UK inches towards UPC ratification

There was a sigh of relief at the end of November when the UK announced that it would proceed with the ratification process to implement the UPC in spite of Brexit.  This renewed the hope that the UPC will come in to force in 2017 as planned.  Whilst this was good news, what did it actually mean for the timescales and where is the UK currently in its legislative process to ratify the UPC?

In order to look forwards, it may be helpful to take a look back to see what the UK has already done to ratify the UPC.  They were, in fact, fairly advanced in the ratification process before the result of the EU referendum put a spanner in the works.

In May 2014, the UK Parliament passed the Intellectual Property Act 2014.  This Act amended the Patents Act 1977 by inserting new sections 88A and 88B in order to introduce the concept of the UPC into the legislation.  These new sections provided that the Secretary of State may make orders to give effect to the UPC Agreement and that such orders must be presented to both Houses of Parliament (the House of Commons and the House of Lords) for approval before they are passed. The UPC was also designated as an “International Organisation” under UK law which allows it to be granted certain privileges, immunities and exemptions if required.

Following on from this Act, the Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2016 was laid before Parliament in March 2016.  This order makes various amendments to the Patents Act 1977 in order to clarify the difference between a unitary patent and a European patent and applies and disapplies various provisions of the Patents Act 1977 (as appropriate) to unitary patents.  It is worth noting that this order was debated in the Houses of Parliament in March when confidence was still fairly high that the UK would remain in the EU.  Hansard (the record of parliamentary debates) shows that the House of Commons approved it in just 16 minutes and the House of Lords took only 24 minutes!

Since the UK’s announcement that it will continue to ratify the UPC Agreement, it has shown some progress by signing the Protocol on the Privileges and Immunities of the Unified Patent Court on 14 December 2016.  However, in order to implement this Protocol in the UK, it will need to lay a further order before Parliament for approval.  This order is currently being drafted but no draft has been published and there is no news on when it will be laid before Parliament.  I think what we can expect, when the time comes for the parliamentary debate, is that it will definitely not be as brief as it was for the last order.  What should be a fairly straight forward procedural approval may turn into a wider discussion on the UK’s role in the UPC, how it can function once the UK leaves the EU and whether the ratification should continue.

The UK also needs to deposit its instrument of ratification of the UPC Agreement with the General Secretariat of the Council of the European Union in order to formally ratify.  This will be prepared by the Foreign and Commonwealth Office but should be merely a formal step which will be done once the relevant secondary legislation has been passed.

There is still a lot of uncertainty surrounding Brexit, particularly with the ongoing Supreme Court appeal as to whether Parliament should be consulted before Article 50 is triggered.  The judgement is due this month and may give some clarity on the timing for Article 50.  As the UK is progressing with ratification of the UPC, membership is now likely to be one of the points of negotiation on departure from the EU.

Alicia Kim, Associate

Danish designer barred from using own name as trademark

About a year ago the Danish Commercial and Maritime Court gave their decision in a case between Topbrands and the Danish designer Benedikte Utzon. You can read about it here.

In short, the court found that Benedikte Utzon could no longer use her name as a trademark in any commercial activities within jewellery, leather goods and apparel, as Topbrands had bought the trademark rights to the brand Benedikte Utzon after her bankruptcy in 2012.

Benedikte Utzon appealed the case to the Danish Supreme court as she found that there were several untouched issues, and that the case is a matter of principle.

The Supreme Court states in their decision, that the term good marketing practice entails that commercial use of one’s own name must be in a way, that it is not unfair, improper and damaging in relation to the owner of the trademark. Moreover, the Court states, that a person that has used his own name as a trademark, and assigned this trademark to a third party, the principle of good marketing practice entails that he is then prevented from using his own name as a trademark for those types of goods, for which the trademark is registered.

Further, the Court refers to the preparatory works of the legislation, from which it follows that if a business owner has used his own name as a trademark in a way that it to the public appears as a trademark rather than a personal name, and then assigns the trademark to a third party, without any reservations as to the future use of the name, he then precludes himself from using his own name as a trademark for those types of goods as covered by the trademark.

The Supreme Court has now given their decision in the case, and confirms the decision from the Commercial and Maritime Court. Moreover, the court finds that Benedikte Utzon has already infringed Topbrand’s trademark rights and she is ordered to pay 250,000 DKK in damages.

Benedikte has now changed her name to Dicte Utzon, and has pronounced, that she is considering taking the case to the European Court of Human Rights given that she is now barred from using her birth name ever in her work as a designer.

As an IP professional it is always interesting to follow such borderline cases and see where the Supreme Court draws the line, even as in this matter the preparatory works of the law is actually rather clear on this issue. But we now know for sure, that you can wind up in a situation, where you are actually prevented from using our own name. It will be interesting to see the outcome of the case if Benedikte Utzon, now Dicte Utzon decides to take it further.

Maria Dam Jensen, Legal Counsel

South America: New PPH agreements launched

The ever expanding Patent Prosecution Highway (PPH) network keeps getting new additions, and as usual, the Awapatent IP Blog sums up the new expansions and arising possibilities.

The PPH is a system of bilateral agreements allowing the request of accelerated examination at a participating office. The system is based on the search results and a set of claims accepted for grant, in an analogous application, at the other participating office.

Most recently, new possibilities of speeding up and simplifying the examination of patent applications have emerged on the South American continent. Namely, the IP offices of the PROSUR countries have signed mutual PPH agreements. The participating PROSUR countries are Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and Uruguay. The IP office in the last PROSUR country, Suriname, does not participate.

A request for prosecution under the PPH in a PROSUR country may be based on a national work product from the IP office in any other PROSUR country or a PCT work product from one of the IP offices in Brazil and Chile, both acting as PCT authorities.

For Brazil and Ecuador, however, the final entry into force awaits the approval of the respective relevant ministries.

Finally, it is worth mentioning that the Argentinian, Paraguayan and Uruguayan IP offices are the first IP offices in countries not being contracting states of the PCT system to enter in the PPH network.

Troels Peter Rørdam, European Patent Attorney & Certified Danish Patent Agent

The President-elect and Intellectual Property

As election night in the US evolved, the Democratic community slowly started to realise the probability, and later the certainty, that there would be a shift of political parties in the White House.

Trying to assess how this transition of power will affect the world of IP is not an easy task. Policy documents that President-elect Donald Trump released before the election offer little assistance to the person holding the crystal ball. Yet, although it may be difficult to predict what type of IP policies the president-elect will advocate for; like many of his policies it may be easier to predict what he will oppose. In that regard there are two areas where the president-elect’s electioneering rhetoric may offer some insights into his plan for evolving U.S. IP policy during his administration; namely his staunch opposition to legislation supported by his predecessor, President Obama, and his advocacy against foreign nations that he deems to be “ripping off” the American people.

In regard to the first point, there is some evidence to the effect that President-elect Trump could put an end to a renewed push for further patent reform legislations that was supported by his predecessor and the giants of Silicon Valley, and specifically spearheaded by Google. To continue this reasoning we therefore find it necessary to provide a brief background.

The Obama administration set a goal to “increase the quality” of issued patents, which has been eagerly supported by the tech giants. In the eyes of those who supported President Obama’s efforts, by the time he assumed office in January 2009, the U.S. patent system was awash in too many low-quality (i.e., invalid) patents that were being exploited by the so-called “patent trolls” in order to exact ransom-like royalties from companies that rightly feared the costs and uncertainty of U.S. patent litigation. In part an effort to curb such abuses the Leahy-Smith America Invents Act (AIA) was signed into law on September 16, 2011.

Among other things, the AIA made it much easier to challenge the validity of pending and issued patents. For example, the AIA offered additional avenues for third-parties to interfere in prosecution and challenging the validity of issued patents. The AIA specified an extended period for filing third-party submissions, and created new post-grant and inter partes review proceedings to challenge issued patents, without having to file suit in federal court. Further, the amendments to the novelty requirements (35 USC §102) also created more prior art, as it added foreign priority documents as well as public use and public sale outside of the U.S.

From a European practitioners perspective the initial reactions to the changes brought forth by the AIA were almost exclusively positive. The AIA makes the novelty statute much easier to understand, and the changes concerning third party submissions and post grant review further harmonises the US system with the European equivalent.

Much less discussed in Europe was the fact that the combination of the increased ways in which validity can be challenged and this past decade’s bar-raising case law have weakened the position of the patent holder. This of course also affects the value of US patents and thus the benefits of having a US patent.

In addition, President Obama’s selection of Michelle Lee as Director of the USPTO in 2014 – who was a former Deputy General Counsel for Google – did much to further the agenda favoured by the tech giants of Silicon Valley. Ms. Lee put her agenda into effect through both influencing the federal rules being set to implement the provisions of the AIA to make challenging the validity of patents easier and by pushing the USPTO on a path to increase the rigour of the examination process.

Given Mr. Trump’s railings against the recent cosiness between big business and the U.S. federal government and his general distrust of efforts pursued by his predecessor, this could signal that the idea that “increasing patent quality” as the main driver of U.S. patent policy could be coming to an end. Although large scale changes to the U.S. Patent Law are probably not in the near future, there are bills that would have taken Obama-era reforms even further that are likely dead in the water. Most notable are the Innovation Act and the PATENT Act which aimed to increase the requirements on the plaintiff in patent litigation and also shifts the fees to the losing party. The Innovation Act has the support of President Obama and would most probably have been supported by Secretary Clinton.

With Mr. Trump in the White House there is considerable probability that there will be at least a temporary halt in patent reform. Trump will most probably have a different view from that of Obama and Clinton (he is definitely a fan of court proceedings), and also, patent reform is probably very low on his list of priorities.  The main backers of further legislative changes were almost lockstep opposition to Mr. Trump’s candidacy.  Further, one could of course speculate that President-elect Trump’s advocacy for strong property rights in general could translate to strong support for intellectual property rights as well, meaning he would probably oppose further efforts to weaken the value of U.S. IP rights.

Secondly, strong IP protection could be considered one piece in his platform to increase the competitiveness of the US industry.  One of the hallmarks of Mr. Trump’s campaign was his focus on calling out countries, such as China, for what he alleged were unfair practices against the United States. Although not mentioning patents specifically, his campaign website did complain about China’s alleged misappropriation of U.S. trade secrets, stating that he intends to “[u]se every lawful presidential power to remedy trade disputes if China does not stop its illegal activities, including its theft of American trade secrets.”  His campaign website also extolled a recent U.S. International Trade Commission study that included “that improved protection of America’s intellectual property in China would produce more than 2 million more jobs right here in the United States.”

If Mr. Trump does intend to make it more difficult for countries that have a lower threshold of protection for IP rights to make their goods available in the U.S. market, increased support for strong patent rights could be one means for doing so. This is further evidence of his likely opposition of any further changes that would make patent rights harder to enforce and easier to challenge, and may even signal a shift away from the driving focus of patent quality during examination proceedings at the USPTO.

To summarise the speculations above, our best guess is that President-elect Trump’s entry into the White House may create a status quo in patent legislation and may signal a shift away from “patent quality” being the driver of USPTO policy. If that is good or bad probably comes down to which side of the table you are on.

Joe Klinicki, Patent Attorney, Condo Roccia Koptiw &
Joacim Lydén, European Patent Attorney & US Patent Agent, Awapatent

Cautious optimism regarding 2017 UPC implementation

During the meeting of the EU Competitiveness Council on 28 November 2016 in Brussels, the UK Minister of State for Energy and Intellectual Property stated that the UK will proceed with their ratification process in the months to come.

The statement from the UK Minister for State and Intellectual Property Baroness Neville-Rolfe now seemingly paves the way for the UPC (Unified Patent Court) entering into force as soon as the second half of 2017, provided that Germany also ratifies in due course. However, there are still no official statements from either one of these countries when they actually expect to complete their ratification processes.

Voices were raised after the EU referendum on 23 June in favour of the UK ratifying the Agreement before filing the Article 50 declaration that sets in motion the process of leaving the EU, did so in view of the fact that the UPC is not an EU institution, but an international patent court and that the European Court of Justice (CJEU) will not deal with issues of substantive patent law. What will happen after the UK files the Article 50 is very uncertain, and concerns have also been raised that this might negatively influence how patent holders look at the UPC once it is operational. However, the intention of the UK administration appears to be, for as long as they are members of the EU, to play a full and active role in the UPC, according to Baroness Neville-Rolfe. She followed up by stating that “we will seek the best deal possible as we negotiate a new agreement with the European Union”. This statement might also be positive news with regards to European trademark and design rights.

In a statement made on 28 November, the UPC Preparatory Committee welcomes the news from the UK Minister. Since the UK vote to leave, the Preparatory Committee of the UPC has continued their efforts in recruiting judges and preparing the IT system for the entry into force of the UPC. Many countries have also moved forward with their preparations, for instance on 8 November it was announced on the UPC website that the Italian authorities had formally selected the location for the local division to be set up in Milan.

In an interview published on the website juve.de on 22 November, the chair of the UPC Preparatory Committee Alexander Ramsay also stated that the Brexit referendum more or less only posed a “speed bump” on the way to realizing the unitary patent protection and the UPC.

In addition, in a statement published on 29 November the EPO President Benoît Battistelli said:

“This important news from the UK government means that the long-awaited court is soon to be realized. Users, especially SMEs, have been waiting for the creation of a simpler patent system for Europe, and their relief is palpable. The way is now clear for the last few ratifications to take place in the coming months, and the new court to start work soon after. The UPC will provide a single forum for all participating states delivering faster enforcement actions and harmonized judicial decisions.”

The Preparatory Committee further fully acknowledges the uncertainty regarding the possible start of the system in their statement made on 28 November, and that the industry needs time to prepare for the new patent system. They will therefore publish a revised roadmap as soon as possible.

Provided that both UK and Germany ratify during the spring of 2017, businesses should be prepared for the entry into force during the autumn of next year.

Sofia Willquist, Partner – European Patent Attorney