The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Friday, 20 April 2018

Fordham 2018 Report 1: Building Out the House - Music Licensing

The AmeriKat has had her paws pretty full of late with trials, events, conferences and general life.  So this year, she was not able to report on the ever incredible sessions from the Fordham IP Conference in New York.  But knowing this, she roped in some wonderful law students and interns at Fordham University who stepped up to the plate.  So over to J.D candidate (Class of 2019), Jacob Tesch, for the first report from the conference on the Music Licensing session: 

"During Thursday afternoon’s session Music Licensing, Termination & Territoriality: Time for Recalibration?, moderator N. Cameron Russell (Center for Law & Information Policy, Fordham Law School) likened the legal developments in U.S. music licensing to building additions to a house. Instead of bulldozing years-old foundation, Congress has, over the years, passed several pieces of legislation to keep up with changes in the ways people both create and consume music.  
Following Russell’s opening remarks, Kenneth Steinthal (King & Spaulding LLP) spoke on issues concerning Performing Rights Organizations (“PROs”) ability to license public performance rights, as well as the Copyright Royalty Board’s the latest update in mechanical licensing rates under Section 115 of the Copyright Act. Steinthal first summarized the Second Circuit’s recent decision in which the court affirmed the determination that the consent decrees governing PROs, such as ASCAP and BMI, permit “fractional” licensing of works—thereby allowing BMI to license works that it or its affiliated writers or publishers lack full control of. According to Steinthal, BMI’s ability to fractionally license could have severe consequences for licensees because they now cannot be certain that their public performance license was approved by all rights holders. This decision, coupled with the lack of a credible database indicating who holds the public performance right of a given work, could result in increased infringement litigation against streaming services by those non-consenting copyright holders. It will be interesting to see if the Department of Justice takes on the Second Circuit’s decision by arguing that this interpretation of the PROs’ consent decrees violates U.S. antitrust law. Steinthal closed his speech by opining that the royalties structure established by the Copyright Royalty Board in January 2018 raises concerns for streaming services.

The panel then debated the impact of these developments on the marketplace for mechanical and public performing licensing of musical works. Many of the panelists disagreed with the extent of Steinthal’s notion that the Second Circuit’s decision could be the downfall of several streaming services and cited Spotify’s recent multi-billion-dollar valuation as evidence of streaming services’ financial ability to fight infringement lawsuits. Steinthal defended his position by stating that we are particularly attuned to larger streaming services because they are frequently in the news and, absent a compulsory licensing regime for sound recordings, the Second Circuit’s decision could be fatal to many smaller streaming services found to owe exorbitant statutory damages for infringement. Richard Pfohl (CONNECT Music Licensing), in agreement that a blanket compulsory licensing system for sound recordings would be an efficient solution, suggested that leaving this issue to the marketplace partially help solve this problem. Moreover, all of the panelists agreed that the lack of transparency with respect to who owns the public performance right of a given work is a major problem in the music industry that needs to be resolved.

Next, Regan Smith (U.S. Copyright Office) provided an overview of the concerns targeted by three potential copyright reforms: the Music Modernization Act, the Classics Act, and the Allocation for Music Producers (“AMP”) Act. The Music Modernization Act, as its name suggests, attempts to modernize the current licensing regime under 17 U.S.C. §115 by creating a blanket licensing arrangement for digital phonograph deliveries. The Act establishes a music licensing collective (“MLC”), overseen largely by publishers and songwriters to collect and distribute mechanical royalties for musical compositions. The formation of the MLC aims to assuage the challenges digital services face when attempting to match songwriters and publishers with recordings and create a more transparent and efficient system for compensating authors. Furthermore, the Music Modernization Act would repeal Section 114(i) of the Copyright Act and give PROs and songwriters the opportunity to present evidence in rate-setting proceedings to a rotating “wheel” of judges who would consider licensing fees by applying a “willing buyer willing seller” standard.

The CLASSICS Act grants owners of pre-1972 sound recordings the exclusive right to digitally broadcast said recordings, which due to an arbitrary quirk in U.S. copyright law, do not enjoy the same federal protections as post-1972 sound recordings. While these recordings will continue to be freely broadcast over terrestrial radio, the CLASSICS Act attempts to alleviate what has been considered by one recording artist a form of “digital ageism.” The AMP Act will amend federal copyright law by codifying SoundExchange’s “Letter of Direction” practice to directly pay producers, mixers, or sound record engineers from a featured artist’s or label’s statutory scheme, if directed to do so. The bill provides for 2% of the featured artist’s share of royalties to be directly paid to a pre-November 1, 1995, producer, mixer, or sound engineer absent a letter of direction or an objection by the artist.

The entire panel agreed that these three bills, which have been received by both the House of Representatives and Senate, are sensible pieces of legislation. Jacqueline Charlesworth (Covington & Burling LLP) noted that the publicly available ownership database created by the MLC would be extremely beneficial for recording artists, music publishers, and songwriters because it would help solve the music industry’s transparency problem. Still, Steinthal expressed skepticism that these proposed bills would resolve the statutory damages problem that entrenches the current statutory scheme.

Joshua Graubart (The Law Offices of Joshua Graubart, P.C.) reviewed the UK High Court decision from Mr Justice Arnold in Gloucester Place Music v. Le Bon, in which the British rock group Duran Duran sought to terminate the transfer to their music publisher, Gloucester Place, which alleged such action constituted breach of contract. Under Section 203 of the U.S. Copyright Act, the author may terminate a grant at the end of 35 years from the date of execution or publication of the work. Mr Justice Arnold of held that English contract law was controlling and that service of a notice of termination under the U.S. Copyright Act would result in a breach of the band’s music publishing agreement. Lauri Rechardt (IFPI) commented that this decision demonstrates that our global music industry is in need of stronger and more transparent rights to underpin the global marketplace for music.

The overarching theme that drove most of the panel’s conversation was that our global music industry faces a transparency problem. It will be fascinating to see if the three proposed bills, which are scheduled to begin the House Judiciary markup process on April 11, can overcome a problem that has negative consequences for songwriters, music publishers, and digital streaming services."

Public interest in Plant Variety Rights. How high is the bar for the grant of a compulsory license?

IPkat has previously reported on the background and contents of the first compulsory license application. Now, as  we finally have the decision itself (Decision nr NCL 001, of the 16th of March 2018), there are a number of interesting points to discuss.


Background of the case

On 12 October 2009, Smith Kline Beecham Limited ( “GSK” ) filed a Community plant
variety right (CPVR) application No 2009/1980 for the variety ‘Ben Starav’ of the species Ribes nigrum L.. By Decision No (EU) 35825 of 8 July 2013, the Office granted a CPVR. By request of 18 November 2014, GSKasked the Office to effect the recordal of the transfer of rights to Lucozade Ribena Suntory Limited( “LRS”).  

On 16 March 2017, the Office received an application for a compulsory licence by Pixley Berries (Juice) Limited ( “the applicant”) pursuant to Article 29 of Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights (Basic Regulation) (the Council Regulation (EC) No 2100/94 of 27 July 1994),.

Public Interest

Article 29(1) of the Basic Regulation provides that a compulsory licence shall only be granted on the ground ofthe public interest. Article 41(2) of the Proceedings Regulation (of Commission Regulation (EC) No 874/2009 of 17.9.2009.) further provides three circumstances  that may, in particular, constitute a public interest:
a) The protection of life or health of humans, animals and plants;
b) The need to supply the market with material offering specific features;
c) The need to maintain the incentive for continued breeding of improved varieties.

The CPVO clarifies in its decision that it is the applicant that has the burden of proof regarding whether there is a public interest, and thus clarifies that the CPVO will not proceed with an independent investigation, but will  base its decision solely  on the facts and arguments raised by the parties to the proceedings.

The protection of life or health of humans, animals and plants (Article 41(2)(a) of the
Proceedings Regulation)

The applicant claimed that there is a public interest  based on the benefit that ‘Ben Starav’ provides to the public health when used for the production of 100% juices, as the consumption of said juices is associated with a healthy lifestyle. Second, due to the climate change, it would be in the public interest to use a variety that adapts well to different climatic conditions, as it is the case for ‘Ben Starav’.

According to the CPVO, the applicant  failed to show the specific benefits provided by ‘Ben Starav’ to public health. The general statement provided by the applicant is not enough (“healthy lifestyle”), since it fails to prove that “Ben Starav” presents better characteristics than other blackcurrants. Furthermore the use of the concept “healthy lifestyle” was considered by the CPVO to be too generic, since it refers to a general way of life covering, for instance, everything from a balance between work and private life to stress control and personal hygiene, rather than pointing to the specific nutritional characteristics of the particular  plant variety.

Furthermore, the applicant’s argument that “Ben Starav”, adapts well to climatic zones, and thus also guarantees good harvests throughout different seasons, does not provide any concrete evidence of a public interest.

The need to supply the market with material offering specific features (Article 41(2)(b) of the Proceedings Regulation)

The next step in the evaluation of the CPVO consists of determining whether the characteristics that are of importance from a public interest perspective are unique for the specific plant variety. The applicant claimed that ‘Ben Starav’ has unique characteristics, which make it unlike any other blackcurrant varieties, namely i) a consistent high yield of good quality fruit, ii) harvest season not in conflict with other cultivars , iii) even ripening at harvest, iv) even bud-break across a range of winters , v) good juice quality from an organoleptic point of view, vi) good compositional analysis and vii) excellent colour .

The CPVO concluded, however, that the evidence provided by the parties is clear in that the alleged characteristics of “Ben Starav” are not unique to the specific plant variety.   As such, the CPVO ruled that the alleged unique characteristics of the variety “Ben Starav” do not fulfil the requirement of Article 41 (2) of the Proceedings Regulation  since these features are also offered by other varieties of blackcurrant.

On the need to supply the market with material from ‘Ben Starav’
The applicant claimed in brief that there is a need to supply the market. Taking into consideration that it has been shown that there are a number of available blackcurrant varieties, and that the characteristics of importance from a public interest perspective are shared by several other varieties of blackcurrant, the CPVO  concluded  that there is no need to supply the market with “Ben Starav”.

On the public funding of the variety ‘Ben Starav’
Worthy of discussion is  the fact that “Ben Starav” is the result of a partly state-funded breeding program. LRS answered  that this fact  does not in itself mean that a third party may exploit the research results by means of a compulsory license.  The question thus posed to the CPVO was whether state funding could have an impact on the grant of a compulsory license. In other words, can partial public funding of the “Ben Starav” breeding programme  constitute a  public interest sufficient  to justify the grant of a compulsory license?

The CPVO concluded that this is not necessarily the case. A state authority may choose to invest in a breeding programme for reasons of public interest but at some point needs to determine whether to claim the legal rights on the variety or to allow a private entity to protect and own the plant variety protection, as in this case. When such a decision is reached, the public (e.g., consumers and competitors) may not then raise any claim to the variety in question. Thus, granting a compulsory licensing should abide by the same rules irrespective of whether the breeding programme leading to the variety was 100% private or 100% state funded.

Interest of the case 
An important question that the CPVO answered is whether alternatives to the variety are an important part of the evaluation whether to  grant a compulsory license. The CPVO concluded  that although the determination of the existence of alternatives belongs  to competition law (theory of essential facilities), it is  also important for the determination of whether the requirements for the grant of a compulsory license are fulfilled.

 In fact, where alternatives exist, the need to supply the market with the specific plant variety becomes much more difficult to prove.  In support of this argument, the CPVO points to the ruling of the German Federal Court of Justice ruling of 11 July 2017 regarding a patent on the antiviral agent “Raltegravir”. There, the Court stated that “a compulsory licence cannot be granted if the public interest can be satisfied with other, essentially equivalent alternatives”. It is  interesting how the CPVO chose to seek guidance  by reference to  parallels between patents and intellectual property rights. Moreover, this decision  points to  the growing importance of competition law principles in the application and interpretation of intellectual property law provisions.



Thursday, 19 April 2018

BREAKING: German FCJ declares AdBlock Plus legal


Germany’s Federal Court of Justice has today decided in a year-long dispute between the German news publisher Axel-Springer-Verlag and Eyeo, the Cologne-based company behind AdBlock Plus.


AdBlock Plus is a browser-addon that blocks banners, pop-ups and other ads. Eyeo claims it is being used on more than 100 Mio. devices around the world. Unwanted ads are listed in a ‘blacklist’ and automatically hidden from every website a user visits. However, Eyeo provides advertisers the opportunity to have their ads added to a ‘whitelist’, if they comply with certain standards that are set by Eyeo. Additionally, advertisers need to pay Eyeo to have their ads added to the whitelist. Once on the whitelist, ads will be shown to users even if they have AdBlock Plus installed.

Axel-Springer-Verlag took offence at this business model and took Eyeo to court in 2014, essentially requesting a ban of the software on the grounds of competition law. The Regional Court of Cologne dismissed the claim, Axel Springer appealed. Upon appeal, the Higher Regional Court of Cologne partially reversed the first instance decision and agreed with Axel Spinger that by requesting advertisers to pay in order to have their ads added to the whitelist, Eyeo displayed forbidden ‘aggressive commercial practices’.

Such practices are deemed illegal by Section 4a UWG, the German Act against unfair competition. Section 4a UWG reads:

“Unfairness shall have occurred where a person engages in an aggressive commercial practice which is suited to causing the consumer or other market participant to take a transactional decision which he would not have taken otherwise. A commercial practice shall be regarded as aggressive where, in the factual context and taking account of all its features and circumstances, it is suited to significantly impairing the consumer’s or other market participant’s freedom of choice by

1.  harassment,

2.  coercion, including the use of physical force, or

3.  undue influence.”

The Higher Regional Court found that Eyeo’s business model could be seen as an ‘undue influence’ in the sense of the law. The judges saw a large market power of Eyeo due to the sheer number of AdBlock Plus users. Advertisers would be excluded from access to customers and had to buy their way out of this situation. 

Eyeo took the case to the FCJ, which today ruled in the defendant’s favor (case No. I ZR 154/16). So far, only a press release is available and it usually takes several months before the written reasons are published. From the press release, it is clear that the judges saw no acts of unfair competition by Eyeo. They found that the provision of an ad-blocker does not constitute a deliberate obstruction of competitors (Section 4 UWG). The judges also denied a deliberate interference with the plaintiff’s business. According to the FCJ, it remains the end-users’ decision whether they install and use and ad-blocker. Because of this autonomous decision of the users, any interference would only be ‘indirect’. An indirect interference could not be considered unfair, the court found.

Finally, the FCJ disagreed with the Higher Regional Court regarding ‘aggressive commercial practices’ by Eyeo. The judges stated that AdBlock Plus was not suited to significantly impair market participant’s freedom of choice, especially with regards to the plaintiff, who is not a consumer but a large news publisher. The details of this argument remain to be seen once the written reasons become available.


*UPDATE*: for the first time ever in Germany, it was allowed to film during the oral proclamation of a judgment. You can view the proclamation in full here.

Boards bite back but need real teeth - Guest Contribution

The EPO is not this GuestKat's natural habitat, and so she was glad to be reminded of the consultation on the new rules of procedures of the Boards of Appeal from Katfriend Gwilym Roberts of Kilburn & Strode.  The online consultation is open until 30 April 2018, and readers are able to participate here.  Over to Gwilym for some suggestions and analysis:

"The proposed new rules of procedure of the Boards of Appeal at the EPO are aimed at streamlining matters but should they go further? 

The IPKitten getting her contribution in
The EPO has been streamlining all kinds of things recently with the “early certainty” programme. Search, examination and latterly opposition have all been subjected to efficiency measures, and whilst the balance with quality cannot be ignored (as the 924-Examiner-letter to the Admin Council shows), there is no question that speeding things up is generally welcomed.

As we all know, the Boards of Appeal are independent and, sadly, slow. However, they are taking action themselves by issuing a consultation on various changes to the rules of procedure that they follow in lieu of the Guidelines. The consultation is open until noon on 30 April 2018 and is likely to attract huge interest from national institutes, practitioners and no doubt EPO Appeal Board members and Examiners. It seems, mostly, to address all the right problems, but in some ways possibly could learn from national law in ensuring that the proposed good practices are adequately enforced. Here are some key proposals:

More clarity over acceleration of appeal proceedings
  • Proposed amendments to Article 10 codify and replace a Notice in a 2008 OJ regarding accelerated processing
  • The grounds for acceleration must be “objectively verifiable”, and examples given mirror the existing reasons, i.e. where there are infringement proceedings or a licensee decision depends on the outcome of the appeal. Accelerated opposition, however, has been dropped as an example ground for accelerating the appeal of that opposition.
  • Perhaps the greatest concern is that this can be dependent on various factors including the workload of the Boards. Whilst this pragmatism is welcomed in one sense, the problem at the moment is that the workload of the Boards makes it impossible to accelerate proceedings, so it’s difficult to see how this is going to change. There is also a question mark over transparency. It would be very useful if we could see what the proceedings pipeline looked like so that we could understand the reasons and prospects for acceleration or non-acceleration.
More clarity over “amendment (of everything)” in the proceedings
  • The proposed new rules explicitly remind us of the primary object of appeal proceedings: “To judicially review the decision under appeal”. As a result, a range of provisions underpin this declaration, removing or discouraging opportunities for practitioners to reopen cases altogether, as everybody is wont to do at the appeal stage at the EPO. The definition seems reasonable, and the proposals permitting its implementation largely codify existing Board of Appeal practice; in particular as Article 12 makes very clear, “amendments” are extremely unpopular under the new system, whether of requests, facts, objections, arguments and evidence. This becomes progressively more difficult through the appeal proceedings as discussed for example at Article 13 and 15, and in a further useful codification, the minutes of the first instance proceedings are now explicitly part of the appeal proceedings permitting, presumably, easier recognition of when the case is being “amended”. This has interesting ramifications in that the minutes of the first instance proceedings are going to become extremely important for minimising wrangling between parties, and we can only hope that in future the first instance minutes will be structured so that all of these possible areas of amendment can be easily and consistently recognised. It’s also going to be extremely important for practitioners to review the minutes carefully as soon as they’re issued at first instance going forwards. This clampdown on amendment is one area where the Boards of Appeal could perhaps do with more “teeth”. As we all know, they have the ability to award costs, but as we also all know, they rarely ever do because it’s rather difficult to enforce. Where amendments assist with procedural expediency, great. But elsewhere we may see huge and pointless discussions between parties about what constitutes an “amendment” to the case without any real sanction and this becomes an area of significant concern if we are to maintain procedural expediency for the Boards.
  • The Boards may be removing some of the practitioner’s freedoms in playing with their appeal cases, but they give something back as well by replacing the word “may” with “shall” in relation to issuance of a preliminary non-binding opinion. This is essential and really helps all the parties understand what’s coming, especially if it could be signed off by the whole Board so that there is less prospect of surprise at the proceedings by the other two members when they find out what they’re supposed to be thinking. There is also mention in the explanatory remarks accompanying the proposed rule changes of case management – so pivotal in UK proceedings - and this is another area where the Boards could really do with some teeth, to ensure that, at every stage of the proceedings, they have control over timings, amendments and general behaviour of the parties, underpinned by a stronger costs regime. This would undoubtedly focus the minds of the parties to the proceedings and contribute to an enhanced procedure.
Postponement
  • A minor but potentially important detail is introduced in relation to the reasons which can be presented for postponing Oral Proceedings – a notable omission currently from the proposed list is religious holidays and it would seem to make sense for the Boards simply to reiterate the list of reasons already in the Guidelines for first instance Oral Proceedings.
Transitional Provisions
  • Finally, in relation to transitional provisions, whilst there will be some leeway for practitioners to transition to the stricter rules of procedure, it does not look like the Boards currently go far enough and in particular don’t recognise that behaviour right now at first instance could be highly relevant in a future appeal under the new rules of procedure. A simple example would be practitioners not advancing every possible request at first instance (because there is currently a little bit more leeway in introducing them later in appeal, for example) – if this is not taken into account then normal current practice could be penalised unfairly.
We need to see greater speed from the appeal procedure at the EPO, even more so if it is to be a worthy competitor to any UPC that comes into force. Treating appeals a little more classically is certainly a reasonable step in the right direction and largely codifies existing case law, but there seems to be a lot still to be learnt from “tougher” jurisdictions such as the UK to bring parties a little more to heel. Consultation is welcomed, as EPO consultations always are, and everyone should have a good look at the proposed changes and work out how best to feed back if they want to make sure that they get the appeal structure they want rather than the one they deserve!"

REMINDER - IPKat comment moderation policy

This GuestKat is conscious that some topics tend to provoke a more robust debate than others.  While encouraging readers to contribute to the debate, she would like to remind contributors of the IPKat's comment moderation policy:

1.Strictly no anonymous posts, only pseudonymous. This is mostly for readability in long threads.
2.Strictly no personal attacks on identifiable people. If you need to spew hatred, go elsewhere.
3.Play nice.

Thank you!

Wednesday, 18 April 2018

Poor reception for jurisdiction challenge to global FRAND licence relief

Does the English Court have jurisdiction to grant relief in the form of a global FRAND licence in relation to a claim for infringement of UK patents, where UK sales account for only 1% or less of worldwide sales on which royalties are claimed? This was the subject of the decision of Carr J. in the Patents Court on Monday in Conversant Wireless Licensing S.A.R.L v Huawei Technologies Co. Ltd, ZTE Corporation and Ors [2018] EWHC 808 (Pat).  The answer - on the facts of this case as explained below - was "yes". 

Home of the global FRAND licence

Background

Conversant claimed to have made a number of offers for a global FRAND licence to the Defendants Huawei and ZTE (who manufacture and sell mobile devices worldwide) in relation to Conversant's patents declared essential to various ETSI standards.  Conversant alleged that no meaningful progress had been made with Huawei or ZTE in discussions over several years, who it said continued to infringe without taking a licence.  Huawei and ZTE disputed that Conversant had any valid SEP - maintaining that the patents were not essential or invalid.  Conversant commenced proceedings in July 2017, claiming that the Defendants were infringing 4 EP(UK) patents, and sought a determination of FRAND terms for its global SEP portfolio. Conversant's global portfolio of patents includes SEPS in over 40 countries. 

Huawei and ZTE have commenced proceedings in China seeking to establish invalidity and non-infringement of Conversant's Chinese patents, with decisions on validity and infringement expected by mid 2019.  In relation to Huawei, China accounts for 56% of its worldwide sales, and Conversant relies on its Chinese patents to claim royalties on a further share (19%) for sales in countries where it has no patents, since China is the place of manufacture of the alleged infringements.  The UK accounts for only 1% of worldwide sales on which royalties are claimed.  For ZTE, 60% of operating revenue was from China in the first 6 months of 2017, whereas only 0.07% of ZTE's turnover was generated in the UK. The Defendants' jurisdiction challenge was premised on the "China-centric" nature of their businesses and can be summarised as follows:

1. The English Court has no jurisdiction to decide these claims which are, in substance and effect, claims for infringement of foreign patents, the validity of which is in dispute.

2. Alternatively, the Court should decline to exercise jurisdiction to decide the claims, because England is not the proper or appropriate forum - China is the natural forum.

Justiciability

It was common ground that Art 24(4) (validity of IP rights) and 27 (court first seised) of the Recast Brussels Regulation would require the English Court to declare of its own motion that it had no jurisdiction to adjudicate upon cases concerning the validity of (non-UK) European patents.  The Court also assumed that the English Court had no jurisdiction to adjudicate upon cases in which the dispute concerned validity of non-European patents.  The Defendants however maintained that Conversant's claims are in substance claims for infringement of foreign patents - which therefore depend on the validity of foreign patents, which the English Court has no jurisdiction over.

Although Huawei did not formally challenge jurisdiction in Unwired Planet [2017] EWHC 711 (Pat), it did rely upon some jurisdictional arguments to support its argument that a global licence was not FRAND, including that a worldwide FRAND determination in the English Court would undermine existing infringement and validity proceedings in Germany.  Carr J. referred to the "simple" and "compelling" analysis of the judge in that case, where it was held that the Brussels Regulation and CJEU case law has nothing to do with what the terms of a FRAND licence should be.

"If a worldwide licence is FRAND then requiring Huawei to take and pay for one would not amount to determining questions of validity in relation to which courts of other Member States have exclusive jurisdiction under Art 22(4) [now 24(4)]. Taking Huawei’s example of the on-going German proceedings, the German courts would remain free to determine the relevant patents’ validity. A FRAND licence should not prevent a licensee from challenging validity or essentiality of licensed patents and should have provisions dealing with sales in non-patent countries. So if the German courts decide all the relevant patents are invalid (or not essential), that would simply result in whatever consequences the worldwide licence provided for. Since the licence is a FRAND licence those consequences are FRAND too. The binding nature and clarity of Art 22(4) are not thereby undermined and, most importantly, there is no risk of the decisions in England and Germany conflicting." (para 567 of Unwired Planet)

Applying that reasoning to the present case, there was nothing to prevent Huawei and ZTE continuing with their validity challenges in China.  The English Court could take the decisions of the Chinese Courts into account in setting the global FRAND licence terms, and further, the English non-technical trial was not scheduled until 2020, after the Chinese trials would be concluded.  Any licence would contain a mechanism for dealing with patents held to be invalid after the licence had been settled - the effect would be lower royalty rates.

The Court noted that there were other fundamental objections to the Defendants' jurisdiction challenge - they argued that the entire claim was not justiciable, whereas the claims for infringement of UK patents were properly justiciable in the English Courts.  Further, the judge recognised the commercial importance in having a forum whereby a global FRAND licence could be determined.

Forum Conveniens


The Defendants also contended that the most appropriate forum for the dispute was China.  The Court referred to the basic principle in Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460 that "a stay will only be granted on the ground of forum non conveniens when the court is satisfied that there is some other available forum, having competent jurisdiction, which is the appropriate forum for the trial of the action i.e. in which the case may be tried more suitably for the interests of all the parties and the ends of justice."

The Defendants submitted that the primary commercial driver for Conversant bringing the proceedings in the UK was to obtain a declaration for a global FRAND licence, and that the UK patents were merely a convenient hook upon which to hang the enforcement of a global FRAND licence.  They also offered to have a global FRAND rate determined in China.

On the other hand, the CJEU in Owusu v Jackson [2005] QB 801 held that an English Court could not apply the doctrine of forum non conveniens to decline jurisdiction over a claim against a European domiciliary on the ground that the natural forum for the claims was outside Europe (albeit the CJEU in that case did not state whether this doctrine applied in cases concerned with the subject matter of Art 24).  The Claimant pointed out that the claim regarding the UK patents would therefore remain in the UK and result in bifurcated proceedings.  Further, there was significant doubt that the Chinese Courts would have jurisdiction to decide the terms of a global FRAND licence and/or infringement of non-Chinese patents.

The Court came firmly down on the side of the Claimant. A key factor in the Court's reasoning seems to have been that the Chinese Courts did not have jurisdiction to grant a global FRAND licence. The Claimant's expert stated that the Chinese Courts cannot take action unless empowered to do so by an explicit provision, and there is no provision enabling the Chinese Courts to make a finding as to FRAND on a global basis. Following a review of expert evidence on both sides, the judge concluded that "China is not an alternative available forum in which infringement of the UK patents can be determined, nor in which the terms of a global FRAND licence can be set". Further, the claims were properly characterised as claims for infringement of four UK patents, notwithstanding that the object of the proceedings was either a global FRAND licence or FRAND injunction. The global FRAND licence sought by Conversant sets different royalty rates for different territories "and it makes no difference where the bulk of sales occur".

So overall, a resounding defeat for the Defendants in their jurisdiction challenge. If Conversant were able to establish jurisdiction in these proceedings against ZTE with 0.07% of turnover in the UK, it is difficult to conceive of many scenarios where jurisdiction would be refused - provided of course you have a UK patent in play.  

The FRANDly long arm of the IPKat

Other

There were also issues regarding the purported service of the Defendants' Chinese entities in England (service was invalid - see paragraphs 76 to 97)), and applications for service out of the jurisdiction (permission to serve out was granted and an alternative method of service was agreed - see paragraphs 98 to 116).

Finally, a footnote - Birss J's FRAND judgment in Unwired Planet is the subject of a 6-day appeal due to be heard in May 2018. The IPKat will keep you updated.

From IP practitoner to murder mystery author: Roz Watkins and "The Devil's Dice" (a pity about that patent attorney in the opening scene)

This Kat has long dreamed of writing a mystery novel, but IP seems to have always gotten in the way. Not so for one-time patent attorney Roz Watkins. Having studied Natural Sciences at Cambridge and later working as a partner at a firm of
 patent attorneys in Derby, Watkins decided to leave the patent profession, ultimately in favor of becoming a writer of mystery novels. On March 8th, her first book, “The Devil’s Dice,” was published by the well-known publisher, HarperCollins. 

The book (to be published in German in 2019 and with a television option by ITV Studios) is intended to be the first of a series featuring Detective Inspector (DI) Meg Dalton. Reviews, including by the Sunday Times, have been uniformly enthusiastic. This Kat takes the opportunity to offer his thoughts about the book as well as to share with Kat readers an interview with the author, as she tells her story of moving from patents to fictional murder. 

Kat Review

This Kat has just finished, to his great reading pleasure, “The Devil’s Dice”. It is difficult to believe that it is Roz Watkins’ first published mystery novel. The plot is intricate but coherent, replete with the many surprises and twists that mark a quality mystery novel. No loose ends are left dangling, the bane of too many mystery stories. Watkins has an elegant writing style together with a sardonic wit, with full-bodied descriptions of persons, places and events, so much so that the reader feels as if he or she is on site as the story unfolds. And to boot, already in the first pages of “The Devil’s Dice”, a patent attorney meets his untimely end in an eerie cave with an overlay of a possible decades-long curse. What could be a more auspicious way to begin. [Later discussions by the victim’s surviving patent partners about how to fabricate prior art is an entertaining interlude.]

For a novel of this type to succeed, it must offer the reader a compelling main character, someone whom you wish to encounter again soon (think Adam DalglieshJohn Rebus, or Bernie Gunther, whose creator, Phillip Kerr, tragically passed away on March 23rd). DI Meg Dalton has all the makings of such a character. She is at once resourceful, doggedly determined, and intelligent, but with a vulnerable personality extending over multiple dimensions. The reader feels her joy and shares her pain. Most of all, the reader wants to read more about her in the books to come.

Against this backdrop, IPKat was pleased to have the opportunity to conduct a written interview with the author, Roz Watkins, as follows.

Question 1: The first question must be: how did you decide to switch from being a patent attorney to an author of mystery books?

I enjoyed my time as a patent attorney but there were always so many things I was fascinated by, and that I never had the time or energy to explore. It sounds like a huge cliché and possibly a mid-life crisis, but I came to the difficult decision that, having only one life, I would make time to follow my interests.

I’d always wanted to write, but I had never really considered it as a career. After I left my patent job, I went on a learning frenzy, studying everything from psychology to animal training. I also bought two holiday cottages with my partner and we renovated and rented these out. When I was bashing out concrete mortar that should never have been used on original stone walls, and dealing with recalcitrant builders, I found my mind turning to murder… And I kept coming back to my long-held dream of writing a novel.

Everyone had told me it was practically impossible to get published by a mainstream press, but if you had a little talent and enthusiasm, surely this was a learnable skill? I decided I’d give it a go. I would try to learn how to write a publishable novel, by reading books on writing and studying published novels. I expected this to take at least five years, but I actually got a publishing deal within two years of starting. 

Question 2: How much has your science training at Cambridge and your work as a patent attorney helped you in your writing?

I think I approached the task of getting published quite strategically (see above). Many writers advise aspiring authors to write from the heart and keep persisting, assuring them that eventually they’ll write something that somebody wants to publish. This can happen, but many writers produce several books before getting published. I wondered if there was a quicker way!

Of course, you do have to write from the heart, and I include subjects in my books that fascinate or even anger me because that keeps me going when things get tough. But your technique can’t necessarily come from the heart – it probably has to be learned. (Unless you’re capable of writing an astoundingly original work of genius, which I decided I wasn’t.)

Question 3—You have mentioned how you developed your writing skills, at least in part, via an on-line course for aspiring authors. Could you share more about this experience and this ecosystem. 

I didn’t do an online course as such, but I joined a website called Scribophile, where writers critique each other. I learned a huge amount from reading and analysing other people’s writing, and I put my whole first book through the process, so each chapter had been read and commented on by several people. I also made friends on this course who later read my second book and gave me feedback on that. (I didn’t have time to put the second book through the whole process because I was on a deadline by then.) 

The internet has made so many things possible. I hunted out websites by literary agents and published authors, and I subjected myself to potential humiliation on websites devoted to first pages or synopses or agent submissions. And by joining Kindle Unlimited, I could read numerous books on writing craft for very little outlay. 

Question 4—What did you find the easiest and most difficult parts of writing “The Devil’s Dice”?

I love coming up with ideas, and I also love editing and fine tuning, so in that respect I’m lucky. Actually sitting down and writing the words is hard work, like drafting a patent specification. But the most challenging thing was trying to get the police procedure right. And that doesn’t necessarily mean completely accurate. 

My agent tells me drama always trumps realism, and of course you only have to watch an episode of Midsomer Murders to see that this is true. However, it pains me (and maybe this is my patent attorney nature) to get the facts wrong. So I had many long conversations into the night with a detective and Scenes of Crime office (over a drink or two). I try to add authentic details whilst accepting that my overall murder investigation process is inaccurate, because in reality it would involve hundreds of people sitting at computers scouring number plate data! 

Question 5— “The Devil’s Dice” is set in the Peak District in England, where you live, and includes patent attorneys, both dead and alive, as characters. Do you anticipate that your next books will also rely on settings and circumstances of which you are familiar? 

I threw my entire life into book 1! When I was writing, even though I wanted to get published, I never quite imagined it happening and I certainly didn’t envisage getting a three-book deal, so I didn’t worry about keeping anything back for future books. The setting of books 2 and 3 is still the Peak District, but the other aspects are not so familiar.

I obviously used and abused patent attorneys in "The Devil’s Dice", and it also has a lot of doctors. My mum was a doctor, so I knew about that job too. In book 2, the victim is a social worker, and my dad worked in that field, so I had a head start. My brother was a pilot so there may be some scope there. Book 3 is set in an abattoir, but I’m happy to report that none of my family have ever been involved in that profession, so I’m having to conduct some rather gruesome research. 

Question 6 —Are there mystery writers that you would consider models, or at least literary inspirations, for your own writing?

I love the way Sophie HannahTana FrenchLionel Shriver, and Kate Atkinson write. In terms of plot, Agatha Christie was incredible. As a child, I was a huge fan of the literary giants that are Enid Blyton and Dick Francis – you can learn a lot from them. 

Question 7—Can you give us any hints about the next two books in the series? At the least, will there be any more unfortunate events involving IP lawyers?

I’m so sorry to disappoint, but in books 2 and 3 there are no dead patent attorneys or unfortunate events of any nature involving IP. Possibly in book 4....

In book 2, out in March 2019, a ten-year-old girl is found running through the woods, barefoot and wearing only a blood-soaked nightdress. She has no memory of what happened to her, but her father is found stabbed to death in their nearby house. At first, DI Meg Dalton blames an intruder, but why had the girl's murdered father been so obsessed with the creepy statues in the woods, and with the girl's recent heart transplant?

In book 3, a young woman disappears from a night shift in an abattoir. He car is still there, but there is no sign of her. Disturbingly, a group of pigs kept overnight in the abattoir refuse their breakfast, and blood is found in their trough. Analysis of the blood shows... well, you’ve have to read the book to find out!

By Neil Wilkof 

Picture on lower right by PookieFugglestein, who has dedicated it to the public domain. 

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