Saturday, 21 March 2020

Concerning the originality of lampshades: Innermost v Warm

Innermost Ltd v Warm BL O/464/19 is that rare thing, a case about licensing of right under Part III of the Copyright, Designs and Patents Act 1988. I wrote it like that to avoid using the word "right" twice in close proximity, but of course design right is what it invloves.

The Act - the 1988 one, I hope that's obvious - permits a would-be user of the design right to claim a licence during the last five years of the term of protection. Because the term of protection for design right is 15 years from the end of the year in which the design was created, or 10 years from the end of the eyar in which articles made to the design were first made available for sale or hire if that happened within the first five years of the 15 year term (s.216(2)), it is not necessarily a simple matter to identify when a design is in the last five years of its protection, and that was one of the matters at issue in this decision of Mr Phil Thorpe on behalf of the Comptroller.

It's worth mentioning that ten years from first making available is the usual term of protection for designs. It is rare, though certainly not unheard of, for a design to be created and not exploited in this way for five years or more. But in this case we are in the realm not of aircraft, which take a long time to progress from drawing board to "making available", but of lighting, which can make much faster progress towards commercialisation.

Corinna Warm had designed the lights, which were referred to as the Glaze pendant light, the Circus pendant light and the Circus wall light. The Circus wall light used the existing Circus pendant shade. Innermost, the applicant for the licence, manufactured them under licences, which had expired. The parties were unable to agree terms for new licences, so Innermost invoked s.216, under which the Comptroller is empowered to set a royalty in default of agreement.

Mr Thorpe had to set the royalty rate for each of the three, but also had to decide when the Glaze pendant light had first been made available as this would determine the start date for the licence of right period. He also had to decide whether the Circus wall light even enjoyed design right protection, and if so when the licence of right period began. The royalty rates are probably the least interesting part of the case, so rather than leave you in suspense I will tell you now that he set this at 5 per cent for the two pendant lights (Innermost had offered 4 per cent, Ms Warm wanted 5 and 7 respectively, and in fact on the Glaze design Innermost conceded the higher rate during the hearing). As for the wall light, he decided for reasons that will become apparent that he didn't have jurisdiction to set a rate.

Prototypes of the Glaze pendant lights had been shown by Ms Warm before Innermost took a licence from her, and a couple of years before they started selling the lights, so which of those dates was to be used for calculating the beginning of the licence of right period was pretty important: would that period start on 1 January 2017 or 2019? The key to answering this question lies in paragraphs [116] to [119] of Lord Justice Jacob's judgment in Dyson Ltd v Qualtex (UK) Ltd. [2006] RPC 31, [2006] EWCA Civ 166 (the one in which he made some very scathing comments about Part III):
[116] If a man offers and takes orders for sale of articles for sale at the end of December, but does not actually deliver any until January, when does the five-year period of s.216 (1) (b) start to run? When are articles “made available for sale or hire?” In [307] the judge held that it when the public first actually could get the articles. So in the example, it is January. And it would make no difference if there had been prior manufacture of a prototype, shown to the public but no more. The judge held merely taking orders with future delivery (contemplated by the contract or in fact) was not enough. The first actual delivery is when the article is "made available for sale". 
[117] Mr Arnold said that was wrong—the statute was aimed at exploitation of designs. This starts when orders for the article are actually taken. Mr Carr submitted that UDR was for a short period in itself. It was unlikely that in some cases (e.g. the example above) the period of full protection would be cut down to virtually four years only. 
[118] Neither argument is particularly persuasive. Again the provision is not well-thought out—potentially it makes a 20 per cent difference in the period of full protection whichever party is right. In the end I think the judge was right to go by the actual words without any notion of underlying policy to guide him. He reasoned thus: 
"I consider that the natural meaning of the expression ‘made available’ connotes something that is actually in existence. If one imagines a case of an offer of goods which have yet to be made (in the sense that none of them are yet made) then I would not consider that those goods are ‘available’ for sale even if advance orders for them are taken. Taking orders for them is not making them available."
[119] I agree and see no point in trying to say the same in my own words.
(Counsel in that case, incidentally, subsequently became Lord Justice Arnold and Mr Justice Carr, who sadly died last year.)

On this basis, Mr Thorpe decided that it was when Innermost put the lights on the market that mattered, not when Ms Warm exhibited the prototypes. There was no need to argue about the relevant date for the Circus lights, as this was agreed at the case management conference, but it was necessary to decide whether the Circus wall light was protected at all. Ms Warm argued that it was a new design, several years younger than the pendant, whereas Innermost said it was just a variation of the pendant model, in which case it would lack the originality needed to give it protection in its own right so protection would begin and expire at the same time as for the pendant. Innermost also added a rather optimistic claim that the wall light was caught by the must-match exception, which Mr Thorpe struggled with before deciding that the argument had not been made out.

As for originality, the hearing officer found that
Ms Warm has taken the existing Circus lampshade as a starting point and designed a complimentary wall mount and arm arrangement which together support a swivel-mounted LED unit covered by the lampshade – the lampshade being made using existing tooling. It’s [sic - the decision contains a large number of colloquial contractions, almost as if it were a blog post!] a collection of parts that are designed to work in aesthetic harmony with one another. [Para 67]
 He added at paragraph [72] of his decision:
Ms Warm has employed originality in arriving at a new creation, something that is different to the Circus pendant lampshade. Certainly, the Circus lampshade has been used as a basis for the design and, except for some minor modifications to the modesty cap and cosmetic cover there appears to be very little, if any, difference in the shade’s shape or configuration. So does the combination of the shade and everything else result in something that is more than a mere collocation and render it original? I think it does. Whether this is regarded as adding ‘old’ to ‘new’, or ‘new’ to ‘old’, I think the result is a visually very different product, one where the whole is quite different to any one of its component parts. Ultimately the overall design is not a copy. I therefore conclude that design is original and thus design right does subsist.
You can't argue with that, although you can argue with whether the law makes sense. (Mr Thorpe couldn't, of course.) Does it really make sense to restart the term of protection, brief though it be in the first place, when an existing lampshade is fitted with a wall mount? Indeed, does it make sense to protect what to my untutored eye is a pretty ordinary-looking lampshade to start with? Well, yes, probably, because given the amount of freedom a designer has in this field there is no good reason to make a lampshade that comes close to looking like an existing one: in other words, the exclusive rights conferred by Part III will be very narrow. If Innermost didn't like the licence terms, they could probably have commissioned a new design that didn't look hugely different.


Monday, 16 March 2020

Whistleblowers' rights and breach of confidence: Pharmagona v Taheri

When a breach of confidence case has a 'whistleblower' dimension, things can get complicated. The history of Pharmagona Ltd v Taheri and Anor [2020] EWHC 312 (QB) (17 February 2020), which came before Mr Justice Nicol on 30 January (the judgment appearing on 17 February) is complicated - a sorry-looking tale of orders made and arguably not complied with - considering that it was nothing more than a simple breach of confidence action brought by an employer against a couple of employees, who happened to be husband-and-wife.

The defendants, IT manager and office manager respectively, had been summarily dismissed for stealing money by the claimant on 2nd February 2018, after which date they allegedly criminally hacked into the complainant's computer system and downloaded "various materials". The first defendant did the hacking, but communicated information to his wife who knew or ought to have known that she had confidential information.

The defendants maintained in their defence that the claimants had engaged in unlawful and criminal activities, including exporting goods to Iran. This, they argued, was why they were accused of theft and dismissed, although a police investigation had found no evidence against them. They claimed the protection of the Public Interest Disclosure Act 1998 and the Employment Rights Act 1996. Many elements make this a rather unusual breach of confidence case.

The defendants say that their hacking was to collect evidence of wrongdoing, and whistle-blowing would of course be immensely difficult if an injunction could be obtained to prevent information being passed on - indeed, to prevent the whistle being blown (or perhaps to remove its pea before blowing took place).

The claimant sought (so the judge inferred - the pleadings seem to have been somewhat unorthodox) an interim injunction. This would normally be dealt with according to the American Cyanamid principles, but the judge decided that s. 12 of the Human Rights Act applied: publication is not to be restrained before trial unless the court is satisfied that the applicant is likely to establish at trial that publication should not be allowed. The purpose of this provision is to protect the Convention right to freedom of expression (Article 10, of the European Convention on Human Rights of course). "Likely" means more likely than not, according to the House of Lords in Cream Holdings v Bannerjee [2004] UKHL 44, [2005] 1 AC 253, although this ordinary meaning might have to be applied flexibly sometimes.

The claimant argued that s. 12(3) did not apply, relying on the carve-out in Article 10(2) which allows freedom of expression to be curtailed to protect the rights of others - here, the claimant's proprietary rights in its confidential information. Counsel for the claimant pointed out that there had been no reference to Article 10 or s.12 in the key earlier Court of Appeal case Tchenguiz and Ors v Imerman (Rev 4) [2010] EWCA Civ 908 (29 July 2010) but the judge reckoned that the point about likely success at trial had been fully considered, even if the provisions had not been mentioned in so many words.

The judge was satisfied that unless the defendants were restrained, the claimant would be able to show at trial that the defendants would be likely to use the confidential information. However, the judge was also satisfied that the defendants should be free to co-operate with public authorities investigating the claimants' activities. They had, in short, to be allowed to blow their whistle. In the end, an injunction to prevent disclosure with a suitable public interest proviso, allowing the defendants to answer questions and provide documents, seems a very sensible (and in the circumstances quite simple) solution, and that is what the judge granted.











Thursday, 5 March 2020

Dilution and figurative trade marks: Red Bull v Bighorn

Red Bull energy drink has been around for a long time now. I discovered it during my stint teaching IP at Essex University, when I would take a day a week off from my day job and trek across the country. On arriving at Colchester a can of Red Bull would help me get through the two-hour class I was there to teach, and in fact I recall that it was Austrian students in that class, who drove home with the assistance of a few cans but had to take care because it was illegal in Switzerland, who first alerted me to its properties (I deliberately refrain from using the word "benefits").

Article 9(2)(c) of the EU trade mark regulation (2017/2001) (which is in pretty much the same terms as s.10(3) of the Trade Marks Act 1994) protects a trade mark with a reputation against acts that "without due cause" (I put that in inverted commas because it is hard to see how it could be otherwise) take unfair advantage or that reputation or are otherwise detrimental to it (or for brevity dilution and tarnishment). Back in 1994 (or perhaps more accurately 1989, when the original directive was made) that was a radical new departure in trade mark law, not just in the European Community and still less just in the UK, but in the world at large: the US had dabbled with such protection but even in the Dallas Cowboys Cheerleaders case the judge had stuck to the well-trodden path of confusion rather than following the "dilution" signpost.

A major problem is the notion of a trade mark with a reputation - haven't all trade marks got reputations, some larger than others? The French version of the directive looks to be referring to trade marks "of repute", which is a different matter - and Article L713-5 of the French Code refers to "une marque jouissant d'une renommée". But whatever the law means, we can probably assume that the trade mark RED BULL, and the same trade mark owner's figurative trade marks (what normal people would call logos) or at least some of them, have reputations. (Incidentally, it seems to be the trade mark not the product or the trade mark owner that must have the reputation, which is, well, interesting.) So no surprise that when Red Bull found another energy drink manufacturer selling its wares under the BIGHORN trade mark using signs that bore a certain similarity to Red Bull logos - in one of the three instances pleaded, charging rams rather than charging bulls - they sued for trade mark infringement on grounds of likelihood of confusion (the rams obviously meaning that the defendant's trade mark could not be identical) and unfair advantage (without due cause, of course).


The deputy judge, Kelyon Baker QC, found no infringement under Article 9(2)(b) - likelihood of confusion - but did consider that the defendant took unfair advantage of the reputation of the claimant's trade mark: Red Bull GmbH v Big Horn UK Ltd & Ors [2020] EWHC 124 (Ch) (30 January 2020). I have shown one of the claimant's registered trade marks and one of the defendant's signs, but you can see them all in the judgment if you click on the link, should you feel it necessary.

There was not a high enough level of similarity to find a likelihood of confusion under Article 9(2)(b), but that didn't matter much because the Deputy Judge held that there was unfair advantage, so Red Bull succeeded. Sky v Skykick [2018] EWHC 155 (Ch) told us that this required the global assessment so beloved of the Court of Justice, taking into account all the circumstances of the case. These would include the strength of the trade mark's reputation, the defree of its distinctive character, the degree of similarity, and the nature and degree of proximity of the goods or services. How strongly and immediately was the claimant's mark brought to mind by the defendant's sign? That would determine whether the use of the sign was taking unfair advantage of the trade mark's distinctive character or reputation.

The defendant did not try to argue that the Red Bull trade marks were not well-known within the EU, which would surely have been a waste of time had they attempted it. Nor did it try to justify its actions by showing "due cause", whatever that might look like (parody, perhaps?). The defendant's signs were visually and conceptually similar to the claimant's marks. They were being used for the same goods, which were sold in the same shops. They were therefore likely to cayuse the average consumer to link those signs with the claimant's marks, and unfair advantage was therefore being taken.


Cheat software infringes copyright in Grand Theft Auto V

It won't surprise you to learn that computer games are not my thing. I did have to look at one some years ago for a client who objected to the content (we took the view in the end that the Streisand Effect was likely to make anything the client did about it counter-productive). So if I don't relate to computer games themselves, what am I supposed to think about software that enables the user to cheat in the game?

Cheat software is what was in issue in Take-Two Interactive Software Inc & Anor v James & Ors [2020] EWHC 179 (Pat) (29 January 2020) where in an application for summary judgment the judge (Mrs Justice Falk) held that it infringed copyright in the game itself. Not only that, there were breaches of contract both by the defendants and induced by them, the elements of the tort of inducing a breach of contract (knowledge, intention and damage, as laid down in OBG Ltd v Allan [2008] 1 AC 1) being made out against most of the defendants. There were a couple of points (the liability of a minor defendant, and circumvention of technical protection measures under s.296 CDPA to which the defendants seem to have had a plausible factual defence) which were not candidates for summary judgment, but on the other claims the judge saw no reason to leave liability for a trial.

Leaving aside the contract issues, this being an intellectual property blog, the important finding here is that by providing the cheat software the fourth and fifth defendants (the first three having settled earlier) had authorised copying of Grand Theft Auto V or substantial parts of it. The cheat software took information from the game so it could reproduce an image of something for use in the game. That there was copying is plain, and the defendants had provided the means to do the copying. Using the cheat software as intended would inevitably result in infringement.

The defendants tried arguing that the game software on the user's device remained unaltered, and any affect from the cheat software was not permanent: but transient copying is clearly within the s.16 definition of infringement, so that got them nowhere. However, the fact that the impact of the cheat software was on the program when running meant that attention had to be focussed on elements that frankly look a bit peripheral to my mind: images of weapons used in the game, and their software-driven functionality, residing in libraries and code within the program, were the example the judge referred to. Cheating meant conjuring up weapons that the user was not entitled to have, according to the rules of the game, so the copies were infringing ones. It strikes me as a pretty small infringement, and perhaps the fact of the matter is that the wrong here lies outside the scope of copyright (the breach of contract claims look much more substantial and convincing to me), but it does show how copyright can be brought to bear on a problem like this.

Would copyright remedies be worth pursuing? That remains to be decided, and the judge expressed the hope that hte parties will be able to sort that out without a trial. It's hard to see where the damage to the claimant is, and I suppose it's even arguable that the defendants might have made the game a bit more popular by opening up new possibilities and providing a route to a satisfactory outcome that users might not be able to achieve on their own. An account of profits might yield more. However, with copying of elements of the game inherent in the cheating (making more weapons available, etcetera) I can see grounds for the grant of an injunction, which would effectively put a stop to the cheating, even though it seems like a roundabout way to get there.

Wednesday, 4 March 2020

Bundling high-class goods with cheap ones gives trade mark owner chance to sue

Repackaging goods sold under a trade mark, and bundling them for resale with third party products, can infringe the trade mark. The trade mark owner must have a legitimate reason to oppose the sales, though: this could be because the goods are being resold in cheap-looking packaging that damages the luxury cachet of the trade mark, which was the case in Brealey v Nomination de Antonio e Paolo Gensini SNC [2020] EWCA Cir 103 (3 February 2020).

The Intellectual Property Enterprise Court held that the defendant had infringed the trade mark, and now the Court of Appeal (Patten, Floyd and Arnold LJJ) has agreed. The trade mark owner also claimed for passing off, and that claim also succeeded.

That the claimant's products, charm bracelet links, were usually but not always sold in luxury packaging did not invalidate the finding that legitimate grounds existed to oppose the sales. Anyway there was no evidence about the frequency of such sales, and the judge had also found that consumers who bought the claimant's products from the claimant's own shops would have received the luxury packaging. The judge was (the appeal court thought) entitled to conclude that selling the claimant's bracelet links in blister packs and plastic bags - the antithesis, presumably, of luxury - would damage the reputation of the trade marks. Although the claimant sometimes sold goods in plastic bags, this was infrequent and did not justify the damage done to the trade marks by the defendant's activities, which deprived the trade mark owner of the opportunity to convey its luxury image to the consumers who bought from the defendant.

As for the passing-off claim, the judge had been entitled to conclude that consumers would not read the defendant's online advertisements with any great care or attention. It must have been pretty clear to the defendant that there was a risk of confusion if it did not make clear that the packages it sold contained the claimant's links as well as the defendant's. 

Friday, 28 February 2020

Can a machine be an inventor?

The question of whether a machine can be an inventor for the purposes of patent law has become very acute with the breakthrough of artificial intelligence technology in the 21st century.

The Copyright, Designs and Patents Act 1988 (CDPA) only recognised humans as authors of copyright-protected works (see this post for a discussion about copyright in monkey selfies), and even section 9(3) dealt with computer-generated works by identifying a human as the author. Similarly for patents under the Patents Act 1977: under section 7, only a "person" may make an application for a patent (possibly jointly with other persons), which may be granted to the inventor or joint inventors or certain other persons, and (the tailpiece to s.7(2) stresses) "to no other person". As in the case of the monkey selfie, the word "person" seems to limit the grant of a patent to human beings. But the 1977 Act does not credit a human as the effective inventor in the way that the copyright law substitutes a human author for a computer.

DABUS-the-inventor

The EPO has recently declined applicants in two related cases, EP 18 275 163 and EP 18 275 174, because both named the machine (DABUS) as the inventor. The decisions were widely reported by media and legal platforms alike (see Practical Law here (subscription required) and BBC news here).

In a nutshell, a machine has an owner, who is an individual. A machine, therefore, cannot transfer rights to a successor in title. The failure to name a natural person as an inventor, as required by the EPC, meant that the applications had to be refused. The applicants have a right to appeal the decisions, so we will continue monitoring the developments of these cases.

Analysis of these EPOs decisions shows that they are based on outdated law, but this is not uncommon: indeed, it is inevitable, because the law cannot anticipate technological change. Similar legal systems are in force all around the globe. However, since AI inventions are becoming increasingly more common, it seems that the world would have to adapt to the new reality.

Unlimited patents for minimum investment
As mentioned above, CDPA contains provisions for copyrights given to computer-generated works, which seems to be as close as English law has got to recognising AI copyright. Once the machine copyright is widely recognised, it seems logical that the actual human and/or the company that owns the machine would naturally get the reward from the machine's inventions. In fact, we would only have a longer chain, but the principle would stay the same - the humans would be the ultimate beneficiaries of AI copyrights.

Allowing AI patents could open the floodgates for various AI machines producing inventions almost like a conveyor belt. After all, a machine needs no food or sleep. It only needs a couple of engineers to maintain it, which poses a risk AI could inadvertently aid employee redundancies (though this is a wholly different topic!).

This ultimately means that companies could receive maximum profits from their patents with minimum investments. All a company has to do is to employ an inventor (or a small group of such) to produce one AI machine, which, in turn, would potentially produce an infinite number of inventions in any given area of science or medicine.

For such inventions to be successfully patented, however, the criteria of patentability would have to be slightly amended, so as to re-define an inventive step for machine inventions (see my arguments below).

Patents? Who needs patents!


Understandably, the development of AI can question the whole idea of patenting. To be granted a patent, an invention must be:
  • Something new;
  • Something that can be put to practical use; and
  • Something inventive.
The requirement of novelty and practicality would unlikely set any challenge for a reasonably powerful machine. It would have already learned all of the world’s inventions, analysed them and produced the one that is certainly new and that would definitely find a practical application.

An inventive step, however, is a tricky category to assess. Inventiveness as a criteria is assessed in light of obviousness, which for years worked well for human inventions. However, how would one assess obviousness of a machine invention? Where a machine can learn from everything ever invented in the world, it may be that everything would seem obvious!

One may argue that a machine would be placed in an unfair advantage against its human competitors. As mentioned above, for an inventor it would seem a more attractive option (and would make more commercial sense) to create an AI machine to produce something that is guaranteed to satisfy all patent requirements rather than waste time and effort to produce something that would (most likely) never sustain any competition with an artificial intellect.

If this was the way the humankind wanted to go, it may well mean that the whole patenting system could crumble and patent laws could become redundant. Would the world be sad if that happened? Patent attorneys would probably shed a tear or two.

So what shall we do?

In light of the above, the humanity would have three obvious ways: 1) to abandon patents all together; 2) to restrict patenting only to human inventions; 3) to allow patenting of AI inventions but reform the patent requirements and award patents to the owners of AI technology.

If the second option is chosen, there have to be very strict criteria and close supervision over human inventors to make sure there were no AI used in order to aid a real “human invention”. I find this a very costly and not very practical solution.

The first and the third options seem to be the most likely ones in light of the current developments in technology. Both of these have to be closely scrutinised to make sure they can sustain the test of time, before any one of them is chosen.

To sum up, I firmly believe that the legal recognition of AI inventors is only a matter of time and AI will no doubt be recognised as a part of our world's technological progress. Just like an industrial revolution saw factories emerge, AI is only a natural step forward for humankind, whether we like it or not.

We will no doubt keep you posted on the developments in this curious area of law.


Wednesday, 19 February 2020

Sharing the workload

Having entertained a few guest bloggers over the years, I have now invited another IP enthusiast, Marianna Ryan, to write for IPso Jure, on more than just a guest basis. Marianna is a solicitor with Howes Percival in Northampton, but I have known her since she was a student on the University of London's international programme LLB course in Moscow where I taught IP. As well as studying that module, she wrote a very interesting dissertation comparing the treatment of well-known trade marks in the UK and the Russian Federation.

Marianna's first degree ("Specialist of Laws", equivalent to a bachelor's degree) was from Gubkin Russian State University of Oil and Gas. Having graduated from the London international programme (and also having moved to England) she obtained her LPC/LLM from the University of Law, Guildford, and completed her training contract with Hedges Law in Oxford.

She is also about to become a graduate student again, about which I will leave it to her to tell readers more in due course.

I am very pleased at the prospect of regular assistance with writing this blog, which astute readers may have noticed has been somewhat irregular in the recent past.

Thursday, 6 February 2020

No copyright protection for design dictated by function - Advocate General

Having commuted into London by train for so much of my life, I have long been familiar with the Brompton folding bicycle - the advantages of which it's a little hard to appreciate when the crowded train carriage is full (OK, that's hyperbole) of them. What is the point of a machine for moving, when it is folded up and carried in a larger moving machine? When Brompton cycles became available for hire at my local railway station, but apparently with the intent that people would hire them to take to London rather than on arriving from London or elsewhere, I had one of those moments of clarity that comes to me when I realise I no longer understand how the world works (another instance of which is when I was reading Frank Zappa's obituary in the Financial Times).

A friend I made in the course of commuting - one of many, including a Chancery master and the future Information Commissioner - didn't clutter the train up with a Brompton cycle, although she might have done later, on a different line: but in 2010 and 2011 she was the female Brompton World Champion, which is quite an achievement. But I digress.

Be that as it may, they are a great product and a great success, although I'll stick to the mountain bike I bought from our neighbour a few years ago - a Brompton would not cope well with the track I use to get to the station. It's not surprising that such a successful design should have attracted the attention of copyists. While the folding mechanism was still protected by patents (the original one of which, EP0026800, was filed in 1979, so now long gone) these could be dealt with quite easily, but latterly Brompton (in which I include Mr SI) has had to rely on copyright and design law.

One such case is before the Tribunal de l’entreprise de Liège, which embarked on an expedition to Luxembourg with questions about whether a product with an industrial application whose shape is exclusively dictated by its function may attract copyright protection.  Advocate General Campos Sánchez-Bordona has today given an opinion in SI, Brompton Bicycle Ltd v Chedech/Get2Get (Case C-833/18) EU:C:2020:79: I'm baffled about the "SI" part of the case name, as the Opinion clearly describes the founder of Brompton, Andrew Ritchie, who owns much, perhaps all, of the intellectual property in the design, but in deference to the legal documents I will call him Mr SI until someone tells me to do otherwise.

There are two questions for the Court:
(1) Must EU law, in particular Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, which determines, inter alia, the various exclusive rights conferred on copyright holders, in Articles 2 to 5 thereof, be interpreted as excluding from copyright protection works whose shape is necessary to achieve a technical result? 
(2) In order to assess whether a shape is necessary to achieve a technical result, must account be taken of the following criteria: 
– The existence of other possible shapes which allow the same technical result to be achieved? 
– The effectiveness of the shape in achieving that result? 
– The intention of the alleged infringer to achieve that result? 
– The existence of an earlier, now expired, patent on the process for achieving the technical result sought?
The AG observes that:
The referring court only asks the Court of Justice for an interpretation of Directive 2001/29.
I beg to differ - the words "in particular" say the very opposite. But maybe that Directive - which, let's not forget, is concerned with copyright in the information society, according to its title to which the Court seems to have less and less regard - is the only one that matters.

As for the shape being necessary to achieve a technical effect, the referring court had made a finding of fact about this: the shape was necessary in that sense. It would not be a matter for the Court of Justice anyway, but it had to be taken as read. The Advocate General advises the Court that it should not be protected by copyright.

It is not long since the Court gave its opinion in Cofemel (Case C‑683/17), EU:C:2019:363, and the Advocate General had nothing to add to the review of the case-law there. To be original, a work must reflect the personality of its creator. Cofemel tells us that aesthetic considerations play no part in determining whether a work is original. That indicates pretty clearly the direction in which the Opinion is going: if a design is dictated by function, it doesn't reflect the personality of the designer, and therefore cannot be original so copyright will never subsist in it. A digression to draw lessons from trade mark law (exclusion of shapes which achieve a technical function), which seems a bit left-field, reinforces the Advocate General's view.

There's more to the Opinion, but that will have to suffice for now.

Monday, 3 February 2020

FRAND trial necessary to decide damages


In Koninklijke Philips NV v Asustek Computer Inorporation [sic] & Ors [2020] EWHC 29 (Ch) (17 January 2020), Marcus Smith J dismissed the defendant 's application in which it sought to get out of a trial (due later this year, listed for five days) to determine the terms of a FRAND licence. Asus had earlier been held to have infringed the Philips patent, which had been declared essential to a telecommunications standard. Asus had decided to consent to a permanent injunction and did not want a FRAND licence, so one can understand why they would rather like to save the trouble and expense of five days in court.

Asus proposed that the correct measure of damages would be the royalty rate in the FRAND licence (when that was settled) times the number of devices that infringed. Simple!

The judge did not see it that way, though. That could under-compensate Philips, which was probably why it appealed to Asus.

On the other hand, he didn't like Philips's argument either. They said that damages should take into account that the FRAND licence would be worldwide, covering all their relevant patents and all the companies in the Asus group. That, to the judge's mind, risked usurping the jurisdiction of other courts, and over-compensating Philips. Working out the damages was something that could only be done at the FRAND trial, so Asus's application failed.

Saturday, 1 February 2020

Jacquard fabric as a work of artistic craftsmanship

The courts have always been much better at telling us what isn't a work of artistic craftsmanship than telling us what is. But in Response Clothing Ltd v The Edinburgh Woollen Mill Ltd [2020] EWHC 148 (IPEC) (29 January 2020) HHJ Hacon (the case seems to have been running for two or three years) in the Intellectual Property Enterprise Court has come up with an answer.

The fabric in question is a jacquard fabric, which is important because the distinctive thing about jacquard fabrics is that the pattern is woven into the fabric rather than simply being printed or embroidered. This opens up the possibility of the loom operator providing the essential craftsmanship contribution to the work.

The judge reviewed the cases, from Hensher v Restawile (1976) to Vermaat v Boncrest (2001), not to mention Lucasfilm (2008), concluding that the Hensher court (the House of Lords, remember) would have found against the present claimant: the fabric was not a work of artistic craftsmanship - the craftsmanship element being lacking. However, there was no clear guidance in Hensher (their Lordships canvassed about nine different ways of defining a work of artistic craftsmanship before concluding that they furniture in suit was none of them) and a New Zealand case, Bonz Group (Pty) Ltd v Cooke [1994] 3 N.Z.L.R. 216 (Tipping J) had been approved a couple of times by English courts (Vermaat and Lucasfilm) so it offered a better way forward: and importantly it provided a route to holding that the fabric was a work of artistic craftsmanship.

That, though, is no longer the end of the story. Directive 2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society, notwithstanding its title which seems to constrain its ambitions, is rapidly becoming the keystone of copyright law. Article 2 requires Member States to give authors the right to prevent reproduction of their "works", not just those works that the UK legislature has chosen to protect. Whether a "closed-list" copyright system is permissible under the directive remains a contentious point. It seems that it makes no difference in the present case: the claimed work was indeed a work, and it was its author's own intellectual creation. But that isn't always going to be the case, so we have to wonder whether now that the UK has taken back control of its copyright law we can look forward to some clarification of how these provisions wil work in future without the influence of the Court of Justice.

Patent litigation: When withdrawing admissions will result in prejudice

In Lufthansa Technik AG v Astronics Advanced Electronic Systems and others [2020] EWHC 83 (Pat), the defendant assumed that it had been supplying goods in the UK (or at least that it was responsible for the supply). Its inhouse lawyer made certain admissions on that basis. Later, when it was realised that this was not the case, it tried to withdraw the admissions - a matter covered by paragraph 7.2 of Practice Direction 14. 

The authorities make clear that the facts of the case are all-important. Among the factors that para 7.2 says have to be considered are prejudice to the claimant and prejudice to the defendant. The present case turns on what "prejudice" means in this context. Nugee J, reviewing the CPRs' policy of eoncouraging admissions as a way to focus litigation (and reminising about the way things used to be done in the badd old days, when pleadings were all about obfuscation rather than clarification) held that prejudice was caused to a person if an admission was withdrawn in circumstances where they would be worse off if the admission was withdrawn than if the admission were not withdrawn: and on that basis he unsurprisingly refused to allow the defendants to withdraw the admissions (with one minor exception).

There seems to me to be no reason to restrict this principle to patent, or even to IP, litigation.

Sky v Skykick: not as exciting as I had hoped

I blogged here about the Advocate General's opinion in Sky v Skykick a while ago, and now the Court of Justice has given its opinion. After the Advocate General's remarks, I was rather disappointed by what the Court said. It seemed like an excellent opportunity to deal sensibly with problems of monopolisation (about which the Advocate General was rather critical) and the related issues of depletion and foreclosure, but the Court seems to have missed it.

The story so far is that Sky (the broadcaster, just to be clear) has been trying to exercise its trade mark rights against Skykick, a US business which is involved in facilitating cloud computing and storage (I'm being a bit axiomatic, I suppose: cloud computing must  include cloud storage.) Because, cutting a long story short, Sky's trade mark covers computer software, questions arise about whether that is acceptable. It clearly gives Sky a very broad monopoly. Skykick argued that Sky had acted in bad faith by registering for goods and services that it was unlikely ever to be providing. It also argued that the specification was unclear and that Sky's rights should therefore be cut back.

The Court of Justice has made three important rulings:

  1. A lack of clarity and precision in a trade mark specification is not of itself (my additional words, which I think are important) grounds for validity. That should come as no surprise, given that the list of absolute grounds for refusal of registration in the Directive is exhaustive. It is not open to the national authorities or the courts to add more grounds. Nor does a lack of clarity or precision support an argument (such as that put forward by Skykick) that the trade mark is contrary to public policy: the Court makes clear that this is a critrion concerned with the trade mark itself, the sign, not with factors such as the goods or services for which it was registered.
  2. Registering a trade mark with no intention to use it in relation to the goods or services covered by the registration may constitute bad faith. However bad faith is to be identified by using an objective test: there he to be "objective, relevant nd consistent indicia tending to show" that when it filed the application the applicant intended "undermining, in a mannerr inconsistent with honest practices, the interests of third parties, or ... obtaining, without even targetting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark." The mere fact that the applicant "had no economic actiivity corresponding to" the specified goods or services did not automatically mean taht the application was in bad faith: of course not, it could have ben filed on a perrfectly valid intent to use basis, with the applicant anticipating that it would expand its economic activities in due course. If a lack of intention to use the trade mark led to a finding of bad faith, the Court decided that the registration should be cancelled only for the goods and services for which the applicant had no intention of using the trade mark.
  3. The requirement in UK trade mark law that an applicant declare on the application form that they intend to use the mark for the specified goods and services is OK by the Court: it is not precluded by the Directive. However, it cannot be a ground for invalidity in itself - it can only be evidence of bad faith.
It must be absolutely right that a lack of intention to use the trade mark on all the goods and services for which it is registered cannot amount to an absolute ground for refusal. The list of absolute grounds is a closed one, and the judges canot add to it. Neither can whoever wrote the declaration into form TM3. But both of those matters must logically raise questions about good faith: not only raise, but usually answer them too. It might be harder in the EU trade mark system to show that there was no intent to use, so an over-wide specification should not be immediately open to criticism, but surely it needs to be possible to call the validity of an outrageously wide trade mark into question early in its life (and again I refer the reader to the EU trade mark ROYAL MARINE COMMANDO and device, registered for a wide range of goods including IIRC bird tables - the  link i s to one of two very similar trade marks, and there are another two later related ones as well).

In the UK system, though, signing the declaration should open the door to a bad faith challenge as soon as the ink is dry. It is no longer a matter of being able to argue that bird tables feature in Her Majesty's Forces' long-term plans: the declaration should be taken as indicating that they definitely have that intention. Now that the UK has taken back control of its trade mark law, perhaps it will exercise that new freedom so as to make some real progress with clearing the junk off the trade marks register.

Abuse of dominant position by SEP owner not a matter for summary treatment


Standards Essential Patents and FRAND licences are in fashion, it seems - and so perhaps they should be. In Optis and Unwired Planet v Apple [2014 ]EWHC 3538 (Pat) (17 December 2019 ) the Patents Court (Nugee J) considered Apple's application to strike out, and rejected it .

The claimants had brought the action to compel Apple to take a FRAND licence from Optis. Apple answered that with an allegation that Optis had abused its dominant position, contrary to Article 102 TFEU.

Ownership of a Standards Essential Patent puts the patentee in a dominant position as a licensor of that patent, that much is clear, but whether that is the same as a dominant position in the relevant market depends on an analysis of substitute technologies. Life is rarely simple where competition rules are involved .

There has been a lot of judicial consideration of FRAND licensing and Article 102 recently. The Court of Justice looked at the matter in Huawei v ZTE  (Case C170/13) ECLI:EU:C:2015:477, [2016] RPC 4, and the English courts in Unwired Planet Unwired Planet International Ltd v Huawei Technologies Co Ltd) (Birss J) [2017] EWHC 2988 (Pat) and a lengthy decision of the Court of Appeal given by Lord K itchin at [2018] EWCA 2344 (not yet on Bailii, and if not yet will it ever be?); and Conversant Wireless Licensing SARL v Huawei Technologies Co Ltd  (Henry Carr J) [2018] EWHC 808 (Pat), and [2019] EWCA Civ 38 (judgment given by Floyd LJ). Unwired Planet v Huawei is currently awaiting a ruling from the Supremes.

The EU case law sets out two requirements for an SEP owner to avoid committing an abuse: they must alert alleged infringers and, if the alleged infringer is willing to conclude a FRAND licence, the patentee must offer one, in writing.

According to the Patents Court, UK case law tells ut that these two requirements are not both mandatory. (When is a requirement not mandatory? Isn't it an inherent part of the definiition?) The first one is, but the second is more of a safe harbour, not itself determinative of an abuse. Making the offer means you aren't behaving abusively, but not making itdoesn't mean you are abusing a dominant position . Beware the logical fallacy of the undisthtuted muddle, as Lord Diplock warned us in Catnic.

Apple contended that negotiatious had been going on for a long time, indicating presumably that the allegedly requered offer had . nor really been made . But to strike the claim out summarily was not on: the court was not in a position to say that the claimants had no reasonable prospect of avoiding a finding of abuse (excuse the plethora of negatives).

The court also explained that English practice is to establish whether there has beca an infringement,
them to assess whether ang terms put forward qualified as FRAND. Until the court reached that
stage, it would not be granting injunctions.

Friday, 24 January 2020

Alcoholic sweets: why a bear shape isn't a good idea

The Guardian carries this story today about a start-up business in Spain which has run into problems with a big trade mark owner. As with so many stories about intellectual property, we could call one party David and the other Goliath - in this instance the sweet-maker Haribo (a word which seems to be on the verge of entering the language as a generic term).

The idea of making the jelly-like sweets alcoholic is novel, though I would be a little surprised if it did not feature somewhere in the state of the art. The problem, though, is not with the nature of the product: the problem lies with its shape.

The sweets market is not one of which I have much familiarity (what I do know about Haribo products is that the contain gelatine, so cannot form part of my vegetarian diet - although the only time I have to refuse them is at feed stations in long-distance races). I am however familiar with the concept of Gummy Bears (Gummibär, in their native German), although I wouldn't without the prompting of The Guardian's article necessarily have associated them with Haribo. I would however have known enough to realise that bear-shaped sweets were likely to attract someone's unwelcome attention.

It's easy to present this as a David and Goliath situation, with a humourless, monopolisitic behemoth (and no, I'm not getting my bears and cats mixed up here) bullying young people who are only trying to get their own business up and running. The presence of alcohol in their sweets makes them a rather different proposition from Haribo's, of course, although a similarity and likelihood-of-confusion analysis might conclude that they are too close for comfort. (Student readers: Discuss.) But why on earth shape them like bears, when the animal kingdom offers so many other possibilities? Haribo's claim proceeds from the assumption (so it seems from the comments in the article) that it is no accident: perhaps there was no deliberate attempt to sell boozy bears by reference to Gummy Bears, but it is hard to believe that the newcomers could have been ignorant of what was already in the market (and should have done some market research to make sure) so the allusion to the Haribo product cannot have been entirely inadvertant. It has certainly succeeded in getting publicity that they would not otherwise have enjoyed.

Does an agreement to settle a dispute between a patentee and a generic drug maker breach competition law? AG's opinion

An agreement settling a patent dispute may constitute a restriction of competition by object or by effect and that entering into such an agreement may be an abuse of a dominant position, according to Advocate General Kokott's 276-paragraph, 223-footnote opinion of 22 January in Generics (UK) Ltd e.a. v Competition and Markets Authority (Case C-307/18) ECLI:EU:C:2020:28.

The reference to the Court of Justice came from the Competition Appeal Tribunal, which was hearing an appeal against the Competition and Markets Authority's finding that GlaxoSmithKline, Alpharma Limited and Generics (UK) Limited had breached EU and UK competition law by entering into a series of agreements that had the effect of delaying generic entry of the drug paroxetine. The generic manufacturers concerned undertook, inter alia, not to enter the market with their products for an agreed period: the CMA found the agreements to be akin to market exclusion agreements, prohibited under Chapter 1 of the Competition Act 1998 and by Article 101 TFEU, and an abuse of GSK's dominant position prohibited by Chapter 2. The CAT referred ten questions for a preliminary ruling.


The fact that the validity of the patents, and whether the generic products infringe them, remained uncertain did not mean that the patent holder and generic manufacturers were not potential competitors, according to the Advocate General. The correct question to ask is whether there are real, concrete possibilities to enter the market despite the patents, and this (the Advocate General went on) is a matter for the competition authority to decide taking into account all the relevant factors. She also considered that conduct that can constitute an abuse of a dominant position can only be justified by consumer benefits when it can be shown that those benefits offset an agreement's adverse effects on competition on the relevant market. Where the agreements provide limited benefits, while eliminating competition by removing all sources of potential competition, this condition is unlikely to be satisfied.

UK will not implement Digital Single Market Copyright Directive

In a written answer today to a question from Jo Stevens MP (Cardiff North), Rt Hon Chris Skidmore MP, Minister of State for Universities and Science, has told us what is hardly a surprise:
The deadline for implementing the EU Copyright Directive [that's 2019/790] is 7 June 2021. The United Kingdom will leave the European Union on 31 January 2020 and the Implementation Period will end on 31 December 2020. The Government has committed not to extend the Implementation Period. Therefore, the United Kingdom will not be required to implement the Directive, and the Government has no plans to do so. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.
That's the domestic policy process that in 1988 put in place new legislation that had been needed since at least the Whitford Report ten years earlier. Meanwhile the carefully-considered changes to copyright law (whether you like them or not) that the Directive contains seem destined to pass us by. No "link tax", no change to the law on content-sharing, none of the other good things copyright owners were going to get from the Directive - Google and other platforms must be very happy.

Friday, 17 January 2020

Full and frank disclosure needed for order for service out


I haven't exactly been waiting for a case on service out , but suddenly two have come along together in the manner of no 253 London buses (substitute your own favourite route number if you wish ). In Easy Group v Easy Fly [2020 ] EWHC 40 (Ch) Nugee J set aside such an order in a passing off, trade mark infringement and unlawful means conspiracy (and, you might add, kitchen sink) claim.

Unlike my previous subject, Wheat v Google (in which judgment was given the following day), there were serious issues to be tried - that wasn't the problem. The issues included where the defendant's website was targeted, whether using a trade mark in a press release made a link between the mark and the services, and whether flying an aeroplane with the trade mark on the side was an infringement.

The problem was that the claimant had failed to tell the judge everything when making the application. Its case was based on the premise that the defendant, a domestic Colombian airline,
was offering its sences in the UK and the EU. It wasn't. The court declined to treat the claim form as valid. The claimants can start again, but will only be able to claim damages for the six years before
the new claim .

Refusal to allow service out upheld


A Chancery Division judge has dismissed an appeal against a Master's refusal to give leave to serve Google outside the jurisdiction . The point arose in an action for copyright infringement, Wheat v Google LLC [2020] EWHC 27 (Ch) (15 January 2020).

The substantive claim involved hotlinking, or inline linking. The hotlinks appear in Google search results, and the claimant argued that Google enabled users to access content on his website via other hotlinking (or, more descriptively and I think more commonly, aggregating) sites - thus depriving the claimant's site of visitors and of advertising potential. Mr Wheat's website, at www.theirearth.com, was devoted to ecological and sustainability issues and contained original articles and photographs created by him. (It went offline in 2018.) He became understandably miffed when aggregator sites availed themselves of his content to attract visitors to their advertising-laden sites.

On an application to serve a foreign defendant outside the jurisdiction, the claimant must satisfy three
requirements (Seaconsar Far East Ltd. Bank Markazi Jomhouri Islami Iran [1994 ] 1 AC 438, 453-457, endorsed by the Privy Council in Altimo Holdings and Investment Ltd v Kyrgyz Mobile Tel [2011] UKPC 7, [2012] 1 WLR 1884. There must be a serious issue to be the on the merits; there must be a good arguable case that the claim falls within one or more classes of case where permission may be given to serve out ; and the claimant must satisfy the court that in all the circumstances the forum in which proceedings have been commenced is appropriate. The main issue, the judge (HHJ Keyser) decided, was whether there was a serious issue to be tried on the merits: substantive copyright law therefore had to be considered .

According to the case law , the claimant would have to show that Google had communicated his copynight works either to a new public or by a different technical means from that authorised by the claimant. The second possibility could be immediately knocked on the head: Case C-466/12, SvenssonEU:C:2014:76 makes clear that the whole of the Internet is a single technical means. But Svensson also tells us that because the publie to which the communication was made was within the class of potential visitors to the claimant's website , the first possibility was excluded too . The claimant argued that his initial consent to communication was subject to an implicit restriction was not supported by evidence. The Master had been correct in his interpretation and application of the case law. Google's acts of caching and indexing amounted to communication neither to a new public nor by a new technical means, and were not unauthorised communications to the public within the meaning of s.20.

Such is the result of the way the technical process works, and of the present state of the law. Surely copyright law should deal with the economic reality of the situation, though, and prevent parasites (oh, I hadn't intended that pun but it works rather well) from taking a free ride on someone else's original work. Perhaps Mr Wheat's mistake was to make his website freely accessible - but the whole ethos of what he was doing clearly required him to do so. The Internet is perhaps becoming no place for anyone who is not out to make as much money as possible, regardless of whose efforts that is based on. Or so it seems to me.

Friday, 10 January 2020

Intellectual property update webinar

I'm presenting an online webinar (I suppose the word "online" is redundant there but I'll leave it in, having taken the trouble to write it in the first place) next week for MBL. Details are here. I'll be covering as much as I can of what has happened in the IP field since mid-September - so, roughly quarter 4 of 2019 - in the space of 2 hours. "Tour d'horizon" might be a better term for it. Still time to join in if you are interested!

Duke and Duchess of Sussex apply for trade mark protection

Stepping back from what is colloquially referred to as the Firm (though IIRC it was Her Majesty herself who first used the expression) evidently involves turning to trade mark law for protection. It was always available to them, but surely the Royal family doesn't need anything so mundane? Perhaps the Sussexes' application to register SUSSEX ROYAL (application number 3408516, and also 3408521 which has a reference to their Foundation tacked on) as UK trade marks, reported inter alia by The Guardian here, is indicative of their departure from the core of the Royals (although other reports today suggest that they aren't going to find it very easy to get away).

They were apparently prompted to apply when someone else filed an application. I don't think it's necessarily right to refer to it as "squatting" because it's hard to imagine the owner trying to extract payment from the Royal couple. "Troll" seems like a better term. That application failed, however, because of s.4(1): the words would be
(d) ... likely to lead persons to think that the applicant either has or recently has had Royal patronage or authorisation,
... unless it appears to the regstrar that consent has been given by or on behalf of Her Majesty or, as the case may be, the relevant member of the Royal family.
I have dealt in the past with a very few trade mark applications that required Royal consent (in practice, the consent of the Lord Chamberlain, the most senior officer of the Royal Household, the route to whom is via the Queen's solicitors, Farrars, who will again IIRC impose a modest charge). Surprisingly, even if an organisation is incorporated by Royal charter or has the word "Royal" in its name with the monarch's approval it still needs further consent to satisfy the registrar. Given that the registrar is a servant of the Crown, should not he or she be trusted to oversee the whole process?

Be that as it may, the new application raises an intriguing question. Will the registrar be satisfied that the requisite consent has been given? The application was originally filed by two of the couple's "people", and later assigned to the Foundation, so the applicants have never been the Royals themselves. Nevertheless, it might be reasonable to infer that their Foundation acts with their consent. But does that suffice, or does s.4(1) (and s.3(5), which makes this an absolute ground for refusal) give Her Majesty a veto? The conjunction used is "or" not "and", so perhaps Prince Harry did not need to ask his grandmother: but equally, his grandmother could have given consent and he would not have been able to veto it. But the tricky element of the trade mark is the word ROYAL, which isn't specific to the Sussexes - so consent from on high would be necessary.

The register shows that it took a long time (some six months) for the application to get as far as being published. However that seems to have been time taken up with assigning the application and dealing with the specification, not worrying about consent, which isn't mentioned.

There's also another interesting question, though perhaps unlikely to arise: if the application were to cover potatoes, which it doesn't, would it conflict with the Protected Designation of Origin JERSEY ROYAL? There is probably no reason why similar potatoes should not be grown in Sussex.

Now there is news (see The Guardian today, 11 January) of another troll application, this time for an EU trade mark - against which the same objection based on the word ROYAL would not run. If it isn't a bad faith application one wonders what would be, but bad faith is a difficult area of trade mark law (though it should be somewhat clearer after the Court of Justice opines in Sky v SkyKick, about which see my recent posting dated 16 October). But the Foundation is going to have to oppose it to get anywhere.

Thursday, 9 January 2020

EPO: Correcting payment of wrong appeal fee


I am not a patent prosecutor - my involvement in the patent world usually starts only once the things have been granted - but if you do prosecute applications for European patents, here's a decision which ought to be important. If you pay the wrong appeal fee, Rule 139 allows you to correct an unintentional underpayment, notwithstanding that it looks as if should only be concerned with errors in documents (as made clear in case G001/12): and better still it has retroactive effect, so your appeal shouldn't be out of time.

This was case J 0008/19 (29 November 2019, published 9 January 2020), in which an appeal against refusal of a division application was filed a few minutes before the grant appeared in the Bulletin. The Legal Board of Appeal found that the law was clear and an application ceased to be pending on the day on which the mention of the grant was published - the date, not the precise time, was what mattered, which could produce some harsh reaults. It meant that even though the appeal was entertained it didn't succeed because the effect of rule that pendancy ends on the day of publication - in effect at 00:00 hours on that day, regardless of the time of actual publication - was clearly that the divisional had been filed too late.
 

blogger templates | Make Money Online