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.