It is also hoped that the licence procedure will be simplified, with the creation of “unlimited music events bundles” for a flat annual fee and the simplification of how background music charges are assessed.

MM issued proceedings for infringement of copyright, alleging that the BBC had used his original artistic work in the “Bounce Bunch”, which he had provided to the BBC, in producing “Kerwhizz”, and that the characters were so similar that they could only have been created by the BBC by copying his own characters. MM showed that there were extensive similarities and that the BBC had prior access to his work (which had been available online even before he submitted it to the BBC), such that the Patents County Court passed the burden of proof on to the BBC to show that the characters in “Kerwhizz” did not come about through copying.

The Patents County Court ruled that there had not been any copyright infringement, on the grounds that the BBC’s evidence clearly showed that the “Kerwhizz” creations did not come about through copying the “Bounce Bunch” characters. There was no causal connection between the two. Rather, the Patents County Court found that the BBC witnesses had shown on the evidence that they had already provided the Kerwhizz characters prior to the communication from MM. In any event, “Bounce Bunch” designs were simple, generic and not particularly memorable, such that, even if a BBC designer saw the designs, subconscious copying of those designs was extremely unlikely.

Despite the exact photos being different, the judge ruled that New English Teas’ subsequent photo had infringed what he called the copyright in Temple Island’s “photographic work”. He described this as being the precise motif, the angle of shot, the light and shade, illumination and adaptation by digital manipulation after the event. It was more than being in the right place at the right time, as thought and effort had gone into creating the exact combination of features in a certain way which had made the photo look attractive. Whether it is copied in each case is a matter of fact, but in this case the judge decided that there was sufficient similarity. Although he said he struggled with the decision, he dismissed the argument that the ruling would give one person exclusivity over certain landmarks – it all came down to the way they were represented in a particular aesthetic way.

The look and feel of an App is created not just by the content, but also by the functionality and the functioning of the App in the hands of the public. 

Pop ups and words, direct connect to stream video links, cross-referencing and other mechanisms all add to the overall effect and impact of the App, which, so far as the public is concerned, is what really matters.

A recent case in which the Advocate General has given his opinion in the same vein as the English Courts will both make protection of functionality more difficult and in some ways the position easier for App designers.

Essentially the Advocate General in the case of SAS v WPL has said that the language and functionalities of a computer programmer are not eligible for copyright protection.  This follows on from previous English law cases such as Nova v Mazooma.

So how can you protect the look and feel of an App?  Clearly the content will be subject to copyright and possibly, if the design is very similar, there may be a degree of passing off.  The fact is, with functionality, if what you are doing is not patentable, there may be very little you can do to protect your wizzy idea. You can try and make sure that the person for who you design the App doesn’t get any rights to whatever it is you have done, but the App designers are still going to have to be quite careful to make sure that nothing they want to replicate in other Apps by way of functionality is accidentally handed over to a single client, as otherwise things are difficult. 

In fact this problem extends across into all kinds of spheres. The problem is that these days by contacting the right website somewhere in Asia, you can get a source code written for practically any functionality if you can identify exactly what is the functionality you want.  Very often identifying that functionality and the way in which things work must be analysed is the true value of a company.

Let’s give an example. Let us suppose that we have a company that has made a breakthrough in, say, a voiceover internet protocol using mobiles. It’s just spent 4 years and a lot of shareholders’ money developing a pass through to where it knows how everything works, has to work and works in the way in which the public wants. Some senior members of staff then rip it off by taking the analysis of functionality and asking somebody else to write a source code to replicate that. The answer in that case is not breach of the law of copyright nor infringement of patent,  but the good old fashioned law of confidence based on the employment relationships involved.

And that brings me to how App designers and producers and those dealing in discussing with them need to protect ideas. Although probably the best we can do to help you is to ensure that what you do talk about is subject to the law of confidence and the confidentiality provisions in your contacts and standard form agreements rely on the protection to the registered credentials.

In the meantime, with so many companies’ assets really held in the form of knowledge and know-how, the legal and business communities should really be looking at how existing structures or new structures can be adapted to give greater protection in the digital environment.

The High Court had initially ruled that WPL had copied one of SAS’s programming manuals. However, in respect of the other allegations, the Court was of the view that there was no copyright infringement, based on previous English court cases of easyJet v Navitaire and Nova v Mazooma. However, it decided to make a reference to the European Court of Justice for a definitive ruling on the European Union’s position on the extent of copyright protection in software programming language, programming interfaces and the functionality within the software.

The European Court of Justice’s advisor has now given his opinion. Advocate General Bot has followed the High Court’s ruling. He said that the language and functionalities of a computer program were not eligible for copyright protection. They amounted to ideas without concrete expression. Functionality was the set of possibilities offered by a computer system. It is the service that the user expects from it. For example, in a program for airline tickets, this included finding the flight, checking availability, booking a seat, registering details, paying and editing. The list of possible functionalities was finite. However, the means of achieving the concrete expression of those functionalities is eligible for protection.

We will now await several months for the decision of the European Court of Justice. The Advocate General’s opinion is not binding, but is usually followed by the court.

The Court agreed with Hodgson’s claim. Although a lot in the script was independent of Hodgson’s book, there was striking similarities, such as the football chant used at the beginning and about 50% of the dramatic events were similar. Taken as a whole, the similarities were too close to be explained in any other way, and as a matter of quality and not just quantity too much of the book had been copied, directly or indirectly. The Court ruled that there had been infringement.

• Allowing for limited private copying of copyright material, including to permit format shifting from, say, CD to mp3 player.
• Having an exception for parody and pastiche.
• Creating wider exceptions for library archives and commercial researchers (including use of computerised data mining techniques).
• Creating a regime to enable licensing of orphan works – where the copyright owner is not known.  The scheme would need to build in protections for owners.

Meanwhile, the Government has recently appointed Richard Hooper, who used to be deputy chairman at Ofcom, to consider the implementation of a new digital copyright exchange.

The Intellectual Property Office’s consultation is open until 21 March 2012 and can be found here: http://www.ipo.gov.uk/pro-policy/consult/consult-live/consult-2011-copyright.htm.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This result is interesting in light of recent court orders that the MPA has obtained against ISPs in the UK such as BT and Sky, under which the ISPs have had to block access to infringing content. The law needs to be clearer or at least applied in a more clear way across the European Union.”

1. the meaning of a “communication to the public” for the purposes of the Copyright Designs and Patents Act 1988 (the “Act”); and
2. the meaning of “reproduction in part” (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) for the purposes of the Act.

The High Court has now ruled that the first question should be amended for reference to the ECJ, as to whether the right to authorise or prohibit broadcasts extends to broadcasters of free-to-air programmes online to users who could lawfully receive those broadcasts on their televisions.

The High Court has also stated that the second question above has been answered by the ruling of the ECJ in the case of the FA Premier League v QC Leisure & Karen Murphy, which stated that copyright owners do have the “exclusive right to authorise or prohibit direct or indirect” reproduction of their content in the form of “transient fragments of the works within the memory of a satellite decoder and on a television screen, provided that those fragments contain elements which are the expression of the authors’ own intellectual creation, and the unit composed of the fragments reproduced simultaneously must be examined in order to determine whether it contains such elements”.

One of CCWY’s officers had created a similar PM Absolute list with accompanying software, and received several PM Absolutes from a security operative who used FTS’s software. That officer then posted those PM Absolutes on an Internet forum for other officers to add to the list, and also used them to develop his own list and software.

FTS issued proceedings, claiming that its list was copyright protected (as it was a table or compilation that was not a database that was its own intellectual creation) and that CCWY and the officer in question had reproduced that list and infringed the copyright. FTS also claimed that the list was protected by database rights that had also been infringed and that its confidence had been breached by the publishing of the list on the Internet forum.

The High Court ruled that:

1. there was no copyright in the list under the Copyright, Designs and Patents Act 1988 as the list had been put together by trial and error and not by the type of intellectual creation of the author that was necessary to be protected by copyright. The list was not planned and had no set design, was not the author’s own intellectual creation due to the way it was arranged and selected, and had no structure that warranted copyright protection; rather, it was simply a list of data compiled over time;
2. the list was a database that FTS had made a substantial investment in obtaining and verifying that data contained in it, which did require skill and effort; it was therefore protected by database right. CCWY and the officer had extracted and reutilised a substantial part of the database, both in terms of the number of PM Absolutes and the detail contained in each, and had breached the database right; and
3. CCWY and the officer had breached FTS’s confidential information by posting the list on the website forum.

CCWY was held to be vicariously liable for the officer’s actions.

BT’s initial response has been that it would need to be ordered by a court before taking action, in the same way that a court order was needed before Newzbin2 was blocked. Those downloading copyright content illegally may not be paying for the service they receive, but it is certainly costing the ISPs and industry bodies huge amounts in legal fees to try to prevent it.

BT estimated that the cost of implementing the court order was approximately £5,000, so it is unlikely that it would be worth the ISPs putting up a legal fight against any forthcoming court order. Indeed, the ISPs seem to have indicated that they would comply with any court order they receive. However, there is some doubt as to whether they have agreed to the width of the MPA’s requests for their consent to a court order. The move will only add fuel to the fire stoked up by critics of website blocking – the speed with which the pressure to block Newzbin2 has spread to other ISPs may also spread to other websites (such as The Pirate Bay) and lead to more argument, perhaps in court.

The announcement follows a series of measures put in place by credit card companies to prevent the use of credit cards to pay for pirated music, meaning that premium rate payment services could soon be used as a quick and easy form of payment.

The City of London Police and The International Federation of the Phonographic Industry (which represents the recording industry worldwide) will supply PhonepayPlus with on-going information updates about copyright infringing websites, which the regulator will then pass on to service providers. If the regulator then discovers evidence of payment services being used by those websites, it will report back to The City of London Police and The International Federation of the Phonographic Industry and notify the provider that the service they offer is illegal. The overarching aim of the announcement is to ensure that pirated music is not used as a way of laundering money, or otherwise generating income, which is then used to fund organised crime or terrorist activity.

The initial ruling was given in favour of the film studios (whose copyright material had been copied) under section 97A of the Copyright, Designs and Patents Act 1988 (the Act), which provides that an injunction may be granted against an Internet service provider (ISP) that has “actual knowledge” of the use of its service to infringe copyright. The case will be of interest to ISPs and rights-holders, particularly since this is believed to be the first time that an order under section 97A has been made against an ISP.

BT has been ordered to use its Cleanfeed filtering system, which is currently used to block access to websites featuring images of child abuse, to block the website. Controversially, BT was also told to pay for the cost of implementing the court order. The judge said that since BT made money out of its users, it was right that it should foot the bill as part of the cost of doing business, and in any event the costs were proportionate. It left open the possibility of whether the costs would always be paid for by the ISP but in this case it would make sense.

BT and the film studios agreed that as software had been developed and was likely to be circulated by copyright infringers that could circumvent BT’s Cleanfeed system, BT’s blocking measures may have limited effect. However, the High Court judge said that the court order would still be justified if it meant that access to Newzbin 2 was prevented for only a minority of users.

This is the first time an order has been granted against an ISP under section 97A of the Act, but it is also interesting to note that the judge stated that he thought it unlikely that, following the implementation of the block, a BT user would be able to bring a claim against BT for breach of their Internet service contract with the ISP. However, that might be little consolation for BT, which merely thanked the High Court for providing ‘clarity’ on the issue.

No doubt, BT would have felt a bit aggrieved that the Court had refused to accept its argument that the order should be set aside or varied if the film studios did not apply within a reasonable time for the same injunction against other UK ISPs. The Court said that there was nothing in the law that made the injunction conditional on this action being taken. It was for the studios to decide on which remedies they would pursue and against whom.

BT would also no doubt have been unhappy at the refusal of the judge to give it permission to shut down Cleanfeed temporarily if it needed to. The judge said that it would only do that if the studios consented or BT obtained a court order.

So, all in all, a great result for the creative industries, but not a particularly good day in court for innocent ISPs.

The ISPs have now been granted permission to appeal by the Court of Appeal. It seemed that the Digital Economy Act was safe following the Court of Appeal’s initial decision to refuse permission to appeal, but this long-running saga now seems to have some more time left to run.

The ECJ has ruled that:

-       national legislation that restricts the sale or use of foreign decoder cards is in breach of Article 56 of the Treaty on the Functioning of the European Union (“Treaty”) and it infringes the freedom to provide services; and

-       exclusive licence agreements that restrict the supply of decoder cards to TV viewers who want to watch those broadcasts outside of the Member State for which the licence is granted are in breach of Article 101 of the Treaty, which prohibits agreements that have as their object or effect the distortion of trade between Member States.

The ECJ ruled that a breach of Article 56 cannot be justified either by the intention to protect the intellectual property rights in the broadcasts or in an attempt to encourage more people to actually attend the football matches being broadcast.

The ECH also considered Article 3(1) of the Copyright Directive, which allows copyright owners to restrict any “communication to the public” of their works. The ECJ ruled that the transmission in a pub of broadcasts containing copyright protected works – in this case the opening video sequence of Premier League matches that contains the Premier League anthem – is a “communication to the public” under the Copyright Directive, and the consent of the copyright owner is required for such a communication.

The ECJ’s ruling is largely in line with the opinion of Juliane Kokott, one of the eight Advocates General to the ECJ whose opinions, whilst not binding, are usually followed in the ECJ’s ruling. It remains to be seen how the High Court applies the ECJ’s ruling to the facts of the case of Karen Murphy and other similar cases before it. It would seem that pubs cannot be prevented from obtaining foreign decoders to show Premier League matches shown by foreign broadcasters.

However, the part of the ruling relating to the Premier League’s anthem and opening video sequence may take the edge off the ruling for rights holders. It would seem that, if the Premier League can continue to include certain copyrighted content in the broadcasts, such as its anthem and opening sequence, commercial institutions such as pubs will not be able to show broadcasts from foreign broadcasters without the consent of the Premier League. However, this seems unlikely to impact on an individual’s rights under the ruling, who may be able to show such copyrighted material in their own homes as it would not then be a “communication to the public”.

Others have argued that the Premier League will find it hard to protect this copyright and enforce its rights against commercial venues if the High court agrees with this interpretation. Still, we may yet see increased amounts of copyrighted content in each Premier League broadcast which would further prevent commercial venues showing the broadcasts, and attempts by commercial venues to split the copyrighted content from the match itself, which the ECJ confirmed is not the copyright of the Premier League as it cannot be considered the Premier League’s own “intellectual creation”.

The ECJ’s ruling seems to have implications on how the Premier League, and possibly other rights holders in relation to films and music, sell their rights within the European Union. The ruling may result in a single EU-wide market for rights as the Premier League tries to mitigate the effect of the ruling; this would avoid the domestic price being undercut from overseas. This may impact on domestic broadcasters, such as Sky, who would then need to buy the rights on an EU-wide basis rather than domestically. But at least it would protect the value of their investment.

The draft ACTA document that had been published by the European Commission can be found here: http://trade.ec.europa.eu/doclib/docs/2011/may/tradoc_147937.pdf.

It is commonly accepted in the entertainment industry that the formats for television programmes can be licensed for lots of money, although the exact legal status has never been finally determined. The format for Strictly Come Dancing has been licensed to 35 countries and has been described as the most successful reality television format.

The UK has supported the increase in protection, despite saying in the Gowers Review and Hargreaves Report that the case for the extension had not been made out.  The increase will benefit musicians from the late 1950s and 1960s such as Sir Cliff Richard, who have lobbied for the increase for several years.

The Directive must be brought into law within two years.  More information is available in the European Commission’s statement on this issue here: http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/11/595&format=HTML&aged=0&language=EN&guiLanguage=en.

The PCC ruled that there had been an infringement under the Copyright and Rights in Databases Regulations 1997 for the following reasons:

-          there had been a substantial extraction of records from the database by loading the records onto computers in preparation for the mass-mailing, which amounted to infringement; and

-          the mass-mailing was an infringement as each letter with the name and address printed on it amounted to an insubstantial extraction in a systematic and repeated way.

This ruling is useful in that there are relatively few cases relating to infringement of database rights, and this offers significant guidance in the interpretation of the Copyright and Rights in Databases Regulations.

The Government commissioned Ofcom to produce a report on how effectively the website-blocking provisions of the DEA could be enforced. The report considered:

-          the technical means available of blocking websites, which it concluded could not be 100% effective and could be widely avoided; and

-          how effective the DEA could be when compared to section 97A of the Copyright Designs and Patents Act 1988 (CDPA), under which an ISP’s actual knowledge of copyright infringement using its network could be grounds for the granting of an injunction by the courts. The report concluded that the DEA method would be slow, expensive and uncertain when compared to the CDPA route.

The Ofcom report concludes that any DEA system would be ineffective, and that website blocking should be only one of a number of alternatives to reducing copyright infringement online. The Government’s announcement follows a recent case considered by the High Court in which BT was ordered to block a copyright infringing website known as Newzbin 2 under the provisions of section 97A of the CDPA. Following the ruling, some questioned whether the relevant sections of the DEA are actually necessary – the courts seem capable of dealing with the issue of blocking on a case-by-case basis under the CDPA.

Whilst the section 97A method can also be long and expensive, the Newzbin ruling shows that the method is a realistic option. When compared with the DEA, its requirements are also much easier to understand and invoke – the CDPA requires the demonstration of actual knowledge on the part of an ISP that its network is being used for copyright infringing activities. The DEA, on the other hand, has a number of requirements, including having evidence of the amount and type of material available, as well as the need to show that, before a website can be blocked, the operator of the website as well as the ISP has been warned of the possible consequences of the infringing activity.

The recommendations of the Hargreaves Report that have been accepted are:

-          to create a digital market place where copyright licences can be traded (a “Digital Copyright Exchange”);

-          to allow an exception from copyright infringement for limited private copying, such as copying from a legally purchased CD onto a computer or portable device;

-          to allow an exception from copyright infringement for parodies of other people’s work without first having to obtain the owner’s consent;

-          to allow an exception from copyright infringement for search and analysis techniques known as ‘text and data mining’, which is currently illegal despite its benefits to medical and other science and for which advanced technology exists;

-          to establish licensing and clearance procedures for orphan works (copyright works for which the owner is not known); and

-          to review the role of the Intellectual Property Office.

At the same time, the Government has announced:

-          a new enforcement programme to protect intellectual property rights, which will be further investigated before any specific legislative measures are taken;

-          a notification system to inform Internet users of copyright issues and how to avoid illegal and pirated content; and

-          a five year international strategy to improve the efficiency and effectiveness of the international intellectual property system.

The Government has accepted the Hargreaves Report almost in its entirety, which is a refreshing response for an industry that for so long seems to have been desperate for reform. The reforms to copyright are intended to ensure that the law reflects reality, and for a consumer wanting to move music they have legally bought in the form of a CD onto their iPod, this is a huge step. However, it is the package as a whole which impresses – a Digital Copyright Exchange, a licensing system for orphan works, and reviews of enforcement and international strategies – whilst giving the Government a lot to be getting on with, suggests that intellectual property law in the UK is getting the facelift that many have been demanding for a long time.

ITV Broadcasting, together with Channel 4 Television and other broadcasters, issued proceedings against TVC for infringement of copyright. The case came to trial with the broadcasters arguing that the copyright in the broadcasts and films was infringed by (i) TVC communicating them to the public, and (ii) TVC making transient copies of the broadcasts and films in its own servers and on the screens of its users.

TVC based its defence on the following arguments:

(a)                 section 20 (1)(c) of the Copyright Designs and Patents Act 1988 (CDPA) states that communicating a copyright work to the public by broadcast constitutes infringement of copyright, but this section went beyond the powers of the Secretary of State granted to it under section 2(2) of the European Communities Act 1972 (which grants powers for the implementation of European law in the UK) and the scope of the Copyright Directive, making section 20 (1)(c) “ultra vires” and therefore invalid;

(b)                 even if section 20 (1)(c) was validly enacted, TVC was not communicating the broadcasts and films within the meaning of that section and thus not infringing copyright;

(c)                 any copies of the broadcasts and films made on TVC’s servers were not copies of substantial parts, and therefore copyright was not infringed;

(d)                 TVC had a defence under section 28A of the CDPA in that it was making temporary incidental copies as an integral part of a technological process to allow it to transmit the work between third parties, and that, in doing so, the transmission had no independent economic significance to TVC; and

(e)                 TVC had a defence under section 73 of the CDPA in that it was streaming regional channels only in the area for which those channels were made for reception and the re-transmission was re-transmitted through the Internet by cable from its servers.

The Ruling

The High Court ruled as follows:

(a)                 section 20 (1)(c) of the CDPA was not “ultra vires” – the powers of the Secretary of State under section 2(2) of the European Communities Act 1972 were not to be interpreted narrowly and allowed for legislation to be enacted by the UK Government which was not specifically required for the implementation of an EU Directive such as the Copyright Directive. Rather, section 20 (1)(c) was closely related to the Copyright Directive’s subject matter and was thus validly enacted;

(b)                 TVC was, in the view of the High Court, communicating films and broadcasts to the public, but this issue was referred to the European Court of Justice (ECJ) for a preliminary ruling. This was because case law reviewed by the High Court did not deal with the specific issue considered in this case – whether or not there was a communication to the public when an intermediary entity, acting for its own profit, intervened in full knowledge of the consequence of its actions and in order to expand its own audience to its transmissions and adverts, and communicated broadcast signals to the public who could access that signal using their own television or computer at home;

(c)                 TVC was not, in the view of the High Court, reproducing a substantial part of the films or broadcasts in its servers or on a user’s screen, but this issue was also referred to the ECJ. This was because the meaning of ‘reproduction in part’ (whether individual frames amounted to a substantial part of the copyright work and whether the display of a broadcast on screen amounted to reproduction) had already been referred to the ECJ in another case – Football Association Premier League v QC Leisure – and the ECJ’s decision in that case was outstanding;

(d)                 TVC did not need the protection of section 28A of the CDPA if the High Court’s view in (iii) above was correct, as no defence would be needed if there was no reproduction of broadcasts; however, the High Court noted that this issue depended on the ECJ’s decision in the Football Association Premier League v QC Leisure case; and

(e)                 the High Court ruled that the defence under section 73 of the CDPA did apply to the channels streamed by TVC but only where (a) there was actually a cable involved in the re-transmission at the user’s end i.e. the streaming to a computer was covered by the defence, but not streaming to a mobile phone, and (b) the re-transmission was within the intended regional area for service of that channel.

Comment

Copyright seems to be a major issue in the courts at the moment, and the decision of the ECJ in relation to those issues referred, both in this case and the Football Association Premier League v QC Leisure case will have a huge impact on the streaming of broadcasts on the Internet. The High Court’s view seemed to be that the streaming for commercial purposes was an infringement of broadcast copyright, but it remains to be seen whether the ECJ’s decision differs fro the High Court’s initial view.

Andrew Ainsworth (AA) was hired in 1976 by Lucasfilm (L) to make ‘Stormtrooper’ helmets and armour for the film ‘Star Wars’ which was released in 1977 (later renamed ‘Star Wars: A New Hope’). In 2004, AA set up a website and sold helmets and armour produced using the same mould as had been used in 1976, some of which were sold and delivered to customers in the USA. L issued proceedings against AA in California for infringement of copyright and trade marks, and the US District Court in California ruled against AA to the tune of $10 million. However, since AA had no assets in the USA against which the judgement could be enforced and since the UK usually does not enforce US court judgements, the US proceedings were not taken any further.

Instead, proceedings were issued in England. AA admitted that he had used drawings provided to him in 1976 by L, and that he had used those drawings in producing the helmet and armour. Although AA admitted that L had had unregistered design rights in the helmets and armour which would have prohibited him from manufacturing identical objects (and such rights are totally different to copyright), he contended that these were the only rights L had had which AA could have otherwise infringed (as these unregistered design rights only last for 10-15 years from their creation and so had expired at the time he started recreating the helmets and armour). However, he said that to the extent the drawings and objects attracted protection under the Copyright, Designs and Patents Act 1988 (CDPA), they were not artistic works (and it should be noted that a sculpture is an Artistic work so he was arguing the objects were not sculptures, which would attract protection). He also argued that he was not infringing CDPA by making helmets and armour to the designs because, if for some reason the judges were to find that the original objects were sculptures (contrary to what he was arguing) then he was entitled to a defence under sections 51 and 52 of the CDPA which permits manufacture of an article to a design, without infringing copyright.

In the initial ruling, the High Court ruled that the defence under sections 51 and 52 of the CDPA did apply. Accordingly, there was no copyright infringement. The High Court also ruled that, whilst the US judgment could not be enforced in the English courts, the US copyright had been infringed and the claim was justicable in the English courts.

The Court of Appeal upheld the ruling of the High Court by saying that the helmet and armour were not artistic works under the CDPA. However, the Court of Appeal rejected the High Court’s reasoning in relation to the justicability of a claim in the English courts – a claim for infringement of US copyright should not be justicable in the English courts. As a result, L appealed to the Supreme Court on two issues:

1)       whether the helmets and amour were sculptures (which would attract copyright protection) and then whether the defences under sections 51 and 52 of the CDPA applied; and

2)       whether the English courts could consider a claim against a person domiciled in England for copyright infringement alleged to have happened, and was subject to a law, outside the EU.

Supreme Court Ruling

1) Copyright

The law relevant to the copyright infringement claim, as referred to above, is provided by the CDPA. Under section 1 of the CDPA, copyright exists in original artistic works. Under section 4 of the CDPA, artistic works can include graphic works or sculptures, which are defined as a cast or model made for the purposes of sculpture. Section 16 of the CDPA defines copyright infringement as being a person who copies all or part of a work, whether directly or indirectly, without the copyright owner’s permission.

The Supreme Court ruled that the helmet was not a sculpture. Rather, it was considered to be ‘a mixture of costume and prop’ for the effect of the film it was used in. The film itself was the work of art, rather than the helmet, which merely contributed to the success of the film. The Supreme Court referred to the helmet as ‘utilitarian’ in that it was merely an element of the production process of the film. Therefore the rulings of both the High Court and the Court of Appeal were upheld.

As such, the Supreme Court did not need to consider sections 51 and 52 of the CDPA and whether AA could rely on them as defences to the copyright infringement – the helmet was not an artistic work that was subject to copyright in the first place, and as such AA had not infringed any copyright under the CDPA for which he required a defence.

2) Justicability in England

The relevant law considered by the Supreme Court, in order to decide whether alleged copyright infringement abroad under the provisions of a foreign law was justicable in the English courts, was somewhat more complicated, in that the Supreme Court had to consider both the Brussels Regulation, an EU regulation on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, and case law.

Under article 22(4) of the Brussels Regulation 2000, an exception is provided to the general rule that a defendant should be sued in the court where the defendant is domiciled. That exception is that, where proceedings relate to the registration or infringement of intellectual property rights, exclusive jurisdiction is given to the member state in which registration has taken place, been applied for or should have taken place. This exception takes effect irrespective of the domicile of the defendant.

The case law considered by the Supreme Court was extensive, and below is a brief summary only of the issues from the cases considered:

-          the Moçambique rule, resulting from a case in 1893, relates to the trespass of property, and states that the English courts will not exercise jurisdiction in relation to matters which were ‘local’ in their nature, compared to proceedings which were ‘transitory or personal’. Therefore the English courts would not accept jurisdiction on a claim over property outside of English territory unless it could be proved that the matter was a ‘transitory or personal’ rather than a ‘local’ issue;

-          the rule in Philips v Eyre 1870, which states that an act done abroad can only be the subject of proceedings in England if the act, if done in England, would have been a tort;

-          Tyburn Productions v Conan Doyle 1991, in which an infringement of US copyright was struck out by applying the Moçambique rule and the rule in Philips v Eyre;

-          Coin Controls v Suzo International 1999, which applied the Moçambique rule and the rule in Philips v Eyre as well as article 22 of the Brussels Regulation; and

-          Red Sea Insurance v Bouygues 1995, a Privy Council ruling which was applied by the Court of Appeal in Pearce v Ove 2000 in relation to hearing a claim for infringement of Dutch copyright, which stated that the rule in Philips v Eyre should be displaced if a country had a specific relationship to a particular act and the parties.

The Supreme Court ruled that the claim for infringement of US copyright was a claim over which the English courts could accept jurisdiction if there was a basis for that jurisdiction in relation to the defendant. The Supreme Court ruled that the Moçambique rule and the rule in Philips v Eyre were no longer relevant, having been pushed to the side by Red Sea Insurance v Bouygues 1995 and actually being abolished by the Private International Law (Miscellaneous Provisions) Act 1995. As such, there was nothing to prevent the English courts accepting jurisdiction over infringement of intellectual property rights abroad – L’s claim against AA for copyright infringement in the USA under US law could be heard in the English courts.

The Supreme Court also considered intellectual property policies relating to this issue, and referred to the fact that article 22(4) of the Brussels Regulation, which assigned exclusive jurisdiction to courts of the country where intellectual property rights originated (which would have prevented the English courts from accepting jurisdiction in this case) would apply to copyright only in rare cases. The Supreme Court made clear that article 22(4) does not apply to intellectual property outside the EU, but emphasised that it shows that there is a distinction between claims which involve registration or validity of intellectual property rights and those which do not, reiterating that this claim was for copyright infringement and not validity or registration issues.

The Supreme Court also considered Rome (II), the EU regulation on non-contractual obligations, which, whilst not applicable in this case as it came into force in 2009, shows that European policy is not against the litigation of foreign intellectual property rights. Rather, the Supreme Court stated that Rome (II) “… plainly envisages that actions may be brought in [EU members states] for infringement of foreign intellectual property rights, including copyright”.

As such, The Supreme Court ruled that the decision in Tyburn Productions v Conan Doyle was mistaken, and that the English courts could accept jurisdiction for the claim by L for breach of copyright by AA in the USA.

Comment

The importance of this ruling should not be underestimated. Many view this as a victory for Mr Ainsworth because he cannot be sued for his sales in the UK (because the original helmets and armour are not sculptures) and because he will not be sued in the UK for his sales in the US – even though he now could be sued (and the only reason Lucasfilm will not sue him is because his sales in the US were so low, he’s not worth suing)! But that is the narrow view of this case.

The wider significant issue ruled on by the Supreme Court is jurisdiction, and this is what affects everyone else in the future. The fact that a claim for foreign copyright infringement against a person domiciled in England falls within the jurisdiction of the English courts has wide-ranging implications.

The Court of Appeal has upheld the ruling of the High Court, such that end-users of the Meltwater service require a specific web end-user licence from the NLA. The Court of Appeal also agreed that headlines themselves are capable of constituting a copyright work.

The fact that the Court of Appeal agreed with the High Court’s ruling that headlines can be protected by copyright seems to go against previous decisions taken by courts in the UK. Reiterating the ruling of the European Court of Justice in Infopaq v Danske – that extracts of stories as short as 11 words could constitute a copyright work – the Court of Appeal stated that a newspaper headline being a copyright work is ‘plainly correct’. However, the full background reasoning for this element of the ruling was not disclosed by the Court of Appeal, meaning that, if Meltwater appeals to the Supreme Court, this issue is likely to be at the forefront of its argument.

This ruling is also of importance for businesses that use media monitoring services such as that provided by Meltwater. Many businesses use media monitoring services to keep up-to-date with news relating to a specific client and/or industry developments. Such businesses, as end-users of such a service, must also obtain a licence to receive that service. Whilst it is unlikely the NLA will enforce this ruling until it is clear both whether Meltwater will appeal the decision and what the outcome of that appeal is, if it takes place, there is a risk that the NLA will attempt to enforce the recovery of licence fees retrospectively as well as prospectively. Businesses who use such services should prepare, if they do not do so already, to pay licence fees to use the service, and even to pay licence fees for previous use. Whilst there is a widespread belief that newspaper content online should be available for nothing when used for non-commercial purposes, the ruling of the Court of Appeal in relation to media monitoring services, together with increasing tendencies by newspapers to charge non-commercial users to access content directly, further erodes how justified that belief is.

The consultation can be accessed here: http://ec.europa.eu/internal_market/consultations/docs/2011/audiovisual/green_paper_COM2011_427_en.pdf.

Newzbin has now threatened to break BT’s Cleanfeed filtering system if BT attempts to block the site. BT has hit back and said that it would be appalled if that happened as Cleanfeed helped protect innocent from highly offensive and illegal content such as child pornography.

FP issued proceedings for alleged breach of contract, infringement of copyright and passing off, claiming that the defendants had breached the trading agreement by adopting a logo that was a replica of the ‘Edge’ title logo used on the cover of the gaming magazine. The defendants were also accused of making statements that FP and the defendants were associated.

The High Court has ruled that the use of the obvious replica logo by the defendants had fundamentally breached the agreement, which allowed FP to terminate. In addition, their actions were considered by the High Court to be passing off (as FP had goodwill, there had been a misrepresentation and customers would be confused), as well as copyright in the logo having been infringed.  Furthermore, despite the fact that there had been passing off due to statements being made on the defendants’ website, their trade mark was also held to be revoked for non-use as the US-based defendants did not conduct any genuine business in the UK – despite having infringing statements on their website that were directed at UK customers.

Creative Commons covers roughly 500 million pieces of copyrighted material, and copyright owners can choose from a variety of free legal licences for their content that protect them in situations ranging from sharing material with anyone for any use to protecting their material from being manipulated or used commercially. The intention is to allow copyright owners to mix and match licences to suit their own aims – owners can choose whether they need to be named in any use of the material, whether the material can be shared once it has been used, and whether the material can be used commercially.

Whilst Creative Commons has been criticised for a possible lack of clarity in its terms, others have said it is a useful stop-gap measure only if the copyright laws in the UK are reformed – some have argued for the creation of a ‘fair use’ defence for use of copyrighted material, which is used in the US, but the recent Hargreaves Report on reform of intellectual property law in the UK rejected the argument for the creation of a ‘fair use’ defence.

In this case, a Dutch rights organisation sought the payment of a copyright levy from the German supplier, Opus, for sales of blank CDs by Opus to Dutch consumers. The Dutch courts had initially said that no levy should be payable by the German company. On appeal, though, the ECJ has said that a levy should be paid in order to compensate the harm done to rights holders by private copying. However, unhelpfully, the ECJ did not explain how the levy could be enforced. Assuming it would be enforced, though, this could affect UK suppliers too and take some money out of their profit margins, despite the fact that the UK does not have a private copying exemption.

Details of the case can be found here: http://curia.europa.eu/jurisp/cgi-bin/gettext.pl?lang=en&num=79889383C19090462&doc=T&ouvert=T&seance=ARRET&where.

This pseudo-tax known as the, Art Resale Levy, (or droit de suite in French) means that sellers will have to pay royalties on works by European artists who have died in the past 70 years, including Pablo Picasso, Henri Matisse and Francis Bacon. Cash is payable to the artist’s heirs each time a work is resold.

The tax already exists in mainland Europe and is due in Britain from January, applying to all works priced above (EURO)1,000 (£900) and on a sliding scale of 0.25 per cent to 4 per cent. 

There will be intellectual property implications of this, if the directive is brought into force in UK.

On the other hand, so the argument goes, why shouldn’t the family reap some of the benefits (in particular when success is mostly posthumous)?

For a more detailed review of the tax’s history and the UK’s derogation until 2012, I suggest an article in the FT, which can be found here (although please note that the FT is subscription only), and for the view of the art lobbyists (LAPADA), click here: LAPADA, and follow the links at the bottom of the page.

There will be scope for planning to avoid this levy if the UK is not be able to extend the derogation beyond 2012, and if you are interested in discussing this with a solicitor, please call 01923 20 20 20 and ask for the Wealth Management Department.

The MPA said BT was being targeted as it is the largest ISP in the UK. It may also be because BT uses the website-blocking software Cleanfeed to stop access to child sex abuse images, so it clearly has filtering technology available. The MPA hopes the injunction will force BT to block access to Newzbin in the same way it blocks access to websites hosting child porn , and this should then have a knock-on effect on other ISPs and website blocking.

This is a really interesting development and tactic by the entertainment industry in its long-standing cat-and-mouse battle against online copyright infringers. The MPA took action against Newzbin in 2010 in the UK, where Newzbin had been based, and the High Court ordered that Newzbin removed copyright-infringing material from the website. However, the company behind the website folder and a new version of the website set up by a phoenix company has since appeared operated out of the Seychelles. Due to the difficulties in taking action against that site there, the MPA is trying this new tactic. It will be interesting to see the outcome.

This case comes against the backdrop of the Digital Economy Act, which, when its provisions are fully implemented, would require ISPs to pass details of users who infringe copyright material to copyright holders so that they can take action against the infringers. ISPs would also have to suspend Internet access of the infringers.

The BSA recently received an anonymous tip-off that a York-based company was using unlicensed software and, after reaching an agreement with the company, handed them a £29,000 bill to cover licences and costs. The BSA has previously targeted Birmingham and now plans to audit 1,500 companies in Yorkshire. The BSA estimates that it received fines and fees of £2.2 million in the UK in 2010.

The plot sounds a bit boring. There’s no bad guy in this one. Doesn’t everyone win?

• Continued push for a single European Union patent system.
• Modernisation of the European Community Trade Mark system. This would include speeding up the registration procedure and increasing certainty over what constitutes a registrable trade mark.
• Creating a comprehensive framework for copyright in the digital single market. That would include multi-territorial collective management of copyright so that there would be online copyright licensing. There would also be a consultation on user-generated content to see if there should be more freedom for amateur producers of non-commercial film to be exempt when incorporating other copyright works. In addition, the Commission said it would propose a Directive on permitted uses of orphan works, and it actually proposed the Directive this at the same time as the strategy document.
• Replacement of the Customs Regulation to strengthen enforcement of intellectual property rights. As with the orphan works proposal, this was also introduced at the same time as the publication of the strategy.

For more on the strategy, click here: http://ec.europa.eu/commission_2010-2014/barnier/headlines/news/2011/05/20110524_en.htm.

• Creation of a Digital Copyright Exchange. This would be a centralised digital copyright works marketplace where licences to copyright content could be readily bought and sold, akin to a copyright shop. This would extend what currently happens with through music collections agencies such as PRS. The aim is to have this implemented by the end of 2012. In addition, the UK should support the European Commission’s proposals to establish a framework for cross-border licensing.
• Introduction of legislation to permit use of orphan works – copyright works where the rights owner has not been ascertained. The European Commission has also come up with similar plans recently.
• Allowing wider exceptions for lawful copying, such as to include format shifting between a laptop and mp3 player, which is still unlawful. This may also include copyright exceptions for non-commercial research, such as digital copying of medical journals for computerised analysis in research. Parody and library archiving would also be exceptions to copyright. The exceptions would be enshrined in law and non-excludable by contracting out by agreement between the parties. There is no place in the report for anything as extensive as the “fair use” exception along the lines that US law has, as that would not be compatible with European Union law.
• Increasing the Intellectual Property Office’s ability to give legally binding opinions on changes to intellectual property law in response to economic or technological changes.
• A careful look at the enforcement of intellectual property rights. The Government should look not just to enforcement but also education, growing legitimate markets and modernising copyright law. Other countries’ experiences should be considered when the Digital Economy Act starts to become operational in 2012.
• Try to remove patent thickets that stifle innovation. Thickets arise where there are overlapping patent claims by multiple applicants, resulting in delays and extra costs in innovation. This should involve cutting backlogs in patent applications. There should also be a disincentive – perhaps through cost of additional fees for patent renewals – to discourage patents that do not add much value. Computer-related patent rules also need to be clearer and stricter to avoid patents being granted for non-technical inventions or business methods.
• Investigate whether the system of protection for designs should be made clearer. The Intellectual Property Office should conduct an assessment based on evidence within the next 12 months to consider the relationship between design rights and innovation.

It now remains to be seen what the Government will do in terms of implementation of the recommendations within the report. There have been other intellectual property reviews previously – most notably the Gowers Review – which were not then followed-up significantly.

The Commission’s approach is that libraries, museums, educational establishments, archives, film heritage institutions and public service broadcasters should be able to provide orphan works without having to obtain the copyright owner’s consent, provided that those institutions have first carried out a diligent search to find the copyright owner. Once the orphan status has been established by a relevant institution in one Member State, that status will apply in other Member States. The Commission said that the EU needed to catch up with the US in treatment of orphan works, and this would help create new digital libraries. The new law would help researchers and academics benefit from wider works. The Commission said the proposed Directive formed a key element of its Digital Agenda plans, and expected the new Directive to be adopted in 2012 with the new Directive coming into force in each Member State in around 2014.

The proposed Directive can be found here: http://ec.europa.eu/internal_market/copyright/orphan_works_en.htm.

The Act has been controversial ever since it was passed in early 2010, when it was rushed through Parliament so that it would become law before the General Election. BT and TalkTalk initially took action as they believed the Act did not comply with European Union Directives on e-commerce and privacy, and that it lacked proportionality. They have argued that the law would require them to restrict or suspend a customer’s Internet access even if someone else from outside that customer’s household, for whom the customer was not responsible, was using that customer’s Internet connection for file-sharing.

The UK currently has the events on a ‘protected list’ under the Broadcasting Act 1996, an enactment of a European Union (EU) Directive, which allows EU Member States to designate certain cultural and sporting event for free-to-air television as being in the national interest. FIFA and UEFA have argued that, as a result, they cannot sell their respective events fairly, that it distorts competition and infringes their intellectual property rights. In February, the European General Court rejected the football governing bodies’ challenge, but they have now decided to take their challenge to the ECJ in a final attempt to get their way, although the appeal may take more than a year to even be heard by the ECJ. A similar appeal has been launched by FIFA against Belgium showing the World Cup on free-to-air television.

Whatever the outcome of the appeal, matches at the events involving England, Scotland, Wales or Northern Ireland (the ‘Home Nations’) will remain free-to-air. The appeal relates to matches shown in the UK not involving the Home Nations. UEFA and FIFA argue that these matches should not be shown on free-to-air television, but in their appeal they can only make arguments on points of law – for example, an argument that the European General Court breached procedure or law in their initial ruling, or that the European General Court lacked sufficient competence in making their initial ruling.

The rights for the European Championships in 2012 and World Cup in 2014 have already been sold. However, the rights for the European Championships in 2016 and World Cup 2018 will be sold by UEFA after the Football Association (FA), the governing body for English Football, agreed to let UEFA sell the rights collectively for both events, and the outcome of the appeal will directly affect UEFA’s intentions.

You get the impression that they are not just playing for pride, but this particular fixture will have big financial ramifications in an industry where money has become ever more important.