1 how to protect your patents in europe from the legal point of view chongqing, september 2008 bruno...

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HOW TO PROTECT YOUR PATENTS IN EUROPEFROM THE LEGAL POINT OF VIEW

Chongqing, September 2008

Bruno Cinquantini

Notarbartolo & Gervasi

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HOW TO PROTECT YOUR PATENTS IN EUROPEFROM THE LEGAL POINT OF VIEW

Shunde, September 2008

Bruno Cinquantini

Notarbartolo & Gervasi

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Content

1. Patenting strategies you can use in Europe

2. How to license in or license out your innovation

3. How can a company organise its patent department

4. What are the remedies if your patent is infringed in Europe

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Patenting strategies

To protect your innovation, you can use:

•Trade secret (keep information confidential)

and/or file

•National patent

•National utility model

•European patent

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Trade secret

Why?

• If your technology has no competitors•No reverse engineering is possible on your product•Your know how is important to make your product or process•Your innovation has little chance to be patented

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Trade secret

Advantages

•It is cheaper than patent•No complex procedures necessary•If you make your new product or use your new process far from competitors, more difficult to be given away•In Europe all countries have adequate legislation to protect trade secrets

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Trade secret

Disadvantages

•You must organise expensive procedures to keep trade secrets in your business•If your secret is discovered, no remedy is available• licensing is more difficult than if patented

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Patent

External advantages for i) protection,

ii) bargaining, iii) image

i) protection

• protecting product technology• protecting process technology• building up retaliatory power against competitors

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Patent

ii) bargaining:

•Better possibilities to license in or license out•Better possibilities to access technology by cross-licensing•Makes easier co-operation in R&D with others • Improves bargaining position in standard setting

iii) image

•Improves the company image

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Patent

Internal advantages

•Improves employees’ motivation

• gives measure of a company R&D capacity

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Patent

Disadvantages

• Costs of

•procedures

•maintainance

•counsel

•enforcement

• Discloses technical information to

competitors

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Strategies for filing patents

a) file a Chinese patent application (alternative: PCT first filing) andclaim priority, within 12 months

b) Choose a strategy for Europe:

a) follow national route onlyb) follow PCT route and later National

routec) follow PCT route, later EPC and

National routed) follow EPC route and National routee) follow EPC route only

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a - Direct national route only

Advantages: it is cheaper and faster if:

• Protection in few countries (<4countries) or• Countries are not in EPC

because • less translations to make• utility model available (cheaper, shorter validity, no examination)• quicker granting procedure (no examination in several countries)•usually no opposition

Disadvantages: • more languages during prosecution, • more representatives

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b - PCT and National route

Advantages: cheaper and faster because

• centralised search and International patentability report (IPER)• one language during PCT • less translations (after PCT route)• you can choose utility model (cheaper, shorter validity, no national examination)• quicker granting (no examination in several countries) or direct granting after IPER

Advisable if:Protection in few countries

<4 countries, if members to EPC, (NB: not allowed in

some countries) orcountries not in EPC

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b - PCT and National route

Disadvantages:

•more languages during national procedure, •more representatives•Impossible for several countries members to EPC (you must follow the EPC route after PCT)

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c - PCT, EPC and National route

(Routes can be followed in parallel or subsequently)

Advantages:

After PCT route, follow only centralised EPC route

• it is cheaper

• only one examination, one language and patent in only one version

If some countries of interest are not in EPC, necessary to follow national route after PCT

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c - PCT, EPC and National route

Disadvantages

•During PCT (and EPC) routes, difficult to enforce in case of infringement in many countries

•Lengthy examination at EPO and granted patent after several years

advisable if you have no necessity to arrive quickly at granted patent

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d - EPC and National route

Follow EPC route for all countries possible, and National route only for countries not in EPC

Advantages: cheaper for several European countries

•Only one examination procedure •One language•One representative until grant (less afterwads)

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d - EPC and National route

Disadvantages:

• Lengthy examination at EPO

• difficult to enforce in case of infringement before grant of patent

advisable if you want to arrive cheaply to a patent for several countries, (preferably request accelerated examination at EPO !)

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e - EPC route only

Cheaper, if for 4 or more countries

advisable when all interesting countries belong to EPC

Preferably request accelerated examination, if risk of infringement

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Content





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Licensing

A patent may be:

• bought

• sold

• transferred or

• inherited

• licensed

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Licensing

Advantages of licensing

You still own your patent and you transfer to

someone else the right to use or sell your

patented product or process in return for a

royalty payment.

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Licensing

Licenses can be limited in time and space.

There are different types of licences:

• Exclusive

• Non-exclusive

• Sublicence

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Licensing strategies

•Licences must fit in product business strategy, help development of licensed product.

•Cross-license whenever possible.

• Balance of costs of licensing must be advantageous

•Non-exclusive licenses bring more advantages:• less risks for licensor and licensee• better control by licensor on the product• lower royalties for licensee

• Exclusive licenses are advantageous when licensor is not present on the market

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Lincensing in

Advantages:

•Savings in acquiring new technology with respect to developing autonomously

•Reducing risk connected to R&D for developing the technology

•Possibility of modernising quickly a production line

•Possibility of entering in the market very quickly

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Licensing out

Advantages:

•Possibility to enter makets where the licensor is not present

•Additional revenue

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Main aspects of licensing contract:

• object of contract

• guarantees for product or process

• guarantees for patents

• confidentiality of know how

• law of contract

• arbitration

• duration

• payments and royalties

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Content





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What is Europe ?

• many independent countries • different cultures• different traditions• different economic levels• different legislations• different judiciary• many different languages

and what does this mean in IP field?

•several levels of culture and various policies in respect of IP, •different company dimensions

Establishing an IP department in Europe

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IP culture - Levels of companies

Ground Floor

Second Floor

Third Floor

Penthouse

Basement

TotalIntegration

Profit Generation

Cost Savings

Defensive

Unprotected

PenthouseIntegration

Third floorProfit

Second floorSavings

Ground floorDefensive

BasementUnprotected

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0 - Unprotected level

They use confidentiality and carry out non-trade secret intellectual property protection where appropriate


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

How businesses behave at the various levels ?

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1 - Defensive level

Company activities:

- Awareness of intellectual property - Obtaining intellectual property

- Maintaining patents

- Respecting intellectual property rights of others (freedom to operate)

- Willingness to enforce patents when necessary


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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2 - Cost savings level

Company activities:

- Focuses on how to reduce costs of filing/maintaining intellectual property portfolio


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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3 - Profit generation level

Company activities:

- Makes intellectual property a profit center

- Utilizes the intellectual property portfolio as a corporate asset

- Extracts value directly from intellectual property portfolio

- Focus on non-core, non-strategic intellectual property having tactical value


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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3 - IP for profit level

Company activities:

- Considers intellectual property at all levels of organization

- Organises high profile campaign against infringers

- Develops active patent/trademark licensing program

- Makes more good sense oriented R&D efforts

- begins/improves active screening/watches for patent infringement


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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- Establishes an enforcement program, it ensures that no one infringes your patents

- Requires constant policing and monitoring of the market in order to challenge infringing products

- Enforcement function includes method of negotiation so company can suppress infringement without having to engage in litigation

- In tough cases, is prepared to litigate against infringers


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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Licensing

- Starts/increases proactive licensing program

- Finds opportunities to generate revenue without sacrificing competitive advantage

- Begins by licensing non-core technologies or technologies outside current field of products

- Finds appropriate licensees (potential infringers)


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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4 - IP Integration level

Company activities:

- Sets long term patent strategy

- aligns IP strategy with itscorporate strategy

- Makes competitive assessment

- Focuses on strategic value extraction

- Develops a performance measurement and reporting system

- Ensures that patent strategy drives research


ThirdProfit

SecondSavings

GroundDefensive

BasementUnprotected

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Organisation of IP department

Other factors for decision

•Objectives set for department

•Importance of dept inside company

•Strategic placement inside organigramm

•Dimension of company

•Technology type

•Which market is addressed

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TOP MANAGEMENT

CEO

technicaldpt

marketing dpt

commercialdpt

legaldpt

Intellectual property

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

commercialdpt

TOP MANAGEMENT

CEO

commercialdpt

TOP MANAGEMENT

CEO


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It is a company having a defensive stance

IP department takes

•No autonomous decisions

•No autonomous strategy

It receives guidelines from the department to which it is attached


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TOP MANAGEMENT

CEO

Technicaldpt

marketing dpt

legaldpt

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

TOP MANAGEMENT

CEO

commercialdpt

technical dpt

Intellectual property

other departm.


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It is a company of the multinational type,

•leading on the market

•having large dimensions

The IP department has autonomous decisional power and defines strategies

There exists a Director for IP , sometimes at Vice- President level


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Directorate IP Secretariate

strategies

documentation

patents trade marks

professional

administrative

professional

administrative

Licensing +litigation

Internal structure of IP dept

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Use of patents

Is it coreBusiness?

Obligation to licence?

Licence at market conditions

Licence at disadvantageous

conditions

Use of patents

Is it coreBusiness?

Use of patentsUse of patents


Use of patentsUse of patentsUse of patentsUse of patents


Use of patents

Offensive attitude

yes

no

no

Coop. agreements

compulsory licences at

favorable conditions


yes

Decision process in large companies

Obligation to licence?yes








Obligation to licence?yes Coop. agreements
















Licence at disadvantageous

conditions

yes

Licence at conditions

below market

yes

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Use of patents




Coop. agreements

Offensive attitude

Licence at conditions below

market

Decision process in small companies

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Content





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Few common rules and a harmonisation trend in the framework of the European Community Treaty (ECT)

Relevant provisions of ECT

"the prohibition, as between Member States, of customs duties and quantitative restrictions"

“creation of an internal market characterised by the abolition, as between Member States, of obstacles to the

free movement of goods, persons, services and capital"

Enforcement of patent rights in Europe

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Enforcement of IP Rights are antithetical to these goals of ECT, therefore

European Court of Justice set some limitation to IPR

“the specific object of a patent is inter alia to ensure to the holder, so as to recompense the creative effort of the inventor, the exclusive right to utilise an invention with a view to the manufacture and first putting into circulation of industrial products either directly or through licensees, as well as the right to oppose any infringement.”

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• Doctrine of “exhaustion” of IP rights in EU

“IPRs cannot be exercised in relation to goods placed on the market in the Community by the IPR owner or with his consent”

•Parallel imports from EU countries•Parallel imports from non-EU countries•Marketing of products by patentee in country where no patent exists exhausts patentee's rights


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•Compulsory licence and free movement of goods “National rules on patents may be different, but the legislative measure may not discriminate between national and imported products”

•Limitation to export in other country patented goods for which compulsory licence was obtained• No compulsory licence is possible if patented goods are manufactured in other EU member State

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Infringement

Differences throughout Europe

•Philosophical differences

•Civil code countries (DE, FR, NL, IT)

•Common law countries (GB)

• Procedural differences

•Proving infringement

• 'saisie' in France or Belgium, 'descrizione' in Italy (=on-site inspection) , “Anton Piller order” in United Kingdom, no on-site inspection in Germany

• Conduct of proceedings

• written testimony only (FR, IT)

• written testimony and hearings in Court (DE)

• Hearings (GB)

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•Procedural differences• Invalidity as a defence can be raised in Court (IT, FR, NL, GB), while separate suit necessary in Germany• obtaining interlocutory injunctions and/or summary judgment • Final remedies

• Substantive differences still exist• equivalency • indirect (=contributory) infringement• claim interpretation, translation differences• infringing actions

•pre-use, • producing for research and test purpose, • non commercial production• producing before the end of patent period

Infringement

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Infringement

Forum shopping in Europe is determined by

• costs (GB, DE, FR/IT)• rapidity of proceedings (GB, DE)• judicial reliability (DE, GB)• legal differences

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Infringement strategy

You have a patent that is allegedly infringed by a competitor:

• Collect evidence about the infringement,

• Have an analysis made of the patent situation of the alleged patent infringer (countries, possible patents on the same or similar subject) in view of settlement or of counter-attacks by the defendant (using counsels in every relevant country ),

• If possible, evaluate where to sue (“forum shopping”),

• Send a warning (not always necessary),

• Sue in the most promising country, taking account of laws, costs, speediness and effectiveness of procedures.

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You are sued by a competitor having a patent that is allegedly infringed:

• Collect evidence about the validity of the patent(s) allegedly infringed, used against you,

• have an infringement evaluation made by experts in the relevant country and have a nullity analysis made of the patent

allegedly infringed,

• Start a nullity suit against the patent allegedly infringed in the country(ies) where you are sued,

• start a retaliatory infringement suit using your patents and taking advantage of “forum shopping”,

• keep open the possibility of settlement with your competitor, at the appropriate moment.

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REMEMBER

The outcome of a trial in IP litigation is not always determined by the true merits of the case. Aside from whether infringement really exists or whether a patent is valid and enforceable, a case is sometimes decided by non-merit factors, such as perseverance and stamina of the parties, character and demeanor of crucial witnesses, ability of counsels, predispositions of a judge towards patents and monopolies, difficult to understand.

Consequently, a decision to litigate has to take account of

several factors and decided on a case by case approach.

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First of all

PREVENT PATENT LIABILITY !

It is especially important for a business to manage its patent liability by monitoring the patent activities of its closest and biggest competitors.

and

ENLARGE YOUR PATENT PORTFOLIO

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THANK YOU FOR YOUR ATTENTION!

Bruno Cinquantini

Corso di Porta Vittoria, 920122 Milan - Italy [email protected]

NOTARBARTOLO & GERVASI European Patent, Design and Trademark Attorneys Milan Munich Lugano Florence Rome Padua Turin Bolonia

1 how to protect your patents in europe from the legal point of view chongqing, september 2008 bruno...

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