Global patent concerns for 2016 e book

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Global Patent Concerns For 2016

10 PATENT INDUSTRY LEADERS PROVIDE THEIR INSIGHT

Contents


3 & 45 & 67 & 89 10, 11&1213, 14 &15

16 & 1718, 19 &20

21, 22 & 23

Strategy

Practical Management

Global Patent Systems

SME’s

Open Innovation

Europe

Monetisation

Licensing

Unitary Patent Systems

Strategy

What do you think has been the reason behind the board of directors being awakened to the strategic value of IP and in particular the need for and value of patent assets within their companies in 2016?

If an industry, like automotive, enters a phase of faster innovation cycles motivated by E-mobility, autonomous driving and connectivity more opportunities for disruption in the established supply chain will occur. The leverage of IP is just bigger in such an environment and the board of directors is well aware of that. The role of the CIPO and the work of the IP Department will face a scrutiny, but also the opportunities for major changes aren’t better than now.

Do you agree with the statement ‘The role of the CIPO is to strategise and operate at the intersection of IP, technology and business. Commercial focus is key as the CIPO must understand where IP fits into the business strategy and must align an IP strategy with the overall business strategy,’ or is there more to the role than meets the eye?

I agree, as a team member within R&D management I can provide valuable input to develop and protect the technical knowledge pool of the company, be it within our own work force or in cooperation with customers, suppliers and development partners. Moreover I do see my role as CIPO not only as part of the legal profession advising on IP matters, but also as a part of asset management. Intellectual assets are better managed if implicit knowledge is turned into explicit knowledge as described in invention reports and filed as a patent application.

Peter Berg, Chief IP Counsel, Draexlmaier Group 20 years as in-house IP Counsel for a broad spectrum of electrical and mechanical engineering businesses in telecom, automotive, automation, food processing and packaging, including 14 years managing various IP functions led to a rich experience in aligning IP portfolios with the particular business needs and competitive environment. Peter specialized in the management of large IP portfolios and the transactional part of the IP value chain, particularly licensing, M&A and litigation. Peter is European and German Patent Attorney and in charge of IP at Draexlmaier, a premium automotive supplier for interior parts, wiring harnesses and electrical/electronic components, previously Head of IP at Tetra Pak and Chief Licensing Counsel at Siemens AG. As a frequent speaker at IP conferences on the development and management of in-house IP departments and a restless coach for R&D teams in 15+ countries throughout Europe, but also in the US, Japan and China, he contributes to the efficient creation and fair use of IP in a corporate and industry context.

Why is it important to be proactive when you’re tasked with proving the importance of IP to the rest of the company?

If the external pressure on a company to act on 3rd party IP right assertions or to defend a certain USP is still low, management might struggle to define the scope and needed level of activities of the IP Department. That requires a proactive approach to proof the value of the existing IP and to encourage more investment into a larger portfolio. Furthermore, in a changing environment we need to think well ahead

Ramya Nair

Peter Berg

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PB

RN

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Peter Berg


3

Draexlmaier Group’s Peter Berg on the importance of IP & the responsibilities of the CIPO

What are the primary responsibilities of the CIPO?

Depends on the internal and external environment: B2B vs. Consumer focus, technology vs. brand based or the existence of other roles within company which are complemented by the CIPO.The core of the role is certainly to build a function to develop and maintain a strong portfolio of IP rights to further the specific IP goals of the company which is a mixture of assuring design exclusivity, freedom-to-operate, fostering an innovator image and partnerships. At times a strong IP monetisation aspect might be added.

What methods do you use to prove the importance of IP to the rest of the company? Is it working?

We build on a broad and deep understanding of IP by all stakeholders. So the IP Department reaches out not only to R&D, but also to Sales, Purchasing, Marketing, Finance. That understanding requires some training and provision of IP information, but even more daily exposure to IP matters. The value of IP can only be lifted by joint efforts. Much can be done with the existing IP budget. If IP activities need to intensified a lot, I feel better if past success stories and a business case provides factual support for an increased budget.

PB

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RNto build the IP position today, we might need to have in 5 to 10 years time. How do you get there with the IP Department?

This is a team sport and it’s all about competence development within the team. In order to grow with the goals we identify any gaps regarding our competences. Service providers partnering with us get us quick solutions, so we try to see what is new on the market and partner with the best. Furthermore, we aim to update our tool landscape for using our resources effectively. But in the long run, developing our internal capabilities, be it by growing the individuals or by adding new team members, or team capabilities by efficient processes and clear roles and responsibilities is paramount for our success.

Peter will be speaking on Day 1 of the GPC conference on Competence Development

within the IP department.

Service providers partnering with us get us quick solutions, so we try to see what is new on the market and partner with the best

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60+

200+ 14

12 20+

Expert Speakers

Participants Interactive discussion

tables

Tailored streams

Countries represented


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Practical Management

Why is pruning so vital in any enforcement strategy?

Pruning is essential in keeping both an updated portfolio and keeping in contact with the people in the organizations (especially big companies, corporations, conglomerates etc.) being responsible for sales, operations, maintenance, customer service, sometimes even R&D (patent applications easily last more than 5 years before grants, and people may have shifted in the R&D organisation several times during such a period).

Typically the IPR department, the IPR responsible or the management of the company will therefore have seen many things coming and going from the time of filing until an actual enforceable right has been obtained (even when also considering provisional protection), therefore the pruning (continuous review of the portfolio) helps the IPR keep an always updated communication with the typically more decentralized persons in the organization actually experiencing any infringing products, marketing etc. and will thus be able to act as “policing” ambassadors for the IPR department in terms of enforcing the patents. Furthermore, lack of interest in the business of certain technologies will also be elucidated during pruning reviews and situations where enforcement of patents become more a fight between IPR departments of corporations than a fight between the companies as such may also be avoided. In this way enforcement costs are targeted at business areas of interest rather than the interests of the IPR departments.

How do you stay focused in a decentralised global organisation and build on hundreds of M&A’s after centralisation of IP?

A wide variety of IPR schemes exist but what as worked for us is a centralization of the IP administration combined with a close cooperation around the world with a network of in-house attorneys, selected agents, insourcing in Asia, outsourcing in locations without in house people and a complex overlaying structure of royalty and license payments, transfer pricing etc.. Quality control in such a widely dispersed company structure is difficult to monitor and change across borders.

What are your top tips for handling global IP teams on a plurality of locations using external agents and outsourcing?

Use same softwareUse network of preferred agentsDiscuss filing strategies frequently, both formalistic and content Use standard routes unless you have exceptional requirements

Ramya Nair RN

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Stinus Jeppesen

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SJ

Stinus will be speaking on Day 1 of the GPC conference on How your enforcement

strategies aligns with Business Goals


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Danish FLSmidth & Co’s Stinus Jeppeson on achieving successful patent enforcement

What global challenges do companies need to look out for when attempting to achieve enforcement?

Immense differences between evidence requirements, evidence preservation, enforceability, costs, technology related differences.

How can companies ensure that their patent enforcement strategy aligns with their business goals?

Be in constant alignment with sales personnel, product line management, O&M not as frequently used only the R&D department.

Currently Stinus is Patent Manager in Danish FLSmidth & Co. A/S, a global engineering company based in Copenhagen, Denmark. With almost 13,000 employees worldwide it provides global cement and mineral industries with factories, machinery, services and know-how. FLSmidth is listed on NASDAQ OMX Nordic Copenhagen in the C20 index and has offices in more than 50 countries worldwide, a diverse product portfolio and global activities both in terms of markets and company structure. He works with strategic and dynamic portfolio optimization, cost reductions through optimisation, improvement of portfolio management through advanced IT systems and Corporate IP awareness. He has a background in engineering physics and a PhD in Physics from the Niels Bohr Institute, University of Copenhagen. Professionally he has been involved in IP management, first as IPR consultant in Copenhagen-based IPR consultancy houses and thereafter for several years worked with IP management in the industry.

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Stinus Jeppeson

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Continuous pruning of portfolioInvolve ambassadors for policing Justify any actions taken with an alignment of the purpose in terms of business: What is the effect on potential clients, what are well suited jurisdictions etc.

Who will I meet ? Over 180+ expected attendees from job titles including:

IP ManagerHead of Patents (Directors, Managers, VPs)Patent SpecialistPatent Portfolio ManagerPatent Attorney / CounselHead of IP Policy, Head of IP External Affairs. IP Strategy, Head of Patents OperationsHead of IP / IPR (Directors, Managers, VPs)Head of Licensing / Licenses (Directors, Managers , VPs)Litigation CounselAssociate GC, LitigationVP, LitigationHead, LitigationGeneral CounselVP LegalDirector, LegalChief Legal OfficerDirector, Dispute ResolutionIPR Specialist (Directors, Managers, VPs)Head of Legal, In-house Counsel (Directors, Managers, VPs)Head of Litigation, Head of Patent LitigationPatent Attorney / Counsel PartnerManaging Partner


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Global Patent SystemsWhich Country Provided the Strongest Patent System in 2014/2015?

The U.S. appear to be lagging behind countries that at times receive pressure from the U.S. to strengthen their patent systems such as Canada (ranked 9th). Although 20th, the current score of the U.S. indicates to a strong patent system that is clearly improving. The current U.S. score is in contrast to the 2011-2012 scores which indicated to a patent system of only moderate strength. From the point of view of IP owners, the extended patent battles in some industries and patent trolling activities evident in the U.S. patent system over the last years had an overall degenerative effect on the effectiveness and efficiency of the U.S. patent system. Similar to the U.S., the 2014-2015 scores for the UK suggest that its patent system almost regained its position in the very strong category of the ranking. Over the last four years, the UK experienced a fall in the ranking from the very strong category in 2011-2012 to strong in 2012-2013. The strength of the patent system of the UK is clearly on an upward trajectory over the last three years however as a result from a number of efforts to reform the system.

Dr Nick Papageorgiadis is a Lecturer in International Business at the University of Liverpool (UK) and an Associated Researcher at the department of Business Studies of Uppsala University (Sweden). He researches the effect of the strength of intellectual property protection and enforcement on international business and innovation strategy and publishes an annual composite index that measures the strength of patent systems of 49 countries for the years 1998-2015 (www.liverpool.ac.uk/patent-systems). Nick is the lead researcher in a number of international quantitative, qualitative and conceptual research studies that focus on the effects of national IPR systems on international business strategy, innovation, knowledge transfer, and firm performance. His research is published in well-known academic journals in the areas of international business and economics. Nick has collaborated with patent and IP counsel from major multinational companies and is a regular speaker at international academic and practitioner conferences.

Nick Papageorgiadis

Which country provides the strongest patent system for the protection of intellectual property (IP) owners in terms of effectiveness and efficiency? It is commonly anticipated that countries such as the United States, a major proponent for the strengthening of intellectual property rights protection and enforcement internationally, is to top such a ranking. Our new study that measures and ranks the strength of international patent systems annually for the years 1998-2015 however reveals that in 2014 the U.S. were only ranked 20th in the world.

Similar to the U.S., the 2014-2015 scores for the UK suggest

that its patent system almost regained its position in the very strong category of the ranking

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Firms may find it difficult and expensive to successfully engage in such activities in the Chinese patent system.

Similar to China, the strength of the Indian patent system also improved over the last decade however India’s score is still low, 40th out of 49 countries in 2014-2015, placing the country at the very weak category of the index. There were positive developments regarding the effectiveness of the Indian patent system such as the relatively fast ruling of Delhi’s High Court to temporarily suspend sales of Xiaomi due to a patent dispute with technology group Ericsson. Negative perceptions to the efficiency and effectiveness of the Indian patent system are still prevalent however, due to cases such as the refusal of the Supreme Court of India to grant a patent to Swiss group Novartis for its cancer drug Glivec after a 7 year patent battle. Other countries included in the very weak category of the index are Mexico, Philippines, Argentina, and Indonesia. Finally, a number of countries score in the moderate and weak categories of the index of patent systems strength.

The country that achieved the most striking improvement over the last 17 years is South Korea which entered the moderate category of the ranking in 2005-2006, after being consistently in the weak category of the index since 1998. Other countries in the moderate strength category of the index include Israel, Portugal, Spain and Malaysia.

The countries found to provide the strongest and most IP owner friendly patent systems in 2014-2015 include Denmark that is leading the rankings, followed by New Zealand, Finland, Sweden, Norway, Switzerland and Singapore. The overall patent system in these countries is found to be favourable with countries such as Denmark introducing administrative simplifications for the users of the patent system and Singapore launching the IP 101 (IPOS Service Centre), an integrated one-stop services centre. At the other end of the ranking, we find all BRICS countries (Brazil, Russia, India, China, South Africa) to provide inefficient and ineffective protection of patent systems, achieving scores that place them at the very weak or weak category. This is not to suggest that countries such as China did not demonstrate any improvement over the last years. Although over the last 17 years the Chinese patent system has been consistently ranked in the very weak category, China’s scores have increased due to the implementation of positive reforms that strengthened its patent system. The Chinese patent system now provides specialised IP courts and government agencies related to the enforcement of IP demonstrate willingness to collaborate with companies against IP infringement. In order to be successful in protecting their patents however Erick Robinson, the chief patent counsel for Rouse (an international law firm specialising in intellectual property), suggests that IP owning firms need to invest in informal skills such as to act with great respect and build relationships with government officials and influential Chinese industry leaders in order to gain their trust.

The Chinese patent system now provides specialised IP courts and government agencies related to the enforcement

of IP demonstrate willingness to collaborate with companies against IP

infringement.

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8

SMEs

I work in the Greater Copenhagen area and you can find more than 350 R&D companies here focusing on tech and pharmaceuticals, so it’s quite a thriving region. Many are small and medium enterprises or start-up companies, and some of these start-ups are based on just a single patent; in many cases these companies are spin-offs from one of the local universities. I can definitely say that patents are most important during the first years, after which trademarks play an increasingly important role, for both start-ups and established enterprises.

Start-ups have to aim for a strong patent that can withstand being challenged, while ensuring that they aren’t infringing on anyone else’s intellectual property. Meanwhile, they have to struggle with costs and expenses. Even if many things can be kept in-house to keep costs down in the start-up phase, most companies still benefit from expert advice. Patents are also extremely important when trying to persuade investors to come on board. Investors are

To avoid litigation, always aim for a strong patent and make sure you aren’t infringing on anyone else’s patent or intellectual property. I can’t emphasise that enough! But even with a strong patent, make sure you can defend it. If your competitors know you are in a position where you can defend your patent you have a stronger case for avoiding legal issues.Someone once said to me ‘If you can’t defend your patent, by definition it’s worthless’. I find this interesting since I’ve met plenty of investors and they all ask SMEs, ‘do you have patent protection?’ But no one has ever asked ‘can you defend your patent?’ Yesterday I met with a lawyer who works with both SMEs and start-ups, so I asked him if he’d ever heard of investors who asked representatives of companies they were considering investing in whether they can defend their patent. He looked at me as though he had no idea what I meant! ‘No’, he said, ‘never’. It was clear from his expression that he’d never even thought of the possibility.

Intellectual property falls into many categories such as trademarks, patents, designs and copyright. Which of these is the most crucial for SMEs to address within the first 5 years?

What initial challenges do start-ups face when implementing patents?

What is your top tip for SME’s to protect their IP and avoid legal issues?

Susanne Ahlberg, LL.M is General Counsel for the Genovis Group at its corporate headquarters in Lund, Sweden, and for its U.S. subsidiary Genovis Inc. She oversees all legal aspects of the Genovis Group, including intellectual property and trade secrets. With over 20 years of experience in the industry as both an employee and through her own company, Ms. Ahlberg has worked extensively with both startups and established companies, mainly in the field of medical supplies and diagnostic tests for the veterinary market, with a focus on business development and international marketing.

Ramya Nair

Susanna Ahlberg

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well aware of the importance of patents and what patents mean for the survival of these companies, so many start-ups actually depend on being able to convince them that they have a solid intellectual property portfolio and strategy. Unfortunately there are many examples of start-up companies that are so caught up in the hunt for venture capital that they apply for patents too early and ultimately hold a weaker patent than if they had taken the time to gather all necessary data.

Susanne Ahlberg

Susanna will be speaking on Day 2 of the GPC conference on Patent insurance considerations for start-ups.


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Genovis’ Susanne Ahlberg on the key challenges SMEs need to address when implementing patents

Open Innovation

What is the most pressing challenge when attempting to co-own IP rights at the present?

Co-ownership of IP rights might bring with it quite a number of significant hurdles, especially if certain details of how the co-ownership shall play out in practice are not dealt with at the right time, i.e. before the deal is closed. This might sound obvious, but unfortunately it is not uncommon that crucial aspects of joint ownership might be perceived by business folks as “lawyers’ technicalities”. As most of us have certainly experienced, in certain situations insisting to go through a detailed regulation of legal aspects might be perceived as not very business-friendly…“The negotiation was going great, until the lawyers killed the deal with their technicalities!”. When a negotiation reaches that point, the contract is often left silent on the basic mechanisms of managing the co-owned IP and any such discussion is postponed to a undefined later stage. This moment typically materializes when a practical issue arises down the line, for which the contract offers no clear guidance. For example, a new solution is co-created, but the co-owners happen to have different views over whether it shall indeed be patented, or instead shall be treated as a trade secret. Other disagreements might appear less dramatic, but still can prove challenging: assuming both parties agree to seek patent protection for such new solution, which party shall decide how the patent applications shall be drafted, and with which “spin? And who decides which jurisdictions shall be covered? Should one of the co-owner be primarily responsible for enforcement or for licensing? If the relationship between the co-developers (now, co-owners) is still excellent, it is reasonable to assume that most of these issues might be dealt with, one way or another.

Ramya Nair

Cristiano Cori

However, there are cases where the relationship has deteriorated, for example because one party perceives they have not obtained from the co-operation what they expected, or because the market reality has changed. In similar situations, the unsatisfied party might try to hold the other party hostage by leveraging these practical issues, in an attempt to rebalance the relationship. Such maneuvering rarely achieves the results of restoring a long-lasting equilibrium, however. More often, it might deal a fatal blow to what was left of the relationship. Notwithstanding all of the above, the reality of the business nevertheless shows than there might be cases where there is truly no other option than a co-ownership of IP rights. In similar scenarios, the advice is clear: one shall make a reasonable effort to define the basic mechanisms for managing the co-owned IP sooner than later, and certainly before the negotiation is closed.


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GE’s Cristiano Cori on making joint development a success.

With over 16 years’ experience in IP, Cristiano Cori is the current Chief IP Counsel for GE Oil & Gas at TurboMachinery Solutions ($5B+; 5K+ employees). Cristiano’s expertise lies in creating and implementing an intellectual property strategy, which is aligned to the priorities of the business, as well as collaborating to provide solutions to commercial and intellectual property issues. Cristiano previously served as Senior Associate and IP litigator at Trevisan & Cuonzo Avvocati where he specialized in patents, trademarks, design, unfair competition and misleading advertising for primarily international clientele, and placed a particular emphasis on multi-jurisdictional patent litigation, being seconded at a UK law firm, and at a French law firm. For his strong performance in ’15, Cristiano received the GE Award for High Impact - External to the IP function, and the TurboMachinery Solutions Leadership Growth Award for “Delivering Results in Uncertain World”.

Cristiano Cori

What do you think are the key benefits of joint development?

The key benefits might change depending on where your company is sitting in the value chain. In very general terms, joint development often means co-funding, which can accelerate your time to market. It might for example allow a company having a technological critical mass but being short on cash to make progress on different fronts at the same time. Another key benefit is related to the fact that, as big companies are realizing more and more, not all the smart people work for you… Smart people working for a different organization might look at your products and to your technology with a fresh look and from a new angle, something which is typically difficult (or at least, more difficult) for your own people.

Do you think joint development is something which companies with a strong focus on services and processes (as opposed to products) can implement successfully?

Focusing on services and processes might mean that companies might face additional challenges in structuring a joint development which operate satisfactorily for both. Having said that, I think that joint development can still be very successful, provided that both sides are prepared to take additional efforts in terms of creativity and flexibility. For example, in the Oil & Gas industry I’ve seen recent examples of joint development in providing training; they seems to work fine for all partners involved.

RN

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At least two. First, building and maintaining reciprocal trust. In this respect it is crucial that all the teams engaged on one party (for example, the negotiation team and the team engaged in the actual co-development) make every effort to send consistent messages to the other party’s teams. Sometime one team, say the actual co-development team, might inadvertently negate (either by taking an official position, or simply by behaving in a certain way) what another team, say the negotiation team, has advocated. It is not so rare seeing this happening, often because of an internal miscommunication rather than to having different agendas. When this happens, the other party might start losing trust. It is highly recommended addressing such a situation timely and in full transparency, to reinstate as rapidly as possible an ecosystem of reciprocal trust, or you can see your attempt to co-operate potentially backfire and damage the relationship. The second major hurdle I can think of, is somewhat related to the previous one: accepting that the parties might not always have the same share of the pie, or that they might not always retrieve comparable benefits from the joint development. Obviously I am not making reference here to a situation where this happens because one party has made a bad deal. I’m rather thinking to situations where a certain unbalance is to some extent unavoidable, just because of the differences in the respective business models, or the market reality. When you face such a situation the suggestion is to clarify within your organization whether – all things considered – this might still be a meaningful deal. If so, then it might worth focusing on the benefits your company might get from the co-operation and from the future relationship, rather than developing negative feelings on the fact that the other party might obtain more significant advantages in the short term. A negative attitude, or allowing unrealistic expectations to grow within your organization, might in extreme cases sabotage the deal, and give your company a reputation of being difficult to partner with.

Cristiano will be speaking on Day 2 of the GPC conference on Collaborative IP Creation:

How To Navigate The Journey From Joint Development To“Co-Creation”.


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CC

What are the major hurdles you’ve come across when trying to practice joint development with partners?

RN

What is your top tip for companies looking to become the preferred partner of choice within joint development in their industry?

If the goal is, as you say, to become “the preferred partner of choice within joint development in the industry”, then you have first of all to accept and acknowledge that this might be a medium-long term goal. As such, it might require a continued effort for a certain amount of time, before you can realistically achieve that status. Building a reputation takes time: you have to come to terms with that reality. To be successful in this journey, then in my experience the key words are: flexibility, transparency, consistency and willingness to look for the best deal for both parties. I think being flexible and being transparent is particularly important: often, this can translate into clarifying upfront what you are not prepared to accept, and in investing sufficient time in explaining the reasons why you believe certain scenarios are unacceptable for your company. Equally important is asking the other party to do the same. Also, when negotiating crucial aspects of the co-operation, it is important to make a constant effort to move the discussion from “positions” to “interests”, and to help your potential partner to follow the same approach. As already mentioned, never forget to ensure that all your teams engaged in the joint development send consistent messages from the very outset and during the co-operation. Finally, acknowledge mistakes and correct them as soon as possible. Focusing on building the relationship on healthy and robust grounds is likely to dramatically increase your chances of becoming a reliable, highly valued and sought-after partner for joint development in the industry. In short, the partner of choice.

CC

RN

What our past attendees said about the event…

“It was indeed a great conference and I enjoyed both

presenting and discussing as well as the networking opportunities. I am surely looking forward to the

events of next year.”

Senior IP Manager, Umicore, Speaker Global Patent Congress 2013

“I was impressed by the speaker line-up and quality

of presentations. It has been a valuable opportunity to connect

with key industry leaders”

Global Patent Advisor, U.S. Patent Agent, Mölnlycke Health Care AB

“Over the years I had stopped going to any

conferences as they all seemed to cover all the same subjects,

but your IQPC conferences have revitalised my interest in such

events – thank you!”

IP Management Consultant, Leogriff


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Europe

How will IP counsel’s litigation strategy change for the up and coming Unitary Patent system?

The core effect of the new system will be, in a snapshot, patent protection for territories where we currently had no patent protection at all. If you look at the so-called patent poor countries, they’re called that way because there’s no litigation happening there because of lack of experience of the judges and so on. With the UPC, you have a one-step only opportunity to have patent protection and injunctive relief all over Europe as long as you have validated your patent all over Europe. This will be the most beneficial effect of the whole system.

Will there be challenges for companies within patent poor countries who don’t initially have litigation strategies?

Yes, especially if you are an attorney for the defence side. The defendants, or the possible defendants, have had a nice life in a country that has no practical patent protection at the present time and all of a sudden, patent protection comes into action. This means they have to redefine their business strategies and maybe

Do you think companies within patent poor countries who have to redefine their business strategies will opt out or do they not have any choice but to opt in?

I’ve heard that Poland had this consideration and therefore they didn’t sign the agreement. In the long run all will come in because they can’t block access to the system for their own innovative companies.

Dr. Matthias Zigann is the Presiding Judge at the Munich Regional Court I where he has been the head of the 7th (patent) division since December 2012. Following a three-year fellowship at the Max-Planck-Institute for Innovation and Competition in Munich, Dr Zigann served as a public prosecutor in Landshut for four years and as a regular member of the 7th division of the Munich Regional Court I for six years. Prior to his role as presiding judge, he was seconded to serve as a research associate with the Xth civil (patent) division of the German Federal Court of Justice in Karlsruhe for three years. Dr Zigann is co-author of Haedicke/Timmann, Handbuch des Patentrechts, 1st ed. 2012, and Cepl/Voß, Prozesskommentar zum Gewerblichen Rechtsschutz, 1st ed. 2015. Dr Zigann is a frequent speaker at national and international conferences including the GPC conference.

Matthias Zigann

Marina Belaya

Matthias Zigann

MB

MZ

have to pay for license fees and even find a different embodiment of not patent infringing.

MZ

The core effect of the new system will be, in a snapshot, patent

protection for territories where we currently had no patent protection

at all

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MB


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Munich Regional Court’s Dr Matthias Zigann on Unitary Patent Systems and what this means for the EU.

If you could change three things about how the Unitary Patent system is being handled what would they be and why?

Maybe if it were possible to go back to the stage where the agreement had been signed and to sort out all the ambiguous parts of the text, that would be beneficial. The second thing I would suggest would be to overcome the language problem by choosing just one language, maybe English, as a language most of the participants can handle. And thirdly, I’m not sure if it was a good idea to have a decentralised central division. This can’t be explained to anybody as it’s just a political decision.

How do small patent companies that opt in get their litigation up to speed and what do they have to look out for?

That’s hard to tell but the first step would be to find a competent law firm to help with this. I think this is essential and it should be a law firm with ample experience in patent rich countries. They have to produce a customised solution to this problem according to the field of technology and according to the competition situation; what competitors do we have, what is the patent landscape? For example, a small company in the field of biotech, have to understand that they’re going to litigate in London as the central division for biotech will be in London. This is different, in terms of costs, than being in mechanical field where the central division will be Munich.

Do you think that the Unitary Patent system favours the more developed multinational corporations?

That’s hard to tell, in our German system we also have very developed companies litigating patents and we have the not so well off companies litigating. It’s always an economic decision, whether to litigate or to settle, and often, at least the first instance, is taken by the parties even if they are short of money. Therefore it is quite essential that the judges, at a very early stage of the proceedings, communicate to the parties what the prospects of the case might be so they can adjust their litigation strategy to that or even to settle at a very early stage. At this stage not a lot of money has been spent and you can save on costs for litigation.

On the other hand, if you have this kind of approach as a judge, which is perfect for the German system and totally in line with our law, I have been told by other judges from different countries that this is outrageous for them; that the court will communicate to the parties upfront at a very early stage of the proceedings what it thinks. The UPC judges have to find some unified approach to this problem and I’m sure they will.

Are you interested in becoming a unitary patent judge?

Yes and no, yes because the task will be very fulfilling to be part of this new system but, on the other hand, I have not heard any numbers about the remuneration yet and thinking about being a judge maybe at the London local division or the Paris local division, the remuneration would have to be enormous compared to my salary at the moment because all I have heard is that the rents in Paris and London are enormous too. So I’ll have to see the whole package and then I can say yes I apply for the job or not.

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What do you think the impact will be on the Unitary Patent system if the UK leaves the EU?

That’s a difficult question; it depends on when they leave the EU. After the ratification process has been finished, the UPC system is going to work and they will just leave the system and will not be a part of it anymore. So the local division in London and the part of the central division in London have to be moved somewhere else, maybe to Madrid or to Milan. Secondly, there would be patent attorneys in England which won’t be EU members or nationals anymore and therefore not allowed to appear in front of the UPC to represent parties. This could be an incentive for the British patent attorneys to foster a stay in vote.

What will be the impact on trolls in the Unitary Patent system?

I think that the new system will be beneficial for trolls and at the same time not. It’s beneficial as you can have an impact all over Europe if you’re successful but at the same time you risk your patent all over Europe; if we have a counter-claim for revocation, and this is successful, your patent is gone for the whole of Europe. At the moment, in the national system you only risk your national part of the European patent. Also this would have an impact to the other national proceedings going on; you would still have the other national patent in your hands and you can send warning letters out and so on.

MZ

MZ

MB

MB

Matthias will be speaking on Day 1 of the GPC conference during The View From The Bench: An Executive Panel Regarding The Unitary Patent And Unified Patent Court

Three Questions With...

What are the top three points that you wish to highlight to delegates during your session?

1. The pace of the prosecution may vary depending on the route selected by applicants to file their application.

2.The EPO’s focus is on high quality and efficient services, I will explain how we minimize pendency time in search examination and opposition procedures

3. Claims do play a key role in the protection of inventions and of commercial interests.

If you were to sum up your current IP/patent strategy in one sentence, what would it be?

As the Patent Office for Europe, we support innovation, competitiveness and economic growth across Europe through a commitment to high quality and efficient services delivered under the European Patent Convention

What will you be presenting on at GPC 2016?

How To Save Time, How To Save Money At The EPO • The importance of adjusting the pace of the prosecution to suit commercial objectives• How to minimise EPO pendency time • How do your claims matters

Roberta RomanoPrincipal Director Handling & Processing, Principal Director Vehicles & General TechnologyEuropean Patent Office


15

Stryker Corporation’s Jamie Kemler on licensing & protecting IP to implement a successful strategy

Monetisation

Jamie Kemler is currently the VP, Intellectual Property Business Strategy for Stryker Corporation with responsibility for the development and execution of Stryker’s enterprise-wide IP business strategy to include monetisation activities and relationships with technology transfer and licensing/venture offices of global universities and hospitals. Prior to this role, Mr. Kemler was Group President, Regenerative Medicine, which focused on the clinical development of the recombinant human protein BMP-7. Earlier in his career at Stryker Mr. Kemler’s Group President role included responsibility for the Spine, Trauma, and Development divisions, with multiple manufacturing and research operations in Europe and the U.S.

Jamie Kemler

RN

JK

Ramya Nair

Jamie Kemler

What is your top tip for start-ups looking to license IP but avoid licensing agreement issues?

One of the top tips for this in general is flexibility. I have found in my work that when looking to license off unused and non-core intellectual property, attempting to license it to larger companies’ presents some challenges. Large organisations have competing projects and R&D spending which means it is more difficult for them to think about investing in outside intellectual property. However, with start-ups, they often build a business around, or supplement their businesses with, the addition of the intellectual property coming from a larger entity or universities. In that relationship one of the keys is the flexibility for deal terms as the start-up is often cash constrained in terms of the value they can provide at the time of the transaction. If they are willing to share in their success, for example through royalties, they are able to move forward. Being flexible on the deal terms and how you build that relationship with the entity is important.

Is it possible for start-ups to protect key products while reducing the cost associated with maintaining IP rights that are of no future use?

Often, start-ups don’t have very big portfolios, or the whole entity doesn’t have anything to start with, therefore licensing your patent portfolio is a part of getting the business started so it’s not really a question of reducing cost. The benefits of this arrangement are that often times, the IP that a larger entity is looking to license is somewhat mature therefore the prosecution costs are already spent. There may be continuations which require additional spending, but those are optional; the core IP is typically issued and you’re only looking at maintenance fees which get more expensive the longer you go out in the US. In comparison to prosecution it’s still far cheaper, so that’s one way that this works.

One difference that I propose, which is sometimes different from the technology transfer at universities, is that I don’t insist on recovering the prior patent cost which is typically asked for by tech transfer. Essentially, they’re trying to manage their cost structure, so if monies have been spent on either provisional or non-provisional patent filings, then they expect the start-up, or the entity licensing it, to pay for those.

I don’t do that because my view is that’s a sunk cost.

Large organizations have competing projects and R&D spending which means it is more difficult for them to think about investing in outside

intellectual property

“

”


16

RN

JK

Some companies fear that licensing will place them into conflict with suppliers and customers, how can this be prevented?

I don’t believe start-up’s will typically have a conflict situation, especially with customers. In deals that I’ve worked on, often we’re assigning supplier relationships, or we’re helping introduce suppliers, because we may or may not have been the manufacturer of the technology, so the supplier is relevant in the deal. However, typically, the IP being licensed is covering what the start-up is going to be focused on to commercialise in a more narrow sense so it doesn’t necessarily place them in a conflict situation.

RN

Do you think it is important for SMEs to license IPSs? If so, why?

JK

I do, if SME’s are early in their development as a small company, they may not have invested significant amount of funds towards creating their own organic intellectual property portfolio. This means that the licensing could be a cost effective way to gain additional rights and beyond the licensing, it can also be the tech transfer to get additional technology and know-how into their company. I don’t think I’m alone in this, but I do believe that by being flexible, licensing can be a fairly cost effective way for SMEs to gain access to the use of the portfolio in their field, or to the technology that’s being transferred to them.

Some companies are getting more aggressive in their IP management, whereas others don’t know how to manage the process. What is your top tip for those looking to implement a successful IP management strategy?

RN

JK

I believe awareness is the top tip; being aware of both your own internal portfolio and what you own, but more importantly awareness of the landscape. To ensure a wider understanding of the landscape, ask questions such as ‘what do your competitors own in terms of patents?’, ‘what are they filing on?’, ‘what about the value chain in your industry?’, ‘Do suppliers, customers own IP? If so, what IP’s do they own?’ etc. This is a good starting point as you can understand if your position is strong or weak, if you need to add to your portfolio, if you have opportunities to prune, if you need to be in certain areas that you aren’t currently positioned into and also if you want to move in a new market space.

We are more focused on the earnings of the corporation, so once that money’s spent it’s already expensed; it’s not something you get back. If you do transfer an asset, as part of the transaction, we do expect to be compensated for the value of that asset on the books at a minimum so that losses aren’t recognized.

Jamie will be speaking on Day 2 of the GPC conference on IP Monetisation Through

Licensing To Start-Ups


17

Sonja London has over 10 years experience in intellectual property. As Head of Licensing Program Management at Nokia Technologies, she has global responsibility of management of patent licensing programs. Her roles over the years have covered licensing from A to Z: from business development of licensing programs to successful execution and negotiations, managing contracts, royalties, customers and compliance. Sonja has built strategies, processes and systems to enable end to end licensing business. Sonja is a member of the Board of Licensing Executives Society Scandinavia since 2013 and she has been a visiting lecturer in the Aalto University Helsinki since 2011. In addition to her position in Nokia, Sonja is also serving as member of the Board and IP advisor in FusionLayer and Solu Machines.

Licensing

Sonja London

Ramya Nair

What are the challenges you have faced when implementing patent licensing programmes on a global scale?

Sonja London

Next, your great team needs to be organised to effectively deliver the programme. Whether you choose global and centralised, or local and distributed governance models, they must fit your strategy, operations and way of working.

Finally, and often the most challenging element, you must have efficient processes and data systems that enable and support the work of your teams.

The use of data systems to support your contracting process is essentially no different from supporting any sales cycle. Though establishing business processes must precede establishing data systems, in many cases organisations may need to change their ways of working to enable data systems to support their operations. For example, to switch from sending individual email approvals to make approvals an automated part of your contract management system, your people will need to understand that their workflow is automatically supported and that exceptions cannot be handled manually outside of the system. Change management becomes more important and will require strong support from your management.

A great data system is essential if you want to take your business to the next level. Although many are available on the market, they won’t work for your specific business off the shelf. You must implement any system for your specific business requirements, which requires vision and competences from your business. But with that understanding, any licensing business can be made more professional and efficient using business enabling data systems.

Let me answer with what I believe you need to implement licensing programmes on a global scale, as from there I believe you can see where the challenges lie.

First, you need a great team, with enough skilled resources. It’s not an easy business, so you must have a good mix of technical, commercial and legal skills.


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Nokia Technologies’ Sonja London on implementing patent licenses successfully on a global scale.

RN

SL

In what ways has the process of commercialising patents changed in the past ten years?

On a very high-level perspective, the basic business process is still the same. A party infringes a patent, that infringer is contacted and the infringement will be evaluated and discussed between the parties in technical analysis. It is clear that if there is infringement, then the infringer will need to take a license and enter into a licensing contract or, if you have no obligation to license, they may need to stop infringement. This basic process has not changed.

In many business fields, the processes supporting licensing have been manual, driven by very small, expert teams of patent attorneys or technical people. Over time, as patent licensing has become a more significant business enabler across industries, the handling of the process has naturally developed to be more professional in its execution. There are now more professional licensors, and the negotiation of contracts and execution of programmes has developed to be more organized and data driven. Licensing practices have evolved from tailored, case by case agreements to standard licensing programmes, with this also being seen beyond patent pools. The licensing and intellectual property expertise has developed across industries.

RN

When implementing an audit programme, what challenges can companies expect and how can this be overcome?

A commonly used approach is to use ”running royalties,” with licensees paying a royalty based on its sales. Typically, the licensee reports its sales to the licensor and pays a royalty accordingly. With payments based on self-reporting, which is often hard to verify, royalty audits are needed to ensure royalties comply with the license agreement. These audits are typically carried out as part of a programme that regularly audits many licensees to ensure correct royalty payments, but they may also be specific to an individual licensee.

As with the licensing programme itself, an effective audit programme needs a team with the necessary legal, commercial and even technical skills. In an ever-changing industry landscape, they must understand financial reporting systems and the licensed products, as this will help drafting reporting, payment and audit clauses that work in practice. Poor agreement drafting or sub- optimal dispute resolution mechanisms may lead to practical problems that may be expensive to resolve.

Local business culture may support creative management of royalties to enhance the licensees’ competitive advantage and make it difficult to admit when errors have been made. These issues have to be brought to attention and resolved with some diplomacy. Human errors may be difficult to deal with for many organizations.

SL

What is the first step companies should take when attempting to effectively manage commercial data?

RN

In relation to patent licensing, commercial data means royalty data and other licence data, such as scope, term, territory and so on. Such commercial data is used in many different purposes: for royalty management, managing relationships between the parties or it could be needed in dispute resolution processes or infringement litigation.

Over time, as patent licensing has become a more significant business enabler across industries, the handling of the process has naturally developed to be more professional in its execution.

“

”


19

In relation to patent licensing, commercial data means royalty data and other licence data, such as scope, term, territory and so on. Such commercial data is used in many different purposes: for royalty management, managing relationships between the parties or it could be needed in dispute resolution processes or infringement litigation.

Global patent licensing and especially the licensing of standard essential patents is a data intensive business. The first step in managing the loading of required data is to get it into electronic format and then continue to automate related processes. This needs the business structure and processes to be defined. An optimal data system would provide end to end support and automation for the entire contract lifecycle, from initial contact to expiry of an agreement.

Building a holistic system is not easy, fast or cheap. Anyone building such business capabilities needs to understand the complexities of a licensing business, and so licensing executives and administration professionals should be engaged in the data system development project. The project team must understand the business and be able to translate its requirements into a system that will actually support the business operations.

Both home-grown and commercially available data systems are expensive, complex and take time to implement, so choosing the right solution is important. In my opinion, home-grown data systems may be good for transformation from a manual to a more automated process. However, as they are typically made to order and to match the current business, they may not be very flexible if, or perhaps more realistically, when the business environment changes. So, while commercially available systems may seem a significant investment, they may offer more flexibility as the business evolves.

Sonja will be speaking on Day 2 of the GPC conference on the Practicalities Of Effective Management Of Licenses, Royalties And IP

Commercial Data



1. European patenting practice concerning software-related inventions

2. What to do and what not to do in order to have your software-related invention protected in Europe

3. What is the outlook for the immediate future concerning protection of software-related inventions in Europe?


As the Patent Office for Europe, we support innovation, competitiveness and economic growth across Europe through a commitment to high quality and efficient services delivered under the European Patent Convention.


“Protecting your software-related invention in Europe: the do’s and don’ts”

And the workshop will be on “Patenting of Software-Related Inventions: the Practice of the European Patent Office explained with typical examples”

Yannis SkulikarisDirectorEuropean Patent Office


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Unitary Patent System

Amy Glover

Kevin Mooney

AG

KM

You’ve recently helped publish the 18th Draft of the Rules of procedure. What are the main changes?

The changes are slightly technical but of importance. There are changes to the opt-out provisions, which a lot of companies are concerned with. In particular, there is a requirement when opting out to file – in certain circumstances – a declaration of proprietorship. Without going into too much detail, this means that people opting out have to do some homework and they have to make sure that when they apply to opt out, the information they provide is accurate because if it’s not accurate, the opt-out is ineffective, which is potentially quite a dangerous thing for the companies.

How many companies do you predict will opt out?

I think it has to be looked at sector by sector. The sector which is most likely to opt out, their patency is undoubtedly the life sciences sector- the pharmaceutical sector , and the reason for this is that they tend to have fewer patents which are of enormous value and therefore they cannot, in a sensible way, allow those patents to be revoked centrally in this court and the only way to prevent them happening is to opt them out, but if you look at other sectors, for example the electronic sector, which is very fast-moving, a lot of patents tend to be of relative little value so I’m sure they will not be opting out. I think patents covering the innovations within the consumer sector, such as household toiletries, will not be opted out because those products have a very short shelf life.

Micheal Fysh, a retired Judge and Chair of the UK Copyright Tribunal, is a fellow of the Institute of Intellectual Property Law at the University of Oxford and a visiting Professor at the

Indian Institute of IP Law, New Delhi. In April 2012, he was elected an Honorary Member of the Chartered Institute of Patent Attorneys in London. Michael Fysh was called to the Bar by the Inner Temple in 1963 and for some 25 years practised as a barrister in the field of Intellectual Property in England and Ireland. He was appointed QC in 1989, QC in Northern Ireland (1990), SC in Trinidad & Tobago (1990) and SC in Dublin in 1994 (where he was a subscribing member of the Bar Library for many years). He is now engaged in mediation and opinion work having re-joined his former Chambers for these purposes, together with academic, lecturing and court work overseas – principally in the field of Intellectual Property.

Kevin specialises in both contentious and non-contentious intellectual property matters, focusing specifically on patent litigation, especially in the pharmaceuticals industry.Kevin has been part of an international team of lawyers working towards the creation of a new European patent court for several years and is currently the Chairman of the Committee tasked with drafting the Rules and Procedure of the Unified Patent Court (UPC). Kevin is the only UK lawyer who is a member of the Expert Group advising on the implementation of the UPC project. Kevin has organised and participated at the fore every year in Venice, for European patent judges and is advising the European Patent Office on judicial training. Kevin is also a member of the Intellectual Property Solicitors Association and a member of the American Intellectual Property Law Association.

Kevin Mooney

Micheal Fysh


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Kevin Mooney & Micheal Fysh on UPS in the Life Sciences

To what extent with the legally qualified and technically qualified judges of the court be trained and how will you choose them?

AG

Michael and I have both been involved in training in 2015. The first training was offered to judges from countries with little patent experience, which happened in 2015, and the idea was to bring those judges up to a level where they would be comparable to judges with more experience, I think that process was quite successful. The formal process for the appointment of judges will commence – we hope – in December there will be an advertisement. Then the judges will respond to the advertisement.

KM

Do you think this will be a popular advertisement with many applicants?

AG

I think it will be very popular. None of the experienced judges in the major countries that I’ve spoken to have said that they will be willing to become judges in the UPC albeit initially on a part-time basis. So, I think it will be popular, yes.

KM

Is there an answer to the numerous language objections and what’s the most reasonable answer to them you can think of?

AG

MFI’m working on two language projects at the moment with the EPO, the judicial academy in Munich. One of them is to prepare a glossary of regularly used terms and phrases which judges from countries, that don’t have a great volume of IP litigation, will be able to look at and to integrate into their judgments. We are doing it in a funny way where three of us are writing little books , I have devised the content in German, French, and English of course and these books are going to be sent to the British Council for English, the Goethe-Institut for German, and the Alliance Française

Michael Fysh

MF

I’d agree with you, it’s difficult to predict what’s going to happen and how industry thinks, but they’ve got to know about it and, from talking to people, am not sure that people are fully aware of what the implications of this are going to be at the moment, maybe some education is required.

We’re trying to educate them. I’m doing my best by travelling to companies and talking with them and trying to understand what their attitudes are. The level of education is increasing but they’ve got to be very clear about the timescale, they should be looking at this now and making preparations now.

KM

If you were to sum up your thoughts on the up and coming Unitary Patent System in 3 words, what would they be?

Well, I’m enthusiastic. I think it’s a great idea, but like all great ideas, the difficulty is in the detail. My two concerns are firstly, the question of language. There are the three main languages but, in order to get the system that the fathers of this idea wanted, we’ve got to have a very high degree of speciality in accurate language. After all, the tools of the court are really the language of the country of the proceedings. Accuracy in language is hugely important and this is going to be a matter for judges who have come from different backgrounds, so training is going to be very important. My second concern is the question of where the smaller people are going to stand in this glorious system. Small companies will have to fork out really large quantities of money on attorneys’ fees, travel, and above all, on translation. This has got to be taken into account and of course the full impact of this will probably be in the more distant future.

AG


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for French. From our input, people in the institutes are going to prepare glossaries for use by trainee judges, both technical and legal, and we shall see the outcome. The second thing is the e-learning project, which is well underway now, in fact, we’ve only got a few more modules to finish off. It has been a difficult task because under the usual international provisions the EPO has had to farm the work out to people in different EU countries, which is over 20 countries, and some of the results have been not very good from the language point of view. So, we’ve had to revise them and we’ve got to get practitioners and others interested in helping and certainly, I speak for London, most of our IP practitioners are terribly busy and this isn’t very well paid therefore it doesn’t interest them. So, we have got to do a little bit of elbow work there as well, but the thing is ongoing and we’re just going to have to achieve it.

If you were to start this process over again, would you change anything and why?

AG

It would have been helpful if the politicians involved in the negotiation of the agreement which was signed, the UPCA, had taken more advice from professionals at the time because they created a project which was extremely difficult to implement.

KM

I agree with that and I’ll illustrate it. I’m on a committee that has developed rules for mediation and arbitration. Everything is to be done at the Centre but then you learn that the Centre is both in both Ljubljana and in Lisbon. Now, this is obviously a political outcome however, we have to live with it and do the best we can. We haven’t quite got there yet, but we are working on it.

MF


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1. Build up of strategic IP management (IP dialog etc)2. Embedding IP in management3. Management of IP Service Providers


Create Effective IP coverage for our businesses efficiently.


Building up an IP department at a multinational engineering company

Secure our businesses with an effective IP shield:- Building an IP shield with declaratoric and economic ownership of IP- Inducing ideas with inventor incentive and invention on demand methodology- Giving direction to IP with IP gap, IP focus and IP portfolio management

Efficiently creating IP:- Operative Patent Councils as basis for cost-conscious IP decisions- Managing IP law firms- In-sourcing IP creation

Stephan WolkeCEOThyssenkrupp Intellectual Property GmbH

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