World Intellectual Property Day

The UN's international day observances are an important means of raising social consciousness. No-one questions the need to give over one day each year to commemorating health or the struggles to end poverty, hunger, sickness, and violence. Who among us does not identify with, or at least feel some solidarity towards, these causes?

Today, 26 April, is World Intellectual Property Day. The date marks the entry into force of the Convention establishing the World Intellectual Property Organization (WIPO Convention) 45 years ago.

A substantial segment of the population may, it is true, feel estranged from this cause, to them the words "intellectual property" are synonymous with sanctions, licenses, censorship, and other obstacles to the so-called free culture of the digital age. Even when viewed not so critically, "intellectual property" is still likely to bring to mind notions that stand outside most people's everyday lives, like the law, regulations, the courts, or packs of lawyers in suits and ties all on the side of "big business". Perhaps world creativity day, world innovation day, or world culture day would be a more fitting name. At least, it would "pack more punch". Because, simply put, with no beating about the bush, intellectual property is creativity, is innovation, is culture. It's in the alarm clock that wakes us up to go to the office, in the music we listen to on the way to work, in the video clip we watch on the screen on the platform, in the play advertised at the bus stop, in all the programs, utilities, and applications that help us in our daily work, in the coffee machine that rouses us from our mid-morning daze, in the television show or the book we turn to before going to sleep …. And behind it all are musicians, artists, programmers, engineers, actors, writers, producers, and, yes, probably too droves of judges, lawmakers, and lawyers in suits and tie doing their best to salvage what is left of intellectual property, this at times unfairly criticized redoubt.

Author: Patricia Mariscal

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Clarity examination in opposition proceedings at the EPO: Decision G3/14

The European Patent Office's Enlarged Board of Appeal recently issued a major decision (G3/14) on the issue of the clarity examination of claims in opposition proceedings at the Office.

Lack of clarity of claims (Article 84 European Patent Convention) is not one of the allowable grounds for opposition enumerated in Article 100 EPC. However, where the patent claims have been amended during opposition proceedings, Article101(3) EPC stipulates that the Opposition Division shall examine whether the amended patent fulfils the requirements of the EPC (including the clarity requirement laid down in Article 84 EPC ) and hence assess whether to allow or revoke the patent as amended.

The question of whether the EPO should examine the clarity of claims that have been amended during opposition or appeal proceedings has been raised repeatedly. There have been two diverging lines of case law decisions in this respect.

- The approach taken in decision T301/87 (the "conventional" view), holding that, where claims are amended during opposition proceedings, objections by reason of lack of clarity are not allowed "if such objections do not arise out of the amendments made".

- The approach taken in decisions T1459/05 and T459/09 (the "diverging" view). Decision T 1459/05 held that examination of the clarity of a feature of a granted dependent claim incorporated into a granted independent claim was permissible, especially where that additional feature was critical for differentiation from the prior art but could be regarded as being unclear. Decision T459/09 held that "unrestricted exercise" of the examination power under Article 101(3) EPC was justified where a claim was amended with a technically meaningful feature.

In these circumstances, the Enlarged Board of Appeal was asked for its opinion as to whether examination of the clarity of amended claims was permissible in cases where one or more elements of dependent claims were inserted into an independent claim, and, if so, as to the scope of the clarity examination.

The Enlarged Board's response was that, for purposes of the examination provided for in Article 101(3) EPC, patent claims may be examined for compliance with the requirements of Article 84 EPC only when, and then only to the extent that, the amendment introduces non-compliance with Article 84 EPC.

Furthermore, the Enlarged Board explicitly approved the "conventional line" and disapproved the "diverging line".

Therefore, the conclusion to be drawn is that from decision G3/14, examination of the clarity of claims in opposition proceedings will be much more restricted in scope than has been allowed under the "diverging line" of case law.

Author: Pedro Saturio

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Tomatoes and broccoli: products obtained by essentially biological processes are patentable

Spring has sprung and has brought with it two important decisions concerning plants, Decisions G2/12 (Tomatoes II) and G2/13 (Broccoli II) by the Enlarged Board of Appeals of the European Patent Office (EPO).

The two decisions confirm that the EPO considers product claims directed to plants to be admissible, and this extends to parts of plants (G2/13) and to such plant material as a fruit (G2/12), even where on the filing date of the application the plants claimed were only obtainable by an essentially biological process disclosed in the application. The decision in Broccoli II (G2/13) has further ruled that the plant or plant material may be defined in terms of the process for obtaining it ("product-by-process claims"), even where the features of the process in question define an essentially biological process for producing plants, subject to the condition that a single plant variety is not claimed.

These decisions make clear that the exclusion of essentially biological processes for producing plants and animals from patentability under Article 53(b) of the European Patent Convention (EPC) does not extend to the plants and parts of plants produced using those processes. Nevertheless, claims directed to such products may not relate to a single plant variety, because Article 53(b) EPC also excludes plant and animal varieties from patentability. Rule 27(b) Implementing Regulations to the EPC specifies this same bar to patentability in detail, stipulating that biotechnological inventions concerning plants shall be patentable only if the technical feasibility of the invention is not confined to a particular plant variety.

This is not the first time that the Enlarged Board of Appeals has been asked to interpret Article 53(b) EPC. Two earlier decisions also concerning tomatoes and broccoli, G1/08 and G2/07, sought to elucidate the conditions to be fulfilled by a process for producing plants in order to be regarded as "essentially biological" and hence unpatentable. The two recent decisions, G2/12 and G2/13, have held the products produced by such processes to be patentable, provided that they fulfil the general patentability requirements just like any other product and also fulfil the conditions laid down in Rule 27(b) Implementing Regulations.

The significance of these decisions lies not only in their shedding light on the criteria for assessing the patentability of inventions under Article 53(b) EPC but also in the commercial importance of the products concerned, now and in the future.

The inventions dealt with by these decisions are further examples of mankind's relentless drive to enhance plant species for many different purposes, for instance, to achieve greater food diversity. Broccoli (Brassica oleracea italica) is a particularly apt example of the results achieved, being a cultivar of the same species as cabbage, cauliflower, and Brussels sprouts, all variations on the common ancestor, wild cabbage, which have originating through selective breeding over the years. Humanity's role in species diversification and in modifying specific attributes has been so commonplace since Neolithic times that the public ordinarily views it not as a biotechnology process giving rise to alarming products with unpredictable consequences but rather as an intrinsic and natural part of human history. By contrast, society often rejects other biotechnological inventions based on more recent scientific advances, and this, in its turn, can sometimes influence decisions regarding the patentability of those inventions or legislation regulating the conditions of production or sale.

Author: Mª Rosa de la Colina

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New judgment by the CJEU concerning SPCs for combinations of pharmaceutical products

The Court of Justice of the European Union has issued new judgment interpreting Articles 1, 3, and 13 of Regulation (EC) No. 469/2009 concerning the supplementary protection certificate (SCP) for medicinal products.

The judgment (Case C-577/13) was issued in the context of a dispute between the Actavis and Boehringer Ingelheim pharmaceutical companies. The question referred to the CJEU for a preliminary ruling basically comes down to whether an SPC may be sought for a combination of two products included in the claims after the initial grant of the basic patent, subsequent to amendment of the said patent. The combination was composed of: (i) an active ingredient claimed as the sole subject matter of the invention, for which the holder had already obtained a first SPC (telmisartan) and (ii) a second substance (hydrochlorothiazide) within the public domain.

In response to the questions from the referring court, the CJEU made the following preliminary observations:

- First, the expression "as such" as used in Article 1(c) and Article 3(a) of the EU Regulation is to be interpreted autonomously in light of the objectives pursued by that Regulation and the "subject matter of the invention" covered by the basic patent.

- Second, where a patent claims several products, it may be possible to obtain several SPCs for the different products, provided that each of the said products "as such" is protected by the basic patent and constitutes the "subject matter of the invention" covered by the patent.

On that basis, the CJEU ruled that a second SPC may not be obtained for a product comprising a combined product composed of an active ingredient that is the sole "subject matter of the invention" for which an SPC has already been obtained in combination with another substance. In the CJEU's view, in the case that concerns us here the combination of the active ingredients telmisartan and hydrochlorothiazide, the latter being in the public domain, is not the true "subject matter of the invention" covered by the basic patent.

The CJEU based its decision in this case on the requirement to balance the interests of the pharmaceutical industry and those of public health, since unlimited entitlement to multiple SPCs for subsequent marketing of an active ingredient by combining it with another ingredient or substance that is not the subject matter of the invention as originally protected would tip the balance in favour of the former.

The CJEU thereby upheld previous case law set forth in earlier judgments concerning SPCs for combinations of products (see cases Actavis vs Sanofi – C-443/12 – and Georgetown University II – C-484/12). The judgment leaves undecided the question as to whether a patent may be amended after grant so as to insert claims for a combination of products that could comply with the requirements for obtaining an SPC. However, while this question was not expressly addressed, the CJEU appears to be implicitly opposed to that possibility.

Authors: Enrique Armijo Chávarri -- María Cadarso

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Resale royalty right for works by visual artists – Who pays?

The resale royalty right benefiting the author of original artwork, traditionally known as the droit de suite, is, as its name implies, the right of visual artists to remuneration in the form of a royalty on subsequent resale of their works. The purpose of this right is quite clear: to enable artists to profit from the economic success of their works and thereby offset any disproportionate difference between the price at which works are sold by an artist and the price subsequently fetched at resale involving art market professionals.

This right has traditionally existed in the legal systems of most European Union countries, and a Directive to harmonize the right was issued in 2011 (Directive 2001/84/EC). The purpose of the Directive was two-fold: to ensure that visual artists effectively benefited from the right in all EU countries and to eliminate differences in the laws of the EU countries that resulted in different treatment of artists depending on where their works were sold, which ultimately was a factor contributing to distortion of the functioning of the internal market. Nevertheless, Community harmonization did not encompass all aspects of the operation of this right. Such issues as the beneficiaries of the right, the transactions and artworks subject to the right, the calculation basis, and the persons responsible for payment were addressed, but the Directive did not define, or did not clearly define, who was ultimately liable for bearing the cost of the royalty. Article 1.4 of the Directive provides that: "The royalty shall be payable by the seller. Member States may provide that one of the natural or legal persons referred to in paragraph 2 other than the seller shall alone be liable or shall share liability with the seller for payment of the royalty."

In this situation a clause in the general conditions of sale of the French art auction house Christie's France SNC for 2008 stipulated that the buyers were required to pay the house a sum equivalent to the royalty due on sales made through the said auction house that were subject to payment of the royalty  Christie's France SNC took the money on behalf of the seller and subsequently paid it to the collective management organization in charge of collecting the royalty. A competing association, the SNA, claimed that sales made by Christie's France under the aforesaid contested clause constituted unfair competition and were in breach of national law regulating the resale royalty right. The clause was voided by the Paris Cour d'Appel, and Christie’s appealed to the Cour de Cassation, which stayed the proceedings while it referred the question of whether Article 1.4 of Directive 2001/84 should be interpreted to mean that it is the seller who is definitively liable for bearing the cost of the royalty to the CJEU for a preliminary ruling.

The key issue underlying the CJEU's ruling (Case C-41/14) is doubtless the difference between the person liable for payment and the person who must definitively bear the cost. According to the CJEU, the Directive merely makes provision specifying the first issue, whereas it is silent about the second. In this regard the CJEU has held that a clause like the one in Christie's France's general conditions of sale stipulating that the cost of the royalty is to be borne by the buyer is not contrary to Community law. Basically what the CJEU has held in this judgment is that the essential objective of harmonizing the droit de suite in the Community is to ensure that artists effectively receive remuneration, and the issue of who may or should in actuality definitively bear the cost is left to the discretion of the Member States.

Author: Patricia Mariscal

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CJEU rules on importation of patented pharmaceutical goods from new EU Member States

On 12 February 2015 the CJEU issued its ruling (in Case C-539/13) on interpretation of the Specific Mechanism provided for in Chapter 2 of Annex IV to the Act concerning the conditions of accession of the Czech Republic, the Republic of Estonia, the Republic of Cyprus, the Republic of Latvia, the Republic of Lithuania, the Republic of Hungary, the Republic of Malta, the Republic of Poland, the Republic of Slovenia, and the Slovak Republic and the adjustments to the Treaties on which the European Union is founded ("the 2003 Act Accession").

The provision prescribes a mechanism enabling the holder of a patent or supplementary protection certificate (SPC) for a pharmaceutical product to oppose importation of the said product from the new Member States in which protection of the product could not be obtained at the time the patent or SPC was filed. That is, the mechanism lays down an exception to the principle of exhaustion of a patent right. The exception consists of the requirement for whoever is going to import or market a pharmaceutical product from the new Member States into or in a Member State where the product is protected by a patent or SPC to give the holder or beneficiary of the said patent or SPC one month's prior notification of intent to do so.

The ruling ensues from a dispute over parallel import of a pharmaceutical product named Singulair from Poland into the United Kingdom. Merck Canada, Inc. ("Merck Canada") are the holders of a patent and an SPC for the active ingredient used in Singulair. Merck Sharp and Dohme ("MSD") are the exclusive licensees for the said patent and SPC. Pharma XL Ltd (a company associated with Sigma) notified MSD of their intention to import Singulair from Poland into the United Kingdom. Three months after first giving notice, Sigma began to import Singulair from Poland. Merck did not manifest their opposition to importation until several months later, whereupon Sigma ceased importing Singulair from Poland. Even so, Merck Canada and MSD commenced infringement proceedings against Sigma for the sales of Singulair Sigma had made to that time. The matter reached the Court of Appeal (England and Wales), which stayed the proceedings to refer a question concerning interpretation of the said Specific Mechanism provided for in Chapter 2 of Annex IV to the 2003 Act of Accession to the CJEU. Several questions were referred, the main one being, in summary: does the holder or beneficiary of a patent or SPC who wishes to prevent the importation in question have to demonstrate its intention previously and, if so, what form should the opposition take?

The wording of the applicable provision is ambiguous and thus susceptible to contradictory interpretations. This was the situation in the main proceedings, in which the positions put forward by the parties can be summarized as follows:

- Sigma contended that the legal provision dealing with the importer's obligation to furnish the holder of the patent or SPC with one month's prior notification of its intention to import the protected product meant that where the holder or beneficiary of protection did not invoke its rights within one month from the time notification was furnished, the importer was entitled to import and market the said product in the Member State concerned after it had obtained authorization from the competent authorities. It consequently maintained that the time period set by the provision implied for the holder or beneficiary of the patent a requirement to exercise its rights in good faith and to give notification of its intention to exercise its rights within the said term, because otherwise the importer would be left in a state of legal uncertainty detrimental to its legitimate interests and expectations.

- Merck, in turn, contended that the said Special Mechanism did not impose any requirement on the holder or beneficiary of the patent or SPC to furnish prior notification of its intention to prohibit parallel imports and that if any such requirement existed, both the requirement as such and the means of discharging it would have been expressly laid down.

The CJEU's ruling held that: (i) the holder or beneficiary of a patent who intends to prohibit parallel imports of a pharmaceutical product is not required to demonstrate its opposition to importation within one month under the aforesaid Specific Mechanism to be able to enforce its rights over the said product; however, (ii) where the holder or beneficiary does not indicate its opposition to importation within the one-month time limit, the parallel importer may commence importation and marketing after first obtaining authorization from the competent authorities; consequently, (iii) the holder or beneficiary of a patent of SPC may not rely on its rights with regard to any importation and marketing of the pharmaceutical product in question carried out before it intention has been expressly indicated.

Thus, this ruling helps define the meaning and scope of the Specific Mechanism provided for in the 2003 Act of Accession as it relates to parallel imports of patented pharmaceutical products, striking a balance between the rights conferred by patents and SPCs and the principle of the free movement of goods in the European Union.

Authors: Enrique Armijo Chávarri -- María Cadarso

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ELZABURU: 150 Years in 150 Words

At ELZABURU we do not look back, we forge ahead. We know that the blaze of the past lights up the future, and we believe that a Firm's professional identity is neither a blank page nor a page set in stone, but rather a page written day by day by the zeal and enthusiasm of its entire staff.

Here is our secret: cheer in our work, mutual regard, commitment to a common cause. In seeking the best solutions for our clients, we like to think that we see things no-one else has seen in the things everyone sees. Still, we know that it is a very fine line dividing self-confidence from arrogance. Humility is the better part of greatness!

I won't be here to say it in 150 years. So I'll say it now: it is an honour to head this Firm, it is an honour to strive for our clients.

Alberto de Elzaburu

*With quotes from José Manuel Caballero Bonald and Paul Valéry