2021 IP Law Year in Review

Changes in IP law across the globe appear to reflect the continued evolution of technology and the need for better protection and enforcement of intellectual property rights. A review of the last year’s changes in IP show continued efforts to facilitate protection, new legal interpretations and remedies, the appearance of AI in new places, continued COVID-related issues, and an increase in IP protection filings in Asia.

1.    One Union, One Patent

The European Union has been working to create a single streamlined patent system called the Unitary Patent System. Under the UPS, applicants would be able to file a single application to the European Patent Office (EPO) that would be valid in all European Union member countries. Currently an applicant can file a single European application under the Patent Cooperation Treaty (PCT), but once the application goes to the EPO, individual countries have their own examination and fee requirements that can add up. It should be noted that for utility patents Great Britain is still a member of the EPO. Trademarks and Design patents have been separated since Brexit and require additional filing in Great Britain.

In 2021, Germany officially signed on to join the UPS. Germany was one of the countries that had extra examination and extra fees associated with PCT applications. As the last of the major countries involved in the EPO to sign on to the UPS, Germany’s addition has led many to believe that many of the smaller countries not yet signed on will soon join. The addition of Germany is a great boon for companies and inventors wanting to protect their IP in Europe as the UPS now allows significant savings in fees for filing for protection in all the EU together at once. Just since the beginning of the year, Austria signed on to join the UPS on January 19 making 17 of the 35 EU Member States signatories to the Unitary Patent System.

With the addition of Germany, and other countries following suit, protection in Europe is cheaper and easier than it has previously been.

2.    China Dictating Terms

Global licensing rights and terms are vitally important to businesses that operate on a global scale. The terms in licensing agreements can be subject to FRAND terms. FRAND stands for Fair, Reasonable, and Non-Discriminatory. On August 19, 2021, the IP Tribunal of the Supreme People’s Court of China ruled that in “standard essential patent” licensing disputes, Chinese courts can adjudicate licensing rights on a worldwide basis. The court rules this could happen based on whether the parties are willing to reach a worldwide license and the presence of a close nexus to China.

Portions of the ruling were both surprising and not in the IP sphere. It was not surprising in the sense that China has consistently prevented enforcement of licensing rulings against Chinese companies in disputes. The surprising portion is that previously the Chinese courts have set the licensing rights in the single patent infringement case on hand, rather than offer a broader opinion authorizing the setting of worldwide rights.

If a client company competes or does business with Chinese companies it is important to be aware of this ruling when negotiating licensing rights with other parties. Greater care should be taken during negotiations to ensure a case might not end up with a Chinese court determining the terms of the deal instead of the client or counsel.

3.    US Easing on Remedies

The Biden Administration reversed course on the US stance on FRAND terms. The US has seemed to step back from the anti-trust stance adopted under the Trump Administration. On December 6, the Department of Justice and the PTO issued for public comments a draft on SEP guidelines. The draft guidelines concluded that because injunctive relief was won so infrequently that monetary remedies are usually adequate to compensate for infringement.

Many in the US are unhappy with this shift towards focusing more on monetary damages. The injunctive relief and anti-trust stance under the Trump Administration were more favorable to US SEP holders experiencing infringement. The DOJ and PTO were taking comments until January 5 and so results from the comments have yet to be seen. Between China’s ruling on FRAND terms and the change in the US’s stance, there is some instability in terms of international licensing for SEPs.

4.    Robot Inventor?

Dr. Stephen Thaler has filed two different patent applications, “Food Container” and “Devices and Methods for Attracting Enhanced Attention”, a light emitting device, naming an Artificial Intelligence known as DABUS (Device for the Autonomous Bootstrapping of Unified Sentience) as the inventor. Dr. Thaler filed these two applications in the US, the UK, South Africa, the EU, and Australia.

The United States, United Kingdom, European Union, and Germany have all rejected the two applications. In the various countries, the term “inventor” is defined in relevant statutes as a human, therefore excluding applications attributed to an artificial intelligence. One other problem facing the applications, in the US at least, is that while DABUS is listed as the inventor, Dr. Thaler is listed as the Applicant and Assignee, raising a question of assignment. South Africa has granted the applications.  South Africa does not have substantive examination for patents and does not define “inventor” so the effects of this grant may be overall limited.

As 2022 continues it will be interesting to see if more applications are filed with AI inventors or how DABUS fares in the courts challenging the denials of patents. 

5.    COVID-Related Goods for Free?

“TRIPS” is the Agreement on Trade-Related Aspects of Intellectual Property Rights and is an international agreement between World Trade Organization members governing the standards and regulations for intellectual property. A waiver proposal brought forth by India and South Africa would waive intellectual property rights for technologies needed to prevent, treat, and contain COVID-19 until the pandemic has ended. 

The United Kingdom, Australia, Brazil, Japan, Norway, Switzerland, and the European Union all currently oppose the proposal. In May of 2021 the Biden Administration voiced their support for the waiver. The US has often not supported TRIPS waivers, so this support came as a surprise to many. As late as October, the calls continued for a waiver as the Omicron variant raged across parts of the globe, but many countries still oppose the waiver.

As the Omicron surge starts to fade and the WHO organization considers reclassifying COVID to endemic, the calls for the waiver may diminish. Any business involved in production and development of COVID materials will want to keep an eye on this.

6.    Counterfeiting COVID Continues

The continued pandemic in 2021 saw a continued rash of counterfeiting PPE and vaccines. The World Customs Organization (WCO) held a series of workshops to work with countries to create global guidelines on recognizing counterfeit goods.  US ICE and Homeland Security were major presenters along with WHO and INTERPOL discussing the best practices and methods to combat the movement and recognition of counterfeit goods.

Until the WHO declare that COVID is endemic, the customs battle against counterfeit COVID-related goods will likely continue. It remains important as ever to report any findings or reports of potentially counterfeit goods of a client’s products to the appropriate Border and Port authorities to protect businesses’ IP.

7.    AI in the Patent Office

In 2021, the USPTO, EPO, and French Patent Office began implementing some form of artificial intelligence in the patent search process. The US has begun using a machine learning AI in the classification of applications to determine which art unit the application is assigned to. Art units focus on what the technology of the invention is and different art units have varying levels of allowance for patents, making getting into a desirable art unit very important. The EPO has begun using AI to increase the speed and accuracy of the Office’s prior art searches.

The different Offices’ use in AI can all have an effect on the way applications are drafted and the way new inventions are described. As more patent offices begin to adopt AI, there may be a decrease in examination time as applications are more quickly assigned to examiners and prior art searches take less time.

You should consider working more closely with your IP counsel to draft applications to get into desired art units.

8.    Social Media - The Hotbed of Infringement

The European Union Intellectual Property Office released its observations and discussions of IP infringement on social media in 2021. In these observations the EUIPO discussed the numerous trends in IP infringement, challenges in combatting infringement, and some best practices for shielding IP rights on social media. The constantly changing sphere and extreme volume of social media can make it overwhelming for IP rights holders to try and police. 

Overall, 2021 saw an increase in awareness and new measures for protecting IP on social media. Many social media platforms like Twitter, YouTube, and Twitch updated and revamped their IP practices and procedures in 2021. Twitter saw a trial run of an AI used to flag and identify potentially infringing material. 

As we move into 2022, it is important to continue protecting IP on social media as awareness and technology to detect infringement improves.

9.    Asia - The New IP Frontier

The share of all global IP filed has increasingly moved to Asia. The share of all patents filed on a global scale increased from 51.5% in 2010 to 66% in 2021. The share of all trademarks filed on a global scale increased at a greater rate from 41.3% in 2010 to 71.8% in 2021. This increase is not necessarily companies filing in Asia to the exclusion of other countries. Of the patents filed in Asian patent offices in 2021, more had companion applications that originated in the US than in any other country.

This trend is showing that more and more companies are wanting to spread their IP rights beyond the US, specifically into Asia. Japan and China saw the greatest increase in these applications. As more companies look to expand, it could be more important to advise clients to also look at expanding their IP into Asia to maximize protection abroad.

10.  IP Doesn’t Stop for a Pandemic

The US Chamber of Commerce International IP index determined that 32 of the 53 world economies benchmarked had positive improvements in their scores from the 2020 index. The IP index looks at IP across countries that are not the major players in IP such as the US and China. Mexico saw the second largest score increase from 2020 thanks in large part to the US-Mexico-Canada Agreement. This could lead to the expansion of trade agreements if more improvements of IP can be gained and realized from the trade agreements.

Trademarks saw the smallest growth and most challenges in 2021. Many of the challenges noted were related to a sharp increase in counterfeit products attributed to the rise in online shopping because of the pandemic. Many countries enacted new injunctive style relief schemes to try and combat this trend.

Despite the pandemic and the challenges brought by it, IP continued to grow on a global scale indicating businesses should not hold back from filing applications to protect their IP because of the pandemic.

Key Takeaways

As technology continues to advance, the use of social media for business and dissemination of information grows, and COVID-19 issues continue to linger, the predominant changes in intellectual property protection show the following trends:

• the EU continues to find ways to facilitate the ease of IP protection through the Unitary Patent System;

• a new instability in terms of international licensing for SEPs and interpretation of FRAND terms is growing from changes in Chinese and US laws;

• COVID-related impacts continue to affect IP rights and enforcement efforts;

• AI as “inventors” is being questioned, while different countries implement use of AI at the Patent offices to facilitate examination review;

• the need for much more vigilant IP monitoring and enforcement on social media platforms continues to grow; and

• Asia has seen a significant increase in IP filings indicating an increased need for protect in Asian countries.

For more information on IP law and International law, see our International Business Law Services and Industry Focused Legal Solutions pages.