Thursday, October 04, 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.

Intellectual Property Website - IPWatchdog.com - Auction Nearing Completion

Since IPWatchdog.com was originally launched in October 1999, it has been owned and maintained by Gene Quinn, a patent attorney, law professor, author and inventor. Now Quinn is selling the site and domain name via auction, and the auction is nearing completion. The auction will wrap up on Saturday, October 6, 2007 at 5:00pm Eastern Time. For information about the auction or to place a bid you can simply go to http://www.IPWatchdog.com and click on the “Bid Now” banner near the top right of the page.

IPWatchdog.com has managed to become one of the most popular intellectual property websites on the Interent. In addition to extraordinary search engine ranking for highly desirable terms in the competitive marketplace of intellectual property advertising via the Internet, the site has a Technorati ranking of 245,054 out of 107.7 million blogs tracked by the popular blog portal.

IPWatchdog.com also compares extremely favorably with other hot intellectual property websites, including IntelPropLaw.com, BitLaw.com, Patents.com and PatentCafe.com. For example, according to Compete.com, IPWatchdog.com has an average stay per visitor of 5 minutes and 53 seconds, which ranks first among this group, with IntelPropLaw.com at 4:01, BitLaw.com at 2:44, PatentCafe.com at 2:05 and Patents.com at :29. In terms of monthly rank IPWatchdog.com fares even better. According to Quantcast.com, IPWatchdog.com ranks first among this group with a ranking of 69,661 out of over 20 million websites on the Internet, while IntelPropLaw.com ranks 137,918, BitLaw.com ranks 250,241, Patents.com ranks 571,499 and PatentCafe.com ranks 294,480.

The starting bid for IPWatchdog.com was $10,000, and the present bid is $35,000. When asked about the bidding Quinn is excited and optimistic. “I have received a number of serious inquiries both online at the auction site and privately. Interest seems to be growing so I do believe the bidding will go higher, perhaps significantly higher,” Quinn said. When asked about whether a reserve has been set Quinn explained: “yes, I did set a reserve price, which is fairly common for these types of auctions. While I won’t say what the reserve price is I can tell you that the reserve price has not yet been met.”

When asked why he is now selling IPWatchdog.com Quinn explained that “it is time for me to move on. I am embarking on a new business related to the mentored writing of patent applications via an interactive software platform. With this new business I will not have the time to dedicate to keeping IPWatchdog.com fresh. I have taken it about as far as one person can. I will miss it no doubt, but it is time.”

RIAA Awarded $222,000 in First Jury Trial

The RIAA adds a notch to its belt of legal victories

“This is what can happen if you don’t settle,” said RIAA attorney Richard Gabriels, speaking to reporters just outside the Duluth, Minnesota Courthouse, minutes after Jammie Thomas was found liable for copyright infringement to the tune of $222,000.

Thomas, a single mom with two kids, left the courthouse without comment and did not speak with reporters.

Under the username “Tereastarr,” Thomas was found sharing just over 1,700 files via the Kazaa network on February 21, 2005. Of those 1,700 tracks, 24 were named – including music from popular artists such as AFI, Green Day, and Aerosmith – and for each one she was held liable for $9,250 worth of damages, coming to a grand total of $222,000.

Brian Toder, Thomas’ defense attorney, maintained that there existed no proof that Thomas was the person behind the keyboard, noting that Thomas or her computer may have been the victim of zombie botnet, spoofing attacks, or malicious crackers. “All we know is that Jammie Thomas didn’t do it,” said Toder, adding that Thomas was “not the person marauding as Tereastarr.”

This defense did not appear to hold up as it was found that Thomas used “Tereastarr” all around the internet, including online shopping, chat services, e-mail, and even dating services. The offending songs were linked to her cable modem’s MAC address, as well as her home IP address.

Gabriels called Thomas’ defense “misdirection, red herrings, and smoke and mirrors.”

Complicating Thomas’ defense was testimony from an ex-boyfriend saying while he had never seen her actively downloading music, she did have her hard drive replaced a month after her computer was picked up in the RIAA’s dragnets. Toder said that this was due to hard drive problems – something Thomas’ ex-boyfriend remembered her complaining about beforehand – but the RIAA argued that she had it changed to cover her tracks.

Forensic scientists could not find any evidence of file sharing on her new hard drive, and her old hard drive was not admitted as evidence.

Capitol Records v. Jammie Thomas, as Thomas’ loss is more formally known, was the first lawsuit of its kind to proceed before a jury as well as a landmark case that set precedent heavily favoring the RIAA in future legal battles. U.S. District Judge Michael Davis ruled that one could be guilty of copyright infringement merely by the act of making copyrighted songs available for download; as a result the RIAA did not need to establish that Thomas at her computer at the time her was accessed by investigators, nor did they need to prove that anyone actually downloaded the music she offered.

While the RIAA no longer publishes the number of lawsuits it’s filed in its four-years-and-counting legal campaign against file sharers, many publications speculate that that number stands anywhere between 18,000 and 36,000 lawsuits, with untold more settling long before the actual trial.

Wednesday, September 19, 2007

Outsourcing and Offshoring Gain Traction in U.K. Legal Market

On the western edge of New Delhi, amid the glittering office developments of the suburb of Gurgaon, the newest part of Clifford Chance's global empire is open for business. Unlike the firm's other offices, however, this outpost is not practicing law, still a prohibited activity in India for overseas law firms. Instead, the Clifford Chance office houses a group of Indian IT and accounting specialists, part of the Magic Circle firm's back-office function. By moving these operations out of higher-cost offices in Europe and the United States, chief executive David Childs predicts, the firm will save £30 million ($60 million) during the next three years.

When it comes to outsourcing, the U.K. legal community still lags far behind many multinational corporations and major U.S. firms -- but U.K. firms are beginning to catch on. Clifford Chance's new Gurgaon facility makes it the first global firm to locate part of its support business in India. Two other Magic Circle firms -- Allen & Overy and Linklaters -- have already outsourced some back-office functions to Indian contractors, while Eversheds has outsourced a large chunk of its IT function to a U.K.-based specialist.

No major U.K. firms have gone so far as to outsource legal work, and not every British firm is convinced of the virtues of outsourcing even back-office functions. Freshfields Bruckhaus Deringer has yet to make a move in that direction, although chief executive Ted Burke admits that outsourcing is something that the firm will have to look at. Slaughter and May is even less interested. "Clifford Chance operates a different business model from ours in the approach to international legal services," says practice partner David Frank. "Their decision to outsource to India will be driven by economies of scale that are not relevant to us."

Lawyers and consultants attribute the legal sector's reticence to conservatism and concerns over confidentiality. But outsourcing companies such as Williams Lea are now targeting British law firms, confident that demand will grow. "Many of our other markets have reached a plateau, and we've noticed an upsurge in interest from the U.K. legal market," says Tony Davies, business development director for Williams Lea's legal division in the United Kingdom.

Among U.K. firms, A&O took the lead in 2003 when it signed an agreement with outsourcing specialist OfficeTiger to move part of its document management function to the Indian city of Chennai. In Linklaters' more modest foray offshore, it now draws IT support from India-based IT specialist Pro Systems.

Then there's Clifford Chance's more radical bid to cut costs. In 2004 the firm outsourced part of its document production function to an Indian center operated by Integreon Managed Solutions Inc., a global outsourcing specialist, which then advised Clifford Chance on setting up its own facility in New Delhi. To date, the firm has focused on moving basic accounting and IT functions to India, covering such things as payments to suppliers, invoices, expenses and IT system development.

In contrast to outsourcing efforts by other Magic Circle firms, Clifford Chance's Indian staff are all direct employees of the firm. "It's all fairly small-scale compared with what financial institutions have done, but having 100 people in New Delhi will be a big deal for us," Childs says. Two senior members of staff, operations director Wayne Phillips and financial controller Jo Harvey, have relocated to India to manage the office. By keeping the facility part of Clifford Chance, the firm maintains direct control while taking advantage of economies of scale. "You need to treat the offshore center as an integral part of the firm, with complete transparency between it and the rest of the firm," Childs says. "It sounds fairly obvious, but these are areas where you can make mistakes."

The question for Clifford Chance is how much of its business it can transfer overseas. So far it has only moved IT and accounting operations out of London, with New York and Germany next on the list. Childs refuses to comment on which, if any, business areas might follow. "We don't want to affect morale among what is a very good cadre of business services staff [in the U.K.]," Childs says. Outsourcing specialists such as Roy Marshall of Magellan Consultancy Services Ltd. suggest that paralegal work could be handled from a lower cost base offshore; marketing materials or pitch documents could also be prepared from a remote facility.

Outside the Magic Circle, Eversheds has undertaken one of the most ambitious outsourcing projects, signing a deal last December with European IT services provider Computacenter plc to outsource a large chunk of its IT operation. This agreement covers such functions as Eversheds' IT service desk and IT training and saw 79 former employees of the firm transfer to two U.K. Computacenter offices. U.K. managing partner Bryan Hughes describes the move as "largely cost-neutral." Instead, the drivers were access to more sophisticated IT systems and a realization that the IT function could be managed better by a dedicated supplier. "We're not IT experts," Hughes points out. Although Eversheds hasn't moved anything offshore, Hughes expects to visit India later this year to assess various options. "There is a hint of inevitability about it," he says.

To a large extent, the U.K. firms are catching up with many of their U.S. counterparts. Orrick, Herrington & Sutcliffe, perhaps the most aggressive outsourcer, first established its own global operations center in West Virginia in 2002 to handle some support services in IT, finance, human relations and marketing. Two years ago it outsourced the rump of its document management function to Williams Lea, again in West Virginia. Baker & McKenzie, meanwhile, was one of the first to transfer some support functions abroad to what it rather imaginatively calls an "insourced offshore facility" -- a 350-strong operation in Manila that handles various IT and marketing functions, saving Baker around $10 million a year.

Reducing overhead is at the top of the list for most firms considering the outsourcing route. A legal secretary in India, handling basic secretarial work such as transcribing files, costs £12,500-£14,000 ($26,000-$28,000) annually, compared with up to £35,000 ($70,000) in London. Suppliers and consultants, however, stress that it's not just about the bottom line. "Cost is the hook, but improved service levels and getting access to better qualified people are definitely ancillary benefits," says Magellan's Marshall. Having access to IT or secretarial support located overseas can mean that a firm is covered 24 hours a day and thus is better placed to cope with the demands of cross-border cases or deals.

Marshall admits that the whole concept of outsourcing still carries some negative connotations. "The gut reaction is that it's about call centers, but this has nothing to do with call centers," he says, alluding to the customer complaints that recently forced British companies Powergen Ltd. and Lloyds TSB Group plc to close their Indian call centers. Some firms have concerns over keeping client matters confidential. Williams Lea says that it has yet to have a security breach; keeping control of offshore operations, as Clifford Chance and Baker & McKenzie do, provides even more of a safeguard.

The pressure to improve profitability while associate wages and property costs continue to soar means that interest in outsourcing and offshoring among British firms will only grow. Clifford Chance's New Delhi pioneers can expect company soon.



Richard Lloyd
The American Lawyer
09-19-2007



Friday, September 14, 2007

Sony loses privacy complaint over Unfit Kids [International - Data Privacy]

A documentary that cited video games among the reasons for childhood obesity did not treat Sony unfairly when criticising the PlayStation maker's refusal to sponsor a fitness scheme for kids. Sony also lost a claim that the company's privacy was breached.

The ruling was published by Ofcom, the regulator for the UK's communications industries, yesterday. Sony Computer Entertainment UK Ltd had complained that Ian Wright's Unfit Kids, a Channel 4 show presented by the former footballer, made Sony the target for unfair, one-side and pejorative comment.

Sony also argued that its privacy was "unwarrantably infringed" when footage of the company's offices and logo were used and a confidential email from the company was included in the programme.

In the programme, Ian Wright explored some of the reasons behind childhood obesity. In the first show, Wright selected overweight 13–14 year olds who did little or no exercise and devised an After School Fitness Club programme for them. He tried to extend the project and the second episode of the series, broadcast on 20th September 2006, showed his attempt to secure funding.

He arranged to meet representatives of Sony to seek sponsorship from them. Sony decided not to sponsor the scheme. Sony was referred to in the programme which also showed an email from the company in relation to sponsorship and footage of the exterior of the company's offices.

Sony complained to Ofcom.

Sony said that Wright's comments created an erroneous and unfair impression of the company, which was disproportionate in the context of the refusal of a request for sponsorship. In particular, Sony complained about Wright's remark, "Fuck Sony, man. Sony's not gonna stop this from working".

Sony also argued that the programme implied wrongdoing on Sony's part, alleging that it failed to sponsor Wright's project and unfairly contrasted this with a statement about the firm's worldwide turnover of $8.6 billion from video games. Wright also said that there is a Sony PlayStation game for "every single thing that a child can go out and exercise [for]."

Sony also claimed that the programme makers did not explain the nature and purpose of the programme to them and that they did not inform Sony that its refusal to have the meeting with Wright filmed would be referred to negatively in the programme. It complained that Sony's positive views about Wright's project and the company's involvement in other sports-based initiatives were omitted.

Channel 4 countered that it was "perfectly reasonable" for Wright to express his frustration at the company's decision. It also said that Sony was made aware from the outset the nature and purpose of the programme.

Sony said its privacy was infringed when its offices and logo were filmed without permission and it pointed out that the email used in the programme was confidential correspondence intended for the addressee only. Channel 4 countered that the programme makers did not need permission to film Sony's offices "as the programme makers were filming openly from a public highway." It added, "All company emails are routinely accompanied by confidentiality wording," but said that there was express authorisation from a Sony representative to use the email.

Ofcom found that the inclusion of Wright's reaction to the news that Sony was not going to provide funding was "reasonable as a reflection of his disappointment." This did not amount to an allegation of wrongdoing to which the programme makers should have given Sony an opportunity to respond, said Ofcom.

Ofcom said it was "entirely acceptable" for the programme makers to film and broadcast footage recorded from a public place. Ofcom added: "Such material was firmly in the public domain and did not require consent from the company."

Ofcom noted that there was a clear conflict between Sony and Channel 4 as to whether the broadcaster had permission to use the email. It concluded that it was for the courts to determine the question of any misuse of confidential information.

However, Ofcom was able to consider whether there had been an infringement of Sony's privacy under Rule 8.1 of the Broadcasting Code which states: "Any infringement of privacy in programmes, or in connection with obtaining material included in programmes, must be warranted."

Ofcom said it considered both the subject matter and content of Sony's email and ruled that the parts used did not contain any information that was inherently private to Sony, such as exposing the inner workings of the company.

The regulator also said it was foreseeable that the programme would wish to make reference to what Sony had said in the email and there was no evidence Sony had specifically asked for it not to be included. Ofcom ruled that Sony did not have a legitimate expectation of privacy.

Ofcom's ruling concluded: "The complaints of unfair treatment and infringement of privacy were not upheld. Accordingly the complaint was not upheld."

Thursday, September 13, 2007

Utah State Law Addressing Keyword Searches Likely Unconstitutional

The Utah Trademark Protection Act, signed on March 19, 2007, prohibits the sale and use of advertising keywords registered in Utah as "electronic registration marks" if the advertising generated by the use of the keywords is for directly competitive businesses, products or services or is otherwise likely to cause confusion between the goods and services of the advertiser and the electronic registration mark owner.

According to the legislative review note accompanying the legislation,

This legislation allows the registration of an electronic mark that would
prohibit the triggering of an advertisement for a competitor. The most prominent
application for this type of mark is the use of user-entered search terms in an
Internet search engine to trigger advertisements. These triggered advertisements
are often advertisements for a competitor of an entity whose name is entered in
the search engine by a potential customer. Because of the potential impact on
interstate commerce from the state's regulation of electronic registration mark
use on Internet search engines, this legislation has a high probability of being
held to be unconstitutional.

"Google has already publicly taken the position that the act is unconstitutional," notes Wendy Robertson. Learn more from Inside Counsel.

Patent Prosecution Highway Extends to United Kingdom [International - Patents]

The U.S. Patent and Trademark Office (USPTO) and the United Kingdom Intellectual Property Office (UK IPO) announced on September 4, 2007 that they are now accepting applications for participation in a pilot Patent Prosecution Highway project established between the two offices.

Under the Patent Prosecution Highway, an applicant receiving a ruling from either the UK IPO or the USPTO that at least one claim in an application is patentable may request that the other office fast track the examination of corresponding claims in corresponding applications. Full requirements for participation in the trial program at the USPTO can be found at www.uspto.gov/web/patents/pph/pph_index.html. According to the press release from the UK Patent Office, patent applicants will be required to submit search and examination reports prepared by the other patent office in order qualify for accelerated treatment.

The purpose of the trial program is to gauge the interest of applicants and determine if the program improves quality and efficiency and reduces the workload at the USPTO and the UK IPO. The trial period is set to expire September 4, 2008, but may be extended for up to one year or terminated earlier depending on volume of activity and other factors. Both offices will provide notice of any adjustment in the trial period.

Ten Things to Ponder before filing a Patent Infringement Action

According to "Ten Things to Ponder Before Filing A Patent Infringement Action," by Brandon Baum (Mayer Brown LLP) via PLI, there are certain "good practices" you should engage before starting the time-consuming and pricey process of suit:
  • Perform an infringement analysis of the accused product(s)
  • Identify and preferably interview your witnesses
  • Make sure everyone with a "need to know" is aware you are in pre-litigation mode
  • Place a freeze on documents
  • Identify preferred venue
  • Identify and possibly retain consultants
  • Review prosecution history and prior art
  • Perform a rough damages analysis if the client is interested in damages
  • Evaluate the target's likely response
  • Understand and manage client expectations

New Website for Copyright Stakeholders

Columbia Law School is launching a Web site to help artists and writers retain control of their copyrights and manage those rights through their careers. The site, KeepYourCopyrights.org , is the work of Columbia Law School professors Jane Ginsburg and Timothy Wu [Who Controls the Internet; Oxford University Press]. "We want to reach the most vulnerable creators with this," said Ginsburg. "We’re creating a different vision for what the future of copyright should be – to actually benefit authors and creators."

Ordinarily Seperable Stereoisomer Obvious for Lack of Increased Potency Over Mixture [International - Patents]

In Aventis Pharma Deutschland GMBH, et al. v. Lupin, LTD., et al. (September 11, 2007), the Federal Circuit held that claims covering a 5(S) stereoisomer of ramipril in a composition substantially free of other isomers were obvious where the stereoisomer was ordinarily separable from the prior art mixture with inactive ingredients and did not offer increased potency.

According to the opinion by Circuit Judge Linn,
The record suggests that when Dr. Smith synthesized SCH 31925, she understood that the 5(S) form of ramipril was the mixture’s therapeutically active ingredient. Even if she did not, however, the prior art provides a sufficient reason to look to the 5(S) configuration. . . . Moreover, the ’944 patent specifically taught that stereoisomers of ramipril “can be separated by conventional chromatographic or fractional crystallization methods.” ’944 patent, col. 10, ll. 28–31. Aventis’s protestations notwithstanding, there is no evidence that separating 5(S) and SSSSR ramipril was outside the capability of an ordinarily skilled artisan.

Aventis attempts to rebut this prima facie case of obviousness by arguing that purified 5(S) ramipril exhibited unexpected results in the form of increased potency. . . . The prior art supporting prima facie obviousness included the SCH 31925 mixture, and so Aventis must show that 5(S) ramipril had unexpected results not over all of its stereoisomers, but over that mixture, which did not contain the [higher potency] RRSSS form. And the potency of pure 5(S) ramipril is precisely what one would expect, as compared to a mixture containing other, inert or near-inert stereoisomers.

All evidence suggests, and the district court found, that potency varies with the absolute amount of the 5(S) isomer in a mixture. Invalidity Opinion at 37. That is, a 30 milligram dose of a mixture that is 1/3 5(S) ramipril has the same effectiveness as a 10 milligram dose of pure 5(S) ramipril. Id. Aventis has thus failed to show unexpected results that would tend to rebut a prima facie case of obviousness. See Pfizer v. Apotex, 480 F.3d 1348, 1368–69 (Fed. Cir. 2007) (holding obvious a patent claim to amlodipine besylate over prior art disclosing the small genus of pharmaceutically acceptable amlodipine salts, where there was an insufficient showing that the properties of amlodipine besylate, purportedly superior for the purpose of mass-manufacturing tablets, were unexpectedly superior to other obvious-to-try salts); cf. Forest Labs., Inc. v. Ivax Pharms., Inc., No. 07-1059, slip op. at 10–11 (Fed. Cir. Sept. 5, 2007) (holding that prima facie obviousness of a claim to a particular stereoisomer over a racemic mixture was rebutted where the particular stereoisomer showed unexpected benefits and evidence indicated that the isomers would have been difficult for a person of ordinary skill in the art to separate).

In sum, we hold that claims 1 and 2 of the ’722 patent, which cover the 5(S) stereoisomer of ramipril in a composition substantially free of other isomers, are invalid under 35 U.S.C. § 103 over the SCH 31925 mixture, the ’944 patent, and the enalapril references in the prior art.

Wednesday, September 05, 2007

Google Foe Ends Unique Trademark Suit Over Keywords

After four years of locking horns with Google in court, Michigan-based American Blind and Wallpaper Factory has abandoned its unique trademark infringement case against the Silicon Valley titan.

The end comes just a couple of months shy of a scheduled trial date. Such a trial would have been the first time a jury took a crack at an important question in today's trademark law: whether a search engine infringes when it lets one company pay to place its ad alongside search results on a competitor's name.

In a settlement reached late last week, both sides agreed to halt their claims. American Blind won no concessions whatsoever.

American Blind's chief executive, Joel Levine, said Tuesday the company pulled out for financial reasons, and because American Airlines, which has more money in its litigation coffers, has recently filed a very similar suit.

"American Airlines is more well-suited to take on Google than we are," Levine said. "We sell blinds and wallpaper and that's what we do best. We're not litigators."

American Blind did hire some heavy hitters to handle the Northern California federal court case on its behalf -- New York-based Kelley Drye & Warren and Howrey. Google hired Keker & Van Nest.

Keker partner Michael Page said American Blind's decision wasn't just about money.

"They had a terrible case and they decided it wasn't worth pursuing," he said. "They quit and went home."

Indeed, American Blind suffered some serious setbacks this year, including being sanctioned in June for failing to preserve and hand over relevant documents. Magistrate Judge Richard Seeborg found that, "even though the evidence does not support a conclusion of intentional document destruction or that American Blind or its employees specifically intended to deprive Google of relevant evidence, the record demonstrates a willful indifference at American Blind towards ensuring that relevant documents were preserved, collected, and produced."

The company was ordered to pay Google $15,000 in compensation.

The judge also allowed Google to present evidence at the upcoming trial about American Blind's alleged purchase of its own competitors' trademarked keywords.

Levine, to whom Howrey attorneys referred all comment Tuesday, said the sanctions had "zero" effect on their decision to pull out of the litigation. The CEO pointed out that the case began when Google filed a declaratory judgment complaint against American Blind.

Levine said he thinks Google chose to file suit against American Blind because it is small.

"They chose us," he said. "It's a legal strategy. They picked a sizable company but not a huge one."

Keker's Page disputes this, saying Google filed suit only after American Blind had been threatening to sue for 18 months.

"We didn't pick them because they were a small guy," he said.

In April, U.S. District Judge Jeremy Fogel found that two of American Blind's allegedly infringed trademarks were not well-known enough to support a trademark infringement case. This greatly limited the number of marks at play in the litigation.

Courts across the country have given mixed rulings on whether the search engine advertising model at issue -- which, for Google, is called AdWords -- constitutes trademark infringement, said Eric Goldman, a professor at Santa Clara University School of Law. All other cases of this nature have also ended pretrial, said Goldman, who closely tracks such litigation.

Google has not yet filed a response to American Airlines' complaint, which was brought in North Texas.

Tuesday, September 04, 2007

Greenberg v. National Geographic - the latest [Copyright, International]

After separate three-judge panels in the 11th U.S. Circuit Court of Appeals ruled for -- and then against -- a freelance photographer suing the National Geographic Society over copyright claims, the full court has agreed to consider the case.

The Aug. 30 decision to vacate the latest ruling in Greenberg v. The National Geographic Society means that the 11th Circuit could reinstitute a conflict between the 11th and the 2nd Circuits about whether publishers, specifically National Geographic, may reproduce publications in digital CD-ROM format without paying more royalties to freelance photographers for additional use of their work. The U.S. Supreme Court tends to favor consideration of cases on issues in which circuit courts disagree.

The copyright litigation was first addressed by the 11th Circuit in 2001 in a decision penned by Judge Stanley F. Birch Jr., the court's resident intellectual property expert. That opinion found in favor of freelance photographer Jerry Greenberg, whose photos had been published by National Geographic and then reproduced in its digital library. In similar cases in New York against National Geographic, the 2nd Circuit has taken the opposite stance, ruling that reproducing the magazine's library on CD-ROM does not violate freelancer copyrights.

Two months ago a new 11th Circuit panel overruled Birch's 2001 decision in the Greenberg case, saying instead that National Geographic should prevail. The latest decision was written by U.S. District Judge David G. Trager, a visiting senior judge from New York, which is part of the 2nd Circuit. He was joined by 11th Circuit Judge Rosemary Barkett and Senior Judge Phyllis A. Kravitch.

Trager's ruling also sidestepped a precedent which generally binds appellate panels to earlier circuit decisions addressing the same issue of law unless it has been overturned either by the entire 11th Circuit or by the U.S. Supreme Court.

But Greenberg asked the full court for an en banc review, and a majority of the active judges voted to rehear the case. En banc orders do not identify how the judges voted, but this one noted that Judge Frank M. Hull recused and that Kravitch, who joined Birch's 2001 decision with Judge Gerald B. Tjoflat, would participate.

"You can imagine how gratified we were to hear about that," Greenberg's attorney, Norman Davis of the Miami firm Squire, Sanders & Dempsey, said last week of the en banc order. "It doesn't happen very often."

"Had the prior decision stayed in place, the case would essentially have been done," said Davis. "Now, it's not. I look forward to learning what issues they [the circuit judges] want briefed and to engaging in responding to those issues."

In response to the 11th Circuit action, the National Geographic Society released a statement saying that the organization and its attorneys "now look forward to presenting our arguments in this important case to the full U.S. Court of Appeals for the 11th Circuit and believe that the full court will agree with the three-judge panel and the U.S. Court of Appeals for the 2nd Circuit that the National Geographic Society is entitled to make past issues of its magazine available in CD-ROM format without violating the copyright laws."

The Greenberg case raises on behalf of freelance photographers many of the same issues raised by freelance writers in another landmark copyright suit decided by the Supreme Court in 2001. That case, New York Times v. Tasini, 533 U.S. 233, favored freelance writers and came three months after the 11th Circuit panel ruled in favor of freelance photographer Greenberg.

In the closely watched Tasini case, freelance writers of articles previously published in newspapers and magazines brought copyright infringement claims against publishers and owners of electronic databases that had made the articles widely available via the Internet and services such as Lexis-Nexis. In a 7-2 opinion issued June 25, 2001, the Supreme Court ruled in favor of the writers.

For a decade, the Greenberg and Tasini cases have pitted publishers against freelance photographers and writers -- all of them seeking to define copyright law in a digital age. At stake are royalties and fees that publishers could be forced to share with freelancers whenever they reproduce and sell those freelancers' previously published works in merchandise designed for computer access.

In 2001 in the 11th Circuit, the Birch panel found for the photographers, specifically dismissing arguments offered by National Geographic that a 30-disc CD-ROM set containing reproductions of every National Geographic magazine was not a new product but was merely a reprint of a previously published work.

"The critical difference, from a copyright perspective, is that the computer, as opposed to the machines used for viewing microfilm and microfiche, requires the interaction of a computer program in order to accomplish the useful reproduction involved with the new medium," Birch wrote in what is now called Greenberg I. "These computer programs are themselves the subject matter of copyright, and may constitute original works of authorship, and thus present an additional dimension in copyright analysis."

Birch emphasized his point by attaching to 2001 opinion a copy of National Geographic's copyright application for the CD-ROM library.

$400,000 AWARD

On remand, a district judge in Florida, using Greenberg I as a guide, awarded Greenberg damages of $400,000. That ruling came in 2004, three years after Tasini. National Geographic appealed, resulting in the June opinion by Trager in what is called Greenberg II.

His panel sided with Trager's home circuit -- which since Tasini, has rejected claims against National Geographic by other freelance writers and photographers -- and bluntly labeled the earlier Birch opinion as "wrong."

The 2nd Circuit in those cases has interpreted Tasini as "an intervening (post-Greenberg I) change in the law" even though Trager acknowledged in his opinion that Tasini was decided on different facts than either Greenberg or the other National Geographic cases in New York.

After the en banc order was issued last week, Greenberg lawyer Davis said that an opinion issued by another 11th Circuit panel on Aug. 23 in an unrelated case has given him hope that the full court may restore Greenberg I.

In the case, which deals with maritime law, the panel showed that the court clearly frowns on reversing its own previous rulings, even in cases where a Supreme Court ruling has intervened.

The central question in Atlantic Sounding Co., Inc, v. Townsend, No. 06-13204, is whether the 11th Circuit can, or should, depart from a prior circuit ruling based on the Supreme Court's intervening decision in a similar case.

"We conclude that we may not," wrote Chief Judge J.L. Edmondson, joined by Edward E. Carnes and Senior Judge Peter T. Fay. "Under our prior panel precedent rule, a later panel may depart from an earlier panel's decision only when the intervening Supreme Court decision is 'clearly on point.'"

Edmondson added that the 11th Circuit had concluded in a 2003 case that "an intervening Supreme Court decision did not 'implicitly overrule' a prior circuit decision because the cases dealt with different issues and were not 'clearly consistent.'"

"The Supreme Court reminds us that '[t]here is, of course, an important difference between the holding in a case and the reasoning that supports that holding,'" Edmondson continued. "So, that the reasoning of an intervening high court decision is at odds with that of our prior decision is no basis for a panel to depart from our prior decision. As we have stated, [o]bedience to a Supreme Court decision is one thing, extrapolating from its implications a holding on an issue that was not before that Court in order to upend settled circuit law is another thing."