In the field of “standard-essential patents” (SEP), which model should be adopted when setting the licence fee amount? With the publication of a new draft guide to recommendations for 5G technology licences in January 2019, industry operators are continuing the debate.
At the dawn of a massive deployment of the Internet of Things together with the arrival of 5G and the exponential growth of available data, interoperability is a growing need. So, how can compatibility be ensured between connected devices that are supposed to work together or on the same network, but are diverse and varied and manufactured and sold by competing operators?
The answer lies in the creation of technical standards which must avoid redundant investments, ensure the compatibility of products and respect all operators across the various markets concerned.
But a standard necessarily implies an “essential patent“. So, as we have already mentioned in previous articles, the holder of a standard-essential patent must issue licences to market operators with “FRAND” conditions: “Fair, Reasonable, and Non Discriminatory“. Some decisions have already clarified these conditions, and in November 2017, the European Commission published its recommendations that we then reported here. But a decision still needs to be made on several important questions. We will deal here with the following question: how can the fee amount of such a licence be calculated?
Advertising Mascots: Creating and Protecting in 2019
China has become a highly competitive market. Companies here are crawling to get just a few seconds of attention from consumers. When they succeed, infringers are quick to react and take advantage of what others have done. In that respect, creating and protecting in 2019 is way different from a few years ago.
Advertising mascots are key, with a growing range of forms (e.g. emoticons, GIFs, stickers, memes) and channels (e.g. flesh-and-bone KOLs, virtual KOLs).
The same goes for IP protection: new tools are available in 2019, and they should be taken into consideration.
Let’s see how developing advertising mascots works live with Benoit Raoult, the Shanghai-based guru in this field. Two major legal firms (i.e. LEAF and LLR) will also elaborate on protection tips and blockchain-style solutions.
Date: Thursday, 14 March 2019
Time: 6:30 pm – 8:00 pm
Fees: Free, strictly reserved to CCI FRANCE CHINE Members
Venue: CCI FRANCE CHINE Shanghai Office
2/F, Mayfair Tower, 83 Fu Min Road, Shanghai 200040, P.R.C.
Benoit RAOULT CEO, Dunho
Born and raised in Celtic-influenced Brittany (France), Benoit Raoult is a computer science engineer with over 15-year experience of entrepreneurship in North America, Europe and Asia. Benoit has been successful so far in developing software, exhibiting his photography work, providing consulting expertise in healthcare and corporate digitalization. In addition to B2B-oriented Jumo, Benoit established in 2017 Dunho, a character branding agency that engages audiences through illustrative content.
Bruno GRANGIER Partner, Leaf
Founding Partner of multi-award winner Leaf law in Shanghai, Bruno Grangier is a lawyer based in China since 2004. He has worked in M&A for major international law firms in Shanghai, Hong Kong and Paris, and is officially registered with the Chinese Ministry of Justice. He has gained extensive experience in transactions and negotiations across China, conducting many M&A and private equity operations, joint ventures with both private and public partners, as well as crisis management.
FENG Shujie Senior IP Counsellor, Law Professor, LLR-HD
Feng Shujie is professor and senior counsellor at LLR-HD, a Paris-headquartered European IP firm with offices in Beijing and Shanghai. Shujie has rich experience in advising companies on the protection of intellectual property. With a Ph.D. of Pantheon-Sorbonne University, Shujie is also Vice-President of the Trademark Case-Law Committee of the Supreme Court.
Séverin MÉLÈS Managing Director, Vidon (Shanghai) IP Law Group
Séverin Mélès is an IP counsel at Vidon IP Law Group, a French headquartered IP boutique with several offices across Europe and Asia. Séverin is involved in all kinds of IP-related cases (invention patents, design patents, trademarks, copyright).
This case, on which the supreme court ruled on 9 January 2019, relates to legal action brought by Keter Plastic, a company specialising in plastic products that includes garden furniture which, on 6 August 2012, filed a complaint for infringement against Shaf, a company specialising in garden furniture, with regard to its European Union designs.
However, Keter Plastic’s commercial agent, Plicosa France, disclosed the existence of these infringement proceedings on 29 August 2012, resulting in several of Shaf’s clients cancelling their orders.
The tribunal and the court of appeal that heard the case brought by Shaf for payment of damages for unfair competition against Plicosa France, considered that there was no evidence to demonstrate that the information communicated by the defendant with regard to the infringement proceedings it had brought against the plaintiff lacked objectivity, was excessive, disparaging or even misleading.
The supreme court overturned the judgement by the Paris Court of Appeal of 17 January 2017 in application of Articles 1240 of the Civil Code and 10 of the European Convention on Human Rights, on the grounds that the disclosure by Plicosa France to Shaf’s clients of the legal proceedings for infringement not giving rise to a court ruling had no sufficient factual basis because it only relied on the sole complaint filed by the holder of the rights and represented a blameworthy disparagement.
This case demonstrates the need for extreme caution when using information about lawsuits, and even more so when there has been no ruling, given that the presumption of innocence must be respected.
The decision of the supreme court is all the more welcome since the initial infringement case was rejected by a ruling of 27 June 2013 confirmed by a decision on 27 January 2015.
As intellectual property (IP) right owners, you make and sell your patented products, sell your products or services under your trademark, sell or license your copyrighted software, movies, paintings. IP is also a kind of asset that you make other use of it:
You can sell your IP,
You can create a company with your IP as investment and become shareholder
You can invest the property or license of your IP into a joint venture created with your Chinese partner
You can get a loan from the bank with your IP as a guaranty
You can qualify your company as Hi-tech enterprises with your IP and other innovation conditions in order to benefit from preferential tax rate, etc.
But, how to determine the value or price of your IP? How to use your IP as an asset? Our invited legal and financial experts will tell you the Chinese law and practice.
Date: Thursday, March 7th, 2019
Time: 6:30 pm – 9:00 pm
Fees: Free, reserved to CCI FRANCE CHINE Members
Venue: CCI FRANCE CHINE Beijing Office
2F, Building 81, No. 4 Gongti North Road, Chaoyang District, Beijing
Joey ZHOU Partner, Tax Adviser of Mazars
Joey has over 16 years of tax advisory and audit experience. She graduated from London School of Economics, majoring in Accounting & Finance. She serves a number of sizable multinational corporations with investments and operations in China as well as owner-manager businesses.
Audrey DRUMMONDIntellectual Property Counsellor of LLR China
Audrey provides legal advice in IP contracts, trademarks, patents, domain names and copyright, most particularly for European clients doing business in China. She once worked as in-house lawyer in several international firms in France and Singapore. She has experience in various fields such as the telecommunications, information technology, music and TV industries.
SUN Han Associate Lawyer of Zhonglun W&D Law Firm
Graduated from University of Bristol, Han specializes in areas of IPO, material assets reorganization, VC and corporate affairs and has served both foreign and Chinese enterprises in M&A and investment projects.
Dr. YUAN Huang Asset Auditor, Vice President of China Tong Cheng Assets Appraisal Co., Ltd.
Huang is Senior Economist and senior member of China Appraisal Society. He has more than 20-year experience and dealt with hundreds of asset appraisal cases.
For more information about this event coordinated by FENG Shujie, Law Professor and Senior IP Counsellor (LLR China) and GUAN Ning,Legal director of Safran China, please visit CCI France Chine’s events page.
Evidence is a key element of litigation. This is more than true in counterfeiting cases.
In France, the procedural weapons offered to the plaintiff facilitate the demonstration of the infringement while, in China, it is generally up to the parties of litigation to collect evidence on their own.
In this case, how to obtain evidence in the hands of the infringers in a lawful manner? You need lawyers, investigators and notaries: lawyers determine and indicate what relevant evidence to collect and require, investigators use their ways to obtain them and notaries certify that the evidence collected is authentic and lawful.
This topic will be addressed by 4 intellectual property specialists during a CCI FRANCE CHINE Intellectual Property Working Group on Wednesday October 31st in Beijing:
Céline THIRAOUNNHO, senior intellectual property (IP) counselor of LLR China.
LIU Daochen, senior partner of Beijing Handing United Law Firm.
Andrew HOULBROOK, director of PSU Business Intelligence and Investigations
YU Kun, senior Chinese notary of Beijing Changan Notary Office.
Our specialists, Clémence Vallée-Thiollier and Qiang Cen, will participate in the French Health Tour 2018, a one-day crash course dedicated to innovative biotech and medtech companies who will:
Learn more about partnering opportunities in China
Learn from the experience of successful French companies in China
Learn from experts about best practices (regulatory, IP, market access, etc.).
Clémence VALLEE, a French and European Patent Attorney who spent several years working in Beijing and still works closely with LLR China to serve French and European companies who want to develop strategic partnerships and raise funds in China, and Qiang CEN, an IP Legal Counsel, will point out stereotypes and share recommendations on intellectual property in China.
This event is organised, among others, by the CNCPI and the Paris Bar with support from the Ministry of Justice.
The goal of this international symposium is to promote the French capital as a center where industrial property litigations, in particular international ones, can be settled; and to identify how to consolidate Paris’s status as a leading European business-friendly hub with a robust legal system.
On 22 June 2018 an interesting decision was issued by the US Supreme Court (USSC) relating to an award of damages in WESTERNGECO LLC v. ION GEOPHYSICAL CORP. Reversing the decision of the Federal District Court, the USSC decided to award damages for loss of profits which occurred outside the US. This was a reversal of the previous position held by US Courts where lost foreign sales were generally considered not recoverable through enforcement of a US patent. In order not to over, or under, interpret this decision and its consequences, the facts of the case are important. Here is the Supreme Court’s own summary:
Petitioner WesternGeco LLC owns four patents relating to a system that it developed for surveying the ocean floor. The system uses lateral-steering technology to produce higher quality data than previous survey systems. WesternGeco does not sell its technology or license it to competitors. Instead, it uses the technology itself, performing surveys for oil and gas companies. For several years, WesternGeco was the only surveyor that used such lateral-steering technology.
In late 2007 respondent ION Geophysical Corporation began selling a competing system. It manufactured the components for its competing system in the United States and then shipped them to companies abroad. Those companies combined the components to create a surveying system indistinguishable from WesternGeco’s and used the system to compete with WesternGeco.
WesternGeco sued for patent infringement under §§271(f)(1) and (f)(2). At trial, WesternGeco proved that it had lost 10 specific survey contracts due to ION’s infringement. The jury found ION liable and awarded WesternGeco damages of $12.5 million in royalties and $93.4 million in lost profits.” (Emphasis added).
§ 271(f)(1) of the U.S. Title 35 (Patents) addresses the act of exporting a substantial portion of an invention’s components from the US to a foreign destination. §271(f)(2) addresses the act of exporting components that are specially adapted for an invention, once again, from the US to a foreign destination.
ION filed an appeal and the Federal circuit reversed the decision regarding the lost profits award on the basis that lost foreign profits are not recoverable, in principle. Based on the 22 June 2018 decision of the USSC, this principle does not hold anymore: foreign lost profits ARE now recoverable, at least under specific conditions.
In a nutshell, the USSC decided that once domestic infringement is established, the overriding principle of award is to provide a remedy which is commensurate with the harm caused by the infringement. The fact that the lost profits arose from the loss of foreign contracts was not relevant to assess damages.
At first, anyone can see the fairness principle underlying this decision. The action of the infringer enabled the purchaser to dispense with the surveying services of the patentee. The loss caused could have threatened the very existence of the company.
However, among the five Supreme Court judges, two dissented with this approach. One of the dissenting judges, Judge Gorsuch J, raised the issue that the infringer becomes suddenly liable for acts beyond its control and that it has no power to stop. Hence, once the supply of the components necessary to manufacture the surveying devices is carried out, the infringer cannot retract it. It becomes thus potentially liable for all future “lost contracts” that can be established as being the direct consequence of the supply forbidden by §271(f)(1) and §271 (f)(2) (cf. supra). Although such a proof is usually difficult to establish, this was one of the cases where it was successfully argued, because there were no other competing players in this specialised market than the litigants themselves.
If the acts of using the invention had been carried out in the US, the purchaser in this case would have become an infringer and could have been stopped. This is not the case if the purchaser is in fact using the invention outside of the US. The liability of the US supplier/infringer mushrooms suddenly without clear limits.
However the USSC balanced this potential unknown liability with the principle that the patentee has to be commensurately compensated, and decided in favour of the latter.
This decision now stands as a strengthening of patent rights. This will be pleasing to the owners of US patents and increase the value of their US portfolio. However to be applicable the patentee had not only to establish a domestic infringing act of exporting abroad but also a clear and direct consequential link between the act and the loss of profits. In this case this was possible due to the combination of :
a particular business model where the patentee kept its patented technology for itself and offered only its services; and
a market where only one competitor existed, said competitor being the infringer.
This particular combination of facts is not likely to be very frequent. Nonetheless, there is no doubt that U.S. exporters as well as U.S. patentees will be keeping this decision very much in mind as a biblical warning against unforeseen consequences of unlawful conduct.