JIPLP welcomes Julia Montero to the Editorial Board

JIPLIP Editorial Board members are appointed for a renewable three-year term; they are divided into panels that reflect to some extent their personal interests or experiences within intellectual property -- though they are never bound to contribute ideas and content from solely within the sphere of subject-matter of the panel to which they have been allocated.

The appointment of new Editorial Board member Julia Montero gives this weblog an ideal opportunity to introduce readers to her and, in doing so, to welcome some further input from the in-house perspective. The blog asked Julia to say a few words about herself and she duly obliged. Says Julia:

"I’m a UK-based solicitor currently working on the converged Internet side of Vodafone Group’s products and services in London. I’m also a member of BLACA and SCL, a published author and a former Visiting Professor at the University of Alicante. Prior to qualifying at media firm Michael Simkins LLP and having obtained an LL.M in IP/Computer law (University of London 1999), I spent 4 years developing collective online music licensing at the UK collecting society, MCPS/PRS (now ‘PRS for Music’). I have also worked in-house for EMI Records and Abbey Road Studios advising on digital music, branding and associated commercial issues.

I’ve been particularly interested in the intersection between digital technologies and media since first reading John Perry Barlow’s seminal article ‘The Economy of Ideas’ as an undergraduate. Some 10 years later, IP practitioners in all jurisdictions are still wrestling with many of the legal challenges raised by the exploitation of IP rights across digital platforms. I’m therefore extremely honoured to be joining such a prestigious Editorial team and very much looking forward to contributing to the reporting and analysis of the development of such issues (amongst others!) while on the Transactions and Non-Contentious IP Practice Board".

A full list of the Editorial Board teams can be found here.

ECJ upholds ‘compulsory licences’ of Green Dot trade mark

Author: Christopher Stothers (Milbank, Tweed, Hadley & McCloy LLP)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp181

Der Grüne Punkt-Duales System Deutschland GmbH v European Commission – ECJ Case C-385/07P, 16 July 2009

The European Commission was justified under competition law in restricting the terms of trade mark licences for the Green Dot trade mark and, contrary to the view of the owner, this did not constitute a ‘compulsory licence’ of the mark.

Legal Context

Under Article 40(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Members are permitted to take measures to deal with anti-competitive licensing practices so long as such measures are consistent with the other provisions of TRIPS. Under Article 21 of TRIPS, ‘the compulsory licensing of trademarks shall not be permitted’ (by contrast, compulsory licences of patents are permitted under Article 31). This appears to indicate that Members, which include the European Community and its Member States, are not permitted to grant compulsory licences of trade marks even in order to deal with anti-competitive behaviour.

Nevertheless, the European Commission appeared to do exactly that in its Green Dot competition decisions in 2001, without even demonstrating the ‘exceptional circumstances’ required by Magill and IMS Health. The appeals against those decisions have now been rejected by the European Court of Justice (ECJ), sitting as a Grand Chamber of 13 judges, as well as the Court of First Instance (CFI). The CFI judgments were discussed in [2007] JIPLP 653–654.

Facts

In 1991 Germany adopted the Ordinance on the Avoidance of Packaging Waste (‘Verordnung über die Vermeidung von Verpackungsabfällen’). This required manufacturers to recycle their used packaging, either by taking it back at the point of sale or by collecting it from the vicinity of the consumer's home. Manufacturers were permitted to use third parties to meet their obligations.

In 1991, a German company, Der Grüne Punkt—Duales System Deutschland AG (DSD), registered its Green Dot logo as a trade mark and in 1992 it began providing a collection and recycling service for manufacturers throughout Germany. The trade mark is as follows:

Manufacturers who used the DSD system were licensed to use the Green Dot trade mark on their packaging, paying a fee for all packaging so marked. The actual collection was carried out by third parties (‘collectors’) who entered into agreements with DSD.

In 1992 DSD notified its system to the European Commission as involving potentially anti-competitive agreements, seeking either confirmation that these did not breach Article 81(1) of the EC Treaty (negative clearance) or an individual exemption under Article 81(3).

The Commission initially indicated in 1997 that it would take a favourable view of the system. However, issues were raised by a competing waste disposal firm and by certain hair-care product manufacturers, which in 2001 led to the Commission giving two decisions that certain aspects of DSD's system were anti-competitive (Decision 2001/463 [2001] OJ L166/1 and Decision 2001/837 [2001] OJ L391/1).

DSD appealed against both decisions to the CFI, but its application for interim relief in the first case was rejected for lack of urgency in November 2001 (Case T-151/01 R [2001] ECR II-3295); in May 2007, both substantive appeals were rejected (Case T-151/01 and Case T-289/01). DSD brought a further appeal to the ECJ in the first case, but this was also rejected in July 2009. DSD did not bring a further appeal in the second case and so only the first case is considered here.

Analysis

The Commission found that DSD held a dominant position in the relevant market for the supply of collection and recycling services to manufacturers. It also found that DSD had abused that position by basing the fee payable on the volume of packaging bearing the Green Dot trade mark rather than on the volume of packaging collected and recycled by DSD's system. The Commission held that it would ‘in a not inconsiderable number of cases, be economically unrealistic’ for manufacturers to restrict their use of the Green Dot trade mark to packaging which would be collected and recycled by DSD. The abuse was held to be both exploitative, by imposing unfair terms and prices on the users of its system, and obstructive, by effectively preventing DSD's customers from using alternatives to DSD's system: this could not be objectively justified under trade mark law because DSD's system went beyond what was necessary to fulfil the essential function of the trade mark right, which in this case was to indicate to consumers that they could dispose of the packaging through DSD's system. DSD was therefore required not to charge a licence fee for packaging which the manufacturer collected and recycled in some other way.

In its appeal to the CFI, DSD argued (among other things) that the Commission had wrongly imposed a compulsory licence of the Green Dot trade mark, claiming that this breached TRIPS, that the Commission had mischaracterized the essential function of the mark, that the Commission's remedy would impair the distinctive function of the mark and that the Commission had imposed a compulsory licence without any fee.

The CFI disagreed, holding that the Commission had not imposed a compulsory licence, but merely restricted the terms of the licences offered by DSD. The essential function of this particular trade mark was not ‘to guarantee the identity of the origin of the marked goods to the final consumer’, as argued by DSD, but rather that the mark ‘says no more than that the product thus identified may be collected via the DSD system’ or ‘that the [collecting] facility concerned is part of the DSD system’. On this basis, the Commission's decision did not constitute ‘a disproportionate impairment of the trade mark right or, in any event, an impairment which is not justified by the need to prevent an abuse of a dominant position’. Finally, the Commission decision did not preclude a fee for the use of the trade mark but simply prohibited charging the full fee for use of DSD's system where only the trade mark was used.

As a consequence, the CFI made no finding on the argument advanced by the Commission at the interim measures stage that ‘Articles 21 and 40(2) of TRIPS, read in conjunction, permit a balance to be sought between the interests of the owner of the trade mark and the public interest, which means competition free of distortion.’ (Case T-151/01 R, para 132).

In appealing to the ECJ, DSD raised a total of eight grounds of appeal, all of which were rejected by the ECJ.

As the first ground, DSD claimed that the CFI's reasoning was internally contradictory in recognizing at para 194 that DSD might still be entitled to charge a fee for the use of the trade mark. Unsurprisingly, this was rejected by the ECJ, which noted that the CFI had distinguished between such a fee and any fee corresponding to the price of the collection and recovery service.

As the second ground, DSD claimed that the CFI had distorted the meaning of its trade mark licence by finding that it included a ‘separate licence’ for the use of the Green Dot trade mark on packaging where the collection and recovery service was not used. Again, the ECJ rejected this ground of appeal. It held that DSD's trade mark licence required users to affix the Green Dot trade mark to all packaging notified to DSD and intended for domestic consumption in Germany, regardless of whether it was ultimately collected and recovered by DSD, the competition issue arising because a fee for the collection and recovery service was payable in any event.

As part of the third ground and as the fourth ground, DSD claimed that permitting the use of its logo on packaging which it did not collect and recover would deprive its trade mark of its exclusive character. The ECJ began by rejecting the suggestion by one of DSD's competitors that ‘the logo is not a trade mark in the classical sense’ and confirming that DSD was still entitled to assert its trade mark rights against third parties. However, the ECJ noted that the use of the Green Dot trade mark on all packaging notified to DSD was not only permitted but actually required by DSD's trade mark licence. Accordingly, the ECJ held that the trade mark retained its exclusive character.

As the fifth ground, DSD claimed that the CFI had failed to recognize that it was in effect requiring DSD to grant a licence to use the Green Dot trade mark independently of use of DSD's collection and recovery services and had failed to consider whether the conditions for granting such a compulsory licence were met. In the light of the ECJ's interpretation of the trade mark licence described above, the ECJ saw no merit in this argument.

As the sixth ground, DSD again claimed that it was being forced to grant a licence and also that it should be entitled to require its customers to include an explanatory notice on packaging which included the Green Dot trade mark but which would not ultimately be processed by DSD's system. The ECJ referred back to its earlier findings in rejecting the first part of this ground and held that the second part was unfounded given it would not be possible to determine the route taken by a particular item of packaging in advance.

Finally, DSD raised procedural issues as the seventh and eighth grounds, claiming that the CFI had not given it a chance to be heard on certain issues and that the time taken for the proceedings was excessively long. These also were rejected. Interestingly, the ECJ accepted that the CFI's proceedings took too long but held that, as this did not affect the outcome of the case, it should not lead to the judgment being set aside but might give rise to an action by DSD against the Community for damages.

Practical Significance

Even by the standards of competition law, which is rarely the quickest off the blocks, this has been a long-running case. DSD notified its system to the Commission in 1992, the Commission decided that certain aspects were unlawful in 2001 and the final judgment of the ECJ confirming those decisions has now appeared in 2009. The ECJ's comments on these delays, although directed at the CFI, may have broader impact and may encourage damages actions by those who consider themselves damaged by such delays.

However, even then the judgment of the ECJ is unlikely to prevent further disputes in relation to use of the Green Dot logo. In seeking to avoid the grant of a ‘compulsory licence’, the ECJ has relied heavily on the terms of DSD's current trade mark licence, noting that it grants a licence for all packaging materials notified to DSD and therefore finding the anti-competitive behaviour in the size of the fee payable for those packaging materials which are not ultimately collected and recovered by the DSD system. While resolving the matter immediately before it, it does not take an enormous leap of imagination to suspect that DSD will change its trade mark licence in the future. Indeed, in August 2008, DSD announced that from 2009 it would decouple its trade mark licence from its recovery service, allowing third parties to use the Green Dot trade mark provided they undertake to comply with the Ordinance on the Avoidance of Packaging Waste. The terms of such licences, or future licences adopted on the basis of the ECJ's judgment, are likely to come before the competition authorities or courts in due course, in particular in relation to the fees.

More broadly, the ECJ's judgment should be of some comfort to trade mark owners fearing the imposition of a ‘compulsory licence’. Although DSD was unsuccessful in this particular case, the ECJ's formalistic approach based on the terms of the trade mark licence give trade mark owners greater scope to avoid any compulsory licensing of their trade marks in the future by careful drafting. However, compulsory licensing should not be viewed in isolation—other aspects of trade mark licences may still be regarded as anticompetitive, raising risks of fines by the competition authorities and claims for damages by third parties. Modern competition scrutiny in the European Community is driven by economic analysis rather than legal formalism, meaning that trade mark owners cannot simply rely on clever drafting of contractual terms but must also ensure that the substance of their licensing arrangements is not anticompetitive.

Court of Appeal upholds SPC on enantiomer of known racemate

Author: Bratin Roy (McDermott Will & Emery UK LLP)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):775-776; doi:10.1093/jiplp/jpp150

Generics (UK) Ltd v Daiichi Pharmaceutical Co Ltd & Another [2009] EWCA Civ 646 (2 July 2009), Court of Appeal, England and Wales

The Court of Appeal for England and Wales has upheld a decision of the Patents Court confirming the validity of a patent and accompanying supplementary protection certificate to an enantiomer of a known racemate.

Legal Context

A significant number of pharmaceutical products are derived from what are known as chiral compounds. Chiral molecules can take one of two forms, which are mirror images of each other but are not identical, like a person's left and right hands. Thus, the two forms have the same molecular formula, but differ in geometry, and are known as enantiomers. A racemate is a mixture of equal amounts of two enantiomers of a chiral molecule.

This decision confirms that a patent to a specific enantiomer can be inventive, even if the associated racemate is already known. It also confirms that a supplementary protection certificate (SPC), which effectively extends patent protection for medical products to take account of the long time required to obtain regulatory approval, can be valid even if marketing authorization has already been granted for the racemate.

Facts and analysis

The claimant, a manufacturer of generic medicines, brought a claim seeking a declaration of invalidity of European Patent (UK) 0206082 and of associated SPC GB97/085, owned by the defendant. The patent and SPC were to a chiral antimicrobial compound called levofloxacin, the negative enantiomer of a compound whose racemic form is known as ofloxacin, which was a member of the class of compounds called quinolones. The patent had already expired, but the SPC remained in force.

The claimant's case was based on a number of pieces of prior art, including the defendant's prior patent, common general knowledge, and also on a poster briefly displayed at a conference which explained how enantiomers of flumequine, a similar quinolone to ofloxacin, were made. The claimant argued that the patent was obvious in the light of this disclosure.

It was common ground that the relevant claims of the patent did not extend to ofloxacin, which was acknowledged in the patent to be old, having been disclosed by the defendant in a prior patent. The claimant, however, claimed that the SPC was invalid under Article 15 of European Regulation 1768/92: levofloxacin was not to be regarded as a new active ingredient for the purposes granting an SPC, being an active component of ofloxacin, for which there was already a marketing authorization.

Patents Court decision
Mr Justice Kitchin concluded that the patent was valid over all of the cited prior art, and that the SPC was validly granted. He concluded that the patent was inventive over common general knowledge, as knowledge of racemate did not mean that use of only one of the constituent enantiomers was obvious, particularly where that individual enantiomer showed greater efficacy than the racemate, of which the skilled addressee would not have been aware. Further, while the skilled addressee of the patent, reading the poster, would have considered it worthwhile exploring whether ofloxacin could be resolved into its constituent enantiomers, it would not have been obvious that this would be a fruitful exercise.

On the SPC, he held that a marketing authorization for ofloxacin could not be considered authorization to market levofloxacin. Since it had required invention to produce levofloxacin, and marketing authorization was not granted for levofloxacin until 11 years after the patent had been granted, it was just for the defendant to be granted an SPC in respect of that delay. The claimant appealed.

Court of Appeal decision
The Court of Appeal upheld the Patents Court's decision in full. It held that Kitchin J's reasoning regarding the poster was a perfect example of a judge carrying out the balancing task of forming an overall value judgment, and so could not be faulted. As Jacob LJ, giving the lead judgment put it, ‘Only a curmudgeon would say that there is no invention here.’

The Court of Appeal also agreed with the approach taken by the Patents Court over the SPC. This case was one in which the underlying research had led to what was effectively a new medicine. This was precisely the type of research referred to in recital 2 of Regulation 1768/92. The claimant's argument that ofloxacin should be regarded as no more than levofloxacin with an impurity was also rejected. Neither patent law nor the law controlling the marketing of medicines regarded it as such, and there was no reason why the law on SPCs should be any different. The claimant sought to rely on case law from numerous non-EU jurisdictions in support of this contention, which were rejected as being concerned with different statutory language, views of the facts, and policies.

Practical significance

The use of chiral compounds in pharmaceuticals has been, and continues to be, widespread throughout the pharmaceutical industry. The outcome of this latest challenge to the validity of a patent relating to such compounds confirms the approach taken by the UK courts in previous cases, despite the numerous European and non-EU precedents on which the defendants sought to rely. In cases such as this, in which a single enantiomer is unexpectedly found to be superior to its known racemate, that enantiomer is clearly capable of patent protection. This case also confirms that the extremely valuable additional protection afforded by an SPC is also available for such enantiomers.

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Precedents for the biotech and pharma industries: a book review

Reviewer: Trevor Cook (Bird & Bird. Email Trevor.cook@twobirds.com)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp182

Book reviewed: Drafting Agreements in the Pharmaceutical and Biotechnology Industries, by Mark Anderson et al. (Eds)

Bibliographic details: Oxford University Press, 2009, ISBN: 978-0-19-953963-5, Loose leaf, pp. c. 1,200. Price: £395 (main work and first year's subscription). Web page here.

This is a book of precedents with two unique features. First, and uniquely at least for a European book (there are no doubt US ones), it focuses on a single industry sector, that of pharmaceuticals and biotechnology. Secondly, and probably uniquely for any book of precedents anywhere in the world, it bravely, and generally successfully, tries to adopt a multi-jurisdictional approach, with agreements primarily drafted and annotated from an English perspective, but with additional commentary also from a number of consultants giving German, French, Spanish, Dutch, and Swedish perspectives on them, and on some individual clauses. This latter feature, while, as the editor admits, not comprehensive, does at least provide a fascinating insight into certain aspects of these other legal systems, and if nothing else will be invaluable in explaining to those with a common law background the various sensitivities on the part of practitioners and contracting parties who are based in those other jurisdictions.

The 38 precedents that the book offers are divided into separate sections for preliminary agreements, collaborative R&D agreements, services agreements, clinical trial agreements, product manufacturing and supply agreements, distribution and marketing agreements, licence agreements and assignments—all types of agreement encountered in the pharmaceuticals and biotechnology sector, and many are very much tailored to the issues encountered in it—indeed many reflect relationships and business models, such as co-promotion, that are unique to the sector. The types of agreement tackled range from the simple to the downright ambitious. Precedents are introduced with general commentary, but commentary on specific clauses in the precedents is set out clearly and conveniently, on the opposite page to the clause the subject of comment. Despite the smaller type face of such commentary, this results, because of its thoroughness, in fewer expanses of blank space than one might fear—the only precedent to suffer from such blank space on the opposite pages is the NHS Clinical Trial Agreement and the accompanying guidance notes, these being standard documents prepared by third parties and which do not adopt the useful arrangement of the rest of the precedents and commentary. In addition to the precedents themselves and their commentary and introductions, there is some general commentary on a number of topics—regulations affecting R&D of pharmaceutical products, IP, competition law, contract law and practice, and tax and currency issues. There is also a small appendix of European Union competition law materials.

One can have every confidence in the drafting, edited as the book is by Mark Anderson, whose area of speciality this is, and who has already written a number of valuable books on technology licensing. My only criticism of the book is a minor one of presentation—some extra dividers to split up the chapters in the main section, which containing the precedents, would have been welcome. But this is a book that can thoroughly be recommended for anyone who is drafting or negotiating agreements in Europe in the pharmaceutical and biotechnology sectors.

The road to Copenhagen: intellectual property and climate change

Author: Matthew Rimmer (Australian National University College of Law and Australian Centre for Intellectual Property in Agriculture, ACIPA)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):784-788; doi:10.1093/jiplp/jpp148

In the lead-up to the discussions over IP and climate change in Copenhagen in 2009, the US House of Representatives passed a resolution that it should be the policy of US government officials in discussions over the long-term action under the United Nations Framework on Climate Change to ‘prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements as of the date of the enactment of this Act for the protection of IP rights related to energy or environmental technology’.

Legal Context

The Ad Hoc Working Group on Long-Term Cooperative Action prepared a draft negotiating text for ‘a shared vision for long term co-operative action’ under the United Nations Framework on Climate Change FCCC/AWGLCA/2009/8. As well as dealing with the need for enhanced action on mitigation and adaptation to the impact of global warming, and questions of financing, technology, and capacity-building, the document canvasses three options to deal with IP and climate change.

Under the first Option, ‘Technology development, diffusion and transfer {shall} be promoted by operating the intellectual property regime in a manner that encourages development of climate-friendly technologies and simultaneously facilitates their diffusion and transfer to developing countries’.

Under the second option,

Specific measures {shall}{should} be established to remove barriers to development and transfer of technologies from developed to developing country Parties arising from the intellectual property rights (IPR) protection, including:
a. Compulsory licensing for specific patented technologies;
b. Pooling and sharing publicly funded technologies and making the technologies available in the public domain at an affordable price;
c. Taking into account the example set by decisions in other relevant international forums relating to IPRs, such as the Doha Declaration on the TRIPS Agreement and Public Health.

Under the third option, ‘[Least Developed Countries] should be exempted from patent protection of climate-related technologies for adaptation and mitigation, as required for capacity-building and development needs. Genetic resources, including germplasms of plant and animal species and varieties that are essential for adaptation in agriculture, shall not be patented by multinational or any other corporations’.

Facts

The House of Representatives was alarmed by the language of the draft negotiating text on long-term co-operative action under the United Nations Framework on Climate Change.

On 10 June 2009, Representative Rick Larsen (Democrat, Washington's 2nd District), moved amendment no. 187, in the US House of Representatives to the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011 HR 2410 (USA). The amendment was a statement of policy regarded climate change:

To protect American jobs, spur economic growth and promote a ‘Green Economy’, it shall be the policy of the United States that, with respect to the United Nations Framework Convention on Climate Change, the President, the Secretary of State and the Permanent Representative of the United States to the United Nations should prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements as of the date of the enactment of this Act for the protection of intellectual property rights related to energy or environmental technology, including wind, solar, biomass, geothermal, hydro, landfill gas, natural gas, marine, trash combustion, fuel cell, hydrogen, micro-turbine, nuclear, clean coal, electric battery, alternative fuel, alternative refueling infrastructure, advanced vehicle, electric grid, or energy efficiency-related technologies.

Speaking to the amendment, Larsen emphasized that ‘[Intellectual Property Rights] protection gives companies the confidence to invest in critical research and development efforts to meet the growing demand for clean-energy technology’: the amendment to H.R. 2410 would ‘protect the [intellectual property rights] of these clean technologies and ensure these green jobs stay right here in the United States’. He emphasized: ‘It is critical that the investments that American companies are making in clean technology are protected’, concluding ‘Protecting individual property rights will help us reward innovation instead of penalizing it’.

The co-sponsor, Representative Mark Steven Kirk, a Republican (10th district of Illinois; member of the USA delegation to Kyoto in 1997), was suspicious of the language of the draft United Nations Framework Convention on Climate Change. He contended:

The American people need to know that those were code words, like ‘compulsory licensing’ and ‘technology transfer’, that really mean allowing other countries to steal the American patents, copyrights and trademarks for anything related to climate change, efficiency or energy under the draft climate change treaty.

If the United States agrees to a climate change treaty that allows developing countries to seize U.S. intellectual property in this area, economic consequences for green-collar jobs would be devastated. American inventors now hold 50 percent of the world's patents on clean energy, 52 percent of the patents on fuel cells, nearly half of the world's wind patents, 46 percent of the world's solar patents, and 40 percent of the world's patents in the hybrid-electric vehicle market.

Representative Kirk feared: ‘If a climate change treaty specifically allowed compulsory licensing so that Chinese competitors, for example, or European opposition could simply steal the intellectual property of a key U.S. green-collar manufacturer’. He reported an anecdote from Gregg Patterson, the CEO of PV Powered—America's largest manufacturer of solar power inverter technology: ‘One leading American innovator’ told me, ‘If we lose intellectual property rights, capital markets die’.

Representative Howard Berman (Democrat, 28th District of California, and a noted IP ‘maximalist’) expressed similar concerns:

If we want to encourage the international cooperation that's needed in this area, I'm telling you you've got to ensure that the entrepreneurs and the innovators know that their cutting-edge breakthroughs and innovations are protected. This isn't even as much about fair return for the inventors as it is ensuring that people will keep innovating and researching and advancing the technologies because they know that ultimately they will be compensated. So it's a symbiotic relationship. The more we ensure and protect intellectual property, the more we will be able to do in achieving our very important goals with respect to the development and deployment of new energy and environmental technologies.

He was worried that the USA would be deprived of lucrative income from the ‘Green Economy’: ‘The United Nations reported that the global market for environmental technologies could double to $2.74 trillion by 2020 from the $1.37 trillion today because of growth in areas like energy-efficient technologies, sustainable transport systems, and water supply and efficiencies markets’.

Supporting the amendment, Representative Marsha Blackburn (Republican, 7th District of Tennessee), remarked:

American innovators hold 50 percent of the world's patents granted between 2002 and 2008 in the clean-energy field, and I will note that Tennesseans alone hold 1 percent of those worldwide patents in the hybrid/electric vehicle market. It's serious business for our American patent holders. They have invested a lot of time, passion, effort, energy, and economic capital in developing these technologies. It is therefore incumbent upon us in Congress to protect what they have created.

She considered that the language in the draft United Nations Framework Convention on Climate Change ‘would lead to outright theft of our American intellectual property and indirectly benefit the world's most prominent CO2 emitters’.

The resolution reflected intense lobbying from industrial groups including the US Chamber of Commerce, the Emergency Committee for American Trade, the Solar Energy Industries Association, the Natural Hydrogen Association, and the National Association of Manufacturers. According to the Green Patent Blog, Carl Horton, IP counsel from General Electric, said that the new ginger group, the Innovation, Development, and Employment Alliance (IDEA), heavily lobbied members of Congress about the resolution. This new business coalition has sought to promote to the US Congress and the Obama Administration the need for strong IP rights protection to boost innovation and jobs growth.

Without demurral, the House of Representatives agreed to the Larsen-Kirk amendment 432-0.

In addition to the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011 HR 2410 (USA), the United States House of Representatives has also passed the American Clean Energy and Security Act of 2009 HR 2454 (USA), sponsored by Representatives Henry Waxman (Democrat, California's 30th District) and Edward Markey (Democrat, Massachusetts' 7th District).

The chapter on exporting technology has a number of clauses on intellectual property and climate change. Section 441 (8) emphasizes: ‘Intellectual property rights are a key driver of investment and research and development in, and the global deployment of, clean technologies.’ Section 441 (10) stresses: ‘Any weakening of intellectual property rights protection poses a substantial competitive risk to U.S. companies and the creation of high-quality U.S. jobs, inhibiting the creation of new ‘green’ employment and the transformational shift to the ‘Green Economy’ of the 21st Century.’ Moreover, section 441 (11) observes: ‘Any U.S. funding directed toward assisting developing countries with regard to exporting clean technology should promote the robust compliance with and enforcement of existing international legal requirements for the protection of intellectual property rights as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C.3511(d)(15) and in applicable intellectual property provisions of bilateral trade agreements.’

Section 444 (3) provides that the eligibility of countries will be subject to ‘such other criteria as the President determines will serve the purposes of this subtitle or other United States national security, foreign policy, environmental, or economic objectives including robust compliance with and enforcement of existing international legal requirements for the protection of intellectual property rights for clean technology, as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)) and in applicable intellectual property provisions of bilateral trade agreements.’ Section 446 (3) provides that no funds be expended for the benefit of any qualifying activity where that activity or any activity relating to a qualifying activity under section 445 undermines the robust compliance with and enforcement of existing legal requirements for the protection of intellectual property rights for clean technology, as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).’

This legislation was passed by 219 votes to 212, with 3 not voting.

The House of Representatives also passed the appropriations act, the Foreign Operations, and Related Programs Appropriations Act 2010 HR. 3081 (USA). Section 7089 provides: ‘Prior to the obligation of the funds made available in this Act for ‘Contribution to the Clean Technology Fund’ or ‘Strategic Climate Fund’ of the World Bank, the Secretary of State shall certify in writing to the Committees on Appropriations that all actions taken during the negotiations of the United Nations Framework Convention on Climate Change ensure robust compliance with and enforcement of existing international legal requirements as of the date of the enactment of this Act that respect intellectual property rights and effective intellectual property rights protection and enforcement for energy and environment technology, including wind, solar, biomass, geothermal, hydro, landfill gas, natural gas, marine, trash combustion, fuel cell, hydrogen, microturbine, nuclear, clean coal, electric battery, alternative fuel, alternative refueling infrastructure, advanced vehicle, electric grid, or energy efficiency-related technologies.’

In addition to such legislative actions, on the 29th July 2009, the Select Committee on Energy Independence and Global Warming held a hearing entitled, ‘Climate for Innovation: Technology and Intellectual Property in Global Climate Solutions.’ This hearing was promoted thus:

The key to solving climate change and developing clean energy is technology, and at the center of technology are intellectual property rights. In the Space Race, America had a singular competitor. In the Clean Energy Race to stop global warming, America is competing with the Chinese, Germans, Koreans, and countless others. How these countries and the world deal with intellectual property rights will have a huge impact on whether technology is available and deployed to solve our global problems.

The inquiry focused upon ‘the impact of intellectual property rights on global warming solutions and how to encourage American innovation while spreading climate related technologies globally.’

Analysis

The members of the House of Representatives seem to be under a misapprehension about the nature of the draft United Nations Framework Convention on Climate Change. Far from representing a radical change to IP law, the draft United Nations Framework Convention on Climate Change seems merely to reiterate language which is already present in TRIPS.

World Trade Organization (WTO) members already enjoy the flexibility of excluding clean technologies from patent protection in order ‘to avoid serious prejudice to the environment’. Article 27(2) of TRIPS provides: ‘Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law’ (my emphasis). In this context, the third option under discussion in Copenhagen is much more limited than the TRIPS language: ‘[Least Developed Countries] should be exempted from patent protection of climate-related technologies for adaptation and mitigation, as required for capacity-building and development needs’.

Far from being a codeword for theft and stealing, as Republican Representative Mark Steven Kirk would have us believe, TRIPS has long recognized the capacity of nation states to provide exceptions for research, and to engage in compulsory licensing and state use. TRIPS Article 30 recognizes that ‘Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties’. Article 31 acknowledges that Member States may provide for the use of patents by governments of third parties, without the authorization of the rights holder. This article is subject to a number of procedural safeguards, including that ‘the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization’. Thus, the statement of the Republican Representative Mark Steven Kirk about compulsory licensing is oxymoronic since such licensing necessarily involves compensation to the patent holder. In this context, the options are discussion under the second option at Copenhagen—such as compulsory licensing for specific patented technologies; patent pooling; and sharing publicly funded technologies—appear to be entirely within the bounds of TRIPS.

Finally, the concerns of the House of Representatives in respect of transfer of climate-friendly technologies have also been overstated. There has been a longstanding concern within the WTO about IP and technology transfer. TRIPS Article 7 provides: ‘The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations’. TRIPS Article 66(2) provides that ‘developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base’. These articles are relevant to both the first and third options in respect of IP and climate change under contemplation at Copenhagen.

It would appear to be entirely appropriate for the draft text on long-term action under the United Nations Framework on Climate Change to address such matters as subject matter exemptions, compulsory licensing, patent pooling, sharing of publicly developed technologies, and technology transfer. Indeed, it would be a matter of great concern if the proposed agreement did not properly address matters of IP and climate change.

Practical significance

Given the existing framework of international IP law, how should one interpret the legislative proposals of the United States House of Representatives on intellectual property and climate change?

At best, the House of Representatives could be seen as engaging in political posturing in the lead up to the negotiations in Copenhagen over IP and climate change. In this light, the amendment could be seen as a piece of political theatre, designed to pander to domestic industries, to place pressure on the executive, and act tough to foreign competitors.

A more cynical view would be that the House of Representatives has been captured by industry groups, and is reiterating the specious arguments of lobbyists, without critical reflection or appraisal. If true, this would give grounds for concern, as it would show a basic ignorance of the existing framework laid down by TRIPS, and a misapprehension of the options under discussion in Copenhagen.

The Obama Administration, though, may be more willing to compromise than the House of Representatives in dealing with IP and climate change. The Energy Secretary, Nobel Laureate Steven Chu, has expressed a pragmatic willingness to share certain climate-mitigating technology. He observed, for instance, that there was scope for co-operation between the USA and nations like China in sharing technologies like systems for capturing and storing carbon dioxide from power plants:

Since power plants are built in the home country, most of the investments are in the home country. You don't build a power plant, put it in a boat and ship it overseas, similar to with buildings. So developing technologies for much more efficient buildings is something that can be shared in each country. If countries actively helped each other, they would also reap the home benefits of using less energy. So any area like that I think is where we should work very hard in a very collaborative way — by very collaborative I mean share all intellectual property as much as possible. And in my meetings with my counterparts in other countries, when we talk about this they say, yes, we really should do this. But there hasn't been a coordinated effort. And so it's like all countries becoming allies against this common foe, which is the energy problem.

The statement, albeit qualified, by the Energy Secretary would suggest that, at least some members of the Obama Administration are willing to negotiate and make compromises over the options under discussion in the draft negotiating text for long-term action under the United Nations Framework on Climate Change.

The mechanics of requesting trade mark proof of use

Author: Louisa Hetherington (Reynolds Porter Chamberlain)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):779-781; doi:10.1093/jiplp/jpp147

Harwin International LLC v Office for Harmonisation in the Internal Market, Cuadrado, SA (Case T-450/07 Court of First Instance of the European Communities, 12 June 2009)

The Court of First Instance of the European Communities (CFI) ruled that the applicant's written objections to documents put forward voluntarily by the proprietor of earlier trade marks in respect of its use of such marks in the course of cancellation proceedings constituted a formal request on the part of the applicant that the proprietor furnish proof of use of its earlier marks.

Legal context

In Community trade mark cancellation proceedings, Article 56(2) and (3) of Regulation 40/94 (now Article 57(2) and (3) of Regulation 207/2009) provides:

If the proprietor of the Community trade mark so requests, the proprietor of an earlier Community trade mark, being a party to the invalidity proceedings, shall furnish proof that, during the period of five years preceding the date of the application for a declaration of invalidity, the earlier Community trade mark has been put to genuine use in the Community in connection with the goods or services in respect of which it is registered and which he cites as justification for his application. ...

According to European Communities case law, such a request must be made ‘expressly and timeously to OHIM’ (Case T-183/02 and T-184/02 El Corte Inglés v OHIM – González Cabello and Iberia Líneas Aéreas de Espaa (MUNDICOR) [2004] ECR II-965). The question in this case was whether the proprietor of the prior Community trade mark in question had indeed made a formal request in accordance with the provisions.

Facts

Harwin applied to register a figurative mark featuring the word PICKWICK for ‘clothing, footwear, headgear’ (Class 25). The Community trade mark reached registration in September 2000. However, in January 2005, Cuadrado applied to cancel Harwin's mark on the grounds of invalidity under Article 55 of Regulation 40/94. The cancellation application was based on two earlier marks belonging to Cuadrado: the word mark PICK OUIC Cuadrado, S.A. VALENCIA, filed on 24 April 1989 in Class 25, and a figurative mark also featuring the words PICK OUIC and also in respect of Class 25 filed on 2 April 1997.

In its application for a declaration of invalidity, Cuadrado included, of its own accord, certain documentary evidence in respect of the use of its earlier trade marks. In its observations in response, Harwin stated that the evidence so provided was inadequate to prove genuine use. Cuadrado responded by supplying additional documents on proof of use.

The Cancellation Division agreed with Cuadrado and duly granted the application for a declaration of invalidity. Harwin appealed to the Board of Appeal, requesting among other things that the Cancellation Division's decision be annulled on the grounds that it had not assessed whether Cuadrado had adequately proved genuine use of its earlier marks. In this respect, Harwin pointed out that the Board of Appeal had already judged that those documents were insufficient to establish genuine use of the PICK OUIC Cuadrado, S.A. VALENCIA mark when it considered the point in opposition proceedings running parallel to the cancellation proceedings.

The Board of Appeal dismissed the appeal, stating that the Cancellation Division had correctly decided that it was not entitled to look at the issue of proof of use of the earlier marks as Harwin had not made an express request that Cuadrado prove use of its earlier marks as required by Article 56(2) and (3) of Regulation 40/94 (now Article 57(2) and (3) of Regulation 207/2009).

Harwin appealed to the Court of First Instance.

Analysis

OHIM argued that, as had been stated in MUNDICOR, a request to furnish proof of use must be made expressly so that the burden of proving use shifts to the proprietor of the earlier marks. It is that request which confers on OHIM the competence to adjudicate whether genuine use has been proved. In the absence of such request, OHIM argued, it must be assumed that the mark is in genuine use and there is no need to examine the issue.

Because Harwin had not made an express request for proof of use when it submitted its observations, Harwin was, in OHIM's view, not allowed to dispute the genuine use of the earlier marks. In other words, since the objections raised by Harwin in its observations did not constitute an express request, the Cancellation Division and the Board of Appeal could not examine the evidence submitted and were correct in going straight to the question of the likelihood of confusion in respect of the marks in question.

The CFI disagreed and decided that Harwin had ‘expressly and timeously’ requested proof of use (as required by case law) when it stated in its observations that the documents provided by Cuadrado in respect of genuine use of its earlier marks were inadequate. The Court noted that, on a literal interpretation of Article 56(2) and (3), the words ‘so requests’ could be understood as referring to the kind of ‘request’ made by Harwin in its observations when it disputed Cuadrado's evidence. Furthermore, Cuadrado had clearly understood Harwin's request as it duly provided additional evidence in response.

The CFI differentiated this case from the facts in MUNDICOR, in which OHIM's arguments were upheld and it was decided that no request to furnish proof of use had been made as the documents voluntarily submitted by the proprietor were submitted as evidence of reputation, not as evidence of genuine use. In MUNDICOR there was therefore no understanding between the parties that the issue for which evidence was being provided was the issue of genuine use. In this case, however, the CFI remarked that there was a clear exchange between the parties specifically in relation to the question of genuine use.

In the CFI's view, the underlying principles are that:

* the proprietor or an earlier trade mark is obliged to prove the use of its mark only if that use is challenged by the proprietor of the trade mark which is the subject-matter of an application for a declaration of invalidity;
* In the absence of such a challenge, OHIM may confine itself to considering whether a likelihood of confusion exists, without considering proof of use.

Where there is such a challenge of the use, whether by means of a request for proof of use submitted by the proprietor of the trade mark which is the subject-matter of an application for a declaration of invalidity or by means of that party challenging the evidence submitted by the proprietor of the earlier mark to prove use, OHIM is required to examine the issue of proof of use prior to that of the existence of a likelihood of confusion.

Practical significance

It is clearly better for the applicant whose mark is being challenged, whether in opposition proceedings or cancellation proceedings, to state expressly and specifically in its observations in response that it requires the opponent and proprietor of the earlier mark to furnish proof of genuine use. However, where it is obvious that both parties are addressing the point through the production of documents and argument, the Court will accept that the request has been made. This decision turned very much on the particular facts, however, and does not necessarily mean that there is any less need for the applicant party to make it clear what he is requesting.

That Nokia case: catching hold of counterfeits

JIPLP has received the draft of an article by two respected Dutch lawyers on the decision of the High Court for England and Wales earlier this year in the controversial case of Nokia v Her Majesty's Revenue and Customs. In this decision the judge declined to take a broad view of the scope of the European Union's Regulation on the suspension from circulation of goods suspected of being counterfeit when he held, following a close analysis of the European Court of Justice's case law as well as the relevant legal provisions, that a consignment of undeniably counterfeit Nokia phones and accessories could not be seized at Heathrow Airport, London, since -- despite their physical presence in the European Economic Area -- they had not been put on the market there.

We understand that Nokia v HMRC is currently under appeal to the Court of Appeal, and that the appeal will be heard later this month. It is now the authors' intention to submit for publication in JIPLP a revised version of this paper, which will take into account the decision and the reasoning of the Court of Appeal. In the meantime, it is being posted on this blog so that interested readers can view the draft and make pertinent comments concerning it to the authors.

The full text of the draft article can be accessed as a Word document here and its authors, Frank Eijsvogels and Willem Hoyng, can be contacted via the website of Howrey LLP's Amsterdam office.

JIPLP subscribers should be aware that a Current Intelligence note on the High Court decision in this case ("Fakes in Transit Would Not be Counterfeits" by editorial panellist Marius Schneider) will be published in the journal's January 2010 issue and will shortly be made available online through JIPLP's Advance Access service. Marius, incidentally, will be guest-editing the May 2010 issue of the journal, which will have a special focus on anticounterfeiting and enforcement measures such as those which are addressed in this article.

Patentability of gene sequences and Directive 98/44

"No Performance – No Protection? Scope of Protection for DNA Sequences and Directive 98/44/EC" is the title of a draft article received for publication by Michael A. Kock. Dr Kock, a European Patent Attorney is Head of IP,Seeds & Biotechnology, with Syngenta International AG, Switzerland. Writing in his personal capacity, he has been working on an article for JIPLP which is summarised by his Key Issues:

"• The European Court of Justice has been asked to clarify through interpretation of Directive 98/44 whether a DNA sequence is entitled to patent protection as a compound as such, or only under circumstances where the DNA performs its function.

• Amicus curiae observations have been submitted by several EU Member States and the Commission. All argue for a restriction of the patentee’s rights.

• A ruling following the restrictive position would have severe consequences for EU patent holder – especially in the field of plant biotechnology and seeds: not only will isolated DNA become unprotected, but a patentee would also lose rights against the importation of harvested goods produced outside the EU without his authorization.

• Although some of the consequences can be compensated by alternative patent claim drafting and using plant variety protection, patent protection would become significantly weakened. This may have negative consequences for future investments in this field".

Since the European Court of Justice is holding its oral hearing in December, the text of Dr Kock's article is being made available so that interested parties can consider it before the hearing. It is hoped that, in the light of the outcome of the decision itself and responses to Dr Kock's analysis, a final version of this article will be published in JIPLP after the Court has given its final ruling.

You can read the draft article in full here. If you'd like to contact Dr Kock and offer him your comments and observations on this draft, please email him here

Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, OJ 1998, L213/13 can be accessed here.

Crystal-clear ruling in border measures reference

Author: Marius Schneider (Eeman & Partners, Attorneys-at-law, Brussels; co-author of Border Measures)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):782-784; doi:10.1093/jiplp/jpp151

Zino Davidoff SA v Bundesfinanzdirektion Südost (Case C-302/08) European Court of Justice, 2 July 2009

The holder of an internationally registered trade mark designating the European Community is entitled to file a ‘Community’ application for customs action under Article 5(4) of Regulation (EC) 1383/2003 of 22 July 2003, just like the proprietor of a Community trade mark.

Legal Context

The European Union's ‘border measures’ Regulation 1383/2003 empowers the customs authorities of the EU Member States to retain goods suspected of infringing certain IP rights in order to enable the right-holder, within a fixed term, to initiate proceedings to determine whether an IP right has been infringed or to settle the matter under the simplified procedure. The filing of an application for action with customs by the right-holder is a cornerstone of the system of border measures, since this application contains important information and a detailed description of the authentic as well as the infringing goods that facilitate their recognition and identification by the customs authorities.

Since the filing and annual renewal of national applications for action throughout the 27 Member States can be burdensome, right-holders often prefer to take advantage of the possibility to file a ‘Community’ application for action under Article 5(4) of the Regulation. A Community application for action is a single application for action designating several Member States. Only the owners of a ‘Community IP right’—a Community trade mark, a Community design right, a Community plant variety right, a designation of origin, geographical indication, or geographical designation protected by the Community—may file such a Community application for action.

Facts

Davidoff lodged a Community application for action with the competent German customs department, the Bundesfinanzdirektion Südost, on the basis of several internationally registered trade marks designating the Community. That application was dismissed on the grounds that Article 5(4) of the Regulation concerns only ‘the right-holder of a Community trade mark’ and that that the Border Measures Regulation was not amended by Community legislation despite the Community's accession to the Protocol relating to the Madrid Agreement concerning the international registration of marks of 27 June 1989 (the ‘Madrid Protocol’).
Davidoff appealed to the Finanzgericht München, which took the view that, by its very wording, Article 5(4) of the Regulation also applied to the right-holder of an internationally registered trade mark designating the Community, since such a trade mark is treated as a Community trade mark with regard to its effects in the Community. Nevertheless, the Finanzgericht München decided to stay the proceedings and to seek clarification from the European Court of Justice (ECJ).

Analysis

The ECJ manifestly thought the case was crystal-clear, since it did not only decide to proceed with the ruling without the need for an Opinion of the Advocate General but also handed down a very short judgment of merely 27 paragraphs. The fact that all parties, namely the referring court, Davidoff as the applicant in the main proceedings, all Member States submitting observations, and the EU Commission, agreed on the answer to be given to the question referred probably encouraged the Court to be concise.

At the outset, the Court noted that Regulation 1383/2003 was adopted before the accession of the Community to the Madrid Protocol, its accession date being 1 October 2004.

The ECJ then emphasized that Article 151(2) of Regulation 207/2009 of 26 February 2009 on the Community trade mark (codified version OJ 2009 L 78 p 1), which provides that

‘if no refusal has been notified ... or if any such refusal has been withdrawn, the international registration of a mark designating the European Community shall ... have the same effect as the registration of a mark as a Community trade mark',

meant to treat, as far as the practical effects are concerned, internationally registered marks as Community trade marks.

The Court concluded that, following this assimilation into Community trade marks of internationally registered trade marks, it must necessarily be accepted that, by acceding to the Madrid Protocol, the Community legislature intended to allow the right-holders of internationally registered Community trade marks to file a Community application for customs action under Article 5(4) of the border measures Regulation.

Practical Significance

Although one may regret the fact that the operative part of the ECJ's judgment does not specifically provide that the owners of internationally registered trade marks designating the Community may lodge Community applications for action like right-holders of a Community trade mark and even though the decision contains a few typos, the judgment is to be approved.

The owners of internationally registered trade marks—and by analogy also designs—designating the Community may file Community applications for action with customs. They thus enjoy the main advantage of the Community application for border seizure which is, certainly in comparison to the handling of 27 national applications, a simplified exercise in management:

Only one Community application for action need to be filed with one of the competent customs departments in any Member State. Once granted in the first Member State, the decision is addressed by the customs department which took the decision to the other Member States designated in the application for action.

The Community application for action has a uniform expiry date, as the period during which the customs authorities are to take action on the basis of the application shall be set at 1 year, and can be renewed under a simplified renewal procedure with a single renewal request.

The right-holder may, as long as the Community application for action remains valid, in the Member State where the application was originally lodged, enter a request for action to be taken in another Member State not previously mentioned. In such a case, the period of validity of the new application will be the period remaining under the original application, and it may be renewed in accordance with the conditions applying to the original application.

The decision represents progress in reducing administrative hurdles for IP right-holders in the everlasting battle against counterfeiting and piracy and, although the case appeared crystal-clear from the outset, the clarification is welcome.

The author's correspondence email address is here