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  • Friday, July 13, 2018 8:10 AM | Deleted user

    The US has announced it will impose additional tariffs on $200 billion worth of Chinese imports as a trade war between the countries rages on.

    According to the US Trade Representative (USTR) Robert Lighthizer, the latest tariffs (amounting to 10%) have been imposed to prevent China from violating the IP rights of US businesses.

    Lighthizer added that China has pursued “abusive trading practices with regard to IP and innovation”.

    On Friday, July 6, the US implemented tariffs of 25% on approximately $35 billion worth of Chinese imports. The tariffs will eventually cover up to $50 billion worth of Chinese imports, specifically products related to China’s “industrial policy and forced technology transfer practices”.

    In response, China imposed tariffs on $34 billion worth of US goods, with the potential of another $16 billion worth of goods being subject to the tariffs. According to the USTR, China “did this without any international legal basis or justification.”

    US President Donald Trump then hit back against China and announced plans to impose tariffs of 10% on an additional $200 billion of Chinese imports.

    In August 2017, Trump instructed Lighthizer to investigate China’s trading practices.

    The eight-month investigation concluded that China had been “engaging in industrial policy which has resulted in the transfer and theft of IP and technology to the detriment of our economy and the future of our workers and businesses”.

    The report also found that the Chinese government “sponsors the outright theft of US technology for commercial benefit”, added Lighthizer.

    Tensions between the US and China have intensified this year—but in May, the countries agreed that they would not impose any more tariffs on each another.

    However, that same month, Trump announced the plans to impose tariffs of 25% on $50 billion worth of Chinese imports.

    Source: https://www.worldipreview.com/news/us-strikes-again-as-china-trade-war-rages-on-16309#.W0XlCGfHMS0.linkedin

  • Friday, July 13, 2018 6:39 AM | Deleted user

    A first name can be used as company name and trade name – but what if the first name Otto is also a registered famous trademark? In the case Otto mail order company against Otto’s Burger it was ruled by court yesterday, no likelihood of confusion was seen for the company’s trademark “Otto”.

    Otto loses in the brand dispute over “Otto’s Burger” – for the moment

    Yesterday, the Hamburg District Court (LG Hamburg) dismissed the mail order company Otto’s action against “Otto’s Burger” (dated 10.07.2018, not yet published, ref. 406 HKO 27/18). The German mail order company had seen an infringement of the company wordmark “Otto” and had filed suit on the grounds of infringement of trademark rights and suspicion of unfair competition. The plaintiff Otto GmbH & Co. KG is the owner of the word mark no. 30126772 “OTTO” for “wholesale and retail services for goods in classes 1 to 34” – including class 25 (“articles of clothing”). The defendant is Daniel MacGowan, owner of “Otto’s Burger”, who runs four restaurants under this name in Hamburg. The name of “Otto’s Burger” follows his statement after the name of an alleged burger inventor.

    Inventor of burgers

    According to Wikipedia Germany, the exact development of the word “hamburger” is not known. There are competing theories about the origin of the hamburger and also about the inventor of the burger. Otto Kuase is mentioned in English Wikipedia as one of the possible inventors, with White Castle, an American regional burger chain in the Midwest, being cited as the source. According to Wikipedia, five other persons are also considered possible inventors.

    The parties had been arguing about the name “Otto’s Burger” since 2015. According to information from German TV NDR, MacGowan had initially protected the name not only for the food class, but also for clothing – in order to keep the option open to later be able to sell merchandising articles under the name. Could it therefore be assumed that the traffic in question would assume that clothing under the “Otto’s Burger” brand is actually clothing under the “Otto” brand? Or that the mail order company now also operates as a burger restaurant?

    Different business fields are decisive

    The Hamburg Regional Court saw no likelihood of confusion. It was also decisive for the decision that the business fields of both companies were too different, a court spokesperson informed. There was no violation of the company’s trademark “Otto” because the guests addressed by the four burger restaurants did not associate “Otto’s Burger” with the mail-order company’s trademark.

    Otto is a common first name – therefore no risk of confusion

    In addition, the regional court pointed out that “Otto” was a common first and last name, so that there was no danger of confusion. However, naming law is increasingly a contentious issue in trademark law. Only recently, in the KENZO versus KENZO ESTATE case, the ECJ ruled in favour of the earlier trademark proprietor “KENZO”. And Kenzo is also a common first name – in Japan (Info Blog: KENZO victorious before the ECJ).

    Company Otto lost its “Otto” mark for clothing in 2005

    Another interesting aspect of this case is that Otto-Versand had already lost a trademark dispute before the Federal Supreme Court (BGH) in 2005, but with a different complaint and completely different justification for the judgement. In this case of a trade mark registered for goods, the right-preserving use required presupposes that the public establishes a direct link between the trade mark used and a specific good. The BGH found in 2005 that this was lacking in the dispute because a large number of goods – including those of well-known brand manufacturers – were offered in the catalogues bearing the “OTTO” mark. However, the decision of the Federal Supreme Court forced Otto-Versand to agree to the cancellation of the trademark for the “Otto” garments in 2005 (press release of the Federal Supreme Court No. 109/2005 I ZR 293/02 ).

    The Otto GmbH & Co. KG therefore refers to the “Otto” brand for clothing without Otto mark clothing. According to the Federal Supreme Court, however, it is not relevant whether a private label for goods is operated in this sector, but only how consumers perceive the goods sector.

    Company Otto 2013 victorious before the BGH – OTTO CAP lost

    The BGH already decided in a judgement of 31.10.2013, (Az. I ZR 49/12), over the similarity between goods and retail trade services. In this case, Otto GmbH & Co. KG brought an action against a retailer of sports fashion, including baseball caps under the names “OTTO CAP”, “OTTO Trucker Cap”. The BGH clarified that goods and retail services relating to these goods may be similar within the meaning of Sec. 14 (2) No. 2 MarkenG. And for Otto GmbH & Co. KG, the judgement resulted in a partial victory: the disputed baseball caps were actually prohibited, but not because of an infringement of the word mark “Otto”, but because of the protection of the reputation of the action mark “Otto” (pursuant to Section 14 (2) No. 3 MarkenG). Moreover, the mail order company Otto wanted to claim an infringement of its word mark “Otto” in a unique position. However, this was rejected by the BGH.

    The Hamburg Regional Court’s ruling can therefore be eagerly awaited – and not only by Otto GmbH & Co. KG, which has already announced that it reserves the right to take further legal action. Company Otto loses in the brand dispute over “Otto’s Burger” – for the moment.

    Source : https://info.legal-patent.com/trademark-law/ottos-burger-wins-against-mail-order-company-otto/

  • Friday, July 13, 2018 6:33 AM | Deleted user

    The Japanese website hoster HP Maker won the trademark dispute against HP before the Japanese Patent Office. There was no likelihood of confusion between the two marks in the area of website creation and computer programming.

    Today at the EU-Japan Meeting, the long negotiated treaty Jefta was to be signed in Brussels, the largest free trade pact the EU has ever concluded. However, due to the heavy storms and landslides in Japan, the signing of the contract was provisionally postponed to 17 June. The EU-Japan trade agreement is designed to remove tariffs and trade barriers and counterbalance President Trump’s policy. This makes it all the more interesting to look at a recent decision in IP law in Japan.

    Brand dispute about HP in class 42

    The proceedings focused on the opposition trademark HP MAKER, which was registered by the Japanese Patent Office in Class 42 in 2017 for the “creation and maintenance of websites for third parties; computer programming”. Hewlett-Packard, the trademark owner of the HP brand and a world-renowned multinational information technology company, filed an appeal. Hewlett-Packard claimed that there was a likelihood of confusion and also pointed out that the HP brand was also known to the general public in Japan as an abbreviation for the American company. The controversial HP MAKER brand is particularly spicy, since MAKER is a manufacturer – and “HP manufacturer” would immediately trigger the association with Hewlett-Packard.

    Brand must be a source indicator

    Nevertheless, the JPO did not recognise the contradiction. The similarity of two brands is judged by their appearance, but also by the concept and the overall pronunciation of the sound. If two marks are similar in one of the points but differ in another, it is usually decided that there is no likelihood of confusion. A phonetic similarity would not be recognised as an argument between HP and HP Maker, since from a Japanese perspective a word mark is always to be considered as a whole.

    The JPO also confirmed the fame of Hewlett-Packard – but only in connection with computer-related goods as a source indicator. However, computer-related services, in particular website creation mentioned in Class 42, were not generally perceived to be associated with Hewlett-Packard and its HP brand. In addition, trademarks and listed trademarks are often considered dissimilar by the JPO as they are unlikely to be confused in terms of appearance, name and ideas – because the JPO believes that a completely different idea is generated. Finally the JPO denied any likelihood of confusion – HP lost this case.

    Conclusion

    The larger the better-known company in a trademark dispute, the more the suspicion arises that the other trademark applicant could be a free rider. Apple also suspected the same in a recently decided case about a word mark. In this case, too, the JPO decided in favor of the Japanese smartphone manufacturer against the famous one (Info Blog: “Apple Assist Center” – Apple fails with opposition to Japanese trademark). In both cases, the famous trademark owners could not prove that they had a source indication for the disputed trademark registration. This in turn is treated in the same way in European trademark judgements: trademark protection does generally apply in relation to the exact product and to the details for which goods or services the trademark is registered or restricted.

    Are you interested in national or international brand or trademark protection?

    Please take your chance and contact us. Our lawyers are experienced in trademark and patent law, national and international law.

    Source: https://info.legal-patent.com/trademark-law/hp-hp-maker-no-likelihood-confusion-japan/


  • Friday, July 06, 2018 7:15 AM | Deleted user

    Have you been seeing the PayTM logo everywhere? Outside every shop, every vegetable vendor and even at the local panwadi? Well, you have been diagnosed with the PDSD (Post Demonetization Stress Disorder). Fret not; mobile wallets are here to make all the stress go away! Among others, PayTM has already become a frontrunner in this market, having stupendously cashed in on the Government’s drive to go cashless. Little did PayTM know that its quick success has awakened an envious competitor from the Wild West.

    On November 18, 2016, PayPal instituted a Notice of Opposition in PayTM’s application under Class 36 to register its TM. PayPal is one of the world’s largest online payment services with presence in over 190 countries and the ability to transact in over 100 currencies. PayPal alleges in its notice that PayTM has misappropriated the latter’s bicolor scheme. We also have a feeling that this dispute will soon escalate into a passing off action too; wherefore we have dealt with issues beyond the scope of the opposition proceedings as well.

    Analysis

    Here, we shall try and analyze some of the issues involved in the present case. Let’s start with procedural objections.

    Is PayPal’s opposition plagued with laches?

    PayTM may argue that PayPal’s opposition should be rejected since it comes nearly 4 years after PayTM first started using the mark. No claims of passing off or infringement were made earlier. PayTM may also argue that PayPal has filed the opposition with a clear intention to damage the immense spurt in PayTM’s reputation after the recent demonetization in India. Having read the fine print, we believe that PayPal will take this round.

    It is true that PayTM filed its application in 2012; however, it was advertised in the TM Journal (No. 1754) only on July 18, 2016. Section 21 of the TM Act enables any person to oppose a trademark by filing Form TM-5 within 3 months of the advertisement of such mark in the TM Journal; with a maximum extension of another month. PayPal seems to have filed its notice of opposition on the very last day of this time frame on November 18, 2016. Therefore PayTM must file reply to PayPal’s opposition notice within a maximum period of three months after PayTM is formally in receipt of the opposition notice; failing which the PayTM Device Mark may be deemed abandoned.

    Can PayPal claim exclusivity over the word “Pay”?

    According to us, PayPal cannot claim exclusivity over a generic word like “PAY”. PayPal will have to prove that “PAY” has acquired a secondary meaning exclusively in relation to PayPal’s use in India. Chances to prove this seem very bleak. We can compare this decisions analyzing whether “TODAY” can be monopolized by any one newsgroup. The Delhi High Court answered in the negative because there was no evidence of them using the stand-alone term “Today” for any of their services. SpicyIP has covered this issue here. Therefore, we believe that PayTM will take this round since several other e-wallet companies use PAY in their trademarks or trade names. Similarly, the Bombay HC recently held that “SHAADI” cannot be monopolized since it’s a word of common parlance in India and would, therefore, be descriptive of online marriage portal services. Read our post on this dispute here.

    Can PayPal successfully claim exclusivity over its Bicolor Mark?

    The colour trademark is a non-conventional trademark which is still in its infancy in India. For instance, the Indian Trademark Registry rejected Cadbury’s attempt to monopolize its instantly recognizable purple packaging for lack of distinctiveness. SpicyIP has previously covered this issue here and here. Interestingly, the ‘Color Depletion Theory’ justifies the rejection of trademark protection for single color marks on grounds that protection will eventually lead to the depletion of all available colors. Read our previous post on colour trademarks here.

    However, when a combination of colours is in question, the story changes dramatically. The Delhi HC has previously extended TM protection to the distinctive green and yellow colour scheme used by Deere on its tractors. The Court held that the Defendant’s manner of using Deere’s color scheme was deceptive since the tractors manufactured by both the parties had green bodies with the wheels and seat painted in yellow.

    PayPal’s application for its particular bicolor device (pictured above) was filed in 2014 via an international registration. In its application, PayPal has stated that “…the color(s) medium blue and light blue is/are claimed as a feature of the mark. The mark consists of the word PAYPAL in stylized lettering, where the word “PAY” appears in medium blue and the word “PAL” appears in light blue.” Interestingly, this TM application has been objected to by the Indian Trademark Registry. Unfortunately, we are unaware of the exact nature of the TMR’s objections since the examination report is unavailable on the TMR website.

    Nevertheless, PayPal may still have locus to bring an action for infringement. For instance, the Delhi HC has previously held that an Applicant is entitled to file a suit for infringement even by merely filing an application for registration of the mark.

    Has PayPal acquired enough reputation enough to assert its TM rights in India?

    Next, we analyze whether PayPal has enough goodwill and reputation to prove its claims, inter alia of being a well-known mark. Two claims come into play.

    First, that PayPal has acquired an enviable reputation worldwide; such that consumers in India associate the mark (and the color-scheme) as emanating from PayPal alone. PayPal will be required to establish its reputation in the Indian market. To begin with, PayPal claims to be available in more than 200 markets. Website analyst Alexa.com has ranked PayPal.com 25th in the US and 60th across the globe in terms of overall traffic (views and clicks). These facts go a long way to show that PayPal has acquired immense trans-border reputation over a long duration.

    Indian Courts have regularly applied the doctrine of spillover of reputation to allow foreign TM owners to protect their marks in India after the Supreme Court decision in NR Dongre v Whirlpool. In particular, a strong online presence has been recognized by the Delhi HC as a legitimate indicator of such trans-border reputation. Further, the SC has also previously affirmed the Calcutta High Court’s position that such a foreign TM owner is not required to his goodwill in the Indian market to claim the protection of a globally well-known mark. We have previously covered these issues here, here, and here. Importantly, PayPal also operates the business in India through a website with an Indian domain which is marked with PayPal’s claimed bicolor device mark.

    Second, that PayPal is the prior user of the mark in India. PayPal claims to have started offering its services to Indians in 2000, making it the prior user of the mark in India. However, it must be noted that the application for the light blue and the medium blue device was filed internationally in 2014, while PayTM filed for the registration of its mark in 2012. However. PayPal claims that it has been using the device internationally since 2007.

    Therefore, we believe that PayPal most certainly has acquired immense global reputation and as such, it should be entitled to bring a suit in India for passing off its bicolor format. However, the question is: will this right lead PayPal to a desirable remedy?

    Has PayTM acquired a secondary meaning?

    PayTM has clearly benefitted from demonetization, and its recent success has brought it fame and goodwill. For instance, Bloomberg Quint notes that PayTM saw a 4.7 percent jump in its valuation in just three months. Similarly, Tech Circle reports that the currency crunch has skyrocketed PayTM’s user base to 164 million customers with nearly 40,000 merchants are signing up on the platform every day. Not to forget PayTM’s front page newspaper ad that had the Prime Minister himself modeling for the company (without his consent, of course).

    PayTM stands a fair chance to prove not only that it has accumulated goodwill in India post demonetization, but also that ‘PAYTM’ (in its bicolor format) has acquired a secondary meaning among consumers. It can rely upon the fact that many FinTech consumers have begun to use PayTM as a verb; just like Google. Fortunately for PayTM, the Indian FinTech market is quite clearly demarcated between various distinct players and ‘PAYTM’ is used by people as a verb exclusively with reference to PayTM’s services. However, sometimes this can be a precarious position to be in, as the trademark can lose exclusivity and become public juris due to the fact that it has come to be associated with the activity instead of the proprietor. Famous examples of trademark genericide are Xerox, Thermos, Escalator etc. Read our previous post on this phenomenon here

    In light of PayTM’s strong reputation and independent identity in the Indian market, we believe that it’s highly unlikely for any reasonable person to be reminded of PayPal after viewing PayTM’s bicolor mark, thereby eliminating any chance of misrepresentation or deception.

    Conclusion

    It makes strategic sense for PayPal to attempt to enter the Indian market in a big way now since it is likely that India will be a viable market for all kinds of cashless payment services in the years to come. Importantly, in October last year, the RBI permitted 100% FDI in “Other Financial Services”, including mobile wallets under the automatic route. The RBI’s previous stringent regulations did not allow PayPal to do business in India on grounds that it was not a banking company and thus, could not be permitted to hold money. These regulations were put in place in order to ensure that such services do not become vehicles for money-laundering and tax evasion. This new development means that PayPal can now spread its wings in India, both legally as well as strategically.

    While PayPal may still have a legitimate shot at capturing the Indian market for mobile wallets, we believe that it would be unlikely that it will see any success in its trademark war against PayTM.

    Source: https://spicyip.com/2017/01/the-paymark-battle-whose-blue-is-it-anyway.html

  • Friday, July 06, 2018 6:56 AM | Deleted user

    Artificial Intelligence (AI) has been a technology with promise for decades. The ability to manipulate huge volumes of data quickly and efficiently, identifying patterns and quickly analyzing the most optimal solution can be applied to thousands of day-to-day scenarios. However, it is set to come of age in the era of big data and real-time decisions – where AI can provide solutions to age-old issues and challenges.

    Consider, as an example, traffic management. The first traffic management system in London was a manually operated gas-lit traffic signal, which promptly exploded two months after its introduction. Since this inauspicious start, a complex network of road closures, traffic management systems, traffic lights and pedestrian crossings have served to drive increased complexity into traveling in the City. Today traffic travels slower than ever, despite the plethora of new systems being added to better manage the system.

    AI has the potential to change this. It can harvest data on traffic volumes, historical trends and current blockages to quickly calculate the most optimal solution for traffic in London. It can do this in near real time, constantly tweaking and managing flow to deliver the best possible solution.

    This is why AI is increasingly the go to technology for organisations wanting to solve highly complex and data heavy challenges. Digital retailers are using AI-powered robots to run warehouses. Utilities are using AI to forecast electricity demand. Mobile networks are deploying AI to manage an ever-increasing demand for data. We stand on the threshold of a new age of AI powered technology.

    The Intellectual Property (IP) industry is another market where AI could have a profound effect. Traditionally powered by paper, manual searches and lengthy decision-making processes, AI can be deployed to simplify day-to-day tasks and deliver increased insight from IP data.

    Improving efficiency and reducing risk

    IP administrative tasks are one of the most time intensive and risky areas of IP. Law firms and corporate IP departments may, at any time, cover thousands of individual items of IP data, across hundreds of jurisdictions, dealing with thousands of different products. Historically this has been a significantly manual and slow process.

    Consider one single patent that a company has applied for protection for in many different countries. A network of agents, familiar with the specific processes required to gain protection in specific countries, will each help the company achieve their goal. Along the way, hundreds of items of paperwork will be generated, in multiple languages, each with their own challenges and opportunities.

    All of this information would currently be assessed manually and then input into an IP management system. Naturally enough this could easily result in many data processing errors. Now consider this across multiple patents. The opportunities for error are almost limitless. Yet for many companies IP remains its most valuable asset. A simple error in inputting a renewal date could risk losing an asset worth millions to a company. It is worth noting that the World Intellectual Property Organisation (WIPO) estimates around a quarter of patent information is wrong. The risks are therefore very evident.

    In addition, considerable time and cost accrues from the manual labour involved in inputting data. This is activity that, if it can be automated, frees law firms and IP experts to focus on more strategic issues. AI, which is highly adept at processing large sets of data quickly and accurately, can help both efficiency and accuracy. This also enables law firms and IP professionals to take on a more strategic role within the organisation, generating insight from data to help shape future company performance, whilst leaving the more mundane aspects of IP management to computers.

    By automating the submission of data and ensuring that every single item of IP has a unique identifier, correspondence from the various patent offices and agent networks can be simply sorted and searchable on demand. An AI engine can then be deployed to identify relevant information in correspondence, resulting in faster and more accurate outcomes.

    Search and analytics

    The number of IP assets globally is growing. According to the WIPO there was a 7.8% growth in patent filings between 2014 and 2015. This upward trend in filings has continued for at least 20 years. Therefore, IP documentation and resources are growing. Finding relevant information in this vast amount of data is becoming more difficult. Historically, searches have been carried out manually, with static search databases being the only support tools.

    AI and Machine Learning (ML) can not only automate the process of searching huge databases but also store and use previously collected data to improve the accuracy of future searches. AI can also be used to provide insight into a geographical or vertical market. Consider a company looking to exploit IP in new regions. It may wish to consider the best countries to file for protection. Insight into the strengths and weaknesses of markets in certain countries could be cross-referenced with competitive IP data to deliver an instant overview of the most beneficial geographies to apply for further protection. Research that would have previously taken months to achieve can be managed in minutes by deploying AI in an effective way.

    Driving insights

    A large IP portfolio is bound to have both strengths and weakness. Indeed, one of the weaknesses may be the sheer scope of the portfolio. As a patent portfolio increases in size, it becomes difficult to effectively oversee and draw insight from the portfolio. As a result, firms are not only limited to managing processes such as renewals, but also in using insight to gain a competitive advantage.

    Many IP professionals are already analyzing the value of their patent portfolio. Which patents are most effective? Which deliver most licensing revenues? In which countries? What is the value of IP to business compared to the cost of renewal? By analyzing large sets of data, AI can indicate where a company’s portfolio of IP is strongest and weakest.

    This can, in turn, shape future investment decisions in research and development, help companies understand their relative strengths and weaknesses in terms of their competitors and enable companies to understand more about the potential opportunities in new markets.

    Conclusion

    AI is now delivering real value to companies that need to solve complex issues. Within IP management, AI can empower IP professionals. Day-to-day IP tasks can be time-consuming, but AI technology enables professionals the time to focus on more strategic decisions in their portfolio. It will also drive improved accuracy while reducing the risk of IP insight and intelligence moving on as employees do. For IP professionals, the real opportunity, however, comes from the insight that AI can provide into otherwise impenetrable and inaccessible volumes of data. AI will help IP professionals generate business insight that can open up new markets, accurately value an IP portfolio and deliver a better understanding of what and where the next generation of IP investment should come from.

    ABOUT THE AUTHOR

    Tyron Stading is the Chief Data Officer for CPA Global, where he is responsible for creating unified data integration and analytics across all of our products and services. In 2006, Tyron founded and served as CTO for Innography, the US-based IP analytics software provider that CPA Global acquired in 2015. He was previously employed at IBM and several other high technology start-ups. Tyron earned a Computer Science degree from Stanford University and an MBA from University of Texas at Austin. Tyron has published multiple research papers on intellectual property and personally filed more than 50 patents.


    Source: http://www.ipwatchdog.com/2017/07/27/role-artificial-intelligence-intellectual-property/id=86085/


  • Thursday, July 05, 2018 5:17 AM | Deleted user

    Double patenting refers to the granting of patent protection twice for the same invention. Generally, double patenting is not permitted because an inventor could file a later application for the same invention and receive another patent term of life.

    In the U.S., double patenting is rejected under two circumstances:

    1. when the same invention is requested to be patented again; and

    2. in continuing patent applications.

    If in a continuing patent application, a claim sought for in a second patent is an obvious variation only and nothing new, a patent will not be granted. When claims of variations of an invention are patented under two separate patents, it is seen that expiration of the first patent results in an improper extension of patent rights due to an unexpired second patent. The problem associated with double patenting can be overcome by a patentee issuing a “terminal disclaimer”. A terminal disclaimer is a written statement issued by the owner or patentee stating that s/he has disclaimed the period of second issued patent that would extend beyond the expiration of the first patent.

    Double patenting also applies when there is a conflict of patent applications by two persons with regard to the same invention. When different parties claim identical invention, the Patent and Trademark Office (PTO) will require proof of first completion and the patent will granted to the party who completed the invention first.

    Source: https://definitions.uslegal.com/d/double-patenting/

  • Tuesday, July 03, 2018 3:59 AM | Deleted user

    This article aims to present some fundamentals of patents for tech based startups. While a startup should be aware of other forms of intellectual property like copyright, industrial design rights, trademarks, plant variety rights, trade dress, and trade secrets, this article focuses on patents.

    What is a patent?

    A patent gives you the ability to exclude others from using the invention for a limited period of time. Hence, you get the ability to license the technology and decide how the invention can be used and by whom, during the period of exclusivity. This type of exclusivity needs to be carefully protected, and startups need a good coach who can help them navigate the complexity, including type of patent rights (utility patents, business method patents, and design patents), the procedure for patent applications and prosecution, the rights offered and the requirements in different patent jurisdictions, and most importantly the timing and content.

    A patent application consists of several sections – abstract, specifications, drawings, and claims. The meat of the application is the ‘patent claims.’ A claim defines the skeleton around which the technology solution can be built – hence it should be looked as the bare minimum description of your invention that captures patentability requirements – namely novelty, usefulness, and non-obviousness.

    Startups should actively sense changes with respect to policy and guideline with respect to IP. For example, US's new (very recent) patent guidelines for the first time declare software patents and business methods patentable, which is of serious significance to startups, they should be cautious from infringement point of view. The exclusivity from the patent office comes at a cost – the patent application with all relevant details is published – this allows others working in the same area to benefit from the current state of the art and continue to build upon it. Does that explain why Coca-Cola hasn’t patented the recipe for its most famous drinks?

    Why startups should look to file patents

    Patents are expensive and time-consuming, so startups need to understand the trade-off in filing for a patent versus exploring other types of IP or business protection. A patent provides its holder with a legal right to monopoly on use or sale of the invention in the country where the patent rights have been granted. This right can be leveraged to gain competitive advantage and exclusivity, and to avoid the risk of being exposed to assertions of IP infringements from third parties and competitors.

    If you are wondering whether your technology is worthy of a patent, here is a quick checklist to guide you:

    Novel – the method/material or combination aren’t already known. Also, you shouldn’t have already published or disclosed this in your marketing efforts.

    Useful – the technology has commercial potential.

    Competitive advantage – monopoly on this will put you ahead of your competitors.

    Expansion – this could be used in other fields and applications.

    Hide versus publish – it will be difficult to keep and protect this as a trade secret.

    If your invention(s) meets one or more of these criteria you should seek legal advice to decide on a patent strategy. Patents can serve many mid-term to long-term goals for a technology company.

    Patents as sword: Offensive IP strategy: Patents that are registered with view to enforce them to generate royalties or to exclude competitors is addressed as an offensive IP strategy. Many pharmaceutical companies use offensive patent portfolios to protect new drugs they bring to market to ensure market exclusivity for a time to gain return on their investment, establish market share, and earn profits. (Apple Inc. was able to exclude Samsung products from some markets through court injunctions, etc., as part of an offensive patent strategy.)

    Patents as cash cow: collaborative, valuation, licensing opportunities: Patents could be used as revenue generating tools from licensing opportunities, generate increased valuation during funding and acquisition conversations, and could be used for collaborative opportunities. A robust patent portfolio could return 25X of investments in patents during acquisitions. While startups in many countries have typically shied away from patents, there is an increasing awareness of the value patents can bring both from the market and fund-raising perspectives. A ‘patent pending’ tag and a registered trademark for a product name would benefit a startup to attract investors, advertise, and to promote the brand early in the business cycle. Also, a unique product could command a premium market price, having a significant impact on the bottom line.

    Patents as shield: Defensive IP strategy: Heard of nuclear deterrence? Well, the same thing might apply to patents in some cases. A lot of patent deals in high-tech spaces involve cross-licensing – where each party provides access to some of their patents in return for a similar license. Startups could build a patent portfolio with the intention of negotiating more favourable licensing terms and/or defending the company against patent infringement lawsuits.

    (Google’s acquisition of Motorola Mobility for the latter’s patents surrounding Android mobile operating system was considered a defensive move, as it bought a struggling handset maker because of its highly valuable patents and technology in an area surrounding the Google Android operating system.)

    When and where to file patents

    A simple straightforward answer to when to consider IPR protection for a startup is “as early as possible.” Once a technology has been made public – directly (publication) or indirectly (for example, through marketing) it might no longer be defensible as a patent. Hence, businesses might be better served by filing a patent early during the lifecycle of the technology. Also, priority date of the application is an important aspect in determining novelty of the technology. A provisional patent application can be filed early on to lay claim to an early priority date, while keeping the upfront cost of drafting and filing a patent low.

    Patents are location-restricted and the costs involved in having a broad geographical coverage for IP are very high. It is very important for startups to understand where their market lies and address those geographies for patent coverage. A PCT application is an important tool when deciding geographic coverage – it gives the applicant 30 months to choose what geographies he/she would like to pursue the patent. When making patent-related decisions, startups should keep in mind that a patent term is typically 20 years, and hence decisions should be made with a long term view of the technology and its commercial potential.

    Your cheat sheet to patent terms

    Coverage: Often startups find it difficult to strategise on patent coverage in terms of geography. Filing in multiple geographies without understanding the market is adverse and will cost the startup heavily. It is advisable for startups to consider the PCT route, which would give them a breather of 30 months from the priority date for additional filings in other geographies. By this time, a startup would also have a clear understanding of where their market is. Other geographic unions also provide broader patent coverage through a single filing channel, for example, EP for some countries in the European Union, ARIPO for Africa.

    Public disclosure: Startups must be aware of the fact the any public disclosure of their idea, technology, and product in any form before the patent filing date can become prior art and may prevent you from obtaining a patent. Some countries have a grace period of up to one year but it is advisable to use that only as a last resort.

    Patent laws: Startups must certainly be aware of legal aspects of patents at least in the geographies where they file patents, build the technology and sell their products. Countries vary both in scope, timing and enforcement of patents so it is crucial to have a good local advisor in each geography.

    Non-disclosure agreement and confidentiality terms: Startups in early stage often disseminate information to third parties without properly defining terms of confidentiality and non-disclosure. This might affect the patentability in multiple ways.

    Early filing and late filing: Startups should not look to file patents very early when their technology is just at a wish list stage nor delay the filing till the technology development is mature. Startups should identify optimal time to file patents when they can ascertain claims to the invention they have made.

    Inventor versus applicant: Startups should understand who the inventor is and who would be the applicant for the patent. Necessary agreements should be executed with terms laid out clearly. In USA the inventor is the ‘first owner’ of the patent unless it is explicitly assigned to another agency, for example, the employing company or research institute. In a recent case, an American startup discovered this the hard way when the inventor was quitting, to join a competitor.

    Patent term: Typically patent terms are defined by the respective jurisdictions. For instance the term of patent since priority date is 20 years in the US, provided the applicant offers to periodically pay the maintenance fee to renew the rights.

    Startups should start thinking about their patent strategy early on. It can have a cascading effect on various seemingly unrelated aspects of their business including – budgeting, fund-raising, product launch, market entry and manufacturing tie-ups.

    Source: https://yourstory.com/2015/09/patent-pills/

  • Sunday, July 01, 2018 3:51 AM | Deleted user

    One of the hottest-button political issues of the day is high prescription drug costs. On one side of the debate are politicians and patient groups espousing a populist viewpoint seeking for lower drug costs — starting immediately. On the other side are drug companies, their lobbyists, and those in favor of strong patent rights, who argue that unless companies are allowed to recoup their tremendous drug development costs, fewer life-saving or enhancing medicines will be found. There is no doubt this is a complicated question, with strong arguments on both sides. As an initial matter, however, it helps to understand why drug prices in this country can be so high in the first place.

    In a simple sense, there are two levers that allow drug companies to charge what some consider exorbitant prices for their products in the United States. First is the FDA regulatory regime, which grants exclusivity to drug companies for limited periods when certain criteria are met, and can sometimes inadvertently delay generic competition due to delays in processing approvals for generic products. Second is the exclusivity granted by patents, buttressed by the complicated legal dances that generic companies need to engage in to clear the way for their products. Whether a drug enjoys FDA or patent exclusivity, or both, drug companies operate as if they will have a limited window to enjoy their monopoly pricing on a product before the entry of generic competition. For patients, that means when they need the drug — before or after generics are available — can have a big impact on what they need to pay. And because there is no uniform worldwide regulatory or patent system, patients in the U.S. often find themselves paying much more than patients in other markets with weaker patent rights, for example.

    There is a lot to say on how patents can contribute to high drug prices, but for purposes of this column I would like to focus on a single drug that has been in the news because of its pricing — while taking a look at how complicated patent issues can both help or hinder the likelihood of cheaper prices for consumers. By now, many of us have seen the advertisements for Gilead’s Hepatitis C treatment, Harvoni (or Solvadi), which has an extremely high cure rate (over 95%) for Hep C sufferers. Gilead purchased the company that developed the Hep C cure in 2011 for close to $11 billion, and in 2014-2015 alone raked in over $15 billion on sales of the drug. A big chunk of that revenue came from U.S. patients, where Gilead charged over $80,000 per course of treatment. While that price has come down a bit due to competition, there is no doubt that this miracle drug is not a cheap cure.

    For its part, Gilead argues that the cost of the cure must be measured against the even greater cost that Hep C sufferers would incur if they needed a liver transplant. At the same time, Gilead has been forced to drastically lower the price for its drug in countries like Egypt and India, which have large Hep C patient populations and have effectively forced Gilead to forego monopoly pricing supported by patents. In fact, the same pill that has sold for over $1,000 in the U.S. actually costs under $1 to produce, and Egyptian patients can be cured for hundreds, and not tens of thousands, of dollars. In India, forced generic availability has also greatly reduced the price. The disparity between prices in these countries and what is charged to U.S. patients has given rise to arguments that Gilead should be forced to offer lower prices in this country as well.

    Political pressure to lower drug prices for its Hep C treatment is not the only hurdle Gilead has dealt with as it tries to maximize its profits on one of its key products. On the patent front, the company has been hit with legal challenges from all sides. A major competitor, Merck, launched two major patent infringement lawsuits against Gilead last year, based on patents relating to the active molecule in Gilead’s drug that Merck had acquired when it purchased two smaller biotech companies that were also pursuing Hep C treatments. While Gilead was able to fend off Merck in one case, a jury awarded $2.5 billion in damages in another case (currently on appeal). Since Merck is already selling a competitive Hep C treatment, these cases were straightforward attempts to extract a royalty from Gilead. If Gilead ends up having to pay royalties on its sales of Harvoni, that could be an independent reason why Gilead could choose to maintain, or even raise, its prices.

    While Gilead has been dealing with these third-party claims of patent infringement, the company’s own patent estate around its Hep C franchise has also come under assault. In perhaps the most prominent example, groups like Médecins Sans Frontières (MSF) have challenged Gilead’s patents in Europe and Brazil. In Brazil, there is a large Hep C population of over 1.5 million likely sufferers, and even though Gilead’s rack rates in Brazil are much lower than in the U.S. ($6,500 versus nearly $60,000), there is still an effort to introduce even lower prices through generic entry. To that end, Gilead faces patent oppositions in these foreign jurisdictions, aimed at preventing Gilead from blocking generic competition through its patents. While these oppositions have a legal analog in the U.S. in the form of Inter Partes Review proceedings (which have been used to attack drug patents held by other companies), to date Gilead has not faced such challenges on its Hep C drug patents. The more successful those efforts are, the more the price disparity between what Gilead charges in the U.S. vs. overseas is likely to grow.

    Source: https://abovethelaw.com/2017/06/the-cost-of-a-cure-patent-rights-and-drug-prices/

  • Saturday, June 30, 2018 3:23 AM | Deleted user

    Patent protection in the pharmaceutical industry is different from protection in other sectors.

    The pharmaceutical industry relies on innovation to develop new medical treatments, but bringing a product to market is high risk and high cost. It can take between 10 and 15 years to develop a new medicine and according to a new study by the Tufts Center for the Study of Drug Development, can cost as much as $2.56 billion.

    Once a new product has been developed, protecting intellectual property (IP) can also be costly. Every industry needs to evolve individual IP policies, management style and strategies, but patents and trademarks are critical for the pharmaceutical industry in particular.

    Patents help to protect companies from IP infringement and copycats looking to reproduce generic products at a low cost and high volume.

    Unique Challenges with Pharma IP — How to Protect

    The pharmaceutical industry is unique in that, while it can cost almost nothing to manufacture a drug, it costs millions to create it. For this reason, patent protection in the pharmaceutical industry is different from protection in other sectors.

    The high cost associated with R&D means the majority of pharmaceutical companies apply for patent protection during research stages and before clinical trials. This can reduce the effective patent life for medicines to an average of just 11.5 years.

    Early patenting not only reduces the patent life of a product when it reaches the market, but shortens the time available for marketing a new drug. Pharmaceutical companies need to protect ideas quickly. They rely on a logical, flexible, IP strategy as early as possible in the R&D process. “Methods of use” and “Formulation” patents can be filed later — at the clinical trial stage of drug development and when the products use is properly defined.

    The issue of reduced patent life has been addressed in legislation in the United States, where patent applicants can now apply for a term extension. However, the time periods permitted for such extensions do not equate to the time lost. In the U.S., patents are only extended for half the time period that was consumed by the regulatory approval process.

    Trade secrets are becoming an increasingly useful tool for pharma, particularly in the U.S. where recent changes to guidelines for examination at the U.S. Patent and Trademark Office have applied severe limitations on the patentability of natural products and methods using laws of nature.

    While patent protection in many territories is limited to 20 years from the date of filing, the period of protection conferred by a trade secret can be indefinite. Trade secrets entail significant risk but can speed up the process of drug development.

    Trends: The Emergence of Biotechnology

    Pharma IP can be challenging but it has not stopped innovation developing at an extremely fast pace. Over the last century technology has played an increasingly important role in driving pharmaceutical innovation.

    Biotechnology is a collaboration of traditional bioscience processes and modern technology and it is spearheading the development of targeted treatments. As these two industries come together, healthcare could be transformed.

    The increase in the aging population, and the need for better technologies to diagnose and monitor the progression of human diseases is driving innovation in the wearable technology market sector and personalized medical devices.

    For example, Israel-based Teva Pharmaceuticals, the world’s largest generic drug manufacturer, is partnering with chip-making giant Intel to create a wearable device that tracks the progress of Huntington’s disease. Progression of the disease is different for each individual, but wearable technology can track the stages of deterioration and inform treatment.

    HabitAware is a smart wearable bracelet dedicated to controlling Obsessive Compulsive (OCD). OCD can be felt with varying levels of intensity and cover a number of different behaviours. The wearable monitors movement and sends a subtle alert if a person shows signs of doing something compulsive.

    Trends: Will 3D Printing Revolutionize the Pharmaceutical Industry?

    Technology has the potential to improve a pharmaceutical company’s internal R&D processes and reduce operating costs.

    For example, drug R&D can be drastically improved by 3D printing. The technology could be used to print pills or even human organs and tissue. This would allow companies to test drugs cheaply — without compromising safety or ethical standards.

    According to a new report from IMS Institute for Healthcare Informatics, the largest global pharmaceutical companies need to reduce their combined operating costs by $36 billion before 2017 to maintain operating margins and current levels of R&D. As a result of improved target selection, preclinical tests, clinical trials, chemical synthesis, and product management, research becomes more efficient.

    Using 3D printing for medical applications could help with commercializing medical developments. Dental implants have already been commercially successful: it is predicted almost 50,000 custom-fit Invisalign braces are printed each day.

    Organovo also is using 3D printing technology to create functional, three-dimensional tissues that can be implanted or delivered into the human body to repair or replace damaged or diseased tissues. According to research from Markets and Markets, using 3D printing for medical applications could have a market value of $2.13 billion by 2020.

    The Future of Pharmaceutical IP

    With a history of high cost R&D and high-risk IP strategies, pharmaceutical companies were forced to battle copycats and settle for reduced periods of patent protection. This impacted the motivation — and investment — that is necessary for pharmaceutical innovation.

    The emergence of biotechnology has revitalized the pharmaceutical industry and fuelled innovation in technology that could significantly alter the effects of diseases in the future.

    Source: https://www.pharmpro.com/article/2017/05/pharmaceuticals-technology-and-future-ip


  • Monday, June 12, 2017 3:00 PM | IIPLA Team

    The Supreme Court Redefines Patent Exhaustion

    Michael Q. Lee, Paul A. Ainsworth, and Krishan Thakker

    In Impression Products, Inc. v. Lexmark International, Inc., No. 15-1189 (U.S. May 30, 2017), the Supreme Court fundamentally changed patent licensing in the United States by eliminating a key limitation on patent exhaustion, and eliminating the distinction between U.S. and foreign sales. Impression addressed two issues: (1) “whether a patentee that sells an item under an express restriction on the purchaser’s right to reuse or resell the product may enforce that restriction through an infringement lawsuit” (Id., Slip Op. at 1), and (2) “whether a patentee exhausts its patent rights by selling its product outside the United States, where American patent laws do not apply.” (Id. at 2.) In its decision, the Court overruled the Federal Circuit on both issues.

    The ruling is expected to demystify the “cloud of uncertainty” for downstream purchasers/licensees and end-users of patented components in the global market who risked continuing liability for infringement even after authorized sales to consumers occurred. But for other businesses, the ruling could hamper investment in R&D and innovation because of the limits placed on a patent owner’s ability to obtain fair value for its intellectual property.

    Post-Sale Restrictions Do Not Avoid Patent Exhaustion

    In Impression, the Supreme Court held that the sale of a patented good exhausts all patent rights in the good even where the product is sold subject to a lawful, and clearly communicated restriction on re-sale. In this case, Lexmark sold patented ink cartridges under a customer “Return Program,” that provided for a significant price discount under the condition that buyers use the cartridges only once, and refrain from transferring the spent cartridges to anyone but Lexmark. Lexmark brought suit after Impression refilled and resold spent “Return Program” cartridges.

    The Supreme Court held that the “single-use/no-resale restrictions in Lexmark’s contracts with customers may have been clear and enforceable under contract law, but they do not entitle Lexmark to retain patent rights in an item that it has elected to sell.” (Id. at 5.) The Court reasoned that its decision is consistent with the “well-established exhaustion rule [that] marks the point where patent rights yield to the common law principle against restraints on alienation” (Id. at 6), and provided an example of “a shop that restores and sells used cars. The business works because the shop can rest assured that, so long as those bringing in the cars own them, the shop is free to repair and resell those vehicles. That smooth flow of commerce would sputter if companies that make the thousands of parts that go into a vehicle could keep their patent rights after the first sale.” (Id. at 7.)

    The Court characterized its decision as “long held” (Id. at 8), and stated its “recent decision in Quanta Computer, Inc. v. LG Electronics, Inc. settled the matter.” (Id. at 9.) But the Quanta decision is far from clear on this point. Unlike Lexmark, Quanta involved an unrestricted license grant. Quanta, 553 U.S. 617, 636 (2008). The Impression Court characterized Quanta as involving “contracts requiring purchasers to use those processors with other parts that the company manufactured” (Impression, Slip Op. at 9), but practitioners and commentators – as well as the Court itself in Quanta – characterized those provisions as no more than notice provisions. Quanta, 553 U.S. at 636. This was particularly the case since the contracts at issue specified that breach of the notice provision would not be grounds for termination. Id. at 623-624, 636-637.

    After Impression, it may be more difficult for a patentee to spread the cost of its technology among different entities in the stream of commerce, or to leverage its technology in different business silos. The Court’s suggestion—to use contract law rather than patent law to enforce post-sale restrictions—presents additional challenges not the least of which is the possible lack of privity with downstream buyers.

    Even before the Court’s decision, practitioners were considering possible workarounds to avoid patent exhaustion, such as “covenant-to-sue-last” provisions. But the viability of those workarounds is unclear given the scope of the Court’s holding, as well as Federal Circuit precedent equating a covenant-not-to-sue with a patent license for purposes of patent exhaustion. See Transcore v. Electronic Transaction Consultants Corp., 563 F.3d. 1271 (Fed. Cir. 2009). It is more likely that patentees will take steps to establish privity with downstream purchasers. This may be transactionally difficult, however, and not possible for existing license agreements.

    Sales Outside the United States Exhaust U.S. Patent Rights

    Also in Impression, the Supreme Court held that authorized foreign sales of patented articles likewise exhaust the patentee’s U.S. patents. The Impression Court’s decision is aligned with the Supreme Court’s earlier decision in Kirtsaeng v. John Wiley & Sons, Inc., 568,U.S. 519 (2013), which held that foreign sales exhausted U.S. copyrights. Indeed, the Supreme Court cited Kirstaeng in support of its reasoning, stating that “[applying] patent exhaustion to foreign sales is just as straightforward.” (Impression, slip op. at 14) The Court was not concerned with the territorial limits of U.S. patents: “Exhaustion is a separate limit on the patent grant, and does not depend on the patentee receiving some undefined premium for selling the right to access the American market. A purchaser buys an item, not patent rights. And exhaustion is triggered by the patentee’s decision to give that item up and receive whatever fee it decides is appropriate.” (Id. at 15)

    The Court’s holding may result in companies increasing foreign prices to match those in the U.S. This may be especially true with patented products that can be easily imported into the U.S., such as pharmaceutical products, consumer products and electrical components. The Court’s decision also opens the door to compulsory licenses in foreign countries, that would effectively negate US patent rights. The Court seemed to acknowledge this possible consequence but remained unconcerned by the consequences: “The patentee may not be able to command the same amount for its products abroad as it does in the United States. But the Patent Act does not guarantee a particular price, much less the price from selling to American consumers.” (Id. at 15)




    Michael Q. Lee, Director  

    mlee@skgf.com



    Paul A. Ainsworth, Director  

    painsworth@skgf.com



    Krishan Thakker, Associate

    kthakker@skgf.com



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