The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Thursday, 19 October 2017

Recommendation on measures to safeguard fundamental rights and the open internet in the framework of the EU copyright reform

Further to the release of the European Commission’s Proposal for a Directive on Copyright in the Digital Single Market, the discussion has focused on a number of aspects. The proposal to remedy the so called ‘value gap’ (Article 13) [Katposts here] has attracted significant attention and commentary.

Together with a group of scholars active in copyright issues, Professor Martin Senftleben (Vrije Universiteit Amsterdam) has published a Recommendation on measures to safeguard fundamental rights and the open internet in the framework of the EU copyright reform.

Professor Senftleben explains more in detail the content of the proposal.

Here’s what he writes:

 Article 13 of the Proposed Directive on Copyright in the Digital Single Market (DSMD) and the accompanying Recital 38 are amongst the most controversial parts of the European Commission’s copyright reform package. Several Members States (Belgium, the Czech Republic, Finland, Hungary, Ireland, the Netherlands [here] and Germany [here]) have submitted questions seeking clarification on aspects that are essential to the guarantee of fundamental rights in the EU and to the future of the Internet as an open communication medium. 

A closer analysis of these questions in the light of jurisprudence of the Court of Justice of the European Union (CJEU) shows that the measures contemplated in Article 13 DSMD can hardly be deemed compatible with the fundamental rights and freedoms guaranteed under Articles 8, 11 and 16 of the EU Charter of Fundamental Rights. The application of filtering systems that would result from the adoption of Article 13 DSMD would place a disproportionate burden on platform providers, in particular small and medium-sized operators, and lead to the systematic screening of personal data, even in cases where no infringing content is uploaded. The filtering systems would also deprive users of the room for freedom of expression that follows from statutory copyright exceptions, in particular the quotation right (Article 5(3)(d) of the InfoSoc Directive) and the right to parody (Article 5(3)(k) of the InfoSoc Directive).

The adoption of Recital 38 DSMD would moreover lead to a remarkable restriction of eligibility for the liability privilege following from Article 14 of the E-Commerce Directive. Recital 38 DSMD does not adequately reflect the current status quo in the area of the safe harbour for hosting laid down by Article 14 E-Commerce Directive. Instead, it takes the assessment criteria of “promoting” and “optimising the presentation” of user-generated content out of the specific context of the L’Oréal/eBay CJEU decision. The general requirement of “knowledge of, or control over” infringing user-generated content is missing. In the absence of any reference to this central requirement, Recital 38 DSMD is incomplete and fails to draw an accurate picture of the current conceptual contours of the safe harbour for hosting.

Furthermore, there can be little doubt that according to the CJEU, Article 15 of the E-Commerce Directive is fully applicable to user-generated content platforms and intended to shield these platforms from general monitoring obligations. The Court’s jurisprudence shows clearly that an obligation to filter any information uploaded to the server of a platform hosting user-generated content would lead to a prohibited general monitoring obligation and be incompatible with Article 15 of the E-Commerce Directive.

In general, the Commission Proposal and subsequent Council Presidency Compromise Proposals confuse and mix different legal questions by bringing together the issue of the scope of the safe harbour for hosting under Article 14(1) of the E-Commerce Directive, and the issue of whether (and when) platform providers themselves carry out an act of communication to the public and fulfil the requirements of Article 3(1) of the InfoSoc Directive.

Looking for a safe harbour
Considering the criteria which the CJEU developed in the context of Article 3(1) of the InfoSoc Directive, it becomes moreover apparent that the mere act of storing and providing access to the public is not sufficient to establish copyright infringement. Recital 38 would dismiss additional infringement criteria that have evolved in the jurisprudence of the Court. Because of the ambiguous wording of Recital 38 DSMD, there is a real risk of modifying the notion of “communication to the public” considerably.

These findings shed light on the need to clarify service provider immunity instead of further complicating the legal assessment criteria. A further clarification of applicable rules should extend the principle that is already reflected in the EU acquis, namely that providers are not liable for users’ actions which they cannot reasonably be expected to know and control (Articles 12 to 14 of the E-Commerce Directive). A further clarification of this rule is advisable to pave the way for a uniform application of service provider immunity throughout the internal market. In the interest of legal certainty and a higher level of harmonization, a well-structured European legislative design of the “notice and takedown” procedure should be introduced, accompanied by an appropriate “counter notice” procedure.

In addition, it would be consistent with the existing acquis to introduce a new use privilege in favour of the creation of content remixes and mash-ups by users and the further dissemination of these remixes and mash-ups on online platforms. As a countermove, online platforms with user-uploaded content could be responsible for the payment of fair compensation. They could either pass on these additional costs to their users, or use a part of their advertising income to finance the payment of fair compensation. To generate an additional revenue stream for authors and performers, this alternative solution is clearly preferable. It does not encroach upon fundamental rights and freedoms, and leaves intact the safe harbour for hosting in Article 14 of the E-Commerce Directive.”

AIPPI Congress Report 11: What's the (technical) problem?

Said every alleged infringer everywhere...
The identification of the technical problem is an important aspect of European patent practice.  In this panel discussion on the final day of the AIPPI World Congress in Sydney, practitioners from Germany, the US, China and Japan explored the importance – or otherwise – of identifying the technical problem in their respective jurisdictions.  James Ellsmore (KWM) reports on Tuesday's final panel session:  
"The European Patent Office’s problem-solution approach to assessing obviousness renders the identification of the technical problem central.  It is also a requirement of the European Patent Convention that an application for a patent state the technical problem the claimed invention solves (at least implicitly, if not in explicit terms).  It was against this background that Dietmar Haug, Senior IP Counsel with KNH Patentanwälte, led a panel of practitioners in a discussion of the metes and bounds of the technical problem and its relevance to prosecution practice and infringement proceedings. Marina Cunningham, Managing Partner of McCormick Paulding & Huber, explained that the requirement to indicate the technical problem in a European application stood at odds with drafting practice in the US.  In the US, Marina explained that current practice is to limit the description of the technical problem in the background section as much as possible.  This is done for several reasons and stands in contrast to previous practice in the US, when applicants used the background section to define the technical problem addressed by the claimed invention.  As Marina explained, framing the problem in this way and identifying the closest prior art did not always work to the applicant’s advantage during prosecution or litigation and has now been abandoned. Sitting on the continuum between Europe and the US, Yali Shao, a partner of Liu, Shen & Associates explained that like Europe, China had adopted the requirement that a Chinese application describe the technical problem.  However, it is not a mandatory requirement: if there is no description in the specification, the examiner will not require the applicant to add a description into the specification.  Yali canvassed a number or pros and cons for either stating or not stating explicitly the technical problem in the specification.  Yali’s suggestion was that the Chinese application should state in a non-limiting way that more than one technical problem can be solved by the invention: “the invention solves at least one general problem and several specific problems”.  The one exception to the foregoing rule, Yali said, was that for business related inventions in China, an applicant should explicitly describe the technical problem in the specification, as this will often assist in demonstrating to the examiner that the claimed business method presents a technical solution and thus exhibits the required technical feature for grant. In Japan, like the US, there is no requirement that a specification include a description of the technical problem.  However, there are, as Nobushige Furuhashi, a partner of Abe, Ikubo & Katayama explained, benefits during prosecution in stating the technical problem – doing so may enhance an applicant’s chances of favourable examination as it is an opportunity to frame the problem that the invention overcomes in a way favourable to the applicant. The panel went on the discuss the effects of stating the technical problem and what impacts this might have for prosecution of the application where objections are raised based on novelty, obviousness, sufficiency and unity of invention, as well as the importance or otherwise of having an identified technical problem in cases of patent infringement.
 The panel session was a timely reminder of the difficulties faced by applicants filing patents in multiple jurisdictions and a valuable opportunity to learn more about how the specific issue of describing the technical problem is treated in different jurisdictions."

AIPPI Congress Report 10: Digital Health

The AmeriKat facing her own digit-al health 
In an invigorating panel discussion featuring experts from Australia, the US and Japan, the fourth and final pharma session of the AIPPI World Congress explored the IP challenges for digital healthcare businesses.  James Ellsmore (KWM) reports:   
"The key message from the panel, chaired by Niklas Mattsson of Awapatent, was that any IP strategy must align with, and support, the business’ overall commercial goals.  This was the case regardless of the type of business – whether an established pharmaceutical or medical devices company, university spinout or independent start-up. 
From an IP perspective, some of the major challenges identified by the panel included the difficult environment for patenting computer-implemented inventions in jurisdictions like the US and Australia, the need to work effectively with third party partners, and the inherent differences between traditional modes of IP protection, which evolve slowly and offer protection over the long term, and alternative methods of protecting IP in the digital health industry where product life cycles are much shorter.  
What does this mean for businesses looking to play in the digital health space?  First, digital health businesses need to develop (and regularly revise) their IP strategy.  What may have worked in the past, such as filing a patent for a key aspect of the new technology, may not work so well for a digital health technology.  Secondly, businesses should ensure that robust practices and procedures are put in place when working with any third party partners.  And finally, businesses should not be afraid to consider what other (non-traditional) modes of IP protection might support those businesses’ overall strategy and commercial goals. 
The first panellist spoke of her first-hand experience with Cardihab to develop a digital cardiac rehabilitation service.  Leonore Ryan, formerly of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) (Australia’s leading government research body) and Cardihab, provided attendees with an insight into the constraints that digital health start-ups face when bringing a new digital health technology to market.  In Cardihab’s case, it was a 2-person start-up with $50,000 in the kitty.  It needed to get to market quickly and faced difficult choices about how to achieve this with a limited budget.  While it had an IP strategy, Leonore explained that it did not focus on traditional forms of IP protection.  Instead, Cardihab looked to gain a competitive edge through being first to market, enhancing user experience and developing robust clinical trial data to support its technology platform.  In Cardihab’s case, the ability to provide proof of clinical efficacy based on robust clinical trial data was more important than pursuing traditional forms of IP protection.  Leonore’s presentation echoed some of the key themes of an earlier presentation of Jane Perrier the previous day about venturing with IP.  As Jane explained, and which Leonore emphasized, the business must consider its IP strategy and how any IP can be used to achieve the business’ strategic objectives. 
The second panelist, Jonathon Anderson, patent counsel with Eli Lilly, then addressed the session on some specific IP considerations for digital health businesses, considered particularly from the perspective of an established pharmaceutical/medical devices company.  Jonathon expanded on challenges such as patent eligibility for computer-implemented inventions following the US Supreme Court’s decision in Alice, the significance of shorter product lifecycles for digital health products as opposed to pharmaceutical products, and discussed the different types of protection available for graphical user interfaces in the US and their value (or perhaps lack thereof).  Jonathon also canvassed some of the challenges for digital health collaborations between pharmaceutical and medical device companies on the one hand, and universities, research organisations and start-ups on the other.  He offered some ‘tips and tricks’ for overcoming some of these challenges.  A key message of Jonathon’s was that an established business moving into the digital health space needs to be aware of “culture clash” – there are different lifecycle management techniques for digital health products and that what has worked successfully in the past for traditional medical devices or pharmaceuticals may not necessarily work with a new product offering in the digital health space." 
Finally, Osamu Yamamoto of Yusua & Hara spoke of the Japanese experience with digital health technology.  Unlike Australia and the US, Osamu-san pointed out that some of the challenges in those jurisdictions – such as patenting computer-implemented inventions and isolated genomic DNA sequences – do not necessarily apply in Japan.  A key take away from Osamu-san’s presentation was the importance of knowing the market in which the business intends to develop its digital health product or service.  Given Japan’s “super-aging” society, the Japanese government has adopted a number of measures aimed at promoting the development of digital healthcare.  One of these measures was the liberalisation of remote medical treatment, which has led to a number of new applications and systems for the provision of remote medical care.  Other measures have included reforms to laws to protect personal information and to enhance trade secrets protection.  These reforms have significantly changed the landscape for offering digital health products and services in Japan, demonstrating the importance of customising a strategy to the specific market in which the product or service will be developed. 
While cats might have nine lives, digital health businesses only get one shot at success.  The panel session establishes that having an appropriately tailored IP strategy, investing in smart partnerships and being open to non-traditional forms of IP protection might significantly extend a business’ chance of success."

AIPPI Congress Report 9: The middleman - intermediary liability

The only intermediary blocking the IPKat is interested
 in complying with is that of your computer screen
On Monday, AusKat AIPPI reporter Clare Cunliffe attended the AIPPI World Congress panel session on “The middleman – intermediary liability”. The session delved into the problem created by advanced technologies and increased global access to communication networks bring opportunities to exploit and infringe intellectual property rights online, by a variety of actors.  Clare reports:  
"This panel session discussed intermediary liability in the digital world in key jurisdictions, including the availability of site blocking injunctions and addressed the practical effects and inherent limitations of such injunctions in the digital era.
The session was moderated by Agris Bitāns, of Eversheds Sutherland. The speakers were Remy Chavannes of Brinkhof, Marketa Trimble of the University of Nevada, Justice John Nicholas of the Federal Court of Australia and Martin Hosking of Redbubble (an online retailer of artworks uploaded by users). 
The panel considered:
  • What is an intermediary? Mr Chavannes offered a pragmatic definition of an intermediary, being anyone who could help a rights holder either prevent or prosecute an infringer.
  • The types of responsibility that might be imposed on an intermediary. Mr Chavannes suggested that these included financial liability, the responsibility to remove or block objectionable material to to prevent re-publication or removed content, the responsibility to identify primary infringers
  • Who had the rights and duties to determine infringement: This involved considerations of automation, transparency and redress.
Dr Trimble noted that as the twentieth anniversary of the US Digital Millennium Copyright Act approaches, some observations can be made about the safe harbor regime (The DMCA provides that internet service providers will not be liable for copyright infringement by users, if the internet service provider has, among other things, taken certain steps when it receives notice that infringing material resides on its network; adopted and implemented a policy that provides for termination in appropriate circumstances of users who are repeat infringers; and accommodated standard technical measures that are used by copyright owners to identify and protect copyrighted works). 
Those are:
  • The safe harbor regime is very widely used. More than 90,000 entities have registered with the US Copyright Office to claim the protection of the safe harbor provisions.
  • The take down provisions are very widely used. Google has reported that it has taken down more than 3 billion pages.
  • The landscape has changed. In 1998, there were 2.4 million websites, and by 2015, there were 836 million. Since 1998, we have seen the emergence of Google, Bit Torrent, and Facebook.
  • Perceptions of the DMCA have changed. Originally, it was considered that the DMCA would have a chilling effect on free speech. Recently, Google observed that the safe harbor scheme has achieved its objectives (although rights holders have suggested that it is one sided).
Dr Trimble suggested that since legislation traditionally lags behind technology, it may be time to look again at whether the DMCA is striking an appropriate balance between the rights of rights holders and of online service providers. In particular, she observed that there is little incentive for online service providers to implement policing schemes which would result in them having actual knowledge of the infringing acts. She suggested that the scheme should be revisited to create incentives for online service providers to detect infringement, while maintaining the safe harbour protection. 
Dr Trimble also observed that difficult conflict of law issues apply in relation to the issue of intermediary liability. There is scope for clarification of the operation of conflict of laws in the context of intellectual property. 
Clare's very own IP cat
Justice Nicholas observed that in Australia, cases concerning intermediaries in the context of the internet have turned on the communication right and the right of authorisation. He noted that the communication right was introduced very recently, to deal with the online environment, whereas authorisation is a concept that first emerged at the beginning of last century but which has been reinvigorated in the online context. He noted that passive hosts of online content were more likely to have authorised infringement, whereas online service providers that involved themselves in the act of making the content available online might also infringe the communication right. In relation to the right of communication, Justice Nicholas noted that:

  • In Australia, the fact that the copyright owner itself has made content available online does not defeat an allegation that an infringer has infringed the communication right; and
  • hyperlinking to content hosted on another website will not make that content available (although it might constitute authorisation) 
Justice Nicholas made the following observations about authorisation:
  • Depending on the circumstances, sanctioning, approving or countenancing acts of infringement may constitute authorisation. Indeed, inaction or indifferent may rise to the level of authorisation, if the intermediary has the power to prevent the infringement (although this will always involve a fact-specific enquiry).
  • Factors that are relevant to assessing authorisation have been codified into the Australian law (in particular, the court is required to consider whether the alleged authoriser has the power to prevent the infringement, the nature of the relationship between the alleged authoriser and the primary infringer, and whether the infringer took reasonable steps to prevent the infringement)
  • However, the court has wide latitude in determining whether authorisation has occurred, which can lead to uncertainty.
  • The mere provision of facilities will not constitute authorisation.
Justice Nicholas noted that in Australia, the safe harbour provisions are confined to carriage service providers (access providers). The Australian Government is considering whether to expand the scope of protection. 
Justice Nicholas observed that since 2015, it has been possible to obtain site blocking injunctions against access providers, where an online location which is hosted outside Australia (including a website) has the primary purpose of infringing or facilitating infringement. Since the legislation was introduced, there have been four cases. Rights holders seeking to avail themselves of these provisions may be required to pay compliance costs to the access providers.

Remy Chavannes noted that in the EU, there is an ongoing legislative process to update copyright directive to address infringing content on internet platforms, and an ongoing dialogue between the CJEU and the national courts in relation to the implementation of existing rules on intermediary liability, copyright, and intellectual property enforcement. As part of this dialogue, the CJEU has recognised that intellectual property rights are fundamental rights, but that there are other important fundamental rights. Where they collide, national legislators and the courts must achieve a fair balance. This involves considering three factors
  • the scope of exclusive rights,
  • the scope of exceptions and limitations and
  • the extent and method of enforcement.
The CJEU has rejected a proposal that infringing content should be filtered, on the basis that this solution breaches privacy, freedom of expression and freedom of enterprise. However, it has expressed the view that an order to block access to infringing services is potentially permissible, even if it is not 100% effective, provided appropriate safeguards are in place. 
Martin Hosking explained that his company, Redbubble, is a marketplace for user generated content, which makes $200 million in annual sales and hosts more than 11 million images from over 600,000 artists. Because of the nature of Redbubble’s business, it is on the leading edge of the law in relation to intermediary liability.

Mr Hosking expressed the view that Australia’s copyright law is outdated, and ill-equipped to deal with the reality of user generated content. He noted that the Australian Law Reform Commission and the Productivity Commission have both proposed the expansion of Australia’s safe harbour scheme to include more online service providers. He opined that in the absence of an expanded scheme, companies like Redbubble are exposed to expensive litigation, and that contributors and consumers are disadvantaged. 
He said that from an industry perspective, it was necessary to ensure that the laws were stable, and that an appropriate balance between the rights of industry and the rights of service providers is struck. In particular, the law should articulate clear requirements in relation to the takedown of infringing content and in relation to repeat infringers, and build in an expectation of continued infringement. He considered that such a system would be in the interests of all parties, because it would enable artists and contributors to gain distribution, provide mechanisms for easy redress for rights holders, give consumers access to user generated content, and ensure that innovative companies remained in Australia. He expressed the view that in the future, automated takedown procedures would facilitate rights enforcement."

Wednesday, 18 October 2017

BGH gifts shape mark owners sweet victories

lozenge shape mark at issue
The German Federal Court of Justice once again confirmed its reputation for being the most shape mark friendly court in Europe. In four decisions of 18 October 2017, it overturned four decisions by the Federal Patent Court invalidating shape marks. In all four cases, it was undisputed (before the BGH) that the shapes had acquired distinctiveness through use.

In the first cases, the shapes (depicted) were protected for dextrose lozenges (sold under the brand "Dextro Energy"). One shows an individual lozenge, the other a stack of them as they are being sold. The Federal Patent Court held that the shape was necessary to achieve a technical effect in the sense of §3(2)(2) Trade Mark Act (corresponding to article 4(1)(e)(ii) Trade Marks Directive (Recast), "signs that consist exclusively of the shape, or another characteristic, of goods which is necessary to obtain a technical result").

the second lozenge mark
The Bundesgerichtshof disagreed. While the square shape and the v-shaped groves have a technical effect, the bevelled edges and corners did not achieve a technical effect, but a "sensory effect when consumed" ("eine sensorische Wirkung beim Verbrauch"). This was not a technical effect in the sense of the law. Since the shape of the edges and corners were essential characteristics of the marks, the decisions of the Patent Court were overturned.

The other two cases concerned nearly identical shape marks for the packaging of chocolate bars (see image below left). The chocolate is sold under the brand "Ritter Sport". The Federal Patent Court had considered the shape of the packaging to result from the nature of the goods themselves (§ 3(2)(1) Trade Mark Act; corresponding to article 4(1)(e)(i) Trade Marks Directive).

chocolate packaging at issue
The trade mark proprietor appealed also based on the argument that the provision only applies to goods, not to their packaging, but the Federal Court of Justice did not even reach the issue: it considered that the square shape was not an essential characteristic of chocolate bars ("ist keine wesentliche Gebrauchseigenschaft von Schokolade"), annulled the lower court's decision and sent the cases back to the Federal Patent Court (presumably to assess whether there are other grounds for invalidity, namely "shape that is necessary to obtain a technical result", but the press release is not clear on this).

The above summary is based on the press releases nos. 162 and 163/2017 of the Court, the full grounds are not yet published. A detailed analysis of the reasoning is therefore not yet possible.

Standards, patents and competition law conference

The friends at Informa wish to let IPKat readers know that their annual conference on Standards, Patents and Competition law returns to London on 6 and 7 December to discuss the latest developments in law and litigation. 

In particular, the conference will tackle the changes facing standards, FRAND licensing, and the future of SEP in 5G and the Internet of Things.

Speakers include industry representatives and members of the judiciary alike.

There is a 20% discount for IPKat readers: those interested can use the VIP code FKW82763IPKE and register here.

New episode of copyright mini-series 'The Game is on!'

Keen IPKat readers will know that The IPKat was born out of a wish to support and emulate the teaching and learning of intellectual property law, including copyright law. Week in week out, its team of Kats continue in their mission through their writing and celebrate the initiatives of others who do the same. In this spirit, this post brings your attention to the mini-series of short animated films The Game is On! written and directed by Ronan Deazley and Bartolomeo Meletti, available on the

The aim of their game? Teaching the vagaries and intricacies of copyright law to school-aged children using animated films accompanied by ‘case files’ each dedicated to a different principle of copyright law to support teachers on this journey. The ‘Game is On!’ is *not* a 'pro' copyright propaganda campaign. Rather it aims to create a forum to discuss and challenge the rules provided by UK copyright law in an accessible manner.

Last week, ‘The Game is On!’ released the third episode of the series in which Sherlock Holmes and John Watson are interrogated on their latest investigation into the disappearance of a film star. The plot of this new episode invites the viewers to discover the application of copyright law to films, focusing on documentaries, interviews, co-authorship, and performers to only name a few.  This Kat was delighted to contribute to the case files.

The ‘Game is on!’ will be useful to school teachers but also (and not least!) to all readers whose relatives and family members of all ages remain slightly puzzled by your passion for copyright. This series of animated films offers a playful and stimulating introduction to the discipline – and comes highly recommended for it! 

AIPPI Congress Report 8: Innovator v Innovator - injunctions

Innovator v Innovator - does this matter where
 injunctions are concerned? The AmeriKat is not
so convinced....
The wonderful AusKat Clare Cunliffe continues her reports from AIPPI's World Congress in Sydney with news from the second pharmaceutical patent session, Injunctions: Innovator vs Innovator, the panel discussed the relief that is appropriate in cases when innovators compete in the same field and infringement is found.

The panel was chaired by S. Peter Ludwig of Fish & Richardson. The panel members were Mattias Zigann, the presiding judge of the Munich Regional Court,
Philip Kerr of Allens Linklaters and Larry Welch, the Senior Director, and Assistant General Patent Counsel at Eli Lilly and Company.

Mr Ludwig explained that the question of what relief was appropriate had been highlighted by the very recent decision of the United States Court of Appeals for the Federal Circuit in AMGEN INC & ors v. SANOFI, AVENTISUB LLC & ors.  In the case at first instance, Sanofi and Regeneron had accepted that alirocumab (Praluent)  infringed the patent in suit, subject to issues of validity.  Judge Robinson had concluded that the patent was valid, and applied the test articulated in eBay Inc. v. MercExchange, L.L.C.547 U.S. 388 (2006), which requires a plaintiff to demonstrate:

(1) that it has suffered an irreparable injury;
(2) that remedies available at law are inadequate to compensate for that injury;
(3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.

Judge Robinson observed in relation to the fourth consideration that: “The public generally is better served by having a choice of available treatments. Therefore, the court finds itself between a rock and a hard place, i.e., being a patent holder and a verdict winner should be a meaningful factor in the balancing test, but taking an independently developed, helpful drug off the market does not benefit the public.”  However, she granted a permanent injunction on the basis that plaintiffs had demonstrated irreparable harm, as well as the inadequacy of money damages.

On appeal, the Federal Circuit ruled that the trial court erred by excluding evidence regarding written description; excluding evidence on enablement; improperly instructing the jury on written description, and improperly granting a permanent injunction, and remitted the matter to the judge for reconsideration.  In relation to the last point, the Court noted that the trial judge clearly violated eBay by issuing a permanent injunction despite finding that the injunction would disserve the public interest. The Court of Appeal also noted that the trial judge erred in assessing the public interest, because eliminating a choice of drugs is not, by itself, sufficient to disserve the public interest (since enjoining a drug would always reduce a choice of drugs).

Judge Zigann noted that in Germany, the questions of validity and infringement are bifurcated, but that a judge considering whether to grant a preliminary injunction will either consider validity on the basis of the documents (in Munich), or will consider whether the patent has been tested in opposition proceedings or nullity proceedings (in Dusseldorf).  The judge will also consider whether there is a prima facie case of infringement and whether the matter is urgent (generally, proceedings must be commenced within one month to eight weeks after the patentee becomes aware of the infringement).  The court may also impose a bond.

Mr Kerr explained that the position is similar in Australia (although proceedings are not bifurcated).  In the context of a preliminary or interlocutory injunction, where a patentee has made out an arguable case on validity and the alleged infringer has made an arguable case on validity, the court will look at whether damages would be an adequate remedy (this requirement is usually easy to satisfy in the pharmaceutical context because the operation of the Australian Pharmaceutical Benefits Scheme means that price of an innovator product will usually drop dramatically following the entry of a generic) and whether the balance of convenience favours the grant of an injunction.  Mr Kerr observed that Australian Courts had not given significant weight to the question of public interest in recent cases.  Mr Kerr noted that when a patentee succeeded at trial, permanent injunctions were granted almost as a matter of course.

Mr Welch noted that because so much patent litigation in the US occurs under the Hatch-Waxman Act (before the generic product has entered the market), the issue of preliminary injunctions does not often arise.  However, he noted that the question is likely to be more relevant in the context where an innovative product was alleged to be infringing.  In the context of preliminary injunctions, the Curt will consider the eBay factors, and will also consider whether the patentee is likely to succeed on the merits.  He noted that the decision of the Court of Appeal in Amgen leaves open the question of whether the value of an infringing innovator drug might be such that no injunction should be granted.

Judge Zigann observed that in considering whether to grant an injunction, it is necessary to consider the circumstances of the parties as well as public policy.  However, it is desirable for the legislature to define public interest, and to set out factors which are relevant to assessing public interest.  He noted that the recent litigation between Shionogi v Merck (in which the German Federal Court of Justice confirmed the decision of the Federal Patent Court granting Merck a compulsory license to EP 1 422 218 owned by Shionogi) demonstrated the circumstances where the public interest would support the grant of a compulsory license.  In that case, Merck obtained a licence to distribute Isentress for the treatment of specific patient groups that could not be treated with other drugs without serious side effects, in light of the fact that HIV infections are infectious and lethal.

Mr Kerr concluded that he did not consider that any special circumstances applied to innovator products which would justify that a different approach should be taken to the issue of injunctive relief. He noted that in Australia, as in Germany, it was possible to apply for a compulsory licence, but that he was not aware of any case which had been decided by a court where an alleged infringer had applied for a compulsory licence in answer to an infringement allegation.

Mr Welch also opposed the proposition that a different approach should be taken to innovator drugs.  He said that as the Court of Appeal explained in Amgen, if the innovator was infringing was simply providing another choice, the public interest would not be served by granting an injunction.  In any case, denying an injunction was tantamount to granting a compulsory license.  Given that the right to exclude others from the area of monopoly is fundamental to the nature of the patent grant, any approach which denied injunctive relief where the infringing drugs was innovative tended to undermine the nature of the monopoly.

Judge Zigann observed that although access to affordable medicines was an important public policy objective, there were multiple ways to achieve that objective, including the provision of public health care, and fixing the price of pharmaceuticals. Ultimately, he reiterated that it was for the Parliament to determine how to achieve this objective.   Mr Kerr agreed that it was for Parliament to determine the best regime to deliver more affordable drugs to the public where cost of innovation is high.  Larry Welch observed that the question of access to medicines could be resolved without impinging upon the rights and incentives of pharmaceutical patentees, and that it was desirable to find other ways to provide access.

Mr Ludwig observed that pharmaceutical companies make significant investments in research and development on the basis that patents are available to protect that investments.  He suggested that since that investment is necessary to produce pharmaceutical products, there was also a public interest in protecting the patentee’s rights. Mr Welch agreed, observing that a refusal to grant injunctions would mean that the incentives for patentees would be reduced.  Judge Zigann agreed that there were ways to protect the public interest which did not require impinging on patent rights.

The speakers concluded that where a valid patent was infringed by an innovative product, the patentee should be entitled to the same remedies as would apply in the case of infringement by a generic product.

AIPPI Congress Report 7: Medical devices and patents

Come near the AmeriKat with a medical device and
this is the look you will encounter
Warwick Rothnie was back in AIPPI's Pharma Day sessions to report on the proceedings for the IPKat's readers.  Next up was what can be a complex matrix of medical device regulation.  Warwick reports:  
"Hector Chagoya Becerill (moderator) noted that there is a trend developing, particularly over the last two years, for patent applications for medical devices, especially for devices introducing active ingredients into the human body. 
Michelle Pratt agreed that there were increasing number of filings in medical technology, particularly for apparatuses and apparatuses plus drugs. This meant pharma companies are facing challenges about drafting claims and portfolio planning issues including issues for second and subsequent medical uses. Patents are also being sought in relation to 3D printing such as for organs and other body parts. 
Derek Minihane said the combined global devices market had gone from $60 billion to over $130 billion in a very few timeframe. Cochlear is testing embedding steroids in the electrodes of its devices and other companies are exploring other enhancements including using electrical stimulation to promote growth of the ganglia to connect directly with the electrode. 
John Todaro identified issues with indefiniteness (US) or clarity. Until 2014, this was a fairly low threshold under US law. In 2014, however, a US Supreme Court decision radically changed this standard. Thus, in one recent case, the term “molecular weight” was ruled ambiguous and so the patent was invalid. As a result, Merck now included a specific check list item when drafting medical device patents to confirm that terms were clearly defined.

Also, the standard of obviousness appears to be different and higher for medical device patents than the standard applicable for new drug compounds. 
The busy Dominic Adair returned to explore issues relating to wearable devices; not just Fitbits and the like, but hearing aids and pain adjustment technology. With such devices, the device provider may be storing the patient’s private data. One issue is the need to share the data with medical staff treating the patient. Another issue is the risk of hackers gaining unauthorised access to the data. In Europe, there will be stringent new privacy regulations coming into force next year. These will impose obligations for training, reporting breaches and security protections will need to be built into the device. The penalties for breach will be significantly increased, up to 4% of turnover. These rules will affect anyone with customers in the EU. 
Michelle Pratt noted that European law precluded patents for methods of using a device given the exclusion on surgical or therapeutic methods. However, the EPO is developing limited rules to enabling some patents for the use of devices containing active ingredients.

Derek Minihane noted one of the challenges is the broad range of technology Cochlear is dealing with. This could include algorithms, biology and many other technical fields. Cochlear had identified seven key tech streams which were its key points of focus across the spectrum. This meant that the attorneys Cochlear works with also need to have, or have available, multi-disciplinary skills. 
Dominic Adair reported that the EU has adopted two new Regulations to replace three previous directives: the Medical Device Regulation and the In-vitro Diagnostic Medical Devices Regulation. The first coming into effect in May 2020 and the second in May 2022. The Medical Device Regulation will apply to apparatus and drug combinations where the apparatus is the main element. If the drug is the main element, the product will be classified as a medical product. 
The scope of these Regulations is much broader than the previous directives. For example a range of cosmetic products would be covered for the first time. He described many other detailed changes which will require careful consideration and action. This will mean that companies will need much stronger internal management and external advice. 
Derek Minihane outlined US administrative practices. One point is that regulatory submissions to the FDA need to be carefully utilised to ensure that patent applications are consistent with the regulatory application. In particular, the pre-RFD process should be used to identify how the device will be characterised. 
Dominic Adair noted that a medicinal product would have an eight year data exclusivity period, followed by two years of marketing exclusivity with the possibility of an additional one year. There is no regulatory data exclusivity for a medical device. Under the new Regulation, however, it will be necessary to get the original developer’s consent to access and use the relevant data. In this respect, therefore, originators will be better protected. They will have to do much more work before they get regulatory approval however. 
John Todaro said that compounds could get up to five years’ data exclusivity in the USA. What exclusivity may be available for devices would depend on the classification. Class 1 devices do not get data exclusivity. Class 2 products, for “substantially equivalent products”, get a much quicker review time - 90 days, but must identify the nearest competitive product. This can expose the party to greater risks of early infringement action. Class 3 products involve a longer review time - 180 days. Derek Minihane noted it was good practice to get pre-filing approval before testing. In Europe, even class 3 type products typically obtained only 2 - 4 months review. 
Michelle Pratt discussed patent term extensions (SPC) and medical devices. Extension of term is available only for products where the pharmacologically active agent(s) are the principal feature. It appears that whether an SPC is available for a medical device will vary from country to country. The Netherlands and Germany seem likely to allow; so far the UK has not granted such an extension. It is understood a German court has made a preliminary reference on the question to the CJEU. John Todaro considered it would be likely that device for administering a drug, a method of use, could potentially be listed in the Orange Book. Careful thought should be given whether or not to do this. He considered it would probably not be possible to list devices alone which did not recite a specific therapeutic agent."

AIPPI Congress Report 6: The business of IP – venturing with IP

The IPKat's view of venturing extends as far as the bottom
of his lawn
The AmeriKat has just flown from Sydney to Washington D.C. for the ChIPs Annual Global Summit.  After a mere four days down under she has no idea what time zone her body is on and if her brain will ever catch up.  What she does know is that AusKat James Ellsmore has prepared a report from the IP ventures panel at this year's AIPPI Congress where speakers examined the role and importance of IP as an intangible asset for raising capital and driving innovation.  James reports:
"The fundamental message of the first two panelists was that attorneys and lawyers advising businesses and investors have a duty to educate those businesses and investors about both the intangible value of intellectual property rights, and the legal frameworks within which businesses and investors want to do business.  The third panellist's presentation also challenged those advising businesses and investors on IP strategy to think differently about the value IP has within a business.  The third panelist's fundamental message was that venturing with IP should not be thought of as limited to simply ring fencing and then monetising IP assets.  Instead, businesses should be thinking more broadly about non-traditional ways to venture with their IP assets in ways that align with the broader strategy of the enterprise.  
The first speaker on the panel was David Postolski, a US patent and IP attorney and partner of Gearhart Law.  David, who works with start-ups, entrepreneurs and incubators and accelerators, gave an overview of how and why the economics of innovation are changing in the US and abroad.  David explained that IP assets, particularly patents and trade marks, are being pledged as collateral for secured financing at all stages of the innovation cycle.  David’s key message to attendees was one of education.  David explained that as attorneys and lawyers, attendees must educate businesses and investors on the importance and value of their IP.  Hand-in-hand with the need for education, David’s presentation also highlighted the need for international harmonisation of IP laws and why harmonisation would particularly assist start-ups and entrepreneurs to navigate the different IP systems of each country and secure funding at earlier stages of the investment lifecycle.
Echoing David’s key message of education, the panel’s second speaker – Tim Heberden, Director of IP Economics at Glasshouse Advisory – also spoke of the need to articulate the value of IP as an intangible asset in the course of his presentation on IP valuation practices and standards.  Tim emphasised that investors are often not IP savvy and that it is incumbent on practitioners to articulate the commercial strength and value of a business’ IP.  Tim explained that this educational piece is a complex one – whilst IP valuation is not a ‘dark art’, not all intangible assets are equal and critical analysis requiring multi-disciplinary inputs is required to develop a robust view of the value of a business’ IP assets.
 The panel’s final speaker, Jane Perrier took the discussion in a new direction by articulating the value of IP as an intangible to reach a strategic, as opposed to a monetary, outcome.  Jane is Special Counsel, Technology, Innovation and IP for Telstra (Australia’s leading telecommunications and technology company), and in this instance, Jane spoke passionately of Telstra’s efforts to align IP strategy with business strategy and to explore new IP ventures as a means of demonstrating enterprise innovation and supporting Telstra’s strategic innovation goals.  Jane explained that traditionally, a business would wish to ring fence and then monetise its rights.  Jane spoke of the need to consider non-traditional approaches to exploiting IP and explained that sometimes it might not be in the business’ interest to take the more familiar, traditional approach.  Jane reiterated that it is critical that IP strategy align with business strategy and that at the end of the day, IP strategy should support business outcomes.  Jane articulated why this can be of great value to an enterprise like Telstra despite the fact that such non-traditional ventures may not provide any direct monetary value to the business. In the end, regardless of whether one wishes to monetise IP assets or instead wishes to look at non-traditional ways to exploit those assets, it is a case of ‘nothing ventured, nothing gained’."

Tuesday, 17 October 2017

Book Review: EU Intellectual Property Law and Policy

The second edition of Catherine Seville's EU Intellectual Property Law and Policy promises an updated account of key topics and considerations of the EU's law and policy in the digital realm. Part of the Elgar European Law series, the book covers EU IP law and policy in a "compact and accessible" manner.

The book devotes separate sections to the main areas of EU IP law: copyright, patents, designs and trade marks (in addition to their related rights). Two further sections address IP, free movement & competition, and the enforcement of IP. The text is full of relevant European-level cases, and considers some national cases, in addition to including the texts of key legislations. The only area that does not appear to be addressed in depth is that of trade secrets, which is not surprising given how the topic is relatively new.  Brexit is beautifully beyond the book.

Seville's approach is methodical and accessible. For complete novices, chapters include short sections such as "What is a patent? A brief outline." A bit further on, and the more advanced reader will gain from Seville's insights into the Doha declaration negotiations. Cases are liberally cited. For example, Seville describes how the 2013 Georgetown University v. Octrooicentrum Nederlam (ECLI:EU:2013:828) case confirmed that several SPCs are not precluded in the case where a basic patent protects more than one product (go Hoyas!).

EU IP Law and Policy is a comprehensive book which can be read as a whole, in parts, or used as a reference. It will be particularly useful for students and legal practitioners seeking a concise analysis of key parts of EU law.  On a sad note, this volume was published posthumously. You can read more about the work and IP life of Dr. Seville here.

EU Intellectual Property Law and Policy: Second Edition (2016) is published by Edward Elgar. IBSN: 9781781003459. The book can be purchased in hardback for £108. Rupture factor: Medium-high, a respectable 592 pages.

Monday, 16 October 2017

From Alicante to Munich - the EPO appoints its new President

The EPO has announced that Antonio Campinos has been elected as its new President. His appointment will be for a five-year term starting on 1 July 2018. 

Mr. Campinos, a Portuguese national, is currently Executive Director of the European Union Intellectual Property Office (EUIPO). He is also a former President of the Portuguese Institute of Industrial Property (INPI). In his welcome to his successor, current President of the EPO Benoît Battistelli hailed the appointment of Mr. Campinos as "a victory for Europe in its diversity", being the first time a national from the South of Europe has been appointed the head of the EPO.

In his role at the EUIPO, formerly known as OHIM, Mr. Campinos presided over the expansion of the office's facilities and the introduction of management and organizational changes.

Mr. Campinos has a degree in Law from the University of Montpellier, a postgraduate degree in European Studies from the University of Nancy, and a Masters' degree in Public Law from the University of Montpellier.  He worked for the Portuguese Ministry of Economy and Innovation before becoming Director of Trademarks at the INPI in 2000. He has been Chairman of the Board of Directors at the University of Strasbourg Centre for Intellectual Property Studies (CEIPI) since 2013.

Merpel welcomes Mr. Campinos to the exciting world of European Patents.  

Another German decision questions reasonableness of GS Media presumption if generally applied

A few weeks ago this blog reported on the judgment of the German Federal Court of Justice which decided that the presumption of knowledge envisaged by the Court of Justice of the European Union (CJEU) in GS Media [Katposts here] for for-profit link providers would not be applicable to search engines due to their importance to the functioning of the internet.

I have been made aware that this decision is not an isolated instance, and a similar line of reasoning can be found also in another recent German judgment, ie the one of the Regional Court of Hamburg issued earlier this year (308 O 151/17). Also this ruling shows a certain disagreement with recent CJEU case law on the right of communication to the public, including in the linking context, and warns against the dangers of intending the GS Media presumption of knowledge in too a broad sense.


The decision orginated in the context of proceedings brought against the operator of a product search engine which lists furniture and home accessories for sale. The results are obtained by aggregating the listings of over 200 online shops. Further to a certain search, the defendant’s site displays results which consists of photographs (stored on third-party sites) of relevant products and links to the various listings.

The claimant operates an internet site on which it offers photos and products displayed by photos depicting a pug dog named Loulou, including the photograph below (to which it owns the copyright):
Use of the photograph above is licensed to third parties. One day, the claimant found out that the defendant's website displayed among the various results also a listing for a cushion (available for sale on Amazon) that reproduced - without its permission - the Loulou photograph above:
The claimant submitted that, by displaying this result, the defendant made an unauthorised act of communication to the public pursuant to §§ 15(2) UrhG and 19a UrhG

Being a for-profit undertaking, according to the claimant, the defendant had an obligation to ensure that the links displayed through its search engine would be to lawful content.

The decision

The Hamburg court dismissed the action, holding that the simple linking of a work hosted on a third-party site by way of 'framing' does not constitute an act of making available to the public within §19a UrhG. Referring to the decisions in Die Realität I and II, according to the court this is so because it is the operator of the third-party site that decides on the making available of the work at issue. 

Accordingly, the only provision that might come into consideration is the 'unnamed' right of communication to the public within §15(2) UrhG. To determine whether that would be actually the case, the court deemed it necessary to review relevant CJEU case law on Article 3(1) of the InfoSoc Directive.

The Hamburg court recalled the requirements of (1) an act of communication (2) directed to a public, as well as the other interdependent criteria employed by the CJEU and the 'indispensable intervention' of the user. The court then focused on the GS Media presumption of knowledge for link providers that act with a profit-making intention.

The court excluded that there would be a communication to the public in the case at issue. Although the requirement of the 'new public' was met, the act at issue would not take place with the indispensable intervention of the defendant, ie - as the CJEU held in Filmspeler [here] - an intervention made “with full knowledge of the consequences” of such conduct. 

According to the Hamburg court, the defendant in this case - although operating for a profit - had neither positive knowledge of the unlawfulness of the offer displayed through its search engine, nor could it have acquired knowledge of the offer’s unlawfulness in a reasonable way. The court also noted that a platform like Amazon is not usually associated with unlawful listings.

The links displayed were created through a completely automated process and the relevant offers were not subject to any editing or other manual control. This means that it cannot be assumed that the defendant had knowledge that the offer at issue incorporated content that would infringe the claimant's rights. 

In addition, upon becoming aware of the unlawfulness of the listing, the defendant promptly removed it. 

According to the court, considering that the defendant's databank contains 50 million offers, it would be unreasonable to expect that every single link is checked beforehand. In the event of (several) completely automated processes it cannot be expected that the GS Media presumption operates in relation to each and every link. Referring to the Opinion of Advocate General Szpunar in Ziggo [here], the Hamburg court held that holding otherwise would extend liability to every imaginable far-removed contribution due to negligible lack of knowledge and, therefore, on the basis of merely fictitious intention. 

The court added that any different interpretation would also result in an undue compression of one's own freedom to conduct a business, as per Article 16 of the Charter of Fundamental Rights of the European Union.

As to whether things would change in the event that the link provider adopts third-party content as its own (which in any case was not what happened here), the court stated that this remains uncertain at the EU level. 


The decision of the Hamburg court, similarly to the one of the Federal Court of Justice, warns against an overly broad understanding of both communication to the public and the obligations imposed on link providers that operate for profit, especially if these handle a high number of links. 

Some aspects of the CJEU judgments discussed by the German courts are ambiguous and in need of further clarification. One might wonder whether national courts are best placed to carry out such an explanatory task or whether, instead, clarification at the CJEU level might be a better option to avoid inconsistent applications of relevant judgments by national courts.

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