In a volatile environment, where the dynamics of law governs the outcome of judicial decisions, corporate legal executives must continuously remain proactively compliant and vigilant in all areas of legal management and regulatory revisions. In such a sphere, complacency results in high cost incurrence, corporate framework collapse and irreparable disrepute.
The Chief Litigation Officer Summit provides a revolutionary platform for senior in-house litigators to strategize on the litigation process, as they endeavor to provide augmented corporate defense and representation.
With the ever changing issues and regulations surrounding IP and Patents, managing the increasing complexities within IP Litigation and keeping within budget, along with successfully controlling brand crises, emerging triumphant from patent prosecution, keeping on top of licensing activities are all pertinent to the protection of the organizations IP and keeping your corporation out of the headlines.
The IP Law Summit discusses key strategies for managing your IP issues, forges new relationships and generates new business opportunities with a distinguished group of IP Counsels from a cross-section of Corporate America.
The most recent IP Law and Chief Litigation Officer Summits took place in Florida in September 2017 continuing a tradition of providing an intimate environment for legal executives and selected service providers to engage in a meaningful way.
Keynote speakers will discuss the monetization of IP, Cyber Security and Privacy, Ethics and Litigation Abuse and International IP at the upcoming IP Law Summit in March 2018. At the Chief Litigation Officer Summit, they will share insights on litigation management, labor and employment; recent developments and emerging trends, litigation prevention; assessing risk management strategies and the new administration’s impact on corporate legal departments.
As this is a co-located event, all attendees will have the opportunity to network and mingle between themselves maximising their time onsite.
The Vice President, Assistant General Counsel from Orthofix International N.V: “Provides companies with lots of opportunities and options to serve their legal needs. Loved the diversity of qualifications and background of outside counsel.”
The Associate General Counsel Products and IP Law from Informatica LLC comments: “The summit is an excellent networking opportunity and educational opportunity. I really appreciated the opportunity to exchange ideas with top in-house counsels.”
More information about the Chief Litigation Summit 2018 here.
More information about the IP Law Summit 2018 here.
Trademarks and service marks are essential and valuable assets of a company. They are used to identify the source of a particular good or service to the consuming public and are an indicator of the quality of the goods or services provided. A protected mark for a specific good or service helps a business increase its recognition and consumer loyalty. Additionally, an owner’s right in the mark continues to grow through use in commerce.
In the United States, a mark can be registered at either the state or federal level; however, prior to selecting a particular mark for a product or service, a trademark-screening search should be performed on all state and federal registered marks as well as pending marks. Based on the results of the search, a determination on whether to seek federal registration for the trademark can be made.
In America, trademark rights exist in both traditional and non-traditional marks. Words, phrases, symbols, logos and/or designs are all examples of traditional trademarks. In addition, to these traditional marks, exclusive rights can also exist for a particular color, sound, scent and/or any combinations of these. For the purpose of this article, we will focus specifically on non-traditional trademarks.
The Trademark Act of 1946, known as the Lanham Act, governs trademark matters in the United States. In the Supreme Court decision Qualitex Co. v. Jacobson Products Co, the Court ruled that non-traditional trademarks could be protected (514 U.S. 159). In order to protect a non-traditional mark, the Court required a finding of “secondary meaning.” “Secondary meaning” exists when the relevant consumers identify a particular mark for a certain product or service. This is typically due to an extended period of use of a mark for a specific service or good. This can be proved by submitting evidence that the mark has acquired distinctiveness through proof of sales success, advertising and promotional expenditures. This substantiates the length and exclusivity of use. Evidence can also include unsolicited media coverage confirming this fact, statements in the form of affidavits from industry leaders recognizing the mark as a source identifier as well as consumer studies and surveys substantiating this fact.
For trademark protection in a particular color, the color must “act as an indicator of source” and not serve any function. A few prominent examples of protected colors include: Home Depot’s “orange” color for “retail home improvement stores” (Reg. No. 4,300,027); Tiffany’s particular shade of blue used on its bags, boxes and catalogue for “Jewelry” (Reg. No. 4,804,204); Owens-Corning’s “pink” insulation for “foam insulation for use in building and construction” (Reg. No. 2,090,588); and, United Parcel Service’s (U.P.S.) “chocolate brown” as applied to the entire surface of its vehicles and employees’ uniforms for “transportation and delivery of personal property by air and motor vehicle” (Reg. No. 2,901,090). These protected colors have achieved secondary meaning, as the consuming public associates the protected color with the services provided by those companies. To protect a “color,” it is essential that the “color” is only used for promoting the brand’s identity without affecting the goods or services’ functionality.
Trademark rights may also exist in a particular sound that is distinctive and is describable in words. For example, a common telephone ring cannot become a registered trademark; however, a unique sound or musical arrangements utilized to indicate the source of specific goods or services can be protected. Examples of protected sounds include: NBC Universal’s chimes, described as “a sequence of chime-like musical notes which are in the key of “C” and sound the notes “G,” “E,” “C,” the “G” being the one just below middle “C,” the “E” just above middle “C,” and the “C” being middle “C” for “the broadcasting of television programs” (Reg. No. 916,522); MGM Studio’s “lion roaring” for “motion picture films and prerecorded video tapes” (Reg. No. 1,395,550); and, AFLAC insurance’s protected “sound of a duck quacking the word ‘AFLAC’” for “Insurance underwriting services in the fields of dental, health, life, cancer, hospital intensive care, accident and disability, hospital indemnity, hospital confinement indemnity, Medicare supplement, sickness, home healthcare, long-term healthcare, and convalescent health care” (Reg. No. 2,607,415).
Finally, a unique scent can also be protected as long as evidence exists that the scent has acquired distinctiveness for the listed goods or services and is not a functional part of a product. Examples of trademarked scents include: The Eddy Finn Ukulele Company’s “piña colada” scented ukuleles (Reg. No. 4,144,511); Brazilian company, Grendene’s “bubble gum” scented “shoes, sandals and flip flops” (Reg. No. 4,754,435); and, Lactona Corporation’s “strawberry” scented toothbrushes (Reg. No. 3,332,910). However, a particular perfume scent, such as “Chanel No. 5,” is unable to be registered due to the functionality requirement. Unlike many of the other forms of non-traditional trademarks, scent marks are extremely rare in the United States. This is due to the fact that the USPTO requires “substantial” evidence to prove distinctiveness (Trademark Manual of Examining Procedure § 1202.13). If an applicant is unable to demonstrate that a scent has acquired distinctiveness, the scent can only be registered on the Supplemental Register (Trademark Manual of Examining Procedure § 1202.13).
The use of traditional and non-traditional trademarks by a company is necessary for a business to distinguish themselves from their competitors. Without them, companies would be susceptible to similar products or services mimicking the successful aspects of the their brand. By extending protection to non-traditional, unique identifiers of a particular good or source, brands are able to fully protect the distinctive aspects that make their company’s unique services and products.
This article is not intended as legal advice as a professional specializing in the field, such as an attorney, should be consulted.
On 6 July 2017, New Zealand joined the Global Patent Prosecution Highway (GPPH) pilot programme. Under the GPPH, an applicant can speed up examination of its application in a GPPH-participating country if claims of a corresponding application have been allowed in another GPPH-participating country.
Over 20 countries are now in the GPPH including Australia, Canada, Germany, the United Kingdom, Japan, Korea, Singapore and the USA.
In order to expedite examination under the GPPH in New Zealand based on another application in a GPPH-participating country:
the applications in both countries must share the same earliest filing date or priority date;
at least one claim in the other application must have been found to be patentable in the GPPH-participating country;
the claims of the New Zealand application must sufficiently correspond to (be identical, similar, or narrower than) the patentable claim(s).
Expediting examination under the GPPH does not guarantee acceptance. While expediting examination of an application would result in the Patent Office of the GPPH-participating country examining the application sooner, the Patent Office would still examine the application in accordance with its local patent law.
The addition of New Zealand to the GPPH allows patent attorneys to expedite and minimise the cost of multi-national patent examination.
We have previously commented on the remarkable properties of the Australian innovation (8 year) patent here and here. Not the least of those properties is the ability of innovation patents to be infringed before they are filed. Recent authority deprives innovation patents of this ability. Nonetheless, innovation patents remain a prominent feature of the Australian patent landscape and should be considered as part of any Australian patent filing strategy.
On 3 April 2017, Justices Jagot, Nicholas and Burley handed down their unanimous judgment in Coretell Pty Ltd v Australian Mud Company Pty Ltd  FCAFC 54 by which they stripped innovation patents of their ability to be infringed before they were filed.
Prior to this decision, such ‘retrospective infringement’ could occur in the context of an innovation patent granted on a divisional patent application. By way of example, an international patent application could be filed, subsequently enter the national phase in Australia and then, perhaps years later, provide basis for a divisional patent application on which an innovation patent might be granted. Earlier authority held that damages could be payable in respect of acts infringing the innovation patent occurring as far back as the international filing date, i.e. potentially years before the innovation patent was filed.
This ability for retrospective infringement in conjunction with the other remarkable properties of innovation patents made them very powerful litigation tools. By preserving a pending Australian patent position, innovation patents can be filed after a competitor enters the Australian market and with claims crafted to target the competitor’s activities (and of course in terms adequately linked to the disclosure of the pending applications pre-dating the competitor’s activities).
In view of these recent developments, this remains a powerful and often appropriate strategy, albeit now that, as the law currently stands, damages for early infringing acts will not be recoverable.
Under the new regime, infringing acts are first recoverable on the day that the innovation patent is ‘granted’. We show ‘granted’ in quotations because in the context of innovation patents the term is a misnomer; whilst it is the term used in the Australian legislation, it is very misleading. Australian innovation patents are granted after a basic formalities check but without substantive examination. As such, the grant of an Australian innovation patent is akin to the acceptance of a US utility patent application.
Beyond being ‘granted’, innovation patents must pass the additional, and usually optional, step of substantive examination before the patent can be enforced or threats of enforcement can be made. Substantive examination can often be completed within three or four months of filing for the innovation patent. This relatively short timeframe is one of the factors that makes filing a targeted ‘post-infringement’ innovation patent application an attractive option.
Another feature making this an attractive option is that there is no effective mechanism for inter-partes interference at the Patent Office level. Inter-partes opposition proceedings cannot be initiated until substantive examination has been passed. At the same time, the patentee has the option of initiating infringement proceedings in the Australian Federal Court. Upon the commencement of such proceedings, any inter-partes opposition before the Australian Patent Office must cease.
So whilst innovation patents have been stripped of their ability to be infringed before they are filed, they should continue to be considered as part of any Australian patent filing and/or patent litigation strategy. Indeed, if anything, this latest decision is motivation to file innovation patents sooner rather than later.
These strategic considerations are, of course, something to discuss with your Australian patent attorney, particularly in relation to any commercially important inventions that warrant the additional protection afforded by having an innovation (8 year) patent running alongside a standard (20 year) patent application.
Ben Mott: Principal; Mechanical Engineer & Patent Attorney at Wadeson.
Legal information regarding the difference between copyright licences and copyright assignments (English law)
Copyright is a term often associated with the music and film industry, however it applies to all creative and artistic works. Copyright requires no formal registration and will subsist for a period of up to 70 years from the creator’s death, thus making it one of the most difficult intellectual property rights to keep track of. Those who hold copyright in a piece of artistic work will often look to license their work to allow others to utilise it and in return they will be the recipient of royalties. In the alternative, the creator may choose to assign/ transfer the copyright to an individual or a company usually in return for a monetary sum. A licence and a copyright assignment are distinguishable yet are often confused, whether an individual or a company is granted a licence or an assignment will ultimately be the decision of the copyright holder.
There are several types of licences which can be granted in relation to a copyright. A licence is often granted in the form of a licensing agreement; the agreement will usually be easily identifiable as that of a licence rather than an assignment as it will usually stipulate a time period which the licence is granted for. A perpetual licence can be granted in relation to copyright, these are licences which are granted for an indefinite period.
The licensor will have the discretion to grant either a non-exclusive, exclusive or a sole licence. A non-exclusive licence will permit the licensor to grant licences to other individuals or companies for the same copyrighted work. In the alternative an exclusive licence does not permit any individual or company except the named licensee to exploit the copyrighted work including the licensor themselves. Although, a sole licence resembles an exclusive licence, the differing factor is that if a sole licence is granted the licensor reserves the right to fully exploit the protected work themselves.
A non-exclusive licence does not grant the licensee the right to enforce the intellectual property right in relation to a claim for infringement. Whereas, an exclusive licence or a sole licence, does allow the licensee to pursue a claim for copyright infringement.
A copyright assignment differs from a license in that it is a transfer of the title to the copyright to the assignee. A copyright assignment is often viewed as being akin to a sale of property, the implications of this being that the sale is final and cannot be revoked. It is worth noting that the Copyright, Designs and Patents Act 1988 (CDPA) brought into English law the concept of moral rights. Moral rights under English law cannot be assigned or transferred in the copyright and will remain with the original creator, this is an ultimate form of protection for the assignor. There are several moral rights, including;
The right of paternity – This right applies only if the right has been asserted by the author and is found in s 77 of the CDPA.
The right to object to derogatory treatment – s 80 of the CDPA,
The right against false attribution of work – s 84 of the CDPA.
The right to privacy in private photographs and films – s 85 of the CDPA.
A copyright assignment is a legally binding document and under English law only requires the signature of the original creator. A copyright assignment can also be drafted in the form of a deed. If the assignment is drafted as a deed then the deed will need to be validly executed.
We are a modern and progressive intellectual property law firm and operate a new legal services business model which significantly reduces our overheads and which means we can transfer the benefit of those cost savings back to our customers in the form of competitive fee rates.
The IP of IoT – Top 5 Companies and How Their IP Pans Out (Inc. Google, Verizon, Cisco, General Electric & Amazon)
The Analysis Summary
The Physical Objects are linked through wired and wireless networks, the advantage being that they are deployed on the same Internet Protocol (IP) that connects the Internet. What’s fascinating is the ability of these modern gadgets to sense the environment and communicate. With the ability of these devices in understanding the complexity of the data analysis and then act accordingly in providing the solution has had a great impact in every technological sector one can imagine.
With continued advancements in artificial intelligence, these modern gadgets have the ability to work without human intervention. Moreover, with the frequent base users shifting to smartphones and also the deployment of these gadgets becoming cost effective, the IoT is set to dominate the next decade pervasively.
This landscape report tries to cover the patented technologies for the world’s top five IoT companies and details out what are the critical technologies that these innovative companies are working on. This report also covers the timeline of these companies in terms of patent filings related to internet of things. We also uncover important mergers & acquisitions that have happened involving these companies to further boost their intellectual property related to the Internet of Things
The internet of things is enabled by the use of sensors, actuators and communication technology which is embedded into gadgets that streamlines tracking and controlling of these gadgets over the wired or the wireless network such as internet. To make this work, generally a three step process in undertaken:
Capturing the data from the sensors,
Extracting the data from the network, and
Analyzing the data and drawing conclusions
This will lead to intelligent decision making abilities leading to improved efficiency and productivity for the same things which were earlier not part of the phenomena of Internet of Things. This has opened larger avenues for new types of products and services applicable to multiple industries.
The sensors alone will just gather data, evaluates and measures it. This all will be meaningless if the sensors are not properly connected to the machines to actually leverage something out of data. The best way forward to actually harness the true potential of IoT is through cloud based applications. This is because an alternative is expensive – having a vast infrastructure in place for all the data gathered from the sensors worldwide. Hence, the role of Cloud based applications becomes critical. This is why the top companies we have analyzed in this report actually are the market leaders in terms of research and patenting activity.
According to a study from Business Insider, The IoT will result in $1.7 trillion in value added to the global economy in 2019. That is a huge number.
This industry is all set to take over the smartphone industry and the forecasts indicate more than 20 Billion devices connected by 2020. The main research focus has been on making the technology secure, robust, and more efficient.
There are many verticals of adoption for the IoT, from wearable devices, to cars, smart homes, cities and industrial equipment.
The global wearable market is expected to reach a value of around 53.2 billion U.S. dollars in 2019, more than ten times its value five years prior.
It features items such as smart watches, fitness and health trackers, or even smart jewelry and smart clothing.
Smart watches and health & Fitness trackers are expected to account for more than 70 percent of all wearable’s sales worldwide in 2016.
Another Industry that has grown significantly is the Smart homes industry which is expected to be roughly of around US $60 Billion by 2020.
McKinsey Global Institute predicts that by 2025 the Internet of Things will generate up to $11trillion in value to the global economy.
Moreover, Software and services is pegged to be a $600B market by 2019, attaining a 44% CAGR from 2015 to 2019.
These facts from Business Insider also predict the number of devices connected via IoT technology will grow at a 35% CAGR from 2014 to 2019.
As we cover the Intellectual Property patterns of the five of the market leaders, we can realize how this fast evolving market is shaping up over the next five years.
Patent analysis for the companies in this report focuses on patents and applications filed in the United States. Foreign filings listed are only family members of the US patents and applications and not the complete list of patents and applications in jurisdictions other than the US
It should be noted that analysis related to top five companies in IoT for 2016 have been covered in this report. The charts represent the patent related figures for the data gathered upto October 31, 2016.
We have tried to cover maximum industries possible related to Internet of Things. However, these should not be assumed to be an exhaustive list of applicable industries.
The revenue related information and other market figures have been relied upon from other web resources such as Gartner, McKinsey and other technical blogs.
Google – Patent Filing Trend
Google – Technology Bifurcation
Google – Activities Related To IoT
Mergers and Acquisition
Google Buying Nest in January 2014.
Google purchased it for 3.2U.S. $ Billion.
This bolstered the Google’s portfolio of Smart homes.
Google acquired DropCam through it’s Nest Labs subsidiary in June 2014.
Dropcam is an American technology company headquartered in San Francisco, California.
The deal was finalized for U.S. $555 Million.
Google’s £400 million acquisition of DeepMind happened in 2014. DeepMind is a British artificial intelligence company.
Google Nest Thermostat
CO + Smoke Alarm
Cisco – Patent Filing Trend
Cisco – Technology Bifurcation
Cisco – Activities Related To IoT
Mergers and Acquisition
2016: Cisco completed acquisition for Jasper for $1.4 billion. Japer is a cloud platform for IoT services such as connecting devices, delivering analytics and automating business functions.
2015: Cisco acquired ParStream, a privately-held company based in Cologne, Germany which develops highly specialized analytics databases built to analyze large amounts of data and store it in near real-time, anywhere in the network.
2015: Cisco acquired Piston Cloud Computing. Piston provides software that enables streamlined operational deployment of large scale distributed systems. Piston’s enterprise grade software helps customers automate orchestration and deployment of underlying distributed systems for running applications on OpenStack.
2014: Cisco acquired Metacloud. Metacloud deploys and operates private clouds for global organizations with a unique OpenStack Private Cloud as-a-Service.
CISCO IoT System Security.
Integrated Service router – IR8x( Series with embedded GPS and other sensors.
Cisco Mobile IP Gateway 2450 – Improving communication between the Back office and Transit vehicles.
Cisco IoT Field network Director Software Platform.
Cisco IoX: Cisco IOx provides uniform and consistent hosting capabilities for fog applications across Cisco IoT network infrastructure.
Verizon– Patent Filing Trend
Verizon– Technology Bifurcation
Verizon – Activities Related To IoT
Mergers and Acquisition
2016: Sensity Systems Inc., a private company based in Sunnyvale, California. It was acquired in September 2016 to bolster their Smart City Initiative.
2016: LQD WiFi – a New York based company was acquired to further strengthen Smart City portfolio.
2016: Verizon acquired Telogis in June 2016 for its highly successful cloud based vehicle fleet management software.
2016: Fleetmatics – another telematics company was acquired by Verizon.
The AOL acquisition of 2015 was indirectly aligned with Verizon’s IoT strategy by using Video and Advertising distribution technologies from AOL.
2012: Hughes Telematics was the first company related to Telematics that was acquired by Verizon that kickstarted their IoT startegy.
Intelligent Traffic management
Amazon – Patent Filing Trend
Amazon – Technology Bifurcation
Amazon – Activities Related To IoT
Mergers and Acquisition
2016: NICE, based in Asti, Italy, which develops software and provides services for “high performance and technical computing” was acquired by Amazon to further boost Amazon Web services.
2015: Amazon acquired 2lemetry, a Denver-based startup which develops highly specialized analytics databases built to analyze large amounts of data from connected things
2015: Amazon acquired a Portland based video processing company Elemental Technologies.
2015: Amazon acquire a cloud technology startup ClusterK – whose tools cut down on cloud service costs by taking advantage from Amazon Web Services called Spot instances
2015: Israeli chipmaker Annapurna Labs, purchased for a reported price of $350 million which indicates Amazon’s entry strategy to develop servers and chips to connect the things worldwide.
AmazonDash – The Dash tool let’s user create their grocery list on Amazon by scanning barcodes on products at home.
Amazon Delivery Drones
Amazon Web Services EC2 (Elastic Compute Cloud)
General Electric – Patent Filing Trend
General Electric – Technology Bifurcation
General Electric – Activities Related To IoT
Mergers and Acquisition
2016: Service Max – Software for tracking equipment performance and industrial scheduling. It was bought for a whopping $916 Millions
2016: BitStew was acquired for $ 207 Million to integrate their analyzing and modeling of the data abilities within the Predix Platform
2016: Wise.io was acquired which deals in machine learning to improve customer service efficiency
2016: Meridium, an asset performance management software was also acquired and integrated with Predix
2016: Shipexpress a supply chain company was also acquired to tap into efficient railway shipping and transportation.
2016: Daintree Networks for Networked Lighting Systems
2016: Wurldtech – a cyber security company
Electricity Value Network (EVN) – Digital Power Plant
Security for the Industrial Internet
GE Asset Management
IoT adoption stands to grow significantly, in the next 18 months. It is likely because of falling costs, the continuing convergence of data and services and ever-increasing IoT technology simplification—a factor of utmost importance to consumers in particular. With simplicity at its core, Homeowners can look forward to address a range of everyday issues, from controlling and monitoring home security and environmental conditions to monitoring their teenagers’ driving habits.
The cost efficiency, convenience, simplicity and security of connecting things will drive wider societal changes. This will eventually lead to increase in sharing economy with the growth and flourish by the use of connected cars and household gears. With the increased use of connected devices, the Neighbors can easily check for car’s availability in their neighborhood for pooling and likewise whose household tools they can borrow to get the work done rather than going through the whole process of going to the store spending huge sums and buying the tools which apparently will hardly be used after the work is done.
Eventually, the ability to track usage will create new service categories. Rates for insurance and healthcare will be based on usage and behavior, which can be tracked through IoT.
With technology identifiable by everyone in today’s world, Innovation, productivity and value will thrive as private companies and the public sector both come to the inevitable conclusion that IoT is imperative to delivering the integrated, easy to use and sustainable products and services.
About the Author:
Jay Sharma – Client Engagement – Citius Minds Consulting LLP
Citius Minds is a leading technology consulting firm supporting clients in advanced patent analytics and end to end patent litigation services. Together, Citius Minds’ founding consulting experts have more than two decades of experience supporting the world’s leading companies and law firms in their IP management needs.
Our Service Portfolio Includes:
Patent Landscape Analysis
Patent Invalidity Analysis
Target Scouting and Infringement Identification
Portfolio Analysis and Transactional Advisories
Patent Litigation services
Disclaimer: This document is intended for general informational purposes only, does not take into account the reader’s specific circumstances, and may not reflect the most current developments.
[Update at April 2017 – see our recent post Australian Innovation Patents Retrospectively made Non-Retrospective here.]
When embarking on a multi-national patent strategy, Australia should always be one of the countries considered. As we have previously written (here):
“On any measure, the Australian innovation patent is excellent value… Australia has the 13th largest economy in the world …. Energy, agriculture, mining, oil & gas and medical devices are all well-established industries”.
Innovation (8 year) patents can have an important role to play in any Australian patent filing strategy. They can be pursued as standalone protection or alongside a standard (20 year) patent (or patent application), and standard patent applications can be converted to innovation patents (but not vice versa). If Australian patent protection is of interest filing innovation patents may well be appropriate:
When faced with lack of inventive step objections (e.g. in an International Search Report (ISR)) – innovations patents require an innovative step rather than an inventive step. This is a much lower standard. Essentially any functional point of difference will suffice.
If and when an infringement appears in the marketplace – as long as an Australian standard patent application remains pending a divisional patent application for an innovation patent can be filed. Typically this is preferable over simply expediting the examination of the standard patent application.
As an additional layer of protection when a standard patent application is accepted – having an innovation patent on hand will significantly improve the patentee’s position in respect of any infringing acts occurring during the 8 year term of the innovation patent.
If the costs of prosecuting a standard patent application are no longer warranted – instead of abandoning the standard patent application, conversion to an innovation patent may be appropriate. Innovation patents are not substantively examined as a matter of course. Typically, maintaining an innovation patent requires only the payment of modest annuities.
By working with your Australian patent attorney to creatively exploit the innovation patent system it is often possible to secure much broader patent protection than is available in other jurisdictions and at a cost much lower than you might expect.
MA Taiwanese Literature, National Taiwan University
BA Chinese and Spanish, Leeds University, UK
Translator/Editor, Want China Times
Editor, Erenlai Magazine
Wang Mei-hua, the director of the Taiwan Intellectual Property Office (TIPO), has big plans for the future of the Office, including establishing Priority Document Exchange (PDX) and Patent Prosecution Highway (PPH) agreements with China and incentivizing Taiwanese companies to invest in FinTech R&D. We sat down with her to discuss this, along with the extent to which Taiwan has strengthened IP protection over recent years and the recent slump in applications by domestic companies.
Wang is from a legal background, graduating from the National Taiwan University Law Department before going on to spend much of her career in posts within TIPO. She was appointed as director by former president Chen Shui-bian (of the Democratic Progressive Party) and her husband is DPP legislator-at-large and prominent lawyer Wellington Koo, who featured on the party lists in the recent election after having served as legal counsel for now President-Elect Tsai Ing-wen, as well as for the students who participated in the 2014 Sunflower Student Movement. Wang has served in her current post for just over 8 years, in which time she has overseen the signing of Patent Prosecution Highway (PPH) agreements with the US, Japan, Spain and South Korea and cross-strait agreements on intellectual property right protection and cooperation. In addition to this, under her tenure, there have been amendments to Taiwan’s patent, trademark, copyright and trade secret acts and the Office has launched international initiatives between examiners from different countries to improve examination standards. She says that she has also worked closely with industry heads in order to ensure that the Office is serving its purpose in promoting innovation.
Although she stated that the number of patents Taiwanese nationals and corporations applied for overseas has remained more or less level, Wang acknowledged the fall in patent applications in Taiwan by Taiwanese nationals and corporations over the last 2-3 years, citing Fig. 1-3 below and attributing it to the economic downturn in the country, a fall in exports and the exodus of business people to China.
She challenged the idea that a fall in patent applications indicates a lack of innovation, however, and stated that consultations held annually from 2014-2016 with business owners had suggested to her that costs and disclosure requirements are stopping companies from patenting smaller inventions. She also stated that businesses had turned their patent strategy towards China and the USA, where their main competitors are located. She pointed to a change in patent strategy by one of Taiwan’s major patent applicants, Hon Hai Precision Industry, which trades as Foxconn in China, as having a disproportionate influence on the figures for patent applications in the country. She said that Hon Hai along with other Taiwanese patent holders are developing a more sophisticated outlook on their patent portfolio. Many companies have invested heavily in patents in previous years and this has led to increasing maintenance costs arising from renewal fees. Wang stated that this has been a major factor when companies are considering applying for new patents and has led to more conservatism.
Another possible reason for the slump, said Wang, is the high rate of invalidation of patents and the low rate of compensation for infringement since the establishment of the Intellectual Property Court in 2008. This has led to questions as to the viability and effectiveness of the court. Wang stated that the rate of invalidation has fallen from an average of 59.5% from July 2008- December 2014, to an average of 44.35% from Jan-Dec 2014. The revocation rate after final decision on invalidation also fell from 54% to 43%, with patents revoked by the IP court averaging at 27%. Taiwan’s patent approval rate also grew from 53% to 57% between 2009 and 2013. The table below compares the patent grant rates for the IP offices of four of the IP5 countries/regions.
Taiwan’s patent approval rating was 57% in 2013, putting it in between the 49% approval rating in Europe and the 69.8% approval rating of Japan and the 70.7% approval rating in the US; Taiwan’s approval rating grew further to 63% in 2014.
There are very few invalidation cases in Japan (only 150 in 2014) corresponding to a very low invalidation rate of 26%, whereas in the US the rate by which patents were revoked by the Patent Trial and Appeal Board (PTAB) was pegged at 70%. In Taiwan the 2014 invalidation rate stood at 44.35%, putting it between the US and Japan. Wang stated that the invalidation rate in Japan previously soared after the establishment of an IP court there in a similar way to hike in the rate in the US, but this rate gradually fell.
Wang cited measures being unrolled by the Taiwanese government to encourage R&D and lead to increased patent protection, including the establishment of Ministry of Science and Technology (MOST) Germination Plan Functional Units – aimed at developing practical and commercial technology – at eight of Taiwan’s top universities, as well as the formation of major and minor industry-academia alliances; the former focused on matching academic research teams with Taiwan-based transnational tech giants, in order to develop novel advanced technologies; while the latter is aimed at establishing laboratories to undertake research helpful for Taiwan’s small and medium-sized enterprises (SMEs). She said that measures were also being explored to ensure that patents serve as a proper incentive for research and development by universities, research institutes and corporations, by pushing up the revenue derived from them.
Wang said TIPO has made proactive efforts to provide assistance to industry, citing the Office’s recent efforts to encourage industry participation in the development of the Financial Technology (FinTech) sector, and investigate the reasons the sector in Taiwan is currently lagging behind its international peers. She said that funding for R&D is mainly being provided by the Ministry of Economic Affairs’ Department of Industrial Technology, the Ministry of Science and Technology and the Council of Agriculture. The decentralized nature of this funding structure, however, results in R&D being a little scattered, and Wang called for a reorganization to ensure that funding is more targeted.
Another major government role in encouraging innovation is improving the role of creativity in the education system starting from elementary school level she stated, citing efforts to create links between industry and education at all levels. TIPO is also attempting to improve the level of professionalism within the patent system with its specialist academy dedicated to intellectual property education, the Taiwan Intellectual Property Training Academy (TIPA), directed at providing training to patent agents and examiners, which is expected to reduce infringement and bring down the level of patent invalidation as the quality of patents and examinations improve.
Wang stated that Taiwan is an attractive destination for foreign patent applicants, due to its international standing in R&D in the ICT sector, as well as its strategic geographical position allowing it to serve as an effective stepping stone for firms to expand their patent portfolio into Asia. This is due to Taiwan’s substantive legislation in the area of intellectual property, as well as its links to both the Chinese and the global market, she said. Although, at China’s insistence, Taiwan has not been granted membership of the United Nations World Intellectual Property Organization (WIPO), it still abides by WIPO resolutions and its legislation is kept in line with the international community and international treaties. A specialized intellectual property police force has also been established in Taiwan, something uncommon in the international community, said Wang.
Another attractive aspect of the Taiwan patent environment is the relative speed and quality of substantive patent examinations in Taiwan, as it ranks ahead of China and many other countries in terms of speed of examining foreign patents, at 23-24 months after filing date (date of submission of the English-language specification). Wang even speculated that if measured on the same metric, TIPO may even be faster at processing foreign applications than the Japan Patent Office. Patent maintenance fees in Taiwan are also relatively low compared to China. According to Article 12-1 of the Statute for Industrial Innovation, corporations obtaining stocks in exchange for their patented technologies may have their taxes deferred. This is expected to attract foreign investment to the country.
Although Taiwan and China have similar patent systems overall, China has instituted measures over recent years intended to encourage businesses to apply for more patents, said Wang. This has led to a lot of abuse in the Chinese system, with a lot of low-quality patent applications made simply to secure incentives. Taiwan does not have this kind of system in place, which means that companies cannot profit from low-quality patents in the same way as their Chinese counterparts.
Both Taiwan and China have three main types of patents: invention, utility model and design. In Taiwan design patents are also subject to substantive examinations, whereas they only go through a “formalities” examination in China. Partial designs are already patentable in Taiwan, whereas in China, they cannot be patented. The term of a design patent is 12 years in Taiwan and only 10 years in China.
In terms of administrative remedies, China has a well-established and independent patent reexamination board that handles reexamination and invalidation cases, said Wang. If the applicant disagrees with the board’s decision they can file a lawsuit. In Taiwan, however, both the reexamination and invalidation systems are administered by TIPO, she said. If the applicant disagrees with the decision, they first have to file an administrative appeal and then file a lawsuit with the IP Court, which handles both patent administration and civil lawsuits, said added.
Other differences include that in China, the patent authorities have administrative authority to settle disputes over patent infringement, fake patents, or defaults on patent licensing agreements. In China, patent border protection measures are stipulated in the Regulations on Customs Protection of Intellectual Property Rights. The measures in question can be divided into “requested protections” and “ex officio protections.” In Taiwan, patent border protection measures are listed under the Patent Act. The Patent Act does not require ex officio seizure of infringing products. Rather, seizures need to be requested. This is because it is hard for customs personnel to determine which goods may infringe a particular patent, Wang said.
Wang also revealed that TIPO is in talks with China’s State Intellectual Property Office (SIPO) regarding a priority document exchange (PDX) agreement, and that this will hopefully pave the way for talks over establishing a cross-strait Patent Prosecution Highway (PPH).
We also asked Wang how Taiwan compared to the US in the post-Alice era when it comes to the patentability of software and business methods. Wang stated that if the Supreme Court interpretation is followed to the letter by the USPTO in the US, this would make it extremely difficult to obtain patents of this kind there. In Taiwan, she stated, software patents are patentable, but inventors must meet certain requirements, such as novelty and incorporating an inventive step. Taiwan’s policy on software patents is based on the experience of the US, Europe and Japan, amongst other countries, but the main requirement is that there is a technical character to the patent matter and that it is novel. Any non-technical aspects of the patent matter must also interact with this technical aspect, she stated. If you want to patent software, it cannot just use already existing functions to solve equations or to realize commercial goals. Wang said that Taiwan’s Patent Act is more in line with legislation in the EU and Japan, than the US, adding that the major applicants for software patents in Taiwan thus far have been from Chinese in e-commerce and internet giants like Taobao and Tencent.
DIGITAL LIBRARIES: SOLUTION or PROBLEM FOR ORPHAN WORKS
The definition of an orphan work includes any type of work subject to copyright protection, in which its author or his/her successors in title (rights holders) are not known or if known are not able to being located. This is the meaning given by the Directive 2012/28/EU of the European Parliament and of The Council of 25 October 2012 on certain permitted uses of orphan works (hereinafter Orphan Works Directive or OWD) that according to its Article 2 in order for a work to be taken as an orphan work there should have been an inconclusive “diligent search” beforehand. The appointed reasons for the existence of orphan works are, for example, the difficulty in finding the relatives of the deceased author, the bankruptcy of a company or even the situation where an author does not want his/her work to be copyright protected.
This is a big problem as copyright term is extended and when one takes into account that only in the UK there are around 13 million orphan works according to a survey. In an estimate of the British Library for example, it is around 40% of all printed works. The existence of this problem is due to the lack of copyright registration and also the difficulty in keeping track of ownership, with special concern to photographs and sound recordings.
The problem arises when the licence and agreement scheme looses its importance determining that the market is therefore inefficient. If a work is orphan it is not possible to seek permissions or licences to use the content, and therefore it cannot be used or performed without legal risk: As it is not possible to obtain permission for use, there is at least the risk of civil infringement or criminal liability if there is commercial use. The other consequence could be the simply the unwillingness to search for the right holder of such works because the costs of locating them are greater than the potential value of the licence for the licensee.
These forgotten works are now much more able to be useful to a greater part of the population as digitisation and access to internet is now common in an internet era. The concern arrives when now it is much easier to make profit out of orphan works, agreeing or not this highlights the necessity for legislation in this ambit. An example can be seen in the US Author’s Guild v Google case from 2011. It is important that these works can be accessed and used , either for educational and scientific purposes but also to foster innovation by giving access and knowledge to influence people to create new works.
There are therefore two legislative ways that have been undertaken. The first is the mechanism of creating a statutory exception (or limited liability) for orphan works use after following some requirements (ex. diligent search) – e.g. OWD. The other case is the creation of an authority entity – UK – or a collective management organisation – Denmark – that will issue licences after requiring some steps to be taken by the person/body who is asking for the. This licences are taken without the permission of the rights holders by acknowledging the importance of this works for the society.
The legislation process began in both EU and US in the beginning of the 2000’s with the emergent problem of digitisation of books and digital libraries. In 2012 the EU OWD was enacted and in 2013 the Enterprise and Regulatory Reform Act ( hereinafter The ERR Act) was also enacted in the UK and amended the Copyright, Designs and Patent Act 1988 (hereinafter CDPA) by adding S.116(5) and S.116A – 116D by virtue of S.77(2) and (3) of the ERR Act. In the US there are currently no legislation enacted although there were some attempts in 2008 with the Orphan Works and the Shawn Bentley Orphan Works Bills following the 2006 US Copyright Office report with requirements for legislation concerning orphan works.
Both the Directive and the ERR Act refer to the term “diligent search” as the test to be applied in order to get the status of an orphan work. While S. 116A(3) of the CDPA does not include any definition of “diligent search”, Article 3 of the Directive requires the diligent search to be made in good faith and in respect of every and each work by searching appropriate sources, at least the ones listed in the Annex to the Directive. Recital 14 of the Directive also highlights the need for harmonisation on the meaning of this term and it has been argued that member states might refer to the guidelines established as part of the i2010 digital library initiative. The subject matter under which these provisions are applied cover all published or unpublished works (Article 1(3) of the Directive), including related rights (phonograms) in the UK while the EU excludes from that, stand- alone photographs from protection. A good lobbying was done by photographers in this respect. The Directive applies to works that were first published or broadcast within the EU due to the principles of subsidiarity and proportionality laid down in Article 5 of the TFEU. On the other hand and although limited to the territory of the UK, the scheme resulting from ERR Act includes foreign works (non-UK and non-EU).
A problem can arise given the fact that published and unpublished works are covered as to wether moral rights can put it into question, specially where the author cannot waive them and still has the right to decide wether he wants to see his/her work published. A mention should be done to the compliance with the Berne Convention has it has been argued that the “legitimate interests of the author” can include the interest in determining wether the work should be publicly disclosed.
The beneficiaries of this legislative scheme for orphan works determined by the Directive according to Articles 1 and 6(2) are publicly accessible libraries, educational establishments, museums, archives, film or audio heritage institutions and public service broadcasting organisations and the exception only applies to non-commercial activities. However commercial exploitation can exist to the extent that in only serves the purpose of covering costs of digitisation and making available to the public. On the other hand, S.116A of the CDPA does not preview any restriction regarding beneficiaries and the licences can be used for commercial and non-commercial activities. The Directive states in Article 6(1) that the rights covered by this exception are the right of reproduction and the right of making available to the public. If the right of distribution is involved, for example when an entity wants to make available downloads of works then a licence for the distribution right is required. In the UK, S.116A does not define the permitted uses which results in a presumption that the creation of derivative works, for example is permissible. An objection should be made here where the IPO as the authorising body finds the subsequent work as derogatory and refuse authorisation, by virtue of the moral right of integrity of the copyright owner. The IPO and the OHIM are the bodies that maintain an orphan works register which will increase the chances of any rights holders being found.
In the US, despite the fact that no legislation has been enacted, the proposals cover some aspects that can be seen in the EU and UK systems. The diligent search is also a requirement, although with variable standards according to the work in question. A “reasonable compensation” will be due in case the author reappears although this is not true when the beneficiaries are non-profit entities such as museums, educational institutes, museums, library and archives. The mechanism adopted by the proposals is a limited liability to goof faith infringers.
The issue of existing Extended Collective Licence (ECL) schemes operating in between collecting management organisations (CMO’s) and a category of users should be addressed in the context of orphan works. First, when they exist and cover orphan works – obviously non-members of the CMO – then the ECL prevails and no licence is required for the use of such work, for example in the UK where a licence is necessary to use an orphan work. The fact that there is an operating ECL for specific orphan works does not preclude the issue of licences regarding the same works which means that they are both cumulative. It is acknowledged that ECL brings some benefits in what
regards orphan works, such as the direct access of this works and its already usefulness for society. Although we have own concerns regarding ECL schemes specially in what regards the “opt- out” provisions by placing the onus on authors who are the ones that have to come forward in order to protect their rights remembering, for example, the Google case where they were seeking for the ability to expropriate the rights of copyright owners who have not agreed to transfer those rights. This is not a big problem in the US as CMO’s have a limited importance and ECL’s are not viable solutions.
In what regards a compulsory licensing scheme as it was argued by some scholars, among other benefits, “it would help minimise search, transaction, and administrative costs for users, incentivise investment in orphan works projects, and provide the flexibility necessary to bring major archival and restoration projects up to scale. This is can be helpful in countries such as US that currently does not have any other possible solution. It does not seems necessary in the case where other less burdensome solutions exist, such as in the UK via licensing or ECL.
Overall, We believe that the orphan work’s solutions found by the EU and the UK are important for the access to knowledge, education and science, specially the approach taken by the ERR Act as adopting the mechanism of licensing. We also think the upcoming digital libraries are a powerful tool to achieve those goals. My concerns rely on the extended commercial exploitation that can be made out of orphan works. Despite the fact that the rights holders are not identified it does not seem fair nor reasonable to me allow people or companies to use works that were created by someone else and that are still under the protection of copyright to make money out of it as if it was their own creativity, personality and labour behind.
Nischal Arvind singh-Chevening & HSBC Scholar
LLM (QMUL UK), LLB (DU)
Founder, IPFORSTARTUP is a IPR legal consulting firm, who work in networking collaboration world wide special reach in UK and India, with law firm as well individual lawyer as adviser to our clients. IPFOSRTARTUP focus on working with startups firm to highlight the importance of
LLM QMUL UK
She based in Lisbon and look after our Copyright, creative industries and Trademarks and expert in WIPO matters.
[Update at April 2017 – see our recent post Australian Innovation Patents Retrospectively made Non-Retrospective here.]
Patent attorneys are routinely asked by their clients for input as to where patent protection should be pursued. That decision involves weighing up what is to be gained against the relative costs and difficulty.
On any measure, the Australian innovation patent is excellent value. There is much to be gained from Australian patent protection. Australia has the 13th largest economy in the world and a westernised consumer culture which makes it an excellent test market for products intended for launch in North America and Europe. Energy, agriculture, mining, oil & gas and medical devices are all well-established industries.
Innovation patents have an eight year term during which they provide the same scope of rights as standard patents. Indeed typically broader claims are sustainable because there is no need for an inventive step: An innovation patent can validly cover an obvious combination of well-known features. Instead of an inventive step, an innovative step is required. Typically any functional novel feature will suffice.
The application process could not be simpler or more cost effective. Typically a patent is granted on an application within a few weeks of filing. Grant enables innovators to legitimately market their product as patented. Post grant examination is usually optionally but must be passed before the patent can be enforced or threats of enforcement can be made.
The official application fee is only A$180. At the time of writing that is about US$140 or about €120. Typically there are no further charges until modest annuities commence on the second anniversary of the filing date.
An innovation patent application can be:
a stand-alone application;
a convention application;
a divisional application;
in effect, a national phase application – an innovation patent application can claim divisional status from an international patent application if it is filed by the 31 month PCT deadline; and/or
obtained by conversing a standard application.
In many ways, the innovation patent is akin to the utility models available elsewhere, although there are no restrictions on the applicable subject matter (aside from a few exceptions that are rarely applicable). There is no restriction on the number of claims at filing although examination (which is usually optional) will require restriction to a total of five claims.
Innovation patents were intended to provide a simple, low cost, option for small to medium business but are available to all and are now routinely used as litigation tools. If one finds that their pending Australian standard patent application has been infringed it is now standard practice to file (and request examination of) an innovation patent application as a divisional application and to litigate on the basis of the resultant innovation patent.
leads to enforceable rights sooner;
leads to a ‘stronger’ patent by eliminating the risk of an inventive step attack;
avoids pre-grant opposition procedures applicable to a standard patent application and which an alleged infringer might use to at least significantly delay proceedings; and
leads to a better prospect of recovery damages for past infringements.
‘4’ is especially surprising – case law suggests that damages may be payable in connection with infringing acts occurring as early as the filing date of the standard patent application (i.e. the divisional parent application). An innovation patent can be infringed before it is filed!
If reading this causes you to think that innovation patents are unfairly pro-patentee you are not alone. Many, including the Australian government, have said as much. Nonetheless innovation patents remain a valuable to tool to be used by innovators with an interest in the Australian market.