Before Sue-set

08 August 2017

Once it has been determined that IP litigation is inevitable, taking immediate steps will help a litigant maximize its chances of winning.

“For jurisdictions like ours – Dubai – that mostly rely on the firstto- file instead of first-to-use principle, we always recommend that a client who is contemplating litigation to first have an application in place at least in the country in which the suit will be filed. If budget allows, we would even recommend filing and registering their primary marks in the Gulf Cooperation Council countries and/or the ones which are having major business interests for them in MENA,” says Raka Roy, head of the trademark department (Dubai Office) at United Trademark & Patent Services. “This way, when infringement is identified, the mark owner would already have brands registered in its favour.”

A minimal use of the mark in the country of conflict is also important. “While the law doesn’t make it mandatory, we have observed from our experiences that use of the brand in the country to an extent has a large impact on the suit,” Roy adds. “Use also safeguards the risk of a counter blast cancellation action against any registered brand.”

Evidence collection is another important step. Proof includes documents, samples, purchasing invoices, downloaded materials from websites in question, etc. “In order to have the evidence avoid the challenge from the adversary party, except the document proving the legal basis such as trademark, patent and copyright certificates, the gather of the evidence with the assistance of notary public is recommended,” says Bin Zhang, deputy director of the legal department at CCPIT Patent and Trademark Law Office in Beijing. “Though the involvement of notary officials will incur higher costs than normal collection, it will also greatly increase the chance to have the evidence in its favour accepted by court without questioning.”

Different Strategies

There are clear differences in the litigation strategies employed by companies across various industries.

In the pharmaceutical industry, the Hatch-Waxman Abbreviated New Drug Application (ANDA) and the Biologics Price Competition and Innovation Act (BPCIA) biosimilar statutes and regulations have created a unique set of litigation strategies in which defendants have greater control over the timing of the commencement of litigation, which are normally tried before a judge, not a jury, says Antony Pfeffer, a partner at Orrick, Herrington & Sutcliffe in New York. “In these cases, resorting to alternative resolutions, such as IPRs, is less common.”

In the software industry, there is a move by defendants to swiftly dispose of litigation, even at the pleadings stage, on grounds of unpatentability in line with the Supreme Court’s Alice Corp. v. CLS Bank International decision, says Pfeffer.

However, in most litigation, the more important issue is who the parties are. “In competitor v. competitor litigation, the ultimate goal is to secure or protect market share. Oftentimes, both parties possess patent estates, and have potential infringement claims to assert. These factors result in more complex and expensive litigation strategies often being employed, including litigation before multiple tribunals and courts in multiple countries, including inter partes review (IPR) and covered business method (CBM) hearings before the US Patent and Trademark Office, and possible resort to the US International Trade Commission,” Pfeffer adds. “The strategies employed would be very different if one of the parties was instead a non-practicing entity seeking only a nuisance fee settlement, which might result in early settlement or a CBM or IPR filing.”

Appeal I

While the outcome of an appeal varies on a case-to-case basis, there are certain broad points which, if given due consideration, could lead to success.

When filing an IP appeal in India, for example, regard must first be given to the forum before which the appeal is required to be filed. If an appellant files an appeal before a wrong forum, the appeal will be rejected prima facie, leading to loss of time and money. For IP matters, an appeal lies before the Intellectual Property Appellate Board (IPAB), the high courts and the Supreme Court of India. In case of patents, an appeal lies before the IPAB challenging the order of the Controller of Patents. In respect of trademarks, appeals challenging the order of the Registrar of Trademarks lie before the IPAB. However, for copyright, an order of the Registrar of the Copyright Board can be challenged in the high court. Similarly, any order of the Controller of Patents and Designs in an industrial design matter is appealable before the High Court, says Jaya Bhatnagar, founder and chairperson at Sieben IP in New Delhi.

Secondly, an appeal is usually based on challenging the findings of the subordinate court/authority and the aggrieved party prefers appeal on two grounds, namely, issue of facts and questions of law. “This primarily means that if the order/ judgement under challenge has factual contradictions/errors from the facts of record or if certain provision of law is not correctly applied or interpreted then appeal can be made as the case may be. When filing an appeal on questions of law, one has to be careful while interpreting the provisions of law as well as finding judicial precedents on the issues concerned. For factual position or issues of facts, an appellant needs to be careful in pointing the errors of facts recorded by the subordinate court while passing the final order,” Bhatnagar says. “An appeal will not be successful if it fails to clearly identify the question of law or fact being challenged. A counsel appearing on behalf of the appellant must be cautious that the court would not entertain arguments which are out of the scope of the specific matter being challenged in the appeal. An appellate court cannot be expected to handle a case in the same manner as the subordinate courts.”

Further, there are timelines in every statute with regard to filing an appeal and such timelines are to be strictly followed. Bhatnagar says. “In case the appeal is filed after expiry of the period of limitation, the appeal will not be admitted by the appellate authorities.”

In China, an appeal will be successful on the basis of an error in the application of law or procedure by the Trademark Review and Adjudication Board (TRAB), while greater deference is given to the TRAB in relation to possible errors in factual determinations, says George Chan, a partner at Simmons & Simmons in Beijing. “In the context of challenging the refusal of a trademark application, almost 40 percent of new applications are rejected for registration and therefore a successful appeal will typically involve material changes to the surrounding circumstances, such as the removal of cited marks, obtaining rights to a cited mark, obtaining a letter of consent to co-exist from the owner of a cited mark, etc.”

However, an appeal is generally unsuccessful when a plaintiff, at the outset, fails to invoke a provision of the trademark law that is directly relevant to the case and may affect the outcome of the matter in the plaintiff’s favour, adds Chan.

Appeal II

There are common litigation mistakes such as failure to meet deadlines, failure to subscribe to formality requirements, and insufficient preparation that are fatal to an appeal.

Deadlines. As in all aspects of IP prosecution, it is of vital importance to comply with the deadlines set out by the court (e.g., deadlines to file an administrative appeal, submit notarized and legalized formality documents for a foreign appellant, deadline to further appeal to the second instance court, etc.), says Chan.

Formality. Foreign entities should be extra cautious when it comes to the strict requirements that apply to formality documents (e.g. notarization, legalization, establishing the authenticity and validity of the authorization, etc.), and a failure to address such requirements may result in key evidence being disregarded in a proceeding, says Chan.

Insufficient Preparation. Insufficient or poor preparation can take many forms.

a) Many lawyers do not pay much attention while drafting a brief. “This can lead to various errors, any of which can lead to a failed appeal, such as, framing the wrong issues, framing the right issues weakly or failing to emphasize the right issue,” Bhatnagar says. “Properly framing and presenting the key issues often paves the way to success.”

b) Selecting the wrong appellate counsel. “An appellant must hire a counsel experienced in arguing before the appellate authorities. The choice of such a counsel must be made carefully,” Bhatnagar says. “For instance, a senior counsel with a face-value is best reserved for admission hearings either before a high court or the Supreme Court and a more aggressive lawyer should be reserved for cases where one of the parties is looking to confuse the hearing judge and raise doubts in his mind.”

c) Inability to determine if an order is appealable. “Before filing an appeal, a counsel must interpret the provisions in relation to appealable orders correctly in light of past precedents to determine if the order (or what part of an order) at hand is appealable,” says Bhatnagar.

d) Unable to keep the patent agent well-informed of every aspect of the invention and infringement that has occurred. “Patents are technical and hence require special attention,” Bhatnagar says. “Such issues can only be handled by a registered patent agent or a technical advisor. Failure to do so could prove to be damaging to the appeal as it would become difficult to identify and lay down the issues in the case for the benefit of the appellate authority.”

e) Convoluted presentation of contents in a hearing involving technical information may confuse the hearing judge, adds Bhatnagar.

Appeal III

Prosecution, as the first stage of any IP-related matter, is the most important step, as it paves the way for further stages such as litigation, if and when such stage arises. Some prosecution pitfalls that may weaken the appellate position in an IP litigation matter are as follows:


a) Filing an incomplete patent application. “While filing a patent application in India, there are various points to be kept in mind, such as, procedural requirements like submission of details of corresponding foreign applications and filing of faulty assignment deeds. These inaccuracies could be fatal at the stage of litigation,” Bhatnagar says.

b) Improper drafting of claims in a patent application. “In a patent infringement case, claims form the most important part as the main challenge is usually based on the claims of a patent application. Erroneous drafting of claims could prove to be problematic during litigation,” she says.

c) Improper drafting of specifications in patent applications; and

d) Insufficiency of disclosure of invention.

Designs and Trademarks

a) A design claimed should lie within the scope of the definition of “design” provided under the statute, Bhatnagar says. “Improper drafting of novelty statement in respect of shape, configuration and surface pattern and any particular novel feature, insertion of disclaimers with respect to features/background appearing in the representations that do not form an integral part of the design, publication/disclosure of novel features prior to claim made, novelty claims in respect of functional features are certain other mistakes that lawyers usually make which later become problematic.”

b) Incorrect claims in relation to the date of use of a trademark could be problematic while establishing priority before a court of law, says Bhatnagar.

c) Insufficiency of evidence regarding user details or regarding the origin or history of a trademark could make it difficult to establish these facts before the appellate authority, adds Bhatnagar.

The applicant must raise all applicable grounds at the outset when prosecuting a rejected application, so that it may rely on the same grounds if the case is further appealed to the courts, says Chan.

“Appellants should always ensure that evidence that is submitted to the court meets the prescribed formality requirements, and that all available evidence is submitted during the prosecution process,” says Chan.

Evidence is properly sourced if it is the original version or, if a copy, that it is properly notarized and legalized. If it is not properly sourced, then there is a risk that the evidence may be challenged by the court, defendant, or third party, which can lead to the evidence being given very little weight or disregarded, Chan adds. “Ensuring that all available evidence is submitted during the prosecution process is important because while additional evidence may be submitted after the submittal deadline has passed, it is less likely to be accepted by the court unless it is proven that the evidence is newly generated and has a material effect on the proceedings.”

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