From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Thursday, 8 December 2016

Indian Trade Marks Registry to widen its doors for recording “well known” marks


The role of recordation of well-known marks varies across jurisdictions. Against that backdrop, the step about to be taken by the Trade Marks Registry in India in connection with recording well-known marks is especially noteworthy. Kat friend Ranjan Narula, of RNA Intellectual Property Attorneys, describes what can be expected to shortly take place.

"Indian trademark law recognises well-known marks and it has adopted the criteria set out in Article 6 of the TRIPS agreement to determine if a mark is well-known.
However, the Trade Marks Act, 1999, had no specific provision to seek a formal declaration from the Trade Marks Registry regarding the well-known status of a mark. Since 2003, the Indian Trade Marks Registry has produced a list of marks that the courts have considered to be well-known, such as PHILIPS, INTEL, PEPSI, HONDA, OMEGA, MARS, HORLICKS, TATA, WOOLWORTH, TOSHIBA, SONY and CARREFOUR. The list is growing and currently has 81 marks. Brand owners have time and again pointed out that relying solely on a court ruling holding that a mark is well-known is a narrow interpretation of the criteria set out in section 2 (1) (zg) and Sections 11 (6), (7), and (9) of the Trade Marks Act. Thus, many brands may be unable to make it to the coveted list if they do not have a court ruling in their favour, even though the mark may otherwise be well-known. Amazon is one such example that does not appear in this list.

To address the concerns of brand owners, the Trade Marks Registry has proposed an amendment to the current Trade Mark Rules, 2002, to provide a specific reference to a declaration to record a mark as well-known. As s result, as per the proposed amendment, a rights holder will be able to make a request to the Registrar of Trade Marks to determine a trade mark to be a “well-known” mark. Such a request shall be accompanied by a ‘statement of case’.

In addition, the applicant shall be required to file relevant evidence and documents in support of such a claim, which may include evidence of use and promotional documents. The Registrar may fix criteria in this regard. It is apparent that the proposed amendment confers significant discretionary powers on the Registrar in determining whether a mark is ‘well-known’, based on the adduced evidence by the Applicant along with the statement of case. The provision also empowers the Registrar to remove a trademark that has been erroneously or inadvertently included in the list.

The trade marks Registry intends to charge hefty fees, as set out below, for an application for requesting inclusion of a mark in the list of well-known trademarks.

E-Filing INR 100,000; USD $1455 (approximate)

Physical filing INR 110,000; USD $1600 (approximate)

The new Rules are likely to come into force as early as next week. Still, the new Rules open certain matters, as various practitioners and brand owners have pointed out. Some of the concerns expressed by stakeholders are:
1. The basis for stipulating the criteria for determination of a well-known mark is not clear. The Trademarks Registry should have clearly spelled out that criteria laid down in Sections 2 (1) (zg) 11 (6) and (7) and 11(9) of the Act will apply.

2. It is not apparent whether ‘determination’ by the Registrar is required if the mark has already been recognized as well-known mark by a Court/Intellectual Property Appellate Board/Registrar in a contentious proceeding.

3. As there is already a list of well-known marks published by the Trademarks Registry, it is not clear whether a ‘new’ list shall be created or the existing list updated.

4. The fees, 100,000 Rupees for e-filing (approximately US$ 1455), and even more for physical filing, are unreasonable and without justification.

5. To safeguard rights of an aggrieved person, a procedure for publication and opposition/intervention against a determination that a trademark as well-known should be provided.
However, despite these issues, the Trademarks Registry is likely to proceed with the new Rules as currently set out."

A list of the recordals on the Trade Marks Registry, here.

Mediaplayers and streaming: AG Campos Sánchez-Bordona in Filmspeler proposes broad interpretation of notion of 'indispensable intervention'

A little more than a year ago this blog reported that a new reference for a preliminary ruling to the Court of Justice of the European Union (CJEU) had been filed by the Rechtbank Midden-Nederland (District Court, Central Netherlands, Netherlands). 

Background

This reference [Stichting Brein v Jack Frederik Wullems, acting under the name of Filmspeler, C-527/15] had arisen in the context of litigation between Dutch anti-piracy organisation Stichting Brein and Jack Frederik Wullems over the sale, by the latter and through - among other things - his site www.filmspeler.nl, of various models of a multimedia player under the name ‘filmspeler’. 

Filmspeler is a player for connecting a source of image and/or sound signals to a television screen. If the multimedia player is connected to the internet, on the one hand, and to a user’s screen (for example, a television screen), on the other, the user is able to stream the image and the sound from a web portal or website.

Among other things, Wullems installed add-ons [over which he had no influence] containing hyperlinks which, if clicked, would redirect the user to streaming websites, controlled by third parties, on which films, television series and (live) sporting events could be enjoyed free of charge, with or without the authorisation of relevant rightholders. 

Stichting Brein sued Wullems for copyright infringement before the District Court of Central Netherlands, claiming that through the sale of the Filmspeler player, Wullems was carrying out a ‘communication to the public’ contrary to Dutch copyright law.

The District Court held the view that the relevant Dutch provisions should be interpreted in light of Article 3 of the InfoSoc Directive but considered that: 

(1) CJEU case law existing at that time [notably Svensson and BestWaterwould not provide criteria sufficient for reaching a decision in this case; and 
(2) it was unclear whether the defence for temporary copies, pursuant to the Dutch transposition of Article 5(1) of the InfoSoc Directive, would be applicable to relevant streaming activities.

The District Court decided therefore to stay the proceedings and seek guidance from the CJEU as to the following:

‘1)      Must Article 3(1) of the [InfoSoc] Directive be interpreted as meaning that there is “a communication to the public” within the meaning of that provision, when someone sells a product (mediaplayer) in which he has installed add-ons containing hyperlinks to websites on which copyright-protected works, such as films, series and live broadcasts are made directly accessible, without the authorisation of the right holders?
2)      Does it make any difference:
-      whether the copyright-protected works as a whole have not previously been published on the internet or have been published only through subscriptions with the authorisation of the right holder?
-      whether the add-ons containing hyperlinks to websites on which copyright-protected works are made directly accessible without the authorisation of the right holders are freely available and can also be installed in the mediaplayer by the users themselves?
-      whether the websites and thus the copyright-protected works made accessible thereon — without the authorisation of the right holders — can also be accessed by the public without the mediaplayer?
3)      Should Article 5 of the [InfoSoc] Directive (Directive 2001/29/EC) be interpreted as meaning that there is no “lawful use” within the meaning of Article 5(1)(b) of that Directive if a temporary reproduction is made by an end user during the streaming of a copyright-protected work from a third-party website where that copyright-protected work is offered without the authorisation of the right holder(s)?
4)      If the answer to the third question is in the negative, is the making of a temporary reproduction by an end user during the streaming of a copyright-protected work from a website where that copyright-protected work is offered without the authorisation of the right holder(s) then contrary to the “three-step test” referred to in Article 5(5) of the [InfoSoc] Directive (Directive 2001/29/EC)?’

Today's AG Opinion

This morning Advocate General (AG) Manuel Campos Sánchez-Bordona delivered his Opinion, and held the view that:

(1) the sale of a multimedia player of the kind at issue in the main proceedings constitutes “communication to the public” within the meaning of Article 3(1) of the InfoSoc Directive [note (para 33) that the submission of the Commission is that in the case at hand Article 3(1) would not be triggered because what Wullems did was to provide a mere ‘physical facility’ that would enable, but would not in itself be, a communication], and 
(2) cannot be covered by the exception laid down in Article 5(1) therein, inasmuch as it does not fall within the definition of “lawful use” in subparagraph b) of that provision and, in any case, does not fulfil the conditions for application of the three-step test in Article 5(5).

Communication to the public

The AG noted at the outset [para 3] how the first and second questions referred by the Dutch court are, in some respects, the same as those which gave rise to the judgment in GS Media [Katposts here]. However, according to the referring court, in this case the factual difference is that - unlike the background proceedings in GS Media - no hyperlinks were posted on the defendant's own website, but rather add-ons with hyperlinks were installed in the mediaplayer offered by him. 

Despite this, according to the AG the CJEU judgment in GS Media is applicable to the case at hand [para 4]

Interestingly enough, at para 41 the AG also warned against the risks of departing from previous CJEU decisions [is this why not even AG Wathelet in his GS Media Opinion - here - dared to say that adopting his view would mean departing from the CJEU conclusions in Svensson?]:

"The requirement of certainty in the application of the law obliges the court, if not to apply the stare decisis in absolute terms [formally there is no system of binding precedent at the CJEU level], then to take care to follow the decisions it has itself, after mature reflection, previously adopted in relation to a given legal problem. To my mind, that is what must happen with regard to the case-law laid down (or confirmed) in the judgment in GS Media regarding the relationship between hyperlinks and communication to the public in the context of Directive 2001/29."

Having said so, the AG recalled the cornerstones of GS Media, ie that [paras 42-43]

"(a) the provision of clickable links to protected works must be considered to be ‘making available’ and, therefore, such conduct is an ‘act of communication’; (b) that concept refers to any transmission of the protected works, irrespective of the technical means or process used, and (c) there is a rebuttable presumption that the posting of a hyperlink to a work unlawfully published (without the authorisation of the right holders) on the internet amounts to a ‘communication to the public’ within the meaning of Article 3(1) of Directive 2001/79, if it is done in pursuit of profit.
In the same vein, the Court has held that the concept of communication to the public of a protected work requires either the communication to be made by a specific method different from those used before or, failing this, the work to be distributed to a ‘new public’, deemed to be a public which the right holders did not take into account when they authorised the original (limited) distribution of the work."

According to the AG [para 44] "it is not difficult to conclude that the case-law laid down in the judgment in GS Media, regarding the relationship between hyperlinks and the concept of communication to the public, is applicable" to the case at hand.

This said, he considered the material difference that, unlike in GS Media, Wullems did not directly provide any hyperlinks to protected works, but rather offered for sale a multimedia player with add-ons containing such hyperlinks.

Rejecting the Commission's "reductionist" [in the AG's view: see para 49] submission that Wullems’ intervention was ‘not crucial’ and that he merely ‘enabled’ the public to have access to content that can be downloaded from other websites, the AG held [paras 49-51] that:

"Marketing of the filmspeler goes beyond the mere sale of a technical accessory ... In that device, Mr Wullems provides, inseparably, the necessary hardware and software which are aimed directly at enabling purchasers to access copyright-protected works on the internet without the consent of right holders. Provision of that immediate access to an unspecified public is part of the added value of the service supplied by Mr Wullems, for which he receives the price paid — or at least a substantial part thereof — in return for the mediaplayer ... [T]here is no significant difference between posting hyperlinks to protected works on a website and, as in the present case, installing hyperlinks in a multimedia device designed specifically for use with the internet (in particular, so that, through it, users are able to access straightforwardly, directly and immediately, digital content made available without the consent of the authors). The provision of links to that protected content, the making available of that content to the public, is a feature common to both types of conduct, and its apparently incidental or ancillary nature cannot conceal the fact that the activities concerned are aimed at ensuring that anyone may, merely by clicking on the hyperlink, enjoy the protected works."

AG Campos Sánchez-Bordona
And here's the crucial bit [paras 53-54]

"It is therefore possible to refer to the indispensable role, within the meaning of the case-law, played by Mr Wullems in the communication to the public of protected works; his intervention is performed deliberately and with full knowledge of the consequences entailed. That is clear, in particular, from the examples of the advertising he uses to promote his device. 
In short, the filmspeler cannot be regarded as a mere ‘physical facility’ within the meaning of recital 27 in the preamble to Directive 2001/29, but rather as a type of communication to the public of copyright-protected works that have previously been unlawfully uploaded to the internet. Mr Wullems’ conduct involving the installation of hyperlinks to those works in his devices, which he clearly does in pursuit of a profit and in awareness of its unlawfulness, assists purchasers of the filmspeler to avoid the consideration payable for lawful access to those works, that is, payment of the remuneration due to the right holders which usually takes the form of a membership fee, subscription or another pay-per-view method."

Having said so, the AG turned to consideration of whether the public targeted by Wullems's act of communication would be also 'new'. The AG answered in the affirmative, also noting [para 58] that "the filmspeler entails an undeniable advantage for a significant portion of that public: persons not particularly skilled at using the internet to find illegal sites for watching films and televisions series, amongst other digital content. That portion of the public might prefer the user-friendly menu which the filmspeler displays on its screen to the sometimes laborious search for websites offering such content."

Temporary copies defence?

Turning to the third and fourth questions the AG considered that, in relation to Article 5(1) of the InfoSoc Directive, the condition that would not be satisfied is the one relating to the ‘lawful use’ of a protected work [para 65]. The AG added [para 71] that 

"lawfulness, in objective terms, depends rather on the authorisation of the right holder or his licensee. Excusable ignorance or reasonable lack of knowledge, on the part of the end user, of the fact that no such authorisation exists could, undoubtedly, exempt the user from liability, but it does not exclude — I repeat, in strictly objective terms — the unlawfulness of the ‘use’ referred to in Article 5(1) of Directive 2001/29."

Another
indispensable intervention
It follows [para 72] that, since the protected works to which the hyperlinks installed on Mr Wullems’ filmspeler lead were not authorised by the copyright holders, streaming by an end user by means of that device would not be consistent with ‘lawful use’ for the purposes of Article 5(1)(b) of the InfoSoc Directive.

Three-step test

The AG also noted that, even admitting that use of Wullems's device was covered by Article 5(1), none of the conditions in the three-step test within Article 5(5) of the InfoSoc Directive would be satisfied. 

Also recalling the CJEU decision in ACI Adam [Katposts here], the AG noted how "it would run counter to Directive 2001/29 to allow indiscriminate or widespread reproductions from unlawful sources, or reproductions made by circumventing the access limits. Accepting the validity of such reproductions would be tantamount to promoting the circulation of pirated digital content and, to that extent, would seriously prejudice the protection of copyright and create favourable conditions for unlawful methods of distribution, to the detriment of the proper functioning of the internal market. [para 77]

Comment

Today's AG Opinion is good news for rightholders, especially because the AG appeared to construe the notion of 'indispensable intervention' fairly broadly and in a way that goes beyond a 'merely direct' indispensable intervention [as instead, in my view, the CJEU had done in Reha Training - here - and GS Media].

We shall see if the CJEU follows the AG Opinion: if this happens - and with the same nuances - then Filmspeler is going to be an additional step towards an even broader interpretation of what the elusive concept of 'communication to the public' entails.

AIPPI Rapid Response Report: Debating Lyrica's recurring pain on plausibility, abuse and infringement

Just over a year ago, AIPPI hosted a Rapid Response seminar following Mr Justice Arnold finding that the material claims of Warner-Lambert’s patent for the use of pregabalin in the treatment of pain were invalid and in any event not infringed by Actavis’ skinny label pregabalin product Lecaent (Warner-Lambert v Actavis [2015] EWHC 2548 (Pat)).  At that stage, the panel were also in possession of six other judgments from Arnold J concerning pregabalin and one from the Court of Appeal.   Steven Willis (Bristows) reports:  

"Since that first rapid response seminar, Arnold J has issued a further judgment concerning Warner-Lambert’s right to amend the Patent after the trial and whether that amounted to an abuse of process (Generics (UK) t/a Mylan v Warner-Lambert [2015] EWHC 3370 (Pat)).  In addition, last month, the Court of Appeal upheld Arnold J’s findings on the validity of the Patent and the amendment/abuse of process issues but disagreed with him, obiter, on issues concerning the construction and infringement of Swiss Type Claims (Warner-Lambert Company LLC v Generics (UK) Ltd (t/a Mylan) & Ors [2016] EWCA Civ 1006).  

The same panel of experts  - Claire Baldock (Boult Wade Tenant), Brian Cordery (Bristows) and Stuart Baran (3 New Square) - that presented at the first seminar reconvened last week to revisit the issues and grapple with new ones raised by the two most recent judgments. Claire covered the plausibility/insufficiency aspects of the Court of Appeal judgment, Brian addressed the amendment and related abuse of process issues and Stuart tackled the thorny area of the construction and infringement of Swiss type claims.  

Plausibility/Insufficiency

Claire reminded the audience of the relevant background to the insufficiency issues, some of which are set out below:
  • The Patent in suit contains Swiss form claims to pregabalin in the treatment of pain (Claim 1) and in the treatment of neuropathic pain (Claim 3).
  • Pain is difficult to define both clinically and in patent terms.  Paragraph [0003] of the Patent states that the invention is directed to chronic pain disorders.  It then provides a list of conditions which the invention is said to include but not be limited to.  Paragraph [0006] of the Patent then refers to the invention as being the use of pregabalin in "the treatment of pain as listed above".  
  • The Patent refers to neuropathic pain as being that "which is caused by injury or infection of peripheral sensory nerves”.  The patent does not draw a distinction between peripheral neuropathic pain and central neuropathic pain.  
  • The Patent contained data relating to animal models of inflammatory pain.  None of these models were established models of neuropathic pain.  
  • Inflammatory pain contains a central sensitisation component which is present in neuropathic pain but not central neuropathic pain.   
Claire went on to summarise some of the parties’ key submissions on plausibility/insufficiency:
  • The Defendants argued that Warner-Lambert must rely on the data in the animal models for the purposes of plausibility.
  • Warner-Lambert responded that central sensitisation component provided the requisite link between the animal models and the claimed forms of pain.  
  • Mylan contended that not all forms of pain which fell within the claims contained a central sensitisation component.  Furthermore, it was CGK that neuropathic pain included both peripheral neuropathic pain and that central neuropathic pain did not have a central sensitisation component.  
  • Warner-Lambert argued that the skilled person would in any event have understood claim 3 (i.e. to neuropathic pain) to have been limited to peripheral neuropathic pain.  
Claire considered the Court of Appeal’s construction of the claim and noted the finding that not every use of a term will be understood to be a definition:
although it is often said that a specification can act as its own dictionary, not every use in the specification of a term found in the claim will be understood by the reader to be a definition. On no basis can paragraph [0006] or [0003] or the two paragraphs read together be taken to be a definition of what the patentee means by the term "pain". They are statements exemplifying the broadest statement of invention, namely that pregabalin is suitable for the treatment of pain.
This contributed to the Court's finding that the skilled person would have viewed the claims as being broad claims to efficacy concerning the treatment of all kinds of pain.  Although the skilled person would adopt a narrow meaning of a particular claim if there were CGK reasons as to why the wider meaning would cover implausible embodiments, this was not such a case.  The Patent taught that pregabalin is likely to treat inflammatory pain.  Inflammatory pain has a central sensitisation component.  Therefore, the skilled person would know that pregabalin might work for peripheral neuropathic pain but not for central neuropathic pain because of the lack of a central sensitisation component.  The claim was therefore not plausible across its scope.  Having failed to overcome the plausibility hurdle, the patentee was not entitled to rely on post-published evidence to show sufficiency.

Claire raised some interesting points to consider at the end of her talk:
  1. In light of Kitchen LJ’s treatment of paragraphs [0003] and [0006], what is/is not to be recognised as a definition in a Patent?  Claire considered that in light of this decision, Patent Attorneys must be particularly precise with definitions and the definitions must be reasonable based on the state of the art at the time.
  2. At what level of generality should the plausibility test be applied?  In the event that certain embodiments of a claim are plausible at the priority date, should it be possible to “fill in the gaps” with later filed evidence (bearing in mind that pregabalin works in central neuropathic pain).
  3. Should evidence of technical effect only be rejected where nothing plausible is covered by the claim?
  4. Is it sometimes the case that having no data in your Patent is better than having the “wrong” data?  Claire referred to the HGS v Lilly [2011] UKSC 51 and Actavis v Lilly [2015] EWHC 3294 (Pat) cases as examples of patents which did not have data in them and yet were found to be plausible.      
Amendment / Abuse of Process

In light of Arnold J’s first instance finding on plausibility/sufficiency, Warner-Lambert sought to amend its claim to neuropathic pain to that which is "caused by injury or infection of peripheral sensory nerves”. Arnold J refused the application to amend and considered it an abuse of process.  This was upheld by the Court of Appeal.

Brian Cordery reminded the audience of the general principles relating to amendments set out in Henderson v Henderson (1843) 3 Hare 100 and Johnson v Gore Wood [2000] UKHL 65 which prevent re-litigation in circumstances not amounting to strict res judicata.   Brian considered that the same principles apply to applications to adduce new evidence on appeal to that which was considered at first instance (see e.g. Ladd v Marshall [1954 EWCA Civ 1; MMI Research v Cellxion [2012] EWCA Civ 7).

Brian also reminded the audience of the three categories of amendments recognised by Jacob LJ in Nikken v Pioneer [2005] EWCA Civ 906:
(a) before a trial; (b) after trial, at which certain claims have been held valid but other claims held invalid, the patentee simply wishing to delete the invalid claims (I would include here also the case where the patentee wishes to re-write the claims so as to exclude various dependencies as in Hallen v Brantia [1990] FSR 134. There the patentee is in effect continuing to claim which he had claimed before but in a much smaller way); and (c) after a trial in which all claims have been held invalid but the patentee wishes to insert what he hopes are validating amendments.  
Brian pointed out that categories (a) and (b) are generally considered acceptable whereas category (c) will generally amount to an abuse of process.  Brian considered whether this was altered by the Court of Appeal decision in Samsung v Apple [2014] EWCA Civ 250 where the Court of Appeal held that an application to centrally limit a Patent following a first instance finding of invalidity did not amount to an abuse of process per se, although as Brian noted, the Court was careful to point out that asserting such a Patent in the UK could still amount to an abuse:
"we believe that whether or not a patentee's attempted reliance before this court upon a patent which has been amended pursuant to a central amendment application made after trial constitutes an abuse of process must depend upon all the circumstances, including whether it would be necessary to remit the case for retrial and, if so, what the consequences of that would be.
Having considered the law, Brian revisited the procedural history of the pregabalin litigation noting that the Defendants had raised the distinction between neuropathic and central neuropathic pain in their reply expert report.  They had also referred to it in their skeleton argument.  Warner-Lambert did not object to the argument being raised at this stage.  Warner-Lambert instead focussed its case on arguing that the skilled person would construe neuropathic pain as being limited to peripheral neuropathic pain, which was ultimately rejected by Arnold J at first instance, a  rejection which was upheld on appeal.   

Brian set out some of the arguments relied upon by Warner-Lambert as to why it should have been allowed to amend claim 3 post-trial, which include: 
  • that Warner-Lambert had been the victim of procedural unfairness by the Defendants raising the peripheral/central distinction so late in proceedings; 
  • that the proposed amendment should not be considered to fall within Jacob LJ’s category (c) but instead was more akin to a category (b) amendment as it simply sought to excise invalid matter from an otherwise valid claim; and
  • the amendments would not in any event require a retrial.
Brian highlighted the Court of Appeal’s reluctance to interfere with a first instance judgment on this issue.  This case ultimately depended on two issues:  (i) had the subject matter of the claim as proposed to be amended been the subject of a finding (such that a retrial would not be require)?; and (ii) in light of the procedural history, had Warner-Lambert been hampered from proposing an amendment to Claim 3 at an earlier stage in proceedings?  The Court held that notwithstanding the procedural issues, Warner-Lambert could and should have proposed its amendment at the start of trial.   Had it done so, Mylan could have run a different attack on the validity of the claim.

Brian’s take home points included:
  • Propose amendments at an early stage in proceedings, preferably before trial;
  • Keep possible amendments in mind as the trial progresses; and
  • carry out a mock trial with a view to unearthing any unexpected issues.
Brian concluded by reminding the audience that Warner-Lambert has petitioned the Supreme Court for permission to appeal and that the Supreme Court will be hearing issues relating to the construction of Swiss-type claims next year in the Actavis v Lilly (pemetrexed) case.

Construction/Infringement

IPKat readers will recall that construction and infringement issues first arose in these proceedings within the context of Arnold J’s refusal of Warner-Lambert’s application for an interim injunction and the Defendants’ application to strike out Warner-Lambert’s case under s60(2).  Arnold J held that the claim required subjective intention, on the part of the manufacturer, that pregabalin would be used in the treatment of pain at the point of manufacture and as a result there was no arguable case on infringement.  Similarly, the absence of a downstream act of manufacture led Arnold J to strike out the s60(2) infringement claim.  

On appeal, Floyd LJ had disagreed with Arnold J’s “subjective intention” approach and set out, obiter, his test of "reasonable foreseeability”.  The refusal of the interim injunction was upheld (as the Court was reluctant to interfere with Arnold J’s assessment of the balance of convenience but the s60(2) strike out was overturned.  Arnold J attempted to grapple with Floyd LJ’s test in the first instance decision on the merits of the case, but in doing so expressed serious doubts as to its correctness.  Due to the uncertainty and notwithstanding the Court of Appeal’s finding that the patent was invalid, the Court of Appeal sought to clarify the position, albeit that the Court’s comments are once again obiter.  

Stuart Baran reminded the audience that Swiss-Type claims were a fudge designed by the EPO to get around the methods of treatment exclusion from patentability that was present in the EPC at that time.  As such, Stuart suggested that the focus should be on providing a logical and fair outcome rather than water-tight reasoning.  The latter may not be feasible in light of the “legal fiction” of Swiss-type claims.  Bearing in mind that the novelty in the claim derives from the new use of the known drug and has nothing to do with “manufacture” or “preparation”, Stuart emphasised that a fair and logical outcome would result in the patentee being rewarded for its investment in bringing a new treatment to patients and generic pharmaceutical companies being allowed to market the drug in question for the non-patented indications.  

Stuart provided an overview of the approach in some other European jurisdictions to what constitutes an infringement of Swiss-type claims.  The German Courts appear to have adopted the “only packaging will do” approach i.e. there must be some direction to the new use on the SmPC or PiL in order for there to be a finding of infringement.  Other forms of encouragement will not suffice.  In Spain, the Courts have required some positive encouragement on the part of the generic.  Finally, in France the Courts have arguably adopted a more patentee friendly approach and require the Gx to take positive steps to prevent infringement.  In light of the obiter comments from the Court of Appeal, the UK appears to be most closely aligned with the French approach.

Stuart then turned his attention to Floyd LJ’s test for infringement of Swiss-Type claims, that of whether the manufacturer knew or could reasonably foresee that the drug would intentionally be used for treating the new indication.  Stuart pointed out that there had been some disagreement following Floyd LJ’s first articulation of this test, as to whether the manufacturer needed to foresee that a given box of tablets would be intentionally administered for the patented indication.  This interpretation of the test had led Arnold J to a finding of non-infringement.  However, Floyd LJ has now clarified that it is sufficient that the manufacturer foresees that some of the drug that it puts on the market will be so administered.  The second mental element, i.e. that the drug will be “intentionally administered” is only intended to exclude “accidental treatment” i.e. where a patient is administered drug X for disease Y1 and unbeknown to the patient/physician, the patient is suffering from, and is treated for, disease Y2.  

Stuart pointed out that the presence of these two mental elements is not the end of the inquiry.  The Court appears to have recognised that in circumstances where a generic pharmaceutical company has taken all reasonable steps to ensure that its drug is used only for the non-patented indication(s), it does not seem fair that it should be found to infringe by virtue of it being reasonably foreseeable that some of its drug will be used in the patented indication due to flaws in the regulatory system.  As such, a generic can avoid a finding of infringement if it has taken “all reasonable steps”.  Although it is unclear exactly what will constitute “all reasonable steps” and it is likely to depend in part on the circumstances of each case, Stuart suggested that the following steps should be considered:

  • Alerting doctors/HAs/pharmacists in advance
  • Avoiding supply through certain channels
  • Avoiding oversupply vs. old indication market 
  • Steps to update clinical software; and 
  • Co-operating with NHS to issue guidance.
Stuart then turned his attention to the question of indirect infringement pursuant to s60(2).  As s60(2) requires the supply of “means relating to an essential element of the invention,” it is necessary to consider what the invention in a Swiss form claim is.  Stuart highlighted that s125 of the Patents Act states that an invention “shall, unless the context otherwise requires, be taken to be that specified in the claim.”  As such, notwithstanding the wording of the claim, it is clear that the invention in a Swiss form claim is ascribing the novel therapeutic purpose to the medicament.  The invention has nothing to do with “manufacture” or “preparation”.  This is a case where the context does otherwise require. By adopting this approach, the Court of Appeal were able to reach a finding that there was no requirement for a downstream act of manufacture and as such, the ascribing of purpose by, e.g. the pharmacist in applying a label to the product, was relevant to the question of infringement.  

Stuart concluded by suggesting that relief provides the best opportunity for the Court to take the necessary steps to reach a fair outcome.  For example, Stuart suggested that it was perfectly possible to analyse the market share data / % of use for a particular indication and award financial relief accordingly.  However, there was some discussion about whether this was possible in light of the different financial models relating to generic and originator pharmaceutical products.  

On the question of interim injunctions based on second medical use patents, Stuart suggested that it was difficult to envisage a scenario in which the grant of an interim injunction precluding the generic pharmaceutical company from marketing its product would be appropriate.  However, in the event that an interim injunction is awarded, Stuart considered that it would be important for the English Courts to be more prescriptive as to the terms of the injunction than they had arguably been in the past.  Stuart noted that other European Courts have adopted this approach to injunctions.  

In questions which followed the seminar, the panel considered the difference in the infringement analysis of Swiss type claims and post-EPC 2000 claims in light of Floyd LJ’s approach to the former.  Notwithstanding that it is settled law that the former should be considered purpose-limited process claims and the latter purpose-limited product claims and as a result different sections of the Patents Act will be engaged, it was agreed that the analysis is likely to differ very little in practical terms, as the “ascription of purpose” will still amount to an infringing act, “divided” acts of infringement (i.e. where different entities carry out different parts of the claim) will still suffice and the reasonable foreseeability test imparted by the inclusion of the word “for” in the claim will still apply.  It is plain that further case law will be required to crystallise Floyd LJ’s obiter comments in Warner-Lambert.  

The panel also agreed that an ideal solution would include regulatory law reform.  However, despite the apparent agreement of the judiciary (see Arnold J at paras 722-726 of Warner-Lambert v Actavis [2015] EWHC 2548 (Pat)), it does not appear that such reform is imminently on the horizon."

Wednesday, 7 December 2016

PPDs and standard disclosure - can you have your cake and eat it?

In the post-Brexit referendum world, is anyone else suffering from fatigue concerning the English proverb regarding the consumption of cake?  This was even before a long lens photographer caught handwritten notes from a conservative MP's aide leaving a meeting with the Department for Exiting the EU last week, apparently commenting on a preferred post-Brexit model for the UK (see here).  [The IP Kitten - trained from day one to keep files and notes hidden when in public places - shudders at such wrecklessness]. 

What about PPDs and standard disclosure in the Patents Court?  Can the patentee be pro having cake and pro eating it? Mr Justice Birss has provided the answer in Varian Medical Systems AG v (1) Elekta Limited; and (2) Elekta Holdings Limited [2016] EWHC 2679 (Pat).  This GuestKat apologises for continuing the cake idiom, but suggests it is worth it so that she can share a photo of the White Book (Volume 2) cake, as baked by her multi-talented Stephenson Harwood colleague Stephanie Wickenden.

Essential eating for all IP litigators
The dispute concerns Varian's patent concerning a machine for use in radiotherapy in which a magnetic resonance imaging system is used to image the tumour which is receiving or is to receive the radiotherapy.  The radiation beam comes from the linear accelerator. The invention provides for the control of the radiation beam in "real time" so that, if the tumour moves, as compared to its location as specified in the treatment plan, the radiation beam can follow it.

The claimants pleaded case included the following: "After publication of the patent, prior to the issue of the claim form and thereafter, the defendants have infringed and threatened to intend to infringe [the claims] by doing the following acts in the United Kingdom without the claimant's consent: (a) ... offering to dispose of ... a system comprising an MRI (magnetic resonance imaging) guided radiotherapy machine as claimed in at least the aforesaid claims of the patent."   The defendants contend that they do not offer for disposal a machine with the relevant characteristic.


CPR Part 63 and Practice Direction 63 para 6.1

The claimants submitted that offering for disposal was in issue but that no disclosure has been given in relation to it by the defendants.

The application before Birss J concerned a discrete point of patent practice namely what the Product and Process Description (PPD) is for, and how the provision of a PPD interacts with a party's standard disclosure obligations.  To the best of this GuestKat's knowledge, the issue does not appear to have been addressed head on in any other reported case.  CPR Part 63 r63.9 relates to disclosure in patent cases and practice direction 63PD 6.1 is the provision which deals with product and process descriptions:

"6.1 Standard disclosure does not require the disclosure of documents that relate to –

(1) the infringement of a patent by a product or process where –

(a) not less than 21 days before the date for service of a list of documents the defendant notifies the claimant and any other party of the defendant's intention to serve –

(i) full particulars of the product or process alleged to infringe; and

(ii) any necessary drawings or other illustrations; and

(b) on or before the date for service the defendant serves on the claimant and any other party the documents referred to in paragraph 6.1(1)(a)."


Birss J concluded that paragraph 6.1 is concerned with the nature and characteristics of the product or process in issue and the question of whether the product or process falls within the claims.  The fact that Elekta had served a Product Description in accordance with the practice direction did nothing to alleviate the defendants from whatever disclosure obligations they otherwise had relating to acts of infringement.  In other words, the applicant's request for standard disclosure related to a different issue [more of a coffee with your cake than a second slice, muses the IP Kitten].  As a result, there was no reason why Elekta should not disclose documents which relate to communications with customers or potential customers relating to the development of its product. 

Tuesday, 6 December 2016

BREAKING: Unanimous Supreme Court in Samsung v Apple finds that damages may be based on a component, not whole product

Has a bite been taken out of Apple's damages
 or is it too soon to tell?
The AmeriKat has perhaps become cynical over the course of 2016.  When asked recently what she thought motivates people's decision making process, her answer was resolutely "money".  Money, money, money (as Abba would say).  The Supreme Court has also had money on their mind (as Snoop Dog would say).

Today, in Samsung v Apple (2016), an unanimous Supreme Court has held that where a multi component product is concerned, damages need not be calculated on the basis of the whole end product sold to a consumer.  Instead, damages may be assessed on the basis of only a component of that product. The dispute concerns Apple's design patents for specific elements of the iPhone and Samsung's previous order to pay Apple $399 million in damages for infringing its designs.  For a summary of the background see the AmeriKat's previous posts here.

35 USC § 289 states that:
“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250 . . . .” 
The question before the Supreme Court was:
Must the relevant "article of manufacture" always be the whole end product sold to the consumer or can it also be a component of that product?  
Depending on the answer, the design patent holder may always be entitled to the infringer's total profit of the whole product or only sometimes entitled. 

In a refreshingly short decision, Justice Sotomayor (delivering the opinion of the Court) stated that the term "article of manufacture" includes both a product sold to a consumer and a component of that product:
"So understood, the term “article of manufacture” is broad enough to encompass both a product sold to a consumer as well as a component of that product. A component of a product, no less than the product itself, is a thing made by hand or machine. That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture."
The Federal Circuit's narrower reading of "article of manufacture" was that because consumers could not purchase individual components of the whole product, they therefore did not constitute an "article of manufacture".  In their words "[t]he innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers".  This, the Court held, could not be squared with the text of Article 289.  The Supreme Court therefore reversed the Federal Circuit's decision.

Although the parties had asked the Supreme Court to resolve, for each of the design patents at issue, whether the relevant article of manufacture was the smartphone or the particular component, the Court declined stating that:
"Doing so would require us to set out a test for identifying the relevant article of manufacture at the first step of the §289 damages inquiry and to parse the record to apply that test in this case. The United States as amicus curiae suggested a test, see Brief for United States as Amicus Curiae 27–29, but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the §289 damages inquiry in the absence of adequate briefing by the parties. Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand."
So back to you Federal Circuit to figure out what the right test is....

(Belatedly) remembering Raymond Niro, the most influential person in patent litigation whom you may have never heard of


In August, 2016, one of the most influential persons in modern patent litigation, Raymond Niro, passed away at the age of 73. It has taken IPKat some time to properly recall Mr. Niro, but as we approach the end of 2016, it is appropriate to do so now. Some (indeed many) Kat readers may not recognize Mr. Niro’s name, but are likely familiar with the moniker that, according to many accounts, was bestowed upon him by an assistant general counsel of Intel. That nickname was "patent troll”, a term that has become a central part of contemporary IP parlance. If there is one person who is most directly identified with the phenomenon, known in a more anodyne fashion as NPE (non-practicing enterprise) or PAE (patent assertion entities), it was Mr. Niro. Vilified, condemned, or worse; admired, revered or even more; probably no person in contemporary IP practice was more divisively viewed than Mr. Niro.

IPKat does not intend to address the debate over NPE’s, PAE's and the like, which has been voiced many times on this blog site, and the arguments over which will surely continue to rage on for the foreseeable future. The intention of IPKat is modest and personal—to briefly recount the life of the person who changed the way that patent litigation is perceived and practiced.

Born to Italian parents in Pittsburgh (ironically, perhaps, he died while visiting the island of Capri in Italy), Mr. Niro studied chemical engineering, worked for a time at Shell Oil as an engineer before taking a position at DuPont, where he wrote patents. Like so many patent practitioners of his time, he studied law at night at George Washington University. (This Kat can only hope that one or more graduates of this program will yet share in writing their memories of that experience.) After completing his studies, he moved to Chicago in 1969 to join the IP firm now known as Brinks Gilson & Lione. In 1976, he left the firm to set up a law office with Gerard Hosier. There, they came up with what is described as a “novel” form of client representation at the time—contingency representation of small inventors in patent litigation cases. In 1994, he and Mr. Hosier parted ways and Mr. Niro set up a law firm bearing his name.

Mr. Niro’s courtroom skills were legendary, and he is said to have possessed special skills in cross-examination and being able to connect with the jury. He was a reported master at focusing the case before the jury on the (small, aggrieved) inventor rather than the invention. It is reported that he was victorious in 20 jury verdicts in a row, generating awards in excess of $400 million dollars (reportedly, he set his fee at between 35%-45% of the gross revenues received.) In addition to his court room victories, there were numerous settlements reached after the mere receipt of a cease and desist letter from his office.

Mr. Niro never seemed to waiver from his declared commitment to representing the small inventor. His son Dean is quoted in the Chicago Tribune as saying that his late father—
"…. loved the small inventor and was the champion of the little guy. He was never happier than when he was meeting with the individual inventor, and when he represented those people, it meant more to him than you could imagine."
Mr. Niro apparently enjoyed substantial financial success in his practice. He endowed the Niro Distinguished Intellectual Property Lecturer and Raymond P. Niro Professor of Intellectual Property Law at the College of Law at DePaul University.

Over the last decade, a number of factors have made it more challenging for patent plaintiffs, including the America Invents Act, U.S. Supreme Court decisions on patentability and fee shifting, and appellate court decisions on patent damages. President Obama himself called out against the practice of patent assertion entities. Debate will continue on the pros and cons; Kat readers are invited to reach their own conclusions. What is undeniable is that during his career Mr. Niro exerted a towering influence over the practice of patent litigation.

For more on Mr. Niro, see here and here.

Photo from Chicago Tribune (Family photo / Handout)

Genuine use of three dimensional EU trade marks - heated arguments over ovens

Registered mark
In 2004, the German company Bullerjan GmbH applied for the shape depicted on the right as EU trade mark (or Community trade mark, as it was then) for ovens (stoves). In 2005, the mark was registered.

In 2012, plaintiff Toni Klement filed an action for cancellation of the mark for lack of genuine use. Klement's principal argument is that the mark was always used in connection with the sign "Bullerjan" affixed to the front of the oven (see image below). Klement lost both before the EU IPO and the General Court, but the Court of Justice on 1 December 2016 reversed the General Court's judgment (EU:C:2016:918). Since the order is only available in German and French, the following provides a brief summary for the English speaking public.

Article 15 EU Trade Mark Regulation (207/2009) reads
1.   If, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use.
The following shall also constitute use within the meaning of the first subparagraph:
(a) use of the Community trade mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered [...]

[Note that the wording has been amended by Regulation (EU) 2015/2424, but the above is the relevant version for this case.]

Actual use
The General Court in its judgment of 24 September 2015 (EU:T:2015:688) reminded everybody that genuine use required use that served the main function of the mark, namely identification of source (with reference to EU:T:2004:225). Genuine use did not require use in isolation of the registered sign (with reference to EU:C:2005:432). However, a registered mark that was used in connection with another sign must still be perceived as indication of origin (EU:C:2013:253 - Colloseum Holding). The joined use must further not affect the distinctive character of the registered mark (EU:T:2005:438 - CRISTAL CASTELLBLANCH). This required taking into account both the distinctiveness of the added element(s) (EU:T:2014:119 - PALMA MULATA) as well as the distinctiveness of the registered mark. The weaker the distinctiveness of the registered mark, the more readily it was affected by the addition of a distinctive element (para. 33).

With regards to the case at issue, the General Court held that the shape of the oven as registered was unusual, reminding of an aircraft engine rather than a stove, and highly distinctive, despite its functionality and "notwithstanding that other manufacturers sold ovens under the word marks Bruno and Bulder that have a very similar shape, because this may be because these manufacturers want to achieve a certain technical effect, namely heat exchange by convection" (para. 39).

Competitor's "Bruno" oven
It was primarily this last statement the Court of Justice took issue with. It held, in essence, that it was contradictory to consider the "Bullerjan" oven's shape "unusual" and highly distinctive when there were similar shapes on the market. The degree of distinctiveness of the registered mark was highly relevant when assessing whether it was affected by the addition of other distinctive elements (with reference to EU:C:2016:642 - Lotte/EUIPO, para. 30 - only available in French and German). The case was sent back to the General Court to re-assess why the shape of the registered mark was perceived as an indication of origin and not merely as the functional appearance of the goods claimed given the existence of similar shapes on the market.

The case leaves me somewhat puzzled. The reasoning of the General Court seems indeed unconvincing. But if the shape of the "Bullerjan" oven was highly distinctive when registered - and that seems to be the case to me at least, functionality notwithstanding - then why has the trade mark owner tolerated the use of similar shapes by its competitors? Unless there are good reasons for it which escape me, the case serves as a reminder that registering a mark is only part of the game. You also need to enforce your mark, or you risk losing it.

Wild Boys Sometimes Lose It: Duran Duran fail to reclaim their US copyright

A few weeks after his eighteenth birthday, Duran Duran co-founder Nick Rhodes signed a music publishing agreement assigning his existing and future copyrights to a publisher, as did the other band members. None of them was aged more than 21 at the time.

Had they taken advice from a copyright lawyer at the time (1980), one can imagine a conversation along the following lines:

Duran Duran: Please please tell me now: Is there something I should know? Is there something I should say?
 Lawyer: You mean, is there something you should say, before your copyright goes away?
Duran Duran: That's funny, for a lawyer. But we didn't agree to pay you a hundred quid for your songwriting talents. What do you think about this contract?
Nick Rhodes, co-founder of Duran Duran (photo: Eva Rinaldi, CC BY_SA 2.0)
Lawyer: Well, you're agreeing here to assign all of your existing and future copyrights worldwide for their full term. That's pretty standard stuff. But there's a new Copyright Act in the United States, just two years old, and it will allow you to reclaim your copyright from the publishers after 35 years. Which is nice, though it does rather assume anyone will be buying your records in 2015 (no offence). 
Duran Duran: Eh thanks. What exactly should we do? 
Lawyer: When the 35 year mark is approaching, you'll simply serve a notice on the publisher. Tell them you want your copyright back, lodge a copy of the Notice with the Copyright Office and hey presto it will revert to you. So in your contract, you could include a clause stating that the assignment is without prejudice to your rights under section 203 of the US Copyright Act to terminate the assignment of the US copyright. 
Duran Duran: They'll never go for it. Have you seen our haircuts? They won't change their standard contract for us. And if they don't sign us up, nobody will.
Lawyer: Well don't worry about it. When Congress was passing the law, they had unequal relationships like that in mind. Here's what they say in House Report 94–1476 introducing the law: 
"A provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited ... Instead of being automatic, as is theoretically the case under the present renewal provision, the termination of a transfer or license under section 203 would require the serving of an advance notice within specified time limits and under specified conditions. However, although affirmative action is needed to effect a termination, the right to take this action cannot be waived in advance or contracted away."  
And it's right here in section 203(5): "Termination of the grant [of a transfer or licence of copyright] may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant." So basically, it doesn't matter what you sign now. You can't contract away the right to claim the copyright back when the time comes. 
Duran Duran: Cool. Now about your fees. We've been thinking. Maybe we can cut you in on the royalties for our first three albums instead? 
Lawyer: Thank you, but my understanding is that you have never even been inside a recording studio. I think I'd prefer the hundred pounds we agreed on. In cash please, boys.
Factual background

This conversation never happened of course, and indeed we don't know if the band took any advice or knew about the possibility of claiming the US copyright back in the future. What we do know is the band members signed a music publishing agreement assigning the "entire copyrights" in their existing and future works for the "full term" of the copyrights, to Gloucester Place Music Ltd (then called Tritec Music Ltd, and now part of the Sony/ATV group).

In 2014, with the 35 year point approaching, band members Nick Rhodes, Simon Le Bon, John Taylor, Andy Taylor and Roger Taylor, duly served Notices under section 203 in respect of 37 songs, including most of their best-known works like "Girls on Film", "Rio", "Hungry Like The Wolf" and "Is There Something I Should Know?".

Gloucester Place Music responded by seeking a determination from the English High Court that such Notices, if not retracted, would represent a breach of contract, i.e. by improperly terminating an assignmentwhich the band members had no right to do.

Effect of contractual agreement

Mr Justice Arnold has decided in favour of the publisher and against the band members. The case is Gloucester Place Music Ltd v Le Bon & Ors [2016] EWHC 3091 (Ch). His decision is based on the fact that the contract was made under English law, and on its proper interpretation the parties are assumed to have been aware when entering into the Agreements, at least in general terms, of the effect of section 203, and to have nevertheless contracted away the US copyright for its full term. He summarised at [44]:

"The language of clause 3(a) is wide and general. Particularly when read together with clause 4, I consider that what the language would have conveyed to a reasonable person having the relevant background knowledge was that the parties' intention was that the "entire copyrights" in the Compositions should vest, and remain vested, in the Claimant for the "full term" of the copyrights. That implicitly precludes the Group Members from exercising rights under US law which have the result that the Claimant's ownership of the copyrights is brought to an end prior to their expiry. Moreover, this interpretation is reinforced by clause 6(b), by which the Group Members promised not to transfer any interest in the copyrights to any other person, which I read in context as meaning any person other than the Claimant. (This is clearer from the wording of clause 6(b) of the Service Company Music Publishing Agreements, which refers to "any person, firm or corporation other than Tritec".) In effect, what the Group Members have done by exercising their rights of termination is to transfer the reversionary interest in the copyrights from the Claimant to themselves."
The reference to "a reasonable person having the relevant background knowledge" was held to include some knowledge of US copyright law. In other words, someone signing a contract such as this was assumed to know, at least in general terms, about the possibility of reclaiming copyright in the US.

Insofar as it goes, this may be a pretty unremarkable interpretation of a contract under English law. But what about the fact that under US law the right to terminate the assignment cannot be contracted away?

Conflict with US law

Arnold J. noted the US law aspect but pointed to the fact that Article 7(1) of the Rome Convention, which provides for effect to be given to the mandatory rules of the law of another country with which the situation has a close connection, does not have the force of law in the United Kingdom by virtue of section 2(2) of the Contracts (Applicable Law) Act 1990.

The issues of US law were treated as questions of fact. No expert evidence had been provided as to the meaning of the US statute, nor had permission been sought to do so. So efffectively they were never brought properly before the court.

The solicitor for the defendants (i.e. the band members and their service companies) had made a statement in his witness statement that:

"As a consequence of Section 203, a US Court would not allow a claim for damages for breach of a contractual agreement because the statutory termination right supersedes any contractual right. This applies whether that contract was governed under English or US law." 
The defendants argued that this was admissible evidence, and was unchallenged. Arnold J had little time for this argument. It was no more than a statement of case with which they could expect the other side to take issue at trial. It was a statement made by an English solicitor who, he noted, claimed no expertise in US law, with no basis given and no citation of any decided cases supporting the assertion, and nor did it address whether the position was the same in the period 1980-1983.

To the IPKat it appears that this failure to introduce evidence as to US law represented a major oversight by the defendants, or at least a very risky assumption that the point was self-evident. This Kat cannot tell whether the outcome would have changed if the judge had evidence that the position as stated by the solicitor was both correct as to the law now and at the relevant time, but the failure to adduce this evidence undermined the defendants' reliance on the US law point.

Nick Rhodes, commenting on the judgment, said "We are shocked that English contract law is being used to overturn artists’ rights in another territory. If left untested, this judgment sets a very bad precedent for all songwriters of our era and so we are deciding how properly to proceed."

The IPKat would like to see the case appealed, and would prefer to see artists free to exercise their statutory rights, but is less convinced that the decision sets a "very bad precedent". A future litigant who introduces strong expert evidence on the US law point would at the minimum ensure that the court would have to consider afresh the conflict of laws question.

Rhodes also commented that the band members signed the agreement as "unsuspecting teenagers ... when we knew no better". This bears out the "unequal relationship" rationale for section 203, and is another reason why it would be extremely interesting to see the US law point properly considered.

Arnold J's decision serves a salutory purpose, reminding anyone signing a publishing agreement that the court will interpret the agreement from the viewpoint of a reasonable person with the necessary background information, including some knowledge of copyright law. This makes obtaining good advice all the more critical when the bargaining position is unequal.

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