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 - Advcocate 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 eneral 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 improtant) 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 te 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.
 

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