Posts by: Axel H. Horns
Today we have seen general elections to the Berlin City Parliament. Perhaps you may know that Berlin is not only a big city with some 3.5 Million inhabitants which also is the capital of Germany. In addition, Berlin constitutes one of the 16 states of Germany. Hence, Berlin City Parliament plays its role not only in the context of the City but also with regard to the federal structure of Germany.
At the time of writing of this posting, exit polls show that the Berlin chapter of the German Pirate Party will surpass the 5% quorum by a quite sensational 8-9% share on votes. This result shows that the mood especially of younger voters and first time voters is changing, moving away from all of the established parties including the Greens and the Left (Die Linke). At the occasion of the last Germany-wide general elections to the federal parliament in September 2009, the Pirate Party had got less than 2% of the votes. Many voters are reluctant to cast their vote for any party that is well below the 5% hurdle because of the high probability that voting for such party has no power to change anything. However, now, after the Berlin chapter of the German Pirate Party not only got over the 5% quorum by some narrow margin but obtained a sensational surplus of up to 4 percent points over the 5% hurdle, such reservations dwindle and, hence, I expect to see them in more State Parliaments of other Bundesländer in the coming years. And, like it or not, taking the history of the other German grassroots party, the Greens, as a precedent, the Pirates might well sit in the lower chamber Bundestag of the German Parliament in 2017 if they miss the 5% hurdle in the next general elections scheduled for fall 2013.
What does this mean with regard to Intellectual Property politics and business?
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On May 24, 2011, the EU Commission published Document COM(2011) 288 final (Available via EU Council under Document 10668/11) titled Proposal for a Regulation of the European Parliament and the Council on entrusting the Office for Harmonisation in the Internal Market (Trade Marks and Designs) with certain tasks related to the protection of intellectual property rights, including the assembling of public and private sector representatives as a European Observatory on Counterfeiting and Piracy. In the Commission Document, the background is described as follows:
One of the main initiatives to address this threat launched by the Council and the Commission in 2009 was to set up a European Observatory on Counterfeiting and Piracy to improve understanding on intellectual property rights (IPR) infringements (‘the Observatory’). In line with the Council’s request of 2008, the Observatory in its current form is a centre of expertise with no legal personality managed by the Commission services. Its role is twofold:
(i) becoming the central resource for gathering, monitoring and reporting information and data related to all IPR infringements and
(ii) be used as a platform for cooperation between representatives from national authorities and stakeholders to exchange ideas and expertise on best practices, to develop joint enforcement strategies and to make recommendations to policy-makers. The management of the Observatory encompasses a series of tasks and activities under the responsibility of Commission services.
The Observatory is currently run by three Commission civil servants (two administrators and one assistant) who, in addition also carry out all policy work related to the Observatory.
The latest Council Resolution relating to the Observatory added further responsibilities, by inviting it to assess the needs for implementation of EU-level training programmes for those involved in combating counterfeiting and piracy. A September 2010 European Parliament Resolution additionally called for the Observatory to compile scientific research data on counterfeiting and IPR regulation. Finally, a recently published study commissioned by the Commission’s Directorate General for Trade recommends that the Observatory should become a single point of contact within the Commission, for external parties, and an international point for the creation and dissemination of best practice.
Whereas the current circumstances of the Observatory were appropriate for the launch phase of the project, with its institutional framework being established through consultations and meetings, there is no scope for expanding the Observatory’s remit and developing its operational activities, both of which require a sustainable infrastructure in terms of human resources, financing and IT equipment as well as access to the necessary expertise.
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As already reported in my earlier posting, the European Union is just about to sign ACTA, the Anti-Counterfeiting Trade Agreement negotiated between the European Union and its Member States, Australia, Canada, Japan, the Republic of Korea, the United Mexican States, the Kingdom of Morocco, New Zealand, the Republic of Singapore, the Swiss Confederation and the United States of America. ACTA is a proposed plurilateral agreement for the purpose of establishing international standards on intellectual property rights enforcement.
Yesterday, the EU Council has published Document 12192/11 conveying a draft Decision saying that the President of the Council (i.e. Mr Herman Van Rompuy) shall be authorised to designate the person(s) empowered to sign the Agreement on behalf of the Union. Moreover, the Official text of ACTA has been published with Document 12196/11.
It is to be understood that this text is a Draft only; however, the formal adoption thereof surely will go through on one of the next sessions of the EU Council. However, afterwards that matter will be dealt with in the European Parliament as well as in each of the EU Member States.
ACTA is debated controversially because of the secrecy of some of the negotiation rounds. Moreover, there are doubts as to if ACTA is compatible with EU Acquis Communautaire; see my earlier posting there.
ACTA was born out of the frustration of the major industrialised economies with progress on monitoring and norm-setting on the enforcement of intellectual property rights in multilateral fora. In the WTO Council for TRIPS (‘TRIPS Council’), Brazil, India and China have consistently blocked the inclusion of enforcement as a permanent agenda item. At the World Intellectual Property Organisation (WIPO), enforcement issues were relegated to a purely advisory committee.
One of its features is the creation of another institutional structure in the field of Intellectual Property law besides WIPO and WTO, i.e. the ACTA Committee provided for in Article 36. This Committee will be entitled to:
- review the implementation and operation of ACTA;
- consider matters concerning the development of ACTA;
- consider any proposed amendments to ACTA;
- decide upon the terms of accession to ACTA of any Member of the WTO; and
- consider any other matter that may affect the implementation and operation of ACTA.
The Committee may decide to:
- establish ad hoc committees or working groups to assist the Committee in carrying out its responsibilities or to assist a prospective Party upon its request in acceding to ACTA;
- seek the advice of non-governmental persons or groups;
- make recommendations regarding the implementation and operation of ACTA, including by endorsing best practice guidelines related thereto;
- share information and best practices with third parties on reducing intellectual property rights infringements, including techniques for identifying and monitoring piracy and counterfeiting; and
- take other actions in the exercise of its functions.
Perhaps, on EU level the function of the ACTA Committee should also be discussed in relation to the planned new compentences of OHIM in the field of IP enforcement.
Mailroom of EU Council during summer reccess
On July 10, 2010, I had reported on the planned Organisation of work on the patent reform under the Polish Presidency. Now, as we still are within the summer recess period where nothing appears to move forward there might be a little stretch of time to contemplate as to how things might move on during next fall.
There is a recent precedent of successful adoption of enhanced co-operation in the EU: As we can learn from Wikipedia, with the rise in cross border divorce in the EU, common rules were put forward to settle the issue of where trans-national couples can divorce in the EU. However Sweden was blocking the new rules, fearing the loss of its liberal divorce law (divorce law differs strongly, with Nordic liberalism being in contrast to more conservative countries such as Malta which – until recently – did not even allow it). In order to allow those willing states to proceed without Sweden, in July 2008 nine countries put forward a proposal to use enhanced co-operation. At a meeting of the justice ministers on July 25, 2008, the nine states decided to formally seek the measure of enhanced cooperation; eight states formally requested it from the European Commission on 28 July 2008.
When analysing this narrative on the EU Council document repository, we get that there was a Council Document 9898/2/10 REV 2 titled Proposal for a Council Decision authorising enhanced cooperation in the area of the law applicable to divorce and legal separation – Adoption dated June 04, 2010. The corresponding Council Document concerning the European patent with unitary effect appears to be No 5538/11 dated February 11, 2011 titled Council Decision authorising the creation of unitary patent protection.
On December 13, 2010, Document 17523/10 was published titled Council Regulation implementing enhanced cooperation in the area of the law applicable to divorce and legal separation. This Implementation Regulation was again amended and finally adopted by the Council.
Obviously there seems to be a two-step approach:
- In a first step, the basic question as to whether or not utilisation of the enhanced co-operation model is politically endorsed by a sufficient EU Council majority at all must be decided (Council Decision authorising the enhanced co-operation).
- In a second step, the details of the enhanced co-operation must be decided (Regulation of the Council [and the European Parliament, if applicable] implementing the enhanced co-operation).
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As we know from Wikipedia, stress testing is a form of testing that is used to determine the stability of a given system or entity. It involves testing beyond normal operational capacity, often to a breaking point, in order to observe the results. The concept is quite fashionable nowadays; it has reached mainstream in the context of the financial sector and even when making an assessment of operational characteristics of a railway station.
Now it looks as if we shall be witnesses of something that comes near to a major stress testing exercise of the patent system.
We all are supposed to be aware that an awful lot of litigation is currently going on in the field of mobile devices like smartphones and tablet computers. Reuters have published nice infographics on patent-related suits between mobile device / component manufacturers here. Moreover, there are press reports saying that Apple, Inc., is about to launch another patent based suit against Samsung allegedly aiming at a EU wide ban on all of Samsung’s smartphones and tablet computers under its Galaxy brand. If these speculations were true and if Apple were to prevail in such battle, the suit could not only be a blow to Samsung but also to the Android ecosystem in its entirety.
Another litigation front has been opened by a company named Lodsys, a non-pracitcing entity (NPE) suing certain individual software developers who brought to market smartphone apps which allegedly are infringing Lodsys’ patent rights.
It appears to be quite clear that the motivation of Google to acquire Motorola Mobility for USD 12,5 billion is mostly fueled by their desire to overcome a perceived inferiority of their own patent portfolio.
Since some time there is a political dispute ongoing relating to the enforcement of IP rights – here: in particular trade marks and patents – at EU borders when generic drugs get onto EU territory for transit. The concerns are that drugs might get seized during transit by EU border control Officials despite the fact that trade therein is illegal neither in the country of origin nor in the final destination country. Also in view of ACTA such voices have been raised which got, however, a firm denial from the EU Commission; see also the Directorate-General for External Policies of the Union (Directorate B – Policy Dept.) publishing a study conveying an assessment of the Anti-Counterfeiting Trade Agreement (ACTA) which had been requested by the European Parliament’s Committee on International Trade .
This particular issue has long been a disputed item on the agenda of negotiations for an India / EU Free Trade Agreement. EU recognises India as an important trade partner for the EU and a growing global economic power, saying that it combines a sizable and growing market of more than 1 billion people with a growth rate of between 8 and 10 % – one of the fastest growing economies in the world. Although it is far from the closed market that it was twenty years ago, India still also maintains substantial tariff and non-tariff barriers that hinder trade with the EU. The EU and India hope to increase their trade in both goods and services through the Free Trade Agreement (FTA) negotiations that they launched in 2007. According to a press report, Indian and European trade ministers had hoped to sign the ambitious deal by the end of March 2011. However, there have been, inter alia, problems with the protection of intellectual property.
On July 28, 2011, the Ministry of Commerce & Industry of India has published a press release (emphasis added by me, -AHH):
“European Union has proposed a settlement of the dispute by confirming the detailed principles agreed in the Understanding to guide border enforcement of intellectual property in the EU. In addition, EU agreed to India’s request for adoption of guidelines which would confirm the principles agreed to in the Understanding with a view to give greater and immediate legal certainty for producers and traders. EU also agreed to reflect the principles contained in the Understanding in its proposal for a new Regulation to replace Regulation 1383/2003. In return the EU sought an assurance that India would refrain from further steps in the ongoing dispute. Mr. Jean-Luc Demarty, Director General, European Commission sent a letter to this effect on 17 June 2011 to Commerce Secretary Shri Rahul Khullar.
India has taken note of the commitments offered by the EU. India has reiterated the core principle of the Understanding that the mere fact that medicines are in transit through EU territory, and that there is a patent title applicable to such medicines in the EU territory, does not in itself constitute enough grounds for customs authorities in any Member State to suspect that the medicines at stake infringe patent rights. However, a situation in which medicines are in transit through EU territory and there is adequate evidence that satisfies the customs authorities that there is a substantial likelihood of diversion of such medicines on to the EU market may constitute enough grounds for customs authorities to suspect that the medicines at stake infringe patent rights in the EU. [...]“
Hence, it looks as if pragmatism and common sense have prevailed in taking away this particular obstacle to the conclusion of the Free Trade Agreement.
(Image: EU Commission)
Recently the Directorate-General for External Policies of the Union (Directorate B – Policy Dept.) has published a study conveying an assessment of the Anti-Counterfeiting Trade Agreement (ACTA) which had been requested by the European Parliament’s Committee on International Trade (Contract No. EXPO/B/INTA/FWC/2009-01/Lot7/ 12 June 2011 PE 433.859 / Editorial closing date: 11July 2011). Of course, the study should be construed in a way that any opinions expressed in the document are the sole responsibility of the respective author(s) and do not necessarily represent the official position of the European Parliament. Political debates in coming fall will show the Parliament’s position.
Named authors of the study are:
- Prof. Anselm Kamperman Sanders, Faculty of Law, Maastricht University
- Assistant Professor Dalindyebo Bafana Shabalala, Faculty of Law, Maastricht University
- PhD Researcher Anke Moerland; Faculty of Law, Maastricht University
- Dr. Meir Pugatch, IGIR Fellow, Director of Research, Stockholm Network, and Senior Lecturer, University of Haifa
- Paolo R. Vergano, IGIR Fellow and Partner at Fratini Vergano – European Lawyers
As set out in the study, ACTA was born out of the frustration of the major industrialised economies with progress on monitoring and norm-setting on the enforcement of intellectual property rights in multilateral fora. In the WTO Council for TRIPS (‘TRIPS Council’), Brazil, India and China have consistently blocked the inclusion of enforcement as a permanent agenda item. At the World Intellectual Property Organisation (WIPO), enforcement issues were relegated to a purely advisory committee. According to the study, ACTA can also be seen as an extension of the existing strategies of the main ACTA parties to include significant provisions on enforcement in their bilateral and regional free trade agreements (FTAs).ACTA was motivated by a desire to establish common provisions in international trade agreements containing rules on anti-counterfeiting. Within the EU the ACTA has been the source of some concerns regarding the non-transparent way it was negotiated and whether it meets to aims agreed by the European Parliament and Commission that it would be compatible with the existing acquis communautaire and the World Trade Organisation’s Trade Related intellectual Property rights (TRIPs) Agreement.
The study addresses two key questions regarding ACTA:
- Is it in conformity with the EU Acquis; and
- is it in conformity with the existing international obligations of the EU and its member states?
The question as to whether or not ACTA it in conformity with the EU acquis communautaire is of some political importance. Of course, the respective competent and empowered bodies of the EU are free to extend that acquis communautaire at any time if so decided. However, in view of general concerns of conflicts between ACTA and civil liberties and legitimate economic interests not based on IPRs, plus critics on the murky, secrecy-shrouded history of ACTA, there is a fierce public debate if ACTA should be ratified at all. In order to ease the formal adoption of ACTA, the EU Commission insists on their view that ACTA is merely declarative, i.e. it does not extend the acquis communautaire. If an expert opinion would supply reasons for rejecting this position, the Commission might well come into political trouble. This scenery appears to be the set prepared for the assessment now published.
The study finds:
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Today, the Court of Justice of the European Union (CJEU) has published the final decision in Case C‑324/09 (L’Oréal SA et al. vs. eBay International AG et al.).
From the Court decision we learn that L’Oréal is a manufacturer and supplier of perfumes, cosmetics and hair-care products. In the United Kingdom it is the proprietor of a number of national trade marks. It is also the proprietor of Community trade marks. L’Oréal operates a closed selective distribution network, in which authorised distributors are restrained from supplying products to other distributors.
Furthermore, eBay operates an electronic marketplace on which are displayed listings of goods offered for sale by persons who have registered for that purpose with eBay and have created a seller’s account with it. eBay charges a percentage fee on completed transactions. eBay enables prospective buyers to bid for items offered by sellers. It also allows items to be sold without an auction, and thus for a fixed price, by means of a system known as ‘Buy It Now’. Sellers can also set up online shops on eBay sites. An online shop lists all the items offered for sale by one seller at a given time. Sellers and buyers must accept eBay’s online-market user agreement. One of the terms of that agreement is a prohibition on selling counterfeit items and on infringing trade marks. In some cases eBay assists sellers in order to enhance their offers for sale, to set up online shops, to promote and increase their sales. It also advertises some of the products sold on its marketplace using search engine operators such as Google to trigger the display of advertisements.
According to the factual section of the Court decision, starting point was that on 22 May 2007, L’Oréal sent eBay a letter expressing its concerns about the widespread incidence of transactions infringing its intellectual property rights on eBay’s European websites. L’Oréal was not satisfied with the response it received and brought actions against eBay in various Member States, including an action before the High Court of Justice (England & Wales), Chancery Division.
L’Oréal’s action before the High Court of Justice sought a ruling, first, that eBay and the individual defendants are liable for sales of 17 items made by those individuals through the website www.ebay.co.uk, L’Oréal claiming that those sales infringed the rights conferred on it by, inter alia, the figurative Community trade mark including the words ‘Amor Amor’ and the national word mark ‘Lancôme’. The Court decision confirmed that it was common ground between L’Oréal and eBay that two of those 17 items are counterfeits of goods bearing L’Oréal trade marks.
The Court (Grand Chamber) today ruled:
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After Poland took over EU Presidency from Hungary on July 01, 2011, the Council of the European Union has published on July 08 a Document 12661/11 titled Organisation of work on the patent reform under the Polish Presidency:
The Presidency wishes to inform delegations of its decision to assign to the Friends of the Presidency Group the task of continuing the work on the following three files:
(a) Proposal for a Regulation of the European Parliament and the Council implementing enhanced cooperation in the area of the creation of unitary patent protection1 based on Article 118(1) TFEU;
(b) Proposal for a Council Regulation implementing enhanced cooperation in the area of the creation of unitary patent protection with regard to the applicable translation arrangements2 based on Article 118(2) TFEU;
(c) Draft agreement on a Unified Patent Court and draft Statute .
The Friends of the Presidency Group is invited to regularly report back to COREPER about the outcome of its discussions.
To ensure political steering of the discussions, the responsibility for negotiations should be put on IPR Attachés, who could be accompanied by experts in relevant fields as necessary, in a 1+1 format. The Friends of Presidency Group will not have interpretation.
The Presidency intends to organise the first meetings of the Friends of the Presidency Group on 11 and 18 July, to which invitations will be forwarded to the IPR Attachés.
Well, what the heck is that “Friends of the Presidency Group”? Although Google surely is your friend, it appears to be a bit difficult to obtain any information on this obscure body. However, the Slovakian EU Presidency of 2008 had published a hint:
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Today, the EU Council has published two important Documents concerning the Anti-Counterfeiting Trade Agreement (ACTA) between the European Union and its Member States, Australia, Canada, Japan, the Republic of Korea, the United Mexican States, the Kingdom of Morocco, New Zealand, the Republic of Singapore, the Swiss Confederation and the United States of America:
- EU Council Document 12190/11 conveying Document COM(2011) 379 final of the EU Commission with a Proposal for a Council Decision on the signing, on behalf of the European Union of the Anti-Counterfeiting Trade Agreement (ACTA); and
- EU Council Document 12193/11 conveying Document COM(2011) 380 final of the EU Commission with a Proposal for a Council Decision on the conclusion, on behalf of the European Union of the Anti-Counterfeiting Trade Agreement (ACTA).
Obviously, a two-step process is anticipated:
- Document COM(2011) 379 final, if adopted, authorises the President of the Council to designate the person(s) empowered to sign the ACTA text.
- Document COM(2011) 380 final, if adopted, approves the Anti-Counterfeiting Trade Agreement (ACTA) on behalf of the European Union.
Consent of the European Parliament is required for approving ACTA. Since ACTA is considered “mixed” agreement, all 27 national Parliaments of the EU Member States also need to formally ratify. Some controversial debate is to be expected because of not all parliamentary groups of the European Parliament might be happy with signing and adoption of ACTA. Although the EU Commission claims that ACTA does not modify the EU acquis because EU law is already considerably more advanced than the current international standards, they want it be Officially approved, arguing that it will introduce a new international standard, building upon the World Trade Organisation’s TRIPS Agreement (adopted in 1994). According to the EU Commission, ACTA will provide benefits for EU exporting rightholders operating in the global market who currently suffer systematic and widespread infringements of their copyrights, trademarks, patents, designs and geographical indications abroad. Furthermore, EU Commission re-iterates that ACTA is a balanced agreement because it fully respects the rights of citizens and the concerns of important stakeholders such as consumers, internet providers and partners in developing countries. However, this assertion is likely to be politically contested in the EU Parliament as well as in various quarters of the public.
The final wording of ACTA is attached to both Documents mentioned above. A brief summary of the ACTA provisions can be taken from FICPI Working Document EXCO/ZA11/CET/1103 (PDF).
Recently the Mexican Senate has voted against ACTA; see here.
MISCELLANEOUS
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