From March to September 2016 the team is joined by Guest Kats Emma Perot and Mike Mireles.

From April to September 2016 the team is also joined by InternKats Eleanor Wilson and Nick Smallwood.

Friday, 29 July 2016

Patent litigation as a branding tool: Huawei v Samsung


This Kat never quite understood the motivations for the Apple-Samsung smartphone wars. Maybe the reason was as simple as often portrayed. The
late Steve Jobs was incensed at what he felt was a gross misappropriation of his company’s IP by Samsung. But when the leading judgment came down the US (among a number of law suits between the two companies related to the same subject-matter, which were taking place in various countries), there was a certain feeling of unease. Was the case really about the possibility of injunctive relief going to the heart of the competitive relationship between the two sides or the potential for a break-the-bank monetary award? After all, the focus of the court was on certain design patents, and some observers were of the view that these design patents were at best trivial and perhaps should have never been granted.

At least in this Kat’s eyes, Apple lost the IP high ground—an owner of valuable IP rights that were being brazenly misused. From the public relations point of view, the suits were a draw, with perhaps a slight advantage to Samsung. In the words of CIMB analyst Lee Do-hoon (see Reuters report below) --
“If you look at the patent battle with Apple and Samsung … it ultimately created a lot of benefits for Samsung in a kind of an advertisement.”
What we see from this high-profile IP litigation is that, sometimes, the most valuable aspect is the branding benefit, rather than injunctive or monetary relief. What reminded the IPKat of this was the announcement last week that Samsung Electronics Company was suing smartphone rival, Huawei Technologies, for patent infringement in several courts in China. According to a report by Reuters, the action filed in the court in Beijing sought 161 million yuan (approximately $24.14 million) plus injunctive relief against Huawei regarding the production and sale of alleged infringing products. Huawei had filed suit against Samsung in the U.S. in May, alleging patent infringement with respect to 4G cellular communications technology. Now comes the law suit filed in China.

What do we make of these filing and counter-filings? In the view of analyst Lee Do-hoon, monetary relief may not be at the heart of these disputes. As for Samsung, one gets the sense that the filing of the law suits in the Chinese courts is an attempt to perhaps nudge Huawei to the negotiations table. Of more interest is the potential benefits to Huawei with respect to filing of the U.S. case. It may simply be that the Chinese company wants to enjoin Samsung from using the technology covered by the patents. Or perhaps, the end game is some type of settlement, providing for cross-licenses or the like. But Lee Do-hoon suggests another factor may be at play in helping to explain the filing of the law suit by Huawei—
“Huawei might also be trying to create some noise marketing for itself.”
Consider the market circumstances of the two parties to these law suits. Samsung is the number one manufacturer of smartphones, while Huawei is a rapidly expanding number three. It is no secret that Huawei is seeking to extend the reach of its products into key countries outside of China, where Samsung and Apple hold way. It is also no secret that Chinese companies are still finding it a challenge to brand their products outside of China. Filing a high-profile law suit against Samsung in the U.S. sends a message that Huawei can play with the (other) big boys in the smartphone space. In doing so, it potentially enables the company to expand its brand recognition in the U.S.

Provided that the U.S. law suit does not go the way of the Apple-Samsung dispute, and Huawei is viewed as overplaying its IP hand, or otherwise is seen in a negative light, there is the potential for substantial upside in brand recognition of its smartphones in the vast U.S. market. Indeed, such a benefit may ultimately be much more significant for the company than matters of injunctions and monetary damages. Indeed, patent litigators might consider taking a program or two at their local school of management to learn more about the dynamics of brand-building, and how patent litigation can contribute to this process.

Friday Fantasies

IPWeek Singapore 2016

InternKat, sifting through this week's news
The 5th edition of IPWeek Singapore takes place this year from 22-24 August at Marina Bay Sands. The theme for the Global Symposium this year is "powering the innovation cycle through IP." Delegates will hear contrasting views from a panel of distinguished speakers about how IP can be used to build lasting competitive advantage. The conference attracted more than 1,300 participants from over 30 countries in 2015 and is expected to be even bigger and better this year. You can register to attend here.

Hot off the press: journal explores nexus of IP & international investment law

Katfriends Henning Grosse Ruse-Khan and Simon Klopschinski would like to draw your attention to the special issue of the Journal of International Economic Law (OUP) on the nexus of IP and international investment law. They write, "IPKat readers may be amazed to hear that besides the universe of IP-specific treaties (e.g. TRIPs) there is a parallel dimension of more than 3,000 international investment agreements (IIAs), which also protect IP. If a state violates its obligations under an IIA, the foreign investor is usually not forced to grudgingly accept any harm suffered, but can often take legal action under the IIA, without being dependent on the courts of the host state or the assistance of its home state. If you now wonder why as an IP expert you never heard of this parallel universe of IIAs, this may be because only relatively recently the first IP-related investment disputes arose.” The special issue contains 7 papers exploring the interface between IP and investment.

US inaugurates National Anti-Counterfeiting Month

For those of you who are watching the US presidential campaign with excitement or trepidation, we have news of a less contentious inauguration. The International Trademark Association (INTA) and the U.S. Chamber of Commerce Global Intellectual Property Center (GIPC) have applauded the passage of a Senate resolution designating  July National Anti-Counterfeiting Consumer Education and Awareness Month. The resolution deserved a snappier title but, 70 years after the passage of the first federal trade mark protection (The Lanham Act), it is a symbolically important step. You can read more about the report and access the resolution here.

New Zealand Trans-Tasman Patent Attorneys Amendment Bill

Plans to bring New Zealand and Australian patent attorneys under a single Trans-Tasman regulatory framework (initially mooted in 2009) have come a step closer to fruition this month. The NZ Parliament's Commerce Committee has reported back to the House with suggested improvements to the proposed legislation. There may not be too much longer to wait before the bill emerges from its legislative chrysalis.

Report from 19 July case management hearing on legal challenges to Brexit

Members of the IP community with an interest in this subject can read Darren Smyth's report on the hearing at the Royal Courts of Justice.

Costs of ISP blocking injunctions: is there really an EU rule?

Yesterday the stunning London offices of Simmons & Simmons hosted a panel discussion on the implications of the recent Court of Appeal judgment in Cartier [here]

The debate also included the question of who should bear the costs of a blocking injunction: should it be intermediaries or rightholders?

The Cartier decision and the dissent on costs

In its ruling the Court of Appeal upheld the decision of Arnold J at first instance [noted here and here] and confirmed that blocking injunctions can be also sought in online trade mark cases, even lacking an express implementation into UK law of the third sentence of Article 11 of the Enforcement Directive ("Member States shall also ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe an intellectual property right, without prejudice to Article 8(3) of [the InfoSoc Directive].")

Similarly to Arnold J, Kitchin LJ confirmed that internet service providers (ISPs) are to bear the costs of implementing a blocking order, while rightholders have to pay the costs of the relevant application. In his dissent Briggs LJ stated to agree with the analysis of Kitchin LJ, except on the issue of costs. 

The appeal in Cartier was the first time that ISPs had ever appealed a blocking order (including those made pursuant to s97A of the Copyright, Designs and Patents Act), also in relation to costs.

Adding the costs of blocking injunctions
The Newzbin2 reasons

Since the landmark decision in Newzbin2 [the first copyright blocking order issued in the UK], ISPs have been regarded as those having to bear the costs of implementing a blocking injunction. 

At that time Arnold J noted how ISPs (in that particular case, BT) are commercial enterprises that make a profit from the provision of services which the operators and users of infringing sites (in that particular case, Newzbin2) use to infringe the rightholders' rights. As such, the costs of implementing the order could be regarded as a cost of carrying on their own business.

This conclusion was said to be reinforced to some extent - albeit implicitly - by EU law, in particular:

  • Recital 59 of the InfoSoc Directive ("In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carries a third party's infringement of a protected work or other subject-matter in a network. This possibility should be available even where the acts carried out by the intermediary are exempted under Article 5. The conditions and modalities relating to such injunctions should be left to the national law of the Member States.");
  • The decision of the Court of Justice of the European Union (CJEU) in L'Oréal [para 139], in which - pursuant to Article 3 of the Enforcement Directive - it was clarified that enforcement measures "must not be excessively costly".
This said, however, in my opinion the hints derived from EU law are, indeed, just ... hints.

Is there an EU framework?

The EU law framework  is pretty much silent regarding who should bear the costs of injunctions against intermediaries. Even the ambiguous wording of Article 14 of the Enforcement Directive ("Member States shall ensure that reasonable and proportionate legal costs and other expenses incurred by the successful party shall, as a general rule, be borne by the unsuccessful party, unless equity does not allow this.") does not seem to relate directly to injunctions. 

Substantially 'costs of injunctions' is therefore an area of the law that has been left unharmonised at the EU level. This is also because, as Recital 59 of the InfoSoc Directive eloquently puts, "[t]he conditions and modalities relating to such injunctions should be left to the national law of the Member States."

Although the majority of national legal systems envisages that intermediaries are those responsible for bearing the costs of an injunction against them for third-party infringements, Member States are therefore ultimately free to choose the solution they prefer.

As such, any discussion as to whether the solution indicated by Arnold J and subsequently followed in other cases is the one to prefer is a legitimate one.

Will the CJEU provide yet another de facto harmonisation? The Mc Fadden case

This being the state of the art, ie a formally unharmonised framework, things might change - as a matter of fact - soon. More specifically, things may change when the CJEU decides the pending reference in Mc Fadden, C-484/14.

This is a reference for a preliminary ruling from the Regional Court, Munich I (Germany), and was made in the context of proceedings between Sony and a person (Tobias Mc Fadden) who operates a business selling and renting lighting and sound systems for various events.

Mc Fadden owns a Wi-Fi connection that is open to anyone to use as it not protected by any password. In 2010 that connection was used by someone other than Mc Fadden to download unlawfully a musical work to which Sony owns the copyright. Following Sony’s formal notice, Mc Fadden sought a negative declaration from the referring court. This dismissed it and upheld Sony’s counterclaim, granting an injunction against Mc Fadden on the ground of his direct liability for the infringement at issue and ordering him to pay damages, the costs of the formal notice, and costs. Mc Fadden appealed that decision, arguing that the provisions of German law transposing Article 12(1) of the ECommerce Directive would shield him from liability for third-party infringements. The Regional Court held the view that Mc Fadden would not be directly liable, but rather indirectly liable according to the German doctrine of Störerhaftung, on the ground that his Wi-Fi network had not been made secure. This court decided nonetheless to stay the proceedings and seek guidance from the CJEU on a number of issues.

AG Szpunar
For the sake of this blog post, what is particularly interesting is Question 4:

"Is … Article 12(1) of [the ECommerce Directive] to be interpreted as meaning that the expression ‘not liable for the information transmitted’ precludes as a matter of principle, or in any event in relation to a first established copyright infringement, any claims for injunctive relief, damages or the payment of the costs of giving formal notice or court costs which a person affected by a copyright infringement might make against the access provider?"

What is possibly even more interesting is the answer that Advocate General (AG) Szpunar provided in his Opinion [here] on 16 March last.

The AG held that an intermediary cannot be held liable for an IP infringement committed by a user of its services and, as a result, cannot be asked to bear pre-litigation and court costs. Holding otherwise "could potentially have the same punitive effect as an order to pay damages and could in the same way hinder the development of the intermediary services in question." [para 77]

AG Szpunar however did not stop here.

He noted [paras 78-79] how injunctions can be imposed on innocent intermediaries to repress third-party infringements. However, he concluded that the safe harbour regime [Article 12 of the Ecommerce Directive in this specific case] "precludes the making of orders against intermediary service providers not only for the payment of damages, but also for the payment of the costs of giving formal notice or other costs relating to copyright infringements committed by third parties as a result of the information transmitted." [para 80, emphasis added].

In my own opinion, the phrase “other costs” might include the costs of implementing an injunction, including a blocking injunction.

This means that, should the CJEU confirm the AG analysis on this point, then Briggs LJ might have well been right ... Stay tuned!

Thursday, 28 July 2016

REMINDER: Cartier event taking place this afternoon

As reported by this blog, in its judgment on 6 July 2016 the Court of Appeal of England and Wales upheld the validity of blocking injunctions against intermediaries (ISPs) in respect of online trade mark infringements and burdened ISPs with the costs of implementing them.

The IPKat is partnering with Simmons & Simmons for a free rapid response event to be held this afternoon at the London offices of Simmons & Simmons. 

Registration starts at 5:30 pm and the event begins at 6 pm.

This seminar consists of a panel discussion with Simon Malynicz QC (3 New Square), Lauri Rechardt (IFPI's Director of Licensing and Legal Policy) and myselfDarren Meale, Managing Associate at Simmons & Simmons and Deputy District Judge in the IPEC, will chair.

If you are interested in attending, there are still a couple of places available. 

You can register here but ... hurry up!

Tuesday, 26 July 2016

Filed your Article 28 declarations? You may have to do them all over again…

Former Guest Kat, Darren Meale, of Simmons & Simmons, London, provides another update to the ever-changing landscape of Article 28 declarations. Previous instalments can be found here, here and here.

I can only apologise in having to write again on this subject, but the EUIPO has recently moved the goalposts on Article 28 and everyone who has reviewed portfolios and filed Article 28 declarations may need to redo the job because the EUIPO has, nearly four out of six months into the window for declarations, released a new list of “orphan” goods and services.

The EUIPO, at it again...
The problem is this. Article 28 declarations may only feature goods and services not covered by the literal meaning of the Nice class heading to which they relate. When it released its Communication back in February, the EUIPO took an approach designed (in my view) to minimise the number of declarations it would receive. Its approach was to make clear that it would not accept declarations for goods and services which were covered by the literal meaning of the class heading, so one would need to be specific. To assist, it published a list of goods and services it considered were “not covered” – what I’ve been calling “orphans”. To come up with that list, it would have had to review 45 lists of alphabetical goods and services across five versions of Nice, so a hefty job. The list of orphans was only stated to be examples, but the implication was clearly this: we, the EUIPO, have decided what we think the orphans are, so if you file for something else, be prepared to argue with us over it.

In its FAQ, published along with the Communication, the EUIPO softened its approach and said it would accept goods and services where there is “reasonable doubt”. Nevertheless, I don’t expect many practitioners wanted to plod through the lists trying to find suitable candidates when the EUIPO had, ostensibly at least, already done the job.

I expect that many of you went away and advised clients on this rather technical and time-consuming exercise that where the EUIPO haven’t identified any orphans, it might not be worth the time and effort to review the Nice alphabetical lists and try to argue that they have missed something (nearly 1,500 orphans have now been spotted buried within many thousands more non-orphans). You may also have taken the list of orphans and used it as a guide to help you and clients decide what to file for (and what not to file for) in your declarations.

The EUIPO has now lobbed a grenade. On 4 July, it issued a Notice detailing a new list of orphans. This list does not mention the original list and it is presented in a completely different format. It is stated to provide “Examples of terms either clearly not covered, or not clearly covered” by the literal meaning of the class headings. It has apparently been created by the Office “Following feedback from its user community”.

There are a significant number of changes. In the original list, there were no orphans in classes 6, 17, 23, 27, 32, 34, 36, 38, 42, 43 and 45. One might sensibly have concluded that if your portfolio primarily covers these classes, you need not bother filing declarations. In the new list, there are orphans in every class apart from classes 23 and 32. There were previously three orphans in class 35, there are now 30. And so on.

If you have relied upon the EUIPO’s original list of examples, you may need to look again. If you have already filed declarations, you may need to file new ones – or supplemental ones. Given the work involved in manual review, this may be an expensive and frustrating task. We have been doing this using our own automation software and can re-run our analysis using the new list – but this list, coming more than half of the way through the six month window, is likely to be hugely unwelcome to all.

We have sought comment from the EUIPO, who tell us that no further lists are planned. They also confirm that several declarations may be filed for the same mark, or any declarations already filed can be withdrawn and then re-filed.

Beware that this change will not to lead to an extension of the time limit, which is in the new EUTM Regulation, and not a matter in which the EUIPO has any discretion. It is very unlikely indeed that an amendment to the EUTM Regulation could be passed prior to the deadline.

So practitioners should get cracking with the new list to ensure that declarations are filed by 24 September 2016, or rights will be lost forever.

Monday, 25 July 2016

Never Too Late: If you missed the IPKat this week

IPKat keeps it cool
Were you away and missed the last week of the IPKat? Never Too Late 106 is here to bring you what you missed.


Internkat looks back on Heythrop v CAPS. Should animals be able to own copyright?



Eleonora Rosati presents the latest decision concerning ISP liability from the Rome Court of First Instance, ruling that Megavideo can be regarded as a hosting provider.



Amerikat Annesley Merelle Ward explains why Mr Justice Arnold rejected a claim to consider infringement of a German designation in Rhodia v Molycorp. To maintain English courts' jurisdiction, claimants need to let go of foreign validity challenges.



Katfriend Amy Crouch brings us the two decisions and developments in the Napp v Dr Reddy's and Sandoz litigation. 



Mark Schweizer presents Germany's Federal Court of Justice (BGH) decision to uphold a contourless red colour mark, overruling the German Federal Patent Court's decision to cancel the registration.



The Tribunal de Grande Instance (TGI) rules that it is not possible to filter all search results for certain keywords.. "torrent" for instance. This would amount to a general surveillance measure and therefore not be an acceptable measure.



Katonomist Nicola Searle is impressed by this book edited by Kung-Chung Liu and Uday S. Racherla., particularly the empirical analyis modelling innovation and IPRs, and the use of diagrams and figures.




PREVIOUSLY ON NEVER TOO LATE

Never too late 105 [week ending on Sunday 17 July] High Court rejects Seretide combination colour mark in Glaxo v Sandos | Conference report: Should you arbitrate FRAND terms? | Friday Foghorn, including UK IPO invitation for IP valuation research bids

Never too late 104 [week ending on Sunday 10 July] e-Sport in the French Digital Republic Bill | Aspartame is back -- and is Pepsi playing by a new branding playbook| The USPTO moves to clear "Trademark Deadwood" | Court of Appeal of England and Wales confirms availability of blocking injunctions in online trade mark cases  An opportunity for IP scholars seeking future careers | CJEU says that operators of physical marketplaces may be forced to stop trade mark infringements of market-traders | Book review: the law and practice of trade mark transactions | Own name defence in Singapore| Cartier rapid response event | AG Wathelet on out of print books | Maccoffee: McDonalds not loving it

Never too late 103 [week ending on Sunday 3 July] | Publicity Rights v First Amendment EU Trade marks Article 28 Declarations | Non-EU UK in the UPC? | Book review: IP Strategy, Valuation and Damages | Brexit and Copyright | In memoriam of David Goldring | Openness, innovation and patents

Never too late 102 [week ending on Sunday 26 June]  | Neighbouring rights for publishers | US Supreme Court makes it easier to obtain patent enhanced damages | US Supreme Court in Halo and Kirtsaeng makes IP victory sweeter for successful parties | Enlarged Board publishes decision: EPO President violated judicial independence | Dear Europe... UK leaves the EU | Dear UK... 

Never too late 101 [week ending on Sunday 19 June] Procedure to remove EPO Board Member ends abruptly | Trade mark "bully" | EU Trade Secrets Directive | Cannibalism, Branding and Market Segmentation | A-G Szpunar declares Rubik's Cube shape mark invalid | Apple and the podcast industry | IP Inclusive | Coke defends opposition to 'ZERO' marks



Friday, 22 July 2016

Book Review: Innovation & IPRs in China & India

The summer temperatures may send London into meltdown, but that doesn't mean that publications have stopped. Hot off the presses is, "Innovation and IPRS in China and India: Myths, Realities and Opportunities," edited by Kung-Chung Liu and Uday S. Racherla.  The book is a collection of essays from IP experts around the world.  Part I of the book looks at doctrinal and empirical analysis, and Part II looks at China and India separately.

Naturally this Kat was drawn to the empirical analysis.  A chapter by Racherla investigates the relationship between IPR and innovation.  Racherla performs a literature review of studies by the USPTO, the EU IPO and case studies of technological and business model innovations in the U.S. and India. Asking, "Do IPRs Promote Innovation?," he answers, "it depends."

Racherla's Is and the IPRs Model
Racherla develops what he calls the, "Is and IPRs model."  He argues that innovations (Is) and IPRs can be divided along a main axis ranging from the Science and Technology (S&T) space to the Business and Commercialization (B&C) space. "Inventions" are concentrated in the S&T space where patents are the preferred method of protection, whereas business models, commercialisation strategies etc. inhabit the B&C space and prefer trade marks and copyright. He argues that in both of these spaces, the evidence that IP promotes innovation is weak; in S&T, "the percentage of conversion of patents into commercial products/services as a measure of the IPR promotability of innovation," and in B&C, "the impact of these trademarks and copyrights on breakthrough or disruptive innovations," both provide unconvincing arguments for a direct innovation-IPR link.  However, he argues that his Is-IPR model leads to two conclusions: 1) not all IPR promote innovation and, 2) "only IPRs protecting sustainable innovations – which possess economic, social, and/or environmental value – promote innovation." As is often the case in policy and innovation, it depends.

A second empirical paper asks, "Does Patent Strategy shape the Long-Run Supply of Public Knowledge?: Evidence from Human Generics," by Kenneth Huang and Fiona Murray.  The authors collect data on, "patent-paper pairs" which are when the same, "piece of knowledge is contributed to both public and private knowledge streams through its disclosure in both publication and patent." They argue that studying these pairs allow for assessment of patents, public and private knowledge, and policy. Focusing on human genetics, the article uses 1,300 of these patent-paper pairs to find, "patent strategies - patent scope, patent ownership, patent landscape complexities, and the commercial relevance of patented private knowledge - negatively impact the long-run production of public knowledge." It's quite a long chapter, running 40 pages.

The book covers an eclectic mix of topics. One very nice aspect of this book was its use of colour in images and artwork, which is fairly rare these days.  Liu, Kongzhong, and Uday S. Racherla. Innovation and IPRs in China and India: Myths, Realities and Opportunities. 2016 is available for £82 e-book and £86 hardcover.  Rupture factor: low, 224 pages.

Thursday, 21 July 2016

Paris Tribunal de Grande Instance rejects request to filter 'torrent' searches on Bing

... possibly true
Can search engines be ordered to filter all results containing certain keywords or a combination of certain keywords?

In a nutshell, this was the issue that the Tribunal de Grande Instance de Paris (TGI) addressed in the context of litigation between SNEP [the French Syndicate of Phonographic Publishing] and Microsoft. In its decision on 8 July 2016 [this post has been written relying on the original French version of the judgment] the TGI answered the question above in the negative.

Background

Claiming that through Microsoft’s search engine Bing users could access infringing copies of phonograms or video recordings, SNEP sought an injunction against Microsoft to implement filters on Bing (under all top level domains) to prevent – for a period of 12 months – the display of results containing in their domain name the word ‘torrent’ and provided when conducting the following queries: Kendji Girac/Shy’m/Christopher Willem [these being among the most popular French artists of the moment] + torrent. 

According to SNEP, in fact, in relation to these artists, among the first 20 results displayed further to a query of this kind on bing.fr, the vast majority (70%) related to unlicensed sources.

SNEP’s action was based on Article L336-2 of the French Intellectual Property Code (IPC), by which France transposed Article 8(3) of the InfoSoc Directive into its own national law. This provision of EU law mandates upon Member States to “ensure that rightholders are in a position to apply for an injunction against intermediaries whose services are used by a third party to infringe a copyright or related right.”

Microsoft claimed that SNEP’s action should be dismissed on grounds that – among other things -  SNEP, instead of seeking a filtering injunction of this kind, should have first used Bing’s free reporting and removal tool and requested to have relevant results (identified by means of appropriate URLs) [for a different approach to the need for URLs, see here and here] de-indexed.  

Kendji Girac:
not much to celebrate this time
The decision

Injunctions are independent from a finding of intermediary liability

The TGI noted at the outset how injunctions pursuant to Article L336-2 IPC/Article 8(3) InfoSoc Directive can be sought independently from a finding of liability of the online intermediary at hand [this conclusion is not surprising also in light of the Ecommerce Directive and has been recently confirmed by Advocate General Szpunar at para 83 of his Opinion in Mc Fadden, on which see here].

No need for notice-and-takedown first

This said, the court rejected Microsoft’s argument that SNEP should have first reverted to the submission of notice-and-takedown requests. There is nothing in Article L336-2 ICP that suggests the contrary.

Yet, one cannot seek to de-index all ‘torrent’ queries

However, the TGI dismissed SNEP’s action, on grounds that injunctions pursuant to Article L336-2 ICP can be granted in relation to specific, identifiable contents, and the measures sought must be determined, proportionate, efficient and specific in relation to each listed site. This was not the case of SNEP’s request.

'torrent' is not just 
a copyright-related term though
According to the court, SNEP’s request was:
  • Indeterminate, in that it was not limited to the existing phonograms of Kendji Girac, Shy’m, and Christopher Willem, but also future works yet to be created and released;
  • General (as opposed to specific) in that it did not concern an identified site, but rather all sites made available through Bing in response to users’ queries for [artist’s name] + torrent;
  • Ineffective and not strictly necessary, since it would obtain a limited result and it could be easily circumvented by users.
According to the TGI, ‘torrent’ is not necessarily associated with infringing content [indeed, 'torrent' also mean "a strong and fast-moving stream of water or other liquid", although Urban Dictionary defines it as "The RIAA's worst Nightmare"], but is rather a neutral term referring to a communication protocol developed by BitTorrent. 

According to the TGI, the measure sought by SNEP, ie de-indexing of queries for artists associated with ‘torrent’, would amount to a general surveillance measure and could unduly cause the blocking of legitimate sites.

Federal Court of Justice greenlights colour mark red

Red.
In the ongoing dispute between the Sparkassen Group and Banco Santander, which led to the CJEU's decision in cases C‑217/13 and C‑218/13, the German Federal Court of Justice (BGH) has annulled the decision of the Federal Patent Court which invalidated Sparkassen's contourless colour mark "red" and held that the mark had acquired distinctiveness at the time of the Federal Patent Court's decision in 2015.

Sparkassen Group has been using the colour red in connection with financial services, namely retail banking, in Germany since the 1960s. In 2002, it filed a trade mark application for the contourless colour "red" (HSK 13) for financial services, namely retail banking, which was granted - after an initial rejection - sometime in 2007. Banco Santander and Oberbank, two new entrants to the German retail banking market that also used the colour red in their home markets, filed for invalidity. In 2009, the German IPO (DPMA) dismissed the actions. On appeal, the Federal Patent Court referred several questions to the CJEU, which the CJEU answered in joined cases C-217/13 and C-218/13 in 2014.


Yep, that's also red
The CJEU namely held that it European law precluded an interpretation of national law according to which, in the context of proceedings raising the question whether a contourless colour mark has acquired a distinctive character through use, it is necessary in every case [Merpel's emphasis] that a consumer survey indicate a degree of recognition of at least 70% (see IPKat post here).


Subsequently, the German Federal Patent Court nonetheless sided with Santander and Oberbank and cancelled the registration of the mark at issue because acquired distinctiveness had not been proven, neither at the time of filing (2002) nor at the time of the decision (2015). Acquired distinctiveness at the time of the decision would have been enough because Germany exercised the option under Article 3(3) second sentence Directive 2008/95. Under German law, proof of acquired distinctiveness either at the time of filing or at the time of decision leads to validity of the mark (§ 8(3) German Trade Mark Act).


On appeal, the BGH held that contourless colour marks were generally lacking distinctiveness ab initio, as consumers would perceive colours primarily as decorative and not as indications of source. However,  contourless colour marks - as any other marks - had acquired distinctiveness if a majority ("überwiegender Teil") of the relevant public recognized [or relied upon...?] the mark as indicating a single source for the goods or services for which protection was sought. According to the Federal Court of Justice, the many surveys submitted by the applicant failed to prove acquired distinctiveness at the time of filing in 2002, but supported a finding of acquired distinctiveness in 2015, at the time of the judgment.


Since the full reasoning of the BGH decision is not yet published - I am relying on the press release - it is not yet possible to see what convinced the BGH that the Federal Patent Court got it wrong. It seems the assessment of the survey evidence played an important role, which is interesting because the BGH is in principle bound by the fact finding of the lower court.

Quia timet, de minimis and Novartis v Hospira: Mr Justice Arnold speeds through Napp v Dr Reddy pain dispute

The IPKat is ready for a busy end of term
After a generally slow start to 2016 in terms of reported decisions emanating from the Patents Court, things have started to pick up in recent weeks.  Mr Justice Arnold has been particularly busy.  At the end of last month Mr Justice Arnold handed down not one, but two decisions in the Napp v Dr Reddy's and Sandoz dispute (see previous Kat report here).  In the first decision  -  [2016] EWHC 1517  - the judge held that there was no threat to infringe Napp's patent on the basis of the de minimis principle.  In the second decision - [2016] EWHC 1581 (Pat) (not yet on Bailii) -  he granted Napp an injunction pending appeal.

Talented Kat friend Amy Crouch (Simmons & Simmons) brings readers up to speed:

"First Judgment – No Threat to Infringe 

Background

Napp commenced infringement proceedings against both Sandoz and Dr Reddy’s in February 2016 for threatening to infringe its patent by preparing to launch generic buprenorphine transdermal patches. Buprenorphine is an opioid indicated for the treatment of non-malignant pain,  Napp’s buprenorphine transdermal patch, “BuTrans” is its most important product.  At the same time as commencing its actions, Napp applied for a preliminary injunction against Sandoz who had already obtained a marketing authorisation for its product. As a result, Sandoz provided undertakings not to launch pending the first instance decision.  Arnold J ordered an expedited trial for early June 2016. Validity was not challenged by either Defendant.

The Patent

The invention lay in the use of certain penetration-enhancing excipients which are solid at room temperature and were therefore thought to be of limited use in assisting diffusion out of the matrix into the skin. The patent disclosed that on melting and cooling, these excipients formed so called “supercooled melts”, which have a melting point above room temperature, but remain liquid after cooling to room temperature.

It was only necessary to consider claim 1:
“A buprenorphine transdermal delivery device comprising a polymer matrix layer containing buprenorphine or a pharmaceutically acceptable salt thereof, for use in treating pain in humans for a dosing interval of at least 7 days, wherein the transdermal delivery device comprises 10 %-wt buprenorphine base, 10 to 15 %-wt levulinic acid, about 10 %-wt oleyloleate, 55 to 70 %-wt polyacrylate, and 0 to 10 %-wt polyvinylpyrrolidone.”

buprenorphine
Construction

The main issues on construction were (i) whether the percentage values in the claim related to input or output values and (ii) the correct interpretation of the numerical ranges.

Arnold J preferred the Defendants’ arguments on both issues, finding that the skilled person would have understood the claim to mean (i) output values and (ii) values to be expressed in terms of whole numbers applying the conventional rounding approach e.g. to extend “10 %-wt” to ≥9.5 to < 10 .5 % wt. The word "about" should be taken to mean "a small degree of permitted imprecision over and above that implied by the usual rounding convention", although in Arnold J's view the inclusion of this word mean that the claim lacked clarity and he would have been tempted to find such a claim insufficient.

 Infringement - The de minimis principle in quia timet actions

The de minimis principle has been considered in previous patent authorities (Hoechst v BP [1998], Monsanto v Cargill [2007], Napp v Ratiopharm [2009], Lundbeck v Norpharma [2011]). In the present case Arnold J commented that the court was forced, as a matter of practical reality, to draw a line somewhere and referred to a hypothetical scenario in which only 0.01% of products fall within a claim as “precisely the kind of situation covered by the de minimis principle”.

In relation to quia timet actions, it was clear that if what the defendant threatens to do would only involve infringement on a de minimis scale, then that threat does not justify the commencement of proceedings by the patentee (whether to seek an injunction or a financial remedy). However, if there is a clear threat to do acts which fall within the claim sufficiently often that they cannot be discounted as de minimis then that is sufficient to justify bringing quia timet proceedings. In this case (i.e. where any infringement would be on a very small scale – see below), he concluded that even if the level of infringement cannot be discounted as de minimis, an injunction would be “both disproportionate and a barrier to legitimate trade”.

Both Defendants had served confidential PPDs which provided results of testing samples of their products. Uncertainty stemmed from the fact that the manufacturing processes for transdermal products are inherently variable and for this reason, it is not known how representative the tested samples are of future products.

Statistical evidence was put forward by experts by all parties and evaluated by Arnold J on the basis of his findings on construction. In relation to Sandoz’s product, even on Napp’s evidence, both of their figures of “1 in 69 million patches” (which was based on a confidence interval of 50%, which was accepted by Arnold J to be the correct interval for the balance of probabilities standard of proof) and “1 in 25,600 patches” (based on Napp’s argued confidence interval of 95%) would be de minimis and accordingly there was no threat by Sandoz to infringe.

Dr Reddy’s had provided a less detailed PPD but stated that to avoid infringement they would implement a testing regime based on a statistical protocol devised by its expert which would incorporate the Court’s findings as to what proportion of infringing patches amounts to de minimis. The protocol to be used by Dr Reddy’s was dependent upon the Court’s construction of the claims and required a finding of (i) the correct confidence interval and (ii) the threshold for the de minimis principle, which Arnold J found to be no more than 1 in 10,000 products falling within the claim. Arnold J concluded that Dr Reddy’s testing regime was sufficient to ensure its products would not fall within the claim other than to a de minimis extent. Accordingly, there was no threat by Dr Reddy’s to infringe either.

Second Judgment – Injunction Pending Appeal Granted 


The findings of no threat of infringement were dependent upon the findings on construction and permission to appeal was granted on construction alone.

Napp applied for an injunction pending the Court of Appeal decision. Arnold J considered the criteria set down by the Court of Appeal in Novartis v Hospira [2013], but noted that it was of concern that Lord Hoffman’s judgment in the Privy Council case National Commercial Bank Jamaica v Olint [2009] had not been cited. Whilst the Novartis guidelines state that “it will not usually be useful to attempt to form a view” on the prospects of the appeal, Lord Hoffman had stressed in Olint the need to consider “the relative strength of the parties’ cases” on appeal. Whilst this factor troubled Arnold J, and he considered Napp to have a weak case on appeal, based on Novartis this factor could not outweigh others.

The Novartis factors that persuaded Arnold J to grant an injunction in this case where:

The test for a preliminary injunction in life sciences...
i) Length of time before the appeal was likely to be heard:  

Dr Reddy’s solicitors had made enquiries to the effect that the Court of Appeal could, if it granted expedition, hear a one day appeal before the end of July 2016. On this basis, Arnold J decided to only grant an injunction until 16 August 2016. It is of note that, if such an expedited appeal does happen within this timeframe, then these proceedings will have progressed from Claim Form to Court of Appeal judgment in only 6 months!

ii) Balance of hardship to each party. 

Damages would not be an adequate remedy for Napp in respect of either Sandoz or Dr Reddy’s. This is a market where a price war is inevitable which will lead to significant price depression for Napp. Further, Sandoz had already effectively lost its first mover advantage due to the undertakings it had provided (in relation to which the correct remedy was a claim on the cross undertaking in damages).

Overall granting the injunction was the “lesser of two evils” and in such circumstances it is prudent to preserve the status quo. Echoing the Court of Appeal’s additional comments in Novartis, Arnold J provided a further warning to generic manufacturers by including in his reasoning the fact that the
 “Defendants could have avoided the problem if they had cleared the path for their products”.

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