Transfers from IPEC to the Patents Court

Just a glance at the title will tell you that Kwikbolt Ltd v Airbus Operations Ltd [2019] EWHC 2450 (IPEC) (31 July 2019) (not yet on Bailii, only reported by PLC, whose brief report I gratefully acnknowledge, so there is a great deal more to know about this) must be a David and Goliath contest. No matter how large the claimant might be, the defendant is pretty sure to be much bigger. On the face of it, even without considering the nature of the dispute, it is likely to be exactly the sort of claim that IPEC (and the Patents County Court before it) was designed for.

Nor will it come as a surprise that the defendant should have applied to transfer the case to to the Patents Court. Litigation is driven almost entirely by cost considerations, and if you can make your opponent worried that they will run out of money in the Patents Court instead of enjoying the cost caps that apply in the Intellectual Property Enterprise Court it would be unrealistic to expect any litigator, seeking to do their best for their client, not to try to transfer it.

The question for the court hearing such an application is whether the case is complex enough to justify transfer. Does it need days of court time with loads of expert witnesses - the very opposite of the speedy operation of IPEC? HHJ Hacon thought not. With proper management, the case could be heard in two or three days.

Obviously, the defendant was much better able to afford the expense of the Patents Court than was the claimant - which was exactly why David has chosen to sue Goliath in IPEC to start with. In IPEC you accept that your damages are going to be capped at £250,000 if you win (and costs at £50,000). But that's only part of the story: an injunction might be worth a lot more to David, and cost Goliath much more dearly, so the financial cap gives a slightly misleading impression. Anyway, the damages cap is not intended to keep high-value claims out of IPEC altogether, it just means that the full value might not be realised in damages.

An injunction would, of course, be damaging to Goliath, but that did not mean that the case had to go to the Patents Court. If that court granted the injunction, it would be just as damaging. The only reason for transferring the case because of the injunction issue would be if there were a realistic risk that Goliath would be unable fully to argue against it in IPEC. The idea of making an application to a judge which basically says "we don't think your court can hear this case properly" strikes me as fundamentally unattractive, and HHJ Hacon certainly took the view that IPEC was perfectly able to deal with it so no transfer was going to happen.

Memorandum of understanding on online advertising and intellectual property rights

A memorandum of understanding under which the advertising industry undertook to try not to advertise on websites or apps that contributed to copyright infringement or the "dissemination" of counterfeit goods has been renewed after a one-year trial period. (I don't think the word "disseminate" is quite right for the distribution of physical objects, though it derives from the Latin for "seed" which clearly is physical - and related to inseminate, which suggests to me even more strongly that it is not really the right word for the job.)

It also strikes me that using the word "counterfeit" is unhelpful. I'm not aware of any settled definition of the word, and my time in the motor industry taught me that one person's counterfeit is another person's independent replacement part (my friends at the Ford Motor Company were particularly expansive in their use of the word to describe just about anything not made by them that would fit one of their cars).

Details of the MoU can be found on the European Commission's website here. The Commission "facilitated" the MoU, as part of its "follow the money" approach to intellectual property enforcement.

Online EU trade mark infringement actionable where advertising directed

Infringement proceedings involving an EU trade mark must generally be brought before the courts of the member state in which a defendant is domiciled (Regulation 207/2009/EC, Article 97(1)). They can also be brought before the courts of the Member State “in which the act of infringement has been committed or threatened” (Article 97(5)). What happens when the defendants are a Spanish company and a Spanish individual, and the trade mark owners are British (and the exclusive licensee is an English company)? Obviously an action could be brought in Spain, but could the claimant sue in the UK on the basis of Article 97(5)??

The claimants issued proceedings for infringement in the Intellectual Property Enterprise Court, on the basis that the defendants' online activities amounted to advertising or offering counterfeit goods for sale in the UK. IPEC refused to accept jurisdiction under Article 97(5), taking the view that only the courts in Spain, where steps had been taken to put the offending sign on a website, or decision to that effect had taken place, had jurisdiction under that provision. The claimants appealed, and the Court of Appeal sent the matter on an expedition to Luxembourg.

The Court of Justice ruled that Article 97(5) allowed the trade mark owner to bring infringement proceedings before an EUTM court of the Member State where the consumers or traders to whom online advertising and offers for sale were directed were located. It made no difference that took decisions and steps necessary to bring about the electronic display in another Member State.

The Court reasoned that, if Article 97(5) were interpreted otherwise, a defendant could deprive Article 97(5) of any effect by making sure that the territory where they set up their website and activated the display of their advertising and offers for sale was the same as that in which it was established.

The Court of Appeal has to decide whether the advertising and offers for sale on the website and platforms in issue were in fact targeted at UK consumers or traders. It must do so on the basis of factors such as the details about the geographical areas where the products were to be delivered.
AMS Neve Ltd and others v Heritage Audio SL and others (Case C-172/18) EU:C:2019:674

Originality requirement is the same for all works – including applied art

In a case involving the design of jeans and tee shirts, referred by the Portuguese Supreme Court, the Court of Justice has extended the scope of its Infopaq decision and held that the Euro-originality test, that a copyright work be its author’s own intellectual creation, applies to all types of copyright work including works of applied art. It is not open to Member States to protect works of applied art on the basis that they have some aesthetic appeal in addition to their utilitarian appeal: the only criterion is originality.

To be protected by copyright, a work must be the author’s own intellectual creation, reflecting the author's freedom of choice and personality. If the subject matter was dictated by technical considerations, rules or other constraints, which left no room for creative freedom, it would not be original. Only the elements that were the expression of creation in this sense would be regarded as a work - which sounds very much like the Court applying the "abstraction-filtration-comparison" test propounded by the Second Circuit in Computer Associates v Altai to determine what is protected rather than the English courts' approach of looking at the copyright work as a whole and filtering out unprotected subject-matter when applying the "substantial part" criterion for infringement.

Looking for an aesthetic effect to decide whether copyright applied was, the Court observed, subjective, and did not mean that the subject-matter of protection existed and could be identified with sufficient precision and objectivity. Aesthetic considerations were important in creative activities, of course, but a design's aesthetic effect did not in itself make it possible to decide whether the design was the author's own intellectual creation.

Clothing designs will perhaps rarely pass the higher originality test. In the UK this would not be a problem, as copyright is not the most apt way to protect them: they are more properly protected by design right, and in any case s.51 should exclude the use of copyright to protect the designs except where the item of clothing is itself an artistic work – which means it only works if the garment is a work of artistic craftsmanship, which it often will be but not if it is a tee shirt, or probably a pair of jeans. But the case raises the interesting question for the UK, does the Euro-originality test apply now to design right? The courts were always clear that they were not going to invent a new originality test for design right when they could just adopt the well-established copyright one, but that was before the Court of Justice drive a coach and horses through that test in Infopaq.

The judgment raises other important questions about EU copyright law – which almost with each passing day seems to be the way we now have to regard copyright, as based on EU directives. How the activist Court of Justice brought us to this position, developing the Information Society directive (which it seems always to refer to simply as "the Copyright Directive") into a comprehensive harmonisation of copyright law, is another story on which a lot has already been said and much remains to say.

Case C-683/17, Cofemel – Sociedade de Vestuário SA v G Star Raw CV EU:C:2019:721 (12 September)