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IP Value 2009
Exciting times for IP market makers
As most of the developed world enters difficult economic
times, all those who believe that intellectual property is,
or could be, an asset class will have to find an answer to
the following question. If the global financial system can
be brought to the brink of collapse over worries about the
valuation of mortgage-backed securities, what impact
does that have on prospects for the development of
markets based on other kinds of intangible, such as
intellectual property?
Twenty for 2012: sustainable brands for the future
Sustainability in all its forms is a prerequisite for high
performance. This is especially true as companies
confront one of the toughest operating environments in
recent memory. This chapter identifies companies which
Morgan Stanley analysts believe to be the 20 highestquality
companies in their respective sectors − all of them
powerful brands grounded in sustainability
A new set of rules for innovation during times of economic uncertainty
The year 2008 will be remembered for many things – in
particular, the fact that in this year the world entered a
financial crisis of unprecedented magnitude and scope. It
was the year when we were struck by a global recession
resulting from excess leverage in the financial markets,
the unwinding of the Federal Reserve’s fiscal experiment
and no-credit-necessary mortgage lending (to name but a
few of the culprits). Corporate lay-offs, skyrocketing
unemployment rates and declining stock prices grabbed
news headlines. As we enter 2009, business executives,
regardless of their industry, grapple with balance sheets
in a state of flux and world leaders struggle to bring a
sense of calm to their economies.
Key advisory issues
IP owners – leaving big money on the table
Underreported licensing fees and misinterpreted
contract terms – along with insufficient compliance
monitoring of licensing agreements – are combining to
cost IP owners millions in lost revenue.
Identifying and managing intangibles: what's in your closet?
Many organisations have a long history of successfully
managing the lifecycle of both tangible and intangible
intellectual assets, from creation to realisation. However,
others are just getting started. This chapter outlines the
intellectual asset management (IAM) process for those in
the starting blocks who want to move forward.
Intellectual asset deals and decisions: are you building or destroying value?
Twenty years ago, the valuation of intellectual property –
and, more broadly, of intellectual assets or intangibles –
was looked upon as a subjective and arcane exercise, in
that there was a lack of consensus on the methodologies
to apply and application was limited. This has changed
significantly: IP and intellectual asset valuation is now an
established business tool. In today’s dynamic
environment – influenced by vigorous new reporting
standards, IP auctions, increasing globalisation and the
trend towards alliances of all types – intangible assets are
becoming increasingly important in boardrooms around
the world.
Protecting and commercialising patentable intellectual property
According to the US Patent and Trademark Office, 97 per
cent of patent holders own patents that will never make a
profit and only about three per cent of all patents ever
make more money than the patent cost in the first place.
Assuming this is true, the overwhelming majority of
inventors are left nursing their shattered dreams and
depleted bank balances.
Inter-company pricing of intangibles – global developments and their impact on your business
The transfer pricing of goods and services between
companies and across borders is fundamental to the
taxing rights of different countries. The potential for
tension and conflict among countries is therefore high. To
mitigate the risks this entails, the Organisation for
Economic Cooperation and Development (OECD)
operates a set of guidelines on the subject (the Transfer
Pricing Guidelines for Tax Administrations and
Multinational Enterprises), and has recently issued a
series of notes regarding profit methods and
comparability. Among other things, these guidelines
address intangibles and their impact on the pricing of
inter-company transactions. In addition, the United
States – one of the larger and more influential OECD
member countries – has also issued new rules on services
transactions, including discussions on certain services
that may create intangibles; as well as detailed rules in
relation to qualified cost-sharing arrangements (QCSAs)
that exist (for US business) separately from the
OECD guidelines.
Law & litigation: Global
Protecting and enforcing non-traditional trademarks
Businesses work constantly to devise innovative and
creative marketing strategies. The use of non-traditional
trademarks by businesses may offer a new way to attract
consumers to their products or services.
Law & litigation: United States
The future of patent exhaustion after Quanta
It has been several months since the US Supreme Court
issued its unanimous opinion in Quanta Computer, Inc v
LG Electronics, Inc (June 9 2008) and the implications for
patent holders continue to reverberate. In Quanta, the
court reiterated the principle that once a patentee has
authorised the sale of goods or services, it is not
entitled to obtain a second payment for the same
patented items.
Fast-track enforcement of IP rights using Customs and the International Trade Commission
Most corporate counsel are well acquainted with the
costs and benefits of district court litigation to enforce IP
rights. Many, however, are less well versed in the
administrative alternatives available to stop infringing
imported goods at the border. While administrative
procedures do not provide for monetary damages, they
do offer relief that is faster and more reliable than district
court litigation.
Written description in chemical and pharmaceutical patents
The written description requirement in the chemical and
pharmaceutical industries is based on a unique, everevolving
factual situation necessitating the application of
what would otherwise be a technology-neutral statute. In
light of the range of issues presented, drafting,
prosecution and enforcement strategies have become
more complicated and exacting, with the courts
providing a rather ambiguous guide as to what will be
sufficient. As the Federal Circuit recently warned, an
issue involving written description “must be decided on
its own facts” and “the precedential value of cases in this
area is extremely limited” (Noelle v Lederman, 355 F 3d
1343 (Fed Cir 2004)).
Administrative challenges to US patents
Sooner or later, a patent manager or patent counsel will be
faced with a patent which an employee believes should
never have been granted or a patent application that he or
she believes should never issue. Sometimes the patent or
patent application is viewed as ‘reinventing the wheel’;
sometimes the technology described is deemed to be so
weak as to be impractical; and sometimes the invention is
believed to have been done by another – perhaps even by
someone in the same company. The patent manager or
counsel may also have information that leads him or her
to suspect that a patent application will be filed on subject
matter that does not appear to be patentable. Regardless,
the patent manager or counsel needs to deal with the
situation.
Hiding in plain sight: avoiding damages for wilful patent infringement
Under the US patent system, the only thing worse than
being found to be an infringer is being found to be a
wilful infringer. A wilful infringer not only pays
compensatory damages, but may also, under certain
circumstances, face enhanced damages, which can be as
much as three times the compensatory damages (35 USC
§ 284). The best way to avoid this fate is to avoid a finding
of infringement; in general, businesses choose to defend
against a patent infringement claim only if they believe
that they have a strong non-infringement, invalidity or
unenforceability defence (or if the demanded damages
are deemed grossly excessive). At times those careful
calculations fail, however, and the court enters a
judgment of infringement. This chapter considers some
steps that a patent infringement target can take before
trial to minimise the possibility of a finding of wilfulness.
Hatch-Waxman declaratory judgments
The Drug Price Competition and Patent Term
Restoration Act 1984 (commonly referred to as
‘Hatch-Waxman’) attempts to strike a balance between
the interests of innovative drug manufacturers and
generic manufacturers. As part of this balance, an
innovator alerts the public and generic competitors as to
which patents it believes cover its Food and Drug
Administration (FDA)-approved drug product or
methods of the product’s use by listing the patents in the
Approved Drug Products with Therapeutic Equivalence
Evaluations (commonly referred to as the ‘Orange
Book’). While an innovator may list several patents in the
Orange Book, it may not assert all patents against the
generic manufacturer (eg, if it concludes that the
generic’s product does not infringe certain patents). This
can lead to uncertainty for generics, since nothing in
Hatch-Waxman will stop an innovator from later
asserting those same patents against the generic’s
product after market launch. As a result, generics often
seek a declaratory judgment that an unasserted patent is
invalid or not infringed, and recent Supreme Court and
Court of Appeals for the Federal Circuit decisions have
given more strength and structure to declaratory
judgment actions in the area of Hatch-Waxman.
Law & litigation: Latin America & the Caribbean
Argentina
Punitive damages: coming soon to IP rights cases?
Until recently, punitive damages in civil cases were not
regulated by statute. However, many scholars and
practitioners argued for the inclusion of this penalty in
the civil law system. Until April 2008 the general rule in
civil cases was to apply Article 1109 of the Civil Code,
which provides that damages are to be awarded
according to the damage caused, leading to the award of
compensatory damages only. This rule applied to IP
rights cases. The Argentine legal system follows the
principle of compensation for actual damage; many
consider that the award of damages beyond the actual
damage caused would constitute unjust enrichment.
However, this opinion may have to change due to the
entry into force in April 2008 of Law 26,361, which
modifies the Consumer Law (Law 24,240).
Brazil
Moving with the times: major changes to the IP framework
In 2007 the Office of the US Trade Representative moved
Brazil from the Priority Watch List to the Watch List in its
Special 301 Report, an annual review of the global state
of IP rights protection and enforcement. This ranking
was maintained in the 2008 Special 301 Report, further
recognising the escalating momentum in Brazilian IP
rights enforcement.
Colombia
Proving the notoriety of your trademark
Common examples of well-known trademarks include
COCA-COLA, MERCEDEZ BENZ, JUAN VALDEZ,
MICROSOFT, WAL-MART and INTEL. Although these
marks have different meanings, origins and
characteristics, they all have one key factor in common:
they each generate an extraordinary level of recognition
among consumers. This level of knowledge is known
as notoriety.
Jamaica
Tapping into the value of intellectual property
With its increasing prominence in global trade,
intellectual property has become an inescapable issue for
developing countries, several of which have reluctantly
embraced the modern IP regimes mandated by
the World Trade Organisation (WTO) Agreement on
Trade-Related Aspects of IP Rights (TRIPs).
Mexico
Will the new IP regional court addressWill the new IP regional court address growing IP litigation concerns?
The Federal Court of Tax and Administrative Affairs
(FCTAA) has competence to decide appeals filed against
decisions issued in IP matters (ie, court proceedings as
well as trademark or patent applications). This court is
divided in 32 regional courts which hear all administrative
and tax cases. Eleven regional courts are located in Mexico
City, with the other 21 spread across the rest of the country
Venezuela
The ongoing process of modernising copyright protection
Since the 1990s Venezuela has been implementing changes
to modernise copyright protection in an effort to make it
compatible with international standards. To achieve this
goal, Venezuela has brought into force various pieces of
legislation in regard to copyright.
Law & litigation: Europe & Middle East
Cross-border: Europe
Implementation of the EU IP Rights Enforcement Directive
The enforcement of IP rights in Europe is primarily
governed by national laws which differ significantly
across the EU member states. Consider, for example,
European patents. Despite the fact that they are granted
under the European Patent Convention, issues relating to
the infringement and enforcement of the national parts of
granted European patents are handled by member states’
national courts, which apply domestic laws. This is also
true in respect to Community trademarks and
Community designs: although these rights are granted on
the basis of EU regulations (which also contain directly
applicable provisions on validity, infringement and
penalties), they are enforced before the national courts of
the individual EU member states, which apply domestic
procedural laws. As a result, a pan-European IP litigation
typically comprises several parallel lawsuits in a number
of member states. Therefore, strictly speaking, there is no
such thing as a European IP litigation proceeding.
Cross-border: Europe
European trademark law: latest case law developments
The year 2007 was an important one for trademarks in
the European Union. In the Office of Harmonisation for
the Internal Market (OHIM) Annual Report, the
president commented that, compared to 2004, OHIM is
dealing with 50 per cent more trademark applications.
Further statistics in the report testified to the increase
in trademark activity: in 2007 16,000 oppositions were
filed, compared to 14,000 in 2006, and the OHIM Board
of Appeal dealt with around 1,950 cases – a rise of more
than 18 per cent on 2006. The volume of applications
and case law relating to Community trademarks makes
it increasingly difficult to keep on top of the latest
developments: in 2007 the European Court Justice
(ECJ) and the Court of First Instance (CFI) handed
down 18 and 68 rulings respectively. At the end of 2007,
287 cases were still pending before the CFI and 19
before the ECJ.
Cross-border: Europe
The interface between intellectual property and competition law
There appears to be an inherent conflict between
intellectual property and competition law. While IP
rights convey exclusive rights to their owners,
competition law tries to avoid monopolies and any
behaviour by market participants which might be seen as
an abuse of power. In practice, this alleged conflict is
accepted in virtually all jurisdictions and national laws.
In fact, IP law and competition law complement each
other and can regulate different aspects of a specific case
or situation. The key is to put in place a balanced system
which considers the interests not only of applicants and
IP owners, but also of third parties and the public.
Cross-border: Europe
The Community design right: a (double-edged) sword for brand owners
Designs and trademarks are different rights with different
purposes – at least, this is how they were originally
intended and have been regarded for a long time.
However, this principle has been called into question as
the relationship between designs and trademarks begins
to take on a new and surprising dimension.
Cross-border: Europe
Key considerations in choosing where to litigate a European patent
In recent years the granting, interpretation and
enforcement of patents have all been subject to European
harmonisation provisions. This harmonisation leads to
the question of whether it really matters in which
country a European patent is litigated.
Belgium
Monetary compensation for trademark infringement
The EU IP Rights Enforcement Directive (2004/48/EC)
requires EU member states to amend their national laws
in accordance with the principles set out in the directive,
with a view to harmonising the procedural rules and
substantive law relating to the enforcement of IP rights
across all member states
Cyprus
The evolution of the Cypriot IP regime
Over the years Cyprus has developed as a worldrenowned
international business centre. Its economic
stability, solid legal infrastructure and efficient
administration have proved fundamental to its
steady advancement.
Czech Republic
Protecting your intellectual property: new options for IP rights holders
In April 2006 the Czech Republic implemented the EU IP
Rights Enforcement Directive (2004/48/EC) through the
Enforcement of Industrial Property Rights Act (221/2006).
However, certain parts of the act concerning judicial
proceedings did not come into force until January 2008.
Finland
The evolving IP management landscape
Finland is a substantially greater source of innovation
than the small size of its population might indicate.
Finnish companies and research and development (R&D)
centres are actively involved in top R&D in several fields.
According to the Organisation for Economic Cooperation
and Development Science, Technology and Industry
Scoreboard 2007, Finland has one of the highest R&D
spends as a percentage of gross domestic product. As a
direct result, the number of patent applications and
patents granted is among the highest in the world per
capita (see Figure 1). Furthermore, according to several
recent studies Finland is among the top countries in the
world in the field of patenting activity.
France
Trademark rights v free speech: can prejudicial trademark use still be prevented?
The French Supreme Court recently decided two cases
involving the use of a trademark in a way that was
prejudicial to its owner (Supreme Court, Areva v
Greenpeace and Esso v Greenpeace, April 8 2008). The
cases have been widely reported in the French media. In
each case a market leader in the energy sector sued
Greenpeace for painting its trademark in a negative light:
Greenpeace reproduced the AREVA trademark with the
shadow of a skull and modified the ESSO mark to
include dollar signs (E$$O). While such uses were
initially considered unlawful, the Supreme Court
ultimately found in favour of Greenpeace.
Germany
Of patent trolls and patent smurfs
The major US patent litigation cases of recent years,
involving the payment of hundreds of millions of dollars in
compensation, have become legendary and have
popularised the term ‘patent troll’ to describe controversial
patent licensing enforcement companies consisting of little
more than a legal division. In fact, ‘patent troll’ may be the
one expression from the otherwise obscure world of
intellectual property that is familiar to the public.
Hungary
Seller beware! The use of trademarks in unfair commercial practices
Have you ever misled a customer? Have you ever
forced a customer to buy something he or she did not
want? Have you ever failed to inform a client as to key
details of your services? If you answered ‘yes’ to any of
these questions, you need to think again – new
regulations have come into force to defend consumers
and combat misleading and aggressive sales and
marketing tactics.
Israel
Patent enforcement proceedings: the only option for patentees
In Israel, there is only one possible avenue for patentees
seeking to enforce their rights against infringers: a lawsuit
for patent infringement. Under the Patent Law, the district
courts have exclusive jurisdiction over patent infringement
cases. However, in 1998 the Supreme Court of Israel held
that in cases where an invention has not been registered as
a patent, there may be circumstances in which a remedy
can be granted under the Unjust Enrichment Act.
Italy
Enforcing IP rights: an ongoing challenge
This chapter considers the various ways in which IP
rights may be enforced in Italy by using the new IP Code
and the recently established specialist IP courts.
Luxembourg
An attractive new tax regime for income deriving from IP rights
Luxembourg is situated within a 300-kilometre radius of
the major European markets – and their 100 million
consumers – and enjoys a high level of economic
prosperity due to the good health of its financial sector
and the development of a dynamic IT sector.
Luxembourg has built its reputation through the
development of groundbreaking investment products
supported by powerful IT and communication services.
Netherlands
Implementing the EU IP Enforcement Directive at national level: a new regime?
On April 29 2004 the EU IP Rights Enforcement Directive
(2004/48/EC) came into force. The purpose of the
directive is to harmonise the enforcement of IP rights in
order to combat IP rights infringement more effectively,
in particular large-scale copying and piracy. For that
purpose, member states must ensure that, before the
commencement of proceedings on the merits of a case,
the competent judicial authorities can order adequate
temporary measures in order to protect relevant
evidence concerning the alleged infringement, provided
that any confidential information is protected. In order to
take such measures, the authorities must be requested to
do so by a party that has handed over reasonably
obtainable evidence in support of the assertion that its
intellectual property has been or will be infringed.
Norway
Courts move to harmonise patent law with EPO practice
To date, Norway’s accession to the European Patent
Convention, which took effect on January 1 2008, has
produced no direct changes in Norwegian patent
practice since Norway is designated only for patents
granted based on applications filed after January 1 2008.
However, the harmonisation of Norway’s patent law and
practice with that of the European Patent Office (EPO) is
now even more important than ever and it appears that
the courts are prepared to accept accession as a reason to
‘look to Munich’, even when Norwegian national patents
or applications filed long before January 2008 are at issue.
Poland
Revocation of trademark rights for non-use: practical aspects
A trademark holder that registers a trademark in
Poland obtains the exclusive right to use the trademark
for goods or services covered by the registration within
the Polish territory. Trademark protection is granted for
a period of 10 years from the date of filing the
application with the Patent Office. Upon expiry of the
registration period, the trademark protection may be
extended for subsequent 10-year periods – which in
practice means that a trademark may be protected for
an unlimited time.
Romania
EU accession prompts changes to trademark legislation
As part of Romania’s accession to the European Union,
one of the government’s key priorities has been the
amendment of the Law on Trademarks and Geographical
Indications (84/1998) in order to transpose the First
Trademark Directive (89/104, December 21 1998) and
create a legal framework in order to enforce the EU
Community Trademark Regulation (20/1994).
Russia
Dealing with trademarks in Russia
Part IV of the Civil Code became effective on January 1
2008, codifying all existing IP law provisions into a single
piece of legislation. Part IV also updated the provisions
on trademarks and agreements relating to trademarks.
Spain
IP rights in a time of economic uncertainty
The growing economic crisis was a major concern during
the Spanish general election campaign in early 2008.
There was fierce debate as to how severe the problems
were, whether the crisis was caused by the international
situation and whether local aspects could worsen the
Spanish recession. Following the general election on
March 9 2008, the Socialist Party remained in power.
Sweden
IP law develops to keep pace with changing times
Since the publication of IP Value 2008 there have been a
number of key developments in Swedish IP law,
including the introduction of less stringent requirements
for the translation of European patents, as well as a
number of proposals for changes to existing law,
including a simplified trademark registration process
and the strengthened protection of trade secrets. In
addition, the recent adoption of a new Marketing
Practices Act may affect the way in which businesses
market their valuable IP rights.
Switzerland
Legislature speeds up pace to keep up with IP developments
The Swiss IP sector has been rapidly changing during
2007 and 2008. In response, the Swiss government and
Parliament have approved and brought into force an
unusual number of amendments to both the national IP
laws and international treaties in order to keep the
country at the forefront of IP developments.
United Kingdom
Recent patent law developments: a new test for obviousness and a statement on the principles for determining industrial applicability
Two recent patent decisions by the English Court of
Appeal and the House of Lords have substantially
changed and clarified the law in regard to obviousness.
First, the Court of Appeal ruling in Pozzoli SpA v BDMO
SA restated the test for obviousness as originally
formulated in 1986 in Windsurfing International v Tabur
Marine, which previously defined the law of obviousness.
Second, the House of Lords decision in Conor Medsystems
Inc v Angiotech Pharmaceuticals Inc clarified the test for
obviousness even further and will arguably lead to more
patents being upheld. In addition, in an area of law with
little precedent, in Eli Lilly & Co v Human Genome Sciences
Inc the High Court provided a detailed examination of the
requirement that an invention be capable of industrial
application in order to be patentable.
Law & litigation: Asia-Pacific
Australia
The commercial impact of a changing legal landscape in Australia
In a business environment in which intangible assets
continue to represent an ever-increasing proportion of
the value of a corporation, actively managing these assets
in the boardroom is becoming a key duty of directors.
Several Australian decisions issued during the last year
highlight the pitfalls for senior business echelons of
relegating matters of intellectual asset management to
lower levels of the organisation or misunderstanding
their duties and obligations to the business.
China & Hong Kong
Recent developments in intellectual property
This chapter looks at the major IP developments in China
and Hong Kong over the past year
India
Recent developments in intellectual property
Nineteenth-century economist Alfred Marshall believed
that with advancements in technology, commodities alone
would no longer be the primary factor in determining the
real value of money: “But if inventions have increased
man's power over nature very much, then the real value of
money is better measured for some purposes in labour
than in commodities.” This was so because commodities
would gradually begin to have an ever-increasing intrinsic
labour value ascribed to them. Today, this intrinsic labour
value exists in the form of knowledge.
Japan
When is filing a patent infringement suit deemed to be a tort?
In a recent decision (Heisei 18 (ne) 10040, October 31
2007) the IP High Court held that the filing of a request
for a preliminary injunction by the patentee constituted a
tort. The patentee was ordered to pay damages to
compensate for losses suffered as a result of the lawsuit.
It also ruled on the eligibility of a plaintiff to request a
declaratory judgment. This chapter discusses the case
and considers its implications on strategies for patent
infringement litigation.
Kazakhstan
Protecting trademark rights
A trademark is a powerful instrument when introducing
goods onto the market. As such, trademarks make an
attractive target for potential IP rights infringers
worldwide.
Malaysia
Survey evidence and generic marks: the Malaysian position
This chapter looks at the issues surrounding the
admissibility and probative value of survey evidence in
trademark litigation and the test to determine whether a
mark has become generic.
Pakistan
Key elements of franchising from an IP perspective
full understanding of the concept of franchising may be
established by considering the different definitions of the
concept adopted by various authorities and organisations.
Taiwan
New courts, new rules and new practices for IP litigation
Due to the rapid development of technological innovation
in recent years, IP rights have not only played an
important role in the promotion of economic development
and trade liberalisation, but have also become to be seen as
indicators of national competitiveness. As well as business
opportunities and economic benefits, IP rights can lead to
endless disputes, causing both increases in litigation costs
in many countries and the erection of trade barriers by
certain countries. As IP protection is the key to success in
a knowledge-based economy, Taiwan has been making
efforts to maintain a high standard of law and practice
relating to IP rights. To keep pace in this era of
globalisation and to maintain scientific and technological
competitiveness, the IP Court has been established to
resolve IP-related disputes effectively and efficiently. In
addition, the IP Adjudication Act has been passed, laying
down a new set of procedural rules for IP-related cases.
