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Intellectual Property Enterprise Court expands its small claims track outside London

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Bristol Civil Justice Centre – photo depositphotos / jaceksphotos

In the new IPEC guide issued last week, it was rather quietly announced that from October 2019 District Judges will be available in Birmingham, Bristol, Cardiff, Leeds, Manchester and Newcastle to hear intellectual property small claims. This will be welcome news for businesses and individuals in the regions who will now have easier access to the court system to resolve certain small-scale IP disputes.

Since it was set up in 2012, it is difficult to present the history of the IPEC small claims track as anything but a resounding success.  The value of an individual small claim is low (at least, relatively low) but the importance of being able to effectively enforce IP rights at low cost is invaluable in certain industries. Professional photographers in particular have been able to use the system to obtain good compensation for infringements that have occurred, and no doubt deter a great many infringements that as a result have not occurred.

At the same time, small business and individual defendants faced with certain spurious or unjustified allegations that they have infringed intellectual property rights have been able to have their side of the story heard, without the fear that the legal costs involved give them no option but to “settle and pay up”.

An IPEC small claim will typically be dealt with by directions being given on a judge’s review of the paper file, and a final hearing being allocated with a time estimate of one day. In the vast majority of cases it will be necessary for the Claimant to attend the final hearing themselves as a witness, whether or not they choose to be represented by a lawyer. The availability of the “Business and Property Court centres out of London” – the new and rather more descriptive name for what you may still see called the “Chancery District Registries” – is therefore a significant improvement in the accessibility of the Court to litigants far from London.

For “multi-track” cases, those which are too high-value or too complex for the small claims procedure, the IPEC guide has stated for many years that the judges are able and willing to sit outside of London.  Perhaps litigants and their lawyers were afraid to ask, because the first such trial outside London took place in Birmingham in October 2018.  HHJ Melissa Clarke, the judge in the case, commented “I do not know why it has taken so long”.

From time-to-time we have seen intellectual property cases issued in the County Court via the “money claim online” procedure.  The rules make it quite clear that this is not allowed (63.13, Civil Procedure Rules if you want to look it up).  Where a claim is wrongly issued by this route, it almost always serves to increase the time and cost of resolving the dispute.  Given the availability of IPEC small claims outside London, there is no excuse now.  An intellectual property claim must be issued in the correct court.

We look forward to the continued success of the Intellectual Property Enterprise Court and expect that this latest development will further assist those who rely on intellectual property, and a reliable and accessible court system to enforce it, for the success of their own businesses and livelihoods.

Eviction Day for China’s Trade Mark Squatting

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China’s Trade Mark Squatters

 

Adjust your Yuletide calendars to 1st November because Christmas is coming early this year.

 

On the 23rd April 2019, China’s legislators passed significant amendments to their Trade Mark legislation to combat the scourge of bad-faith Applications, more commonly known as ‘Trade Mark squatting’.

 

Many brand owners will be familiar with the term, ‘Trade Mark Squatting’ and understand it to be the act of pre-emptively registering a Trade Mark in an available territory, before the ‘rightful’ owner secures registration. In the most extreme circumstances, Trade Mark squatting can undermine a brand to the extent that territorial expansion is impossible, and the only option is to migrate to an alternative brand, with all the costs and loss of reputation that would be associated with that.

 

Most infamously associated with this problem is, China. Unfortunately, it is common for brand owners entering the Chinese market to find their Trade Marks have already been filed or registered by an unrelated third party. Sometimes the illegitimate filing will be lodged within hours of the genuine owner publicising their impending launch, or at the stage when commercial discussions are being held with local distributors. As the official fees are low, squatters are not deterred from filing hundreds of Trade Mark applications, in the hope of receiving a ransom from at least some of the aggrieved brand owners.

 

Moreover, nor are they deterred by the deep pockets or celebrity of their victims. For example, the following are brand names that have been filed/registered by parties unrelated to the genuine owners: Bentley, Bosch, Hugo Boss, Macy’s, Michael Jordan and Viagra. To name but a few!

 

Whilst there are options available for brand owners to wrestle their Marks free from squatters, they are often onerous and costly. So much so, that it is sometimes easier to give in to the squatter’s demands, or rebrand entirely.

 

HOWEVER, all is not lost. As a welcome first step in combatting this unfair practice, and to restore confidence in their system, China intends to implement new legislation that will bring about the rejection of any new Trade Mark applications filed without a bona fide intention to use. Essentially, new applications can be refused during examination, if the Applicant does not demonstrate sufficient proof that they intend to exploit their Mark in commerce. The expected result is a decrease in the amount of Trade Marks being ‘stolen’ in China.

 

How this will work in practice remains to be seen. At present, it is unclear what body of evidence will be required to prove an intention to use, and whether this will be adequately evaluated. However, combined with other proposed amendments to the Chinese practice, victims of Trade Mark squatters will have further opportunities to oppose or invalidate these bad-faith Registrations. For example, if a malicious Trade Mark application is not stopped during the examination phase, there is still hope it can be terminated during Opposition or post-Registration. Moreover, coupled with new penalties against bad-faith registrations, and very hefty fines for those found to have relied upon a bad-faith registration in litigation; the system underlying Trade Mark registration in China could soon be a much friendlier environment for foreign Applicants.

 

What this Means for Your Brand

 

Whether these new legislative changes are effective or not, companies interested in expanding their brand portfolio to China should always endeavour to obtain a Trade Mark registration as soon as possible. It will remain a ‘first come, first served’ country, i.e., securing the earliest possible filing date will continue to matter.

 

Whilst we remain cautiously optimistic that the new practice will provide recourse against Trade Mark squatters, it has been reported that Chinese Trade Mark examiners have on average only 10 minutes of inspection time per Application, and in 2018 over 7 million Applications were filed in China. With such a small window to reject bad-faith Applications, registering your brand in China as soon as possible is, and will likely always be, the best practice for protecting your brand. Get there first, and deny others the opportunity of beating you to it!

 

Can I wait to file a patent application?

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Can I wait to file a patent application?

 

For start-ups that are building their business around an innovative product, preventing more established companies from copying their idea by having a patent granted is essential. However, there are plenty of other essential aspects of a business which need attention when just starting out.

 

Therefore, is it possible for a start-up to defer filing a patent application, to allow funds to be spent on other areas of the business?

 

Why would I not be able to wait?

 

One of the chief requirements of obtaining a patent is “novelty”. Therefore, your idea must be completely new compared to what is already publicly available at the time of filing the patent application.

 

In general (read on to find a notable exception), patent offices do not distinguish between who made the idea available. Therefore, if you wait to file a patent application and start selling or marketing your product beforehand, then you may be prevented from obtaining a patent.

 

Even if you are not intending to publish or market your product just yet, someone else may have come up with a similar idea. Waiting to file your patent application increases the chance of someone else disclosing or filing for a similar idea – preventing you from obtaining a patent to that idea.

 

“Enabling disclosure”

 

To destroy the novelty of your invention, you would need to publish enough information to allow someone to recreate your invention.

 

In the case of a physical product, selling the product would likely destroy your chances of protecting the product itself. However, the method used to make the product may be the clever idea you want to protect.  If this method is not discernible from looking at the product, and if you have kept the method confidential, then you may still be able to protect this, even after launching. Additionally, if you only publish pictures of the exterior of your product (for example for crowdfunding campaigns), and these do not reveal how the product works, then you may still be able to obtain a patent to the workings of the invention.

 

In the case of an app, if the clever way the app works is locked away behind the scenes and is not apparent from the software which is distributed, then it may still be possible to protect this aspect of the app, even after launching.

 

In the above examples, it would be crucial that the method of production and working of the app be kept confidential. Non-disclosure agreements should always be used if such information must be disseminated to potential business partners or developers.

 

The notable exception

 

The United States (among a small number of other countries) provides a 12-month grace period for inventor disclosures. Therefore, if you publish your invention, this publication and any third-party publications going to the same published material won’t work against your US patent application. This is as long as you file for a patent within 12 months of your first publication.

 

However, other key markets (such as the UK, Europe and China) do not have such grace periods, so this strategy would result in a loss of ability to obtain protection in these markets.

 

Design protection

 

Whilst the UK and Europe do not have a grace period for patents, they do have a 12-month grace period for registered designs. Therefore, if you are only interested in protecting the way your product looks in these territories, you can market your product first, and file for a registered design within 12 months.

 

However, this strategy is not without risks as your registered design can be knocked out if a third party independently derives and publishes the same or a similar design before you file your registered design.

 

Additionally, China, among some other countries, do not have such design grace periods.

 

Conclusion

 

As a general rule of thumb, do not wait to protect your intellectual property (IP), whether that is by way of a patent, trademark and/or design. The IP in your business can be one of the most valuable assets within a few years. Stake your claim to it before someone else does.

 

Furthermore, selling or marketing your invention before filing a patent application would usually prevent you from obtaining a patent downstream. However, if the concept of your invention is not discernible from the product you sell or market, it may still be possible to protect it even after launch. But this is risky. Determining whether and where protection can be obtained in these instances can be complex. If you would like advice on this or on any other aspect of intellectual property, please do not hesitate to contact us on 01242 691 801.

 

How Disclosing Your Invention Can Prevent You From Obtaining a Granted Patent

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Starting a business is an exciting adventure to embark upon. Unfortunately, Intellectual Property (IP) is too often an after-thought and mistakes made early on in the process can be detrimental to obtaining IP rights.

 

Take patents for instance. In order to obtain a granted patent in the UK, at the time of filing a patent application, the invention must be novel (i.e. unknown in the whole world) and inventive (i.e. not obvious).

 

Looking more closely at the novelty requirement in the UK, the Patents Act 1977 states that:

 

“(1) An invention shall be taken to be new if it does not form part of the state of the art”,

 

and defines the state of the art as comprising:

 

“all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of that invention been made available to the public (whether in the United Kingdom or elsewhere) by written or oral description, by use or in any other way” (see section 2 of the Patents Act 1977).

 

In essence, disclosing your invention publicly could prevent you from obtaining a granted patent because your invention will not be considered to be “new”.

 

So how do I know if I’ve publicly disclosed my invention?

 

You are likely to have disclosed your invention publicly if, before filing a patent application, you have:

  • Talked to investors, business partners, friends, or potential clients about your invention
  • Blogged, vlogged, tweeted, written about or posted images of the invention on a social media platform
  • Got a Kickstarter page in which the invention is disclosed
  • Posted a document about your invention on a website
  • Been on Dragons’ Den
  • Given a talk to an audience or displayed a poster at a conference,
  • Published a book or thesis which is on open shelves in a public library, even if no-one has ever read the book
  • Published an article, an abstract, or a grant proposal
  • Given away or sold samples
  • Shown your invention at an exhibition (with some exceptions)
  • Used the invention in a public place

 

There are, however, caveats to be voiced about the above list.

 

Confidentiality

 

Any disclosure in confidence, for example under a Non-Disclosure Agreement (NDA), will not be considered as a public disclosure. For a free, template Non-Disclosure Agreement, please click here.

 

Please note however, that any IP-related discussion you have with a chartered patent attorney or trademark attorney in the UK, such as those here at Albright IP, will be considered as confidential (i.e. not public), without you needing to sign an NDA first. This is because legal advice privilege applies to chartered patent and trademark attorneys.

 

Website postings

 

With regards to website disclosures, the European Board of Appeal provided the following two-step test to clarify when posting a document on a website constitutes a public disclosure.

 

If, before the filing or priority date of the patent or patent application, a document stored on the World Wide Web and accessible via a specific URL

 

(1) could be found with the help of a public web search engine by using one or more keywords all related to the essence of the content of that document and

 

(2) remained accessible at that URL for a period of time long enough for a member of the public, i.e. someone under no obligation to keep the content of the document secret, to have direct and unambiguous access to the document,

 

then the document was made available to the public […].

 

Therefore, if you post about your invention online, and if your posting remains online long enough and can be found by typing keywords into a public search engine (such as Google®), then the posting can be cited against your own patent application.

 

You should also, therefore, assume that the same approach will be taken by the UK Intellectual Property Office.

 

Emails

 

In a related case, the European Board of Appeal decided that the act of sending an email via the Internet does not constitute publicly disclosing the email’s contents.

 

Keep in mind, however, that the recipient of an email disclosing the invention needs to be under a confidentiality agreement – otherwise, the email contents could be considered as a public disclosure.

 

I think I’ve disclosed my idea publicly. Does that mean I can’t get a patent granted anymore?

 

Not necessarily.

 

To count as public disclosure, the disclosure also needs to be “enabling”. This means that enough detail needs to be disclosed so that someone “skilled in the art” could deduce how the invention works, for example, see Lux Traffic Controls Limited v Pike Signals Limited [1993] RPC 107, 132-135.

 

If your public disclosure is enabling, it may invalidate only part of your patent application. For example, you may have disclosed how the invention works but not how the invention is made. In this case, you may still be able to get a granted patent for the method of manufacture.

 

Where you have publicly disclosed everything about your invention, then patent protection in the UK or in Europe may no longer be an option. However, in some countries outside of the UK and Europe, you might still be able to rely on a grace period to get a patent granted, for example, in the USA. Alternatively, you may still be able to obtain another form of intellectual property in the UK or in Europe such as a registered design, due to the existence of a grace period.

 

Finally, it is worth highlighting that a public disclosure will only be detrimental if it is done before filing a patent application containing all the details disclosed.

 

In summary, avoid disclosing anything about your invention before you file a patent application, and make sure that any disclosure is done in confidence. If you are unsure on what to do, you can always talk to Albright patent attorneys or trademark attorneys for IP-related advice.

 

Victory for ‘Peppa Pig’ – Peppa’s win on Trade Mark Invalidity Claim

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The owners of a hugely popular British animated series, ‘Peppa Pig’, have successfully won their bid to invalidate a Mark, arguably evocative of their well-known ‘Peppa Pig’ character.

 

Peppa Pig first graced our TV screens back in May 2004, and has since become one of the most well-known, and most popular British children’s TV programmes of all time. The rise of ‘Peppa Pig’ has, quite naturally, created a multitude of extremely lucrative commercial opportunities for the owners, Entertainment One and Astley Baker, who are now appearing to be more actively enforcing and policing their Peppa Pig-related IP rights than ever before.

 

One of the most recent cases involving ‘Peppa Pig’ has been the invalidation claim brought against an EU Mark filed for by Xianhao Pan. The invalidity claim perhaps comes as no surprise when one views the Marks in issue side-by-side, as displayed below:

 

Xianhao Pan’s ‘TOBBIA’ Mark The ‘Peppa Pig’ Mark

 

Background

 

In 2013, Xianhao Pan was granted an EUTM for the ‘TOBBIA’ Mark in Class 25, for clothing, footwear and headgear. The Mark is in the colours, pink, red, yellow and blue, and is said to depict a ‘tapir head on a human body’, with the words ‘TOBBIA’ in bold and black text underneath.

 

This was argued to be confusingly similar to the Peppa Pig creators’ earlier black and white mark, registered for the same goods. The earlier Trade Mark depicted the famous cartoon character, Peppa, with the words ‘PEPPA PIG’ underneath, in black and bold text.

 

When the case was first heard by the EUIPO Cancellation Division, rather controversially, they ruled that the two Marks were not confusingly similar, upholding the validity of the ‘TOBBIA’ Mark. On appeal in 2017, a U-Turn decision was made, and the ‘TOBBIA’ Mark was invalidated on the finding that the Marks were visually, phonetically and conceptually similar.

 

The General Court’s Decision

 

Following a round of appeals before the Board of Appeals of the EUIPO, the General Court concluded earlier today, 21 March 2019, the invalidity of the ‘TOBBIA’ Mark. Despite noting the differences in terms of the colours of the Marks in issue, it ruled that these differences, considered overall, did not outweigh the similarities.

 

In the appeal to the General Court, the owner of the ‘TOBBIA’ Mark argued that the Board of Appeals had failed to state the reasons for going against the first decision by the Cancellation division, but the General Court was quick to confirm that it was sufficient for the Board of Appeals to only state the reasons on which its own decision is based, and that an obligation did not extend towards identifying the incorrect aspects of the Cancellation Division’s decision.

 

Undoubtedly in agreement with the preceding Board of Appeals’ decisions, it was confirmed that ‘the average consumer normally perceives a mark as a whole’, without engaging in lengthy analysis as to the various details, and therefore, it was right to find that the Marks were visually similar overall.

 

Most interestingly, the General Court also remarked approval of the Board of Appeals’ previous assessment, which found a certain correlation between the word ‘tobbia’ and ‘peppa’, in the sense that both words contain the reiteration of a strong consonant, namely, the ‘B’ in ‘tobbia’ and the ‘P’ in ‘peppa’.  Although not verbally similar therefore, it seems that there was a consensus that the structural correlation and extremely similar graphical elements in the Marks rendered an impression of similarity in the minds of the consumer, who might consequentially come to view the Marks, and also the respective goods, as being related in some way.

 

Despite assertions from the owner of the Mark that the ‘TOBBIA’ Mark depicted a tapir, rather than a pig, the court considered it unlikely that the public would at all associate the Mark with a tapir, consequently finding there to be conceptual identity in the Marks, in the sense that they both represented a pig.

 

Consequently, when considering the overall similarities from a visual, phonetic and conceptual perspective, the invalidity decision was upheld.

 

Conclusion

 

Whilst today’s decision may seem an overly generous stretch in favour of the creators of Peppa Pig, at least, when it comes to the court’s apparent approval of the ‘correlation’ between the ‘strong consonant’ elements of the Marks, the decision of the court does not appear all that surprising. A side-to-side comparison certainly highlights the ‘TOBBIA’ Mark’s eerie resemblance, highly reminiscent of the famous pig character. Given ‘Peppa Pig’s reputation, there is certainly a likelihood that consumers might come to perceive the Marks, and the respective goods, as being somehow associated and/or connected to the Peppa Pig franchise. Like it or not, what would have undoubtedly been interesting in the court’s decision would have been a more thorough discussion, or at least, a reference to the previous grounds raised by the owner of the ‘Peppa Pig’ Mark, specifically, the conflicts with the earlier copyright.

 

Cost-effective biotechnology searches in the UK

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If you have an invention in the field of biotechnology, you should consider filing a UK patent application first. It could save you money on search fees, and give you an idea of patentability in Europe without even filing a European patent application.

 

UK co-operation with Europe

 

Biotechnology-related applications have been accumulating at the UK Intellectual Property Office (UK IPO) for some time, partly due to a lack of suitably qualified examiners.

 

The UK IPO has invested in recruiting and training new examiners, according to their press release, but it will take time for those examiners to become fully proficient at what they do. This is expected to remain the case until sometime in 2019, based on a letter in March 2018 from the UK IPO to the EPO (see Annex 1).

 

In the meantime, the UK IPO has established an agreement with the European Patent Office (EPO), which came into force on 1st July 2018. The agreement will see some biotechnology applications sent over to the EPO for an official search. The first batch of applications to be searched was sent to the EPO in November 2018.

 

How could this benefit you?

 

The official search fee for a UK patent application is normally £150 (GBP). The official search fee for a patent application filed at the EPO is normally €1300 (EUR). The UK IPO will decide which applications get sent to the EPO for a search, and this is expected to be around 200 to 300 applications per year. If you’re lucky, your UK patent application might be one of the ones searched by the EPO, seemingly without the need to pay the much higher European search fee.

 

In addition, if you later file an equivalent application at the EPO which claims priority to a UK application searched by the EPO, the EPO search fee will be partly or fully refunded. Details of the exact level of the refund vary – see the EPO Official Journal of January 2019 for further information.

 

Is it worth patenting in the UK first?

 

It may be a bit of a lottery as to whether your application will be searched by the EPO. However, if it is sent to the EPO for searching, then you may get a direct indication of patentability in Europe before incurring costs for filing a European patent application. Similarly, for a PCT application which has not been searched by the EPO, entering the UK national phase early could be a good strategic move, since you may get an EPO search before you decide whether to incur significant costs for European regional phase entry.

 

Even if you are certain to file in Europe, filing a UK patent application first might still be a good idea, if the EPO-sourced search report includes the usual written opinion. This could be very valuable indeed, particularly if there are objections to sufficiency or plausibility which can be difficult to resolve after filing. Instead, you may get advance knowledge of potential problems and be able to pre-emptively update the patent specification before you file in Europe.

 

If you’d like further advice on patents or any other aspect of intellectual property protection or enforcement, please contact us to speak with one of our qualified attorneys.

 

New Report on Design Infringement in the UK

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The UK IPO has recently published a report based on four-years of research into the attitudes and actions of ‘design-right owners’ when encountering infringement of their IP (intellectual property).

 

The purpose of this research is to provide an insight into two aspects:

  1. What are the reactions of ‘design-right owners’ when they discover an infringement of their IP.
  2. What legal rights designers value.

 

This research was deemed valuable, as there has been a lack of data on the consequences and outcomes of IP infringement.

 

The key findings of the report are as follows:

  • 98% of ‘design-right owners’ have experienced infringement of their IP.
  • When an infringement(s) is discovered, the most common course of action is to correspond with the other party.
  • 43% of the respondents are not prepared to pursue legal action, as they consider it to be too expensive. This is despite the fact that many had lost considerable sums in revenue due to infringement and staff hours in defending their IP.
  • ‘Design-right owners’ consider the effectiveness of the various IP rights in the following, descending order:
  • Patents
  • Trade Marks
  • Registered design rights
  • Copyright
  • Unregistered design rights (also known as ‘UDR’)

 

Interestingly, analysis of court cases from 2013 to 2017 reveals that unregistered design rights (UDR) are more frequently at issue than registered design rights.

 

In fact, whilst 50% of registered design rights are successfully defended, unregistered design rights enjoy a significantly higher percentage of successful litigation at 70%.

 

The level of infringement experienced should hopefully bring home to design right owners that design registrations can be a useful, powerful, and a relatively inexpensive strategy to adopt, to protect their IP and to ward off infringement.

 

IP rights are about creating value in your business by putting up hurdles and roadblocks to competitors. Despite the general reluctance by ‘design-right owners’ to get embroiled in disputes, having two angles of attack by using both registered and unregistered design rights will certainly increase a design owner’s likelihood of success against a copyist, along with increasing attractiveness to an investor.

 

Another particular advantage with registered design rights, as opposed to UDR, is that it allows e-commerce platforms, such as Amazon and eBay, to take down infringing listings extremely quickly.

 

As a word of caution, applicants of registered design rights can often make critical mistakes which destroy their rights.

 

Be aware that an opponent, when faced with your assertion of infringement, will try and knock your intellectual property rights out. If you have taken the ‘do it yourself’ approach to save money, do not be surprised that, when push comes to shove, your rights easily fall over and the copyist escapes.

 

Even if the application process appears ‘easy’, there are decades of legal cases which define and hone the current law. If you are serious about your legal protection, ask for professional assistance.

 

Furthermore, the report suggests that UDR is often overlooked by design right owners as a right to rely on to pursue infringement.

 

Design right owners are strongly advised to seek professional legal guidance, when they encounter infringement, to best understand the available course of action to defend their IP.

 

It is also hugely beneficial to seek legal advice early, thereby ensuring that appropriate IP protection is in place before you launch your new design publicly.

 

As a final parting thought, also be aware of IP Insurance which will cover you for pursuit and defence of all your IP rights. IP Insurance is a ‘before the event’ policy, and so does need to be in place before infringement has occurred. It can be utilised as useful extra leverage to encourage settlement.

For further information relating to design protection, or pursuing or defending design right infringement, please do not hesitate to contact one of our attorneys, who will be very happy to assist.

Overcoming UK Patent Rejections

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PATENT REJECTIONS

Many designers spend months and even years working on a development, only to encounter numerous barriers and hurdles raised by the Patent Office when trying to patent it.

 

In many scenarios, the issue with the patent application is that the claimed concept does not fall within the legal definition of an invention. This is given by Section 1(2) of the Patents Act, which can be summarised as follows:

 

Section 1(2):

  1. Scientific theories/discoveries and mathematical methods are unpatentable
  2. Aesthetic creations (e.g. literature, music and drama) are unpatentable
  3. Rules for games, business methods, schemes and rules, and computer programs are unpatentable
  4. The presentation of information is unpatentable

 

In particular, it is not possible to obtain a patent which is directed purely to an algorithm (clause (a) above); copyright generally covers aesthetic creations (clause (b) above); and clauses (c) and (d) are reasonably self-explanatory.

 

As an aside, a nice ‘presentation of information’ may be protected by a registered design instead.

 

Schemes, Rules and Methods – Applying UK Law

 

It is clause (c) above which often gives applicants the most problem, and is more often than not the reason for refusal of individual applicants’ patent applications. It can be difficult to readily assess what constitutes a method for performing a mental act, playing a game or doing business in particular.

 

The test under UK law is derived from the judgement of the Court of Appeal in Aerotel Ltd v Telco Holdings Ltd and Macrossan’s Application. This judgement provides a four-step test for determining what is excluded subject-matter.

 

The four-step test is as follows:

 

(1) properly construe the claim

 

In other words, what does the claim actually mean, when translated out of legalese?

 

(2) identify the actual (or alleged) contribution

 

In other words, what does the invention do?

 

(3) ask whether it falls solely within the excluded subject matter

 

Is the claim as a whole excluded under the above provisions? In other words, are you outright claiming a computer programme, for instance?

 

(4) check whether the actual (or alleged) contribution is actually technical in nature

 

If the technical features were stripped out of the claim to expose the underlying inventive concept, would the claim then fall into an excluded matter category?

 

In most circumstances, this Aerotel/Macrossan test is used to frame a Patent Examiner’s objections to a particular claim in a patent application.

 

However, we can use the test as a guideline for determining whether an invention is likely to be excluded from patentability before a patent application is filed.

 

For an assessment of whether an idea is excluded from patentability, it is best to walk backwards through the Aerotel/Macrossan test.

 

  • Is there a technical contribution to your idea?

 

This can be a tricky thing to analyse. What makes something ‘technical’? If you are only able to describe the way your idea will work in abstract terms, then there is a risk that any patent claim to the idea will fail the Aerotel/Macrossan test.

 

  • Does the idea fall completely into one of the excluded categories specified in Section 1(2) above?

 

This is most difficult to assess for clause (c) of Section 1(2), where there may be blending between features which are excluded subject-matter, and features which are not.

 

It is always worth attempting to ‘pitch’ your idea to yourself, in a way that encompasses the scope of protection you would want for the idea. If the clever part of your idea is easily categorizable in one of the definitions of Section 1(2), then there are likely to be issues with patentability in due course.

 

  • Properly construe the claim and identify the contribution

 

This requires a claim to have been created which defines the scope of protection which you would like from your patent, and therefore is something that can be addressed by your patent attorney.

 

If you are able to consider the first two points relating to exclusion from patentability under the UK Patents Act, then we can assist with the preparation of suitable claims which should overcome potential excluded subject-matter objections in advance, and/or advise you before applying for a patent whether your idea is likely to face significant obstacles to grant.

 

Applying Aerotel/Macrossan to your invention

 

If you have a pending patent application with a Section 1(2)(c) rejection raised against the claims, what can you do?

 

(1) Recast the claims to highlight the technical matter. Often UK Patent Examiners can attempt to pick apart a claim into component parts which are well-known in order to exclude them from consideration. It’s worth remembering that this is not necessarily the correct approach to take.

 

If the technical components have been combined in a clever way to solve a problem which would otherwise fall within an excluded category, there may be ways to get around the objections.

 

(2) Consider whether the claim category can be changed. If you have claimed a method of doing something, should you instead be claiming the apparatus that performs the method? This may add the technical characteristics which will help you to demonstrate patentability.

 

(3) Is the Examiner correct? Sometimes, objections can be raised which are not completely accurate, for example, if an Examiner has not fully understood the core inventive ‘nugget’ of your idea. Clarifying claims can help in this regard.

 

If you have received an objection to your pending application, then it’s worthwhile consulting with a patent attorney to see how we might be able to help you achieve your goals.

 

For ideas which are still gestating, it would be worth speaking to a patent attorney prior to filing a patent application. Lack of disclosure, and therefore lack of clarity, is a big factor in receiving objections on the grounds of excluded subject matter. We are experienced in writing patent applications with lots of options for fall-back positions, should the invention be more abstract than most. After all, a patent is potentially a twenty-year investment, and therefore it’s worthwhile getting it correct from day one!

 

Financial Compensation for Intellectual Property Infringement

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Damages ac of profits

An intellectual property right is fundamentally a right to prevent competitors from using your brand, invention, design, copyright work, or whatever.  But what if they do?  A rightsholder who successfully sues for infringement will be able to obtain an injunction – a court order preventing the infringement from continuing.  For infringements which have already occurred, there will usually be an entitlement to financial compensation.

Damages or profits?

A successful claimant will be able to choose either to claim damages – compensation for the loss that they have suffered due to the infringement, or an account of profits – the profits wrongfully made by the infringer.  The claimant will obviously want to choose the remedy worth the most, and will normally be able to get an order for disclosure of the defendant’s documents in order to gauge the relative value of each option.

Damages – lost sales

In theory, damages are compensation paid to a rightsholder for the loss caused by the infringing activity.  A certain number of infringing sales will have been made, but a key question is whether all of those infringing sales represent lost sales to the rightsholder.  All sorts of factors will need to be taken into consideration.  As an example, if a counterfeit or pirate product is sold at a much lower price than the original, and customers probably know that they are buying a counterfeit, then it may be very difficult to say that all of those customers would have paid full price for the genuine article if the infringement was not available.  On the other hand, if it is a very good counterfeit and sold at a similar price, so that customers are misled, then each infringing sale probably does represent a lost sale on the part of the rightsholder.

This example of counterfeit goods is relatively straightforward.  In other cases, for example a patent infringement, it may be that nobody is being misled, but a rightsholder might still argue that at least a proportion of the infringing sales represent lost sales on their part.  Evidence for this may end up being a little inexact.  Again, multiple factors will come into it – the price of the product may be an issue; if the infringing product has aesthetic differences then perhaps some customers would not have bought the patent holder’s product just because they did not like it, and so on.  In the end a Judge will have to weigh up all the evidence and come to an approximate view as to how many sales were lost by the rightsholder.

Damages – reasonable royalty

What if a rightsholder can’t prove lost sales for some or all of the infringements?  They are still entitled to a “reasonable royalty”.  This is an amount determined by looking at how much a hypothetical willing licensee in the position of the infringer would have agreed to pay a hypothetical willing licensor in the position of the rightsholder.  Again it is all a bit – well – hypothetical, but relevant evidence might include similar licences in the industry.  For example, in “simple mechanical” patent cases, reasonable royalties often seem to be determined at about 5% of sale price.

Reasonable royalty damages often end up being a small fraction of damages for lost profits, so rightsholders will work hard to try to prove lost profits for as many sales as possible, if they think they can.

Other heads of damage

Any reasonably foreseeable damage caused by the wrongful infringement can in theory be recovered.  Rightsholders may put forward various theories that they have lost out in different ways and need to be compensated.  A few examples include damages for price depression, where a rightsholder claims that infringing activity has forced them to drop their prices; lost sales of “convoyed goods”, i.e. goods not specifically covered by the relevant IP right but which are typically sold alongside and provide additional revenue; and costs incurred in mitigating damage, for example the cost of additional advertising to counteract lost business caused by the infringement.

Moral prejudice and damages for “flagrant” infringement

The Enforcement Directive[1] provides for “non-economic” factors, such as “moral prejudice”.  What is that?  There is relatively little guidance so far, but it probably allows – in principle – damages for “pain and suffering” and “mental distress” caused by an infringement.  English Courts have been rather reluctant to award damages under this head.

In copyright cases, “additional damages” can be awarded for “flagrant” infringement, and these additional damages can be quite valuable.  Additional damages go beyond the compensatory principle and can be well worth claiming.

Account of profits

What about the other option – an account of profits?  In principle, the rightsholder is entitled to the profits which the infringer has made by infringing, most obviously by selling infringing products.  In the first place this is an accounting question – what profits have actually been made by selling this particular infringing product line?  This might be less than straightforward, and there could be disputes over the proper allocation of variable and fixed costs.  Then what about the central overheads of the business? Whether these can be properly deducted can be a contentious issue.  The legal test is (a) whether the overheads would have been incurred anyway even if the infringement had not occurred and (b) whether the sale of infringing products would not have been replaced by the sale of non-infringing products.  In other words, would the same overheads in fact have sustained a non-infringing business if the infringement had not occurred?[2].  What this boils down to is that the rightsholder is entitled to recover the extra profits the infringer made due to their choice to carry out the acts which infringed.

Overall the rightsholder is entitled to the profits due to the infringement, so that may also raise the question as to whether the fact of infringement was really driving the sale of the product – i.e. did the consumer want an infringing product, a product having the particular characteristics protected by the IP right, or did they just want a product of a certain broader category?  If the infringement did not drive the sale then an apportionment may be made so that the rightsholder is only recovering the profits due to the infringement, rather than all of the profits due to sales of the infringing goods.

In some cases what this can mean is that after all this difficult accounting, an account of profits comes down to more or less the same thing as a reasonable royalty, which is the least a rightsholder can expect if they elect to claim damages.  Probably for that reason, damages tends to be the more popular choice.  It does all depend on the circumstances though.

An enquiry into damages or an account of profits is the very last thing that happens in IP litigation.  But it is well worth both parties having a good look at the possible financial implications early in the process, because with a realistic idea of the value of a claim, a swift and agreeable compromise can often be reached, vastly reducing the legal costs of resolving a dispute.  Estimating damages can be complex, but we’ve made a handy flow-chart to help a little bit.  Also, we would obviously be delighted to advise further on your specific case.

[1] EU Directive 2004/48/EC

[2] See Design & Display Ltd v OOO Abbott & anr. [2016] EWCA Civ 95

Albright IP and Duku get to root of the issue for dental client

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Albright IP and sister product design company Duku have helped Harley Street Dentist Phillip Davies and Hygienist Laraine Wright to solve an everyday issue, with the launch of a new patent pending product line called Techsurg.

 

The product, which hit the markets in early 2018, is designed to give dentists and their patients better access to dental accessories, Phillip Davies explains:

 

“The development of the Techsurg product range originally led from finding a smart and hygienic solution to place much needed tissue boxes within easy reach for the customer.  We developed a number of design solutions and prototypes before finalising on a multi-use product, which holds a variety of items attached by a universal strap to the dentist chair.”

 

With a global market worth $7bn leading dentists invest heavily in the latest equipment presenting their customers with a modern, clean and high-tech surgery to attract and retain customers.

 

With Albright IP and Duku’s help we now have a unique product with multiple applications

While there is a large product range for high tech chairs, instruments, x-ray machines and lighting, there was a clear gap in the market for Techsurg, added Laraine Wright: “We knew that there had to be a better solution to using rubber bands to mount tissue boxes, and while it seems a simple problem to have, the adopted solution of rubber bands was undesirable and a poor reflection of the high-tech standards of modern dentistry. With Albright IP and Duku’s help we now have a unique product with multiple applications from tissue boxes to entertainment, delivered in a clean, sleek, more professional way.”

 

Driven by an ageing population and an increase in cosmetic dentistry the UK dentistry market is very competitive. Last year, consumer spending on dentistry reached around £3.8bn, a growth of 12%. With over 12,000 practices in the UK and a lot of consumer choice, dentist practices not only need to deliver the very best customer experience but ensure that they set themselves apart from the competition.

 

Alex Lee, Director at Duku commented “Consumers want their dentistry to be delivered in sleek, stylish and hygienic dentist practices. Surgeries need to be practical and enable dentists to offer the best service and customer experience for their clients.”

 

The solution includes a silicon rubber grip designed to fasten around the different diameter poles common to dentist chairs. This was complemented by a patented twist-release bracket to allow easy attachment of different items.

 

Alex added “Of course, hygiene was a number one priority and our design solution was focused around developing a wipe clean product, using materials that were suitable for washer disinfection.”

 

Securing strong IP rights including patents, registered designs and registered trademarks is an incredibly important step when developing a new product.

 

Robert Games, Managing Director at Albright IP, responsible for securing the IP commented: “Securing strong IP rights including patents, registered designs and registered trademarks is an incredibly important step when developing a new product.  This not only protects it from being copied but instantly builds value in your company which you can leverage for investment.”

 

“While there are thousands of different straps out there, the Techsurg product has unique protectable features. Not only is it protected in numerous countries across the world, but our client Techsurg will be able to benefit from the Patent Box tax incentive with up to a 50% reduction on corporation tax from sales of the patented product.”

 

With patent protection, manufacturing and packaging design in place, the product was put into production through Duku’s manufacturing partners. Today the product range is being sold across the leading Dentist equipment suppliers.

 

For more information on Techsurg go to www.techsurg.co.uk

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