent.
Disclosure necessary to promote public
interests.
Disclosure where the persons identity
cannot be ascertained and which has been
previously consented to by that person, for
research or statistical purposes undertaken
by schools or science institutions.
Disclosure of personal data previously
disclosed by the aggrieved person.
Disclosure of personal data obtained from
legal means.
Disclosure allowed by laws or regulations.
Disclosure by government authorities acting
within their powers.
Some of these exceptions (eg, disclosure
necessary to promote public interests) are
drafted in rather vague terms and cast doubt
on the robustness of the Judicial Interpretation
in protecting data privacy.
Agreements with users/ISPs:
Interestingly, the Judicial Interpretation
stipulates that any agreement between
the aggrieved person and a user or an ISP
to remove, conceal or disable the alleged
infringing contents in exchange of payment
shall be void. A possible reason behind this

rule is the protection of public interests
online contents once published should remain
accessible to the public, unless they ought to
be removed on legal merits and their removal
should not purely be a matter of private deal
involving payment between the parties.
Specified damages:
The judicial interpretation stipulates that
where it is not possible to quantify the loss
of the aggrieved person or the illicit profits of
the infringer, the court may order damages
subject to a cap of RMB500,000 (about
US$80,000). While such statutory damages
may not necessarily be an adequate reflection
of the harm done in all cases, it does assist
the court in the assessment of the quantum of
damages (especially in difficult cases) and may,
at least on paper, provide a certain deterrence
to infringement.
Draft rules on short message

services
On 4 November 2014, the MIIT published for
public consultation the Draft administrative
rules for telecommunication short message
services (Draft SMS rules). The key objective
of the Draft SMS rules is to reduce the number
of spam SMS messages in the PRC. The public
consultation ended on 5 December 2014. MIIT
has yet to publish the finalised rules.
The volume of spam SMS messages
targeting PRC mobile phone users have surged
in recent years. A recent news report noted
that in just the first half of 2013, there were
an estimated 200bn spam messages sent to
mobile phone users in the PRC. In addition to
mobile phone users, internet users have also
fallen prey to spam SMS messages. Tencent,
a major IT corporation and the developer of
online instant messaging service QQ, reported
a total of 356m junk SMS messages received
by its mobile application users in the first half of
2013, 50m more than that in 2012. The Draft
SMS rules represent the PRC Governments
efforts to address these concerns.
The Draft SMS rules are especially relevant
to companies who utilise SMS messages in
dealing with or marketing to customers and
potential customers, as the draft rules lay
down requirements on obtaining consent and
the provision of an unsubscribe mechanism.
The main provisions of the Draft SMS rules are
summarised below:
Regulation on SMS service providers and
content providers:
Under the Draft SMS rules, all SMS service
providers must obtain a telecommunications
operator licence.
SMS service providers must include in
February 2015
the message the senders genuine phone

number or code.
SMS service providers must keep records of
when a message was sent and received and
whether the recipient has subscribed for or
unsubscribed for its SMS, for a period of five
months.
SMS content providers must not distribute
SMS messages containing restricted
contents as set out under the PRC
Telecommunications Regulations.
No person shall employ automated or other
means to generate others phone numbers
for the purpose of sending unsolicited SMS
messages.
Restrictions on sending commercial SMS
messages:
No person shall send commercial SMS
messages without first obtaining the
consent of the recipient. Where a recipient
has previously given his consent but later
chooses to opt out, the content providers
must not send further commercial SMS
messages to him.
SMS service providers and content providers
who wish to obtain consent from recipients
for sending commercial SMS messages
must explain to the recipients the type,
scope and duration of time of the proposed
SMS messages that will be sent to them.
Recipients who have not replied to such an
invitation will be deemed not agreeing to
receive such SMS messages.
SMS service providers and content providers
must include in the SMS messages a free-ofcharge and efficient opt-out facility to the
recipients.
Any individual or organisation who

contravenes the above may face a penalty
of up to RMB 30,000. MIIT may also
make a public announcement about the
contravention.
Author
Eugene Low is a
senior associate
of Mayer Brown
JSM. He handles
a wide range of
contentious and
non-contentious
IP/IT work in Hong
Kong and in China,
covering traditional IPs and privacy,
internet issues, etc. Eugene is also an
accredited mediator and a panelist
of the Asian Domain Name Dispute
Resolution Centre regarding disputes
of generic Top-Level Domain names.
He speaks regularly at external events
including moderating table topics and
delivering academic courses at INTA.
Focus on Asia
How China claimed the

global patent throne
Recent research has underlined the extraordinary growth of patenting in the
Peoples Republic, explains Bob Stembridge
hinese smartphone manufacturer

Xiaomi recently made waves by
unveiling its earnings for the first
time a resounding $44.3m profit
in 2013. Its success has not come
without its drawbacks, such as a December
court order to halt its expansion into India due
to patent infringement. But the start-up still is
glowingly optimistic, as it says it plans to have
8,000 patent applications by 2016.
The companys achievement, which has led
many to dub it the Apple of China, shouldnt
come as much of a surprise. In fact, their tale is
similar to the imperfect, yet breakneck method
of Chinas booming culture of innovation
China. It is because of this shift in attitude
towards innovation that, moving forward,
makes sensations like Xiaomi more likely to be
the norm rather than the exception.
That is because China has been steadily
growing its share of the worlds IP since 2003
and now has the top spot to show for it. After
years of steady growth, China has finally taken
their place atop the worlds list of patent filers
to the tune of over 600,000 patents filed in
2013 alone.
Once a sleeping giant, China is now wide
awake, and the overtaking of the global

patenting landscape is not simply a product of
foreign multinationals filing on Chinese shores.
Insight into the Chinese patent portfolio shows
that, over a decade, the ratio of domestic to
foreign applications has also shifted from just
under 50% to nearly 80%. As a result, the
Chinese rate of patent growth over dwarfs all
competitors.
Over the last

decade, the Chinese
patent portfolio
increased its overall
invention patent
applications from
40,000 in 2003 to over
600,000 in 2013.
February 2015
A recent report from the IP & Science

business of Thomson Reuters, Chinas IQ
(Innovation Quotient): Trends in Patenting
and the Globalization of Chinese Innovation,
outlines patent filing trends in China to unveil
the inner workings of its intellectual property
output.
The Chinese governments 12th FiveYear Plan and the associated Chinese
National Patent Development Strategy play
an important role in the growth witnessed in
this patent output. With intellectual property
taking centre stage in Chinas national strategy,
the hope is that the economy will shift from a
manufacturing base to an innovation-driven
economy. However, the report also highlights
that recognition of the importance of IP exists
at the national level but is not extensive in
business and industry.
Major Chinese corporations are making
strides in embracing and using IP as an integral
part of their business strategy as they seek to
drive revenue growth, gain market share and
deliver cost benefits through the protection
of innovative technology. But as data in this
report reveals, this is still the exception rather
than the rule.
Focus on Asia
Rising to the top
Over the last decade, the Chinese patent
portfolio increased its overall invention patent
applications from 40,000 in 2003 to over
600,000 10 years later. While this rise to
dominance over the patent outputs of Japan
and the US has been anticipated for some
time, the speed at which it has happened and
continues is extraordinary. As can be seen in
Figure 1, Chinas growth has been unparalleled
its pace of filing within the last three years
exceeding all other regions.
In total, China published 629,612 patents
in 2013, over 200,000 more than both the US
and Japan. This push is driven by a five-year plan
in which the country has set out to reach two
million applications for patents for inventions,
utility models and designs by 2015. Even if
China were to fall short of that goal, it stands to
continue to eclipse the rest of the world.
Despite their increasing presence in foreign
patent offices, overall, 80% of Chinas patents
were still filed domestically in 2013, leaving
Chinas foreign growth flat year-over-year. The
number of inventions filed abroad from China
have grown from 13,005 in 2008 to 33,222
in 2013, however, overall patenting has grown
from 239,663 in 2008 to 629,612 in 2013, as
seen in Figure 2.
quality than invention patents.

In order to truly assess the quality of
inventions the Thomson Reuters analysis
compared Chinese invention patents to
invention patents in similar regions such as the
US and Japan.
Figure 3 highlights the top 10 technology
areas by volume of inventions in 2013 for
China, the United States and Japan.
Chinas profile can be categorised into
two distinct areas. First, China has a strong
portfolio within digital technology and
computing that is comparable to the US.
And second, China dominates within the
pharmaceutical / natural product / polymer

technology categories.
Despite the intellectual property strength
China has in the pharmaceutical and digital
computing sectors, these filings are held
by thousands of individual inventors with
a handful of patents each, rather than the
types of portfolios maintained by universities
or corporate entities that would be seen
stateside. As a result, the quality of the IP
could be called into question, which has been
a common criticism of Chinese intellectual
property over the course of this patenting
surge.
Figure 1: Invention patent applications 20072013
Questions over quality

With a 16.3% increase in published patents
from 2012 to 2013, the question of quality
has to be raised. Is the drive to increase patents
genuinely increasing innovation in China or are
we witnessing a lowering of the bar?
The perception of low quality inventions
described in Chinese patents may in part be
due to the substantial filing of utility model
and design patent by Chinese applicants. Since
2009, China has routinely filed over 300,000
applications per year for an alternative form
of IP protection called a utility model patent.
Virtually non-existent in the US and very rare
in Europe, the utility model patent is a lessrigorous, less-expensive patent that does
not require a substantive review process and
provides just 10 years of protection (versus
20 for invention patents). It is also the key to
claiming first-mover advantage in the lightning
fast Chinese marketplace.
According to the State Intellectual Property
Office (SIPO), in 2013 there were applications
for 825,136 inventions, 892,362 utility
models and 659,563 designs. Thus, Chinese
innovation is protected roughly in equal
measure by the three available rights. Utility
models in particular require a lesser standard
of novelty than invention patents (they are not
subject to substantive examination; in principle
it is possible to obtain a utility model patent
on the wheel) and so are likely to be of lesser
Figure 2: Chinese invention patent applications with domestic and foreign priority
Figure 3: Chinese invention patent applications compared to US and Japan
February 2015
Focus on Asia
High-tech patents dominate
While China as a whole is doing substantially
less international patent filing than other
regions of the world, a few leaders have
emerged in the global patent landscape.
The list here includes Huawei, ZTE Corp,
Shenzhen Huaxing Optoelectronic, Alibaba
Group, BOE Technology Group, Lenovo,
Tencent, BYD, SMIC and Sany.
Figure 4 highlights the ranking of these
companies and shows how clearly two
companies are leading the pack. Both Huawei
and ZTE Corporation play a leading role in
the thriving digital economy and reflect the
assertion that high-tech industries are at the

forefront of Chinese globalisation strategy
due to their international patent applications.
Figure 5 shows the major regions where
the top 10 Chinese organisations seen in
Figure 4 publish patents to seek protection
for their inventions outside China. Huawei
and ZTE Corp have published an order of
magnitude more patents than the other
eight companies, so the chart is split in two
to show the relative numbers more clearly.
Inventions may be filed in more than one
other region, so totals exceed those indicated
in Figure 4.
Figure 4: Top Chinese companies seeking international protection
Figure 5: Chinas global share of the technology areas
Pharmaceuticals keep
homegrown patents healthy
While the technology titans dominate
headlines about economic growth in China,
the pharmaceutical industry continues to be
a core component of the countrys patent
portfolio. The country has nearly 80% of world
share in patents for alkaloid/plant extracts, and
around 60% of global share of pharmaceutical
activity, general patents, as Figure 6 depicts.
The new patent dynasty

Given the progress made over the last
decade, Chinas next steps will be critical, and
the Chinese National Patent Development
Strategy highlights the countrys plans through
2020. China will set its sights on seven
strategic industries positioned for growth:
biotechnology, alternative energy, clean
energy vehicles, energy conservation, highend equipment manufacturing, broadband
infrastructure, and high-end semiconductors.
Companies like Xiaomi certainly face
global obstacles as they race to become patent
leaders. When it comes to the global patenting
landscape, China is here to stay, and as a
result, any sound IP strategy has to account for
its continued presence as a prominent player.
While there are vulnerabilities in the Chinese
patent portfolio, its clear that continuing to
amass a dominant body of work ranks high
on the countrys list of priorities. As China
continues to become a hotbed for new ideas,
the rest of the world is faced with a daunting
task: either drastically boost their patenting
efforts, or cede the throne to the new
innovation superpower.
To read the full report visit:
http://go.thomsonreuters.com/chinaiq
Figure 6: Forward citations for data processing inventions 2008
Author
Bob Stembridge is a
customer relations
manager, IP and
science, at Thomson
Reuters.
February 2015
Focus on Asia
IP & SMEs
in China
The UK Intellectual Property Offices China IP
attach, Tom Duke, provides tips on how UK SMEs
can seek advice when doing business in the country
he UK-China trade and investment

relationship is going from strength
to strength. Bilateral trade is
on track to reach the shared
government target of $100bn by
2015. Chinese companies are making more
new investments in the UK than in any other
European country. Research and innovation
collaborations are increasing, boosted by a
new 200m bilateral fund.
Closer economic links are creating
opportunities for small and medium enterprises
(SMEs) and large companies alike. However, it
is crucial that British companies planning to
do business in China carefully consider the
intellectual property (IP) challenges and take
efforts to mitigate the risks.
Chinas IP regime
The Chinese IP system is developing quickly
and the pace of change shows no sign of
slowing. IP is a key part of government reform
packages aimed at improving the business
environment in China and helping maintain
strong economic growth. China now has an
increasingly sophisticated IP and legal system
that can and should be engaged with by
companies considering business opportunities.
The Chinese IP regime remains young in
comparison to systems in most developed
markets. The first Chinese IP law was
implemented in 1983, meaning many
government and judicial approaches that took
centuries to develop in the UK have been
introduced in only three decades in China
and all this against a backdrop of sustained
economic growth that has transformed Chinese
society. The relative newness of the system
means that company IP outcomes in China are
not as predictable as in developed markets. The
Chinese business culture has yet to fully reflect
a respect for IP seen in other countries, further
increasing the likelihood of problems.
It is important to remember that IP rights
are territorial. UK, EU and Hong Kong IP rights
or rights issued in other territories almost
never provide protection in mainland China,
therefore exporting companies need to ensure
that IP protection is secured from the relevant
Chinese government agencies.

A persistent concern for SMEs launching
business internationally is that IP protection
and the enforcement of rights when an
infringement is detected can be prohibitively
expensive. There is no simple answer to
this problem, but enforcing IP rights in
China can be relatively inexpensive. Local
government teams across the country can
implement administrative enforcement
to reduce visibility of infringing goods and
services. Websites have notice-and-takedown
mechanisms to remove infringing sellers from
e-commerce platforms. Often low levels of
enforcement action can be enough to deter
opportunistic infringers.
IP advice
Ultimately, companies need to decide how
much available resource there is to dedicate
to IP, in order to maintain competitiveness and
take advantage of market opportunities in
China. And fortunately help is at hand from
experienced attorneys, EU-funded projects and
the UKs IP support solutions,1 to ensure that
the right decisions are made.
Links between British and Chinese
attorneys mean that advice on protecting IP
in China can be accessed alongside support in
the UK and other relevant markets. The UKs
Chartered Institute of Patent Attorneys2 and
the Institute of Trade Mark Attorneys,3 have
cooperation programmes with China and
domestic attorneys that can be located on the
websites of these institutions. An alternative
to accessing Chinese IP advice through UK
attorneys, is to engage directly with Chinese
services providers. The China Britain Business
Council4 maintains a list of companies. Whether
directly engaging with a Chinese attorney
(saving the cost of additional intermediaries)
or working with UK counsel (benefiting from
due diligence and prior relationships built with
Chinese partners), companies should take time
to ensure they chose advisors with which they
are comfortable and confident.
Assistance for SMEs is also available from EU
projects and an IP attach team posted to Beijing
by the UK Intellectual Property Office (UKIPO).
February 2015
The EU IPR SME Helpdesk5 is an advisory

service targeted at SMEs, conducted from an
office in Beijing. The helpdesk provides jargonfree advice for SMEs via email and telephone
hotlines. The project website contains resources
designed to help guide SMEs through the
crucial IP decisions faced when doing business
in China.
Statistics announced recently show that UK
companies represent the single largest group
of companies using the helpdesk a further
positive sign that growing UK-China economic
links are resulting in more British companies
exploring the Chinese market.
Complementing this service, in 2011, the
UKIPO posted their first IP attach to China.
Based in the British Embassy Beijing, the China
attach team provides support to hundreds
of British businesses each year. The attach
posting to Beijing was followed by attachs in
India, Brazil and South East Asia. I encourage
any British companies considering launching
business in these fast-developing and exciting
markets to get in touch with me and my other
attach colleagues for strategic advice and
signposting to relevant IP services.6
Footnotes
1. UKIPO IP advice webpage. https://www.gov.uk/
seeking-intellectual-property-advice
2. CIPA. www.cipa.org.uk
3. ITMA. www.itma.org.uk
4. CBBC. www.cbbc.org
5. www.iprhelpdesk.eu
6. China specific advice can be found here: www.
gov.uk/government/case-studies/uk-chinacooperation-on-intellectual-property
Author
Tom Duke joined the
UKIPO in December
2011 as the first IP
attach. Previously,
he was head of the
IP Centre at the
European Union
Chamber of Commerce
in South Korea. He is
based in the British Embassy in Beijing.
Focus on Asia
Patent battle
Patent owners must approach infringers with caution if they are to
ultimately succeed in pharmaceutical litigation in Thailand. Tilleke & Gibbins
Alan Adcock and Siraprapha (Khim) Rungpry provide a rundown
hailands pharmaceutical market

is one of the largest and most
developed in Southeast Asia.
While patent owners recognise the
jurisdictions importance in terms
of sales through Thailands unique universal
medical scheme and its position as a regional
distribution hub, competitors are constantly
challenging to break into the market, as well.
While Thai Food and Drug Administration
(FDA) product registration is straightforward,
the granting of marketing authorisation is
not, in itself, an act of infringement, as the
Patent Act recognises Bolar exemptions.
Patent owners must approach infringers with
caution if they are to ultimately succeed before
the Thai Intellectual Property and International
Trade Court (IP&IT Court).
This article will address what patent
owners should know about pre-litigation
strategies and evidence gathering, which
form an integral part of an overall approach to
deal with unfair competitors and infringers, in
addition to litigation.
Investigation and product

testing
It is important to think about how you will
show that your patent has actually been
infringed. Conducting an investigation prior
to deciding on your litigation strategy should
provide you with the necessary evidence. For

example, at the beginning, a patent owner
should take the initiative and obtain samples
as necessary evidence.
Good practice is always to obtain (at least)
five samples: one for testing by the patent
owner, one for testing by a local lab, one for
required testing (at a later stage) by the IP&IT
Court, one for testing in case the infringer
requests as such, and one for safe keeping.
A chain of custody is critically important, and
therefore it is vital to make sure that this is done
properly. If possible, a successful investigation
should obtain other evidence, such as price
lists, disclosure of distribution channels and
export information, any fake regulatory
licences, unregistered pharmaceutical product
variations which should have been submitted
to the Thai FDA but were not, and labels that
do not conform to the product. All of this
may later prove helpful during settlement
negotiations or a trial.
Once the samples of the patent infringing
products have been acquired, they must
be tested to prove that they are, in fact,
infringing. While samples are almost always
tested internally by the patent owner first, if
a reputable laboratory can do so in Thailand,
this primary sourced evidence is best led with
at trial. You can learn the degree or quantum
of infringement at this preliminary stage,
February 2015
which allows you to further develop your

enforcement strategy.
Patent review
You need to conduct a patent review, which
may start off by comparing the local patent
to be enforced against the priority patent
under which it was most likely reviewed and
subsequently granted by the Thai Patent
Office. Differences in granted claims in the Thai
patent, as opposed to assumed granted claims
in the priority patent, can, unfortunately, be the
result of inaccurate translations. This must be
checked very carefully. As the alleged infringer
will most likely challenge the validity of the
patent, you should also conduct a patent
validity analysis at this stage. Additionally, it is
common to produce an infringement analysis
to further develop the enforcement/litigation
strategy.
Sending a letter to the infringer

Sending a properly worded cease-anddesist (C&D) letter to an infringer is highly
recommended when involved in a patent
infringement situation in Thailand. Such a letter
may successfully stop the infringement. Also,
you can later submit it as evidence at trial to
show that you, as the patent owner, notified
the infringer, but that the infringer chose to
ignore it and continued the infringing activities.
Focus on Asia
Some important components of the letter
include an identification of the relevant Thai
patent and the period of protection, a general
statement of the facts or known acts of
infringement, and a reference to the relevant
provisions of Thai patent law including
penalties for infringement, injunctive relief, and
confiscation. Another important component
includes the requirement that the infringer
ceases and desists from the manufacture, use,
distribution, import, and sale or offer for sale
of the infringing product or process. The letter
should also include a reasonable, but definite,
time period for the infringer to respond.
If your patent application has been
published but remains pending, it may also be
beneficial for you to send a notification letter
to an alleged infringer. Pursuant to Section
35 bis of the Thai Patent Act, an infringing
act which is committed before the patent is
issued will be exempt from liability, unless the
infringer knows that the patent application has
been filed or the infringer has been informed
of that fact in writing. Moreover, Section 35
bis allows the patentee to claim damages prior
to the granting of the patent, if you can show
that the infringer has knowledge of the patent
application or has been informed in writing.
Negotiation and settlement (out

of court)
Sometimes, the infringer, after being notified
of the patent protection by the patent owner,
may be willing to negotiate and settle the
dispute out of court. If the patent owner is
able to reach a settlement with a generic
competitor in Thailand, the patent owner will
need to ensure that the settlement agreement
is properly structured and provides effective
protection and remedies.
The agreement should reflect what you
want to achieve in the settlement and should
have a similar (or even broader) scope as a
C&D letter. In other words, you should, again,
state the facts and/or the known or suspected
acts of infringement in as general and broad
manner as possible. A section for the infringers
acknowledgement of the infringing acts and
the ownership and validity of the patent should
be included in the agreement, as well as clauses
such as delivery up, supervised destruction,
account of profits, sales records, customer
lists, etc. Additionally, you may include, as
needed, sections precluding IP applications or
IP cancellations, interferences, invalidations,
oppositions, etc, although this may give rise
to competition issues in jurisdictions outside
of Thailand, and therefore you will need to
consider this on a case-by-case basis.
A waiver should be for current (not
future) infringement only, and if the patent
owner would like to receive compensation for
damages incurred, this needs to be properly

included in the agreement as well, along
with specific payment amounts and timing
instructions.
Standing before court

In Thailand, there is a specialised court for
intellectual property cases, including patents
the Intellectual Property and International
Trade Court (IP&IT Court). This was the first IPspecialised court set up in Southeast Asia, and
it is a highly respectable bench. Unlike other
jurisdictions where forum shopping may be a
strategic preliminary consideration, this is not
the case in Thailand.
In Thailand,
there is a specialised
court for intellectual
property cases,
including patents
the Intellectual
Property and
International
Trade Court. This
was the first IPspecialised court set
up in Southeast
Asia, and it is a highly
respectable bench.
Under Thai patent law, the patent owner
has standing to bring an infringement action
against an infringer. There is a precedent which
suggests that the court may sometimes allow
an exclusive licensee to bring an infringement
action. However, there is no provision in the
patent law that grants standing to an exclusive
licensee. Therefore, in case of a multinational
pharmaceutical company - in which the local
subsidiary may not be the patent owner, ie,
the patents are held in the name of a separate,
foreign company, which may not have any
direct corporate relationship with the local
subsidiary - the patent owner should be named
as the plaintiff, and the local subsidiary (eg, as
an exclusive licensee) may join in the action
as a co-plaintiff. This way, the case will not be
dismissed for lack of standing, regardless of
whether the court allows the exclusive licensee
to be a party to the lawsuit.
With regard to a patent validity challenge,
Thai patent law allows a broader scope of
standing. The Thai Patent Act, Section 54,
February 2015
states, The invalidity of a patent may be

challenged by any person. A petition to
cancel an invalid patent may be submitted
to the Court by any interested person or the
public prosecutor. Hence, anybody who can
demonstrate that he or she is an interested
party will be allowed to bring an action to
challenge a patent. In Thailand, this threshold is
not difficult to meet. For example, a challenge
to a drug patent by two patients using the
medicine was found to have sufficient standing
to challenge the novelty of that patent.
Criminal v civil action

In Thailand, a patent infringement action
can be brought as a criminal action or a civil
action. A criminal action would require police
cooperation and support, which can be
challenging. Typically, a criminal case can be
instigated through the Thai Department of
Special Investigation (DSI) the Thai equivalent
of the US FBI or the local police.
Both the DSI and the local police, however,
are often reluctant to take on a patent
infringement case, because an infringement is
usually not readily identifiable and sometimes
needs to be confirmed based on a technical
test report or an expert opinion. The DSI and
police officers, who usually see themselves
as lacking the relevant technical knowledge,
may not want to accept the case, as they
may not be absolutely certain that there is
an infringement. This is especially the case
for infringement of pharmaceutical patents,
which is regarded as a more sophisticated field
than others.
Consequently, pharmaceutical patent
litigation is normally brought as a civil action,
as opposed to a criminal action. Furthermore,
since a public criminal action will be handled
by a public prosecutor, the patent owner may
not have full control over the litigation strategy
and how to run the case, even though the
public prosecutor would likely rely on the
patent owner to provide information and
assist with the case. Criminal penalties for
patent infringement in Thailand include fines
of up to THB 400,000 and/or imprisonment
for up to two years.
For a civil action, on the other hand, the
patent owner can file a complaint directly
with the IP&IT Court, which has jurisdiction
over the case. If the civil patent infringement
action is successful, the plaintiff could obtain
a permanent injunction enjoining the infringer
from engaging in further infringing activities,
stopping an infringer from producing,
importing, and/or selling the infringing product
in Thailand. The plaintiff can also request
damages for losses suffered as a result of the
infringement, including loss of sales and legal
costs. But despite the availability of damages
Focus on Asia
awards, the amounts of compensation
awarded by the Thai court are usually not very
high, as the court generally awards only actual
proven damages. This is why it is important
to gather evidence of damages sooner, rather
than later.
Preliminary and interim relief

Thai law also offers preliminary and interim
relief, including preliminary injunctions, Anton
Piller orders (described below), and interim
injunctions.
You can request a preliminary injunction
under IP legislation (including patents) before
filing a complaint with the court. It is normally
an ex parte application to the IP&IT Court.
The preliminary injunction application must
state the facts giving rise to the allegation of
infringement that would establish a prima
facie case and giving reasons sufficient for the
IP&IT Court to conclude that the preliminary
injunction is appropriate. The IP&IT Courts
decision on the issuance of a preliminary
injunction will depend largely on the nature
and extent of damages that both parties may
incur if the injunction is granted, as well as the
difficulty of enforcing the judgment against
the alleged infringer. However, it should be
noted that the court is often reluctant to
grant a preliminary injunction in a patent
infringement case, and hence, the chance of
success is not very high.
In addition, it may be possible for you to
seek an Anton Piller order to seize evidence of
infringement. This order preserves the evidence
for when a civil action is initiated by the patent
owner. To support an application for an Anton
Piller order, you must be able to show that
an emergency situation exists in which, if the
other party or a third party involved is notified
beforehand, the evidence of infringement will
be lost or will otherwise become difficult to
obtain at a later stage. The Thai court regularly
grants an Anton Piller order when there is a
real emergency situation.
Moreover, you may apply for an interim
injunction after the patent infringement
complaint is filed with the IP&IT Court. This
application is usually an inter parte application,
in which the alleged infringer will have an
opportunity to make an argument against the
applicant.
Preparing for litigation

Preparing for patent litigation involves
preparing for both the substantive issues, such
as conducting a patent validity analysis, an
infringement analysis, and an assessment of
damages, etc, and the procedural issues, such
as preparing for the relevant court procedures
and various deadlines and limitations involved.
Before determining any patent validity or
infringement issues, construction of the claims

of the patent needs to be made.
Under Thai law, claim construction is
based on Section 36 bis of the Thai Patent Act,
which requires not only the examination of the
claims, but also that the characteristics of
the invention as set forth in the specification
and drawings shall be considered. In this
regard, it should be noted that Thai courts
do not hold a separate hearing for claim
construction. All arguments and evidence in
the case, including claim construction and
patent validity analysis, will be heard by the
court altogether during trial, after which it will
render a single judgment on all issues at the
end of the first-instance proceedings.
Regarding the patent validity analysis, the
novelty analysis and the inventive step analysis
under Thai law, largely follow international
norms. In summary, the novelty requirement
under the Thai Patent Act mandates that the
invention must not be disclosed in a prior art,
eg, an invention which has been widely known
or used by others in Thailand before the patent
filing date, an invention which is described in a
document or otherwise disclosed to the public
in either Thailand or overseas before the patent
filing date, or an invention that was previously
patented elsewhere. Further, the inventive step
(non-obviousness) requirement under the Thai
Patent Act mandates that the invention must
not be obvious to a person ordinarily skilled
in the art to which the invention relates.
The definition of a person ordinarily skilled
in the art can often be problematic and
subject to arguments by the plaintiff(s) and the
defendant(s). Particularly in a pharmaceutical
patent litigation case, the area of the relevant
technical field is almost always an issue.
As for the patent infringement analysis,
for each (valid) patent claim, the court will
determine whether the accused product/
process infringes the patent either by (a)
literal infringement or (b) infringement by
equivalents. The Doctrine of Equivalents is
recognised under Section 36 bis of the Thai
Patent Act. However, precedents and guidance
from the IP&IT Court with regard to the scope
of equivalents are sparse.
Defence
On the other hand, from an alleged infringerdefendants point of view, several grounds of
defence may be raised. First and foremost, it
is a common defence strategy to challenge
the patent validity, most likely by way of a
counterclaim. Typical grounds for patent
invalidity in Thai patent litigation include lack
of novelty (eg, prior use or invention is not
new over prior art), lack of an inventive step
(because the invention is obvious in view of a
prior art combination), and lack of industrial
February 2015
application (ie, no utility). Insufficiency

arguments may also be relevant, such as that
the patent claims fail to meet the enablement,
full description, or best mode requirements,
or the patent claims a non-patentable subject
matter. Lastly, non-infringement is almost
always raised as a defence.
Key takeaways
Differences in granted claims in a Thai patent,
as opposed to assumed granted claims in
the priority patent, can, unfortunately, be
the result of inaccurate translations. This
must be checked very carefully.

Cease-and-desist letters (in case of
infringement of a granted patent) and
notice letters (in case of infringement of
pending patents) should be considered in
pre-litigation strategy, as these are generally
successful in Thailand if drafted carefully.
Standing to sue on infringement of a Thai
patent should be determined early on and
strategically, as it remains unclear as to
whether a local business unit licensee has a
right to do so or not.
The IP&IT Court does not hold a separate
hearing for claim construction. All arguments
and evidence in the case, including claim
construction and patent validity analysis,
will be heard by the court altogether during
trial, and then the court will render a single
judgment on all issues at the end of the firstinstance proceedings.
Authors
Alan Adcock is a partner and deputy

director of Tilleke & Gibbins intellectual
property and regulatory affairs groups.
He handles local pre-litigation strategy
and litigation management for
infringement and invalidation matters
and works regularly with external
counsel globally when strategic tasks or
evidence issues reach outside Southeast
Asia.
Siraprapha (Khim) Rungpry is a
consultant in Tilleke & Gibbins
intellectual property group. Her practice
focuses mainly on pharmaceuticals
and life sciences. She currently serves
as project manager for the National
Innovation Agency, Ministry of
Science and Technology, where she is
responsible for IP consultancy, licensing,
valuation, and project management.
Trademark Trial
and Appeal Board
TTABs likelihood of
confusion rulings
B&B Hardware may significantly influence brand

owners trademark policing and enforcement
decisions, explains Thomas Williams
The Supreme Court of the US (SCOTUS) heard oral arguments

in B&B Hardware, Inc v Hargis Industries, Inc (No. 13-352) on
2 December 2014. The decision will have a significant impact on
trademark infringement cases where the US Patent and Trademark
Offices Trademark Trial and Appeal Board (board) has previously
weighed in on likelihood of confusion. The court will decide what
deference, if any, the courts should afford board rulings on the oftendispositive likelihood of confusion issue.
Background
The B&B Hardware litigants have a long-running dispute over the
trademark SEALTITE. Respondent Hargis applied to register SEALTITE
as a trademark for self-drilling and self-taping screws. Petitioner B&B
Hardware instituted an opposition before the board, asserting its
SEALTIGHT mark for fasteners, claiming that Hargis SEALTITE mark
was not entitled to registration, because it would create a likelihood
of confusion under Section 2(d) of the Trademark Act, 15 USC section
1052(d). The board, finding a likelihood of confusion, sustained the
opposition and refused registration. B&B subsequently filed suit in
the federal district court asserting that Hargis use of the SEALTITE
mark in commerce infringed its federally-registered SEALTIGHT mark.
B&B argued that the boards ruling was preclusive on likelihood of
confusion. The district court disagreed. It held that the boards decision
was not entitled to any preclusive effect. The Eighth Circuit affirmed.
B&B successfully petitioned for certiorari on two questions: (a) whether
the boards finding of likelihood of confusion precludes re-litigation of
likelihood of confusion in a subsequent infringement action; and (b) if
the boards finding is not preclusive, whether it is subject to deference.
Relevance to in-house counsel

The courts ruling in B&B Hardware may significantly influence brand
owners trademark policing and enforcement decisions. If the court
adopts B&B Hardwares position that the boards likelihood of confusion
determination is preclusive, trademark owners may place more emphasis

on and devote more resources to board proceedings. A win at the
board may set the stage for an injunction and damages in federal court.
In contrast, if the board adopts Hargis position (and the Eighth Circuits
holding) that the boards decision is not preclusive and not entitled to any
deference in a subsequent infringement action, trademark owners may
be less inclined to go all-in on board proceedings involving likelihood
of confusion. As of today, there is no clear consensus among the federal
circuit courts as to the preclusive effect, if any, of a board ruling on
likelihood of confusion. The upcoming B&B Hardware decision should
provide some much-needed clarity.
TTAB proceedings v infringement actions

It is important to recognise the boards role and its limitations in
adjudicating trademark disputes. The board is not an Article III court. It
consists of administrative law judges within the USPTO who adjudicate
trademark registration disputes. The board cannot issue injunctions or
award damages. As a result, the board cannot order a party to cease
and desist from using a mark, nor can it award damages or attorney
fees to a prevailing party. Its primary function is to decide whether an
applicant is entitled to register a mark, or, similarly, whether a registrant
is entitled to maintain its registration.1 The former is an opposition
proceeding (15 USC section 1063), the latter is a cancellation action
(15 USC section 1064). The most commonly asserted ground for
opposition or cancellation is likelihood of confusion under Section 2(d).
The opposition opposer or cancellation petitioner (either is akin to a
plaintiff) may assert that the applicant or registrant is not entitled to
registration, because the plaintiff has prior rights and the mark at issue
is likely to cause confusion.2
Similarly, likelihood of confusion is often the dispositive issue in
trademark infringement3 or false designation of origin4 actions in federal
district courts. Each requires the plaintiff to prove that the defendants
use of the accused mark is likely to cause confusion. However, unlike
February 2015
Trademark Trial
and Appeal Board
a board proceeding, a district court is empowered to issue injunctions5
and award damages.6 Courts adjudicate the right to use the mark, not
merely the right to register it.
The B&B Hardware litigants and their amici have very different views
of the boards likelihood of confusion analysis. B&B Hardware and its
allies argue that the boards likelihood of confusion analysis mirrors the
district courts analysis and, therefore, should be preclusive. Hargis and
its allies argue that the boards analysis differs and should be neither
preclusive nor subject to any deference in a subsequent infringement
or false designation of origin action. Various amici take a middle-of-theroad approach, arguing that the boards decision should be entitled to a
varying degree of deference based on the underlying record developed
before the board.
A core issue during

oral argument was whether
the board adequately considers
marketplace realities in
conducting its likelihood
of confusion analysis. The
answer is not clear cut.
A core issue during oral argument was whether the board adequately
considers marketplace realities in conducting its likelihood of confusion
analysis. The answer is not clear cut. The board applies a multifactor
test in determining whether confusion is likely. It refers to those factors
as the DuPont factors, referring to In re EI du Pont de Nemours & Co.7
The DuPont factors include: the similarity or dissimilarity of established,
likely-to-continue trade channels, the conditions under which and
buyers to whom sales are made, ie, impulse v careful, sophisticated
purchasing, and the nature and extent of any actual confusion. It
also includes a catch-all factor: any other established fact probative
of the effect of use. These factors, on their face, arguably involve
considerations relating to marketplace use. The federal courts apply
similar multifactor tests for analysing likelihood of confusion, most
named after precedential infringement cases. For example, the Ninth
Circuit applies the Sleekcraft factors.8 Courts in the Second Circuit apply
the Polaroid factors.9
However, a key distinction between the board and the courts, is
that the board will presume that the applicants or registrants goods
or services will travel in the normal and usual channels of trade and
methods of distribution. See, eg, Canadian Imperial Bank of Commerce
v Wells Fargo Bank.10 Hargis took a hard line on this distinction between
board cases and infringement lawsuits, citing Octocom Systems Inc v
Houston Computer Services Inc,11 (disregarding evidence relating to
classes of purchasers because the applicant sought an unrestricted
registration). Hargis buttressed its point by arguing that the board bases
its likelihood of confusion decision on a fairly truncated evidentiary
record. Hargis compared and contrasted the parties board record
against the record developed in the subsequent infringement lawsuit,
emphasising that the board action involved a much smaller record.
Comment
While it is true that some board cases involve a limited evidentiary
record, it is important to note that the parties are permitted to develop
and present a robust evidentiary record. The boards procedural rules
provide for a testimony period (37 CFR section 2.121). During this
period, the parties can prepare and file various forms of evidence,
including testimony depositions of fact and expert witnesses (37 CFR
section 2.123). Expert witness testimony in board cases often relates to
consumer surveys commissioned by either party. While the board does
not hear in-person live witness testimony, testimonial depositions are
subject to real-time objections and cross-examination by the adverse
party (37 CFR section 2.123(e)(3)). The party taking the testimonial
deposition must file the full transcript, along with any exhibits, with the
board (37 CFR section 2.123(h)). As a result, although the board judges
do not hear live testimony, they receive full evidentiary transcripts,
objections and all. Some board proceedings generate voluminous
evidentiary records, which the board may thoroughly dissect in reaching
its decision. See, eg, General Mills Inc v Fage Dairy Processing Industry
SA,12 (noting formidable opposition record and requiring parties to
submit joint appendix). The B&B Hardware board record may have been
slim by comparison, but not by rule.
Brand owners will continue to file opposition and cancellation
actions in the board regardless of the courts decision in B&B Hardware.
An opposition proceeding is often the only procedural option for
challenging a trademark application filed on an intent-to-use basis.13 An
intent to use a mark, with no accompanying use, would not give rise
to an infringement or false designation of origin action in federal court.
Similarly, a brand owner may be forced to file a cancellation action
against a registration cited by a USPTO examining attorney as a bar to
its pending application. However, the B&B Hardware decision may have
a significant impact on brand owners strategies in cases where the
parties are direct competitors dueling over similar marks in use in the
marketplace. In such cases, the courts decision on the preclusive effect
of a board ruling on likelihood of confusion may significantly raise or
lower the stakes associated with a board proceeding. Brand owners
should watch for the decision, which will likely issue in June 2015.
Footnotes
1. See generally http://www.uspto.gov/trademarks/law/TTAB.jsp.
2. 15 USC section 1052(d).
3. 15 USC section 1114.
4. 15 USC section 1125(a)(1)(A).
7. 476 F 2d 1357 (CCPA 1973).
8.
AMF Inc v Sleekcraft Boats, 599 F 2d 341, 348 (9th Cir 1979).
Polaroid Corp v Polarad Electronics Corp, 287 F 2d 492 (2d Cir 1961).
9.
10. 811 F 2d 1490 (Fed Cir 1987).
11. 918 F 2d 937 (Fed Cir 1990).
12. 100 USP Q2d 1584, 1592 (TTAB 2011).
13. 15 USC section 1052(b).
Author
Thomas Williams is a partner at Ulmer &
Berne in Chicago, Illinois. He represents
clients in all aspects of trademark and
unfair competition law including trademark
infringement, trade dress, dilution, and false
advertising litigation. He represents clients
before federal district and appellate courts.
He also represents clients in opposition
and cancellation proceedings before
the Trademark Trial and Appeal Board of the US Patent and
Trademark Office, where he has litigated multiple cases to final
decisions on the merits.
February 2015
Trademark tacking
Tackling
Tacking
The Supreme Court of the US has ruled on the controversial
issue of trademark tacking in Hana Financial, Inc v Hana Bank.
Anessa Kramer reviews the history behind the case
On 3 December 2014, the Supreme Court of the US (SCOTUS)

heard oral arguments in the appeal of the Ninth Circuit Court of
Appeals decision in Hana Financial, Inc v Hana Bank. The question
before the court is whether the issue of trademark tacking, that is, the
ability to claim priority of use of a mark based on earlier use of a similar
mark, is a question of law for the court or a fact question for the jury. A
decision from the court is expected later this year.
Trademark tacking is a rather infrequently applied legal doctrine. It
arises in cases where a trademark changes over time, such as with the
modernisation of a logo. In cases where tacking is allowed, a trademark
owner can claim the priority date of an earlier-used similar mark. But, as
stated by the Ninth Circuit, the legal standard for tacking is exceedingly
strict: The marks must create the same, continuing commercial
impression, and the later mark should not materially differ or alter the
character of the mark attempted to be tacked.1 A leading trademark
treatise recognises that [t]rademark rights inure in the basic commercial
impression created by a mark, not in any particular format or style.2
The Hana Financial case raises the question of whether this continuing
commercial impression should be a question of law or of fact.
Background
The case of Hana Financial v Hana Bank first arose in 2007, when Hana
Financial, a Korean financial services company, sued Korean bank, Hana
Bank, for trademark infringement and related claims based on the
latters use of HANA BANK as a trademark in the US. In the course
of this dispute, Hana Bank argued that it had prior rights in the HANA
BANK trademark by virtue of its earlier use of a similar mark, and sought
to tack on that earlier use. If tacking was allowed, then Hana Bank
was likely to prevail on the merits of the dispute and would be the party
allowed to use HANA in the financial services field in the US.

Hana Banks tacking argument is best understood in the context of
a review of the history of the parties respective uses of HANA marks in
the US. In May 1994, Hana Bank began providing financial services to
Korean-American communities in the US. These services were promoted
as HANA Overseas Korean Club. In July 1994, Hana Bank ran its first
advertisement in the US in Korean language newspapers. The ad (in
Korean) featured references to HANA Overseas Korean Club (in English)
and the Korean language version of HANA BANK. In August,
Hana Bank received its first applications for US customers to become
members of the HANA Overseas Korean Club. Hana Financial was
incorporated in California in that same month, and first used its HANA
FINANCIAL trademark in US commerce on 1 April 1995. Hana Financial
federally registered its mark in design form in 1996. Hana Bank began
operating in New York under the HANA BANK trademark in 2002.
Clearly, both parties recognised early on that this case was not
about likelihood of confusion, which seemed rather clear-cut, given
Trademark tacking
is a rather infrequently applied
legal doctrine. It arises in cases
where a trademark changes
over time, such as with the
modernisation of a logo.
February 2015
Trademark tacking
the similarity of the marks and the services. Rather, this case was about
priority. If Hana Bank could prove that its 1994 use of HANA Overseas
Korean Club and HANA BANK in Korean characters was the legal
equivalent of its subsequent use of HANA BANK, ie, if Hana Bank could
engage in trademark tacking, then Hana Bank could establish priority.
The rulings
In 2008, the district court granted Hana Banks motion for summary
judgment on trademark infringement, finding that the bank had priority
of rights (essentially deciding the tacking issue as a matter of law). On
appeal, the Ninth Circuit Court of Appeals remanded the case for trial,
claiming in part that the banks advertisements used to establish priority
were subject to competing inferences.
Throughout the time surrounding trial, Hana Financial filed various
motions arguing that Hana Banks efforts to prove priority of rights
through trademark tacking were legally insufficient. These motions
were denied, and the district court sent the question to the jury. Hana
Financial again appealed to the Ninth Circuit, arguing that trademark
tacking was a question of law and not a question of fact. The Ninth
Circuit affirmed the lower court, thus paving the way for the nowpending appeal to SCOTUS.
Amicus briefs were filed by both the American Intellectual Property
Law Association and the International Trademark Association (INTA),
both asserting that trademark tacking should be an issue of fact. In its
amicus brief, INTA argued that trademark tacking required an evaluation
of whether the commercial impression of the earlier mark was the same
as the later mark, and that commercial impression, like most issues
in trademark law, should be determined from the perspective of the
ordinary purchaser of these kinds of goods or services.
There is clearly a split in the

circuits as to whether tacking is
a legal issue or a question of fact,
as both the Sixth Circuit and the
Federal Circuit (as well as the TTAB)
have held that tacking is a
question of law.
Legal issue or question of fact
Some commentators, including the author, have questioned whether
the tacking issue is sufficiently important to command US Supreme
Court attention. On the one hand, tacking arises infrequently, as
there must be a rather unusual timeline of events for a tacking issue
to be relevant. And even in cases where tacking is at issue, it may not
be determinative, such as when the marks at issue are found to be
sufficiently dissimilar as to create a likelihood of confusion. There is also
a question as to whether consideration by a judge or a jury will lead to
different outcomes. Even in the Hana Financial case, both the judge (at
the summary judgment stage) and the jury (at trial) decided in favour of
Hana Banks claim of priority.
Yet, there is clearly a split in the circuits as to whether tacking is
a legal issue or a question of fact,3 as both the Sixth Circuit and the
Federal Circuit (as well as the Trademark Trial and Appeal Board) have
held that tacking is a question of law. And while most circuits find the
likelihood of confusion issue to be a question of fact, three have
disagreed or treated this as a mixed question of fact and law. As a result,
some practitioners have expressed concern that a finding by SCOTUS
that trademark tacking is a legal issue could be extended to likelihood

of confusion as well. Indeed, in the oral arguments before the court,
Justice Kennedy raised this issue by referring to it as the elephant in
the room. Justice Kennedy asked counsel for Hana Bank whether a
holding that tacking is a factual issue would require the conclusion that
likelihood of confusion is also a factual issue. Counsel did not directly
respond to the elephant in the room, and it remains to be seen
whether SCOTUS decision addresses it.
From a legal perspective, there is nothing that legally requires
likelihood of confusion to receive the same treatment as tacking. But
from a practical perspective, SCOTUS decision may put some pressure
on the circuits who take a contrary approach to likelihood of confusion.
The reason behind this pressure is that currently, all of the circuits
treating tacking as a matter of law also treat likelihood of confusion as
a matter of law. The reasoning behind the two is similar: if tacking is
a question of fact, it is because jurors are better-positioned to consider
the commercial impression of the marks as consumers would. It may be
difficult to reconcile this with likelihood of confusion being a question
of law, as that inquiry also takes into account the impressions of
consumers. Thus, the implication of the decision in Hana Financial may
extend beyond the relatively rare issue of tacking into the much more
common determination of likelihood of confusion.
Addendum-post-decision comment
SCOTUS issued its unanimous decision in the Hana Financial case on 21
January 2015. Perhaps not surprisingly, the court, in a decision written
by Justice Sonia Sotomayor, upheld the Ninth Circuit Court of Appeals
decision finding that trademark tacking is a question of fact. The decision
is notable only in its brevity, and the court did not specifically address the
elephant in the room of whether likelihood of confusion should also
be treated as a factual question. The decision does, however, contain
language that is likely to put some pressure on the circuits treating
likelihood of confusion as a matter of law. For example, the Hana court
stated that, Application of a test that relies upon an ordinary consumers
understanding of the impression that a mark conveys falls comfortably
within the ken of a jury. Indeed, we have long recognised... that, when
the relevant question is how an ordinary person or community would
make an assessment, the jury is generally the decision maker that ought
to provide the fact-intensive answer.4
Footnotes
1.
Brookfield Commcns Inc v West Coast Entmt Corp, 174 F 3d 1036,
1047-48 (9th Cir 1999).
2.
J Thomas McCarthy, Trademark Law and Unfair Competition, 17:26
(4th ed 1998).
3. The 1st, 3rd, 4th, 5th, 7th, 8th, 9th, 10th, 11th, and DC circuits find this a
question of fact, whereas the 2nd, 6th and Federal Circuits treat this either
as a question of law or a mixed question of law and fact. Even those courts
who find this a mixed question of fact and law treat the underlying findings
(eg, similarity of marks, similarity of products) as questions of fact.
4. Hana Financial Inc v Hana Bank, No 13-1211, slip op at 4 (2015).
February 2015
Author
Anessa Kramer is a partner in the trademark
and copyright practice at Honigman Miller
Schwartz and Cohns Bloomfield Hills,
Michigan office. Kramer handles a variety
of trademark and domain name issues, from
global trademark strategies to enforcement
and litigation.
Online piracy
New approaches to
piracy protection
Rightholders can tackle online pirates more effectively by targeting
the first few pages of search engine results, says Bill Freund
Solution
Since most people start their search for digital content at search engines,
and most people dont venture past the first few pages of results, its
very effective and cost-effective to target enforcement efforts at the top
of the search results. In other words, its best to keep the top of search
results clean for popular keywords related to your assets, maximising
the space available for links to authorised (revenue-generating) content.
Therefore, we recommend using an anti-piracy software system
that focuses on the top of the search results for popular keywords
related to your assets. Such a system should:
1. Identify keywords that you expect your customers to use for your
titles.
2. Monitor popular search engines, using those keywords.
3. Classify the results as authorised or unauthorised.
4. Detect results that may be infringing on your copyrights.
5. Facilitate manual review to verify the results.
6. Submit DMCA notices through fast-track programs to get links
removed quickly.
7. Use machine learning algorithms to continuously improve results.
4
5
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
6
7
Week #
Position gap (see graph 1): number of search result positions,

between the first authorised link and the first unauthorised link on
the first page of search results.
Keyword cleanliness: portion of relevant casual keywords that do
not generate an infringement on the first page of search results.
Time-to-find: estimated time it takes a search engine user to find the
first infringement with a live download link.
Number of webpages reported: the quantity of webpages that
have been submitted to search engines for removal from their indexes.
Removal rate: the portion of webpages reported to search engines
that were subsequently removed from their indexes.
Time-to-action: the average amount of time between discovery of
the suspicious links and submission of removal notices.
Time-to-removal: the average amount of time between the time
that the removal notices were sent to search engines and the time
that the links were subsequently removed from their indexes.
Summary
Companies can accomplish a much greater impact in their fight
against piracy by focusing their attention and effort at the top of the
search results for the keywords that matter most. Those keywords
are the most popular relevant ones which are generating the most
unauthorised results in the lowest search positions. Using appropriate
metrics, companies can accurately see the impact of their effort. Using
optimised software, they can streamline their workflow. And combined,
they can maximise their ROI.
Author
Metrics
Many companies fighting piracy limit their metrics to activity, such as
the number of links they have removed. We recommend focusing
your metrics on results to show real impact, which enables you to
continuously improve your enforcement capabilities.
These metrics could include:
Traffic share: estimated percentage of search traffic that goes to
authorised v unauthorised content. Incorporates the position of the
search results and the relative keyword traffic.
Position Gap
Graph 1
Search Position
Consumers seeking to legitimately acquire a movie or TV title

typically start their quest at a search engine, and they often type
the name of the title with some other innocuous keywords, such
as watch or download. Pirate sites capitalise on this fact, ensuring
that links to free versions of the content are made available in search
results, luring away consumers who were not intending to pirate.
Its clear that limiting piracy requires the removal of these
infringements. But the quantity of them is overwhelming for companies
with popular content. In fact, content owners are now removing a
staggering 12m webpages per week, up from 8m just a few months
ago (according to Googles Transparency Report).
Even if it was feasible to remove all or most of the infringing links, its
simply not economical to do so. After all, you could remove millions of
infringing links, but if a few prominent ones remain, your effort would
likely have been wasted. Its also risky to remove a large volume of links
since the more you remove, the greater the chance of reporting false
positives, which could generate bad publicity and expensive lawsuits.
February 2015
Bill Freund is an executive at Marketly, an

innovative online brand protection company,
based in Silicon Valley. After receiving his
MBA from Harvard Business School, Bill
began his career as a product manager
at Microsoft. He then spent years leading
marketing and business development at
VC-backed startups.
Community trademark
Trademark crash:
Volvo v OHIM
Chatchai Somwat / Shutterstock.com
The EU General Court has upheld OHIMs decision to reject a trademark

opposition filed by Volvo, based on its arguments of conceptual similarity
The EU General Court has upheld OHIMs decision to reject an

opposition to the registration of the figurative mark LOVOL,
based on earlier trademarks containing the term VOLVO.
A Community trademark (CTM) application to register the
figurative sign LOVOL (see below left) was filed by Hebei Aulion Heavy
Industries, a Chinese applicant, on 20 April 2006. The application covered
goods in classes 7 and 12, including agricultural machines, automobiles,
and motorcycles. Volvo Trademark Holding AB (Volvo) opposed the
application on the basis of a number of earlier trademarks, including a
CTM registration for the word VOLVO and a CTM application for the
(below right) figurative mark, which has since been registered.
The opposition was rejected in 2010 on the basis that the signs
were dissimilar. In July 2011, the Office of Harmonization in the Internal
Markets (OHIM) First Board of Appeal upheld the Opposition Divisions
decision and dismissed Volvos appeal (the contested decision). The
board agreed with the earlier finding that the signs LOVOL and VOLVO
were not similar signs.
The proceedings
On appeal to the General Court, Volvo sought to annul the contested
decision on the ground that Article 8(5) of Community Trademark
Regulation No. 207/2009 had been infringed by the applied-for
mark. Volvo did not pursue its earlier unsuccessful claim under Article
8(1)(b), that the marks were similar such that the public were likely
to confuse them.
There are three cumulative conditions for Article 8(5) to apply:
First, the marks at issue must be identical or similar;
Secondly, the earlier mark must have a reputation; and
Thirdly, there is a risk that use without due cause of the trademark
applied for would take unfair advantage of, or be detrimental to, the
distinctive character or the repute of the earlier trademark.
February 2015
Community trademark
In terms of the first condition, similarity of the signs, the courts
task was to determine whether the degree of similarity between LOVOL
and VOLVO was sufficient to cause the public to establish a link or
connection between the two marks, even though the public does not
confuse the marks. The required degree of similarity is therefore less
stringent under Article 8(5) than under Article 8(1)(b).
In their submissions, Volvo argued that the signs both consist of five
letters with similar combinations of the letters V, O and L; that the
letters V and L have a geometrically similar structure, being angular
letters; that both signs share the same vowel sequence (O followed by
O) and a similar consonant sequence (VLV/LVL). Volvo also argued
that both marks are characterised by the syllables VOL and VO and/
or their inversion.
Visually, the court found that there was no similarity; the beginnings
and the endings of the respective signs are different and the applied for
mark contains two Ls, whereas the earlier mark contains two Vs. The
mere fact that both signs contained the letters V, L and O and the
combination VOL was not enough for a finding of similarity.
Volvo had argued that the trademarks were similar because of
the resemblances between VOL and LOV. The court decided that it
was unlikely that consumers would break the short unintelligible word
LOVOL into two syllables and look at each separately. Based on the
grammatical rules of several EU languages, the court found that there
was a presumption that if the consumer was to break LOVOL into
syllables, it would be the syllables LO and VOL rather than LOV and
OL. There was nothing to suggest that the public would read the LOV
element backwards.
The case shows the

creativity of opponents
in constructing new arguments
based on conceptual similarity,
and hints that courts could
be willing to entertain these
arguments provided they
are supported by case-law
and evidence.
that this would lead to consumers asking themselves whether there was
a connection between the old and highly reputed mark VOLVO, and
LOVOL. These arguments were not based on any principle established
by case-law or evidence.
Volvo also relied on a scientific theory that a connection between
the signs could be made in the minds of consumers because there
is a visual dictionary in the human brain, which people develop
when learning to read. This idea was also rejected because the theory
acknowledged that the human brain can recognise differences between
letters, which can outweigh any similarities in the minds of experienced
readers.
The court reiterated that the mere fact that the signs at issue contain
the letters V, L and O and include the letter combination VOL is not
enough to create a connection between two signs in the mind of the
relevant public (who were deemed to have a high level of attention
to the trademarks). The signs were dissimilar and thus the opposition
under Article 8(5) fell at the first hurdle.
The General Court held that OHIMs Board of Appeal was entitled
to conclude that LOVOL could not be refused registration on the basis
of Article 8(5) and Volvos action was dismissed.
Comment
This case is a reminder that the criteria to be taken into consideration
when assessing whether two marks are similar are the same in the
case of a refusal to register a mark based on a likelihood of confusion
(Article 8(1)(b)), and a refusal to register a mark based on damage to the
reputation of an earlier mark (Article 8(5)).
However, a lower degree of similarity between two signs is required
for Article 8(5) to apply, as a likelihood of consumer confusion is not
necessary; it is enough that a connection or link between the two marks
is established.
In relation to inverted trademarks, the decision indicates that it is
more difficult to prove that two signs are similar if neither word has
any meaning. Further, the inverted term should be clearly identifiable
within the mark.
The case also raises issues in relation to what conceptual similarity
is designed to protect exactly. Traditionally, signs are considered
conceptually identical or similar when they share the same or a
corresponding meaning.
Volvo were creative in adopting arguments that consumers would
connect the marks, despite neither mark having any meaning, simply
on the basis that the marks shared the semantic element VOL and the
letters L, V, and O. Arguments suggesting that where the number
of competitors in an industry is limited, consumers are more likely to
connect two trademarks may hold gravitas if supported by evidence.
The case shows the creativity of opponents in constructing new
arguments based on conceptual similarity, and hints that courts could
be willing to entertain these arguments provided they are supported by
case-law and evidence.
Aurally, the court found that the mere fact that the marks shared
the letter combination VOL was not enough to render the marks
similar. This was based on the assumption that the public would not
separate LOVOL into the syllables LOV and OL, that the first elements
of the marks are different, that the letters L and V are pronounced
quite differently and that the rhythm of pronunciation of the words are
different because LOVOL alternates the vowels and consonants.
As neither sign had any meaning, the court decided that it was not
possible to carry out a conceptual comparison. The court rejected the
argument put forward by Volvo, that consumers would be intrigued by
a new trademark for cars, given that the number of car manufacturers
is relatively limited. The court did not find, contrary to Volvos argument,
February 2015
Author
Sharon Daboul is a registered trademark
attorney and senior associate at EIP. Based
in London, Sharon handles UK, Community
and international trademark portfolios, and
her practice includes clearance searches and
the filing, prosecution and maintenance of
trademark rights.
US patent reform
Patent reform:
back on the
table but late
to the party?
A patent reform bill that died in the Senate last year
is poised for a comeback, but its advocates may be
disappointed, say Baldassare Vinti and Daniel Werb
With rumors of resurrection, it is worth revisiting the Innovation
Act with an eye towards whether it will meaningfully impact
patent litigation in light of recent developments in patent law.
The Innovation Act was introduced to the House on 23 October,
2013 by Representative Bob Goodlatte (R, VA-6) as HR 3309 (referred to
here as the Bill).
The Bills sponsors said that it aimed to curb abusive patent
litigation and undercut the business models thought to underlie such
abusive litigation. The Bill passed the House on 5 December, 2013 by a
325-91 vote, but died in the Senate in May the next year, when Senator
Patrick Leahy (D, VA), then Chairman of the Senate Judiciary Committee,
took the Bill off the Committees agenda. He explained that the Bill went
beyond the scope of addressing abusive litigation and had unintended
consequences that would unduly burden patent holders in general.
With Senate control now in Republican hands (and with Senator
Charles Grassley (R, IA) replacing Senator Leahy as Chairman of the
Senate Judiciary Committee and Senator Mitch McConnell (R, KY)
replacing Senator Harry Reid (D, NV) as Senate Majority Leader), there
are reasons to believe that the Bill might be revived in 2015.
President Obama has expressed support for the Bill, so it is lowhanging fruit that could serve as a demonstration of bipartisan
cooperation. In fact, Representative Goodlatte recently announced that
the Bill is back on the top of the House agenda and that he look[s]
forward to working with the new Senate.
With the flurry of seminal Supreme Court patent decisions in 2014,
however, a question that must be asked is whether the Bill, if passed,
will have any practical effect. Decisions such as Alice Corporation v CLS
Bank International (regarding patent eligibility, especially with respect
to software patents) and the Octane Fitness v Icon Health and Fitness
and Highmark v Allcare Management Systems decisions (regarding
attorneys fees) touch on many of the same concerns and goals that
the Bill intended to address. We have also seen that the Patent Trial and
Appeal Boards inter partes review procedure a fairly new procedure
authorised under the America Invents Act has led to the invalidation of
a number of patents, some of which were asserted in what some may
consider abusive litigation. Additionally, the Judicial Conference of the
US unanimously approved abolishment of the Form 18 pleading sheet
for patent infringement complaints under Rule 84 of the Federal Rules
of Civil Procedure. If, as expected, the Supreme Court approves this
change, entities intending to enforce their patents will need to file more
detailed pleadings. This too may impact the number of patent lawsuits
filed and the number of lawsuits that will be permitted to proceed.

On top of all this, there is an ongoing concern among certain
industry members that Congressional intervention might weaken
legitimate patent rights. These opponents urge that Congress take a
sabbatical on patent issues and allow the Federal Circuit to sort out
any legal uncertainties that may remain in the wake of Alice and other
developments.
With this in mind, we explore the likely real-world impact of the
Innovation Act should Congress enact it as law.
With the flurry of seminal Supreme

Court patent decisions in 2014,
however, a question that must be
asked is whether the Bill, if passed,
will have any practical effect.
Heightened pleading standards
The Bill requires patent holders to allege which patents, claims and
infringing products are at issue. More specifically, the Bill amends 35
USC 281 by inserting 281A, requiring an infringement pleading
to identify patents and patent claims, a name, model number or
description of the instrumentalities (broadly defined) alleged to
infringe each claim, and a statement with detailed specificity as to
how each limitation of each claim is met by the accused instrumentality.
The pleading must also describe the accusers principal business,
describe the accusers authority for asserting each patent identified and
the grounds of the courts jurisdiction, describe the acts of inducement
underlying any allegations of indirect infringement, provide a list of all
other complaints known to assert or to have asserted any of the patents
identified and include whether a standard-setting body has specifically
declared the patents to be essential or potentially essential to that body.1
Heightened pleading requirements are thought to diminish a
plaintiffs ability to threaten defendants with unnervingly vague
complaints of patent infringement. Currently, Form 18 sets the
threshold for pleading a claim of patent infringement. Form 18 requires
February 2015
US patent reform
a statement that the defendant has been infringing the asserted patent
by making, selling, and using [the instrumentalities] that embody the
patented invention.
Advocates of the Bill argue that Form 18 enables patentees to assert
vague and unspecified claims against multiple companies with little or
no serious investigation. These advocates argue that a complaint which
lacks sufficient details to support a plausible claim for infringement
opens the door to costly discovery and does not allow a party faced with
a claim of patent infringement to move for early relief since such party
does not have sufficient detail about the asserted claim(s). Under the
logic of the Bill, heightened pleading standards may mitigate the threat
level of certain specious patents and costs for potential defendants by
providing them with details to seek early court intervention.
Regardless of the Bills intent, the heightened pleading provisions
of the Bill might soon be inconsequential because of the Judicial Panels
recommendation to eliminate Form 18, without which patent assertion
would need to satisfy the plausibility pleading standards provided
by Twombly and Iqbal that apply to complaints in general under the
Federal Rules of Civil Procedure. Proponents of the Bill look forward to
higher pleading standards that may tip the scales, at least slightly, in
favour of defendants, reasoning that there is less uncertainty in the face
of more detailed pleadings, an improved ability to quickly dismiss the
case to avoid discovery and a shift in costs that benefits their position in
early settlement. But if Form 18 is phased out, these developments may
materialise even without the Bills passage.
Fee shifting
The Bill replaces 35 USC 285 which currently states that [t]he
court in exceptional cases may award reasonable attorney fees to the
prevailing party with the following:
The court shall award, to a prevailing party, reasonable fees
and other expenses incurred by that party in connection with
a civil action in which any party asserts a claim for relief arising
under any Act of Congress relating to patents, unless the court
finds that the position and conduct of the non-prevailing party
or parties were reasonably justified in law and fact or that
special circumstances (such as severe economic hardship to a
named inventor) make an award unjust.
In other words, under existing law the winning party has the burden
of showing that fee-shifting is warranted, whereas the Bill places the
burden on the losing party to show that fee shifting is not warranted.
More specifically, under the Bill, courts may decline to shift fees only
where the losing partys suit was reasonably justified in law and fact, or
there exist other special circumstances making fee shifting unjust.
The Bills sponsors argue that certain plaintiffs tactically bring
frivolous suits which cost more to defend than to settle, thereby earning
them an unfair payout. Placing the burden on the losing party to provide
a reasonable justification for their conduct, or else pay attorneys
fees, is thought to deter this tactic. It is worth noting that while the
Bill is intended to thwart plaintiffs from filing frivolous patent suits,
the language of the Bill does not distinguish between plaintiffs and
defendants in its expansion of fee shifting, making it just as applicable
to a party faced with a claim of patent infringement.
On the issue of fee shifting, in 2014, the Supreme Court issued the
Octane Fitness and Highmark decisions. Although the Federal Circuit
had previously read exceptional circumstances in 285 as requiring
sanctionable misconduct or subjective bad faith litigation that is also
objectively baseless, Octane Fitness held that district courts should
instead exercise their discretion case-by-case, considering the totality of
the circumstances rather than adhering to the previous framework. The
Highmark decision held that a district courts fee shifting determination
under 285 should be reviewed for abuse of discretion. In light of these

decisions, the practical impact of the Bill is unclear because district courts
have already expanded discretion to shift attorneys fees. Once again,
the Bill may have missed some important patent law developments
during its time away.
Limited discovery
The Bill allows a court to limit initial discovery to claim construction
purposes. More specifically, the Bill amends 35 USC 285 such that if a
court determines that a claim construction ruling is required, discovery
shall be limited, until such ruling is issued, to information necessary for
the court to determine the meaning of the terms used in the patent
claim, including any interpretation of those terms used to support the
claim of infringement.2
The Bills advocates state that although courts have the authority to
phase discovery under Rule 26 of the FRCP, courts have historically taken
a less active role such that the parties themselves negotiate the bounds
of discovery and ask the court to intervene only to resolve gridlock
by way of costly motion practice. Additionally, discovery on all issues
generally occurs simultaneously. By limiting discovery, proponents of
the Bill argue that frivolous infringement suits will likely be less costly to
defend. They also argue that the Bill will rebalance the defendants costto-defend versus cost-to-settle calculation, which is thought to make
patent litigation more efficient and debilitates the litigation strategies
behind abusive patent litigation.
Yet this part of the Bill might also have a circumscribed impact in
light of recent developments. In the aftermath of Alice, defendants
have another arrow in their quiver for early case resolution. In certain
instances, inter partes examination has resulted in a substantive review
of the asserted patent claims before the door to full-throttled discovery
was swung opened. Additionally, the Judicial Conference, mentioned
earlier, also proposed changes to the Federal Rules of Civil Procedure
that are intended to make discovery less burdensome for all types of
litigation, including patent litigation, and the changes are also poised
for approval by the Supreme Court in December 2015. For instance, the
Judicial Conference proposed changes to Rule 26 that are intended to
make parties and judges more explicitly consider proportionality factors
in pursuing and resolving discovery requests. Even without the Bill, steps
are in the works to attempt to limit the scope of early discovery.
In summary, if Congress and the President cooperate and sign an
unmodified version of the Innovation Act, it is likely that it will not be
the game changer that the patent bar anticipated back in 2013 when it
was first introduced.
Footnotes
1. The new pleading requirements are specifically exempted in Hatch-Waxman
cases.
2. There are exceptions. For instance, the court may also allow discovery for
Hatch-Waxman purposes.
Authors
Baldassare Vinti (left) is

a partner in the patent
law and intellectual
property groups of
Proskauer Rose in
New York. His practice
focuses on litigating
patent and false
advertising matters in
federal courts and before the International Trade Commission.
Daniel Werb is a law clerk in the patent law and intellectual
property groups at the firm.
February 2015
UK innovation
Whats wrong
with UK innovation?
Just one UK entity merited a place in a Boston Consulting Group report of the
worlds most innovative companies. Great Britain needs to get better at turning
great ideas into products for the global market, argues Mark Engelman
There can be little doubt that the
patent system is very expensive
indeed and that of the numerous
patents that have been applied for,
few are ever actually successfully exploited. However, whether
only one company of the top 50 of the worlds most innovative firms is
from the UK, as listed in Boston Consulting Groups The Most Innovative
Companies 2014 report, does not necessarily reflect upon the creativity
of the UK public.
Historically, it is an established fact that UK inventors are the very
best in the world. For example Apples UK designer, Sir Jonathan Ives,
unquestionably assisted that company to rise to number one in the
list. What this really reflects is the failure of UK inventors to obtain UK
research grant money to ensure that that creativity remains here.
Dyson, the one UK company listed in Bostons report, is just one
well-known example of that failure, preferring Singapore over the UK
to host a proportion of it engineering. At the other end of the scale
is a Professor Geoffrey Goldspink, Emeritus Professor of Medicine
UCL (and Professor at six other universities including Harvard) who
identified Mechano Growth Factor, a natural substance now being
recognised as causing damaged tissue to repair by mediating stem cell
division. His work is universally recognised in numerous peer reviewed
scientific papers. Nevertheless, his work will now also be exploited by
a Singaporean group of companies rather than by a UK entity. While
it might be said that this is merely a fact of globalisation coupled with
an easier means to technology transfer, Singapore operates a fast and
more sophisticated approach to the funding of Singaporean based
scientific projects.
The expensive nature of patent protection has also led to the
creative industries seeking alternative ways of protecting inventions
other than by means of patent protection. A conference of the UKs
university spin-off companies scheduled a talk last year on precisely that
topic. The UK has seen two government reports come and go without
any real change in the practice of intellectual property protection.
For example the Gower Report of December 2006 recognised
the expensive nature of IP protection, recommending increased
education for UK businesses, cheaper IP litigation and, unsurprisingly,
a harmonised Community patent system which would overcome the
need for translation of patents across numerous different languages,
one of the most expensive steps of patent protection. Formal
agreement on the two EU regulations which made the unitary patent
possible was reached between the European Council and European
Parliament on 17 December 2012. However, only a handful of the
proposed signatories countries signed up.
One of its creatures that will permit a patent owner to sue for
infringement of one European patent (rather than the 14 of the
signatory member states) is the Unified Patent Court, part of which is to
be based in London. It is to be noted that the other missing European

members have refused to reach agreement upon its terms.
Of course it is not all about patents and one further dramatic
change in the IP landscape has come in the form of a decision of the
UK Supreme Court which has in principle permitted claims in respect of
foreign infringement of intellectual property rights to be heard in the
English Courts. Thus, a person whose intellectual property has been
infringed in the UK and say, China, can bring both those claims before
an English judge who will decide upon them in one go. That sort of
litigation land-grab by English judges might be copied elsewhere or risk
leaving foreign IP judges redundant.
The utopia of intellectual property protection must therefore be
with globalisation in mind (and in fact given that we now live in an
internet age) that there will be a single court in which infringement
anywhere on the planet is dealt with. Such a proposal is not as
preposterous as it might sound. We already have global IP bodies such
as the World Intellectual Property Office promoting global forms of
protection; legislation in the form of the Berne Convention as it relates
to the protection of copyright; and the Paris Convention as it relates to
patents and trademarks.
However, the difficulty, which the ununified patent exemplifies,
remains with the geopolitical nature of intellectual property. Those
two words were practically unknown to most people 30 years ago
but are now known to the average nine year old because of our new
generation of young IT savvy internet gamers. But there are still some
countries which refuse to engage in intellectual property.
The Peoples Republic of China remains a stranger to IP enforcement.
It is not alone in that regard. However, the refusal to recognise (or indeed
simply play lip service to) IP rights is seriously damaging to the long term
stability of these economies. A day does not pass when the EU has
introduced yet another measure to curtail the activities of counterfeiters.
However, back in China one can even chose the grade of counterfeit
a consumer seeks across a range of knock-offs of varying quality.
Unchecked IP infringement militates against inward investment. Even
Dyson has been very careful to place his manufacturing subsidiaries in
only those locations in which he can rely upon adequate IP protection.
February 2015
Author
Mark Engelman is a barrister and head
of intellectual property at Hardwicke
Chambers.
Unified Patent Court
UPC recap: have you

been paying attention?
With full ratification edging closer and many hurdles overcome,
the intellectual property team at Ropes & Gray provide
an essential review of the journey so far
The Unified Patent Court (UPC) will provide a structure for

patent rights protection across the European Union (EU) and
have jurisdiction over European patents with or without
unitary effect. The structure and procedures of the UPC are defined
in the UPC Agreement.1
Twenty-five EU member states have signed the UPC Agreement,
which will take effect when ratified by 13 member states, including
France, Germany, and the United Kingdom. Expectations are that
the UPC Agreement, the regulation for the EU Unitary Patent, and
the regulation regarding translation of EU Unitary Patents (collectively
referred to as the Package) will be ratified and come into effect in
2016. As of 9 December 2014, Austria, Belgium, Denmark, France,
Sweden and Malta have fully ratified the Package.
Europe currently has a dual patent granting system. A patent can be
obtained directly from a member state of the EU. Alternatively, a European
patent can be obtained via the European Patent Office (EPO), based on
the European patent convention (EPC), which is a central body of law for
examining and granting European patents. Once a European patent is
granted by the EPO, the patent proprietor can have the European patent
registered under the laws of select European states that are members of
the EPC. The European patent is then essentially replaced by a bundle of
national patents associated with the select European states.
Today, enforcement of patents, such as an infringement action, is
performed on the national level where patent proprietors must enforce
their bundle of national patents on a country-by-country basis. Often,
because of differences in developing the evidentiary record in each
country, the outcome can vary significantly from country to country.
Opportunities for injunctions and damages also vary from country to
country. Hence, the current patent enforcement system has been
criticised as being too expensive given the unpredictable outcomes,
especially for small and medium enterprises.
The European patent with unitary effect (the Unitary patent), once
granted by the EPO, will be enforceable in all EU member states except
for Italy, Spain, and Croatia. Because a Unitary patent will be subject
to the jurisdiction of the UPC, the legal disposition of a Unitary patent
(eg, infringement, revocations, etc) will be handled more efficiently
and with greater legal certainty by the UPC, as opposed to the existing
system where a bundle of patents is handled in multiple European states.
The UPC will be an EU-wide court with EU-wide jurisdiction over
European patents unless a patent proprietor opts out of the UPCs
jurisdiction during an initial transitional period of at least seven years.
The UPC will have jurisdiction over European patents, ie, patents
granted by the EPO with or without unitary effect, but not over patents
granted directly from member states.
The UPC will include a Court of First Instance and a Court of Appeal.
The Court of Appeal will reside in Luxembourg. The Court of First
Instance will be organised into local, regional, and central divisions. Local
divisions may be established in participating EU member states, with
a maximum of four per country. Germany plans to establish multiple
local divisions. Recently, the Republic of Ireland announced that it would
establish a local division as well. Regional divisions may be established
by two or more participating EU member states when local divisions for
those states are not established. For example, Sweden, Lithuania, Latvia
and Estonia have agreed to establish a Nordic-Baltic regional division,
which will be located in Stockholm. The central division will be chaired
in Paris, with sections in Munich and London.
Cases before the central division will be distributed according to
subject matter, as defined by the International Patent Classification
(IPC) scheme. London will preside over life sciences inventions, including
pharmaceuticals, biotechnology, and medical devices. Munich will
preside over auto and mechanical inventions, and Paris will preside over
the remaining categories, including computer-implemented inventions
and telecommunications-related technologies.
Legal challenges to the Package

Because Italy and Spain refused to agree to the Package, the Package
was adopted under an EU legislative procedure known as enhanced
cooperation. Italy and Spain challenged the legality of the Package
by asserting, among other arguments, that the Council of the
European Union (the Council) was not competent to use enhanced
cooperation. On 16 April 2013, the Court of Justice of the European
Union (CJEU) dismissed the actions brought by Spain and Italy stating,
The contested decision does not damage the internal market or the
economic, social and territorial cohesion of the EU. On 22 March
2013, Spain filed a second challenge with the CJEU against the Package
in cases C-146/13 and C-147/13. The second action again challenged
the validity of using enhanced cooperation but also challenged the right
to delegate authority to the EPO to administer the Unitary patent. On
1 July 2014, the CJEU heard the second legal challenge brought by
Spain. On 18 November 2014, EU Advocate General Yves Bot issued
his opinion that the CJEU should dismiss the second legal challenge
to the Package. Although that opinion is non-binding, the CJEU has
traditionally followed the recommendation of the Advocate General,
and a final decision of the CJEU is expected by early 2015.
February 2015
Unified Patent Court

Procedural and infrastructure developments
In March 2013, a Preparatory Committee for the UPC was established
to do the work necessary to implement the UPC. The Preparatory
Committees, objective is to prepare for the establishment of the UPC in
order for it to be operational once the UPC Agreement enters into force.2
Its work programme is defined in a Roadmap that was recently updated
in September 2014.3 There are five areas of work: Legal framework,
Financial Aspect, IT, Facilities, and Human Resources and Training. A
different EU member state is responsible for implementing each area
of work Germany heads the Legal Group, which is responsible for
development of the Legal Framework including Rules of Procedure for
the UPC; France is responsible for Financial aspects; the United Kingdom
is responsible for the development of IT; Luxemburg is responsible for
facilities; and Hungary is responsible for Human Resources and the
training of Judges.
The Legal Group has delegated drafting of the Rules of Procedure for
the UPC to a Drafting Committee consisting of expert judges, lawyers,
European patent attorneys, and business leaders. Versions of the draft
Rules of Procedure have been open to public review during periods of
consultation, resulting in subsequent revisions.
The Preparatory Committee published the 17th Draft Rules of
Procedure for the UPC in October 2014, with a digest that highlights
the latest changes. The changes are incremental and largely technical,
with added clarification regarding languages that will be permitted by
the UPC. One significant revision in the 17th Draft Rules of Procedure,
however, allows for expedited review of certain counterclaims for patent
revocation. Under the framework of the UPC, a local or regional division
will have jurisdiction over infringement actions, while the Central division
will have jurisdiction over separately filed revocation actions.4 Meanwhile,
when revocation is raised as a counterclaim to an infringement action
rather than as a separate action, the local or regional division will have
discretion to take one of three routes: retain the entire case, refer the
entire case to the Central division with the agreement of the parties, or
use bifurcation to refer only the revocation counterclaim to the central
division.5 Much like a US district court can exercise discretion to stay an
infringement suit pending inter partes review (IPR) before the Patent
Trial and Appeal Board (PTAB) in the US, a local or regional division
that bifurcates a case can decide whether to stay or proceed with the
infringement claims.6
New Rule 40(b) of the 17th Draft Rules of Procedure provides for
expedited review of revocation counterclaims that have been bifurcated.
This accelerated timeline would presumably mitigate the effect of an
infringement decision issuing before a revocation decision. Specifically,
the new draft rule provides that, the judge rapporteur of the panel
of the central division shall endeavor to set a date for the oral hearing
on the revocation action prior to the date of the oral hearing of the
infringement action.
An oral hearing to discuss comments regarding the 17th Draft
Rules of Procedure was held on 26 November 2014 at the European
Law Academy. During the hearing, various interested parties, including
judges from member states, raised issues concerning the transitional
opt-out provisions effect on the UPCs exclusive jurisdiction, the UPCs
language regime, the discretionary power of judges to grant injunctions,
the rules of evidence, actions against EPO decisions, appeals procedures,
and the right of representation before the UPC, among other issues. An
18th Draft Rules of Procedure is expected in early 2015.
With respect to Human Resources, Judges have been approved,
and preparations are being made for training. Over 1,300 candidates
have applied to become judges in the UPC, of which 170 have been
identified as legally qualified and 340 additional have been identified as
technically qualified in an initial list of approved candidates released in
July 2014. Regarding IT, a new prototype case management website was
recently launched for testing. The UK Intellectual Property Office recently

published a notice solicting tenders for hosting, case managemen, and
e-filing services from vendors, which it expects to evaluate by February.7
With respect to facilities, the German location of the Central division
will likely be in the German Federal Patent Court on Cincinnatistrasse
in Munich.8 The UK location of the Central division could be The Rolls
Building on Fetter Lane in London. Given that France will host the main
Central division location, it is expected that such a facility will need more
capacity than the branches in the UK and Germany. However, it may be
possible to accommodate the Central division at an existing facility such
as the Tribunal de Grande Instance Paris (Court of First Instance Paris) at
least initially.
In the 7th meeting of the Preparatory Committee on 4 November
2014, the Preparatory Committee indicated that it expects the
procedures and infrastructure of the UPC to be ready for implementation
by late 2015.
Summary
With the expected elimination of uncertainty regarding the legality of
the Package by early 2015 and the expected completion of procedural
and infrastructure requirements by the end of 2015, the UPC continues
to progress toward ratification and implementation by early 2016.
Footnotes
1. EU Document 16351/12 of 11 Jan 2013, the Agreement on a Unified
Patent Court.
2.
An Enhanced European Patent System, The Select Committee and The
Preparatory
Committee,
http://www.unified-patent-court.org/images/
documents/enhanced-european-patent-system.pdf, page 20.
3.
Roadmap of the Preparatory Committee of the Unified Patent Court updated
September 2014, The Preparatory Committee, http://www.unified-patentcourt.org/images/documents/roadmap-201409.pdf.
4. Agreement on a Unified Patent Court art. 33(1), (4).
5. Id art 33(3).
6. Id art 33(3)(b).
7. http://www.unified-patent-court.org/news/86-upc-it-tender-published.
8. No Building for the Unified Patent Court?, Ulrich Blumenroder, Grunecker,
Eplaw Patent Blog, 28 November 2014.
Authors
(Clockwise from top left)

Charles Chuck Larsen and
Edward J Kelly are partners,
Christopher P Carroll is
counsel and Vincent Ling is
an associate at Ropes & Gray.
Chuck is a US lawyer and UK
solicitor, and has a particular
emphasis on intellectual
property strategies and
transactions in the US and
Europe.
Edward provides intellectual
property advice and legal
opinions and represents
clients with appeals at the
US Patent Trial and Appeals
Board, oppositions before
the European Patent Office, and re-examination proceedings at the US
Patent Office.
Christopher provides intellectual property advice and develops
strategies for securing patents, trademarks and copyrights.
Vincent joined Ropes & Gray in 2014 as an associate in the intellectual
property litigation group.
February 2015
LEGAL
DECISIONS
Legal decisions
Court of Justice of the European Union
Huawei Technologies Co Ltd v ZTE Corp; ZTE Deutschland GmbH
Page 58

lntra-Presse SAS v Office for Harmonization in the lntemal Market
and Golden Balls Ltd
Page 60
US Patent Trial and Appeal Board

Amneal Pharmaceuticals, Llc, v Supernus Pharmaceuticals, Inc
Page 62
US District Court of California

Page 64
US Court of Appeals for the Federal Circuit

Page 66
England and Wales High Court (Chancery Division)

Dalsouple Societe Saumuroise Du Caoutchouc v (1) Dalsouple Direct Ltd
(2) Dalhaus Ltd
Page 68

International Stem Cell Corporation v Comptroller General of Patents,
Designs and Trade Marks
Page 70
February 2015
Legal decision: Europe
Enforcing SEPs
in the EU
THE CASE:
Huawei Technologies Co Ltd v ZTE Corp; ZTE Deutschland GmbH
20 November 2014
Advocate General Wathelet has advised the CJEU on the application of competition law to the seeking
of injunctions for FRAND-encumbered patents. Pat Treacy and David George explain the details
The Huawei v ZTE preliminary reference
to the CJEU concerns the question of
when, if at all, competition law should
constrain the enforcement of standardessential patents (SEPs) which are subject
to declarations to grant licences on Fair
Reasonable And Non Discriminatory
(FRAND) terms. The reference concerned
the rules on abuse of dominant position
under Article 102 TFEU and, in particular,
the circumstances under which seeking
injunctive relief might breach these rules.
The proceedings leading to the CJEU

proceedings began in April 2011. Huawei
sued ZTE before the German Regional Court
in Dsseldorf (Landgericht Dsseldorf) on a
patent relating to base stations implementing
the LTE (Long Term Evolution) mobile
telephony standard, a fourth generation (4G)
technology developed through the European

Telecommunications Standards Institute (ETSI).
Huawei declared the patent essential to the
LTE standard and gave a FRAND declaration.
Between November 2010 and March 2011
Huawei and ZTE engaged in negotiations
relating, among others, to the patent.
Huawei named a royalty, which it considered
to be reasonable. ZTE sought a cross-licence
arrangement. In January 2013, ZTE proposed
a cross-licence arrangement under which it
would pay a royalty of 50 to Huawei. ZTE did
not pay this sum to Huawei nor did it deposit
the sum into the German court.
In the infringement proceedings Huawei
sought an injunction, the rendering of accounts,
the recall of products and the assessment of
damages. ZTE contested infringement. The
German court established that the patent was
essential to the LTE standard and was infringed
by ZTE.
By way of defence to injunction, ZTE
alleged that Huawei had abused a dominant
position contrary to Article 102 TFEU by
seeking injunctive and other relief in respect of
a FRAND-encumbered SEP.
The German court ruled, applying the
case law of the German Federal Supreme
Court (Bundesgerichtshof), known as the
Orange Book Standard,1 that ZTE had failed
to establish that defence. Under the Orange
Book Standard, an alleged infringer must (in
summary): (a) make an unconditional offer to
conclude a licence; (b) and, if implementing the
patent, meet the obligations incumbent upon
it under the offer, in particular by rendering
accounts of use and by paying the patentee (or
depositing into court) the relevant royalty. ZTE
had failed to comply with either condition.
The German court observed that a
European Commission (Commission) press
release concerning its (then live) investigation
into Samsung Electronics2 stated that the
February 2015
SEP to obtain injunctive relief preventing the

implementer from implementing (infringing) its
technology without licence. Given the essential
character of the technology protected by the
SEP, an injunction could potentially totally
exclude the implementer from the market.
The implementer may allege that the conduct
of the SEP holder in seeking an injunction
and using the prospect of market exclusion
to extract terms, which may be non-FRAND,
constitutes an abuse of dominant position
contrary to Article 102 TFEU.
Background
In many high technology industries, including
mobile telephony, industry participants work
together via standard setting organisations to
develop standardised technology to ensure,
inter alia, compatibility between devices, which
implement the relevant standard. Where
technology contributes to a standard is patent
protected, the technology may be essential to
the standard if it is not possible to implement
the standard without infringing the relevant
patent.
During the standard setting process, patent
holders are asked to give declarations to license
their patented technology on Fair, Reasonable
And Non-Discriminatory (FRAND) terms in
the event that their technology is selected for
incorporation in the standard. Procedures exist
to seek alternative technologies if a patent
holder is unwilling to give a FRAND licensing
declaration. Thus, standard-essential patents
(SEPs) are often subject to FRAND declarations.
Disputes may arise if a SEP-holder and a
manufacturer of devices implementing the
standard cannot agree upon licence terms for
the relevant technology. The SEP-holder may
consider that it has proposed FRAND terms,
which the implementer has refused to accept
and vice versa. If the negotiations are without
success the SEP-holder may wish to rely on its
ZTE proposed
a cross-licence
arrangement under
which it would pay
a royalty of 50 to
Huawei. ZTE did
not pay this sum to
Huawei nor did it
deposit the sum into
the German court.
The dispute
Legal decision: Europe

Commission had reached the preliminary view
that bringing an action for an injunction was
unlawful under Article 102 TFEU, where the
case concerned an SEP; the SEP-holder had
given a FRAND declaration; and the alleged
infringer was willing to negotiate such a
licence. The German court concluded that,
if the approach set out in the Commissions
press release were correct, the action for an
injunction would have to be dismissed as an
abuse.
Given the apparent conflict between
the Orange Book Standard case and the
Commission approach, the German court
stayed the proceedings and asked the CJEU for
guidance on the correct approach.
The opinion
Advocate General Wathelet (the AG) observed
that the CJEU needed to determine, in the
light of competition law, the framework within
which the licensing of a SEP on FRAND terms
is to be negotiated. The AG distinguished
the Orange Book Standard because that case
concerned a de facto standard where the SEPholder had not given a FRAND declaration.
Applying Orange Book Standard to an SEPholder who had given a FRAND declaration
would result in the over-protection of the SEPholders interests. On the other hand, following
the line apparently contemplated in the
Commission press release which might prevent
a SEP-holder from seeking an injunction where
the infringer had simply expressed a vague
and non-binding willingness to negotiation,
would result in the under-protection of the SEPholders interests. The AG therefore sought to
identify a middle path.
The AG observed that the CJEU should
strike a balance between the SEP-holders
right to intellectual property and his right
of access to the courts on the one hand
and the implementers freedom to conduct
business and undistorted competition on the
other. The AG remarked that Huawei did not
waive its right to seek an injunction through
its FRAND declaration and that seeking
an injunction cannot in itself constitute an
abuse of dominance. However, he also noted
that the right to intellectual property is not
absolute and must be reconciled with the
rules on competition. Huawei had accepted
that a royalty on FRAND terms was sufficient
compensation for use of its technology and the
AG likened its commitment to grant licences
on FRAND to a licence of right. Nonetheless,
access to the courts could be circumscribed
only in exceptional circumstances.
The opinion states that the CJEUs previous
case law on refusal to licence intellectual
property is only partially applicable where a
FRAND declaration has been given.3 Huaweis
notification of the patent to ETSI and FRAND

declaration had had an impact on the content
of the LTE standard itself. This created a
relationship of technological, and therefore
economic, dependence between the SEPholder (Huawei) and implementers of the
LTE standard. He considered that the CJEUs
case law holds that the exploitation of such
dependence by a dominant undertaking using
methods different to those governing normal
competition is abusive under Article 102
TFEU. Further, it is an abuse for a SEP-holder
to exploit economic dependence by, acting
at variance with its commitment to grant
licences on FRAND terms, towards an infringer
which has shown itself to be objectively ready,
willing and able to conclude such a licensing
agreement by seeking an injunction in such
circumstances.4 In consequence the AG felt
that it is only possible to establish an abuse
of dominance after examining the conduct of
both the SEP-holder and the implementer.
The AG suggested guidelines to
assist the German court in applying Article
102 TFEU. The SEP-holder should: (1) alert
the implementer in writing, with reasons,
specifying the alleged infringement of the
relevant SEP before commencing proceedings;
and (2) present the implementer with a written
licence offer on FRAND terms, specifying all
relevant terms including the royalty. In return,
the implementer, must respond in a diligent
and serious manner to the offer and, if it
disagrees with the offer, must promptly
submit a reasonable counter-offer. Conduct
which was purely tactical and/or dilatory and/
or not serious would be insufficient.5 As usual
in a reference procedure, it was for the German
court to assess whether the conduct of Huawei
and ZTE complied with these guidelines.
Importantly, the AG suggested that
an implementers conduct could not be
considered dilatory if it asks for court or arbitral
determination of FRAND terms, rather than
concluding negotiations. However, in that
event, it is appropriate for the SEP-holder to
seek a bank guarantee for the payment of
royalties or to request that the implementer
deposit a provisional sum into court. The
implementer must also be free to reserve the
right, after conclusion of a licence, to challenge
the validity and infringement of the SEP.6
Finally, the AG opined that the above
opinion should apply mutatis mutandis to the
other forms of relief similar to injunctive relief.
However, Article 102 TFEU did not preclude a
SEP-holder seeking the rendering of accounts
nor damages for past infringement of a SEP.
Comment
Following the reference by the German court,
but before the opinion was handed down,
February 2015
the Commission concluded its Samsung

investigation, accepting formal commitments;
it also concluded its Motorola investigation
via an infringement decision.7 The opinion is
broadly in line with these two decisions, but
arguably places greater weight on the conduct
of implementers. It also suggests: that a SEPholder may request payment of a guarantee;
and that infringement/validity proceedings
should not delay licence-setting proceedings.
The opinion leaves certain practical issues
unanswered. For example, whether or how a
party can remedy past non-FRAND behaviour.
It also lacks substance on key questions such
as the nature of the counteroffer to be made
by the implementer, and what delay may be
acceptable in negotiations, leaving this to the
national court reviewing the facts. The CJEU is
also yet to rule on the substance of the FRAND
commitment, but overall the opinion begins
to clarify at least some procedural aspects of
FRAND negotiations. The CJEUs reaction will
be interesting.
Footnotes
1. KZR 39/06, judgment of 6 May 2009.
2. COMP/C-3/39.939.
3. RTE and ITP v Commission (EU:C:1995:98); IMS
Health (EU:C:2004:257).
Opinion paragraphs 73-74, which cites Volvo
4.
(EU:C:1988:477).
5. Opinion paragraph 88.
6. Opinion paragraphs 93-94.
7. Case AT.39939 Samsung Decision C(2014) 2891
final of 29 April 2014; Case AT.39985 Motorola
Decision C(2014) 2892 final of 29 April 2014.
Authors
Pat Treacy is a partner and head of the

competition team at Bristows. Pat has
specialised in EU law and competition
law for almost 30 years and has been
involved in several landmark cases at EU
and national level including in relation to
FRAND and SEP issues.
David George is an associate in the
competition team at Bristows. David
advises on contentious antitrust
matters concerning both Articles 101
and 102 TFEU, including standalone
private litigation in the High Court and
investigations by European and national
competition authorities.
Legal decision: EU
Golden Balls bounced

back to OHIM
THE CASE:
Intra-Presse SAS v Office for Harmonization in the Internal Market and Golden Balls Ltd
20 November 2014
Oppositions to two Community trademark applications for the mark GOLDEN BALLS on the
basis of an earlier Community trademark registration for BALLON DOR are heading back
to the Office for Harmonization in the Internal Markets Board of Appeal
The Ballon dOr, which could be translated
into English as Ball of Gold or Golden
Ball, is the Fdration Internationale
de Football Associations (FIFA) annual
award for the male footballer of the year.
Cristiano Ronaldo was announced as the
winner of the award for 2014.
In 2007, Golden Balls, a UK company
run by husband and wife team Gus and Inez
Bodur that operate a Golden Balls sports store
and sportswear brand in London, made two
Community trademark (CTM) applications for
GOLDEN BALLS, in respect of a variety of
goods and services, including various sporting
articles, entertainment, sporting and
cultural activities and production of television
and entertainment programmes. Intra-Presse
(which owns the trademark rights for the
Ballon dOr) opposed these applications on
the basis of its earlier CTM registration for
(CTMR), without considering the extended

protection afforded to marks with a reputation
under Article 8(5) CTMR - even for those goods
and services for which it found no likelihood of
confusion (this appears to be an oversight on
its part). Following appeals by both parties, the
General Court annulled the Board of Appeals
decision on Article 8(1)(b), ruling that there
was no likelihood of confusion because the
marks only had a weak or even very weak
degree of conceptual similarity. It also ruled
that the signs lacked the requisite similarity for
the purposes of Article 8(5).
The CJEU has now dismissed Intra-Presses
appeal in respect of Article 8(1)(b) and upheld
the General Courts finding that there was
no likelihood of confusion between the two
marks. However, in respect of Article 8(5), it
ruled that, as the General Court had concluded
that there was a low level of conceptual
BALLON DOR, which covered most of the

goods and services covered by Golden Balls
applications.
The journey so far

The table (Figure 1) summarises how IntraPresses oppositions have fared before the
Office for Harmonization in the Internal
Markets (OHIM) Opposition Division, the
Board of Appeal, the General Court and now
the Court of Justice of the European Union
(CJEU). Although the Opposition Division
rejected Intra-Presses opposition, the Board
of Appeal partially upheld its appeal in respect
of the goods and services that it considered to
be identical or highly similar to those covered
by Intra-Presses earlier mark. It reached
this decision on the basis that there was a
likelihood of confusion under Article 8(1)(b)
of the Community Trade Mark Regulation
Figure 1: Intra-Presses oppositions
Tribunal
Findings
Article 8(1)(b) likelihood of confusion
Article 8(5) extended protection for marks

with a reputation
Opposition Division
No likelihood of confusion. Marks were slightly

similar conceptually but dissimilar overall.
Signs dissimilar, so not applicable
Board of Appeal
Likelihood of confusion for some goods and

services. Marks were conceptually identical or
at the least extremely similar.
Did not consider
General Court
No likelihood of confusion. At most the marks

only had a weak or even very weak degree
of conceptual similarity.
Signs lacked requisite similarity, so did not consider

further.
CJEU
Upheld General Court judgment.
As there was some similarity, all relevant factors should

have been considered to determine whether the relevant
public would make a link between the marks.
February 2015
Legal decision: EU
similarity between the marks, it should have

gone on to consider whether that low degree
of similarity was sufficient for the relevant
public to make a link between them.
Key points from the CJEU

judgment
Although Intra-Presse ran a number of
arguments (most of which were rejected), of
particular interest is that the CJEU declined to
review the General Courts assessment that
the degree of conceptual similarity was weak
to very weak in the context of Article 8(1)
(b), but set aside its decision that the level of
conceptual similarity was insufficient for the
purposes of Article 8(5).
Conceptual similarity in the context of
Article 8(1)(b)
The CJEU found that the General Courts
decision on the degree of conceptual similarity
between the marks was not open to review.
This was because the General Courts decision
was made on the basis of its appraisal of the
facts, namely that:
(i) the signs at issue differ as regards
the language enabling their respective
conceptual content to be understood
and (ii) that linguistic difference is
capable of preventing the relevant
public, at least to some degree, from
making an immediate conceptual
comparison (paragraph 61).
OHIM argued before the CJEU that the
intellectual process of translation was not
a relevant criteria for the assessment of
conceptual similarity, but should only be
considered when conducting the overall
assessment of whether there was a likelihood
of confusion. It submitted that the degree
of conceptual similarity depends only on the
closeness of the concept that the two marks
evoke and not the speed with which the public
would make a connection between the two
signs. Although the CJEU did not deal with
this argument directly, it did note that by
conceptual similarity, [Intra-Presse and OHIM]
mean the manner in which the relevant public
understands the signs at issue. This suggests
that the CJEU agreed that the conceptual
meaning of the marks had to be judged by
reference to the understanding of the relevant
public, which might require that public to
translate one or both marks to determine
their meaning. This approach would fit with
previous General Court decisions that a shared
meaning in different languages is not sufficient
to establish conceptual similarity, if the relevant
public does not understand the meaning of
one or both marks. So, in Case T-265/09 (EL
LANCERO/LE LANCIER), although the marks

were direct translations in Spanish and French,
they were not found to be conceptually
similar as the average Spaniard had limited
knowledge of French and the expression Le
Lancier did not belong in the basic vocabulary
of that language. Likewise, in Case T-357/10
(CORONA/KARUNA), the two marks were
the Spanish and Russian words for crown
but there was no evidence to show that the
Russian speaking relevant public in the Balkan
states would associate the word Karuna (either
in its Cyrillic or Latin alphabet form) with the
Spanish word Corona.
It therefore appears
that this long running
dispute, which has
garnered its fair share
of press attention,
will be going into
extra time.
Previous cases that have addressed

conceptual similarity in different languages
suggest that it will often prove difficult
to establish a likelihood of confusion. In
Case T-33/03 Osotspa Co ltd v OHIM (HAI/
SHARK), the Court of First Instance (now the
General Court) heard an appeal concerning
an opposition to an application for the word
HAI based on the earlier figurative mark
which depicted the word shark designed
to represent the shape of a shark. Hai is a
translation of shark in German and Finnish
and the CFI found that there was conceptual
similarity which depended on prior translation.
Similarly in Case T-534/10 Organismos
Kypriakis Galaktokomikis Viochanias v OHIM
(HELLIM/HALLOUMI), the General Court
found that there was conceptual similarity
between HELLIM and HALLOUMI; the
Turkish and Greek words for the same type
of cheese. In both cases, the court decided
February 2015
that there was no likelihood of confusion

because other factors including the significant
visual and aural differences between the
marks, cancelled out the conceptual similarity
between the marks.
The similarity threshold for an Article 8(5)
assessment
The CJEU has previously made it clear that even
faint similarity between the marks at issue
requires there to be an overall assessment of all
relevant factors to determine whether there is
a likelihood of confusion under Article 8(1)(b),
or whether the relevant public would make a
link between those marks for the purposes of
Article 8(5) (Case C552/09 P Ferrero v OHIM,
paragraph 66). As discussed previously, the
CJEU declined to review the General Courts
conclusions that the only similarity between
the marks was a (at most) weak degree of
conceptual similarity. Nevertheless, it ruled that
the General Court should have carried out:
An overall assessment of the marks
at issue in order to ascertain whether
that low degree of similarity was
nevertheless sufficient, on account of
the presence of other relevant factors
such as the reputation or recognition
enjoyed by the earlier mark, for the
relevant public to make a link between
those marks (paragraph 76).
The CJEU also stressed that the degree of
similarity required under Article 8(1)(b) and
Article 8(5) is different. Article 8(1)(b) requires
sufficient similarity for there to be a likelihood
of confusion, but Article 8(5) may apply with
a lesser degree of similarity, as it was only
necessary for the relevant public to establish a
link between the marks.
Where next?
Intra-Presses oppositions will now return to
the Board of Appeal for it to consider whether
they should succeed on the basis of Article
8(5). It therefore appears that this long running
dispute, which has garnered its fair share of
press attention, will be going into extra time.
Authors
David Rose is a partner and Giles Harvey

is a trainee in the IP group at King &
Wood Mallesons.
Legal decision: US
Preparing for the

coming wave of pharma IPRs
THE CASE:
Amneal Pharmaceuticals, Llc, v Supernus Pharmaceuticals, Inc
The US Patent Trial and Appeal Board (written decisions)
9 December 2014
In the first trio of Hatch-Waxman IPR decisions, the PTAB upheld the patentability of all challenged claims.
Paul Hastings Gerald J Flattmann, Jr, Gregory A Morris and Evan D Diamond explain
On 9 December 2014, the Patent Trial and
Appeal Board issued final written decisions
in three inter partes review (IPR)
proceedings upholding the patentability
of US Patent Nos 8,206,740, 8,394,405, and
8,394,406 (the Chang patents) covering
the formulation for Oracea (doxycycline
capsules, 30 mg immediate release, 10
mg delayed release). See IPR2013-00368,
Paper No. 94; IPR2013-00371, Paper No. 96;
IPR2013-00372, Paper No. 92 (the Oracea
IPR decisions).
These are the first final written decisions
to be issued in an IPR proceeding concerning
pharmaceutical patents in the context of a
Hatch-Waxman dispute between brand and
generic companies and they are the first
win for the brand in that context. A Paul
Hastings team (led by Gerald J Flattmann, Jr
and Gregory A Morris) represented Galderma
Laboratories and Supernus Pharmaceuticals
in the Oracea IPRs, as well as in prior wins
regarding the related Chang 532 patent
following a July 2011 bench trial before Judge
Stark in the District of Delaware and a Federal
Circuit appeal decided in August 2013. Foley
& Lardner was also lead counsel of record in
the IPRs.
In view of the Oracea IPR decisions, the
outlook for brand pharmaceutical companies
facing potential or pending IPRs directed at
their key patent rights appears less grim than
once thought. Nonetheless, the Oracea patent
dispute represents an increasingly common
pattern in the Hatch-Waxman context of
parallel district court and IPR proceedings,
and more pharmaceutical IPR challenges can
be expected in the future. To maximize the
odds of prevailing, in-house counsel should
begin pre-litigation diligence early, using
outside counsel with strong litigation skills as
well as comfort in both the district court and
IPR fora. In-house counsel should also ensure
Oracea is a specially formulated once-daily

doxycycline composition indicated for the
treatment of the inflammatory lesions
(papules and pustules) of rosacea. The Chang
patents cover this novel once-daily, low dose
formulation and its use to treat rosacea. Oracea
is marketed in the United States by Galderma
Laboratories, LP, and the Chang patents are
assigned to Supernus Pharmaceuticals, Inc.
and exclusively licensed to Galderma.
The petitions for the Oracea IPRs were filed
by Amneal Pharmaceuticals, which has sought
Food and Drug Administration (FDA) approval
for a generic version of Oracea. At the time

Amneal filed its IPR petitions, Amneal was
the defendant in a Hatch-Waxman litigation
before the United States District Court for the
District of Delaware (Stark, J) involving the
Chang 532 and Chang 740 patents. Amneal
continued to challenge the validity of these
patents in the district court litigation and
then in the IPRs, challenged the Chang 740
patent and other related Chang patents
despite the same district court having upheld
the validity of the Chang 532 patent in prior
litigations against Mylan, Lupin, and Impax,1 in
decisions affirmed per curiam by the Federal
Circuit.2
In both proceedings involving Amneal,
Amneal argued that the Chang patents
were obvious over a published international
patent application relating to formulations of
tetracycline drugs (Ashley), either alone or
in combination with an issued patent relating
to formulations of the drug minocycline
(Sheth). In December 2013, the Board
instituted IPRs for the Chang patents, on
the grounds of alleged obviousness over a
combination of Ashley and Sheth. In its final
written decisions, however, the Board ruled
that Amneal failed to show Ashley and Sheth
rendered the Chang claims unpatentable
even under the Boards preponderance of the
evidence standard.3
The Boards decisions relied significantly
on its analysis of expert testimony, including
declaration and deposition testimony,
regarding the differences between the Chang
patents and Amneals alleged prior art. In
particular, the Board credited expert testimony
proffered by the patentee and discredited
Amneals argument to the contrary in
support of its finding that the combination of
Sheth and Ashley does not disclose or render
obvious the formulations claimed in the Chang
patents.4
February 2015
that measures are taken to clear the way for

litigation counsel to take the lead in parallel
district court and IPR proceedings. Finally, inhouse counsel should budget appropriately for
potential parallel actions, including for critical
work in expert discovery.
The Boards
decisions relied
significantly on its
analysis of expert
testimony, including
declaration and
deposition testimony,
regarding the
differences between
the Chang patents and
Amneals alleged
prior art.
The Oracea IPR decisions
Legal decision: US
Practical implications
The groundbreaking Oracea IPR decisions
show first-hand that pharmaceutical patentees
can overcome IPR challenges to their patents.
Despite apparent disadvantages to the
patentee in IPR proceedings, such as a lower
preponderance of the evidence burden of
proof on patentability,5 the wider broadest
reasonable interpretation standard for claim
construction,6 the Oracea IPR decisions suggest
that the outlook is less grim for patentees
than once thought. Indeed, pharmaceutical
patents that survive a challenge under the
lower burdens of an IPR may be strengthened
against challenges in district court litigation.
Nonetheless, pharmaceutical patentees
facing potential or pending IPR proceedings
can still expect a tough road ahead. It is typical
in the Hatch-Waxman context that district
court cases and IPRs proceed in parallel as
opposed to the technology industry context,
where district court cases are frequently stayed
pending resolution of IPRs. Generics have used
IPRs to take a second bite at the apple on
invalidity positions, eg by relying on different
experts and different arguments between the
parallel proceedings. Such parallel proceedings
can raise the cost and complexity of litigation,
eg by multiplying the number of depositions
and potentially exposing witnesses to multiple
depositions on the same subject matter, as well
as creating overlapping litigation schedules.
Pharmaceutical patentees can also expect
to face increasingly more IPRs. IPR challenges
parallel to litigation have recently been filed by
large companies such as Mylan and Sandoz,
as well as by earlier adopters such as Apotex
and Amneal. And in January 2015, a US
hedge fund manager announced his plan
to file IPRs against the patents of around 15
brand pharmaceutical companies apparently
without any intention to market generic
versions of drugs covered by such patents.7
In view of these developments, brand
pharmaceutical companies should prepare as
a matter of course for potential IPRs as well as
district court litigation.
Action items for in-house counsel

Early preparation and diligence is critical for
a pharmaceutical patentee to maximize its
chances of prevailing in an IPR. At the diligence
stage, in-house counsel can hire outside
litigation counsel to analyse key patents
and potential prior art to spot issues, begin
to develop litigation strategies, and retain
potential expert witnesses. In the interest of
efficiency and strategic continuity, there are
significant advantages for using the same
outside counsel for the diligence phase and for
any subsequent IPR or district court litigation.
In-house counsel should strongly consider
seeking outside counsel that have proven

litigation skills, as well as experience in litigating
district court and IPR proceedings in parallel.
Despite procedural differences from district
court cases, IPRs are essentially litigations,
and they favor counsel who can successfully
navigate challenging expert depositions and
present persuasive written and oral argument.
Preparing to use the same counsel in district
court and IPRs which are likely in parallel
can also reduce the costs of coordinating
between proceedings and avoid the risk of
conflicting strategies between proceedings.
Ultimately, while
pharmaceutical IPRs
appear to be on the
rise, the Oracea IPR
decisions illustrate that
such IPRs are winnable
for the brand.
To enable outside litigation counsel to
hit the ground running when an IPR petition
arrives, in-house counsel should ensure that
district court protective orders or Offers of
Confidential Access are drafted to expressly
allow litigation counsel to participate in IPRs.
While substantial case law suggests that typical
patent prosecution bars silent on IPRs will not
preclude litigation counsel from participating in
IPRs (excluding amendment proceedings),8 the
best course may be to overtly clear the path for
litigation counsel before an IPR petition is filed.
Finally, in-house counsel can prepare
for Hatch-Waxman IPRs by budgeting
appropriately, with an eye towards parallel
district court proceedings. Hatch-Waxman
IPRs may involve a substantial number of
witnesses, including technical experts as well
as economics experts on commercial success
issues. As the Oracea IPR decisions illustrate,
expert testimony may be central to the Boards
final analysis, and careful work with experts
offensively and defensively is critical to IPR
litigation. Expert witnesses may potentially be
subject to multiple depositions, eg a petitioners
expert with multiple declarations, or a
patentees expert who has presented opinions
in parallel district court and IPR proceedings.
Thorough preparation for expert depositions is
also essential in IPRs, both defensively, in view
of strict rules limiting objections by outside
counsel during questioning,9 and offensively,
given the general preclusion of live witness
testimony at IPR oral argument.10 Extra care
is also needed to coordinate parallel district
February 2015
court and IPRs, which may result in substantial

costs during periods of overlapping key tasks,
eg district court fact discovery alongside IPR
expert discovery. In-house counsel can help
manage such coordination costs, however,
by using the same outside counsel for district
court and IPR proceedings.
Ultimately, while pharmaceutical IPRs
appear to be on the rise, the Oracea IPR
decisions illustrate that such IPRs are winnable
for the brand even in the face of parallel
district court action. In-house counsel would
be well-served to prepare early and thoroughly
to increase their chances of prevailing in IPR
proceedings.
Footnotes
1. Research Found of State Univ of NY v Mylan
Pharms Inc, 809 F Supp 2d 296 (D Del 2011).
2. Research Found of State Univ of NY v Mylan
Pharms Inc, 531 Fed Appx 1008 (Fed Cir 2013).
3. See, eg, IPR2013-00368, Paper 94, at 15.
4. See, eg, id at 11-14.
5. See 35 USC 316(e).
6. See 37 CFR 42.100(b).
7. See Reuters, US Hedge Fund Plans to Take
on Big Pharma Over Patents, 7 January,
2015,
available
at
http://www.reuters.
com/article/2015/01/07/pharmaceuticalshaymancapital-idUSL3N0UM42O20150107.
8.
See, eg, Google Inc v Jongerious Panoramic
Techs, LLC, IPR2013-00191, Paper No 50, at
4 (13 Feb, 2014); Endo Pharms Inc v Amneal
Pharms, LLC, No 12-cv-0806, 2014 WL 3950900
(SDNY 13 Aug, 2014).
9. See 77 Fed Reg 48756, 48772 (14 Aug, 2012).
10. See ibid at 48768.
Authors
Gerald J Flattmann, Jr
(top left) is a partner,
Gregory A Morris (top
right) is of counsel, and
Evan D Diamond (left)
is an associate in the
life sciences intellectual
property group of Paul
Hastings.
Gerald and Evan are based in New York,
and Gregory is based in Chicago.
This article reflects only the present
considerations and views of the authors,
which should not be attributed to Paul
Hastings, or to any of its or their former or
present clients.
Legal decision: US
THE CASE:
The changing copyright

landscape for pre-1972
recordings

US District Court of California
22 September 2014
The recent Flo & Eddie cases against Sirius may be the wake-up call needed to spur
Congress into taking serious legislative action, says Donald Curry
Members of the 1960s singing group
The Turtles recently sent shock waves
through the music industry in two
copyright infringement lawsuits against
broadcasting company Sirius XM, seeking
compensation for Sirius unlicensed
performances of their old hits (including
Happy Together) on satellite radio and
over the internet. Because sound recordings
made prior to 1972 are not protected by the
US federal copyright statute, the plaintiff, Flo
& Eddie (a corporation formed by two original
Turtles members that owns the rights to the
master sound recordings), relied on state law
protections. In the first decision, a California
federal court granted Flo & Eddie summary
judgment that Sirius performances of The
Turtles recordings violated a California statute
directed to pre-1972 sound recordings. In
the second, potentially more far-reaching,
decision, a New York federal court denied
Sirius motion for summary judgment and
ordered Sirius to show cause why summary
judgment against it should not be entered
for common law copyright infringement and
unfair competition.
Copyright protection for sound

recordings
Copyrights are a creature of both federal and
state law. In the music area, the 1909 Federal
Copyright Act gave owners of copyrights
in musical compositions the right to have
mechanical reproductions of the composition
made, eg, in sound recordings/records, but the
sound recordings themselves were not given
copyright protection. A copyright owner who
exercised his mechanical reproduction right
was required to grant a compulsory licence to
others who wished to make a recording of the
musical composition.
In general, federal law protected
published works, whereas state law protected
unpublished works. State law protection for

sound recordings varied by state and took the
form of civil and criminal statutes, as well as
judge-made law using theories of common
law copyright, misappropriation, unfair
competition and conversion.
In response to rampant record and tape
piracy, Congress in 1971 enacted the Sound
Recording Amendment to the Copyright
Act, which for the first time provided Federal
protection against the duplication of sound
recordings. The amendment applied to
recordings fixed on or after 15 February 1972.
Creators of sound recordings were given the
exclusive right to reproduce the recordings,
but still were not given a performance right.
In 1973, the Supreme Court of the US
clarified that states had the power to protect
sound recordings in Goldstein et al v California,
holding that federal copyright law did not
preempt a California piracy law as it related to
pre-1972 sound recordings.
The landscape changed dramatically
when Congress enacted the 1976 Copyright
Act, which was a major revision to the 1909
Act. The 1976 Act continued to provide
sound recordings as a reproduction right but
not a performance right. The Act explicitly
preempted state statutory and common law
providing rights equivalent to copyright, but
also exempted state statutory and common law
rights for pre-1972 recordings from preemption
until 2067. The noted commentator UCLA
School of Law professor, David Nimmer, points
out that the exemption appears to have been
due to a misunderstanding on the part of the
Department of Justice that the preemption
provision of the Act would somehow leave
the field clear for record piracy of pre-1972
recordings if the exception was not made.
It was not until 1995 that Congress gave
owners of copyright in sound recordings a
performance right, when it enacted the Digital
February 2015
Performance Right in Sound Recordings Act.

However, that act applied only to recordings
after 1972, and the performance right was
limited to digital audio transmissions. The right
was made subject to compulsory licensing for
some transmissions, and was exclusive for
other transmissions.
In sum, prior to the two recent decisions
discussed herein, pre-1972 recordings were
only protected under state laws. Also, it
was widely believed that such laws did not
provide copyright owners of such recordings
protection against unauthorised performances
of those recordings.
The Flo & Eddie v Sirius XM

cases
In September 2014, a federal court in California
granted Flo & Eddie summary judgment on
their claims that Sirius satellite broadcasting
and internet streaming of 15 pre-1972
Turtles recordings violated Flo & Eddies public
performance rights in those recordings.1 Flo &
Eddie had licensed the rights to make, sell and
use the recordings for commercial purposes
for four decades, but had never licensed any
radio station. Flo & Eddie alleged that Sirius
conduct violated a California copyright statute
and constituted unfair competition, conversion
and misappropriation.
The California statute specifically dealt
with pre-1972 recordings and stated that [t]
he author of an original work consisting of
a sound recording initially fixed prior to 15
February 1972, has an exclusive ownership
therein until 15 February 2014, as against
all persons except someone who made an
independent cover of the original recording.
Applying standard principles of statutory
construction, because the rights granted were
broad (an exclusive ownership as against
all persons) and a particular exception to
those rights had been specified, the court
Legal decision: US
interpreted the statute as granting an exclusive
performance right to the copyright owner.
Of interest, the California statute had been
amended in 1982 to focus on pre-1972
recordings to reflect the federal preemption of
copyright created by the 1976 Act.
In November 2014, Flo & Eddie received
another favourable decision against Sirius, this
time in a federal district court in New York.2 Flo
& Eddie alleged that Sirius radio and internet
services violated their rights under New York
common law to both reproduce and publicly
perform their recordings. Stating that New
York unquestionably provides holders of
common law copyrights in sound recordings
with an exclusive right to reproduce those
recordings, the court rejected Sirius fair use
defence to copying The Turtles recordings.
In contrast, the court indicated that whether
New York common law provided an exclusive
right to publicly perform those recordings
presents a much thornier question one of
first impression, and one that has profound
economic consequences for the recording
industry and both the analog and digital
broadcast industries. The court answered
that question in the affirmative.
The court noted that New York courts
have recognised public performance rights in
holders of common law copyrights in plays
and films, and rejected Sirius argument that
the absence of New York case law on whether
there was a public performance right for
sound recordings meant there was no such
right, stating,
[A]cquiescence by participants in
the recording industry in a status
quo where recording artists and
producers were not paid royalties
while songwriters were does not show
that they lacked an enforceable right
under the common law only that
they failed to act on it.
Also, the court pointed out that when
Congress amended the Copyright Act in 1971
to protect copyrights in sound recordings, it
explicitly carved out performance rights from
that protection, evidencing that performance
rights are part of the normal bundle of rights
in a copyright that had been enjoyed by
holders of federal copyright in performable
works since 1897 or earlier. No such carve
out existed in New York common law.
The court acknowledged that its holding
was unprecedented (other than the
companion Flo & Eddie case against Sirius
in California), and would have significant
economic consequences, such as upsetting
radio broadcasters settled expectations of
not having to pay royalties for broadcasting pre1972 recordings, and exposing broadcasters
to liability. Moreover, if states were to adopt

varying ways of regulating pre-1972 sound
recordings, that development could potentially
upend the analog and digital broadcasting
industries.
The New York decision has broader
implications than the California Flo & Eddie
decision, in that the California case primarily
involved the construction and application
of a California statute directed specifically
to pre-1972 sound recordings. In contrast,
the New York court rested its decision solely
on principles of New York common law, and
other courts applying their own common law
may well look to the New York decision for
guidance. Flo & Eddie have similar lawsuits
pending against Sirius and Pandora in Florida
and California, respectively.
The exclusion of
pre-1972 recordings
from protection
under the 1976 Act
was not supported
by any reasonable
rationale, and in fact,
is inconsistent with the
overarching purpose of
that Act to establish a
single federal system of
copyright and preempt
all equivalent rights
under state law.
Since under federal law there is still
no general performance right for post1972 recordings (the right being limited to
performance by digital audio transmission),
these recent decisions, if upheld, would
provide broader protection for pre-1972
recordings than for those created thereafter,
a fact noted by the court in the New York
case. Also, neither New York nor California
provide for compulsory licensing, unlike the
federal regime. This raises the possibility of
significant damages awards, and increases
the bargaining power of copyright owners in
licensing negotiations.
Legislative initiatives
In December 2011, register of copyrights,
Maria Pallante, released the comprehensive
report3 Federal copyright protection for
February 2015
pre-1972 sound recordings (report) in

response to a legislative directive, to study the
desirability and means of extending federal
copyright protection to such recordings. The
reports principal recommendation was that
federal protection should apply to such
recordings with special provisions to address
ownership issues, term of protection, transition
period, and registration.
In May 2014, the House of Representatives
introduced the Respecting Senior Performers
as Essential Cultural Treasures Act (RESPECT
Act), which would provide for payment of
compulsory royalties to owners of copyrights
in pre-1972 sound recordings for performance
and reproduction of those works in the same
manner as if the recordings had been fixed
after 15 February 1972. Notably, this Act
would not accord federal copyright protection
to pre-1972 recordings, which would continue
to be protected under state laws.
Summary
As noted in the Copyright Office report,
the exclusion of pre-1972 recordings from
protection under the 1976 Act was not
supported by any reasonable rationale, and
in fact, is inconsistent with the overarching
purpose of that Act to establish a single
federal system of copyright and preempt all
equivalent rights under state law. Various bills
that Congress has introduced over the years,
including the RESPECT Act, have attempted
to deal with particular problems created by
the exclusion from federal protection of pre1972 recordings, but none reflect the type
of comprehensive approach to amending
the Copyright Act reflected in the report.
The recent decisions in the Flo & Eddie cases
against Sirius may be the wake-up call that will
spur Congress to take serious legislative action.
Footnotes
1. (Flo & Eddie, Inc v Sirius XM Radio, Inc, No CV1305693 PSG (RZx), 2014 WL 4725382 (CD Cal 22
Sept 2014)).
2. (Flo & Eddie, Inc v Sirius XM Radio, Inc, No 13 Civ
5784 (CM), 2014 WL 6670201 (SDNY 14 Nov
2014)).
3. http://copyright.gov/docs/sound/pre-72-report.
pdf
Author
Donald Curry is the

chair of the copyright
practice group at
Fitzpatrick, Cella,
Harper & Scinto.
He has extensive
experience in patent,
trade secret and
copyright litigation
in the computer, pharmaceutical and
chemical industries.
Legal decision: US
DDR Holdings gives

breathing space
for software
THE CASE:
United States Court of Appeals for the Federal Circuit
5 December 2014
After a software claim was finally found eligible subject matter under Alice,
was it the good news coders have been waiting for? Yes and no, says Stephen Shaw
We are halfway through the decade, but
thanks to the Supreme Court, patent
practitioners may feel like they just
turned back the clock to 2010. That year
gave us the high courts ruling in Bilski
v Kappos,1 which affirmed the Federal
Circuits decision2 from two years earlier,
and left patent attorneys (and the USPTO
Examining Corps) not only wondering
how to respond, but also asking what the
future would bring.
Less than five years later, the Supreme
Court gave us an answer to that question in
the Alice3 decision, along with a slew of new
questions, the answers to which are only
starting to appear.
In the first few months since the Supreme
Court issued its Alice decision on 19 June,
2014, it would be fair to characterise most
of these answers as bad news for both
patent attorneys and clients seeking patent
protection, especially in the software and
business method areas. Whether it is the
Federal Circuits ruling in cases such as
Ultramercial4 and its ilk, or what now seems
like a daily discovery of a new district court or
Patent Trial and Appeal Board (PTAB) decision
wielding Alice to strike down a patent as
being directed to ineligible subject matter,
many have wondered when some good news
would arrive.
That day may have been 5 December,
2014, when the Federal Circuit issued its
first post-Alice opinion upholding the validity
of software-related method claims under
section 101. Judge Ray Chen, writing for a
2-1 majority panel in DDR Holdings v Hotels.
com,5 found that the claims of US Patent
No 7,818,399 constituted eligible subject
matter, were not invalid, and were infringed.
DDR: reversing a trend,

or noise in the signal?
Prior to digging into the details of the 399
patent, Judge Chen first spends several
informative pages of the DDR opinion
describing the case law leading to this
decision, including the now-ubiquitous twostep test enunciated in Alice.6 This two-step
approach, utilised later by the court, first asks
whether the invention is directed to a patentineligible abstract idea. If so, the second
step is to consider the elements of each claim,
both individually and in combination, in an
attempt to locate an inventive concept, or
some element or combination of elements
sufficient to ensure the claims are directed
to significantly more than the underlying
abstract idea.7
The 399 patent is directed to approaches
that solve the problem of a host website,
offering products and services sold by third
parties, losing visitors when the visitors click
on a link (eg, an advertisement) for one of the
third-party products and services. As becomes
important later in the opinion, the normal
and expected operation of that click would
be to transport the visitor away from the host
site to the third-party site (or a site designated
by the third party). Instead, the approaches
claimed in the 399 patent create a hybrid web
page constructed from visual content that
looks and feels like the host site, and other
content allowing the visitor to purchase the
third partys products and services without the
visitor actually being transported to the third
partys website.8
Judge Chen begins by discussing whether
the computer-implemented claims of the 399
patent are directed to an abstract idea, noting
that the claims recite neither a mathematical
algorithm nor a, fundamental economic or

longstanding commercial practice.9 He then
acknowledges the difficulty in identifying the
particular abstract idea in the case, by pointing
out that even NLG (the defendant-appellate)
couldnt decide on a consistent definition of
what exactly constituted the abstract idea.
Perhaps taking a cue from NLGs inability
to articulate the abstract idea, the court punts
on directly answering the question. Instead,
the court held that, under any characterisation
of the purported abstract idea, the claims
satisfy the significantly more second step of
the Alice/Mayo test. The opinion leads off this
analysis with a paragraph, the substance of
which is revisited several times in the opinion,
and that likely will be cited in many cases to
come, As an initial matter, it is true that the
claims here are similar to the claims in the cases
described above in the sense that the claims
involve both a computer and the internet.
But these claims stand apart because they do
not merely recite the performance of some
business practice known from the pre-internet
world along with the requirement to perform
it on the internet. Instead, the claimed solution
is necessarily rooted in computer technology
in order to overcome a problem specifically
arising in the realm of computer networks.10
As discussed above with regard to the
technology at issue, while the routine,
conventional functioning of the internet
would be for visitors to be transported away
from the host site upon clicking on the thirdparty link, the claims of the 399 patent
describe an approach which upends this
traditional result. Instead of simply reciting
a manner of using the internet to perform
a well-known business practice, the claims
describe an inventive concept for resolving a
February 2015
Legal decision: US
particular internet-centric problem.
It is this distinction upon which Judge
Chen relies to distinguish the elephant in the
room: Ultramercial. He immediately cautions,
not all claims purporting to address internetcentric challenges are eligible for patent, but
unlike Ultramercial, the 399 patents claims are
distinguishable because, they do not broadly
and generically claim use of the internet to
perform an abstract business practice (with
insignificant added activity).11 In another
often-to-be-cited passage, he states, unlike
the claims in Ultramercial, the claims at
issue here specify how interactions with the
internet are manipulated to yield a desired
result a result that overrides the routine and
conventional sequence of events ordinarily
triggered by the click of a hyperlink.12
Also key to the courts holding is that by
adding additional specific features unique
to the inventive concept, the claims at issue
did not preempt other solutions to the same
general problem; for example, there are many
other ways other than the claimed approach
to increase sales by making two web sites look
similar. This monopolisation of alleged abstract
ideas is a primary concern of the Alice court,
and is a factor in identifying the significantly
more required of claims by the second step of
the Alice/Mayo test.
The Post-DDR World: how much

has changed?
Given the developments since Alice, it is
tempting to view the DDR case as favorably as
a man whose boat has capsized in the ocean
might view a life vest; however, while the man
may not be drowning, hes still stuck in the
middle of the ocean.
Similarly, while the DDR case confirms
that the mere presence of a generic computer
implementation in a claim does not necessarily
render it patent ineligible, we are still in an
ocean of uncertainty with regard to what
exactly is patent eligible in the software and
business method fields.
Clients seeking to patent their innovative
software technologies and protect money
spent in software R&D can breathe a sigh
of relief that, insofar as DDR remains viable
moving forward, software patents likewise are
still viable. DDR confirms the holding in both
Bilski and Alice that there is no categorical
exclusion of either business methods or
computer software from patent eligibility,
as long as a viable inventive concept can be
found. Notably, DDR mentions in dicta that the
invention at issue was not as technologically
complex as data compression, which could
be interpreted as signaling support for patents
directed to more complex computer-related
technologies.
While that is good news for the future, it

is clear that the thousands upon thousands of
software and business method patents already
issued are at risk despite DDR. A review of
district court cases citing DDR at the time of
writing confirms this grim reality. Of the seven
cases citing DDR since the time of writing, five
found all patents-in-suit invalid under Alice as
directed to ineligible subject matter. The other
two found at least some of the patents-in-suit
invalid for the same reason, but upheld the
validity of the remaining patents-in-suit thanks
at least in part to DDR. Patents that merely
mention computers, but do not provide a
technological connection between their claims
and any kind of actual software innovation,
are likely to fall in this new regime.
When drafting
and prosecuting
software-related
cases, the claims
shouldclearly recite
a technological leap
or connection that
brings them outside
the realm of merely
computerising
a known approach.
clear during prosecution that the claims recite

technological solutions that have no parallel
outside of the technological context at issue. In
this way, claims may be found patent-eligible
even though they may be related to abstract
ideas.
Patent practitioners should utilise any
evidence that the claimed invention contains
limitations that may be enough to qualify as
significantly more when recited in a claim
with an abstract idea, as mentioned favourably
in Alice. For example, limitations that provide,
improvements to another technology or
technical fields or, improvements to the
functioning of the computer itself.
Footnotes
Bilski v Kappos, 561 US 593 (2010).
1.
2. In re Bilski, 545 F 3d 943, 88 USPQ 2d 1385 (Fed
Cir 2008).
3.
Alice Corp v CLS Bank Intl, 573 US___, 134 S Ct
2347 (2014). Notably, the word software does
not appear in the decision.
4. Ultramercial Inc v Hulu LLC, _F.3d_, 2014 (Fed Cir
14 Nov, 2014).
5.
DDR Holdings LLC v Hotels.com LP, __ F.3d __,
2014 WL 6845152 (Fed Cir 5 Dec, 2014).
6.
Alice, of course, clarifying that courts should
analyse patent-eligibility of software and
business method patents using the two-part
framework set forth in Mayo Collaborative Servs
v Prometheus Labs, Inc, 566 US ___, 132 S Ct
1289 (2012).
7. Alice, 573 US ___, 134 S Ct 2347 at 2355
(2014).
8. The court deemed system claim 19 of the 399
patent representative.
9.
DDR Holdings LLC, __ F.3d __, 2014 WL
6845152 at *10.
10. Id.
11. Id, at *11.
12. Id.
To-do for in-house counsel

When drafting and prosecuting softwarerelated cases, the claims should focus on
aspects of an invention that address issues
specific to the environment in which it
functions (eg, the internet), rather than
those which merely use the environment to
perform a function. The claims should clearly
recite a technological leap or connection
that brings them outside the realm of merely
computerising a known approach.
Patent applications should present the
invention as a solution to a technical challenge
only faced because of the underlying use
of computer technology, and the solution
as manipulating computer technology in a
way that yields a desired result that differs
from the routine, usual, and conventional
outcome. Patent practitioners should make it
February 2015
Author
Stephen Shaw is a
partner in the San
Francisco office
of Novak Druce
Connolly Bove +
Quigg LLP. Mr.
Shaws practice
focuses on patent
preparation and
prosecution in computer and softwarerelated inventions. Shaw has served as
counsel for a variety of high technology
clients, from Fortune 500 companies to
startups. In addition to private practice,
Shaw served as a patent attorney at
Qualcomm, Adobe, and Gracenote.
Legal decision: UK
Rubber wrangle
shows value of agency
agreements
THE CASE:
Dalsouple Societe Saumuroise Du Caoutchouc v (1) Dalsouple Direct Limited (2) Dalhaus Limited
England and Wales High Court (Chancery Division)
21 November 2014
A trademark dispute between a flooring company and its long-standing overseas distributor could have
been avoided with written permission, says Jonathan Thurgood
The story starts in the 1940s in Saumur in
western France with a small manufacturer
of rubber products, Dalsouple Socit
Saumuroise du Caoutchouc (Dalsouple
France). That business began by
re-treading car tyres before developing
in the 1960s into rubber flooring, and
in particular rubber floor tiles. In France
those tiles were seen as an unexciting
commodity product, despite the prestige
and reputation that would later grow up
around the Dalsouple brand in the UK.
That reputation was built up almost singlehandedly by a British entrepreneur, Timothy
Gaukroger. It was while Gaukroger was a
director of a British company, Jaymart, in the
1980s that he first encountered the Dalsouple
product and recognised the potential for
its development. While the Dalsouple
product was relatively neglected by Jaymart,
Gaukroger persuaded Raymond Mortoire, the
owner and head of Dalsouple France, to grant
Gaukrogers own company exclusive rights to
the sale of Dalsouple flooring in the UK.
Initially acting as Frances agent (selling
on commission, not taking title or possession
of the stock), Gaukroger and the head of
Dalsouple France soon concluded that it
would be mutually beneficial for Gaukrogers
company to become a distributor instead.
That meant Gaukrogers company would itself
enter into sales contracts with UK buyers,
make orders for the flooring from France in
its own name and take title of the products
from Dalsouple France. To mark the change
in status, Gaukroger sought and obtained

written permission for his company to adopt
Dalsouple as part of his companys name.
Thus in 1991 his company began trading as
Dalsouple Direct Limited (Dalsouple UK).
Gaukroger, as the
entrepreneurial brains
behind the venture,
was instrumental in a
dramatic expansion in
the product range.
manufactured by third parties but sold under

the Dalsouple name. Throughout, the French
business focussed on factory production
and selling into its domestic market, but the
real growth of its revenues came from its
relationship with the UK business. At one
point, Dalsouple UK was responsible for 70%
of the turnover of the French company.
Despite the death of the head of
Dalsouple France in 2001, the British and
French companies continued to work
closely together for another eight years until
Dalsouple France was eventually sold. The
buyer of Dalsouple France then set about an
aggressive new strategy; unilaterally changing
terms of business and long-standing financial
arrangements with Dalsouple UK and
attempting to wrest back title to trademarks
registered to Mr Gaukroger or his company.
The legal dispute

The business relationship went from
strength to strength. Gaukrogers vision and
marketing ability took an ordinary product
and turned it into a highly sought after floor
covering, specified by designers and architects
from Somerset to Glasgow. Gaukroger, as the
entrepreneurial brains behind the venture, was
instrumental in a dramatic expansion in the
product range, with bright colours and textures
being added throughout the 1990s and into
the 2000s. Gaukroger also pushed to expand
the product range to include roll-form flooring
It was the ownership of the UK rights to the

DALSOUPLE trademark that gave rise to the
dispute in this case. In 1998, Mr Gaukroger
had applied for and obtained registration of
the DALSOUPLE mark in the UK in his own
name. Following the sale of Dalsouple France
in 2009, the company sought in 2011 to
register the DALSOUPLE mark for itself in the
UK. Dalsouple UK opposed that application
on the basis of its prior UK and CTM rights
in DALSOUPLE and the goodwill it claimed
to have established in the brand in the UK.
Dalsouple France subsequently applied to have
Dalsouple UKs British registration declared
February 2015
Legal decision: UK
invalid (having already begun invalidity
proceedings against the CTM).
Dalsouple UK contended that Raymond
Mortoire, the former head of Dalsouple
France, had given verbal consent to Gaukroger
to register the DALSOUPLE trademark in his
own name. Under cross-examination before
the UK IPO, Gaukroger added details of the
circumstances giving rise to the consent. He
recalled that Bruno Mortoire, the son of the
head of Dalsouple France who was on the
sales and marketing side of the business,
encouraged him to register the mark in the
UK, pointing out that their German agent had
registered the mark in Germany too. However,
given the antagonism that existed between
Bruno and Raymond, his father, Gaukroger
stated that he approached Raymond for his
permission, which was given.
time that Gaukroger was lying.

In the course of the appeal hearing
Mr Justice Arnold delivered an ex tempore
judgment dismissing the application to adduce
further evidence. He held that Dalsouple
France had clear and reasonable opportunities
to adduce witness evidence of Bruno Mortoire
both before and during the first hearing before
the UK IPO, but had elected not to do so. The
application to adduce further evidence failed
the first condition set out in Ladd v Marshall,
namely that the evidence could not have
been obtained with reasonable diligence for
use at trial. It was also not open to Dalsouple
France to change tack on appeal and accuse
Gaukroger of lying in his testimony when
that charge was not put to him under crossexamination.
The decision of the UK IPO

Having heard four witnesses give testimony
under cross-examination (two for each side),
the Hearing Officer found that Gaukroger
and his wife (who was also fully involved in
the management and marketing of Dalsouple
UK) appeared both honest and trustworthy.
He took the view that Gaukroger provided
considered and very plausible answers, while
Pierre Mortoire was not always wholly
consistent in his answers, but he was both
honest and sincere.
Weighing up all the evidence, he
concluded on the balance of probabilities
that oral consent to the registration of the
DALSOUPLE mark by Gaukroger had been
given. Accordingly, Frances allegation that
Gaukrogers registration had been applied
for in bad faith was rejected. Dalsouple UKs
opposition to Dalsouple Frances application
was therefore upheld. In light of this decision
the Hearing Officer decided not to go on to
consider the parties competing claims to
ownership of the goodwill in the UK.
The appeal
Dalsouple France appealed to the High Court.
It argued that the Hearing Officer did not
have enough information on which to find
that consent had been given, that it was
not clear what had been consented to, that
the consent needed to be in writing, and
that the consent was not sufficiently clear,
specific and unequivocal. At the hearing
before the UK IPO, Dalsouple France had not
accused Gaukroger of lying in his evidence
(or reconstructing the events in his mind),
but on appeal Dalsouple France also sought
to adduce evidence from Bruno Mortoire to
deny that the conversation referred to by
Gaukroger under cross-examination had
taken place implicitly asserting for the first
In hindsight,
an hour or two
spent on a good
trademark
attorney could
have avoided
1,000 hours
in subsequent
litigation.
In his written judgment on the appeal,

Arnold J dismissed all of Dalsouple Frances
grounds of appeal.
A key issue at trial was the question of the
relevant nature of consent and the standard
of evidence to be applied. Arnold J held that
consent to the registration of the DALSOUPLE
trademark
must
be
unequivocally
demonstrated (the requirement set out by
the CJEU in Zino Davidoff in the context of
the parallel import of goods into the EU), but
accepted that an express statement of consent
(which was claimed here) did amount to valid
consent. Accepting that the UK IPO is an
expert tribunal that had the benefit of seeing
and hearing the key witnesses, he found no
fault with the Hearing Officers decision to
accept on the balance of probabilities that
consent had been given.
Key lessons
The case illustrates the importance of recording
business critical and legally significant decisions
February 2015
in writing and have them formally agreed

between the parties. The case would probably
never have started had permission to register
the trademark in the UK been confirmed in
writing. In hindsight, an hour or two spent
on a good trademark attorney could have
avoided 1,000 hours in subsequent litigation.
Cross-examination of witnesses to an
event can be crucial in evaluating the truth of
claims that can be impossible to adjudicate by
reference to written statements alone. Counsel
skilled at cross-examination can make the
difference in a case that depends on testing
the credibility of witnesses.
Not all lawyers and attorneys are the same:
find a good one to assist you. The agency
agreement referred to in the case which the
parties entered into did not properly record
the nature of the business relationship as it
was by the date that it was drawn up. It also
failed to deal directly with IP issues at all. Had
the commercial lawyers who drew up the
agreement investigated the nature of their
clients business and discussed the matter with
their IP department then a much more suitable
document addressing the business and IP
situation would likely have been arrived at.
Take the right advice from the right
people. There was some argument before the
UK IPO as to the meaning of an amendment
to the agency agreement that had been
drafted/proposed by a firm of accountants. A
properly drafted amendment document ought
to have avoided the particular arguments that
occurred in this case.
IP is valuable but only if there is a business
behind it. Although the parties were unable to
resolve their differences and a dispute became
unavoidable, more astute business decisions
on the part of Dalsouple France could have
preserved a valuable business relationship and
made a settlement of the IP dispute more likely
in a way that ultimately would have benefitted
both sides.
Author
Jonathan Thurgood
who acted for
Dalsouple UK in this
dispute is a partner
and trademark
attorney/litigator
at Carpmaels &
Ransford (Trade
Marks). He has
significant experience advising and
acting for companies in complex
and valuable trademark and related
contractual disputes, as well as the
full breadth of attorney work in the
clearance, registration and enforcement
of trademark rights worldwide.
Legal decision: EU
Opaque CJEU clarifies human

embryos in Brstle
THE CASE:
International Stem Cell Corporation v Comptroller General of Patents, Designs and Trade Marks
The Court of Justice of the European Union
18 December 2014
Upon reviewing the much anticipated ruling, Beatriz San Martin questions if the CJEU has erred
Under Article 6(2)(c) of the Directive on
the Legal Protection of Biotechnological
Inventions (98/44/EC) (the Biotech
Directive), inventions whose commercial
exploitation includes the use of human
embryos for industrial or commercial
purposes are considered unpatentable.
On 18 December 2014, in Case C-364/13
International Stem Cell Corporation v
Comptroller General of Patents, the Court of
Justice of the European Union (CJEU) ruled
that in order not to be classified as a human
embryo, a non-fertilised human ovum must not,
in light of current scientific knowledge, have the
inherent capacity of developing into a human
being. The fact that a parthenogeneticallyactivated human ovum commences a process
of development is not sufficient for it to be
regarded as a human embryo.
Background
In the September 2014 edition of Intellectual
Property Magazine, Hannah Smith Willis and
I commented on the opinion of Advocate
General (AG) Cruz Villaln in this case and
provided a general background.1 This article
focuses on the decision of the CJEU.
By way of brief background, the
preliminary reference was made by the
UK High Court, following an appeal by
International Stem Cell Corporation (ISC) to
the UK Intellectual Property Offices rejection of
two patent applications concerning methods
of producing pluripotent human embryonic
stem cells from parthenogenetically-activated
oocytes. Parthenogenesis in this context
being the activation by chemical or electrical
manipulation of unfertilised ova to initiate the
process of cell division and development.
CJEU decision
The CJEU effectively followed AG Villalns
opinion although the court phrases its
conclusion in slightly different terms:
An unfertilised human ovum whose
division and further development have been

stimulated by parthenogenesis does not
constitute a human embryo if, in the light
of current scientific knowledge, it does not, in
itself, have the inherent capacity of developing
into a human being, this being a matter for the
national court to determine.
By analogy to the courts earlier decision
in Case C-157/99,2 current scientific
knowledge is something that is sufficiently
tried and tested by international medical
science, although the only guidance provided
in this earlier decision as to what is required
is that scientific views prevailing in national
medical circles and the views of one member
state are unlikely to suffice.
Comment
The CJEU has been mindful to phrase its
decision as a clarification to Brstle, rather
than admit that there was a technical error
or that the court was misdirected or had
misunderstood the science in Brstle.
Whether the use of unfertilised human
ova stimulated by parthenogenesis might
be objectionable on societal and ethical
grounds and unpatentable under Article
6(1) of the Biotech Directive is an entirely
separate question to whether such cells
constitute a human embryo. Did the CJEU
also misunderstand the science or was it
misdirected in relation to the creation of cells
by somatic cell nuclear transfer? In this respect,
it is notable that Brstle makes no mention of
the requirement to remove the nucleus from
an unfertilised ovum before transplanting
the nucleus from a mature human cell. The
carve-out in ISC with respect to parthenotes
could equally apply to cells created by somatic
cell nuclear transfer, as long as these do not
have the inherent capacity to develop into a
human being. Whether the law can be applied
in this way would, however, inevitably require
a further reference to the CJEU. It is a great
pity that, given the importance of Brstle to
February 2015
the cellular therapy and regenerative medicine

industry, the court failed to provide clear
guidance of general application.
The author does not know what
submissions were made by the parties,
member states and the European Commission
in Brstle, except for what is included in the AG
opinion and in the CJEU decision itself. Unlike
court proceedings before the Royal Courts of
Justice in England, the court file is not made
available for public inspection in proceedings
before the CJEU. Consequently, interested third
parties are unable to gain access to any written
observations or evidence relied upon from the
CJEU Registry. The UK Freedom of Information
Act 2000 can, in theory, be used to request
copies of written observations submitted by
the UK government but, surprisingly, such
requests are not necessarily successful. While
the parties to the proceedings or their legal
counsel can be approached directly, they are
under no obligation to provide case material
to third parties. In this authors personal view,
this lack of transparency in CJEU proceedings
is an affront to a system of open justice which
all governments should aspire to.
Footnotes
1.
Ova but not out: a tale of patents and
parthenotes. p.60-61 in Intellectual Property
Magazines September 2014 issue.
2.
BSM Geraets-Smits v Stichting Ziekenfonds
VGZ and HTM Peerbooms v Stichting CZ Groep
Zorgverzekeringen, ECLI:EU:2001:404.
Author
Beatriz San Martin is
a partner at Fieldfisher
with a degree and
PhD from the University
of Cambridge,
specialising in genetics,
cellular and molecular
biology.
STRATEGY
Ideas and inspiration for in-house counsel
Strategy
How outsourcing transformed
Microsofts patent team into
a well-oiled machine
February 2015
Strategy: outsourcing
How outsourcing made

Microsoft a patent
powerhouse
After putting the company among the top-10 patent filers in the US, ex-Microsoft attorney
Jeffrey L Ranck reveals how to implement a successful outsourcing strategy
As Albert Einstein once said, We cannot solve our problems
with the same thinking we used when we created them. That
inspirational idea was particularly helpful during my tenure as an assistant
general counsel at Microsoft. About a decade ago, we were tasked with
tripling the number of patents filed each year from about 1,000 to
3,000, with little additional headcount or budget. As IP professionals,
the tune of doing more with the same or less isnt a new one, but if
we can learn to think differently about these challenges (including how
we do our jobs and define our roles), we should be able create new
ways of protecting our corporate IP worldwide without eating profits in
the process.
The goal was to put Microsoft in the top 10 patent filers in the US.
Although we had previously taken measures to become more efficient,
such a huge goal would require reengineering not only our department,
but also our thought processes.
We brought the challenge to our outside counsel to help identify
solutions. Stymied, they acknowledged the difficulty of the situation, yet
their only real suggestion was to suggest we not cut their fees. It was
time to think differently.
Defining roles
First, we had to change how we thought about our jobs. We asked
the IP team what it was we needed to focus on and how others could
help. We took a page from the Roman god Janus and looked back and
forward with these questions:
1. If you had extra time and money (or other resources), what would you
do today to add value?
2. If you could be assured the task would be done 100% correctly and
competently, what would you be willing to have someone else do so
you could focus on more important things?
The first question helped us decide where to spend our internal time
and money, while the second helped us understand what tasks were
best left to others through outsourcing.
We determined that the unique value we brought as in-house
attorneys and staff centered more around deciding what should
be protected to achieve business goals and less around actually
protecting it. We also brought less value in administrative functions,
technical analysis and labour-intensive work. Someone else could build
a business around these tasks, which would free us to focus on the

unique strategic value our in-house team could provide. Although many
activities could be outsourced, however, we knew we would still have
ultimate responsibility to ensure quality.
By giving up much of our work, we could focus on becoming true
strategic partners to those running the company as well as the outside
teams assigned to complete the work. We could also focus more on
what IP should be protected, how to protect it and where to protect
it. We also had time to consider how we should use our patents to
support the companys business strategy.
Identifying resources
Over the years, Microsoft built a strong and large IP team, with
more than 100 in its in-house patent group, key law firm partners,
even more virtual firm attorneys and an even bigger contingent
working with one or more outsourced vendors.
We provided a mix of channels to offer patent drafting and
prosecution services. This allowed us to achieve a better blended rate for
drafting and prosecution, while maintaining key partner relationships.
We concentrated our work in larger chunks with key law firm partners
to take advantage of economies of scale. By working through an
annual planning process and helping our law firms understand how
many cases they were likely to receive in the coming year, they could
plan their internal resources to provide the services we needed. We
also worked out a schedule of fixed fees for the services our law firms
provided.
We also created our own virtual firm by building relationships
directly with individual attorneys. These attorneys would personally
handle the work instead of handing it off to an associate. In exchange
for lower fees, we provided them with paralegal and filing service
support from our own in-house (or outsourced) resources. This
arrangement was excellent for solo practitioners and small firms,
because like us, they were able to focus on what they wanted to do,
and not worry about the extra labour that came with the assignments.
For our vendor-sourced services, we needed to identify the value
chain and select which activities outsourced vendors would perform
and identify partners to provide the services. One model devised to
help identify what type of partner we were looking for focused on the
skills needed (specialist or general), whether the location should be
February 2015
Strategy: outsourcing
local or remote, and what type of resource (in house, outside counsel
or vendor) we should consider.
Microsoft ultimately decided to outsource the following services:
Paralegal and administrative services (the most basic and easiest
to assign):
Proofing and certificate of corrections
Application filing
Docketing
Firm invoicing
Technical services (generally requiring specialised skills and
individual training):
Prior art search
Invalidity search
Landscapes
OA technical review
Patent analytics
Patent to product mapping
Patent to standard spec mapping
Translations
Legal services and other specialised tasks:
OA proposed amendments
Invalidity analysis with claim charts
Patent drafting
Bringing it all together

Once we had identified the necessary work and resources, we
concentrated on accomplishing the work. Thoughtful assignments that
referred back to our initial two questions helped develop processes to
maximise the effectiveness of all resources.
Finding and building relationships with outsourced vendors was
an effort we had never undertaken, but a key aspect to meeting our
filing and budgetary goals. Although we made mistakes, we found very
good partners who shared and helped implement our vision. We
outsourced the majority of outsourced work (outside of drafting and
filing) to one or two partners in India. Along the way, we developed the
following best practices:
1. Take small steps and never stop. When Australian potato farmer
Cliff Young stunned the world by winning the ultra marathon from
Sydney to Melbourne (875 km) two days ahead of his next competitor,
we understood the wisdom of this mantra. All other racers were elite
athletes who stopped when they got tired. Cliff, neither elite nor fast,
never stopped, and that put him far ahead. We started small, with
the easiest services to find (paralegal and administrative services), and
rolled at least part of the savings back into our vendors to move up to
higher level services (technical and legal services). Over time, we were
able to outsource more complex, higher-value work while realising
higher-level savings at almost every step.
2. Let vendor(s) do the heavy lifting. While you are both working
for the same team, they are in charge of running their own business.
However, work to make them a true partner in your efforts and make
them feel part of the success of your business.
3. Solicit and offer feedback. An open and honest dialogue
about how your relationship is going will help keep the work going
smoothly.
4. Differentiate yourself. We provided direction and training well
above that of our vendors other clients. This helped build our
relationship and establish us as a standout client. Also make an effort
to extend your brand to your outsource team, giving them an identity
tied to your company to help boost their engagement and morale.
5. Assume no turnkey services. Although vendors will pitch a service

as fully turnkey, we found a mismatch between services provided and
our specific needs. Assume you will need to collaborate to build the
necessary services.
6. Take a long-term approach. Building your own best vendor will
take time and commitment from both parties. Remember, that like
Cliff Young, the best vendor may be the most unlikely.
Putting it into practice

Now that weve outlined how Microsoft reengineered its IP department,
lets look at an example outcome. The following doesnt represent
the exact process used, but it illustrates how various resources come
together to focus on a defined result. For drafting and prosecuting a
patent, here was our typical process:
The in-house team works to better understand the business strategy
for a product and identify the IP needed to support that strategy. It
has time to do this in an effective manner due to outsourcing some
of its old job.
The in-house team defines the portfolio strategy for the product. It
relies on analysis of the existing patent portfolio by technical resources
(vendors) to determine which existing patents apply to the product.
The vendor can provide claim charts, portfolio statistics for technical
categories and other such information and analysis.
Based on the portfolio strategy, the in-house team instructs outside
counsel on what to protect to realise the portfolio strategy, including
areas of focus for new patents.
The in-house team might conduct an export review for the subject
matter of the new patents to determine whether US only resources
are needed for new patents.
Outside counsel works with the inventors to draft and file the
patent(s) with administrative support from the vendor, and some
additional searching and analysis as desired.
Finally, worldwide prosecution is entered as the in-house team makes
the major decisions (especially with regard to budget) of where to
file patents and if any patents should be abandoned, largely based
on data from the vendor. Outside counsel and vendors (such as
centralised translation services) then implement those decisions.
Final thoughts
By stepping forward to meet a challenge and really define what our roles
were, Microsofts IP department better focused on activities that brought
real value, including extracting business intelligence from the patent
portfolio and making solid and strategic business recommendations.
This may not be hard if you have six patents, but by the time you have
60,000, you need to put some thought into how you will accomplish it.
At its peak in 2005, Microsoft filed 3,500 US patents nearly
three times the number from two years prior. Over the next few
years, the number tapered off to adjust for a change in focus from
filing to prosecution and because the company had reached its goal of
becoming a top-10 patent filer.
February 2015
Author
Jeffrey L Ranck, a principal at Schwegman
Lundberg Woessner IP Attorneys and
director at MultiLing, previously served
as a former assistant general counsel for
Microsoft. He has spoken widely on software
protection and patent portfolio strategy
and management and is active in the
Electronics and Computer Law Committee
of the American Intellectual Property Law
Association.
Strategy: data analytics
Dawn of
the data
Its here to stay and it could give you the
edge data is an IP portfolios best friend
says Freddie McMahon
The challenge for almost any business that owns intellectual

property is becoming increasingly daunting. In a global and digital
economy, where ideas are evolved and exchanged at breakneck speed,
and innovation is the lifeblood of commerce, companies are finding it
harder and harder to keep track of potential infringements of their IP, or
to avoid infringing the IP of others, if only unwittingly.
The traditional architectures applied by both specialist IP lawyers
and in-house teams are no longer fit for purpose. Legacy IT systems
that hold crucial IP information within silos that are incapable of
communicating with one another meaningfully will not suffice. Large,
manual paper-based systems are cumbersome, expensive and all too
often fail to do their job.
Moreover, the problems are only set to get worse. In the US alone,
there were more than 1.1m patents pending by the end of 2013
according to the US Patent and Trademark Office (USPTO), more than
twice as many as the previous 10 years.1
That year alone saw almost 6,500 cases claiming patent
infringements filed to the USPTO. The statistics are just as striking
elsewhere in the world: the European Patent Office, for example, is now
handling 725 applications a day, amounting to 266,000 filings a year.2
Meanwhile, China is on target to become the worlds busiest patent
market and on some measures it has already achieved that landmark
status.
In this rising sea of information, how can businesses possibly keep
an eye on a prize that is just too valuable to let slip? The World Bank
estimates that, globally, IP-driven revenues came in at $242bn in 2012.3
By 2020, if businesses around the world find better ways to fully
leverage their portfolios of IP, we believe that figure could reach $1trn.
that now exists in the world, as well as the velocity at which this data
moves. Big data platforms are able to ingest and store this data in order
to build warehouses that are readily accessible to those who need the
information held within them.
In the context of IP, that means both a companys own properties
and the vast trove of external data now available on what other people
own, or would like to. That trove cuts across data formats, transcends
language and geography, and includes both established IP and
innovations and ideas that are still in the pipeline.
On its own, however, having this vast IP data ecosystem at its
disposal has no worth for an organisation. The real value is to be
found in the insights that it is possible to generate from this data using
analytics tools companies need insights on which they can act in order
to deliver business benefit.
These insights will be delivered by context brokers data scientists
who, by looking at any patent (pending, granted or otherwise) in
relation to all related patent data, are able to uncover patent anomalies.
These techniques are already being used in many areas of commerce,
from financial services to consumer goods and from healthcare to
manufacturing. Yet IP specialists have so far been slow to learn from
their colleagues in other functions and businesses.
Now is the time for them to do so. Indeed, IP ought to be a natural
application for big data and analytics technologies that excel in providing
accelerated access to key insight. For IP is a world in which speed is of
the essence, where it is crucial to be first to file and quick to challenge.
The damaging patent wars now being fought by some of the
worlds leading technology companies stem in large part from their
failure to move sufficiently quickly to protect their IP.
Big data to the rescue
A holistic view of IP
The solutions for IP lawyers are to be found in the technologies of big

data and analytics, on platforms that enable companies to automate
their IP processes to a far greater degree than ever before.
This will be a two-fold process. The term big data refers to the
volume and variety of information both the content and the type
So what does a data-driven, automated approach to IP need to deliver

in order to improve on the current outdated practices employed by
most companies?
The very first challenge is to give business leaders far better visibility
of the IP their companies already hold. IP may be at the centre of value
February 2015
Strategy: data analytics

creation for growing companies in the modern age, but remarkably
few organisations have a clear, holistic picture of the IP within their
businesses, let alone its true worth.
Valuable IP is held in different places and in different ways
throughout the organisation, with no over-arching view of its totality
available.
That so many businesses have ended up in this position is
remarkable. How can an organisation hope to maximise the value of
its IP or protect it without a complete understanding of what assets it
actually has? Yet this is the situation that the antiquated systems still in
place for the management of patents, trademarks and other intellectual
property have created.
Businesses will be able to buy

what they need, when they need
it, rather than saddling themselves
with yet another generation of
expensive IT systems.
Winning the ideas race
Moving that IP onto a single platform will, for the first time, give the
business a firm grasp of what it owns and what needs to be protected.
But this is just the beginning. Every single time an organisation considers
a new innovation, it exposes itself to two types of IP risk.
Either the idea is already in use and protected elsewhere, in which
case developing it further will be a waste of resources or a potentially
costly infringement of someone elses IP, or the idea is genuinely original,
in which case it must be protected before it occurs to a rival.
Automation and a data-driven approach to IP are absolutely crucial
to countering both types of risk. A platform with links into the global
IP ecosystem can quickly sift through vast amounts of data to identify
whether an idea is really as new as it seems and thus whether it is
worth protecting.
Resources do not have to be wasted on innovations that
subsequently have to be scrapped or negotiated on. Instead, business
leaders can take an immediate view on whether to pursue a project,
either by protecting it as quickly as possible or by establishing the costs
of working with the owners of similar IP in some way.
Essentially, were talking about a platform that is not only capable
of capturing ideas but determining which ones ought to be invested to
create IP and generate revenue.
This is not to say there will be no need of any manual work at all in an
automated IP environment. But rather than wasting human capital on
low value (but often painfully expensive) manual processing and search
work, it can be better employed to make more subjective judgements
about the viability of innovation given the commercial potential and
the IP challenges to be overcome. A data-driven approach provides the
insight on which such decisions will be made.
The rapid ingestion of that data and the ability to search it for
correlations with a companys own IP combine to offer competitive
advantage. Companies with this capability will be able to move far
more quickly to defend their IP.
Again, human interaction will be required. But rather than
employing small armies of junior staff who spend their time constantly
on the look-out for potential IP infringements, organisations will depend
on more senior lawyers and litigators making value-added judgements
about which threats to prioritise, when to negotiate over deals such as
licensing, and whether legal action is required.
From cost centre to revenue driver

In aggregate, the potential applications of data-driven IP offer enormous
potential they represent nothing short of a culture change for many
organisations.
After all, within the majority of companies, the IP management
operation is currently regarded as a cost centre. No wonder given the
thousands of people required to operate clunky legacy systems and
manual processes that are inefficient and inaccurate.
Automation, by contrast, can dramatically change the picture. The
move to a data-driven approach to IP will strip out overhead and create
new opportunities. It can transform IP management into a driver of
revenues.
Nor is this a shift that only the largest companies will be able to
make. Indeed, the worlds smaller businesses probably need automation
even more desperately than their large counterparts.
Their IP is just as valuable to them and sometimes more so small
manufacturers, for example, may depend on far greater numbers of
patents than, say, a large financial services company, yet they lack the
resources to manage IP in the traditional fashion.
Automation, on the other hand, does not have to cost the earth.
These technologies will be provided on demand through data-as-aservice platforms, or context brokers, that operate in the cloud.
Businesses will be able to buy what they need, when they need
it, rather than saddling themselves with yet another generation of
expensive IT systems likely to become outdated even before they are
properly installed.
Finally, a word of warning: while the opportunity for businesses
both large and small is clear, the window of opportunity to seize it is
likely to be short. In a digital age, organisations stand or fall on their
ability to develop and protect their IP, and those that continue to seek to
manage their assets using systems from a bygone era of manual labour
will be left behind.
If the reward for moving to a data-driven approach to IP is clear
competitive edge, the price of missing the boat could be business
decline and failure.
Footnotes
1. http://www.uspto.gov/about/stratplan/ar/USPTOFY2013PAR.pdf.
2. http://www.epo.org/news-issues/press/background/epo.html.
3. http://data.worldbank.org/indicator/BX.GSR.ROYL.CD/
countries?display=graph.
Countering infringement
Access to the global data ecosystem provides another opportunity,
too. Where companies have already established IP ownership, how
do they detect and defend threats to it that might come from
anywhere in the world?
Well, with the businesss own IP held and quantified on a single
platform that is constantly linked to exhaustive data on the IP activities
of all other players globally in related fields, identifying those threats
becomes far easier.
February 2015
Author
Freddie McMahon is the director of strategy

and innovation at Anomaly42. Anomaly42s
goal is to create the next generation of
automated decision-making to transform
business.
To list your firm, please call

Tanveer Khan +44 (0)20 3377 3924
Classified
Rebecca Chetwood +44 (0)20 7017 7663
ALBANIA
BOSNIA-HERZEGOVINA
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Property
TANA Intellectual
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Established in 1993,
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provides a full range of IP
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including patents, trade marks, designs and
copyright as well as all related unfair competition
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litigation, arbitration, mediation.
Established in 1993,
TANA intellectual property
provides a full range of IP
services in Slovenia, Croatia,
Bosnia-Herzegovina, Serbia,
Montenegro, Macedonia, Kosovo and Albania
including patents, trade marks, designs and
copyright as well as all related unfair competition
and anti-counterfeiting procedures, including
litigation, arbitration, mediation.
Ribnjak 40, 10 000 Zagreb, Croatia
Tel: +385 1 482 8060

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Website: www.tana.hr
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BAHRAIN
United Trademark
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Undertaking Intellectual
Property Law Services
including Searches,
Filings,Renewals/
Annuities for matters
relating to Trademarks, Patents, Designs &
Copyrights in Bahrain and in other countries
of the Arabian Gulf and Middle East
P.O. Box 26754, Office 21, Sabha Building (No. 338)
Road 1705, Block 317, Diplomatic Area, Manama,
State of Bahrain.
Tel: +973-17-710-458
Fax: +973-17-710-459
BULGARIA
J. Varbanov & partners
J. Varbanov & partners provides professional
and cost effective services and quality advice on
all aspects of industrial property matters over the
territory of Bulgaria as well as for the European
Union.
Member of INTA, ECTA, epi, UNION, AIPPI.
South Park Complex, bl.1, entr.A, 2nd floor,
BG-1421 Sofia, Bulgaria
Mail address: P.O. Box 1152, BG-1000 Sofia,
Bulgaria
Tel: (+359 2) 986 51 25
Fax: (+359 2) 980 32 47
Email: [email protected] or [email protected]
Website: www.jvpatents.com
Advertise your
company to 1000s
of IP professionals
online and in print.
Exclusive discounts
available now,
price on application.
Contact
[email protected]
or (0)20 3377 3924
CROATIA
TANA Intellectual
Property
Established in 1993, TANA
intellectual property offers
a full range of IP services in
Croatia, Bosnia-Herzegovina,
Serbia, Slovenia, Macedonia,
Montenegro, Albania, and Kosovo.
We are privileged to provide our services to a
worldwide range of exciting businesses, both
large-scale as well as small-scale covering diverse
industry areas.
Tel: +385 1 482 8060
Fax: +385 1 492 1195
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
CANADA
DANUBIA Patent & Law Office LLC

Smart & Biggar/Fetherstonhaugh
Smart & Biggar/Fetherstonhaugh is Canadas largest
firm practising exclusively in intellectual property and
technology law. We have been entrusted with the
preparation, filing and prosecution of more patent
and trade-mark applications than any other firm
in Canada and we are proud that our services are
consistently lauded in leading international surveys.
Ottawa | Toronto | Montreal | Vancouver
55 Metcalfe Street Suite 900, PO Box 2999 Station
D, Ottawa ON K1P 5Y6, Canada
Tel: 613.232.2486 Fax: 613.232.8440
Website: www.smart-biggar.ca
HUNGARY
February 2015
Danubia, winner of the MIP award both for patent

and trademark prosecution and enforcement in each
year since 1996. A leading international IP law firm
that provides quality services with reasonable costs.
Main activities:
Preparing new patent and trademark applications
Prosecuting patent applications before the EPO
and the Hungarian IP Office
Prosecuting CTM, RCD and national trademark
and design applications
Enforcing patent and trademark rights
Counseling in all IP-related matters
Contacts: Dr. rpd Petho managing partner and
Michael Lantos deputy managing partner
Website: www.danubia.com

Tanveer Khan +44 (0)20 3377 3924
Classified
HUNGARY
INDIA
Chandrakant M. Joshi
Indian Patent & Trade Mark Attorneys
SBG&K Patent and Law Offices

We are an established full service patent and law
firm founded in Hungary in 1969.
Areas of specialization: Representation in trademark,
patent, design and copyright cases, advertising
law, anti-piracy programmes and IP enforcement,
domain name, labeling, web contract, licensing,
confidentiality and trade secret agreements,
consumer protection, e-commerce, technology
transfer, unfair competition.
H-1062 Budapest, Andrassy ut 113
H-1369 Budapest, PO Box 360
Tel: (361) 461 1000
Fax: (361) 461 1099
Registration of Patents, Trade Marks, Designs

& Copyright; Conduct search of Trade Mark
availability; Post Registration proceedings;
Infringement matters of IPR; Translation of Patent
specifications; Combating of counterfeiting;
Watch for identical/Similar Trade Mark or Patents;
Cyberlaw Practices & Acquisition; Mergers;
Infringement Litigation; Licensing of Patents & Trade
Marks; Drafting & Execution of Joint Ventures,
Collaboration Agreements
5th & 6th Floor, Vishwa Nanak, Chakala Road,
Andheri (East), Mumbai (Bombay) - 400 099
Tel: +91-22-28380848, 28324920
Fax: +91-22-28380737, 28389839
Website: www.cmjoshi.us
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
Contact: Mr. Hiral Chandrakant Joshi
Dr Gabriella Sasvari, Dr Katalin Szamosi
INDIA
INDIA
JORDAN
United Trademark
& Patent Services
Anand and Anand

Key areas of practice: Patents, Designs, Litigation
and dispute resolution, Trademarks, Copyright,
Antitrust/ competition, Compliance/ regulatory,
Agreements and commercial exploitation of
IP licensing and franchising law, Tax advice on
IP matters, Packaging law, Advertising law,
Custom recordal and enforcement, Domain name
disputes, Investigations, Sports law, Media and
entertainment law
KRISHNA & SAURASTRI ASSOCIATES
First Channel Building, Plot No. 17 A,

Film City Sector 16A, Noida 201301 (UP)
Krishna & Saurastri Associates are well-established

patent and trademark attorneys with a practice that
offers a complete range of IP services. The firm is
also well-entrenched and equipped to render an
extensive array of legal services.
Tel: 91.120.4059300
Fax: 91.120.4243056 058
Website: www.anandandanand.com
Contact: Pravin Anand
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
New Excelsior Building, 7th Floor, A.K. Nayak Marg,

Fort, Mumbai 400 001, INDIA
Tel: (+91 22) 2200 6322
Fax: (+91 22) 2200 6326
Web: www.krishnaandsaurastri.com
including Searches,
Filings, Renewals/
Copyrights in Jordan and Africa.
P.O. Box 925852, 11190 Abdali, Amman
Suite 7, 2nd Floor, Chicago Building, Abdali Amman,
Jordan
Tel: +962-6-568 3088
Fax: +962-6-568 3089
Contact: Mr. Manish Saurastri
INDIA
KOSOVO
TANA Intellectual
Property
S.S. Rana & Co.

S.S. Rana & Co., founded in 1989, is one of the
reputed law firms of India, specializing in all
aspects of intellectual property laws, business and
commercial laws. For over two decades the firm has
been providing impeccable legal services to several
reputed multinational and fortune 500 companies
in respect of contentious and non-contentious
intellectual property related matters.
Established in 1993, TANA

intellectual property offers
a full range of IP services in
Croatia, Bosnia-Herzegovina,
Serbia, Slovenia, Macedonia,
Montenegro, Albania, and Kosovo.
We are privileged to provide our services to a
worldwide range of exciting businesses, both
large-scale as well as small-scale covering diverse
industry areas.
Registered Office: 317 Lawyers Chambers, High

Court of Delhi, New Delhi 110003, India
South Delhi Office: 81/2, 2nd & 3rd Floors, Aurobindo
Marg, Adhchini, New Dalhl110016, India.
Tel: +385 1 482 8060

Fax: +385 1 492 1195
Tel: +91 11 3056 2000 (10 Lines)

Fax: +91 11 3056 2010
Website: www.ssrana.in
February 2015

Tanveer Khan +44 (0)20 3377 3924
Classified
Rebecca Chetwood +44 (0)20 7017 7663
LEBANON
MOROCCO
United Trademark
& Patent Services
United Trademark
& Patent Services
Trademark, Patent,
Design, Copyright,
Domain name
registration, Litigation
& Enforcement services
including Searches,
Filings, Renewals/
Copyrights in Morocco and in other countries of
Middle East and Africa.
Postal Address: P.O Box 11-7078, Beirut, Lebanon

Street Address: 6th Floor, Burj Al Ghazal, Tabaris,
Beirut, Lebanon
Tel: +961 1 215373
Fax: +961 1 215374
MALAYSIA
Postal Address: 58 Rue, Ibn Battouta

Street Address: 1 E.R Etage, No. 4, Casa Blanca
Tel: +212 5222 06096
NIGERIA
Henry Goh & Co

Sdn Bhd
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
PAKISTAN
United Trademark
& Patent Services
Aluko & Oyebode

Registered Patent, Trademark
& Design Agents
Henry Goh, a leading Malaysian
IP consultancy, offers a complete
service range encompassing
patent, trademark, industrial design, copyright and
licensing. Our in-depth knowledge of the relevant
IP laws enables us to advise clients from inception
through to commercialization of technology.
House of Henry Goh, 217,
Jalan Imbi, 55100, Kuala Lumpur, Malaysia
Tel: +603-2118 8688
Fax: +603-2118 8777 (General)
+603-2118 8755/66 (Patent)
+603-2118 8788 (Trademark)
Website: www.henrygoh.com
Contact: Ms. Oon Yen Yen
Trademark Agents All aspects of Intellectual

Property law practice and Brand Enforcement
including products registration with NAFDAC, seed
registration with National Agricultural Seeds Council
(NASC), liaising with NOTAP in respect of TSAs and
MFAs. Our practice is multi-jurisdictional; we also
file patent applications in ARIPO and OAPI.
Aluko & Oyebode is the Secretary of the
Anti-Counterfeiting Collaboration (ACC), Nigeria.
Tel: +234 1 462 8360
Mobile: +234 806 680 3387
Fax: +44 207 681 3402
Website: www.aluko-oyebode.com
Intellectual Property
Attorneys, Lawyers and
Litigators. Trademarks,
Patents, Designs and
Copyright, AntiCounterfeiting, Infringement, Anti-Piracy, Litigation,
Enforcement, Technology Transfer & Licensing
Attorneys. Registrations
& Renewals/Annuity Services
85 The Mall Road, Lahore 54000, Pakistan
Tel: +92 42 36285571-74, +92 42 36285581-84
Fax: +92 42 36285585-87, +92 42 37323501
Website: www.utmps.com
Physical Address: 1, Murtala Muhammed Drive,

Ikoyi, Lagos, Nigeria
Postal Address: P.O. Box 2293, Marina, Lagos, Nigeria
Contact: Uche Nwokocha
MALAYSIA
OMAN
POLAND
SKRINE
United Trademark
& Patent Services
Skrine was founded on 1 May 1963 and is one of

the largest full-service legal firms with an integrated
range of specialist business groups providing a
comprehensive range of legal services to a large
cross-section of the business community in Malaysia
as well as abroad. Skrine has three principal divisions,
namely, corporate, dispute resolution and intellectual
property.
Trademark, Patent,
Design, Copyright,
Domain name
Polservice Patent and Trademark

Attorneys Office
Postal Address: P.O Box 3441 Ruwi, Postal Code 112,

Muscat, Sultanate of Oman
POLSERVICE is one of the biggest patent and

trademark attorneys offices in Poland. Provides IP
protection services related to patents, utility models,
industrial designs, trademarks, domain names,
copyright, unfair competition, litigation, dispute
resolution, anti-counterfeiting and antipiracy actions.
Represents clients before the Polish Patent Office,
Polish common, administrative and arbitration courts,
prosecution and customs offices, EPO and OHIM.
Unit No.50-8-1, 8th Floor Wisma UOA Damansara,

50 Jalan Dungun, Damansara Heights, 50490 Kuala
Lumpur, Malaysia
Tel: +603 2081 3999
Fax: +603 2094 3211
Email: [email protected], [email protected],
[email protected]
Website: www.skrine.com
Street Address: Suite No. 702, 7th Floor, Oman

Commercial Centre, Ruwi, Muscat, Sultanate of
Oman
Tel: +968 2 478 7555, + 968 2 470 4788
Fax: +968 2 479 4447
Tel: + 48 22 44 74 600 Fax: + 48 22 44 74 646

Website: www.polservice.com.pl
Contact Partners: Lee Tatt Boon, Charmayne Ong,

Khoo Guan Huat
73 Bluszczanska Street, 00-712 Warsaw, Poland
Contacts: A. Ponikiewski and E. WilamowskaMaracewicz (Patents and Designs), A. Stopiskalefarska (Trade Marks), S. Chrzanowska (Annuities)
February 2015

Tanveer Khan +44 (0)20 3377 3924
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
QATAR
Classified
SAUDI ARABIA
United Trademark
& Patent Services
Undertaking intellectual
property related matters
in the Kingdom of Saudi
Arabia, in association
with Law Offices of
Dr Hassan Al Mulla
Behind Maktaba Al Shawwaf, 30th Street, Oliya,
P.O. Box 15185, Riyadh 11444, Saudi Arabia
SOUTH KOREA
KBK & Associates
7th Floor, Hyundae Building,
82 Olympic-ro, Songpa-ku,
Seoul, Republic of Korea
Tel: 82-2-3453-6701
Fax: 82-2-557-3404
Website: www.kbkpat.com
Managing Partner: Mr. Yong-In KIM
Tel: +966 (1) 4655477 / 4616157

Fax: +966 (1) 4622134 / 4616156
SERBIA
SUDAN
United Trademark
& Patent Services
United Trademark
& Patent Services
Trademark, Patent,
Design, Copyright,
Domain name
including Searches,
Filings, Renewals/
Copyrights in Sudan and in other countries of Africa.
Villa No. 58, Al Amir Street, P.O Box 23896 Doha,

Qatar
Tel: +974 444 1132,
Fax: +974 444 7364
Popovic, Popovic, Samardzija

& Popovic
Popovic, Popovic, Samardzija & Popovic is one of
the oldest working law firms in Serbia (established
1933). Through revolutions, wars, the dissolution
of Yugoslavia, and most recently the transition to
a market economy we have been steadfast in our
service.
Takovska 19, 11000 Belgrade, Serbia
Postal Address: P.O. Box 607, Khartoum, 11111

Street Address: Flat No. 1, 3Rd Floor, Shaik Al Deen
Brothers Building, Alhuria Street, Khartoum
Tel: +2491 8374 0634
Fax: +2491 8379 6031
Tel: (+381 11) 3239 442

Fax: (+381 11) 3242 646
Website: www.ppsp.rs
Contact: Cveta S. Popovic
ROMANIA
SINGAPORE
Henry Goh (S) Pte Ltd
Henry Goh (S) Pte Ltd
Rominvent S.A.
ROMINVENT S.A., established in 1953, is one of the
most prominent agency engaged in the practice of
industrial property laws in Romania, providing its
Romanian and foreign clients with counselling and
representation, in view of acquiring and defending
the IP rights, also before ROPTO, OEB, WIPO and
OHIM authorities.
Registered Patent Agents,

Trademark & Design Agents
20 Science Park Road, #0334/35, TeleTech Park
Singapore Science Park II,
Singapore 117674
Tel: +65-6333 9525/6
Fax: +65-6333 9527
Advertise your
company to 1000s
of IP professionals
Exclusive discounts
available now,
Contact
[email protected]
or (0)20 3377 3924
35, Ermil Pangratti St., 1st Floor, Sector 1,

Bucharest; PO 63 Box 195, Romania
Tel: (4021) 231 2515 / 231 2541
Fax: (4021) 231 2550 / 231 2454
Website: www.rominvent.ro
Contact: Ion Mocanu General Manager
February 2015

Tanveer Khan +44 (0)20 3377 3924
Classified
TANZANIA
United Trademark
& Patent Services
including Searches,
Filings, Renewals/Annuities
for matters relating to
Trademarks, Patents, Designs & Copyrights
in Tanzania and in other countries of Africa.
Moyo Plaza / Shaurimoyo Street, Dar E Salaam
TURKEY
UKRAINE
VIETNAM
Pakharenko & Partners
Detech & Associates
Patents, trademarks, industrial

designs, domain names, PBRs,
copyright and related rights. Anticounterfeiting and anti-piracy.
Media, competition, corporate,
contract, customs, labour law. Representation before
courts, the Antimonopoly Committee of Ukraine
and other governmental bodies and enforcement
agencies.
72 Chervonoarmiyska Street, Business Center
Olimpiyskiy, Kiev 03150, Ukraine
DETECH & ASSOCIATES

is one of the first
Law Firm in Vietnam
registered as Intellectual
Property Attorney. The
Firm provides services in all matters concerning
Trademark, Patent, Industrial Design and
Copyright, from filing, licensing, technology
transfer to objection, action and litigation against
infringement in Vietnam, China and all ASEAN
countries.
P.O. Box 78, Kiev 03150, Ukraine
36 Hang Chao Street, Hanoi, Vietnam
Tel: +38044 593 96 93

Fax: +38044 451 40 48
Website: www.pakharenko.com
Tel: (84-4) 3734 6695

Fax: (84-4) 3734 6696
Website: www.detech-ip.com
Contact: Antonina Pakharenko-Anderson
Contact: TRAN TAN MINH, Patent Attorney,

Partner, CEO
UNITED ARAB EMIRATES
VIETNAM
United Trademark
& Patent Services
Tekil
TEKIL provides legal consutancy, litigation and
enforcement services in all matters concerning the
protection of IPR in Turkey, including trademark,
patent, industrial design registration, trademark and
domain name disputes, licensing, IP due diligence,
renewals, assignments, contracts, protection of
copyright and trade secrets. The firm also counsels
its clients with regard to the formation and
implementation of their IP strategies in Turkey.
Ferit Tek Sok. No:36/2 34710, Istanbul, Turkey
Trademark, Patent,
Design, Copyright,
Domain name
registration, Litigation &
Enforcement services
Postal Address: P.O Box 22880 Sharjah, UAE
Street Address: Suite 203, Buhaira Building, Buhaira
Corniche (Al Majaz), Sharjah, UAE
Tel: +971 6 5722742
Fax: +971 6 5722741
Tel: 00 90 216 346 74 00

Fax: 00 90 216 346 74 85
Website: www.tekil-law.com
Investip
INVESTIP, the leading law firm in Vietnam, specializes in Foreign
Investment and Intellectual Property matters: Copyrights &
Related Rights; Patent & Utility Solution; Industrial Design;
Trademark & Domain Name; IP Enforcement & Litigation;
Licensing & Technology Transfer. Our firms practice covers:
Vietnam, Laos, Cambodia, Myanmar and other countries.
No. 5B, lane 55, Huynh Thuc Khang street, Lang Ha
ward, Dong Da district, Hanoi, Vietnam, P.O. Box
418 Hanoi Vietnam
Tel: (84-4) 37472507 / 37472503
Fax: (84-4) 37472504 / 37472505
Website: www.investip.vn
Contact: Mrs. Esra Tekil
Contacts: Mr. Nguyen Tai Long, General Director and

Mr. Nguyen Anh Ngoc Trademark & Patent Attorney
UKRAINE
UNITED KINGDOM
Page White & Farrer
Trademarks, patents, designs,
renewals, watching services,
trademark & patent searches.
Doubinsky & Osharova Patent and

Law Agency
DOUBINSKY & OSHAROVA provides a full range
of intellectual property services: Acquirement of IP
rights; Maintenance in force of granted documents
and recordal of assignment of rights; Enforcement
of IP rights and suppression of unfair competition;
Advisory services in the field of IP rights.
Bedford House, John Street,

London WC1N 2BF
Tel: +44 207 831 7929
Fax: +44 207 831 8040
Website: www.pagewhite.com
Contact partners:
James Cornish, Peter Jenkins
YEMEN
United Trademark
& Patent Services
including Searches,
Filings, Renewals/Annuities
for matters relating to
Trademarks, Patents, Designs & Copyrights in
Yemen and in other countries of Africa.
Postal Address: P.O. Box 7038, Sanaa, Yemen.
Street Address: 6th Floor, Ideal Clinic Building,
Hadda Street, Sanaa
Tel: +967 181 9642
37 Zhilyanska Street, 3rd Floor, Kyiv 01033, Ukraine

Tel: (380 44) 490 5454
Fax: (380 44) 490 5460
Website: www.iplaw.com.ua
Partners: Michael Doubinsky, Irina Osharova
February 2015
Firm moves
MOVERS & SHAKERS

Company News
Baker Botts hires Bird & Bird big hitter

UNITED STATES
US firm Baker Botts has announced that electronics

patent litigator Mark Heaney has joined the firms
London office as a partner.
Heaney, a Bird & Bird partner since 2000 and most
recently head of its international electronics sector
group, specialises in contentious matters, with a focus
on patents, copyright and related rights.
We are delighted that Mark is joining us as we continue the growth
of our London office in 2015, said Baker Botts managing partner
Andrew M Baker.
Adding an IP lawyer of his calibre is a natural extension of our
strength as a market-leading telecommunications and computer science
practice in the US, Baker added.
Mark is a terrific addition, with a well-earned reputation for
creatively helping companies protect, manage and monetize their IP
assets, said Bart Showalter, firmwide chair of the intellectual property
department at Baker Botts.
Adobe Systems J Scott Evans elected as INTAs 2015 president
UNITED STATES
Adobe Systems associate general counsel J Scott

Evans has been elected as the International Trademark
Associations (INTA) 2015 president and chair of its
Board of Directors.
An active INTA volunteer for many years, Evans
served on the associations Board of Directors for the
first time in 2007, and in 2014 as president elect served on the Executive
Committee of the Board and as chair of the Planning Committee.
There are a number of important issues that INTA, and indeed
the global trademark community, will focus on this year, Evans said. I
would also like to see us broaden the scope of our discussions around
trademarks to encompass brands.
Prior to joining Adobe Systems, Evans served as senior legal director
of global brands and trademarks at Yahoo!
Barnes & Thornburg strengthens biotech practice
UNITED STATES
Barnes & Thornburg has hired Bradley J Olson as partner,

joining the firms IP department in the Washington, DC
office.
Advising clients on patentability, infringement, and
validity issues, as well as anti-counterfeiting enforcement
and industrial design matters, Olson has a particular
emphasis in the biotechnology, biomedical and medical device fields.
He also has experience in the preparation and negotiation of IP
rights transfer agreements, such as patent litigation settlements, patent
licenses, and computer software and hardware agreements.
As a past partner in the IP litigation practice group of Haynes and
Boone, Olson has worked on patent litigations in several European
countries in conjunction with foreign counsel.
Karen McGee, managing partner of the firms Washington, DC,
office, said, Brads vast experience with international patent litigation
will be an invaluable asset to our clients looking to do business overseas.
ipCreate merges with Article One Partners

UNITED STATES
Invention on demand company ipCreate and

crowdsourced patent researcher Article One Partners
(AOP) have merged.
ipCreate founders Marshall Phelps (pictured) and
John Cronin, the latter of whom ran IBMs legendary
patent factory, said the merger represented the,
logical next step in our development of a 21st Century IP business
model built around invention, not litigation.
AOP, founded by Cheryl Milone in 2008, will continue to function
as an independent brand and company. In October last year, Phelps
was named AOPs CEO, continuing a long and distinguished career in
the patent industry.
ipCreate does not buy or assert patents, favouring instead to
invest in disruptive invention projects in partnership with global
technology leaders to create off-budget innovations.
The merger will allow ipCreate to integrate patent research into the
front end of the invention cycle, Phelps and Cronin said in a joint
statement.
For ipCreates partners, this means strategic on-demand
inventions backed by high-quality foundational patents that can help
them capture the chokepoints of looming market change.
We aim to create new IP value new disruptive inventions
backed by pioneering patents rather than litigate over fading
patent spoils.
This is a capability unmatched by any other company.
AOP will continue to leverage its 32,000 prior art researchers in
over 170 countries, serving a vital industry by helping firms make
better IP decisions.
EPO records all-time high patent filings
EUROPE
The European Patent Office (EPO) broke a new

record after receiving more than 273, 110 patent
filings in 2014.
Although the findings are preliminary figures,
they are an increase of around 3% over 2013, and a
new all-time high.
The data shows that last year filings originating from Europe
remained stable (+0.3%), with strong growth from the US (+6.7%),
reinforcing its leading position in the country ranking.
There was also an increase from China (+16.8%), with Korea
seeing more moderate growth (+1.4%). However, Japan witnessed
a drop (-3.8%).
EPO president Benot Battistelli (pictured) said, These figures
are only a first estimate, but they confirm Europes continued
strength as a hub of innovation. Demand for patents at the EPO is
up for the fifth year in a row, reaching a new peak.
The EPO will publish detailed figures on individual countries and
industry sectors, as well as a ranking of companies, on 26 February
2015.
Picture: dpa-picture-alliance/ Andreas Gebert
February 2015
Clocking off
IP curiosities from around the world
European Copyright Society

pushes for EU-wide reform
There needs to be a push for an EU-wide
unification of copyright, academic think
tank the European Copyright Society
(ECS) has urged.
In an open letter written to European
Commissioner for Digital Economy and
Society, Gnther Oettinger, 20 members
of the society said that the time is now
ripe to begin work on copyright law
that would apply directly and uniformly
across the union.
Noting that copyright has achieved
some harmonisation in the EU for
nearly 25 years, the law essentially
remains a national law with member
states enforcing their own provisions
on copyright and neighbouring (related)
rights, resulting in patchwork legislation.
This territoriality has led to
fragmentation of markets along national
borderlines, critically impeding the
establishment of a digital single market
for creative content, and undermining the
DATES FOR YOUR DIARY:

11-12 March 2015
The 7th Annual Corporate IP Counsel
The Westin New York,
Times Square Hotel, US
http://bit.ly/1zTY7DW
12-14 March 2015
IP Law Summit
Red Rock Resort & Spa, Las Vegas, US
http://www.iplawsummit.com/
This month in
HISTORY
n
1788 The first US patent for an
improvement to steamships is issued.
The inventors are Isaac Briggs & William
Longstreet.
unions international competitiveness,
said the society.
As a result, true unification of
copyright by way of a European Copyright
Law (Regulation) to replace national legal
titles is the logical next step for the EU
legislature.
The societys letter follows the EU
Commissions
consultation
findings
on industry review of copyright
harmonisation,
which
prompted
responses from the UK government and
tech company Google.
n
1917
Sun-Maid
raisins
receive
trademark registration. The Sun-Maid girl
trademark was inspired by Lorraine Collett
Petersen, who in 1915 lived in the Fresno,
California area, where the company began its
operations.
n
2014 The Spanish government
approves a bill to amend its IP Law
(TRLPI). It deals with various topics including
private copying and the co-called Google
tax.
Defendants boast on their website that their business

was developed to eliminate contraband, yet the
infringing copies of plaintiffs sound recordings and
musical compositions, in which defendants unlawfully
transact and from which they unjustly profit, are
contraband personified.
Universal Music Group says in a copyright infringement suit filed against Centric Group
et al, over music mixtapes sent to prisoners by family members.
IN THE NEXT ISSUE:

anuary
December 2014/J
Trademarks
Copyright
Patents
line
Tradem
gy ark
Strate
s
Licensing
er
ob
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February 2015

Has the Rubiks Cube finally solved

Writing the UPC rulebook

18+ Hours of Networking 26 CPD Points 55+ Speakers

Informa Life Sciences 24th Annual

Europes leading pharmaceutical law conference on competition law,

Top Band Private Practice

DAY 1: COMPETITION LAW AND PATENT

Competition Law and Patent Litigation and the Interface with

DAY 2: REGULATORY FRAMEWORKS

Transparency of Clinical Trial Data, Pricing and

DAY 3: LICENSING AND COLLABORATION

Negotiation, Commercial IP, Due Diligence, Obligations

Scan with smartphone

From the Editor

WELCOME TO THE FEBRUARY ISSUE OF

This magazine is printed on paper from sustainable sources.

Tom Phillips, Acting editor

INTELLECTUAL PROPERTY MAGAZINES ADVISORY PANEL

Simon Clark, partner, Berwin Leighton Paisner, UK

Intellectual Property Magazine 3

in the shape of a new Unified Patent Court. But with such a

Directory of international IP firms

Latest appointments and company news

Movers and shakers

IP curiosities from around the world

Dawn of the data

The unitary patent and the Unified Patent

 oor opened for medical use

A Canadian Federal Court has rejected hitherto guidelines on

Shape of childs chair not registrable

Solving the Rubiks Cube challenge

The EU General Court held that the 3D puzzles shape mark

trademark for registration. Anjie Vichayanonda explains how to

Judicial review of UK private

The Musicians Union et al have applied for a judicial review of

eveloping a defensive domain

With cybersquatters still an ongoing problem, Gary McIlraith explains

yberswatting: eradicating domain

4 Intellectual Property Magazine

Trademark crash: Volvo v OHIM

reform: back on the table but late

Is the Innovation Act back on?

PC recap: have you been paying

lntra-Presse SAS v Office for

 GOLDEN BALLS makes its way back to OHIM

Amneal Pharmaceuticals, Llc, v Supernus

(2) Dalhaus Ltd

A trademark dispute could have been avoided with written

International Stem Cell Corporation v

in the Peoples Republic, explains Bob Stembridge

ow China claimed the global patent throne

 A review of competition law regarding injunctions for FRANDencumbered patents

Dalsouple Societe Saumuroise Du

succeed in pharmaceutical litigation in Thailand

Huawei Technologies Co Ltd v ZTE Corp;

pdates from China latest regulations on the

An essential review of the journey so far

and Trade Marks

Has the CJEU erred in its much anticipated ruling?

Writing the UPC rulebook

IP curiosities from around the world

oor opened for medical use

A Canadian Federal Court has rejected hitherto guidelines on

The EU General Court held that the 3D puzzles shape mark

The Musicians Union et al have applied for a judicial review of

With cybersquatters still an ongoing problem, Gary McIlraith explains

GOLDEN BALLS makes its way back to OHIM

A trademark dispute could have been avoided with written

A review of competition law regarding injunctions for FRANDencumbered patents