Friday 26 February 2010

Not with a bang, but a whimper ...

The demise of the MG Rover Group - the last remnant of Britain's indigeous volume car industry - is an unedifying tale, but the latest instalment even less edifying than anything that has gone before. Nanjing Automobile Corporation v MG Sports and Racing Europe Ltd and Riley [2010] EWHC 270 (Ch) (noted a few days ago, where you'll find the link to the judgment) is a strange mixture of trade mark infringement and passing off, applications for rectifcation of the register, applications for revocation (of the same 32 marks in respect of which the same parties sought revocation), joint liability and even groundless threats.

The final stages of MG Rover's life were, to put it mildly, confused. Those of a suspicious turn of mind might say that the confusion was deliberately engineered, and certainly when the smoke cleared the one thing that everyone could be certain about was that the so-called Phoenix Four who had picked up the distressed remains of the British motor industry had made a tidy profit out of it. Particularly controversial was the sale of MG - a marque for which many enthusiasts have a particularly soft spot - to Nnanjing Automobile - who do seem to be making a sterling effort to make the most of it and keep the name going.

However, another part of the MG empire was flogged off to one William Riley, a name almost as revered in the British motor industry as MG: his namesake and (he claimed, though the family refutes the claim) great-grandfather had founded the Riley Cycle Company, later the Riley Car Company, eventually swallowed up into the behemoth British Motor Corporation, where most traces of heritage were removed and the Riley brand attached to bizarre Mini variants and slightly souped-up versions of cooking saloons - much the same fate as befell MG, in fact.

The denouement finally came before Sir William Blackburne, sitting as a judge of the High Court, who basically had little to do but construe two agreements - one from 2005 whereby certain assets of MG were sold to NAC, and one dated 2007 whereby certain assets associated with MG Sports and Racing Limited (notice the difference between teh name of this company and the first defendant, a differnt company). The construction argued for by the defendants was so unlikely that he didn't seem to have much difficulty, and indeed he was assisted by the fact that because the 2007 agreement could not be read the way the defendants wanted it to be read, there was hardly any need to look at the earlier one at all.

The defendants' case was that they had taken the trade mark MG X POWER under the second agreement, notwithstanding that many other marks (including MG and the octagonal badge) had passed to NAC under the first one. There appears from the judgment to be a great deal of confusion about what went on in the defendant company (effectively under the control of Mr Riley): it certainly had some part-finished cars (of a new model, one that had been planned at the time of the demise of the Rover Group). But imagining one would be able to use a trade mark like that one, when the only distinctive elements in it happened to coincide with trade marks owned by someone else, represents the supreme triumph (to introduce another famous name from British automobile history) of hope over experience. At one stage Mr Riley told NAC that they seemed to have some control over his trade mark portfolio, and he over theirs, which is hard to reconcile with trade mark law as it is known on this planet.

There is little, if any, interesting law, but there is an interesting story in the case. there are also several significant lessons. Precision in contract drafting is always essential, and here (partly because of a fairly large portfolio of trade marks) it was somewhat lacking. The evidence showed that the defendants seemed intent on creating confusion about what was going on with the trade marks, believing that it would work to their advantage. The fact that the sales involved administrators and liquidators cannot have helped, though they appear to have been well-advised and clear about what they were doing. Maybe the great lesson from a reading of this judgment is that if your case is that several extremely strange things have happened in the course of a couple of transactions, things that no rational person would have allowed to take place, the judge is probably not going to come down in favour of your interpretation. It all makes a depressing read for anyone who loved the Brisih motor industry.

IP rights and prosperity

The International Property Rights Index is an international comparative study that measures the importance of property rights - physical and intangible, including - of course! - intellectual property, and their protection, for ecomonic prosperity. This year's report, which has just been released, analyses data for 125 countries, which together account for 97 per cent of world GDP. Unsurprisingly, perhaps, it finds a close correlation between the protection of property rights and economic well-being. This comment on the Copyright Alliance blog is also worth reading.

Xerox claims Google and Yahoo infringe patents

Xerox Corp claims that its Internet search-related patents are being infringed. Not much of a story - but interesting to see Xerox claiming to own key Internet technology. I tend to think of it as a bit of a dinosaur - especially when I think about how it let Microsoft have the GUI that became Windows ...

Photographers meet UK Intellectual Property Office

The British Journal of Photography reports here that several representative organisations met - today (the report is a couple of days old) - to discuss aspects of the awful Digital Economy Bill. they are worried about the treatment of orphan works - I imagine that their works are highly likely to find themselves being treated as orphans - and extended collective licensing schemes. Hmmm ... that's a subject I should look into further ...

Google employees liable for material on Google Video

My Google Alerts produce such a lot of stuff that really deserves a wider audience, I'm going to have to start firing off brief postings with a short note of what it's about and a link to the story - until someone decides that I can't post a link, of course. First of all, here's a story about how an Italian court has convicted three employees of Google for breaching the privacy of a Downs Syndrome sufferer who appeared in a video uploaded to a Google service.
Now, the convicted Google employees did not make the video, nor did they upload it to the net. They just happened, perhaps, to be in the wrong place at the wrong time.
If ISPs are going to take responsibility in this way for what people do with their services, they are going to be very wary of offering services to anyone. This point is made by the Google people in the story. but (on the other hand) I don't find the argument that ISPs have no responsibility for what goes on very edifying. in practical terms, it's pretty well impossible for them to do much about what goes on - but when they are making a lot of money out of it (I mean the company, not these individuals, about whom I know nothing) one might reasonably expect them to be under some sort of obligation. as I observed in a comment on Charon QC's blog this morning, what connection is there between privilege and responsibility in the modern world? It had been broken long before the banking crisis ...

Wednesday 24 February 2010

IP Hyperinflation

A couple of months ago, I found myself in conversation with an Iraqi gentleman. He had, it seemed, been in the UK for many years, but (recalling a harrowing story told to me by an Ethiopian taxi driver in Seattle years ago) I didn’t press him about why he had left his country. We talked instead about humankind’s inability to live peaceably with itself, and with suitably violent hand gestures he made the point that when one person, or one people, has wealth someone else will want to take it from them. Such is human nature, and such is the lesson of history. Greed leads to war. Well, I guess I already knew that ...

It is not only nations fighting over oil, but in a much smaller and less destructive way conflicts break out every day over what we are pleased to call intellectual property. Today a friend issues a sort of manifesto, speaking of contesting “every flaky thing said against IP”. But IP has become terminally flaky itself – even the new Intellectual Property Enforcement Co-ordinator in the States is making meaningless statements about intellectual property theft.

The IPEC – or “IP Czar’, as she has inevitably been dubbed – has a very important consumer protection role to play, too important to get bogged down in slogans. We should all leave to one side the fact that counterfeiting and piracy involve the misuse of private property rights: that analysis – the property metaphor, as Bill Patry would have it – clouds the issue. Trade mark law rightly protects consumers, but for years it relied on the self-interest of traders protecting their goodwill to achieve this. In the complicated modern world, it is right for governments to protect their citizens against dangerous goods like the Czar’s adulterated toothpaste; it is right, for other reasons, to fight the trade in counterfeit designer goods, because it has an effect on employment on both sides of the equation – destroying good jobs making the real thing, creating bad (low-paid, unregulated, unsafe, sweatshop jobs) jobs making the counterfeits. I almost wrote ‘knock-offs’, but a glib phrase like that understates the seriousness of the problem.

While the argument continues to be made in terms of intellectual property theft, stressing (perhaps not deliberately) the impact on the assets of rich and remote companies who charge so much for their products that ordinary people cannot afford them (but how could they remain exclusive and aspirational if they were not expensive?), the full gravity of the situation will never be appreciated. People will continue to buy counterfeit handbags and watches on the street, imagining any crime involved in that to be victimless – or, at least, having no sympathy for the only victim in sight.

A similar calculus applies in the copyright world. Record companies, film studios and software houses stand between the consumer of pirate product and the ultimate victims. Writers find it harder and harder to make a living as electronic books become more common and shorter works are simply misappropriated (a much better, though less emotive, word than ‘stolen’) on the Internet. But the public, perhaps feeling overcharged for CDs and DVDs for too long, has either lost sympathy with the whole notion of copyright or never understood it anyway.

I am drawing the line there – if I get started on patents it will never end ... but, by sheer coincidence, today I have also learnt (via Google Alerts) of an audiobook edition of Stephan Kinsella’s monograph Against Intellectual Property (Mises Institute, 2008; Mises Store; PDF; Scribd; HTML). The book has a go at a number of sacred cows, urban myths and dodgy metaphors – not the perfect antidote to intellectual property hyperinflation, but important reading. Well, anything connected with von Mises, and which discusses trade mark problems by reference to Rothbard Burgers, has to be worth a look.

Sunday 21 February 2010

Those MG trade marks

Only just caught this judgment - which I've been awaiting with interest, not sure what posible arguments the defendant could have ... In Nanjing Automobile (Group) Corporation & Ors v MG Sports and Racing Europe Ltd & Anor [2010] EWHC 270 (Ch) (19 February 2010) the Judge, Sir William Blackburne, held the Nanjing Automobile Corporation (NAC) had acquired the rights to the MG trademarks and logos. He ordered the defendants to stop using the name MG X POWER on the supercar they were making. The judge was satisfied that NAC acquired the rights to all the the MG trademarks and logos when it bought the assets of the failed MG Rover from administrators in 2005.

The defendants' argument appears to be based on a particular construction of the agreement under which they had acquired certain rights from the liquidators, and on the basis of that interpretation they claimed that NAC's trade mark registrations - all of them, so far as they related to the MG business - should be revoked. It will take a little time to get my head round this judgment, but for the moment I offer readers this news, and the link to the judgment.

Friday 5 February 2010

Collecting societies' mandates

Bruce Springsteen reportedly wants his name removed from a claim brought against a bar where unnamed musicians are said to have performed two of his songs. The trouble is, though, that as far as I can see from a quick look at the current Membership Agreement (downloadable from here), ASCAP has the right to take enforcement action in the names of its members (clause 4). He might have signed a very different document, of course, as I imagine it's some years since he joined ... but I don't expect there was that much difference.

Ten Great Reasons to Learn about IP Law

Who needs a reason to study intellectual property? It's far and away the most interesting area of law to start with. Jill Hubbard Bowman, an attorney in Silicon Valley, offers ten great reasons to learn about IP law on her site, IP Law for Startups. They are directed at an American audience, of course, but they are as valuable in England - or anywhere else - as they are there, and as useful to law students and practitioners as to entrepreneurs. Go here.

Thursday 4 February 2010

Dictionary of Intellectual Property

I have spent time over the past several years compiling a Dictionary of Intellectual Property - combining my love of lists and reference books with my knowledge of (I hesitate to say anything about a love of) intellectual property. It is getting close to completion - and having found a publisher for it, I have committed myself to delivering the typescript by the end of February.

Friends have kindly given me many suggestions, which has enabled me to assemble nearly 600 expressions in need of definitions (and I have written most of those definitions too). However, it is still a bit too English, so I am interested to hear from overseas friends about expressions from their own jurisdictions or in their languages tht merit inclusion: and also about English expressions which they would like to see defined. I suppose the request also extends to overseas friends telling me about exrssions from a third country or language that they would like to see defined in it.

I have uploaded a copy of the outline including all the expressions I have collected so far, and if you click on the link (the word "outline") you will probably get to it - if that doesn't work, let me know. I am also happy to show friends my complete work as it stands, but reluctant to make it public in the same way as the outline.

Employee authors' right to be identified

I have been considering section 77 et seq of the Copyright, Designs and Patents Act 1988 - something that we all have to do from time to time, I suppose. I am writing an agreement for a client who provides services (some of which will give rise to the creation of copyright works) through a single-member company. The company, simply by employing him, will be first owner of copyright (s11(2)) and paternity right will be subject to section 79(3), the short version of which is "no paternity right where s11(2) applies." At least, that's the summary version I usually work with, and it usually does the job, but actually you need to go deeper than that.

In fact, s79(3) says paternity right does not apply to anything done by or with the authority of the copyright owner where s11(2) applies. I am tempted when reviewing agreements of this sort to delete the waiver of moral rights which is usually present, on the basis that it is redundant: but on reflection the fact is that there are situations where it is useful, not only from the point of view of the employee but also for the employer. It means that there might be an additional stick with which to beat unauthoriesed users of the copyright work.

The costs of trade mark ownership

Trade mark owners get less and less from the Registry. Not long ago, applications would be examined to ensure that they did not conflict with anything already on the register and would be refused if they did. In other words, the Registry took responsibility for keeping the register clean. But that wasn’t how the Community trade mark system worked, and the UK system was competing for business with it, so by the application of a variation on Gresham’s Law the UK diluted the protection it gave to registered trade marks. Consequently, there has been a steep increase in the costs of ownership of a trade mark.

The result of the changes has been that the burden of policing conflicts between trade marks and later applications passed to the trade mark owner – with no concomitant reduction in fees, incidentally. For people who had registered trade marks under the previous rules, this amounted to a serious moving of the goalposts – one might even say a repudiation of the bargain struck between the applicant and the Crown when registration was originally granted.

The shift can be rationalised, I suppose, by distinguishing the public and private functions of trade marks. Our trade mark law in the UK (and Ireland too, I imagine, though I am not qualified to comment) used to emphasise the public benefits of trade marks – the reduction, to something close to nothing, of consumer search costs. The Register reflected what signs traders were actually using, what the public recognised, and what identified trade reputation and goodwill. In that context, the two-part register was entirely logical, giving stronger protection to more powerful trade marks while allowing emerging trade marks some protection pending the acquisition of a secondary meaning, or acquired distinctiveness. Rights came into existence only when the danger of confusion among consumers had become a possibility.

The approximation of trade mark law in the European Community, and the introduction of the Community trade mark, drew on a different philosophy, and now it is the act of registering a trade mark that brings it into existence. The register is no longer a mere record, it is part of the process of creating rights. The private aspect of trade mark protection is, if not paramount, at least emphasised more than the consumer protection aspect.

Not only do trade mark owners have to bear the cost of opposition proceedings when they wish to stop someone else’s application, they might well feel it necessary to pay for a watching service. The Registry would still tip off earlier trade mark owners about later applications, but it might take a different view about whether a conflict existed from that of the owner of the prior rights. Over in Alicante, OHIM had been dealing in the same way with CTM applications for some years, although with the added problem that prior national rights could trump a later CTM but searches were not carried out in all the national registries. Now, for an extra €144, you can have national searches carried out, but only in 12 countries – not including the UK, Germany, France or Italy, the omission of which makes the exercise of doubtful value.

Now, owners of CTMs and International trade marks designating the UK are invited to pay an additional £50 to opt-in to receive information about conflicting UK applications. The fee covers three years, so you’ll end up paying three of these fees before your trade mark comes up for renewal. Another periodic payment to worry about. And a watching service will start from around £100 a year – though few trade mark owners are going to find themselves paying the minimum, and getting information from the service only opens the door to further expenditure. And trade mark owners must nowadays be alert to the possibility that someone is registering a design that conflicts with their rights.

Trade marks might be getting cheaper to register, and are certainly important for virtually all businesses – but they are becoming high-maintenance assets.

Wednesday 3 February 2010

I'm moving!

On the same day that Charon QC moved to Battersea-on-Thames, this blog is moving to another server (and changing from Blogger to Wordpress, for no particular reason except that I thinkit might be more flexible - so far I am not convinced). The address changes, of course, but I have taken the opportunity to use the domain name I registered a while back - so go to where you'll find the same old same old until I get round to writing some more!

Monday 1 February 2010

Copyright exemptions for public performances

When (if ever) should charities be free to play copyright sound recordings in public without paying a licence fee? The government carried out a consultation on the future of the exemptions in sections 67 and 72(1B)(a) and paragraphs 15 and 18(1A)(b) of the Copyright, Designs and Patents Act 1988 and published the results in November. It came down in favour of the option of repealing the exemptions, which it considered to be the solution most compatible with EC and international law. It proposes that charities should pay between £40 and £80 for licences to play music in shops and at fundraising events. PPL and PRS for Music have put forward a package of initiatives which the government thinks will make the changes more palatable to charities, including a simplified joint licensing system. The changes should be implemented by April 2010, but - unsurprisingly, as this is the way debates take place - the voluntary sector is not happy.

There's a piece on the This Is Hampshire website this morning (and I don't suppose this is a particular Hampshire issue) about the reaction to the government's propposals. It quotes Liz Atkins from the National Council for Voluntary Organisations, saying: “Many charities rely on these small fundraising events to help them survive. This is a shameful way to treat voluntary organisations that help some of the most disadvantaged people in our society.”

I am not going to comment on the role of charities in society, nor on the proliferation of small (and indeed not so small) charities that compete for the public's money, dilute the fundraising and campaigning efforts and multiply the cost of administration. OK, I suppose I did just comment on that. What i do want to say is, what I see as "shameful" is the charities' belief that, because (by some archaic definition) they are doing what is considered good they have the right to avail themselves of other people's work with neither permission nor payment. This is not the government raising a tax on charities, though from their point of view I can see that the effect is identical. It is asking them to pay for what they are using. if musicians are inclined to let charities use their work for nothing (as REM are proud to do in aid of Haiti, and all credit to them) then let them do so - but unfortunately that's not going to get us very far, because it's going to be the record companies that call the shots most of the time, and they are casting around for new ways to sustain their profits in the digital age.

I for one would be delighted if charity shops did not impose someone else's choice of music on me - and the same goes for all manner of public spaces. I know this is a forlorn hope, so here's another idea. Charities would perform a much more useful service if they took the opportunity to present recordings by musicians who are not in thrall to a large record company, and who would therefore be happy to have their work heard on the same basis as via Youtube. Charities could be provided with copies of recordings that they could play without payment. Of course, they wouldn't get the repertoire they get from the radio - but it would bring about a very welcome and long-overdue revolution in listening habits, and provide some relief from the awful aural wallpaper we all have to put up with.


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