We are pleased to announce the promotion of attorneys David Hobson, Juliet Redhouse and Andrew White to the Mathys & Squire partnership. The firm now has 30 partners and 10 offices across the UK and Europe.

Working in the life sciences team, David Hobson has a background in biochemistry and represents UK and overseas clients in a range of industries. He demonstrates particular skill at drafting and prosecuting challenging life sciences subject matter through to the grant of commercially-relevant patents. David’s principal sectors of expertise include biotechnology, pharmaceuticals, and food and beverages, encompassing enzyme biotechnology, therapeutic antibodies, and cell-based therapies. He is also experienced in providing therapeutic freedom to operate and validity advice, and handling opposition proceedings before the EPO. Some key hearings include: “Recombinant EPO” (Sterrenbeld Biotechnologie; Polymun Scientific Immunbiologische), “Modified Clostridial Neurotoxins” (Ipsen Bioinnovation; Merz Pharma), and “Antibody-Containing Stabilized Preparations” (Chugai Seiyaku Kabushiki Kaisha; Mathys & Squire).

Juliet Redhouse also works in the firm’s life sciences team, specialising in molecular biology, pharmaceuticals, and biotechnology. With particular expertise in the areas of antibody technology, vaccine technology, protein and peptide based medicines, formulations, personalised medicine and diagnostic assays, Juliet is experienced in examination and opposition proceedings at the EPO, as well as drafting, prosecution, and management of global patent portfolios. She also advises clients on infringement, validity and freedom-to-operate.

Andrew White is part of the firm’s IT & engineering team, with extensive experience managing international portfolios in the med-tech, software, telecoms, and automotive sectors, with a specific focus on electric vehicle and AI-based technologies. Andrew is very active in the startup community,  working with a number of accelerators and incubators, providing regular IP workshops and one-to-one IP clinics covering all aspects of IP ranging from ownership and licensing to patent filing strategies. He frequently presents at tech and startup focused events, and is regularly published in both IP and industry publications.

Commenting on the new appointments, partner Alan MacDougall said: “We are delighted to welcome these next generation partners to further enhance our high-level skills across two of the firm’s core sectors. Their promotions are testament to not only their success and expertise in their individual fields, but also to the passion and dedication they bring to their clients.

“We are confident that the firm will benefit from the appointment of such talented and focused individuals, who clearly represent the firm’s core values of both technical and commercial excellence and will continue to drive this focus as they progress their careers as partners. We wish David, Juliet and Andrew the best of luck as they join the Mathys & Squire partnership.”

This promotion news has been featured by The Patent Lawyer, The Patent Magazine, ICLG and World Trademark Review.

The firm is also delighted to announce the promotions of Miranda Kent, Alexander Robinson and Harry Rowe to managing associates. Congratulations to all!

In a landmark decision, the UK Supreme Court today upheld decisions of both the UK High Court (as reported here) and the Court of Appeal (as reported here).  A copy of the decision can be obtained here.

As noted in the decision itself, the issues decided upon have major importance to the international telecommunications market and in particular relating to Standard Essential Patents (SEPs).  It holds that a UK court has the jurisdiction to, and may properly exercise a power to, both (a) grant injunctions and (b) determine royalty rates for a global licence of a multinational patent portfolio.  It also holds that the English courts can be an appropriate forum to hear such matters.

The decision

The decision clarifies a number of disputed issues:

1. Whether the English courts have the jurisdiction to set a global FRAND rate

The Supreme Court looked to industry practice and noted that due to the size of telecom companies’ patent portfolios and the large number of SEPs, the “practical solution therefore is for the SEP owner to offer to licence its portfolio of declared SEPs” (paragraph 60).  The court acknowledged that such a portfolio may include “untested” patents (which may be of questionable validity and/or not infringed) but held that “by taking out a licence of an international portfolio of generally untested patents the implementer buys access to the new standard. It does so at a price which ought to reflect the untested nature of many patents in the portfolio; in so doing it purchases certainty.”  The court held that the commercial reality means that the licences must have international effect and therefore be global (paragraph 62).

The Supreme Court also held that the previous decisions by the High Court and Court of Appeal did not rule on the validity or infringement of a foreign patent, as that would be beyond their jurisdiction.  Instead, the court held that the lower courts had looked to the commercial practice in the industry in determining what is FRAND behaviour.  The Supreme Court noted that while it has not been industry practice to challenge patents that had been licensed as part of a global licence, “it might in our view be fair and reasonable for the implementer to reserve the right to challenge those patents or a sample of those patents in the relevant foreign court and to require that the licence provide a mechanism to alter the royalty rates as a result.” (paragraph 64).  The court looked to practice in other jurisdictions and noted that, while foreign courts may not yet have gone so far, there appeared to be a willingness in principle (at least in the US and Germany) to do so (paragraph 84).  As such the court concluded that the English courts do have the jurisdiction to set a global FRAND rate.

2. Whether the English courts are an appropriate forum to hear such disputes

It had previously been argued that China was a more appropriate forum for the action rather than the UK (not least because China represented a greater share of the relevant market than the UK).  The decision noted that “how the dispute should be defined has been the main bone of contention between the parties” (paragraph 95) (i.e. are they proceedings relating to obtaining a global FRAND licence, or are they proceedings to enforce a national patent).  The court held, however that “a challenge to jurisdiction on forum conveniens grounds requires the challenger to identify some other forum which does have jurisdiction to determine the dispute” … “In the present case, China is the only candidate which the appellants have put forward.”.  In response to this, the court noted that “the Chinese courts do not, at present, have jurisdiction to determine the terms of a global FRAND licence, at least in the absence of agreement by all parties that they should do so. Even in the event of such an agreement … the prospect that the Chinese courts would embark on the exercise [is] no more than speculative.” (paragraph 97).  As such, the English courts were held to be an appropriate forum.

3. How “non-discriminatory” do FRAND terms have to be?

This issue really focused on whether an SEP holder needs to license on comparable terms to similarly situated patentees (i.e. “hard edged”), or whether it is more general and only requires an SEP holder to licence according to market circumstances, which may for example allow lower rates as an incentive for licensees that enter into a licence earlier.  The court looked to ETSI’s IPR policy (the body responsible for standard setting in Europe) and held that “the non-discrimination element in the FRAND undertaking is ‘general’ and not ‘hard-edged’” and that “since price discrimination is the norm as a matter of licensing practice and may promote objectives which the ETSI regime is intended to promote (such as innovation and consumer welfare), it would have required far clearer language in the ETSI FRAND undertaking to indicate an intention to impose the more strict, ‘hard-edged’ non-discrimination obligation”.  As such, the court held that the FRAND terms are not ‘hard-edged’ and that different licence rates can be offered to different licensees.

4. The interplay between UK law and European competition law

This issue really relates to the conduct of the patentee and their obligation to make a FRAND offer in order to avoid falling foul of European competition law.  The court held that the duty on the patentee to make a FRAND offer only arises when the alleged infringer has expressed its willingness to conclude a licensing agreement on FRAND terms.  Although the court did not explicitly decide on this issue, they indicated that a patentee making a FRAND offer may represent a “safe harbour” from abuse of a dominant position (paragraph 153).  The court did hold that it does not necessarily follow, however, that an absence of a FRAND offer necessitates an abuse of a dominant position.  Instead “to answer that, due account has to be taken of the particular circumstances of the case” (paragraph 153).

5. The proportionality of injunctions

The court noted that the requirement when working with SEPs to license on FRAND terms meant that concerns surrounding the use of injunctions as a threat to obtain exorbitant royalty rates did not apply.  The court held that “we are not in any event persuaded that there is any basis on which this court could properly substitute an award of damages for the injunction” (paragraph 163) and that “the threat of an injunction cannot be employed by the claimants as a means of charging exorbitant fees, or for undue leverage in negotiations, since they cannot enforce their rights unless they have offered to license their patents on terms which the court is satisfied are fair, reasonable and non-discriminatory.”  The court also noted that “if the patent-holder were confined to a monetary remedy, implementers who were infringing the patents would have an incentive to continue infringing until, patent by patent, and country by country, they were compelled to pay royalties. It would not make economic sense for them to enter voluntarily into FRAND licences” (paragraph 167).  As such, the court held that injunctions are proportional when considering SEPs.

Conclusion

This is a far-ranging decision with international significance.  It holds that the UK is an appropriate forum to hear SEP disputes, that the English courts can set global FRAND rates, and that injunctions can be an appropriate remedy.  It also provides further guidance on the conduct required of SEP holders and on the terms that they can offer to different licensees.

In this article for Vehicle Electronics, Mathys & Squire partner Andrew White discusses the case in which Nokia secured its win in a standards essential patent (SEP) dispute with Daimler.

In a ruling that took place on 18 August 2020 at the Mannheim Regional Court in Germany, Nokia secured a win against Mercedes-Benz car maker Daimler following a long-running IP dispute over the use of Nokia’s patented 4G technologies in its cars.

Of the ten infringement cases filed by Nokia against Daimler, this SEP case relates to connected car technology (European patent EP2981103B1).

This article was published as part of Vehicle Electronics’ guest blog in August 2020 – click here to read the full feature.

We are pleased to share the news that our partners have been featured in the latest edition of IAM Strategy 300: The World’s Leading IP Strategists. Martin MacLean, who have been listed in the guide for a number of years, as well as Anna Gregson and Dani Kramer, both newly ranked this year, are all featured in the 2020 edition of the guide, recognised as some of the world’s top IP value creators.

The research involves speaking to a wide range of senior corporate IP managers in North America, Europe and Asia, as well as third-party IP service providers, in order to identify these IP leaders whose business is the creation, development and deployment of strategies that enable IP owners to gain maximum value from their portfolios.

Standout praise for Mathys & Squire partners in this latest guide includes:

The ‘commercially savvy’ Anna Gregson is ‘the ultimate safe pair of hands no matter how challenging the brief. She puts her clients first at all times and is a delight to work with’.

‘Dani Kramer is a discerning choice of partner when dealing with complicated and sensitive patent matters, particularly at the European Patent Office. Highly intelligent, vastly knowledgeable and committed to excellence in client service, he engenders unshakeable trust.’

The 2020 rankings are available via the IAM website and a full press release is available here.

We would like to extend our thanks to our clients and contacts who provided comments to the researchers at IAM Strategy 300. 

In a ruling that took place yesterday (18 August 2020) at the Mannheim Regional Court in Germany, Nokia secured a win against Mercedes-Benz carmaker Daimler following a long-running IP dispute over use of Nokia’s patented 4G technologies in its cars. Of the 10 infringement cases filed by Nokia against Daimler, this SEP case (2 O 34/19) relates to connected car technology (European patent EP2981103B1).

Representatives for Daimler disputed the requirement to obtain a licence themselves, as they considered that the suppliers (i.e. Continental) of the connectivity modules, that made use of the relevant patented technology, should obtain the licence, rather than the car maker itself.

The Mannheim court decision states that, aside from providing information and paying damages, Daimler now must stop using and selling the connectivity modules which utilise Nokia’s technology. The cost for Nokia to obtain an injunction against Daimler is a staggering €7 billion – one of the highest of its kind set by a German patent court. Nokia has not yet confirmed whether it will pay this security deposit, but if it does, the win to would help to strengthen its negotiating position with Daimler (and that of the wider Avanci patent pool members).

Looking at the current situation relating to SEPs in Germany, the Nokia patent (as part of the Avanci licence pool) in the present case between Nokia and Daimler strengthens the position of Avanci against carmakers as well as their suppliers in Germany.

However, carmakers are applying pressure on the German government to restrict the possibility of injunctions in Germany. At present it seems that the German government is willing to amend patent law in the direction the carmakers want, but it is unclear as to which extent. The present ruling, and in particular its effect on Daimler, will be closely monitored by the parties to argue what kind of restriction of injunctions in German patent law are necessary if at all. Daimler has already announced that it does not accept the ruling and will file an appeal, but it is not possible to predict long it will take before a final decision can be made.

In our previous article, we discussed a US case concerning the theft of trade secrets. This case has now concluded, with Anthony Levandowski being sentenced to 18 months in prison.

The case arose initially as a civil matter between Google and Uber, which reached settlement during trial. A criminal case was then brought against Anthony Levandowski, and in March 2020, he pled guilty to one of the charges in a plea deal with prosecutors. He was sentenced this month (August 2020), as well as being fined and ordered to pay $750,000 of restitution.

This shows how seriously the US takes trade secrets theft. The US Department of Justice is willing to pursue vigorously individuals who they suspect of such theft, which may cause others to think twice before committing a similar offence.

Criminal cases relating to IP are very rare in the UK. In 2014, a change in the law – which was met with some scepticism at the time – meant that intentional copying of a registered design could result in a criminal conviction, whereas it had previously been a civil matter. However, in the six years since this law was passed, we are not aware of this new criminal provision ever having been used in the UK.

It is possible that in the next few years the UK may sign a trade deal with the US, and it seems likely that IP rights will be considered during negotiations. It will be interesting to see whether the UK will align itself with US law and practice when it comes to trade secrets theft.

For more information on how we can help to actively enforce your IP rights in the fight against infringement, visit our specialist enforcement page or contact the author, Sam Giles, directly.

We are pleased to report that our client, SmartParc, has announced plans for a new £300 million sustainable food production facility in Derby. SmartParc confirmed that it obtained £12 million of government funding for the project which, once completed, will create 4,500 jobs in the area. The facility will be built on a 140-acre brownfield site.

The concept of SmartParc’s facility, which will provide space for multiple food manufacturers in which to operate, is to increase efficiency and reduce waste by recycling energy and reducing food miles by operating as a central distribution facility. It is due to be completed in 2024 and the facility represents the first of its kind in the world.

The trade mark team at Mathys & Squire has worked with SmartParc for a number of years to protect its trade mark rights in the UK and further afield.

Commenting on the news, associate Harry Rowe said: “We are delighted with SmartParc’s announcement that it will be building its first facility in Derby. The news will undoubtedly provide an enormous boost to the local economy and communities by providing much-needed jobs. Moreover, the potential environmental benefits of this facility are profound, particularly considering the impact that climate change is likely to have in the coming decades and the potential impact on food security. We are proud to be working with the team at SmartParc to protect its trade marks to ensure that its brand value is secured.”

Our firm is proud to represent a diverse range of clients in a variety of commercial fields, one of which is Spirit Energy Limited (SEL). SEL started life as a new entity into which Centria plc’s exploration and production (E&P) business and Bayerngas Norge AS were contributed enabling SEL to operate as an independent business in the oil and gas E&P sector.

In 2017, we filed, on behalf of SEL, UK trade mark applications for the marks SPIRIT ENERGY and, as a series mark, variations of SEL’s logo mark (below). These applications covered a variety of goods and services in classes 4, 37, 39, 40 and 42 relating to the oil and gas industry and oil and gas E&P.

The opposition proceedings

Both applications were opposed by Spirit Solar Limited (SSL), which operates a solar panel installation company in Reading and the surrounding areas. The oppositions were filed on the basis of SSL’s UK trade mark registration of SPIRIT SOLAR and its alleged unregistered trade marks SPIRIT, SPIRIT SOLAR and SPIRIT ENERGY.

The oppositions were based on SSL’s allegations that SEL’s application would:

The Hearing Officer issued her decision in the consolidated proceedings in August 2019 (the ‘Decision’). In the Decision, the Hearing Officer partially revoked SSL’s UK registration to restrict it to goods and services relating to, generally speaking, solar panels and solar panel installation services (and associated services). The Hearing Officer decided that there was no likelihood of confusion between the marks on account of the respective goods/services being dissimilar (or similar only to a very low degree). The Hearing Officer also found that the applications were not filed in bad faith.

Despite the restriction of SSL’s registration, and the finding that there was no likelihood of confusion, the Hearing Officer decided that use of SEL’s marks would take unfair advantage of the repute/distinctive character of SSL’s registration and could be prevented under the tort of passing off in respect of SSL’s unregistered SPIRIT and SPIRIT SOLAR marks.

The appeal proceedings

There are two possible routes of appeal in respect of UK trade mark opposition decisions, either to the High Court or to the Appointed Person; the latter route does not allow for further appeal to any higher Court. SEL appealed the Decision to the Appointed Person and SSL cross-appealed. The appeals were heard in December 2019, with the appeal decision issued in March 2020.

With respect to the decision regarding section 5(3) (reputation), the Appointed Person disagreed with the Hearing Officer and found that the Hearing Officer was wrong to find that SSL’s SPIRIT SOLAR mark was known by a significant part of the relevant public. In the absence of a reputation, the opposition under section 5(3) could not succeed, and SEL’s appeal in this regard was allowed.

The Appointed Person also disagreed with the Hearing Officer’s decision that a link would be established between the respective marks and therefore allowed the appeal and dismissed the opposition under section 5(4)(a) (passing off) on the basis that there would be no misrepresentation.

Turning to section 5(2)(b) (likelihood of confusion), the Appointed Person upheld the Hearing Officer’s decision that the respective goods/services were dissimilar.

As a result of the appeal, the oppositions were dismissed in their entirety and an award of costs was made to SEL.

The appeal decision represented a very good result for our client, allowing it greater certainty with respect to its ability to use and register its mark in the UK. As reported by the popular IP blog The IPKat in April 2020, the odds of overcoming the Hearing Officer’s opposition decision on appeal before the Appointed Person are relatively slim, with only three (including SEL’s) of 21 appeals at the beginning of this year being successful. The case also highlights that a great deal of care should be taken when filing evidence in opposition proceedings to ensure that grounds which are evidence-dependent are fully supported.

The trade mark team at Mathys & Squire is experienced in assisting clients in both defending and prosecuting trade mark opposition proceedings before the UKIPO, as well as the EUIPO. Please get in contact with us if you have any potential disputes you would like to discuss.

In this article, written for The Pharma Letter’s Expert View section, Mathys & Squire associate Amy Nick examines the latest developments in artificial intelligence and machine learning in the biotech sector.

Developments in artificial intelligence (AI) and machine learning (ML) are playing an increasingly influential role in the biotech space, driving the formation of new partnerships between the tech and healthcare industries.

While big pharma is increasingly seeking collaborations with AI startups, major tech players such as Google, IBM and Microsoft are taking steps into the biotech space. A 2019 survey of pharmaceutical and biotech professionals by ICON found that 80% of respondents were using, or planning to use, AI technologies.

AI has already begun to make an impact. Food and Drug Administration approvals of AI algorithms have increased exponentially over the past few years, and the AI healthcare market is predicted to reach $6.6 billion by 2021.

The potential value of AI is already apparent in areas such as diagnostics, with research suggesting that diagnostic algorithms can match the performance of human experts in detecting diseases from medical images. The use of AI in other areas is more speculative: no AI-designed drugs have been approved yet, and few have reached clinical trials.

This is in part because validating AI/ML predictions remains expensive and time consuming, especially where this requires synthesising entirely new compounds or conducting large-scale clinical trials. Meanwhile, the margin for error in healthcare is narrow, and even the most advanced machine learning models can only be as good as the datasets they are trained on. Potential investors need to be convinced that the rewards are worth the risk.

IP protection

This will require a shift in approach to the creation and protection of IP. The patent system has long served as a mechanism for promoting and rewarding investment in innovation, but AI/ML innovation poses numerous challenges to this current system. As of yet, there is no consensus in the approach taken by national courts and intellectual property offices to resolving these, leading to uncertainty and inconsistency between jurisdictions.

One key issue raised by AI inventions is the nature of authorship and inventorship. In copyright law, it has long been debated whether a human creator is required for copyright to arise in a creative work.

This too remains unresolved. Some jurisdictions, such as the UK, award copyright for computer-generated works to the person responsible for facilitating creation of the work. In contrast, courts in the USA and Australia have denied protection to works with no substantive human input, although how these decisions will be applied to AI/ML remains to be seen.

AI and inventorship

Resolving the issues around copyright protection will be relevant for the protection of source code. However, AI is increasingly becoming capable of generating patentable output with diminishing human supervision. Here, inventorship is generally understood to reside with the person who developed the AI, which is seen as a ‘tool’ of the human inventor.

There are as yet no specific legal provisions addressing the notion of AI as an inventor, and most jurisdictions require the named inventor to be a natural person. Both the UKIPO and EPO recently rejected patent applications because the named inventor was an AI, despite acknowledging that the criteria for patentability were met.

The USPTO followed suit, arguing that US patent law limits inventorship to natural persons. Such refusals are unlikely to be the end of the issue. As unsupervised learning algorithms become more complex and their use more widespread, cases where human oversight over the final output are not sufficient to meet the legal criteria of human inventorship will bring this point back to the forefront.

Patentability requirements

Another question lies in the interpretation of patentability requirements. Computer programs are excluded from patentability in many jurisdictions on the basis that they can be protected by copyright, and similar restrictions apply to algorithms and mathematical models. Yet, it is not always clear how these patentability requirements should be understood in the context of
AI and ML. The EPO updated its Guidelines for Examination to include specific guidance on this for the first time in 2018, but the approach of many other patent systems remains unclear.

Broader questions also arise from the use of AI in biotech. Standards for inventiveness may need to be revised, as AI interprets and processes information in an entirely different way to a human inventor. Under current law, to obtain a patent an invention must not be obvious to a ‘person of skill’ in the relevant field on the basis of publicly available information. It is unclear how this should apply to AI-generated predictions.

AI-based approaches could conceivably identify drug candidates which are an obvious outcome of the application of AI, despite not being obvious to a human expert on the basis of the same information. The more commonplace AI becomes, the more difficult it may be to determine inventiveness exclusively by reference to a human inventor.

IP strategy

The IP strategy of companies in the biotech space will also need to evolve to meet new challenges. This is particularly true in the context of personalised medicine: as AI/ML-driven personalisation targets increasingly smaller patient populations, drug-makers may end up with treatments applicable to only a handful of patients, or even to a single person.

In such cases, traditional strategies protecting a specific composition of product or a particular treatment protocol are likely to be of little commercial value. Instead, companies will need to find ways of capturing value across all stages of the clinical development process.

In particular, protecting novel strategies for accelerating drug discovery, improving patient selection and enabling treatment optimisation, as well as innovative methods of data capture and the analytics tools underpinning them are likely to be increasingly important.

Legal, ethical and regulatory issues

The growing use of AI has given rise to a new set of legal, ethical and regulatory issues which must be addressed if innovation is to keep pace with technological progress.

A patent system able to adapt to these challenges will be key in allowing researchers to cooperate openly; without robust systems for protecting their IP, developers may choose to keep novel AI and ML processes trade secrets, depriving the research community of the opportunity to build on their progress.

Navigating these issues will be complex, requiring cooperation and discussion between the tech and pharmaceutical industries and the legal community, but this is vital in order for AI and ML to realise their full potential in healthcare.

This article was published by The Pharma Letter in August 2020.

It is important to note that as the UK leaves the European Union, EU trade marks (EUTMs) will still be valid in the other 27 member countries of the EU: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and Sweden.

However, the UK has entered a transition period (due to last until 31 December 2020), after which time registered EUTMs will no longer extend to the UK. These rights will be automatically ‘cloned’ by the UKIPO to create equivalent UK rights which will ensure continued protection and enforceability in the UK. Trade marks will continue to be protected and enforced in the UK. Although marks will be fully independent of the EUTM, they will still retain all the same dates recorded for the EUTM, and therefore will also be valid.

That being said, trade marks are vulnerable to cancellation by third parties if they are not used within the countries in which they are registered. For EU and UK trade marks, this cancellation period is five years from when the mark was entered on the trade mark register, or for any subsequent continuous period of five years. To prove use of a trade mark, samples of the way in which a trade mark is used are needed (i.e. marketing; promotional and advertising material; copies of web pages; invoices etc.).

Following the end of the transition period, it is worth noting that use of a trade mark only in the UK will, after a period of time, no longer be sufficient to keep an EUTM registered if attacked by a third party for non-use.

Whilst UK evidence will be valid proof of use for a period of time, this will gradually be given less and less weight and will only be acknowledged to show use in the period before Brexit. After this, evidence of use in at least one of the other 27 member countries of the EU (listed above) will need to be relied upon in order to prove use in the European Union.

Once the UK part of an EU registration has been converted into a fully independent UK mark, examples of the way in which a trade mark is being used in the UK will need to be kept in order to prove use in the United Kingdom.

For more information, and for advice on protecting your trade marks ahead of the transition period ending on 31 December 2020, get in touch with our Brexit team.