For the half-year to 30 June 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Alberto Bellan, Darren Meale and Nadia Zegze.

Two of our regular Kats are currently on blogging sabbaticals. They are David Brophy and Catherine Lee.

Sunday, 31 July 2011

Letter from AmeriKat: Green light for Red or Green Chile?

The AmeriKat is planning a much-needed vacation to her homeland in the next couple of weeks. Travelling from the high mountains of northern New Mexico (Santa Fe, Taos, Albuquerque) south on I-25 you will pass a sign about 40 miles north of where the AmeriKat was born for "Hatch". Hatch, New Mexico, a small community in the heart of chile pepper country, is known as the "Chile Capital of the World". Chile is the lifeblood of New Mexicans - you start eating chiles almost as soon as you are out of the womb and it very quickly becomes an addiction. One of our universities, New Mexico State University, even has a Chile Pepper Institute and our State Question is "Red or Green?". The AmeriKat could go on forever about the utter joys of smelling roasting chiles in mid-September, the thick succulence of stuffed chile rellenos, mopping up excess chile with tortillas.....drool. What is also universal amongst the New Mexican chile-loving public, is that no self respecting New Mexican or chile connoisseur would really enjoy eating chile from anywhere else than New Mexico; anything else is frankly just an embarrassment. (picture, left - the AmeriKat getting her cruising face on for her trip down I-25)

Hands off our Chile

This sentiment has been translated to a new state law - the New Mexico Chile Advertising Act - that aims to protect New Mexico green chile and its heritage by preventing cheaper foreign peppers from countries such as Peru, China and Mexico being labelled as New Mexico-grown. Geographic indications, as protected under Article 22 of TRIPS, have been a source of contention for many food and beverage producers. In the UK we have seen issues of geographic indications arising in a line of extended passing off actions starting with the first "Champagne case" in 1961 and in Europe with Budweiser/Budějovický Budvar case. The same headaches faced in Europe are also faced by producers on the other side of the pond. Like champagne, which describes the grape but most importantly the region where the vines are grown and thus the geographical indication of the goods in question, the New Mexican chile pepper faces similar issues. There is no such thing as a "New Mexican" or "Hatch" chile pepper but instead the sign denotes the region where the peppers are grown. Just as the Champagne region's environment produces unique qualities in the growing and production of champagne, New Mexico's high altitude, long hot seasons, sunlight and cold desert nights produce the unique flavor that denotes the New Mexican chile pepper (picture, right - Hatch green chile).

Stephanie Walker of the Chile Pepper Institute told NPR that:
"As with other crops in other parts of the country - we all know about the Vidalia onion, we know about other crops that really have their brand identity in place. New Mexico has that, but it's never been protected the way other crops and other parts of the country has."
In the EU under Council Regulation No 5110/2006 there is a three-tier system of protection of geographic indications: (1)Protected Designation of Origin (PDO) which protects agricultural products and foodstuffs that are produced in a given geographical area using recognized know-how (2) Protected Geographical Indication (PGI) which protects agricultural products closely linked to the geographical area; and (3) Traditional Speciality Guaranteed (TSG) which highlights traditional character in the composition or production of the product. There are also special regimes for wines and spirits (search here for champagne, cognac, rhum, etc). Aceto Balsamico di Modena is a registered PGI for Italy, Stilton cheese (picture, left) is a registered PDO for the UK, and a PDO is registered for Roquefort cheese by France. A few days ago a PGI was registered by the UK for the Cornish Pasty (see here).

The US does not have such a robust quasi suis generis system for geographic origins/indications (of which was a matter of contention for the US in 2005 - see here). The protection instead takes the form of registered trade marks, collective marks or certification marks (compliant with TRIPS? a discussion for another time). The US's system uses the same procedural and administrative structures for geographical indications as it does for trade marks. Section 1054 of the Lanham Act provides that geographic names or signs which would otherwise be considered geographically descriptive, and thus unregisterable without showing acquired distinctiveness, can be registered as certification marks. Certification marks differ from trade marks because the owner of the certification mark does not use it - they only allow others who meet the certification standards to use it. Further, certification marks do not denote a source of commercial undertaking- they only identify that the nature and quality of the goods have met certain standards.

There are three types of certification marks: (1) regional or other origin; (2) methods, process or other characteristics of the goods/services; or (3) the work was performed by a member of a union or organization. For example, US Registration No. 571,798 for ROQUEFORT is used to denote that the cheese has been manufactured from sheep's milk and cured in the caves of Roquefort - thus fulfilling (1)and (2) of the categories of certification categories. Trade mark protection is also available under the normal rules - if NEW MEXICO CHILE has acquired a secondary meaning other than primarily denoting a geographic region then the sign is registrable. For example, if consumers see the mark NEW MEXICO CHILE and identify that the product was grown by the chile producers in New Mexico (and even specifically those in or around Hatch, NM) then the sign will have acquired a secondary meaning. Likewise, a collective trade mark could be registered on behalf of an association or "collective" such as the New Mexican Chile Association whose members in turn use it to identify their goods from non-members. US law has also protected geographic indications through common law trade mark law without need for a registration ( the "Cognac" case - Institut National Des Appellations v Brown-Forman Corp (TTAB 1998)).

However, when it comes to produce and products which are of such strong cultural and heritage state significance like the New Mexico chile, it is the state's government that usually applies for a certification mark. The owner of a certification mark is usually a governmental body, for example like a state's department of agriculture or a state sanctioned body to undertake the certification and policing activities. For example, in relation to Vidalia onions(grown in Georgia), the mark is owned by the Georgia Department of Agriculture. New Mexican lawmakers have consistently decided not to obtain federal certification or trade mark protection for the New Mexico chile pepper for reasons unknown to the AmeriKat.

However, she suspects its either due to lack of IP understanding or due to money (NM doesn't have much). The protection, which has been afforded to the likes of Florida oranges and Idaho potatoes would cost the New Mexico government money to register and to enforce. But as all IP lawyers know, investment in registration and protection pays off. A registration would enable New Mexico to take action in federal court against defendants who label chile as New Mexican grown as well as put US Customs on notice to stop the importation of chile with false geographic designations on it. (picture, left - a sign in Hatch, NM)

Although the New Mexico Chile Advertising Act makes it illegal to falsely advertise chile as being from New Mexico, because it is a state and not a federal law the extent of its protection is pretty minimal when compared to the protection afforded by a registered certification made at the USPTO. As one of the poorest states in the US, the AmeriKat urges her state government to get on with certification mark or collective trade mark protection. Although there may be initial expense in the registration process, the advertising value of "Brand Chile" should not be underestimated. It may not rival "Brand Champagne" or "Brand Florida Orange" but the value of "Chile" IP is worth protecting, as are the farmers and New Mexicans whose livelihoods depend on the protection.

The AmeriKat cannot help but think that if the New Mexican chile was growing in the UK or anywhere else in the EU there would already be a registered PGI for it. Should there be some sort of mechanism or assistance for state governments to easily and cheaply register their GI's at the USPTO in order to protect their heritage and local agricultural economies?

And all that (Pakistani) jazz ...

This Kat has been busily keeping pace with the numerous copyright judgments handed down by the English courts in recent days and she has learnt an awful lot about the finer points of Star Wars helmets, media monitoring services and blocking illegal file sharing websites. This post comes then by way of some lighter relief.

Readers will no doubt be familiar with 'Take Five', a jazz piece written by Paul Desmond and performed by The Dave Brubeck Quartet on their 1959 album Time Out. It has been included in a number of movie and television soundtracks, and even today, some 52 years later, is still played on the radio. Upon his death in 1977, Desmond left the royalty rights to the American Red Cross.

Readers will no doubt be less familiar with classical music in Pakistan. The Pakistani movie industry all but died and the fate of classical music went into rapid decline. Until now. The Sachal Studios Orchestra in Lahore is making a comeback. Their first jazz album Sachal Jazz was released recently and the group's interpretation of 'Take Five' has received considerable attention. Indeed Dave Brubeck, original performer of 'Take Five', described The Sachal Studios Orchestra interpretation as 'the most interesting recording of it he has ever heard'.

The IPKat thinks that, so long as appropriate permissions have been obtained and the necessary attributions made, adaptations such as this one can only be a good thing for the creative process.

Merpel wonders what interpretation the Sachal Studios Orchestra might put on some Lady Gaga tunes ...

'Take Five', Dave Brubek style, below


The Sachal Studios Orchestra's interpretation, below

Friday, 29 July 2011

Plain packaging for tobacco products: some legal issues

Sooty didn't mind endorsing the
product, but he did object to being
paid in cigarettes ...
This Kat was wondering what has been happening in Australia, where plain packaging for tobacco products has been mooted as a means of discouraging smoking.  He is indebted to his friend John Nobel (British Brands Group) for letting him have this helpful update on a topic which this blog has covered on two earlier occasions, here and here:
"On 6 July two Bills were tabled in Australia’s House of Representatives: the Tobacco Plain Packaging Bill and the Trade Marks Amendment Bill. Coincidentally on the same day the UCL Law Faculty circulated a paper, Implications of WTO law for plain packaging of tobacco products” (by Tania Voon and Andrew Mitchell) to those who hoped to attend the aborted event “'Tobacco or trademarks: Australia's plain packaging of cigarette products and the WTO”.  
Closer to home ['home' is a relative term, but in this context it's Britain], the Department of Health is to launch a consultation by the end of this year on plain packaging, while the European Commission (DG Sanco), having already consulted on this subject last year, is due to publish its response early in 2012. The consultation is understood to have generated a substantial number of submissions covering IP. All this suggests the topic may be worth re-visiting for IPKat readers.  
Whatever one’s view of tobacco products, these developments are of keen interest to those involved in brands and trade marks, raising questions on the lengths to which countries may go to regulate legal products but more particularly on the extent to which they can disrupt long-established, legitimate and immensely valuable trade marks.  
The paper by Tania Voon and Andrew Mitchell addresses both the international trade and IP aspects of plain packaging, arguing that the proposal is consistent with TRIPS, the Technical Barriers to Trade (TBT) Agreement and GATT 1994, calling any challenge by tobacco companies under such agreements “a desperate last gasp” (having said that, Australia has notified its draft Bill to the WTO under the TBT agreement and a number of states have raised concerns over both the legality and the proportionality of the measure).  
Leaving aside the trade arguments – which Voon and Mitchell dismiss and which are now the subject of a legal challenge by Philip Morris International (on the basis of Australia’s Bilateral Investment Treaty with Hong Kong) – it is the IP aspects which will be of particular interest and relevance to brand owners and IP practitioners. The Voon Mitchell paper sets out some of the IP areas where debate is likely to rage and it is worth looking in particular at two key ones: 
(1)     Would plain packaging deny the registration of trade marks or invalidate existing trade marks contrary to international agreements? This is addressed by TRIPS (Article 2 and 15.4) and the Paris Convention (Article 6 quinquies). Voon and Mitchell argue that these provisions are not relevant as trade mark rights are negative rights, in that they prevent others from doing something (this reflects TRIPS Article 16). Plain packaging proposals would prevent use, not deny registration or invalidate rights. Neither TRIPS nor the Paris Convention provides a right to trade mark owners to use their rights. Where a Member State requires proof of use in order to validate a trade mark (like the UK), a trade mark owner can prevent invalidation by demonstrating a valid obstacle to use, which a plain packaging regulation would be.  
The counter arguments are that trade mark rights are a bundle of rights (not just a negative right to exclude others) and that registration and use are inherently linked. In addition, the right of the trade mark owner to exclude others from using the mark implies that the use of the mark is reserved to its owner. The right to a trade mark that cannot be used is not a right in any legal sense. In countries where an application for registration depends on existing use or an intention to use, registration would be effectively impossible. Further, in such countries that require evidence of use, there is a positive obligation to use. It is also worth noting that the Paris Convention and TRIPS provide protection against invalidation and plain packaging amounts to an invalidation.  
(2)     Would plain packaging represent an unjustifiable encumbrance on a trade mark and therefore contrary to TRIPS (Article 20 requires that “The use of a trademark in the course of trade shall not be unjustifiably encumbered by special requirements….”)? Voon and Mitchell acknowledge that plain packaging is a special requirement that may be considered an encumbrance but claim this is justifiable on health grounds. Article 20 should be read in conjunction with Article 7 (protection and enforcement of IPRs being conducive to social and economic welfare), Article 8 (Members may adopt measures necessary to protect public health) and the Doha Declaration which re-affirmed Members’ rights to protect public health. Further, were a Member State to claim that Australia was in violation of Article 20, it would be down to that Member State to prove it.    
Controversy is likely to focus on whether plain packaging is justifiable. It is likely to be argued that an encumbrance can only be justified if it is necessary to protect public health. There is no convincing evidence that plain packaging will lead to a reduction in smoking, there are other less restrictive measures available and countries have reduced smoking without recourse to plain packaging. All this suggests that plain packaging is open to challenge whether the measure is justifiable, necessary and proportionate. 
There must be some relief in UK and European government circles that it is Australia experimenting with such regulation. There seems plenty to argue that plain packaging would amount to a denial of registration, effective invalidation and an unjustifiable encumbrance on trade marks. Bearing in mind the value of the trade marks at stake, we can expect these arguments to be made formally and forcefully".
The IPKat thinks this is a very useful summary of the lines of argument which we are most likely to be hearing when the debate in Europe takes place. Merpel wonders whether the legal arguments will indeed be weighed and balanced or whether, this being the real world, the result will be based on the fact that people who oppose smoking lobby harder to wipe it out than people who support it fight to preserve it.

Friday fantasies

Friday has come round again and, with it, the usual reminder to check the IPKat's Forthcoming Events page to see what's looming up in the future. There are conferences, seminars, all sorts of attractions. Might we see you at any of them?


Youth opportunity of the week.  The IPKat is getting quite a few requests these days from young enthusiasts in search of that elusive first rung on the ladder of life in the IP field.  This week's eager youngster is Simon Graham, who writes:

"I am a highly motivated postgraduate looking for an internship with a patent firm or in-house patent team ideally in the UK, Europe or America. Having gained the Master in the Management of Intellectual Property and the certificate in Intellectual Property Law from Queen Mary [for the benefit of first-time readers, the Kat explains that Queen Mary is the college, not the ship or even the pub], I am part qualified and currently studying for the UK Patent Practice (P2) exam.

My technical background is in life sciences and computing gained in the pharmaceutical industry with some experience of working in an IP environment.
Please contact sgraham_ip@yahoo.com if you can help." 
Well, readers -- if you are interested, you know what you can do!


Around the weblogs. The Cyberleagle blog, authoritatively authored by the IPKat's friend Graham Smith, carries this eloquent piece on "10 essential points from Newzbin2".  Graham's very discreet about which law firm he works for, but it has four wings and plenty of feathers.  The jiplp weblog features a Current Intelligence piece by Kingsley Egbuonu and Chukwuyere Izuogu on the only case known to this Kat in which an injunction to restrain a patent infringement had repercussions for the conduct of a general election. PatLit's latest PCC Page investigates the often essential inconvenience of finding the right expert witness here.


Want to impress your friends?
Judicial fancy dress available
here
The IPKat wonders what fate is about to befall intellectual property litigation in England and Wales. Only a short while ago he was celebrating the elevation of two of the country's Patents Court judges to the Court of Appeal.  Now he has just read the following snippets:
  • The Queen has been pleased to approve the appointment of Robert Henry Thoroton Hildyard, Esq., Q.C., to be a Justice of the High Court with effect from 3 October 2011 on the elevation of Mr. Justice Lewison to the Court of Appeal.
  • The Queen has been pleased to approve the appointment of Rabinder Singh, Esq., Q.C., to be a Justice of the High Court with effect from 3 October 2011 on the elevation of Mr. Justice Kitchin to the Court of Appeal.

Like any well-mannered feline, the Kat welcomes the new appointments, who appear well qualified for the bench, and wishes them the best of luck. He is however a little anxious since, to his great embarrassment, he hasn't heard of either of the new judges before and has a trifling suspicion that they're not main-line IP-ers.  This leaves him wondering whether the vacancies in the Patents Court will be left empty, or filled by 'outsiders' (as has been done before, sometimes with notable success). Or maybe we'll be cutting down on those expensive High Court types and stocking up on cheap-and-cheerful Patents County Court judges instead, now that Judge Birss has made that court so popular.  Does any reader know?

When is a secret not a secret?

Question: when is a secret not a secret? Answer: when everyone who wants to be told has a right to find out. This is the moral of a fascinating and really important decision of Mr Justice Arnold on Wednesday in the Patents Court, England and Wales, in LG Electronics Inc v Sony Europe Ltd, Sony Computer Entertainment Europe Ltd, Sony Computer Entertainment Inc and Sony Corporation.

LG sued Sony for infringement of three Blu-Ray patents. In these proceedings LG applied for summary judgment in relation to Sony's defence that LG's patents were invalid in light of an item of alleged prior art. The earliest priority date for any of those patents was March 2003.

Sony's defence was based on invalidity, basing its position on a document on DVD specifications for read-only discs which was available to the public in 1997.  According to LG, this 1997 document was not prior art that was capable of undermining its patents' novelty. The information in it was held by a standards body, the DVD Format/Logo Licensing Corporation, for the limited purpose of developing DVDs and related products. This document was only accessible by people who paid the required fee and signed a non-disclosure agreement. Accordingly it was not made available to the public.

Mr Justice Arnold refused the application for summary judgment. Among other reasons for doing so, he concluded that, even though he would accept LG's evidential submissions in support of confidentiality and the restriction of the use of the information in the 1997 document, a not-unrealistic possibility remained that Sony would be able to establish that all interested persons, who might want to manufacture under the standard, had an opportunity to gain knowledge of the contents of that document and to use that information for their own purposes.

Notes the IPKat: if a standard truly is a standard, everyone who wants to make any product that is governed by the standard has to make it in accordance with that standard -- or it wouldn't be standard.  What's more, since we allow the setting of standards and don't stigmatise them automatically as being anticompetitive clubs where information concerning the standard is pooled between club members so that no-one else can make products that conform to the standard, it would be not just anti-competitive but positively churlish to refuse to provide details of a standard to anyone who asks. Now, what sort of people ask for details of standards? Obviously, anyone who is interested in making DVDs.

This case raises another important question: is information which is available in the public domain to be treated as confidential for the purposes of patent law by virtue of the fact that it's labelled "confidential"? The answer must be "no": though the information may not be available to the public free, what the public does have is a known source for the information which will be available to all on similar, justifiable terms as of right.  In these circumstances, the purpose of the obligation of confidence is clearly only to ensure that a standards body is able to recover its own charges. That is quite different from an obligation of confidence designed to restrict the supply of information per se.

This case is not yet available on BAILII.  Merpel keeps hearing dire rumours of cases which have recently been posted on BAILII and then have suddenly disappeared again, apparently for "copyright reasons". She fervently hopes that copyright is not about to come into conflict with the public's interest in gaining access to the law, including decided cases with precedental value by which that public is bound. If any readers have experienced this phenomenon, will they please let Merpel know.

Blu-Ray here
Sting Ray here
Sugar Ray here
Catt Ray here

Thursday, 28 July 2011

Further Thoughts on "IP Transactions: A Possible IP Course"


First a little bit of personal history. Before IP became my 24/7 preoccupation, during the days that Franz Beckenbauer, Johan Cruyff, and Watergate competed for headlines (aka the 1970s), this Kat chased another intellectual muse and pursued a doctoral program in education. A Ph.D. and assorted publications accompanied that quest, but what was most lasting is my interest in the way that educational courses and programs are structured. As Mrs Kat frequently observes, the "educator" in me has still occupies a prominent part of my professional psyche.

All of this was brought to bear in reading Jeremy's blog post and the ensuing comments of last Friday--"IP Transactions: A Possible IP Course" here. No better person to fashion such a course than the IPKat's friend, Mark Anderson, and we wish him the best of luck in this endeavour. And yet, I came away from the exchange with a certain feeling of unease. In a word, is it ultimately most productive to try and teach transactional principles to IP types, or rather to teach the rudiments of IP to transactional types? [Let's make a forced choice here, replying that both are equally desirable will not do.]

This Kat has done both. First there was a multi-year attempt to fashion a course on IP transactions for law students. He struggled with the course curriculum ("how much to emphasize the distinctive versus the holistic aspects of IP licenses, assignments and the like?"; "how much to don the cap of the would-be professor and how much to wear the cap of the dispenser of practical wisdom"; "how much to lecture and how much to actively engage the students"). Frustration dogged him throughout.

So this Kat jumped at the invitation to fashion a course for Economics students, with the charge from the dean of the faculty to impart in these students a working knowledge of IP principles. That seemed clear enough, but then he starting thinking--"how exactly is he going to know what IP principles are most relevant for Economic students?" For sure, he had the privilege of sitting at the feet of the iconic Richard Posner in trying to learn "law and economics", but the immediate task was quite different. What was of interest was not applying economic principles to the law, but applying legal principles and, in particular, IP principles, in order to promote better learning of Economics. The challenge was daunting and the results were mixed, say 7.5 out 10.

So this Kat moved further even afield, headlong into the world of MBA education. For five years now, his curricular work-in-progress has sought to provide a grounding in IP within the broader educational goals of managerial education. The result is a 20/80 split, providing enough IP to allow meaningful conversation, and then weaving IP issues into the context of the managerial and case study literature, garnished with the occasional guest lecturer from various segments of industry. For whatever reason, the balance between lectures and student engagement has been easier to manage, the integration between IP and business a more seamless enterprise, the overall experience much more satisfying pedagogically speaking.

The cynic might say that the reason for this rests in the nature of MBA education, the point often being made that it is a mile long and six inches deep. The whiff of alleged dilettantism is palpable. Such a claim misses the point. If asked whether to prefer transaction principles for IP types, or IP principles for transactional types, I prefer the latter. But maybe my experience is idiosyncratic. It will be interesting, therefore, to see how this proposed curricular initiative to blend IP and transactional law will work out.

No surprise as pharma repackaging rulings rush through

The labels on the box never troubled the IPKat,
but the contents sometimes caused surprise ...
Not every case which is bound for the Court of Justice of the European Union for a preliminary ruling takes forever.  The two cases noted here, Joined Cases C‑400/09 and C‑207/10, Orifarm v Merck Sharpe & Dohme; Paranova v Merck Sharp & Dohme, sped through in pretty good time.  One was referred in October 2009, attracting a ruling in substantially less than two years, while the other hurtled past the judges' noses at almost the speed of light, having been referred as recently as April 2010.  Speedy cases aren't usually the sign of an efficient court, though: they're an indication that the questions referred for a reference were too easy to spend a lot of time on -- as is the case here.

In Case C‑400/09 pharma giant Merck made trade mark-protected medicinal products which Orifarm imported in parallel on to the Danish market by the Orifarm group. Orifarm and another company, Handelsselskabet, held the authorisations to market and sell those medicinal products, while Orifarm Supply and Ompakningsselskabet, which carried out the repackaging, held authorisations to do so. All decisions concerning the purchase, repackaging and sale of these products, including decisions relating to the design of the new packagings and their labelling, were taken by Orifarm or Handelsselskabet. Ompakningsselskabet and Orifarm Supply bought and repackaged the medicinal products, assuming liability for compliance with the requirements for repackagers laid down by the Danish Medicinal Products Agency. The packaging of the products indicated that they had been repackaged by Orifarm or Handelsselskabet, as the case may be.

Merck sued Orifarm, Handelsselskabet and Ompakningsselskabet, on the ground that the name of the actual repackager did not appear on the packaging of the products. The trial court agreed that the defendants had infringed Merck’s trade mark rights by failing to indicate on the packaging the name of the undertaking which had actually performed the repackaging, ordering them to pay damages. The defendants appealed to the Danish Supreme Court, which decided to stay the proceedings and refer the following questions to the Court for a preliminary ruling:
‘(1) The Court of Justice is requested to clarify whether [Bristol-Myers Squibb and Others and MPA Pharma --earlier ECJ decisions] are to be interpreted as meaning that a parallel importer which is the holder of the marketing authorisation for, and possesses information on, a medicinal product imported in parallel, and which issues instructions to a separate undertaking for the purchase and repackaging of a medicinal product, for the detailed design of the product’s packaging and for arrangements in relation to the product, infringes the rights of the trade mark proprietor by indicating itself – and not the separate undertaking which holds the repackaging authorisation, has imported the product and has carried out the physical repackaging, including (re)affixing of the trade mark proprietor’s trade mark – as the repackager on the outer packaging of the medicinal product imported in parallel. 
(2) The Court of Justice is requested to clarify whether it is of significance in answering Question 1 that an assumption might be made that, where the marketing authorisation holder indicates itself as the repackager instead of the undertaking which physically carried out the repackaging to order, there is no risk that the consumer/end user might be misled into assuming that the trade mark proprietor is responsible for the repackaging. 
(3) The Court of Justice is requested to clarify whether it is of significance in answering Question 1 that an assumption might be made that the risk of misleading the consumer/end user into assuming that the trade mark proprietor is responsible for the repackaging is excluded if the undertaking which physically carried out the repackaging is indicated as being the repackager. 
(4) The Court of Justice is requested to clarify whether it is only the risk that the consumer/end user might be misled into assuming that the trade mark proprietor is responsible for the repackaging which is of significance in answering Question 1, or whether other considerations regarding the trade mark proprietor are also relevant, for example 
(a) that the entity which undertakes the importation and physical repackaging and (re)affixes the trade mark proprietor’s trade mark on the product’s outer packaging potentially on its own account infringes the trade mark proprietor’s trade mark by so doing, and 
(b) that it may be due to factors for which the entity that physically carried out the repackaging is responsible that the repackaging affects the original condition of the product or that the presentation of the repackaging is of such a kind that it must be assumed to harm the trade mark proprietor’s reputation (see, inter alia, … Bristol-Myers Squibb and Others …). 
(5) The Court of Justice is requested to clarify whether it is of significance in answering Question 1 that the holder of the marketing authorisation, which has indicated itself as being the repackager, at the time of the notification of the trade mark proprietor prior to the intended sale of the parallel imported medicinal product once repackaged, belongs to the same group as the actual repackager (sister company).’
In Case C‑207/10 much the same thing happened, but the same court referred slightly different questions:
‘(1) Are Article 7(2) of [Directive 89/104] and the associated case-law, in particular the judgments of the Court of Justice in … Hoffmann-La Roche … and … Pfizer … and … Bristol-Myers Squibb and Others … to be interpreted as meaning that a trade mark proprietor may rely on these provisions in order to prevent a parallel importer’s marketing company, which is the holder of a marketing authorisation for a medicinal product in a Member State, from selling that product with an indication that the product is repackaged by the marketing company, although the marketing company has the physical repackaging carried out by another company, the repackaging company, to which the marketing company gives instructions for the purchasing and repackaging of the product, for the detailed design of the product’s packaging and for other arrangements in relation to the product, and which holds the repackaging authorisation and reaffixes the trade mark on the new package in the course of repackaging? 
(2) Is it of significance in answering Question 1 that an assumption might be made that the consumer or end-user is not misled with regard to the origin of the product and will not be led to believe that the trade mark proprietor is responsible for the repackaging through the indication by the parallel importer of the manufacturer’s name on the packaging along with the indication as described of the undertaking responsible for the repackaging? 
(3) Is it only the risk that the consumer or end-user might be misled into assuming that the trade mark proprietor is responsible for the repackaging which is of significance in answering Question 1, or are other considerations regarding the trade mark proprietor also relevant, for example 
(a) that the entity which in fact undertakes the purchasing and repackaging and reaffixes the trade mark proprietor’s trade mark on the product’s packaging thereby potentially infringes independently the trade mark proprietor’s trade mark rights, and that that may be due to factors for which the entity that physically carried out the repackaging is responsible, 
(b) that the repackaging affects the original condition of the product, or 
(c) that the presentation of the repackaged product is of such a kind that it may be assumed to harm the trade mark or its proprietor’s reputation? 
(4) If, in answering Question 3, the Court finds that it is also relevant to take account of the fact that the repackaging company potentially infringes independently the trade mark rights of the trade mark proprietor, the Court is asked to indicate whether it is of significance to this answer that the marketing company and repackaging company of the parallel importer are jointly and severally liable under national law for the infringement of the trade mark proprietor’s trade mark rights. 
(5) Is it of significance in answering Question 1 that the parallel importer which holds the marketing authorisation and has indicated itself as being responsible for repackaging, at the time of the notification of the trade mark proprietor prior to the intended sale of the repackaged medicinal product, belongs to the same group as the company which undertook the repackaging (sister company)? 
(6) Is it of significance in answering Question 1 that the repackaging company is indicated as the manufacturer in the package leaflet?’
What with all these questions, some readers might have been expecting a lengthy set of answers -- but not this Kat. He knew they'd be short and sweet:
"Article 7(2) of First Council Directive 89/104 ... must be interpreted as not allowing the proprietor of a trade mark relating to a pharmaceutical product which is the subject of parallel imports to oppose the further marketing of that product in repackaged form on the sole ground that the new packaging indicates as the repackager not the undertaking which, on instructions, actually repackaged the product and holds an authorisation to do so, but the undertaking which holds the marketing authorisation for the product, on whose instructions the repackaging was carried out, and which assumes liability for the repackaging".
In other words, never mind the technicalities as to whose name appears on the packaging -- look at the reality. The trade mark owner's interest in preserving the integrity of its trade marks is unaffected and the consumer is not threatened or misled,  End of story.

Son of NewzBin: another victory for the film-makers

STOP PRESS: the full judgment -- 67 pages and 204 paragraphs -- can be read here, till it's available on BAILII.  11.23am: it's now available on BAILII here.


In a week that has been absolutely heaving with copyright rulings from the British courts, the IPKat now brings you NewsBin 2, courtesy of Mr Justice Arnold of the Chancery Division, England and Wales. If you remember NewzBin I, just scroll down to the heading NewzBin 2 below.

Background and NewzBin 1

Usenet is a "worldwide distributed internet discussion system". In NewsBin 1 (Twentieth Century Fox Film Corporation and others v Newzbin Ltd [2010] EWHC 608 (Ch)) Fox, together with other film makers and distributors, sued NewzBin, "a British Usenet indexing website notable for its introduction of new technologies and search techniques that aid users by facilitating access to content on Usenet" (per Wikipedia), for copyright infringement.  According to the claimants, NewzBin was focused on piracy in that it located and categorised unlawful copies of films and then (i) displayed the titles of these copies in its indices, (ii) provided a facility for its users to search for particular unlawful copies, (iii) displayed their search results and (iv) provided a simple one-click mechanism for users to acquire the unlawful copies of their choice.

 The defendant company, which owned and ran NewzBin, said its website was simply a search engine like Google -- but that it was directed to Usenet rather than to the worldwide web. It also said it was "content agnostic", being designed to index the entire content of Usenet. Where possible, it provided hyperlinks so that any supply of unlawful material was an act occurring exclusively between the hyperlink user and the relevant Usenet server operators -- but that it played no part in any such activity.

Following a review of both the technology and the relevant law, Mr Justice Kitchin concluded on the evidence that NewzBin clearly knew that its facility was used mainly by its members for the unauthorised downloading of infringing copies of the claimants' films. He then turned to Fox's action, which was based on the following:
(i) authorising acts of infringement by NewzBin's members;
(ii) procuring, encouraging and entering into a common design with its members to infringe;
(iii) communicating the claimants' copyright works to the public, namely the defendant's members;
(iv) categorisation of NewzBin as a service provider with actual knowledge of other persons using its service to infringe copyright, in respect of which the claimants seek an injunction under section 97A of the Copyright, Designs and Patents Act 1988.
As to "authorisation", Kitchin J reviewed and analysed the law relating to that word as it affected copyright infringement, with particular regard to the narrow, literal interpretation placed upon it by the House of Lords in C.B.S. Songs Ltd and others v Amstrad Consumer Electronics Plc [1988] 1 A.C. 1013, when the sale of tape-to-tape recording machines was not regarded as "authorising" infringement of the music copied by them since the company that made and sold the machines had not acted as though it had an entitlement to permit infringing acts by those machines' users. At paragraph 90 he summarised the position:
"... "authorise" means the grant or purported grant of the right to do the act complained of. It does not extend to mere enablement, assistance or even encouragement. The grant or purported grant to do the relevant act may be express or implied from all the relevant circumstances. In a case which involves an allegation of authorisation by supply, these circumstances may include the nature of the relationship between the alleged authoriser and the primary infringer, whether the equipment or other material supplied constitutes the means used to infringe, whether it is inevitable it will be used to infringe, the degree of control which the supplier retains and whether he has taken any steps to prevent infringement. These are matters to be taken into account and may or may not be determinative depending upon all the other circumstances".
Applying this to the facts, he held NewzBin liable:
" ... I am entirely satisfied that a reasonable member would deduce from the defendant's activities that it purports to possess the authority to grant any required permission to copy any film that a member may choose from the Movies category on Newzbin and that the defendant has sanctioned, approved and countenanced the copying of the claimants' films ...".
As for "procuring, encouraging and entering into a common design" to infringe, the judge drew again on C.B.S. v Amstrad and the stiff test which had to be satisfied if liability were to be found:
"... mere (or even knowing) assistance or facilitation of the primary infringement is not enough. The joint tortfeasor must have so involved himself in the tort as to make it his own. This will be the case if he has induced, incited or persuaded the primary infringer to engage in the infringing act or if there is a common design or concerted action or agreement on a common action to secure the doing of the infringing act" (para.108).
Even so, there was ample evidence from which to conclude that NewzBin had so involved itself.

As to whether NewzBin had communicated the claimants' films to the public, Kitchin J found guidance in a European Court of Justice ruling in rather a different context, Case C-306/05 Sociedad General de Autores v Editores de España (SGAE) v Rafael Hoteles SA. In that preliminary ruling on a reference from Spain, the Court had said:
"46 While the mere provision of physical facilities, usually involving, besides the hotel, companies specialising in the sale or hire of television sets, does not constitute, as such, a communication within the meaning of Directive 2001/29, the installation of such facilities may nevertheless make public access to broadcast works technically possible. Therefore, if, by means of television sets thus installed, the hotel distributes the signal to customers staying in its rooms, then communication to the public takes place, irrespective of the technique used to transmit the signal".
On this basis, since NewzBin's premium members indeed downloaded the claimants' films from a place and at a time individually chosen by them, and since its members considere NewzBin to be making the films available to them, liability was established. An enquiry into damages, including additional damages for flagrant infringement was ordered. Injunctive relief would however be less dramatic:
"In my judgment the scope of any injunction under section 97A(2) should extend no further than that to which I have already concluded the claimants are entitled, namely an injunction to restrain the defendant from infringing the claimants' copyrights in relation to their repertoire of films" (para. 135).
NewsBin 2

Following a two-day hearing late last month, the Motion Picture Association succeeded in an action which it brought against a major internet service provider, BT to invoke Section 97A of the Copyright, Designs and Patents Act 1988 so as to require BT to take direct action to block the website NewzBin2 (which, since June 2010, was in effect the resurrected version of NewzBin, using the same code and database as its  predecessor but this time being hosted offshore from the Seychelles).  A fairly joyous joint media release from what seems like a representative selection of the top faces in the rights-owners' camp, reports as follows:
"Arnold J. ... ruled that the Motion Picture Association (MPA), supported by the creative industries, has won an order requiring BT to block access to the pirate website Newzbin2. The site makes unlawful copies of films and television programmes, alongside other content from games, publishers and music available without permission in direct violation of a previous court order against it.
Around 700,000 members use the Newzbin service generating the operators in excess of £1 million per year. This verdict will prevent the site from using BT’s internet service to make money through copyright infringement. 
In his ruling, [Mr, unless there's another media statement on the way, announcing his elevation to the Supreme Court] Justice Arnold stated: 
“In my judgment [not yet circulated at the tine this blogpost was posted] it follows that BT has actual knowledge of other persons using its service to infringe copyright: it knows that the users and operators of Newbin2 infringe copyright on a large scale, and in particular infringe the copyrights of the Studios in large numbers of their films and television programmes, it knows that the users of Newzbin2 include BT subscribers, and it knows those users use its service to receive infringing copies of copyright works made available to them by Newzbin2.”
This significant judgment reflects a clear recognition that, under the existing law, Courts can issue orders to prevent illegal activity online. It rejects BT arguments that they have no responsibility to act against copyright theft and states that the order is proportionate. 
This comprehensive and unequivocal judgment sets a clear legal precedent which will enable content creators and distributors to secure greater cooperation from ISPs to address content theft on the internet and in particular to deal with websites that are focused on wholesale copyright theft".
On proportionality of the remedy, a PDF attached to the media release adds this quote from Arnold J:
"…I am satisfied that the order sought by the Studios is a proportionate one. It is necessary and appropriate to protect the Article 1 First Protocol rights of the Studios and other copyright owners. Those interests clearly outweigh the Article 10 [presumably freedom of expression under the European Convention on Human Rights] rights of the users of Newzbin2, and even more clearly outweigh the Article 10 rights of the operators of Newzbin2. They also outweigh BT’s own Article 10 rights to the extent that they are engaged. The order is a narrow and targeted one, and it contains safeguards in the event of any change of circumstances. The cost of implementation to BT would be modest and proportionate.” [draft Judgment para 200]".
This was intended as a test case, as the court clearly stated, and other ISPs now have a clear idea what is expected of them:
"“The Studios have made it clear that this is a test case: if they are successful in obtaining an order against BT, then they intend to seek similar orders against all the other significant ISPs in the UK. The other ISPs were invited to intervene in the present application if they so wished, but have not done so [was this a strategic decision, wonders Merpel, to keep their powder dry and decide how to respond without being weighed down by the baggage of being parties in these proceedings?]".
The full text of the judgment is keenly awaited. Meanwhile, BT's defences and what happened to them are neatly summarised in the PDF mentioned above. Given the complexity of the issues, as well as the identity of the judge, the smart money is on the judgment being a long one ...

Wednesday, 27 July 2011

Bently slams "very disappointing" ruling in Meltwater

The IPKat's email in-box has been bulging at the seams since he posted his pieces yesterday on the two big copyright cases of Lucasfilm v Ainsworth (here) and NLA v Meltwater (here).  For one thing, he has discovered that there are a lot of angry Americans who don't like Lucasfilm.  For another, he has discovered that no less an academic than Professor Lionel Bently has had some harsh words for the Meltwater ruling. He comments thus:
"The Court of Appeal decision in NLA v Meltwater is very disappointing indeed. The Court, lacking the presence of anyone with a real knowledge of intellectual property [Alas, says Merpel, this is not the first time that has happened -- but that will have to be the subject of a separate post], has merely affirmed the reasoning of Proudman J. adding very little, if anything, of analytic value. In part, this was possible because of the peculiar form of the declaration being sought against the PRCA. The Court took advantage of the vagueness inherent in the form of order sought, merely affirming that Proudman J was right when she found that in some circumstances PRCA memners who received the Meltwater news service would themselves infringe. In so doing, the Court of Appeal ducked the difficult issue of precisely when the activities of a given PRCA member would infringe. Rather than setting the court of first instance straight, examining the law and the facts with rigour and a view to the consequences, the Court chose not to confront the difficult issues of law and its application with which it was faced. 
Firstly, the Court affirmed the judgment of first instance that, by copying the titles and short extracts of newspaper articles, PRCA memners would somtimes infringe copyright. In so doing, it referred to case law that suggested titles may sometimes be protected, but failed to explain away other statements that titles will rarely be substantial enough to constitute works
The Court appears too, to have cowered in the face of being asked to make a qualitative judgment (that titles will only be protected in exceptional circumstances) that it did not even bother to consider the consequences of the protection of titles for freedom of expression more generally. Those involved in all sorts of businesses which involved reproduction of titles of books, films, sound recordings and so on will now be left to wonder in what circumstances, if any, they will be infringing copyright. Moreover, it must be doubtful whether such a conclusion will be particularly useful to the Copyright Tribunal when deciding on what is a reasonable fee for PRCA members to pay
Secondly, the Court of Appeal failed to engage at all with the criticisms of Proudman J's decision on section 28A concerning temporary copies. There is no engagement whatsoever with the travaux behind Article 5(1) of the Information Society Directive and no attempt to engage with its purpose. 
The Court instead simply adopts Proudman J's view that a "consumptive use" such as accessing a web-page falls outside the purview of the provision. 
This means that its utility is confined merely to the making of copying by third parties in transmission systems, even though recital 33 clearly indicates that the Article is aimed at facilitating "lawful use" of a work. 
The Court seems to have missed the fundamental point that browsing -- looking at a web-page -- does not involve an infringement and is perfectly lawful (unless in breach of some sort of security provision). Article 5 is intended, amongst other things, to "enable" such legal acts of browsing: temporary copies created to facilitate such browsing are deemed non-infringing. Remarkably the Court adopted NLA's claim that these acts failed to meet any of the conditions in Article 5. 
Once again, the Court makes no reference to the consequences of such a holding. In the absence of an express or implied licence, hereafter web-users surf the internet at their peril. If a site prohibits access to certain users (commercial users for example, as many newspaper sites do), the browsers acts becomes ipso facto immediately infringing (because the copies inevitably made are outside Article 28A). For sure, very few actions will be taken against such users. But there is something fundamentally wrong with a legal regime which renders the innocent acts of many millions of citizens illegal".
Disclosure: Lionel was advising Meltwater and the PRCA in these proceedings.

This Kat's own personal views are somewhat different, not least because he thought the trial judge and the Court of Appeal got it right. However, he greatly respects Lionel's opinions and thinks that they should never be ignored. In any event, Lionel must be right that this decision will be of little use to the Copyright Tribunal when ascertaining a fair licence fee for PRCA members and he is also correct that the vast majority of titles never even come within sniffing distance of substantiality in terms of copyright protection -- but it's not easy to see precisely what weight should be given to that statement of statistical truth within the context of this case.

The position that "there is something fundamentally wrong with a legal regime which renders the innocent acts of many millions of citizens illegal" is a tricky one. Every day, on the London Underground, millions of innocent commuters push past (and occasionally through) one another when seeking to get on or off trains, overtake on the escalators and so on. Every such contact is at least potentially a civil wrong, a tort of battery, yet we are prepared to tolerate the illegality of these acts. Is internet browsing in all its varied forms the same, or different?

Do please let the IPKat know what you think!

Taking the Exudate - ConvaTec v Smith & Nephew [2011] EWHC 2039 (Pat)

Seeping wounds: not the name of a village in the West Country (the Kat has checked), and neither is it the most savoury of subjects for polite after-dinner conversation. However, it does form the background for the decision in Convatec v Smith & Nephew [2011] EWHC 2039 (Pat), handed down this morning by HHJ Birss – the Judge having discarded his usual Patents County Court hat for the matter and donned that of a Judge of the High Court.

When but a kitten, one of the first things that one learns about tearing around the place with reckless abandon is the fact that most inanimate objects simply cannot be trusted. Apparently immovable, this Kat lost count of the number of playgrounds and trees that conspired to take large chunks out of his paws, elbows and knees by subtly reorientating themselves in respect of his person at a critical point during a daring manoeuvre. Needless to say: there were often cuts and grazes, blood and associated ooze. Anyone that has suffered from high-speed playground contact syndrome will appreciate that the damage caused is usually relatively slight, and the blood loss low. The ooze factor, however, is high, and many a good pair of trousers has been the source of significant pain and discomfort by becoming firmly adhered to the graze site. Wounds, you see, seep, and fabric tends to stick to this seepage.


So back to the case in hand. ConvaTec own a number of patents relating to wound dressings. The patent in suit (EP(UK) 0 927 013) concerned a non-adherent dressing comprising certain fibrous material that operated to absorb wound exudate (i.e. seepage) whilst maintaining a moist environment around the wound. Keeping a wound moist is generally agreed to aid healing, but too much moisture is a bad thing as it can lead to maceration (i.e. over-hydration) of the surrounding skin. Accordingly, at the priority date of the patent there were a number of wound dressings on the market that promoted the maintenance of a moist wound environment by gelling – absorbing the exudate and forming a gel within the dressing itself.

Smith & Nephew wished to sell a wound dressing called Durafiber. ConvaTec alleged that this would infringe their patent, and so brought an action against them. Smith & Nephew, for its part, denied infringement and counterclaimed for revocation on the ground of invalidity.

Construction
Having orientated himself by considering the technical background to the invention, the identity of the skilled addressee and their common general knowledge, the Judge then addressed the issue of construction. Distinct issues of construction arose in respect of claims 1 and 3 of the patent:
Claim 1:
A wound dressing comprising a blend of discrete modified cellulose gel forming fibres with at least one other type of discrete gel forming fibres.
Claim 3:
A wound dressing as claimed in any preceding claim wherein the dressing comprises a wound contacting surface consisting of a blend of discrete modified cellulose fibres with at least one other type of discrete gel forming fibres.
Setting out the law, the Judge adopted the tried and trusted formulation found in Kirin Amgen Inc v Hoechst Marion Roussel [2004] UKHL 46, [2005] RPC 9, and also recited the 11-point plan endorsed by the Court of Appeal in Virgin v Premium Aircraft Interiors [2009] EWCA Civ 1062, [2010] RPC 8. When addressing claim 1, he explained that there 2 issues of construction: the first was the meaning of “blend of discrete fibres” and whether this rendered it a product by process claim; and the second was the meaning of the word “type”.

Rejecting the contention that claim 1 would be understood by a skilled reader to refer back to the process by which the product was made, the Judge explained that it was a simple product claim:
[55] “…The claim is a claim to a thing – a wound dressing. The thing comprises a blend of (at least) two types of discrete fibres. In other words a mixture of discrete fibres.”

[57] “No doubt the reader would expect it to be likely that one would make such a wound dressing by mixing (blending) the two fibre populations but that processing is not what the claim is talking about. The claim is talking about a product…. The reader would understand that the invention is about using the mixture of fibres which gives beneficial properties as a wound dressing. It is not an invention focussed on manufacturing methods. How you choose to make the mixture is irrelevant.”
Moving on to the construction of “type” within claim 1, the Judge noted (at [60]) that ConvaTec had argued that “type” referred to fibres with different absorbency properties. Smith & Nephew, by contrast, contended that “type” referred to a particular polymer – i.e. to the chemistry of the fibre. In a rather radical move, the Judge considered that “both the claimants’ and the defendants’ submissions are wrong.” He explained that
[63] “The flaw in each side’s submission is to approach the matter as one of construction of the word “type”. Type is a perfectly ordinary English word which ordinarily would not be expected to bear the kind of refined analysis each side have subjected it to. The key it seems to me is to appreciate that the correct question is to construe claim 1. Claims should, if they can, be construed as a whole.”
Accordingly, by focussing on the meaning of one word within the claim, the parties had missed the way in which claim 1 was written. As this Kat has long maintained, the process of atomising phrases within the claims is capable of distorting the message conveyed by the whole. The natural tendency when faced with a deconstructed sentence is to treat the individual particles as elements of precision. One assumes that the message conveyed by the whole is simply the sum of its parts, whereas often the true story is much more complicated. Or, as in this case, much simpler: accordingly as the Judge explained –
[65] “…[C]laim 1 is actually rather simple. If all the gelling fibres in the wound dressing are modified cellulose then the claim is not satisfied. The claim requires a blend of (gel forming) modified cellulose fibres and some other type of fibres, that is to say some other fibres which are not modified cellulose. If I ask in a shop for a bowler hat and another type of hat, I do not expect to be given two bowler hats, differing only in their size or colour or whatever.”

[66] “…Asking, out of the context of claim 1, what a “type” is, is an example of meticulous over analysis of the words. Once you embark on asking the (wrong) question of what is a type, there is support in the specification for many different answers.”
Moving on to claim 3, the Judge explained that the term “modified cellulose fibres” was not a term of art and was “not a term which reader would think was meant to impose a tight limitation. The term is broad and is not intended to be limiting.” Accordingly, it was not limited to chemical modifications.

Infringement
Given the Judge’s construction of the claims, there was evidently no infringement:
[104] “The only gel forming fibres in Durafiber are made of CES, i.e. modified cellulose. In other words, as regards gel forming fibres, Durafiber uses modified cellulose alone and there is no other type of gel forming fibre present. Therefore on the true construction of the claims, Durafiber does not infringe claim 1.”
[105] “Moreover since claim 3 is dependent on claim 1, Durafiber does not infringe that claim either, irrespective of the issues of construction of claim 3.”
Validity
Moving to validity: by the end of the trial ConvaTec had accepted that claim 1 of the patent was anticipated and therefore invalid. Claim 3, stated to have independent validity, was attacked on grounds of obviousness – it being alleged to lack inventive step over three pieces of prior art (Qin, Lassen and ‘746) and the common general knowledge. Diving in to the issues, the Judge applied the Pozzoli reformulation of the classic Windsurfing test and sought to apply this to the facts. In respect of the first two pieces of prior art (Qin and Lassen), claim 3 passed muster – it was not obvious in their light. ‘746 deserves special mention.

‘746 was a PCT application published about a year before the priority date of the patent in suit. It is entitled “Wound dressings” and relates a wound dressing employing CMC (i.e. carboxymethyl cellulose – modified cellulose) fibres in the wound contacting surface. On the Judge’s construction the point did not arise, however, on ConvaTec’s proposed construction – assuming that the defendants’ product did infringe the claims – then it was alleged that the product of ‘746 would also fall within the patent’s scope of protection. As such, the patentees were evidently on the classic “horns of a dilemma”: the defendants alleging that there was nothing patentably distinct between ‘746 and their actions which were alleged to infringe. As the judge noted (at [170]) this was “a Gillette defence of the purest kind.”

Nevertheless, as construed by the Judge, the patent was safe from these challenges. It was also not obvious in light of the common general knowledge – this being a case in which one could legitimately ask “if it was obvious why was it not done before?”

Accordingly the patent was valid, in part, but not infringed.

Meltwater in hot water over business model

The Kat has a technical
 solution to the Meltwater problem
"Do you know where your web end is?" That was the question with which the IPKat introduced his analysis of  Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and other companies [2010] EWHC 3099 (Ch), in which Mrs Justice Proudman (Chancery Division, England and Wales) gave a ruling back in December of last year. If you operate a media monitoring service, she said, this being a business that provides customers with copies of headlines and extracts from articles on newspaper websites, your customers will infringe the copyright in those newspapers if they don't have a "web end-user licence" to use and receive those headlines and extracts from you.

In this action the claimants (a number of newspaper publishers and the NLA, a company that managed some of their intellectual property rights) sought a declaration that the Public Relations Consultants Association Limited -- PRCA --a professional association representing public relations providers -- and its members needed a copyright licence in order lawfully to receive and use copies of the claimants' newspaper content.   The media monitoring service consisted of the supply of reports which included the headline, opening text and an extract from articles which matched search terms selected by the customer. Whether these reports were sent by email to the PRCA or downloaded from Meltwater's website, they inevitably ended up being copied into the memory of PRCA's computer.

In these proceedings the judge was asked to rule on the following issues:
(i) is a newspaper headline capable of being a free-standing original literary work?

(ii) Does the text extract constitute a "substantial part" of the article as a literary work?

(iii) do the PRCA and its members need a web end-user licence from the NLA or its members in order to lawfully use and receive Meltwater's service?
Mrs Justice Proudman first identified the relevant principle of law, this being the test laid out by the Court of Justice of the European Union in Case C-5/08 Infopaq International A/S v Danske Dagblades Forening: no distinction should be be made between part of an article and the whole, provided that the part contained elements which were the expression of the author's intellectual creation. The Information Society Directive (2001/29), which governed the extraction of works, did not itself make reference to the need for the extraction to be of a "substantial part" of the copied work.  Rather, the Directive (as Infopaq explained) made it clear that originality -- not substantiality  -- was the test to be applied to the part extracted.  

On this basis the judge attacked the questions before them and answered them as follows:
(i) On evidence from the newspaper publishers that the creation of headlines involved considerable skill, some headlines were indeed capable of being independent literary works. However, even those that were not independent legal works still formed part of the articles to which they related.

(ii) As to whether the text extracts constituted a substantial part of the articles, what is decisive is the quality of the extracted part and the level of the author's skill and labour which the copier has appropriated, not the amount extracted. In Infopaq the Court of Justice found that copying an extract of 11 consecutive words from an article would be partial reproduction in part for the purposes of Article 2 of the InfoSoc Directive -- so long as those words had the necessary quality of originality. This does not require the court to conduct some sort of assessment of whether the extract is novel or artistically worthwhile on its own, since that would be treating the extract as if it was itself a literary work. In these proceedings, many of the text extracts did contain elements that could be said to be the expression of the intellectual creation of the author of the article as a whole, and which thus infringed.
(iii) Since customers of the media monitoring service made copies of the headline and text extract when viewing or accessing Meltwater's report, there was a prima facie copyright infringement. There were no fair dealing or other defences either, since the sole reason why the extracts were copied was to see if the news items were of any further use or not. 
Today the Court of Appeal dismissed the PRCA's appeal. In [2011] EWCA Civ 890 the Chancellor of the High Court, together with Lords Justices Jackson and Elias, took just 51 paragraphs to affirm the position taken by Proudman J.

Good news for copyright purists is that the Court says the test of what constitutes copyright-protectable subject matter has not been affected by the much-criticised ruling of the Court of Justice of the European Union in Case C-5/08 Infopaq: "intellectual creation" in that ruling referred to the origin of a work, not its novelty or merit. On this basis, Proudman J's finding that headlines were capable of being original literary works was "plainly correct". She was also correct to conclude that even an 11-word extract of a larger work was capable of being a substantial part of it.  Reproduction of a work through the involvement of a "voluntary human process" in accessing a webpage failed to satisfy the criteria of the 'temporary and transient copying' defence.  The other grounds of appeal failed too.  Proudman J's judgment was described as "clear, careful and comprehensive". However, the Court of Appeal felt that her declaration had been drawn too widely, since not every copying of every headline or 'scraping' would, on the facts, constitute a copyright infringement.

Early reaction to the decision has been predictable. Thus, in a media release issued shortly after the decision was handed down, Toby Headdon (BLP, for the copyright owners) is quoted as saying:
"Following some pretty trenchant and perhaps misguided criticism by opponents of the NLA's scheme, the Court of Appeal has set the record straight not least by dispelling the notion that the copyright exception for temporary copies made as part of a technological process provides Internet users with a carte blanche to access material on a website as they please". 
When the trial decision was made public, the IPKat commented that the ruling was an inevitable consequence of the fact that copyright infringement is broken down into so many restricted acts, each of which can constitute infringement even if they closely follow the performance of a permitted act by a licensed person -- but that is in the nature of the right itself.  While he can see that customers may feel peeved that they need a licence to have their own copy of extracts which are made under licence themselves and which they've paid for, he can also see why newspaper proprietors are desperate to turn opportunities such as this into a sort of 'last chance saloon' for coaxing a little more income out of a news provision service that is increasingly harder to finance and run profitably.  Merpel added that, within a few years, the availability of increasingly improved search engines and better techniques for harnessing them will lead many current customers of media monitoring services to do their own self-monitoring. She still thinks this is a likely development, though the availability of licences on reasonable terms may make current customers happier to stay with the status quo.

STOP PRESS: the court's ruling is now available on BAILII, here.

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