Claudia Seitz (U of Basle) opened the afternoon session with a presentation on data exclusivity and marketing protection, followed by Alesch Staehelin exploring the legal implications of the “internet of health(care) things”. Claudia pointed out that while regulatory data protection would in theory allow a generic company to conduct its own clinical studies during the data exclusivity period, the Declaration of Helsinki considered replication of clinical trials with human subjects unethical, and animal law prohibited animal studies that did not lead to new insights. So replication of clinical studies was not only impractical for economic reasons, but actually prohibited.

Alesch Staehelin (IBM) explored the data protection implications of the “internet of health(care) things”, using massive amounts of data from connected devices to improve health(care). Partially an advertisement for IBM’s Watson data analytics and insight services (“cognitive engine”), the presentation gave a taste of things to come for pharmaceutical companies and their advisers. As Alesch points out, the “internet of health things” will finally enable the much-hyped personalized medicine. You must also keep in mind that “anonymized” data is often a fig leaf – with enough data points, it is almost always possible to identify the individual. Confronted with the question whether access to data becomes increasingly more important than patent protection, Alesch said that in the IoT world, the value of patents was in controlling the interoperability of devices. Patent owners owning standard essential patents could reap outsized rewards for patents that were not necessarily, from a legal point of view, strong. One participant wanted to know whether when globally collecting data, IBM sought to comply with the rules of the many jurisdictions that may be involved, or whether a kind of “meta law” evolved that was considered the global standard. The, in his own words, disappointing answer by Alesch was that IBM shifted responsibility to comply with data protection laws entirely to its clients.

In a session dedicated to licensing, Simon Hirsbrunner (Steptoe & Johnson) explained the influence of EU law on licensing agreements in a non-EU country, namely Switzerland. Surprising for no one, EU law applies to agreements entered into by parties in third countries if the agreement influences the EU market. Simon notes a “blind spot” of the TT-BER, as they only relate to agreements concluded for production purposes. He also notes that it is worthwhile to read the guideline to the TT-BER as it contains valuable information – infuriatingly for the practitioners though none of it binding. In the discussion, the interesting question was posed whether an agreement that obliges licensee to challenge the validity of the licensed patent in arbitration, at the exclusion of state courts, violates the prohibition of non-challenge clauses by the TT-BER. No clear answer was found (this Kat would argue that the answer turns on whether the arbitration award obliges the patentee to formally revoke the patent, thereby removing barriers to entry for all market participants, or whether the award only holds that the patent is to be considered invalid between the parties. In the former case, I do not see a violation of the TT-BER, in the latter case, probably so, because a potentially invalid patent still is on the register(s) and has anti-competitive effects).

Daryl Lim (John Marshall Law School) undertook a comparative analysis of Genentech (C-567/14) and Kimble v. Marvel Entertainment (576 U.S. ___ (2015)), exploring the limits of the maxim “no patent, no royalties” – and he likes to build bridges, notably between people and ideas. Genentech basically holds that paying royalties for a patent the licensee does not practice or that is invalid is not in violation of EU competition law provided the licensee can terminate the agreement at any time with a reasonably short notice period (two months in the Genentech case, see IPKat post for more info). Genentech is silent, however, on the question of whether paying royalties for an expired patent is permissible.

Kimble, the inventor of a Spiderman web shooting toy, entered into an agreement with Marvel that settled a breach of contract and patent infringement case. According to the agreement, Kimble was entitled to a royalty of 3% on all sales of the toy by Marvel, even beyond the term of the patent. The US Supreme Court felt bound by  Brulotte v. Thys Co which provides that no royalties must be paid after the expiration of the patent. This clear and simple rule which worked quite well for 50 years should not be diluted. However, the licensor may get royalties based on grounds other than patents, such as trade secrets. When drafting a contract, one is therefore well advised to specify the amount of royalties due for each licensed “right” (or protected position, such as know-how or trade secrets). More on Kimble in this IPKat post.

Overall, the conference profited from the interesting mix of participants both on the panels and in the audience and provided valuable insights.

On Wednesday, the German Bundesgerichthof ruled that a bank is obliged to disclose the identity of an the holder of an account into which the proceeds of the sale of a counterfeit product were deposited to the owner of the counterfeit trade mark. The dispute had led to a referal to the CJEU, which was decided on 16 July 2015 (Case C-580/13 Coty Germany GmbH v Stadtsparkasse Magdeburg). From the IPKat post on the CJEU's decision:

Coty was the exclusive licensee for the Community trade mark DAVIDOFF HOT WATER for perfumery. In January 2011, Coty bought a bottle of perfume bearing the trade mark DAVIDOFF HOT WATER from an internet auction platform, paying the purchase price into the seller's bank with the Stadtsparkasse. Finding that it had bought a fake from a seller with a false name, Coty asked the auction platform to provide it with the seller's real name. The person in question admitted to being the account holder but said she didn't sell the fake product and, relying on her right not to give evidence, refused to provide any further information.


Coty contacted the Stadtsparkasse to ask it for the name and address of the account holder. No, said the Stadtsparkasse, invoking its duty under German law to maintain banking secrecy. Coty then sought and obtained an order that the Stadtsparkasse provide the information requested. On appeal, the Higher Regional Court, Naumburg, reversed the trial court’s decision, holding that the request to be provided with that information was not legally justified: even though the current account services provided by the Stadtsparkasse had been used to carry out the infringing activity, since it was a bank it was entitled to refuse to give evidence in civil proceedings, whatever Article 8 of the Intellectual Property Enforcement Directive 2004/48 had to say on the subject.

Coty then appealed to the Bundesgerichtshof which, entertaining doubts as the interpretation to be given to Directive 2004/48, decided to stay the proceedings and ask the Court of Justice: 

‘Must Article 8(3)(e) of Directive 2004/48 be interpreted as precluding a national provision which, in a case such as that in the main proceedings, allows a banking institution to refuse, by invoking banking secrecy, to provide information pursuant to Article 8(1)(c) of that directive concerning the name and address of an account holder?’

Taken by itself, if the German banking law allowed an unlimited refusal to supply the information requested, since its wording did not contain any condition or qualification, this would frustrate the right to information recognised in Directive 2004/48 and was therefore such as to infringe the fundamental right to an effective remedy for intellectual property infringement.  However, it was for the referring court to determine whether there were, under German law, any other means or remedies which would allow the competent judicial authorities to order that the necessary information be provided. Accordingly, the Court ruled:

Cat, not enjoying balancing

Article 8(3)(e) of Directive 2004/48 ... must be interpreted as precluding a national provision, such as that at issue in the main proceedings, which allows, in an unlimited and unconditional manner, a banking institution to invoke banking secrecy in order to refuse to provide ... information concerning the name and address of an account holder.

Unsurprisingly, the BGH now ruled that the bank was obliged to disclose the identity of the account holder, notwithstanding that the licensee could have filed a criminal complaint against the (unkown) account holder. The fundamental right to the protection of personal data according to Art. 8 Charter of Fundamental Rights of the European Union of the account holder and the bank's professional freedom according to Art. 15 Charter had to yield to the trade mark owner's right to protection of its intellectual property (Art. 17(2) Charter) and right to effective remedy (Art. 47 Charter). Muses Merpel, the joys of balancing fundamental rights always provides the result one just needed...