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Major Changes to US Patent Law

Monday, 10 October 2011

The America Invents Act has now been signed into law by President Obama. The statute includes some fundamental changes to US patent law and procedure: most notably moving to a "first to file" system and replacing a number of cour procedures with administrative options which it is intended should speed up the resolution of patent disputes so offering lower costs and greater certainty to business. The changes are being introduced over an 18 month period with some changes such as those relating to fees coming in immediately while others such as "first to file" requiring a longer lead time.

The introduction of "first to file" aligns US law more closely with practice in other industrialised countries but a number of US quirks are maintained. For example there will still be a 12 month grace period during which time disclosures of the invention will not be fatal to a US patent (but remember disclosure anywhere in the world is fatal to an application in Europe) but this is ow restricted so that these disclosures have to originate from the person ultimately seeking the patent application. While there has been considerable discussion in the US as to the potential impact on the small inventor who has traditionally used the 12 month grace period to gather support for his invention before going to the expense of applying for a patent the continuing grace period allowed the inventor himself would seems still to provide that cover although he will now at least probably have to seek a provisional patent to secure his priority date.

The application process itself is subject to a few changes too. Paper filing will attract an additional fee to encourage online filing and a new category of applicant "the micro-enterprise" is introduced which will benefit from substantially lower fees. It will also be possible to pay an additional application fee in order to obtain prioritised examination. This may well have benefits for companies seeking to enter into collaborations or funding arrangements who need an early determination. It remains a requirement for a US application that the best methodology for practising the patent must be disclosed in the application however once granted it is no longer open to third parties to challenge the patent on the basis that the best methodology was not disclosed in the application. This removes the potential for often rather opportunist litigation based on hindsight and imaginings of the subjective opinions and biases of the applicant. Assignees and organisations to which an inventor is obliged to assign his invention will now be able to file themselves obviating the need to chase down affidavits and signatures from the originator which is likely to make life easier for academic institutions in particular or for companies faced with tracking down retired or departed staff.

Opportunist litigation is also attacked by the wholesale cancellation of "false marking" claims that have flooded the courts in recent times. This is when someone has found an item bearing an expired patent and has brought an action for false marking with respect every single item on the market. Now only the government or those who can show that they have actually suffered damage through the false marking will be able to claim and the damages are firmly restricted to genuine loss. This not only puts an end to often very trivial litigation brought in the hope of a windfall and defended at vast expense but also removes the need for expensive monitoring systems within companies to ensure that goods bearing unexpired patent number do not reach the market. Funds and energy expended on this rather pointless activity can now be directed by the company to more useful activities.

Sometimes several patents cover a particular product and it may be difficult to list these on the item itself accordingly a new provision permits a patentee to mark a product with "patent" or "Pat" and a website address and then list all the relevant patent numbers on the website. This approach is likely to be more informative to the public as well as more convenient to the manufacturer who may also save tooling costs where items containing a similar component can have that component marked before being incorporated into the product rather than having to tool up separately for each product. The new inter partes review procedure will require a higher standard of likelihood of success by the challenger than the current procedures and this too should lead to a reduction in opportunist litigation. A much closer connection between defendants brought together in a joint action will now also have to be shown but there has been some debate as to how helpful this will be. While it may restrict the number of defenders who can be dragged into actions in states with which they have minimal connection or being caught up in litigation where their defence differs substantially from other parties it will also make it harder for small companies to sue all the infringers in one action. On balance however it is likely to be pro-industry and primarily strike at the so-called "patent trolls" who do not themselves work patents but hold them with a view to suing and licensiing others.

As with all new pieces of law there are some potential ambiguities and it will take a while to settle down until we all see what it means in reality -other than a windfall for patent textbook writers as we all replace our libraries. One clause however that seems likely to be subject to further interpretation in court is the prohibition on patents "directed to or encompassing a human organism" . That human life cannot be patented is well understood and is unlikely to prove controversial in the foreseeable future however it is not clear to many of us what "directed to" might mean. One obvious area where this might be relevant would be in developing new techniques or treatments for infertility. For a number of companies and researchers this will obviously be a matter of some concern. Another clause with the potential for uncertainty is the new definition of "inventor" who is described as someone who "invented or discovered the subject matter of the invention" current precedent set by the courts defines inventor as someone who contributes to the conception of the invention. There must also be some concern regarding the concept of discovery in relation to patents as the US has always be more open to this idea than other countries were much greater human intervention is required for something to be a patentable invention.

Another type of patent that is specifically addressed in the act is the business method patent. Tax strategy inventions are now specifically excluded from patentability. It should be noted however that the defence to infringement that the defendant was already making commercial use of the invention prior to the patent application being made which was previously restricted to business method cases is now available to all types of patent. Note however that defendant must produce evidence of use stretching back more than one year before the patent application is made or is published to the public whichever is the earlier. It is not clear why such long-term use should be required but that is what statute says.

A number of opportunities are introduced for opponents to challenge both applications and granted patents in an administrative procedure rather than going to court. This should bring costs down considerably and also help genuine claims to succeed or be defended by being heard before a professional tribunal rather than being faced with the vagaries of a jury or judges unfamiliar with the technology or area of law. Time limits have been established for the process which again should help business certainty and keep costs down although it must be said that the extent of discovery that is to be permitted with respect to some of these procedures would suggest that costs will still be higher than one might expect in say continental Europe. Particularly likely to benefit are those with more controversial technologies or who have in the past felt open to bias for example pharmaceutical originators often feel lay judges and juries are sympathetic to generic arguments as a result of concern at the perceived high costs of their products as opposed to the pure legal argument. It is thought that professional examiners will be less likely swayed.

On the face of it this appears to be a pro innovation statute that will increase certainty and should speed up both the application and the objection processes while limiting the scope for abuse. However it also contains uncertainties and in a number of areas further subsidiary regulation will be required for full implementation. With some of the most significant changes not coming into force for 18 months it is likely to be three or four years before we really have an understanding of how everything will work in practice however it is important to start making preparations now in planning long-term US strategy and in particular to consider those small procedural matters that are being introduced in the near term.

Threat to "Green" patents

Sunday, 31 July 2011

One of the less publicised elements of the international climate change negotiations has been how less developed countries are to be able to access new technologies that would allow them to industrialise while minimising the impact of this on the environment. Suggestions have included restrictions on the ability to patent or on the rights granted to patent holders in this area and the introduction of compulsory licensing schemes. If you are developing technologies in this area then you need to make your voice heard to your member of parliament, trade body and the relevent government departments well ahead of the next round of talks in Durban later this year.

Intellectual Property Magazine asked me to write a short piece on the issue and with their kind permission the text of that article appears below.

Green Technologies and Access for All

Governments around the world are becoming increasingly concerned about how the world will meet its growing energy needs; fossil fuels are a finite resource and cause environmental damage the extent and nature of which remains uncertain but the alternatives are themselves controversial such as nuclear power or seem more promise than reality as the power of the oceans remains unharnessed. Th Te concerns together with a growing world population anxious to share in the benefits of industrialisation have led to a growing movement towards international cooperation to counter the potential damage of unfettered fossil fuel use but also a general spur to innovation in the fields relating to clean technologies.

This urgency has been increased by the adoption of the Kyoto Protocol in 2007 setting out ambitious goals to reduce carbon emissions on a global scale . Some countries have been very active in working towards these goals and the European Union among others has already announced that it is ahead of target in a number of areas. At home we have seen the Scottish Government establish even tougher targets and embrace the opportunity to stimulate the economy through innovation in this sector. Patent offices in a number of countries such as the UK and US have established fast track processes for the sector and since Kyoto the number of patent applications worldwide in clean tech has grown expotentially however some 80% of these applications have come from only six countries-the US, the UK, France, Germany and interestingly, India and China.

The Kyoto Protocol already envisaged the need to ensure that these new technologies were introduced on a global scale otherwise the elimination of emissions in one part of the globe would be made meaningless by increases elsewhere. Developing countries quite reasonably note that the industrialised West gained its current ascendancy without much consideration for the environment and through largely unfettered use of natural resources but now that these matters are better understood and more seriously considered they are being asked to deny themselves the opportunity to build their own economies and raise living standards of their own populations by the same methodology. More controversially they claim that the operation of the international patent system works to penalise them a second time by denying them access to these monopolised technologies. Since Kyoto the climate change discussions have been looking at how access to the new technologies could be assured.

As one of the most discussed ideas was some form of compulsory licensing there was an immediate flurry of studies in the West as to the potential impact of such schemes. The Trade Directorates General of the European Commission commissioned a report analysing the barriers to adoption of new technologies in the sector in developing countries. This report concluded that the existence of patents were not a substantial barrier but rather the lack of economic development in the poorer countries together with the high costs of implementation, uncertainties as to the worth of some of the technologies and the under development and small size of the local market were all considerably more important factors in hindering adoption of new technologies. The report further noted that for those countries now in the throes of industrialisation a strong patent system would actually stimulate local industry and increase the amount of technology transfer that was undertaken . The US Chamber of Commerce commissioned a report from Garten Rothkopf which concluded that compulsory licensing would have a major impact on jobs in the US and would also lead to a significant loss of export markets to US firms. This report also raises the important point of how any technologies subject to a special regime could be effectively defined. It is puzzling that while in the months leading up to the Copenhagen meeting on climate change American business was able to energise both the media and politicians behind their interests in maintaining the strength of the patent system to the extent that Congress forbade the US negotiators from agreeing to any provision that would weaken the status quo while in Europe there was little media or public discussion of the issue at all .

Green tech projects come in all shapes and sizes but those that will perhaps have the greatest impact in offering new ways of generating energy tend to require huge amounts of investment; if the patent system is weakened investors will be reluctant to resource this high risk, high cost type of development. While many governments in the industrialised world including the UK are showing a commitment to the sector it cannot be assumed that they understand the part that the patent system plays and more importantly what it does not do if those involved do not take the time to explain to their representatives why it is so important to them. Not everyone does see a problem with compulsory licensing; just as the US Chamber of Commerce was publishing its report against compulsory licensing Alison Brimlow, the President of the European Patent Office gave a speech proposing that patent owners in this sector be denied the right to monopolise their intentions but that instead they should be entitled to charge only a licence fee to allow others to access their inventions.

In spite of some lobbying by countries such as India, intellectual property ownership was not addressed in the Copenhagen Accord although there was further progress on the question of technology transfer. The Accord agreed to establish "a technology mechanism to accelerate technology development and transfer in support of action on adaptation and mitigation". Over the next year discussions continued on this subject leading up to the plenary meeting in Cancun. Cancun again saw the issue of ownership put aside while the goals of the Technology Mechanism became both broader and less well defined. The working groups this spring have sought to develop processes for how the two bodies to be established under the Mechanism are to work. These are the Technology Executive Committee and the Climate Technology Centre and Network. There are also still questions as to how this whole project is to be funded and managed and how it will relate to the Green Climate Fund. The next full meeting is in Durban at the end of the year when it is planned to finalise the Mechanism. In a statement following a recent meeting of a group of countries including India and South Africa, China and Russia it is made clear that this group is determined to put intellectual property back into the mainstream discussion on climate change so one should expect to see compulsory licensing or even some limitations on patenting in the sector being proposed in Durban. In considering any lobbying activity is important to also keep an eye on any developments in the TRIPS negotiations as that mechanism has already set a precedent for a the compulsory licensing regime for certain classes of medicine.

To be effective any argument should be based on a detailed analysis of the factual impact on your own situation and the broader economy which should also offer practical suggestions as to how the overall goals of scientific dissemination and effective implementation could be achieved by other means. It is worth looking at the proposals for the Climate Technology Centre and Network for inspiration as some of the suggestions for collaborations and stimulating internal innovation may prove to be opportunities rather than threats.

The Hargreaves Report - a way forward for IP?

Monday, 30 May 2011

Prof Ian Hargreaves of Cardiff University was commissioned by the government last November

to assess the suitability of the current UK intellectual property regime for a growing digital economy. This was an important task for, as his report notes, global trade in intellectual property licences currently accounts for 5% of world trade at around £600 billion.

His report has recently been published and makes 10 recommendations for ways in which he believes the current system could be improved to the benefit of the British economy indeed he claims that, were his recommendations to be introduced, UK GDP would be increased by 0.3 to 0.6%.

In brief these recommendations are:

future development of intellectual property regulation should be based on objective evidence
the UK should pursue its international interests in intellectual property and should give the highest immediate priority to the introduction of a unified EU patent court and patent system
a digital copyright exchange should be put in place by the end of 2012
a regime should be put in place to permit the licensing of orphan works
the EU framework permits a number of exemptions to the copyright regime which should be introduced into the UK system
stepss should be taken to avoid patent thickets and obstructions to innovation in particular patents should not be extended beyond their current sector coverage and patent fee structures should be established by reference to innovation and growth goals
a review of the relationship between design rights and innovation should be undertaken within the next 12 months
IP enforcement, education and measures to strengthen and grow a legitimate markets in copyright and other IP protected fields should be pursued and in particular a small claims track should be introduced in the patent county court
accessibility to the IP system for smaller company should be improved and this should involve access to lower cost providers of integrated IP, legal and commercial advice
the intellectual property office should play a part in "future proofing" the IP system including having the right to issue statutory opinions to help "clarify" copyright law.

Some parts of this report are clearly not controversial and will be widely supported, for example the principle that future developments of the law should be based on objective evidence and the suggestion that the rules on protecting innovative design are in need of review. The situation with design right is particularly pressing as the current law is so complex that I was recently told that this could not be included in a specialist intellectual property LLM offered by one of the country's leading law schools as it was simply too difficult. If the country's top law students cannot be expected to come to grips with the system businessmen whose expertise may be in completely different subjects can hardly be expected to maximise their opportunities under it or even to act sensibly in compliance with its strictures. Reform of course will be complex as there exists some overlap with copyright and like copyright design right is subject to a number of international treaties and regulations however that it is complicated does not mean that it should not be addressed especially giving the growing significance of the sector to the economy.

There is generally a lot of support within the UK for a unified European patent court and system and notwithstanding the recent European Court decision progress does seem to be being made on this project after many years gestation. Less likely to attract universal support is the Professor's view that patent coverage should not be extended to technologies that are currently excluded such as business methods and non-technical computer programs. Non-technical computer programs are generally protected by copyright and perhaps it may be more appropriate to consider how those rights could be more effectively protected rather than seeking to bring them within the patent regime. Protection of business methods however is more problematic as there is not really an alternative form of protection available for innovation in this area. Protection for non-technical software and business methods does of course exist in one way or another in a number of other countries however in the US in particular recent cases have tended to restrict its scope so it cannot really be said that there is a groundswell in support for this type of extension although there will certainly be a minority that will be disappointed by this recommendation.

The bulk of the report unsurprisingly deals with copyright matters. It urges the government to make use of current potential exemptions to copyright infringement already permitted under EU legislation such as authorising the use of copyright materials in parody, format shifting, archiving and private research. He would also like to see provisions prohibiting such rights being overidden by contract. The report in recommending the adoption of these exemptions does not favour introducing any payment regime in respect of them. Format shifting involves fees and licences in a number of EU states and these have not generally been considered successful. Prof Hargreaves proposes that the government should also lobby for a new exemption at European level for text and data analytics. Such an exemption would be a great boon to many industries including medical research in allowing more effective data trawling. Such an exemption is likely to encourage the development of more data searching tools and through their use accelerate innovation in many areas while also allowing a more rapid understanding of safety issues. In general the report recommends that activities should be made legal where they are undertaken for private non-commercial purposes or where they do not damage the underlying aims of copyright however it stops short of recommending a wholesale US style "fair dealing" exemption on the pragmatic grounds that it would simply be too difficult to introduce at the necessary EU level. By setting out a general presumption of legality however he hopes that the legislation can in some way be "future proofed" in the face of fast developing technology.

The areas of the report that have received the most attention have been the proposals to set up a digital copyright exchange and to permit the licensing of orphan works, that is works with respect to which an owner cannot be identified. This latter proposal was recommended by the Gower Report but was surprisingly dropped from the draft legislation at the last moment.

It is not entirely clear how a copyright exchange would work and SMEs in particular would want to be sure that it was not a backdoor way of introducing some form of compulsory registration for copyright however the concept of a one-stop shop for all forms of copyright so that if someone wish to use a piece of copyright material they could go to this site, identify the owner and in many cases the specific license terms ultimately obtaining a licence online, combined with a low-cost dispute resolution service could be very attractive. Similarly owners would have an open marketplace in which to display and manage their material. Online transparent license terms are clearly very attractive for a routine matters however more complex or, can one say, innovative schemes, would still require to be individually negotiated. Prof Hargreaves also sees this as a business opportunity whereby the UK which is already a leading provider of content could become a leading supplier of management too. interestingly he sees the role of government here merely as a facilitator in bringing together other bodies to collaborate in establishing an exchange through connecting interoperable databases . He takes this further and proposes that consideration be given to making cross-border licensing easier and encouraging competition between collecting agencies, although of course this would require international cooperation. A regime whereby a "licence" could be obtained for orphan works is also very appealing, the idea being that if an owner could not be identified a standard statutory licence would be obtained with the payment going into a fund to pay the owner if they were ever identified or if not perhaps to be put to general social use. It is considered that this would put much more material into the potential commercial domain.

Prof Hargreaves makes clear that the purpose of this report is to consider intellectual property within an economic framework and rightly notes that SMEs are the source of a disproportionate amount of innovation in this area and making it easier for them to protect and market their ideas would be good for the economy and job creation. Nonetheless although he makes some very welcome suggestions regarding the establishment of the digital copyright exchange and cheaper and quicker dispute resolution mechanisms that would undoubtedly help SMEs, other proposals would be less favourable to their interests. For example he suggests that increasing patent office fees would act as a disincentive to patent or maintain low value ideas so reducing the backlog in patent offices around the world and inhibiting the growth of patent "thickets" around certain technologies-the best known example being the multiple patents involved in even the simplest mobile telephone. High patenting costs already deter SMEs from protecting and so effectively exploiting their innovations so putting the costs up will hardly help. Additionally most innovation comes through incremental improvement rather than the "eureka." moment. It is impossible to tell which innovations will truly prove valuable in the future and it would destroy the growth of platform technologies essential to creating high-growth businesses if only limited ideas in a developing technology are patented. Increasing prices will simply allow the wealthy to create more artificial barriers and to exclude others from entering the market. One might say that increasing renewal fees towards the end of patent life would go some way to discouraging the continued protection of ideas that have not proven commercially valuable but this would probably come too late to allow the idea is to be used effectively by others and would still fall disproportionately on the shoulders of the SME. in any case the report notes that a very substantial number of patents are already abandoned before the ten-year mark. The patent thicket is only a problem in a particular range of technologies albeit those that the report specifically addresses but one should be careful here of letting the tail wag the dog.

Another of Prof Hargreaves proposals that seems unlikely to help the SME would in fact attack the SMEs in the professional services sector which he says is so important to the British economy. He is suggesting that SMEs have access to low-cost integrated intellectual property, legal and commercial advice. Currently many small boutique firms do offer cost-effective and sector specific advice and through their networks can introduce their clients to specialists in different fields leading to an integrated approach. The problem seems to be that SMEs in particular find it difficult to identify the better providers. Clarification of the different professional roles and education as to the questions to ask any potential service provider would seem to be an alternative way forward but will never be a total solution : one client may be very happy with the service offered by a well-known fully accredited adviser only for another to be very disappointed because for some reason it was not a good match or the advice did not suit that particular client's situation. The regime Prof Hargreaves seems to have in mind would again only seem to favour the largest firms as presumably such services would be open to tender which would favour a larger organisation offering a cookie cutter style of advice which the report identifies as one of the problems. This would hit small professional service firms but would also deny other SMEs access to their specialist networks by incentivising them to use a more general provider. Notwithstanding the issues relating to the private sector there does appear to be some opportunity to streamline the various competing public offerings and to expand the IPO's excellent information and outreach activity. Obtaining advice however has not in my experience proved as great an inhibition to the commercial exploitation of innovation as the costs of obtaining patents and then defending intellectual property rights. Tackling high IP enforcement costs would have a much bigger impact on innovation without stifling the development of innovation in the professional service.

Low-cost enforcement measures would of course be of benefit to all types of companies. So often a client has a clear case but is reluctant to go to court for fear of the associated costs. Last year's Digital Economy Act is now being implemented and the Hargreaves report suggests that the dispute resolution mechanisms provided in that act should be monitored for effectiveness as part of a general overhaul of how intellectual property disputes can be handled however it recommends that further reform is not delayed as a result. Small claims specialist procedures would naturally be welcome but other alternative dispute methodology should also be considered. Mediation is particularly appropriate for complex intellectual property cases where each party may have some rights but there may be genuine uncertainties as to how a particular situation has arisen or over potential overlap of those rights. In these cases a commercial solution may be more appropriate than damages or an injunctive order. There may also be scope here for industry sectors to look at establishing their own processes as these may be introduced more quickly and with rules more appropriate to their particular circumstances than would be possible in the short-term through legislation. Obviously these alternative mechanisms would only be useful where both parties were agreeable to the process and resolution between those parties alone was required. A private tribunal or mediation of this type could not give a declaration as against the world, for example as to the validity of any particular right. The IPO already offers a number of underutilised services which could be expanded or used in connection with alternative dispute resolution. Of particular value is the fixed fee opinion that may be requested from the office. The report itself envisages an expansion of the IPO's role and an ADR regime similar to that operated by WIPO would seem a very natural step. T a he report however sees the IPO's future role more in monitoring and promoting the development of IP regulation. While it makes a lot of sense to establish an obligation within the IPO to monitor and review how the law is working and to make recommendations in much the same way as the Law Commission, after all the officers of the IPO have more expertise in this area than any other group, it does not seem to me appropriate that they should be encouraged to provide the proposed statutory opinions. Although the intention is that the opinion should not be binding this would be getting close to lawmaking and something that constitutionally should be left to an elected parliament.

What then of the future? the government has welcomed the Hargreaves report but that does not of course mean that its recommendations will be implemented, the Gower report was also welcomed by the government of the day and less than half of its recommendations have found their way onto the statute book. It seems likely that the government will continue to press for the introduction of a European patent court and it seems equally unlikely that any changes will be introduced with respect to the scope of patents. Other matters such as increasing the exemptions to the copyright regime within the EU framework and undertaking a review of the relationship between design rights and innovation could be adopted very easily and it will simply be a matter of whether the government is inclined to pursue these matters. Moving to slightly more complicated matters improved dispute resolution systems and the licensing of orphan works could again be tackled by the UK Parliament without too much trouble however some of the other proposals are perhaps more complex than the report acknowledges: the concept of treating some patents or patent applicants in different ways to others raises a slew of issues while the copyright exchange while having many attractive features would be complicated to set up, market and manage and it may be optimistic to assume that even with political will anything substantive would be in place by the end of next year however we shall have to wait and see what happens next.

Bribery Act Guidelines published

Sunday, 17 April 2011

The Ministry of Justice has now published the long awaited guidelines to the Bribery Act and as a consequence the Act will become "live" on 1st July 2011. You can find the details at www.justice.gov.uk/guidelines/bribery.htm The guidance says that a proportionate and commonsense approach should be taken and there is a certain amount of backtracking on the extra-territorial effects. For example the text of the act says that all companies that carries out part of their business in UK are covered by the act but the guidance says having a London listing alone will not lead to liability and that even where there is a UK subsidiary it will be a matter of fact as to whether that subsidiary is sufficiently a part of the parent to bring the act into play. This is really too woolly to be helpful and opens the door to less than transparent decisions on whether to prosecute. The guidance on facilitation payments which it is acknowledged are a fact of life in some countries is more helpful and businesses should consider this carefully and draw up appropriate guidance for their staff and agents in those countries where this is likely to be a problem. It is especially important to not that this remains very different from the US regime and it is absolutely not a carte blanche to make this type of payment. The UK governement is keen that businesses play their part in standing up to bribery based activities by cutting off the pool of potential payers and by using approaches to British firms as a way of highlighting the problem to the local authorities and putting pressure on them to reform. The most important step that companies must take is to introduce procedures to educate staff and agents against giving or accepting bribes. If anything does go wrong and a complaint is made that a business has been paying bribes a strong defence can be made if appropriate procedures have been put in place. Six principles are given as to what will generally be involved to ensure the procedures are appropriate although compliance with these is not a guarantee that you will be safe while a plan that does not follow the six principles may be quite acceptable so it will depend on the circumstances and management will have to take a view. In general however the six principles are a good starting point. They are as follows:

There must be top level committment. Generally this will mean that top managment should be actively involved in disseminating the company's policy on the matter and should be available to provide advice and support to those on the ground. They must set the tone that establishes the importance to the company of compliance and the consequences for any individual who flouts the rules. The policy must be seen to be consistant and fairly handled for example it will not be helpful to have speeches on not offering bribes if bonuses are set up in such a way as to encourage excessive risk taking.

There must be a risk assessment. The business should thoroughly audit its activities and identify where there is a risk of bribes being offered or accepted.

The procedures should be proportionate. Having identified the potential risks the main efforts to manage them should be addressed to the areas of highest risk and should be appropriate to the nature of the company. At the very least a code of practice covering the main risk areas for that business, clearly communicated to all staff and partners will be required.

Due diligence. As businesses are responsible for those that act for their benefit great care needs to be taken in selecting staff and business partners and their past business practices should be scrutinised.

Training. Training in the implications of the act for that specific business and tailored for different staff groups should be implemented. As well as telling people what to look out for it should also offer guidance in how to handle difficult situations and who to contact within the company for help.

Monitoring. All procedures and training introduced in relation to the act requires to be regulary reviewed for effectiveness and where appropriate refreshed and improved. If a company does find an inadvertant breach it should consider whether to report itself to the authorities. Staff should be encouraged to bring forward problems to managment and not to feel that they need to cover them up for fear of reprisals. Care should be taken to review the situation before entering any new markets.

Another area that has caused great concern is the issue of corporate hospitality and whether for example a lavish day out at a sporting fixture might fall within the definition of a bribe. The guidelines offer some help on this and the government has made clear that it is not intended to be a blanket ban but that it should be proportionate. Additionally it must be remembered that a bribe is intended to induce improper behaviour so the likely outcome of the hospitality needs also to be considered. Clearly the timing of the event and the nature of the guest list will be as significant as the choice of event. Particular care must be taken in relation to foreign government officials where a stricter set of rules apply.

Clearly the Bribery Act is a significant and complex development for UK corporate governance and must be implemented by each business in accordance with its specific needs ahead of the July deadline. If you would like help with understanding what it means for you or if you would like help in developing procedures for your business please contact me at patricia@bonaccord.eu

Ten tips for selecting a Trademark

Saturday, 16 April 2011

Chosing a trademark for your product or service is an exciting time - rather like naming your baby so you want to get it right as the name will be an important part of defining the way that product or service is seen in the years to come. Here then are some tips to get ou started.

Think of your ideal customer - the mark you choose must appeal to your customer base as it is their attention and loyalty you are looking to attract

What does the mark say about you? - it should be something that reflects the image you are trying to promote and must be credible and constant in relation to that image.

Sustainability - how long to you envisage the product or service being used? If it is something that will satisfy a passing fad this may not be important but if this is something that is intended to remain in use over many years or form the basis for follow on goods and services it must be something that will not quickly appear dated.

Distinctive - it is a legal requirement that a mark be distinctive in order to be protected as a trademark but it is also good business sense as you do not want a potential customer to mistakenly go to a competitor because they got the names muddled. You can check whether similar marks have been registered by consulting the UK trademark register at www.ipo.gov.uk/tm/t-find/t-find-text/ or for Community trademarks at http://oami.europa.eu/ows/rw/pages/QPLUS/databases/searchCTM.eu.do but it is also sensible to check the name you are thinking about on various search engines to see if there are unregistered marks or other unexpected uses of the preferred name already out there. A quick way of checking availability is to check on the availability of domain names and then see if any of those that are already in use are for similar businesses. None of these checks is foolproof but together should give you some confidence

If you are planning to sell internationally do check whether your preferred name has an unfortunate meaning in the language of any of your key markets. "NOVA" sounded a fun name in Northern Europe with a suggestion of being new but in Spain a car called "no va" - "no go" was unlikely to prove a winner.

Make it easy - choose a mark that is short and simple to say and spell so that it can easily be found and recommended. Don't make your domain name a typing test.

Use open vowels - words with open vowels such as AVIVA and ASTRA tend to feel positive in English and are unlikely to be misheard

Take care with logos - if you are using a logo check that it looks good whether it is reproduced on a giant poster or in minature and can be photocopied in black and white without losing the clarity of the image

Words are better than images - if you have limited funds you should usually concentrate on registering word marks over images as a registration of a word gives you protection against any formatting or font of the word but an image is judged only for overall "look " and liklihood of confusion.

Build your brand - just giving something a name is only the start of the process to develop its maximum value so make sure you give the baby a good launch and continue to invest in nurturing it through the years in how you use the mark and develop the brand with a carefully structured long term marketing plan.

Enterprise Training in Hungary

Sunday, 6 March 2011

I am just back from a week as a guest of Semmelweis University working on their enterprise courses.

Semmelweis was founded in 1769 and is the oldest medical school in Hungary. Although originally part of the University of Nagyszombat it is now a stand alone institution named after the innovative 19th century obstetrician, Ignac Semmelweis, and has a student body of nearly 12,000, over 20% of whom come from outside Hungary. They run courses in Hungarian, German, and fortunately for me, English.

They are running a variety of different enterprise courses aimed at both their own students and faculty and entrepreneurs from outside the university and also work with some of the smaller Hungarian universities to share the cost of both training and other technology transfer activities. Entrepreneurial studies are valuable not just in supporting budding entrepreneurs with a current project to develop but metrics kept by the University of Pecs which also runs this type of course demonstrate very clearly that those who attend training of this kind can expect faster promotion and higher salaries than those who do not. A key factor in the Semmelweis training is getting teams together to work on a real project. On the current course the projects include a tool for ensuring hands are fully washed in hygeine sensitive areas, laboratory equipment that would assist more accurate cancer diagnosis, a toxicity assay using zebra fish, and an elegant imaging system that could be used for identifying mechanical failure in complex or hard to reach machinery.

Courses are spread out over several months to allow the projects to be pursued effectively in real time and cover knowledge based skills such as intellectual property and softer skills such as team structure and networking. I had the pleasure of leading some workshops in deal structuring and also one on building an effective network to support your commercial goals however for me the most enjoyable part was working directly with the project teams. It is always more interesting and of course stimulating to work with a real project with real issues than to merely discuss the hypothetical.

Negotiation Skills and Career advice at Stirling

Monday, 21 February 2011

This really seems to have been my week for visiting Stirling both for routine business meetings and for events at the University which must have the most beautiful campus in Britain, with rolling parkland, woods and a swan filled loch.

I was delighted to take part in a careers event around what you could do with a law degree on Wednesday to talk about opportunities in industry which are often overlooked together with colleagues extolling the fun to be had in private practice, the Scottish Government and in investment. Everyone was so enthusiastic about the career path they had chosen that it was tempting to go and sign up on the spot - I wonder how many of us would be doing what we are doing if we had had the opportunity to hear about other careers? I was particularly tempted by the investment option.

David Hoey an employment lawyer at BTO gave some very helpful advice to the students on ways in which to distinguish themselves from the pack by use of social media and by using discussion groups such as on LinkedIn to demonstrate their interest and expertise and to raise their profile with potential employers. This struck me as a great idea I would not have considered. It is a real problem with so may talented people chasing very few jobs for the student to stand out and for the employer to make a selection. Many students of course have qualities that would be of real value to an employer but fail to highlight these in a cv and the staff at the careers service can help them make the most of the experiences they have gained. A useful thing to raise is any position of responsibility from being a Scout leader, to teaching a sport to opening up a shop regularly. You can also highlight people skills such as working with vulnerable people or problem solving. Organisational skills or occasions when you have taken an initiative are also well worth mentioning. Personally I am always attracted to those whose activities demonstrate a long term committment to "giving back" - I find a long term coach more interesting for example than someone who has achieved elite personal status admirable although that most certainly is.

My other reason for being at Stirling University this week was to teach an ongoing course in negotiation to Diploma Students. A lot of what we are doing there can of course be transferred to a job interview - a professional appearance, an active interest, an appropriate level of energy, listening skills and a well constructed argument relevant to the needs of the other party - in this case the potential employer. It is of course harder to get this over in a letter to even get as far as an interview and many of the students on the course are still without training contacts and are naturally becoming concerned. There is a further session on careers in law next month so it will be interesting to hear what advice the other panellists can give.

ASA Powers extended to Websites and Online Promotions

Sunday, 13 February 2011

From 1st March 2011 the Advertising Standards Authority's powers will be extended to policing company websites and other marketing communications through non-paid for online space such as social networking sites like Facebook and Twitter. Companies using these forms of communication will have to comply with the UK Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing known as the CAP Code. This will bring marketing activity on a company's own space into line with paid online advertising, advertisements in magazines and on billboards etc. This has come about after a considerable number of complaints, said to be 4,500 since 2008, were made to the ASA about websites which the ASA was unable to address because company websites were outside its remit. Most of these complaints related to misleading claims but others raised issues relating to the protection of children and other vulnerable people.

It is certainly logical that the regulation of all forms of commercial communication should be subject to the same rules and having a single point of contact for all complaints will make it easier for consumers to raise their concerns and for consistent action to be taken.

Not all web content of course will be subject to these advertising rules. The CAP code already excludes a number of areas such as press releases, editorial content and corporate reports and the new rules will extend the exclusion is to additionally cover investor relations and more controversially "heritage advertising". The latter exclusion is being included as it is thought that old campaigns may have value as social history and websites have the facility to place such material in an appropriate context. Nonetheless it is clear that the ASA will be on the lookout for those that seek to use such historical campaigns in a manner contrary to the spirit of the CAP code.

Sites should be compliant by 1st March and companies should be careful to put in place appropriate protocols to ensure that staff engaged in social media on behalf of the company are well versed in the new rules.

More information on the new rules and assistance with staff training may be found at www.cap.org.uk.

New EU rules on R&D cooperation

Sunday, 30 January 2011

The new R&D block exemption came into force at the beginning of the year. You can find the text athttp://eur-lex.europa.eu/LexUriServ/LexUriServe.douri=CELEX:32010R1217:EN:NOT

Block exemptions are designed to help companies stay within the EU competition rules. If your contract terms fall within the rules set out in the block exemption you are generally OK. Basically what the Commission is saying is that although your contract may have terms that on the face of it seem to restrict competition the advantages of a contract of this nature outweigh the downsides. Even if you are outside the terms of the R&D block exemption you may still be on the right side of the law but the analysis may be more complex and you may be left in some uncertainty. If you find yourself in this position the Commission's new guidelines on horizontal arrangements may offer some assistance but the basic principal remains the same - you must be confident that the benefits to the consumer are greater than the potential reduction in competition in the market, usually this requirement will be met if through the agreement a party is able to do something that it could not do alone.

Many aspects of the new R&D block exemption repeat the terms of the old provisions that it replaces, for example the combined market share of the parties to the agreement must still be under 25% and most of the outlawed clauses such as price fixing and a refusal to supply remain in place but there are important relaxations.

An important new provision covers the situation whereby only one of the parties is going to exploit the results and the other is merely being paid for its work. Where the parties make unequal contributions to the R&D they can also make provision for one of the parties to make a reasonable further contribution for access to the results. A number of the hard core restrictions have also been relaxed or are now subject to some exceptions so offering greater potential for partners to share responsibilities between them for manufacture and sale so long as production is not generally restricted.

An area that had attracted a lot of discussion during the progress of the legislation had been a proposal that the parties should disclose to each other all their IP that might be in some way related to the subject of the research however after receiving extensive public comment on this that provision has now been abandoned and left to the parties to regulate for themselves however it is still a requirement that preexisting knowhow necessary for the exploitation of the results

As with all the Block Exemptions it is likely that practice will lead to further refinements of the interpretation suggested in the guidance notes.

If you have contracts that were designed to meet the needs of the old regulation you can continue with them for a further two years, there is no need to revise them now although if you have any long terms agreements in place it might be as well to review them so that any amendment can be handled in a manner convenient to the project

St Andrews Clinics for Children

Sunday, 2 January 2011

Many of you will be aware of our committment to St Andrew's Clinics for Children ( Scottish Charity 140214) which provides basic and really essential healthcare for children in sub Saharan Africa and I wanted to share with you some of our successes over the last year.

We are very proud to announce that yet again 95% of funds raised were spent on frontline health care for poor children and as you will see from what follows this money is really making a difference.

In Ghana we are working in the isolated Bongo region where a high priority is given to dental care because of high levels of natural fluoride in the water and also to the treatment of urinary schistosomiasis, a worm infection giving rise to pain, bleeding, organ damage and even bladder cancer. About 200 million Africans - mainly children - suffer from forms of this condition but only around 30 million receive treatment. One oral dose per child brings significant relief and we are about to start local dosing. Our annual committment to the project in Ghana in £10,000.

We are working with the Masai around Lake Magadi in Kenya where irregular rains in recent years has caused considerable suffering. The team there provide bednets to help prevent mosquito bites and so malaria and also distribute water treatment tablets to help reduce episodes of debillitating diarrhoea. This work requires £6000 annually.

In the Osun State of Nigeria we support 16 mobile clinics targetted at the under fives. On average the clinics handle over 700 consultations per month at an annual committment of £24,000. For the families we help this is their only real access to modern healthcare and quality medicines.

Together with the Ivo de Carneri Foundation of Milan we support a clinic for mothers and children on Pemba Island in Zanzibar. The clinic has provided around 20,000 consultations and treatments over the last year. Our annual contribution is £10,000.

Our very successful programme for controlling intestinal worm infections in Sierra Leone has now been incorporated into the government's national control programme allowing Sierra Leone to meet the World Health Assembly's target that at least 75% of school age children having access to medicine for the treatment of intestinal worm infections by 2010. Our clinics for young children continue to provide essential services at a cost for 2011 of £18,000.

Finally we are continuing to support the children's ward of St Kizito Hospital in Uganda which was recently expanded to 119 beds. During the last year 6911 children were treated - yes, do the sums! The annual cost per bed is about £850 so our £22,000 per year supports about 26.

From this you will have seen that we will need £90,000 to continue this work in the coming year. While times are undoubtedly tough for all of us if you do feel this is a charity you would like to support we would welcome any donations. We are also happy to talk to organisations about this important work or to suggest particular projects for individual sponsorship such as equipment or a hospital bed. Cheques made payable to St Andrew's Clinics for Children can be sent to PO Box 461 Glasgow G12 8QT or donations made at www.justgiving.com/stacc/donate

More information can be found at www.standrewsclinics.org.uk

Festive Drinks for Drivers

Monday, 20 December 2010

It has become our tradition to attach some festive recipes to our electronic Christmas card. Last year we sent out some non alcoholic cocktails for drivers who are fed up with drinking orange juice for a fortnight. For new readers or those who may have mislaid them I am reproducing them below. We had some great feed back on them including the suggestion that once you were safely home most of them seemed to also work quite well with a shot of vodka or apple brandy!

Rosy Pippin

Half fill an tumbler full of ice with apple juice, add a squeeze of lemon and a dessert spoonful of grenadine. Top up with ginger ale

Hot Cider

Heat 1litre of apple juice with two tablespoons of maple syrup, half a teaspoon of cloves and a cinnamon stick. Serve in punch cups

Champagne Alternatives

Add rosewater to a glass of soda water or 7-Up and garnish with rose petals or make up elderflower cordial with soda water. Serve very cold but without ice

Rosehip Cordial

This can be made up with hot water or served over ice with soda water. In both cases it is enhanced by the addtiion of a small amount of mixed spice.

Hampton Afternoon

Half fill a tumbler full of ice with cranberry juice, add adash of lime cordial and top it off with ginger ale

The Alligator

To fresh lime add 2 teaspoons of Angostura bitters for every 3 squeezed limes. Serve over ice and top up with soda water or 7-Up

Canadian Woods

Combine equal measures of apple and orange juice with two tablespoons of maple srup and 1 cup of fresh lime juice for every 1 litre of juice. Chill well before serving

Autumn Harvest

Make up elderflower cordial with equal quantities of apple and cranberry juice. Add a squeeze of fresh lime and serve over ice garnished with fresh mint leaves.

The Martian

With an electric blender, blend the flesh of half a water melon with two scoops of lime sorbet and serve icy cold in martini glasses

Merry Christmas!!

IBA Publishes Mediation Techniques Book

Saturday, 23 October 2010

I am delighted to say that the International Bar Association Mediation Techniques book that I edited and coauthored was finally published this week - actually on World Conflict Resolution Day which seemed appropriate.

The book is a collection of over 50 short essays interspersed with pages of tips covering the whole mediation process from discussing the possibility of mediation with a client to enforcement and post settlement activities. There are contributions from lawyers all over the world who are active in mediation of different sorts so in addition to the exposition of pure technical methodology we have been able to include essays on how mediation is used in specific circumstances such as in disputes over natural resources and in government contracts.

The prime goal of the book was to produce something that would be of practical use to mediators and those interested in the process at all stages of expertise but particularly to those fairly early on in their career who were looking for practical help in a single cost effective volume as so many of the leading texts seemed only to cover one or two ideas. We also wanted to open a forum to encourage the ongoing exchange of ideas on different techniques which we thought would be particularly helpful to those who were working in small jurisdictions where there were few training providers and inevitably then quite limited exposure to alternative approaches. Accordingly the book is being issued as an e-book - a first for the IBA - which has dramatically reduced the cost and those who purchase the book will also be able to join the interactive forum.

Now the cahllenge is to take it forward...

More information about the book including how to purchase a copy can be found at www.ibanet.org/Publications/Mediation_book/Medbook_home.aspx

Access to Medicines - are generics the answer?

Sunday, 17 October 2010

The IBA is trying to resurrect the committee on Law and Medicine under the hardworking leadership of Nick Kirby. The workshops at this year's conference were not that well attended but generated lively debate and have set up a good basis to move forward. In particular areas of specific concern have been identified for follow up. I took part in the panel on access to medicine in relation to generics. Unusually the panel was primarily made up of people from the generic side of the industry and I was the only speaker to represent the research based industry. Rather than go through the usual arguments defending patents which I felt would probably not be of much interest to the audience, although I do feel that there are real problems of bias and hind sight in the some judgements where patents are attacked many years after grant, I decided to look at the bigger problem of the enormous costs of developing new drugs and the regulatory issues that delay or impede their early distribution. Generics may offer cheaper treatments than branded products but will by their nature be older drugs and often newer treatments may be more effective.

The enormous costs of developing new medicines mean that only the largest companies can bring them to the market preventing new commercial entrants and of course bias funding towards those indications with the most substantial potential returns. These high costs need to be recovered as do the costs of all the failed projects which push the price to consumer or health provider artificially high to the detriment of all. This suggests that more should be done to reduce these original costs. As the highest costs are incurred late in the development process the more that can be done to allow the best compounds to be selected early on the greater the savings that could be made. This suggests that greater investment in effective screening technologies and replacements for expensive and inaccurate animal testing would really pay off. Although suggesting more government funding in the current climate seems quixotic I think this really could be a usful long term investment that would stimulate G8 jobs and make more medicines available for everyone. The more we could understand at DNA/ cellular stage too the more accurately we could predict in which population types the treatments would be likely to be effective.

Government will in combatting disease is also important. We have seen how determination has led to the eradication of small pox and now, this week, rinderpest. The eradication of leprosy seems a genuine possibility and at a more local level Uganda has shown how AIDS cases can be drastically reduced. More can still be done in agreeing common regulatory standards and in ensuring efficient distribution.

Some diseases of course remain woefully neglected. I serve as a director of a Scottish based charity, St Andrew's Clinics for Children, www.standrewsclinics.org.uk, which provides basic healthcare for children in sub-Saharan Africa and we are particularly concerned about worm infestation. Of all the world's neglected diseases the incidence of worm infestation dwarfs the others and yet no new treatments have been developed in recent years. Generally treatments are developed for livestock and then screened for potential use in humans however increasingly pharmaceutical companies are spinning off their animal health businesses and this screening no longer seems to be standard practice. We are already seeing resistance in livestock so it can only be a matter of time before this becomes a major problem for human health too.

What can be done to tackle neglected diseases like the worm issue? The commercial potential is limited as most of the individuals affected cannot afford to pay for expensive medicines but some creative solutions have been proposed. We have seen a growth in not for profit development companies, primarily but not solely focussed on malaria while the US is offering an incentive for companies to get accelerated review of their next product dossier if they register a new product for a neglected disease. Open innovation may be a way forward too ( see my previous post: Patents - heading for expiry?) where knowledge is pooled in different ways. The GSK malaria project has been well publicised but a group of companies are cooperating on an interesting TB initiative too while in Scotland we may be moving towards a counter to the big company approach by bringing together our veterinary and medical schools to work more closely.

We have a lot to think about in how we priortise work for the committee and we are keen to take the discussion beyond the legal community by involving a range of interested parties both in the next conference and in the ongoing work. It is important to everyone that we use the talents available to make a difference and not just to form a talking shop.

CEBBIS Prague 2010

Saturday, 16 October 2010

It has been a busy few weeks for conferences but it was a pleasure to contribute to the recent CEBBIS conference in Prague, which drew together representatives interested in university technology transfer from around the region together with some overseas speakers. I particulary enjoyed hearing about the different support that different science parks can offer as it is clear that start ups that are housed on a park even if only virtually do find success easier to come by.

Generally it seems that most of the problems people face are pretty universal and not geographically specific and I do feel the Czechs in particular are selling themselves short in holding back as there is such fantastic science available to commercialise, and the country has a great reputation for quality science so they will find a willingness to listen to what they have to offer. The government too seems very supportive. I think sometimes people are so anxious to achieve perfection that they are reluctant just to get the ideas out there and see what happens.

I gave a paper on how to ensure that your contracts actually deliver what you need and also ran a workshop on building a network to help you license your technologies. I concentrated on things that could be done easily without any special resources and in particular where there was a very limited budget as few universities have much funding for this sort of thing. I think a few people were surprised - and possibly a little disappointed - to see how much could be done in a very simple manner.

Association of Conflict Resolution Conference

I had a wonderful time this year at the Association of Conflict Resolution Conference, an added bonus being that it was held in one of my favourite US cities, Chicago so I also had an opportunity to visit some old friends and also visit the superb new incubator facility at the ITT/Knapp Center. There were some really innovative papers and some lively sharing of views and experiences from all parts of the mediation community. The international day that preceded the main conference explored how mediation is used in connection with major development programmes such as the building of dams and how the mediators ensure the concerns are heard of those who may feel negatively impacted by the development such as farmers and fishermen who may not have access to sophisticated advice or channels of communication. It is clearly challenging work and it was interesting to hear what sort of problems had been encountered and how they were being addressed by organisations such as the World Bank, in particular by going out and ensuring that those affected knew of the service available. Other topics included the work of Mediators Beyond Borders and schemes for capacity building but due unfortunately to rather relaxed time keeping we were not able to hear from everyone that had been planned which was disappointing.

I found some of the educational programmes very helpful. Sharon Ellison showed us how we could use language in our questions in such a way that we avoided getting a defensive answer while still taking a firm line and pushing the party to address their positions critically. I was not so convinced by a session on understanding how perception of race, clothes etc affects our behaviour. Perception clearly is important but I found the presentation of the results of a recent study rather confusing. the study group seemed rather small and I am not sure that it really led to any advice on how prejudice might be tackled. Ross Madden's reflections on how Buddhist philosophy can help us understand the impediments to settlement however was truly thought provoking. He demonstrated how our refusal to let go acts not just as a barrier to moving on but how it poisons our thinking. Of all the points I took from the meeting however I think the one that resonates most with me was a throwaway from Woody Mosten who reminded us of Sleeping Beauty and the trouble Carabosse caused because she was not invited to the christening - in all our efforts to resolve conflict we should ensure all the constituencies are represented, including all the bad fairies!

I was excited to be invited for the first time to contribute to a panel myself this year. Our panel organised by the Commercial Section was planned to demonstrate to those working in family or other fields how they might encounter and tackle associated commercial issues. I was asked to explore the IP side. We had a good discussion at the session with a number of alternative strategies proposed and will now take the discussion forward to other activities. The Section Chairman, Frances Mossman from Hawaii has lots of exciting plans to develop the Section and will be helped no doubt by the reduction in fees for non US members to only $68 which really makes membership a bargain although as a section we will have to develop more on line events along the lines of the very successful teleconferences run regularly by the Spirituality Section.

Patents - heading for expiry?

Tuesday, 7 September 2010

The following article was published by Nexxus today in their publication for the Scottish business community "Informing Business". Other articles in this issue outlined the need for young companies to have appropriate contracts in place to protect their IP from the beginning notwithstanding the many other demands on their finances and management time - something I heartily endorse and some of the differences between US paten law and international norms.

" The traditional model for drug development assumes a strong patent position to incentivise investors to put up large sums of money for what is an inherently risky proposition. Other forms of intellectual property and alternative methodologies for achieving an exclusive or at pre - eminent market posion are generally considered supplementary forms of protection or are addressed only in the absence of the preferred patent position. Over the last few years however this model has increasingly been criticised as unsustainable. Few blockbuster drugs are coming to market as improvements to existing therapy increasingly become incremental and treatments more patient-specific while the costs and difficulties of patneting continue to grow.

My introduction to thinking seriously about other drug development models came when I participated in a workshop with British and Canadian academics to doiscuss how knowledge is used within the life science industry. Informally known as the Un IP Group, the idea was to set aside our preoccupation with intellectual property and to look at other forms of knowledge management. An account of our discussions was published in Scripted (vol 7, issue 1, p32). The group noted that a great number of businesses operate very successfully without form IP protection sometimes because their business changes too quickly for it to be worthwhile - as with certain consumer goods - or because the life cycle of the industry is too long, such as in the timber industry. Service companies may capitalise on other forms of knowledge such as customer or distribution knowledge or particular internal skill sets. It is clear that when innovation is looked at in its broadest sense, intellectual property forms only one part of the knowledge landscape.

These are not just academic musings as other parts of the innovation community are also thinking beyond intellectual property in assessing value and developing opportunities. It is well understood, for example that investors regard the team as importnat as the technology - do they have development and marketing experience, have they raised and managed investment funds before? An individual's network may also hold the key to success. This summer's UNICO ( the association of university technology transfer officers) conference discussed research demonstrating that deals were most frequently achieved where there was a pre-existing link between the academic and the business partner. I beleive this is crucial not just in relation to cloing the deal but right through the development process to ensure that appropriate advice is obtained at key decision points.

At the end of the day, however, investors will still want to know what sort of competitive risk they face. In a recent article in Landslide (vol 2, No 6, p11) Mark Halligan advances an interesting argument in favour of making more use of trade secrets, which are often easier to protect and enforce than patents. His ideas are compelling in relation to matters that cannot be reverse engineered and maybe we should give more thought to the potential for treating ideas as trade secrets but many products are simply too easily copied for this to be a viable option. It would also be a problem for ideas sourced from academia, where publicatio is a core requirement.

Within the Un IP Group we wondered whether the pharmaceutical industry as opposed to life science more generally, was an outlier from the industrial norm and, notwithstanding the benefits of looking at other forms of knowledge management for other industries pharmaceuticals whould have to remain patent dependent.

In fact pharma is looking at alternative models - companies like Pfizer are buying up generic businesses while Christopher Viehbacher, CEO of Sanofi told Forbes Magazine in July that he was looking for opportunities that were not based on patents so that the company would avoid the sudden drop in sales that generally follow patent expiry. He felt that Sanofi's resources would allow the company to take advantage of opportunities that a smaller company might be unable to realise. the example he gave was of their acquisition of Chattem, a company with expertise in marketing non prescription medicines, which could allow them to take their allergy product, Allegra, into the consumer market. While relying on strong consumer branding is certainly an obvious route, one can think of other opportunites- say where a company has unusual skills or service models or where it has a strong position in relation to scarce raw materials or production expertise.

Other companies are beginning to look quite seriously at models of open innovation with the Open Innovation Symposium held recently in Montreux attracting international participation including senior executives from a number of substantial pharmaceutical companies. As yet it is not clear how far along this road they would be prepared to go. In the past there have been various attempts to bring industry and academia together to develop precompetitive science and most recently GSK has announced a strategy based on open innnovation in relation to develoiping better products for malaria and other tropical diseases. This has included an "open lab" with seed funding for new research and making 13,500 potential anti-malarial compounds available for scientists to exploit. It is early days and one would not expect such a new approach to be adopted with respect to a company's major revenue drivers until such time as it has been fully "debugged" in relation to some of its more peripheral activities. One area where I do expect to see a greater adoption of open innovation techniques however is in relation to "sphere crossing" whereby companies look at other sectors for ideas and technologies to improve or combine with their own. We are already starting to see this is relation to pharmaceuticals, analytical services and bio informatics, while increasingly novel methodologies are being explored for remote diagnosis and monitoring.

It would be naive to believe that in the short term the industry, and more importantly perhaps investors, will move dramatically away from patents and the traditional development approach. Indeed even within the Un IP Group we found it very difficult to focus our discussions without constantly referring to the traditional patent model! Nonetheless, there are clearly opportunities here for fresh thinking about how we do business and the sorts of products and services we could be developing. Some businesses are already developing ideas in this space and it will be interesting to see how the industry at large reacts as their ideas come to fruition.

New Block Exemption for Vertical Agreements

Sunday, 29 August 2010

In general agreements are unlawful in the EU if their intent or effect is to distort or restrict competition. An agreement is exempt however if in spite of the restricitions contained within it it can be shown to be in the overall interest of consumers. It is up to the parties to assess whether a particular agreement is within this exemption but to help them the Commission issues block exemptions for particular types of agreement. If your agreement follows the rules laid down in the block exemption for your type of agreement you will normally be OK. Block exemptions are issued for a limited time and are then reviewed. This summer saw the previous block exemption for vertical agreements replaced with a new one (Regulation 330/2010) that is to remain in force until the end of May 2022. Vertical agreements are agreements between different levels in the supply chain - most commonly distribution agreements.

The new Regulation largely repeats the the arrangements authorised by the last one but there are three very important changes. Firstly the 30% market share is now extended to the purchaser as well as the seller ie. both parties must fall below this threshold for the agreement to be exempt. This will be helpful to smaller companies who may feel bullied by powerful purchasers into accepting terms they do not like. Secondly retail price maintenance is now permitted in specific circumstances such as for a new product launch. The other changes relate mainly to a growing recognition of the importance of on line trade. In general on line trade is considered passive and so sales outside an agreed territory cannot be banned or diverted by the supplier unless the distributer undertakes some more overt act such as mail shots into the other territory. Interestingly the guidelines say that merely making your website available in another language will not be considered soliciting trade in that other country - this seems very odd to me.

As ever you should take advice if you have concerns about any of your agreements. Agreements that were exempt under the old block exemption can remain in force until next May but must be reviewed by then if they are to continue to benefit from the dispensation.

US IP Update

Monday, 23 August 2010

Having recently returned from the ABA Annual Conference it seemed a good time to post an update on the issues that folk are excercised about in the US at the moment.

Cipro and Reverse Payment Settlements

The situation here is that a patent holder faced with a generic challenge may reach a settlement involving payments from the patent holder to the generic house and a delay by the generic house in launching its intended product. Some people, including the Federal Trade Commission, believe such settlements which are sometimes called "pay for delay" are anticompetitive but the courts have largely upheld them so long as the "delay" relates only to matters covered by the patent in dispute. The position is complicated further as courts in different parts of the country are taking slightly different approaches. The FTC with which the Sixth Circuit is sympathetic wants this sort of settlement banned outright as "per se" anticompetitive, the Department of Justice has come round to the idea that they should be presumed to be anti competitive - ie the company wishing to maintain the agreement would have to show in those particular circumstances the agreement was not anticompetitive. The issue is particularly sensitive as the cases have involved pharmaceuticals and there is concern that prices may be kept artificially high as in the absence of a settlement some of these patents may well have been struck down in court proceedings. the FTC has now turned to Congress and various attempts have been made to introduce legislation to ban this type of settlement but so far they have not come to a vote.

Bilski

There is probably not much more to say about this case. IP lawyers around the world had got very excited about this as we had assumed the US Supreme Court would take the opportunity to clarify what sort of business method could be patented. The US used to be very sympathetic to patenting business methods but had gradually been becoming stricter on this and a test grew up that to be patentable an idea had to be linked to a machine or had to result in some sort of transformation into a different state or thing. Bilski involved a system for hedging risk in commodity transactions. Unsurprisingly the Appeal Court refused to countenance it, and the Supreme Court was not impressed either but interestingly did say that the machine or transformation test was not definitive. The result is that nothing much has changed except there is likely to be even more uncertainty going forward which will be particularly difficult for small companies who cannot risk patent litigation or for those seeking funding for ideas in this area. A further chilling effect is that four of the judges seemed to be pretty unenthusiastic in general about business method patents.

Right of Publicity Claims

There was a lot of debate about "celebrity endorsement" and use of pictures of famous people or people who look or sound like them. Unsurprisingly a release is generally required to use somone's image in the course of trade or in advertisements and using pictures of people who are the subject of a news article is OK as constitutionally protected free speech. Parody and Art are also generally acceptable which seems strange as artists sell their works but care should be taken that use of real people in works of fiction should only be fleeting. The right to control one's image after death varies from state to state and can extend for a considerable period with some states providing for up to 100 years protection. Where the matter is covered by common law the situation is less certain. Sound -alikes and Look -alikes may also give rise to claims based on the liklihood of confusion.

Speaking at conferences in Prague

Friday, 30 July 2010

I had the pleasure of being back in one of my favourite cities recently to speak at the 2nd MedChemBio Seminar organised by the IOCB in Prague. The primary papers related to the the chemistry and biology of DNA. Jiri Bartek of the Institute of Molecular and Translational Medicine at Palacky University, Olomouc gave a fascinating paper entitled "Genome maintenance mechanisms in disease pathogenesis and emerging targets for personalised therapy". The theme continued with Lumir Krejci's paper on "DNA repair as a target for medicinal chemistry" based on work undertaken at the National Centre for BioMedical Research at Masaryk University in Brno. Michal Hocek of the IOCB's own reseach centre completed the line up with a challenging exposition of "Novel base-modified nucleosides and nucleotides. From Cytostatics to functionalized DNA". What became clear to me from the papers and surrounding discussion was how close we now are to genuinely personalised medicine - not so much from the point of seeing different medicines for every person but from being able to select the treatment most suited to each individual and the very different responses to treatment that can now be predicted.

One of the great joys of going to these conferences however is not just the opportunity to learn about cutting edge science but also to meet interesting individuals. There was a good interaction at this meeting between academics and industry and one company in attendance that might be of interest to readers is BioTest s.r.o. www.biotest.eu This company offers a range of preclinical services including a wide range of animal work. If you are interested in finding out more about them contact their CEO Jan Zabsky at zabsky@biotest.eu.

I had been invited to talk about the different approaches being taken by academic institutions around the world to commercialisation. To some extent this may reflect particular cultures but also local needs - some universities are focussed on local regeneration and job creation while others may be more interested in seeing their science being used or in increasing their prestige, or in widening the horizons of their students. Even within the same instiution departments and individuals may have very different goals. One thing is clear and that is successful commercialisation requires the development of good networks. I could not go into this in much detail at the conference beyond looking at some of the general techniques that could be used however I have been invited to run workshops on this topic at the opening conference of the Central European Branch of the Innovation Support Project in September. You can find out more about what should be a very lively conference at www.cebbis.eu/conference. I hope to see many of you there.

Bribery Act: Implementation Programme

The UK Bribery Act will not now come into force until April 2011. The Government will launch a short consultation process in September and it is important that those of you who have concerns about aspects of the Act that may seem unclear or to have implications for legitimate activities should make sure you submit your thoughts as part of this process. Government will consider submissions made during the consultation in compiling the guidance notes that are planned to be issued in January. These notes are intended to help companies understand what steps they should take to demonstrate that they have done all they reasonably can to prevent foreign partners becoming involved in bribery and so avoid liability for any activities that those partners might still engage in in spite of the UK company's efforts however if other aspects of the Act appear to be causing confusion it is possible that the guidance might be extended to other areas too.

Bonaccord at BioForum

Monday, 7 June 2010

I was delighted to be invited to speak at this year's BioForum in Lodz on the topic of maximising your return from licensing deals and enforcing your rights. Given that there are many companies trying to make their technology visible in a crowded market and to attract investment or commercial partners it is natural that small companies may clutch at any decent offer that comes their way however with a little thought it is possible to increase your return substantially and often at little cost to your potential partner. In my presentation I encouraged companies to think about which parts of their technology they licensed to which companies and for which markets, to consider how they structured the financials and the other benefits of the deal and in particular to look at how their potential partner could help them with their business beyond the straightforward deal. It is all very well however to structure a fancy deal you still have to enforce it and the cost traditionally involved may be a barrier to many small companies. I discussed a number of methodologies for ensuring that you actually get the benefit of the deals you negotiate. I looked at the various dispute resolution mechanisms available and also at how you can use contractual terms to avoid problems down the line, ensure early discussion of changing conditions and be alert to problems ahead. A key factor is anticipating where you think the problems will arise and crafting your resolution clauses to meet that perceived need rather than a blanket resolution clause at the end.

One of the most interesting aspects of these conferences is the opportunity to meet with exciting new companies. Two companies of particular interest this year were Blirt from Poland and Generi Biotech of the Czech Republic.

Blirt (www.blirt.eu) offers a wide range of proteomic, analytical and synthesis services as well as undertaking their own research. In proteomics they offer isolation of novel enzymes, expression systems for protein expression optimisation and development, purification optimisation, enzyme engineering, DNA sequencing and lyophilisation. They also provide a range of enzymes for industry and researchers in molecular biology.

Generi Biotech, (www.generi-biotech.com), also combine services with independent research. The company has particular expertise in the synthesis and application of oligonuclotides and in fact is the only Czech commercial producer of oligonucleotides which they offer for sale together with probes to other organisations within the country and abroad. All their processes have been ISO 9001 certified since 2006 and given that they are customers for their own products they truly understand customer service. They also provide quantitative PCR, DNA sequencing, molecular cloning and services related to cell cultures such as such cytotoxicity testing and mycoplasma detection. Customised research programmes and biological identification such as cell line authentication and paternity outsourcing are also offered.

UK Bribery Act receives Royal Assent

Monday, 19 April 2010

The UK has been criticised for some years for its failure to develop a robust anti bribery regime and in 2009 fell to an embarrassing 12th in a list of the least corruptible countries in Europe prepared by Transparancy International. The country's reputation was further damaged by revelations relating to arms sales. The new Act however takes Britain into the forefront of the international anti corruption drive in terms of breadth of coverage and severity of penalties.

Many businesses may have failed to take heed of its passage on the grounds that it did not seem to be relevant to them however the breadth of its scope means that it will be relevant to nearly every business in the country. The Act outlaws both the giving and receiving of bribes and it is clear that it is also intended to prohibit excessive hospitality. The corruption of both public officials and private companies is covered and unlike the US equivalent legislation making payments to facilitate the performance of "routine government action" becomes an offence.

Companies that do business in the UK or are otherwise connected with this country will need to take great care in the appointment of agents and distributors both here and abroad. Unless the company can show that it had effective procedures in place to prevent bribery it will be liable for offences committed by its employees and business partners, including joint venture partners. The penalties are extremely severe with unlimited fines for companies and possible prison sentences for individual managers.

What then must companies do? The Act provides that further guidance will be issued before the Act comes into effect however as substantial procedural changes will be required companies should be starting to plan now. Firstly they need to consider how they will conduct due diligence on potential partners and how they will raise the issue with existing partners. Codes of practice will need to be developed for staff and partners along with appropriate training programmes. A guide to the sort of standards that might be required can be found on the website of Transparency International. Wording will need to be added to standard commercial contracts committing the partner to ethical standards compatable with the Act and the company's internal code and consideration given as to how existing contracts can be brought into compliance.

Clearly this short note can only highlight a few key features of the legislation. For a more indepth discussion of what this could mean for your business please contact me on 0131 202 6527 or at enquiries@bonaccord.eu

Negotiation Skills - an upsurge in demand

Monday, 12 April 2010

I'm getting a lot of demand just now for negotiation courses. I have done three very different courses for very different groups in the last couple of weeks - a Law Society course for legal trainees, an introduction to various techniques for the Licensing Executives Society in Prague and a workshop in more advanced techniques for members of the Writers to the Signet Society in Edinburgh. Most recently I have had a couple of enquiries from academic groups.

Clearly for different groups different aspects will be of particular significance. Junior lawyers will not generally be entrusted with the major part of the business deal but will often have to organise the logistics, take effective notes and may be involved in preparing the brief. They also need to understand the basic concepts to build upon as they take on greater responsibility and want to enrich their skills. For the licensing executives understanding how to most effectively present the proposal, making offers and evaluating them are important. They may also have concerns about managing expectations and meeting the non commercial interests of their principals. There are a number of different topics that can be addressed with more experienced groups. In this particular session we looked at using business techniques to support negotiations. Another popular topic is looking at how to break impasse and dealing with difficult people and one thing we did look at was understanding ourselves and our own triggers with a view to ensuring we are not that difficult person holding up the deal.

If you are interested in improving your negotiation skills do contact me on enquiries@bonaccord.eu or +44 131 202 6527

Advice from Successful Entrepreneurs

I have had the great pleasure in recent weeks of attending presentations by a number of successful entrepreneurs. The most interesting was Azeem Ibrahim the Chief Executive of ECM Investment and owner of The European Commerce and Mercantile Bank. He explained how he went from a teenage investor in privatised utilities to an adviser to governments around the world while maintaining the family and social life he wanted.

He recommended setting goals for yourself and writing them all down in detail for each aspect of your life - health, social, family, spiritual and business. He favours setting ambitious goals that will continue to inspire you with more modest staging posts along the way so that you are always achieving but always heading to that major goal. He sets himself 5, 10 and 15 year goals and then plans how to get there. He reviews them regulary and the progress he is making towards them. Each day he tries to take another step towards his targets. He strongly recommended undertaking detailed research which he said always trumps experience and encouraged people to believe in themselves - everyone has failures along the way to success.

He had some interesting comments to make on hiring staff. He feels it is crucial to hire people who share your vision and to incentivise them to grow the business whether through equity or commissions. he sets a mission statement for his businesses and ensures that everyone within them understands the mission and their role in achieving it. He warned however that technology based businesses had to maintain some flexibility in order to be open to the opportunities that might open out for that technology as it develops.

He was adament that one should not accept failure but that success comes through sheer bloodymindedness an opinion shared by Brad Burton the exuberant founder of 4 Networking. Mr Burton's prime advice for anyone getting going in business is nto to hang around waiting on the telephone to ring or on the perfect opportunity but to get out and do it, meet people, engage with others and generate that business. Like Mr Ibrahim he believes your passion will show through and that if you work hard enough all things are possible. They both encourage people to go out and meet others whether or not they appear at first glance "useful" as it is surprising who knows who or may share that passion or who can introduce you to something even more fascinating.

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