IPPro Patents Issue 049

ISSUE049 21 Feb 2018 

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Iancu at the USPTO 

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Lead News Story 

Andrei Iancu confirmed as USPTO director 

Andrei Iancu has been confirmed as the new 

undersecretary of commerce for intellectual 

property and director of the US Patent and 

Trademark Office (USPTO) by the US Senate. 

Iancu, who previously served as managing 

partner of law firm Irell & Manella, was 

nominated by US President Donald Trump in 

August last year. 

His practice at Irell & Manella focused on 

IP litigation, prosecution, due diligence 

and licensing. 

He has represented clients across the 

technology spectrum, including those 

associated with medical devices, genetic 

testing, therapeutics, the internet, TV 

broadcasting, video game systems and 

computer peripherals. 

Prior to law school, Iancu was an engineer at 

Hughes Aircraft. 

Iancu replaces Michelle Lee as director of the 

USPTO, who resigned from the role in June 

last year. 

Lee was appointed to lead the USPTO in 

2014, but her position came under threat with 

the election of Trump. 

For three months after Trump’s inauguration 

it had been unclear whether Lee would 

be replaced, despite an outcry of industry 

support for Lee. 

Associate solicitor Joseph Matal took on the 

role as acting undersecretary of commerce 

for IP and director of the USPTO following 

Lee’s departure. 

3 IPPro Patents www.ippropatents.com

Contents 

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Published by Black Knight Media Ltd 

Copyright © 2018 All rights reserved 

Patent Approaches 

Craig Thomson of HGF discusses 

innovation in emerging fields such as 

bacteriophage therapeutics 

p8 

Innovation Analysis 

Jeffrey Stone of Barnes & Thornburg explains 

how patent counsel can become “innovation 

stimulators” to enhance their work 

p12 

Pacific Partnership 

As US President Donald Trump threatens to 

negotiate the TPP, the knock-on effect for IP 

rights is becoming more apparent 

p17 

Value Analysis 

Cindy Ahn of Longford Capital explains how 

general counsels of IP-centric companies 

can maximise value and innovation 

p10 

European Patents 

Innovators in advanced materials can face 

an uphill struggle to get suitable patent 

protection at the EPO 

p15 

Case Report 

Sachin Sinha of Concur IP provides an 

overview of TCL v Ericsson and what it 

means for FRAND rate setting 

p20 


News Round-Up 

Uber Waymo litigation ends 

“To be clear, while we do not believe that any 

trade secrets made their way from Waymo to 

Uber and Waymo have reached a settlement 

in their trade secret dispute after nearly a year 

of litigation. 

Uber, nor do we believe that Uber has used 

any of Waymo’s proprietary information in 

its self-driving technology, we are taking 

Waymo, Alphabet’s self-driving car 

steps with Waymo to ensure our LiDAR and 

software represents just our good work.” 

company, sued Uber for the theft of trade 

secrets and intellectual property in February PatSnap joins WIPO ASPI programme 

2017, accusing the ride hailing service of 

taking and using “key parts of Waymo’s selfdriving 

Research and development analytics 

technology”. 

company PatSnap has joined the World 

Intellectual Property Organisation’s (WIPO) 

According to Waymo, Otto founder Anthony 

Levandowski, who previously worked at 

Access to Specialised Patent Information 

(ASPI) programme. 

Waymo and later worked at Uber, had stolen 

more than 14,000 highly confidential design 

files for various hardware systems, including 

Light Detection and Ranging (LiDAR) sensor 

technology, from Waymo. 

The ASPI programme is designed to support 

innovation in developing countries by offering 

free or low-cost access to sophisticated tools 

and services for retrieving and analysing 

patent data. 

In acquiring Otto, Uber had allegedly acquired 

this stolen technology. 

PatSnap’s addition to the programme will 

provide eligible patent offices, academic 

Under the settlement, Waymo will receive institutions, and research institutions 

$245 million payment from Uber. 

with free or low-cost access to its R&D 

analytics platform. 

Uber CEO Dara Khosrowshahi said that 

he wanted to acknowledge and correct 

“mistakes of the past”. 

Jeffrey Tiong, CEO of PatSnap, commented: 

“WIPO’s ASPI programme plays a crucial role 

in providing equal opportunities for innovation 

“To our friends at Alphabet: we are partners, across the globe, enabling some of the world’s 

you are an important investor in Uber, and we 

share a deep belief in the power of technology 

to change people’s lives for the better.” 

He added: “Of course, we are also competitors. 

And while we won’t agree on everything going 

forward, we agree that Uber’s acquisition of Otto 

could and should have been handled differently.” 

brightest minds to research and pursue their 

new ideas regardless of their background or 

socio-economic status.” 

He said: “Open innovation is a fundamental 

part of the PatSnap philosophy. In 2017, we 

launched PatSnap Academy to open the 

floodgates of innovation, by providing those 

Khosrowshahi continued: “There is no 

with no knowledge of IP with a free platform to 

learn how to protect and pursue their ideas.” 

question that self-driving technology is crucial 

to the future of transportation—a future in “The ASPI programme ties in perfectly with 

which Uber intends to play an important role. 

Through that lens, the acquisition of Otto 

made good business sense.” 

our ethos, and we hope that through this 

partnership we can provide the necessary 

insight that can help to bring a largely 

untapped ocean of new ideas and inventions 

“But the prospect that a couple of Waymo to the global marketplace.” 

employees may have inappropriately solicited 

others to join Otto, and that they may have 

potentially left with Google files in their 

possession, in retrospect, raised some hard 

questions,” he said. 

Yo Takagi, assistant director general of 

WIPO, added: “WIPO is pleased to welcome 

PatSnap as a partner in the ASPI programme 

in making available sophisticated patent 

search and analysis tools for free or at low 

cost to institutions in least developed and 

other developing countries.” 

“PatSnap joins seven other leading patent 

database service providers in providing 

researchers, innovators, and entrepreneurs 

in developing countries with critical insights 

into emerging trends in a wide range of 

technologies and industries.” 

“This contributes to ASPI’s ultimate goal of 

encouraging innovation.” 

Anaqua partners with Ceva Santé Animale 

Animal healthcare company Ceva Santé 

Animale has chosen Anaqua to manage its 

intellectual property portfolio. 

The partnership will see Anaqua manage 

Ceva’s portfolio of patents, inventions, 

trademarks and awards. 

Ceva has 12 research and development 

centres and a growing IP portfolio. 

Bob Romeo, CEO of Anaqua, commented: 

“With Anaqua’s unified IP management 

software, Ceva will be able to better 

manage the innovation process and more 

easily track the status of their valuable IP 

assets worldwide.” 

“Ceva has a truly global network of R&D 

teams who work together to keep shifting the 

boundaries of science, and we are looking 

forward to supporting their IP and innovation.” 

AQUA to manage Nokia patent 

portfolio sale 

AQUA Licensing has been selected to 

manage the sale of a second patent portfolio, 

including patents developed by Alcatel- 

Lucent/Bell Labs, Nokia Technologies and 

Nokia Networks. 

The new telecommunications portfolio 

offering comprises 557 patent families. It is 

made up of former Alcatel-Lucent patents, 

which total around 83 percent of the assets, 

including patents from the former AT&T 

Bell Labs. 


News Round-Up 

Approximately 10 percent of the patent 

families originated from the former devices 

and services business of Nokia. 

Though the business was acquired 

by Microsoft in 2014, Nokia retained 

the intellectual property in its Nokia 

Technologies business. 

The other 7 percent of the patent families 

originated from Nokia Networks, previously 

Nokia Siemens Networks. 

The second portfolio covers seven technology 

sectors, including cellular access and mobile 

core, components and devices, fixed and IP 

networking, multimedia and imaging, security, 

services and applications, and short-range 

radios and home networking. 

The sale follows from the sale of the first 

telecommunications portfolio offering, 

made in August last year via AQUA 

Licensing. The previous portfolio consisted 

of 4,260 patent families. 

Ilkka Rahnasto, head of patent business 

at Nokia, said: “As we continue to optimise 

our own patent portfolio, we are pleased that 

AQUA will make a further set of former Nokia 

patents available to operating companies and 

startups, enabling them to obtain strategic or 

defensive IP advantage.” 

“We believe AQUA has an innovative approach 

and we are encouraged by their early success 

with the first offering.” 

Mark McMillan, managing director of 

AQUA Licensing, added: “We’re extremely 

pleased to be working with Nokia again on 

this next portfolio.” 

“The first former Nokia portfolio offered through 

us back in August generated a great deal of 

interest, and we’re confident that the superior 

assets in this second Nokia portfolio will offer 

buyers an exceptional opportunity to obtain 

significant value and defensive enforcement 

advantages at a reasonable price.” 

The portfolio is being made available for cash 

purchase, in whole or in part, on a first-come, 

first-served basis. 

Trio of Australian firms combine 

Australian intellectual property law firms 

Fisher Adams Kelly Callinans, Cullens and 

Spruson & Ferguson will merge under the 

Spruson & Ferguson brand as of April 2018. 

The merged entity will cover all aspects 

of IP law, including patents, trademarks 

and designs. 

businesses have the capability, resources 

and systems to deliver the highest quality 

service to clients and provide strong 

career paths for our people.” 

He added: “Through this merger, we 

expect significant benefits will flow to 

the business, its clients and people, with 

synergies in operations, access to an 

It will employ a team of more than 400 even greater talent base and integration 

staff, including 152 IP professionals with Spruson & Ferguson’s Asia Pacific 

across its 10 offices in Bangkok, Beijing, service offering.” 

Brisbane, Hong Kong, Jakarta, Kuala 

Lumpur, Melbourne, Shanghai, Singapore 

and Sydney. 

Tracey Berger, managing director Sydney/ 

Melbourne at Spruson & Ferguson, said: 

“We are delighted to join with Fisher Adams 

All three firms are members of IP services 

group IPH Limited. 

Kelly Callinans and Cullens to provide an 

even greater pool of IP talent to our local 

and international clients.” 

Andrew Blattman, managing director 

and CEO of IPH Limited, commented: “Our combined firm will draw on the 

“This announcement today reinforces strengths of all three businesses to provide 

our market-leading approach and our clients with an enhanced top-tier IP 

commitment to ensuring our group service across the Asia Pacific region.” 

BPTO extends USPTO highway including the European Patent Office, the 

State Intellectual Property Office of China, 

The Brazilian Patent and Trademark Office and the Japan Patent Office. 

(BPTO) has extended its Patent Prosecution 

Highway (PPH) agreement with the US Patent The BPTO is also a part of a PPH programme 

and Trademark Office. 

that encompasses the Latin American 

PROSUR group, including Argentina, Chile, 

According to a BPTO bulletin, the agreement, Colombia, Costa Rica, Ecuador, Paraguay, 

which had a deadline of 31 January 2018, has Peru and Uruguay. 

been extended to 10 May 2018. 

According to Brazilian law firm, Di Blasi 

PPH agreements allow patent offices to Parente & Associados, the implementation 

request fast-track examination in a partner of such agreements is part of the BPTO’s 

country after a patent has already been strategy to reduce its backlog. 

granted in the home country. 

In January, the BPTO implemented a pilot 

Brazil has entered into a range of PPH programme aimed at tackling the backlog of 

agreements with various patent offices, patent applications at the office. 



Emerging innovation 

Craig Thomson of HGF discusses innovation in emerging fields such as 

bacteriophage therapeutics, and the challenges of protection in these areas 

Biotechnological approaches used today in medicine have been 

shaped by explosions of research in many emerging fields. Innovating 

in such emerging fields can be more interesting than innovating in 

an established field. There can be more potential to identify real 

game-changing innovations, there are no established ‘standards’ 

set by commercialised products, and the field can change daily. 

However, for the same reasons, developing an optimised strategy 

for the patent protection of innovations in emerging fields can be 

very challenging. 

In this article, we will look at the emerging field of bacteriophage 

therapeutics, and the challenges of protecting innovations in this area. 

An introduction to bacteriophage 

Bacteriophage (phage) are viruses for bacteria. Many will be familiar 

with their use, since the 1970s, as a cloning vector (for example, the 

lambda phage). Outside of former Soviet states (notably Georgia), 

phage’s ability to target and kill specific strains of bacteria has been 

largely overlooked as a potential new form of antibiotic. Medicine 

in the West has focused on the raft of small-molecule antibiotics 

that have been developed. With the growing number of strains of 

antibiotic-resistant bacteria, a new-found interest in the use of phage 

as an antibiotic has emerged. 

To date, however, there has been no phage therapeutic authorised for 

sale as a medicine in Europe or in the US. 

This presents us with the first challenge. When drafting claims 

to any therapeutic product, one normally wishes to have a clear 

understanding of what is likely to be sold, so that granted claims 

can provide the required subject-matter cover, but also so that 

opportunities for patent term extensions can be optimised. It is 

common when one drafts an application to a set of new therapeutic 

compositions not to know what precisely will be approved for 

market. However, generally one knows the form of related classes 

of therapeutics that have been approved, including aspects of such 

approved therapeutics such as formulation. 

Until a clearer understanding is reached, drafters must draft broadly 

and include as many options for protection as possible within new 

filings. Are phage therapeutics going to be single-phage, or more 

likely cocktails of phage, such as formulations of different types 

of phage? What formulations will be most efficient for delivery of 

phage? Are wild-type phage going to be approved, or is it going to 

be easier to obtain marketing authorisation for phage that have been 

modified in some way? 

Learning from the past 

An analysis of the available patent literature suggests that there are 

only about 450 patent families that have been filed and that focus on 

the use of phage as a therapy (excluding uses of phage as vectors). 

Although the number of filings is relatively low, the filings in the last 

4 or 5 years have been increasing. Figures for the last half of 2016 

and 2017 are not yet available, but what is available suggest that the 

filings for 2016 will be considerably greater than either of the previous 

two years. 

Over the last 20 years, strategies for claiming antibody therapeutics 

have been tested through prosecution before patent office around 

the world. One can now look at recent patent filings for companies 

with a proven track record of commercialising antibody therapeutics 

to see how they optimise patent filing strategies for this field. Defining 

restrictively with reference to hybridoma deposit is now less common. 

We now understand how patent offices require us to define antibodies 

with reference to their complementarity-determining regions, a 

drafting style that can enable us to encompass minor modifications 

of the wild type. We cannot rely on such developed prosecution 

strategies when it comes to bacteriophage. 

What can we learn from past filings? Patent filings perhaps start to 

become interesting around the 2000s. Take, for example, the first 

independent claim granted under US Patent 7,459,272 in 2008 

(Intralytix): “A method for reducing the risk of bacterial infection or 

sepsis in a person colonised with pathogenic bacteria comprising 

treating the colonised person with a pharmaceutical composition 

containing bacteriophage of one or more strains which produce lytic 

infections in said pathogenic bacteria, wherein said treatment occurs 

prior to said colonised person developing an illness due to said 

pathogenic bacteria and said treatment reduces the risk of bacterial 

infection or sepsis in said colonised person.” 

This is an impressively broad claim, not being restricted to any 

specific bacteriophage (other than it being a lytic phage). It was 

successfully argued that in 2003 such prophylactic methods in the 

terms defined within the claim were both novel and not obvious. 

As the art developed, it has become increasingly difficult to obtain 

such broad claims. It is now more common to see product and 

use claims restricted to phage defined by deposit and or nucleic 



acid sequence. For example, looking at US Patent 8,071,352, 

granted to Intron Biotechnology in 2011, we see a claim to “an 

isolated bacteriophage belonging to Myoviridae family, which has 

killing activity specific to Staphylococcus aureus, and the genome 

comprises sequences of SEQ ID. NOs:1-26”, with a sub-claim 

further defining the phage as “one that was deposited under the 

Accession No: KACC 97001P”. 

US law. Additionally, case law in Funk Bros Seed Company v Kalo 

Inoculant Co has made it difficult to obtain protection for novel 

phage cocktails. 

Consequently, it is likely that the product claims outlined above are 

no longer valid in the US, with the likely exception of the claim drawn 

to a modified phage. 

Although such product claims are unlikely to now be valid in the US, 

method claims in the US are now more acceptable. We now also see 

more claims drawn to consortia (for example “a panel of bacteriophage, 

wherein the panel comprises any one or more bacteriophage 

selected from the group”) and to modified phage. Look, for example, 

to US Patent 9,623,058, the principle claim in this patent being: “A 

Staphylococcus bacteriophage K mutant, which comprises one or 

more mutations within one or more of the following regions: a) the 

region between ORF 18 and ORF 19; and/or h) ORF 100.” 

With the US in mind, it is now useful when preparing new applications 

to include as much information relating to modifications or 

formulations of the phage. If a synergistic effect can be demonstrated 

from your cocktail, then this should also be included as it should help 

issues arising from Funk Bros. 

Of course, we should still be able to rely on protection in the US 

from claims drawn to methods of treating specific diseases with 

specified phage. 

Current challenges and looking to the future 

It is now difficult to obtain methods of use claims where the invention 

comes from the use of phage in general, rather than the use of 

specific phage. However, where we can argue that the general use 

of phage is novel and inventive in the context of the method, such 

claims should be pursued. 

Applicants are now more focused on developing specific therapeutics, 

and so will now more likely want to pursue product claims drawn 

to phage compositions that will be useful in therapy, with narrower 

claims drawn to the therapeutic uses of those phage. 

In Europe, the patent system is well disposed to such a strategy. The 

most significant problem in many current cases in Europe is having to 

demonstrate to patent examiners that a phage in a patent application 

is different to that in cited prior art. For this reason, it is advised to 

include as much characterisation data as possible in new filings, 

such as morphological and functional data. 

The US patent system is, however, perhaps the greatest current 

challenge. It is not presently possible to obtain patent protection in 

the US for ‘natural products’, which include isolated phage under 

Perhaps the biggest challenge comes from trying to future-proof your 

patent filings. A patent has the potential to provide protection for 20 

years, so we need to have an eye to the products of the future. With 

the interest in synthetic biology, will synthetic phage be the preferred 

therapeutic agent? 

Will phage that have been modified to remove genes that are not 

required (or potentially detrimental to full therapeutic potential) be the 

therapies of the future? 

If this is the case, we must ask ourselves if claims drawn to specific 

deposited phage, or to tightly defined nucleic acid sequence are 

broad enough to cover these future potential therapeutics. 

For that reason, we should try and be innovative in our claim strategies 

and our applications should push patent offices to accept more 

broadly defined phage (including modifications to those sequences). 

Finally, as this field becomes established, and the levels of 

competition in the market rise between the principle parties, we will 

no doubt see a corresponding increase in defensive and aggressive 

patent strategies. The field will then become more interesting, for 

perhaps a different reason. IPPro 

Perhaps the biggest challenge comes from 

trying to future-proof your patent filings. 

A patent has the potential to provide 

protection for 20 years, so we need to have 

an eye to the products of the future 

Craig Thomson, partner, HGF 



Getting with the times 

Cindy Ahn of Longford Capital explains how the general counsels of IP-centric 

companies can maximise value and innovation while staying within budget 

Budget constraints often act as a barrier to aggressive litigation and 

patent protection. But it doesn’t have to be that way. Companies can 

pursue justice and have their holiday bonuses, too. 

revenue. They are shifting the risk and costs that sometimes prevent 

companies from defending patents, and redefining the role of legal 

departments along the way. 

As general counsel managing multiple litigations for a publicly traded 

biotech firm, no statement crystalised the pressure of balancing 

budgetary constraints and quality legal practice more than a warning 

my former boss gave early in my tenure, that if I didn’t come in under 

my budget, the company wouldn’t be able to give Christmas bonuses 

that year. That statement kept me intensely focused on controlling 

costs. I didn’t have the luxury of taking big risks, unless I wanted my 

colleagues to potentially suffer the consequences. Luckily, our company 

was extremely intellectual property savvy, in part because the CEO was 

a former patent litigation attorney with the confidence to assess the 

importance of IP in protecting our technology and market position. 

As a result, we did not hesitate to litigate when appropriate. This 

required me to hire legal teams I trusted to win, which accounted for 

the lion’s share of my legal budget every year. I spent a lot of time 

pouring over invoices and attempting to cut costs in a manner that 

would not jeopardise the overall quality of work that I expected from 

my outside legal teams, and in turn was expected from me. I never 

cost my colleagues their Christmas bonuses, but it certainly wasn’t 

easy. I was recently reminded of the immense pressure to balance 

costs with effective legal counsel when I read that pharma, biotech 

and life science had easily the highest legal spend of any industry in 

the US last year. Looking back on my own situation, however, I don’t 

think I would be on such a knife’s edge if I were an in-house counsel 

today, and here’s why. 

A new era of innovation 

For an industry built around innovation, many legal departments at 

pharma and biotech firms can be relatively stuck in their ways, relying 

largely on time-tested methods of cost cutting just as I did: tamping 

down on billable hours, seeking alternative fee arrangements or 

potentially sacrificing quality for low cost options. While most inhouse 

counsel would agree these options can be helpful in controlling 

costs, they would concede that they are merely band-aids, to be 

applied when the ideal strategy or solution simply seems too costly. 

Now, however, a few innovative general counsels are challenging this 

paradigm. They aren’t struggling to choose between aggressively 

pursuing IP claims and coming under budget, because they know 

they can do both. Rather than obsessing over saving money, they 

are focusing instead on identifying winning cases and generating 

From cost centre to value driver 

The volume of legal spending in the pharma and biotech industries 

is staggering: firms spend, on average, 2.5 percent of revenue 

on internal and external legal services, according to a survey 

from the Corporate Legal Operations Consortium. That’s a whole 

percentage point higher than the next highest industry, media and 

entertainment, and in an industry with an estimated $370 billion 

in sales, that’s some $9 billion in legal spending. Controlling 

these soaring costs has to be a priority for every company in 

the industry, from big pharma to biotech startups. However, the 

spirit of innovation at the heart of the industry—labs filled with 

brilliant scientists, discoveries that save lives and global searches 

for the next wonder drug—often seems to be missing from legal 

departments, which are too often seen as cost centers, tasked with 

the near-impossible tasks of keeping expenses in check while also 

defending all-important IP. 

When it comes to litigation, many of these companies are still 

asking themselves the questions: “do we have the budget for that?” 

or “what if we lose?”, that can cause them to miss opportunities to 

extract value from meritorious IP claims. After all, even a successful 

case can eat up resources and act as a short-term drag on profits, 

potentially doing more damage that it is worth. But in order to remain 

competitive, general counsels and their bosses know a vigorous IP 

strategy is essential. 

Many beleaguered general counsels have set out to spend less 

without scaling back on their caseload, pushing the risks and pricing 

pressure on to their outside law firms, and driving a race to the bottom 

for firms that specialise in IP cases. Patent attorneys at established 

firms are being undercut by new entrants offering to take on cases 

for a fraction of the cost—and with a fraction of the experience and 

expertise. Rather than rethinking their strategy, companies are simply 

trying to litigate as lean as possible. 

It doesn’t have to be this way. Innovative new tools like litigation 

financing allow companies to deploy the best available legal 

resources without causing major disruptions to cash flow or 

absorbing a multimillion-dollar hits to quarterly earnings. Forwardthinking 

general counsels are using these tools to once again pursue 

the ideal path forward, rather than the most affordable one. 



A flexible new solution 

Although the use of litigation finance in the US is rising at a rapid clip, 

about a third of corporate lawyers are now using it, up more than 

400 percent since 2013, we remain far behind the UK and Australia 

in adoption. Yet the main concerns stifling broader adoption are 

evaporating. Just five years ago, 85 percent of US lawyers believed 

legal financing would lead to unnecessary litigation. Today, that figure 

has dropped to 10 percent. 

While litigation finance has historically been used mainly for trials, 

the legal battlefield for pharma and biotech has expanded beyond 

the courtroom in recent years, with generic drug makers often 

seeking approval under the Hatch-Waxman act or requesting inter 

partes reviews (IPRs) to settle patent disputes. But as long as there 

is a resolution point and financial reward at the end of the process, 

litigation finance remains a valuable tool. 

A standard litigation finance arrangement calls for the financier 

to take a percentage of the proceeds in the event of a successful 

outcome. In an IPR—or any other administrative proceeding—the 

value exchange would derive from a market analysis that determines 

the potential value of a win. A company seeking to bring a generic 

drug to market, for example, might agree to share a percentage of 

sales for a finite period. 

Litigation finance is also a democratising force. It is just as useful 

to a large-cap firm looking to alleviate short-term costs as it is to 

a growth-stage company whose success depends on its ability to 

defend ground-breaking patents. In the raging IP battle between 

innovators and generics, it offers both sides a fair chance to prevail, 

based on the merits of their claims, not on their resources. 

Embracing disruption 

For any company operating in the pharma/biotech space, legal 

costs are built into the business model. Generics know they will face 

costly lawsuits as they try to bring cheaper drugs to market, just 

like innovators can expect to spend millions fighting off attacks on 

their signature drugs, particularly in the age of IP rights. Any startup 

seeking to break into the industry should know that their innovations 

will be gobbled up by bigger competitors if they don’t come with 

a savvy IP strategy. It’s safe to say that those costs aren’t going 

down anytime soon. Which is why general counsels need to get 

creative, and be prepared to deploy a full array of tools. Because IP 

is so central to the pharma and biotech industries, business leaders 

generally appreciate the value of applying for patents and protecting 

them. But that doesn’t mean they can always afford to wield them. 

Even companies with vast resources are apt to pass on smaller cases 

that could spoil a quarter, possibly damaging shareholder value more 

in the short-term than they would boost it in the event of a favorable 

outcome. Yet general counsels are essentially throwing away assets 

if they ignore patent infringement. Again, the scenario cries out for 

innovation. And again, litigation finance offers an elegant solution. 

Because the cost is incurred only when, and if, a case reaches a 

successful conclusion, income and expenditures are synchronised. 

For generics, the legal winds have lately been blowing in a positive 

direction, thanks to legislation that not only encourages them to 

attack patents, but also allows them to do it faster and cheaper than 

ever before. But it’s still a costly endeavor, particularly for companies 

without the cash hoards of their large-cap competitors. For these 

firms, the ability to litigate at the same level—hiring lawyers of equal 

ability and expertise—is essential to carving out a market share. 

The same goes for growth-stage companies, which may have the 

next great breakthrough, but will quickly see its value destroyed 

if they can’t afford to protect and monetise it. For companies 

whose future depends on one big innovation, there is no greater 

risk than having their resources sucked up by legal battles, rather 

than marketing or production. It’s all but impossible to avoid these 

disputes, however, which is why partnering with a litigation finance 

firm makes so much sense. 

In each case, it no longer has to be a question of whether the legal 

department will blow the holiday bonus pool, but whether it will 

deliver a holiday surprise. 

General counsels no longer have to ask themselves how much they 

can do with their budget. The question is how much value they can 

get from their company’s IP. IPPro 

General counsels no longer have to 

ask themselves how much they can do with 

their budget. The question is how much 

value they can get from their company’s IP 

Cindy Ahn, director, Longford Capital 



Patent counsel: innovation stimulator 

Jeffrey Stone, partner at Barnes & Thornburg describes how patent 

counsel can become “innovation stimulators” to enhance their work 

Patent counsel, including patent attorneys and patent agents, take 

on a number of roles in assisting clients with a variety of patent and 

other intellectual property matters. 

One key non-traditional role for patent counsel is that of “innovation 

stimulator”. In this role, counsel facilitates the purposeful stimulation 

of a client’s inventive conception and innovation processes. 

These roles typically include that of counselor; documenter; 

protector; and strategist. However, I encourage patent counsel to 

look beyond these traditional roles to seek out unique and creative 

ways to provide maximum value to the client. 

Patent counsel is—by virtue of training, experience, intense 

knowledge of the client business strategy and the relevant competitive 

landscapes—well-positioned to take on the role of innovation 

stimulator. The rewards for taking on this challenging role are many, 

This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you 

are urged to consult your own lawyer on any specific legal questions you may have concerning your situation. 



including an enhanced attorney-client relationship and satisfaction 

that comes from helping a client’s business grow in value. 

Invention and innovation are key drivers of client value 

Technology-based client businesses operate in highly 

competitive, knowledge-driven environments that are constantly 

changing and evolving. 

Accordingly, these clients must continually innovate to deliver 

valuable new solutions to meet customers’ evolving needs and to 

remain differentiated from competitors. 

Tech-based clients, therefore, must strive for a relatively continuous 

and vibrant flow of new ideas focused on serving strategic goals 

to not only maintain the current competitive position, but also to 

strategically grow revenue in new ways. 

Problems often go unsolved, solutions are not properly focused on 

the problem, solutions are not the best solution, the raw number 

of ideas generated by the organisation is suboptimal. For example, 

many organisations use brainstorming sessions to discover answers 

to questions that, unfortunately but predictably, continue to remain 

largely unanswered post-session. 

Most of these brainstorming sessions are uncontrolled, producing 

a large number of off-topic or non-feasible results, and are further 

contaminated by various inventive model elements that are 

counterproductive, thus producing suboptimal results. 

A purposeful innovation session can help patent counsel 

address some of the problems with clients’ innovation systems. 

The session may be executed, with patent counsel preparation 

and facilitation, with minimal expense, time commitment and 

disruption to the organisation. 

All tech-based businesses understand this, and many of those 

businesses strive for a culture of innovation, but an unfortunately 

large number fail to reach full innovative potential. 

Some of the key reasons for these innovation shortcomings include: 

Our experience facilitating numerous sessions is that they 

consistently provide both immediate and long-term value measured 

by: specific focus targeting; near- to mid-term commercial potential; 

the sheer volume of ideas generated; and training in an optimised 

innovation process. 

A general deficit of organisational knowledge of optimal 

inventive processes. 

Innovation is neither intentional nor purposeful, with invention 

instead occurring primarily on an ad hoc basis, with 

innovation becoming lost in the chaos of pressing day-to-day 

job responsibilities. 

Invention and innovation is generally expected only of technical 

personnel with little to no input sought from non-technical 

personnel, many of whom are customer-facing and may 

understand customer wants and needs much better than 

technical personnel, in some cases. 

A resulting inability to fully unlock and realise the full inventive 

potential of inventors and to effectively create a culture of 

creativity and innovation throughout the organisation to ensure 

a continuous stream of fresh ideas with maximum volume and 

optimised focus. 

How can patent counsel help correct these deficiencies? The answer 

is not as difficult, disruptive or time-intensive as it may seem, and 

patent counsel plays a leading role in the solution. 

The role of patent counsel as innovation stimulator 

Sessions executed over the years consistently produce a large 

volume of ideas in a very short timeframe, ranging between 50 

concepts to 200 concepts in a typical four to six-hour session. 

The following are examples from an actual session: 

The session was executed to improve a relatively old ‘known’ 

portion of a medical device system. Because of the age of the 

related art, and the absence of new concepts, the client was 

pessimistic that anything of value would be produced, but 

nonetheless agreed to do the session. 

The session produced 75 potentially patentable concepts, 

impressive enough for a subsystem considered ‘old’. But more 

significantly, and of much more value to the client, 25 of the 

concepts were commercialisable in the short term, while 25 more 

concepts were commercialisable in the medium term. 

The client now engages in regular sessions covering various 

aspects of the overall system as well as exploration of new 

strategic directions. 

A successful purposeful innovation session comprises, among other 

things, the following key characteristics: 

First, the client should be introduced to the potential power of 

purposefully focusing on new idea generation to solve existing issues, 

meet customer needs, and/or explore new strategic areas. 

While this may sound like what the client currently expects and 

requires from the inventors, the actual result is almost always less 

than optimal. 

Patent counsel provides an overview of the shortcomings of the 

current inventive model and why it does not produce optimal 

results. Discussion of elements of an optimal inventive model is 

included with supporting research summary. 

Participant-inventors receive both classroom-style and 

experiential training that can be incorporated into daily routines, 

increasing invention frequency and capture. 



When patent counsel takes on the role of innovation 

stimulator, it adds value to the attorney-client relationship 

Required endorsement of the session by management, with 

 

 

 

 

 

specific focal area(s) of the session provided by management. 

Management participation in the session itself, firmly demonstrating 

to all participants that they are absolutely empowered to innovate 

in ways that align with the businesses strategic goals. Management 

also experiences firsthand the previously unseen inventive talent 

possessed by the participant-inventors. 

Specific selection of session participants with regard to the following: 

[i] Intentional optimisation of diversity of participants’ thinking 

styles is critical to the success of the session. Linear and abstract 

thinkers are both accounted for, as are right-brain dominants 

(typically non-technical participants) and left-brain dominants 

(typically technical participants). 

[ii] Personnel with customer-facing roles are sought out 

for inclusion. 

Patent counsel knowledge of key competitive activity within 

the relevant patent landscape completed before the session 

is conducted. 

Perhaps most importantly—and most difficult to achieve during 

initial sessions, particularly for technical folks—participants 

are instructed to absolutely not optimise, or even enable, the 

concepts generated during the session. Adherence to the nooptimisation 

rule is critical to the success of the session in 

several respects, not the least of which is the efficient use of 

valuable session time, and is further supported by the fact that 

many of the most prolific inventors do not optimise solutions 

initially, preferring instead to first capture the concepts followed 

by selective optimisation. 

Post-session categorisation and ranking of the generated ideas, 

done in most cases by the participants themselves using an 

established ranking system across a number of key criteria. This 

is followed by optimisation and full enablement of the highest 

ranked concepts—most typically these are ideas that are 

commercializable in the short to mid-term. 

Clearly, each session will differ not only in form, but also in substance 

depending on the client’s needs, expertise level. 

Creating an innovation stimulation program is a bit more involved, 

but companies can surely conduct some basic research into the 

optimisation of invention process stimulation strategies. 

Experience indicates that companies receive at least the following 

benefits from execution of at least one session: 

Participants recognise deficits of the current inventive model and 

learn techniques to unlock their full inventive potential and to 

further understand how the power of that inventive potential can 

be realised on a daily go-forward basis. 

Participants are infused with the knowledge that they are, in 

fact, inherently capable of generating profound and valuable 

inventions, and that they are empowered by management 

to innovate. 

Management has firsthand evidence of the inventors’ talent and 

skill to generate new and highly valuable concepts when given 

the proper framework, with management viewing the inventors in 

a much more favorable light post-session. 

The typical “inventor” is expanded to include non-technical, as 

well as technical, personnel, resulting in conceptions that are 

more customer-oriented and enhancing the depth and breadth of 

the generated ideas by, among other things, helping participants 

who may be introverted to freely participate. 

Each session generates a high number of new and useful 

inventive concepts for consideration that are purposefully 

targeted to strategic goals and needs of the business, with a high 

percentage likely capable of commercial execution. 

Properly focused sessions may identify the best possible concept for 

commercialisation, with simultaneous generation of a dense defensive 

sphere of protective ideas surrounding the identified best concept. 

The business realises enhanced value by: 

[i] Identifying and protecting commercial products 

[ii] Generating patent protection that strategically and defensively 

surrounds core commercial products to the effective elimination 

of commercially viable alternatives 

[iii] Strategically disrupting competitive patenting activities 

A true culture of invention and innovation is created throughout 

the organisation, not just within the technical groups, resulting in 

enhanced innovation flow over time. 

When patent counsel takes on the role of innovation stimulator, 

facilitating highly focused, commercially viable and valuable 

inventions with a key goal of helping to create a fully optimised culture 

of innovation, it adds value to the attorney-client relationship. IPPro 



Strict and inflexible: material claims at the EPO 

Innovators in advanced materials can face an uphill struggle to get suitable 

patent protection at the European Patent Office. Matthew Smith, partner 

at Mewburn Ellis, explains 

When a useful new material is made, by whatever means, for whatever 

purpose, the intellectual property surrounding that must be protected. 

In my opinion this is true for all inventions, of course, but in the field of 

materials we are presented with some special challenges. These are 

particularly apparent before the European Patent Office (EPO). 

New materials are vital in addressing the problems we face individually 

as well as societally. But as materials become more complex, refined, 

and diverse, it seems to me that our systems for protecting such 

innovations must also change, evolve and improve to suit the modern 

technological landscape. 

Patent claims can primarily be split into two types: ‘item’ (product 

or apparatus) and ‘activity’ (use, method, process). Ideally we want 

protection of both types: to protect, for example, not just our new 

material but also uses of it and ways of making it. 

The EPO requires that we define a product in terms of its technical 

features (physical characteristics). This works well for a ‘conventional’ 

product—a widget with part a connected to part b. 

attorneys: traditionally, the EPO does not like product-byprocess 

claims. 

The first problem stems from a point of interpretation: the EPO 

considers the product-by-process claim to be directly to the product 

itself, not limited by the method used to make it. That means the 

product itself must be novel and inventive. 

Fair and reasonable on paper, sure, but in practice a major headache. 

EPO case law going back over 30 years places a burden of proof 

on the applicant. This can put us in a very uncomfortable position: 

having to prove novelty of the claimed product. 

That generally requires experimental data reproducing prior art 

teachings (which is often difficult or even impossible), possibly within a 

relatively short time frame, perhaps six and a half months, unless extra 

fees are paid. Such activity can be prohibitive for small companies, 

who may not have resources available for such investigations. It may 

even prove a challenge for larger concerns, whose research and 

development departments are not set up to reproduce but to innovate. 

What do we do when our product is a material? In the best case 

scenario, we can recite or explain the structural features which define 

it—particles of X, dispersed homogeneously in Y, for example. 

However increasingly we face situations where this is simply not 

possible. We cannot say, or do not know, the microstructure of our 

new material—perhaps it is subtly variable through its bulk; perhaps 

a purely structural definition would be too narrow to capture the true 

scope of the invention. Composites and particularly alloys are just 

two areas where this is often a concern. 

This gives us two options. First, a process based definition of the 

material by reference to the way in which we have made it. Second, 

a parameter based definition of the material by reference to its key 

performance properties and characteristics. 

A process-based definition 

While the EPO examiner does need to explain their objection to a 

product-by-process claim, for example by explaining why they 

think the product of two processes would be the same, it is not 

straightforward to overturn such an objection without hard evidence. 

The second problem again stems from interpretation, but this time of 

process claims. 

How so? Well, Article 64(2) of the European Patent Convention (EPC) 

states that the protection afforded by a process claim extends to 

“products directly obtained by such process”. This seemingly removes 

the need for product-by-process claims, and indeed the EPO often 

argues to that effect. 

However, that interpretation is not quite right. Article 64(2) of the EPC 

very carefully recites that protection is given to only those products 

directly obtained by the claimed process. 

This is what is commonly referred to as a product-by-process claim. 

These claims define a product in terms of the process used to make 

it: for example, a material X, obtainable by the steps a, b, c. 

There are two problems here: both are somewhat swept up by 

a comment seen frequently in comments from European patent 

That is, the product must actually have been obtained by the claimed 

process. The product-by-process, on the other hand, is not so limited 

(when the word ‘obtainable’ is used—using ‘obtained’ has some 

limiting effect in some EPO countries but not in others, although the 

EPO make no distinction). The product-by-process claim covers the 

product as obtained by any method. 



Clearly this is a more useful scope. It’s also more enforceable–as a 

patentee, I don’t have to prove or investigate the alleged infringer’s 

process. Having their product is enough. 

It follows from the above that product-by-process claims are not only 

important in their own right, they are also judged to a very high standard 

by the EPO. In my opinion, this is a rather unsatisfactory situation. 

Ironically, in the field of polymers ‘product-by-process’ claims are 

often accepted without question. There, it is well understood that the 

product of the reaction between a number of monomers is somewhat 

unpredictable at an atomic/molecular scale—but that the product 

can still be useful and predictable at a macro scale. 

It seems to me that the EPO should start taking a more similar 

approach with claims directed to other types of material than 

polymers. Denying the inventors of complex materials protection for 

those inventions simply because they have created, for example, a 

composite not a polymer is unreasonable. 

The EPO (in particular the examining divisions) should also accept that 

the enhanced protection afforded a process claim by Article 64(2) of the 

EPC is no substitute for an actual product claim (even if it is a productby-process 

claim). Applicants have justifiable reasons for wanting 

product protection, which should be understood and respected. 

A property based definition 

So a process-focused definition is less than ideal. What about the other 

option, a property-based claim? Sadly, things are not much better. 

Let’s say we define our excellent new material as comprising 

components A and B, and having a thermal conductivity of X, tensile 

strength of Y, and a refractive index of Z. 

Again we face a number of problems beyond the normal. The main 

one is analogous to the ‘first problem’ mentioned above: the EPO is 

able to place the burden of proof on the applicant, to prove that prior 

art materials comprising A and B do not have the properties X, Y and 

Z. The EPO is strict here: no benefit of doubt can be accorded if the 

applicant does not provide evidence. 

Certainly as a first step the EPO examiner must make some comparison 

with the prior art, but often it falls to the applicant to explain in detail 

why the claimed materials are different from those of the prior art, and 

often to provide experimental evidence proving that. Again, this is not 

always straightforward or even possible for all applicants. 

Furthermore even if the objection is addressed using argument there 

is no particular standard to be met: we must simply ‘convince’ the 

examiner. What is needed to achieve that can be highly variable. 

Then there is the matter of clarity. Of course the meaning of claims must 

be clear but the EPO has special rules for the consideration of materials’ 

(all) parameters in patent claims. Definition in terms of parameters is only 

allowable if “the invention cannot be adequately defined in any other 

way”—but there is no clear standard for what “adequate” means. 

Parameters must be reliably measurable—in practice this often means 

extensive explanation of measurement methods must be included 

in the description, adding a time and cost burden for applicants. 

Further problems can arise if there are a number of different ways of 

measuring a property (the classic example being viscosity). 

While the need for claim clarity is understandable from the EPO’s (and 

hence the public’s) perspective, their strict approach is again, in my 

opinion, excessively hard on applicants making complex innovations, 

particularly in the materials field. In my view, it is important for EPO 

examiners to be encouraged to demonstrate a strong prima facie case 

for lack of novelty, without shifting the burden of proof to the applicant 

until a solid case based on cited references has been put forward. 

What does the future hold? 

Innovators in advanced materials can face a serious uphill struggle 

to get suitable patent protection at the EPO. That is not to say it is 

impossible, or that applicants should be discouraged from applying. 

It is merely a recognition that when writing such applications we must 

do so with an eye for the future (including plenty of flexibility) and 

with a plan for success. While it is unlikely that things will change 

drastically at the EPO in the short term, I am hopeful that gradual 

trends in technology will mean the EPO will appreciate the difficulties 

its evolved case law represents for emerging technologies. IPPro 

Innovators in advanced materials can 

face a serious uphill struggle to get suitable 

patent protection at the EPO 

Matthew Smith, partner, Mewburn Ellis 



The transition of the trans pacific 

Oscar Mago and Kaylee Savournin of OMC Abogados explain 

how a renegotiation of the TPP could effect Peru’s IP landscape 



Barney Dixon reports 

From an intellectual property standpoint, how can Peru benefit 

from the Trans-Pacific Partnership? 

One example of this is second use patents in pharmaceutical products. 

To date Peru has implemented exclusions and protection systems in 

accordance with the TRIPS agreement, decision 486 and decision 

345 of the Andean Community with regard to the patentability of 

pharmaceutical products, prohibiting second-use patents. 

The Trans-Pacific Partnership (TPP) helps us gain the knowledge, 

innovation and technology from other more developed countries. 

By regulating the protection of IP in the Peruvian market, it will make 

it more attractive and safe for international companies dedicated to 

research in various fields, especially to cutting edge research. 

This will mean a leap for Peru, access to new tools for its development 

and also a decisive step in the way of putting national standards at 

the level of the most developed economies in the world. 

In addition, Peru is a country of innovators, which urgently needs to 

stimulate and protect its own innovations. 

In contrast, the TPP establishes that second-use patents are patentable. 

It is for this reason that the members of the TPP had to negotiate this 

point, reaching the following agreement, patents of second use will 

be accepted, but in the case of Peru, the competent authority should 

consult the Andean Community to be able to accept it. 

How could the potential renegotiation of the TPP affect the IP 

portion of the agreement, considering Trump’s stance on nondomestic 

trade and IP? 

The ministers of the remaining members of the TPP have tasked 

officials to engage in a process of assessing options to bring the 

comprehensive, high quality agreement into force expeditiously. 

Also, we must highlight that one important benefit for a mega-diverse 

country like ours, is the recognition of the existing link between 

traditional knowledge, genetic resources and IP, topics that come 

together in a way that contributes to their protection and adequate 

utilisation by society. 

According to the USTR, the TPP would set a strong patentability 

standard in participating countries. How would this differ from 

Peru’s current standard? 

After the World Trade Organisation’s Doha Round of trade negotiations 

held in Qatar, the US started to negotiate multilateral and bilateral 

trade agreements with other countries. In those agreements, the 

most controversial chapter was the one related to IP. 

Why do we say it is controversial? Because at the moment of negotiating 

this chapter, the US applies what is known as the agreement on Trade- 

Related Aspects of IP Rights (TRIPS) plus, that is, they apply a higher 

standard than that stipulated in the TRIPS agreement. 

The TRIPS plus concept covers both provisions designed to raise 

the level of protection for rightsholders beyond the provisions 

of the TRIPS agreement, as well as measures to reduce the 

scope or effectiveness of limitations to the rights and exceptions 

arising from the TRIPS agreement, all of which have the effect 

of reducing the capacity of developing countries to protect the 

public interest. 

This makes developing countries, with low negotiating capacity, sign 

adhesion contracts, renouncing their autonomy to control their own 

resources, because on the one hand, they restrict their sovereignty 

by liberalising the regimes of access to biological material and 

the protection of traditional knowledge, placing at risk one of their 

strategic resources of development: biodiversity. 

Over the past several months, officials have worked to reach a 

balanced outcome that maintains the significant benefits of the TPP. 

This renegotiation consisted in suspending 20 clauses of the 

original TPP agreement, including postal service, electronic 

commerce and the fight against illegal wildlife trade; but more than 

half of them are related to IP one of the most controversial chapters 

of the agreement. 

In January 2018, they reached an agreement and the renegotiated 

TPP, called Comprehensive and Progressive Agreement for Trans- 

Pacific Partnership (CPTPP) was born. 

Comparing both treaties, we can say that the TPP’s IP chapter aims 

at the protection and observance of IP rights, and its contribution 

to the promotion of technological innovation and to the transfer and 

dissemination of technology. 

But it also ensures that signatories can adopt the necessary 

measures to protect the public health and nutrition of the population, 

or to promote the public interest in sectors of vital importance for 

their socio-economic and technological development, either by 

preventing the abuse of IP rights by their owners or through the use 

of practices that unjustifiably limit trade or are detrimental to the 

international transfer of technology. 

The CPTPP maintains the high standards, overall balance, and 

integrity of the TPP while ensuring the commercial and other interests 

of all participants and preserves their inherent right to regulate, 

including the flexibility of the parties to set legislative and regulatory 

priorities. Ministers also affirm the right of each party to preserve, 

develop, and implement its cultural policies. Ministers consider that 

the CPTPP reflect the desire of the parties to implement the TPP 

outcomes among themselves. 

18 IPPro Patents


Trump’s actions benefited the 

developing countries that are members of 

the TPP, because there will no longer be a 

conflict between the national legislation 

and the CPTPP, reaching an equilibrium 

point in this topic 

Maylee Savournin, lawyer, OMC Abogados 

Taking in consideration Trump´s “Make America Great Again” slogan, 

and the withdrawal of the US from this treaty, we can say that the 

IP chapter of the original TPP has not been severely affected by the 

renegotiation, because the US is a great innovative and technological 

power in the world, and it is natural that it seeks to protect to the 

maximum its investment in research and production of new products, 

so when they negotiate bilateral or multilateral trade agreements, it is 

not surprising that its content resembles its legislation. 

Trump’s actions benefited the developing countries that are members 

of the TPP, because there will no longer be a conflict between the 

national legislation and the CPTPP, reaching an equilibrium point in 

this topic. 

Are there any potential gains to be had for Peru in the renegotiation 

of the TPP? Are there any concerns that Peruvian IP professionals 

have about the original agreement that could be addressed? 

Yes, there are. As we said before, the objective of the CPTPP, 

was not to modify the original text, but to obtain an equilibrium 

point after the withdrawal of US. Therefore, Peru has obtained the 

following benefits: 

Winning five new markets in a single trade agreement, as is the 

case of Australia, Brunei Darussalam, New Zealand, Malaysia and 

Vietnam. The potential increase of Peruvian non-traditional exports 

is estimated to these markets in $2,250 million with the entry into 

force of the TPP. The country also wins by the improvement in access 

conditions and rules agreed in previous bilateral agreements. 

Access to global value chains, as a result of the application of 

the mechanism known as “accumulation of origin”, which allows 

to consider consumable goods, materials or intermediate goods 

originating in any country as if they were Peruvian. This mechanism 

will particularly benefit small companies, since they will be able to 

export inputs that are linked to a value chain in the TPP block. 

The integral nature and high standards of the TPP will contribute 

to the process of modernisation of state institutions, as well as the 

application of expeditious systems and procedures of institutions 

linked to foreign trade. At the same time, it will allow Peru to benefit 

from the good management practices of its partners in the treaty. And 

the most important gain for Peru is that the CPTPP members have 

recognised the existing link between traditional knowledge, genetic 

resources and IP, topics that come together in a way that contributes 

to their protection and adequate utilisation by society. 

Peruvian IP professionals have one main concern about the TPP, 

which is the acceptance of the protocol relating to the Madrid 

Agreement concerning the international registration of trademarks, 

approval has always been objected by different sectors involved 

using constitutional, legal and administrative reasons and also 

because of the negative impact on the resources generated by the 

competent national office. IPPro 

Peruvian IP professionals have one 

main concern about the TPP, which is 

the acceptance of the protocol relating 

to the Madrid Agreement concerning the 

international registration of trademarks 

Oscar Mago, managing partner, OMC Abogados 


J. Varbanov & Partners 

European and Bulgarian Patent & Trademark Attorneys 

One of the oldest and leading IP companies in Bulgaria 

Professional, cost effective services and quality advices 

Areas of practice: 

*IP Protection 

*IP Enforcement 

*Anti-counterfeiting 

*Litigations 

*Domain name registrations 

*IP watches 

PO Box 1152, BG-1000 Sofia, Bulgaria 

South Park Complex, bl.1A, 2nd fl., BG-1421, Sofia, Bulgaria 

Tel.: (+359 2) 986 51 25, Fax: (+359 2) 980 32 47, 

e-mail: jvp@jvpatents.com 

www.jvpatents.com

Case Report 

TCL v Ericsson: the future of FRAND rate setting 

TCL Communication v Ericsson was the first time a US court has determined 

FRAND rates for a portfolio of cellular SEPs and will likely have far reaching 

implications for future SEP licences. Sachin Sinha of Concur IP explains 


Case Report 

A public version of the much awaited judgement in the TCL 

Communications v Ericsson case came out just before Christmas. 

The ruling, which was handed down at the US District Court for 

the Central District of California on 21 December, is the first time a 

US court has determined Fair, Reasonable, and Non-Discriminatory 

(FRAND) rates for a portfolio of cellular standard-essential patents 

(SEPs), and will likely have major implications for future SEP 

licences. It is also the first time a top-down approach has been 

reliably used by a court to determine FRAND rates for cellular SEPs. 

The decision from a UK court in Unwired Planet v Huawei case 

also referred to the top-down approach, but it was used merely as 

a cross check for comparable licences. 

In the TCL v Ericsson judgement, it is the primary method 

used in combination with comparable licences for determining 

the FRAND rates. Many industry experts have expressed their 

opinions on this judgement, most of them considering it to be 

favorable to implementers. 

The key takeaways from TCL v Ericsson 

A firm stand against royalty stacking 

The court took a firm stand against royalty stacking. The judgement 

cited one of the key reasons for using top down analysis is that it 

prevents royalty stacking. 

The court also found that the results from the ex-standard approach 

proposed by Ericsson are highly suggestive of royalty stacking and 

lack fundamental credibility. 

The court adopted a maximum aggregate royalty rate based on 

various public announcements made by SEP owners and industry 

leaders for the top down calculations. 

Top-down approach as a preferred method 

The court relied on the top down approach for determining a fair and 

reasonable royalty rate. 

It said: “A top down model aims to value a portfolio of SEPs by 

determining a fair and reasonable total aggregate royalty for all 

patents that are essential to a standard.” 

conceded number of Ericsson SEPs and Ericsson’s disputed number 

of SEPs as the numerator. 

After applying an adjustment, the court used the same denominator 

determined by Concur IP, in collaboration with other TCL experts, for 

the number of industry-wide SEPs in all four calculations. 

It then compared these four rates against the unpacked rates from 

the comparable licences and adopted a rate of 0.45 percent, which 

is very close to one of the rates (0.452 percent) given by the top 

down calculation using 6 percent maximum aggregate royalty rate 

and Ericsson’s disputed number of SEPs. 

3G: For 3G, the court derived two rates for the US using top down 

analysis (one using TCL’s conceded number of Ericsson SEPs and 

other using Ericsson’s disputed number of SEPs). 

However, the court found both these rates (0.103 percent and 

0.129 percent) to be significantly lower than the rates from the 

comparable licences analysis and adopted a rate of 0.30 percent, 

which is close to the lowest rate (0.39 percent) from the comparable 

licences analysis. 

“It then apportions that royalty to the SEP owners based on the 

relative value of their portfolio against the value of all patents 

essential to the standard.” 

2G: For 2G, the court directly used the royalty rate (0.16 percent) 

derived from the top down analysis, as there was no reliable unpacked 

2G rates from comparable licences. 

The court, however, noted that the top down approach cannot address 

the discrimination aspect and relies on analyses of comparable 

licences to determine a rate that is non-discriminatory. 

It applied the combination of top-down and comparable licences 

analyses to arrive at a FRAND rate for each of 4G, 3G, and 2G. 

4G: The court first determined royalty rates for Ericsson portfolio 

using top down calculations. 

It derived four royalty rates for the US using maximum aggregate 

royalty rates of 6 percent and 10 percent for 4G and using both TCL’s 

Industry-wide essentiality analysis feasible 

The court took a positive view on the industry-wide essentiality 

analysis performed by Concur IP and considered this as a reliable 

source for the number of industry-wide essential patents. Dr Zhi Ding 

cross-checked a sample of essentiality analysis outcome with his 

own analysis and found very few disagreements. 

Ericsson made numerous challenges to the process including the 

time and fee charged by Concur IP, qualification of team members 

and the fact that the team members were aware of the parties 

involved in the case. 


Case Report 

However, the court was not persuaded by Ericsson’s arguments to 

reject Concur IP’s analysis and used the number of industry-wide 

SEPs determined by Concur IP and Dr Ding, after some adjustments, 

as the denominator for the top down calculation. 

Contribution count not an indicator of patent portfolio strength 

Ericsson proposed the use of technical contribution counting as a 

means to determine the strength of its portfolio. 

The court rejected the idea citing two major flaws: a lack of 

correspondence between technical contributions and patents, and 

its inability to account for transferred and expired patents. 

Importance of individual patents difficult to quantify 

TCL experts analysed the importance and contribution of Ericsson 

SEPs and used the analysis to calculate a value share for Ericsson’s 

SEPs relative to the value-distribution of all SEPs in the standard. 

While the court did find some value in the importance and contribution 

analysis, particularly to show that Ericsson’s patent portfolio is 

certainly not as strong or essential as it has claimed, it found the 

application of this analysis to calculate the overall rates too flawed 

to be used. 

The court cited three flaws: 

Lack of similar analysis on rest of the SEPs for comparison with 

importance and contribution of Ericsson’s SEPs 

Lack of analysis on whether the alternatives identified for various 

Ericsson SEPs would be mutually consistent with each other, 

who owned the alternatives, whether the alternatives were 

unpatented, expired, or part of a previous standard 

Lack of justification to map specific importance and contribution 

ratings to quantifiable values 

Broad interpretation of similarly situated firms 

The court took a broad interpretation of similarly situated firms and 

found Apple and Samsung to be similarly situated as TCL for licence 

comparison along with Huawei, LG, HTC, and ZTE. 

The court made following observations in this regard: 

Sales volume alone does not justify giving lower rates to otherwise 

similar firms 

Factors such as the firm’s overall financial success or risk, 

brand recognition, the operating system of their devices, or the 

existence of retail stores have no bearing on whether Ericsson’s 

royalty rates for its SEPs are discriminatory 

Local kings, such as Karbonn and Coolpad, are not similarly 

situated to TCL 

Competitive harm to a firm sufficient to prove discrimination 

While Ericsson argued that discrimination must have the effect of 

impairing the development or adoption of standards, the court took 

a much broader view and found that harm to the competitor firm 

offered discriminatory rate is sufficient to prove discrimination. 

Impact on future SEP licences 

It would be interesting to see how this judgement and the underlying 

findings impact SEP licences going forward, both new licences 

(particularly for the upcoming 5G technology) and the existing ones 

when they are up for renewal. Are we going to see another series 

of disputes when licensees at the higher end of the range try to 

negotiate rates closer to the ones determined by the court or will 

the SEP owners and implementers develop an understanding and 

commonly agreed upon rate? If one goes by the history, the latter 

looks less likely. 

Patent portfolios are dynamic due to acquisition and sale, as well as 

filing of new patent applications, and so will be the FRAND rate for each 

of these portfolios. This will give both SEP owners and implementers 

opportunity to renegotiate the rates once the existing licences end. 

The approach adopted by the court for royalty calculation is certainly 

going to play an important role in future SEP licenses. 

Particularly, the top down approach may gain more popularity 

going forward. The cellular industry has been demanding more 

transparency in royalty rate setting and this judgement will go a long 

way in addressing that. IPPro 

The cellular industry has been 

demanding more transparency in royalty 

rate setting and this judgement will go a 

long way in addressing that 

Sachin Sinha, co-founder, Concur IP 


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Industry Appointments 

Movers and shakers at Adams and Reese, Leason Ellis and more 

Adams and Reese has added Maia Woodhouse to its Nashville office. 

Woodhouse’s practice focuses on trademarks, patents, trade dress, 

trade secret and copyright disputes. 

She previously worked at Baker Donelson where she was an associate. 

Gif Thornton, managing partner of Adams and Reese, commented: 

“Maia Woodhouse is a superb young IP litigator.” 

“She makes our strong intellectual property practice even stronger. 

We welcome her to the team.” 

Mitch Boult, an IP attorney who sits on Adams and Reese’s executive 

committee, added: “This move continues the upward trajectory of our 

global IP team.” 

Buchalter has recruited three IP attorneys in its Orange 

County office. 

Rick Taché joins Buchalter as shareholder from Greenberg 

Traurig, alongside Erikson Squier and Roger Scott who are both 

senior counsel. Taché will serve as co-chair of the firm’s patent 

litigation group. His practice focuses on complex IP litigation, as well 

as patent and trademark prosecution. Squier is experienced in patent 

prosecution and litigation and Scott works in civil litigation matters, 

particularly employment litigation. 

Adam Bass, president and CEO of Buchalter said: “Adding a highlyregarded 

and elite intellectual property shareholder such as Rick Taché 

and his team to our patent and litigation groups is reflective of the type 

of talent we want to attract to properly service our clients … We are 

delighted to welcome Taché, Erikson Squier, and Roger Scott to the firm.” 

“[Woodhouse] is one of the top IP litigators of her generation and our 

clients will benefit immediately from her skills and insights.” 

Robert Isackson has joined Leason Ellis as partner, effective 1 February. 

Taché commented: “My practice fits extremely well within Buchalter’s 

expanding full-service platform. I am thrilled to join the firm’s 

extremely talented patent and litigation teams with a demonstrated 

ability to serve high profile clients.” 

Isackson is an IP law litigator that completed nine patent trials, 

including four as first chair. 

OMC Abogados & Consultores has welcomed Maylee Savournin 

and Rodrigo Manzur as new members of the team. 

He has led trial teams in various patent litigations, as well as nonpatent 

IP cases and arbitrations, including those in trade secret, 

trademark, trade dress and copyright matters. 

In addition, he handles IP counselling, procurement work and 

transactional matters. 

Previously, Savournin served as a legal advisor in the Grupo 

Empresarial de la Construccion of Havana of the Ministry of 

Construction for three years. In addition, she has completed courses 

on the legal protection of trademarks, as well as another course 

which covered copyright. She has also completed a course on tax 

law, international trade and foreign investments. 

Isackson has previously served at Orrick, Herrington & Sutcliffe, 

where he headed up the firm’s New York IP group. 

Manzur has worked in the areas of civil, criminal and administrative 

law, as well as intellectual property law. IPPro

IPPro Patents Issue 049

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