CIPA JOURNAL Incorporating the transactions of the Chartered Institute of Patent Attorneys
December 2018 / Volume 47 / Number 12
FRAND licensing Does Unwired Planet v Huawei answer all the questions?
Shifting sands of estoppel in US proceedings Finnegan
1-CIPA Journal_OFC_Dec.indd 1
Comments on the EU's SPC regime Life Sciences Committee
SACEPO Working Party on Rules Patents Committee
UPC back on track; end of December 2018? Pippa Allen
Yellow Sheet Going remote Case reports CPD events
07/12/2018 17:02:55
YOUR CAREER YOUR LIFESTYLE :LWK RI¿FHV LQ /RQGRQ 0XQLFK DQG 6RXWKDPSWRQ ZRUNLQJ DW ' <RXQJ &R RIIHUV DWWRUQH\V WKH RSSRUWXQLW\ WR ZRUN ZLWK ZRUOG UHQRZQHG FOLHQWV DORQJVLGH KLJKO\ DFFODLPHG DQG PRWLYDWHG SHHUV DQG IRUJH H[FLWLQJ DQG VXFFHVVIXO FDUHHUV :KHWKHU \RXU OLIHVW\OH OHDGV \RX WR ZDQW D FLW\ HQYLURQPHQW D FRDVWDO ORFDWLRQ RU D FRXQWU\ OLIH \RX FDQ IXOO\ KDUQHVV \RXU SRWHQWLDO E\ MRLQLQJ D ¿UP WKDW RIIHUV D WRS WLHU IXOO ,3 ODZ VHUYLFH :H KDYH UROHV LQ %LRWHFKQRORJ\ &KHPLVWU\ 3KDUPDFHXWLFDOV DQG (OHFWURQLFV (QJLQHHULQJ ,7 SUDFWLFHV ZKLFK ZLOO JLYH \RX WKH RSSRUWXQLW\ WR ZRUN DORQJVLGH RWKHU VSHFLDOLVWV LQ \RXU WHFKQRORJLFDO ¿HOG 'HVFULEHG E\ /HJDO DV EHLQJ ³FRQVLVWHQWO\ H[FHOOHQW´ \RX FRXOG MRLQ RXU VXSSRUWLYH DQG WDOHQWHG WHDP DQG KHOS WR GHOLYHU UHDO H[FHOOHQFH WR RXU ZRUOG FODVV FOLHQWV :H DUH FXUUHQWO\ ORRNLQJ IRU DWWRUQH\V WR MRLQ RXU (OHFWURQLFV (QJLQHHULQJ DQG ,7 GHSDUWPHQW ,I \RX DUH UHFHQWO\ TXDOL¿HG RU DQ H[SHULHQFHG DWWRUQH\ DQG DUH NHHQ WR FRPELQH \RXU FDUHHU ZLWK OLYLQJ WKH OLIHVW\OH \RX ZDQW SOHDVH FRQWDFW RXU UHFUXLWPHQW WHDP RQ RU YLHZ RXU FXUUHQW YDFDQFLHV DW ZZZ G\RXQJ FRP FDUHHUV
2-IFC-DYoung_1.indd 2
04/12/2018 14:54:31
Contents 19-27 28
9-18 UP FRONT
ARTICLES
EDUCATION
3
19
51 52
Non-institute events Patent Case Law Tour
56
EPO appeal practice
Editorial
UPC back on track? Pippa Allen 4
USPTO proposals on motion to amend practice for AIA trials Kyu Yun Kim & Erin Sommers
Council Minutes
Lee Davies
22
SACEPO Working Party on Rules
28
Patents Committee 8
Biotech work cooperation
IPO update 9
Changes PCT fees
Kay Rupprecht
49
Obituary: Keith Beresford
50
Going Remote
51 60
Announcements IP Inclusive update
64
Yellow Sheet
Paul Cole Lucy Holloway
Andrea Brewster
Patent decisions
Beck Greener IPO decisions
David Pearce 38
Institute events Unitary Patent and UPC
PERSONAL
IPO update 36
Dr Amira Mukhtar 58 61
Does Unwired Planet v Huawei answer all the questions? David Hole
DECISIONS 31
Sean Gilday
FRAND licensing
EU SPC regime
Life Sciences Committee 39
US update: SAS Institute v Iancu
Statutory estoppel in inter partes review proceedings Ashley Winkler & Timothy McAnulty
NEWS 7
(Claim) Changes Ahead
EPO decisions
THE PINKS
Bristows 40
Trade marks
Bird & Bird
Volume 47, number 12
1-pp01_Contents1_1.indd 1
67-84 Announcements; Courses & Events; International; Recruitment
DECEMBER 2018
CIPA JOURNAL
1
09/12/2018 14:00:32
NEWS
the duration of the OPs artificially would be denial of the right to be heard. However, greater efficiency could potentially be introduced by way of a pre-hearing conference to identify the matters at issue clearly and to arrive at an agreed duration or timetable for the proceedings. For example if there is a desire to maximise the use of resources by scheduling half days for OPs, the scheduling of OPs in the afternoon would need to be extremely flexible, with some redundant facilities available. It would be unacceptable to cut morning OPs short because they had overrun and the facilities were required for a different case in
EPO • IPO
the afternoon. Afternoon OPs should also be limited to simple cases where overrunning is unlikely. The adversarial nature of inter partes proceedings would appear to lend itself less well to OPVCs, even with current advances in technology. Whilst, for reasons of access, it may be appropriate to offer OPVCs for oppositions, given the assumed increased value of such cases it would seem proportionate to appoint OPVCs only where all parties, and potentially the EPO Division/ Board as well, agree.
Deferred examination CIPA is unclear as to the current status
of this initiative but maintains its general position that if the rights and requirements of both applicants and third parties can be balanced then it supports the proposal.
Future consultation The EPO’s wide and repeated interaction with applicants and practitioners has reaped significant benefits and a wideranging review of OPs and OPVCs with interested parties appears essential for arriving at an optimal system. CIPA would be delighted to contribute in any appropriate manner. The opportunity to continue the discussion of deferred examination would also be welcomed.
Biotech work cooperation Search Co-operation Agreement between the IPO and the EPO.
T
he UK Intellectual Property Office (IPO) currently has a significant backlog of biotechnology patent applications. Although the IPO has recruited and trained examiners in this area and continue to do so, it remains unable to deliver the timeliness that it wants for its customers, particularly in relation to the issuing of searches. The European Patent Network enables the European Patent Office (EPO) to provide effective assistance to Contracting States, and one form of such assistance is for the EPO to perform searches on their national applications and provide them with the results. Some readers may be aware that the IPO and the EPO have recently entered into a bilateral cooperation agreement, under which the EPO will carry out some searches on UK patent applications in the biotechnology area. 8
CIPA JOURNAL
1-pp07-08-SACEPO_2.indd 8
DECEMBER 2018
The agreement entered into force on 1 July 2018 after it was approved by the EPO’s Administrative Council. The first UK search requests were sent to the EPO in early November 2018. The duration of the agreement is initially for two years and the number of UK searches to be carried out by the EPO is estimated at 200 to 300 per year. Standard IPO forms and fees will apply and the IPO will determine which applications are sent to the EPO and which are searched in the usual way by IPO examiners. Where an application is sent to the EPO for a search, the search report will be generated in the usual way using the same search tools as the IPO uses. The report will be issued by the IPO as a conventional UK search report, but with an indication in the covering letter that the search has been performed as part of the Working Agreement with the EPO. Cases will be subject to the same quality assurance
process whether searched by the EPO or by the IPO. The IPO understands that the EPO has confirmed that EP and PCT search fees may be eligible for whole or partial refund if those EP or PCT applications are equivalent to those UK applications for which the EPO has already performed a search under the agreement. Any matters relating to such refunds should be pursued separately by the applicant with the EPO. It is further anticipated that the EPO will consider applications for which the IPO search has been contracted to them as eligible for PCT direct. We hope that applicants and attorneys will support this positive initiative to improve timeliness and to help reduce UK backlogs in an important area of innovation, through cooperation between the IPO and the EPO. For further information please contact workcooperation@ipo.gov.uk www.cipa.org.uk
09/12/2018 14:02:29
COMMITTEE
LIFE SCIENCES
Supplementary protection certificates In September 2018, CIPA responded to a call for comments by the UK IPO on the Max Planck report and recommendations relating to the EU SPC regime. This was the latest instalment in the EU Commission’s review of SPCs and other pharmaceutical incentives, launched in 2017. As part the review the Commission requested studies on the legal and economic effects of SPCs, from the Max Planck Institute and Copenhagen Economics respectively, and also launched a public consultation (between October 2017 and January 2018). The reports were published in May 2018. The Max Planck report, a weighty document of over 700 pages, contained a series of detailed recommendations for possible amendment of the existing SPC regulation. The UK IPO then sought comments from stakeholders on these recommendations ahead of an Expert Group meeting at the Commission on this issue. The 33 recommendations followed by the comments (in purple text) of CIPA’s Life Sciences Committee are set out below.
1: Consolidated version of the Medicinal Products Regulation
We recommend adopting a consolidated version of the Medicinal Products Regulation. In such a version the provisions and recitals of the Plant Protection Products Regulation available pursuant to Recital 17 Reg. 1610/96 for the interpretation of Reg. 469/2009 should be adopted. These provisions are, specifically, articles 3(2), 8(1)(c) and 17(2) Reg. 1610/1996. The wording of Recital 9 Reg. 469/2009 is not in line with the wording of Recital 14 of the Plant Protection Products Regulation. Comments: The recommendation to incorporate articles 3(2), 8(1)(c) and 17(2) of Reg. 1610/1996 into Reg. 469/2009 seems sensible. However, our view is that it is not correct to say that Recital 14 of Reg. 1610/1996 is not in line with Recital 9 of Reg. 469/2009. This is because Reg. 1610/1996 contains a recital (no. 11) that precisely mirrors the wording of Recital 9 of Reg. 469/2009: Recital 9, Reg. 469/2009 “The duration of the protection granted by the certificate should be such as to provide adequate effective protection. For this purpose, the holder of both a patent and a certificate should be able to enjoy an overall maximum of 15 years of exclusivity from the time the medicinal product in question first obtains authorisation to be placed on the market in the Community”. Volume 47, number 12
1-pp09-18-LSC_10.indd 9
Recital 11, Reg. 1610/1996 “Whereas the duration of the protection granted by the certificate should be such as to provide adequate, effective protection; whereas, for this purpose, the holder of both a patent and a certificate should be able to enjoy an overall maximum of 15 years of exclusivity from the time the plant protection product in question first obtains authorization to be placed on the market in the Community”. Because they are present in the same Regulation, Recitals 11 and 14 of Reg. 1610/1996 must be in line with each other. For this reason, the true meaning of Recital 14 of Reg. 1610/1996 must be consistent with the true meaning of Recital 11 of Reg. 1610/1996. Indeed, it is immediately evident how the two Recitals are consistent with each other: a “derivative” in the sense of Recital 14 (i.e. a derivative that is the subject of a patent specifically covering it) is, for the purposes of Recital 11, a different product to the (underivatised) active substance. For this reason, we would also support incorporation of Recital 14 of Reg. 1610/1996 into Reg. 469/2009. 2: Reference to national law
The reference to national law included in the SPC legislation should be coordinated with the existence of a European patent alongside national patents and with the future existence of the UPC alongside national courts.
A general reference to the law applicable to national patents and to applications for a national patent should be included for any matter concerning the application for a certificate or the granted certificate which is not addressed by the SPC Regulations. The provision could read as follows: “The application for a certificate and the certificate shall, in each Member State, be subject to the same conditions and rules as an application for a national patent or a national patent granted by that State, unless this Regulation or the implementing rules adopted by the European Commission provide otherwise.” This provision would reflect the current practice in a number of States. Comments: We do not have any comments on this recommendation. 3: Updated definition of the term “medicinal product”
For the reasons explained in Chapter 9, we suggest adopting the following definition of medicinal product in article 1(a) Reg. 469/2009: “‘medicinal product’ means any substance or combination of substances presented as having properties for treating or preventing DECEMBER 2018
CIPA JOURNAL
9
09/12/2018 21:31:53
COMMITTEE
to either introduce changes in Reg. 1257/2012 (or Reg. 469/2009 and Reg. 1610/1996) or enact a separate act. • If the EPO is charged with the task, Member States must conclude a pertinent agreement with the European Patent Organisation. The conditions for the grant of SPCs as well as other relevant details concerning the activity must be set forth in an act of EU legislation. Furthermore, relevant steps by the Member States as well as by EU legislation must be taken in order to ensure that competence to decide on appeals concerning the grant of unitary SPCs is vested in the UPC. In addition to creating a unitary SPC system, we recommend that guidelines in the form of soft law as well as implementing regulations (to be issued by the European Commission) be developed in order to bolster the evolution of consistent and transparent practice in the Unitary SPC Division and the national offices (see Recommendations 25 and 26). Comments: Whilst we agree in principle with the concept of unitary SPCs, we do not think that it is sensible at this time to base it upon the current legislation governing unitary patents. This is because there are currently significant doubts regarding: – whether the unitary patent legislation will come into force; and – if the unitary patent legislation eventually comes into force, whether it will withstand legal challenges alleging incompatibility with EU law and/or national constitutions. Thus, in the absence of a robust and upand-running unitary patent system, and as an interim measure aimed at achieving greater harmonisation, we would favour the introduction of a SPC examination system modelled upon the “decentralised” procedure for obtaining Marketing Authorisations. That is, we would favour a system where: a. a single SPC application is filed in a Reference Member State (RMS, which should be a NPO that conducts full examination of all SPC applications); b. the application is filed together with a list of Concerned Member States (CMSs) in 18
CIPA JOURNAL
1-pp09-18-LSC_10.indd 18
DECEMBER 2018
LIFE SCIENCES
which the applicant intends the SPC to have effect; and c. once the RMS decides to grant an SPC, the CMSs are afforded a fixed period (e.g. no more than three months) to either grant a corresponding SPC in their territory or to raise objections on a limited number of grounds (e.g. article 3(d) only).
The options considered with respect to article 3(c) Reg. 469/2009 when it applied to applications for a national certificate are valid also in the case it shall apply to application for a unitary certificate.
In any event, in order to ensure that both the NPOs and the new, unitary granting authority have a sufficient number of individuals possessing both competence and experience in the examination of SPCs, our strong preference would be for a “virtual” EU authority (utilising examiners from the NPOs) to be the body tasked with granting unitary SPCs.
31: Substantive provisions – article 3(d)
29: Substantive provisions – article 3(b)
The creation of a unitary SPC with dynamic territorial scope is technically feasible. Whether it is really necessary for medicinal products is less clear. In most cases, and in any event in all cases where a new active ingredient is involved, European MAs will be available. By contrast, we recommend adopting for plant protection products the model of a unitary patent with dynamic territorial scope. Comments: We refer to our comments on Recommendation 28 above. Also, we are of the view that if a unitary SPC is introduced, it will be important to ensure that it can have a dynamic territorial scope.
Comments: We do not have any comments on this recommendation.
We do not recommend taking any action to adapt article 3(d) to the specific features of a unitary right. Comments: We do not have any comments on this recommendation. 32: Duration of the unitary SPC – article 13
We recommend maintaining unchanged article 13 and the principle laid down therein that the duration of the certificate shall be determined on the basis of the first MA – national or European – for the active ingredient concerned in the EU/EEA. No relaxation of this principle is recommended. Comments: We do not have any comments on this recommendation. 33: Procedural aspects – function of the granting office in appeal procedures
We recommend providing that, in the procedure introduced by an appeal lodged by the applicant for a certificate with unitary effect against a decision of the Unitary SPC Division to reject such application, the granting authority is party to the proceedings.
30: Substantive provisions – article 3(c)
We recommend maintaining the prohibition of double protection in the unitary SPC system, because it is consistent with the rationale for having a unified patent and SPC system. Article 3(c) shall prevent • national NPOs from granting a national SPC, when a unitary SPC has been granted for the same product with effect for that State; • the Unitary SPC Division from granting a valid unitary SPC when a national certificate has been granted for the same product with effect in at least one EU Member State participating in the enhanced cooperation.
Comments: We do not have any comments on this recommendation.
www.cipa.org.uk
09/12/2018 21:31:57
US update: (Claim) changes ahead USPTO proposals on motion to amend practice for AIA trials By Kyu Yun Kim and Erin Sommers .
T
he United States Patent and Trademark Office (USPTO) has proposed a pilot programme to implement changes to the current procedures for amending claims during post-grant proceedings, including inter partes reviews (IPR), post-grant reviews (PGR), and covered business method patent reviews (CBM).1 The pilot programme could go into effect as early as 14 December 2018, and applies to any postgrant proceeding instituted after thereafter.2 Consequently, this article provides an overview of this potentially imminent pilot programme, which includes a preliminary, non-binding decision on amended claims from the Patent Trial and Appeal Board (PTAB), as well as several additional opportunities for briefing and the submission of evidence, no matter which side of the “v.” parties find themselves.
Current amendment process Under the current procedures, a patent owner is permitted to file a motion to amend (MTA) after a post-grant proceeding has been instituted.3 In response, a petitioner may file an opposition. Briefing wraps up with one more reply from the patent owner. This general briefing schedule is provided in the figure below.4
Under the USPTO’s proposed pilot programme, what will change? Preliminary decision on a MTA Just as before, a patent owner may file an MTA, and the petitioner may oppose. Thereafter, according to the USPTO’s proposal, the Board would provide a preliminary, non-binding decision on the likelihood of success of the proposed claim amendments.5 Specifically, the USPTO has indicated that this preliminary decision would provide information relating to Volume 47, number 12
2-pp19-21-US-AIA-trial_3.indd 19
whether an MTA meets statutory and regulatory requirements, as well as information relating to the patentability of proposed substitute claims.6
Two alternate paths Depending on the Board’s initial evaluation of the amended claims in its preliminary decision, the case will proceed according to one of two alternatives.7 The course of subsequent briefing seems to be set based on which party the Board deems to have the burden of production. Specifically, if the preliminary decision indicates that the Board is reasonably likely to deny the MTA in relation to at least one substitute claim, Alternative 1 applies.8 In contrast, if the preliminary decision indicates that the Board is reasonably likely to grant the MTA in relation to all substitute claims proposed by the patent owner, Alternative 2 applies.9 The general briefing schedule for each alternative is provided in the figure below.10 Alternative 1: the MTA in jeopardy? If the preliminary decision indicates that the Board is reasonably likely to deny the MTA in relation to at least one substitute claim, the patent owner is given an opportunity to respond with evidence in support of the amended claims or to file further amendments.11 In particular, within a designated time frame after receiving the preliminary decision, a patent owner may file: (1) a reply to the petitioner’s opposition to the MTA and the preliminary decision; or (2) a revised MTA that revises the proposed new substitute claims and provides new arguments and/or evidence.12 If the patent owner files a reply to the petitioner’s opposition to the MTA and the preliminary decision, the petitioner may file a corresponding sur-reply.13 In this case, there is a potential for two DECEMBER 2018
CIPA JOURNAL
19
09/12/2018 14:18:34
Shifting sands of estoppel in US proceedings Statutory estoppel in inter partes review proceedings in the wake of SAS Institute v Iancu
Inter partes review (IPR) proceedings – something broadly equivalent to opposition in the EPO – were a welcome addition to defensive patent strategies in the US, and of specific interest to European practitioners who are familiar with the use of opposition. But they came with a sting in the tail: estoppel – or a bar – against raising in court proceedings the same issues or ones that could reasonably have been raised in the IPR. The developing law suggests that estoppel is now likely to be applied quite broadly not just in terms of prior art, but also in relation to the “parties in real interest” to which the estoppel may apply. Finnegan’s Ashley Winkler and Timothy McAnulty illustrate just how useful tools can also spin off into difficult satellite litigation as the parties argue of the scope of that estoppel. They also flag up warnings for anyone involved in unfinished IPR proceedings in the US about appeals from those proceedings, as well as the importance of careful strategic thinking in the use of IPR as a defensive tool. All food for thought in relation to proceedings outside the US. 22 CIPA JOURNAL
2-pp22-27-US-SAS_6.indd 22
DECEMBER 2018
I
n the years since the creation of inter partes review (IPR) proceedings, US courts and the US Patent & Trademark Office (USPTO) have continued to interpret and clarify the statutes, rules, and procedures governing these proceedings. One question that remains an important part of this developing area of the law is the scope and applicability of statutory estoppel under 35 U.S.C. §315. Particularly, after the Federal Circuit’s decision in Shaw Industries Group v Automated Creel Systems, and the US Supreme Court’s subsequent decision in SAS Institute v Iancu, the landscape surrounding IPR estoppel continues to shift. Understanding how courts are applying estoppel is essential to preparing effective strategies for petitioners and patent owners alike.
Background Statutory estoppel under section 315 In 2011, the Leahy-Smith America Invents Act (AIA) created new procedures for challenging patents before the USPTO. IPR is the most common type of these proceedings, permitting a party to petition the Patent Trial and Appeal Board (PTAB) to review the patentability of an issued patent based on challenges that one or more claims of the patent are anticipated or obvious under 35 U.S.C. §§102 or 103.1 An IPR petitioner may rely only on printed publications and patents dated before the effective fi ling date of the challenged US patent.2 The IPR proceeding can be divided into two separate phases. First, a panel of three PTAB judges must decide whether to institute IPR by determining whether the information presented in the petition provides a “reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.”3 If the panel declines to institute IPR, then the proceeding terminates. If, however, the www.cipa.org.uk
09/12/2018 14:05:32
US UPDATE
IPR is instituted, the second phase of the proceeding begins, and the panel reviews the merits of the instituted grounds. The proceeding terminates, generally within a year, with the panel issuing a final written decision.4 One legislative goal of IPR and other post-grant proceedings was to provide an opportunity to challenge a patent outside of district court litigation.5 But in creating such proceedings, Congress also recognized the need to protect patent owners from repeated and burdensome attacks. And Congress included statutory estoppel in 35 U.S.C. §315 as a consequence for petitioning for IPR. 35 U.S.C. §315(e)(1) sets forth the estoppel before the USPTO: “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 35 U.S.C. §315(e)(2) sets forth the estoppel in civil actions: “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” Estoppel is triggered when the PTAB issues a final written decision. And, under the statute, estoppel limits the challenges a petitioner – its real parties in interest or those in privity with it – can rely on in any other ongoing or later proceeding brought in a US district court, the US International Trade Commission (ITC), or the PTAB. The scope of this statutory estoppel, especially as to what challenges a petitioner “reasonably could have raised during” the IPR, has been debated and is likely to evolve.
Shaw and the scope of statutory estoppel under section 315 in district courts Section 315 states that estoppel results from the PTAB’s issuance of a final written decision, but courts have not reached consensus on the scope of that estoppel in ongoing or laterfiled civil actions. In particular, courts have questioned what challenges a petitioner actually raised or reasonably could have raised during an IPR. Nor has the PTAB definitively set forth its view on the scope of estoppel in ongoing or later-filed petitions. Before the US Supreme Court’s decision in SAS Institute v Iancu,6 the analysis for applying statutory estoppel was particularly complicated by PTAB procedures that allowed partial institution of IPR petitions. These procedures meant Volume 47, number 12
2-pp22-27-US-SAS_6.indd 23
PTAB
that the PTAB could institute some of the challenges raised in a petition and simultaneously decline, or deny, others. Only instituted grounds proceeded to a final written decision. This resulted in many IPRs where some challenges and even some claims were never addressed during IPR or in a final written decision. In 2016, the Federal Circuit approved this practice of partial institution in Synopsys v Mentor Graphics Corp.7 and SAS Institute v ComplementSoft,8 finding that there was “no statutory requirement that the Board’s final decision address every claim raised in a petition for inter partes review.”9 Because of partial institution, courts and practitioners alike were left questioning whether statutory estoppel would apply to petitioned but non-instituted challenges.10 The Federal Circuit offered guidance in Shaw Industries Group v Automated Creel Systems, when it held that estoppel under section 315 does not apply to claims or grounds that were not instituted.11 In Shaw, the PTAB partially instituted IPR with respect to some challenges and declined to institute the remaining challenges because it determined that they were redundant to the instituted grounds.12 On appeal, among other issues, the petitioner argued that it was improper for the PTAB to decline to institute grounds on the basis of “redundancy” and requested relief from the court.13 In particular, the petitioner argued that, without relief, it would otherwise be estopped from raising the noninstituted grounds in future proceedings.14 The Federal Circuit disagreed. The court explained that because “[b]oth parts of §315(e) create estoppel for arguments ‘on any ground that the petitioner raised or reasonably could have raised during that inter partes review’” and because “IPR does not begin until it is instituted,” it was impossible for the petitioner to have “raised or reasonably [to] have raised” the non-instituted grounds during IPR.15 Thus, according to the Federal Circuit, no estoppel applied to petitioned but non-instituted grounds.16 After Shaw, courts reached inconsistent conclusions with respect to the scope of IPR estoppel. Some courts applied Shaw broadly, finding that the Federal Circuit’s decision exempts any ground not raised “during” IPR, i.e., after institution. For example, in Verinata Health v Ariosa Diagnostics, the Northern District of California found that, under Shaw, estoppel applies only to grounds that were both raised in the petition and instituted in the IPR proceeding.17 There, the court reasoned that in Shaw, the Federal Circuit interpreted section 315 “literally,” limiting estoppel under the provision “to grounds actually instituted”, thereby ensuring “that estoppel applies only to those arguments, or potential arguments, that received (or reasonably could have received) proper judicial attention.”18 The District of Delaware reached a similar conclusion in Intellectual Ventures I LLC v Toshiba Corp., first acknowledging that extending estoppel to “prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding,” but nevertheless determining that “the court cannot divine a reasoned way around the Federal Circuit’s [literal] interpretation [of the statute] in Shaw.”19 DECEMBER 2018
CIPA JOURNAL
23
09/12/2018 14:05:35
FRAND licensing Does Unwired Planet v Huawei answer all the questions?
The Court of Appeal in Unwired Planet v Huawei1 upheld all Birss J’s first instance judgment on FRAND (fair, reasonable and non-discriminatory) licensing2 except on the question of whether there can be only one set of licence terms which are FRAND (see November [2018] CIPA 3-6), at least in the context of licensing standards essential patents (SEPs) relating to mobile telephones. David Hole succinctly reviews what questions may still remain, especially when applied to other fields where, as with the Internet of Things, applications are much more diverse.
28 CIPA JOURNAL
2-pp28-30-FRAND_3.indd 28
DECMBER 2018
T
he specific challenge arising with SEP licensing is the balance of risks between the owner of SEPs and the user (the “implementer”) of the SEPs: that is, between hold-out (where an implementer continues infringing, relying on a FRAND commitment of the patentee to say that no injunction should be granted and making injunctions hard to obtain) and hold-up (where the owner, having a monopoly right to an essential technology, refuses to license at an acceptable rate or on acceptable terms, or at all).
Good for the patentee Arguably, Unwired Planet v Huawei comes down firmly on the side of the patentee in finding that in certain circumstances a worldwide licence can be FRAND and that, should more than one set of terms be considered FRAND, it is permitted for the patentee to insist on one of these. The FRAND nature of a worldwide licence was assessed at first instance based on a number of factors: all of the comparable licences were worldwide; it was clearly industry practice for willing licensees and willing licensors to agree to worldwide licences (anything else would have been inefficient and resulted in “madness”); and the Unwired Planet portfolio had broadly comparable geographical scope to those in the comparable licences. The judge at first instance also held that a worldwide licence would not constitute anti-competitive bundling or tying based on CJEU case law, his own reasoning, and a lack of evidence which would be required to support a contrary finding. www.cipa.org.uk
09/12/2018 14:06:42
ARTICLE
The Court of Appeal went further, explicitly addressing the risk of hold-out that could arise if the proprietor could not insist on a worldwide licence in one court, but instead would have to initiate proceedings in many jurisdictions to secure royalties. In the CJEU decision in 2017 in Huawei v ZTE3, guidance was provided that an injunction could be issued if, in spite of reasonable behaviour by the patentee, the implementer did not progress negotiations for a licence in good faith. Because the Huawei v ZTE judgment was delivered while the Unwired Planet proceedings were ongoing, the latter was considered a “transitional” case, and so care should be taken when considering the manner in which Huawei v ZTE was applied. However, Huawei may now find itself with a UK injunction if it refuses to agree to a worldwide licence4. In the appeal, Huawei repeatedly challenged this on the grounds that the only patents at issue were UK patents. However, the appeal judges rejected Huawei’s arguments, and refused permission to appeal to the UK Supreme Court. Questions over the FRAND nature of a worldwide licence therefore appear to be largely settled5, though other issues certainly remain.
FRAND LICENSING
Counting patents As the author has discussed previously6 this case addressed head-on the challenges arising from the sheer number of patents involved. Although never intended as a basis for setting royalty rates, the lists of rights declared to standards organisations have become a de facto starting point. Some commentators have suggested that over-declaration, whereby such lists include non-essential and/or invalid rights, is a problem that needs to be solved, however, this is to misunderstand the primary purpose of the declarations7. Some over-declaration is inevitable because standards organisations – such as the European Telecommunications Standards Institute (ETSI) – may require applications to be declared before they become granted patents, and rights to be declared before the standard is stable. Both sides proposed approaches to deal with this, and while Birss J did not find either objectionable in principle, neither was wholly satisfactory and both were very timeconsuming and expensive. Evidence supporting claimed ‘essentiality ratios’ is likely to be required in any future litigation to support proposed rates based on ‘top-down’ calculations8 or comparisons with other known portfolios. Reliance on current industry practice The appeal court endorsed the approach of the judge to assess FRAND terms based on: “what a willing licensor and a willing licensee in the relevant circumstances acting without holding out or holding up would agree upon, general practice in the industry, and any relevant comparables”. Of course, concrete evidence for only the last two of these existed, and this was to be used to determine the first. As such, the extent to which the specific findings in this case (particularly around the rate calculations) are fact-specific cannot be over-stated. Although the mobile telecommunications industry is large and global, the number of implementers is relatively small, and their products are (or at least, have been) broadly similar in nature (being either standards-compliant network equipment or mobile handsets). This meant that there were a large number of comparable licences available, and industry practice was well established and well understood. Indeed, not only did the Unwired Planet judgment rely heavily on current industry practice to determine rates and terms, but the CJEU’s guidelines in Huawei v ZTE require the alleged infringer to “respond to that offer [from the proprietor], in accordance with recognised commercial practices in the field” (emphasis added) in order to avoid injunctive relief being granted. However, the increasing variety in products using a particular technology, and the flexibility being provided in
Volume 47, number 12
2-pp28-30-FRAND_3.indd 29
DECEMBER 2018
CIPA JOURNAL
29
09/12/2018 14:06:45
CPD & EDUCATION
INSTITUTE EVENTS
Institute Events For a complete list of CIPA events please see the website – www.cipa.org.uk/whats-on/events follow; keep an eye on our website blog. IP Inclusive is open to all IP professionals and those who work with them. Tuesday 22 January 2019 IP Inclusive Wednesday 12 December 2018 Seminar
IP INCLUSIVE’S ANNUAL GENERAL MEETING Time: 10.00-12.00
PATENT CASE LAW MANCHESTER Time: 12.30–17.30 Location: INNSIDE Manchester, 1 First Street, Manchester, M15 4RP Join CIPA for the final stop of the Patent Case Law Tour. Our panel will focus on interesting patent decisions to have come from UK and US courts, and the EPO Boards of Appeal in the past year. CPD: 3.5 Prices: £234 (£156 members).
Everyone is welcome to come along and hear what we’ve been up to over the last 12 months, and to help shape our plans for the future. RSVP to ipinclusiveevents@gmail.com. IP Inclusive is open to all IP professionals and those who work with them. Thursday 17 January 2019 IP Inclusive
ALLIES, ADVOCATES, AND SUPPORTERS Time: 17:30 – 22:00
Thursday 13 December 2018 Social
CAMBRIDGE HAPPY HOUR Time: 18.00–0.00 Location: Cambridge Blue, 85-87 Gwydir St, Cambridge CB1 2LG Join us for a glass of Christmas cheer. A chance to enjoy the Christmas festivities with other CIPA Members. This event is very popular so please book in advance. Please note this is a members only event and bookings are required.
Thursday 17 January 2019 IP Inclusive
ROLE OF ALLIES ***save the date*** A joint event by our three support groups (Women in IP, IP Out and IP & ME) about the role of “allies”. More details to 58 CIPA JOURNAL
4-pp58-59-cpd-CIPA-events_2.indd 58
DECEMBER 2018
This exciting, first-of-a-kind joint collaboration from the three support groups of IP Inclusive – IP & Me, IP Out, and Women In IP – explores how we can all be allies, advocates, and supporters for each other: a game changing concept to promote Diversity & Inclusion. Join our fantastic panel as they discuss their experiences and share tips, then mingle afterwards with a wide range of IP Inclusive supporters. Like others organised by these groups, this free event will be open to all IP professionals. The event will consist of a panel discussion, starting at 18:00, followed by a drinks reception. Panellists: • Charlotte May QC – Barrister, 8 New Square • David Cousins – Program Director, Application Integration Engineering, IBM • Daniel Winterfeldt – Partner, US
Securities, Global Capital Markets, Reed Smith; Founder and Chair, InterLaw Diversity Forum • Ros Lynch – Copyright and IP Enforcement Director, IPO. • Chaired by Andrea Brewster – Leader, IP Inclusive & Member of CIPA Council. Values to take away: • How can I show that I support diverse groups in the workplace, whatever level I am at? • What can I do to help make an atmosphere conducive to everyone’s success? • How can I help my colleagues feel free to be themselves? • How can my organisation signal that it is making a commitment to diversity and inclusion? Kindly hosted by Norton Rose Fulbright at their London offices. See IP Inclusive website to register.
Thursday 24 January 2019 Regional Meeting
MERSEYSIDE MEETING 2019 Time: from 12.30 Location: Hard Days Night Hotel, 41 North John Street, Liverpool, L2 6RR Join CIPA at the Hard Days Night Hotel for the first Regional Meeting of the year! Don’t miss out on talks from a range of speakers along with plenty of networking opportunities. See more details online. CPD: 3.5 Prices: £234 (£156 members).
www.cipa.org.uk
09/12/2018 14:14:50
CPD & EDUCATION
Tuesday 29 January 2019 Webinar
CONFLICTS AND MONEY LAUNDERING Time: 12.30–13.30 A look at the rules on money laundering and advice on the best approach to compliance and conflicts. Speaker: James Tumbridge, Venner Shipley CPD: 1; Prices: £72 (£48 CIPA members)
Thursday 31 January 2019 Seminar
THE INFRINGEMENT THAT CAME IN FROM THE COLD Time: 17.00–19.30 Location: CIPA, Halton House, 20-23 Holborn, London, EC1N 2JD Douglas Campbell, QC of 3 New Square will discuss the ‘Icescape’ case during this late-afternoon seminar. Details of the case include: • First IP trial in the Shorter Trial Scheme to reach the Court of Appeal – a threats action with counterclaim for infringement • First in-depth discussion by the Court of Appeal of the change to the law of infringement made by the Supreme Court in Actavis v Eli Lilly • Purposive construction is now “but the first stage in the determination of the scope of protection conferred” by patent claims • First example of a party losing on purposive construction but winning on doctrine of equivalents – even though Improver was not argued at all at first instance • First practical guidance as to how the doctrine of equivalents is to be applied • Court of Appeal rejects attempt to rely on contents of the EPO prosecution file in relation to doctrine of equivalents • Patent invalid since it was not entitled to priority – common general Volume 47, number 12
4-pp58-59-cpd-CIPA-events_2.indd 59
INSTITUTE EVENTS
knowledge cannot be relied upon to add to contents of priority document • Patentee’s defence that it did not know, or have reason, to suspect that its patent was invalid was rejected • Hence the threats could not be justified and the appeal was dismissed. CPD: 1 Prices: £96 (£72 members). The seminar is followed by refreshments
Wednesday 13 February 2019 Webinar
DESIGNS AT THE UKIPO AND AT THE EUIPO – FROM A FORMALITIES PERSPECTIVE
Thursday 28 February 2019 Webinar
OUTSIDE YOUR COMFORT ZONE: SOFTWARE & PATENTING Time: 12.30–13.30 A talk about how the EPO treats patent applications in the software area. The webinar will include some examples and compare the EPO approach with that in the UK and the US. This will be followed by some practice tips. Speaker: Michael Williams, Cleveland Scott York CPD: 1; Prices: £72 (£48 CIPA members)
Thursday 7 March 2019 Regional Meeting
Time: 12.30–13.30 Are you an IP Paralegal? If yes... book now to hear what you need to know if you are a formalities administrator tasked with filing designs. Speakers: Gary Doody and Andrew O’Connor (Keltie LLP) CPD: 1; Prices: £72 (£48 CIPA members)
1,0
EAST OF ENGLAND MEETING Time: from 12.30 Location: University Arms Hotel, Regent Street, Cambridge, CB2 1AD Join CIPA at the University Arms, Cambridge for the annual East of England Meeting! Don’t miss your chance to gain 3.5 hours of CPD. plus excellent networking opportunities – including a drinks reception. See online for updates to the programme.
0,8
0,6
0,4
0,2
0,0
CPD: 3.5 Prices: £234 (£156 members).
Thursday 14 February 2019 Regional Meeting
YORKSHIRE MEETING Time: from 12.30 Location: Radisson Blu, Leeds, The Light, The Headrow, Leeds, LS1 8TL Join CIPA for the annual Yorkshire Meeting. Don’t miss your chance to gain 3.5 hours of CPD. plus excellent networking opportunities – including a drinks reception. See online for updates to the programme.
Thursday 4 April 2019 Webinar
OUTSIDE YOUR COMFORT ZONE: DESIGNS Time: 12.30–13.30 The webinar will cover some of the key aspects of design law in the UK and Europe, and some of the latest developments in design regulations, practice and case law. Speaker: Alex Brown, Venner Shipley LLP CPD: 1; Prices: £72 (£48 CIPA members)
CPD: 3.5 Prices: £234 (£156 members).
DECEMBER 2018
CIPA JOURNAL
59
09/12/2018 14:14:54