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This week in IP: Xiaomi-ETSI suit doomed, Senate IP chair changes, Peloton in a spin
Managing IP rounds up the latest trademark, copyright and patent news, including some stories you might have missed

In-house: Xiaomi stalling for time with ETSI suit
Counsel from automotive and telecoms companies told Managing
IP this week that they believed Xiaomi was stalling for time with its bid at
the Paris Court of First Instance to force standards-setting organisation ETSI to
throw out Philips’ 3G and 4G patents.
They said that the case was a long-shot, at best, and that
it was in all likelihood doomed.
“The case is very interesting, but there is no hope here for
Xiaomi to get Philips excluded from ETSI,” says the head of IP and standards
for an international telecoms company. “It’s a very long-winded process and
Xiaomi is just playing games here from what I can tell.”
The Chinese handset manufacturer filed a suit at the Paris court
earlier this month, in which it demanded that ETSI help conclude the Chinese
company’s licensing row with Philips.
According to an email from ETSI to its members that was
leaked to Managing IP, Xiaomi asked the organisation to
exclude Philips’ patents from being essential to the LTE (4G) and UMTS (3G)
standards if no licensing agreement could be made.
Click here to read the full article.
Other Managing IP stories published this week include:
‘Don’t give up’: EU breaks with tradition on slogans
In-house reveal how they recover attorney fees in patent cases
Opinion: Are some European patent attorneys resistant to change?
Why Chicago is the top forum for counterfeit fights
In-house fear EPO guidelines could increase patenting cost
MIP EMEA Awards 2021: shortlists revealed
Tiffany case could shake up summary judgment and enforcement
‘File 10, hope for one’: counsel on pharma trademarks
Senate shake-up: Leahy, not Coons, to lead IP subcommittee
In a shake-up of the intellectual property ranks in the US Senate this
week, Senators Dick Durbin and Chuck Grassley announced
on Sunday, February 14, that Patrick Leahy would chair the legislative body’s IP subcommittee, rather than
former subcommittee ranking member Chris Coons.
The shift in leadership reportedly came about because of a rule
proposed by Democratic senator Christopher Murphy to distribute subcommittee chairmanships
more equally.
The change likely comes as a surprise to many IP attorneys who might have expected Coons to become the subcommittee’s chair after the Democratic Party won its Senate majority in January.
Coons had served as ranking member of the committee since its reformation
in 2019, a year in which he introduced the STRONGER Patents Act and was one of
the primary drivers, if not the main force, behind Section 101 reform efforts.
Coons will instead chair the Senate subcommittee on privacy, technology
and the law. Coons is also chair of the senate appropriations subcommittee on state
and foreign operations, on which Leahy previously served as ranking member.
Tillis, who is now ranking member of the IP subcommittee, told
Managing IP in a 2020
interview that he was reviving efforts to reform Section 101.
While it is not certain how Leahy will view Section 101 reform,
his history suggests that he is more open to policies that might favour tech
companies.
The Leahy–Smith America Invents Act, which led to the creation of
the Patent Trial and Appeal Board, was sponsored by and named after the new subcommittee
chair.
Peloton in a spin over rival’s trademark
Exercise bike manufacturer Peloton filed a petition at the Trademark
Trial and Appeal Board on Tuesday, February 16, to cancel a trademark
owned by a fitness rival for the term ‘spinning’.
In the petition,
Peloton argued that the terms ‘spinning’ and ‘spin’ had become generic and were
widely used in the exercise industry.
The US-based owner of the trademark, Mad Dogg Athletics, was “abusively
enforcing” its rights to the term, according to Peloton.
The company, Peloton alleged, spent years “engaged in a
bullying campaign of demand letters and litigation to force people and
companies to stop using the very terms they have every right to use”.
Peloton, represented by international firm Latham &
Watkins, added: “With five minutes of simple Google searching, it is easy to
see that everyone in the world, other than Mad Dogg, believes that ‘spin’ and
‘spinning’ are generic terms to describe a type of exercise bike and associated
in-studio class.”
In a separate matter, Peloton is facing a patent infringement lawsuit filed by Mad Dogg. In December, Mad Dogg claimed Peloton had
infringed two patents related to connected exercise bikes.
Constellation Brands sued over Corona hard seltzer
Grupo Modelo, the Mexican branch of AB InBev, sued
alcoholic beverage company Constellation Brands in
the District Court for the Southern District of New York on Monday, February 15,
for the unauthorised use of the name Corona.
Modelo argued that Constellation Brands
had violated a licence agreement when it used the name for its hard seltzer
brand. The group claimed that while the defendant was licensed to use
the Corona brand for beer, that licence did not cover
hard seltzer.
Constellation acquired Modelo’s US beer portfolio in 2013, which
included the rights to sell the Corona brand under a sub-licence agreement.
Constellation Brands launched its Corona Hard Seltzer product in February 2020.
This case isn’t the only recent example of brewing trouble at the Corona brand.
Federico Bueno Icaza, global IP director at AB InBev, told
Managing IP in an
August interview that because of the pandemic, the company had
taken action against 100 trademarks containing the term ‘Corona’ since February
2020.
USAA and Wells Fargo to settle seminal $300m fintech fight
Financial services companies USAA and Wells Fargo are finalising a settlement in a series
of seminal bank-on-bank patent disputes in the US over mobile deposit
technologies, it was revealed last Friday, February 12.
The settlement comes after jurors at the District Court for
the Eastern District of Texas found Wells Fargo liable for patent infringement in
two cases in November 2019 and January 2020, awarding USAA (United States
Automobile Association) a total of $302.8 million.
Documents filed at the Texas court reveal that both US-based
banks have agreed to settle both cases, although the terms of the agreement
have not been disposed. The parties have asked the court to stay the case for two
months to allow them to complete the settlement.
Peter Gilchrist, a Wells Fargo spokesman, said the bank was
“pleased to put this legal matter behind us”.
The suits, which were the first of their kind between two
banks in the US, had caught the attention of IP counsel at other financial services companies who were
concerned that patent disputes might become more common in their industry as a
result.
Speaking on USAA’s first win in November 2019, the senior IP
counsel at a consumer financial services company in the US said: “The verdict
demonstrates that financial institutions are not immune from patent claims by
competitors.
“Although somewhat rare in the financial services industry,
patent claims by competitors must be taken seriously and institutions should
consider appropriate measures to mitigate the risk of infringement.”
The technology at issue in these suits was used by 6,500
other institutions and was developed by software firm Mitek. Mitek had launched
its own legal battle against USAA, seeking a declaratory judgment that its
automatic-check image capture product does not infringe certain patents
owned by the bank.
USAA sued Mitek in 2012 on the basis that the software
business misappropriated USAA’s proprietary and confidential information while
working under contract for USAA, and then took numerous steps to claim it as
its own.
That matter was settled in 2014, but USAA sent letters to
100 banks in 2017 telling them they were in violation of its mobile deposit
patents. It sued Wells Fargo on that basis in 2018.
New bill proposes closing India’s IP Appellate Board
The Indian legislature introduced a bill last Friday,
February 12, to close the country’s Intellectual Property Appellate Board and move proceedings back to the commercial and high courts.
The IPAB was created in 2003 in an effort to move highly
technical cases out of the commercial court system and place them in
specialised courts with expert judges where parties could get speedy and
high-quality rulings.
But the experiment had the opposite effect, leading to more
expensive litigation with longer delays, because the Indian government had
difficulty recruiting judges with the right amount of expertise.
The new bill reads: “Analysis of data of the last three
years has shown that tribunals in several sectors have not necessarily led to
faster justice delivery and they are also at a considerable expense to the
exchequer.
“The chairman and members of such tribunals shall cease to
hold office and they shall be entitled to claim compensation not exceeding
three months' pay and allowances for the premature termination of term of their
office or of any contract of service.”
Former IPAB chairperson, Justice Prabha Sridevan, publicly
advocated for the IPAB’s closure and to have its cases moved back to the high
courts. She wrote on the SpicyIP blog that the news of the IPAB’s potential closure “filled her with joy”.
Included in the draft bill was a proposition to close other
tribunals, including the Airport Appellate Tribunal, the Plant Varieties
Appellate Tribunal and the Authority for Advance Rulings.
Between 2016 and 2020, the IPAB did not have technical
members to hear patent cases. Since its creation, the board has had a total of
1,130 days without a chairperson. Due to a lack of key members, the IPAB has
accumulated a backlog of 4,000 cases.
European Commission puts emphasis on IP in updated trade laws
On Friday, February 12, the European Commission released its
international trade rules and included amendments that placed a greater
emphasis on IP rights.
The revised EU Trade Enforcement Regulation pertains to the
union’s right to enforce international trade agreements.
Under the new regulation, the scope of Articles 1, 5, 6 and 9 were expanded to include counter-measure protection
for IP rights. Before this change, the regulation only included protection for
the trade of goods.
The new regulation reads: “Services and intellectual
property rights account for a large and growing share of world trade and are
covered by international trade agreements, including regional or bilateral union
agreements.
“Measures in the fields of trade in services and
trade-related aspects of intellectual property rights should therefore be
included in the scope of the trade policy measures available to the union.”
The EU will also be able to protect its trade interests at
the World Trade Organization (WTO) under the new rules when a trade dispute is
blocked by a non-EU member state despite the bloc’s effort to act in good faith
to adhere to dispute settlement procedures.
Executive vice president and commissioner for trade, Valdis Dombrovskis, said: “The European Union must be able to defend
itself against unfair trading practices. These new rules will help protect us
from those trying to take advantage of our openness.”
The new rules are seen
as a response to a backlog of matters at the WTO Appellate Body, which is
currently not able to hear appeals due to a staff shortage.
The old regulations
required that trade disputes follow all WTO procedures, including holding
hearings before the non-functioning Appellate Body. The EU will now be allowed
to avoid these obligations by simply appealing a panel report.
The trade
regulation went into force on February 13 and will be reviewed in one year’s
time.
EPO Boards of Appeal considers legal basis of COVID-19 extensions
The EPO’s Boards of Appeal has considered the legal
basis for extensions to deadlines granted by the office at the height of the
COVID-19 pandemic, it emerged this
week.
In March 2020, the EPO announced an extension of all
deadlines. The extension lasted until June 2.
The basis for these extensions was discussed in a case concerning a European patent application directed to processing
soybean oil. The applicant involved missed three deadlines dating back to 2018.
The final missed deadline fell within the period during which extensions were
granted.
The BoA was strict on the deadlines pre-dating the pandemic,
but accepted the COVID-19 extension period as a reason for missing the third
deadline.
However, after assessing the circumstances, the BoA noted a
discrepancy between the wording of the EPO’s announcement on extensions and the
relevant portion of the European Patent Convention (EPC).
The EPO’s notice, announced in the Official Journal of the
EPO, cited ‘general dislocation’ as mitigating circumstances. But Rule 134(2)
of the EPC provides for the extension of deadlines as a
result of “a general dislocation in the delivery or transmission of mail” in a
contracting state.
The BoA concluded that, regardless of how the extensions
were legally justified, a user of the EPO should not be penalised without good
reason for relying on notices published by the EPO itself.
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