IP Workshop

How Apple stopped Samsung, and other IP stories

Dr Chris Hemingway BSc (Hons) PhD CPA EPA ETMA

Marks & Clerk (Malaysia) Sdn Bhd

28 February 2015

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Profile of Dr Chris Hemingway

Chris is married to a Malaysian who he met while completing his Microbiology PhD at the University of Warwick in the UK, before training as a patent attorney. After his wife spent nearly 15 years in the UK, it was Chris’ turn to experience a different country and they moved to Malaysia in January 2011 when a directorship for Marks & Clerk became available. He frequently gets asked what are the best and worst things about Malaysia. Quite often these are the same thing – the weather is great because it’s hot all the time – except it’s not because it’s hot all the time. An exception is the traffic and the crazy drivers. Everyone hates them!

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Why is Intellectual Property important?

• Protects rights of owners from competitors• Allows recoup of research and development costs

• Encourages innovation• Monopoly right in exchange for full disclosure

• Provides revenue stream• IP rights can be licensed or sold

• Adds value• Protects investments

• Drives economic growth and competitiveness• Creates and supports jobs

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Main types of Intellectual Property

• Patents protect inventions and new innovations.

• Trade marks protect brands.

• Industrial designs protect the appearance of articles.

• Copyright protects the expression of an idea e.g. literary, artistic, musical and dramatic works.

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Possible protection available for a handphone

Patent for sliding mechanism

Trade mark for Samsung brand

Registered design for overall shape

of handphone

Copyright for text in manual5

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Monopoly right

Intellectual property gives negative rights, i.e.

the right to take action against other people doing something

NOT

the right to do something yourself

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Patents

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What is a patent?

• A document giving a legal description of an invention• Invention = a new technical solution to a technical problem• Must be novel, inventive, industrially applicable and not excluded

• It provides a legal right analogous to any type of tangible property. It can be:

• Sold / Licensed / Mortgaged

• National right

• Social contract – limited term monopoly in returnfor full disclosure of the invention

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Do I need a patent?

• Maybe. It depends on lots of factors:• Costs of patent vs value of business

• Drafting is expensive, but you can do it yourself to save costs• But it is also highly specialised, so experienced agent is

recommended (as self-draft may be worthless)• Risk associated with publishing details of invention

(undesirable if trade secret) • Not always appropriate for fast moving industries e.g. ICT

• Industry may have moved on by the time a patent is granted (this takes several years)

• Note: decision to submit patent application required before invention is made public

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Not all inventions are good ideas …

GB1426698 (23rd Apr 1974)Photo push-pull radiation detector for use in chromatically selective cat flap control and 1000 megaton earth-orbital peace-keeping bomb

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‘Electric extraction of poisons’

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US606887 (5th Oct 1896)The application of the difference receivers is made to the negative electrode 6, and the positive electrode 8 is applied to any suitable part of the body. When the current is turned on, it will run down from the neck or other suitable place through the patient’s body and will pull or draw out the poison at the negative pole and deposit it on the copper plate 7.

IP Workshop© Michael Jackson

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Page & Brin got venture capital on basis of patentNote: patent owned by Stanford UniversityEst. value of company = USD400bn

And what about this one?

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‘Electronic Media Display System’

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Malaysian pending application UI 2013001978An electronic media display system comprising a plurality of electronic display units (2, 4, 6, 8) for displaying media (20), each display unit being capable of being mounted on a street post (16), a server (12) fortransmitting media to the electronic display units in a particular location (10) and ensuring the media thereon is synchronized, and an application (222) allowing the media displayed on the electronic display units to be viewed on a portable device, wherein the application provides access to information and/or actions associated with the media.

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Patent advice

• Seek professional advice as soon as possible• Keep invention confidential until patent application is filed• Prototype not required for patent application• Full disclosure required for patent (so may not be suitable for

some situations e.g. trade secrets)• Patents are expensive (>RM10-20k per country) – concentrate

on most important markets• Consider Utility Innovation if idea is novel but not inventive –

unusually powerful in Malaysia (compared to other countries)

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Trade Marks

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Trade marks

• A sign which distinguishes goods/services of one trader from those of another i.e. brands

• Typically words, logos, etc• Indefinitely renewable every 10 years• Should be distinctive, i.e. not descriptive of the goods/services,

and not offensive or deceptive• TM = Unregistered; ® = Registered

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Trade mark examples

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GB1020724 GB1044476 GB1352024

GB1490140 GB2000546 GB1

Trade mark examples

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$100bn

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Do I need a trade mark?

• Probably. But not necessarily a priority:• Trade marks can be filed at any time…• …but they are usually first-come first-serve

• Think about it like this:

‘If it’s worth stealing, it’s worth protecting’

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Trade mark advice

• Avoid descriptive marks and anything similar to existing marks• Words generally give broader protection than logos• Black & white typically broader protection than colour• Made up words e.g. KODAK usually better (more distinctive, less

descriptive) than tag lines e.g. ‘HAVE A BREAK…’

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BMW

Which is better?

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Industrial Designs

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Industrial Designs

• Features of shape, configuration, pattern or ornament applied to an article which have eye appeal e.g. aesthetic features

• Must be new i.e. it must look different to other designs• Functional aspects typically excluded • Term = up to 25 years subject to renewal every 5 years• Protection does not include:

• Method or principle of construction• Features dictated solely by technical function• Features dictated by appearance of another article of which

design forms an integral part

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Industrial Design examples

GB3004793‘Trunki’

GB3001795‘Readybed’

EC205778 ‘A-bike’

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Do I need an industrial design?

• Maybe not - protection is relatively weak (as tends to be very specific to appearance) but there are of course examples where it has been useful

• Consider availability of other IP rights• Note: Keep design confidential until

application is filed

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Copyright

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Copyright

• Protects original literary, artistic, musical, and dramatic works • Subsists automatically• Right to prevent others from copying work in a substantially

similar form without permission from the owner of the work. • Term = 50 years from year of author’s death• Not necessary to use ©, but advisable

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Copyright advice

• Keep dated records of material• Include deliberate mistakes (seeding)• Use Voluntary registration system

• submit electronic copy of documents to MyIPO • provides prima facie evidence of ownership if a dispute arises

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Let’s have a break …

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articleStory

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Fundamentals relating to IP commercialisation

Commercialisation

SustainableCompetitiveAdvantage

Market

Intellectual Property Investor Funding

Champion

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Q. What is an investor looking for?

Dragons Den © BBC

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Q. What is an investor looking for?© MYEG

e-commerce site FashionValet.net, secured RM1 million in funding from MyEG

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A. To minimise risk for the greatest return

Risk

Return

Cash

Horse Racing

Real Estate

Private Equity

VC

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Common concerns

• What if the investor steals my idea?• Protect your IP before you disclose it!

• Can I trust the Patent Office?• Yes – officers will provide written explanation and evidence of why

something can or cannot be registered• Inventors may be blinded by proximity to their idea – a good agent

will tell you if your idea is rubbish• No-one has ever done this invention before!

• Even if this is true there will be something similar – most inventions are improvements to existing technology

• Everyone will want one!• No, they won’t. Step back and take a reality check of where your

market is realistically. 35

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Maurice Ward – inventor of the Starlite thermal shielding

• Hairdresser by profession• 1989: Invented extremely heat-resistant material –

can withstand >10000ºC & nuclear blasts. About 200000x more resistant to heat than shuttle tiles!

• Interest from Boeing, NASA, military, etc• Did not patent due to concerns over disclosure …• … but died in 2011 before reaching commercial agreement

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Mandy Haberman – inventor of the AnywayUp Cup

• 1984: invention 1: feeder for babies with suckling issues• 1990: noticed new problem - beakers spill!• 1992: invention 2: AnywayUp cup (patent application)• 1993: product licensed to 18 companies• 1995: uses marketing company. £10k advance orders• 1996: sends juice-filled product to supermarket• 1997: sales soar, reaching 60000/year• 1998: action taken against infringer (ex-licensee) • 1999: worldwide sales reach 7 million/year

© Mandy Haberman

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So what if someone steals my idea/brand?

• IP gives the right to take action against another person doing something which falls within the scope of the IP

• Letter before action usually issued first to try and reach settlement e.g. damages, licence, etc

• If case goes to court, costs in Malaysia can be RM200-300k or more (relatively cheap compared to Western countries!)

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Patent infringement

Manufacturing Importing Offering (for sale)

Keeping (stocking) Disposing (supplying) Using

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Catnic Components Ltd. v. Hill & Smith Ltd. (1982) R.P.C. 183

Rear wall 6° off vertical.Yes - same function, same purpose.

Patent infringement (example 1)

• Patent must be granted and in force (not just pending)• Claims determine scope of protection• Purposive construction not literal interpretation

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Claim 1: a lintel with a rear wall member ‘extending vertically’ ...

Rear wall 6° off vertical.Infringement?

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Patent infringement (example 2)

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• Damages can be high• US allows triple damages for ‘wilful’ infringement• How much was awarded in Apple Inc. v. Samsung Electronics

Co. Ltd. [2012] US district court?

$1.05 billion (fourth largest jury award in a patent case ever)

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Patent Wars (Tech IP)2008-2012

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©

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Yes: Similarity of marks based on overall impression bearing in mind distinctive and dominant components

Trade mark infringement (example 1)

• Uses a mark which is identical with or so nearly resembling the registered mark, that it is likely to deceive of cause confusion in relation to the registered goods/services.

• Note: confusion can be caused by phonetic similarities

Sabel BV v Puma AG [1999] RPC 199

Infringement?

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Beecham Group Plc -v- Colgate-Palmolive Pty Ltd [2004] FCA 1335

Yes – MAXCLEAN is phonetically similar mark, identical goodsInfringement?

Trade mark infringement (example 2)

(Registered trade mark: MACLEANS)

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• Initially High Court said that McCurry was taking advantage of McDonald’s well known brand as mispreprenting itself as being associated, and no other reason to use ‘Mc’

• Therefore held to infringe …• …BUT in Court of Appeal, it was claimed that ‘McCurry’ stood for

‘Malaysian Chicken Curry’, and they used a different colour scheme, and the goods were different (restaurant compared to fast food)

• No evidence of misrepresentation or confusion• Therefore no infringement

Trade mark infringement (example 3)

• McDonalds is a well known international brand• 'Restoran Penang Curry house' changed its name to 'McCurry

Restaurant (KL) Sdn Bhd in July 1998.• McDonalds sued McCurry for Passing Off

Infringement?

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• ChipsPlus held to be infringement of ChipsMore as similar marks for identical goods and likely to deceive or cause confusion

• ‘Chips’ part phonetically identical• Suffixes ‘More’ and “Plus’ have similar meaning• Similar format of the words

• Claim for Passing Off also successful• Substantial goodwill and reputation• Appearance of ChipsPlus product held to be strikingly similar =

misrepresentation

Trade mark infringement (example 4)

• Danone owned registered Malaysian trade mark 90007035 ‘CHIPSMORE’ in respect of biscuits (class 30) and used brand on cookies since 1990

• Hwa Tai sold cookies under ‘ChipsPlus’ brand• Danone sued Hwa Tai for Trade Mark infringement and Passing

Off

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Infringement?

Danone Biscuits (M) S/B v. Hwa Tai Industries Bhd [2010]

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Design infringement

• Magmatic vs PMS – infringement of Trunki design?

• What about 3D printers?• Production of protected 3D items may infringe, as would the 3D

items themselves

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Copyright infringement

• A substantial portion of the work has to be copied• Seeding can be used as evidence• What about Google AdWords?

• You can use a competitor’s brand as an adword as long as the text is not used (visible) in the advert text itself and it is clear that the target page is not related to the competitor

• but note this foreign case law not yet tested in Malaysia!

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Potential Future Events:

How to search for and protect a brand (trade mark)

How to search for and protect an idea (patent)

Private one-to-one consultations with IP experts

Introduction to patent drafting (subject to interest)

…and any other suggestions