USPTO and WIPO on ADR for SEP Disputes

The USPTO has announced a partnership with WIPO concerning utilizing alternative dispute resolution for SEP disputes.  The Press Release states:

The United States Patent and Trademark Office (USPTO) and the World Intellectual Property Organization (WIPO) today agreed to undertake joint efforts to facilitate the resolution of disputes related to standard essential patents.

Standard essential patents, or SEPs, are patents that have been declared essential to a given technical standard. As part of the standards-setting process, patent owners may agree to license SEPs on fair, reasonable, and nondiscriminatory (FRAND) terms. Standards touch all aspects of modern life and include video compression, wireless communication technologies, computer connection standards, automotive technology, and more.

“International standards, and the role of patents that are essential to them, play an important role in promoting a strong national and global economy,” said Under Secretary of Commerce for Intellectual Property and USPTO Director Kathi Vidal. “The USPTO is grateful that Director General Tang recognized the USPTO’s leadership role in advancing discussions on standard essential patent policies. Our work with WIPO underscores the USPTO’s view that SEP policy is an international issue of international importance. This agreement will leverage existing resources at both the USPTO and WIPO, supporting options to enhance the efficiency of licensing of standard essential patents, and promote resolution of disputes related to those standards.”

The signing of the memorandum of understanding occurred during a meeting this week between Director Vidal and WIPO Director General Daren Tang on the sidelines of WIPO’s General Assembly in Geneva, Switzerland.

Under the terms of the agreement, the USPTO and WIPO will:

• Cooperate on activities that will lend efficiency and effectiveness to the resolution of disputed standard essential patent matters by leveraging existing WIPO Arbitration and Mediation Center and USPTO resources, and
• Engage in stakeholder outreach to raise awareness of the services provided by the WIPO Arbitration and Mediation Center through joint USPTO-WIPO programs.

The agreement will continue in operation for five years from the date of signing.

“We appreciate all the work Director General Tang and WIPO have done in this critical area. We look forward to a successful collaboration and engaging stakeholders to ensure we shape dispute resolution that will facilitate participation and implementation of standards by all innovators including small to medium-sized enterprises,” remarked Director Vidal.

“Alternative Dispute Resolution (ADR) has time and again demonstrated its value in the efficient and timely resolution of commercial disputes. In the last few years, the WIPO Arbitration and Mediation Center has been facilitating the resolution of SEP-related disputes and the new collaboration with the USPTO is an exciting development which will contribute to improving the efficiency of standard implementation,” noted Director General Tang.     

Philip Morris claim against Australia for Tobacco Plain Packaging Dismissed

The issue of plain packaging for tobacco is a controversial one, which not only has the obvious public health issues, but an additional dimension relating to the value of intellectual property rights. If a company cannot use its trade mark to promote its product, then what value does that brand actually have? It's a discussion that has blown up several times at the World Trade Organisation Council and the WIPO magazine reported on the dismissal by the High Court of Australia of the challenge by several tobacco companies to Australia's law introduced in 2012.

Philip Morris International's Asian operation, based in Hong Kong, has challenged the law at the Permanent Court of Arbitration under the Australia  / Hong Kong Agreement for the Promotion and Protection of Investment. PML Asia argued through their Australian counsel that Australia's plain packaging legislation virtually "eliminate Philip Morris branded business by expropriating its valuable intellectual property". The brief continues that "... the plain packaging legislation bars the use of IP on tobacco products and packaging, transforming PML form a manufacturer of branded products to a manufacturer of commoditised products with the

consequential effect of substantially diminishing the value of PM Asia's investments in Australia". Essentially the argument is that by requiring companies to use plain packages in Australia, the value of the trade mark is substantially diminished, although it's unlikely to be "billions" as a report in the popular UK newspaper, the Daily Mail, reported. Australis Government's Attorney General has an informative website about the case setting out the government's case here.

The claim was dismissed on 17 December 2015 on procedural grounds. The Court of Arbitration concluded apparently that it did not have jurisdiction to hear the case. The full decision has not yet appeared on the website as it is apparently being redacted to remove confidential information. Philip Morris predictably issued a press release noting that the case was dismissed on procedural grounds and noted that there was nothing ... that address let alone validates plain packing in Australia or elsewhere".

Other challenges to Australia's law are still ongoing. Ukraine has challenged the law at the World Trade Organisation, but that dispute has been suspended to try and reach a mutually acceptable solution.

The decision to dismiss Philip Morris' case against Australia may have been done on procedural grounds - and it will be interesting to read the decision when it is published (can anyone send us a copy?), but already other countries are looking at compelling plain packaging for tobacco products and are apparently encouraged by the decision.

Which brings us back to the fundamental question: what rights do IP holders actually have if they can no longer use their registered trade marks on their products. Is this a destruction of "brand value" by government action, which could and should trigger compensation claims? As a non-smoker, this blogger is more than happy with the decline of smoking. As a trade mark lawyer and IP consultant he is concerned about the implications of the decision. It's established law in many countries that a government may only take private property into public use if a compensation is paid ("eminent domain" in the US; "compulsory purchase" in the UK and Australia; "Enteignung" in Germany). The existing laws are generally based on the idea of expropriating physical property - can they (or should they?) be adapted to take into account government restrictions on the use of a registered trade mark.