Jaguar Land Rover (UK) – Winds Evoque “copycat” case in China

In 2015 Chinese Automotive Manufacturer Jiangling Motors Corp Limited (“JMC”) showed their new vehicle, the Land Wind X7.   Even from a short distance this vehicle looked very similar to Jaguar Land Rover’s (“JLR”) Evoque and a ready market arose quickly in counterfeit Land Rover branding to apply to the Land Wind product, to make it look even more like the JLR product.

In 2016, JLR sued JMC for design patent infringement.  Unfortunately, however, JLR’s design patent was declared invalid in April 2016 because “the design had been displayed or published elsewhere before a patent application was filed”.   Apparently, the following month, Land Wind’s design patent for the X7 was also invalidated on the grounds that it looked too much like the Evoque!

This left JLR with no option but to pursue a copyright and unfair competition action against JMC’s Land Wind, which most commentators expected to fail.  One particular problem with this action was that there was no real evidence of confusion, since buyers of the Land Wind product were very clear that they were not buying the Evoque product, not least because the Evoque costs approximately three times as much as the Land Wind X7, in the Chinese market.

However, last Friday (22nd March 2019) the Beijing Chaoyang District Court ruled that five major features of the car were copied and ordered JMC to cease production, sales and marketing of the Land Wind vehicle.  JMC has fifteen days to appeal against the decision and the company has so far not made a public comment.  Apparently, the five major similar features included the Evoque’s side body design, window outlines and the front and rear lights.  As of Sunday 24th March 2019, distributors of the Land Wind X7 apparently had yet to be told to cease sales.

JMC have Joint Venture Agreements, for example with Ford, but their direct products such as the X7 have been selling poorly in recent years, with a 76% decline in sales over the last year (equating to approximately half the number of Evoques sold by JLR in the same period).  This judgement will be a further blow to JMC.

This appears to be a landmark case for foreign car makers in China, which is particularly useful following the April 2018 removal of trade barriers, such as the requirement to form Joint Venture Agreements with local car manufacturers.  Other manufacturers such as Honda have tried and failed in the past to prevent sales of “copycat models”.  However, it is important to recognise that some of these earlier cases were based on weak registrations, or indeed involved no registrations at all, and thus relied heavily on un-registered rights, which are always harder to enforce.  Tesla and Honda are still in the process of suing local companies under IP rights and it will be interesting to see how successful those cases are.

Many foreign companies have historically taken the view that it was not worth making applications for registered Intellectual Property rights in China.  This is an outdated view and this new case shows that, even without registered rights, it is possible to win even on the much harder grounds of copyright and unfair competition.  This appears to clearly demonstrate the Chinese nation’s willingness to move towards a level playing field for national and foreign companies alike.

By Andrew Mackenzie

What were the first patents in the automotive industry?

Over the past two centuries, there have been over 100,000 patents granted worldwide in the automotive industry. (more…)

What automotive patents have CSY worked on?

Here at Cleveland Scott York, we are able to provide our clients on specialist assistance with claims under the Patent Box regime.

Listed below are a number of automotive patents that have been successfully approved thanks to our representation.

Method of Generating a Prioritized Listing of Customers Using a Purchase Behaviour Prediction Score

This method allied field to automotive manufacturing by using artificial intelligence to predict who the next customer will be for a financial product to buy a vehicle. The system analyses the purchase and finance history, in order to prioritise a list of potential future customers.

This patent stretched the boundaries of computer programming and business method patentability exclusions.

For more information about this patent, please visit the European Patent Office website here: https://bit.ly/2SypJUy

Tactile Graphic Display

This design is intended to improve windscreen cleaning in passenger vehicles, as the display uses an electromechanical system with a computer-enhanced user interface.

For more information about this patent, please visit the European Patent Office website here: https://bit.ly/2GqyVDM

Position Sensing System

This is a detailed patent application directed to a part of the motor or generator control system.

The system operates by an integrated starter generator, which may typically be used in hybrid and stop-start applications and also higher voltage generator systems e.g. 48v systems.

For more information about this patent, please visit the European Patent Office website here: https://bit.ly/2V4sUAb

Liquid Cooled Electrical Machine

This is a process patent that is used to manufacture a liquid-cooled integrated starter-generator (ISG).

For more information about this patent, please visit the European Patent Office website here: https://bit.ly/2UX4gkD

Transmission for Energy Storage Device, Energy Storage Device and Method for Controlling the Transmission

This method controls the mixing of power input from a conventional prime mover (e.g. an internal combustion engine) and alternative power source.

For more information about this patent, please visit the European Patent Office website here: https://bit.ly/2S2YImV

 

Eight top tips before you file for an automotive patent

So, you have invented an automotive product that is useful, original and novel. Now as the owner you need a patent to exclude others from making, using, selling, and importing your invention.

Below we have listed eight top tips you should consider before you file for an automotive patent.

  1. Only patent what you need to

A narrow patent that covers something that competitors must have is a strong, commercially useful tool and will be cheaper and quicker to obtain, than a broad patent.  Remember, you are trying to patent what a competitor might need to do in order to compete effectively.  You are not necessarily trying to cover your own product.

  1. Choose territories carefully

Costs will scale with territorial coverage so decisions on territory have a significant impact on costs.  You will only need protection in your key selling markets and possibly a few likely manufacturing markets where a competitor might choose to manufacture.  In the automotive field you probably only need to cover the US, UK, Germany, France, Japan and China.  For an important invention, you might also consider Spain, Italy, and South Korea.  Effective protection for Africa in this field can often be achieved with just a South African filing.  If you have control of those markets, an OEM is unlikely to make a special vehicle just for the remaining markets, so you will have gained effective worldwide control.

  1. Remember to allow for renewal costs in your budget

In a mature portfolio, renewing patent rights by paying the mandatory Government renewal fees will probably cost more than you will be spending protecting new ideas.  Keep this cost under control by regular review of your older IP rights – licence, sell or cull those you aren’t using.

  1. Easily watch your competitors

Consider using patent publications as a source of competitor information.  They are well-indexed and easily searchable online.

  1. Secrecy and making sure to file at the right time

For most territories, it is essential to file a patent application before public disclosure of the underlying idea.  Consider using non-disclosure agreements to keep the idea confidential during development, prototyping and testing.  Remember that testing in a place that is open to the public or even visible via a perimeter fence may result in accidental publication of your idea.  Official vehicle testing facilities usually have secrecy mechanisms in place.  At the other extreme, the public highway definitely does not!

  1. Be careful about ownership, particularly in joint ventures

Syndicates with multiple parties carrying out different parts of a single development project are common in this field.  Be sure you understand who owns what IP rights as you enter the collaboration and who owns what parts of the work which are developed during the collaboration.  Be sure also to understand what you are free to do with the technology after the project finishes – you may have no freedom to use it.  Sub-contracting work to third-parties has similar hazards.  This can usually all be resolved with suitable contracts but remember that these are much easier negotiated at the beginning, than at the end.

  1. Consider doing patent searches

Searches can be useful before you start development as the materials may help spark a streak of your own innovation and may also help you avoid dead ends.  Be careful of course not to copy material that has granted, in-force patents covering it.

Searches are also useful to avoid wasting time and money patents that will never be allowable with a commercially useful scope because the idea is broadly not new.

  1. Be clear what you want

Before filing a patent application, be clear what you will do with it.  How will it add value?  Will you licence it or perhaps sell it with the business division?  Will it be used to gain and justify external investment?  Will it be used in a cross-licence to gain access to someone else’s technology?  Will you expect to enforce it against others?  Will you do this only if they attack you first and thus use it defensively?

 

What crazy automotive patents got approved?

For a patent and trademark office to approve a patent, the invention must be novel, non-obvious and useful. Detailed below are just a handful of crazy automotive patents that somehow got approved.

The Automobile Attachment

On 1 June 1927, Eugene L. Baker from Massachusetts filed for a patent for an ‘automobile attachment’.

The invention comprised of a simple and efficient device to be attached to the vehicle, which would then allow the driver to speak to people in front of the vehicle to help facilitate traffic.

This patent was then approved by the United States Patent Office on 28 January 1930 (1,744,727).

Device for Horseless Vehicles for the Protection of Pedestrians and the Vehicle Itself

Heinrich Karl from New Jersey filed his application for an ‘automatic device for horseless vehicles for the protection of pedestrians and the vehicle itself’ on 2 September 1930.

The invention consisted of a device being installed on the automobile to help prevent injury or death to pedestrians when struck by said vehicle. The device would also serve as a protective barrier for the automobile if it collides with another vehicle or a stable structure.

In the event of a collision, instead of a pedestrian being run over by the wheels of a motor vehicle, a blanket of cloth or rubber would be spread in front of the wheels of the vehicle so that the individual struck would have a soft landing to help protect against any injuries.

This crazy idea was patented on 28 June 1932 (1,865,014), despite the fact that this invention excuses dangerous driving, as well as allowing drivers to have no repercussions if they hit a pedestrian.

Ice Block as Substitute for Vehicle Wheels                                                         

In April 1963, an application was filed for the ‘ice block as a substitute for vehicle wheels’ by Dragan Rudolf Petrik, from South Africa.

This automotive invention involved ice blocks in any form, shape and size being applied as skids to any kind of vehicle that is powered by a jet engine, propellers, electrical.

To allow the ice blocks to function, part of the ice block would melt to provide the sliding motion needed for the vehicle to move down a metal track or other prepared surfaces, whilst the other part of the ice block would be kept cold by a freezing machine.

This patent was later approved by the UK Patent Office on 20 April 1964 (16370/64).

Click here if you need to know more about Patents.

 

Landmark Decision For Landmark Graphics Corporation?

Computer Implemented Inventions at the UK Intellectual Property Office

In 2014, Landmark Graphics Corporation (a Halliburton company) filed a series of non-convention PCT applications relating to various techniques for assessing petroleum reservoir performance.  Landmark then took the unusual step of filing national phase patent applications at the UK Patent Office rather than the European Patent Office (EPO), with its quite significantly different approach to computer implemented inventions.  Whilst this has probably given Landmark a higher hurdle to overcome (and it is pleasing to note that they were generally successful with these applications), it has had the beneficial side effect that third parties now have a large number of recent decisions to assess the UK Intellectual Property Office’s current approach to excluded matter.

BL O/155/18 is one of a set of decisions (the others being BL O/112/18, BL O/138/18, BL O/140/18, BL O/143/18, BL O/148/18 and BL O/154/18) which between them relate to sixteen UK applications, and which were issued in early 2018.  In this particular decision, the Hearing Officer considered whether what had been added to human knowledge was merely a computer program or mathematical method as such. He found that “the invention provides a flexible way of altering the way in which … geophysical data is presented to a user and is clearly directed to the technical field of endeavour of visualising characteristics of petroleum reservoirs.”  There was also some discussion of errors being reduced and thus “the object [being] changed or manipulated in some way even though the underlying … data is not changed” – perhaps an echo of the old US Bilski machine or transformation test.

The Hearing Officer analysed the UK Patent Office Examiners’ approaches under the well-known Aerotel 4-step test, and generally concluded that the Examiners had applied this test too narrowly.  The applications were therefore remitted to the Examining Sections for further consideration of novelty, inventive step, clarity and support issues.  The Hearing Officer looked at EPO Boards of Appeal case law and commented that the approach used by the Examiners based on the UK Aerotel test may have been inconsistent with the UK Courts. Perhaps we will now see a revision of the UK manual of patent examining practice and a more relaxed approach to computer implemented inventions that will be more consistent with European Patent Office case law and, arguably, the UK Courts.

For more detailed information the main approach is set out in BL O/112/18.

Authored by Andrew Mackenzie[:]

St Albans firm to help engineers understand how to protect cutting-edge technologies from copycats

A firm of intellectual property law specialists, which has a major presence in St Albans, is to help engineers recognise how a range of cutting-edge technologies, including robots and Artificial Intelligence (AI), can be protected from copycats at a conference next month.

Attorneys from Cleveland Scott York will be attending the Southern Manufacturing and Electronics Show in Farnborough from 6-8 February 2018 to raise awareness amongst professionals in the sector about how they can protect their innovations.

On Tuesday 6 February, Andrew Mackenzie, a Partner and Chartered Patent Attorney at the firm, will deliver a talk entitled ‘what can you patent anyway?’ to help researchers and engineers recognise when they have something that might be protectable.

The talk will include a discussion of the Internet of Things (IOT) and Robotics, including Artificial Intelligence (AI) technologies, where it might not always be clear exactly which aspects an innovation can be patented.

Andrew Mackenzie said: “Investment in research and development usually depends on being able to generate a profitable return.

“However, if someone else is able to simply copy the innovation that has come about as a consequence, that return will be diminished and there will be little incentive to invest in developing new technologies.

“In fact, many of the technologies we rely on every day would not have been developed if they had not be protected with patents, preventing competitors from commercially exploiting the products of someone else’s investment in research and development.

“However, the rules on patents are complex and it is not always obvious which aspects of an invention can be protected.

“I am looking forward to helping engineers from across the UK understand how they can identify aspects of their inventions that can be protected.”

Southern Manufacturing and Electronics takes place from 6-8 February 2018 at FIVE, Farnborough, with Andrew Mackenzie’s talk on ‘what can you patent anyway’ taking place at 3.15pm on Tuesday 6 February.

Information about how to attend the show is available from: http://www.industrysouth.co.uk/.[:]

Europe Leads the way on 4IR technologies

A recent study by the European Patent office, confirms that 29% of inventions in this field come from Europe, with the top three European countries being the United Kingdom, France and Germany.  Worldwide, the second largest contributor is the USA (25%) followed by Japan (18%), Korea (13%), and China (6%).

The so-called 4th Industrial Revolution (4IR) or Industry 4.0, is characterised by the blurring of cyber, physical and biological networks to create intelligent and autonomous systems with man and machine working alongside each other and machines talking to machines (M2M) to continuously refine their operations without human input.  The EPO study covers the three areas of core technologies in the ICT field that make it possible to create connected objects; the enabling technologies that complement the core technologies, such as Artificial intelligence (AI) and user interfaces; and application areas of these technologies, such as vehicles, enterprise and home.

Early stage technologies in this field are primarily driven by the emergence of the Internet of Things (IoT) and AI such as Apple’s Siri and Google Assistant.  4IR also encompasses a number of other technologies, such as cloud computing and other areas of artificial intelligence, that make it possible to fully exploit the potential of smart connected objects in nearly all sectors of the economy.

The study was conducted by looking at all European patent applications related to smart objects up to 2016.   The study found that application numbers began to rise steeply in the mid-1990s in all three 4IR sectors.  Patent application numbers in this area had risen to over 5,000/year by the end of 2016 and In the last three years of the study , the rate of growth of filings was 54%.

If you are developing technologies in this field you should almost certainly be considering patent protection for your developments, and it is clear that many businesses are already doing so.  If you need any assistance with this just get in touch and we will be happy to help.

Study link:  http://documents.epo.org/projects/babylon/eponet.nsf/0/17FDB5538E87B4B9C12581EF0045762F/$File/fourth_industrial_revolution_2017__en.pdf[:]

The New Patent Box Rules – Changes from 1 July 2016

he Patent Box regime introduced in April 2013 provides tax relief for UK companies exploiting certain qualifying patents. The regime effectively provides for a 10 per cent tax rate on qualifying profits derived from UK, EPO or many EEA national patents.

Contrary to reports elsewhere, not all European patents are eligible, for example French patents are excluded, presumably because France has a basic patent system which does not provide for patent examination.  Thus it is very simple to gain patents in France, but they may have no validity.  This would then allow abuse of the Patent Box relief.  The list of eligible countries in on the HMRC Guidance page.

As we reported in November 2014 a dispute with Germany was resolved by agreeing to change the basis of the tax calculation to tie it more closely to research and innovation based in the country.  Subsequently, the OECD named the Patent Box as a ‘harmful tax practice’ in its October 2015 BEPS report.

The original Patent Box legislation did not directly link the availability of the reduced rate to the research and development (R&D) carried out by the claimant in relation to the patented invention. Broadly, it was enough that the company ‘actively’ held the qualifying IP right.

Key changes

The Finance Act 2016 introduces a new regime to replace the existing regime.  Under the ‘new’ regime, the profits of a particular ‘stream’ of IP subject to the reduced rate will decrease where the qualifying R&D sub-contracted to connected persons and other expenditure on qualifying IP rights is more than 30 per cent of the cost of R&D (including that subcontracted to third parties) contributed by the company claiming Patent Box treatment. This result is achieved by the introduction of a ‘nexus fraction’ and is clearly designed to stop multinational groups ‘moving’ overseas IP into the UK to benefit from the reduced tax rate.

This change is likely to reduce the benefit of the Patent Box where significant R&D is carried out by other group companies. Peculiarly, no distinction is made between UK and overseas group companies, meaning that many UK groups could be adversely affected unless they are able to reorganise their R&D activities.

The ‘new’ regime will also increase the administrative burden, as the calculation of qualifying profits, and the tracking of underlying R&D, will be more complex.

Timeline of changes

IP rights acquired from related parties on or after 2 January 2016 will in many cases be within the ‘new’ regime from 1 January 2017, but the ‘old’ regime will still apply until that date.

Other existing qualifying IP rights and patents pending as at 30 June 2016 are within the ‘old’ regime, provided a valid Patent Box election is made for an accounting period beginning before that date.

Patent applications made after 30 June 2016 are within the ‘new’ regime.

Companies first electing into the Patent Box for periods beginning on or after 1 July 2016 are within the ‘new’ regime. Normal time limits apply in relation to all such elections and these can be made retrospectively.  The election does not need to have been made before 1 July 2016.

The ‘old’ regime closed on 30 June 2021, after which all Patent Box profits will fall within the ‘new’ regime. Prior to this date, companies can choose for the ‘new’ rules to apply to ‘old’ IP, but this is unlikely to be beneficial.

Actions

  • Consider electing into the existing Patent Box regime where UK or European patents are already in place.  For pre 1 July 2016 patent filings, you will usually have a choice of which regime to apply, although as noted above, the old regime will almost certainly be more beneficial.
  • Consider making new patent applications.  All those filed from now will be considered under the new regime only.
  • Consider applying for UK or European patents, where overseas patents already exist – usually only available within a year of the overseas filing.  If these overseas patent have a filing date before 1 July 2016, this can be claimed for your new UK or European filing.
  • Review group arrangements with regard to holding and developing IP, to ensure future claims are maximised.

Obtaining patents for your IP may be quicker and less costly than you think. We can provide introductions to accountants we work with regularly and who are familiar with the Patent Box.  They can ensure that your company meets the requirements of the regime appropriately and cost-effectively.

Article by Andrew Mackenzie[:]