The Time for Global Harmonisation is Now: so says David Kappos, Director of the USPTO

It’s Monday (as many of you will have already noticed. For those that have not, you’re probably late for work – at least the roads should be clear), and laden ladenfam has spent the morning, with many others in the IP community, in the presence of an all-star panel for a breakfast discussion. The event, organised by the Directors Roundtable Institute with the co-operation of AIPPI UK, and hosted at UCL, was billed as “A Dialogue with David Kappos, Director of the U.S. Patent & Trademark Office”. Also giving presentations were: the Rt Hon Sir Robin Jacob, Sir Hugh Laddie Professor of Intellectual Property at University College London; Richard Vary, Director of European Litigation for Nokia; and Avril Martindale, Partner, Freshfields. The event marked the David Kappos’ first public address in the UK since taking up office. The weather in London this morning was glorious, which was a good job considering the day kicked off with an impromptu game of ‘hunt the breakfast’ – presumably thrown in to work up an appetite. However, enough scene-setting, what about the talks?

Following a brief introduction by the Rt Hon Sir Robin Jacob, David Kappos took the floor. He outlined his main topic for discussion, a topic that was reflected by all of the presentations made this morning: Harmonisation. The Kat paraphrases, however, the essential elements of the presentations were as follows:

Starting with patents: Global harmonisation, Mr Kappos noted, would be difficult with so many legal traditions and so many language differentials to contend with, however, it was a goal worth pursuing. The U.S. had recently started the ball rolling by unilaterally (a word that was to appear frequently in his presentation) tidying its own back yard. Accordingly, the key carbuncles encrusting the U.S. system (described by Mr Kappos as “deficiencies”) were in the process of being remedied. Specifically, the U.S. was dealing with first-to-invent and the Hilmer doctrine (eloquently explained here), and the requirement for disclosing the best mode of an invention, and was also moving towards full and rigorous enforcement of an 18-month publication requirement for patent applications.

Mr Kappos noted that the passage of the America Invents Act (“AIA”) (a.k.a. the Patent Reform Act 2011 – discussed by the AmeriKat here) was looking promising, with a rose-garden signing expected for the summer. Accordingly, the U.S. was at the starting line for a global push towards harmonisation on matters patent.

Mr Kappos remarked that it was “bizarre” that IP is stuck using nineteenth century models in an age of international transactions and a global marketplace. He therefore explained that he was in Europe to discuss harmonisation as a global topic, and had accordingly met with the EPO and WIPO, the Germans, French and British in order to capitalise on moves made unilaterally (that word again) in the U.S. to allow IP to enhance global commerce rather than impede it. The time for harmonisation, he said, is now.

Turning his attention to trade marks (or trademarks as he would inevitably have spelt it), Mr Kappos said that this was not currently in the spotlight of review in quite the same way as patents were in the U.S., however he was still interested in talking about the benefits of a “use-based” trade mark system in Europe. There were still some issues to iron out concerning the policing of such a use-based system and avoiding the prospect of trade mark bullying by larger firms towards small entrants, but that these were “bumps” that were being dealt with.

Following on with the harmonisation theme, Avril Martindale, Partner, Freshfields, noted that one of the main ways in which transactions concerning IP assets have changed over the years was in relation to their increasing globalisation. This could lead to problems: big blockages could occur with different standards and laws in various different states.

Thereafter, using a case-study of the sale of Volvo by Ford to the Chinese Zhejiang Geely Holding Group Co, the audience was treated to a thorough and engaging discussion of some of the general obstacles that would lie in the way of a smooth transaction in cases such as this. The end perspective on this particular transaction was that China may still have some way to go in terms of ensuring its IP system’s effectiveness on a world stage (the practical inability to gain interim relief being one matter that needed addressing), but it is no longer true to say that it does not protect IP.

Richard Varey, Director of European Litigation for Nokia, was third to speak. As will be expected, he also concentrated on the harmonisation theme, noting that the degree of co-operation between European courts in different states was increasing all the time. Accordingly, it was now common practice for the courts of one state to look to the outcome of litigation in another in cases concerning the same patents. Even in areas where there had traditionally been very different practices adopted in different states, the courts were stated to be beginning to walk in similar ways – examples were given of the practice relating to amendment of patents in Germany and to issues of disclosure (discovery) as well. However, certain discords were noted to remain – declarations of non-infringement, for example, being noted to be particularly difficult to gain in Germany.

Therefore, again, the main theme was a need to co-operate and to sing to a harmonised hymn-sheet. This theme was once more stressed by the Rt Hon Sir Robin Jacob, who noted that there were still many differences between the world’s main patent systems, but that the differences were slowly getting less. In Europe this was partly because of the biennial Patent Judges’ Symposia (the 15th of which was held in Lisbon last year), which gave a constant drive towards the exchange of ideas. However, a more global view was still needed, and there might be things to learn from the U.S. – noting dryly that just because something is in U.S. legislation does not necessarily mean that it is wrong.

All in all, the take-home message from today’s event was clear: harmonisation is on the agenda, and the U.S. wants to make renewed moves on a global patent standard. Much was made by Mr Kappos of the “unilateral and unconditional” offering that the U.S. looks like it will be making when, and his tone suggested that ‘when’ is definitely the correct word to use, the America Invents Act (“AIA”) passes into law and the U.S. adopts first-to-file. Whether this will be enough to command reform on a global scale remains to be seen, but it’s certainly a step in the right direction.

Global patent index: here

Global patent sources: here

Revolving Globe Apparatus patent: here

Letter from AmeriKat II: Good Day Sunshine (patents)

Google's $900 million bid for Nortel's patents

Last Monday Google announced a bid to buy almost 6000 patents and patent applications from Nortel, the bankrupt Canadian telecoms equipment manufacturer, for $900 million. The patents include patents for wireless, internet and social platform technologies. The bid comes as part of Google's strategy to shield itself from patent litigation. The thinking is that if you buy enough patents that cover a wide and diverse range of technologies and industries, you may have a patent in your legal arsenal that may have otherwise been used against you. Google currently possess a comparatively weak patent portfolio in comparison to their market share and expansion into mobile operating systems, especially in relation to android-related technology. Readers may recall that Oracle sued Google last fall for patent infringement of its Java patents by Google's open-source android operating system. (District Judge Alsup, who is presiding over the case, last week received a tutorial in Java. Also, for a fun trade secret case involving HP and Oracle see this recent news here)

Although it was reported that other tech companies were expected to make bids for Nortel's patents, there may be few that can beat Google's incredibly high bid. On Monday, Google's general counsel and Senior VP Kent Walker(picture, left) wrote on Google's blog that

"... one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.

So after a lot of thought, we’ve decided to bid for Nortel’s patent portfolio in the company’s bankruptcy auction. Today, Nortel selected our bid as the “stalking-horse bid," which is the starting point against which others will bid prior to the auction. If successful, we hope this portfolio will not only create a disincentive for others to sue Google, but also help us, our partners and the open source community—which is integrally involved in projects like Android and Chrome—continue to innovate. In the absence of meaningful reform, we believe it's the best long-term solution for Google, our users and our partners."

The planned sale of Nortel's patent portfolio must first beapproved by judges overseeing Nortel's bankruptcy cases in the US and in Canada. As reported by Bloomberg, anyone planning to beat Google's offer has to beat it by at least $25 million more than Google's initial offer, or at last count, $5 million more than the last offer. Anyone have $905 million to spare? The AmeriKat wonders what the return on investment is on purchasing a patent portfolio which with patents and/or applications that will have only about 20 or so years of life in them? Will Google ever make back theri $905 million on savings to legal fees or from patent damages? Or does that even matter as long as Google is sending a message to would-be plaintiffs that their patent portfolio is now robust, so sue at your peril? What do readers think?

US and UK unite for some more sweet patent harmony

David Kappos's UK harmonization tour last week not only yielded a Monday morning breakfast at UCL, but progress on the UK and US's joint action plan to combat the problem of patent backlogs and their effects. The joint announcement was made by Kappos and Baroness Wilcox, (compare the IP experience) Kappos stated that:

“The joint action plan highlights that while 21st century patent challenges are global in scope, so too are their solutions. Work sharing is a powerful tool that equips examiners to extract value from our skilled colleagues in other patent offices. By reducing redundant workloads and chipping away at the backlog, we can collaborate to unleash millions of jobs lying in wait and breathe life into our economies.”

The action plan is designed to allow an examiner in one office the ability to reuse work already done by an examiner in the other office on a corresponding applications, as much as possible to avoid duplication of work.

Kappos was also interviewed by The American Lawyer recently regarding the recent patent reforms (read interview here) and the America Invents Act (see recent AmeriKat posts here). When asked whether he thought it was that the House would pass a similar bill, Kappos replied:

I am off-the-charts optimistic.

The AmeriKat loves the enthusiasm.

Three Heads, one mind

It was soon apparent that the three Heads
were in congenial agreement with one another

It's a busy day for laden ladenfam, so he has popped in and out of the first Managing Intellectual Property International Patent Forum (here) this morning rather than sitting there, glued attentively to the succession of stellar speakers.  The one thing he did attend in its entirety was the press briefing which three talking heads --  USPTO head David Kappos, UK IPO Head John Alty and his colleague, Patent Head Sean Dennehy -- gave to a small but select gathering of press representatives (there were no coffee facilities).

It was soon apparent that the Heads were not invited there in order to air their differences -- their peaceful messages of global harmonisation, cooperation and mutual respect could scarcely be mistaken for anything else. They spoke eloquently on the need to cut the pendency of patents in the pipeline, bust the backlog, generally build up trust and find ways of letting their examiners into each others' computer systems withou too much regard for hierarchies and passwords.

In answer to a question from this Kat about his beloved Peer-to-Patent experiment (currently running in the USA and Australia and, er, not quite in the UK), David Kappos described as "poppycock" the notion cherished by some European Patent Office examiners that the contribution of members of public towards the identification of significant prior art would result in the loss of their jobs, or of their promotion prospects.  Despite having recruited 1,000 new examiners this year, there was no way that the USPTO could swiftly process the half a million applications they were expecting in 2011: "Peer-to-patent is not a substitute for examiners, but assists them", he emphasised -- and there would be no diminution of their sovereignty [Says Merpel, 'sovereignty' is an interesting choice of word, which actually reflects quite well the feeling one gets about certain patent-examining and granting offices].  The current US legislative bill would take Peer-to-patent within the USPTO, so that it could effectively orchestrate crowdsourcing within the system, without prejudice to any crowdsourcing that might be brought to bear outside it.  As for the UK, "We're following in Dave's footsteps", John Alty said.

Managing Intellectual Property's James Nurton asked about the possibility of a global patent system and mutual recognition.  "At this stage this would be A Bridge too Far", said David Kappos, displaying his erudition as a movie buff -- but it wasn't too too far. He also didn't say that the increasing use of bilateral agreements was not the consequence of a failure to achieve broader consensus, pointing out how useful they were in enhancing cooperation between offices and building trust.  Agreements for Patent Prosecution Highways could also be broadened from bilateral to plurilateral in their scope, by the simple expedient of admitting more countries to them.

Finally, what did the team think of the need for more dialogue between patent-granting bodies on the one hand and patent-exploitation-regulating bodies on the other, such as competition authorities?  Virtually painting an image of the lion lying down with the lamb and the little child playing by the viper's nest, David Kappos related how the USPTO had participated in the first ever conference with the Department of Justice and the Federal Trade Commission for exactly these purposes, as could be seen from the current USPTO guidelines on 35 US s.112, which he described as an "outgrowth" of this event.   John Alty confirmed that the Hargreaves Review had been asked to look at the tension [the politically correct term is not tension, but 'interaction'. Thanks, John, for calling a spade a spade] between IP and competition law. Soon we shall know what it saw ...

At this point, no doubt correctly suspecting that the Kat had another 37 questions to ask, James Nurton thanked the Heads and graciously led them to safety and towards the smell of coffee.

David Kappos comes to town!

INSTITUTE

The Directors Roundtable Institute,

with the cooperation of the IPKat,

invites you to attend a programme

for Boards of Directors and their Advisors

A DIALOGUE WITH DAVID KAPPOS

DIRECTOR OF THE U.S. PATENT & TRADEMARK OFFICE

Monday, 4 April 2011, 8:30 to 10:00 A.M. (8:00 A.M. Registration)

UCL Faculty of Laws, Bentham House, Endsleigh Gardens, London WC1H 0EG

There is NO FEE to attend and continental breakfast will be served.

*CPD Credit of 1.5 hours will be provided.

The event will be chaired by Lord Justice Jacob, Sir Hugh Laddie Professor of Intellectual Property, University College London.

AGENDA

The top official of the US Patent & Trademark Office will discuss key policies of the US Government regarding intellectual property including current patent filing and approval rules, and trade mark regulations.  He will be joined by a British government official, lawyers, and other experts regarding both UK/EU policies and American/European court decisions.  In addition, the speakers will analyse multi-national patent and trademark rights and litigation. 

The Directors Roundtable Institute is a not-for-profit which organizes worldwide programming for Directors and their advisors.  


laden ladenfam weblog works for the intellectual property community and welcomes this initiative from the Directors Roundtable Institute.

REGISTRATION:  To register, log on to the Directors Roundtable Institute’s Website www.directorsroundtable.com and click on "Current Events and Registration". 


To contact the Directors Roundtable Institute, call Karen Todd at (727) 493-2067 or email to Jack Friedman, Chairman of the Directors Roundtable, at karen.f.todd@gmail.com.

*IBIL and AIPPI United Kingdom are proud to be providing this event with Directors Roundtable Institute.  AIPPI United Kingdom is accredited under the Solicitors Regulation Authority’s and the Bar Standards Board’s CPD schemes.  SRA CPD Reference Provider DKV/AIPP.  CPD credit 1.5 hours


laden ladenfam has had a fair bit of fun over the past few days, speaking to various sweet souls and dignitaries in order to help make this event happen at short-ish notice. He both hopes and believes that it will be well attended.

David Kappos's official website and biographical details can be found here. Director's Forum is his public blog.  He also features on Wikipedia here.

Letter from AmeriKat: Return of the AmeriKat

For anyone who knows the AmeriKat personally and professionally, they will know that during the past seven weeks the AmeriKat has faced a flurry of deadlines, deliberations, duplicitous documents and a dosing of sleep deprivation. Her absence from her beloved letters was not one of choice, but one of necessity as every two days she was hit with another deadline. (picture, left - the AmeriKat up late in front of one of her many outstanding deadlines) The deadlines were increasing in frequency, but as the old saying goes “absence makes the heart grow fonder”, especially when the absence is not voluntary. When the AmeriKat was writing this post, she was curled up on her bed, watching her clock until she had to leave to catch a flight for yet another deadline. However, now with the passing of the last seven weeks, she has returned to first give you a brief glimpse of the first of the latest US IP tails. She will be back later throughout the week with more detailed posts on some of the most important news in US IP law.

Patent Reform Act 2011 Gets Senate’s Thumbs-Up

Two weeks ago the US Senate passed by overwhelming majority (95-5) the America Invents Act (“AIA”) (a.k.a. the Patent Reform Act 2011). Mr. IP himself, Senator Patrick Leahy (D-Vermont) introduced the Patent Reform Act 2011 to the Senate Judiciary Committee this past January. The AmeriKat has set out below the main provisions that the original draft bill contained before the Senate and what the AIA now contains below (a comparison of the two can be found here):

First -to-File: The biggest change introduced by the AIA would be the transition in the US from a first-to-invent system towards a first-to-file system where each patent application would be allocated an “effective filing date”. Similar to that in the EU, the application’s novelty and obviousness is then judged on the prior art available before the effective filing date of the patent, but with a one year grace period still remaining in effect in respect of the inventor’s own disclosures. Democratic Senator Dianne Feinstein had proposed an amendment (Amendment No. 133) that would have removed these provisions arguing that their effect would be especially burdensome to small independent inventors (click here to watch her introduction of the amendment.) However, the Senate voted down the amendment by 87-13 with proponents of the first-to-file provision arguing that the availability of applications such as pre-issue disclosure, post-grant review and inter-partes review would rebalance any alleged burden that the first-to-file paradigm could create. Opponents to the first-to-file system also believe that this introduction will worsen the huge backlog of patents faced by the USPTO (see post here) and result in the system being clogged up with thousands of unmeritorious inventions.

Damages: The review of the assessment of patent damages that was taken up by Microsoft in their initial appeals in the i4i case last year (see AmeriKat posts here) evidenced only a sliver of general unrest with the assessment of US patent damages. The original draft of the Patent Reform Act 2011 introduced proposed amendments that would provide for specific procedures on how judges in patent cases manage the damages assessment. These included mechanisms for the court to consider the evidentiary merit of each parties’ case on damages and then the judge introducing a methodology that would be used in assessing the damages awards. Close the AmeriKat’s heart at the moment was the old text also requiring a judge to split the damages portion of a trial at a parties request and only rejecting that request in the absence of a good cause, such as “the absence of “issues of significant damages or infringement and validity”. All of these draft provisions did not make it past the Senate's approval perhaps signaling a reluctance to delve into the problematic pool of patent damages which may have held the entire bill’s passage hostage.

Enhanced Damages: In the current US Patent Act, there is not specific reference that the increase of patent damages should only be reserved to cases of willful infringement. Section 284 of the current statute, instead, states that “the court may increase the damages up to three times the amount found or assessed.” The Federal Circuit’s interpretation has limited this section to cases to willful infringement and where the defendant’s actions were objectively reckless. The draft text of the Patent Reform Act had basically codified this precedent, but again, like with general damages, this did not make it to the final text.

USPTO Proceedings: The AIA also introduces under Sec 135 a “derivation proceeding” that arises when an original inventor claims that a patent applicant derived their invention from the original. Third parties will also be allowed to submit any prior art documentation with accompanying relevant reasons for the submission to the USPTO prior to the examination proceedings. A post-grant review proceeding would also be created and which allow any party within 9 months of the patent’s issue to present a validity challenge to one or more of the patent claims. Replacing the inter partes reexamination would be the inter partes review which would limit reviews to issues of novelty and obviousness arising from prior art patents and printed publications. The effect of the post-grant review has been considered by some as not ensuring the quality of the granted patents, but as potentially increasing the expense a patent-holder could face during the adversarial proceedings.

Besides deleting more interesting parts of the bill, the Senate did add Section 18 which deals with provisional measures for the establishment of post-grant review proceedings for the review of the validity of business-method patents. False marking lawsuits would be eliminated under the proposed 146 (k) except for ones filed by the US government or by a competitor who can prove competitive injury as a result of false marking. Also, reduced fees for small entities were also introduced.

The American Innovators for Patent Reform (AIPR), a trade association which promotes innovation by strengthening the US patent system, has opposed the AIA. Alexander Poltorak, the founder and President of AIPR and AIPR stated that the AIA, in particular the first-to-file provision would be viewed as a “defeat by many inventors”, however the removal of the damages provisions (which were referred to as the “most damaging provisions” – no pun intended) were heralded as a success. David Kappos, the USPTO's Director, has said that the US is already operating a pseudo-first-to-file system because in 2007 there have only been 7 interference applications (where two inventors file their patents nearly simultaneously) of which only one was decided on priority of the invention and "the truth is that only .01% of all patent applications could be affected" by the change.

The next stage of the bills life will be in the House (watch the life of a bill, courtesy of Schoolhouse Rock). If passed by Congress , the AIA could well be on its way of becoming the first substantial change to patent law in the U.S. in almost 60 years, but a bill’s life in Congress can be a rocky ride and can usually, as has been seen in IP legislation, die a quite death.

So what do non-US readers think? Is the introduction of the first-to-file system the end of civilization as we know it, or if the AIA is passed by Congress is Director Kappos correct and US inventors will not notice any difference at all?

Letter from AmeriKat: The Rite of Spring

Gone are the evenings when the AmeriKat had to activate her whiskers and night vision to illuminate the darkened journey from her office home. The days are getting longer, the afternoon sun is gliding through her Venetian blinds, and her outer garment of choice is a mere raincoat to guard against the unexpected shower. It is true, Spring may have finally graced London with her presence. However, with Spring has come the formidable western wind - Favonius (or Zephyrus)- that last week wreaked havoc on many a groomed fur coat (picture, left) and once-casually floating skirts -the winds of change have come. The winds of patent reform, first reported by the AmeriKat two years ago, have been the biggest news of the past few weeks, but the winds have also blown off the dust of some old issues and revealed some new issues.

i4i files Supreme Court argument, US Government agrees

The i4i v Microsoft battle is definitely an old IP story dating back to 2007, but only three weeks ago i4i filed their reply to Microsoft's appeal in the U.S. Supreme Court. The filing signals one of the final steps in the litigation before the Supreme Court rule on the issue of what evidential standard is required to prove patent invalidity– that of a higher “clear and convincing” standard or a “preponderance of evidence” standard. The “clear and convincing” standard has been part of US patent law for almost 30 years and supports the presumption that patents, when granted by the USPTO, are assumed to be valid; therefore a higher standard of proof is required to invalidate the patent.

Readers will recall that this case involves an epic battle between the two companies involving i4i’s US Patent No 5.787, 449 (“449 Patent”) which related to markup languages and Extensible Markup Language (“XML”) used in electronic documents. In 2007, i4i filed a patent infringement action against Microsoft in the Eastern District of Texas. Microsoft claimed that the '449 patent was invalid because an earlier version of i4i’s software had anticipated the claim. However, this earlier software, S4, had been destroyed ten years prior to the case so the USPTO Patent Examiners never had the opportunity to examine the i4i’s patent application in light of this alleged prior art. Because the S4 data had been destroyed, Microsoft argued that they never had an opportunity to provide “clear and convincing evidence” of invalidity. The trial jury found in i4i’s favor, Microsoft appealed to the Circuit Court of Appeals who upheld the lower court’s finding and then appealed to the US Court of Appeals for the Federal Circuit. The US Court of Appeals upheld the Circuit Court’s ruling and so Microsoft appealed to the Supreme Court. The Supreme Court granted certiorari in the case November 2010.

As reported by the Amerikat, Microsoft is arguing that the evidential standard to invalidate a patent should be one of a “preponderance” and not of a “clear and convincing” standard (see previous posts here for Microsoft’s argument). The AmeriKat has worked her way through the i4i’s brief for a full two-parter AmeriKat post out this week, but i4i's main argument boils down to the suggestion that Section 282, the section that deals with the burden of establishing invalidity, is not silent on the burden of proof requirement. It uses language that has a settled meaning of a “clear and convincing” standard which is itself settled by Federal Circuit and Supreme Court case law history, i.e., section 282 codified the existing evidential standard. In addition, this heightened standard of proof has specifically been used in cases dealing with prior-use claims of invalidity, such as the case here. Most of i4i's argument is devoted to the stronger underlying public policy argument of maintaining the heighted evidential standard, i.e., promoting strong and stable patent rights to protect the incentives for innovation and investment. A weaker standard, such as the preponderance standard, would arguably have the counter-effect as well as weakening the powers and judgment of the USPTO.

Appealing to the USPTO's powers definitely had the right effect and the US Government came galloping to i4i's defence. A week after i4i's filing, the US government joined 21 other amici curiae briefs in support of i4i, including General Electric, Procter & Gamble, and Johnson & Johnson. The main thrust of their support can boil down to that of the USTPO's judgment:

"By allowing a law jury to second-guess the PTO's judgment even in close cases, the preponderance standard would diminish the expected value of patents and would reduce future inventors' incentives to innovate and to disclose their inventions to the public."

In particular, the US Government contended that when invalidity is challenged in infringement proceedings where the prior art was not and could not be before the USPTO during examination, although the standard of proof is arguably more difficult to determine, it should nevertheless be the clear-and-convincing evidence standard. This is because this standard should be applied uniformly and because it

"reflects the better reading of Section 282 in light of that provision’s text, history, and purposes. Most importantly, the text of Section 282 does not suggest that the standard of proof governing questions of patent validity varies depending on the nature of the evidence that a challenger introduces. Such a variable-proof regime, moreover, would reflect a substantial departure from the way in which evidentiary burdens typically operate. Although juries routinely give different weight to different types of evidence, petitioner identifies no statute under which the standard of proof governing a particular determination depends on the type of evidence that the parties introduce. The Federal Circuit’s longstanding approach to the question presented here, under which evidence that was not before the PTO “may carry more weight and go further toward sustaining the attacker’s unchanging burden” ..."

However, if the worry from the USPTO is that a lower-evidential standard may threaten the value of granted patents, then the AmeriKat wonders what they have to say about the concerns about post-grant reviews that is set out in the America Invents Act (reported last week here). Post-grant reviews are argued by some to increase costs to patent holders and would enable a higher frequency of repeated merit-less challenges, which would decrease the certainty of valid and enforceable patents, and thus the value of the patents. Interestingly, Microsoft's deputy general counsel, Horacio Gutierrez, stated two years ago that post-grant reviews are "essential to maintaining high-quality patents because it allows the validity of questionable patents to be tested."

The AmeriKat will be back later this week with a more detailed report of i4i’s brief.

More Unrest in US Patent Reform and AIA

The winds of change are not shifting the AmeriKat's post from patent issues today. Last week the AmeriKat reported on the America Invents Act (AIA) and the controversy surrounding some of the House's version of the Senate bill S.23. Last week, American Innovators for Patent Reform (AIPR) along with eight other national organizations including the Institute for Electrical and Electronic Engineers (IEEE) and National Association of Patent Practitioners (NAPP) sent a letter to the members of the House of Representatives and the staff of the House Judiciary Committee detailing their many objections to the AIA, including the increasing cost in securing and defending a patent (see post-grant review above), reducing access to the patent system for inventors and small businesses (see post-grant review above), and increase the current 700,000 patent application backlog (see first-to-file scare last week).

A more nuanced objection has also been raised - that of grace periods (picture, right - the AmeriKat's favorite painter, Botticelli's Primavera picturing the Three Graces). There is an arguable tension in switching to a first-to-file system and the issue of grace periods. The letter argues that that with the introduction of the first-to-file standard, the current year "grace period" currently afforded to inventors before filing an application will be shortened. The AIA provides that the grace period will only apply in circumstances where the inventor publishes a disclosure (unhelpfully undefined in the AIA) of the invention, however it is argued that small businesses and startups do not routinely publicly disclose their invention soon after it is made. The worry is that the AIA will return patent law to a system that effectively does not provide for a grace period where there is non-disclosing public-use and on-sale activity, not just disclosure. The Bill's proposed section 102(a)

"includes public-use and on-sale bars which have no counterpart exception for grace in proposed 102(b). This is a bad system part of which has been tried in the U.S. and was abandoned in the Patent Act of 1839, which established a grace period of such activity."

Although, adversaries of the Bill abound, the House promptly picked up the AIA this week where the Senate left off. USPTO Director David Kappos, who will be visiting the AmeriKat's alma mater tomorrow appeared before a subcommittee hearing on the bill on last week saying that AIA's measures would "reduce legal costs, improve fairness, objectivity and transparency, and support US innovators." Director Kappos's written statement can be read here. Broad language like this, says the AmeriKat, is exactly what has inflicted the AIA and created such discord with a section of the US inventor community. The AmeriKat has another - if the purpose of AIA is to reduce backlog, surely the new post-grant review procedures are going to create more strain on the USPTO's staff and resources and further increase the backlog?

Proenza Schouler target Target's Mossimo bag

Now something a bit closer to the AmeriKat's heart - and she realizes she now has a reputation about writing about fashion and shopping so she does not wish to disappoint. Proenza Schouler, the New York based luxury womenswear line headed by designers Jack McCollough and Lazaro Hernandez have spoken out about the similarity between their PS1 bag and Target's Mossimo Messanger bag. The PS1 bag (picture, left) retails for $1,595 and is made of genuine leather. The Mossimo bag retails for $34.99, is currently out of stock on-line (the AmeriKat just checked) and is made of fake leather. Although the placement of the straps and closure are different, the other design features including the shape and weight of the bag are quite similar, suggests Hernandez. As reported by the New York Times he stated that

"Our whole aesthetical idea with this bag was to take the hardware off. And the attitude, the slouch of the bag - they got the weight really right."

The numerous fashion blogs that look out for cheaper versions of the more desirable luxury products heralded Target's bag (picture, right - from the New York Times article) as the perfect affordable version of the much-coveted item. McCollough stated that although he can understand this thinking, such products are detrimental for small companies like Proenza. He stated "Yeah, why save up and buy ours when you can buy theirs right away?"

However, the biggest issue is what the AmeriKat originally thought this piece was about. Target has collaborated with several famous luxury fashion labels and desingers, including Mulberry, Liberty and Isaac Mizrahi. Proenza also previously collaborated with Target a few years ago, designing 65 garments for sale in Target stores and has recently reissued some of those pieces in Target this spring. The Massimo bag is thus appearing in the same store that Proenza's authorized designs are also appearing.

The AmeriKat's day-to-day work focuses on the fashion industry and in recent years she has seen how many luxury brands create bespoke lines and license some of their designs and IP out to hight street and mass retailers such as to H&M and Target (picture, left - 2010's Jimmy Choo and H&M collaboration). Although, arguably, these collaborations represent a new revenue stream to luxury brands and notionally act as getting into the stores before the knock-offs and infringement start there are dangers that can often be ignored. Not only can these types of licensing agreements, if used too often and too frequently, be in danger of diluting the attractive power of a luxury brand (products, prices and exclusivity) but it can also potentially dilute the power of any later infringement actions they wish to take. Knock-offs are usually of poorer quality than the originals, but often so are the designs located on the racks at H&M and Target which are authorized by the luxury designer. What happens to the brand and legal reputation of a luxury brand in these circumstances? Also, when brands licence their IP for lines in high-street and mass retail shops, what are the assurances that the hand that feeds these retailers won't be bitten by the appearances of a later knock-off or infringing item, such as what has allegedly happened in the Proenza case? Is this a matter to be dealt with in the contract between the two? What do readers think?

Friday fantasies

As usual, laden ladenfam reminds readers of his Forthcoming Events page, which is replete with delicious seminars, lectures, conferences and other excuses for a get-together. Do remember to check them out!

Among next week's events are two in which laden ladenfam has had a hand. One -- at the crack of dawn on Monday morning -- is a chance to share a breakfast with the early-rising Head of the United States Patent and Trademark Office, David Kappos (details here). The other, congenially timed for Tuesday afternoon, is the MARQUES Class 46 weblog's rapid response seminar on Future Plans, which looks at the recently-published study on trade marks in Europe (details here).

There are only a couple of days to go before the poll closes on IP v freedom of expression (a.k.a. Louis Vuitton v Nadia Plesner).  You can find the poll at the top lef-hand corner of your screen if you visit laden ladenfam's front page -- it's at the top of the side bar.




Moussa Koussa -- whatever you may think of the man himself, it can't be denied the name has wonderful potential for a brand.  It rhymes, it rolls off the tongue easily, it has an attractive beat.  Would it be a hair preparation, perhaps, or a food product -- or even an up-market tag for fashion goods and accessories?  Readers' suggestions are welcomed, as ever.

If you ever wanted to know what the Court of Justice of the European Union actually does, you might want to take a look at the 2010 Provisional [and therefore presumably non-authentic] Version of the Curia annual report.  This document provides some handy extracts: a synopsis of the case-law of the Court of Justice, the General Court and the Civil Service Tribunal, together with loads of statistical information concerning their judicial activity. The full version of the report -- to which no link is provided -- contains in addition the members' curricula vitae [handy if you're thinking of (i) recruiting, (ii) bribing or (iii) challenging them], orders of precedence [shouldn't this item have come first?] and a summary of the institution's ancillary activities (judges' forums, judicial study visits, official visits, information visits, seminars, cocktail receptions, parties and so forth).

Now that the main event of the month -- April Fools' Day -- has passed, laden ladenfam respectfully reminds readers that another major event remains, in the form of World Intellectual Property Day on 26 April.  The Law Society of Scotland is holding its own WIPD event five days earlier, to beat the rush. If you fancy attending, the brochure with all the details is here. If you're squeamish about eating Scottish delivacies, don't worry. Haggis is not on the menu; to satisfy the demands of the vegetarian lobby, you can sample another notorious Scottish gastronomical invention: the deep-fried Mars bar ...

Obama: more popular than local
politicians in the Emerald Isle?

laden ladenfam has received a solemn guarantee from the ever-credible Niamh Hall (FRKelly) that celebrations in Ireland have already begun in advance of United States President Obama's visit to the Republic this May.  The President's itinerary may well include a visit to Moneygall, Co. Offaly, where President Obama's great x 4 grandfather was a shoemaker. Recent trade mark applications filed in the Irish Patents Office include O'BAMA Irish Coffee Stout (No. 2011/00532), O'Bama Celebration Stout (No. 2011/00527) and O'BAMA MONEYGALL STOUT (No. 2011/00530). Anyone for an Obama-tini?  Says laden ladenfam, it is highly important to get your US President-related trade mark strategy right: remember how BILLCLINTON was refused registration as a Community trade mark?


Mark your diaries for next week: there's an interesting-looking reference for a preliminary ruling by the Court of Justice in Europe from the Hoge Raad der Nederlanden in Case C-406/09 Realchemie Nederland BV v Bayer CropScience AG. The questions referred by the top Dutch court are these:

"1. Is the phrase 'civil and commercial matters' in Article 1 of Regulation ...44/2001 on jurisdiction and the recognition and enforcement of judgments ... to be interpreted in such a way that this regulation applies also to the recognition and enforcement of an order for payment of 'Ordnungsgeld' (an administrative fine) pursuant to ... the German Code of Civil Procedure (Zivilprozessordnung)?

2. Is Article 14 of Directive 2004/48 on the enforcement of intellectual property rights to be interpreted as applying also to enforcement proceedings relating to
(i) an order made in another Member State concerning an infringement of intellectual property rights;
(ii) an order made in another Member State imposing a penalty or fine for breach of an injunction against infringement of intellectual property rights;
(iii) costs determination orders made in another Member State on the basis of the orders referred to at (i) and (ii) above?

laden ladenfam and Merpel know the answers, of course, but will wait till next week to see whether the Advocate General's Opinion is correct before they say anything, since they wouldn't want to be thought of as influencing the court.

Party time. Today the Office for Harmonisation in the Internal Market, Alicante, is having a party to celebrate the 15th anniversary of the filing of the first Community trade mark applications. When OHIM's doors metaphorically opened on 1 April 1996, they were hit by around 21,000 CTM applications -- well in excess of the projected demand for the full year.  laden ladenfam recalls that the organisation didn't have enough fax machines to cope and had to use the facilities of the local newsagent too.  Anyway, the past decade and a half have seen almost 320,000 applicants from 190 countries make 940,000 CTM applications, of which more than 713,000 have been registered [Merpel is curious to know how many of the applications made on 1 April 1996 are still in the pipeline.  Does anyone have a figure?].  This Kat may be wrong, but he has a vague recollection that 1 April 1996 was also the commencement date for the Madrid Protocol -- another success story, though you wouldn't think so to listen at everyone moaning about it.   Happy birthdays all round, say the Kats!

Fordham IP Conference 2011: part 3

Following the two "meet the judges" sessions which concluded the morning programme, lunch was declared -- with David Kappos (US patent supremo and fellow blogger) as the guest speaker. David described patents as the premier currency of global trade; this currency must not be devalued by failure to keep it relevant. This meant cutting pendency times, reducing unnecessary duplication of office work and looking at the big picture rather than focusing on the minutiae [which, as Merpel sadly notes, is what many fine academics, practitioners, administrators and judges are paid to do].

David then reminded us of the need to take account of developing nations when considering substantive patent law. He gave Europe quite a pat on the back for its efforts in harmonising substantive patent law and confessed to a rapt audience that this really excited him. Refreshed by the gentle pitter-patter of raindrops to which many diners were treated in the Fordham atrium, but with the looming presence of Hugh Hansen making itself felt, David concluded with a message that we should all reach out, work together, rise to the challenge and generally feel good as we put the patent world to rights.

Following lunch, this Kat took himself off to the stream dealing with European trade marks and designs. First up was Annette Kur, an eminent scholar at the Max Planck Institute and a member of the team which authored the recent study on the European trade mark system for the European Commission. Annette explained the background to her study, which is now under consideration by the Commission (proposals, which may or not be based on the study, are expected this autumn or, more realistically, next spring). She also reminded us of the significance of the Community trade mark as a unitary right within the context of European borders and of the non-competitive relationship between OHIM and the national offices.Among the topics she fastened on was that of 'cluttering' of the register, something which many users of the system believe to exist but the existence of which is difficult to prove.

Annette was followed by Paul Maier (speaking for the second time today), who spoke on the problems raised by descriptive trade marks in a region which contains 23 official languages as well as many languages (Russian and Turkish among them) that are not official but are nonetheless spoken by many inhabitants of the region.  Paul reviewed the issue through the lens of the Matratzen litigation, concerning a word which was entirely descriptive of mattresses in German but was quite distinctive for mattresses in Spanish. The Court of Justice took a conservative line, affirming the distinction between the existence of a mark and its exercise: the mark should be registrable but purely descriptive uses would not infringe (Paul also mentioned the Omega 3 case). Paul felt that national offices should check descriptiveness in languages other than their own, to avoid the appearance that people are deliberately registering foreign descriptive words as trade marks.

Gordon Humphreys (OHIM Board of Appeal member) then spoke on registered Community designs. He reviewed four recent decisions: T-09/07 Metal Rappers, T-148/08 Instruments for Writing, T-153/08 Communications equipment and T-513/08 Ornamentation. These cases, the first and fourth of which are on appeal to the Court of Justice, were pretty depressing news for the audience.

The panel discussion focused first on the Max Planck study, which was by general assent well received and much appreciated. Enforcement within Europe, greater consistency as between and within offices and proof of acquired distinctiveness of non-traditional trade marks.

USPTO/AIPLA Roundtable Report: Chinese utility models and design patents

While the AmeriKat had her whiskers in a pile of papers (picture, left) last Monday, the United States Patent & Trademark Office (USPTO) and the American Intellectual Property Law Association (AIPLA) was busy hosting a travelling roundtable discussion on China’s system for the procurement and enforcement of utility model and design patents. The aim of the roundtable was to afford US lawyers, companies and the public understanding about how China’s utility model and design patent system. The AmeriKat and IPKat's good friend, Michael Lin, of Marks & Clerk (Hong Kong) was there reporting on the key issues discussed at the event:

The USPTO's Elaine Wu started off the roundtable, and key note speeches by the USPTO's Dave Kappos and AIPLA's President, David Hill, (picture right) emphasized the growing importance of understanding IP in China via actual discussion with on-the-ground experts vs. the reliance on hearsay. To this end, the AIPLA and USPTO are jointly sponsoring this traveling roundtable discussion program with subsequent events being planned in the US and China.

Microsoft's Director of International IP Policy Mark Cohen laid out the background and framework of Utility Models ("UMs") and Design Patents in China and their alternative as a cheap and fast form of IP protection. Mark also showed some interesting statistics that it is overwhelmingly Chinese entities who are filing and using UMs and Designs Patents. Discussion followed as to the root causes of this, and why relatively few foreign entities apply for Chinese Designs, and particularly UMs. US practitioners are typically unfamiliar with UMs because they are not available in the US, although some other countries (Germany, Japan, etc.) do have them. While many countries have Designs Patents, few foreigners file their Designs Patents in China, as their scope is generally regarded as being quite narrow as dotted-lines (i.e., partial designs) are not allowed.

Elaine chaired the first panel discussion with Thomas Moga (Shook, Hardy & Bacon) (picture, right) explaining his interesting uses for Design Patents in China beyond what is typically allowed in the US. Meanwhile, Toby Mak (Tee & Howe) explained that the subject matter of UMs in China is limited to physical objects whose novel element is related to the shape or construction thereof. Thus, protection of chemical compositions, methods of use, etc. are not allowed via UMs. Toby also discussed the procedure for concurrently filing for both Invention Patents (i.e., US-style Utility Patents) and UMs in China. Toby also explained that by filing for both a UM and an invention patent in China, you can obtain both short-term protection as well as long-term protection; once the invention patent is ready to grant, then the Examiner may ask you to elect to keep either the UM or the Invention patent and abandon the other one in order to avoid double-patenting. IBM's Associate General Counsel for IP, Manny Schecter explained that IBM does not file for such IP in China (or elsewhere) as they are not subject to substantive examination and therefore their enforceability is highly suspect, even when granted. It seems that IBM, for one, simply wishes to have greater assurance that any of its granted patents are actually ultimately enforceable.

Skip Fisher (Perkins Coie) (picture, left) then chaired the panel discussion about enforceability of UMs and Design Patents. Michael Lin (Marks&Clerk, Hong Kong) led off the discussion about enforcement via China-specific administrative routes such as at Customs, local raids, seizures, and at trade shows. Ultimately, Michael believes that UM and Design Patent enforcement is possible in trade fairs, especially for exact copies. However, enforcement via customs and other administrative routes are more difficult than, for example, trade mark enforcement. Ping Gu (Unitalen) discussed the many complicated issues involved with legal enforcement of IP via the Chinese court system. Geoffrey Lin (Hogan Lovells) described his personal involvement with the Chint v. Schneider case which resulted in the largest ever IP judgment in China of 330 Million CNY ( about US $44 Million). Although IP litigation in the courts is increasing and the judges are getting better, evidence collection, forum shopping, local court regulations, political factors, etc. may all greatly affect the result of first-instance litigation. However, the availability of appeals to a higher court may in some ways mitigate these effects. As China has virtually no "discovery" available to plaintiffs, all panelists agreed that the collection of court-acceptable evidence prior to initiating litigation is essential and remains a serious problem in China.

The roundtable concluded with USPTO's Albert Tramposch heading an open discussion with all participants identifying issues (e.g., susceptibility of UMs and Designs Patents for abuse by NPEs, lack of a duty of disclosure, lack of substantive examination before grant, etc.) and discussing potential future actions, law changes, administrative, changes, etc. to address some of the issues. Participants hope that China will pay special attention to legal and administrative transparency and further improve equal treatment under the law.

Overall, it was a highly informative roundtable with excellent questions and observations from both the audience, presenters and panellists.

The AmeriKat thanks Michael for reporting and AIPLA and USPTO for organizing this roundtable. She is often surprised daily about how many UK IP lawyers do not take action in China or are unaware of what is available to them and their clients in China. Does anyone know if the UK IPO has planned or will be planning something similar for the UK audience?

AIPLA-USPTO roundtable here.
Round pool table here.
A famous Round Table here.

A round robin here.