Newsletter January 2021

With a judicial tendency of strengthening IP protection, the Supreme People’s Court specially issued the judicial interpretation, “Several Provisions of the Supreme People’s Court on Evidence for Civil Lawsuits Involving Intellectual Property” (hereinafter “the Provisions”) to try to break the dilemma. The Provisions came into effect on November 18, 2020, and make many significant breakthroughs to effectively reduce the IPR holder’s burden of proof in civil lawsuit, which are summarized as follows:

1. Effectively reducing the burden of proof for IPR holders whose patented process does not produce a new product

Article 3 of the Provisions stipulates that where an IPR holder (the plaintiff) whose patented process does not manufacture a new product has fulfilled the burden of proof for the following facts:

(1) the product manufactured by the defendant is identical to that manufactured by the patented process;

(2) the product manufactured by the defendant is more likely to be produced by the patented process;

(3) the IPR holder (the plaintiff) had made reasonable efforts to prove the defendant’s use of the patented process,

the court may transfer the burden of proof to the defendant, requiring them to produce evidence to prove that their manufacturing process is different to the patented process.

2. Setting up a remedy of evidence preservation, obstruction and punishment

With respect to evidence preservation conducted by the court, Articles 13 and 14 of the Provisions further emphasize that where the defendant, without reasonable ground, refuses to cooperate or interferes with the court’s action of evidence preservation so that the evidence could not be preserved, or where the defendant, without authorization, conducts the acts of disassembling, tampering with or any other acts of destroying the evidence successfully preserved so that the evidence could not be used, the defendant shall bear all the adverse consequences arising therefrom. Furthermore, where such acts constitute judicial nuisance, the defendant will be punished with fines, detainment and even criminal sanction.

3. Citing mandatory submission orders of evidence and evidence presumption

In consideration that some critical evidence is controlled by the defendant, and the IPR holder is unable to acquire it, under the basic principle of “who claims, who adduces evidence”, Article 24 of the Provisions further allows the court, according to characteristics of evidence in different civil lawsuits, to directly issue mandatory submission orders to the defendant who possesses the evidence, ordering them to submit relevant evidence. Article 25 further stipulates that where the defendant, without proper grounds, refuses to submit, submits false evidence or destroys evidence or conducts any other acts that make the evidence unusable, the IPR holder’s corresponding claims relating to the evidence will be presumed tenable.

4. Expanding the scope of evidence regarding damages

In order for further improving current issue of “high amount of claim but low amount of award of damages”, Article 31 of the Provisions expands the scope of evidence regarding damages, IPR holder is allowed to adduce the evidences including but not limited the financial accounts, sales contract, annual reports, prospectuses, records on the websites or brochures, transaction data stored in equipment systems, commodity circulation data from third-party platforms, evaluation reports, licensing contracts, and records from relevant authorities of market supervision, taxation and financial departments, etc., to support its claims of damages.

Patent backlog is a global concern and, in Brazil, has acquired the status of insolvable problem along the last decades.

After several years of discussion, with several proposals on the table – including a very controversial one (i.e., the possibility of automatic grant of all pending patent applications) – INPI (the Brazilian PTO) introduced, in 2019, a new program (“Program”) for handling this matter, through Resolutions 240 and 241, of July 3^rd, 2019, jointly issued by its Presidency and the Director of Patents, Computer Programs, and Topography of Integrated Circuits (DIRPA).

Resolution 240 (in force since Aug/01/2019): “governs the preliminary requirement for the application for patent of invention pending examination, without searches conducted in Patent Offices of other countries, International or Regional Organizations” and Resolution 241 (in force since Jul/22/2019) “governs the preliminary requirement for the application for patent of invention pending examination, by using the result of searches conducted in Patent Offices of other countries, International or Regional Organizations”.

These Resolutions regulate the tackling of a challenging backlog reduction target of 80% in 2 years. For that, two preliminary requirements (orders 6.21 and 6.22) were established with the rationale of optimizing the examination by means of the issuance of standardized priority search reports.

Received with great enthusiasm by the affected community, the Program is inserted in the context of several recent initiatives adopted by INPI aiming at excelling in terms of operational performance as well as strengthening its position as an agency which effectively promotes enhancements in the productive and competitive environment.

For instance, the intensive investment in information technology and teleworking proved to be the right way especially within the context of COVID-19. Such initiatives trends to be catalyzed by the Intellectual Property National Strategy (ENPI), officially launched by the Brazilian government in December 2020, as part of the celebration of INPI’s 50^th anniversary, which proposes 210 initiatives to transform the Brazilian IP system along the next decade.

In order to provide the society with full transparency and real-time monitoring as to the evolution of the Program, INPI has a specific page in its website (https://www.gov.br/inpi/pt-br/servicos/patentes/plano-de-combate-ao-backlog), which includes the supports received from national and international entities representing the most diverse sectors and types, including those defending a bigger restriction to the grant of patents.

Tangible results can already be noted. Of the nearly 150,000 applications mapped in the beginning of the program (August 2019), around 75,000 had already been examined on December 2020, a remarkable (and symbolic) reduction of 50% in only one and a half year.

Overcoming such a critical and historical problem and bringing the patent examination timeframe to reasonable parameters allow a new and promising perspective for the national and foreign entrepreneurs and companies intending to protect their innovative assets in Brazil, therefore fostering and benefiting all of the Brazilian productive and competitive ecosystem. Brazil is (definitely) coming back to the patent game.

The webinar also dealt with other topics: Marco Ricolfi and Alessandro Cogo spoke about digital platforms and access to protected works; Giorgio Mondini and Fabio Ghiretti explained how shows, concerts and other cultural and entertainment events migrated to the on-line environment, focussing on the management and protection of the related IP Rights. The webinar was opened and led by Silvia Vitrò, President of the Turin IP Court.

With regard to Public Procurement in general, we started with a quick overview of the Italian rules on this matter, in order to facilitate better comprehension of the problems which can arise if Parties do not consider the IP rights on the product/process which is the subject of the tender.

Basically, when a Public Authority needs products/processes incorporating technology, a distinction must be made between technology which already exists and technology which still needs to be created and developed. In the former case, if the already existing technology is not covered by property rights, Public Procurement is conducted through an open tender, in which the product/process is purchased from the company that offers the best product at the best price compared to other candidates. If, however, the existing technology is covered by exclusive property rights the only possibility is to directly purchase the good from the holder of such rights. In the latter case (technology still to be developed) contracts between the Public Authority and the private party do not relate to purchasing existing products or processes, but to creating innovation - the Public Procurement of innovation. It is therefore necessary to regulate the way in which that innovation is to be achieved and, above all, the ownership and rights to exploit the innovation, once it has been achieved.

In general terms, legal ownership of IP rights on results of a Public Procurement of innovation may belong to (a) the public buyer, (b) the company or (c) both. In the first case, the public buyer bears all the costs of the innovation and can fully use and exploit it. However, the companies involved may only have a limited incentive to innovate and the company with the best solution may quit the tender because the value thereof does not cover the entire cost of the innovation. In the second case the companies involved have a full incentive to innovate and to search for the best solution. The public buyer, however, which pays less than the cost of the innovation, can use the results of the research only for the limited purpose of the tender. A vendor lock-in is also possible and this is a very serious disadvantage for the public buyer. In the third case, ownership of the IP rights on the results of the Public Procurement of innovation is shared between the public buyer and the company. We believe this is the most efficient solution if the public buyer has limited financial resources and/or is not interested in exploiting the IP rights on the results of the Public Procurement.

There are several possible contractual schemes for regulating this third case. One option is co-ownership of the rights on the innovation between the Public Authority and the company, provisions being established on the respective rights of exploitation and possible cross-licensing. Another option is ownership by the Public Authority, but with an area of exclusive license, possibly free of charge, in favour of the company, which would be the only company entitled to exploit the innovation in that area. Ownership by the company is also conceivable, but with a free open licence being given to the Public Authority.

The Italian Law also provides detailed rules for specific cases of public procurement. Some of them are related to ownership of IP Rights on the results of Public Procurement of innovation. For example, according to sections 68 and 69 of Legislative Decree no. 82/2005 (on the Public Procurement of software) the Public Authority must choose solutions based on open access software and (unless there are well-founded technical and financial reasons to the contrary) tenders for Public Procurement must give the buyer full ownership of the IP Rights on the results of the procurement. The Public Authority must also release at its expense the source code of any software developed for the same Authority. Further provisions are set out for the dissemination of information and data developed by, or for, the Public Authority, Universities, etc. A good example is the Position Statement signed in 2013 by the leading Italian research centres and institutions (including CNR, CRUI, ISS).

During the COVID-19 Emergency the Italian Public Authorities (just like those of other countries) had an urgent need for innovation in different fields (health treatment, vaccines, diagnostic kits, etc.), one of which related to the contact tracing app intended to be installed in citizens’ smartphones in order to prevent the spread of infection. Study of the procurement of this app showed, among other things, that the Public Authority required an open access solution, with personal data protection being guaranteed. Due to the fact that, according to the tender, the app was developed for free, in the final part of the webinar we were able to discuss with the public (with the intervention of the other panellists and the moderator) the general topic of internet platforms and no-price markets.

All in all, the webinar proved to be an excellent occasion to reflect on the interplay between IP Law and Public Law. Although this is a topic which has already been discussed in the past among scholars and practitioners, the COVID-19 Emergency has made the need for clear, flexible solutions in this field particularly urgent and challenging.

The Annual Conference is for free for AIPPI Spain members, as indeed it is for members of other AIPPI National and Regional Groups too. (There is a small fee for non-AIPPI members who wish to join).

For more details, please read the programme of the Annual Conference. Download the registration form here. (Both documents are in Spanish).

Every year around November, AIPPI Belgium holds a Study Day in Brussels where hot topics in the IP field are discussed. This year, as the Study Day was online for the first time, the Belgian association decided to hold it "free of charge" and to open it to a broad international audience. Four webinars were proposed, as well as breakout sessions for social networking, and "poll questions" from the speakers to the participants, to increase interaction and dialogue with the audience. As usual, speakers were drawn from universities, industries, private practice and the tribunals. More than 200 participants registered for the event, with around 100 effective participants per webinar. Strong preparation backstage by our Presidents, André Clerix and Dominique Kaesmacher together with our administrative assistant, Anémone Seutin, the team of Cinzia Petruzzello and our five moderators of the webinars, resulted in a great success!

Regarding the content of the webinars, the two morning sessions were dedicated to patent law. In the first webinar, “Interfacing different employment and patent regimes in global inventions - a piece of cake?” the speaker from Finland, Anne-Mari Lummevuo, PhD (Legal Counsel & Patent Attorney) presented her PhD thesis on the topic of multinational inventions. The session was moderated by Francis Leyder, European & Belgian Patent Attorney (Gevers), and the President of EPI.

The second webinar related to "research exception in patent law" consisted of a panel with many speakers and contributors. After a theoretical introduction by Patricia Cappuyns (Attorney-at-law (Fox IP Law) and lecturer (Vesalius College Brussels)), the panel allowed several players from university Tech Transfer Offices and from the industry to present their views on the subject. From the university TTO’s, the participants on the panel were An Van Den Broecke (IP & licensing Manager (TTO UGent)), Frédéric Pierard, PhD (registered Technology Transfer Professional (TTO ULB)) and Fiona Demeur (Legal Advisor (TTO ULB)). From industry: Frank Landolt (European Patent Attorney, Chief Counsel Legal & IP at Confo Therapeutics), Daphné Derouane (European Patent Attorney, Associate-General Patent counsel at UCB) and Didier Leboutte (Group Intellectual Property Manager, Corporate Development Manager at John Cockerill). The session was moderated by Domien Op de Beeck (Attorney-at-law, Bird & Bird).

In the afternoon, the first session was dedicated to trademark law with an “Anthology of European case-law 2020 in trademark law” presented by Vincent Ruzek, PhD, Lawyer at the EUIPO, who provided an overview of the most relevant recent developments of the case of the Court of Justice on trademark law. The session was moderated by Emmanuel Cornu (Attorney-at-law, Simont Braun).

The last session of the day, “Cost and Compensation in IP disputes”, was again a panel with speakers from different backgrounds. Dietger Glorieux (Legal Counsel, Pepsico Belux and Research fellow at ULiège) and Kristof Neefs (Attorney-at-law, Inteo) provided the theoretical framework on damages and costs respectively. The issues were then discussed from Belgian and Dutch points of view, with a panel consisting of Constant van Nispen (Professor, Free University Amsterdam), Frederic Blockx, PhD (Judge, Enterprise Court Antwerp) and Paul Reeskamp (Advocaat, DLA Piper Amsterdam). The session was moderated by Sarah van den Brande (Attorney-at-law, Liedekerke) and Bernard Vanbrabant, PhD (Attorney-at-law, Liedekerke and Professor, ULiège).