Opinion  |  12/08/2020

Position Paper on the Draft Bill for an Act to Strengthen Consumer Protection

The position paper relates to the changes to German unfair competition law (UWG) resulting from Directive 2019/2161/EU. Although they undermine the approach of the UWG (claim for damages of the individual consumer), the 1:1 implementation of the draft bill is to be approved - after an influence in advance was obviously impossible. It is suggested, however, that the Directive's opening clauses should be used more extensively and that guidelines not conditioned by them, such as influencer marketing, should be waived.

Opinion  |  11/11/2020

Position Paper on the Draft Bill for a Copyright Service Provider Act

In a position paper on the draft bill for an "Act to adapt copyright law to the requirements of the digital single market", the Institute provides suggestions in particular for the design of the planned Copyright Service Provider Act (UrhDaG).

A project group consisting of Reto M. Hilty, Valentina Moscon, Heiko Richter, Moritz Sutterer, Ansgar Kaiser and Aaron Stumpf issued a position paper on the  Copyright Service Provider Act
Research News  |  11/10/2020

Position Paper on the Copyright Law Reform: Liability for Online Service Providers

The Federal Ministry of Justice and Consumer Protection has presented a draft bill for the implementation of the new Directive on Copyright in the Digital Single Market into national law. In a position paper, the Institute provides suggestions for the design of the planned Copyright Service Provider Act.

A project group consisting of Reto M. Hilty, Valentina Moscon, Heiko Richter, Moritz Sutterer, Ansgar Kaiser and Aaron Stumpf issued a position paper on the  Copyright Service Provider Act
The project group with Aaron Stumpf, Moritz Sutterer, Reto M. Hilty, Heiko Richter, Valentina Moscon and Ansgar Kaiser (l. to r.).

The controversial Directive 2019/790 on Copyright and Related Rights in the Digital Single Market caused severe protests prior to its adoption, particularly in Germany. It was, above all, today’s Article 17 on the responsibility of online content-sharing service providers that was harshly criticized. In the context of the vote by the EU Council on April 15, 2019, the German government felt compelled to issue a protocol declaration according to which the controversial upload filters should be largely dispensed within the national implementation of the Directive.

The Member States must now transpose this EU Directive into national law by June 7, 2021. In October 2020, the Federal Ministry of Justice and Consumer Protection (BMJV) presented a draft bill for an "Act to adapt copyright law to the requirements of the digital single market", which has not yet been coordinated with other ministries. Above all, it was eagerly awaited how the Federal Government's protocol declaration can be actually implemented.

The copyright responsibility of online content-sharing service providers in Germany is to be regulated in future by an independent act, the Copyright Service Provider Act (UrhDaG). According to this, online content-sharing service providers are - as required by the Directive - generally responsible for the content uploaded by their users. However, they can exempt themselves from their liability by complying with specifically stipulated duties of care. The UrhDaG is intended to specify what these obligations are.

New act regulates copyright responsibility

The Max Planck Institute for Innovation and Competition accompanied the adaptation of copyright law to the requirements of the digital age already with regard to the EU Directive. A project group commented in great detail on the drafts of the EU Commission. The Institute now also issued a position paper on the current draft bill. The focus of this paper lies on the UrhDaG.

In principle, the six-person project group welcomes the establishment of the UrhDaG. The draft adopted "with innovative proposals a path that is fundamentally suitable for achieving the necessary balance of copyright interests in the distribution of copyright content via online platforms," the position paper states. On some points, however, the authors provide suggestions for the further legislative process, especially with regard to the planned licensing mechanism (Sec. 4 UrhDaG), the obligation to pay remuneration for legally permitted uses (Sec. 5 UrhDaG) and the consideration of minor uses (Sec. 6 UrhDaG). 

Overview of the suggestions in the position paper

According to the project group, Section 4 UrhDaG is likely to have a positive effect on the licensing market as it creates a regulation that sensibly shapes the requirements for action of online content-sharing service providers and rights holders in the licensing process. However, the position paper suggests some improvements and specifications in order to avoid legal uncertainties in the case of licensing through individual rights holders.

The project group welcomes the fact that in Section 5 UrhDaG the draft bill clarifies the applicability of the copyright limitations for the regulatory area of the UrhDaG in order to capture as many forms of "user generated content" as possible and make them legally accessible online. It expresses criticism, however, that online content-sharing service providers should be subject to an obligation to pay remuneration exclusively for the use of works for the purpose of a pastiche (Sec. 7(2) UrhDaG). "In view of the functional logic of the UrhDaG and the special interests of online content-sharing service providers, rights holders and users, as well as expected problems of demarcation, all uses pursuant to Section 5 UrhDaG should be remunerated by the online content-sharing service providers," the position paper states.

The planned facilitation of minor uses according to Section 6 UrhDaG is also appreciated by the position paper in principle. However, since there are doubts regarding the conformity of the concrete design with EU law, it is suggested that the objective should be implemented by means of a different legislative solution. The project group makes specific proposals for this.

Read the full text of the Institute's position paper (in German) here

The e-book "Modernisation of the EU Copyright Rules", edited by Reto M. Hilty and Valentina Mocson, can be found here

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Miscellaneous  |  10/23/2020

Evaluation of the Munich Proceedings in Patent Litigation – The Results Are Now Available

The regional court Munich I is one of only 12 German courts responsible for patent matters, along with Mannheim and Düsseldorf. For the past ten years, the „Münchner Verfahren“ (Munich Proceedings in Patent Litigation), which has now been evaluated in a research project at the Institute, has been an important factor for Munich as a patent location.

[Translate to english:]
Photo: Justiz Bayern.

With the European Patent Office (EPO), Federal Patent Court (BPatG), German Patent and Trademark Office (DPMA), institutions of the new Unified Patent Court (UPC), the Patent Attorney Chamber, numerous lawyers and patent attorneys, patent services as well as many innovative Bavarian companies with large patent portfolios, Munich applies as the “European Patent Capital”.

The regional court Munich I is one of only 12 German courts responsible for so-called patent matters, in particular patent infringement cases. As a rule, the plaintiff has the choice of which court to call. The regional court Munich I is third in terms of the number of entries behind Düsseldorf and Mannheim. An important factor for the patent location Munich is the „Münchner Verfahren“ (Munich Proceedings in Patent Litigation).

The strict deadlines of the procedure ideally lead to a first-instance ruling after 12 months. In contrast to other courts, Munich has a detailed first hearing, where the court discusses critical issues with the parties. Then, the parties have to make further written statements until the second hearing.

Scientific Evaluation By Max Planck Researchers – The Results

Ten years after its introduction, the procedure has been evaluated in order to gain knowledge for future improvements. The scientific evaluation was carried out by the Max Planck Institute for Innovation and Competition as part of a research project.

For the evaluation, representatives of parties to the litigation – mostly patent attorneys, and lawyers from law firms and companies – were interviewed through a structured questionnaire. In addition, case data on the length and outcome of litigation proceedings were systematically collected. On Thursday, 22 October 2020, the results were presented in an online event at the Palace of Justice in Munich.

“The participation in our survey was remarkably good. Those surveyed appreciate the fact that with this evaluation, the court calls on the legal profession to make suggestions for improvements,” reports Dietmar Harhoff.

The synopsis of the answers received in the survey shows that the procedure is seen as an outstanding locational advantage of the Munich court. Nearly 80 percent of the respondents believe that the introduction of the Munich Proceedings has considerably increased Munich’s attractiveness as a location for patent litigation.

Dietmar Harhoff emphasizes: “In patent litigation, attorneys appreciate first and foremost predictability and qualitatively well-founded decisions. Accordingly, they recommend in particular continuity in the composition of the chambers and a stronger specialization of the judges in patent law for the further development of the Munich location. Such measures could still increase the attractiveness of the location.”

The survey also showed possible approaches for a further improvement of the so-called „Hinweise zum Münchner Verfahren“ (Notes and Instructions on the Munich Proceedings in Patent Litigation), which the two chambers want to examine and update, if necessary.

A detailed report on the evaluation results will be presented by the end of the year.

More information:
Interview with Dr. Andrea Schmidt, President of the regional court Munich I, in JUVE-Patent (in English)
Press Release of the regional court Munich I on the results of the evaluation (10/22/2020) (in German)
Press Release of the regional court Munich I on the establishment of a new chamber for copyright law (10/01/2020) (in German)

Study  |  07/28/2020

Identifying and Measuring Artificial Intelligence – Making the Impossible Possible

Researchers of the Institute and the OECD have published a new study on how to identify and measure AI-related developments in science, algorithms and technologies. Using information from scientific publications, open source software (OSS) and patents, they find a marked increase in AI-related developments over recent years. The growing role of China in the AI space emerges throughout.

Artificial Intelligence (AI) is a term commonly used to describe machines performing human-like cognitive functions (e.g., learning, understanding, reasoning, and interacting). AI is expected to have far-ranging economic repercussions, as it has the potential to revolutionize production, to influence the behavior of economic actors and to transform economies and societies.

The vast potential of this (now considered) general purpose technology has led OECD countries and G20 economies to agree on key principles aimed at fostering the development of ethical and trustworthy AI. The practical implementation of such principles nevertheless requires a common understanding of what AI is and is made of, in terms of both scientific and technological developments, as well as possible applications.

Addressing the challenges inherent in delineating the boundaries of such a complex subject matter, the study proposes an operational definition of AI, based on the identification and measurement of AI-related developments in science, algorithms and technologies. The analysis draws on information contained in scientific publications, open source software and patents.

Approach of the study

The three-pronged approach of the study relies on an array of established bibliometric and patent-based methods, and is complemented by an experimental machine learning (ML) approach implemented on purposely collected open source software data:

  • The identification of the science behind AI developments builds on a bibliometric two-step approach, whereby a first set of AI-relevant keywords is extracted from scientific publications classified as AI in the Elsevier’s Scopus® database. This set is then augmented and refined using text mining techniques and expert validation.
  • As AI is ultimately implemented in the form of algorithms, the authors use open-source software’s information about software commits (i.e., contributions) posted on GitHub (an online hosting platform) to track AI-related software developments and applications. Such data are combined with information from papers presented at key AI conferences to identify “core” AI repositories. Machine learning techniques trained using information for the thus identified core set are used to explore the whole set of software contributions in GitHub to identify all AI-related repositories.
  • Information contained in patent data serves to identify and map AI-related inventions and new technological developments embedding AI-related components. Text mining techniques are used to search abstracts and patent documents referring to AI-related papers.

Selected findings of the study

  • The authors find an acceleration in the number of publications in AI in the early 2000s, followed by a steady growth of 10% a year on average until 2015, before accelerating again at a pace of 23% a year since then. The share of AI-related publications in total publications increased to over 2.2% of all publications in 2018.
  • 28% of the world AI-related papers published in 2016-18 belongs to authors with affiliations in China. Over time, the share of AI publications originating from EU28, the United States and Japan has been decreasing, as compared to the levels observed ten years earlier.
  • Since 2014, the number of open-source software repositories related to AI has grown about three times as much as the rest of open-source software.
  • There is a marked increase in the proportion of AI-related inventions over the total number of inventions after 2015. This ratio averaged to more than 2.3% in 2017.
  • “Neural networks” and “image processing” are the most frequent terms appearing in the abstracts of AI-related patents.
  • In AI-related patents, the contribution of China-based inventors multiplied more than six fold since the mid-2000s, reaching nearly 13% in the mid-2010s.

For more facts and detailed information, see the publication:

Stefano Baruffaldi, Brigitte van Beuzekom, Hélène Dernis, Dietmar Harhoffi, Nandan Rao, David Rosenfeld, Mariagrazia Squicciarini (2020).
Identifying and Measuring Developments in Artificial Intelligence: Making the Impossible Possible.
OECD Science, Technology and Industry Working Papers No. 2020/05.

Stefano Baruffaldi is Affiliated Research Fellow in the department Innovation and Entrepreneurship Research and Assistant Professor at the University of Bath.

Dietmar Harhoff is director at the Max Planck Institute for Innovation and Competition.

[Bitte nach "english" übersetzen:] The publication „The Revitalisation of the Object and Purpose of the TRIPS Agreement: The Plain Packaging Reports and the Awakening of the TRIPS Flexibility Clauses” by Christophe Geiger und Luc Desaunettes-Barbero shows that the "plain packaging" decisions do not only concern trademark law, but also give more flexibility to the TRIPS Agreement
Study  |  07/27/2020

More Flexibility for the TRIPS Agreement

Public health can constitute a legitimate reason to encumber trademark use: This was recently confirmed by the WTO Appellate Body. A current publication concludes that the decision provides more flexibility to WTO members for adapting intellectual property rights to new realities.

[Bitte nach "english" übersetzen:] The publication „The Revitalisation of the Object and Purpose of the TRIPS Agreement: The Plain Packaging Reports and the Awakening of the TRIPS Flexibility Clauses” by Christophe Geiger und Luc Desaunettes-Barbero shows that the "plain packaging" decisions do not only concern trademark law, but also give more flexibility to the TRIPS Agreement
The „plain packaging“ descisions are likely to have an impact beyond the tobacco industry

Plain packaging for cigarettes does not violate international trade rules: With its confirmation of the original decision of the WTO Panel of 2018 the Appellate Body of the World Trade Organization in June aroused worldwide media interest and ended a legal dispute that had lasted almost a decade.

The backdrop: In 2012 Australia became the first country in the world to introduce uniform sludge-green packaging for cigarettes, with drastic pictures warning of the consequences of smoking. Regarding brands, it decreeds that all logos or trademarks were to be removed from tobacco packages and the brand name should be printed only in small standardised fonts. This prompted the four tobacco-producing countries Indonesia, Honduras, the Dominican Republic and Cuba to file a complaint via the WTO dispute settlement system. They argued the measures constitute a violation of the TRIPS Agreement (Agreement on Trade-Related Aspects of Intellectual Property Rights). After their complaint was dismissed in 2018 by the Panel, Honduras and the Dominican Republic raised an appeal, which was rejected in June.

Impact goes beyond trademark law

The decisions are likely not only to accelerate the implementation of “plain packaging” worldwide, but also to have impact far beyond the tobacco industry. The current publication “The Revitalisation of the Object and Purpose of the TRIPS Agreement: The Plain Packaging Reports and the Awakening of the TRIPS Flexibility Clauses” by Christophe Geiger and Luc Desaunettes-Barbero shows that the impact of the decisions goes beyond trademark law and even opens up new room for interpretation of the whole TRIPS Agreement.

The study focuses on the new application of the so-called flexibility clauses in the "plain packaging" decisions. These clauses entailed in its Articles 7 and 8 describe the objectives and principles of the TRIPS Agreement. While they have so far played only a residual role in the interpretation of the provisions of the Agreement in practice, the WTO dispute settlement bodies for the first time fully engaged with them in the “plain packaging” decisions. As a result, they conclude that public health may constitute a legitimate reason for limiting trademark use. 

The authors show that the new reading of Articles 7 and 8 offer the possibility for a more flexible interpretation of the TRIPS Agreement. This applies in particular to the limitations and exceptions. By refraining from using Articles 7 and 8 in the past, the WTO established a rigid interpretation of these exceptions: The focus was on a strong protection of intellectual property rights without taking into account that such an interpretation could lead to dysfunctional effects in individual cases. The “plain packaging” decisions offer the WTO members more flexibility to adapt intellectual property rights to new realities and the possibility to take into consideration conflicting human rights.   

The publication can be found here.

Research News  |  05/05/2020

Modernizing Patent Law: New Rules for the Digital Age

The claim for injunctive relief under patent law shall be subject to proportionality in the future. The Institute has issued a position paper on the amendments proposed by the Federal Ministry of Justice and Consumer Protection.

Digitization poses new challenges for patent protection. In particular, the large number of patent-protected individual components used in some products makes it difficult to identify all the relevant property rights and to acquire the necessary licenses.

Just over ten years after the last amendment to the Patent Act by the (first) "Act to Simplify and Modernise Patent Law" the, the Federal Ministry of Justice and Consumer Protection submitted a discussion draft at the beginning of this year that provides for a selective revision of the Patent Act. At the heart of the amendment is the flexibilisation of the injunctive relief in Section 139(1). This grants the patentee the right to prohibit the use of his patent by third parties. The discussion draft proposes to insert a third sentence to the Section, clarifying that the enforcement of the injunction can be excluded in individual cases if it would be disproportionate.


Suggestions for the further legislative process

In practice, such constellations are likely to arise in the case of "complex products" which often comprise a large number of individually patented components that, in themselves, contribute only marginally to the value of the final product. As a result, each patentee enjoys a position of power that is out of proportion with the contribution of its invention to the final product, since the patentee can, under certain circumstances, stop the production of a product with an injunction. In the case of standard-essential patents (SEPs) or “non-practicing entities”, which do not have or do not want to establish any production capacity themselves, the granting of injunctive relief may also be disproportionate in individual cases.

The Institute, which issued a position paper on the discussion draft in March, in principle welcomes the proposed limitation of the claim to injunctive relief. However, the Institute does also provide certain suggestions with regard to the further legislative process, for example with regard to the criteria used for the assessment of proportionality. The discussion draft ties in with the principle of good faith; in the statement, the "leverage effect" of the injunction is in the foreground.  The authors are particularly concerned about the prioritisation of the patentee's interests over the interests of other parties or the public. “Such prioritisation is neither desirable as a matter of policy, nor justifiable by the exclusive nature of the patent right”, argues the position paper.

The position paper also criticizes the fact that the discussion draft rejects the consideration of third party interests and public interests in the context of the proportionality assessment categorically. The Institute contradicts the argument of the Federal Ministry that general interests are sufficiently and conclusively protected by the institute of compulsory licensing under Sec. 24 Patent Law.

Read the full text of the Institute's position paper here

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Study  |  04/30/2020

Digitalization by Corona? New bidt Study on Remote Work in Germany

Dietmar Harhoff, director at the Max Planck Institute for Innovation and Competition and member of the board of directors of the Bavarian Research Institute for Digital Transformation (bidt), is co-author of the study on the spread and acceptance of remote work in Germany. He stresses that companies should not return to old organizational patterns after the crisis.

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Illustration: bidt

The Bavarian Research Institute for Digital Transformation (bidt) has examined important questions concerning the spread and acceptance of work from home. To this end, bidt conducted a representative short survey among 1,595 employed adult Internet users in Germany. The analysis shows:

  • The use of remote work has increased during the crisis.
  • The satisfaction with the current situation of remote working is high.
  • Before the Corona crisis, some employers did not allow remote work.
  • Employers were generally well prepared.
  • The acceptance of remote work has increased.
  • The desire for more working from home is strong.

Dietmar Harhoff explains that there is a high level of acceptance among employees for remote work. The economy must take up this willingness, he says. Germany is lagging behind in the EU comparison when it comes to remote working. Home-based work is not only a question of organizational culture. It also leads to new management concepts and strengthens digitalization and innovative ability.

To the detailed bidt study (in German).

Here you can also listen to the podcast “Job Cuts and Remote Work: How Corona Is Changing the World of Work” (in German) in the NDR Info Speaking Time (30 April 2020) with contributions from Dietmar Harhoff.

Opinion  |  03/11/2020

Position Paper on the Proposed Reform of the German Patent Act

The Position Paper generally welcomes the initiative of the Federal Ministry of Justice and Consumer Protection, but makes suggestions for improvements, in particular, with regard to the application of the principle of proportionality in the injunction relief proceedings and the protection of trade secrets in patent litigation. 

Opinion  |  02/11/2020

Comments on the Draft Issues Paper of the WIPO on Intellectual Property Policy and Artificial Intelligence of 11 February 2020