We assisted Angela in her preparations for her all-important Dragons’ Den pitch and have long assisted Angela with the legal protection of her brand, which will be a key issue as she looks to expand her business empire.

Well done Angela!

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”?

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FACTS: This case emanated from three references from the French Cour de cassation, all dealing with Google’s advertisement system, “AdWords”.  In order to assist the ECJ with its final decision, the Advocate General (AG) has recently published his decision.

There were various key aspects of trade mark law at issue in this case.  The trade mark proprietors who were complaining about Google AdWords, such as Louis Vuitton, had to prove various elements, namely:

Article 5(1) of Directive 89/104/EEC

(1) That “use” of their marks was “in the course of trade”.  The AG took the view that Google AdWords is clearly a commercial enterprise with a view to a gain and so the condition “in the course of trade” was satisfied. This hardly seems surprising.

However, the AG seemed to miss a potential argument raised by the English Court in the case of  Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 159. In the Reed case, the Court of Appeal held that the use of metatags was invisible to members of the public and thus use of trade marks in metatags may well not count as “trade mark use” in the course of trade.  Of course, metatags and AdWords are different situations, but both involve essentially invisible processes in terms of their public facing aspects.  In any event, the AG did not raise this issue.  Instead, he took a slightly more tortuous route to finding non-infringement….

(2) Whether use is made in relation to goods or services which are identical or similar to those covered by the trade marks – the AG held that Google AdWords was not identical or similar to any of the goods or services covered by the trade mark registrations, so this condition was not satisfied.

(3) Whether the use affects or is liable to affect the essential function of the trade mark, by reason of a likelihood of confusion on the part of the public – in this respect the AG held as follows:

“As with natural results, internet users will only make an assessment as to the origin of the goods or services advertised on the basis of the content of the ad and by visiting the advertised sites; no assessment will be based solely on the fact that the ads are displayed in response to keywords corresponding to trade marks. The risk of confusion lies in the ad and in the advertised sites, but, as has already been pointed out, the Court is not being asked about such uses by third parties: it is being asked only about the use by Google of keywords which correspond to trade marks.

It must be concluded, therefore, that neither the display of ads nor the display of natural results in response to keywords which correspond to trade marks leads to a risk of confusion as to the origin of goods and services. Accordingly, neither AdWords nor Google’s search engine affects or is in danger of affecting the essential function of the trade mark.”

Article 5(2) of Directive 89/104/EEC

(1) Whether Google’s uses of keywords which correspond to trade marks affect other functions of the trade mark besides its essential function, in particular, whether they take unfair advantage of, or are detrimental to, the distinctive character or the repute of the trade marks – this was a difficult issue for the AG.  Clearly, the AG felt uncomfortable that if he held in favour of the trade mark owners, this would have a detrimental effect on the efficient running of the Internet:

“The internet operates without any central control, and that is perhaps the key to its growth and success…Keywords are one of the instruments – if not the main instrument – by means of which this information is organised and made accessible to internet users. Keywords are therefore, in themselves, content‑neutral: they enable internet users to reach sites associated with such words. Many of these sites will be perfectly legitimate and lawful even if they are not the sites of the trade mark proprietor.

Accordingly, the access of internet users to information concerning the trade mark should not be limited to or by the trade mark proprietor.”

Accordingly, the AG stated in his Opinion that trade mark proprietors were not able to prevent use of their trade mark registrations via Google AdWords, pursuant to Article 5(1) or 5(2) of Directive 89/104/EEC.

In his Opinion, the AG also made some interesting comments about other aspects of trade mark law, and, in particular, the E-Commerce Directive (i.e. that Google could claim immunity for trade mark infringement in respect of AdWords for merely “hosting”).

CONCLUSION – this decision will worry trade mark owners, who see use of their trade marks by competitors through / on Google Adwords as unfairly free-riding on the goodwill and reputation they have developed (at great cost) over the years.

On the other side of the debate, some people consider that Google AdWords in its current form offers an extremely valuable method for injecting competition into the market.  The AG was clearly worried about the implications of ruling in favour of the trade mark owners, which he thought might result in a too a sanitised and easily controlled (by trade mark owners) list of results on search pages (both in terms of advertisements and organic results).

The AG’s decision also seems like the path of the least resistance for the ECJ to follow.  Ruling the other way, against Google, would really set the cat amongst the pigeons, in terms of the lucrative Internet search industry.  Many EU bodies are also by their nature strongly pro-competitive (and some are openly anti-IP), so maintaining the status quo seems to be the most likely outcome.  The AG’s decision has increased the chances of this end result coming to pass when the ECJ finally rules (probably early next year).

A further point to be made in this respect is that it is not just big companies such as Getty Images that can benefit from the legal system governing copyright.  Smaller companies and individual photographers can also benefit from the prevailing legal system governing copyright and use the way the system operates to their advantage in copyright disputes.

For further information about how to enforce your copyright interests, please contact us.

Outlaw reports that: “[JA Coles] has agreed to pay £1,953.31 in damages and interest over the use of the picture, plus Getty Images’ legal costs”.

COMMENT:  Getty Images are well know for enforcing their rights pro-actively. Most, if not all, copyright lawyers in this country will have had at least one client contact them with a letter before action from Getty Images complaining about alleged copyright infringement.

It appears that Getty uses technological automated methods to spot infringements, so the chances of instances of copyright infringements of their photographs coming to light is perhaps quite high.

Judging from certain blogs and bulletin boards, many people are shocked that Getty would pursue an alleged infringer for damages after it has removed the image from its website.  However, Getty will no doubt argue that the value of their business and future revenue streams very much depend on protecting their copyrights robustly.

One thing, however, is clear.  If you have copied an image owned or controlled by a company such as Getty (without permission) and reproduced this image in some material form, then this is likely, in many circumstances, to constitute an act of copyright infringement.  Normally, a company such as Getty would be entitled to damages or a notional licence fee (which I understand to be around the £2,000 mark for Getty’s business).  Innocence is no defence to such an act of copyright infringement and simply removing an image after an act of copyright infringement has taken place does not expunge the original act of copyright infringement.

Furthermore, copyright infringement cases, even small ones, do not go onto the small claims track in the Courts.  Instead, such cases are often issued in London’s High Court.  In the High Court, the winning party can often recover their legal fees from the losing party.  Companies such as Getty often retain very expensive lawyers.  Therefore, a company who ignores a warning letter about copyright infringement could be faced with a very expensive legal case on its hands, even if it just emanated from a “minor” infringement.

Lesson: if you happen to receive a copyright infringement warning letter, don’t ignore it, as that it usually a recipe for even more pain.  Seek professional advice.

FACTS: A German internet based business had terms in force on its website which stated, amongst other things, that a purchaser would be liable to pay compensation for any deterioration in the goods through use for their intended purpose. There was a German law which allowed suppliers to charge consumers generally for the use of goods they return. The German court asked the European Court of Justice (the “ECJ”) for a ruling whether this German law as compatible with the European Directive 97/7/EC on distance selling (the “Directive”).

DECISION: The ECJ held that:

• A provision that allows a seller to claim compensation from the consumer for the value of the use of the consumer goods, was not compatible with Articles 6(1) and 6(2) of the Directive.
• Articles 6(1) and 6(2) do not prevent a consumer from being required to pay compensation for the use of the goods if he has used the goods in a way which is incompatible with good faith or unjust enrichment.

COMMENT:  This case is instructive for companies selling in the UK,  as it confirms that the only charge a supplier can impose on a consumer cancelling a contract under the Directive is the direct costs of returning the goods to the supplier. Other fees such as administration or restocking fees are not permitted under the Directive.

The Directive is an important constituent of “Website Law” and needs to be carefully considered by those companies involved in “Distance Selling” over the internet.

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.