QMJIP

Queen Mary Journal of Intellectual Property

Month: March, 2015

ECTA Round Table on 3D Printing and IPRs – Update on the Trade Marks Legislative Package (Event Review – Part II)

by Pedro Malaquias

On 11 March, ECTA – The European Communities Trade Mark Association hosted in Brussels a Round Table on 3d Printing and Intellectual Property Rights. This post is a report of said round table. For a review of the first part of the conference, where Michael Koenig (Deputy Head of Unit, Industrial Property, DG GROW – Internal Market, Industry, Entrepreneurship and SMEs) presented an update on the trade marks legislative package, see our previous post here.

The round table had three participants. Benjamin Denayer, Senior Business Developer Additive Manufacturing at SIRRIS, made a presentation of the technology. Representing the academia, Dr. Rosa Ballardini, Assistant Professor at the Department of Commercial Law of the Hanken School of Economics presented ‘3D Printing and Patents’. Finally, Carla Van Steenbergen, Legal Counsel at Materialise, analysed ‘3D Printing from a Design and Copyright Point of View’.

 

The first speaker was Benjamin Denayer, who started by explaining what 3D Printing is (Layer by layer manufacturing technique, that allows functional end products with excellent mechanical properties starting from a 3D CAD model) and how does it work, providing present examples of its uses. To explain the present status of the technology, a reference was made to Gartner’s Hype Cycle for 3D Printing.[1] One of the most exciting possibilities of the technology is the fact that it makes designing easy and accessible to everyone through low cost printers and scanners, open design architectures and the existence of online printing services and innovative printing resources. However, as the stakeholders multiply and the consumer enters the production structure, the value chain ceases to be linear. Further, rapid technological developments allied with a dispersion of players along an international scene and the development of new business models in an open innovation culture make the future unpredictable.

Entering into legal territory, the speaker noted that additive manufacturing combines the issues resulting from the online sharing of digital files with tools allowing for both perfect copies and endless variations of physical objects. This has implications in most of the existing intellectual property rights, raising new questions in relation to the overlapping of rights and the differences between subject matters, what constitutes an act of infringement and which exceptions and limitations apply. On the other hand, the use of Digital Rights Management systems (see US Patent 8,286,236) and identifiers in printed objects to establish its provenience is evolving.

However, the legal issues surrounding to additive manufacturing are not limited to intellectual property law. In fact, Mr Denayer noted that there are other legal and ethical questions. As an example, the speaker mentioned gun control issues, the safety and effectiveness of medical devices and the quality of food products.

 

After a short break for coffee, Dr Ballardini presented the topic ‘3D Printing and Patents’. From the onset, the speaker warned that her presentation was made of preliminary thoughts and that no solutions would be provided.

Following a necessary context on how the technology works, the current state of play of the European patent law and the differences between direct and indirect infringement, the speaker centred her attention in articles 25 (Right to prevent the direct use of the invention) and 26 (Right to prevent the indirect use of the invention) of the Agreement on a Unified Patent Court.

In relation to direct infringement, Dr Ballardini noted that anyone who prints a patented device would be directly infringing as a result of ‘making’ the device without authorization. Therefore, unless the rightholder allows it or an exception and limitation applies (such as private use), printing a patented object is a prohibited act.

Most of the presentation was however focused in the topic of indirect infringement. After suggesting that the manufacturers of the printers and the suppliers of printing cartridges would not be indirect infringers, the speaker discussed the liability of individuals or platforms that share a file that can be used to print an infringing physical object. After quickly enumerating the requisites for indirect infringement, Dr Ballardini devoted the rest of the presentation to questioning if the CAD files could i) constitute means, ii) that relate to an essential element of the invention and iii) that are susceptible to put the invention into effect. Unfortunately, and due to time constraints, the remaining requirements for indirect infringement were not analysed.

As Dr Ballardini explained, means are historically of a tangible / physical nature and simple. Furthermore, abstract instructions would normally not be considered to be means in this context. However, some national case law has held that software should be considered a means.[2] On the other hand, arguments could be raised to defend that CAD Files are not means. First, the speaker wondered if it would not be possible to argue that CAD files do not have a tangible / physical nature and that they are not software (by analogy with the recent CJEU decision in Art & Allposters).[3] Second, one could argue that CAD files are simple blueprints that provide abstract instructions on how to make the invention. Third, it is questionable that they have a strong connection with the ability to put the invention into effect. As such, the question remains open.

The second step was questioning if the CAD files relate to an essential element of the invention, especially where the invention is the result of traditional ways of manufacturing products and there is no mention of 3D printing technologies in the patent claims. The following possibility of reasoning was laid down: once the object is printed, both the files and the invention exist independently and separately and an analogy can be made with the assembly lines from which traditional devices are manufactured, which are not seen as “essential elements” of an invention. A possible test would then be if the invention could be put into effect also without the CAD file.

The last question the suitability of the CAD files for putting the invention into effect. The speaker noted that although CAD files are usually shared without the drawings and therefore a considerable effort is still needed “for putting the invention into effect”, it would be hard to argue that printing the object would be a maverick or unlikely use.

Having written his LL.M. dissertation on the topic of 3D Printing and IP, this blogger must say that this was quite an interesting presentation as it challenged some of our views on the topic. As such, we look forward for the paper that (we have learned) will be later coming out from this presentation and where we hope the speaker develops her analysis and answers to the questions that posed during her presentation.

 

The last presentation of the afternoon was in charge of Carla Van Steenbergen, Legal Counsel at Materialise. The speaker started by presenting Materialise, a Belgian company specialised in additive manufacturing software and solutions, and i.materialise, its online 3D printing service. As a case study, the speaker introduced the audience to Iris van Herpen’s 3D Printed fashion designs.

Then, Ms Van Steenbergen noted some instances where copyright law and 3D Printing have clashed. The first reference was to Paramount who sent a cease and desist letter to Todd Blatt, who had recreated an extra-terrestrial cube inspired by the Super 8 motion picture. Mr Blatt complied. The recent Katy Perry left shark 3D-printing legal row was also mentioned.

However, instead of discussing the outcomes of users’ actions, the speaker focused the attention on how online platforms can reduce their liability. To do so, i.materialise includes the following clause in its terms and conditions:

i.materialise.com provides an automated internet-based service to users, which they use to design and sell products. i.materialise contractually prohibits its users from using the service to order and/or sell products that infringe third party intellectual property rights (including among others copyright, trademark, design and model, patent, trade dress and right of publicity, etc.). You are solely responsible for the content that you upload on the Site. By submitting an order to i.materialise, you confirm that you are the owner and/or you have obtained from a third party the rights necessary for submitting this order to i.materialise for production and commercial use (see the article re. the challenges) without any violation of any intellectual property rights. If the design you submit to Materialise risks infringing the intellectual property rights of third parties, Materialise reserves the right to either not produce the design or produce the design without the part that risks infringing the rights of third parties. Should your user generated content nevertheless be found to be infringing and/or in violation of any law, you will defend i.materialise against third party claims, and be held liable for all (direct and indirect) damages and costs incurred by i.materialise with respect to such claims.

Still, this is an untested area and it is not possible to state without doubts that such a contractual clause would hold in court and shield the company from any liability. Additionally the company instructs its designers to avoid working in any potentially problematic designs. However, it is completely impossible to guarantee that no infringement work will ever be printed. Answering a question from the audience on this point, the speaker noted that although the E-Commerce Directive[4] provided some protection to the company, the truth is that since it also manufactures the objects once the files are sent to them and provide consultancy on the printability of the files, it is expectable that its conducts are not fully covered by the safe harbour provisions of this directive. As such, it is hoped that the entire legal framework is interpreted in a way that allows for the development of this type of business

Another topic of interest is the collaboration of the company with third parties to create quality files. Ms Van Steenbergen explained that there is more to 3D Printing than simply pressing a button. Not every file that looks good in a screen allows for the printing of a quality object. Working with companies, Materialise assumes also a consultancy role, explaining the real possibilities of the technology and optimising the files in such a way that they can be used to produce good articles. However, this leads to questions over the ownership of the files and to the rights than each of the parties have. Those should be solved prior to any work being carried out in detailed licence agreements.

On the other hand, an area where the protection granted by the law might not be adequate concerns medical applications and devices, such as hip implants that are specific to an individual. The uniqueness of these parts seems to exclude the value of protection granted by design and copyright law. On the other hand, the safety of 3D Printed medical devices is a more pressing issue than the intellectual property implications of the technology. Hospitals are starting to buy printers and they do not always have experienced people to work with them. The on-going revision of the medical device directives will allow for the use of custom-made devices without proper quality certification, something than can create problems for patient safety.

Ms Van Steenbergen concluded her presentation with some thoughts from the business side. The industry should rethink the value of digital files. They constitute an opportunity, allowing for the reduction of stocks and can be used to revolutionise the spare parts industry while benefiting local manufacturing. As such, the protection of these files should be high on the agenda of any company evolved in 3D Printing. As for the law, the most important factor would be to have legal certainty and avoid laws that are too strict.

 

The event then came to an end. As a final though, the speakers noted that although it is expected an exponential growth of the use of additive manufacturing technologies, they will not work as a magic trick to bring manufacture industry back to the European Union. In fact, additive manufacturing technologies will work as a complement to traditional ways of manufacturing, not fully substituting them. Still, the legislative framework should not contribute to hampering the innovation in this interesting field.

 

On a final note, we would like to remind everyone that ECTA is organisings its 34th Annual Conference which will take place in Hamburg, Germany from 10-13 June 2015. For further details, see the event website.

 

[1] See https://www.gartner.com/newsroom/id/2825417.

[2] Menashe Business Mercantile Ltd v William Hill Organization Ltd [2002] EWCA Civ 1702, [2003] RPC 31.

[3] Case C‑419/13 Art & Allposters International BV v Stichting Pictoright.

[4] Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’).

April IP Events

by Pedro Malaquias

Here is the list of Intellectual Property events occurring in April 2015. If you have knowledge of or are organising any IP event not shown on the list, we would be grateful if you would let us know. Simply leave us a comment or tweet us @QMJIP #IPEvents and we can add it to the list.

We also invite you to consult the IPKat’s list of forthcoming events, available here. Additionally, the 26th of April is the World Intellectual Property Day. As a result, several events will be held in celebration. Information about those events can be found in WIPO’s World IP Day Events Map and on the World IP Day Facebook Page.

 

UNITED KINGDOM

  •  1 April – London – The City Law School – The concept of ‘public’ in copyright lawLink.
  • 1 April – London – CILIP – CILIP Copyright Executive Briefing 2015Link.
  • 7 April – Cambridge – CIPIL – 10th Anniversary Celebration Workshop: ‘Understanding IP, Engaging With Its Future’Link.
  • 8-9 April – Cambridge – Fordham IP Institute – 23rd Annual Fordham Intellectual Property Law & Policy ConferenceLink.
  • 13 April – London – CIPA & IP Lawyers Network Japan – Recent Developments in Patent Litigation in JapanLink.
  • 14 April – London – Queen Mary University of London – Panel on the Right to Be Forgotten with Privacy ProfessorsLink.
  • 14 April – Norwich – University of Leeds – Cultivating Innovation: How (and How Not) to Think about Intellectual Property in Agriculture and Plant ScienceLink.
  • 14 April – Birmingham – MBL Seminars – Taxation of Intellectual Property Link.
  • 14 April – London – MBL Seminars – Intellectual Property Rights in Software Link.
  • 16 April – Manchester – ITMA – Tips and traps of making a Nominet domain name complaint: a view from a Nominet Expert Link.
  • 16 April – Bristol – CIPA – West of England MeetingLink.
  • 16-17 April – London – Management Forum – Basic PCT Formalities CourseLink.
  • 17 April – London – MBL Seminars – Patents Court Litigation: An Advanced Guide Link.
  • 17 April – London – MBL Seminars – Advanced Trade Marks: Adwords & More Link.
  • 20 April – Reading or London – Assimilate IP – Freedom to Operate for the Life Sciences and Pharmaceutical IndustriesLink.
  • 20-24 April – London – UCL IBIL – IP Transactions: Law and Practice Link.
  • 21 April – London – MBL Seminars – A to Z of Intellectual Property Law In One Day Link.
  • 22 April – Southampton – iCLIC – Fishing for trouble? ‘Left shark’, 3D Printing and IP lawLink.
  • 23 April – Bournemouth – CIPPM – The EU and the digitisation of cultural heritage collections: Towards new steps in the policy cycleLink.
  • 24 April – Edinburgh – The Faculty of Advocates – World IP Day Conference 2015Link.
  • 24 April – London – MBL Seminars – Community Trade Mark Update Link.
  • 24 April – London – MBL Seminars – Copyright in New Media Link.
  • 28 April – London – ITMA – Designs and the role of dotted lines Link.
  • 28 April – London – MBL Seminars – Intellectual Property Law Update Link.
  • 29 April – Glasgow – ITMA – Competition Law Issues for Trade Mark Practitioners Link.
  • 30 April – Cambridge – MBL Seminars – Trade Marks – Advanced: Litigation Link.
  • 30 April – London – MBL Seminars – IT, IP & Data Protection: A Comprehensive Update Link.
  • 30 April – Glasgow – CIPA – The Scottish MeetingLink.

 

CONTINENTAL EUROPE

  • 30 March – 1 April – Geneva, Switzerland – WIPO – Seminar on Intellectual Property and Genetic Resources, Traditional Knowledge and Traditional Cultural Expressions: Regional, National and Local ExperiencesLink.
  • 1 April – Brussels, Belgium – GRUR/ AIPPI – The proposed EU framework for protection of trade secrets – state of play and future challengesLink.
  • 2 April – Paris, France – UJUB & INPI – Deuxième procès blanc devant la Juridiction Unifiée du BrevetLink.
  • 8 April – Madrid, Spain – OEPM – El Tribunal de Marca Comunitaria. Criterios Jurisprudenciales a diez años de su creaciónLink.
  • 9 April – Geneva, Switzerland – WIPO – Seminar on the procedures under the Hague Agreement Link.
  • 9 April – Baku, Azerbaijan – WIPO – Regional Seminar on Raising Awareness on New Types of Trademarks/ Non-Traditional TrademarksLink.
  • 13 April – Madrid, Spain – FIDE – Retos en la lucha contra la piratería de contenidos audiovisuales y deportivosLink.
  • 13-14 April – Brussels, Belgium – LES Benelux – LES International Annual Conference 2015: Creating value in tomorrow’s smart economy – towards 2020 and beyondLink.
  • 14-15 April – Parma, Italy – Department of Economics, University of Parma in collaboration with ERG – SYAL European Research Group and AIEAA – Associazione Italiana di Economia Agraria ed Applicata – Intellectual Property Rights for Geographical Indications: What is at stake in the TTIP? Link.
  • 15 April – Paris, France – IRPI – Droit des dessins et modèlesLink.
  • 16 April – Amsterdam, Netherlands – INTA – 2015 Pre-Annual Meeting ReceptionsLink.
  • 16-17 April – The Hague, Netherlands – EPO – Examination Matters 2015Link.
  • 17 April – Vienna, Austria – INTA – Young Practitioners and Trademark Administrators receptionLink.
  • 17 April – Amsterdam, Netherlands – FORUM · Institut für Management GmbH – IP Agreements – Link.
  • 20 April – Berlin, Germany – DPMA – Introductory Workshop on Industrial Property RightsLink.
  • 20-21 April – Nice, France – Dr. Haxel – International Information Conference on Search, Data Mining and VisualizationLink.
  • 21 April – Turin, Italy – WIPO – Seminar on WIPO Services and Initiatives with the Italian Patent and Trademarks Office (UIBM)Link.
  • 21-22 April – Munich, Germany – EPO – PATLIB 2015: A learning eventLink.
  • 22 April – Lisbon, Portugal – Conselho Distrital de Lisboa da Ordem dos Advogados – Cópia PrivadaLink.
  • 23 April – Amsterdam, Netherlands – FORUM · Institut für Management GmbH – Patent Opinions Drafting and Business ApplicationsLink.
  • 23-24 April – Vienna, Austria – EPO – East meets West 2015: Forum on Asian patent informationLink.
  • 23-24 April – Minsk, Belarus – WIPO – National Seminar on Intellectual Property Policies in UniversitiesLink.
  • 23-24 April – Munich, Germany – FORUM · Institut für Management GmbH – US and EU Licensing Law Link.
  • 24 April – Vilnius, Lithuania – WIPO – WIPO National Seminar: How to Protect your Design AbroadLink.
  • 24 April – Oslo, Norway – NIPO – World IP Day CelebrationLink.
  • 27 April – Vienna, Austria – LES Austria – World IP Day 2015Link.
  • 27 April – Madrid, Spain – FIDE – Nuevo sistema de patentes: Seguimiento de la STJCE sobre los recursos presentados por EspañaLink.
  • 27 April – Würzburg, Germany – TGZ Würzburg – Patents and Utility Models – From the idea to the finished productLink.
  • 27 April – Leipzig, Germany – The Patent Information Centre – Intellectual Property and the Knowledge Society: Risks and PotentialLink.
  • 28 April – Banská Bystrica, Slovakia – WIPO – Doing Business InternationallyLink.
  • 28 April – Chemnitz, Germany – The Patent Information Centre – Intellectual Property and the Knowledge Society: Risks and PotentialLink.
  • 28-29 April – Vienna, Austria – EPO – Searching EPO’s worldwide data with Global patent index (GPI)Link.
  • 29 April – Dresden, Germany – The Patent Information Centre – Intellectual Property and the Knowledge Society: Risks and PotentialLink.

 

USA

  • 1 April – New York, New York, USA – The Copyright Society of the USA – Copyright Office Modernization and Autonomy: What’s on the Agenda?Link.
  • 2 April – Atlanta, Georgia, USA – LES – Strategies and Perspectives based on New Developments in Patent LawLink.
  • 7 April – Stanford, California, USA – Stanford Law School – SLATA presents Jim Batchelder, IP Lawyer and Managing Partner of Ropes & Gray LLPLink.
  • 8 April – Brecksville, Ohio, USA – LES – Intellectual Property and Licensing at AMTLink.
  • 10-11 April – Atlanta, Georgia, USA – Atlanta Bar Association – Intellectual Property SpringPosium 2015Link.
  • 13-15 April – Cambridge, Massachusetts, USA – OSAP – 2015 Broad Institute Innovation & Intellectual Property SymposiumLink.
  • 14 April – Alexandria, Virginia, USA – USPTO – 2015 USPTO Design DayLink.
  • 14 April – Atlanta, Georgia, USA – CenterForce – The IP Strategy Summit: Enforcement AtlantaLink.
  • 14 April – Durham, North Carolina, USA – LES – Growth and Diversification of a Specialty Pharmaceutical Company through Licensing and M&ALink.
  • 16 April – New York, New York, USA – LES – What Licensing Professionals Need to Know About Patent TrollsLink.
  • 17-18 April – Stanford, California, USA – Stanford Law School – The PTO and the CourtsLink.
  • 21 April – New York, New York, USA – Kernochan Center for Law, Media and the Arts, Columbia Law School – Copyright and Original AuthorshipLink.
  • 22-24 April – Palo Alto, California, USA – IP Counsel Cafe – Patentability and Ambiguity: Navigating Today’s RealityLink.
  • 23 April – Salt Lake City, Utah, USA – LES – Technology Education, Tech Start Ups, and Growth Companies in Utah, and Recent Legislative DevelopmentsLink.
  • 23 April – New York, New York, USA – Cardozo School of Law – World IP DayLink.
  • 24 April – Houston, Texas, USA – University of Houston Law Center – World IP Day 2015 Houston: The Musical Flavors of HoustonLink.
  • 28 April – Bloomfield Hills, Michigan, USA – LES – Technology Licensing Reception with LESLink.
  • 28-29 April – Los Angeles, California, USA – AIPLA – Patent Prosecution Boot CampLink.
  • 29 April-1 May – San Diego, California, USA – IACC – 2015 Annual Spring Conference Link.
  • 30 April – Stanford, California, USA – Stanford Law School – CodeX FutureLaw Conference 2015Link.
  • 30 April-2 May – Los Angeles, California, USA – AIPLA – 2015 Spring MeetingLink.

 

REST OF THE WORLD

  • 8 April – Adelaide, Australia – LESANZ – 2014’s Licensing LessonsLink.
  • 9 April – Bogotá D.C., Colombia – Cavelier Abogados – ¿Sabia usted que las invenciones implementadas por medio de un software son patentables? – Link.
  • 9 April – Singapore, Singapore – IP Academy – IPM Course & Toolkit for Procurement Officers Link.
  • 13 April – Beersheba, Israel – WIPO – Roving Seminars on WIPO Services and InitiativesLink.
  • 13-17 April – Cape Town, South Africa – FICPI – FICPI WORLD CONGRESS 2015Link.
  • 14 April – Singapore, Singapore – IP Academy – IP Issues in M&A Transactions: Perspectives of Acquirer & Target, and Methods to Bridge the Differences Link.
  • 14 April – Haifa, Israel – WIPO – Roving Seminars on WIPO Services and InitiativesLink.
  • 15-18 April – Adelaide, Australia – IPTA – 2015 Annual ConferenceLink.
  • 16-17 April – Shanghai, China – Conways – China Intellectual Property & Innovation Summit 2015Link.
  • 20 April – Tokyo, Japan – LES Japan & AIPLA – Amount of Compensation for Damage in Patent Infringement Suit; Transition in the U.S. and Comparison between the U.S. and JapanLink.
  • 21-22 April – Beijing, China – IAM – IPBC China 2015Link.
  • 23 April – Osaka, Japan – LES Japan – Lecture by Dr. Nakatomi Link.
  • 23 April – Seoul, South Korea – KAIPBA – 2015 Ceremony of Intellectual Property Day and Symposium on the Strategy of Intellectual Property Cooperative Development in East AsiaLink.
  • 23 April – Perth, Australia – ACLA – Director Liability for Intellectual Property InfringementLink.
  • 23-24 April – Manila, Philippines – WIPO – Facilitating the Transfer and Diffusion of Clean Technology: Opportunities from a Pilot Project on Wastewater Treatment in South East AsiaLink.
  • 25 April – Chennai, India – Confederation of Indian Industry – World IP Day CelebrationLink.
  • 26 April – Beijing, China – NCAC – Seminar on Music Copyright ProtectionLink.
  • 26 April – Delhi, India – The Centre for Intellectual Property and Technology Law (CIPTEL), Jindal Global Law School – Second Chapter of the IP Law Student Research Colloquium: EnthusiasmLink.
  • 28 April – Chennai, India – Confederation of Indian Industry – Trademarks: The Legal Cornerstone of a BrandLink.
  • 28 April – Melbourne, Australia – ACLA – Drafting IP Clauses: tips and traps for in-house counselLink.
  • 30 April – North Ryde, Australia – ACLA – Updated Drafting IP Clauses: tips and traps for in-house counselLink.

 

@PedroMMalaquias (LL.M. in Intellectual Property Law at Queen Mary, University of London; Portuguese Qualified lawyer; Queen Mary Journal of Intellectual Property, Associate Editor)

Scandinavia fights piracy

by Julius Berg Kaasin

Inspired by the EU’s “Action Plan on the Enforcement of Intellectual Property Rights”, Scandinavian governments have just launched various campaigns which aim to fight import, distribution and sale of pirate and trade mark counterfeited goods. The campaign aims at informing both consumers and businesses about the negative consequences of piracy and counterfeits, as well as helping right holders and manufacturers and producers to enforce their rights against being copied illegally.

The Norwegian campaign includes the public website www.velgekte.no (only available in Norwegian) and a cooperation network consisting of the relevant public authorities, such as the Norwegian Industrial Property Office (NIPO), Ministry of Trade, Industries and Fisheries, Ministry of Culture, the Norwegian customs authorities, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) and several other key public players.

Piracy is still a considerable problem in Norway, not only with regard to file sharing and other more modern types of piracy. More traditional piracy is also putting people’s health and safety at stake, particularly through non-authentic medicines and essential spare parts for various industries. Imagine for instance what damage non-authentic and inferior spare parts can do to a Norwegian oil platform, or a Swedish nuclear plant… Research also shows that piracy is increasingly related to organized crime.

On the launch of velgekte.no, Industry Minister Monica Mæland explained that the total value of pirate goods worldwide is close to 1700 billion dollars for 2015, which means a loss of around 2,5 million jobs. In addition around 3000 deaths can be related to pirate goods in Europe, adding to the several hundred thousand deaths in non-developed countries. This makes pirate and trademark counterfeited goods a substantial enemy against modern society and the welfare state.

Other Scandinavian countries such as Denmark and Sweden has also launched similar campaigns, see for instance www.stoppiratkopiering.dk (only in Danish), making the fight against piracy a pan-Scandinavian initiative. In Sweden we have also just recently seen the first few examples of convictions of private members of the public for illegal downloads of music, movies and other online content. There are also heavy debates regarding the responsibility for file sharing services, e.g. Pirate Bay, with some arguing that more responsibility should be placed on the various service providers and search engines. National investigation and prosecution authorities in the Scandinavian countries have also recently engaged in a closer cooperation aiming at closing down cross-border piracy and counterfeit activities.
Julius Berg Kaasin, QMJIP Associate Editor

The Limitations of Canada’s Access to Medicines Regime: Lessons from Apotex’s export of essential medicines to Rwanda

by Jenna Himelfarb

INTRODUCTION

Canada’s Access to Medicines Regime (CAMR) is a system under which least-developed and developing countries can import medicines manufactured in Canada that are needed to treat their public health concerns. It has only been used once. Apotex, Inc. (Apotex) exported an anti-retroviral HIV/AIDS medication to Rwanda. This essay will discuss how the high administrative burdens associated with CAMR make it ineffective, thereby discouraging its use by pharmaceutical companies that would otherwise be willing to supply essential medicines to least-developed and developing countries.

CONTEXT – Understanding TRIPS, The Doha Declaration, and CAMR

The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) is an international agreement administered by the Word Trade Organization (WTO). Since its adoption in 1994, TRIPS has outlined intellectual property norms to be followed by all WTO Member states. It regulates international trade and the procedure for resolving international intellectual property disputes.[1]

TRIPS also creates conditions for compulsory licensing regimes. Article 31 sets out conditions that apply when a WTO Member’s domestic law allows for compulsory licensing.[2] Of particular controversy is Article 31(f), which says that where there is a compulsory licensing scheme in a Member country, “any such use shall be authorized predominantly for the supply of the domestic market of the Member authorizing such use”.[3] This effectively prevents the export of medicines from developed Member countries with compulsory licensing schemes.

In response, WTO adopted the Doha Declaration on the TRIPS Agreement and Public Health in 2001 (Doha Declaration), which reaffirmed the flexibility of TRIPS. The Doha Declaration recognized that intellectual property protection has effects on the prices of essential medicines, and that these must be considered in evaluating intellectual property protection and its importance for development and innovation.[4] Paragraph 6 of the Doha Declaration recognizes that:

“WTO Members with insufficient or no manufacturing capacities in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing under the TRIPS Agreement.”[5]

The WTO instructed the Council for TRIPS[6] to recommend a solution. In 2003, a recommendation was made which waived Article 31(f) of TRIPS for any least-developed country Member of WTO or any Member that has established that it has “insufficient or no manufacturing capacities in the pharmaceutical sector for the product(s) in question”.[7]

In the context of paragraph 6 of the Doha Declaration, developed countries can export pharmaceuticals to those countries with emergent health crises that would not otherwise have access to essential medicines. It was not until 2005 that this amendment to TRIPS was finally approved by WTO Members.[8] However, the changes cannot be formally included in TRIPS until at least two thirds of WTO Members accept the change. To date, the WTO has not met this threshold. The waiver recommended in 2003 remains in effect today, and will likely remain in effect until the changes can be formally adopted.[9]

Although it has not been formally adopted, some WTO Members have passed domestic legislation to implement the 2003 decision. In May 2004, Canada passed An Act to amend the Patent Act and the Food and Drugs Act, known as The Jean Chretien Pledge to Africa Act.[10] The stated purpose of the Act is to “facilitate access to pharmaceutical products to address public health problems affecting many developing and least- developed countries”.[11]

CAMR was implemented in May 2005, shortly after the Act was passed. The goal of CAMR is to “facilitate timely access to generic versions of patented drugs and medical devices, especially those needed by least-developed or developing countries to fight HIV/AIDS… and other diseases”.[12] While CAMR is based on the framework laid out by WTO in 2003, there are features that make the regime unique. The Canadian Government has said that some of the distinctive measures include CAMR’s:

“reliance on pre-approved lists of products eligible for export and countries eligible to import them and making the grant of an export licence contingent upon the health and safety review of the product by the exporting country’s regulatory authority. In addition, whereas many other regimes waive the requirement that a pharmaceutical manufacturer request a voluntary licence from the patent holder(s) prior to applying for a compulsory licence, in cases of a national emergency or circumstances of extreme urgency, CAMR does not”.[13]

As discussed below, these administrative burdens make CAMR more exacting than the regime envisioned by the WTO.[14]

CASE STUDY – The Use of CAMR by Apotex to Ship Pharmaceuticals to Rwanda

Apotex is the largest producer of pharmaceutical drugs in Canada. It produces over 300 generic pharmaceuticals and exports to over 115 countries, with sales exceeding $1 billion every year.[15]

In December 2004, only months after The Jean Chretien Pledge to Africa Act was passed, and before the implementation of CAMR, Apotex agreed to develop a new anti-retroviral drug called Apo-TriAvir, which combined three medicines used in the treatment of HIV/AIDS.[16] An active prototype was developed by April 2005. While all the components of Apo-TriAvir were listed, the new composite drug was not on the list of products eligible for compulsory licensing pursuant to the Patent Act. The Patent Act defines a “pharmaceutical product” as “any patented product listed in Schedule 1” of the Act.[17] If a product is not listed in Schedule 1, it cannot be eligible for export under CAMR. To have the Patent Act amended requires having recommendations from both the Minister of Industry and the Minister of Health to the Governor in Council, who then uses his/her discretion to determine whether an amendment should be made.[18] Schedule 1 was amended to include Apo-TriAvir in September 2005.

It was only after this step was complete that Apotex was able, in December 2005, to submit a request to Health Canada, Canada’s regulatory authority, to manufacture Apo-TriAvir in quantities for export. Under CAMR, manufacturers of pharmaceuticals are required to “submit scientific evidence of a product’s safety, effectiveness and quality… before receiving permission to export it”.[19]

The manufacturer is also required to provide Health Canada with information to demonstrate that the product intended for export will comply with the Food and Drug Regulations. This requires the manufacturer to show that it has incorporated “anti-diversionary” measures meant to ensure that medical products are not sent to unintended markets. For example, there are strict labeling requirements and the colours of pills must be different than the ones sold in Canada. In addition, the manufacturer is required to maintain a website with information about the new drug to be exported.

These regulatory steps are not required under the framework laid out by WTO. They are additional administrative steps required only under CAMR. Health Canada is given twelve months to complete this review process. They approved Apo-TriAvir in June 2006, six months after the application was submitted.[20]

The Jean Chretien Pledge to Africa Act sets out conditions that must be met before a compulsory licence will be granted. It requires that an applicant “sought from the… patentees… a licence to manufacture and sell the pharmaceutical product for export to the country or WTO Member named in the application… and that such efforts have not been successful”.[21] Accordingly, Apotex had to seek voluntary licences from each party that owned patents over the medicines necessary to develop Apo-TriAvir before being able to begin the process of getting a compulsory licence. These negotiations are not required under TRIPS nor are they required under the 2003 decision; they are required only under CAMR.

Apotex began negotiations in July 2007. Each of the major patent holders published press releases signifying that they would be willing to grant the voluntary licences.[22] Despite indications that there would be eventual support for the voluntary licensing of Apo-TriAvir, Apotex went forward and applied for a compulsory licence.[23]

According to Apotex, “GSK and Shire did not oppose the application, but chose not to grant a voluntary licence… Boehringer Ingelheim was also not prepared to freely grant a licence.”[24] Bruce Clark, then the Vice-President, Regulatory and Medical Affairs of Apotex, stated that by not providing any voluntary licences, “the brand side of the industry” forced Apotex to apply for compulsory licences.[25] In September 2007, after negotiations for voluntary licensing had reportedly stalled, Apotex filed an application under CAMR to export Apo-TriAvir.

The application complied with The Jean Chretien Pledge to Africa Act requirement that it be submitted, at earliest, thirty days after voluntary negotiations had begun.[26] The Commissioner of Patents granted this application fifteen days later. The compulsory licence granted Apotex the right to “make, construct and use, the patented inventions… solely for purposes directly related to the manufacturing of [Apo-TriAvir], and to sell it for export”.[27]

In October 2007, Canada informed WTO that it had granted authorization to a company to “make a generic version of a patented medicine for export under special WTO provisions agreed in 2003”.[28]

During the time of the negotiations in July 2007, three months prior to the granting of the compulsory licence by Canada, Rwanda became the first country to notify WTO of its intention to import generic drugs under the compulsory licensing scheme adopted in the 2003 decision.[29] Because Rwanda is a least-developed country, it is automatically an “eligible importing member” under paragraph 1(b) of the 2003 decision and it does not have to apply for such status by demonstrating its lack of manufacturing capacity. The government of Rwanda made clear in its notification to WTO that it intended to import 260,000 packs of Apo-TriAvir.[30]

Despite the stated intention to buy the drugs from Apotex in Canada, Rwanda opened a public tender for the supply of Apo-TriAvir in October 2007.[31] Rwandan domestic law requires the issuing of tenders whenever drugs are imported. Dr. Innocent Nyaruhirira, the Rwandan Health State Minister for Aids and other Pandemics at the time, said that no formal deal had been made with Canada and that the importer would be confirmed through the tendering process. He added that if there is “any country that produces such drugs with same quality at a cheap price, we will import from there”.[32] The Rwandan government claimed that it would award the tender based on World Health Organization standards of price and quality.[33]

After overcoming the domestic obstacles imposed by CAMR, Apotex managed to overcome one final international hurdle. In May 2008, eight months after the tender was opened, Apotex announced that it had won and would be supplying Apo-TriAvir to Rwanda.[34] Thereafter, Apotex began manufacturing the drug, which had finally been approved for export. In September 2008, Apotex sent its first shipment of 6,785,000 tablets to Rwanda. One year later, in September 2009, Apotex completed the order by sending a second shipment of 7,628,000 tablets.[35]

Apotex has not participated in the CAMR regime since, nor has any other pharmaceutical company. This shipment to Rwanda remains the only use of CAMR.

THE AFTERMATH – Responses to the Process from Key Players

In 2010, at the WTO TRIPS Council related to the review of the Paragraph 6 system, Canada delivered an intervention about its experience using CAMR. Canada said that the Apotex-Rwanda example “clearly shows that Canada’s Regime and the Waiver are efficient, effective and timely”.[36] Canada stressed the limited role of CAMR in the whole process. Canada was required to issue the compulsory licence. Even including the time spent in negotiations for voluntary licences, the licence was issued in two months. Thereafter, the only role played by Canada was a pre-export inspection. Canada concluded that the “challenges and delays in Apotex’s export of medicines to Rwanda were separate from CAMR”.[37]

In contrast, Apotex has announced that it will not apply for a compulsory licence again under CAMR because of its inherent inefficiencies. The company has emphasized that it took four years to achieve the first shipment of medicines, and has stressed that in its current form, CAMR is overly complex and not workable for either Apotex or for the developing countries it is intended to benefit.[38]

John Hems, then the Director, Regulatory Affairs of Apotex, wrote a letter to Health Canada and Industry Canada in January 2007 expressing some of Apotex’s ongoing policy concerns with the process. Hems requested that there be a clear and transparent process implemented to allow for the addition of products to Schedule 1.[39] Hems also lamented CAMR’s requirement that the importing country’s notification to WTO should be included in an application for a compulsory licence. Eligible countries are clearly listed, and that should be sufficient. He pointed out that this requirement could act as a deterrent for countries that do not want to publicly ask for such an import until the licences are obtained.[40]

Hems went on to criticize the administrative burdens of CAMR. In particular, he expressed concern about the requirement to request voluntary licences before being able to apply for a compulsory licence.[41] This constraint adds potential for abuse and litigation, and undoubtedly increases delays (as there is at least a thirty day negotiation requirement). Finally, Hems stated that the anti-diversionary methods are sufficient and that the requirement that each company maintain a website is an unnecessary burden.[42] It is especially onerous to smaller manufacturers and could act as a deterrent from participation.

After complying with CAMR, Apotex had to comply with Rwanda’s own domestic standards before being able to export Apo-TriAvir. The tender process, as required by Rwandan law, took until eight months after the compulsory licence had been granted. Understandably, Apotex was unwilling to start mass production of the drug until it had assurance that the Apo-TriAvir would be imported by Rwanda.[43] This waiting period was a futile use of time.

Since 2008, a generic pharmaceutical company in India has been able to provide the medicine to Rwanda at the same price charged by Apotex, but without triggering the cumbersome requirements of any waiver.[44] That Rwanda has turned elsewhere to import the medicine demonstrates that CAMR is not essential to the provision of essential medicines to least-developed and developing countries.

CRITICAL ANALYSIS – CAMR Provides Economic Disincentive to Companies

Inherent in Apotex’s criticisms of CAMR is the idea that it is not an economically viable regime, because it is not cost-effective to produce medicines for only one importing country at a time. Under CAMR, a compulsory licence cannot be granted unless an eligible importing country has indicated its need to WTO. Furthermore, Canada has imposed a maximum term of two years for its compulsory licences.[45] Therefore, if an eligible country other than Rwanda presently indicated to WTO its need for a drug like Apo-TriAvir, Apotex’s compulsory licence would no longer be valid and it, or any other manufacturer would have to start the licensing process from the beginning.

It follows that for CAMR to be effective, multiple eligible countries would have to indicate to WTO their need to import essential medicines at the same time, so that a manufacturer would be able to produce the medicine en masse. Practical barriers make this unlikely. Various countries notifying WTO concurrently of a common need is an improbable event. Furthermore, as discussed above, countries are often not willing to make their need known until their applications have been approved. The two-year limit imposed by CAMR is consequently one of the regime’s most problematic elements.

It is not economically rational for manufacturers to invest in the development, production, scheduling, and approval of a new drug if that drug can only be exported to one country for only two years, after which all prior efforts and investment expire. Jack Kay, president of Apotex, said that the company “invested millions in the research and development of the product, legal costs in negotiating with the brand companies and made no profits in the process”.[46] Apotex has pledged to continue to develop anti-retroviral HIV medications only once CAMR has been simplified.

When Apotex entered into negotiations for voluntary licences and subsequently applied for a compulsory licence, it made clear its intention to sell the medicine for no profit. The company has stated that it invested $2 million developing the product and that the components of Apo-TriAvir are sold for approximately $4.50 per tablet in Canada. Because of the human rights implications, Apotex was willing to supply the drug to Rwanda at their cost of $0.39 per tablet.[47]

Ultimately, Apotex supplied the drug to Rwanda for $0.195 per tablet.[48] Apotex complied with the bureaucratic requirements of CAMR having not guarantee that it would eventual be able to export the medicine. It is widely believed that Apotex lowered the price to remain competitive in the bidding process with other countries that do not have similarly stringent patent requirements.[49] Having to halve their price certainly cost Apotex money, and this likely underlies its adamant opposition to ever using CAMR, in its current form, again. In 2008, Rwanda wanted to double its order. However, Apotex refused because they were restricted “by the structure of the legislation”.[50] Despite Apotex’s refusal to continue exporting under CAMR, Rwanda was readily able to purchase the medicines, at the same price, from an Indian pharmaceutical company.[51] CAMR fails to account for the domestic legislation of importing countries. It is likely that such requirements will always cause further delays in an already time-consuming process.

If Apotex, amongst the world’s largest generic pharmaceutical companies, has no economic incentive to use CAMR, it can be assumed that the regime is similarly too costly for other pharmaceutical companies in the developed world. It was concluded at a hearing of the European Parliament, after consideration of the system, that it is doubtful that any company in Europe would make use of CAMR.[52] For a compulsory licensing regime to be effective at incentivizing pharmaceutical manufacturers to focus on health concerns prevalent in the developing world, the regime has to be economically rational.

CONCLUSION

It took close to four years from the time of the development of Apo-TriAvir until its final shipment to Rwanda. The delays were caused in large part by the high administrative burdens of CAMR. These burdens have proved so costly that they have acted as a disincentive and prevented other pharmaceutical companies from exporting essential medicines under a compulsory licence.

Nevertheless, the case shows that it is possible for companies in the developed world to export medicines to those who lack the necessary infrastructure to develop the drugs themselves. That the process required so much time and investment demonstrates that the regime is in need of major reform in order to make it a worthwhile venture for companies in the developed world. Yet, it also demonstrates that these reforms can be worthwhile. Ultimately, Apotex was able to ship enough medication to treat 21,000 patients for two years in Rwanda.[53] If there is a regime that will improve human rights by providing rapid access to medicines in a costly and efficient manner, that is a regime worth pursuing.

 

Jenna Himelfarb

QMJIP Guest Editor

Toronto Law School

 

[1] WTO, Intellectual property: protection and enforcement, online: <http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm&gt;.

[2] For more information about compulsory licensing, see: Deli Yang, “Compulsory Licensing: For Better of For Worse, the Done Deal Lies in the Balance” (2012) 17 Journal of Intellectual Property Rights 76-81.

[3] WTO, Agreement on Trade-Related Aspects of Intellectual Property Rights, Marrakesh: WTO, 1994, 5th Sess, online: <http://www.wto.org/english/docs_e/legal_e/27-trips_04c_e.htm>.

[4] WTO, Declaration on the TRIPS agreement and public health, WTO/MIN(01)/Dec/2, 4th Sess at para 4 online: <http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.pdf&gt;.

[5] Ibid at para 6.

[6] See: WTO, Work of the Trips Council, online: <http://www.wto.org/english/tratop_e/trips_e/intel6_e.htm&gt;.

[7] Implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement and public health, WT Decision L/540 of 30 August 2003, online: <http://www.wto.org/english/tratop_e/trips_e/implem_para6_e.htm&gt;.

[8] WTO, Press Release, 426, “Members OK amendment to make health flexibility permanent” (6 December 2005) online: <http://www.wto.org/english/news_e/pres05_e/pr426_e.htm&gt;. >

[9] The waiver will likely stay in place “temporarily” as the WTO has continuously pushed back the deadline for formally approving the changes; See: <http://www.wto.org/english/tratop_e/trips_e/amendment_e.html>.

[10] An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), SC 2004, c 23.

[11] Ibid at summary.

[12] Government of Canada, Background, online: Canada’s Access to Medicines Regime <http://www.camr-rcam.gc.ca/intro/context-eng.php&gt;.

[13] Canada, Report on the Statutory Review of Section 21.01 to 21.19 of the Patent Act, (Ottawa: Industry Canada, 2007) at 29.

[14] For a list of some of the other unique requirements, see: <http://www.camr-rcam.gc.ca/intro/regime-eng.php>.

[15] “About Apotex”, online: Apotex <http://www.apotex.com/global/about/default.asp&gt;.

[16] Matthew Rimmer, “Race Against Time: The export of essential medicines to Rwanda” (2008) 2 Public Health Ethics at 11.

[17] An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), supra note 10 at s 21.02.

[18] Ibid at s 21.03(1).

[19] Government of Canada, Canada’s Drug and Medical Devices Review Process, online: Canada’s Access to Medicines Regime <http://www.camr-rcam.gc.ca/countr-pays/elig-admis/process-eng.php&gt;.

[20] “Canada’s Intervention to TRIPS Council: Experience using the System (Apotex-Rwanda Case)” (27 October 2010) online: Knowledge Ecology International <http://keionline.org/node/1000&gt;.

[21] An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), supra note 10 at s 21.04(3)(c)(i).

[22] For relevant press releases, see: Boehringer Ingelheim (Canada) Ltd, Press Release, “Boehringer Ingelheim Offers a Licence to Apotex to Export BI’s patented product nevirapine to Developing Countries with terms better than that required by Canadian Legislation” (22 August 2007) online: <http://www.boehringer-ingelheim.ca/en/news/press_releases/2007/22_august_2007.html>; GlaxoSmithKline plc, Press Release, “GSK gives consent under Canada’s Access to Medicines Regime for generic version of HIV/AIDS medicine for use in Rwanda” (8 August 2007) online: <http://www.gsk.com/media/press-releases/2007/gsk-gives-consent-under-canadas-access-to-medicines-regime-for-generic-version-of-hivaids-medicine-for-use-in-rwanda.html>; Shire BioChem Inc, Press Release, “Shire supports Canada’s Access to Medicines Regime” (15 August 2007) online: <http://www.shire.com/shireplc/uploads/press/CAMR_15Aug07.pdf>.

[23] Ann Silversides, “Not a Single Pill”, Ottawa Citizen (13 August 2006), online: <http://www2.canada.com/ottawacitizen/features/aids/story.html?id=33dd04aa-52b6-437e-b4d1-d4c8d59010a4>.

[24] Apotex, Press Release, “Life Saving AIDS Drug for Africa Gets Final Clearance” (20 September 2007) online: <http://www.apotex.com/ca/en/about/press/20070920.asp&gt;.

[25] Parliament, Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce, 40th Sess, Issue 11 (22 October 2009).

[26] An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), supra note 10 at s 21.04(3)(c).

[27] WTO, Notification Under Paragraph 2(c) of the Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, IP/N/10/CAN/1 (2007), online: <http://www.wto.org/english/tratop_e/trips_e/ta_docs_e/3_ipn10can1_e.pdf&gt;.

[28] WTO, News Item, “Canada is first to notify compulsory licence to export generic drug” (4 October 2007) online: <http://www.wto.org/english/news_e/news07_e/trips_health_notif_oct07_e.htm&gt;.

[29] WTO, Notification Under Paragraph 2(a) of the Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, IP/N/9/RWA/1 (2007), online: <http://www.wto.org/english/tratop_e/trips_e/ta_docs_e/3_ipn9rwa1_e.pdf&gt;.

[30] Ibid.

[31] “Canada’s Intervention to TRIPS Council: Experience using the System (Apotex-Rwanda Case)”, supra note 20.

[32] Innocent Gahigana, “No Deal Yet on Aids Drug”, The New Times: Rwanda’s First Daily, online: <http://www.newtimes.co.rw/news/views/article_print.php?1259&a=258&icon=Print&gt;.

[33] International Centre for Trade and Sustainable Development, “Canadian WTO Notification Clears Path For Rwanda To Import Generic HIV/AIDS Drug”, Bridges Weekly Trade News Digest (10 October 2007) online: <http://ictsd.org/i/news/bridgesweekly/6568/>. See also: <http://politicswatch.com/drugs-september26-2007.htm&gt;.

[34] Apotex, Press Release, “Canadian Company Receives Final Tender Approval From Rwanda For Vital AIDS Drug” (7 May 2008) online: <http://www.apotex.com/ca/en/about/press/20080507.asp&gt;.

[35] “Canada’s Intervention to TRIPS Council: Experience using the System (Apotex-Rwanda Case)”, supra note 20.

[36] Ibid.

[37] Ibid.

[38] Apotex, Press Release, “CAMR Federal Law Needs to be Fixed if Life-Saving Drugs for Children are to be Developed” (14 May 2009) online: <http://www.apotex.com/global/about/press/20090514.asp&gt;.

[39] Letter from John Hems (23 January 2007) re: CAMR Consultation Paper, online: <http://www.camr-rcam.gc.ca/review-reviser/camr_rcam_apotex_18-eng.pdf>.

[40] Ibid.

[41] Ibid.

[42] Ibid.

[43] International Centre for Trade and Sustainable Development, “Rwanda Should Receive Cut-Price HIV/Aids Drugs In September, Five Years After 30 August Decision”, Bridges Weekly Trade News Digest (14 May 2008) online: <http://ictsd.org/i/news/bridgesweekly/11081/&gt;.

[44] Cynthia Ho, “Complicated Compulsory Licences: The Waiver/Article 31BIS ‘Solution’” (2011) 32 Oxford University Press at 217.

[45] An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), supra note 10 at s 21.09.

[46] Apotex, supra note 38.

[47] Parliament, Standing Committee on Industry, Science and Technology, 39th Parl, 1st Sess, No 055 (23 April 2007).

[48] Canadian HIV/AIDS Legal Network, News Release, “Canada’s Law on Compulsory Licensing for Export” (3 December 2009) online: <http://www.aidslaw.ca/publications/interfaces/downloadFile.php?ref=1585&gt;.

[49] In particular, Indian companies were able to undercut the 39¢ price, See: Amir Attaran, “Why CAMR Can Never Succeed” (2010) 60 UNB Law Journal 150-160 at 153.

[50] Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce, supra note 25.

[51] For more information on India’s compulsory licensing scheme, see: http://ipindia.nic.in/ipr/patent/eVersion_ActRules/sections/ps92.html (s 92A); For a comparative analysis with CAMR, see: Emily Ng & Jillian Kohler, “Finding Flaws: The Limitations of Compulsory Licensing for Improving Access to Medicines – An International Comparison” (2008) 16 Health Law Journal 143 at 166.

[52] Holger Hestermeyer, “Canadian-made Drugs for Rwanda: The First Application of the WTO Waiver on Patents and Medicines” Insights (10 December 2007), online: The American Society of International Law <http://www.asil.org/insights/volume/11/issue/28/canadian-made-drugs-rwanda-first-application-wto-waiver-patents-and#_edn1&gt;.

[53] Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce, supra note 25.

BIBLIOGRAPHY

Legislation

An Act to amend the Patent Act and the Food and Drugs Act (The Jean Chrétien Pledge to Africa), SC 2004, c 23.

Patent Act, RSC 1985, c P-4.

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“Canada’s Intervention to TRIPS Council: Experience using the System (Apotex-Rwanda Case)” (27 October 2010) online: Knowledge Ecology International <http://keionline.org/node/1000&gt;.

Amir Attaran, “Why CAMR Can Never Succeed” (2010) 60 UNB Law Journal 150-160.

Ann Silversides, “Not a Single Pill”, Ottawa Citizen (13 August 2006), online: <http://www2.canada.com/ottawacitizen/features/aids/story.html?id=33dd04aa-52b6-437e-b4d1-d4c8d59010a4>.

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Apotex, Press Release, “Canadian Company Receives Final Tender Approval From Rwanda For Vital AIDS Drug” (7 May 2008) online: <http://www.apotex.com/ca/en/about/press/20080507.asp&gt;.

Apotex, Press Release, “Life Saving AIDS Drug for Africa Gets Final Clearance” (20 September 2007) online: <http://www.apotex.com/ca/en/about/press/20070920.asp&gt;.

Boehringer Ingelheim (Canada) Ltd, Press Release, “Boehringer Ingelheim Offers a Licence to Apotex to Export BI’s patented product nevirapine to Developing Countries with terms better than that required by Canadian Legislation” (22 August 2007) online: <http://www.boehringer-ingelheim.ca/en/news/press_releases/2007/22_august_2007.html>.

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Cynthia Ho, “Complicated Compulsory Licences: The Waiver/Article 31BIS ‘Solution’” (2011) 32 Oxford University Press.

Deli Yang, “Compulsory Licensing: For Better of For Worse, the Done Deal Lies in the Balance” (2012) 17 Journal of Intellectual Property Rights 76-81.

Emily Ng & Jillian Kohler, “Finding Flaws: The Limitations of Compulsory Licensing for Improving Access to Medicines – An International Comparison” (2008) 16 Health Law Journal 143.

Government of Canada, Background, online: Canada’s Access to Medicines Regime <http://www.camr-rcam.gc.ca/intro/context-eng.php&gt;.

GlaxoSmithKline plc, Press Release, “GSK gives consent under Canada’s Access to Medicines Regime for generic version of HIV/AIDS medicine for use in Rwanda” (8 August 2007) online: <http://www.gsk.com/media/press-releases/2007/gsk-gives-consent-under-canadas-access-to-medicines-regime-for-generic-version-of-hivaids-medicine-for-use-in-rwanda.html>.

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Holger Hestermeyer, “Canadian-made Drugs for Rwanda: The First Application of the WTO Waiver on Patents and Medicines” Insights (10 December 2007), online: The American Society of International Law <http://www.asil.org/insights/volume/11/issue/28/canadian-made-drugs-rwanda-first-application-wto-waiver-patents-and#_edn1&gt;.

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International Centre for Trade and Sustainable Development, “Canadian WTO Notification Clears Path For Rwanda To Import Generic HIV/AIDS Drug”, Bridges Weekly Trade News Digest (10 October 2007) online: <http://ictsd.org/i/news/bridgesweekly/6568/>.

International Centre for Trade and Sustainable Development, “Rwanda Should Receive Cut-Price HIV/Aids Drugs In September, Five Years After 30 August Decision”, Bridges Weekly Trade News Digest (14 May 2008) online: <http://ictsd.org/i/news/bridgesweekly/11081/&gt;.

Letter from John Hems (23 January 2007) re: CAMR Consultation Paper, online: <http://www.camr-rcam.gc.ca/review-reviser/camr_rcam_apotex_18-eng.pdf>.

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WTO, Notification Under Paragraph 2(c) of the Decision of 30 August 2003 on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, IP/N/10/CAN/1 (2007), online: <http://www.wto.org/english/tratop_e/trips_e/ta_docs_e/3_ipn10can1_e.pdf&gt;.

WTO, Press Release, 426, “Members OK amendment to make health flexibility permanent” (6 December 2005) online: <http://www.wto.org/english/news_e/pres05_e/pr426_e.htm&gt;.

WTO, Work of the Trips Council, online: <http://www.wto.org/english/tratop_e/trips_e/intel6_e.htm&gt;.

“Annual Conference on EU Law in the Pharmaceutical Sector 2015” (event review)

by María Victoria Rivas Llanos

Last 26-27 February 2015, the Annual Conference on EU Law in the Pharmaceutical Sector took place in the Management Centre Europe, in Brussels. The conference was organised by the Academy of European Law (ERA) and chaired by renowned professionals in the areas of European patent litigation and Competition Law in the pharmaceutical sector; namely Christopher Stothers (Partner, Arnold & Porter LLP, London), Ingrid Vandenborre (Partner, Skadden, Arps, Slate, Meagher & Flom LLP, Brussels), Michael Jürgen Werner (Partner, Norton Rose Fulbright LLP, Brussels) and Alexander Natz (Secretary General, European Confederation of Pharmaceutical Entrepreneurs EUCOPE, Brussels).

Among the speakers were also experts from the European Medicines Agency (EMA), London; the European Commission, Brussels; and Les Laboratories Servier, Suresnes.

The event was held in two days.

Thursday 26 February:

Mr. Christopher Stothers opened the session with an introduction to the evolving practice of the CJEU on Supplementary Protection Certificates (SPCs) for pharmaceutical products and the Court’s interpretation of Art. 3 (a)-(d) of the Regulation 469/2009[1].

It was followed by an overview of the proposed new EU Directive on Trade Secrets[2] by Ms. Gill Grassie (Partner, Brodies LLP, Edinburgh) and its impact on the pharmaceutical sector, namely the promotion of innovation and reliability on the trade secrets regime as opposed to the patent system, as well as encouragement of cross-border sharing of know-how. Subsequently, Ms. Grassie made a brief introduction to EMA’s new policy on commercial confidential information and access to clinical trials[3].

Ms. Penny Gilbert (Partner, Powell Gilbert LLP, London) presented the current status of negotiations on the Unitary Patent Package and the potential options for litigation that will be available both for the patentee and the defendant during the 7-year transitional period after the entry into force of the UPC Agreement[4] (European Patent Court vs. national litigation and forum shopping). The new Unitary Patent Package promises to bring greater certainty through a centralised European patent litigation system, as well as being potentially quicker, simpler and cheaper than the current system of national patents.

Mr. Emmanuel Gougé (Partner, Pinsent Masons, Paris) talked about the licensing agreements in the pharmaceutical sector contemplated by the Technology Transfer Block Exemption Regulation (TTBER)[5] and its Guidelines. The TTBER contemplates only bilateral agreements, thus multi-party agreements (e.g., patent pools) fall outside the TTBER and are covered by the Guidelines. Mr. Gougé explained the main changes introduced by the new TTBER 2014 in respect of the TTBER 2004, as regards termination clauses (only allowed on exclusive agreements under the new Regulation) and settlement agreements. Subsequently, Mr. Gougé clarified the meaning of “technology pools” under the new Guidelines and their advantages over individual licensing, as well as their possible downsides for the pharmaceutical industry.

Ms. Ingrid Vandenborre discussed the enforcement of Arts. 101 and 102 of the Treaty on the Functioning of the European Union (TFEU)[6] and the impact on the pharmaceutical sector. Then, Ms. Vanderborre focused on the most recent decisions adopted by the European Commission on patent settlement agreements for the commercialisation of medicines and the Commission’s merger decisions. Finally, Ms. Vanderborre presented the enforcement of the aforementioned dispositions in several EU Member States.

A round table chaired by Mr. Michael Jürgen Werner (Partner, Norton Rose Fulbright LLP, Brussels) and presided by Professor Ian Forrester (Partner, White & Case, Brussels), Ms. Marleen H.J. van der Horst (Partner, BarentsKrans N.V., The Hague) and Ms. Sylvie Jaguelin (Patent Director, Les Laboratories Servier, Suresnes), discussed the threshold between legitimate and illegitimate patent settlements in pharmaceutical patents disputes, on a comparative perspective between the EU and the US legislations. Further aspects of the debate were the “by object” decisions (e.g., Servier and Lundbeck cases, the so called “pay for delay” agreements) in connexion with public policy issues on healthcare, as a possible justification for the “European Commission’s extravagantly hostile policy against patent settlements” (according to Professor Forrester).

Friday 27 December:

The second day started with an update on the Medical Devices (MDs) and the In-vitro Diagnosis (IVDs) Directives[7] presented by Mr. Grant Castle (Partner, Covington & Burling LLP, London). Mr. Grant explained the regulatory scheme for MDs and IVDs in terms of classification, conformity assessment, CE marking, device vigilance and safeguard measures, and the key changes under the amendments recently adopted by the European Parliament on the proposal for a new regulation for both MDs and IVDs[8].

Mr. Aleksandar Rusanov (Legal Administrator, European Medicines Agency, London) explained EMA’s new policy on transparency and access to clinical data documents, according to Art. 80 of Regulation (EC) No 726/2004[9], which is to be applied within the limits of Art. 4 (2) and (3) of Regulation (EC) No 1049/2001[10] and without prejudice of the new Regulation on clinical trials on medicinal products for human use[11], still to come into force. The publication process for clinical reports under the new system is based on two pillars: Terms of Use (ToU) which govern the access to and use of clinical reports, and a user-friendly technical tool allowing access to such clinical reports with two modalities to see the data (clinical reports available on-screen for any user and downloadable clinical reports for registered identified users).

Professor Alexander Natz (Secretary General, European Confederation of Pharmaceutical Entrepreneurs, Brussels) talked about EU legislation on joint procurement for pharmaceutical products[12] and recent practices in the EU Member States’ tendering markets, with special emphasis on the German market as a reference for International Reference Pricing (IRP). Professor Natz finalised with an outline of the principal European bodies concerned with health technology assessment (namely EMA, EURODIS and EUnetHAT).

Ms. Ivone Kaizeler (Directorate General for Trade, European Commission, Brussels) closed the event with a presentation on the main features of the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the US and its implications for the pharmaceutical sector. The agreement, which covers tariff and non-tariff regulatory aspects, aims to strengthen economic partnership between the EU and the US (reducing non-tariff barriers to trade), as well as bringing together international practices and standards. The priorities of the partnership regarding the pharmaceutical sector are: the recognition of Good Manufacturing Practices’ inspections, collaboration on state of the art and on innovative areas, increased exchange of confidential information and the establishment of common standards for paediatric investigation plans.

On a personal note, it was a very high quality event. The conference was well structured and counted with the presence of senior members of European institutions as well as renowned practitioners. It was a privilege to attend and I strongly recommend it for the forthcoming years to anyone with an interest in the pharmaceutical field.

[1] Regulation (EC) No 469/2009 of the European Parliament and of the Council Of 6 May 2009 Concerning the Supplementary Protection Certificate for Medicinal Products.

[2] European Commission, Brussels, 28 of November 2013, COM (2013) 813 final, Proposal for a Directive of the European Parliament and of the Council on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure.

[3] See Regulation (EU) No 536/2014 of the European Parliament and of the Council of 16 April 2014 on Clinical Trials on Medicinal Products for Human Use, and Repealing Directive 2001/20/EC.

[4] Agreement on a Unified Patent Court (UPC Agreement, 2013/C 175/01); signed on 19 February 2013. See Art. 83.

[5] Commission Regulation (EU) No 316/2014 of 21 March 2014 on the Application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements.

[6] Consolidated version of the Treaty on European Union and the Treaty on the Functioning of the European Union 2012/C 326/01.

[7] Council Directive 93/42/EEC of 14 June 1993 concerning medical devices, and Council Directive 90/385/ EEC of 20 June 1990 on the approximation of the laws of the Member States relating to active implantable medical devices; and Directive 98/79/EC of the European Parliament and of the Council of 27 October 1998 on in vitro diagnostic medical devices.

[8] See Amendments adopted by the European Parliament on 22 October 2013 on the proposal for a regulation of the European Parliament and of the Council on medical devices, and amending Directive 2001/83/EC, Regulation (EC) No 178/2002 and Regulation (EC) No 1223/2009 (COM(2012)0542 – C7-0318/2012 – 2012/0266(COD)); and Amendments adopted by the European Parliament on 22 October 2013 on the proposal for a regulation of the European Parliament and of the Council on in vitro diagnostic medical devices (COM(2012)0541 – C7-0317/2012 – 2012/0267(COD)).

[9] Regulation (EC) No 726/2004 of the European Parliament and of the Council of 31 March 2004 laying down community procedures for the authorisation and supervision of medicinal products for human and veterinary use and establishing a European Medicines Agency.

[10] Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents.

[11] Regulation (EU) No 536/2014 of the European Parliament and of the Council of 16 April 2014 on clinical trials on medicinal products for human use, and repealing Directive 2001/20/EC.

[12] Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC; and Decision No 1082/2013/EU of the European Parliament and of the Council of 22 October 2013 on serious cross-border threats to health and repealing Decision No 2119/98/EC.

ECTA Round Table on 3D Printing and IPRs – Update on the Trade Marks Legislative Package (Event Review – Part I)

by Pedro Malaquias

On 11 March, ECTA – The European Communities Trade Mark Association hosted in Brussels a Round Table on 3d Printing and Intellectual Property Rights. The event was also a chance to have the European Commission presenting an update on the trade marks legislative package. This post is a report of the presentation made by Michael Koenig, Deputy Head of Unit, Industrial Property, DG GROW – Internal Market, Industry, Entrepreneurship and SMEs, which dealt with this last issue.

The event started with a welcome speech by Sozos-Christos Theodoulou, ECTA’s Vice-President, who made a short presentation about ECTA, whose task is to ‘promote the knowledge and professionalism of members and owners alike in the fields of trade marks, designs and related rights, within the European Union’ and invited the audience to attend ECTA’S 34th Annual Conference. This event will take place from Wednesday 10 June to Saturday 13 June 2015, in Hamburg, Germany. Further details and registration form can be found at the website of the event.

After this short presentation, the floor was given to Mr Koenig, who, as mentioned, was invited to provide an update on the status of the trade marks legislative package. For further information on the revision of the EU trade mark system – including the revision proposals for Community trade mark Regulation and Trade mark Directive –, see here.

Although this package does not constitute a revolution, it is still a real reform, which aims to improve the system and further harmonise national laws so that the national routes for trade mark registration remain attractive to companies that use both the national and EU trade mark system. As such, the process for its approval requires a lot of work and time (and controversy – for a recent position from MARQUES on the topic, see here).

Speaking of his personal impressions and with the disclaimer that what was being said could not be understood as the Commission’s official position, Mr Koenig stated that the legislative process is coming to an end and that after 4 trilogues, he expected that only more would be needed to close the file.[1] As such, a final document should be expected around Easter and in any case during the Latvian Presidency of the Council of the EU.

The presentation was divided in three parts. The first section dealt with the Commission proposals that had not been accepted so far and that had little chance of reaching the final text. The first reference was to the harmonisation of the ex officio examination of whether a trade mark application is eligible for registration. Under article 41 of the Directive (proposal), this examination would not cover relative grounds. However, it seems that this area will remain excluded from harmonisation.

The second area where an agreement between the legislators seems impossible concerns the harmonisation of the fee structure (article 44). Although the Community Trade Mark system will be changed to a one fee per class system, the system applicable to national trade marks will remain at the discretion of Member States.

The second part of the presentation dealt with the semi-formal agreements that been concluded between the EU institutions in the last trilogue. Mr Koenig explained that a compromise had been found in respect of the Commission’s proposal for goods in transit. Trade Mark proprietors will be entitled to prevent third parties from bringing goods into the customs territory of the Member State without being released for free circulation there, where such goods come from third countries and bear without authorization a trade mark which is essentially identical to the trade mark registered in respect of such goods. However, a safe guard was introduced allowing the person shipping the goods (with burden of proof) to establish in court that the trade mark holder does not have a right to block the marketing of the goods in the target country.

A positive outcome was also reached in respect of the importing of goods into the EU where it is only the consignor who acts for commercial purposes. Although the provision in the initial proposal has been removed, it is considered that the solution proposed by the Commission is now part of the EU acquis as a result of the Court of Justice of the European Union decision in Blomqvist v Rolex.[2]

Full agreements seems also to have been obtained in respect of the provisions allowing proceedings against the distribution and sale of labels and packaging or similar items which may subsequently be combined with illicit products. An explicit rule covering this activity will now be included in the Regulation and the Directive.

The proposal of the Commission for the modernisation of the definition of a European trade mark has also been accepted and, hence, the requirement of ‘graphic representability’ will no longer exist. It is hoped that this paves the way for a more open system.

Another area of agreement concerns the designation and classification of goods and services, following the decision in the IP Translator case.[3] As a result, the literal meaning understanding will find its way into the legislation. However, doubts remain in respect of the timing and transition period of these rules.

Finally, the proposals concerning filling date and requirements for trade marks applications, non-use as defence in infringement proceedings, administrative opposition procedures, certification trade marks and harmonisation of the protection of geographical indications have been agreed and will find its way towards the final text.

The last part of the presentation was dedicated to what is still open for discussion. As referred to, some uncertainty remains in respect of the timing aspect and transition period that might be established in relation to the designation and classification of goods and services, following the decision in the IP Translator case.[4]  The Commission proposed a transition regime allowing trade mark holders to clarify during a very limited period their intentions when they filed a trade mark following a general and published practice by the office. As recognized by Mr Koenig, this solution is not without hooks. It implies a huge administrative exercise and might be prejudicial to third parties who did rely in one or another interpretation. However, the Commission still sees it as the fairest option. The two co-legislators have very different views, with the Council opposing it and the European Parliament requiring only slight changed to the Commission proposal.

Another pending matter relates to the possibility of opposing trade mark applications filed in bad faith. In particular, it is being debated the possibility of owners of trade marks registered outside Fortress Europe resorting to this relative ground of refusal. Mr Koenig explained that the introduction of this provision could also serve as a way to export a similar ruling to other jurisdictions. Once again, the European Parliament seems to support the Commission’s proposal, while the Council has rallied against it.

One reform that was not part of the Commission proposal, but that the European Parliament suggested was the introduction of a freedom of speech limitation in trade mark rights. The preliminary proposal maintained the possibility of referencing a trade mark for the purpose of identifying or referring to goods or services as those of the proprietor of that trade mark, but the European Parliament intends to go further by introducing a non-exhaustive list of accepted conducts, where parody and criticism would be included. The Council and the Commission seem rather hesitant. According to Mr Koening, these could result in legal uncertainty as, on the one hand, the understanding of parody could vary between Member States and, on the other hand, acts that are not in the course of trade, nor related to commercial activities should remain outside the scope of trade mark law.

Also under debate is the procedure for revocation or declaration of invalidity. The Commission proposed that along the right to go to court, Member States provide for an administrative procedure to challenge the validity of a trade mark registration before their offices. The Commission remains optimistic on the acceptance of this proposal even if a longer transition period might be needed.

The proposal on the reduction of fees is still open to discussion. Although there seems to be an agreement towards the reduction of the fees, it is unlikely that the commission proposal is fully accepted. There is however hope for a middle ground compromise.

Finally, some uncertainty remains in respect of the provisions relating to the governance of OHIM and the budgetary surpluses that have been accumulated by the agency. Under the Commission proposal, these should flow mainly into cooperation projects. However, the Council understands that the system as to be looked as a whole and the contribution of the Member States towards the system should not be ignored. As such, the Member States have defended that some of the money should flow back to their IP offices. Mr Koening noted that if the system is to be seen as a whole, not only the Member States, but also the CJEU should be compensated for its activity in the trade mark field. This is possibly the most intricate problem, which seems only likely to be solved in the last moment through a political compromise.

After some questions from the audience, the first part of the event came to an end. It was followed by a Round Table on 3d Printing and Intellectual Property Rights, which will be the topic of a future post.

 

@PedroMMalaquias (LL.M. in Intellectual Property Law at Queen Mary, University of London; Portuguese Qualified lawyer; Queen Mary Journal of Intellectual Property, Associate Editor)

[1] For a guide to the legislative procedure in the EU, see the Guide to Codecision and Conciliation, available at http://www.europarl.europa.eu/code/information/guide_en.pdf. See also http://www.europarl.europa.eu/aboutparliament/en/0081f4b3c7/Law-making-procedures-in-detail.html.

[2] Case C‑98/13 Blomqvist v Rolex SA [2014] ETMR 25.

[3] Case C-307/10 IP Translator ECLI:EU:C:2012:361.

[4] Case C-307/10 IP Translator ECLI:EU:C:2012:361.

The Italian Stability Budget Law approves the Patent Box: measures and benefits for the Fashion Industry.

by eleonoracurreri

 

 

The so called “Stability Budget Law 2015”[1], a bill that aims at boosting the economy of the country for the next three years, has introduced a “Patent Box”, in other words it is a preferential tax regime to promote the development of IP in Italy.

 

The new discounted tax regime is applicable to all those incomes that originate from the use or licensing of intangible IP assets (patents, trademarks, copyright, design). It is an irrevocable option that last five years and the amount excluded from taxation is 30% in 2015, 40% in 2016 and 50% by 2017. One of the most interesting aspects of the Patent Box is that it can be applied not only to Italian companies but also to foreign residents in countries that have a double taxation agreement with Italy.

 

The amount of income which is tax exempted is proportional to the costs necessary for R&D (research and development) activities performed by the taxpayer. When the assets are used within or in relation with a business the exempted income is calculated through a ruling system set by the Italian Revenue Agency. Furthermore the profits that derive from the sale of IP do not form the basis for taxes if the 90% of these incomes have been invested in similar IP activities of the same holder.

 

These provisions represent an innovative step for the Italian Legislation that for the first time focuses on IP by stressing its commercial and business value for the national economic growth. These measures promote not only innovation but also investments in Italy and in the creative industries. The Fashion Industry will enormously benefit from the Patent Box provision as it encourages creativity as well as business ventures.

Eleonora Curreri, QMJIP Assistant Editor
[1] The text of the Bill can be found here http://www.governo.it/GovernoInforma/documenti/legge_stabilita_2015/allegati/RELAZIONE_ILLUSTRATIVA.pdf

 

 

 

 

The EU Copyright Law Reform: Moving Towards Digitisation (Event Review)

by Pedro Malaquias

On 5 March, BITKOM, the Germany Federal Association for Information Technology, Telecommunications and New Media hosted a breakfast debate under the topic ‘The EU Copyright Law Reform: Moving Towards Digitisation’. This follows the release of the policy paper ‘The EU Copyright Law Reform – Moving Forward to Digitization’, which can be downloaded here.

The event kicked off with a welcome speech by Johannes Jung, Head of the Representation of the State of Baden-Württemberg to the European Union (where the event was hosted), who underlined the importance of copyright law for today’s society.

He was followed by Constantin Gissler, who emphasized the changes that ICT and media went through and explained BITKOM’s position on the reform of copyright. Referring to the death of Leonard Nimoy, who was known for his Star Trek role as Spock, the speaker noted that it took six years after the initial release of the series in the US for German viewers to go ‘where no man has gone before’, something unimaginable in today’s reality. At the same time, user generated content is now mainstream and competes with traditional media. Lower production costs and wider access to contents (the success of the South Korean rapper Psy was given as an example) provide new opportunities. Lastly, the threat of piracy is finally being curbed by new user friendly offers, such as streaming. These represent an increasing percentage of industry and authors profits, but also call into question the rationality of private copy levy systems as the consumption of these contents does not result in any private copies being made.

According to Mr Gissler, the referred to developments call for a new framework for copyright law that allows for the existing untapped creative potential to be unleashed. Not everything that is technically possible should be legal, but flexibility and legal certainty should be assured while artificial borders within the Single Market are taken down. Finally, the reform should not contribute to the expansion of problematic ideas, such as the ancillary copyright law for press publishers.

Afterwards, it was time for the debate, which had the participation of Julia Reda, Member of European Parliament (and one of the Vice-Chairs of the Greens/EFA group), Isabelle Buscke, Head of Brussels Office of the Federation of German Consumer Organisations, Cécile Despringre, Executive Director of the Society of Audiovisual Authors and Fabrizio Gentile, Managing Director Benelux of Deezer. The discussion was moderated by Markus Scheufele, Head of Copyright in Bitkom.

Mr Scheufele started by describing the ongoing developments of the European Copyright System. References were made to the upcoming European Parliament report on the implementation of the Infosoc Directive, the announcement by Andrus Ansip, the European Commission Vice-President for the Digital Single Market, that the new DSM Strategy will be ready in May and to the intention of Günther Oettinger, the EU Commissioner for Digital Economy and Society, to table a draft for the modernisation of EU copyright law by September 2015.

The participants were then asked questions on how to move copyright towards digitisation. First on the spotlight was Ms Reda, who was appointed by the Parliament as rapporteur of the report on the implementation of the Infosoc Directive and has recently presented her draft report. She started by noting that her draft report was met with widespread interest and has received statements of support, but also two different types of criticism: some said that it goes beyond the scope of the directive; others argued that too many things are still left untouched. Ms Reda noted that the copyright framework cannot be analysed without also analysing the technology developments that have occurred and the change in users’ behaviour. In a world where everyone can contribute, there is no longer a clear distinction between authors and consumers. The need for clear rules and legal certainty was stressed. People have not stopped spending money on cultural goods and services and, therefore, any reform should facilitate start-ups to offer pan-European services. A single copyright title could be the way forward, although the MEP noted that it is unlikely that the first step in the reform reaches so far.

Mr Scheufele then turned to Ms Buscke, asking her if the portability of contents was a real issue felt by European consumers or a problem that is limited to the expats in the Euro Bubble. As an opening comment, Ms Buscke shown her happiness to be in the same panel as Ms Reda, as she felt that she was accompanied by someone who defends consumers’ interests. As for the question, she agreed with the existence of a serious problem for all consumers, as their expectations of acquiring something and being able to benefit from it throughout the EU are not being met. Even if felt for a single week of vacations or a single day of travelling, such an issue should be non-existent in a Single Market. Even the use of the expression “cross-borders” should be phased out as, within a single market, there should be no borders.

The same question was addressed to Mr Gentile. The representative from the industry noted that this is a real issue both for consumers and industry. A country per country analysis is needed to offer a musical streaming service in the European Union, carrying high costs for SMEs. According to Deezer’s representative, the access to such a service should be no harder than carrying a physical book or disk across the EU.

The issue of portability and geoblocking was then addressed by Ms Despringre. As an initial remark, she noted that copyright is what protects authors and allows them to make a living of their works and, hence, to continue to produce. The audiovisual sector is a risky one as production budgets keep on increasing and there is no predictability on what can become a market success. As such, the question of access cannot be analysed without taking into account the economic system that allows for the authors’ remuneration. Authors are not an isolated part of this system and they need to collaborate with other parties. In an offer market driven, with a great number of cultural products, simple availability does not necessarily need to accessibility. The movie ‘Ida’, which has recently won the Oscar for Best Foreign Language Film, was given as an example. Although it was released in 2013 in Poland, only through the investment of several parties it became known in other countries. Geoblocking is simply a final part of the economic exploitation procedure. Portability still occurs, as commercial operators are free to offer it. Hence, this is not a simple copyright issue, but results instead from the decisions and business models of the economic operators that are part of the economic system.

Ms Reda’s opinion on geoblocking was diametrically different. She finds it to be prejudicial to the wealth of cultural diversity, which does not follow borders. Speakers of other languages can have access to contents through satellite receivers, but cannot have access to the same contents online. Instead of incentivising the offer of pan-European services, the InfoSoc Directive creates incentives to block access. The diversity of culture does not imply diversity of laws and to the erection of barriers. Finally, on a technical note, the transition from IPv4 to IPv5 will prevent geoblocking as it is commonly done nowadays and, unless serious data protection issues are to arise, operators should be incentivised to adapt their business models as soon as possible.

Questioned about the catalogue of rights, Mr Gentile explained the audience that, although it needs to be able to provide local repertoires, Deezer is a global company and, as such, it needs to obtain from the rightholders licences for the entire world. The country per country licence scheme is in his opinion a thing of the past, but some problems are still encountered. For instance, in Belgium, Deezer has so far not  been able to offer access to the lyrics of the songs as there is not a single entity that represents the writers of the lyrics. As such, this part of the service is not available in the country.

The next topic of discussion was limitations and exceptions. Asked to name three important changes that the reform could bring, Ms Buscke stated that much of what consumers need is explained is Ms Reda’s Draft Report. Making limitations and exceptions mandatory and harmonising them in a way that is not detrimental to the users are part of her wishlist. The extension of the exhaustion doctrine to digital goods and technological neutral laws were also supported.

The issues of private copying and levy systems were then discussed. Ms Despringre argued in favour of the viability of the levy system as more private copies occur today that at any previous time. To compensate these, levy systems remain the most relevant and economical system.

Ms Reda noted that levies are not the future and, in fact, they constitute a barrier to the single market, as it is not always easy to know when, where, how much and to whom they should be paid. The question of harm and the lack of any evidence-based approach to determine its appropriate compensation was further criticised. Although she finds unlikely on a short term basis to have levies abolished in the EU or a single levy system, a common system on how to establish levies should at least be established. This should be the result of an evident-based approach that determines the harm (if any) and its need for compensation and avoids the present situation where there are huge differences across Member States between the levies being charged and not so big differences in the harm that they try to compensate. Strange differences on levies, such as the different amounts to be paid in printers as a result of their speed of printing, should also be abolished. These simply lead to slower technological development or to the creation of artificial barriers between Member States. Furthermore, the transparency of the system (how much is collected? What happens with this money?) should be increased, strengthening the position of authors against rightholders.

Mr Gentile noted that the private copy issue is regularly enlaced with piracy and the drops in compensation resulting from this activity. By enhancing the offers to consumers, piracy immediately drops and authors obtain further compensation.

Ms Buscke criticised the lack of transparency of the copyright levies systems and the differences between levies in the Member States. She also noted that as a result of additional licensing (namely, for streaming services), the relevance of levies should be reduced.

To close the event, Mr Scheufele provided the speakers an opportunity for final statements. Ms Reda took the opportunity to claim the need for a harmonised and mandatory system of limitations and exceptions in the EU copyright law framework. Ms Despringre stated that limitations and exceptions do not benefit authors and that the diversity of the audiovisual sector in the EU was not a copyright issue, but instead depended on a multitude of media and different business models. Any reform should help authors to have their work travel better and overcome linguistic and cultural barriers, which are natural, not legal barriers. Ms Buscke, using TTIP language, stressed the need to remove the obstacles to trade in the EU, by making licensing easier, making limitations and exceptions mandatory and harmonising them in a way that is not detrimental to the users. Finally, and on a funny note, Mr Gentile concluded the event by inviting the audience to try Deezer.

 

@PedroMMalaquias (LL.M. in Intellectual Property Law at Queen Mary, University of London; Portuguese Qualified lawyer; Queen Mary Journal of Intellectual Property, Associate Editor)

Yet another implication of digital copying – conflict of laws with respect to jurisdiction and copyright infringement

by aytrapova

Ms Hejduk is a professional photographer of architecture and she is domiciled in Austria. She is also the creator of the photographic works depicting buildings by a famous Austrian architect – Georg W. Reinberg. At a conference in 2004, organised by EnergieAgentur, the architect used some of Ms Hejduk’s photographs illustrating his buildings. This use was authorised by the photographer. However, at a later stage EnergieAgentur, without Ms Heijduk’s consent, made these photographs available for viewing and downloading through their website.

Ms Heijduk brought an action against EnergieAgentur in the Austrian courts for copyright infringement. The defendant, being a German company, argued that the Austrian court does not have jurisdiction over the issue due to the fact that the website was targeted at the German audience by using the .de domain extension. The case was referred to the CJEU.

 

Legal context

The Brussels I Regulation deals with issues of jurisdiction under European Law – this instrument essentially addresses the question of whether a defendant can be sued in the courts that the matter is brought to. Article 2(1) of the Regulation establishes the general jurisdiction rule whereby a person will be sued in the court of a Member State if he is domiciled in that Member State. According to this, the court with jurisdiction would have been the German court. Nevertheless, there are special jurisdiction rules with respect to particular circumstances such as a dispute over a contract, tort, consumer or other categories of law.

The current situation falls under the special category of tort law – article 5(3). According to this a person may be sued in the courts of a Member State where the damage occurred or in the courts of the Member State where the event giving rise to the damage took place. The decision is up to the claimant’s discretion. Simply put – Ms Heijduk can sue in the courts where EnergieAgentur did the wrong or where she felt the harmful effect of their action.

It must be noted that the dispute is not one of contract law because of the ratio in Kalfelis v Schroeder – if there is a contractual relationship between the two parties or the claim arises out of an agreement, then one is bound to bring the case under contract law. Here, there is no contractual relationship between the two parties and therefore the issue is brought under tort – article 5(3).

The decision

The CJEU held that the accessibility of a website within Austria was sufficient to grant the Austrian court jurisdiction over the issue on the basis of the place where the damage occurred. The Austrian court however has jurisdiction only over the damage that has been caused in Austria, i.e. the harmful effect that Ms. Heijduk felt in Austria.

In reaching this conclusion the CJEU set out the rule under article 5(3) and in turn examined what will be the place of the event giving rise to the damage and the place where the damage occurred.

The place of the event giving rise to the damage

With regards to the first category the court noted that ‘the activation of the process of the technical display of the photographs on that website must be regarded as the causal event’. In the present case this activation happened where EnergieAgentur has established its company seat ‘since that is where the company took and carried out the decision to place photographs online on a particular website’. Therefore, by virtue of this the Austrian court did not have jurisdiction because the company’s seat is in Germany.

The place where the damage occurred

Due to the fact that the website was accessible in Austria, the CJEU held that Austria was the place where the damage occurred and the Austrian court may have jurisdiction over the issue. The defendant tried to argue that the website was not targeted at the Austrian audience (.de), but it must be emphasised that in contrast to the consumer law provisions listed under article 15 of the Brussels I Regulation, there is no requirement of targeting a jurisdiction under the torts rules. As a result, ‘it is irrelevant that the website at issue in the main proceedings is not directed at the Member State in which the court seised is situated’.

However, it must be noted that following Pinckney and eDate Advertising the Austrian court will have jurisdiction to rule only over the damages that occurred in Austria.

 

Comment

The consequence of this ruling is that due to the fact that most websites (regardless of their domain name extension) will be accessible in most European jurisdictions, there will be significant rise in situations where the claimants in similar circumstances will sue in their home jurisdiction with respect to an act done by a defendant in another Member state.

As a result of this, one immediate question comes to mind – putting yourselves in the shoes of EnegieAgentur, is geo-blocking the solution preventing the litigation?

 

The case in full can be found here.

 

Alina Trapova
Assistant Editor, QMJIP

EIFL: Knowledge Without Boundaries

by Iris Yingnan Hu

Digital technology has revolutionised education and created new opportunities to share information, to communicate and to learn.

However, billions of people around the world are still unable to reap the benefits due to factors such as the high subscription costs of electronic scholarly content and legal barriers to accessing, using and sharing information, or because they do not have access to technology.

Electronic Information for Libraries (EIFL), founded in 1999, is a non-profit organization aiming to help people in developing and transition countries to access information for education, learning, research and sustainable community development.   

To improve access to knowledge, EIFL partners with libraries and library consortia. There are some statistics to demonstrate EIFL’s  reach in developing and transition countries: over the last 14 years, library consortia in 49 countries in Africa, Asia Pacific and Europe, representing more than 3,000 libraries, have joined the EIFL network. In 2013, EIFL reached more than 14,000,000 people.

In addition to cooperation with libraries, EIFL also runs four programmes to enable access to knowledge for education, learning, research and sustainable community development. The programmes cover Licensing, Copyright and Libraries, Open Access, and Public Library Innovation.

Licensing Programme

The high cost of e-resources is a major barrier to access for libraries in developing and transition countries. Thus, important contributions to research, education and development are slowed down.

The Licensing Programme (EIFL-Licensing) negotiates affordable access to e-resources and ensures widespread adoption and usage of licensed e-resources.

Through central negotiation with publishers, over 50 high-quality commercial e-resources from more than 20 vendors are available through the EIFL Licensing Programme. EIFL works with high-quality academic publishers e.g. Oxford University Press, Edward Elgar Publishing, JSTOR etc. who are dedicated to helping libraries in developing countries access academic e-resources for free or at an affordable price.

Research shows that often researchers, students and academics are not aware that their libraries have access to high-quality e-resources. To support libraries in maximizing access to e-resources, the EIFL Licensing Programme works closely with partner library consortia to raise awareness and increase participation and usage of e-resources. As a result, there were more than 3.7 million full-text downloads from EIFL-licensed resources.

Copyright and Libraries Programme

Copyright matters to libraries. It affects issues that are central to library activities and services, such as the availability and price of books, the right to purchase books from abroad, the right to lend books and other materials.

The Copyright and Libraries  (EIFL-IP) programme devotes itself to proposing global copyright rules to benefit libraries and to campaigning for national copyright law reform. In addition, the programme builds capacity among librarians in EIFL partner countries by providing resources and training in copyright issues. The capacity building programme aims empower librarians to become advocates for access to knowledge for all.

In 2013, 14,700 librarians, students and faculty members across the EIFL network were trained in copyright by EIFL partner consortia.

Open Access Programme

“At our faculty researchers publish a number of publications. But we do not have access to them. Sometimes it is even hard to find out that they actually exist. ” –  Ewa Majdecka, student at Warsaw University

Open access (OA) is the immediate, online, free and unrestricted availability of peer-reviewed research literature. It is a powerful new model that is increasing opportunities for researchers in developing and transition countries to contribute to the global research community.

The Open Access Programme (EIFL-OA)  EIFL advocates for the adoption of open access policies and mandates, to ensure that research is made freely available for all.

To help spread awareness, the programme organizes national and institutional OA awareness raising and advocacy campaigns. EIFL also plays a leading role advocating for OA internationally.

Public Library Innovation Programme

“We realized that there is a lot of information packaged, but still in the air.” –  Sylvester Mapoze, Library director in Uganda

The Internet has transformed how we seek and share information, yet billions of people living in developing and transition economy countries still do not have access to the internet. Public libraries – trusted institutions, staffed by skilled information professionals – are uniquely placed to overcome this challenge by providing public access to information and communication technology (ICT) and training people to use it.

The Public Library Innovation Programme (EIFL-PLIP) aims to change perceptions of public libraries and  support public libraries to use information and communication technology (ICT) in services that benefit communities. In addition, EIFL rewards libraries that are offering innovative services.

Improving access to knowledge

There are more than 230,000 public libraries in developing countries. They are uniquely positioned to change lives and build strong communities; but this opportunity remains untapped, because in developing and transition economy countries public libraries are still mostly viewed as quiet spaces for books and study, and are not equipped with technology and the computers and the internet. The programme helps address this challenge through advocacy to change perceptions of public libraries.

EIFL-PLIP helps to build the capacity of librarians so that they can introduce technology, manage new services, build non-traditional partnerships and engage with communities in new and different ways.

EIFL benefits people in developing and transition countries who are struggling to study, work and progress in life because they lack access to knowledge and information. EIFL believes access knowledge and information is fundamental to sustainable development – and that lack of knowledge and information means millions of people are left behind.

EIFL also raises awareness about controversial issues such as copyright for libraries and open access. In the era of Internet, information is easy to obtain, there are still many people who do not have access to it. What EIFL does is help to make the process of accessing information much faster and easier.

To learn more about EIFL visit http://www.eifl.net.

Iris Yingnan Hu

Assistant Editor, QMJIP