Monday, 25 January 2021

Travel Counsellors Ltd v Trailfinders Ltd: breach of confidence and the reasonable person

What happens when ex-employees of a competitor bring client information with them when they go to work with a new employer? In Travel Counsellors Ltd v Trailfinders Ltd [2021] EWCA Civ 38, the Court of Appeal held that an equitable duty of confidence on the new employer arises if a reasonable person would make enquiries about whether it is confidential, but the recipient fails to do so. 

The appellant argued that the judge had applied the wrong legal test in holding that the appellant owed an obligation of confidence to its rival in respect of the relevant information. According to the appellant, the equitable obligation would only arise if the recipient knew or had notice that the information was confidential. Whether it had notice of the confidential nature of the information has to be assessed objectively, by reference to a reasonable person standing in the recipient's position. And just because a reasonable person would make enquiries about whether the information (or some of it) was confidential was insufficient for an obligation of confidence to arise.

Arnold LJ, with whom Lewison LJ and Asplin LJ agreed, noted that there was surprisingly little authority. He cited his own judgment in Primary Group (UK) Ltd v Royal Bank of Scotland plc [2014] EWHC 1082 (Ch), as well as the Court of Appeal's decision in Racing Partnership Ltd v Done Brothers (Cash Betting) Ltd [2020] EWCA Civ 1300. On the basis of these cases he decided that:

... if the circumstances are such as to bring it to the notice of a reasonable person in the position of the recipient that the information, or some of it, may be confidential to another, then the reasonable person’s response may be to make enquiries. Whether the reasonable person would make enquiries, and if so what enquiries, is inevitably context- and fact-dependent. If the reasonable person would make enquiries, but the recipient abstains from doing so, then an obligation of confidentiality will arise

On the other hand, where the issue is accessory liability for misuse by another person rather than primary liability for misuse of confidential information, it may be necessary to show actual knowledge or turning a blind eye.

Cases like this are always fact-dependent, but the decision seems to place a significant burden on the recipient of information - although it does seem from the judgment that anyone offered information about clients in these circumstances really ought to sense that something is not quite right.

Florence Foster Jenkins and joint authorship

"Movie makers do lunch, not contracts", said now-retired* Judge Alex Kozinski in Effects Assoc., Inc. v Cohen, 908 F.2d 555, 556 (9th Cir. 1990), cert.denied, 498 U.S. 1103 (1991). The writers of screenplays are also disinclined to write contracts, it seems - although in the recent-decided case, Martin & Anor v Kogan [2021] EWHC 24 (Ch) (11 January 2021), it was perhaps excusable given that the two collaborators were also romantically involved. Mr Martin was (and is) a professional scriptwriter, and Ms Kogan an opera singer. 

Before they met, Mr Martin did not know of Florence Foster Jenkins, but she became the subject of the first of his feature film scripts to be produced, and the film was a great success. But was it really his script?

Mr Martin and a number of companies involved in the production sued for a declaration that he was the author of the screenplay and the sole owner of the copyright; Ms Kogan sought a declaration that she was a joint author and therefore joint owner of the copyright, and she also claimed damages for infringement against the various production companies. The case came before HHJ Hacon in the Intellectual Property Enterprise Court in 2017, and he found for Mr Martin. Ms Kogan (represented by, among others, Lionel Bently) appealed, and the Court of Appeal (which included Floyd LJ, a distinguished intellectual property barrister before he became a judge, who delivered the judgment of the court) decided that the first instance judgment was wrong. Unusually, because the Court of Appeal must avoid involving itself in detailed and complex re-asessments of factual findings by a judge, it sent the case back for a new trial before a different judge - specifying a full-time circuit of High Court judge. It ended up in the Chancery Division before Meade J, who became a High Court judge on 7 September last year.

The Court of Appeal found that the judge had made a number of errors. He had tried to draw a distinction between primary and secondary skills in assessing the parties' respective contributions, a distinction that the Court of Appeal found had no basis in law. He had also failed to consider the screenplay as a dramatic work, with many differences from a literary work.

The case raises a number of important and interesting questions, of which the most significant (for a copyright lawyer) is what sort of contribution to a collaborative work is going to make the second collaborator a joint author. The secondary question of how to work out what proportion of the copyright should belong to each joint owner is also pretty significant. There is also a lot more to the case - the judgment runs to 72 pages, although it is fact-heavy so it needs a lot of exposition.

Although the largest part of the screenplay had been written by Mr Martin, the original idea had been Ms Kogan's and she had also been involved in the characterisation and had contributed some technical terms. She had been involved in the work through several drafts and the judge was satisfied that she had made an authorial contribution to the work that was not distinct from Mr Martin's; in the judge's words: 'Trying to separate them would be like trying to unmix purple paint into red and blue' - like Kamela Harris's carefully-chosen bi-partisan inaguration outfit.

The judge decided that Ms Kogan was entitled to a 20 per cent share of the copyright. The starting assumption with joint copyright is that the parties will have equal shares, but clearly the parties' respective contributions here demanded something else. The judgment confirms that the parties hold their shares as tenants in common, not as joint tenants.

*Under a cloud, it's fair to say, but I think it's still acceptable to quote him especially since he's a master of one-liners.


Rabbit skin patent refused

An appeals board of the European Patent Office has upheld the refusal of a patent for "rabbit skin comprising biological active substance and its use" on public policy grounds. And, having read the first claim, I heartily approve; more than that, I am appalled not only that the application was ever filed (it was an international application seeking a European patent, by a Chinese pharmaceutical company) but that the invention was even devised. Claim 1 is just ghastly.

Article 53 (a) EPC tells us that European patents will not be granted in respect of (the draftsman must have been paid by the word, otherwise why not just "for"?) inventions the exploitation of which would be contrary to ordre publique or morality. (Note that it's the exploitation of the invention that has to be considered, not the invention itself, or the rights and wrongs of giving it patent protection) The applicant argued that in Decision T19/90, which I would have recognised more easily had the Board referred to it as Onco-Mouse, the suffering of the unfortunate animal had to be weighed against usefulness to mankind, a point reinforced by the EPO's examination guidelines (GII- 4.1) .

Unfortunately the Guidelines and the Board's decision fall into saying "ordre publique and morality", which is probably acceptable of the word "and" is construed disjunctively - but why on earth depart from the clear wording of the Convention? It is plain that the two concepts are independent, and the fact that the guidelines mention anti-personnel mines as an example seems to me to reinforce the distinction. Anyway, it appears clear enough that the Article does not intend that ordre publique and morality be cumulative requirements. But which was engaged in the present case? That isn't clear. The Board, and the Onco-Mouse board before it, seem to have treated ordre publique and morality as synonymous, which I don't think can be correct. Both decisions go on to balance the suffering of animals against the invention's usefulness to mankind - which is appropriate if ordre publique is being considered, because there are competing public policy goals involved, but surely not if you are considering morality, which has to be absolute.

In the end the Board came to what I think (as if anyone cares what I think) is the right decision, albeit perhaps not for the right reason. Its view was that the invention lacked the degree of usefulness needed to outweigh the suffering its exploitation would cause, because while it was the only way to produce the product, there were other products that do the same job. But I do wish it could have got there more directly.

 

Monday, 14 December 2020

How many patent applications succeed?

 The question came up in my weekly seminar for students doing the University of London International Programme LLB IP module, and the answer is interesting - and quite easy to find in Patent Office statistics. The most recent statistics, published here, are for 2018 (with 2017 for comparison), give a great deal of detail but the headline is:


Applications Filed

Applications Published

Patents Granted


2017

2018

2017

2018

2017

2018

United Kingdom (total)

13,286

12,843

6,007

5,899

3,260

3,001

I had guessed that the number granted would be around half those applied for - but as you see I was a long way out, 50 per cent out I suppose: the numbers go down roughly by half at each stage, and I hadn't included publication as a stage in my estimate. It demonstrates the effectiveness of the system at attracting in applications, even if they don't proceed to grant.

How many of those granted patents are valid is another matter, and estimates (which is all you can expect to find) are pretty high. Tallying the number of successful validity challenges in reported cases is instructive, though: when I last counted it up, a few years ago, I recall that over half of patents in infringement cases were held to be invalid. But that might be my memory - time perhaps to sift through reports on Bailii again.

And no doubt it would be instructive to look at the comparable figures for the EPO, too. Another day.




















Friday, 30 October 2020

Cookie law

EU law regulates the use of cookies, because unregulated they could be a major problem for privacy.
Tracking cookies note your browsing habits, making it possible for websites to serve up advertisements for products you have looked at on other sites. This could help you find the best deal and it ensures that advertisers get the best value from their advertising budgets, but many people feel uneasy about websites tracking their every online move, using the browser history for gain.
EU law recognises that users should have a right to understand what cookies are being used by the websites they visited, and how the information they gather is used. Users of cookie should also have the right to opt out collection if they wish. These principles are embodied in the so-called cookie law, Directive 2009/136/EC, which requires websites to obtain consent from users before setting cookies. And consent must be informed, so website owners muust tell visitors that cookies are being set, and what they will be used for.
So there are four things that website owners must do :
  • Tell visitors that the website sets cookies;
  • Provide detailed information about how data collected by cookies will be used ;
  • Allow visitors to accept cookies; and
  • Ensure that cookies will not be set on their machine if they opt out or refuse.
The law is not very specific about how precisely these things must be done.

Permitted cookies

Not all cookies pose privacy problems. Some are essential to the working of the World Wide Web. Cookies that are strictly necessary to perform the services requested by visitors are covered by an exception.

For example, cookies ensure that when a user shops online the contents of their basket are not forgotten before they check out. It would be absurd to ask customers they wish to opt out of that sort of cookie. The same is not true of cookies that customise the user's experience or tailor product suggestions.
Where websites require a high high level of secunity - for example, online banking - cookies that provide security features will be regarded as strictly necessary. However, it is not possible to be absolutely certain about when cookies are strictly necessary and individual Member States may have their own interpretations of the EU requirements.

The legislation is not restricted to cookies other technologies enable website owners to collect user information, many of which involve pushing files to the user's device. Any such technology must be disclosed, and needs consent from the user.

How users must be informed is not something the legislation specifies. It takes a general, high-level, approach. Popups and header bars are common solutions to the problem of informing visitors, and it is permissible to provide detailed information ellewhere - perhaps in the website's privacy policy. However, the opt-out setting has has to be provided in the pop-up a header bar or whatever you are using. If users do not opt out of cookies, this constitutes consent for the purposes of the cookie law. (although this can no longer be relied on to constitute consent for other privacy legislation).

Cookie information may be contained in the website's privacy notice or in the terms and conditions, but this is a less satisfactory technique. It is not generally the case that users are required to accept those  documents - as they have to do with cookies, of course. And consent to cookies has to be specific.

Consent must be obtained the first time a visitor looks at your site. Cookies should identify returning
visitors, so they will not be asked for consent again. Changes to the cookies will not normally require
con seut, but if significant changes to how the cookies work, or what you do with the information, have
been made new consents may be necessary and erring on the side of caution is always the best policy.
The information provided about cookies on your website should be linked from each page of the site. It should detail the types of cookie used (not every single cookie) and how the information from each of these categories is used.

Not required, but often prudent, is a description of what cookies are. Arguably, as users have become more familiar with the technology, the need to explain what cookies are has diminished.

Opting out

It is permissible to put the burden on the user to disable cookies in their browser settings. The alternative will be simply not to use the site, and this is probably not what the site's owner wants, so websites will often be set up to with hold cookies when the user chooses to opt out. This may mean that the user does not felly enjoy the website experience, and it is common to tell the user that by rejecting cookies they may lose some of the website's functionality.

Friday, 14 August 2020

Love, passion and ... IP: When a copyright work goes too far

It seems a long, long time since I wrote an article for publication. Books, blogging and courses seemed to take all the available time. So I am delighted to be able to say that the Journal of Intellectual Property Law and Practice will soon be publishing a rather insubstantial piece I wrote about that famous copyright case, Glyn v Weston Feature Film Company, in response to the editor's request for pieces on the theme of "Love, passion and ... IP". Well, it had to be done, and I hope people find it entertaining. It is also quite illuminating, as the judgment isn't actually what the textbooks mostly say it is (my own textbook included, though not any longer) and as the novel was the biggest-selling book of 1907, and made its author a star, it really ought not to be confined to the footnotes.

Read the advance summary of my article here.

Wednesday, 12 August 2020

Intellectual property course

 I've been presenting a two-day course on intellectual property for CLT for longer than I can remember, and before that (before I can remember?) three of the four sessions making up its predecessor (the other session that I didn't present being patents). Now CLT has announced that it is closing at the end of August (https://www.clt.co.uk/eng/insights/important-information-for-clt-customers/).

The next running of the course was to take place on 6 and 7 October, and there seems no point in changing that. I have the course, I have Zoom, and I even have some customers. The course is ideal for practitioners and inhouse lawyers entering the IP field, and is designed to cover everything you need to know about the whole field - or as much of it as can be squeezed into two days. If you would like to join the course, please get in touch either by commenting here or by email to peter@ipsojure.co.uk.

No summary judgment in software copyright case

Douglas Campbell QC, sitting as a Chancery Division judge, refused to give the claimant summary judgment in Oysterware Ltd & Intentor Ltd [2020] EWHC 2125 (Ch) (not yet on Bailii: I am indebted to the report from Practical Law) although it might have been another story had the claim been formulated differently.

The claimant supplied hardware, software, and support to the defendant. When the relationship came to an end, they sued for breach of contract, breach of confidence, and infringement of copyright, alleging that the first defendant had copied the design of what was referred "the Embedded Product." 

The Embedded Product was described as a single homogenous runtime image (a runtime image being, as I understand it, executable Java code that does not need an accompanying Java Runtime Environment distributed with it, which makes it much smaller and more easily distributed). It consisted of computer code that emanated variously from Microsoft, third party suppliers and the claimant, but the defendants characterised it as a general-purpose computer running Windows XP. Of course the claimant owned no copyright in the operating system or in the third party software, but that is not really the point; no doubt recognising this fact, they had claimed that copyright in the design of the Embedded Product, rather than copyright in the embedded product itself, had been infringed.

So what was that design? A former employee of the claimant gave evidence that the embedded product had to be considered as a whole (hence the "single homogenous" rubric). This embraced the specific design of the runtime image and the compilation of components. But the claim said that the runtime image was the copyright work; it said nothing about copyright in a compilation. (I find myself imagining the judge, indeed any judge, thinking about how he could have drafted the claim - I doubt they can resist doing so, although of course that in itself is not grounds for a decision.)

The employee explained that the design involved skilled choices, which sounds like a last-ditch effort to rescue a drowning copyright claim; crucially, that was a matter for the court. The pleadings had left subsistance as a matter that needed a trial, precluding summary judgment.

Whether what the defendants had copied was what conferred onginality on the Embedded Product was another matter that was that was not suitable for summary disposition. Because the claimant had failed to identify what the product's structure was and whether it involved intellectual creativity, they were not going to get summary judgment.

The same litigation has already given us a statement of the principles to be applied in an application to strike out: [2018] EWHC 611, which is also missing from Bailii.

Monday, 6 July 2020

Intellectual property and consumer welfare

Intellectual property laws exist as an exception to the basic principle that monopolies are bad. Well, that's how they found their way into English and UK law, starting with a carve-out from the Statute of Monopolies (1624) that allowed patents to be granted ‘for the term of 14 years or under hereafter to be made of the sole working or making of any manner of new manufactures within this Realm to the true and first inventor’. That being the case, shouldn't intellectual property laws be justified exclusively in competition law terms?

Competition or antitrust laws continually grapple with justifications for restrictions on competition, and therefore are a logical place to look for justifications for intellectual property - legally-granted monopolies of greater (patents) or lesser (copyright) potency. The problem is that competition law is a set of legal rules that embodies economic principles, and the two mix like oil and water: legal rules are ideally certain, while economic principles vary according to who is expounding them.

Recently, by which I mean for the last several decades, competition law has sought to maximise consumer welfare, as this article* explains: it explains this in order to criticise alternative populist approaches to competition law, but I'm not planning to get into that here, I'll save it for another day. The point is that when seeking justifications for intellectual property laws, and when considering the policy that should inform changes in the law (and the application and enfordement of the existing law), should the sole guiding principle be consumer welfare?

Framing the law protecting inventions and creations as part of the law of property muddies the waters. If copyright law were framed as a right to prevent unfair competition arising from copying of one's own creations (short-circuiting the creative process), or patent law as a right to prevent unfair competition by working a protected invention, there might be no such conceptual problem: but by founding these important rights in property theory we have lost sight of the consumer welfare justification. Perhaps we are in the realm of natural rights and John Locke rather than that of Jeremy Bentham and Utilitarianism (which seems to my mind very closely related to the consumer welfare model).

*Dorsey, Elyse and Manne, Geoffrey and Rybnicek, Jan and Stout, Kristian and Wright, Joshua D., Consumer Welfare & the Rule of Law: The Case Against the New Populist Antitrust Movement (May 1, 2020). Pepperdine Law Review, Vol. 47, No. 861, 2020, Available at SSRN: https://ssrn.com/abstract=3592974

Is there a copyright in a folding bike?

A folding bikes' drama has been taking place in EU Court of Justice in December 2018, under the case number C-833/18. (Peter posted about the AG's opinion back in February: No copyright protection for design dictated by function - Advocate General.)

As a background, the famous Brompton bicycle had a patent for its functional design, which has subsequently fallen into the public domain. The Brompton bike's functional shape allowed it to take three different positions: a folded position, an unfolded position, and a standing straight position.

Following the expiry of Brompton's patent, Get2Get began marketing a very similar bike - the Chedach bicycle. Just like Brompton, it could be folded into three different positions and generally looked very similar.

In November 2017, Brompton brought an action against Get2Get for copyright infringement, as well as the owner's non-pecuniary rights. Brompton asked for an order that Get2Get should cease its infringing activities and withdraw its Chedach bikes from the market.

Here is a test for you - can you spot 10 differences?



Image not found 
vs.
 Image not found


In its defence, Get2Get said that the appearance of Chedach bike was such only to ensure it could be folded into the said three positions and that the technical constraint itself dictated the appearance of the bikes.

Therefore, the argument in question was whether the three positions of Brompton bikes could be protected by copyright law as a shape.

The case was originally considered in the Companies Court in Liége (Belgium). Generally, shape copyrights enjoyed protection unless used purely to obtain a technical result. The same was true for the design rights (Article 8, Regulation (EC) No 6/2002). Brompton's case, however, fell into the grey area as it was not clear, whether such technical results could be obtained by other means than using shapes.

The questions, that the Belgian court posed in front of CJEU were as follows:

''(1)      Must EU law, in particular Directive [2001/29], 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:


  1. The existence of other possible shapes which allow the same technical result to be achieved?
  2. The effectiveness of the shape in achieving that result?
  3. The intention of the alleged infringer to achieve that result?
  4. The existence of an earlier, now expired, a patent on the process for achieving the technical result sought?"


Cutting our story short, after careful consideration of the relevant articles and case law (most importantly, its earlier decision in Cofemel, C-683/17), CJEU found that functional shapes are eligible for copyright protection if they are original works, resulting from the author's own intellectual creation, which will be for national courts to decide in future cases. The courts will now need to take into account the four points test above for assessing functional shape copyrights. The courts should also take account of "all the relevant aspects of the case, as they existed when that subject matter was designed, irrespective of the factors external to and subsequent to the creation of the product".

Although the decision in Brompton's case goes in line with an earlier ruling in Cofemel, one can argue, that the protection of technical design ideas could be detrimental to technical progress and industrial development (para 27 in the Judgment).

The biggest argument in Brompton's case, in my opinion, was the fact that there were already other bicycles on the market that used Brompton's folding positions but differed from it in appearance. This on its own demonstrated the creative choices in the shape of the bikes and, therefore, the originality for the sake of copyright protection.

For more opinions on the topic and further coverage, check IPKat and Kluwer Copyright Blog.







 

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