Friday, April 17, 2015

Ferguson and Schneider on Enforcement of IP Rights in Africa

Vanessa Ferguson and Marius Schneider have published a paper titled Enforcement of Intellectual Property Rights in Africa in the April 2015 issue of the Journal of Intellectual Property Law & Practice, pages 269-79.  Here is a link to the article, and here is the abstract:
This article provides an overview of enforcement measures that are available to intellectual property right-holders on the African continent. Africa is rising—with comparatively high growth rates and a rising number of consumers—and so is the anti-counterfeiting challenge. There are, however, particularities when it comes to enforcing intellectual property rights in Africa which right-holders and practitioners will have to take into account.
The article examines the law and practice in relation to enforcement of intellectual property rights in the following countries and territories: Morocco, Algeria, Egypt, the African Intellectual Property Organization (OAPI), Nigeria, Ghana, Tanzania, Kenya, Uganda, Mauritius and South Africa.
The authors conclude that the enforcement of intellectual property rights in Africa remains a very complex issue, due to the absence of harmonisation of standards and procedures in relation to anti-counterfeiting measures. However, thanks to the efforts and the goodwill of right-holders, practitioners and law enforcement authorities, steady progress is being made when it comes to successful enforcement of intellectual property rights in Africa. 
Although most of the article focuses on measures against counterfeiting, there is also some discussion of border measures, preliminary measures, and civil and criminal penalties for infringement of IP rights generally, including under the Bangui Agreement to which the 17 OAPI states are members.

Wednesday, April 15, 2015

Drafting Around the Entire Market Value Rule?

Over at the Patent Damages blog, Chris Marchese published an interesting post a few weeks back titled Damages base--is the name of the game the claim?  Here's the set-up.  Under Federal Circuit precedent, the “entire market value” may serve as a royalty base only when “the patented feature drives the demand for an entire multi-component product,” and as a general rule the correct base is the “smallest salable patent-practicing unit.” LaserDynamics, Inc. v. Quanta Computer, Inc., 694 F.3d 51, 67 (Fed. Cir. 2012) (quoting Cornell Univ. v. Hewlett-Packard Co., 609 F. Supp. 2d 279, 283 (N.D.N.Y. 2009)).  However, as the court further clarified in Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308 (Fed. Cir. 2014), "the requirement that a patentee identify damages associated with the smallest salable patent-practicing unit is simply a step toward meeting the requirement of apportionment. Where the smallest salable unit is, in fact, a multi-component product containing several non-infringing features with no relation to the patented feature . . . the patentee must do more to estimate what portion of the value of that product is attributable to the patented technology. To hold otherwise would permit the entire market value exception to swallow the rule of apportionment. . . ."  Moreover, as explained in the even-more recent case of  Ericsson, Inc. v. D-Link Sys., Inc., 773 F.3d 1201 (Fed. Cir. 2014), the entire market value rule (EMVR) "actually has two parts, which are different in character."  The first is a "substantive legal rule" that the "the ultimate combination of royalty base and royalty rate must reflect the value attributable to the infringing features of the product, and no more. . . .  When the accused infringing products have both patented and unpatented features, measuring this value requires a determination of the value added by such features."  The second is an evidentiary principle, "applicable specifically to the choice of a royalty base," that "where a multi-component product is at issue and the patented feature is not the item which imbues the combination of the other features with value, care must be taken to avoid misleading the jury by placing undue emphasis on the value of the entire product."  Once the jury hears that the defendant earned $1 billion from sales of an infringing product, in other words, it may be difficult for it to avoid awarding an inappropriately large royalty; as the court puts it, the large number may "skew the damages horizon for the jury."  (So does that mean that use of the entire value of the end product as a royalty base is all right in a bench trial, as long as the value of the infringing component is properly apportioned?  That would seem to follow, I think.)

Anyway, suppose an inventor invents component ABC, and that ABC serves as a small component in a larger, multicomponent product such as a smartphone.  Would the inventor be well-advised to include at least one dependent claim comprising "ABC incorporated into a smartphone"?  In a case in which a defendant infringes by incorporating ABC into a smartphone, could the inventor then assert that, with respect to the infringement of the dependent claim, the "smallest salable patent-practicing unit" is ABC plus smartphone?  Sure, the inventor would have to apportion the value of the patented feature further, under VirnetX.  But now the jury has heard the entire market value of the end product, which is what the EMVR is supposed to prevent.

According to Mr. Marchese, the case law thus far is not very clear on this issue.  But perhaps it wouldn't be surprising if patent owners started to include claims like the hypothetical dependent claim above, just in case it could come in handy later on in the event of litigation.  Indeed, in Ericsson the Federal Circuit was willing to allow the jury to hear about comparable licenses that use the EMVR as the royalty base as long as the court, on request, gives an appropriate cautionary instruction.

Assuming we don't want the jury to hear that number, however, perhaps a way around the problem would be to recast the EMVR as requiring the identification not of the smallest salable patent-practicing unit, but rather the smallest salable unit that incorporates the inventive principle or "point of novelty."  In the above hypo, this would mean that "smartphone + ABC" is not the appropriate base, but rather the smallest component of the smartphone that practices ABC (the inventive feature).  But then we would be inviting disputes over what the inventive feature is.  This introduces yet another complexity, and might be particularly hard to pin down in a case in which the inventive feature is a novel and nonobvious combination of preexisting features.

Alternatively, perhaps judges simply could be required to apply the "smallest salable unit" rule as long as the infringing product infringes the broader, independent claim (ABC), even if it also infringes the narrower dependent claim (ABC + smartphone).

If neither of these options work, however, are we stuck with a potential way to draft around the EMVR?  Does it really matter, or should we be less suspicious of juries' ability to understand the principle of apportionment?  Presumably the issue is much less pressing in other countries, where jury trials in patent cases are nonexistent . . . .    

Tuesday, April 14, 2015

Patentable Subject Matter Symposium

This is a bit off the topic of patent remedies, but I will be speaking at the Fourth Annual University of Minnesota Law School Patent Symposium, cosponsored by Briggs and Morgan P.A., on Wednesday, April 29 in Minneapolis.  This year's topic is "Patentable Subject Matter Post Alice Corp. v. CLS Bank." Attendance is free and CLE credit has been applied for.  More information is available here.

Monday, April 13, 2015

Some New Papers on FRAND, SEPs, and Related Issues

1.  Denis Borges Barbosa has posted a paper on ssrn titled Patents, Technical Standards and Frand License Offerings Under Brazilian Law.  Here is a link to the paper, and here is the abstract:
The matter of RAND or FRAND licences in connection to patents deemed to be essential to the establishment of some technical standards, and subject to the rules of some Standard Setting Organizations (SSO) is a much discussed legal issue. At this moment this theme is reviewed by the courts of a number of different jurisdictions. As it also concerns some legal actions under course in Brazil, this study covers the aspects of local law that might be pertinent to such an issue. 
2.  Ben Jonson has published a paper titled Public Standards and Patent Damages, 14 John Marshall Review of Intellectual Property Law 199 (2015).  Here is a link to the paper, and here is the abstract:
Some markets require legislation in order to exist. The products and/or services offered by those markets may be covered by one or more letters patent. In certain of those markets, a situation arises in which a private party owns a right to exclude others from participating in that publicly-enabled market. These situations may be referred to “public standards.” Like their cousins in the private sector, public standards require special consideration when it comes to determining potential compensation to the patentee from its competitors. Following the lead of the Western District of Washington, this paper recommends a modification of the traditional Georgia-Pacific reasonable royalty formulation for a patent damages calculation. Specifically, this paper recommends that calculating damages for public standard patents should require an explicit, thorough consideration of the public interest in addition to the patents themselves and the relationship of the involved parties. Only then will the interests of the public be adequately protected.
3. Björn Lundkvist has posted a paper titled Competition Law as the Limit to Standard-Setting (forthcoming in Josef Drexl and Fabiana Di Porto (eds.), "Competition Law as Regulation," Edward Elgar, 2015).  Here is a link to the paper, and here is the abstract:
The aim of this paper is to provide an analysis of the application of EU competition law to standard-setting, by looking at case law under both Articles 101 and 102 TFEU. I will try to show that there is, and should be, a difference in competition law treatment of standards and standard-setting conduct depending on whether the market exposed to the standard is plagued with network effects or not. For markets with network effects, collaboration to create standards is benign, even pro-competitive, while access to such standards, if covered by intellectual property rights, may, in exceptional circumstances, be granted under competition law. On the other hand, agreements to decide standards for markets which do not display network effects should benefit from a heightened antitrust scrutiny, because these standard agreements may cause exclusionary anticompetitive effects. 
The last part of the paper devotes some attention to the Motorola and Samsung FRAND matters in the E.U., as well as the U.S. Federal Trade Commission's Google settlement order.

Friday, April 10, 2015

New Edited Volume on Compulsory Licensing

Reto M. Hilty and Kung-Chung Liu have published a new edited volume titled Compulsory Licensing: Practical Experiences and Ways Forward (MPI Studies on Intellectual Property and Competition Law, Springer-Verlag 2015).  Here is a link to the webpage and table of contents.  (Professor Hilty spoke about compulsory licensing at the conference on IP and the Public Domain at the University of Bayreuth that I attended this past February, and I am happy that our library has now acquired a copy of the new book.)  The book's chapters are divided among three parts:  Practice Across Jurisdictions (which includes the chapter by Philip Maume on compulsory licensing in Germany, which I mentioned here); The Operation of Compulsory Licensing Regimes; and Doctrinal Discussions.  A chapter by Ichiro Nakayama and Yoshiyuki Tamura titled Denial of Injunctive Relief on Grounds of Equity:  Situation in the U.S. and Japan discusses the application of the abuse of right doctrine in the Samsung/Apple matter last year (see also my blog post here).  The authors conclude nonetheless that in most instances Japanese courts grant the prevailing patent owner an injunction almost automatically, though there are a couple of copyright cases that have denied injunctions in exceptional circumstances (and the authors appear sympathetic to the idea of conferring greater discretion upon the courts to deny injunctions in appropriate cases).  Even so, they conclude, "the prospects regarding the adoption of the eBay doctrine do not look very promising."

Thursday, April 9, 2015

Yesterday's Ninth Circuit Oral Argument in Microsoft v. Motorola

I'm just passing this along from the Essential Patents Blog--I have not yet listened to the argument myself, but I imagine there are a lot of readers who will want to do so.  Tuesday's Essential Patents Blog provides a detailed pre- oral argument discussion of the issues on appeal.

Update:  I see that Florian Mueller also a write-up and a link to the oral argument video over at FOSS Patents.  

Wednesday, April 8, 2015

Hayman Capital: A Hedge Fund That Challenges Patent Validity

This article in today's Wall Street Journal is not directly relevant to the subject of patent remedies, but I thought it was pretty interesting and that readers of this blog might find it interesting too.  A hedge fund called Hayman Capital petitions for inter partes review (IPR) of certain drug patents while shorting the patent owner's stock (betting the price will go down).  (IPRs, a creation of the America Invents Act, are a means for challenging the validity of issued patents within the USPTO.)  An article in today's Bloomberg BNA Patent, Trademark & Copyright Law Daily (available here, but behind a paywall) discusses one Hayman-instituted challenge in particular.   Although the CEO of one of the firms asserts that IPRs have created "reverse patent trolls," I'm inclined to think that if the challenged patents are subject to invalidation, the fund is serving the public interest in challenging them; but I need to give the matter some more thought.   I wonder if there are any other firms like this, in the U.S. or elsewhere?