Danish law can be applicable to infringing sales from UK websites

The Danish Maritime and Commercial Court has recently rendered a decision in a case regarding sale of infringing furniture designs from two British websites. The decision is interesting for practitioners as it explains which exact elements are added substantial weight, when defining which law is applicable to an online infringement.

When deciding whether sale of furniture designs identical to famous products from Arne Jacobsen and Poul Henningsen among others constitutes a copyright infringement, it can be of high significance whether Danish or UK law is applicable. As explained in this bloggers article in the latest edition of AWA Review, there is a difference of protection even though this will be reduced due to the approaching repeal of Section 52 of the UK Copyright Designs and Patents Act.

The two websites in question were www.interioraddict.co.uk and www.nlini.com. The first website was written in Danish and with a Danish speaking customer service. For those reasons alone, the court found Danish law applicable to the infringements. The latter website was originally also in Danish, but had since changed to an English version. However, as the court noted that (1) it is possible to order products to be delivered in Denmark, (2) reviews of the website and its products were available in Danish, and (3) the website had been advertised in Denmark, Danish law was also applicable to this site.

This reasoning confirms the principles of the Donner case (C-5/11) in which the European Court of Justice listed relevant factors when deciding the applicable law as choice of advertising material, choice of language and opportunities for foreign distribution. However, the Danish decision is interesting and helpful to right holders, as it confirms that these principles also apply to a website with a .co.uk domain name which is normally not seen as targeting foreign consumers. Consequently, this decision indicates that infringers cannot circumvent the requirements and protection given by Danish law simply by selling from a foreign domain address. A much welcome development for the many right holders of famous Danish design products.

When assessing the damage claim, the court gave detrimental effect to the fact that the defendants had not supplied any information as to the revenue or amount of products sold. Furthermore, and more interestingly, the court did find some degree of substitution for the less expensive products (despite these still being cheaper and marketed as replicas). Accordingly, the court found market disturbance and roughly estimated the total damage claim to be DKK 200,000 for each website.

Anders Michael Poulsen, Attorney at Law

Decision by the USPTO puts the spotlight on the “real party in interest”

One of the ways that companies in patent dense industries, such as consumer electronics, try to fend off claims from patent holders is by requesting assistance from patent risk management firms. Patent risk management firms generally assist their clients by acquiring patents, tracking litigation outcome, or by acting to remove questionable patents from the landscape.

Inter partes review* has been introduced in the US as a way of challenging the validity of an issued patent in administrative proceedings before the US Patent and Trademark Office (USPTO). In an effort to find additional means to invalidate patents under dispute, defendants have begun using inter partes review as a tool in patent infringement disputes. A defendant may however only file a petition for inter partes review during a time window of one year after the defendant has been served with a complaint alleging infringement of the patent. This time limitation is one reason why defendants have been turning to the patent risk management firms for assistance, another being the circumvention of the potential estoppel in future disputes that material from the inter partes proceedings may generate.

Consumer electronics corporation Apple has an ongoing patent dispute with the patent assertion entity Virntex concerning security solutions in the communication application FaceTime™. RPX Corporation is a patent risk management firm, with Apple among its clients. In a recent decision**, the USPTO denied RPX Corporation an inter partes review of some of Virntex patents which are part of the dispute with Apple. The denial was based on the ground that Apple is a client of RPX Corporation and, according to the decision, provided funds and instructions to RPX. The USPTO contends that the relationship between Apple and RPX Corporation makes Apple the “real party in interest”, even though RPX argues that it is operating entirely on its own.

The decision makes it clear that one of the requirements for inter parties review, that the petition must list all “real parties in interest”, will be scrutinized by the USPTO and that the use of patent risk management firms or the formation of consortia does not provide sufficient distance for the clients or members to remain anonymous.

One could argue that transparency in patent disputes always is of benefit to the credibility of the system, however, I would argue that sometimes the possibility or remaining anonymous makes it possible to separate the question of whether or not a patent is valid, from sensitive business relations. Ultimately, the quality of issued patents must be the fundamental idea behind systems like inter partes review.

Joacim Lydén, European Patent Attorney

* As of September 16, 2012, with the implementation of the Leahy-Smith America Invents Act, any third party may file a petition for inter partes review provided that the reason for the petition is that the claimed matter is anticipated or obvious in light of prior art in the form of patents or printed publications 35 USC §§ 311 – 319.

** RPX CORPORATION v. VIRNETX Before the patent trial and appeal board, Paper 49, June 5, 2014

Important judgement on business method patent in the United States

On 20 June 2014, the U.S. Supreme Court handed down an important decision, Alice v. CLS Bank, clarifying the extent to which business methods can be patented. The earlier stages of the proceedings have been well covered in the media as this is one of relatively few times the Supreme Court has interpreted 35 U.S.C. § 101, with a potential to shape the future of computer-implemented inventions in general. Some of the claims at issue were actually not explicitly drawn to computer implementations or software, but the Court alleges it has considered the claims with an understanding that they “require generic computer implementation.”

One of Alice’s claims is found here, and the full judgement here. From the explosion of analyses by local practitioners, we were particularly impressed by 1, 2 and 3 and recommend them to you.

The judgement affirms the lower-instance judgment, which in turn is in keeping with current practice in the USPTO. In brief, the Court decided to revoke Alice’s patent because the method claims were allegedly directed to an “abstract idea” whose implementation was too generic to transform the idea into a patentable invention. The computer system and storage media claims were refused for the same reason; possibly the decision would have been different had the claims recited more implementation details. The language may be problematic to practitioners: just how abstract is an “abstract idea”? and is a programmable computer too “generic”? The challenging task of steering clear of “abstract ideas” and “generic implementation” is illustrated by the allowed and rejected claims from previous Supreme Court judgements: compare, in the same claim tableFlook and Diehr.

The present case highlights the limited usefulness of the concept “software patents.” While patents covering software typically cause little or no public debate when granted for inventions in conventional technology, software realizing business methods is more controversial. As shown by an overwhelming majority of the submitted amicus curiae briefs in Alice, the IT industry has a keen desire to dissociate itself from the “plague of abstract computer-related patents”, as the brief by Amazon, Google and others puts it. The brief cites Bill Gates in 1991 (in another court case), where he claims the software industry would have been at a “complete standstill” if the early inventors had applied for all the patents they could. The statement illustrates not only that the USPTO has become more stringent, but also reminds us of the much higher IP awareness in Mr Gates’ industry today, which has had to get used to – and benefit from – the existence of patents just like in other technical fields.

As European practitioners, we regularly ask American patent attorneys to prosecute our applications before the USPTO, making it essential for us to keep our drafting practices up-to-date, to be able to present the invention from the right angle and in all required detail. Unlike judgements like Bilski (2010), the Alice case represents no sudden change but will probably be received as a sign that the practice has stabilized. With its insistence on technical improvement, the Alice judgement in fact lands its conclusions rather close to the current European examination practice, despite its very different legal starting point.

The judgement should be reassuring also to Japanese applicants, whose applications are normally drafted to convince the JPO examiner that “information processing by software is concretely realized by using hardware resources” (JPO Guidelines, part VII), sometimes rephrased to mean that the implementation is “particularly suitable for a use purpose”. This intention should also limit abstraction and genericness.

Anders Hansson and Joacim Lydén, European Patent Attorneys