Damages for innocent infringement of designs? No, but how about an account of profits?

Remedies in cases of innocent infringement of UK registered designs are the subject of proposals from the Intellectual Property Office in a  consultation response published recently. The law will also be changed to stop registered or unregistered Community design rights holders getting damages for innocent infringements. The response to the consultation on the topic had been nearly unanimous that there should not be different remedies available to rights holders for innocent infringements of registered UK or Community design rights.

The consultation response says:

Based on the responses received, we therefore propose to introduce provisions which will make it possible for the owner of a UK registered design to seek a financial remedy from an unintentional infringer of the registered design. However, the remedy available will only be for an account of profits, and not damages. In order to equalise the provisions, the existing provisions for financial remedies for the unintentional infringement of Community designs will be amended to mirror this approach.

This is a balanced approach. It is right that the infringer, even if innocent, should not get away with the profits he has made from using someone else's rights: those profits rightly belong to the owner of the infringed rights. On the other hand, innocent infringers should not be liable for damages. Enabling the court to order an account of profits is a sensible way to deal with the matter.

Internet defamation: linking to sources as a defence

Bloggers need to take due care to avoid writing anything defamatory - it's certainly something that I worry about, and which constrains me sometimes from publishing what I really think. But if I merely report what other people are writing, and link to the source material, will I have a defence? Perhaps, if I am careful about exactly what I say ... Eric Goldman reports on his internet law blog a California case which deals with this very issue. Well worth reading, even if (a) the case is unreported and (b) it won't necessarily cut much ice in the UK anyway.

South Africa: design protection for car spares (or not)

Reading a case about protection of designs for car spares takes me back to the days of my youth. There haven't  been enough since BL v Armstrong. But you have to go quite a long way to find them these days: this one comes from South Africa, whose Designs Act no 195 of 1993 (available here, from the Japan Patent Office, oddly enough) is another exercise in nostalgia: there are many phrases that bring back fond memories of the original version of the Registered Designs Act 1949, on which presumably it was based. One important thing about the South African Act, though, is that it protects both aesthetic and functional designs, with different criteria for protection of the two categories. The requirements for protection of functional designs will also ring bells for readers familiar with Part III of the Copyright, Designs and Patents Act 1988 (and who isn't?). It's a real trip down memory lane. The most significant thing is that there is an exclusion from protection for functional designs where the article is a spare part (section 14(6)).

Like us, the South Africans have been wrestling with the problem of intellectual property protection for spare parts for some time: three decades, according to the AfroIP blog, starting with a boat-building case called Schultz v Butt 1986 (3) SA 667 (A) in which the defendant used a hull made by the complainant to make a mould from which to make hulls which it then sold in competition with the design owner, a case which might be considered to be rather clear-cut. The most recent case dates from 25th ultimo.

That case is BMW AG v Grandmark International (Pty) Ltd and another [2012] ZAGPPHC 139 and the judgment of the North Gauteng High Court, Pretoria, should you wish to read it in all its glory, is available from the South African Legal Information Institution, the equivalent of BAILII, here. There's a claim that the defendant was in contempt of an earlier court order, plus claims of registered design infringement and trade mark infringement. It's the design claim that's interesting, as the contempt case seems to have gone off at half cock and the trade mark case was defeated, ironically, by earlier cases in which BMW was the claimant.

Four registered design for the model known by its BMW code as the E46 but better known as the 3 Series (fourth generation, 1998-2005) were involved. This model was assembled in eight places around the world in addition to Munich, including a site in South Africa, where BMW has been the favourite premium brand of car for some time: in 2012 it held 7.9 per cent of the overall market, 33.9 per cent of the premium segment, so there's a significant parc of BMWs needing spares.

The registrations were for aesthetic designs, namely a bonnet, headlight, grill and fender [sic]. Surprisingly, the court took the view that the designs were in fact functional, and that they had been craftily registered as aesthetic designs just to circumvent section 14(6). How could that be? The court applied what a scholar of our 1988 Act would recognise as a "must-fit" and "must-match" analysis, and concluded that the designs all served a specific purpose – they had to look and fit a certain way to serve their purpose. The Act defines a functional design as one ""having features which are necessitated by the function which the article to which the design is applied, is to perform" - language more related to the concept in our law of "dictated solely by function" than the "must-fit" and "must-match" exceptions. I don't find it very convincing - but not being a South African lawyer, what I think probably doesn't count for a lot.

Moreover, the court decided that the designs failed the novelty test applicable to aesthetic designs, because they were anticipated by previous designs for BMW body parts. They were nothing more than developments of previous BMW body part shapes. That approach could deprive the vast majority of designs for spare parts, especially visible ones, of protection. But it sounds as if there will be an appeal - there almost has to be, given what's at stake - so perhaps we'll learn in due course that this is not in fact what the law means. Still, a very interesting case for design enthusiasts!

Book review: A Practical Guide to Working with TRIPS

A step back again in time as I get to grips with outstanding book reviews. This is an interesting little paperback by Antony Taubman, who as Director of the World Trade Organisation Intellectual Property Division (I assume the OUP website erred when it referred to the World Trace Organisation) is uniquely well-placed to write it.

The publisher's blurb tells us that this book "avoids extended legal analysis", an odd virtue in a book about law. But perhaps that is the point: it isn't a law book really, it's a guide to the topic for policymakers. Tellingly, the publishers don't reveal for whom it is thought to be essential reading (and publishers usually manage to make up a list that includes most literate members of the human race): they merely tell us who would be interested in this book. They include "legal practitioners operating in the international intellectual property field", but given the lack of heavy black-letter law in this slim (256 pages) and not-too-expensive (£44.95 - everything is relative: I just paid that for a pair of shoes) volume they are likely to need something a bit more substantial.

Nevertheless, I found it really interesting, which might tell you more about me than about the book but I hope counts as some sort of endorsement. And it's written with a light touch and entertaining style. Unlike most review books that come my way, this is one to read through from start to finish: it has something of a story to tell. And for most IP practitioners, TRIPS is an important part of the context rather than a substantive concern, something you need to know a bit about but the detail of which you can safely leave aside.

Of course, TRIPS is an instrument of absolutely central importance in the intellectual property world, the first attempt to create something coherent to replace what the author refers to as the "makeshift diplomatic assemblage" of GATT, and to replace diplomatic wrangling with a judicial process. It recognised properly for the first time the place of intellectual property in international trade law, but leaves the question (which I think remains unanswered) whether this approach would supplant the traditional IP model embodied in Berne, Paris and WIPO. The author asks whether the marriage of IP and trade law is one of convenience, or a shotgun affair. Is it a natural expression of policy convergence? Read Mr Taubman's book, and make up your own mind.

Another important question is whether TRIPS is a burden for developing countries with little benefit. The author ventures the opinion that because it sets out public policy goals for intellectual property it should be considered a Good Thing. Well, he doesn't say Good Thing, that was another pair of authors altogether, but that's the gist of it.

The TRIPS agreement also brings a bunch of other issues into the trade arena - traditional knowledge, human rights, property law. It has already led to a richer jurisprudence of international intellectual property, and as the original TRIPS agreement was never intended to be final word - it could hardly be that - it will continue to inform this area of law. IP enthusiasts, including most if not all practitioners, will continue to have an interest in where it takes us.

Copyright has adverse effect on investment in cloud

A recent economic study entitled “The Impact of Copyright Policy Changes in France and Germany on Venture Capital Investment in Cloud Computing Companies” by Professor Josh Lerner of Harvard Business School, reported by IP Watch a while ago here, finds that changes in copyright law in Europe have had a negative impact on investments by venture capitalists in cloud computing businesses. The study, for the Computer and Communications Industry Association (CCIA), blames a handful of court decisions in France and Germany on the scope of copyright, which sounds like a rather narrow range of scapegoats. The CCIA looks beyond those scapegoats, and its Vice President Matthew Schruers posted this blog post asserting that effects identified by the study provide evidence of a bigger trend in copyright concerns undermining investment.

Was it really necessary to carry out a study to conclude this?

Book review: EU Electronic Communications Law

Subtitled "Competition & Regulation in the European Telecommunications Market", this is another second edition from OUP. The authors are Paul Nihoul, of the University of Louvain (a town with a particular place in my affections) and Peter Rodford, formerly of the European Commission. There are 536 pages and the prices is the same as the Fawcett and Torremans book reviewed earlier, £195. That makes it look rather less good value, doesn't it, half as many pages for the same money, but that's probably not the way to look at it - if EU telecommunications law floats your boat, an expression I can't resist on this great day for British Olympic rowing, the other work won't represent better value to you.

As it happens, EU electronic communications law doesn't do much for me, but that's not the way to look at it, either: as a practitioner, I generally deal with what comes along rather than what turns me on. I noticed (because it's something a decent reviewer needs to include) that it was published on 25 August 2011 - which means that my reviews are becoming just slightly more timely, but also causes me to wonder where the last year has gone. I don't know, except that exactly a year ago I added a part-time job to the existing portfolio, since when I have been acutely conscious of how one deals with the legal problems that come along rather than those one would like to handle. I guess my work tends to be client-led rather than confined to a particular area - and being in-house for a couple of days a week, that's certainly client-led.

None of my workload has anything to do with telecommunications law, though. Except in the sense in which many lawyers frequently encounter it, the area of what can broadly be called data protection and privacy, and that features in this book. And increasingly there is an important interface between competition law and regulation and the protection of intellectual property - the duties of carriers and service providers to take steps to prevent infringements. In short, in an era of convergence, the field described in this book is pretty close to the centre of things. So it's going to be something a lot of lawyers are likely to need.

Indeed, we all have online lives which become more and more significant, and electronic communications law in the broad sense is going to carry on growing like topsy. Quite apart from the legal side of things, though, we should try to keep a sense of proportion - to keep our online lives in the right place, as I was reminded by this excellent posting on John Hull's What about Clients? blog recently.

Regardless of the subject matter, though, this is a heavy piece of work. For one thing, it has only five chapters, plus an introduction sub-titled (ominously) "How to use this book". It is rich in headings of different levels, making it (as one of my lecturers at university, later editor of Newsweek, said of Karl Llewellyn's work) like reading a knitting pattern. But its purpose is to provide information, not to narrate or entertain, so while I might prefer more readable prose it's not a valid criticism of a utilitarian piece of writing. If you need a book to guide you through this particular legal maze, this is it, and if you don't think you need a guide to this maze you might have to think again.

Book review: Intellectual Property and Private International Law

I have not been as diligent about writing book reviews as I should have been, so I have a bit of catching up to do. I'll begin with the second edition of Intellectual Property and Private International Law, by the highly distinguished duo James Fawcett and Paul Torremans, published by OUP last year but up to date to June 2010, and offered by them for the princely sum of £195. (Why, I wonder, do we use "princely" to mean "substantial" in that context? Are princes assumed to be rich, or merely profligate? Is a King's ransom much greater, and therefore outside the prince's budget?) The first edition, which was the only treatment of this subject (the second edition retains this distinction), dated from 1998, and since then there have been several important changes in the law - the Brussels Convention has given way to the Brussels I Regulation, the Rules of the Supreme Court to the Civil Procedure Rules, and the Rome Convention on Applicable Law to the Rome I Regulation. Private international law has become, more and more, a matter of European Union law. The Court of Justice has explored the territory in the Roche and GAT cases (and more recently in DHL v Chronopost), and domestically the Court of Appeal has considered it in the Lucasfilm case (which the authors describe as "disappointing"). The Supreme Court judgment, of course, came too late to be covered, which is a shame because it presumably overcomes the authors' disappointment.

Back when I first studied intellectual property law - the Patents Act 1977 was not yet fully in force, the Trade Marks Act dated from 1938, and the Copyright Act from the year of my birth, and the Registered Designs Act 1949 was still in its first iteration - its interface with international law was vanishingly small. National rights were enforced in national courts, and even the European Community kept a respectful distance from the area. There were international conventions in the field, but they were concerned with the acquisition and content of intellectual property rights, not with their enforcement.

Now, since the first edition of this book, the Internet has introduced us to the notion of "ubiquitous infringement". Other factors have also combined to give intellectual property law a substantial international dimension, including the activities of parallel traders - indeed, the process of globalisation has opened up all kinds of cans of worms that had previously remained safely sealed, or even buried out of sight.

The law is being brought up to date - in so far as the law ever gets up to date with technology: Brussels I is being reformed, with intellectual property high on the agenda, and (at the time of writing of the book - this part has certainly been overtaken by events) there was much talk of unitary patent protection and the UPLS. The international exploitation of intellectual property rights is responsible for a bunch of new problems, because legislation is sparse and international treaties have (the authors say) failed unspectacularly.  There have been scholarly initiatives such as the ALI principles in the US and the CLIP principles in the EU, which influence the suggestions for reform put forward by the authors.

The book - a staggering 1,056 pages (I use the word advisedly - not only does it describe what I think about the authors' achievement but it also serves to characterise the experience of carrying a copy) - falls into three sections, the last of only one chapter. These cover jurisdiction, applicable law and recognition and enforcement of foreign judgments. Further details of what's in each section appear on the publisher's website (follow the link at the top of this posting). It doesn't, as intellectual property textbooks once used to do far too often, lead the reader by the hand through the well-known gardens of basic intellectual property law before heading off into the undergrowth of private international law, and thank goodness for that: it is too easy, too tempting, to bulk up a book by including egg-sucking instructions that one's grandmother would find redundant. It's all good, solid, meaty stuff and essential reference (the implication that it is not a book to sit and read through from cover to cover is quite intentional) for the practitioner interested in this little area, and who among IP practitioners is not interested in it these days?