On 10 July 2019, the Office of the U.S. Trade Representative (USTR) initiated an investigation pursuant to Section 301 of the Trade Act of 1974 into France’s Digital Services Tax (DST) to determine whether the tax is discriminatory or unreasonable and burdens or restricts United States commerce.
Following an affirmative finding by USTR, the U.S. may take unilateral actions against imports of goods and services from France (including the imposition of a tariff or quota) or may initiate World Trade Organization (WTO) dispute settlement proceedings, among other actions.
Click here to read more
On 30 July, the Court of Appeal of The Hague ruled on the formal entitlement to priority following from a US provisional patent application (judgment in Dutch here). The attack on priority in this case is part of a recent trend by parties in patent litigation which aims to challenge entitlement to invoke priority under the Paris Convention and the European Patent Convention.
Biogen Inc., F. Hoffmann-La Roche AG and Genentech Inc. jointly own a European Patent (“EP“) which invokes the priority of a US provisional patent application (“P1“). P1 was filed by the two inventors, as was required under US law at that time. At the time of filing P1, one of the inventors was a Biogen employee (the “Inventor“). The EP originates from an international Patent Cooperation Treaty (PCT) application, which was jointly filed by all applicants of P1 plus additional applicants.
Celltrion claimed that the EP is invalid for lack of novelty, arguing that it is not entitled to invoke the priority of P1. According to Celltrion, the Inventor did not (timely) transfer the priority right to Biogen. The parties agreed that if the EP was not entitled to the priority right, a certain publication would destroy the patent’s novelty.
Biogen argued that the priority right was automatically transferred to Biogen at the time of its creation because the Inventor and Biogen had entered into an “Employee Proprietary Information and Inventions and Dispute Resolution Agreement” (“the Agreement“).
In 2017, the District Court ruled against Biogen and considered that Biogen was not entitled to the priority of P1 (and hence that the EP lacked novelty). Biogen appealed the decision and in its (interim) decision of 30 July, the Court of Appeal ruled on the formal entitlement to priority. However, it has not yet dealt with other validity arguments raised by Celltrion.
Court of Appeal assessment
In its decision, the Court of Appeal has focused on two questions:
(i) Whether and under what conditions someone other than the applicant of the priority application may invoke the priority right, and
(ii) How the Agreement between Biogen and the Inventor should be interpreted. In order to be able to answer these questions, the Court of Appeal had to determine the applicable law. Continue Reading
China is a market that represents a paradox for many telecoms, media and technology (“TMT“) companies. On the one hand it offers the promise of almost unlimited growth potential if you get the product right, but on the other it presents huge challenges from the regulatory and compliance perspective in terms of establishing a foothold in the market. The challenges include market access restrictions, data localization requirements, to name but a few. The market access and intellectual property protection issues in particular have been the focal point of the ongoing trade negotiations between the United States and China.
The good news is that China has and is likely to further relax restrictions on foreign investment in the TMT sector, regardless of the outcome of the trade war, although it is clear that such relaxations will be implemented to China’s timetable and may not go nearly far enough in terms of meeting the expectations of foreign investors. We have prepared this Guide to help investors understand the challenges and benefit from the opportunities in this rapidly-growing sector.
We’ve included a specific chapter on IP which deals with the following questions:
- What kind of intellectual property rights are protected under Chinese law?
- How can IP rights be obtained in China?
- In what situations may the IP owner lose the IP rights?
- How to protect and enforce IP rights when an infringement takes place
- Why is protection of IP rights important for doing business in China and what should I do?
Please click here to download our full guide.
Jason Lohr (San Francisco) held the first in a series of internal webinars on the basics and legal implications of artificial intelligence (AI) and machine learning, highlighting their relevance to IPMT.
AI touches nearly every industry and is used to solve complex problems, spot and minimize risks, improve decision-making, and develop new products. Key issues and tips for navigating this complex area were covered, including:
- The current state of AI and key concepts: As AI is still relatively new, the best way to develop a better understanding is to become familiar with the terminology and concepts surrounding AI. Concepts include data classification, inferring information from input data, and identifying objects by comparison with input data-set, machine learning and artificial neural networks (ANN), AI hardware characteristics, and patent filing trends. Further it is important to be able to distinguish between conventional technology, AI, and IoT (the internet of things).
- Practical uses and instances of machine-learning and AI: Insurance risk analysis, service offering based on user behavior, automated legal document drafting—AI can provide these types of services through identifying and recognizing patterns to make informed decisions that can make our lives more efficient and safe.
- Predictions of where AI is going: Examining the current state of AI can predict where it is heading. AI should be able to operate autonomously to communicate, create, and perform as a human would, opening up larger issues about Big Data & IoT.
- AI as a legal tool: AI tools are predicted to affect the legal profession as cloud-based tools become more prevalent among in-house counsel. Law firms can use tools such as Luminance, Nalytics, and Lex Machina to review, analyze, assess, and minimize risks. However AI cannot fully draft a patent or contract, which is why paralegals and associates are still very much needed to conduct the actual legal analysis.
- Concerns: With the excitement around AI comes concerns. Common issues include concerns over data protection, proof of compliance, due diligence, when to patent AI or machine learning, ethical considerations, risks, and non-lawyer assistance.
If you would like to attend upcoming sessions on this topic or require more details on any of the above issues, please contact Tara Hanley, Joshua Prietzel, or Jason Lohr.
Russia is facing potential restrictions of foreign ownership in digital companies. This follows on similar restrictions over Russian mass media companies and online cinemas which took effect in 2016 and 2017, respectively (see our earlier post). These proposed amendments coincide with the announcement of major e-commerce and foodtech JV deals in Russia with participation of Mail.ru, the owner of Russia’s top social network VKontakte (a JV with Alibaba, Megafon and the Russian Direct Investment Fund (RDIF) as well as a JV with Sberbank).
In particular, on 26 July 2019, Mr. Anton Gorelkin, member of the Russian Parliament, proposed a draft law introducing amendments to the Federal Law on Information, Information Technologies and Protection of Information (the “Draft Law“). The Draft Law provides for restrictions in relation to foreign shareholding in certain Internet / information resources in Russia. The scope of restrictions and consequences of incompliance are similar, although not identical to the above-mentioned rules on foreign control over mass media and online cinemas which led to a substantial modification of the media industry in Russia in 2015 – 2016.
For more on what this means for your business continue reading on our Global Media & Communications Watch blog
Hogan Lovells’ Standard Essential Patent (SEP) Update reports on recent news and case decisions from jurisdictions including China, France, Germany, Italy, Japan, the Netherlands, Spain, the United Kingdom and the United States. The August 2019 update can be accessed in the following languages:
- English language available here
- 日本語 (Japanese language) available here
- 한국어 (Korean language) available here
The August 2019 update covers these developments across the globe:
Global News & Notes
- Market research firm IPlytics released a May 2019 report summarizing its analysis of SEPs declared essential to the 5G standard.
- Via Licensing Corporation has announced that it purchased around 100 Long Term Evolution (LTE) SEPs owned by Blackberry and that these SEPs would be added to its licensing package at no additional cost.
- According to an official announcement from the Guangdong Higher People’s Court and other reports, Huawei Technologies Co., Ltd and Samsung (China) Investment Co., Ltd have agreed to a global settlement of their SEP disputes.
- In a decision dated 16 April 2019 (Docket No. 061/2019), the Paris Court of Appeal affirmed a 2015 first instance decision rejecting a patent owner’s claims that a telephone manufacturer infringed its allegedly essential patents by implementing the LTE and UMTS standards.
The Netherlands Updates
- On July 2, 2019, the Court of Appeal of The Hague awarded Philips an injunction against Wiko, based on Wiko’s infringement of certain SEPs owned by Philips.
United Kingdom Updates
- In its 18 July 2019 judgment in TQ Delta v. ZyXEL, the UK Court of Appeal allowed ZyXEL’s appeal and vacated the September RAND trial.
- On 4 July 2019, the Patents Court handed down its decision in Conversant v Huawei  EWHC 1687 (Pat), finding that, while Conversant’s SEP was essential and infringed, it was nevertheless invalid for added matter.
United States Updates
- Judge Lucy Koh of the Northern District of California found that Qualcomm’s SEP licensing practices breached U.S. antitrust law and FRAND contractual obligations, ruling in favor of the U.S. Federal Trade Commission.
- Judge Rodney Gilstrap of the Eastern District of Texas ruled that Ericsson had offered its SEPs on FRAND terms during licensing negotiations with a major cellphone manufacturer.
- On July 12, the Federal Circuit vacated a USPTO inter partes review (IPR) decision that had rejected as invalidating prior art a working draft of the High Efficiency Video Coding standard (the H.265 standard) distributed to an e-mail listserv.
For more information, please click on the link with the detailed newsletter (English language, 日本語, 한국어), or contact partners Paul Brown, Frederick Ch’en, Zhen (Katie) Feng, Joe Raffetto, Stanislas Roux-Vaillard, Dr. Benjamin Schröer and Ruud van der Velden. Our full series of all our Global SEP Updates (including past updates) can be accessed here.
Recently, the Chinese Patent Reexamination Board (PRB) published a written decision where patentee Chen He’s Electric Unicycle patent (CN102275621B) was invalidated based, partly, on a failure to establish sufficient domestic priority.
The case is significant because of:
a) its consideration of whether the patent can be invalidated due to not applying for a foreign filing license (FFL) and
b) its two-part test for establishing domestic priority.
Requirements for a foreign filing license
The requirements for a foreign filing license are set out in Article 20, paragraph 1 of the Chinese Patent Law. This Article 20 requires that for any technical subject matter pertaining to invention and utility model applications that are completed in China, the applicant must first submit a request for confidentiality review at the Chinese Patent Office (CNIPA). The applicant may only subsequently apply for a patent on the said technical subject matter in a non-Chinese country after having received a “foreign filing license” approval from CNIPA. Article 20 further notes that a subsequent grant of a Chinese patent will be invalid if the patentee is found to have violated the confidentiality review requirement.
Here, both the petitioner (NaEnBo Beijing Technology Company Limited et al) and the patentee, Chen He, incorrectly relied on evidence of the nationality or residency of the applicant to show whether there was a foreign filing license violation. Chen He provided evidence that he was an American citizen at the time of filing and therefore argued that CNIPA approval prior to filing in the U.S. is not a requirement, whereas the petitioner argued that Chen He was a Chinese citizen at time of filing and so an FFL requirement should apply. Continue Reading
German courts have been dealing with the Metall auf Metall [song by the German band Kraftwerk] case for two decades. Recently, the CJEU, too, has had to deal with the case and ruled by judgment of 29 July 2019 (C-476/17) that unless the phonogram producer consents, sampling constitutes an infringement of his rights. However, the CJEU argued, if, by modifying the sample, it can be ruled out that the content is recognizable, there is no infringement of rights.
The Plaintiffs are members of the band Kraftwerk, which, in 1977, released the album “Trans Europa Express”, which includes the title “Metall auf Metall”. The Defendants are the producers Moses Pelham, founder and managing director of the music label Pelham Power Productions (3P), and Martin Haas, who produced the album “Die neue S-Klasse” by rapper Sabrina Setlur, which was released in 1997. The album includes the track “Nur mir”, to which approximately two seconds of a rhythm sequence from Kraftwerk’s “Metall auf Metall” were added (“sampling”), but with the song’s speed reduced by 5% and played in a continuous loop (“loop”). The producers did not obtain prior consent to use this audio fragment, nor was a licence taken. Continue Reading
We are delighted to welcome Samantha Brinkhuis to our IPMT practice today, 1 August. Based in Amsterdam, she joins us from De Brauw Blackstone Westbroek. With extensive experience in both contentious and non-contentious matters, Samantha primarily assists clients with trademark, copyright and unfair competition matters. Her practice also covers trade secrets, media and entertainment law, advertising law, IP transactions, licensing, IP strategy and enforcement.
Burkhart Goebel, Head of the IP practice at Hogan Lovells, said: “Samantha is a strong addition to our Intellectual Property, Media and Technology practice. Her reputation in the market is outstanding and her cross-sector experience is a great asset.”
Samantha Brinkhuis added: “I am excited to join Hogan Lovells, a law firm of global scale and prestige with a highly regarded IP team. I am committed to providing clients with the best possible solutions to the legal challenges they face.”
This news was announced in May on HL.com as well as in other publications in English (WIPR, IPPro) and Dutch (Advocatie, Boek9.nl, Ie-forum.nl, IEF.nl). Samantha joining us follows our continuing expansion with the the additions of Simon Roberts and Jason Leonard joining our practice group in New York and four new lateral partners in our San Francisco and Boston offices – Krista Schwartz, Patrick Michael, Kristin Connarn, and Bob Underwood.
In a recent trademark case, the Court of Appeal of The Hague set up a confidentiality club in order to create a possibility for the alleged infringer to submit confidential information in the proceedings. This mechanism was introduced in Dutch law last year through the implementation of the EU Trade Secrets Directive. Although the wording of the relevant provision refers to cases involving misappropriation of trade secrets, the Court of Appeal of The Hague has thus decided that this measure can also be applied in IP proceedings.
Confidentiality clubs in the Netherlands
Since the implementation of the EU Trade Secrets Directive last year, Dutch procedural law provides that in trade secret misappropriation proceedings, Courts can determine that access to alleged trade secrets introduced in the proceedings is only granted to (at least) one person of the opposing party and that party’s lawyer under confidentiality (Article 1019ib Dutch Code of Civil Procedure). This is referred to as a confidentiality club.
Another new provision provides the opportunity for Courts to order that certain documents are only accessed by a lawyer or another authorized representative, if the protection of a trade secret would otherwise be disproportionately affected (Article 22a(3) DCCP). This provision also applies outside the context of trade secret misappropriation proceedings and is referred to as an external eyes only confidentiality club.
In a recent case (Dutch language) before the Court of Appeal, the party that was accused of trademark infringement wished to respond to statements made by the trademark owner, but indicated that it could only do so by submitting confidential documents. The confidential documents related to the supply chain of the alleged infringer. Continue Reading