IP Update/4th Quarter 2016
Additive manufacturing IP challenges in modern day manufacturing
Also in this issue
UK Government confirms plans to ratify the Unified Patent Court Agreement IP in research collaborations Progress made in combatting IP crime in the UK SIPO revises Chinese Patent Examination Regulations
Additive manufacturing IP challenges in modern day manufacturing 2
UK Government confirms plans to ratify the Unified Patent Court Agreement4
How will Brexit affect Geographical Indications? 5
How will Brexit affect Supplementary Protection Certificates?5
IP in research collaborations6
Warner-Lambert in pain in Singapore as well8
New Balance ordered to pay RMB5 million compensation for trade mark infringement9
The "promise doctrine" in Canada9
SIPO revises Chinese Patent Examination Regulations10
Progress made in combatting IP crime in the UK10
Product descriptions and document disclosure in English patent cases11
IP Update/4th Quarter 2016
challenges in modern
Additive manufacturing (also known as 3D printing) has been hitting the news for several years now, but with the speed of technological development only increasing, it is becoming inevitable that this new manufacturing technique is going to have a transformational effect on all kinds of manufacturing, and, consequently on IP protection.
Additive manufacturing techniques create products by incrementally adding material layer-by-layer. In addition to polymer products, metal objects (eg pump wheels and entire jet engines), medical and dental implants, pharmaceuticals/pills, entire concrete houses, ceramics, foodstuffs and even human cells and replacement blood vessels have all been created using this technique.
The IP challenges manufacturers are likely to be facing as a result are by no means limited to those manufacturers that use the technique themselves. In fact, parties that continue to operate without keeping the opportunities and challenges of additive manufacturing in mind are likely to be disadvantaged the most.
R&D-based industries will face the following challenges to their IP:
Products created using additive manufacturing techniques may not be covered by patents drafted with traditional manufacturing techniques in mind.
Thomas Prock email@example.com Marks & Clerk London (UK)
Additive manufacturing only requires a CAD file of the product to be manufactured and access to a suitable 3D printer, de-skilling manufacturing and creating the potential for a large number of new infringing parties to enter the market, in particular in scenarios (a) and (b) in Fig.1 and making policing and enforcement more difficult.
A dditive manufacturing may be less dependent on the availability of low labour costs than traditional manufacturing techniques, and so additive manufacturing can be undertaken in any location/ geography. IP right holders may wish to consider if their current IP filing strategies are fit for purpose, even in scenario (c) in Fig.1.
As 3D printers can be located close to the point-of-use or -sale of a product, the number of physical products crossing international borders may decrease. Instead, electronic files may be delivered via the internet, rendering border detention less effective.
E ncryption efforts to avoid analysis by rights holders of the content of electronic files delivered via the internet are already underway, making detection of potential infringement more difficult.
P roduct designs may be easily changed/tailored by manufacturers as well as by users. Traditional ways of securing design protection may need to be re-thought.
T he ubiquity of 3D scanners makes recreating CAD files of a product very easy. This may lead to a proliferation of copied products.
Current IP law is very much suited to dealing with direct infringement. In scenario (c) in Fig.1, a large number of
Sale of design files
IP Update/4th Quarter 2016
Customer with 3D printer
ReMarks 3 Product
Sale of design files
3D print shop
Transfer of design files
Own or contract print
Figure 1: The 3D printing supply chain Figure 1(a): Individual consumers print desired products at home on a privately owned printer Figure 1(b): Local print shops print products for individual consumers or companies Figure 1(c): Industrial printing centres print components/products for further assembly or sale
infringing products are manufactured, sold, imported etc by a single party. It is likely that patent law will continue to be a suitable means for stopping this kind of infringement.
In scenarios (a) and (b), the potentially high number of printers/parties manufacturing products will likely make it impractical to pursue a significant number of printers. If lessons learnt by the music industry in dealing with illegal downloads are anything to go by, this means pursuing the parties providing the printable files or internet service providers enabling the distribution of these files is likely to be a preferred option. European patent laws do provide for sanctions against indirect infringement in cases where a party provides an "essential element of the invention". Under UK patent law, however, it is necessary that the party providing the essential means knows (or if it is obvious to a reasonable person in the circumstances) that these essential means are suitable for and intended to put the invention into effect.
Traditionally drafted patent claims will likely be unsuitable for protecting against electronic trading of CAD files. Additional ways of extending patent protection to extend coverage to CAD files have been developed, although discussion of these different claim strategies goes beyond the scope of this particular article.
IP rights of manufacturers using traditional manufacturing techniques may also suffer inadvertently through claim drafting that does not take the opportunities provided by additive manufacturing (irrespective of whether or not the inventor himself or herself plans to use this new technique at all) into account.
Imagine, for example, a product comprising two interlinking components.
Traditionally, these components would be manufactured separately and then assembled in an interlinked fashion. Patent protection covering this product may reflect this sequence of manufacturing steps. However, if the interlinking components are 3D-printed simultaneously so that they interlink from the start, then a traditionally worded patent may well not cover the 3D-printed arrangement.
It is not only in the patents field that additive manufacturing is likely to challenge best practice in the IP industry. With CAD software making it easier to modify designs electronically, designers may wish to focus design registrations on those features of the product that are believed to make the product attractive to buyers but to omit those features that are deemed of lesser importance to the appearance of the product. In so doing, emphasis is placed on the product features that are less likely to be modified by a consumer trying to individualise a product prior to printing. In addition designers may wish to pursue multiple design registrations with varying levels of detail.
Whilst registered design rights are regrettably unlikely to be useful in stopping
the dissemination of CAD files for printing, unregistered UK design right does cover design documents and may as such provide a useful tool for stopping the dissemination of designs in electronic format.
Changing your business model to anticipate electronic files being sold for home-printing or infringement threats coming through this channel will also require thought about trade mark strategy. Trade marks may, for example, be registered to cover print files as well as custom manufacturing services and trade mark owners may wish to include their marks on products in ways that are picked up by 3D scanners, so that display of a rendered image of the printable file online automatically constitutes trade mark infringement.
It seems clear that the changes to the manufacturing industries have only just begun. Without inventors providing knowledge of a range of manufacturing techniques (including additive manufacturing) that may be used to create their product and there will likely be many as the use of this technique grows only IP Attorneys with a very good grasp of the possibilities it provides can assist in avoiding inadvertent gaps in protection.
Anybody can do it, whether creating a newly imagined or designed object, or replicating an existing one with a 3D scanner.
IP Update/4th Quarter 2016
confirms plans to ratify
the Unified Patent
In a welcome but, to many, surprising development, the UK Government has confirmed that it intends to ratify the Unified Patent Court Agreement.
Once the UK ratifies, Germany is expected to follow, and the new patents court will come into effect four months later, enabling for the first time European-wide patent validity and infringement disputes to be resolved in a single forum, and unitary patents covering much of the EU to be granted by the European Patent Office. The UK will be working to bring the Unified Patent Court (UPC) into operation "as soon as possible".
At the time of the UK's referendum on membership of the EU in June this year, the necessary ratifications were expected to be completed in the autumn of 2016
the EU for as long as it remains a member. On leaving the EU, the UK desire is for a deal with the EU that will "give British companies the maximum freedom to trade with and operate in the Single Market and let European businesses do the same in the UK." It therefore looks as if longer term strategic thinking has influenced the UK Government's position. Furthermore, it may well be possible for the UK to continue to participate in the UPC and unitary patent following the UK's departure from the EU. That will inevitably depend on the relationship between the UK and the EU that is negotiated over the coming years. There is, however, a warning in the
It finally looks like Europe will bring to fruition forty years of negotiations on a common patent court. Businesses, as well as practitioners, will need to start preparing for the new patents regime in earnest.
so that the court could open its doors at the beginning of 2017. The UK had already enacted domestic legislation in anticipation of the UPC and unitary patent and had taken out a lease on the proposed court premises in London. The vote for the UK to leave the EU (known as Brexit) brought everything to a standstill: if the UK was no longer going to be part of the EU, would it really contemplate ratifying an agreement whose very purpose was the creation of a court common to EU member states, and a court that is obliged to respect the primacy of EU law? The answer now appears to be, yes.
The UK Government confirmed that the UK intends to play a full and active role in
UK's formal announcement: the decision to ratify "should not be seen as preempting the UK's objectives or position in the forthcoming negotiations with the EU".
For now, the announcement is positive news for all the users of the patent system. It finally looks like Europe will bring to fruition forty years of negotiations on a common patent court. Businesses, as well as practitioners, will need to start preparing for the new patents regime in earnest.
In particular, patent owners will need to review their European patent portfolios and determine whether they want their patents to be opted out of the jurisdiction of the UPC, under the transitional provisions
that will apply for at least the first seven years of the Court's operation. Only the national courts will have jurisdiction over an opted-out European patent, and once a patent is opted out under those transitional provisions, the opt-out is assumed to last for the lifetime of the patent, unless it is formally withdrawn by the patentee.
Second, consideration will need to be given as to whether unitary effect should be requested for European patent applications that are granted after the UPC Agreement comes into effect. Applicants will need to carefully balance the potential advantages, such as the potential for pan-European injunctions, against the potential disadvantages, such as the fact that a unitary patent if found invalid will be revoked across all the states in which it had effect, rather than countryby-country as would be the case for a non-unitary, opted-out European patent validated in the same states. An important factor will be the cost of the renewal fees, which are intended to be equivalent to the cost of renewing in the four most popular countries in which European patents are validated. For the majority of European patents that are in practice only validated in two or three countries, a unitary patent will cost more, but the coverage will be much greater. But, for life sciences companies, for example, who often validate European patents widely, the unitary patent will provide a substantial cost saving.
Graham Burnett-Hall firstname.lastname@example.org Marks & Clerk London (UK)
IP Update/4th Quarter 2016
How will Brexit affect Geographical Indications?
The unique protection afforded to Geographical Indications (GIs) such as Welsh Lamb and Single Gloucester Cheese is currently provided under EU Regulation and takes effect in the UK without any national implementation. Agricultural products and foodstuffs from particular regions can be afforded the status of Protected Geographical Indications (PGIs) which are unitary rights and like EU trade marks will not in principle extend to the UK post-Brexit.
PGIs belong to a collective group of producers who are all entitled to apply the Geographical Indication to their products. The aim is to prevent producers whose goods do not originate from a particular area from applying the PGI and as such provide those with the right to use it with a competitive advantage. There is an expectation, for instance, that Scotch Whisky will be produced in Scotland and
will be of a particular quality. Protection of Scotch Whisky as a PGI and the ability to therefore regulate its use has ensured that this is the case and has allowed producers to benefit.
Producers have been concerned that a potential loss of rights in the UK as a result of Brexit could see an influx of damaging imports. However, whilst at this stage nothing is certain, negotiations towards a post-Brexit position will focus on preserving existing rights and putting in place transitional provisions to recognise existing PGIs in the UK or to allow their conversion into national rights.
As PGIs are currently available to countries outside of the EU, it is likely that UK producers will retain the right to hold EU-wide PGIs even after the UK's exit. In terms of national protection however, the UK's obligations under the TRIPS Agreement (Trade Related Aspects of Intellectual Property) will require it to
legislate for an equivalent PGI system, which will be crucial for UK producers and will provide the framework for recognition of rights in future trade arrangements.
The EU has been extremely supportive of geographical indications which has seen them feature heavily in its reciprocal trade deals. It seems likely therefore that the mutual recognition of EU and (future) UK rights will be a requirement for trade negotiations with the UK in the run up to and after Brexit. The UK therefore needs a framework in place for recognition of these rights and now is the time for producers and their representative associations to lobby the Government and make their views known.
Rebecca Tew email@example.com Marks & Clerk Birmingham (UK)
How will Brexit affect Supplementary
Protection Certificates (SPCs)?
Following Brexit, the EU regulations relating to SPCs will no longer automatically apply to the UK, and an alternative legal basis for an equivalent UK SPC system will therefore need to be put in place for obtaining SPC protection in the UK, and transitional legislation enacted to recognise existing SPC rights.
If the UK were to remain a European Economic Area (EEA) member, like Norway, due to EEA membership obligations the existing SPC regulations would most likely apply once more to the UK, with essentially no change for UK SPC holders and applicants. The UK courts would however no longer be bound to refer questions on points of SPC law to the EU court (CJEU), referring instead to the EFTA court. This change could in principle
give UK courts greater leeway in reaching decisions.
Were the UK to be outside the EEA, like Switzerland, it would not be bound by EU rules other than by agreement with the EU. Thus, the UK could enact new SPC legislation mirroring essentially the provisions of the EU SPC regulations (ie similar to the Swiss model), or re-enact the current EU legislation en masse as UK national law.
Alternatively, UK legislators may see Brexit as an opportunity to address perceived shortcomings in the current SPC regime. A modified UK SPC law more favourable to innovators could be drafted, for example allowing UK SPCs with a longer term, or extending their scope to include other subject matter such as medical devices. A further modification could see the term of
UK SPCs being calculated based on the date of the first marketing authorisation (MA) in UK, instead of the 1st MA in the EEA.
In any event, given the importance of the pharma industry to the UK economy, it is expected that provisions will be put in place to ensure that existing UK SPC rights are preserved and that SPC protection will continue to be available in the UK. We fully anticipate a smooth transition when Brexit occurs. In the meantime, applicants continue to be able to apply for SPCs in Europe, including in the UK, without any change in practice.
Angus Fairbairn firstname.lastname@example.org Marks & Clerk London (UK)
IP Update/4th Quarter 2016
IP in research collaborations
This is an updated version of an article first published as a chapter in The Innovation Handbook, endorsed by the UK IPO. The Innovation Handbook 3rd edition, published by Kogan Page 2013. Reproduced by permission of Kogan Page Ltd.
The purpose of research collaborations In a research collaboration, two or more parties cooperate in carrying out a research project, usually with a view to the technology generated by that project being used commercially. This way, the participants can pool resources and expertise and take advantage of intellectual property and facilities they may not necessarily own themselves.
Funding issues Many research collaborations qualify for funding available under UK or European schemes such as the European Horizon 20/20 Programme. Needless to say, given the recent political developments, UK applicants' eligibility for some EU grants may change. However, the EU grant regime is always evolving and the range of UK grants on offer changes with each government, so none of this is set in stone anyway.
Such grants are a useful option in the current economic climate in which funding from other sources is not as easy to obtain as in previous years. However, they should not just be viewed as "easy money" that can be obtained with little trouble and with no strings attached, because:
Applying for a grant can be a timeconsuming and complex process.
If the applicant does not meet the grantor's criteria, fills out the application form incorrectly or misses the deadline, it will all have been for nothing. Applicants should therefore verify that they qualify and that the grant meets their needs before beginning the application process.
T he grant offer will contain numerous conditions and noncompliance could mean further funding being refused and sums already paid being clawed back.
For example, use of the grant money will be restricted to the agreed project only and the parties will at the very least be required to use reasonable endeavours to exploit the project results; commercial exploitation may be restricted to a defined territory, at least for an initial period; the grant may require that collaborators be limited to parties from a list of defined countries; it may even require that the grantor has ownership rights over intellectual property generated or a right to royalties if revenue is generated by exploiting it; or, funding may have to be matched with equivalent contributions from other sources.
The terms of the grant therefore merit careful consideration. If complying with them is likely to make it too difficult for the parties to achieve what they want, other options should be considered.
Research collaboration agreement Most such grants require that the parties enter into a research collaboration agreement containing terms acceptable to the grantor. Even if this is not the case, or if no grant funding is being used, formalising the collaboration with a written agreement is obviously a good idea. If they have signed such a contract, it should be clear what each party's obligations are and what its rights and remedies are if any of the other parties fails to meet its obligations.
The agreement should deal with the following:
Exactly who the contracting parties are, including name, address and legal status;
T he scope of the project, deadlines and what each party's role will be;
E ach party being required to keep confidential any sensitive information disclosed to it by any of the other parties;
W hat existing or `background' intellectual property each party is applying to the project if a party needs a licence to use another party's background intellectual property in order to perform its own role under the collaboration, it should be clear that that licence is restricted to use under the project only;
H ow intellectual property generated will be owned and used;
W hether any party may use subcontractors if so, they should also be tied in by confidentiality and restrictions on use of intellectual property in the same way that the main collaborators are;
What will happen if any party drops out of the project, if a new one is admitted or if the requisite funding is no longer available;
W hat will happen if a party sells its business or undergoes a change of control for, example, if a party is acquired by a competitor, it needs to be considered whether it is still desirable to have it as part of the collaboration or not;
IP Update/4th Quarter 2016
What contractual breaches merit a party being expelled from the collaboration for example, failing to perform its role under the project in a timely or competent fashion, disclosing another party's confidential information, becoming insolvent or using another party's intellectual property beyond the scope permitted by the agreement.
The agreement will also have to be consistent with the terms of any grant offer letter and not contravene any applicable competition or anti-trust provisions. For example, collaborations in the European Union must comply with the European Commission's 2010 Block Exemption Regulation covering research and development agreements.
Negotiating a research collaboration agreement can be a lengthy process, particularly if it involves numerous parties with differing concerns and agendas who all have to sign off on it.
Ownership and use of foreground intellectual property
The purpose of a research collaboration is to generate intellectual property which can be used in the exploitation of useful and profitable products and processes. Consequently, how this resulting or `foreground' intellectual property will be used, who will exploit it and how any exploitation revenue will be shared out will be the most crucial issues to agree on. In deciding them, the parties should bear in mind the following:
Although the most acceptable solution may be for all the collaborators to own the foreground intellectual property jointly, joint ownership of intellectual property can give rise to problems.
If the co-owners have equal exploitation rights, they could end up competing with each other. Moreover, they will have to agree on how to share the responsibility of applying for and maintaining patent rights and defending those rights against infringement. In some jurisdictions a co-owner of intellectual property cannot grant licences to it or take action against infringers without the cooperation of the other co-owner(s).
An easier solution may be for each party to own the intellectual property it generated under the project or in a defined field.
So, for example, if a drug company and a drug delivery device company collaborate, the drug company could own improvements to the drug and the device company could own improvements to the device.
A company may need access to another party's foreground and background intellectual property in order to exploit its own, meaning an appropriate royalty would have to be negotiated.
T he parties should carry out freedom-to-operate searches in order to confirm that background intellectual property can be applied to the project envisaged and to any future commercialisation.
If it cannot, the efficacy of the foreground intellectual property could be drastically undermined.
If the foreground intellectual property has been generated by an academic party and is to be exploited by a commercial one, the academic party may also want the right to publish the project results.
In such circumstances the commercial party will want to ensure that no confidential information is included in the publication and that, if necessary, publication is delayed until patent applications have been filed.
Parties need to be realistic with their expectations of the financial return from the collaboration. Commercialisation may be a long way off and, when it comes, the revenue may not be as significant as had been hoped. Even if the technology is successful, if it ends up being just one facet of a bundled product or process, any royalty due may have to be split between a number of licensors and the collaborators' share could be eroded significantly as a result.
Some practical considerations Any given research collaboration may fail for scientific or technical reasons, the intellectual property generated may be blocked by existing rights or commercialisation may ultimately fail due to market considerations.
However, failure can also result from personal or organisational factors. This risk can be limited by bearing in mind the following:
If setting up the project is fraught with difficulty because another party
is obstructive or acts in bad faith, or because there are significant personality clashes, matters are unlikely to improve once the project is under way. In such circumstances serious thought should be given to whether or not to enter into the collaboration. T o achieve what it wants from the collaboration more easily, each party should secure a champion in each of the other parties, but there need to be contingency plans in place should any such champion leave. It is advisable to set up a project steering committee to oversee conduct of the project. As well as making project management more efficient, this makes it easier to identify and address any problems early on, rather than leaving them to fester until they develop into insurmountable obstacles or full-blown disputes. This summary gives general pointers and is not specific to any particular technology, grant funding scheme or commercial arena. However, it illustrates that anyone considering a research collaboration is well-advised to conduct extensive due diligence in these areas and in connection with their prospective collaborators.
Simon Portman email@example.com Marks & Clerk Cambridge (UK)
IP Update/4th Quarter 2016
Warner-Lambert in pain in Singapore as well
In the recent case of Warner-Lambert Company v Novartis (Singapore)  SGHC 106, the Singapore High Court had to determine whether WarnerLambert should be granted leave to amend its patent to recast method of treatment claims to Swiss-style claims in infringement proceedings brought against Novartis.
This was Singapore's first decision relating to Swiss-style second medical use claims (Swiss-style claims) and it was unfortunate that that Court did not have to determine the scope of such claims or whether Swiss-style claims are allowable in Singapore. However, the decision clarified two aspects of Singapore practice: (i) whether recasting method of treatment claims into Swiss-style claims constituted added matter; and (ii) whether such recasting post-grant extends the scope of the protection of the patent.
(i) Added subject matter A typical formulation of a method of treatment is:
"A method for treating Y comprising administering compound X"
while a Swiss-style claim is:
"Use of compound X in the manufacture of a medicament for treating Y"
On the first aspect, the Court concluded that the recasting did not result in added matter since both types of claims implicitly required a step of manufacturing a medicament, which must exist in a method of treatment. Therefore, a medicament is clearly and unambiguously disclosed in an application with method of treatment claims.
(ii) Extension of scope of protection Turning to the second aspect, the Court considered a Swiss-style claim to be a process claim and determined which
acts would constitute infringement of the granted method of treatment claims and the proposed recast Swiss-style claims. In particular, the recast claims covered the making of the compound for administration purposes while the granted claim covered only the follow-on act of administration of the compound. Since Warner-Lambert's patent had only claimed the administration of the compound for treating pain, and not the preceding manufacturing process that produced the compound for that use, the proposed amendments were considered an extension of the scope of protection conferred by the patent. The Court further concluded that administration of a compound in a treatment did not cover use of the compound in the manufacture of a medicament. The proposed amendments were therefore disallowed.
Unreasonable delay The Court further considered if there was unreasonable delay by WarnerLambert in applying for the amendments. The Court followed the strict approach adopted in an earlier High Court decision and based on the facts, concluded that there was an undue delay in requesting the amendments since Warner-Lambert had been put on sufficient notice to the possible defects in its patent and that it should not have waited until a challenge was made before requesting the amendments. Thus, the request to amend the patent also failed on this ground.
Singapore's pre-2014 "selfassessment" system
In summary, the Court decided that such change of category would not amount to added matter but would extend the scope of protection conferred by the patent. Thus, recasting method of treatment claims into Swiss-style claims post-grant would not be possible and this could create a "catch-22" situation for possibly many pharmaceutical patents.
To elaborate, Warner-Lambert's patent was granted in 2000 under Singapore's "self-assessment" patent system where the onus lay on the patentee to make informed and considered decisions, and ensure that the patent complied with the patentability requirements before proceeding to grant. Despite this obligation, Warner-Lambert obtained a patent that claimed methods of treatment, which are excluded from patentability in Singapore. It is plausible that there could be other Singapore patents granted under the "self-assessment" system that include method of treatment claims. Since such claims are not allowable in Singapore and this decision affirms that it is not possible to recast them as Swiss-style claims postgrant, such patents are effectively invalid. This is especially so for a patent that only has method of treatment claims. However, if the patent also includes other claims that are patentable (for example also includes Swiss-style claims), the patent may be considered to be partially valid.
Section 70(1) of the Singapore Patents Act (SPA) provides the Court with discretion to grant relief in respect of that part of the patent which is found to be valid and infringed. However, Section 70(2) of the SPA clarifies that the Court shall not grant any monetary relief in respect of that part found to be valid and infringed unless the patentee proves that the specification for the patent was framed in good faith and with reasonable skill and knowledge.
Therefore, if it can be shown that a patentee had knowledge that the method of treatment claims are not allowable in Singapore, but the patentee still proceeded to request grant without deleting such claims pre-grant, thereby obtaining a patent comprising such claims (together with Swiss-style claims), it may be difficult for the patentee to argue that the patent was "framed in good faith". The
IP Update/4th Quarter 2016
Court may then exercise its discretion under Section 70(1) against the patentee. As of 14 February 2014, Singapore's patent system changed to a "positive" grant system. Therefore, patents granted under the current system would not have the said issues since the Singapore examiner would formally object to the presence of method of treatment claims in an application and require deletion of these claims pre-grant. However, applicants should still exercise care in choosing an appropriate examination option when prosecuting an application which relates to medical use/methods of treatment, and applicants should seek the advice of a qualified Singapore Patent Attorney with expertise in this field to ensure their rights are adequately protected.
Upasana Patel firstname.lastname@example.org Marks & Clerk Singapore
New Balance ordered to pay RMB5 million compensation for trade mark infringement
On 16 June 2016, the High Court of Guangdong Province, China found Xinbailun Trade (China) Co., the local subsidiary of New Balance (the well-known athletic footwear brand owner), liable for infringement of the trade mark rights of local shoe maker, Zhou Lelun, who owned the registered trade mark XIN BAI LUN in Chinese characters.
New Balance had been using the same Chinese name as the transliteration of "New Balance", but crucially had failed to register it. At first instance, New Balance was ordered to pay RMB 98 million to Zhou. This sum was reduced to RMB 5 million on appeal.
This level of compensation was imposed to take account of profit generated by New Balance during its misuse of the Chinese mark, the scale and duration of the misuse, and, in particular, the bad faith demonstrated by New Balance, which was aware of the third party rights as it has unsuccessfully opposed Zhou's trade mark application in 2011, but continued use of the mark anyway. By contrast, Zhou's trade mark rights could be traced back to
1996, while use by New Balance started no earlier than 2003, so New Balance could not convincingly portray Zhou as a trade mark squatter.
Despite the significant reduction, the lesser sum levied by the second instance court remains substantial and should serve as a cautionary tale for all trade mark users in China. It is important to recognise the importance of registering Chinese equivalents of English word marks, which local consumers prefer as the means to identify the source of goods or services. There are usually different options available to foreign rights holders when translating or transliterating their word marks into Chinese and New Balance might have been able to avoid this particular dispute had it chosen an appropriate alternative after its unsuccessful attempt to oppose Zhou's application.
Fangjin Zhu email@example.com Marks & Clerk Beijing (China)
The "promise doctrine" in Canada
The Supreme Court of Canada recently heard oral arguments in an important appeal which asks whether the "promise of the patent" utility doctrine properly exists.
At issue in AstraZeneca Canada v Apotex is a patent pertaining to esomeprazole, a compound used in reducing gastric acid. As of the filing date, the patentee, Astra Zeneca had performed internal studies, but the drug had not yet been clinically proven in humans. The drug became commercially successful. Nevertheless, the patent was held to be invalid on the basis that the patentee had not shown improved therapy in patients at the filing date, which was found to be promised in a statement on page 1 of the patent.
In oral arguments, counsel for AstraZeneca focused on claim construction. In Canada, claims are construed purposively to
determine the meaning of words in a claim and identify essential elements of the claim. Counsel for AstraZeneca argued that if a claim recites a specific use, and the use is found to be an essential element, then that use must be delivered; however, if a use is not recited, then it is not an essential element and the claim merely needs to have some utility.
Counsel for Apotex argued that statements that AstraZeneca made in the patent about the problem solved cannot be ignored. The Chief Justice asked, "So if that statement is, let's say, a bit extravagant, but the patent is nonetheless very useful it cures the disease or provides relief that extravagant statement will mean that this useful, novel, and in other respects totally compliant with the Patent Act patent fails, because of that one overstatement?" Counsel for Apotex answered that it
depends, and that the invention in this matter included a promise that had to be met for the patent to be valid.
The Supreme Court appeared to be concerned that the promise doctrine was unworkable and severe. A decision is expected within six months. In the meantime, applicants may consider reviewing their applications for any statements that may be interpreted as a promise of utility, with a view to soften such statements by amendment.
Jean-Charles Grgoire firstname.lastname@example.org Marks & Clerk Ottawa (Canada)
IP Update/4th Quarter 2016
SIPO revises Chinese Patent Examination Regulations
The Chinese State Intellectual Property Office (SIPO) is undertaking a comment period for the current, newly-released revisions to the Chinese Patent Examination Regulations.
Some major proposed changes include the amendment of patentable subject matter rules to specifically allow business methods that include a technical feature, some loosening of the language used to describe the combinations of computer hardware and software that are deemed patentable, and an express allowance of post-filing (supplementary) data when
the data is for a technical effect that the person skilled in the art can see in the patent application.
The full text of the proposed changes is available on the website of the Office of the State Council in Chinese and an English translation is also available courtesy of IP-Key, via the European Chamber of Commerce in China.
Generally, foreign and domestic applicants should view these proposed changes as positive steps towards enhancing innovation and protecting IP rights in China. While the changes related to business methods and computer software/ hardware inventions are clearly intended to help the local hi-tech industry, foreign applicants should also take advantage of these changes once they become effective. In fact, it may soon be the case that computer-related inventions and business methods may be more easily
granted in China than in either the USA or Europe.
The amendment to the post-filing data rules will also be welcomed by foreign applicants, as it foreshadows a more lenient standard than that currently existing in the Chinese practice. This should be a boon for foreign applicants, especially those in the chemical and life science fields. Accordingly, we hope that applicants that have not been able to put supplemental data in front of the SIPO examiners before will likely find it a little less frustrating in the future.
Michael Lin email@example.com Marks & Clerk Hong Kong (China)
Progress made in combatting IP crime in the UK
According to the US Chamber of Commerce, the UK is now the highest ranked country for IP enforcement, a clear reflection of the continued hard-work and commitment by enforcement agencies in tackling IP crime.
This finding is published in the UK Intellectual Property Office and IP Crime Group's latest annual IP Crime Report 2015-2016, available on the UK IPO's website. The report sets out the work conducted, as well as the various successes achieved, in combatting IP crime over the past 12 months.
The problem of IP crime globally remains considerable. Recent statistics estimate that counterfeit products in the EU amount to up to five per cent of all EU imports, worth up to 85 million. Counterfeit goods are said to cost the automotive industry in particular around 28 billion a year, resulting in a loss of 2.5 million jobs globally. Money laundering, benefit fraud and organised crime are the top three criminal activities linked to IP crime.
The report shows that China and Hong Kong continue to be particular `hot spot' areas, as the majority of infringing goods
seized at the UK border originate from these countries. Survey results from Trading Standards Offices indicate that cigarettes/tobacco remain the most investigated products, with clothing and alcohol making up the top three. Whilst ordinary shops remain the most investigated location, social media, websites and auction sites all feature highly.
Indeed, developments in technology have meant that social media and online platforms are increasingly used as vehicles for intellectual property infringement. Accordingly, IP enforcement agencies have had to react and adapt strategies to deal with the growth in counterfeit goods sold, and pirated material shared, online and via social media; various successes of these enforcement teams are reflected in the report. For example:
Almost 4,000 domain names were suspended by Nominet for criminal activity.
Over the past three years, the Police IP Crime Unit (PIPCU) has suspended over 10,000 websites selling counterfeit goods and has arrested 69 individuals.
84 per cent of online market place takedowns reported by Trademark and Rights Holders Against Piracy (TRAP) relate to Amazon or eBay listings.
Overall, the report reinforces the importance of interconnectivity close contact and collaboration between brand owners and enforcement groups, as well as between partner organisations, both in the UK and internationally. The figures and studies demonstrate that close collaboration between these groups is largely to thank for the successes achieved to date in combatting IP crime.
Whilst the UK may have voted to leave the EU back in June 2016, it seems clear from the Report that the UK will look to continue to work closely with its EU counterparts in order to tackle the threats posed by IP crime.
Amy Wood firstname.lastname@example.org Marks & Clerk Birmingham (UK)
IP Update/4th Quarter 2016
Product descriptions and document disclosure
As in other Common Law jurisdictions, one of the distinguishing characteristics of litigation in England and Wales as compared to its Civil Law (or "continental") counterparts is the availability of document disclosure. Referred to as "document discovery" in US procedure, this is the requirement on one party to litigation to provide to the other the documents and materials in its possession that are (or may be) relevant to the case.
So, a party to English proceedings can gain access to relevant documents of its opponent in a manner unavailable to parties to litigation in continental (Civil Law) European countries. The downside, however, is the cost and time for each party to search for and review potentially relevant documents for disclosure. With the increase in the capacity of document storage technologies and the sheer volume of electronic documents generated and retained on a daily basis in modern commercial life, this task becomes ever more challenging. And costly.
English patent litigation procedure has long been ahead of the rules governing other (non-patent) English litigation in tackling the burden of disclosure while seeking to preserve its advantages. An alleged infringer, for example, can avoid altogether the need to disclose documents relating to the allegedly infringing product or process. To do so, they can instead opt to provide a description of the product or process in sufficient detail to enable the court to determine the issue of infringement. This Product / Process Description (PPD) is signed by someone having knowledge of the matters it describes and who can, if necessary, be cross-examined in court on any points of contention or doubt.
The use of PPDs makes English procedure (and the UK as a forum for patent litigation) attractive from the point of view of proving infringement. A case can be started on a good faith belief in infringement inferred or evident from publicly available information. This avoids the need to engage in uncertain pre-action seizures or costly testing or reverse engineering. Provision of the PPD then provides clarity as to the factual position, leaving legal arguments for and against infringement to proceed on a sound footing.
English patent litigation procedure also limits disclosure on the validity side. For example, no disclosure is required of
documents relevant to validity that fall outside a four-year window: two years either side of the contested patent's priority date.
But even the requirement for validity disclosure falling within a four-year period often still involves an onerous search and review task for patentees. And in many cases documents produced often yield only minimal, if any, assistance to the Court for resolution of the validity dispute. However, case management decisions in two recent High Court patent cases interpreting some 2013 changes to the Civil Procedure Rules have improved the situation significantly by deciding that whilst disclosure should be available as regards validity in appropriate cases, it is not an automatic right: it must be justified in terms of cost and probative value.
The first case was Positec Power Tools (Europe) and others v Husqvarna  EWHC 1061 (Pat), decided in May this year. The issue to be decided was what disclosure was required by a patentee where the obviousness of its patent was in issue. Importantly the case was heard by Mr Justice Birss, whose attitude to case management is strongly influenced by his time in the procedurally streamlined Intellectual Property Enterprise Court or IPEC (the UK's IP jurisdiction for technically straightforward and lower value cases). IPEC has a very pragmatic attitude to disclosure, giving the judge broad discretion as to how much, if any, disclosure is appropriate. Positec makes it clear that this approach is now also appropriate in the main court for patent disputes, being the High Court (Patents Court). Birss J confirmed that the Court will readily consider ordering disclosure on an issue-by-issue approach on validity rather than defaulting to an all-embracing "standard" disclosure order for validity. And, where requested, it is clear that the Court will scrutinise very carefully the need for disclosure on this issue-by-issue basis.
Birss J ruled that for disclosure to be appropriate it must be justified by weighing up the likely probative value of documents disclosed against the cost and time involved in providing the relevant disclosure. In a case involving a straightforward claim of obviousness (as in Positec) it is unlikely that disclosure on this issue would add much: what was actually done by the inventor is of much less interest than what the notional skilled
addressee of the patent would have done, which is a matter for expert evidence. There are circumstances where this could be different, however: disclosure may well be appropriate if the patentee itself is relying on the commercial success of the alleged invention or the reactions of others to it to support a case of inventive step. Similarly, if the inventor is to be called as a witness or other internal documents are to be relied upon, then disclosure of all documents relevant to the issue will be appropriate. This would provide context and avoids cherry-picking by the patentee. The key in all disclosure applications, is that provision of disclosure is within the judge's discretion based on the balance of probative value and cost.
The second recent case of interest in this area is Illumina and others v Premaitha Health  EWHC 1516 (Pat). In a case management hearing in that case, the alleged infringer sought disclosure from the patentee on the issue of sufficiency. The judge, Carr J, followed the decision in Positec and reiterated the principles set out by Birss J. The request was denied on the basis that disclosure would be very costly and the fruits of disclosure would not add much to the case. Again, it was made clear that if (but only if) justified, disclosure is available: for example, if the patentee advanced a defence to a claim of insufficiency that the inventor had no difficulty in practising the invention, then disclosure would be appropriate. However, that defence was not advanced in Illumina and so the request for disclosure was denied.
The Court's approach to disclosure to validity issues represented by these cases, combined with the availability of PPDs highlights the attractiveness of the UK as a forum for litigation in patent cases. The flexibility of the judges' approach means that unnecessary costly validity disclosure is eradicated, while remaining available when the issues and the interests of justice demand. The requirement on defendants to provide PPDs / infringement disclosure remains. This is welcome news both for those bringing and those defending patent proceedings.
Dafydd Bevan email@example.com Marks & Clerk London (UK)
ReMarks is a newsletter produced by Marks & Clerk. Articles featured are intended to provide a summary of the subject matter only. Readers should not act on any information without first obtaining specialist professional advice.
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