Suzuki et al. on Criminal Penalties for IP Infringement in Asia

            For the most part, criminal law does not play a large role in the enforcement of patent rights, although TRIPS article 61 does require that member states make available criminal penalties for “wilful trademark counterfeiting or copyright piracy on a commercial scale”; some free trade agreements extend the obligation to criminalize IP infringement a bit further (e.g., to anti-circumvention measures); and in some places, including the U.S., criminal penalties sometimes are imposed for trade secret misappropriation.  Some countries, moreover, make all or most types of IP infringement at least potentially subject to criminal penalties, although the criminal prosecution of patent infringement isn’t very common (though it does happen from time to time).

Anyway, I’m finishing up work on my book Remedies in Intellectual Property Law, and the last chapter deals with, among other things, criminal enforcement, so I though I would call readers’ attention to a paper that addresses the criminal enforcement of IP rights in the leading Asian jurisdictions.  The authors are Masabumi Suzuki, Su-Hua Lee, Byungil Kim, Xiuqin Lin, Prashant Reddy, Heng Gee Lim, Jyh-An Lee, and Kung-Chung Liu, and the paper is  titled Civil Follow Criminal or Criminal Follow Civil Procedure as Models to Deal with IP Infringement: Asian vis-à-vis Western Approaches, in Kreation Innovation Märkte - Creation Innovation Markets:  Festschrift Reto M. Hilty 663 (Florent Thouvenin, Alexander Peukert, Thomas Jaeger & Christophe Geiger eds., Springer 2024).  Here is a link to the ssrn version, and here is the abstract:

Art. 61 of the TRIPS Agreement of the World Trade Organization (WTO) requires members to provide criminal punishment at least for willful trademark counterfeiting and copyright piracy on a commercial scale. Sweeping criminalization of IP infringement can be observed in the West typified by Germany and many major Asian jurisdictions. However, in practice, there has been relatively rare criminal prosecution of IP infringement in the West, whereas criminal prosecution of IP infringement, excluding patent infringement, is not uncommon or even common in the seven selected Asian jurisdictions. Why is there such a difference? and what effects does it have on the overall development of IP laws in those Asian jurisdictions? These two questions among others are what this article strives to answer. It will first survey the Asian IP landscape, in the order of the introduction of IP laws into the civil law jurisdictions (Japan, Taiwan, Korea, and China), and into common law jurisdictions (India, Malaysia, and Hong Kong) respectively (2). It will then examine German experiences (3), followed by comparative study and policy analysis (4), and end with some suggestions (5).

Highly recommended!

 

  

Lau on FRAND in Singapore and China

An article I only recently came across is Joseph Lau's FRAND Defences Against the Grant of Injunctive Relief:  Applying Huawei v. ZTE in Singapore and China, 16 Asian J. Comp. L. 33 (2021).  Here is  a link to the article, and here is the abstract:

From the size of A4 paper to 5G in the telecommunications sector, standards are ubiquitous. Standard essential patents (SEPs), which protect technology essential to standards, enable their proprietors to gain significant market power. Antitrust authorities therefore scrutinize the exercise of SEPs for breaches of competition law. In this regard, the ability of SEP proprietors to obtain injunctions against implementers as a remedy for infringement of SEPs where licensing negotiations have broken down or are ‘ongoing’ has proven controversial. Some fear that this enables SEP proprietors to threaten injunctions unless implementers agree to unfair, unreasonable, or discriminatory terms. In Huawei Technologies Co Ltd v ZTE Corp [2015] ECLI:EU:C:2015:477, the Court of Justice of the European Union identified circumstances where a SEP proprietor’s application for injunctive relief as a remedy for infringement of its SEP constitutes an abuse of a dominant position, with the classification of the SEP proprietor’s application as being abusive forming a ‘FRAND Defence’ which implementers may invoke against the grant of the injunction requested. This article analyzes whether this approach can be replicated by the Singapore Courts and whether the Chinese Courts, which have already dealt with SEP licensing disputes, adopt a similar approach.

I thought the article's discussion of how courts in Singapore might address FRAND cases was quite interesting.  The author argues that the most likely doctrinal tool would not be competition law, but rather the equitable nature of injunctive relief, Singapore being a common-law jurisdiction.  The article also includes a good discussion of Chinese case law and Chinese court guidelines as of 2020.

 

Two New Damages Articles in the Journal of Intellectual Property Law

 1. Taorui Guan has published an article titled Evidence-Based Patent Damages, 28 J. Intell. Prop. 1 (2021).  From the introduction:

. . . this Article has carefully analyzed 400 patent licensing agreements that are the “material contracts” of publicly traded companies (meaning that their business substantially depends on them). These contracts reveal how patent licensing parties calculate royalties for the use of patents. This Article tests the doctrines of the hypothetical negotiation against them to see whether the doctrines reflect actual patent licensing practices. While this set of contracts might not represent the overall population of patent licensing contracts, many being contracts between small private companies and possibly not significant enough to be regarded as material contracts, it is the best evidence available to the public. These contracts reveal how parties calculate royalties for high-value patents that are important to their businesses.

After a systematic examination of these patent licensing contracts and the doctrines of the hypothetical negotiation, this Article finds divergences between them in at least three areas. . . . The divergences and the corresponding suggestions for potential reform are as follows:

First, in actual patent licensing, parties can adjust the royalty payments based on information that develops after the date of the licensing contract. The licensing contract might incorporate a royalty adjustment clause that allows parties to adjust the royalties in response to specified later events. Or parties might renegotiate to modify the royalties. In litigation, however, royalty adjustment is not available. Courts do not allow parties to adjust the reasonable royalty based on the information ex post the date of the hypothetical negotiation. This Article suggests that courts should recognize the possible need for adjustments to the reasonable royalty. In cases of patent infringement, the value of the patent might become clearer only after the date on which the infringement began. Allowing litigants to adjust reasonable royalty based on ex post information would make the assessment of patent damages more fair and complete.

Second, courts and patent licensing parties use different means to determine the royalties on a patent incorporated into a multi-component product. Usually, a royalty equals a royalty base multiplied by a royalty rate. . . . But to calculate the royalty for a patent used in a product consisting of the patented component and other components, parties might multiply the royalty by a formula and retain the value of the multi-component product as the royalty base. . . . But in litigation, the use of formulas is not available. Instead, courts tend to apportion the value of a multi-component product between the patented component and other components by reducing the royalty base to the value of the patented component and applying a royalty rate to it. This Article suggests that courts should allow litigants to use the formulas, while retaining the value of multi-component products as the royalty base, because doing so can keep economically irrelevant data from entering the calculation of reasonable royalties and can weigh economically relevant criteria for apportionment.

Third, parties in patent licensing have a more sophisticated method for dealing with royalty stacking than courts do. Specifically, if the relevant products involve not only the patentee’s patent but also third parties’ patents, the licensee needs to pay royalties to both the patentee and the third parties. Parties want to avoid a situation where aggregate royalties become so excessive the licensee no longer implements the patent. This situation is called royalty stacking. To avoid royalty stacking, patent licensing parties employ anti-royalty-stacking clauses, which allow third-party royalties to offset the royalties payable to the patentee. . . . This Article suggests that courts and litigants can learn ways to deal with royalty stacking in litigation from these anti-royalty-stacking clauses.

2. Also in the same issue, Ioana Vasiu and Lucian Vasiu have published an article titled Cross-Jurisdictional Analysis of Damage Awards in Copyright Infringement Cases, 28 J. Intell. Prop. L. 93 (2021).  The article addresses the calculation of damages for copyright infringement in the U.S., Canada, Singapore, and Italy.

les Nouvelles Issue on International Patent Enforcement

The December 2018 issue of les Nouvelles, a publication of the Licensing Executives Society International, is devoted to the subject of international patent enforcement.  Here is a link to the publication's webpage, from which subscribers can access the entire issue, including individual articles address the topic of national patent litigation in the U.S., Germany, France, the Netherlands, the U.K., Italy, Spain, China, Japan, South Korea, and Singapore.  Almost all of the papers in this issue are also freely available on ssrn, however, to wit:

Sherry Rollo & Julianne Hartzell, National Patent Litigation-United States 

Tilman Müller-Stoy & Alexander Haertel, National Patent Litigation-Germany

Emmanuel Gougé and Léonore Isnard, National Patent Litiation-France

Jaap Bremer & David Mulder, National Patent Litigation-The Netherlands

Ian Kirby & Jennifer Dixon, National Patent Litigation-United Kingdom 

Luca Ghedina, National Patent Litigation-Italy

José-Miguel Lissén Arbeloa and Álvaro de Castro, National Patent Litigation-Spain

Nongfan Zhu, National Patent Litigation-China

Yasufumi Shiroyama, National Patent Litigation-Japan

Kijoon Kang & Hankil D. Kang, National Patent Litigation-South Korea 

Darrell Low, National Patent Litigation-Singapore

Bradley Lui, Arbitration & Mediation-ICC Patent Arbitration

Gustavo Moser, WIPO: Resolving Cross-Border Patent Disputes Through Mediation And Arbitration

John Paul and D. Brian Kacedon, Recent U.S. Court Decisions and Developments Affecting Licensing

I haven't read any of these yet myself, so I can't offer any evaluation, but I would think they may be a useful source of information.  For some other recent summaries, see my post on a series published last year on Law360.