Cost cuts, ditched desperados and digital disclosure

Patents in Europe: improving access and affordability 

Last month, we covered the continuing growth of filings at the EPO, as total patent applications rose 2.9% during 2023 to a record 199,275. On top of this impressive figure, the Unitary Patent option displayed strong uptake during its first seven months of availability. Hence, unitary effect was requested for 17.5% of all patents granted by the Office last year, despite only being offered from the beginning of June.

What these overarching statistics tend to obscure, however, are the demands placed on the vast number of smaller enterprises pursuing patent rights. Though individually filing fewer applications, these entities are more acutely affected by inflationary pressures given that they do not profit from economies of scale and must invest a more significant proportion of their budgets into securing IP rights.

In light of this, the EPO's revision of its fee system is very welcome. Introduced on April 1, the extensive package of changes promises to simplify the payment structure, encourage the use of web-based services and ensure the Office's proper funding. Chief among the measures is a substantial discount for those innovators with lessened access to patents. Thus, "micro-enterprises, natural persons, non-profit organisations, universities and public research organisations […] will benefit from a 30% reduction in all main fees in the patent grant procedure, provided they have filed fewer than five applications in the last five years."

To offset the effect of this reduced income on the Office's financial viability, procedural fees, excluding those for filings, oppositions and appeals, will be modestly increased. Combined with the EPO's own improved efficiency, this 4% price rise is claimed to be sufficient to keep the organization "operating at cruising speed."

The EPO highlights that its internal renewal fees are lower in absolute terms than in 2016. This achievement is facilitated by a steady expansion in filings from that time, only briefly interrupted in 2020 with the onset of the COVID-19 pandemic. Industries and offices quickly adapted, with much of the increase witnessed last year attributed to a surge in applications originating from Asia, particularly China and the Republic of Korea, where all top three filing companies – Huawei, Samsung and LG – are based. Meanwhile, the traditional EPO cornerstones of its own members and the United States witnessed only a modest accretion during the same period, at 1.8% and 0.4%, respectively.

Effectively, larger and more active innovators will be partially subsidizing the route to patent protection for individuals and small and medium-sized businesses. In return, fostering a more pluralistic environment enriches the state of the art for all participants. 

As a final piece of good news, there will be no biennial inflation adjustment in 2025, meaning patent applicants will be able to take advantage of frozen fees for some time.

​Escobar trademark in the court of public opinion

On April 17, 2024, the European Court of Justice (CJEU) ruled that the name "Pablo Escobar" could not be registered as a European Union trademark. The judgment dismissed an appeal filed by Escobar Inc. against the refusal of the European Union Intellectual Property Office (EUIPO) in June 2022.

The name of the late Colombian national was initially found to be "contrary to public policy and to accepted principles of morality" in light of his marked association in Europe, and particularly Spain, with drug trafficking and cartel violence. This month, the General Court of the CJEU agreed, holding that the relevant Spanish public, being "reasonable and having average sensitivity and tolerance thresholds," shared the "indivisible and universal values" of the EU's establishment.

The denied applicant, Escobar Inc., was established in Puerto Rico (United States) by the presumed drug lord's brother, Roberto de Jesús Escobar Gaviria. Seeking an EU trademark for a wide variety of goods, Escobar Inc. argued that the rejection was not in line with past EU trademark registrations for the names of Bonnie and Clyde, Al Capone or Che Guevara. Additionally, it was claimed that EUIPO's decision infringed the deceased's fundamental right to the presumption of innocence, as enshrined in Article 48 of the EU Charter. This was based on the fact that despite a notorious reputation as the founder and leader of the Medellín cartel, Pablo Escobar was never convicted by a court in Colombia, the United States or Europe.

In dismissing these grounds, the General Court found that the decisions the EUIPO's Boards of Appeal are compelled to make are "adopted in the exercise of circumscribed powers and are not a matter of discretion. Accordingly, the legality of those decisions of the Boards of Appeal must be assessed solely on the basis of [Regulation 2017/1001], as interpreted by the Courts of the European Union, and not on the basis of a previous decision-making practice." As such, neither the iconic status of high-profile criminals nor a selective romanticization of Ecobar's image in Spain was enough to overcome the widespread offense likely to be caused by the mark.

In a similar vein, the point of Escobar's presumed innocence was deemed moot in the face of this overwhelmingly negative association with organized crime and narco-terrorism.

The rulings of the EUIPO and CJEU underscore the duty of trademark registration to comply with prevailing moral standards and respect the EU's inextricable values of human dignity, freedom, equality and solidarity.

Citation needed: forcing AI to show its sources

Responding to prevalent concerns surrounding the use of copyrighted material to "train" AI models, a bill has been introduced to the United States Congress that would adjure transparency from developers. If passed, the Generative AI Copyright Disclosure Act introduced by Representative Adam Schiff would mandate that anyone creating a training dataset submit a notice to the Register of Copyrights informing it of any relevant content.

This communication would need to consist of "a sufficiently detailed summary of any copyrighted works used," including URLs in the case of publically available internet sources. Notably, the Act would also apply retroactively to generative AI models produced prior to the legislation's effective date. Hence, all currently available tools would be affected if copyrighted material was employed in their training.

"AI has the disruptive potential of changing our economy, our political system, and our day-to-day lives," commented the Democratic Congressman of California in a press release. "We must balance the immense potential of AI with the crucial need for ethical guidelines and protections. [This Act] is a pivotal step in this direction. It champions innovation while safeguarding the rights and contributions of creators, ensuring they are aware when their work contributes to AI training datasets. This is about respecting creativity in the age of AI and marrying technological progress with fairness."

Leaders from a wide variety of labor unions and trade associations in the United States have expressed their endorsement of the proposed legislation. Some of those represented are the Directors Guild of America (DGA), the Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) and the American Society of Composers, Authors and Publishers (ASCAP).

The bill was introduced to Congress just three days after a report by The New York Times exposing OpenAI's alleged use of YouTube videos to train its ChatGPT4 model. According to anonymous insiders, OpenAI president Greg Brockman was personally involved in the project to transcribe over one million hours of video to create a unique language dataset. It is also purported that the AI developers were aware of the potential to breach YouTube's terms of service. However, copyright law itself has been infamously hazy thus far.

Though regulations such as the Generative AI Copyright Disclosure Act could bring much-needed clarity to the situation, the question of what training actions are legitimate and which have the capacity to infringe IP rights is still unresolved. How creativity is protected and rights holders are compensated are more formidable problems than have yet been addressed.