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LimeGreenIP News

DSM Watch: One step closer to a European copyright reform

After a long and intense debate – including several postponements – the Committee of Legal Affairs of the European Parliament (JURI) this morning finally agreed on its position on the draft DSM copyright directive. Of course, the plenary is still required to hand down its final vote on JURI’s report. And the trilogue amongst the three legislative institutions is also to follow. However, with today’s vote we are very close to the long awaited position of the Parliament which is the necessary condition for the trilogue to start.

It is fair to say that the debate within and outside JURI has been controversial up until the last minute. Votes have been tight in regard to many provisions. Some parliamentarians have already indicated that they will continue to oppose the now agreed report in the plenary.

What is remarkable is the fact that we see some last-minute provisions that were not featured in previous drafts. For instance, a new Chapter 3a requires the Member States to grant to sport event organizers a sui generis right to the sport events they organize. Obviously, JURI’s report and the Parliament’s anticipated overall position will continue to give rise to plenty of debate. Continue Reading

U.S. – Attorney’s fee awards in Lanham Act cases: An “exceptional” outcome

Verisign, Inc. v. XYZ.COM, LLC, No. 17-1704, WL 2018 WL 2407644 (4th Cir. May 29, 2018)

In this recent decision, the Fourth Circuit Court of Appeals clarified the requisite showing for obtaining an award of attorney fees under the Lanham Act. Reversing a decision out of the Eastern District of Virginia, the Fourth Circuit held that a party seeking attorney fees need only prove that its case is “exceptional” by a preponderance of the evidence, and not by the more stringent clear and convincing standard applied by the district court (See id. at II).

Factual Background

 In 2014, plaintiff Verisign, a company that sells and operates internet domain names, sued competitor defendant XYZ.com, LLC (“XYZ”) for false advertising under the Lanham Act – a plaintiff asserting a Lanham Act false advertising claim under 15 U.S.C. § 1125(a) must establish, among other things, that the defendant made a false or misleading description or representation of fact in a commercial advertisement about his own or another’s product that was material, such that it was likely to influence purchasing decision. In this case, the plaintiff sued over XYZ’s promotion of allegedly high daily sales of XYZ domain names where, according to Verisign, XYZ had been giving the domain names out for free (see *1 Verisign, Inc. v. XYZ.COM LLC, 848 F.3d 292, 298-99 (4th Cir. 2017)).   In ruling in XYZ’s favor on summary judgment, the district court, as affirmed by the Fourth Circuit Court of Appeals, held that XYZ’s statements regarding its profitability and number of new customers were neither false nor material to customer purchasing decisions as required for a successful false advertising claim under Section 43(a) of the Lanham Act (see id. at *2; 15 U.S.C. § 1125(a)(1)).

After prevailing on summary judgment, XYZ moved for attorney fees under Section 1117(a) of the Lanham Act, which permits a “court in exceptional cases [to] award reasonable attorney fees to the prevailing party” (15 U.S.C. § 1117(a)). Following the Supreme Court’s interpretation of an “exceptional case” in an identical provision of the Patent Act, the Fourth Circuit has held that a determination of “exceptional” cases requires, “in light of the totality of the circumstances, that:  (1) there is an unusual discrepancy in the merits of the positions taken by the parties, based on the non-prevailing party’s position as either frivolous or objectively unreasonable; (2) the non-prevailing party has litigated the case in an unreasonable manner; or (3) there is otherwise the need or particular circumstances to advance considerations of compensation and deterrence” (See Georgia-Pacific Consumer Products LP v. von Drehle Corp., 781 F.3d 710, 719-21 (4th Cir. 2015) relying on Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014)).  Applying these factors, the district court held that XYZ had failed to establish that its case was exceptional with clear and convincing evidence (See Verisign, WL 2018 at *2-*3).

The Fourth Circuit’s Decision Continue Reading

France – Rejection of a second SPC for a biological medicinal product

Cour de cassation, Commercial Chamber, 16 May 2018, No. 16-21638

The French Cour de cassation upholds the Paris Court of Appeal’s decision to reject an SPC application for a biological medicinal product which was based on the same patent as a first SPC but on a different market authorization.

The Government of the United-States of America (USA) owns a French Supplementary Protection Certificate (SPC) for a first vaccine against various types of cancer, based on its European patent covering “Self-assembling recombinant HPV16 papillomavirus capsid proteins“.

On the basis of the same patent, the Government of the USA applied for a SPC on a second vaccine, for which it has obtained a distinct market authorization. The HPV16 protein used in the second vaccine is obtained from insects instead of yeast and, as a result, is a truncated version of the one used in the first vaccine.

This SPC application was rejected by the French patent office (INPI) and the Paris Court of Appeal on the ground that the product is already the subject of a SPC.

The Cour de cassation (French Supreme Court) upholds these decisions and confirms that the Government of the USA cannot obtain a SPC for the first vaccine, on the ground of Articles 3, 4 and 5 of European Regulation (EEC) No. 1768/92. Continue Reading

Huawei v. Samsung — A new benchmark for standard essential patent litigation in China?

China has become a new battlefield in the global patent war amongst tech giants in the telecom industry. On 4 January 2018, the Shenzhen Intermediate People’s Court (“Court“) rendered a landmark judgment in the Huawei v. Samsung standard essential patent (“SEPs“) case that is expected to reshape dynamics between the SEP licensors and licensees. On 21 March 2018, the Court released the non-confidential version (Chinese) of its judgment to the public.

The Court ruled in Huawei’s favor — finding that Huawei had fulfilled its obligations under the fair, reasonable and non-discriminatory (“FRAND“) principle, but Samsung had not. Based on that finding, the Court granted an injunction against Samsung, forbidding any future infringement of Huawei’s SEPs through the commercialization of Samsung’s devices. The Court developed a fault-based approach to evaluate Samsung’s and Huawei’s actions during the licensing negotiations.

Case background

SEPs are patents which are meant to be indispensable for the proper working of a product implementing a standardized technology. The SEPs involved in the Huawei v. Samsung case concerned patents for telecommunication technologies, in particular what is known as 2G, 3G and 4G mobile communication standards

Both Huawei and Samsung own extensive patent portfolios including numerous SEPs. This case was mainly about Huawei’s SEPs –in particular, to what extent Samsung was allowed to use those SEPs in its communication devices like mobile phones, tablets etc. without having obtained a formal license from Huawei. Huawei brought its court action alleging that Samsung’s devices infringed its SEPs, and asked the court to grant an injunction against Samsung. Huawei argued that Samsung, by selling communication devices compliant with the 2G, 3G and 4G standards, had by definition implemented Huawei’s SEPs. The Court accepted these arguments without much discussion.

The only aspect where the Court made an in-depth analysis was whether Huawei was entitled to seek an injunction based on its SEPs, as SEPs are subject to a set of specific conditions.

When a patent is incorporated into an industry standard and the patent holder believes it may become essential to the implementation of the standard, it will need to make a pledge to license the patent to all interested parties on FRAND terms.

Both Huawei and Samsung agreed to license their communication SEPs on FRAND terms. The question before the Court was whether in the negotiations to cross-license their patent portfolios, each of the two companies had complied with their FRAND obligations. The Court found that Huawei had, and Samsung had not. Continue Reading

China’s Advertising Law – That fine is (chest)nuts!

In a recent decision, a Chinese court imposed a fine lower than the statutory range under the Advertising Law of the People’s Republic of China (as amended in 2015) (“Advertising Law“). This suggests that courts retain certain discretion in reducing statutory sanctions under the Advertising Law. This decision, while not binding on other courts and may be specific to the facts, may be a welcome sign to minor and small-scale violators of the Advertising Law.

The case concerns the use of superlatives in advertisements. Article 9(3) of the Advertising Law prohibits the use of superlatives such as “national”, “highest” and “best”. The list is non-exhaustive. Other superlative words, for instance “world-class”, “supreme” and “No. 1”, have been found to fall foul of the provision.

The prohibition can catch the unwary since it applies irrespective of the intention of the advertiser and whether or not the superlative can be justified by objective facts. Violation of Article 9(3) carries, among other potential sanctions, a fine ranging from RMB 200,000 to RMB 1 million (about USD 31,000 to USD 156,000).

Before the recent judgment, it has been widely perceived that neither the court nor the authorities can impose a fine lower than the minimum of this range.

In this case, a store owner selling roasted chestnuts was fined RMB 200,000 by the authorities for advertising using the phrase “Top-of-the-top store for roasted chestnuts in Hangzhou” (“杭州最优炒货店”). The store owner was unhappy about the fine and appealed to the Hangzhou Xihu Court.

The Hangzhou court gave its judgment in May 2018, reducing the fine to RMB 100,000. In affirming its power to impose a fine lower than the statutory range, the court considered the Advertising Law in conjunction with the Administrative Punishment Law. The Administrative Punishment Law provides that the imposition of administrative penalties should take into account the facts, nature and seriousness of the violations of law and the damage done to the society. It is a mitigating circumstance where a person commits a relatively minor illegal act and promptly remedies the breach.

In reducing the fine, the court considered that the roasted chestnuts shop is a small-scale individually-run business. Furthermore, given that roasted chestnuts is a very common kind of food, customers are very unlikely to be misled by the superlatives. The court therefore concluded that the violation is relatively minor and that the harm done is minimal.

Artificial Intelligence and your business: A guide for navigating the legal, policy, commercial, and strategic challenges ahead

Virtually all industries are being reshaped with the use of Artificial Intelligence and advanced machine-learning. Everything from healthtech to self-driving vehicles, to education and smart homes, drones and space, social media, and beyond is being affected. These new technologies present a variety of commercial opportunities and the potential to change our daily lives. At the same time, new AI innovations bring many legal, policy, commercial, and strategic challenges that need to be considered thoughtfully across jurisdictions. In some instances, existing frameworks can be applied or adapted. For others, new paradigms and robust safeguards may be needed. And as machine-learning technologies continue to evolve, organizations will need dynamic, sophisticated compliance approaches.

If an AI system comes up with a technical solution that happens to infringe on third parties’ patent rights, or develops art or music that has too-uncanny similarities to known, existing works, who is the infringer?

In this guide, we highlight several of the key challenges and commercial opportunities for AI and advanced machine-learning. A specific chapter is dedicated to Intellectual Property issues such as:

  • Ownership of patents, copyright and trade secrets
  • Ownership of data
  • Infringement challenges

Download PDF

AI: the future of your brand protection and enforcement strategy

…that’s the view of many of the respondents to our Brand Benchmarking 2018 survey.

Over 200 brand owners of all shapes, sizes, industries and locations were surveyed on how they manage their trademark portfolios. Our analysis revealed that:

  • 93% of respondents believe that artificial intelligence (AI) will have a positive influence: saving them time and money.
  • Six of the top 10 jurisdictions in which brand owners experience the greatest challenges in trademark prosecution are in Asia.
  • Companies headquartered in Europe are investing more in their trademark teams, which are at least twice as large as their counterparts in the US and Asia.
  • For both prosecution and enforcement, China is recognized as the most challenging country; however businesses also acknowledge that it is the most improved jurisdiction.

These are just a few of our findings. To view the full set of results and our analysis please use the link provided to download the report. LINK


Our reports from previous years are available below:

You might also consider taking a look at our Total Brand Care approach. It’s not just about registering and protecting trademarks. Brands and their value are positively and negatively impacted by a wide range of legal issues – Read more

TMT China Brief – Summer 2018

Welcome to our first issue of TMT China Brief in 2018!

This edition features a total of 14 articles which capture various significant TMT developments in Greater China. These developments cover an extraordinary breadth of topics and demonstrate a strong increase in the nuance and complexity of TMT law and practice in the region.

Cybersecurity in China remains a hot topic. The Cyber Security Law is already in place but the question is how this law is going to be interpreted and implemented. In this edition, we will look at various draft/trial measures which provide further insight on key topics such as critical information infrastructure and security review of network products. We will also look at closely related topics concerning data localisation and cryptography.

We are pleased to present you this edition, which we hope will help you navigate through all these new developments.

Please click here to read the full briefing.

UK Supreme Court holds rights-holders should bear the costs of web-blocking injunctions

The Supreme Court handed down its much anticipated judgment in Cartier International AG v British Telecommunications Plc today. The Judges held unanimously that rights-holders should bear the costs of implementing website-blocking injunctions. In doing so, the Supreme Court reversed the Court of Appeal majority judgment. Although the case concerned blocking sites selling counterfeits, the judgment is not limited to online trade mark infringement. It will also apply in cases where ISPs (who are not caching or hosting) are required to block access to infringing copyright content. Continue Reading

Trade Secrets: UK implements EU Directive on time but uncertainties remain

On Saturday, 9 June 2018, with little or no fanfare, the UK’s Trade Secrets (Enforcement, etc) Regulations 2018 (SI 2018 No. 597) came into force.   These  Trade Secret Regulations implement into UK law the 8 June 2016 EU Directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure ((EU) 2016/943) (“the EU Directive”).  Subject to any change of policy by the Government, the Regulations will remain in force in the UK after Brexit.

Over the coming weeks, Lime Green IP News will be focussing on key aspects of the UK’s Trade Secrets Regulations, including time limits and limitation periods, procedural protections in disputes before the courts, as well as interim and final remedies. We start by looking at the provisions at the heart of the new law.

Implementation

The EU Directive is not directly effective in EU Member States (unlike an EU Regulation) and so it has to be implemented by national legislation in all 28 countries. The Directive is a minimal harmonising legislation, which means that Member States are permitted to provide for a higher level of protection for trade secrets, so long as at least the same level of protection and minimum standards for measures, procedures and remedies are ensured for trade secret holders.

Prior to 9 June, trade secrets in the UK were protected by the law of confidence derived from principles of equity and based almost entirely on case law: there was no statute defining a trade secret and no standalone legislation dealing with the procedural safeguards and remedies required under the Directive*.  According to the UK Intellectual Property Office, many stakeholders responding in the short (one month) consultation period on the draft Trade Secret Regulations felt that no transposition of the Directive into a UK statute was necessary because the current system worked well, and indeed it has long been (rightly) held up as one of the gold standards in Europe.  Nevertheless, after the consultation, the UK Government explained in May why it had decided (whilst taking on board many comments on the detailed drafting) to go ahead and put trade secrets protection on a statutory footing, as follows:

… where it is clear that measures are already provided for under current legislation, case law or courts rules, there is no need for [the UK] to implement these. Where there is uncertainty as to whether the provisions of the Directive apply across all legal jurisdictions, in order to put matters beyond doubt and ensure transparency, coherence and consistency, the Government has taken the view that certain provisions should be implemented fully.

The new UK law on Trade Secrets Continue Reading