Dispute resolution, by Shakespeare

A few years ago, I went to Shakespeare's birthday party. Not, I hasten to add, in his lifetime. The Poet Laureate read a couple of the sonnets, which seemed to me to be a very civilised way to spend an evening. I chatted with Michael Holroyd about his abbreviated legal career, and Tracey Chevalier presided.
Shakespeare's birthday this year was a couple of days ago. This year I found myself at a party to mark World Intellectual Property Day. It's hard to equate that to Shakespeare's birthday - but by a happy coincidence, or perhaps (who knows?) by design it was also Sir Robin Jacob's birthday: and the format of the reception was cheese and wine, and readings. I missed the cheese, drank some wine, and listened to the four readings - and then ate a slice of Sir Robin's birthday cake, which was rather good.
Anyway, the fourth reading was mostly from Shakespeare (As You Like It, Act V, scene IV), and having been chosen by the birthday Lord Justice it was delivered by him, and commended (I hope my interpretation is quite right) as an object lesson in dispute resolution:

TOUCHSTONE. Upon a lie seven times removed- bear your body more seeming, Audrey- as thus, sir. I did dislike the cut of a certain courtier's beard; he sent me word, if I said his beard was not cut well, he was in the mind it was. This is call'd the Retort Courteous. If I sent him word again it was not well cut, he would send me word he cut it to please himself. This is call'd the Quip Modest. If again it was not well cut, he disabled my judgment. This is call'd the Reply Churlish. If again it was not well cut, he would answer I spake not true. This is call'd the Reproof Valiant. If again it was not well cut, he would say I lie. This is call'd the Countercheck Quarrelsome. And so to the Lie Circumstantial and the Lie Direct. 

JAQUES. And how oft did you say his beard was not well cut? 

TOUCHSTONE. I durst go no further than the Lie Circumstantial, nor he durst not give me the Lie Direct; and so we measur'd swords and parted. 

JAQUES. Can you nominate in order now the degrees of the lie? 

TOUCHSTONE. O, sir, we quarrel in print by the book, as you have books for good manners. I will name you the degrees. The first, the Retort Courteous; the second, the Quip Modest; the third, the Reply Churlish; the fourth, the Reproof Valiant; the fifth, the Countercheck Quarrelsome; the sixth, the Lie with Circumstance; the seventh, the Lie Direct. All these you may avoid but the Lie Direct; and you may avoid that too with an If. I knew when seven justices could not take up a quarrel; but when the parties were met themselves, one of them thought but of an If, as: 'If you   said so, then I said so.' And they shook hands, and swore brothers. Your If is the only peace-maker; much virtue in If.

There is indeed. Later, I tried to interest a friend in subscribing to my podcasts. I asked him about his CPD needs, and at the second attempt realised (with his help) that the elevator pitch should go something like: "If I were to ...", thus neatly demonstrating some facility with the subjunctive into the bargain, and effortlessly demonstrating my superiority over the main contender for the office of Prime Minister.
Sir Robin went on to read from Sassoon's "They". Also worth repeating here, though with no obvious IP context (and I don't think Sir Robin tried to find one).

THE Bishop tells us: ‘When the boys come back
They will not be the same; for they’ll have fought
In a just cause: they lead the last attack
On Anti-Christ; their comrades’ blood has bought
New right to breed an honourable race,
They have challenged Death and dared him face to face.’

‘We’re none of us the same!’ the boys reply.
‘For George lost both his legs; and Bill’s stone blind;
Poor Jim’s shot through the lungs and like to die;
And Bert’s gone syphilitic: you’ll not find
A chap who’s served that hasn’t found some change.’
And the Bishop said: ‘The ways of God are strange!’

I wonder whether he's familiar with Morning Heroes, to which I have been listening a great deal recently?

Manifesto for Brands

With an election in progress, lobbyists can be expected to produce their own manifestos. Like the party manifestos, they are likely to cause rapid glazing over of the eyes, especially when they appear to have been thrown together so quickly that the author had no time to make sure the verbs and nouns in the first paragraph agreed. I never take too seriously anything as badly written as the Manifesto for Brands, in which the British Brands Group and the Anti-Counterfeiting Group present a six-point plan for greater wealth creation, jobs and competitiveness.
‘Brands already contribute much to the economic and social fabric of the UK. They may contribute more in a more positive environment’, they say in the sort of platitudinous terms familiar to readers of most manifestos since Marx and Engels produced theirs - the original, and in many ways the best. It mentions how consumers vote every day with their shopping decisions, and how companies build ‘a vote-winning reputation with consumers’, which chimes with what is happening on our doorsteps and television screens – vaguely.
It seems to me to be a very mixed-up statement of what brands are all about, but that’s hardly surprising because the notion of a brand is pretty confusing anyway. I have less idea about the nature of a brand after reading this than I did before, partly because brands, brand owners and branded goods are treated interchangeably. Unfortunately the lack of rigour in the argument detracts from the very important messages: the six point plan draws attention to the fact that counterfeit goods remain a problem (thirty years or more after they first attracted the attention of UK industry); it criticises consumer protection legislation; and it calls for ‘robust intellectual property rights effectively and efficiently enforced’, which sounds good but in practice probably means large brand owners beating up small businesses for having the temerity to try to register a trade mark that has some tiny element in common with the brand owner’s trade mark. But reform of the trade mark system is a good rallying-cry, though not one likely to capture the imagination of the candidates.

Restitutio in integrum

How can IP lawyers hope to dispense with Latin, when the civil law part of the European Union still insists on speaking it?

Case T-187/08, Rodd & Gunn Australia Ltd v OHIM concerns the concept with the Latin name, which we Anglo-Saxons might also know as restitution or re-establishment of rights. It's a concept we have too - indeed, it's what Mr Bignell was after in the case noted in the previous post. Rodd & Gunn (a company that had undergone several changes of name during the history of the matter) had a CTM comprising a rather nice design showing a dog - a pointer, I suppose: it doesn't matter, it could have been anything. The point is that their trade mark attorneys in New Zealand put the renewals in the hands of a reputable annuities business - well, the biggest one, CPA - and instructed the UK trade mark attorneys who were on record at OHIM not to do the renewal.

Of course, the trade mark attorneys still received the renewal notices - and eventually the notice advising that the mark had been removed from the register, on account of the fees not having been paid. The only thing left to be done was to seek that Latin thing: but Article 78 of Regulation No 40/94 (now Article 81 of Regulation No 207/2009) makes it clear that you can only have that if due care has been taken. The Trade Marks and Register Department rejected the application, and the Board of Appeal upheld that decision. The representatives had not taken due care: they had done nothing, but to be fair to them their client had told them to do nothing. Normally, that would be where the due care would be sought, but the Board looked also at the care taken by the proprietor of the trade mark, and decided that relieving a professional representative of his task of monitoring the legal status of a mark was, in itself, careless. Moreover, no evidence had been adduced about the steps taken by the proprietor. And finally, there was no due care taken by CPA, because this was not an isolated instance but (the Board found) a serious internal problem.

The Court held that the requirement to exercise due care under Article 78 lay, in the first instance, with the trade mark owner. If the owner delegated administrative tasks, the person chosen to do so was subject to the same requirement and its actions had to be regarded as those of the owner.

The General Court agreed that it was a lack of vigilance on the part of  CPA that had caused the loss of the registration. They had moved offices in the crucial period, but that did not excuse the omission. It did not amount to 'exceptional circumstances'. The Court also noted that the New Zealand trade mark attorneys had not followed through, even though they specifically asked for confirmation from CPA when the renewal fee was paid and did not receive it.

All fairly predictable, I think, except that the Court has set a hare running (maybe that's what the dog is pointing at?) with its comments about entrusting renewals to organisations like CPA, which it hasn't answered. Lots of people do it, and they need to know that it's not prima facie evidence of carelessness to do so.

At which point, I should declare an interest: the sponsor of my podcast and Newswire is Olcott International, and CPA are the competition. But this posting is not about CPA so much as about the principle of using annuities specialists. Perhaps it's partly explained by the judges being inexpert in intellectual property matters, though even so they should be able to get their heads round this. There's no point in paying lawyers' rates for clerical work, and lawyers can make mistakes just as easily as the anuities firms - indeed, perhaps you're safer with the annuities specialist anyway. Just make sure the appointed representative is also in the loop.

Impecuniosity and renewing patents

Owning intellectual property is just a bit like owning a dog - you can't leave it to fend for itself: it will cost you money from time to time. There, I think, the resemblance ends, and out of respect for the Dog's Trust's trade mark rights I won't say "A patent is for life ...".
The law recognises that sometimes people will fail to pay the renewal fee on time, or even within the extra period during which they can renew with a penalty (six months, under section 25(2) o f the Patents Act 1977). Under Section 28(3) if you fail to renew and the patent lapses you can still seek to have it restored: 19 months is allowed for this by allows Rule 41(1)(a) of the Patents Rules 1995. But the comptroller has to be satisfied that you took reasonable care to see that the renewal fee was paid in time.
In Betson Medical (Ireland) Ltd v Comptroller General of Patents [2010] EWHC 687 (Pat) the unfortunate Mr Betson found himself unable to pay the renewal fees for a patent that he had assigned to the claimant company, which he had set up to exploit it (and other patents). It's a state of affairs that, with variations, I have come across many times, and every practitioner has probably seen. The problem was that the evidence, though it showed that he was struggling to make ends meet and was being bailed out by friends, did not reveal anything that looked like reasonable care to renew the patent. He raised money from a private investor, but the investor seems to have done so much due diligence that by the time the money became available it was too late. But, more to the point, it seems that Mr Betson didn't ask for a relatively small investment to secure the patent (which presumably was a significant part of what the investor was investing in), he was after a much bigger sum to finance subsequent activities too. And most important of all for the Comptroller, he treated the patent portfolio as a whole whereas for the purposes of the Act he should have tried to get hold of the €359.37 needed to renew the European patent UK. What happens with the other patents in the collection is of no interest to the Comptroller, under our legislation - and that, I think, is the lesson to be learned from this case.
The court (to which the case came on appeal from the Hearing Officer) noted that although the appellant company was said to be impecunious (a word probably getting more use in this judgment than it has since Dickens passed away) it seemed to be racking up an impressive overdraft, indicating that had it sent a cheque to the Patent Office when the renewal originally fell due all would have been well. The judge (Kitchin J) also observed that the friends who were providing the wherewithal to pay utilities bills and the like might have been prepared to put their hands in their pockets again for the UK renewal fee, but there was no evidence that they were asked. It doesn't mean that asking in a similar situation will make restoration possible, but it does show the sort of evidence that is needed, and which, sadly, Mr Betson did not adduce.

Repair defence to patent infringement

I came into the intellectual property world by way of spare parts and repairs (though in the designs field rather than patents), so Schütz (UK) Ltd v Werit UK Ltd & Anor [2010] EWHC 660 is a treat - if a 50 page judgment can ever really be described as a treat. The goods involved are intermediate bulk containers - big plastic bottles in steel cages for the carriage of bulk liquids. Often these things are single-use, but not surprisingly human ingenuity has devised means of replacing the platic bottles so that at least the metal part can be reused. Ecologically sound, as well. The big question is, does replacing the bottle amount to 'making' a patented product?
Only if there's a valid patent, of course, so the case also has infringement and validity aspects to it. Whether there was an infringement at all depended on the construction of the claims, which is hardly unusual but does mean that the case isn't particularly interesting from that point of view. More to the point was the 'making' question, and the judge (Floyd J, who opened his judgment quoting Plutarch and referring to George Washington's famous axe, with its three new handles and two new heads) held that the important question was whether what was left at the end of the repair what was left embodied the whole inventive concept of the claim. If it did, replacement would not amount to making. He considered that the inventive concept lay entirely in the metal cage, so when the bottle was removed and replaced the inventive concept was, so to speak (my words not his) untouched. And quite right.
There is also discussion about whether the bottle is an essential means of either of the patens infringement of which was claimed: teh judge didn't exactly pas on this, but it was a sideshow and he didn't think it would serve much purpose to decide the pont without having heard a full argument.
There is also a product tie question, raising section 44(3) of the Patents Act:, since repealed and replaced by the Competition Act 1998. The first defendant argued that the claimants sold the goods on terms which obliged the purchaser to buy something other than the patented product - the bottles as well as the cage, in effect. But the judge said this wasn't a tie, just the sale of a kit from whic the desired product could be assembled.

Monthly IP Newswire

In addition to the monthly Lawcast series, I have launched a new publication today - the IPso Jure Newswire. As well as being distributed by my good friend Charon QC it can be downloaded from here. I hope you like it - please let me know. And if you are inclined to advertise in it, I would be delighted to hear from you!

The Lawcasts will soon come with the added benefit of CPD hours or whatever variation on th at concept is applicable to your profession, and a  modest annual subscription will be payable. More details soon. Thanks to Olcott International & Co LLC for their invaluable support.

Regulation 19 defence for information society service providers

I spent a lot of time at the weekend moving books around, having acquired a new bookcase. It now houses our collection of political biographies (plus my treasured but probably valueless autographed copy of The Middle Way), and it brought home to me how much politics has changed since I was involved in it. I don’t think it was necessarily gentler, but the media though which outrageous statements could be made immediately available to the whole world didn’t exist – so perhaps it seemed more civilised.

Then I read Kaschke v Gray & Hilton [2010] EWHC 690 (QB) (29 March 2010) and it confirms my impression. The facts don’t need setting out here. Suffice to say that G allegedly posted defamatory statements about K on a blog called Labourhome.com, controlled and operated by H. H applied to have the claim struck out, on the grounds that he had good defences under section 1 of the Defamation Act (not the author, editor or publisher) and Regulation 19 of the Electronic Commerce (EC Directive) Regulations 2002 (S.I. 2002 No 2013) (“mere conduit, caching and hosting”), lost before the Master, was refused permission to appeal, appealed against that to Eady J who allowed it, and then ended up appealing the Reg 19 (but not the s1) defence to Mr Justice Stadlen.

H contended that all he did was make available the service in which others could post. It was not proactively moderated, or even closely monitored although as you’d expect he would (he said) consider postings about which complaints were made and take appropriate action. (The claimant’s complaint about the posting in question was sent by post to the wrong address rather than to the email address provided on the blog, which wasn’t a great start.)
However, it seems that the website did have a system – initiated, the master said, by H – under which entries on the site were “recommended”: he had the power to adjust the scope to give entries that status. He “promoted” posts – making them more prominent than they otherwise would be. He checked spelling and grammar when he did this, too. And of course he would delete material where necessary, as well as blocking spam accounts from posting. The s1 defence was not the stuff of summary judgment: there was an issue to be tried. As for reg 19, the master referred to the judgment of Eady J (him again!) in Bunt v Tilley [2006] EWHC 407:

8. The high point of the claimant’s case in this respect is to rely upon the fact that the corporate Defendants have provided a route as intermediaries, whereby third parties have access to the internet and have been able to pass an electronic communication from one computer to another resulting in a posting to the Usernet message board. The Usernet service is hosted by others who are not parties to these proceedings, such as Google. It is not accepted that the relevant postings necessarily took place via the relevant ISP services but that would be a matter for the claimant to establish at trial. For the moment, that assumption should be made in his favour.

9. When considering the internet, it is so often necessary to resort to analogies which, in the nature of things, are unlikely to be complete. That is because the internet is a new phenomenon. Nevertheless an analogy has been drawn in this case with the postal services. That is to say, ISP do not participate in the process of publication as such, but merely act as facilitators in a similar way to the postal services. They provide a means of transmitting communication without in any way participating in that process.

Again, there were questions to be tried about the extent of H’s control over the service. Summary judgment was not appropriate.
The Master went on (just in case) to consider whether H could be said not to have actual knowledge of unlawful activity or information and not to be aware of facts and circumstances from which it would have been apparent to him that the publication was unlawful. Those words “would have been” indicate of a test of observation by a reasonable person, having regard to all the circumstances. This was something else that was not suitable for summary determination, in the Master’s view: the judge in the appeal did not need to go there.
There was also a triable issue about whether H had acted expeditiously in taking down the offending material. Although he had acted promptly when he received K’s email with a copy of her lawyers’ letter to him, originally sent in June but to the wrong address, he might have had the requisite knowledge or awareness before then. The judge in the appeal did not have to decide on this, as he was already satisfied that the claim should not be struck out.
He also confirmed that just because a host operates other services that he does monitor, edit, moderate or otherwise influence does not automatically deprive him of the defence under Regulation 19, even if that material that he has influenced appears alongside the unmoderated material complained of.
An interesting judgment casting light on this important area, even though it is only on a summary application. An indication of how interesting is the fact that the judgment on these points runs to 37 pages. How long judgments are growing: just for fun, I compared it with Donoghue v Stephenson, which runs to 25 – four lengthy speeches, and a short one from Lord Tomlin.

New IPso Jure monthly podcast

OK, "monthly" is a bit of an exaggeration, but they will be from now on. The March edition can be downloaded from here - if you left-click it will start playing in your chosen media player, but if you right click you should get the choice of downloading it. The notes are available here.

I am branding the podcasts with the IPso Jure name, a bright idea that came to me this morning: there will also shortly be an IPso Jure Newswire, the March edition of which is in preparation. Depending on feedback, I might be doing that weekly. As ever, I value constructive comments.

I also plan in the fairly near future to offer CPD points with the podcast - for which a modest fee will be payable, unless some kind sponsor finances the whole exercise. More news in due course.

Liability for defamation introduced by search engine

Search engines collect information about stories appearing all over the web, and present them to the searcher with no real context. What if the search engine results present snippets of information in a way that implies something defamatory? This was what happened in Budu v The British Broadcasting Corporation [2010] EWHC 616 (QB) (23 March 2010), where the complaint was firstly that the BBC had published items on its news website and secondly that snippets appearing in a Google search were also defamatory.
To deal with the first problem, the BBC attached what are known as Loutchansky notices to the articles (see Loutchansky v Times Newspapers [2001] EWCA Civ 1805). These state (they are, of course, still there to see) that Mr Budu denies the allegations in the first story, and that the article is subject to legal proceedings. Anyone searching on the claimant's name would not find the first, allegedly defamatory, article: however, they would find the follow-up ones in which the denial is reported, and could follow a link back to the original story in which his name is not mentioned. The notice serves to put the BBC in the clear, and anyway taking the claimant's "trenchant and detailed factual rebuttal", as reported by the BBC, into account, the judge (Mrs Justice Sharpe) found in favour if the BBC.
She also struck out the claims relating to the republication on Google. The principle that search engines themselves are not liable was established in Metropolitan International Schools Ltd v Designtechnica Corporation & Ors [2009] EWHC 1765 (QB) (a judgment of Mr Justice Eady), and Mrs Justice Sharpe saw no reason for the BBC to bear any liability for the republication: "It would not be appropriate or just in my view to make the publisher of the original webpage responsible in law for a snippet which makes a defamatory allegation (for example, because it detaches certain words from their context) not made in the original webpage itself," she said.

Ethiopian coffee trade marks prevail - in Japan

The African Press Agency reports (via Net News Publisher) that a Japanese court has overturned a decision of teh Japanese trade marks office cancelling registration of Sidamo and Yirgacheffe as trade marks. The All Japan Coffee Association challenged the registration on the grounds that the names were geographical, referring to where the coffee came from.
I am partial to Sidamo, and will now be looking out for Yirgacheffe to try - but the Sidamo coffee in the cupboard in our kitchen bears a Sainsbury brand. I can't help feeling that the trade mark system is being misused on both sides here: that these aren't names that are apt to be registered as trade marks, but at the same time that there's no reason why the All Japan Coffee Association should be resisting it. After all, they are (surely) not proposing to label coffee not grown in those areas of Ethiopia with those names?
Both are registered as CTMs, and have been for some years, in the name of the Government of Ethiopia. They don't seem to have PDOs or PGIs, but perhaps they are just doing the best they can with the means available at the time.

Limiting liability: what is a direct loss?

The differnce between direct, indirect and consequential loss always bothers me. I probably didn't pay enough attention to Professor Atiyah back in 1975. In a recent case (GB Gas Holdings v Accenture [2009] EWHC 2734 (Comm) (06 November 2009)  the Commercial Court considered  limitation of liability clause in the contract which provided:

16.2 Consequential Loss

Subject to Clause 16.7 or as otherwise expressly provided in this Agreement, in no event shall either Party be liable whether in contract, tort (including negligence) or otherwise in respect of any of the following losses or damages:

16.2.1 loss of profits or of contracts arising directly or indirectly;

16.2.2 loss of business or of revenues arising directly or indirectly;

16.2.3 any losses, damages, costs or expenses whatsoever to the extent that these are indirect or consequential or punitive;

It was common ground that the words "directly" and "indirectly" in Clause 16.2 referred respectively to the first and second limb of the rule in Hadley v Baxendale (1854) 9 Exch. 341:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of it.

The Court found that Centrica could claim as direct losses:

• sums paid by Centrica to gas distributors based on incorrect data about customers' gas consumption provided by the IT system;
• compensation paid to Centrica's customers for the poor service and billing problems;
• additional borrowing charges incurred to finance the business due to late billing or non-billing;
• the cost of chasing customer debts which were not actually due; and
• additional stationery and correspondence costs required to keep customers up to date on fixing the issues.

... which was, in effect,  everything that Centrica had claimed.  So, a generous definition of direct losses and, although the judgment simply reiterates the Rule in Hadley v Baxendale, it's useful to have clarification, although perhaps my classmates got this first time round.

When an account of profits is not right

OUT-LAW.com reports a (two-month old) High Court decision that a venture capital company that breached the confidentiality of businessmen who came to it with a proposition should only have to pay damages as compensation and not a share of their profits from the deal. Vercoe & Ors v Rutland Fund Management Ltd & Ors [2010] EWHC 424 (Ch) (5 March 2010) involved the acquisition of a pawnbroking business which the VC firm later floated – in breach of the confidentiality agreements made with the two men. Mr Justice Sales found that there was a breach of confidence, and it looked as if an account of the profits made by the VC on the flotation would be an obvious measure of damages. Too obvious, perhaps. The judege took the view that because this was a breach of a contractual obligation of confidence, not a fiduciary one, and because it didn’t involve information about a secret design or process or anything else analogous to intellectual property, damages should be awarded on the basis of what it would have cost the VC to buy out the claimants. It wasn’t a shabby amount: £860,000 for one and £1.72m for the other, based on the equity the judge thought they would have been given, but against a profit of £29m it’s not such a lot.