31 August 2014

Who's Pink - Thomas Pink or Victoria's Secret?

In Thomas Pink Limited v Victoria's Secret UK Ltd [2014] EWHC 2631 (Ch) (31 July 2014) Mr Justice Birss had to resolve a dispute between two well known retailers. The claimant was Thomas Pink which had started life as a specialist shirt maker in Jeremyn Street. It is now part of the LVMH Group the interests of which range from champagne to fashion.

The defendant was Victoria's Secret UK which is best known for its bras and knickers particularly in the US where it began.

Both retailers are diversifying their businesses.  Thomas Pink's website has a section for "Women" after "New Collection", "Men", "Shirts", "Ties" and "Accessories" while Victoria's Secret is moving into women's clothing generally.

The Dispute
The battle arose over the right to use the word "Pink" as a brand. According to Wikipedia the claimant was named after Thomas Pink, an 18th-century tailor, who made the hunting coats worn by Masters of Foxhounds, whippers-in and huntsmen which are still called hunting pink even though they are actually scarlet in colour. The defendant has launched a new brand in the USA called Pink aimed principally at young women of college age which it wished to bring to Europe. To promote the PINK brand Victoria's Secret had opened a number of shops in the UK under that sign. In his judgment Mr Justice Birss exhibited photographs of one of the claimant's shops (top left) and one of the defendant's to the right.


Thomas Pink's Trade Marks
The claimant had registered the following Community and British trade marks:
  • EU 3,949,906 for a range of goods in classes 3, 14, 18, 25, 26 and 35; and 
  • UK 2,565,078 for a range of goods in classes 14, 18, 25 and 36.
It claimed sales under the sign PINK of between £23 and £28 million in the UK (and between £2 and £4 million in the rest of the UK) every year between 2005 and 2012 through its 35 outlets in the UK, its 2 in France and its further 2 in the Republic of Ireland.

The Issues
The claimant sued for infringement of its Community trade mark ("CTM") under art 9 (1) (b) and (c) of the Community Trade Mark Regulation and s.10 (2) and (3) of the Trade Marks Act 1994 and passing off. The defendant counterclaimed for the revocation of the CTM in relation to some of the specified goods on grounds of non-use and invalidation of the British mark on the ground that it was not distinctive.

The Counterclaim
The judge found that both the Community and British trade marks were valid. He held that the CTM had been put to genuine use for most of the goods for which it had been registered.  Though he decided that the British trade mark was not inherently distinctive at the time of registration he held that it had acquired distinctiveness through use. 

Trade Mark Infringement
Mr Justice Birss found that the defendant had infringed the claimant's Community and British trade marks under both art 9 (1) (b) and (c) and s.10 (2) and (3).

Art 9 (1) (b) and s.10 (2)
In determining whether the defendant had infringed the CTM under art 9 (1) (b) and the British mark under 10 (2) the judge considered the following factors:
"i) Average consumer
ii) Comparison between the goods or services
iii) What sign has the defendant used?
iv) Context of the use
v) Distinctiveness of the registered marks
vi) Evidence of actual confusion?
vii) Comparison between the registered marks and the signs
viii) Conclusions on likelihood of confusion."
At paragraph [117] he said:
"The likelihood of confusion is assessed from the perspective of the average consumer of the goods or services in question. The average consumer is always deemed to be reasonably well informed, observant and circumspect although his or her level of attention may vary depending upon the nature of the goods or services in question and how they are acquired. The average consumer is not a single person but represents a distribution of consumers; see the review of the law in this area by Arnold J in Jack Wills v House of Fraser [2014] EWHC 110 (Ch), paragraphs 63-65. Referring to Interflora v Marks & Spencer [2012] EWCA 1501 (Civ) the defendant emphasised that the average consumer test is normative and it falls to be applied objectively by the judge from the perspective of the relevant construct."
In this case the average consumer was a consumer of clothing and his lordship held that such a consumer has the following characteristics:
"i) The average consumer represents a spectrum of consumers who are from different backgrounds and shop in different ways; some will be tourists, others will be locals to an area, some will shop for themselves, and others will be buying a gift for someone else.ii) Although many consumers of clothing are very brand conscious that does not apply to all consumers. In my judgment the average consumer will exercise a moderate degree of attention to branding but will not scrutinise the fine print of swing tags and labels.
iii) Consumers of clothing vary enormously in their tastes and their means. At times in the argument the defendant appeared to be advancing a case which divided the average consumer into a consumer of low end clothing (who might buy the defendant's products) and a consumer of luxury clothing (who might buy the claimant's products). The extent to which this may be relevant to passing off is something which would only be relevant to that claim, but in relation to the question of registered trademark infringement for a mark registered for clothing it is not relevant. The average consumer represents consumers at all levels of the market.
iv) The average consumer represents both male and female consumers. In addition both sexes will buy products for themselves and for members of the opposite sex as presents.
v) Consumers of clothing shop in different contexts, sometimes people set out to buy a particular thing or to buy something for a particular occasion, but in other circumstances shopping is an end in itself and the consumer is simply browsing. As the claimant submitted, this is evidenced in large shopping malls such as Westfield or Bluewater or at a famous department store where shoppers might go and "have a wander" or perhaps drop into a shop which catches their eye.
vi) Where the average consumer shops in retail stores, he or she is likely to be drawn inside based on material visible from the exterior of the store including signage and promotions and in particular the name of the store and anything in the windows.
vii) Consumers come to expect that a shop front for example on a street or in a shopping centre represents a single store. Two shop fronts, even if adjacent, are not without some other indication going to be assumed to be linked to each other."
He then proceeded with the comparison of registered marks and signs and specified goods and goods for which the signs were used from the perspective of the average consumer and concluded that the use of the sign PINK as a label on clothing, at the point of sale, in promotional literature and on shop front fascias gave rise to a likelihood of confusion.

Art 9 (1) (c) and s.10 (3)
As for the claim under art 9 (1) (c) and s.10 (3) the judge considered the following factors:
"i) Reputation
ii) Link
iii) Due cause
iv) Detriment"
Since the defendant admitted that the claimant had a reputation at least in shirts. a link had been established for the claim under art 9 (1) (b) and s.10 (2) and detriment flowed from the link, the battle focused on due cause. The defendant argued it had used PINK in the USA for many years in essentially the same way it now sought to do in the UK and EU. It had due cause to use PINK in that way here because that activity was simply a natural extension of its substantial activities in the USA. It was not seeking to take advantage of Thomas Pink's rights. The goods it sold are distinct from the goods sold by the claimant. Although there had been a complaint by Thomas Pink in the USA some years ago there had now been co-existence there for a number of years and no evidence of confusion in the USA exists. Its US websites and catalogues have also made consumers here aware both of VICTORIA'S SECRET itself and PINK in particular.

Mr Justice Birss was not impressed. He said at paragraph [198]:
"The corporate group of which the defendant is a part has used PINK in the USA for many years in essentially the same way it now seeks to do in the UK and EU. From the defendant's point of view the activity complained of in this case is a natural extension of its substantial activities in the USA. It is not deliberately seeking to take advantage of Thomas Pink's reputation but the defendant did not pause to consider what the claimant's European or UK trade mark rights actually were before it launched here. It simply went ahead."
The Judge concluded "that the premise on which the defendant decided to enter the European market was adopted in good faith but it was wrong. A reasonable business knowing what the defendant knows now would not continue to act in this way."

Passing off
As the claimant had succeeded on trade mark infringement the judge did not consider that he needed to consider the case in passing off and decided not to do so.

Comment
As we have come to expect from Sir Colin since he was first appointed to the circuit bench some 4 years ago there is a lot of meat in his judgments and I have chosen to chew on some of the choicest bits. To my mind his formulation of the factors to be considered when making a similar signs and similar goods comparison has much to commend it and is an improvement on the formulation based exclusively on CJEU cases that are relied upon by hearing officers in our Trade Marks Registry. I found his identification of the average consumer particularly helpful. I also found his approach to the question of whether the defendant had due cause helpful. But this is a very long judgment and there is much in the transcript that I did not discuss for reasons of space which merits reading.

Should anyone wish to discuss this fascinating case or trade marks in general they are welcome to call me on 020 7404 5252 during normal office hours. They can also message me through my contact form, tweet me, write on my wall or message me through G+ and Linkedin at any other time.

07 August 2014

Monkey Business - copyright in a photo where the shutter is operated by an animal

























Can a monkey own copyright? Clearly not. At least not in England in at any rate for two reasons. First, a photograph is an artistic work (see s.4 (1) (a) of the Copyright Designs and Patents Act 1988 ("CDPA")) and s.1 (1) (a) makes clear that copyright subsists in an artistic work only if it is original. Now the threshold for originality is very high but it does connote independent skill and labour which goes beyond monkeying around with a smart phone button. Even if the monkeying is done by a human being. Indeed even if it is done by a photographer. The other reason is that s.1 (3) provides that
"Copyright does not subsist in a work unless the requirements of this Part with respect to qualification for copyright protection are met (see section 153 and the provisions referred to there)."
Well those qualifications relate to nationality, residence and incorporation. Monkeys just don;t meet any of those criteria.

What about the camera or smart phone owner? If the monkey put its paw through a car window and grabs the device which I have seen happen in Gibraltar (where my learned friend Mr David Hughes sometimes hangs out) I don't think there will have been any expenditure of skill or labour and certainly not enough to give the camera owner copyright.

But if you set up the camera and train the monkey as Mr David Slater claims to have done (see "British photographer in Wikipedia monkey selfie row" 7 Aug 2014 BBC website) it may be different,  Slater might find some support from the decision of His Honour Judge Birss QC (as he then was) in Temple Island Collections Ltd v New English Teas Ltd and another [2012] EWPCC 1 (12 Jan 2012) (see my note "Copyright in Photographs: Temple Island Collections and Creation Records" 15 Jan 2011).

According to press reports Slater claims to have lost £10,000 from the reproduction of the photo without his permission. That would just bring him within the jurisdiction of the small claims track of the Intellectual Property Enterprise Court (see "The New Small IP Claims Jurisdiction" 5 March 2012) where the amount of costs that one party can recover from another are limited to a few hundred pounds.  The procedure is designed for litigants in person and the judge has the same power to grant an injunction at the end of the hearing as any other.  If I were Mr Slater I'd be sorely tempted to give it a go.

03 August 2014

Ifejika v Ifejika - another case about design rights and contact lenses





















In Ifejika v Ifejika and another [2011] EWPCC 31 (23 Nov 2011) His Honour Judge Birss QC (as he then was) ordered among other things an inquiry (or alternatively, by implication, an account) in relation to a lens care product the design rights in which he held to have been infringed by the claimant's brother by of a competing product. The claimant elected an account of profits and this came on before HH Judge Hacon on 17 June 2014 (Ifejika v Ifejika and another [2014] EWHC 2625 (IPEC) (31 July 2014)).

This case is interesting for two reasons. First, it was an account of profits rather than an inquiry as to damages. Accounts are not common in intellectual property cases. Secondly, neither side was legally represented at the hearing so the judge had to do justice as best he could. He was therefore bound to explain the principles by which an account is to be taken.

A factor that might have applied in other circumstances was that the defendant could have applied for a licence of right under s.237  of the Copyright, Designs and Patents Act 1988 which would have limited his liability to twice the amount payable by way of licence fees (see s.239 (1) (c) of the Act). In this case it made no difference because the judge did not think there was a realistic prospect that the Comptroller would settle a licence at less than 1% of the net profits made from the sales of the infringing products.

In computing the sums payable by the defendant His Honour considered the extent of the infringement. Only one feature of the claimant's design had been infringed and the parties disputed whether that feature was an important part of the product. The defendant argued that the feature was "physically a very modest part of the totality" of the product and suggested that the correct proportion of net profits to be attributed to that feature was 1%. The claimant described the feature as the "central hub" of the design and rejected the 1% figure without suggesting an alternative. The judge took a broad brush approach:
"32. I accept [the claimant's] implied submission that it is not appropriate to assess the proportion of profits to be attributed to the undercut feature solely by its physical proportion to the whole, which is in any event hard to gauge. Its functional importance is relevant. But I am not in a position to assess in detail whether it is, as [the claimant] submitted, a key functional feature or whether, as [the defendant] submitted, it plays a marginal role.
33. I have come to the view that the figure of 2% of net profits is about right on the basis that I doubt that the undercut feature is quite as insignificant as [the defendant] suggests, but as best as I can judge, more than doubling [the defendant's] figure of 1% would be going too far in allotting importance to the feature. That means that the relevant profit made by [the defendant] from the sale of the infringing .... products was 2% of £790,000, which is £15,800."
He thus ordered the defendant to pay £15,800 to his brother.

This decision should put an end to litigation that has rumbled on since 2008. Judge Birss QC set out the history in Ifejika v Ifejika and another [2011] EWPCC 28 (6 Oct 2011) when he heard an application to adjourn the trial:
"The case began in the High Court on 21st February 2008. The case came before HHJ Fysh QC sitting as a judge of the High Court in 2009 and in a judgment in October 2009 HHJ Fysh cancelled the Registered Design. Victor Ifejika appealed and his appeal was successful. The Court of Appeal reinstated the Registered Design (see the judgment of Maurice Kay, Rix and Patten LJJ [2010] EWCA Civ 563). The matter then proceeded in the High Court (Patents Court). Mr Justice Floyd transferred the matter to the Patents County Court in early 2011. The case first came before me on 10th March 2011. On that occasion I heard Victor Ifejika and Charles Ifejika in person. Charles Ifejika represents himself and (with permission) the second defendant. I asked the parties about their estimates of the potential magnitude of damages at stake. Both Victor Ifejika and Charles Ifejika were of the view that the likely damages in relation to the Lenscare product are of the order of £35. As regards the AMO product, Charles Ifejika's position is that the likely damages (if the case against him is proven, which of course he denies) may be of the order of £25,000. Victor Ifejika's position on the AMO product is that the likely damages may be of the order of £500,000."
In fact that £25,000 was an overestimate by nearly £10,000. One wonders what the parties could have achieved had they applied their energies to their respective businesses instead of fighting each other.

17 July 2014

Birthday Train or Eurostar - German Copyright Law

German Federal Supreme Court
Source Wikipedia




















On one of the hottest days of the year so far members of the Intellectual Property Bar Associaiton gathered in the Pension Room of Gray's Inn to hear a presentation on German copyright law by Prof Ansgar Ohly.

The title of his talk was Birthday Train or Eurostar which cleverly summed up the subject matter in a nutshell. The  Birthday Train is the name of a case before the German Federal Supreme Court in which the Court relaxed the originality requirement for the subsistence of copyright in works that could be protected by design registration in order to give effect to the Designs Directive (Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs). The case reference is Urteil vom 13. November 2013 - I ZR 143/12 - Geburtstagszug and there is a summary of the case here. The reference to Eurostar was an allusion to that Directive and other European legislation as well as decisions of the Court of Justice of the European Union of which the German courts are beginning to take account.

The Birthday Train was on originality. Prof Ohly considered other aspects of German copyright law where European law had been, or in some cases perhaps should have been, taken into account. He called one of those cases "Metal on Metal", a claim by the band Kraftwerk against a rap artist who reproduced a few bars of their recording Autobahn. The band brought their claim for infringement of their mechanical copyright rather than their musical copyright because there is no originality requirement for the subsistence of mechanical copyright.  Another case was Pippi Logstocking where it was held that literary copyright could be infringed by making a carnival costume according to verbal description. Prof Ohly discussed the liability of third intermediaries, particularly ISPs. Rather surprisingly we learned that there was no equivalent of s.97A of the Copyright Designs and Patents Act 1988 in German law and that German courts would not grant blocking injunctions of the kind Mr Justice Arnold had ordered in Twentieth Century Fox Film Corporation and otherss v British Telecommunications Plc [2012] 1 All ER 869, [2012] Bus LR 1525, [2011] EWHC 2714 (Ch).

As I had dashed down to London in some haste I did not get an opportunity to grab a notebook from chambers so I took no notes. So far as I could see glancing at the rest of the audience neither did anyone else which was a pity. Some of the things that Prof. Ohler said were real eye openers. It was hard to believe at times that Germany and Britain were both signatories to TRIPs and the Berne Convention. I do hope his talk or its substance will be published somewhere because the legal reasoning in some of the cases is startling.

After the talk we trundled off to the extremities of Gray's Inn where we sipped champagne and munched mini fish and chips and Yorkshire puddings as well as the more usual finger food and canap├ęs.  The caterers must have heard that I was in town. It was good to see all my old chums again.

Further Reading

Axel Horns  "Germany: Copyright Protection More Easily Available For Works Of 'Applied Arts'” 14 Nov 2013 KSNH Law 

02 July 2014

Patents - Employees' Compensation: Shanks v Unilever

S.39 (1) of the Patents Act 1977 provides:
"Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purposes of this Act and all other purposes if -
(a) it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or
(b) the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of
his duties he had a special obligation to further the interests of the employer's undertaking."
S.39 (2) provides that any other invention made by an employee shall, as between him and his employer, be taken for those purposes to belong to the employee.

The reason for that provision is that the inventor in a university or commercial research and development establishment is paid a salary for his or her work whether the invention is a success or not. The inventor's employer takes the risk of making it a success and an any private inventor in an inventors' club will tell you the odds against success are considerable. Most private inventors don't want to be entrepreneurs. They simply want to create. If they can be paid a decent salary for doing what they want to do anyway, most of them would be as happy as Larry.

Nevertheless, there are times when an employee's invention is a runaway success and the idea that the monthly salary and company car is adequate compensation for the inventor somehow sticks in the gullet. For those rare cases, s.40 (1) of the Act now provides:
"Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that -
(a) the employee has made an invention belonging to the employer for which a patent has been granted,
(b) having regard among other things to the size and nature of the employer’s undertaking, the invention or the patent for it (or the combination of both) is of outstanding benefit to the employer, and
(c) by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer,
the court or the comptroller may award him such compensation of an amount determined under section 41 below."
S.40 (1) was amended by s.10 of the Patents Act 2004. Before that amendment that subsection provided:

"Where it appears to the court or the comptroller on an application made by an employee within the prescribed period that the employee has made an invention belonging to the employer for which a patent has been granted, that the patent is (having regard among other things to the size and nature of the employer's undertaking) of outstanding benefit to the employer and that by reason of those facts it is just that the employee should be awarded compensation to be paid by the employer, the court or the comptroller may award him such compensation of an amount determined under section 41 below."
Note the differences between the two provisions. The former provisions referred only to the patent and not the invention as is now the case when considering the benefit to the employer.

In Shanks v Unilever Plc and others  [2014] EWHC 1647 (Pat), [2014] WLR(D) 242 Prof, Ian Shanks OBE FRS FREng sought compensation under s.40 (1) from his former employers, Unilever Plc, Unilever NV and Unilever UK Central Resources Ltd. in respect of European Patent (UK) 0 170 375 ("EP375") and related patents ("the Shanks patents") for inventions that the professor had made between 1982 and 1984 when Unilever applied for its first patent. When he joined Unilever Prof. Shanks was paid £18,000 a year and a Volvo car which had risen to £29,000 and a BMW when he left in 1986. As a struggling intellectual property barrister then as now, I can attest that such remuneration was wealth beyond the dreams of Croesus. The Shanks patents were first licensed and then sold to third parties which generated considerable revenues for Unilever which the hearing officer assessed at £24.5 million.

Prof. Shanks applied to the Comptroller for compensation under s.40 (1) on the grounds that his patents had been of outstanding benefit to his employer. His application was heard by Mr Elbro who held in Shanks v Unlilver Plc and Others  BL 0/259/13 21 June 2013 that £24.5 million was not "outstanding" given the size and nature of Unilever's undertaking but, if contrary to his view the benefit was outstanding, 5% of that benefit would be an appropriate share.

The professor challenged the hearing officer's finding as to the size of the benefit and his conclusion that it was not outstanding and also to his view that 5% was an appropriate share. By a respondent's notice Unilever contended that the hearing officer's assessment of the benefit of the patents and the 5% would have been too high. In the words of Mr Justice Arnold at paragraph [31]:
"Both sides challenge the hearing officer's conclusion that the benefit which Unilever derived from the Shanks Patents was £24.5 million. Prof Shanks contends that the hearing officer ought to have included an additional sum to reflect the time value of the money to Unilever. Unilever contend that the hearing officer ought to have reduced the total to reflect (i) the incidence of tax, (ii) research and development costs and (iii) a greater percentage of the licensing income being attributable to the Birch Patents. The contentions with regard to the time value of money and tax raise issues of principle which do not appear to have been considered in this context before this case."
The judge rejected Professor Shanks's  argument that the "time value of the money" should have been taken into account:
"[39] In my judgment the time value of the money which Unilever have received is not a "benefit … derived … from" the Shanks Patents within the meaning of section 41(1). My reasons are as follows. First, the fact that having money for a period of time is of an economic value which can be quantified does not compel the conclusion that it constitutes "money's worth" within the meaning of the definition of "benefit" in section 43(7). On the contrary, when read together with section 41(1), the definition points to the benefit being assessed when the "money or money's worth" is received by the employer.
[40] Secondly, even if the time value of the money is a "benefit", it is not a benefit "derived from" the Shanks Patents. The benefits derived from the Shanks Patents were the licence fees and the attributable part of the purchase price of Unipath. The time value of the money is a benefit derived from those benefits. This point can be illustrated in two ways. The first is by imagining that a patent is sold by £1 which the employer invests in a lottery ticket that wins a prize of £10 million. Can the employee claim the £10 million as a benefit derived from the patent? The second is by imagining that a patent is sold for £100 million which the employer invests in setting up a new company which crashes disastrously, resulting in the loss of the entire sum. Can the employer say that it has received no benefit from the patent? Surely the answer to both questions is no.
[41] Thirdly, if the time value of money received is treated as a benefit derived from the patent, the inquiry under section 41(1) would have no temporal end, particularly where the employer was able to get a better rate of return on investing its share of the money in its own business than the employee could get from a market interest rate on his share (or perhaps even from investing his share in the stock market). It would also complicate the inquiry in other ways which Parliament is unlikely to have envisaged, not least in determining which of the available methods of quantifying the time value is the most appropriate.
[42] Fourthly, Prof Shanks could have brought his claim earlier than he did. Why should the "benefit … derived from … the patent" increase as a result of a delay by the employee in bringing his claim? Furthermore, it took a regrettably long time for the Comptroller-General to determine the claim. Again, why should the "benefit … derived from … the patent" increase as a result? Yet further, this appeal has taken a year to come on. Again, why should the "benefit … derived from … the patent" increase as a result? Surely the answer to these questions is that such delays do not alter the benefit to the employer.
[43] Fifthly, it is common ground that the Comptroller has no power to award interest. In my judgment it would be inconsistent with the statutory scheme for the benefit to be increased to reflect the time value of money effectively as a substitute for an award of interest. It is not necessary to try to decide what the position with regard to interest would have been if Prof Shanks had brought his claim in this Court."
On the other hand his lordship accepted Unilever's contention that the incidence of tax and the prosecution costs should have been taken into account. After taking account of the deductions Mr Justice Arnold found that the value of the benefit of the Shanks patents to Unilever was £17 million.

Mr Elbro had concluded at paragraph [222] of his decision that
"The benefit provided by the Shanks patents was a substantial and significant one in money terms – the sort of sum Unilever would, on the evidence, worry about (cf. Project Hyacinth). Furthermore, in comparison to the benefit from other patents to Unilever, from the evidence before me it does, in Mr Emanuel's words 'stand out'."
However, after taking account of the size and nature of Unilever's business, he concluded that the benefit provided by the Shanks patents fell "short of being outstanding." Professor Shanks attacked that finding on no less than 7 grounds each of which was dismissed by the judge. He affirmed the hearing officer's finding and dismissed the appeal.

For completeness the judge also considered the parties' arguments as to what should be an appropriate share for Prof. Shanks had the patents been of outstanding benefit to Unilever.  Having regard to Mr Justice Floyd's decision in Kelly and another v GE Healthcare Ltd [2010] Bus LR D28, (2009) 32(5) IPD 32035, [2009] EWHC 181 (Pat), [2009] RPC 12 where the claimants were awarded 3% of the benefit Mr Justice Arnold could see no reason why Prof, Shanks should receive more.

Both Kelly and Shanks were decided under a provision that has now been amended so it has to be asked whether those judgments would be relevant to any cases that may be decided under s.40 (1) as it stands now.  In my view they would. The computation of the benefit exercise would be broader because the invention has to be considered as well as the patent under s.40 (1) (b) but the tribunal still has to consider the licensing revenue, tax and prosecution costs and there is nothing in the language of the new section that compels the court to consider time value. Secondly, exactly the same considerations will arise under the amended section for deciding whether the benefit to the inventor's employer was "outstanding". For an example of something that is "outstanding" see Kelly and for one that is not see Shanks.

Further Reading
Jane Lambert "Patents: Unilever Plc and Others v Shanks" 27 Nov 2010 NIPCLaw
Jane Lambert "Employees' Compnsation: Kelly and Another v GE Healthcare Ltd [2009] EWHC 181 (Pat) (11 February 2009)"

25 June 2014

Unified Patent Court Consultation




As I said in How the Intellectual Property Act 2014 changes British Patent Law 21 June 2014 JD Supra, the most important provision of the Intellectual Property Act 2014 is s.17 which inserts a new s.88A into the Patents Act 1977. That section confers power on the Secretary of State to make provision in the UK for the Agreement on a Unified Patent Court.

Why is that agreement important? It is because art 1 establishes a court common to almost all the countries of the European Union including the UK for the settlement of disputes relating to European patents and European patents with unitary effect ("Unitary patents").  That court will be known as the Unified Patent Court ("UPC") and it will consist of a Court of First Instance and a Court of Appeal. The Court of Appeal will sit in Luxembourg but the Court of First Instance will have a central division with Paris with sections in London and Munich. In addition there will be regional and local divisions of the Court of First Instance in the contracting countries.

European patents are patents granted by the European Patent Office ("EPO"). Despite their name European patents are not patents for the whole of Europe or even for the whole European Union ("EU") but for individual designated contracting countries. Thus a European patent (UK) is essentially a patent for the UK only and practically the only difference from a patent granted by the Intellectual Property Office ("IPO") in Newport is that a European patent (UK) is granted by an agency that acts on behalf of all the governments that are party to the European Patent Convention. Unitary patents will be patents granted by the EPO not just for individual countries but for almost all the countries of the EU as though they were one country.  If a Unitary patent is valid it will be valid in all those states.  If it is invalid it will be valid in none of them. The tribunal that will decide whether or not such a patent is valid or invalid and whether or not it has been infringed will be the UPC.

At present disputes over the validity and infringement of European patents are determined by national courts. In England and Wales these are the Patents Court which is established as part of the Chancery Division by s.6 (1) (a) of the Senior Courts Act 1981 and the Intellectual Property Enterprise Court ("IPEC") which was established by The Crime and Courts Act 2013 (Commencement No. 3) Order 2013 and The Civil Procedure (Amendment No.7) Rules 2013 (see Jane Lambert "What does the Intellectual Property Enterprise Court mean for Litigants in the North West?" 12 Oct 2013 IP North West). After a transitional period the jurisdiction to hear and determine disputes over the validity of European patents (UK) and whether they have been infringed in England and Wales will pass from the Patents Court and IPEC to the UPC. 

The UPC will be quite different from an English court because it has jurisdiction not only over common law countries like the United Kingdom and Ireland but also over the civil law countries whose practice and procedure is quite different from ours. Some ideas of the differences between the Civil Procedure Rules and the rules proposed for the UPC can be seen from the draft rules of procedure that appear on the Unified Patent Court's website. Now this is going to have a tremendous effect on the way we do things in the United Kingdom not just because a lot of British businesses will opt for unitary patents nor even because there will be a transfer of jurisdiction from courts in the United Kingdom to the UPC but because it will influence the way we conduct other types of litigation in the UK.

As this is an important development HM government has begun a consultation on the legislative changes needed to implement the UPC Agreement and the Unitary patent. The consultation period is very short in that it closes at 11:45 on 2 Sept 2014.  To facilitate this consultation HMG has published a consultation document entitled Technical Review and Call for Evidence on Secondary Legislation Implementing the Agreement on a Unified Patent Court and EU Regulations Establishing the Unitary Patent which has been prepared by the IPO ("the consultation document"). impact assessments on Unified Patent Court implementation: Alignment of exceptions to infringementUnified Patent Court Implementation - Jurisdiction and Unified Patent Court Implementation - Unitary Patent and a statement of innovation.

On pages 29 to 34 of the consultation document there is a draft statutory instrument together with an explanatory note on page 35. The statutory instrument will be known as The Patents (European Patent with Unitary Effect and Unified Patent Court) Order 2015 ("the Order") and it will be made under s.88A of the Patents Act 1977. Art 1 (2) of the Order provides that it will come into force when the UPC agreement comes into force and art 1 (3) that it has the same extent as the Patents Act 1977 which means that it covers not just the UK (England and Wales, Scotland and Northern Ireland but also the Isle of Man). Art 2 makes substantial amendments to the Patents Act 1977 including the insertion of new Schedules A3 and A4 on the Unitary patent and the UPC.

Although neither I nor my chambers are on the list of organizations consulted on this proposed legislation in Annex A (page 24) I shall be responding to it and I shall bring it to the attention of inventors through my Inventors Club blog and businesses and individuals and their professional advisors in the regions through my regional blogs and newsletters. Should there be demand for seminars and webinars by local solicitors or patent attorneys I shall hold those as well. The only reason why the provisions of the Intellectual Property Act 2014 relating to registered designs and unregistered design rights got through (particularly clause 13) is that the government has ears only for the design lobby and ignored the warnings of experienced IP practitioners. This legislation is much more significant and far reaching and we have to make sure the same thing does not happen again.

25 May 2014

Dispute Resolution in the Proposed North Atlantic Free Trade Area





Although some such as George Monbiot do not approve of it (see "This transatlantic trade deal is a full-frontal assault on democracy" 4 Nov 2013 The Guardian) and many quite politically aware people are not even aware of it, negotiators from the United States and European Union have been hammering out a deal to create a North Atlantic Free Trade Area. If they succeed they will create a market of 800 million of the richest consumers on earth which should increase the GDP of all the countries in the arrangement enormously. An early discussion draft can be inspected here and news of the latest negotiations can be gleaned from the press conference above.

One of the reasons why Mr Monbiot does not like the deal is that disputes between businesses and governments will be determined not by the Court of Justice of the European Union or a national court but by arbitration as happens already under Chapter II of the North American Free Trade Agreement and a large number of bilateral investment treaties (see "Bilateral Investment Treaties: Claiming Compensation from Foreign Governments under Bilateral Investment Treaties for failing to provide adequate IP Protection" 27 July 2013). Mr. Monbiot sees that as somehow a threat to national sovereignty and even democracy. Personally I think he is wrong for two reasons. The first is that the respondent government gets to appoint one of the panel of arbitrators and secondly there is a right of appeal to the courts on a question of law (see the last 2 pages of the above draft).

Nevertheless, because of those concerns the European negotiators launched a public consultation on investor protection dispute resolution procedures on the 27 March 2014 (see "Questions and Answers: Public online consultation on investor protection in TTIP"  and the background paper "Investment Protection and Investor-to-State Dispute Settlement (ISDS) in EU agreements" published in March 2014).

I think this is a great opportunity for British business, especially our small and medium enterprises who stand to gain much from the harmonization of standards and regulatory controls and the measures to facilitate enforcement of intellectual property laws which are currently under discussion (see "The Transatlantic Trade and Investment Partnership: The Opportunities for Small and Medium Enterprises").

It is to be noted that the Transatlantic Trade and Investment Partnership is a project between the European Union and the United States only. Other countries in the European Economic Area such as Norway and Switzerland are not party to those discussions. If those countries are eventually allowed to join the free trade area they will do so on terms that they will not have helped to negotiate. Something that those who are minded to vote for UKIP or Scottish secession should think about.