Tuesday 31 October 2017

Ending Soveriegn Immunity for Tribes from Inter Partes Review


U.S. Senator McCaskill has introduced a Bill that would remove sovereign immunity as a defense against Inter Partes Review of patents for Indian Tribes.  The Bill is refreshingly short.  It states:

A BILL

To abrogate the sovereign immunity of Indian tribes as a defense in inter partes review of patents.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. Abrogation of tribal immunity in certain patent claims.

(a) Definition.—In this section, the term “Indian tribe” has the meaning given the term in section 4 of the Indian Gaming Regulatory Act (25 U.S.C. 2703).

(b) Abrogation of immunity for purposes of inter partes review.—Notwithstanding any other provision of law, an Indian tribe may not assert sovereign immunity as a defense in a review that is conducted under chapter 31 of title 35, United States Code.

As previously discussed, the Bill is directed at Allergen’s recent attempt to use sovereign immunity of Indian Tribes to insulate patents from Inter Partes Review at the PTO by transferring its patents to the tribe in exchange for cash.  Notably, Judge Bryson (of the Federal Circuit), sitting at the trial court level, recently asked Allergen to demonstrate that its transfer is not a “sham."  Judge Bryson further found the Allergen patents to be obvious.  

Saturday 28 October 2017

When naming the company after yourself might make good business sense


For trademark professionals, dealing with a name usually means encountering an objection to registration on the ground that the surname is not inherently distinctive. The name of the game, at least from the point of view of trademark registration, is to either argue that the mark is not in fact an objectionable surname, or, even if it is, to show the name has acquired sufficient distinctiveness. But in so doing, we tend to ignore the threshold question: why adopt a surname as a trademark at all, especially if we know that it will likely encounter difficulties in registration? A brief report in The Economist, published on August 19th, discussed an article by Sharon Belenzon, Aaron K. Chatterji and Brendan Daley, entitled “Eponymous Entrepreneurs” and published in the American Economic Review, offers some interesting economic insights regarding eponymously-named entities, i.e., entities named after their owner (think of an enterprise such as Bloomberg).

In their article, the authors argue that eponymously-named enterprises result in better performance as measured by the return on assets (3% percent greater). The authors develop an explanation for this finding, centering on what they call signaling, noting that--
“[s]pecifically, eponymy creates a stronger association between the entrepreneur and her firm that increases the reputational benefits or costs of having the market hold a favorable or unfavorable impression of her ability (or of the quality of her firm). Consequently, high-ability entrepreneurs are more drawn to eponymy than are low-ability ones.”
Contrary to common perception—
“Our key assumption is that greater levels of the signaling activity (i.e., a stronger association between the firm and the entrepreneur herself) are not directly costly, but instead increase the reputational impact of successful or unsuccessful outcomes.”
Lying at the heart of their results is what kind of person is more likely to choose to put his or her name on an enterprise. An eponymous company name puts at stake the reputation not only of the entity, but the person behind it. This may especially so when a start-up is involved. What seems to be suggested is a bit of self-selection. People of higher ability are more likely to select an eponymous name for their company, and customers are likely to understand the signal in this manner, thereby viewing the company more favorably (at least for the intermediate term, although it seems to leave open the question of the long-term value as a positive market signal).

A second aspect of the study deals with the impact of whether the surname is common or unusual. Here, the authors found that while the link between performance and eponymy will be greater when an uncommon name is used, entrepreneurs with uncommon names will be less likely to adopt an eponymous naming strategy. It seems that having an uncommon name serves as “a barrier to entry” with respect to adopting the name for one’s company, but those who do so will be more likely to show even greater levels in the performance of their company. In effect, their signal to the market is stronger than that which is received from an eponymous company with a common name.

One further point merits attention, even if it is less central to the heart of the study. The authors find that 19% of the entities studied (consisting of a database of approximately 1.8 million firms) adopted an eponymous name. Interestingly, the authors are of the view that this is a “relatively uncommon” event. To the contrary, this blogger was surprised about how large this number is. From his anecdotal experience in the trademark registration world, the percentage of companies that seek to register an eponymous mark is much lower than 19%. It suggests that entrepreneurial companies are less likely to seek trademark protection of their eponymous company name. if that is the case, perhaps trademark practitioners need to do a better job of alerting their clients to the potential value of an eponymous company name.

Photo on lower left by Keith Cooper licensed under Creative Commons Attribution 2.0 Generic license

By Neil Wilkof

Friday 27 October 2017

Another Case of Pharma Weakening the Patent System (and University Technology Transfer)


The LA Times recently published an article, "UCLA’s Efforts to Patent a Costly Patent Cancer Drug in India Hurts the Poor, Critics Say,” concerning Pfizer’s drug, Xtandi.  Xtandi, which is used to treat prostate cancer, was developed (with U.S. government funding) and licensed out by University of California, Los Angeles.  Recently, in a royalty securitization deal, UCLA received more than $500 million in exchange for future royalty rights from Royalty Pharma.  Notably, UCLA is now seeking patent rights for Xtandi in India, which it states it has a contractual obligation to do.  The article states:

“What’s special about this case is the fact that the University of California is going against their own licensing policy by aggressively seeking a patent in India on this drug,” KEI Director James Love said.

That policy, as UCLA summarized in a statement to The Times, is “intended to facilitate all populations having access to medications and other products and services made possible by UCLA innovation.”

But UCLA also noted the “concerns about prescription drug pricing” among the activists and others and said it was willing to explore the problem further.

The school said “we are convening a working group to evaluate our approach to technology licensing in ways that benefit California, the nation and the developing world” while also continuing to give drug companies enough incentive to commercialize its discoveries, just as Medivation did with Xtandi.

In the meantime, the activists contend that a daily dose of Xtandi is selling in India for roughly 40 times a person’s daily income in that nation, which they called “excessive and shamefully unaffordable.”

Notably, the University of California is a signatory to the In the Public Interest: Nine Points to Consider in Licensing University Technology White Paper.  Point 9 of the White Paper states:

Consider including provisions that address unmet needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics and agricultural technologies for the developing world

Universities have a social compact with society.  As educational and research institutions, it is our responsibility to generate and transmit knowledge, both to our students and the wider society.  We have a specific and central role in helping to advance knowledge in many fields and to manage the deployment of resulting innovations for the public benefit. In no field is the importance of doing so clearer than it is in medicine.  

Around the world millions of people are suffering and dying from preventable or curable diseases.  The failure to prevent or treat disease has many causes. We have a responsibility to try to alleviate it, including finding a way to share the fruits of what we learn globally, at sustainable and affordable prices, for the benefit of the world’s poor. There is an increased awareness that responsible licensing includes consideration of the needs of people in developing countries and members of other underserved populations.

The details involved in any agreement provisions attempting to address this issue are complex and will require expert planning and careful negotiation.   The application will vary in different contexts.  The principle, however, is simple.  Universities should strive to construct licensing arrangements in ways that ensure that these underprivileged populations have low- or no-cost access to adequate quantities of these medical innovations. 

We recognize that licensing initiatives cannot solve the problem by themselves.  Licensing techniques alone, without significant added funding, can, at most, enhance access to medicines for which there is demand in wealthier countries.   Diseases that afflict only the global poor have long suffered from lack of investment in research and development: the prospects of profit do not exist to draw commercial development, and public funding for diseases suffered by those who live far away from nations that can afford it is difficult to obtain and sustain. Through thoughtful management and licensing of intellectual property, however, drugs, therapies, and agricultural technologies developed at universities can at least help to alleviate suffering from disease or hunger in historically marginalized population groups.

This appears to be another case of a company making a decision based on pricing that will likely undermine confidence in the patent system, particularly undermining technology transfer from universities.  Universities should exercise care in licensing to ensure that they have the final word on enforcement as well as patenting in other countries (see follow-up patenting noted by Professor Lisa Larrimore Ouellette).  Let’s not kill the "golden goose."  Perhaps UCLA can use part of the $500 million for a fund for people who need access to the drug in India. 


Wednesday 25 October 2017

OxFirst again: Free webinar on open source software, defensive patent pools and innovation


OxFirst is putting together what looks like yet another excellent free webinar, this time on the topic of "Open Growth: The Contribution of Open Source Software and Defensive Patent Pools to Innovation" The presenter will be Mr. Keith Bergelt, CEO of Open Invention Network, and the program will take place on October 31, 2017 at 2:00 pm, British Standard Time (make sure to check when your jurisdiction changes to winter time!).

There are few topics in the world of innovation and technology that are as dynamic as open source software and defensive patent pools. Open Source Software (OSS) is well-established in sectors as diverse as aviation, health, telecommunications, finance, publishing, education, and government. As nations increasingly rely on knowledge assets to grow, the adoption of OSS will have profound economic consequences. This talk identifies the mechanisms inherent to OSS that help fuel innovation in knowledge-based economies. In doing so, it conceptualizes the role of patents from an Open Innovation Paradigm and looks at the role that defensive patent pools can play in fostering collaborative exchange and open growth.

About the Speaker

Keith Bergelt is a pioneer in intellectual property finance. He is currently the CEO of Open Invention Network (OIN), which is a defensive patent pool and community of patent non-aggression enabling freedom of action in Linux. At OIN, Mr. Bergelt is responsible for coordinating the establishment and maintenance of a patent ‘‘no-fly” zone around Linux. As such, he is responsible for safeguarding an open and competitive landscape in key technology markets, such as back-office transaction processing and mission critical IT.

Prior to his extensive private sector experience, Mr. Bergelt served for 12 years as a diplomat with postings at the United Nations in NY and the American Embassy in Tokyo, Japan, where he was involved in the negotiation of IP rights protection in Asia. He holds a BA degree from Duke University, a JD from Southern Methodist University School of Law and a Masters of Business Administration degree from Theseus Institute in France.

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Friday 6 October 2017

New report commissioned by UKIPO on IP valuation market: Observations by the authors


In September 2017, the UK Intellectual Property Office (IPO) published a 148-page independent report, entitled “Hidden Value: A Study of the UK IP Valuation Market” that it had commissioned, and which was authored by Mr. Martin Brassell, Chief Executive, Inngot Limited and Dr. Jackie Maguire, Managing Director, Firm Advantage Limited. Mr. Brassell and Dr. Maguire have kindly provided IP Finance with a number of key observations based on the report. Interested IP Finance readers are invited to consult the report in its entirety (see below).

“Our study has provided an opportunity to investigate some important issues in the area of IP valuation. Why don’t more companies havean awareness of what their intangible assets are worth? What drives them to find out? What methods can they use to understand their asset value, and who helps them? Lastly, what can be done to encourage more firms to take IP value seriously?

We were unsurprised to discover that few, if any, managing directors wake up in a cold sweat at night worrying about how much their IP is worth. As previous research has indicated, many companies do not think of intangibles as being assets at all in the conventional sense. Even if they decide to capitalise the cost of developing or acquiring intangibles, their accounts sometimes appear to suggest that these assets are declining in value as they are being written down, even if their business contribution is in fact growing.

We found that the drivers for IP valuation are very specific and heavily transaction-oriented. We identified 22 distinct reasons for valuing IP, which fell into three categories. The largest number of drivers, accounting for the majority of IP valuation activity, relate to specific needs, such as transfer pricing, post-purchase accounting, preparation for M&A activity, estimating damages in litigation or (occasionally) insolvency. There is some IP valuation activity that is done as a positive response to specific opportunities, such as licensing, collaboration or raising investment. Finally, there is a small but growing number of occasions where there are new applications for IP that require value to be better understood – and this is where a specific opportunity for improved awareness appears to lie.

From the drivers that can be measured, it is unlikely that more than a few thousand IP valuations are currently being conducted annually. The valuation providers fall into two broad categories – large accounting firms and specialist ‘boutiques’ – with a very wide variation in costs, depending upon the complexity, purpose and origin of the valuations. Cost does not emerge as a barrier, as there is a range of services being provided addressing a range of needs. However, valuation providers confirmed a high degree of reliance on introductions or referrals from other professionals, which suggests that people only tend to value their IP when someone they respect tells them it is necessary to do so.

All of this points to an insufficient appreciation of the benefits of being able to measure IP value and thereby manage it better. More educational outreach, better access to information and meaningful testimonials could all help to address this situation over time; but the obvious question that remains is, if the benefits were more compelling, would not more businesses choose to value their IP? Realistically, in the busy world of the SMEs that form the overwhelming majority of UK firms, some pretty compelling incentives will be needed to make business leaders sit up and take notice when they have so many other competing priorities.

From the research that we conducted, it seems that these incentives might come from one of two directions. The first is strategic reporting in its various forms. It has long been apparent that financial statements miss out an important source of value creation in companies (for the reasons noted above); more attention is now being paid to filling these information gaps with insights on how a company is innovating and the assets it is producing as a consequence. Also, the most recent Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) within generally accepted accounting principles (UK GAAP) is beginning to have some impact on accounting awareness of intangibles.

The second direction concerns access to finance, particularly debt, which remains the primary source of business funding. At present the regulations that are designed to ensure capital adequacy do not look kindly on intangible assets, because there is no accepted risk weighting for them. However, there are signs that lenders are beginning to take steps to obtain a better understanding of these assets and their business contribution. Of course, the main concern for a lender when dealing with any asset class is ultimately related to the value that it can recover if the asset needs to be sold to repay a loan. However, if the trend continues to find new ways forward to apply intangible asset value, IP assets could become more concretely associated with money in the minds of SMEs, which would certainly increase the appetite for IP valuation."

For the full results of the research and interviews with over 250 industry players see here.

Tuesday 3 October 2017

UKIP - Political Parties, Branding and Trade Marking.

Yesterday I wrote this piece over on Afro-IP on UKIP’s new logo picking up on the weekend controversy of it being remarkably close to the English Premier league logo, and concluding that trade mark rights are probably best placed of all the potential IP rights available to the FA to stop it. To further substantiate the point I have since come across two European decisions on the similarity of lions which I wanted to share with you together with an observation that political parties ought to pay more attention to the protection of the symbols that they use.


UKIP and the UKIPO have two things in common - the similarity in their acronym and the fact that they have a bent toward national rights but that is where it ends. UKIP have no registered trade mark rights, perhaps for good reason. Their new logo would likely be opposed by the FA and depending on the current practice of the Registry their old logo may attract an objection because it features the pound currency sign so prominently. 

By contrast the Labour Party, The Conservative Party and some others have been actively registering their symbols as trade marks. Their level of activity is, however, relatively low; a few trade marks here and there many of which have been allowed to lapse. Nothing in comparison to the level of expense that their campaigning deserves. Stateside a cursory search of the USPTO Register reveals much the same. The Republicans and Conservatives are low on the polls when it comes to protecting their campaigns using trade marks. This is in stark contrast to the level of trade marking President Trump is renown for in his normal business affairs. Why is this so?

Politics is mostly about winning votes. Winning votes requires communication of manifestos and persuasion. The symbols used by politicians and their parties are incredibly important and as carefully chosen as any brand, perhaps more so given the significant potential for public ridicule or offence and on the upside, their unique ability to encapsulate their message through symbolism. Trade marks are the means of protecting such symbolism. UKIP’s adoption of a lion so close to that of the FA is a glaring admission of the value of brands to political parties, even if they deny it.

Closer to home, a decade ago, a breakaway of the African National Congress - Congress of the People (COPE) was taken to task, initially on trade mark grounds, for their adoption of what they ANC regarded as a symbol which belonged to them. You can read about that here.  This illustrated not only the importance of trade marks and symbolism but also the risk of adoption, and injury to "market share" by an incumbent. In other parts of Africa political parties have been sued for using lyrics of well known songs and even infringing patent rights in ballot boxes; not strictly a branding dispute but close enough to illustrate that political parties face the same risks as any business when it comes to intellectual property rights in general.

Another indication of the lack attention paid to brand protection for political parties is the Nice Classification search feature on WIPO’s website which shows no hits for “politic” or “campaigning”. The USPTO filings illustrate protection in class 35 for campaigning as a promotional activity for political parties whereas filings in the UK tend to focus on class 36 for fund raising and class 41 for events, together with a range of classes protecting marks applied to badges, posters and clothing. For those countries that have not adopted service marks, marks of political parties are filed in classes 9 and 16 for the usual reasons.




Getting back to UKIP, the illustrations above are those of successful lions (Lonsdale v Puhin Deng* and ING v Daniel Cekal) who have protected their market share or hunting grounds, so to speak, based in similarity. One would think that that the FA would likely be successful too against UKIP. It is worth noting though that the registration of the lion on its own i.e. not with the wording accompanying it, makes the task of the FA significantly easier. Put differently, if the FA are setting the standard for good trade mark counsel, then a political party should pay much the same attention to their branding from a governance perspective, if nothing else.

Posted by Darren Olivier

*OPPOSITION No B 1 718 249 and OPPOSITION No B 2 520 529