IP Law: Bocconi University PDF

IP law | Federico Ceci INTELLECTUAL PROPERTY and LAW 0  IP law | Federico Ceci The strategic role of IP for Management INTELLECTUAL PROPERTY rights transform knowledge → into value. They were crea...

IP law | Federico Ceci INTELLECTUAL PROPERTY and LAW 0  IP law | Federico Ceci The strategic role of IP for Management INTELLECTUAL PROPERTY rights transform knowledge → into value. They were created precisely for organizing society. The territory of IP is a territory for growth and wealth → IP rights are crucial for the economic activity, thus they must exist! There are multiple IPRs: - INDUSTRIAL DESIGN - PATENTS - TRADEMARKS and COPYRIGHT The economic value of IPRs is through legal mechanisms: - For their granting (ex. piece of paper) → through registration or automatically - For their enforcement → is the real value of the patent (depending on how the legal system works) NB level of enforcement is based on: corruption, speed of commercial legal controversy, quality of lawyers… Defensive and Offensive strategies IPRs facilitate: Company protection → others cannot use your inventions Internal cohesion (ex. SEAT vs Volkswagen) → avoid the internal researcher to go to other corps Ambush and mines → creating a patent waiting for the technology to disrupt the market (faccio brevetto in un mkt in cui NON ci sono patents → aspetto che sorga il bisogno di questa tecnologia → quando c’è bisogno la propongo ad un’azienda in cambio di un sacco di soldi – ex. Biontech with Pfizer) Access to the technological market → allow a company to enter a market ➔ IPRs serve both SMEs and big companies! IPRs system – the territorial nature IPRs are very important because they offer protection to companies, innovators and consumers. The concept of IPRs was exported from Europe to the World → the WTO TRIPS Agreement represents the worldwide acceptance of the importance of patents and IPRs in general for trade and business operators IPRs are private → created by the territory. So, existing standards, advantages and pitfalls, and economic and legal consequences: EFFECTIVENESS → in a globalized trade environment, the national nature of IPRs becomes a drawback to their effectiveness o The best would be a world with the same rules for everyone! Better managing KNOWLEDGE → business interest for international harmonization of IP rights granting and life; EPO patents and future EU patents, worldwide systems (PCT) 1  IP law | Federico Ceci New borders – Tools or Tolls? - Software patents is a new border of IP rights → they involve a software innovation - “Business method patents” and “blocking patents” → they should include some technical skills - The extension of copyright – DRMs VS Open Models → ➔ These new borders allow the creation of new businesses Patenting and Licensing abroad In an open trade environment, the promotion of the company’s territorial basis is guaranteed by IP rights protection abroad → PATENTING and LICENSING are the 2 major tools to benefit from inventions on a worldwide basis! Rights cannot be considered in an independent way → analysing the CONTEXT and the TRADEMARK is fundamental (dynamic strategy of knowledge management). So, interdisciplinary cooperation and inter-organizational cooperation (Universities + Companies) create more knowledge to manage! 2  IP law | Federico Ceci PATENTS PATENT is a property title issued upon application by a Government office which describes an invention and creates a legal situation of exclusivity (use, manufacture, selling, import). They are the main tools for the promotion of inventions and innovations. They allow KNOWLEDGE → VALUE - “Invention” means a solution to a specific tech problem (product / process) - Time limited - typically 20y (to recoup the development costs and give time to reward R&D) NB short-term patents are cheaper and faster tools, with lower duration, but with the same rights! Having a patent is a signal of ECONOMIC VALUE. However, it does not mean that the inventor has the (economic) monopoly, but the patented invention may not be exploited by persons other than the owner of the patent (legal monopoly), unless he agrees to such exploitation. ➔ Right to take action against other person exploiting the patented invention! o In order to derive the benefits to which he is entitled as a reward for his work NB IP law introduces a new set of business strategies → DEFENSIVE + OFFENSIVE! Note that the State does not enforce patent rights, thus it is up to the owner of a patent to bring an action for any infringement of his patent rights (“the patentee must be his own policeman”). The State has the power to limit the boundaries of patent law, because of the public interest. Conditions of Patentability The invention is ELIGIBLE for patent application if: ✓ PATENTABLE, according to the national law o Some countries specify only what cannot be patentable (ex. maths formulas, games, discoveries of materials already existing in nature, plants and animals …) o Patents protection should be available for inventions in all fields of technology (TRIPS) NB if an invention is against public order or morality, it is excluded (TRIPS) ✓ INDUSTRIALLY APPLICABLE → the invention should be useful within an industry frame o Carrying out or using in practice o “Industrial” is within a broad sense ✓ NOVEL → it has never been invented earlier. It is not anticipated by the prior art. o In EU it is assessed the day of the application, in the US the previous year o The disclosure of an invention may take place: ▪ Written – tangible and physical information ▪ Oral disclosure – lectures, radio broadcast ▪ By use disclosure – display, sale, demonstration, television ✓ NON OBIOUS for a specialist of the sector → it exhibits a sufficient inventive step o Protection should not be given to what is already known as part of the prior art, or to anything that the person with the ordinary skill could deduce as an obvious consequence ✓ SUFFICIENTLY DISCLOSED in the patent application → in a clear and non-ambiguous way to be carried out by a person skilled in the art 3  IP law | Federico Ceci o Use of examples, references, drawings NB Italy strongly checks only i) Patentability and v) Disclosing! In the end, once the patent is granted, some jurisdictions provide for an OPPOSITION PROCEDURE (which can start before or after the grant of the patent) in order to allow third parties to present objections to the grant. The registration system in the world is based on: National Laws establish the patentable subject matter, as well as the criteria for industrial applicability, novelty, inventive steps and disclosure – UFFICIO BREVETTI NATIONAL PATENTS Ex. Italy does not require high formal examination in order to patent an invention ( they only check who are you and if the invention is against public order and morality) ➔ National Systems usually pursue only formal examination! EPO (NB different from the EU) which is 27 countries of the EU + 11 countries (UK, Turkey, Switzerland…) → you have to apply in language english/french/german ➔ It is considered as one of the best offices in the world, especially in the step REGIONAL SYSTEMS of ii) Industrially applicable, iii) Novelty, iv) Non-obvious ARIPO (which includes African English speakers) EURASIAN (which includes Russia, Ukraine and other soviet countries) PCT is the only way to ask protection around the world, but it is only a worldwide application, not a worldwide patent provider!!! WORLDWIDE SYSTEM You can apply in several languages (English, French, Spanish, Japanese, German, Russian, Arabic, Chinese, Portoguese) Application Grant Life and death NATIONAL (Italy) National National National European European National REGIONAL (EPO) Ex. the day the patent is granted can depend on the local legislation WORLDWIDE (PCT) Worldwide Regional or National National The EPO system has the following advantages: - It decreases the costs Ex. applying in Germany is very expensive (because of more checking steps) → EPO patent is cheaper - High quality of examination, procedures and human capital (ex. US system suffers from the Federal Budget crisis → salaries of examiners are very low, so there are no incentives for good examiners ) - Increases the strengths of the patent (in case of litigation for imitation → EPO > local) Drafting and filing the application IDENTIFICATION of the INVENTION | opened by an abstract, it typically requires 3 steps: 1- The application should relate to one invention only (“unity of invention”) 2- The description should disclose the invention clearly (drawings + abstract) 3- The description must contain claims which determine the scope of the protection → it is from the claim that third parties are able to know what they may do and not do! a. Summarizing all the necessary features which solve a particular technical problem b. Examine whether it would fulfil the requirements for patentability (especially inventive step) 4  IP law | Federico Ceci NB the CLAIM is at the centre of the heart of any granted patent because it defines the protection which is the purpose of the patent → they define clearly the scope of the exclusive right provided by the patent (NO reference to commercial advantages)! Examination of a patent application Before the examination starts, there are some formal checks → filing date (important because it constitutes the date from which certain actions are calculated – evaluation of novelty, inventive step). NB the filing date is available in all countries which are party to the TRIPS agreement! The process is divided into: - Examination as to FORM → checks to the formality of a patent application o The applicant is given the opportunity to correct any defects during this step - SEARCH → determine the prior art in the specific field to which the invention relates - Examination as to SUBSTANCE → ensure that the application satisfies certain conditions of patentability At the end of the process, provided that it is successful, the patent is GRANTED and PUBLISHED: i) The details of the patent are entered into the Patent Register ii) The office publishes the patent in an Official Gazette iii) The applicant is given a Certificate of Grant NB in order to keep the patent in force → renewal fee $$$ each year! Infringement The patentee acquires the right to decide who shall and who shall not exploit his patented invention (within the term and provided he pays the fees). → Protection against infringement → Possibility of assigning / licensing the right However: - The claims which define the monopoly may be subject to amendment/invalidation - If the invention is an improvement or development of an earlier patent, the patent owner may need a license and pay royalties to the earlier patent - Patented inventions may be used by Government or third parties for public interest ENFORCEMENT of RIGHTS | It rests exclusively with the patent owner → it is responsible for detecting infringements (sending a letter of infringement). ➔ An infringement often brings to licensing the patent ➔ If the owner does not want to license the patent, the infringement brings to legal action NB most of the infringement disputes are settled through negotiation, and does not reach the court action → TIME and COSTS! 5  IP law | Federico Ceci TYPES of infringement DELIBERATELY Copying, Involve minor variations... INFRINGED PARTLY-DELIBERATELY Some attempt has been made to avoid the appearence of infringement INFRINGED ACCIDENTAL Frequent in field where everyone is working on the same problem (ex. INFRINGEMENT pharma) To establish an infringement, the patent owner must prove all the following elements: ✓ The carrying out of a PROHIBITED ACT → there are 3 exceptions: o The patented product is made for the purpose of scientific R&D o A third party had started making the product before the date when the patent application for an invention incorporated in the product was filed o The patented product is made under a non-voluntary license or under an authorization granted by the Government / public interest ✓ The prohibited act must have been done AFTER the publication of the patent application o It would be contrary to natural justice if third parties could be charged with committing an offense when details of the invention were not available to the public ✓ The prohibited act must have been done IN THE COUNTRY where the patent has been granted o The patent law of a country has effect only in that country ✓ The prohibited act must be in relation to a product / process falling with the SCOPE OF A CLAIM OF THE PATENT o The claim should be broken down into its individual elements (same form, same functions, same relationships…) NB the patent owner can make use of the national patent law through civil sanctions (in all cases) and criminal sanctions (if the infringement is intentional) Exploitation of the patented invention The patent owner can exploit the invention in 3 ways: 6  IP law | Federico Ceci i) SELLING – a unique payment ii) LICENSING – under payment of fee iii) MANUFACTURING – establishing a factory or contracting out production VOLUNTARY LICENSES COMPULSORY LICENSES Licenses granted by the owner of a patent Licenses granted by the Government - Event of abuse of the Patent - Public Interest (ex. dominant – dependent patents) NB abuse of the patent is connected to the TRANSFER OF TECHNOLOGY → the patent should be worked and not serve only as an exclusive right to prevent others from doing so or to control importation! Note that TRIPS Agreement allows members to authorize third persons to exploit a patented invention, even against the will of the patent owner, provided certain conditions are respected. Utility Model UTILITY MODELS refer to inventions in the mechanical field. They differ from invention because: - Technological progress is smaller (inventive step) - The term of protection is shorter Patent, Health, Biodiversity and Traditional knowledge Regarding patent and HEALTH, the main issue is that there is not a universal legislation regarding health measures. So, you have to face with each local rule! Usually, pharmaceuticals spend a lot in R&D, so they care a lot on patents that they apply for ( the direct costs of patents are irrelevant). Patents, biodiversity and traditional knowledge → we have to clearly identify the difference between what is in nature and what is effectively discovered! To sum up, PATENTS discipline: PRO CON More incentives to invest (you have the right to Inhibition of knowledge flows exclude others, so you can reward your effort) Increase of costs and obstacles Create a commercial market for idea Heterogeneity among countries Stimulate investing on different fields Chance of economic monopoly position (ex. Solution to the free riding problem of open science pharmaceuticals) Defensive + offensive move 7  IP law | Federico Ceci PATENT COOPERATION TREATY proceeding The PCT is an international treaty with more than 155 States, aimed to make possible to seek patent protection for an invention simultaneously in a large number of countries by filing a single international patent application. However, the granting remains under the control of national/regional patent Offices. NB it is a worldwide application procedure, NOT a worldwide patent provider! The PCT system has the following advantages: - It is simpler and cheaper (applying in one place in only one language worldwide) – 1.400€ - You can patent something that in your country is not patentable (ex. animal life in Italy) How do I protect my invention in several countries? Patents are territorially limited, but there are 3 options to extend protection: a. NATIONAL route – directly file separate patent applications at the same time in all of the countries in which you would like to protect your invention (ex. Camera di Commercio and Ufficio Brevetti in Italy) a. If the invention can help the supreme interest of the country, the patent application will be directly managed by the government b. Most of the countries establish some exceptions of patentability (ex. math formulas, animal life, therapeutical methods…) b. PARIS route – if you filed in a Paris convention country, then file separate patent applications in other Paris members within 12 months (benefit = same filing date) c. PCT route – filing a unique application that has legal effect in all members of the PCT NB the main costs of these procedures are: translations, office fees, local agents! The procedure includes: 1. FILING – in one language and paying one set of fees 2. INTERNATIONAL SEARCH – an authority is responsible for identifying the State of the Art 3. INTERNATIONAL PUBLICATION – after the expiration of 18 months from the filing date 4. NATIONAL PHASE – after 30 months from the filing date → spread the patent 8  IP law | Federico Ceci 1. FILING The PCT is obviously advantageous since it has a national effect for all PCT members with a unique application. All the resident of a PCT State can submit an application and it is filled through: - National Patent Office - Regional (ARIPO, OAPI, Eurasian, EUIPO) - Worldwide (WIPO) The application can be submitted electronically, in specified languages (depending on the Office – translation fee), and it requires 3 fees: - International filling fee (1.333 Swiss francs) - Search fee (150 – 2.000 Swiss francs) - Transmittal fee (depending on the Office) The filing date is relevant because it is the day when you appreciate the novelty. NB in graceperiod countries, novelty is appreciated at PCT application date! 2. INTERNATIONAL SEARCH – within 16 months It is under the responsibility of International Searching Authorities (ISAs). It consists of a high- quality search of the relevant patent documents and other technical literature in those languages in which most patent applications are filed. The outcomes are: ▪ INTERNATIONAL SEARCH REPORT = listing of references which may affect the patentability The goal is to identify the prior art ▪ WRITTEN OPINION = whether the invention appears to meet the patentability criteria o SUPPLEMENTARY INTERNATIONAL SEARCH – Optional It gives the applicant the chance to request, in addition to the international search, a supplementary search → the goal is to reduce the risk of new patent documents and other technical literature being discovered in the national phase. NB pharma companies take time during this period, since they do not have the “ok” to commercialize their products, thus they do not want the patent yet (if they obtain the patent early, they have to pay fees and time starts, but they are not allowed to commercialize the drugs, since they have to wait for the FDA ) 3. INTERNATIONAL PUBLICATION – within 18 months The WIPO publishes the international application (after the expiration of 18 months from the priority date) + international search report → on an online database (Patentscope) Until this step, no third party has access to the international application. o INTERNATIONAL PRELIMINARY EXAMINATION – Optional It is a second valuation of the potential patentability of the invention – the applicant is allowed to send amendments and arguments. 9  IP law | Federico Ceci 4. NATIONAL PHASE Once the applicant has chosen in which States he wish to proceed further with the international application, he has to fulfil the requirements for entry into the national phase, before the 30th month from the priority date. - Paying national fees and filling translations 10  IP law | Federico Ceci EUROPEAN PATENT OFFICE (EPO) The EPO makes it possible to obtain patent protection in 40 countries. The EU patent can be submitted in English, French or German and it has the same legal effect as national patents in each country for which it is granted (tot costs around 5.700Euro + subsequent costs). NB the EU application can be derived both from a National and a PCT application! Once a patent is granted by the EPO, some national laws may require the local language (need to translate the patent). The procedure is the same previously reported (SEARCH → PUBBLICATION → SUBSTANTIVE EXAMINATION → GRANT → OPPOSITION): - REQUEST FOR GRANT – using the settled form, which is freely available on the website - DESCRIPTION of the INVENTION – in a clearly and exhaustive way for a person skilled in the art NB 5 conditions of patentability! - CLAIMS – defining the subject-matter in terms of technical feature. They must be clear, concise and supported by the description. - DRAWINGS – to support the invention - ABSTRACT – for technical information, not used to assess the patent. During the process of granting, it is relevant to notice that the EPO requires a strict SUBSTANTIVE EXAMINATION (which several national offices does not take seriously in consideration). In the light of the search report, the office division (3 examiners) examines whether the invention meets all the requirements. 11  IP law | Federico Ceci DIGITALIZATION in the IP law Digitalization has allowed the IP law to switch from a 100% paper-based procedure to a hybrid procedure that facilitates the access to the services. The patent documentation is now accessible online through internet-based systems, thus the digitalization of patents: Enhances the ENRICHES THE FACILITATES TECH OPPORTUNITIES FOR AVAILABLE POOL of TRANSFER CREATIVITY and tech knowledge innovation by others In a digital and globalized world, the patent system has played a vital role in developing and promoting the technical infrastructure for the internet and e-commerce that takes place across its networks. However, the new technologies are posing challenges to the conventional legal scheme for the patent system! BUSINESS METHODS A recent debate about whether BUSINESS METHODS can be patentable, as processes to be performed on the internet. In the US, for example, a business model for managing an investment portfolio has been patented → it is expected that the number of these e-commerce based patent may increase significantly! Such patents are viewed by some as important to creating incentives in new digital economies. However, the border of Business methods Business methods what is really new/novel, and what is different only because as INCENTIVES for as RISK for digital economy competition it occurs in the cyberspace is still under development → the CLAIM has to explicitly reflect the technical aspect! SOFTWARE PATENTS TRIPS agreement does not exclude software from patentability → however, it is important to make it clear whether software should be regarded as: - INVENTIONS under the patent law - COPYRIGHT Some institutions have excluded computer programs as such from protection under their patent laws (ex. EU, South Africa), while some others have not (ex. US, Korea, Australia, Japan). ➔ There is no international harmonization among this area! In the field of IT, the value of intellectual assets often resides in the CONTENT OF THE INFORMATION → nowadays, software products are often marketed in the form of computer readable media (ex. diskettes, CD-ROMs). Since this topic is in constant evolution and it does not have a solid background, there is not yet international shared opinion concerning an acceptable 12  IP law | Federico Ceci claim format. What is clear is that the computer program needs a technical character, in order to be at least considered. - Beauregard-type claim - Lowry-type claim In Europe, from 2002, inventions using software can already be patented through the EUIPO or National Patent offices. However, implementations of the conditions for patentability vary → for example, the inventive step is met whether the invention makes technical contribution to the state of the art (ex. increase in computer processing speeds). NB why software were not patentable? Because most of the time they are not generating new knowledge (they simply are mathematical formula, so it is just a recombination of existing knowledge). There also is a risk of misappropriation (by patent trolls → it could be just a strategic patenting). First Case scenario Second Case All the method steps can be carried out by generic At least one method step requires the use of data processing means specific data processing means or other technical devices as essential features Exhaustive list which comprises example of acceptable claim formulations NB simulations are not covered into these exceptions, because they do not embed technical features. However, a US case has included a simulation in a class of technical items! In the US, the supreme court set forth a 2-step analytical framework: - Define whether the claims at issue are directed to a patent-ineligible concept - Consider the elements of each claim both individually and “as an ordered combination” to determine whether changing the claim can transform it into a patent-eligible application ➔ Ensuring that patent protection promotes science and allowing technological innovation! NB a patent is not eligible when it claims the use of computer technology to accomplish tasks that were in the past performed by human beings → how to manage the AI world??? Under the last few rules, for being patentable, a CRI should involve: a. A novel hardware b. A novel hardware with a novel computer program c. A novel computer program with a known hardware which goes beyond the normal interaction with such hardware The examination procedure of patent applications related to CRIs is the same as that for other inventions (novelty, inventive step, industrial applicability, sufficiency of disclosure). ➔ Computer programs running on traditional computers should be excluded by the subject- matters of patents! ➔ India is a leading software hub in the world and a worldwide reference for IP in software Computer programs Algorithms Can be patentable NOT patentable 13  IP law | Federico Ceci Software – PRIOR ART The “Cyber Art” raises questions to its availability as “Prior art” → can it be applied against an invention for which a patent is sought in determining novelty/inventive step? The focus is on the fact that some information is disclosed on the Internet → should they be considered as Cyber Art or not? If yes, until what extent? Moreover, the integrity and authenticity of information through the internet are a major concern. It is a place where information is vulnerable and not controlled. In addition, some countries add the concept of the “prior use” to the one of the prior art, which would be revisited in a computer environment. Software – ENFORCEMENT of RIGHTS The internet raises complex issues in jurisdictional questions and enforcement of rights, because: - Patent protection is provided on a country-by-country basis o Patent law of each country has application only within its borders ▪ How to face with the worldwide-based world of Internet? The topic becomes more complex when a patented invention involves activities in several countries by several individuals → in the case of Internet, what constitutes “Using” a patented product/process is more and more complicated! 14  IP law | Federico Ceci Focus – prof. De Santes EXPONENTIAL CHANGE | Change is not linear → change becomes structurally exponential (institutional, economical, legal, geographical…)! From arithmetical/linear to exponential. All our structures, including IP, are designed to serve a society that changes arithmetically → the key issue is how to bring machines + human beings in an exponential point of view. SYSTEMIC CRISIS | Crisis have become systemic → they are not cyclical anymore. 1- Agricultural society – moving goods 2- Industrial society – producing goods (the IP system was created) 3- Knowledge society – generating digital data (IP should give an answer adapted to the society) - Data → Information - Information → Knowledge Consequences FOR data Consequences OF data Technologies are not silar anymore but interconnected Novatio → Innovation - Interoperability - Open standards The IP LANDSCAPE | When reflecting about the IV Industrial Revolution, we have to take into consideration lots of key factors. Approaching IP in this context is becoming more and more important, but at the same time more and more complex! - Consequences for ECONOMY - Consequences for SOCIETY - Consequences for GEOPOLITICS - Consequences for INSTITUTIONS - Consequences for LEGAL SYSTEM - Consequences for COURTS - Consequences for DEMOCRATIC SYSTEM IP has been designed for a society that does not exist anymore → we are leaving a complete change of paradigm! We are moving from a national → to an international perspective! → Should we break the whole system? What should we do based on nowadays IP system: - More applications / more titles → the better for the system - More support to big enterprises → the better for the system - The conviction according to which more titles = more innovation and more competitiveness is granted This is adaptation! But, we have to face with different scenarios (distortion + re-invention) IP whole system should be entirely reviewed! 15  IP law | Federico Ceci EVOLUTION of LEGISLATIVE and PRACTICE PATENT TRENDS The Paris Convention (1883) has been the first agreement to discipline the field of IP rights, followed by the Berne Convention (1886) → all the forms of IP rights are regulated by appropriate National laws The first form of IP rights has been identified on the 500B.C. in the luxury-loving colony of Sybaris, but until late 1400s, the society did not see growth of science as one leading to technology and to resultant material prosperity. Italy In Florence, Brunelleschi obtained a patent in 1421 for a barge with a hoist gear to transport marble needed for his buildings. In Venice, from 1472, a series of patent has been issued, such as the one to Galileo for a device for raising water and irrigating land by which a single horse provided power to discharge water. Europe In England, during the second half of 1500s, several patents have been issued to sustain textile industry and sustain its competitive advantage. From 1800s, with the Industrial Revolution, patent law started to be refined → Patent Law Amendment (1852). US In US, the Congress was empowered in the Constitution of 1789 to promote the progress of science and useful arts, by securing for limited times to authors and Inventions the exclusive right to their respective writings and discoveries. At the end, the patent law found into TRIPS Agreement under WIPO the main reference to legislate the field of IP rights. The nowadays situation is the result of five centuries during which each country tried to refine and satisfy the emerging needs of a patent-based policy framework. As a consequence, it is not a surprise that shared agreements have been signed in late 1900s, when the globalization started to take place. 16  IP law | Federico Ceci AMERICAN PATENT SYSTEM – prof Craig The AIA (American Invents Act) was signed by Obama in 2011, but it has been revised in 2012. From a “First to invent” → to a “First Inventor to file” Treat application publications as prior art as of their earliest effective filing date Eliminate the requirement that a prior public use / sale is a prior art activity The congress has radically changed the definition of what is considered prior art. The Grace Period Generally, a patent application for an invention should be filed at the patent office before the invention has been disclosed to the public, because otherwise the disclosure of the invention is “prior art” to the patent application and will be taken into account when considering whether the claimed invention meets the requirements of being new and inventive. The GRACE PERIOD refers to the period of time prior to the filing date of a patent application within certain disclosures of the design will not impair the applicant’s ability to obtain the design right (ex. if X discloses its invention in public, the earlier disclosure is not considered to be prior art to the patent application). Moreover, disclosures by third parties are not prior art if the inventor has already disclosed that subject matter. ➔ Without a grace period, designers could risk losing rights by a disclosure and may not be able to judge whether their new product designs are worth commercializing or merit pursuit of protection → check and test if the market does or no exist! Anticipate a third- ➔ The grace period is 6-12 months from a filing date party public disclosure ➔ The main consequence is FILING AS SOON AS POSSIBLE (“File First. File Often”) NB in most countries, grace periods only apply to disclosures by the inventors or the person who is entitled to apply for the patent, not to independent disclosures by third parties! Some countries have provisions to exempt disclosures from consideration as prior art if the disclosure was an abuse in relation to the applicant or inventor; moreover, disclosing an invention at international exhibition is often not considered prior art. US introduced the Provisional Patent Application. It consists of a fiction patent application in order to “buy time” (less expensive, they are not examined, provides 12 months to assess the invention’s commercial potential, permits authorized use of “patent pending” notice for 12 months) CLAIM crucial because if it is too broad, there is a Trade Secret risk of crossing the From 2013, trade secrets are patentable in the US. obvious/novelty If a company has a long-held trade secret, it will not be considered prior art any more for a patent application, unless it patents that secret. Re-patenting of Inventions The nutshell is that if you keep your invention secret and file a patent application → it will be secret (and not prior art) up until the application publishes 18 months after filling. 17  IP law | Federico Ceci TRADEMARK A TRADEMARK is a sign capable of distinguishing the goods or the services produced or provided by the enterprise from those of other enterprises. It is any distinctive words, letters, numerals, drawings, pictures, shapes, colours, logotypes, labels, combinations, advertising slogans (only in certain countries). Principle of Specificity - TRADEMARKS = marks for goods For the business identifying for consumers! - SERVICE MARKS = marks for services NB an increasing number of countries allow for the registration of less traditional forms of trademarks (ex. single colours, sounds, smells…). The main function of trademarks is to enable consumers to IDENTIFY a product/good/service of a particular company so as to distinguish it from other identical or similar products provided by competitor → they play a pivotal role in the branding and marketing strategies of companies (image and reputation)! They last for 10 years, and it can be renewed eternally. Some customers develop an emotional attachment to certain trademarks, based on a set of desired qualities of features embodied in the products → trademarks provide an incentive to invest in maintaining or improving quality! TRADEMARK ASSET - DISTINCTIVENESS = it must be original, so capable of distinguishing the product/service o Goods/Services (principle of specificity) o Laws/Jurisprudence o Average Consumer - NOVELTY = it must not be used by anyone else for any identical or similar products, while if the class of products is different you can register the same trademark in that class NB it is a different concept of novelty compared to patents! PATENT – Novelty TRADEMARK – Novelty Never been invented earlier, thus not anticipated SAME CLASS of PRODUCT → must not be used by by the prior art anyone else for identical/similar products - In EU it is assessed the day of the application DIFFERENT CLASS of PRODUCT → the same - In US it is assessed on the priority date trademark can be registered in the different class - Disclosure can be written, oral, by use NB role of well-known trademarks! It must not be misleading (ex. “riscaldamento”), descriptive (ex. “chair”), violate public order/morality (ex. “fascismo”) → avoid vulgarization of trademarks! For most companies, trademarks are considered valuable business assets (ex. IBM, CocaCola) → competitive edge! SIMILARITY can be split into: a. Conceptual Similarity (ex. Toblerone VS Alperhone) b. Visual Similarity (ex. Using the same font with similar combination of letter) c. Phonetical Similarity (ex. Translation of a product in another language) 18  IP law | Federico Ceci Registration The registration process is very important because it gives the company the exclusive right to prevent others from marketing identical or similar products under the same or a confusingly similar mark → without a trademark, investment in marketing may become wasteful! Trademarks can be transferred to other companies through license or franchising agreements, so they may be useful for obtaining financing → thus registration is a pre-existing condition Trademarks application can be REJECTED for the following reasons: × Generic Terms (ex. “chair” is a generic term which cannot be registered as a trademark) × Descriptive Terms (ex. “sweet” can be rejected for marketing chocolate, while qualitative terms such as “rapid”, “best” could be accepted)) o They may lack of exclusivity if too broad! × Deceptive Trademarks (ex. if it is deceiving or misleading customers regarding the nature, the origin or the quality of the final product) × Contrary to public order or morality (ex. fascist slogans) × Flags, armorial bearings, official hallmarks and emblems of States or International Organizations For these reasons, CHECKLIST before applying for a trademark: 1. Check that the trademark meets all the legal requirements 2. Do trademark research, to make sure that it is not identical or confusingly similar 3. Make sure it is easy to read, write, spell and remember (and suitable for medias) 4. Make sure the mark does not have any undesired connotations 5. Check that the domain name (ex. internet address) is available for registration FORMAL APPLICATION FORM - Contact details EXAMINATION REGISTRATION - Graphic Illustration by the Trademark PUBBLICATION office and (eventual) - Description of the and OPPOSITION goods/services RENEWAL SUBSTANTIVE - Pay the fees EXAMINATION 1. The applicant sends the APPLICATION FORMS 2. The trademark office makes a FORMAL EXAMINATION (to make sure that all the required formalities are provided) → SUBSTANTIVE EXAMINATION 3. PUBLICATION and OPPOSITION (publication in a journal with a set period of time for third parties to oppose the registration) 4. REGISTRATION (duration of 10y) 5. RENEWAL (indefinitely by paying the required renewal fees) The whole procedures usually takes 3 months – 2 years, depending on the country. 19  IP law | Federico Ceci PRO CONS Coined / Fanciful words Invented words without any Easy to protect Difficult to remember for intrinsic or real meaning customers Arbitrary marks Words with no meaning in Easy to protect Require heavy adv to create relation to the product they the association mark – advertise product Suggestive Marks Marks that hint at one or some They act as a form of Some countries may consider of the attributes of the product adv them too descriptive Imitating Marks EUIPO procedure WHO? Any natural person or legal entity from any country in the world can file an application. NB However, applicants based outside the EEA/EU are reminded that any proceedings before the Office require the appointment of a representative from inside the EU/EEA. Any applications not fulfilling these requirements will generate an objection letter. It is therefore highly recommended that the appointment is made at the time of filling to avoid formalities deficiencies and a possible loss of rights HOW and WHERE? EU trademark applications can be filled directly at EUIPO. This is possible using any of the following tools: e-filling, online application, sending by regular post, sending via private delivery services, handing in the application personally at the reception, transmission by fax. The online procedure (which is the easiest) can be done in 2 different ways: 1. Five-step form = fast track option 2. Advanced form = for more complex applications (8-10 weeks) NB the use of the official formal structure is highly recommended! NB for a faster procedure of application, you need to pay immediately! WHICH LANGUAGE? The EU trademark can be filled in any of the 23 languages of the European Union as a “first language”. In addition, a second language must be selected that is different from the first one and must be one of the 5 languages of the Office (English, French, German, Italian, Spanish). → Because of its export importance, Italian has been introduced as one of the 5 compulsory languages! → Because of a lot of Spanish speakers around the globe, Spanish has been added to the 5 languages! REQUIREMENTS: The filling date will be later than the date of actual receipt of the application at the office or will be denied altogether. If any requirement is missing, EUIPO will issue an invitation to comply with the missing requirements within a period of 2 months: A. Problem solved → the filling date will become the date on which the last requirement is fulfilled B. Problem not solved → the document will not be treated as an EU trademark application CLASS of GOODS/SERVICES: the original list of goods and services included in the EU trademark application cannot be extended, only limited → the only solution is to submit a new application 20  IP law | Federico Ceci ALTERATIONS? Only minor alterations to the representation of the mark itself can be made, as long as they do not substantially change the mark! Wrong mark or missing classes can be changed only if the application is not submitted yet and the fees are not paid yet → the applicant has to withdraw and submit a new application! Ex. applicant’s name and address can be corrected; list of goods and services can be limited. NB if the trademark incurs slight changes, the primary application may not cover the new shape! So, after modifications it would be ideal to consult the trademark office or a trademark agent (ex. new application?). ➔ FAST TRACK PROCEDURE: the applicant has to pay immediately at the moment of filling and needs to use the EUIPO’s database of pre-accepted terms for classification purposes. The Advanced Form has been designed to alert the applicant when the application is eligible to be a fast track or not. The fast-track application will receive a “Fast Track logo” above the trademark’s timeline. NB an application can lose the Fast Track status later on → due to a deficiency found during the absolute ground’s examination (ex. if the trademark is not sufficiently distinctive, late payment, missing priorities, missing seniority attachments…) Protecting Trademark Trademark protection can be obtained through REGISTRATION or USE (in some countries, like Italy), by any individual/legal entity, but obviously registration is the strongest way. TRADE NAMES TRADEMARK Is the full name of the business and it identifies Is the sign that distinguished the the company (ex. CocaCola Inc.) products of the company NB a company may have several marks! NB each trademark is protected NATIONALLY, based on the country where it has been granted → highly advisable to protect marks abroad! 1. NATIONAL ROUTE → you have to respect the local legislation (ex. Ufficio Italiano Brevetti e Marchi) and pay each application for each different country 2. REGIONAL ROUTE (ex. the EUIPO system) → through EUIPO offices and it follows a unified rights legislation that is valid within the territory of all member countries 3. INTERNATIONAL ROUTE (ex. the Madrid System - WIPO) → directly register trademarks in more than 128 members a. Single application b. One language c. Subject to 1 set of fees and deadlines o The priority period lasts for 6 months (different from patent which is 1y) 21  IP law | Federico Ceci Costs Before applying for a trademark is important to consider the COSTS: - Creation of the logo/word used as a trademark - Conducting trademark research - Registration process - Eventual use of trademark agent Types of Trademarks Trademarks are classified into categories → group trademarks into classes, which consists of the TRADEMARK CLASSIFICATION SYSTEM (34 classes for goods + 11 classes for services) This system allows a very ordered way to manage the trademark law, and also an easier way for applicants to do trademark research. TRADEMARKS Marks used to distinguish certain goods as those produced by a specific enterprise SERVICE MARKS Marks used to distinguish certain services as those provided by a specific enterprise Marks used to distinguish goods or services produced or provided by members of an association → the association generally establishes a set COLLECTIVE MARKS of criteria (ex. quality, dimensions…) and allows the company to use the mark if they comply with such standards. Marks used to distinguish goods or services that comply with a set of CERTIFICATION MARKS standards (but without an association) and have been certified by a certifying authority Marks that are considered to be well-known in the market and as a result benefit from stronger protection → they are recognized by the competent WELL-KNOWN MARKS authority of the country where protection for the mark is sought (they are protected by identical, similar and dissimilar products)! Using trademark Some countries require a proof of utilization (ex. US). Furthermore, a trademark that has not been used for a certain period of time (3-5 years) following registration may be taken off the trademark register → you could lose your rights in your trademark! ADVERTISING) It can be used in advertising, but make sure that is used exactly as it is registered (make also sure that it is not used as a verb or noun, so that it does not come to be perceived by consumers as a generic term). SAME TRADEMARK, DIFFERENT PRODUCTS) Extending one famous trademark to other products can benefit from the image and reputation of the mark → thus is possible, but make sure that the trademark is registered for all categories of goods and services for which it is used! INTERNET) It is very controversial, since trademarks rights are territorial → this creates problems when it comes to settling disputes between persons or companies legitimately owning identical or confusingly similar trademarks for identical or similar goods/services in different countries ➔ Legislation is still developing and trying to find a unifying solution! 22  IP law | Federico Ceci DOMAIN NAME) It is important to choose a domain name (= internet address) different from another company’s trademark LICENSING) They can be licensed to other companies, usually under the payment of a royalty → specified on the agreement, the licensor often retains some degree of control over the license to guarantee that a certain quality is maintained! NB usually trademarks are licensed combined with patents, know-how… FRANCHISING) This agreement allows more degree of control by the owner, than typical licensing one → the franchiser allows the franchisee to use his way of doing business (including trademarks, know-how, customer service, software…) in accordance with a set of prescriptions and in exchange for compensation or royalty. Conflicts and Enforcement The burden of enforcing trademarks is mainly of the trademark owner → it is up to the company to identify any infringement and to decide which measure to take (usually the best is with an IP lawyer). INFRINGEMENT → the first step is typically sending a letter (“cease and desist letter”) to the infringer informing him/her of the possible existence of a conflict. In order to prevent the IMPORTATION of COUNTERFEIT TRADEMARK GOODS, trademark owners can use the international border measures → the company may seek the assistance of the customs authorities at the border (before the counterfeit goods have been distributed in the country). NB other 2 ways of facing with infringement could be ARBITRATION or MEDIATION. 23  IP law | Federico Ceci The MADRID SYSTEM The MADRID SYSTEM is a convenient and cost-effective solution for registering and managing trademarks worldwide. It provides protection in up to 128 countries, under the submission of a single application and the payment of one set of fees: also, when you renew the trademark, you just have to submit one application! ➔ CENTRALIZED SYSTEM to protect trademarks, while for patents it is not unified! The company is allowed to use the Madrid System if it has a personal or business connection to one of the System’s members (128 members). The cost of an international trademark registration includes: - Basic fee (653 Swiss Francs – 903 Swiss Francs) - Additional costs (depending on where the company wants to protect the mark and how many classes of goods and services will be covered by the registration) The steps are: 1. COMPLETE APPLICATION 2. SUBMIT the APPLICATION to the COUNTRY of ORIGIN → the application has to be sent to the company’s Office of Origin (NB it is not the WIPO), which will check that it corresponds to the particulars of the basic mark 3. FORMAL EXAMINATION → the System will make a formal examination 4. REGISTRATION of the MARK → if there are not any irregularities, the trademark is registered (through a publication in the WIPO Gazette of International Marks). 5. SUBSTANTIVE EXAMINATION by the Office of each designated member (by 12-18 months) NB the domestic laws of each designated Madrid System member determine the scope of protection of the international trademark registration! After a SUBSTANTIVE EXAMINATION After a PROVISIONAL REFUSAL 1. You receive no news (within 12-18 months) 1. Positive outcome → the Office grants → protection is granted (tacit) protection of your mark 2. You receive a statement of grant of 2. Negative outcome → the Office confirms protection a total provisional refusal of your mark 3. You receive a notification of provisional NB in some cases, you may be able to appeal this final refusal decision with a higher judicial or administrative body! ➔ “Central attack”: if my mark is attacked in one of the countries, you lose the mark globally! 24  IP law | Federico Ceci IRENE CALBOLI – Trademarks in the Digital Environment The most valuable trademarks are those related to Digital Technology (ex. Facebook, Amazon, Apple…). The theory of trademark law does not change in the digital environment → standards and rules are basically the same. But what the digital environment does is fostering and expanding the number of activities that could be done. It is relevant to highlight that digital environment introduces another big question mark whether the legislation is centralized or decentralized country by country. Other issues concern: - ENFORCEMENT - DISRUPTION - INTEROPERABILITY - GLOBAL VILLAGE - E-COMMERCE and VR - ACCESS vs PROTECTION - LIABILITY → infringement One of the main one is the SECONDARY LIABILITY → a direct infringer is someone that intentionally induce infringement and possibly profiting from it. We still do not have national/international clear rules regarding digital world trademark → because it is subjected to fast change and dynamism! Regarding VIRTUAL REALITY, social media issues from a trademark point of view is relevant when we look at the role of influencers and the huge amount of money spent on marketing activities. Ex. Animal Crossing is a game which is using fashion trademarks without a license! The issues METAVERSE is raising involves are connected with NFTs, Videogames… NFT world is a very new reality → they are unique and cannot be replaced with something else! They are attached to a blockchain → nobody can enter into the system and change something! Ex. the Yuga Labs is the creator of “Bored Ape NFTs”: the litigation is still in progress Ex. Hermès VS Rothschild EPO – Patent EUIPO – Trademarks LEGISLATION Decentralized Centralized French, English, German, Spanish, LANGUAGE English, French, German Italian PECULIARITIES Strong substantial examination PCT – Patent Madrid System – Trademarks The application does not grant a patent, The application grants the mark, so APPLICATION since PCT is not a patent provider! the application is a registration! LEGISLATION Decentralized and not unified Centralized PRIORITY PERIOD It lasts for 1 year It lasts for 6 months 25  IP law | Federico Ceci DOMAIN NAME DOMAIN NAMES are internet addresses, commonly used to find web sites. DOMAIN NAME SYSTEM (DNS) is a global addressing system. It is the way that domain names are located and translated into IP (Internet Protocol) addresses and vice versa. GENERIC TOP LEVEL DOMAIN (gTLD) is the top-level domain of an internet address (ex..com,.net). → The full list is available on the ICANN website! COUNTRY CODE TOP-LEVEL DOMAIN (ccTLD) is the country-level domain of an internet address (ex..it). It is administered independently by nationally designated registration authorities. Domain names have been subjected to several disputes → conflict with the system of business identifiers that existed before the arrival of the Internet, that are protected by IP rights! Cybersquatting = involves the pre-emptive registration of trademarks by third parties as domain names (“First comes, first served”). Cybersquatters then usually exploit their position and ask for high price (higher than the registration price) → domain name as an asset! Ex. I register a domain name called Università Bocconi Uniform Domain Name Dispute Resolution Policy (UDRP) = specific resolution policies designed to resolve disputes. It is based on the recommendations made by WIPO in its report, focusing on the problems caused by the conflict between trademarks and domain name! The increasing business value of domain names on the internet has led to more cybersquatting → DISPUTES ↑ + LITIGATION ↑ Since no international standards existed in order to govern the internet, the WIPO conducted extensive consultation with members of the Internet community around the world → the organization published a report in 1999, which resulted into the UDRP. ➔ WIPO is the organization responsible to manage domain name dispute through the ICANN (Internet Corporation for Assigned Names and Numbers) WIPO and UDRP In the event a trademark holder considers that a domain name registration infringes on its trademark, it may initiate a proceeding under the UDRP, where it needs to be specified: ✓ Domain name in question ✓ Respondent/Holder of the domain name ✓ The registrar with whom the domain name was registered ✓ The grounds for the compliant o The way in which the domain name is identical or similar to a trademark to which the complainant has rights o Why the respondent should be considered as having no rights about the domain name o Whether the domain name was registered and is being used in bad faith 26  IP law | Federico Ceci Within 2 months, a domain name case is usually concluded through on-line procedures by WIPO (shorter and cheaper than litigation). Once the case is solved, the panel decisions are mandatory, in the sense that accredited registrars are bound to take the necessary steps to enforce a decision. Note that the panelist can only decide to transfer/cancel the domain name or deny the complaint → it is not possible for the panel to make any monetary judgements! NB recent developments of the role of WIPO in domain case have been published in the second WIPO Domain Name report (ex. geographical indications, trade names, acronyms have been added). Protection mechanisms for businesses ICANN has put specific protection mechanisms in place to help protect trademarks holders’ IP: SUNRISE SERVICES = initial period of at least 30days before domain names are offered to the general public. This allows a trademark owner to pre-register and safeguard the domain names that match its marks. TRADEMARK CLAIMS SERVICES = they come into effect after the sunrise service. They provide 2 notifications to warn domain name registrants and trademark holders of possible infringements o Warning notice if you’re trying to register a domain name related to a registered trademark o The trademark holder received a notification regarding the situation URS = it is a very rapid relief mechanism to combat cybersquatting and other forms of trademark infringement by domain name (cheap and fast) → it usually leads to suspension of the challenged name UDRP = (as mentioned before) it is a dispute resolution mechanism for trademark owners to resolve clear cases of bad faith, abusive registration and use of domain names. 27  IP law | Federico Ceci LICENSING LICENSING is a common practice to allow third parties to use an IP right (trademarks, patents, copyright…) locally in the country where they exercise their own business → licensing is the main tool to use foreign companies’ IP rights in local businesses! The typical situation involves: - A licensor in developed country - A licensee in developing country ➔ They normally license PATENTS, TRADEMARKS, KNOW-HOW… These types of agreement are crucial for the economic development of developing countries → transfer of technology + creation of jobs + use of local raw materials However, actors have to comply with the relevant licensing provisions of the IP law of the licensee’s country. LICENSING Exlusive rights to work an Without the autorization, others invention belong to the owner should not put into practice the of that invention patented invention The description of the invention available in the Support and cooperation is needed to integrate and learn patent document is not how to use the invention exaustive Hence it is necessary to buy those rights or to buy the permission to use the invention, or to buy the know-how that enables the invention to be put in practice CONTROL by the owner The most critical factor is represented by the QUALITY of the goods (compliance with quality standards set by the licensor) and the CONDITIONS under which they are marketed. If that control is effective, the registered owner of a trademark need not use it himself. - FORMAL REQUIREMENTS | the trademark protection system does not impose any formalities on trademark licensing → the owner exercises effective control over the license - RESTRICTIONS ON THE LICENSEE | Licensees are not usually allowed to assign the license or grant sub-licenses, but such rights can of course be expressly granted in the agreement o Exclusive license = the trademark owner is not allowed to license the mark to others o Non-exclusive license = the owner may allow others to use the mark 28  IP law | Federico Ceci COMMERCIAL TRANSFER and ACQUISITION of TECHNOLOGY The owner of the exclusive rights (transferor) transfers it to the person which acquires those rights (transferee) → LEGAL RELATIONSHIP There are 3 methods that can be used: 1. SALE (assignor) and PURCHASE (assignee) – “assignment” of the rights The assignee becomes the new owner of the patented invention and is entitled to exercise all the exclusive rights in the patented invention, while the assignor has no longer any rights. 2. LICENSE (licensor) (licensee) – “license contract” The licensor gives permission to the licensee to perform the invention in the country and for the duration of the patent rights. This legal relationship is established through several potential conditions (payment by the licensee, limitation on the manufacture of products…). 3. KNOW-HOW (supplier) (recipient) The supplier of the know-how undertakes or promises to communicate the know-how to the recipient for the use by that other party. It usually relates to a patented invention, registered trademark, industrial design. The know-how contract can be included in the license contract, or it can be a separated one. TANGIBLE communication INTANGIBLE communication Documents, photographs, blueprints, computer Explanation on manufacturing (technical cards, microfilm service), trainings (technical assistance) There are also other forms such as: - SALE and IMPORT of CAPITAL GOODS (ex. machinery and tools needed for the manufacture of products or the application of a process – also raw materials and intermediate goods are considered) - FRANCHISING and DISTRIBUTORSHIP = business arrangement whereby the reputation, tech information and expertise of one party are combined with the investment of another party for the purpose of selling goods/services o It is usually combined by the licensing of a mark with the supply by the franchisor of know- how in some form to the franchisee - CONSULTANCY AGREEMENT = help of a consultant that will give advice and make other services concerning the acquisition of technology from enterprises in other countries - TURN-KEY PROJECT = one party supplies to the client the design for the industrial plant and the technical information on its operation - EQUITY JOINT VENTURE = the parties undertake to provide money or other resources as their contribution to the assets or other capital of a legal entity (which is a distinct limited liability company) → each of the parties become the owners of the company! - CONTRACTUAL VENTURE = if the creation of a separate legal entity is not needed/possible, the relationship between the parties is set up in a contract 29  IP law | Federico Ceci NEGOTIATION of LICENSING AGREEMENTS The licensing contract is analysed in respect of: i) IDENTIFICATION of the parties The entities who will become the parties and will sign the license contract, becoming legally bound to carry out its provisions a. If one party is a group of legal entities, it may be contemplated that the license will be given by one of the legal entities in the group ii) OBBLIGATIONS of the parties → SCOPE of the contracts It consists of the transfer by the licensor, and the acquisition by the licensee, of a given technology and of the right to exploit that technology in the making/use/sale of a given product or the application of a given process The SUBJECT MATTER has to be clearly identified → product to be made/used/sold or process to be applied. That subject should also include the inventions included in the process/product, describe the know-how and the conditions. ➔ Identification of product/processes in concise terms ➔ Identification of the invention related (n° of the patent registration, country, filing date…) ➔ Description of the know-how in a manner sufficiently clear and detailed to permit a person having ordinary skill in the art to carry out the invention ➔ Confidentiality, since the know-how is often the source of a competitive position, thus it is a valuable asset of the licensor to be preserved ➔ Access to technological advances (“cross-licensing” = mutual exchange of information) ➔ Limitations of the license and anti-competitive practices (in terms of use, make, sell, territory, quantity…). The owner has to comply with anti-trust and anti-competitive practices, thus avoiding the abuse of his monopoly (ex. imposing anti-competitive obligations on the licensee). Under TRIPS Agreement, members agree that some licensing practices may have the effect of restrain competition and can have adverse effects on trade → impeding the transfer and dissemination of technology! o Tie-in clauses = the licensee may purchase materials only from certain sources o Grant-back clauses = secure exclusive rights to improvements in favour of the licensor ➔ Territorial exclusivity ➔ Permitted field of use in order to define the scope of the application o This gives also the opportunity to the licensor to grant a license to each of a number of other licensees, each specializing in different applications of the invention → $$$ ➔ Exploitation, meaning the level of performance expected by the licensor o Quality of the product, volume of production, import… 30  IP law | Federico Ceci ➔ Settlement of disputes is usually reached in an amicable way, unless the dispute goes into legal remedies o The contract may stipulate that disputes will be subject to arbitration rather than judicial ➔ Duration of the contract for which the maximum is equal to the duration of the right (ex. patent = 20y), but shorter periods can be agreed Remuneration It depends on several factors (nature of the technology, duration of the contract…) and it can be: i. DIRECT – may take different forms: a. Lump-sum payment = a pre-calculated amount to be paid once or in instalments i. It can be subjected to a higher tax rate than royalties ii. It is risky when sale lag behind expectations and the sum is (ex post) too expensive b. Royalties = post-calculated recurring payments as a function of economic use/result (ex. production units, service units, sales…) i. They are periodically subjected to income tax c. Fees = compensation for services and assistance rendered by technical or professional experts (fixed at a specified amount or calculated per person and per period) i. Cost of training programs + fees of technical services and assistance NB these methods can be combined (ex. Lump-sum + Royalties)! ii. INDIRECT – may take different forms: a. Income from related operations (commissions, profits, equipment…) b. Dividends, if the licensor assumes a financial participation in the licensee → it is affected by national laws i. Royalties ↑ ↔ Dividends ↓ c. Cost-shifting or cost-sharing → certain provisions may have the effect of reducing the expenses of the licensor and increase the cost to the licensee d. Market information → the licensor may benefit from data provided by the licensee e. Savings → there may be the effect of reducing the operating expenses of the licensee In terms of remuneration, the CURRENCY has to be clearly identified both for the obligation to pay (ex. you license with a lump-sum of 100) and for the payments (ex. the license requires 10% of sales royalties). Note that these currencies could be different. In case of royalties, if the royalty amount is linked to sales, usually the currency is the one where sales take place. However, in certain countries the national laws govern the currency of payments, and it requires the local currency. NB in case of different currencies, the license agreement is sorted out by the rate of exchange 31  IP law | Federico Ceci TYPES of IP licenses PATENT | The purpose is to authorize the use of an invention protected by a patent. It is advisable to state exactly those countries in which patent applications are still pending and to stipulate which of the parties is responsible for complying with the administrative and legal formalities. EXCLUSIVE It guarantees that the licensee will have no competition, not even that of the licensor or of the latter’s subsidiaries SOLE It guarantees the licensee that the licensor will afford no licenses to other manufacturers within the contractual territory NON-EXCLUSIVE Another license for the creation has been granted in the contractual territory SIMPLE The licensor may afford licenses to other manufacturers TRADEMARK | They are usually granted in adjuncts to patent and know-how licenses. The list of elements and information that an Office may require for a license to be recorded has been provided in September 2000 by the WIPO. - Permission to use - Number of licensees → in order to understand if the licensor has given other licensees (and understand whether its rivals have comparable terms ) - Quality control → in order to provide every information to meet the prescribed quality standards - Marketing → advertising may have to receive the licensor’s approval - Financial arrangements → the licensor may require payments for instructing the licensee - Infringements COPYRIGHT | It is intended as the authorization given by the author to the user of the work to use it in a manner and according to conditions agreed upon between them. The publisher should be granted a license comprising all the rights necessary for optimum realization of the planned publication → it is generally an exclusive license to reproduce and publish the work concerned in a standard trade edition! - Requirement of a minimum/maximum n° of copies - Specification of the language - Possibility of “Subsidiary rights” = reproducing or communicating to the public the work in specified forms other than the standard trade edition 32  IP law | Federico Ceci Role of the GOVERNMENT over IP licenses Many developing countries have a strict control over the inflow of technology → they want to ensure that contracts concerning transfer of technology are consistent with the economic aims of the government! Each country has its own procedures to face with this step: - Laws regarding foreign investment in the country - Laws regarding the foreign exchange regulations - Acts regarding the formal registration procedures to approve IP licenses ➔ The failure to comply with these requirements can render the license unenforceable The WIPO Model Law for Developing Countries on Inventions contains some provisions establishing a legal and administrative framework for the examination and registration of such contracts. The intent is not only to protect the local enterprise (which is typically in a weak bargaining position), but also to prevent the economic policy of the government being frustrated by certain contracts. ➔ If the cost of technology exceeds its value to the local economy (ex. decline in the industrial growth rate, depletion of natural resources…), then it is not convenient! Under this model of the WIPO, the examination and registration of contracts is a task of the Patent Office, or of another government agency (depending on the local organizational structure). It specifies a list of 17 non-exhaustive and non-anchoring terms that can be followed by the Government in order to adapt and integrate these formal procedures. To conclude, the system provided by the Model Law recommends a flexible approach which allows the examination of each contract on its merits within the general economic and tech context of the country concerned. 33  IP law | Federico Ceci COPYRIGHT COPYRIGHT (authors’ right) relates to literary and artistic creations (books, music, paintings, sculptures, films…) → Berne Convention (1886) + National laws → The big issue regarded EXPORTS COPYRIGHT AUTORS’ RIGHT Act of copying an original work which, in respect of Authors have certain specific rights in their literary and artistic creations, may be done only by creations that only they can exercise, which are the author or with the author’s permission often related to as moral rights (right to prevent distorted reproductions of the work) Note that the copyright law protects only the form of expression of ideas, NOT the ideas themselves. Copyright protects the owner of the exclusive property rights against those who copy or otherwise take and use the particular form in which the original work was expressed. NB as long as the work of another author is not copied, it is possible for others to exploit a work very similar to the creation of another one, without infringing copyright! PATENTS COPYRIGHT It gives a legal monopoly right to exploit an idea It prevents only unauthorized use of the expressions of ideas - Short in time (20y) - Much longer duration - Must be known in public - It is simply declaratory - Must be disclosed publicly in an official - A public register is not necessary (no actions or register! formality) NB copyrighters are completely free to decide whether to sue or not (ex. a possible infringement can produce benefits to the first inventor)! WORKS protected by copyright Under the Berne Convention, what is protected by the copyright law is the form of expression, which must be an original creation by the author, not the ideas in the work. Ex. I tell my neighbour my night dream and 2 years later he comes out with a publication with that idea → it is NOT infringement (copyright protects the expression of the idea, not the idea itself!) ➔ Every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression! Books, pamphlets, lectures, addresses, musical works, drawings, paintings, sculptures… NB there is not an exhaustive list (ex. designs is optional, computer programs) → National copyright laws also protect other modes or forms of expression of works in the literary, scientific and artistic domain! COPYRIGHT PATENTS The original creation of the idea – not the idea itself The idea – the industrial application of the idea Note that COMPUTER PROGRAMS are not included in the list in the Berne Convention; however, they are now considered as a production in the literary, scientific and artistic domain. 34  IP law | Federico Ceci RIGHTS protected by copyright Copyright protects 2 types of rights: 1. ECONOMIC RIGHTS → they allow right owners to derive financial reward from the use of their works by others a. They can be transferred through a license Some copyright laws state the authors or other right owners have the right to authorize or prevent certain acts in relation to a work → they can authorize/prohibit: i. Reproduction of the work in various forms ii. Distribution of copies (NB how to manage digital files?) iii. Rental (relevant for those goods easy to be copied, such as DVDs) iv. Importation v. Public performance It can be replaced by a vi. Broadcasting or other form of communication in public right to EQUITABLE REMUNERATION vii. Translation into other languages viii. Adaptation of the work NB all these rights are protected under the limits of public interest (ex. quotation, library, blind people…) In recent years, as a result of technological developments, the role of digital technology is shaking the discipline of copyright. Opinions diverse as to which right should be applied to this activity. Regarding adaptation, for example, adapting and transforming works in digital formats is very easy → manipulate text, sound, images… 2. MORAL RIGHTS → they allow authors and creators to take certain actions to preserve and protect their link with their work. Moral rights are only accorded to individual authors, and they remain with the authors even after the authors have transferred their economic rights → in some countries they cannot be transferred. a. Right of paternity → right to claim authorship of a work b. Right of integrity → right to object any distortion or modification of a work or anything else which would be prejudicial to the author’s honour or reputation NB the economic rights expire, but the moral rights are eternal (provided that relatives are still alive and sufficient linked) → they are strength until a certain point! There are some LIMITATIONS: - Certain categories of works are excluded from copyright protection - Certain particular acts of exploitation that usually require the right owner’s permission may be carried out without the owner’s permission o Free use (no obligation to compensate the right owner for the use of the work without permission) o Non-voluntary licenses (compensation has to be paid to the right owner for non- authorized exploitation) 35  IP law | Federico Ceci DURATION of copyright Copyright typically lasts for the life of the author + 50/70 years after its death. This period starts from the moment the work is created or when it is expressed/fixed in tangible form. It continues after the death of the author in order to enable the author’s successors to benefit economically from exploitation of the work (even after the author’s death). → This is a sort of encouragement for literary works! Works that are no longer subject to copyright protection enter the public domain. OWNERSHIP, EXERCISE and TRANSFER of COPYRIGHT The author is not always the owner. For example, an author employed for the purpose of creating a work is not the author; rather, the employer is the owner of the copyright of that work. → Moral rights – author → Economic rights – employer Authors can transfer their economic rights to individuals/companies through ROYALTIES. It may take 2 different forms: 1. Assignment = (since copyright rights are divisible) the owner transfers the right to authorize/prohibit certain acts covered by one/several/all rights under copyright a. The person to whom the rights are assigned becomes the new right holder 2. Licensing = the copyright owner retains ownership but authorizes a third party to carry out certain acts covered by the economic rights (generally for t° and for a purpose) a. It can be exclusive VS non-exclusive NB collective administration of rights = authors grant exclusive licenses to a single entity that acts on their behalf to grant permission for third-party use, collect and distribute remuneration, prevent and detect infringement, seek remedies for infringement... → CENTRAL SOURCE ENFORCEMENT of rights TRIPS Agreement has added to the Berne Convention several provisions regarding the enforcement of rights: - Advances in the technological means for creation and use of protected material → digital technologies - Increasing economic importance in international trade of the movement of goods and services protected by IP rights PROVISIONAL They are orders of the court issued in civil proceedings prior to the final determination of MEASURES the parties’ rights → they have the purpose of PREVENTING In civil proceedings seek to restore the injured right holder to his former position and FINAL REMEDIES prevent any recurrence of the infringing activities CRIMINAL They are intended to punish those who carry out infringements of particular gravity (ex. SANCTIONS wilful acts, piracy…) They allow right owners to request that customs authorities suspend the release into BORDER circulation of goods suspected of infringing copyright → give right owners a reasonable time MEASURES to commence judicial proceedings against suspected infringer, without the risk he disappears 36  IP law | Federico Ceci They have achieved grater importance with the advent of digital technologies → TECHNOLOGICAL Technical devices that PROTECTION - Prevent copying MEASURES (TPM) - Make the quality of copies very poor - Prevent the reception of encrypted commercial television programs RELATED rights Related rights are the rights related to copyright, that have their special subject matter of protection, which is mainly related to copyright works. They can be granted to 3 beneficiaries: i) PERFORMERS = have the right to prevent recording, broadcasting and communication to the public of their live performances without their consent ii) PRODUCERS OF SOUND RECORDINGS = have the right to authorize/prohibit reproduction, importation and distribution of their sound recordings iii) BROADCASTING ORGANIZATIONS = have the right to authorize/prohibit rebroadcasting The duration of protection of related rights under the Rome Convention is 20y from the end of the year in which i) the recording is made, ii) the performance took place, iii) the broadcast tool place. In terms of enforcement, remedies for infringement or violation of related rights are in general similar to those available to copyright owners. ORIGINALITY in copyright Works must be original, or have originality, in order to be protected by copyright. Originality requires independent creation, which basically means the work cannot be copied from another work. This does not mean that the work has to be particularly novel or unique. NB 2 very similar works based on the same underlying idea or concept may each have copyright protection as long as one was not copied from the other. Is COMPUTER SOFTWARE copyrightable? Internationally, computer software is often eligible for copyright protection. The TRIPS Agreement provides that computer programs, whether in source or object code, shall be protected as literary works. As a work is automatically protected by copyright when it is created, computer software does not need to be registered for copyright protection. Considering the great value of software, however, right holders often register their work to prove ownership of copyright. Software often has technical functions, which belong to “ideas” that do not fall within the parameters of copyright protection but may be eligible for patent protection. 37  IP law | Federico Ceci What is not copyrightable? If a work is so simple that it can appear more or less alike no matter who writes it, it is not covered by copyright due to lack of originality (ex. title of an article or a book). In some countries, pornographic or obscene works are banned, although in theory they can still be protected by copyright. But also, some types of folk art are not copyrightable. COPYRIGHT protection TRADEMARK protection It has an extremely wide coverage of products, but It can ease the standards on similarity of devices, it is less flexible as regards the device itself but it requires consideration of the classes of goods involved COPYRIGHT protection PATENT protection You can prohibit others to COPY your paper about a If you have a patent for an engine, you can car engine just published prohibit others to SELL/PRODUCE the engine But, if someone makes an engine based on that paper However, if someone writes an article about and sells it on the market, it is not infringement the engine, it is not infringement The FOCUS is different! NO automatic protection YES automatic protection Patents, trademarks, industrial design, Copyright, artists’ rights, discographic rights geographical indications ➔ COPYRIGHT LAW ➔ INDUSTRIAL PROPERTY Berne Convention Paris convention DIGITAL COPYRIGHT Advances in technology over the last few years → ONLINE and DIGITAL content can be shared and linked, thus there is a need to keep the copyright law adjourned! Challenges to traditional copyright principles as the established rights which copyright protects can have unforeseen consequences in the digital world. INTERNET COPYRIGHT It is worldwide It is territorial For its nat