Archive | 2014, May | (4) posts

The life sciences patent maze – USA

ON MARCH 4, 2014, the US Patent Office issued new guidelines on how to evaluate the patentability of inventions reciting or involving “laws of nature/natural principles, natural phenomena, and/or natural products”. Considering the fact that the first federal patent statute of the United States was established in 1790, one might be inclined to believe that the boundaries for what can be patented has long since been settled, but this is far from true. The explosive growth within the life sciences field in the last few decades has really put pressure on the patent system to adapt to the technologies “of our time”. Of course, the legislators in the late 18th century had no idea of concepts like gene therapy and cloning.

Under the current US patent law, the four statutory categories qualifying for patent protection are: process, machine, manufacture or composition of matter. Over the years the courts have interpreted the categories as excluding laws of nature/natural principles, natural phenomena and/or natural products.

Generally speaking, inventions in the following fields are at risk of being classified as ineligible for patent protection:

  • chemicals derived from natural sources (e.g. antibiotics, fats, oils, petroleum derivatives, resins, toxins, etc.);
  • foods (e.g. fruits, grains, meats and vegetables);
  • metals and metallic compounds that exist in nature; minerals; natural materials (e.g. rocks, sands, soils);
  • nucleic acids;
  • organisms (e.g. bacteria, plants and multicellular animals);
  • proteins and peptides; and
  • other substances found in or derived from nature.

The key factor in determining whether or not an invention qualifies for patent protection lies in the level of difference from what exists in nature; a claim reflecting a significant difference from what exists in nature is eligible, while a claim effectively drawn to something that is naturally occurring is not.

The new guidelines are intended to assist in making this determination, by establishing six factors weighing towards eligibility and six factors weighing against eligibility. On balance, if the totality of the relevant factors weighs towards eligibility, the claim qualifies for patent protection, while if the totality of the relevant factors weighs against eligibility, the claim should be rejected. Crystal clear, right? Well, the new guidelines also provide some specific examples to illustrate how the guidelines are to be implemented in practice. More information can be found here.

Initially, the new US guidelines appeared to be well-received within the patent community. However, as the practical consequences of the new guidelines sank in, an uproar of
protests have arisen. It also remains to be seen whether the courts’ view of the law is consistent with the USPTO’s guidance. Somehow, it seems unlikely that these guidelines will be the end of the story, so the evolvement of US patent law can be expected to continue for some centuries yet.

Inga-Lill Andersson, European Patent Attorney, Partner

The new unitary patent opens many opportunities

One of the most significant issues within the European patent industry concerns the unitary patent and the courts which will belong to the new system. In December 2012 the EU made the historic decision on introducing a new patent system, but many detailed issues still need to be resolved.

The current system, the European Patent Convention (EPC), will continue in parallel to the new system, the Unitary Patent (UP), which is expected to be introduced in early 2016. There are no intentions of scrapping the old system. The EPC also covers European countries which are not a part of the EU.

It may seem strange and complicated that you can get national patents within the EU and at the same time have the possibility of patents which cover all of the EU. But looking at the work with trademarks, the duality has existed for a long time and it works perfectly fine.

If you only have operations in a few small EU countries, you might choose to submit an application in accordance with the EPC, and then later decide whether you want the application to result in a unitary patent for the EU or national patents in a few selected countries, as was previously the case. It may very well be the case that initially you choose the old system, as you understand it and feel comfortable with it.

Three main courts

The Unified Patent Court (UPC) cannot be applied until everything involving the courts has been completed. Of course it is not possible to introduce a regulatory framework for a new kind of patent, if there is no body for dispute resolution.

Three main courts, London, Paris and Munich, will be responsible for the different technology areas. Each of them will be the final legal body for their technology area. In addition, a number of regional and local courts will be established.

The new system covers two regulations; one which covers the patent itself and one which covers which language will be used. There is also an agreement which covers the courts. Three of the EU’s member countries have not yet fully approved the system. Italy and Spain have declined the patent part, while Spain and Poland have declined the court. Denmark will have a referendum on the court on 25 May.

Time and costs

One of the major benefits of the new system is time. It should take maximum one year to resolve a dispute. It will be a large difference compared to now.

The time aspect also means that you need to be quick. If you receive an application for a summons, then you do not have a long time to reply. In order to fulfill the requirements, you need to have good relations with a competent counsel who is well-versed with the new judicial proceedings. You need to act directly; you do not have a lot of time to deliberate.

An important objective of the EU in terms of the new system is that it should be cheaper to obtain patents. In some situations, the level of costs may be lower. The costs of applications are likely to end up at the same level as now. But the national completion will probably be cheaper, as validation of a European patent under the EPC in the desired countries has traditionally been fairly expensive. The new system, the UP, automatically covers more countries. Depending on which level is determined for the annual fee for the unitary patent, it may also be cheaper per country to have a unitary patent, than choosing a number of individual countries in accordance with the old system.

The total cost depends on the price levels determined by the EU. The level of the annual fee is crucial and is presently under discussion. The question is how it will impact the patent portfolios, primarily which age they will have. Perhaps more countries will be covered by patents for a certain invention, but the patent will probably be maintained for fewer years.

It will be possible to use the new system in combination with the existing one in a flexible manner. To navigate in this field, a profound knowledge of the systems is necessary, and a strategic approach is desirable.

Uniform action from non-European countries

There is a general consensus that American, Chinese and Japanese companies, as well as large companies in general, will use the UPC to a large extent. They tend to see Europe as one entity, and with the new system they cover the entire EU and do not need to think about whether they should obtain patent protection in only a few selected countries.

If it ends up that way, the market will be more challenging for small players. But the opportunities of obtaining a license for the patent may then increase in the countries where patent holders do not themselves want to act. In the authority registers, where the unitary patent will be included, you should be able to add that you are willing to give licenses to others (license of right), which in that case is rewarded with the patent holder having to pay a lower annual fee. This is completely new.

Eva CarlssonEuropean Patent Attorney
Anita Gillior, Attorney at Law

Introduction of fee reductions for small entities before the EPO

Effective 1 April 2014 the Administrative Council (AC) of the EPO has changed the rules for obtaining reduction on certain fees charged in relation to the procedure before the EPO [1].

The requirement that the applicant must be a resident of or have principal place of business is in an EPC contracting state with an official language other than English, French or German or be a national of such a state who is resident abroad has not been changed.

However, the reduction obtainable has been increased from 20 % to 30 %. Now, who wouldn’t want to obtain such a reduction? Everybody, obviously! However, not everybody is eligible for fee reductions. Thus, to find out whether you are eligible for a fee reduction, read on.

According to the new Rule 6 EPC the applicant must also be a small and medium-sized enterprise (SMEs), a natural person or a non-profit organisation, university or public research organisation.

These types of applicant are defined in the EU Commission’s recommendation of 6 May 2003 [2], and outlined in a somewhat simplified manner in the Official Journal of the EPO [3].

As regards natural persons, non-profit organisations, universities and public research organisations, these types of entities are straight forward to identify.

Natural persons and non-profit organisations are considered self-explanatory. Universities are institutions of higher education and research under the relevant law. Public research organisations are institutes organized under public law with the primary purpose of conduction research and development and of disseminating the results by teaching, publication or technology transfer and which must reinvest all profits in carrying out such activities.

As regards SMEs to qualify as such three conditions must be fulfilled, namely:

a) employ fewer than 250 persons;

b) have an annual turnover not exceeding EUR 50 million and/or an annual balance sheet total not exceeding EUR 43 million; and

c) no more than 25% of the capital may be held directly or indirectly by another company that is not an SME.

When calculating these numbers for a given enterprise, any mother and daughter enterprises must be included subject to the somewhat complex rules of calculation given in [2].

If the applicant is an enterprise failing to fulfill just one of the above-mentioned criteria, no fee reductions are available any longer.

Furthermore, the new reduction of 30 % applies only to the filing fee and the fee for examination. Hence, fee reductions are no longer available for the fees for opposition, appeal, petition for review and limitation/revocation.

To obtain the reduction a declaration stating the applicant’s status must be filed with the EPO when paying the relevant fee. This may be done simply by ticking a box added to the relevant accompanying form.

And what if the applicant changes status during the pendency of an application, you may ask. Fortunately, changes in the status of the applicant occuring after the declaration is filed have no retroactive effect, and so the status of the applicant at the time the fee falls due applies.

It is also worth mentioning the EPO will perform random checks of the declarations filed. If a declaration is incorrect, the associated application will be deemed withdrawn. Fortunately, in this case further processing is available to reinstate the application.

Troels Peter Rørdam, European Patent Attorney & Certified Danish Patent Agent

[1] Decision of 13 December 2013 (CA/D 19/13) the Administrative Council of the European Patent Organisation: Link
[2] Recommendation of the EU Commission dated 6 May 2003: Link
[3] Official Journal of the EPO, 2/2014, A23: Link

Aren’t those Louboutin?

Whenever a woman sees a pair of shoes with red soles, the luxurious brand of Christian Louboutin springs to mind. This feature and the right to use it is worth millions, as it does what a trademark is supposed to, it is a clear indication of origin.



However, the very fact that the red sole is so valuable to the product has left Louboutin with quite a predicament, as the on-going saga regarding the protection of their “red sole” trademark took a new turn in the beginning of April when a Belgian Court declared the mark in Benelux invalid during infringement proceedings against the Dutch shoe company, Van Dalen Footwear BV.

The Benelux trademark.

The Benelux trademark.

The court began by defining the mark as a shape mark and not a colour mark, as the red sole must be viewed in context of the shoe as a whole. The court then stated that the shape mark of the red soles are the primary selling point of the shoes, and therefore should be declared invalid as it gives the shoes their substantial value.

The relevant provision in this regard exists in order to prevent a trademark holder from establishing monopoly on technical, functional or aesthetic qualities of a product. Such qualities should rightly be sought protected by other IP rights such as patents, designs or copyright, as these rights do not last eternally.

Without needing to, the Belgian court went on to assess whether the shape mark significantly departed from the norm, so that it could serve as an indication of origin of the goods in question. As the defendant, Van Dalen, had shown many examples of shoes with a red sole, which did not originate from Louboutin, the court concluded that this feature was common, and the shape therefore lacked distinctive character.

The latter conclusion is quite different from the US decision of 2012, where the Second Circuit Court found the red sole to be a distinctive symbol that qualifies for trademark protection, when the red sole is in contrast with the colour of rest of the rest shoe. In that regard, the US court noted that “By placing the color red in a context that seems unusual and deliberately tying that color to his product, Louboutin has created an identifying mark firmly associated with his brand, to those in the know, instantly denotes his shoes’ source.

When assessing this decision, the invalidity of the shape mark due to the “substantial value” provision seems wrong in this writer’s opinion, as the Louboutin mark is not comparable to other marks typically being declared invalid due to the same provision such as the shape mark for the Bang & Olufsen speakers. The substantial value of the latter mark depends on the design itself, whereas the value of the red soles is not in the design of the shoe as this is not unique. The value is in the red sole but only because of what it represents – the luxury world-known brand Louboutin. Consequently, the reasoning given by the Belgian court can seem dubious. It can in some way appear ironic that the very success of these products later lead to the invalidity of the right to use the mark.

Instead of applying this provision, the court should have merely discussed the acquired distinctiveness and perhaps noted that the requirements for achieving a sole right to a normal colour as red for a broad item such as women’s shoes’ soles are very high. Had distinctiveness been found, the court could have gone on and discussed whether this is diluted due to the many similar products out there. As most people still relate the red sole to the Louboutin mark – despite the many copies – the outcome of this discussion is not clear, and therefore very interesting.

The Louboutin saga is a good illustration of the difficulties in registering and protecting shape marks. Especially when the mark is a simple colour of a sole. The global legal battle regarding this mark once again confirms that while trademark protection of shapes may seem to be a good choice, as it offers the potential of unlimited renewal, there is an apparent risk of the mark being declared invalid either due to lack of distinctive character, or dilution as a result of the product’s success.

Anders Michael Poulsen, Attorney at Law