The IPKat

"But everyone else does it": the Corporate edition

noreply@blogger.com (Stefano Barazza) — Thu, 23 May 2013 16:42:00 +0000

Last week, fellow Kat Neil delighted us with a brilliant post on one of the biggest nightmares of IP lawyers, who are so often confronted with the wisdom of the crowd. “But everyone else does it” is not only the client’s dreaded response to an advice he dislikes. It works equally well (or bad) to explain corporate practices that raise doubts or concerns. A couple of days ago, representatives of Apple appeared before the Permanent Subcommittee on Investigations of the US Senate, at a hearing dedicated to ‘Offshore Profit Shifting and the US Tax Code’, to testify about the Cupertino-based company’s fiscal practices (video here). This post is not a comment on these practices, but a collection of IP-centred thoughts, triggered by the arguments and issues discussed at the hearing.

A familiar sight welcomed this Kat
during a trip to Austria

The members of the Subcommittee, whose positions concerning Apple’s fiscal practices varied from appreciation to severe criticism, appeared particularly concerned by the discrepancy between the share of research and development conducted in the US, some 95%, and the allocation of the majority of its worldwide income, consisting in the profits made through the sale of products on several non-US markets, to subsidiaries in Ireland, where a very low tax rate is applied (a process characterised, by the Chairman, as intellectual property ‘shifting’ from Apple to its subsidiaries, for the purpose of minimising the company's tax burden). Apple clarified that all the profits generated by sales in the US (35% of worldwide income) were taxed in that country. The Chairman Senator Levin, however, argued that the company benefits from the favourable environment and services offered by the US. Senator McCain added

'[a] company that found remarkable success by harnessing American ingenuity and the opportunities afforded by the U.S. economy should not be shifting its profits overseas to avoid the payment of U.S. tax, purposefully depriving the American people of revenue' (statement here).

These remarks trigger an interesting question: what is the relationship between corporate taxes and IP?

Answering this question requires a level of abstraction. If taxes paid by individuals are generally seen both as a compensation for services rendered by the public administration and as a contribution to their financing, proportional to the citizen’s income, the situation is different in relation to corporations. Many of the services they benefit from are either financed through non-income based taxes (e.g. property taxes in relation to local services), or are indirect and non-exclusive. As far as IP, in a broad sense, is concerned, these services include the establishment of an intellectual property law system (through relevant national legislation and international cooperation efforts), the creation of judicial bodies and procedures that ensure the enforcement of IP law, the creation and maintenance of a high-quality educational system (from which future innovators come from), and the development of research-centred policies (including public research financing, incentives for research and development, grants and international exchange programmes, etc.).

Assuming that a relevant part of corporate taxes is indeed devoted to this aim, it would be interesting to measure the efficiency and costs of these services, comparing these data with corporate tax contributions. In this hypothesis, the interdependence between the IP system, the companies that use it, and the (future) inventors that fuel it would necessary imply that, when companies attempt to minimize their fiscal burden, the overall development of the intellectual property system, and its beneficial effects, could be reduced, to the detriment of companies themselves. In other words, low-taxed profits may generate happy share holders in the short term, but may also take a long term hit on the overall efficiency of the IP environment from which the companies benefit. Several arguments could dispute this reasoning. For example, we could argue that a very small amount of corporate taxes is used to improve the IP system, or that its efficiency does not justify the current tax rates - Apple's CEO expressed its disappointment about the length of IP trials in the US, in contrast to the fast productive cycles of the same products which are the matter of the underlying disputes. Most of these counter-arguments, however, share a common concern: it is in the companies' interest that their taxes are invested in the development of a working and efficient environment for the protection of IP. Perhaps the Subcommittee should have focused on this perspective as well, since it may actively influence the companies' fiscal strategies.

Tim Cook, Apple's CEO

There is more to the story, though. Most of Apple's hearing revolved around its tax practices, the interests of shareholders versus those of the American people, and the enormous amount of cash owned by Apple oversea (more than US$ 100 billion). Although intellectual property was originally meant to protect 'the labours of the mind, productions and interests as much a man's own, and as much the fruit of his honest industry, as the wheat he cultivates, or the flocks he rears' (Davoll v Brown, 1845), its use has recently shifted, from a primary force in company growth to a strategic asset frequently asserted for defensive purposes. This shift has been accompanied by an increase in patent transfers, F/RAND litigation, hold-up and other defensive or anti-competitive practices, and a corresponding decline in patent quality (noted by the OECD here), and slowdown of investments in the research and development of innovative technologies (exacerbated by the economic crisis and by investments in incremental innovation and other areas of IP). Fast productive cycles, which represent one of Apple's strengths, and incremental innovation are capable of generating fast upgrade rates and a corresponding high income, reinforced by the usually generous gross margins enjoyed by companies in the ITC sector. However, the long term sustainability of a business remains strongly rooted in its ability to bring real innovation to the market. From this point of view, although incremental innovation has many positive effects, as it allows companies continuously to bring improved products to the market, it also generates a slow but continuous deceleration in medium term sales, which is usually offset by a new generation of products, based on a more innovative technology.

These dynamics suggest that investments in research and development could provide important long term benefits. A low fiscal burden, coupled with high cash deposits and generous policies for rewarding share holders, may improve a company's financial stability in the short term. By contrast, a higher participation to public spending in the IP sector, through a fair tax contribution, and the use of cash reserves to improve the company's potential to generate innovation, may result in lower short term income, and meet the share holder's criticism, but should secure the long-term business sustainability which essentially gives innovative companies a competitive advantage independent from the market's trends, and the stability that comes from the reduced reliance on it. Even if market dynamics, consumers' preferences and strategic use of cash and IP assets appear to drive competitors' moves, the "everyone else does it" mantra may prove, once again, to be a weak argument.

Can unfit copyright laws favour businesses' growth and emergence of new services?

noreply@blogger.com (Eleonora Rosati) — Thu, 23 May 2013 09:29:00 +0000

Surely thinking about (bad)
copyright and innovation:
Katfriend, photographer and copyright owner
Douglas McCarthy's Pushkina

After a week in Shanghai, this Kat is back on the blogosphere with a question which has been haunting her for the past few days, even more than jet-lag or the conclusion of season 5 of Mad Men (which she could enjoy in its entirety while on the plane back to London).

The obsessive (well, sort of) question has arisen following a bit of reflection on the (quite trite) universally acknowledged wisdom that good copyright laws might favour innovation and growth. But can the contrary also be true? In other words, can there be innovative (and lawful) services which develop or even emerge thanks to unsatisfactory legal solutions?

Surely this question has been addressed already, but two recent examples might be also employed to respond 'yes' to this Hamlet dilemma.

Netlifx as producer and provider

The first example might be that of Netflix, the popular provider of on-demand internet streaming media currently available to North and South America, the Caribbean UK, Ireland, and Scandinavian countries.

It is estimated that on a normal week night, Netflix accounts for almost a third of all internet traffic entering North American homes [the remaining two-thirds being directed to IP blogs].

As both Kevin Spacey's fans and Bloomberg Businessweek readers will know, Netflix has recently decided to act not just as a provider of third parties' licensed contents, but also as a provider of self-produced contents, the first being the political thriller House of Cards, starring American Beauty's lead actor.

According to The Hollywood Reporter, House of Cards has bowed to near-unanimous praise, with many heralding the streaming service as a legitimate rival to premium cable outlets HBO and Showtime.

Netflix's plan is to continue producing original works and stream them directly. Besides considerations as to the progressively and rapidly dissolving identity of providers as ... well ... just providers, it was particularly interesting to read Bloomberg Businessweek's analysis on the future relationship between Hollywood studios and Netflix (and similar services). According to the magazine,

"[There is] concern ... that the studios will stop licensing content now that Netflix is in the originals business. Hollywood is right to remain wary of letting any single entity get too powerful. As Netflix expands overseas, it intends to strike worldwide licensing deals instead of hammering them out country-by-country. From a studio perspective, that could give Netflix the ability to come up with lucrative terms that no regional competitor could match."

From an EU perspective, it has become quite common - and sometimes even rather un-original - to say that copyright licensing should be made easier across the EU, possibly by establishing an EU-wide licensing system which could (to some extent) adjust the territoriality principle to the digital age. Last year the Commission issued a proposal for a directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market, and a few months ago the "Licences for Europe" initiative was launched.

However, while some private actors have entered partnerships to create a de facto system of multi-territory licensing (eg online music licensing hub Armonia, on which see Katpost here), at the EU level there is still no system of multi-territory or pan-European licensing in place.

So, if the concerns raised by Bloomberg Businessweek translated to reality, in Europe at least this could be also because of the lack of a default legislative framework allowing pan-European licensing.

There is no need to say, suggests Merpel, that in any case quality, availability and price of an entertainment product remain the most important things to determine its commercial success.

Amazon's Kindle Worlds

The second example comes from Amazon and its new publishing model Kindle Worlds.

This is basically intended to boost and make money from fan fiction. It is well known that the relationship between copyright and works which build upon previous original ones has not always been idyllic.

As explained by Forbes, Kindle Worlds will let "would-be writers publish, and profit from, fan-fictional e-books with the blessing of the original characters’ creators, who will receive royalties from every sale."

The revenue split is considerably less generous than that enjoyed by authors who use their own characters.

Kindle Worlds has already signed licences with franchises owned by Warner Bros and plans to get new ones soon. It is apparent that Kindle Worlds has the potential to be quite a lucrative business (at least for Amazon), in that fan-fiction has become increasingly popular and, in some cases, hugely successful (eg Fifty Shades trilogy, even if the terms of Kindle Worlds prohibit pornographic or extremely sexual fan fiction).

Overall, the examples above might serve to highlight that sometimes innovative services are provided and have the potential to develop also because competitors might be left behind struggling with the constraints of outdated copyright laws, or the law itself and its application are so uncear and unpredictable (eg fan fiction and copyright exceptions) that specific contractual arrangements might appear the most sensible (if not only) form of clarification.

The Green Mountain state sues a Texas patent troll

noreply@blogger.com (Jeff John Roberts) — Thu, 23 May 2013 06:21:00 +0000

This cat can attest that the state of Vermont is not only one of America's loveliest states, with big lakes and green mountains, but one of its quirkiest too. The place has a penchant for electing socialist Senators and hosting "Bread and Puppet" theatre and has a strong independent streak dating from its days as an independent republic.

But into this happy land roamed a Texas cowboy who carried not a six gun, but something more

A new cat-sherriff comes to Vermont

dangerous -- hundreds of demand letters asking small businesses of all stripes to pay a $900-$1200 patent license for each employee who used an image scanner.

"As you can imagine, most businesses, upon being informed that they are infringing someone's patent rights, are interested in operating lawfully and taking a license promptly," wrote the cowboy in one of his many missives.

The cowboy in question is Jay Mac Rust (who can see a picture of him and his chapeau here), who is an American "super lawyer" and counsel for MPHJ, a patent assertion entity that wrangles more than 40 shell companies, all of which have the same address - at a mail service company in the state of Delaware. MPJH's handful patents, one of which issued in 2001, cover basic imaging technology and have not been asserted until last year -- when MPHJ targeted everyone far and wide, including a non-profit organization that assists disabled Vermonters.

The Green Mountain state ultimately decided enough was enough and this month sued MPHJ and its passel of shell progenies, arguing its behavior amounted to a violation of Vermont laws against unfair and deceitful trade practices. Here, to wit, are some of the alleged unfair acts:

Threatening infringement actions despite no evidence that the defendants had in fact infringed the patents
Using shell companies to hide the true owner of the patents and encourage quick settlements
Implying that defendants' failure to respond to initial letters suggested that they had consulted patent counsel that would cost more than the license demand

And here are of some of the allegedly deceptive ones:

Stating that plaintiff would sue if the defendant did not reply in two weeks
Stating that the licensing program had received a "positive response from the business community"
Saying that the average license price was $900-$1200 per employee and that "most" letter recipients had paid

The IPKat's head is spinning at seeing a major patent matter -- which are always a federal affair in America -- land in a state court, and no less in tiny Vermont. The state government's response is perhaps the most creative one yet to the ongoing problem of patent trolls like Mr. Rust in America, whose activities slurry the good names of patent owners. Other recent ideas include proposed federal laws to expand inexpensive post-grant review and to force patent owners to identify themselves.

Merpel muses on starting
her own patent republic

Merpel, though, wonders about jurisdiction issues and whether the good people of Vermont will be able to pin down MPHJ in state court for long. While reining in patent powers seems a laudable goal in this case, it also raises obvious questions of federal pre-emption.

As Vermont is a small and friendly place, this cat, in the course of his day job, decided to ring up the state's head lawyer to ask him about the jurisdiction issue. Sure enough, Attorney General William Sorrell was soon on the line. He explained that the state's legal complaint (read it here) took no issue with the patents themselves but focused instead on the deceitful nature of the letters. Sorrell added that MPJH has been tormenting a wide variety of businesses for years. One of the rural states main industries is craft cheese and dairy products (must visit, notes the IP Kat).

It will be curious if other states take up Vermont's tactics. California is well-known for asserting its robust consumer protection laws and may wish to fight trolls on behalf of Silicon Valley (but wait, says Merpel, the California government also has a booming business in partnering with non-practicing entities to seek patent licenses).

And if that isn't enough Vermont patent news for one day, the governor today signed a novel law -- unrelated to the MPHJ lawsuit -- that vows to protect the state's businesses from "unscrupulous patent trolls."

Wednesday whimsies

noreply@blogger.com (Jeremy) — Wed, 22 May 2013 14:15:00 +0000

Queijo de Cabra Transmontano:
non-minor-amended PDO

Around the weblogs. Until this Kat met Meera Nair, he was unaware of her copyright law and policy weblog Fair Duty. Well, here it is, and it's definitely worth taking a look at. Meanwhile, the MARQUES Class 46 European trade mark law blog lists another batch of "non-minor amendments" to EU protected geographical indications and designations of origin. This Kat would love to know how much scrutiny these non-minor amendments receive, what is their cumulative effect, whether the non-minor amendments always extend rather than narrow down the scope of protection and whether anyone is currently doing any research on this phenomenon. Elsewhere The SPC Blog has just launched its 2013 seminar, which takes place on 2 July in the London office of Olswang LLP (near the Old Nick). Whether you love pharmaceutical patents to the point of extending them, or side with the generic drug industry in aiming to prise them away from patent protection, this is for you.

Turkish academic and katfriend Mehmet Artemel has been busily spreading the word that the International Conference on Managing Intellectual Property in Universities is about to take place, for the third year in succession. As before, the venue is the Bogazici University, Istanbul, and the event runs from tomorrow, 23 May, through to 25 May -- so even if you can't magic yourself there in time for the beginning, you might yet make it for the end. The IPKat has asked Mehmet to let him know if there's anything particularly worth reporting, in which case it will find its way on to one or other of a number of IP weblogs. In the meantime, you can check out the programme here.

Some Indexes attract more
attention than others ...

This Kat has previously praised the Global IP Index, which is coordinated and edited by Taylor Wessing LLP partner and Katfriend Roland Mallinson, not least because some information about how people regard the IP rituals and routines in other countries is always fun, and also because it has an inherent capacity to encourage reforms in those countries that score badly when compared with others. Each year's Index draws its data, and therefore its appeal, from the survey of IP owners and practitioners, including many readers of this weblog. To refresh readers' memories, each year's report gives a snapshot assessment of IP regimes around the world and recent developments. In response to requests from practitioners and some government officials, this year's Global IP Index, the fourth, has now expanded the number of countries which it embraces [the 12 newly-listed countries include Switzerland, Ukraine, Indonesia and Thailand]. Says Roland:

"I hope this may appeal to your wider international readership as a result. However, there's still the option of narrowing responses to just a few countries and to answer anonymously if preferred, so it can still be done fairly quickly and painlessly".

If you enjoy sharing your opinions with others, or just enjoying doing online surveys, the link is here.

The MARQUES Workshops on trade mark coexistence agreements (or 'prior rights' agreements, if you prefer) are filling up nicely. The first, in English, takes place in Rotterdam on 18 June (details here); the second, in German, will be held in Munich a day later (details here). If they work out as well as is hoped, with luck there will be more of them in the future, spread across other European cities. But wouldn't it be grand to tell your grandchildren that you were there for the very first one ...?

Did celebrated artist
Jackson Pollock start out
by designing infographics?

If you love brands and like to savour the occasional infographic, you will probably appreciate this one which has been brought to the attention of the IPKat by Exeter, England-based law firm Stephens Scown Solicitors. It contains some fascinating data relating to UK trade mark filings in 2011. For example, did you know that three of the five top companies filing UK trade mark applications have names that end with the letter 'o'? [Merpel adds: can you name them?]. Also, Welsh applicants file three times as many applications as those from Northern Ireland, and the Scots file twice as many as the Welsh -- but if you add Northern Ireland, Wales and Scotland together you get only around as many applications as appear to come from East Anglia. So now you know ..

Speedypats can be okay -- if handled with care

noreply@blogger.com (Jeremy) — Wed, 22 May 2013 12:42:00 +0000

Will it all be plain sailing for speedypats?

Little over a month ago ("Coming soon: Speedypats", here), this Kat reported on the proposal in the United Kingdom to grant superfast national patents in just 90 days. He expressed some anxiety as to whether this was the right thing to do in terms of both theory and practice and, speculating as to how schemes for accelerated examination were working in the US and beyond, he asked his friends at Patexia for their view. Here, Patexia's Daniel Porter tells us what he thinks:

"Speedypat machinery

As every kat knows, grooming quality patents takes time. In recent years a glut of patent applications has left IP offices worldwide in a near-catatonic state. Here in America typical inventors expect to wait several years to get get a patent issued; a delay that many recognize as possibly undermining the goal of promoting rapid, competitive innovation. The United States Patent and Trademark Office (USPTO), like the United Kingdom Intellectual Property Office (UKIPO) and corresponding agencies elsewhere in the world, is trying hard to get its system up to scratch. These attempts have been no walk in the park for those involved and, for this reason alone, last month's UKIPO consultation considering 90-day-or-less prosecution (on which, see discussion here) piqued my curiosity.

My initial reaction ("can they really do a good job of examining a patent in 90 days?") was more disbelief than curiosity. I was surprised to find that the consultation laid out a plausible scenario and timeline for such expeditious examination. My curiosity turned instead to the effects on patent quality and the purported benefits for SMEs, the economy, and innovation. This led me to investigate the details of the proposed acceleration service more closely. What does this mean for the mechanics of search and examination to those with fur in the game? Are these speedypats really the cat's whiskers?

Approaching acceleration

Many intellectual property offices around the world already offer expedited examination. Some of these programmes succeed in reducing examination times to less than a year, but the 90-day speedypats programme is unique in its alacritous ambitions. In my estimation, the superfast program's success will depend upon even more carefully navigating many of the same issues facing existing acceleration programmes.

The two most prominent USPTO acceleration schemes are known as "prioritized examination" and "accelerated examination." Prioritized (also known as "Track One") examination is the newer of the two programs, effectively allowing 10,000 applicants to request the opportunity to pay a little extra (currently US$ 4,000 -- or US$ 2,000 for a small entity) and skip their inventions to the "front of the line." Prioritized examination doesn't mean faster examination, but instead a quicker route to get to the examination stage.

Merpel never did quite get the idea of electronic filing

Accelerated examination, on the other hand, aims to reduce examination time itself by requiring more up-front information as well as increased responsiveness from the applicant. The required "accelerated examination support document" and "pre-examination search document" burden the applicant with the task of locating prior art and to differentiate the claimed invention from earlier innovations with a high degree of specificity. Accelerated examination also requires that applicants make use of the electronic filing systems; they are restricted to a shorter turnaround for responses to office actions and must be available for a phone interview with the examiner. Prioritized examination is more expensive than accelerated examination, though paradoxically many recognize the latter (which requires substantially more preparation) as resulting in stronger, more strategic claims. Both services limit the number of claims per application.

Existing UKIPO acceleration services (reasons-based acceleration, combined search and acceleration, early publication) are in effect similar to these USPTO services. There is more than one way to skin the accelerated-examination cat, though, and notable procedural differences exist. Where the IPO typically performs the search and examination stages separately, USPTO examiners perform a prior art search in conjunction with their examination. Where the IPO publishes applications after a preliminary search, the USPTO publishes most unaccelerated applications before reaching an examiner for the first time (they categorically publish all applications 18 months after filing.) Where acceleration with the USPTO is more costly than normal filing, IPO acceleration comes at no extra charge, but may require the applicant to demonstrate a good reason.

Both offices also offer acceleration of international applications, leveraging the time and resources spent by foreign patent offices.

The UKIPO superfast acceleration seems modelled as a condensed copycat version of the combined search and examination (CSE) process. After an initial search and examination the application undergoes a first amendment and re-examination stage, followed by publication for public comment and a second amendment and re-examination stage. Superfast patents will cost up to £4,000 on top of regular application fees, will require applicants file online, and could establish tight deadlines forcing applicants to respond with cat-like reflexes.

Significant question marks remain surrounding how to guarantee thorough prior art search and public review. Solutions could include revisiting prior art search more than once throughout the application process, and even after patent grant (possibly resulting in revocation). The current standard period for public review is three months. The consultation hints that the IPO is considering a reduced timeframe, and seeks public comment on the utility of this review.

What to expect

So the cat's out of the bag. Superfast processing seems possible in practice--an extreme case of similar acceleration schemes available in the UK and elsewhere. Questions remain about overcrowding, patent validity, patent value, innovation diffusion, and the effects on economic growth. Right now, the best we can do is guess based on the information available.

The first empirical analysis of patent acceleration seems to be a recent report by the International Centre for Trade and Sustainable Development (ICTSD). Its goal was to investigate patent acceleration for environmentally helpful technologies as a climate change initiative. The report focuses on 5,000 "green" patents in seven countries. In addition to concluding that these services do in fact result in reduced examination time, the study found through citation analysis that accelerated patents were more effectively disseminated than their unaccelerated counterparts.

The study detailed several other interesting findings as well.

First, participation in acceleration programs was low, but demand still exists for this choice of service (and this demand appears highest in the UK). This highlights a common response to acceleration; that delay in the patenting process is advantageous to many entities hoping to maximize the length of their patent protection. Overcrowding won't likely become an issue. A related concern arose in a previous consultation. Some worried that inexperienced entities without representation may choose accelerated examination when it is not in their business interests. In a similar vein, the ICTSD study found that communication regarding the advantages and disadvantages of these services could improve substantially.

Finally, accelerated green patents are more valuable than their unaccelerated counterparts. This value does not likely stem from the shorter time scales, but instead from the more careful invention selection and scrutiny encouraged by many acceleration programmes.

I remain skeptical that such a short time frame for patent prosecution can guarantee effective examination and prevent the hasty issue of applications that will be invalid when examined more carefully. The IPO will need to construct with care its rules surrounding public review and prior art search, possibly requiring additional prior art search before application filing similar to the USPTO's accelerated examination. Whether superfast processing will benefit small-to-medium and the economy more generally remains unclear. But it will help some, while improving technological diffusion and reducing patent pendency, so the IPO seems wise to at least offer the choice".

Thanks, Daniel, for your survey and for your thoughts, which this Kat very much appreciates.

Huawei: the Duesseldorf court presumes to ask

noreply@blogger.com (Jeremy) — Wed, 22 May 2013 07:38:00 +0000

The Court of Justice of the European Union (CJEU) has been asked to consider some questions of vital importance to our understanding of how patent monopolies and standard-essential proprietary technologies fit in with the European Union's omnipowerful rules on competition and antitrust in Case C-170/13 Huawei Technologies. As the UK's Intellectual Property Office (IPO) succinctly summarises the underlying dispute, it concerns "a request for a preliminary ruling in a case concerning the abuse of dominant market position in the field of mobile communications technology". The questions referred for a preliminary ruling are:

1. Does the proprietor of a standard-essential patent who informs a standardisation body that he is willing to grant any third party a licence on fair, reasonable and non-discriminatory terms abuse his dominant market position if he brings an action for an injunction against a patent infringer although the infringer has declared that he is willing to negotiate concerning such a licence? [Says the IPKat, there's a good case for saying that, theoretically, this is a question that can be answered 'always', 'sometimes' or 'never' -- but the reality is, in his opinion, that what constitutes an abuse of a dominant position is a question of fact rather than a question of law. He wonders if the question could have been better drafted]

Or

Is an abuse of the dominant market position to be presumed only where the infringer has submitted to the proprietor of a standard-essential patent an acceptable, unconditional offer to conclude a licensing agreement which the patentee cannot refuse without unfairly impeding the infringer or breaching the prohibition of discrimination, and the infringer fulfils his contractual obligations for acts of use already performed in anticipation of the licence to be granted? [This Kat wonders how helpful such a presumption would be in practice where an injunction is sought, particularly in any field of fast-moving technological advance, since it depends on proof of so many variables. It might provide some measure of comfort where after-the-event relief is sought though]

2. If abuse of a dominant market position is already to be presumed as a consequence of the infringer's willingness to negotiate:

Does Article 102 TFEU [for which see full text below] lay down particular qualitative and/or time requirements in relation to the willingness to negotiate? [No. There's nothing laid down in Article 102 ... ] In particular, can willingness to negotiate be presumed where the patent infringer has merely stated (orally) in a general way that that he is prepared to enter into negotiations, or must the infringer already have entered into negotiations by, for example, submitting specific conditions upon which he is prepared to conclude a licensing agreement? [This Kat wonders why the referring court -- the Dusseldorf Regional Court, Germany -- is so keen to break down the fact-finding tasks into presumptions. It's a dangerous and slippery slope, particularly if, for example, the CJEU considers that such presumptions exist on these facts but it's not clear whether and, if so, to what extent, they might apply in other fields of technology in which essential standards practice is less well established]

3. If the submission of an acceptable, unconditional offer to conclude a licensing agreement is a prerequisite for abuse of a dominant market position:

Does Article 102 TFEU lay down particular qualitative and/or time requirements in relation to that offer? Must the offer contain all the provisions which are normally included in licensing agreements in the field of technology in question? In particular, may the offer be made subject to the condition that the standard-essential patent is actually used and/or is shown to be valid? [What's the betting that the CJEU will not engage this question at the level of detail at which it is asked, and will simply say that this is a matter for the referring court to resolve?]

4. If the fulfilment of the infringer's obligations arising from the licence that is to be granted is a prerequisite for the abuse of a dominant market position:

Does Article 102 TFEU lay down particular requirements with regard to those acts of fulfilment? Is the infringer particularly required to render an account for past acts of use and/or to pay royalties? May an obligation to pay royalties be discharged, if necessary, by depositing a security? [Ditto]

5. Do the conditions under which the abuse of a dominant position by the proprietor of a standard-essential patent is to be presumed apply also to an action on the ground of other claims (for rendering of accounts, recall of products, damages) arising from a patent infringement? [This presumes that there is such a presumption ...]

It's not so long since the IPKat praised the UK IPO for finally managing to give people enough time to enable them to make comments on the questions referred so that they could email Policy at the UK IPO and help the UK government decide whether it wished to make representations in the proceedings before the CJEU. However, the request for comment on this case was emailed on 21 May (ie yesterday), asking for comments by today. Fortunately, the IPO has now atoned for this folly and given a fresh deadline of 29 May for the receipt of comments.

How to pronounce Huawei here and here
How to pronounce Haway/Howay here and here

*************************************************

Text of Article 102

(ex Article 82 TEC)

Any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it shall be prohibited as incompatible with the internal market in so far as it may affect trade between Member States.

Such abuse may, in particular, consist in:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

(b) limiting production, markets or technical development to the prejudice of consumers;

(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;

(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.

Copyright and performance: reflections on a complex relationship

noreply@blogger.com (Stefano Barazza) — Tue, 21 May 2013 12:31:00 +0000

Although this Kat has recently been living with a spotty connection, which almost cut him off the blogosphere for a week, he noticed that Professor Rebecca Tushnet published a new article on 'Performance Anxiety: Copyright Embodied and Disembodied'. According to the abstract,

The primary economic and cultural significance of copyright today comes from works and rights that weren’t contemplated by the Framers of the Constitution’s Copyright Clause. Performance - both as protected work and as right - is where much of copyright’s expansion has had its greatest impact, as new technologies have made it possible to fix performances in records and films and as cultural change has propelled recorded music and audiovisual works to the forefront of the copyright industries. Yet copyright has never fully conceptualized performance, and this has led to persistent confusion about what copyright protects.

The author explains that performance, whose protection is usually justified either in relation to the presence of a technical element (the camera operator's choice of a shooting angle, the sound engineer's choice of a particular level), or of a creative one (the creative actions of the performers), 'is now the prototype for all works'. A play or score allows for a practically infinite set of performances; copyright, which expanded 'beyond exact copying to substantial similarity and derivative works', similarly covers an almost infinite set of potential variations. However, performance remained in the background, while copyright law focused on text and 'performance rights', and mainly dealt, in the digital era, with 'pure reproductions'. The article identifies several key issues in the relationship between performance and copyright: (1) how to identify the 'creative element' that makes a work of performance original and protectable, (2) who should be deemed its author and how to deal with joint authorship, and (3) how to assess infringement in this context. Let's briefly look at Professor Tushnet's view on each of these issues.

Creativity and fluidity
The author observes that plays and scripts, although meant to be performed, are protected as works, and that only certain performances are protected under US law (e.g. performances of a musical work or play, fixed in sound or audiovisual recordings). The protection of movies and other audiovisual works raises the possibility of recognising a separate protection for the dramatic work thereby depicted. Copyright law, however, 'has often ignored the fluidity of creativity, especially when it comes to works that are performed'. Contrary to literary works, performance is 'less fixed and predictable', as it is based on interaction between performers, which produces a unique interpretation of the underlying plot. According to the paper, this fluidity 'is inherent in any work under modern copyright law', and the boundaries of a work only emerge through comparison with other similar works:

Every copyrighted work is therefore like the script for a play: it is a blueprint, but not just for one particular instantiation. Rather, the blueprint can have a potentially infinite series of variations. All works are surrounded by possible derivative and infringing variants, most unrealized. However, as copyright’s scope expanded, the conception of a work of art, paradoxically, hardened.

Professor Tushnet describes the sacralization process that focused on a 'single canonical performance as the embodiment of a work', explaining that a static work raises fewer legal concerns than a changeable performance. To underline how performance may affect, and change, the meaning of the underlying work, she provides an exhaustive list of examples, ranging from Tina Fey's parody of Sarah Palin, to Jimi Hendrix's performance of The Star-Splanged Banner. The trasnformativeness of performance may not be widely recognized yet, but sensitivity towards it appears to be on the rise. The author cites the recent case of Keeling v New Rock Theater Prods as an example of this enhanced sensitivity, but warns that ' [i]f we don’t have a good vocabulary for explaining how meaningful performance is, it should come as no surprise that we don’t even know how to give credit to performers'.

(Joint) authorship
'[C]ontroversies over performance works', the paper notes, 'make up a large share of disputes over joint authorship in the U.S. system'. The courts' tendency to award authorship to a single person (motivated by the fact that joint authors share equally in the rights to a work, and can license the work non exclusively without the consent of the other authors) 'often leads to dismissiveness regarding the real creative contributions of others involved in bringing a work of performance to its audience'.

Kats are real performers!

The author recognises that economic reasons explain the focus on the doctrine of 'work made for hire', and that compensation for performers is usually expected to come from direct payment for their work, rather than from royalties. However, '[t]he ideology of creativity as the foundation of authorship suggests that (some) performers should count as authors'. Although contracts usually address the issues of authorship, through a 'work made for hire' clause, identifying the author remains important for many purposes. The inherent limitations of the test for joint authorship applied by US courts (which look at the specific intent to share authorship, and at customary roles), contribute to 'freezing notions of authorship and discounting the contributions of people who play vital roles in the form and content of the final work but who didn’t write scripts for it'. This flow could threaten copyright’s legitimacy, denying protection to creative contributions (the paper examines these issues in the context of some well-known cases, including the 'Innocence of Muslim' video, on which the IPKat commented here).

A plausible solution, according to the author, is to openly identify 'specific roles eligible for joint authorship treatment ..., making explicit judgments about manageability rather than implicit judgments about value'. On the other hand, instead, an overall reform of the system, through the allocation of interests proportionally to the contributions, or by partitioning copyright into smaller parcels, recognising 'microworks', would probably have an overall negative impact on the protection of authors' rights and third parties.

Performance as infringement

'Infringement inquiries', examined in the last part of the article, 'also raise difficult questions about how to compare distinct media, particularly when one medium includes a performance element and the other doesn’t'. The comparison requires a high level of abstraction, which calls for an appreciation of the inherent differences between the media (for example, literary analysis should not be applied to a movie). Professor Tushnet notes that courts have generally taken these aspects into account, when comparing movies with texts ('recognizing that film’s narrative techniques generally involve completely different kinds of expression than written texts') or with photos (the former being a 'wholly dissimilar and dynamic medium'), and when dealing with videogames (reasoning that 'infringement had to be evaluated in the context of the experience of gameplay rather than simply looking at screenshots'). Similarly, according to this study, jurors exhibit a high sensitivity towards performance, when comparing musical works.

Citing Newton v Diamond (where a court was confronted with the difficulties inherent to the distinction between performance elements and sound recording, and allocated the former to the latter), the author exhibits a cautious approach towards the shift away from written scores, in the context of musical works. 'More generally', she explains, 'careful consideration of performance elements in infringement claims may require courts to go beyond the terms with which they are familiar - plot and melody primary among them - and consider narrative techniques, rhythm, and other features that may affect similarity judgments'. Thus, courts 'should be skeptical about performance-based or cross-genre infringement', as the comparison of works and the identification of the contributions of performance elements represent key difficulties in this process.

Focusing one's sights on invalid dependent claims

noreply@blogger.com (David Brophy) — Tue, 21 May 2013 12:21:00 +0000

Here are the conclusions from a recent case in the Patents Court (the last two paragraphs of the judgment with some explanatory notes added by the IPKat for context).

228. As appears from my treatment of the issues above, I have concluded that Leica's challenges to the validity of the Patent fail [these challenges mainly being novelty and inventive step attacks on claim 1, as well as some sufficiency and added subject-matter issues]. I have also found that Leica's riflescopes infringe the Patent.

229. It may be that the findings that I have made demonstrate the obviousness of claim 3 of the Patent [this being a conventional dependent claim,” as claimed in claim 1 or 2”] from the IOR riflescope, but I will hear further argument on that point and also as to the consequences of my other findings, the relief to be granted, and as to costs.

The IPKat’s whiskers started to twitch reading these conclusions. His understanding is that conventionally, a dependent claim can save a patent where the independent claim lacks novelty or inventive step, but the opposite is rarely true. In other words, it is unusual for a dependent claim to be anticipated or obvious, while the independent claim basks in the warm glow of novelty and inventive step.

The judgment in which this finding was made is Swarovski-Optik v Leica Camera [2013] EWHC 1227 (Pat) and it runs to 229 paragraphs over 76 closely spaced pages. To be fair, about a third of the 76 pages are accounted for by a full translation of this German-language EP(UK) patent specification, and some lengthy quotations from the case law.

The IPKat believes this to be the first patent case to be decided by Mr Justice Vos in his capacity as a Nominated Judge of the Patents Court. It may also be his last, given his elevation to the Court of Appeal in March 2013. He is not entirely a stranger to the field of IP though, having decided a couple of trade mark and passing-off cases, notably United Air Lines Inc v United Airways Limited (discussed here), and Lady Gaga v Moshi Monsters (discussed here).

Unconventional dependent claims

Back to the IPKat’s twitchiness. One can conceive of unconventional claims which are framed to appear dependent but in fact are not, e.g.

1. A room having walls, a ceiling, and a floor, and characterised by a light bulb within the room which is powered to provide illumination.

2. A room according to claim 1, in which there is no light bulb, and illumination is provided by a transparent window in the walls, floor or ceiling.

Patent attorneys are trained not to write claims in this way, but perhaps such cases could slip through the cracks once in a while. Faced with such a claim, one would expect judicial criticism of the claim’s clarity: how can the room of claim 2 be “according to claim 1” and yet omit the light bulb which is essential to claim 1? In construing claim 2 one would probably have to notionally rewrite it as a separate independent claim, sans lightbulb. Either way, it’s unusual and would normally occupy a good deal of reasoned comment if its validity were impugned.

The claims in Swarovski

A conventional riflescope. A distant, unthreatening animal (not shown) to the left, is rendered large, nearby and threatening to the eyeball on the right. Quick! Shoot it!

Claim 3 in Swarovski v Leica is not some sort of mutant claim which deletes or replaces a feature of the independent claim. It actually looks entirely conventional. The claims were directed to riflescopes which normally have an objective lens at one end, an eyepiece lens at the other end, and in between these one finds a system of internal lenses (labelled as the field lens and movable zoom relay lens elements in the diagram above) which magnify the image and turn it the right way up. On either side of the internal lens arrangement there are two positions where the object being viewed is in focus, these positions being “image planes”.

In the invention of claim 1, paraphrasing somewhat, an additional negative lens (coloured orange in the second diagram below) was provided to improve the image seen through the eyepiece. An important question of construction of claim 1 focused on (sorry) where this new lens was positioned, relative to the image plane 10 nearest the eyepiece 5.

The claimed riflescope with the extra lens shown in orange. What mattered was the position of this lens relative to the image plane (10)

In other words, did claim 1 require the lens 10 to be on the objective side of the image plane 10 (i.e. to the left, as shown above), or could it be on the eyepiece side (right) of that plane? The broader construction would have left the claims more vulnerable to attack based on the prior art and Leica argued for that interpretation.

Construction of the claims

Claim 1 did not mention the relative positions of the lens and the image plane, but it required that the new additional lens had to be “integrated in” the system of inverting, zoom lenses, and “disposed on the end of the inverting system facing the eyepiece”. The judge held that on its proper construction, this meant that the lens had to be

“at the end of the inverting system, but still as part of it [optically, if not mechanically], some way to the objective side of [the] second intermediate image [10]”.

Claim 3 seems at first glance to do little more than confirm this interpretation in different words:

3. Telescope or sighting telescope as claimed in claim 1 or 2, characterised in that the optical beam deflecting device [i.e. the negative lens] is disposed on the side of an eyepiece-end image plane (10) of the telescopic device pointing away from the eyepiece (5).

So claim 3 says that the lens is disposed on the side of the intermediate image plane (10) which points away from the eyepiece, i.e. the objective side. Claim 1 is construed by the judge to require this lens being positioned “some way to the objective side of the second intermediate image (10)”. Surprisingly (to this Kat at least), the judge concludes that claim 3 is “an alternative to claim 1”, based on a paragraph in the description which reads:

[0017] It has proved to be of practical advantage if the optical beam deflector device 2 is disposed on the side of the inverting system 1 facing towards the eyepiece 5. It is also advantageous if it is positioned on the side of the eyepiece-end image plane 10 facing away from the eyepiece 5. [The first sentence is essentially parroting an integer of claim 1; the second sentence is parroting claim 3]

Specifically, the judge found, that “claim 3 broadly mirrors the words used in the last sentence of paragraph 17, and is, as it seems to be, envisaging a different position closer to the second intermediate image than claim 1, but not on it [the image plane] or on the eyepiece side of it.”

Even after several readings this Kat is not entirely sure he follows the construction of claim 3, but his best interpretation of the judgment is that while claim 1 requires the negative lens to be “some way” from the image plane on the objective side, claim 3 also puts the lens on the objective side, but much closer to the image plane than the “some way” inferred from the construction given to claim 1. Confused yet? The IPKat certainly is, on the grounds that the exercise of construing the claims should lead to greater clarity rather than less, and if the scope of claim 1 hinges on the meaning of “some way from”, it is difficult to see how this allows the parties to understand what the boundaries of the claim are.

The conclusion that claim 3 is an alternative to claim 1 does not get a great deal of discussion in the judgment, and certainly is not presented as a surprising or unconventional interpretation (unless the IPKat has missed some nuance of the judgment).

The IPKat suspects and indeed hopes he is missing something crucial, and will be grateful to any readers who can provide their own thoughts on the construction given to claims 1 and 3.

Prior use and "normal usage"

There is more to this judgment than just this unusual issue of construction. Another finding which caused the IPKat to pause in his tracks was found in a discussion of prior use. The prior rifle scope had a negative lens (as in the invention) which normally was located to the right of the image plane, i.e. on the eyepiece side of it, rather than on the objective side as claim 1 was held to require. Interestingly, evidence was given that in some situations, such as when focusing on a close target with high zoom, the negative lens would inevitably be located slightly to the left of the image plane (in the position of claim 3 perhaps). The judge gave little weight to the fact that the prior use could be in this configuration, because one would not normally keep the lens in that configuration for hunting, and thus “in normal usage” the lens would be on the opposite side of the image plane, and outside the scope of the claims. It was not clear from the judgment if it was alleged (or disputed) that the prior art scope had, before the priority date, in fact been placed into the anticipatory configuration, and if so, whether that could be safely ignored because it was not normal usage.

What happens next? According to the final paragraph, the judge has yet to hear the parties on the claim 3 issue, or on the form of order to be made, but the IPKat will keep readers posted. In the meantime, please do add a comment if you make it through this longish judgment and come to a firm conclusion on how claims 1 and 3 have been construed.

Quibbling over minutiae? Or has something been overlooked? Concerns over UK implementation of the UPC Agreement and Unitary Patent

noreply@blogger.com (Darren Smyth) — Mon, 20 May 2013 14:13:00 +0000

This Kat has previously posted a couple of concerns about the implications of some details of the unitary patent and the Unified Patent Court Agreement - see here and here.

Now this moggy is concerned about the UK ratification of this legislation. He has been reading the recently published Intellectual Property Bill, and now he has just seen the interesting comments from Alan Johnson posted by blogmeister Jeremy below. But this does not address a further issue that has been in the mind of this feline. It may, prods Merpel, be a small matter, but we are now at the stage where most of the large matters have been raised, and the small matters too require attention.

The Bill gives (at Clause 16) the Secretary of State power to make provisions that are needed to give effect to the UPC Agreement (subject to the safeguard that any draft order must be laid before and approved by each House of Parliament). However, there is no power in the Bill to make any order in relation to the Unitary Patent.

Nevertheless, Article 4(2) of the Regulation creating the Unitary Patent requires Member States to make arrangements to remove the national effect of a European patent once it has unitary effect. It states:

The participating Member States shall take the necessary measures to ensure that, where the unitary effect of a European patent has been registered and extends to their territory, that European patent is deemed not to have taken effect as a national patent in their territory on the date of publication of the mention of the grant in the European Patent Bulletin.

The IPKat can see no such proposed measures in the Bill. And he cannot see how the UPC and the Regulation can properly come into effect without such arrangements having been made.

"But EU Regulations have direct effect" the IPKat hears his readers cry. That may indeed be true, but surely a Regulation requiring Member States to perform an activity to then has to be followed by the Member States performing the required activity - in this case, making changes to their national law. Alternatively if the UK does not introduce any such measure, does it mean that a Unitary Patent will keep its national effect in the UK, in additional to its trans-EU-(minus a few countries)-effect?

Merpel suggests that it is possible that the Government is planning a further Bill, but it seems to the IPKat hardly likely that HMG is intending to make parliamentary time for the passing of two separate intellectual property Bills when one would clearly do. Can it be that the terms of the Regulation have not been properly considered? Or is there something that your humble servant has missed?

As usual, dear readers, at this point the IPKat turns over to you for the wisdom of the crowd.

Monday miscellany

noreply@blogger.com (Jeremy) — Mon, 20 May 2013 08:08:00 +0000

New blog on the block. The IPKat was delighted to learn from his former colleague, Katonomist Nicola Searle, that the UK's Intellectual Property Office (IPO) is today launching IPO Facto, a research blog for the IPO's economics team. Merpel always gets this feeling that economists blogging about intellectual property rights is like atheists blogging about deities, but the IPKat is sure that much interesting material will emerge from this exercise and wishes it every good fortune.

For some folk, the problem of what to wear
at garden parties is an intractable one ...

Time to come to the aid of the party. What is there to compare, in the great social whirl that characterises life in our time of recession, with the English garden party? Well, the season for garden-partying is upon us, bearing in mind the changeable nature of the local weather conditions, this is good news for manufacturers of umbrellas as well as for purveyors of sparkling wines. But even if it rains there won't be many drips among the sparkling personalities who populate the AIPPI UK annual garden party. The date: 27 June 2013, 6 to 8.30 pm, Middle Temple Gardens. "A veritable bargain at £25 per person", says Merpel, who has never been known in her entire life to pay for anything ... Details and registration here.

3 August 2013 is a big day for anyone involved in the protection of innovations in or arising from Saudi Arabia. According to a media release from the World Intellectual Property Organization, Saudi Arabia is acceding both to the Patent Law Treaty and to the Patent Cooperation Treaty (PCT) -- which now boasts no fewer than 147 cooperating states. The map on the right, explains the IPKat, shows PCT nations in dark blue and the rest of the world in pale blue. Merpel's relieved to hear this: from the chilly colours she thought it was something to do with the next Ice Age.

Around the weblogs. "The folly of crowds in contract drafting" is Mark Anderson's latest post on IP Draughts, this being "inspired by the words of Neil Wilkof, who recently posted an excellent article on the IPKat blog with the title: The IP Lawyer’s Nightmare: “But Everyone Else Does It”. Thanks Mark, the admiration's mutual! More admiration goes to the Afro-IP weblog where recent posts from new team members Caroline Ncube (here) and Isaac Rutenberg (here), together with the ever-active Kingsley Egbuonu (here), are doing so much to show how much IP means to Africa, and vice versa.

Hatching Europe's Unified Patent Court: who will pay for the chickens and eggs?

noreply@blogger.com (Jeremy) — Mon, 20 May 2013 06:58:00 +0000

Imminent patent reform "delayed". Only three months after (most of) Europe's finest attached their signatures to the Unified Patent Court (UPC) proposal, the official view on the likely start date has slipped by a year from early 2014 to early 2015, says Alan Johnson, IP partner at Bristows, whose own best-guess "not before" estimate has itself been put back a year to early 2016. According to Alan:

Unlike a cake, ratification
can't be delivered on a plate

“First, the timetable for UK ratification is now clearer, it being recalled that the UK is one of the three mandatory countries who must ratify for the UPC (and unitary patents) to come into existence. The new Intellectual Property Bill [click here for the Bill, here for the Intellectual Property Office's Bill page] contains a new section for the Patents Act which aims at starting the ratification process. The plan is that this section will enable the Secretary of State to take a power to enable the UK law to be made UPC-compliant by the passage of a Statutory Instrument (SI) implementing further (as yet undrafted) changes to the Patents Act. Then once the SI is approved by Parliament, the Foreign Office will seek separate Parliamentary approval for the UPC Treaty itself via a “command paper”. It is not likely that the SI will be approved until summer 2014, and the command paper will not be presented until April or May 2015. If one then adds four months, as required by the UPC agreement, this means an earliest start date of autumn 2015, even allowing for no slippage in current planning, and even if all other ratifications have been completed by then.

What‘s more, the April/May 2015 date for laying the command paper before Parliament is suspiciously adjacent to the time the next General Election is anticipated [the previous election being held in May 2010, both parties to the ruling coalition promising that Parliament would run for a full five-year term], and raises the question as to whether there is a connection here: will ratification in fact be stood over until the next Parliament? Does the Government (or at least one coalition partner in it) have in mind the potential for a UK in/out referendum in the next Parliament?

Ready to cleave?

There are also two, more mundane possible reasons for this leisurely timetable. The Government may have in mind the complicating effect of the Scottish independence referendum with its potential to cleave the UK [there being uncertainty as to whether Scotland would remain part of the EU or, as seems more likely, would have to apply for membership]. There is also the second Spanish legal challenge to the legality of the new regime to be decided, where the decision may be expected in early 2015. Again, is there a connection? Is the plan to await that outcome of the Scots' referendum and the Spanish challenge decision?"

But there's more to come and it's a chicken-and-egg conundrum: the UPC can’t exist until it has been ratified. Alan continues:

Life as a model for IPKat weblog
illustrations can be so embarrassing ...

“The second reason for there being more delay in the schedule is that it has become apparent that there is a chicken and egg problem with the UPC. It does not exist as a legal entity until four months after the final relevant ratification. Until then it cannot (in particular) hire judges and other staff, nor procure a computer system. But without that having been done, it cannot open for business. The result is that some other legal entity must take on these responsibilities and then effect a handover to the UPC on day one of its existence. This entity, moreover, must commit to paying judicial salaries (and pensions) and to funding the computer procurement (a process likely to take an absolute minimum of 18 months) [Merpel is sure that the Europeans will take a principled stance on this matter, since she regularly hears tales of less fortunate countries where the judges are paid by the litigants ...].

But if a legal entity is to be created, who will own and fund it? Will it be the Governments of (say) the UK, France and Germany? How can each state commit to such an undertaking until it knows that its own legislature will, in fact, ratify, still less with the uncertainty of the ratification by the other two (and a further 10 states)? Remember also that the UK has said that it will undertake an economic impact assessment before ratification. If that is required, how could the UK sensibly commit to major expenditure and liability beforehand? Germany (at least) is also likely to want to “do the sums” and be sure of the commitment of other states before getting its cheque book out.

Does this point to a lengthy period of awaiting the requisite numbers of ratifications, with one (or all) of UK, France and Germany holding back from depositing their instruments of ratification so as to ensure that the UPC does not then start automatically four months later, and these Governments only then committing to the expenditure required?”

So, looking beyond the mere reality, what does Alan see in terms of principle?

“One can sense that the degree of political commitment to the UPC project has not diminished at all in the last three months [the IPKat has seen a lot less evidence of commitment, but assumes that this is because the battle has been fought and won/lost, so that statements of political commitment have become less necessary], but one can also see that the realisation of how much there is to do, and the financial commitment this will entail, may, at a purely practical level, cause more delay than the Commission envisaged, even privately [It's curious that, a year or so ago. many warnings about how much would have to be done were seen as expressions of obstruction from industry and the professions. Now such expressions must be taken on board]. My sense is that this project will not be derailed. However, there is so much to do, and it needs to be done well - something that has not escaped the notice of those responsible in the UK at least for the practical implementation of this project. Realistically, therefore, we believe that the first half of 2016 is now the date users should have in mind as the earliest likely start date”.

The IPKat wonders how many cycles of chicken and egg production will have taken place before the UPC opens its doors to its first litigant. Merpel reminds readers that it is unwise to count one's chickens before they have been hatched.

What do readers from other jurisdictions think? Is Alan being pessimistic or realistic? Do other countries have time-table issues too? Do let us know.

Which came first? The chicken or the egg? Here
Counting chickens before they are hatched here
Ballad of the unhatched chicks here
Playing chicken here

And 12 Points go to ... Ukraine

noreply@blogger.com (Matthias Lamping) — Sun, 19 May 2013 17:33:00 +0000

Uncle Sam, under the authority of
the USTR, wants you to behave...

Despite what the title might suggest, this post is not about the European's beloved festival of kitsch, where washed-up pop acts from the 90's and overzealous casting stars gather to celebrate some form of "Europan integration". This Kat's attention is not so much attracted by the soft diplomacy of yesterday's Eurovision Song Contest [although there is something intriguing about it] but rather by the harsh rhetorics of U.S. trade policy that we witnessed earlier this month.

We know that Uncle Sam doesn't get tired of flexing his muscles; and that he has a passion for lists, particularly for black ones. One of his favourite is the yearly Special 301 Report, where all IP rough states that deny "adequate and effective protection of intellectual property” or “fair and equitable market access for U.S. firms that rely on intellectual property" are pilloried. The Report distinguishes between bad states, which are placed on a "priority watch list", and evil states, which are classified as "priority foreign countries" (PFC). In the post-TRIPS world, only three countries have experienced the honour of that status: China in 1996, Paraguay in 1998 and Ukraine from 2001 until 2005. The Ukraine has been spared for the past eight years (it has been on the watch list since then), but Uncle Sam's patience is wearing thin. In the 2013 Special 301 Report (see here), our eastern neighbours have once again been awarded with the highest distinction from Washington: a PFC classification.

According to this year's Report, the downgrading of Ukraine is the "cumulation of several years of growing concern over widespread IP theft, including the growing entrenchement of IPR infringement that is facilitated by government actors". The Report criticizes

(1) the unfair, nontransparent administration of the system governing collecting societies, which are responsible for collecting and distributing royalties to U.S. and other rights holders;
(2) the widespread and admitted use of pirated software by Ukrainian Government agencies;
(3) the persistent failure to implement an effective system to combat online piracy, including the lack of transparent and predictable provisions on intermediary liability and liability for third parties that facilitate piracy, limitations on such liability for Internet Service Providers (ISPs), and enforcement of takedown notices for infringing online content.

As a consequence of Ukraine's PFC designation, the U.S. Trade Representative has 30 days to initiate an investigation with respect to the contested acts, policies and practices (see 19 USC §2242). Possible remedies include the suspension of benefits of trade agreement concessions, the imposition of duties or other import restrictions and the suspension of the Generalized System of Preferences (GSP), which grants preferential treatment to developing countries (see 19 USC §2411).

The Special 301 Report is not just another example of the United States' devotion to rigorous IP protection, both at home and abroad. It raises a more fundamental question about the relationship between Section 301, which authorizes the U.S. Trade Representative to sanction other countries for an act, policy, or practice which either "violates, or is inconsistent with, the provisions of, or otherwise denies benefits to the United States under, any trade agreement", or, "is unjustifiable and burdens or restricts United States commerce" (see 19 USC §2411), and the autonomy of international trade law. Inspired by a recent post by Katfriend Sean Flynn, this Kat has been wondering whether such unilateralism is compatible with WTO law. According to Art. 23 of the Dispute Settlement Understanding, "Members seeking the redress of a violation of TRIPS obligations shall have recourse to, and abide by, the rules and procedures if that understanding. They shall not make a determination to the effect that a violation has occurred, except through recourse to WTO dispute settlement". Although [or perhaps precisely because, says Merpel] the complaints against Ukraine do not seem to be directly related to a violation of the TRIPS Agreement, but rather to a lack of TRIPS-plus protection, they leave a bitter aftertaste. Unilateral threats to suspend concessions or other obligations under GATT as a sanction for allegedly "inadequate and ineffective" IP protection disrupt the very stability and equilibrium which multilateral dispute resolution is meant to foster.

Whatever the merit and the outcome of the upcoming Section 301 investigation, our friends from across the pond have once again lived up to their reputation as IP colonialists. Ukraine is probably not the right candidate to step up against the world's largest economy and one of its major trading partners. But there are a few potential PFC candidates on the priority watch list that will be delighted to challenge the aggressive unilateralism in U.S. trade policy.

Friday fantasies

noreply@blogger.com (Jeremy) — Fri, 17 May 2013 13:36:00 +0000

Here's a reminder for readers who quite properly concern themselves with such trivia as whether they are giving (or taking) legal advice that comes from a reliable source. The Official Journal of the European Union has published on a number of occasions the following Notice to Readers:

Council Regulation (EU) No 216/2013 of 7 March 2013 on the electronic publication of the Official Journal of the European Union

In accordance with Council Regulation (EU) No 216/2013 of 7 March 2013 on the electronic publication of the Official Journal of the European Union (OJ L 69, 13.3.2013, p. 1), as of 1 July 2013, only the electronic edition of the Official Journal shall be considered authentic and shall have legal effect.

Where it is not possible to publish the electronic edition of the Official Journal due to
unforeseen and exceptional circumstances, the printed edition shall be authentic and shall
have legal effect in accordance with the terms and conditions set out in Article 3 of
Regulation (EU) No 216/2013.

Bangladesh: do brand owners contribute
to the problem -- and can they help to part
of the solution?

Around the weblogs. Class 46 announces that MARQUES's Rapid Response seminar on the latest EU trade mark reform proposals this coming Monday is now so popular that it's going to be webinared too. The same blog carries a request for feedback on the excellent draft paper on the unitary nature of the Community trade mark presented by Lukasz Zelechowski at the INTA Meeting in Dallas earlier this month. On the copyright-focused 1709 Blog, John Enser wonders whether the leaked news an expected outbreak of site blocking orders against internet-based copyright infringers is likely to perturb rights holders, while the ever-inspirational Ben Challis takes a look at the latest developments concerning copyright trolls in that vast and increasingly interesting jurisdiction of Canada -- and indeed further south. The fifth Brave New World post in Don McCombie's series for PatLit delves into the mechanics of some of those dull but necessary things that make patent enforcement a reality in the new Europe, such as provisional injunctive relief, freezing of assets and orders preventing the destruction of evidence. Finally, shifting from Europe to Bangladesh, Neil Wilkof treats IP Finance readers to his thoughts on what it means for brand owners to be known to have sourced their high-value products from the factory complex in which so many workers so tragically died.

This Kat is delighted to learn that his friends at Edward Elgar Publishing -- which publishes loads of intellectual property books including the Research Handbooks in Intellectual Property Series (which this Kat edits: see eg here) -- has won the 2013 award for Independent Academic, Educational and Professional Publisher of the Year at the annual industry awards hosted by the Bookseller in London this Monday. Congratulations, says this Kat, who adds that the folk from Edward Elgar are fun to deal with.

Next Wednesday, 22 May, if you are in London and have nothing better to do (and it may well be that there is nothing better to do), the Competition Law Association holds its second session on procedural rights -- a subject which should be of interest to IP experts too. The full title of the event is "Legal principles for disclosure in the antitrust context" and the speakers are Kassie Smith QC and Eddy de Smijter. The venue is the London office of Arnold & Porter UK LLP, International Financial Centre, 25 Old Broad Street [note for US readers: this street is not named after any old broad ...], London EC2N 1HQ Click here for details.

Professor Hovenkamp
in visionary mode

Spanning two sets of dates (12 to 13 and 18 to 19 June), University College London's Faculty of Law has a CPD course coming up on "Innovation, Competition Law and IP Rights". This course has been put together by UCL's Centre for Law, Economics and Society and it is taught by Professor Herbert Hovenkamp (University of Iowa). The 16 CPD points come at a price --you have to take 16 hours of tuition in order to get them. The course analyses the value of competition law in addressing a variety of practices used in innovation-intensive markets. These include the interconnection of networks, ‘duties to deal’, the licensing and distribution of IP rights (standard setting organisations and patent pools) and reverse settlements as adopted by firms active in the manufacturing and delivery of services or non-practising entities, drawing from examples in both EU and US law. You can get further details and register here. Best of all, if you quote your VIP Katcode of ipkat2013hovenkamp, you can enjoy a full 10% discount off of the standard ticket price.

If the judges are like this, what
must the enforcers be like?

~~Tipple~~ Dine with TIPLO? The Intellectual Property Lawyers Organisation (TIPLO) is hosting its next dinner on Tuesday 6 June. The subject? "The Enforcement Directive comes of age, its effect on IP remedies including: Damages after Boehringer II and Hollister, Final injunctive relief, Punitive damages, Blocking injunctions and Publicity orders after Apple v Samsung". This promises to be a seriously internationally event, since there will be a discussion of the English and Scottish experience led by Mr Justice Birss and Lord Glennie. Lord Justice Floyd is chairing the event, no doubt to add a touch of sobriety to the proceedings. Further particulars and registration here.

"What's in it for us?"

As if this wasn't enough, the lions and the lambs -- or at any rate their biped equivalents -- are lying down together. The UK's Chartered Institute of Patent Attorneys (CIPA) and the Institute of Trade Mark Attorneys (ITMA) are commendably holding a joint seminar on "The 2013 Intellectual Property Bill -- What's in it for us [how lovely, says Merpel, to hear that question, so often camouflaged with euphemisms, actually asked directly!] and our clients?" This is actually an extremely cogent and relevant half-dayer, manned and womanned by a strong team of practitioners drawn from not only the lions and the lambs but also from the ranks of the solicitors. It would be a shame to miss it even though 7 June does look suspiciously like a Friday afternoon. Click here for information, inspiration and registration.

Framing of videos: Court of Justice to rule

noreply@blogger.com (Jeremy) — Fri, 17 May 2013 12:01:00 +0000

Merpel sniffs the water for
signs of pollution*

Yesterday the First Civil Senate of the German Bundesgerichtshof (BGH) -- one of the most active and influential national intellectual property courts you can ever hope to find in the new Europe -- referred a question regarding the framing of video content to the Court of Justice of the European Union. What the BGH wants to know is this: does the operator of a website who integrates copyright-protected third party video content, which is publicly available via another website, into his own website by way of so-called framing, infringe copyright of that content in the sense of Article 3(1) of the InfoSoc Directive?

What happened in this case was that the plaintiff in the national proceedings, who made and sold water filtration system, created a promotional video ("The Reality") on the topic of water pollution and owned the copyright in the video. This video was also available on YouTube, without the applicant’s consent. The two defendants, independent sales representatives of a competitor, each ran websites on which they advertised their products. In summer 2010, they let visitors to their websites retrieve the plaintiff's video by framing it: consumers could click on to a link that retrieved the video in question, which was then played from YouTube.

The plaintiff considers that the defendants made its video publicly available in the sense of Article 19a of the German Copyright Act and, alleging infringement, demanded damages. The trial court agreed and ordered the defendants to pay damages of €1,000), but this decision was reversed on appeal. The plaintiff then appealed to the BGH, seeking restoration of the trial court's judgment.

According to the BGH's press release, the BGH states that the appellate court had correctly assumed that the mere linking of content available on a third part website by way of framing is not a “making publicly accessible” within the meaning of Article 19a of the German Copyright Act, since it is the owner the third party website who decides whether the content remains accessible to the public. However, the BGH wondered whether this type of framing could fall under Article 3(1) of the InfoSoc Directive and therefore also under Article 15(2) of the German Copyright Act (which provides for an “unnamed exploitation right"), which must itself be interpreted and applied in the light of Article 3(1) of the Copyright Directive. The BGH therefore asks the CJEU whether this type of framing is a “making available to the public” in the sense of Article 3(1) of the InfoSoc Directive which states:

“Right of communication to the public of works and right of making available to the public other subject-matter:

1. Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them”.

Decision of 16 May 2013 - reference I ZR 46/12

Further reading: here

* Photo by Magnus Manske

The IP Lawyer's Nightmare: "But Everyone Else Does It"

noreply@blogger.com (Neil Wilkof) — Fri, 17 May 2013 11:13:00 +0000

This blog is about one of the most dreaded moments in the life of any IP attorney. You have been asked by your client whether it can take some action, such as use of certain content taken from the internet or adoption of a trade mark "based" on the mark of another person. You review the situation and advise the client that it would be better if it demurred from making use of those contents or adopting that mark. Then comes the client's retort—"But everyone else does it." The mettle of an IP lawyer is often measured by your response to that comment.

Before we weigh up a possible reply, however, let's consider a bit of cultural background. One of the most widely-used slogans of the past decade is "the wisdom of the crowd". While there is inherently nothing new about the concept per se, what is interesting is the apparent change of perception in the role of the broader collective as a source of knowledge, if not confirmation and validation of such knowledge. This Kat remembers preparing for his State of Ohio bar examination over 30 years ago. Before entering into the exam room, we were told by those who sought to prepare us—"Don't discuss the questions with your fellow examinees during the break. It will only depress you. After all, you collectively are always smarter than you are individually." Yes, the crowd might be a source of wisdom, but that wisdom was not necessarily benign.

Indeed, we were all supposed to be a little like Will Kane, standing out there on our own, firm in our principles. Will Kane was the iconic character played by Gary Cooper in the classic 1952 movie, "High Noon", here here. Marshall Kane is ultimately forced to stand up alone in the middle of dusty town in the American Wild West against ex-con Frank Miller and his murderous henchmen. Kane prevails (with a little help from his new bride, played by Grace Kelly) and the message that "High Noon" sent to generations of viewers was clear. When the chips are down, and the issue at hand is about what really matters, you can only rely on yourself. The crowd is transient, unreliable and fickle—as for wisdom, you have to look elsewhere.

Things have certainly changed. "But everyone else does it" is now a form of prima facie validation, designed to enable the client to obtain the result that it prefers, even at the price of challenging, if not undermining, the authority of one's IP counsel (not that this Kat is suggesting that any of his clients is akin to Frank Miller). The ubiquity of digital content makes it easy to determine what information is out there and, e.g., to identify quickly any number of examples of competing websites that contain similarly accessed contents or make use of seemingly confusingly similar marks. Faced with such factual examples taken from the collective, what is the IP lawyer to say in response? After all, weren't we trained to respect facts and fashion our conclusions accordingly (as attributed to John Maynard Keynes, "When my information changes, I alter my conclusions. What do you do, sir?" ).

So what will it be for the IP attorney, a change of view in light of the wisdom of the crowd, or a resolute stand of his position, as in the case of Will Kane? Indeed, this Kat wonders how many of us have altered, if even slightly, our legal advice, having been confronted with the wisdom of the crowd. Do we reply by saying that "I agree that the legal issue may not be totally black and white, but my view remains unchanged"? Or do we rely on the dynamics of the fait accompli—"Whatever the ultimate legal right and wrong here, you have already made the decision and you can at least enjoy the legal certainty that goes with it"? Or do we fall back on the unique factual circumstances of each instance—"I don't know about the facts in these other cases"? Or do we emphasize risk analysis—"The fact that 'they' are also doing it does not make it all right, but it only shows that the rights-holder cannot go after everyone. It's your call." Whatever the response, you can then only pray that the client does not threaten to take the matter up with the senior attorney.

No doubt the wisdom of the crowd in the digital age has yielded some palpable benefits, such as crowd-funding sources of the ilk of Kickstarter, here. But enabling one's client to challenge one's legal IP advice by claiming that "everyone does it" is not one of them.

More on "The Wisdom of Crowds" here.

Carry-on over Cariou: when works are transformative 'as a matter of law'

noreply@blogger.com (Jeremy) — Fri, 17 May 2013 08:37:00 +0000

In a world of fluctuating intellectual property law, we are used to seeing trends of judicial thought drifting first in one direction and then in another, as courts struggle to maintain the balance between rights owners and their competitors and between the rights of consumers and individuals and the rights and expectations of businesses. But there may be few more fascinating, and regularly shifting, areas of judicial juggling than that of the application of the doctrine of fair use under United States copyright law. In the piece that the IPKat publishes below, Katfriend and guest blogger Philippa Malas takes a look at a recent US decision in which the dynamics of the see-saw between user liability and user entitlement are clear for all to see: the ruling in Cariou v Prince. As Philippa explains:

Mr Jones by Cariou ...

Late last month, the US Court of Appeals for the Second Circuit handed down judgment in Cariou v Prince. As some readers may be aware [particularly if they spotted Iona's post on the 1709 Blog, here], the photographer Patrick Cariou brought an action for summary judgment against artist Richard Prince for copyright infringement in 2008 (Cariou v Prince, 784 F. Supp. 2d 337, 349 (S.D.N.Y. 2011)). The original proceedings found in Cariou´s favour. Permanent injunctive relief was granted and the defendants were ordered to “deliver up for impounding, destruction, or other disposition, as [Cariou] determines, all infringing copies of the Photographs, including the Paintings”. The injunction covered sold and unsold pieces from Prince´s Canal Zone series in the defendants´ possession. On appeal, Prince and co-appellant the Gagosian Gallery (and its proprietor Larry Gagosian) argued that the District Court used the wrong legal standard when it held that the fair use defence was not available because Prince´s work did not “comment on, relate to the historical context of, or critically refer back to the original works”. A number of parties acted as amici curiae (including the Andy Warhol Foundation, the Whitney Museum of American Art, the Guggenheim, and the American Society of Media Photographers) and the issues raised are likely to be of interest to those working in the visual arts.

... and as he is treated by Prince

Patrick Cariou published a collection of photographic works called Yes Rasta in 2000. The photographs were products of a six-year period Cariou spent living with Rastafarian communities in Jamaica. 7,000 copies of Yes Rasta books were printed with sales at just over $8,000. Prince´s Canal Zone series was exhibited during 2007 and 2008, including a high profile exhibition at New York´s Gagosian Gallery. The first piece, Canal Zone (2007), consisted of photographs torn out of Yes Rasta, attached to a plywood board, which Prince then painted over. Prince obtained further copies of Yes Rasta and the resulting series Canal Zone numbered thirty-one works, with the majority incorporating images from Cariou´s book. By 2010, sales of works from Canal Zone totalled more than $10 million.

Under the US Copyright Act of 1976, 17 U.S.C. § 107, four criteria must be satisfied in order for a court to uphold fair use:

´[T]he fair use of a copyrighted work […] for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for non profit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copy-righted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copy-righted work.´

The Appeals Court began by reminding that the US defence (broader than UK fair dealing) required ´open ended and context sensitive inquiry’. After considering how Cariou’s work had been used (the first statutory element) and therefore, whether it was ´transformative´, the court concluded that ´[t]he law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary may constitute fair use even if it serves some purpose other than those […] identified in the preamble to the statute.´ In the opinion of the majority of the Appeals Court, the District Court was also wrong to place too much emphasis on Prince´s deposition testimony in which he said that he did not have any interest in Cariou´s original intent. Instead, ´what is critical is how the work in question appears to the reasonable observer’ (following Campbell v Acuff-Rose Music, Inc., 510 U.S. 569 (1994) and Leibovitz v Paramount Pictures Corp., 137 F.3d 109, 113-14 (2d Cir 1998). It was held that twenty-five out of the works ´were transformative as a matter of law´.

A notable part of the judgment was the reasoning of why the works were transformative: Prince ´presented images with a fundamentally different aesthetic´. The majority observed that side-by-side, Prince’s images gave Cariou’s photographs a ‘new expression, and employ new aesthetics with creative and communicative results’ and were therefore transformative. The extent to which legal scrutiny borders on factual and artistic interpretation is certainly an interesting feature of the appeal judgment. Judge Wallace was troubled by the degree to which his colleagues embraced an artistic commentary. In his dissenting opinion, he noted that ‘after correcting an erroneous legal standard employed by the district court, we would remand for reconsideration’. He also dismissed the majority’s application of Brownmark Films v Comedy Partners, 682 F.3d 687 (7^th Cir.2012) that ‘transformative’ could be determined on a side-by-side analysis of the artworks and argued that the court’s inquiry should not be limited to ‘our own artistic perceptions of the original and secondary works’.

Judge Wallace might have a point. The court only applied the defence to twenty-five out of the thirty works and surmised that Prince’s works ´sufficiently differ from the photographs of Cariou´s that they incorporate for us to confidently make a determination about their transformative nature as a matter of law´. Reader note: ‘as a matter of law’. However, in relation to five of Prince’s creations, the majority found that ´although the minimal alterations that Prince made […] moved the work in a different direction from Cariou´s classical portraiture and landscape photos, we can not say with certainty at this point whether those artworks present a “new expression, or message”’ (as in Campbell). Wallace J noted: ‘…while I admit freely that I am not an art critic or expert, I fail to see how the majority in its appeallate role can “confidently” draw a distinction between the twenty-five works that it has identified as constituting fair use and the five that do not’. In his mind, the entire case (all thirty works) should have been remanded for further proceedings in the district court after the point of law had been clarified.

Some argue that the case does not offer much on how ‘transformative’ should be assessed in the future. It was said in Mattel, Inc. v Walking Mountain Productions, 353 F.3d 792, 802, n. 7 (9th Cir.2003), that the court does “not make judgments about what objects an artist should choose for their art.” The decision in Prince avoided creating a rule that any cosmetic change to a photograph would constitute fair use. Is not transformative surely better judged on a case-by-case basis? Yet a few days after Prince was handed down, the difficulties of the area reappeared when the Los Angeles District Court concluded that Thierry Guetta had infringed Dennis Morris’s copyright by painting a copy of Morris’s photograph of Sid Vicious on to a wall. Whether this discrepancy was created in light of the original finding in Prince is yet to be seen and, while both cases fall within the US jurisdiction, the art market is an international market and such cases could have implications for European artists transacting in the US.

The IPKat, who can't help feeling just as puzzled after the Court of Appeals' decision as he was before it, hopes that the substantial publicity generated by this litigation will have generated sufficient further sales of Cariou's and Prince's works to cover the cost of their legal fees.

Merpel wonders whether the judiciary are any better equipped by their qualifications to rule on matters of applied aesthetics of this nature than artists are able, by virtue of their skill and training, to rule on matters of law.

From Alice to Apple: patentable subject matter crosses the Atlantic

noreply@blogger.com (Jeremy) — Wed, 15 May 2013 17:47:00 +0000

The theme of patentable subject matter, as laid down by statute and as interpreted by the courts, was the subject of a careful and detailed analysis by Professor Norman Siebrasse in his guest post yesterday on CLS v Alice. By way of contrast with the treatment of this issue in the United States, Norman takes a look at a very recent decision of the Court of Appeal for England and Wales in HTC Europe Co Ltd v Apple Inc [2013] EWCA Civ 451 (Kitchin, Richards and Lewison LLJ var’g [2012] EWHC 1789 (Pat) Floyd J). Writes Norman:

In yesterday’s post I suggested that US case law relating to patentable subject matter is chaotic because the USSC has attempted to create field-specific exclusions to patentability using the rule against abstract claims. The only way out is legislative amendment. But not any legislation will do, as is demonstrated by EPC Art 52, which prohibits patenting of “discoveries, scientific theories and mathematical methods. . .methods for doing business, and programs for computers,” but only when claimed “as such.” The “as such” caveat implies that if the invention is claimed as a practical application in a computer system, it is patentable; but if that is so, it means that computer programs are effectively patentable, and the exclusion is rendered meaningless. Thus, Art 52 legislatively enacts the same judicially created contradiction that is responsible for the morass of US law. Unsurprisingly, UK law is doctrinally equally confused. However, the English judiciary appear to be less ideologically divided among themselves and, if the law is still lacking in doctrinal clarity, some practical regularity appears to be emerging. In particular, it seems from the recent decision of the Court of Appeal for England and Wales (EWCA) in HTC v Apple [2013] EWCA Civ 451 that computer programs will generally be patentable. In contrast, from earlier decisions, in particular Aerotel / Macrossan [2006] EWCA Civ 1371, it seems that business methods will generally not be patentable.

Making a technical contribution?
a computer that thinks like a cat ...

European law has attempted to resolve the contradiction in Art 52 by an appeal to the question of whether the invention has made a “technical contribution” to the art [44]. As Lewison LJ laments in his concurrence at in HTC v Apple at [143] “[i]nstead of arguing about what the legislation means, we argue about what the gloss means.” And as Kitchin LJ forthrightly acknowledges in the lead opinion, “it is not possible to define a clear rule to determine whether or not a program is excluded” [45]. While there are a variety of signposts identified by Kitchin LJ, two in particular point to a fairly generous approach to software patents. One is that a technical contribution may lie in the solution to a technical problem “whether that problem lies inside or outside the computer” [49]. A second point, newly affirmed at the EWCA level in HTC v Apple, is that a program is likely to be patentable if it “makes a computer a better computer in the sense of running more efficiently and effectively as a computer” [51]. Together, these guideposts suggest that almost any invention that can surmount the inventive step and utility hurdles will be patentable subject-matter.

On the facts of the case, the question of subject matter was raised in respect of patent 2 098 948, in which the inventive concept is to use a flag in the operating system of a touch-sensitive device, such as a smart phone, to allow the touchscreen to ignore or accept multiple touches, thus sending a simplified signal to an application which did not use multiple touches. The main advantage of this invention is to make it much simpler to write applications for an operating system that embodies the invention [53]. The invention is to be implemented in software. The representative claim 1 was drafted in general terms: “A method for handling touch events at a multi-touch device, comprising: displaying. . . executing. . . associating. . . ” [31]. This claim was held to be invalid by Floyd J at first instance as being directed to a computer program as such [Pat 99]. The EWCA reversed on this point, saying the problem of how to deal with multiple touches is essentially technical [56], and it is of practical benefit in providing an improved interface for application programmers [58].

HTC v Apple is not formally inconsistent with Fujitsu Ltd's Application [1997] RPC 608 (CA) and Gale’s Application [1991] RPC 305 (CA), but those cases might very well be decided differently today. For example, Gale’s Application claimed an improved method for calculating square roots, to be implemented in ROM. In holding this to unpatentable, Nicholls LJ stated at 327 that “his program makes a more efficient use of a computer's resources. A computer, including a pocket calculator with a square root function, will be a better computer when programmed with Mr. Gale's instructions. So it may. But the instructions do not embody a technical process which exists outside the computer.” The latter point is now irrelevant, and the former point is now an important guidepost in favour of patentability.

The EWCA decision in HTC v Apple provides an instructive contrast with the US Federal Circuit decision in CLS Bank. “Device” in the ‘948 claim presumably ties it to a physical device, but it is nonetheless at least as general as the system claim at issue in CLS Bank, which was held invalid by five members of the panel. Moreover, in HTC v Apple neither level of court made much of the restriction to a “device.” As in Lourie J’s decision, the focus was on the substance of the invention concept, but while Lourie focused on whether that substance was abstract, the EWCA focused on whether it was a technical contribution. This is a fundamental difference, and the approach of the EWCA, as well as being more logical (in my view), is also more favourable to patentability of software. Thus the tides have turned. The US Federal Circuit has long extended the boundaries of patentable subject matter, but now it is retreating, while the English courts were initially more cautious, but have gradually developed the case law to a more accommodating stance.

The IPKat gets Spicy - more detail on the Indian Supreme Court Glivec Decision

noreply@blogger.com (Darren Smyth) — Wed, 15 May 2013 10:35:00 +0000

This Kat was delighted to be contacted by Katfriend Prashant Reddy of the most excellent Spicy IP blog (the place to go for masterful analysis of Indian IP matters) following his earlier post here, which rather criticised the novelty analysis of the Indian Supreme Court decision denying the patentability of the beta crystalline form of imatinib mesylate (Glivec). Prashant kindly invited this moggy to contribute a guest piece to the blog. This Kat found it very useful to revisit the issue, and address aspects of the issues that the first post did not cover. Readers who were interested in the first post (and even those who were not) may care to visit the Spicy IP blog and read it here. Both Merpel and Prashant look forward to your comments.

Readers will note that Prashant is inviting further guest posts on the topic, so aspirant bloggers (or established bloggers wishing to expand their horizons) take heed!

UPDATE Sunday 19 May 2013:

Spicy IP published a reply to my piece by Siva Thambisetty and then invited a rejoinder from me. Here is my rejoinder.

My original IPKat post, and the first Spicy IP blog post, also have a large number of comments (and some replies by me) if you are interested to follow the debate.

Bowman v Monsanto: the US Supreme Court rules on patent exhaustion and replication of patented seeds

noreply@blogger.com (Stefano Barazza) — Tue, 14 May 2013 21:09:00 +0000

Yesterday, the Supreme Court of the United States delivered its long-awaited judgment in the case of Bowman v Monsanto Co. et Al., unanimously ruling that 'patent exhaustion does not permit a farmer to reproduce patented seeds through planting and harvesting without the patent holder's permission'. The Court affirmed the decision rendered by the Court of Appeals for the Federal Circuit (which the AmeriKat analysed in detail here), observing that, if purchasers were allowed to replicate the invention, there would be a 'mismatch between invention and reward' and the patent would afford little protection to the inventor. Nonetheless, the judges warned that the doctrine of patent exhaustion might apply differently in relation to other self-replicating products. What follows is a recap of the facts of the case and the Supreme Court's decision.

Monsanto invented and patented (US Patent Nos. 5,352,605 and RE39,247E) 'Roundup Ready' soybean seeds, genetically engineered to survive exposure to N-phosophonomethylglycine (glyphosate) - based herbicides, including Monsanto’s Roundup® herbicide. Monsanto, directly or through licensed producers, sells the seeds to growers, under a special licensing agreement ('Monsanto Technology Agreement') which allows them to consume the resulting crop or sell it to local grain elevators or agricultural processors as a commodity. The agreement, however, allows growers to plant the seeds in one (and only one) season and prohibits the use of crop or second-generation seeds for replanting, or their sale to a third party for that purpose. 'These restrictions', explains the Supreme Court, 'reflect the ease of producing new generations of Roundup Ready seed', as the harvested soybeans inherit the glyphosate resistance embedded in the seeds' genetic material, a characteristic which would make it possible for growers to produce their own Roundup Ready seeds.

Vernon Hugh Bowman, a farmer from Indiana, purchased Roundup Ready seeds for several years, using them for his first crop of the season, in accordance with the licensing agreement. For the second crop of the season, instead, he purchased commodity soybeans, intended for human or animal consumption, from a grain elevator, and planted them in his fields, in order to avoid paying the premium price of Monsanto's seeds for a crop that the farmer considered 'riskier'. Bowman admittedly anticipated that, since most of the local farmers also used Roundup Ready seeds, many of the purchased soybeans would be second-generation, glyphosate-resistant, seeds, containing Monsanto’s patented technology. Bowman saved seeds from that crop to use them in the following year's late-season planting, and did so for eight consecutive years. Monsanto, after investigating the farmer's planting activities and confirming that the second-generation seeds contained the patented technology, sued Bowman for patent infringement. The farmer argued that, since Monsanto's agreement authorised local farmers to sell their crops to the grain elevator, from which he bought the seeds, he was protected by the doctrine of patent exhaustion. The Southern District of Indiana rejected the argument, and awarded damages of $84,456 to Monsanto. The Federal Circuit affirmed the judgment, observing that, even if Monsanto's patent rights in the commodity seeds are exhausted, 'once a grower, like Bowman, plants the commodity seeds containing Monsanto’s Roundup Ready technology and the next generation of seed develops, the grower has created a newly infringing article'. The patentee, in the Federal Circuit's view, retained the exclusive right to make the article. Citing Monsanto Co. v Scruggs et Al., the court held that the purchaser of a patented technologies which can replicate itself is not authorised to use replicated copies of it, as this practice 'would eviscerate the rights of the patent holder'.

The Supreme Court noted that, under the doctrine of patent exhaustion, 'the initial authorised sale of a patented item terminates all patent rights to that item' (Quanta Computer Inc. v LG Electronics Inc.): the rationale behind this rule is that, once a patentee has received his reward through the sale of the patented item, he has no further right to restrain the use or enjoyment of it (United States v Univis Lens Co.). However, the doctrine only applies to the 'particular article' sold and does not interfere with the patentee's exclusive right to use and manufacture the invention in relation to other items. In other words, the right to make new copies of the patented items remains with the patentee, as 'the patent holder has "received his reward" only for the actual article sold, and not for subsequent recreations of it'. Applying this principle, the Court found that:

Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased from the grain elevator; so too he could consume the beans himself or feed them to his animals. Monsanto, although the patent holder, would have no business interfering in those uses of Roundup Ready beans. But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto’s permission (either express or implied). And that is precisely what Bowman did. He took the soybeans he purchased home; planted them in his fields at the time he thought best; applied glyphosate to kill weeds (as well as any soy plants lacking the Roundup Ready trait); and finally harvested more (many more) beans than he started with. That is how “to ‘make’ a new product,” to use Bowman’s words, when the original product is a seed... Because Bowman thus reproduced Monsanto’s patented invention, the exhaustion doctrine does not protect him.

If purchasers of the patented technology were allowed to replicate it, 'Monsanto's patent would

The IPKat would gladly replicate them...

provide scant benefit', as other companies could soon reproduce the product and market it to growers. Moreover, the farmers themselves could, after buying an initial round of seeds, multiply them and use later generation seeds in their fields, 'each time profiting from the patented seed without compensating its inventor'. This would create, in the Court's view, a mismatch between invention and reward.

The decision also follows the Supreme Court's teaching in J. E. M. Ag Supply Inc. v Pioneer Hi-Bred Int’l Inc., where the judges examined the relationship between the Plant Variety Protection Act and the Patent Act, establishing that inventors should be rewarded with a patent and explaining that only a patent holder could prevent purchasers of a protected seed from saving harvested seeds for replanting. Reasoning a contrario, the Court observed that, '[i]f a sale cut off the right to control a patented seed’s progeny, then (contrary to J. E. M.) the patentee could not prevent the buyer from saving harvested seed'. Thus, applying the patent exhaustion doctrine in the manner suggested by the petitioner would have contradicted the Supreme Court's earlier decision.

Although Bowman argued that seeds are meant to be planted and, therefore, that he merely used them 'in the normal way farmers do', the Court thought otherwise. It recognised that reproducing an article implies using it, but highlighted that reproduction falls, as held in previous case law (Cotton-Tie Co. v Simmons), beyond the boundaries of the exhaustion doctrine:

That is because, once again, if simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction. And that would result in less incentive for innovation than Congress wanted. Hence our repeated insistence that exhaustion applies only to the particular item sold, and not to reproductions.

The Supreme Court noted that its interpretation of the patent exhaustion doctrine allows farmers to benefit from Roundup Ready, by planting, harvesting and consuming or selling the soybeans for consumption, while rewarding Monsanto for its innovation. This non-replicating use of the seeds, added the Court, was standard fare among farmers, as admitted by Bowman, who conceded that the beans sold by the grain elevator were intended for consumption, and that he knew of no other farmers who planted second-generation seeds bought from the grain elevator. Further, the judges criticised Bowman's 'blame-the-bean' defense, which argued that soybeans naturally self-replicate 'unless stored in a controlled manner', stating that the farmer 'was not a passive observer of his soybeans’ multiplication; or put another way, the seeds he purchased (miraculous though they might be in other respects) did not spontaneously create eight successive soybean crops'. It was Bowman, therefore, who controlled the reproduction, for eight consecutive generations, of the seeds protected by Monsanto's patents.

A cautious approach, perhaps sensitive to the concern expressed by some commentators, was exhibited towards the applicability of the exhaustion doctrine in relation to other self-replicating products. In concluding that, in the case in hand, patent exhaustion provided 'no haven' for Bowman's conduct, the Supreme Court added:

We recognize that [inventions related to self-replicating products] are becoming ever more prevalent, complex, and diverse. In another case, the article’s self-replication might occur outside the purchaser’s control. Or it might be a necessary but incidental step in using the item for another purpose. Cf. 17 U. S. C. §117(a)(1) (“[I]t is not [a copyright] infringement for the owner of a copy of a computer program to make . . . another copy or adaptation of that computer program provide[d] that such a new copy or adaptation is created as an essential step in the utilization of the computer program”). We need not address here whether or how the doctrine of patent exhaustion would apply in such circumstances.

This closing statement addresses some of the criticism voiced against the Federal Circuit's decision. In an interesting paper entitled 'Self Replicating Technologies', Professor J. Sheff highlighted that 'not all self-replicating technologies are identical, and a categorical rule exempting them from exhaustion doctrine is unwarranted'. Although the Supreme Court did not go as far as identifying a criterium for modulating the patent exhaustion doctrine, as suggested in the paper (according to which, 'the application of the exhaustion doctrine should depend on the patentee’s ability to charge supracompetitive prices in its primary market where consumers are able to substitute secondary-market embodiments'), its final clarification appears to be a step in the right direction. Further, this Kat believes that focusing on the 'mismatch between innovation and reward' is a wise, yet frequently neglected, perspective to assess any patent case. When the reward is too low, as would be the case if the patent exhaustion doctrine applied in this case (and in many other situations, including unpatentable drugs and dormant therapies, as suggested by a well-educated reader - the IPKat plans on writing about this soon), courts and legislators are challenged with the task of strengthening protection; when the reward becomes too high, it is usually competition law that steps in. It seems, however, that investing in innovation might yield even greater benefits, for innovators, than legal battles: back in 2010, Neil highlighted that Monsanto was already 'refocus[ing] its strategic focus with respect to its patent portfolio from the first generation of bio-engineered seeds, which are close to expiration, in favor of promoting new versions of gene-modified products', letting its current patents 'expire without a fight'.

Wake up and smell the coffee: Arnold J gets real with consumables and indirect patent infringement

noreply@blogger.com (Annsley Merelle Ward) — Tue, 14 May 2013 14:55:00 +0000

What happens when coffee and Kats
combine - something too cute to drink

The AmeriKat loves many things. Fresh lemonade. Kittens' paw pads. Summer thunderstorms. Napping. And Section 60(2) of the Patents Act 1977. It's true. There is something about the indirect infringement provisions, the scope of which is always up for debate between feuding parties and evidence in support somewhat ethereal, that makes the AmeriKat giddy with excitement. So when a decision about her beloved provision scurried into her inbox a few weeks ago, the AmeriKat rubbed her paws together. But, as always, more pressing matters got in the way. It was only this weekend she managed to get her whiskers immersed into Mr Justice Arnold's decision in Nestec v Dualit (see earlier post by Kat colleague Darren on this decision).

The case involved the famous Nestec Nespresso machines and specifically the coffee cartridges/capsules that are inserted into the machines to make that cup of legally addictive stimulants beloved by lawyers everywhere. Nestec is the owner of European Patent 2,103,236 which relates of a system comprising of a capsule extraction device which simply and inexpensively facilitates the insertion and the positioning of the capsule in the device. Nestec alleged that Dualit infringed its patent by supplying coffee capsules compatible with the Nespresso machines. As summarized by Darren, Arnold J held that none of the Nestec's claims were entitled to priority and as a result all the claims were anticipated by virtue of various prior art. " All well and good", says the Merpel, "but let's get to the meat that is the infringement claim."

Nestec argued that Dualit infringed its patents pursuant to section 60(2). Section 60(2, which is meant to have the same effect as Articles 26 of the Community Patent Convention, reads as follows:

(2) Subject to the following provisions of this section, a person (other than the proprietor of the patent) also infringes a patent for an invention if, while the patent is in force and without the consent of the proprietor, he supplies or offers to supply in the United Kingdom a person other than a licensee or other person entitled to work the invention with any of the means, relating to an essential element of the invention, for putting the invention into effect when he knows, or it is obvious to a reasonable person in the circumstances, that those means are suitable for putting, and are intended to put, the invention into effect in the United Kingdom.

(3) Subsection (2) above shall not apply to the supply or offer of a staple commercial product unless the supply or the offer is made for the purpose of inducing the person supplied or, as the case may be, the person to whom the offer is made to do an act which constitutes an infringement of the patent by virtue of subsection (1) above.

For more information of the historical origins of section 60(2), see a beast of a judgment from Jacob LJ in Grimme Landmaschinefabrik BmbH v Scott [2010] EWCA Civ 1110.

There were four meaty issues for Arnold J to tackle. These were:

The means relating to the essential
element of the invention

1. Was a consumer of the Nespresso machine a "person other than a licensee"?

Dualit argued that the answer to that question was obviously "no", because the owner of the Nespresso machine was impliedly licensed to use the machine in any way he or she pleased, including using it with compatible capsules. Nestec do not impose any legal restrictions on purchasers of Nespresso machines. Because there was no restrictions on the use of the Nespresso machines, Counsel for Dualit cited the much-quoted speech of Lord Hoffman in United Wire [2001] where he stated that "a person who has acquired the product with the consent of the patentee may use or dispose of it in any way he pleases…". The user can do so by virtue of an implied licence (Betts v Willmot (1871)) or, in European patent systems, by the principle of exhaustion of rights after the first sale of the product. "The difference in the two theories", held Lord Hoffmann, " is that an implied licence may be excluded by express contrary agreement or made subject to conditions while the exhaustion doctrine leaves no patent rights to be enforced."

In the seamless logic often exhibited by Arnold J, the judge held that the purpose of the Nespresso machine is to make coffee.

"[T]o use the machine for this purpose, the purchaser must insert capsules into the machine. It follows, that the purchaser must be impliedly licensed to obtain and use capsules within the machine. Otherwise, it would be useless. In the absence of any restriction upon the purchaser preventing him from obtaining capsules from third parties, the purchaser is entitled to do so."

This position would make no difference even if as a result of the drafting of the claim, the purchaser of the machine makes a system falling within claim 1 as soon as he acquires a capsules.

"What matters is the substance of the invention, rather than the precise form of the claims. In the present case, the substance of the patented invention concerns the design of the machine. The specification of the Patent makes it clear that the invention does not lie in the design of the capsule. On the contrary, the specification proceeds on the basis that the capsule is of a pre-existing design. Indeed the invention does not even depend upon the design of the capsule, save to the limited extend that claim 1 requires the capsule to have a guide edge in the form of a flange." You know, the flange…

The judge added that analyzing the position in terms of exhaustion of rights makes the position even clearer:

" By consenting to the manufacture and sale of Nespresso machines, Nestec have exhausted their rights under the Patent to restrict purchasers' freedom to use such machines in accordance with their normal function. Their normal function is to make coffee form capsules. Accordingly, Nestec have exhausted their right to rely upon the patent to control the source from which purchasers acquire such capsules."

2. Did the Dualit capsules constitute a "means relating to an essential element of the invention"?

The means relating
to the essential element
of the Nestec decision

With no English authority directly on point, Mr Justice Arnold did what any European patent judge does nowadays and referred to decisions of courts of European countries that implemented Article 26 CPC, namely Germany and the Netherlands. The judge helpfully summarized some absolutely impenetrable dicta from the German Federal Court of Justice in Impeller Flow Meter [Case X ZR 48/03] and Pipette System (Case X ZR 38/06). These cases held that the means in question must contribute to implementing the technical teaching of the invention. The means, however, does not have to be novel in its own right. That is to say, the "fact that the element was known in the prior art did not prevent it being an essential element of the claim", but if "a feature was of completely subordinate importance for the technical teaching of the invention it could be regarded as a non-essential element."

Unfortunately, the Dutch Supreme Court came to the opposite conclusion and held in Sara Lee v Integro (Case C02/227HR) that an essential element must be one which distinguished the invention from the prior art. However, Arnold J held that the German approach was "more consonant" with the purposes of Article 26(1) of the CPC which was that third parties should not be allowed to benefit form the invention by supplying the means the market for which has been created by the invention.

It followed that the Dualit capsule does constitute a means relating to the essential element of claim 1 of the Patent because it (i) does contribute to the implementation of the technical teaching of the invention and (ii) is not of completely subordinate importance.

"Although the invention takes the capsule as a given, and claim 1 only requires the capsule to have a guide edge in the form of a flange, the flange of the capsule plays a significant role in the way in which the claimed invention works."

3. Are the Dualit capsules staple commercial products?

The only European authority on "staple commercial products" cited was a Patents County Court decision in Pavel v Sony Corporation where HHJ Ford stated that a "staple commercial product is a commodity or raw material". The judge held that for a product to be a staple commercial product it must be "ordinarily one which is supplied commercially for a variety of uses". The Dualit capsules were designed for no other repurpose but to use in the Nespresso machines. They were therefore not staple commercial products.

4. Are the Dualit capsules "means suitable for putting the invention into effect"?

The means related to the essential
element of the AmeriKat's naps

The final issue was whether a person who puts a Dualit capsule into the relevant Nespresso machine "makes" a system falling within claim 1 of the Patent. After summarizing the law set out in the Supreme Court decisions in United Wire and Shutz v Werit, Arnold J applied the multi-factoral approach recently laid down by the Supreme Court in Shutz. He held:

1. The capsule is an entirely subsidiary part of the system because

(i) Nespresso machines sell for hundreds of pounds, where as the capsules sell for 20-30p each;

(ii) the machines are intended to last for many years;

(iii) the capsules contain coffee which is perishable so have to be used by a defined time;

(iv) the functioning of the machine is not altered by the presence or absence of the capsule; and

(v) the presence or absence of the capsule dose not effect the economic value of the machine.
2. Both the machines and the capsules have an independent commercial existence. Indeed, there is a market for second-hand Nespresso machines.

3. Because the capsules are consumables, purchasers of machines would assume that they are entitled to obtain capsules to use with the machine from whatever source they pleased. Although it must be assumed for this purpose they are not impliedly licensed under the patent, even so it is clear from Lord Neuberger's reasoning in Shutz v Werit that this consideration is relevant.

4. The capsule does not embody the inventive concept of the patent. Although the flange of the capsule plays a significant role in the way the claimed invention works. However,

"[I]t remains the case that the invention takes the capsule as a given and the specification explicitly states that the invention can be used with any type of capsule….The fact the claims require the presence of a capsule is an artefact of clever claim drafting. In my view it may be inferred that the reason why the granted claims require the presence of the capsule (whereas the claims in the Priority Document did not) is precisely in order to enable Nestec to argue that the mere supply of capsules constitutes an infringement and thus to enable Nestec to continue to control the market in capsules even though EP 148 [the patent protecting the capsule itself] has expired."
5. The owner of the machine is not repairing or making the product. The judge, now on a roll with lambasting this argument concluded.

"Only in the world of patents could it even be suggested that a person "makes" a "product" merely by purchasing a consumable for use with a machine (i.e. before they have even used the consumable in the machine, here making a cup of coffee)."
So, the owners of the relevant Nespresso machines did not "make" the claimed system when they purchased the Dualit capsules.

The means relating to an essential
element of the AmeriKat's lemonade

So concludes the English chapter of the coffee wars, which has also seen the Higher Regional Court of Düsseldorf proceed down similar reasoning holding that a supplier of compatible cartridges was not liable for indirect infringement for selling compatible Nespresso cartridges. Of course its hardly surprising that the outcome of Arnold J's decision is consistent with the German approach given his reliance on German s.60(2) case-law.

But despite the nitty gritty of the interpretation of section 60(2), the underlying message from the UK courts following Shutz and Nestec is that they are unlikely to find indirect infringement where the product relates to consumables, not least because of the unspoken policy reasons. It also seems that, following Arnold J's comments, no clever claim drafting will save a patentee in these circumstances. While Merpel may be muttering under her breath about how something can simultaneously be an entirely subsidiary part of a system but yet also contribute to the technical teaching of the invention, the AmeriKat purrs contentedly to herself. The decision seems entirely sensible (for now…).

Autocomplete: can Google turn bad news into good profit?

noreply@blogger.com (Jeremy) — Tue, 14 May 2013 13:03:00 +0000

If you thought autocomplete was about putting
cars together, think again!

The IPKat has just this minute learned of a ruling, hot off the press, from Germany's very own Bundesgerichtshof in BGH Case VI ZR 269/12 of 14 May 2013). That country's top appellate court has decided today that Google love-it-or-loathe-it autocomplete can in certain situations constitute a personality right infringement under Articles 823(1) and 1004 of the German Civil Code, when that provision is taken in combination with Articles 1 and 2 of the German Basic Law. This was the case on the facts leading to this appeal, where the unfortunate claimant discovered that, when internet users keyed his name into google.de, Google's autocomplete suggested the term "fraud".

Better news for Google is that, according to the BGH press release, Google is legally liable only once it is aware of an infringing autocompletion of this nature -- but not before. This appears to suggest that there should now some corresponding legal right to demand from Google, at least in Germany, that it remove any such information that causes infringement of one's personality right in this manner.

The IPKat is fascinated by this. If autocomplete can do damage like this to people's surnames, it can presumably offer words like "fraud", "sucks" and "malodorous" in respect of registered trade marks too -- many of which are people's names or surnames. Merpel senses here that, in countries where the use of autocomplete carries no risk of legal liability, Google can develop a promising market for the sale of anti-keywords, where one can pay the company large sums of money for the privilege of suggesting poor quality, bad value for money or other undesirable characteristics in regard to a competitor's brands.

See also "Is Google Afraid of the Big Bad Wulff? No", here.

The wrong tool for the wrong job: time to keep the US courts away from patentable subject matter?

noreply@blogger.com (Jeremy) — Tue, 14 May 2013 07:21:00 +0000

Like many of this weblog's readers, this Kat has long nurtured a fascination and deep admiration for the United States Federal judiciary. Unlike the judges of the Court of Justice of the European Union, who rarely appear to be qualified to deal with regular commercial law issues and are generally quite reticent to articulate their views in public, their US counterparts -- from the Supreme Court downwards -- give the impression of being not merely qualified but indeed required to display their legal virtuosity, their deep understanding of the underlying issues and their cogent grasp of authority on every subject that ever there was. It must be conceded that, collectively if not individually, they are mightily good at it too, for they are very convincing, particularly when there is no-one to argue with them.

This guest post, which makes no apology for its length (which patent enthusiasts will greatly appreciate), is premised on the proposition that, whatever else the US Federal judges may be good at, they should be kept from being allowed to interpret and thereby determine the scope of patentable subject matter. The author of this post is no mere sniper, taking pot-shots at a sitting target: he is Professor Norman Siebrasse, one of the most respected commentators on patent law anywhere in the continent of North America, a blogger in his own right (see Sufficient Description) and, most importantly from our point of view, a much-loved former guest Kat. The subject of Norman's guest post here is the recent US decision in CLS Bank Int’l v Alice Corp 2011-1301 (Fed Cir 2013) en banc aff’g 768 F Supp 2d 221 (D.D.C. 2011). He writes:

The en banc decision of the US Federal Circuit in CLS Bank v Alice Corp has showcased a fractured court, with five different opinions, three different approaches to assessing patentability, and a 5 - 5 split on whether the key claims are patentable subject matter. Judge Newman’s dissent provides an acerbic assessment of its practical implications: “With today’s judicial deadlock, the only assurance is that any successful innovation is likely to be challenged in opportunistic litigation, whose result will depend on the random selection of the panel.” [the IPKat suggests that readers stop at this point and think about the repercussions of this statement -- for business, for investment, for the efficacy of the patent system as a whole] This confusion is not surprising. I have argued that the US Supreme Court approach to patentable subject matter is hopelessly confused because it is wielding the wrong tool for the job; the USSC has consistently attempted to exclude fields of endeavour which it views as problematic, such as life forms (Funk Bros 333 US 127 (1948)), computers (Benson 409 US 63 (1972), Flook 437 US 584 (1978) and Diehr 450 US 175 (1981) ), and business methods (Bilski 130 S.Ct. 3218 (2010)), by using the rule that abstract ideas cannot be patented. The difficulty with this argument, as first pointed out by Frankfurter J, disagreeing with the majority reasoning in Funk Bros at 135, is that “[e]verything that happens may be deemed ‘the work of nature,’ and any patentable composite exemplifies in its properties ‘the laws of nature.’ Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost every patent.” The consequence is arbitrariness, as patentability turns on whether a particular judge characterizes the invention as turning on an idea (as all inventions ultimately do), or as being a practical application of that idea (as in any well drafted claim).

At issue in CLS Bank were four related patents related to “a computerized trading platform used for conducting financial transactions in which a third party settles obligations between a first and a second party so as to eliminate ‘counterparty’ or ‘settlement’ risk.” (Lourie p 3). Method, system and product claims were at issue. The method claims were the most general, encompassing “A method of exchanging obligations. . . comprising the steps of: (a) creating a shadow credit record . . .(b) obtaining from each exchange institution. . .” (Claim 33 of the ‘479 patent, quoted by Lourie p. 23). The system claims captured the same concept, as implemented by computer: “A data processing system. . .comprising: a data storage unit . . .and a computer. . .” (Claim 1 of the ’720 patent, Lourie p 32). The product or media claims were in the so-called Beauregard format, to “computer readable storage medium having computer readable program code embodied” which would carry out the invention on a computer (Claim 39 of the ’375 patent, Lourie p 29).

Judge Lourie wrote for five members of the Court, setting out his approach to the problem, and concluding that all claims were invalid as being directed to abstract ideas. A collective opinion for four other members of the Court – Chief Judge Rader, along with Judges Linn, Moore and O’Malley, set out a different approach, and held the system claims to be patentable subject matter. Chief Judge Rader and Judge Moore, applying the approach from the collective opinion, held the method and product claims not to be directed to patentable subject matter, agreeing with Judge Lourie in the result, though for different reasons. Judges Linn and O’Malley, applying the same method from the collective opinion, but construing the claims differently, held the method and product claims were patent-eligible. Judge Newman advanced a third approach, and held that all the claims were patentable subject matter. (A fifth opinion by Judge Moore, with Chief Judge Rader, and Judges Linn and O’Malley concurring, further explained why the system claims should be considered patentable; this was essentially a concurrence with that part of the collective opinion.) So, by the numbers, the Court was equally divided on the system claims, and held the method and product claims invalid by a 7 - 3 majority.

The result in this case was that all claims are invalid, as the equal division resulted in an affirmation of the decision below. More importantly for the law, there was no consensus on the proper approach.

The debate centred on three judicially created exceptions to the broad scope of patentable subject matter set out in §101: “‘[L]aws of nature, natural phenomena, and abstract ideas’ are excluded from patent eligibility.” (Lourie p 8). These exceptions to patentability, and particularly the rule against patenting of abstract ideas, have long been at the heart of the debate over the patentability of computer programs. The logic is that an algorithm is an abstract idea, and so if the inventive concept lies only in the algorithm, and there is no invention in implementing it on a general purpose computer, then claiming a program amounts to claiming an abstract idea.

Justice Frankfurter’s observation that all inventions turn on abstract ideas is now well-recognized (see eg Prometheus v Mayo 132 S.Ct. 1289, 1293), so the challenge is how to limit this principle that abstract ideas cannot be claimed. One approach, and the correct approach in my view, was succinctly stated by the Supreme Court of Canada in Shell Oil [1982] 2 SCR 536 summarizing a long line of English authority:

A disembodied idea is not per se patentable. But it will be patentable if it has a method of practical application.

That is, the only prohibition is on patenting of abstract ideas; there is no objection to an invention which rests on an abstract idea – as all inventions ultimately do – so long as it is claimed as a practical application of that idea. The difficulty with this position, at least in the US, is that it is not consistent with decisions such as Benson and Flook, which held claims to programs to be unpatentable notwithstanding that they were claimed as a practical application.

The policy rationale advanced in Benson is that it is would be wrong to allow a claim to “wholly pre-empt the mathematical formula,” as “in practical effect [this] would be a patent on the algorithm itself.” This, it is said, would impede innovation rather than promoting it. The legal difficulty with that argument is that it is inconsistent with a vast number of cases, stretching back to the nineteenth century litigation over Neilson’s patent for a hot blast furnace in which the rule against abstract claims was originally developed. (See here for a discussion of the origin of the rule.) Lord Justice Clerk Hope in a direction ultimately approved by the House of Lords, directed the jury that “a patent will be good, though the subject of the patent consists in the discovery of a great, general, and most comprehensive principle in science or law of nature, if that principle is by the specification applied to any special purpose, so as thereby to effectuate a practical result and benefit not previously attained” ((1843) 1 WPC 673, 683. Lord Hoffmann has more recently affirmed the same point in Kirin-Amgen [2004] UKHL 46 at [77]:

Of course a patentee may in some cases be able to frame his claim to a product or process so broadly that in practice it will be impossible to use the information he has disclosed, even to develop important improvements, in a way which does not infringe.

The policy objection to the Benson reasoning is that the scope of the reward should be commensurate with the scope of the contribution. As the US Supreme Court remarked in The Telephone Cases, if it were true that Bell’s patent granted him a practical monopoly, this would “show more clearly the great importance of his discovery, but it will not invalidate his patent” 126 US 1, 535.

The result of the inconsistency between the practical application test and the pre-emption reasoning has been arbitrariness. A court inclined to strike down a patent can emphasize the abstract nature of the underlying idea (Funk Bros, Benson, Flook), while a court inclined to uphold it will emphasize the practical application, as in Diehr. The position of the Federal Circuit, picking up on Diehr, and exemplified by In re Alappat, 33 F 3d 1526 (Fed Cir 1994) (en banc) has been to apply the practical application test, leading to liberal granting of software patents, as well as to decisions such as State Street. (The USSC Bilski decision did nothing to clarify this mess, as it approved all the prior case-law, and the claims at issue were arguably invalid under either approach.)

The surprise in CLS Bank is that half the Federal Circuit, in Judge Lourie’s opinion, has finally come around to the USSC’s way of thinking. In his approach, subject matter patentability “turns primarily on the practical likelihood of a claim preempting a fundamental concept” (Lourie p 9; and see also p 15). A claim will avoid this objection only if there are “meaningful limitations that prevent the claim as a whole from covering the concept’s every practical application” (p 16). That the claim is directed to the invention as implemented by a computer is not a meaningful limitation if it is in such general terms as to cover every practical implementation. The difficulty with this, both as a practical matter for claims drafters and as a matter of policy, was pointed out by the Supreme Court of Canada in Burton Parsons [1976] 1 SCR 555: “If the patent is to have a practical value, it must cover all [implementations of the invention] which can yield the desirable result . . . [I]f, in order to guard against possible invalidity, some area is left open between what is the invention as disclosed and what is covered by the claims, the patent may be just as worthless as if it was invalid. Everybody will be free to use the invention in the unfenced area.”

In contrast to Judge Lourie’s opinion, the collective opinion carried on the Federal Circuit tradition of emphasizing the practical application test. Relying heavily on Diehr, the USSC decision most sympathetic to that position, the collective opinion notes at 28 that “it would seem that a claim embodying the machine itself, with all its structural and functional limitations, would rarely, if ever, be an abstract idea.” The opinion deals with the USSC’s heavy reliance on pre-emption by asserting in effect that when an invention is claimed as a practical application, it will rarely, if ever, pre-empt the idea itself (p 20, 21). Consequently, a claim to a general purpose computer programmed to implement an idea, as in this case, will normally be patentable, though Chief Judge Rader and Judge Moore felt that the method claims were unpatentable as claiming the abstract idea as such. If the collective opinion was to prevail, computer implemented inventions would continue to be generally patentable.

Judges Linn and O’Malley disagreed with Chief Judge Rader and Judge Moore only as to the proper interpretation of the method claims. They held that on the record, the computer-implemented limitations that were explicit in the system claims should also be read in to the method claims. Though they did not expressly address the point, it seems that if they had construed these claims as not being subject to these limitations, they also would have held them to be invalid as claiming abstract ideas (See p 10).

Judge Newman would apparently entirely reject the judicially created limitation on patenting of laws of nature, natural phenomena, and abstract ideas. “The court should return to these basic principles [of novelty, unobviousness, enablement, specificity, etc.], and abandon its failed section 101 ventures into abstraction, preemption, and meaningfulness.”

As Judge Moore noted at p 3, “Our court is irreconcilably fractured over these system claims.” Judge Lourie attempted to create an appearance of consensus, saying “seven of the ten members, a majority, of this en banc court have agreed that the method and computer-readable medium claims before us fail to recite patent-eligible subject matter. In addition, eight judges, a majority, have concluded that the particular method, medium, and system claims at issue in this case should rise or fall together in the § 101 analysis” (Lourie fn 1). To the extent that this is intended to imply that the system claims must be invalid because there is agreement that they must stand or fall with the method claims, which a majority held to be invalid, this is disingenuous. Judge Lourie held that the claims stand or fall together as a matter of principle: “we must look past drafting formalities and let the true substance of the claim guide our analysis” (Lourie p 30). Judges Linn and O’Malley did not hold that the substance of the invention was determinative of patent-eligibility; on the contrary, they emphasized that the question turned on a proper construction of the claims. The result was the same for all the claims only because, properly construed, they all embodied “the same meaningful limitations” (Linn & O’Malley p 2). And Judge Newman held that all stand or fall together because she entirely rejected the analytical premise of the Lourie opinion. The collective opinion accordingly concluded that “Accordingly, though much is published today discussing the proper approach to the patent eligibility inquiry, nothing said today beyond our judgment has the weight of precedent.” The judgment itself, per curiam, was two sentences holding only that the method and product claims are not patentable subject matter, and “An equally divided court affirms the district court’s holding that the asserted system claims are not directed to eligible subject matter under that statute.” In other words, the Court is so hopelessly divided that it could not even agreed on what has been decided.

The key to escaping from the resultant morass is found in the dissenting opinion of Judges Linn and O’Malley at 13, responding to the concern raised by amici that software patents inhibit innovation:

We do not discount Amici’s concerns, we just disagree with what they ask us to do to quell them. Congress can, and perhaps should, develop special rules for software patents. . . . While Congress may, this court may not change the law to address one technological field or the concerns of a single industry. Thus, whatever the merits of such concerns, the answer is not to rewrite the law by broadening the abstract ideas exception to § 101.

It may be that innovation is impeded by software patents – or business method patents or gene patents – but that question is one for the legislature, not the courts. (I make this argument in a recent article).

The lesson here, as I see it, is that the question of patentable subject matter can no longer be left to the courts, or at least not to the US courts. At one time it was reasonable to suppose that a satisfactory resolution might be achieved through the common law method of incremental judicial decision. After both the USSC Bilski decision and now CLS Bank, which have created more confusion, rather than less, it seems evident that this strategy has failed.

Katnote: a follow-up post, taking in the recent decision of the Court of Appeal for England and Wales in HTC v Apple, will be posted tomorrow evening.

Fighting Counterfeiting with Accessibility

noreply@blogger.com (Jeremy) — Tue, 14 May 2013 06:15:00 +0000

It seems obvious, really. If pharma companies are so concerned about people buying counterfeit versions of their drugs online, why don't they make it easier for these good and vulnerable folk to buy the genuine product directly from them? In this guest post, Miri Frankel reviews this line of thought in the light of a recent initiative aimed at just that purpose. Miri writes:

Pharmaceutical drug counterfeiting is big business. An estimate from the World Health Organization puts annual global sales of counterfeit or tainted pharmaceutical drug products at $430 billion. Pharmaceutical manufacturers and the Medical Product Counterfeiting and Pharmaceutical Crime (MPCPC) unit of INTERPOL have a tough time catching and prosecuting global drug counterfeiting rings, which have vast networks for online sales.

With these challenges in mind, more than two dozen Big Pharma companies have announced a new partnership with INTERPOL to combat drug counterfeiting. These companies will provide nearly six million dollars (4.5 million euros) to INTERPOL’s newly created Pharmaceutical Crime Program, which is tasked with stemming the supply of fake drugs by training local law enforcement on investigative procedures geared toward dismantling drug counterfeiting enterprises.

According to a report from INTERPOL, an essential part of the programme is to raise public awareness of the dangers of fake drugs, particularly for people buying medicines online. The World Health Organization estimates that in more than 50 per cent of cases, medicines purchased over the internet from illegal sites that conceal their physical address have been found to be counterfeit.

Where fashion and medicine meet:
Hermes should never be
confused with Herpes

Typically, consumers seek out counterfeit products because the brand to which they aspire is inaccessible. In the fashion industry, this concept is realized by shoppers whose wallets are not big enough to buy the luxury goods they desire. On a nearly daily basis, new websites are launched promoting cheap (and generally fake) Gucci handbags or Prada footwear, or any other of-the-moment luxury fashion item. And the ease with which consumers can locate such products for sale online has been a boon to counterfeiters and a nightmare for law enforcement and for brands trying to protect their IP, their reputation, and, of course, their revenues.

In the context of pharmaceuticals, anti-counterfeiting is not only a matter of revenue protection, it is a matter of public health and safety. INTERPOL’s report notes that,

Counterfeit cough syrup and other medicines laced with diethylene glycol have caused eight mass poisonings around the world including in 2006 in Panama where more than 100 people died, many of them children. In 2012, some 109 heart patients in Pakistan died after taking fake medicine.

Good for hypochondria?
Fake drug websites might
yet be handy for folk with
fake illnesses, says Merpel

In addition, in contrast to fashion goods, consumer price concerns (while relevant) often take a back seat to the embarrassment factor. As a result, a few major pharmaceutical companies are testing out programs to sell, through their own websites, certain drug products that carry social stigmas (think: erectile dysfunction, weight loss, and cancer treatments, which account for some the most counterfeited types of drugs). Consumers thus have the ability to purchase directly from the manufacturer prescription drugs for ailments they do not want disclosed to others, even if the disclosure takes the form of being spotted at the pharmacy counter. Without embarrassment as part of the equation, will consumers be willing to pay for the brand name drug now that it is legitimately available online, or will they continue to seek lower priced alternatives despite knowing that those alternatives may be counterfeit? If the digitization of the music industry has taught us anything, it is that consumer demand for product accessibility, especially online, cannot be ignored; it must be embraced in order to avoid driving consumers to counterfeit or infringing products that are more easily accessible.

It will be interesting to see how the take-it-to-the-masses approach works in combating demand for counterfeits in the patent/pharmaceutical world. Consumers, returning to the fashion industry comparison, may knowingly and unapologetically purchase lower-priced counterfeit luxury fashion goods despite knowing that counterfeit fashion goods have a direct connection to criminal activities like arms trafficking and terrorism. The connection between their illicit purchases and terrorism might seem too tenuous to be a sufficient deterrent if they view those criminal activities as far removed from their own personal lives and home neighborhoods. On the other hand, pharmaceutical drug consumers may be more adept to select accessible online offerings of the legitimate product rather than take their chances with lower-priced counterfeit products that could cause them direct physical illness and harm.

The IPKat notes that much has been made of the failure of intellectual property creators and owners to make their products adequately accessible to consumers in the developing world, but that relatively little has been said about product access in the developed world. If better education of consumers, coupled with easier access to medicines via the original manufacturers, results in cleverer customers making better choices and staying healthier, to the detriment of the counterfeiters and traders in fakes, are we not all the winners?

Merpel says, this is all very well -- but spare a thought for legitimate middle men. Do they have a future at all in the era of internet trade, or are they no more than commercial dinosaurs, a footnote in business history?

Monday miscellany

noreply@blogger.com (Jeremy) — Mon, 13 May 2013 14:26:00 +0000

Stornoway Black Pudding,
as viewed from the inside

One of the more obscure, if intriguing, pieces of European Union legislation to cross the IPKat's line of vision in the past few days has been the splendidly-named Commission Implementing Regulation (EU) No 423/2013 of 7 May 2013 entering a name in the register of protected designations of origin and protected geographical indications [Stornoway Black Pudding (PGI)]. The name of this pudding may not trip off the tongue of the average reader; indeed, many might prefer to keep well away from this primeval mixture of oatmeal, suet and blood. However, it has its own Wikipedia entry and has been described as the best sausage made in the United Kingdom. If you want to make it yourself, here are some helpful hints. This Kat tries very hard not to be judgmental about these things, but over the years he has noticed a very large number of registrations in the European Union of protected geographical indications and protected designations of origin -- these designations being in many cases highly descriptive and often for products which, unlike the obvious and famous ones like PARMA, STILTON or CHAMPAGNE, seem to be, if he may say so without being rude, a trifle obscure. What he'd like to know is how many of these recently-registered names have ever, even in the days when no such protection was available in its current form, actually been infringed. Is anyone keeping data? Are potential infringers frightened off by GI protection, or was there little incentive to them to infringe in the first place?

Good news from the IPKat's friends at IP Draughts. This lovely IP transaction-focused weblog has now passed the milestone of 100,000 viewings. The blog's mastermind, the excellent Mark Anderson, is celebrating by looking to appoint an IT/IP lawyer, probably 2-3 years of post-qualification experience. If you feel that you are that person, contact Mark at Anderson Law LLP. You can find his contact details here.

Fresh from Dallas, where he gave a jolly good account of himself at one of the International Trademark Association's Scholarship sessions, Martin Husovec has put his draft paper "In Rem Injunctions: Case of Website Blocking" on SSRN so that you can comment on it (you can access it here). According to the abstract:

"The paper discusses a concept of protection of the intellectual property rights by so called 'in rem injunctions' (actio in rem negatoria), i.e. tort-law-independent system of injunctive protection of absolute rights. One type of such injunctions, website blocking, is currently appearing in a spotlight around various European jurisdictions as a consequence of the implementation of Art. 8(3) of the Information Society Directive and Art. 11 of the Enforcement Directive. Website blocking injunctions are in this paper used only as a plastic and perhaps also canonical example of the paradigmatic shift we are facing. The author of this paper maintains that the theoretical framework for these injunctions is not in the tort-law, but in an old Roman law concept of so called 'in rem actions'. Thus the term in rem injunctions is coined to describe this concept. Besides the theoretical foundations, the paper explains how this system fits into the private law regulation of negative externalities of on-line technology and also what are expected dangers of derailing injunctions from the tracks of the tort law. The important question of the justification of an extension of the intellectual property entitlements by in rem injunctions however, which is author's PhD project, is left out from the paper".

If you'd like to email Martin with your comments, or just to have a good argument with him -- as some of the folk at INTA did -- you can contact him here. Once again, a big thank-you to Francis Davey, Marks & Clerk, Mike Mireles and the anonymous donor in memory of David Latham, for their generosity in helping Martin attend the INTA Meeting, in which he was a resounding hit.

The Federation Against Software Theft (FAST) described last week's Queen’s Speech, outlining the forthcoming legislative programme of the United Kingdom Parliament, as a “missed opportunity” for the software industry, according to a media release. According to Alex Hilton, FAST's CEO, last week's announcement of a new bill for intellectual property could have brought in much-needed improvements in enforcement operations against intransigent IP infringers. Couching his disappointment in suitably gentlemanly terms, he said:

“While it is fair to say that the IP framework in the UK is one of the best in the world, enforcing the law is an area that needs improvement. We had hoped that this would have been reflected in Her Majesty’s most gracious speech ...”

Queen Elizabeth II: do her
ministers care tuppence for
the software sector?

FAST has been calling for change in three areas as a priority: (i) implementation of Article 4 of the IP Enforcement Directive 2004/48 to enable FAST to act on behalf of its members [while the Directive is now part of UK law, only "intellectual property collective rights-management bodies which are regularly recognised as having a right to represent holders of intellectual property rights, in so far as permitted by and in accordance with the provisions of the applicable law" -- whatever that means -- can sue on behalf of rights-holders]; (ii) raise the likelihood that infringers will face stiffer damages penalties to deter the use of pirated software [curiously, the only mention of 'deterrent' in the Enforcement Directive relates to publicising court awards: see Recital 27] and (iii) making company directors more likely to be personally accountable for illegal software installations used by the business [hold on, says Merpel, you'll be suggesting next that company directors are expected to know something about what their companies are actually doing!]. This Kat finds it ironical that the software industry, which has provided so many of the means by which piracy and infringement are achieved by others, is itself plagued by the same ailment.

Last week the IPKat posted this piece about trade mark bullies. In this piece he returned to the story of the much-bullied Gus and Inez Bodur, whose plucky defence of their trade marks has cost them dearly. Following that post he received an email from the Bodurs, who wrote:

"Thank you for keeping everyone informed on our dispute and we really appreciate your kind words. You are right, legal aid for small businesses probably wouldn't stop the bullies and it could still be dragged on for years. Intra Presse kept saying they wanted to negotiate over the years, but this never happened. I think it would really help if the parties could get together and try and work things out, so it doesn't go on for years to come. It's such a shame the INTA [seesion on trade mark bullying] was not busy, we would definitely have got up and spoken if we had been there".

For academics and conference-goers, trade mark bullying is simply a subject of professional or theoretical interest, part of the social psychology of commercial behaviour in the brand space. But it's important to remember that every act of bullying has a human being at each end of it. How big brand owners behave is not just 'corporate activity', it's rank bad behaviour on the part of someone who should know better -- and anyone who can recall the pain of being bullied in the school playground will understand that the spectators who watch and do nothing when someone is bullied are almost as culpable for their failure to object as are those who do the bullying.

Time to spare? Want to understand copyright a bit better? This may just be for you

noreply@blogger.com (Jeremy) — Mon, 13 May 2013 07:22:00 +0000

Authorship? This illustration
is a good example of artwork
that has come adrift from its
author on the internet. Can
anyone identify the author?

As a great believer in spreading the word, this Kat considers that -- whatever you are doing in the field of creative endeavour -- you will make better decisions if you are better informed. If you are a creator of an original work, it's useful to know if there are any legal strings attached to it or if anyone can use it for any purpose they want. If you are creating that work for someone else, what could be more useful than to know if any legal rights in it belong to you or to the person you've created it for, and whether, even if it's yours by right, your client or customer can use it too. If you're in business as a publisher, broadcaster, film producer or internet service provider, you want to know what risks you're taking when you seek to make copies of someone else's work, even if they tell you that you can, and you need to know what to do if, even though you are simply communicating a work to the general public or subscribers, you are accused of copying, transmitting or hosting allegedly infringing material. And if you are in the business of citing, analysing, criticising or adapting the works of others, it's important to know where to draw the line and to understand what happens if you trespass on not just the legal rights of the copyright but also the feelings and the reputation of the author.

You may be thinking at this point, "What on earth is the IPKat bothering to tell us? Surely this is all banal, obvious stuff, which every lawyer and sensible layman already knows!" If that is your view, why not take a look at the debris of some of the litigated copyright infringement and ownership disputes that have littered the courts over the past few years. If you do, you will find ample evidence that litigants and/or their commercial and/or legal advisers (i) didn't know how copyright affected their businesses, (ii) did know but were wilfully blind to it, or (iii) took the trouble to find out what the legal position was only after the event, when it was too late to avoid trouble.

Kings College London: very pretty, but students
can also admire it at a distance ...

In the vast majority of instances in which a business depends on or exploits copyright-protected material, there is no way to be one hundred percent safe from the risk of being at one end or the other of a copyright infringement action. But the risk can be minimised by anyone who takes the trouble to gain an adequate degree of familiarity with the rules of the game. This is where the King's College, London, distance learning programme for copyright comes in. It's a rigorous eight-month programme, taught to a high standard by a remarkably strong team of specialist copyright educators and practitioners drawn from the disparate legal cultures of the United States, the European Union and the contrasting common law and civil law national jurisdictions of key EU Member States. Led by Katfriend Professor Tanya Aplin, this team not only provides materials for the various course modules but will assess three substantial compulsory written assignments. Candidates also have the opportunity to attend three weekend residential seminars, which is probable advisable if they want to thrive in the three-hour written examination which they are obliged to take in May 2014.

So if you have some spare time between October and May, fancy a chance to improve your copyright skills and even collect another qualification for your CV or for your personal satisfaction, this course may just be for you.

**********************************************

The Postgraduate Diploma/Masters in UK, EU and US Copyright Law 2013-2014 is brought to your doorstep by a bevy of copyright scholars from King's College, London. This course commences on 1 October 2013. Further details of the course, and registration, are accessible here.