19 May 2008

IPEG blog moved!

We moved our IPEG blog, join us on our new blogsite. If you like to subscribe to new posts, just go to our new blog (at www.ipeg.com/blog) and click on "subscribe to our blog" in the top bar.

We hope to see you soon in our new outfit!

18 May 2008

INTA, ‘Ghost’ Brands and Trademarks

INTA, the International Trademark Association is having its Annual Conference in Berlin, starting today. All kind of interesting subjects that brand owners keep happily busy are being dealt with in workshops, break out sessions and the like.

Subjects like "How to Combat Counterfeit", "Taxes and Trademarks" and of course the CTM (Community Trademark) are on the agenda. A more frivolous subject "Why We Do What We Do?" is being offered, as the program describes it "Why it is that trademark professionals seem to enjoy their jobs in ways that practitioners in many other areas of the legal profession do not?" (never realized that we as IP consultants and patent merchant bankers do not enjoy our jobs).

So what's missing in the INTA conference that should be on the agenda, prominently, I would say?
How unused, or ghost or "dormant" brands (and the legal part of it, trademarks) could be sold and subsequently acquired by "revival" companies and prepare them for a second life. Selling trademarks out of your existing portfolios is strangely enough an anathema in trademark world.
The only subject at the INTA conference that comes close is a subject with a rather lawyerly title "Europe, possible threats Arising from Dormant Marks". Must have been drafted by lawyers, which is not surprising, as (trademark) lawyers are trained to look at risks, not at opportunities. Hence the title oppugning the viability of a practice of active selling and buying of trademarks.)
Coincidentally, at breakfast, preparing for this blog, I read in this morning's International Herald Tribune an article (from New York Times Magazine, by Rob Walker, "How ‘ghost' brands can come back to life" on "brand reanimation". A Chicago company, River West Brands seems to have found a niche market by acquiring those ‘dormant' or ‘ghost' brands and using this "brand equity" to take a fresh approach to what companies seem to struggle with: what to do with brands and trademarks that are being abandoned in the big corporate environments. Examples enough: BRIM for decaffeinated coffee from (former) General Foods (now Altria), VOLKSWAGEN BEETLE, and close to (my) home: POSTBANK a well known trademark for a post office bank part of ING Bank, which was abandoned sometime ago.
Why is there not a more active divestiture practice in trademark world? We dealt with that in an earlier blog. Last year IPEG tried to raise interest in the subject at the Annual INTA conference. Not to much avail as it seems, as this year INTA does not cover the subject at all except to see it as a "threat", not an opportunity.
Who takes up the glove and starts the discussion in the trademark community?
To be continued

04 May 2008

Standard setting Rambus FTC - EU implications?

Standard setting is a big issue in patent circles these days, not only in the US, but equally in Europe. One wonders therefore what effect, if any, the decision of April 22 of the US Court of Appeals for the District of Columbia Circuit in “Rambus Inc. v. Federal Trade Commission D.C. Cir.”, No. 07-1086) has for Europe.

The Court of Appeals found that the Federal Trade Commission (“FTC”) failed to demonstrate that Rambus Inc. engaged in conduct that was exclusionary "under settled principles of antitrust law". Setting aside the commission's orders restricting Rambus' ability to set licensing fees for its patents related to DRAM technologies, the court said that the (FTC) Commission failed to sustain its allegation of monopolization. The Commission's conclusion that Rambus deceived the standard setting organization in order to avoid limits on its patent licensing fees- enabling the monopolist to charge higher prices than it otherwise would have charged -"would not in itself constitute monopolization," the court held. The court also addressed whether there was substantial evidence that Rambus engaged in deceptive conduct at all, and it expressed "serious concerns" about the sufficiency of the evidence presented by complaint counsel.

From a very first reaction to the Rambus decision it seems that what really bothered the court of appeals was the facts, not the law. It can be inferred from the decision that the courts of appeal believed that the rules and disclosure requirements of the standard-setting body were not very clear or strong. The FTC found in its decision that those provisions were sufficiently clear, and the court should not have second-guessed the FTC on those factual findings. Under U.S. law, the CoA should uphold an agency's factual findings unless there is no substantial evidence supporting the findings. And the court of appeals does not say there is no substantial evidence. But, reading between the lines of the last section of the decision, I think the court disagreed with the FTC's factual findings. Since it could not properly reverse the FTC on that basis, we tend to think it did so on the law instead. If this quick reading is correct, the real lesson of the decision for standard setting operations in the future is that such bodies need to be very clear and detailed about the extent of disclosure and sharing that they are requiring of their members.

A second reaction is that it seems that the Rambus decision is limited because of a combination of the FTC's decision basis and its litigation strategy. As the court explained, the FTC found that Rambus's bad behavior prevented the standard setting body either from adopting a different standard or from extracting a RAND commitment. Since the FTC did not conclusively find the first alternative to be the case , the court of appeals required that the latter alternative must be sufficient to justify the FTC's decision. But, as the court noted, the law is not entirely favorable on the latter alternative as an antitrust violation. Knowing that, the FTC could have found that the latter alternative was, even if not an antitrust violation, nevertheless an "unfair" trade practice. But the FTC chose to rely solely on the antitrust theory and did not appeal on the unfair trade practice theory. So, it seems to me that the possibility of a finding of an "unfair" trade practice in this case, or at least in a similar setting in the future, is still quite possible, either in this case or in a future case. The court opinion suggests that the evidence in this case may not be strong enough to support an unfair trade practice conclusion. But it does not preclude the FTC from making such a determination. And it certainly could do so in other future cases as well. Consequently, the Rambus decision does not fully insulate companies against such allegations in the future.

With thanks to James B. Altman, Miller & Chevalier, Washington

11 April 2008

The Biogen test revisited

When is a product claim in a patent insufficient? That is the core question in the judgement of April 10 by the UK Court of Appeal in Generics (UK) Limited v Lundbeck A/S in an appeal against the High Court Mr Justice Kitchin’s judgement in 2007.

The key issue is the extent of the monopoly given by a product claim in a patent. Kitchin J had extended the application of the Biogen test for patent insufficiency such that the scope of the monopoly for a product claim could be severely reduced. Lundbeck’s successful appeal, therefore, has significant commercial implications for the pharmaceutical industry as a whole.

The Facts
Three generic pharmaceutical manufacturers sought to revoke’s Lundbeck patent EP (UK) 0,347,066 for an anti depressant drug escitalopram (a single enantiomer of citalopram), claiming pharmaceutical compositions containing escitalopram, and a method of preparing escitalopram. Lundbeck’s patent expired several years ago. Citalopram was marketed as a racemic mixture and Lundbeck found a way to isolate the (+) enantiomer, discovered that this was the effective enantiomer and applied for the patent. The claims in issue were for the (+) enantiomer itself and for a pharmaceutical composition containing it.

The First Instance
The Patents Court concluded that, as was generally believed, a single enantiomer[1]of a known chemical compound was not patentable. Interesting to the pharmaceutical industry, increasingly reliant upon life cycle management, is why precisely this should be the case. The High Court found these claims were invalid for insufficiency. Kitchin J reasoned that since the existence of the (+) enantiomer was known as part of the citalopram mixture and isolation of the separate enantiomers was known to be desirable, Lundbeck’s invention lay solely in the discovery of a way to make it. He concluded that this should not entitle Lundbeck to a monopoly of every way of making it i.e. a product per se claim. He applied the test set out by Lord Hoffmann in the House of Lords case, Biogen v Medeva[2], that for “sufficiency” a disclosure should enable the full extent of the claim and not merely a single example of something within the claim.

The Court of Appeal Decision
The Court unanimously upheld Lundbeck’s appeal and found that the product claims were not invalid for insufficiency. A product claim is sufficiently enabled if the specification discloses one way of making it. In the words of Lord Hoffmann: “in an ordinary product claim, the product is the invention. It is sufficiently enabled if the specification and common general knowledge enables the skilled person to make it. One method is enough.” Lord Hoffmann confirmed that the Biogen test applied to a hybrid or “product-by-process” claim such as that considered by the House of Lords in the Biogen case itself. The test could not be extended to an ordinary product claim in which the product is not defined by a class of processes of manufacture or is not simply a member of a large class. An inventor who finds a way to make a new product is entitled to claim the product however made and however used, even if the desirability of making it was known. The Court of Appeal also upheld Kitchin J in holding that the product claims were novel and inventive.

This decision may in practice put an end to the “Biogen Insufficiency” doctrine, and brings the UK patent courts in line with most other patent jurisdictions worldwide as well as the EPO jurisprudence. As to patent validity it may open up a new trend into a more patentee friendly disposition.

[1] Advances in industrial chemical processes have made it economical for pharmaceutical manufacturers to take drugs that were originally marketed in racemic form and market the individual enantiomers, each of which may have unique properties. For some drugs, such as zopiclone, only one enantiomer (eszopiclone) is active; the FDA has allowed such once-generic drugs to be patented and marketed under another name. In other cases, such as ibuprofen, it is not economically feasible to isolate a single enantiomer from a racemic mixture or to synthesize just the active one, and therefore a racemic mixture is marketed, with an essentially doubled recommended dose (see www.answers.com) . See for background chemistry: “Patents and enantiomers: Generics v Lundbeck” by Brian Whitehead, Stuart Jackson, and Richard Kempner in Journal of Intellectual Property Law & Practice, 2007, Vol. 2, No. 12, p. 808-810

[2] In Biogen v Medeva [1997] R.P.C. 1, Biogen's patent for recombinant DNA coding for a polypeptide having hepatitis B virus (HBV) antigen specificity was held by the House of Lords in 1996 to be insufficiently enabled by its specification, not because of any inability for the described invention to deliver all the promised results, but because the same claimed results could be produced by different means which owe nothing to the teaching of the patent or any principle it disclosed.
Thanks to Simmons & Simmons (London), Howrey (London), Remco de Ranitz (The Hague)

09 April 2008

Dutch court refers Round Up patent dispute to ECJ

In a long standing battle[1] between Monsanto, Argentina and importers of soymeal, the District Court The Hague gave its (interim) judgment on March 19, 2008, referring the case to the ECJ for their interpretation of articles 8 and 9 of the 1998 Council Directive 98/44/EG relating to the protection of biotechnological inventions (Biotechnology Directive).

The facts
Monsanto is the owner of EP patent 0546090, relating to enzymes which, if expressed by a plant, confer resistance to a herbicide. In 1995 Monsanto introduced "Roundup Ready soy plants" soya meal that have had a copy of a gene from the bacterium, Agrobacterium sp. strain CP4, inserted into its genome that allows the transgenic plant to survive after being sprayed by Monsanto's this non-selective herbicide, Roundup. Glyphosate, the active ingredient in Roundup, kills conventional soy plants. The bacterial gene is EPSP (5-enolpyruvyl shikimic acid-3-phosphate) synthase. Regular Soy also has a version of this gene, but the regular version is sensitive to glyphosate, while the CP4 version is not.

The glyphosate works by inhibiting a certain enzyme called EPSPS which is present in the plant. This enzyme is important for the production of aromatic amino acids, these being necessary for the plant growth. The patent describes a class of EPSPS enzymes which are not sensitive to glyphosate, the so-called Class II enzymes. Glyphosate blocks the active centre of Class I EPSPS enzymes whereby the production of aromatic amino acids is disturbed. The plant cannot produce any or at least cannot produce sufficient proteins without these aromatic amino acids and therefore dies off. Plants possessing Class II EPSPS enzymes do not have this problem so they survive the use of glyphosate whilst the weeds around them die.

The Case
The defendants purchased soy beans in Argentina (where there was no patent protection), the beans being grown from plants carrying one of the genes disclosed in the patent. The beans, grown in Argentina, were imported by the defendants into the Netherlands as processed soy meal. Monsanto has no patent protection in Argentina. The patent claims are directed to isolated DNA sequences, a recombinant DNA molecule, a method of producing genetically transformed plants which are tolerant of certain herbicides and a herbicide-tolerant plant cell comprising the previously mentioned DNA molecule. Monsanto maintained that importation of the soybeans infringed its European (Netherlands) patent, the defendants disputed that.
Core of the matter is, briefly, whether according to art.9 of the Directive, the scope of preotection for a biotechnology invention is determined on the basis of the generic information having been incorporated in the product and therein exercising its function. Consequently, protection to the plants may not be extended to the derived products in which the genetic information is residual and does not "exercise its (genetic) function".
Question is whether articles 8 and 9 of the Biotech Directive, implemented in Dutch law as article 53a Dutch Patent Act ("Rijksoctrooiwet", or "ROW") merely explicate the scope of protection awarded to biotechnology inventions, or actually limit the scope of these inventions to actively functioning DNA (sequences).
The Hague District Court judgment
In its interim judgment, the court firstly held that those claims covering an isolated DNA sequence constitute no infringement as the DNA is not present as isolated matter but is incorporated in the soy meal. The court rejected Monsanto’s reasoning that the DNA sequence has been taken out of its natural environment – the bacterial chromosome - and has been encoded in the DNA of the soy plant and, for this reason, the DNA in the soy meal should be regarded as an isolated DNA sequence, or, that it contains this. The average person skilled in the art would understand the term isolated DNA as DNA that has been retrieved from the cell (core) of an organism for further treatment in a manner as is usual in the relevant profession.
Secondly the court rejected an interpretation that the soy meal can be regarded as a “directly obtained product” by application of the claimed methods according to some other claims of the Monsanto patent. Although soy plant and soy bean have been directly obtained by the patented method, the beans are subsequently then separated and subsequently “crushed” the beans are separated, in a number of treatment stages, and worked into different components, finally ending up as soy meal.

Thirdly, the court considered whether any product claims were infringed, which claims relate to a DNA sequence or a DNA molecule. The dispute focused around the question whether the DNA sequence which encodes for the synthesis of a Class II EPSPS enzyme was found in the samples taken from the cargo imported by defendants. Parties then argued on whether any of the DNA sequence was present in the soy meal, so imported. The importers, supported by the Government of Argentina, argued that the DNA sequence was at best present “in fragmented form”, caused by heating during the “crushing process” of the beans.
The major question then became whether, if any of the claims relating to genetic material are infringed, as Monsanto alleges, the soy meal contains at least genomic fragments of the Round Up Ready-DNA sequence?
Questions referred to the ECJ
The court reviewed this question in relation to articles 8 and 9 of the 1998 Council Directive 98/44/EG on the protection of biotechnological inventions “the Biotechnology Directive”).

The first question of the court to the ECJ relates to the scope of art. 9 of the Biotechnology Directive, especially when DNA “performs its function”. Monsanto argued that the DNA found in the imported soybeans may not then and there “performs its function”, but in order to invoke patent protection under art. 9 of the Biotechnology Directive it would suffice for the DNA-sequence to - at any particular moment - have performed its function in the soya plant or that the DNA could again “perform its function” after having been isolated from the soy meal and inserted into living material again. The court wants to know from the ECJ whether this interpretation of Monsanto is correct.

The second question relates to the question whether or not the protection of a biological material by the Biotechnology Directive prevents the national Dutch Patent Act (art 53) from protecting next and above the protection conferred upon DNA as such ("classic product protection")irrespective of whether the DNA sequence it “performs its function”.

The third question is whether in answering the second question it makes any difference that the patent has been granted before the Directive came into force (artt. 27 and 30 TRIPS).

[1] See for an interesting resume of the history of Monsanto’s battle against Argentina patent policy, “Harvesting Royalties for Sowing Dissent? Monsanto's Campaign against Argentina's Patent Policy”, www.grain.org, and http://snipurl.com/23xnu
(with thanks to Erik de Vos, Nauta Dutilh, Amsterdam)

27 March 2008

Is there an After-Life for Pan European Injunctions?

I am sure you remember the good old days when Dutch patent practitioners introduced the “pan European injunctions”. Based on the idea that a European patent granted in Munich according to uniform (and unified) principles of patentability should enjoy pan-European protection by a single strike. The Dutch, not known for their shyness when it comes to introducing creative policies, introduced the idea of a “cross border” injunction, of course, to be rendered by Dutch courts. This was the early 90’s. The Dutch Supreme Court opened the cross border doors in its decision Lincoln/Interlas of 24 October 1993, published in NJ 1992/404). At least, that was what the originator of Europe’s Cross Border Practice, Willem Hoyng, advocated. He proposed to organize a mock trial, held in the dependence of the European Patent Office in Rijswijk (The Hague, Netherlands) for an audience of over 200 patent practitioners, opening the eyes of many to show that this was the solution to Europe’s lack in promoting a uniform patent enforcement strategy. In what became his “house style” advocacy Willem Hoyng defended that art 69[1] European Patent Convention provided for a stepping stone for a uniform interpretation of a EPO granted patent. Uniformly granted, according to unified principles of patentability, so what’s wrong in letting a Netherlands judge order an injunction Europe-wide on the basis of such unified principles?

The Cross Border Practice worked very well. For a while, that is. It did attract in the 90’s and early 2000 numerous –mostly US – companies to the Dutch courts, frustrated as they were by the slow pace of European patent integration and notoriously unpredictable outcomes (as the ones we still experience now, anno 2008, see our post on the ECB vs. DCC case).

All this ended with the outcome of legal scrutiny by the European Court of Justice. Two ECJ cases choked the breath out of Cross Border Relief, GAT vs. LUK and Primus/Roche. Blogger did argue the same, in IER (Netherlands Intellectual Property Monthly). Not so, Willem Hoyng, argues, disputatious as he (still) is:

"(…) We think that GAT-LUK and also the Dutch Supreme Court decision have to be interpreted in such a way that the court can deal with infringement questions as long as it does not rule on the validity. We conclude this from the fact that the court is competent to hear the infringement case and does not need to rule on validity in order to make a decision. This may certainly be the case where a defendant denies that he has committed infringement acts in certain or all countries. Furthermore, many technical non infringement arguments do not necessitate a ruling on validity (…)”

Curious why? Read his recent contribution to Netherlands’ well-known IP blog, boek9.nl.

[1] "Article 69 should not be interpreted in the sense that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Neither should it be interpreted in the sense that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patentee has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patentee with a reasonable degree of certainty for third parties."

24 March 2008

Europe’s Patent Demise

You are a European institution, the European Central Bank, and you seek the invalidation of what has been granted as a valid right by another European institution, the European Patent Office (EPO). The last weeks we got a taste of how The Great Patent Divide, the most un-European experience in patent law, has turned into Europe's Patent Demise.

Threatened by an patent infringement claim of a US company, Document Security Systems, Inc. (DSS) the ECB seeks the invalidation in several European countries. The UK patents court (in first instance) invalidates the patent, EP 0455 750 B1 for a ‘Method of making a nonreplicable document’ on March 26, 2007. A day later the German Federal Patent Court ("BundesPatentGericht") disagrees with the UK court and finds the patent valid. By judgment of March 12, 2008 the District Court in The Hague, Netherlands, upheld the patent as valid and follows Germany. Just a few weeks earlier, on 9th January 2008, the French court ("Tribunal de Grande Instance de Paris") agreed with the UK court in first instance and distances itself from the German court and found the patent invalid.

On March 19, 2008, the UK Appeal Court affirmed the invalidity findings of its first instance colleagues. Patent dead, in the UK and France (so far, appeal in France still pending).

You still with me?

What a disgrace. What a sorry state European patent law is in. We know that Europe is lacking a European view on validity (and infringement for that matter), but how can this be explained? The view, generally held, is that UK courts are (very) critical on what comes out of the European Patent Office. Patent 0455750 should not have been granted, if it were for the UK. France, not yet known as “patent-unfriendly” has chosen the side of the UK in this case. Is this a scary sign of what is there to come? Maybe (just) an incident and no forbode of what is next (France as the next patent basher)? One begins to wonder, are the Germans more fond of what comes out of their (“own”) EPO, located in Munich? Is Holland more inclined to accept what comes out of Munich as well? Or is this all “coincidence”? We think not. We have seen this divide before (on stents: Angiotech's patent for Taxus stent revoked by UK Court of Appeal, (partially) upheld by the Dutch District Court, but then it was only for Germany & Holland versus the UK. Is France now joining the chorus of “we-know-it-all-better-than-the-EPO” ?

(see also Dennis Crouch' Patently-O blog)