Trevor Little

This week, WTR’s sister publication IAM spoke to Microsoft's chief IP officer  Horacio Gutierrez, in London to present at the Intellectual Property Institute's annual Stephen Stewart Lecture. Gutierrez confidently views cloud computing as the future of the high-tech industry, an outlook reflected by the investment Microsoft has pumped into cloud platforms over the past decade. Importantly, when considering the challenges to intellectual property that this environment creates, Gutierrez predicts a growing role for trademark counsel in policing use of intellectual property. 

The full post is available here, but IAM reports:

As things stand, patents may be an essential tool for companies looking to monetise innovation, but their effectiveness in the emerging world of cloud computing is questioned by Gutierrez on two fronts. First off is the detectability of patent infringement. In the offline world if you suspect a product is infringing you can acquire the product, tear it down and analyse it, and subsequently determine whether there is an issue. But with cloud computing this is not the case. "In the world of the cloud the computing is behind a firewall," states Gutierrez. "You don't even get your hands on the binary code. Your ability to detect infringement there is diminished. So how are you going to discover it?"

The second challenge is enforceability once an infringement is detected. The cloud knows no national borders, the services you receive could come from a hub in your neighbourhood or from a different continent. But patent law is jurisdictional, which makes deciding which courts have the authority to hear a case tricky, to say the least. "Where services are provided from all over the world, it is going to be a significant enforcement problem," states Gutierrez.

Inevitably, as with all big developments in technology, there will be a lag while legislation and case law strives to catch up with the advances. During that time, says Gutierrez, we may see the role of patents decreasing and other forms of intellectual property - such as trademarks - become more important. "Even a small diminution in the efficacy of patent protection," claims Gutierrez, "could result in a significant strategic shift away from reliance on patents in the cloud."

Coming from the head of intellectual property at a high-tech giant like Microsoft, this is quite a statement. Gutierrez is quick to state that he's not advocating that patents should become less important. "Rather," he states, "while there are some issues surrounding the detectability and enforceability of patents, other forms of protection that perhaps haven't been so highly valued in recent years are going to be more prized in the future."

Time for trademark counsel to rise to the challenge? Even if not currently engaged in cloud activities, the environment is one that trademark practitioners should already be aware of, with national offices also acknowledging its benefits. Earlier this year, US Patent and Trademark Office (USPTO) director David Kappos told WTR that the agency’s Trademarks Next Generation project would embrace the cloud. He explained: “Virtualisation and cloud computing are now industry standard in IT solutions, and we want to take advantage of this technology in our aim to provide full end-to-end electronic processing for trademarks.”

However, the prospect of monitoring trademark infringement in the cloud is a burdensome one. Robert Scott, managing partner at Scott & Scott, told WTR: “In the majority of jurisdictions, enforcement of trademark rights  implicated by cloud computing are the responsibility of the IP owner. Because of this, the task of monitoring use of intellectual property falls upon the IP professional or brand owner. As more data moves into the cloud, more opportunities exist for infringement, and the task of monitoring the intellectual property becomes more onerous. As a result, IP and brand owners are monitoring their intellectual property using any number of service providers, such as Net Enforcers, MarkMonitor, and Westlaw Alerts.”

While such monitoring creates an opportunity for third-party service providers to increase their service offerings, for counsel it is another activity that may have to be incorporated into the department budget. On the positive side, where patent enforceability is more difficult, the need for the trademark function to step into the breach could provide an opportunity to make the case for increased budget and resources.

No matter how the monitoring is carried out, cloud computing is not an environment that can be ignored. As Microsoft increases its cloud offerings, promoting the ability to monetise services via the cloud environment, businesses will look to the clouds in ever increasing numbers. In the same spirit, trademark counsel should also ensure they have their heads in the clouds.

The trademark issues surrounding cloud computing will be examined in more detail in the next issue of World Trademark Review.

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