Patent Law Update: Patentee found liable for making unjustified threat of patent infringement against Boots

Monday August 10th 2009, by Piers Strickland

When patentees think they have spotted a patent infringement they have to be very careful about approaching the alleged infringer of the patent. If the approach is misjudged, then the approach can result in a claim being made against the patentee for unjustified / groundless threats of patent infringement proceedings.

The relevant provision in UK patents law is s.70 of the Patents Act 1977, which states that:

70 Remedy for groundless threats of infringement proceedings

(1)Where a person (whether or not the proprietor of, or entitled to any right in, a patent) by circulars, advertisements or otherwise threatens another person with proceedings for any infringement of a patent, a person aggrieved by the threats (whether or not he is the person to whom the threats are made) may, subject to subsection (4) below, bring proceedings in the court against the person making the threats, claiming any relief mentioned in subsection (3) below.

(2)In any such proceedings the plaintiff or pursuer shall, if he proves that the threats were so made and satisfies the court that he is a person aggrieved by them, be entitled to the relief claimed unless-

(a)the defendant or defender proves that the acts in respect of which proceedings were threatened constitute or, if done, would constitute an infringement of a patent; and

(b)the patent alleged to be infringed is not shown by the plaintiff or pursuer to be invalid in a relevant respect.

(3)The said relief is-

(a)a declaration or declarator to the effect that the threats are unjustifiable;

(b)an injunction or interdict against the continuance of the threats; and

(c)damages in respect of any loss which the plaintiff or pursuer has sustained by the threats.

(4)Proceedings may not be brought under this section for a threat to bring proceedings for an infringement alleged to consist of making or importing a product for disposal or of using a process.

(5)It is hereby declared that a mere notification of the existence of a patent does not constitute a threat of proceedings within the meaning of this section.

This case started when a letter was sent to a large number of Boots stores who were stocking the patented “Zeno” device (the invention claimed in the patent is a hand-held unit for the treatment of insect stings and insect bites) and to other retailers in Europe. The letter set out the patent and continued:

“Our client has now found out that your company offers in the United Kingdom under the trademark Zeno a medical device for the treatment of acne which is also based on the principle of the application of heat over a specific period of time …

Up to this point we cannot see any difference to the technical solution for which our client was granted protection, all the more so since the temperature range is also within the limits of the range that is protected by the patent, and the patent discloses a lower limit in respect of the period of time.”

The Judge had to decide whether the sole purpose of this letter was to: “make enquiries of the other person for the sole purpose of discovering whether, or by whom, the patent has been infringed”. This is because is it permitted to make such enquiries without incurring liability for unjustified threats pursuant to s.70 of the UK’s Patents Act 1977.

In this case, the Judge held that the letter was not designed just to find out if the patent had been infringed. In effect the Judge held that the letter amounted to a “veiled” threat of infringement. Case law has long-established that a threat can be made in a “veiled or covert, conditional or future” manner.

It will be interesting to find out the level of damages, which will have to be paid out as a result of these unjustified threats. Even if the damages are not great, the level of legal fees incurred by the losing party before the High Court will no doubt be significant and act as a large deterrent to others. All of which goes to emphasise that companies must consider carefully how to approach the issue of a potential patent infringement claim. A well thought out letter before action for patent infringement may ensure that the matter does not spiral disastrously in the wrong direction from the outset.

Image rights / trade mark rights: Michael Jackson’s family threaten trade mark infringement proceedings against counterfeiters

Thursday August 6th 2009, by Piers Strickland

According to the Associated Press and as reported by the IPKat, the estate of Michael Jackson is planning to tackle those who are selling merchandise which is not authorised by Jackson’s estate (presumably by way of threatening trade mark infringement proceedings in the US and elsewhere).

In the UK, the main way in which a famous individual can control merchandise is to attempt to register their name and/or likeness as a registered trade mark.

However, there are a few hurdles which lie in the way of such trade mark applicants. First, the trade mark application in question must be able to designate trade origin. Some English judges have been sceptical whether customers really care whether merchandise (such as a t-shirt with Michael Jackson’s photograph on it) is authorised by the celebrity or not. As such, there is doubt as to whether such trade marks are acting to “designate trade origin”. This was one of the objections when the estate of Elvis Presley tried to register various ELVIS trade marks in the UK: Elvis Presley Enterprises Inc. v Sid Shaw Elvisly Yours [1999] RPC 567.

Secondly, some celebrities have had trouble convincing the relevant trade mark registries that their names are distinctive enough to merit trade mark protection. The band Linkin Park had trouble in this respect before the trade mark registry.

Alex Ferguson also had trouble registering his name as a trade mark in respect of goods which were mere “image carriers”. Again questions of distinctiveness, in terms of trade mark law, were at issue. Ferguson’s legal team made an intriguing argument that such a rejection amounted to a breach of Ferguson’s human rights, i.e. he had a human right to register his name as a trade mark. Unfortunately, in terms of providing clarity for trade mark law, this argument never made it to the European Court of Justice for due consideration.

CONCLUSION: Although trade mark registrations may be hard to obtain in certain respects for celebrities, that is not to say it is not worth trying. If celebrities wish to try and exploit and control merchandising, and to prevent unauthorised merchandising (i.e. by way of threatening trade mark infringement proceedings) then obtaining registered trade mark rights of some description is likely to be very important.

The trick is making the right trade mark applications and at the right time. The ELVIS case showed that if a celebrity or their estate delays, then the chance of the relevant trade mark being non-distinctive through dilution may increase. This may thwart crucial future trade mark applications.

New proposals to cut the cost of intellectual property litigation in the UK

Tuesday August 4th 2009, by Piers Strickland

The cost of running intellectual property ligation (i.e. litigation concerning patents, trade marks, designs, copyright etc) in the UK can often run into millions. As a result, many SMEs are effectively barred from engaging in intellectual property litigation. This is a serious issue as it constitutes a barrier to SMEs having access to justice.

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.

Trade Mark Law Update: Can you register as a trade mark the shape of a Mars bar?

Monday August 3rd 2009, by Piers Strickland

According to the European Court of First Instance (CFI), you can’t.

The CFI held that the shape of the Mars was too common and non-distinctive to be registrable as a trade mark in the EU.

The CFI commented that the “rounded chevrons” on the top of the Mars bar would be seen to be decorative, rather than a “badge of trade origin” – which is a pre-requisite of being registrable as a trade mark in the UK / EU.

COMMENT: Shapes are potentially registrable as trade marks, but owners will often face a tough struggle proving that such shapes are distinctive enough to deserve being given protection as registered trade marks. The CFI, and other trade mark arbiters, are also keen to prevent any one trader from having exclusive trade mark rights over a shape which other traders will want / have to use as well. In other words, the authorities are always trying to prevent generic items being trademarked. However, that will not stop the likes of Mars continually try to chip away at the trade mark authorities, to further protect their brands.

This is because additional trade mark registrations normally equate to a stronger and more valuable brand for the owner.

Website Law / Web Law – Court of Appeal of England and Wales considers effectiveness of exemption clauses on websites

Friday July 31st 2009, by Piers Strickland

Most people (especially cautious creatures such as lawyers) worry a bit when posting content online in blogs etc, especially anything which could be considered to be “advice”, legal or otherwise. The thought of some nicompoop relying on a blog instead of paying for proper detailed advice can keep website owners up at night. The Court of Appeal of England and Wales has kindly added to that paranoia. Many thanks, M’Luds.

In a case about a disclaimer on the website of a pool installers’ trade body, SPATA (Gary Patchett And Karen Patchett V Swimming Pool & Allied Trades Association Ltd), the Court of Appeal had to decide whether the disclaimer provided on SPATA’s website was effectively brought to the Patchetts’ attention to enable SPATA to escape liability.

The case was quite complex and entailed a review of the long-standing English case law surrounding exclusion clauses, including the case of Hedley Byrne v Heller. This old case set out a test for deciding the scope of a duty of care between advisor and advisee.

Altough SPATA won, the take away message from this case is that exemption clauses should be located on the same page as any “advice” given on a website. Hence, if your website has blogs or articles on it, then a link or reference to the exemption clause in question should be clearly visible on the same page. Constructing your site like this would increase the chances of any exemption clause at least being effectively brought to the attention of the relevant reader. (Whether the exemption clauses will be effective themselves is another question and will be determined by how well they are drafted.)

This court decision will be important in terms of Website Law / Web Law. Many (cautious) website owners will be reviewing their website terms and conditions and exemptions nervously in light of this new decision.

This case further serves to emphasise that Website Law / Web Law does not stand still. In order to maximise the chances of websites being fully compliant with the various “website laws”, website owners should seek periodic legal advice to ensure that they are minimising their exposure to legal liabilities, for example by tweaking their exemptions clauses and website terms of use.

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