ipr and foreign investments patent litigation as …ipr and foreign investments patent litigation as...

IPR and Foreign Investments

Patent litigation as affecting business

Davide Follador

Intellectual Property Attorney

Agenda

1) IP as business assets in Foreign Investments

2) Top five traps in M&A transactions

3) Highlights of patent litigation in Italy

1.

Intellectual Property as business asset in foreign

investments of Chinese companies

Which IP asset is more valuable to you and your company

Poll 1

A. Brand/trade mark

B. Designs and Patents

C. Know how

D. Copyright

In your view, intangible assets represent what percentage of the value

of your company?

Poll 2

A. 0-10%

B. 10-30%

C. 30-50 %

D. 50-70%

E. 70% +

Financial planningAccounting

Licensing/ sell out

M&A

Litigation (damages

award)

Providing security loans /

sale and lease back

Intellectual Property & everyday

business

The target What’s in IT

IP sometimes is often

underestimated

Idea

Factory

Idea

Credits & Debts

Machines & plants

Goodwill

Other assets

Out-balanced analysis

Intangible Tangible

Total value of IP (intangibles)

15%

Approach

60%40%

Balanced analysis

Intangible Tangibles

Total value of IP (intangibles)

40%

Approach

50% 50%

What to focus on

Origin of goods

Key Technology

GoodwillOriginal

Creativity

What is the worth the target

Trademarks Patents

Business methods

Tradesecrets

CopyrightKey

personnel

IPR and foreign investments

•Green Field and M&A

• Assets

• Deals

•A big mistake

• Unpleasant surprises

•A good due diligence

?The due diligence

IPR and M&A operations: the audit/due diligence

•Patents

•Know-how

•Copyright

•Trademarks

•Infringements

•Licenses

•Collaboration agreements

IPR and M&A operations: the audit/due diligence

Accurate/Inaccurate IP due

diligenceSuccess/Failure

IPR and M&A operations

IPR and M&A operations

Therefore, Intellectual Property due diligence in an M&A

transaction should not be overlooked and should take place

early in the process

2.

IPR and M&A operations: most

common “traps”

IPR and M&A operations: most common “traps”

1. Target Does Not Actually Have the Expected Rights

Patents

Title update

Lien release delay

Employees rights

Trademarks

Goods, services

Countries of registration

Non use cancellation

Domain names

2. Agreements Limitation on IP Rights

The target may have existing licenses or agreements with respect to some

or all of its IP rights

Such agreements may/may not be transferred with the M&A deal

IPR and M&A operations: most common “traps”

3. Infringement Claims from Third Parties

The target might be subject to current/threatened infringement claims by

competitors

No buyer wants to buy an expensive IP-related lawsuit through an

acquisition.

IPR and M&A operations: most common “traps”

4. No “Freedom to Operate”

• Effective ability to exploit the acquired patented technology

• Buyer’s freedom to operate should be analyzed before completing

the transaction

• Still unknown obstacles to the exploitation of technology can exist

(unpublished patent rights, reverse engineering by competitors)

• To the extent that these can be explored, explore it with the assistance of

an IP lawyer

IPR and M&A operations: most common “traps”

5. Liens

• Security agreements in favor of third parties can limit/prevent the use of

the patent

• In some countries these are not to be recorded at the registers

• Thus, the buyer should conduct an extensive due diligence to verify

if the IPR are free from burdens

IPR and M&A operations: most common “traps”

3.

Patent Litigation as affecting business operations:

highlights of procedure in Italy

Patent litigation in Italy - highlights

• Enforceability of patent rights

• Italian patent litigation procedure

• Current timeframes

Patent litigation in Italy - highlights

• Preliminary injunctions much quicker (two-three months)

• Prior to 2003

• Currently, the IP specialised sections are 12 in total

Ordinary

Trial

• Pre requisites: Fumus

boni iuris (title) and

periculum in mora

• Quick procedure

• Possibility to apply the

measure without

summon

• Measures can become

“definitive”

• Appeal 15 days tem

• Usually immediately

effective

• Necessary in caseprerequisites for Pre-Trialmeasures are not met

• Necessary for damages assessment

• Full trial so usually longer

• The option is betweenpre-trial (urgent) andordinary proceeding

Civil Court

Enforcement

Pre-Trial

measures

Patent litigation in Italy

Patent litigation in Italy – urgent (pre-trial)

measures

• Seizure: consists of the seizure of the suspected counterfeited products

or of the machinery used to manufacture. Not applicable during trade

fairs

• Description (evidence purposes): to secure solid evidence of the

violation of the patent. It is conducted by a Court Bailiff assisted by a

technical expert which “describes” the allegedly infringing product as

well as the means of production

• Injunction: it is a Court order to stop the infringement, subject to

penalty

Patent litigation in Italy – Urgent proceeding

Step 1

Complaint

Step 2

Court assessment

Urg

ent C

ou

rt Pro

ceedin

g

Decision

Phases

First – authorization – phase:

usually the Judge call the parties

within 15 days after the filing of

the petition (not in inaudita altera

parte cases);

Second – possible – phase: the

appealing before the Court has to

be filed within 15 days from the

issuing of the decision.

Third phase: effects of the decision

after 30 days without appealing

material execution of the decision.

Patent litigation in Italy: actions in ordinary

proceeding

Specialized IP Section of the Italian Courts have competence overintellectual property issues (counterfeit, nullity, infringement of anykind etc.) of patents, trademark, copyright as well as IP connectedunfair competition issues (no antirust). Patentees have differentoptions to protect IP rights:

• Nullity action: to declare that a patent is void for specific reasons setby the law

• Counterfeit action: it aims to stop the infringement and assessdamages

• “Negative” action: to declare that the claimant’s conduct is notinfringing counterpart’s IP right

• Unfair competition action

• Damage compensation

Patent litigation in Italy – measures in ordinary

proceeding

Ordinary measures are the contents of the judgment as released bythe Court, after an Ordinary trial:

• Definitive injunction: usually connected with the infringement orunfair competition ruling and order the party to stop anycounterfeiting activity in the future. Subject to a penalty for eachday of non-compliance• Destruction: of the counterfeiting materials (goods and means ofproduction)• Property assignment: typical in Patent cases, which allows theparty to take possession of the counterfeited materials as well as theproduction means

Patent litigation in Italy – Full Trial Steps

• First step: Patent violation claims.

Counterclaims. Evidence. Requested

remedies

• Second step: Court proceeds to the

examination

• Third step: the parties are required

to file the final statements, defining

claims

• Judgment. Uponcareful evaluation

of the evidence and claims as

presented by the parties and –

usually – in the light of technical

expertise

• Appeal within 60 days (possible

further appeal to Supreme Court)

Step 1

Writ of summons – defense –party allegations

Step 2

Court assessment of evidence – Technical expertise report

Step 3

Parties’ final statement

Ord

inary

Cou

rt Pro

ceedin

g

Decision

Patent litigation in Italy – EvidenceIn Patent Cases, the evidence usually comes from:

• Documents: registers of sales (useful for assessing the

damages), contracts, etc. These are the most commonly accepted and

reliable evidence

• Witnesses are not that common and are used to support document-

base evidence or other kind of evidence.

• Party Technical Consultant’s and Court Expert’s reports: the appointed

experts release written reports which explain technical aspects of the

patent or give an opinion on a related issue requested by the judge

• Samples: to give the Court a practical view of the matter,

Patent litigation in Italy – special investigation

powers of the judge

Art. 121-bis Italian IP Code, upon request of plaintiff (patent owner)

• Information on origin and distribution network, acquired by

interrogations

• Applicable on any person who has been found in possession of the

infringing goods

• Information can extend to:

- Retail/gross sellers

- Quantities

- Prices

- Manufacturers

Patent litigation in Italy - highlights

Damages Assessment Criteria

• The exact assessment can be conducted in the trial procedure, or ina following one (upon first generic charge)

• Different set principles and criteria apply- effective losses- royalties fair principle- profits of counterfeiter- “fair” damages

• Monetary valuation

How do we measure the value of a

Intellectual Property?

Guidelines for trade marks:

Intellectual Property monetary valuation

ISO standard for monetary brand valuation

Value concept: economic benefits created by the brand

Aspects to consider: Financial (cash flow & incomes) Behavioural (stake holders) Legal (due diligence)

Intellectual Property monetary valuation

谢谢大家！

follador@franzosi.com

知识产权与国外投资影响业务的专利诉讼

Davide Follador

- 知识产权律师-

议程

1）知识产权作为国外投资中的商业资产

2）五大圈套

3)聚焦意大利专利诉讼及个案

1.

Intellectual Property as business asset in foreign

investments of Chinese companies

被收购对象 内容

有时候，知识产权常被低估

观念工厂

观念

信贷与债务

机器与工厂

信誉

其他资产

平衡分析

Intangible Tangible

知识产权总值 （无形资产）

25%

Approach

60%40%

均衡分析

Intangible Tangibles

知识产权总值 （无形资产）

40%

Approach

50% 50%

企业收购的相关内容

商品原产地 关键技术商誉及顾客

赞誉原创性

企业收购的相关内容

商标 专利商业方法商业机密

版权 关键人员

知识产权与企业收购业务

•国外投资经常涉及公司或企业收购

•在企业收购中，很多律师认为知识产权会自动地随着收购转移，因此知识产权问题通过一般的声明与保证就可以解决（例如…）

知识产权与企业收购业务

• 虽然获得知识产权方面有力的保证很有用，但是依靠违反声明与保证作为保护所涉知识产权的唯一补救办法有可能在结帐后带来不愉快的“意外”，包括要求对未来的商业计划和商机做重大改变。

• 如果被收购对象的知识产权对于企业很重要，则进行知识产权尽职调查是根本。

知识产权与企业收购业务

对一家公司的知识产权资产做尽职调查实质上就是对至少涉及以下主要方面做系统的审计：

专利专有技术版权商标侵权授权与合作协议

知识产权与企业收购业务

• 在尽职调查期间未能适当地审查这些方面有可能导致重新评估、重新定价或收购交易的结构变化

• 例如，1998年大众向宝马收购劳斯莱斯和宾利案或者

2012年苹果与唯冠案

• 因此，企业收购交易中的知识产权尽职调查不容忽视，应该在交易过程早期就进行知识产权尽职调查。

知识产权与企业收购业务：五大“圈套”

知识产权与企业收购业务：五大“圈套”

1、被收购对象实际上并不拥有关键权利

专利：这可能是因为未能通过公司名称变更或留置权解除对权利进行更新，或者未能确保公司员工将他们用公司资源开发出来的专利资产权利适当地转让给被收购对象。

商标必须按照它们的货物、服务以及注册国家进行评估以确保它们覆盖购买者在预期市场的所有预期用途。

域名也许过期，如果已经过期，任何人都可以购买该域名。.

知识产权与企业收购业务：五大“圈套”

2、先前的协议限制了知识产权

关于其部分或所有的知识产权，被收购对象也许已有授权或协议。

这样的协议可以也可以不随企业收购交易转移。

知识产权与企业收购业务：五大“圈套”

3、侵权索赔

被收购对象也许受到竞争对手当前的或声称的侵权索赔。

没有买家愿意通过收购而买来一场昂贵的涉及知识产权的官司。

知识产权与企业收购业务：五大“圈套”

4、无“自由经营权”

• 关于专利以及利用收购的专利技术的能力也许存在着重大障碍。

• 因此，在完成交易之前就应该对购买者的自由经营权进行分析。

• 即使这样，对于技术的利用仍然会有一些未知的障碍。 （竞争对手未公开的专利权、对技术的滥用、逆向工程等等）。要达到可以开发这些的范围，明智的做法是求助专利律师。

知识产权与企业收购业务：五大“圈套”

5、留置权

• 知识产权也可能受到利于第三方的留置权的阻碍，第三方有权限制或阻止该专利或商标的使用。

• 在有些国家这些留置权并不会在注册处记录备案。

• 因此，购买者应该做广泛的尽职调查以证实这些知识产权无任何负担。

3.

Patent Litigation as affecting business operations:

highlights of procedure in Italy

意大利专利诉讼-聚焦

• 专利的可执行性是研发公司开发新产品的必然要求

• 在这方面意大利专利诉讼程序因为其缓慢的法庭程序而经常遭受诟病。因为从专利权所有人角度来讲，这不利于他们的专利权迅速生效。

• 目前，专利诉讼程序的持续时间，包括专利侵权诉讼和宣判专利无效或不侵权的诉讼，估计长达三到五年，依案件的复杂程度而定。

意大利专利诉讼-聚焦

• 然而，紧急的初步禁令却快得多（两三个月）• 2003年之前在所有的都市和一些小镇有好几百个法院可以审理专利案件。

• 目前，知识产权部总共只有12个。

• 这就意味着所有涉及专利、设计与商标侵权或无效以及不公平竞争的法庭诉讼都要由12个专门法庭中的三人陪审团受理。

Ordinary

Trial

• Pre requisites: Fumus

boni iuris (title) and

periculum in mora

• Quick procedure

• Possibility to apply the

measure without

summon

• Measures can become

“definitive”

• Appeal 15 days tem

• Usually immediately

effective

• Necessary in caseprerequisites for Pre-Trialmeasures are not met

• Necessary for damages assessment

• Full trial so usually longer

• The option is betweenpre-trial (urgent) andordinary proceeding

Court

enforcement

Pre-Trial

measures

Patent litigation in Italy – two enforcement

options

意大利专利诉讼– 紧急措施

• 充分法律基础推定 (权利) 和 拖延的危险

• 非常紧迫的期限

• 可能不召被告到庭就实施该措施

• 禁令可能是“永久的”

• 措施可能包括：- 描述 (作为未来普通诉讼的证据)

- 罚款并停止销售或生产的禁令- 没收（也不可用于交易会）- 没收以弥补损失（仅用于大规模的盗版产品）

Patent litigation in Italy: actions in ordinary

proceeding

• Specialized IP Section of the Italian Courts have competence overintellectual property issues (counterfeit, nullity, infringement of anykind etc.) of patents, trademark, copyright as well as IP connectedunfair competition issues (no antirust). Patentees have differentoptions to protect IP rights:

Nullity action: to declare that a patent is void for specific reasons setby the law

Counterfeit action: it aims to stop the infringing procedure and usuallyto assess the resulting damages

Negative assessment action: deemed to ensure that the claimantconduct is not infringing counterpart’s IP right

Unfair competition action

Damage compensation

Patent litigation in Italy – measures in ordinary

proceeding

• Ordinary measures are the contents of the judgement as released bythe Court, after an Ordinary trial:

Definitive injunction: it is usually connected with the counterfeit orcompetition ruling and order the party to stop and not to enact anycounterfeiting activity in the future. If the party does not stop theillegal conduct he has to pay a penalty for each day of non-compliance;Destruction: of the counterfeiting materials (goods and means ofproduction);Property assignment: typical in Patent cases, which allows the partyto take possession of the counterfeited materials as well as theproduction means.

Patent litigation in Italy – Ordinary trial steps

• First step: the action before the Court for the ordinary trial is started

by the party– filing the writ of summons – who complaints the patent

violation. the parties respond to ones’ other claims and counterclaims

with written statements, where they expose their positions, present

proofs and asks for remedies;

• Second step: the Court proceeds to the examination of the elements of

proof as brought by the sides.

• Third step: the parties are required to file the final statements, defining

claims

• Judgement. After the careful evaluation of the evidence and claims as

presented by the parties and – usually – in the light of technical

expertise

• Appeal within 60 days (possible further appeal to Supreme Court)

Patent litigation in Italy – EvidenceIn Patent Cases, the elements of proof are usually the following:

• Written documents: registers of sales (useful for assessing the

damages), contracts, or other papers that prove the violation of the

patent, or compare one product to the other in order to demonstrate the

counterfeit. They are the most commonly accepted and reliable

elements of proof.

• Witnesses are not that common and are used to support written

documents or other kind of evidence.

• Party Technical Consultant’s report: releases written reports which

explain technical aspects (which cannot be understood by a common

person not expert in the field) of the patent or give an opinion on a

related issue.

• Samples: they can be useful to give to the Court a practical view of

the matter, but they are not strictly essential in resolving a patent case

because of its high degree of technicality.

聚焦意大利专利诉讼– 法官的特别侦查权

• 根据意大利知识产权法案（修订本）第121条，经原告（专利拥有者）申请，法官可：

• 通过询问获得原产地和分销网络的信息

• 适用于任何被发现拥有侵权产品的人

• 信息可延伸至：- 零售和总销商- 数量- 价格- 制造商

Patent litigation in Italy - highlights

• Damages Assessment Criteria

• The exact assessment can be conducted in the trial procedure, or ina following one (upon generic charge)

• Different set principles and criteria apply (like equity, royalties,profits of counterfeiter, etc.)

谢谢！

Davide FOLLADOR

BEIJING – P.R.C.

follador@franzosi.com