It's finally happening! - IP - Withers & Rogers
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IP
review
Inside...
Is this your patent, sir?
Looking at the importance of ensuring that you own patent rights.
Why doesn’t every company have an IP director?
What do the experts say?
Is the UK one of the least inventive countries?
Measuring inventiveness of the world’s leading economies.
It’s finally happening!
After years of preparation and anticipation,
the Unitary Patent Package is almost upon us.
spring 2017
withersrogers.com
2
Contents
3 Is this your patent, sir?
Looking at the importance of
ensuring that you own patent
rights.
4-8 It’s finally happening!
After years of preparation and
anticipation, the Unitary Patent
Welcome to the Spring
Package is almost upon us.
9 Future Enterprises v
McDonald’s: A family affair
Can ownership of a family of
2017 edition of IP Review
trade marks help to prove
infringement? Since the inception of the European patent system
there has been a desire for a single patent right
10 -11 The first beneficiary covering the whole of Europe, and a court with the
of the Unitary Patent? power to enforce such patents.
European shale oil and gas.
And now, finally, after 40 years should consider appointing a
of trying, it looks like that desire Chief IP Officer.
12-13 Why doesn’t every is about to be realised; the UK’s
company have an IP director? announcement in November that it We’ve also examined new figures that
What do the experts say? will ratify the relevant agreements suggest that the UK lags behind other
has paved the way for the Unified major economies in terms of the
Patent Court and the Unitary Patent number of patents filed per capita,
14 - 15 Is the UK one of the to come into effect this winter. Our and the possible reasons for this.
least inventive countries? main article this issue explains the
Measuring inventiveness of the new system and its benefits and Finally, we’ve looked at some
world’s leading economies. disadvantages, and we look at one interesting recent trade mark
industry which might be an early decisions. The Rubik’s Cube decision
beneficiary. in particular will concern those who
16 The final twist rely on 3D trade marks to protect
Rubik’s Cube trade mark functional products.
Elsewhere in this issue we look at
declared invalid by EU Court.
the crucial but often overlooked
question of patent ownership. This We hope you enjoy this issue.
is one of the many issues which
exercises those with responsibility
for management of Intellectual
Property and IP strategy within
organisations, and we argue that, as
IP becomes increasingly important to Matthew Howell
businesses of all sizes, all businesses Editor
IP review spring 2017
3
Is this your Patents
patent, sir?
Patent rights can have huge commercial value.
They offer the patent owner up to 20 years in
which to monopolise an area of technology,
giving the owner the legal power to exclude
competitors. Given the value of patent rights,
it is important to take steps to ensure that you
actually own them and that no third party can
lay claim to them.
The first step in determining transferred to their employer as party will be able to make the
ownership of a patent is to identify long as the employee has been invention, but the agreement of
the inventor (or inventors). In the employed to invent (for example, as all parties will be required to issue
UK, an inventor is a person who has a researcher) or the employee is in a licences. This default arrangement
contributed to devising the “inventive senior position (such as a director or might favour some parties over others.
concept” - the innovative technology senior manager). In all other cases, the For example, the default arrangement
the patent seeks to protect. An invention belongs to the employee. So, favours a manufacturer who is in a
inventor will be somebody who inventions made by a junior employee position to make and sell the invention,
conceives or implements the concept, in the sales department, for example, while another party hoping to rely on
or provides solutions to problems would belong to that junior employee, licence income could be prevented
discovered while implementing the not their employer. from doing so by the manufacturer
concept. Somebody who has merely refusing to agree to the licensing deal.
followed instructions to perform It is important to check whether an It is important to seek advice on the
routine tasks, without showing any inventor is actually an employee (for best way to structure collaborations
initiative or solving any problems along example, a PhD student is not usually as early as possible for the good of all
the way, will not usually be considered an employee). It is also important to parties involved.
an inventor. Neither will somebody confirm whether the company the
who has merely managed or financed employee is actually employed by The best advice is to take proactive
the project while making no technical is the intended owner of the patent steps to secure ownership of your
contribution. rights. For example, an employee in a patent rights as early as possible.
group of companies may sometimes Over time, the risk that inventors
All of the inventors have a right to be be employed by a subsidiary company, or employees will move, die or fall
named on the patent application. It is whereas the patent rights are to out increases, making it difficult or
especially important to name all of the belong to a holding company, in which impossible to have transfer documents
inventors correctly for the US, where case an assignment would be needed signed, leaving unanswered questions
providing false information about from the subsidiary to the holding about ownership which represent a
the identity of inventors can lead to a company. risk to your business. A disgruntled
patent being invalidated. inventor leaving a business with
Where there is even the slightest valuable patent rights in their name
Inventors are the default owners of doubt over whether the rights to an can hold that business to ransom.
their invention (and entitled to the invention have been automatically Such risks can cause problems when
patent rights), unless there is an transferred to the desired owner, the seeking investment for your business
alternative agreement in place. This inventor(s) should be asked to sign or when trying to sell your business,
means that any external consultants formal transfer agreements. resulting in deals falling through
or subcontractors you engage to work or offers being reduced. Dealing
on an invention will own the rights to Special attention is required where with ownership early on is always
that invention; their rights will not be inventions result from collaborations cheaper and easier than resolving
automatically transferred to you even between two or more parties, where disputes over ownership which arise
though you might have paid them for careful consideration must be given once the value of a patent has been
their work. So, when engaging external not only to the transfer of rights demonstrated, when the commercial
consultants or subcontractors, it is from the inventors but also to the stakes are highest.
important for your contract with them ownership arrangement between the
To find out more
to assign their rights to you. parties. contact Chris Froud
cfroud@withersrogers.com
In the UK, inventions made by By default, ownership will be shared
employees are automatically equally between the parties. Each
4
The main benefit of the UP is that it is a single
patent right covering all of the available UP
member states. The UPC will enable patent
holders to enforce their rights in all of these
states with a single legal action (which can be in
the language of the patent), meaning that it will
no longer be necessary to bring legal action in
each country separately.
It’s finally
happening!
After years of preparation, argument and anticipation, the
Unitary Patent Package (UPP), consisting of the Unitary
Patent (UP) and the Unified Patent Court (UPC), is almost
upon us. Administrative preparations for the UPC and the
UP are now well advanced, and the national ratifications
of the relevant legislation are being coordinated to ensure
that the UP and UPC can hit the ground running once the
required ratifications have been completed. Following
the announcement in November last year that the UK
will ratify, we expect the system to be up and running on
1 December 2017, so now is a good time for a recap on
what the system is, how it will work and what you as patent
holders or applicants should be thinking about now.
IP review spring 2017
5
Patents
What is the Unitary Patent Package? It is intended that in time the UPC will also have exclusive
jurisdiction over traditional “European” patents which cover
The Unitary Patent Package consists of the Unitary Patent a UPC member state, though there will be a transitional
(UP) and the Unified Patent Court (UPC). period of at least 7 years in which traditional (i.e. non-
unitary) European patents can also be litigated through the
The UP (or more formally the European Patent with Unitary existing national courts. Alternatively European patents can
Effect) is a new patent right for Europe, which will provide be opted-out of the jurisdiction of the UPC completely.
a single patent right covering up to 26 of the current 28
European Union countries. The UP will initially extend to How do I obtain a Unitary Patent?
those countries that have ratified the relevant UP/UPC
legislation before the start date (and may cover around UPs are obtained by filing a conventional European patent
18 countries), but eventually future UPs will cover all 26 application and selecting the UP option when the application
signatory countries, when the remaining countries have is granted. Nearly all European patent applications that are
completed the ratification process. pending when the UP comes into effect will be eligible to
elect the UP option, though old cases with a filing date
The Unified Patent Court is a new Court for patent matters before 1 December 2006 will not be eligible.
in Europe. It will be the only court that is able to deal with
matters relating to the infringement and validity of UPs.
+
6
...It’s finally happening!
It is important to note that a granted UP will only cover those So, if you currently validate your European patents in four
EU member states that were part of the UP system at the or more EU countries, you’ll likely see a reduction in renewal
time of selecting the UP option. Coverage for the other EU costs if you take up the UP option. On the other hand, if you
member states will be available via the traditional national currently validate your European patents in three countries
validation route. or fewer, renewal costs will likely increase.
What are the cost implications? What are the benefits?
As the process of applying for and obtaining a European The main benefit of the UP is that it is a single patent right
patent will remain the same, the costs involved in that covering all of the available UP member states. The UPC will
process will not change. The difference in cost is at the post- enable patent holders to enforce their rights in all of these
grant stage, when the European patent must be validated states with a single legal action (which can be in the language
at the national patent offices of the countries in which of the patent), meaning that it will no longer be necessary to
patent protection is required. For a traditional European bring legal action in each country separately.
patent this process typically involves filing translations of all
or part of the granted patent into an accepted language at It will also simplify administration with a single renewal fee
each of the relevant national patent offices. For a validation and a single patent office (the EPO) at which to lodge any
programme covering several states translation costs can assignments, name changes etc.
mount up quickly. In contrast, electing the UP requires only
a single translation of the granted patent into either English Are there any disadvantages?
(if the language of the patent is either French or German) or
into any EU official language (if the language of the patent is The unitary nature of the UP is also its main disadvantage,
English). Accordingly, the post-grant validation costs for a UP as a UP will be treated as a single asset for all purposes. This
will be significantly less than the costs involved in obtaining means that if the validity of a UP is successfully challenged at
equivalent protection via the traditional route. the UPC, the patent will be revoked (cancelled) in its entirety,
leaving no rights in any of the countries that it covered.
Annual renewal costs may also be significantly reduced, as Accordingly, applicants should carefully consider whether it
the post-grant official renewal fees for a Unitary Patent will is appropriate for key technologies to be covered by UPs, or
be equivalent to the cost of renewing a patent in the UK, whether the traditional European patent route resulting in
France, Germany and the Netherlands. grant of a bundle of national patents is safer.
Additionally, it will not be possible to cherry-pick the
countries in which protection is to be maintained after
grant by failing to pay renewal fees in the countries where
IP review spring 2017
7
protection is no longer required. Instead, a single renewal by opting-out at any time, provided that no action has been
fee for the UP will be payable annually, and failure to pay commenced in the UPC (e.g. an infringement or revocation
this renewal fee will result in the loss of the patent in every action) in relation to the patent. In addition, there will be a
country in which it was in force. “sunrise period” starting around September 2017 in which
patent owners can opt their European patents out of the
Similarly, as the UP is a single asset it will not be possible jurisdiction of the UPC before the UPC is in operation.
to transfer the patent to another owner on a country-by-
country basis. If the patent is to be transferred to another Most court actions are commenced by the patent proprietor,
owner, it must be transferred for all of the countries that it and the arrival of the UPC will simply increase your options
covers, although it may be licensed to different parties on a as to when and where a Court action for patent infringement
geographical basis. is started. The use of the opt-out will usually only become
relevant if a rival instigates proceedings on one of your
What should I be thinking about now? European patents, such as by filing a revocation action. If
a patent is not opted out a rival could choose to use the
As the deadline for selecting a UP at the post-grant validation UPC, and once an action is filed you will not be able to opt
stage is short (only a month from the date of grant of the the patent out of the UPC’s jurisdiction. If the patent is held
patent), you should start to consider whether your existing to be invalid by the UPC it will therefore be revoked for all
European patent applications should become Unitary UP member states covered by the patent. On the flipside, if
Patents, or whether the traditional approach of individual your patent is opted out and a rival instigates an action at a
national validations is more appropriate. national court of their choice it will not be possible to counter
with an action at the UPC.
If you have European patent applications that are
approaching the grant stage and you want them to become Accordingly, if you have European patents that are of
Unitary Patents rather than bundles of individual national particular strategic importance, for example where a major
validations, it may be possible to delay the grant process revenue stream is protected by a single European patent,
until the Unitary Patent option becomes available for these and the ability to obtain a single injunction covering multiple
applications. Your patent attorney will be able to advise you countries is of lesser importance, you may wish to consider
on the steps to take if this option is of interest. opting those European patents out during the sunrise
period, in order to eliminate the risk that an aggressive rival
You may also wish to consider whether your existing will instigate a revocation action as soon as the UPC opens
European patents should be opted-out of the jurisdiction for business. Again, your patent attorney will be able to
of the UPC. By default the UPC will become a new option advise you on this issue.
for litigation for all existing European patents for both the
+
patentee and third parties, but this option can be removed
8
...It’s finally happening!
10 Reasons to welcome the Unitary Patent Package
• Impressive geographical coverage - A Unitary Patent possible to secure an ‘interim injunction’ while the case
will provide protection spanning most of the countries is being heard; to date this type of intervention has only
of the EU. With a population of over half a billion people been available readily in Germany.
and a GDP valued at more than $18 trillion, this region
represents the largest market in the world. • Expediency – The Unified Patent Court will resolve
cases much more quickly than is possible under the
• Simplicity - The unitary patent system offers much current system. If a case is brought, it will be processed
greater simplicity for users. Instead of having to validate and a judgment passed down within a year. This means
a granted European patent on a country-by-country businesses can bring their case to court more quickly
basis, innovators will be able to achieve the same if needed, with the added protection of an ‘interim
protection with a single Unitary Patent maintained by a injunction’ while they do so. The alleged infringer, on the
single renewal fee. other hand, will have to defend the case, in the
knowledge that, if they lose, they would be forced to pay
• Cost effectiveness - The unitary patent system is cost damages. Alternatively, they could choose to settle out
effective for everyone. The system becomes cheaper, of court.
by comparison with traditional bundle European
patents, the more countries there are where your • Better for SMEs – Some small and medium-sized
products or services require protection. businesses have been reluctant to pursue patent
litigation in the past because it can take two years or
• Unexpected benefits – Where previously a European more to achieve a resolution and the costs associated
patent may have only been validated in, say, five EU with bringing a case were regarded as too great.
countries, the Unitary Patent covers 26 of the 28 The unitary patent system is more agile and the ability
member states for a similar cost to the five previously. to secure an interim injunction will appeal to SMEs
These “bonus” countries could provide unexpected particularly by providing an incentive to their opponents
benefits to companies. Infringements can arise anytime to settle given the much bigger market from which they
and anywhere, so the impressive geographical coverage could be excluded. Discounted court fees may also
provided by a Unitary Patent could prove useful in apply for some small businesses and universities.
the future. It could also open the door to new market
opportunities in countries where the business has not • Choice of language – For businesses in the UK
previously considered trading. and other English-speaking countries, there is a clear
advantage to being able to litigate in one’s mother
• Access to a well-run Unitary Patent Court – Under tongue. This will be possible at all Unified Patent Court
the current system, different laws and working practices hearings. Once the unitary patent system is established
mean there is a lack of consistency in the way that it will also no longer be necessary to obtain post-
patents and other intellectual property rights are grant translations, although this will continue to be a
enforced at jurisdictional level. Once established, the requirement for a temporary period. As well as
Unified Patent Court will take a centralised approach, simplifying processes, these changes should help to
with the power to enforce IP rights across the entire reduce cost.
region. The new court system will have central divisions
in three European cities – London, Munich and Paris. • Clear timelines – The Unified Patent Court system will
introduce a clearer timeline and set deadlines for the
• Pan-European powers of enforcement – Spanning completion of each stage. This will bring added clarity
the world’s largest market, the Unified Patent Court will for all and help to prevent unnecessary delays. The UPC
have significant powers of enforcement at its disposal. has set itself the goal of hearing patent cases within
This means that any business deciding to litigate to 12 months from commencement and with just a one
block an alleged infringement of its patent rights could day trial.
secure a pan-European injunction. It may also be
To find out more
contact Russell Barton
rbarton@withersrogers.com
IP review spring 2017
9
Trade Marks
Future Enterprises
v McDonald’s:
A family affair
Can ownership of a family of trade
marks help to prove infringement?
According to the EU’s General Court, • its earlier marks had a reputation in of use to the Court). Without use,
the answer is yes. In a recent case, the the EU; the existence of a number of similar
Court held that McDonald’s’ family of • its marks were sufficiently similar to trade mark registrations is irrelevant.
“Mc-” trade marks creates a scope of MACCOFFEE so as to create a link in This is because consumers need to
protection which allows the business the mind of the consumer; and be aware of these marks in order
to prevent the registration of marks • use without due cause of to draw the necessary conceptual
which employ the prefixes ‘Mac’ and MACCOFFEE would cause McDonald’s link. No lower limit was specified by
‘Mc’, together with the generic name of to suffer one of the “reputational” the Court for the number of marks
a food or beverage, in respect of food harms of free-riding, tarnishment, or required for a family. Whether
and beverages. dilution of distinctive character. marks are a family depends on their
having common characteristics, such
Future Enterprises is a Singaporean In upholding the EUIPO’s decision, the as the reproduction in full of the
food manufacturer, which markets Court found that McDonald’s’ trade same distinctive element with the
goods under brands including MacTea, mark portfolio did constitute a ‘family’ addition of a graphic or word element
MacCereal, MacChoco, MacChocolate, of ‘Mc-’ trade marks. McDonald’s differentiating each one. This case also
MacFito and MacCoffee. evidently had a reputation. The shows that the structure of a trade
relevant public would establish a mark — in this case “Mc+foodstuff”
In 2008, Future Enterprises applied to link between the ‘MAC’ element — could also constitute a family
register MACCOFFEE as an EU trade in MACCOFFEE, and the use of characteristic. Lastly, the infringing
mark for foodstuffs and beverages. MACCOFFEE without due cause would mark needed to contain elements
The registration was granted in 2010. therefore ride on the coattails of the which “connect with characteristics
Subsequently, McDonald’s applied to reputation of the McDonald’s trade common to the family”.
have the trade mark declared invalid marks. In its decision, the General
on the basis that the MACCOFFEE Court provided some valuable It is worth noting that McDonald’s’
trade mark takes unfair advantage of guidance on the relevance and impact monopoly does not extend to “Mc-”
the distinctiveness and reputation of of ‘families’ of trade marks in relative alone in the food and drinks sector.
the McDonald’s trade mark. In making grounds proceedings. Rather, the monopoly lies in the
this argument, McDonald’s relied on combination of a non-distinctive
its earlier EU trade mark McDONALD’S, The Court confirmed that the existence foodstuff with “Mc-”.
as well as 12 other marks which of a family of marks is a relevant factor
employed ‘Mc’ as prefixes. The in assessing whether a new trade mark The judgment confirms the value
European Union Intellectual Property creates a link in the consumer’s mind of a branding programme which
Office (EUIPO) found in McDonald’s’ to an existing trade mark. A condition establishes a common root (e.g. Mc-)
favour, and Future Enterprises of this relevance, however, was that for different product or service lines.
appealed to the EU General Court. each mark claimed to be in the family To find out more
had to be in use (so placing on the contact Tania Clark
In order to succeed with its case, owner of the existing trade marks the tclark@withersrogers.com
McDonald’s would have to show that: burden of having to provide evidence
10
Oil and Gas
The first beneficiary
of the Unitary Patent?
European shale oil and gas
Most industries today are fairly well established, meaning that companies operating within those
industries have a good understanding of their key manufacturing and sales territories, and can
take appropriate steps to protect their markets in those territories using patents. For example, an
automotive company which holds patents in the US, France and Germany is likely to be well placed
in terms of being able to secure and protect a market share.
However, in emerging industries, particularly economically or even technically recoverable topography can make facilitating shale
those which are highly regulated, it is not using current extraction technologies. extraction more challenging, in that
always as straightforward for innovators to plays may be spread across a number
know where their key commercial territories Shale plays within Europe are thought to be of countries, and the physical nature of
will be over the next ten or twenty years. deeper, more dispersed and within more the topography can make it challenging
The European shale oil and gas industry is challenging geological formations than to provide resources such as water and
an example of such an industry. those found in territories where the shale proppant to extraction sites. Existing
oil and gas industry is more established extraction solutions, which have been
The first layer of uncertainty in this industry such as the US. The European landscape developed for sites where resource delivery
stems from the oil and gas resources. therefore presents unique challenges, and and storage is not an issue, may not be the
Exploration is in its infancy in Europe and as these technical challenges may require optimum solutions for the European
a result there is a high level of uncertainty innovative solutions to be developed in shale industry.
over which European countries possess order to make mainstream shale extraction
shale resources (or ‘plays’) that are economical. In addition to this, European The European shale market is therefore
crying out for innovation to provide
technologies which can increase the
IP review spring 2017 safety of shale extraction and improve its11
economic viability within the European potential but is restricting exploration at up to the relevant agreements. Given that
landscape. Innovators who develop unique present. Thus, there are territories which many of the countries which appear to
technologies which address these specific appear to have the potential to support a have significant potential for being key shale
challenges may find themselves well placed local shale industry, yet at present, due to territories are within the EU, the ability to
to benefit hugely from what is expected to concerns over the technologies currently cover all of these territories together via
become a strong emerging industry over available for shale extraction, progress the Unitary Patent is of significant benefit
the next twenty years. towards unlocking the potential in these to innovators within the European shale
countries is being stifled. industry. We estimate that savings of
The second layer of uncertainty stems between €25,000 and €65,000 (depending
from the regulatory environment within Innovators seeking to exploit this emerging on the size of the patent specification) can
Europe. Europe is at present divided on market are therefore faced with a dilemma: be made at the validation stage by validating
whether shale extraction is a positive or in which European territories do they seek a granted European patent as a Unitary
a negative activity. Given that shale plays patent protection? Do they take the less Patent rather than individually validating in
may be located close to cities, towns and costly but risky approach of gambling on each of the corresponding countries. More
villages, or areas of natural beauty, there is which territories might be commercially significantly, we estimate that the cost of
understandable concern over the safety of important over the next 10 to 20 years, maintaining a Unitary Patent over its full
shale extraction techniques. Governments and seeking patent protection in only those potential 20 year term could be reduced
therefore have difficult decisions to make territories, or do they take the safer but by as much as €125,000 in comparison to
on whether to permit shale extraction, much more expensive approach of covering nationally renewing each national patent in
especially in view of public opposition. all bases? the corresponding state.
The UK is currently one of the leading Under the current European patent Of course, it is not all about cost. Patentees
European territories in favour of permitting system, a patent owner must at the point should weigh up the potential cost benefits
shale extraction, and exploration licenses of grant nominate the territories in which against other considerations such as
were granted at a number of sites in the European patent is to be made to have whether the patents should be within
2015/2016. Countries such as Poland and effect. For a given country, the cost of this the exclusive jurisdiction of the Unified
Romania are thought to have sizeable shale validation process will include an official Patent Court and the ability to drop the
reserves, and the governments of those fee payable to the national patent office patent in individual countries, which will
countries are in favour of permitting shale and may require the filing of a translation not be present under the Unitary Patent
extraction. We have however seen major of the patent specification into the national Package. However, we think that for the vast
US oil and gas companies entering these language of the territory. For a patent owner majority of innovators within this sector, the
territories for shale exploration purposes to validate its European patent in all EPC Unitary Patent will be viewed as a welcome
and subsequently pulling out, citing poor member states, the cost is significant. commercial tool.
test results among other concerns. In
contrast, countries such as France, which However, help may be at hand in the form
To find out more
appears to have significant shale reserves, of the Unitary Patent Package. As explained
contact Stuart Latham
are currently prohibiting shale extraction elsewhere in this issue, the Unitary Patent slatham@withersrogers.com
using existing technologies. Similarly, will provide a single patent right covering all
Germany appears to have reasonable shale of the EU member states that have signed12
Intellectual Property
Why doesn’t
every company
have an IP
director?
At a recent workshop hosted at our
London office, a group of Intellectual
Property strategy experts mused on
the question “Why doesn’t every
company have an IP director?”
Intellectual Property is increasingly the cornerstone
for business success, yet in many organisations
responsibility for Intellectual Property is, at best, divided
between several different departments (e.g. patents
are covered by the technology or engineering function,
whilst trade marks are the province of the marketing or
legal department) or, at worst, is not picked up by any
department, as each executive believes that IP is being
looked after somewhere else in the business.
IP review spring 201713
Such arrangements risk missing out It’s clear that significant benefits, highlights the need for the CIPO to be
on valuable IP, as IP is either not including better decision making on engaged with all areas of the business.
recognised at all or else is viewed too IP issues (or even just some decision
narrowly (e.g. as patents only), which making!) can be derived from a strong Aside from the improved decision making
can lead to IP such as copyright and appreciation at board level of the and better strategic use of IP that comes
trade secrets going unnoticed, and significance of Intellectual Property. with the CIPO role, one of the clearest
therefore failing to add value. But what would a senior role with benefits of the role is that the CIPO
responsibility for IP (called something like becomes the single point of contact
Moreover, such arrangements are not “Chief IP Officer” or “IP Director”) entail? within the business for IP matters, and
conducive to the consideration of IP develops a corporate memory on the
issues at a strategic level. IP is rarely IP issues will impinge on multiple specific IP challenges and benefits within
a board-level responsibility in these different areas of a business, so a CIPO the sectors of the business.
situations, so receives little board- needs to be a senior employee with a
level attention, except in exceptional strong understanding of the needs of
situations such as when the the business as a whole. Rather than
organisation is sued for infringement just managing patents and other IP, All organisations create
of a competitor’s IP. the role of CIPO involves developing a Intellectual Property and
detailed understanding of the business
As long ago as 2004 Bill Gates, and formulating effective IP strategies
should have a plan for
then chairman of Microsoft, was that will further the interests of the collecting, understanding,
espousing developing, at board level, business. Accordingly, the role requires monitoring and enforcing
a sophisticated understanding of IP an IP strategist, rather than an IP
issues, saying: “over the last 10 years, manager. their rights.
it has become imperative for CEOs to
have not just a general understanding The CIPO must engage with the Of course, even the most confident,
of the Intellectual Property issues Chief Information Officer, the Chief knowledgeable and authoritative
facing their business and their industry, Technology Officer and General CIPO will struggle unless the Board
but to have quite a refined expertise Counsel, as well as other functions understands that IP and the role of
relating to those issues... It is no longer such as human resources and IT in CIPO are important to its business; if
the legal department’s problem. order to build this understanding, there is recognition at board level of the
CEOs must now be able to formulate and marry it with their own expertise significance of IP, half the battle is won!
strategies that capitalise on and in Intellectual Property issues to
maximise the value of their company’s develop these IP strategies. Good All organisations create Intellectual
Intellectual Property assets to drive communication skills and an Property and should have a plan for
growth, innovation and cooperative understanding of both technology collecting, understanding, monitoring
relationships with other companies”, and business issues are therefore and enforcing their rights. The plan
whilst in 2014 Frans Van Houten, CEO prerequisites. should be strategically aligned with the
of Philips, argued the same point more company’s business goals. To enable
succinctly: “A business strategy without The CIPO must also have the authority such understanding and alignment,
an IP strategy is no strategy”. and confidence to share their all businesses should ensure that
expertise in IP matters with the CEO someone “owns” the Intellectual
The workshop identified plenty of and other executives in language that Property remit. In an ideal world all
examples where well-executed IP they will understand. A major part organisations would have a role of Chief
strategies had helped to add value of a CIPO’s role is to translate the Intellectual Property Officer, to enable
to a business. In one such example jargon that is particular to the field of proper interdisciplinary understanding
a company with a small IP portfolio Intellectual Property into appropriate and to benefit from the hugely valuable
identified a target company with a language, and to translate hard IP intellectual assets being created on a
complementary portfolio of IP rights issues into business impact issues that daily basis by the business.
and acquired the target company, can be understood by those who don’t
thereby bolstering its IP position and specialise in IP.
To find out more contact
helping it to counter a known challenge
Karl Barnfather
from a competitor whose patents Additionally, the CIPO must be kbarnfather@withersrogers.com
were being infringed. The acquisition able to identify and capitalise on IP
of the target company and its patent opportunities as they arise, wherever
assets were key to enabling a defence in the business those opportunities Matthew Howell
strategy which enabled the company may come from, which further mhowell@withersrogers.com
to retain its market share.14
Patents
Is the UK one of
the least inventive
countries?
A recent document published by
the European Patent Office (EPO)
includes a graph which claims
to be “measuring inventiveness”
of the world’s leading economies
using the ratio of European patent
filings to population1.
??????
The data, reproduced in the graph (top right), shows the
number of European patent filings per million inhabitants in
2015. Switzerland comes out on top, with 873 applications
per million inhabitants, whilst the UK sits 16th on the list with
only 79 applications per million inhabitants. This means that
Switzerland has over ten times as many European patent
filings as the UK, per million inhabitants.
IP review spring 201715
European Patent Filings per Million Inhabitants in 2015 A more plausible explanation is that
the UK has a different patent filing
900 “culture”, which originates from a
number of factors:
800
700 • There is a lower general awareness of
the value of patents
600
• Some UK tech companies attempt to
500 obtain competitive advantage in
other ways, for example by going to
400 market as quickly as possible or
relying on trade secrets
300
• Much of UK innovation originates
200 with smaller enterprises who are
either not aware of the value of
100
patents, or who find the costs
0 involved in obtaining patents
prohibitive (compare this with
nd
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es
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ay
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Ko
s
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Samsung and LG who account for
Fr
Sw
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itz
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Ch
Korea’s top ranking)
Resident Patent Filings per £100 Billion GDP • If they do file patents at all, UK
companies often file a single
10000 all-encompassing “blockbuster”
Republic of Korea application, compared with Japanese
9000
or Korean companies which tend
8000 to file a series of applications for
incremental improvements, creating
7000
a so-called “patent thicket”
6000
Japan • Some UK innovation is in sectors not
traditionally associated with patents
5000 - for instance computer games or
China
financial technology
4000
3000 Bear in mind that the UK’s anti-patent
USA
culture is by no means universal - just
2000
ask ARM Holdings. SoftBank’s £24bn
1000
United Kingdom takeover was the biggest ever tech
deal in the UK, and the majority of
0 that value can be attributed to ARM’s
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
patent portfolio.
Additional data, provided by the World fewer patent applications, in relative
So the reasons are many and varied,
Intellectual Property Organisation terms, than their competitors in other
but the message to UK companies is
(WIPO)2, shows resident patent filings countries.
clear: your international competitors
per £100bn GDP for the last 10 years
are likely to be filing more patents than
- see the graph above. The UK is at the What is less clear is why the numbers
you, and you need a strategy that takes
bottom of the pile, flat-lining at only are so low. Broadly speaking, there are
this into account. This might involve
about one filing per £100m GDP. In two possible explanations.
filing more patent applications, or
2015, the USA beat the UK by a factor
simply becoming more aware of your
of about two and Korea beat the UK by One is that the UK really is less inventive
competitors’ patent portfolios.
a factor of over ten. than the rest of the world - as the EPO
graph would have you believe. We would To find out more contact
These graphs show slightly different like to think that’s not true - the UK is Jim Ribeiro
things. One shows European patent renowned in the world of innovation, with jribeiro@withersrogers.com
filings, the other shows resident UK inventors famously having invented
patent filings (i.e. filing in a resident’s the telephone, the world wide web, and
“home” patent office). However they recently even the holographic television, Matthew Pennington
mpennington@withersrogers.com
both make the same point loud and to name but a few.
clear - UK companies file significantly
1
EPO Facts and figures 2016, page 15 2
http://ipstats.wipo.int/ipstatv2/Trade Marks Contact Us
The final twist: London:
4 More London Riverside
Rubik’s Cube trade mark London SE1 2AU
United Kingdom
declared invalid by EU Court Tel: +44 20 7940 3600
Fax: +44 20 7378 9680
In a recent decision of the Court of Justice of the European Union
(CJEU) the European Union trade mark registration for the famous Bristol:
Rubik’s Cube was declared invalid. This marks the end of a 10 year 1 Redcliff Street
tussle over the registrability as a trade mark of the world’s best- Bristol BS1 6NP
selling toy of all time. United Kingdom
Tel: +44 117 925 3030
The trade mark in question is Seven issue. For the Rubik’s Cube shape mark,
Towns Ltd’s 3D trade mark (depicted this meant examining the rotational Fax: +44 117 925 3530
above) for “three dimensional puzzles”. capabilities of the puzzle by virtue of its
interior mechanics. Leamington Spa:
This was first registered as an EU trade
Nicholas Wilson House
mark on 1 April 1996. For this reason, the CJEU held that the
non-visible elements of the graphic Dormer Place
In 2006, a German toy manufacturer, representation of the 3D shape mark had Leamington Spa
Simba Toys GmbH & Co. KG, applied to to be considered. As they had a technical Warwickshire CV32 5AE
invalidate Seven Towns’ registration, on function, the trade mark was declared to
United Kingdom
the basis that the trade mark is a shape be invalid.
which is “necessary to obtain a technical Tel: +44 1926 310700
result”, i.e. that the internal rotating This decision highlights the interplay Fax: +44 1926 335519
capability of the cube is a functional between patent and trade mark law.
element that should not be protected by For functional elements, such as the
trade mark law. rotational capabilities of the Rubik’s Sheffield:
Cube, trade mark registration is not the Derwent House
An important principle that is applied appropriate means of protection; the 150 Arundel Gate
when assessing 3D shape trade marks is eternal monopoly granted by a trade
Sheffield S1 2FN
that registered trade marks should not mark registration is not appropriate
grant a monopoly for technical solutions. for technical solutions. Instead, patent United Kingdom
That is the preserve of patents. protection should be sought for technical Tel: +44 114 273 3400
aspects of a product. If registered trade
Fax: +44 114 275 5788
An earlier decision of the General Court mark protection were available for such
(GC) had upheld the validity of the Rubik’s technical aspects, this would be at odds
Cube mark. The GC had taken the view with the public policy of allowing technical Munich:
that inferring the existence of an internal solutions to become freely available to the Steinerstr. 15 / building
rotating mechanism from the graphical public after the expiry of any patent rights.
Gewerbegebiet Mittersendling
representations of that mark would not
have been appropriate, particularly due to The invalidation of the Rubik’s Cube EU 81369 Munich
a lack of sufficient certainty. In other words, trade mark registration could see its Germany
the graphical representations of the trade manufacturers face competition from Tel: +49 89 502224 020
mark did not provide a direct indication imitations. It will also act as a prompt
that the cube was capable of rotation due for owners of 3D shape marks to review
to its internal constituent parts. their trade mark portfolio to ensure that
their registrations are not vulnerable
With this in mind, the CJEU affirmed to invalidation due to their underlying
that “the essential characteristics of a functionality.
shape must be assessed in the light
of the technical function of the actual
To find out more
goods concerned”. Unlike the GC’s contact Mark Caddle
consideration that the assessment must mcaddle@withersrogers.com
be made objectively, the CJEU directed
the assessment to the actual goods atYou can also read
