Research News

The Institute is officially recognized by UNCITRAL due to its research focus in the field of Artificial Intelligence (AI) and Data Law respectively. The technology-specific research approach, which the Institute pursues more closely, especially in invention and creation processes in the IP area, helped in the preliminary work and in the final version, which was adopted by the UNCITRAL Commission this summer at its 57^th session in New York.

The Model Law provides a legal framework to enable the use of automation in contracts, including the use of AI technologies and “Smart Contracts”, as well as for machine-to-machine transactions. It is intended to complement and supplement existing laws on electronic contracting, particularly those based on other UNCITRAL texts on electronic commerce. These have already been adopted in over a hundred jurisdictions worldwide. The Model Law is the first piece of legislation to emerge from UNCITRAL's exploratory work on legal issues relating to the digital economy and digital commerce. One of its primary objective is to reduce legal uncertainties and transaction costs, thus promoting AI-driven innovation. Meanwhile, work continues on related areas, such as data contracts and distributed ledger technology (blockchain).

About UNCITRAL
The United Nations Commission on International Trade Law (UNCITRAL) is the core legal body of the United Nations system in the field of international trade law. Its mandate is to remove legal barriers to international trade through the progressive modernization and harmonization of trade law. It prepares legal texts in a number of key areas such as international commercial dispute settlement, electronic commerce, insolvency, international payments, sale of goods, transport law, procurement and infrastructure development. 
 

Press release of UNCITRAL
Documents of the UNCITRAL Working Group Electronic Commerce

Researchers are faced with an increasing volume of relevant documents from a wide variety of fields. Thus, there is a growing need for tools that allow researchers to quickly identify related texts in different domains. Existing solutions do not allow linking documents from text corpora that originate from different domains. Moreover, they are not scalable, or use proprietary algorithms.

Logic Mill – A New Software System and Research Tool

Logic Mill is a new software system and research tool designed by a research group from the Economics Department and led by Dietmar Harhoff to identify documents that are similar to a given text in other text corpora. It consists of a set of open source software components and has a public application-programming interface (API) that the scientific community may use.

The Solution

The Logic Mill software analyzes large parts of texts, which consist not only of words, but also of structure and context, with the help of state-of-the-art machine learning techniques. Unlike previous attempts to estimate text similarity, Logic Mill accounts for semantic structure as an additional dimension of similarity. Logic Mill does not only look for the occurrence of the same words, but also in what context (that is, relative to the sentence and paragraph) these occur. Specialized machine learning models encode the text numerically and allow the computation of various similarity measures.

Previous attempts of comparing text documents were mostly limited to texts of the same category, such as patents to patents or publications to publications. Now, it is possible to compare documents across these and other domains.

Currently indexed datasets include data from Semantic Scholar, EPO, USTPO und WIPO. An integration of Wikipedia is in preparation.

The Research Applications

Logic Mill allows to explore literature quickly. It permits to find semantically similar patent documents, which is important for prior art search in patent examination or to assess the propensity of patent litigation. Moreover, it can link patents to related scientific publications. Logic Mill can recommend citations for new documents and readings from just published papers. It also allows assessing the novelty of patents and publications. In addition, knowledge flows can be traced across different domains. New trends and the diffusion of new concepts can be detected.

The name of the project Logic Mill is inspired by the novels of the “The Baroque Cycle” by British writer Neal Stephenson. In it, German polymath Gottfried Wilhelm Leibniz conceptualizes a machine to organize all human knowledge based on a retrieval system using prime numbers. While this machine is fictitious, Leibniz’s thoughts echo into modern computing, in particular into the problem of representing any kind of data numerically.

Further information:

If you would like to be notified of Logic Mill progress or participate in the trial program, you can register on the Logic Mill Website.

Directly to the publication Logic Mill – A Knowledge Navigation System.

The idea of limiting the power of digital giants is not new. Rules punishing abuse of dominant position or unfair business practices already exist. What's about to change?

The Digital Markets Act, or DMA for short, which is currently being negotiated in non-public consultations between the EU Parliament, Council and Commission, aims to provide a uniform EU-wide legal framework for digital markets in order to proactively prevent distortions of competition and stop certain business practices.The aim is also to facilitate the application of the law and speed up the process.

Why are the existing rules insufficient?

So far, especially in antitrust law, we have only ex-post rules: these only take effect after an infringement has occurred or is suspected. As a result, it takes a very long time before the behavior is sanctioned. In some cases, the contested acts took place up to ten years ago and the legal proceedings have still not been concluded. The result is that antitrust law is too slow because it takes action reactively.

What should change?

The basic concept of the DMA is upfront regulation: it will impose a mandatory code of conduct on major online service providers. With this in mind, it contains over a dozen directives and prohibitions, formulated in more or less specific language, with which these service providers are required to comply a priori. Failure to comply could result in severe sanctions. For example, the EU Commission has the power to fine service providers up to 20 per cent of their annual global turnover.

We'll come to the new rules in a moment. But first: Who does the planned regulation actually apply to?

According to the European Council's first press release, a service provider will be considered a "gatekeeper" if the parent company generates an annual turnover in excess of €7.5 billion or has a market value of more than €75 billion in the EU. The service also has to have had over 45 million end users per month and 10,000 commercial users within the EU per year over the past three years.

The respective service provider also has to offer one or more core services, such as social networks, search engines, browsers, messenger services, or virtual assistants, in at least three EU member states. However, networked TVs are not included.

Which obligations will gatekeepers have in the future?

So far, there are 18 obligations, but the list of obligations may be larger after the negotiations. Particularly relevant, for example, are prohibitions on tying registration for one service to registration for another, or prohibiting commercial users from offering their products and services on third-party platforms at different prices and conditions. In addition, operating systems such as Google's Android or Apple's iOS would have to allow app stores other than their own to be installed on smartphones. Self-preferential practices are to be explicitly prohibited, for example by offering consumers preferential treatment for the company's own services, thereby closing the market to smaller or new competitors. In the future, it will also no longer be permitted to combine and use data for certain purposes, as Facebook is accused of doing.

 

The new interoperability requirement is also of particular relevance to consumers. For example, messaging services that have been classified as gatekeepers will be required to permit their users to exchange messages and make video calls between different platforms (e.g., Whatsapp and Threema).

Sounds like Lex Google, Lex Apple, Lex Facebook ...

Indeed, many of the specific provisions are based on cases in which the EU Commission and the national competition authorities have taken legal action against these companies. Individual laws cannot exist, but it is of course possible to define abstract criteria for market activity in the EU in order to prevent as much problematic behavior as possible.

Certainly, it will hit the U.S. tech giants in particular with their services at the beginning: Apple's and Google's Appstore, Microsoft's Bing in addition to Google's search engine, Facebook and Whatsapp or Amazon Marketplace. The cloud computing segment of Amazon, for example, which is important for B2B and accounts for the largest share of the corporate profit, will also be affected.  

However, the extent to which the regulations will apply to European platform services such as Booking or Zalando remains unclear.

Can the regulation make the digital markets more open and fairer?

The crucial point is how the regulations will be applied and enforced in practice. So whether the agreed procedure will work as intended – including, in particular, the dialogue foreseen between the EU Commission and the “gatekeepers” concerning the regulatory measures – will be clarified in due course. Another open question is whether the envisaged collaboration between the national authorities and the EU Commission will be effective. It also remains to be seen which role the national courts will ultimately play in enforcing the DMA regulations.

The EU Commission is expected to play a significant role. What is it?

Although it has been controversial among the member states, the EU Commission is to be given a very central role. The DMA permits the Commission to order a wide variety of measures against gatekeepers. These can be behavioral measures, i.e. that a company may no longer do something specific or must do something, and structural measures such as the separation of entire business units. At the same time, the Commission is supposed to monitor compliance with the orders. All this requires the EU Commission to create numerous additional positions with specific expertise. Indeed, the EU Commission will be taking on a completely new role as a regulatory authority, and it will be interesting to see if it will ultimately be able to stand up to the big tech companies on an equal footing.

Assuming everything goes according to plan and the European Parliament and Council give their official consent, the new regulation will come into force in 2023. Can all these innovative provisions be implemented immediately?

That remains to be seen. The problem is that many technical issues that are legally relevant are not solved, but only postponed. The fine-tuning is done by means of so-called Delegated Acts, which have yet to be issued by the Commission. In reality, this can take years. One example: Until now, Deutsche Bahn has not been obliged to make real-time information about its trains available to other transport information services such as Google Maps. The relevant EU Directive governing this has been in place since 2010, but the legal details came in 2017 in a Delegated Act from the Commission. The rules were not incorporated into the German Passenger Transportation Act until 2021, and it is still not clear to what extent Deutsche Bahn will have to provide real-time information.

What else is needed?

The effectiveness of enforcement by the public sector, in this case by the EU Commission, always depends on the political impetus. And priorities can change quickly in this regard. The current Commission, with Margrethe Verstager as Digital Commissioner, has the DMA high on its list, so the rules have come surprisingly fast. But it doesn't guarantee that if there is a new Commission with a new agenda, it will continue with the same verve.

The interview was conducted by Michaela Hutterer

Personal website of Heiko Richter

Despite increasing international and European harmonization, the design of IP protection systems remains subject to the laws of individual states. The internationally accepted principle of territoriality limits the scope of application of the law to the territory of the legislating state. This also applies to cases involving intellectual property issues.

The increasing integration of the global economy and the potentially worldwide dimension of even the simplest acts of communication over the internet, have called into question the existing conflict-of-laws systems for quite some time. Especially at the start of the new millennium, this situation led to several scholarly initiatives aiming at the development of more suitable and internationally aligned principles. Among them were the so-called “CLIP Principles for Conflict of Laws in Intellectual Property”of 2011, initiated by today’s Max Planck Institute for Innovation and Competition and the Max Planck Institute for Comparative and International Private Law, which received worldwide attention. However, all these initiatives were of regional character (USA, Europe, and Asia) and they differ in several regards, such as in particular the conflict rule for initial ownership. Furthermore, they do not provide solutions for all issues that should be addressed.

International research group develops extensive guidelines

To fill these gaps the International Law Association in 2010 established the “Committee on Intellectual Property and Private International Law”. This research group, with its almost 30 experts, among them the Managing Director of the Institute, Josef Drexl, has developed the Kyoto Guidelines. The guidelines, which were adopted during the 79^th Biennial Conference of the ILA in December 2020, comprise 35 model provisions. In addition to questions of applicable law, the guidelines address matters of international jurisdiction of the courts and cross-border enforcement of judgments. The scope of the guidelines is not limited to classical intellectual property rights like copyright, patent and trademark law, but can be applied to related areas such as unfair competition law and the protection of trade secrets. The final text is divided into four sections: General Provisions (Guidelines 1-2), Jurisdiction (3-18), Applicable Law (19-31), and Recognition and Enforcement of Judgments (32-35).

The Kyoto Guidelines aim to propose specific provisions to national legislatures for the design of private international law on intellectual property issues to achieve a substantively balanced and internationally coordinated system in the long term. Judicatures can now begin using the guidelines as interpretive aid if their national system allows for such interpretation. Besides well-established and widely discussed issues at the interface of intellectual property and private international law such as the determination of initial ownership and multi-state infringements, the guidelines address new phenomena like cross-border collective copyright management.

Conflict-of-laws rules for CMOs

Though cross-border activities of collective rights management organizations (CMOs) are increasingly gaining relevance, the question of conflict-of-laws rules for CMOs has hardly been discussed so far. In 2015, in the course of the implementation of the Collective Rights Management Directive of the European Union (Directive 2014/26/EU), the Institute was alone in pointing out unresolved questions of private international law; it developed principles that have now been included in the Kyoto Guidelines.

The Kyoto Guidelines were adopted by the ILA at the end of last year. The Fifth Committee Report, which is already available to the public, contains basic comments for a better understanding of the provisions. The guidelines are scheduled for publication as a book including detailed commentary later this year.

The text of the Kyoto Guidelines can be found here.

With the aim of creating at international level a more balanced system regarding the scope of copyright protection, an academic initiative coordinated by the Max Planck Institute for Innovation and Competition developed the “International Instrument on Permitted Uses in Copyright Law” . This project, bringing together a group of 20 internationally renowned copyright specialists from different countries, was originated by some members of the expert group working on the “Declaration for a balanced Interpretation of the Three-Step Test in Copyright Law”, which was concluded in 2008. The Declaration advocates a more flexible application of the three-step test by means of interpretative guidelines in order to take account of legitimate user interests.  

The Instrument goes one step further than the Declaration. Rather than stating mere recommendations, the Instrument includes concrete provisions to form an international treaty establishing a core of minimum permitted uses of works. By signing such a treaty, prospective Contracting Parties would be obliged to implement the minimum permitted uses in their national legislations.

With this “minimum permitted uses approach” the Instrument aims at counterbalancing the traditional “minimum protection approach” of international copyright legislation. The Instrument is meant to function as a lever for Contracting Parties to address the political pressure in international negotiations of bilateral or regional agreements in particular. Once in place, the Instrument will ideally facilitate cooperation amongst countries and help them to assert their common interests on a level playing field with countries trying to impose higher standards of protection in international negotiations. At the same time, implementing the Instrument in binding international legislation might foster a certain harmonization with regard to the limits of copyright protection.

The Instrument is composed of three parts. In Part A five groups of permitted uses are specified on the basis of the objectives pursued by each group of permitted uses: I. Freedom of expression and information; II. Social, political and cultural objectives; III. Use of software; IV. Uses with minimal significance; and V. Free circulation. Part B defines general principles aimed at guiding contracting parties in the implementation of permitted uses in their national legal orders. Contracting parties are obliged to implement effectively the permitted uses laid down in the Instrument but are free to determine the method of implementation: explicitly enumerating such permitted uses, creating general clauses or basing them on a fair use or fair dealing legislation are all matters for the national legal systems. Also, Contracting Parties are free to permit further uses of copyright-protected works, should their domestic needs require such national legislation. Part C deals with competition law as an external limit to copyright and is based on the modern understanding that competition law and copyright law are complementary legal fields, pursuing the objective of increasing the market offer of creative works.

You can find the International Instrument here:
International Instrument on Permitted Uses in Copyright Law

An article by Reto M. Hilty and Valentina Moscon about the International Instrument can be found in the recently published book The Cambridge Handbook of Copyright Limitations and Exceptions.

The current issue of IIC also dedicates its Editorial to the International Instrument.

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)