HOW TO PROTECT YOUR PATENTS IN EUROPE FROM THE LEGAL POINT OF VIEW

1. HOW TO PROTECT YOUR PATENTS IN EUROPE FROM THE LEGAL POINT OF VIEW Chongqing, September 2008 Bruno Cinquantini Notarbartolo & Gervasi

2. HOW TO PROTECT YOUR PATENTS IN EUROPE FROM THE LEGAL POINT OF VIEW Shunde, September 2008 Bruno Cinquantini Notarbartolo & Gervasi

3. Content • Patenting strategies you can use in Europe • 2. How to license in or license out your innovation • 3. How can a company organise its patent department • 4. What are the remedies if your patent is infringed in Europe

4. Patenting strategies • To protect your innovation, you can use: • Trade secret (keep information confidential) • and/or file • National patent • National utility model • European patent

5. Trade secret • Why? • If your technology has no competitors • No reverse engineering is possible on your product • Your know how is important to make your product or process • Your innovation has little chance to be patented

6. Trade secret • Advantages • It is cheaper than patent • No complex procedures necessary • If you make your new product or use your new process far from competitors, more difficult to be given away • In Europe all countries have adequate legislation to protect trade secrets

7. Trade secret • Disadvantages • You must organise expensive procedures to keep trade secrets in your business • If your secret is discovered, no remedy is available • licensing is more difficult than if patented

8. Patent • External advantages • for i) protection, • ii) bargaining, • iii) image • i) protection • protecting product technology • protecting process technology • building up retaliatory power against competitors

9. Patent • ii) bargaining: • Better possibilities to license in or license out • Better possibilities to access technology by cross-licensing • Makes easier co-operation in R&D with others • Improves bargaining position in standard setting • iii) image • Improves the company image

10. Patent • Internal advantages • Improves employees’ motivation • gives measure of a company R&D capacity

11. Patent • Disadvantages • Costs of • procedures • maintainance • counsel • enforcement • Discloses technical information to competitors

12. Strategies for filing patents • a) file a Chinese patent application • (alternative: PCT first filing) and • claim priority, within 12 months • b) Choose a strategy for Europe: • follow national route only • follow PCT route and later National route • follow PCT route, later EPC and National route • follow EPC route and National route • follow EPC route only

13. a - Direct national route only • Advantages: • it is cheaper and faster if: • Protection in few countries (<4countries) or • Countries are not in EPC • because • less translations to make • utility model available (cheaper, shorter validity, no examination) • quicker granting procedure (no examination in several countries) • usually no opposition • Disadvantages: • more languages during prosecution, • more representatives

14. b - PCT and National route • Advantages: • cheaper and faster because • centralised search and International patentability report (IPER) • one language during PCT • less translations (after PCT route) • you can choose utility model (cheaper, shorter validity, no national examination) • quicker granting (no examination in several countries) or direct granting after IPER • Advisable if: • Protection in few countries • <4 countries, if members to EPC, (NB: not allowed in some countries) or • countries not in EPC

15. b - PCT and National route • Disadvantages: • more languages during national procedure, • more representatives • Impossible for several countries members to EPC (you must follow the EPC route after PCT)

16. c - PCT, EPC and National route • (Routes can be followed in parallel or subsequently) • Advantages: • After PCT route, follow only centralised EPC route • it is cheaper • only one examination, one language and patent in only one version • If some countries of interest are not in EPC, necessary to follow national route after PCT

17. c - PCT, EPC and National route • Disadvantages • During PCT (and EPC) routes, difficult to enforce in case of infringement in many countries • Lengthy examination at EPO and granted patent after several years • advisable if you have no necessity to arrive quickly at granted patent

18. d - EPC and National route • Follow EPC route for all countries possible, and National route only for countries not in EPC • Advantages: • cheaper for several European countries • Only one examination procedure • One language • One representative until grant (less afterwads)

19. d - EPC and National route • Disadvantages: • Lengthy examination at EPO • difficult to enforce in case of infringement before grant of patent • advisable if you want to arrive cheaply to a patent for several countries, • (preferably request accelerated examination at EPO !)

20. e - EPC route only • Cheaper, if for 4 or more countries • advisable when all interesting countries belong to EPC • Preferably request accelerated examination, if risk of infringement

21. Content • Patenting strategies you can use in Europe • How to license in or license out your innovation • 3. How can a company organise its patent department • 4. What are the remedies if your patent is infringed in Europe

22. Licensing A patent may be: • bought • sold • transferred or • inherited • licensed

23. Licensing Advantages of licensing You still own your patent and you transfer to someone else the right to use or sell your patented product or process in return for a royalty payment.

24. Licensing • Licenses can be limited in time and space. • There are different types of licences: • Exclusive • Non-exclusive • Sublicence

25. Licensing strategies • Licences must fit in product business strategy, • help development of licensed product. • Cross-license whenever possible. • Balance of costs of licensing must be advantageous • Non-exclusive licenses bring more advantages: • less risks for licensor and licensee • better control by licensor on the product • lower royalties for licensee • Exclusive licenses are advantageous when • licensor is not present on the market

26. Licensing strategies • Lincensing in • Advantages: • Savings in acquiring new technology with respect to developing autonomously • Reducing risk connected to R&D for developing the technology • Possibility of modernising quickly a production line • Possibility of entering in the market very quickly

27. Licensing strategies • Licensing out • Advantages: • Possibility to enter makets where the licensor is not present • Additional revenue

28. Licensing strategies • Main aspects of licensing contract: • object of contract • guarantees for product or process • guarantees for patents • confidentiality of know how • law of contract • arbitration • duration • payments and royalties

29. Content • Patenting strategies you can use in Europe • How to license in or license out your innovation • How can a company organise its patent department • 4. What are the remedies if your patent is infringed in Europe

30. Establishing an IP department in Europe • What is Europe ? • many independent countries • different cultures • different traditions • different economic levels • different legislations • different judiciary • many different languages • and what does this mean in IP field? • several levels of culture and various policies in respect of IP, • different company dimensions

31. IP culture - Levels of companies Penthouse Integration Third floor Profit Second floor Savings Ground floor Defensive Basement Unprotected Total Integration Penthouse Third Floor Profit Generation Second Floor Cost Savings Ground Floor Defensive Basement Unprotected

32. 0 - Unprotected level How businesses behave at the various levels ? Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected They use confidentiality and carry out non-trade secret intellectual property protection where appropriate

33. 1 - Defensive level • Company activities: • - Awareness of intellectual property • Obtaining intellectual property • Maintaining patents • - Respecting intellectual property rights • of others (freedom to operate) • - Willingness to enforce patents when • necessary Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

34. 2 - Cost savings level Company activities: - Focuses on how to reduce costs of filing/maintaining intellectual property portfolio Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

35. 3 - Profit generation level Company activities: - Makes intellectual property a profit center - Utilizes the intellectual property portfolio as a corporate asset - Extracts value directly from intellectual property portfolio - Focus on non-core, non-strategic intellectual property having tactical value Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

36. 3 - IP for profit level • Company activities: • - Considers intellectual property at all levels of organization • Organises high profile campaign against infringers • - Develops active patent/trademark • licensing program • Makes more good sense oriented R&D efforts • begins/improves active screening/watches for patent infringement Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

37. 3 - IP for profit level • - Establishes an enforcement program, it • ensures that no one infringes your patents • Requires constant policing and monitoring • of the market in order to challenge infringing • products • Enforcement function includes method of • negotiation so company can suppress infringement without having to engage in litigation • - In tough cases, is prepared to litigate against infringers Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

38. 3 - IP for profit level • Licensing • Starts/increases proactive licensing • program • Finds opportunities to generate revenue • without sacrificing competitive advantage • Begins by licensing non-core technologies • or technologies outside current field of • products • Finds appropriate licensees (potential • infringers) Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

39. 4 - IP Integration level • Company activities: • Sets long term patent strategy • - aligns IP strategy with itscorporate strategy • - Makes competitive assessment • Focuses on strategic value extraction • Develops a performance measurement • and reporting system • - Ensures that patent strategy drives research Penthouse Integration Third Profit Second Savings Ground Defensive Basement Unprotected

40. Organisation of IP department • Other factors for decision • Objectives set for department • Importance of dept inside company • Strategic placement inside organigramm • Dimension of company • Technology type • Which market is addressed

41. Organisation of IP department TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO commercial dpt commercial dpt commercial dpt legal dpt technical dpt marketing dpt Intellectual property

42. Organisation of IP department • It is a company having a defensive stance • IP department takes • No autonomous decisions • No autonomous strategy • It receives guidelines from the department to which it is attached

43. Organisation of IP department TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO TOP MANAGEMENT CEO Intellectual property legal dpt commercial dpt Technical dpt technical dpt marketing dpt other departm.

44. Organisation of IP department • It is a company of the multinational type, • leading on the market • having large dimensions • The IP department has autonomous decisional power and defines strategies • There exists a Director for IP , sometimes at Vice- President level

45. Organisation of IP department Directorate IP Secretariate patents trade marks strategies Licensing + litigation professional professional documentation administrative administrative Internal structure of IP dept

46. Organisation of IP department Use of patents Use of patents Use of patents Use of patents Use of patents Use of patents Use of patents Use of patents Use of patents Offensive attitude Is it core Business? Is it core Business? yes compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions compulsory licences at favorable conditions no Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Obligation to licence? Coop. agreements Coop. agreements Coop. agreements Coop. agreements Coop. agreements Coop. agreements yes yes yes yes yes yes yes yes yes yes yes yes yes no Licence at market conditions Licence at disadvantageous conditions Licence at disadvantageous conditions Licence at conditions below market Decision process in large companies

47. Organisation of IP department Use of patents Offensive attitude compulsory licences at favorable conditions Coop. agreements Obligation to licence? Licence at conditions below market yes Decision process in small companies

48. Content • Patenting strategies you can use in Europe • 2. How to license in or license out your innovation • How can a company organise its patent department • 4. What are the remedies if your patent is infringed in Europe

49. Enforcement of patent rights in Europe • Few common rules and a harmonisation trend in the framework of the European Community Treaty (ECT) • Relevant provisions of ECT • "the prohibition, as between Member States, of customs duties and quantitative restrictions" • “creation of an internal market characterised by the abolition, as between Member States, of obstacles to the free movement of goods, persons, services and capital"

50. Enforcement of patent rights in Europe Enforcement of IP Rights are antithetical to these goals of ECT, therefore European Court of Justice set some limitation to IPR “the specific object of a patent is inter alia to ensure to the holder, so as to recompense the creative effort of the inventor, the exclusive right to utilise an invention with a view to the manufacture and first putting into circulation of industrial products either directly or through licensees, as well as the right to oppose any infringement.”