GDPR Article 40: Code of Conduct for Cloud Providers Being Finalized by C-ISG

Data protection cloud While over the last several months, many have expressed concern about cloud service providers’ (“CSPs”) ability to comply with the General Data Protection Regulation (“GDPR”), at the end of November some clarity was provided.  On November 30, 2016, the Cloud Select Industry Group (“C-ISG”) agreed on a Code of Conduct on Data Protection for CSPs (“CoC” or “code”) – to be published in the coming weeks (latest draft is available here) – which focuses on improving the transparency of CSPs and building consumer trust. The code, which outlines certain security measures for IT systems, data centers and cloud infrastructure that would meet GDPR security obligations, provides clarity for CSPs on what is expected under the GDPR. Continue Reading

Patents – a novel and inventive approach to Brexit?

The announcement on Monday afternoon by the UK Government that it intended to proceed with the ratification of the Unified Patent Court Agreement (UPCA) took almost all commentators by complete surprise.  It was commonly believed that Brexit would either completely destroy, or at least significantly delay, the introduction of the Unitary Patent and the Unified Patent Court. After all, the UK was going to leave the EU and it seemed nonsensical that it would continue to play an active role in supporting treaties that would have a profound effect on the EU just at the time that it was planning to leave the party. 

However, 2016 is the year in which if something appears to be impossible, then it is frankly an odds-on certainty. 

Continue Reading

USPTO’s Public Roundtables on Patent Subject Matter Eligibility Off to Promising Start

US Patent and Trademark Office in Alexandria, VA.

Following the recent Federal Circuit decisions in BASCOM and McRO, the United States Patent and Trademark Office (“USPTO”) responded by providing all stakeholders with a helpful memorandum discussing these cases and how they affect patent subject matter eligibility. In addition, the USPTO continues its outreach efforts to identify where gaps exist in its guidance, and to incorporate public feedback into subsequent guidance.

On Monday, November 14, the USPTO hosted the first of two roundtable discussions on patent subject matter eligibility. USPTO Director Michelle Lee welcomed the roundtable with opening remarks, and continued with an overview of recent USPTO initiatives regarding its response to this fast-moving topic in patent law. Director Lee noted that part of the Enhanced Patent Quality Initiative has included conducting several case studies to understand the effectiveness and remaining challenges of applying the 2014 U.S. Supreme Court’s Alice decision. Specifically, the USPTO is reviewing the clarity of 35 U.S.C. §101 rejections in Office Actions, the consistency of how section 101 is applied across art units, and the adherence to best practices for compact prosecution when a section 101 rejection applies. Director Lee noted that these case studies should conclude within the next few months, and their findings will be incorporated into future section 101 guidance to assist both the public and examining corps in understanding its proper application. Director Lee also reiterated that the USPTO is continuing to solicit public comments on how the USPTO can further improve its examples and guidance that accompany examiner training, and welcomed any feedback in addition to the comments provided during the roundtable. Director Lee then turned the discussion over to Robert Bahr, Deputy Commissioner for Patent Examination Policy, who presented the remaining speakers.

The roundtable brought together a wide variety of industry representatives and IP practitioners having an interest in the future of section 101 development, and several topics arose throughout the discussion. One of the most frequent topics was the difficulties practitioners have experienced when understanding and responding to a section 101 rejection. In addition to frustration with boilerplate language, many practitioners expressed concern with rejections either failing to provide a meaningful analysis, or avoiding the section 101 rejection altogether despite an expectation for section 101 to be an issue. Several speakers debated the differences where examiners utilized general principles when determining subject matter eligibility versus where examiners drew analogies to court decisions considering subject matter eligibility. As a last resort, appeals are being used with increasing frequency where questions of subject matter eligibility remain unresolved, and there were concerns expressed by some that the Patent Trial and Appeal Board was becoming a very expensive venue for making this determination.

However, several ideas were presented on how to respond to these challenges, including strictly enforcing the requirement for examiners to provide clear and complete reasoning in their analysis, and ensuring that examiners are issuing the rejections, rather than supervisors or quality assurance specialists. A rejection that establishes a prima facie case on the record would not only comply with MPEP section 2106, it would also assist the practitioner in overcoming a finding of ineligibility. Speakers also requested that the USPTO publish additional example-based guidance in view of the recent BASCOM and McRO decisions, and commended the USPTO on advising examiners away from using non-precedential decisions in their analysis, such as SmartGene and Cyberfone.

In addition to the quality of the rejections, discussions also arose about the quantity of rejections when viewed across technology centers and art units. The ABA presented data revealing inconsistencies across TCs and AUs, while other speakers suggested that an application’s chances of being allowed were too closely tied to its assigned art unit. To illustrate this point, speakers reported instances of applicants abandoning an application upon receiving a first Office Action because it included a section 101 rejection, and asked the USPTO to release additional data on this trend.

In addition to the application of section 101 itself, many of the speakers sought to remind the audience and USPTO of the very real impact section 101 has on both applicants and the US economy. Beyond providing legal certainty on the bounds of eligible subject matter, more clarity in this area would encourage, rather than stifle, innovation, prevent jobs from moving overseas, and prevent section 101 from acting as a barrier to domestic innovators when competing internationally. This could be accomplished by encouraging the future Trump administration to keep clarity of subject matter eligibility as a priority at the USPTO.

The USPTO will host its second section 101 roundtable discussion on Monday, December 5, 2016, which will focus on broad questions regarding the boundaries of eligible subject matter in patent law.

ALJ Lord Dismisses Antitrust-Based Claims In Carbon And Alloy Steel Products Investigation

In May, the ITC instituted its investigation of Certain Carbon and Alloy Steel Products, Inv. No. 337-TA-1002, based on alleged violations of Section 337 by the Chinese steel industry, including antitrust, false designation of origin, and trade secret claims.  On November 14, however, the presiding administrative law judge (ALJ Lord) granted respondents’ motion to dismiss the antitrust claims for failing to state a claim on which relief could be granted under the statute.

Antitrust-based claims under Section 337 are grounded in Section 337(a)(1)(A), which prohibits “unfair methods of competition and unfair acts in the importation of articles . . . the threat or effect of which is,” inter alia, “to restrain or monopolize trade and commerce in the United States.”  35 U.S.C. § 1337(a)(1)(A)(iii).  Relying on the Federal Circuit’s decision in the trade secret-based Section 337 case of Tianrui Group, Inc. v. ITC, 661 F.3d 1322 (Fed. Cir. 2011), ALJ Lord stated that the applicable law under Section 337(a)(1)(A) is federal, namely “the substantive law that governs federal antitrust cases.”  The ALJ held that federal law requires antitrust standing and that, under Section 1 of the Sherman Act, a price-fixing scheme, even if proved, must result in predatory pricing for there to be cognizable injury from that unlawful act.  The ALJ rejected arguments that the ITC in prior investigations had “looked to interpretations of Section 5 of the Federal Trade Commission Act,” holding that “30-odd years ago” precedent inapplicable because “section 337 as it exists today is an altogether different kind of statute than the FTC Act.”  Among other things, the ALJ noted that there is no private right of action for violation of the FTC Act; whereas, according to the ALJ’s reading of Young Engineers, Inc. v. ITC, 721 F.2d 1305, 1315 (Fed. Cir. 1983), Section 337 investigations are more akin to “disputes between private parties.”  In that “adversarial setting, the standing requirement that applies in federal antitrust suits ensures that private actions are grounded in harm flowing from anticompetitive practices and do not simply strike at a competitor for the act of competing.  Requiring antitrust injury under section 337(a)(l)(A)(iii) therefore is consistent not only with applicable law but with federal antitrust policy.”

The ALJ’s determination is reviewable by the ITC upon petition by the parties or on the Commission’s own motion.  By rule, unless reviewed, the determination becomes the determination of the ITC after 30 days.

Weekly Data Privacy Alert – 14 November 2016

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Protection & Cybersecurity team. This week’s alert covers news from the UK, Germany, France and the US.

UK

  • Investigatory Powers Bill One Step Closer to Royal Assent
  • Gambling Websites Warned About Using Personal Data

Germany

  • Data Protection Authorities Examine Data Transfers

France

  • France issues new clinical trial and medical research norms

US

Russian Court Upholds LinkedIn Block

Annette Demmel (Germany)

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

Court ruling opens the way for brand owners to prosecute infringers

In a recent ruling, the UK Court of Appeal confirmed that anyone in possession of or selling ‘grey goods’ is liable to prosecution under the criminal provisions of the Trade Marks Act 1994 (“TMA”). The ruling is good news for brand owners, giving them another means of preventing the unauthorised sale of goods bearing their trade mark.

The Law

S92(1) TMA provides:

(1) A person commits an offence who with a view to gain for himself or another, or with intent to cause loss to another, and without the consent of the proprietor

(a) applies to goods or their packaging a sign identical to, or likely to be mistaken for, a registered trade mark, or

(b) sells or lets for hire, offers or exposes for sale or hire or distributes goods which bear, or the packaging of which bears, such a sign, or

(c) has in his possession, custody or control in the course of a business any such goods with a view to the doing of anything, by himself or another, which would be an offence under paragraph (b).

Counterfeit Goods and Grey Goods – The Difference

In this case, the defendants were alleged to be importing into the UK:

  • counterfeit goods – that is, goods bearing a well-known trade mark/brand but which are fakes in the sense that they have not been manufactured by the trade mark owner itself or by factories authorised to do so by the trade mark owner; and
  • ‘grey goods’ – these are goods bearing a well-known trade mark which have been manufactured by factories authorised by the brand owner to do so but which are subsequently sold without the brand owner’s consent. Typically, this could include:
    • goods manufactured for first sale outside the EU which find their way into the EU;
    • goods which have been part of an order placed with an authorised manufacturer by the trade mark owner but then cancelled;
    • goods part of a batch whose manufacture has been authorised by the trade mark owner but which, after manufacture, are rejected as not being of sufficient standard;
    • goods manufactured to the trade mark owner’s order but in excess of the required amount (‘overruns’);
    • goods made by an authorised manufacturer which goes into liquidation and are then dealt with by a liquidator; or
    • goods made by an authorised manufacturer, which the brand owner is then unwilling or unable to pay for.

It was alleged that the goods were being imported into the UK from outside the EU. At no time had the goods been put on the market in either an EU or non-EU country with the trade mark owner’s consent.

The Question Before the Court

The question before the Court was – is it a criminal offence under s92(1)(b) or (c) TMA if, with a view to gain or cause loss, a person sells or possesses grey goods? In other words, does s92 only apply to counterfeit goods or to grey goods too?

The Court of Appeal held that the criminal provisions in s92 covered both counterfeit and grey goods.  In other words, selling or possessing counterfeit goods or grey goods with a view to gain or cause loss could be a criminal offence under s92 TMA.

Importance for Brand Owners

This is an important decision for brand owners. Although they have always been able to bring civil trade mark infringement proceedings in relation to grey goods, this ruling gives them another weapon to prohibit the unauthorised sale of grey goods bearing their trade mark.  Anyone who imports counterfeit or grey goods with a view to selling them in the UK will be committing a criminal offence, provided that the defendant does not have a defence under s92(5) TMA  – in essence a reasonable belief that the goods were not infringing.  Further, no offence will be committed in relation to grey goods imported from another EU country, which were first put on the market in that EU country with the trade mark owner’s consent as such a first EU sale will ‘exhaust’ the trade mark owner’s rights – both civil and criminal.

Trading Standards initiate most criminal prosecutions under s92 TMA. It is however often rather difficult (and sometimes outright impossible) for brand owners, particularly those active outside the EU, to get Trading Standards interested in pursuing importers into the EU of grey goods (and traders in them) under the criminal trade mark provisions.  Grey goods are perceived as causing less damage to the consumer as there is no misrepresentation as to the ultimate manufacturing trade source and often there are complex contractual issues relating to sales contracts between non-EU based third parties, which Trading Standards are reluctant to investigate.  It has always been open to brand owners to pursue a private criminal prosecution under s92 of the TMA 1994. This decision clears the way for brand owners to use such private criminal prosecutions against those who unlawfully import grey goods into the UK.

Our team has real expertise in private criminal prosecutions involving the unauthorised use of IP rights. For advice on including criminal prosecutions in your trade mark enforcement strategy, please feel free to call Andrew Clay or Florian Traub.

 

New Comprehensive Chinese Cyber Security Law Approved

Cyber security

This week, the Standing Committee of the National People’s Congress approved the new Cyber Security Law. The law, which contains 79 articles under eight chapters, is set to take effect in June 2017 and has wide-ranging implications for how companies in China handle personal data and cybersecurity issues. The law applies broadly to entities or individuals that construct, operate, maintain, and use networks within China, as well as those who are responsible for supervising and managing network security.

Read about the far-reaching effects compliance may have on any company that has operations or customers in China.

Weekly Data Privacy Alert – 7 November 2016

Please click here to read the latest data privacy alert from the Squire Patton Boggs Data Protection & Cybersecurity team.

This week’s alert covers news from  the EU, UK, Germany and France.

EU

  • EU Data Protection Supervisor (EDPS): More Needs to Be Done to Allow Individuals to Take Back Their Online Identity

UK

  • Nuisance Callers Face Increased Fines
  • Elizabeth Denham Welcomes UK Government Confirmation That It Will Implement the GDPR

Germany

  • Voßhoff Welcomes Federal Administrative Court Ruling on Freedom of Information

France

  • EU-US Privacy Shield
  • New Rules on Biometric Access Control in the Workplace

Annette Demmel (Germany)

Caroline Egan (Birmingham)

Francesca Fellowes (Leeds)

Stephanie Faber (Paris)

High Court rejects the UK Government’s use of prerogative powers to trigger Brexit

On November 3, 2016, the High Court handed down its much anticipated ruling in Santos and Miller v. the Secretary of State for Exiting the European Union. The Court rejected the UK Government’s contention that it has the power under the Crown’s prerogative to give notice pursuant to Article 50 of the Treaty on European Union for the UK to withdraw from the EU, holding instead that Parliament must give prior approval to the triggering of the withdrawal process. The High Court agreed with the claimants that the European Communities Act 1972 (ECA), which gave effect to EU law in the UK, gives UK citizens certain rights which will be lost once Article 50 is triggered.  The Court reiterated that in the UK Parliament is sovereign and that meant that the Government could not override the rights given by the ECA by use of its prerogative powers.  Only Parliament could take away what Parliament had given.

The UK Government has announced it will appeal the decision to the Supreme Court.  The appeal before the Supreme Court is due to begin on 5 December, with judgment expected in early January.

This ruling could have a substantial, long-term impact on the Brexit timetable.  If the Supreme Court upholds the High Court’s decision, then it may well be up to Parliament whether Brexit actually happens or not or, at the very least, when it happens.

What does this mean for implementation of the General Data Protection Regulation (GDPR) in the UK? The GDPR comes into force proper in May 2018.  The Information Commissioner’s Office (“ICO”) and the Secretary of State for Culture, Media and Sport has recently confirmed that the UK will implement the GDPR whatever happens on Brexit.  This means that organizations should continue to prepare for the coming of the GDPR. The ICO is expected to publish guidance on GDPR requirements throughout the coming months.

 

‘Fair dealing’ in a digital world

Our appetite for data has, arguably, never been greater. The advent of mobile technology has only fuelled that appetite by allowing us to consume increasing amounts of data on the move on our smartphones and tablets.  For many of us, our smartphone is our primary source of data.  A recent survey found that 82% of smartphone owners check them within one hour of waking up, and that smartphones are the primary source of news for 42% of users aged between 25 and 34 (see the PwC / Internet Advertising Bureau UK Digital Adspend Report 2016).

Because of the ease with which we can stream data to our mobile devices, we are increasingly demanding ‘data experiences’. For example, it is not enough for us to just read about some breaking news.  We also want a visual experience.   We want to see it happening.

It is perhaps not surprising then that news content providers (such as newspaper publishers and other media organisations) are adapting how they deliver content to us to keep pace with the smartphone revolution.   In many cases, they can no longer just provide a written feature on a newsworthy item.  It must also be supported by visual content.

To satisfy this need, news content providers are, increasingly, including ‘clips’ with their online offering. A ‘clip’ is a twenty second or so extract from television, film or online footage which exemplifies the content of a written feature.  It shows the very moment that the goal was scored, the hurricane struck or the politician made (yet another) gaffe.  These clips are usually taken from third party footage.  So the provider might take a clip from BBC news footage, for example.  The BBC owns the copyright in its footage and so, absent a legal justification, taking and using the clip (without the BBC’s express permission) would be copyright infringement.  However, the clip could be used if the provider can rely on an ‘exception’ to copyright.  One such exception is ‘fair dealing’.

Fair dealing is, in essence, a defence to copyright infringement. It allows you to copy part of a (usually already published) third party copyright work without having to get the copyright owner’s prior permission.  For example, it would allow you to copy a short passage from a book, to reproduce a photograph or other image, or to use clips from television, film or online footage.  You are not required to make any payment to the copyright owner in return for use of their material.  You do not need to let the copyright owner know what you are doing and you can go ahead even if the copyright owner is aware of what you are doing and objects.  It is irrelevant whether you are acting in a commercial or non-commercial context.

The fair dealing defence is set out in Chapter III of the Copyright Designs and Patents Act 1988 (CDPA).   There are a number of specific fair dealing exceptions covering, for example, libraries and educational settings.  However, some aspects of the fair dealing defence are of wider application.  For example:

  • the defence of ‘fair dealing for the purpose of reporting current events’ is a particularly useful defence for media organisations. It allows an extract from a copyright work (other than a photograph) to be used to report an event contemporaneously, or to report an event which may have happened some time ago, but which remains genuinely newsworthy. For example, you could use a clip from TV footage to report contemporaneously a terrorist incident;
  • the defence of ‘fair dealing for the purposes of criticism or review’ allows an extract from a copyright work to be used in order to critique or review the extract itself, or another copyright work. For example, you might want to use a clip from a film in order to comment on the level of violence included in the movie as a whole;
  • the defence of ‘fair dealing for the purposes of quotation’ not only allows extracts from copyright works to be used to provide a ‘quote’ in the traditional sense of the word, but also to reference something that has already happened. For example, clips from various movies could be shown to illustrate the fact that a particular actor favours comedy roles;
  • the defence of ‘fair dealing for the purposes of caricature, parody or pastiche’ allows you to take an extract from a copyright work and build on it to create a separate ‘mashed-up’ work, usually for humorous effect. As the UK Intellectual Property Office explains in its guidance Exceptions to copyright – Guidance for Creators and Copyright Owners: “a comedian may use a few lines from a film or song for a parody sketch, a cartoonist may reference a well-known artwork or illustration for a caricature or an artist may use small fragments from a range of films to compose a larger pastiche artwork”.

In all cases, use of the copyright work must be ‘fair dealing’. This is a matter of fact, degree and impression in each case but the question to be asked is: how would a fair-minded and honest person have dealt with the work?  If your use would commercially compete with the exploitation of the original copyright work, or if you have copied an unnecessarily large chunk of the original copyright work, then your use is unlikely to be fair dealing.  In addition, in most cases, your use of the work must be accompanied by a ‘sufficient acknowledgment’, identifying the name of the original copyright work and its author unless this would be “impossible for reasons of practicality or otherwise”.

If you want to rely on the fair dealing defence it is important to ensure that you satisfy all of the applicable conditions. Otherwise, you will fall outside the scope of the defence and your use of the work could amount to copyright infringement.  The copyright owner would be entitled to an injunction to stop you using the work again and to damages to reflect the loss it has suffered, or the profits you have made, from your use of the work.

So, who could benefit from the fair dealing defence? Well, potentially anyone who has a legitimate reason for taking and using part of a copyright work, provided what they are doing fulfils the fair dealing criteria.  How useful the fair dealing defence is may have been somewhat overlooked in the past.  However, it may prove to be a lifeline for those organisations with business models that increasingly depend on satisfying audience demand for immediate ‘experience’ data.

For more information on the fair dealing defence, or copyright issues more generally, please feel free to call Carl Rohsler.

 

 

LexBlog