Oil drilling patent invalid (old news!)

Red Spider Technology v Omega Completions Technology [2010] EWHC 59 (Pat) is a patent case before Mr Justice Mann dating from 21 January 2010 but only just on BAILII. It’s an infringement claim, plus a challenge to validity on grounds of insufficiency, lack of novelty and obviousness, with amendment and priority points too. There is also a claim of design right infringement. 47 pages in the printable RTF version, which is a bit too much to assimilate this early in the morning, so I will post the bare bones and add more if appropriate when I have had a chance to study the judgment. I think it might teach me more about drilling for oil than it does about patent law …
It does say that all the claims failed, and the counterclaim succeeded so the patent was revoked. Another case to add to the balance that shows whether the courts are ‘anti-patent’ or not. But to class a case as ‘anti-patent’ does strike me as shortsighted – just because a patent is revoked doesn’t mean the judge (or the courts in general) is against patents as a whole: more patents – more IP of any description – is not necessarily an unalloyed good thing. Although sometimes it seems that quantity,  not quality, matters most.

Posted by petergrove

When will they ever learn?

Two items on Radio 4 news this morning, both slightly off-piste for an IP blawg but not too far ... RBS fined £28.6m for breaching competition law by exchanging information with Barclays about loan rates to large professional borrowers (story here on the BBC website), and a journalist censured by the PCC for what he wrote in a blog - establishing that blogs operated by those subject to the PCC have to maintain the same standards as their printed editions (story here).
The competition law breaches date back to late 2007 and early 2008, so predate the nadir of the banking industry and (more importantly) the nationalisation of RBS. It still raises many questions about conduct and corporate governance there - how could any competent executive imagine this conduct was permissible, or even that they might get away with it? Whacking the nationalised bank with a penalty like that also looks a bit questionable, though it doesn't represent many bonuses ...
From a more objective legal perspective, it's noteworthy that RBS co-operated with the investigation and secured a £5m reduction, and that Barclays avoided a penalty by blowing the whistle on the the illegal practice.
And here (courtesy of a client of mine) is the perfect gift for the banker wishing to tip off the authorities about a competition law breach ...

First design case in General Court: 'overall impression' and 'informed user'

Case T-9/07, Grupo Promer Mon Graphic SA v Office for Harmonisation in the Internal Market, PepsiCo Inc is a little bit of history, not very new (dating from 18 March) but still important - especially for a design law enthusiast like me. And, being in the process of bringing my designs lecture notes up to date for a CLT course next month, I need to do some work on it - and posting a note here can form part of that exercise.
The case, as cases in this area so often do, involved a design for an article of astonishing banality. Not an exhaust pipe, pig fender or slurry separator, but a 'metal rapper', 'tazo' (the Spanish word, apparently) or 'pog', a small disc used for promotional purposes (like the cards I used to collect when a child, though rather less informative: I learnt more from the 'flags of the world' cards that came with my chewing gum than I learnt at school during the same period). David Stone, writing in the Class 99 blog, identifies no fewer than 10 important points in the judgment: interested though I am in linguistics, and despite my sentimental fascination with Romania, I am not going to spend time considering where the Romanian (and French) language versions of the regulation differ from others.
The two points that strike me as most important are, first, the importance of the indication of product for the application of the overall impression test, and second, the identity of that elusive individual, the informed user.
When registering a design, an indication of the product is needed - but does not limit the scope of the protection given by the registration to that product. The Court took that view that the indication of product is something to be taken into account - but in the present case, where the articles to which the design was actually applied form a  particular category, it is proper to look at that narrower category. Although the registration mentioned 'promotional items for games' the Court (like the Board of Appeal) focused on pogs, rappers or tazos. This had a profound effect on the amount of design freedom enjoyed by the designer, and therefore on the way the overall impression test would work when considering whether there was a conflict. Design freedom being much more limited than it would have been if the wider category were referred to, the greater the distance from the state of the art needed in order to make a different overall impression.
On whom does this impression have to be made? This is the informed user in Community design law - neither amanufacturer nor a seller, the court held, to no great surprise. The informed user is particularly observant and has some awareness of the prior art, as the case law (includng the Court of Appeal's judgment in Proctor & Gamble v Reckitt Benckiser) suggests. In the present case, the product was an intermediate product - it advertised something else. Was the informed user the 5 to 10 year old end user or the intermediate trade user, the marketing executive using the intermediate product to market that other product? An interesting and important question - unfortunately, because it made no difference in this case, the court only had to note that it could be one or the other. At least we know it isn't the manufacturer or supplier.

When 'search engines' can't hide

Hard on the heels of the AdWords case, Mr Justice Arnold has decided a rather different case where the service provider couldn't escape liability for copyright infringements. Twentieth Century Fox Film Corporation & Anor v Newzbin Ltd [2010] EWHC 608 (Ch) (29 March 2010), as the title tells you, concerned films, although other types of copyright work (or 'content' as we must learn to call them) were also mentioned. The defendant operated an online indexing facility, in which volunteer editors collected and collated information about media files available online - and who the defendants encouraged to concentrate on films, the most popular type of file among the users of the premium service (30p per week). Because it knew about the infringements that were taking place, and because of its editorial involvement which facilitated the infringements (including the way the site was strutred to guide premium members to the infringing copies and providing the means to download them), the defendant was authorising the infringements. I wonder whether the members of the House of Lords who decided, back in the mid-80s when they seemed intent on keeping intellectual property law in its box, that Amstrad's twin-deck, high-speed tape recorder did not involve an 'authorisation', would agree?
The difference is that reasonable members of the service (700,000 of them) would have believed that the defendants had the authority to grant permission to users to make copies. It had 'sanctioned, approved and countenanced the copying of the films', and moreover it had 'procured and engaged in a common design with its premium members to infringe the copyrights'. It was not just a passive participant in the process, which distinguishes the case (if it were necessary to do so) from the AdWords case.
The site displayed plenty of notices warning users not to infringe copyright: the judge dismissed these, in a well-known expression which I will nevertheless file away for future use in this context, as 'window dressing'.
Out-Law, as always, has the story and the report is well worth reading. It also has a comment which is worth reading: ISPs will rest easier after this judgment, because it makes it clear that they have to go a long way before they do something that might be considered actionable.

Economic duress

A little off-piste for an IP blawg, perhaps, but Kolmar Group v Traxpo Enterprises [2010] EWHC 113 (Comm), a judgment of 1 February this year by Mr Justice Christopher Clarke, is  noteworthy. The defendants, having agreed a contract price, tried to bump it up when the claimants were in no position to resist – with an expensive ship hanging around in the port and a major customer anxious to get its hands on some methanol (which, given that the Chemistry Department at Oxford University tells me it is ‘[T]oxic by inhalation, ingestion or skin absorption’ is probaly not the best turn of phrase to use). So they forked out and then claimed restitution, which the court awarded to them.
That’s an interesting point of law to note (though hardly a novel one), and of course it’s not limited to shipping cases. It’s also potentially an attractive plot device for a work of fiction …

Déjà vu all over again

In my regular perusal of the blawgs, especially the IP ones, I came across a rather heated discussion on Dennis Crouch’s excellent Patently-O on the use of design patents (the US equivelant, roughly, of our registered designs) to protect designs for car parts. It’s hard to believe that the Americans are only now tearing each other apart over this as we did in the 1980s …
Each to their own, and the US law in this area is sufficiently different from ours as to make comparisons difficult. But I hope they don’t make the same mistakes we made, pruning the duration of (unregistered) protection so there’s hardly anything left, carving out exceptions to protection that are almost as wide as the protection was to start with, and capping it all off with compulsory licensing and licensing of right provisions. I always thought that the vehicle manufacturers lost the battle by overstating their case. And it wasn’t a battle that should have been fought out in the intellectual property arena anyway: it raised important product liability and safety issues which should have been addressed as such.
I believe that US law on dealer protection has a great deal to teach us, so perhaps it’s only right that we should offer them the benefit of our experience in dealing with design protection for parts.

Trade mark oppositions in Italy

A newsletter from my friend Avv. Luca Giove tells me that Italy has put in place new legislation to permit opposition proceedings to be brought. Until now, the only course available to a trade mark owner was to apply to nullify the trade mark after registration.
Nullity actions in the Italian courts will still be the only way to deal with conflicts with unregistered trade marks and dilution or unfair advantage. Oppposition proceedings will, where they are available, be much quicker than nullity proceedings - a mximum of 24 months after the application is filed. (Does that mean the application for registration, or the application that kicksoff the opposition proceedings?)
The problem is that until the terms and the  manner of payment of the opposition fee are set out by Decree, you can't actually file an opposition. But at least it's a step in the right direction.

Adwords: the Court of Justice favours Google

I have an instinctive dislike of the whole Adwords project, perhaps because I simply don't like being bombarded with advertising that some clever machine thinks will be of interest to me. (I make an exception, because it caused me such amusement, for the program that placed next to an email from a female friend a link to "how to write a love letter".) But where is the trade mark infringement when Google takes money to forge a connection between one person's trade mark and another person's advertisement? And is it, as some have suggested, simply analogous to renting a billboard next to one bearing your competitor's advertising?
Being an old-fashioned sort of person, I don't see it that way at all. Adwords using a competitor's trade mark lure consumers to the advertiser's site under false pretences. The consumer might realise what's going on fairly quickly, but the fact that they have been taken there at all might have done the damage. "Initial interest confusion" is the concept American trade mark lawyers talk about: "bait and snatch" also seems to sum it up rather well.
Well, the Court of Justice says pretty clearly that in its judgment today in the Google Adwords cases C-236/08 to C-238/08:

the proprietor of a trade mark is entitled to prohibit an advertiser from advertising, on the basis of a keyword identical with that trade mark which that advertiser has, without the consent of the proprietor, selected in connection with an internet referencing service, goods or services identical with those for which that mark is registered, in the case where that advertisement does not enable an average internet user, or enables that user only with difficulty, to ascertain whether the goods or services referred to therein originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party.

That, it seems to me, doesn't answer questions about initial interest confusion or bait and snatch (neither expression featuring in the judgment), but makes it clear that if there is confusion or deception (neither concept featuring in the judgment, save for a passing reference to confusion in para 78) there's likely to be confusion. Few consumers are going to suffer from that sort of confusion, unless the advertiser is being downright fraudulent.
As for Google, the court doesn't believe they are using the trade mark within the meaning of the relevant legislation, and that the E-commerce directive (Article 14) also gives them a defence, provided they have not played an active role in what has happened and that they act expeditiously to remove or disable access to unlawful data.
A short and fairly pithy ruling, coming at the end of 121 paragraphs of dense and probably exhausting legal narrative and debate. I'll read the whole lot as soon as I can - but not right now.

Limitations of liability and statutory interest

Beware the eiusdem generis rule! Charles Russell's commercial law Critique blawg - which I have just discovered, but will add to my already impossibly extensive reading list - reports Marketstudy Insurance Co & Ors -v- Endsleigh Insurance Services [2010] EWHC 281 (Comm) in which David Steel J (not, as that blag calls him, Steel J) construed a pretty bog-standard limitation of liability clause to exclude liability for statutory interest. The clause in question read:

“Endsleigh’s total liability in contract, tort (including negligence or breach of statutory duty), misrepresentation, restitution or otherwise, arising in connection with the performance or contemplated performance of the Agreement shall be limited to the aggregate amount of fees received pursuant to clause 6.1 above.”

To cut a short story even shorter (because you should be reading this on the Critique blawg, along with the commentary there) the judge seems to have applied the eiusdem generis rule to interpret what the word "otherwise" meant here (although the words "eiusdem generis" don't appear in the judgment), so it meant other matters like contract, tort, misrep and restitution - and statutory interest was, he thought, a different matter because it arose from an exercise of the court's discretion.

Better recast the limitation clauses in any precedents I have lurking on my computer, then. Either mention interest specifically, or displace the eiusdem generis rule (with words like "without prejudice to the generality of ..." perhaps? Working them into the right place would give an ugly result - better to strengthen the "otherwise" with an "any" before and "whatsoever" after, perhaps - and, what the hell, add "interest" to the list for good measure).

This is not legal advice. (Hey, there's a great title for a blog!)

Prisoner compensated for loss of work

I love this: the authorities in North Carolina have settled with an author, currently residing in one of their places of correction, over the loss of a novel he had been writing. It seems that the work he had been writing in prison was taken from him and destroyed. They have reportedly paid him $10,000, which many struggling novelists would regard as beyond the dreams of avarice were they to be offered it as an advance.
If it was half as good as this prison literature - and who knows? it could be rubbish, it could be great - it will have been worth the advance. I doubt it's that good, but he's written a few books already and readers seem to like them ...

How long does a perpetual licence last?

According to Sales J in BMS Computer Solutions Limited v AB Agri Limited [2010] EWHC 464 (Ch) a perpetual licence can be one that continues without limitation of time, or one that is never-ending. It’s not something that I had ever really thought about, I have to confess, though I have used the expression many times. However, in the BMS case it assumed an importance that it doesn’t usually have, because of the effect of variations of the agreement. The upshot was that the licence had to be construed as meaning without limitation of time, allowing for the possibility of termination. It was the only interpretation of teh words that was consistent with the rest of the contract.
The parties also got into a mess with the provisions about where the software in question could be used. Again, the judge had to interpret the wording in the manner that was compatible with the rest of the conract. It all serves to remind us of the importance of making sure that these things are thought through, of course, but most importantly that variations to the agreement are carefully considered.

Incomplete contract can still be binding

The Supreme Court (still, in my traditionalist mind, the House of Lords) has decided that a contract that the parties failed to finalise in accordance with its terms was nevertheless binding. more often, the problem is to get people to draw up contracts at all, but in this case - RTS Flexible Systems Limited v Molkerei Alois Müller Gmbh & Company KG [2010] UKSC 14 - the parties had spent a great deal of time, and money, reducing their agreement to writing, then stopping just short of finishing it.

Of course, this sort of thing must happen all the time. They got so far down the road, the contract was being performed, they settled the terms and put in place a letter of intent. The terms said that the contract would become binding only when they had signed and exchanged their respective copies, but things started to go wrong and they never got that far.

The Supremes decided that there was an agreement, though: there was an offer and an acceptance, and intent to create legal relations. Most importantly, though, there was a waiver of the requirement for an exchange of signed copies. They had written it into the contract but had not relied on it. The court thought it inconceivable that there was no contract, and disagreed with the trial judge's view that only some of the terms had been settled. The contract was fully in place. It goes to show that the contract and the document that records it are not one and the same thing.

Movement trade marks

My old mate Russell Waters, writing in the IPNow blog, tells us that in Australia

Recent amendments to the Trade Mark Examiner’s Manual now make specific reference to moving images, holograms and gestures as trade marks.

Movement marks and holograms also feature in the UK IPO’s manual of trade marks practice, though it has nothing to say about gestures. We had a gesture trade mark on the register, once, and I still refer to it when I present courses, though it seems to have disappeared without trace.

Something for nothing?

In a paradigm case of a confused article about intellectual property, in which trade marks, patents and copyright are treated as synonymous, The Moscow Times reports that Yevroset, a Russian mobile phone retailer, has failed in its attempt to register the (word only?) trade mark Халява (khalyava).

The word doesn't appear in my Russian dictionary (which you might be pleased to know I have now put in a safe place so I don't lose it again), but then again it didn't have оснеживание either (and Babel Fish didn't help). There's an explanation on one of my favourite websites - one of my many thousands of favourites, I suppose - here. The etymology is explained here and very interesting it is (well, I think so).

Another thing that fascinates me is why it cannot be registered as a trade mark. The trade mark office (I assume that's who it was) states that the word conveys the meaning of 'the satisfaction of needs, getting something on someone else's expense, free of charge'. Some people seem to see this as a peculiarly Russian character trait: others observe that it's a universal phenomenon, and it does bring to my mind that wonderful neologism 'slackoisie', coined by Dan Hull and popularised by Scott Greenfield.

Leaving aside discussions of the human condition, you'd assume that Халява was an unsuitable trade mark for exactly the same reasons as "freebie" would be unregistrable in this country. ("The Little Book of Freebies" is registered in the UK, with no disclaimer of the key word, but that's as close as it gets.) It's an ordinary, descriptive word that everyone has to be free to use. But no, it seems from the report that the decision was made on public policy, or perhaps morality, grounds. It might be that a full report would reveal more, but I'm content with the idea that a trade mark office might see a public policy argument against allowing such refernces in a trade mark.