Now more than ever, technology is influencing the way we do business, communicate, move through and around the world, access and manage our homes, receive and administer healthcare, make purchases, secure information, and protect our most valuable property. Morrison Foerster keeps pace with this rapidly evolving landscape across our internationally recognized corporate, finance, intellectual property, and litigation practices. MoFo Tech brings together our insights relating to fields such as blockchain and distributed ledger, cloud and as-a-service technologies, driverless cars, drones, fintech, computer hardware and software, the Internet of Things, semiconductors, and telecommunications. The MoFo Tech blog offers real-time, in-depth analyses of the trends and complex issues shaping the global technology industry.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Scott Llewellyn’s practice focuses on complex litigation in federal and state courts around the country, with an emphasis on patent and trade secret disputes. Over the past decade, he has worked on some of the most significant, high–profile IP cases involving technology for televisions, smartphones, and self–driving cars, relying on 40 years of experience with computer hardware and software. Scott also has significant experience with business divorce cases before courts and arbitrators, involving a mix of trade secret, patent, tort, and contract claims relating to technology development and implementation.Scott also has successfully tried general commercial arbitration and agency matters, briefed and argued various appeals in federal appellate court, and tried more than 20 cases for the Denver City Attorney’s office, most of them jury trials.Scott also has an active pro bono practice, having worked on a variety of criminal and immigration appeals, and having represented Colorado criminal defense and mental health organizations in high–profile suits against the state of Colorado for violations of the constitutional rights of defendants.At MoFo, Scott serves on the board of the Morrison & Foerster Foundation. In the broader legal community, he serves on the boards of the Colorado Lawyers Committee and Drop in the Bucket (a charity that builds wells and sanitation systems in sub–Saharan Africa).After law school, Scott clerked for the Honorable Clarence A. Brimmer, District of Wyoming, and the Honorable Diarmuid F. O’Scannlain, Ninth Circuit. He was also previously an adjunct professor at the Georgetown University Law Center.

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Scott Llewellyn’s practice involves complex litigation before state and federal courts around the country, with an emphasis on patent and trade secret disputes for high-tech companies, to which he brings more than 35 years of experience with computer hardware and software, in particular relating to the processing and transmission of audio, video, voice, and other types of data. Mr. Llewellyn has also tried commercial arbitration and agency matters; briefed and argued various appeals in federal appellate court; and tried more than 20 cases for the Denver city attorney’s office, most of them jury trials.

Scott F. Llewellyn

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Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREXIT fast approaching, the European Union (“EU”) and the United Kingdom (“UK”) have been pushing things forward at the negotiator level, but also independently. The latest of these developments is the White Paper, released by the UK Government on July 12, 2018 (“White Paper”), that laid down a proposal for the future relationship between the UK and the EU. It highlighted the importance of further cooperation in matters of IP protection and touched on issues like the participation in the Unified Patent Court (“UPC”) System and the establishment of an own protection scheme for Geographical Indications (“GIs”). Moreover, on July 19, 2018, Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, reassured businesses of the UK Government's intention to grant equal protection to IP rights holders in the UK following BREXIT, which has been reaffirmed on July 23, 2018, by a news story titled “<a href="http://transit.linexsystems.com/track/click/30370861/ca.linexsystems.com?p=eyJzIjoiWkpLdEpJVUZvMDk0UzYwbGJmRE0tdEpPRWpnIiwidiI6MSwicCI6IntcInVcIjozMDM3MDg2MSxcInZcIjoxLFwidXJsXCI6XCJodHRwOlxcXC9cXFwvY2EubGluZXhzeXN0ZW1zLmNvbVxcXC9jb250ZW50c1xcXC90cmFuc2l0XFxcLzI3Njg5NTIzMDU_dXNlcl9pZD02ODc1OTUmbG9nPTcyM2Q0NWZjYTdhNWFlNDBjMDEzN2YyZTdiYjc0MWRiJnA9NzA2ODQyNzUmbT0xJnM9MTk5MDk1Jm9yZ19pZD02ODUzNFwiLFwiaWRcIjpcImEwM2Q0NjdmYjc0NDQzMDdiODM1NmQ3Y2E5YWE4ZjY3XCIsXCJ1cmxfaWRzXCI6W1wiMDVlOWIzZjFmOTg5MDU0ZmUzYmM4MjRhZDhmYTFiOGYxZjIzNWQxM1wiXX0ifQ">IP and BREXIT: The facts</a>,” which was posted by the UK Government on <a href="http://www.gov.uk/">www.gov.uk</a> (“UKGov News”).This is the second part of our article on IP protection post BREXIT, which is dedicated to giving a comprehensive overview of what IP right owners can expect when the UK leaves the EU on March 29, 2019 (“Exit Date”), by summarizing the state of affairs for each IP right category separately. The first part of the article dealt with post BREXIT issues relating to European Union trade mark Registrations (“EUTM”), Registered Community Designs (“RCDs”), Unregistered Community Design Rights (“UCDs”) and granted Community Plant Variety Rights (“CPVRs”) (together, “EU-IP”). In case you missed it, you can read it <a href="https://mofotech.mofo.com/topics/ip-protection-post-brexit-part-1.html">here</a>. This second part will be directed at issues relating to Geographical Indications (“GIs”), eu. country code TopLevel Domains (“ccTLD”), data base rights, European Patents (“EPs”) and Supplementary Certificates (“SPCs”). Both parts of the article will be supplemented by a set of actions that we suggest can be taken to address the risks indicated by the probable future IP right regimes that we are facing and the risks associated with the uncertainties of a “deal or no-deal” scenario.Agreed and not agreed (until everything is agreed) – Part 21.     Geographical Indications and Protected Designations of OriginAccording to the proposal made by the EU under Article 50 Sec. 2 of the Draft Agreement on the withdrawal of the United Kingdom and Northern Ireland from the European Union and the European Atomic Energy Community (“Draft Agreement”), the UK should provide holders of Geographical Indications and Protected Designations of Origin with continued protection of their rights in the UK after expiry of the Transition Period. The parties have not yet been able to agree upon this provision at the negotiator level. However, the White Paper states that the UK will establish its own GI scheme consistent with, and possibly going beyond, the provisions of the World Trade Organizations Agreement on Trade-Related Aspects of Intellectual Property (“TRIPS”). According to the statement, the new scheme will provide a clear and simple set of rules on GIs and continuous protection in the UK for UK GIs, notwithstanding exit from the EU. It will be open to new applications from both UK and non-UK applicants.2.     “.eu” Country Code Top Level Domains (“ccTLD”)In addition to the Draft Agreement, the European Commission released another statement on March 28, 2018 (“ccTLD Statement”), announcing that the regulatory framework pertaining to .eu ccTLDs will cease to apply to the UK from March 30, 2019. Thus, undertakings and organizations that are established in the UK but not in the EU and natural persons who reside in the UK will:<ul><li>no longer be eligible to register or renew .eu ccTLDs;</li><li>be subject to revocation actions by EURid without the right to submit the dispute to any extrajudicial settlement of conflicts (as provided for in Article 20(b) of the Commission Regulation (EC) No. 874/2004);</li><li>no longer be eligible to rely on IP rights recognized or established under UK law but not in the EU Member States (e.g., common law rights) in .eu domain name dispute proceedings, which, until such date, has been the case in accordance with Article 21 of the Commission Regulation (EC) No. 874/2004; and</li><li>not be eligible to rely on a choice-of-law clause in agreements concluded between the Registrar and the .eu domain registrant if such clause designates UK law.</li></ul>The ccTLD Statement stresses that a transitional arrangement may be contained in the final Withdrawal Agreement. The Draft Agreement in its current form, however, provides no information in this regard.3.     Database RightsDatabase rights were introduced in the UK with the implementation of the EU Database Directive (Directive 96/9/EC). This protects databases where, at the time the database was made, its maker is (1) an individual who is a national of or habitually resident in the EEA; or (2) a company incorporated, or an unincorporated body formed, under the law of an EEA state that has its central administration, principal place of business or registered office within the EEA. In the Draft Agreement, the UK now agrees that the holder of a right in relation to a database that arose before the end of the Transition Period shall be granted an IP right in respect of the UK with the same level of protection as afforded under the EU Database Directive if such person or entity is: (i) a UK national, (ii) a person with a habitual residence in the UK or (iii) an undertaking established in the UK. In relation to (iii), where an undertaking has only its registered office in the UK, its operations must be genuinely linked on an ongoing basis with the economy of the UK or of a Member State.4.     PatentsIn general, there will be no impact on European patent protection in its current form, which is granted as a bundle of national rights in selected countries of the European Patent Convention (“EPC”). This is because, in contrast to what its name suggests, the EPC is not solely an EU institution, but has several non-EU Member States (e.g., Morocco) being a party to it. However, it remains an interesting question whether the UK will be party to the Unified Patent Court (“UPC”) System, under which a new type of patent will be issued by the European Patent Office conferring protection across the entire territory of the participating European nations as one single right. As indicated in the beginning of this article, the UK ratified the UPC Agreement (“UPCA”) and thereby paved the way for negotiations to ensure the UK’s continued participation in the UPC following BREXIT. In the White Paper, the UK again affirmed its intention to further explore staying in the Unified Patent Court and Unitary Patent system post BREXIT and to “work with other contracting states to make sure the Unified Patent Court Agreement can continue on a firm legal basis.”However, as with almost everything concerning BREXIT, the UK’s participation in the UPC System is still far from certain. On the one hand, it is yet to be seen whether the UK is willing to accept the role of the ECJ in the UPC System despite its intentions to end the ECJ’s jurisdiction in the UK overall. On the other hand, as reported earlier <a href="https://mofotech.mofo.com/topics/turn-on-tune-in.html">here</a>, the UPCA must enter into force before the UK leaves the EU – i.e., before March 29, 2019 – but there are still outstanding ratifications, inter alia, from Germany, where a constitutional claim filed with the German Federal Constitutional Court (Bundesverfassungsgericht) is currently pending, barring the German Federal President (Bundespräsident) from signing the UPCA and the UPC’s Protocol Privileges and Immunities.5.     Supplementary Certificates (“SPC”)SPCs can provide up to five (5) additional years of protection for a marketed medicine or plant protection products. As confirmed in the UKGov News during the Transition Period, businesses can continue to apply for and be granted SPCs using the current SPC system and existing UK SPCs granted under that system continue to be valid. Since these SPCs are based on EU Regulations No. 1610/96 and No. 469/2009, the UK will need to replace the existing legal framework for rights of patent term extension with a new framework to be available at the end of the Transition Period. As suggested in a <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/717697/Joint_Statement_-_19_June_2018.pdf">jointly released a statement </a>on June 19, 2018 (“Joint Agreement”), the UK and the EU came to the agreement that Article 56 of the Draft Agreement shall apply. This states that SPC applications filed before the end of the Transition Period and still pending at its end will be granted even after the end of that Period and provide for the same level of protection under UK law as under the EU Regulations.WHAT'S LEFT TO DECIDEAlthough the Draft Agreement and the Joint Statement suggest that, at least with regard to IP protection post-BREXIT, consent has so far been reached for the majority of issues and the negotiators of the EU and UK Government in the Joint Statement committed themselves “[ . . . ] to making progress as quickly as possible on all aspects necessary to reach such an agreement [ . . . ],” there are still open issues that need to be addressed in the final Withdrawal Agreement, which is targeted for signing by October 2018.One such open issue is the actual registration procedure for equivalent rights to EU-IP (“UK Equivalents”), including the question of whether any payments from IP rights holders will be required for the creation of UK Equivalents or whether such registration will be provided free-of-charge, which the parties have not yet announced as agreed upon at the negotiator level. However, at least on a unilateral basis the UK Government in the statement of Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, has indicated that the UK will grant UK Equivalents free of charge: “We have agreed to protect all existing EU trade marks, community registered designs and unregistered designs in the UK as we leave the EU. In place of those EU-level rights, 1.5 million new UK trade marks and registered designs will be granted automatically and for free.”ACTIONS THAT CAN BE TAKEN NOWDespite the fact that the EU and the UK constantly reassure that they want a deal in place by October 2018, the possibility remains that topics other than IP prevent the UK from signing the final draft of the Withdrawal Agreement. IP owners are advised to bear this in mind when planning their future IP strategy.In our first part of this article, we pointed out actions that can help address risks associated with the uncertainties contemplating to the protection of EUTMs, RCDs and CPVRs. Here we want to supplement these suggestions with the following:<ul><li>.eu ccTLDs: Holders of eu. ccTLDs located in the UK with no establishment in the EU may want to consider registering other ccTLDs.</li></ul><ul><li>License agreements: Existing license agreements where (i) the UK is part of the license territory and/or (ii) EU-IP or International Registrations designating the EU are licensed will need to be carefully examined, and, with regard to new license agreements, emphasis should be given to the contractual language to not only provide for a license to the EU-IP or the International Registration itself but to also encompass its future UK Equivalent. Furthermore, territory definitions should make express reference to the UK, rather than to the EU as a whole.</li></ul>***

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Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in the digital, high-tech, life sciences, and pharmaceutical industries.

Wolfgang Schönig

Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

NYSE-listed health tech company

One of UK’s largest public EV charging networks

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Associate

Sana Ashcroft is an associate based in the London office of Morrison & Foerster and is a member of the Technology Transactions Group.
Sana advises on a wide range of domestic and cross-border commerci

Sana Ashcroft

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Counsel

Robert advises companies in the healthcare, pharmaceutical, medical device, and technology industries on all aspects of intellectual property law, primarily in connection with commercial life sciences, licensing, and technology transactions. His clients range from multinational companies to startups.

Robert Grohmann

Robert Grohmann is counsel at Morrison Foerster’s German office in Berlin. As a member of the technology transactions group, he focuses on advising domestic and foreign companies and startups in all areas of technology and IP law, including patent and software licensing, employee inventions law, as well as know-how protection. Moreover, Mr. Grohmann’s expertise encompasses the judicial and extra-judicial representation in matters of trademark law, design law, and competition law.

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IP Protection Post BREXIT Part 2: A Right-by-Right Analysis

Supreme Court Restricts the Extraterritorial Reach of U.S. Patent Law for Exported Goods

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Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREX

IP Protection Post BREXIT Part 2: A Right-by-Right Analysis

Progress is being made regarding the protection of intellectual property (“IP”) rights in a post-BREXIT scenario on both sides of the English Channel. With BREXIT fast approaching, the European Union (“EU”) and the United Kingdom (“UK”) have been pushing things forward at the negotiators level, but also independently. The European Commission got the ball rolling by releasing the third version of the Draft Agreement on the withdrawal of the United Kingdom and Northern Ireland from the European Union and the European Atomic Energy Community (“Draft Agreement”) on March 19, 2018, which reflected the state of affairs with regard to post–BREXIT protection of pan-European IP rights. Shortly thereafter, on March 28, 2018, another statement was released pertaining to <a href="https://ec.europa.eu/info/publications/eu-domain-names_en">.eu country code Top Level Domains </a>(“ccTLD Statement”). The UK, on the other hand, ratified the<a href="https://www.gov.uk/government/news/uk-ratifies-the-unified-patent-court-agreement"> Unified Patent Court Agreement </a>(“UPCA”) on April 26, 2018, and, before that, the<a href="https://www.gov.uk/government/news/uk-ratifies-hague-agreement-for-industrial-designs"> Hague Agreement for industrial designs</a> that took effect on June 13, 2018. Additionally, the parties <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/717697/Joint_Statement_-_19_June_2018.pdf">jointly released a statement </a>on June 19, 2018 (“Joint Agreement”), stating that they had reached an agreement at the negotiators level with regard to the Draft Agreement relating, inter alia, to the protection of pending Supplementary Certificates (“SPC”).On July 12, 2018, the UK Government released a White Paper, a proposal for the future relationship between the UK and the EU (“White Paper”). On Thursday, July 19, 2018, the Parliamentary, Robin Walker MP, confirmed the UK Government’s intention to grant protection to IP rights holders following BREXIT equal to that under the current IP regime of the EU, which was then reaffirmed on July 23, 2018, by the post of a news story titled “<a href="http://transit.linexsystems.com/track/click/30370861/ca.linexsystems.com?p=eyJzIjoiWkpLdEpJVUZvMDk0UzYwbGJmRE0tdEpPRWpnIiwidiI6MSwicCI6IntcInVcIjozMDM3MDg2MSxcInZcIjoxLFwidXJsXCI6XCJodHRwOlxcXC9cXFwvY2EubGluZXhzeXN0ZW1zLmNvbVxcXC9jb250ZW50c1xcXC90cmFuc2l0XFxcLzI3Njg5NTIzMDU_dXNlcl9pZD02ODc1OTUmbG9nPTcyM2Q0NWZjYTdhNWFlNDBjMDEzN2YyZTdiYjc0MWRiJnA9NzA2ODQyNzUmbT0xJnM9MTk5MDk1Jm9yZ19pZD02ODUzNFwiLFwiaWRcIjpcImEwM2Q0NjdmYjc0NDQzMDdiODM1NmQ3Y2E5YWE4ZjY3XCIsXCJ1cmxfaWRzXCI6W1wiMDVlOWIzZjFmOTg5MDU0ZmUzYmM4MjRhZDhmYTFiOGYxZjIzNWQxM1wiXX0ifQ">IP and BREXIT: The facts</a>” on www.gov.uk (“UKGov News”).This article is the first of two parts dedicated to providing a comprehensive overview of what IP right owners can expect when the UK leaves the EU on March 29, 2019 (“Exit Date”), by summarizing the state of affairs for each IP right category separately. Herein we will give you some background information and deal with post-BREXIT issues related to European Union trade mark Registrations (“EUTM”), Registered Community Designs (“RCDs”), Unregistered Community Design Rights (“UCDs”) and granted Community Plant Variety Rights (“CPVRs”) (together, “EU-IP”). The second part will be directed at issues relating to Geographical Indications (“GIs”), eu. country code TopLevel Domains (“ccTLD”), data base rights, European Patents (“EPs”) and Supplementary Certificates (“SPCs”). Both parts of the article will be supplemented by a set of actions that we suggest can be taken to address the risks indicated by the probable future IP right regimes that we are facing and the risks associated with the uncertainties of a “deal or no-deal” scenario.SOME BACKGROUNDWith the UK’s public vote to leave the EU on June 26, 2016, one of the countless topics to be addressed in the BREXIT negotiations is: “What will become of this EU-IP post BREXIT”? Without any form of agreement between the EU and the UK in place after the Exit Date, EU law will no longer apply to the UK, and the European Court of Justice (“ECJ”) will not have jurisdiction over the UK as of this date. In this worst case scenario, EU-IP will simply cease to extend to the UK from one day to the next. IP right holders that had mainly or exclusively relied upon such EU-IP and made significant investments in this regard could now end up without any form of protection in the UK. Given the thriving activities of UK businesses in filing, for example, EUTMs (being the second highest number of filings in the EU), this is not only a concern for EU-IP holders in the mainland Member States, but also of particular interest for EU-IP holders in the UK.Agreed and not agreed (until everything is agreed) – Part 11.      Transition Period and Certain Common PrinciplesThe Draft Agreement was the first sign of significant progress in the negotiations between the EU and the UK. Certain sections of it provide for certain common principles that apply to most EU-IP. Other arrangements only apply to certain types of IP rights.First and foremost, as stipulated in Article 121 of the Draft Agreement, the negotiators have preliminarily agreed on a transition and implementation period that runs from March 30, 2019, to December 31, 2020 (“Transition Period”). According to Article 122 of the Draft Agreement, EU rights – including EU-IP – will extend to the UK during the Transition Period and shall:<ul><li>produce in respect of and in the UK the same legal effects as those that it produces within the Union and its Member States;</li><li>be interpreted and applied in accordance with the same methods and general principles as those applicable within the Union; and</li><li>be deemed to include the UK when making any reference to Member States in EU.</li></ul>The Draft Agreement also states that EU-IP granted by December 31, 2020, will also automatically be registered as a separate right in the UK (“UK Equivalent”). This applies to all registered rights – i.e., EUTM, RCDs and CPVRs. The UK Equivalent will have the same filing, renewal and priority dates as the original EU-IP.If an EU-IP is subject to an invalidation/revocation or nullity or cancellation proceeding that has been ongoing prior to the end of the Transition Period and such EU-IP is declared invalid/revoked or cancelled in such a proceeding (even after the end of the Transition Period), the UK Equivalent too will be held invalid/revoked at the same date. However, in accordance with Article 50 Sec. 3 of the Draft Agreement, the UK will have no obligation to issue such declaration where the grounds for invalidity/revocation or nullity or cancellation of the EU-IP do not apply in the UK.Another agreement that could be reached pertains to the exhaustion of IP rights, which is a principle common to most IP rights, but has found its specific expression in the EU in what is called the “Fortress Europe.” In principle, exhaustion in the EU applies, and an IP right is not infringed by its use, if the IP right, or a product applying the IP right, was put on the market in the European Economic Area (“EEA”) by the proprietor or with his consent. The Draft Agreement contemplates that IP rights so exhausted within the EU (including the UK, for the term of the Transition Period) will remain exhausted in the UK and the EU thereafter. Naturally, the Draft Agreement does not address exhaustion after the Transition Period. It is yet to be discussed which approach on exhaustion the UK will take after the Transition Period. If the UK decides on using a national exhaustion regime, it may be possible for UK IP rights to be used to prevent parallel imports from the EU into the UK. This topic is further discussed <a href="https://www.citma.org.uk/membership/brexit/exhaustion_rights">here</a>. In the UKGov News, it has been suggested, however, that the UK looks forward to “exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders”, and in this sense to discuss issues like exhaustion of IP rights. 2.     Trademark RightsIn addition to the above-stated principles that will apply to the registration of UK Equivalents, holders of EUTMs that are converted into UK Equivalent trademarks will further benefit, if applicable, from the seniority of a UK trademark that was claimed in the EUTM registration.A crucial point to highlight is that EUTM applications that were filed within the Transition Period and received a date of filing, but are still pending at its end, will not automatically be converted into UK Equivalents. Instead, the applicant will have a so-called “right of priority,” meaning the right to file for an identical copy of such EUTM application (i.e., identical mark and identical list of goods and services) in the UK within nine (9) months of the end of the Transition Period, and will then be granted the same filing date and priority as its corresponding EUTM application.Other issues to be aware of relate to: a.      genuine useUK Equivalent trademarks will not be liable to revocation on the ground that the corresponding EUTM was not used in the territory of the UK before expiry of the Transition Period. It remains unclear, however, when the non-use period will start to run after the end of the Transition Period. This effectively extends the so-called “grace period” of the UK Equivalent trademarks, meaning the period in which to commence use of the mark in the UK before the UK Equivalent trademark becomes vulnerable to cancellation for non-use. However, there is no such provision for the reciprocal grant of EUTMs used solely in the UK. Even though the EUIPO’s Q&A document published in January 2018 suggests that use of an EUTM in the UK qualifies as use in the EU at least as it relates to the period before the Exit Date, it has not found its way into the Draft Agreement. For businesses that have been operated in the UK exclusively before the Exit Date, there remains a risk that their EUTMs may be vulnerable to cancellation for non-use in the EU.  b.      reputationUntil expiry of the Transition Period, UK Equivalent trademarks will benefit from the reputation that the corresponding EUTM enjoys in the EU. Thereafter, reputation will be based on the use in the UK. c.       International Registrations with EU designationsThe UK also agreed to take measures to ensure that trademarks protected in the UK through an International Registration designating the EU via the Madrid System will continue to enjoy protection following the end of the Transition Period.  3.     Designs a.      Registered Community Designs (“RCDs”)The protection mechanisms provided under the Draft Agreement for RCDs are essentially the same as those for UK Equivalents in general (as described in Section 1) and UK Equivalent trademarks (as described in Section 2) above. Here, too, UK Equivalents will have the same filing and priority dates as their RCD counterparts, and RCD applications still pending at the end of the Transition Period must be filed again with the UK IPO within nine (9) months in order to enjoy such privilege.In addition, with its ratification of the Hague System on March 13, 2018, which took effect on June 13, 2018, the UK opened up another possibility for foreign companies and individuals to obtain design protection in the UK. Comparable to the Madrid System for international trademark registrations, the Hague Agreement allows applicants to register a design in any one of the 67 contracting countries through a single application via the World Intellectual Property Organization (“WIPO”). Previously, design protection in the UK via the Hague Agreement could be obtained by means of designating the EU only (which included the UK), but it will now be possible to designate the UK directly through the system. On the other hand, in the Draft Agreement, the UK agreed to take measures to ensure the protection of EU designations via the Hague System that were registered before the end of the Transition Period. b.     Unregistered Community Designs (“UCDs”)UCDs are designs that, from the date on which they were first made available to the public within the EU, are protected under the Council Regulation (EC) No. 6/2002. The UCD protection lasts for a period of three (3) years. The Draft Agreement provides that the holders of UCDs that were made available before the end of the Transition Period will benefit from a UK Equivalent for the remaining period of protection. However, the UK still has to provide for the respective mechanism, as the UK’s current unregistered design right legislation does not offer the same scope of protection as that provided under the EU regime. In the UKGov News the UK stated it will establish new schemes, which “will preserve the full scope of the UCDs in the UK”.4.      Community Plant Varity Rights (“CPVR”)UK Equivalents relating to CPVRs benefit from the same principals common to all registered EU-IP, as discussed in Section 1 above. Additionally, the term of the UK Equivalent shall be at least equal to the remaining period of protection under EU law. Comparable to the provisions on pending EUTM and RCD applications at the end of the Transition Period, CPVR applications will not automatically be converted into corresponding UK applications. The applicant will instead have an ad hoc right of priority, meaning the right to file an identical UK application that secures the priority of the CPVR application for the UK application for the purpose of determining distinctness, novelty and entitlement to the right of such a UK application. However, the period to file a priority saving application in the UK is reduced to six (6) months only.ACTIONS THAT CAN BE TAKEN NOWAlthough the UK’s Prime Minister, Theresa May, recently announced that the EU and the UK still want a deal in place by October 2018, the UK, at several points in negotiations, has threatened to leave the EU without a deal. And, indeed, the possibility remains that topics other than IP prevent the UK from signing the final draft of the Withdrawal Agreement. IP owners may seek comfort in the July 19, 2018, announcement of the Parliamentary Under-Secretary of State for Exiting the European Union, Robin Walker MP, that stated: “We have agreed to protect all existing EU trade marks, community registered designs and unregistered designs in the UK as we leave the EU. In place of those EU-level rights, 1.5 million new UK trade marks and registered designs will be granted automatically and for free.”However, IP owners are also advised to bear in mind when planning their future IP strategy that none of this is certain as of yet. Even though each portfolio provides for unique challenges and measures should be assessed on a case-by-case basis. There are a number of general actions that could be considered at this stage:   <ul><li>EUTM and RCD holders: </li><li>Review of Portfolio. Owners should review their portfolios for marks or designs that are protected solely by European or International Registrations with EU designation. With regard to important assets, thought could be given to filing a national UK application or an International Registration with UK designation for additional reassurance.</li><li>Dissimilar Protection. Likewise, if you hold protection under both the UK and the EU trademark regimes, you may want to make sure that the goods and services that your business offers, or will offer in the near future, are protected by both registrations equally – if this is not the case, you could consider filing a separate EUTM or UK trademark, as the case may be.</li><li>Existing UK trademarks. Owners of existing UK registrations are advised to consider a renewal of protection where necessary.  </li><li>New Filings. With regard to new filings for EUTMs or RCDs, important applications could be accompanied by a national UK application for additional reassurance.  </li><li>Pending EUTM Applications Subject to Oppositions. On the subject of pending EUTM applications that are subject to an opposition based on the earlier national right of countries remaining in the EU (i.e., trademark, company name, etc.), it may be advisable to push things forward, because, in order to profit from a UK Equivalent, the trademark must be registered at the end of the Transition Period. On the other hand, in relation to pending EUTM applications that are subject to an opposition based on an earlier UK right (e.g., by way of extending the cooling-off period), or pending UK trademark applications that are subject to an opposition based on an earlier EUTM, thought could be given to slowing down the opposition proceeding (e.g., by way of extending the cooling-off period). This is because, after the Exit Date or, respectively, the Transition Period at the latest, these earlier rights will likely not be a legal basis for an opposition against your application anymore.  </li><li>Sole Use of EUTMs in the UK. Owners of EUTMs that have been put to use exclusively, or almost exclusively, in the UK and are (or will soon be) subject to the use requirement may want to consider starting to use their rights more extensively in other EU countries or to register new national trademarks in important countries of the EU in order to benefit from a new grace period.</li></ul><ul><li>Breeders: With regard to applications not yet filed or likely not to be granted until December 31, 2020, breeders can expect to file applications in the EU and in the UK. Since the latter application will be required immediately following the Transition Period and will likely go hand in hand with double the paperwork and two lots of Distinctness, Uniformity, Stability (“DUS”) examinations, timely preparation will be an advantage.</li></ul>

IP Protection Post BREXIT Part 1: A Right-by-Right Analysis

IP Protection Post BREXIT Part 1: A Right-by-Right Analysis

On July 5, 2018, the European Parliament rejected the proposed amendments to the new Copyright Directive: Article 11, which attempts to protect press publications from impermissible digital use, and Article 13, which attempts to protect online content from impermissible use by online content-sharing service providers. While these proposals are mostly well intentioned to secure creators of content a fair remuneration for the content’s online use, they are less likely to incentivize Internet giants like Google to pay for content and more likely to put smaller Internet companies and startups out of business.Background – Modernizing Copyrights for the EU’s Digital Single MarketIn May 2015, the EU Commission (the “Commission”) launched a strategy for the creation of a Digital Single Market (DSM) in the EU. On September 14, 2016, as part of this strategy, the Commission published a proposal for a new Copyright Directive aimed at modernizing the existing copyright rules in the EU to meet the challenges of digitalization. On June 20, 2018, the Legal Affairs Committee of the European Parliament (EP) adopted a proposal introducing material amendments to the Commission’s proposed directive (<a href="http://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/JURI/DV/2018/06-20/Compromiseamendments_CopyrightDirective_EN.pdf">the so called Axel Voss proposal</a>). Last week the EP rejected this amendment proposal and sent it back to the committee for re-discussion and revision (see <a href="https://twitter.com/Senficon/status/1014814460488413185">Julia Reda’s Tweet</a>) sharing the concerns expressed by many stakeholders with regard to the proposed Articles 11 and 13 in particular.The EP is expected to vote on a revised version of the amendment proposal in September 2018 at the earliest. If it approves the revised version, the policymakers – the EP, the Council of the European Union, and the Commission – will enter into inter-institutional negotiations to reach a compromise on their different positions. The adaptation of such a final compromise for a new Copyright Directive is expected at the end of 2018 or beginning of 2019 at the earliest. The EU Member States will then have a transposition period of at least 12 months (as proposed by the Commission) or 24 months (as proposed by the Council) to implement the new Copyright Directive into national law.Confronting the ControversiesThe most controversial provisions discussed among the three EU institutions and the different stakeholders in the industries are (i) the introduction of an exclusive neighboring right for e-publishers requiring online service providers (such as online news aggregators and search engines) to obtain (and pay for) the e-publisher consents to copy and display snippets or small extracts of their news content that may otherwise not be subject to copyright protection (Art. #11) and (ii) the introduction of obligations for online platform providers that host, optimize, and give access to the public to user-uploaded content, (called online content sharing service providers) to license, from the respective right owners, copyright-protected works contained in the user-uploaded content and to take measures preventing copyright-infringing content from being available on their platforms (Art. #13).Both Article 11 and Article 13, target prominent online service providers (such as Google News, Google Search, and YouTube) that (i) generate advertising revenues on their websites and apps by either displaying to their users snippets of news content linking to the respective e-publications or (ii) host and display to the public content uploaded by their users including music, films, and photos. The problem with such user-generated content is that some users upload copyright protected works without the owners’ consents and thereby infringe their copyrights. News publishers and entertainment companies (such as music labels, music publishers and film companies) have been arguing that these online service providers make profits by exploiting their content without their permission and without paying the creators of such content a fair remuneration. Both provisions aim to oblige these providers to obtain licenses from the copyright owners for these forms of use of their content and to pay them a fair and appropriate license fee.Article 11Germany and Spain introduced similar protection rights for press publishers some years ago without achieving the intended results. In Spain, Google ceased its Google News service altogether to avoid paying the compulsory license fee. In Germany, Google managed to cause all news publishers to grant Google News a zero price license while the responsible collecting society, VG Media, only collected EUR 715,000 from 2014 to 2017 from other online service providers for the more than 100 news publishers it represents while creating legal costs of EUR 7.6 million for litigation in this matter during the same time period. A <a href="https://www.asktheeu.org/en/request/4776/response/15356/attach/6/Doc1.pdf">study</a> ordered by the Commission but never published also indicates that the proposed neighbouring right is not an appropriate instrument to increase the revenues of the news publishers. This study also suggests that most European news publishers running on advertising revenue rather than as paid news services actually benefit from the user traffic they receive through online aggregator websites (which is the reason why most news publishers in Europe do not wall their news content against search engines and news aggregators though this is technically possible). Given this history, it seems very questionable that Article 11 will cause Internet giants such as Google to pay news publishers for news snippets. Instruments incentivising online service providers to collaborate with news publishers in marketing their news content may be more beneficial for them.Article 13According to the rejected proposal, online-content sharing service providers perform copyright-relevant acts of use of copyright-protected works contained in user-uploaded content (i.e., performs an act of communication to the public) requiring these providers to obtain the copyright owners’ authorization under EU copyright law (see Art. #3 of 2001/29/EC Copyright Directive). Therefore, these providers are obliged to “conclude fair and appropriate licensing agreements with the right holders” of the protected works. The rejected proposal takes the position that these online content-sharing platforms are not subject to the “safe harbor” otherwise applies to host provider platforms under Article 14 of the e-Commerce Directive as long as they are not aware of the infringing content. Providers that do not have a license agreement with the copyright owners would be obliged to prevent their users from uploading any content that contains unlicensed copyrighted third party works by taking “appropriate and proportionate measures.” Though this does not explicitly include an obligation to install and operate automated upload filters, employing such upload filters would be the only feasible solution to comply with this obligation given the vast number of content files uploaded on these platforms daily. Internet giants such as Google (the owner of YouTube) have already invested millions of Euros in deploying such filtering systems. For them it will be rather easy to optimize what they already have in place to fulfil such obligation. It is therefore very questionable whether Article 13 would urge these providers to enter into any license agreements with music and film companies for user uploaded content and to pay them a license fee going beyond the ad revenue share monetization model some of them currently offer the right owners for displayed user generated content that they claim is their property. But will the European online service providers hosting user-generated content be able to make such investments for upload filter systems? And what about start-ups with business models in this area? There may be many good intentions behind this proposal, but it may backfire to the European creative and technology sectors, weaken competitiveness, and leave artists and other creators of content as well as consumers in Europe with less choice and diversity.

DocuSign, Inc

enercity AG

SoftBank Vision Fund

TDK and its subsidiary EPCOS

Tele Columbus

United Internet/1&1

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Kristina has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus o

Kristina Ehle

Kristina Ehle has more than 20 years of experience advising clients across many industries, including the software, internet, mobility, media, and consumer electronics industries, with a particular focus on technology-driven and IP-heavy transactions.

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European Parliament Voted 318 to 278 Against the Amendment Proposal for a Copyright Directive for the Digital Single Market

California Supreme Court Clarifies Standards for Whistleblower Claims Under California Labor Code Section 1102.5

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On July 5, 2018, the European Parliament rejected the proposed amendments to the new Copyright Directive: Article 11, which attempts to protect press publicatio

European Parliament Voted 318 to 278 Against the Amendment Proposal for a Copyright Directive for the Digital Single Market

On June 6, 2018, the Commercial Court of Vienna decided in favor of private broadcaster Puls4 and determined that YouTube qualified as directly liable for copyright infringing video uploads of its users. If maintained, the decision would obligate YouTube (and indirectly other major online platforms) to perform a content check upon upload instead of only removing copyright infringing content upon notification (“notice-and-takedown”). Austrian case law is not binding for other EU member states, but the Commercial Court’s judgment denying YouTube the application of the Host Provider Privilege under EU law might still encourage similar decisions based on the same line of argument.Read our <a href="https://protect-us.mimecast.com/s/Cy6BC73WYMuw2wE9tBccCy">client alert</a>.

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Co-Chair Global Film & Entertainment Practice

Christiane Stuetzle is a partner in Morrison Foerster's German office in Berlin and Co-Chair of the firm's Global Film & Entertainment Practice.

Christiane Stuetzle

Christiane Stuetzle is a partner of Morrison Foerster (International) LLP, based in the Berlin office. She is the Co-Chair of the Global Film & Entertainment Practice of Morrison & Foerster. She is a Certified Specialist for Copyright and Media Law & Arbitrator on the International Arbitration Panel of the IFTA (Independent Film & Television Alliance).

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Partner and Co-Chair Global Media

Christoph has more than 25 years of experience as an M&A and regulatory lawyer in the telecommunications, media, and technology industries. He focuses particularly on complex transactions and strategi

Christoph Wagner

Dr. Christoph Wagner is a partner in the Berlin office and Co-Chair of the firm’s global media group. Dr. Wagner is a leading TMT, M&A and regulatory lawyer, with a particular focus on transactions and on strategic regulatory advice in the media and communications industries.

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Copyrights, Internet: YouTube Decision May Obligate Content Check on Upload

The Madden Saga Continues: On Remand, Madden Survives Summary Judgment and District Court Certifies Class

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On June 6, 2018, the Commercial Court of Vienna decided in favor of private broadcaster Puls4 and determined that YouTube qualified as directly liable for copyr

Copyrights, Internet: YouTube Decision May Obligate Content Check on Upload

The Unified Patent Court (“UPC”) will be a Court common to 25 Member States of the European Union (“EU”) (currently including the UK) and thus be part of their judicial system.  The Court will have exclusive jurisdiction over traditional European patents (a bundle of national rights) to the extent patentees have not opted them out from the new system and so called “European patents with unitary effect,” a new type of patent to be issued by the European Patent Office upon request of the applicant that will confer protection over the entire territory of the participating European nations (currently Spain and Poland refuse to sign up) as one single right (for more details on the new system click <a href="https://www.unified-patent-court.org/">here</a>).  The UPC has always been regarded as a truly pro-European initiative to enhance the EU’s competitive advantage and designed to enable innovators to defend their rights across the EU in providing a less expensive and time-consuming way than current present procedure, in which patents have to be registered and enforced in individual EU countries.  On the other hand, the UPC raises the risk of centralised revocation of a patent, which could have serious implications on high value patents.Now, on Thursday, April 26, 2018, with BREXIT being less than a year away, the UK’s Intellectual Property Minister announced that the United Kingdom had ratified the UPC Agreement (“UPCA”), which is an important step towards the realisation of the new envisaged European patent system and paves the way for negotiations to ensure the UK’s continued participation in the UPC following BREXIT.  The declaration stating that the UK agrees to be bound by the UPCA and the UPC’s Protocol Privileges and Immunities (“PPI”) has been signed by the UK’s Foreign Minister and deposited with the EU Council’s General Secretariat in accordance with Article 84 UPC and Article 17 PPC (<a href="https://www.gov.uk/government/news/uk-ratifies-the-unified-patent-court-agreement">press release of UK Government</a>).  The ratification has meanwhile been confirmed on the EU’s status webpages for the UPCA (<a href="https://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2013001">here</a>) and the PPI (<a href="http://www.consilium.europa.eu/en/documents-publications/treaties-agreements/agreement/?id=2016047">here</a>).  This step is paramount, as, for the UPC to take effect, 13 EU Member States (including France, UK, and Germany) must pass national legislation to ratify the UPCA.  As of now, the UK, France, and 14 other EU countries have done so.  Germany, however, which is hosting one section of the central division of the UPC in Munich, has still to ratify and deposit its ratification instrument before the UPC can come into force. While some commentators struggle with how membership of the UPC is compatible with the stated BREXIT aim of “taking back control”, when essentially signing up to a European patent litigation system does exactly the opposite, others emphasise that the UPC is nothing but a logical evolvement of the European Patent Convention, an international patent system that (despite its name) is not exclusive to EU Member States, and that the UPC may be open to non-EU countries, too. Anyhow, first there is a short-term obstacle for the UK to join the UPC to be overcome.  Ironically, the ratification of the UPCA by Germany, one of the most pro-EU countries and a key driver behind the UPC (at least as far as the German patent professionals community is concerned) is currently on hold due to a constitutional complaint (the “Complaint”) filed at the German Federal Constitutional Court (Bundesverfassungsgericht) (“FCC”).  The Complaint has been covered <a href="https://www.linkedin.com/pulse/unified-patent-courtunexpected-roadblocks-ahead-germany-sch%C3%B6nig/">here</a> and received extensive third-party assessments <a href="http://patentblog.kluweriplaw.com/2018/01/25/eplit-brak-grur-publish-view-german-complaint-upca-ratification/">here</a>.  In essence, what is being challenged by the Complaint is, inter alia, (1) a violation of Article 4 subsection 3 and Article 19 subsection 1 of the Treaty on European Union and Article 267 of the Treaty on the Functioning of the European Union, as regards to the creation of an international court within the legal system of the EU; (2) non-compliance with Article 38 subsection 1, sentence 1, Article 20 subsections 1 and 2 in conjunction with Article 79 subsection 3 of the German Constitution (“GC”), as regards the qualified majority requirement under German constitutional law to sign up to the UPC; and (3) non-compliance with the rule of law principle as regards to an insufficient legal status of the UPC judges and the UPC rules of procedure—again, the Complainant is referring to Article 38 subsection 1, sentence 1, Article 20 subsections 1 and 2 in conjunction with Article 79 subsection 3 of the GC.  Details on the Complaint and the complainant can be found <a href="http://www.stjerna.de/cc/?lang=en">here</a>.Time Is of the EssenceWhile the British government repeatedly expressed their intention to ratify the UPCA despite BREXIT, the UPCA itself stipulates (at least if read literally) that only EU Member States may participate in the UPC.  But it appears that some BREXITEERS believe that the UPC is an international rather than an EU project and that in the future there may be even (other) non-EU states that may be able to join too.  Given the codified jurisdiction of the European Court of Justice over the UPC (more info on that dimension can be found <a href="http://curia.europa.eu/juris/document/document.jsf?docid=80233&doclang=EN">here</a>), we can already see all International Law experts rubbing their hands on that one.All sarcasm aside, the now effectuated ratification may be crucial for the UK’s participation in the UPC system, but it may be worth nothing if the UPC fails to enter into force before the UK is expected to leave the EU—i.e., on March 29, 2019.  Even though the Complaint has been published in the list of cases to be heard by the FCC this year (<a href="http://www.bundesverfassungsgericht.de/DE/Verfahren/Jahresvorausschau/vs_2018/vorausschau_2018.html">here</a>), timing could be an issue for the UK’s participation in the UPC.  The UPCA will enter into force on the first day of the fourth month after receipt of the German ratification documents.  Therefore, in order to enter into force in good time (i.e., pre-BREXIT), the German approval must be obtained by the end of November of 2018 at the latest.  It is, however, completely open as to when a decision of the FCC can be expected.  The Court sought the opinions of 27 institutions, including the constitutional bodies, which were received by the end of January (see <a href="http://patentblog.kluweriplaw.com/2018/01/25/eplit-brak-grur-publish-view-german-complaint-upca-ratification/">here</a>).  Some of them are rather extensive.  Furthermore, it is speculated as to whether the complainant has gotten another opportunity to respond, for which the Court would usually grant a three-month deadline.  Only if the FCC will dismiss the Complaint as inadmissible, the German Federal President (Bundespräsident) will sign the UPCA and the PPI, and the UPC will come into force in time for the UK.  The earliest such a dismissal can be expected is mid-May of 2018.  If the Complaint is admitted, however, the case will be decided on its merits, which will be a longer process.  In this case, it cannot be ruled out that the Court will come to a decision as late as late autumn 2018 or impose conditions to remedy constitutional concerns on the German Federal Government (Bundesregierung), which could lead to further delays.It remains to be seen whether timing will prevent the UK from participating in the UPC.    ****

Turn On, Tune In, and Drop Out? BREXETING UK Signs up for the UPC, Whilst Germany Is Lingering to Ratify

The Unified Patent Court (“UPC”) will be a Court common to 25 Member States of the European Union (“EU”) (currently including the UK) and thus be part of their 

Turn On, Tune In, and Drop Out?  BREXETING UK Signs up for the UPC, Whilst Germany Is Lingering to Ratify

SummaryThe European Union is finally making significant progress in implementing the first pan-EU trade secrets protection rules. The EU’s largest country, Germany, has published its long-awaited draft bill setting out how it proposes to implement trade secrets protection.The <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/blt5cfcc7821cd50915/627317c14886af2aa2be1106/160527harmonizationtradesecrets.pdf">EU directive on trade secrets protection</a> was agreed to in 2016 in the same month as the United States adopted its <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltaf19da9aae7587ac/627317c14d9f892971290243/160511defendtradesecretsact.pdf">Defend Trade Secrets Act</a>. EU Member States have had two years from adoption to implement the Trade Secrets Directive (TSD) into their national laws. While the TSD generally provides for uniform protection, Member States can implement higher standards, so all eyes have been on the German government to see how it will approach the task of conversion of the TSD rules and principles into national law.Current DevelopmentsAfter a prior version of the German draft bill on the implementation of the TSD was <a href="https://netzpolitik.org/wp-upload/2018/04/entwurf-geschgehg.pdf">leaked</a>, the German Federal Ministry of Justice and Consumer Protection (Bundesministerium für Justiz und Verbraucherschutz ‘BMJV’), on April 19, 2018, published its draft bill (Referentenentwurf) of the proposed German act on the implementation of Directive (EU) 2016/943 for the protection of trade secrets against unlawful acquisition, use, and disclosure (Gesetz zum Schutz von Geschäftsgeheimnissen, GeschGehG).  While other Member States of the EU (e.g., <a href="http://ipkitten.blogspot.co.uk/2018/04/the-danish-act-on-trade-secrets-has-now.html">Denmark</a> and Sweden) have already incorporated the TSD into their national laws, and the UK (despite Brexit) is currently analysing feedback on its <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/682184/Consultation_Trade_Secrets_Directive.pdf">Consultation on draft regulations concerning trade secrets</a>, Germany was rather slow in providing specific information on a potential transposition of the TSD into German law.  In view of the limited remaining time for the implementation (due June 9, 2018), the publication of the German draft bill is overdue and should be provided to companies and trade secrets holders, which will need to adjust their businesses and implement or adjust their trade secrets protection strategies in order to benefit from the TSD.In summary, the German draft bill widely implements the TSD “one-to-one” without making much use of the Member States’ discretionary leeway that the TSD permitted. The most important consequences for companies and other trade secrets holders relate to:(1)   the new, more objective definition of trade secrets, requiring “reasonable steps” to keep them secret;(2)   new requirements to prevent reverse-engineering (to the extent legally possible);(3)   potential restrictions on injunctive relief; and(4)   the enhanced protection of trade secrets during litigation.The draft bill is subject to ongoing public consultation, and it is likely that further changes will be made to accommodate all of the stakeholders’ requests.  We will keep you updated on developments.1.       Reasonable steps to protect trade secretsUnder both the TSD and the draft bill, trade secrets holders must take “reasonable steps” to keep their information secret.  Previously, German law adopted a rather subjective view and placed emphasis on the will of the holder of trade secrets to keep the information secret, and on whether such will was apparent from the circumstances.  Now, companies holding trade secrets will have to implement reasonable steps in order to benefit from the new rights provided for trade secrets holders.  As the authors of the Referentenentwurf pointed out, “reasonable steps” are an objective criterion.  In this regard, trade secrets holders seeking to litigate their trade secrets bear the burden of proof.  Reasonable steps include (i) physical, (ii) organisational, and (iii) contractual measures.  The BMJV noted that the reasonableness may depend on factors such as the value of the trade secrets to be protected, the underlying R&D costs, thier importance for the trade secret holder, comparable measures implemented in the company, the way of marking the information as confidential, and existing agreements with employees and business partners of the company.  2.       Reverse-engineeringUnder the heading “Permitted Use,” the Referentenentwurf states that reverse-engineering is a permitted means for obtaining trade secrets.  Despite its two subcategories, the German draft bill seems to be a one-to-one implementation of the respective provision of the TSD.  Similar to the TSD, the German draft bill refers to contractual possibilities to protect products against reverse-engineering.  To the extent legally possible, companies are advised to start reviewing their existing agreements (including, e.g., cooperation, R&D, and know-how agreements), and to amend them if necessary.  3.       Restriction of injunctive relief The claim for injunctive relief provided in the Referentenentwurf is subject to a proportionality test.  In certain cases, pecuniary compensation shall suffice as a remedy.  This represents a doctrinal change, as previously an injunction was the default remedy.  It remains to be seen how German courts will make use of these provisions, and whether this means a deviation from the German system of a default injunction as a result of trade secrets misappropriation, with little to no wiggle room for the infringer.  4.       Protection of trade secrets during litigationThe Referentenentwurf provides important improvements for trade secrets holders seeking to litigate misappropriation of their trade secrets in Germany.  Herein lies the true value of the draft bill.  Currently, German procedural law provides little to no protection to ensure the secrecy of information in legal proceedings.  For trade secrets, the saying often was: “Lose the trade secret, or lose the trial.”Now, most importantly, parties to the litigation, as well as legal representatives, witnesses, experts, and other persons participating in the trade secrets litigations, are legally obliged to keep information secret which has been classified by the competent court as a trade secret.  This secrecy obligation continues even after the end of the litigation.  Violation of this obligation can trigger a fine in the amount of €1,000.  Following heavy criticism, it is likely that the fine will be increased significantly during the legislative process.The draft bill provides for a certain procedure that can be initiated by a plaintiff in parallel to filing a complaint for trade secrets misappropriation.  When filing a complaint, a plaintiff may provide a redacted copy of the complaint, together with a motion requesting service of the redacted complaint only.  To benefit from the trade secrets protection, a trade secrets holder has only to provide credible evidence (Glaubhaftmachung), something which can be provided in the form of an affidavit under German law.  A competent court will then decide on the request per a court order (Beschluss), which can be rendered without a prior hearing in order to not jeopardise the secrecy of the (alleged) trade secrets.  If the request of the plaintiff is successful, the defendant can attack the court order, together with the judgment, following the trial (on the appeal level) only.  This is to make sure that there is no delay in the litigation.  If, however, the court does not intend to grant the plaintiff’s motion to protect its trade secrets, the court will provide the plaintiff with the reasons and request further information from the plaintiff as to why the alleged trade secrets should be protected.  In the case of a subsequent rejection by the court, the trade secrets holder can file an immediate appeal (sofortige Beschwerde).  We understand that this procedure can be repeated with every court brief filed during litigation if there are new trade secrets that need to be protected as well.  While protective measures may be requested by the trade secrets holder, the competent court is free to decide about additional appropriate measures ex officio at its own discretion.  Such measures include, e.g., the exclusion of the public from oral hearings and further restrictions on file inspection requests.While this procedure is certainly a major plus for trade secrets holders, there is one restriction stemming from the TSD which Germany had to, and did, implement in the draft bill.  At least one natural person and one legal or other representative of the defendant in the trade secrets litigation must have access to both the unredacted documents and the oral hearings.  This exception constitutes a certain factual risk for the trade secrets holder, since the disclosure of a trade secret to the (alleged) infringer – often a competitor – may lead to further disclosure inside the infringer’s company and ultimately lead to the competitive advantage of the infringer.  When deciding about a protective measure, German courts have to consider the principle of proportionality and strike a fair balance between the infringer’s right to a fair trial and effective judicial protection, on the one hand, and the trade secrets holder’s interest in keeping its trade secrets. on the other hand.  Since due process of law is an important principle under German law, we expect that the exact scope of the procedure will be further specified by future case law.  In this respect, the draft bill states that trade secrets chambers (Geschäftsgeheimniskammern) of the regional courts (Landgerichte) shall have exclusive jurisdiction over trade secrets disputes (Geschäftsgeheimnisstreitsachen).  The draft bill provides for the possibility to transfer judicial power from one state to another.  It remains to be seen whether German states will make use of this possibility.  The concentration of know-how regarding a specific type of litigation is already known from IP litigation (e.g., patent disputes are mainly litigated in Düsseldorf, Mannheim, and Munich), and could further improve trade secrets litigation in Germany.

German draft bill on the implementation of the EU Trade Secrets Directive

Summary
The European Union is finally making significant progress in implementing the first pan-EU trade secrets protection rules. The EU’s largest country, Ger

German draft bill on the implementation of the EU Trade Secrets Directive

After the biggest challenge yet to the Patent and Trademark Office’s popular inter partes review proceedings, the name of the game is largely “same old” for today’s Supreme Court decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712. The Court rejected the argument that the PTO’s post-grant review of patents violates the Constitution. In the separate SAS Institute Inc. v. Iancu decision (the subject of a forthcoming alert) the Court reversed the PTO’s practice of adjudicating some, but not all, claims challenged by an inter partes review petitioner.Read our <a href="https://protect-us.mimecast.com/s/irqpClYMX0hB52AMfDWrsj">client alert</a>.

Acacia Media Technologies Corp. v. Comcast Corp., et al.

Arch Development Corp. v. Genentech, Inc.

Phigenix, Inc. v. Genentech, Inc.

Phigenix, Inc. v. Genentech, Inc. and ImmunoGen, Inc. 

Interval Licensing v. Yahoo! et al.

Media Queue v. Netflix et al.

Bronshtein v. Roser

Celltech v. Genentech

Chang v. Luciw

Institut Pasteur v. Chiron

Chiron Corporation v. Genentech

Gregory v. Tsui

Novartis v. Institut Pasteur

Ruelle v. Scarlato

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Senior Counsel

Matt has over two decades of experience representing clients in intellectual property cases. He has represented numerous clients in the pharmaceutical, biotech and medical device industries, in cases 