Thursday, 28 July 2011

Intellectual property versus the public interest: who gets the vote?

Authors: Kingsley Egbuonu (Queen Mary, University of London) and Chukwuyere Izuogu (Streamsowers & Köhn)

Bedding Holdings Ltd v INEC & Ors, Abuja High Court, Nigeria, 17 December 2010

Journal of Intellectual Property Law & Practice (2011) doi: 10.1093/jiplp/jpr118, first published online: 26 July 2011

In a patent infringement suit, a High Court lifted an injunction restraining the Independent National Electoral Commission (INEC) from taking delivery of the Direct Data Capture (DDC) equipment needed for the voter registration exercise on the ground of overriding national public interest.

Legal context

In Nigeria, a patent right is granted subject to the Patents and Designs Act 1990 (PDA). Nigeria is a common law jurisdiction and most of its laws and court procedures in relation to IP bear resemblance to those of England and Wales. Unlike a UK patent, there is no presumption of validity of a Nigerian patent (section 4 (4) PDA).

A patentee can seek ex parte injunctive relief when the right is threatened or about to be threatened. However, a court will grant this injunction only if it is satisfied that there is real urgency in preserving the status quo and in order to avoid the occurrence of irreparable harm (see Kotoye v C.B.N. (1989) 1 NWLR Part 98, 419 at 447). This reasoning follows well-settled English equitable principles in American Cyanamid Co v Ethicom Ltd [1975] AC 396.

On the other hand, Order 26 Rule 11 of the Federal High Court (Civil Procedure) Rules 2009 allows a party affected by an ex parte injunction to seek to vary or discharge such an order (see 7 UP Bottling Company v Abiola & Sons Ltd (1989) 4 NWLR (Pt 114) 229; U.T.B. Ltd v Dolmatech Pharm (Nig) Ltd (2007) 16 NWLR (Pt 1061) 520 at 542, 552).

Facts

On 3 December 2010, the plaintiff, a company engaged in metal fabrication and manufacturing of security and communication equipment, claimed that its rights had been infringed, and/or were about to be threatened, by the defendants. In the affidavit supporting its ex parte motion, it claimed to be the bona fide proprietor of Patent No. RP 16642 and Copyright Design No. 13841 relating to an Electronic Collapsible Transparent Ballot Box (ECTBB), and Patent No. RP NG/P/2010/202 in respect of a Proof of Address System/Scheme (PASS)—generally, the Direct Data Capture (DDC) equipment. This equipment was used for the collation and collection of names, age, sex, address, fingerprints, and other biometrics of individuals for various purposes, including voter registration.

Relying on this, the plaintiff sought the following relief from the Court:

  • a declaration that it was the bona fide proprietor of the listed rights and was thus entitled to 50 per cent of the contract sum, and an order compelling the defendants to obtain authorization; or
  • a declaration that certain contracts were null and void; an order of perpetual restraining injunction; general damages, and other relief deemed fit.

There were six defendants in total: the Independent National Electoral Commission (INEC), its chairman, the Attorney General and Minister of Justice of Nigeria, and three agents/contractors. INEC is the national agency charged with upholding democracy in Nigeria, to include, conducting free and fair elections. The defendants had already agreed, concluded, and executed their contractual agreements, but yet to take delivery of the alleged infringing articles needed for the conduct of the general elections in April 2011.

The plaintiff's infringement action was premised on the contracts awarded and/or the expected delivery of the alleged infringing articles, claiming that these acts put its patent rights in permanent jeopardy.

Analysis

On hearing the application, the High Court ruled in favour of the plaintiff and adjourned the case until 13 December 2010 to hear both parties. In its judgment, the Court ordered that
the defendants/respondents either by themselves, agents, privies, contractors, surrogates or any other person or persons claiming through them, are restrained from continuing the process of considering proposals of tendering/bidding for, producing, procuring, supplying, selling, leasing, alienating, applying or otherwise using the Direct Data Capture Machines, laptops and/or any other equipment ancillary to, or associated with the process and application of the said machines/equipment about to be supplied or being supplied by the 4th–6th defendants/ respondents to the 1st and 2nd Defendants/Respondents for the registration of voters and/or compilation, production and use of a Voters’ Register for the 2011 general elections or any other elections whatsoever, pending the hearing and determination of the motion on notice for interlocutory injunction filed before this Court.
On 13 December 2010, the defendants made substantive representations in seeking to discharge the order, relying on the following grounds:

  • the order was too broad, vague, and uncertain, incomprehensible and incapable of enforcement;
  • the order, on the face of it, was not hinged on any alleged right, nor did it aim at protecting any rights, and was therefore a ruse;
  • any claims based on infringement of patents or copyrights were commercial disputes which could be adequately compensated by damages on success;
  • there was no real urgency and the order, on the face of it, sought to disrupt the 2011 general elections with grave consequences;
  • the order was against the public interest and was made against a completed act;
  • the plaintiff had not given undertaking in damages and the suit was an abuse of process, and
  • the plaintiff violated the order by not serving the defendants on time.

The plaintiff began by arguing that it had acted in good faith in enforcing its rights and thus deserved the protection of the Court (citing Attorney General v Attorney General of the Federation (2004) 18 NWLR Pt 904, 127). Counsel for the plaintiff also objected to various paragraphs in the defendant's affidavit as legal conclusions which should be struck out for offending the provisions of the Evidence Act. Counsel went further to submit that the defendants had not fulfilled the requirements to vary or discharge the injunction as laid down in U.T.B. Ltd v Dolmatech and, although an executive arm of government, the first defendant was still subject to the rule of law (citing Niki Tobi JSC in AG Lagos State v AG Federation (2004) 18 NWLR (Pt 904) 127).

Having heard both parties, the Court reiterated that the grant of an injunction is discretionary, and as such, it is exercised judiciously not judicially. It then observed that, on prima facie evidence, the plaintiff proved his patent rights with the certificate issued by the Registrar of Patents for the articles and/or process as claimed, whereas none of the defendants had such rights. In finding for the plaintiff, the Court accepted that certain paragraphs in the defendant's affidavit should be struck out as not being at issue, since the plaintiff as the rights holder had the right to file the motion.

The Court also affirmed the condition that a plaintiff must give an undertaking as to damages in affidavit, while seeking injunctive relief; however, it dismissed the defendant's submission that the law required a plaintiff to make a separate deposition or monetary deposit to that effect.

The Court noted that the plaintiff did not claim rights in and over the voters’ register; or in and over the DDC equipment per se, but claimed that the process and application of using the DDC equipment to achieve the compilation of the voters’ register infringed the two patents. On the other hand, the Court did comment that the defendants failed to delineate their invalidity challenge.

In assessing whether the injunction was still appropriate, the Court looked at the plaintiff's claims and concluded that an award of damages would be adequate compensation if the plaintiff succeeded at trial. The Court found that the parties were not in dispute as to the conclusion and execution of the contracts in suit. It also dismissed the defendant's claim that the equipment would have been deployed to action by 6 December 2010, but for the restraining order.

In its judgment dated 17 December 2010, the Court found merit in the defendant's application to discharge the injunction on the grounds that: (a) the plaintiff would be compensated by an award of damages if it was successful at trial; (b) the injunction could not be sustained in view of the fact(s) that what it intended to prevent had already been executed, and most importantly; and (c) there was an overriding national public interest to discharge the ex parte order of 3 December 2010 for the sake of the April 2011 general elections.

As both parties were content with the decision, the Court ordered for an accelerated hearing. However, it remains unclear whether this case progressed to trial.

Practical significance

First, this case highlights the perceived and growing distrust in the current IP regime in Nigeria, possibly due to the lack of confidence in the Registrar of Patents, and the unavailability of a database of granted rights which is publicly accessible. Nevertheless, the Court will always accept a duly endorsed registration certificate by the Registrar as genuine and prima facie evidence in proceedings.

Secondly, the Court appears to have been satisfied that the plaintiff's application was made as a “matter of urgency”, and accepted it was in good faith. Perhaps it is worth noting here that, Courts in Nigeria are often criticized for their generous attitude towards ex parte applications for injunctive relief.

Thirdly, by recognizing that the balance of convenience lay in the defendant's favour and that damages would not be adequate compensation on success, the Court's decision paved the way for the acclaimed April 2011 general elections in Nigeria. This exercise mirrors a similar approach taken by a British Court where public interest is at issue (see Lord Goff in Regina v Secretary of State for Transport, ex parte Factortame (No 2) [1991] 1 AC 603).

Fourthly, bearing in mind that there is no exhaustive list of what is in the public interest, the Court ruled correctly after weighing the two conflicting interests. Again, this reflects a stance readily adopted by Courts when faced with difficult issues that impinge on economic and/or non-economic development or stability of a nation (for instance, see the Indian Court's decision in Hoffmann-La Roche v Cipla Ltd, IA 642/2008 IN CS (OS) 89/2008).

It is impressive to see that the Court was cautious not to be drawn into a mini-trial at the interim stage. More so, although public interest prevailed, the positive cue here is that in Nigeria, the Court is eager to protect a bold proprietor of IP regardless of the status of the alleged infringer.

Wednesday, 27 July 2011

Constructing a case for infringing particle-size patents

Author: Christopher Hayes (H Lundbeck A/S)

Cephalon Inc, Cephalon France SAS and Cephalon (UK) Ltd v Orchid Europe Ltd and Generics (UK) Ltd (t/a Mylan) [2011] EWHC 1591 (Pat), Patents Court, England and Wales, 24 June 2011

Journal of Intellectual Property Law & Practice (2011),doi: 10.1093/jiplp/jpr126, first published online: July 23, 2011

The Patents Court (England and Wales) had to determine how to construe patent claims relating to particle-size formulations of a drug substance, whether those claims were infringed by a competitor's product, and whether the claims were obvious or insufficient.

Legal context

Construing patent claims are fundamental to determining the ambit of what is claimed. Consequently, a given construction will also delineate the bounds of potential infringing and non-infringing acts. This case also reviews the inventive step and sufficiency of disclosure of patents claiming particle size formulations of a drug.

Facts

This dispute centred around the drug modafinil. Mylan intended to market modafinil, made by Orchid. Cephalon brought an action for infringement in the Patents Court, which was heard by Floyd J. Mylan contended that it did not infringe any of the Cephalon patents and that, in any event the patents were invalid for lack of inventive step and insufficiency.

Modafinil was discovered and partially developed by a French company, Lafon. Cephalon licensed modafinil in the USA and conducted further development with a view to bringing modafinil to the market as an agent to treat sleep disorders. During the development programme, it was noticed that in US clinical trials, modafinil caused more side effects than in corresponding trials conducted in Europe.

Cephalon discovered that the particle size of the active pharmaceutical ingredient (API) used to formulate tablets of modafinil was smaller in the US tablets than in those used in the European trials. The US API had a median particle size of 30–50 micrometres (µm), compared with 80–150 µm in Europe. The smaller particle sizes led to an increased absorption, and hence increased bioavailability leading to an increased plasma concentration of modafinil. Consequently, lower doses of modafinil made from API with a smaller particle size could be used to achieve effective plasma concentrations of the drug.

Cephalon was the owner of three patents which claimed formulations of modafinil, comprised of specific particle sizes. There were two patents claiming formulations of modafinil; EP0731698 ('698) claimed compositions with 95 per cent of particles having a diameter of less than 200 µm; EP0966962 ('962) claimed compositions with a median particle size of 2–60 µm; and a method of manufacture patent, EP1088549 ('549) for compositions with 95 per cent of particles having a diameter less than 200 µm with a median particle size of 2–60 µm. All three patents contained similar disclosure and claimed the same priority date of October 1994.

A key issue is that during the tableting process, the size of the particles in the final finished tablet differs from that in the API from which the tablets are made. Therefore, the sizes of the particles in the API do not correspond to the size of the particles in the finished tablets, and vice versa.

Analysis

Claim construction
The central issue on claim construction was whether the particle sizes claimed in the various patents referred to the particle size in the final tablets or whether, as contended by Mylan, it referred to the particle size of the API. Both sides pointed to claim language which, they contended, supported their particular construction. Cephalon urged the language of the claims in the '698 patent, which claimed ‘compositions comprising’ modafinil particles. According to Cephalon, this could be literally interpreted as referring to the size of the particles in the final tablets.

Mylan favoured the language of the claims in the '962 patent for use of a ‘substantially homogenous mixture of modafinil particles … about 95% … have a diameter of less than about 200 micrometres for the manufacture of a pharmaceutical composition’. In Mylan's view, this demonstrated that it was the particle size of the API which was claimed.

Based on the evidence before Floyd J, he concluded that it was routine in the pharmaceutical industry to measure the particle size of API, rather than the final tablets. Indeed, in most medicines, the tableting process would not alter the particle size in the final tablet. It is the particle size of the API which tablet formulators alter to assess the properties of the final product, such as bioavailability. This was precisely the property affected by the alteration of the particle size of modafinil. Significantly, while it was routine to measure the particle size of API, the particle size in finished tablets could not have been measured at the priority date of the patents.

This led Floyd J to construe that the patents claimed formulations of modafinil made from API containing particles of the specified ranges. In other words, he accepted the Mylan construction that the references to particle size were the particle size of the API and not the finished tablet.

Infringement
The parties agreed that, if Mylan's claim construction was correct, the Orchid/Mylan product would not infringe, as 95 per cent of the particles in the Orchid/Mylan API were larger than 220 µm. Therefore there was no infringement.

Obviousness: drugs of the future
The patents were also attacked for lack of inventive step, in light of a publication, Drugs of the Future, and common general knowledge (CGK). It was found that the relationship between lowering particle size and improving bioavailability was part of the CGK. In developing a product, there would be motivation to improve dissolution and hence bioavailability, to improve the safety and efficacy of the drug. It would be routine to investigate the particle size with a view to improving the bioavailability of a compound, and furthermore there would be an expectation that this would be successful. Such investigations would confirm the benefits of having a smaller particle size. It would also be relatively straight forward to produce API with smaller particle size, within the ranges claimed in the patents. On the basis of this publication and the CGK, the Cephalon patents were found to be obvious.

Obviousness: Nguyen
Nguyen, a PCT application from Lafon, was published in September 1994. Nguyen was concerned with a process to produce materials useful in therapeutics, but it described modafinil formulations with a particle size of 2–5 µm. The only aspect of the Cephalon patents which was missing from Nguyen was the dosage of modafinil. Floyd J did not accept Cephalon's proposition that it would have taken significant investment to find the appropriate dose of modafinil. Had he not have found the patent obvious over CGK and Drugs of the Future, he would have required Cephalon to amend its claims to avoid this attack: Cephalon had an application to amend which was not pursued.

Insufficiency
Insufficiency was run as a squeeze argument against the construction. Mylan submitted that, if the claims covered the particle size in the final tablet, it was not sufficiently described so as to enable a person of skill to perform the invention. Starting with an API with known particle sizes, following the '549 and '962 patents, the skilled person would not have been to determine what particle size in the finished modafinil tablets would be. On that basis, the '549 and '962 patents, ie the patents claiming the formulations, were held to be insufficient. Conversely, as the '698 patent claimed a method to make modafinil formulations, it was held to be sufficiently enabled, as it contained at least one method to make the product.

Practical significance

This case represents an interesting commercial battleground regarding pharmaceutical formulation patents. Successful drug compounds are usually the subject of a host of formulation and process patents. Such patents can be found in the patent estates of the originator company, and also increasingly in non-originator companies.

The commercial benefits of such patents should not be underestimated. For the originator company, it may allow them to develop an improved formulation in the knowledge that they can maintain market exclusivity. For competitors, developing and patenting a new formulation with improved properties of a successful drug may give them a competitive advantage when they do enter the market, as they will have exclusivity on the new and improved formulation.

Such patents for competitors may also represent a strategic tool to facilitate an earlier market entry with a greater degree of certainty. Given that such drugs will be subject of several patents, if a competitor also has its own patent estate for that compound it could conceivably plot a course to market as soon as the compound patent expires, within the confines of its own patent estate.

Finally, this judgment highlights the potential issues in determining infringement of particle size patents. Often, a decision to raise infringement proceedings is based on product from the market, and this case sharply demonstrates the risks of determining particle size in tablets, in claims covering the particle size of the API: they may be one and the same.

Tuesday, 26 July 2011

Book review: a new regime

JIPLP is now operating a new regime for the review of intellectual property law publications, with immediate effect.  Please note the following:

In common with most legal journals, JIPLP faces a difficult task in farming out books for review and ensuring that a review is received within a reasonable period following its publication. In many cases books are not reviewed at all, since the reviewer has too many commitments, the book lies at the outer edge of the reviewer's interest or competence, or the book ceases to be current by the time a review is written, delivered, prepared for publication, proof-read, corrected and then published.  This is unhelpful for authors of books under review, who are deprived of useful feedback.  It is also unhelpful for publishers, who end up in many cases sending free copies of their books to people who might otherwise have been expected to pay for them.

JIPLP has opted for what we hope will be a more transparent, efficient and interactive process for reviewing books.  From now on, a notice of each book received for review by JIPLP will be posted on this weblog.  Details of the first five books offered for review under the new regime are posted below.

Anyone wishing to review a title should email Sarah Harris (Content Commissioning Editor) at sarah.harris@oup.com by the closing date for receipt of requests to review, indicating why that person believes him- or herself to be qualified to review it.  Reviewers will be given a maximum of 60 days in which to submit their review. If you are too busy to review the book, you are too busy to receive it, so please do not offer to review a title if you are unlikely to be able to submit a review.  If, having received a book for review, you realise that you cannot review it, please notify us accordingly and let us have the book back so that it can be sent to another reviewer.

From time to time, this weblog will publish a list of reviews in the pipeline together with their reviewer, so that readers can gain an idea as to what books will shortly be reviewed and, if necessary, defer their decision to purchase a book until they have had a chance to read the review.

JIPLP will endeavour to expedite the publication of reviews, making full use of the journal's Advance Access facility and by publishing a greater number of reviews on this blog.

The first five books offered under the new regime appear below.  If you would like to review one, please email Sarah Harris by this Friday, 29 July, and indicate (i) which book you would like to review and (ii) why you feel that you are qualified to review it.  If you are chosen, the book will then be sent out to you for review. If your request is unsuccessful, we will try to prioritise you on future occasions where possible.


Patent rights in pharmaceuticals in developing countries: Major challenges for the future, by Jakkrit Kuanpoth.  This book is published by Edward Elgar Publishing and you can check out the details of book and author on the book's web page here. This book would suit a reviewer who has worked in, or been involved in the regulation of, the pharmaceutical industry, or perhaps an academic who is active in the interface of healthcare, the development agenda and patent law.


Pharmaceutical, Biotechnology and Chemical Inventions, edited by Duncan Bucknell. This vast, state-of-the-art two-volume book has only just been published by Oxford University Press. Full details of the book and its contributors can be found on its website here. This is very much a practitioners' and innovation strategists' book, rather than academic fare.


A Practical Guide to Working with TRIPS, by Antony Taubman -- formerly of WIPO, now with the WTO and himself the contributor of a substantial book review for JIPLP.  This book is published by Oxford University Press and its details are available here. While experience of having worked with TRIPS would be an ideal qualification for a reviewer, that would exclude most IP experts straight away -- but both within the professions and academe there are many people who have had an opportunity to watch, to advise and to form an opinion of TRIPS in operation.



'Expert Privilege' in Civil Evidence has been written by regular JIPLP contributor Paul England. It is published by Hart Publishing and its details can be inspected on its web page here. This title really does call for a litigation lawyer as first choice, though privilege affects non-contentious practice too.



Landmark Intellectual Property Cases and their Legacy.  This intriguing title has been put together by scholars Christopher Heath and Anselm Kamperman Sanders (editors) and has been published by Wolters Kluwer Business & Law. Further particulars can be found here. A reviewer with an across-the-board interest in intellectual property and a solid academic pedigree might be best placed to review this.


Reviewers who are currently holding books.  Here is a message for the large number of reviewers who are currently in possession of unreviewed books for which the review date is now substantially overdue: can you please contact JIPLP and let us know either (i) how you are progressing with your reviews or (ii) whether you still propose to review the book.  Not hearing from you is frustrating for us and makes it difficult for us to plan the content of our journal since, the later a review is received, the greater is the imperative to get it into print while it still has some currency.


Publishers of intellectual property books.  The publication of any IP book should be a significant event in its field, not just for the author and publisher but for the likely readership. JIPLP is committed to promoting and improving its book review services and is happy to hear from any publisher who has any comments, ideas or suggestions as to how this might be done.

Monday, 25 July 2011

Breach of confidence claim against ex-employees and consultants

Authors: David Cran and Paul Joseph (Reynolds Porter Chamberlain LLP)

Vestergaard Frandsen A/S and others v Bestnet Europe Limited and others [2011] EWCA Civ 424, 20 April 2011

Journal of Intellectual Property Law & Practice (2011) doi: 10.1093/jiplp/jpr121, first published online: July 23, 2011

The Court of Appeal for England and Wales has considered when a breach of confidence action arises against ex-employees and ex-consultants and the extent to which the ‘springboard doctrine’ can be used to restrain the sale of new products developed with the help of confidential information.

Legal context

The basic principles
A breach of confidence is committed when the following three conditions are met:

  • information is confidential in nature (ie not in the public domain);
  • that information is disclosed to a recipient in circumstances of confidentiality: The question is whether a ‘reasonable man standing in the shoes of the recipient of the information would have realised that upon reasonable grounds the information was being given to him in confidence’ (Coco v A N Clark (Engineers) Limited [1969] RPC 41, at 48) and
  • The information is used by the recipient to the detriment of the discloser.

The ‘springboard doctrine’
The third element will be satisfied if a recipient receives an advantage from the confidential information in question and so gains a head start over others who do not have the benefit of that information (Seager Limited v Copydex Limited [1967] RPC 349, at 368).

Breach of confidence and employment
Faccenda Chicken Limited v Fowler [1986] 1 All ER 617 is the leading case in relation to breach of confidence in an employment setting. In the absence of express contractual provisions, information obtained in the course of a person's employment falls into one of the following three categories:

  • Day to day business trivia—this information cannot be classed as confidential;
  • Information with some confidential element—this information can be protected by confidence during the course of a person's employment, but usually not afterwards; and
  • Truly confidential trade secrets—this information can be protected by the law of confidence for a period after a person's employment and, in some cases, indefinitely.

Notwithstanding this, a person is entitled to use information that is derived from his own acquired knowledge and skill, regardless of whether this information is a trade secret. The test for whether such information should belong to a person or his employer is an objective one based on what a man of ‘ordinary honesty and intelligence’ would believe (Printers & Finishers Ltd v Holloway [1965] 1 WLR 1).

Directive 2004/48/EC
The European Directive on the enforcement of IP rights, at Articles 8 and 10, requires Member States to issue proportionate remedies for the protection of IP rights.

Facts

Vestergaard had developed a polyester mosquito net, impregnated with insecticide, which they sold under the name ‘PermaNet’. Two ex-employees of Vestergaard (Torben Larsen and Trine Sig) set up a company called Bestnet and employed the services of Dr Skovmand who had previously been a consultant to Vestergaard and who had developed the PermaNet product. With Dr Skovmand's help, Bestnet developed a competing produce called ‘Netprotect’.

Larsen and Sig's employment contracts with Vestergaard had contained express terms preventing them from using confidential information after their employment came to an end.

Vestergaard alleged that Netprotect had been developed using confidential information relating to formulae and test results contained in a Vestergaard database. In December 2006, Vestergaard commenced proceedings in the UK against Bestnet, Larsen, Sig, and Dr Skovmand.

The defendants denied that any information from Vestergaard's database was used to develop their Netprotect product and that they had legitimately used Dr Skovmand's own expertise. In addition, they argued that the information was not subject to an obligation of confidence.

Analysis

In a unanimous decision, the Court of Appeal agreed with the High Court that information from Vestergaard's database had been used by the defendants to develop Netprotect and this was not just a case of Dr Skovmand using his general skill and knowledge. In addition, while there was no express contractual term preventing Dr Skovmand from using Vestergaard's confidential information, the Court of Appeal was satisfied that the information in the database amounted to a trade secret (for the purposes of the Faccenda categories) and therefore, it was capable of protection even after Dr Skovmand's contract with Vestergaard came to an end.

However, the Court allowed an appeal by Sig against the High Court's ruling that she was also personally liable for breach of confidence. The Court of Appeal held that she did not have knowledge of the technical information or the fact that it had been used and that, therefore, she received the information in circumstances where no obligation of confidence was present. Despite the claimant's attempt to rely on Sig's employment contract to fix her with liability, Jacob LJ rejected claims that the contract imposed strict liability in relation to confidential information.

Jacob LJ suggested in his judgment that it was possible to imply a term imposing strict liability obligations in respect of confidential information into an employment contract, but only in exceptional circumstances, which were not satisfied here.

The Court also refused to grant an injunction against the defendants’ later-developed products. The High Court had been correct to take account of the differences between the insecticide impregnated in these products and Vestergaard's formulae. Jacob LJ said that the defendants had not received a sufficient ‘head-start’ in producing the later products for the springboard doctrine to apply.

Practical significance

It seems right that the obligations of a consultant, as far as confidential information is concerned, should be analogous to that of an employee, notwithstanding the absence of an express provision in a contract. If consultants were somehow exempt from liability under breach of confidence, this would act as a severe deterrent against companies retaining the services of experts on a temporary or rolling basis.

The proper scope of the springboard doctrine is difficult to ascertain from this judgment. In Vestergaard, breach of confidence was established and an injunction granted against the defendant's earlier products, but not its later versions. The IP Enforcement Directive's guiding principle of ‘proportionality’ was used to justify the Court's view that in applying the springboard doctrine, a head start should be ‘substantial’ before an injunctive remedy is granted. Although the Court's reasoning was phrased in terms of enforcement and remedies, it is difficult to avoid the conclusion that the directive is now beginning to affect substantial law of member states—and the reliance on the European doctrine of ‘proportionality’ to inform effectively the scope of infringement is a clear indication of this.

Friday, 22 July 2011

Bits and pieces -- and some ideas for articles

The August 2011 issue

The print version of the August 2011 issue of the Journal of Intellectual Property Law & Practice (JIPLP) has been dispatched and is arriving as I write. You can check the contents of this issue here. If you've not received your copy in the next day or so, blame the post!

The online version of this issue has been available to subscribers since Friday 8 July (you can read the Editorial here even if you're not a subscriber) and its contents would have been placed online some weeks earlier than that under JIPLP's Advance Access service -- which online subscribers can enjoy as part of their subscription package, while non-subscribers can gain access on a pay-to-read basis.

Articles in the journal

JIPLP commissions most of its content and also receives a number of unsolicited features.  Whether you are commissioned to write a piece, want to be commissioned or have just written something and are planning to submit speculatively, the person you should be dealing with at first instance is Sarah Harris, who is the Content Commissioning Editor: you can email her here.  It is really important to channel questions, ideas and offers to write through Sarah, since she maintains a database of articles submitted, promised or hoped-for  and can tell you whether the contribution you want to make has already been duplicated.

If you are looking to write something and are unsure what to write about, any of the following are worth thinking about:
  • Anything to do with client privilege and disclosure/discovery of documents in IP proceedings;
  • Strategic and legal issues involving utility model/petty patent protection;
  • Anything on the assessment of compensatory damages and the recovery of an infringer's profits, particularly on how estimates of recovery affect a decision to sue;
  • Civil actions to protect confidential information, both commercial and personal, against cyber-attacks and phone hacking;
  • Whether the Cloud has any significant impact on the legal regime relating to IP on the internet.
Further topics will be suggested soonb. In the meantime, if any of these topics appeals to you, irrespective of jurisdiction, please contact Sarah Harris at first instance.

Monday, 18 July 2011

Coping with plagiarism and other ethical issues

As befits a journal such as JIPLP, which has an inherent interest in all matters pertaining to intellectual property infringement and enforcement, plagiarism and the proper acknowledgement of both authors and sources are matters of no merely idle concern. JIPLP's membership of the Committee on Publication Ethics (COPE) is therefore a natural consequence of its interest.

What does COPE do, and how does it do it? Here's some information from the Committee itself:
"As your journal is a member of the Committee on Publication Ethics (COPE), we would like to welcome you and take this opportunity to explain a little more about COPE, the benefits of membership and the features of our website. 
COPE was founded in 1997 by a group of journal editors concerned about publication misconduct, e.g. plagiarism, redundant publication, fraudulent data, unethical research, breaches of confidentiality, etc. Originally a loose gathering of a few individuals, COPE is now a registered charity with over 6000 members across all disciplines. 
Membership in COPE sends a signal to authors and reviewers that your journal upholds the highest ethical standards, that you intend to follow COPE’s Code of Conduct and that you will take appropriate action in cases of possible misconduct. Benefits of membership include:
• Ability to bring cases to the quarterly COPE Forum for advice (in person or by telephone); minutes (including advice and follow-up information on all cases discussed) are available to all COPE members;
• Facility to obtain confidential advice on sensitive ethical issues between Forum meetings from COPE’s chairman or officers;
• Free attendance at annual seminars (held in the UK and USA);
• Quarterly newsletter;
• E-learning course on publication ethics (under development);
• Publication ethics audit tool.
The COPE Forum meets every three months in London, UK and is open to members and appropriate guests. Members are invited to submit cases in advance, which are anonymised before circulation. Cases are then discussed during the Forum, with advice given on appropriate action. Members are asked to provide feedback about their cases at subsequent meetings. 
All cases submitted to the Forum (suitably anonymised and without any information about the submitting journal) are entered into the database, which may be helpful in answering queries about cases similar to those that have been discussed before and will also form a useful research tool".
Membership of COPE does not preclude readers and authors from letting us know if they read or see anything untoward in our pages.So if you see anything that looks wrong, please let us know as soon as possible.

Friday, 15 July 2011

Use of a trade mark on a website as trade mark use in Australia

Authors: Mark William and Tim Golder (Allens Arthur Robinson Patent & Trade Mark Attorneys)

International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339, 8 April 2011

Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/jpr096, first published online: 7 July 2011

The Australian Federal Court has confirmed the factors to be considered when determining whether use of a trade mark on an ‘international’ website constitutes use of the trade mark in Australia. The case highlights the difficulties presented in the online environment when a mark is owned by different parties in different jurisdictions.

Legal context

A person infringes a registered trade mark by using as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered. In this case, while not strictly an issue of infringement, the Court was required to consider whether use of an identical mark on an ‘international’ website constituted use of the mark in Australia, such as to breach an undertaking provided by the respondent (and in effect, would have constituted a trade mark infringement).

Facts

The applicant in these proceedings, an Australian company, owned Australian trade mark registrations for AFFINAGE and AFFINAGE INFINITI. The first respondent owned the registered mark AFFINAGE in the UK and 20 other countries. The parties entered into an agreement to split the geographical distribution of AFFINAGE products.

Following a mediation arising from separate actions brought by each party against the other in Australian courts in 2010, the parties signed a Deed of Settlement, which included an undertaking by the UK company as follows:
The Respondents undertake not to use AFFINAGE, INFINITI, AFFINAGE INFINITI, or AFFINAGE SALON PROFESSIONAL as a sign in connection with the importation, marketing, sale or manufacture in Australia of hair care products including hair colours and dyes.
In January 2011, the Australian company's solicitor undertook a Google search for ‘Affinage’ and noticed ‘Affinage Salon Professional’ at the website www.affinage.com. Entering the website, the solicitor accessed a landing page in which ‘Affinage’ appeared as a type banner with ‘Salon Professional’ as an added smaller subscript. The page included a ‘country box’. Above the box was the statement ‘Select Australia for information on Australia and Asian Pacific countries’. When the solicitor selected Australia in the country box, he was taken to a page headed ‘ASP’. Under the ‘Profile’ tab was the following statement:
In 1996 [IHC UK] conceived, created and launched the premium hair care brand AFFINAGE. Originated as line of hair colour, the AFFINAGE brand grew rapidly to include [reference to other types of product] … Now we are introducing our exciting new hair care brand, ASP, to the Australian and Asian markets. Having already signed distribution agreements with a number of companies we look forward to fantastic success in 2011.
Under the heading ‘World Class, Worldwide’, the following statement was made:
Today our products are sold in over 50 countries—across Europe, Africa, the United States, South America and the Asia Pacific. Our brands are marketed globally by {IHC UK} and through its associated companies in the USA and Australia. Global distribution is achieved through a worldwide network of wholesalers and specialist distributors.
At the bottom of the page was a map of the world in which the UK was indicated as the ‘Worldwide HQ’ of ASP, ‘ASP USA’ was designated in the USA, and ‘ASP Australia’ was designated on the Australian continent.

Analysis

The Court held that the website breached the undertaking in the Deed of Settlement, and granted an injunction requiring removal of the ASP element of the website at www.affinage.com. The court also found that, despite modifications to the website made by the respondents after the proceedings commenced (whereby ‘Australia’ no longer appeared in the drop-down list for countries under AFFINAGE, but only under ASP), the website still constituted a breach of the undertakings.

The Court considered the elements which determine whether use of a sign of a website constitutes use of the sign in Australia. He drew an analogy between the present case and Ward Group Pty Ltd v Brodie & Stone plc [2005] FCA 471 where Merkel J said:
In summary, the use of a trade mark on the internet, uploaded on a website outside of Australia, without more, is not use by a website proprietor of the mark in each jurisdiction is downloaded. However, … if there is evidence that the use was specifically intended to be made in, or directed or targeted at, a particular jurisdiction then there is likely to be a use in that jurisdiction when the mark is downloaded. Of course, once the website intends to make and makes a specific use of the mark in relation to a particular person or persons in a jurisdiction there will be little difficulty in concluding that the website proprietor has used the mark in that jurisdiction.
In the present case, there was little doubt that the website was directed at Australian consumers, given the Australia-specific website that was accessed by selecting ‘Australia’ in the country box.

The Court also held that use of the phrase ‘as a sign’ in the undertakings contemplated use of the word AFFINAGE as a trade mark; this use of the word, on both the original and modified website, was more than simply a reference to the history of the products in Australia: it was used as part of the promotion of the goods worldwide, including Australia.

The primary factors that determine whether use of a mark on a website constitutes use in Australia appear to be that the use was specifically directed or targeted at Australian consumers, and that the mark must be downloaded in Australia. This raises two interesting questions.

First, what is the position if the website is directed to Australian consumers but there is no evidence of an Australian purchase? In Ward, evidence of a trap purchase was disregarded as being a purchase with the consent of the trade mark owner. However, in the present case, the Court ignored the fact that the evidence of the download was a downloading by the applicant, and instead focused on the fact that the downloading could occur in Australia. This seems to be a far more reasonable approach: a mark applied to goods in a shop window is use of the mark as a trade mark regardless of whether anyone walks by the window, let alone if anyone is enticed into the shop to make a purchase.

Secondly, what is the position if the website is not directed to Australian consumers, but an online purchase is made in Australia from that website? It is difficult to see why the trade mark owner's intention is relevant, given that the High Court recently said in E & J Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15 that use of a mark in Australia was sufficient to defeat a removal application, even though the trade mark owner had no knowledge that its goods found their way into Australia.

In any event, it is submitted that in such circumstances, the issue of whether the mark has been used in Australia should be decided on the basis of contract formation. In Nordstrom Inc v Starite Distributors Inc [2008] ATMO 11, it was held that use of a mark in Australia (in an online context) could not be demonstrated without specific proof that the goods were ordered from Australia. Proposed changes to the Australian Electronic Transactions Act will create the assumption that, unless clearly indicated to the contrary, an electronic proposal to form a contract (such as an offering of goods on a website) will be considered an invitation to treat. As a result, a contract will be formed in Australia when an online order is placed by a consumer in Australia and the acceptance of the order is confirmed by the website operator. Such formation of a contract should constitute trade in Australia, sufficient to evidence use of the mark in Australia (contrary to the postal acceptance rule which applies to ‘snail mail’ correspondence where the contract would be finalised—and thus the trade completed—in the overseas jurisdiction).

Practical significance

The decision confirms the elements to consider when determining whether a sign used on a website is being used in Australia, and highlights the difficulties faced when a mark is to be used by two or more parties in different jurisdictions. Significantly, it will not be a defence to an allegation of infringement to say that the mark is being used only to refer to an historical position. Such ‘historical’ use of the mark may still constitute infringement if the website does not clearly explain that the reference is purely historical, and that there is no longer a connection between the website owner and the mark in the particular jurisdiction.

The decision serves as a useful reminder to parties who have entered agreements or who plan to make acquisitions which will allow for the use of the same marks by different parties, to ensure that the use of trade marks on websites is addressed in all agreements, and is continually monitored.

Tuesday, 12 July 2011

US reissue procedure can fix failure to include dependent patent claims

Author: Charles R. Macedo (Amster, Rothstein & Ebenstein LLP, New York, NY)

In re Tanaka, No. 2010-1262, US Court of Appeals for the Federal Circuit, 2011 US App. LEXIS 7739, 15 April 2011

Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/pr089, first published online 12 July 1011.

US reissue proceedings may be used to add additional dependent patent claims even if none of the issued claims are changed.

Legal context

Once a US patent issues, a patentee may seek to correct certain errors made without deceptive intent that are deemed to render the issued patent either wholly or partly inoperative or invalid. In In re Tanaka, a divided panel of the US Court of Appeals for the Federal Circuit confirmed that a reissue proceeding may be used to add dependent claims as a hedge against possible invalidity of the original claims. Tanaka is likely to reinforce the use of reissue proceedings by patentees who would like to strengthen their patent protection without sacrificing claim scope and damages for previously issued claims.

Facts

In July 2000, US Patent No. 6,093,991 (the ′991 patent) issued with one independent claim (claim 1) and six dependent claims (claims 2–7).

Exactly two years later, Tanaka filed reissue application Serial No. 10/201,948 (the ′948 application) with respect to the ′991 patent at the US Patent and Trademark Office (PTO), seeking to broaden the scope of independent claim 1 of the ′991 patent. In support of the application, Tanaka filed a declaration stating that ‘the originally-presented claims did not adequately define the invention because they were more specific than necessary’ and thus ‘the claims of the original patent cover less subject matter than we were entitled to claim’.

During the prosecution of the ′948 application, Tanaka gave up his efforts to seek to broaden claim 1 and eventually presented for reexamination un-amended original claims 1–7, and a new dependent claim (claim 16), which depended from claim 1. In September 2007, Tanaka submitted a substitute declaration stating: ‘because I did not fully appreciate the process of claiming according to U.S. practice, I did not realize that I had claimed more or less than I was entitled to claim’ and ‘the originally presented claims did not adequately define the invention because they were more specific than necessary’.

Ultimately, the Examiner rejected claims 1–7 and 16 with the following explanation:
The nature of the defect is that the error specified in the oath filed 9/24/2007 is not an error correctible by a reissue. The Applicant has not specified an error that broadens or narrows the scope of the claims of issued patent 6093991. The original claim 1 remains in the current reissue application, therefore the broadest scope of the patent remains the same.
This rejection was made final, and Tanaka appealed to the US Board of Patent Appeals and Interferences.

On appeal to the Board, a seven-judge panel issued a precedental opinion affirming the Examiner's rejection. Ex parte Tanaka, No. 2009-000234, 2009 Pat. App. LEXIS 24 (BPAI 9 December 2009) (Tanaka I). Tanaka I phrased the issue to be decided as follows:
Has the Appellant shown that the Examiner erred in determining that the presentation of a narrower claim in a reissue application that still contains all of the original patent claims does not present the type of error correctible by reissue under 35 U.S.C. §251?
The Board found the examiner did not err, and that under its analysis of the statute, ‘the presentation of a narrower claim in a reissue application that still contains all of the original patent claims is not an error correctible by reissue under 35 U.S.C. §251’.

In addressing this issue, the Board discussed In re Handel, 312 F.2d 943 (CCPA 1963), a decision by the US Court of Customs and Patent Appeals (a predecessor court of the Federal Circuit, whose precedent is binding on the Federal Circuit). The Board acknowledged that in footnote 2 of Handel, the Handel court commented on the examiner's rejection in that case, which addressed the same issue raised by the ′948 application, but came to a different conclusion: ‘[t]he narrower appealed claims are simply a hedge against possible invalidity of the original claims should the prior use be proved, which is a proper reason for asking that a reissue be granted’. Despite these express statements, Tanaka I rejected as ‘dictum’ Handel's guidance on this very issue:
As such, the CCPA's tacit approval in a footnote that it is proper to seek narrower claims in a reissue as a hedge against the possible invalidity of the original claims is a voluntary opinion made by the court which falls outside the holding of the court in Handel and which was made without argument or full consideration of the point after briefing by the parties. In other words, this statement in footnote 2 of Handel is dictum.
Tanaka I also discussed Hewlett-Packard Co. v Bausch & Lomb, Inc., 882 F.2d 1556 (Fed. Cir. 1989), which Tanaka I recognized ‘noted’ that ‘[a]lthough neither “more” nor “less” in the sense of scope of the claims, the practice of allowing reissue for the purpose of including narrower claims as a hedge against the possible invalidation of a broad claim has been tacitly approved, at least in dicta, in our precedent’. Nonetheless, Tanaka I concluded that ‘the court in Hewlett-Packard did not squarely address the issue before us in the present appeal’.

Tanaka I also discussed In re Muller, 417 F.2d 1387 (CCPA 1969), which the Board rejected as not fully addressing the present issue:
The court in Muller did not address, even in dicta, the issue of whether the failure to present narrower claims is an error correctible under §251 “by reason of the patentee claiming more or less than he had a right to claim in the patent.” Rather, the court's holding in Muller was limited to a holding that the Board erred in determining that the patentee made a deliberate renunciation of subject matter during prosecution of the original patent. Id. (declining to reach the question of whether a deliberate non-election of species can be remedied by reissue).
Finally, Tanaka I turned to the Manual of Patent Examining Procedure (MPEP) §1402, which the Board concluded interprets section 251 as not allowing ‘for a reissue application in which the only error specified to support reissue is the failure to include one or more claims that is/are narrower than at least one of the existing patent claims(s) without an allegation that one or more of the broader patent claims(s) is/are too broad together with an amendment to such claim(s)’. The Board noted that ‘[s]ince July 2008, the 5,000+ USPTO examiners have applied the above stated MPEP reissue policy to determine proper and improper grounds for filing reissue applications’. Thus the Board on its own interpreted section 251 to ‘disallow[s] reissue applications that simply add narrow claims to the reissue patent when no assertion of inoperativeness or invalidity for the reasons set forth in §251 can be made by the patentee.’

Tanaka appealed the Board's decision to the Federal Circuit.

Analysis

Section 251 of the US Patent Act (35 USC), which governs reissue proceedings, states:

Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue. 35 USC §251, quoted in In re Tanaka, No. 2010-1262, 2011 US App. LEXIS 7739, at *6–7 (Fed. Cir. 15 Apr 2011) (emphases supplied by the court) (Tanaka II).
On appeal, Judge Linn, writing for the majority in Tanaka II, found against the PTO, concluding ‘that the Board's determination is contrary to longstanding precedent of this court and flies counter to principles of stare decisis’. Tanaka II recognized that section 251 ‘imposes two requirements for properly invoking the reissue process’:
The original patent must be ‘wholly or partly inoperative or invalid’.

The ‘defective, inoperative, or invalid patent’ must have arisen ‘through error without deceptive intent’.
Tanaka II found ‘[t]here is no dispute in this case that any defect arose without deceptive intent’.

Tanaka II recognized that, in Handel, the CCPA ‘clearly stated’ that ‘adding dependent claims as a hedge against possible invalidity of original claims “is a proper reason for asking that a reissue be granted”’. After discussing Muller and Hewlett-Packard in addition to Handel, Tanaka II concluded that the statements in Handel, Muller, and Hewlett-Packard are more than ‘a passing observation’: ‘it was a considered explanation of the scope of the reissue authority of the PTO in the context of a detailed explanation of the reissue statute. Based on this court's adoption of that rule and its adherence to the rule in both Muller and Hewlett-Packard, this court rejects the Board's contrary ruling’.

Tanaka II also rejected the assertion that the omission of a narrower claim from an original patent does not constitute an error under §251 because the omission of a dependent claim does not render the patent inoperative. In particular, Tanaka II found that the omission of a narrower claim from a patent can render a patent partly inoperative by failing to protect the disclosed invention to the full extent allowed by law.

Tanaka II further rejected the premise that adding a single dependent claim to the originally issued claims is equivalent to the disallowed practice of filing a ‘no defect’ reissue. In particular, Tanaka II held that ‘[a]pplying for a reissue that adds only narrower claims without amending any of the original claims is not the same as a “no defect” reissue'.

Finally, Tanaka II rejected arguments by Teva, an amicus, contending that permitting the addition of narrower dependent claims by reissue would be against the public policy of allowing the public to rely upon what was actually claimed. In particular, Tanaka II recognized that under the equitable intervening rights statute, 35 USC §252, a court could fashion remedies to protect public investments made before the reissue. Thus the majority in Tanaka II followed the prior statements of its predecessor court and the Federal Circuit in Handel, Muller, and Hewlett-Packard regarding the addition of dependent claims being within the scope of section 252, and reversed the Board.

In his dissenting opinion, Judge Dyk confirmed he ‘would affirm the Board's holding that the addition of a narrower claim in a reissue application is not a proper basis for reissue under 35 U.S.C. §251 if the application still contains all of the original patent claims’. Judge Dyk, unlike the majority, did not feel bound by the statements in Handel, Muller, and Hewlett-Packard, which, in his view, ‘never squarely addressed the issue, and have at most assumed the applicability of [a particular] standard’.

Practical significance

In Tanaka II, the majority rejected an interpretation of the reissue statute, which has been incorporated into the MPEP since at least 2008, as contrary to the statement of law found in the precedent of the Federal Circuit and its predecessor court for over fifty years. Considering the divergent views expressed by the majority, Handel, Muller, and Hewlett-Packard, on the one hand, and the PTO, the Board, and the dissent, on the other hand, it is likely that this issue may be revisited either en banc by the Federal Circuit and/or by the Supreme Court in the not too distant future.

Friday, 8 July 2011

The August issue -- and the great design conundrum

Although we are only one week into July, the August 2011 issue of the Journal of Intellectual Property Law & Practice is already available to subscribers online. You can check the contents of this issue here. Non-subscribers are reminded that they can purchase access to JIPLP features on a pay-as-you-access basis.

The editorial for this issue focuses on the vast international muddle which is design protection and asks what can be done about it.  It reads as follows:
Design protection: back
to the drawing board?
 
"The great design conundrum

What should be done about the protection of designs? Practitioners, judges, and academics cannot even begin to discuss this without demanding further particulars. They will, for example, ask: ‘What do you mean by “design”?’; ‘Are you referring to industrial, aesthetic, functional, or ornamental creations?’. And they will not be wrong to do so, since, unlike trade marks, patents, and even copyrights, design law seems to have no coherent and generally accepted theme in terms of its subject matter and objectives.

A quick survey of design law reveals the degree of chaos to which this topic has sunk. Designs may be registered or unregistered; they may be protected by patents or by sui generis rules; they are sometimes registrable as trade marks, other times protected by regular artistic copyright. The Paris Convention on the Protection of Industrial Property offers little guidance. The Agreement on the Trade-related Aspects of Intellectual Property Rights (TRIPS) contains less on design protection than on the protection of the names of alcoholic beverages, and the Office for Harmonisation in the Internal Market, which administers the registered Community design system, appears to attract unmeritorious and indeed theftuous registrations that cause great inconvenience to honest traders.

Within industry itself—big industry at any rate—one rarely hears calls for better or more consistent design protection. As between sectors there is no apparent harmony of approach either. In one form or another, and in one jurisdiction or another, design protection may cover, or refrain from covering, subject matter as disparate as fashion garments, semiconductor topographies, kitchen utensils, lamp covers for street lights, and the organization of modular units for a temporary bus station.

Small- and medium-sized enterprises (SMEs), as well as micro-enterprises, have been increasingly calling for more and better protection for designs. Yet it is unclear whether this is even worth achieving for them. In so many instances, the protection accorded by a design, whether registered or not, is so narrow that a competitor can lawfully and confidently make a few changes and sell a similar product without fear of legal action. Designs take time and effort to register and are usually of short-term protection unless renewed. Litigation is expensive and uncertain. So why bother at all?

Yet if design protection is not an adequate barrier to market entry by me-too competitors and it is expensive to obtain and enforce, it is still desirable—if only because it sends out the message that a design is an intellectual asset and enables even the smallest, least resourced SME to claim the moral high-ground and say ‘I've created this through my own effort and ingenuity; you've taken it for nothing and are nothing but a commercial parasite’. While many members of the public view shoplifting from big stores and major chains as a harmless activity, a victimless crime, and there is a widely held view that anything available online is ‘fair game’, it is possible to stir up sympathy for the underdog by drawing attention to the well-documented help-yourself activity which characterizes the attitude of many larger businesses today.

The point is this. By stirring up sympathy for the designer as underdog, we can do something to influence public attitudes towards IP. Only where, and when, the misappropriation of the creative products of others is generally regarded as morally wrong will we start to change things.

In a recent seminar at the House of Commons in London, Germany was heralded as a country in which the populace appears more than most to respect IP; it is also a country which has developed a sophisticated civil wrong of unfair competition. The psychological dimension of even the name ‘unfair competition’ cannot be underestimated, since it sends out a message that it governs conduct which is inherently unfair. There is no such message in design law, where the word ‘unfair’ is not found and which, both in Europe and in many other jurisdictions, buries its principles beneath a morass of technical detail from which morality struggles to emerge".

Wednesday, 6 July 2011

Richly Diverse (book review)

Copyright and Piracy: an Interdisciplinary Critique, edited by Lionel Bently, Jennifer Davis and Jane C. Ginsburg, Cambridge University Press, 2010 ISBN: 9780521193436, Hard cover, 471 pp. Price: £70

Reviewer: Charlotte Waelde (University of Exeter)

Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/jpr097, first published online: July 6, 2011

Take a topical subject, copyright, and piracy; add three world renowned legal experts, Lionel Bently, Jennifer Davis, and Jane Ginsburg; stir in lawyers, economists, historians, technologists, sociologists, cultural theorists, and criminologists; and slice according to history, comparative law, economics, linguistics, computer software, information studies, literature, art, sociology/music, and criminology. Outcome: a wonderfully rich and thought-provoking set of essays which make a significant contribution to our understanding of copyright infringement.

The methodology employed by the editors has been to pair essays—a non-lawyer with a lawyer. Mostly, the non-lawyers have taken first place with the comment being made by the lawyer. In general, this has been successful. Tanya Aplin for instance in her chapter ‘Reflections on measuring text reuse from a copyright law perspective’ comments on that of Paul Cough ‘Measuring text reuse in the news industry’ and in so doing skilfully pulls threads and themes from Paul's work in building her own. Jonathan Griffiths is similarly adept in drawing out points of agreement and of difference between his ideas in ‘Copyright's imperfect republic and the artistic commonwealth’ and those of Daniel McClean which are presented in ‘Piracy and authorship in contemporary art’. Daniel's own interdisciplinarity as an independent art curator and a lawyer shines through in his chapter. So the methodology certainly meets the editors’ self-imposed task and results in a deep and reflective approach to the multi-faceted issues raised by copyright infringement, probably more so than has hitherto been the case in other studies. It would be an interesting, and challenging, step to get the discipline experts to write one chapter between them.

Does the collection also meet the desire to address the ‘vital and overarching question of whether strong copyright laws, rigorously enforced impede rather than promote creativity?’ This is a big question—and one that lawyers argue about but can often find it difficult to produce evidence in support. How, after all, does a lawyer actually know that creativity is being impeded? Just because an individual can't do one thing with an existing work does not mean that they can't do something else. The ‘something else’ might not be what they had originally intended but does that make it any less creative? So do the other disciplines help to shed some light on this question? However, I digress a little.

I have always found the use of the term ‘piracy’ in connection with copyright infringement somewhat challenging. It seems to turn all of us into pariahs (unless you first think of Johnny Depp). So the inclusion of chapters on ‘Nineteenth-century Anglo-US copyright relations: the language of piracy versus the moral high ground’ by Catherine Seville paired with ‘Language, practice and history’ by Adrian Johns are most welcome in helping to shed some light on this area. Relatedly I also really enjoyed the clutch of chapters dealing with copyright and plagiarism: Isabella Alexander's chapter on ‘Inspiration or Infringement: the plagiarist in court’, and her second chapter ‘The genius and the labourer: authorship in eighteenth-and nineteenth-century copyright law’ responding to Nick Groom's chapter ‘Unoriginal genius: plagiarism and the construction of “Romantic” author’. The three chapters give the reader much food for thought on the interaction between copyright infringement and plagiarism.

Delving deeper into the book, David Lefranc, translated by Sébastien Oddos, and Jane Ginsburg share a lively debate on the origins of contrefaçon in French Law in ‘The metamorphosis of contrefaçon in French copyright law’ and ‘A common lawyer's perspective on contrefaçon’, respectively. In a most careful and insightful chapter ‘Copyright infringement, “free-riding” and the lifeworld’ (and in a change to the norm of having the main chapter written by a non-lawyer), Anne Barron gives an account of the law and economics approach to copyright infringement and its limits to which Jonathan Aldred, an economist, responds in his piece ‘Copyright and the limits of law-and-economics analysis’ in which, while taking issue with a few points made by Barron, shares her concerns in relation to the central tenet of her argument over the limitations of the law and economics approach. We move to music in ‘Reggae open source: how the absence of copyright enabled the emergence of popular music in Jamaica’ by Jason Toynbee twinned with ‘Free-riding on the riddim’? ‘Open source, copyright law and reggae music in Jamaica’ by Johnson Okpaluba, by virtue of which we are privy to a sprightly argument as to the effect of copyright on the development of reggae in Jamaica; and on to an examination of the motivations for file sharing in ‘Copyright infringement: a criminological perspective’ by Loraine Gelsthorpe paired with ‘Towards a clearer understanding of the file-sharing phenomenon? Comments on a criminological perspective’ by Shira Perlmutter. Other pairings include Alan Durant on ‘“Substantial similarity of expression” in copyright infringement actions: a linguistic perspective’ with Graeme Dinwoodie ‘Refining notions of idea and expression through linguistic analysis’; and Jon Crowcroft on ‘Copyright, piracy and software’ with Jennifer Davis with ‘Of plots, puddings and draught-excluders: the law as it applies to the infringement of computer programs’.

So, having read this rich and diverse set of essays, are we any closer to being able to answer the question that was posed at the outset of the book? Do strong copyright laws, rigorously enforced, impede rather than promote creativity? Well, I don't know. But what I do know is that I thoroughly enjoyed this collection and certainly regard it as a ‘must have’ for any copyright scholar and fully expect to see it enter the bibliographies of the theses and dissertations of the many students who are passionate about this subject. As the reader of this review will gather, I highly recommend it for any copyright collection.

Tuesday, 5 July 2011

Calling all authors

I'd just like to take this opportunity, through the medium of this weblog, of sending a brief message to our authors.
  • First, I'd like to thank you for your hard work, which has helped to give JIPLP a reputation for quality content. Writing an article -- which many people regard as a challenge -- is actually the easy bit. Polishing it, addressing peer reviewers' concerns, checking the proofs -- these are unglamorous tasks which must be tackled before the raw material of the author's ideas and perceptions is repackaged as an article, a current intelligence note or a review.
  • Secondly, I'd like to remind you that, while JIPLP has a policy of actively commissioning articles, the journal is always willing to receive suggestions from authors regarding topics or jurisdictions that are not often covered by IP publications. No author should need to feel that his or her particular area of interest or zone of professional activity is a disqualification from proposing a topic or writing on it.
  • Thirdly, this is a general reminder, to a number of current authors who have promised to let us have their work-in-progress when the summer comes, that the summer has come!
All inquiries concerning possible articles and current intelligence notes should be directed at first instance to the Commissioning Editor, Sarah Harris, since she can confirm such mundane matters as whether an article or note on a particular issue has already been received or commissioned by anyone else. Sarah can also advise on the mechanical side of things: deadlines, how the peer review process works, the form in which an article must be submitted online, when to expect to receive proofs and so on.  If you want to copy me in to your email to Sarah, please feel free to do so: my email is jjip@btinternet.com

Sunday, 3 July 2011

The Puzzle of a Muzzle: copyright, culture and censorship

I have received a very thought-provoking piece from Christophe Germann, who is looking for responses while he considers how to take this paper further. Christophe is an attorney at law in Geneva, as well as a visiting research fellow at the Law Schools of the University of Oxford and Birkbeck College, University of London.  He has recently completed a study for the European Parliament in which he further elaborates here on the topics addressed in this contribution.

If you'd like to make any pertinent suggestions or just tell Christophe what you think, please email him here or post your comments below.
"Cultural diversity against piracy:
Variable geometry for copyright duration?

The Puzzle of a muzzle

In 1996, the American civil rights activist Jessie Jackson met representatives of the Hollywood majors to complain that black artists were unduly underrepresented at the Oscars. This prize provides high marketing value both for the awarded individuals and for their films. Jackson’s protest brought media attention to what he called "institutionalized racism" within the motion picture industry. The protest stemmed from the lack of minority nominations for awards that year. Of 166 nominees, only one was non-White. Jackson denounced "cultural bias” and “cultural lockout" and announced: "We're really trying to raise consciousness... At a certain point you have to organize and fight back." He was eventually successful in bringing more diversity on screen. But the story should not end here: I believe that art and entertainment, thoughts and emotions from all over the world deserve the same access to the audience everywhere.

Hollywood's Columbia Pictures created the fake film reviewer David Manning to praise its films. Newsweek revealed this cheating in June 2001 that angered some movie goers in the United States to the point that they launched a class action lawsuit against the film studio, and they won. It was probably the most dishonest caricature of what economist Arthur De Vany labeled the “blockbuster strategy” and that he described as a marketing strategy suggesting the movie-going audience can be “herded” to the cinema: “The blockbuster strategy is based on the theory that motion picture audiences choose movies according to how heavily they are advertised, what stars are in them, and their revenues at the box office tournament.”[1]

More recently, a real film reviewer, A. O. Scott, lamented in the New York Times the invisibility of great foreign films in American theaters: “Of course, worthy films are passed over all the time, but such puzzling and capricious neglect happens so often that it can be taken as a yearly reminder of the American film establishment’s systematic marginalization and misapprehension of much of world cinema.” In a contribution of 26 January 2011 “A Golden Age of Foreign Films, Mostly Unseen” he complained about “the peculiar and growing irrelevance of world cinema in American movie culture, which the Academy Awards help to perpetuate.”

Most Americans consider freedom of speech as one of the highest values protected under their Constitution. Europeans equally dislike censorship and invoke article 10 of the European Convention on Human Rights, the equivalent of the First Amendment, stating that everyone has the right to freedom of expression that, subject to certain limitations, includes “freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers.” A similar rule applies in all other true democracies worldwide. In various jurisdictions, notably in South Africa, citizens can enforce this right not only against the State, but also vis-à-vis private entities.

Now, is there a case against “marketing censorship”, meaning censorship not from public sources, but from private ones? - Tunisia and Egypt experienced over the last three decades strong public censorship from their kleptomaniac former presidents and their cliques. What about us in Western democracies? - Let me suggest that we are subject to censorship of a private kind.

Let me apply this idea to “entertainment” or, in a more European jargon, to “culture”, and go back to the film industry to articulate the issue and a possible solution. Let me contend that the same considerations are valid also for the book and music industries, and even for the media in general. Further, that they apply both to the analogue and the digital worlds. And let me quote Michel Foucault to add a key piece to the puzzle of muzzle: “You act on reality by acting on its representation.”

The United States lost the Vietnam War in reality. In its representation on screen, however, they seem to have won it. How many Vietnam war films could audiences in the United States and abroad watch over the last decades that were authored by Vietnamese? To what extent did this one-sided view prepare mainstream public opinion for new wars in Afghanistan and Iraq?

40 percent to make and 60 percent to sell

Disproportionately high standards of intellectual property protection are incentives to disburse excessive expenditures in advertising for contents. They are the primary means for market domination. This reality is detrimental to the creation, production and dissemination of films, books, music and other cultural expressions that do not enjoy comparable investments in attracting the public's attention. In other words, excessive copyright, trademark and trade name protection generally contribute to marginalizing and excluding contents and aesthetics that are culturally different from the economically dominant ones. They do not enjoy competitive marketing power even when they have the same or more audience appeal, and this is how the muzzle works in our very own neighborhood. A few top executives and their apparatchiks in the film, book and music industries dispose of highly concentrated power on marketing, and they abuse this power to culturally discriminate. They impose their preferences upon you and me and everybody around the world, and muzzle all the rest. They are our Ben Ali's and Hosni Mubarak's censorship apparatus.

Copyright and related intellectual property rights protect, on average, 40 million dollars of creative activities and 60 million dollars of marketing per Hollywood film if we rely on the cost figures of the major film studios' annual outputs based on the Motion Pictures Association of America's market statistics.

In the film, book, music and media industries, the dogma still prevails that the stronger copyright and trademark protection is, the better for everybody. Many artists, law and policy makers and civil society activists who are concerned about the protection and promotion of the diversity of cultural expressions have a blind eye to the intellectual property system. They only see the benefits of this system for culture and entertainment while ignoring its negative sides.

In 2007, the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions entered into force. The United States stayed out of this agreement although it would substantially reinforce the First Amendment if one correctly reads its article 7. Pursuant to this core provision, the parties to the Convention shall endeavor to create in their territory an environment that encourages individuals and social groups to create, produce, disseminate, distribute and have access to their own cultural expressions, as well as to diverse cultural expressions from within their territory and from other countries of the world. Furthermore, the parties shall also endeavor to “recognize the important contribution of artists, others involved in the creative process, cultural communities, and organizations that support their work, and their central role in nurturing the diversity of cultural expressions.” Phrased differently, the countries shall contribute to empowering individuals and social groups to create cultural expressions such as films, books and music, and to have access to the diversity of these expressions. Very importantly, they should consider artists and others involved in the creative process as key contributors to the diversity of cultural expressions.

I submit that a reform of the copyright system inspired by this provision could lead to a better world with less cultural discrimination.

The widespread perception of the value of intellectual property protection among creators focuses on economic rights: copyright is an essential source of revenue. While this understanding is generally correct on the micro level, it neglects the fact that, on the macro level, copyright is the main instrument to secure investments for advertising of contents distributed by heavily concentrated corporations. Artists whose works do not enjoy competitive marketing are thus silenced in the prevailing system.

One of the main rationales underlying the grant of intellectual property rights is to provide incentives for creative achievements. For this reason, creators, producers, distributors and their investors advocate high standards of copyright protection. Too much protection, however, is detrimental to the interest of creators and producers who are not backed by strong distributors and investors, and to the interest of the users and society at large. This is particularly true with respect to the huge accumulation of capital fueling the production and distribution of the Hollywood majors' films. These investments, which are protected and, thus, induced by intellectual property laws, are channeled to marketing rather than creative efforts. Ultimately, they drive most of the Hollywood oligopoly’s competitors out of the market.

What about copyright and freedom of speech? - When copyright essentially serves to amplify the voices of the loudest, and silence all other voices on the market place, it has indeed a lot to do with freedom of speech. The show must go on, but let variety be its spice.

A new deal: less copyright for more marketing

Concretely, I submit that policy and law makers should re-design some core aspects of copyright and related intellectual property rights in such a way that these rights become more workable for individual creators and small and medium sized producers. This means developing new safeguards against the not so subtle forms of cultural discrimination resulting from the abuse of dominant positions in the market. This domination is essentially tributary to excessive levels of intellectual property that protect predatory advertising.

Intellectual property rights can grant cultural players an indispensable independence from public power: the states, their bureaucracies and experts. This is a lesson to be learned especially in Europe. It is equally applicable to liberal and authoritarian regimes as well as to wealthy and developing economies. I therefore reject a complete abolition of intellectual property protection proposed by certain scholars such as the Dutch political scientist of the art Joost Smiers.[2] The lesson for the United States is to constrain abuse of private power via a better intellectual property regime.

The combined effects of the Hollywood oligopoly's marketing power on one side and some rich democracies' covert control of contents via “selective” state aid on the other side are highly damaging to freedom of speech. The rights of artists and of the public who refuse either diktat need protection.

A “variable geometry in copyright duration” could solve this problem: the higher the marketing investments the shorter the copyright duration of protection. In other words, the works with modest advertising shall keep the full term of copyright protection (70 years after the author's death), whereas this duration shall be shorter for works enjoying high investments in their publicity. As a consequence, a great diversity of small and medium sized fishes will flourish while big sharks are kept at a safe distance.

Germany pioneered in extending the terms of protection. The rationale of this extension relied on the fact that the World Wars deprived generations of authors of the benefits of the economic rights in their works. In 1993, the European Community's copyright duration directive extended the German term of protection to all EU Member States. As a consequence, the United States followed the trend in spite of considerable resistance from its civil society. Today, obviously, the grounds underlying this extension do no longer exist for post-war generations of creators and producers in Europe and the United States – the wars have been over for quite some time!

Variable geometry shall provide strong disincentives for exorbitant investments in marketing that damage the diversity of cultural expressions; and provide commensurate incentives for reasonable investments in marketing to the great benefit of consumers. Tax measures to be adopted on the national level shall complement the system and, in particular, prevent circumvention via trademark protection or similar means.[3]
This idea could achieve a level playing field for talents and contents from all cultures by imposing a repellent against exclusionary marketing practices that muzzles creativity from diversified cultural origins. It will be instrumental for the full realization of genuine freedom of speech. It will open frontiers and remove unjustifiable obstacles to trade.
Diversity against piracy
Last but not least, this idea is also likely to reinforce the legitimacy of the copyright system and, thus, probably the most effective way to fight piracy. OECD figures indicate that international trade in counterfeit and pirated products could have amounted to up to USD 200 billion in 2005. This estimate is larger than the national GDPs of about 150 economies based on World Bank data for that year. It does not include domestically produced and consumed counterfeit and pirated products and the volume of pirated digital goods and services being distributed via the internet. If these items were added, the total magnitude of counterfeiting and piracy worldwide could well be several hundred billion dollars more per year.[4] Piracy and counterfeiting thus appears to be a serious problem for developed countries that is not likely to be solved without effective cooperation from developing countries and least developed countries. An incentive for such a cooperation could result from promoting cultural diversity in exchange of fighting piracy: Developed economies would start to effectively implement the access rights under article 7 of the UNESCO Convention for cultural goods and services from developing and least developed countries. In turn, the latter countries would gradually benefit from the international intellectual property system and, accordingly, start to enforce it in their own territories. Under this scenario, cultural diversity is promised to provide new gains for all parties".


[1]    Hollywood Economics, How extreme uncertainty shapes the film industry, London / New York 2004, p. 122.
[2]    Joost Smiers / Marieke van Schijndel, Imagine there is no copyright and no cultural conglomerates too..., Better for artists, diversity and the economy, Amsterdam 2010: http://networkcultures.org/_uploads/tod/TOD4_nocopyright.pdf

[3]    Further proposals aimed at improving access to culture and reinforcing competition on a level playing field are further developed in the long version of the study for the European Parliament on the implementation of the 2005 UNESCO Convention on cultural diversity at www.diversitystudy.eu (see section “Main Study”, Introduction and Study Paper 2B, version of November 2010).
[4]    OECD, The economic impact of counterfeiting and piracy, Paris 2007.".