Alcoholic sweets: why a bear shape isn't a good idea

The Guardian carries this story today about a start-up business in Spain which has run into problems with a big trade mark owner. As with so many stories about intellectual property, we could call one party David and the other Goliath - in this instance the sweet-maker Haribo (a word which seems to be on the verge of entering the language as a generic term).

The idea of making the jelly-like sweets alcoholic is novel, though I would be a little surprised if it did not feature somewhere in the state of the art. The problem, though, is not with the nature of the product: the problem lies with its shape.

The sweets market is not one of which I have much familiarity (what I do know about Haribo products is that the contain gelatine, so cannot form part of my vegetarian diet - although the only time I have to refuse them is at feed stations in long-distance races). I am however familiar with the concept of Gummy Bears (Gummibär, in their native German), although I wouldn't without the prompting of The Guardian's article necessarily have associated them with Haribo. I would however have known enough to realise that bear-shaped sweets were likely to attract someone's unwelcome attention.

It's easy to present this as a David and Goliath situation, with a humourless, monopolisitic behemoth (and no, I'm not getting my bears and cats mixed up here) bullying young people who are only trying to get their own business up and running. The presence of alcohol in their sweets makes them a rather different proposition from Haribo's, of course, although a similarity and likelihood-of-confusion analysis might conclude that they are too close for comfort. (Student readers: Discuss.) But why on earth shape them like bears, when the animal kingdom offers so many other possibilities? Haribo's claim proceeds from the assumption (so it seems from the comments in the article) that it is no accident: perhaps there was no deliberate attempt to sell boozy bears by reference to Gummy Bears, but it is hard to believe that the newcomers could have been ignorant of what was already in the market (and should have done some market research to make sure) so the allusion to the Haribo product cannot have been entirely inadvertant. It has certainly succeeded in getting publicity that they would not otherwise have enjoyed.

Does an agreement to settle a dispute between a patentee and a generic drug maker breach competition law? AG's opinion

An agreement settling a patent dispute may constitute a restriction of competition by object or by effect and that entering into such an agreement may be an abuse of a dominant position, according to Advocate General Kokott's 276-paragraph, 223-footnote opinion of 22 January in Generics (UK) Ltd e.a. v Competition and Markets Authority (Case C-307/18) ECLI:EU:C:2020:28.

The reference to the Court of Justice came from the Competition Appeal Tribunal, which was hearing an appeal against the Competition and Markets Authority's finding that GlaxoSmithKline, Alpharma Limited and Generics (UK) Limited had breached EU and UK competition law by entering into a series of agreements that had the effect of delaying generic entry of the drug paroxetine. The generic manufacturers concerned undertook, inter alia, not to enter the market with their products for an agreed period: the CMA found the agreements to be akin to market exclusion agreements, prohibited under Chapter 1 of the Competition Act 1998 and by Article 101 TFEU, and an abuse of GSK's dominant position prohibited by Chapter 2. The CAT referred ten questions for a preliminary ruling.


The fact that the validity of the patents, and whether the generic products infringe them, remained uncertain did not mean that the patent holder and generic manufacturers were not potential competitors, according to the Advocate General. The correct question to ask is whether there are real, concrete possibilities to enter the market despite the patents, and this (the Advocate General went on) is a matter for the competition authority to decide taking into account all the relevant factors. She also considered that conduct that can constitute an abuse of a dominant position can only be justified by consumer benefits when it can be shown that those benefits offset an agreement's adverse effects on competition on the relevant market. Where the agreements provide limited benefits, while eliminating competition by removing all sources of potential competition, this condition is unlikely to be satisfied.

UK will not implement Digital Single Market Copyright Directive

In a written answer today to a question from Jo Stevens MP (Cardiff North), Rt Hon Chris Skidmore MP, Minister of State for Universities and Science, has told us what is hardly a surprise:

The deadline for implementing the EU Copyright Directive [that's 2019/790] is 7 June 2021. The United Kingdom will leave the European Union on 31 January 2020 and the Implementation Period will end on 31 December 2020. The Government has committed not to extend the Implementation Period. Therefore, the United Kingdom will not be required to implement the Directive, and the Government has no plans to do so. Any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.

That's the domestic policy process that in 1988 put in place new legislation that had been needed since at least the Whitford Report ten years earlier. Meanwhile the carefully-considered changes to copyright law (whether you like them or not) that the Directive contains seem destined to pass us by. No "link tax", no change to the law on content-sharing, none of the other good things copyright owners were going to get from the Directive - Google and other platforms must be very happy.

Full and frank disclosure needed for order for service out

I haven't exactly been waiting for a case on service out , but suddenly two have come along together in the manner of no 253 London buses (substitute your own favourite route number if you wish ). In Easy Group v Easy Fly [2020 ] EWHC 40 (Ch) Nugee J set aside such an order in a passing off, trade mark infringement and unlawful means conspiracy (and, you might add, kitchen sink) claim.

Unlike my previous subject, Wheat v Google (in which judgment was given the following day), there were serious issues to be tried - that wasn't the problem. The issues included where the defendant's website was targeted, whether using a trade mark in a press release made a link between the mark and the services, and whether flying an aeroplane with the trade mark on the side was an infringement.

The problem was that the claimant had failed to tell the judge everything when making the application. Its case was based on the premise that the defendant, a domestic Colombian airline,
was offering its sences in the UK and the EU. It wasn't. The court declined to treat the claim form as valid. The claimants can start again, but will only be able to claim damages for the six years before
the new claim .

Refusal to allow service out upheld

A Chancery Division judge has dismissed an appeal against a Master's refusal to give leave to serve Google outside the jurisdiction . The point arose in an action for copyright infringement, Wheat v Google LLC [2020] EWHC 27 (Ch) (15 January 2020).

The substantive claim involved hotlinking, or inline linking. The hotlinks appear in Google search results, and the claimant argued that Google enabled users to access content on his website via other hotlinking (or, more descriptively and I think more commonly, aggregating) sites - thus depriving the claimant's site of visitors and of advertising potential. Mr Wheat's website, at www.theirearth.com, was devoted to ecological and sustainability issues and contained original articles and photographs created by him. (It went offline in 2018.) He became understandably miffed when aggregator sites availed themselves of his content to attract visitors to their advertising-laden sites.

On an application to serve a foreign defendant outside the jurisdiction, the claimant must satisfy three
requirements (Seaconsar Far East Ltd. Bank Markazi Jomhouri Islami Iran [1994 ] 1 AC 438, 453-457, endorsed by the Privy Council in Altimo Holdings and Investment Ltd v Kyrgyz Mobile Tel [2011] UKPC 7, [2012] 1 WLR 1884. There must be a serious issue to be the on the merits; there must be a good arguable case that the claim falls within one or more classes of case where permission may be given to serve out ; and the claimant must satisfy the court that in all the circumstances the forum in which proceedings have been commenced is appropriate. The main issue, the judge (HHJ Keyser) decided, was whether there was a serious issue to be tried on the merits: substantive copyright law therefore had to be considered .

According to the case law , the claimant would have to show that Google had communicated his copynight works either to a new public or by a different technical means from that authorised by the claimant. The second possibility could be immediately knocked on the head: Case C-466/12, Svensson, EU:C:2014:76 makes clear that the whole of the Internet is a single technical means. But Svensson also tells us that because the publie to which the communication was made was within the class of potential visitors to the claimant's website , the first possibility was excluded too . The claimant argued that his initial consent to communication was subject to an implicit restriction was not supported by evidence. The Master had been correct in his interpretation and application of the case law. Google's acts of caching and indexing amounted to communication neither to a new public nor by a new technical means, and were not unauthorised communications to the public within the meaning of s.20.

Such is the result of the way the technical process works, and of the present state of the law. Surely copyright law should deal with the economic reality of the situation, though, and prevent parasites (oh, I hadn't intended that pun but it works rather well) from taking a free ride on someone else's original work. Perhaps Mr Wheat's mistake was to make his website freely accessible - but the whole ethos of what he was doing clearly required him to do so. The Internet is perhaps becoming no place for anyone who is not out to make as much money as possible, regardless of whose efforts that is based on. Or so it seems to me.

Intellectual property update webinar

I'm presenting an online webinar (I suppose the word "online" is redundant there but I'll leave it in, having taken the trouble to write it in the first place) next week for MBL. Details are here. I'll be covering as much as I can of what has happened in the IP field since mid-September - so, roughly quarter 4 of 2019 - in the space of 2 hours. "Tour d'horizon" might be a better term for it. Still time to join in if you are interested!

Duke and Duchess of Sussex apply for trade mark protection

Stepping back from what is colloquially referred to as the Firm (though IIRC it was Her Majesty herself who first used the expression) evidently involves turning to trade mark law for protection. It was always available to them, but surely the Royal family doesn't need anything so mundane? Perhaps the Sussexes' application to register SUSSEX ROYAL (application number 3408516, and also 3408521 which has a reference to their Foundation tacked on) as UK trade marks, reported inter alia by The Guardian here, is indicative of their departure from the core of the Royals (although other reports today suggest that they aren't going to find it very easy to get away).

They were apparently prompted to apply when someone else filed an application. I don't think it's necessarily right to refer to it as "squatting" because it's hard to imagine the owner trying to extract payment from the Royal couple. "Troll" seems like a better term. That application failed, however, because of s.4(1): the words would be

(d) ... likely to lead persons to think that the applicant either has or recently has had Royal patronage or authorisation,

... unless it appears to the regstrar that consent has been given by or on behalf of Her Majesty or, as the case may be, the relevant member of the Royal family.

I have dealt in the past with a very few trade mark applications that required Royal consent (in practice, the consent of the Lord Chamberlain, the most senior officer of the Royal Household, the route to whom is via the Queen's solicitors, Farrars, who will again IIRC impose a modest charge). Surprisingly, even if an organisation is incorporated by Royal charter or has the word "Royal" in its name with the monarch's approval it still needs further consent to satisfy the registrar. Given that the registrar is a servant of the Crown, should not he or she be trusted to oversee the whole process?

Be that as it may, the new application raises an intriguing question. Will the registrar be satisfied that the requisite consent has been given? The application was originally filed by two of the couple's "people", and later assigned to the Foundation, so the applicants have never been the Royals themselves. Nevertheless, it might be reasonable to infer that their Foundation acts with their consent. But does that suffice, or does s.4(1) (and s.3(5), which makes this an absolute ground for refusal) give Her Majesty a veto? The conjunction used is "or" not "and", so perhaps Prince Harry did not need to ask his grandmother: but equally, his grandmother could have given consent and he would not have been able to veto it. But the tricky element of the trade mark is the word ROYAL, which isn't specific to the Sussexes - so consent from on high would be necessary.

The register shows that it took a long time (some six months) for the application to get as far as being published. However that seems to have been time taken up with assigning the application and dealing with the specification, not worrying about consent, which isn't mentioned.

There's also another interesting question, though perhaps unlikely to arise: if the application were to cover potatoes, which it doesn't, would it conflict with the Protected Designation of Origin JERSEY ROYAL? There is probably no reason why similar potatoes should not be grown in Sussex.

Now there is news (see The Guardian today, 11 January) of another troll application, this time for an EU trade mark - against which the same objection based on the word ROYAL would not run. If it isn't a bad faith application one wonders what would be, but bad faith is a difficult area of trade mark law (though it should be somewhat clearer after the Court of Justice opines in Sky v SkyKick, about which see my recent posting dated 16 October). But the Foundation is going to have to oppose it to get anywhere.

EPO: Correcting payment of wrong appeal fee

I am not a patent prosecutor - my involvement in the patent world usually starts only once the things have been granted - but if you do prosecute applications for European patents, here's a decision which ought to be important. If you pay the wrong appeal fee, Rule 139 allows you to correct an unintentional underpayment, notwithstanding that it looks as if should only be concerned with errors in documents (as made clear in case G001/12): and better still it has retroactive effect, so your appeal shouldn't be out of time.

This was case J 0008/19 (29 November 2019, published 9 January 2020), in which an appeal against refusal of a division application was filed a few minutes before the grant appeared in the Bulletin. The Legal Board of Appeal found that the law was clear and an application ceased to be pending on the day on which the mention of the grant was published - the date, not the precise time, was what mattered, which could produce some harsh reaults. It meant that even though the appeal was entertained it didn't succeed because the effect of rule that pendancy ends on the day of publication - in effect at 00:00 hours on that day, regardless of the time of actual publication - was clearly that the divisional had been filed too late.

Shanks v Unilever: Supremes identify outstanding benefit

The provisions of the Patents Act 1977 on compensation of employees for certain inventions (principally s.40) have no doubt been a disappointment to their proponents. The Trade Union Congress was influential in getting them included in the Act, and my friend Lord Lloyd of Kilgerran took a leading role in piloting them through Parliament, but they hardly ever deliver for the employee-inventor (Kelly and Chiu v GE Healthcare [2009] EWHC 181 (Pat) being the single swallow that could not make a summer). The problem is that the invention has to be of outstanding benefit to the employer, and the bigger the employer the harder it is to make that sort of impression on its business.

Shanks v Unilever [2017] EWCA Civ 2 was perhaps the paradigm case of an employee's invention not being of outstanding benefit to his employer because the company was too big to pay. £24 million is  not a lot to Unilever. Although the Court of Appeal recognised that the Hearing Officer who made the initial determination had to take many factors into account, it also recognised that the size of the employer eclipsed the others. "Too big to pay" is not the general rule, but it comes close. Or did, until today.

That case has now given us Shanks v Unilever Plc & Ors [2019] UKSC 45 (23 October 2019) in which Lord Kitchin (with whom the other Supremes, unsurprisingly given his background in IP law, agreed) warned that tribunals “should be very cautious before accepting a submission that a patent has not been of outstanding benefit to an employer simply because it has had no significant impact on its overall profitability or the value of all of its sales”.

A benefit, to be outstanding, has to stand out (the sort of statement of the obvious that judicial decisions are required from time to time to make). The consequence of this is perhaps rather less obvious: to stand out, the thing being considered has to be compared against something else. And what is the something else against which it has to be compared - the multinational ice-cream-to-deodorants behemoth, or Unilever UK Central Resources Ltd which actually employed him? The answer turns out to be a pragmatic one - although Professor Shanks OBE FRS FREng (as the judgment calls him) worked for a small cog in the Unilever machine, it was right to consider the benefit to Unilever rather than strictly to his employer. The Act contains what are designed to work as anti-avoidance provisions, so the employer cannot licence the patent at a peppercorn royalty so as to avoid liability for compensation, and this approach seems consistent with this.

The decision also confirms that the outstandingness (my word) of the benefit must be assessed before tax, and that the employee should be compensated for what his Lordship rather nicely called the affect of time on the value of money. The application had been made in 2006, and only came before a hearing officer in 2012 since when it has taken a further seven years to get to this stage, which was not something for which the court thought blame should be laid at the Professor's door.

So Prof Shanks's invention was of outstanding benefit to his employer, and he was entitled to a fair share of that benefit. The lower instances had done the heavy lifting on the calculations, which I guess are not for the Supremes to interfere with except to say that Arnold J had been wrong to reduce the Hearing Officer's 5 per cent to 3 on the interesting basis that Unilever were able to drive a harder bargain than others in licensing transactions on account of their very deep pockets which meant that they would be able to protect their patents vigorously. The percentage was applied to the £24 million that the Hearing Officer had identified as the benefit, and the Professor receives a nice £2 million in recognition of the significance of his invention.

Case 371/18, Sky v Skykick: Advocate General on trade marks as a tool of monoplisation

The breadth of trade mark specfications, in part driven by the use of general, highly abstract, expressions, is a massive problem - not for trade mark owners, who often like to extend their monopolies, nor for registries which need fee income, but for new entrants who face problems with depletion of the stock of available trade marks and consequent foreclosure of the market. The issue was discussed critically in the otherwise rather smug and self-satisfied (and badly-translated, or perhaps written in the first place in bad English) Study on the overall functioning of the European Trade Mark System carried out by the Max Planck Institute for the Commission in 2013.

SkyKick is in the software business, and in particular migrating SMEs to cloud-based computing: its founders had worked at Microsoft on Office 365. When Microsoft lanuched a service under the name SKYDRIVE they ran into trouble with Sky, and unsurprisingly the same happened with SkyKick (despite clearance searches carried out by my old friends, Seattle's largest law firm, Perkins Coie, although I don't think any of my actual old friends are still there). Sky eventually sued SkyKick for trade mark infringement in the English High Court, and SkyKick counterclaimed for invalidity. The judge, Arnold J, who delivered a characteristic 358 page judgment ([2018] EWHC 155 (Ch)), sought guidance from the Court of Justice on two issues raised in the counterclaim.

The first concerned the requisite clarity and precision in the specification of goods. Sky's registration employed broad expressions such as "computer software". This the judge observed conferred a very wide monopoly on the owner, but it did not necessarily follow that it lacked clarity and precision: and it was not clear whether a lack of clarity and precision would be grounds for a declaration of invalidity, whether wholly or partly.

The second issue was whether a lack of intention to use a trade mark on some of the goods for which it was registered amounted to bad faith: and would bad faith invalidate the trade mark, either in its entirety or for the excess goods or services?

Five questions were put to the Court, and on 16 October Advocate General Tanchev gave his opinion.

First, he said that the list of absolute grounds for refusal is exhaustive. A lack of clarity and precision cannot in itself be an additional absolute ground. However, there could be an argument that an unclear or imprecise specification is contrary to public policy or public order, which is an absolute ground for refusal and also grounds for a declaration of invalidity. The register has to be clear and uncluttered: over-broad and general specifications dissuade competitors from entering the market. The trade mark owner can make itself appear bigger in the market than it really is - a variant of the angora cat problem in patent law. Unclear or imprecise terms in the specification can therefore be declared invalid - but not the whole registration, provided of course that some elements of the specification are sufficiently clear and precise. That said, the term "computer software" does not meet the standard. It confers on the proprietor "a monopoly of immense breadth', and is contrary to the public interest. The term is too general, and the goods or services covered too variable. Laddie J reached much the same conclusion, back in 1995 in Mercury Communications v Mercury Interactive [1995] FSR 850.

If the Court follows the Advocate General this could make a lot of registrations vulnerable, and it would not be limited to computer software.

The next two questions concern bad faith. The Advocate General suggests that, "in certain circumstances", registering a trade mark with no intention to use it in connection with goods or services within the specification, could amount to bad faith, which would be an absolute ground for refusal. This could be the case, the AG said, where there is no commercial logic behind the inclusion of goods or services, or where it is filed simply to stop a third party.

In answer to the fifth question, the AG said that s.32(3) of the Trade Marks Act 1994 (which requires a declaration as part of the application process) is compatible with the Directive, but that a false declaration in itself does not amount to bad faith. That looks like a very nuanced distinction.

The AG seems to be grasping an opportunity to to shift the balance of trade mark practice in favour of new entrants to markets, who suffer the problems of depletion and foreclosure that arise from cluttering of the register. In the introduction to his opinion, he comments critically on the state of the
law. Trade mark owners will have to rethink their filing strategies or risk invalidity, and the commercial logic of their registrations will require careful thought. Have the Royal Marines Commando really got a commercial interest in bird tables (class 20)?

Contempt and failure to comply with court order

Price and others v Flitcraft Ltd and others [2019] EWHC 2476 (Pat) is a straightforward (though rare - at least until recently, because just a few months ago we had Juul Labs, Inc & Anor v Quickjuul Ltd & Ors [2019] EWHC 1281 (Ch) (21 May 2019)) case of a defendant failing to do what the court ordered to repair infringements of patent and copyright, and being held in contempt as a result. There seems to be no new or startling legal principles involved but its subject-matter demands attention.

Recorder Douglas Campbell QC found that the defendants had breached the injunction in several ways. They had distributed a brochure that showed the infringing product, which amounted to an offer to dispose of the product and was therefore a breach of the injunction even without any goods being supplied. It also contained matter that infringed the copyright, which was another breach. The defendants had also failed to give an affidavit of compliance with a destruction order, so there was another breach of the injunction.

It all added up to a deliberate decision to take a casual approach to complying with the injunctions, apparently unconcerned about how quickly they complied with the order, or indeed whether they complied at all. Although they argued that some acts were inadvertent, these flowed from the deliberate decision to take a casual approach. The corporate defendants' controlling mind, the fourth defendant, was in contempt and would be sentenced later.

No implied duty of confidence in standards-setting body

A European Patents Office board of appeal has decided, on the face of it surprisingly, that there is no implied obligation of confidence on members of a standards-setting committee. Because there was no implied duty, the claimed invention was anticipated by documents available to the committee and therefore (within the broad definition in the Convention) available to the public. The invention therefore lacked novelty so could not be protected by a patent.

The consequences clearly follow the board's finding that there was no implied duty (and no express duty either, of course - one lesson from the decision must be that more use needs to be made of appropriate confidentiality or non-disclosure agreements). But why was there no implied duty?

The answer is that the process of devising standards is a collaborative one, involving extensive consultation among interested parties. At least, that's what the board said, and it sounds convincing. 'The evidence points to a system designed to guarantee a certain "privacy" of its data while at the same time being sufficiently pragmatic and flexible to allow consultation with other parties in order for it satisfactorily to fulfil its mission', it stated. Whether a document or other carrier of information be confidential or no is relative, to some extent, and 'a certain "privacy'" does not amount to confidentiality.

So the lesson is that if you are involved in standards-setting, you need to make use of appropriate agreements and undertakings. They might make the standards-setting harder work, but they will preserve the possibility of gaining patent protection. ALthough you could always file the application earlier.

T 2239/15T MPEG INPUT DOCUMENTS/Fraunhofer – Dolby 

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)

Copying music without knowing

The Guardian this morning reports another case in which a piece of music was held to infringe copyright in an earlier piece. It happens more and more often, it seems - as the twin evils, long identified in the trade marks world, of depletion and foreclosure insinuate themselves into copyright, albeit with changes to their form to take account of the very different subject-matter of trade mark protection.

The case in the papers today was decided in the United States, and by a jury, which means that the same will not happen here, not by the same route anyway. Katy Perry's song Dark Horse was found to have a similar beat to a piece called Joyful Noise by Flame, a Christian rapper (a new genre to me). It seems that several others were accused of infringing, too.

For copyright infringement to happen, in the USA as well as in this country (and every other country that has a copyright law, which I think is every country although in some of them the situation is a bit unclear), there has to be a nexus between the copyright work and what an infringer has produced (you can't say the infringer created it, because the whole point is that he or she hasn't, nor can you call it a work because it doesn't represent work, just appropriation). If an alleged infringer has no knowledge of the copyright work in question, there is no infringement: there is a second, similar or identical, copyright work, created independently by the defendant.

Many copyright owners don't like this situation, of course. They would rather their copyright was a true monopoly right. But copyright law is not patent law, and quite right too. Copyright doesn't protect the piece of music (or the book, or the painting) per se, but the effort that the creator put into it. So the owner of copyright in a piece of music has to show that the defendant had heard that piece. The case law tells us that it isn't necessary to show that the defendant has to recall the piece - if that were the case, a little selective amnesia would be enough to defeat any infringement claim - but merely that they have been exposed to it.

To avoid being exposed to others' music, composers will not generally listen to the recordings that they might receive from aspiring composers hoping for an endorsement (or perhaps hoping to contrive a situation in which an infringement action might lie). But in the modern world it becomes much more difficult to avoid exposure to music. When it is playing, unnecessarily, in lifts, shops, restaurants, gyms, and workplaces, it's impossible to get away from. I might have heard Dark Horse and Joyful Noise many times, quite involuntarily, but I certainly don't recall either of them. Were I a songwriter, I might well have incorporated some part of them (one or other of them) in a work of my own. And to some extent that's how music gets written, and always has been.

What strikes me as novel in this case is that sheer numbers of YouTube views seem to have raised a presumption that Katy Perry and her co-authors must have heard it. That's frightening. I might be exposed to a piece of music in the gym, however hard I try to shut it out and concentrate on my workout, and therefore become a prospective infringer.

How can this be addressed? It's right that the copyright owner should get something when another composer appropriates their hard (or even not-so-hard) work. What is needed is a narrower concept of what amounts to actionable appropriation, as well as consideration of what damages should be awarded and whether there ought to be some sort of licensing scheme to cover some types of infringing act. In the Kay Perry/Flame case, the situation is complicated by the fact that a jury made the decision that there had been an infringement, and having a jury decide matters like that doesn't appeal to me as a sound way to deal with them. Perhaps that accounts for why just taking the beat was held to be an infringement. In the name of research I have listened to the two songs on YouTube, and indeed the beats are very similar, although they are also pretty mundane and I wonder where Flame's came from in the first place. A rigorous analysis of the originality of the claimed work would be the starting point for a more rational approach to questions of infringement.

Another important difference between UK and US copyright law is that while the UK law considers the originality of a work as a whole, US copyright law is more inclined to take the work apart and look for originality in its components. Here, it seems to me quite likely that an English judge, asked to consider the two, might remark that the beats sounded similar but that the two songs as a whole were so completely different that the similarities could not be considered substantial. Perhaps it's not a problem that would ever come to court in this country, but the fact is that US copyright casts its shadow over the whole world and we need to take care always to distinguish what goes on there from our own approach.

Commodities, commodification, commoditization and intellectual property laws

In a piece in The Guardian today, Anish Kapoor is quoted as saying: "Only poetry and the more serious classical music seem able to resist becoming commodities." He admits that he has benefitted from "neo-liberalist commodification", and indeed few artists can have done as well as him out of it, but even so he doesn't make it sound like a good thing. Which I guess he doesn't think it is.

Commodification is not a necessary consequence of copyright (or more generally intellectual property) protection. What the world of commerce needs is proprietary rights:

The merchant must have property in the things in which he trades, his rights to that property must be identifiable, When he sells an article he must be able to assure the buyer that the things is his to sell; he must be able to prove his property in it, if he is challenged. (Hicks, A Theory of Economic History, OUP, 1969, p.34).

It is true as much for intangibles as for tangible things. Argubly, a far-reaching law prohibiting unfair competition could do the job of all IP laws, but giving them the status of property rights probably makes them much more useful - much more tradeable, and available for use as security - than a mere right of action against an unfair competitor would be.

So, to make intellectual property tradeable it is commodified - turned into objects of trade. "Commodification" is a term used in Marxist theory, where it denotes the process of giving an economic value to something that it didn't have already, by producing it and presenting it for sale rather than just consuming it oneself. It's different from commoditization, which is a term found in business literature to denote the process by which goods that have economic value and can be distinguished by their attributes - their uniqueness or brand - become simple commodities in the eyes of the market or consumers. Here, the meaning of "commodities" is somewhat different from the Marxian one: the word denotes goods that have full or substantial fungibility (a great word), meaning that the market doesn't care who produced them, as one person's commodities are much the same as another person's.

So it seems to me that commodification is an essential result, or perhaps a goal, of copyright protection, whereas commoditization is what intellectual property laws (trade marks probably play a more important role here than copyright) are designed to prevent. Kapoor can earn a living (a very good one, I imagine) because his work is commodified, but it would be incorrect to consider his creations as commodities because they are readily distinguishable from the works of other artists. Ineed, I can see an argument for saying that anything that can be labelled a commodity in the second sense mentioned above should not receive any form of protection from intellectual property laws (by which I mean, in the trade marks field, that purely descriptive or non-distinctive trade marks like BREAD for bread must not be registrable, not that bakers should be denied access to the trade marks system altogether).

This is an aspect of intellectual property law about which I am developing my thoughts, so please excuse any half-bakedness in this posting. Any comments would be gratefully received.

Spare Rib archive threatened by B****t

I was surprised when I read about this today in the Guardian. Why should the British Library's digital archive of the celebrated feminist magazine have any problems arising from the impact on the orphan works directive of B****t?

My first thought was that the Directive (implemented in s.44B and Sched.ZA1 of the 1988 Act) must surely remain part of UK law. But (according to its website) the BL has been advised by the soi-disant Intellecual Property Office that the "legal exception" (properly, permitted act) would no longer apply. Which makes me ask, what is the BL doing taking legal advice from there? Don't they have lawyers (with insurance)? Given the extent to which the BL works with copyright (all the time), I would have thought the advice should have been flowing, if at all, in the opposite direction.

Thanks to Eoin O'Dell's Cearta blog I have now looked at the draft Intellectual Property (Copyright and Related Rights) (Amendment) (EU Exit) Regulations 2018 (pdf) and their Explanatory Memorandum (pdf). I am astonished to see that the government plans to throw the baby out with the bathwater, repealing (or "omitting", as the legislation says - is that another example of B****t Newspeak?) section 44B which is the permitted act, along with Schedule ZA1 (and I do think that with a title like that it probably deserves something, though I'm not sure repeal is called for).

Is the real problem that the right to issue copies etc across the EU will be lost (and as the archive is online it is available, presumably, EU-wide)? Would geo-blocking help (but if it would, is it acceptable)? The BL won't be able to add anything to the EUIPO database, but if it has published stuff in reliance on the fact that it was in the database then it seems to have complied with para 5 of Sched. ZA1 and I don't see anything to require it to refresh its due diligence. It looks as if Cultural Heritage Institutions in the UK will no longer be able to look at the EUIPO database (which seems a bit miserly) so in future it would be impossible to comply with para 5: but that doesn't have to destroy the legal basis for the Spare Rib archive.

The domestic licensing scheme (s.116A and SI 2014/2863) might help but seems too limited, and expensive, so I am disregarding it as a practical alternative. I will however note that the SI is being amended to remove references to the EU database - which as the Regulations stand is an essential component of a diligent search. Well, of course this has to be done, but why couldn't the same approach be taken to the permitted act?

The answer is, I guess, that there was always a certain amount of tension between the UK's licensing approach and the Directive's permitted act approach - described by Eleonora Rosati in this paper and by the IPKat, 22 November 2013. Eleonora suggested that the UK law was incompatible with the directive, the Infosoc directive, the Copyright, Designs and Patents Act 1988, and even the Charter of Fundamental Rights, which is a pretty comprehensive charge sheet. On that basis, I can imagine that the UK government was content to see the back of the EU orphan works scheme: in the orphan works sphere, the UK had been taking back control since 2013. So following B*****t orphan works will be subject to the IPO-operated licensing scheme, and the BL and others (a wider range of others than under the Directive) can pay for the privilege of using orphan works.

Of course we have to respect the will of the so-called majority (including, I am pretty confident, no readers of Spare Rib) who voted to trash all the hard work that has gone into this.

Numbering of "comparable" UK trade marks

The UK-only trade marks that will, if leaving the EU ever becomes a reality, be carved out of existing EU trade marks are being called "comparable" trade marks. It seems like an odd choice of word, but compared with the madness that is Brexit this is a minor quibble. The Patent Office has published a notice about how these will be numbered:

In order to identify comparable UK rights and distinguish them from existing UK trade marks, the number allocated to the comparable mark will be the last 8 digits of the EUTMprefixed with UK009.
The following examples show how comparable UK trade marks will be numbered:

Existing EU trade mark	Comparable UK trade mark
000000977	UK00900000977
000025197	UK00900025197
000340513	UK00900340513
017867542	UK00917867542

By retaining the EUTM number, we aim to keep the administrative process to a minimum.

Of course the best way to "keep the administrative process to a minimum" (let's read that as if it had the word "burden" in place of "process" - one does not keep processes to a minimum, and in any case it is surely more accurate to say it's as small as possible, not a minimum) would be to stop the nonsense altogether, but our Prime Minister is clearly dead set on it. As a numbering scheme this makes sense and is pretty simple - it reminds me of how when the 1994 Act came into operation the Registry started with number 2,000,000, which meant losing only a few numbers but provided a nice easy way to recognise "new Act" trade marks.

I wonder what will happen to comparable UK trade marks when the country rejoins the EU in a few years' time? Is the government planning for that contingency yet?