Digital Opportunity Knocks ...

Yesterday was the hors d'oeuvres, today the main course -- and in the future we will no doubt receive our just desserts. The IPKat is of course talking about something that has been giving us food for thought for some time, something which many individuals and organisations have found hard to stomach, at least in prospect: the British government's response to Digital Opportunity, the somewhat rushed review of some bits of IP in the digital era by Professor Ian Hargreaves and his colleagues [IPKat summary of the Top Ten recommendations here; responses to Hargreaves here and here; Parliament debates Hargreaves here].

Yesterday's hors d'oeuvres was the report in the Guardian with the headline "Vince Cable: government plans to block illegal filesharing sites unworkable: Business secretary to intervene in Digital Economy Act debate in speech and expected to overhaul restrictive rules on file copying". It predicted confidently:

"Vince Cable, the business secretary, will say on Wednesday that government plans to block illegal filesharing websites under the controversial Digital Economy Act are in effect unworkable.

Outlining the government's response to the Hargreaves report on the future of UK copyright law, Cable is also expected to announce legislation to sweep away restrictive rules on file copying and parody works. ...

Cable will row back on one of the act's most contentious measures – introducing legislation to block access to copyright-infringing websites – and instead suggest that the existing Copyrights, Design and Patents Act is powerful enough.

That follows last week's landmark high court ruling [noted by the IPKat here and by the 1709 Blog here], which forced BT to cut off access to Newzbin2, a site found to be infringing copyright "on a grand scale".

Cable's intervention comes as ministers struggle to implement anti-piracy measures outlined by the Digital Economy Act rushed through by the Labour party at the end of its time in office.

The first warning letters to be sent to Britons accused of illegal filesharing are now not due until the second half of 2012 – more than a year later than originally planned.

A series of legal challenges have meant that cutting off the internet connections of serial pirates is unlikely to begin until 2013 at the earliest.

Cable is also expected to announce a "scoping review" into the viability of a setting up a digital copyright exchange [which will "never happen", per Andrew Orlowski, in The Register], one of the key proposals of the Hargreaves report published in May – in effect kicking the idea into the long grass. ...

Would protection of parodies and spoofs
extend to humorous and out-of-context
deployment of artwork, such as an
'Opportunity Knocks' photo to illustrate
the title of this blogpost?

The government is anticipated to legislate to sweep away many of the UK's archaic intellectual property restrictions that make it technically illegal to transfer content from CDs or DVDs to other formats, such as iPods. The reforms will also make it legal for Britons to burn copies of music and video files for family members to use, and give legal protection to spoof works [They already have protection as original copyright works: this refers to protection from the owner of the 'spoofed'(?) work]. ...

Cable is expected to outline further changes to the DEA, including how costs are apportioned between rights holders and ISPs. The judicial review ruled in April that ISPs should not foot the bill for setting up an appeals body....".

Today, the Intellectual Property Office has posted on its website the news that the government accepts all ten of Hargreaves' recommendations. The full response can be downloaded, parodied and file-shared here. According to the operative parts of the accompanying press release

"... Ministers have accepted the recommendations made in an independent review which estimate a potential benefit to the UK economy of up to £7.9 billion.

... Announcing the Government's response to the review, Business Secretary Vince Cable said:

"The Government is focused on boosting growth and the Hargreaves review highlighted the potential to grow the UK economy. By creating a more open intellectual property system it will allow innovative businesses to develop new products and services which will be able to compete fairly in the UK's thriving markets for consumer equipment. 

We are accepting the recommendations and will now set about reforming the UK's intellectual property systems. Opening up intellectual property laws can deliver real value to the UK economy as well as the creators and consumers."

Among the recommendations that have been accepted are:

Get your digits exchanged here!

• The UK should have a Digital Copyright Exchange; a digital market place where licences in copyright content can be readily bought and sold. The review predicted that a Digital Copyright Exchange could add up as much as £2 billion a year to the UK economy by 2020. A feasibility study will now begin to establish how such an exchange will look and work. The Government will announce arrangements for how this work will be driven forward later in the year [This Kat bets it will cost more to run, in terms of setting up and administering the system, legal advice and uncertainty among rights owners and prospective users, than it will ever save or earn -- unless it could conveniently have extraterritorial effect so that holders of copyright licences who put licensed material online won't end up being sued in France, for example, for copyright infringement]. 

• Copyright exceptions covering limited private copying should be introduced to realise growth opportunities. Thousands of people copy legitimately purchased content, such as a CD to a computer or portable device such as an IPod, assuming it is legal. This move will bring copyright law into line with the real world, and with consumers’ reasonable expectations [Whether this proposal is enacted or not is unlikely to make much difference in terms of the £7.9 billion potential boost to the British economy, since it only legalises what people already do and don't get sued for]. 

• Copyright exceptions to allow parody should also be introduced to benefit UK production companies and make it legal for performing artists, such as comedians, to parody someone else's work without seeking permission from the copyright holder. It would enable UK production companies to create programmes that could play to their creative strengths, and create a range of content for broadcasters. [While the Kat is pleased with this, he wonders how much of an economic impact it's likely to make. Are there any sums? How much is spent in negotiating licences to parody a work under the existing law?]

• The introduction of an exception to copyright for search and analysis techniques known as 'text and data mining'. Currently research scientists such as medical researchers are being hampered from working on data because it is illegal under copyright law to do this without permission of copyright owners. The Wellcome Trust have said that 87 per cent of the material housed in the UK's main medical research database is unavailable for legal text and data mining, that is despite the fact that the technology exists to carry out this analytical work. [The recommendations don't explain what exactly is meant by this term, so readers should refer to the original Hargreaves review, which they may find more helpful than the more technical Wikipedia entry for it]

• Establishing licensing and clearance procedures for orphan works (material with unknown copyright owners). This would open up a range of works that are currently locked away in libraries and museums and unavailable for consumer or research purposes. []

• That evidence should drive future policy [this isn't a finding, but a mantra which has been chanted regularly since the Gowers Review in 2006]- The Government has strengthened the Intellectual Property Office's economics team and has begun a programme of research to highlight growth opportunities. One report has already shown that investments made by businesses in products and services that are protected by intellectual property rights (IPRs) are worth £65 billion a year [This isn't evidence, this is speculative maths. The government should make it plain that it is willing to entertain factual evidence even if it is presented by representative bodies and make it plain that it won't be barred from consideration as an exercise in "lobbynomics". Some groups -- Small and Medium-Sized Enterprises among them -- don't have the resources to spend their time endlessly compiling evidence for government reviews, reports and initiatives].

Alongside the Government response, a new intellectual property crime strategy [which in the long term is probably far more important than the headline-hitting news about home copying] and international strategy for intellectual property have been published.

The crime strategy outlines how the Intellectual Property Office will continue to enforce IP crime issues domestically. Counterfeit goods often use other company’s trade marks or infringe their copyright, which can lead to financial losses. The international strategy sets out the UK's five year vision to get the international IP framework in the best possible shape to support innovation and growth. Patent backlogs cost the global economy up to £7.4 billion a year" [This Kat has always taken a cynical view of assessments of how much the patent backlog costs the global economy -- though that's not a reason for leaving things as they are. Patent Prosecution Highways, shared examinations, and applicants filing more intelligible applications can all contribute to this].

This Kat will be pleased to hear readers' responses. He plans a follow-up -- and he won't be surprised at all if his fellow Kats plan to do some blogging of their own on this hot topic.

Some landmarks in the Land of Digital Opportunity
Ofcom's first consultation on the "three strikes" approach to file-sharers here
Proposal on how to split enforcement costs between ISPs and copyright owners here
Attempt by BT and TalkTalk to get a judicial review of the Digital Economy Act 2010 here
Newport State of Mind here and here

Those scams again: signs of progress

Apart from bees buzzing, lawn-mowers growling and [in England] wickets falling, one of the sounds of the summer is the chinking of wine-glasses as IP scammers come together to celebrate the gullibility or negligence of patent and trade mark applicants and the inertia or indifference of the legal authorities that leave them to their pestilential if profitable pleasures.   Readers who are new to this weblog or who do not know what is meant by IP scammers in this contest can read up here, here and here for a little background.

The fight against the scammers continues.  The first piece of good news comes from Germany, where IP blogger Michael Thesen (patent attorney at Beetz & Partner, Munich) posted this item under the heading "Scammy Trademark Registers - We're Ready to Rock and Roll!" While Merpel was most disappointed to see that it had nothing in it about either Rock or Roll, it was good news nonetheless. Writes Michael:

"It appears to be a lucky coincidence of circumstances that the IPKat has fantasized ... on fraud investigations initiated by a bank against scammy trademark- or patent registers sending out demands for payments with an "official" appearance to credulous applicants and that the OLG Köln has decided in the file 6 U 166/10 on such a case.

I think that every patent attorney has experience with clients coming up with this kind of letter and the WIPO holds an impressive register with samples thereof. Until now, I have simply recommended to throw the letter into the bin.

The intersting point for me in the OLG Decision mentioned above is that the plaintiff was a patent and trademark law firm. Yes, indeed, we are competitors of these people and are - ourselves - entitled to fire of all the competition law guns we usually fire off in the name of our clients in our own name. Here we go!

Besides, it's the overall appearance giving the documents an "official touch" which is considered an avoidable deceit on the origin thereof and thus the same legal concept as the one discussed in my last post, which turns out to be impressingly versatile".

Thanks, Michael, for letting us know about this -- and sorry it has taken so long to get round to sharing the news!

Broadgate Tower

Next, courtesy of Alasdair Poore (past President of the Chartered Institute of Patent Attorneys, author of the PPC Pages and a partner in Mills & Reeve), comes a draft of a letter which was never actually sent but which someone one day might just want to utilise.  This particular draft was to be aimed at an outfit called the Intellectual Property Agency which gives an address as 12th Floor The Broadgate Tower, 20 Primrose Street, London EC2A 2EW.  It reads as follows:

Dear Sirs 

Re: Intellectual Property Agency – Invoice for Renewal of Trademark 

We act for [ ] (the “Proprietors”)

The Proprietors are, as you know, the registered proprietor of the UK Trade Mark No. [ ]. You sent to the Proprietors a document dated [ ] purporting to be an “initial trade mark renewal reminder” for this trade mark – in fact at a time when no renewal could be made for the trade mark. 

On receiving this document, our Client believed it to be from the official government agency responsible for trade marks, the Intellectual Property Office, and, on the basis that he was entering into an arrangement with the government agency, signed the renewal document and returned it to you. 

The initial trademark renewal reminder is clearly intended to lead the reader to believe that it is from an official “agency”, in this case the Intellectual Property Office. Amongst other things, the use of the very similar title (“Intellectual Property Agency”), when the IPO is indeed a government agency, the logo in the form of the “scales of justice”, which is clearly intended to convey an official character, as well as the use of other features which are intended to convey official formality, such as the ADP number (the identification number of the registered proprietor at the UK IPO) are evidently designed to lead readers to understand that the organisation sending this reminder is the official government trade mark organisation. 

Accordingly, your letter contained false representations which were specifically intended to mislead recipients. In this case they did mislead the recipient. Accordingly your actions amount to an offence under section 2 of the Fraud Act 2006, that you made false representations that Intellectual Property Agency (the “IPA”) is the official government trade mark organisation (in this case in the UK), and your representations were clearly intended to make a gain for yourself and, additionally, cause loss to another. 

Furthermore, these actions also amount to an offence under regulation 6 of The Business Protection from Misleading Marketing Regulations 2008, by advertising the IPA in a way which is likely to deceive, and indeed has deceived, the recipient of the advertising. 

You may seek to assert that, if a detailed examination of the “renewal reminder” were carried out, it would be apparent that it was from a private company. However, it is clear that your intention was to deceive. There are many indications that you are not seeking to represent yourself as a bona-fide service provider. For example, in addition to the content of the “reminder”, your web site uses an “.org” domain – rather than “.com” or “.co.uk” which might normally be expected to be associated with private commercial organisations, and if you hover over the “INTELLECTUAL PROPERTY AGENCY” and “scales of justice” logo on your web site, it gives the name “European trademark organisation”. 

Accordingly it is clear that you are intending and expecting that recipients of your “reminder” will be misled into thinking that they are dealing with the official organisation. In the circumstances, in addition to the issues highlighted above, there is clearly no binding agreement between the Proprietors and yourselves to pay any sum, and you are not entitled to seek to invoice the Proprietors for any amounts. 

Please confirm therefore by return that you agree that our Client has no liability in relation to this alleged transaction. In the meantime, all our Client’s rights are fully reserved. You should be in no doubt that our client will fully resist any further claim for payment from you. 

Please acknowledge this letter by return, and provide the requested confirmation within 7 days, failing which our client reserves the right to take further steps to protect its position, without further notice. 

Please direct all further correspondence on this matter to ourselves, and ensure that your debt collection organisation does the same. 

Yours faithfully"

Finally the IPKat is delighted to hear from his tweeting friend @IPKenya that the Kenya Industrial Property Institute (KIPI) appears to be the first in Africa to publish a scam alert on its website. The alert reads:

"CAUTION -SCAM ALERT! 

It has come to the notice of the Kenya Industrial Property Institute|(KIPI) that certain unscrupulous entities and individuals have attempted to mislead users of the World Intellectual Property Organization's (WIPO) services into paying fees for services having nothing to do with the processing of their applications. These entities primarily target international patent applications under the PCT as well as users of the Madrid System for the International Registration of Trademarks. 

Applicants are therefore advised to treat with caution any invoices or other requests for payment of fees from entities whose identities cannot be verified or give rise to suspicion. 

For any further clarification, please contact the Managing Director by email at info@kipi.go.ke or kipi@swiftkenya.com or visit the WIPO website at http://www.wipo.int/pct/en/warning/pct_warning.html 

Dr. Henry Kibet Mutai, Managing Director"

Well done, Kenya! It's good to know that you're fighting the good fight!

HOT "Video amateur Employee owned Gresik

Approaching not Care How Fasting Month .. Still in many places there is still a practicing nasty, not half-hearted, this time appears again Video Amateur Employee owned Gresik. Police Police Resort Kebomas Gresik has fielded a team associated with the release of intel video amateur employee BUMN Gresik. SOE employees Gresik hot video is already circulating in society Gresik.

KKebomas Kompol police chief told reporters on Yulianto video amateur employee BUMN Gresik "We did not know and have not received information regarding the circulation of a video nasty which the cast performed by one of SOE employees are circulating in the community."
Added Kompol Yulianto, up to now can not comment much associated with the video nasty bumn gresik the employee. However, the staff promised to immediately reveal who distribute video nasty so people can get the recording.

"Essentially we can not comment much because we do not know. But feedback from our reporters soon follow, "he said.

Just a note, a resident of the city of Gresik digegerkan by the circulation video Gresik nasty SOE employees who allegedly committed employees one of the State-owned enterprises (SOEs). Video nasty that lasted 12:06 minutes since three days ago (07/28/2011) already circulating in society Gresik.

In the video a pair of men who had the initials HD (49) employees of a state-owned company doing dirty deeds with a woman in the bathroom. Recorded video camcorders done in time not too long.

"Moving in residents since three days ago, previously only circulated in the Blackberry (BB) belongs to the citizens," said resident who declined to be named.
There are allegations video amateur employee BUMN Gresik was recorded in one of hotels in Surabaya, but then leaked in the hands of citizens Gresik. Based on the information gathered, the man with the initials HD located in a residential district Kebomas, Gresik. At the beginning of the fasting month again really outstanding video nasty, nasty video case Kebumen vocational students also have not been revealed, is now circulating more video nasty Gresik employees.
Sumber

Musicians Indonesia Ari Lasso Attract ABG 15 Years

Who No Know By Ari Lasso .. The former vocalist Dewa 19 is Starting cariernya in the music world. ari lasso and is now trying to pursue a solo career after leaving the group band Dewa 19.
After the duet Lestari Bunga Citra Ari Lasso now has a new female friend to work. He is now holding 15-year-old ABG named Ariel Tatum.

Ari mengaku kalau Ariel adalah putri dari sahabatnya. Saat ini,

Ariel bersekolah di SMA Harapan Ibu kelas 1.

Ari dan Ariel berduet dalam lagu 'Karena Aku Telah Denganmu'.

Ari menilai Ariel memiliki suara yang unik.

Ari berpose bareng Ariel di depan para juru foto.

Ariel yang juga merambah dunia sinetron itu mengaku beruntung

bisa duet dengan Ari. Ari adalah salah satu idolanya dalam bermusik.

Sumber : Hot.detik.com

Scottish Court tells Schuh to Shush

A Shhh ...

While the Louboutin litigation against Yves Saint Laurent (here) has captured the soles of the American nation, back in Europe there is also something afoot, if news from Scotland is anything to go by.  From the Land of the Glens comes the judgment of the Glennie in the form of Schuh Limited v Shhh... Limited, a decision of the Court of Session in which the IPKat's friends Susan Snedden and Gill Grassie (Maclay Murray & Spens LLP) acted for the victorious party.  Explains Susan:

"Last week, while the English courts were busy issuing copyright judgments, the Scottish Court of Session was focusing on a trade mark and passing off dispute between two shoe retailers -- Schuh Limited (the pursuer: that's the Scottish term for 'claimant') and Shhh… Limited (the defender: that's the Scottish term for 'defendant').  Shhh… successfully defended an application by Schuh for interim interdict (the Scottish term for 'injunction') which, if granted, would have prevented Shhh… trading under the “Shhh…” brand.

Background 

Schuh are a well known shoe retailer with over 75 stores in the UK. Catering for the "casual athletic and footwear" market and enjoying a core customer base of 15-24 year olds, Schuh hold a number of registered trade marks including (i) a UK word mark for SCHUH”in various classes, including footwear in Class 25, and (ii) a Community trade mark for logo comprising the word “schuh” in green lower case stylised font against a black and grey oval. Schuh claimed that their name is frequently mispronounced as “shush”. 

Shhh… is a new shoe retail business run by Steven Moffat, an internet entrepreneur (you find out more if you visit www.shhh-oohs.co.uk). Shhh… planned to open a series of “secret” boutiques in both Scotland and England, selling exclusive couture shoes to a select number of female customers. The concept behind the brand is “Shhh... it's a secret”, the boutiques being in exclusive, unobtrusive locations. Customers will be permitted entry to the boutiques by invitation or appointment only. 

Moffat began preparing to trade as Shhh… as far back as November 2010; his company had. been carrying out marketing activities in relation to the brand for some time, and a Shhh… Facebook group has already attracted over 2,300 members. 

Court proceedings 

Schuh became aware of Shhh… in May 2010. After their trade mark agents sent Moffat a letter before action, they raised proceedings for an interim interdict against Shhh… on an ex parte basis. However the judge, Lord Glennie, decided that Shhh… should have an opportunity to defend the action; the case was continued for a few days to allow Shhh... to prepare a defence. 

Schuh based their case on sections 10(2) [= similar marks, same goods + likelihood of confusion] and 10(3) [similar marks + detriment to repute or distinctive character without due cause] of the Trade Marks Act 1994, and on passing off. They also claimed that the balance of convenience favoured granting the interim interdict, on the basis that Shhh… had not yet started trading, Shhh… had had early warning of Schuh’s concerns about their trading name and damages would be impossible to quantify. Shhh… argued that the marks were not similar. In any event, there was no likelihood of confusion, unfair advantage or detriment, and no passing off. Further, the balance of convenience favoured refusing the interim interdict. 

Lord Glennie’s Decision 

Lord Glennie found against Schuh in respect of almost every aspect of its case and refused to grant the interim interdicts sought. 

First, as regards both s10(2) and s10(3), although he found the parties’ goods to be similar, he concluded that the pursuers had not made out a prima facie case that Shhh’s sign was similar to either of Schuh’s trade marks:

“Not only are they spelt differently but they give a different impression, [Schuh's] mark being closed in contrast to the open-ended expectancy suggested by the "..." at the end of the “Shhh". Aurally they sound different, even if account is taken of the frequent mispronunciation of their name adverted to by [Schuh]. Conceptually they are very different. As Mr Moffat put it, “SHHH is a secret. SCHUH is a shoe.” …I can see no reasonable prospect of [Schuh] establishing that the signs or marks should be regarded as similar.”

Schuh had not made out a prima facie case in terms of s10(2). Even if the court had been persuaded the marks were similar, "...it is difficult to see what confusion is likely to arise in the mind of the reasonably well-informed, circumspect and observant average consumer...”, having regard to the factors to be considered in the overall global assessment set out in previous authorities. 

Schuh’s claim based on s.10(3) also failed. Had the marks been found to be similar, Schuh would have failed to establish that the use by the defenders' of the mark "Shhh..." would be "detrimental to the distinctive character or repute of the pursuers' mark". The pursuers did not plead or lead any evidence of any (serious) likelihood of an alteration to consumers’ economic activity. As regards unfair advantage, Lord Glennie stated that the pursuer’s case was supported by only the “barest” of pleadings, and his findings in respect of similarity and confusion meant that it must fail. 

Very little was said by Lord Glennie in respect of Schuh’s passing off claim. Due to the reality of the absence of similarity between both marks and thus, an absence of any real likelihood of confusion, it was stated that “...the pursuers cannot show a prima facie case [of passing off] either.” 

The Kats' favourite footwear

Lord Glennie added that he would in any event have refused the interim interdict on the balance of convenience.There was very little chance of Schuh suffering any damage. In contrast, the granting of an interim interdict would have "...render[ed] [Shhh…’s] intended business stillborn" as a result of the resultant wasted expenditure on preparations to trade. Further, “...in any event, the grant or refusal of interdict in this case is likely to be the end of the matter, certainly if interdict is granted since [Shhh…’s] business will collapse” As such, even if Schuh did in fact have a prima facie case, it was “...so weak that it would be wrong to impede and risk destroying [Shhh…’s] business” by granting the interdict. 

The willingness of the court to give such a decisive judgment at a very early stage in the case is a clear sign of the Scottish courts’ proactive commercial approach to IP enforcement".

Hush Puppies from Schuh here
Shhh ... you know who here
The King's Speech here

Monday miscellany

Try doing this when you've
only got paws!

The IPKat has just heard today that the total number of people who have registered for the half-day seminar on Initial Interest Confusion -- that US doctrine which we now seem to have migrated to Europe -- that he's so excited about has now reached the 43 mark. If you've not yet signed up and hope to do so, the details are all here. Don't leave it too late: the lunch is delicious but this Kat is useless at cutting cucumbers at speed.

Do we have an issue
with initial interest
confusion?

ATRIP is the International Association for the Advancement of Teaching and Research in Intellectual  Property, an organisation which this old Kat holds close to his heart since he is one of its founder signatories and was, back in the 1980s, Secretary when Professor William Cornish was President.  Anyway, the Kat learns that the 30th ATRIP Congress has just concluded in Singapore, where it was "benignly hosted by the IP Academy of Singapore and the Law Faculty of the National University of Singapore". The new President elect: is Professor Tana Pistorius and incoming members of the Executive are Professors Daniel Gervais, Susy Frankel, Loy Wee Loon and Jens Schovsbo.  They join re-elected members Professors José Antonio Gomez Segade, Christian LeStanc and Alberto Musso, not to mention the re-elected Treasurer Professor Alexander Peukert. The new President is Professor Graeme Dinwoodie, was installed as the new President of ATRIP for the period 2011-2013. Congratulations, everyone, and well done Professor Jan Rosén, who now steps down as President and can get back to normality!

Serbia welcomes legal software

A headline that caught the Kat's attention comes from the useful and entertaining IP newsletter which originates from his East European friends at Petosevic. The headline, attached to this news item, is "Serbian Scientists to Get Genuine Microsoft Software". He is embarrassed to confess that his first thought was to wonder whether they would know how to use the legal version.  Anyway, it seems that the Serbian government has struck a deal with Microsoft to supply the real thing to all scientists who participate in programmes financed by the Serbian government in the next four years. It is believed that a "significant discount" was negotiated, in a jurisdiction in which "a considerable amount" of locally used software is said to be illegal.  Merpel notes that the British tendency towards understatement appears to be spreading to the East.

Reading the book is the easy bit.
Don't forget the review
(source: Cartoon Clip Art)

Books for review. Just to remind you, the Journal of Intellectual Property Law & Practice's new policy for transparent and efficient reviewing of intellectual property books is here -- and another five books are up for review here. It may all seem a little tough, but the time has come to make sure that books are reviewed while they are still current, and that people shouldn't think that the receipt of a review copy is some some sort of reward for long service.  Behind every copy of a book that isn't reviewed is a disappointed author and a frustrated publisher!

Around the weblogs.  The 1709 Blog carries a special offer for its readers -- Edward Elgar Publishing is offering a generous 35% discount to anyone who buys one of its four latest copyright titles before 31 October 2011.  Details of the offer can be found here.  This week's A to Z tour of official African IP websites goes to Cameroon, where there's definitely more going on than in Burkina Faso or Burundi: details here.  IP Watch brings news of an accord between the European Union and India on that most sensitive of topics, the manner and extent to which EU customs authorities can stop the passage of generic pharmaceutical products on their somewhat indirect route from where they're made to where they are intended or supposed to be sold.  Censorship in Australia is the topic of Simone Blakeney's hot-off-the-press post on Art & Artifice. Oh, and IP Draughts has another dose of howlers made when preparing a document for signature. 

Rumours. The Kat has wondered about who might be replacing the recently-elevated pair of Patents Court judges for England and Wales (see here for news of the elevation).  Someone has whispered in his ear that it might be worth putting a few quid on Mr Justice Vos to move over to the Patents Court. He is believed to have something of a science background and was recently given a fairly easy intellectual property dispute to handle in United Airlines Inc v United Airways Limited, noted by this Kat here. The other vacancy may then be filled from within the worthy ranks of the IP bar. Or then again, it may not ...

Provision potentially "toothless" and "not very well thought-out": a less than ringing endorsement for s68 PA 1977

The Kat brings news of the decision of the Court of Appeal (Sir Robin Jacob providing a judgment with which Ward and Patten LJJ agreed) in the latest round of the Schütz v Werit dispute ([2011] EWCA Civ 927) – this time on the interpretation of s68 PA 1977. The judgment was handed down on Friday but has not yet made it onto Bailii – it is currently only available via the subscription-based Lawtel service.

Readers may recall the main dispute, handed down on 31 March 2011 ([2011] EWCA Civ 303 – noted by the IPKat here), concerning the “re-bottling” (i.e. replacing the old bottle with a new one from the same manufacturer) and “cross-bottling” (i.e. replacing the old bottle with one from a different source) of intermediate bulk containers (such as the one to the right). The Court of Appeal (Ward, Jacob and Patten LJJ) held the challenges to the patent’s validity failed and that Werit was infringing. However, shortly before the official date at which the judgment was handed down (but after the parties had received the draft judgment) Werit informed Schütz that it would be taking a point under s68 PA 1977.

The patent in question was owned by Protechna, a Swiss company, and Schütz was the exclusive licensee. As an exclusive licensee, Schütz had standing, under s67 PA 1977, to bring an action for patent infringement – having “the same right as the proprietor of the patent” in this respect. The problem was this: the license agreement was entered into at some point in 1994, but was only registered at the Patent Office in July 2008, just before the infringement action was commenced against Werit. As readers will be aware, the effect of non-registration of a transaction of this kind is detailed in s68 PA 1977. Section 68 states that:

"Where by virtue of a transaction …[etc] a person becomes the …exclusive licensee of a patent and the patent is subsequently infringed, before the transaction …[etc] is registered, in proceedings for such an infringement, the court …shall not award him costs or expenses unless -

(a) the transaction, instrument or event is registered within the period of six months beginning with its date; or

(b) the court or the comptroller is satisfied that it was not practicable to register the transaction, instrument or event before the end of that period and that it was registered as soon as practicable thereafter."

s68 was amended with effect from 29 April 2006 by the Intellectual Property (Enforcement etc) Regulations 2006 – itself required so as to comply with the UK’s obligations under Art 13 and 14 of the Enforcement Directive (2004/48/EC). Prior to this point, s68 prohibited the unregistered exclusive licence holder from being awarded "damages or an account of profits" rather than "costs or expenses". The infringement complained of in the main case covered both pre- and post-amendment periods.

Werit contended that Schütz was accordingly not entitled to financial compensation for any infringement occurring prior to 29 April 2006, and was also not entitled to costs. Schütz, as might be expected, took a different view, arguing that it was too late for Werit to take the s68 point at all, and that even if this was not the case it was still entitled to its costs.

Was it too late?
Werit had argued that s68 provides a complete bar on the court’s power to award costs and so it did not matter whether the point was pleaded in a timely fashion, or not. The Court agreed – as Sir Robin Jacob explained:

[16] “The purpose of the section is to make people register relevant transactions timeously. Any benefit to the defendant is happenstance. The section is not framed in terms of a defence which is there to be taken: the section says “the court shall not.”…

[17] “That being so it is unnecessary to consider whether s.68 had been properly raised.”

The construction of s68

Werit argued that on the proper construction of s68 Schütz were precluded from being awarded costs. It described the section as putting the matter to the patentee's (or in this case, exclusive licensee's) election: “if he wants damages for the non-registration period he must forego costs; if he wants costs then he must forego damages for the period of non-registration.” Accordingly, the argument went that in order to claim costs Schütz must have restricted their claim for compensation to the period following registration. This had not been done and so Schütz must go empty-handed.

The Court did not agree. As a matter of construction, Sir Robin Jacob considered that:

[22] “…You would need extraordinary (sic) powerful words to say that the patentee or exclusive licensee was turned into some sort of outlaw who could never get costs however wrongly the defendant behaved and even though all the defendant’s acts were done after registration….”

The true construction of the section was “much more straightforward”. As the Court explained,

[21] “…It is simply this: if and in so far as a claim covers a period for which a relevant transaction was not registered when it should have been (a “non-registration period”) then any const incurred during that period cannot be recovered. Costs for periods outside a non registration period are recoverable in the same way.”

Adding

[25] “There is nothing unfair about awarding a successful party its costs incurred after it has put its house in order by registering a transaction which should have been registered earlier….”

Werit’s argument that this approach might render s68 ineffective – in that an exclusive licensee who failed to get its licence registered would not lose much in the way of costs provided he remedied this situation by the time he started the action – was not considered to sway the matter. Despite agreeing that this could render the legislation toothless, the Court noted that whilst:

[27] “That is true …the previous legislation in most cases was not exactly toothy and in some cases would be toothless too. If a patentee or an exclusive licensee had failed to register the relevant transaction timeously but did so as soon as he learned of infringement or threatened infringement he would not have lost much, if anything save perhaps where the infringement was surreptitious and on a large scale. In the real world that is a rare event.”

The fact of the matter was that s68 was “not a very well thought-out piece of legislation” in either its current or original form. In respect of the period before amendment of the provision, it was agreed that Schütz was barred from claiming compensation. This said, the Court considered that there was no disability as regards costs in respect of this period. Parliament did not intend to lump one on top of the other when altering the provision.

So Shütz lost some of its costs and some of its damages, but maintained the lion’s share of the former as these would inevitably have been accrued in the run-up to trial (by which time the transaction had been registered).

However, this is not the end of the matter as, for reasons known only to themselves, on 26 November 2009 a further agreement was made between Schütz and Protechna (the patentee) replacing the existing exclusive licence with a further exclusive licence which was then not registered (says Merpel: there's a theme developing here). The Court (reluctantly) adjourned consideration of this issue for argument on the question of costs in the period after this date. We'll be seeing this one again.