1
HOW TO PROTECT YOUR PATENTS IN EUROPEFROM THE LEGAL POINT OF VIEW
Chongqing, September 2008
Bruno Cinquantini
Notarbartolo & Gervasi
2
HOW TO PROTECT YOUR PATENTS IN EUROPEFROM THE LEGAL POINT OF VIEW
Shunde, September 2008
Bruno Cinquantini
Notarbartolo & Gervasi
3
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
4
Patenting strategies
To protect your innovation, you can use:
•Trade secret (keep information confidential)
and/or file
•National patent
•National utility model
•European patent
5
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
6
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
7
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
8
Patent
External advantages for i) protection,
ii) bargaining, iii) image
i) protection
• protecting product technology• protecting process technology• building up retaliatory power against competitors
9
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
10
Patent
Internal advantages
•Improves employees’ motivation
• gives measure of a company R&D capacity
11
Patent
Disadvantages
• Costs of
•procedures
•maintainance
•counsel
•enforcement
• Discloses technical information to
competitors
12
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
13
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
14
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
15
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)
16
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
17
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
18
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)
19
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 !)
20
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
21
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
22
Licensing
A patent may be:
• bought
• sold
• transferred or
• inherited
• licensed
23
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.
24
Licensing
Licenses can be limited in time and space.
There are different types of licences:
• Exclusive
• Non-exclusive
• Sublicence
25
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
26
Licensing strategies
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
27
Licensing strategies
Licensing out
Advantages:
•Possibility to enter makets where the licensor is not present
•Additional revenue
28
Licensing strategies
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
29
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
30
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
31
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
32
0 - Unprotected level
They use confidentiality and carry out non-trade secret intellectual property protection where appropriate
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
How businesses behave at the various levels ?
33
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
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
34
2 - Cost savings level
Company activities:
- Focuses on how to reduce costs of filing/maintaining intellectual property portfolio
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
35
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
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
36
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
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
37
3 - IP for profit level
- 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
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
38
3 - IP for profit level
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)
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
39
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
PenthouseIntegration
ThirdProfit
SecondSavings
GroundDefensive
BasementUnprotected
40
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
41
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
Organisation of IP department
42
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
Organisation of IP department
43
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.
Organisation of IP department
44
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
Organisation of IP department
45
Organisation of IP department
Directorate IP Secretariate
strategies
documentation
patents trade marks
professional
administrative
professional
administrative
Licensing +litigation
Internal structure of IP dept
46
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
Obligation to licence?
Use of patentsUse of patentsUse of patentsUse of patents
Obligation to licence?
Use of patents
Offensive attitude
yes
no
no
Coop. agreements
compulsory licences at
favorable conditions
Organisation of IP department
yes
Decision process in large companies
Obligation to licence?yes
Obligation to licence?yes
Obligation to licence?yes
compulsory licences at
favorable conditions
Obligation to licence?yes
compulsory licences at
favorable conditions
Obligation to licence?yes Coop. agreements
compulsory licences at
favorable conditions
Obligation to licence?yes Coop. agreements
compulsory licences at
favorable conditions
Obligation to licence?yes Coop. agreements
compulsory licences at
favorable conditions
Obligation to licence?yes Coop. agreements
compulsory licences at
favorable conditions
Obligation to licence?yes Coop. agreements
compulsory licences at
favorable conditions
Obligation to licence?yes
Licence at disadvantageous
conditions
yes
Licence at conditions
below market
yes
47
Organisation of IP department
Use of patents
Obligation to licence?yes
compulsory licences at
favorable conditions
Coop. agreements
Offensive attitude
Licence at conditions below
market
Decision process in small companies
48
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
49
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
50
Enforcement of patent rights in Europe
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.”
51
• 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
Enforcement of patent rights in Europe
52
Enforcement of patent rights in Europe
•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
53
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)
54
•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
55
Infringement
Forum shopping in Europe is determined by
• costs (GB, DE, FR/IT)• rapidity of proceedings (GB, DE)• judicial reliability (DE, GB)• legal differences
56
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.
57
Infringement strategy
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.
58
Infringement strategy
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.
59
Infringement strategy
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
60
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