The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Thursday, 21 September 2017

Life as an IP Lawyer: Washington, D.C.

The AmeriKat's professional life, be it on the Kat or sat at her desk litigating her hours away, involves a huge amount of coordination, support and opposition with lawyers from all over the world. One of the IPKat's key objectives is to bring this global IP community closer together by sharing IP decisions, legislation and practice from across the world with our readers, with the aim that by understanding our unique perspectives on the culture of IP practice we can work together to make IP a success story for innovators, creators, users and the public. With those grand aims, the AmeriKat thought it would be worthwhile to ask the next generation of global IP lawyers to illuminate IP practice in their jurisdiction, as well as to give readers some fun reading over their lunch-al-desko

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Rachel Fertig
For the ninth in the series, we travel 3600 miles south west to Washington, D.C., where Rachel Fertig (former Ringer Honors Fellow at the US Copyright Office and soon-to-be associate at Morgan Lewis) is working to break down the silos of IP specialties, dreams of practicing in Milan and lunch with Barbara Ringer.  The AmeriKat randomly met Rachel while waiting for a cab on the streets of DC after last year's ChIPs Next Generation Event, so for those of you attending this year's NextGen and Summit Rachel has some DC tips for you!


**The views expressed in this article are those of the author, Rachel Fertig, and do not represent the official views of the U.S. Copyright Office.

What can you see from your office window right now?

This is actually a long-running joke among Copyright Office staff, but most of us don’t have windows. The Copyright Office is part of the Library of Congress and is located in the Madison Building—originally designed as a storage facility for the Library’s rapidly expanding collection of creative works. The Library’s staffing needs expanded over time as well, so room was also made in the Madison Building for the Copyright Office and other Library staff. That said, when you are lucky enough to get a window, the view is quite stunning because the Office sits at the top of Capitol Hill in Washington, DC and has views of Congress, the Jefferson Building (the main Library building), and the Supreme Court.

When did you know that you wanted to pursue a career in IP?

I was really interested in fashion, economics, and politics growing up, and I distinctly remember telling my classmates in high school that I wanted to pursue a career in international intellectual property law (not that I completely understood what that meant). When I started college, I decided to triple-major in International Political Economy, French, and Asian Studies, and wrote my senior thesis on combating counterfeit pharmaceutical production in China. I continued to study IP and international trade in law school, and was fortunate to turn a summer internship with the Association of American Publishers into a permanent counsel position, where I worked on both international copyright enforcement and domestic copyright law modernization.

Although my practice has focused on copyright, my love of fashion and branding still shows up in my “trademark” style of only wearing Louboutins—which started with the three essential pairs I bought as a law school graduation present.

That building to the north east is the Madison Building
(Photo credit: Carol Highsmith, Library Congress)
Walk us through a typical day...

My typical day starts around 5:00am with a “high-intensity interval training” workout, which helps boost my energy for the day. Then I get ready for work, walk my dog, and listen to my morning news podcasts on my walk to the office. As a Ringer Fellow, my day could focus on domestic and/or international copyright law questions.  The Barbara A. Ringer Copyright Honors Fellowship gives selected young lawyers an 18- to 24-month opportunity to work as an attorney-advisor across all departments within the Copyright Office, including the Office of General Counsel and Office of Policy & International Affairs.

During my time at the Copyright Office I’ve worked on a variety of projects from helping to develop the U.S. Government’s position for the Supreme Court’s review of Star Athletica, L.L.C. v. Varsity Brands, Inc. (addressing the scope of copyright protection for designs incorporated into useful articles, e.g., graphic designs on a cheerleading uniform) to supporting the Office’s public policy study evaluating the effectiveness of ISP safe harbors and online copyright protection (the Section 512 Study) to reviewing and updating the 1,168-page Compendium of U.S. Copyright Office Practices (2017 ed.), which provides public guidance on just about everything related to copyright registration and recordation under U.S. law.

I usually left the office around 7:30pm, took things to finish reading, walked home (in sneakers, not the Louboutins), cooked dinner, and unwound from the day reading with my dog.

(P.S. Applications for the Ringer Fellowship are being accepted from July – September 15 this year.)

What are the key differences in your system that clients/other lawyers from outside the jurisdiction find surprising or strange?

U.S. copyright law is, I think, quite well understood around the world, but our system of music licensing is probably the thing that most lawyers from outside the United States would find “strange.” Whereas many countries have collective rights organizations that can efficiently license all necessary rights for public performance of musical works, the U.S. licensing system involves: (1) multiple collective rights organizations (called performing rights organizations, or “PROs”); (2) oversight from the Department of Justice’s Antitrust Division and rates set by federal district courts for the two largest PROs; and (3) a default rule allowing a single author of a jointly-authored work to license the entire work without the consent of co-authors. Digital-interactive public performance rights for sound recordings are negotiated in the free market (e.g., Spotify), although digital-non-interactive public performance rights for sound recordings are governed by a statutory license with rates determined by an administrative panel of judges (the Copyright Royalty Board). And beyond performance rights, U.S. copyright law involves a mix of other collective rights organizations, free market negotiations, as well as statutory and compulsory licenses. Helpfully, the Copyright Office published an overview and recommendations for simplifying this system in 2015: Copyright and the Music Marketplace.

One other quick issue to note is that the United States is a common-law system with 13 separate “circuits” in which the appellate courts set binding precedent for their geographic area of jurisdiction. This means that the binding interpretation of the Copyright Act may differ between these circuits, which is referred to as a “circuit split.” To resolve such splits, parties often ask the Supreme Court to review a case and provide a unifying interpretation of the law. For example, before the Supreme Court took the Star Athletica case, there were as many as nine separate tests for determining the scope of copyright protection for an artistic feature incorporated into a useful article. These ranged from the Fifth Circuit’s “marketability” test (essentially finding an artistic feature protectable by copyright if it would be marketable as art after being separated from the useful article) to the Second Circuit’s “design-process” test (protecting designs resulting from aesthetic choices instead of functional considerations). The Supreme Court rejected both of these tests and crafted a new unified standard in March 2017.

Rachel and her Louboutins
(Photo credit:  Emma Raviv, co-Ringer Fellow)
What are the key challenges that are facing the next generation of IP lawyers in your jurisdiction? How are those challenges different from the previous generation?

As a millennial, I’m part of the “next generation” of IP lawyers. From discussions with my peers as well my five years of practice in DC, I think the biggest challenge for the next generation of IP lawyers is to work more collaboratively across IP specialties and business sectors to develop policies, businesses, and enforcement strategies that foster a sustainable creative economy. The current generation has identified the stumbling blocks, for instance, the ways copyright and internet laws are not meeting critical needs of the content and tech industries or the public. The next generation, particularly in the copyright sector, needs to attract talented, tech-savvy lawyers who can develop solutions that support long-term creativity and innovation. To do so, these IP lawyers need to actively work to break down the silos between different IP law specialties because everything is intertwined in the digital economy.

For my part, as co-chair of the DC Chapter of the Copyright Society, I’ve worked on reaching out to other IP groups and hope to foster more cross-IP dialogue going forward.

What are the misnomers that people have about IP practice in your jurisdiction?

There are probably more misnomers than one can count. One big one is that people think the U.S. Copyright Office is part of the U.S. Patent and Trademark Office (“PTO”). As noted above, the Copyright Office is actually part of the Library of Congress. Although the PTO does have a great copyright group, section 701 of the Copyright Act directs the Copyright Office to:
(1) administer the Copyright Act (including all registration and recordation of copyrights);
(2) advise Congress on national and international issues relating to copyright;
(3) assist other federal agencies and the courts on copyright matters;
(4) participate in international meetings (like WIPO);
(5) conduct studies on copyright law and administrative policy; and
(6) provide public education about copyright.
I would note, however, that the somewhat anomalous legal structure of the Copyright Office has been the subject of repeated discussion in Congress about whether the Office should be part of a unified IP Office, part of the Patent and Trademark Office, or made into an independent agency. This discussion is part Congress’ ongoing review of the Copyright Act, which has led to legislative proposals such as the CODE Act.

If you could change one thing about IP practice in your jurisdiction, what would it be?

I would love to create more entry-level jobs for young lawyers to work on copyright law and policy. Through the Copyright Society and the internship program at the Copyright Office, I’ve met many students with a passion for music, film, books, photography, technology, and software who want to find a way to work in copyright when they graduate. Jobs right out of law school, however, are hard to find at a law firm or otherwise, but the need for more copyright lawyers seems apparent with creation, sharing, and adaptation of copyrighted works becoming a key part of popular digital culture from internet memes to musical mashups to fanfiction.

What gives you the biggest thrill in your job?

Without a doubt, the biggest thrill for me is meeting creators and learning how and why copyright protection has made it possible for them to write, film, compose, and code some of the most enlightening and entertaining works that help to connect people around the globe.

What are the top trends or cases that we should be looking out for in your jurisdiction?

Trends in fair use analysis are worth watching—and summaries of notable decisions are posted on the Copyright Office’s Fair Use Index.

The cherry blossoms in DC
(Photo credit:  Rachel Fertig)
Specific non-fair use cases to watch include:
United States v. Broadcast Music Inc. This case is currently on appeal in the Second Circuit and is likely to have a significant impact on how the two largest PROs in the United States license performance rights for musical works. (Docket No. 16-cv-03830).

Capitol Records, LLC v. ReDigi Inc. This case is also on appeal in the Second Circuit and will address whether copyright law permits consumers to resell legally-acquired digital content as is permitted under the “first sale” doctrine for physical copies of books, CDs, and other copyrighted works. (Docket No. 16-cv-02321).

Green v. U.S. Department of Justice. This case is in the D.C. district court and challenges the constitutionality of the Copyright Office/Library of Congress rulemaking process that creates 3-year exemptions to statutory prohibitions against circumvention of technological protection measures that control access to copyrighted works. These exemptions provide important flexibility in the law to facilitate free expression, access for the visually impaired, and technology research and innovation. (Docket No. 16-cv-01492)
I think it’s also important to watch Congress to see if they enact any legislation to address issues from the House Judiciary Committee’s first policy proposal, including modernization of music licensing and the creation of an administrative court to adjudicate small copyright claims.

Additionally, I’d monitor announcements from the Copyright Office, which is working on policy reports and recommendations regarding safe harbors and online protection of copyrighted works; moral rights; mass digitization; and exceptions and limitations for cultural institutions (libraries, archives, and museums).

To be successful in your jurisdiction, what are the key skills a young IP lawyer needs?

To be successful, a young lawyer needs passion, excellent research and writing skills, and an open mind.

Many copyright issues involve contrasting judicial and scholarly opinions, evolving technologies, and additional legal considerations from free speech to antitrust to international trade. Although there are few entry-level copyright law jobs, it has certainly been my experience that young lawyers are eagerly included in the field when they can combine genuine interest with excellent research and compelling analysis of the law (as it is or should be).

What are you going to/what did you eat for lunch today?

For lunch today, I’ve made an arugula salad with grilled salmon, herbed quinoa, roasted peppers, red onions, avocado, and pesto vinaigrette.

What other jurisdictions do you work with the most in your practice?

My work focuses on U.S. copyright law, but during my fellowship, I also examined issues in Canada, Mexico, and assisted other attorneys in the office with China, India, and the Middle East. Lawyers in the Office of Policy & International Affairs are assigned various regions and help the Office track copyright developments around globe in order to provide guidance to the U.S. as well as foreign governments.

Looking into your crystal ball, where do you see the profession in 10 years’ time?

Today, the copyright debates in Washington are often described as battles in a copyright v. tech war. In 10 years, however, I think (hope!) there will be a more collaborative legal environment for three main reasons: (1) the content industries will have more efficient and effective strategies for adapting to and embracing new technologies (e.g., blockchain); (2) lawyers will have greater technology literacy, which will improve communication between the tech and copyright lawyers; and (3) Congress will have completed its copyright revisions, which will hopefully give courts greater guidance in balancing the public and private interests presented in modern copyright cases.

If you could practice IP law anywhere else in the world for a year, where would that be and why?

I would love to practice in Paris or Milan to learn about copyright, design, and trademark law in the fashion industry. Working on the Star Athletica case was such a fun way to mix my love of IP law and fashion, and I know that the protection strategies are a bit different in the EU, so I’d love to learn more about how they work.

If you could have lunch with someone famous in the IP world (judge, lawyer, inventor, politician, alive or dead), who would that be and why, and where would you take them?

The Great Hall at the Library of Congress
(Photo credit: Carol Highsmith)
Perhaps it’s because I’m currently serving as a Ringer Fellow, but I would love to have lunch with Barbara Ringer. For a number of projects, I’ve read memos she drafted in the 1950s and have been in awe at the clarity and longevity of her insights. Even more significantly, Barbara Ringer fought against discrimination to become the first female Register of Copyrights, led much of the drafting of the current Copyright Act, and was known for harmonizing divergent points of view on domestic and international copyright issues. She is the epitome of a role model. Given that she spent a good amount of time in Paris, I think it’d be lovely to talk with her about fighting for the rights of creators over brunch at Le Diplomate in DC.

What is the best piece of advice you have ever been given?

Be part of the solution, not part of the problem.

This is my mother’s go-to advice for any issue, and it has served me well professionally and personally. Instead of focusing on flaws, there always seems to be more value in working to create or support a solution that improves upon the status quo.

If our readers were to come to your city, what are the top three things you recommend they see, do and eat (in that order)?

See the Cherry Blossoms in peak bloom around the Jefferson Memorial (typically in late March or early April).

Go on the guided tour of the Library of Congress’ Jefferson Building, which includes explanations of the mosaics, quotes, and sculptures in the Great Hall.

Eat a burger. There’s so much good food to eat, but for the American experience, definitely have a burger. I’d recommend either the Grilled Bacon Smoke Burger at Del Campo (with grilled avocado, onions, smoked tomato, and provolone) or the Proper Burger at Duke’s Grocery (with melted gouda, dill pickles, charred red onions, Thai sweet chili sauce, rocket, garlic aioli, and a runny egg).

Furie-ous creator of Pepe the Frog determined to use copyright to get his green creation back

From Boy's Club
Can the author of a comic character oppose what he believes to be a distortion of the character’s meaning?

Katfriend Nedim Malovic (Sandart & Partners) reports on the heated debate surrounding Matt Furie’s Pepe the Frog.

Here’s what Nedim writes:

“Matt Furie, a children’s artist and the face behind the (now) infamous “Pepe the Frog” character, is fed up. After years of unauthorised exploitation of his cartoon by – amongst others – alt-right activists in various racist contexts, Mr Furie made the decision to use copyright to fight back.

The story initially dates back to 2005, when Furie created comic book Boy's Club. In the comics, Pepe was seen urinating with his pants pulled down to his ankles and the catchphrase "feels good man”.

In 2008 the page containing Pepe and his catchphrase was scanned by an anonymous user and uploaded onto 4chan (an image board website).  

4chan users later adapted Pepe’s face and the catchphrase to fit different scenarios and contexts.

An internet meme and GIF sensation was thus born.

Sad Pepe
However, it was not until the US 2016 presidential election that the meme became associated with white supremacist and alt-right organisations. According to media reports, “turning Pepe into a white nationalist icon" was an explicit goal of some in the alt-right movement.

Mr Furie has now vowed to “aggressively enforce his intellectual property”. His lawyers have, inter alia, sent cease-and-desist requests to several alt-right individuals and websites. Furthermore, the lawyers have also submitted Digital Millennium Copyright Act (DMCA) copyright takedown requests to Amazon, Twitter, YouTube and Reddit.

It will be interesting to see how this dispute evolves. It raises interesting points, including the unauthorised distortion of the meaning of one’s own work and the interplay between different rights and interests.

Feels (im)moral man …

Still in the US one might recall the media storm caused by the angry reaction of the sculptor of Charging Bull in relation to the positioning of Fearless Girl [commented on IPKat here]. Although this Wall Street dispute had different tones than the ones in the Pepe the Frog case, it also raised a debate on moral rights protection under US copyright law. As readers know, moral rights protection in the US is fairly narrow compared to European droit d’auteur jurisdictions.

A Pepe GIF
To the Batmobile!

Unlike in the Charging Bull/Fearless Girl case, the copyright issue at stake here appears to be not really moral rights (as it is unlikely that protection would be available under US law) but rather economic rights. Pepe the Frog in this case has been in fact reproduced without authorisation several times, and this raises issues of copyright protection of characters. 

In its recent decision in DC Comics v Mark Towle 2:11-cv-03934-RSWL-OP [here], the Court of Appeals for the 9th Circuit confirmed that:

·       “copyright protection extends not only to an original work as a whole, but also to “sufficiently distinctive” elements, like comic book characters, contained within the work”; but
·        "Not every comic book, television, or motion picture character is entitled to copyright protection ... [C]opyright protection is available only “for characters that are especially distinctive.” … To meet this standard, a character must be “sufficiently delineated” and display “consistent, widely identifiable traits.” In any case
·       “a character may be protectable if it has distinctive character traits and attributes, even if the character does not maintain the same physical appearance in every context.”

In conclusion

The Pepe the Frog case is one to watch: it raises issues of character protection, but also prompts a discussion around the thin moral rights regime in US copyright law. Finally, it calls for consideration – once again – of the interplay between copyright protection, fair use, and freedom of expression.”

Wednesday, 20 September 2017

Book Review: : Marketing and Advertising Law in a Process of Harmonisation

Readers keen on marketing and advertising law, the harmonisation process and the relationship between advertising and IP law may be interested in the latest edition in the Modern Studies in European Law from Hart Publishing. The book, titled ‘Marketing and Advertising Law in a Process of Harmonisation’ is edited by Ulf Bernitz and Caroline Heide-Jørgensen and transpired following a conference titled: “A Common Law of Unfair Competition – Europeanization and Integration, From Harmonizing Misleading Advertising to Unfair Commercial Practices.” It brings together a number of prolific authors to discuss the various issues within the harmonisation process.

The introductory chapter explains that the EU Directive concerning unfair commercial practices (2005/29/EU) aimed to create uniform rules and develop the fairness of commercial practices for the protection of consumers. Traditionally, there has been minimal harmonisation in this area, however, the Directive changed this and set to implement full harmonisation. This book recognises the impact of the EU Directive on marketing and advertising law, particularly considering the harmonisation process.

The book is presented in four key parts across 12 chapters. The first part provides general perspectives and background on the harmonisation of EU Unfair Competition Law. In particular, the first part considers commercial expression in relation to freedom of speech (chapter 2) and the distinction between the regulation of misleading advertising and the self-regulation of matters involving ethics, taste and decency (chapter 3).

The second part of the book analyses the relevant European legislation; the Unfair Commercial Practices Directive and the Comparative Advertising Directive are discussed across four chapters. The authors consider issues such as interpretation, incorporation and scope of the Directives. Particular attention is paid to how these issues such as the open interpretation and application of the Directives pose a challenge to successful harmonisation. This part of the book also considers the relevant soft law such as the International Chamber of Commerce (ICC) Code for Advertising and Marketing and the UCPD guidance.  

The third part focuses on enforcement issues. For example, chapter 9 considers the Norwegian experience of applying the UCP Directive, and in particular how the cases of children and surreptitious advertising illustrate the challenges of interpreting the Black List clauses.

Readers will likely find chapter 11 particularly interesting. This chapter addresses the question of how unfair competition law can complement intellectual property protection. The author discusses the relationship between unfair competition and intellectual property. For example, the General Provisions on Advertising and Marketing Communication Practice state (at Art 5) that marketing communications should not mislead the consumer. The author argues that this mirrors the Paris Convention (Art 10bis3(i)) which includes all acts that create confusion. The chapter mainly focuses on trade mark law, it discusses the relationship between trade mark law and the Comparative Advertising Directive, particularly through considering the relevant CJEU case law.

The book was published in May 2017 and is available in hardback or on kindle, full details hereISBN: 9781509900671 Imprint:Hart Publishing Series: Modern Studies in European Law Dimensions: 234 x 156 mm RRP: £65.00

Tuesday, 19 September 2017

Never Too Late: If you missed the IPKat Last Week!

Been away and want to catch up with last week's IP news? No problem! As always, the IPKat is here to bring you a quick summary, here’s the 163rd edition of Never Too Late.

Quenching my thirst for the latest IP info!
Neil considers that one way to view the discussion set out by Sanford Grossman and Oliver Hart in their 1986 article, "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration" is to ask: when should one contract with a supplier for a good or service and when should one vertically integrate it by acquisition? He considers how, in addressing this questions, they treat IP matters quite differently. 

It has been confirmed that the complainant who filed the constitutional complaint against the ratification of the UPC Agreement in Germany was the attorney Ingve Stjerna. Stjerna has long been a vocal critic of the Unified Patent Court, and the complaint reflects some of his earlier criticisms.

The European Commission has set out its principles for the political dialogue on intellectual property (and various other issues including the use of data) in the Brexit negotiations.

Katfriend Darren Meale provides an analysis of a recent decision relating to UK unregistered design rights (UKUDR): Neptune v DeVOL Kitchens [2017] EWHC 2172. In particular, he notes that as well as giving a clear illustration of a UKUDR in action, the case also firmly answers an important question about the scope of UKUDR following the amendment of the law in 2014.

Advocate General (AG) Szpunar has provided his Opinion in relation to VCAST Limited v R.T.I. SpA, C-265/16, a the reference for a preliminary ruling to the Court of Justice of the European Union (CJEU) from the Turin Court of First Instance. The AG affirmed that EU law prohibits a commercial undertaking from providing private individuals with cloud computing services for the remote video recording of private copies of works protected by copyright.

Katfriend Darren Meale follows up on Kat Rosie’s announcement that the European Commission had set out its principles for the political dialogue on intellectual property in the Brexit negotiations. He explains the EU Commissions position and how that measures up against the UK’s position.

Neil reports on the 6th Annual Singapore IP Week event organised by the Intellectual Property Office of Singapore, IP Academy, IPOS-International and IP ValueLab. With 3,000 participants taking part in various programs, the highlight event was the two-day Global Forum on Intellectual Property: Ideas to Assets.

On September 19th and 20th, the National University of Singapore will host the Design Law Reform Conference at its Bukit Timah Campus, the conference will discuss the current state of play of design protection at national and international levels.

Plus our weekly round-up posts: Friday Fantasies and Around the IP Blogs.


PREVIOUSLY ON NEVER TOO LATE
Never Too Late 162 [week ending Sunday 27 August] Book Review: Economics of the Internet I France: "Photoshop decree" coming up soon I Is there a role for the tort of unlawful means in patent law? I Around the IP blogs!
Never Too Late 161 [week ending Sunday 20 August]  Italian Supreme Court issues groundbreaking decision on punitive damages, opening the door for IP claims | TILTing Perspectives 2017 | Freedom of panorama in Portugal: content and scope of the exception | When "mayo" is not mayonnaise, yet still is mayonnaise: All a matter of the label? | Friday Fantasies

Never Too Late 160 [week ending Sunday 13 August] Scottish court “vaporized” trade mark invalidity appeal | Battle of the free trade mark databases – Global Brand Database versus TMview | An Improved Improver? - Part 3. | Netflix weather report: sunny today, possibility of rain clouds tomorrow? | Roger in troubled Waters 

Never Too Late 159 [week ending Sunday 6 August] Cross-undertaking in damages - Napp Pharmaceuticals v Sandoz Limited | In memoriam of June Foray: the greatest screen voice whom you probably never heard of, but likely heard | UK Supreme Court holds that grey market sales can be criminal offence | New administrative notice-and-takedown procedure in Greece | Are you XKING kidding me? Making sense of trade mark conflict in the EUTM system | The challenge of protecting a database without a sui generis right, this time from Singapore | France: costs of blocking injunctions to be borne by internet intermediaries | INTA Trademark Administrators and Practitioners Meeting--early bird registration ends August 4th | TILTing Perspectives 2017 (First Part: Online Enforcement and Black Box Tinkering) | France: 13 million in damages awarded for linking to downloadable copyright works | Monday Miscellany, Sunday Surprises


Photo credit: wabisabi2015

Special interview with the Chief Executive of the Intellectual Property Office of Singapore on new one billion dollar innovation fund (and more)


The IPKat recently had the privilege of submitting written questions to Mr. Daren Tang, Chief Executive of the Intellectual Property Office of Singapore (IPOS), in connection with the launch of a one-billion dollar Makara Innovation Fund (MIF), Southeast Asia’s first private equity investment fund that sources IP-driven companies internationally and capitalises on cross-border regional expansion. Set out below is the full text of this interview.

1. Mr. Tang, I have had the pleasure of reading the IPOS media release, "One-Billion Dollar Innovation Fund Launched in Singapore to Drive Enterprise Growth for our Future Economy” How would you summarize the main points of this initiative?

The concept behind the Makara Innovation Fund arose from two challenges that we see at IPOS regarding innovation in Asia. The first is how our economies can support innovative enterprises that are seeking to grow. When start-ups and innovation-driven enterprises are scaling up, they need access to capital and markets. In Asia, there is no lack of growth funds, but they tend to be concentrated in the early and mature stages, leaving a gap in the middle. Moreover, Asian funds still tend to be focused on the more traditional investment themes like infrastructure, resources and property, rather than on innovation.

The second is how to use IP to drive economic growth and prosperity. While there has been a tremendous growth in the number of IP filings in Asia that must translate into actual economic and social impact. IPOS has broadened its focus to include IP commercialisation, and our energies will be on helping our companies to use IP to drive enterprise growth.

With these in mind, we worked with private equity firm Makara Capital to design a fund that was somewhat different. Instead of start-ups, the MIF will target 10 to 15 companies in the $30 - $150 million range. These companies need to have good IP, but equally important is a good business model and ability to execute. The MIF will provide them with smart and patient capital, and connection with the relevant networks and expertise for growth and expansion through IP. Lastly, the MIF’s focus is not just local, but also innovative foreign enterprises that have an interest in using Singapore to access Asian growth markets.

Ultimately, what IPOS hopes to see is the presence of more financing options in Singapore for innovative enterprises, and we would welcome the chance to work with other financiers who share our perspective of IP as a strategy for enterprise growth.

2. Can you specify in further detail what you mean when you speak of "Singapore's innovation system"?

At IPOS, we have a very clear view that innovation is the process of getting ideas to the market because that is where there will be economic and social impact. So when we talk about an innovation ecosystem, we are really talking about how to build the right expertise, structures, processes and stakeholders for this to happen. We have been fortunate that quite a number of these elements are already present in Singapore – a strong R&D sector, a key finance hub, top-class business and regulatory environment, and highly-ranked judicial, legal and IP regimes. Other elements, for example, our desire to double the number of IP experts, or be a design hub by 2025, are in the making. What is likely to be the bigger challenge is to adjust the alignment of these various elements towards enterprise growth through innovation and IP.

3. While Singapore can rightly be said to punch above its weight in commerce and finance, still, it is a small island state. Aren't you concerned that in taking on IP creation, protection and commercialization, you may be overextending what can reasonably be expected from an initiative of this kind?

In a world of intangible assets, small can be beautiful. Singapore is indeed just an island state, but the same factors that have allowed us to prosper by servicing global flows of capital, trade and investment will also serve us well in positioning ourselves as a centre for IP commercialisation. What are some of these? As highlighted earlier, our strong legal and judicial system, status as an R&D and finance hub, top-class IP regime, neutrality and credibility. However, you are right in pointing out that our small market size is a major constraint.

But we have also always been a gateway into South-east Asia and beyond because of our proximity to these markets. And beyond this part of the world, one of the trends we are seeing is that innovation is increasingly becoming open and global. The process of transforming ideas into assets, products and services has become distributed along established and emerging innovation centres in the world. If Singapore can be one of the nodes along a global innovation supply chain, helping ideas access capital and markets in our part of the world, coupled with the ability to quickly adapt and react to changes, then perhaps we can overcome our limitations.

4. There is a recurring debate in talking about innovation: Is the private sector or the government better placed to be the main driver. The initiative emphasizes the role of government; why do you believe that this is the preferred approach?

Actually we see this particular initiative as far more driven by the private sector than in some of the other things that we are doing, for example, in building IP expertise. This is because we believe that private equity, which is much closer to the market than us and has the expertise to grow enterprises, is in a much better place to make the appropriate investment decisions. That said, there is a role for government to play in the innovation space, and that is to introduce the right policies and build the broader ecosystem.

Building an ecosystem may mean that governments sometimes provide funding to get an industry started. A common area not just in Singapore, but around the world, is in R&D. In the case of Singapore, we are investing S$19 billion (or about 1% of our GDP) on R&D over the next five years under the Research, Innovation, and Enterprise (RIE) 2020 plan. As major contributors and recipients of public R&D funds, public agencies should take the lead to develop policies, programmes, and capabilities to boost value capture. Lastly, a lot of work in this area relies on private-public partnerships, because that is how the ideas or IP that is generated from publicly funded R&D can be translated into marketable products and services.

5. The report mentions that one your goals is to strengthen your manpower capabilities to enhance your IP expertise. To what extent do you expect that achieving the goals of the initiative will be accomplished by local skills and talent, and to what extent will you need to rely on contributions from foreigners?

IP skills and expertise is in growing demand in Asia, and requires time and experience to build up. This means that while we want to grow local skills and talent, there will always be space for foreigners to contribute to this highly specialised area. There are a number of areas where we see strong demand over the next few years, but essentially, they tend to revolve around the IP commercialisation space. The challenge here is to take someone who has expertise in a technical area, say law or technology, and help this person develop enough business acumen and sense to understand IP not just from a technical or legal angle, but from a strategic business angle. Good IP managers or consultants who can do this will find themselves with many opportunities to do interesting work in Asia.

Other growth areas will be in the productisation space – people who are expert in translating intangible assets into products. These would be the technology transfer managers and IP brokers. Lastly, we see an opportunity for persons who are experienced in IP financing – whether it is IP valuation, insurance or others who can help monetise IP, and understand how to play around IP as an asset class in itself.

In terms of supporting the development of local expertise, one interesting programme is the one we have launched with the Singapore University of Social Sciences to provide post-graduate training leading up to a Master of IP and Innovation Management. This course, which recently saw its first intake of 24 students, is tailored for working adults who will remain gainfully employed throughout the course, and with a curriculum that focuses on practice and skills through case studies and solving real problems, rather than just knowledge transfer. And of course, it is open to both locals and foreigners. So we do see opportunities for both locals and foreigners to bring their skills and experience into this space, and ultimately support the growing needs of the innovation ecosystem in Singapore.

6. For someone who is not from Singapore, how will he be able to take part in this initiative?

We aim to grow the number of IP professionals to 1,000 by 2020, and most of the work opportunities in this area is not subject to restrictions. That said, in the area of patent prosecutions, foreigners who want to be part of the patent bar will have to sit for and pass the required exams. The same applies for legal advisory work – there are local bar requirements, just like there are in many other countries. For accountants dabbling in IP valuation, there will likewise be the usual requirements of applying to those seeking recognition as local professionals. Beyond these, work in the other areas are not subject to government mandated professional restrictions, and the training courses offered by the local universities offer places to foreign students too.

For those who are involved in IP training in your respective home countries, IPOS is open to engaging overseas partners to co-develop and recognise IP professional certifications and programmes, co-organise Community-of-Practice (COP) sessions to share best practices and case studies, host internships and exchanges for our IP professionals, or even invite guest lecturers to instruct at the graduate programmes. We welcome firms, service providers or financiers to establish themselves here in Singapore and be part of the innovation ecosystem.

7. It so happens that we are both great lovers of tea. What do you recommend to IPKat tea aficionados on their next visit to Singapore?


Tea is so much a part of Asian culture that we sometimes take it for granted, and may not understand the richness of its history and culture. That is why I wrote a book on tea (under a pseudonym), which is unfortunately out of print, but which I am attempting to get a second re-print. Anyway, for first time visitors to Singapore, it may be interesting for a start to try tea as the locals consume it – with sweetened condensed or evaporated milk. It’s quite ubiquitous – you can find it almost everywhere but a decent version to try is the one at Toast Box (there is one at the ground floor food court where IPOS is located). You can try that with kaya toast, a local coconut jam on toasted bread.

There are also tea-shops in Chinatown which serve Chinese tea the traditional way, but you can find these in other parts of Asia as well, so for a more interesting and unique take on tea, I would strongly recommend a trip to Tea Bone Zen Mind. It is housed in a stunningly conserved Peranakan (Straits-born Chinese) shophouse at 98 Emerald Hill and draws on tea traditions from all over the world to present tea with a modern and refreshing twist. I have to say that I’m always partial to the Taiwanese oolongs like the Four Seasons, Lishan, Shan Linxi and Deer Valley, which are all really lovely, as are the oolong and fruit combinations like Apple or Lychee Oolong. If you can afford the time, they also do a 3-course tea tasting, accompanied with tidbits and snacks.

Life is short, so drink good tea.

Photo on lower right by Haneburger, released to the public domain

Monday, 18 September 2017

Conference Report: Zurich IP Retreat 2017 - Patents and Hindsight (Part II)

The second part of this conference report on the 2017 Zurich IP Retreat - Patents and Hindsight summarizes the panels on the closest prior art and the definition of the problem (to be solved). Part I of the conference report is here.

Closest Prior Art

This panel, the third in the conference and the last on Friday, looked at the closest prior art and how hindsight might influence the choice of the starting point for the assessment of inventive step.

Dana Beldimann (Professor, Bucerius Law School, Hamburg, Germany, and UC Hastings College, San Francisco, USA) briefly introduced the framework for obviousness analysis under US law. For an invention to be patentable under 35 USC § 103, it must contribute more than obvious advances to the state of the art. There is no concept of “the” closest prior art in US law. The “analogous prior art” must be considered as a whole. Prior art is analogous if it belongs to the same field of endeavor, or if not, is “reasonably pertinent“ to the particular problem, so that it logically would have commended itself to the inventor's attention (Circuit Check Inc. v. QXQ Inc. (Fed. Cir. 2015)). The analogous prior art can comprise multiple references, except in chemical and pharmaceutical fields, where there must be a lead-compound.

Beldimann, Brändle, Wilming, Hoyng, Bausch, Blumer (3rd panel)
References may only be combined when there is a justification to do so. The justification lies in teaching, suggestion or motivation (TSM) to combine or modify references and must be found in the prior art. The TSM standard is the main safeguard against hindsight bias. KSR International Co. v. Teleflex (US Sup. Ct. 2007) held that the TSM test is a helpful insight into reasons to combine, but should not be treated as a “rigid mandatory formula”. In addition to TSM, common sense can also constitute a path to proving obviousness, since a skilled person may “be able to fit the teachings of multiple patents together like pieces of a puzzle”. KSR v. Teflex may lead to a larger influence of hindsight than the traditional TSM test. There is some pushback from the CAFC. In Circuit Check v. QXQ, the CAFC held: “An alleged infringer should not be able to transform all systems and methods within the common knowledge into analogous prior art simply by stating that anyone would have known of such a system or method. The question is not whether simple concepts such as rock carvings, engraved signage, or Prussian Blue dye are within the knowledge of lay people or even within the knowledge of a person of ordinary skill in the art. Rather, the question is whether an inventor would look to this particular art to solve the particular problem at hand.”


Dieter Brändle (President, Federal Patent Court, Switzerland) noted that patentees always complain about hindsight when the patent is found lacking inventive step. Since the court must rely on references introduced by the parties, the choice of prior art is not determined by the court. Only what the parties present to the court can be considered.

A patent must have inventive step irrespective of the starting point of the analysis. The law requires that the invention is inventive over the entire prior art. If a patent is found inventive starting from one prior art reference, it must be assessed whether it is also inventive starting from another starting point, if such starting point is alleged. Unless a reference can be excluded “right away” as a valid starting point, it must be accepted as starting point. The selection of the starting point is not subject to hindsight bias; the hindsight bias only comes into play in the third step of the PSA, when it is assessed whether the skilled person would have modified the starting point such as to arrive at the claimed invention.

Willem A. Hoyng (Attorney, Hoyng, Rokh, Monegier, Amsterdam, the Netherlands) reminded everybody that the PSA is not found in the European Patent Convention. It is a tool developed by the European Patent Office to deal with its massive case load. It may be useful, but it is artificial and may also lead to wrong results. The choice of “the” closest prior art is often arbitrary. Courts should not be obliged to follow the PSA, which in fact there are not according to UK, German and Dutch case law.
Art. 56 EPC requires consideration of the whole prior art. That whole prior art may give indications (pointers) towards the invention or away from the invention. Closest Prior Art and PSA may have a tendency towards obviousness if not applied correctly. So one should consider the art as a whole and how much incentive gives the art as a whole the skilled person to come to the invention and what is his/her expectation of success. Incentive and expectation of success should be communicative vessels when deciding the obviousness question.

Willem ended his presentation with the statement that he considered the way the EPO deals with Art. 54(3) EPC a big problem which leads to multiple patents for the same invention (and – via divisionals – unacceptable uncertainty of third parties). Why can EPO and Dutch courts not read “the content of European patent application” broader? The skilled person should always read (when reading for Art. 54(3) EPC purposes) with the common general knowledge and consider each combination with the common general knowledge as disclosed. This would avoid the grant of multiple divisionals for essentially the same invention.

What you get for writing the conference report - an elephant
Thorsten Bausch (Patent Attorney, Hoffman Eitle, Munich, Germany) reiterated that Germany does not have a concept of closest prior art, but the Bundesgerichtshof demands that the starting point for inventive step analysis must be justified (BGH, 16 December 2008 - X ZR 89/07 – “Olanzapine”). If, for example, a document discloses 200 compounds, it is impermissible to take one of the compounds and argue that its formulation as a sustained release formulation was obvious when there were no specific reasons ex ante for the skilled person to choose this compound among the many disclosed.
Torsten’s conclusion from the unavoidability of a certain hindsight bias is that judges should be twice as careful and cautious before revoking a patent for lack of inventive step. On the other hand hindsight bias may favour the patentee when it comes to questions of claim construction and the doctrine of equivalents, as the interpretation of the claim with knowledge of the infringing embodiment may lead to a broader interpretation, and equivalents may be found obvious once they were employed.

Fritz Blumer (Member of the Legal Board of Appeal, EPO) stated that the case law of the Board of Appeals of the EPO emphasized continuously that hindsight should be avoided in the choice of the closest prior art. “[…] in order to avoid ex-post facto considerations, the closest state of the art is not generally that merely showing superficially the most similarities, but rather that conceived for solving the same primary problem or aiming at the same objective as the claimed invention and which requires the minimum of structural and functional modifications.” (T 026/04). Fritz gave an example of an invention of a multilayer panel for aircraft interiors. D1 discloses a panel for aircraft interiors, but with a different layer sequence. D2 discloses a panel for furniture with a layer sequence like the claimed one. The “same purpose” criteria should lead to the choice of D1 as closest prior art. Choosing D2 is likely based on hindsight and may lead to difficulties in formulating the objective problem (“alternative use for furniture panels” is hardly satisfactory).

The prior art should not be read with the invention in mind (T 970/004, cons. 4.1.2). Similar to the point made by Peter Meier-Beck and Thorsten Bausch, Fritz cautioned that one should not “pick and choose” from a prior art reference unless there were good reasons why the skilled person would choose the specific disclosure over another.

During the ensuing discussion, Robin Jacob interjected that it should be up to the attacker of the validity of a patent to choose the starting point from which he or she wants to attack the patent. Graham Ashley prefers using the term “relevant starting point” rather than “closest prior art”. One can start from several references, but the attacker needs to justify why he wants to start from each one of them. Similarly, Rian Kalden added that there could be several starting points, but not 30. There must be a justification for a specific starting point. Katherine J. Strandburg pointed out that the PSA starting from a single closest prior art reference assumed a cumulative view of innovation, which was not necessarily correct. Innovation may also consist of thinking about a problem. Dieter Stauder made the sensible point that many granted patents were never practiced and only a small fraction ever litigated. The case load at the EPO required a standardized approach for examination that was simple and predictable. Courts, on the other hand, are not and should not be bound by it.


Objective Technical Problem

Fritz Blumer reminded everybody that the PSA was not cast in stone, although in practice it was ruling. Rule 42(1)(c) EPC also requires a description of “the advantageous effect of the invention with reference to the prior art” in the patent application. The PSA goes back to the very beginning of the operations of the EPO (see T 1/80 of 1981). The definition of the objective problem to be solved is a moving target. When the closest prior art changes – for example after the introduction of claim limitations – the problem to be solved also changes.

Dirk Szynka explains the prior art
Dirk Szynka (Patent Attorney, König, Szynka, Tilmann, von Renesse, Munich, Germany) opined that the problem the problem to be solved is particularly prone to hindsight bias because it does exist only with knowledge of the claimed invention, as it is derived from the effects of the differences between the subject matter of the claim and the closest prior art. The choice of the spring board document (on which the problem is based) is very important. The more sophisticated approaches (e.g., BGH, 5 October 2016, X ZR 78/14 – “Opto-Bauelement”) require looking at the technical effect of the springboard reference. However, everyday practice of the first instance and the examination proceedings tend to identify a spring board document based on a more arithmetical maximum structural identity which can lead to an objective patent problem quite independent from the patent description and the original technical approach therein and may often lead to hindsight.


If one starts from a document that is not related to the problem or effect of the invention but the argument clearly leads to obviousness, it’s hard to justify disregarding it. After all, the law requires consideration of all prior art.


From Dirk’s point of view, the main practical hindsight problem is, however, the tendency to be observed in the EPO but also in German proceedings, to formulate a “concrete” technical problem by comparing a spring board document and a claim. Such argumentations explicitly seek to avoid a too “abstract”, “artificial” or “empty” problem. In his opinion the recognition of disadvantages of the prior art is a first step of the invention (if not clearly induced by the prior art or the technical knowledge of the skilled person). This approach is also supported by the Board of Appeal case law, e.g. T 835/00, and, more recently, BGH,  13 January 2015, X ZR 41/13 – “Quetiapin” and BGH, 11. November 2014, X ZR 128/09 – “Repaglinid”. Accordingly, a “general and neutral” technical problem must be chosen which must not contain elements of the solution and, further, no elements found in the elaboration thereof.

Katherine Strandburg (Professor, NYU Law, New York, USA) added that US law knows no requirement to identify a problem to be solved. Identifying or framing a problem can itself be inventive. The problem solved by the invention may play a role in the definition of the analogous prior art, because it must be reasonably pertinent to the problem. KSR v. Teleflex repudiates a narrow approach to problem definition. The problem is not limited to the problem this particular patentee tried to solve. The problem can motivate the skilled person to look at other prior art that was not designed to solve that problem.

Whether hindsight leads to “wrong” decisions is ultimately not clear. Policy should decide which inventions deserve protection, and this should be informed by the outcomes – does the protection of these inventions lead to welfare gains?

Katherine wondered whether the “fundamental attribution error”[1], i.e., our tendency to explain someone's behaviour based on internal factors, such as personality or disposition, and to underestimate the influence that situational factors have, might help the patentee. In the case of obviousness assessments, the fundamental attribution error may lead to an attribution of the invention to the effort and creativity of the inventor, rather than situational factors (state of the field). It may therefore lead to a finding of non-obviousness and counteract hindsight bias.

During the discussion, Christoph Ann (Professor, Technical University of Munich, Germany) said we should hear more about biases other than hindsight if we want to reach unbiased judgments. Stefan Bechtold (Professor, ETH Zurich, Switzerland) pointed out that if hindsight bias had the same magnitude across the board, it was not a huge issue from a policy perspective. If, however, it had different effects in different cases, it was problematic. We simply do not know which one it is.

There was much more at this conference, but the format of a blog post prohibit an exhaustive summary. I therefore will not report the findings of the panels on expert testimony and technically qualified judges, claim construction and the broader perspective (yes, hindsight plays a role in copyright, too!). All in all a very enjoyable conference with contributions from a broad range of highly qualified speakers. And the dinner was excellent, too.



[1] Ross, The intuitive psychologist and his shortcomings: Distortions in the attribution process, in: Berkowitz (ed.), Advances in experimental social psychology (Vol. 10), New York 1977, 173-220.

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