5 Things to Look Out for in Intellectual Property in 2018
2017 was a big year in intellectual property. Whether it was: changes to groundless threats or new certification marks in the EU. Intellectual property moves fast, and a lot can happen in a year.
Crucially, changes such as the above (and below) can be transformative for business’ fortunes worldwide.
2018 looks to be equally, if not more so, packed with significant changes. In no particular order; here are 5 things to look out for in intellectual property in 2018.
The Unified Patent Court
When granted, European patents are enforced in 38 countries (including all those in the EU). For inventive businesses, registration of European patents is critical to business success. (In the past, along with trade marks, the registration of patents has been correlated with business success.)
Despite this, registering a patent in Europe has been technically demanding and often very expensive. The cause of this has been a convoluted process of registration overseen by the EPO (European Patent Office). This process often includes the need to translate the application into multiple languages. Furthermore, defending a patent over a range of different countries is not uncommon – due to a lack of centralisation. As such, the patent process draws out over a length of time and requires specialist expertise and representation across the continent.
This can often be a painful barrier for entry for emerging businesses looking to protect their inventions.
The UPC was proposed as a solution to this frustrations – unifying registration and litigation in a single court, and with a single process.
Whilst proposed in and agreed in principle by member states on February 2013, the process of founding the court goes on and is set for critical decisions in 2018.
“The UPC is, quite rightly, an important and necessary step when it comes to patent protection in Europe. It is however, also a significant undertaking on the part of member countries; as such it will be encouraging to see some solid movement toward implementation this year. Crucially, the registration of patents has proven to be directly linked to the fortunes of top businesses worldwide. The swift implementation of the UPC will be an incredible boost for European businesses (and those around the globe) in increasing their capacity for inventive ingenuity – and the profits that come as a result.”
As it stands, the timeline implementation of the UPC remains up in the air. Litigation is ongoing in Germany who are concerned about the UPC’s impact on national sovereignty. Previously a case in Spain expressed concern at the three languages (English, French and German) agreed for unitary patents resulted in unfair competition, and have not ratified the motion. As consensus continues to approach it seems that 2018 will be another critical year for the UPC and, as such, innovation-led businesses worldwide.
The EU Trade Secrets Directive
Perhaps not as prominent in the minds of legal eagles on account of GDPR and Brexit – the next significant transformation is on the horizon in the form of the EU Trade Secrets Directive.
Similarly to the UPC, the EU Trade Secrets Directive is an effort to harmonise enforcement legislation helping business protect their business critical information across the continent.
Most businesses rely on certain special information or expertise to be successful. However, it is not possible to protect this information with traditional intellectual property rights; like a patent of trade mark. But it is equally important to that these secrets are kept secret from competitors and the wider public. Businesses are often at risk of this information escaping (e.g. via an ex-employee or data breach).
An example of a trade secret is the formula for Coca-Cola. Whilst many people over the years have reverse engineered the soda’s recipe – the information has been kept as a trade secret, protecting it from exploitation in the wider industry. In this way, Coca-Cola’s core asset is protected from theft from the wider industry by a proportionate legal framework.
For many businesses trade secrets might take the form of: business roadmaps, supplier and client lists – to name a few. Often misunderstood and undervalued, trade secrets are also often the most widely infringed, and can cause the most damage to businesses. In the past, we hosted a VirtuosoCAST podcast on trade secrets with Donal O’Connell, which offers a range of insight into the current state of play. Time and again breach of trade secrets has been proven to put businesses at risk of serious damage.
A current example of trade secrets litigation in the US is the prominent Waymo v. Uber case – wherein a Waymo employee left with a range of information to found a business that was quickly acquired by Uber. Uber then utilized this individual in their innovation at a time when they made steps toward the top of the industry. Waymo are suing Uber for $2.6 Billion in damages as a result.
With such high-profile cases and quanta of damage occurring – more stringent trade secrets regulation has come into the fore to protect businesses. In the US this occurred in the form of the Defend Trade Secrets Act in 2016. This was an incredibly robust piece of legislation that was notable in its extra-territorial scope; reflecting the global nature of modern businesses.
Europe follows this year with it’s own, much more robust legislation in the form of the EU Trade Secrets Directive, that has similar “teeth”.
The EU Trade Secrets Directive comes into force in June 2018. As a directive, rather than a regulation it is binding and comes into force across the EU (including the UK) in June 2018. The question is, however – will the UK comply fully with the directive, given the short time between then and Brexit?
Solicitor Lakmal Walawage said:
Over the past few years it has become abundantly clear that trade secrets are incredibly undervalued by businesses. Too many instances have occurred recently of businesses losing out when proprietary knowledge walks out the door with an ex-employee or a breach of information. Rightly, the US (where much of the marquee litigation has occurred) has taken a stance on this with the Defend Trade Secrets Act in 2016. With the international scope of business in this day and age, naturally it follows that the EU would seek to bolster protection for businesses within its jurisdiction. Regardless, the interesting point here is the extent to which the UK will administer these strengthened rights for its citizenry – and if not, the extent to which this impacts businesses at home.”
Whilst not Intellectual Property per sé, GDPR becoming enforced this year marks the most significant change in data protection in recent times. The General Data Protection Regulation (GDPR) remains a cause of anxiety and uncertainty. The “G” word (like Brexit which we’ll get to later) is a unilateral change that will affect every business in Europe – and have significant impact further afield…
GDPR is a reaction to the growing significance of data collection and use in business. The regulation sets out to curb a concerning situation that exists currently. Namely, data subjects sharing their personal information with businesses being akin to opening Pandora’s Box (as far as data protection is concerned). Once shared with businesses data subjects are often shocked to find it is redistributed or used for things that they had not explicitly agreed to – and that they’re unable to “undo” any of this.
This has been especially concerning for litigators on account of repeated large-scale data breaches (e.g. Equifax) and the increasing sophistication of hackers. GDPR addresses these concerns by setting out to:
- “harmonize data privacy laws across Europe”.
- “protect and empower all EU citizens data privacy”
- “reshape the way organizations across the region approach data privacy.”
Note: whilst the UK is set to leave the EU, it has ratified GDPR which goes into effect on May 25th, 2018.
GDPR sets out provisions empowering data subjects. This includes several rights including:
- to “access”: ability to find out if personal data is being processed and for what purpose
- to “be forgotten” – ability to demand deletion of data and halt its further dissemination
- to “data portability” – ability to receive personal data from a company and where relevant transmit it to another
GDPR also profoundly increases the responsibilities of data holding businesses:
- Increased territorial scope – GDPR protects EU data subjects world-wide. Businesses outside the EU and UK still have to abide by the legislation
- Consent – conditions of consent are much stronger. Data subjects must give informed consent at each distinct instance of data usage in a clear an intelligible manner. This means explicit informed consent and no more “hidden” or obtuse Ts&Cs
- Breach notification – Companies have to notify the regulatory body within 72 hours of finding out that there has been a data breach. Companies must also notify data subjects of a breach “without undue delay”
- Privacy by design – data systems should be created and administered with privacy as the core aim
- Data protection officers – larger businesses are required to appoint a DPO to administer these systems and compliance
Of GDPR, Vice Principal Kirsten Toft said:
GDPR has arisen as a key consequence of the rising importance of data in business. Many of the today’s largest businesses are built on collecting and leveraging user data. In addition, recently there have been large-scale breaches that have rightly concerned regulators. These breaches have serious consequences for data subjects – who are put at risk of crime. Whilst GDPR is an intimidating piece of legislation – it is a proportionate response to the increasing role of data technology in businesses; and the need to represent ordinary people like you and me fairly within these systems.”
GDPR compliance and protecting data subjects’ information will be a big theme across businesses this year. In the coming weeks we will provide much more in-depth coverage on GDPR – so watch this space!
EU Portability Regulation
Another interesting piece of legislation that comes into force this year is the EU Portability Regulation.
Devices like Netflix and Amazon Prime Video’s have an increasing market share in personal entertainment.
However, users find they have difficulty when they go abroad into different jurisdictions in accessing these services.
The EU Portability Regulation sets out to allow EU citizens to continue to access their services even when outside their country of origin. The underlying cause of this is the jurisdiction copyright across the EU as it stands – and adapting this in a manner that reflects modern use of copyrighted material. Subscription services must make steps to provide subscribers with material across the EU; and copyright holders should be aware that if they license their material that it will be lawful for users to access their material across member states (if subscribers are visiting for a limited time).
As it stands, the UK has entered a consultation which is determining how to implement and enforceme of the Portability Regulation – regardless of Brexit.
Trainee solicitor, Jordan Davies had this to say:
Over the past few years entertainment has become on-demand by default – with most people expecting to be able to access the content they want when it’s convenient for them. Netflix binges aside – changes like these present a challenge for legislators who need to put the frameworks in place for citizens to operate in a manner they see as normal.”
The EU portability Regulation comes into force as of the 1st of April 2018.
Brexit Rumbles On
Clearly there are some major changes on the cards this year. But the “daddy” of them all has to be Brexit.
The scope of Brexit’s impact upon British law is, of course, not limited to intellectual property. Fundamentally, a key driver behind Brexit is for the UK to be autonomous from EU law.
Ironically, the only things that are clear about the UK’s stance on IP post-Brexit is the extent to which the UK has committed to continue to share legal principles with Europe (e.g the UPC, portability regulation and GDPR).
However much remains up in the air, as the UK looks to rapidly untangle its destiny from that of the EU.
Last year, we created a series of posts on this blog looking out the state of play of the fundamental intellectual property rights. These can be viewed here:
On Brexit’s impact on IP legislation this year, Virtuoso Legal Principal Liz Ward stated:
By this point, Brexit is a bit of a broken record. The only thing that’s certain is that many things remain uncertain! However, it remains the most significant legislative event of recent times. Much is being made of the autonomy that separation will give the UK from European courts – and this certainly may come in time. Despite this intention it remains at least in the short term view that harmonisation and encouraging global competitiveness remains the aim of the game. The jury is out on what a post-Brexit UK judiciary will actually be like in the long term. For the time being however, it would seem that continuity is king – which provides a degree of predictability as far as 2018 goes.”
And those are our 5 things to look out for in intellectual property in 2018.
Over the course of this year we will keep you posted to the impact of these changes, and any others that emerge in the process.
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5 Things to Look Out for in Intellectual Property in 2018 was written by Dr. Martin Douglas Hendry