PAGE 14 PAGE 12 AIPPI · Dunkin’ Donuts University and a Master’s in Burgerology – also...

Amock US jury yesterdaydelivered a split verdict inthe simulated trial between

Pancakes Inc and Boston-basedAmerican Foods, which consideredwhether defendant AmericanFoods’ PuddleBurgers infringedplaintiff Pancakes Inc’s patentedPuddleCakes.

The case was presided over bythe Honourable Mark Wolf of theUS District Court for the District ofMassachusetts, who instructed theinternational audience in US courtproceedings before the trial com-

menced. Robert Krupka of Kirkland& Ellis represented Pancakes, whileKenneth Adamo of Jones Day actedfor American Foods.

A jury of nine lay people, selectedfrom the administrative staff at Fish& Richardson and Foley Hoag,decided the case, and two expert wit-nesses – Pamela Banner, a graduateof Le Cordon Bleu culinary acade-my in Paris, and Elaine HerrmannBlais, who holds a PhD fromDunkin’ Donuts University and aMaster’s in Burgerology – alsoweighed in.

The suit was brought byPancakes founder, Frank“Flapjack” Huddle, who inventedPuddle-Cakes in 2004 in order toboost sales at his 24-hour pancakehouse. The patented pancakes fea-tured a hole in the centre for fillingwith syrup, butter or other desiredtoppings, which Krupka arguedmarked the first innovation onpancakes in 3,000 years.

Soon after Huddle applied to theUSPTO to patent the unique break-fast food, he discovered that Duke

Lawyers before the USCourt of Appeals for theFederal Circuit lack a

good understanding of appellateadvocacy, according to ChiefJudge Paul Michel. “There are asubstantial number of performanc-es that colleagues on the court finddisappointing, even in cases thatare not trivial or tiny,” said Michel,who today takes part in a specialjudges’ panel at 2:00pm featuringleading judges from Canada,Germany, India, China, the UK,Japan and the US.

“Today, the brief is drafted by acommittee of younger lawyers, butthe lawyer who’s going to actuallyargue the case doesn’t get involveduntil it’s very late in the processwhen it’s too late to throw it away,so they just polish it up,” saidMichel in an exclusive interviewfor the AIPPI Congress News. Healso discussed recent SupremeCourt patent decisions, the pend-ing Bilski case and the compositionof the court. ■Chief Judge Michel profile,page 14

Chief judge calls forimproved advocacy

Patentedpancakespartiallyupheld

Problems with patent pen-dency worldwide are nowso serious that “we’ve

moved to the end of the era when‘oh dear’ is an adequate response,”said EPO head Alison Brimelowyesterday at a special AIPPICongress session.

Brimelow, who was joined byUSPTO director Jon W Dudas andJPO commissioner Takashi Suzuki,spoke about the great increase in thenumber of patent applications, thelong pendency and the uncertaintythat this creates. She said that one of

the main problems at the moment isthat the three patent offices are “tak-ing in each other’s washing”. Sheadded that eliminating this duplica-tion and developing joint initiativessuch as a common document data-base and a unified classification sys-tem could improve the system.

Suzuki spoke of the need to cre-ate a “virtual global patent office”by promoting work sharing andpatent harmonisation. He alsoemphasised the need to “establishinfrastructure that will keep pacewith open innovation”. Dudas

praised the JPO for its efforts todevelop patent prosecution high-ways to enhance cooperationbetween patent offices and reduceapplication pendency. Heexplained that the USPTO hasspeeded up its patent processingtime and increased the percentageof patents that are rejected. Hespoke of the need to press aheadwith the cooperation initiativesthat are “no-brainers” and told theaudience that, for progress to bemade “your cooperation and inputare essential”. ■

Action urged to reform patent system

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41 ST WORLD IP CONGRESS, BOSTON, TUESDAY 9 SEPTEMBER 2008

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The Blue Wing of the Museum of Science, where participants atlast night’s cultural evening were treated to fine wines and a rangeof dishes – from Szechuan beef to jumbo asparagus – before takingin lasershows and cinema adventures.

Continued on page 2

Asession on trademark ethics yester-day showed

lawyers how to be “a practi-cal and zealous advocate ofyour clients’ interests” with-out falling into the trap ofbeing overly angelic orbreaking rules, according tomoderator CatherineMennenga, in-house coun-sel with General Electric inFairfield.

The session looked atthe difficult ethical situa-tions that lawyers encounter

from a US and Canadianperspective. As a case study,the speakers used whatPeter Harvey, name partnerof Harvey Siskind in SanFrancisco, described as “areal humdinger of a case”involving a Canadian com-pany that wanted to use themark Sunrise Club for eld-erly care facilities in the US.To get the mark from a USrival, the company used aninvestigator who bought itwhile pretending that hewanted to use the mark to

sell a new kind of sandwich.The sale agreement waslater rescinded and the mes-sage from the case, accord-ing to Harvey, is: “Giveclear instructions to investi-gators.”

Speakers at the sessionalso discussed whether it isacceptable for a lawyer to lieabout their identity or qual-ifications to obtain informa-tion, the confidentiality ofevidence obtained in dis-covery and what work para-legals can and cannot do. ■

How to be an ethical lawyer

Manley, CEO of American Foods, had begunselling frozen hamburger patties featuring ahole for containing condiments, an idea thatManley admitted coming up with after havingeaten PuddleCakes one morning. WhenPancakes was granted US patent 7,000,07X forPuddleCakes in 2005, the company filed suitagainst American Foods, claiming patentinfringement by PuddleBurgers, whose patentapplication was still pending.

The case turned on the language of the twoclaims allegedly being infringed, which speci-fied several disputed terms. Pancakes said thatPuddleBurgers constituted “prepared fooditems”, a term covered by claim one of the 07Xpatent, but the defence argued that the frozenpatties could not be considered prepared food,as they required further preparation before eat-ing. American Foods also produced multipleexamples of prior art, such as danishes anddonuts, which it argued proved thePuddleCakes patent invalid.

The jury, which held its deliberations pub-licly, disagreed with the defence and held thatClaim 1 had been infringed and was valid, sinceeven in frozen form, the patties did requiresome element of preparation, and thus consti-tuted a prepared food item.

But on Claim 2, the jury found that the term“reservoir” did not apply to the PuddleBurgersproduct, since the holes used in the frozen pat-ties were cut straight through and thereforecould not “retain an amorphous topping” asspecified in the claim. It also said that the lan-guage of Claim 2 sounded too similar to thedescription of a traditional danish, and deemedit invalid on the grounds of obviousness.

Departing from accepted procedure, JudgeWolf commended the jury on its decision andsaid that he would have come to the same con-clusion had it been up to him.

Attendees can see the same case tried todayin Chinese (8:30 – 10am), English (11 –13:00pm) and Japanese (4 – 6pm) mockcourts. ■

Delegates have over-whelmingly supported aResolution on public

health that provides for an experi-mental use exception, a broaderversion of the US Bolar exceptionand compulsory licensing “inexceptional and strictly definedcircumstances”.

The paragraph on compulsorylicensing proved one of the mostcontroversial aspects of theResolution, with the US delega-tion initially proposing that it bedeleted on the grounds that “itwould put AIPPI on record as sup-porting compulsory licensing” andcould be interpreted as “applyingto all products”.

However, yesterday delegatesagreed on a revised wording stat-ing: “Concerning public health:(a) the patent law should provide

that a compulsory licence can onlybe granted in exceptional andstrictly defined circumstances; (b)the law should not permit expro-priation of patent rights.”

The delegates also approved aparagraph saying that Article31bis of the TRIPs Agreement(which implements the DohaDecision on compulsory licens-ing) “should be promptly ratifiedby WTO Members that have notyet done so”.

The paragraph on experimen-tal use says that patentlaws should allow exper-iments “irrespective ofwhether the ultimateaim of the experimentsmay be commercial”.Working committeechair Sarah Mathesonsaid that, while broad,

this was the most practical word-ing: “In the modern world, few ifany experiments are pure intellec-tual curiosity.”

The Resolution said thatpatent laws should provide anexception “for acts necessary forthe purpose of obtaining regula-tory approval” for medicines andother specified medical prod-ucts. It also confirmed previousAIPPI resolutions rejectinginternational exhaustion inpatent law.

Harmonising trademark damages Delegates also yesterday agreed aResolution on how damages areassessed in trade mark infringe-ment, counterfeiting and piracycases.

Question 203 resolved thatdamages for trade mark violationsshould allow the trade markowner to recover and remedy allinjury caused and deter future vio-lation. It said: “The evaluation ofdamages for trademark violations

should be assessed pri-marily on the basis ofobjective economicconsiderations.”

The Resolution setout the principles onwhich damages shouldbe awarded. The dam-ages awarded should

remedy the injury suffered by thetrade mark holder and providedeterrence against future viola-tions. The Resolution also allowsfor the possibility for enhanceddamages and statutory damagesin cases of “grossly negligent orbad faith violations” and “especially serious types ofinfringement”.

Paragraph 4 of the Resolutionset out the types of evidence thatshould be used to determine dam-ages awards, as well as the evi-dence of financial gains related tothe infringer and, if a royalty calcu-lation is used, reasonable royaltiesin analogous situations. TheResolution also set out thatinfringers should be obliged toprovide the relevant evidence,subject to confidentiality protec-tions.

Once formally approved onWednesday, the full Resolutionswill be available on the AIPPIwebsite. ■

News

2 AIPPI CONGRESS NEWS Tuesday 9 September 2008

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Te stalled US patent reform propos-als were highlighted at a workshopon post-grant oppositions yesterday

morning. “I was hoping to be able to talk toyou about the new opposition system.Unfortunately that fell through,” said DonnaMeuth, of counsel at WilmerHale in Boston.

Meuth compared the advantages and disad-vantages of interferences and inter partes and exparte patent reexamination in the US. TheUSPTO introduced the inter partes system in2003 but it has not been popular with practi-tioners. Session moderator Timothy King ofEntegris stated that, though his company wasone of 21 that requested an inter partes reexam-ination in 2003, the case was still pending.

In the most recent draft bills, both theHouse and Senate set up a first 12-month win-dow post-issuance in which to review patents,but differed over having a second window.However, no legislation has been passed.

“There is always next year, but we have beensaying that since 2003,” said Meuth.

Yasuhiko Murayama, vice president ofShiga International Patent Office from Japan,and Samson Yu, managing partner of KangxinPartners in China, explained how in theircountries invalidation requests are often usedby the defence during patent litigation. GavinRecchia, partner of Davies Collison Cave inAustralia, described Australia’s pre-grantopposition system and Mathias Ricker ofWallinger Ricker Schlotter Foerstl explainedhow patent oppositions work in the EPO. ■

A guide to post-grant oppositions

Q202 The impact of public health Passed issues on exclusive patent rights 102-10

Q203 Damages for infringement, Passedcounterfeiting and piracy of trademarks

Yesterday’s Resolutions

Resolution backs limited compulsory licensing

Continued from page 1

Multinational companies hopingthat Hong Kong InternationalArbitration Centre (HKIAC)

recognition of well-known trade marks holdssome sway in mainland China are in for arude awakening.

That was the blunt assertion fromHylands partner Lian Yunze at yesterday’sworkshop on domain names. “HKIACrecognition is good, but it has no bindingeffect on the Chinese Trade Mark Office.You would have to file another anotherapplication with the CTMO.”

Well-known trade marks benefit fromsome protection against cybersquatters, but

Lian used his presentation to encouragemultinationals with designs on China to reg-ister Chinese domain names. “Chinese con-sumers can then see that you want to dobusiness in China,” he said.

The number of registrations in the .cndomain has increased dramatically in recentyears, with 2.59 million at the end of 2005jumping to 12.18 million as of July 22 thisyear. “If you want to be successful in a dis-pute in China, you must have your trademark registered in China,” said Lian.

Combatting cybersquatters, particularlyin a new era of expanded generic top-leveldomains (gTLDs), was a central theme of

discussion at yesterday’s workshop, whichenjoyed a high attendance.

“There’s a lot of money at stake incybersquatting,” said Mark Partridge, apartner at Chicago firm PattishallMcAuliffe Newbury Hilliard & GeraldsonLLP. And even large companies such as

Microsoft have fallen victim to the squat-ters. Under US cybersquatting legislation,victims of squatters can obtain a statutoryclaim for $100,000 per domain name. “Soif you think you can bring action in the

US,” said Partridge, “you might find thatour laws are pretty strong.”

The question of jurisdiction in domainname disputes is complex, particularlyregarding issues such as morality and badfaith. The workshop panel was asked forICANN’s position on this contentious

area and while it wasacknowledged that nothingwas set in stone when itcomes to ICANN’s new dis-pute resolution process,Torsten Bettinger ofBettinger SchneiderSchramm did have a sugges-

tion. “Although I do not think that issuessuch as morality and bad faith are ques-tions of jurisdiction, one idea would be tohave a panel of representatives from thedifferent jurisdictions.” ■

AUS judge has found thatthe author of The HarryPotter Lexicon and its

publisher, RDR books, infringedHarry Potter author JK Rowling’scopyrighted works.

Judge Robert Patterson of theUS District Court for the SouthernDistrict of New York said yesterdaythat Lexicon author Steven VanderArk’s reference guide to the HarryPotter novels – a companion publi-cation to the Harry Potter Lexicon

website – “appropriates too muchof Rowling’s creative work” andissued a permanent injunctionagainst the publication.

Vander Ark had argued that thebook was protected under the doc-trine of fair use, which allows for theunauthorized use of a copyrightedwork “for purposes such as criti-cism, comment, news reporting,teaching, scholarship or research”.

Judge Roberts found that theLexicon contained “a troubling

amount of direct quotation or closeparaphrasing of Rowling’s originallanguage” and ordered Vander Arkand RDR Books to pay a total of$6,750 in statutory damages, theminimum award under the statute.

In a statement, RDR Books said:“We are encouraged by the fact theCourt recognized that as a generalmatter authors do not have theright to stop the publication of ref-erence guides and companionbooks about literary works. As for

the Lexicon, we are obviously dis-appointed with the result, and RDRis considering all of its options.”

In India, the Delhi High Courtalso heard a Harry Potter case thismonth. Warner Bros took action toprevent the release of the film HariPuttar – a Comedy of Terrors, whichwas created by Mumbai film studioMirchi Movies. Warner Bros is argu-ing that this title is confusingly simi-

lar to the trade mark Harry Potter,while the makers of the film are argu-ing that the word Puttar means sonin Punjabi, Hari is a common nameand that the plot of the film bears noresemblance to a Harry Potter film.

Workshop VII today deals withonline trade mark and copyrightissues and workshop XIII looks atcopyright damages around theworld. ■

News

AIPPI CONGRESS NEWS Tuesday 9 September 2008 3

JK Rowling wins US copyright suit

Beat the cybersquatters

“If you think you can bring action in the US, you might find that our laws are pretty strong”

Once you have gone through the process of patent-ing an invention in a series of different markets,you could be forgiven for thinking that’s it: job

done, invention protected. But what happens if someonestarts manufacturing a device that is only part of your inven-tion, omitting a final element that a buyer can easily purchaseelsewhere to complete the product? Do you have to sue everybuyer? Fortunately not, as this is where the doctrine of con-tributory infringement can help not just patent owners, butall IP owners placed in a similar situation.

Unfortunately, contributory infringement “is not an easytopic”, according to AIPPI reporter general Jochen Bühling.Countries differ over how the term should be defined andwhether the conditions for finding infringement should be dif-ferent for patents, trade marks and copyright. Other aspects ofcontributory infringement that need to be debated are, as glob-alisation increases, how the doctrine can be enforced acrossborders. What happens if a supplier, in a country where aninvention is patented, supplies another company with themeans to infringe a patent in a country where it does not havepatent protection? Also, does an infringement actually have totake place for the contributory infringement to come into play?

These and a number of related topics are looked at thisyear in Question 204: Liability for ContributoryInfringement of IPRs. The question will be debated today inPlenary Session III.

Contributory infringement is most often defined as thesupply, or offer to supply, to a person not entitled to work theinvention with any of the means relating to an essential ele-ment of the invention. AIPPI last looked at this issue inQ134A at the 1997 ExCo held in Manila, where it decidedthat, “in respect of patents, liability for indirect infringement

Deciding onVox pop


Michal Fisher, Eitan Mehulal, IsraelApproaches to inventionscovering methods oftreating the human body

need to be harmonised. These areallowed in the US, but forbidden inmost other countries. Methods ofdiagnosis are another problem, sinceit’s not clear whether they areallowed in many places. Also, thedifferent standards for determiningobviousness are challenging.

KG Bansal, United Overseas PatentFirm, IndiaInternet laws need to be

harmonised, as well as copyrightenforcement rules. We all recognizecopyright protection, but we don’tagree on how to enforce and defendit. But the issue most in need ofharmonisation is how differentcountries take evidence and weigh it.

Matthias Sonntag, Gleiss Lutz, GermanyPatent prosecution issuesare most in need of

harmonisation, but there’s an inherentconflict because patent prosecution isstill a national issue. But we need amuch more harmonised global patentfiling system. The next big challengein the EU will be the Communitypatent system; we’re all lookingforward to that.

FranciscoCastillo, ACL Brands,Guatemala andJuan Carlos

Durand Grahammer, DurandAbogados, PeruInternet law needs to be harmonised,as well as the different approaches totrade name protection. In somecountries, store signs can beprotected as trade names and in manycases they conflict with trade marks.

Ignace Vernimme, Stibbe, BelgiumI don’t think it’s a realisticquestion. For instance, in

the case of the internet, harmonisinginternet IP laws is not the issue. Inorder to harmonise, you have tochange each individual system – youcan’t just make a new global internetlaw. So I don’t think harmonisation isreally possible.

QUESTION:WHICH IP ISSUEDO YOU THINK ISMOST IN NEED OFHARMONISATION?

VVOOXXPOPSujata Chaudhri, CowanLiebowitz & Latman, USI recently had a uniformdomain name disputeresolution policy (UDRP)

case, and the laws of differentjurisdictions need to be more on thesame wavelength in that area. Also,it’s problematic that country codetop-level domains (ccTLDs) cannot becovered by online arbitrationproceedings, so you have to resort tolocal courts.

Xiang Lu, Gowlings, CanadaI do a lot of work withbusiness methods and

computer programming prosecutionand that’s one area where we reallyneed harmonisation. For example,the US has quite a liberal approachto business method patents, the EUhas a reasonable approach, but Chinaand Canada are both quite strict.

Yasuo Tamura, Aoyama & Partners, JapanI think the grace periodfor filing a patent needs

to be harmonised the most. I thinkthere should be a one-year graceperiod worldwide. Also, the USshould adopt a first-to-file system inorder to harmonise itself with the restof the world.

does not presuppose that an act of infringement is actuallycommitted by another (the direct infringer)”. But it was notestablished whether liability would exist if the would-be con-tributory infringer offered the means to use in one country,but no-one every intended to use the means in that country,or in any other territory covered by the patent in question.

Although Question 204 is likely to focus on patents, it hasbeen carefully worded to include trade marks and copyright.For example, in trade marks, the printing of branded labelsand supplying them to someone who then sews them ontocounterfeit goods could be contributory infringement.

A wake up call for GermanyGermany has some of the strictest rules governing contributoryliability and is one of the countries that recognises contributoryinfringement even when a direct infringement has not takenplace. “We consider supply of means as something that opens upa door where the patent is in danger,” says Bühling. Injunctiverelief is available, but a lot depends on whether the product sup-plied can be used only in an infringing way. If it can also be usedin a non-infringing way then a limited injunction is possible. It isalso crucial that the supplier knows that the recipient intends touse the product to infringe the patent. If no direct infringementhas taken place then it is not possible to obtain damages.

The doctrine of indirect patent infringement in Germany iscovered by Section 10 of the Patent Act and Section 11 of theUtility Model Act. In Germany, indirect patent infringementoccurs when goods essential to a foreign invention are suppliedto foreign countries even if they are intended to manufacturean invention that will then be brought back into Germany.

This provision was tested in a 2007 Federal Supreme Courtcase involving a manufacturer of radio clocks. The case initial-

ly concerned an unjustified warning letter that was sent by apatent owner to a retailer of radio clocks in Germany warningthe retailer not to infringe its patent. As a result, the manufac-turer of the clocks cancelled the order of a component of thealarm clock from another company, which decided to sue.

The Court decided that contributory infringement isintended as a precautionary measure to prevent any endan-germent to domestic patent rights, regardless of the actualplace where the protected object is produced. In other words,contributory infringement can also happen when the meansto infringe a patent are supplied to a foreign country, if thesupplier knows that the patent-infringing article will be re-imported into Germany.

Australia also has an interesting caseon contributory infringement that mayreach the High Court. Vincent andMaryann Collins own a patent for “aprocess for producing a blue, guaiazu-lene-containing oil from a mixture of thebark and wood of the trees of the speciesCallitris intratropica”. It claimed that thedecision by the government of the Northern Territoryengaged in contributory infringement by granting a licence toAustralian Cypress Oil Company (ACOC) to take thecypress trees from Crown land. ACOC was allegedly using thetrees to produce the oil in a way that infringed the patent.

In September 2007 the Full Federal Court overturned alower court decision and ruled that the trees were a “staplecommercial product” and would therefore be exempt fromcontributory infringement. The Court said they were not,and the licence for the trees amounted to a supply. The HighCourt has yet to decide whether to hear the case.

The 33 submissions received on this topic presented, as theSummary Report states, “a wide variety of solutions”. In theUS, direct infringement has to occur for an indirect infringer tobe liable. In Mexico and Paraguay, by contrast, the concept ofcontributory IP infringement does not even exist in law.

Contributing in harmony On such a difficult topic, is there any possibility of harmoni-sation? On two of the most contentious issues – whetherdirect infringement is needed, and how to apply the doctrineacross borders – the chances of achieving uniformity seemslim. But in other areas progress can be made, according to

Bühling. There seems to be agreement that the contributoryinfringer be liable for damages, but not whether this shouldbe for the entire loss or for his part of the infringement.

Overall, harmonised measures should be available forcontributory IP infringement, and that a supplier should onlybe liable when they supply an essential or central element ofthe patented product. Countries also seem to agree that theconditions for establishing liability should be the same for alltypes of IP right, if possible, and that injunctive relief shouldbe available. But how to apply these principles across bordersis likely to remain controversial. ■

liability Peter Ollier previews today’s discussion on Question 204 addressing liability forcontributory infringement

PreviewQuestion 204


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“We consider supply of means assomething that opens up a doorwhere the patent is in danger”Jochen Bühling

In an increasingly earth-friendly world, the mandate torecycle or repair and reuse products is becoming evermore powerful. But the concept of recycled and repaired

goods often clashes with the basic principles of IP rights.According to the working guidelines drafted by AIPPIreporters for the session, the problem becomes even morecomplicated when only a part of a product that is covered bya patent or utility model is replaced. AIPPI presented 11questions to the member groups relating to the status of thelaw in each jurisdiction. The groups were also invited toanswer seven questions designed to help formulate a draftresolution for uniform rules on the subject, to be presented atthe Meeting of the Executive Committee this week.

Roughly 35 countries submitted reports responding to thequestions. According to the summary report, prepared byAIPPI reporter general, Jochen Bühling, the submissionsdemonstrated a wide range of viewpoints and approaches to thetopic. While the doctrine of exhaustion is governed by statute ina number of countries – such as Belgium, Sweden, Spain and

Mexico – others have developed a position on the subject viacase law, including the US, UK, Germany and France.

Exhaustion definedBefore determining how exhaustion applies to recycledand repaired products in each of the countries, it is impor-

tant to understand what the concept meansgenerally and how the law governing exhaus-tion has developed in the different nations.Exhaustion of an IP owner’s right in a patentor trade mark means that, upon first sale of apatented product, the owner may no longerexercise exclusive rights prohibiting down-stream buyers from selling the product.

Exhaustion laws are usually territorial, but some countriesallow for international exhaustion, an issue that will be one ofthe chief focuses of today’s discussion. AIPPI articulated itsstance on international exhaustion in 2001, during Q156, inwhich it discouraged the theory. According to Bühling, thegroup discourages international exhaustion because “itwould mean that putting a product on the market in onecountry would not prevent it from being sold anywhere elsein the world”. Bühling adds: “Exhaustion is ok, but patentrights are territorial, so I should be able to eliminate infringe-ment. AIPPI favours purely national exhaustion.”

However, the reports indicated that countries includ-ing Singapore, Malaysia, Argentina, Paraguay, Peru andJapan all honour international exhaustion in some respect.The EU allows for regional exhaustion of patent rightswithin its member countries, but not beyond. However, inthe UK, the concept of implied licence (see box) has aneffect similar to that of international exhaustion, since it isapplicable regardless of where the product is first placedon the market.

Exhaustion and re-useThe Q205 working guidelines indicate the basis for the spe-cific question presented in today’s session. According to theguidelines: “Recycling and repair have become economicallyand ecologically more and more important for reasons ofreducing the consumption of raw materials and energy and

Exhaustion for an eco-conscious eraToday’s Question 205 will examine the different approaches to patent and trade mark exhaustion in cases of recycledor repaired goods. Eileen McDermott reviews some of the key issues

Preview Question 205


The notion of implied licence is popular in countriessuch as the UK and Australia and means that, absentany express condition or notice to the contrary, thesale of a patented product to a third party impliesthat the third party is authorised to “use or dispose ofit in any way he pleases”.

On the other hand, exhaustion of an IP right is notconditional and cannot be excluded via notice orother agreement.

Implied licence versus exhaustion

“It’s about balancing the consumer’s interest to the property owner’s interest”David Hill

also of avoiding environmental problems associated with thedisposal of waste plastics and other materials.”

One of the key problems represented by the variousreports seems to be the absence of any clear definition ofwhat constitutes a “permissible repair” or recycling of apatented product. “The main work will be to form guidelinesfor finding a permissible repair,” says Bühling. Although

countries contrasted the concept ofrepair with terms such as “reproduc-tion” (US and Germany), “making”(UK) and “new acquisition”(Denmark), Bühling concluded that itis important to find a common term anddefinition.

In one example, Germany considerswhether the parts in question are“expendable” parts, and also whetherthe part “incorporates essential ele-ments of the inventive concept”.Although repairs are usually admissiblein the case of expendable parts, if itincorporates these essential elements,the repair could be considered a “recon-struction”, and therefore not subject toexhaustion.

Although the rule on exhaustion forrecycling and repair has been clarified inUS cases such as Jazz Photo vInternational Trade Commission (2001)and Aro Manufacturing Company vConvertible Top Replacement Company,the US report admits: “This distinctionbetween repair and reconstruction,while critical to discerning lawful activi-ty, remains blurry when actuallyapplied, depending wholly on the par-ticular facts of a situation, i.e. what iscommonly referred to as the ‘totality ofthe circumstances’.”

In his summary report, Bühling said: “In order to find acommon ground a definition for the acts of ‘recycling’ and‘repair’ has to be established so that a clear distinction can bedrawn between permissible acts on the one hand and thoseacts on the other hand which constitute a use of the inventionand are therefore exclusive to the IPR holder where the rightsare not exhausted.”

Balancing the consumer’s interestOther key issues that will be tabled in developing a resolutionfor Q205 include deciding who holds the burden of proof inexhaustion cases generally and considering the role of copy-right and unfair competition law in circumventing exhaustionfor recycled and repaired goods. “Copyright law provides anexclusive right for the owner,” says Bühling. “Could a recy-cled or repaired product be prohibited under copyright law?Do we want that?”

Also at the top of the list of topics to be discussed is therelationship between exhaustion, contract law andlicences, which varies from country to country. Asked

whether it will be possible to reach agreement on such acomplex topic, David Hill of Finnegan Henderson, one ofthe authors of the US group report, says that he’s seen itdone before at AIPPI: “I was involved in a questions ses-sion last year on the topic of continuations, divisionals andcontinuations in part. We had 40 countries present withdifferent views, but we came to a consensus. It’s a reallybeneficial exercise.”

“It’s about balancing the consumer’s interest to the prop-erty owner’s interest,” says Hill. “The consumer is interestedin getting the best deal, while the owner of an IPR would liketo recoup as much as possible on his investment, so there’salways a balance. AIPPI considers what would be the bestthing for the world.” ■

PreviewQuestion 205


1) AIPPI position on international exhaustion shouldbe reaffirmed

2) Definitions of “repair” and “recycling” must beestablished

3) Permissible restrictions and conditions in licenceagreements must be reviewed

4) Consideration of the interplay between copyrightand unfair competition law

Reporter general’s conclusions

Canon KK v Recycle Assist KK (Japan 2007)In a closely watched case dealing with recycled ink cartridges, Japan’shighest court last November handed down its first ruling on the issue ofpatent exhaustion. The country’s Supreme Court upheld a decision of theIP High Court, which had decided that Recycle Assist had infringedCanon’s patent rights by filling used Canon printer cartridges with ink,importing them into Japan and selling them to consumers.

The Supreme Court said that the recycled ink cartridges imported byRecycle Assist contained elements of an invention patented by Canon. Thejudgment of the Grand Panel of the IP High Court in January 2006 over-turned a December 2004 decision by the Tokyo District Court, which saidthat there had been no patent infringement.

Quanta Computer v LG Electronics (US 2008)In 2000 and 2001, LG Electronics sued Taiwanese computer manufacturer,Quanta Computer, alleging that Quanta and other companies infringed sev-eral of its patents for microprocessor chips in personal computers. LG hadlicensed the patents to Intel, which then sold the chips to the computer com-panies. However, the licence agreement did not expressly authorise Intel’scustomers to combine the chips with non-Intel products, which Quanta did.

The Supreme Court granted writ of certiorari in September 2007, and inJune this year issued its unanimous opinion.

Although the case was widely watched and may significantly affect patentlicensing royalties in the US, David Hill of Finnegan Henderson, one of theauthors of the US report on Q205, says that it won’t change much withrespect to the US treatment of exhaustion in cases of recycle and repair. Hillsays: “The law as it exists in the US with respect to what is repair or recon-struction isn’t changed by Quanta. The law’s really well-settled in the US.”

Two key exhaustion cases

The doctrine of famous marks, which is rooted in article6bis of the Paris Convention (see box), says that amark that is already well-known in one country may

be refused or cancelled in another country at the request of aninterested party. But proving that a mark is well-known orfamous enough to warrant such protection can be difficult. Intoday’s workshop XI on well-known and famous marks, panel-lists from around the world will discuss their countries’ variousapproaches to the matter, and delve into some of the key issues.

The view from the USIn a recent US case, the US Court of Appeals for the SecondCircuit in New York upheld summary judgment for the defen-dant on the basis of an Indian restaurant owner’s non-use of itsmark for restaurant services in the US. The case promises tohave far-reaching implications for non-US trade mark ownersand marks a split between two major US circuits on the subjectof famous marks.

The case, ITC Limited v Punchgini, stemmed from a dis-pute between Indian multinational ITC and the owner ofNew York’s Bukhara Grill restaurants, Punchgini. ITCaccused Punchgini of unfairly adopting the name of its ownwell-known restaurant, Bukhara, in New Delhi, and in 2003,sued Punchgini for trade mark infringement and unfair com-petition under New York state law, alleging that the NewYork Bukhara Grill owners – some of whom were former

employees of the New Delhi Bukhara – had deliberatelycopied the name and trade dress of its Indian restaurants.

A district court granted and the Second Circuit affirmedthe defendant’s request for summary judgment on the basisof ITC’s non-use of the Bukhara mark for restaurant servicesin the US. The Court also rejected ITC’s claim of unfair com-petition because it relied on the so-called famous marks doc-trine, which has not yet been adopted into US federal law.

Although the Court said that ITC’s federal claim of unfaircompetition was unsupported, it asked the New York Courtof Appeals to answer two questions in order to determinewhether New York common law might support an unfaircompetition claim. First, the court asked whether New Yorkcommon law permits the owner of a federal mark or tradedress to assert property rights by virtue of the owner’s prioruse of the mark or dress in a foreign country. Second, it askedhow famous a foreign mark must be to permit the owner of aforeign mark to bring a claim for unfair competition.

The New York court answered the first question affirmative-ly, but it went on to say that “it did not recognise the famousmarks doctrine as an independent theory of liability under statelaw” and concluded that “if a foreign plaintiff has no goodwill inthis state to appropriate, there can be no viable claim for unfaircompetition under a theory of misappropriation”.

Both the district court and the Second Circuit found thatITC had presented sufficient evidence of deliberate copying,

but neither court found any evidence that ITC’s mark hadacquired secondary meaning in New York.

In its decision, the Second Circuit said: “More than copy-ing is necessary for a famous foreign mark holder to pursue astate law claim for unfair competition. That foreign holdermust further offer evidence that the defendant’s potential cus-tomers ‘primarily associate’ the mark with the foreign holder.”

A foggy future for famous marks Michelle Mancino Marsh of Kenyon & Kenyon, who servedas lead counsel to Punchgini and also will be providing the USperspective in today’s workshop, says that the case shows that“the subject of famous marks is still in its formative stages”. Italso raises key questions about what level of fame is necessaryfor a foreign trade mark owner’s rights to be recognised in theUS without use in commerce. Significantly, the SecondCircuit’s contention that the famous marks doctrine is notpart of US federal trade mark law directly contradicts a deci-sion by the Ninth Circuit Court of Appeals in Grupo GiganteSA de CV v Dallo & Co, which implied that the famous marksdoctrine should be honored. In that decision, the court said:

An absolute territoriality rule without a famous-mark excep-tion would promote consumer confusion and fraud.Commerce crosses borders. In this nation of immigrants, sodo people. This split sets the stage for the issue to potentiallyclimb to the Supreme Court at some point in the future.

Mancino Marsh says: “One of the problems right now is,what’s the test? The test in the Ninth Circuit is different thanthe Second Circuit test.” She adds that, while considerableeffort was expended to submit amicus briefs to the Supreme

A global guide to protecting famous A recent case in the US has focused attention on the protection of famousmarks. A workshop today will compare approaches around the world.Eileen McDermott reports

Feature Famous marks


Court in favour of recognising the famous marks doctrine,the Court denied certiorari and more needs to be done on thelegislative front.

In an interview with Managing IP in May, Mancino Marshsaid: “The Second Circuit got it right the first time when itsaid that the famous marks doctrine should be addressed inthe Lanham Act. It’s my opinion that by denying certiorari toITC, the Supreme Court was essentially agreeing with theSecond Circuit. A lot of effort was poured into writing amicusbriefs in the case, but I thought that was misdirected. Let’s getthe Lanham Act amended – it’s something that could haveprevented this whole issue.”

Although the US is party to the Paris Convention, whichincludes a provision for recognising famous marks amongmember countries, the US has not specifically enacted therelevant provision into US law.

Robert Sacoff of Pattishall McAuliffe Newbury Hilliard &Geraldson, who will be moderating today’s session, says thatit may simply be too soon to ask Congress to consider imple-menting protection for famous marks. “It seems that in vari-ous fields, you can only go to the well so many times,” saysSacoff. “We’ve recently had legislation passed in several areas,such as the Trademark Dilution Revision Act [2006], whichdeals with famous marks in a different way.”

Sacoff adds that, since famous marks protection wouldchiefly benefit foreign companies, one problem may be thatthere is not a large enough lobbying presence in the US topush the issue.

Fame around the world Outside of the US, famous marks seem to be faring better. InJune 2006, Canada’s Supreme Court clarified and broadenedthe protection for well-known marks when it rejected anappeal from Veuve Clicquot which hoped to stop the use ofsimilar marks in a non-competing product – a chain ofclothes shops called Boutiques Cliquot. In the decision, theCourt clarified the test that must be met in order to showdepreciation of goodwill, a separate cause of action availableto owners of registered marks found in Section 22 of theTrade-marks Act.

Today’s workshop will also include panellists fromSpain, Hong Kong and Mexico, in addition to the US, whowill provide an overview of the law on famous marks intheir respective jurisdictions. Some of the questions to beconsidered by each panellist include: 1) can foreign markowners sue in the panellist’s country? 2) how well-knownmust the mark be and where does it need to be consideredfamous to receive protection? and 3) are the famous markregisters that have been compiled by several countriesworking?

Countries such as China, Thailand and Mexico maintainregistries of famous marks, but the benefits of such registriesare still being debated. While inclusion on such lists may behelpful in expediting requests for seizure of counterfeitgoods or protection of a mark outside its registered classes,Sacoff says that one problem is the tendency towardfavouritism for local companies. Furthermore, enforcementof such registries is often poor. The session will also featurean in-house perspective, delivered by Jacqueline Leimer ofKraft Foods, who will talk about the difficulties of provingfame around the world. “I think the real appeal will be theglobal perspective the panellists will be providing,” saysMancino Marsh. ■

marksFeatureFamous marks


Article 6bisMarks: Well-Known Marks (1) The countries of the Union undertake, ex officio iftheir legislation so permits, or at the request of an inter-ested party, to refuse or to cancel the registration, andto prohibit the use, of a trademark which constitutes areproduction, an imitation, or a translation, liable to cre-ate confusion, of a mark considered by the competentauthority of the country of registration or use to be wellknown in that country as being already the mark of aperson entitled to the benefits of this Convention andused for identical or similar goods. These provisionsshall also apply when the essential part of the mark con-stitutes a reproduction of any such well-known mark oran imitation liable to create confusion therewith.

(2) A period of at least five years from the date ofregistration shall be allowed for requesting the can-cellation of such a mark. The countries of the Unionmay provide for a period within which the prohibitionof use must be requested.

(3) No time limit shall be fixed for requesting the can-cellation or the prohibition of the use of marks regis-tered or used in bad faith.

Paris Convention

O.KAYODE & COBarristers, Solicitors, Patent & Trademark Agents

1st Floor, 77 Awolowo Road S W Ikoyi, Lagos, Nigeria Tel: 234 1 461 3120; 234 1 461 3121; 234 1 2707345 Fax: 234 1 4614003

E-mail: [email protected]; [email protected] Contacts: Lara Kayode, Bunmi Eyelade, Tosin Osasona

www.okayode.com

As this year’s stunning Olympic opening ceremonyproved, China’s time as a dominant power hasarrived. And the country is merely at the forefront of

a group of nations in the region that are experiencing stun-ning economic growth. Asia offers a unique combination ofcheap (for now) manufacturing facilities and an expandinggroup of consumers: a recent estimate puts the number ofactive consumers in China alone at 100 million.

For this reason companies that haven’t already moved inneed to think about expanding in Asia – either to manufac-ture or, as the region’s citizens become richer, to sell. Butboth options put your IP rights at risk. Most of the debateabout IP infringement in Asia has centred on China, whichhas for a long time had a poor reputation for respectingpatents and has been known as the world’s largest producerof counterfeits. But the situation is not as bad as some busi-nesses think – as tomorrow’s workshop, sponsored by EastIP, aims to prove.

Patent amendmentsOf all the amendments that China is planning to its IP laws,those for the patent law are by far the closest to becominglaw. Dr Gao Lulin, chairman of East IP Group and formercommissioner of the State IP Office (SIPO), will look atthese in tomorrow’s workshop. On July 30 this year an exec-utive meeting of the State Council adopted the amendments

in principle and said that it would be submittedto the Standing Committee of the NationalPeople’s Congress “after further modification”.It is expected to become law in early 2009.

The drafting process of this law has beenexhaustive. According to Duncan Bell, an asso-ciate at Lovells in Shanghai, there have nowbeen four drafts produced.

Last November, Managing IP asked a number of lawyersfor their opinion on the latest draft. The proposal to intro-duce absolute novelty met with near universal acclaim. Atpresent, Chinese examiners consider publication anywherein the world but not public use outside of China. One of theamendments requires examiners to consider public useinside and outside of China and will make the practice ofpatent hijacking – where a Chinese company sees an inven-tion at a trade fair and then obtains a patent for it back inChina – more troublesome.

Although this change has been applauded, some proposedamendments are more controversial. In November last year,Paul Ranjard, representative of French anti-counterfeitingassociation UNIFAB in Beijing and chair of the EU Chamberof Commerce in China IPR working group, was worriedabout the amendment that is designed to compel countriesdoing R&D in China to file inventions made in China atSIPO first – or risk having their application refused when

they finally do apply to reg-ister there.

Article 20 of China’spatent law states: Whereany Chinese entity or indi-vidual intends to file anapplication in a foreigncountry for a patent forinvention-creation made inChina, it or he shall file firstan application for patentwith the patent administra-tion department under theState Council, appoint apatent agency designated bythe said department to actas its or his agent, and com-ply with the provisions ofArticle 4 of this Law.

Until now, foreigninvestors had generallymanaged to ensure thatthey avoided this rule bysetting up a technologytransfer agreement to theforeign partner in any jointventure or wholly foreign-owned enterprise invest-ment in China. But, accord-ing to Zhou Zhongqi, vice-president of CCPIT Patentand Trade Mark LawOffice, “the government isdetermined to stop theloophole”.

The first draft of amend-ments deleted the word“Chinese” in Article 20 sothat the rule applied to anycompany registered inChina. The proposal hasnow been changed again sothat a company will have toobtain SIPO authorisation

before it can file abroad. The March 2008 draft of the amend-ments gave a time limit of six months for SIPO to make adecision. The language states that this applies to “an inven-tion-creation completed in China”.

Given that multinational companies often conduct R&Din many different offices, this provision could be very com-plex to enforce. Thompson raises two important questions:when is an innovation completed, and what happens if aninvention is developed in more than one office? The US hasa similar rule, but allows foreign filing licences to be appliedfor retroactively, something which is not in the amendmentsat present.

To the dismay of a number of IP practitioners in China,amendments granting additional power to SIPO to enforcepatents have disappeared. At present SIPO can mediate inpatent disputes and decide if there is infringement, but has noway of enforcing its decision, which makes it something of atoothless tiger. The December 2006 amendments proposedgiving SIPO the power to inspect contracts, invoices andaccounts, carry out on-the-spot inspections and examine andseal or seize products. In the March 2008 draft these amend-ments disappeared. In fact, SIPO’s limited mediation role hasalso gone.

Trade marks – the backlog problemAmendments to the trade marks law have not advanced asfar, but ask any trade mark practitioner what most needsimproving in China’s trade mark system and they will give thesame answer: the speed of registrations and oppositions.Lovells recently conducted a survey of China’s Trade MarkGazette and looked at the date of applications advertised foropposition on December 20 2007. It found that the averagetime from application to registration is now three years andtwo months. All service marks (classes 35 to 45) take overthree and a half years. Applications filed in 2001 and 2002took just one year to 18 months, which shows how dramati-cally the waiting times have increased.

Lovells also looked at the time taken from publication inthe Trade Mark Gazette to the date of opposition decisionspublished in Volume 31 of the Special Publication of TradeMark Opposition Decisions in late June and July 2007. Thefirm found that most oppositions took just under fiveyears. The total time from application to opposition deci-sion was around six and a half years. An appeal to the TradeMark Review and Adjudication Board – which deals withappeals against a refused registration, appeals againstChina Trade Mark Office (CTMO) opposition decisionsand cancellation actions – can then take anything fromseven to 10 years.

Waiting times this long can create big problems forbrand owners trying to enforce their rights against trademark infringers. And if a trade mark squatter registers yourmark before you it can take years to repair the damages. Byfar the most important rule for trade mark filers in China is:be first.

How can these backlogs be reduced? In early drafts of theamendments the CTMO took the most direct route: abolishrelative examination, process all applications within a 12-month period and move the opposition procedure fromCTMO to the Trademark Review and Adjudication Board(TRAB), which will then give the country’s courts more of arole in the system. The UK recently abolished relative exam-ination, so why not China?

How to protect your IP rights in AsiaIP applications in China and its neighbours are soaring as foreign investment increases. In response, the governmenthas planned wide-ranging reforms to the patent and trade mark laws. Peter Ollier examines the proposals and pre-views a workshop tomorrow on filing strategies for Asia

Feature IP in Asia


When is an innovation completed, and what happens if an invention is developed in more than one office?

Increasing the burden on companiesAbolishing relative examination would also force businessesto take more responsibility for monitoring registrations in thebusiest trade mark office in the world (CTMO received760,000 applications in 2006, compared to 77,000 receivedby OHIM in the same year and 355,000, including addition-

al classes, at the USPTO for fiscal year 2006).Multinational companies with large legal budg-ets may well have the capacity to do this, butwhat about the Chinese companies that are themain users of the system? Some IP ownersdoubt whether they have the resources to mon-itor registrations effectively and protect andbuild their own brand.

There have been different responses to thegovernment’s proposals. Some are more willingto accept the changes. Paul Ranjard belongs tothis second group. Ranjard points out thatcountries around the world are abolishing rela-tive examination and that, although “there willbe a tough period,” trade mark owners “can’t doboth”. That is, they cannot complain aboutdelays and then complain about the abolition ofrelative examination.

But some argue that there is an alternative:hire more workers and increase efficiency at theOffice. In March this year the government gavesome indication that it was considering thisroute when both CTMO and TRAB were putunder new management. An Qinghu, who wasappointed CTMO director-gener-al in 2001, left the Office tobecome director-general of theforeign affairs department of theState Administration for Industryand Commerce (SAIC), theorganisation that overseesCTMO and TRAB. An Qinghuwas replaced by Li Jianchang,

from the department of general affairs in SAIC. At TRAB, XuRuibiao has replaced Hu Lin as commissioner. Xu was previ-ously head of the Enterprise Registration Bureau at TRAB.Sources have confirmed that the SAIC is recruiting 400 newexaminers on three-year contracts: 300 for CTMO and 100for TRAB.

As these amendments take effect and improve the coun-try’s IP system, the country will become an even moreattractive location for foreign investment. While somecompanies prefer wholly foreign owned enterprises, othersstill like to form a joint venture with a Chinese partner.Richard Gruner, a professor at John Marshall Law School

in Chicago, will give a presentation tomorrow that will lookat the role of IP in joint ventures in China and, in particu-lar, at the importance of defining and assessing assets inorder to attract financing. It also stresses the importance ofmonitoring and auditing the IP and setting up systems tocontrol assets. ■

FeatureIP in Asia


The amendments to the patent and trade mark lawsare also part of a broader National IP Strategy. Thisalso commits the government to reforming its copy-right law, though these plans are still at an earlystage. But the most talked about section is the onethat deals with enforcement, especially the commit-ment by the government to consider developing spe-cialised IP courts.

Section 4 of the Strategy deals with IP enforce-ment. According to the official government transla-tion, paragraph 45 states: “Studies need to be carriedout on establishing special tribunals to handle civil,administrative or criminal cases involving intellectualproperty.”

The National IP Strategy

SIPO received more than 694,000 applications in 2007

The SAIC is recruiting 400 new examiners on three-year contracts: 300 for CTMO and 100 for TRAB

What does Thermo Fisher Scientificdo?Thermo Fisher Scientific is the result of amerger between Fisher Scientific andThermo Electron two years ago. With themerger we became the largest supplier inthe world of materials and instruments tothe scientific industries. The industry isstructured so that many innovations comefrom academia and spin-offs from universi-ties. This is especially true in the life sci-ences and genetics areas. So there is a con-tinuous stream of smaller companies tryingto sell themselves to us and we haveacquired many dozens of companies overthe years.

What does your role entail?I have two titles: I am vice president and alsochief counsel for IP. The role is global.About one-third of our research and devel-opment is done in Europe and we sell prod-ucts in many countries. My job is to advocatefor how to use IP in the business and how tomanage IP functions.

I also manage a small IP department.

When I first joined the company we wereonly two people, but today we’re 10 profes-sional staff. That’s still fairly lean becauseabout half of those 10 are dedicated to onlyone division, the scientific instruments

division, which is very high-tech and fast-paced and where IP is very important.

Do you have IP staff in your officesoverseas? The majority of our IP group is based in theUS – three of us are in Waltham and the restare in Pennsylvania, California and Colorado– but we have a small group in England as well.

What will you be addressing atAIPPI during your presentation forthe workshop on avoiding US litigation traps? This Congress is unique because AIPPI is themost international IP organisation. Most IPorganisations tend to be American-centric.There is a big culture of disconnect betweenthe American system and the European sys-tem. About half of my career was based inEurope and I know the system well, and I alsoknow the Chinese system well. I was involvedin the 1980s with the creation of the Chinesepatent system. European companies who endup using IP in the US often get in troublewhen it comes to using the US legal process.The session is about how to understand thecultural divide so that non-US companies canbetter appreciate the potential traps out there.It will be partly what the lawyers think of astraps, but also how to organise your companyto avoid the traps. My focus will be on voicingthe in-house perspective on what the rulesand expectations implied by the US patentjury trial are and how to avoid those traps. Ifyou fail to understand the cultural rules dictat-ed by the US patent litigation process, youwill end up doing the technically right thing,and that could get you into trouble. TheAmerican focus is on rules of business ethics,and these are rules that, without training here,you wouldn’t know and companies foreign tothe US would never observe.

For example, how do you write up aninvention disclosure so that the jury won’tthink you were trying to hide the best moderequirements? The focus for the jury is onwhether the person bringing the suit has done

the right thing by the American public. If youtry to hide something in the American system,that is going to be bad for your patent. So howdo you write it to avoid hiding anything oreven giving the impression of hiding anything?In Europe they don’t care about your commu-nication with the company. Instead, they ask:“What is the invention, and is it good?” But theUS courts focus on whether the person isbeing honest, because the jury isn’t technicallysavvy and they don’t understand the facts.

What is the company’s overall position on the pending US patentreform legislation?As a company, we don’t take sides on patentreform because we sell such a broad array ofproducts that it isn’t clear to us that we wouldbe particularly impacted by a change in thesystem. Personally though, I think the systemdoes need reform for several reasons. First,the cost of enforcement is way too high and asystem that expensive simply cannot be fair.Second, the US system is constrained by theconstitution and the Article 3 court and thishas distorted the patent litigation process somuch. These decisions are very difficult for ajury to make and the process takes so long.The process needs to be seriously looked at –there have been proposals by academics thathave to do with how to inject technicalexpertise into the courts. For instance, savethe juries and use special masters; this wouldbe more efficient. Unpredictability is one ofthe US system’s major problems.

Do you think the USPTO’s self-proclaimed efforts to improvepatent quality have helped at all? The Patent Office is trying hard to take positivesteps but it’s being overwhelmed because ofwhat is happening outside the Office. The phe-nomenon of patent trolls is indicative of a sys-tem that has gone slightly haywire. The realgoal of the patent system is not to make money– it’s to inspire innovation. The reward shouldbe just enough, but not too much. However,the system is self-correcting, so I’m optimistic.

Do you find the lack of harmonisation in the global IP system a major challenge to protecting your company’s IP?The lack of harmony is not really a problemfor me. The key is to understand it. If youunderstand the differences, they’re not aproblem. You need to know that you don’tshow up in a court in Colombia with a com-plaint, for instance. If you understand theprocess and your limits, then you can do busi-ness. Of course, it would be nicer if the ruleswere the same everywhere, I’m not belittlingthe problem, but the bigger challenge for meis to understand the value of my business andthe different ways of maximising its IP value.As a lawyer, I know how to deal with the legalissues, but the challenge is to understand mybusiness well enough and to be selective andpatent where the value is. ■

Learn to avoid the traps in US jury trialsPeter Lee is vice president and chief counsel for intellectual property at Thermo Fisher Scientific, a Waltham,Massachusetts-based company dedicated to serving and supplying a wide range of science-based industries. EileenMcDermott asked him about his views on ways to improve the US patent system and the “culture of disconnect”between Europe and the US

Interview Peter Lee, Thermo Fisher Scientific


• Publicly traded on NYSE – ticker symbol: TMO

• Headquarters: Waltham, Mass.• President & CEO: Marijn Dekkers• 30,000 employees• 7,500 sales and service professionals• More than 350,000 customers• Active in 150 countriesSource: Thermo Fisher Scientific

Key facts about ThermoFisher Scientific

Since 1922

Sojuzpatent is the oldest and the most known firm in the Russian mar-ket of patent and trademark services. Its history began in 1922 with theestablishment of Patent Bureau within the Chamber of Commerce andIndustry. Sojuzpatent became the premier IP firm in the USSR. That iswhy for more then 70 years Sojuzpatent had been acting as the onlypatent and trademark attorney’s firm in the USSR allowed providing IPservices internationally.

Nowadays Sojuzpatent provides Russian and foreign clients with the fullrange of services in IP objects legal protection.Sojuzpatent is concentrated on international IP services by representingforeign clients in Russia and the CIS countries (on prosecution and liti-gation) and by providing services for Russian companies on patentingand trademark registration abroad. To effectively assist clients for theirneeds in different parts of Russia we are operating several local repre-sentative offices (in the cities of Vologda, Astrakhan, Kostroma, Kirov)mainly oriented on trademarks’ legal protection.Currently the staff of Sojuzpatent consists of 100 highly-skilled special-ists including 45 registered Russian and Eurasian patent attorneys,trademark attorneys and lawyers.

We are active participants in major Russian and International IP profes-sional associations and since 1967 Sojuzpatent had been serving as theheadquarter of the Russian National Group of the AIPPI.

13, Bldg. 5 Myasnitskaya Str.,101990 Moscow, Russia.

Tel. +7 (495) 221-88-80/81Fax. +7 (495) 221-88-85/86

www.sojuzpatent.com [email protected]

Thermo Fisher Scientific has more than 1,000 issued patentsworldwide and is the world leader in the science serviceindustry. The company boasts annual revenues of $10 bil-lion and serves customers including pharmaceutical and

biotech companies, hospitals and clinical diagnostic labs, universities, research institu-tions and government agencies, as well as environmental and industrial process controlsettings. The company has two leading brands, Thermo Scientific and Fisher Scientific.

The Boston Symphony Orchestra The Boston Symphony Orchestra is an institution inthis town. Founded in 1881, the BSO is the largestorchestral organisation in the world, and championsboth classical and modern music. The group’s home,Symphony Hall, is world renowned for astoundingacoustic quality. Not only does the BSO perform atSymphony Hall; it is also the home of the world famousBoston Pops Orchestra. The BSO is in residence therefrom September through May. Grab tickets to hear aperformance at one of the greatest concert halls in theworld. 301 Massachusetts Avenue, Boston, MA 02115(888) 266-1492, www.bso.org

The American Repertory Theatre The American Repertory Theatre stages all varieties ofproductions, but is best known for the high quality of itsexperimental theatre. The Loeb Drama Centre, on thecampus of Harvard University, is rather small, but thecompany is known for putting together interesting andenjoyable performances. Harvard University, 64 Brattle Street, Cambridge, MA 02138(617) 547-8300, www.amrep.org

Comedy Connection The Comedy Connection is one of Boston’s largestcomedy clubs. The club presents national and local tal-ent every night of the week. There are often famousfaces from television and film who stop by to do a set,but the club is known for booking some very talentedupstarts as well. (617) 248-9700, www.symfonee.com/comedyconnection/boston/

Berklee Performance CenterBerklee College is a well-regarded music college inBoston, and the Berklee Performance Center is theschool’s prestigious music hall. The performances rangefrom live jazz played by students or alumni, to heavymetal from the school’s faculty or invited guests. Neverboring, this stage is full of surprises. $10 adults; $5 seniors; $5 children (12-18); $2 children under12; children under 2 are free136 Massachusetts Ave, Boston, MA 02215(617) 747-2261, www.berkleebpc.com

Ploughs and Stars Ploughs and Stars is more than a pub for Cambridgelocals, although it has served that function well for over35 years. The bar features musical acts from rock toblues and country, and Irish folktunes have been heardon occasion as well. The pub also offers traditionalbrunch, lunch and dinner menus, along with the weekly“Sunday night chicken and fish fry”. The pub is busieston weekends, when soccer matches are telecast. Hours: Mon-Fri 11:30 – 02:00, Sat & Sun 12:00 – 02:00 912 Massachusetts Ave, Cambridge, MA(617) 576-0032, www.ploughandstars.com

The Wang Theatre The Wang Theatre is a beautiful theatre that presents avast array of performances, including Broadway shows,theatre, music, dance, opera and film. In 1989, the the-atre was restored to the majesty of its golden age atthe turn of the century. The Grand Lobby is justifiablyrenowned for its elegance, but it is the beauty of theperformances on stage that keeps visitors coming back. 270 Tremont St., Boston, MA 02116(617) 482-9393, www.wangcenter.org

Scullers Jazz Club Scullers Jazz Club is a small space (it seats 200) thatbooks some of the best acts in jazz. In the past, this hasincluded musicians such as Harry Connick Jr, DaveBrubeck, Wynton Marsalis, and Dave Koz. You can pur-chase a dinner package entitling you to a three-coursedinner and prime seating. In addition, the club boastsgreat views of the Boston Skyline and the Charles River. 400 Soldiers Field Road, Boston, MA 02134(617) 562-4111, www.scullersjazz.com

The FoursWhen people think of Boston, they think of sports. Andwhen Bostonians think of sports, they think of TheFours. The Fours is a two-level bar with 42 televisionsthat offers fanatical patrons a chance to catch theirfavourite team in action. The pub also serves food,including local specialities such as New England clamchowder and buffalo wings. Hours: 11:00 am -1:00 am 166 Canal Street, Boston, MA 02114(617) 720- 4455, www.thefours.com

BOSTON: ENTERTAINMENT

Boston HighlightsEntertainment


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As chief judge of the United StatesCourt of Appeals for the FederalCircuit since 2004, Paul Michel

plays a crucial role in shaping US patent law.Michel joined the Federal Circuit in 1988and since then has helped to decide some ofthe most important IP cases in US history.Prior to being appointed to the CAFC,Michel, a Philadelphia native, served as acriminal prosecutor under now-Pennsylvania Senator Arlen Specter (anactive sponsor of patent reform legislation)and also worked on Specter’s staff later in hiscareer. Although he had no IP training orbackground before joining the CAFC,Michel says his interest in patent law “didn’ttotally come out of the blue”. He had har-boured a passion for science and engineeringsince childhood, and also closely followedthe career of his uncle, who worked as arenowned patent lawyer for Cravath Swaine& Moore in New York for many years.

In fact, three-quarters of the 12 activejudges on the CAFC are not lifetime patentlawyers and about three-quarters of thecourt’s hearings are not for patent cases (see

chart 1). Although one of the court’s lifetimepatent lawyers is normally present on thetypical, randomly selected panel, the restlearn about IP from colleagues and from thelawyers who argue the cases.

The court’s IP IQMichel says that he learned IP law primarily byreading briefs and the cases they cited. “It wasa very effective way to learn patent law,” saysthe chief judge. “Later I did some teaching andstill later took some courses, but 95% of thelearning was actually from being assigned toindividual cases and reading the briefs. It’s likelaw school: you read opinions and you learnthe law. It wasn’t really a big transition.”

In fact, Michel says he has never felt uncer-tain about any decision he’s made, howevercomplex, although he might change one sen-tence penned as part of his 1996 opinion inVitronics Corp v Conceptronic Inc, in which hestated that expert testimony in claim con-struction proceedings is “rarely, if ever” neces-sary. “That probably overstated things a littlebit and I would tweak the wording if I coulddo it all over again, but that’s very rare,” says

Michel. “We work so hard on drafting; the lawclerks help, the other judges help and we havea permanent staff of senior technical adviserswho critique the opinion, so it gets a lot ofreview before it ever goes out the door andissues to the parties and the public.”

One of the most important cases pendingwith the court today is In re Bilski, which wasargued en banc – or before a full panel of all 12

judges – in May and is now pending adecision. The case deals with the scopeof patentable subject matter and thehearing was one of the most wellattended in the CAFC’s history. It wasalso the first case in which two amiciwere permitted to present oral argu-ments. “It’s a very interesting case and Ithought all the judges worked very hardon it,” says Michel. He adds: “I think itwill be a very significant decision. Itprobably will have broader scope thaneither In re Comiskey or In re Nuijten[both of which also deal with the scopeof patentable subject matter].” Michelexpects the decision to be issued withinthe next one to two months.

Confronting complexityThe CAFC gets roughly 1,600 appeals filedeach year and nearly one-third of those arepatent cases. Each judge on the court has to pre-pare roughly 25-30 cases each month, 34% ofwhich are patent cases (only 1% are trademark). Since the trend has been a steadyincrease in both the number of patent cases

The view from the Federal CircuitChief Judge Paul Michel


Chief Judge of the United States Court of Appeals for the Federal Circuit Paul Michel will be participating in theAIPPI World Intellectual Property Congress for the first time this year, as a speaker on today’s judges’ panel. EileenMcDermott asked him about some of the challenges of running the country’s most important IP court

Profile

filed and the complexity of the technologyinvolved in those cases over the last 10 years,Michel says his biggest challenge is finding waysto juggle the caseload without sacrificing quali-ty. To that end, Michel has requested a fourthlaw clerk per judge from Congress, which heexpects will be granted by March next year.

For now though, Michel says that oneway to tackle the issue of complexity is tohire law clerks with very strong technicalbackgrounds, advanced degrees or experi-ence in industry and law practice.

It also helps matters somewhat that 11 ofthe 12 active CAFC judges now have betweensix and 30 years experience (combined, thefull court boasts 257 years of appellate knowl-edge). “And the lawyers get better and bettertoo,” adds Michel. Singling out Bill Lee ofWilmerHale – who recently argued on behalfof one of the amici in In re Bilski – as an exam-ple, Michel says: “As patent law gets moreimportant to the economy, it attracts cream ofthe crop lawyers more than ever before.There are several dozen superior advocateswith a great grasp of patent law and thatmakes a huge difference to our court.”

Appellate advice Although Michel describes the small percent-age of patent lawyers who are skilled in argu-ing at the CAFC as “superb”, he identifies amajor lack of understanding about appellateadvocacy among lawyers overall. “There are asubstantial number of performances that col-leagues on the court find disappointing, evenin patent cases that are not trivial or tiny, andI think that reflects an incomplete under-standing as to what judges find persuasive andwhat they don’t,” says Michel. He adds that he

and his colleagues use “every chance we get”to let attorneys know what they find helpfuland important to include in briefs and at oralargument: “We all talk to almost anyone whowill listen, but it doesn’t get quite the uptakethat you would think it would, or else all thebriefs would be superb and all the oral argu-ments would be super helpful,” he says.

Michel conjectures that reasons for thismay include US law schools’ overly academicapproach to legal writing, which he views as“all wrong for an appellate brief”, as well as thefact that today’s patent cases simply involvetoo much money to allow younger attorneysan opportunity to argue them. “Law firm eco-nomics is part of the problem,” says the judge.“When I was young, I got to argue cases on myown, but now that kind of learning is rare atbest. Today, the brief is drafted by a commit-tee of younger lawyers, but the lawyer who’sgoing to actually argue the case doesn’t getinvolved until very late in the process when it’s

too late to throw it away, sothey just polish it up.”

Supreme Court vCAFCMichel adamantly rejectsthe notion that theSupreme Court hasincreased its focus onpatent cases in recent years,at least numerically (seechart 2). But he does con-cede that the latest casestaken up by the Court havedealt with particularly fun-damental issues. However,he denies that this is evi-dence of the High Court’sdesire to reprimand the CAFC: “That’s theway the system’s supposed to work,” saysMichel. “If the Supreme Court thinks the lawneeds to be adjusted to be consistent withSupreme Court decisions going back severaldecades, they’ll take the case and make theadjustment, and going forward we work hardto make sure we are applying the adjustmentthat they have required.”

He also argues that at least one of the majorcases to be granted certiorari – KSR v Teleflex,which changed the standards for finding aninvention obvious – is simply misunderstood.“It was argued to the Court that our case lawrequired the so-called teaching-suggestion-motivation (TSM) test to be applied in everycase and to be the only test applied and to beapplied in a very wooden way,” says Michel.“But my own contention is that none of thosecharacterisations was true. I felt that the Courtdidn’t rebuke the overall case law of the

CAFC, but criticised that one case itself andsaid that this one particular panel seemed tohave applied the test in an overly rigid way. Ithink the case is often mis-described, andbecause of that the Supreme Court’s interven-tion is then seen as this huge rebuke, when Idon’t see any rebuke in there at all other thanof one application by one panel in one case.”

Attending AIPPIMichel’s participation in today’s judges’ panelwill be his first involvement with AIPPI. Hesays that he is eager to hear the views of theother judges, since key issues such as the doc-trine of equivalents, the scope of patentablesubject matter and non-obviousness are beingdealt with by judges around the world. “Theproblems aren’t exactly the same, but they’resimilar, and we learn a lot in discussing thenuances in the law and how it’s applied in var-ious jurisdictions,” says Michel. ■

Chief Judge Paul Michel


Profile

Adm

inis

tra

tiv

e law

(5

3%

)

Takings 2%

Native American 0.3%

Other

claims

6%Mil/Civ pay 1%

Tax 1%

Vaccine 0.2%

Inter-

national

trade

7%

Veterans

16%

Contracts

4%

Patent

30%

Trade mark

1%

Personnel

30%

Intellectual property

law

(31%

)

Money suits a

ga

inst

US (15

%)

Source: US Court of Appeals for the Federal Circuit

Federal Circuit cases

0

5

10

15

20

25

30

35

40

45

50

FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07

Filed

Granted

Supreme Court patent cases

Source: US Court of Appeals for the Federal Circuit

07:00 – 18:00 Registration open North Lobby

07:15 – 08:30 Breakfast Roundtable C – Women in IP Law Breakfast Room 206AB

08:00 – 10:30 Plenary Session III (Q204) Room 210ABC

08:30 – 10:30 Workshop III – Patent trial: China Room 104ABC

08:30 – 10:30 Workshop VII Room 107ABC

08:30 – 10:30 Workshop VIII Room 205ABC

09:00 – 17:00 Exhibits open Exhibit Hall A

10:30 – 11:00 Coffee Break Exhibit Hall A

11:00 – 12:30 Workshop IX Room 205ABC

11:00 – 12:30 Workshop X Room 107ABC

11:00 – 13:00 ExCo Session II Room 210ABC

11:00 – 13:00 Workshop III – Patent trial: England Room 104ABC

12:30 – 14:00 Working Lunch Ballroom East/West

13:00 – 14:00 Lunch Bureau with Programme Committee Room 204B

14:00 – 15:00 Special Session: Judges’ Panel Room 210ABC

15:00 – 18:00 Plenary Session IV (Q205) Room 210ABC

14:00 – 15:30 Workshop XI Room 107ABC

14:00 – 18:00 Workshop XII Room 205ABC

15:30 – 16:00 Coffee Break Exhibit Hall A

16:00 – 18:00 Workshop XIII Room 107ABC

16:00 – 18:00 Workshop III – Patent trial: Japan Room 104ABC

18:00 Free evening

Awarded in 2008 as the Leading IP Law Firm in Mexico, by Managing IP magazine

Trademarks | Sergio L. Olivares, Jr. | [email protected]

Patents | Cesar Ramos, Jr. | [email protected]

Copyrights | Luis C. Schmidt | [email protected]

Litigation | Alejandro Luna | [email protected]

TODAY’SSCHEDULE:

TUESDAY 9 SEPTEMBER 2008

Protecting Intellectual Property Rights in Mexico for 40 Years

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