Its always exciting whenever competition law meets intellectual property law so I invited my colleague and friend Conor Maguire expert on all things EU and Competition to write a little note on the proposed revision to the European Technology Transfer Block Exemption Regulation which offers a safe harbour from competition law for agreements which otherwise might infringe Article 101 of the Treaty on the Functioning of the EU. This is the second revision in the history of exemption and the updates reflect what the Commission has learnt from the implementation of the current version.
For those of you who don’t know Conor and his company Brussels Matters I would heartily encourage you to sign up for his discussion on 13 March in which some of the senior officials from the European Commission discuss the new revision for the first time with a select audience of professional advisers from around the world. You can attend in person in Brussels or dial in, in each case for a very reasonable fee.
According to Conor:
On 20 February, the European Commission’s DG COMP launched a second public consultation as part of the review of the EU’s antitrust rules governing the licensing and use of intellectual property, the Technology Transfer Block Exemption Regulation (‘TTBER’).
Following the first consultation in 2011-’12, DG COMP is now inviting comments on the proposed new TBBER and draft new Guidelines.
Against the backdrop of DG COMP’s current cases in innovative industries with economy-wide significance, in many important areas if adopted the new proposals would significantly tighten the application of the EU antitrust rules by subjecting more IP licensing practices to scrutiny and limit the types of agreements that enjoy automatic (so-called ‘safe harbour’) protection under the existing TTBER regime.
By restricting the protection from the sanctions of the EU antitrust rules offered by the existing TTBER regime – which includes the legal unenforceability of the offending parts of the underlying IP licensing agreement – the proposed new TTBER regime could be particularly problematic for small innovative rights holders licensing to much larger IP users.
In other aspects, the proposed new rules would introduce welcome new levels of legal clarity for particular uses of IP, such as the collective licensing of certain IP rights via ‘technology pools’ to third-party licensees.
The consultation documents – including the proposed revised TTBER and new Guidelines – can be found here
A detailed memo setting out the key proposed changes – including on settlements and technology pools – can be found here
The deadline for responses to the consultation is 17 May 2013.
As part of the consultation, for the first time DG COMP’s TTBER review team will discuss the proposed new regime in detail with an international audience live from Brussels on Wednesday, 13 March 2013 – details at www.brusselsmatters.eu
The European Commission-hosted Competition Forum that took place in Brussels yesterday was quite an event.
Italian prime minster, Mario Monti, gave the keynote address, which was amply reported in the Financial Times so I won’t go into it here. Other speakers and panelists included, Cisco CEO John Chamber, US ambassador to the EU William Kennard, Competition Commissioner and Commission Vice President Joaquin Almunia, Angela Merkel’s economic adviser.
You get the picture: serious power brokers and policy makers in the EU and US.
The event consisted of three sessions:
- The State in the global economy
- Competition, innovation and the Single Market
- The Single Market for financial services and competition policy
There were several strong themes that ran through the programme. The first was the unemployment crisis in Europe. Ambassador Kennard described it as a humanitarian crisis that was driving talented individuals to leave Europe in search of opportunity, particularly in the US. Kennard urged Brussels policy makers to go and personally interview some of these people as they leave to find out what is in their heads. To solve this problem there needs to be a radical acceleration of the Single Market project, particularly in telecoms where there continues to be 27 markets with 27 regulators and an inefficient use of spectrum. John Chambers identified this as a major barrier to growth. Chambers, whose command of statistics was impressive, pointed out that the next internet involved “digitisation of everything” and that a doubling of broadband penetration generated an additional 0.6% GDP.
A second issue revolved around SMEs. The speakers acknowledged that innovative SMEs would be the only source of significant employment growth in the future and therefore there needs to be efficiency in the market which helps inefficient companies exit and which finances the establishment and growth of innovative companies. The CEO of Belgian mining giant, Umicore, felt that state aid should not be used to subsidise consumers pointing in particular to the distortions this caused in the photovoltaic and electric car sectors. Some of the panelists from the financial sector pointed to the need to exercise care when designing new financial regulations that SME financing through debt or equity would not be impeded. Again the depth of the US market for SME financed was contrasted with the lack of dynamism in Europe.
There was an inchoate discussion of intellectual property and its role. John Chambers called it as a no brainer since in his opinion there is a 1:1 correlation between R&D investment and economic growth five years later and that there needs to be an intellectual property system to protect the results of R&D. He also pointed out that his company is seeing recovery in the European countries that are highest ranked by the World Economic Forum for innovation. MEP and patent attorney, Sharon Bowles, caused a little murmur of controversy when she opined that there should be no injunctions for unpractised patents and that there should be a register of patent coverage of products.
Competition law involves the intersection of law and economics two topics that would challenge the wakefulness of most when you throw in intellectual property you get a nerdfest extrordinaire. However given the importance of the issues debated yesterday it behoves us all to understand and engage with the issues concerning the financing of business, creation of a true single market with lowered barriers to entry and the challenge of reducing unemployment and skills leakage in the EU.
We are delighted to announce that journalist Gavin Sheridan has achieved a landmark access to information judgment in Ireland’s High Court. Mr Sheridan is a journalist and activists who runs the transparency blog TheStory.ie.
Under European Law a wide range of public bodies are obliged to make information on the environment available to the public on the basis that access to information is one of the key elements of transparent decision making in a democratic society (the other’s being public participation in decision making and access to judicial review or equivalent).
In 2010 Mr Sheridan requested access to environmental information held by Ireland’s bad bank, NAMA. NAMA refused access on the basis that it did not come within the scope of the definition of a public body under the Irish implementing regulations. The decision was appealed internally and subsequently to the Commissioner for Environmental Information who decided that NAMA was a public body and so should release environmental information. NAMA appealed this decision to the High Court of Ireland where judge Colm Mac Eochaidh today upheld the Commissioners 2011 decision.
This decision is the first judicial review of the implementation of the access to environmental information directive in Ireland and is a victory for advocates of transparency and access to information rights. NAMA does not come under Irish Freedom of Information law and although there are proposals to include it in the a draft bill, there is a strong possibility that NAMA will be offered special exemptions to cover a broad range of information that it holds.
New Morning IP managing director, Fred Logue, acted as a pro-bono consultant to Mr Sheridan during his appeal to the Information Commissioner.
The judgment is currently unavailable but we will link to it as soon as it is released.
See below for links to coverage of the decision in the Irish media
Is cloud computing going to be the next litigation battleground?
Well this presentation seems to think so.
It says that cloud has almost all the same characteristics as the mobile space where there have been intense patent litigation battles. The author analyses the market size and the number and scope of patent claims in the sector and asks us what we think?
Well we think that cloud patents are important, many massive scalable business are being built in the cloud and it is a matter of time before patent owners come looking for deals.
This is a concern for Irish companies. But you wouldn’t think it. Ireland holds itself out as one of the leading countries for cloud R&D and business yet Irish companies by and large have virtually no patents. This means that when these companies grow to be internationally significant they will face a crisis when they discover that they are infringing other patents.
In January 230 patent applications and patents were published or issued to Irish applicants at the USPTO, EPO and WIPO. We analysed these publications to get a glimpse of the type of applicant and the range of technology which is being invented by Irish based applicants. Given the benefits of foreign direct investment in Ireland a large proportion of the invention owned by Irish applicants comes from this sector and we can see clearly a range of both overseas and domestic inventions being assigned to Irish based applicants.
In summary for January 2013:
- 230 published applications or patents issued to Irish applicants through USPTO, EPO and PCT
- The top three assignees: Accenture Global Services, Skype and Zamtec
- Main technology sectors (49% of total): Medical/Veterinary Science, Computing and Electric Communication
- Third level institutions accounted for 23% of Irish invention published this month
- 38% of publications were Irish originating inventions
In our last post we looked at how data on global R&D spend and number of patent applications could lead to seemingly anomalous conclusions being drawn including that on a per capita basis Luxembourg, Barbados, Liechtenstein and Switzerland were the greatest generators of European patent applications in 2012. Or that the Cayman Islands and Bermuda were home to 30 of the world’s greatest R&D spending corporations.
We have been tracking patent filing dynamics in Ireland for some time now and have noticed that at least in terms of US, PCT and EPO over 50% of publications assigned to Irish applicants do not cite any Irish inventors.
A commentator surmised that some of the numbers are distorted due to geography or by the size of the country which may have one or two big companies. So based on the recent EPO patent league table and the comments on our last blog we decided to probe this further.
We looked at granted US patents in 2012 and counted the number of grants for a selection of countries and calculated the percentage of those grants that included at least one resident inventor.
The results of this calculation for selected countries are summarised in the graph below.
It seems to us that there is indeed an effect, industrialised countries such as the USA, Germany, the UK all have in the region of 90% of grants with locally resident countries whereas less industrialised but perhaps more “financialised” countries including Ireland have a significant portion of US patents granted to residents but invented elsewhere.
Switzerland sits somewhere in the middle since it has a highly developed industrial base but also hosts many companies established for tax optimisation purposes.
The data for Luxembourg and Liechtenstein may be somewhat distorted due to their small size and probability that many workers in these countries live in neighbouring countries. Barbados is also a special case since its output is dominated by a single well known US medical device manufacturer which brings it into the top tier of patent filers in the world.
Ireland is interesting since Irish resident inventors actually invented 40% more patents assigned to US companies than were assigned to Irish companies in 2012. A reflection of Ireland’s attractiveness for R&D focussed foreign direct investment.
Measuring R&D activity is notoriously difficult all the more so when measurement seek to quantify R&D activity along geographic lines. The reason for this is multinational corporations incorporate headquarters and subsidiaries in many countries and it is virtually impossible to assign aggregate R&D data within a large multinational to individual countries.
Two recent league tables brought this point home.
The first was the European Commission’s 2012 Industrial R&D Investment Scoreboard which places Ireland 10th amongst the 27 EU member states for R&D spend in 2012. In an Irish Times article Chris Horn pointed out some anomalies in the figures including the influence of corporate HQ migration on the numbers.
For example Ireland is home to 14 of Europe’s top 1000 R&D performing companies and 8 of the world’s top 1500. However of the 14 companies that appear in the 2012 list the top three are Seagate, Covidien and Accenture which are hardly what the public would consider to be Irish companies. And indeed these three alone account for more than 50% on the Irish R&D spend on the basis of corporate domicile. In fact 8 of the 14 companies accounting for almost two thirds of the spend are in this category.
If we take these companies out of the reckoning it is clear that Ireland moves far down the list of top R&D performing countries in the EU.
On the other hand Horn points out that R&D spend by Microsoft at its Irish operation which employs many thousands of skilled researchers is accounted for as US R&D due to Microsoft being head-quartered in the USA.
On a global scale the picture is the same with only two of the eight Irish entries being Irish originating and who account for a mere 15% of the R&D spend of Irish domiciled companies. Corporate relocations are even more apparent in other countries with the Cayman Islands and Bermuda being home to 22 and eight of the top 1500 R&D performing companies in the world.
The second league table that caught our eye is the top applicant countries in the European Patent Office in 2012. Ireland is the 26th most prolific applicant.
IAM magazine pointed out some interesting trends when the number of applications is quantified in terms of population per application. Under this measure Ireland moves to 20th among the top 50 in the world in between Canada and France in the rankings.
However we made the following observation on the blog.
If you do the exercise on the entire top 50 list and start to look at inventor residence some interesting trends emerge.
Firstly if the entire top 50 list is recategorised by population per application the top five jurisdictions are Liechtenstein, Switzerland, Luxembourg, Barbados and Finland. Interestingly the top four have quite friendly tax regimes. While one cannot draw conclusions about tax effects from this data alone there is a strong suggestion that tax does play a role in patenting dynamics around the world.
Ireland is a good example and is a jurisdiction where we track patent publications in some detail. It comes 26th by number of applications and 20th by population per application putting it between Singapore and Canada on the latter measure.
Obviously we don’t have application data for 2012 but we can look at the number of European patents granted to Irish resident applicants in 2012 and we find that of these only 45% had any Irish resident inventors. There is strong evidence based on the identity of the applicants to support the assumption that the 55% of patents with Irish resident applicant but foreign resident inventors reflect a tax driven assignment of patent ownership. If we strip this proportion out of the equation, Ireland moves back down the list to 26th with roughly 16,000 persons per application putting it between New Zealand and Cyprus.
It is clear that corporate structuring is a significant factor in many measures of R&D activity and that policymakers and commentators need to take care when quoting and using R&D statistics as a measure of the success or otherwise of incentives and other policy measures directed at innovation and R&D.
The Irish newspaper industry has unwittingly created a major social media storm through the efforts of its collection society Newspaper Licensing Ireland Ltd. to collect royalties from websites that link to its members content. The Newspapers’ cause wasn’t helped when they demanded licensing fees starting at €300 for up to five links from a womens’ charity which linked to newspaper reports concerning their work.
The demand for royalties for linking lead their solicitors to declare 2012 “the year Irish newspapers tried to destroy the web”
New McGarr Solicitors Blog Post. 2012: The year Irish Newspapers tried to destroy the webmcgarrsolicitors.ie/2012/12/30/201…
— Simon McGarr (@Tupp_Ed) December 30, 2012
The story took legs and created a maelstrom of comment, some informed but mostly uninformed.
@joeconor I represent The Irish Times editorial perspective, and I agree that links are an integral part of the circulation of ideas online
— Hugh Linehan (@hlinehan) December 31, 2012
@joeconor AFAIK there have been issues with clippings services etc, where the law has said the originators should be compensated.
— Hugh Linehan (@hlinehan) December 31, 2012
@joeconor Personally (again) I find the assertion of copyright in links… debatable. It does appear to be the law currently though.
— Hugh Linehan (@hlinehan) December 31, 2012
@hlinehan Parse that for me. Are you saying there appears to be a law, or that NLI appears to think there’s a law?
— Gerard Cunningham (@faduda) January 4, 2013
@faduda The latter, although I’m not sure ‘thinks’ is the right word. ‘Asserts’ might be better.
— Hugh Linehan (@hlinehan) January 4, 2013
— Hugh Linehan (@hlinehan) January 4, 2013
In the end, the Irish Times backed down and the newspapers were forced to clarify their position and within a week had published a statement on their website:
Statement on behalf of Newspaper Licensing Ireland Limited regarding use of newspaper content
For personal use: NLI never requires or requests a licence for personal use of newspaper content.
For commercial use: NLI does not require a licence from any organisation which only displays or transmits links to newspaper content. A licence is required when there is other reproduction of the newspaper content, such as display of PDFs or text extracts.
So were the newspapers legally right to assert copyright in a link? Gut reaction says no but my friend and colleague Linda Scales who knows a thing or two about Irish and European copyright law says maybe.
According to Linda there are two cases in the UK Supreme Court and the European Court of Justice on this issue and until they have ruled the situation concerning linking and infringement is not at all clear. According to Linda:
A lot of heat has been generated by this issue in the last couple of weeks, arising from a demand by Newspaper Licensing Ireland (NLI) that the charity Womens’ Aid pay for links to newspaper content displayed on its website, and the outrage of their solicitor Simon McGarr who blogged about it on December 30th under the headline “2012: the year Irish newspapers tried to destroy the web”.
The NLI published a clarification of their position on January 4th. They say first of all that they only seek licences on behalf of their members (Irish national newspapers) for links provided in a commercial context. They do however maintain that linking does infringe, a position they argued in their submission to the Copyright Review Committee (due to report sometime soon, hopefully).
Are they right? Well, yes and no. There is a whole panoply of case law in a variety of different jurisdictions going in both directions. It is clear that linking can infringe, but that it does not by definition infringe. As linking is integral to the working of the internet, clearly it’s a major question. The case law proves that it does not have a single, or a simple answer.
My point here is simply to say that we should not get too exercised about it right now.
So we will have to wait and see what happens in the UK and Luxembourg before resolving this issue. Meanwhile there is enough to keep Twitter users busy for quite some time.
— Neil Brady (@neilpbrady) January 8, 2013
In December, 211 patent applications and patents were published or issued to Irish applicants at the USPTO, EPO and WIPO. We analysed these publications to get a glimpse of the type of applicant and the range of technology which is being invented by Irish based applicants. Given the benefits of foreign direct investment in Ireland a large proportion of the invention owned by Irish applicants comes from this sector and we can see clearly a range of both overseas and domestic inventions being assigned to Irish based applicants.
In summary for December 2012:
- 211 published applications or patents issued to Irish applicants through USPTO, EPO and PCT including 3 US design patents
- The top three assignees: Accenture Global Services, Skype and DigitalOptics Corporation
- Main technology sectors (47% of total): Medical/Veterinary Science, Computing and Electric Communication
- Third level institutions accounted for 21% of Irish invention published this month
- 41% of publications were Irish originating inventions
On here we think designs will become more and more important and that in many respects 2013 could be the year of design IP as companies at home and abroad grasp the value inherent in their designs. Of course the fashion industry has long known the value of design IP and indeed the Community unregistered design right had its origins in helping the fashion community protect the design element of its products, in particular those with a short life span as is common in the fashion business.
In Ireland few designs are registered by Irish companies and on here we don’t pay as much attention as we probably should to the dynamics of design registrations by Irish applicants and inventors.
However because US design registrations are listed on the same database as US utility patents we get to see them the most often since they often appear in searches of the US patent database. Nevertheless Irish applicants file surprisingly few design patents in the US given that the filing process is relatively cheap and quite straight forward.
Therefore we were pleasantly surprised to see three design patents granted to Irish applicants by the USPTO in December. While we don’t normally comment on individual applicants on this blog, we couldn’t let the December design grants go un-blogged since two of them were designed by none other than Karl Lagerfeld, the well known German designer and creative director for Chanel.
Now we are by no means experts on the fashion industry but are reliably informed that Tod’s is well known for high quality shoes and handbags, not doubt many of our readers are well aware of this having being on one side or the other of a high value transaction involving luxury goods over the Christmas season.
Tod’s is a prolific filer of US design patents mostly for shoes and handbags but this is the first time it has done so as co-assignee with an Irish company and the two patents in question are the only Tod’s design patents naming Lagerfeld as inventor.