This week in IP: counsel fear DSA gaps, Intel loses $2.2bn case, WIPO releases IP stats

Brand owners told Managing IP this week that they fear counterfeiters will be able to exploit loopholes in EU plans for a proposed overhaul of online marketplaces, as scrutiny committees consider how to respond.

Counsel at a luxury fashion house, the Swedish Trade Federation, watch company Daniel Wellington, and a Finnish anti-piracy group say certain passages of the Digital Services Act (DSA) should be tightened to ensure greater accountability from platforms that host potentially counterfeit products.

Måns Sjöstrand, global head of IP and brand protection at watch company Daniel Wellington in Sweden, points out that, for example, the checks are only required of e-commerce platforms and do not extend to social media sites or domain registrars.

“It’s quite a narrow scope. Marketplaces are not the only platforms that play a wider role in the sale of counterfeits,” he says.

Click here to read the full article. 

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In Judge Alan Albright’s second jury trial, VLSI Technology was awarded $2.18 billion in damages after a jury ruled on Tuesday, March 2, that Intel infringed two of the plaintiff’s patents.

The jury, at the District Court for the Western District of Texas, ruled that the patents belonging to the Fortress Investment Group subsidiary were valid and that Intel did infringe, but that the infringement was not wilful.

It awarded VLSI Technology $1.5 billion for US patent no. 7,523,373 and $675 million for no. 7,725,759. Intel plans to appeal the decision.

Intel had asked to delay the trial because of COVID, but Albright rejected this request. The case was postponed by a week, however, because of the winter storm that hit Texas last month and caused millions to lose power.

VLSI Technology v Intel was the second patent jury trial to take place in Albright’s court since his appointment in 2018, and it was the first plaintiff victory. The first jury trial, in MV3 v Roku, ended in December 2020 with a victory for the defendant.

Albright’s promise to adjudicate proceedings faster than the Patent Trial and Appeal Board, as well as his experience in patent litigation, has made the Western District of Texas an appealing forum for plaintiffs. 

Trademark and design applications decreased year-on-year for the first time in more than a decade, data from WIPO released on Tuesday, March 2, has revealed.

According to WIPO, international trademark registrations using the Madrid system fell by 0.6% to 63,800 in 2020. It is the first year-on-year decline since the global financial crisis in 2008.

The US was the top country, filing 10,005 trademark applications, followed by Germany (7,334), China (7,075), France (3,716) and the UK (3,679).

According to WIPO, the decline was expected given that trademarks “tend to represent the introduction of new goods and services – both of which slowed as a result of the global pandemic”.

Switzerland-based Novartis, which had 233 applications, headed the list of filers. The company made 104 more applications in 2020 than it did in 2019.

Novartis was followed by China’s Huawei (197 applications), Japan-based Shiseido Company (130), ADP Gauselmann of Germany (123) and France’s L’Oréal (115).

The economic fallout from the pandemic also hit demand for the protection of designs.

According to WIPO’s data, there were 18,580 design applications in 2020 – a decline of 15% since 2019 and the first annual decline since 2006.

However, international patent applications continued to grow. China and the US, the top two applicants, both marked an annual growth in filings.

Overall applications, filed via the Patent Cooperation Treaty, grew by 4% to reach 275,900 – the highest number ever, according to WIPO.

China filed 68,720 applications, a year-on-year growth of 16.1%. The US filed 59,230 applications, followed by Japan (50,520) and South Korea (20,060).

The UKIPO confirmed on Tuesday, March 2, that it planned to end its temporary fee period on March 31 and scrap the 25% surcharge for late payment on patent application fees.

The IP office introduced temporary fee changes for patents, supplementary protection certificates (SPCs), trademarks and registered design rights in July 2020, scrapping surcharges and waiving late declaration and reapplication procedures.

In a statement this week, the UKIPO said: “The IPO has reassured customers that it will continue to take whatever measures it can to support rights applicants, rights holders and representatives who have been affected by the coronavirus pandemic.”

Under the temporary arrangement, fees for reinstating patent applications, applications to restore patents, late payment of renewal fees and SPC late payments, among other fees, were scrapped, but will be reinstated at the end of the month.

Fees for late payment of trademark renewals and requests to restore trademarks will also be brought back in.

The UKIPO is just one of many IP offices that lowered or removed fees during the COVID pandemic. In June 2020, the USPTO further extended fee payment deadlines to small businesses.

On Monday, March 1, the US Supreme Court heard oral arguments in Arthrex v Smith & Nephew, a case on whether Patent Trial and Appeal Board judges were constitutionally appointed.

The first question of the case was whether administrative patent judges (APJs) were either principal officers, who must be appointed by the president on advice of the Senate, or inferior officers, who could be appointed by a department head.

The second question, if APJs were principal officers, concerned whether the Court of Appeals for the Federal Circuit properly cured any appointments clause defect in the current statutory scheme in a 2019 decision.

Some attorneys expect a ruling that upholds the Federal Circuit decision that APJs are principal officers.

Brad Lane, shareholder at Brinks Gilson & Lione in Chicago, said Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett seemed to question whether the America Invents Act regime was enough to characterise APJs as inferior officers.

Matt Rizzolo, partner at Ropes & Gray in Washington DC, agreed that the majority of justices seemed inclined to affirm the Federal Circuit finding.

Rizzolo said some justices expressed concern that a ruling that APJs were unconstitutionally appointed could call into question the constitutionality of countless other government officials.

But, he said, the court may have a path to limit any ruling to situations where officers were acting in an adjudicatory capacity. 

Lane added that although Arthrex may get the court to agree that APJs are principal officers, it will be unlikely to persuade the justices to deem inter partes reviews of patents unconstitutional.

On Tuesday, March 2, the US Chamber of Commerce issued a statement opposing a proposed temporary WTO waiver for all COVID-19 related IP.

The chamber called the proposal “misguided” and a “distraction” from the work of manufacturing and distributing billions of vaccines for the world’s citizens.

“Diminishing intellectual property rights would make it more difficult to quickly develop and distribute vaccines or treatments in the future pandemics the world will face,” a statement said. 

The proposal was introduced by India and South Africa in October in an effort to obtain what they saw as equal access to vaccines and therapies for poor countries.

Several members of the WTO, including the US, the UK, Canada and the EU, have come out against the proposal, arguing that poor countries can take advantage of so-called TRIPS flexibilities that allow for compulsory licensing.

The South African delegate to the WTO argued in November that many poor countries do not have compulsory licensing laws, and even for those that do, a “product-by-product” approach would be restrictive in the middle of a pandemic.

The International Federation of Pharmaceutical Manufacturers & Associations, which represents the interests of pharma companies, has stated that IP rights are not blocking vaccine manufacturing, and that strong IP protection is necessary to incentivise the research needed to discover vaccines.

Another hearing on this matter has been scheduled at the WTO for next week

On Friday, February 25, the Munich Regional Court affirmed a preliminary injunction against Chinese electronics company Xiaomi for infringing InterDigital’s 3G and 4G standard essential patents.

The injunction follows a September decision by the Wuhan Intermediate Court, which issued an anti-suit injunction banning InterDigital from filing global lawsuits against the Chinese company until the court had ruled on its licensing agreement.

Additionally, the Chinese court issued an injunction barring InterDigital from trying to overturn its decision.

In November, the Munich court rejected both Chinese orders prohibiting InterDigital from pursuing litigation against Xiaomi, and the Chinese company quickly filed an appeal against a preliminary injunction.

In the ruling issued last week, the German patent judges denied Xiaomi’s request.

“From a German perspective, the Chinese court quite obviously lacks international jurisdiction for this declaratory action against the InterDigital defendants, all of whom are domiciled in the United States of America, insofar as they do not enter an appearance before the court in Wuhan without reproach.”

In response to the decision, a source told Managing IP: “I am not aware of any instance in which an anti-anti suit injunction has been requested and denied. The reason for this is because a true anti-suit injunction is an extraterritorial effort to deprive a party of its foreign national rights.

“An anti-anti suit injunction says one thing, which is ‘stop either seeking or enforcing an anti-suit injunction’. Anti-anti suit injunctions do not deprive any party of substantive legal rights – they merely maintain or reset the original playing field.”

The Munich court took a step further and said that the pursuit of an anti-suit injunction was proof that an entity was unwilling to enter into a fair, reasonable and non-discriminatory licensing agreement.

“A patent user who files an application for an anti-suit injunction or threatens to do so cannot, as a rule, be considered sufficiently willing to grant a licence within the meaning of the case law of the Court of Justice of the European Union and the Federal Court of Justice.”

The England and Wales High Court handed a double victory to rights owners in the music industry on Thursday, February 25, by ordering major internet service providers to block access to stream-ripping websites.

In two rulings, Mr Justice Robert Miles found that the operators and users of the websites Flvto and 2Conv used the services of ISPs to infringe copyright, and that the ISPs should block access to them.

The cases were brought by the British Phonographic Industry (BPI) on behalf of major and independent record companies.

The BPI’s targets were a major cyberlocker called Nitroflare and a number of stream-ripping sites including Flvto and 2Conv – described by the BPI as two of the world’s biggest sites of this kind. Some of the sites also provided or linked to a downloadable stream-ripping app called MP3 Studio.

Cyberlockers encourage users to upload music and other copyright-protected material, and share links to it with others to download.

Stream-ripping sites take songs from services such as YouTube, Facebook and Instagram, enabling users to download and listen to the music illegally without any payments going to rights owners.

According to the BPI, stream ripping and cyberlockers are the music industry’s biggest piracy threats.

Legal music streaming now accounts for 80% of music consumption in the UK and is helping the industry return to growth after years of piracy-driven decline, the BPI added.

The ruling applies to the UK’s six biggest ISPs: BT, EE, PlusNet, Sky, TalkTalk and Virgin Media.