Reverse burden of proof and trade secrets in patent litigation – Part two

 

In my previous post (here), I discussed the reverse burden of proof on an international level and the potential tension which could emerge between the patent and trade secrets regimes in this context. In this post, I will turn the focus to Europe and discuss the regional provisions as well as the relevant provisions of the UPC Agreement.

The Enforcement Directive and the Trade Secret Directive

There are a few provisions in the Enforcement Directive on confidentiality in court proceedings. The need to preserve confidentiality in intellectual property litigation is recognized in the recital of the directive (Recital 20). In addition, a few provisions (Arts. 6 (2), 7 (1) and 8 (2) (e)) of the directive deal with the protection of confidential information in IP litigation.

The drafters of the directive have recognized the need to protect the confidential information of the adverse party. But what is to be noted is that the Enforcement Directive does not contain any provision on the reverse burden of proof in patent litigation, or the protection of trade secrets in these situations.

The Trade Secret Directive includes a specific provision (Art. 9) on the protection of trade secrets in litigation concerning the unlawful use or disclosure of a secret (See my post on trade secret litigation here). Ergo, said provision is not applicable in patent litigation. However, Art.9 of the Trade Secrets Directive could provide for certain general examples of how trade secrets could be protected in patent litigation. These include restricting access to documents, restricting access to hearings, and providing non-confidential versions of judgments. There should for example be no immediate obstacle for a national legislator to include similar provisions in national laws.

Continue reading “Reverse burden of proof and trade secrets in patent litigation – Part two”

Reverse burden of proof and trade secrets in patent litigation – Part one

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Background – lack of protection

For a long time in many European countries, pharmaceutical compounds were not eligible for patent protection. Prior to the adoption of TRIPS, there were actually 22 countries in which the protection of pharmaceutical compounds was unavailable. Innovative pharmaceutical developers were only able to indirectly try to protect their pharmaceutical product by protecting the process for manufacturing the product. At the time, some states made efforts to compensate for the lack of product protection in different ways. In Finland, you could apply for a so called “analogous process patent”, by which you were able to get a patent for if you had developed a new product, but the scope of protection was, odd as it may seem, nevertheless restricted to the manufacturing process.

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TVCatchup II – Retransmission by cable not “exempted” in the InfoSoc Directive

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Last November, I reported on the GS Media case (C-160/15), which certainly gave rise to some debate. It appears that the CJEU is quite actively handing down judgments in the area of copyright. This is perhaps not too surprising, since the member states still have quite different national legislations and the harmonization from the EU is by no means exhaustive. Additionally, and more importantly, especially national copyright laws lag behind the rapid technical development, which is why many questions of interpretation may arise in national courts.

Only a few days ago, on 1 March, the CJEU handed down its judgment (C-275/15) in the case TVCatchup II. The national law in the UK included a provision, which roughly provided that copyright is not infringed in the case of immediate retransmission by cable. The relevant question from the UK court was “whether Article 9 of Directive 2001/29, and specifically the concept of ‘access to cable of broadcasting services’, must be interpreted as covering and permitting national legislation which provides that copyright is not infringed in the case of the immediate retransmission by cable, including, where relevant, via the internet, in the area of initial broadcast, of works broadcast on television channels subject to public service obligations.”

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Punitive damages slipping into IP enforcement in Europe?

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The U.S. is known to have a regime of punitive damages in many different areas of law. This concept has however not won any significant ground in Europe, where one usually is allowed to be awarded only the actual damages suffered.

Last week, the CJEU handed down a quite remarkable judgment on damages in IP infringement cases (case C-367/15). The Polish Supreme Court had sought guidance from the CJEU on how to interpret the Enforcement Directive (2004/48/EC).

Poland had a national provision, which provided an alternative for an IP holder to seek damages corresponding to two or three times of a hypothetical license fee. The question was whether the Polish national provision could be seen to be compatible with EU law. The Advocate General (AG), in essence, answered in the negative (AG opinion). But the CJEU took a different approach. The CJEU concluded that the Enforcement Directive does not as such preclude a provision allowing for an IP holder to claim twice the amount of a hypothetical license fee. In its reasoning, the CJEU inter alia referred to international instruments (TRIPS, Berne, Rome) and also emphasized the fact that the Enforcement Directive is a minimum standard directive.

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Decompiling the rules on trade secrets, software and reverse engineering

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My last post concerned trade secret litigation (read it here), and since I am (at least momentarily) quite fascinated by the subject of trade secrets, I decided to do a follow-up post on another topical issue in this field. In trade secret law, two types of behavior are generally considered to be allowed: i. independent discovery and ii. reverse engineering. Especially the latter sparked discussion in the EU with the arrival of the new Trade Secrets Directive (2016/943) (“TSD”). Reverse engineering is allowed based on Art. 3 (1) (b) and recital 16 of the TSD. Recital 16 of the TSD stipulates that

“[…] Reverse engineering of a lawfully acquired product should be considered as a lawful means of acquiring information, except when otherwise contractually agreed. The freedom to enter into such contractual arrangements can, however, be limited by law.”

Let’s pause here for a moment and decompile this provision:

  • Main rule: If you lawfully acquire a product, you may reverse engineer it.
    • Exception: Reverse engineering is not allowed if it has been contractually agreed that such behavior is not permitted.
      • Exception to exception: However, the freedom to enter into such an agreement restricting the permissibility of reverse engineering may be restricted by law. This, in a sense, takes you back to the main rule in the first bullet point.

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Shhh….Keeping the Secret Secret and Trade Secret Litigation

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“Whatever you do, don’t tell anyone”

(Queens of the Stone Age – The Lost Art of Keeping a Secret)

I doubt Josh Homme was thinking about trade secrets when he wrote the above lyrics, but there’s some valuable “legal advice” hidden in those lines. Namely, as often pointed out, once a trade secret is out, it may be lost forever.

Indeed, the secret maybe lost but not necessarily given away for free. Trade secret legislation is designed particularly for these unfortunate situations. Once the secret is out, you may not be able to get it back in the bottle again. But you may be able to stop further spreading of the secret and at least get some damages from the perpetrator. This will usually mean you will have to go to court for enforcement. And this is where it may get a bit tricky: Alas, in order for the enforcement to be successful you will probably have to disclose your secret. That doesn’t sound very tempting if your trade secret is valuable, does it? Continue reading “Shhh….Keeping the Secret Secret and Trade Secret Litigation”

The GS Media decision and ‘communication to the public’?

The CJEU quite recently handed down its decision in the GS Media case (C-160/15, available here). In said case, the CJEU revisits the notion of ‘communication to the public’ of the InfoSoc directive. The case concerns a situation where the material has originally been placed on the internet without the consent of the copyright owner. If the content has been made freely available on another website with the consent of a copyright holder, there would usually be no ‘communication to the public’ (see e.g., the Svensson decision, C-466/12 available here).

In GS Media, the CJEU distinguished between i. non-commercial use and ii. use for profit. If the hyperlink is placed on a website that operates for profit, the person who posts the hyperlink has a duty to check if the content was originally placed on the web without the consent of the copyright owner. Further, if the website operates for profit, it is presumed that the posting is made with full knowledge of the protected nature of the relevant work and the potential lack of consent of the copyright owner. This presumption can however be rebutted.

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Into the void – The lack of interaction of IP and competition law internationally

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Competition law is well recognized and enforced either regionally or nationally in a large part of the modern world. However, quite surprisingly, there is no comprehensive international agreement, which would regulate competition law in any great substantive detail. An international agreement has certainly been discussed, but even today there is no global agreement, which could be compared e.g. to the Paris or Berne Conventions or TRIPS. The role of competition law has also been discussed within the framework of the WTO dispute resolution mechanism, but it has not won any significant ground within the system. Continue reading “Into the void – The lack of interaction of IP and competition law internationally”

The difficult marriage of IP & competition law

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The relationship between IP and competition law has certainly not been a bed of roses. Initially, the two regimes were regarded as separate (inherency theory). One could argue that the primary goal of IP is to promote innovation, while the primary goal of competition law is to promote competition. This is of course a somewhat simplified picture of the two regimes, since also other important objectives could be stressed, but this simplification helps to underscore that a certain tension between the regimes could be observed. Given the potential of conflict between objectives, it was argued that competition law only should play a role in situations where the IP holder goes beyond the exclusive right. Continue reading “The difficult marriage of IP & competition law”