Wednesday, June 28, 2006

Trademark Basics [United States]

"Basic Facts About Trademarks" is available from the U.S. Patent and Trademark Office at with answers to "Trademark Frequently Asked Questions" at The following is a general discussion of Trademark Law and the Federal trademark registration process. This discussion is not exhaustive. For example, there are special circumstances and exceptions to general rules that are not discussed below. It is also subject to change in the laws, fees, and estimated costs.
What is a Trademark?
A TRADEMARK is either a word, phrase, symbol or design, or combination of words, phrases, symbols or designs, which identifies and distinguishes the source of the goods or services of one party from those of others. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms "trademark" and "mark" are used to refer to both trademarks and service marks, whether they are word marks or other types of marks. Normally, a mark for goods appears on the product or on its packaging, while a service mark appears in advertising for the services.A trademark is different from a copyright or a patent. A copyright protects an original artistic or literary work; a patent protects an invention.Establishing Trademark RightsTrademark rights arise from either (1) actual use of the mark in connection with the offering or sale of goods or services in commerce, or (2) the filing of a proper application to register a mark in the U.S. Patent and Trademark Office (U.S. PTO, or PTO) stating that the applicant has a bona fide intention to use the mark in commerce regulated by the U.S. Congress. (See below, under "Types of Applications," for a discussion of what is meant by the terms commerce and use in commerce.) Federal registration is not required to establish rights in a mark, nor is it required to begin use of a mark. However, federal registration can secure benefits beyond the rights acquired by merely using a mark. For example, the owner of a federal registration is presumed to be the owner of the mark for the goods and services specified in the registration, and to be entitled to use the mark nationwide.There are two related but distinct types of rights in a mark: the right to register and the right to use. Generally, the first party who either uses a mark in commerce or files an application in the PTO has the ultimate right to register that mark. The PTO's authority is limited to determining the right to register. The right to use a mark can be more complicated to determine. This is particularly true when two parties have begun use of the same or similar marks without knowledge of one another and neither has a federal registration. Only a court can render a decision about the right to use, such as issuing an injunction or awarding damages for infringement. It should be noted that a federal registration can provide significant advantages to a party involved in a court proceeding. The PTO cannot provide advice concerning rights in a mark. Only a private attorney can provide such advice.Unlike copyrights or patents, trademark rights can last indefinitely if the owner continues to use the mark to identify its goods or services. The term of a federal trademark registration is 10 years, with 10-year renewal terms. However, between the fifth and sixth year after the date of initial registration, the registrant must file an affidavit setting forth certain information to keep the registration alive. If no affidavit is filed, the registration is canceled.Use of the "TM," "SM" and "®" SymbolsAnyone who claims rights in a mark may use the TM (trademark) or SM (service mark) designation with the mark to alert the public to the claim. It is not necessary to have a registration, or even a pending application, to use these designations. The claim may or may not be valid. The registration symbol, ®, may only be used when the mark is formally registered in the U.S. PTO as discussed in more detail below. It is improper to use this latter symbol at any point before the registration issues.Searches for Conflicting MarksAn applicant is not required to conduct a search for conflicting marks prior to applying with the U.S. PTO. It is generally advisable, however, to conduct a clearance search for conflicting marks not only prior to applying for registration with the U.S. PTO, but before adopting a mark in commerce. Such a search can not only provide a basis for predicting the potential for successfully obtaining a registration, but also predicting the potential for infringement of the trademark rights of another.Typically two different levels of searching may be conducted. On one level, a search of registrations issued by the U.S. PTO and applications pending before the U.S. PTO along with state registrations (since each state provides a parallel registration procedure for obtaining a registration for that particular state) may be conducted at a cost of approximately $500.00. Such a search has drawbacks in that it does not include a search of common law trademark uses where the party using the mark has not sought registration. The U.S. Trademark Laws provide superior rights to the first party to adopt and use a mark and not the first party to seek or obtain registration. Thus, common law rights are also important.A second level of searching includes not only the databases of the U.S. Patent and Trademark Office and each state trademark office, but also an attempt to search various directories which might reveal common law uses of marks by third parties. Ordinarily such a search is conducted through a third party service provider that maintains a proprietary common law trademark database. This level of searching typically costs about $1,000.00 to $1,200.00.
We can discuss with you which level of searching may be more appropriate for your situation.Benefits of Federal Trademark RegistrationAlthough trademark registration is not required in the U.S. it does provide several advantages, including
constructive notice to the public of the registrant's claim of ownership of the mark;
a legal presumption of the registrant's ownership of the mark and the registrant's exclusive right to use the mark nationwide on or in connection with the goods and/or services listed in the registration;
the ability to bring an action concerning the mark in federal court;
the use of the U.S registration as a basis to obtain registration in foreign countries; and
the ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing foreign goods.
Types and Basis of Applications for Federal Registration
An applicant may apply for federal registration in three principal ways. (1) An applicant who has already commenced using a mark in commerce may file based on that use (a "use" application). (2) An applicant who has not yet used the mark may apply based on a bona fide intention to use the mark in commerce (an "intent-to-use" application). For the purpose of obtaining federal registration, commerce means all commerce which may lawfully be regulated by the U.S. Congress, for example, interstate commerce or commerce between the U.S. and another country. The use in commerce must be a bona fide use in the ordinary course of trade, and not made merely to reserve a right in a mark. Use of a mark in promotion or advertising before the product or service is actually provided under the mark on a normal commercial scale does not qualify as use in commerce. Use of a mark in purely local commerce within a state does not qualify as "use in commerce." If an applicant files based on a bona fide intention to use in commerce, the applicant will have to use the mark in commerce and submit an allegation of use to the PTO before the PTO will register the mark. (3) Additionally, under certain international agreements, an applicant from outside the United States may file in the United States based on an application or registration in another country.
A United States registration provides protection only in the United States and its territories. If the owner of a mark wishes to protect a mark in other countries, the owner must seek protection in each country separately under the relevant laws.
Purely local use within a state may qualify for registration of the mark with the trademark office of the state in which use is made. Each state has its own trademark office that operates separately from the U.S. PTO.
Who May File an Application?
The application must be filed in the name of the owner of the mark; usually an individual, corporation or partnership. The owner of a mark controls the nature and quality of the goods or services identified by the mark.
Laws & Rules Governing Federal Registration
The federal registration of trademarks is governed by the Trademark Act of 1946, as amended, 15 U.S.C. §1051 et seq.
Other Types of Applications
In addition to trademarks and service marks, the Trademark Act provides for federal registration of other types of marks, such as certification marks, collective trademarks and service marks, and collective membership marks. These types of marks are relatively rare.
Filing Date
The U.S. PTO is responsible for the federal registration of trademarks. When an application is received, the PTO reviews it to determine whether it meets the minimum requirements for receiving a filing date. If the application meets the filing requirements, the U.S. PTO assigns it a serial number and sends the applicant a receipt about two months after filing. If the minimum requirements are not met, the entire mailing, including the filing fee, is returned to the applicant.
Application Filing Requirements
To receive a filing date, the applicant must provide all of the following:
A written application form;
A drawing of the mark on a separate piece of paper;
The required filing fee;
If the application is filed based upon prior use of the mark in commerce, three specimens for each class of goods or services. The specimens must show actual use of the mark with the goods or services. The specimens may be identical or they may be examples of three different uses showing the same mark; and
An identification of the goods and/or services to be marketed in connection with the mark.Identification of the Goods and/or Services
A mark can only be registered for specific goods and services. The goods and services listed will establish the scope of the applicant's rights in the relevant mark. The goods and services specified in the application must be the applicant's actual "goods in trade" or the actual services the applicant renders for the benefit of others. Use language that would be readily understandable to the general public. For example, if the applicant uses or intends to use the mark to identify "candy," "word processors," "baseballs and baseball bats," "travel magazines," "dry cleaning services" or "restaurant services" the identification should clearly and concisely list each such item. If the applicant uses indefinite terms, such as "accessories," "components," "devices," "equipment," "food," "materials," "parts," "systems," "products," or the like, then those words must be followed by the word "namely" and the goods or services listed by their common commercial name(s).
The applicant must be very careful when identifying the goods and services. Because the filing of an application establishes certain presumptions of rights as of the filing date, the application may not be amended later to add any products or services not within the scope of the identification. For example, the identification of "clothing" could be amended to "shirts and jackets," which narrows the scope, but could not be amended to "retail clothing store services," which would change the scope. Similarly, "physical therapy services" could not be changed to "medical services" because this would broaden the scope of the identification. Also, if the identification includes a trade channel limitation, deleting that limitation would broaden the scope of the identification.
The identification of goods and services must not describe the mode of use of the mark, such as on labels, stationery, menus, signs, containers or in advertising. This information is, instead, discussed in the "method-of-use clause," of the trademark application. For example, in the identification of goods and services, the term "advertising" usually is intended to identify a service rendered by advertising agencies. Moreover, "labels," "menus," "signs" and "containers" are specific goods. If the applicant identifies these goods or services by mistake, the applicant may not amend the identification to the actual goods or services of the applicant. Thus, if the identification indicates "menus," it could not be amended to "restaurant services." Similarly, if the goods are identified as "containers or labels for jam," the identification could not be amended to "jam."
NOTE: If the identification does not identify any recognizable goods or services, the application will be denied a filing date and returned to the applicant. For example, if the applicant specifies the mark itself or wording such as "company name," "corporate name," or "company logo," and nothing else, the application will be denied a filing date and returned to the applicant. If the applicant identifies the goods and services too broadly as, for example, "advertising and business," "miscellaneous," "miscellaneous goods and services," or just "products," or "services," the application will also be denied a filing date and returned to the applicant.
About six months after filing, an examining attorney at the PTO reviews the application and determines whether the mark may be registered. In reviewing the application, the examining attorney (at the PTO) conducts a search of issued U.S. trademark registrations and pending applications for a conflicting mark. The application fee, which covers processing and search costs, will not be refunded even if a conflict is found and the mark cannot be registered.
To determine whether there is a conflict between two marks, the PTO determines whether there would be likelihood of confusion, that is, whether relevant consumers would be likely to associate the goods or services of one party with those of the other party as a result of the use of the marks at issue by both parties. The principal factors to be considered in reaching this decision are the similarity of the marks (comparing their sound, meaning and appearance) and the commercial relationship between the goods and services identified by the marks. To find a conflict, the marks need not be identical, and the goods and services do not have to be the same.If the examining attorney initially refuses to allow the mark to be registered, the examining attorney will issue a letter listing any grounds for refusal and any corrections required in the application. The examining attorney may also contact the applicant by telephone if only minor corrections are required. The applicant must respond to any objections within six months of the mailing date of the letter, or the application will be abandoned. If the applicant's response does not overcome all objections, the examining attorney will issue a final refusal. The applicant may then appeal to the Trademark Trial and Appeal Board, an administrative tribunal within the PTO.
A common ground for refusal is likelihood of confusion between the applicant's mark and a registered mark. Marks which are merely descriptive in relation to the applicant's goods or services, or a feature of the goods or services, may also be refused. Marks consisting of geographic terms or surnames may also be refused. Merely descriptive marks and primarily merely geographic terms may be registerable upon a showing that they have acquired distinctiveness in connection with the applicant's goods and/or services. Marks may be refused for other reasons as well. And often the examining attorney will request that the applicant revise the identification of the goods and/or services listed in the application on which the applicant claims to be using his mark or intends to use his mark in the future.
Publication for Opposition
If there are no objections, or if the applicant overcomes all grounds for refusal, the examining attorney will approve the mark for publication in the Official Gazette, a weekly publication of the PTO. The PTO will send a NOTICE OF PUBLICATION to the applicant indicating the date of publication. In the case of two or more applications for similar marks, the PTO will publish the application with the earliest effective filing date first. Any party who believes it may be damaged by the registration of the mark has 30 days from the date of publication to file an opposition to registration. An opposition is similar to a formal proceeding in the federal courts, but is held before the Trademark Trial and Appeal Board. If no opposition is filed, the application enters the next stage of the registration process.
Issuance of Certificate of Registration or Notice of Allowance
If the application was based upon the actual use of the mark in commerce prior to approval for publication, the PTO will register the mark and issue a registration certificate about 12 weeks after the date the mark was published, if no opposition is timely filed.
If, instead, the mark was published based upon the applicant's statement of having a bona fide intention to use the mark in commerce, the PTO will issue a NOTICE OF ALLOWANCE about 12 weeks after the date the mark was published, again provided no opposition was filed. The applicant then has six months from the date of the NOTICE OF ALLOWANCE to either (1) use the mark in commerce and submit a STATEMENT OF USE, or (2) request a six-month EXTENSION OF TIME TO FILE A STATEMENT OF USE (see forms and instructions in this booklet). The applicant may request additional extensions of time only as noted in the instructions on the back of the extension form. If the STATEMENT OF USE is filed and approved, the PTO will then issue the registration certificate.
The costs for preparing and filing an application to register a trademark with the U.S. Patent and Trademark Office (U.S. PTO) typically run no more than $1,000.00, including our fees, docketing fees, the U.S. PTO application filing fee of $335.00 for one class of goods or services listed in the application, and incidental expenses such as photocopying, postage, and the like. If more than one class of goods or services are included in the application an additional filing fee of $335.00 per additional class will be required. In addition to the application filing fee, applicants filing based on a bona fide intention to use a mark in commerce must submit a governmental fee of $100.00 for each class of goods or services in the application when filing any of the following:
Additional fees and costs are incurred during the trademark registration process. For example, after the application has been filed there ordinarily will be fees and expenses incurred in reporting actions taken by the U.S. Patent and Trademark Office on the application, as well as responding to any action taken by the U.S. PTO (such as the issuance of a letter presenting grounds for refusal which allows a six month period for a response). Additionally, there will be fees and expenses incurred in preparing and filing an Amendment to Allege Use, a Statement of Use, or a Request for Extension of Time to file a Statement of Use in addition to the government filing fees mentioned above.
If the applicant has already used the mark in commerce and files based on this use in commerce, then the applicant must submit three specimens per class showing use of the mark in commerce with the application. If, instead, the application is based on a bona fide intention to use mark in commerce, the applicant must submit three specimens per class at the time the applicant files either an AMENDMENT TO ALLEGE USE or a STATEMENT OF USE.
The specimens must be actual samples of how the mark is being used in commerce. The specimens may be identical or they may be examples of three different uses showing the same mark.
If the mark is used on goods, examples of acceptable specimens are tags or labels which are attached to the goods, containers for the goods, displays associated with the goods, or photographs of the goods showing use of the mark on the goods themselves. If it is impractical to send an actual specimen because of its size, photographs or other acceptable reproductions that show the mark on the goods, or packaging for the goods, must be furnished. Invoices, announcements, order forms, bills of lading, leaflets, brochures, catalogs, publicity releases, letterhead, and business cards generally are not acceptable specimens for goods.If the mark is used for services, examples of acceptable specimens are signs, brochures about the services, advertisements for the services, business cards or stationery showing the mark in connection with the services, or photographs which show the mark either as it is used in the rendering or advertising of the services. In the case of a service mark, the specimens must either show the mark and include some clear reference to the type of services rendered under the mark in some form of advertising, or show the mark as it is used in the rendering of the service, for example on a store front or the side of a delivery or service truck.
Additional Requirements For Intent-To-Use Applications
An applicant who files its application based on having a bona fide intention to use a mark in commerce must make use of the mark in commerce before the mark can register. After use in commerce begins, the applicant must submit:
three specimens evidencing use as discussed above;
a fee of $100.00 per class of goods or services in the application; and
either (1) an AMENDMENT TO ALLEGE USE if the application has not yet been approved for publication, or (2) a STATEMENT OF USE if the mark has been published and the PTO has issued a NOTICE OF ALLOWANCE.
Information Needed
One additional point is of note that relates to the ability to claim priority based on a prior filed U.S. application. The U.S. has entered into treaties with most foreign countries (including the Community Trademark Office) that provide that an application filed outside of the U.S. within six (6) months of a corresponding U.S. Patent and Trademark Office, can be considered as if it had been filed on the same date as the U.S. application. This ability to claim priority on a U.S. application allows for the possibility that a U.S. application may be filed first and subsequently consideration may be given to the filing of any foreign applications. Where there is an interest in filing foreign applications, we recommend that the foreign applications be filed within six months of the date of the U.S. application filing date in order to make a claim of priority on the U.S. application filing date.

Sunday, June 11, 2006

No exclusive right for trademark just because it was registered: Delhi HC

No exclusive right for trademark just because it was registered: Delhi HC

If the trademarks of two different companies were identical or resembled alike, and if both were registered, then both the entities were not entitled to have exclusive right to use one of the marks against the other, the Delhi High Court has recently held.

Quoting the provisions of Section 28 of the Trade Marks Act, 1999, Mr Justice Anil Kumar, who heard the averments of the two parties — Astrazeneca UK Ltd (plaintiff) and Orchid Chemicals & Pharmaceuticals Ltd (defendant) — observed that it was difficult to infer at this stage that the adoption of the trademark `Meromer' by the defendant to market a life-saving drug was with the intention to pass off his product as that of the plaintiff.

If the defendant was to be restrained from marketing the drug under the tradename `Meromer', the inconvenience caused to the defendant shall be much more.

So, prima facie, the balance of convenience was in favour of the defendant, the Judge held.

`For marketing advantage'

The plaintiff, which became the assignee of registered trade mark `Meronem', a sterile dry powder for intravenous injection or infusion for curing infections such as pneumonias and nosocomial pneumonias, contended that the defendant had launched similar drug to derive advantage in marketing the same.

Allowing the defendant to continue use of the drug would create an impression in the trade that the trademark of the defendant was also connected with the plaintiff.

In defence

The defendant submitted that the trademark `Meromer' was adopted in an honest manner after taking all necessary safeguards prior to its adoption. They had been in the business of manufacturing and selling various bulk drugs and formulations and had their own plant to manufacture the molecule Meropenem.

The counsel for the defendant, Mr. C. Daniel, further contended that since the plaintiff and defendant were both having registered trademarks, the plaintiff could not exercise their rights on the basis of registered trademark against the defendant. The defendant also sought vacation of the ex-parte ad interim order passed in favour of the plaintiff.

The Judge said that the defendant had spent considerable amount in setting up the plant. The plaintiff was not the first to adopt and use the prefix `Mero' as trademark. There were other companies marketing the same drug. Public interest would also support availability of the drug at a cheaper price. "So, prima facie, in my opinion, the balance of convenience was in favour of the defendant".

The loss of the plaintiff seemed to be financial which could be safeguarded by directing defendant to maintain accounts of sale of the drug, and submit the accounts regularly to this Court every half-yearly. The interim order dated October 6, 2005 was vacated. The views expressed here were tentative and prima facie conclusions, which shall not be treated as expression of any final opinion.

Source : Business Line, June 12, 2006

Friday, June 09, 2006

Xerox versus 3Com [United States - Patents]

Back in 1997, Xerox sued 3Com for patent infringement — asserting that the PalmPilot’s Graffiti handwriting recognition software infringed a Xerox patent. Xerox’s initial summary judgment win was reversed on appeal (Xerox I), and on remand 3Com subsequently won on summary judgment. The CAFC has now reversed/vacated once again.

Anticipation and Obviousness: In a showing of their technical forte, the appellate panel reviewed two prior art references in detail to determine the extent that those references anticipate the patent claims. Their conclusion — that a genuine issue of material fact remains as to whether the references disclose the limitations of the asserted claims.
Indefiniteness: The last portion of the decision focuses on indefiniteness. The lower court concluded that the claim term “sloppiness space” was ambiguous — leaving the related claims invalid as indefinite. However, in the specification, the patent provides a couple of examples of use of “sloppiness space.” As it has done before, the CAFC strained to find those claims not-ambiguous:
While those descriptions [in the specification] are not rigorously precise, they provide adequate guidance as to the types of symbols that are "well separated from each other in sloppiness space" . . . Thus, in light of the criteria provided in the specification, we hold that claims 9 and 11 are "subject to construction" and are not "insolubly ambiguous."
The case is remanded to the district court in upstate NY for reconsideration.

Wednesday, June 07, 2006

Biotech: Written Description Does Not Require Recitation Of A Known Structure

Falker-Gunter Falkner v. Inglis (Fed. Cir. 2006, 05–1324)
an appeal from a decision of the PTO Board, the Federal Circuit affirmed judgment for Appellees (Inglis et al.) in an interference involving vaccines comprising modified viral vectors. In particular, the subject matter of the interference concerned vaccines comprising a poxvirus vector having a deleted or inactivated essential gene, wherein the modified poxvirus is capable of producing infectious viral particles when grown in a host cell modified to produce the absent essential viral gene product. In contrast with the vaccines of the invention, traditional vaccines had been prepared by deleting or inactivating inessential genes in the viral vector, since the deletion or inactivation of essential genes made it difficult to produce vaccines in commercial quantities.

On appeal, Appellants (Falkner et al.) reiterated several arguments made before the Board, each concerning the common issue of whether Appellees had adequately described and enabled a poxvirus-based vaccine. Specifically, Appellants argued that because Appellees did not identify any essential poxvirus genes or the inactivation of any such genes, Appellees had not sufficiently described and enabled vaccines comprising a poxvirus vector having a deleted or inactivated essential gene.
With respect to the Board's determination that Appellees had sufficiently described vaccines comprising poxvirus vectors having modified essential genes, the Court noted that there was undisputed testimony before the Board that at the time of filing of Appellees' earliest application, the DNA sequence of the poxvirus genome and the locations of essential poxvirus genes had been disclosed in the scientific literature. Adhering to the well-established rule that "[a] patent need not teach . . . what is well known in the art," the Court held that "there is no per se rule that an adequate written description of an invention that involves a biological macromolecule must contain a recitation of known structure." In affirming the Board's determination that Appellees adequately described the invention, the Court concluded that because "accessible literature sources clearly provided, as of the relevant date, [poxvirus] genes and their nucleotide sequences (here "essential genes"), satisfaction of the written description requirement does not require either the recitation or incorporation by reference (where permitted) of such genes and sequences."

Transgenic Mice and Men [the Harvard OncoMouse]

In a full-page Science advertisement in 1989, DuPont unveiled what promised to be a powerful new tool for “shortening the path to knowledge in carcinogenesis”: a transgenic mammal called the OncoMouse. Named for its possession of an inserted gene sequence conferring susceptibility to cancer, this animal quickly came to be seen as an ideal test subject for toxicology studies and new therapeutic developments in the war on cancer.

The mouse was the product of an induced mutation in a gene which encodes proteins crucial for regulating cell growth and differentiation. This was called an “oncogene” for its role in the development of tumors in many types of mammalian tissues. In order to produce the OncoMouse, scientists originally introduced a cancer-promoting gene through micro-injection of DNA into a fertilized mouse embryo. The inserted genes were modified to be expressed in the mammary tissue, so that the mouse could be used as a biological model for understanding the development of breast cancer. Further, the mice were engineered to exhibit heightened sensitivity to toxic substances, allowing researchers to study carcinogenic environmental factors.Many scientists predicted the usefulness of this new transgenic organism, but few foresaw the consequences of its private appropriation. Thirteen years later, the OncoMouse is a prime example of the hazards of mixing science and commerce, illustrating how the growth of intellectual property rights in the life sciences has created practical obstacles to basic research.
Indeed, the high prices and royalties demanded by DuPont are indicative of a larger trend of corporate impediments to science. If the recent furor between DuPont and cancer researchers over the use of the mouse technology is any indication, increasing private ownership may slow the pace of progress in health and disease research.Let’s review the history of this story. In 1988, the OncoMouse became the first animal ever given patent protection when the United States Patent and Trademark Office (USPTO) issued a patent to Harvard University geneticist Philip Leder and Timothy Stewart of the University of California, San Francisco. The ruling was broad in scope, covering the so-called vectors in which the oncogene gets copied, the fertilized mouse egg containing the foreign DNA, and the fully-developed OncoMouse and its descendants.
Moreover, the Patent Commissioner noted that the animal was “not simply a transgenic mouse with an activated MYC gene; it is any transgenic mammal, excluding human beings, that contains in all its cells an activated oncogene that had been introduced into it or an ancestor at an embryonic stage.”
A gradually developing legal precedent had paved the way for this decision. In 1980, the US Supreme Court in Diamond vs. Chakrabarty ruled that an oil-digesting bacterium was patentable. In the majority opinion, Chief Justice Warren Burger affirmed the lower court in claiming that “the fact that micro-organisms are alive is a distinction without legal significance.” He wrote that patent law extends to “anything under the sun made by man.” Reinforcing this view, in 1987 the USPTO in Ex Parte Allen extended this first patent to a multi-cellular organism, deciding in favor of a claim over a type of oyster.Following the OncoMouse patent in 1988, other countries at the forefront of cancer research adopted similar guidelines — the European Patent Office in 1992, Japan in 1994, and Canada in 1998. The fact that these patents were issued, despite widespread opposition, indicates the reluctance of patent offices around the world to consider ethical and public policy questions. While many courts have invalidated biotechnology-related patents, such decisions have usually been made on technical grounds.
DuPont and Harvard University signed a memorandum of understanding giving the company exclusive rights to license the OncoMouse and control its use by researchers. In order to secure the right to royalties from “downstream” discoveries, DuPont imposed aggressive licensing agreements on the use of OncoMouse technologies.The San Francisco Chronicle wrote on June 3, 2002 that DuPont was “impeding the war on cancer by charging high fees to companies, imposing unusually strict conditions on university scientists and pushing an overly broad interpretation of which lab mice the patents cover.” As a result, many agreements with MIT, the University of California system, and the Memorial Sloan-Kettering Cancer Center in New York have been cancelled or put on hold. Beyond the use of OncoMouse, DuPont has argued that the Harvard patent enables the company to demand a fee for the use of “knockout” mice, a line of mice with mutations or deletions of critical tumor suppressor genes.What can be made of these anti-competitive practices? Industry advocates claim that intellectual property rights are a necessary incentive for innovation, as they entitle the holder to an “appropriate value” from commercial and non-commercial uses of their product or technique. They argue that patents hedge against financial risk in developing new technologies, especially those that require large initial investments. The problem with such arguments is that patents create not only incentives for innovation, but substantial market power for those to whom the patents are issued. In early-stage technologies and industries characterized by rapid innovation, broad patents tend to reduce future investment in research. A growing number of examples point to the adverse effects of patents on technology transfer. Limited monopolies allow the holder to impose significant costs on “second comers.” In the licensing of important health- and disease-related genetics research tools, the resulting delays and lost opportunities may be costly to public health. The problem is that debate over patenting in science too often focuses on only two issues: whether patents on living things, cells, tissue and DNA are ethically acceptable, and whether these ownership claims constitute a misuse or over-extension of the patent system. Less attention has been paid to whether patents act as a barrier to scientific innovation. But evidence points to at least two corrosive effects of intellectual property in this area. First, ownership rights that cover a wide array of technologies and basic materials in any one area tend to deter future research, especially if the costs of obtaining licenses and the conditions imposed on users are prohibitive. Gene and organism patents are a “toll booth” through which future scientists must pass, and in that sense create an anti-competitive environment. In contrast to the 1980s, when biotechnology patenting focused on deliverable commercial goods, claims are today laid increasingly on “upstream” materials, such as basic research tools, which affect the conduct of a large amount of laboratory work.
In the case of the OncoMouse, DuPont’s restrictions have curbed access to a key vehicle for emerging gene-related cancer treatments (such as synthetic proteins). The higher the costs of obtaining this model organism, the more biomedical innovations will be impeded, as researchers in the early stages of their work may choose to look elsewhere, not willing to pay steep up-front costs or abide by unyielding restrictions.Second, patents reduce incentives to disseminate results of biomedical research into the public domain. Since the passage of the Bayh-Dole Act in 1980, which enabled universities and non-profits to retain intellectual property rights to federally-funded inventions, the number of patents claimed by universities has grown from 250 to 31000 per year. Biotechnology now accounts for half of all patents filed by academic scientists. In this era of corporate entrepreneurship, the primary mission of universities — the dissemination of knowledge — is increasingly at risk. Secrecy and under-communication become the norm as faculty members withhold data from the scientific community to protect proprietary interests. Whatever the ultimate fate of the OncoMouse, this and other cases should move policymakers to rethink current patent and commercial licensing laws. A full ban on the patenting of genes and organisms remains an important central goal. Other proposed reforms include clarification of the “experimental use” exemption, which would allow university researchers to freely acquire and use patented inventions; a ban on patents for specific clinically useful technologies; and new policies to ensure that licensing agreements meet standards of fairness. These measures would help to revive the openness and accessibility of science, and so ensure that intellectual property not impede important biomedical developments.

The Wealth of Networks [Yochai Benkler]

Yochai Benkler has been working on questions of intellectual property policy and telecommunications policy for some time now, but his work has always seemed to operate slightly orthogonally to the canon du jour. He has always been respected as probably the smartest guy in the room at any given conference, but when the hot topic was, say, the problems with the political economy of copyright, Benkler was talking about spectrum commons; or when everyone wanted to talk about digital rights management or search engine bias, Benkler was talking about autonomy as a normative basis for information policy, or the social production of knowledge .
It wasn’t immediately apparent what were the connections between his interests, although it was clear that there was a theme that bound them all. More generally, those who thought about the myriad issues within internet policy, telecommunications regulation and intellectual property could see that all of them might be parts of a grander whole, and wondered what that whole might look like.
In The Wealth of Networks Benkler demonstrates how his interests are connected and how they have always been part of a grander vision. But he also provides something close to a General Theory of Information Policy for the networked age that begins to explain how we should think about topics as different as spectrum policy, copyright, user-generated content, network neutrality…well, the list pretty much encompasses all questions within internet law and policy. For someone used to reading legal scholarship in the cyberlaw arena, this book is remarkable. Academic legal writing tends to be driven by current policy problems—in the cyberlaw arena obvious recent examples include peer-to-peer filesharing and the music industry, the threat of digital rights management, the economics of copyright term extensions, problems with the anti-circumvention provisions of the Digital Millennium Copyright Act, and so on. This is not a criticism of the legal scholarship; indeed it is one of the great strengths of legal writing that it responds to the immediate concerns of society in a way that can guide policy and law making.

Benkler’s approach is different, much more in the vein of, say, Manuel Castells. He tries to articulate the changes in society generated by access to a network that allows about a billion people (and growing) to connect with each other virtually free, virtually instantaneously, and without typical expected barriers to entry and transaction costs that have driven our approach to policy to date. The social changes rendered by the internet is by now a venerable topic, and we’ve had ten years of cyberutopianism (the net will change the way people think, work, sleep, play, eat, drink, etc, etc) followed by the inevitable response of cyberskeptics patiently explaining (as though to impaired children) that the net changes little, the economics remains the same, governments will still regulate it, big business will still dominate it, etc etc. Benkler manages to revive the initial utopianism of the early days of the net, but does so in a way that captures the revolutionary opportunity of socially-produced information goods, without lapsing into the kind of boosterism that characterized early cyberutopianism and the ensuing dot com bubble.
The central argument of The Wealth of Networks is that the “digital networked economy” allows for a new modality for the production of information goods—a modality that Benkler usually terms “peer production’—that has hitherto been unrecognized by economists, policy-makers and scholars. Benkler begins by providing a range of examples of socially produced information goods, such as the Wikipedia, open source software, blogs, and so on. He explains how the modality that underlies the production of these goods is opaque to most theories of economic development, and makes the case for more careful attention to the significance of this modality. He also takes enormous effort to defend this modality and his vision of the internet from the myriad arguments that incumbents and skeptics might make against them. Thus, he defends “peer production” from concerns generated by economics and liberal theory. If you have ever wondered how open source might be economically sustainable, then you will find the answer here. You will also find arguments about the role of distributed networks in justice, international development, and freedom. It is here that his work moves from the descriptive to the normative, and so it’s possible to make the case that this is a general theory of how the internet is and should be.
It’s not hard to agree with Larry Lessig’s assessment that The Wealth of Networks is the most important recent book in the field. It generates a series of new questions about the nature of information and the policies that we have to regulate and produce it. But that said, it’s not without problems. Aside from the usual quibbles that reviewers always have—Was it really a good idea to draw an implicit comparison between the significance of Smiths’s The Wealth of Nations and this work?—two particular problems stand out. First, the book suffers from a lack of focus. One could take at face value that the book is about social production as an alternate modality of production; but this view has some problems. Notably, if read like this then one starts to wonder what isn’t produced by social production processes. Everything gets viewed in this light: so a discussion of NGO contributions to agricultural practice in the developing world is presented as being primarily about peer production when it seems to me to be a fairly pedestrian example of underproduction of certain types of goods as a result of the limits of private markets, and hence the need for public subsidy for this sort of good. This is not to say that any of the examples presented are wrong; in some form they all illuminate the potential of social production of various types of goods. But I don’t think it helps the argument to view so many types of innovation as being about social production when the link is tenuous.
There are other examples (the scale question of networks, the history of radio ownership, a critique of Sunstein’s ludicrous internet polarization thesis, etc etc) which made me wonder whether an alternate view of the book might not be more accurate: that it is a series of observations about the character of the internet, how it has a distributed nature that generates particular opportunities and dangers for policy, and what our policy responses should be. This is not inconsistent with the “peer production” thesis; it simply means that the observation about peer production of information goods is but one of the cyberspace policy questions that Benkler wants to address. This reading of the book indicates the scale of Benkler’s ambition, but does demonstrate that the scope of the book is broader than indicated in the introduction (and subtitle).
The second serious concern is not with the thesis but rather with the presentation, and specifically the strange view that the book seems to have of its audience. There are only a small number of endnotes for each chapter, and at best these mention (briefly) a couple of the authors cited in the text. And technical acronyms like “http” or “html” are defined in brackets, and PayPal is patiently explained to be “a widely used low-cost Internet-based payment service”. This approach signals that this is an accessible, populist work, like others in this field by people such as Larry Lessig (Code, The Future of Ideas, Free Culture), Siva Vaidhyanathan (The Anarchist in the Library) or Cass Sunstein ( But readers without a solid grounding in economics, liberal theory, political science and jurisprudence (and possibly network theory and internet architecture) are going to struggle through the book’s 500-or-so pages. It’s not an easy read, and Benkler doesn’t pander to the audience by dumbing down the arguments. Many sections are elaborately worked through, addressing all manner of likely concerns about the thesis presented that, for example, the internet demonstrates an intriguing scale of granularity for the purposes of democratic engagement, or why a number of the typical accounts of autonomy are consistent with Benkler’s view of social production. But this means that the book is really an academic work got up to look like Wired magazine. This poorly serves the scholarly readers because, although Benkler references the authors and theories on which he relies, many of his positions are controversial and reliant on arguments and positions that are eternally contested. Benkler is exceedingly fair in his account of, say, the principles of autonomy, redistributive justice or welfare economics. But each of these concepts admits of a range of views that simply cannot be dealt with in a scholarly fashion in a few pages and a couple of footnotes.
Unfortunately this approach also poorly serves the interested non-academic reader who—thinking this work is exactly what she needs to understand why Ohmynews is so important, or why Wikinews isn’t working—picks up the book expecting it to be both smart and accessible. It’s definitely smart, but it’s not built for the general reader. The danger is not so much that the reader won’t understand what is going on, so much as that she will wonder why she doesn’t get it. Benkler’s prose is routinely described as “dense”, which I once took to mean “if you don’t understand this then you’re dumb and it’s your fault”. I fear that too many readers have the same fear that the problem is with them, that they’re too dull or lazy or busy to take in the lessons here. It’s not impossible to follow what Benkler is saying, but I wished that he would say it directly. It’s clear that he can. The text fairly comes alive when it talks about the recursive/iterative moderation system behind Slashdot, or when discussing the role of blogs in the Trent Lott, Diebold, and “BoycottSBG” cases. But there are large swathes that are a challenge for those who, like me, are lazy.
It’s churlish, I know, to criticize a tour de force on the basis of difficult expression. (And I have deleted and reinstated this paragraph about ten times as I try to decide whether to say anything about it; I still wonder whether it’s worth commenting on this). If the work signaled that it was only scholarly, and was only talking to the limited range of scholars who address these issues professionally, then this would not be a failing and I wouldn’t say anything. But I’m worried that too many of the peer-producers—the blog writers, the open source software gurus, the amateurs who create for the love of it; in short the people who this book is written about—will pick up this work in the hope of understanding how their creativity fits into the grand scheme of innovation, and what their role will be in the amateur production sphere that promises to change the way that we view information goods within society. And they may not get past the introduction.
I hope that they will try. This is a revolutionary book, in all sorts of ways. The future of innovation and creativity is different from the past. Amateur hour looms: we are entering the era when commercial producers of content will no longer dominate. We should be grateful that we have Benkler’s exhaustive account of the significance of this radical change.

Monday, June 05, 2006

Flight data pact shot down [EU]

The BBC has just reported this morning's ruling of the European Court of Justice in Joined Cases C-317 and 318/04 European Parliament, supported by the European Data Protection Supervisor v European Council, supported by the European Commission that the EU-US agreement requiring airlines to transfer passenger data to the US authorities was not founded on an "appropriate legal basis".
Till now, within 15 minutes of each flight, European airlines have given US authorities 34 items of personal information concerning each passenger, including their names, addresses and credit card details. Washington has warned that it will impose heavy fines and deny landing rights for any airline failing to comply with the agreement and that passengers will be subject to long security checks on arrival, if the data is not sent in advance.The US says this data is used to combat terrorism, but the European Parliament has consistently opposed handing over the passenger details to the US, arguing that the US did not guarantee adequate levels of data protection.
The ECJ has given EU Member States until 30 September 2006 to find a new legal solution "for reasons of legal certainty", so there should be no short-term effect on travellers. The European Commission took its decision to permit the supply the information under the EU Data Protection Directive, but the court said that the directive does not govern the transmission of data collected for security purposes.
Full text of Directive 95/46 on the protection of individuals with regard to the processing of personal data and on the free movement of such data here.Further reports and comments in the EU Observer, WSTM-TV and the Independent Online.

Captain Copyright [Canada]

A bunch of online types report on the joys of Canada’s latest superhero – Captain Copyright.
He doesn’t rescue people from burning buildings, but he does teach children about the evils of copyright infringement. He also provides fun games for children and informs them of useful facts, like the average royalty for authors (though we suspect that this has more to do with publishers than copyright law) and the meaning of moral rights. Law Wire says that if children are taught all this at primary school, what will there be left for them to learn an university?

Friday, June 02, 2006

Supreme Court Overturns Predilection for Patent Infringement Injunctions [US]

According to the U.S. Supreme Court in the EBay v. MercExchange, No. 05-130, (May 15, 2006) in order to obtain an injunction in a patent case, the patent owner must demontsrate, "according to well-established principles of equity,"
that it has suffered an irreparable injury;
that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
that the public interest would not be disserved by a permanent injunction.
"These familiar principles apply with equal force to disputes arising under the Patent Act," wrote Justice Thomas in an unusually concise opinion vacating the judgment of the Federal Circuit:
Neither the District Court nor the Court of Appeals below fairly applied these traditional equitable principles in deciding respondent's motion for a permanent injunction. Although the District Court recited the traditional four-factor test, 275 F. Supp. 2d, at 711, it appeared to adopt certain expansive principles suggesting thatinjunctive relief could not issue in a broad swath of cases. Most notably, it concluded that a "plaintiff's willingness to license its patents" and "its lack of commercial activity in practicing the patents" would be sufficient to establish that the patent holder would not suffer irreparable harm if an injunction did not issue. Id., at 712. But traditional equitable principles do not permit such broad classifications.For example, some patent holders, such as university researchers or self-made inventors, might reasonably prefer to license their patents, rather than undertakeefforts to secure the financing necessary to bring their works to market themselves.
Such patent holders may be able to satisfy the traditional four-factor test, and we see no basis for categorically denying them the opportunity to do so. To the extent that the District Court adopted such a categorical rule, then, its analysis cannot be squared with the principles of equity adopted by Congress. The court's categorical rule is also in tension with Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U. S. 405, 422, 430 (1908), which rejected the contention that a court of equity hasno jurisdiction to grant injunctive relief to a patent holder who has unreasonably declined to use the patent.

In reversing the District Court, the Court of Appeals departed in the opposite direction from the four-factor test. The court articulated a "general rule," unique topatent disputes, "that a permanent injunction will issue once infringement and validity have been adjudged." 401 F. 3d, at 1338. The court further indicatedthat injunctions should be denied only in the "unusual" case, under "exceptional circumstances" and "in rare instances . . . to protect the public interest." Id., at 1338, 1339. Just as the District Court erred in its categorical denial of injunctiverelief, the Court of Appeals erred in its categorical grant of such relief. Cf. Roche Products v. Bolar Pharmaceutical Co., 733 F. 2d 858, 865 (CAFed 1984) (recognizingthe "considerable discretion" district courts have "in determining whether thefacts of a situation require it to issue an injunction").
Because we conclude that neither court below correctly applied the traditional four-factor framework that governs the award of injunctive relief, we vacate the judgment of the Court of Appeals, so that the District Court may apply that framework in the first instance. In doing so, we take no position on whether permanent injunctive relief should or should not issue in this particular case, or indeed in any number of other disputes arising under the Patent Act. We hold only that the decision whether to grant or deny injunctive relief rests within the equitable discretion of the district courts, and that such discretion must be exercised consistent with traditional principles of equity, in patent disputes no less than in other cases governed by suchstandards.
However, while the methodology of the Federal Circuit may have changed, the availability of injunctive relief is arguably not much different than it was before the decision. In a concurring opinion by Chief Justice Roberts, with whom Justices Scalia and Ginsburg joined, it was noted that even though historical practice does not justify a general rule that patent injunctions should issue, "there is a difference between exercising equitable discretion pursuant to the established four-factor test and writing on an entirely clean slate." When it comes to discerning and applying those standards, in this area as others, "a page of history is worth a volume of logic."On the other hand, a separate concurring opinion by Justice Kennedy, with whom Justices Stevens, Breyer, and Souter joined, warns district courts to "determine whether past practice fits the circumstances of the cases before them," especially with regard to so-called "patent trolls" and "business method patents:"

An industry has developed in which firms use patents not as a basis forproducing and selling goods but, instead, primarily for obtaining licensingfees. . . . When the patented invention is but a small component ofthe product the companies seek to produce and the threat of an injunction isemployed simply for undue leverage in negotiations, legal damages may well besufficient to compensate for the infringement and an injunction may not servethe public interest. In addition injunctive relief may have differentconsequences for the burgeoning number of patents over business methods, whichwere not of much economic and legal significance in earlier times. The potentialvagueness and suspect validity of some of these patents may affect the calculusunder the four-factor test.
To the extent earlier cases establish a pattern of granting an injunctionagainst patent infringers almost as a matter of course, this pattern simplyillustrates the result of the four-factor test in the contexts then prevalent.The lesson of the historical practice, therefore, is most helpful andinstructive when the circumstances of a case bear substantial parallels tolitigation the courts have confronted before.

Thursday, June 01, 2006

Patent Cooperation Treaty [Collocations]

WIPO's PCT Notification No.175 informs Law Wire that Malaysia is signing up to the Patent Cooperation Treaty, which will enter into force there on 16 August 2006. That's one day before El Salvador becomes PCT-operational, according to PCT Notification No.176.