Global Intellectual Property Newsletter - Clifford Chance · “off-label” use of ... IP...

Global Intellectual Property NewsletterIP Topics from around the Globe

11th Edition

© Clifford Chance, September 2016

Global Intellectual Property Newsletter – IP Topics from around the GlobeIssue 09/16

2

Barcelona: Wake-up call from the Barcelona Court of Appeal for infringing “off-label” use of generic medicines .............................................................................5Over the last few years, courts around Europe have issued landmark decisions on theenforceability of “second medical use” claims and, in particular, on the measures required ofgeneric companies to guarantee fair protection of patent holder rights.

Barcelona: ”I am sorry, you were too late” – Barcelona commercial court refuses to grant an ex parte injunction applied for shortly before the opening of the mobile world congress..........................................................................7In a decision handed down on 22 February 2016, Barcelona Commercial Court no 1refused to proceed ex parte with a preliminary injunction application aimed at preventing theexhibition of more than thirty electronic devices during the Mobile World Congress held inBarcelona last February.

Milan: The doctrine of secondary meaning and the burden of proof – Italy’s Supreme Court rules on admissibility of market research.............................10Some of the most contentious issues in Intellectual Property law in Italy surround where theburden of proof lies in trade mark nullity actions which involve the doctrine of secondarymeaning, and the evidence that is admissible in such actions.

Hong Kong: Security, data and counterfeits – recent developments in China e-commerce ....................................................................................................13The China e-commerce market has been booming in recent years. According to recentdata, online sales reached RMB20.8 trillion last year. The success of e-commerce brings itsown challenges, including regulation by multiple authorities, a new cyber security law andthe ever-present danger of counterfeiting.

Hong Kong: Clifford Chance triumphs over Chinese trade mark squatter seeking to capitalise on Clifford Chance’s Chinese trade name..............................16On 22 July 2016, the Beijing Intellectual Property Court (“BIPC”) upheld a decision of thePRC Trademark Review and Adjudication Board (“TRAB”) disallowing a trade mark squatterin China from registering the trade mark “高伟绅Angel Kiss”, which copied Clifford Chance’sChinese trade name (高伟绅).

Amsterdam: The EC’s Digital Single Market strategy – recent developments .....................................................................................................18In May of last year, the European Commission (“EC”) unveiled a detailed plan to create aDigital Single Market (“DSM”) in Europe.

cont

ents

Warsaw: Key changes in trade mark registration proceedings................................20Brief description: The Polish trade mark registration system has recently undergone quitesubstantial changes.

Prague: The Visegrad Patent Institute – a Simpler Access to Patent Protection ...22The Visegrad Patent Institute (“VPI”) is an intergovernmental organization established forcooperation in the field of patents, which started operating on 1 July 2016.

London/Düsseldorf: The Impact of Brexit on IP Rights.............................................24The United Kingdom’s vote to leave the European Union has led to a period of legaluncertainty with the future relationship between the UK and EU not yet being defined.

Acknowledgements ..................................................................................................... 26

Contacts ....................................................................................................................... 27


3


Welcome back from the summer break to a new issue of Clifford Chance’s Global IntellectualProperty Newsletter. In our quarterly publication we provide an overview of the most recent IPdevelopments in major jurisdictions around the world.

We are proud to present the 11th edition of our Global IP Newsletter which will look at a varietyof areas, including recent court decisions, updates on hot topics and – of course – the impact ofBrexit on the IP landscape.

In our Newsletter we will address recent rulings of the Courts of Barcelona dealing with SEPs andgeneric products. In particular, we will provide some background on the Barcelona Court ofAppeal’s decision regarding the “off-label” use of generic medicines and will also shed light on theBarcelona Commercial Court’s denial to grant an ex-parte injunction applied for shortly before theopening of the mobile world congress. This Newsletter also examines a recent decision of theItalian Court of Cassation dealing with the relevant (secondary) burden of proof and answering thequestion of what sort of evidence is essential and needs to be presented before court. We will alsoupdate you on China’s E-Commerce Regulations and will present a favourable decision involvingClifford Chance’s Chinese business denomination. This issue also provides an overview of newpublications from the EU Digital Single Market program. Furthermore, we will cover the impact ofFrench contract law – which has recently been reformed by way of an ordinance (ordonnance) – onIP agreements and outline changes in the application policy of the Polish trade mark registrationauthorities. This September issue will also summarise the benefits of the Visegrad Patent Institute,an intergovernmental organisation for cooperation in the field of patents. Lastly, we examine theimpact of one of the hottest topics this summer – Brexit – on IP Rights.

We hope you enjoy this edition of the Global IP Newsletter and look forward to receiving your feedback.

11th Edition

BackgroundIn March 2015 Warner-Lambert (instructingone of Clifford Chance’s partners,Miquel Montañá) filed an application fora preliminary injunction against severalcompanies which had obtainedauthorizations to market pregabalingenerics in Spain. The defendants hadtaken the precaution to “carve-out” thetherapeutic indication (treatment of pain),protected by Warner-Lambert’s patent,from the Summary of ProductCharacteristics (“SmPC”). Instead, theirSmPCs only mentioned other indications(epilepsy and general anxiety disorder)which were no longer patented. Only ca.22% of sales in Spain were attributable tothe latter indications.

Warner-Lambert argued that, in spite ofthe SmPC “carve-out”, the dynamics ofthe Spanish regulatory framework wouldresult in the widespread prescription anddispensation of the defendants’pregabalin products also for the treatmentof pain, unless the defendants were toadopt precautionary measures. In Spain,as a general rule, (i) practitioners mustprescribe medicines by making referenceto the active ingredient (i.e. pregabalin)and not to the brand name (i.e. Lyrica®)and (ii) under the rules applicable at thattime, even when the brand product andthe generic product have the same price,pharmacists must dispense the generic

product. In conjunction with theparticularities of the IT system used bySpanish practitioners, this meant that, inpractice, virtually all pregabalin dispensedfor the patented indication (pain) could bea generic product.

Against this background, Warner-Lambertrequested the Court order thedefendants, inter alia, to inform theirclients that, while the patent is in force,the pregabalin generics must not beprescribed or dispensed for the treatmentof pain, and to refrain from supplying thegenerics, unless the purchasersguaranteed that they would not be used“off-label” for the treatment of pain.

The ruling of theBarcelona Court of Appealof 5 July 2016Initially, a first instance court dismissedWarner-Lambert’s request on thegrounds that no direct or indirect acts ofinfringement had been established.However, the Barcelona Court of Appeal,which may be considered Spain’s leading

forum for patent litigation, found otherwisein a recent ruling dated 5 July 2016.

On the one hand, the Court ruled out theexistence of “direct infringement”, since ithad not been established that thedefendants were manufacturingpregabalin purposely for the patentedindication. Nevertheless, the Court foundthat a “carve out” of the patentedindication on the SmPC was insufficientper se to exclude the risk of infringement,even if it had been proven that thedefendants did not actively promote theirgeneric products for the patentedindication. The Court established thatthere was a “real probability” of a verysignificant share of generic pregabalinbeing prescribed and dispensed for thetreatment of pain, and that thedefendants were well aware of this fact.

The Court thus held that the defendantshad engaged in “contributoryinfringement” (i.e. “indirect” infringement)under Spanish law, because they hadknowingly supplied an essential elementof the invention (pregabalin) that is defacto prescribed for the treatment of


5


Barcelona: Wake-up call from the Barcelona Court ofAppeal for infringing “off-label” use of generic medicinesOver the last few years, courts around Europe have issued landmark decisions on theenforceability of “second medical use” claims and, in particular, on the measuresrequired of generic companies to guarantee fair protection of patent holder rights.Most of these cases were triggered by the patent protecting the use of pregabalin(Lyrica®) for the treatment of pain. In Spain, the Barcelona Court of Appeal has nowshed some light on this issue, finding that generic companies had “indirectly” infringeda patent in spite of “carving out” the patented indication, and ordering them to adoptactive precautionary measures to avoid any “off label” use.

Congratulations to our Spanish Team!

Clifford Chance “IP Firm of the year”Managing Intellectual Property 2016: Spain – Litigation



6

pain, thus putting the invention intopractice. The Court noted that “if thedefendants wish to market pregabalinthey must contribute fairly to avoid theprohibited outcome”.

Accordingly, the Court ordered thedefendants “to inform the persons andbodies to whom they have offered theirgeneric medicinal products and, inparticular, to those acquiring the saidmedicinal products, that, while the patentis in force, such medicinal products mustnot be prescribed or dispensed fortreating pain, and to refrain fromsupplying the aforementioned medicinalproducts if there is reasonable indicia thattheir pregabalin medicinal products will bedirectly used for treating pain”.

A welcome step forwardThe ruling from the Barcelona Court ofAppeal in the pregabalin case is awelcome wake-up call for genericcompanies. The cornerstone of thisdecision lies in the Court not beingsatisfied with the merely “passive”behaviour of the defendants, such as“carving out” the patented indication andrefraining from promoting their products

for the infringing use. On the contrary, thedefendants were ordered to adoptproactive measures, i.e. informingpurchasers that they must not prescribeand dispense the medicine for theinfringing “off label” use. Most importantly,the Court ordered the defendants torefrain from supplying the drugs whenthere are reasonable signs of infringinguses taking place. Thus, Spanish genericcompanies will now bear the responsibilityof reasonably ensuring that their clientsavoid any off-label uses. What remains tobe seen, however, is how the exact reachand implications of these measures willplay out in practice.

Whilst the ruling may not provide anairtight protection for patent holders

(which would call for amendments to theregulatory framework and increasedinvolvement of the public authorities) it isstill a key first step in the enforcement of“second use claims”, and will probably setthe tone for future decisions.

Key Issues:n Barcelona Court of Appeal finds

that the mere “carve-out” of apatent-protected indication doesnot necessarily excludeinfringement of a “second medicaluse” patent.

n When circumstances dictate that ageneric product risks beingprescribed and dispensed “offlabel” for a patented indication,generic companies must nowproactively ensure that their clientsdo not use medicines for suchinfringing indications, and evenaltogether stop supplying theproduct to them if there are“reasonable indicia” of ongoingoff-label use.

Brief Description:The Barcelona Court of Appeal hashanded down a decision finding thatgeneric companies had infringed a“second medical use patent” in spiteof “carving out” the patentedindication. This provides a welcomedevelopment in the enforcement ofthese types of patents.

IntroductionThe Spanish procedural rules governingthe grant of preliminary injunctions (“PI”)are the result of a finely balancedcompromise between two rights. On theone hand, the right of the applicant torequest the adoption of urgent measureswhen the time required to pursue mainproceedings (normally more than a year)could prevent or hinder the protectiongranted by a prospective favourablejudgment. On the other hand, thedefendant has the right to be heardbefore any PI is ordered.

This compromise crystallises into thefollowing general rule, among others: thedefendant has to be heard in an oralhearing before the Court decides on thePI application. Overlooking said generalrule will be acceptable only in exceptionalcircumstances, where the adoption of thePI is so urgent that the time reasonablyrequired to summon the defendant to anoral hearing could jeopardise the efficacyof the PI. However, the urgency of thePI should not have been created by themisconduct or negligence of the applicant(for instance, by having failed to resort tothe Court earlier if this had been feasible).

Likewise, Spanish procedural rulesprovide that a PI will not be granted whenthe intention is to alter de facto situationsconsented to by the applicant for alengthy period, unless it can properlyjustify why said injunctions were notapplied for previously.

The Ruling handed down byBarcelona Commercial Courtno 1 on 22 February 2016(the Sisvel vs Anchor case)All these considerations are at the heartof what led Barcelona CommercialCourt no.1 to refuse to grant ex partea PI requested by Sisvel International,S.A. (“Sisvel”) seeking to prevent Archos,S.A. (“Archos”) from exhibiting a series ofallegedly patent-infringing electronicdevices at the Mobile World Congress(“MWC”) held in Barcelona between22 and 25 February 2016.

The facts of the case may be summarisedas follows: Sisvel is the owner of twopatents essential for the implementation ofthe GPRS and UMTS telecommunicationstandards. Archos started sellingelectronic devices implementing the GPRS

and UMTS standards in 2013 and, sincethen, Sisvel and Archos have beenunsuccessfully trying to negotiate theterms of a FRAND licence. On 18 July2015, the Court of Justice of theEuropean Union (“CJEU”) handed down aJudgment clarifying the circumstancesunder which the owner of an essentialpatent may enforce its patent at Courtagainst third parties with whom it isengaged in negotiations aimed at thegranting of a FRAND licence. Sisvel andAnchor continued negotiating until11 February 2016, when Sisvel sent aletter to Anchor unilaterally terminating thenegotiations. On 19 February 2016 (onlyeight days later), and three days before theMWC was due to open its doors on22 February, Sisvel filed a PI applicationseeking, among other measures, a Courtorder preventing Anchor from exhibiting,offering, promoting and advertising morethan thirty electronic devices implementingthe GPRS and UMTS standards.

Due to the imminent opening of theMWC, Sisvel applied for this PI ex parte.Sisvel argued that hearing Anchor firstwould mean in practice that the PI couldnot be ordered until the MWC had already


7


Barcelona: ”I am sorry, you were too late” – Barcelonacommercial court refuses to grant an ex parte injunctionapplied for shortly before the opening of the mobileworld congressIn a decision handed down on 22 February 2016, Barcelona Commercial Court no.1refused to proceed ex parte with a preliminary injunction application aimed atpreventing the exhibition of more than thirty electronic devices during theMobile World Congress held in Barcelona last February. The Court was of the viewthat the applicant, who had filed its application three days ahead of the opening of thecongress, could and should have knocked on its door earlier so as to allow thedefendant to be heard first.



8

ended, so the only way to guarantee theefficacy of the PI was ordering it ex parte.

Moreover, Sisvel claimed that, althoughAnchor had been marketing “infringing”electronic devices for three years, Sisvelcould not prevent this situation until theCJEU set, according to its Judgment of18 July 2015, the conditions under whichessential patents could be enforced atCourt against non-licensees. Sisvel’scase was that the requested PI was nottrying to alter a de facto situationvoluntarily consented to by Sisvel over alengthy period, but that said period hadbeen determined by the timing of theCJEU Judgment.

The Court findingsBarcelona Commercial Court no 1 did notshare Sisvel’s points of view and refusedto proceed with the application ex parte ina decision handed down on 22 February2016. The Court found that a PI could notbe ordered, let alone ex parte, becauseAnchor had already been marketing itsdevices for three years. Even thoughSisvel could be right to say that it couldnot have enforced its patents before theCJEU clarified the legal situation, sevenmonths had elapsed between theissuance of the CJEU Judgment and thedate of the PI application. Sisvel did notresort to the Courts during this period.

The Court also found that the recentdiscontinuance of the negotiations wasnot a legitimate reason to apply for a PI solate, preventing de facto any possibility ofhearing Archos before the MWC opened.The Court stated that Sisvel had failed topersuade the Court why negotiations hadto be abandoned on 11 February 2016,and not any earlier. In this regard, the

Ruling states that “the justification of thereasons why the preliminary injunctionwas not applied for until now cannot beleft to the discretion of the applicant, theycannot be subjective. They must beobjective and external.”

The Court also considered the “essential”condition of the enforced patents andfound that, taking into account theremedies that Sisvel could seek in a mainaction (i.e. the payment of a FRANDroyalty), ordering a PI prohibiting theexhibition of Anchor’s electronic deviceswould not have been proportionate either.

All in all, the Court hinted that, bearing inmind the aggressiveness of the requestedPI, it could not be ruled out that Sisvelcould be misusing this proceduralmechanism as a way to exert pressure onArchos in the context of the FRANDlicence negotiations.

What can we learn fromthis Ruling?One of the main lessons taught by thiscase is that the owners of IP rights whofear that their rights may be infringed intrade fairs taking place in Spain cannotwait until the last minute to make thedecision to apply for a PI. Unlike inother jurisdictions, Spanish Courts arekeen to hear the defendant first. So, ifat all feasible, applicants should resortto the Court well ahead of the openingof the trade fair (typically, three monthsin advance).


9


Key Issues:n Situations where IP rights could be

infringed during trade fairs are verycommon. Preliminary injunctionsaimed at preventing infringement ofsaid IP rights are typically availablein Spain.

n Unlike in other jurisdictions,in Spain the general rule dictatesthat defendants must be heardbefore the Court orders apreliminary injunction.

n Ideally, a preliminary injunctionshould be applied for well ahead ofthe opening of the trade fair, so as toallow the holding of an oral hearingbefore the Court makes a decision.

n Applications ex parte broughtunnecessarily late may end upbeing rejected immediately, ashappened in the case heard byBarcelona Commercial Court no 1a few days before the opening ofthe 2016 edition of the MobileWorld Congress.

n Spanish Courts will hardly everorder preliminary injunctions aimedat altering an IP right infringementsituation consented to by theapplicant over a lengthy period.

n Prospects of success of anapplication for a preliminaryinjunction based on an essentialpatent are rather limited in Spain.

Clifford Chance – Rank #1 (10 years in a row)“Miquel Montañá is a prolific patent litigator who is in highdemand on the innovator side of major pharmaceuticals cases.Sources describe him as “thorough, analytical, rigorous andcomprehensive, “adding: “He is persistent up to the end of acase and doesn’t drop things.”

“Montserrat López-Bellosta focuses on IP litigation as part ofher broader disputes practice. She has significant experienceadvising life sciences companies on patent litigation.”

Strenghts (Quotes mainly from clients):“The lawyers are business-oriented, cost-conscious and usedto dealing with new issues in law. They are creative and areable to look at the end goal and find a way to reach it.”

“I especially like the lawyers’ knowledge of our organisation andtheir availability to help with urgent matters.”

Chambers & Partners 2016: Europe Guide: Spain – Intellectual Property



10

A trade mark holder seeking to rely uponthe doctrine of secondary meaning willhave already satisfied the Italian Patentsand Trade marks Office (“IPTO”) and willgenerally seek to rely on the generalpresumption that registered trade marksshould be treated as valid.

An applicant bringing an action to obtainannulment (who will often also be on thereceiving end of an action forinfringement) will argue that the burdenof proof should remain with the trademark holder.

Frequently, market research is presentedas evidence of consumer perceptions, butits usefulness may be called into question.Such evidence is commonly admitted bythe courts, although the courts are notbound to follow the conclusions theresearch draws – not least because thequestions posed are often fraught withbias. As a result, the courts will onoccasion simply ignore such evidence.

The doctrine of secondarymeaningUnder Italian law, a trade mark is capableof registration where it has the essentialfunction of acting as a source indicator,and it has distinctiveness.

Under Article 13(2) of the Italian Code ofIndustrial Property (“ICIP”), “A trade markthat prior to the application for registrationhas following its use acquireddistinctiveness may be the subject ofregistration”. Moreover, under Article13(3), “A trade mark may not be declaredor considered null and void if prior to thesubmission of the application for

annulment or the defence of annulmentthe trade mark in question has followingits use acquired distinctiveness”.

This rule represents an exception to thegeneral prohibition on registering trademarks that are merely descriptive or thatlack distinctiveness. It also represents adefence to an application for annulment ofa registered trade mark.

The rule was laid down in national lawincorporating the European Directive89/104/EEC, but was already a principleaffirmed in Italian case law.

It is based upon the doctrine ofsecondary meaning: a trade mark thatoriginally lacked distinctiveness as aresult of non-specificity, meredescriptiveness or lack of originality maylater acquire distinctiveness. In doing so,it acquires a secondary, additionalmeaning by acting as a source indicator,identifying a business.

The doctrine enables developments in amark’s distinctiveness to be betterexploited. It comes into play where atrade mark that was merely descriptive,and thus essentially void, subsequentlybecomes distinctive through use.

Typically, this will be the result of large,targeted investments in marketing, whichmay lead to a radical transformation inthe distinctiveness with which a mark isperceived within its market.

The “Rotoloni Regina” case

“Rotoloni” is a trade mark registered aloneand in combination with other words, in

particular with the word “Regina” in class16 by a well-known Italian business. It hasbeen used for toilet paper and kitchentowels for many years.

In Italian, the word rotoloni is the pluralform of a word for a large roll of toiletpaper, kitchen towel or the like. Thus, it isa purely descriptive mark and wouldordinarily be unsuitable for registration asa trade mark. However, the proprietor ofRotoloni made great efforts to ensure thatit acquired distinctiveness, includingthrough a large advertising campaign withthe slogan, i Rotoloni Regina nonfiniscono mai! (“Rotoloni Regina neverend”). This was so that it might benefitfrom the doctrine of secondary meaning.Ultimately, the mark was registered by theIPTO for all products in class 16.

The validity of the Rotoloni trade markwas, however, contested by acompetitor after its registration. Both theCourt of Milan (in 2008) and the Court ofAppeal of Milan (in 2011) found that thedoctrine of secondary meaning did nothold, and declared the trade markinvalid for lack of distinctiveness inrelation to some products.

The trade mark holder filed marketresearch which indicated that 51% ofinterviewees treated the word “Rotoloni”as a source indicator, and not as ageneral term for toilet paper or kitchentowel. Alternatively, the Court of Appealfound that the research could be insteadbe interpreted to show that nearly half ofthe interviewees saw the word asa general term.

Milan: The doctrine of secondary meaning and theburden of proof – Italy’s Supreme Court rules onadmissibility of market researchSome of the most contentious issues in Intellectual Property law in Italy surroundwhere the burden of proof lies in trade mark nullity actions which involve the doctrineof secondary meaning, and the evidence that is admissible in such actions.


11


Moreover, the interviewees who perceived“Rotoloni” to be a source indicator did notdo so when the word was isolated, but onlywhen used in combination with Regina,which had been registered separately.

The trade mark holder appealed thedecision of the Court of Appeal to theSupreme Court, which may only rule onquestions of law and never on questionsof fact.

The Supreme Court’s decision n.7738/2016

The Supreme Court found that the fact thatthe mark had acquired distinctiveness inuse with another, separately registered,mark, did not in and of itself exclude theapplication of the doctrine of secondarymeaning. The decision is in line with caselaw of the Court of Justice of the EuropeanUnion (“CJEU”).

Distinctiveness may be acquired throughuse that is as part of anotherregistered trade mark, or in

conjunction with such a mark (CJEUC-215/2014).

However, the IPTO’s conclusion that thetrade mark was suitable for registration(itself an application of the doctrine ofsecondary meaning) did not bind thecourts in any ruling on an applicationfrom a third party seeking to annul thetrade mark.

The Supreme Court ruled that theapplicant bears the burden of proofwhere claiming that a trade mark shouldbe annulled, pursuant to Article 121 ofthe ICIP. In those terms, proof simplytakes the form of showing that the markis descriptive in nature. It then falls tothe trade mark holder to prove thesecondary meaning.

Evidence presented should not address thedegree of investment in advertising andmarketing, but rather the fame acquired bythe mark that has led to a change in thepublic’s perception of the mark.

The Supreme Court also found that theCourt of Appeal had correctly placed theburden of proof on the trade markproprietor. It is open to the litigants toproduce all such evidence they considerappropriate. The Supreme Courtpartially overturned the Court ofAppeal’s decision and ordered a retrial inthe same court.

With respect to market research inparticular, the Supreme Court ruled,“Precisely in the sector in question, [suchevidence] may turn out to be necessary,in order to offer adequate proof of thesemantic shift in consumers’ perceptionof the term”. Where expert evidence ofthis kind is produced by the trade markproprietor, then “either that report isconsidered reliable and theconsequences of the same ensue; or thereverse, in which case it must bepermissible for the court itself to order itsown expert evidence.”

The European position onmarket research evidenceThe CJEU has already made clear that EUlaw does not preclude national courts frommaking use of market research inreaching a conclusion as to whetherdistinctiveness has been acquired.

Proof of acquired distinctiveness was thecentral issue in the Chiemsee cases thatthe CJEU decided in 1999 (Cases C-108and 109/97). In that judgment the CJEUestablished the “all circumstances” rule(considering factors such as marketshare, amount of investments andintensity of the use) as regards theevidence to be taken into account inorder to show that a sign was recognisedas a trade mark by the relevant public, orat least a significant portion of that public.

More recently, in the Oberbank cases2014 (Cases C-217 and 218/13) theCJEU found that a domestic court couldorder market research if – and only if – itencounters “particular difficulties” inassessing distinctiveness. If marketresearch is ordered, it is for the court todetermine what percentage it deemspersuasive, although its decision onwhether distinctiveness has beenacquired should not be based only on theoutcome of the research.

Conclusion and practical suggestions

The Rotoloni Regina case may lead thecourts to order their own expert marketresearch more frequently and maymotivate the trade mark holders toinstruct their own experts.

This could be very important inanchoring the courts’ assessment ofpublic perceptions to objective,evidence-led tests.

In doing so, they will naturally have to relyupon suitably qualified and resourcedfirms, so that they may be confident thatthe research is properly conducted, in amanner that avoids leading questions andselects appropriate samples.

In our experience, research conductedthrough one-on-one interviews aregenerally more effective and accuratethan telephone surveys.

Ensuring the sample reflects the relevantmarket (in terms of their backgrounds,education, habits and spending power)will also be a major consideration.

In other words, the court must be able toconstruct what “typical consumer” itwishes to test, and the sample must thenbe assembled in a manner that issufficiently diverse.



12

Key Issues:n In an application for trade mark

annulment, a proprietor seeking torely upon the doctrine of secondarymeaning against a claim of a lackof distinctiveness must prove thatdistinctiveness has been acquired.

n The burden of proof falls on theproprietor to show that the trademark has acquire such renown tochange the public’s perception ofthe mark as a source indicator.

n No forms of evidence may beexcluded a priori, includingmarket re-search.

n Where the trade mark proprietorprovides market research, the courtmay order research of its own.

“Fabio Guastadisegni heads the firm’s litigation practice in Italy.Insolvency disputes, arbitration and commercial litigation formpart of his diverse workload. He is lauded for being “straight tothe point” and “very knowledgeable and precise.”

Chambers & Partners 2016: Global Guide – Dispute Resolution

Strenghts (Quotes mainly from clients):“The lawyers are very committed. They understand what wewant and make sure the documents are how we want them.”

“I have high respect for the people I worked with at CliffordChance. The lawyers are very good.”

Chambers & Partners 2016: Europe Guide – Dispute Resolution


13


OverviewAccording to data published by thePRC Ministry of Commerce(“MOFCOM”), online sales in Chinareached RMB20.8 trillion last year,of which sales on the pure“e-tailing” side reachedRMB3.88 trillion.

The regulatory landscapeCurrently, multiple government authoritiesjointly regulate e-commerce activities inChina. These include:

n the Cyber Administration ofChina (“CAC”);

n MOFCOM;

n the PRC Ministry of Industry andInformation Technology (“MIIT”);

n the State Administration for Industryand Commerce (“SIAC”);

n the General Administration of QualitySupervision Inspection andQuarantine (“AQSIQ”); and

n the General Administration ofCustoms (“Customs”).

Of these bodies, the CAC is first andforemost responsible for supervisinginformation and content publishedonline and coordinating with othergovernmental authorities in enforcinginternet related policies.

SAIC and MOFCOM focus on regulatingonline trading and the e-commerce marketwhile AQSIQ and Customs supervisecross-border e-commerce activities.

These PRC governmental authorities havebetween them issued dozens of noticesand rules regulating different types ofe-commerce activities, although the PRCcentral government has not yet issued aunified national law governing e-commerce.

The major notices and rules include:

n “Administration Measure for APPInformation Service” issued by CACin 2016;

n “Administrative Measure for OnlineAdvertisements” issued by SAICin 2016;

n “Administrative Measure for OnlineTrading” issued by SAIC in 2014;

n “Third Party E-commerce PlatformService Guidelines” issued byMOFCOM in 2011; and

n “Online Trading Service Guidelines”issued by MOFCOM in 2009.

It is anticipated that the PRC governmentwill issue more rules to intensify theregulation of e-commerce activities, withonline anti-counterfeiting, cyber securityand the special regulation of healthcareindustry thought to be top of the PRCgovernment’s work programme.

Online anti-counterfeitingThe Chinese online market is known to beflooded with counterfeit and infringingproducts, something which causes brandowners significant worries.

Enforcement authorities find it is difficult tocrack down on online infringing acts inChina partly because of a lack of

resources and capacity but also becausethe absence of physical premises makesit difficult to track down offenders.

One way for brand owners to curbinfringing acts online is to work with thirdparty online platform providers or internetservice providers, who are required by thePRC laws and regulations to:

n close or suspend any infringingwebpage upon receipt of an infringingwarning notice from a right owner; and

n review the qualifications andinformation of online traders whenthey trade on a platform.

Hong Kong: Security, data and counterfeits – recentdevelopments in China e-commerceThe China e-commerce market has been booming in recent years. According torecent data, online sales reached RMB20.8 trillion last year. The success ofe-commerce brings its own challenges, including regulation by multiple authorities,a new cyber security law and the ever-present danger of counterfeiting. This articlelooks at recent developments and what lies ahead in this fast-growing economy.

Key Issues:n E-commerce in China is

characterised by a multiplicity ofregulators and laws.

n There is no single national lawgoverning e-commerce.

n Third party online platformproviders have an obligation toclose or suspend websites thatinfringe intellectual property rightsupon receipt of a complaint.

n Companies which collect“important information” in China willbe required by the draft PRC CyberSecurity Law to store importantdata, including personalinformation, exclusively in China orgo through a national securityreview if they would like to transferdata overseas.



14

If the website operator fails to close orsuspend an infringing webpage uponrequest, the online platform provider orinternet service provider becomes jointlyliable for the infringing act.

A greater sanctionIn practice, however, the passivesuspension of an infringing webpage maynot effectively prevent the repetition ofonline infringing acts. The PRC courtshowever, seem more willing to deal withthe issue, as shown in E-land InternationalFashion (Shanghai) Co v Zhejian TaobaoNetwork Co Ltd and Du Guofa (E-land).

E-land, a clothing company, owned theexclusive rights to use certain registeredtrademarks in respect of its clothingproducts. Du Guofa was an individualwho sold clothing through Taobao, anonline commerce platform similar to eBay.The clothing sold by Du Guofa featuredthe registered marks over which E-landhad exclusive rights.

Taobao deemed that it had satisfied itsobligation by deleting the relevantinfringing information and webpage uponE-Land’s notice.

The court held that E-land had filed ahuge number of complaints to Taobao forinfringing/counterfeit products sold on“www.taobao.com” since 2006.

During the period September to November2009, E-land had filed 131, 261 complaintsand 117,861 infringing links were deleted.From 23 February 2010 to 12 April 2010,E-Land filed 153,277 complaints and124,742 links were deleted.

The Court ruled that an internet serviceprovider will be jointly liable for theinfringement if it fails to take appropriate

steps to prevent the infringement. Thenumber of complaints filed showed thatTaobao was aware that merely deleting theinfringing materials was not an effectiveway of dealing with the infringement andhad failed to take adequate steps to do so.

The Court found that Taobao should havetaken more effective and preventivemeasures rather than simply passivelydeleting infringing webpage upon E-land’snotice. The decision will encourageintellectual property owners to take amore proactive approach to notify andwork with online platform providers orinternet service providers to deal withonline counterfeit issues.

Following the decision, the PRCgovernment seems to be taking greaternotice of the seriousness of onlinecounterfeiting issues and is planning tocrack down on counterfeits in areas suchas public health and safety, including foodand drugs, medical devices and cosmetics.

It will also extend its regulation toemerging online platforms and socialmedia, such as apps, the cloud, andmessaging services such as WeChat andmicro-blogging services such as Weibo.

Cyber securityThe PRC government published a draft ofthe PRC Cyber Security Law in July 2015,aiming at protecting network and onlinedata security in China. The draft law ispresently undergoing a second round ofreview in the National People’s Congress.

The draft law has caught wide publicattention, as it provides that the operatorsof so-called “key information facilities”1

must store important data, includingpersonal information, exclusively in China.

If, for legitimate business needs, the dataneeds to be transferred overseas, the datamust go through a national security review.

Although the draft law has defined “keyinformation facilities”, it is still ambiguousabout whether a network or particular setof data qualifies as “key informationfacilities” and is therefore subject to therestriction. This may open the way for theenforcement authorities to issue their owninterpretations in individual cases.

The above requirement may raiseconcerns about cross-border data sharingand the free flow of data, and have animpact on current business models ofcompanies which conduct business andcollect online data within China.

These companies may need to considerwhere and how to store and process suchdata, where the servers of relevant networksshould be located, and how to transfer andshare data within group companies.

Healthcare sectorIt is worth noting that in addition to thegeneral regulations, the healthcare sectoris subject to special regulation by the ChinaFood and Drug Administration (“CFDA”).

A pharmaceutical company which wantsto sell or distribute pharmaceuticalproducts or medical devices online inChina is required to obtain the followingspecial approvals or permits.

n If a company proposes to provideonline information that relates topharmaceutical products and/ormedical devices, it should first obtainthe Online Drug I Medical DeviceInformation Service Certificate fromthe provincial-level FDA.

1 “Key information facilities” are defined by the draft law to include (1) basic information networks providing services such as public communications, radio and televisionbroadcasting; (2) important industries, such as energy, transportation, water resources and finance; (3) public service areas such as power supply, water supply, gassupply, medical service and social security; (4) military networks; (5) government affairs networks for state organs at or above city level; and (6) networks and systemsowned or managed by network service providers with numerous users.


15


n Further, if a company proposes to sellor distribute pharmaceutical productsand/or medical devices online (or itproposes to operate an onlineplatform at which pharmaceuticalproducts and/or medical devicescould be sold), the company shouldobtain the Online Drug Trading ServiceCertificate from the provincial FDA, inaddition to the Online Drug I MedicalDevice Information Service Certificatementioned above.

There is an exception for onlinedirect-to-consumer sales. As a pilotprogramme, the CFDA had been allowingdirect sales of pharmaceutical productsand medical devices to consumers overthird party platforms since 2013.

Recently, however, the CFDA suspendedthis practice because of concern aboutthe risks associated with the safety orquality of pharmaceutical products andmedical devices sold online.

The CFDA appears not to have reacheda final view about how best to regulatee-tailing in the healthcare sector.Pharmaceutical companies are eagerlywaiting for the government to lift the banin this respect.

“Ho Ling attracts praise forher wealth of experience andcommitment to her clients.She heads both theAsia-Pacific intellectualproperty group and theChina litigation and disputeresolution practice. She hasparticular expertise in trademark infringement and unfaircompetition, as well asglobal portfolio management.Work highlights includemanaging the brand portfolioof Aston Martin Lagonda.”

Chambers & Partners 2016:Global Guide – IntellectualProperty (International Firms)



16

Hong Kong: Clifford Chance triumphs over Chinesetrade mark squatter seeking to capitalise onClifford Chance’s Chinese trade nameOn 22 July 2016, the Beijing Intellectual Property Court (“BIPC”) upheld a decisionof the PRC Trademark Review and Adjudication Board (“TRAB”) disallowing a trademark squatter in China from registering the trade mark “高伟绅Angel Kiss”, whichcopied Clifford Chance’s Chinese trade name (高伟绅).

Trade mark squatting remains a seriousissue in China. This poses a challenge tomany international corporations whichfind that third parties have preemptivelyapplied for or registered marks in Chinafor internationally well-known brands.In recent years, it is noted that many ofthese pirated marks have been filed by“professional” trade mark squatters,such as trade mark agencies and otherpractitioners.

Having assisted many of our clients indealing with trade mark squatting in thepast, Clifford Chance found itself facingthe very same issue in 2012 when itbecame aware of a pirated applicationfor the mark “高伟绅Angel Kiss”(“Conflicting Mark”) in Class 45,copying Clifford Chance’s Chinese tradename “高伟绅” in its entirety.

The services covered by the ConflictingMark are, crucially, related to legalservices such as litigation services,intellectual property consultation anddomain name registration. The Chineseapplicant is a trade mark agency by thename of Guangxi Nanning Wan WangE-Commerce Service Limited (“WW”),which not only lodged the piratedapplication but, as later revealed to us,also operated a trade mark agencywebsite at www.gaoweishen.com.This copies Clifford Chance’s Chinesetrade name, taking unfair advantage ofClifford Chance’s reputation in China inthe legal services industry.

In February 2012, Clifford Chance filed anopposition against the Conflicting Mark

and won in the first instance at theChina Trade Mark Office (“CTMO”).Following this, WW lodged appeals tothe Trade Mark Review and AdjudicationBoard (“TRAB”) and, later, to the BeijingIntellectual Property Court (“BIPC”), all ofwhich were dismissed. We have set outbelow a summary of the findings from thedecisions and the Court judgment.

The CTMO has, in the first instance,found bad faith on the part of WW on thebasis that it has a record of copyinginternational brands as demonstrated byits bad faith filing portfolio (includingwell-known marks such as“Siemons”/”Sina” in Chinese). It also heldthat Clifford Chance’s Chinese tradename and mark “高伟绅” has alreadyattained a certain level of reputation in thelegal services industry in China throughextensive use. Use and registration of theConflicting Mark would therefore likelycause confusion to the relevant public

and lead to adverse effects to society. TheConflicting Mark has thus been dismissedbased on Article 10(8) of the Trade MarkLaw (2014) which prohibits registrationsthat “harm social morality or practices orthat have other adverse effects”.

WW appealed to the TRAB in early 2015but the TRAB was in favour of CliffordChance’s affirmation that the CTMO’sfinding that WW’s history of applying forfamous brands was sufficient to supportthe bad faith claim.

WW relentlessly appealed again to theBIPC in December 2015. The BIPCupheld the TRAB’s finding that a bad faithfiling portfolio strongly indicates the badfaith nature of the Conflicting Mark. Inparticular, the Court criticized WW’sbehavior saying that it, being a trade markagent in the same legal services industryas Clifford Chance, should be well awareof Clifford Chance’s reputation and that


17


trade mark squatting behavior (includingWW’s copying of Clifford Chance’s trademark in its website) can hardly beregarded as in good faith.

ConclusionClifford Chance has so far prevailed at alllevels of the opposition. Unfortunately,WW has recently filed yet another appeal,this time to the Beijing Higher People’sCourt. Clifford Chance will continue tocontest the appeal, which does notappear to have any real merits.

Historically, the PRC trade markauthorities have always adhered to the“first-to-file” principle and are hesitant toissue findings of bad faith to dismissfilings, unless concrete evidence (such asa prior relationship) are produced. Thesignificance of the favourable decisionsfor Clifford Chance outlined above is thatit appears authorities may now beprepared to infer bad faith where aproprietor has past bad faith filingportfolios. This demonstrates a moreliberal approach taken by the trade markauthorities in combating trade mark

squatting, in-line with the legislative intentof the recently enacted Trade Mark Lawwhich now contains provisions specificallylaying down a broad principle of goodfaith, together with more stringentprovisions regulating trade mark agencies’practice. It is hoped that the more liberalapproach taken by the authorities willdiscourage further trade mark squatting inChina, particularly by trade mark agenciesand practitioners.

Key Issues:n In 2012, Clifford Chance brought

claims against a trade mark agencyin China for trade mark squatting.

n Judgments indicate that PRC trademark authorities may now morestrongly consider a history of badfaith filings when making decisionson trade mark squatting.

n This more liberal approach takenby trade mark authorities willhopefully discourage further trademark squatting in China.

Strenghts (Quotes mainly from clients):“They are able to provide a much-needed global perspectiveon the strategic positions of management and the IP team.”

Notable practitioners “Ho Ling is head of the firm’s Asia Pacific IP group, andspearheads the firm’s IP work in the region. Sources commend“her aggressiveness and dedication to defending the positionof her clients,” and “her availability for her clients at all times.”In a highlight, she advised Langham Hotels Group regardingthe protection and enforcement of its trade mark portfolio.”

Chambers & Partners 2016: Asia/Pacific Guide – IntellectualProperty (International Firms)



18

In order to achieve the intended reform, theDSM is built upon three pillars: (i) grantingbetter access for consumers andbusinesses to digital goods and servicesacross Europe; (ii) creating the rightconditions and a level playing field fordigital networks and innovative services toflourish; and (iii) focussing on maximisingthe growth potential of the digital economy.

A year after its introduction, the ECpublished a package of regulatoryproposals on audiovisual content,e-commerce and platform strategy. Nowthe DSM strategy finally seems to betaking shape. This article examines thefollowing recent developments in the EC’sDSM strategy: (1) the revised Audiovisual

Media Services Directive; (2) newe-commerce rules; and (3) the EC’sapproach to online platforms.

1. Audiovisual MediaServices DirectiveThe first proposal seeks to revise thecurrent version of the EU’s AudiovisualMedia Services Directive (“AVMSD”)in order for it to address the challengesthat come with the dramatic increase inmedia consumption since the AVMSD’sadoption in 2010. The regime includeschanges aimed at strengthening thepromotion of European cultural diversity,ensuring the independence of audiovisualregulators and offering more flexibility to

broadcasters over advertising. Onceadopted by the EC, the legislativeproposal will be sent to the EuropeanParliament and to the Council. In short,the revised AVMSD contains the followingkey proposals:

i. Promotion of European works –The revised AVMSD will require thaton-demand providers ensure theircatalogues contain at least a 20%share of European content.

ii. The Country of origin principle(“COO”) – under this principle,content providers need only complywith the broadcasting rules of theMember State under whosejurisdiction they fall, as opposed to therules of each country in which thecontent is transmitted, maintained andreinforced. The AVMSD will simplifythe legal framework for determiningwhich Member State has jurisdiction.

iii. Advertising, product placementand sponsorship – Increasedflexibility for advertising rules, such asproduct placement and the spread ofcommercials across viewing timeswhilst at the same time implementingrules intended to protect minors fromcommercials relating to high-fat foodand alcoholic beverages.

iv. Protection of minors – The revisedAVMSD provides for an alignment ofthe standards of protection for TVbroadcasting and on-demandservices and will encourage MemberStates to develop codes of conductfor content that may be inappropriatefor minors.

Amsterdam: The EC’s Digital Single Market strategy –recent developmentsIn May of last year, the European Commission (“EC”) unveiled a detailed plan to createa Digital Single Market (“DSM”) in Europe. The intended purpose of such DSM is toopen up digital opportunities for people and businesses and includes a set of targetedactions originally intended to be delivered by this year.


19


v. Independent regulators – Greaterindependence for nationalaudiovisual regulators by establishingthat they should be legally andfunctionally independent from boththe industry and the government,with the requirement that theyoperate transparently and can beheld accountable.

2. New e-commerce rulesAs part of the DSM strategy the ECpresented a three-pronged plan to booste-commerce by tackling geo-blocking,making cross-border parcel delivery moreaffordable and efficient and promotingcustomer trust through better protectionand enforcement.

i. Preventing geo-blocking – The ECis proposing legislation to ensure thatconsumers seeking to buy productsand services in another EU country,be it online or in person, are notdiscriminated against in terms ofaccess to prices, sales or paymentconditions, unless this is objectivelyjustified for reasons such as VAT orcertain public interest legal provisions.

ii. Making cross-border parceldelivery more affordable andefficient – The proposal aims to

increase price transparency andregulatory oversight of cross-borderparcel delivery services so thatconsumers and retailers can benefitfrom affordable deliveries andconvenient return options even to andfrom peripheral regions.

iii. Increasing consumer trust ine-commerce – The proposal aims togive more power to nationalauthorities to enforce consumer rights,including being able to check andtake-down websites which geo-blockconsumers or offer after-salesconditions not respecting EU rules(e.g. withdrawal rights).

3. Platform strategyFinally, the EC presented its proposedapproach to “online platforms”, definedon the basis of five key characteristics.Starting from the observation that only4% of the largest online platforms hailsfrom the EU, the EC presented four keyprinciples for the development ofplatforms in the EU:

i. Simplifying, modernising andlightening existing regulations in orderto provide a level playing field for (oldand new) online platform businesses.

ii. Maintaining, for the time being, theliability exemption for intermediariesbut ensuring their acting responsiblywith additional regulation.

iii. Fostering trust, transparency, andinnovation in online platforms, byaddressing concerns over the sharingand use of user data, and therelations between online platformsand suppliers.

iv. Promoting open platform modelsas opposed to “closedplatform ecosystems”.

It would seem that consumers stand tobenefit the most from the first wave ofreforms, whilst the overall benefits forbusinesses are limited. However, reformpackages on the horizon such asproposals on copyright, telecom regulationand VAT may present more concreteadvantages for businesses in Europe.

Key Issues:n Revisions to the EU’s Audiovisual

Media Services Directive aim toaddress the new challenges facedby a dramatic rise in mediaconsumption since 2010

n New e-commerce rules are alsobeing introduced with the aim ofdealing with geo-blocking,cross-border parcel delivery andcustomer trust in e-commerce

n The EC has presented four keyprinciples for the development ofonline platforms in the EU whichshould benefit consumers

n Future reform packagesshould present concrete benefitsto businesses.

Strenghts (Quotes mainly from clients):“We like to work with Clifford Chance for its lawyers’ ability tolisten, ask the right questions, get all of the relevant informationand build up a very good defence in order to win the case.”

“The lawyers have handled the case very well. They are veryresponsive, knowledgeable and proactive, andcommunicate clearly.”

Chambers & Partners 2016: Europe Guide – Dispute Resolution



20

IntroductionA recent reform of the Polish IndustrialProperty Law (“IPL”) brings substantialchanges to trade mark registrationproceedings in Poland. Until recently,when processing a trade mark application,the Polish Patent Office conducted anex officio examination involving bothabsolute and relative grounds for a refusal.On 15 April 2016, the procedure waschanged so that only absolute groundswere considered. This means that thePolish Patent Office no longer examineswhether a trade mark is identical or similarto existing trade marks or whether sucha trade mark infringes third party rights.Consequently, it is now the trade markholder who must monitor pendingapplications and file an opposition in orderto prevent a registration.

Previous procedureUnder the previous procedure, thePolish Patent Office published a trademark application without delay threemonths after the application date.From the publication date, third partiescould familiarise themselves with thetrade mark described in the applicationand, if necessary, file observations atthe Polish Patent Office providingcircumstances that, according to theparty, should prevent this registration.The Polish Patent Office was notbound by these observations and theentity that filed them did not becomea party to the proceedings concerningthe registration of the trade mark.Since the Polish Patent Officeconducted an ex officio examinationon whether or not there were any

potentially conflicting trade marks withhigher priority, the observations werea rarely used remedy.

Holders of existing trade marks couldoppose a trade mark application afterit had been granted protection bysubmitting an opposition to thePolish Patent Office. Such an oppositionwould need to be submitted withinsix months of the trade mark beingpublished in the Patent Office’sOfficial Gazette.

New procedureAs of 15 April 2016, the Polish PatentOffice examines only the absolutegrounds for a refusal. Relative groundsfor a refusal will only be examined if anopposition is lodged within three monthsof the announcement of the filing of theapplication. As such, the opposition maynow be filed prior to the registration ofthe trade mark.

The Polish trade mark registration system has recently undergone quite substantialchanges. These long-awaited changes aim to simplify and expedite trade markapplications before the Polish Patent Office.

Warsaw: Key changes in trade markregistration proceedings

Key Issues:n On 15 April 2016, the Polish

Patent Office stoppedconducting ex officio examinationsof relative grounds in trademark applications.

n It is now the holder of a trade markwho needs to monitor pendingapplications and file an oppositionin order to prevent registration.

n Letters of consent, a new regimeunder the Polish Industrial PropertyLaw, allow the registration ofsimilar trade marks, if the owner ofthe existing trade mark agrees to itin writing.


21


If the opposition is considered justified,the Polish Patent Office will refuse togrant a protection right for the trademark. The parties to the oppositionproceedings may apply for a re-examination, which will be conducted bythe relevant dispute resolution board ofthe Polish Patent Office.

ImplicationsThe new procedure is similar to the EUtrade mark registration procedure beforethe European Union Intellectual PropertyOffice. However, the impact of thechanges remains to be seen. On the onehand, the amendments simplify theexamination process for applicants andshorten the registration process (if noopposition is filed). On the other hand, thenew procedure requires more effort fromholders of registered trade marks, whonow need to monitor new applications byother parties and if necessary opposethem. The absence of an oppositioncould result in a contentious trade markbeing granted protection.

Letters of consentThe recent reform also introduces“letters of consent”, a new regime underthe IPL that could be very useful,especially for companies with a complexstructure dealing with the co-existenceof similar trade marks. Until now, even

companies from the same capital groupwere unable to consent to an applicationfor a trade mark that was similar to onealready registered and the Polish PatentOffice was obliged to refuse registration.Under the new provisions, it is nowpossible to register a similar or evenidentical trade mark if the owner of theexisting registered trade mark agrees tothat in writing.

The introduction of letters of consentmay raise some questions, for exampleon the effects of a potential withdrawal ofconsent or whether such consent maybe transferred to a third party togetherwith the trade mark. We expect thatthese questions will be addressed bylegal scholars and Polish Patent Office’spractice in the near future.

“Practice head Bartosz Krużewski is widely recognised as oneof the top litigators in Poland. He handles domestic andinternational cases, and also acts as an arbitrator. Clientsenthuse that “he is extremely reliable and a strong expert incontentious public tender cases.”

Chambers & Partners 2016: Global Guide –Dispute Resolution, Band 1

Strenghts (Quotes mainly from clients):“It’s extremely impressive how the lawyers can work 24/7.It’s a very productive team that can go through huge volumeof documents and provide a relevant solution.”

“Very focused on customers’ needs.”

Chambers & Partners 2016: Europe Guide –Dispute Resolution, Band 1



22

IntroductionThe national patent offices of the VisegradGroup (the Czech Republic, Slovakia,Hungary and Poland) (“V4”) establishedan intergovernmental organization forcooperation in the field of patents,which should simplify access to patentprotection for citizens of the V4. TheVisegrad Patent Institute (“VPI”) startedoperating on 1 July 2016.

The agreement on the VPI, which wasconcluded on 26 February 2015 inBratislava (“Agreement”), becameeffective in December 2015, The VPI wasestablished in particular to facilitate acheaper and more accessibleinternational patent applicationprocedure under the World IntellectualProperty Organization (“WIPO”) for thecitizens of the V4. The VPI procedure willbe conducted in the languages of theV4 countries (Czech, Slovak, Hungarianand Polish), and the Czech IndustrialProperty Office is of the opinion that thecosts of patent protection will besignificantly reduced.

Relationship between theVPI and the PatentCooperation TreatyThe Patent Cooperation Treaty (“PCT”)under WIPO foresees the transfer ofcertain powers from the WIPO to regionalor national authorities. Accordingly,the VPI has obtained the status of an

International Searching Authority.The objective of an international search isto discover any technical literature, calledprior art, that is relevant for thedetermination of whether the claimedinvention is novel and involves aninventive step. The VPI has also obtainedthe status of an International PreliminaryExamining Authority. The objective of aninternational preliminary examination is theformulation of a preliminary andnon-binding opinion on the questions asto whether a claimed invention appears tobe novel, involves an inventive step andmay be industrially applicable. Theoutcome of these searches will now notonly be available in English but, under theVPI, also in the national languages of theV4. The Agreement itself makes referenceto the PCT as its basis and, in case of aconflict between the Agreement and thePCT, the provisions of the PCT apply.

Structure of the VPIThe VPI is governed by an AdministrativeBoard, represented by a Director andadministered by a Secretariat. TheDirector is responsible to theAdministrative Board for organising theactivities of the VPI and of the Secretariat.The Director is appointed by theAdministrative Board for a fixed term, notexceeding four years, and is obliged tocomply with the Administrative Board’sinstructions. The Administrative Boardcomprises the representatives andalternate representatives of the parties to

the Agreement; every party is entitled toappoint one representative and onealternate representative.

Activities of the VPIAs an International Searching Authority,the VPI subjects each patent applicationto an international search. The goal of thesearch is to assess whether the inventionis novel and whether it involves aninventive step. The search is made basedon the application, with due regard to thedescription and drawings. The results ofthe search are reflected in an internationalsearch report, which is subsequentlyprovided to the applicant (in his or herlanguage) and to the International Bureauof the WIPO.

Prague: The Visegrad Patent Institute – a SimplerAccess to Patent ProtectionThe Visegrad Patent Institute (“VPI”) is an intergovernmental organization establishedfor cooperation in the field of patents, which started operating on 1 July 2016. It wasestablished by the national patent offices of the Visegrad Group under WIPO’s PatentCooperation Treaty (“PCT”) as an international searching and preliminary examiningauthority. The VPI is intended to support the development and efficiency of thePCT system.

Key Issues:n The VPI started operating on 1 July

2016 and will serve PCT patentapplicants from the Czech Republic,Slovakia, Hungary and Poland.

n The VPI obtained the status of anInternational Searching Authorityand an International PreliminaryExamining Authority.

n Applicants will be able tocommunicate with the VPI inCzech, Slovak, Hungarian or Polish.

n Subject to compliance with certainconditions, 40% of the patentresearch costs can be refunded.


23


An International Preliminary Examinationtakes place only in cases where theapplicant requests it. The role of theauthority is to conduct a preliminaryexamination of the patentability of theinvention, for example whether theinvention appears to be novel, whetherit involves an inventive step andwhether it is industrially applicable.One of the requirements of the PCT isthat the request is submitted in aprescribed language; following theestablishment of the VPI, this is nowpossible in the languages of theV4 countries. An appraisal of the criteriais summarized in the report, which istransmitted to the applicant and to theInternational Bureau of the WIPO.

One of the noticeable benefits of theprocedure under the VPI is that if thesearch has already been completed by anational authority for national patentpurposes, an applicant can request arefund of the fees paid to the VPI forresearch, provided that the result of theresearch is useable. However, whether arefund claim may be accepted dependson the individual researcher. If the usageof the prior research is possible, 40 % ofthe costs (EUR 750) will be refunded.

ConclusionOverall, the VPI will bring two mainbenefits to applicants, the possibility ofcommunicating and conferring with thepatent authority in the parties’ national

languages, and the possible reduction ofthe patent application costs.

It is expected that the services providedby the VPI will be used by applicants inthe V4 countries and that one of the maingoals of the VPI – increasing the amountof patent applications within the VisegradGroup countries – will be accomplished.

It should be noted that the Agreementand the services of the VPI are not onlylimited to the V4 countries; any otherEuropean country can become a party tothe Agreement and extend the scope ofthe VPI. Despite the name and the factthat the VPI has been established by theV4 countries, de iure it is not an instituteunder the Visegrad cooperation.

London/Düsseldorf: The Impact of Brexit on IP Rights



24

Patent rightsAs the UK is a member of the EuropeanPatent Convention, which is not linked toEU Member State status, the status quoof European patents should not besignificantly impacted by Brexit. TheEuropean Patent, which is a bundle ofnational patents accessed through a centralapplication process, will still be availablethrough the European Patent Office.

However, the supplementary protectioncertificate (“SPC”) regime may be affectedby Brexit. SPCs allow certain, limited typesof inventions, primarily those from thepharmaceutical sector, to extend the termof patent protection beyond the usual20 years. The rationale for this is that aproduct protected by these patents oftenhas a very long approval process, whichruns during the term of patent protectionand effectively reduces the period of timeduring which the product is protected bythe patent. SPCs are governed by an EUregulation that may not automatically applyafter Brexit. If this is the case, and toensure the protection granted by SPCspost-Brexit, the UK could implement anational SPC-equivalent right or opt intothe European SPC regime if it becomesa member of the European EconomicArea (“EEA”).

The largest and perhaps most criticalimpact that Brexit will have on patentsis in the implementation of the UnifiedPatent Court (“UPC”). The UPC arguablyconstitutes the biggest reform in thehistory of European patent law. Under thecurrent UPC Agreement, ratification fromthe UK is required before the UPC cancome into effect. In addition, one ofthe three central division courts wassupposed to be based in London. It isunclear whether it is even possible for theUK to ratify the agreement following Brexitand participate in the system after itceases to be an EU Member State.The politically charged nature of UPCAgreement negotiations only furthercomplicates the matter. Further delayswith respect to the UPC appear inevitableas the plethora of issues is sorted out.

Registered trade marks andregistered designsRegistered trade marks and registereddesigns are the most harmonised formsof IP rights across the EU, but couldundergo significant changes post-Brexit.

It is possible that the UK will no longer beparty to the EU regulations that governand implement the European Trade Mark(“EUTM”). These unitary rights

automatically cover all EU MemberStates. Without any new, implementedagreements between the UK and the EU,existing EUTMs and RegisteredCommunity Designs would no longer beapplicable in the UK. IP holders may stillbe able to obtain protection for trademarks and designs through the nationalUK Intellectual Property Office, but theimpact on existing registrations willdepend on the arrangements agreedupon by the EU and the UK.

There has been much discussion on thevarious options for extending theprotection which EUTM holders currentlyhave in the UK. Potential scenarios couldinvolve some system whereby EUTMs areconverted into national rights or simplyinvolve the UK unilaterally recognising andprotecting EUTMs despite not being anEU Member State. The likelihood is thatthe UK will still protect EUTM holders’rights post-Brexit although there may bedifficulty in the how the legal mechanics ofthis position are determined.

EUTM holders who primarily use thosemarks in the UK may find their EUTMs atrisk of becoming vulnerable to revocationfor non-use in the EU following Brexit. It isunclear whether EUTMs that undergo any

The United Kingdom’s vote to leave the European Union has led to a period of legaluncertainty with the future relationship between the UK and EU not yet being defined.Intellectual property law is not safe from the immediate effects of Brexit and also facesan uncertain future. It is anticipated that for at least the next two years, the UK willremain a full member of the EU and during this time no changes to existing IPlegislation are expected. It is also expected that the UK will continue to implementnew directives as they come into force during this period. As no Member State haswithdrawn from the EU before, the impact on IP rights cannot be precisely predictedand depends on the outcome of negotiations and agreements made between theUK and the EU.

form of conversion into UK rights, but arenot currently in use in the UK, will be ableto continue to rely on previous useelsewhere in the EU.

Another issue could arise if the UK doesnot maintain access to the single market.Trade mark owners may be able to restrictthe trade of goods between the UK andEEA Member States as placing goods onthe market would no longer “exhaust” thetrade mark owners’ intellectual propertyrights. At this time, trade mark ownerscannot typically prevent the selling of theirproducts if they have been lawfully offeredon the single market previously. If the UKdid not become an EEA member or reachan agreement with the EU to access thesingle market on equivalent terms as anEEA member, then placing the productson the market in an EEA Member Statewould not exhaust the trade mark rightsin the UK.

Finally, the practical management of IPportfolios is open to change. IP ownersdomiciled in the EU or under EEAjurisdiction do not need professionalrepresentation in proceedings before theEuropean Intellectual Property Office. Incontrast, parties based outside the EU orunder EEA jurisdiction must beprofessionally represented for mostproceedings. The UK’s approach toprofessional representation is yet anotheraspect to be considered.

Copyright and databaserightsCopyright is a national right, but it hasbeen heavily influenced by internationaltreaties and European legislation. TheUK’s membership in the EU significantlyshaped and influenced the UK Copyright,Design and Patents Act of 1988. It isunlikely that the UK will make significantchanges to its copyright law. Even theaspects influenced by EU legislation arelikely to remain, at least in the short tomid-term following Brexit.

In terms of database rights, the UK willneed specific legislation for UK nationaldatabase rights if the EU right no longerapplies. Database rights are a uniqueEuropean intellectual property right that isonly available to EEA nationals. The statusis unlikely to be affected if membership inthe EEA is negotiated.

Licence agreementsBrexit will have a more practical effect onlicence agreements. Future licenceagreements will have to take into accountthe political and geographical changesresulting from the UK leaving the EU.Current licence agreements, prior rightsagreements and coexistence agreementsoften make the assumption that theEuropean Union is a single territory andthat the licence is granted for all countriesin the EU. It is recommended to reviewany relevant licence agreement that has

been concluded and check whether it issufficiently clear, accurately indicating IPusage rights in territories. In addition,clauses such as those regardingpayments or the right to handle litigationmight need to be adjusted accordingly.

Concluding remarksThe impact of Brexit on intellectualproperty rights depends on negotiationsbetween the UK and the EU. The closerthe relationship between the EU and theUK post-Brexit (for example if theNorwegian EEA model is adopted) theless scope there will be for impact onintellectual property rights. If the UKbreaks away from the EU completely,there is a greater scope for the EU andUK approach to various intellectualproperty rights to diverge.

Rights holders should work hand in handwith their legal advisors to monitordevelopments over the coming weeks andmonths to assess the impact on intellectualproperty rights. In the meantime, rightsholders can start to think about theirreliance on unitary rights and theirapproach to licensing, so that they will beprepared to act once the nature of thepost-Brexit relationship becomes clearer.

Key Issues:n Brexit has created a lot of uncertainty

in the UK and across the EU

n While the EPC remains unaffectedby EU membership, the UPC stillrequires ratification from the UKand may be delayed even further

n The EU Trade Mark system couldundergo significant changespost-Brexit


25


“Claudia Milbradt of Clifford Chance is best known for patentlitigation, most notably regarding infringement, counterfeitsand licensing.”

Chambers & Partners 2016: Global Guide, Germany –Intellectual Property: Patent Litigation



26

Giulia Abbagnale

Rais Amils

Petra Belova

Anna Blest

Alexander Cappel

Marcin Czarnecki

Luciano Di Via

Fabio Guastadisegni

Krzysztof Hajdamowicz

Ling Ho

Nicolas Hohn-Hein

Nadia Jagusiak

Michal Jasek

James Jeffries-Chung

Matthieu Juglar

Alvin Khodabaks

Sunny Kumar

Diego de Lammerville

Emmanuelle Levy

Montserrat Lopez-Bellosta

Vanessa Marsland

Sonia Masco

Andrei Mikes

Claudia Milbradt

Miquel Montana

Josep Montefusco

Sara van Mourik

Florian Reiling

Monica Riva

Konrad Rominkiewicz

Ashwin van Rooijen

Shila Ruff

Ludvik Ruzicka

Manel Santiliari

Anja Schwarz

Sybille Sculy-Logotheti

Leigh Smith

Eugenia Tonello

Tina Wu

AcknowledgementsWe would like to thank the following people for their contributions to this publication:


27


Mihaela Mindru Counsel, Bucharest

T: +40 21 6666 137E: mihaela.mindru

@cliffordchance.com

Romania

Torsten Syrbe Partner, Moscow

T: +7 49 5725 6400 E: torsten.syrbe

@cliffordchance.com

Russia

Thomas Vinje Partner, Brussels

T: +32 2 533 5929E: thomas.vinje

@cliffordchance.com

Belgium

Ling Ho Partner, Hong Kong

T: +852 2826 3479E: ling.ho

@cliffordchance.com

China

Diego de Lammerville Partner, Paris

T: +31 1 4405 2448E: diego.delammerville

@cliffordchance.com

France

Florian Reiling Senior Associate, Düsseldorf

T: +49 211 4355 5964E: florian.reiling

@cliffordchance.com

Emmanuelle Levy Senior Associate, Paris

T: +31 1 4405 2439E: emmanuelle.levy

@cliffordchance.com

Claudia Milbradt Partner, Düsseldorf

T: +49 211 4355 5962E: claudia.milbradt

@cliffordchance.com

Germany

Fabio Guastadisegni Partner, Milan

T: +39 02 8063 4353E: fabio.guastadisegni

@cliffordchance.com

Italy

Krzysztof Hajdamowicz Counsel, Warsaw

T: +48 22 429 9620E: krzysztof.hajdamowicz

@cliffordchance.com

Poland

Monica Riva Counsel, Milan

T: +39 02 8063 4383E: monica.riva

@cliffordchance.com

Hidehiko Suzuki Partner, Tokyo

T: +81 3 5561 6662E: hidehiko.suzuki

@cliffordchance.com

Japan

Contacts



28

Alvin Khodabaks Partner, Amsterdam

T: +31 20 711 9374E: alvin.khodabaks

@cliffordchance.com

The Netherlands

Daryl Fairbairn Counsel, New York

T: +1 212 878 4960E: daryl.fairbairn

@cliffordchance.com

US

Miquel Montañá Partner, Barcelona

T: +34 93 344 2223E: miquel.montana

@cliffordchance.com

Spain

Montserrat López-Bellosta Of Counsel, Barcelona

T: +34 93 344 2255E: montserrat.lopez-bellosta

@cliffordchance.com

Vanessa Marsland Partner, London

T: +44 20 7006 4503E: vanessa.marsland

@cliffordchance.com

UK

Contacts


29


Notes



30

Notes


31


*Clifford Chance’s offices include a second office in London at 4 Coleman Street, London EC2R 5JJ. **Linda Widyati and Partners in association with Clifford Chance. Clifford Chance has a best friends relationship with Redcliffe Partners in Ukraine.

Abu DhabiClifford Chance9th Floor, Al Sila TowerAbu Dhabi Global Market SquarePO Box 26492Abu DhabiUnited Arab EmiratesT +971 2 613 2300F +971 2 613 2400

AmsterdamClifford ChanceDroogbak 1A 1013 GE AmsterdamPO Box 2511000 AG AmsterdamThe Netherlands T +31 20 7119 000F +31 20 7119 999

Bangkok Clifford ChanceSindhorn Building Tower 321st Floor 130-132 Wireless Road Pathumwan Bangkok 10330ThailandT +66 2 401 8800F +66 2 401 8801

Barcelona Clifford ChanceAv. Diagonal 68208034 Barcelona Spain T +34 93 344 22 00F +34 93 344 22 22

Beijing Clifford Chance33/F, China World Office Building 1No. 1 Jianguomenwai DajieBeijing 100004ChinaT +86 10 6505 9018F +86 10 6505 9028

BrusselsClifford ChanceAvenue Louise 65Box 2, 1050 BrusselsBelgium T +32 2 533 5911F +32 2 533 5959

BucharestClifford Chance BadeaExcelsior Center 28-30 Academiei Street12th Floor, Sector 1,Bucharest, 010016RomaniaT +40 21 66 66 100F +40 21 66 66 111

CasablancaClifford Chance169 boulevard Hassan 1er20000 CasablancaMorrocoT +212 520 132 080F +212 520 132 079

DohaClifford ChanceSuite B, 30th floor, Tornado TowerAl Funduq Street, West BayP.O. Box 32110Doha, Qatar T +974 4 491 7040F +974 4 491 7050

Dubai Clifford ChanceLevel 15Burj DamanDubai International Financial CentreP.O. Box 9380Dubai, United Arab EmiratesT +971 4 503 2600F +971 4 503 2800

DüsseldorfClifford Chance Königsallee 5940215 DüsseldorfGermanyT +49 211 43 55-0 F +49 211 43 55-5600

FrankfurtClifford Chance Mainzer Landstraße 4660325 Frankfurt am Main GermanyT +49 69 71 99-01F +49 69 71 99-4000

Hong KongClifford Chance27th FloorJardine House One Connaught PlaceHong KongT +852 2825 8888F +852 2825 8800

IstanbulClifford ChanceKanyon Ofis Binasi Kat. 10Büyükdere Cad. No. 18534394 Levent, IstanbulTurkeyT +90 212 339 0000F +90 212 339 0099

Jakarta**Linda Widyati & PartnersDBS Bank TowerCiputra World One 28th FloorJl. Prof. Dr. Satrio Kav 3-5Jakarta 12940T +62 21 2988 8300F +62 21 2988 8310

London Clifford Chance10 Upper Bank Street London E14 5JJUnited KingdomT +44 20 7006 1000F +44 20 7006 5555

Luxembourg Clifford Chance10 boulevard G.D. Charlotte B.P. 1147 L-1011 Luxembourg T +352 48 50 50 1F +352 48 13 85

MadridClifford ChancePaseo de la Castellana 11028046 Madrid SpainT +34 91 590 75 00F +34 91 590 75 75

MilanClifford ChancePiazzetta M. Bossi, 320121 Milan ItalyT +39 02 806 341F +39 02 806 34200

MoscowClifford ChanceUl. Gasheka 6125047 MoscowRussiaT +7 495 258 5050 F +7 495 258 5051

Munich Clifford Chance Theresienstraße 4-680333 Munich GermanyT +49 89 216 32-0F +49 89 216 32-8600

New York Clifford Chance31 West 52nd Street New York NY 10019-6131USA T +1 212 878 8000F +1 212 878 8375

Paris Clifford Chance1 Rue d’AstorgCS 6005875377 Paris Cedex 08FranceT +33 1 44 05 52 52F +33 1 44 05 52 00

PerthClifford ChanceLevel 7190 St Georges TerracePerth WA 6000AustraliaT +618 9262 5555F +618 9262 5522

Prague Clifford ChanceJungamannova PlazaJungamannova 24110 00 Prague 1 Czech RepublicT +420 222 555 222F +420 222 555 000

RiyadhClifford ChanceBuilding 15, The Business GateKing Khalid International Airport RoadCordoba District, Riyadh, KSA.P.O.Box: 3515, Riyadh 11481,Kingdom of Saudi ArabiaT +966 11 481 9700F +966 11 481 9701

RomeClifford ChanceVia Di Villa Sacchetti, 1100197 RomeItalyT +39 06 422 911F +39 06 422 91200

São PauloClifford Chance Rua Funchal 418 15º-andar04551-060 São Paulo-SPBrazilT +55 11 3019 6000F +55 11 3019 6001

SeoulClifford Chance21st Floor, Ferrum Tower19, Eulji-ro 5-gil, Jung-guSeoul 100-210KoreaT +82 2 6353 8100F +82 2 6353 8101

Shanghai Clifford Chance40th Floor, Bund Centre 222 Yan An East RoadShanghai 200002China T +86 21 2320 7288F +86 21 2320 7256

Singapore Clifford ChanceMarina Bay Financial Centre25th Floor, Tower 312 Marina BoulevardSingapore 018982T +65 6410 2200F +65 6410 2288

SydneyClifford ChanceLevel 16, No. 1 O’Connell StreetSydney NSW 2000AustraliaT +612 8922 8000F +612 8922 8088

Tokyo Clifford ChanceAkasaka Tameike Tower7th Floor2-17-7, AkasakaMinato-kuTokyo 107-0052JapanT +81 3 5561 6600F +81 3 5561 6699

WarsawClifford Chance Norway House ul.Lwowska 1900-660 WarsawPoland T +48 22 627 11 77F +48 22 627 14 66

Washington, D.C.Clifford Chance2001 K Street NWWashington, DC 20006 – 1001USA T +1 202 912 5000F +1 202 912 6000

Worldwide contact information

www.cliffordchance.comAbu Dhabi Amsterdam Bangkok Barcelona Beijing Brussels Bucharest Casablanca Doha Dubai Düsseldorf Frankfurt Hong Kong Istanbul Jakarta* London Luxembourg MadridMilan Moscow Munich New York Paris Perth Prague Riyadh Rome São Paulo Seoul Shanghai Singapore Sydney Tokyo Warsaw Washington, D.C.*Linda Widyati and Partners in association with Clifford Chance. Clifford Chance has a best friends relationship with Redcliffe Partners in Ukraine.

J201608300049540

© Clifford Chance, 2016.Clifford Chance, Königsallee 59, 40215 Du�sseldorf, Germany

Clifford Chance Deutschland LLP is a limited liability partnership with registered officeat 10 Upper Bank Street, London E14 5JJ, registered in England and Wales underOC393460. A branch office of the firm is registered in the Partnership Register atFrankfurt am Main Local Court under PR 2189.

Regulatory information pursuant to Sec. 5 TMG and 2, 3 DL-InfoV:www.cliffordchance.com/deuregulatory

This publication does not necessarily deal with every important topicor cover every aspect of the topics with which it deals. It is notdesigned to provide legal or other advice. If you would like to knowmore about the subjects covered in this publication or our services,please contact the authors or your usual contact at Clifford Chance.

Global Intellectual Property Newsletter - Clifford Chance · “off-label” use of ... IP...

Documents

Transcript of Global Intellectual Property Newsletter - Clifford Chance · “off-label” use of ... IP...