There are other legal rights in transport routes and other facilities, so why should anyone try to stuff them into the already-bursting pigeonhole with the "Intellectual Property" label?
Thursday, 25 June 2009
There are other legal rights in transport routes and other facilities, so why should anyone try to stuff them into the already-bursting pigeonhole with the "Intellectual Property" label?
Tuesday, 23 June 2009
The NLA caught a cold when it first started licensing use of press cuttings, basing the exercise on copyright not in the literary works (because the newspapers didn't necessarily own the copyright in them) but in the typographical arrangement - a type of copyright that previously had seemed to be utterly unimportant. Thanks to Marks & Spencer, this approach was knocked on the head by the House of Lords and the NLA went back to the drawing board and put together a licensing scheme that was after all based the literary copyright. Are they on another hiding to nothing here?
One can understand the importance for the press of replacing the dwindling revenue stream that printed newspapers produce, whether through sales or through licensing schemes. I read much more in the press on-line than on paper these days, and to press-cutting agencies and other professional consumers of journalism using hyperlinks is wonderful substitute for cutting up (or photocopying) newspapers. But if there is no copyright in a hyperlink, how to make money from it? Only a copyright absolutist could answer that.
While the initial response to the Internet was to stop everyone from using it at work, regarding it as a distraction, its value as a source of business information now makes it inconceivable that many employees should not be allowed to use it. And email is as essential a means of communication as the telephone, which people need to be able to use during working hours even for private purposes. Broadband access has now become regarded as a human right, and although this doesn’t automatically place social networking and access to communications technology at work in the same category, we do have to look at them in that light.
The information that many of us need to do our jobs is now often found on the Internet. Social networking sites are rapidly assuming the same degree of importance for marketing purposes. Blogs, Tweets and sites like Facebook, Plaxo and LinkedIn offer indispensable opportunities to tell people about the goods and services you provide. Look at the take-up of these media by lawyers, even if they haven’t yet worked out how Twitter will actually help them.
For years now, employees have been ambassadors for their employers out of the workplace as well as in it. If you see a supermarket employee in her uniform on the way to work dropping litter, your opinion of the supermarket is likely to be adversely affected. If you have the misfortune to travel in the same train carriage as a pair of drunken accountants whose computer cases display the name of the firm for which they work, you will form an impression of that firm. Facebook profiles can tell you where an individual works: with sites like LinkedIn and Plaxo communicating that information is the whole point of the exercise.
Whether people are allowed to use social networking sites at work is one matter. Trying to stop them might be like trying to hold back the tide, but there are certainly good reasons for doing so – if only to stop time wasting. What they say on these services, whether in their own time or at work, is probably more important.
Contracts of employment already deal with confidential information and the protection of the employer’s intellectual property – including copyright, which arises automatically and belongs to the employer when the employee creates something in the course of their employment. They also deal – usually – with saying unfavourable things about your employer, or perhaps even saying anything about him, her or it. Contracts (and associated policies) will also deal with matters like discrimination, so anyone posting racially offensive material on the Internet is likely to be in trouble with their employer as well as the criminal law. That ought to be quite enough to deal with what employees write on the Facebook walls, but it’s a good time to remind people of that and perhaps to tweak what the contract says.
Just like emails, the employer is also likely to want to monitor what is being said. If it comes from the office computer system, whether it's authorised by the employer is not the important thing - the employee posting offensive material on Facebook might have committed a discplinary offence, but that isn't going to prevent the damage to the employer's reputation. The same applies if the information posted infringes copyright or breaches a confidence. The employer probably needs to be proactive, and stop these things going out in the first place. Provided employees are told that postings will be monitored (as should already be the case with emails) they cannot complain of intrusions into their privacy.
A social networking policy isn’t likely to be needed to stop people breaching confidence, infringing copyright or libelling their employers. But it might well be necessary to get the most out of these new marketing tools. Just as employers will want employees to use the Internet in ways that fit with their duties, so too they should embrace the marketing possibilities offered by the new media.
How? That requires more expertise than a neophyte such as myself can offer, and clearly if the corporate hand of someone’s employer is detected in the content of what purports to be an independent blog it is unlikely to be taken seriously. That’s a problem for the marketing people: the problem for the lawyers is to devise an approach that creates the space for employees to work positively for the brand without losing hours of working time to Facebook and Twitter.
Monday, 22 June 2009
Conditional fee agreements - CFAs - provide an alternative to the traditional way of funding litigation – writing a blank cheque to your lawyers - and if they are the way to go, as seems likely, in the future it might be useful to have this note as an introduction to the subject. CFAs are useful in all manner of commercial claims, as well as in areas like personal injury claims where they have already achieved notoriety, and given the expense of bringing (or defending) an intellectual property claim, they have a particular role to play in this area. A better solution in many ways would be to take out insurance before a claim is made: some general insurance policies cover legal expenses, including business policies, and perhaps the necessary cover is already there (or can be added on at modest cost).
A CFA is an agreement between a client and lawyer. The lawyer agrees to share the risk of litigation, coming to a financial arrangement on the fees payable according to how the case turns out.
In a “no win, no fee” arrangement, the client will pay a reduced fee to the lawyer if the case is lost. If it is won, though, the lawyer is entitled to their normal costs, calculated on the usual time basis. Some of the costs might well be payable by the other party. The lawyer can also charge a success fee.
In a shared risk arrangement,the client will pay a reduced fee to the lawyer if they lose but if they win the lawyer will be paid the normal fee, with some of it probably being paid by the loser. Again, the lawyer can also charge a success fee.
These arrangements are suitable for litigants without the means to fund litigation in the traditional way, provided they have a good case. If the case is weak, the lawyer is not likely to be prepared to assume any of the risk – though it is also true that if the case is weak it should be kept well away from the courts. The other side must be notified that there is a CFA, and this might well encourage them to settle: they will see that their exposure to costs is likely to increase, and they will also realise that the other party will not run out of money if the case goes to trial.
The success fee can be as much as 100 per cent of the normal fee. The lawyer will calculate it after a risk analysis, effectively weighing up the odds on success. This will require consideration of a number of factors, including:
The merits and value of the claim;
The likelihood of settlement;
An estimate of the costs involved; and
The likelihood of recovering normal costs plus the success fee from the other side.
The success fee can only be linked to the normal fee – it cannot be a proportion of the damages obtained in the case.
Responsibility for paying the success fee lies with the client, although it will often be recoverable from the other side. The party paying the success fee is entitled to have it assessed by the court, which will reduce it if it is not reasonable in light of the circumstances surrounding the case when the arrangement was made.
If the court does reduce the success fee payable by the loser, the lawyer cannot recover the shortfall from the client unless the court orders otherwise. However, if part of the success fee represents the costs to the lawyer of funding the litigation – for example, where the lawyer has paid court fees – this much is payable by the client in any event.
If the case is lost, the client will either pay nothing or a reduced bill to their lawyer, but the big drawback of a CFA is that the client remains liable for some of the winner’s costs depending on what the court orders. And if the winning party also has a CFA, the award of costs will include the success fee. The way to deal with this drawback is to buy an insurance policy, known as after-the-event (ATE) insurance, to cover an award of costs. The winning party will be able to include the premium in a claim for costs.
It is not only the existence of the CFA that has to be disclosed: the lawyer’s assessment of the risks has to be disclosed, too, which is an exception to the normal rules about legal professional privilege. Because the lawyer has a stake in the outcome of the litigation, they will take greater control of stratefy and resolution of the dispute too – the client might feel like a passenger.
ATE insurance gives the insurer a stake in the outcome of the litigation, too, and that might mean they are trying to control the case as well. These policies come in a wide variety, including policies to cover only an adverse award of costs and policies that cover both parties’ costs. Cover can be backdated to include costs already incurred, though it is naturally more economical to put the cover in place first. Cover is available for making and sometimes for defending claims, though it is usually taken out by claimants to cover the costs of bringing an action to defend their rights. The terms of the policy will tell you whether it will pay out if the case is settled before trial, and if so how much. The insured’s management time and expenses in fighting the case are not covered.
Cover can be put in place at any time before proceedings have been issued and afterwards too, though the later the policy is bought the more expensive it is likely to be.
The procedure is for the lawyers to submit a proposal form along with their risk assessment. This will deal with the merits of the case and the likely amount of costs. It will be supported by relevant documents such as pleadings and counsel’s advice. On the basis of this information, the insurer decides whether to go on risk and if so at what premium. The solicitor sometimes has delegated authority from the insurer to do the risk assessment themselves and agree cover up to a certain amount. There is sometimes an application fee to pay too, though this might be set against premiums.
Costs often escalate during litigation, so it might be necessary to buy additional cover. The policy should allow this to be done.
The premium will depend on the type and level of the cover. For ATE insurance, depending on the prospects of success, the premium is usually between 30 and 50 per cent of the costs to be insured – so, if the policy is to cover only the other side’s costs, it will be significantly cheaper than one that covers both parties’ costs.
The premium might have to be paid at the outset, or by instalments. Sometimes, it might not be payable until the end of the proceedings. If the case be won and costs awarded, the premium should be recoverable from the loser. However, the court will be concerned that the amount of the premium is reasonable and proportionate. It is even possible to insure the premium itself, in case you lose.
It might be that the winning party has to pay some of the other side’s costs. This could happen, for example, where an offer or a payment into court has been made and the winning party has rejected it. Then the insurer will only be liable to contribute to the extent that the costs exceed the damages recovered – in other words, the litigant meets the costs out of the compensation first.
This note is intended to give some general information about CFAs and litigation costs insurance. For more information and advice on suitable insurance policies, you should consult an insurance broker. Temple Legal Protection Ltd provide IP cover: their website cannot give much detail - I imagine they need to have a lot of information before they can commit themselves. There are other insurers and brokers too, just Temple are the ones I know best.
Tuesday, 16 June 2009
The use of maltotriitol to modify or control the form of maltitol crystals.
Maltitol is an artificial sweetener made from starch. Tate & Lyle cited several documents, some of which clearly disclosed the use of maltotriitol in the process of manufacture of maltitol and therefore anticipated the claimed invention. With the assistance of expert witnesses, the court satisfied itself that maltotriitol did indeed control and modify the form of crystals formed, so the claimed invention was not novel.
Regardless of whether the prior art processes mentioned the purpose of maltotriitol, the inherent effect would have been to control the form of maltitol crystals that formed. All the patentee had done was discover the effect of a known impurity in affecting crystal formation. There’s nothing new in this reasoning which was summarised by no less an authority than Lord Hoffmann in Synthon BV v Smith Kline Beecham plc:
"…the matter relied upon as prior art must disclose subject-matter which, if performed, would necessarily result in an infringement of the patent. That may be because the prior art discloses the same invention. In that case there will be no question that performance of the earlier invention would infringe and usually it will be apparent to someone who is aware of both the prior art and the patent that it will do so. But patent infringement does not require that one should be aware that one is infringing: "whether or not a person is working [an] … invention is an objective fact independent of what he knows or thinks about what he is doing": Merrell Dow Pharmaceuticals Inc v H N Norton & Co Ltd  R.P.C. 76 , 90. It follows that, whether or not it would be apparent to anyone at the time, whenever subject-matter described in the prior disclosure is capable of being performed and is such that, if performed, it must result in the patent being infringed, the disclosure condition is satisfied. The flag has been planted, even though the author or maker of the prior art was not aware that he was doing so."
Having applied this approach to the various documents cited, the court found that the patent was anticipated by no fewer than five of them. Tate & Lyle also suggested that the claim was invalid because the contribution was a mere discovery, excluded from patentability under section 1(2). The claim merely informed the reader that maltotriitol, which was a known impurity in the manufacture of maltitol, had the effect of changing the formation of crystals, so all the patent contributed was the discovery that the crystal changing was caused by maltotriitol's presence. As Mr Justice Lewison expressed it:
"In Molière's play Le Bourgeois Gentilhomme, Monsieur Jourdain asks something to be written in neither verse nor prose. A philosophy master says to him, "Sir, there is no other way to express oneself than with prose or verse". Jourdain replies, "By my faith! For more than forty years I have been speaking prose without knowing anything about it, and I am much obliged to you for having taught me that." That is this case. The industry has been using maltotriitol to control or determine crystal habit without knowing it. What is left of the patent as granted is no more than a discovery as such."A cautionary word about how to use the prior art is also worth quoting: the judge was unimpressed by an expert witness who "treated the cited prior art as a quarry from which the occasional nugget could be extracted, with knowledge of the problem to be solved, rather than approaching the teaching of each of the pieces of prior art on its own terms and seeing where that led him."
The defendants accepted that they had infringed, if the patent were valid - but they counterclaimed for revocation, and also for the claimants' threats. They succeeded on the invalidity point, which is something I need to add to my on-going review of patent cases - stemming from the question, whether the English courts were anti-patent. Not much sign that they are - and just because the judge didn't like this patent doesn't mean that the courts in general have a downer on them.
The defendants lost on their threats claim, though.
The point about user damages seems to be worth mentioning, though. One of the four heads of damage under which Honda hoped to recover was a notional royalty on each parallel import bike sold by the defendants. There is no binding authority for such a claim, only the decision of my old commuting companion Master Bowman in favour of the proposition in Roadtech Computer Systems v. Mandata (Management and Data Services Limited)  ETMR 970. The significance of this lack of authority in the present case was that it did not incline the parties to settle. In Reed Executive Plc v. Reed Business Information  RPC 40 (CA), Jacob LJ. said:
"I would only add one further matter in relation to damages. I am by no means convinced that the 'user' principle automatically applies in trade mark or passing-off cases, especially where the 'mark' concerned is not the sort of mark available for hire."
Looking for a willing licensee in a trade mark case is not likely to yield an answer, is it? He went on:
"The ordinary case is one that just protects goodwill. For damages to be awarded on the user principle is close to saying that there is no damage so some will be invented. It is not the same sort of thing as having to pay for use of an invention (the basis of the user principle in patents). At present there is no clear finding that the inquiry should proceed on a user basis. Whether it should do so is a matter for the judge - who thus far has said no more than that he 'apprehends' that a user basis will be used."
The judge (HH Judge Fysh) also made another interesting observation - interesting to me, I mean: there's unlikely to be anything in the judgment that isn't interesting to someone - about Honda's claims. These bikes that they had sold once, and for which they now sought something more. There was, the judge pointed out, a danger of what in the Copyright Tribunal is called "double dipping". I'm grateful to him for giving that expression a little more currency.
As for trials of preliminary points, the judge referred to the well-known case ofSteele v. Steele, CP Rep 106.Well-known to many, no doubt, but new to me. This was a decision of Neuberger J (as he then was), who refused to deal with a point at a preliminary hearing, notwithstanding that the court had ordered the preliminary issue on the basis that the parties had consented to such a course. Neuberger J identified ten questions, known as 'Neuberger J's progression', another expression that I am pleased the judge has given greater currency to, that the court should ask itself before ordering the trial of a preliminary issue. However, in the present case only two or three of them were relevant, and the judge took the view that a hearing would dispose of no more than a small part of the case and would be likely to delay mediation - which is what he thought the parties should have been getting on with.
So, in the end, Honda did not get their hearing, which far from leading to a speedy conclusion of the matters in dispute looked likely to lead to appeal after appeal. What the parties did get was instructions to use best endeavours - and the judge made it clear that second best endeavours would not do - to have their differences resolved in mediation.
Friday, 12 June 2009
The Information Commissioner's Office has also published a new code of practice on privacy notices (link to press release here and to the privacy notices page on the ICO's site here). The Office, it says, wants to see an end to the confusing privacy notices that are written to protect organisations rather than to inform the public.
It brings to mind a lecture at the Law Society, under the auspices, I suppose, of the Solicitors' European Group, many years ago, when regulations 1983/83 and 1984/83 were being drawn up to replace good old Regulation 67/67 - gosh, I do go back a long way. A Commission official from Germany or somewhere was speaking. He announced, a propos restrictions on where tenants could be obliged to get their beer from, that the Commission had decided that "bottled beer should be free".
I might be overstating the case - a little. And it is certainly true that these tendencies have been going on in parallel. It is however undeniable that there an awful lot of trade marks around that are not as inherently distinctive as they might be.
Distinctiveness is of the essence of a trade mark, of course, and descriptiveness is the enemy of a trade mark, though one that can be defeated. The tendency to use descriptive trade marks and therefore enclose parts of the great common of the English language is one aspect of that IP absolutism that I have criticised before - the desire to arrogate to oneself every little thing that could possibly be considered one's intellectual property, and to make it exclusive if at all possible. For this reason, among others, I believe it is time we stopped talking too freely about "intellectual property".
Moving on to what this post was supposed to be about, Lastminute.com is a paradigm case of such a business name. It is also a great example of how the Internet has encouraged people to adopt trading names (and then domain names basedon them) that tell you about the business rather than about who operates it. Nevertheless, it is trite to say that even a descriptive name can acquire distinctiveness or a secondary meaning for trade mark purposes, and that for the purposes of the law of passing off a trade reputation can attach to such a name. Lastminute.com has been a major part of the commercial scne in the UK for long enough that it would be hard to imagine these conditions not being met - although it failed to obtain a CTM back in February 2000 (and I wonder whether it has tried again since?).
So, when another company applied to register Last Minute Tour as a CTM, coincidentally in March 2000, Lastminute.com opposed. However, they failed to file the necessary proof of use of their mark and the opposition failed, leaving them to initiate cancellation proceedings instead. Thelack of a registerd trade mark did not matter, because the Community trade marks regulation specifically recognises common law rights under English law. The cancellation division of OHIM agreed with Lastmniute.com as far as two of the classes in which the trade mark was registered were concerned but not on class 16, so both parties had something to appeal about, which they did. OHIM's Board of Appeal allowd Last Minute Tour's appeal and rejected Lastminute.com's, so it was off the Court of First Instance for a further appeal.
The court's judgment was handed down yesterday. It considered that OHIM had wrongly identified the body of people whose perceptions of tha two names had to be considered. OHIM's take on what was the public in this case was average consumers of the goods and services residing in the UK and who are reasonably well informed and reasonably observant and circumspect. (They would probably be unable to tell you much about a set of loft stairs that they had just seen, I suppose, but that's by the way.) This abstract notion was wrong, the court said: it was the claimant's customers' perception that mattered.
The court also held that the Board of Appeal had erred when it considerd whether Lastminute.com could have common law rights in its name. It had, the court said, looked at it outside the factual context - it could not "refuse to attribute to the expression "last minute" an independent reputation solely because of its generic character and its absence of distinctive charcter in relation to the services at issue and the complementary goods". Encouraging words for the absolutists, perhaps, but also recognition of how reputations can attach to inherently non-distinctive names.
Wednesday, 10 June 2009
The members of the Conseil - les Sages, as I was delighted to see they are called - stated that "the Internet is a component of freedom of expression and of consumerism" (or perhaps "commerce" would fit better - consommation in the original) and that "in French law the presumption of innocence prevails". It is for the justice system to impose penalties (I'm going to stop holding my translation out in quotes) when an illegal download takes place, and the role of the Haute Autorité (Hadopi) is to tell the downloader that he has been detected, but not to penalise him.
Socialist deputies had referred the matter to the Conseil on 19 May, following the adoption of the proposed legislation on 13 May providing for suspension of offenders' Internet access after two warnings. (What's French for "two strikes and you're out"?) The penalty would be pronounced by the new Haute Autorité pour la diffusion des œuvres et la protection des droits sur Internet. The Conseil has taken the same approach as the European Parliament, which took the view that the right to connect to the Internet is a fundamental one in voting down a similar proposal.
Or something like that. Any corrections would be appreciated!
The deputy judge referred to that excellent case, Lux Traffic Controls Ltd v. Pike Signals Ltd  RPC 107, in which the firm for which I then worked acted for the successful defendants. Portable road traffic signals operating in a new way had been set up on a public road, for a trial: the claimant (or "plaintiff" as we called them in those days) later applied for a patent. Aldous J (as he then was) held that the public trial meant that the invention had been disclosed, whether or not anyone had actually inspected the signals who could have understood what they were doing that had not been done before.
In the latest case, the claimant's factory in Ireland was visited by a government minister and a photographer from the Irish Times. The photographer took a picture of the minister with the inventive loft stairs in the background, but publication of the photo did not destroy novelty: nor did it matter that the photographer and the minister both had an opportunity to inspect the stairs. The law regards a disclosure in a public place as a disclosure whether or not anyone actually saw it (let alone understood it), but a disclosure in a place to which the public does not have access is a different matter:
"...there is no irrebuttable presumption of law that information that is capable of being perceived by persons who are on private premises is in fact perceived by them, if the circumstances are such as to make it unlikely that those persons were interested in the subject-matter. For that would be to invent a legal fiction without necessity."
Of course, it's still essential for inventors to keep their inventions confidential in the pre-patent stage, and the Lux case shows just how easy it is to lose novelty. Although the Loft Stairs case offers an escape route, it is a very small one which few inventors will find it possible to pass through, so the need for prudence (and NDAs) remains.
Wednesday, 3 June 2009
My own view is that the collecting societies have an important role to play in driving music out of public places where passers-by are involuntarily assailed by it. I did not enjoy the recent experience of giving blood any more because of the music that the staff saw fit to play - I wonder whether it was licensed? Probably, given that it was in the civic hall. But where the listeners are volunteers it is only right that a price should be exacted. It is also only right, however, that the price exacted should benefit the performers: it is the performers whose contributions I enjoy when I listen to music, not the record companies, but that's not the way the system works.
Pointing out that there are no words in the Balinese language for "art" or "artist", the authors explained that the artist in Bali was a craftsman who sought only to serve the community. The idea of leaving something for posterity never crossed their minds. A participatory cultural model had evolved there, and artistic property did not exist: "the expression of any new idea is there to be used by all".
That struck me as a fine idea, and the creep of copyright into new and previously uncharted territory together with the antics of the absolutists has caused me to reflect more than once on the idyllic nature of a society without copyright. But now I read that a Balinese artist, Nyoman Gunarsa, has been trying to take action against a gallery over forged paintings claimed to be his work. Of course, I sympathise with him, but simultaneously I regret the passing of a society that needed no copyright.
The Republic of the Maldives - a country very close to my heart at the moment, as we prepare a large shipment of mosquito repellent to send out to our daughter who is working for a development charity there at the moment - might be about the last place to do without a copyright law. But they are considering one, and the arguments against it seem to be based on the high cost of buying official copies of software that are presumably widely copied at present - the classic, and understandable, plea of the LDN. (But why does the Ministry of Education's website bear a copyright notice?)
I'm interested because I am acting on a very similar dispute at the moment. The key piece of (UK) case law is SAXON TRADE MARK  FSR 39, where the late lamented Mr Justice Laddie (as he then was) held that a group of musicians constituted a 'partnership at will' and that the name and goodwill were assets of the partnership rather than the personal property of the individual members...". This can cause problems when there are competing versions of the same band, which is not an uncommon occurrence, and what appears on the register might not reflect the real ownership situation. In the Black Sabbath case, though, it does look to me as if Tony Iommi has no personal right to the name on the basis of the SAXON case. Does this mean that he holds the legal title to the trade mark on trust for the members for the time being of the band? And what if he left it?