Tuesday 31 May 2011

Which is the true successor to Lotus?

The delightful Mr Justice Peter Smith - one of the very few High Court judges with whom I have had more than a passing encounter, chatting to him over a glass of wine at a reception a few years ago and successfully avoiding any mention of Da Vinci, Jackie Fisher, or other topics that might have proved contentious - has now decided grand prix motor racing's biggest dispute: Group Lotus Plc and another v 1Malaysia Racing Team SDN BHD and others [2011] EWHC 1366 (Ch). It was always going to be a bit of a disaster, having two teams using the name, but at least it was one of what is still referred to as the new teams against one of the second-tier teams, the group following in the tyre tracks of Red Bull, McLaren and Ferrari. There's a precedent, of sorts, in the form of Red Bull and Toro Rosso, another pair of teams that only occupy the same piece of track when the one is lapping the other, but Lotus and Lotus - even if, strictly speaking, it's Lotus Renault GP and Team Lotus. The issue is compounded by Team Lotus using Renault engines, and it's customary to include the engine-maker in the full name of the car - or at least it used to be, not necessarily as far back as Brabham-Repco, Eagle-Westlake, Cooper-Maserati and the like. Even Lotus-BRM, using the fantastically mad, incredibly complicated and phenomenally unreliable H16 engine.

In the mid-eighties Lotus used Renault engines, so there is some historical precedent for that connection - although none of the named parties seems to have much to do with the holders of the name back then. Team Lotus and Lotus Engineering were split as long ago as 1954, so there have been two entities using the Lotus name for a good while, and the relationship between them has been complicated to say the least - many of the 388 paragraphs of the judgment are devoted to tracing the history, with the assistance (heavily discounted by the judge, though I think without casting aspersions on their integrity) of several motor racing journalists and writers including my old friend Karl Ludvigsen. So probably best not to spend much time on the history here - read the judgment or one of the many histories of Lotus (or Colin Chapman: Inside the Innovator by Karl Ludvigsen (Haynes, 2010)).

The case has a lot more to do with the facts than with the law, but it does serve as an object lesson in how to create problems. The judge held, in summary:

  • Team Lotus Ventures Limited (TLVL, the second defendant) owns the goodwill associated with the Team Lotus name and roundel
  • Group Lotus's claim to the name should be dismissed
  • TLVL's trade marks be revoked for non-use since at least 2003, when TLVL was not involved in Formula 1 racing
  • TLVL was entitled to register new trade marks for its name and the roundel device (so in due course it will have a statutory defence to an infringement claim again)
  • TLVL's use of its name did not infringe Group Lotus's trade marks in the name Lotus 
  • 1Malaysia (the first defendant) was not to be restrained from using the name Team Lotus by reason of a licence agreement between it and Group Lotus in 2009
  • 1Malaysia had been in breach of the licence agreement in failing to obtain approval for the manufacture and sale of 'Lotus Racing' merchandise in 2010, this licence having been validly terminated by Group Lotus in September 2010
Having started out sympathetic to to Team Lotus, whose efforts on the track so far have been pretty impressive, I am persuaded in particular by the evidence about the breach of the licence agreement that I should stick with Renault, whose factory I had the pleasure of visiting a couple of years ago. The judgment relates how the first defendant's director of marketing, Mr Choy, was denied sight of the licence agreement - a strange way to deal with your own director of marketing:
302.When he finally saw the Agreement in June 2010 he sent an email ...stating:-

"We have breached every clause in this Agreement there is to be breached".
303. In that he is correct.
    That brings to mind some classic lines from the Da Vinci Code case, and certainly doesn't suggest an approach to business that one might admire.

    The judge also expressed regret that the parties should have chosen to fight their differences out in the courts not on the racetrack. I dare say the defendants would be only too pleased to get within reach of the claimants - perhaps they will sometime. As it was, on Sunday, they managed 13th and 14th places, while the claimants got 8th place with their other car finishing in the barriers (through no fault of theirs, or the driver's, who ended up in hospital though evidently not injured). Both teams are adding significantly to the entertainment value of the racing this year: a pity litigation has to cast a shadow over that. Still, another interesting addition to the Formula One IP Casebook.

    Monday 30 May 2011

    The Hargreaves Review in detail: Copyright exchange

    The Review concluded that there were too many patents about - it didn't say there was also too much copyright, but I see this as a big problem. And the solution is a higher standard of originality, as promulgated by the Court of Justice in the Infopaq case - applying the "author's own intellectual creation" test across a far wider range of copyright works than we ever thought it was supposed to apply to.

    That, however, does not feature in the Review, although it might provide a solution to the Google Problem that lies at the heart of the Review. Instead, it addresses the problem that the "creative industries" face by proposing a mechanism for granting licences - a copyright clearance centre.

    First, though, what is this rubbish about "creative industries"? A company cannot be creative: only a human being can do that. Still less can industries be creative. Our copyright law properly gives protection to the commercial interests that turn one or more persons' creative work into a paying proposition - record companies, publishers, film studios, broadcasters - but in no way are they creative, and for that reason their rights are defined differently and protected for a shorter time. Computer game companies, web technology companies, app developers - they take the work of creative people and commercialise them. They are engaged in publishing. They might bring together teams of talented people who together will be more creative than they would be alone, but that does not shift the centre of creativity - that remains, unchangeably, with the individuals.

    That said, the prospect of a Digital Copyright Exchange is exciting and inventive - a creative solution to the problem. However, it is not entirely novel, as the last Government tried to encourage industry to form a comparable Digital Rights Agency. Given the jealous way in which IP owners guard their rights, it might be like asking turkeys to support bringing Christmas forward, but if implemented properly the idea could provide a robust and reliable means of identifying, clearing and enforcing rights in digital content. I can't see it working well without an element of compulsion - well, without a lot of compulsion - though that could come from the market rather than from the law. It means that copyright will become less of an exclusive right, more a right to receive remuneration for the use of one's work It might also be a step towards a copyright registration system - which could be another useful device for cutting back the excesses of a system that is simply protecting too much. Another matter that fell outside the Review's terms of reference.

    The Hargreaves Review in detail: Copyright exceptions

    Thank goodness, the Big Thing that the Prime Minister seemed to be hoping for from Hargreaves was rejected by the Review: a "fair use" exception to copyright. Do the many people who seem to think this is unfortunate understand the exceptions we already have in our law, I wonder? (And at a time when judges are being criticised for fashioning a law on privacy from the legislative clay of the Human Rights Act does anyone really want judges elaborating new exceptions to copyright protection?) They don't fall far short of fair use anyway - and being more precisely targeted there's less danger of collateral damage.

    The important issue is that new technologies enable us to use copyright material in new ways - ways which don't necessarily prejudice the economic interests of the copyright owner, and therefore have no effect on the incentive to create. Format shifting is a case in point: the economic interests of the copyright owner should be exhausted once an individual has paid for an authorised copy of a recording. The buyer (who probably thinks of himself or herself as the "owner" of the "music", a misconception that the law could usefully try to find ways to dispel) ought to be free to rip the recording from the CD to put a copy on their personal digital device - free also to make a digital recording from their vinyl record collection. Although the last Government promised a new exception to allow these activities, it failed to deliver and in the UK, unusually, copying lawfully purchased material to other formats remains unlawful without a licence - which the record industry has expressly given, via its trade body. Still, a legal exception would be better than what we have at present.

    The reason this remains an outstanding issue is that it is so difficult to define the scope of an exception within the constraints of the information society directive (which is increasingly being called the Copyright Directive, as if it were the only one and had comprehensive coverage) and without introducing a levy system, something successive governments (since at least Mrs Thatcher's) have refused to countenance.

    There will also - if the Review be implemented - be a new exception for parody. I firmly believe that in the field of literature and art parody requires no exception: a good parody involves nothing remotely like copying. In music it's more complicated, but a licensing regime would surely be preferable to allowing free use for purposes that fall within the hard-to-define category of parody. Where the parody consists of setting new words to someone else's music, the person availing themselves of the musical work should do so on proper terms - although the copyright owner's right to prevent it should be based only on moral rights (an area which Hargreaves didn't get into, but which could usefully be tightened up in this area). Video as parody seems to be the hot topic at present, and Newport State of Mind the paradigm case - removed from YouTube at the behest of the copyright owner. Shame on you! What harm was it doing to the copyright owner's interests? And over and above that, if a royalty had been paid for the use of the music, I can't see how there could be any realistic objection.

    Less contentious will be the proposed exception for non-commercial research for text mining and data analysis, freeing up the results of academic research - making usable material which has often been paid for by the taxpayer and which should therefore be available for general use, not locked away in the vaults of whoever created it (or employed the creator). Non-commercial it would have to be, given the limits of the Directive, and this would deprive it of a lot of useful effect, but I hope the problem is not in any event a big one given that copyright has no business protecting information, or databases given the high-level requirement for originality in that field (which the Court of Justice suggested in Infopaq should, via the information society directive, be applied more generally in the copyright world - a Good Thing, I think, but one that seems to have escaped comment from the Review).

    Finally, libraries and archives should have wider rights to make copies to preserve material in their collections - extending the existing rights to audiovisual works and sound recordings. Having been involved with a priceless archive of sound recordings on deteriorating tapes, I can certainly applaud that idea.

    The Hargreaves Review in detail: Patents

    Being concerned with innovation and growth - the matters identified by the Prime Minister when he announced the Review - Prof Hargreaves unsurprisingly devotes a chapter of his report to patents, and having got up a head of steam with my last posting I'll elaborate on what the Review had to say here.

    The big problem is that there are too many patents, if I may put words into the good Professor's mouth, which is unfortunate given that patenting activity is so often seen as an indicator of innovative activity - so more patents are a Good Thing. The Review has evidence that this might not be the case.

    Myriad patents form what the Review calls “patent thickets”, areas where too many patents crowd a market and prevent innovation, as identified originally by Carl Schapiro (of University of California, Berkeley - full reference in my Dictionary of Intellectual Property), who doesn't seem to be quoted in the Review. A different matter from a minefield of patents, where all the patents are filed by the owner of the central one and serve to protect it, and which I thought had died out in Europe at least, because of expense of obtaining them.

    As an example, Hargreaves explains how one smartphone might be the subject of hundreds of patents. He identifies computer technologies and telecommunications as the areas most affected by patent thickets, areas where there is sequential innovation that encourages the growth of thickets. But this is often the inevitable result of technical standardisation and does not amount to the sort of patent thicket that obstructs innovation in the way the Review is worried about. Having patents impacting on standards is of course a problem in itself - one with huge competition ramifications, which happily are fairly thoroughly dealt with under that rubric (although there's always room for improvement).

    No, I think the problem lies in the phrase I put into Prof Hargreaves's mouth: too many patents. Too many patents for incremental inventions - leading to thickets and minefields - and exiguous technical developments. Not that they are always necessarily a bad thing, of course, but when they grow into an impenetrable thicket something has gone wrong. But patents too often seem to become ends in themselves, not just means: that's what trolling is all about, of course, but it's also encouraged by investors - yes, including those Dragons - who insist on seeing a patent before they will invest (but, in my experience, don't do any due diligence to establish whether the patent stands a chance of protecting what they want to protect). Often, the investor will put money in on the strength of a patent application - and the inventor will have a sigh of relief at having someone else to foot the bill for prosecuting the application, and for the foreign filings.

    Too many patents for stuff that really has no place in the patent system, too. Software and business methods are rightly excluded as such: there is no such thing as a software patent, though there are many in that grey area where software is claimed to have a technical effect - a notoriously slippery concept. Professor Hargreaves proposes preventing patents getting into these areas, where the incentive effect is small compared with the overheads imposed. His Review also suggests resetting financial incentives for assessing whether to renew patents, and ensuring that only high quality patents are granted in the first place: easier said than done, given that one concern of the patent system must be to encourage everyone with a patentable invention to come forward lest the next great invention be lost.

    The quality of patents will be enhanced with international co-operation - the highways that have been created between some of the larger patent offices in the world. Hargreaves also recommends that international searches conducted under the PCT be accorded greater credence - which will also help to clear backlogs of applications (and result in more patents ...). The review also recommends that the UK government push for the unified patent, and (even harder) EU patent courts, both worthy and uncontentious aims but ones that the UK can only hope to influence, not achieve

    Lodsys: Has a non-practising entity finally bitten off too much to chew?

    Earlier this month Lodsys, LLC approached a number of developers of applications for Apple products, inviting them to fork out for licences to use four US business methods patents (details here, on Lodsys’s own website). Apple has taken up the cudgels on apps developers’ behalf, responding to Lodsys with a stern letter. If Lodsys thought they could get away with going after small companies and (perhaps) individuals, they should have received a clear message that they were mistaken. If as they assert they are merely going after those who benefit most directly from using the patented “technology”, drawing a very strained analogy with the fact that it’s the owner of an hotel who is responsible for the service provided to guests, not the owner of the land on which the hotel is built, nor the supplier of the nails that hold the hotel together. I may have become a bit confused – read it for yourself here.

    Apple’s contention is that the developers are all operating within the terms of a licence taken by Apple. Much, no doubt, will turn on the terms of the licence – and it won’t be entirely clear-cut, because knowing who’s doing what with patents like this is never easy. The argument put forward by Apple (which you can read in their letter to Lodsys, which is reproduced on The Guardian’s technology blog here and no doubt can be found in many other locations on the Internet) can be summarised, I think, as any act that needs to be licensed is being done by Apple, not the developers.

    Chatting last week to an apps developer, at fellow-Stackridge fan Mike Southon's excellent if noisy Beermat Monday networking event, I came to appreciate the concern this is causing in the industry. Is it something app developers here need to worry about? Yes and no – mostly yes. The market for apps is clearly global, so while there are no UK patents (or European Patents GB or elsewhere) to worry about infringing, a developer from Silicon Roundabout could still find itself getting sued in where else but the Eastern District of Texas.

    I don’t know what it proves about The Guardian – perhaps that it’s too liberal for its own good, perhaps that it’s fallible – but a few postings up from the one about Lodsys is a plea for US-style patent protection for software and business methods. I read it with mounting incredulity, as did many others whose comments are appended to it – does anyone believe this? Evidently at least one patent attorney does, confirming people’s worst preconceptions about lawyers. Well, to my mind granting a patent if the software gives rise to a novel technical effect is the right approach – although it’s only a start, and that broad statement of principle still risks allowing what are nothing more than straight software or business methods patents.

    Friday 27 May 2011

    Euro-Hargreaves? The Commission's IP Blueprint

    There's a lot of blueprinting going on at present. I hope that the Hargreaves Review and the Commission talked to each other, because both have come up with comprehensive reviews within a few days of each other. On 24 May the Commission stuck its oar in, and several recommendations overlap or are identical with those of the Hargreaves Review - which might be an indication of the futility of trying to deal with intellectual property policy at the national level ... Commissioner Barnier said:
    IP is the key to innovation – and the word property is the key for an inventor to have the incentive and get the funding for innovation.
    Hmm. That could cause controversy, in itself. Property? Is there no alternative? And is there a suggestion of the "means and ends" problem here?

    The Commission recommends (in the words of its press release (IP/11/630) - I am under pressure of time, but will return to this and deal with it in greater detail another time):

    • Patents: the Commission already launched proposals in April for a unitary patent protection under enhanced cooperation (see IP/11/470). Meanwhile, work will continue on proposals relating to the creation of a unified and specialised patent court for the classical European patents and the future European patents with unitary effect. This would considerably reduce litigation costs and the time it takes to resolve patent disputes. It would also increase legal certainty for business.
    • Trade marks: while trade mark registration in the EU has been harmonised in Member States for almost 20 years and the Community trade mark was established 15 years ago, there is an increasing demand for more streamlined, effective and consistent registration systems. The Commission intends to present proposals in 2011 to modernise the trade mark system both at EU and national levels and adapt it to the Internet era.
    • Geographical indications (GIs): GIs secure a link between a product's quality and its geographical origin. However, there is currently no such system available at EU level for the protection of non-agricultural products such as Carrara marble or Solingen knives. This leads to an unlevel playing field in the Single Market. The Commission will therefore carry out an in-depth analysis of the existing legal framework in the Member States as well as the potential economic impact of protection for non-agricultural GIs in 2011 and 2012. Depending on the outcome of an impact assessment, these could eventually be followed up by legislative proposals.
    • Multi-territorial copyright licensing: While the substantive scope of copyright has been largely harmonised, rights are still licensed on a national basis. In view of the digital Single Market, streamlining copyright licensing and revenue distribution is one of the most important challenges that must be addressed. In the 2nd half of 2011, the Commission will submit a proposal to create a legal framework for the efficient multi-territorial collective management of copyright, in particular in the music sector. It will also establish common rules on the transparent governance and revenue distribution. In the second half of 2011, the Commission will also launch a consultation on the various issues related to the online distribution of audiovisual works.
    • Digital libraries: The creation of European digital libraries that preserve and disseminate Europe's rich cultural and intellectual heritage is key to the development of the knowledge economy. To facilitate this, the Commission is also tabling today a legislative proposal that will enable the digitisation and online availability of so-called "orphan works" (works like books and newspaper or magazine articles that are still protected by copyright but where the right holders are not known or cannot be located to obtain copyright permissions) – see MEMO/11/333. Concurrently, the Commission looks forward to concluding a Memorandum of Understanding amongst libraries, publishers, authors and collecting societies to facilitate licensing solutions to digitise and make available out-of-commerce books.
    • IPR violationsCounterfeiting and piracy are a growing threat for the economy. Between 2005 and 2009, the number of registered cases at the EU borders of goods suspected of infringing IPR increased from 26 704 to 43 572. Meanwhile, the creative industry estimates that piracy has cost the European music, movie, TV and software industry €10 billion and more than 185 000 jobs in 2008 alone. The Commission is set to intensify its efforts in this area. Firstly, the Commission has tabled a regulation today that is to reinforce the European Observatory on Counterfeiting and Piracy, which it launched in 2009, by entrusting its tasks to the Office for Harmonisation in the Internal Market (OHIM). This will allow the Observatory to benefit from OHIM's intellectual property expertise and strong record of delivery in trade marks and designs. The Regulation now passes to the European Parliament and the Council for consideration. Secondly, in Spring 2012, the Commission will propose to revise the IPR Enforcement Directive (see IP/04/540). The Directive provides for civil law measures allowing right holders to enforce their intellectual property rights but should be adapted, in particular to meet the specific challenges of the digital environment.
    • IPR enforcement by customs: Customs supervise all trade crossing EU external borders: they carry out controls for many purposes and have an essential role in fighting the trade in IPR infringing goods. In 2009 only, customs intercepted over 40 000 suspect shipments involving 118 million articles. Whilst the majority of goods intercepted are counterfeit or pirated, customs' unique position at the border allows for the enforcement of a wide range of intellectual property rights. As part of today's overall IPR strategy, the Commission also proposes a new customs regulation, to further reinforce the legal framework for customs' actions. The proposal also aims to tackle the trade in small consignments of counterfeit goods sent by post as the overwhelming majority of these goods results from internet sales.
    I like the parallel with the engineering process of blueprinting - though I don't think the verb meaning was intended by the Commission, or anyone else who uses the word in this context:
    Dismantling engine and reassembling it to exact specifications and tolerances. This process may help to improve engine performance, smoothness, and reliability. (Dictionary of Automotive Terms.)
    The intellectual property system (if I may be forgiven for using such a loose expression) would certainly benefit from this. However, Wikipedia sounds a cautionary note:
    Ideally, blueprinting is performed on components removed from the production line before normal balancing and finishing. If finished components are blueprinted, there is the risk that the further removal of material will weaken the component.
    Perhaps, then, we're too late. Or maybe the important point is that no-one is suggesting the removal of material from it ...

    New Russian IP agency announced

    President Medvedev announced the creation of a federal intellectual property service last Tuesday, according to this report from RIA Novosti, the state news agency. It seems that it will bring together Rospatent (the Russian Agency for Patents and Trade Marks) and FAPRID (the Federal Agency on Intellectual Property Protection) and the report suggests that it is intended to help Russia qualify for membership of WTO.

    The trouble is, benchmarks in international intellectual property protection tend to be set by the United States, whose policy seems to be dictated more by what Hargreaves called lobbynomics than an evidence-based approach. Russian membership of WTO, a cynic might think, is dependent on it enacting legislation and establishing institutions to the satisfaction of a small number of large US corporations. It adds to the impression that intellectual property is now an end in itself, not the means to an end - an impression reinforced by some of the Hargreaves proposals and by the European Commission's latest pronouncements. Russia's creation of a new agency reminds me of the empire that the government has built around our own Patent Office, which I don't believe is the right institution to be promoting ... what? The problem is, even if it characterises its activities as promoting innovation, it looks much more like promoting intellectual property. Means and ends again.

    Tuesday 24 May 2011

    The Hargreaves Review in Detail: sources of advice for SMEs

    The Hargreaves Review recommended that the IPO draw up plans to improve the accessibility to the IP system to "smaller firms who will benefit from it". Does that mean that it will remain closed to those who won't benefit, or that a benefit will flow pretty well automatically? Well, OK, I think I know, but this Report is not written in the sort of clear unambiguous English that should be employed. A thought crossed my mind yesterday about the problems of getting a professor of journalism to write a report - but I decided I'd better not express it publicly.

    It also recommends that this should include access to lower cost providers of IP and commercial advice. Lower cost than what? A magic circle firm's hourly rates? I work for lower rates than that - frequently for very low rates - but the clients are not beating a path to my door ... The Daily Telegraph picks up on this today, or rather picks up on the comments of a small firms lobbying organisation - "lobbynomics" again? No, not in this case - saying that the Intellectual Property Office isn't actually qualified to do this. The Review does mention this as a possibility but more in the way of reporting what respondents asked for - it isn't included in the recommendation.

    Two important points spring to mind here. First, solicitors are business advisers in a way that the Review doesn't seem to have looked into. Of course there are many who'll confine themselves to advising on the law, but a good solicitor will give that advice in the context of the client's business. They will be well able to talk to the client about protection, strategy, licensing - all the things that Hargreaves seems to find lacking. And while some will rack up the fees, many will give initial advice free of charge - some will even have the flexibility to defer charging (something I have done recently, in a small way, for a couple of start-up clients), even to consider taking an equity stake in the business perhaps - certainly something I'd happily have done had I been a sole practitioner. the problem is that small businesses - the very ones that need the advice - are frightened about pursuing it.

    What is needed - what fits with Hargreaves's recommendation - is clinics at which small businesses can have a short initial free-of-charge consultation with a professional adviser - exactly what my friend Jane Lambert of NIPC has been doing in what she insists on calling the North, but which lies south of the Tees - well, I suppose everything's relative - and indeed elsewhere. This is how the professions should be reaching out to clients, and to be fair many of them are doing so.

    A second point arises out of the IPO's credentials for providing advice. They know their way around the patents system, and the trade marks one and the registered designs one, though I suspect (and would be interested to find out for sure) that an examiner would be too specialised to talk in general terms about a business's IP needs. Do they ever move from one discipline to another in the IPO? And wouldn't any advice they gave tend towards extolling the benefits of getting patents, trade marks, registered designs? Would they be impartial enough?

    There's a widespread tendency to equate patenting activity and innovation. The number of patents filed is a potential guide to the amount of innovation going on, although it would be skewed by businesses filing myriad patents to create minefields - the sort of thing deprecated by Hargreaves as "patent thickets" though what he calls a thicket isn't exactly what we meant by the expression before he redefined it. A patent is not a ticket to prosperity, and a lot of money can be wasted on them (as Jane Lambert described in her book “Enforcing Intellectual Property Rights: A Guide for Businesses and Creative Individuals” Gower 2009). Would setting up the IPO as a source of advice risk this happening? Anyway, I am already concerned by the way the IPO spends public money (not, I guess, taxpayers' money, because it's a trading fund so it makes its own money) in competition, to a degree, with private practioners - who are, of course, taxpayers ... Not to mention the way they trivialise everything with Wallace and Gromit. But so long as their activities are constrained they should help to raise awareness and create work for the professions - that should certainly be the goal - and it's from the professions that the advice should come.

    Now, setting up a sort of legal aid fund to enable small businesses to get the advice they need, and to fight the IP bullies who they will inevitably have to deal with, that's another matter.

    Saturday 21 May 2011

    Hargreaves in brief

    Digital Opportunity - A Review Of Intellectual Property And Growth is the title of the report published in May 2011, commissioned last year by the government from Professor Ian Hargreaves. The Government - indeed, the Prime Minister himself, launching the Review at the same time as his scheme to turn the Old Street roundabout, right by our office, into a hub for digital industries - was concerned that the current intellectual property framework did not adequately promote innovation and growth, and the Review's terms of reference reflected this: many have recognised a more general need for copyright law to be updated, but Prof Hargreaves did not have carte blanche (or the time, or the resources) to cover the whole field. So there's nothing about trade marks (except a mention of counterfeits) and little about designs (although what there is is pretty important). Harder to understand, there's no mention of open source or Creative Commons and no relevant mention of public domain (surprising, given that James Boyle was one of the panel who advised the review). That much I can work out with only the PDF reader's search function to help me - although I know I have to be careful: I asserted on Twitter that it didn't say anything about software patents - which was true, as far as it went, but it does say quite a lot about patents for computer programs.

    While it was encouraging to see the Prime Minister getting to grips with this issue early in his term of office, it was hardly a new departure. The previous government commissioned a comprehensive review into our intellectual property laws,  and in December 2006 the Gowers Report made 54 recommendations many of which have not been heard of since. The government followed that up with its Digital Britain report. In the last government's final fling, that spawned the Digital Economy Act which amongst other things tries to deal with copyright infringement online. Those provisions were recently subject to a judicial review, which gave them a fairly clean bill of health.

    The Hargreaves Report is 123 pages long - not much shorter than the Gowers Report , but with only 10 recommendations, which struck me at first glance as short-changing those of us who have been looking forward to seeing it. But it was a self-imposed target, and to meet it the report makes some pretty sweeping recommendations, incorporating several sub-recommendations, so perhaps there is not such a big difference in the weight of their recommendations. In summary, the recommendations are:

    1 Evidence-based policy-making. The Government should ensure that as far as possible the development of the intellectual property system is driven by objective evidence.

    2 International priorities. The UK must protect its interests at the international level and in in particular will have to keep an eye on what is happening in emerging economies such as China and India. The UK's  position must be based on economic evidence. The UK should also seek to get a unified EU patent court and patent system as a matter of the highest priority. It should also work to make the Patent Co-operation Treaty more effective, in particular by ensuring that international search reports carry greater weight than they sometimes do.

    3 Copyright licensing. The review recommends the establishment of a cross sector Digital Copyright Exchange to facilitate access to transparent, contestable and global digital markets. The review suggests that there should be a senior figure appointed to oversee the design and implementation of the proposed exchange by the end of 2012 (yes, the ambiguity is in the Report, but I assume that's not merely the target date for the appointment). The government should support moves by the European Commission to create a framework for cross-border copyright licensing. As a major exporter of copyright works, this will bring benefits that UK.

    4 Orphan works. The Review recommends that legislation should be passed to enable licensing of orphan works, establishing an extended collective licensing scheme and a clearance procedure for the use of individual works.

    5 Limits to copyright. Over-regulation of activities which do not prejudice the central objective of copyright (providing incentives to creators) should be firmly resisted. The review recommends that the Government should deliver copyright exceptions at the national level, taking advantage of all the opportunities offered within the the EU legislative framework. This will include format shifting, parody, non-commercial research, and library archiving. At the EU level the UK should also promote an exception to support text mining and data analytics, as too much valuable information is locked up in databases. It should push at the EU level to develop a new copyright exception designed to make the legislative framework adaptable to new technologies.

    6 Obstructions to innovation. The review recognises that the patent system can be detrimental to innovation, and identifies patent thickets as a significant problem. It recommends the government to take a leading role in promoting international efforts to cut backlogs and to manage the boom in patent applications. Steps should be taken to ensure that patents do not extend into sectors which they do not currently cover, such as non-technical computer programs and business methods, unless there is clear evidence that there will be a benefit. It should also investigate ways of dealing with patent thickets which include working at the international level to establish a fee structure set by reference to innovation and growth goals.

    7 Designs. the role of intellectual property in the design industry has been neglected, and the Review suggests that in the next year the Intellectual Property Office should conduct an evidence-based assessment of the relationship between design work and innovation. It will then be better able to evaluate policy at the UK and European level.

    8 Enforcement. Hargreaves recommends that the government should have an integrated approach to the enforcement of intellectual property rights, including education and measures to strengthen and "grow" (sorry, I have to make clear that's a quote - that usage really grates, and one does not grow markets like vegetables, one develops them, allows them to grow,even encourages them to do so but they grow themselves) legitimate markets in copyright and other fields. The enforcement regime of the Digital Economy Act will become operational next year and the Review recommends that its impact be carefully monitored and compared with the experience of other countries. Enforcement mechanisms may need to be adjusted as market conditions evolve. To enable rights holders to enforce their rights the government should introduce a small claims track for low value IP claims in the Patents County Court.

    9 IP advice to small firms. The Review calls on the Intellectual Property Office to draw up plans to improve smaller companies' access to the IP system. This will involve giving them access to lower cost providers of integrated IP legal and commercial advice.

    10 Responsiveness. Finally the Review recommends that the Intellectual Property Office should be given the necessary powers and mandate in law to ensure that it focuses on its central task of ensuring that the UK's intellectual property system promotes innovation and growth through efficient, contestable markets. Specifically, it says that the IPO should be able to issue statutory opinions where they will help to clarify copyright law.

    So, quite a wide-ranging menu for the government to choose from (although I guess they shouldn't choose, they should take everything on it). Next I'll consider some of these recommendations in greater detail.

    Wednesday 18 May 2011

    Boyle's Law

    The FT this morning carries this piece by James Boyle about the Hargreaves Report, even before the report has appeared. Prof Boyle says on Twitter (@thepublicdomain) that the FT should have hung onto it until after the Review appeared: to which I say, as I have said before, if the Hargreaves Review had made use of its blog which the Intellectual Property Office set up and actually given us something useful to go on there'd be less need for leaks. I am still deeply unimpressed by the fact that the blog, and the web pages, were updated so infrequently - and even this morning the front page still carries a March date, since when if I remember correctly there's been one posting on the blog - and very little on Twitter. If some form of purdah had to be observed, we should be told ...

    Prof Boyle starts with the Prime Minister's claim that Google says it could never have started its business in the UK, and I think it's about time someone asked, is that a bad thing? Maybe what's wrong with copyright law is that in one place in the world it encouraged the establishment and growth of a business that seems sometimes to have taken to dictating what, in practical terms, copyright law says. Maybe it's the American law that needs tightening up: maybe (and now the European Commission, Competition Directorate, is seised of a small part of the matter) it's that Google needs to be regulated.

    Anyway, to come back to the Review. Prof Boyle answers one of the questions I have been wondering about, namely whether the report was going to say anything about any other of the bundle of rights that make up "that property that is called intellectual" (per Benjamin Constant: get a copy of my Dictionary to follow the reference) in his article - here are the headlines I have distilled from his piece, which says there are 10 specific recommendations covering patents, copyright, and the policy-making process:

    1. Do something to stop the growth of, and to clear, patent thickets
    2. No patents for software or business methods
    3. Patents don't work well in fields where there is "sequential innovation", such as IT
    4. Deal with orphan works by  a mixture of collective licensing and individual exemptions
    5. Deal with the "tangled web" of licensing
    6. Make IP policy evidence-based (it uses the word "lobbynomics" to describe the current approach to making policy)
    7. An open-ended fair use exception in copyright is not permissible under EU law (notwithstanding Lionel Bently's arguments to the contrary) so we should first "max out" (Prof Boyle's words) the exceptions that are allowed, liberalising format shifting and archival copying, facilitating text and data mining of scientific literature, giving "more robust protection" to parody and criticism, and pushing the EU to make the system of exceptions more adaptable to the needs of new technologies
    I guess to make ten out that you have to break down item 7 into constituent parts. It's clear that there's also something on enforcement with which Prof Boyle finds himself in disagreement, and he mentions that the Digital Economy Act is still "deeply problematic" (another example, perhaps, of the British irony that he elegantly lauds elsewhere in the article: understatement, at least). From that summary, it doesn't look as if there are many solid recommendations for legislation, although Prof Boyle had a small area of newsprint (or online space) to cover it. Item 4 is the part revealed in the FT earlier this week which I blogged about at the time, and it looks to me like a good one. Item 2 is pretty clear and straightforward, and no doubt impossible - though it should be possible to wind things back a bit, and it would surely be desirable to do so. How to implement item 1 is not clear (perhaps it will be when we see the report) and item 3 seems to be no more than an interesting observation - one that might prove influential in an evidence-based policy.

    I can't really complain, as I didn't present any suggestions to the review, but I am disappointed to see nothing about the overreaching effects of the trade mark system or the chaos created by the manifold laws on designs (and no, I'm not talking about BL v Armstrong). But I am looking forward to seeing the full report - and hope it will be as elegantly expressed as Prof Boyle's article.

    Monday 16 May 2011

    The Relentless Progress of the Absolutists

    The Mail Online - which, for reasons that I can't begin to comprehend, although it might include the fact that they have published a couple of pieces by me, is the most-visited UK national newspaper website, by a long way and has been for a long time - reports that a four-year trade mark dispute between Relentless Records, whose artists include the excellent KT Tunstall whom I first heard at the Talkin Bob Dylan Blues show at the Barbican several years ago, doing superb versions of Tangled Up In Blue and Simple Twist of Fate, and the Coca Cola Company is heading for court. Coca Cola's RELENTLESS energy drink brand could have co-existed peacefully with the record label - but not once it started to be used for sponsorship at music festivals ...

    According to the report, the record company, which has been around since 1999 and which has registered trade marks going back to at least 2000, has become fed up with waiting for the other side even to agree to mediate, and has issued a writ, as we used to call them. The Mail quotes Shabs Jobanputra, a co-founder of Relentless Records, saying: 'Artists and managers are asking if we've been bought up by Coke. Some artists don't like that kind of corporate association.' Quite. Some consumers, too: I have added Relentless to the long list of brands I won't buy. 'We've been trying to resolve this for four years but their attitude is "Let's see how much money you've got".' Not at all edifying: another indication of a failing trade mark system. And why is that energy drink manufacturers seem to be such bad offenders? Is it a side effect of their products?

    Hargreaves and fair use

    The FT article mentioned in my previous post also refers, though almost as an afterthought, the question of aligning copyright with what consumers actually do - meeting their legitimate expectations, you might say. I don't think anyone ever suggested meeting illegitimate expectations, though what is and isn't legit does involve a heavy dose of subjectivity.

    The suggestion is that one should be permitted to "rip" music from a CD onto a digital player or computer, which the law does not permit at present. Indeed, the law does not permit it, although the system of urban myths that usually stands in place of copyright law for most people does allow it. But so too does the record industry, wise enough not to alienate the vast majority of its customers, so the FT's assertion that permitting "ripping" will leave the industry free to concentrate on commercial infringers rings a bit hollow - I don't imagine they are wasting time on non-commercial ones anyway.

    Hargreaves and the copyright Big Bang

    I wonder whether the Hargreaves review will touch on any areas of intellectual property law apart from copyright . Today's report in the Financial Times focuses on the copyright area.
    A revolution in copyright law could make the UK as important a centre for the distribution of digital content as it became in financial services after the Big Bang, the government will be told this week.
    Great! Look at what the Big Bang has left us with. The newspaper tells us that the report will recommend the establishment of a digital rights exchange, which it describes as an "a one-stop online shop for clearing the use of copyright content ". A similar proposal was made in the course of the consultation on the Carter report  although the final report did not adopt it.

    What we have heard about the review so far has all suggested that it will focus on introducing a broad fair use right to replace, or complement, existing fair dealing provisions in copyright law. A clearance centre seems to be a much more balanced approach to the matter. when the Prime Minister announced the review last year he said that Google could never have launched in the UK because of the copyright regime, but it does sometimes seem that Google's  way of dealing with copyright law is to steamroller the rights of common rights owners and try to sort out the legalities later, as the Google Book Agreement illustrates. The FT reports the experience of Spotify and Last. Fm, UK based digital media start-ups, which it says have long complained about the difficulty of securing rights to music and movies for online distribution. If a way could be found to help them do that will more easily, it would be a good thing.

    Film studios and record companies, along with a what the FT refers to mysteriously as "other  content owners" might not agree. The whole history of copyright in recent years has been about their failure to adapt their business models to the new environment. When artists like Radiohead bypass the record labels and sell directly to their fans by digital download, the writing must be on the wall. What do "content owners" (including publishers) bring to the party these days? Not a lot.

    And why should copyright owners, especially those who have merely inherited their assets, retain the power not merely to exploit the copyright they control but also to prevent its exploitation altogether? Maybe a clearance centre would help to remove this chilling effect, too.

    A clearance centre needs some form of compulsion attached to it. In the 1988 Act copyright largely changed from being an exclusive right to being a right to receive remuneration for the exploitation of one's work. At the same time the introduction of moral rights gave creators the ability to protect their reputations. Perhaps what we had in 1988 was an incomplete jigsaw, or perhaps subsequent technological developments have meant that the pieces do not fit together continuously. Either way, it looks as if the Hargreaves Review might help make the picture a bit more complete.

    A new week of intellectual property ...

    The Financial Times gives us a preview of the Hargreaves Review's report, which is promised for Wednesday, while Rebecca Tushnet's blog draws attention to a paper by Christian Handke on the economic effects of copyright, part of the work of the Copyright Policy Research Forum of the National Research Council (of the USA). The NRC has set up a blog to enable participants who can't do so in person to contribute. And they seem to be making better use of it than the Hargreaves Review did of its blog.

    Prof Tushnet's blog also draws attention to a story in the New York Times about the perils of naked licensing - well, presumably naked: Donald Trump has been letting developers use his name, for no small consideration I imagine, and his goodwill has suffered for it.

    Crain's Detroit Business website reports (here, free sub required) that IP litigation in Michigan has declined for the third year running, according to some attorneys - the victim, it seems, of a combination of low plaintiff success rates, meagre damages and speedy routes to trial, none of which attract plaintiffs, especially trolls. But that general statement seems to hold true for patents, and the report notes that trade mark litigation is not suffering.

    Friday 13 May 2011

    Hargreaves Report now due next Wednesday

    It was supposed to be in April, but the BBC News website now tells us that it will be published next week. And it looks as if the Review team remembered it had a blog, and posted an update yesterday. I remain deeply unimpressed by the failure of a public body to keep the public informed about what it is doing.

    The BBC - Will Gompertz - indicates that it will be big on orphan works. No surprise there. I hope it won't neglect the rest of the worlds of intellectual property.

    Wednesday 11 May 2011

    Oh no! Belgian copyright law protects car spares

    In the UK, copyright has been largely excluded from the field of design protection, but elsewhere it still plays an important part. The Benelux legal firm, Nauta Dutilh, reports that they recently acted in a copyright claim for two large French auto makers (I wonder who?) against the distributors of non-original car body parts. There's no special protection in Belgian copyright law for spare parts: like our copyright law used to do in the bad old days, it protects car parts only indirectly, by giving protection to the underlying artistic works.

    The Court of Appeal in Mons, Belgium, confirmed that the parts in question (which were all visible parts) each have their own original character. The court reckoned that the parts’ functions could be achieved using designs very different from those which were actually used. The car makers 
    had adopted at the end of a creative process, in the course of which choices were made based not only on technical constraints such as aerodynamics, interior space and visibility (....) but also for the purpose of contributing to the general aesthetics of the vehicle in which the parts are used. The choices that were made go beyond know-how. Individually, the parts, which make up one component of a complex whole, are the result of intellectual effort by their designer and represent a subjective, aesthetic choice from amongst numerous possibilities.
    At this point, it's worth mentioning that the parts concerned were all visible ones, which is some relief.

    Although the parts did not bear the car marker’s mark, because they are integrated into vehicles sold under these marks and they appear in the car makers' catalogues the law presumes that the rights belong to the car maker. That's an interesting proposition to an English lawyer, though it's presumably likely that unregistered design right here would belong to the car maker as commissioner of the design.

    Although the UK has no copyright worth speaking of for spare parts designs, the Directive preserves the principle of cumulation. Article 17 says:
    A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State.
    That doesn't require Member States to give copyright protection at all, let alone on even slightly harmonised terms, but leaves open the distinctly non-Communitaire possibility of giving whatever protection might seem appropriate.

    Thursday 5 May 2011

    US Department of Commerce slightly irritated by trade mark bullies

    So it seems from its Report to Congress on Trademark Litigation TacticsThere's concern in the States, which echoes concerns here, about how trade marks are being used to bully small businesses. Trade mark bullying was first formally recognised there by Senator Patrick Leahy (D-VT), who defined it thus:
    "When a corporation exaggerates the scope of its rights far beyond a reasonable interpretation in an attempt to bully a small business out of the market that is wrong."
    The Senator took up the cudgels on behalf of his constituent Rock Art Brewery which faced legal action over its VERMONSTER product name from Monster Beverages, an energy drink manufacturer, alleging confusion and dilution. Monster, whose trade mark rights were apparently (and ironically) junior to those of Brooklyn Brewery, eventually backed down, in part at least as a result of a social media campaign. Senator Leahy secured the passage of a law, S. 2968, Trademark Technical and Conforming Amendment Act of 2010, which mandated the Deparetment of Commerce and the USPTO to perform a study and produce a report, due one year later, on the effect of abusive trademark litigation tactics on small businesses. In April 2011 it duly produced its Report to Congress. The report was described by Eric Goldman on the Technology & Marketing Law Blog as "worthless", a "complete whiff", "useless", and a waste of tax dollars, while David Pardue on the Trade Secrets and IP Today blog calls it a "whitewash", noting that it merely recommends:
    1. Engage the private sector about providing free or low-cost legal advice to small businesses via pro bono programs and intellectual property rights clinics;
    2. Engage the private sector about offering continuing legal education programs focused on trademark policing measures and tactics;
    3. Enhance Federal agency educational outreach programs by identifying resources that enable small businesses to further their understanding of trademark rights, enforcement measures, and available resources for protecting and enforcing trademarks. 
    I have railed many times about the activities of the absolutists, and this is another manifestation of the same phenomenon. What's different is that the problem in the US involves litigation, whereas here it's the presence on the register of unfeasibly wide registrations (a result of lazy drafting encouraged by OHIM's ludicrous online application forms and ridiculous approach to class headings), fragmentary marks (a common adjective without the noun that it needs to make a trade mark), and outlandish oppositions, unhindered by any sensible use requirement, which together make trade marks as powerful as, if not more so than, copyright or even registered designs. Our own Study didn't apply quite as liberal a coat of whitewash as the one that the Department of Commerce stands accused of using, and it introduced (or at least gave currency to) the valuable notion of "clutter", but it hasn't gone to the core of the problem any more than the US equivalent.

    Monday 2 May 2011

    April IP podcast uploaded

    I have uploaded the April edition of the IPso Jure podcast, including:

    • The Commission publishes its new proposals on EU patents
    • Silence from the Hargreaves Review although it was supposed to present its report this month 
    • The Court of Justice upholds a cross-border injunction in a CTM case, in DHL 
    • Advocate General considers Belgian orders requiring filtering and blocking of infringing files contrary to Charter on Fundamental Rights
    And much more beside that. Subscribe? See the Podcasts section of this site or drop me a line, and get your CPD with the least effort possible - Ich mache das besondere einfach, as the General Court nearly said ...

    April Community trade mark cases in the General Court

    Not all of them - but this selection might be interesting and useful ... some not reported anywhere else I can find.

    Relative grounds

    In Case T-84/08, Intesa Sanpaolo SpA v OHIM, COMIT and COMET 7 April 2011 likelihood of confusion between the word mark COMIT, applied for in relation to services in classes 35, 36, 41 and 42 and the earlier figurative mark "Comet" registered in Germany for services in the same classes. The marks were similar phonetically and visually and the figurative differences too slight and do not alter impression of similarity between the almost identical words which are the dominant elements. Conceptually, there are differences. ‘Comet’ would be understood as ‘komet’ by the German public so there was a little distinctiveness, but the common prefix ‘com’, denoting 'commerce' or 'commercial', is a widely-used abbreviation in the world of business. The Court concluded that as the marks shared the same prefix the conceptual differences were insufficient to cancel out the visual and phonetic similarities.

    In Case T-466/08, Lancôme v OHIM, ACNO FOCUS and FOCUS word marks 14 April 2011 the General Court upheld a Board of Appeal decision that there was a likelihood of confusion for the German public between the word mark ACNO FOCUS applied for in relation to goods in class 3 (‘Cosmetic and make-up preparations’) and the earlier German word mark FOCUS registered for identical goods. ‘Acno’ is very close to the German word ‘akne’, which alluded to the characteristics of the goods, and the German consumer of such goods would perceive ACNO FOCUS to be a name under which the opponent was marketing a new line of products for treating acne

    In Case T-358/09, Sociedad Agricola Requingua v OHIM, TORO DE PIEDRA word mark and "Toro" figurative mark, 13 April 2011 the General Court found there was a likelihood of confusion between the word mark TORO DE PIEDRA of the Chilean applicant for alcoholic beverages including wine, and an earlier figurative mark which included the word "Toro" (the place in Spain rather than the animal) registered for wines.
    In Case T-228/09, United States Polo Association v OHIM, U.S. POLO ASSN and CTM POLO-POLO, 13 April 2011 the General Court found that there was likelihood of confusion between the word mark U.S. POLO ASSN and the earlier CTM, POLO-POLO, for textiles in class 24. The Board of Appeal’s finding that the goods were identical was not contested. The contention that the Board had found similarity between the marks only because it assumed that POLO was the dominant element of the applicant’s mark was, the court said, wrong – the Board had said that given imperfect recollection the public would be likely to be confused by the common element. The Board had found a “medium degree” of phonetic similarity, and the Court upheld this finding. The applicant argued that “u.s.” and “assn” were not descriptive of the goods – but that court pointed out that that didn’t mean they were automatically distinctive. There was a medium degree of conceptual similarity too. The low degree of attention paid by consumers when buying goods of this type led to the conclusion that there was a likelihood of confusion.

    In Case T-209/09, Alder Capital Ltd v OHIM, 13 April 2011 the General Court upheld a decision of the OHIM Board of Appeal which declared the word mark ALDER CAPITAL invalid on the grounds of conflict with the earlier marks HALDER and HALDER INVESTMENTS. The Board had correctly found a high degree of similarity between the marks and a medium degree of similarity between the services. Even though the attention paid by the public to the marks would be high, there was a likelihood of confusion.

    Case T-433/09, TTNB v OHMI (14 April 2011) - word mark Tila March v national figurative mark CARMEN MARCH for goods in classes 3 (bleaching preparations etc), 18 (leather goods) and 25 (clothing, footwear and headgear). The court concluded that given the identity of the products concerned, the small amount of attention of the relevant public and similarities between the conflicting signs especially the distinctive element common, the differences were not sufficient to eliminate any risk of confusion between the marks.

    Absolute grounds

    In Case T-262/09, Safariland LLC v OHIM, FIRST DEFENSE AEROSOL PEPPER PROJECTOR, 13 April 2011 the General Court dismissed an appeal against the refusal of a Community trade mark opposition based on the ground that the applicant was agent for the true rights-owner and did not have consent or justification to register the CTM. The facts are somewhat unusual in that the case had already been to the Court of First Instance a few years ago, there had been a change in the ownership of the opponent’s business and the key question was whether a consent had survived the business transfer.

    In Case T-523/09, Smart Technologies v OHIM, 13 April 2011 the General Court dismissed an appeal against a finding that the word mark WIR MACHEN DAS BESONDERE EINFACH (“we make the special simple”) applied for in respect of goods in class 9 should be refused registration because it was devoid of distinctive character . It was merely an advertising slogan.

    In Cases T-310/09 and T-383/09, Fuller & Thaler Asset Management Inc v OHIM, 12 April 2011 the General Court dismissed appeals against OHIM Board of Appeal findings that the word marks BEHAVIOURAL INDEXING and BEHAVIOURAL INDEX were an “immediate, direct and easily understandable indication of the nature and intended purpose of the goods and services” in Classes 9 and 36. The “juxtaposition is neither novel nor imaginative in the sphere of software and finance”, and it is well-known that “such a psychological analysis of human, social and cognitive factors may be carried out in the financial sector with a view to understanding, explaining, interpreting or predicting decisions made by consumers, borrowers, managers or investors, which affect stock market prices, returns and the allocation of resources”.

    Case T-12/09 RUN THE GLOBE (7 April 2011) available only in French and German. The trade mark was mercifully held to be descriptive or organising sporting events, though on the slightly unlikely grounds that consumers would imagine that the purpose of the events was to circumnavigate the globe.

    Recent Court of Justice activity on trade marks - updated part II

    In Case C‑235/09, DHL Express France SAS, formerly DHL International SA v Chronopost SA, 12 April 2011 (press release here), a reference for a preliminary ruling under Article 234 EC, from the Cour de cassation (France), the Court of Justice gave judgment on the territorial scope of injunctions in CTM infringement cases. The Court followed the Advocate General's opinion and ruled that in general, when a Community Trade Mark Court orders a defendant to stop infringing a Community trade mark, the scope of that order will be EU-wide. This will not be the case where the trade mark owner asks for more restricted injunctive relief (obviously) or where the acts of infringement or threatened infringement are limited to a single Member State or to part of the territory of the European Union.

    The Court also ruled that, where a court orders periodic penalty payments if the defendant fails to comply with an order, and the trade mark owner tries to enforce that order in the court of another EU member state which can’t grant an order for recurring payment, the court in that country must ensure that the coercive measure is enforced in an equivalent manner. This could cause problems for the English courts, which can’t order periodic penalty payments: they would have to rely on the rules on contempt.

    How this might work in practice has already been considered at the High Court in a hearing before Mr Justice Kitchin on 14 April 2011 (reported by Herbert Smith who acted in the case here) in Kingspan v Rockwool regarding the form of declaration and relief. Kitchin J imposed an injunction covering only the UK and Ireland, although Rockwool Limited has also undertaken not to infringe Kingspan's trade marks in the rest of the EU. This suggests that the English courts will take a pragmatic approach. On the other hand there have been warnings (that one via Intellectual Property Magazine) that the case is a nail in the coffin of the specialist IP courts in this country and that litigants will go looking for “rocket docket” jurisdictions in the EU.

    Recent Court of Justice activity on trade marks - updated

    Now I have recorded the April podcast, I can fill in some details on two cases I mentioned a while ago. I'll keep the postings separate. this first one doesn't seem to have been mentioned anywhere in the blogosphere - and as this note relies on my French aided by Google I'd be grateful for any suggestions about how it might be improved ...

    In C‑119/10, Frisdranken Industrie Winters BV v Red Bull GmbH, Advocate General Kokott presented her opinion on 14 April (here, in French: other languages are available but not English). The case concerns the filling of cans by the defendant on behalf of a third party, Smart Drinks Limited, a BVI company. Smart Drinks is a competitor of Red Bull, and its cans bore various signs that at least seem to have alluded to Red Bull. Her recommendations:
    1. Le simple «remplissage» de conditionnements pourvus d’un signe ne doit pas être qualifié d’usage de ce signe dans la vie des affaires au sens de l’article 5, paragraphe 1, sous b), de la Première directive 89/104/CEE rapprochant les législations des États membres sur les marques lorsque ce remplissage intervient seulement à titre de prestation de service pour un tiers et à sa demande.
    2. L’article 5, paragraphe 1, sous b), de la directive 89/104/CEE permet d’interdire dans le territoire couvert par l’enregistrement de la marque l’usage d’un signe susceptible d’être confondu avec la marque lorsque les produits revêtus du signe sont exclusivement destinées à l’exportation dans des États extérieurs à ce territoire et qu’ils ne peuvent pas être aperçus dans ce même territoire par le public, sauf dans l’entreprise ou le remplissage a eu lieu.
    3. L’existence d’un risque de confusion doit s’apprécier en se référant à la perception d’un consommateur moyen, normalement informé et raisonnablement attentif et avisé dans le territoire couvert par l’enregistrement de la marque.
    In brief: filling cans for a third party does not amount to using a trade mark. Use of a confusingly similar sign when the products are destined for export is actionable notwithstanding that the public in the country where this is done will not see the mark and therefore will not be confused. Risk of likelihood of confusion is assessed on the usual principles.

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