- Open Invention Network ("OIN") is formed (10/11/05). OIN will acquire patents from its members (including IBM, Novell and Sony) and offer them royalty free to businesses that agree not to enforce their patents against the Linux open source operating system.
On 10 November 2005, OIN was launched for the purpose of promoting Linux by acquiring patents from its members and offering them on a royalty-free basis to any company, institution or individual that agreed not to enforce their patents against the Linux open source operating system.
OIN was launched with the financial assistance of IBM, Novell, Philips, Red Hat and Sony. Amongst the patents already in the OIN's portfolio is a set of business-to-business electronic commerce patents purchased from Commerce One by JGR, a subsidiary of founding partner Novell.
In the press release announcing the launch of OIN, the aim of the venture was to ensure the continued growth of Linux and related software by creating "a new model where patents are openly shared in a collaborative environment and used to facilitate the advancement of applications for, and components of, the Linux operating system".
It is estimated that the worldwide Linux business is expected to grow 25.9 percent annually, doubling from $20 billion in 2005 to more than $40 billion in 2008.
For more information, please see www.openinventionnetwork.com/press.html
- Lancaster & Anor v Handle Artists Management Ltd & Ors (09/11/05). Two former members of the group Status Quo had a real prospect of success on their claim for a share of the royalties.
- Chris Sawyer v Atari Interactive Inc (01/11/05). TIn proceedings relating to recovery and audit of royalties the court found that the appropriate forum was the English courts even though the claim form had been served outside of this jurisdiction.
The claimant was a designer and developer of computer games who had a granted a licence to the defendant (a US-based games distributor) to market certain games. The licence agreement provided for English governing law but remained silent as to jurisdiction.
A dispute arose between the claimant and defendant in relation to the payment of royalties and the claimant commenced proceedings seeking, inter alia, an audit and disclosure. The defendant argued that the English courts were not the appropriate forum for the proceedings as the relevant documentation and witnesses were based in the US.
In determining the appropriate forum, the court was mindful of several factors, including the extent to which the dispute turned on questions of law as opposed to fact and whether there was a substantial difference between the English law and the law which would be applied by the foreign court. The court held that the dispute in question was essentially one of contractual construction under English law and so the appropriate forum was the English courts.
- The US Supreme Court refuses to hear Microsoft appeal (01/11/05) relating to its ongoing web browser patent dispute with the University of California and the Eolas technology.
Following the US District Court's ruling in August 2003 that technology within Microsoft's web browser (Internet Explorer) infringed a 1998 patent held by the University of California, Microsoft were ordered to pay approximately $520m to Eolas Technologies Inc (who have the exclusive rights to use and license the patent) and the University of California.
Microsoft intended to appeal the method of calculating these damages on several fronts, in particular arguing that they were based upon Microsoft's US and foreign sales as opposed to US sales only.
The Supreme Court has however decided not to hear Microsoft's argument but declined to give reasons for their decision. The case's focus now shifts to the U.S. District Court in Chicago were the validity of the patent is to be examined.
- Amendment to section 60 of the Patents Act 1977 (30/10/05) to introduce a new "Bolar type" defence (section 60 (5) (h) excepting from infringement work done to secure a marketing authorisation for a generic drug).
The Bolar type defence originated from the US case of Roche v Bolar (733 F.2d 858.221 USPQ 937) in which it was decided that a generic pharmaceutical company was not permitted to conduct tests on a patented compound prior to patent expiry, even if such tests were conducted in order to fulfil regulatory requirements for obtaining a generic drug marketing authorisation. Following this decision, US patent law was amended to include an exemption to permit such experiments.
Directive 2004/27/EC requires the introduction into Article 10 of the Medicines Directive of a new Article 10(6) which states that "Conducting the necessary studies and trials with a view to the application of paragraphs 1, 2, 3 and 4 and the consequential practical requirements shall not be regarded as contrary to patent rights or to supplementary patent certificates for medicinal products". Paragraphs 1, 2, 3, and 4 of Article 10 set out the abridged procedures whereby manufacturers of generic products and products similar to authorised reference products can obtain marketing authorisation without submitting a full dossier of pre-clinical tests and clinical trials.
The intended effect of the Bolar provision is to permit applicants for marketing authorisations of generic medicinal products to conduct the necessary trials and studies on reference products before the expiry of the patents and SPCs covering those reference products, without infringing the rights of the patent holder or SPC holder.
In order to implement the Bolar provision in the UK, the MHRA proposed amending the Patents Act 1977 (the "Act") such that the Bolar provision is added to the list of exemptions of acts which would otherwise constitute patent infringement. Section 60(5)(i) of the Act which came into force on 30 October 2005 accurately reflects the wording of Article 10(6) of the Medicines Directive.
For more information, please go to:
www.mhra.gov.uk/home/idcplg?IdcService=SS_GET_PAGE&useSecondary=true&ssDocName=CON1004395&ssTargetNodeId=373
- Cambridge Antibody Technology plc and Abbott laboratories settle dispute (27/10/05) regarding construction of a royalty stacking clause and the payment of royalties on sales of the rheumatoid arthritis drug Humira.
The dispute concerned a licensing agreement for Humira between CAT and Abbott in 1995. The royalty payment clauses allowed Abbott to offset royalties paid to third parties down to a minimum of 2%. Abbott and CAT differed in their views on how the term "third parties" should be construed. Abbott believed that it was entitled to reduce its royalty payments to CAT in order to pay other parties that had technology featured in Humira and accordingly paid CAT about 2% in royalties. CAT however took the view that the provision only referred to third party rights covering CAT's antibody libraries and phage display technology, and was therefore expecting to receive approximately 5% in royalties.
In December 2004, the court sided with CAT but Abbott launched an appeal only for settlement to be reached shortly before the start of the hearing in the Court of Appeal. The terms of the settlement include Abbott paying a reduced royalty of approximately 2.7% on sales of Humira from 1 January 2005 and the payment to CAT of $255m to be used by CAT to pay its own licensors in lieu of royalties due to them.
For more information, please go to:
www.cambridgeantibody.com/html/news_and_resources/news_releases/2005/cambridge_antibody_technology_and_abbott_agree_regarding_royalties
- EU Recommendation on the management of online rights in musical works (21/10/05) puts forward measures for improving the EU-wide licensing of copyright for online services.
On 12 October 2005, the European Commission adopted a recommendation on the management of online rights in musical works aimed at improving the EU-wide licensing of copyright for online services. Such improvements have been deemed necessary as a result of new Internet-based services such as webcasting or on-demand music downloads. The absence of EU-wide copyright licenses has proved to be an obstacle for new Internet-based music services trying to develop their full business potential.
In order to improve the EU-wide online licensing of music, the Commission considered several options in consultation with stakeholders to determine the most effective long-term model for cross-border licensing of copyright-protected material online and cross-border distribution of online royalties.
The Commission recommended that the most appropriate action was to give right-holders the choice to authorise one single collecting society to license and monitor all the different uses made of their works across the EU. The right-holders' ability to choose a single collecting society to license the different uses made of their works across the EU essentially creates an EU-wide license for those works.
For more information, please go to:
http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/05/1261&format=HTML&aged=0&language=EN&guiLanguage=en
- In the matter of EP (UK) 1048609 B1 in the joint names of Hughes & Paxman [2005] EWHC 2240 (Pat) (21/10/05).
The comptroller has discretion to grant a patent licence to a third party despite opposition from one of the co-owners.
In this case, a patent relating to a drink cooler was co-owned by two directors of a company who had since fallen out as to how to exploit this patent. When the first director wished to grant licences to third parties to manufacture the cooler under the patent, the second director refused to give his consent. The first director applied to the comptroller for an order to allow him to grant such licences without the second director's consent.
Under s.36 of the Patents Act 1977 (the "Act") where "two or more persons are proprietors of a patent one of them shall not without the consent of the other…grant a licence under the patent". However, under s.37(1)(c) of the Act, "any person having or claiming a proprietary interest in or under the patent may refer to the comptroller the question whether any right in or under the patent should be transferred or granted to any other person or persons and the comptroller shall determine the question and make such order as he thinks fit to give effect to the determination".
At first instance, the hearing officer (on behalf of the comptroller) found that the comptroller did have the discretion to order the grant of such licences against the wishes of a co-owner provided that this was necessary to prevent the proper exploitation of a patent being unreasonably hindered by one or more co-owners.
However, the hearing officer further held that, as the first director's fiduciary duties as a company director prevented him from doing any of the things that he was asking the comptroller to authorise him to do, the comptroller should not in this instance make such an order.
On appeal, the court found that such an order would not prima facie cause a breach of fiduciary duty and therefore upheld the first director's appeal for the matter to be remitted to the comptroller for directions.