Understand Your Rights. Solve Your Legal Problems
We encounter stories and predictions about how artificial intelligence (AI) will fundamentally change a variety of industries on an almost day-to-day basis. In fact, it has become such an important topic that late last year the Council for Society and Technology wrote a letter to the Prime Minister advising how the UK could take advantage of opportunities created by the increasing convergence of robotics, automation and artificial intelligence. As more and more industries, including healthcare and financial services, adopt AI technology, we’ll continue to see increased benefits on our society as a whole. What does this mean for businesses? We hear from Kevin Gidney, Co-founder and CTO, Seal Software who expands on AI in businesses.
It starts with document management
Conversations about AI tend to have a sci-fi vibe: robot personal assistants, self-driving cars, you name it. But the real, day-to-day business value of AI is much less futuristic, starting with the hundreds and thousands of contracts that keep business deals up and running every day. Unfortunately, many companies have a problem finding and understanding what exactly is in their contractual agreements, which is a huge problem that can cost thousands or even millions of pounds over time. For example, forgotten auto-renewal terms can hurt budgets and company departments often work in silos and unknowingly have agreed to terms that are in conflict with each other.
While alternative resources were created to find and house contractual documents (think Contract LiveCycle Management, document repositories, etc.), those options still require manual reviews from in-house legal operations teams or having them outsourced to law firms. The problem with this is they are time-consuming and expensive, and not accurate. Also, manual reviews are rarely up-to-date, meaning when data or values are extracted in the past, they don’t reflect changes in contracts, and when different data is needed, say for a new event or regulation, the reviews must be done over again. Fortunately, in recent years new technology has been introduced to open up a whole new opportunity for contract discovery and management.
Using Machine Learning and Natural Language Processing to “Read” Contracts
Combining technology like machine learning and natural language processing (NLP) can automate the extraction and review process; taking the process from tedious and time consuming to relatively painless. Think about it: business users shouldn’t have to contact the legal team every time they have a question about a contract and then wait around for days to get the answer they need. This type of technology allows them to locate and view any contract, at any time.
Not only is this more convenient, but it can also be more accurate. Machine learning technology is capable of seeing patterns in data that even trained professionals don’t always catch. Automating those tasks allows professionals to do their work faster and focus on higher-value activities that their computers can’t do. Machine learning and NLP has opened the door for an ongoing process of automation, allowing business leaders to make more informed decisions based on insights derived from contract data.
Legal tech isn’t just for the lawyers
When you think about contracts, you might think of the legal department within an organisation or lawyers in general, who are becoming more open to automating data review and management tasks, allowing them to focus their time on providing the high value strategic counsel they’ve been trained to give. But really, the legal teams aren’t the only ones who can benefit from this type of technology. The business intelligence that comes out of an automated contract data extraction and review process is being used to power decision-making for other levels of the business (c-suite, sales, procurement, facilities, etc.) across a variety of sectors. Contract data includes all of the terms, obligations, incentives and liabilities organisations have with external parties, on the buy and sell side. This data fuels better decisions overall, and can lead to a higher performing organisation.
Not only is AI a cost saving option for many companies, but the true value lies in the intelligence it provides to the business. Companies now have the ability to make better business decisions, and manage contract data and data in other systems, in a way that they couldn’t do before.
SoundCloud recently announced they appointed Merritt Farren as its new General Counsel.
As General Counsel, Farren is responsible for shaping and defining SoundCloud’s legal affairs and public policy strategy, in addition to leading its team of legal experts across the areas of data protection and privacy, commercial contracts, music rights, copyright issues and corporate matters.
Prior to SoundCloud, Farren was Chief Legal Officer at Amazon’s Audible.com. Before joining the Audible team, he was Associate General Counsel, Digital Media and New Technologies at Amazon.com where he helped Amazon launch digital video, digital music, eBooks and Kindle. Farren’s diverse background also included roles at educational internet company Lightspan, Sony Pictures, Paris law firm Duclos, Thorne and The Walt Disney Company where, among other things, he lead the legal effort on the launch of Disney Interactive.
Meritt’s vast experience has enabled him to guide his way through complex legal issues, whilst allowing businesses to grow and expand. In this exclusive interview, we have the pleasure of speaking with Merritt about his plans for SoundCloud, what he expects to challenge him and his previous experience at Sony and Disney. Merritt also reveals his favourite legal sector, as well as the legal issues he has overcome throughout his professional years.
What goals do you wish to achieve now you have been appointed General Counsel of SoundCloud?
SoundCloud is a truly unique global company that reaches over 175 million passionate music fans every month. We are embraced by both artists and creators who appreciate the way we enable them to connect with fans. We have both user-generated content and content licensed from record labels, giving listeners the ability to discover music they can’t find anywhere else as well as listen to recordings they already know and love.
As SoundCloud continues to grow and innovate, my goal is to support my team and provide the highest quality, most business-oriented, creative legal support possible.
What do you foresee as the most challenging aspect of your role?
SoundCloud’s business is extremely complex and the legal issues we work with are varied. We work across a wide set of domains, many of which are entirely new to us as an organisation. Combined with having a small team, means efficiency and creativity in what we do is crucial to our success.
Can you tell Lawyer Monthly what you think produces a successful General Counsel? What pieces of advice would you offer those who are inspiring to be legal experts?
The overall key is the support of a strong team and I’m fortunate to have that at SoundCloud. We have a small, but flexible, creative team with experience in handling a varied workload.
Beyond that, we need to be experts in each of the core domains in we practice day-to-day. Dealing with issues we see regularly from so many different angles and with such frequency can really hone our expertise. Acknowledging that we can’t be experts in everything we deal with and, instead, consulting regularly with external counsel who are. We’re supported by a set of amazing lawyers around the globe and couldn’t fulfil our roles effectively without their assistance.
Being highly business-oriented and deeply integrated with the business teams is crucial. We’re part of one SoundCloud team and are as focused on business goals just as our team members outside legal are. We look for ways to push the business forward and enable innovation that serves our listeners and creators with as much enthusiasm and dedication as our non-legal business colleagues.
Constantly inventing and reinventing is important, particularly in a business such as ours which is still fairly new and continuously growing. Startups like SoundCloud are the ideal places for lawyer inventors and entrepreneurs looking to innovate.
Out of all the various legal affairs you deal with, from copyrighting to contracts, which are your favourite and why?
I truly love the law and complex legal issues. I’ve had the opportunity to deal with a wide range of legal issues over the course of my career, and I can honestly say that I’ve found them all interesting.
That said, I have a special love of copyright. It’s complex, like other areas of the law, and I love it for that. There are two things that I especially love about it: it’s purpose, and the unique nature of “property right” that copyright creates. Copyright’s fundamental purpose is to support the creation and dissemination of artistic works for the betterment of society, and in the recognition of the crucial role that artistic works and expression play in making a better society. Copyright is not a simple property right but has, at the heart of it, a balance between the interest of artists and the interests of consumers, plus, society in the active and widespread distribution of artistic works. Copyright Law demands a degree of creativity that mirrors the work it protects, and I love that.
It is especially true in music, where copyright law has long had within it a set of statutory rights (or their equivalent) that allow for access to music without the need for individual licenses. It is designed in such a way that ensures the monopoly inherent in copyright doesn’t allow individual rights holders to work against the collective good of artists generally and the greater good of society.
When an international company has plans to expand and evolve, as General Counsel, how do you deal with all the legal matters at hand and ensure the company adheres to the law in all jurisdictions it is involved with?
This is one of our bigger challenges. As we expand, we use our knowledge and understanding of areas where we have experience with the issues we’ll face in the jurisdictions we’re already in, and identify the deltas. For the deltas, we look at the issues that might be unique and play out differently for us in that new jurisdiction. In doing that, we look for best practice employed by others and seek advice from local counsel.
What do you think is an effective way for music artists and companies to ensure their work is secure and not illegally obtained?
What we find most interesting and encouraging on that front is that surveys show young listeners, when compared to their older peers, are more respectful of artists and empathetic about artists’ right and the need for them to be compensated. They are also more willing to pay for music. That’s a great development which we attribute to three points (and all of these we enable at SoundCloud): (i) engage listeners actively in a way that allows them to be both listeners and artists and in a way that enables listeners to see themselves as artists; (ii) enable authentic communication between listeners and artists that creates a genuine, “non-commercial” bond; and (iii) don’t fight listeners on what they want. They want new takes on existing songs and creative experimentation in expression. Don’t fight that, embrace it as SoundCloud does.
With the digital scope everchanging, where do you hope to see the industry heading? What legislative changes do you think will help account towards this?
You can expect to see us continue to roll out innovative, new ways to engage creators and listeners and enable artists to make money. We will have to overcome challenges, and it will take time before we’re done on that front, but we’re confident that we can get there.
In terms of legislation, we’re very happy to see some creativity coming out of Brussels right now from some very forward-thinking members of parliament. Legislators get criticised a lot for being out of touch and not being expansive in their thinking, but we see a genuine effort to understand real world challenges and keep the EU ahead in copyright innovation.
You helped to launch Amazon’s digital video, music and eBooks; what challenges did you face along the way and how did you overcome these?
Along with a host of consumer protection issues, consumer data items and other matters that come with launching digital consumer services around the globe, digital media efforts inevitably require a large licensing effort. On that front, I would say the key to making progress was getting content rights holders to understand three things: (i) why the innovation we wanted to roll out would be good for them and their industry (we launched all of our services with at least one big innovation); (ii) why Amazon is different from some other content distributors they had dealt with, and why our systems simply wouldn’t allow us to agree to certain things others had, like a right to review specific ‘pages’ on which their content might be offered, since our site was dynamically generated for each customer; and (iii) how, once they saw beyond those first two things, we really could - and would - be very good long term partners to them and respectful of their needs as well as ours.
How have all your digital launches differed; from Disney to Sony, what different legal difficulties did you face and solve?
There has been a variety of issues. At Disney, one of the more fun jobs was figuring out how to translate talent deal compensation constructs used in feature film and TV for platform games and online. Our approach was to look for the softest bridge we could find to keep talent comfortable. At Sony, I worked with a team of lawyers and business team members from multiple studios to create a business model for replacing physical film use in theatrical feature film distribution, with the use of digital projection. Among our challenges was how to compensate theatre owners for the cost of installing digital projectors that would generate cost savings to studios; this was a great challenge to work through and solve.
Is there anything else you would like to add?
2017 is set to be the biggest, most ambitious, year for SoundCloud yet. Amongst other things, we’ll be expanding our subscription service into further territories around the world and will be releasing new product features to improve the SoundCloud experience for everyone. It’s a really exciting time for us and I’m delighted to be a part of it.
Liz Stewart, Partner, Commercial Property Team at Stronachs LLP considers the latest legal, regulatory and business challenges facing companies and individuals in an ever-evolving property landscape. She touches on the impact of the oil and gas industry and investment opportunities and the commercial property sector in Scotland.
What is the current state of the commercial property market in Scotland?
Despite the political uncertainty posed by Brexit and calls for a second Independence Referendum, the Scottish commercial property market holds firm. Against this backdrop, regional disparities are prevalent. In Aberdeen, after years of under supply, new build Grade A office accommodation far outstrips demand, giving rise to higher rent incentives and a corresponding adjustment to rates per square ft. In contrast, Grade A office space is in short supply in both Glasgow and Edinburgh despite growing demand for good quality city centre space.
Looking ahead, some would suggest Edinburgh’s commercial property market faces something of a perfect storm for 2017 as supply of Grade A office space nears a 10-year low. City centre rents may increase and incentives are likely to be pinned back for smaller units. With limited new build Grade A stock heralded to hit the market until 2018/19, rising city centre costs may force some occupiers to look to the west of Edinburgh or other locations on the city’s periphery.
Figures for Glasgow’s office market looked buoyant for 2016 but some suggest the next few years may be more troublesome with shortages of Grade A office space threatening to cripple the market. An increase in headline rents seems likely due to the lack of stock. Refurbishments may help plug the gap until the next development cycle in 2018-2019.
A lack of speculative funding due to political uncertainty may be a problem. The challenges faced by Aberdeen and the North East, however, are more closely linked to the ongoing challenges faced by the oil and gas industry. Investment levels remained subdued for 2016. Crude prices made some recovery towards the end of the period and there are signs of optimism for the year ahead. Coupled with the recognition that Aberdeen offers good value and strong fundamentals, the city presents an attractive proposition for investors at the turn of a market. Changes and opportunities are abound with the construction of the AWPR and wide-scale development of city centre and out of town business parks, hotel developments and offices.
The City Region Deal will provide further support for the future of the North-East economy through continued, long term investment in transport, digital connectivity, life sciences, tourism, agri-food and biopharmaceuticals. The importance of diversity is recognised and addressed against a backdrop of ensuring the regions’ oil and gas industry evolves to meet the political and economic challenges posed over the next few years. All will act as catalysts in delivering development vital to the attraction of future investment and progression of the region’s economy.
Do you feel that financing and investment is more readily available now?
In a regional context and with the exception of some sectors, financing and investment is perhaps less readily available in the North East due to uncertainties surrounding the performance of the oil industry. The same cannot be said of Edinburgh and Glasgow whose markets are recovering well despite the 2008/09 recession which had less of a direct impact on the market in Aberdeen. Each region faces its own challenges, however, if investment in speculative office developments remains limited, further pressures will be applied to those markets suffering due to the limited supply of newly developed Grade A office space. Political uncertainty may continue to dampen activity although a weakened sterling may fuel demand from overseas investors.
If the oil industry takes a turn for the worse, how will this affect your clients? How will you advise them accordingly?
The recent stabilization of the oil price in the range of US $45 to $52 per barrel and the massive price rebasing in the oilfield services sector has begun to restore confidence in the sector evidenced by increases in deal activity. Where this is yet to unravel, we may see further job losses, liquidations and further pressures on the commercial property market as a whole. Meantime, whilst the oil price remains subdued, clients may seek to diversify into related industries where the same technology and skills base can be applied. The renewables industry is one such example – both in the UK and abroad. Diversification of skills and know-how will be the key to building a sustainable future.
What are the common disputes that arise in the commercial property sector?
Disputes regarding rent reviews, requirements for landlord’s consent to assign or sub-let, exercise of break options, management of lease trigger events and liability for dilapidations at lease expiry are common. Recent case law has resulted in a shift in drafting practice/tactics for negotiation. Landlords’ ability to recover costs of outstanding repairs at lease expiry has been thrown in to sharp focus, especially where the property in question is scheduled for re-development. Rates mitigation measures are also being examined in closer detail – more so now given the up and coming rates re-valuation taking effect 1 April 2017.
What are the challenges facing owners and occupiers of business premises in the North East of Scotland at the moment?
The main challenges are undoubtedly linked to the continued downturn in the oil and gas industry and subdued oil prices. In addition, proposed increases in non-domestic rates with effect from April 2017 (with reference to 2015 rental values), compounded with the withdrawal of empty rates relief, present an economic challenge to businesses already feeling squeezed by the downturn in the local economy. Political uncertainty following Brexit, the Trump election and the spectre of a second Independent Referendum present further challenges although the effects have been less widespread so far.
How do you assist your clients with overcoming these challenges?
We place a great deal of emphasis on keeping up to date with current affairs, regulatory and legal developments, changes in the economy and proposals for investment in the region (of which there are a variety). Our close relationship with the local Chamber of Commerce and other trade bodies, not to mention, intermediaries, banks, fund providers, surveyors operating across all spheres of the region’s economy is, undoubtedly, an advantage in this regard.
What do you anticipate for the Scottish commercial property market in 2017?
On a local level, given the uncertainty surrounding the performance of the oil industry and the up and coming increase in rating liability, 2017 will present a number of challenges. The Chancellor’s announcement regarding a 12.5% cap on rates increases is welcomed, albeit, it may only offer a temporary relief for business owners. Notwithstanding, there is plenty to be positive about. Significant investment in local infrastructure, the AWPR, City Region Deal and evidence of construction projects underway herald an era of opportunity for investors. Predictions that the oil industry will stabilise and show meaningful signs of recovery towards the latter half of the year are bringing these opportunities forward. Elsewhere, the country continues to benefit from post-recession recovery with medium to long term investment fuelling the appetite for growth.
As a thought leader, how are you currently lobbying or working towards the development of new commercial property strategies, in order to effectively assist your clients?
By engaging with trade/business representatives, professionals and intermediaries on a variety of levels, we maintain a valuable insight into the challenges and opportunities facing the economy. Remaining alert of the continuing emergence of a more positive outlook for the region, we support the recognition of opportunities presented by investment in infrastructure and emergence of globally recognised skills in other industries such as bio-tech, life sciences, tourism and food and drink - all of which will encouraging an appetite for growth and investment for the medium to long term.
Taiwan has long been recognised as a technology island by the global community; it is the leading supplier of IC designs, being next only to Silicon Valley and in the industries of optoelectronics, semiconductor, computer and mobile devices, the innovation and know-how of Taiwan companies are internationally renowned. The country holds first place as the global manufacturer of lens for mobile devices and the rapid evolvement of technology and the trend of open innovation fertilised the ground for IP development in Taiwan.
Taiwanese enterprises became rather mature with the global IP regime and with the assistance of IP professionals and authorities, such as the Intellectual Property Court being established in 2008 in response to the public’s concerns of the adjudication of IP related cases. IP activities are common and essential in order to give owners rights to their invention, know-how, and other intellectual properties. Planning, protecting, enforcing, and financialising intellectual properties have been considered and conducted on a global level, which require both knowledge and experiences of both domestic and international IP practice.
Taiwan is also a place to incubate emerging technologies with its open attitude. An example is R&D and the mass production of Tesla’s electronic cars, which cannot be done without Taiwanese enterprises’ support. Tesla also chose Taiwan as one of its pioneer markets. As an attorney practicing technology law for almost 30 years and an active member of various global professional groups such as: AIPPI, APAA, AIPLA, INTA, and ACS, Yu-Lan Kuo has witnessed the development of the IP practice in Taiwan which has integrated with, and is undoubtedly a part of the global IP practice.
How complicated can IP cases become in the ‘technology capital’ Taiwan? What approach must be taken to solve these cases?
IP cases can be very complicated. The practice of IP is an art, which needs to be shaped according to the specific clues, facts, and expectations of each and every case, and shall be supported by understanding, talent, and experiences. For example, patent prosecution sounds like a matured field of practice without much doubt, however carving the scope of a patent requires awareness and judgment. When patenting an invention, making the scope of patent claims too broad would increase the risk of invalidity, while making the scope of claims too narrow may render it useless. Each step of prosecuting and enforcing a patent is delicate and calls for skilled IP professionals. For example, when asserting a patent against infringers, there may be lots of obstacles on the way, such as lack of evidence, or difficulties to verify the infringement. Samples of infringing products may be located in a place you have no access to, or you may not even find one sample in the market because the product is tailor-made and only manufactured according to specific purchase orders issued. As to infringement of software IP, comparison of the right owner’s software and the accused infringing product may be extremely difficult.
Another example is trademark practice. On the Internet, trademark infringement can be done easily and trademark prosecution planning and strategy may change. Although most of trademark practice in most jurisdictions are open to new type of trademarks, such as colours, smells, shapes, holograms, and others, defining the scope protected by a specific trademark could be a problem. For colours, do you rely on colour charts? For smells and shapes, how do you draw the line of infringement? These are challenges which need creative solutions based on the accumulation of IP cases. Clients, authorities and we IP professionals, always learn a lot from cooperation and cases we handle and fight for, or fight against. IP practice is dynamic and approaches are also become dynamic via open minds.
Can you tell us how IP legislation developed and changed as technology advanced in Taiwan? What do you recall being the biggest change in the legal sector regarding IP?
Set the IP Court being established in 2008 and the IP Case Adjudication Act in 2008 aside, the biggest change of IP legislation should be the decriminalisation of patent infringement in 2003. Before 2003, because there wasn’t any US-styled discovery available in Taiwan, collection of infringement evidence was very difficult, thus the right owners tended to opt for police raids, searches and seizure of criminal complaints, for the purpose of locating and collecting patent infringement evidence. Under the pressure of criminal sanctions, many patent disputes were resolved without going over a civil patent litigation. This means patent disputes very often missed the chance to be reviewed from a proper perspective. The so-called “IP practice” at that time focused on “criminal case practice” rather than real patent duel.
After the decriminalisation of patent infringement, patent disputes go back to civil track. The decriminalisation changed the game, allowing the parties to argue real patent issues in the court, which changed the whole patent practice thereon.
How has issuing preliminary injunctions for intellectual properties improved the litigation process for your clients?
Before the establishment of IP Court in 2008 and the then-promulgated IP Case Adjudication Act, the practice of preliminary injunction (PI) is very different from what it is today. In the past, Taiwan traditionally being a civil law jurisdiction, there was no requirement of likelihood of success, among others. Comparing with the common law system, Taiwanese court did not conduct a substantial review of a PI application. One of the reasons is that the law did not require so, and because courts did not have the capability to understand technical issues. At that time, PI could be granted between two days to two weeks without substantial review, as long as the applicant deposited sufficient bonds. This was misleading foreign customers as they were unaware that the grant of a PI did not serve as the assurance of the validity of rights asserted and the likelihood of success.
The IP Court and the IP Case Adjudication Act changed the requirements of PI application, making it clear that the court must review the likelihood of success, the likelihood of irreparable harm, the necessity, and the balance of public interests. When reviewing the likelihood of success, validity of rights asserted and possibilities of infringement must be considered.
From a neutral standpoint, the evolvement of IP case adjudication is good for both the right owner and the defendant. However, in the beginning years of IP Court, the practice of PI became too conservative. In comparison to other courts, the IP Court is very efficient and can be viewed as a rocket docket. The new practice requires the court to excessively review, and since the first instance of an IP case can be completed within several months to one year, this made PI unattractive. Many clients gave up its plan for PI application but went for IP litigation directly.
The PI practice in the IP Court was gradually tuned to an ideal status. Now the IP Court is willing to issue an urgent disposition (a temporary PI) within 24 hours from receiving a PI application, and can issue a PI in two to three weeks after several hearings allowing both parties to express opinions for the court’s substantial review. This encourages right owners and at the same time protects the defendants, making Taiwan more friendly environment for IP and technology law practice.
With Taiwan’s enterprises being open to emerging technologies, are there any challenges you face as a practising lawyer to embrace cases with out-of-the-ordinary technology?
Experiences teach us when embracing emerging technologies, we must ponder what the impacts of such technologies are, so that we can truly understand what challenges we would face. For example, when nanotechnology arose, it changes features of substances. Many materials change its characteristic in nano scale. Laws and regulations face challenges because we were unfamiliar with nanotechnology, which influence our evaluation of safety, features protected by patents, and others. After the regulation issues are resolved, for example, after the IP professionals understand how to deal with patent examination of applications related to nanotechnology, then there are not too many differences when judges review disputes that go into the court.
Take GMO (genetically modified organism) as another example. The challenges the emerging GM technologies faced mostly stayed in the level of regulation and policy, not IP issues, and they barely become cases sent to the court. Cryptocurrency is another example, as it involves legal issues related to regulations and business.
Fintech is also an example of emerging technologies that change the industry. The key to Fintech is the application of big data through algorithm, which changes the banking and financing industry and basically involves regulation issues, for it is not digitalizing current banking practice, but creating a whole new world of possibilities and new business models. It also calls for rethinking of existing laws and regulations.
The last example, but not the least, is Uber. Uber stirred up governments and industries around the world. In Taiwan, there are lots of debates and many cases sent to the court arising out of the wrestling between Uber and local government and competitors.
We practicing lawyers are meant to respond to these questions. We use currently available tools to achieve client’s goals, for example, successfully having patents granted for related inventions. For new, out-of-the-ordinary fields, we learn the ropes and guide clients and even governmental authorities in the mists.
With Taiwan having global influence, what difficulties do you face regarding international IP practices?
It would be issues arising out of legal systems. Taiwan is a jurisdiction with a civil law system. We do not have US-styled discovery, which makes it difficult for a party to collect evidence. We do not have expert witnesses, which makes it difficult for specialised knowledge of certain technologies, skills and professionals to be presented in the court. We do not have the design of US-styled “full-trial”, which makes the trial of a case intermittent.
Comparing to other civil law jurisdictions, the abovementioned features should not be a problem, for the systems are similar. For common law system jurisdictions, the abovementioned differences may create a gap for parties from different jurisdictions to understand each other. This does not mean a civil law system is better or inferior to a common law system, as they both have pros and cons.
As to the practice of the Intellectual Property Office, Taiwanese practice is very similar to other practices. There is no huge gap in this perspective.
What changes do you predict to take place in the IP Court in Taiwan as technology continues to evolve?
Before the establishment of IP Court in 2008, there are four “bugs” in the IP litigation practice in Taiwan: dual-track, lack of professionalism, dependence of verification institute, and stay of litigation procedure. Aiming to solve these problems, the IP Court and the IP Case Adjudication Act were born. The operation of IP Court and the IP case adjudication can be understood as “full trial by separating disputes issues”. This is not the same as the full trial adopted in the common law system, such as the US, but can be viewed as a “mini” full trial when the IP Court review each disputed issue, such as the validity issue, the infringement issue, and the damage issue. Because of the senior judges and senior technology examiners assisting the judges, the IP Court now has the ability to review complicated technological issues, and the IP court judges are more and more experienced with IP practice.
As technologies continue to evolve, the role know-how and trade secret play become crucial. At the time the IP Court was established, the focus of the IP Court practice was patent litigation. The design for know-how litigation has not been thought of thoroughly, though there still are tools to protect know-how and trade secrets, for example protective orders are available for IP litigation.
As technologies continue to evolve, the need for a more delicate adjudication model for trade secret litigation became obvious, including the need for procedural solutions. For example, in patent litigation, very often the calculation of damage becomes a problem, which is even more difficult in trade secret misappropriation cases. For example, although the parties would try to introduce experts into IP litigation by submitting written opinions of experts as evidence, there is no expert witness officially adopted by the procedural laws. In the future, it can be expected that the need to introduce experts, including technical experts, forensic accounting experts, among others, into IP litigation would increase greatly. This is the change and challenge the IP Court must face as a result of development and creation of new technologies.
Besides, a main part of the development and evolvement of technologies and industries recently stem from big data and the master algorithm, for example, Fintech. In the short term the influence of this kind of innovation would stay in the level of policy and regulation, but in the long run related disputes will go into the court. Whether or not the existing IP regime can deal with these challenges, and whether or not the IP Court has the capacity to deal with these challenges, would be an issue worth watching.
Can you recommend key actions technological companies must take when protecting their invention?
The first step should be documentation. Information needs to be recorded and documented (including in electronic format, of course). Every invention comes from an idea. Ideas, when expressed, becomes information. There is a lot to be considered to transform information to intangible assets. The first step is that you need to know what information you have. There needs to be records and documents for you to further evaluate and develop it.
Secondly, classification. Information, after being recorded, needs to be classified. Especially for proprietary and confidential information, you need to secure the confidentiality.
Third, evaluation. Evaluate your information for purpose of analysis and portfolio so as to enable management.
All of the above are based on strategy. Strategy, of course, is related to your business plan. More importantly, strategy reflects and is influenced by a company’s philosophy of management. Philosophy of management is related to your ambition, your value, your faith, your characteristic, your plan and your perspective; there are a lot differences between a long-term plan and a short-term plan. I can talk for another three hours if we go into details of these factors but to make it short, if you would like to condense the above mentioned as key actions tech companies should take when protecting their invention, I would recommend key actions for making information intangible assets, which are documentation, classification, and proper measures to secure confidentiality of information, so as to make information qualified as trade secret and know-how protected by law. Another key action, when taking these actions, is to go back to your strategy and philosophy to consider and to fine-tune each step of yours.
How has this changed from when you first began practising?
The above are experiences gained and were accumulated by practicing. There are a lot of details you can work on. I did not have all the clues and tools or even the big picture when I first began practicing. When I started to practice technology law 30 years ago, the industries in Taiwan just grew up from their kindergarten-stage, and the Taiwanese community had only limited knowledge of IP. Besides, the IP practice then in the global community had not yet matured. At the stage of exploring, most companies and IP professionals focused only on a segment of IP, for example, setting up patent and trademark offices and focusing on patent prosecution and trademark prosecution. Lawyers at that time did not have sufficient understanding of IP, so that most opinions rendered by IP lawyers lacked the insight of the whole picture, which we already have nowadays.
By the accumulation of cases and amendments of laws and regulations, Taiwan no longer is a teenager in the IP field, rather it became matured and grew to an international level. In the recent years, when small and medium enterprises (SMEs) came to us seeking legal advice, the knowledge and insight they have are no inferior than what was possessed by the big enterprises like IBM who assisted Taiwan to set up its IP regime 30 years ago. The reform of laws and regulations, also contributed to the evolvement of IP environment in Taiwan. For example, the IP Court established and operated since July 2008 and the new IP Case Adjudication Act opened a new page of Taiwan’s IP practice. This only happened when the politics and economy grew to a certain level. If you ask how has this changed, I would say it is a steady process - though sometimes it leaps - by the accumulation of cases and law reforms.
David Bateson is a leading international arbitrator who has been involved in over 100 arbitrations in Africa, Asia, Europe, the Middle East and South America and has extensive experience in disputes in a variety of industry sectors. With Asia being a global hot-spot for investments, we decided to speak with David about how he has seen Asia’s legal sector progress, what makes a top arbitrator and why companies should opt for the method when solving disputes.
What was the main (professionally based) reason for practising in Asia?
I was a colonial boy, with a liking for warm weather and cold beer, so Asia was the obvious destination. In 1980, Hong Kong was a British colony, with common law applicable, and I could get admitted automatically. The 15% tax rate also helped. It has been an enjoyable, rewarding and diverse career in Asia over the past 37 years, 35 of which was a partner of an international law firm, Mallesons King & Wood Mallesons, and two years as a full-time arbitrator with 39 Essex Chambers.
My main specialisation is construction/infrastructure/resources, and there has been massive spending and investment on these sectors in Asia during my time here, and consequently many large and high profile disputes. I have also handled a lot of cases in the Middle East.
With such experience in disputes in a variety of industry sectors, where do you think arbitration is the most useful?
In the eighties and nineties, most arbitrations were in the construction and shipping sectors. These days it is used in most industry sectors, even financial, because:
In your time in Asia how have you seen the legal sector progress?
The legal sector in Asia has grown exponentially and apart from the reliable jurisdictions of Hong Kong and Singapore, there has been a gradual improvement in the quality of lawyers in other jurisdictions and in arbitration laws, assisted materially by the adoption of the UNCITRAL Model Law; some refer to this progression as “the golden age of arbitration”. In response to this, courts are upgrading efficiency and adopting alternative dispute procedures such as mediation. The Singapore International Commercial Court has also been set up to hear international commercial cases and many jurisdictions have introduced emergency arbitration, so emergency relief can be given prior to the constitution of a tribunal. Another recent trend is third party funding in arbitrations, and the laws in Hong Kong and Singapore have recently been amended to allow this.
Institutions have also improved procedures to give arbitrators the tools to speed up certain cases that deal with recalcitrant respondents; for example, fast-track and expedited procedures and even early dismissal of hopeless claims.
With Asia becoming more of a hotspot for international investment have you seen disputes increase/progress? How have these changes affected those you represent?
As global trade flourishes, and countries are keen to attract inward investments, it is true that there are more and more bilateral and multilateral investment treaties in Asia. About 10% of claims made under the ISCID Convention originate from Asia.
However, there has been a recent backlash against investment treaty arbitrations. The perception of a small group of mostly Western arbitrators deciding on public law issues that regulate the conduct of developing nations, causes resentment. There have been many challenges to arbitrators on the grounds of issue conflict – prejudgment based on acting usually for states or investors, or past publications or advocacy.
A few Latin American states have renounced bilateral investment treaties, and potentially a court may be established by the EU to hear investment treaty disputes.
You have been labelled as one of the “top arbitrators in the region”. As Thought Leader can you explain how you achieved this title?
With such extensive experience, you begin to develop a reputation and an established track record. It is an incremental process, where every little movement helps build up your reputation in the sector; from securing the first appointments, getting on the panels of many institutions, word of mouth recommendations and personal friendships that are developed throughout the years of liaising, wining and dining at key conferences, all the way to using your specialised knowledge to publish articles and books. It is vital to be perceived as reasonable, friendly, efficient and decisive; there is a backlash against the time and cost of international arbitrations, so there is a high need to diminish passivity, as clearly, delays and inefficiencies are unwelcome.
Domenico De Simone specialises in industrial and intellectual property (IP) law and is also a representative for the Office for Harmonisation in the Internal Market; he shares with us his insights to what will improve the IP sector. He touches on the occurring problems when he deals with IP cases and offers a solution that would make the process easier for practising lawyers, as well as businesses and clients who wish to protect their inventions.
Harmonisation is to create soft connections between differences. Harmonisation is not suppression, but is instead education and respect for the history behind each harmonised party. We have been living during a period of time characterized by turbulences of all types and with a number of harsh issues and cases. One change in my view that has been special is that namely in the past, the offer provided by the opposing party was the trigger, whereas nowadays it seems to be more of a demand; this is because we have a rational expectation to obtain whatever we believe we are obliged to. Overtime, this has become more readily available thanks to the digital environment which is shared internationally; if we wish to obtain something that is not currently available, within a few hours we are able to get our hands on it, allowing the formal aspect of sales to be immaterial and extra fast.
Without doubt this has had effect on the IP sector; you may have noted how IP has been subjected to strong pressure, likely to be the result of artificial (European) unity, which has strategically pushed from the outskirts instead of challenging and facing the central issues of the (European) unification.
The World Intellectual Property Organisation (WIPO) eventually - in 2014 - stated and made clear that encouraging creativity is at the heart of WIPO and that all nations that harness the power of creativity and innovation - through the use of the IP system - can achieve or at least encourage economic growth and cultural development.
So, at that point it comes quite natural a question as to how had we survived previously? We questioned ourselves to how we had lived and worked alongside all countries, whilst dealing with their individual rules and methods without mutual Harmonisation.
This also begs the question to whether or not the Paris convention should be updated in order to allow priority claims for IP Recordals?
Contracts related to IP have significantly increased and it is expected to increase in the future; with this in mind, the priority mechanism could be positively applied, especially due to the fact that Recordals are not always an obvious or easy process.
Actually, in some countries, applications for Recordals must be requested for within a certain time from execution, especially if one has the need to enforce it. The reason to why I argue this is, when you have to record an IP transfer in several countries, it can become a costly and cumbersome exercise to prepare and file all Recordals together; therefore, it would be a much more relaxed and less expensive process if one could count on priority claims.
This is particularly true when you have to save on financial costs; a common issue that businesses face is that Registry Offices in different countries will claim a certain percentage out of the amount that is shown in the assignment.
Moreover, the text of the deed often requires changes from country to country, but if we were able to count on priority claims, it would be possible to fix a possible date and then begin drafting all the other alternative versions.
I also deal with cases of criminal relevance; this is where you can be the real assignee and be the first to record it in your home country, but then a third party tries to be first to record themselves fraudulently in an alternative jurisdiction.
Bad practice and mistakes by the Trade Marks Office (TMO)
When there is a change of ownership, simultaneously there are frequent cases whereby the examiners overlook the completed or pending Recordal and issue objections/refusals. We are now not dealing with a matter of opinion, but simply with a matter of material error; the updated information was available but the examiners’ system did not get it, so that an ungrounded decision was issued. Where mistakes may occur, even for examiners, there ought to be a release from fees when such mistakes occur, a notice of correction by the applicant and to revoke the erroneous decision, thus letting the application to proceed without further costs.
To our knowledge, there is no express provision anywhere so that a substantial, further amount of work will be requested; nevertheless, we must consider the cost of updating the examiners’ software which is often is the main cause for these mistakes.
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We gain expert insight into healthcare with our interview with Katarzyna Czyżewska, who is based in Poland. She believes that the Polish medical legislation requires serious reforms, aimed at, above all, simplification of provisions and reducing the quantity and frequency of its modifications. Medical professionals have huge problems with following the constantly changing law and their incompetence in this field increases the level of their exposure to potential legal risks; this insightful interview allows Katarzyna to expand on the given matter.
Can you talk us through the types of legal matters that healthcare services and medical professionals have to deal with on a regular basis?
The Polish law in the field of healthcare is quite complicated, so the variety of legal issues involved in conducting business of professional activities on this market is quite broad.
First of all, financing healthcare services from the public funds is a very difficult subject in Poland. Our major piece of legislation in this field, the Act on reimbursement of medicinal products, medical devices and biocides, is very restrictive and designed to cut the public expenses on healthcare technologies rather than to offer new, innovative technologies to patients. Thus, our Clients often struggle to make their products or services available in practice to patients. On the other hand, the aforementioned Act is not at all the only statute regulating those issues; in fact, there are several different procedures or grounds based on which a product or a service can be reimbursed, which are provided for under several different acts.
That complexity of the reimbursement system also translates on the serious legal problems for healthcare professionals (i.e. physicians). Doctors are under scrutiny of the National Health Fund (the central public body, responsible for disposing of public expenses on healthcare), from the point of view of correctness of their prescription decisions (e.g. whether a given patient’s health condition justified the prescription of a reimbursed drug). On the other hand, a very serious and frequently raised question which physicians face in their daily practice is whether they can, and how they may, prescribe drugs off-label (i.e. not in line with the official, registered indications of a given product). The registration status of many medicinal products is not completely up to date with the scientific progress and current medical knowledge; whereas, doctors want to treat patients in line with the best and the most accurate standards.
Finally, the ultimate legal challenge for all the entities participating in the healthcare system is the rapidly changing and more complicated legislation. In this field, we do have new statutes enacted few times a year, sometimes changes of the law are revolutionary, meaning that business undertakings and healthcare professionals need to adapt to the new law very quickly.
What kinds of disputes can arise for medical professionals, such as negligence cases for example?
Negligence cases arise quite frequently in Poland; in fact, I would assume that the number has been increasing recently. This is due to the growing legal awareness of patients and their families, also supported by common media coverage of such matters. However, medical malpractice lawsuits are still quite difficult for patients; in general, the patient has to prove (or at least make probable in front of the court) that the malpractice indeed took place and that there is a causal link between the malpractice and the patient’s harm. The factual matters are rarely black and white, so that the patient can easily show that his or her health problems were directly caused by the physician’s (or healthcare unit’s) mistake or negligence.
What can medical professionals do in order to reduce their chances of being involved in such disputes? Are there common regulations often looked over by professionals?
Medical professionals should, first of all, follow their professional legislation which is the Act on the profession of a physician and of a dentist. This act lists the basic principles which a physician should obey in his or her professional practice. There is also binding in Poland the Act on patients’ rights and the patients’ ombudsman which provides for certain rights and guarantees for patients - any breach of its provisions by the medical professional naturally exposes that professional to potential lawsuit.
A very practical tip which I always tell to doctors who want to find the way to increase their legal safety against the possible claims from patients is to carefully record all decisions on treatment in the patient’s medical documentation; and in case of any doubtful, risky or not standard treatment which is to be initiated, a physician should always get a written declaration of consent from a patient. That documentation can be later used in a potential court case as a source of evidence on the proper conduct of a medical professional.
Do you find personal ethics often clashing with legal regulations? How do you overcome this and thus advise your clients in respects to this?
Professional ethics usually introduces higher standards of professional practice than the law itself; my usual advice to clients is that the law is the minimum standard and in order to completely secure themselves from any potential legal problems they should also follow the professional ethics. This is particularly important in case of physicians who are subject to the disciplinary liability in front of their disciplinary courts, which in the worst-case scenario, can even result in the relegation from the profession.
Is there anything else you would like to add?
The above description may sound like the Polish legislation on healthcare is not too user friendly and makes everyone’s life more complicated. It is truth, but on the other hand, Polish lawyers specialised in healthcare and pharmaceuticals have lots of work - this is somehow a positive.
