The Manchester Manifesto

The University of Manchester Institute of Science Ethics and Innovation has published a document entitled Who Owns Science? The Manchester Manifesto which has generated a good deal of controversy and discussion. It comprises only six pages of text, including a page of background and one of conclusions and signatories. The Manifesto has been received by the patent community as an attack on the patent system, and – they think – a misguided one. Read the response of the Chartered Institute of Patent Attorneys here.

The Manifesto questions the value of intellectual property in general, but is concerned mostly, perhaps exclusively, with patents. The problem, put briefly, is that we treat innovations as a form of private property, through the medium of the patent system. Is this an appropriate model for dealing with innovation? It;s a big an important questions, which unfortunately has become embroiled in a series of much smaller questions.

CIPA’s response was a thorough debunking of what the manifesto says about patents:

• Patents cannot be used to stop a product coming to market, because of competition laws and compulsory licensing (but surely that only means there’s a safety valve, and you need to know how to operate it and have the means to do so before that helps).
• Patents don’t prevent universities doing research (but is the research exemption clear enough, and widely understood?) And does it allow you to make the most of your research?)
• Institutions like Manchester University do rather well out of the patent system, and Manchester has a Technology Transfer office to deal with all the valuable stuff being produced.
• If Universities could not protect their work with patents, big business (what about small business?) could take a free ride (but some alternative method of protection could surely be devised to avoid this happenijng).
• The patent system promotes rahterh than inhibits knowledge-sharing, because patent applications are published as part of the process. (Yes, but patentees hold back as much as they can and keep that information secret.)

Joseph Stiglitz, one of the many signatories to the Manifesto, is also accused by CIPA of continuing to make misleading claims that human genes and other life forms can be patented. OK, as CIPA says no patent system actually allows thos, but they do allow claims that come close to having this effect (and applicants will do their best to get the most extensive rights they can). In the same way, software patents are not allowed but there are plenty of patents around that cover software. This is usrely a disctinction without a difference.

As for the contntious issue of access to drugs, the patent system has (as CIPA note) encouraged innovation – but blaming politics and economics for blocking access to drugs for poor countries is misleading. If the patents didn’t exist, there would be no tools for blocking access – and even with patents, the owners choose to use them in this way (perhaps driven by economics, and shareholder interests).

What about the main thrust of the Manifesto’s attach on IP? The fact is that patents are a major deterrent to people who fear that their activities might infringe. Manchester Universtity, and others, might be able to use the research exemption but if they get it wrong they might jeopardise a large part of what the Technology Transfer office has earned. Patents are frequently owned by large companies with whom you don’t want to pick fights. They don’t own science, but a lot of the territory around science has been privatised. It’s pertinent to ask whether placing knowledge in private ownership really is the best way to encourage innovation in the intersts of humnaity as a whole, or whether it places too much power in too few hands. As the modern saying goes, is the patent system fit for purpose? Or would something else – just touched on in the Manifesto, examined a few years ago in greater depth by the Royal Society of Arts – do the job better?

November 2009 IP update

Just in time before the end of the year - the November 2009 IP update podcast is now available from here, now complete with notes. Don't forget that if you would like an hour CDP for listening to the recording you can do if you obtain it from www.cpdchannel.com, though it isn't uploaded to there yet.

Digital Economy Bill

It used to be the case than blogging was the most prolific of the myriad time thieves I had to contend with (ever since I removed the standard Windows games from every computer to which I have access). Now, newer time thieves leave litle opportunity to keep the blogs up to date. Yesterday, in between picking up useful bits of information from Twitter, I chatted on Skype with Ron Coleman (www.likelihooodofconfusion.com) and simultaneously with Güvenç (http://www.europeanlawyersevents.com/) in Ìstanbul on Facebook. And I did some work. It's busy at present, which is my excuse for missing this topic.

The Digital Economy Bill had its second reading in the House of Lords (where it was introduced) last week, a fact of which I was aware (in particular because I checked what it proposed about orphan works). I see it attracted an extraordinary outburst of criticism, reported here in The Guardian (Google tells me there are 69 other articles, which I suspect is only the tip of the iceberg). The good old Electronic Frontier Foundation has a lot to say about it too - including asking us to write to our MPs. So what is all the fuss about?

Let's go back to orphan works for a moment - the great non-problem, as I believe it to be, of copyright law. The Bill's solution is to give the Secretary of State power to make regulations to deal with it. Nothing unusual there. But the same undemocratic approach is prescribed, in clause 17 of the Bill, for the whole of copyright law. Under the heading "Prevention or reduction of online infringement of copyright" (who can argue with that?) the Bill provides that a new section 302A be inserted in the poor, long-suffering, much hacked-about, Copyright, Designs and Patents Act beginning:

(1) The Secretary of State may by order amend Part 1 or this Part for the purpose of preventing or reducing the infringement of copyright by means of the internet, if it appears to the Secretary of State appropriate to do so having regard to technological developments that have occurred or are likely to occur.

The following subsections contain nothing to give the concerned reader any comfort, except that the regulations will have to go through the affirmative resolution procedure. Most secondary legislation is subject to the negative resolution procedure, enabling Members of Parliament to stop it - although my experience, of trying with the aid of a friendly MP to stop the Restrictions on Agreements (Manufacturers and Importers of Motor Cars) Order 1982 (S.I. 1982/1146) is not encouraging. I recall that the draft order contained a manifest error - I forget what it was, something fundamentally wrong with the terminology: perhaps it should have referred to "passenger cars" not "motor cars" and consequently was ultra vires because it went further than the Monopolies and Mergers Commission report on which it was based and caught other vehicles, such as coaches, that weren't intended to be caught. Anyway, nobody seemed bothered, so the negative resolution procedure didn't strike me as very helpful.

I understand that Parliament does not have enough time at its disposal to engage in detailed debate about everything it needs to consider, and that copyright law needs to be kept up to date as technology changes. Empowering the government to make necessary changes has a certain seductive attraction, although so much copyright law comes from the European Union these days that one wonders how much legislative freedom the government has. The affirmative procedure contains safeguards, of course, but I'm surprised to note that Parliament cannot amend a Statutory Instrument and the last time one was annulled was 1969. Does that look like an effective restraint on the powers of the Secretary of State - even without getting personal about the present occupant of that position, the chair of the British Youth Council back in the days when I was active in it, whose CV also includes a stint as a Commissioner from which no doubt he remembers that EC law occupies large parts of this field? No wonder the clivil libertarians as well as the Internet giants - Google, Yahoo, Facebook and eBay - are up in arms about it.

Treaty of Lisbon

One of my pet gripes has been overtaken by events, at long last: with the Treaty of Lisbon coming into operation today, Community law is replaced by European Union law - which in common usage (even among lawyers who should have known better) it did a long time ago. The Court of Justice becomes the Court of Justice of the European Union (though Euraotom still exists, and it has jurisdiction over the Euratom treaty) though no doubt people will continue to irritate me (and Swiss, Norwegians, Ukranians, Russians, Byelorussians, Modovans, Icelanders, and others, even Turks) by calling it the European Court of Justice. The old name, and the term "Community law", will still be correct for anything that happened yesterday, or earlier.

The Court of First Instance has become the General Court, making it even less obvious what it's for - rather like the Office for Harmonisation in the Internal Market, which provides so much of its work.

Given that I still think in terms of Article 30 to 36 (though I have adjusted to Articles 85 and 86 becoming 81 and 82), I imagine I will be getting the terms wrong for some years yet. But how nice finally to live in a European Union.

Orphan works legislation on the way

When the Gowers Review recommended that legislative and administrative action be taken to deal with the problem of orphan works - works that appear to be out of copyright but for which no author or copyright owner can be identified - I recall that many practitioners said "what problem?". It seems to me that if you can't identify who to ask for permission to use a copyright work, it's not going to be a work that commands a significant royalty and therefore your exposure is small. That's advice that I think a lot of clients have had from their lawyers over the years - perhaps put aside a contingency fund in case someone appears with a claim for royalties, but it's not likely to come to much.

The British Library evidently thinks otherwise, according to a pretty nonsensical press release on the subject, saying "Orphan Works are a vital stepping stone in the copyright roadmap". It's a sad day when a cultural institution of such importance as the BL produces such a horribly mixed metaphor. And I'd have thought that orphan works were more like roadworks or landslides than stepping stones.

The same press release tells us what the BL's Principles on Copyright Law are. One of them states: "Researchers and libraries need to be able to make available 'fair dealing copies' of anything in their collections, including sound and film recordings that Fair Dealing does not currently relate to." Surely the British Library understands that a proposition is a bad thing to end a sentence with? And what do they mean by "Fair Dealing" (the capitalisation makes it seem more important, doesn't it?)? Section 29 is limited in this way in its scope, but section 30 isn't, so this sweeping statement about fair dealing is only partly correct. And section 29, now that not only does study have to be private but also research must be non-commercial, permits very little, begging the question of what on earth a "fair dealing copy" might be. I thought the Act was alredy pretty accommodating when it came to libraries making copies for those purposes, where the library user (I should probably call them a "customer" or "client") gives the prescribed certificate.

Not a development that I will get excited about. Not, at any rate, in a positive way.

One can never have too many patent judgments ...

Teva UK Ltd v Merck & Co, Inc [2009] EWHC 2952 (Pat) (20 november) is one of those patent cases that looks as if it will teach you more about the science involved (in this case, treatments for glaucoma) than about the law. it involves questions about amendments to a patent, added matter and inventive step, runs to 164 paragraphs and concludes (in the judge's precise words):

i) the Patent as proposed to be amended is invalid for lack of inventive step;

ii) had the Patent as proposed to be amended not been invalid, I would have allowed the amendment to claim 1, but not the amendment to claim 18 (which adds matter);

iii) unamended claims 1 to 6 and 8 to 9 lacked inventive step;

iv) unamended claim 20 added matter.

I'll see if there is more to it than has met my eye so far.

What price an intellectual property indemnity?

Coincidentally, I spent Tuesday morning lecturing on software licences, including a long discussion with one of the five people on the course about how to deal with third party software incorporated into what the software industry is pleased to refer to as a "solution". I suggested that the indemnity is the important thing to consider. Today I find The Codemasters Software Co Ltd v Automobile Club De L'Ouest [2009] EWHC 2361 (Pat)- a decision from 17 September by Arnold J - considering the effect of an indemnity clause, although not in a sofware licence.

The claimants, to whom I'll refer as Codemasters (I don't like the fashion for filling articles and blog postings with defined terms like a contract, but I'll resist the temptation to call them Reg, because it's not their name - Robyn Hitchcock fans will understand the reference, though how many of them will read this?), sued ACO who are the organisers of a certain well-known motor race - and, I learn from the judgment, an associated series of races. My friend Jacques - I wonder what became of him? perhaps I should look on LinkedIn and so on - used to be a member of the club and marshalled at the Vingt-Quatre Heures. Anyway, what happened was that Codemasters, who produce computer games, entered into an arrangement with ACO which included - or purported to do so - permission to include representations of certain motor cars that might be found competing in the events. As far as tehar manufacturers were concerned, however, ACO had no right to do so. Codemasters have obtained, or are negotiating to obtain, the permissions they need but unsurprisingly are looking to ACO for redress.

The case concerned the interpretation of the indemnity clause, which read:

10.3 Each party (the 'Indemnifying Party') will indemnify, defend and hold harmless the other party and its affiliates, parent companies, subsidiaries, and their respective directors, officers and employees, from any and all claims, causes of action, suits, damages or demands whatsoever, arising out of any breach or alleged breach of any agreement or warranty made by the indemnifying Party pursuant to this Agreement.

The warranty given by ACO read:

10.1. ACO represents, warrants and covenants to Codemasters that:

(i) has the legal right to enter into this Agreement, to fully perform all its obligations hereunder, and to grant all rights and licenses which it is granting under this Agreement, free, clear and unencumbered, and without violating or breaching the legal equitable or contractual rights of any person anywhere in the world;

(ii) the use and reproduction of the Endorsements as authorized hereunder will not infringe, violate or breach any intellectual or industrial property or moral right (or any rights of a similar nature) anywhere in the world.

"Endoresements" included "Car manufacturer names, marks and car designs for all participants in the Championships". ACO argued that the indemnity only covered claims made under other agreements - not under teh Agreement itself. That sounds dodgy, because it goes against what most people would assume was the whole purpose of the Agreement and the indemnity clause, but in the judge's words "it is common ground, and in my judgment rightly so, that clause 10.3 is, on any view, not felicitously drafted". He went on to observe, in a nice phrase, that "it is easier to accept apparently uncommercial consequences if a clause is clearly drafted than if it is not". The trouble lay in those words "pursuant to" near the end of the clause. Oh, how I loathe those compound prepositions that most lawyers find irresistable! A simple "in" would have avoided the ambiguity - as, in the other direction, would "separate from and in consequence of", a double compound preposition ... both of which interpretations were possible, according to the judge. Anyway, he didn't see any compelling reason to prefer one construction over the other, so he stood back and considered the purpose of the clause and the commercial effect of the rival interpretations: and he thought that its purpose was reasonably clear:

It seems to me that the purpose of the clause is to provide an indemnity against claims and demands arising out of, so far as Codemasters are concerned, its exploitation of the rights granted under the Agreement. In my experience, it is common in intellectual property licence agreements, though by no means universal, for the licensor to indemnify the licensee against claims by third parties that exploitation of the licence rights has the consequence that the licensee has infringed, or is alleged to have infringed, the third party's rights.

The judge considered why an indemnity to that effect might be included - indeed, is commonly included - in such contracts, and opined that one of the reasons the indemnity was not satisfactory as it stood was that it tried to be mutual. Examples of the sort of thing that the indemnity might cover in the opposite direction were, he thought, "distinctly unimpressive". Other arguments also failed to impress, and he concluded that teh relevant clause was to be construed in the manner contended for by the claimaints. It's probably what most of us expected when we started reading the judgment, but the comments on drafting are well worth remembering.

Representation before the Community courts

Case C‑59/09 P is an appeal to the Court of justice of the European Community by Hasbro against what it argued was a decision of the CFI refusing to allow it to be represented in other proceedings before the court by a Trade Mark and Design Litigator. The court reckoned that the letter saying that Hasbro could not be so represented was not a decision which could be the subject of an appeal, within the meaning of Article 56 of the statute of the Court of Justice. It does not decide that a Trade Mark and Design Litigator cannot represent a client at a hearing (though I suppose that in practice because the original decision stands that is the practical effect of it), nor does it address the underlying question of whether such a person is a lawyer within the meaning of Article 19.

Jonathan Goldsmith has written about the decision recently on the Law Society Gazette blog (here) and incurred the wrath of my old friend (I mean longstanding) Tibor Gold. I find my self with no strong views about this, but don't get me started on the use of the title "atorney" ...

Moral panics and the Copyright Laws

A lecture by Bill Patry, Google's senior copyright counsel, to Benjamin N Cardozo School of Law in New York on 12 October. Well worth an hour of anyone's time to listen ...

Court of Appeal on disclosure

The Court of Appeal's judgment in Leo v Sandoz is out, and written up by the IPKat here. Floyd J had found the patent valid, an it was common ground coming into the appeal that if that were the case it was infringed by Sandoz's product. Validity was the only issue for Jacob and Patten LJJ, and that turned first on whether the claimed product was novel over an earlier patent for a different use of the same medicine, and second on whether it was obvious because a person skilled in the art (Jacob LJ pointed out that this would in practice be a team of people) would have "come upon the invention without any expectation of successfully finding a better product." Such an obviousness attack should, he said, be scrutinised with great care: "one must be very confident that the steps said to lead to the discovery of a new and beneficial product 'by accident', as it were, were at the least really likely, almost mandated. If you need to do research to find an invention then, for a finding of obviousness, that research must be of a kind which a skilled man would do, not which he might do" (emphasis added).

The appeal raises difficult issues about the principles on which appeals should proceed, too. The appellants would only succeed if they could show that "the decision of the lower court was wrong" (CPR Part 52.11(3)). The attack on the judge's findings of fact, evaluation of the evidence and value-judgement conclusions amounted to one of "perversity" - that no judge could reasonably have reached them on the evidence. The application of the relevant CPR to such cases was considered by the Court of Appeal in more detail and some stringency in Merck's Patents [2003] EWCA Civ 1545 [2004] F.S.R. 332 at [62-71] per Buxton LJ and [71] per Sir Andrew Morritt V-C. The Biogen principle [1997] RPC 1 at p.45 per Lord Hoffmann is also relevant in an obviousness case: "The Judge's conclusion must be reached as an overall assessment of the relevant evidence, both technical and non-technical. If he has made such an assessment, weighing all the factors involved, then it will be difficult indeed to show that he has made an error of principle", according to Jacob LJ. Unsurprisingly, he did not consider that the appellant had succeeded in climbing the mountain that this lot placed in its way, and Patten LJ agreed.

October 2009 IP update

I've recorded the IP update for October, available here with written notes here. The sound file runs for about 48 minutes.

You will shortly be able to get CPD points for listening to this and doing a few multi-choice questions, but you'll have to go through CPD Channel and pay a modest fee to get the points.

If you have any comments, I'd be delighted to receive them. At least, I hope I would be delighted - even if your comments are critical, I would be delighted to know that you have at least listened ...

Too many law reports

I have been looking at the Incorporated Council of Law Reporting website, as good a way to pass some time as any other ... and chatting to Charon QC this morning on the phone I recalled something that I thought I had read on a page on that site: "The almost universal view among judges in England is that too much, rather than too little, is reported."

I find this when I look at the reports pouring out of the Patents Court and elsewhere and appearing on BAILII. To make matters worse, they often run to hundreds of paragraphs these days - and you plough through them - or even just jump to the end - only to discover that there isn't anything important in them. OK, you might have picked up a few useful bits of trivia about recombinant DNA or potato separators along the way, but nuggets of law were what you really wanted. Maybe I should confine myself to reading Court of Appeal judgments in future? But a diet of nothing but Jacob LJ might be a bit too rich, albeit simultaneously enlightening and entertaining.

Domain names: a passing off and trade mark infringement case - just like old times!

Wasabi Frog Ltd v Miss Boo Ltd is an old-school passing off and trade mark infringement case to deal with a domain name problem. Just the sort of case that has hardly been seen since dispute resolution procedures were introduced, ten or so years ago. It shows that there is still room for good old-fashioned litigation, although Jane Lambert has raised the important question of whether the parties should have explored other methods of dispute resolution. It looks to me as if taking this expensive route enabled the claimant to get what it needed in very short order - the defendant's trade mark application was published in late August, and by early November they have an injunction. And of course the injunction runs in the world of bricks and mortar retailing as well as on-line, so using Nominet's DRS wouldn't have been as effective and hardly any quicker. Using the DRS (or another registrar's similar procedure, such as the UDRP) is fine for dealing with domain name registrations, but where a trade mark infringement is concerned something else is probably needed.

Trade mark case delayed by Christmas

Legal Week reports that a trade mark infringement case between Asda, the supermarket chain (owned by Wal-Mart) and Specsavers, the high street optician chain, has been delayed to allow for the fact that as a term of their appointment to Asda's panel, Pinsent Mason had to agree that lawyers working on the account would work for three days over Christmas stacking shelves.

While I am sure that the lawyers will get to know their client better as a result, I'm not sure that stacking shelves will teach them much about the business. If the report is accurate - and I do treat everything I read in the press with suspicion - it seems to me that no-one's interests are being served save those of Asda's shareholders. Junior lawyers (it doesn't seem to apply to partners) lose days over Christmas, prospective part-time workers lose the opportunity to earn some money, and Specsavers have to wait for their day in court. If Pinsent Mason's social responsibility efforts are reduced to the extent that they are obliged to give time to a client, that would be the icing on the cake.

Potato separators: better than slurry ...

Long ago, when I first discovered that area of law that had recently become known as intellectual property and found myself embroiled in issues relating to industrial designs, the arguments revolved around motor vehicles - Morris Marina exhaust pipes, Transit van panels, and even copies of the Caterham (né Lotus) 7. then along came unregistered design right, and we moved into the field of agricultural machinery - pig fenders and slurry separators.

Today the judgment of Floyd J in Grimme Landmaschinenfabrik GmbH & Co KG v Scott (t/a Scotts Potato Machinery) [2009] EWHC 2691 (Pat) has been published. The machine in question is a potato separator - preferable in so many ways to a slurry separator, although I don't suppose it's necessary to bring them to court - and there is an unregistered design right angle as well as a patent angle. UDR had in fact expired at the end of last year, but the judge found some infringements: he also found some infringements of the patent, at the same time as holding that the first claim was invalid for obviousness.

Another brick in the wall

Years ago, I felt offended by the assumption in some quarters that intellectual property rights whould have holes knocked in them to permit what might broadly be called copying. I reasoned to myself, and anyone else who would listen, that it was right that someone who had created a design or whatever else it might have been (but in my life it was usually designs) should have exclusive rights over it.

It all came about because I was working in the motor industry and my sympathies (though I should have been neutral) tended to lean towards the car manufacturers. On what basis did the then BL or Ford or any of them owe the parts makers a living? They had taken the trouble to design the cars, and create the market for replacement parts (and for original equipment components too, of course). There appeared to be a lot of potential free-riders hoping to take advantage.

Whether I was correct or not, Parliament was determined to make the spares market free - well, the government was, and perhaps Parliament went along with it, despite my working the words "fair weather umbrella" into a second reading speech I drafted for one MP friend. Consumer benefit was assumed to lie in cheap spare parts. The House of Lords had already done the damage in BL v Armstrong, I suppose, so Part III of the Copyright, Designs and Patents Act was just the icing on the cake. I don't think the change has caused the demise of the car industry - though something seems to have damaged it in the intervening years.

More recently, I have been railing against intellectual property absolutists. Today I read that Lego are off to the Court of First Instance to argue that they should be entitled to keep a four-by-two plastic brick on the CTM register. Is this another instance of absolutism, of overreaching intellectual property rights that should be trimmed back? Or is it a legitimate way to try to stop free riding?

One man's meat, as they say ... To me, Lego is Lego and should be in perpetuity. I am young enough to have played with it as a child, and whatever has come along since simply isn't the real thing to me. Any argument that lego still deserve protection for their innovation is hollow, of course: they have had fifty or more years to cover the development costs and make a healthy profit. But I do find the sight of copyists and imitators claiming to be entitled to avail themselves of someone else's brilliant idea unedifying. Is a trade mark the right way to protect something like this? Well, to my mind the issue has transcended design or copyright law (even patent law) and the product is serving a trade mark purpose. It embodies Lego's reputation, and so long as they maintain that reputation and teh shape trade mark speaks so clearly about the origin of the product, it should be protected.

IP litigation costs

It is trite to say that IP litigation is horribly expensive. In Ungar v Sugg (1892) 9 RPC 113 at 116-117 Lord Esher MR famously said:

Well, then, the moment there is a patent case one can see it before the case is opened, or called in the list. How can we see it? We can see it by a pile of books as high as this [holding up the papers] invariably, one set for each Counsel, one set for each Judge, of course, and by the voluminous shorthand notes: we know ‘Here is a patent case.’

Now, what is the result of all this? Why, that a man had better have his patent infringed, or have anything happen to him in this world, short of losing all his family by influenza, than have a dispute about a patent. His patent is swallowed up, and he is ruined. Whose fault is it? It is really not the fault of the law; it is the fault of the mode of conducting the law in a patent case. That is what causes all this mischief.

Wouldn't it be great - for lawyers whose clients have such difficulty affording IP disputes as much as for the clients themselves - if insurance were available against IP litigation costs? There are providers, but the policies do not come cheap - but a new entrant might be changing that. Alpha Insurance Facilities offer cover that is not prohibitively costly. I remain to be convinced, and it's an area I ant to learn a great deal more about.

Res judicata in OHIM?

Thanks to the Inner Temple Library's current awareness blog, and the WLR Daily (the Daily Weekly?) whose website doesn't sem to be working at present (the whole ICLR site seems to be down), I learn of a recent CFI decision in Case T-140/08 Ferrero SpA v OHIM. The Court observed that the principle of res judicata does not apply in OHIM proceedings:

In proceedings concerning the alleged invalidity of a community trade mark, departments of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) are not bound by earlier final decisions in opposition proceedings, since no force of res judicata attaches to such decisions.

Is this surprising? I don't know, but I guess I had assumed that earlier decisions would provide some sort of precedent. I suppose the fact that they are first instance decisions explains why they are not binding. Interesting.

EBay fake seller faces jail under Trade Marks Act - good!

The Hayling Islander reports that a man who has flogged rather a lot of counterfeit golf clubs on eBay faces three years' jail if he doesnt comply with the terms of a seizure order. He pleaded guilty to eight offences under the 1994 Act, and then the Proceeds of Crime Act was brought to bear - he has to repay £105,000, and if he doesn't manage it he could be sent to prison (always assuming space can be found for him).

Probably enough rogues selling illegal items on eBay to fill a few more prisons - which would probably enable the government to hit some more targets, tick some more boxes.

Exclamation mark not a good trade mark

A few years ago, perhaps, it wouudn't even have needed saying, but seeing someone trying to register just an exclamation mark (and an exclamation mark in a box) as a trade mark is no longer a matter for astonishment. Thank goodness, the Court of First Instance has upheld the Office for Harmonisation in rejecting this nonsense.

The cases are Case T-75/08 and Case T-191/08, both Joop! GmbH v OHIM, available only in French and German. Never mind, there isn't much to read, and I find this stuff as good to read in French as in English ... I stay awake better, have to concentrate harder. The Court decided that the trade marks were non-distinctive under Article 7(1)(c) of the CTM regulation. I'm releived.

Not only were the applicants seeking to register a sign that must surely be allowed to remain part of commercial free speech, and I can't believe could ever, in a month of Sundays, come to distinguish their goods from those of others - but they were trying to do so for a vast array of goods. Why? Because they could, no doubt. And if it's possible, businesses have to try to secure what they can before someone else does.

This landgrab is an unedifying spectacle. It's leading people to register things that they aren't een using as trade marks - and never will. I have a client at present facing opposition from a big company with a formidable collection of trade marks. Their brand combines an adjective and a noun, and taken together it's a pretty good two-word trade mark. It's what they call the company, and it's what they call the product - and the adjective, alone, is neither, but they have registered it as a trade mark anywway.

Being charitable, I have to assume that Big Trade Mark Owner has grabbed the adjective registration to ensure it isn't available for anyone else to take, and create problems for them. but there are many, many others who would want to use that ordinary English word, perhaps with another noun or in some other way that's never going to cause confusion. maybe, I hope, we'll be hauling them to the Board of Appeal or the Court in due course, following the course taken with Joop!'s misguided-but-understandable effort.

Yesterday's courses on trade marks and designs

I spent yesterday presenting courses on trade marks and designs for CLT, in London. Some of the delegates suggested that copies of teh slides would be useful - I don't like people following my talk, or even worse getting ahead of it, with a printed copy of the slides, but after the event is a different matter, so here is a pdf of the trade marks slides and here are the designs ones.

Securitisation of IP, or IP as security?

I spent Wednesday afternoon at a seminar – Jeremy’s seminar, I almost called it, though I suspect he would claim no proprietary rights in it – on IP rights and the UNCITRAL secured transactions project, documents about which are available here. To cut a long story short, UNCITRAL is working on a Legislative Guide on Secured Transactions, and has been for years. There’s a draft supplement to the Guide dealing with security rights in intellectual property, and work in that area is intended to deal with inconsistencies between the Guide and IP law.
If there are gaps in my understanding (and there certainly are), it’s my fault for going to a seminar without doing much background reading – a habit I fell into at university ... OK, let’s be more precise: I did no background reading, except for glancing at a four-page document put out in advance of the seminar on the tube to Holborn; and while I am confessing, I got round the problem at university by not going to the seminars for which I hadn’t done the reading, which is quite an elegant solution but probably wouldn’t get me very far in the modern world. There’s a lot to read on the subject on the IP Finance blog if you are more diligent than I was.
The note prepared for the seminar identified four areas of inconsistency: integrity of licence provisions, choice of law, the concept of “ordinary course of business” licences and continuous filing obligations. I formed the impression that some at least of the problems might stem from a lack of understanding in some quarters of what intellectual property is all about (and, mounting my favourite hobby-horse, the more fundamental problem that talking about IP can lead to an insufficiently nuanced approach to the individual rights to which the collective name applies), while there also seemed to be some confusion about the differences between secured transactions and securitisation. IP has been used as security for a long, long time with no particular difficulties – indeed, I have today been working on a deed of release of a debenture which charges, inter alia, “all letters patent, trademarks, service marks, designs, utility models, copyrights, design rights applications for registration of any of them and the right to apply for them in any part of the world, In addition [sic] moral rights, inventions, confidential information, know-how and rights of a similar nature arising or subsisting anywhere in the world in relation to all or any of the above (whether registered or unregistered) now or any any time afterwards belonging to the Company”. But that’s not the same as securitisation – a point made by the chairman of the seminar, Prof Graham Penn, who explained (and for this I for one was grateful) that it refers to bundling together a number of assets, vesting them in a special-purpose vehicle (an SPV: nothing to do with motorised variety of vehicles) and hawking the bundle around as security for bonds. Which is what a lot of allegedly clever people did with sub-prime mortgages a while ago, I think, and what David Bowie did earlier with his copyright, which is why he has been blamed by some for the state of the global economy.
I can see that there are problems to do with the rights of licensees when IP is used as security, or (even worse) when it is securitised. The problem is greater, indeed, in a securitisation transaction, because what is being charged is the royalty flow and the integrity of the licences becomes crucial to the ability of the pack of cards to remain standing. If the licensee could terminate, the security would be close to worthless. The secured creditor cannot obtain greater rights than those of the chargor - the basic principle of nemo dat should see to that. The terms of the licence must apply to the secured creditor in the same way that they apply to the chargor (or grantor), and can't be changed without the grantor's consent. But does the licensor retain the ability to terminate the licence (in the event, perhaps, of breach or insolvency of the licensee)? The right to assign intellectual property rights (which seem to include the rights of a licensee) are, according to the UNCITRAL documents, not affected by the law on secured transactions. Quite, right, I think - surely this is something that the covenants need to cover?
Can the licensor have priority over a licensee's secured creditor for the payment of royalties? This does seem, properly, a matter for secured transactions law. The UNCITRAL Working Group floats the idea of an "acquisition security right", but isn't it also something that can be dealt with adequately in the covenants?
The document that creates the charge should also be able to deal with choice of law problems - although, clearly, there needs to be something to prevent rules applying that cold thwart the parties' choice, and of course the weaker party might have no alternative but to accept the offer it cannot refuse. This is probably an area on which international agreement is needed.
The difficulty with having security rights over IP is that a licensee wil take the licence subject to the chargee's rights. It's often inconceivable that the licensee will carry out investigations - for example, the licence might be a software licence which the licensee isn't even likely to read. The Working Group suggests protecting purchasers (my choice of word, though I don't like to use it in this context) of standard-form licences by creating a class of "ordinary course of business" licences which would preserve the rights of the licensee. Provided it is strictly limited to these easy cases, such a development should deal with the problem.
What about registering intersts in IP rights? In the UK, it is possible to get something on the register - but of course this doesn't help with copyright or design right (or, now, Community unregistered design right), and it duplicates the content of registers of security interests. If such registration were compulsory, in which country's register should the interest appear? All of those where IP rights are charged? And how to deal with copyright and other unregistered rights?
I wondered at one stage whether this was just UNCITRAl doing what any bureaucracy is bound to do - find work for itself. Some of the points under discussion don't seem to me to contribute anything to the sum of human happiness. But wider ability to raise finance on the security of intellectual property (whatever that is), including royalty streams from licences and sublicences, is hugely important to the owners of such property - and if people are prepared to lend the money, should we be picky about whether the law should accommodate it or not? The attraction - or perhaps I should say the advertised attraction - of improving the acceptablity of IP as security is said to be the benefit that this will bring to developing nations. I would however hate to see them fall deeper into the debt trap as a result, like sub-prime borrowers enticed into taking out mortgages they could not afford. Is this really the right moment for the IP world to be entering the dodgy territory of secured lending - or, worse still, securitisation?

A substantial part of the Community

There are some strange things in European Community trade mark law, both the Regulation and the Directive. That much became apparent to me this morning, reading the first few pages of the trade marks chapters in Llewellyn & Cornish. Then along came the Court of Justice's judgment in Case C-301/07 Pago, which in itself doesn't seem very weird but which certainly has some weirdness around it.

Pago involved the Austrian fruit drink maker - yes, the famous one, obviously. I'm sure I have seen this product somewhere. Faced with what it optimistically reckoned to be a trade mark infringement, in the sort of absolutist way trade mark owners seem to look at this sort of thing, it claimed that Tirolmilch - who had the temerity to sell a rather different drink in a bottle not unlike that depicted in one of Pago's registered trade marks, the exiguous similarity evidently not counteracted by the application of the name LATELLA to the bottle - was infringing under Article 9(1)(c) of the Community trade marks regulation.

That article is, of course, the one that establishes dilution s a form of infringement. A trade mark can only enjoy its protection if it has a reputation. Pago's trade mark had, they thought, a reputation, but not outside Austria, so was that enough? And (the referring court went on) if it wasn't, could the trade mark owner have a remedy in Austria but not elsewhere in the Community where the mark did not have a reputation?

Call me old-fashioned, but I am baffled by the idea which the law seems to allow for of a trade mark without a reputation. How can a trade mark function without one? The law doesn't ask for any particular amount of reputation - it's not as if it has to be a well-known trade mark, which of course would open up another can of worms. In fact, the French version of the Regulation says "jouit d'une renommée dans la Communauté", and une renommé means (my fat Collins-Robert dictionary tells me) means fame or renown, and although "reputation" is also given as an alternative it seems to me that the French version is asking for something a bit stronger. Especially as all trade marks have some degree of reputation, even if it is vanishingly small.

The words "in the Community" also arise in Article 50, which deals with grounds for revocation. If the mark has not been used in the Community for five years , it is vulnerable. But does it have to be used throughout the Community, or will use in part of it be enough? And if part, does it have to be a substantial part, and if so what is a substantial part? It seems to me that the question is, in effect, the same.

In Case C-375/97 General Motors the Court decided (in a case concerning the Directive and the harmonised Benelux law) that a reputation in the Benelux, or part of the Benelux, was going to be good enough, and in the nature of these things the Court didn't have to go further - it deals in matters of principle, which the national courts have to apply. In Pago, the Court decided - coming perilously close, I would have thought, to getting involved in the facts - that Austria was a substantial enough part of the Community, and if there was a reputation there that was sufficient for Article 9(1)(c) to be engaged. By extension, use in Benelux (or in just one Benelux country), or in Austria, would be sufficient to overcome a non-use challenge. I don't like it.

Community trade marks already tend to be too broad in their scope, because the Office has a liberal approach to specifications - basically, applicants can file for whatever they like and try to establish enough use before the five years is up (whereas in the UK there could be a "bad faith" challenge). In principle, one of these vast registrations can be secured by using it for goods or services within the specification in Luxembourg, or perhaps somewhere with a similar population (just under half a million): Cumbria, perhaps. Which makes me think that CTMs are grossly overpowered and offer far too much scope to absolutists to monopolise commercial signs over unjustifiably wide territories.

In the single market, the importance of national boundaries is greatly reduced - but Pago shows that national markets remain important, and why should the trade mark owner enjoy the powerful rights given under 9(1)(c) in places where his trade mark remains unknown?

Google Adwords and the Court of Justice

The sale by Google of so-called Adwords does not infringe corresponding trade marks, according to Advocate General Poiares Maduro in his opinion issued today. You might wish to jump straight to the conclusion of the Opinion, the last pargraph - nuumbered 155: in fact, I'll paste it here.

155. In view of the above, I propose that the Court state in answer to the questions referred by the Cour de cassation:

(1) The selection by an economic operator, by means of an agreement on paid internet referencing, of a keyword which will trigger, in the event of a request using that word, the display of a link proposing connection to a site operated by that economic operator for the purposes of offering for sale goods or services, and which reproduces or imitates a trade mark registered by a third party and covering identical or similar goods, without the authorisation of the proprietor of that trade mark, does not constitute in itself an infringement of the exclusive right guaranteed to the latter under Article 5 of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks.

(2) Article 5(1)(a) and (b) of Directive 89/104 and Article 9(1)(a) and (b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark must be interpreted as meaning that a trade mark proprietor may not prevent the provider of a paid referencing service from making available to advertisers keywords which reproduce or imitate registered trade marks or from arranging under the referencing agreement for advertising links to sites to be created and favourably displayed, on the basis of those keywords.

(3) In the event that the trade marks have a reputation, the trade mark proprietor may not oppose such use under Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94.

(4) The provider of the paid referencing service cannot be regarded as providing an information society service consisting in the storage of information provided by the recipient of the service within the meaning of Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the internal market (‘Directive on electronic commerce’).

So, what goes on between Google and the purchaser of the keyword does not involve anything that could amount to trade mark infringement. The AG stressed that this does not involve selling anything to the public: there is no use of the trade mark in relation to the goods or services covered by it. And internet users should have access to information about the goods or services sold under the trade mark, without the trade mark owner being able to control that information, said the AG, adding "the mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services ...”

Nor does what the advertiser does with the keyword amount to trade mark infringement, either. Nothing in the use of key words necessarily creates consumer confusion: it does not send a message about the origin of the goods or services.

This is all rather difficult to reconcile with earlier opinions from the CJEC, which have told us that what we used to call "trade mark use" wasn't the defining factor in an infringement action any more, that we should watch out instead for an act on the part of the defendant that reduced the ability of the trade mark to serve as an indication of origin. That's something that the most innocent use of another's trade mark is likely to do, so it's an approach that favours the absolutists - the trade mark owners who'd like their trade marks to be more like copyright (or even, perhaps, patents). This latest opinion clicks the ratchet back a few notches - and I hope the Court follows it (and then continues further down that route to reintroduce the common sense about what trade marks are about that seems to have been lacking for a while).

The AG also took the view that Google were not able to invoke the protection of teh E-Commerce directive and claim that, as Information Society Service providers, they had no liability for the information conveyed through their service. Because they had a direct pecuniary interst in Adwords, the AG suggested, they cannot have the protection of the directive. Which is not to say that Google will necessarily be liabile for infringements committed by Adword purchasers, but that depending on the circumstances they might not be able to hide.

I am in two minds - perhaps more - about all this. On the one hand, Google's trafficking in trade marks, making a substantial profit from their dealings, is distasteful, but on the other the claim of trade mark owners to control completely the message conveyed by their trade mark is also distasteful. Legitimate retailers also have an interest in using the trade mark's message, and the trade mark owners' ire should be directed against (and reserved for) counterfeiters, or pirates, call them what you will. Perhaps my discomfort comes from the fact that, as in so many other areas of life, we find ourselves - all of us, including trade mark owners - in thrall to private businesses: Google in this case, in the same way that the Murdoch empire controls so much of the media around the world and Microsoft controls such a large part of the software market - and, worse still, people do not generally seem to find this worrying.

Picture agencies and unauthorised use

Out-Law reports that Getty Images has recovered nearly £2,000 in damages (and its legal costs) from a removal company that used one of Getty's images on its website. Pinsent Mason, the firm that publishes Out-Law, acted for Getty.

The damages were awarded to Getty despite that fact that the defendant removed (appropriate!) the image from its site as soon as it received a letter about it. Most recipients of similar letters react the same way - then they plead innocence, perhaps on the basis that their website designer (make that ex-website designer) had done it. Alternatively, as in this case, they then ignore it and hope it will go away. Getty are not the sort of people who are inclined to go away.

I sympathise with all concerned, to some extent. Getty are not selling their own work: they represent professional photographers, who need to protect their copyright. They cannot allow infringements to pass unremarked. On the other hand, the defendant could be (pretty) innocent, which might give them protection from paying damages for infringing. They probably should have dealt more carefully with the matter in the contract with their website designer (but there often isn't a contract at all), and the website designer should have known better - after all, they are charging a fee to do the work and should do it professionally. They should also know that just because they didn't get it from the picture agency's site, there might not be an agency somewhere that has a right to be paid.

What I don't have much sympathy with is the heavy-handed attitude of the agencies, or the way they go about collecting what is due. They don't usually threaten to sue for copyright infringement, which would be expensive and uncertain: they send an invoice and then claim when it isn't paid. They can do that in the small claims court rather than the High Court, although what happened here is that they did sue for infringement in the High Court. They probably thought it worthwhile pour encourager les autres: it's also useful when your lawyers produce a widely-read journal in which it can be publicised, a very astute move by Pinsent Mason.

The normal measure of damages in a case like this would be (as Out-Law notes) the commercial rate for the use of the picture. Getty also claimed the cost of tracking down the infringement along with additional damages, available if the infringement is flagrant, and what they referred to as "insidious damages", representing the damage caused to their ability to charge a commercial rate to other users. The settlement agreement does not explain what happened to these claims, but £2,000 sounds like the standard-rate charge without either of these types of extra damages.

IP Lawcast for June 2009

I have posted the latest available IP Lawcast, covering developments in June, on the web. You can download a copy of the audio file here, the notes (a transcript of the audio, in fact, with links to further material) here, and multichoice questions here. I will be seeking accreditation for CPD using this as the example, so you should soon be able to get your training requirements dealt with here, for a small consideration ... in the meantime, I will continue to make the monthly Lawcasts available free of charge as long as I have the stamina to keep producing them.

Costs in patent infringement and invalidity cases

In Novartis AG & Anor v Johnson & Johnson Medical Ltd & Ors [2009] EWHC 2029 (Pat) Kitchin J had to consider what award of costs should be made when the claimants had won on some but not all the points in their claim. He had held in Novartis AG & Anor v Johnson & Johnson Medical Ltd (t/a Johnson & Johnson Vision Care) & Anor [2009] EWHC 1671 (Pat) that the patent in suit was invalid for insufficiency, but that it was not invalid for want of novelty or for obviousness. The defendants' product infringed some of the claims, but not others. This might all seem academic given that the patent was invalid anyway: but the defendants said this was an exceptional case in which they should get all their costs.

CPR 44.3 is the governing rule, and in SmithKline Beecham v Apotex [2004] EWCA Civ 1703; [2005] FSR 24 Jacob LJ explained how to apply it in a patent case. Costs should be estimated on an issue by issue basis so far as this was reasonable, but although this was fairer it was not an exact science. In paras 7 and 8 of his judgment in Monsanto v Cargill [2007] EWHC 3113 (Pat) Pumfrey J explained further how the CPRs applied, including the important phrase: "the overall winner is likely (save in the most exceptional circumstances) to be entitled to payment of all his costs which are not or cannot be allocated to a particular issue".

The costs involved here were not insignicant. In fact, they show the wisdom of doing all one can to avoid being involved in patent litigation. The claimants had run up fees of £2.32 million. The defendants' professional fees were £3.65, with disbursements of £820,000.

The judge thought that the defendants had clearly come out overall winners. They had successfully seen off a challenge that would have closed down their business in the offending products in the UK, and disrupted it throughout Europe. They were entitled to their general costs. Both parties had conducted themselves in ways that caused the costs to escalate, but the judge thought they had not done so unreasonably and noted that this was a hard-fought case with a great deal at stake.

The claimants argued, odd though it may seem, that they won on the vast majority of issues. They lost on one infringement point and on insufficiency: but the insufficiency of their patent specification meant that they were dead in the water. The defendants said that the novelty and insufficiency arguments went hand in hand, in a classic "squeeze" - arguing that either the patent does not disclose the invention in sufficient detail to enable it to be worked, or if it does it lacks novelty or is obvious. In this case, it was reasonable to run the novelty and obviousness claims. The issues were sufficiently circumscribed to justify an issue-based approach, and the judge proceeded to apportion the costs on this basis.

First Conference Services v Bracchi

A judgment of Peter Smith J, with no coded messages, in this breach of confidence case. It was heard back in July, and the judge indicated that he found for the claimants on all but one of their claims and granted the injunctions they wanted - but he didn't give his full judgment at the same time. The reason was that the defendants were planning conferences for the autumn, and if they were to be stopped it had to be done sooner rather than later.

It doesn't look like a startling judgment. The first defendant left the claimants' employment, taking with him a copy of a database of all their contacts, and set up a competing business. The case brought together claims for breach of confidence, infringement of database right and passing-off, so illustrating nicely how the same set of facts can support a range of claims. The first defendant, who represented himself (and also therefore the second defendant, his company) argued that in Vestergaard Frandsen A S v Bestnet Europe Ltd [2009] EWHC 1456 Arnold J had suggested that a defendant cannot be prevented from using formerly confidential information once it has lost its character of confidence: the judge took the view that, whatever Arnold J had said, it didn't apply in a case like this. The use of the confidential information, and the passing-off, continued right up to the moment that the defendants were ordered to stop, and it was therefore more like Crowson Fabrics Ltd v Rider & Ors [2007] EWHC 3942 (Ch) - another Peter Smith J judgment, sadly not on BAILII.

A glance through the judgment will show you that the defendant didn't really have a leg to stand on, although the claim that he had (while still working for the claimants) sabotaged one of their events by not devoting the right effort to it was rejected. The claimants won hands down on everything else, and it leaves me wondering why the defendant even bothered to go to court. He didn't throw away money on legal representation in court (perhaps hoping that he'd be treated leniently), but he will presumably be facing a substantial costs order shortly.

That serial IP book ...

I should post updates on progress with my updating of my IP book. I polished up chapter 7 today, international aspects of patents. A short chapter, but there's a lot going on there especially at the European level so it consists in large part of links to more information. So that concludes patents, though I keep going back to insert more stuff in earlier chapters - this will be a never-ending job - and I have already dealt with confidential information. On to designs tomorrow, which I will enjoy, and I'll post a message when the next chapter is done.

I am also working on an IP podcast - "Lawcast", I prefer, but people might not understand so readily what it's about. It covers June, leaving a five-month gap that I might or might not fill since the initial one for December. The aim with this latest one is to get accreditation so listeners can get CPD points, which will make it a marketable commodity. I hope.

Absolute Radio/Absolut Vodka/Absolute IP protection

Virgin Radio changed its name last September to Absolute Radio, following its acquisition by TIML Golden Square Limited, a subsidiary of the Times of India Group. It proceeded, according to Wikipedia, to lose a fifth of its listeners. Now, according to the Daily Mail, the makers of Absolut Vodka are taking action - and, in line with the high standards we expect from our newspapers, the headline tells us that the dispute is about copyright. At least the article itself gets it right.

Rather ironic, isn't it, that this should be the latest example of absolutism by a trade mark owner. Also ironic that the paper should confuse copyright and trade marks when the trade mark owner seems to be trying to make the trade mark do a copyright job. But the drinks company does have a meritorious argument, that confusion with a brand aimed at youngsters is not desirable.

And although the history of the radio station shows it's not very closely connected to the Virgin Group and hasn't been for some time (limited, I suppose, to a trade mark licence until last year), it also seems pertinent to ask what Virgin would do if someone launched Virgin Vodka.

One strike and you're out, in Hull? Not any longer

Karoo, the ISP that seems to enjoy a monopoly in Hull because of the pecularities of the telecomms system there, has decided to stop disconnecting users after a single accusation and will now require a court order, according to this report on Techdirt. Karoo is part of Kingston Communications, a subsidiary of KCOM, the corporate entitle created by [Kingston Upon] Hull Council to take over the telephone service it had been operating since 1902.

Is it really better that a court order is necessary? It's not something to go after lightly. If the matter is copyright infringement or defamation - and it will nearly always be one or the other - proceedings will have to be issued in the High Court, which is an expensive undertaking. Anyway, the whole drift of the Civil Procedure reforms ten or so years ago was to stop people bothering the courts so much, so requiring proceedings to be issued and a court order obtained is a giant step backwards, or perhaps forwards, depending on your point of view.

Microsoft Word infringes XML patent

According to Nick Eaton, in his blog for the Seattle Post-Intelligencer - I always thought that a wonderful name for a newspaper: following the termination of the cosy arrangements between the PI and the Seattle Times, it's now an online only paper, if that's still the right word - Microsoft have been ordered to stop selling, or supporting, Word. Well, not quite: the court, in the Eastern District of Texas (situated in the town of Marshall, pop 24,000, the self-proclaimed Pottery Capital of the World) ordered that Microsoft would have to do that in 60 days, so I imagine there's an opportunity for a settlement. And the injunction could be satisfied by removing XML support from the program, so it's not as far-reaching as suggested.

The plaintiff is Candian company, i4i Inc., so the choice of Texas as a forum for the litigation is odd, at first glance. But the Eastern District court is notorious as the court of preference for patent trolls - which some commentators say is what i4i is. (Others suggest it is a vehicle for a disgruntled Microsoft employee to seek revenge: I don't know, and I don't care enough to try to find out.) No-one seems to believe the patent can really be valid, and it seems pretty certain that the case will go the other way on appeal: a rare instance of the IT community rooting for Microsoft, although one might have more sympathy if Microsoft wasn't as addicted to software patents as it is. So, really, the story seems to be about the well-known deficiencies of teh US patent system especially as far as granting worthless software patents goes.

Outstanding takedowns of our time

Counterfeit Chic reports the "Best Takedown Ever" but it's not a patch on our brilliant government taking down its own film from YouTube (note from Lawdit here)

Opposition proceedings in the Community trade mark system - an outline

Oppositions are almost standard procedure in the UK and EC trade mark systems nowadays. The EC has always been an opposition-based system, and the UK shifted towards that position a few years ago. The result is that trade mark owners have to be alert and prepared to take action to protect their trade marks: and to trade mark owners from common law backgrounds, where the authorities keep the register clean by refusing applications that conflict with existing registrations, will find this approach unfamiliar (and the expense unwelcome).
I’ll start by considering what happens in the EC system. The Office examines applications and sends a search report to the applicant and, after the application is published, letters to the owners of earlier Community trade marks identified in the search. However, the applicant does not get to hear about earlier national trade marks that might be an obstacle to his application. National search reports can be requested (at a fee of €144) but only 12 member States will oblige with one, and they do not include the UK, Ireland, Germany, France, Italy or the Benelux.

A two-month cooling-off period follows the service of the notice of opposition (once the Office has determined that the opposition is admissible), during which the parties may try to reach a settlement. If they can agree, perhaps on the basis of a reduced specification of goods or services in the application, the opposition is concluded and there is no award of costs (though it is possible that payment of costs will form part of the settlement). If the settlement is based on a restriction of the specification or withdrawal of the application, the opponent has the opposition fee refunded.

The applicant can demand that the opponent prove that they have used the trade mark in the past five years. Both national and Community trade marks would be liable to revocation if they have not been so used, so they are not a sound basis on which to found an opposition. A Community trade mark (according to the latest case law) has to be used in a substantial part of the Community, so use in only one Member State is probably not enough to support the registration.

If the opponent is able to show use only on some of the goods or services for which the trade mark is registered, the opposition will only be able to proceed in respect of those goods or services.

If the matter is not settled during the cooling-off period, it is determined by the Office on the basis of written submissions, although in rare cases oral proceedings are held. There is a formal process for exchange of observations, and the Opposition Division of the Office will consider these observations in making its determination. If the opposition is upheld, the application is rejected (wholly or in part). If the application is not rejected, it then proceeds to registration.

The CTM Regulation provides that all the costs of opposition proceedings will be borne by the losing party. If the opposition is partly successful, a proportion of the costs will be awarded. Compared with other forms of trade mark disputes, opposition proceedings before the Office are relatively cheap, and the costs of representation that may be awarded in opposition proceedings are €300, which is fairly modest. If the opposition succeeds, the opposition fee (€350) will also form part of the award.

You will find more information on the Office's website, here.

Enclosing the language

In a posting headed "Robbing the Commons", Undernews reports that Harvard University has been busy registering trade marks for what it calls "everyday phrases". It quotes Rick Calixto, director of the Harvard Trademark Program, saying "You need to reserve something in case you intend to use it," he said. "We're strategically protecting it for use at some point down the line.'' Which is definitely not that I thought trade mark law was supposed to do.

Fashion designers as absolutists

Here's a post drawing attention to the tactics of Levis, enforcing their trade mark rights in the US against other jeans designers. more about the depth of pockets than the designs on them, perhaps - the point being that intellectual property rights in the hands of rich companies are almost complete proof against any imitation whatsoever on the part of smaller, less well-off competitors. Much of the posting quotes from Mike Atkins's Seattle Trademark Lawyer blog (see my Blawgroll), recruiting it to opposition to the Design Piracy Prohibition Act.

I worry when I see the word "piracy" in this sort of context: there's a lot of it about, of course, but there's also a lot of exaggeration - in the same vein as "copyright theft". Sui generis protection for bullies? Doesn't sound like a positive step.

And so it was that later ...

The House of Lords, in its last batch of judgments before its metamorphosis into the Supreme Court, upheld Blackburne J's judgment in Matthew Fisher v Gary Brooker which had been rather emasculated by the Court of Appeal. The interesting copyright point - that the organ part was worth 40 per cent of the song, basically, and surely few music fans would dispute that - was not in issue: what was being argued about was laches and estoppel. The time it took Matthew Fisher to pursue his claim has been the subject of much comment, but their Lordships and Ladyship (Lady Hale admitting to being able to remember the sixties, which I thought was evidence that the speaker couldn't have been there: what were the other Lords doing at the time?) proceeded on the basis that there was no detriment to Gary Brooker. Quite the opposite: he enjoyed exclusive copyright in the music for many years during which, had Matthew Fisher moved a bit more speedily, he would only have had 60 per cent. That benefit clearly outweighed any possible detriment, although their Lordships took the view that the laches claim was fatally flawed anyway.

In fact, Mr Fisher did not have it all his own way in the House of Lords. Their Lordships did not reinstate the third declaration entirely: they asked the parties for further submissions on the matter of whether Essex Music's rights had been validly assigned to Onward Music, which is however a bit of a sideshow.

The Court of Appeal's judgment had, their Lordships thought, been inconsistent. Lord Neuberger said that, granted that Mr Fisher originally owned 40 per cent of the musical copyright and had not been estopped from asserting it, there was no reason to deny him the right to seek an injunction or compensation for infringement of his copyright. The Court of Appeal had taken the view that, on equitable grounds, it should refuse to declare that the right existed because he should not be entitled to seek an injunction. Lord Neuberger said that if Mr Fisher applied for an injunction, it would be for the court to which the application was made to decide whether it would be oppressive, and he also made the point that the Court of Appeal would have denied him the opportunity to protect his 40 per cent copyright by obtaining an injunction against other infringers. Just because there was no threat that Procol Harum or Gary Brooker personally would use the copyright in a way that Mr Fisher might want to stop did not mean that he should not be able to stop others.

Lord Neuberger's opinion also made clear that there is no statutory time limit for bringing an action for infringement of copyright, which it is good to have confirmed - this is something that delegates on courses have asked me about in the past. Their Lordships also held that the respondents' reliance on the equitable doctrine of laches was irrelevant where what the claimant sought was a declaration relating to a property right - which is not equitable relief. Even if laches were relevant, Lord Neuberger said that the respondents would have to show acts during the period of delay that would mean the balance of justice justified refusing the relief. Here there were omissions, not acts.

Lady Hale's comment about delay had a little more to it: "As one of those people who do remember the sixties, I am glad that the author of that memorable organ part has at last achieved the recognition he deserves", she said. Am I wrong to think that lacks the impartiality that we expect from judges? Or are they entitled to stop being impartial when they have heard all the evidence? I suppose they have to, otherwise nothing would ever be decided. But I too am glad - though on the other hand, I think it right that Robert Godfrey should not be able to claim copyright in Mockingbird ... but that's another story.

Fair use of vehicle manufacture's trade mark

Copyright Law Blog reports a US case (in New York) concerning the use by a used parts supplier of a vehicle manufacturer's trade mark. It's the classic situation where someone in the independent aftermarket can hardly be expected to run a business without referring to car makers by name, but can easily go too far. In the UK and EC, we have had similar cases like Volvo v Heritage and BMW v Deenik where the tribunals have explored the extent to which traders must be free to use others' names even if that name is a registered trade mark. In the US, they have the helpful notion of "nominative fair use", not far removed from parts of section 11 of our Trade Marks Act but expressed, perhaps, in more helpful (and general) terms.

For a trader needing to refer to a car maker, or other business, in this way, the distinctions drawn in this American case are useful guidance - though not, of course, binding on English or European Community courts.

The defendant, Shokan Coachworks, had used "Shokan Audi Parts" in its email signature block - a usage which, the court thought, could create consumer confusion. The strength of the Audi trade mark was a factor in coming to this conclusion (but if the trade mark had been weak, there would have been little point in using it this way, perhaps).

As for nominative fair use, the test applied by the court (the 9th Circuit's test, preferred over that of the 3rd Circuit, if you're interested) was:

1) the product or service in question is not readily identifiable without use of the trademark;
2) only so much of the marks are used as is reasonably necessary to identify the product or service; and
3) the user does nothing that would suggest sponsorship or endorsement by the trademark holder.

In this case, the court held that Shokan had fallen at the third hurdle and their use of the name in their signature block, and also when answering the phone using their trading name "all Audi", which was the key part of the free telephone number that Audi had previously agreed to them using.

here was also another interesting aspect to the claim, namely that Audi alleged infringement by using an email address that incorporated the Audi name. however, they failed to produce suitably authenticated prinouts of web pages to satisfy the court - illustrating an important point about proviving trade mark infringement on the Internet.

"Can I write my own Da Vinci Code?"

I undertook to give a talk under this title to a topical supper meeting of Writers in Oxford some time ago. In the meantime it expanded rather, because (I assumed, anyway, probably correctly) that the audience would also be interested in the saga of "Coming Through The Rye", the unauthorised sequel to "Catcher". (In adding some material on that subject, I was assisted by my friend Lloyd Jassin in New York.)

So I duly turned up, and so did seven others to hear what I had to say. I promised a few people that I would post a recording of the talk on the web, and despite the fact that it turned out to be more like a conversation than a talk and we were interrupted from time to time by waitreses bearing plates of food, I have done that and here is the result.

No intellectual property in transport routes

From South Africa, a story about taxi drivers trying to claim rights in bus rapid transit route: The Citizen tells us, quoting Herman Blignaut, partner at Spoor & Fisher, that "transport routes do not constitute subject matter which can be termed intellectual property".  Quite.  That it was even necessary to say this speaks volumes about the vastly inflated expectations that some people have about intellectual property laws.

There are other legal rights in transport routes and other facilities, so why should anyone try to stuff them into the already-bursting pigeonhole with the "Intellectual Property" label?

The absolutists strike again

The Newspaper Licensing Agency, who must rank as copyright absolutists by any definition,are about to start trying to control the use of hyperlinks, according to the Press Gazette. What is this? Bad enough that, through the NLA, much of the press should be trying to gain a revenue stream from what by definition should be ephemeral, but on what basis do they think they have an exploitable interest in hyperlinks?

The NLA caught a cold when it first started licensing use of press cuttings, basing the exercise on copyright not in the literary works (because the newspapers didn't necessarily own the copyright in them) but in the typographical arrangement - a type of copyright that previously had seemed to be utterly unimportant. Thanks to Marks & Spencer, this approach was knocked on the head by the House of Lords and the NLA went back to the drawing board and put together a licensing scheme that was after all based the literary copyright. Are they on another hiding to nothing here?

One can understand the importance for the press of replacing the dwindling revenue stream that printed newspapers produce, whether through sales or through licensing schemes. I read much more in the press on-line than on paper these days, and to press-cutting agencies and other professional consumers of journalism using hyperlinks is wonderful substitute for cutting up (or photocopying) newspapers. But if there is no copyright in a hyperlink, how to make money from it? Only a copyright absolutist could answer that.

On-line reputation management

That last post was concerned with avoiding damage to a business's reputation caused by employees' ill-advised use of social networking sites. That's parrt of the reputation management equation, of course, but there is more to it than that. If you could identify when your business was being talked about on the Internet, and join in the discussion, how much better your marketingactivities might be. I just discovered buzzding.com which seems to offer precisely that, and am posting this link in case it's of interest to anyone else.

Employers should have a social networking policy (on top of everything else!)

All prudent employers by now have policies on the use of email and the Internet at work. Some still haven’t dealt with the new problems posed by the growth of social networking. The problem, rather like email and the Internet, is that social networking is in many ways something a business needs to encourage.
While the initial response to the Internet was to stop everyone from using it at work, regarding it as a distraction, its value as a source of business information now makes it inconceivable that many employees should not be allowed to use it. And email is as essential a means of communication as the telephone, which people need to be able to use during working hours even for private purposes. Broadband access has now become regarded as a human right, and although this doesn’t automatically place social networking and access to communications technology at work in the same category, we do have to look at them in that light.
The information that many of us need to do our jobs is now often found on the Internet. Social networking sites are rapidly assuming the same degree of importance for marketing purposes. Blogs, Tweets and sites like Facebook, Plaxo and LinkedIn offer indispensable opportunities to tell people about the goods and services you provide. Look at the take-up of these media by lawyers, even if they haven’t yet worked out how Twitter will actually help them.
For years now, employees have been ambassadors for their employers out of the workplace as well as in it. If you see a supermarket employee in her uniform on the way to work dropping litter, your opinion of the supermarket is likely to be adversely affected. If you have the misfortune to travel in the same train carriage as a pair of drunken accountants whose computer cases display the name of the firm for which they work, you will form an impression of that firm. Facebook profiles can tell you where an individual works: with sites like LinkedIn and Plaxo communicating that information is the whole point of the exercise.
Whether people are allowed to use social networking sites at work is one matter. Trying to stop them might be like trying to hold back the tide, but there are certainly good reasons for doing so – if only to stop time wasting. What they say on these services, whether in their own time or at work, is probably more important.
Contracts of employment already deal with confidential information and the protection of the employer’s intellectual property – including copyright, which arises automatically and belongs to the employer when the employee creates something in the course of their employment. They also deal – usually – with saying unfavourable things about your employer, or perhaps even saying anything about him, her or it. Contracts (and associated policies) will also deal with matters like discrimination, so anyone posting racially offensive material on the Internet is likely to be in trouble with their employer as well as the criminal law. That ought to be quite enough to deal with what employees write on the Facebook walls, but it’s a good time to remind people of that and perhaps to tweak what the contract says.
Just like emails, the employer is also likely to want to monitor what is being said. If it comes from the office computer system, whether it's authorised by the employer is not the important thing - the employee posting offensive material on Facebook might have committed a discplinary offence, but that isn't going to prevent the damage to the employer's reputation. The same applies if the information posted infringes copyright or breaches a confidence. The employer probably needs to be proactive, and stop these things going out in the first place. Provided employees are told that postings will be monitored (as should already be the case with emails) they cannot complain of intrusions into their privacy.
A social networking policy isn’t likely to be needed to stop people breaching confidence, infringing copyright or libelling their employers. But it might well be necessary to get the most out of these new marketing tools. Just as employers will want employees to use the Internet in ways that fit with their duties, so too they should embrace the marketing possibilities offered by the new media.
How? That requires more expertise than a neophyte such as myself can offer, and clearly if the corporate hand of someone’s employer is detected in the content of what purports to be an independent blog it is unlikely to be taken seriously. That’s a problem for the marketing people: the problem for the lawyers is to devise an approach that creates the space for employees to work positively for the brand without losing hours of working time to Facebook and Twitter.