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LimeGreenIP News

Europe: Blockchain – The virtual currency Bitcoin

In this series of blog posts, we take a look at the current state of play regarding blockchain technology as well as the legal setting with a European and German focus.

Whoever thinks of blockchain also has inevitably bitcoins in mind. The Internet currency is largely based on the blockchain technology and it is therefore one of the most obvious fields of application for this technology, to which we recently gave an overview (see here).

In the following post, we will take a closer look at what the term “bitcoin” actually means and what legal issues are linked to it. As a virtual payment method, bitcoins are subject to regulatory regulations of the financial sector, but they also raise general questions of contractual law. The latter are particularly interesting in the light of the fact that the European Commission is currently working on a new Strategy for a Digital Single Market to re-regulate the online trade and providing digital content. There are currently two draft directives on the table (COM (2015) 634 final and COM (2015) 635 final).

What are Bitcoins?

Bitcoin is a digital unit of money which was introduced in 2009. It is a decentralized payment system that can be used all over the world, within which monetary values ​​can be transferred without a central issuing authority (central bank) or a settlement agent (main bank). The decentralized database administered by the participants in the bitcoin currency system, in which all transactions are stored in a blockchain, is the underlying basis for the bitcoin system.

By means of a peer-to-peer model, the individual users of the system check the authenticity of the respective transaction as so-called “miners” via their connected computers. In return, they receive a virtual compensation. With the aid of cryptographic techniques, the chain also ensures that transactions with bitcoins can only be carried out by the respective owner and that the same bitcoin can not be issued more than once. Bitcoin is therefore also referred to as cryptographic currency. Transactions in this currency are irrevocable – which is one of the main features of a blockchain.

The payments take place under a pseudonym. The bitcoin blockchain does not allow an immediate identification of the people making transactions. The chain of transactions is, however, freely accessible to all participants.

Proof of solvency is provided by means of a personal digital wallet – the so-called “wallet” – in which the bitcoins that have been acquired so far are located. The conversion rate of bitcoins into other means of payment is determined by supply and demand.

What legal aspects need to be considered? Continue Reading

Asia IP webinar series: The recordings so far…

We are running a series of webinars in 2017 to help you stay up to date with Intellectual Property news and developments in the Asia Pacific region.  So far we have held webinars on protecting your identity in the cyberworld, trademark protection & transactions in Asia and anti-counterfeiting/anti-piracy in Asia. If you were unable to attend, the recorded version of our first three webinars can be accessed at the following sign-up  links:

  • Creatively combatting counterfeiting and piracy with robust strategiesRecording from 17 October
  • Protecting your identity in the cyberworldRecording from 5 July
  • Trademarks – Everything you always wanted to know about but were afraid to askRecording from 25 April

Watch this space for the following upcoming topics:

Patents – Hot issues in China, Hong Kong and Japan

Trade Secrets – Have you heard ….

Trademark litigation – Winning by paying attention to the details


For more information on IP topics in Asia, please visit our free LimeGreen IP know-how platform

UPC and Germany: Status update – Constitutional complaint, ratification timeline and more

Background

The constitutional complaint against the UPC ratification that was lodged with the Federal Constitutional Court in Germany earlier this year has received a lot of attention over the past few months as it could have the potential to considerably delay the entry into force of the Agreement on a Unified Patent Court (UPCA). Pursuant to Article 89 subsection 1 UPCA it shall not enter into force prior to its ratification by the three Member States in which the highest number of European patents had effect in the year preceding the year of signing the UPCA. These three Member States are France, the United Kingdom and Germany.

The German Federal Constitutional Court has asked the German President (Frank-Walter Steinmeier) as the German head of state not to sign into law the parliamentary Act declaring Germany’s accession to the UPCA (the law of consent) pending the outcome of the constitutional complaint. The use of such an assurance by the Federal President is uncommon but has been made previously in proceedings regarding the accession to the Lisbon Treaty or the European Stability Mechanism.This measure aims to avoid Germany being bound externally by accession to an international treaty but being unable to comply with these obligations internally because the act of accession has been declared unconstitutional. Pursuant to Article 82, subsection 1 of the Basic Law for the Federal Republic of Germany (the ‘Basic Law’ [Grundgesetz]– i.e. the German constitution), the President needs to certify all laws in order for them to become effective. Article 59, subsection 1 of the Basic Law provides that the President concludes international treaties. As a consequence, this means that until the constitutional complaint proceedings are finished –provided that the law of consent hasn’t been declared void by the Constitutional Court and the Federal President certifies the law – the UPCA will not be ratified in Germany.

In the following we intend to outline the approximate length of the proceedings taking into account the different possible scenarios and what this means for the future of the UPC project. On this point the Court itself in a reply to an inquiry about the background of the complaint stated in the summer that ‘a date for the decision is presently not foreseeable’, but before looking into this in more detail we will outline the main legal arguments the complainant is making as to the alleged unconstitutionality of Germany’s accession to the UPCA.

Grounds of the Constitutional Complaint

The Constitutional compliant is based on three main grounds as follows: Continue Reading

Europe: Blockchain – Practical and legal challenges

The increasing digitization of the private as well as economic realm is undeniable. The European Commission is constantly pushing the Digital Single Market forward. In the same breath as the ubiquitous phenomenon of digitalization, blockchain technology is all too often mentioned. A bright future is predicted for it even if the actual applications have, admittedly, been rare in practice so far. A closer look at this technology and its economic potential – but also the legal implications of the technology – is worthwhile. In a series of blog posts, we will therefore examine the current state of play regarding blockchain technology and take a look at the legal setting with a European and German focus.

What is Blockchain? 

Simply put, a blockchain is a decentralized “register”, which is distributed on several computers and serves as a comparatively secure digital protocol for transactions and information. In this register, which is sometimes validly referred to as a database, the data is stored in a chronological order, unaltered and thus traceable, and linked together. It is a chain of transactions which digitally maps a uniform economic process between two or more participants.

The characteristic feature of a blockchain is the renouncement of a controlling, trustworthy entity, a so-called intermediary. In the blockchain the “Trusted Third Party” is replaced by a transparent network, which is technically and cryptographically secured. A common example is a bank, which usually takes over the processing of a payment transaction. In the blockchain, however, trust is established without any intermediary by the combination of cryptography (digital signatures), computing-intensive coding tasks and peer-to-peer networks (P2P) merely between the parties involved.

How does Blockchain work?

First of all, the public key and a private key technology of the geographically distributed users is significant for blockchain. The private key serves as the digital signature of a transaction, which then can be checked by the other users of the blockchain network via public keys. The privacy of the participants is protected since they perform under a pseudonym.

According to a consensus process, the individual transactions are written into so-called blocks, which step-by-step form the chain. Each computer in the blockchain network saves a copy of the entire blockchain and compares new transactions to each other in the validation process. This ensures system-immanent transparency and counterfeit security.

The validation process, also referred to as “mining”, takes place via a hash function, thus, via the cryptographic assignment of a letter-number sequence. The hash forms the link between the transactions and continues the chain. If the hash corresponds, the next transaction is approved. In this way, the blocks are linked in such a way that any subsequent modification of a block immediately stands out. Unauthorised manipulation is therefore excluded.

However, it has to be noted that the generating of a hash by the decentralized computers requires considerable computing power. Every miner who carries out a validation must provide a so-called “proof of work” and circulated it in the system every time. According to the incentive principle, the respective miner receives some kind of reward for the successful insertion of a validated block; in the case of the bitcoin blockchain, for example currently 12.5 BTC (bitcoins).

What legal aspects need to be considered?

The legal implications are manifold and arise partly from the above-described characteristics of the blockchain itself, and partly from the specific areas of application. Common areas of tension arise, for example in data protection law. The network-wide transparency, the sustainability of the stored data and the lack of a centralized responsible office are examples of those challenges. Moreover, the inalterability of the blockchain does not reflect the basic understanding of the German civil code that legal transactions can be void, reversible or conditioned. The respective architecture of the blockchain also raises several patent issues.

Furthermore, there are legal topics that depend on the specific application of blockchain such as general compliance, compliance with regulatory requirements or the protection of intellectual property rights. In the financial world, for example, the Law on Credit Management (KWG) and the MaRisk of the Federal Financial Supervisory Authority (BaFin) must be observed, while in the case of blockchain use in the music and media industry, copyright regulations and the Telemediengesetz (TMG) need to be considered. Additionally, there are the provisions on e-commerce and consumer protection.

We will dedicate a series of blogs posts to these questions with a European and German perspective as Blockchain is not only very interesting from a technical point of view but the resulting legal questions are just as exciting. Watch this space!


For more international information, please visit our Blockchain: Linked Ledgers topic center.

Proposed change of registration policy for .IE domain names

IEDR, the Irish Domain Registry, recently announced that it was a running a Public Consultation with a view to liberalising the .IE domain name registration policy.

The current registration requirements for .IE domain names are the following:

1. A connection to Ireland

Applicants can be:

•    Irish citizens or residents;
•    Companies registered in Ireland;
•    Foreign companies or individuals with a registered trade mark covering Ireland; or
•    Foreign companies which are able to demonstrate that they are trading in Ireland (via documents such as invoices, marketing material aimed at the Irish market, a letter from a solicitor or an accountant, etc)

2. A “claim to the domain”

Applicants need to demonstrate that they have a valid reason for applying for a given domain name.  The domain name therefore needs to match the applicant’s registered business, company or trade mark name.  Should this not be the case, the applicant needs to specify to the Registry the reason for the domain name application and the intended use of the domain name. Continue Reading

US: Hogan Lovells sponsoring LES Annual Meeting and Women in Licensing Mixer

We are proud to once again sponsor year’s LES Annual Meeting in Chicago. The October 22-25 event brings together intellectual property, technology, and business development professionals for panel discussions and networking opportunities centered around IP commerce.

Hogan Lovells is also sponsoring the Women in Licensing Mixer & Guided Networking Event on Tuesday, October 24 at 5:00 PM.  This event will take place in the North Alcove (5th Floor) of the Marriott Downtown Magnificent Mile.

Please click here to view the full agenda and register for the 2017 LES Annual Meeting.


Date: October 22-25, 2017

Location: Marriott Downtown Magnificent Mile, Chicago

Bronze Sponsor: Hogan Lovells

US: ChIPs Women in Tech, Law & Policy Global Summit 2017

On October 17-19, Hogan Lovells will sponsor the ChIPs Women in Tech, Law & Policy Global Summit 2017 in Washington, D.C. Led by Celine Crowson, our IP team won a slot to host a session titled “Technological Innovations Rapidly Developing in Robotics and Artificial Intelligence – Is the Legal and Policy Landscape Keeping Up?” This panel features Stephanie Burns, Assistant GC for worldwide operations at Amazon and head of the robotics division, and Carol Carroll, Deputy Director of NASA Ames Research Center.

In addition to our participation during the Global Summit, we have also been invited to attend and participate in the Next Gen Summit, which supports and promotes the advancement, development and retention of young women where technology, law and policy converge. We are sending a team of junior IP lawyers to compete in the Next Generation Mock Pitch Exercise. The team is led by mentor, Meryl Bernstein, and includes Andrea Gregory, Polly Sims, and Helen Trac.

We are looking forward to another productive and impactful ChIPs Summit. ChIPs was founded in 2005 by Noreen Krall (Vice President, Chief Litigation Counsel, Apple), Hon. Michelle K. Lee (former Head of Patents & Patent Strategy, Google), and Emily Ward (Chief Executive Officer, Calla Nava; former Vice President, Chief Technology Counsel, PayPal). The nonprofit advances and connects women in technology, law, and policy, and has become the premier organization for women in technology law.

For more information, contact Lauren Mirisola.

Federal Circuit Shifts Burden of Proof for Amendments in Post-Grant Proceedings

On October 4, 2017, the Federal Circuit, sitting en banc, issued a ruling in Aqua Products, Inc. v. Matal, placing the burden of persuasion on the petitioner to prove the invalidity of amended claims in post-grant proceedings, such as Inter Partes Reviews (IPRs).  While the decision comprised five separate opinions, the majority rejected the Patent Trial and Appeal Board’s (PTAB’s) interpretation that the America Invents Act (AIA) places the burden to prove the patentability of proposed amendments during post-grant proceedings on the patent owner.   Historically, the PTAB had denied about 95% of motions to amend, making it almost impossible for a patent owner to amend or substitute challenged claims. See Majority Op. at 12 (citing PTAB Motion to Amend Study).

This shift in the burden of proof to the petitioner will make it more likely that the patent owner will file an amendment in response to an IPR. This means that defendants in district court will likely find IPRs less attractive because they give the patentee an opportunity to strengthen their patent by amending it in response to strong prior art.  The burden is then placed on the petitioner to find and assert new prior art, making it more difficult and costly to successfully invalidate a patent via IPR.  Then, unsuccessful petitioners will find themselves facing carefully narrowed claims in district court and estopped from asserting many invalidity arguments following the IPR.

Background

In the IPR review on appeal, Aqua Products, the patent owner, moved to substitute several claims of its patent under 35 U.S.C § 316(d). The statute allows the patent owner to move once to cancel or substitute a reasonable number of claims, so long as they do not enlarge the scope of the patent or introduce new matter. The PTAB denied Aqua’s motion to amend, expressly finding that the amendments complied with § 316(d), but holding that Aqua did not meet its burden to show that the substitute claims were patentable. Aqua appealed, arguing, among other things, that the PTAB was not permitted to assign the burden of persuasion as to validity to the patent owner, and a Federal Circuit panel declined to address the issue of the burden. The Federal Circuit granted Aqua’s petition for en banc rehearing, specifically on the issue of the burden of persuasion.

Analysis Continue Reading

DSM Watch: JURI once again postpones final vote on new copyright directive

The European copyright reform is underway. The heart of this process clearly is the draft for a Directive on Copyright in the Digital Single Market (COM 2016(593) final). The draft is and the proposed amendments to it are currently being considered by the European Parliament. The debate is led by the Committee on Legal Affairs (JURI). It was anticipated that JURI would have its final vote on the amended wording on 10 October 2017. However, the draft Copyright Directive has recently been removed from the agenda for that date. For now, it seems that we will have to wait until JURI’s next session on 7 December 2017 to see the bill progressing.

It is not the first time the copyright reform has been taken off JURI’s agenda. Initially, the committee had planned to take its vote on the final language in late September 2017. However, it was not going to happen. Too much was on the committee’s plate. The second postponement now tells an ongoing story. The changes that the new copyright directive shall bring about are broad in nature and impact. Continue Reading

#unfaircompetition – limitations to influencer marketing under German law

More and more companies advertise their products through so called influencer marketing, using the accounts of social media stars to reach their followers. The Higher Regional Court of Celle decided recently that a company using an influencer to post advertising on Instagram may be liable for failing to clearly indicate the underlying commercial purpose even though the post contained the hashtag “#ad” (Higher Regional Court of Celle, ref. no. 13 U 53/17).

The case

An association for consumer protection applied for a preliminary injunction against a consumer goods company that had paid an influencer to advertise its products on Instagram. The influencer had posted an image showing female arms holding different cosmetics and jewelry with a text saying that the company offers a 40% discount on eye make-up in all its stores the following day. The text itself also contained a link to the company’s Instagram account and was followed by six hashtags, again including the company name as well as “#ad #eyes #shopping #discount #40percent”. The District Court had refused to grant a preliminary injunction in the first instance.

Findings of the Court Continue Reading