The US Patent and Trademark Office (USPTO) has urged a federal court to uphold its finding that patents cannot cover inventions by artificial intelligence (AI), and dismiss a suit challenging its position.
In August, physicist Stephen Thaler sued the USPTO in a challenge to the office’s rejection of patent applications for inventions created by the “creativity machine” known as Dabus.
The office submitted the 24-page summary motion at the US District Court for the Eastern District of Virginia on February 24, defending its April finding when it confirmed that an AI can’t be named as an inventor on a patent application.
In the summary motion, the USPTO argued that the Patent Act defines an inventor as a person and requested that the court dismiss Thaler’s suit.
Congress’ ‘plain language’ prohibits AI inventor
“In the Patent Act, Congress explicitly defined the term ‘inventor’ to be an ‘individual’, and then in subsequent statutory provisions referred to such an ‘individual’ using personal pronouns,” the filing stated.
It argued that in rejecting the plaintiff’s request for an AI machine to be an “inventor” under the Patent Act, the USPTO was merely applying Congress’ plain language and the Federal Circuit’s construction of the same.
The USPTO further argued that the Supreme Court and Federal Circuit have repeatedly held that such policy assessments have no place in the judicial exercise of statutory construction, and belong instead in the halls of Congress.
“In short, plaintiff seeks to rewrite the Patent Act, something that neither this court nor the USPTO is authorised to do. This court should therefore affirm the USPTO’s underlying petition decision, and enter summary judgment in favour of defendants,” the office said
“In short, plaintiff seeks to rewrite the Patent Act, something that neither this court nor the USPTO is authorised to do.”
USPTO
No legal personality
The USPTO contended that Thaler’s suit should be dismissed because Dabus, as a machine, could not execute the necessary oath or declaration that the Patent Act requires of the inventor because it lacks the “legal personality” to do so.
Thaler’s suit was also faulty because he openly recognised that the EU and the UK had both concluded that their patent laws precluded “the naming of an inventor that is not a natural person”, but had proceeded to argue that the USPTO should conclude differently.
The USPTO again pointed to the explicit statutory language that Congress used to define “inventor” in the Patent Act to conclude that “interpreting ‘inventor’ broadly to encompass machines would contradict the plain meaning of the patent statutes that refer to persons and individuals”.”
It also argued that there was a good reason that Thaler attempted to avoid any searching review of the Patent Act’s plain language in his suit because that language unequivocally leads to the conclusion that only a natural person can be an “inventor” under the Patent Act.
“As such, this court should enter summary judgment for defendants, and deny the identical relief sought by plaintiff,” concluded the USPTO.
USPTO’s stance ‘undesirable’: Thaler
In his suit, Thaler claimed the USPTO’s position was “anti-intellectual property and anti-business”. He added that it put US businesses at an international disadvantage compared to businesses in jurisdictions that will grant patents on AI-generated inventions, and there was a danger that future patent applicants may inaccurately list a person as an inventor.
Thaler stated that the USPTO’s stance means that AI-generated inventions would enter the public domain once disclosed, which he alleged is “undesirable both as a matter of innovation policy and because there is no evidence that Congress intended to prohibit patents on AI-generated inventions”.
“There is no evidence that Congress intended to prohibit patents on AI-generated inventions.”
Steven Thaler, physicist
Campaign to rewrite IP law
In 2019, a team at the University of Surrey in the UK filed patent applications in multiple jurisdictions listing an AI application, Dabus, as the sole inventor of a plastic food container and of a light beacon.
Ryan Abbott, professor of law and health sciences at the University of Surrey who led the team, told WIPR at the time that the goal of the filings was to “raise awareness and effect change” in patent law.
The campaign effectively proposes rewriting IP law, as no AI application has to date been recognised anywhere as the inventor on a granted patent.
According to the team behind Dabus, the ban on AI-inventors is out of step with a rapidly changing economy in which machines and AI are becoming more powerful, and more important in driving innovation.
In June 2020, the team appealed an adverse decision of the European Patent Office (EPO). The EPO rejected the application in December 2019, commenting that under the European Patent Convention (EPC), only human beings or “natural persons” may be considered inventors.
In July 2020, an LSPN Connect session explored the complex questions AI poses for the IP sector, in a discussion with Abbott and other AI experts.
Image: Shutterstock.com / maxuser
The US Olympic & Paralympic Committee (USOPC) has sued Puma for trademark infringement, alleging the sportswear company has ‘declared war’ on Olympic trademarks.
The USOPC filed a complaint with the US District Court of Colorado on February 23, claiming that Puma is causing confusion among consumers surrounding sponsorship for the delayed Tokyo 2020 Olympic Games.
In March 2020, Puma filed a trademark application (US number 88/846/322) for the mark ‘Puma Tokyo 2021’, which covered apparel, athletic equipment, and bags.
Upon learning about this, the USOPC contacted Puma asking the company to withdraw its application but Puma refused. It later filed several other trademarks including ‘Puma Beijing 2022’ and ‘Puma Tokyo 2022’ and also initiated trademark cancellations against USOPC trademarks.
“Puma has declared war on Olympic Games marks, tried to register them for itself, and petitioned to cancel Olympic Games marks registrations. Puma’s declaration of war on the marks is a thinly veiled attempt to benefit from association with the Olympics Games without becoming a ‘The Olympic Partner’ (TOP) Sponsor,” the complaint said.
“Puma’s declaration of war on the marks is a thinly veiled attempt to benefit from association with the Olympics Games without becoming a ‘The Olympic Partner’ Sponsor.”
The US Olympic & Paralympic Committee
The USOPC has requested that the use of infringing marks be prohibited, that Puma’s cancellation proceedings be terminated, and that the court upholds its ‘Tokyo 2020’ and ‘Beijing 2022’ trademarks.
Puma has applied for similar marks relating to key postponed sporting events. In April last year, Puma applied for the mark ‘Puma Euro 2021’ following the postponement of the Euro 2020 football championship.
In 1996’s Atlanta Olympic Games, which was officially sponsored by Nike, Puma faced controversy for alleged ambush marketing, after sprinter Linford Christie appeared at a news conference wearing contact lenses bearing the ‘Puma’ mark.
Image: Shutterstock.com / 2p2play
Amazon and Italian luxury fashion brand Salvatore Ferragamo have filed joint lawsuits against four individuals and three Chinese entities accusing them of counterfeiting Ferragamo products.
The companies outlined in the lawsuits that the defendants had conspired to use Ferragamo’s registered trademarks without authorisation to deceive customers.
The first case, Case 2:21-cv-00170, claims that two individuals Li Yong and Wu Pianpian, as well as two Chinese entities, sold belts featuring registered Ferragamo trademarks throughout 2019/2020.
The second suit, Case 2:21-cv-00171, accuses Zhao Hao Jun and Zhang Lianfa and a Chinese entity also of selling belts featuring the infringing Ferragamo logo.
Both suits were filed with the United States District Court of Washington on February 11, 2021.
“We do not allow counterfeit products in our store, and we have made it crystal clear that we take aggressive action to hold accountable bad actors who attempt to evade our proactive protections,” said Dharmesh Mehta, vice president, customer trust and partner support, Amazon.
“Through our Counterfeit Crimes Unit, we are working closely with luxury and cosmetics brands, small businesses, and brands with global name recognition. We will continue to fight to protect intellectual property from small family-owned businesses through Fortune 500 companies.”
“We will continue to fight to protect intellectual property from small family-owned businesses through Fortune 500 companies.”
Dharmesh Mehta, Amazon
When Amazon was made aware of the counterfeit products, it made several test purchases to compare with genuine Ferragamo wares.
After determining that the products featured Ferragamo branding, Amazon terminated both seller accounts and is now seeking damages for the infringement and sale. But given that plaintiffs claim that the defendants have used “fake names and contact information, and unregistered businesses to conduct their activities”, the true identity of the defendants is unknown.
“The joint action with Amazon underlines how the protection of IP is a priority for Ferragamo and how the company is pursuing the fight against counterfeiting with full awareness and resolution,” said Micaela le Divelec Lemmi, CEO of Salvatore Ferragamo.
Last year, Amazon launched its counterfeit crimes unit and has since filed several other joint lawsuits alongside luxury brands including Valentino, cosmetics brand KF Beauty, and family travel accessory brand JL Childress.
Amazon’s marketplace has been accused of posing a significant threat to IP owners, according to the latest Notorious Markets report. The annual report said that e-commerce platforms, including Amazon, had to do more to protect brand owners and consumers.
Image: Shutterstock.com / Sorbis
An Israeli court has ordered instant messaging service Telegram to block the distribution of copyrighted media on its platform, following a lawsuit from anti-piracy group ZIRA.
ZIRA took Telegram to court last year claiming that the company was not doing enough to combat piracy on its platform.
The group was joined by fellow plaintiffs and rights owners United King Films, YES, HOT and Reshet. They claimed that Telegram had “fallen short of expectations” in removing copyrighted material from its platform.
Telegram failed to file a statement of defence in early February, leading the Central District Court to rule in favour of the plaintiffs. The ruling orders Telegram to stop hosting copyrighted materials, and to pay NIS 100,000 ($30,700) in compensation and NIS 60,000 to cover legal costs.
The order has prompted Telegram to move quickly in deleting the copyrighted material, according to Eran Presenti, partner at M Firon & Co, one of the lawyers representing ZIRA.
“We are not giving up now, we are putting as much pressure as possible (on Telegram) to ensure they follow the judgment,” Presenti told WIPR. “Hopefully, this will deter the infringing groups from continuing to post copyrighted content in the future.”
“As far as I know, this is the first time in Israel that a messaging service has been sued for copyright infringement,” Presenti added.
“As far as I know, this is the first time in Israel that a messaging service has been sued for copyright infringement.”
Eran Presenti, M Firon & Co
Call and response
Prior to the lawsuit, ZIRA had contacted Telegram making it aware of several prominent groups on the platform sharing copyrighted materials and filing US Digital Millennium Copyright Act (DMCA) notices.
Telegram responded to the request, saying: “We agree to block the channels or force the administrators to remove the reported content immediately,” according to a report from local newspaper Calcalist.
While the company removed some of the infringing groups hosting the content, new groups surfaced fast and failed to delete copies of the media off their own servers.
This is not the first time Telegram has faced legal action. In June 2020, the Delhi High Court ordered Telegram to hand over the identity of users sharing e-newspapers on the platform.
Italian watchdog The Federation of Newspaper Publishers asked communications regulator Agcom to suspend Telegram due to its circulation of newspapers.
Telegram was founded by Russian brothers Nikolai and Pavel Durov in 2013. The freeware messaging service offers heightened security and privacy features compared to its competitors such as WhatsApp and Facebook Messenger.
Image: Shutterstock.com / PixieMe
Exercise bike manufacturer Peloton has filed a petition to cancel a rival’s trademark of ‘Spinning’, claiming it is abusively enforcing the mark.
Peloton claimed that rival fitness company Mad Dogg Athletics is “abusively enforcing” its trademark rights of ‘Spinning’ and ‘Spin’ across the indoor cycling industry in a petition filed to the US Patent and Trademark Office’s Trademark Trial and Appeal Board (USPTO) on February 16.
The petition argued that the terms are generic and that Mad Dogg’s lawyers have been ceaseless in their campaign to chase down infringers. It cites John Baudhuin, co-founder of Mad Dogg, admitting to spending “hundreds of thousands of dollars a year” on litigation.
“For many years, countless fitness industry participants, including Peloton, have received baseless cease-and-desist letters from Mad Dogg and its lawyers threatening expensive litigation if all uses of the terms Spin and Spinning are not halted,” said the filing.
“Enough is enough. It is time to put a stop to Mad Dogg’s tactic of profiting by threatening competitors, marketplaces and even journalists with enforcement of generic trademarks.”
“It is time to put a stop to Mad Dogg’s tactic of profiting by threatening competitors, marketplaces and even journalists with enforcement of generic trademarks.”
Peloton
Mad Dogg lawsuit
In December 2020, Mad Dogg launched a lawsuit against Peloton, claiming infringement on two of its patents covering “core features of a stationary exercise bike”.
The lawsuit alleges that Peloton’s ‘Bike’ and ‘Bike+’ infringe on Mad Dogg’s US patents, numbers 9,694,240 and 10,137,328.
In the related press release, Baudhuin said: “We revolutionised the indoor cycling category in 2008 with the eSpinner bike.
“Peloton has built its business by freeriding on Mad Dogg’s patent-protected innovations. Peloton cannot compete in the category that Mad Dogg created by trampling on Mad Dogg’s rights.”
Image: Shutterstock.com / Michael Vi
The US continues to lead in global innovation with the country’s organisations and firms accounting for the bulk worldwide patenting activity, according to a new report released by IP services company, Clarivate.
In the 10th edition of the “Top 100 Global Innovators 2021” report, released on February 23, the US has retained its top spot with 42 organisations listed. The country is trailed by Japan with 29 listed organisations.
The annual report identifies companies at the forefront of the global innovation landscape and this year, the Top 100 companies come from three continents and 14 countries/regions.
Arm makes the list
The survey is based on data derived from Clarivate’s patent solutions: Derwent World Patents Index (DWPI) and Derwent Patent Citations Index (DPCI) and it uses four factors: volume of patents, influence, success, and globalisation.
The report stated that the 29 companies that have remained on the Top 100 list for the past ten years display significant growth well above both market averages and the companies that have exited the list—even as patent activity remains comparable. This study pointed to the influence and novelty of these companies’ patented research.
It also recorded the first entry of a UK-based company to the Top 100 with the presence of chipmaker Arm, in the wake of its acquisition by US company, Nvidia in 2020.
Jeff Roy, president of the IP group at Clarivate, said: “We congratulate this year’s Top 100 companies, particularly the 29 all-time recipients, that have consistently raised the bar of innovation excellence.”
The electronics and semiconductor sectors are the most prominent contributors to the Top 100, with 21 and 12 companies respectively. These sectors also accounted for 21% and 12% of worldwide patenting activity.
“We congratulate this year’s Top 100 companies, particularly the 29 all-time recipients, that have consistently raised the bar of innovation excellence.”
Jeff Roy, Clarivate
COVID-19 effect
Amid the COVID-19 pandemic, the medical, biotech and pharma industries have increased their weight in the Top 100 in this year’s report, with medical and biotech companies comprising 4% and pharma companies 6% of this year’s listed companies.
Biotech Roche has emerged as the sole company from these sectors to have made the Top 100 list for ten consecutive years.
This year, nine organisations are first-time entrants to the list, including BorgWarner, ASUS, Bose, Kinpo, China Academy of Telecommunications Technology, Arm, KLA, Qorvo, and SK Telecom.
According to the report, the importance of innovation in the automotive sector is underscored by the presence of BorgWarner and Yazaki—both major suppliers rather than original equipment manufacturers.
This year the report recorded two fewer entries from France and three fewer from Japan.
According to the report, 28 out of 29 companies that have consistently featured on the list on average returned almost 2.5 times more growth over a six-year-period since October 2014. This is a compounded growth rate of 16% per year, compared to just 9% for the Dow Jones Industrial Average or 10% for the S&P 500, according to the report.
Not only did their market capitalisation over a six-year period outperform two major stock market indices, compared with companies that exited the Top 100 Global Innovators in 2013/2014, but they also opened up a valuation gap of $57 billion per company by October 2020, said the report.
Image: Shutterstock.com / cono0430
In a win for author Stephen King, a US federal appeals court upheld an earlier ruling that a character in his “Dark Tower” novels did not copy traits of a protagonist in a comic book series.
The US Court of Appeals for the Eleventh Circuit handed down the decision on February 23.
In doing so, it affirmed an earlier decision by Judge Harvey Schlesinger in 2019, who dismissed the lawsuit filed against the horror novelist by Benjamin DuBay at the US Middle District Court for the District of Florida.
In 2017, DuBay sued King and “The Dark Tower” publisher Simon & Schuster for allegedly ripping off The Rook, the titular character of a comic book series created by DuBay’s uncle in 1976.
In the suit, Dubay also named Marvel Entertainment, which licensed a series of graphic novels based on “The Dark Tower”, and Sony Pictures Entertainment, which distributed the 2017 “The Dark Tower” movie.
During the legal proceedings, the court heard how The Rook, also named Restin Dane, is a rich inventor with the power to time travel and thwart evil.
According to DuBay, there were “substantial” similarities between this and King’s time-travelling character, Roland Deschain. The characters are both gunslingers with a strong affinity with birds, added DuBay.
However, King countered that he had created many aspects of the Deschain character before 1977 and had begun this development as far back as 1970. He filed for a summary judgment to dismiss the case.
While DuBay conceded that King’s manuscript for “The Dark Tower” may have predated The Rook’s publication, he argued that the author subsequently adapted the character so it became more comparative to The Rook.
“These stories are surrounded by different stories and context, thereby rendering any similarities superficial.”
US Court of Appeals for the Eleventh Circuit
‘Distinctive traits’
However, in 2019, the court found that there were just “basic similarities” between Deschain and The Rook, centring around their profiles as “adventure-seeking protagonists”. It further held that DuBay had focused on “banal elements” for the basis of his arguments and had ignored the characters’ “distinctive traits”.
Schlesinger found that King’s character was an anti-hero with a tendency to make “ethically ambiguous” choices, who lives in a dystopian world and kills in cold blood.
By contrast, he decided that The Rook is “upbeat and motivated by a desire to correct history and make things better”.
DuBay appealed the decision but the Eleventh Circuit found that “these stories are surrounded by different stories and context, thereby rendering any similarities superficial” and that the district court did not err by granting King summary judgment.
Image: Shutterstock.com / Eyesonmilan
Wells Fargo has reached a settlement in a pair of lawsuits brought by the US Automobile Association (USAA), after two juries found the bank liable for patent infringement.
USAA filed two separate lawsuits against Wells Fargo at the US District Court for the Eastern District of Texas for infringing patents covering mobile deposit technologies.
In both cases, juries at the Texas court found Wells Fargo liable to have USAA’s IP, and the bank was found to be liable to pay a total of $300 million.
Documents filed at the court reveal that the bank and USAA have agreed to settle both cases, with the terms of the agreements undisclosed. The parties have asked the court to stay the case for 60 days so they can finalise the settlement.
The latest verdict in the case came in January 2020, when Wells Fargo was found to have wilfully infringed two USAA patents covering technologies related to depositing cheques remotely via mobile phones.
“It is improper for Wells Fargo to use, without permission, patented technologies that USAA has spent immense resources to invent, develop, implement, and perfect.”
US Automobile Association
“USAA recognises that the advent of mobile check deposit has revolutionised the consumer banking experience, with considerable benefits for both banks and customers. But it is improper for Wells Fargo to use, without permission, patented technologies that USAA has spent immense resources to invent, develop, implement, and perfect,” said the first USAA claim, filed in 2018.
Wells Fargo has maintained the position that it has not infringed USAA’s IP, but has so far been unsuccessful in persuading the court. USAA has also won victories at the Patent Trial and Appeal Board, which has either upheld the validity of its patents or refused to grant review when requested by Wells Fargo.
Image: Shutterstock.com / PixieMe
A new draft bill from India’s Union Finance Minister proposes the closure of the country’s Intellectual Property Appellate Board (IPAB).
As first reported by SpicyIP, The Tribunal Reforms (Rationalisation and Conditions of Service) Bill 2021, proposed by Nirmala Sitharaman and printed on February 12, suggests the abolition of the board and the transfer of its responsibilities to the commercial and high courts.
“With a view to streamline tribunals, the Tribunals Reforms Bill, 2021 is proposed to be enacted to abolish certain tribunals and authorities and to provide a mechanism for filing appeals directly to the commercial court or the High Court, as the case may be,” the bill reads.
The reasons for the abolition of IPAB include the board having “not led to a faster justice delivery … at a considerable expense to the exchequer,” and to “reduce the burden on the public exchequer, but also address the issue of shortage of supporting staff of tribunals and infrastructure.”
The draft bill also seeks the closure of the Appellate Tribunal, Airport Appellate Tribunal, the Plant Varieties Appellate Tribunal and the Authority for Advance Rulings.
“The chairman and members of such tribunals shall cease to hold office and they shall be entitled to claim compensation not exceeding three months’ pay and allowances for the premature termination of term of their office or of any contract of service,” according to the bill.
“The chairman and members of such tribunals shall cease to hold office.”
The Tribunal Reforms (Rationalisation and Conditions of Service) Bill 2021
Missed deadlines
This notice came just a few hours after the Supreme Court dismissed an application seeking a further extension to seeking a new IPAB chairperson, according to SpicyIP.
A prior extension to the deadline had been granted in 2017, giving the board until September 2019 to appoint another chairperson.
The application for a further extension was filed by the International Association for Protection of Intellectual Property (AIPPI).
“In view of the above conclusions, this court holds that the applicant cannot be granted any relief. The application is accordingly dismissed; there shall, however, be no order on costs,” the judgment concluded.
Trouble at the IPAB
This could mark the end for the troubled board. Since it was established in 2003 it has not appointed key members, resulting in more than 4,000 pending cases.
“Unfortunately, from its inception, the board had to struggle to create the necessary infrastructure and appoint a technical member and chairman in its 15-plus years of existence. As a result, cases continue to pile up,” RNA founder and managing partner Ranjan Narula wrote in an article for WIPR.
In August last year, a petition was approved by the India controller general office to abolish the IPAB.
Image: Shutterstock.com / PhotographerIncognito
Burberry has secured a preliminary injunction against Shanghai-based Xinboli Trading, the owner of the Baneberry brand, in a Chinese court after it accused the company of trademark infringement.
The Suzhou Intermediate People’s Court confirmed that it had awarded a preliminary injunction to the British fashion brand against the Chinese company on February 19, in a development first reported by The National Law Review.
While permanent injunctions are common in China in IP infringement cases, preliminary injunctions are much rarer, although increasing.
Xinboli has opened 40 physical stores across China under the brand name Baneberry over the past year and a half and succeeded in gaining two registrations for the mark in December 2009 and August 2011.
‘Malicious duplication and imitation’
In handing down its decision, the court stated that the trademark ‘Burberry’ and its associated logo had been known to consumers in the Chinese market before the registration of the two disputed trademarks.
“Although the alleged infringing marks ‘Baneberry’ and logo are also registered trademarks, the alleged infringement in this case may be identified as malicious duplication and imitation of the well-known trademarks involved, and may constitute trademark infringement,” it said.
The court further found that Xinboli had likely infringed when it promoted its Baneberry brand as having “originated in Jermyn Street, London England”, the same street where the Burberry brand was founded, and when it marketed the product’s British lattice pattern.
“The above behaviours are also likely to be deemed to constitute unfair competition,” said the court.
During the legal proceedings, Burberry cited evidence showing that the alleged infringing trademark displayed the same special font as the Burberry brand, resulting in consumer confusion.
“Based on the possibility of infringement of the accused act and the above-mentioned situation, the injunction is of real urgency.”
Burberry
According to the court, the injunction was urgent because Baneberry and Burberry sell in similar sales channels, such as shopping malls and outlets in cities such Shanghai, Nanjing, and Hangzhou as well as online channels.
Injunction is of ‘real urgency’
The court found that Xinboli’s actions had lowered Burberry’s market share in China, by weakening the distinctiveness and recognisability of its well-known trademarks. “Based on the possibility of infringement of the accused act and the above-mentioned situation, the injunction is of real urgency,” it said.
It further held that the necessity of the injunction outweighed the disadvantages, and noted that after a century of “intensive cultivation”, the Burberry brand had gained a high reputation, its “rights status is stable”, and its trademarks “have long been recognised”.
“Based on the facts, there is likely to be a finding of infringement. The possible damage to the defendant caused by the injunction is controllable. Failure to issue an injunction may cause irreparable damage to the plaintiff and cause a lot of confusion and misunderstanding among consumers,” said the court.
The court also contended that the injunction would safeguard the public interest, and held that if the alleged infringement were allowed to continue, it would easily cause consumers to misidentify and wrongly purchase products.
Burberry also cited evidence that the alleged infringement had triggered a large number of consumer complaints, which prompted the court to state that an injunction was required to maintain the rights and interests of consumers.
The trial is still under way and a final ruling has yet to be delivered.
Image: Shutterstock.com / shezimanezi
The Biden administration has signalled it may be tougher on antitrust, after the Department of Justice (DoJ) and the US Federal Trade Commission (FTC) tightened the rules on mergers and acquisitions.
The agencies have suspended the early termination of merger reviews and cut the threshold for merger notifications, actions that may have significant implications for IP.
In an announcement on February 4, the FTC confirmed the suspension would be in force until both agencies were able to review the processes and procedures used to grant early termination to filings made under the Hart-Scott-Rodino (HSR) Act.
Under the HSR Act, companies file a pre-merger notification for an acquisition if its value meets a set threshold, allowing the agencies to identify and challenge transactions that may contravene antitrust law.
During the preliminary review, the parties must wait 30 days (15 days in the case of a cash tender or bankruptcy transaction) before closing their deal.
Based on what the agency finds, it can opt to terminate the waiting period and allow the parties to complete their transaction, known as an “early termination”.
A day later, on February 5, the FTC announced that it was reducing the monetary limit for merger notifications under the HSR for only the second time ever.
For 2021, the size-of-transaction threshold for reporting proposed mergers and acquisitions under section 7A of the Clayton Act will adjust from $94 million to $92 million. HSR reporting thresholds last dipped in 2010, following the US economy’s contraction in 2009.
“US antitrust law enforcement against powerful firms has lagged efforts in other developed countries.”
Amy Klobuchar, Senator
New antitrust bill
The developments coincide with Senator Amy Klobuchar’s introduction of a wide-ranging bill, Competition and Antitrust Law Enforcement Reform Act, which aims to strengthen antitrust enforcement and laws.
“US antitrust law enforcement against powerful firms has lagged efforts in other developed countries, particularly when it comes to enforcement against the dominant digital platforms and other large corporations,” said Klobucher.
According to DJ Healey, a senior principal at Fish & Richardson, these developments will have “far-reaching implications” for the world of IP, given that HSR reporting is required before the sale or exclusive licensing of patents.
She said: “The Biden administration is going to be tougher on antitrust issues and Congress is going to crack down as well. There is a feeling that big corporations and businesses have a need for more regulation. The FTC and DoJ’s elimination of early termination of HSR filings is a huge step because that has been there for a long time. That sends a strong message.”
The agency’s unusual move in cutting the threshold for the monitoring of mergers also heralds a stronger antitrust stance, noted Healey.
‘Unprecedented’ number of HSR filings
The FTC said the move to suspend reviews was prompted by a big increase in the volume of HSR filings for the start of a fiscal year. According to the agency, the number of HSR transactions had soared to 210 in January this year, compared with 162 in the same month last year.
“We, as an agency and a country, are in unprecedented times, and our obligation is to be responsive to these circumstances, in this case by temporarily suspending early termination,” said Rebecca Kelly Slaughter, acting chair of the FTC.
“The law provides 30 days for the agencies to review the competitive implications of transactions. Given the confluence of an historically unprecedented volume of filings during a leadership transition amid a pandemic, we will presume we need those 30 days to ensure we are doing right by competition and consumers.”
Richard Powers, deputy assistant attorney general and senior supervisory official of the DoJ’s antitrust division, said his department supported the decision during the “challenging” transition period.
“We, as an agency and a country, are in unprecedented times.”
Rebecca Kelly Slaughter, Federal Trade Commission
‘No sufficient rationale’
The decision to suspend early termination reviews was met with criticism by Donald Trump appointees, FTC commissioners Noah Joshua Phillips and Christine Wilson.
In a statement, they said: “At this time, we see no rationale sufficient to justify suspending all grants of early terminations. In 45 years of administering the HSR Act, the agencies have done so only when a crisis made them unable to discharge their duties.”
They further argued that the move was unwarranted and could have adverse economic consequences. “We did not suspend early termination in September 2001, after the nation was attacked; or in November of that year, when filings reached 451 in a month. Nor was early termination suspended during the financial crisis of 2008,” they noted.
“For these reasons, we view the proffered justifications for suspending early termination as unpersuasive. We are concerned that freezing grants of early termination will delay the consummation of competitively innocuous transactions. Particularly during a time of economic difficulty, impeding the transfer of assets could have knock-on effects that harm employees, small businesses, and financially imperilled firms,” they added.
Image: Shutterstock.com / Nuno21
Coca-Cola will withhold a nonrefundable 30% of fees from law firms that fail to meet its new diversity requirements, as it criticised the legal sector for not viewing diversity and inclusion (D&I) as a business imperative.
Senior vice-president and global general counsel at the beverages company, Bradley Gayton, outlined the new measures in a letter issued on January 28. He told US law firms he was mandating the unprecedented move for the legal sector with “a heavy heart”.
“For decades, our profession has had discussions about why diversity is important. We have developed score cards, held summits, established committees and written action plans,” he wrote.
But he added that these efforts had failed to deliver the expected results. “I’m reminded of this by the alarming number of new partner headshots that continue to be proudly published with an obvious lack of diversity and when I read that black equity partners will not reach parity with the black US population until 2391,” wrote Gayton.
The letter went on to outline the company’s revised diversity guidelines for its external counsel.
Non-refundable 30% reduction
For every legal matter, at least 30% of each of the billed associate and partner time must be attributable to attorneys from diverse backgrounds, and at least half of them must be black attorneys.
If law firms fail to meet this commitment over two quarterly reviews, Coca-Cola will impose a non-refundable 30% reduction in owed fees payable for future cases until the firm has achieved the set requirements.
Gayton criticised the legal sector for being “too quick to celebrate stagnant progress and reward intention”.
“In the grand scheme of things, the issue of the diversity of our profession is not a complex problem. If we approach this like any other business imperative, we would allocate capital and invest in aspects of our business that move us forward to achieve our goal and grow profitably,” he wrote.
“We will no longer celebrate good intentions of highly unproductive efforts that haven’t and aren’t likely to produce better diverse staffing.”
Bradley Gayton, Coca-Cola
Demanding results
“We will no longer celebrate good intentions of highly unproductive efforts that haven’t and aren’t likely to produce better diverse staffing. Quite simply, we are no longer interested in discussing motivations, programmes, or excuses for little to no progress. It’s the results that we are demanding and will measure going forward,” added Gayton.
According to the letter, Coca-Cola will select a panel of preferred firms 18 months following the issuance of the revised guidelines. “Meeting the commitments above will be a significant factor in determining your firm’s inclusion and ongoing status on the panel,” Gayton stated.
While the above actions will be initially applied to US firms, Coca-Cola plans to roll out the initiative across its global organisation.
Coca-Cola is the latest company to use its buying power to demand greater D&I from the legal profession.
According to a report in The Law Society Gazette, tech company HP said in 2017 that it would withhold up to 10% of costs from law firms if they failed to meet its minimum diverse staffing requirements, prompting 170 US-based GCs to emulate this move.
In the UK, telecoms company BT confirmed that it would offer guaranteed panel renewal for the law firms with the best D&I record.
Image: Shutterstock.com / BORIMAT PRAOKAEW
Amazon has secured a victory at the UK Intellectual Property Enterprise Court (IPEC), which has dismissed a trademark infringement case against the e-commerce retailer. The decision was handed down on January 27.
Lifestyle Equities, the owner of Beverly Hills Polo Club (BHPC), claimed that Amazon has infringed its trademark rights by allowing its branded goods to be listed on its websites in the UK and EU.
The court heard that this was “not a normal case of trademark infringement” as the dispute did not centre on issues of likelihood of confusion or similarity, but rather on the split in the ownership of the trademark rights between the US and the UK/EU.
According to Lifestyle Equities, BHPC goods that have been lawfully manufactured, marketed and sold in the US with the consent of the rights owner are being marketed and sold by Amazon in the UK and EU.
Lifestyle Equities held that this is a form of “counterfeiting”.
Amazon held that the case centred on preventing any visibility of BHPC goods to consumers in the UK/EU and Eli Haddad, the managing director of Lifestyle Equities, admitted that that is what he wanted to achieve.
The court heard that in 2008, there was a split between Haddad and his two brothers: the latter have, since then, through their company called BHPC Associates, owned the BHPC brand and corresponding trademark rights in the US.
The trademarks protect a wide variety of goods, but of particular relevance, they cover clothing, luggage, watches and perfumery.
That situation gave rise to the dispute with goods lawfully listed on amazon.com with the authorisation or licence of Haddad’s brothers, while Haddad wanted to consumers from seeing, in particular, the price at which BHPC branded goods are being sold in the US.
“Not a normal case of trademark infringement.”
Lifestyle Equities
‘Amazon: case was ‘exaggerated’
Amazon conceded the problems that arose from such a split in the ownership of trademark rights but said that the case had been exaggerated.
The company added that the restrictions put in place to protect IP rights had been effective in preventing any sales of BHPC goods from the amazon.com website to the UK/EU.
It held that historical sales of BHPC goods from amazon.com to consumers in the UK/EU had been tiny and that the action was wholly disproportionate.
Justice Michael Green said: “The insistence of the claimants to describe this case as being about ‘counterfeiting’ is unhelpful and in my view obscures the real issues. These are not ‘fake’ or ‘counterfeit’ goods in any normal sense of the word as they have been manufactured and put on sale in the US with the consent of the US rights holder.”
He continued: “Describing such goods as ‘counterfeit’ seems to me to be purely for effect and pejorative, and does not assist in analysing whether the listing of lawfully branded BHPC goods on amazon.com infringes the claimants’ trademark rights in the UK/EU, even if such consumers are unable to purchase those goods from the amazon.com website.”
Justice Green found that the fact that a website is accessible from anywhere in the world, and may attract occasional interest from consumers there when this is not intended, should not give rise to any form of liability.”
According to Amazon, its site amazon.com is targeted only at US consumers and that the UK and EU countries all have their own targeted Amazon website.
“The fact that Amazon provided Amazon Global Store, whereby listings on amazon.com were cross-listed onto amazon.co.uk or amazon.de, shows that amazon.com itself is not targeted at UK or German consumers,” the e-commerce retailer argued.
“Describing such goods as ‘counterfeit’ seems to me to be purely for effect and pejorative.”
Justice Michael Green, UK Intellectual Property Enterprise Court
Amazon.com ‘not targeted at UK/EU consumer’
Justice Green said: “In my judgment it is plain that both amazon.com and the BHPC listings on it are not targeted at the UK/EU consumer. Such a consumer knows full well that they are viewing or shopping on the Amazon website that is primarily directed at US consumers.”
He said that the tension between the territoriality of trademark rights and the global nature of the internet is something that businesses and brands have to live with.
“Where there is the split ownership of the brand as in this case, it is not possible or justified to split the accessibility of information on the internet and deprive consumers of information to which they are otherwise entitled,” he said.
He rejected the claims alleged infringements based on listings on amazon.com of BHPC products. He pointed out that historic sales were so small means that any damages suffered by the claimants directly as a result of such sales would be so small as to be almost de minimis.
He added that Amazon could only be liable for importing the goods if it intended to put the goods into free circulation in the EU. “There was no such intention on the part of any of the defendants as their only intention was to fulfil and deliver the order made by a private consumer in the UK/EU,” said Justice Green.
Justice Green said that he found Lifestyle Equities allegations of joint liability confusing. This was because the claimant’s case conflated the alleged joint liability between the various Amazon entities involved and alleged joint liability with outsiders such as the third-party sellers, shippers and customers.
He said: “I can see no basis whatsoever for either the shippers or the customers (who act in a purely private capacity) being liable for trademark infringement in relation to BHPC products listed on amazon.com or sold from the US.”
He found that the claimants have not sued the correct entity in relation to their allegations of targeting and that “it is not good enough just to point the finger at the ultimate holding company and allege that it must have been involved in some way”.
Justice Green said: “I consider that Amazon responded reasonably and responsibly after the unusual and difficult issue of the split trademark rights in relation to BHPC goods was brought to its attention.”
He found that the restrictions that Amazon put in place, first in relation to Amazon Global Store in 2018 and then in relation to amazon.com in 2019 had removed any possibility of infringements occurring.
Image: Shutterstock.com / Cineberg
An attorney for the US International Trade Commission (ITC) has recommended that the Commission finds Philip Morris International (PMI) to have infringed British American Tobacco’s (BAT) patents, which would likely lead to PMI’s IQOS tobacco heating products being excluded from the US market as early as November 2021.
Administrative Law Judge Clark Cheney heard the dispute at the ITC, which began on January 25.
The trial, which is the latest development in the ongoing IP spat between US multinational tobacco company PMI and British tobacco manufacturer BAT, is expected to conclude next week, as reported by Bloomberg.
A BAT spokesperson told WIPR: “We are confident in our position that the IQOS products infringe our patents and the ITC should issue an exclusion order blocking importation of IQOS products into the US.”
PMI’s IQOS is an alternative to smoking cigarettes. The tobacco is heated, instead of burned, by specially designed heated tobacco units. The units heat the tobacco just enough to release a nicotine tobacco vapour without burning the tobacco. BAT has a similar tobacco heating product, called Glo.
However, PMI’s IQOS is the only ‘heat-not-burn’ product authorised for sale in the US. Last year, the US Food and Drug Administration (FDA) gave PMI permission to market IQOS as a product which reduces consumer exposure to the harmful chemicals found in combustible cigarettes.
In April 2020 RJ Reynolds Tobacco Company, which is owned by BAT, filed a complaint at the ITC.
The complaint accused PMI and Altria, which markets PMI’s IQOS product in the US, of infringing three US patents covering tobacco heating technology (US patent numbers 9,839,238; 9,901,123; and 9,930,915).
The ITC confirmed it would investigate in May 2020. BAT asked the Commission to issue a limited exclusion order and a cease-and-desist order, preventing the import of PMI’s IQOS products to the US.
In response, PMI claimed that these orders would have “deleterious effects on the public interest” because they would deprive 34.2 million American smokers of access to IQOS.
“We are confident in our position that the IQOS products infringe our patents.”
British American Tobacco
PMI referred to the FDA’s plan to help smokers quit combustible tobacco, of which the availability of a wide range of less harmful alternatives is a key part. PMI said that denying access to IQOS to those who had already switched to it would drive people back to smoking combustible cigarettes, which is not in the public interest.
So far in the trial, Sarah Sladic, investigative attorney for the ITC, has recommended that the Commission finds PMI and Altria to have infringed two of the asserted patents. The two patents cover a heater that creates an aerosol.
Sladic has proposed that the Commission finds no infringement of the third asserted patent, which covers the control body.
PMI had claimed that even if it is found to have infringed BAT’s patents, IQOS is important in the fight to reduce smoking and so the IQOS products should not be excluded from the US market.
However, Sladic said it would be exceptional for the ITC not to order an import ban after finding there to have been patent infringement, and that no such exception should be made here.
Cheney is not obliged to find in favour of Sladic’s recommendations.
BAT’s spokesperson added: “Given the significant investment we have made in developing our products, we simply cannot allow competitors to use our patented innovations and technology in their devices. Like any business, we will challenge those who we believe infringe our patents or otherwise use our technology.”
A spokesperson for PMI said BAT’s attempt to secure a US importation ban was part of a broader global strategy meant to “undermine the heated-tobacco segment” where BAT “lags far behind”.
“Ultimately, if successful, their litigation would undermine public health by denying American adults who smoke the ability to choose the only inhalable tobacco or nicotine product authorised by FDA as appropriate for promoting public health,” said the spokesperson.
Judge Cheney is scheduled to release his findings in May. The final decision of the commissioners may not be handed down until September.
Image: Shutterstock.com / Martchan
The Japanese government is considering how best to regulate cosplay using copyright law.
American anime publisher Crunchyroll reported news of the discussions on January 24.
Cosplay, which is a portmanteau of the words “costume play”, describes a situation where cosplayers dress up as specific characters. Those in costume often take on the role of the character they are seeking to portray, as well as the appearance.
Popular sources of cosplay include anime (Japanese computer animation) and manga (Japanese comics or graphic novels).
Cosplay has grown increasingly popular, with some cosplayers earning large sums of money from endorsements and as social media influencers.
The Japanese government is said to be considering whether new rules should be devised to regulate potential copyright disputes between cosplayers and the owners of the relevant IP.
The government has found that the current regulations in this area are unclear and insufficient, as there is no law which protects both the cosplayer and the copyright owner.
Currently, if a person is engaging in cosplay as a hobby and they are not making money from it, they are not breaking any laws. However, if images of that person in cosplay are shared online or sold, it could be argued that the cosplayer falls foul of Japan’s copyright laws as they presently stand.
Yet, it is difficult for cosplayers to contact the original creators and artists to seek permission to portray their characters via cosplay.
Taro Yamada, a member of Japan’s House of Councillors, has called for the development of a database of copyright owners. This would enable people to seek permission from the copyright owner of the character they wish to cosplay.
Shinji Inoue, Minister of State, said that the government is liaising with both copyright owners and cosplayers to determine the best way forward. Enako, one of Japan’s most famous cosplayer, is one of the people involved in these talks.
The discussions are part of the government’s ‘Cool Japan’ strategy. The branding initiative, which is led by Japan’s IP Strategy Headquarters, seeks to share aspects of Japan’s culture, including food, fashion, and entertainment with the rest of the world, cementing Japan’s cultural and diplomatic ties to other countries.
Image: Shutterstock.com / Soundaholic studio
The Second Chamber of the EU General Court, on January 20, upheld a trademark appeal brought by vegan food brand Oatly, overturning an earlier decision by the European Union Intellection Property Office (EUIPO).
In 2019, Oatly applied to register ‘It’s Like Milk But Made For Humans’ as a trademark in the EU. Oatly wanted the mark to cover a range of foodstuff products in classes 18, 25, 29, 30, and 32.
According to the Swedish company’s website, Oatly uses a patented enzyme technology to mirror nature’s own processes and turn oats into nutritional liquid food. Oatly seeks to promote alternative eating habits as part of the fight against climate change.
The EUIPO raised objections to the mark’s registration in relation to some of the goods in classes 29, 30, and 32, including dairy substitutes foodstuffs and beverages. The examiner refused to register the mark in respect of these products.
The examiner allowed the applied-for mark to proceed to registration in respect of the goods in classes 18 and 25, as well as some goods in classes 29, 30, and 32, including fruit and vegetable products, processed grains, and water-based beverages.
Oatly appealed against the examiner’s decision not to allow the applied-for mark to proceed in relation to some of the goods in classes 29, 30, and 32.
In February 2020, the EUIPO’s fifth board of appeal upheld the examiner’s decision.
The board noted that the first part of the trademark, ‘It’s Like Milk’, indicated that the products sold under the mark were or contained milk substitutes. The second part, ‘But Made For Humans’, suggested that the goods are for human consumption.
In respect of the goods at issue, the applied-for mark would act as a laudatory promotional slogan rather than an indication of the commercial origin of the goods, the board said.
Finally, the board found that the applied-for mark contained no elements capable of endowing it with distinctive character, and the length of the applied-for mark may prevent it from even being recognised as a trademark by the public.
‘It’s Like Milk But Made For Humans’ is therefore incapable of performing the function of a trademark with regard to the contested goods, the board concluded.
“The mark applied for calls into question the commonly accepted idea that milk is a key element of the human diet.”
EU General Court
EUIPO’s ‘general public’ omission
Oatly appealed against the decision. It argued that the board did not properly examine the distinctiveness of the applied-for mark in respect of the goods at issue.
The vegan brand claimed that the EUIPO erred in specifically considering lactose-intolerant consumers, vegans, and those with an allergy to milk as members of the relevant public. Instead, it should only have considered the general public’s perception of the mark, as the goods at issue are everyday consumer goods.
In its decision, the General Court noted that the applied-for mark conveys not only that the goods covered by the mark are alternatives to milk which are suitable for human consumption, but also the idea that milk itself is not suitable for human consumption.
“The mark applied for calls into question the commonly accepted idea that milk is a key element of the human diet,” the court said. This initiates a “cognitive process” which results in the applied-for mark being easy to remember, distinguishing Oatly’s goods from those which originated elsewhere.
As a result, the applied-for mark has the minimum degree of distinctive character required by EU trademark law and the board erred in finding it to be devoid of any distinctive character, the General Court held.
With regards to the board’s finding that the applied-for mark was a laudatory promotional slogan, the court said: “The laudatory connotation of a word mark does not mean that it cannot be appropriate for the purposes of guaranteeing to consumers the origin of the goods or services which it covers.”
The General Court annulled the contested decision of the EUIPO’s fifth board of appeal and ordered the EUIPO to pay the costs incurred by Oatly.
Image: Shutterstock.com / Oleksandra Naumenko
US Patent and Trademark Office (USPTO) director Andrei Iancu confirmed his resignation with a rallying call for an end to “state-sponsored theft” and the reform of patent eligibility.
In his farewell speech, delivered at a US Chamber of Commerce event, January 19, he urged his successor to continue engaging with foreign nations to ensure bilateral and multilateral cooperation on IP issues.
“We must put an end to state-sponsored theft of IP, and their cavalier attitude toward the proliferation of fakes and counterfeits,” he said.
This was partly why it was so important for the USPTO to create a broad coalition of partners to elect new, pro-innovation leadership at the World Intellectual Property Organization (WIPO) last year, Iancu said.
He added that “given the forces that were at work, that alone was a singular accomplishment, and it will pay dividends for years to come”, likely a reference to concerted US opposition to Wang Binying, a WIPO deputy director and a former Beijing trade official.
Daren Tang, head of Singapore’s IP office, was eventually elected as WIPO’s director-general, following a US campaign against the Chinese candidate.
Patent reform
During his speech, Iancu stressed that a robust IP system remained critically important and called on the courts to address ongoing issues stemming from the controversial section 101 patent law.
“If the courts cannot do it, then will Congress step in with legislation and finally liberate our country from this quandary? We know that this issue is solvable: we have shown a path forward at the USPTO,” said Iancu.
He said: “Our patent system must incentivise innovation for all. This is the orientation we have taken to everything we have done over the past three years. And this is the pro-innovation, balanced policy perspective that we should continue to take if we want to ensure America’s continued innovation leadership.”
The US was at risk of being left behind as others fortify their IP laws and race towards technological dominance in the Fourth Industrial Revolution, he warned.
Future challenges
The USPTO faced a number of challenges, said Iancu, who described 2021 as shaping up to be one of the most consequential years for IP.
He drew attention to the Trademark Modernization Act, which was signed into law a few weeks ago. “This is the most significant piece of trademark legislation in decades. The new law creates a critically important presumption of irreparable harm once infringement is found.”
Iancu added: “The law also creates new opportunities to challenge bogus marks and help us declutter our register. And the law enables us to set different deadlines and, therefore, speed up the pace of examination even further,” he said.
He noted that the USPTO “will be very busy over the next 12 months” as it sets about drafting regulations to implement the new statute and would also have to address the “astounding 69% increase in trademark filings” recorded during this fiscal year to date.
“We must put an end to state-sponsored theft of IP.”
Andrei Iancu, USPTO
Iancu’s legacy
According to Iancu, the office has succeeded in its mission of “reclaiming the nation’s IP leadership” during his tenure since 2018.
“We have a new dialogue in the US, and frankly around the world: a dialogue focused on the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society,” said Iancu.
He added: “Over the past three years, we did every single thing we promised to do—and so much more.”
During his speech, Iancu pointed to the issuance of new guidance to examiners to address section 101 of the patent code, stating that the uncertainty of examination in this area has decreased by 44% since the new guidance.
The office had also succeeded in balancing post-grant proceedings at the Patent Trial and Appeal Board (PTAB), said the outgoing director.
“Among other things, we aligned our claim construction standard with district courts. And our new amendment process increases the likelihood of success two to three times. We have also drastically reduced repeated challenges.
“We published standard operating procedures and revised the trial practice guide to make everything we do more transparent and predictable,” he said.
COVID-19
Iancu lauded the power and the positive impact of the IP system in the wake of the development of multiple vaccines for COVID-19—in record time. “Some were done by small, innovative, entrepreneurial firms working with the largest pharmaceutical companies, and licensing their IP to leverage each other’s strengths,” he said.
“And yet, this is precisely the time that voices around the world are arguing, with little or no evidence, that IP is somehow a barrier to innovation.”
He argued that the contrary has proven to be true. “There is more cooperation in this industry now than ever before, and IP has played a central role,” he said.
Image: Shutterstock.com / riopatuca
“Over the past three years, we did every single thing we promised to do—and so much more.”
Andrei Iancu
Nokia is claiming victory in one leg of its long-running patent battle with German carmaker Daimler, after the European Patent Office (EPO) affirmed the validity of a key Nokia patent.
The Finnish telecommunications company is suing Daimler for patent infringement in several German courts. According to Nokia, Daimler has refused to license its standard-essential patents (SEPs) covering cellular telecommunications methods increasingly used in automobiles.
Daimler responded by challenging the validity of the Nokia patents at the EPO and at the German Federal Patent Court. Earlier in January, the EPO heard the first case in the validity challenges and upheld one of the Nokia patents at issue.
The patent (EP2087626), one of ten asserted by Nokia, is part of the company’s SEP portfolio covering the 3G Universal Mobile Telecommunications System (UMTS) standard. The patent is also included in an infringement case which will be heard by a court in Munich in July.
“We are pleased with the EPO decision, which upheld the validity of our patent. This once again demonstrates the strength of Nokia’s portfolio and provides further evidence in support of our case against Daimler,” a Nokia spokesperson said.
“It’s time for Daimler to do the right thing and agree a licence on the same fair terms as many other car companies. Our door remains open for constructive dialogue,” the spokesperson added.
“It’s time for Daimler to do the right thing and agree a licence on the same fair terms as many other car companies.”
Nokia
One of the major issues in the dispute is who should have to secure a licence to telecoms SEPs such as those owned by Nokia. Patent owners argue that end-level manufacturers, such as Daimler, should have to pay royalties, while carmakers have said patent should be licensed further down the supply chain.
The answer to this question could have major ramifications for licensees and licensors, who will be closely following the case at the EU’s highest court. The Düsseldorf Regional Court, one of the German courts involved in the dispute, referred the case to the Court of Justice of the European Union (CJEU) last November. Nokia has appealed the referral.
Daimler is seeking greater clarity from the CJEU on what rules should govern the licensing of SEPs under EU law. Germany’s competition authority has also expressed an interest, taking the unusual step last year of asking a court in Mannheim to refer the case to the CJEU.
With the impasse between patent owners and carmakers spilling over into extensive litigation, the European Commission has pledged to try and “reduce frictions” and see disputes settled out of court.
An earlier, leaked version of the Commission’s IP Action Plan had indicated that policymakers were particularly concerned about litigation in the auto sector.
Image: Shutterstock.com / Tobias Arhelger
