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Who's Who at the EPO?


by Charl Goussard, NAIP Legal Research

Since our previous article What does the European Patent Office (EPO) look like? - we've spend some time to find out who's who at this office.

You might be familiar with the name "Alison Brimelow" (current president of the EPO), and you might have heard that the Office is preparing for their next president after Alison steps down at the end of June 2010.

Below we'll give a round-up of the main players who've been tasked with keeping the EPO on track.

Leading the pack...

Alison Brimelow
President of the European Patent Office


Alison Brimelow is a British civil servant and former Chief Executive and Comptroller General of the UK Patent Office. She is the fifth and current President of the European Patent Office.

Her term of office as president of the EPO began on 1 July 2007. In May 2009, she informed the EPO staff that she will not seek an extension of her contract which ends on 30 June 2010.

In 2005, Alison was appointed Commander of the British Empire for her contribution to Intellectual Property Law.


Benoit Batistelli
Chairman of the Administrative Council


Benoit Batistelli is a French civil servant and current head of the French National Intellectual Property Institute. He has held this post since 12 May 2004.

He was elected to the post of Deputy Chairman of the Administrative Council of the EPO on 5 December 2006 for a three-year term. Then, later the Administrative Council appointed him as its Chairman for a three-year term, from 5 March 2009 until March 2012.

In 2008, Benoit was named as one of the candidates to succeed Kamil Idris to head the World Intellectual Property Organization. He is now also candidate for the position of President of the EPO after Alison steps down.


Jesper Kongstad
Deputy Chairman of the Administrative Counci


Jesper Kongstad is Director General and CEO of the Danish Patent and Trademark Office and a member of the Executive Committee of the Danish Ministry of Economic and Business Affairs. He is also head of the Danish delegation and Deputy Chairman of the Administrative Council of the European Patent Organization. Jesper was also a candidate for the position of President of the EPO. In December 2009, however, he withdrew his candidacy.


Roland Grossenbacher
Honorary Chairman of the Administrative Council


Roland Grossenbacher is a Swiss attorney at law who served as chairman of the Administrative Council from 5 March 5 to 4 March 2009. He was appointed at this post for a first three-year term on 5 March 2000. He was then reelected in 2002 for a second term, beginning on 5 March 2003. In December 2005, he was again re-elected as Chairman of the Council from a third term from 5 March 2006 to 4 March 2009. After he stepped down in March 2009, he was made "Honorary Chairman" of the Administrative Council of the European Patent Organization.

He is currently the Director of the Swiss Federal Institute of Intellectual Property.

Roland, together with Benoit Batistelli and Susanne Sivborg (President, Swedish Patent Office), is one of the candidates for the position of President of the EPO after Alison steps down.


EPO Management Team

Ensuring the day-to-day management, the examination of patent applications, the grant of European patents and various other activities, such as the provision of patent information and training services, is a highly competent and efficient management team headed by Alison Brimelow (the President is elected and appointed by the Administrative council).

Alison's management team comprises Vice Presidents and three other directors:

Thomas Hammer, Vice-President Directorate - General Operations
Peter Vermeij, Vice-President Directorate - General Operational Support
Peter Messerli, Vice-President Directorate - General Appeals
Brian McGinley, Vice-President Directorate - General Administration
Wim van der Eijk, Vice-President a.i. Directorate-General Legal/International Affairs
Ciarán McGinley, Head of the Controlling Office
Wolfram Förster, Principal Director Business Services
Oswald Schröder, Principal Director Communication and Change Support Team, Spokesman


Last but not the least...

The Employees of the EPO
Running an organization the size and complexity of the EPO requires dedicated staff. The EPO is definitely such a place! Being the second largest European Organization, it employs roughly 6500 staff from over 30 different countries.

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Happy Holidays from NAIP!


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What does the European Patent Office (EPO) look like?


By Charl Goussard, NAIP Legal Research


You've probably heard of the EPO and maybe you've even filed a patent through the Office, but have you ever wondered how this organization operates?

In an attempt to get a better understanding of the EPO, we've done some investigation and what follows is our understanding and a summary of the most prominent offices within the EPO.





The Administrative Council:

The European Patent Organisation is an intergovernmental organisation that was set up on 7 October 1977 on the basis of the European Patent Convention (EPC) signed in Munich in 1973.

Currently the EPO consists of 36 contracting states. Each of these contracting states is entitled to appoint one representative and one alternate representative to the Administrative Council of the EPO.

The Administrative Council's powers include the right to amend the time limitations related to the examination process of patent applications, the right to amend the implementing regulations of the European Patent Convention, to adopt or amend financial regulations and any employment regulations for permanent employees, and to adopt or amend rules relating to fees. Furthermore it has the competency to authorise the EPO President to negotiate and conclude agreements on behalf of the EPO.

The Chairman and Deputy Chairman of the Administrative Council are elected by the members from among the representatives of the Administrative Council and they are elected for a non-renewable period of three years. Leading the Administrative Council currently is the Chairman (Benoit Batistelli), Deputy Chairman (Jesper Kongstad) and Honorary Chairman (Roland Grossenbacher).

European Patent Office Management Team

Ensuring the day-to-day management, the examination of patent applications, the grant of European patents and various other activities, such as the provision of patent information and training services, is a highly competent and efficient management team headed by the EPO President, Alison Brimelow. Alison’s management team comprises five Vice Presidents and three other directors.

Boards of Appeal

Independent from the Office in their decisions and bound only by the European Patent Convention is the boards of appeal.

There are currently 26 technical boards of appeal, plus the Legal Board of Appeal, the Enlarged Board of Appeal and the Disciplinary Board of Appeal. The members and chairmen are appointed for a term of five years.

The boards of appeal currently receive about 2 000 new cases per year and settle about 1 600 cases. The public is informed about the decisions of the boards via the European Patent Register and the Official Journal of the EPO.

The Employees of the EPO

Running an organisation the size and complexity of the EPO requires dedicated staff. The EPO is definitely such a place! Being the second largest European Organisation it employs roughly 6500 staff from over 30 different countries.

The EPO is headquartered in Munich, but also has a branch in The Hague, offices in Berlin and Vienna, and a liaison office in Brussels.

Now that we have a slightly better understanding of the structure of the EPO, we plan to tell you “Who’s who" in our next issue.


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Digging for Diamonds at the EPO

Money-saving patenting tips brought to you by the Patent Penny Pincher


It's time to stake your claim in the field of IP Valuations.

Up for grabs is IPscore, a FREE IP Valuation software...

Yes, you heard it, for FREE!

The generous host is none other than the European Patent Office (EPO).


Get More from your patents with IPscore

IPscore is the EPO's patent evaluation software, acquired from the Danish Patent Office who developed the tool in collaboration with industry.

IPscore helps users generate both qualitative and quantitative evaluations of the patent(s) or technology they wish to analyse. In particular, IPscore creates a financial forecast by using tried and tested assessment factors (in total 40 factors)

Furthermore, after feeding the IPscore software with the relevant information needed for the IP evaluation, the software also provides a number reports which reveal different dimensions of the qualitative evaluation and the financial forecast. These reports include a Radar profile, a Strategic profile, Net present value, and four graphic Charts which visually assist interpretation of the evaluations.

The various reports, charts, and financial values will provide the interested parties with an overall view of the assessment factors and is useful for dialogue and for interpreting how the different categories of assessment affect the value of the patent.


Why Should I Use IPscore?

By using IPscore, applicants, technology transfer institutes, banks and venture capitalists, to name but a few, will be able to attach a value to the intellectual property they're dealing with—whether it be in the form of licensing agreements, financing arrangements, mergers and takeovers, or even enforced valuations.

For example, if you're an inventor or business with its own patents, you can use IPscore to evaluate your individual patents, patented technologies, R&D projects (even if no patent exists yet), or any other ideas (know-how) or proposals.

If you're business owner or CEO, IPscore can help you align your company’s patent strategy and make the best use of your patents as a business tool.

In general, IPscore is a handy tool for evaluating your patents & technology by giving you a number to work with, allowing for strategic IP dialogue within your company, as well as providing a guide for spotting prospective growth and chances to save costs.

In addition, once you have a value linked to your technology, it will be easier for you to negotiate license agreements, make investment decisions, or obtain public funding.

And of course, it's FREE!


Learn More or Get Started Now

IPscore is a Microsoft Access-based tool, which can be effortlessly downloaded from the EPO website.

In addition, the EPO supplies training in the form of an introductory 30 minute IPscore presentation as well as a two day Patent Evaluation Training Course (hurry, the next one starts on the 16th of November 2009, Vienna)

Don't be red-faced next time you meet with your banker, licensee, accountant or investors.
Join the diamond rush and get your own patent evaluation now with the immaculate IPscore.

EPO IPscore Mini-site

Video Introduction to IPscore
IPscore Forum
IPscore Manual


Photo by David Boyle

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Happy Hour at the UK IPO

Money-saving patenting tips brought to you by the Patent Penny Pincher

(Every Mon. ~ Fri. between 9am and 5 pm!)

Good news bargain hunters! The United Kingdom Intellectual Property Office (UK IPO) has a special offer on patent opinions. For only £200 you can now obtain a valid opinion on the validity of infringement status of any UK patent. That's right, only £200!

Not only will this service save you money, it will save you time and give you some peace of mind....

Already thinking that this is too good to be true? That there MUST be a catch?!!

Well, to be honest, the Patent Penny Pincher thought so too, but in fact, the UK IPO is offering this service to help reduce costs related to patent infringement disputes, which in turn will hopefully lead to less wasted resources.

Now let have a closer look at what’s at offer:

1) UK IPO Opinion:
Since 2005 the UK IPO has been offering opinions in an attempt to resolve patent disputes. The opinion consists of a balanced and impartial assessment of the essential issue of an anticipated or real dispute.

2) Cost?
The Cost for an opinion – payable to the UK IPO is £200 (roughly NT$ 10 000).
Not a bad price at all, considering that some Patent Attorneys' hourly rate is more than that!

3) Timing?
From the date of submitting your request for an opinion until receiving the opinion takes no more than 3 months.

4) Target Customers
1. If you are a patent owner or an exclusive licensee facing a patent dispute, you'd like to have some opinion on the validity of infringement status of your or even your opponent's patent. In some cases the opinion provided by the UK IPO might help to resolve the dispute, saving a lot of time, money and discomfort. On the other hand, if the dispute eventually ends up in court, you would have had time to consider your options based on reliable opinions.

2. If you're a free-thinking liberal with money to spare, you might want to do some opinion digging in the patent office archives and sell your "knowledge" to the patent werewolves eager to sue! (not a bad past-time for a vindictive soul)

5) Important Things to Know
1. Since the launch of this service, the IPO has provided 100 opinions!
2. Applications & results are released to the public here, so if you'd rather keep things quiet, the Patent Penny Pincher suggests you avoid this service.

6) Who are the trend setters?
During the past four years, companies big and small have made use of the UK IPO's opinion service, but some of the "big" names include Marks & Spencer PLC and Unilever PLC. It goes without saying that these are professional opinions, provided by knowledgeable UK IPO practitioners who are as (and if not more) capable as most very expensive patent attorneys.

200£ for a bit of peace of mind and a lot of knowledge, spend wisely!
As they say: An ounce of common sense is worth a pound of theory...

-The Patent Penny (& Pound) Pincher.

UK IPO Opinions Service Page



Photo by AGok

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A Brief Overview of IC Design Protection

By Charl Goussard, NAIP Legal Research

What is Integrated Circuit Design?

Simply put, integrated circuit design has to do with the meticulous logic and techniques applied to the design of integrated circuits.

Integrated circuits (IC) are "miniature electronic components built into an electrical network on a monolithic semiconductor substrate by photolithography", which in more layman's terms, essentially means they are dozens or even billions of tiny inter-connecting electrical paths meticulously arranged onto a single piece of material, such as silicon.

In the past few decades the development of IC has arguably been the main driving force behind a majority of advances in technology. We find them in everyday goods, controlling the spin cycles of washing machines, keeping time in digital watches, and crunching whatever processes we are running on computers.

As markets drive toward smaller, faster, better electronics products, new IC chips must be produced to meet these demands. Due to the nature of IC, the majority of progress arises from the new, more effective and efficient designs and arrangements of the circuits. As a result, IC design is one of the most important fields in modern electronics.


The Need for Legal Protection:

Designing an IC chip is not a simple feat. As chips become even smaller, issues such as hot spots, leakage etc., make an effective, power-efficient designs extremely difficult to achieve. Successful designs usually result from the enormous effort of highly qualified experts coupled with huge financial investments.

However, copying each layer of an integrated circuit and preparing "pirated" integrated circuits can be done with relatively little effort.

Taking into account the enormous effort and cost to develop an IC design, the wide industrial applicability, the constant demand for improvement, and the ease at which such designs can be copied, it seems logical that some form of statutory protection should be afforded for the designers or owners of these designs.

But where do we find these rights?


Patent or Copyright?

Provided that an IC Design displays satisfactory inventiveness and meets the required standard of uniqueness, patent protection will always be an option for the protection of the intellectual property rights embodied in an IC Design.

However, the lion's share of IC Designs is considered obvious under the most patent systems given that they typically lack any improvement (inventive step) over their predecessors (prior art).

Here some might argue that IC Designs are sufficiently protected by Copyright laws, since Copyright usually applies to a wide range of creative, intellectual, scientific, or artistic forms (and what is IC Design but a form of technical art?). The United States Constitution expresses the intent of copyright as:
To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries" (Article I, Section 8, Clause 8 United States Constitution).
Unfortunately, neither patents nor copyrights were deemed suitable, and in 1984 the United States passed the Semiconductor Chip Protection Act. Although codified under the same title as Copyrights, the Act is clearly intended to provide IC Designs with sui generis ("of its own kind") rights. It has some aspects of copyright law, some aspects of patent law, and in some ways it is completely different from either.


Legal Protection: Treaties, Laws and Regulations

The United States led the way in recognising the need for a special act to adequately protect IC Designs Rights. The Semiconductor Chip Protection Act enacted 17 U.S.C. §§ 901-914, which provides statutory protection for IC Design Rights in the US. The following extract from the Senate Report on the bill (S.Rep. No. 425, 98th Cong., 2d Sess. (1984) is self-explanatory:
In the semiconductor industry, innovation is indispensable; research breakthroughs are essential to the life and health of the industry. But research and innovation in the design of semiconductor chips are threatened by the inadequacies of existing legal protection against piracy and unauthorized copying. This problem, which is so critical to this essential sector of the American economy, is addressed by the Semiconductor Chip Protection Act of 1984. ...[The bill] would prohibit "chip piracy"--the unauthorized copying and distribution of semiconductor chip products copied from the original creators of such works.
According to the Act, IC Design rights exist when they are created, just like Copyrights, but unlike patents (which can only confer rights after application, examination and issuance). However, the exclusive rights afforded to the owners of IC Designs are more restricted than those afforded to both copyright and patent holders. Modification (derivative works), for example, is not an exclusive right for owners of IC Designs. Furthermore, the exclusive right granted to a patentee to "use" an invention, cannot be used to exclude an independently produced identical IC Design. In addition, reproduction for reverse engineering of an IC Design is specifically permitted by most laws.

Japan (1985) and the European Community (EC) countries (1987) soon followed and endorsed their own, similar statutes/directives recognizing and protecting IC Designs (also referred to as the "topography of semiconductor chips")

In 1989, a Diplomatic Conference was held in Washington, D.C., at which the Treaty on Intellectual Property in Respect of Integrated Circuits (IPIC Treaty) was adopted internationally. This treaty has been partially incorporated into the TRIPS agreement of the World Trade Organisation (WTO).


IC Design Protection in Major Countries

The United States, as mentioned above, were the first to protect IC-Design rights through the United States Code (17U.S.C. § 901(a) (2)). Dubbed "mask works", the Code defines IC Designs/Mask Works as:
a series of related images, however fixed or encoded, having or representing the predetermined, three-dimensional pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor chip product, and in which the relation of the images to one another is such that each image has the pattern of the surface of one form of the semiconductor chip product.
The top IC markets all have passed their own Acts or Regulations that include variations of this definition. Below is a comparison of the IC Design Protection extended by the major IP offices in the world, as well as that afforded by the Taiwan IP office (TIPO).

right click and choose Save As to download a pdf of this chart(Right click and choose "Save As" to download a pdf of this chart)


Similar protection can also be found in The United Kingdom (Part III of the Copyright Designs and Patents Act – 1988, as modified by The Design Right (Semiconductor Topographies) Regulations - 1989), Australia (Circuits Layouts Act of 1989), Canada (Integrated Circuit Topography Act of 1990), Hong Kong (Lay-out Design (Topography) of Integrated Circuits Ordinance of 1994), and India (Semiconductor Integrated Circuits Layout Design Act of 2000). In Taiwan, IC Design Rights are protected by the Integrated Circuit Layout Protection Act of 1995.


Conclusion

Having had a brief overview of IC Design rights, it should now be clear that these highly lucrative rights are recognized and protected internationally as sui generis rights, under the umbrella of Intellectual Property Rights. With an exclusive time-frame of 10 years from its registration or start of commercial exploitation, these rights should be an impetus to develop, improve and invest in the economics of electronics – securing a brighter, lighter and faster future!

Photo by james4765

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The Art of Duplicity - Max Planck v. Whitehead

By HsinHao Tsai, NAIP Engineering Research

"Duplicity" was finally released in Taiwan cinemas in June. I was rather excited to see this film not just because of the chemistry between lead actors Julia Roberts and Clive Owen, but also because it dealt with the subject of industrial espionage.

In the film, industrial espionage is portrayed in a standard Hollywood manner. Ex-government agents Claire Sternwick (Julia Roberts) and Ray Koval (Clive Owen) are spies for competing corporations who—surprise!—fall in love while on the job(s). As we watch the story unfold in non-linear fashion, we learn about the perils of trust, try to detangle duplicitous dialogues and ponder over mysterious meetings. Eventually, we learn Claire and Ray plan to double-cross both their employers by taking a copy of a secret, patentable compound to yet another corporation. The result you'll have to see for yourself.

But no matter how exciting, entertaining and dizzyingly complex the film industry makes it, industrial espionage, in the real world, no longer requires as much thrilling undercover effort.

In this post-Information era, we have email BCCs and address typos to give us access to sensitive internal correspondence. Google cache regularly makes encrypted documents accessible. Employees on Facebook and Twitter reveal a company's latest moves or projects. The distance between business rivals is now only one click short.

Today, however, the tool of industrial espionage is a familiar one: the patent system.

The patent system has been leveraged and exploited into creating higher degrees of openness and transparency about an invention that the applicant may desire. This is because as inventions become more intricate and involve ever-expanding, cross-organizational research teams, businesses and employees struggle to define, enforce and adhere to suitable codes of conduct regarding information disclosure. The patent system, conceptual rules implemented onto real-world business practices, is intended to protect IP rights while allowing the technology to be shared with society. But as with any system loopholes exist, and an undesired openness may sneak in the sanctuary of patent protection—a situation that the Max Planck Institute (Max Planck) knows all too well.

On June 26, 2009, a complaint1 related to two series of RNAi technologies2, Tuschl I and Tuschl II inventions, was filed in Suffolk Country Superior Court in Boston, U.S. by Max Planck against Whitehead Institute for Medical Research (Whitehead). At the centre of the various issues raised in the complaint is the deliberate expansion of the scope of Tuschl I series, which allegedly incorporates the scope of its half-brother, Tuschl II series3.

That Tuschl I and Tuschl II inventions share similar or even some common features is not strange, since both were developed under the continuing diligent work led by Dr. Thomas Tuschl. However regardless of the similarities in content or inventors, these two groups of inventions were filed, and are owned and managed by two different sets of governing bodies. To allow easier management of these patents, the scope of the subject matters in these patents ideally should be clearly distinguished.

This complaint leads us to wonder how exactly these crucial elements of the Tuschl II inventions made their way into the Tuschl I inventions. Was it the deliberate breach of confidentiality by the patent practitioners (perhaps per instruction from the owner/applicant)? Could it be that Dr. Tuschl and his colleagues innocently shared too much of their comprehensive scientific insight when addressing the one family of inventions? Or is it simply a case of the patent specialist not understanding the technical subtleties of one thriving new RNAi advance from another?4

Conspiracy theorists may want to pay particular attention to this announcement that states the Tuschl I patent applications, being managed by co-owner Whitehead, has only recently received signs of maturation into a patent for Europe (but nowhere else in the world, except in Australia and New Zealand). In contrast, the later-filed Tuschl II inventions, as managed by Max Planck, have been granted various patents in vital regions including the U.S. and Europe.

Tuschl I & Tuschl II Key Facts

Tuschl I Tuschl II

PCT Filing

PCT/US01/10188 on Mar 30, 2001

PCT/EP01/13968 on Nov. 29, 2001

Inventors

Tuschl Thomas [DE]; Sharp Phillip A [US]; Zamore Phillip D [US]; Bartel David P [US] Thomas Tuschl [DE]; Sayda Elbashir [DE]; Winfried Lendeckel [DE]

Owner(s)

WHITEHEAD BIOMEDICAL INST [US]; MAX PLANCK GESELLSCHAFT [DE]; MASSACHUSETTS INST TECHNOLOGY [US]; UNIV MASSACHUSETTS MEDICAL [US] MAX PLANCK GESELLSCHAFT [DE]

Countries granting the inventions

Australia, Europe (Intention to grant), New Zealand Australia, Europe, Japan, US

Gist of the applications

Identification, production and use of small 21-23nt dsRNAs. Experimental data results largely from Drosophila embryo lysate Properties and pharmaceutical applications of synthetic dsRNAs duplexes with 3' overhangs. Data results from Drosophila as well as mammalian cells.


What spices up the RNAi story even further is the fact that the owners of both Tuschl inventions had previously drawn up two agreements to ensure each party would legally enjoy its fair share of any benefits resulting from the Tuschl I and Tuschl II inventions.

Max Planck, Whitehead, Massachusetts Institute of Technology (MIT) and University of Massachusetts (UMass), who jointly claim the ownership of Tuschl I inventions, first set up an "Old Agreement" in late 2001 to delineate the rights and responsibilities on Tuschl I and II inventions for research purposes. Two years later, Max Planck, Whitehead and MIT drew up another agreement—one in which UMass declined to participate—for Tusch I and II inventions with respect to their therapeutic uses. This seeded Max Planck's concern that, should the Tuschl I inventions successfully broaden their claim scope, the Tuschl II subject matter would essentially be available through licensing from UMass.

License Agreements for Tuschl I & II Inventions


"Old" Agreement "Therapeutic Use" Agreement
Scope of Agreement: Research Use for Tuschl I & II Therapeutic Use for Tushcl I & II
Signed by: MIT, Whitehead, Max Planck, UMass MIT, Whitehead, Max Planck
Tuschl I Licensing Managed by: MIT Max Planck
Tuschl II Licensing Managed by: MIT Max Planck
Patent Prosecution Managed by: Whitehead for Tuschl I; Max Planck for Tuschl II
By not signing the Therapeutic Use agreement, UMass (as a listed owner of the Tuschl I patents) can choose to individually assign licensing rights for the Tuschl I series.


No comment has been provided by any of the officials at MIT, Whitehead or UMass. Max Planck and the Tuschl II licensee also stated in a press release, that they will not provide specific details on this matter during active litigation.

Despite their silent treatment, the ramifications of this suit will continue to be heard by many industries in years to come. Previously, large research institutions tended to settle before taking legal action. This rare, complex lawsuit may alarm researchers from open-minded collaboration and stir up more concerns and regulations on research funding and cross-institutional collaboration. Internal confidential information has now become a new platform on which to meddle with the breadth of patent applications. The management of intellectual properties in this internal, "domestic" sense is clearly as important (if not more than) as strategizing against external "foreign" competitors.

Another very interesting aspect to this lawsuit is the possibility of it creating a new door to patent litigation, wedged open by commercial laws governing contractual agreements. Since the core issues arose from the allegedly intentional juxtaposition of Tuschl I and II inventions, the scope of the inventions need to be interpreted for any fair judgment on any disputed matter even before the actual issuance of a Tuschl I patent in the US. This is in stark contrast from usual circumstances where the effective scope of an invention is determined under a granted set of claims. Max Planck (and joined by Tuschl II licensee, Alnylam Pharmaceuticals) are in a way asking for compensation from car insurance prior to actually buying a clearly drafted insurance policy.

As this real-life court drama for RNAi continues to unfold, we may not have juicy performances by researcher-equivalents of Julia Roberts and Clive Owen, but we will gradually learn more of how businesses have leveraged the patent system to elevate industrial espionage into a new art. For now, we can only accept the fact that increasing transparency is becoming an unavoidable part of business. And to protect ourselves in this open, transparent environment, we must be at once specific and ambiguous, both forthright and discreet—that is, skilled in the art of duplicity.

For now, it is hard to say who is going to leave the court empty-handed, if not severely damaged in financial terms. However, I do remember in the film "Duplicity," the upper hand eventually goes to the one most skilled in the game of espionage, who picked up on the unmistakable evidence of a relationship between the film’s two major players. Unfortunately, whether the winner goes to the plaintiffs or the defendants, it is very likely in these patent rights disputes, the general public will end up joining Claire and Ray, sitting in the glorious foyer of the exhibition hall of modern medicines, in total loss, without even a glass of complimentary champagne.



Notes

1
In the complaint, Max Planck Institute and its technology-transfer arm, Max Plank Innovation GmBH, together with Alnylam Pharmaceutical, the semi-exclusive licensee of the Inventions in suit, have sued three American research institutions, Whitehead Institute for Biomedical Research, the Massachusetts Institute of Technology and the University of Massachusetts for breach of contract, breach of fiduciary duty, and misappropriation of and damage to two groups of RNAi inventions.


2RNAi is short for RNA interference and refers to short double-stranded ribonucleic acids (dsRNA) which are 21-23 nucleotides in length. RNAi is a natural mechanism of gene silencing—that is, an ability to effectively turn off specific genes in vivo. Many envision RNAi as one of the most promising in treating diseases caused by upregulated genes.


3The Tuschl I inventions are directed to general RNAi methods covering the identification and use of small 21-23nt dsRNAs. This series of inventions is jointly owned by Max Planck, Whitehead, MIT and UMass. On the other hand, the Tuschl II inventions, which have been assigned solely to Max Planck Institute, claim the use and properties of synthetic dsRNAs duplexes with three prime overhangs (that is, unpaired nucleotides sticking out at the 3'end of a dsRNA molecule) for RNAi in human cells.

4Max Planck states in the complaint that "they have repeatedly informed Whitehead on the impermissible expansion of the scope of Tuschl I inventions, but Whitehead has failed, and affirmatively refused, to remove the Tuschl II inventions from the Tuschl I patent applications.” In this regard, Max Planck has subsequently filed another complaint suing the Whitehead-assigned attorney for malpractice.



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TIPO Electronic Filing System Statistics

The Taiwan Intellectual Property Office (TIPO) recently released a one-page report providing a brief glimpse into the status of its patent and trademark electronic filing system.



The data show that since the system's launch in August of 2008, the volume of documents filed through the system has slowly increased to the current levels of over 1,200 documents per month. Most documents filed through the system were previously related to trademark applications, however in May patent-related documents overtook the lead. In June, nearly 700 patent-related documents were filed compared to just under 600 trademark-related documents.

The second graph shows the percentage of documents filed that were new patent or trademark applications. That is, of the nearly 400 documents filed in May, approximately 5 percent were for new patent applications.

This suggests that only around 20 new patent applications were submitted through the system—a mere fraction (0.33%) of the 5,950 total patents applications submitted to TIPO May



TIPO also revealed the top three e-filing applicants, who together accounted for over 1/3rd of all documents filed through the system in June.

A further breakdown of statistics, such as the types of patents applied, is currently not available.

Source & References


The TIPO Report

TIPO Monthly Statistics

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The Archetypes of Creativity

by Charl Goussard, NAIP Legal Research

In our previous two articles, we discussed the Rise of the Conceptual Age and with it the need for creativity in business. We have learned that it's fundamental to create an environment that will foster the leading patents of the Conceptual Age and patents for technology that can NOT be easily outsourced, automated or that merely meet the requirements of functionality.

To create such environments we need people: the RIGHT people!

Arguably, having the right mix of employees is probably more significant to the bottom line than an accurate budget forecast. Employees with six types of aptitudes: Design, Storytelling, Symphony, Empathy, Play, and Meaning, have been identified as crucial archetypes for the modern business. Employing the right mix of people with these elements will set your business on the path of creative success.

1. Design

The value of design lies in its ability to capture the emotional connections which consumers have or might have with a certain product or service. Lojacono and Zaccai (2004), state that the word "design", in the context of contemporary corporations, refers to a complete set of actions and skills required to source useful information which is then converted into a new product or service.

Pink (2005) expands on Lojacono and Zaccai's (2004) point of view by adding that apart from having an emotional connection with products and services, designers could also focus on creating aesthetical value or eccentric attributes to products and services. Designing with an emotional connection will be compelling for those who wish to succeed in the Contemporary age. This new understanding of design has lead to the creation of the design-focused enterprise which gives priority to product and service offerings based on intimate customer knowledge. Examples of Companies who are at the forefront of design, are Apple, IDEO and Ikea.

Even though design-focused organizations do not always succeed initially, their focus on and understanding of customer needs as well as their ability to rapidly and effectively communicate these unique needs to all levels of their organisation, secures a safe haven for these organizations to adjust to the ever-changing market needs (Lojacono and Zaccai, 2004). Design-focused organizations are thus best suited to lead in fast-changing markets due to their ability to sense consumer needs and to act immediately(Lojacono and Zaccai, 2004).

Being a complex skill, Pink (2005) concludes that Design is unlikely to be subcontracted or replaced by machines. Moreover, good design will add meaning, enjoyment and beauty to the world we live and work in (Pink, 2005). It is thus vital to incorporate the right amount of Design archetypes into your business to ensure the creation of unique products or services that will address the needs of contemporary customers.

2.Story


Denning (2001) argued that the move away from storytelling, in an effort to compress information into analytical offers, such as what we have seen during the Information Era, has reached its climax in the twentieth century. Despite our acknowledgment of the limitations of analytic thinking, many of us still attempt to reduce knowledge into simplistic forms (Denning, 2001). This reduction of information, according to Denning (2001) contributes to the creation of hierarchies, and highly regulated organizations – systems which inhibit change in an innovative environment such as would exist in the Conceptual Age.

Adamson, Pine, Van Steenhoven, & Kroupa (2006) identified two essential functions of a good story; firstly, it should "capture your imagination" (Adamson et.al, 2006: 37) and secondly, it should "make you feel" (Adamson et.al, 2006: 37). Stories enable people to experience strategy at a personal level, which is why Adamson et.al. (2006) are convinced that storytelling should be an essential strategic tool.

Stephen Denning, warns however, that despite many corporations' acknowledgment of the importance of storytelling in addressing leadership challenges, very few executives possess the ability to use storytelling effectively (Denning, 2006).

Pink (2005:103) summarizes the importance of story as follows: "When facts become so widely available and instantly accessible, each one becomes less valuable. What begins to matter more is the ability to place these facts into 'context' and to deliver them with 'emotional impact'."

Acknowledging the value of storytelling, seeking and employing such abilities, and using them to propel business into the future seem logical. Two great examples of the power to unite through story is that of Nelson Mandela and the ANC, and more recently Susan Boyle on Youtube. Not every company can employ a Susan or Nelson, but by seeking employees with the ability to share through story, holds unlimited potential!

3. Symphony

Pink (2005) argues that the aptitude of symphony, which includes the ability to see patterns, to pierce the veil which covers links, and to cross edges with the use of innovative imagination, will free professionals in the Conceptual Age to do what computers and outsourced workers have difficulty doing.

In more simple terms: symphony is largely about relationships. Realizing the connections between different, distinct fields will enable the conceptual worker to optimize opportunities.

In the world of patenting/innovation, having the ability to connect the right technologies to form better, improved products, has already shown it's value and will in the future continue to do so. The history of the Post-it note, by 3M, is a typical example of symphony at work.

4. Empathy


"Empathy is the ability to imagine yourself in someone else's position and to intuit what that person is feeling. It is the ability to stand in other's shoes, to see with their eyes, and to feel with their hearts." (Pink, 2005: 159).

Moving away from the logic-dominated Information Age, attributes of caring, understanding emotions, and molding bonds with others, will set achievers apart from the rest (Pink, 2005). Pink explains that empathy is not an isolated skill; it strongly relates to design, story and symphony.
Typically, your inventor of the future will be someone who has the skill to observe and listen to others and then continue to have some deep insight regarding their actions, needs, and desires. These insights will then propel the innovator to improved innovations, addressing the needs of its customers, and setting its products apart from those of his competitors.

Anita Roddick, of The Body Shop, is a good example of a business leader who understood the vale of empathy. The success of The Body Shop, a cosmetics empire, was build on good works as much as good scents: pure products which are not tested on animals.... Roddick seemed to have captured the values of her customers and created an emotional connection with her brand name.

5. Play

Pink (2005) stresses the importance of play in the Conceptual age – not only for the benefits it holds for personal well-being, but also for the benefits of business. He notes that play is becoming increasingly important in all facets of life, revealing itself through humor, games and joyfulness.

During the 1990's, Miller (1996) notes that an increasing number of organisations have realised the value of laughter and play to increase productivity. By incorporating play and laughter in an organisation, a joyful environment is created. Such joyful environment, in return increases staff members’ quality of life, which is then transferred to customers and other staff members in the form of good service (Miller, 1996). Miller (1996) furthermore mentions that fun in the workplace improves communication which leads to better relationships. Laughter, in particular, contributes to a decrease in interpersonal- stress (Miller, 1996). Having good interpersonal relationships in a group, improves collaboration within such group (Miller 1996).

In her study on "Fun in the workplace", Rockman (2003) found that fun, especially laughter, contributes to stress relief, positive attitude, and a sense of comfort in the workplace, which in return increases productivity.
For those mathematicians out there, the equation is simple:

Work + Play = Increased Productivity
Increased Productivity = Profit × ∞

The San Francisco Fish Market
is an example of business that have realized and capitalized on the value of Play – have a look at their entertaining fish business!

6. Meaning

Pink (2005) explains that the material abundance of the twenty first century has liberated many people from the past fight for survival, allowing us to seek higher levels of satisfaction. It is within these higher levels of need satisfaction that the virtues of meaning embody themselves in the form of purpose, transcendence and spiritual fulfillment (Pink, 2005).

Karlgaard (2004) argues that the quest for better quality products and cost reduction has been conquered; what remains is meaning. The need for "Meaning. Purpose. Deep life experience" is on the rise (Karlgaard, 2004: 35). Selling meaning, according to Karlgaard (2004) is the marketing approach for the Conceptual Age. Gone is the pressing need to survive – welcome to the search for a meaningful life!

As businessmen and innovators, we need to nurture our customers and employees' need for meaning. The strong emergence of Corporate Social Responsibility is but one of the pointers toward the value and need for meaningful business! The Starfish Greathearts Foundation is an example of a meaningful organization. It's mission is to bring life, hope and opportunity to children orphaned and made vulnerable by HIV/AIDS. Since it started in 2001 it has grown tremendously – just another sign that meaning is powerful!


Conclusion

Having had an introduction to the 6 archetypes of creativity, a better understanding of creativity in business, and knowledge of the needs of the Conceptual Age, it is now time to experiment with the dynamics of creativity.

Keep in mind that creativity in the workplace is a result of group work, which is exponentially more complicated than the sum of the individuals in the group!

Challenging, but fun!


References:

Adamson, G., Pine, J., Van Steenhoven, T. & Kroupa, J. (2006), "How storytelling can drive strategic change", Strategy and Leadership, Vol. 34, No. 1, pp. 36-41.

Denning, S. (2001), The Springboard: How Storytelling Ignites Action in Knowledge-era Organizations, Woburn, MA: Butterworth-Heinemann.

Denning, S. (2004), "Telling tales", Harvard Business Review, Vol. 82, No. 5, pp.122-129.

Denning, S. (2006), "Effective storytelling: strategic business narrative techniques", Strategy & Leadership, Vol. 34, No.1, pp. 42-48.

Karlgaard, R. (2004), "The Age of Meaning", Forbes Magazine, April 26, 2004 edition, p. 35.

Lojacono, G. & Zaccai, G. (2004), "The Evolution of Design-Inspired Enterprise", MIT Sloan Management Review, No.3 (Spring 2004), pp.75- 79.

Miller, J. (1996), "Humor – an empowerment tool for the 1990's", Empowerment in Organizations, Vol. 4, No. 2, pp. 16-21.

Pink, D.H. (2005), A whole new mind, New York: Penguin.

Rockman, I.F.( 2003), "Fun in the workplace", Reference Services Review, Vol. 31, No.2, pp. 109-110.


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http://www.flickr.com/photos/indieman/50552010/by Charl Goussard, NAIP Legal Research

In our previous article, we discussed the effect of overabundance, automation and outsourcing on today's businesses and how these three factors can be regarded as both initiators and obstacles in the forthcoming era in business – the Conceptual Age.

For a business to succeed, much less survive, in the Conceptual Age, its products and services must rise above these hurdles (and furthermore provide customers with a sense of meaning)--clearly not an easy task.

In their search to differentiate their products and services and ensure a place in the marketplaces of the future, businesses have tried new approaches, fresh ideas, sparks, innovation—or in short, CREATIVITY!


Defining Creativity

Businesses large and small assign a high value on the importance of novel and constructive initiatives (most often seen in the form of patents), which ostensibly flow from the "creativity" of their employees.

Now, most people have a vague understanding of "creativity", and they're probably not completely wrong—

But what exactly is this thing called "creativity"?

Turning to the academics for some elucidation, Amabile, in the Harvard Business Review (1998:4) states that creativity in individuals "is a function of three components: expertise, originality and motivation."



"Expertise" is having knowledge, which can be drawn from technical skills, process skills, and intellectual skills. Take a pilot for instance: technically, this person needs to understand the plane and the art of getting the birdie in the air. Procedurally he/she needs to comprehend the sequencing and result of all the actions needed to fly – and of course the Aviation Regulations! Lastly, it is important that the pilot has some basic intellectual capacity, after all – some calculations as to weight, fuel and speed have to be made to ensure a happy landing.

"Originality", on the other hand, relates to the flexibility and the degree of imagination that people employ when dealing with problems. This might not necessarily be a skill highly rated for pilots, but indeed one you’d need if you aspire to be a renowned architect.

"Motivation" refers to internal and external factors which move people to act. Internal factors which motivate individuals, include things such as personal goals, spirituality etc. and are difficult to influence. On the other hand, external factors, such as corporate culture, team work and leadership can more easily be used to motivate individuals and groups.


Fostering Creativity

Building a "creative" business environment in which these three components may effectively function together is a common and easily mishandled challenge for businesses. One of the major issues they face is of the working "atmosphere", and studies have shown that a working atmosphere that contributes to the fostering of creativity, has "risk taking, experimentation, freedom, and originality", as core principles (Jaskyte and Kisieliene, 2006:135).

These principles, as illustrated in the graph below, are interrelated and since all groups function uniquely, different interactions between these principles will certainly be observed in different groups. Our example of the interaction between these principles, in a R&D group tasked with creating new inventions, can be explained as follows:



To start with, freedom to invent seems to be the driving force within the group, allowing members to take more risk, to do more experimentation without fear of failure, and to come up with original ideas regardless of subsequent constraints. Originality, on the other hand, booms once freedom, risk taking and experimentation increases. An increase in experimentation leads to higher risk taking and subsequently more originality.

These interactions however, depend essentially on environmental factors such as leaders' behavior, the appropriate organizational structure, climate, culture, and human resource practices--and that's why it's so difficult.


The Creative Environment

What we've mentioned so far is all of a theoretical nature: implementing these principles into a business environment, however, is far more difficult. Indeed, if it were so easy, every second R&D department should become the next Google, Apple or Sony.

Let's take a look at a simple scenario - your average R&D department in a high-tech business:

Freedom?? Not only is the freedom to innovate usually limited to specific projects, within specific technological fields, but in addition it is limited by time and available budget. As a result, experimentation is limited to a small selection of "viable" options within these constraints. No "wasting" of recourses!!

Furthermore, most companies spend fortunes these days to determine and limit any possible risk, employing highly qualified legal counsel, meticulous auditors and stringent accountants for the job! In addition, R&D is assigned to the exclusive domain of engineers – creating an environment of like-minded individuals--a disastrous recipe for groupthink and creative crunch! But in all of their well meant efforts, it is originality that suffers... which means less quality inventions and weaker patents!


Archetypes of Creativity

Having created the right structures, leadership models, motivational environments etc., we still need to find the right PEOPLE to innovate. Another challenge...

Janis (1972) warned against the danger of "groupthink", which is a phenomenon that stifles group conflict at any cost, and consequently leaves no room for consideration of different options. Kurtzberg and Amabile (2000-2001) in view of that suggest that protecting and ensuring diversity among group members secures fruitful conflict bearing creativity.

Carefully selecting a diversity of creative archetypes may be a step in the right direction.

In this regard, Pink (2005: 2) advises that "Design. Story. Symphony. Empathy. Play. Meaning." are the creative archetypes which will be the pillars on which tomorrow's fortunes will be build. It is also these skills that will play an increasingly dominant role in future innovation and hence the filing of patents to support such innovation.

It is believed that organizations who embrace the right mix of creative archetypes, coupled with organizational structure, leadership and team development, will be able to make quantum leaps as far as product and service development is concerned. For the R&D focused industries, this will inevitably lead to leading patents and market dominance.


Next Month...

A closer look at Design, Story, Symphony, Empathy, Play and Meaning – the 6 creative archetypes mentioned by Daniel Pink


References:

Amabile, T.M. (1998), How to kill creativity, Harvard Business Review on Breakthrough Thinking, pp.1- 28.

Janis, I.L. (1972), Victims of Groupthink: A psychological study of foreign policy decisions and fiascoes, Boston: Houghton Mifflin.

Jaskyte, K. and Kisieliene, A. (2006), Determinants of Employee Creativity: A survey of Lithuanian Non-profit Organizations, Voluntas, Vol. 17, pp. 133-141.

Kurtzberg, T.R., and Amabile, T.M. (2000-2001), From Guilford to Creative Synergy: Opening the Black Box to Team-Level Creativity, Creativity Research Journal,Vol.13, Nos. 3&4, pp. 285-294.

Pink, D.H. (2005), A Whole New Mind, New York: Penguin.

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The Future of Patenting - The Rise of the Conceptual Age

http://www.flickr.com/photos/migrainechick/3185150010/by Charl Goussard, NAIP Legal Research
with Jeffrey Chang, NAIP Editorial

"The last few decades have belonged to a certain kind of person with a certain kind of mind – computer programmers who could crank code, lawyers who could craft contracts, MBAs who could crunch numbers. But the keys to the kingdom are changing hands. The future belongs to a very different kind of person with a very different kind of mind – creators and empathizers, pattern recognizers, and meaning makers."

    – (Pink, A Whole New Mind, 2005: 1)

Introduction

The world of patenting is changing. But into what? From the beginnings of the renaissance into the information-driven era of today, the development of patents and the patent industry has taken a long and sinuous path: from humble, quiet beginnings to today's highly-prized and strategically-brandished asset. Tomorrow, undoubtedly it will evolve yet again. And while no one can know exactly what the future holds in store for patents, we can see from history a direction for the future.

The patents and patent industry of tomorrow will be born in the same spirit of creativity and individuality found in inventors like DaVinci, yet nurtured and propagated in the advanced business systems of the world economy. Thus, though inventors and corporations may be swamped with the business of today, they must always be wary that the nature of their work is of tomorrow. They must prepare their people, strategies and operations so that their patents remain, as innovation should always be, on the cusp of the future.


The Story of Patenting

World societies, economies, cultures and so on, have changed significantly in the past hundreds of years, and these changes have influenced patents and the patent industry as well. The purpose of innovation and patents, their function, use, understanding and even definition are shifting even today. What has been their path? We'll look at it briefly below:


    1) The Origin of Innovation: The Agricultural Age
During the renaissance and up to the beginning of the 20th century, the field of patenting was inventor driven; people like Da Vinci and peasant farmers created their own "tools" based on their specific individual needs and creative interests. This more personal and perhaps more humanistic approach to innovation and patents characterized the patent industry in this age.

    2) Standardization of Innovation: The Industrial Age
The increasing number of mechanical and electrical inventions supported the move to industrialization, which led to more standardized, mass produced products. Innovation was now being driven by the needs of the masses – standardization enabled mass production, which in turn resulted in huge cost savings. As a result this sudden ability for an invention to reach the masses started to shift the meaning and purpose of innovation and patenting toward commercialization.

    3) The Business of Patents - The Information Age
Inventors were now increasingly driven by the needs of businesses and in the process of cost saving, individualism had to give way to structure and even more standards. Logical thinking and analytical cause-and-effect models became the new drivers of innovation and patenting soon became the business of MBA’s, Lawyers and Computer programmers. Leading inventions were now directed by industry standards and patent pooling – long lost the days of the individual inventor. The value of patents was determined by their "essentiality" to industry standards. Patenting now became a strategic business tool, used to threaten and persuade competitors.

    4) The Future of Patenting - The Conceptual Age
During the Information Age, patenting was driven by the linear/ logical needs of businesses. However, this process of analytical, logical thinking is being substituted by the very computers we created (and patented) and we now find ourselves at the beginning of a new innovation era.

Some of the characteristics that we can expect to emerge from this new "Conceptual Age" include people-focused service, products that fit individual lifestyles, and an emphasis on human and emotional bonding. The Conceptual Age is grounded on the strengths of human imagination, emotion, a deeper understanding and appreciation for meaning – fundamental human qualities that address the needs of the individual.

Therefore in this future age, we can expect that the new drivers of patenting will combine the creative brilliance of a Da Vinci with the business expertise of a Gates and in addition incorporate a more compassionate approach to problem solving, creating not only practical solutions, but meaningful and customized inventions that will once again address the specific needs of the individual.




Why the Shift to the Conceptual Age?

During the information age, inventors and businesses found many opportunities to capitalize, commercialize and even mass produce innovation in the form of patents. Over time, however, much of the uniqueness commonly attributed to patents and patented products began to disappear.

A prospective buyer in most markets today is met by an overabundance of similar products, at affordable prices. In addition, automation has taken over the place of the traditional craftsmen or inventor; computer software is fast becoming "leading inventors".

Furthermore, the work of knowledgeable employees, such as computer programmers and machine operators, are being outsourced to the cheaper labor markets of Asia's developing countries.

To make thing worse for the manufacturer, educated masses are now demanding even more from the products they buy. Product functionality has now been coupled with a need for meaning and lifestyle enriching experiences.

The main reasons for the shift to the Conceptual Age can thus be summarized in three words: Abundance, Outsourcing and Meaning.


What next?

In the Conceptual Age, industries (who wish to flourish) will have to strategize around the following 3 questions:
  1. Can my service/product be outsourced?
  2. Can my service/product be automated?
  3. Does my service/product serve a need that goes beyond functionality?
If you can answer NO to all of the above questions, then you are most likely in the position to offer a meaningful service/product that will be valued in the new age.

In addition, businesses with active research and development (R&D) should focus on: How to create an environment that will foster the leading patents of the Conceptual Age and patents for technology that can NOT be easily outsourced, automated or that merely meet the requirements of functionality.

In our follow-up article, we will have a closer look at: "What constitutes creativity in a business environment?" and "a discussion (with examples) of the six essential Right Brain Directed abilities according to Pink, namely: design, story, symphony, empathy, play and meaning."

References:
Pink, D.H. (2005), A whole new mind, New York: Penguin.
Did You Know? http://www.youtube.com/watch?v=Mmz5qYbKsvM&feature=fvst

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FRANDly Patent Licensing

http://www.flickr.com/photos/sklathill/1405010166/
By Charl Goussard – NAIP Legal Research
and Jeffrey Chang – NAIP Editorial

Introduction

Imagine a single product: the myriad technologies involved, the swarm of patent rights holders, and the sea of comparable, alternative technologies. With so many complex and conflicting issues, it seems unlikely that an easy to use, functional product can ever reach the consumer. Yet, cell phones have become everyday objects. Dozens of companies put out hundreds of models that can be used interchangeably (for the most part) with different networks across the globe. This has been the power of FRAND patent licenses.

"FRAND" (Fair, Reasonable and Non-Discriminatory) is an acronym used to describe patent licensing terms. Despite an ambiguous nature, FRAND terms are a legal obligation imposed on IPR holders by certain standard setting organizations (SSOs). In exchange for providing FRAND terms to licensees, the IP is often made or included in an industry standard.

In this light, the FRAND concept has much significance for IPR holders, licensees, entire industries and even society. An IPR holder who successfully has his patent incorporated into a standard effectively guarantees a revenue stream. A licensee, often a manufacturer, is provided with a product roadmap of sorts, as well as a guaranteed market. The industry is able to simplify and consolidate its efforts behind a single technology to speed up adoption, and as a result, speed up the development and advancement of society.

But each advantage is countered by a disadvantage, and the ambiguousness of words like "fair" and "reasonable" too easily leads to dissenting interpretations. Controversy over FRAND has only increased—as evident in famous cases like Broadcom vs. Qualcomm and most recently Nokia vs. IPCom. What are the issues? What is at stake? In this paper we will attempt to address these topics and hopefully, clear up some of the confusion about FRAND.


Understanding FRAND

FRAND is inherently a controversial concept. What are fair, reasonable and non-discriminatory licensing terms? Considering the complexity and subjectivity of IP/patent valuation, FRAND terms may be vastly different for the licensor and licensee. Why even bother with FRAND then? Why not simply allow the forces of the (mostly) free markets to decide? To begin understanding FRAND, let us first look at some of the more tangible elements of its history, purpose and definition.

    Background
FRAND is a concept that first became prominent in the 1970s and 1980s amid the promising developments in networking/telecommunications technologies. Like the standardization of railroad track sizes or measurement systems, world and businesses leaders saw great opportunity for growth and advancement of society in these technologies.

But at the same time, increasing commercialization of patents led them to fear that the business and politics of patents would hinder this growth. SSOs were established as a way evaluate and choose between competing technologies and facilitate their propagation. One of the tools developed to deal with concerns of IPR holders and potential licensors was the concept of FRAND terms.

    Purpose & Function
FRAND's function and purpose varies only slightly in each context, but these differences result in widely differing expectations and definitions for FRAND. For this paper we’ll look primarily at FRAND in context of standard setting.

As an integral part of SSOs' agreements, the general consensus is that FRAND serves to:
    1. Provide contributors incentive to reveal and contribute technologies (through opportunities to maximize and optimize market price and volume).
    2. Allow SSOs to select and implement the best available technologies.
    3. Ensure a competitive outcome in a potentially monopolistic/oligarchic market that might result from the setting of a standard.

From these general principles, FRAND can be seen as a mechanism that attempts to allow an optimal competitive market to develop for the benefit of all the participants and society in general. Although individual parties may claim otherwise, this purpose and function seems to be most in line with the background and "spirit" of FRAND.

    Implementation
The exact origins of the phrase "fair, reasonable and non-discriminatory" have not been documented, but it likely gained prominence due to its inclusion in the IPR policy of the European Standard Setting Organization (ETSI), established in 1988. Today nearly every major standards organization has implemented FRAND obligations in one form or another.

In the ETSI Rules of Procedure, Annex 6: IPR policy, FRAND appears in Clause 6.1:

When an ESSENTIAL IPR relating to a particular STANDARD or TECHNICAL SPECIFICATION is brought to the attention of ETSI, the Director-General of ETSI shall immediately request the owner to give within three months an irrevocable undertaking in writing that it is prepared to grant irrevocable licenses on fair, reasonable and non-discriminatory terms and conditions under such IPR to at least the following extent:

● MANUFACTURE, including the right to make or have made customized components and sub-systems to the licensee's own design for use in MANUFACTURE;
● sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED;
● repair, use, or operate EQUIPMENT; and
● use METHODS.

For any IPR to be included in an ETSI-backed standard, the IPR holder must agree to Clause 6.1 in the ETSI IPR Licensing Declaration Form.

    "Defining" FRAND
As is evident from above, FRAND is purposely left ambiguous and defining it is very much a case of circumstances. However, that hasn't stopped people from attempting. In court cases such as Nokia vs. Qualcomm, parties have sought to request judges to narrow down the meanings of FAIR, REASONABLE and NON-DISCRININATORY. But up to now, no judge has had the universal wisdom to put a foolproof meaning to these generic terms.

The fact is FRAND is merely a guideline that should be interpreted within the scope of its technical, cultural, and business environment. Detailing FRAND terms could have the adverse effect of excluding the freedom to negotiate – having exactly the opposite effect on the purpose and function of FRAND. FRAND should not be used to benefit any one party to the disadvantage of another.


What do FRAND terms offer me?

A good understanding of the benefits and disadvantages of FRAND can assist participants and interested parties to an SSO to evaluate their negotiating strength.

IPR Holders
    Advantages
  • By employing FRAND terms, IPR holders are in a position to attract more licensees and to generate more royalties.
  • Standards (ex. Mobile phone industry), which use FRAND licensing terms are used by huge numbers of manufacturers, increasing the potential royalty income for a holder of an essential patent in that standard.
  • By employing FRAND terms, IP holders are in a position to negotiate cross-licenses with licensees, thereby strengthening their own patent portfolios.
    Disadvantages
  • Under anti-trust/anti-competition legislation in various countries and/or regions, IPR holders can be forced to license their exclusive patent rights under FRAND terms.
  • The terms of the licensing agreement are restricted by the FRAND limitations.
  • FRAND creates uncertainty – there is no universal guideline as to what FRAND means – every licensing deal should be dealt with separately.

Licensees
    Advantages
  • FRAND terms provide licensees with the right to demand a license to essential patents – on condition that such patent(s) are essential to the standard.
  • Licensing under FRAND terms has a lower transaction cost than separate licensing.
  • One-stop shopping for licensees – by obtaining licenses to the essential patents of a standard, licensees avoid the time-consuming exercise of searching individual patents which might be infringed by the technology.
  • Decreased risk of infringement.
  • Cross licensing opportunity with IPR holder (if the licensee has essential patents of his own).
    Disadvantages
  • FRAND terms are uncertain/ambiguous – royalty rates are not clear and "fair and reasonable" is usually not defined.
  • Collusion by IPR holders, who are members of a patent pool or standard setting body, may easily appear.
  • IP holders may manipulate the standard setting process: they may wait for a wide adoption of the standard before disclosing their patent and then charging excessive royalty fees to those who employ the standard.
  • FRAND terms can be used to force a licensee to buy a patent that they don't really need.

Markets/Society
    Advantages
  • Standards are open to all who can afford the FRAND terms.
  • Pooling patents and licensing them under FRAND terms can be welfare enhancing.
    Disadvantages
  • FRAND terms may impact fair trade by monopolizing the market and fixing prices.
  • Quantifying FRAND is very hard – the uncertainty of fair and reasonableness leaves the door open to disputes that are difficult to judge.

Conclusion

FRAND terms can act as a helpful measurement of strength in a fair and competitive market. It can guide participants into collaboration on terms and conditions mutually agreed upon, without adversely affecting third parties or society as a whole. A word of warning though: FRAND terms do not guarantee any specific outcome. The ultimate result of any license negotiations depends on the positions of the parties, market forces and the socio-political and economic environment in which the parties operate.

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by Heidi Yeh - NAIP Legal Research

For both local and global pharmaceutical companies, the forthcoming amendments to the Taiwan Patent Act are of utmost importance as they will include substantial changes that will affect the biomedical industry in Taiwan. The Taiwan Intellectual Property Office (TIPO) has invested significant amounts of time in reviewing the current Patent Act and proposed amendments in an effort to bring Taiwan's patent laws in line with global trends. To hear industry opinions on the amendments, TIPO held a public hearing on February 25th, 2009.

----

In the first quarter of 2009 alone, three major pharmaceutical companies announced mergers with other major pharmaceutical or biotech companies. Pfizer announced on January 26th that it will buy Wyeth for $68 billion USD in cash and stock, making this the largest merger in value to have occurred in the past decade. Merck & Co. later announced on March 9th that it agreed to acquire rival Schering-Plough Corp. in a deal worth $41.1 billion USD. Then on March 12th, Roche announced that it is buying up just less than half (44%) of Genentech for $46.8 billion USD. This is the largest merger by value in Switzerland ever. The main reason for these mega-deals? Every one of these companies, including Pfizer, is facing the same predicament: the impending expiration of patents for major drug products.

The nature of biomedical patents is such that they provide extremely strong and complete market protection for IPR holders during the patent term. Only once a patent term expires may generic versions of a product enter the market. However, the duration of a biomedical patent term is not so easily determined. Generally, time-consuming phase I-III clinical trials are required before a drug product is even authorized to enter the market. These trials can easily last several years, significantly reducing the duration of the patent term in which the IPR holder may capitalize on the patent. As a result, regulations compensate by allowing the patent term for human drugs, antibiotics, or human biological products to be extended according to the delayed regulatory review time span.

In Taiwan, regulations on the sale of generic drugs currently exist only in the Pharmaceutical Affairs Act and provide only broad guidelines regarding the issue. Therefore the promulgated revised Taiwan Patent Act will include updated and more detailed regulations on the sale of generic drugs. To help clarify these new regulations in the revised Patent Act, TIPO held a public hearing on February 25th, 2009 to discuss the changes related to biomedical patents. Below is a summary of the highlights of the discussion.

Explanations of the amendments in Taiwan Patent Act Revision Draft (02/16/2009) are as follows:

Highlights of the Revised Draft of the Taiwan Patent Act
  1. To encourage research and investment, amendments have relaxed the requirements for extension of patent term requests. Currently, applying for patent term extension under the current Patent Act requires having had a minimum two-year delay in entering the market due to government approval procedures. In keeping with the concept of using patent term extensions to compensate for lost capitalization opportunities, the minimum two-year threshold will be eliminated.

  2. *Note: other countries such as Japan, Korea, the United States, Germany and the United Kingdom have no minimum delayed time period requirement.

  3. A pharmaceutical product, i.e. a drug or an agricultural product, may often have more than one application. However, to prevent abuse of the system—by continually applying for patent term extensions for different applications—an extension of patent term may now officially only be granted once and valid only for the application specified. For example, when an invention includes two claims, as an antiseptic and as an insecticide, if the patent term of the antiseptic is granted an extension with an agricultural permit, protection for the invention’s application as an insecticide may NOT be extended.


  4. Extension of patent terms may now no longer be accepted for veterinary drugs.


  5. Research on a generic drug does not violate the patent rights of the corresponding brand-name drug's IPR holder. In addition, so-called "listing trials" are not considered a form of research and not required for approval of a market license.


  6. In order to cope with international emergencies, or to make non-profit-seeking use of a patent for enhancement of public welfare for developing countries and least developed developing countries that may not manufacture drugs within their countries, the Patent Authority may, upon an application, grant a right of compulsory licensing to the applicant to put the patented invention into practice; provided that such practicing shall be restricted mainly to the purpose of satisfying the requirements of the specific market with limited quantities.

Of the proposed amendments, one of the most controversial has been the exemption of "research" on generic drugs from the scope of patent protection. Generic drug pharmaceutical companies prefer that their products enter the market as soon as possible; the international pharmaceutical companies, on the other hand, prefer to maximize their rights in all interpretations. The amended Patent Act attempts to compromise between the two parties by permitting research on generic drugs during the patent term, but excluding steps such as listing trials from the scope of "research". Yet listing trials, though not required for a market license, are generally required by hospitals to test the efficacy of the generic drugs. This effectively blocks the generic drug maker from the market until expiration of the patent.

During the public hearing, representatives from both sides expressed their comments and concerns. But due to the aforementioned reasons, the amendments related to biomedical products, and to which extent should the government explain them, still remain under debate.


Conclusion

TIPO has clearly stated that the main purpose of the amendments to the Patent Act are the elimination of the minimum two-year threshold, the clearer interpretation of the restrictions on extension of patent terms, adding compulsory licensing provisions, and introducing the concept of exemption on research for generic drugs. Although the wordings of the amendments were criticized at the hearing and requests for another hearing on the same subject matter have been made, TIPO has not yet announce a decision.

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03/13/2009 IP News & Blog Round-Up

  • Forget Patent Trolls, we should be worrying about Troll Patents. - The term "patent troll" is now so toxic that even the man who coined the term prefers not to use it. The solution? Shift the definition to the patents. Will it catch on? (from Patently-O)
  • Who's scared of IPR in China? Well, Multinational Companies are. Of over 100 multinationals surveyed, nearly three-fourths cited IPR issues as a major concern. They have also noted "incremental" improvements in this aspect by the Chinese government, but with the economic downturn, whether that trend continues remains to be seen. The survey results can be found here. (from IP Dragon)
  • Here's why these companies are scared. A brief recount of a conversation between an American company and a law firm about how the company's entire million-dollar investment in China just upped and disappeared over night. And thanks to unwise practices, the American company has no legal recourse. Plus other stories about IPR theft in China. (from China Law Blog)
  • Study: free markets superior to patent monopolies. A fascinating study published by Science magazine in which an optimization/maximization experiment was assigned to students with two reward model: one analogous to the patent system, one to the free market. The results were close, but the Free Market model slightly edged the patent model for best results. The paper can be downloaded (account required) here. (from Ars Technica)

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