Tuesday, October 30, 2007

Major Publishers Back National Geographic in Copyright Fight [International - Copyright]

The New York Times Co., Time Inc. and Newsweek Inc., among a dozen of the nation's largest publishers, have banded together with university presses, academic journals and national library associations to oppose a Florida freelance photographer whose 10-year battle to collect royalties from National Geographic could redefine the limits of copyright protection.

The publishers -- which also include Forbes, Martha Stewart Living Omnimedia, The Washington Post, The Chicago Tribune Co., Playboy Enterprises Inc., Hearst Corp., the Gannett Co. Inc., Duke University Press, Johns Hopkins University Press and the online legal archive JSTOR -- have petitioned the 11th U.S. Circuit Court of Appeals in Atlanta for permission to file amicus, or friend-of-the-court, briefs supporting The National Geographic Society, publisher of the 119-year-old magazine, National Geographic.

The publishers' attorneys argue that the U.S. Supreme Court's 2001 landmark copyright ruling, New York Times v. Tasini, 533 U.S. 483, allows the publishers to place entire publication libraries on CD-ROM and then sell them without seeking permission from -- or paying additional royalties to -- the freelance authors and photographers whose works are reproduced in those collections.

Tasini was a win for freelance writers against publishers who wanted to sell their articles to online databases without paying the writers additional fees.

But National Geographic and its publisher supporters have seized on language in Justice Ruth Bader Ginsburg's majority opinion in Tasini they say allows them to sell CD-ROMs and other products without violating the copyrights of freelance photographers.

A 2001 decision by the 11th Circuit, handed down three months before Tasini was issued, came down squarely in favor of Florida freelance photographer Jerry Greenberg, finding that National Geographic's CD magazine library was a "new product ... in a new medium for a new market." That case is called Greenberg I, No. 00-10510 (11th U.S. Cir.).

But this past June, a separate 11th Circuit panel looked at the Greenberg case again and, citing Ginsburg's language in the Tasini decision, reversed the 2001 panel and ruled for National Geographic. That case is Greenberg II, No. 05-16964 (11th U.S. Cir.).

The full 11th Circuit then vacated Greenberg II and agreed to hear the case en banc. The case has been scheduled for oral argument the week of Feb. 25.

Critical to Greenberg v. National Geographic Society is the U.S. Supreme Court's 2001 Tasini opinion and how it should be interpreted.

Dozens of publishers, libraries and universities now seeking to submit their views of the case to the 11th Circuit have signaled that the financial stakes stemming from Greenberg are significant.

After the 11th Circuit found in Greenberg I that National Geographic had infringed Greenberg's copyright by failing to secure his permission for the digital use of four of his photos, a Florida jury in 2004 awarded Greenberg $400,000. National Geographic had priced its CD library product at $119.99. Following Greenberg I, National Geographic had pulled the CD library from the market.

5 tips on how to avoid common IP disasters [General]

Intellectual property (IP) is the core of competitive advantage. Protecting IP requires both taking advantage of legal protections and being alert for situations in which IP may be created or lost.

Here are five common mistakes to avoid:

1. Hiring contractors without "work for hire" and "assignment of rights" agreements.

Tip: Contractors retain rights in works they create. Hence, you can pay for services (such as software or web site development) and do not have full ownership of the work product.

2. Assuming information on the Internet is in the "public domain."

Tip: There is no such thing as "public domain" on the Internet. Before using someone's work, without permission, you need to determine whether it is copyright-free or your usage is within the "fair use doctrine." Proper attribution to the author is required to avoid plagiarism.

3. Disclosing important information to prospective customers, suppliers or investors without a non-disclosure agreement (NDA).

Tip: Without an NDA, ideas may be stolen. But note: investors routinely refuse to sign NDAs, because they don't want future options restricted.

4. Not registering trademarks for a distinctive name or tagline.

Tip: To prevent someone using your business name, or one that is "confusingly similar," take advantage of trademark registration.

5. Not filing copyright registrations.

Tip: Many people think that putting a copyright notice on their work protects their rights. They are only partly right. If you register the copyright before an infringement occurs, you will have a great deal more leverage in enforcing your rights.

Friday, October 26, 2007

In David vs. Goliath Case, Intel to Pay $250 Million to End Patent Suit [Patents]

Transmeta Corp., a struggling Santa Clara, Calif., chipmaker, emerged with a transformative licensing deal Wednesday, as Intel Corp. agreed to pay it $250 million to settle a patent infringement suit Transmeta filed against the Silicon Valley titan last year.

Under the agreement announced Wednesday, Intel will pay $150 million up front with annual payments of $20 million for each of the next five years. In return, Intel gets a perpetual nonexclusive license to all of Transmeta's patents and patent applications.

Transmeta General Counsel John Horsley said the result gives the company "some immediate cash as well as a future income stream that will hopefully support our development and licensing business going forward."

Transmeta laid off three-quarters of its staff earlier this year, Horsley said, leaving it with just 40 employees today. The $250 million in payments from Intel dwarfed the company's market value, which on Tuesday was just $41.8 million. On Wednesday, shares of the company more than tripled.

Neither side wanted to go into details, but according to an Intel spokesperson, well-known mediator Anthony Piazza brought the two sides to an agreement.

"We were able to find a solution that was acceptable to both companies," Intel corporate spokesman for legal affairs Chuck Mulloy said. "We believe that this agreement is consistent with our longstanding practice of licensing technology in exchange for fair value."

Transmeta, with a legal department of two, took on Intel, which employs 240 in-house lawyers.

Transmeta GC Horsley joined the company in 2000 from the Federal Trade Commission, where he was chief counsel for intellectual property and technology matters. He helped take Transmeta public that year. The legal department's other lawyer, Bryn Ekroot, also holds a Ph.D. and is Transmeta's associate general counsel and senior IP director. The company was represented in the litigation by Ropes & Gray and Morris, Nichols, Arsht & Tunnell. Intel fielded a team of Weil, Gotshal & Manges lawyers led by Matthew Powers.

Transmeta sued Intel last year, claiming that most of Intel's current microprocessors infringe at least one of 11 Transmeta patents. Intel answered with a countersuit in January, accusing Transmeta of violating its own patents.

Earlier this year, Intel took an aggressive tack by asking the U.S. Patent and Trademark Office for an inter partes re-examination of some of Transmeta's patents. At the time, Transmeta complained that the request was aimed at delaying its suit, since judges often stay patent suits when a re-examination has been sought.

According to a PTO document, the re-examiner had indicated that one of Transmeta's patent claims ought to be rejected, but that conclusion was preliminary, and subject to challenge and further review.

Re-examinations have become an increasingly popular tool for accused infringers. The relatively new government process is "a very effective and cost-effective tool in litigation," according to Sonnenschein Nath & Rosenthal IP partner Tarek Fahmi, who isn't involved in the dispute. "I don't know to what extent it sped up the settlement process, but I'm sure it had an impact," Fahmi said.

Tuesday, October 23, 2007

Balanced and handy intellectual property system is a dare

The General Assembly of the World Intellectual Property Organisation (WIPO) is meeting from September 25 to discuss the Development Agenda, a proposal to put development at the heart of the work of the UN agency.

WIPO watchers see it is an opportunity for the agency to move beyond the narrow view that any and all IP protection is beneficial and use IP to spur development and foster innovation. Articles 7 and 8 of the TRIPS Agreement seek to ensure the transfer of technology to developing countries, but a significant knowledge gap and digital divide continue to separate the wealthy nations from the poor.

Kamal Idris, Director-General, Wipo, shared his thoughts on various topics in an e-mail interview with Business Line on the eve of the meeting. Idris said the huge challenge before the IP community today was a balanced and accessible IP system.

Excerpts from the interview:

WIPO members recently reached an agreement on the Development Agenda. Do you think it will transform the way WIPO works? Do you have any plan to align with the UN's Millennium Development Goals?

Discussions in the context of the WIPO Development Agenda are part of a number of activities that seek to enhance the development dimension in WIPO's work. Ever since I took over the leadership of the organisation in 1997, I have sought to launch new initiatives and to enhance existing activities to ensure that all of WIPO's member states are in a position to use the intellectual property system as a tool for development.

The impact of this fundamental shift in approach wherein intellectual property is perceived as a strategic means of promoting development rather than an end in itself has already been felt by a number of developing countries. Nations like India, China, Brazil, Republic of Korea, Singapore, to name a few, are successfully exploiting the intellectual property system and, as a consequence, are becoming more competitive in the global marketplace.

The way forward and the true impact of the Development Agenda process and other initiatives depend upon the political will of WIPO member states and their ability to establish common ground on key issues. The actionable outcome of these discussions will build on a number of initiatives spearheaded by the Organisation in recent years.

These include:

An expansion of the share of WIPO's budget for cooperation for development activities; strengthening of WIPO's activities to promote strategic use of IP for development; assisting developing countries and LDCs in meeting TRIPS-related obligations and in using the flexibilities available under that agreement; focusing on the delivery and development of practical mechanisms for enhanced access to the IP system; broadening the participation of developing countries in the formulation of global IP policy; expanding opportunities for countries to use their IP assets in e-commerce, thereby helping to narrow the digital divide; and promoting the funds in trust programme to secure extra budgetary funding for various development projects.

Earlier this year in June, I welcomed a major breakthrough by member states in their discussions on a development agenda for WIPO. In a great demonstration of foresight and commitment, negotiators made an important contribution to international efforts to promote the development of a balanced intellectual property system that is responsive to the needs and interests of all countries - developed and developing alike.

With the active support of the WIPO secretariat, member states have been able to make significant progress in plotting the future development of the intellectual property system.

These key discussions will continue in the context of the proposed Committee on Development and Intellectual Property, which is to be composed of member states and which will be open to the participation of all accredited intergovernmental and non-governmental organisations. It is expected that the WIPO General Assembly, which meets at the end of September, will endorse the establishment of this new Committee, which is expected to meet for the first time in early 2008.

The Millennium Development Goals (MDGs) provide a clear direction and outline specific targets for countries. WIPO is committed to supporting national efforts to use the IP system as a tool for development and thereby help to ensure that the IP system makes a positive contribution towards fulfilment of the MDGs. It is my hope, that ultimately, a more development-oriented approach to IP will enable developing countries to compete on a more equal footing in the global marketplace.

What is the role of WIPO in spreading patent literacy or awareness?

Greater awareness of IP among all sectors of society - policy-makers, government officials, the business community and the general public - about the relevance and role of IP in promoting economic, social and cultural development is of prime importance. A collective effort to demystify IP and to raise awareness about its potential is making the system more accessible to all.

Through various awareness-raising initiatives, we are working to promote a broader understanding of the fundamentals of IP, its potential, the importance of its protection, how the system functions and how to use it, as well as present and future challenges. Such understanding is achieved through the delivery of broad-based education and public awareness campaigns.

A solid grasp of the workings of different aspects of the IP system is a prerequisite in developing IP literacy and is vital for countries wishing to make full use of the IP system as a tool for economic growth. For example, patent literacy is a "must" if full advantage is to be taken of the mine of technical information that is available in patent documents.

Such information may be used to stimulate new inventions and to obtain a strategic business advantage by observing emerging trends both in technology and markets; developing data on competitors by, for example, monitoring their research activities; identifying key players in specific sectors; and searching for potential business partnerships and identifying licensing opportunities.

Patent information facilitates techniques such as patent mapping, which can provide a snapshot of the patent portfolio of major organisations in a given industry. It allows an analysis of competitive strengths and weaknesses of established and emerging firms; it allows identification of key technologies in a given field; indicates patenting trends across organisations and sub-technologies; and provides a countrywide overview of the distribution of patenting activity.

While WIPO has achieved a great deal in this area, much still needs to be done on a global level to raise awareness of the huge potential offered by patent information.

When these awareness raising initiatives go hand in hand with capacity building measures - strengthened IP legal and technical infrastructures, human resource development, and effective enforcement capabilities - it is possible to create a fertile environment in which to win broad acceptance of the value of IP for development.

How do intellectual property rights promote economic growth and trade, and reduce poverty?

The ability to generate ideas, innovate and create is inherent in each one of us. These are resources that every country possesses and it is the IP system, which gives them value, allowing them to be transformed into viable, tradable assets. Through astute use of the IP system to harness their creative resources, the economic fortunes of countries no longer depend on physical factors such as natural resource endowments and geographical location.

Indeed, in the era of knowledge-based economies, knowledge, information and ideas are the prime economic drivers and through use of the IP system it is possible to convert these ubiquitous intangible assets into concrete economic gain. Strategic use of the IP system, thus offers great promise in enabling developing countries to participate in the global economy on a more even footing than in the past.

Developing countries are increasingly finding that a balanced domestic IP system, which stimulates domestic innovation, allows them to obtain value from their creative resources. It will enable more opportunities for joint ventures, collaborative R&D, mergers and acquisitions, and franchising.

An effective and balanced domestic IP system also serves as a powerful magnet in attracting foreign direct investment with all its implications for technology transfer and human resource training.

The availability of an effective national IP system that delivers IP titles (patents, trademarks, designs, copyright and related rights) in an efficient, timely and cost-effective manner enables a country's inventors and creators to draw value from the fruits of their labour. Awareness of the advantages to be drawn from the use of each of these tools of the IP system, however, is the key to unlocking their economic potential.

For example, trademarks play a key role in wealth creation. Trademarks are a means by which a company is able to build its reputation in the marketplace and thereby increase unit sales, cement customer loyalty, assist in responding to competitive pressure, expand and maintain market share, and differentiate its products, making them extremely valuable assets.

Trademarks also help in introducing new product lines. They create opportunities for additional revenue streams by providing the foundation for franchise and licensing agreements.

The use of trademarks offers companies operating in developing countries great potential to build their commercial strength both nationally and internationally. Indeed, the exploitation of national identity and branding to attract investment and promote economic development has had noticeable success, particularly in niche and specialty marketing. In this respect, geographical indications are also a powerful tool with which to add value to prestige products from specific areas.

When creatively and strategically presented to the discerning consumer, both trademarks and geographical indications can bring a considerable competitive advantage. Consider, for example, Caf‚ de Colombia (Colombia), Tequila (Mexico), and Mysore Silk (India).

Such tools, by securing the legal differentiation of products, thus, help increase the value of local products thereby boosting the local economy (including job creation), and improve the economic situation of small producers and SMEs and may further serve to promote local traditions, crafts and culture.

Similarly, the IP system may also be used both to preserve and draw value from a country's traditional knowledge of which there is an abundant supply in the developing world. Strategic use of the IP system to add value to traditional knowledge and/or to prevent its misappropriation presents an opportunity for indigenous and local communities to promote their own development objectives. The international IP community is currently exploring ways to ensure recognition and reward for holders and custodians of traditional knowledge used in a commercial setting.

Developing countries that recognise the opportunities afforded by effective IP protection and which are fully integrated into the international IP system are also becoming increasingly strong competitors in the information technology sector - a sector in which the potential value is harnessed through the IP system. Many are realising that this dynamic sector offers fertile ground for innovation and economic benefit - as with minimal risk and investment the potential return is substantial.

How far are we from international patents? Closest we now have is the Patent Cooperation Treaty (PCT). Majority of the businesses think that PCT filing is a procedure for the grant of an international patent, though it is only a simplified mechanism to file the patent application in various countries. Does WIPO envisage any such mechanism for an international patent or to integrate the PCT filing for an international patent? What are constraints of WIPO from offering single patents? Companies can save time and money if there is a single patent application and patent granting authority.

The decision on whether or not to grant a patent rests with national or regional authorities responsible for this activity. Indeed, there is no such thing as a global patent. The PCT is a filing mechanism that simplifies the process of obtaining patent protection in multiple countries. Any change to international rules governing patents rests with WIPO member states. WIPO and its member states do not currently have plans to introduce a world patent.

PCT is now major revenue earner for WIPO. Are you satisfied with the working PCT?

I am very pleased with PCT operations, which began in 1978, and I take this opportunity to pay tribute to the hard-working staff of the system. The growth rate in the filing of PCT applications has been especially significant during the last decade.

It took 18 years from the beginning of PCT operations in 1978 to reach a total of 250,000 applications, but only four years to double that figure (500,000), and another four to double it again (1,000,000). Last year, a record 147,500 applications were filed under the PCT. Continued demand for use of PCT services, is a strong indication of value and utility of this service to the user community.

Moreover, consistent growth in the use of the international patent system is testimony to the continued importance of innovation, which has fuelled human progress for centuries. Indeed, some of the world's foremost innovation-based companies have recognised the strategic value of the PCT in their business planning. Innovation is critical in generating new products, which improve the quality of our lives, and in boosting the balance sheets of innovation-based companies and the health of national economies.

WIPO is committed to improving the services and productivity of the PCT system, and has made significant progress in this respect through the introduction of information technology (IT) systems. For example, the number of applications filed electronically increased by over 100 per cent in two years and filing on electronic media now exceeds paper filings.

IT has also been successfully deployed in the movement of applications and associated data between WIPO and the various national and regional offices within the system. In addition, WIPO has successfully managed the deployment of full electronic processing of applications, which has resulted in major productivity gains in the processing of PCT applications.

IT deployment has also assisted in making the world's technology (as outlined in patent applications) available online for free-of-charge consultation. Through WIPO website PatentScope it is now possible to consult over 1.3 million international applications which represent the most important technological advances of the past twenty years, in fully searchable form for free consultation by all.

The WIPO PCT receiving office has also experienced significant growth in its activities, recording significant increases in the number of international applications filed directly with them. The PCT receiving office provides applicants with an option to file their international applications directly with WIPO, rather than through the intermediary of a national or regional office.

WIPO is able to generate over 91 per cent of its income thanks to the services it provides to the IP user community to facilitate international IP protection for patents, trademarks, designs, etc. The PCT, which currently has a membership of 137 countries, is the largest of these services.

What is the progress of efforts to bring about substantive patent law harmonisation?

In recent years, discussions at WIPO's Standing Committee on the Law of Patents (SCP) have revealed divergences in the way in which the industrialised countries, on the one hand, and many of the developing countries, on the other, are viewing the issue. For the industrialised countries, harmonisation is important as a means of improving quality and contributing to greater work sharing amongst the various patent offices.

Many developing countries are more interested in seeing other policy issues, such as the impact of the patent system on other areas of public policy, discussed. They wish accordingly to broaden the issues under discussion. Considering these divergences, member states in 2006 requested the Chair of the WIPO General Assembly to hold consultations with member states on how to shape the future work program of the SCP. During those consultations, held in May and June 2007, member states discussed, as a possible approach, the commissioning of a report on the international patent system, which would address the interests and needs of all member states. The next WIPO General Assembly in September/October of this year will be asked to decide on this matter.

What is the idea behind bringing traditional knowledge, folklore under the IP rights regime? Does bringing more and more items under patent regime make it unwieldy?

The fundamental point is also a very simple one: there is no reason why the IP system should discount or otherwise discriminate against innovation and creativity in a traditional context merely because it is traditional or merely because it represents the collective endeavour of an indigenous people; equally, however, there are distinct characteristics of traditional knowledge systems that suggest that adapted or new forms of protection may be needed.

And the principle of prior informed consent, applied in practice, means that the holders of traditional knowledge should not be obliged in any way to make use of any aspect of the IP system - it has to be a matter of their own informed choice.

Thus WIPO is working firstly to enhance the practical and legal recognition of TK in the patent system, so as to reduce the likelihood of patents being illegitimately granted on TK; and, secondly, to build up, at the request of its member states and with the direct engagement and guidance of TK holders, mechanisms to protect TK against misuse and misappropriation in a manner that is appropriate for the needs, values and interests of indigenous communities and other holders of TK.

What is your take on the demand by developing countries that genetic resources should be handled by the WTO? A group of developing countries is proposing an amendment to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to make it mandatory to disclose the origin of genetic resources, such as a plant extract used in a medicine, in patent applications.

The idea of creating specific disclosure requirements for patents on inventions making use of genetic resources is clearly a major issue of the day, with important policy and practical implications for the functioning of the patent system and its interaction with other legal instruments and other policy domains.

It is therefore unsurprising that the issue has been raised in a number of distinct forums: in the WTO, as you mentioned, several countries have proposed to amend TRIPS to make such a mechanism mandatory.

Useful work and extensive debate on this issue is also proceeding in other forums as well, notably the Convention on Biological Diversity (CBD) and WIPO itself; UNCTAD has also commissioned a study on it. In WIPO, it has been considered in several processes, and the European Union and Switzerland have both recently tabled significant reform proposals that would give effect to such a disclosure requirement.

WIPO and the CBD have cooperated extensively on this issue - WIPO has prepared two major studies at the direct invitation of the CBD, involving extensive, open stakeholder consultation processes, and this extensive groundwork helps buttress the collective processes of debate and policymaking.

Ultimately, it is not a matter of which organisation should `own' this complex issue, but rather that there is open and constructive collaboration and debate, so that the ultimate outcomes are optimal for the crucial interests that are at stake - ensuring that the patent system functions to promote innovation based on genetic resources, transparency about such innovation, and appropriate and equitable sharing of the benefits, as required by the CBD. Parallel work on this inherently cross-cutting issue should help strengthen and broaden the base of developments in this area, rather than segmenting the issues restrictively.

What is WIPO going to break the logjam on broadcast treaty, which will give broadcasters intellectual property rights over broadcasts over and above existing copyright laws? Why are companies like Intel opposing it?

Discussions on a treaty to protect the rights of broadcasting organisations have been member-state driven. As such, it is up to the member states to decide on how to proceed with these talks. As you may know, this is one of the agenda items at the forthcoming session of the WIPO Assemblies from September 24 to October 3, 2007.

Related rights for broadcasting organisations have been recognised at the international level since 1961 under the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations. The draft treaty seeks to update the rights of broadcasting organisations in response to new technologies and at preventing broadcast signal piracy, that is to say exploitation and misappropriation of broadcast signals by unauthorised third parties.

A number of non-governmental organisations, including broadcasting organisation, civil society groups and private sector companies, have been participating in the negotiation process. This ensures that the diversity of views and interests are represented. As Director General, I support and welcome this inclusiveness and transparency. That said , it is not the function of the secretariat to interpret the position of various actors.

What is your take on data exclusivity? Is it another form of IP right?

While data protection has not been included as subject matter of any WIPO administered treaty, it is implicitly characterised as a form of intellectual property in the WTO TRIPS Agreement, as well as subject of detailed implementation through bilateral free trade agreements The approach taken to implementing protection of test data required for regulatory purposes differs considerably between WIPO member states, and the WIPO secretariat does not itself have a 'take' on this topical issue - in particular, it cannot assume the role of arbiter between these diverse views, and instead limits its contribution to technical support and background information.

This is again an issue on which WIPO member states have chosen to exercise flexibilities, e.g. establishing a regime of right-to-remuneration or one of exclusivity over data, by adopting exceptions and limitations to rights conferred.

The original legal basis of protection of such data under the TRIPS Agreement is in fact the WIPO-administered Paris Convention which establishes a very general principle on the suppression of unfair competition without stipulating in detail how that should be interpreted and applied at the national level, which remains an area of policy flexibility.

Product patent regime is perceived as a major hindrance towards access to cheap drugs for AIDS, cancer and other chronic diseases in poor and developing countries. What are the initiatives taken by WIPO to fulfil its obligations towards the common man in these countries?

WIPO offers support on many levels, always at the request of the countries concerned and subject to their own sovereign choices of legal and policy options. Relevant examples include advice on implementing the flexibilities in international IP standards to promote appropriate innovation and access, building domestic capacity to capture the benefits from indigenous innovation, achieving greater transparency in the actual use and reach of relevant patents, providing a neutral forum for the necessary international policy debates on the links between patents and public health, and promoting the recognition and protection of traditional knowledge systems which are important for sustainable health programs in many countries.

How do you see the move by countries such as Brazil and Thailand to introduce compulsory licensing?

A clear line needs to be drawn between the international legal framework, on the one hand, and the choices taken by sovereign countries to exercise their options within the flexibilities provided under international law, on the other. As a matter of fact, compulsory licences have been an important part of the multilateral legal framework of IP since their inclusion in the Art. 5 of the Paris Convention (Treaty Administered by WIPO) in the year 1925 (Hague Diplomatic Conference).WIPO provides support and technical information to assist developing countries to build up their domestic legal, policy and administrative capacity, but does not pass judgment on or otherwise assess the choices taken by national governments.

Given the different levels of economic development, culture and sociology of countries, there is demand for a more balanced IP system from developing countries. How do you strike a balance between these variables?

The huge challenge facing the IP community today is ensuring a balanced and accessible IP system - one that is relevant, e.g. one that serves the interests of all member states and of all stakeholders. As Director General, I have spearheaded efforts to promote international recognition of the strategic importance of IP for development and wealth creation with a view to ensuring the balance that you refer to. For instance, in 1998, I established the WIPO Academy to boost human resource capacity in developing countries.

I also established a special division to look at the specific needs of small and medium sized enterprises (SMEs), which constitute the backbone of most economies and develop practical tools for businesses to leverage IP. I also launched the WIPO global issues program to explore and address, in particular, the needs of indigenous and local communities with respect to traditional knowledge, traditional cultural expressions and access to genetic resources, and the interplay with broader issues such as cultural policy and protection of biodiversity.

I have also promoted initiatives to set up and strengthen collective copyright management societies around the world. Moreover, I established the Office of Strategic Use of IP for Development to promote strategic use of IP and empirical analysis of the economic benefits of IP, as well as a specific unit to assist LDCs to strengthen IP capacity and awareness.

An Enforcement Division with a mandate to raise awareness and assist in capacity building was also established and I have sought to promote an inclusive dialogue with all stakeholders including the creation of a special unit to handle relations with NGOs and civil society. I have taken steps to facilitate the participation of all stakeholders in international IP debates.

It is only by creating a better understanding of the complex issues and the concerns of all parties that it is possible to establish common ground on which to build agreement on workable and sustainable solutions. I am committed to inclusive dialogue and believe that it is the basis on which to build consensus.

Microsoft Concedes in European Antitrust Case [International]

Microsoft has given up its nine-year fight against antitrust regulators in Europe, saying today that it would not challenge a court judgment there and would share technical information with rivals on terms the software giant had long resisted.

The agreement was struck in Europe, but the more generous terms for licensing Microsoft’s intellectual property will be extended worldwide. To the extent the new terms enhance competition, consumers could benefit from lower prices and faster innovation in software.

European regulators and some software groups in Europe hailed the deal as a breakthrough that should particularly enhance competition in the market for the server software that powers corporate data centers and the Internet.

The Microsoft deal also leaves untouched a ruling last month by Europe’s second-highest court that provides a strong legal foundation for the European Union’s power to force a dominant company to share its intellectual property with its rivals.

But just how much effect the pact will have on the world software marketplace remains uncertain, because many issues in the case have been addressed through technical projects or previous legal settlements, according to some industry analysts.

As part of its past efforts to settle its antitrust problems, Microsoft has reached costly agreements with competitors that were its most outspoken critics, including Sun Microsystems, I.B.M. and Novell. A complaint by Sun in 1998 began the European antitrust investigation.

The private settlements between Microsoft and competitors, analysts say, typically included cross-licensing and technology-sharing provisions.

What is clear is how much Microsoft’s legal room for maneuver was undermined by the ruling last month by the Court of First Instance in Luxembourg. The court reaffirmed that Microsoft, the world’s largest software maker, had abused its market power and said the company must obey a 2004 European Commission order to share confidential computer code with competitors.

After the courtroom setback, Steven A. Ballmer, Microsoft’s chief executive, wrote a conciliatory letter to Neelie Kroes, the European competition commissioner, according to a commission official who declined to be named. Mr. Ballmer later flew to the Netherlands, where Ms. Kroes lives, and they agreed on the terms of the deal.

The upper hand, legal experts say, was certainly held by Ms. Kroes. “She was really negotiating from a position of strength, which she did not have before the ruling by the Court of First Instance,” said Andrew I. Gavil, a law professor at Howard University.

The move by Microsoft, according to industry analysts, is a significant step that the company wants to remove the lingering cloud that the European antitrust has cast over the company’s business and its stock price.

“Financially, the antitrust issues have not had a material effect on Microsoft, and it’s not yet clear that this agreement will have much impact on the software market,” said Charles di Bona, an analyst with Sanford C. Bernstein. “But it does help to remove the European cudgel that has been hanging over the company’s head. It removes an element of uncertainty, which shareholders hate.”

Microsoft has paid nearly 1 billion euros, or $1.43 billion, in fines since the commission’s initial ruling and could face up to 1.6 billion euros more, which began accumulating in December 2005 after Microsoft failed to provide the protocols. Ms. Kroes said she would decide before the end of the year whether Microsoft must pay the additional fines.

Ms. Kroes cast the agreement as a big win for Microsoft’s rivals, especially companies that rely on open-source software like the Linux operating system, an increasingly popular alternative to Microsoft. Linux has done particularly well on server computers, where its main competitor is Microsoft’s server software.

To thrive in the marketplace, open-source software must work well with Microsoft’s desktop programs, notably the Windows personal computer operating system. More than 90 percent of all PC’s run on Windows.

The European order mandates that Microsoft share its technology information on fair terms, so that competing software can work smoothly, or interoperate, with Windows desktop software. It was those terms of interoperability that will be much more favorable to Microsoft competitors, so that the company’s dominance in product cannot thwart competition in another, closely related software market.

“These changes in Microsoft’s business practices, in particular towards open-source developers, will profoundly affect the software industry,” Ms. Kroes said in a statement. “The repercussions of these changes will start now and will continue for years to come.”

Microsoft said it would not pursue a final appeal to the European Court of Justice, which could have drawn the case out another two to three years. Microsoft said it would make the server protocols available for purchase through its Web site, www.microsoft.com/protocols.

Under the agreement, software developers will only pay a one-time fee of 10,000 euros, or $14,300, to gain access to Microsoft’s communications protocols, which specify how to exchange data between Windows and rival products. These protocols are trade secrets, not patents. If competitors want to license Microsoft’s patents, they must pay a per-unit royalty of 0.4 percent of the value of the product sold. Microsoft had originally demanded 5.95 percent of sales as royalties.

“This is a huge breakthrough,” said Georg Greve, president of the Free Software Foundation-Europe, a group that had challenged Microsoft’s practice of using confidential server protocols. “Microsoft is finally doing what the commission ordered it to do. This will level the playing field.”

Friday, October 19, 2007

Nokia and Qualcomm Face Off in Europe [Patents - International]

The future of the mobile industry hangs in the balance as a battle over intellectual property and royalties between technology titans Nokia (NOK) and Qualcomm (QCOM) comes to a head. Billions of dollars in revenues and profits are at stake. And once again, a dispute involving U.S. companies has landed in the lap of the Brussels-based European Commission, known for its high-profile antitrust victory over Microsoft (MSFT) and more recent pursuit of U.S. chipmakers Intel (INTC) and Rambus (RMBS).

In one corner is Qualcomm, which has built its highly profitable business on developing and licensing intellectual property for mobile communications, especially the CDMA standard, which it invented. Though admired in the industry, Qualcomm also engenders resentment for the rich royalties it collects on its patents. Indeed, rivals say the "supernormal" profits Qualcomm earns from royalties on third-generation (3G) mobile technology amount to a kind of "tax" on the entire mobile industry that trickles down to higher prices for consumers.

Qualcomm's intellectual property is at issue because when the 3G mobile standard was being developed a decade ago, the San Diego company held key patents on the underlying technology, known as W-CDMA, that was adopted by the industry. Qualcomm agreed to license those technologies to other companies on reasonable terms, and as a result, its patented inventions became an integral part of 3G.

A Formal Case Against Qualcomm

In the other corner is Nokia, the giant of handsets, with more than 35% market share and plenty of intellectual property of its own. Nokia already pays lots of royalties to Qualcomm. Investment bank Nomura Securities in London figures the fees could amount to nearly $1.1 billion in 2008 alone. But Nokia argues that the royalties are too high relative to the value of Qualcomm's patents, and has teamed up with a half-dozen other tech firms to try to force them down.

Two years ago, Nokia and its allies asked the European Commission's antitrust division to investigate Qualcomm's licensing fees, and on Oct. 1, the Commission opened a formal case against Qualcomm. In their original complaint, Nokia, Broadcom (BRCM), Ericsson (ERIC), Texas Instruments (TXN), NEC (NYPNY), and Panasonic Mobile Communications (MC) alleged that Qualcomm overcharges for its intellectual property and has used potentially abusive techniques to prolong its position in mobile-phone technology.

If antitrust officials find Qualcomm's behavior has breached European competition rules, the Commission could impose fines as high as 10% of Qualcomm's annual revenues. In a worst-case scenario, it could even break apart Qualcomm's chipmaking and licensing businesses.

Holding the Industry Hostage

The Commission case comes amid a welter of private squabbles between Qualcomm and its adversaries. The company is embroiled in a long-running series of lawsuits with Broadcom, a rival U.S. maker of communications chips. One of the disputes led to a temporary ban on importing handsets containing Qualcomm technology into the U.S. The company devised a way to work around it, but admits that the solution won't solve all of the legal issues in the case (BusinessWeek.com, 8/7/07).

Another dispute led a federal judge to quash two of Qualcomm's patents on compressing video signals, ruling in August that Qualcomm's behavior exposed "a carefully orchestrated plan and deadly determination to hold hostage the entire industry." Qualcomm, which is appealing that decision, is so mired in these and other legal battles that it will spend an estimated $200 million in lawyers' fees in 2007 alone.

Nokia and Qualcomm, meanwhile, are deadlocked in their own royalty negotiations after a previous contract between the companies expired on Apr. 9. The Finnish phonemaker claims Qualcomm is demanding too high a price for a new contract, and the companies have been forced to resort to arbitration. A Los Angeles panel will decide who is right, and the result could add or subtract hundreds of millions of dollars in profits for either company.

Qualcomm Defends Royalty Fees

The rest of the mobile industry is likely to use the outcome of the arbitration as a yardstick for future negotiations with Qualcomm, so if Nokia wins, it could whack Qualcomm's business model. "This is high stakes at the poker table," says Ben Wood, director of British mobile consultancy CCS Insight.

No doubt about that. Qualcomm earned one-third of its $7.53 billion in 2006 revenues—and 71% of profits—from royalties. The company has spent billions of dollars in mobile technology R&D and argues that its fees are deserved compensation for its extensive innovation.

Indeed, Qualcomm turns the tables on Nokia, arguing that the phonemaker asked for the EU antitrust investigation as a way of forcing Qualcomm back to the bargaining table. "Nokia wants to pay less, and as part of their negotiating tactics they are pulling every lever then can," says Andrew Gilbert, president of Qualcomm Europe. "Let's see through this for what it is."

The heart of the European Commission case is whether Qualcomm's licensing terms are "fair, reasonable, and non-discriminatory." This legal principle, often applied in intellectual-property cases, says that owners of essential patents should not be able to hold an industry hostage by charging exorbitant prices for access to the technology. This is especially important when companies have had their patents incorporated into an industry standard, as was the case with Qualcomm and W-CDMA.

Little Choice But to License

"Qualcomm became dominant based on a promise not to charge monopoly rent and not to distort competition in downstream products," says Jay Johnson, a vice-president and assistant general counsel at Texas Instruments, one of the complainants in the EC case. "Once the W-CDMA standard was fixed on that basis, they turned around and did exactly what they promised not to do. That's bad for manufacturers, standards, and consumers."

Europe's mobile industry never really wanted to license Qualcomm's technology in the first place, but it had little choice. The homegrown European GSM standard was running out of gas—and the best alternative for next-generation mobile hinged on the Qualcomm-controlled CDMA. The companies agreeing to the standard now say they assumed Qualcomm would charge proportionally less for the patents used in W-CDMA than it did for the older CDMA because its technology represented a smaller percentage of the total intellectual-property content of a 3G phone. But instead, they say, Qualcomm still charges around 5% of the wholesale price of each handset—the same rate as for CDMA.

That fee, said the European Commission in a statement when it launched its Qualcomm case, may have raised the cost of 3G, slowed its rollout, and brought about "all the related negative consequences for economic efficiency associated with inhibited growth of the standard." The Commission also says that Qualcomm's alleged misbehavior could harm the standard-setting process more generally, as well as the adoption of the future generations of mobile technologies.

Damning Allegations

Not surprisingly, Qualcomm has a different view, arguing that it's the quality not quantity of patents that count. Because 3G is utterly dependent on CDMA technology, Qualcomm says it has the right to charge the same rate. What's more, the economic arguments put forth by Qualcomm's adversaries may not fly. Analyst Richard Windsor of Nomura Securities thinks the Commission will have a tough time proving that Qualcomm's pricing has hurt 3G. Handset prices have dropped dramatically in the last six months, to about €100 ($142) and the entire 3G market finally seems to be thriving, Windsor argues.

Other issues raised by Qualcomm's adversaries could be more damning. They allege that the company has engaged in exclusionary business practices, such as offering better royalty terms to customers who agree to buy all their W-CDMA chips solely from Qualcomm. The Commission might have an easier time proving such behavior and putting a stop to it. Rivals also say Qualcomm tries to skew technical standards in its favor by pressuring handset makers to vote for Qualcomm's proposals—or risk supply disruptions or other punishment. Qualcomm's Gilbert says he is "very confident" that European officials will find all of these allegations "baseless."

Is the Commission's case another sign of European regulators run amok? After all, this is the same antitrust group that has pursued Microsoft and Intel and is now investigating memory-chip designer Rambus. (Rambus is alleged to have participated in a standard-setting process without revealing its own pertinent patents and then attempting to collect royalties from users of the standard, a practice known as "patent ambush.") It's true that European antitrust officials are more aggressive these days than their U.S. counterparts. But their investigations aren't being dreamed up by bureaucrats in Brussels: All of these cases were initially demanded in part by U.S. companies, including Sun Microsystems (JAVA), Novell (NOVL), and Advanced Micro Devices (AMD).

One of Many Battles

Maurits Dolmans, an attorney in the Brussels office of Cleary Gottlieb Steen & Hamilton who represents plaintiffs in both the Qualcomm and Rambus cases, argues that the weighty questions being considered by the Commission are essential issues for the digital age. "If these companies get away with distorting the standards process, it could stifle standardization in all areas, depriving consumers of the benefits of standards," Dolmans says. "This type of behavior slows down innovation and makes technology more expensive."

The Commission has put the Qualcomm case on a fast track, but it will still be at least a year before a decision. In the meantime, the mobile industry awaits the Los Angeles arbitration ruling between Nokia and Qualcomm—and the outcome of a score of other legal battles involving patents and intellectual property. One way or another, a lot more such disputes are likely to end up either in court or in the hands of the European Commission.

Friday, October 12, 2007

Tips and Tricks of Counterfeit LItigation

In "Tips and Tricks of Counterfeit Litigation," Emily Burns and Grant P. Fondo explain for PLI why you ahould

  • Conduct your preliminary investigation quickly, quietly and accurately
  • Notify the U.S. Attorney (for ex parte authority)
  • Consider involving other governmental agencies (e.g., Postal Service, Homeland Security or Customs Enforcement)
  • Ensure all your evidence is properly before the court
  • Know the local bond requirements (in case the goods turn out to be real) and
  • Coordinate with the U.S. Marshals

ASIA Domain Name Registrations Open October 9, 2007

DotAsia, the not-for-profit organisation that has been delegated the responsibility for operating the .Asia top-level domain registry, will open its first sunrise registration period on October 9, 2007 for governmental reserved names, and registered trademarks and service marks:

  • Governments or relevant bodies may “activate” (i.e. register) domains from the Reserved Names list compiled in Pre-Sunrise.
  • Marks must be applied for before March 16, 2004 (SR2a Cut-Off Date)
  • Marks must be issued and valid upon domain registration application
  • Applicant must have demonstrable usage of Mark (in the class if applicable) registered
    Registrant must be owner, co-owner or assignee of Mark
  • Documentary evidence is not mandatorily required, but required upon request
Read more in their "Introduction to the .ASIA Sunrise (pdf)"and "Launch Schedule & Summary (pdf)."

Tuesday, October 09, 2007

African practitioners urged to adopt intellectual property


African medical practitioners have been urged to use their intellectual property rights in order to patent and protect traditional medicines and indigenous knowledge. Health Minister Manto Tshabalala-Msimang made this call on Monday, at the Africa regional consultative meeting on Public Health, Innovation and Intellectual Property.

"The implementation of continental initiatives with focus on research and development of traditional medicine need to be enhanced," said the health minister.

"It is therefore important to discuss issues relating to the protection of indigenous knowledge systems."

The two-day meeting is part of the World Health Organisation's (WHO) initiative to develop a global strategy and plan of action aimed at enhancing needs-driven, essential health research and development that is relevant to diseases which are disproportionately affect developing countries.

"This consultation is essential to enable Africa to have a common position on this very important global discussion.

"The bulk of disease burden is in developing countries and Africa in particular," the minister said.

The high prices of medicine, she said makes it imperative that Africa takes a common position on issues of fair trade with regard to medicines affecting public health and the consultative meeting will seek to consolidate Africa's position on this matter.

The meeting was attended by representatives of at least 16 African countries and experts from various local and international organisations including the WHO.

In April this year, South Africa established the Medicinal Plant Incubator Project (MPIP) to protect its indigenous plants.

This would be achieved by ensuring those who needed to use them did not pluck the plant species in an uncontrolled manner from the wild.

The indigenous plants would be grown in a nursery environment, well cared for and be sold to traditional healers and others who have a use for them.

Agriculture, Conservation and Environment Khabisi Mosunkutu said that project has, as one of its primary objectives, a duty to ensure the preservation, propagation, recording and informing the public how to manage ethnobotany.

This is a critical task especially considering the local and international pressure arising from competing land use and sheer arrogance from some quarters, in relation to biodiversity.

Ethnobotany is the science which studies how plants are used in various cultures.

According to the MEC, the World Health Organisation estimates that between 70 and 80 percent of the populations of developing countries rely on traditional medicine.

Over 30 000 of South Africa's plant species are said to utilised as medicine and about 350 of these are still commonly used and traded as medicinal plants.

It is estimated that almost 20 000 tons of medicinal plants are used by at least 27 million consumers each year.

"This places considerable strain on the wild populations from which these products are harvested," Mr Mosunkutu said at the time.

He said in Gauteng, numerous species are harvested especially from the province's grasslands which are already under pressure through the demand of land for housing and agriculture.

The success of this project he added would ensure that consumers could have easier access to culturally acceptable and affordable that promotes their physical and spiritual well being.

Other benefits of the project would include access by healers to a regular supply of plants that are important for treating some ailments, thereby promoting their businesses.

A larger range of plants would be available for healers to dispense and for consumers to purchase.

Google gets into 'data privacy' hot water

Google's proposed purchase of online ad giant DoubleClick would lead to "a massive violation of data privacy rights", says a German data protection expert.

As reported by web legal experts Out-law.com, the Data Protection Commissioner of the German state of Shleswig-Holstein Thilo Weichert has sent his views to Europe's Competition Commissioner Neelie Kroes saying that the $3.1 billion merger would result in the "fundamental provisions of the European Data Protection Directive [being] violated."

Weichert's views rely on the assumption "that in the event of a takeover of DoubleClick the databases of that company will be integrated into those of Google" he said.

"Such an approach contradicts fundamental data privacy principles of the European Union: limited specific use, transparency, the right to object, the protection of sensitive data and the right to having data deleted," he wrote in the letter.

Monday, October 08, 2007

2nd Circuit Reinstates Copyright Claims Against Singer

Copyright infringement claims can go forward against Mary J. Blige, the "Queen of Hip-Hop Soul," the 2nd U.S. Circuit Court of Appeals ruled Friday, reversing a lower court determination.

Songwriter Sharice Davis filed suit against Blige and others, claiming the singer used two of Davis' songs on a 2001 hit album without giving her any credit. But Davis' co-author, Bruce Chambliss, transferred his rights to the songs to his son, Bruce Miller -- a defendant in the case -- one day before being deposed.

Southern District of New York Judge Charles S. Haight Jr. held in Davis v. Blige, 419 F. Supp. 2d 493, that Davis could not sue Blige and others over Blige's songs "LOVE" and "Keep it Moving" because "Davis' [alleged] status as joint owner with Chambliss, who in turn transferred his interests to Miller, bars her from stating a claim for copyright infringement against Miller, or any other of the defendants, [who are] his licensees."

The 2nd Circuit disagreed in Davis v. Blige, 05-6844-cv, In a decision by Judge José A. Cabranes, it held that an action for infringement by the co-author of a song could not "be defeated by the 'retroactive' transfer of copyright ownership from another co-author to an alleged infringer."

Judge Ralph K. Winter and Eastern District Judge Edward R. Korman, sitting by designation, joined in the decision.

Davis alleged that "LOVE" and "Keep it Moving," two of the songs on Blige's triple platinum album called "No More Drama," infringed on the copyrights to two of her songs.

"She claims that 'LOVE' is virtually identical to her composition 'L.O.V.E.' and that 'Keep It Moving' bears substantial similarity to her composition 'Don't Trade in My Love,' Judge Carbranes said.

Davis did not receive any song-writing credit on Blige's album for the songs she says were co-written by her and Chambliss, who is not a party in the case.

Davis said she met Blige, who is Miller's sister and Chambliss' stepdaughter, in the late 1990s. She said she performed "L.O.V.E." for Blige at that time, and that Miller subsequently approached her on behalf of Blige, seeking to buy several of her songs, including "L.O.V.E." Davis allegedly declined the offer.

In August 2001, defendants Ausur Music, Mary J. Blige Publishing, Bruce Miller Publishing, and Kwame Holland Publishing registered "LOVE" and defendant Universal Musica MCA Music Publishing, and Blige, Miller, and Dana Stinson registered "Keep It Moving" with the U.S. Copyright Office.

In February 2002, Miller agreed to provide Universal with "an exclusive license to exploit his copyright interest in the Album compositions as well as his copyright interests in any other compositions not previously assigned to other music publishing companies."

In August 2002, Davis registered her compositions with the Copyright Office, and listed Chambliss as a co-author. A year later, she filed her suit, alleging claims under the Copyright Act. She also stated claims under New York law for unfair competition, unjust enrichment and violations of New York's consumer protection statutes.

Discovery in the case ensued. But just one day before Chambliss was to be deposed, he allegedly transferred interest in the disputed songs to Miller.

"Defendants argue that, as a result of the transfer agreements, Miller became a co-owner of the disputed compositions as of the date of the creation of the compositions," Cabranes said. "Accordingly, they contend that, because Davis cannot sue a co-owner of her copyright for infringement, Davis's suit is barred against Miller and those to whom Miller had licensed the disputed compositions (including Blige and the other defendants)."

The circuit said the written transfer agreements "cannot extinguish Davis' accrued infringement claims against any of the defendants."

Richard J.J. Scarola and Alexander Zubatov of Scarola Ellis in Manhattan represent Davis.

"We are thrilled with the decision because it allows a meritorious case to go forward, and more broadly it establishes a legal principle that has not been addressed at the circuit court level," Scarola said.

Jonathan D. Davis, a Manhattan attorney at Jonathan D. Davis, P.C., who represents Blige, said his client intends to seek a hearing before the full appellate court.

The other defendants were represented by Cynthia S. Arato of Gibson Dunn & Crutcher, Andrew H. Bart of Jenner & Block, and Gregory J. Watford and George T. Gilbert, who are both Manhattan solo practitioners.

Friday, October 05, 2007

Facebook warned on safety claims [International]

The social networking website Facebook has been warned that it could face a consumer fraud charge for failing to live up to claims that youngsters there are safer from sexual predators than at most sites and that it promptly responds to concerns, a spokesman for New York Attorney General Andrew Cuomo said Sunday.

"We expect an immediate correction eliminating the dangers exposed by our investigation," said the spokesman, Jeffrey Lerner.

Cuomo announced last week that he had subpoenaed Facebook after he said the company did not respond to "many" complaints by investigators who were solicited for sex while posing as 12- to 14-year-olds on the site.

Officials from Cuomo's office met with Facebook on Friday after they said Facebook took three days to answer calls and emails from state investigators.

An official in Cuomo's office said he and others are scheduled to meet with Facebook representatives this week and anticipate changes will follow immediately.

"We said, 'You have got to make accurate representations on your website," said the official, who spoke on the condition of anonymity because court filings haven't yet been made. "What we told them is, 'Correct the language describing the site and stop marketing yourself as this pristine website ... parents have a misimpression. You can't mislead people."

Lerner said Facebook's contention of being safer than most sites was accurate when it started out as a closed site 3 1/2 years ago. But it's now much larger, and the safeguards and apparently the response times for complaints aren't what they once were, he said.

There was no immediate response to email and phone messages left for a Facebook representative. But a statement issued a week ago stated the company was concerned about Cuomo's claim that sexual predators could use the site to meet with children.

"We strive to uphold our high standards for privacy on Facebook and are constantly working on processes and technologies that will further improve safety and user control on the site," Facebook spokeswoman Brandee Barker said in the statement.

Lerner said Facebook has continued to promise to cooperate.

Thursday, October 04, 2007

DuPont turns its legal department into a profit center

DuPont, the chemical maker, has turned its 195-person legal department from a drain on profits into a moneymaker.

The company's lawyers brought in $290 million in revenue last year, including a $92 million asbestos settlement with more than a dozen insurers.

The asbestos agreement in December 2006 resulted from a three-year-old DuPont program to find ways to generate revenue by filing lawsuits the company would not otherwise have initiated, or by seeking licenses from companies using its patents.

The legal department has brought in $630 million since 2004, according to Thomas Sager, assistant general counsel at DuPont.

"I felt we were oftentimes perceived as a cost center and a drag on earnings," Sager said during an interview at DuPont's headquarters in Wilmington, Delaware. The legal department's budget was about $230 million in 2006, he said.

Lawyers at International Business Machines and Qualcomm are also cracking down on patent violations to generate income. DuPont, the third-largest U.S. chemical company after Dow Chemical and Exxon Mobil Chemical, has gone a step further by letting its lawyers shift from filing paperwork to filling the company's coffers.

The department generated more than 1 percent of total revenue at the company last year.

DuPont lawyers are scouring files for potential contract claims or signs of anti-competitive behavior that may lead to antitrust damages.

Company lawyers, who are pressing their outside firms to work on a contingency-fee basis to keep costs for the new litigation program down, are also trying to bring in money by recovering debts DuPont had written off.

"It's big money," said Rees Morrison, a consultant at Hildebrandt International. "I don't know of other companies doing it."

DuPont has a committee of lawyers who are charged with identifying ways to recover money and calculate an expected return each year.

"We've asked them to serve as our eyes and ears and identify through whatever means - word of mouth, periodicals, trade press - opportunities where DuPont might advance a claim or where we believe our rights have been perhaps infringed," Sager said.

In 2004, DuPont's legal rainmakers brought in $108 million, Sager said, followed by $235 million in 2005. The high of $290 million last year was helped by the insurance settlement.

The settlement stemmed from a Texas lawsuit DuPont filed against the insurers for reimbursement of asbestos claims for plastic products and building materials dating from the early 1970s.

The push has come at a time when companies are faced with higher costs in their law departments. A survey published this month by Hildebrandt said U.S. corporate legal bills rose 6 percent last year.

Company lawyers often worry about hurting earnings, said Susan Hackett, senior vice president of the Association of Corporate Counsel, an organization in Washington for lawyers who practice in the legal departments of corporations and other private sector organizations. DuPont is in the middle of a three-year campaign to cut fixed costs by $1 billion.

"General counsel struggle regularly with quantifying the value they provide so they are seen as contributors rather than cost centers," Hackett said.

Still, Hackett said lawyers should not take too much credit for recouping money in lawsuits over products that other business units created.

"It's a difficult line they walk if they try to send a message that they are responsible for the underlying value of products and services," Hackett said.

Sager said most of DuPont's intellectual property cases were geared toward recovering money rather than defending the company's own patents. While declining to identify specific cases, he said DuPont typically had a docket of 15 to 20 active intellectual property cases and was a plaintiff in about three-quarters of those.

DuPont also recovered $5 million from four shipping companies over price-fixing claims.

The goal of DuPont's lawyers is to recover $100 million in 2007, less than they have recovered during the three-year program. The target is lower because it is less certain that they can find large recovery opportunities, Sager said.

"It's a function of the pipeline," he said.

The company has turned to focusing on debts that the company had written off and is trying to sell about $80 million in claims it is owed by Brazilian farmers for pesticides.

It will probably sell the claims to "any of the major institutions that play in Latin finance," said William O'Connor, a lawyer at the New York office of Crowell & Moring, who represents DuPont. He says he is also trying to sell DuPont's claims in bankrupt companies like auto part makers.

Since the early 1990s, DuPont cut its list of the law firms it hired to 42 from 450 to reduce costs.

DuPont is also altering its relationships with outside lawyers by requiring them to forgo traditional billing by the hour and handle cases for a share of any recovery.

"We want them to have some skin in the game," said Sager.

The firms that handled the insurance settlement last year, Kirkpatrick & Lockhart Preston Gates Ellis, based in Pittsburgh, and MehaffyWeber, based in Beaumont, Texas, reduced or waived their hourly rates and shared about $15 million of the settlement.

One company that wants to mimic DuPont's efforts is Hillenbrand Industries, a maker of coffins and hospital beds based in Batesville, Indiana.

Its general counsel, Patrick De Maynadier, and two other company lawyers visited Sager in April to learn about DuPont's recovery program. Hillenbrand is starting its own program and has hired two law firms to work on a partial contingency fee basis.

"We felt like we had a duty to find opportunities where we might be leaving money on the table," De Maynadier said.

Balanced and handy intellectual property system is a dare

The General Assembly of the World Intellectual Property Organisation (WIPO) is meeting from September 25 to discuss the Development Agenda, a proposal to put development at the heart of the work of the UN agency.

WIPO watchers see it is an opportunity for the agency to move beyond the narrow view that any and all IP protection is beneficial and use IP to spur development and foster innovation. Articles 7 and 8 of the TRIPS Agreement seek to ensure the transfer of technology to developing countries, but a significant knowledge gap and digital divide continue to separate the wealthy nations from the poor.

Kamal Idris, Director-General, Wipo, shared his thoughts on various topics in an e-mail interview with Business Line on the eve of the meeting. Idris said the huge challenge before the IP community today was a balanced and accessible IP system.

Excerpts from the interview:

WIPO members recently reached an agreement on the Development Agenda. Do you think it will transform the way WIPO works? Do you have any plan to align with the UN's Millennium Development Goals?

Discussions in the context of the WIPO Development Agenda are part of a number of activities that seek to enhance the development dimension in WIPO's work. Ever since I took over the leadership of the organisation in 1997, I have sought to launch new initiatives and to enhance existing activities to ensure that all of WIPO's member states are in a position to use the intellectual property system as a tool for development.

The impact of this fundamental shift in approach wherein intellectual property is perceived as a strategic means of promoting development rather than an end in itself has already been felt by a number of developing countries. Nations like India, China, Brazil, Republic of Korea, Singapore, to name a few, are successfully exploiting the intellectual property system and, as a consequence, are becoming more competitive in the global marketplace.

The way forward and the true impact of the Development Agenda process and other initiatives depend upon the political will of WIPO member states and their ability to establish common ground on key issues. The actionable outcome of these discussions will build on a number of initiatives spearheaded by the Organisation in recent years.

These include:

An expansion of the share of WIPO's budget for cooperation for development activities; strengthening of WIPO's activities to promote strategic use of IP for development; assisting developing countries and LDCs in meeting TRIPS-related obligations and in using the flexibilities available under that agreement; focusing on the delivery and development of practical mechanisms for enhanced access to the IP system; broadening the participation of developing countries in the formulation of global IP policy; expanding opportunities for countries to use their IP assets in e-commerce, thereby helping to narrow the digital divide; and promoting the funds in trust programme to secure extra budgetary funding for various development projects.

Earlier this year in June, I welcomed a major breakthrough by member states in their discussions on a development agenda for WIPO. In a great demonstration of foresight and commitment, negotiators made an important contribution to international efforts to promote the development of a balanced intellectual property system that is responsive to the needs and interests of all countries - developed and developing alike.

With the active support of the WIPO secretariat, member states have been able to make significant progress in plotting the future development of the intellectual property system.

These key discussions will continue in the context of the proposed Committee on Development and Intellectual Property, which is to be composed of member states and which will be open to the participation of all accredited intergovernmental and non-governmental organisations. It is expected that the WIPO General Assembly, which meets at the end of September, will endorse the establishment of this new Committee, which is expected to meet for the first time in early 2008.

The Millennium Development Goals (MDGs) provide a clear direction and outline specific targets for countries. WIPO is committed to supporting national efforts to use the IP system as a tool for development and thereby help to ensure that the IP system makes a positive contribution towards fulfilment of the MDGs. It is my hope, that ultimately, a more development-oriented approach to IP will enable developing countries to compete on a more equal footing in the global marketplace.

What is the role of WIPO in spreading patent literacy or awareness?

Greater awareness of IP among all sectors of society - policy-makers, government officials, the business community and the general public - about the relevance and role of IP in promoting economic, social and cultural development is of prime importance. A collective effort to demystify IP and to raise awareness about its potential is making the system more accessible to all.

Through various awareness-raising initiatives, we are working to promote a broader understanding of the fundamentals of IP, its potential, the importance of its protection, how the system functions and how to use it, as well as present and future challenges. Such understanding is achieved through the delivery of broad-based education and public awareness campaigns.

A solid grasp of the workings of different aspects of the IP system is a prerequisite in developing IP literacy and is vital for countries wishing to make full use of the IP system as a tool for economic growth. For example, patent literacy is a "must" if full advantage is to be taken of the mine of technical information that is available in patent documents.

Such information may be used to stimulate new inventions and to obtain a strategic business advantage by observing emerging trends both in technology and markets; developing data on competitors by, for example, monitoring their research activities; identifying key players in specific sectors; and searching for potential business partnerships and identifying licensing opportunities.

Patent information facilitates techniques such as patent mapping, which can provide a snapshot of the patent portfolio of major organisations in a given industry. It allows an analysis of competitive strengths and weaknesses of established and emerging firms; it allows identification of key technologies in a given field; indicates patenting trends across organisations and sub-technologies; and provides a countrywide overview of the distribution of patenting activity.

While WIPO has achieved a great deal in this area, much still needs to be done on a global level to raise awareness of the huge potential offered by patent information.

When these awareness raising initiatives go hand in hand with capacity building measures - strengthened IP legal and technical infrastructures, human resource development, and effective enforcement capabilities - it is possible to create a fertile environment in which to win broad acceptance of the value of IP for development.

How do intellectual property rights promote economic growth and trade, and reduce poverty?

The ability to generate ideas, innovate and create is inherent in each one of us. These are resources that every country possesses and it is the IP system, which gives them value, allowing them to be transformed into viable, tradable assets. Through astute use of the IP system to harness their creative resources, the economic fortunes of countries no longer depend on physical factors such as natural resource endowments and geographical location.

Indeed, in the era of knowledge-based economies, knowledge, information and ideas are the prime economic drivers and through use of the IP system it is possible to convert these ubiquitous intangible assets into concrete economic gain. Strategic use of the IP system, thus offers great promise in enabling developing countries to participate in the global economy on a more even footing than in the past.

Developing countries are increasingly finding that a balanced domestic IP system, which stimulates domestic innovation, allows them to obtain value from their creative resources. It will enable more opportunities for joint ventures, collaborative R&D, mergers and acquisitions, and franchising.

An effective and balanced domestic IP system also serves as a powerful magnet in attracting foreign direct investment with all its implications for technology transfer and human resource training.

The availability of an effective national IP system that delivers IP titles (patents, trademarks, designs, copyright and related rights) in an efficient, timely and cost-effective manner enables a country's inventors and creators to draw value from the fruits of their labour. Awareness of the advantages to be drawn from the use of each of these tools of the IP system, however, is the key to unlocking their economic potential.

For example, trademarks play a key role in wealth creation. Trademarks are a means by which a company is able to build its reputation in the marketplace and thereby increase unit sales, cement customer loyalty, assist in responding to competitive pressure, expand and maintain market share, and differentiate its products, making them extremely valuable assets.

Trademarks also help in introducing new product lines. They create opportunities for additional revenue streams by providing the foundation for franchise and licensing agreements.

The use of trademarks offers companies operating in developing countries great potential to build their commercial strength both nationally and internationally. Indeed, the exploitation of national identity and branding to attract investment and promote economic development has had noticeable success, particularly in niche and specialty marketing. In this respect, geographical indications are also a powerful tool with which to add value to prestige products from specific areas.

When creatively and strategically presented to the discerning consumer, both trademarks and geographical indications can bring a considerable competitive advantage. Consider, for example, Caf� de Colombia (Colombia), Tequila (Mexico), and Mysore Silk (India).

Such tools, by securing the legal differentiation of products, thus, help increase the value of local products thereby boosting the local economy (including job creation), and improve the economic situation of small producers and SMEs and may further serve to promote local traditions, crafts and culture.

Similarly, the IP system may also be used both to preserve and draw value from a country's traditional knowledge of which there is an abundant supply in the developing world. Strategic use of the IP system to add value to traditional knowledge and/or to prevent its misappropriation presents an opportunity for indigenous and local communities to promote their own development objectives. The international IP community is currently exploring ways to ensure recognition and reward for holders and custodians of traditional knowledge used in a commercial setting.

Developing countries that recognise the opportunities afforded by effective IP protection and which are fully integrated into the international IP system are also becoming increasingly strong competitors in the information technology sector - a sector in which the potential value is harnessed through the IP system. Many are realising that this dynamic sector offers fertile ground for innovation and economic benefit - as with minimal risk and investment the potential return is substantial.

How far are we from international patents? Closest we now have is the Patent Cooperation Treaty (PCT). Majority of the businesses think that PCT filing is a procedure for the grant of an international patent, though it is only a simplified mechanism to file the patent application in various countries. Does WIPO envisage any such mechanism for an international patent or to integrate the PCT filing for an international patent? What are constraints of WIPO from offering single patents? Companies can save time and money if there is a single patent application and patent granting authority.

The decision on whether or not to grant a patent rests with national or regional authorities responsible for this activity. Indeed, there is no such thing as a global patent. The PCT is a filing mechanism that simplifies the process of obtaining patent protection in multiple countries. Any change to international rules governing patents rests with WIPO member states. WIPO and its member states do not currently have plans to introduce a world patent.

PCT is now major revenue earner for WIPO. Are you satisfied with the working PCT?

I am very pleased with PCT operations, which began in 1978, and I take this opportunity to pay tribute to the hard-working staff of the system. The growth rate in the filing of PCT applications has been especially significant during the last decade.

It took 18 years from the beginning of PCT operations in 1978 to reach a total of 250,000 applications, but only four years to double that figure (500,000), and another four to double it again (1,000,000). Last year, a record 147,500 applications were filed under the PCT. Continued demand for use of PCT services, is a strong indication of value and utility of this service to the user community.

Moreover, consistent growth in the use of the international patent system is testimony to the continued importance of innovation, which has fuelled human progress for centuries. Indeed, some of the world's foremost innovation-based companies have recognised the strategic value of the PCT in their business planning. Innovation is critical in generating new products, which improve the quality of our lives, and in boosting the balance sheets of innovation-based companies and the health of national economies.

WIPO is committed to improving the services and productivity of the PCT system, and has made significant progress in this respect through the introduction of information technology (IT) systems. For example, the number of applications filed electronically increased by over 100 per cent in two years and filing on electronic media now exceeds paper filings.

IT has also been successfully deployed in the movement of applications and associated data between WIPO and the various national and regional offices within the system. In addition, WIPO has successfully managed the deployment of full electronic processing of applications, which has resulted in major productivity gains in the processing of PCT applications.

IT deployment has also assisted in making the world's technology (as outlined in patent applications) available online for free-of-charge consultation. Through WIPO website PatentScope it is now possible to consult over 1.3 million international applications which represent the most important technological advances of the past twenty years, in fully searchable form for free consultation by all.

The WIPO PCT receiving office has also experienced significant growth in its activities, recording significant increases in the number of international applications filed directly with them. The PCT receiving office provides applicants with an option to file their international applications directly with WIPO, rather than through the intermediary of a national or regional office.

WIPO is able to generate over 91 per cent of its income thanks to the services it provides to the IP user community to facilitate international IP protection for patents, trademarks, designs, etc. The PCT, which currently has a membership of 137 countries, is the largest of these services.

What is the progress of efforts to bring about substantive patent law harmonisation?

In recent years, discussions at WIPO's Standing Committee on the Law of Patents (SCP) have revealed divergences in the way in which the industrialised countries, on the one hand, and many of the developing countries, on the other, are viewing the issue. For the industrialised countries, harmonisation is important as a means of improving quality and contributing to greater work sharing amongst the various patent offices.

Many developing countries are more interested in seeing other policy issues, such as the impact of the patent system on other areas of public policy, discussed. They wish accordingly to broaden the issues under discussion. Considering these divergences, member states in 2006 requested the Chair of the WIPO General Assembly to hold consultations with member states on how to shape the future work program of the SCP. During those consultations, held in May and June 2007, member states discussed, as a possible approach, the commissioning of a report on the international patent system, which would address the interests and needs of all member states. The next WIPO General Assembly in September/October of this year will be asked to decide on this matter.

What is the idea behind bringing traditional knowledge, folklore under the IP rights regime? Does bringing more and more items under patent regime make it unwieldy?

The fundamental point is also a very simple one: there is no reason why the IP system should discount or otherwise discriminate against innovation and creativity in a traditional context merely because it is traditional or merely because it represents the collective endeavour of an indigenous people; equally, however, there are distinct characteristics of traditional knowledge systems that suggest that adapted or new forms of protection may be needed.

And the principle of prior informed consent, applied in practice, means that the holders of traditional knowledge should not be obliged in any way to make use of any aspect of the IP system - it has to be a matter of their own informed choice.

Thus WIPO is working firstly to enhance the practical and legal recognition of TK in the patent system, so as to reduce the likelihood of patents being illegitimately granted on TK; and, secondly, to build up, at the request of its member states and with the direct engagement and guidance of TK holders, mechanisms to protect TK against misuse and misappropriation in a manner that is appropriate for the needs, values and interests of indigenous communities and other holders of TK.

What is your take on the demand by developing countries that genetic resources should be handled by the WTO? A group of developing countries is proposing an amendment to the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) to make it mandatory to disclose the origin of genetic resources, such as a plant extract used in a medicine, in patent applications.

The idea of creating specific disclosure requirements for patents on inventions making use of genetic resources is clearly a major issue of the day, with important policy and practical implications for the functioning of the patent system and its interaction with other legal instruments and other policy domains.

It is therefore unsurprising that the issue has been raised in a number of distinct forums: in the WTO, as you mentioned, several countries have proposed to amend TRIPS to make such a mechanism mandatory.

Useful work and extensive debate on this issue is also proceeding in other forums as well, notably the Convention on Biological Diversity (CBD) and WIPO itself; UNCTAD has also commissioned a study on it. In WIPO, it has been considered in several processes, and the European Union and Switzerland have both recently tabled significant reform proposals that would give effect to such a disclosure requirement.

WIPO and the CBD have cooperated extensively on this issue - WIPO has prepared two major studies at the direct invitation of the CBD, involving extensive, open stakeholder consultation processes, and this extensive groundwork helps buttress the collective processes of debate and policymaking.

Ultimately, it is not a matter of which organisation should `own' this complex issue, but rather that there is open and constructive collaboration and debate, so that the ultimate outcomes are optimal for the crucial interests that are at stake - ensuring that the patent system functions to promote innovation based on genetic resources, transparency about such innovation, and appropriate and equitable sharing of the benefits, as required by the CBD. Parallel work on this inherently cross-cutting issue should help strengthen and broaden the base of developments in this area, rather than segmenting the issues restrictively.

What is WIPO going to break the logjam on broadcast treaty, which will give broadcasters intellectual property rights over broadcasts over and above existing copyright laws? Why are companies like Intel opposing it?

Discussions on a treaty to protect the rights of broadcasting organisations have been member-state driven. As such, it is up to the member states to decide on how to proceed with these talks. As you may know, this is one of the agenda items at the forthcoming session of the WIPO Assemblies from September 24 to October 3, 2007.

Related rights for broadcasting organisations have been recognised at the international level since 1961 under the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations. The draft treaty seeks to update the rights of broadcasting organisations in response to new technologies and at preventing broadcast signal piracy, that is to say exploitation and misappropriation of broadcast signals by unauthorised third parties.

A number of non-governmental organisations, including broadcasting organisation, civil society groups and private sector companies, have been participating in the negotiation process. This ensures that the diversity of views and interests are represented. As Director General, I support and welcome this inclusiveness and transparency. That said , it is not the function of the secretariat to interpret the position of various actors.

What is your take on data exclusivity? Is it another form of IP right?

While data protection has not been included as subject matter of any WIPO administered treaty, it is implicitly characterised as a form of intellectual property in the WTO TRIPS Agreement, as well as subject of detailed implementation through bilateral free trade agreements The approach taken to implementing protection of test data required for regulatory purposes differs considerably between WIPO member states, and the WIPO secretariat does not itself have a 'take' on this topical issue - in particular, it cannot assume the role of arbiter between these diverse views, and instead limits its contribution to technical support and background information.

This is again an issue on which WIPO member states have chosen to exercise flexibilities, e.g. establishing a regime of right-to-remuneration or one of exclusivity over data, by adopting exceptions and limitations to rights conferred.

The original legal basis of protection of such data under the TRIPS Agreement is in fact the WIPO-administered Paris Convention which establishes a very general principle on the suppression of unfair competition without stipulating in detail how that should be interpreted and applied at the national level, which remains an area of policy flexibility.

Product patent regime is perceived as a major hindrance towards access to cheap drugs for AIDS, cancer and other chronic diseases in poor and developing countries. What are the initiatives taken by WIPO to fulfil its obligations towards the common man in these countries?

WIPO offers support on many levels, always at the request of the countries concerned and subject to their own sovereign choices of legal and policy options. Relevant examples include advice on implementing the flexibilities in international IP standards to promote appropriate innovation and access, building domestic capacity to capture the benefits from indigenous innovation, achieving greater transparency in the actual use and reach of relevant patents, providing a neutral forum for the necessary international policy debates on the links between patents and public health, and promoting the recognition and protection of traditional knowledge systems which are important for sustainable health programs in many countries.

How do you see the move by countries such as Brazil and Thailand to introduce compulsory licensing?

A clear line needs to be drawn between the international legal framework, on the one hand, and the choices taken by sovereign countries to exercise their options within the flexibilities provided under international law, on the other. As a matter of fact, compulsory licences have been an important part of the multilateral legal framework of IP since their inclusion in the Art. 5 of the Paris Convention (Treaty Administered by WIPO) in the year 1925 (Hague Diplomatic Conference).WIPO provides support and technical information to assist developing countries to build up their domestic legal, policy and administrative capacity, but does not pass judgment on or otherwise assess the choices taken by national governments.

Given the different levels of economic development, culture and sociology of countries, there is demand for a more balanced IP system from developing countries. How do you strike a balance between these variables?

The huge challenge facing the IP community today is ensuring a balanced and accessible IP system - one that is relevant, e.g. one that serves the interests of all member states and of all stakeholders. As Director General, I have spearheaded efforts to promote international recognition of the strategic importance of IP for development and wealth creation with a view to ensuring the balance that you refer to. For instance, in 1998, I established the WIPO Academy to boost human resource capacity in developing countries.

I also established a special division to look at the specific needs of small and medium sized enterprises (SMEs), which constitute the backbone of most economies and develop practical tools for businesses to leverage IP. I also launched the WIPO global issues program to explore and address, in particular, the needs of indigenous and local communities with respect to traditional knowledge, traditional cultural expressions and access to genetic resources, and the interplay with broader issues such as cultural policy and protection of biodiversity.

I have also promoted initiatives to set up and strengthen collective copyright management societies around the world. Moreover, I established the Office of Strategic Use of IP for Development to promote strategic use of IP and empirical analysis of the economic benefits of IP, as well as a specific unit to assist LDCs to strengthen IP capacity and awareness.

An Enforcement Division with a mandate to raise awareness and assist in capacity building was also established and I have sought to promote an inclusive dialogue with all stakeholders including the creation of a special unit to handle relations with NGOs and civil society. I have taken steps to facilitate the participation of all stakeholders in international IP debates.

It is only by creating a better understanding of the complex issues and the concerns of all parties that it is possible to establish common ground on which to build agreement on workable and sustainable solutions. I am committed to inclusive dialogue and believe that it is the basis on which to build consensus.