Monday 31 March 2014

AfroTwiga

Software Patents on Trial - will the USSC finally provide clarity? Part 2

The United States Supreme Court (USSC) is today hearing oral arguments in Alice Corp v. CLS Bank, with a decision expected in the summer. In a previous post (here), a bit of background is given to stress the importance of this case to software patents and to the ICT industry generally.

African/European readers may be asking, who cares what the USSC says about software patents (other than people/companies/courts in the US)?

By far, the US has the most relaxed attitude toward software patents, and the US patent office grants more software patents than any other office. If the US suddenly reverses course and severely curtails the scope of allowable subject matter in software-based inventions (and potentially invalidates many existing software patents), courts and patent offices around the world will take note. Some countries (e.g., New Zealand) may use the decision to strengthen their efforts to eliminate such patents altogether.

The US Federal Circuit has made a mess of patent-eligibility of software patents (see Patently-O here), and the Europeans have done little better (see the excellent IPKat post here). Readers are invited to comment on other countries (Japan, anyone?), but it seems safe to say that patent laws were not devised with software in mind, and the courts just haven’t yet figured out what to do about that. Courts, legislators, companies, and others around the world are surely hoping for some clarity on the matter, and there is no better place to start than the highest court in the land where software patents have been traditionally welcomed.

Clarity from the USSC would bring a new perspective into the debate about the benefits of software patents in African countries.
When it comes to uncertainty,
Heisenberg said it best


In Kenya, perhaps surprisingly, a change in the patent law in 2001 opened the door for a very liberal interpretation of patent-eligibility of software. Pre-2001, the Kenyan patent law (like most countries) specifically excluded software. The new patent act of 2001 lacked this exclusion, but notably maintained other patentability exclusions. The only rational conclusion is that software is not excluded from patentability.

Indeed, the Kenyan Industrial Property Institute (KIPI, the Kenyan patent authority) has been issuing software patents.  See, for example, KE000608 (claiming “A security server arranged to set up communication between a merchant device and a customer payment application”) or KE000441 (from Nokia, claiming “A method of providing user plane traffic during a state of inactive user plane of a connection to an access network”).

ARIPO has also been issuing software patents. See, for example, AP2682 (directed to “a system for facilitating the initiation and/or conclusion of an insurance contract”) or AP2668 (from Nokia and directed to “a new method, system, apparatus and software product for dynamic gating of an uplink (UL) control channel”).

Hoping for Draconian?
So what happens if the USSC decides that the Alice Corp. software-based patent claims are not patentable? Litigation involving software-based patents is rare in Africa (do readers know of any?), but it’s not hard to imagine a Kenyan court relying on the USSC to hold similar patents unenforceable.


On the other hand, patent attorneys tend to fashion themselves as cleverer than the courts, or perhaps they are simply desperate dedicated to find solutions for their clients.  Whatever the case, it seems unthinkable that the USSC will be able or willing to go so far as to completely eliminate all avenues for protecting software based inventions. It was earlier court decisions that caused patent drafters to use such absurd creative wording as “a computer readable storage medium.” Most likely, and unless we receive a truly draconian holding in CLS Bank, patent drafters will continue to write software patents with wordings that are carefully tailored to be compliant with this and other USSC decisions.  
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AfroTwiga

Software Patents on Trial - will the USSC finally provide clarity? Part 1...

Today (31 March), the United States Supreme Court (USSC) is scheduled to hear oral arguments in Alice Corp v. CLS Bank. This case follows on the heals of Mayo v. Prometheus Laboratories from 2012 and Association for Molecular Genetics v. Myriad Genetics from 2013, and indicates a strong desire by the USSC of clarifying that tricky issue of patentable subject matter.

In Prometheus, the Court held that patent claims directed to a method of optimizing therapeutic efficacy of a drug comprising administering the drug to a patient and measuring a level of metabolite of the drug are invalid as not patentable subject matter. In Myriad, the Court held that patent claims directed to a method for screening patients based on the presence of mutated DNA, and patent claims directed to isolated genes, are invalid as not patentable subject matter.

Now, in CLS Bank, the Court is being asked to review a lower court’s holding that patent claims directed to computer implemented methods (often called “software patents”) are not patent-eligible. Remarkably, this is the first USSC case on the viability of software patents in over 40 years. In that time, not many would disagree that the lower US courts have made a fine mess of the issue. The Federal Circuit decision that led to the USSC granting certiorari in CLS Bank involved a panel of 10 judges and resulted in seven different opinions. It is safe to say that the Federal Circuit cannot agree a single standard for analyzing patent-eligibility with respect to software-based inventions.
 
Some people already know
what to do with Software Patents
This uncertainty is a serious problem due to the importance of software patents. More than 40,000 software patents are now issued in the US every year. The vast majority of cases brought by “patent assertion entities” (i.e., “trolls” or “non-practicing entities”) involve software patents. Most countries around the world allow software patents in one form or another (even despite attempts to eliminate them – see here on the debate generated by New Zealand).

The statistics about the CLS Bank case specifically are also astounding. Alice Corp. holds the patent at issue, and CLS Bank (allegedly) uses the patented methods to make settlements of over $1 trillion every day! Perhaps more importantly, though, the patent at issue has claims that are not remarkable. If they are held to be ineligible for patent protection, the validity of thousands of issued patents will become quite uncertain.

Clearly, then, the stakes couldn’t be higher. Roughly 40 amicus briefs were filed, from parties in favor of maintaining software patents (e.g., IBM, which not-so-coincidentally also happens to be the company perennially obtaining the most US patents) to parties opposed to software patents (e.g., Google as well as the US Government).
 
Hallowed halls -
but can they save us from uncertainty?

The USSC decision is due to be released in June/July. Much has been said on this case (see, e.g., Patently-O here) and much speculation will follow the oral arguments. This blogger merely hopes that, whatever the decision, the holding is clear and definitive.
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IPcommentator

EU-Africa Summit 2014: IP is also relevant

African Union
European Union
One would be forgiven to think that the G87 summit is the hottest annual ticket in town; well, this Leo thinks that the EU-Africa summit 2014 could give them a run for their money. The fourth EU-Africa summit is scheduled to take place in Brussels, Belgium, from 2nd to 3rd April 2014. The theme is: "Investing in People, Prosperity and Peace." 

The programme states that it will  "illustrate how EU-Africa relations have evolved over the past years, will highlight the results achieved by the Continental Partnership and will frame cooperation for the years to come." But, will someone throw a spanner in the works? Maybe. According to news report, the African Union (or some might say, Zimbabwe) is threatening to boycott the summit because of the existing European travel ban on Zimbabwe's first lady. This apolitical Leo will leave this complicated matter at that; to learn more, click here.

Any IP-related discussions?
Yes, intellectual property is, and has always been, part of discussions (e.g. see here and here) between the EU and Africa in various capacities. In fact, paragraph 40 of the Joint Africa-EU Strategy document enshrines IP as one of the areas they would work on. "EU-Africa or Africa-EU, which way folk?" says Afro Leo. Supposing the Heads of State do not actually discuss IP at the summit, would someone else take up this responsibility? Yes, at events like these, there is always time and space for private sector business leaders to chat amongst themselves on various issues affecting commerce. Happening today and tomorrow is the 5th EU-Africa Business Forum (AEBF). The AEBF includes a roundtable discussion on health and pharmaceuticals which will inevitably touch on the access to medicines and patent debate.

The speakers/participants are:
Chair: Greg Perry, Executive Director Medicines Patent Pool 
Co-Chair:  Dr. François Bompart, Vice-President of European Federation of Pharmaceutical Industries and Associations (EFPIA) 
Co-Chair: Mazi Sam Ohuabunwa, President of Neimeth International Pharmaceutical Plc, Nigeria
Co-Chair: Nick Haggar, President of European Generic Medicines Association EGA 

Commentary
The EU's interest in Africa is not new; but, resentment (e.g. see Jacob Zuma's views on Europe etc) of the history between the 2 continents is well and truly alive. Considering China's activities across Africa and the prominence of the BRICS bloc, the EU wishes not to be left behind in 'Africa rising'. This is why the EU is keen to stress, in its various documents on this summit, that both continents are attending as "equal partners". Furthermore, its PR campaign on this project, 2 Unions, 1 Vision, also attempts to strike a bond. But, would it sell?

Says Afro Leo, "we hope to see an end to this kerfuffle within and between the AU. It is one thing clamoring to attend a high-level delegation summit and another to make the best use of such platforms to advance the interests of one's nation or continent." 

For your delectation:
EU-Africa summit background notes are here and here
The EU whittles down Zimbabwe sanctions here 
Muammar Al Gaddafi's speech at the 2010 EU-Africa summit is here (also here)
China's investment in Africa criticised by some here
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Friday 28 March 2014

Jeremy

Kenya tweaks Madrid income stream

Kenya is going to take a greater degree of control over the fees to which it is entitled in respect of international trade mark registrations that designate it. According to this morning's WIPO media release:

Madrid (Marks) Notification No. 202
Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks

Declaration by the Republic of Kenya

The Director General of the World Intellectual Property Organization (WIPO) presents his compliments and has the honor to refer to the deposit by the Government of the Republic of Kenya on March 26, 1998, of its instrument of accession to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks, adopted at Madrid on June 27, 1989 ("Madrid Protocol (1989)").  Please see the Madrid (Marks) Notification No. 102, for ease of reference.
In this respect, the Director General of WIPO has the honor to notify that the Republic of Kenya deposited, on March 12, 2014, the following declaration:
    - that in accordance with Article 8(7)(a) of the Madrid Protocol (1989), the Republic of Kenya, in connection with each international registration in which it is mentioned under Article 3ter of the said Protocol, and in connection with the renewal of any such international registration, wants to receive an individual fee, instead of a share in the revenue produced by the supplementary and complementary fees.
The said declaration will enter into force, with respect to the Republic of Kenya, on June 12, 2014.
This blogger doubts that this will make a great difference to Kenya's public revenues and spending habits: in 2013 the country received just 1,430 Madrid designations.
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Wednesday 26 March 2014

Afro Leo

Public lecture on Digital IP protection

The Chair of Intellectual Property Law will present its annual public lecture on 15 April 2014 with Dr Frederick Mostert, Chief Legal Counsel for the Richemont Group of companies which include Cartier, Montblanc, Alfred Dunhill and Van Cleef & Arpels. The topic of Dr Mostert’s address is “Hacking Back and Hot Pursuit to Protect IP Assets – a Scoop on the TradeKey Case.
In an age of digital threats, Dr Mostert will discuss the potential methods to protect intellectual property rights online. From the intermediary liability of marketplaces to tracing and hacking back online counterfeiters and hackers, the lecture will focus on the legal grounds and methods for combating digital infringement.
The significant TradeKey Case dealt with several questions including:
  • If you buy illegal goods on-line through a website are you or the website acting unconscionably and unlawfully and liable to legal sanctions?
  • What is the culpability of a website that directs potential customers to other websites that offer unlawful goods?
  • Is on-line trading a free for all that enables its players to be untouchables?
  • How do IP rights holders combat the sale of counterfeit goods on-line that threaten to destroy the very fabric of their businesses?
Learn how spirited trade mark owners surreptitiously infiltrated a carefully spun web of dishonesty and deceit and exposed unlawful trading practices on the internet by using counter-espionage measures, resulting in a notable precedent setting court victory against cyber bandits.
Attendance is free. Limited seating available. 

Please RSVP to annettev@sun.ac.za before 10 April 2014 to book your seat and let them know you heard about it through Afro-IP, please.
Date:
Tuesday 15 April 2014
Time:
18:00 for 18:30
Duration:
50 minutes (refreshments to follow)
Place:
The JC de Wet Hall
Stellenbosch University Faculty of Law
Ou Hoofgebou Room 1023
Corner of Victoria & Ryneveld Street, Stellenbosch
Attire:
Smart casual
The day is sponsored by Spoor & Fisher.

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Monday 24 March 2014

IPcommentator

The African IP session at the 2014 International Patent Forum (IPF)


Afro-IP is proud to have supported this year's IPF which was successfully held on 18th and 19th March at the Waldorf Hilton Hotel, London. Representing the blog was this open-minded Leo - who is grateful to the organisers for the invitation.


Having gulped down two cups of coffee, during the break, this Leo quickly made his way into the auditorium to join international delegates for the African session. (Afro Leo does not like events with breakout rooms for various sessions as such format pretty much isolates people in sparsely populated rooms) So what did this Leo learn?

The session began with a panel introduction from Russell Bagnall (Adams & Adams), who also said that his U.S and UK clients are now increasingly seeking advice on IP protection and enforcement across target African markets. 

First Speaker
First on the podium was Nicky Weimar (Nedbank) who delivered a powerful presentation consisting of various verifiable data on the economic trends of many African countries. From her slides, and indeed based on her views, one could see which countries present investors with higher/lower risks for higher/lower returns.The pertinent lesson this Leo took away was: investors are now looking at Africa's potential rather than the negatives. "Long live the positive interests", says Afro Leo.

Second Speaker
Next was Nicky Garnett (Adams & Adams) for the gist of the event. Using the map of the continent, we were told that the top 5 African markets for IP protection and enforcement are: South Africa, ARIPO, OAPI, Nigeria and Angola. We also learned that U.S companies (mostly pharmaceuticals) prefer ARIPO - whose filing numbers currently surpass that of OAPI.  However, Ms. Garnett cautioned that both systems, obviously, have their pros and cons: for example, uneven domestication of legal instruments and length of time for grant under the ARIPO regime. 

We then looked at the patent filing numbers within key markets. South Africa still leads (its strong IP fraternity and training mentioned as a factor) and companies from Germany, Ireland, U.S and the UK are increasingly obtaining them. This Leo also noted that patent filing is also slightly on the rise in Nigeria. During her presentation, Ms. Garnett shared two photographs, among others, depicting the manual nature of the IP register of two African countries. This Leo was actually embarrassed to see that one of them is a weary-looking book where IP rights are recorded; the other was palatable in the form of what looks like a Microsoft Excel spreadsheet of IP records on a PC.  

The lesson from Ms. Garnett's presentation was that a handful of countries (at least, this one) are much more equipped - in many ways, albeit existing bottlenecks - to attract foreign IP owners to protect and enforce their rights across target markets in sub-Saharan Africa. Well, this Leo cannot currently argue otherwise.

Third Speaker
Following Ms. Garnett, for the gist, was Mr. Bagnall. First, he cautioned that the data relied upon by Ms.Garnett and himself, on patent protection and enforcement activity, were mainly based on those pertaining to other IP rights such as trade marks. Using a scoreboard, we learned that while Namibia, Kenya, Nigeria and Tanzania are showing signs of IP activity, Ghana is currently disappointing. Again, we are told that South Africa leads. Mr Bagnall buttressed the similarity in legal systems between some African countries and the UK and that South African lawyers can litigate in Namibia due to their historical legal connections. 

The lesson from Mr. Bagnall's presentation was that operating in ARIPO countries is easier in comparison to OAPI (Afro Leo assumes: from a South African IP lawyer's perspective) and that South Africa is the preferred hub for IP services. Lastly, the lack of, or inadequate, specialist expertise and essential infrastructure for IP (e.g. critically under-resourced IP office) were cited as significant challenges in most African countries. "South Africa is not totally immune to the latter", shouts Afro Leo.

Fourth Speaker
By the time the last speaker, Christopher Kiige (ARIPO), stepped up to the podium, the allotted time was almost up. Mr. Kiige had to skim through his slides - focusing on ARIPO's legal tenets, achievements and future plans. He told us that his organisation is working hard to help Member States domesticate its operating legal instruments, train IP lawyers and reduce the length of time for grant of IP rights. According to Mr Kiige, Nigeria, Angola and Ethiopia are planning to join the organisation.

Lastly and most importantly, Mr Kiige told us about ARIPO's long term plans. First is to further improve the working relationship with its counterpart, OAPI. Secondly, both entities may merge as one organisation in the near future. No, he said that this vision has nothing to do with the controversial PAIPO. There you have it from the horse's mouth!

Commentary
This Leo must first say that he also learned other things outside of the African continent: one example is biosimilar. Considering that a quarter of doctors in Europe have no idea of what biosimilar is, he is glad to roughly be in the know.

He enjoyed the Africa session (as well as the subsequent sessions); it was appropriately structured to present economic growth trends before any talk of commercial law such as IP. He was pleased to hear questions from an engaged audience and took the opportunity to ask one about potential interest in Africa's legal services industry. The answer to his question came from Mr. Bagnall who said that there is not yet the impetus for foreign legal practices to look at IP legal services on the continent. Well, this Leo can understand why: for a start, there seems not to be enough IP work; and moreover, there are reputable African law practices well able to operate within and beyond their own territories on the continent.

South Africa is currently flying the IP flag and is generally seen as the hub for Africa's legal services industry, but Kenya seems to be gaining momentum on the IP front. Indeed, a united IP fratenity would have the capability and credibility to lobby their respective Governments on various matters and attract investors (whoever this may be) for its community to thrive. 

If the format permits, this Leo hopes to see more than one IP law firm (representing the key African markets) in the 2015 International Patent Forum.  

Note:
If the organisers or presenters do decide to release the slides to him, this Leo will share it.
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Friday 21 March 2014

Caroline B Ncube

IP policies in Africa no.17: Equatorial Guinea

As noted by AfroLeo here, there is mounting pressure on the South African government to move the  national IP policy process along.  Specifically, the Treatment Action Campaign (TAC), Doctors Without Borders (MSF) and SECTION27 are calling for the finalisation of the policy by the May 7 national elections. The SABC reported here that following a march by activists  led by the three groups in Pretoria, the Minister of Trade and Industry undertook to meet with civil society to provide an update on his ministry's progress towards finalising the IP policy. So, invigorated by the news of possible IP policy developments in South Africa, this Leo turned her mind to the IP policies in Africa series' weekly post.


This week the series visits Equitorial Guinea ... and comes up empty-handed, again.  Two years ago Kingsley reported here that OAPI, of which Equitorial Giunea is a member, had announced that it was committed to working on harmonising the IP laws and policies of its member states in the l'appel du cinquantenair pour la mise en oeuvre de la propriété intellectualle dans le états member de'lOAPI [here in French and here in English via google transalte]. If any consequent action results in the preparation of an OAPI IP policy document, then at least OAPI member states (like COMESA member states*) will have a collective policy vision from which national policies can be drawn. This Leo was unable to find any information about progress on the OAPI IP laws and policy harmonisation initiative. Do any readers know what its current status is?
-----------------------------------------------
* See here for COMESA's IP policy
For Equitorial Guinea's IP laws see WIPOLex here
For Kingsley's posts on the web presence of  EG's national IP offices see here and here

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Friday 14 March 2014

Darren Olivier

South Africa: Activists march on Parliament to call for changes to IP legislation

Trying to attract any attention away from the Oscar trial is a tall order. But activists pushing through reforms to intellectual property laws in South Africa before elections are doing their utmost.

Business Day Live reports that the Treatment for Action Campaign and others marched on the Parliament yesterday calling for changes that would create a substantive examination system for patents and, in that way, increase access to life saving drugs. You can read and view the report here.

The TAC's website contains a slightly more realistic call - to agree the IP Policy before the elections due to take place in a few months time.

Despite the government's apparent support for such a move in their draft IP Policy, which includes provisions for substantive examination, this document is only a policy document and is not legislation. For government to assess the full impact of changes to legislation by introducing substantive examination, it will take time and requires thorough analysis. This cannot be done before the election, at least not without considerable consultation and debate. Even the IP Policy document should only contemplate such a process.

Critics (search "IP Policy - notes" on this blog for more information) are claiming that there is no tangible evidence to indicate that it will increase access to drugs, that it may deter investment in drugs for the continent and/or scupper incentives for local drug manufacturing and R&D. But perhaps more concerning is that South Africa simply does not have the capacity to do the substantive examination (and there is no clear solution at the moment, even if it is outsourced). The trade mark system, for example, which has all the bells and whistles of a thorough system and which is arguably easier to implement than a complete patent examination system, has ground to a halt in South Africa because of lack of capacity; a substantial backlog of oppositions now has to be heard by over burdened courts which lack sufficient expertise at lower levels to deal with nuances related to trade marks. This is because the CIPC (the same commission that oversees patent applications) does not have sufficient capacity.

South Africa cannot implement a substantive examination system until it has, at least, sorted out its capacity problems, something which the draft IP Policy does also recognise.
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Thursday 13 March 2014

AfroTwiga

IP Valuation: My Two Cents, for What It’s Worth

This month, a regular gathering of Kenyan IP enthusiasts selected IP Valuation as the topic of discussion. The topic reminded this Leo of recent IPKat posts, here, here, and here, the last of which links to its own nugget of spectacular value – a free 104-page book on IP Valuation, here.
 
Do you think my patent portfolio
will make me rich?
Clara Peeters, 17 c.
In theory, IP Valuation seems as straightforward as valuing any other asset. The IP enthusiasts discussed and explained the Cost Approach, the Market Approach, the Income Approach, and the Direct Approach. Indeed these are so well know that they feature on the Wikipedia page for IP Valuation. All very digestible and logical.

When it comes to IP Valuations in practice, however, this Leo is quite the scaredy-kat.

A finance expert recently stated, quite casually, that IP valuation is no more difficult than valuing any other asset.  But can this be the case? Unlike most assets, an IP right is entirely separable from the product to which it pertains. The patent is not the device it describes, the trademark is not the logo, and the copyright is not the drawing. You can use a device, logo, or drawing entirely apart from any IP right that may cover it, and in any case these IP rights don't even grant any right to sell or use the product/logo/drawing/etc.  Indeed you can even sell a product but not the IP rights covering that product, and vice versa.

Instead, the IP rights grant the right to stop others from acting.  Accordingly, IP valuation is really the process of answering the question: “of what value to a potential buyer is the right to exclude competitors from doing _______?” The blank represents the right(s) provided by the IPR. This exclusionary right can have much more (or much less) value than the product itself.

Dramatic examples of IP valuation show it to be highly subjective, to the point of being unreliable. A portion of the Kodak patent portfolio (1700 patents, to be exact) was originally valued at 2.2 Billion to 2.6 Billion USD. After a negative result in a court case, some deal-making, consortium building, and other hocus pocus curious and interesting events involving the portfolio, Kodak finally reaped just 94 Million USD, a mere 4% of the initial valuation. The full story is told here.

This Leo wonders whether there was any consequence for the firm that was responsible for overvaluing an asset by over 2 Billion USD. Granted there were intervening events, but if there are no consequences for missing the mark (by a lot), they why do we bother with IP valuations at all? In the end, it probably boils down to building a reputation and trust for those doing the valuations.

An important note (since tax is one of two certainties in life) is that IP Valuation is important for tax purposes. Tax authorities in the United States and other developed countries regularly deal with IP assets in financial reports and tax returns. South Africa, too, appears to allow a deduction (here and here) from tax for certain IP assets. The Kenyan tax authority, KRA, has not made any (obvious) public announcements or guidelines for the treatment of IP assets. Perhaps this is due in part to the difficulty of valuing such IP. More likely it is indicative that most Kenyan tax filers do not report IP assets, so there is little or no need for such guidelines. Surely this is likely to change in the near future.


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