ANALYSIS OF AMENDMENTS IN IEEE PATENT POLICY

Standard Setting Organizations (SSO) are organizations for developing, coordinating, promulgating, revising, amending, reissuing and interpreting standards or, in simpler terms, developing global standards for a broad range of industries. There is a large number of SSOs that are quite active at present. Prominent among these SSOs is the Institute of Electrical and Electronics Engineers (IEEE). ASME, the ASTM international and the W3C are the other key players in this arena. Members of the SSOs hold Standard Essential Patents (SEP) for implementing the standards developed in a technology. These members tend to license the SEPs to different organizations or companies on the basis of a policy that is Fair, Reasonable and Non-Discriminatory (FRAND) for gaining monetary benefits and royalties. But of late the SSOs and the standards developed by them have taken the center stage during litigation procedures between corporate powerhouses. Some of the cases worth mentioning would be the Microsoft versus Motorola, the Apple versus Motorola, the Ericsson versus D-Link etc. In all these cases the IEEE Wi-Fi standard has played a prominent role. As a matter of fact, the FRAND commitments are cited 10 times more often now than it was being cited 10 years back.

IPR experts and observers have long been pushing for a clarification from the SSOs on the issue of their patent policy. And finally, on February 8th   2015 the board of directors of the Institute of Electrical and Electronics Engineers (IEEE) voted to approve a set of amendments to the organization’s patent policy. The IEEE provides a link here to the current draft of the proposed IPR policy. On a first time read, many would find the IEEE policy change contrary to the US law for determining royalty rates and providing injunctive relief for SEPs. Some of the key points of the IEEE amendments are:

  • The compensation for the usage of an essential patent claim is considered based on the value of the relevant functionality of the Smallest Saleable Compliant Implementation that practices the essential patent claim.
  • The submitter will make available a license for Essential Patent Claims to an unrestricted number of applicants on a worldwide basis without compensation or under reasonable rates, with other reasonable terms and conditions that are demonstrably free of any unfair discrimination.
  • The submitter of an accepted Letter of Assurance who has committed to make available a license for one or more essential patent claims agrees that it shall neither seek nor seek to enforce a Prohibitive order based on Essential Patent Claims in a jurisdiction.
  • Reciprocal licensing shall mean that the submitter of an LOA has conditioned its granting of a license for its Essential Patent Claims upon the Applicant’s agreement to grant a license to the submitter with reasonable rates and other reasonable licensing terms and conditions.

The amendments to the IEEE patent policy point out the fact that SEP holders are not allowed to seek injunctions against licensees. Further, by asking to consider the value of the smallest salable unit, the IEEE patent policy amendments considerably reduces the royalty value the Standard Essential Patent holders were to receive in return for their SEP(s). A setback, which is more than likely to happen, will be an increase in litigation cases. Why term it a setback? Because the real deal was to reduce litigations. At the end of the day, it is a field day for licensees, as they don’t face the threat of an injunction. And disappointing for the SEP holder, as the SEP’s monetary value is decreasing.

A point worth mentioning would be that denying access of SEPs to firms dampens any chance whatsoever the firm has for competing in a market where consumers are more often attracted to products that are standardized. Also, regulating the access of SEPs to firms by a third party would tend to reduce the quality of standards in times to come. Similar was the expectation from the IEEE patent policy amendment of 2007 when nearly all the foremost IPR experts had predicted the amendments to be a complete disaster. But nothing of that sort happened. And when we look at the present amendments, of course there are short comings but at least the IEEE has given a much awaited and needed clarification on the FRAND policy it implements.

 Perzeus Abhas is a Patent Engineer at IP Astra

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ISDS and Intellectual Property

This is the story of something that happens all the time: Companies suing governments over invalidated/ rejected patents/ patent applications. However, this commonplace news snippet becomes not-so-commonplace because of the huge amount of money involved. Also because of the fact that this case has opened up a new way by which Multinational Companies can influence state policies.

Last year, Eli Lilly, a US Pharmaceutical company sued the government of Canada after two of its patents were invalidated by courts in Canada. If that sounds familiar that’s because you have read about Novartis v. Union of India & Others that was decided exactly two years ago, April 2013.

Now let’s take a look at the facts we have.

Sometime back, the supreme court of Canada invalidated two patents of Eli Lilly on the basis of a “promise doctrine” ie  if a patentee “explicitly and unequivocally” promises a use or result for an invention, the patentee is responsible to keep that promise. For example, in this case, Eli Lilly  had promised that its inventions, which were pharmaceutical drugs, were better than rest of the drugs in the market. But it was more of a guess, and the courts in Canada invalidated the patents in 2007 and then again in 2011.

According to Eli Lilly’s notice to Canada, this invalidation was simply “absurd”. Eli Lilly argues that that “The promise doctrine” was introduced way after the patent was granted in Canada, and its patents should not be invalidated using the promise doctrine.

Now if you know anything about patents, you would know that there is absolutely no point in arguing here. Patents are routinely invalidated when the law changes or in common law jurisdictions, when there is a new ruling. That’s part of the reason why a Bilsky Vs Kappos or an Alice vs CLS gains a lot of interest among patent lawyers.

The difference here is, not only has Eli Lilly sued Canada, it has demanded a hefty compensation of $500 million for lost potential profits. Now that is something that has been not heard of. To answer the question “How on earth could they do that!!”, allow me to introduce to a term that has been used time and again for several nefarious purposes: ISDS.

ISDS

ISDS or The Investor State Dispute Settlement, are a group of about 3000 agreements that have been implemented as early as the end of the second world war. There were a lot of newly formed independent nations after the second world war, and they were all hungry for foreign investments. These agreements promised foreign investors a set of minimum guarantees and they felt safe to invest in companies. Now one of the guarantees that the ISDS provided was that a state shall provide compensation for “expropriation” of investments. If that is a word too big for you, it means that the state shall provide compensation for investments stolen by the state. If the investors can prove that in a court of law, oh wait, there is no court of law here- ISDS disputes are solved in a tribunal of private lawyers chosen by the government and the investors. So if the investors are able to prove that in a tribunal of private lawyers that the government is liable to compensate them, the government is liable to pay them out. There are no binding precedents, or appellate reviews.

Now all of the above facts about ISDS have been in existence  for the past sixty five years.  So what’s new? What’s new is that, companies have started treating Intellectual Property as investments to the extent that a simple invalidation of a patent is treated as expropriation.  Likewise, inability to display a trademark is being counted as expropriation. To cite an example:

In 2011, the Australian Government  banned use of trademarks on cigarette packets. Name of the company was to be written in a generic manner, and the cigarette packet was to be labelled with messages like “Smoking Kills” “Smoking causes blindness” etc. Immediately, Phillip Morris, the tobacco company known for Malboro, sued the Australian country for a hefty sum. The lawsuit failed, but that did not stop them from sending notices to poorer countries like Togo and Uruguay when these countries came up with similar laws.

But that again, was about trademarks. Eli Lilly is probably the first company to sue a nation for invalidation of patents. That too for $500 million. The basis for the suit is that patents are investments and invalidating them using a new law is expropriation of the “investment”. Seemingly, Eli Lilly assumes that an issued patent should never be invalidated and also that a nation cannot modify its laws without violating the “ISDS gurantees”. Eli Lilly’s case is further strengthened because of the TRIPs agreement of 1994, that guaranteed a minimum level of IP protection in all the signing nations.

Here are a list of allegations put forth by Eli Lilly:

  1. NAFTA and TRIPS agreements refer to mandatory obligation to grant patents to inventions that are “useful” and have “industrial applicability”. Eli Lilly alleges that Canada has failed to enforce its patents, both of which being useful with industrial applicability
  2. Eli Lilly states that Canada cannot compel patentees to include evidence of utility in their patents.
  3. Lilly objects that the “Promise” doctrine is being improperly applied only to pharmaceutical patents.

All the above objections can be objected to because both the TRIPs and the NAFTA have provisions to provide flexibility to countries to define key terms like “new” and “patentable”. But Eli Lilly claims that Canada’s definition of the word “new” is unacceptable.

So the bottom line is, that should Eli Lilly’s allegations and claims are to succeed, several international norms that help countries to have different standards of IP protection would be destroyed.

Eli Lilly’s allegations could spell trouble to the international IP environment, particularly jurisdictionally isolated patent provisions like Compulsory licensing, provisions to prevent Evergreening of drugs, etc. Further, the ruling would also cause countries to have lesser control over their IP policies.

So unlike the commonplace Pharmaceutical IP lawsuits, this particular Lawsuit should be of major concern. Caution must be held while signing anymore ISDS agreements. Moreover, new provisions like fast track legislation of ISDS cases should be fiercely opposed.

Leo Paul Johnson is a senior patent engineer at IP ASTRA

The Importance of Common Law Trademark Searches – Tata “Vistara” Trademark Case Study

The most common refusal at the Trademark office in an attempt to obtain a trademark registration is that of a ‘likelihood of confusion’ with another similar mark with similar goods and services. While most of us believe that we have coined a unique trademark as the brand name for our product or service, we cannot be sure that someone else is not already using such name. A ‘likelihood of confusion’ refusal after the trademark application is filed or an objection thereof from another user of the same or similar name, might result in the application being rejected outright.

Thus, a trademark search prior to applying for a trademark registration is essential if you want to avoid ‘likelihood of confusion refusals or objections from other users. Most trademark attorneys or even in house counsel will conduct a basic search on the Trademark Registry prior to filing the application but a common law search is also just as important and the ongoing issue with the Tatas attempted trademark registration of the name “Vistara” serves an example of just how much.

The “Vistara” trademark

 

The Tatas and Singapore Airlines entered into a joint venture (Tata SIA Airlines Ltd) in 2003 to establish “Vistara Airlines” wherein the Tatas own the larger share of 51% and Singapore Airlines the remaining 49%.

On applying to register the trademark “Vistara” the Registrar of trademarks in January of this year has found other similar trademarks registered with the Trademark Registry for similar goods and services. In the examination report, the Registrar of Trademarks has said that the Vistara Trademark is open to objection on grounds of refusal because “same/similar marks are already on the record of the register for same/similar goods/services.

Further, the trademark “Vistara” has been objected to by a similar user “Vistara Voyages Pvt. Ltd.” The situation became public when Vistara Voyages filed a civil suit in the High Court of Karnataka to restrain Tata SIA Airlines Ltd. from using the mark “Vistara”.

Vistara Voyages owns the domain name ‘vistara.in’ at the time of its incorporation while Tata uses “vistara.co.in”. However, the proprietor of Vistara Voyages only applied to register its mark in September 2014 two months after Tata SIA Airlines applied for its registration. So the question here is what rights Vistara Voyages has over Tata SIA Airlines under current trademark law.

Rights of the Senior User

 

In India, the owner of the trademark with a better claim is usually the senior user.

For example, if an applicant applies for registration before anyone else commences use, it is the applicant who is first to file the application who would be considered the owner of the mark. However, if the applicant is the first to apply for trademark registration but there is a person who was already using the mark but has not yet applied for registration, it is user of the mark who first used it in commerce who will be considered the owner of the mark. This owner has the right to sue an infringer for ‘passing off’.

In this case Vistara Voyages claim to have been using the mark since 2008 and were incorporated five years prior to Tata SIA Airlines. Hence they can claim prior use and bring a suit of infringement against Tata SIA Airlines.

This is why common law trademark searches are just as important as searches on the Trademark database.  Tata SIA Airlines should have been aware that the Vistara mark was in commercial use for similar services and that Vistara Voyages owned the domain name ” vistara.in” prior to filing its trademark application

Conducting a Common Law Trademark search

 

A common law trademark search can be carried out by searching through directories and databases. This includes the Internet, market surveys, yellow pages, domain names etc. You can hire a law firm to conduct the search for you or you can do it yourself.

The search must be conducted for “similar” names for “similar goods and services”. A likelihood of confusion refusal arises for “similar” and not only “same”  or identical names. The main criteria is that your mark should not be likely to be confused with a similar mark in the eyes of the ordinary consumer. There need not be “actual” confusion but a “likelihood” would suffice for a rejection.

In order to avoid a situation like the Tata “Vistara” trademark case, it is critical that trademark searches be taken more seriously. Tata SIA Airlines have been given one month to respond to the Examiner’s rejection of the mark. The civil suit filed by Vistara Voyages is still pending.

Source: http://profit.ndtv.com/news/corporates/article-tatas-vistara-trademark-objected-739695

Author Lynn Bout Lazaro is an IP counsel