For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 30 July 2010

Invisible goods

In June the IPKat commented [writes his distinguished and practical friend Richard Ashmead] on a recent reference to the Court of Justice of the European Union (CJEU) which arose from a UK trade mark application for IP TRANSLATOR (here), seeing it as “a much-needed and very welcome reference to the CJEU of some questions which could greatly benefit from a preliminary ruling ...”. The questions in need of a ruling are about the “class heading dispute”, a term which may suggest no more than an argument over classification. It is not.


The argument goes right to the heart of what does -- or does not -- infringe the registration of a trade mark in the European Union, since it addresses the controversial issue of what constitutes identical or similar goods. Indeed it concerns how to construe the scope of the description of goods and services (“goods” for brevity) in a significant proportion of European national, regional and Community applications and registrations. The class heading dispute runs, briefly, like this:
1. The list of goods as registered defines the boundary between what does, and therefore also what does not, infringe a registered trade mark. It tells you whether a third party's goods can infringe because they are identical or, on the evidence, similar, to those for which a mark is registered.
2. To consider if there is infringement, one reads the list of goods for which the mark is registered and check whether third party goods are listed there. If they are, they infringe as being identical. If not you move on to possible similarity and the heavier burden of proof which that involves.
3. Class heading registrations, with list(s) which are the same as Nice Classification Class Headings, are commonplace in the EU. Our dispute centres on how you read these. The two sides of the dispute require you to apply either
a. the "means-what-it-says" approach: construe the words of the class heading list essentially according to their own dictionary significance, or
b. the “class-heading-covers-all” approach: construe the class XX heading list as if it reads “All goods in class XX”.
4. All classes include extra goods not in the class heading wording, specifically or by genus/species significance.
5. Under "means-what-it-says", these extra goods cannot infringe as identical goods, but may infringe as similar goods if the evidence demonstrates that there exists a likelihood of confusion.
6. Under “class-heading-covers-all”, these extra goods are deemed to be within the class heading wording as registered and so infringe as identical goods. There can in these circumstances be no similar goods within class XX, only identical. As examples, under “class-heading-covers-all”:
a. stands for musical instruments in class 15 infringe a registration for “Musical instruments” (the class 15 heading) as identical
b. repair outfits for inner tubes in class 12 infringe a registration for “Vehicles; apparatus for locomotion by land, air or water” (the class 12 heading) as identical, and
c. sleeping bags for camping in class 20 infringe a registration for “Furniture, mirrors, picture frames; goods (not included in other classes) of wood, cork, reed, cane, wicker, horn, bone, ivory, whalebone, shell, amber, mother-of-pearl, meerschaum and substitutes for all these materials, or of plastics” (the class 20 heading) as identical.
These examples do not infringe as existing goods under "means-what-it-says", although they may each infringe as similar goods, with supporting evidence.
7. The protection afforded to a registered trade mark is absolute in the case of identity between the marks and goods, with no defence on evidence relating to the goods.
8. Similarity of goods is arguable, subject to evidence of a likelihood of confusion on the part of the public. Stands for musical instruments may on the evidence be similar to musical instruments themselves but, under “class-heading-covers-all”, the defence argument disappears.
9. Current indications are that the IPOs of AT, BX, CH, CZ, DE, DK, ES, FR, IE, LV, NO, PL, SE, SI, SK and UK apply "means-what-it-says", while the IPOs of BG, EE, FI, HU, IT, LT and RO (along, most importantly, with OHIM) apply “class-heading-covers-all” (thank you, MARQUES, for this data).
10. As a final sting in the “class-heading-covers-all” approach, OHIM’s version of it as explained it its 2003 Presidential Communication No. 4/03 not only extends the scope of a class heading registration to goods not within its wording, but does the same to any registration using a “general indication” from a class heading, giving those words a goods scope beyond their dictionary meanings. As an example under “class-heading-covers-all” a registration list reading simply “data processing equipment and computers” (which appears in the class 9 heading) is infringed by computer software as identical goods, but not under "means-what-it-says" unless the evidence supports similarity.
Both approaches cannot be right, and their coexistence across the EU brings uncertainty as to precisely what it is that class heading registrations (and others) cover. This uncertainty is also likely to produce conflicting decisions, giving equivalent EU national registrations different scopes.

The CJEU reference in IP TRANSLATOR (here) was made in May 2010 by Geoffrey Hobbs QC, sitting as an Appointed Person. It converges its questions on OHIM’s explanation of “class-heading-covers-all” in Presidential Communication No. 4/03, asking whether it is:
“....necessary or permissible for such use of the general words of the Class Headings of the said International Classification of Goods and Services to be interpreted in accordance with Communication No. 4/03 of the President of the Office ......”
In essence this asks the CJEU whether "means-what-it-says" or “class-heading-covers-all” is correct in EU law.

The IPKat commented earlier that he saw justification for both positions, despite preferring the "means-what-it-says" practice. He continued to support a 'one-way-fits-all-offices’ solution, whichever it is. On that latter point there is widespread support. The UK IPO, in the IP TRANSLATOR appeal hearing, commented that the dispute puts it in a difficult situation which can only be resolved by a reference, and OHIM has said publicly that it would welcome an explicit ruling from the CJEU to resolve this difference between different EU jurisdictions. I agree since the existence of the dispute at IPO level, and possibly above, adds an extra level of uncertainty on the scope of a registration in trade mark clearances searches, infringement matters, oppositions and cancellation actions.

I too prefer the "means-what-it-says" practice, but more to the point I believe that legal analysis makes “class-heading-covers-all” untenable. My views on the legalities can be found in the CIPA Journal of April 2009, Volume 38, Number 4 pp 257-260. I have yet to see a reasoned legal analysis supporting the contrary view, but should welcome one, not least for balance in consideration of the further stages of the CJEU reference process.

The keys to resolution of the dispute are, I suspect, in two terms, (i) the prospect of a registered list of goods being construed to provide “invisible protection” for the many items in
every class which are not naturally described by any of the terms used in the class
heading, and (ii) “directly related”, from OHIM Presidential Communication 4/03 as regards goods. On “directly-related” 4/03 says (the support for point 10 above):
“"computer software" is classified in cl. 9 because of the presence of the general indication "data processing equipment and computers" in that class, because computer software is seen as directly related to the corresponding apparatus or equipment. Therefore, when a specification contains "data processing equipment and computers" as a general indication, this will be considered as embracing also computer software.” [Emphasis added]
We know about identical and similar goods, and the increased burden of proof when similarity is argued, but the oft-applied effect of 4/03, eg in CTM oppositions, is that all of these extra goods in any class are directly related to those in their class heading wording, and so are identical. Can then goods be similar and directly related and, if so, does the likelihood of confusion proviso apply or not?

The idea of “invisible protection” comes from a UK IPO opposition decision in case O-026-06 concerning COVENT GARDEN, asking in essence whether a registered list of goods should, through the hidden code of corresponding to (part of) an IC class heading, have a greater goods scope than a registration not so corresponding?

All contributions to this debate, whether they are in agreement with this piece or not, are welcome. Please post a comment below and/or email Richard Ashmead.

Breaking news: Vodkat appeal dismissed

In a super judgment in January, noted by the IPKat here, Mr Justice Arnold (Chancery Division, England and Wales) held in Diageo v Intercontinental Brands that the sale of a product under the name VODKAT was a form of "extended passing off" which makers of genuine vodka were entitled to prevent. This morning the Court of Appeal (Lords Justices Rix and Patten and Mr Justice Peter Smith) dismissed the appeal.


Intercontinental Brands had argued that only products which have a cachet should be protectable and that vodka, being a generic term, did not possess such a cachet. In its decision -- largely given by Patten LJ with a little augmentation from Rix LJ -- the Court reaffirmed that cachet is not a legal requirement and therefore dismissed the appeal, refusing permission to appeal to the Supreme Court.

The injunction prohibiting Intercontinental Brands from continuing to sell its VODKAT non-vodka product will not come into force until such time as any application to the Supreme Court for permission to appeal has been dealt with.

The judgment (77 paragraphs) is not yet on BAILII, but you can read it in full here.

STOP PRESS: the judgment is now available on BAILII, here.

Friday fantasies

The boy stood on the burning deck
Whence all but he had fled.
"Why stay you there", his crew-mates cried,
"When danger lies ahead?"

"I cannot leave", the young man said,
"I won't desert my post!
I'm checking on the IPKat's site
Th'events I like the most.

The list upon the sidebar
Is full of gems galore --
Conf'rences and seminars
On thrice-bless'd IP law!"


Yesterday, in "A Press-ing Problem", the IPKat bemoaned the poor quality of the intellectual property media and press releases which he receives from so many people. If enough people were interested, said the Kat, he'd run a little course on how to write decent ones. So far, he has had a good response -- but half the people who have emailed him to ask to be put on his list are those who already prepare quite good ones, and not a single person from his "offenders list" has contacted him. That already speaks volumes for the comparison between those who take their media releases seriously and those who couldn't care less. If you're interested in participating in a "how to put together a decent press release" seminar, email here, with the subject line 'IP Press Release'.


US-based free patent information provider Priorsmart, which also tracks patent-related blogs and news, has started sending out a daily email listing all the US patent infringements, including free pdf complaints. For details of this service, email here. The IPKat has seen a couple of these listings and is a little embarrassed to confess how few of the litigants are known to him ...


Latest report on British IP crime. The UK's Intellectual Property Office has now published the IP Crime Group's annual report for 2009/10, which provides an overview of the current scale of IP crime and what is being done about it. Noting that it remains difficult to establish the likely impact of IP crime accurately, not least since such activities tend to take place outside the formal economy, the report records an increase in the coordination of enforcement activities and information between rights-holders, the government and enforcement agencies. The result is a greater level of public awareness, more convictions, and more infringers forced to regurgitate their ill-gotten gains under the Proceeds of Crime Act 2002. IP Minister Baroness Wilcox is getting ready to deal with the real villains, though:
"The real key to beating this threat is the public. People must refuse to buy anything they suspect is not genuine and report the seller to their trading standards or police.".
The report is 64 pages long and you can read it here. IPO press release here.


Around the journals. The latest issue of JIPITEC, the a new Online Journal for current issues of intellectual property, information technology and E-commerce law, is now available: check it out! The August 2010 issue of Sweet & Maxwell's monthly European Intellectual Property Review (EIPR) is out too, with a review by the China Patent Office's Yong-Kang Yang of the term "national treatment" in Art.2(1) of the Paris Convention and Patricia Akester's look at the realities of striking a balance between copyright protection and UNESCO's baby -- access to knowledge, information and culture. Always ahead of its cover date, the August-September World Trademark Review (contents here) has a distinctively Chinese flavour to it, but there's plenty more besides, including an international design and trade dress survey. Oh, I nearly forgot -- the July issue of Intellectual Property Magazine (here) has lots of short, attractively illustrated pieces across the range of IP.


Around the blogs. Miri Frankel, who already contributes to the IP Finance weblog, is joining the 1709 Blog team too, where she will offer some welcome US perspectives. Excess Copyright speculates on the deeper meaning and potential for protection of the term "English Muffin"; the IPKat chooses not to delve too far, since Wikipedia associates muffins with crumpets and both have, er, overtones. Frank Zappa fans will recall the prime significance of this delicacy, recorded not merely in the name of one of his children but in Muffin Man, the lyrics of which contain the immortal stanza "Girl, you thought he was a man/But he was a muffin".


Pharma linkage
. A friend of the IPKat works in the area of pharmaceutical linkage regulations which tie drug approval to drug patenting. He works in Canada, where the relevant domestic regime, in force since 1993, is was modelled after the US Hatch-Waxman regime, and he is putting together an application for a grant to study linkage regimes globally. He asks:
"Is there a parallel system in the UK or EU? Has one ever been debated, or is one currently being debated?"
If you'd like to comment -- or indeed to get in touch with the Kat's correspondent -- please post accordingly below.

Thursday, 29 July 2010

Inbev loses Budweiser CTM appeal

Just when the IPKat thought it was safe to redirect his lynx-like ears away from Luxembourg and towards the ball-by-ball commentary on the cricket match between England and Pakistan, the Court of Justice -- which has been quite quiet over the past few days -- sputtered into life again with a ruling in Case C‑214/09 P, Anheuser-Busch Inc. v Office for Harmonisation in the Internal Market, Budějovický Budvar, národní podnik, the final appeal in a minor part of the larger and apparently eternal war between the formerly American Budweiser (now European-ly Belgian) and its Czech mate Budvar.

In its ruling the Court of Justice, affirming the decision of the Court of First Instance in March 2009 (noted here), said AB Inbev (the AB being 'Anheuser-Busch') was not entitled to register the word BUDWEISER as a Community trade mark for ‘beer, ale, porter, malted alcoholic and non‑alcoholic beverages’ in Class 32. The original application, filed on 1 April 1996 (the day the Community trade mark system commenced), was opposed by Budvar on the basis of (i) its earlier international word mark BUDWEISER, registered for ‘beer of any kind’, with effect in Germany, Austria, Benelux and Italy; (ii) an international figurative mark including the words ‘Budweiser Budvar’, registered for ‘malt’ and ‘beer’, with effect in Austria, Benelux, France and Italy; (iii) an international figurative mark including the words ‘Budweiser Budvar’, registered for ‘beers’, with effect in Germany, Austria, Benelux, France and Italy, and (iv) on a number of appellations of origin including the word ‘Budweiser’.

The Court of Justice today agreed that Budvar's earlier rights to the name in Germany and Austria, where genuine use was sufficiently evidenced, were a sufficient basis upon which to base a successful opposition. AB Inbev still holds trade mark rights for the words BUD or BUDWEISER in 23 of the 27 EU countries, and this decision has no effect on them.

The Court also clarified a legal-procedural issue (at para.69), ruling that the lower court did not err in law (i) when it held that OHIM was entitled to require proof that an earlier mark had been renewed, where that mark was due to expire after the notice of opposition was filed and (ii) when it held that an opposing party was not required to provide such proof on its own initiative.

Campaign for real ale here

Sources: Court of Justice ruling; press release from Stephanie Bodoni (Bloomberg).

Schlumberger v EMGS: A Non-Obvious Marriage of Skills

Who (or what) is the "person skilled in the art"? This was the main question posed in the case of Schlumberger Holdings Ltd v Electromagnetic Geoservices AS [2010] EWCA Civ 819, the judgment of which was issued yesterday by the Court of Appeal.  This resulted from an appeal from the judgment of Mr Justice Mann at the High Court (commented on at the time by the IPKat here), who had found EMGS's patents, relating to geological surveying, to be invalid for being obvious.

While Article 56 EPC asks whether a claimed invention would be obvious to the person skilled in the art, Article 83 asks the different question of whether the patent application discloses the invention in a manner that is sufficiently clear and complete for it to be carried out by a person skilled in the art.  In many, if not most, cases the person would be one and the same, not least because the person who would not find the claimed invention obvious must be sufficiently taught by the patent specification how to implement the invention.

There are some cases where an invention comes from combining knowledge from more than one field of technology.  Once this knowledge is combined, how to carry out the invention becomes straightforward, and the person skilled in the art according to Article 83 becomes a team of people with knowledge from each field.  If the same team of people was used to determine the question in Article 56, however, the effect would be to make the invention immediately obvious.  This is clearly a problem for some inventions that would otherwise be patentable.

In this case, the invention related to a method of finding out whether an underwater geological formation contained oil or water.  Seismic surveying could be used to find promising areas to look into further, but could not go as far as telling what a formation contained.  This was a problem for oil exploration companies, who would generally have to spend about $25M each time in order to drill a test well to find out.  With a hit rate of about 1 in 10, striking water instead of oil 9 times out of 10 made doing this a quite expensive way of finding oil.  This was effectively the situation prior to the application date of the patent in question. 

What the patent, EP1256019, taught was that a technique known as controlled source electromagnetics (CSEM) could be used in a very specific way to tell the difference between oil and water in a geological formation.  Before the patent application, nobody had thought to marry the known techniques of deep water surveying for oil with CSEM in such a way, although both were well known separately.  What the patent proprietor was arguing for was that the invention was a "non-obvious marriage of skills".  In other words, the invention resulted from the recognition that CSEM could be used in a particular way to tell the difference between oil and water in formations that had already been identified.

Lord Justice Jacob, taking the lead role in the judgment, considered that it was clear that the person skilled in the art for obviousness was not necessarily the same person skilled in the art for performing the invention once it was made.  In a key part of the judgment's reasoning (at least in the IPKat's opinion), Jacob LJ stated:

"I think the flaw in [assuming that the skilled person is the same in each case] is to assume that “the art” is necessarily the same both before and after the invention is made.   The assumption may be correct in most cases, but some inventions are themselves art changingIf a patentee says “marry the skills of two different arts to solve a problem,” marrying may be obvious or it may not.  If it is not, and doing so results in a real technical advance then the patentee deserves and ought to have, a patent.  His vision is out of the ordinary

This is not because a different construction is being given to the phrase “person skilled in the art” in the different Articles.  It is because the phrase is being applied to different situations.  Where the issue is claim construction or sufficiency one is considering a post-patent situation where the person skilled in the art has the patent in hand to tell him how to perform the invention and what the monopoly claimed is.   But ex-hypothesi the person skilled in the art does not have the patent when considering obviousness and “the art” may be different if the invention of the patent itself is art changing.

In the case of obviousness in view of the state of the art, a key question is generally “what problem was the patentee trying to solve?”  That leads one in turn to consider the art in which the problem in fact lay.  It is the notional team in that art which is the relevant team making up the person skilled in the art.   If it would be obvious to that team to bring in different expertise, then the invention will nonetheless be obvious.  Likewise if the possessor of the “extra expertise” would himself know of the other team’s problem.   But if it would not be obvious to either of the notional persons or teams alone and not obvious to either sort of team to bring in the other, then the invention cannot fairly be said to be obvious.    As it was put in argument before us the possessors of the different skills need to be in the same room and the team with the problem must have some reason for telling the team who could solve it what the problem is." (paragraphs 63-65, emphasis added).

Jacob LJ then went on to consider what the correct approach would be in this case:

"It follows that the correct approach in this case is to start with the real problem faced by exploration geophysicists.  Did they appreciate they had a solvable problem?   How could they determine whether a thin layer of porous rock identified by seismics as potentially hydrocarbon bearing in fact does so or is just a false positive bearing only brine or water?   One then asks whether the notional exploration geophysicist who read the cited prior art would see that the answer was to use CSEM, or if not that, at least that CSEM had a sufficient prospect of being useful that it was worth asking a CSEM expert.  

The problem must also be approached the other way round, from the point of view of the CSEM expert.  Would he or she know of the exploration geophysicists’ problem and, if so, would he or she appreciate that CSEM had a real prospect of being useful to solve the problem?  

In short: was the marriage obvious to either notional partner?" (paragraphs 71-73).

By this point, it was quite clear what the end result would be, which was that the invention was not obvious because the marriage of CSEM with known geophysics in identifying hydrocarbon layers was not obvious to either notional partner before the priority date of the patent.  The appeal was allowed, resulting in the judgment of Mann J on finding the patent to be invalid being overturned.

In support of the reasoning, various other cases were mentioned where similar arguments would apply, such as Mandy Haberman's 'Anywayup Cup', which married the known features of a slit valve with a trainer cup, and James Dyson's cyclone vacuum cleaners, which married domestic vacuum cleaners with industrial scale cyclone technology.  Jacob LJ also noted with approval some of the leading cases from the EPO on where the problem-solution approach could be used in such situations.  All this led the IPKat to think, perhaps rather egotistically, that his (and some of his readers') words on how the Court of Appeal might have got it wrong in Actavis v Novartis could have had some effect.  Regardless of whether he has had an influence, however, the IPKat is very pleased to see that the EPO problem-solution approach is increasingly being married with the UK-style Windsurfing/Pozzolli approach to produce quite a pleasingly robust test for inventive step that would not necessarily have been obvious to persons skilled in either approaches before. 

A press-ing problem

This Kat receives a lot of press releases (this seems to be the old-fashioned name for what many folk have now 'rebranded' as media releases) from many sources -- public sector bodies, IP-owning businesses, companies that provide services for IP owners and their advisors, publishers, law firms and firms of patent and trade mark attorneys. Some stand alone; others are accompanied by circulars or even individualised emails asking, begging or ordering the IPKat to publicise their contents.


A small number are excellent. However, most are dreadful and the Kat never uses them. A check of search engine news features indicates that most other publishers -- both online and in traditional format -- don't use them either. It's obvious that something (or lots of things) go badly wrong, if you consider that good money is spent in drafting and sending out information that is often badly prepared, poorly distributed, unused and unmonitored.

This autumn, if there is enough demand, this member of the IPKat team will organise a little session (estimated length, two hours), for people who want to improve their intellectual property press release techniques. The proposed course will tackle some of the most egregious problems and suggest how to deal with them, also offering a chance to do a little practical exercise based on a "news item" which will be circulated in advance.

The likely cost will be £100 plus VAT. If you're interested, email me here with the subject-line "IP press releases". I'll need at least ten responses to make it worth preparing the materials and hiring a venue.

Illustration from All-free-download here

Wednesday, 28 July 2010

Wednesday whimsies

The bright, shiny new European Commission e-justice site, launched earlier this month, features a directory of legal professionals which includes lawyers, notaries and bailiffs, the IPKat learns from Kilburn & Strode's observant Nick Bassil -- but not patent and trade mark attorneys. Wonders Merpel, is this because they're not legal or because they're not professional?



Ten Questions -- and some pertinent comments. The "Ten Questions About Confirmatory Assignment" post by IPKat team member Neil last week has attracted some enrichment in the form of quality comment from readers: if you are involved in or concerned about confirmatory assignment issues, you may wish to revisit this article -- which you can do so by clicking here.


Augmented reality. The IPKat's dear friend Maximilian Schubert, convinced that "augmented reality" will soon become a part of everyday life, has a little idea which is very simple. Since this technology is novel, we must consider which legal principles govern it. Since keyword advertising plays a role, he argues that the principles developed recently by the ECJ (see IPKat posts here, here and here, for instance) could apply here too -- after all, it makes little difference whether a consumer searches for a "Canon S 90 price comparison" on a search engine or just points his smartphone's camera at a Canon S 90 camera while standing inside a store. In both cases he submits a query and receives results (which contain, or are displayed alongside, ads). If in principle both technologies are similar, the ECJ's keyword advertising doctrine will fit it neatly. Maximilian's thoughts (which you can read here) haven't advanced very far yet, but he'd love to hear the ideas of other jurists on this subject.


Since so many readers of this weblog side with the underdog in its battles with the overdog (if such a concept exists), the IPKat has decided to gratify them with the news that Mattel, owner of the iconic Barbie doll, has just seen its hard-won injunction against former employee Carter Bryant's Bratz dolls disappear. According to 9th Circuit Chief Judge Alex Kozinski, the district court erred when it found that Mattel's employment agreement covered the idea for Bratz, wrote who concluded: "America thrives on competition; Barbie, the all-American girl, will too." The order was stayed pending the appeal (see the AmeriKat, here).

The apt illustration on the left comes from an earlier posting on this dispute from Counterfeit Chic, Susan Scafidi's lovely blog, that has been too quiet for appreciative Kats of late.

A blueprint to nurture the creatives: it takes Brains ...

A media alert from the Confederation of British Industry, "CBI launches blueprint to nurture UK’S creative industries", was circulated at the beginning of the week. According to its text:

The CBI is calling on the Government to deliver a clear strategy [As opposed to an unclear one? This demand falls foul of the IPKat's First Law: the clearer the statement of principles, the less clear is its applicability to any given factual situation] to ensure the UK’s creative industries can flourish and help lead the economic recovery.

Launching its new report, Creating growth: A blueprint for the creative industries, the UK’s leading business group [not that there's much competition] stressed the vital economic contribution of creative industries, including TV, film, art, fashion, media and design [Stressing the contribution is the easy bit; sustaining it is the problem].
It is estimated that these industries contribute between 6 and 8 percent of GDP, account for £16bn of overseas trade each year and employ nearly two million people. The sector also significantly enhances the UK's cultural reputation globally, underlining the vitality of the UK economy.
The CBI believes the UK’s creative sector, which is the biggest in Europe, can play a crucial role in rebalancing the economy and delivering high growth. For that to happen, the business group says the Government must deliver the right conditions for the sector to thrive and create new jobs [We'll have to create new consumers too, or we'll just be providing more choice of content and platform for the same people. Won't we?].
[CBI President Helen Alexander is then quoted as saying much the same thing: omitted]
The CBI says Government action should focus on the following areas:
* On competition policy, we need a modern, forward-looking regime that reflects the new digital environment [Don't we need a regime that just reflects the environment of Brussels, where UK competition policy now originates?].
* On skills, government policy should include what is needed by creative businesses and ensure these are being delivered by the education system [A tricky one here: if our creative sector is bigger than that of other European countries, perhaps -- though it can't be true -- our education system has already delivered it].
* On intellectual property, the Government must provide certainty about the IP regime so companies can derive value from their rights [And what about certainty for traffic lights? The silly things keep changing colour! When there's a grey area dispute in IP, there's often a British company on each side of it, and a good old British compromise can work better than having winners and losers]. It must also be active in international forums, since IP is a global issue [Planet CBI is obviously light years away from Newport -- the UK's Intellectual Property Office has never been anything other than active in international forums, to its great credit].
* On tax, we need a competitive framework that promotes start-ups, innovative and high-growth businesses [Quite right!!]. Given that many creative businesses are highly mobile, we need policies to ensure talent does not go elsewhere [Er, if they're creative and talented they'll be able to work out how to go elsewhere -- but they may not want to come here in the first place if they think they won't be allowed to leave].
* On the finance front, it can be difficult for creative firms to access the capital they need to get their products off the ground, especially when they can come with unproven revenue streams. The Government must work to ensure that access to finance does not become a barrier to growth for creative industries [The private sector must play its part too. How dare it sink its funds into boringly safe ventures when there are so many excitingly risky ways to lose its money, destroy shareholder confidence and beggar the pension companies that have invested in it].
* On infrastructure, there needs to be a policy framework that will encourage market-led investment in quality, high-speed internet [the panacea]".
Says the IPKat: it takes brains to put together a blueprint for the development of a strategy for nurturing the creative industries -- and he hopes that no effort will be spared when it comes to getting those brains to engage in some creative thinking. That time has manifestly not come yet, if one considers the paucity of content and of originality in this short (12 side) and space-filled document. Come on, CBI: you can do better than this! Merpel adds, considering that this emanates from "the UK’s leading business group", one might have imagined that it would be picked up and discussed by the Financial Times, the Guardian, the Telegraph, the BBC and other major news-and-views carriers. A quick Google search shows that the CBI's blueprint has attracted the attention of IncGamers, The Stage, Gamasutra (I kid you not), The Drum and the Liverpool Daily Post -- which describes the CBI merely as a lobby group.

You can read the blueprint in full here

The definite Article?

The IPKat's eye was attracted to a US media release, "Article One Announces Completion of Funding from Alleghany Corporation". The release brings news that Article One Partners, said to be "the world’s largest patent research community", has just completed a $5 million round of institutional funding with Alleghany Corporation's subsidiary, Alleghany Capital Corporation. The cash

"... will be used to further consolidate the firm’s leading position in the global online patent validation sector by enhancing existing products and services, developing new ones and accelerating sales".
What exactly is it that Article One does? According to the media release, its community of millions of researchers
" ... gathers patent validity evidence, discovered from around the world, with a speed and depth that traditional patent research can’t match. The community’s ability to access research in many languages, as well as its access to non-digitized publications, produces a quality of research that only human knowledge experts can achieve".
Says the IPKat, Article One's major asset appears to be the ability to wave the name of legendary patent policy guru Marshall Phelps around. Apart from being a Board Member, he is also said to be making his own substantial investment in this round.

Adds Merpel, I think, if I've understood this right, that what these researchers do is gather evidence of patent invalidity, since you can't really gather evidence of validity: it's like proving a negative ("not anticipated by the prior art", "not obvious" ...) and they get rewards of $5,000 to $50,000 per research project, plus a slice of corporate profit-share. Or have I missed something?

Tuesday, 27 July 2010

If you think software patents are a pain, try software copyrights

The judges who sit in the Court of Justice of the European Union must by now be thinking that the only way to stop Mr Justice Arnold sending them questions to answer is to have him appointed as a colleague. If you don't think so too, consider the case of SAS Institute Inc v World Programming Ltd [2010] EWHC 1829 (Ch), a Chancery Division (England and Wales) decision of Mr Justice Arnold, which was handed down last Friday, 23 July. It's a real whopper, too, the sort of judgment you'd expect on a complex topic on which the parties spent 12 days arguing with one another in court.

In short -- if that word is ever applicable to a decision of this length -- SAS developed its own SAS analytical software system, this being an integrated set of programs that enabled users to perform a wide range of data-processing and other tasks, and especially statistical analysis. The IPKat isn't surprised that it could do lots of tricks, since it had been around for some 35 years, generating income for SAS in excess of £2 billion. At its heart was "Base SAS", which let users write and run application programs ("scripts"), written in SAS language, in order to manipulate their data.

Base SAS's functionality could be extended by using additional components -- in this case SAS/ACCESS, SAS/GRAPH and SAS/STA. Over the years, SAS's customers had created thousands of apps in the SAS Language -- some were short and simple, while others were vast. Anyone wanting to run their existing apps or create new ones had to take a licence to the SAS components. Other suppliers of analytical software existed in the market, but anyone wanting to change to another software would have to rewrite all its apps in another language, which would be a pain (and an expensive one, too).


World Programming ('WorldProg'), spotting the huge potential market for software to execute SAS-based apps for use elsewhere, developed World Programming System (WPS) -- which inevitably emulated much of the functionality of SAS's components in order to ensure that they worked the same. It was not alleged that WordProg had access to SAS's source code or copied it, or even that it copied any of the structural design of the components' source code. WordProg also created a WPS manual, which described the functionality of various elements briefly by reference to syntax diagrams, plus a set of WPS guides --four quick reference guides which simply listed elements of the SAS language and indicated whether the current edition of WPS supported it.

In September 2009 SAS commenced proceedings, alleging copyright infringement in its software and in its own manuals, as well as breach of SAS's licence terms with regard to the Learning Edition of the SAS System.

Remarkably, the case came to trial as early as this June and, having devoured a vast quantity of raw law as well as legal submissions and complex facts, Arnold J ruled as follows:
* Computer programs were protected by copyright just like any other literary works within the meaning of the Berne Convention by Article 10(1) of TRIPS, Article 4 of the WIPO Copyright Treaty and Article 1(1) of EU's Software Directive, subject to ant specific exceptions to the contrary.

* Both Article 9(2) of TRIPS and Article 2 of the WIPO Copyright Treaty distinguished between 'expressions' -- which are protected by copyright -- and 'ideas, procedures, methods of operation and mathematical concepts as such', which are not.

* United Kingdom courts must interpret both the Software Directive and domestic law in conformity with TRIPS and the WIPO Copyright Treaty, both as a matter of EU law and under domestic law. Accordingly, they have to protect 'expressions' as copyright works, but not 'ideas, procedures, methods of operation and mathematical concepts as such'. For this reason it is necessary to distinguish between the two, the former being protected by copyright and the latter belonging to the public domain.

* Skill, judgment and labour in devising ideas, procedures, methods of operation and mathematical concepts are not protected by the copyright in a literary work but skill, judgment and labour in devising the form of expression of the literary work are.

* Pumfrey J could not be said to have erred in Navitaire v easyJet (noted briefly by the IPKat here) when he concluded that programming languages were not copyright-protected. His distinction between a [copyright-protected] computer program and the language it was written in was, despite his hesitancy on the point, consistent with the distinction between expression and ideas, procedures, methods of operation and mathematical formulae.

* Under Article 1(2) of the Software Directive, "Protection ... shall apply to the expression in any form of a computer program. Ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under this Directive". The correct interpretation of this provision in relation to computer languages and interfaces was not acte clair and would therefore need a reference to the Court of Justice of the European Union to establish what it actually meant.

* Assuming that Pumfrey J in Navitaire was right (and the Court of Appeal in Nova v Mazooma was happy enough with his decision), WorldProg hadn't infringed SAS's copyrights anyway.

* It was not an infringement of the copyright in a manual describing certain functions to use that manual as a specification of those functions that needed replication and, to that extent, to reproduce the manual in the source code of the new program. This too was not acte clair, though.

* If Article 2(a) of the Information Society Directive is to be interpreted in the same way as Article 1(2) of the Software Directive, WorldProg didn't infringe copyright in SAS's manuals by producing or testing its own WPS product.

* There was no breach of licence. If any of SAS's licence terms for its Learning Edition were contrary to Article 5(3) of the Software Directive, they would be void. Here too, the interpretation of Article 5(3) was not acte clair.

* On the facts, some of the bits of WorldProg's manuals copied text that expressed the intellectual creation of the authors of SAS's manuals, so some copyright infringement had indeed taken place -- but there had been no infringement in respect of WPS's guides, where similarities had occurred through the accretion of key terms.
Says the IPKat, if I'm right there are going to be five sets of questions referred for preliminary rulings ...

SAS here and here

Do poor people like different patents to rich people?

That is the question - simplified - posed by a new paper by the economist Christian Kiedaisch of the ETH Zurich. The paper examines distributional implications of different patent policies. The proposed mechanism is that an increase in patent length increases the share of monopolized industries so that relatively more goods are sold at a markup. However, markups decrease in the share of monopolized industries and the rich benefit more from this effect than the poor as they consume a larger share of patented goods than the poor. While both the rich and the poor benefit in a similar way from an increase in the rate of growth, the poor loose more in terms of current consumption than the rich if patent length increases and because of that, they prefer shorter patents.

The author then examines the preference for another quality of patents which he terms "patent breadth", roughly capturing the deterrent effect of patents on entry into the market (scope of protection and ease of enforcement). He concludes that an increase in patent breadth increases innovation incentives so that a given rate of growth can be attained with long and narrow or short and broad patents (lawyers' toenails tend to curl when the scope of protection of a patent is thus simplified...). If the relative per capita labour income of the poor is not too large, they prefer short and broad patents while the rich prefer long and narrow patents. If, on the other hand, the poor are so poor that they can only afford to consume nonpatented goods, they are in favour of stronger patent protection which leads to a larger rate of growth.

As you can imagine, the whole thing is a lot more technical and complicated than this short post, so read the paper if your curiosity has been piqued.

The image is a creative-commons licensed photo of a street scene in Haiti by Michelle Brea- hanging on- . I wonder whether the depicted guy prefers short and broad patents or is in favour of stronger patent protection...

Monday, 26 July 2010

Monday miscellany

The vernacular strikes again. "Experts Break New Ground in Traditional Cultural Expression Talks" is the title of a media release from the World Intellectual Property Organization (WIPO) which, as the name suggests, indicates that discussions on traditional cultural expression have taken some fresh turns. Apart from the inference that you can get some decent talks going when you have (i) fewer people in the discussion, (ii) these people being experts and (iii) who are speaking in their individual capacities rather than as on-the-record representatives, this item is interesting for something else. It is, the IPKat thinks, the first time the phrase "nitty-gritty" has been employed in a WIPO news release. Merpel wonders how this idiom is rendered in other official languages of the world's premier IP organisation. Can readers advise?


Summer bonanza. The IPKat really dislikes any sort of loose-leaf publications, since it's well-nigh impossible getting those pesky updating releases into the folder when you don't have a set of opposable thumbs. If however you are someone who likes them -- or who employs someone else to do the updating -- you may not yet know that Sweet & Maxwell have a Summer Bonanza Sale, offering a 35% discount to anyone signing up for some of its loose-leaf products by 31 July 2010. These titles include a few IP works: the Community Design Handbook and the Community Trade Mark Handbook, as well as Copyright and Designs Law, The Encyclopaedia of UK and European Patent Law, International IP Litigation, Melville's Forms and Agreements on IP and International Licensing, the Trade Mark Handbook, Trade Marks, Trade Names and Unfair Competition, and a dreadful-looking book on the law relating to ... dogs. All in all, there are 202 loose-leaf titles on offer. For full details of the works on offer, click here. Merpel wonders how, in a world dominated by the internet, and where the success of any book not featuring Harry Potter is far from guaranteed, lawyers still provide enough demand to keep so many loose-leaf titles afloat. How many will still be around a decade from now?



If you have not yet participated in the Online Stakeholder Survey of the Expert Taskforce on Global Knowledge Governance (see earlier IPKat post here), you still have until the end of this week to do so. The survey closes this Friday, 30 July. Merpel, whose affection for red meat runs high, still awaits a decent Steakholder Survey -- she's sure she'd have no problem meating the deadline ...


The IPKat thanks his readers for their continued support, without which his blog would never have appeared in the Number 1 position in the Copyright Litigation Blog's Top 15 Copyright Blog chart, based on data drawn from Justia. The chart only lists some 64 weblogs that are "self-identified as copyright blogs", which appears to exclude the Michael Geist blog and the IPKat's little friend The 1709 Blog -- both of which carry copyright content.

Sunday, 25 July 2010

Letter from AmeriKat - Hot News - too hot to handle?

The AmeriKat spent Saturday clearing away her belongings from bookshelves and tables in preparation of the painting that will take place in her flat next week. Readers may recall that in May, her flat was flooded after a neighbor's pipe burst turning her flat into Noah's Ark. Two months later and the painters are finally due to cover up the water-stained ceiling and resulting fissures in the walls. (picture, left, the AmeriKat taking a paw to painting) A fresh coat of paint can do wonders to a room - transforming a once dull and fading space, to a new and brightened environment. But despite attempts to freshen or fix some things in life, their inherent flaws will always show through no matter how many coats of paint you apply.

Hot News - So Hot Google can't touch it?

An industry and profession who have been inventing new ways to mask the cracks in their failing business model is the newspaper industry. A month ago the Federal Trade Commission published a "Discussion Draft" paper that against a backdrop of their importance to a democratic society, discussed the dire state of the newspaper industry, citing a loss of 45% of their advertising revenue since 2000. The paper proposed that additional intellectual property rights be employed to support claims from the traditional press against news aggregators. Readers may recall that last June Judge Posner also suggested that copyright law could be employed to rescue the newspaper industry (see previous AmeriKat post here).

News aggregators, for those unfamiliar with the term, aggregate links, headlines, and introductory sentences of newspaper articles in a one-stop style shop. The user clicks on their chosen link directing them to the original source material. For example, when you type in "Paul octopus World Cup" in Google News, it will aggregate or list all news articles that refer to those keywords. Some say that news aggregators infringe copyright, while others suggest that the doctrine of fair use rescues aggregators from a finding of copyright infringement. Although not a case strictly involving a news aggregator, a 9th Circuit federal court held that Google's use by way of the reproduction, distribution and display of thumbnail images and headings from copyright works was fair use in the Perfect 10 case. The four fair use factors were employed, but the court placed special reliance on the first factor, i.e., the purpose and character of the use, including whether the use is commercial or non-profit in nature. It seems odd that for the court to place so much reliance on this because surely, Google, as a commercial entity driven by ad revenue, could not rely solely on this factor. The court, however, said that the thumbnails were "highly transformative" because "a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool." Although arguably highly transformative, says the AmeriKat, surely the commercial nature of the use trumps the transformative nature? Unfortunately, besides the Perfect 10 case, there has yet be a case to have reached judgment of a US court that deals head-on with the issue of whether a news aggregator's use is infringing or falls within the ambit of fair use.

If this story took place in the UK, that is where the story would end. However, in the US, the doctrine of "hot news" muddies the intellectual property waters. Copyright protects the expression of facts or ideas, not the facts or ideas themselves. However, the hot news doctrine in the US actually protects the facts of news. The 1918 Supreme Court case of International News Services v Associated Press originated this doctrine based on common law misappropriation principles in that breaking news was to be considered a "quasi property" right. Justice Pitney, in giving the majority decision, developed the doctrine of misappropriation in the news. According to his judgment a news organization has gathered news “at the cost of enterprise, organization, skill, labor and money” and therefore has a limited proprietary interest in it against a competitor.

Despite that the original federal common law that underlies the 1918 Supreme Court decision is no longer binding, several subsequent cases have reformulated the hot news doctrine. The result has meant that although federal copyright law does not recognize protection of "hot news", state law can protect "hot news". The Second Circuit Court of Appeals did not define the limits of the protection, but nevertheless restated the elements of the hot news doctrine in the NBA v Motorola case in 1998 as the following:
  1. The claimant generates or collects information at cost or expense
  2. The value of said information is highly time-sensitive
  3. The defendant's use of the information free-rides off the claimant's efforts in collecting it
  4. The defendant's use of the information is in direct competition with the claimant's use of it
  5. The ability of other parties to free-ride off the claimant's efforts would reduce the incentive to produce it or the quality of the information would be threatened.
Now, with newspaper revenues dwindling and a reported loss of more than 40,000 jobs to the US newspaper industry in 2009, it is unsurprising that proponents of the hot news doctrine are demanding that the doctrine be enshrined in the Copyright Act. Proposals have included the encouragement of the development of state law doctrines, one one end, to the enshrinement of protection in the Copyright Act, at the other extreme. The reasoning for both proposals being that with the enshrinement of the protection in state and federal laws would result in the newspaper industry's content being protected and the industry thus be saved.

However, hasty measures and amendments to a centuries-old copyright system that itself was derived from the UK's Statute of Anne, makes the AmeriKat's fur bristle. At the extreme, by amending the Copyright Act one must necessarily be incredibly cautious in drafting a provision that protects news (something that will inevitably be in the public domain in a matter of minutes/days), but also allows for competition from competing news organizations. Without a perfectly drafted provision, costs of litigation and related disputes will rise. And its the very issue of costs, be it in production, overheads or libel litigation, that is thorn in the newspaper industry's paw. Surely, this is not the solution the industry could then possibly support?

Another suggestion in the report was that the fair use doctrine be narrowed so that "routine copying of original content done by a search engine in order to conduct a search (caching) is copyright infringement not protected by fair use." Other suggestions were that, at the very minimum, the way in which the fair use doctrine applies to aggregators should be clarified. But following such a suggestion through, if news aggregation did not benefit from the fair use defence and was thus copyright infringement, the way in which we search for news would radically change. The AmeriKat herself is a keen user of Google News. For example, searching for articles on this very topic resulted in a variety of sources from WSJ, New York Times, BBC, etc by way of the Google News tab - a news aggregator. A normal Google search of this topic resulted in a hodge-podge of topical, as well as irrelevant sources. Thus, a key question recognized by the FTC report was whether a limit on the fair use doctrine would necessarily restrict "the public's ability to find and access information on the web without comprehensive search engines".

The final suggestion in the IP section of the proposal was that of a more extensive licensing system, including statutory or compulsory licensing scheme, such as the ones that operate for phonorecords or jukeboxes (the Copyright Act is dating itself here), be employed. One of the FTC's workshop participants suggested that the federal copyright law be amended to create a "content licence fee" to be paid by every ISP on each customer account it provides. The copyright owners would then submit data of their site downloads and hits to the Copyright Office who would then be in charge of distributing the licence fees. (picture, left - the type of machine the Copyright Office may use to calculate license royalties) But a compulsory licence system in effect taxes access to information. Not only does a tax sits uneasily with the First Amendment, but its practical implications could be too complicated as to be practical.

Last week, Google, wrote a 20 page response to the FTC draft proposals. The AmeriKat is admittedly critical of Google in the field of copyright, however, she agrees with their response. Like Google, the AmeriKat is unsure how the cause of the failing business model of the traditional print media became the responsibility of copyright laws. Are news aggregators really to blame? The AmeriKat thinks not and neither does Google. As Google wrote:
"[T]he current challenges faced by the news industry are business problems, not legal problems, and can only be addressed effectively with business solutions"
Google then quotes the former editor of the now defunct Rocky Mountain News - John Temple (picture, below) - who stated last year:
"Being a great newspaper isn't enough in the Internet era. You have to know what business you're in. We thought we were in the newspaper business. . . If newspapers would spend more time trying to understand their customers instead of focused on their own internal issues...they're more likely to be successful. That's a hard switch for traditional manufacturing operations like newspapers to make"

The AmeriKat could not agree more. The FTC's and some traditional media outlets proposals are not proposals to save journalism, but are instead proposals to save the newspaper industry - an industry whose business model is entrenched in a different era. Copyright laws are not built and should not be manipulated to protect the very thing they were never meant to be protect, ie., facts, in a last-ditch attempt to save an outmoded business model. If anyone assumes that it is fierce proprietary protection, be it through pay-walls or copyright laws, that will inevitably save the newspaper industry, one need only point to the Times
loss of 66% of its online readership following its disappearance behind the pay-wall. But if it is a business problem that is killing our traditional press, what is the Internet solution that will inevitably save it?

Friday, 23 July 2010

Friday fantasies

Friday comes but once a week,
The day all readers take a peek
And check the list of days ahead
For "Forthcoming events", it's said.

The wise ones come from near or far
For conference and seminar,
For new ideas, stimulation,
Professional accreditation.

So when you scan the IPKat's list
Of talks and courses -- not to be missed,
If they ask "how knew you that?",
Say "I found it on the Kat".


Cat Poet (above right) is one of a delightful range of cards available from Ganapati Studios here


Trade mark aspirations gone to pot. "High Hopes for Pot Trademark Protection Dashed" is the title of a Wall Street Journal piece spotted by the IPKat's observant friend Shabtai Atlow. Apparently the U.S. Patent and Trademark Office recently created a new trade mark category dedicated to medical marijuana, which prompted a frenzy of applications from pot dealers in the 14 US states in which the drug is legal for medicinal purposes. The marks for which registration was sought included CHRONIC, MELLOW YELLOW and TARTUKAN DEATH WEED -- despite possible issues of genericity or lack of distinctive character. Following the receipt of an inquiry from a Wall Street Journal reporter, the USPTO reputedly scrapped the idea (it's not clear whether this was a case of causation or coincidence). The official excuse was that registration of trade marks is only possible in respect of goods which may be the subject of interstate trade, or the Interstate Trade Clause justification for federal trade marks in the US gets in the way.



Around the blogs. The 1709 Blog, dedicated to all sorts of different bits of copyright, welcomes its first contributor from a civil law jurisdiction, Monika Bruss. This should help generate more, and better, debate on copyright and its somewhat problematic relationship with the public domain. Monika is the second recent recruit to the blog, following its acquisition of Aurelia J. Schultz earlier this year. PatLit -- the patent litigation blog -- is going to stay just that, following the results of its readers' poll. 67.8% of respondents said it should stick to patent dispute resolution, while just 19.5% wanted it widened to cover other IP rights (other respondents wanted it narrowed to litigation alone, excluding ADR). Australian Patentology blog is running a survey too, seeking opinions as to whether -- and if so to what extent -- people believe software patents should be granted. Click here for your (knee-jerk or carefully considered) response.


Bafana Bafana is a term that resonates in our hearts in much the same way as Vuvuzela resonates (still) in our ears: it's the nickname of South Africa's national football team -- but not for long, perhaps, if its exploitation as a trade mark for a range of clothing gathers momentum. Thanks, long-time reader Lee Curtis, for this link. Wonders Merpel, does Bafana Bafana mean (i) "Two strikers up front", (ii) "Sick as a parrot", (iii) "The Boys", (iv) "It's a game of two halves, Brian" or (v) "dyslexic bananas"?

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