In a reminder of the dangers of an aggressive marketing campaigns aimed at the trade marks of competitors, the Court of Appeal has allowed part of Specsavers’ appeal against the High Court ruling. The Court of Appeal has ruled that:

-          Asda’s cross-appeal over the use of the strapline “be a real spec saver at Asda” should be rejected because it took unfair advantage (under Article 9(1)(c) of the Community Trade Marks Regulation) without due cause of the distinctive character and use of Specsavers’ registered Community Trade Marks (CTMs).

-          Specsavers’ appeal that the strapline “spec saving at Asda” infringed its CTM should be upheld, also on the basis that it took unfair advantage under Article 9(1)(c).

-          Specsavers’ appeal under Article 9(1)(b) that the straplines and bespectacled logo used by Asda infringed its word and logo marks should be dismissed. For the appeal under Article 9(1)(b) to have succeeded, Specsavers would have had to show that the average consumer would have been likely to have been confused. Here, the overall marks gave a different impression to the average consumer. There was a difference between what the judge described as “living dangerously” and one who intended to confuse customers. This was more of a case here of unfairly taking advantage of the reputation of the brand owner’s mark (for which Specsavers succeeded under Article 9(1)(c)) rather than customers being confused.

-          A further query about a wordless logo mark should be referred to the European Court of Justice for clarification.

This ruling should come as a relief to brand-owners, who argued that the High Court interpreted the definition of “unfair advantage” too restrictively in delivering its initial ruling. The ruling of the Court of Appeal emphasised the importance of the market position held by Specsavers due to its brand and the fact that Asda had intended to target that market position in its advertising campaign. A winning result for the brand, although not everything is seen totally clearly yet until we get the ruling back from the European Court of Justice.

The Court of Appeal has rejected an appeal against the decision of the High Court, on the grounds that the High Court’s findings were not based on any error of principle or perversity in factual findings, leaving no scope for a fresh evaluation by the Court of Appeal.

However, the Court of Appeal allowed a cross-appeal against the finding that the UK trade mark for the number 32 had not been infringed. The Court of Appeal ruled that the High Court had incorrectly assumed that, where a separate reputation had not been established by use of the trade mark, there could be no infringement under section 10(2) of the Trade Marks Act 1994; rather, the number 32 was a significant part of the trade marks that the High Court had ruled had been infringed, such that there was no basis for saying that the trade mark for the number 32 had not been infringed as well.

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.

The Court of Appeal reversed the decision of the PCC on the grounds that the PCC had made two errors in light of the prior art:

1. The PCC had failed to identify the correct differences between the prior art and the claims made.
2. The PCC had failed to address whether the differences between the prior art and the claims made amounted to steps that would have been obvious to a person skilled in the art without any knowledge of the alleged invention, or whether those steps required a degree of invention.

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.

Paul Gershlick, a Partner and Head of Pharmaceuticals and Life Sciences at Matthew Arnold & Baldwin LLP, comments: “According to evidence from the BioIndustry Association, the UK share of clinical trials has fallen from 6% to 2% in the last decade. The UK also went from the fourth largest location for clinical trials in 2006 to twelfth just two years later. The UK has a long history of being a global leader in developing new pharmaceutical products. A lot of jobs and expertise have been based here as a result. Anything the Government can do to make drug discovery conditions better so as to reverse the declining trend and make the UK a more enticing place to discover new drugs has to be a good thing.”

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.

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.”

India and China both have an established and successful generics based pharmaceutical industry and as tens of billions of pounds of  patent protected drugs come off patent soon (known as the “patent cliff”), they look set to benefit by releasing cheaper generic  alternatives – making themselves a small fortune in the process. Both the Wall Street Journal and BBC News have reported on the most recent victim of the patent cliff in which India-based firm Ranbaxy Laboratories Limited confirmed the release of an FDA-approved generic version of the 10 billion dollar a year drug “Lipitor” owned by the global pharmaceutical company, Pfizer. The new generic drug will be called “Atorvastatin” and with Lipitor’s patent having now expired, there is nothing Pfizer can do about it – except try to develop itself or buy in the next big thing from another research and developer.

With such a Robin Hood approach to pharmaceuticals there are mixed opinions about the impact the patent cliff is having on the pharmaceutical industry as a whole. The large pharmaceutical companies claim that the patent cliff is affecting their ability to raise funds for research and development which in turn is inhibiting advances in new and improved pharmaceuticals, to the detriment of patients. The smaller generic based companies and some consumer groups however are hailing the patent cliff as an opportunity to offer a wider-ranging and affordable selection of medicines to both the public and private sectors.

Laura Mole, from Matthew Arnold and Baldwin LLP’s Pharmaceutical and Life Sciences Sector Group Team, says, “Whilst I appreciate continued research and development in the pharmaceutical industry as a whole is vital for the production of new, more advanced drugs to combat human illness, I cannot help but see good quality, affordable alternative medicines as a good thing for the consumer and the NHS in these difficult financial times. More drugs will cost less so more patients will benefit. The important thing in the long-term, though, is that there is sufficient funding in the industry to incentivise continued research and development so that patients continue to benefit with further medical advances. More of the early-stage development is being done by start-up companies, with big pharma companies stepping in if the prospects look good.”

The Intellectual Property Office announced that the small-claims track will limit fixed costs and have an upper limit on damages of £5,000 per case. It hopes that the track will be operational by the end of 2012.

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”.

The Court dismissed Folly’s arguments that “STALKER” had been used in conjunction with “tackle” as that was not always the case on its website. It also did not agree that “STALKER” was used in a descriptive sense, as that was not how Folly had used it. The Court also had no time for the arguments that “STALKER” was generic or had no distinctiveness.

All in all, the case brought was pure folly and the defendant should have found a better angle to win.

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.

In the first instance, the High Court ruled that the claim should be rejected, as the two designs in question were considered to give different impressions to an informed user. The ruling was based on the fact that, whilst there were several identical and similar features, the registered design had not been breached. Dyson appealed to the Court of Appeal.

The Court of Appeal ruled in line with the High Court, and confirmed that there had been no infringement. As with the High Court’s ruling, the decision was based around whether an informed user would be given a different overall impression by the two products – the ruling was that the overall impressions of the two products were different and no infringement had taken place.

Even though the Court of Appeal noted that Dyson’s registered design deserved a broad degree of protection, the overall impression that an informed user would obtain from the products would be different, sucking the life out of Dyson’s claims.

In the interview, Holden promoted certain information about the law firm group “QualitySolicitors”, and a presenter of the programme was considered to have endorsed the promotion. Ofcom ruled that “undue prominence” had been given to QualitySolciitors during the interview and ITV had not given sufficient information to viewers as to why the brand was being promoted in an interview with an actress.

The ruling noted that ITV was providing refresher training to its production team to prevent a repeat of the breach.

The High Court rejected Plentyoffish’s argument under section 5(4)(a) of the Trade Marks Act 1994, on the basis that Plentyoffish had no goodwill in the UK at the time when the application was made and had not shown that any UK residents had become members of its website. As it had no UK customers, the registration of the trade mark in the UK did not constitute passing off. There was a difference between having a reputation and acquiring goodwill. It may be that people in the UK knew of Plentyoffish because UK users had visited the site and so it had a reputation; however, goodwill required it to have customers, which was not the case here. Customers would mean that they actually received the goods or services (whether or not it was provided for free).

It may not be much consolation for the loser, but at least there are plenty more fish in the sea.

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 65 requests received in that period covered more than 300 individual items, and came from the UK government and courts. Six of the requests related to videos that raised national security concerns on YouTube, and several other were court orders relating to defamation and privacy.

Details of the requests can be found here.

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 complaint was that the website had been misleading as it had not set out that the surcharges were not optional in order to make a purchase from the website. It was also argued that the website was misleading in the way it set out VAT on purchases, as the price quoted was with the figure excluding of VAT, whereas in all cases VAT would apply.

The ASA upheld both parts of the complaint, ruling that there had been a breach of the CAP Code in terms of misleading advertising and pricing. The CAP Code is the code of practice aimed at ensuring adverts, including material written on businesses’ own websites and social networking websites, are fair and not misleading. The ASA is a regulator in charge of enforcing the CAP Code.

This issue is increasingly in the public eye. The Office of Fair Trading recently told travel companies to make credit and debit card surcharges clearer on their websites. In addition, the Consumer Rights Directive recently adopted by the European Union requires pricing to be more clearly set out.

Many people may be under the misapprehension that they have until the Consumer Rights Directive is brought into force under English law (likely to be about two years from now) before they have to make all charges clear up front in an online order process. In fact, as this ruling shows, failure to be up front and clear on pricing is already a breach of the CAP Code and the ASA enforces the CAP Code even for something said on an organisation’s own website. Although a breach of the Code does not have legal effect, it can result in bad publicity and an inability to obtain advertising space in the future.

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.

It sounds like there’s music left to write on this one.

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.

Interflora, a flower delivery network, operated under CTM and UK-registered trade marks of “INTERFLORA”. Marks & Spencer sold products online, including flowers. Marks & Spencer bought a number of keywords containing the word “INTERFLORA”, and other variations, on Google AdWords – a service provided by the search engine operator Google, where specific adverts appear against certain search terms. When users searched for “INTERFLORA”, a link to Marks & Spencer’s online flower delivery network appeared. Interflora issued proceedings in the High Court against Marks & Spencer for infringement of the Trade Marks Directive.

The High Court adjourned proceedings and referred a number of questions to the European Court of Justice (ECJ). These questions covered what constituted “use” of a registered trade mark by a competitor, what goods and services were considered “identical” for the purposes of the Trade Marks Directive and the Community Trade Mark Regulation, whether such use might lead a consumer to believe the trade mark owner and competitor are part of the same commercial network, and whether Google’s lack of restriction on the use of the trade mark by the competitor affected the application of the Trade Marks Director and the Community Trade Mark Regulation.

The ECJ has now ruled that:

-      A trade mark owner can prevent competitors using the registered mark as a keyword for goods and services identical with those covered by the registration if that use might adversely affect one of the functions of the mark. The ECJ identified three functions. In terms of the original function, use of the registered mark will have an adverse affect on the trade mark’s function of indicating origin if the keyword does not enable a reasonably well-informed and observant Internet user to recognise the identity of the service provider as against the trade mark owner’s identity. As regards the advertising function, the ECJ said that use of the keyword by a third party would not be relevant, even if it caused the trade mark owner to have to spend more advertising money in enhancing its exposure in response to search requests for the trade mark term. The third function was the investment function, which allowed trade mark owners to acquire and preserve a reputation to attract consumers and retain their loyalty; the ECJ ruled that the mere fact that a keyword leads consumers to switch to a competitor does not mean that the investment function is adversely affected.

-      A trade mark owner that has a particular reputation can prevent competitors using the registered mark as a keyword if such use takes unfair advantage of the character or reputation of the mark (known as “free-riding”) or causes detriment to the character (“dilution”) or reputation (“tarnishment”) of the mark. Use of the registered mark as a keyword cannot be prevented by the owner where the advertising offers an alternative to the owner’s goods or services, provided that the alternative is not an imitation of the owner’s goods or services, does not cause dilution or tarnishment and does not adversely affect the functions of the trade mark.

The ECJ’s ruling has added little to the existing jurisprudence. However, one aspect of the ruling might offer new hope to those seeking to prove infringement – the ECJ ruled that a “substantial interference” with the “investment function” of a trade mark (which is seen as the purpose of acquiring and preserving a commercial reputation) is an infringement of that trade mark.

The proceedings will now move back to the High Court for judgment, and it will not be until that judgment is issued that the full effect of the ECJ’s ruling will be seen. The “investment function” aspect may give Interflora an additional argument when the proceedings come back before High Court. However, it seems that the national courts will have to consider the ECJ’s ruling on a case by case basis based on the facts. In addition, given how widespread the use of keywords has become, it may become harder for a trade mark owner to argue that infringement has taken place through use of keywords – most Internet users are aware of the process and know what product they are looking for when they perform a search.

We await the ruling of the High Court to pollenate our thoughts…

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 ECJ ruled that Viking was not prevented from offering the refill service by Kosan’s trade marks on the bottles due to the fact that:

• it was industry standard to offer refills of such bottles, regardless of their shape; and
• the bottles were expensive (compared to the gas that would go inside them), had independent economic value and were designed for re-use.

As such, the ECJ ruled that it was unlikely that a consumer might assume a connection between Kosan and Viking, especially as Kosan’s bottle labelling remained intact and Viking had sticky labels to refer to its gas. The ECJ further ruled that a consumer would be unfairly restricted if, having bought the bottle, they could only have it refilled by one supplier, as the bottle had certain advantageous technical characteristics.

Simon Weinberg, solicitor in the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, comments, “This case is interesting as it shows a situation where the industry standard was for the bottles to be refilled, avoiding any contention that a consumer may assume a connection between the supplier and the refiller. This contrasts with another recent case in the High Court in which cage containers for bottles could not be refilled with different bottles due to the confusion it might cause a consumer in thinking that both the bottles and the caged container came from the same source. Although the rulings come from different courts, the contrast clearly shows the importance of industry standards in trade mark rulings.”

The two magazine adverts, one relating to “Teint Miracle” foundation by Lancôme featuring the actress Julia Roberts and the other relating to “The Eraser” foundation by Maybelline and featuring the model Christy Turlington, were intended to show how well the foundation worked to have an anti-ageing effect by covering wrinkles. They were challenged by Jo Swinson, an MP, for being misleading and not representative of the results that the products could actually achieve. L’Oréal, owner of both Lancôme and Maybelline, produced evidence that both products were capable of improving the skin’s appearance, and also argued that the subjects, Julia Roberts and Christy Turlington, had naturally healthy skin which added to the effect of the adverts.

In both instances, the ASA ruled that the claims made in the adverts as to the effect of the products were supported by the testing evidence that L’Oréal had produced. However, the ASA also ruled that the image used in each advert was not an accurate reflection of the results that could actually be achieved by using the product. As such, both adverts were ruled to be misleading and cannot appear again in their current form.

The adverts breached the CAP Code. The CAP Code is a code of practice governing the content of adverts and marketing communications and is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

The ASA rulings can be found here and here.

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.

Last year, Apple filed proceedings against HTC for the infringement of 20 patents, but HTC counterclaimed, accusing Apple of patent infringement, and attempted to have the sale of iPhones, iPads and iPods banned in the USA.

Meanwhile, Apple and Samsung are in a spat, accusing each other of copying each other’s technology.

Delta replaced Shütz’s bottles with new bottles produced by different manufacturers and sold the containers on. Delta included various disclaimers on the containers once the bottles had been replaced relating to the bottles themselves, but Shütz issued proceedings for infringement of trade marks and passing off.

The High Court ruled that passing off had been established, and that the replacement of bottles by the defendant infringed the claimant’s trade marks, both in relation to the bottles and the container as a whole, as an end user would see the Shütz name on the cage and presume that the bottles were also manufactured by Shütz. The High Court rejected Delta’s argument that the relevant consumers were the bottle fillers rather than the end users. The High Court considered that the disclaimers included on the containers by Delta were not sufficient to inform an end user that only the cage was from Shütz as they were not positioned prominently, were worded ambiguously and could come off as they were not well attached.

The High Court ruled in favour of the claimant under section 10(2) of the Trade Marks Act 1994, as the marks and services were similar and there was a likelihood that the average consumer would be confused or make a connection between the claimant’s website and the defendant’s business. The High Court rejected a claim for trade mark infringement under section 10(1) – which protects trade mark owners against identical marks for identical services. The telephone recordings did not show that Client Connection had no real prospect of success of showing that it was using a different name, but in any event the services were not identical. The High Court added that, if a claim under section 10(2) had failed, the ruling would have been in favour of the claimant under section 10(3) as the claimant’s business of cold-calling under its trading name might tarnish the claimant’s reputation whilst using the claimant’s reputation for its benefit.

The defendant had issued a counter-claim that the trade marks lacked distinctiveness and were too descriptive and were thus invalid, but the High Court rejected the counter-claim on the grounds that the trade mark was highly distinctive due to its use over a number of years.

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.