Wednesday

Inventor's Rights

Question 1
If an employee of a company in India makes an invention, do the rights in the invention automatically belong to the employer? Does the employer have to pay an “inventor compensation” to the inventor (as in Germany)?

Answer 1
In India, derivation of title has to be based on a contract between the inventor and the employer company. Typically, the title on the invention is derived through the employment contract or a deed of assignment. The employment contract must specify that the title of the invention developed during the “course of employment” is transferred to the employer. No separate consideration is required. The employer does not have to pay an “inventor compensation” separately.

Freedom To Operate (FTO)

Question 1
How can a potential product be cleared of patent landmines?

Answer 1
Patent landmines can be cleared by a Freedom to Operate (FTO) report. FTO begin first by conducting a search of patent literature for issued or pending patents and obtaining a legal opinion on whether the product, process or services may be considered to be infringing an existing patent. This can be done trough companies that offer FTO analyses.

Question 2
What are the limitations of patents?

Answer 2
The Limitation in a patent may arise when the patent protected are:

1. Territorial - Certain companies limit their protection according to their business strategies. Therefore, if the concerned is not covered by the patent, there is FTO.

2. Limited by duration - The maximum period of 20 years are given for protection.
After the expiry of the term, the patent is considered to be in the public domain and maybe used freely by any one.

3. Limited scope - The most important part of the patented document is the claim which determines the scope of the patent and all the aspects of an invention. Aspects that are not covered by the claims are not considered to be patented.
If there are one or more patents that would limit the FTO, the company has to rely on other common strategies to obtain the FTO, such as:

1. Purchasing the Patent or In-licensing
This has to be done by obtaining a written authorization from the patent holder to use the patented technology for specified act, market or period of time. The agreement would largely rely on the terms and conditions.

2. Cross – Licensing
This is done when 2 companies exchange licenses. However, this requires confidence in both companies and needs a well protected patent portfolio that is of value to the potential licensing partners.

3. Inventing Around
An alternative way, is to invent around the inventions by making changes to the product or processes in order to avoid infringing on the patents owned by others. The FTO operates around the processed patents and are limited by it. Therefore, it is possible to derive an end product which is of the same or similar result without infringing or arising the need to pay licensing fee to the owner.

4. Patent Pools
This usually involves 2 or more companies practicing the related technology, whereby, the put their patents into a pool to establish a clearing access for patent rights. These are normally used by companies for inventions that are essential to comply with the certain standard specification.

Question 3
How is a Freedom to operate derived from patent protection?

Answer 3
The new product can be patentable if there are no patents blocking the access to the market. Instead of keep the new technology as a secret, it is well of protected by the patent to ensure a greater degree of freedom to operate. The patent will provide the company with the exclusive rights over the new technology which would ensure that nobody else can use it without prior authorization. No one else will be able to obtain exclusive rights over the technology in the future.

There is a limit on the extent which a patent owner has the freedom to operate or use such patented invention. It does not provide the right to commercialize the protected technology but only the right to exclude all others from commercializing it.

There maybe be overlapping or complementary patents owned by different parties that are mutually blocking the access to the market. In addition there may be government regulations that are not directly concerned with the intellectual property that may restrict the access to market of a patented invention. Despite this, it is important to stress that "freedom to operate" is one of the reasons why a number of companies apply for patent protection.

Question 4
What are the benefits of a FTO?

Answer 4
All the steps are taken with the priority to minimize facing any potential risk and expensive litigation. All companies are well - advised to look into the matter earlier during the research and commercialization process. Discovering the FTO prior to the launching a new product is, therefore, a way of minimizing but not eliminating the risk of your product infringing the patents owned by others.

It is important to point out that a certain degree of certainty to the "freedom to operate" will not be attainable. A good patent search may provide a company with some indication that a new product is unlikely to infringe other patents, but no patent search is perfect or full proof. There is a practical limit to the time and money that can be spent on a search.

Clerance Opinion

Question 1
What is a clearance opinion for a Trade Mark to be registered in Malaysia?

Answer 1
Legal opinion given to prospective or trademark owners to identify the legal risks associated with using a particular trademark.
Risks - Possibilities of infringing an existing mark and hence being sued, and likelihood that an application for trademark registration being rejected.
Legal opinion - Immediate advice on risks in adopting a given mark.
Written legal opinion - maybe used to deter companies from suing for infringement by showing that at least one attorney has already decided that the marks are not confusingly similar.

Monday

Question 1
We note that Luxembourg (LU) is listed as a designated state under European (EPO) regional protection and on the other hand, the deadline to file a national phase application in LU is 20 months from the priority date i.e. 16 September 2009 (priority date is 16 January 2008). Should the national phase application in LU not be filed before 16 September 2009 and instead an EP national phase application be filed before 16 July 2010 (30 months from the priority date), can LU be named as a designated state at the EPO based on the EP national phase application?

Answer 1
LU can be named as a designated state at the EPO only if EP has been designated in the PCT application. However, under R.4(9)a)i) PCT “the filing of a request shall constitute the designation of all contracting states that re bound by the PCT on the international filing date”.

Question 2
We note that Tanzania (TZ) and Uganda (UG) are listed as designated states under ARIPO regional protection and on the other hand, the deadline to file a national phase applications in TZ and UG is 21 months from the priority date i.e. 16 October 2009 (priority date is 16 January 2008). Should the national phase applications in TZ and UG not be filed before 16 October 2009 and instead an ARIPO national phase application be filed before 16 August 2010 (31 months from the priority date), can TZ and UG be named as designated states based on the ARIPO national phase application?

Answer 2
Even though the deadline for filing PCT national phase applications under Chapter I in Tanzania and Uganda is 21 months from the earliest priority date, it will be possible to file a PCT regional phase under Chapter I at ARIPO and designate Tanzania and Uganda. The deadline for filing a PCT regional phase under Chapter I at ARIPO is 31 months from the earliest priority date.

Question 3
The details of regulatory process in Indonesia for Imported Food and Imported Cosmetic Products.

Answer 3
We are pleased to provide herewith the details of regulatory process in Indonesia for Imported Food at the Indonesian National Agency of Drug and Food Control, including the requirements and the related timelines and validity periods.

Requirements for registration:

1. Appointment letter from manufacturing company (original) in origin country to the Indonesian local importer/distributor. The said letter has to be legalized by the Indonesian Consulate.
2. Health Certificate (original) from a competent institution (i.e. Ministry of Health, Food & Drug Agency) of the origin country
3. Valid written laboratorial analysis report (original) of the product. The said report should include:
a. Nutrition substances (Nutrition claim)
b. Any substance claimed and mentioned in the product label
c. Chemical examination
d. Microbiological and metal filth
Please note that the said laboratorial report is considered valid within 6 months from the date of the analysis.
4. Product sample including the label that will be used, containing all necessary information of the product.
5. Application Form (which we will provide)

Timeline for registration:

The registration certificate will be issued approximately 3 months from the date of the submission of the requirements items 1 – 5.

Validity for registration certificate:

The registration certificate will be valid for 5 years unless there is a new development
of knowledge and technology or new regulation that is applicable to replace the
existing regulation.


Question 4
Could you provide me with the details of regulatory process in Indonesia for Imported Cosmetic Products.

Answer 4
We are pleased to provide herewith the details of regulatory process in Indonesia for Imported Cosmetic Products at the Indonesian National Agency of Drug and Food Control, including the requirements and the related timelines and validity periods.

Requirements for registration:

1. Appointment letter from manufacturing company (original) in origin country to the Indonesian local importer/distributor. The said letter has to be legalized by the Indonesian Consulate.
2. Official Certificate (original) from a competent institution (i.e. Ministry of Health, Food & Drug Agency) of the origin country evidencing that the cosmetic has been authorized to be sold to public in its origin country
3. Original letter of GMP (Goods Manufacture Practice)
4. Product sample including the label that will be used, containing all necessary information of the product.
5. Application Form (which we will provide)

Timeline for registration:

The registration certificate will be issued approximately 1 month from the date of the submission of the requirements items 1 – 5.

Validity for registration certificate:

The registration certificate will be valid for 5 years unless there is a new development of knowledge and technology or new regulation that is applicable to replace the existing regulation.

Question 5
Is it possible to reinstate a lapsed patent in Thailand?

Answer 5
It may be possible to reinstate a lapsed patent in Thailand, depending on how long ago the annuity payment was missed.
As provided by Section 43, Paragraph 4 of the Thai Patents Act, in the case of non-payment of an annuity, the Director-General of the Thai Patent Office shall report to the Patent Board and request cancellation of the patent. When the Board decides, they will send a copy of the decision to the patent agent. The patent agent may appeal the Board’s decision within 60 days from receipt thereof. If no appeal is filed within the deadline, the patent will be deemed abandoned. If it has already reached that stage, there is practically nothing we can do.
However, there is often a backlog at the Thai Patent Office. If the Director-General has not requested the Board to cancel or, the Board has not made any decision yet, there may be a chance. Once the decision is issued, we may appeal explaining that there have been extenuating circumstances (for example: that the patentee changed agents and, did not intend to abandon the patent). The Board would most likely ask the applicant to pay the annuity fee due. The patent would then be reinstated.
We would have to look at the status of the patent to see what may be done. We would be pleased to advise further when you can provide us with either the patent number or application number.

Question 6
Our clients have asked us about filing a patent application in Malaysia. The national phase deadline has passed. Is there any option for late filing - or extension from the UK part of a granted EP patent - or and Australian one?

Answer 6
We confirm that for cases wherein the Malaysian National Phase entry deadline has passed, it is possible to re-instate the said time lapsed application, according to the following procedure.

The Procedure for Reinstatement:

Section 780(a) of the Act deals with reinstatement as follows:
An applicant of a PCT application designating Malaysia must before the expiration of 30 months from the priority date submit to the Malaysian Registry a copy of the international application in English and pay the prescribed fee, failing which the international application will be considered withdrawn for the purposes of the Malaysian Patents Act. Once deemed withdrawn, the international application may only be reinstated where:
1. the applicant has made a request in writing to the Malaysian Registry by
a) paying the prescribed fee which is the standard application fee, and submitting a copy of the international application in English
b) a written statement specifying the reasons for failure to comply with national entry requirements
c) a supporting declaration or other evidence;
2. the said request (item 1) was made within 2 months from the date of removal of the cause of the failure to meet the 30-months deadline, or within 12 months from the expiration of said deadline, whichever expires earlier; and
3. the Malaysian Registry is satisfied that the failure was unintentional.
4. a payment of the prescribed fees in addition for late filing is made.
We trust that the above-mentioned explanation has sufficiently answered your question.

Tuesday

Breach Of Confidence And Advertising

Question 1
How do breach of confidence action arise?

Answer 1
Breach of confidence actions arise where someone receives confidential material in circumstances imposing an obligation on them not to disclose that material without the permission of the person who imparted it, and they pass this material on. Therefore, confidential ideas for marketing campaigns can be protected.

Question 2
What needs to be proved in order for a breach of confidence action to succeed?

Answer 2
In order to prove breach of confidence it is necessary to show that (a) the information in question is inherently confidential, (b) that the information was imparted in circumstances in which it was clear that there was a duty of confidence, (c) there has been (or is likely to be) unauthorized use or disclosure of the information, and (d) the information has commercial value (not necessarily monetary).

Question 3
Can breach of confidence actions protect ideas?

Answer 3
Yes, provided they are sufficiently developed to have commercial value and so as long as they remain confidential.

Question 4
Is there anything an agency can do to reduce the risk of its ideas being ripped off?

Answer 4
Yes, there is. First of all, before any pitch, and agency should persuade its prospective client to sign a “confidentiality letter”. Secondly, all documents being used as part of a pitch should be marked clearly with wording such as “Private and Confidential – copyright and property of [name of agency] – not to be copied, given to third parties or used without [name of agency] prior written consent”. Thirdly, all employees and freelancers should be contractually obliged to maintain confidentiality in all agency information, marketing proposals etc.


Question 5
When is information confidential?

Answer 5
The information must be private and secret. The fact that a document is marked “confidential” does not mean that it is necessarily confidential and vice versa.

Question 6
Who can be sued for breach of confidence?

Answer 6
The person who receives the confidential information and abuses the confidence in some way may be sued as the “primary infringer”. In addition, anyone receiving information from a primary infringer has a duty to respect the confidence when he knows that the information is confidential. Even where someone obtains such information innocently, it may still possible to obtain an injection against them to prevent the information being used.

Question 7
What defences are available?

Answer 7
A breach of confidence action will not succeed where it can be shown that (a) the information was already in the public domain (such that it is no longer confidential), (b) authority has been given to publish the information, or (c) disclosure of the information was in public interest.

Question 8
What are the remedies where a breach of confidence is proved?

Answer 8
Provided none of the defences apply, the person whose confidence has been breached may obtain damages and an injunction to prevent disclosure of the information. An injunction will only succeed where there is still information to protect, in other words, if the information has net yet been disclosed (since it has been disclosed, it is no longer confidential).

Rights Of Inventor-Employee

Question 1
What are the similarities/differences with regards Patent Law pertaining to the rights of Inventor-Employee in Malaysia and United Kingdom?

Answer 1
Malaysia

Employees, work under the term of an employment, are normally bounded by an employment contract with the employer. Most inventions are created by the employees.

Sec 20 of the Patents Act 1983 in Malaysia, explains the rights of the employees for their invention during their employment. Sec 20(1) gives the employer the right to obtain a patent or invention, when the work is done under the employment which is bounded by the contract. However, if there is an absence in any provision of the employment contract, the inventor would be able to receive the remuneration for the invention.

In certain circumstances, the invention may fetch a greater economic value than what was reasonably foreseen, the inventor can be entitled to equitable remuneration which may be fixed by the Court in the absence of an agreement between parties.

In circumstance where the employee invents something on his own free will even when his employment contract does not require him to take part in any inventive activities. The rule is that, if he goes on to invent something, in the field of activities of his employers', using data and means placed at his disposal by his employer, the invention is still deemed to be accrued to the employer, following Sec 20(2).

However, if the parties fail to produce an agreement to support this, the Court will take into account the employees emoluments, the economic value of the invention and any benefits derived from it by the employer to provide the employee with his equitable remunerations.

It is clear that the employers do not have to pay the employees any inventor's compensation as they have the right to their work, so long as the employment is bounded by the contract that excludes this.

United Kingdom

In the UK, Section 39 of the 1977 Act, explain the right to employees' inventions. In general, it gives the employer the right to own the inventions made by the employee during the course of his employment or even falling out of his lines of duty.
Sections 40(1) and 40(2) of the Act provide employee-inventors with a statutory right to compensation where their inventions are exploited by their employers.

Sec 40(1) and (2) allows employees' to make an application to the Court within the prescribed period that the employee has made against an invention belonging to an employer, for which the patent has been granted. If the benefit derived from the patent is of outstanding and inadequate to the employer, the Court will order the employee to compensate the employees in addition to the benefit derived from the relevant contract.

In the first situation, employees are entitled for compensation is set out in Sec 40(1). This states that where an employee has made an invention belonging to the employer via Sec 39(1), the employer may be entitled to compensation. For an award for compensation to be made, the employee must show
(i) that the patent is of benefit to the employer
(ii) that the benefit is outstanding
(iii) that it is just that the employee be awarded compensation.

In the second, an award for compensation may be made to an employee is set out in Sec 40(2). This provides that additional compensation may be paid where the initial entitlement to an invention lay with an employee but the employee assigned or licensed the invention to the employer. The employee must demonstrate that the remuneration for the transaction is inadequate in comparison with the remuneration derived by the employer from the patent. They must show that it is just additional compensation be paid.

The amount of compensation is directed by Sec 41, that the award should secure the employee a fair share of the benefit which the employers has derived or may reasonably be expected to derive from the patent.

Conclusion

There is an amount of similarity to a certain extent between the Patent Law in Malaysia and in the United Kingdom in relation to the inventor-employee rights to patent. Although, both the laws gives the rights to the invention to the employer while being bounded by the employment contract, compensation are allowed in UK under certain criteria's satisfied by the employee as highlighted above.