Tag Archives: Intellectual Property

The Need of IP Audit In Successful Management Of IPR

IP_audit

image from : http://www.ip-pragmatics.com/intellectual-property-audit

“If you don’t measure it, you can’t manage it”

An organization needs to substantially maintain its Intellectual Properties such as maintaining a record of IP filings, prosecution, and maintenance and protection of such IP by taking affirmative action against infringement of an IP in multiple jurisdictions which requires dedicated time, money and manpower. This kind of well-maintained and well updated inventory of all IP assets helps the organization in making an informed decision for its future planning. Thus, once IP assets are inventoried and all existing IP procedures are documented, the future plans for growth and gains can be aligned in accordance of the business policies and help them to plan a long term goal oriented business strategy. Identification of all the IP assets is also a pre-requisite to get finance and a good IP audit works towards preparing a proposal for obtaining finances, improving loan rates and increasing share prices.[1]

One may be inquisitive to understand the meaning of IP Asset since in today’s world IP Assets are the biggest value drivers in an organization. Hence, IP asset management can be defined as “Things of value that are not tangible but can be measured and managed and to which a value may be attached”.[2] On the other hand, IP audit can be defined as a systematic review of all IP assets owned, used or required by a business in order to uncover under-utilized IP assets, to identify any threats to an organization and to enable business planners to devise informed strategies that will maintain and improve the organizations’ market position.

To be precise, IP audit helps the organization to do a SWOT analysis – a study that determines the

  • Strengths;
  • Weaknesses of the organization;
  • Opportunities in the marketplace, and using the opportunities through research and development and vice versa and the last aspect of the study deals with and;
  • Threats that are perceived from the market, from competition and from within the organization. However, in order to get this information regarding the organization, IP audit must be conducted regularly. IP audit helps to make and update the inventory of the IP assets, and to analyze:
    • How the IP assets are used or unused?
    • If the IP assets are owned by the company or by others?
    • If the IP assets infringe the rights of others or are rather infringed by others?
    • What actions are required to be taken with respect to each IP asset, or a portfolio of such assets, to serve the relevant business goals of the company?

Types of IP Audit

1. General Purpose IP Audit

General IP audit is done in order to maintain and control the IP assets. It, thus, ensures the health and well being of IP assets. This type of IP audit also helps in reviewing the statutory requirements for maintaining patent and trademark applications.

A general or broad IP audit is done in the following contexts:

  • Before establishing a new company it is always important for a start ‐up Company to be aware of intangible assets it owns or needs to protect.
  • When a business is considering implementations of new policies, standards, or procedures relating to IP.
  • When a business is considering implementing a new marketing approach or direction, or is planning a major reorganization of the company.
  • When a new person becomes responsible for IP management.

Once a comprehensive IP audit has been undertaken, a smaller effort and expense is needed at regular intervals, such as on an annual basis, so that IP assets are reviewed and appropriate decisions taken, depending on the current and emerging needs of a company.

2. Event Driven IP Audit

Event driven IP Audit is generally much narrower in scope than a broad or general purpose IP audit. Further, the nature and scope of such an audit is determined by the event in question, and the time and resources available for the same. It is also called IP Due Diligence, when it is done to assess the value and risk of all or a part of a target company’s IP assets. It is conducted by a third party before an IP portfolio is bought or invested in. and provides information that may affect key elements of a proposed transaction. Few events which require the preparation of IP due diligence:

  • Merger & Acquisition or Joint Venture:
  • Financial transactions:
  • IP licensing:
  • Launching a new product or service:
  • Buying or selling a business division or IP transfer:

3. Limited Purpose Focused Audit

A limited purpose audit is typically much narrower in scope than the other two types and is performed under much constrained time schedules. These audits tend to be situational in nature. They are typically used to justify a certain legal position or the valuation of a particular IP. It is majorly done in the following cases:

  • Foreign IP Filings: Before a company takes up an aggressive program of filing IP applications in other countries, that is, before entering a new market abroad (by way of, say, exporting, or expanding overseas through off‐shoring/outsourcing some of its activities, or by licensing, franchising or merchandising) an IP audit helps to sensitize the company to market‐specific IP laws, rules, customs and practices affecting IP rights.
  • Significant changes in IP law and practice: Where there is a significant change or development in IP case law or statutory law in a relevant market it may necessitate review of existing products for possible infringement of the IP rights of others.
  • Personnel turnover:Before a major personnel turnover of in‐house research and development or marketing, especially if it involves disgruntled employees, an IP audit should be done to secure the status of a company’s IP assets.
  • Clean room procedures:The clean room procedure seeks to avoid infringement by ensuring that there is no “access” to copyrighted material of unrelated parties during software development project. Thus, an audit might be necessary to institute, or to review the adequacy of, clean room procedures used in the development of software products so as to reduce the risk of infringing third party copyright.
  • Preparing for litigation: When considering or facing litigation, a company is required to show non‐infringement and no access to the work, complete or confirm the chain of title of the underlying IP rights or otherwise complete the documentation of the relevant IP rights.

Conclusion

An IP audit provides information on the nature and strength of the intangible assets by studying the IPR associated with those assets. An IP audit can be a relatively simple exercise that can have a meaningful role in avoiding various circumstances – violation of others’ rights, protecting one’s IP/IPR, minimizing the risk of thirty party IP violation, clarifying IP ownership issues, etc. It also serves as a guiding tool for maintenance, management and safeguarding of IP rights. As companies understand the value of their intangible assets and rights associated thereto, the importance of IP is bound to grow. As a result the role of IP audit and valuation has a long way to go. Professionals will surely hone their skills in order to conduct meaningful and an effective audit and valuation which will further help companies in safeguarding against appalling future surprises.

Author: Pratistha Sinha, Associate at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at pratistha@iiprd.com

References:

[1] Ahuja V. K, Law relating to Intellectual Property Rights, 2nd Edition, Lexis Nexis, (2013).

[2] Pierre El Khoury; Implementation of the National Intellectual Property Strategy and Intellectual Property Rights Protection for Small and Medium-Sized Enterprises (SMEs) : conducting an IP Audit and Managing IP Assets; nov’2013: http://www.wipo.int/edocs/mdocs/sme/en/wipo_smes_bik_ 13/wipo_smes_bik_13_m_pierre_el_khoury.pdf/

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Patent Commercialisation Via Licensing

Intellectual Property refers to creations of the mind such as inventions, expressions in the form of literary and artistic works, symbols, names and images, etc used in commerce. It can further be divided into Industrial Property or Copyright[1]. Patent as a part of Industrial Property is an exclusive right granted for an invention – a product or process that provides a new way of doing something, or that offers a new technical solution to a problem[2].

According to 7 USCS § 178a, the term “commercialization” means “the stage in the development or advancement of a technology at which point private enterprise is willing to invest in a full-scale production facility[3]. Even though the definition does not emerge from core intellectual property laws, it still sustains the bare minimum standards of the term.

An inventor places his invention[4], his creation in the highest of regards. The process of creation is highly intensive, both in terms of mental input along with investment of time and capital. As every investment, possession and every “real property” needs to be protected, the same concept goes with Patents as they are valuable to the inventor. After it is secured, the next stage of generation of returns can be considered. As every investment is made with a clear pre–intention for recovery of capital invested or profits, it is reasonable to find measures for optimum exploitation of Intellectual Property or in particular, Patents. The Indian Bayh – Doyle Act: Protection and Utilization of Public Funded Intellectual Property Bill, 2008[5] stands as an example of commitment by the country to provide protection and utilisation of Intellectual Property originating from public funded research[6].

Hence, commercialisation is important as it enables the inventor to seek its fair share from the society in exchange for disclosing his creation to the public at large. Commercialisation of a Patent that has been granted can be achieved in two major ways. It can either be assigned or licensed. Assignment of a Patent involves a complete transfer of ownership of Patent by virtue of a contract which is similar to sale of a “real property”. Analogy with lease of a real property can be drawn with licensing of Intellectual Property. By means of a license, ownership rights can be withheld while transfer of other rights can be precisely controlled. A greater degree of control that is conferred upon the licensor of the inventor by virtue of a licensing agreement, and hence it makes more sense as to why a licensor or an inventor must go for it in order to commercialise the patent.

In order to develop a license, it is necessary to determine the strategy followed. Patent licensing constituted following four major strategies:

  1. Carrot Licensing: When a patentee or the current holder(s) of Patent, proactively promotes and voluntarily makes an effort to license the Patent to potential parties who are under no compulsion to do so, such license is known as a carrot license[7].
  2. Stick Licensing: On the other hand, when a license is taken involuntarily, under a threat of suit for Patent infringement, by the infringer from the offended property owner, such license is classified as a stick license[8].
  3. Iron Fist in a Velvet Glove: Whereas, when a potential licensee undertakes a license under an impression that the owner might take a legal action, and such lawsuit will prove to be more expensive than taking out license, such licensing process is like “Iron fist in a Velvet Glove[9].
  4. Joint Venture: When two or more parties enter into an agreement by means of which each party would be entitled to its own rights and obligations towards the venture agreed upon, this is termed as a joint – venture strategy.

For instance, if A, the inventor enters into a joint venture with B, a business that has potential to exploit the patent, it is evident that A will contribute by means of license to exploit the patent[10] whereas B will contribute by generating revenue from the patent and sharing a part of it with A. Hence, both the parties will be better–off if such joint venture takes place.

Licenses can also be classified to be as exclusive or non–exclusive depending upon the nature of the agreement between the parties:

  1. Exclusive license: An exclusive license is the one in which a licensee prohibits the licensor from licensing the patent to any other party.
  2. Non – exclusive license: In such cases, the licensor undertakes a lot of risk by limiting its income – source from a sole licensee and hence prefers to enter into non – exclusive licenses, where there can be multiple licensees. A non – exclusive license can further be sub – licensed[11] by the licensee, thereby making the offer more lucrative.

A license agreement basically undergoes two major steps for its completion:

  1. Documentation: Under Section 68 of The Patents Act, 1970, a license in a patent shall be valid when it is in writing and the agreement between the parties concerned is reduced to the form of a document embodying all the terms and conditions governing their rights and obligations and such agreement is duly executed[12].
  2. Registration: After the agreement takes place, the party that had acquired the license has to register the title or interest in the concerned patent within six months from the date of agreement. This registration process has to take place by the licensee by submitting application Form – 16[13], under section 69(1), 69(2)[14] read with rule 90(1) and 90(2)[15] in writing and has to be signed by both the parties[16].

There are, however, some restrictions that cannot be imposed upon the licensee by means of a license agreement or contract under section 140[17].

After various aspects of intellectual property, including patents, have been understood, the next stage is that of negotiation. The art of negotiation involves three major phases:

  1. Preparation phase: The first and the most important phase of license negotiation is the preparation phase. A lot of questions are required to be answered during this phase, such as: business aspect of license, best outcome for all parties, corresponding leverage for each party, stand on key issues, range and intention of compromise[18].
  2. Discussion phase: All the questions are then framed into issues the endures multiple rounds of discussion, until the parties are on the same page and begin to understand the contract in the same sense.
  3. Proposing and bargaining phase: Following the discussion phase, in the proposing phase, a final agreement is proposed by the licensor to the licensee, who in the bargaining phase puts forward a counter – offer.

Licensing is one of the most lucrative options for commercialisation of Intellectual Property, particularly with regard to patents. However, the art of licensing is tricky and consideration must be given to develop various aspects of license along with licensing strategies to be followed before drafting a final agreement.

Author: Madhur Tulsiani , Intern at  Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at swapnils@khuranaandkhurana.com.

References:

[1] http://www.wipo.int/edocs/pubdocs/en/intproperty/450/wipo_pub_450.pdf

[2] (ibid).

[3]https://www.gpo.gov/fdsys/pkg/USCODE-2011-title7/pdf/USCODE-2011-title7-chap8A-subchapII-sec178a.pdf

[4] “Invention” under Section 2(j), The Patents Act, 1970, is stated as “a new product or process involving an inventive step and capable of industrial application”.

[5]http://www.prsindia.org/uploads/media/1229425658/LB_Protection%20and%20

Utilisation%20of%20Public%20Funded%20Intellectual%20Property%20Bill.pdf

[6] http://iica.in/images/Technology%20Transfer%20and%20IP%20

Commercialization.pdf

[7] http://s1.downloadmienphi.net/file/downloadfile4/206/1391165.pdf

[8](ibid)

[9](ibid)

[10] (ibid)

[11] The right to sub – license is a privilege accorded upon the licensee. The licensee acts as a sub – licensor. As a result, the licensee becomes responsible for effective and full compliance of the license by the sub – licensee and in case of default on the part of sub – licensee, the licensee shall stand responsible. Also, all sub – licenses granted stand terminated if the main license is brought to an end unless other conditions exist.

[12]http://www.ipindia.gov.in/writereaddata/Portal/IPOAct/1_113_1_The_Patents_

Act_1970_-_Updated_till_23_June_2017.pdf

[13] http://www.ipindia.gov.in/writereaddata/Portal/IPOFormUpload/1_28_1/form-16.pdf

[14] (ibid)

[15]http://www.ipindia.gov.in/writereaddata/Portal/IPORule/1_70_1_The-Patents-Rules-2003-Updated-till-23-June-2017.pdf

[16] http://www.invntree.com/blogs/indian-perspective-licensing-or-sale-patents

[17] (ibid)

[18] http://www.wipo.int/edocs/mdocs/aspac/en/wipo_ip_han_11/wipo_ip_han_11_

ref_t7b.pdf

Referential Names & Intellectual Property Infringement

With progression of time we are witnessing the rise of Intellectual Property (IP) issues in India across industries. Every new case raises a few new questions and simultaneously rests some old ones. While traditionally IP disputes arose mainly in the pharma  and software industries, recent trends have shown a noticeable surge in other industries including the Appliances and Consumer Electronics (ACE). One such case in the Bombay High Court, belonging to a particular segment of the ACE industry, highlights relevant issues for the entire industry.

This suit for IP infringement was instituted by the multinational electronics company Seiko Epson, against Jet Cartridge (India) Pvt. Ltd. Epson, a company whose very name stands for “Son of Electronic Printer” quite imaginably has a strong IP portfolio around its printers, basis which it alleged that Jet Cartridge, was infringing on their IP rights on two counts- one, that of the registered designs of the nozzles that are used in cartridges, and the other of using their trademark ‘EPSON’ without authorization when they label their products as “Compatible with EPSON”.

Assessing the first aspect involves a simple test of comparing the registered designs with that used by the defendants.   The Indian Industrial Design registrations with numbers 235236 & 235237, titled “Packaging Container ” along with 235238 & 235239, titled “Container Cap with Stopper”, entitles EPSON under the Design Act,  2000, to exclusive use of the designs covered. The order by the court dated 23 November 2016 reflects that the counsel appearing for Jet Cartridge, Dr. Saraf, made a statement- as regards the design infringement, the defendants will change the nozzle of the cartridge from the plaintiffs’ proprietary design and they will do so with immediate effect. The nozzles of all existing products and inventories which have not yet gone into market will also be changed.

Coming to the more interesting part of the case, the argument that the trademark law allows EPSON to an outright exclusive use of its name, even if it were used merely as a reference, was a contentious one. Ordinarily,  in a trademark infringement matter, the court sees whether the defendant used a mark identical or similar to the plaintiff’s mark in a manner that may confuse/ deceive a consumer into believing that the defendant’s goods/ services are actually that of the plaintiff’s. Typical examples include using minor spelling or visual variations, strikingly similar packaging or direct  counterfeiting. In this case, however, the question really was whether the inscription “Compatible with EPSON” on a cartridge packaging would qualify as infringement . If so why, and if otherwise why not?

On one side, the argument stands that a clear indication is provided that the cartridge does not belong to EPSON but is merely compatible for use with EPSON printers and hence not misleading. While on the other hand, would it be unrealistic to assume that a casual customer might be led to believe that the company selling the products are authorized by EPSON to do so, and is indirectly buying it from EPSON. Honorable Justice Gautam Patel, had the following to say on this aspect:

Ms. Oberoi for  the plaintiffs  would have it that the defendants are prohibited  from  using the name EPSON  at all, even in a purely  descriptive sense to demonstrate  compatibility, because this is the plaintiffs’ trademark , even if the defendants do not use that word  as a trade mark  but only as a descriptor  to identify compatibility. Prima facia, this does not seem to be a supportable or tenable proposition  in law. A laptop repair service may, for instance, say that it can repair  laptops of  various  makes and brands and names these, but not use these as trademarks. Persons make various kinds of accessories (screen  protectors, peripherals,  etc.)  and  these  are  often  denominated  as  being compatible  with  a certain name  product:  mobile  phones, for instance, of specified makes and brands. This use is not illicit. The plaintiffs  enjoy  a  monopoly  in the  mark  and  are  entitled  to prevent unauthorized  use of  the mark. The defendants are clear that they do not use the name as a mark but only to identify that their cartridges are compatible with printers manufactured by the plaintiffs. There cannot be the kind of monopoly that Ms. Oberoi suggests. At her instance, I  will leave contentions open in  this regard till the replies and rejoinders are filed.

While the court was open to further deliberation and debates over its initial view on the subject matter, as the trend goes, the dispute was settled between the parties. The consent terms dated 20 December 2016 that were tendered to the court had Jet Cartridge reaffirming its undertaking to change the nozzle designs altogether, whereas EPSON agreed to their use of “Compatible with EPSON” on their packaging. Thus, an important perspective regarding the legal principles and consequences on the use of referential naming was set.

Author: Abhishek Pandurangi, Partner, Attorney of Law at Khurana & Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at abhishekp@khuranaandkhurana.com.

Cyber Theft of Intellectual Property

With the growth in the use of internet these days the cyber crimes are also growing. Cyber theft of Intellectual Property(IP) is one of them. Cyber theft of IP means stealing of copyrights, trade secrets, patents etc., using internet and computers.

Copyrights and trade secrets are the two forms of IP that is frequently stolen. For example, stealing of software, a unique recipe of a well-known dish, business strategies etc. Generally, the stolen material is sold to the rivals or others for further sale of the product. This may result in the huge loss to the company who originally created it.

Earlier, a lot of physical labour, time and money was spent to steal a trade secret or make a pirated version of anything. The original copies had to be physically stolen which used to take lot of time and money. But in the present scenario these works can be done easily sitting at one place without shedding too much time and money on it without leaving any proof of it.

One of the major cyber theft of IP faced by India is piracy. These days one can get pirated version of movies, software etc. The piracy results in a huge loss of revenue to the copyright holder. It is difficult to find the cyber thieves and punish them because everything they do is over internet, so they erase the data immediately and disappear within fraction of a second. The country has started taking strict measures to curb this offence. Telangana Intellectual Property Crime Unit (TIPCU) is one of the first unit that has been launched to deal with the IP crime.

Some of the ways through which one can protect IP from cyber theft are:

  • Frequently updating the list of IPs’ that need to be secured.
  • The company can increase the security to access its trade secrets.
  • It can reduce the number of people who can access their trade secrets.
  • Company needs to be up to date with software systems.
  • Constantly checking for some unusual cyber activities.
  • Constantly educate their employees about cyber security.
  • Constructing some threat mitigating programmes.
  • Installing up-to date anti-virus software.
  • Allowing employees to reach only some classified data.

Even after taking all these steps to protect IP’s there is no guarantee that they cannot be stolen because human dependence on the internet is growing constantly and people come up with new ways to do even a small thing so even in this case these cyber thieves may come up with new ways to crack all these security systems.

Author: M.Sai Krupa, Intern at Khurana & Khurana, Advocates and IP Attorneys. Can be reached at anirudh@khuranaandkhurana.com.

References:

[1] http://law.jrank.org/pages/11992/Cyber-Crime-Intellectual-property-theft.html

[2]http://stlouis.cbslocal.com/2017/05/12/trending-topics-intellectual-property-at-risk-from-cyberthreats/

[3] http://www.iiprd.com/indias-first-ip-crime-unit-launched-telangana-state/

Amendments in Patent Application Process in Singapore

The process of applying for patents in Singapore will become much easier and more efficient after Intellectual Property Office of Singapore (IPOS), in its continued efforts to ease patent application process, has introduced few changes in Patent forms 1 and 12B. According to a circular released on November 21, 2017 on IPOS website [1], these changes will be effective from 10 December 2017 [1] and will be available to Patent Applicants from that date. IPOS claims that after these changes the patent application process will be enhanced for general Applicants.

Amendments to ‘Patents form 1’ [2]

a. Patents forms 1 & 8 will be merged

This change will allow Applicants to enter details of inventors for which the patent has been applied in part 7 of the newly merged form i.e. merged ‘form 1’ & 8. There will be no need to file a separate form 8. It is a welcome move for the Applicants as they will not have to fill multiple forms. In addition to this, the Applicants will now be able to derive rights from the Inventor. Applicants can do this by filling in part 8 of the newly merged form. However, these amendments will not change the process of correcting the details of the inventors i.e. Patents Form 13 will not be applicable for such amendment or correction. Applicants will also be able to submit the details of the inventor separately by filling Patent Form 8 which will still be available for submissions.

b. A separate attachment for sequence listing

A new document will also be available for “sequence listing” for attachment at the time of filing of patent applications. A “sequence listing” is a list of biological sequences in the format prescribed by WIPO Standard ST.25 (Presentation of nucleotide and amino acid sequence listings) using controlled vocabulary (i.e. defined terms for certain features). This document will be available to patent applicants in case they do not want to include sequence listing as a part of description or claims. Also, the applicants will be able to paginate this document and will be able to indicate the page count of sequence listing document in a separate field.

In addition to this, if Applicants want to submit sequence listing as a separate reference document, not forming part of the description or claims, such document can be submitted using the mentioned “sequence listing” document type with a cover letter attached to indicate that it will serve as a reference document only.

c. A new feature of auto-population during divisional filings

Yet another efficient and productive move by the IPOS is the introduction of auto-population feature when a divisional application is being filed. This means that when an Applicant files a divisional application, relevant information from the parent application will be auto-populated for the convenience of the Applicants. Having said that, the Applicants will still be able to amend the auto-populated fields if they choose to do the same.

 Amendments to Patents ‘Form 12B’ [3]

Similar to the changes in Patents form 1, for the ease of Applicants, Patents Form 13 will also be merged with Patents Form 12B. Applicants don’t need to fill Form 13 in case they wish to make amendments to the specification when requesting for an examination review report using Patents Form 12B, and can do so by selecting the option “Written submissions and proposed amendments are filed” in Patents form B. With this selection, the Applicant will be required to submit both a clean and a marked up copy of the amendment of the specification.

Conclusion

Such amendments in the Patent Application process as mentioned above will be available from December 10, 2017. Further, these changes will ease the application process and will allow Applicants some flexibility in sequence listing, and amending details of inventors as well as amending the specification.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 References:

[1] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/circulars/(2017)-circular-no-8—enhancements-to-patent-application-process.pdf

[2] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/patent-forms-and-fees/form-pf1—otc.pdf

[3] https://www.ipos.gov.sg/docs/default-source/resources-library/patents/patent-forms-and-fees/form-pf12b—otc477c1877c2d0635fa1cdff0000abd271.pdf

IP Rights Encompassing Comic Books

Comic book characters like Superman, Batman, Spiderman, Iron Man, Harry Potter etc. have become part of our daily lives ever since they were created via comic books and later incorporated through television shows, merchandise and more recently movies. From soft toys, video games to movies all such methods provide various avenues to the owners and creators of such characters to earn money and goodwill in this fiercely competitive market.

The artists behind such characters use their imagination, intellect and imagination and provide such characters with certain specific and unique attributes such as, costume, alter ego, superpowers, backstory etc. with which they are uniquely identified with when the consumers read about them or watch a TV show or a movie based on such characters. These unique attributes also give the idea of the artist an expression. It is due to these reasons that the creator/artist to protect such character to avoid infringement, copying, and misappropriation by third parties.

The production companies, advertisers, licensees and business houses, who invest a substantial amount of money to obtain rights of such characters for using such characters through various media like TV, movies, radio, merchandising, shall also have a genuine concern over infringement of their rights over such characters by any third party. It is due to these reasons that it becomes very important that such comic book characters are also included in the ambit of Intellectual Property Rights.

It is very important to understand that when do such comic book characters come under the ambit of copyright and trademark related legal protection and what happens to characters which are already in public domain but may be used subsequently in new copyrighted work.

Characters may be differentiated into two categories: graphic, and fictional. Where a graphic character can be depicted simply by a cartoon, or another form of graphic representation with its physical representation and characterization being visually obvious for the readers, a fictional character is a word portrait of which the physical appearance and characterization reside in the mind of the reader. Since images are more easily identifiable, retained in the memory of the readers and characterized than literary descriptions, it is are easier to afford them legal protection. David B. Feldman goes as far as to opine that fictional characters’ are the second-class citizens in the world of intellectual property.

Graphic characters

Copyright protection under the ambit of ‘artistic work’ can’t be afforded to such graphical characters since such characters and their personalities evolve from various episodes which the artist/creator creates, as it can’t be visually expressed and can only be perceived by the human mind. The copyright law though can protect such expressions of the character which can be graphically represented through drawings, colors, art, storyboard etc.

In the case of Hill vs. Whalen Mortell, 220 F 359 (S D NY, 1914), in which the court had held that the stage characters of Nutt and Giff were copies of plaintiff’s characters Mutt and Jeff since everybody viewing these characters was able to make the connection.

In another such case of protection to graphic characters, the case of Detective Comics vs. Bruns Publication, 111 F 2d 432 (2d Cir, 1940) comes to mind. In this case, the defendants had created a character called ‘Wonderman’ which had the same physical and emotional attributes as the Plaintiff’s popular comic character ‘Superman’. It was held by the court that the defendant’s had also copied the Plaintiff’s character’s pictorial and literary details. The court said that protection to characters can be given only if they have been portrayed in detail and they have been converted from an idea into a visual expression. In the present case, the idea of ‘superhuman powers’ can be used by anyone but the character must have different personality than an already existing one.

In another landmark judgment of Walt Disney vs. Air Pirates, 581 F.2d 751 (9th Cir, 1978), cert. denied, 439 U.S. 1132 (1979), the court had held that a two step test needed to be carried out to determine if copyright infringement has taken place. Firstly the visual similarities of the characters are analyzed and in the second step the personalities of the cartoon characters.

The second step is to be done through the ‘character delineation’ test which was developed in the case of Nichols vs. Universal Pictures, 45 F 2d 119 (2d Cir 1930), cert denied, 282 US, 902 (1931), this test is used to determine if the character in question is distinct and unique from other characters in such a way that it warrants copyright and trademark protection. It means that this is a penalty on authors and creators who do not put in effort or intellect on making their characters distinct from others.

In the Indian case of Malayala Manorama vs. V T Thomas, AIR 1989 Ker 49, the court had held that V T Thomas could continue drawing the characters of ‘Boban’ and ‘Molly’ despite leaving MalayalaManorama’s employment, since the characters had been created by Mr. Thomas before entering into employment with Manorama and the publishing house did not create or use their artistic imagination or intellect to create the aforementioned characters so their copyright will only be limited to the extent of the drawings made using the character, but the copyright over the character would remain with Mr. Thomas.

Fictional characters

While fictional characters are generally associated with copyright protection, increasing commercialization has meant that the intellectual property in these characters is no longer limited to the artistic works that created them, but has also extended to associated goods and services, which has benefited tremendously from the immense appeal and popularity of these fictional characters. This is known as character merchandising. The obvious consequence of the fact that the goodwill of these characters perform both, source-identifying as well as promotional functions meant that in most cases, they have been protected with trademarks.

Fictional characters have three significant components: name, physical or visual appearance, physical attributes, personality traits or characterization. In the case of Anderson vs. Stallone, 11 USP Q 2d 1161 (C.D. Calif. 1989), the court had held that the ‘Physical’ and ‘Emotional’ characterization of the character ‘Rocky’ were set in such detail that they were highly delineated, distinguishable and unique and imprinted in the mind of the viewers.

However in the case of Warner Brothers Pictures vs. Columbia Broadcasting Systems, 216 F 2d 945, 104 US P Q 103 (9th Cir. 1954), cert. denied, 348 US 971, 99 L Ed 756, 75 S. Ct. 532 (1955), the test of ‘story being told’ was applied. In this case, the court had held that the copyright protection would only be applied to the characters only if the story revolves around the particular character.

In another case of Silverman vs. Columbia Broadcasting Systems, the concept of ‘characters entering public domain and later acquiring new copyrighted work’ came into question. In this case it was held that the character will be entitled to protection once it enters the public domain unless new traits or characterizations have been added to it in subsequent works.

Conclusion

In conclusion I would like to say that it is clear from the various judgments discussed here that in case of graphic characters courts have had a lenient approach in granting protection because of their visual impact, as opposed to fictional characters where protection has been granted only if it is proved beyond doubt that they are distinct and distinguishable. Another aspect is that under Indian law ‘character’ has not been included in the definition of ‘artistic work’ and similarly under the definition of ‘literary work’ the work to be protected must be written down. It is hoped that the ambit of artistic and literary work is expanded to include characters as well.

References:

[1]https://www.americanbar.org/publications/landslide/2013-14/march_april/ip_and_comic_book_superhero.html

[2]https://spicyip.com/2016/04/giving-due-protection-to-fictional-characters-the-possibility-of-copymark.html

[3]https://theconversation.com/who-owns-superman-the-man-of-steel-fights-trademark-law-14625

About the Author: Aditya Vardhan, Trademark Associate, Khurana and Khurana Advocates and IP Attorneys, aditya@khuranaandkhurana.com

Initial Coin Offering (ICO) and its Intellectual Property (IP) Interface

With growing importance and widespread adoption of Cryptocurrencies such as Bitcoin, Litecoin, Ethereum, Ripple among many others, Initial Coin Offerings (ICO) have become very popular over the last few years. In brief, an ICO is an unregulated means by which funds are raised for a new cryptocurrency venture or even by a technology company that integrates its offerings/products with issuance and/or transactions of cryptocurrencies. An Initial Coin Offering (ICO) is used by startups to bypass the rigorous and regulated capital-raising process required by venture capitalists (VCs) or banks, wherein in an ICO campaign, a percentage of the cryptocurrency is sold to early backers of the project in exchange for legal tender or other Cryptocurrencies as mentioned above. More information on ICO’s can be seen herehere, and here.

Having been an active part of ICOs since 2016, and have drafted over 5 ICO offering documents, and 10 white papers, we have closely observed that there has been a strong and growing correlation between subscription levels for an ICO during the initial offering and the manner in which they depict/demonstrate their Intellectual Property (IP), especially their Patent portfolio. A clear mapping between ICO entity’s product commercialization, coin offering strategy, basis of product differentiation, and how they harness the blockchain technology with respect to their Patent/IP portfolio is a strong indicator of how they create entry barriers. Investors too are gaining maturity by doing thorough due-diligence on the IP that the ICO-entity holds before they invest in the ICO through comprehensive assessment of how broad the claims are, how the claimed subject matter integrates with the blockchain platform for issuance or transaction of newly issued currencies/coins, whether claim charts have been prepared, assignment/ownership issues if any, litigation/pre-litigation outcomes, validity challenges, competitive analysis, market landscape, white-space analysis, among other common IP due-diligence parameters.

Most ICO white papers therefore pay significant attention to how they present their Patent portfolio with respect to the manner in which each feature of their blockchain based implementation would be executed such as, for instance, how digital contracts would be managed, for an IoT architecture based entity: how blockchain would enable optimization of IoT device monitoring, and for an analytics company: how data analytics can be configured to associate with blockchain network tokens. Some white papers go further to even map their patent claims with the cryptocurrency interfacing mechanisms. Although most ICOs focus on their US Patent Portfolio, companies in other major startup communities such as in Israel, UK, Germany, and Singapore are also engaging strongly in how they uniquely position their offerings to gain competitive advantage through presentation of their IP. Most white papers intend explaining what their tokens are, how they are acquired, released/spent, along with their token generation events, and IP’s that interface with each of these steps can be integrated into the relevant portion of the white paper so as to demonstrate the extent of coverage and protection that the entity has done, which is also reflective of their IP strategy.

It is therefore, in sum, crucial to develop a robust IP strategy before launching an ICO to instill higher confidence in potential investors and create a differentiator in the market.

 

Author: Tarun Khurana, Partner and Patent Attorney at Khurana & Khurana (K&K) and IIPRD can be reached at Tarun@khuranaandkhurana.com

Emerging Trends in IP

Intellectual Property has seen numerous modifications. Different Intellectual Properties have come about to exist, which some would say is the impact of IP Maximalism and some would regard them as a matter of necessity of changing times, which reminds me of Victor Hugo, he spoke in a speech and I quote, “no power on earth can stop an idea whose time has come.” This is very well the era IP evolution. Where software is expressly ousted from patent protection, CRIs come to their rescue. New types of intellectual property rights are on the rise, for example, Data Exclusivity, Orphan Drug Exclusivity, Standard Essential Patents etc. India lags behind in several of these emerging trends, partly because of the lack of legislature in several issues and partly because of its mixed priorities. Legal framework needs to substantiate these issues more coherently, while maintaining India’s pro public-benefit approach towards IP.

Invention in softwares

While identifying what kind of protection is to be granted to an IP, one needs to identify on what is the “intellectual” in that property, is it an invention or a literary work?Software i.e. computer programme has found its mode of protection in the Indian Copyright Act, 1957. S2(ffc) defines computer programme as “a set of instructions expressed in words, codes, schemes or in any other form, including a machine readable medium, capable of causing a computer to perform a particular task or achieve a particular result”. These are as such included in “literary work” defined in S.2 (o) of the Act, “literary work includes computer programmes, tables, and compilations including computer literary databases.”

On the other hand, the Indian Patents Act, 1970 expressly excludes computer programmes from the ambit of patentable subject- matter, visavis including it in Section 3 what are not inventions, S. 3 (k) a mathematical or business method or a computer programs  per se or algorithms; and S.3 (m) a mere scheme or rule or method of performing mental act or method of playing game; expressly excludes computer programs from patentable subject matter.[1]

However, the Patent Office prescribes guidelines to outline various regulations and explanations regarding patentability of computer related inventions (CRIs), last updated on 30 June, 2017.[2]

The legislative intent to attach the suffix per se to computer programme is evident by the following view expressed by Joint Parliamentary Committee while introducing Patents (Amendment) Act, 2002:

“In the new proposed clause (k) the words “per se” have been inserted. This change has been proposed because sometimes the computer programme may include certain other things, ancillary thereto or development thereon. The intention here in not to reject them for grant of patent if they are inventions. However, the computer programmes as such are not intended to be granted patent. This amendment has been proposed to clarify the purpose”.[3]

Example:

1. In re Accenture Global Service GMBH Vs. The Assistant Controller Of Patents & Designs[4], relates to Indian patent application number 1398/DELNP/2003, which is now a granted patent as patent number 256171, whose present legal status at the patent office database is, “Enforce with Due date of next renewal as 21/02/2017”. This patent application was initially refused for patent registration by patent office under the provisions of Section 3(k) of the Indian patents act.

However, the patent applicant appealed before the IPAB and as per the Controller’s decision, it was held that the instant invention as claimed is not software per se but, a system is claimed which is having the improvement in web services and software. Accordingly, it was held that the invention since not falling in the category of section 3(k), viz software per se, corresponding objection was waived and the patent was granted.

2. Nissan Motor filed a series of patent applications in 2017 with respect to the computer softwares inter alia a travel control device and method for vehicle[5] comprising: a target acquisition means for acquiring target information which includes the location of an avoidance target that exists near a vehicle, a vehicle information acquisition function for acquiring information which includes the location of a vehicle, and drive assist device[6] which is a driving assistance device for assisting driving when a host vehicle is changing lanes wherein the device is provided with; a position measurement means for measuring the position of the host vehicle; a detection means provided to the host vehicle the detection means detecting the conditions around the host vehicle; a database for recording map information.

The aforementioned claims of Nissan Motor are claims concerning Computer Related Inventions (CRIs) which mean to perform the function as mentioned above and hence are termed as means + functions defined in the Guidelines for Examination of Computer Related Inventions.[7]

In light of the guidelines published by the Indian patent office for examination of software patents / computer related inventions (CRIs), software patents can be applied in India by way of combination of hardware and software features, which are novel, inventive and possess industrial applications. It may be categorized as Hardware based inventions: apparatus/ system/ device, Method/process based, Computer program product/ computer readable medium. Unless the software is a computer program per se, it may be granted a patent in India, and hence Nissan stands a fair chance to be granted the aforementioned patents. However, in the case of any conflict between The Indian patents Act and the said Guidelines, the Act is to prevail and for such instances, it is essential to have rules with the effect of laws incorporating CRIs in patentable subject matter.

On the same lines European Patent Convention expressly excludes computer programs, per se, from the purview of patentable subject matter.

Whereas in USA, there is no specific exclusion of software or business methods from patentable subject matter.  The law states that the subject matter, to be patentable, must be a useful process, machine, manufacture or composition of matter. According to the US Supreme Court, the Congress intended the statutory patentable subject matter to include “anything under the sun made by man,” but the laws of nature, natural phenomena and abstract ideas are three specific areas which are not patentable.[8]

Emerging new IPs

SEPs and FRAND Licensing

A patent that protects technology essential to a standard is called a standard-essential patent.[9] A standard is a document that sets out requirements for a specific item, material, component, system or service, or describes in detail a particular method or procedure.[10] For example, a modern laptop computer implements around 251 interoperability standards.[11]

The concept of SEPs evolved in India when Ericson in 2011 objected to the importation of handsets by Kingtech Electronics (India), claiming that the handsets infringed several of their SEPs in AMR Codec (Adaptive Multi-Rate) technology. The Indian Patents Act, 1970 does not contain any special provision for SEPs. Although, the same have been recognized by the jurisprudence, SEP is defined as …for a technology that forms a part of a standard, the patent is regarded as an essential patent for such standard.An essential patent can be said to be a patent that corresponds to an industry standard. The same standard is mutually agreed by various service providers, equipment manufacturers etc to be mandatorily implemented for a particular technology (such standards are recognized and implemented by the concerned government authority as well). It is meant to ensure that complete compatibility is achieved. It is impossible to claim compatibility with a technology (as defined by the concerned standards) without actually infringing the specific patent (and hence the requirement to obtain a license).[12]

 Following cases in India,

  1. Ericsson and Micromax case,
  2. Ericsson and Intex case
  3. Ericsson and Best It World (India)
  4. Ericsson and Xiaomi Technology
  5. Ericsson and Lava International Private Limited
  6. Telefonaktiebolaget lm Ericsson (publ) v.Competition Commission of India and another,

have established clearly that the necessary steps to be taken by any company/ legal entity, intending to incorporate any technology in its product that is standardized by any SSO (Standard Setting Organisation). It has to,

1.Incorporate the patent which is essential to obtain that standard.

2. To enable themselves of the use of aforesaid patent, without infringing it, they require obtaining a license from the holder of the aforesaid patent.
However, such a situation can have an obvious monopolistic outcome in the hands of the patent holder, and to curb such a situation before-hand, the patent holder has its commitments as a member of the SSOs, these commitments are known as FRAND commitments. Whereas the question remains as to what are the clear boundaries of fair, reasonable and non-discriminatory license terms, is to be determined by the consensus reached by the parties, and if the parties are unable to reach such consensus, they may appoint a mediator for the purpose, and yet if the party seeking the license considers the license terms to be abusive of the dominant powers of the patentee, the CCI holds proper jurisdiction to inquire and investigate into the same.

Data Exclusivity

Data Exclusivity is a TRIPs Plus element that is much debated in India. It arises from the interpretation of the Article 39 of the TRIPs agreement, “Members, when requiring, as a condition of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort, shall protect such data against unfair commercial use. In addition, Members shall protect such data against disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use [13]wherein the big Pharmaceuticals and countries like USA interpret, “protection against unfair commercial use” to obviously mean, “protection of clinical data required to be submitted to a regulatory agency to prove safety and efficacy of a new drug, and prevention of generic drug manufacturers from relying on this data in their own applications.” USTR (United States Trade Representative) has been negotiating bilateral agreements enforcing the said interpretation of TRIPs, which is beyond the actual agreement and is thus referred to as a TRIPs Plus clause, with India. The Drugs and Cosmetics Act, 1940 provides for data exclusivity for a “new drug” under section122E for a total period of 4 years from the date of approval. There were considerations in November, 2016 that this period of four years to be increased to ten years.[14] Such exclusivity is itself a protection and does not depend upon the validity of the patent associated to the same drug, so even if the patent associated to the drug stands invalidated, the exclusivity stands unaffected and the drug remains out of the reach of the generic producers. There is no evidence that the four years of protection, already provided, was insufficient, and neither is there any protocol necessitating India to increase the said period. Such provision would delay market access of drugs at reasonable prices to the common people. Although, USA itself provides for 7 years of data exclusivity but the economic and developmental status of India, would suffer with such an amendment to the section.

Orphan Drug Exclusivity

An orphan drug is a pharmaceutical agent that has been developed specifically to treat a rare medical condition. India currently has no regulations for orphan drug manufacturing or selling. Treating rare or orphan diseases is important to India but very costly, which increases the patient burden. In India, 72,611,605 people are suffering from rare diseases, and 6,000–8,000 rare diseases can be found, including LeishmaniasisNorrie disease,ArthrogryposisCystic FibrosisWilson Disease, etc., many of which still do not have any cure and are mostly genetic in nature.[15]

Many countries have different definitions and regulations of orphan drugs,

USA under its The Orphan Drugs Act (ODA) is a federal law concerning rare diseases that affect fewer than 200,000 people or are of low prevalence, oraffects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will recovered from sales in the United States of such drug. Determinations under the preceding sentence with respect to any drug shall be made on the basis of the facts and circumstances as of the date the request for designation of the drug under this subsection is made.[16]

According to the Orphan Drug Regulation in Europe, an orphan disease is a disease or disorder that affects fewer than 5 in 10,000 citizens.[17]

In Australia, RareDiseases are defined as a condition, syndrome or disorder that affects 1 in 10,000 people or less (The Australian Therapeutic Goods Authority).[18]

The lack of regulation in India increases the burden on the patients but also negatively impacts the economic success of India’s pharmaceutical industry. Orphan drugs may help pharmaceutical companies reduce the impact of revenue loss by patent expiration of blockbuster drugs. Although there may still be challenges ahead for the industry, orphan drugs seem to offer the key to recovery and stability within the market. Governments of various countries have proactively implemented special incentives for the manufacturers of orphan drugs. For example, regulations include accelerated marketing procedures, marketing exclusivity, tax credit grants for research, reconsideration of applications for orphan designation, and technical assistance for elaboration of the application file.

Intellectual Property Rights came into existence with the primary objective of promoting the progress of science. Patents are the rights that grant exclusivity to the patent holders, where they can exclude others from exploiting their invention which they have spent their R&D upon. This creates a monopoly in the hand of the right holder; this monopoly was intended to serve as an incentive for creation.
What we can observe with the emerging trend of IP is that the protection is shifting its focus from promoting innovation in every field to reserving exclusivity. Pharmaceuticals have been trying to evergreen their patents on blockbuster drugs by merely changing the form of the drug, which when restricted by the Indian Courts by the mandate of S.3(d) of the Indian Patents Act, the validity of which section was found to be challenged in the Supreme Court. The Supreme Court held the section to be constitutionally valid, thereby striking down Bayer’s contentions[19], leading to many disappointed Pharmaceutical Companies. Data exclusivity is yet another tool aiming at the same monopolistic outcome, protecting the clinical data of any “new drug” for an absurd period of time. A “new drug” is not defined as a patented drug but simply a drug which has not been used in the country to any significant extent under the Drugs and the Cosmetics Act[20].

In re Ericsson v. CCI, it was alleged that Ericsson had added a covenant subjecting all disputes relating to matters under their FRAND license to the jurisdiction of Swedish Courts, thereby causing unnecessary costs for Indian mobile phone companies.[21] There are no specific guidelines as to what is fair, reasonable and non- discriminatory, due to which big fishes in the market construe the terms in their own brackets of convenience. Considering the economic condition of the Indian market, such licensing terms can lead to winding up of small and medium enterprises which is to be further evaluated by the Competition Commission of India.

This prevailing trend is untimely exclusivity masked in the disguise of evolution. However, exclusivity is an innate part of evolution, provided, used in the solution of overlooked issues such as orphan care drugs. Exclusivity is indeed very appealing for pharmaceutical companies to invest their R&D in the production of orphan drugs. It curbs their fear of negative commerce which appears to be an obvious result of producing any product with low commercial demand. With regulations such as a fixed exclusivity period over their drug and royalty standards, a profit margin can be achieved in addition to the recovery of production costs in the aforesaid duration.The shifting trend towards exclusivity can positively shape the Indian IP regime, if given the right direction.

About the Author: Namisha Jain, ILS law college, Intern  at Khurana and Khurana Advocates and IP Attorneys and can be reached at info@khuranaandkhurana.com

[1]  Indian Patents Act, 1970

[2] www.ipindia.nic.in/writeraddata/Portal/Images/pdf/Revised_Guidelines_

for_Examination_of_Computer-related_Inventions_CRI.pdf

[3] Report of the Joint Committee presented to the Rajya Sabha on 19th December, 2001 and laid on the table of Lok Sabha on 19th December 2001.

[4]  http://www.ipabindia.in/Pdfs/Order-283-2012-OA-22-2009-PT-DEL%20(Final).pdf

[5] Application No. 201747007327 A; www.Ipindia.nic.in/writeaddata/Portal/IPOJournal/1_471_1/Part-2.pdf

[6]  Application No. 201747015385;www. Ipindia.nic.in/writeaddata/Portal/IPOJournal/1_471_1/Part-2.pdf

[7] http://www.ipindia.nic.in/writeraddata/Portal/Images/pdf/Revised_Guidelines_for

_Examination_of_Computer-related_Inventions_CRI.pdf

[8] Bilski v. Kappos

[9]  http://ec.europa.eu/competition/publications/cpb/2014/008_en.pdf

[10]  http://www.cencenelec.eu/standards/DefEN/Pages/default.aspx

[11]  http://www.standardslaw.org/How_Many_Standards.pdf

[12]  In re Telefonaktiebolaget lm Ericsson (publ) v. Intex Technologies (India) Limited I.A. No. 6735/2014 in CS(OS) No.1045/ 2014

[13]  https://www.wto.org/english/docs_e/legal_e/27-trips.pdf

[14] https://www.ip-watch.org/2016/11/06/indian-generic-pharma-warns-government-caving-us-pressure-data-exclusivity/

[15] Adapted from the Rare Diseases List provided by the Foundation for Research on Rare Diseases and Disorders (accessed May 7, 2015)

 [16] https://www.fda.gov/forindustry/developingproductsforrarediseasesconditions

/howtoapplyfororphanproductdesignation/ucm364750.htm

[17] http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2000:018:0001:0005:en:PDF

[18] http://www.rarediseasedayaustralia.com.au/what-is-a-rare-disease/

[19]  Novartis AG v. Union of India CIVIL APPEAL Nos. 2706-2716 OF 2013 (ARISING OUT OF SLP(C) Nos. 20539-20549 OF 2009)

[20] Rule 122E of the Drugs and Cosmetics Act, 1945- Directorate General of Health Services. The Drugs and Cosmetics Act and Rules. D&C Rule’s 1945- 122E:2005. Delhi: D&C; 2005. p. 134.

[21]  Ericsson v. CCI W.P.(C) 464/2014 & CM Nos.911/2014 & 915/2014

Japanese Patent fund IP Bridge to raise $50m “Intellectual property and innovation” fund in Malaysia

On October 19, 2017 Japanese private equity fund “IP Bridge” disclosed its plan of launching a $50 million fund as a continuation of ASEAN push for “Intellectual property and innovation” and signed an agreement with Malaysian local, Leonie Hill Capital (LCH) [1]. The agreement aims at investing in “IP rich or to-be-rich”, national and regional enterprises in Malaysia and particularly targeting towards technology areas like Internet of Things (IoT), wearable, robotics etc. The agreement is a step towards accelerating the growth of startup companies in Southeast Asia.

This partnership between IP Bridge and LCH makes Malaysia the base of the first intellectual property innovation fund in Southeast Asia. As per the agreement, the two partners will focus their investments on technical companies that have substantial Intellectual Property or worthy enough to develop IP in future and are working in IoT sensors, Robotics, Agri-tech etc.

Further, the ManGo Factory program endorsed by the partnership provides support to venture companies for their overseas expansion. The partnership will “re-domicile more than 10 South East Asian and Japanese start-ups in Malaysia, providing them with facilities, access and market opportunities”. The partnership will provide wide support to the Start-up companies from commercialization, partnership/alliance and access methods to the world market and IP bridge can provide intellectual property utilization strategy and advice related to it. This collaboration of two companies will contribute the development of Malaysian technology companies.

The Prime Minister of Malaysia, Najib Razak, said that since Malaysia is geographically located in the center of ASIAN countries and has an appropriate ecosystem for the growth of start-up companies around the world; it is an appropriate place for start-up companies in Southeast Asia and Japan to procure funds more smoothly. At this, CEO of IP Bridge, Shigeharu Yoshii said “an appropriate ecosystem is required for start-up companies so that delicious rice will not grow without rich soil, clean water, adequate sunlight, insects, frogs, etc.” and its a great honor for them to function as part of Malaysia’s innovation ecosystem to support startup companies.

Najib Razak also added that the startups raised through this fund will generate employment in future and will also provide Malaysia with economic and social opportunities. The CEO of Malaysian Digital Economy Corporation (MDEC), Yasmin Mamoudo said that this Malaysia based innovation fund is a clear indication of growth of Malaysian digital economy. This agreement which launches fund for innovation will keep Malaysia in the conversation as a regional IP centre and further will boost up the relationship with an IP aggregation and monetization firm that is putting together a fairly good track record.

The fund raised by IP Bridge, is the biggest one among Asia’s largest and most active IP funds. For a non-practicing entity to move into the start-up investment space is certainly not a new tactic. This type of fund motivates the companies that are seeking to show a skeptical domestic constituency that IP monetization can be part of a sustainable business model.

On April 26, 2017 in a press release on Intellectual Property Office of Singapore (IPOS) online portal, it was published that IPOS announced a similar type of innovation fund named as “Makara Innovation Fund” [2]. The Makara Innovation Fund was supposed to invest one billion Singapore dollars in highly growing companies which encompass a strong IP and convincing business models. According to government officials in Singapore, the money in that fund will be used to bolster the country’s IP ecosystem and will target high-growth companies with strong IP and proven business models, leveraging Singapore as a base for their growth and expansion into world markets. This was announced by IPOS and Ministry of Law, along with updates to the IP Hub Master Plan.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

 References:

[1] IP Bridge concluded basic agreement with ASEAN-based PE fund under the support of the Malaysian government

[2]https://www.ipos.gov.sg/media-events/press-releases/ViewDetails/one-billion-dollar-innovation-fund-launched-in-singapore-to-drive-enterprise-growth-for-our-future-economy/

Intellectual Property of Singapore: Patents legislative amendments

In continuation of IPOS’s efforts to strengthen the patent regime and make Singapore’s Intellectual Property one of the best in the world also supporting inventive individual and businesses [1], Patents (Amendments) Act, 2017 and Patents (Amendment no.2 ) shall come into force on October 30, 2017 [2].

IPOS’ Patents legislative amendments

In IPOS’ efforts of delivering a well-equipped and a well-suited legal framework as well as a policy framework to individual patent applicants and corporate business houses, the Patents (Amendment) Act 2017 and the Patents (Amendment No.2) Rules 2017 will enter into force on 30 Oct 2017 [2]. The October version of the revised examination guidelines for Patent Applications at IPOS will also get published on the same date on the online website of IPOS (https://www.ipos.gov.sg/). Below are the key highlights of these amendments as released in the Patents Circular No.7/2017 [3] on IPOS website.

 Broadening of Grace Period

As effective from 30th October 2017, under the broadened grace period all the applicants will now be able to apply for patent protection for their invention notwithstanding that their invention has been disclosed prior to the filing of the patent application. In instances where the inventors have publicly disclosed their inventions prior to filing a patent application for the same, the broadened grace period will act as a safety cover for the entity in obtaining the Singapore patent rights. However, an important thing to note for the applicants is that not all jurisdictions have a provision for similarly broadened grace period, therefore, all the applicants are strongly encouraged to avoid or exercise prudence and caution before disclosing their inventions to third parties before applying for a patent.

Further as per the new provision, the applicants who require or ‘wish for’ their invention disclosure to be graced may inform the registrar when making:

  1. a request for search and examination;
  2. a request for examination;
  3. a response to written opinion; and
  4. a request for a review of an examination report or of a search and examination report.

The above requests must be accompanied by written evidence in the form of a statutory declaration or affidavit that complies with the requirements of the new Rule 8 of the Patents Rules.

 Changes to Supplementary Examination

As per the rules, supplementary examination route will become unavailable for patent applications filed on or after Jan 1, 2020 [3] i.e.

–  for Singapore national applications having a date of filing on or after Jan 1, 2020,

– for International applications entering national phase having a date of filing on or after 1 Jan 2020, and

– for Divisional applications having an initiation date on or after Jan 1, 2020.

However, patent applications filed before 1 January 2020 will continue to use the supplementary examination route. This means that with the unavailability of the supplementary examination route, all patent applications filed on or after 1 January 2020 will undergo full examination by IPOS examiners.  Given that, the entire process of examination is going to be carried out in Singapore, the quality and consistency of patents granted in Singapore is expected to improve. This will also align Singapore’s patent system with that of major jurisdictions, such as those of the US, Japan, and Europe, that perform a full examination of the patent applications that they receive. A period of 3 (three) years has been granted as grace period for the community to adjust as the change shall be effective from 30th October 2017 but shall come into operation from January 2020

Further,  as per the amendment,  the scope of supplementary examination has expanded by allowing an examiner to raise an objection relating to patentable subject matter to ensure consistency in the assessment of patentable subject matter across all the routes of examination.

Amendments to the Guidelines on Isolated Products from Nature

The Guidelines have been revised to clarify the distinction between inventions and discoveries as applicable to the issue of isolated products from nature. As per the new guidelines, a material or microorganism already existing in nature represents a discovery and therefore an isolated or purified material or microorganism from nature is not an invention. However, if a new use of the isolated or purified material or microorganism is found, then the new use can be claimed. The revised Guidelines will take effect on 30 October 2017.

The overall objective of this amendment is to facilitate innovation by allowing others to develop applications relating to the discovery and to monetize or earn rewards for translational research and development.

Author: Shilpi Saxena, Jr. Patent Associate at Khurana & Khurana Advocates and IP Attorneys can be reached at shilpi@iiprd.com.

Citing Sources

[1] https://www.ipos.gov.sg/about-ipos/singapore-ip-ranking

[2]https://www.ipos.gov.sg/media-events/happenings/ViewDetails/patents-and-designs-legislative-amendments-to-enter-into-force-on-30-oct-2017/

[3]https://www.ipos.gov.sg/docs/default-source/resources-library/patents/circulars/(2017)-circular-no-7—amendment-to-patents-act-and-rules-to-enter-into-force-on-30-october-2017.pdf