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LimeGreenIP News

A sneak peek at China’s long-awaited new draft Patent Law

On 5 December 2018, the latest draft of the Chinese Patent Law was presented to China’s State Council (i.e. the executive body of China’s central government) during a meeting chaired by Premier Li Keqiang (see here for a summary, in Chinese). New developments about the draft have certainly been long-awaited, with the latest and highly debated version of the draft for public comment dating back to February 2016.

While the full draft hasn’t been released for public comments yet, official government sources have released a description summarizing areas of emphasis including:

  • “Drawing upon international practices”, increasing the amount of damages and fines for patent infringement (including significantly increasing damages for wilful infringement and counterfeiting);
  • Clarifying a shifting of the burden of proof to the defendant under a duty to cooperate in providing relevant information;
  • One or more provisions regarding joint liability of Internet Service Providers for not deterring infringement in a timely manner; and
  • Clarifying an appropriate incentivization scheme for inventors to share in the proceeds of service inventions, between employer and employee.
  • More broadly speaking, improving the patent examination/granting system.

It is expected that the full Draft won’t be published for public comment until the beginning of 2019. This is somewhat surprising, as a revision of the Patent Law was officially marked off on the list of the State Council Legislation Plan for 2018, which was published in February 2018. The time taken may reflect the hotly debated nature of certain new provisions of the Patent Law, and the many interests at stake. We will monitor these developments and keep you posted.

FTC v. Qualcomm: Court Requires Licensing of SEPs to Competitors

A recent decision in the FTC v. Qualcomm Inc. case by U.S. district judge Lucy Koh calls into question the practice among some SEP holders of providing patent licenses only to downstream purchasers of products and refusing to provide licenses to direct competitors.

In June 2017, the Federal Trade Commission (“FTC”) sued Qualcomm in the Northern District of California, alleging violations of Section 5 of the FTC Act in the provision of baseband processors and modem chips used in cellular telecommunications and similar devices. The FTC argued that Qualcomm’s refusal to sell modem chips to cellular device manufacturers unless they took a license to Qualcomm SEPs, combined with its refusal to license its SEPs to competing modem chip manufacturers prevented other modem chip suppliers from entering the baseband processor market, cementing Qualcomm’s monopoly over the market.

The FTC further pointed out that Qualcomm was a member in SSOs, including Telecommunications Industry Association (TIA) and Alliance for Telecommunications Industry Solutions (ATIS), which require members disclose and license SEPs on fair, reasonable, and non-discriminatory (“FRAND”) terms. The FTC further claimed that the policies of these SSOs, which required members to license SEPs to “all applicants,” were contradictory to Qualcomm’s business practices.

In August, the FTC moved for partial summary judgement on whether Qualcomm’s membership in these SSOs necessitated licensing competing modem chip suppliers on FRAND terms, citing that no language in the policies of TIA or ATIS limited Qualcomm to a certain product or partner.  The court granted the FTC’s motion that Qualcomm needed to license its SEPs to competitor chip manufacturers, reasoning that the TIA an ATIS IPR policies intended to encourage competition and prevent a monopoly of the market.

The court’s decision to grant the FTC’s motion for partial summary judgment may raise scrutiny on the licensing practices of SEP holders, especially those dominant in the market. The ruling also illustrates the complicated relationship between SSOs, SEPs, and the market for modem chips.

Note this article is summary from the original. For a more in-depth look at the ruling, please visit here.

Artificial Intelligence IP roundup 2018

In our Global IP Outlook for 2018 we flagged the following key areas of Artificial Intelligence (AI) to consider for developments over the year. This post collates our related LimeGreen IP insights… and then some. Keep an eye out for our Global IP Outlook 2019 in the new year!

  • As an AI system learns and modifies its external behaviors, it is possible that a resulting product or process might infringe one or more patent claims.
    • We published a guide to  AI and your business with a chapter dedicated to IP issues including; ownership of patents, copyright and trade secrets; Ownership of data and infringement challenges
  • The adoption of AI provides the ability to obtain unprecedented types of information and predictions about competitor activity and plans, which also means that companies must reassess their security and confidentiality policies to minimize similar analysis of their activity and plans.

In addition to these predicted developments, our 2018 Brand Benchmarking survey highlighted that 93% of respondents believe that AI will have a positive influence: saving them time and money.

Julia Anne Matheson and Helen Xia discussed the use of AI in national/international design searches to make the process more economical and practical in their interview with James Nurton. In a similar vein, we summarized the 6th Hamburg Legal Tech Meetup which explored new ways of adapting AI and machine learning legal services to digitalization by further enhancing interdisciplinary and inter-industry exchange in the field of legal tech.

In the field of copyright, Nils Rauer also discussed the limitations of AI for technical filtering and separation of illegal content from legitimate content in connection with the copyright dispute over YouTube before the German Federal Court of Justice.


For further information on the implications of Artificial Intelligence across industry sectors please visit our topic center

The Polish Constitutional Court limits the right of information under the Enforcement Directive

Polish law provides for the right of information on the origin and distribution networks of the goods or services which infringe an intellectual property right, as dictated by the Directive 2004/48/EC on the enforcement of intellectual property rights. So far, this information could be requested both from the infringer as well as from third persons fulfilling certain conditions. However, the Polish Constitutional Tribunal has just found that the right of information from persons other than the infringer is contrary to the Polish Constitution. The Tribunal believes that the provision of law providing for this right breaches the rule of freedom of economic activity and does not provide sufficient safeguards against abuse of the right (in particular if the requested information constitutes a trade secret).  Consequently, under Polish law it will no longer possible to request information concerning origin and distribution channels of the infringing good from third persons.

The decision was made on 6 December 2018. It will enter into force as soon as it is published in an official bulletin. The written justification is not available yet and we expect that it will be published in the following weeks or months.

U.S. + Germany Patent Update – November 2018 (English, 日本語 & 한국어)

IN THIS ISSUE

 PTAB Denies Institution as Duplicative Due to Earlier IPR Challenge by Different Petitioner – Shenzhen Silver Star Intelligent Tech. v. iRobot Corp. (5 September 2018)

German Federal Patent Court on Filing Auxiliary Requests With Narrower Claims in Patent Nullity Proceedings – “Satellite Based Paging System with Location Transmission,” Federal Patent Court of Germany, 6 NI 69/16 (EP)

USPTO Announces Proposal to Change System for Seeking Amendments in PTAB Proceedings (25 October 2018)

Federal Supreme Court on Enforcing a Claim of Information and Rendering of Account in Preparation of Damages Claims – “Tool Handle,” Federal Supreme Court, X ZR 76/18 (25 September 2018)

USPTO Begins Using Same Claim Construction Standard as District Courts (13 November 2018)

Decision of German Federal Constitutional Court on German UPCA Complaint Coming Soon?

Judge Takes Broad View of New Foreign Lost Profits Standard – Power Integrations, Inc. v. Fairchild Semiconductor (4 October 2018)

No Personal Jurisdiction Over Foreign Defendant Based on Ownership of U.S. Subsidiary and U.S.-Based Development of Accused Products – Univ. of Mass. Medical Sch. v. L’Oréal S.A. (13 November 2018)

日本語 – Japanese language translation available here

한국어 – Korean language translation available here


Spotlight

German Federal Patent Court on Filing Auxiliary Requests With Narrower Claims in Patent Nullity Proceedings – “Satellite Based Paging System with Location Transmission,” Federal Patent Court of Germany, 6 NI 69/16 (EP)

Under German law, once the opposition period for a patent has expired, the only way to invalidate a patent is to start nullity proceedings at the German Federal Patent Court (GFPC). Unlike other jurisdictions, during nullity proceedings in Germany, the patent owner is allowed to defend its patent with the claims as granted or with narrower claims. Typically, such narrower claims are filed as so-called “auxiliary requests.” In nullity proceedings, the patent owner defends the granted claims and clarifies that the auxiliary requests (i.e., narrower claims) should only be reviewed by the GFPC if the GFPC finds the granted claims invalid.

Nullity proceedings before the GFPC always end with an oral hearing (trial). A few months before the oral hearing, the GFPC normally issues in writing a preliminary opinion on issues that will presumably be of particular significance to its final decision. The preliminary opinion is based on written submissions made by the parties. The GFPC regularly sets a deadline within which the parties may submit final comments in response to the preliminary opinion. The same deadline is also set for the submission of additional prior art by the nullity plaintiff, as well as of auxiliary requests by the patent owner.

In the case in question, the GFPC stated in its preliminary opinion that a specific prior document submitted by the plaintiff several months earlier was not relevant to an attack on novelty and inventive step. Therefore, the nullity defendant/patent owner did not comment further on this document in its final comments in response to the preliminary opinion. The nullity plaintiff, however, insisted that the document was relevant in its submission. At the beginning of the oral hearing, the GFPC pointed out that, contrary to what the court had stated in its preliminary opinion, it now considered the document to be relevant to inventive step. In response, the patent owner filed further auxiliary requests with narrower claims at the oral hearing.

The GFPC, however, rejected these new auxiliary requests as delayed pursuant to Section 83 (4) of the German Patent Act. The GFPC held that if the new auxiliary requests were admitted, this would require the postponement of the oral hearing, as the plaintiff would have had to initiate a new prior art search to respond. According to the GFPC, the nullity defendant could have reacted to the prior art document with new auxiliary requests, since the submission of the document by the nullity plaintiff occurred a few months earlier and, at the latest, within the time limit set by the GFPC after issuing its preliminary opinion. The nullity defendant did not sufficiently explain its delay. In particular, the GFPC held, somewhat surprisingly, that changing its position from the one in the preliminary opinion did not justify filing new auxiliary requests during the hearing. One of the reasons for this position was that the patent owner already had sufficient reason to file its auxiliary requests after the nullity plaintiff had clung to its position that this piece of prior art was relevant, even after the preliminary opinion issued. The GFPC, however, also stated that, in general, a patent owner should not rely on the preliminary opinion, which is quite far reaching.

This decision shows that the parties are generally obligated to present all facts, prior art, and auxiliary requests relevant to the proceedings in a complete and timely manner. In particular, when submitting new auxiliary requests, the patent owner should not rely on the GFPC’s preliminary opinion, but should protect its patent by submitting new auxiliary requests within the time limit set by the GFPC—not during the oral hearing.

Dr. Steffen Steininger and Dr. Teresa Christof


U.S. Patent Updates

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No Deal Brexit and Exhaustion of Rights

On 28 November 2018, the UK government published a draft version of a statutory instrument (Exhaustion of Rights SI), and explanatory memorandum, which together explain the changes which will be made to UK intellectual property law relating to exhaustion of rights, in the event of a no-deal Brexit. The purpose of the SI is to correct any deficiencies in the retained EU law relating to exhaustion of rights, arising as a result of Brexit.

The UK is currently part of the EEA intellectual property rights exhaustion of rights scheme. This means that once goods bearing a registered trade mark or which are otherwise protected by certain intellectual property rights have been sold (with the rights-holder’s consent) anywhere in the EEA the rights-holder cannot prevent those goods from being resold anywhere within the EEA. The government’s stated aim with the Exhaustion of Rights SI is to ensure that, post-Brexit, once a product has been legitimately placed on the market in the EEA that product can continue to be re-sold into the UK without being prevented by the rights-holder. However, unless the UK comes to an agreement with the EU on a reciprocal exhaustion regime, the UK will be left with a one-way exhaustion regime. This means the EU may allow rights-holders to restrict the importation of certain goods from the UK into the EEA that have not been previously put on sale in the EEA from Brexit day.

Whilst the government’s draft SI, if it comes into force, will ensure continuity in relation to goods being imported into the UK from the EU, as we said in our earlier blog on the government’s no-deal notice on intellectual property, what is not clear is what will happen in relation to the UK’s relationship with the rest of the world. As with the no-deal notice, the Exhaustion of Rights SI is silent on the rules that will apply in relation to non-EEA countries. The impact of the SI could be that, for goods first placed on the market outside the EEA, the UK reverts to an ‘international exhaustion’ regime which applied prior to the UK joining the EU. Under the old regime, a first sale in a third country could result in a right-holder not being able to prevent parallel imports of genuine goods into the UK.

The Exhaustion of Rights SI will come into force on Brexit day if approved by both Houses of Parliament. There is some uncertainty as to whether an international exhaustion regime will apply to trade in goods originating outside the EEA after Brexit. The consequences for businesses of such a fundamental change will be difficult to predict.


Follow LimeGreenIP News for further comment on the impact of Brexit on intellectual property rights and visit our Brexit Hub for the big picture… in detail.

Germany: Influencers, distinctiveness and reputation. A translation round-up

The following short posts covering competition issues in influencer advertising, trademark distinctiveness for media services and limitations to the power of reputation are translated from our German language blog. We will publish futher English translations from this blog periodically:

Berlin: Influencer must identify presented products as advertising

In an attention-grabbing decision (case ref. 52 O 101/18), the District Court [Landgericht] of Berlin ruled that, even in cases where products bought by influencers are presented by the latter on Instagram, such presentation must be identified as advertising if the image description includes a link to the Instagram account of the manufacturer.

Comment: With this judgment, the District Court of Berlin triggered an outcry in the influencer scene. In reaction to it, some influencers are now identifying every post of theirs as advertising. Irrespective of these phenomena, however, the actual problems associated with the judgment are also being discussed: how is the law going to deal with the fact that, in the work of the influencer, private and business life are one and the same? Can those who take up this profession therefore no longer act as private persons on social media? Must special attention be paid where links – part of the established communication on social media – are concerned? These questions will now have to be answered by the Berlin Court of Appeals [Kammergericht].

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Author: Sabrina Dücker


Hamburg: “Tagesschau” is sufficiently distinctive as a work title

(3 U 167/15) The Hanseatic Court of Appeals [Hanseatisches Oberlandesgericht – HansOLG] of Hamburg prohibited the use of the sign “Tagesumschau” for an online news portal. The German public broadcaster Norddeutscher Rundfunk (NDR) took legal action in the Hamburg courts against a competing digital news portal called “Tagesumschau.de”, invoking the word mark “Tagesschau”. The District Court [Landgericht] of Hamburg found in favour of NDR at first instance.

Comment: Ultimately, the decision is unlikely to come as a surprise. The “Tagesschau” is an institution of German evening television and has bucked all the digitalisation trends by still attracting millions of viewers every day. Depending on the individual case, clients that are not based in Germany and want to use a similar sign must be informed about this special status.

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Author: Yvonne Draheim


Hamburg: Distinctiveness of Plaintiff’s sign not increased by reputation of Defendant’s

 (327 O 325/15) The District Court [Landgericht] of Hamburg stated that there is no risk of confusion between two signs of which the sign with the more recent priority has an extremely well-established reputation. The Plaintiff was the proprietor of a combined word/figurative mark conferring protection for computer software, which has since been cancelled due to non-use. The trade mark consisted of four squares put together to form a square, and a constituent word. Three of the squares are blue, one is grey. The Defendant is an extremely well-known software manufacturer; its logo in dispute is no less well known. It also consists of four squares put together, and the Defendant’s company name. The squares are different colours. The Plaintiff believed that this logo infringed its trade mark rights and, after a partial withdrawal of the complaint, asserted auxiliary claims against the Defendant for the provision of information and for damages.

Comment: Even though the Plaintiff was unsuccessful, the court had to deal with a very interesting line of argument. In its grounds, the court highlights the significance of the distinctiveness that designates the ability of a sign to be perceived as an indication of a certain company. Against this background, the line of argument cannot succeed, as the ability of the Plaintiff’s sign to refer to the trade mark proprietor is not increased but rather decreased by the sign with a well-established reputation that has more recent priority. Ultimately, the relevant public are more likely to erroneously attribute the trade mark proprietor’s sign to the well-known infringer than vice versa.

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Author: Patrick Fromlowitz

2018 – The year the pharma industry felt AI’s impact and potential

Artificial Intelligence (AI)  is not new… but this year its impact, and the potential for change, was felt across the pharma industry in areas such as drug discovery, tech collaboration, regulation and patentability.

When considering the reasons for this, the answer is not that AI is new. ‘AI’ is an umbrella term covering a spectrum of technologies, from smart algorithms to machine learning. In recent years, advances in AI have accelerated. Yet, for some time now, AI has been used across a wide variety of industries. This includes the pharma industry, where humans have been assisted by computer programs capable of modelling compounds or simulating reactions, for example. Continue Reading

China’s highest court slams trademark squatter, confirming that hoarding trademarks is unlawful

In a recent judgment, China’s highest court, the Supreme People’s Court (“SPC”), dealt a significant blow to trademark squatters. The case is noteworthy for several reasons:

  • First of all, the case was likely selected as a landmark case by the SPC, since the Court accepted to hear the retrial procedure, even though it fully maintained all the previous decisions. This suggests that the SPC earmarked this case to set the record straight on invalidations on the catch-all basis of obtaining a mark through “illegitimate means” provided in Article 44 of China’s Trademark Law.
  • Secondly, the case now confirms, at the highest level, that hoarding and registering trademarks without the intention to put them to genuine commercial use may lead to the invalidation of such hoarded marks.
  • Finally, the SPC further clarified the application of the catch-all article 44 by stating that it is generally applicable to acts that pursue illegal interests by jeopardizing the public interest, unreasonably occupying public resources etc.

It is expected that this case will become a useful precedent in the fight against trademark squatters in China.

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IP in the mix: European Parliament adopts resolution on DLTs & blockchains

The European Parliament has adopted a non-legislative resolution on distributed ledger technologies (DLTs) and blockchains. In the resolution, which was adopted last month, the Parliament emphasised that the EU has an opportunity to become “the global leader” in the field of DLT and to be a “credible actor” in shaping its development and markets globally. The resolution discusses potential benefits of DLT/blockchain in a range of sectors, including copyright, patent and data protection (alongside financial services, healthcare, transport, supply chain, education and energy).

Creative industries and copyright

22.  Underlines that for ‘digitalised’ creative content, DLT can enable the tracking and management of intellectual property and facilitate copyright and patent protection; emphasises that DLT can enable greater ownership and creative development by artists through an open public ledger that can also clearly identify ownership and copyright; highlights that DLT could help link creators to their work, thus enhancing safety and functionality in the context of a collaborative and open innovation ecosystem, especially in areas such as additive manufacturing and 3D printing;

23.  Notes that DLT might benefit authors by bringing more transparency and traceability to the use of their creative content, as well as cutting down on intermediaries, with regard to them receiving payment for their creative content;

While recognising that “the risks and problems of [DLT] technology are not yet completely known”, the resolution lists some of the DLT-based applications that could affect sectors of the economy and makes various recommendations. The resolution will now be considered by the European Commission.

Please read our full article on Hogan Lovells Engage


If you want to take advantage of blockchain’s huge potential and disruptive impact, while avoiding falling foul of ever-developing regulatory and legal requirements, visit our Hogan Lovells Engage Blockchain Toolkit.