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eu/case-studies
INTELLECTUAL PROPERTY (IP) Case Studies
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1. Generic drug process patent infringement
A British pharmaceutical manufacturer is a market leader in the production of an
anti-cancer drug, which it has been exporting to every major developed country for
the last 20 years, and also more recently to developing countries, particularly in
Southeast Asia. The active ingredient of the drug was patented (product patent), but
the original patent expired 3 years ago. However, a new improved process for
making the drug was patented 10 years ago (process patent), and this patent is still
in force in various countries, including Singapore, Malaysia, and Indonesia [but not
in Vietnam.]. Two years ago, the manufacturer found out that a generic
manufacturer based in Vietnam was making and exporting the anti-cancer drug to
Malaysia, and being sold in these countries for half the price of their own drug. This
was having a serious adverse effect on sales.
The British manufacturer was informed that patents are national rights, and
therefore action could only be taken in the countries where a patent existed. A
product patent is infringed if a third party makes, imports, sells, offers to sell, stores,
or uses the product without the permission of the patent owner. A process patent is
infringed if a third party uses that process without the permission of the patent
owner, and also if a third party makes, imports, sells, offers to sell, stores or uses
the product directly obtained from that process. The British manufacturer was
advised to contact a local expert to determine the exact process steps being used
by the generic manufacturer.
Question:
What do you think the outcome of the action(s) would be, and in which countries?
Provide explanations for each point. Think along the following lines:
a) Action against the generic manufacturer for infringement of the product
patent based on the original patent (in any country).
b) Action against the generic manufacturer for infringement of the process
patent in Vietnam.
c) Action against the generic manufacturer for infringement of the process
patent in Malaysia.
d) In the event that an action is lost (in court), what would be the
consequence(s), and what other course of action would have been better.
e) In summary, what would be the lessons to be learnt on intellectual property
based on your answers.
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Answer key points:
Outcome:
a) It was not possible to take action against the generic manufacturer for
infringement of the product patent as the original product patent filed within
some Southeast Asian countries had already expired 3 years earlier (it is
possible they would have had a longer term than those in developed
countries due to differences in national laws).
b) In addition, it was not possible to take action against the generic
manufacturer for infringement of the process patent in Vietnam directly as no
patents had been filed in this country. Since the process patent had been filed
and published many years ago, it was not possible to extend the protection to
Vietnam.
c) However, the generic manufacturer was importing the drug into Malaysia. The
local expert determined that all but one of the process steps used by the
generic manufacturer were identical to that defined by the claims of the
patent. In the only non-identical step, the claim specified that an ‘aliphatic
alcohol containing 1-3 carbon atoms’ should be used as a solvent, whereas
the generic manufacturer used acetonitrile for the same effect. On reviewing
the patent, the Malaysian court held that use of acetonitrile instead of alcohol
did not infringe the patent, and therefore the product was not made directly
by the same process. Consequently the patent was not infringed.
d) It turned out that the loss in sales to the British company was estimated at
EUR 30,000. However, the cost of litigation came to EUR 50,000.
Lessons Learnt:
Submit your patent applications in potential future markets in Southeast Asia.
Process patents are usually more difficult to enforce than product patents.
Malaysia is one of the few countries in Southeast Asia with a dedicated IP
court – judgments may not be consistent in other countries.
The cost of litigation can be high (both financially and in management time)
and may outweigh the cost of lost business, so reaching a settlement is often
more cost-effective.
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2. Trademark infringement in Malaysia
A British manufacturer of biscuits has been selling cookies in Malaysia for more than
20 years, and has had a registered trade mark 'ChipsMore' for these goods during
that time. Two years ago a Malaysian company started manufacturing and selling
cookies under the brand 'ChipsPlus.'
The British company was advised that they could sue the Malaysian company for
trade mark infringement and also 'passing off'’ (imitation – giving the false
impression that it is the same product), which can be used to enforce unregistered
trade mark rights and exists in Malaysia as it is a Common Law country. For trade
mark infringement, the British company had to prove that the Malaysian company's
brand so nearly resembled their own that it was likely to deceive or cause confusion
in the course of trade in relation to their own products. For 'passing off' the British
company had to prove that the Malaysian company was misrepresenting their
goods as being connected with the British company. They also had to prove that
their own brand had acquired 'goodwill' and reputation in the marketplace, and that
they would suffer damage as a result.
Question:
What do you think the outcome of the action would be? Provide explanations for
each point. Think along the following lines:
a) Trademark infringement:
Look at the names 'ChipsPlus' and 'ChipsMore'.
b) ‘Passing off’:
Look at substantial goodwill and reputation, and possible misrepresentation,
and should the Malaysian company be allowed to continue.
c) In summary, what would be the lessons to be learnt on intellectual property
based on your answers.
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Answer key points:
Outcome:
a) Trademark infringement:
The Malaysian court held that 'ChipsPlus' was an infringement of 'ChipsMore'
as they were similar marks for identical goods and likely to deceive or cause
confusion. In particular, the 'Chips' part was phonetically identical, the suffixes
'More' and 'Plus' have a similar meaning, and the formatting of the words was
similar.
b) ‘Passing off’:
The claim for 'passing off' was successful. The British manufacturer had been
selling cookies in Malaysia for over 20 years and therefore had no difficulty in
demonstrating substantial goodwill and reputation in the brand. The
appearance of the 'ChipsPlus' product was held to be strikingly similar to the
'ChipsMore' product, including similar colours, fonts and other aspects of the
composition, which was indicative of misrepresentation. The court
determined that the British manufacturer would therefore suffer damage (loss
of business) if the Malaysian company was allowed to continue.
Lessons Learnt:
Register your brands as trade marks in Southeast Asia
A brand does not have to be identical to infringe a trade mark
Some countries provide a Common Law right of 'passing off' (but the burden
of proof is higher)
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enforcement-actions-against-illegal-downloading-singapore
3. Illegal downloading in Singapore
Two Hollywood studios, “Voltage Pictures” and “QOTD Film Investment”, are the
right owners of the two movies “Father & Daughters” and “Queen of the Desert”.
They have been subject to serious copyright infringement carried out by illegal
downloaders in Singapore for quite some time.
The two studios attempted a procedure against illegal downloaders in Singapore by
applying to the Singapore High Court to compel local Internet Service Providers to
release the particulars of internet subscribers who allegedly downloaded the
movies, such as names, identity card numbers and addresses.
Question:
What do you think the outcome of the action would be? Provide explanations for
each point. Think along the following lines:
a) Identifying the guilty parties
b) In summary, what would be the lessons to be learnt on intellectual property
based on your answer.
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Answer key points:
Outcome:
a) Identifying the guilty party:
In April 2017, the Singapore High Court dismissed the application on the
ground that there was insufficient evidence to show a link between the
Internet Protocol (IP) addresses and the alleged illegal downloaders. Many
people may be sharing the same Wi-Fi connection, so it does not mean that
the registrant at a specific IP address is actually illegally downloading. Hence,
an IP address alone is unlikely to be sufficient to identify the alleged illegal
downloader.
Lessons Learnt:
Illegal downloading is a common and challenging issue in South-East Asian
countries of which copyright holders need to be aware.
Copyright holders have the right to enforce their intellectual property against
illegal downloaders, but they need to identify the account holder before they
can ascertain whether a person is the actual illegal downloader.
Copyright holders are recommended to consider enforcing their copyright via
other means. For instance, the amended Copyright Act of Singapore, effective
from December 2014, lets content owners seek a High Court order forcing
Internet service providers to block piracy websites.
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4. Unjust Appropriation of Famous Trade Mark
A famous French culinary school tried to register its 1895 trade mark LE CORDON
BLEU in the Philippines but it was opposed by a local entity which was owned by
one of the graduates of the same school. The graduate started using the same mark
in the Philippines long before the French school tried to register but never applied
for trade mark registration. The local entity argued that it was the first to use the
mark in the Philippines, thus it should be entitled to register the mark ahead of the
French school. Subsequent to filing the opposition, the local entity filed its own trade
mark application covering the same mark.
The Bureau of Legal Affairs of the Intellectual Property Office of the Philippines
(IPOPHIL) rejected the French school’s application on the grounds that there was
not sufficient evidence to establish their prior use of the mark in the Philippines. It
further stated that adoption and use of the trade mark must be in Philippine
commerce and not abroad. The French school appealed.
Question:
What do you think the outcome of the appeal would be? Provide explanations for
each point. Think along the following lines:
a) World-famous trade mark.
b) In summary, what would be the lessons to be learnt on intellectual property
based on your answer.
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Answer key points:
Outcome:
a) World-famous trade mark:
The decision by IPOPHIL was first reversed by its Director General,, who
held that the old Trademark Law did not require actual use in the Philippines
in order to acquire ownership of the mark. The IPOPHIL Director General
considered the earlier use of the mark outside the Philippines, and noted that
the local entity failed to explain how it came up with the mark. For these
reasons, the IPOPHIL Director General concluded that the local entity had
unjustly appropriated the mark.
b) The decision of the IPOPHIL Director General was affirmed by the Court of
Appeals and the Supreme Court. In denying the opposition, the Supreme
Court explained that only the owner of a mark has the right to register the
mark, and a prior user of the mark in the Philippines does not necessarily
mean the user is the owner. A prior user of a mark in commerce can prove
ownership only when the mark has not been validly appropriated by another.
In this case, the Supreme Court noted that the French school had been using
the subject mark in France well before the local entity started using it in the
Philippines. The Court also noted that the Philippines and France are both
signatories to the Paris Convention for the Protection of Industrial Property.
Thus, the French school’s mark, even if not registered in the Philippines, was
also afforded protection against infringement and/or unfair competition. The
Court found that prior use of the mark in France effectively barred its
subsequent registration by another party in the Philippines. That being the
case, even if the local entity was the first to use the mark in the Philippines, it
could not be said to have legally appropriated the mark, and hence was not
entitled to registration.
Lessons Learnt:
Protect your trade mark through registration.
A famous mark will be granted registration even if there is a prior user in the
country because ‘bad-faith’ use is not a right.
This case is significant because it clarifies that prior use of a mark in the
Philippines does not guarantee registration.
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[Link]
registration-thailand-and-south-east-asia-automotive-industry
5. Trademark Squatting
Textra Automotive (“Textra”) is a medium-sized European company known for
producing high-tech sensors for cars. After an extensive market study, Textra has
decided to enter the ASEAN market. It identifies Siam Manufacturing Group (“Siam”)
as a promising partner in Thailand and enters into an agreement with the latter to
manufacture and distribute sensors to vehicle manufacturers in Thailand. If the
products prove profitable in Thailand, Textra will expand its business to the other
major automotive manufacturing countries in the region.
Following three successive profitable quarters, Textra decides to pursue sales of the
products in Indonesia, Malaysia, Vietnam and the Philippines. It applies to register
its name as a trade mark in Thailand, with a plan to register the same mark in the
other four countries, claiming priority from the Thailand application. However, Textra
discovers that the trade mark has already been registered by Mais Manufacturing
Ltd. (“Mais”).
Upon further investigation, Textra is very surprised to learn that Mais has
manufactured sensors of inferior quality and sold these for a reduced price under
Textra’s trade mark. It turns out that Siam has been selling faulty Textra sensors that
it manufactured to Mais, despite the contract between Textra and Siam specifying
that all faulty sensors were to be destroyed. The problems are compounded when
Textra receives a Letter of Demand from Mais alleging trade mark infringement.
Textra seeks consultation from a local lawyer discovers that “Textra” trade mark was
legitimately registered in Thailand by Mais as Mais was the first registrant of the
mark in the country. As result, Textra cannot claim the ownership of the trade mark
against Mais in Thailand.
Question:
What do you think the outcome of the action would be (if any)? Provide explanations
for each point. Think along the following lines:
c) Rules for trademark registration
d) In summary, what would be the lessons to be learnt on intellectual property
based on your answer.
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Answer key points:
Outcome:
b) Rules for trademark registration:
The rules are clearly for Mais as the first registrant, with Textra not being a
very known entity. Faced with the threat of lawsuits for trade mark
infringement by Mais, Textra feels forced to negotiate with Mais to ‘buy-back’
the “Textra” trade mark from the latter at a substantial price.
Lessons Learnt:
EU SMEs should conduct due diligence on their local partners before working
with them.
EU SMEs should register their trade marks in the South-East Asian countries
of interest before or as soon as they enter the respective countries.
Trade mark searches are very important to determine if a trade mark has
been already registered in the country by other parties and shall be done
before entering the market.
EU SMEs should actively monitor the market for infringement products and
set aside a budget for commencing actions against the infringers.
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