BACKGROUND: The High Court has recently upheld the decision of the Patent Office (otherwise known as the Intellectual Property Office (IPO)) in the case of Nampak Cartons Ltd v Rapid Action Packaging Ltd [2010] EWHC 1458 (Pat), 18 June 2010. The hearing officer in the Patent Office had held that a patent for a carton for holding a sandwich with a specific means for tearing the carton open was valid.

The appellant (Nampak) appealed the decision of the hearing officer of the Patent Office that the patent (owned by Rapid Action) was valid.  In particular, Nampak sought to revoke a patent on the grounds that it was obvious in the light of cited prior art.

The Judge in the High Court, the Honorable Mr Justice Floyd held that he could interfere with the decision of the hearing officer if the hearing officer had erred in principle or was clearly wrong.  The Judge also referred to a previous case which stated that: “Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the judge’s evaluation” (as per Lord Hoffmann in Biogen v Medeva [1997] RPC 1 at page 45).

COMMENT

This decision is good news for those companies who are reluctant to spend millions of pounds litigating patents in the High Court.  If a company simply wants clarity on whether a patent is valid or invalid, and/or whether a product or process infringes a patent, then such an applicant may apply to the Patent Office for a declaration in this respect.  Such an application is likely to be a fraction of the price of making such an application in the High Court and crucially even an unsuccessful applicant will not be exposed to such a high level of legal costs as would be the case if such an application was made to the High Court.

Expect more companies to lodge such applications in the Patent Office in order test whether certain patents are valid.

If you would like to discuss making such an application to the Patent Office, please feel free to call us in confidence.

The Judge in this important piece of copyright litigation held that pursuant to section 3A of the Copyright, Designs and Patents Act 1988, which implements Article 3 of the European Database Directive (96/9/EC) (the “Directive”), that the process of preparing these football fixture lists involved very significant labour and skill, and was not merely the application of rigid criteria to the processing of data.  Accordingly, this meant that this “correct” kind of labour and skill (in qualitative and quantitative terms) qualified the fixtures lists for database copyright protection.

The Judge also held that the fixture lists were not protected by the sui generis right in the Directive (known as the “database right” in the Copyright and Rights in Databases Regulations 1997 (SI 1997/3032)), as there had not been any substantial investment in obtaining, verifying or presenting the content of the lists, as opposed to creating them.

COMMENT

This decision will be welcomed by UK football organisations and other sporting bodies that compile their fixtures in a similar way to that of the English and Scottish football leagues. It will also cause concerns for those companies whose businesses rely on reproducing such fixtures lists.  Such companies should perhaps review the way in which they are reproducing football fixtures lists etc, to make sure they are not vulnerable to a claim of copyright infringement.

This case was specific to its facts and will not necessarily help all database owners.  The Judge was clear that it was the “correct” type of skill and effort which went into preparing the fixture lists which was crucial.  Not all databases will utilise this type of skill and labour and so might not benefit from database copyright in the same way.  Of course, this could mean that companies reproducing databases of different kinds (to football fixture lists) might be less at risk of infringing copyright and/or the database right.

In brief, the ECJ held that:

1. It would not be trade mark infringement to use a third party trade mark as a Google Adword, so long as it was clear (and not confusing) in the search results that the advertiser in question was not the source of the trade marked goods and/or services.
2. Google was not liable for registered trade mark infringement (on the basis that an Internet referencing service provider which stores, as a keyword, a sign identical with a trade mark and organises the display of advertisements on the basis of that keyword does not use that sign within the meaning of Article 5(1) and (2) of Directive 89/104 or of Article 9(1) of Regulation No 40/94).
3. The ECJ also stated that an ISP company, such as Google, would not be liable, so long as they didn’t play an “active” role of such a kind as to give it knowledge of, or control over, the data stored.  If the ISP has not played such a role, that ISP cannot be held liable for the data which it has stored at the request of an advertiser, unless, having obtained knowledge of the unlawful nature of those data or of that advertiser’s activities, it failed to act expeditiously to remove or to disable access to the data concerned.

Comment

This case gives some importance guidance on trade mark law in the UK and the EU on the subject of using third party trade marks as Adwords on Google.  Having said that, as with many questions of intellectual property rights infringement, there is still a significant grey area. In particular, you need to look at the advert in question (the one brought up by use of the third party trade mark as an Adword) and ask the following questions:

1. Could an Internet user be confused into thinking that the advertised goods / services are those of, or, are linked in some way, to the trade mark owner?

2. Is the trade mark expressly referenced in the advert itself?

If the answer to the above questions is “no” in all respects, then the chance of the use of trade mark (as an Adword) will be less likely to be considered an instance of trade mark infringement.

In most cases, adverts can be amended to stay on the safe side of the law of registered trade marks.  If you need any advice on registered trade mark law in this respect, please contact us.

Also, the third numbered point above of the Judgment is important in terms of Article 14 of Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 (the ‘E-commerce Directive’), as it is the first ECJ on the hosting defence in the E-commerce Directive.   This defence can be crucial for ISPs in matters such as defamation and copyright infringement. Unfortunately, this ECJ decision leaves a lot of questions predictably unanswered, such as what conduct is required before it can be said that such conduct is something more than merely technical, automatic and passive, and, also what time period can be considered as “expeditious”?

One of the first questions often asked of the inventors by the Dragons is “who owns the rights to this product”.  Frequently, this translates as to meaning who owns the intellectual property rights in a product.  In the most recent episode broadcast of Dragons’ Den, a 21 year-old inventor, Vernon Kerswell, faced what came close to threats of patent infringement from Peter Jones, who is a 25% owner of a competing toy company.

Peter Jones claimed that there was no way this inventor could sell his wheeled helicopter device because his company owned the “worldwide patent” on this invention.  Strictly speaking, there is no such thing as a unitary worldwide patent, so Peter Jones can be quite legitimately accused of over-stating his position right at the outset.  In any event, patent issues are rarely simple enough to make broad sweeping generalisations, without a careful consideration of the issues.

In assessing whether the wheeled helicopter device does amount to an instance of patent infringement, a court would analyse the claims of the patent to see if they cover the new product.  The court would also usually be asked to decide whether the patent in question was valid.

Many granted patents are in fact invalid, hence perhaps Peter Jones’ sensitivity by claiming the patent in question was “watertight”.  Also, the wider the claims of a patent are, the more chance they often have of being judged invalid.  Furthermore, patents are time-limited, generally to around 20 years, so while they offer a monopoly over the invention in question, it is a monopoly right that does not last forever.

In the field of helicopters, which have clearly been around for well over 20 years, one issue would be how much longer such patents will be in force.  On the other hand, novel applications of existing technologies can, on occasion, give rise to the right to a fresh patent.

Conclusion: inventors should not take at face value broad statements from patentees / patent licensees, such as Peter Jones.  The law in this area is complex, so much so that the great Evan Davis clearly is muddled himself referring to this patent infringement issue as a “copyright infringement” matter.

A specialist intellectual property lawyer can often find a new company an effective and safe way through what it called the “patent thicket”.  As is no doubt one of the Dragons’ mantra (so long as they don’t have a competing vested interest), perseverance pays dividends.

In February 2000, Last Minute Network Ltd applied to register a Community Trade Mark for the sign LASTMINUTE.COM.  UK readers will be familiar with Lastminute.com, which is one of the pioneers of e-commerce.  However, OHIM refused this trade mark application, ruling that the trade mark application LASTMINUTE.COM was “devoid of distinctive character”.  Last Minute Network Ltd appealed to OHIM’s Board of Appeal, but this appeal was dismissed with respect to travel services in class 39.

In March 2002, Last Minute Tour SpA applied to register a Community Trade Mark for the figurative sign for LAST MINUTE TOUR for a range of goods and services, including class 39.  Inevitably, Last Minute Network Ltd opposed this Community Trade Mark application.  Presumably because of not owning registered trade mark rights (for the reasons mentioned above), Last Minute Network Ltd were forced to rely on their “unregistered trade mark rights”.  As a result, they cited article 8(4) of Council Regulation (EC) No. 40/94:

Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the Community legislation or the law of the Member State governing that sign:

(a) rights to that sign were acquired prior to the date of application for registration of the Community trade mark, or the date of the priority claimed for the application for registration of the Community trade mark;

(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

In effect, Last Minute Network Ltd were relying on the English law of passing off.  This law protects goodwill built up in the course of trade in certain circumstances.  Last Minute Network Ltd’s position was that it had sufficient goodwill to entitle it to protect its unregistered trade mark (LASTMINUTE.COM) and that this goodwill existed before the LAST MINUTE TOUR application was filed and that the LASTMINUTE.COM goodwill was of more than local significance.

This dispute made its way through OHIM and to the CFI, with Last Minute Network Ltd claiming that OHIM’s Board of Appeal had not effectively taken into account the provisions of article 8(4) of Council Regulation (EC) No. 40/94.

The CFI judgment held that:

merely making a formal comparison of the two signs at issue, without taking account of the possible existence of an independent reputation for the expression ‘last minute’ in the minds of [Last Minute Network Ltd's] customers..might believe that the goods and services offered by the proprietor of the trade mark LAST MINUTE TOUR emanate from the proprietor of the earlier non-registered national mark LASTIMINUTE.COM, the Board of Appeal disregarded the reference in Article 8(4) of Regulation No 40/94 to the law of the United Kingdom, applicable to that mark, which was used by the applicant in the course of trade on the date on which the application for a Community trade mark was filed.

COMMENT: This case goes to show that a registered trade mark is not a pre-requisite to making a successful opposition to an overlapping trade mark application.  Last Minute Network Ltd’s case was undoubtedly strengthened by the substantial level of goodwill which it had generated.  However, the threshold for protectable goodwill is not necessarily so high and other owners of unregistered trade mark rights, such as goodwill in the UK, should bear this in mind when considering whether to try and enforce their trade mark rights, whether in trade mark opposition proceedings or in other trade mark / brand disputes.

In the first instance proceedings, the Honourable Mr Justice Blackburne made the following three declarations:

1. Mr Fisher was the co-author of the song.
2. Mr Fisher was a joint owner of the musical copyright in the song, his share being assessed at 40%.
3. The defendants’ licence to exploit the Work was revoked on 31 May 2005, the date when the action was started, 38 years after the initial release of the record.

This was, in effect, a strong victory for the claimant, despite the fact that the song dated back to the 1960s.

The case was appealed to the Court of Appeal, who upheld the decision that Fisher was a joint owner of the copyright in the song.  However, the Court of Appeal upheld the defendants’ appeal that given Fisher’s “excessive and inexcusable delay” before bringing a claim, i.e. from the 1960’s to 2005, it was unjust that Fisher should succeed in his claims to a joint interest in the song (i.e. whether he was entitled to the commercial spoils deriving from the song) or to have the implied licence to the respondents revoked.

The case was further appealed to the House of Lords (the highest court in the land for such cases of copyright infringement), which held that the Court of Appeal was wrong to hold that Fisher could on the one hand own the copyright in question, but then be barred from any chance of obtaining an injunction for copyright infringement.  The House of Lords noted that there was nothing under English law which set a time deadline for laying claim to ownership of copyright.  (The position in Scotland is apparently potentially different.) The House of Lords also noted the crucial distinction which exists between “the exercise of rights (i.e. exploiting copyright) and the obtaining of discretionary remedies (i.e. getting an injunction)”.

Accordingly, Fisher is now at liberty to enjoy his share deriving from the copyrights in the song and also has the theoretical right to obtain an injunction.  However, this theoretical right to an injunction would have to be determined by the trial judge in a claim for copyright infringement and be decided on the merits.  Although it was Fisher’s position that the proceedings were not about getting an injunction, such a claim was part of the originating copyright infringement proceedings.  In any event, it may well be that any further attempt to enforce an injunction against the defendants might be refused on equitable grounds relating to delay etc, but the point is that Fisher is not prevented from trying.

Hopefully for all parties, further proceedings will not be needed after this judgment from the House of Lords.

COMMENT: This case is bad news for the music industry.  One of main issues was on the subject of delay and related legal concepts, such as laches and estoppel.  The court rejected a defence on these grounds in respect of a claim to ownership of copyright.  This claim might therefore result in other aged musicians thinking about the possibility of launching their own copyright claims on the basis that they have not got their fair share of the historical spoils from a song.

Each case will have to be assessed on its merits.  But the case of Fisher v Brooker does offer considerable encouragement for potential claimants for musical copyright infringement (and for their lawyers).  Music companies are bound to be less impressed and may be talking to their insurers about this increased risk of a claim in respect of poorly drafted historic music agreements.

A new set of proposals by some of the leading individuals involved in intellectual property law, the Intellectual Property Court Users’ Committee, has set out to try and reduce this injustice and produced a report.

The report points out that the (London) Patents County Court has failed in one of its key aims: to offer a more cost-effective alternative to litigating intellectual property rights in England and Wales, as opposed to the High Court in London.  There are several proposals made by the Intellectual Property Court Users’ Committee, but one of the most significant is the proposal to limit costs recovery from the losing party from £25,000-£50,000 for intellectual property litigation.

If the government acts upon the proposals of the Intellectual Property Court Users’ Committee and make such proposals legally binding in terms of the Civil Procedure Rules, then this might go a significant way towards making legal proceedings in the UK more affordable, in the way in which other countries have already provided for.

As such, the proposals have the support of Strickland LLP, which is committed to providing IP litigation services to range of companies, from SMEs through the large blue-chip companies.

In a the recent case of Infopaq International A/S v Danske Dagblades Forening, Case C‑5/08, 16 July 2009, the ECJ considered whether reproduction of extracts from newspaper articles infringed copyright.

Facts

Infopaq International A/S (“Infopaq”) operated a business which collected summaries of selected articles from Danish daily newspapers.

Danske Dagblades Forening (“DDF”), a professional association of Danish daily newspaper publishers, became aware in 2005 that Infopaq was scanning newspaper articles for commercial purposes without authorisation from the relevant rights-holders. Taking the view that such consent was necessary, DDF complained to Infopaq about this procedure.

Infopaq denied that consent was required, and brought an action against DDF before the Østre Landsret (Eastern Regional Court), claiming that DDF should be ordered to acknowledge that Infopaq was entitled in Denmark to apply its data capture procedure without DDF’s or its members’ consent. The Østre Landsret dismissed that action, so Infopaq then appealed to the Højesteret (the Danish Supreme Court).

The Højesteret stayed the proceedings and asked the ECJ for a preliminary ruling on:

•    Whether the concept of ‘reproduction in part’ within the meaning of the Copyright Directive is to be interpreted as meaning that it encompasses the storing and subsequent printing out on paper of a text extract consisting of 11 words;

•    Whether acts of reproduction occurring during a data capture process, such as that at issue in the main proceedings, satisfy the conditions laid down in Article 5(1) of Copyright Directive and, therefore, whether that process may be carried out without the consent of the relevant rightholders, since it is used to draw up summaries of newspaper articles and consists of scanning those articles in their entirety to produce a digital file, storing an extract of 11 words and then printing out that extract.

The Law

Article 2(a) of the Copyright Directive states that:

“Member States shall provide for the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part:

(a) for authors, of their works”

Article 5(1) of the Copyright Directive provides that:

“Temporary acts of reproduction referred to in Article 2, which are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable:

(a) a transmission in a network between third parties by an intermediary, or

(b) a lawful use

of a work or other subject-matter to be made, and which have no independent economic significance, are exempted from the reproduction right provided for in Article 2.”

The exceptions and limitations provided for in Article 5(1) can only be applied in certain special cases which do not conflict with normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the right-holder (Article 5(5), Copyright Directive).

Decision

The ECJ held that Infopaq’s data capture process did come within the concept of reproduction as set out in Article 2 of the Copyright Directive, if the elements reproduced were the “expression of the intellectual creation of their author”.

The ECJ also ruled that the act of printing out an extract of 11 words, during such a data capture process, was not transient in nature as required by Article 5(1) of the Copyright Directive. Therefore, that process could not be carried out without the relevant right-holders’ consent.

Comment

The battleground in copyright disputes and in copyright litigation will be over the question of whether the reproduction in question will constitute an “expression of the intellectual creation of their author”.   It has been left for the national courts to decide upon this issue.

In the courts of England and Wales, copyright infringement matters have been recently decided by assessing whether a “substantial part” of the copyright work has been reproduced.  The substantial part test is part qualitative and part quantitative.

The new test introduced by the ECJ seems to be different.  It doesn’t seem to place the reproduced text in its originating context, but instead asks whether this text alone is the expression of the intellectual creation of their author.  This will be difficult for the national court to decide during copyright litigation proceedings and will provide hours of fun for barristers in court (and thus hours of frustration for clients…).

The ECJ also gave some useful guidance about Article 5(1) of the Copyright Directive.  In particular, in respect of what amounts to a “transient” act for the purposes of that provision. The ECJ made clear that, amongst other things, in order to fall under this condition the process had to be automated so that the copy created was deleted automatically, without human intervention.  Again, the ECJ left it for the national courts to decide whether such acts of reproduction were transient given this guidance.

Trade mark litigation is not an area for a non-specialist, as trade mark law is a specialist area requiring a broad experience of handling a range of trade mark disputes through the courts.

Set out below are some of the traps for the inexperienced lawyer dabbling in trade mark disputes / litigation:

1.    Beware a threats action. Section 21 of the Trade Marks Act 1994 gives the right to any person aggrieved by a groundless / unjustified threat of trade mark infringement.  Therefore, if you send out an unjustified threat of trade mark infringement (such as by way of a cease and desist letter / letter before action), then you, the trade mark owner, may find yourself as the defendant in a trade mark litigation action. Not the best way to start a trade mark enforcement programme…

2.    Think about other intellectual property rights. Intellectual property law encompasses a myriad of different intellectual property rights.  You want to make sure that you are enforcing the correct intellectual property rights.  Think about and take specialist advice on unregistered trade mark law (passing off), copyright, design rights, confidential information, patents etc.

3.    Consider building up your registered trade marks (and other intellectual property rights) portfolio before writing to the other side in a trade mark dispute.  It may often be better to get your house in order before firing off a letter alleging trade mark infringement.

4.   Consider the position in other jurisdictions. Even if you have a strong case for trade mark infringement in the UK, do you have operations in other countries, or an intention to expand internationally?  How will a trade mark dispute in the UK affect the trade mark position internationally?  What is your intellectual property / trade mark position outside the UK?  For example, could the other side cause you problems in the future outside the UK in respect of intellectual property infringements?

5.    Consider how you are going to pay for trade mark infringement / litigation proceedings if needs be. (Strickland  LLP can help here as our fees are much more competitive than our competitors at BigLaw).

6.    Make sure you get the first letter to the other side right. This is important, not only for creating the right impression on the other side, but also to create the right impression on the ultimate audience, the court.  Poor letters before action for trade mark infringement and other intellectual property infringement matters can have costs consequences later on in the litigation.

7.    Think laterally about the settlement agreement. If you reach a settlement with the other side, i.e. you avoid having to go through a round of litigation and attend court hearings, or at least you bring the litigation to an early end, then make sure the settlement agreement is sufficient for your needs, whether you are the claimant or the defendant.  One of the most annoying situations for a client is to spend a lot of money on an intellectual property dispute / piece of intellectual property litigation, only then not to fully exploit their bargaining position by virtue of poor drafting in the final version of the settlement agreement.

The above just gives a flavour of the inherent complexities in trade mark litigation and other forms of intellectual property litigation.