The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Friday, 30 September 2011

Friday Footlights

Friday is traditionally the day that the IPKat will remind readers of all the lovely events that grace the, aptly titled, forthcoming events page. For those in search of an IP conference or seminar fix over the coming months, or indeed just in search of a few quick CPD points, there is no better place!  Recently added events include the UCL IBIL Masterclass on Employee Inventions on 2 November, however there are plenty of others to suit any tastes.

Earlier in the week CoolBrands – which in its own words has “Since 2001 …been canvassing the opinions of experts and consumers to produce a barometer of Britain’s coolest brands, people and places” – produced its latest list of the top 20 coolest brands in the UK. Judged by a combination of expert panel [Merpel wonders if “expert of cool” is something that can appear on one’s CV] and public vote. What makes a brand cool, I hear you ask? Well, from a starting pool of 1500 brands, the final 20 were selected based on responses to their: style; innovation; originality; authenticity; desirability; and uniqueness [Aaah, the shifting sands of opinion-based research…]. The top 10, is as follows:

1. Aston Martin
2. Apple
3. Harley-Davidson
4. Rolex
5. Bang & Olufsen
6. BlackBerry
7. Google
8. Ferrari
9. Nike
10. YouTube

Just over a year ago, the IPKat reported on the activities of a company called Righthaven LLC, which was being widely proclaimed as the first of a new species: the Copyright Troll. Righthaven’s model of business was one of sub-contracted enforcement. Having no copyright of its own, the company extracted sums on behalf of clients that signed up to its services: rummaging through the cluttered contents of the web in search of potential infringers to bring to justice. Righthaven’s infamy has even caused a wikipedia entry (which, as everyone knows, is the true measure of fame/infamy and success/abject failure) to spring into being.

Whereas business was initially good, things soon started to unravel, and reports flooded onto the web earlier this month that Righthaven may be about to fall into bankruptcy following a costs order made against it. Adding to the company’s woes, earlier this week a Colorado District Court threw out Righthaven’s case against a Mr Leland Wolf, whom it had accused of infringing a Denver Post photograph by parodying it on his blog. [A copy of the Order is hosted by the Electronic Frontier Foundation here]. The Denver Post had provided Righthaven with a right to sue for infringement, but as Judge John L. Kane explained:
“A third-party who has been assigned the bare right to sue for infringement has no interest in the legal dissemination of the copyrighted material. On the contrary, that party derives its sole economic benefit by instituting claims of infringement, a course of action which necessarily limits public access to the copyrighted work.

This prioritizes economic benefit over public access, in direct contradiction to the constitutionally mandated equilibrium upon which copyright law is based.”
Accordingly, the Court threw out the case on the basis that Righthaven simply did not have the standing to bring an action. Potentially more importantly however, over 50 other that had been filed before the Court were stayed pending a motion to dismiss. Clearly more thought needs to go into some of the mechanics before Righthaven is able to franchise its model to the masses…

An olive branch at last?
What week would go by without more fun and frolics between those Behemoths of the electronics industy, Samsung and Apple? With legal proceedings flying left, right and centre, and claims and counterclaims bouncing off the walls of courts from the Netherlands to Australia, the IPKat was fearful that there would be no end to the litigation – a modern take on the story of Sisyphus, each company thinking that they have finally got the litigation stone to the top of the hill only to find it being pushed back down by the weight of another suit against it.

This week’s story is of a somewhat peculiar nature, as Bloomberg (amongst others) reports that “Samsung Electronics Co. made a proposal to Apple Inc. to resolve their patent dispute in Australia regarding touch-screen technology.” No details have yet been given about what treasures Samsung might have offered to placate its fruity rival, but according to Engadget “Stephen Burley [Apple’s lawyer], acknowledged that "[Samsung's] inconvenience would be diminished and we would be comforted" by an agreement.”

The saga continues...

Wednesday, 28 September 2011

Wednesday whimsies

An earlier draft -- or the current one?
Those Unified Patent Court proposals simply will not go away.  A new Draft agreement on a Unified Patent Court and draft Statute - Revised Presidency text, Brussels, was published on 2 September 2011. József Tálas (Sar & Partners, Hungary) and Steve Peers (Professor of Law, University of Essex) both kindly drew the attention of this Kat to its existence, but he was too busy writing about the old version (see Kat rant here) to get to grips with the new one.  You can peruse it for yourself here. Changes to the text have been underlined and explained, which makes life a little easier since the document is still 77 pages long.  While we're on the subject, EPLaw President Jochen Pagenberg has drawn this Kat's attention to an excellent, sincerely meant and constructive critique of the draft agreement which you can view here on PatLit along with some strongly supportive text.

The IPKat is waiting for
the book of the video of
the draft
The Unitary Patent won't go away either. From Gérald Sédrati-Dinet comes a video presentation in which he goes thoroughly through the issues raised by the proposed legislation on the unitary patent, stressing how important it is to draw carefully a good patent policy, pointing at drawbacks of the Commission's proposal and proposing some required amendments in order for the unitary patent to emerge speedily and safely from the drawing board into the harsh reality of modern Europe. You can access the video, which is less than 15 minutes long, here, or download it on Ogg Theora/Vorbis Free format -- oreven browse the slides at your own pace. Gérald would appreciate viewers' comments, of course.

A Google search for 'maple leaf'
and 'polar bear' retrieved this
piece of artwork
Lack of transparency of Court of Justice of the European Union proceedings is another of the Kat's favourite topics (see eg IPKat threatens European and Judicial Serenity" here), in which context he is pleased to draw to the attention of readers an email from the ever-relevant Professor Norman Siebrasse, who writes:

"It appears that the Supreme Court of Canada (SCC) is more serene than the CJEU, as all submissions are available online. Here is a link to the practice notice, here is a link to the SCC policy for access to records, and here is a link to the submissions in an upcoming copyright (fair dealing) case. Note that hearings are also webcast".
It's not as though the Court of Justice faces delicate political, social and economic issues while the SCC does not.  Perhaps we Europeans have some big lessons to learn from Canada about our institutions and how they relate to us.

Around the weblogs. Starting with PatLit, the robotic octopus saga of the PCC Pages has now entered its 39th episode, with further consideration of the conflict between privilege and documentary disclosure.  The Social Interface is in interesting contribution to the outer margins of IP/IT, being an interdisciplinary blog on the social implications of technology: it's driven by a team of Australians of whom two are in colour, the others in monochrome.  Emily Goodhand has produced a neat, punchy account of revolutionary developments at Princeton in the battle between academics and publishers for the heart and soul of the former's research product: you can read it on the 1709 Blog here.

How is IP handled in your firm?

Managerial research is devoting increasingly more time to the question of how IP is transmitted through, and processed by, a company. The questions raised are both of a positive and normative nature. Researchers both map out the manner in which IP is actually transmitted and processed within a company (e.g., is it primarily the purview of the corporate IP department or is it distributed across various departments?) and consider whether alternative arrangements might enhance the value of IP for the company (e.g., should there a a top management position of "chief Intellectual Property Officer?).

However, there does not seem to be the same degree of attention to the parallel question with respect to law firms, namely how is IP handled across departmental and type-of-practice (contentious versus non-contentious) lines? IP enjoys a special status within a law firm practice. On the one hand, it is not a basic tool of the legal trade, such as contract law, which is part of every lawyer's basic legal training and which is part of every lawyer's practice, no matter what his field. On the other hand, unlike a field such as tax law, IP is not sufficiently technical (patent drafting and prosecution being the exception) that a lawyer will eschew dealing with the subject if he or she is not a specialist in that field. It is a bold (and ultimately foolish) attorney who will deal with tax questions as opposed to seeking advice from a member of the firm's tax department. But what about IP matters?

Keeping in mind these two poles, IP seems to occupy a middle position. IP is not a core law school subject; some students take a course or two while others do not. Unlike contract law, therefore, it cannot be said that a familiarity with IP is part of the legal skill set of every freshly-minted law student. That said, there is a sense of accessibility to the subject-matter of IP (again, with patent matters perhaps being somewhat different) that comes from one's personal experience.

One encounters the subject-matter of copyright and trade marks every day; whether in print, online, over the airways or otherwise. We make numerous purchases each week based on the brand of the product; not only do we read, hear or watch copyright contents constantly but, as lawyers, we are ourselves creating copyright-protected contents. The subject-matter of IP are familiar and we are comfortable with them in our daily lives.

This all-pervasive familiarity with (at least) certain types of IP carries over to law practice. As such, it is difficult to argue that IP belongs (or should belong) to a high priesthood of practitioners authorized to dispense their wisdom on a need-to-know basis. Moreover, there is hardly any aspect of a law practice that does not find itself, sooner or later, with the need to deal with an IP matter. Unlike tax or environmental protection, IP questions arise constantly across a broad swathe of a firm's activities. And in that lies the rub: how exactly do, and should, these IP aspects be handled within a firm? A series of further questions arise:

1. Should the firm maintain a dedicated patent practice, being the one remaining vestige of the IP priesthood? If the answer is "no", then the issue becomes reasonably simple--to which patent boutique should the patent issue be referred?

2. Whether the answer is "yes" or "no", the next question becomes whether to support a separate dedicated "soft-IP group (namely trade marks and copyright) within the firm?

3. If the answer to 2 is "yes", the challenge is to delineate the fields of activity that are to be handled by the members of the group. Will they solely provide "IP support" to other departments, be the task a due diligence report, licensing agreement, or an employer-employee dispute, or will the firm's IP department also have its own areas of responsibility, separate and apart from its IP support activities?

4.If the answer to 2 is "no", the challenge is how provide the staff in the relevant departments within the firm with sufficient IP acumen so as to be able to provide a professionally responsible level of IP competency. A large law firm may be able to develop IP sub-specialists to address these needs, but perhaps at a cost of ignoring the training of personnel with a broader view of the IP landscape.

5. A smaller firm may not enjoy the sub-specialists IP option although, as noted, the circumstances of such a firm may in fact encourage the development of IP personnel with a broader view of the IP practice. Even so, there always remains the quandry of how to deal with the challenge of providing adequate specialization in such a context. Does the law firm "do the best it can", or does it seek to obtain IP specialist advice (from the dwindling number of IP boutiques) if needed?
Questions galore--any answers?

Tuesday, 27 September 2011

Daniels in the lions' den: can they avert a disaster of Biblical proportions?

Last Friday, while this Kat was at the LIDC Conference in Oxford, he was raging against the monstrous abuse of monopoly which resulted from the laws currently in place to protect the London Olympics and Paralympics in 2012 against anything that might be regarded as a whiff of competition.  Commenting on the (admittedly entertaining and well-presented) talk by the affable, unflappable Farisha Constable, LOCOG Brand Protection Manager, he said this:

"Usually when I, as a great enthusiast for IP rights, speak at a competition law conference, I feel like Daniel being thrown into the lions' den. However today, for once, I feel that I am on the side of the lions and that it is Farisha who is being thrown to them".   
By total coincidence, while the Kat was citing Daniel v Lions at the LIDC Conference, a whole group of Daniels was being cast to the lions the other end of Europe, in the lovely city of Warsaw.  The cause of this was the Academy of European Law's conference, The Future Unified Patent Litigation System in the European Union, "organised in the framework of the Polish EU Presidency of the EU Council" which was billed as providing
"... a platform for discussion on the new draft agreement on a Unified Patent Court presented by the Hungarian Presidency on 14 June 2011".
What, perchance was to be discussed on this platform? The programme explained:
"The objective of the conference is to analyse how issues raised by the Court of Justice of the European Union in its Opinion 1/09 on the previous version of the agreement regarding compatibility with EU law were addressed, as well as to promote an exchange of views between courts and practitioners on the functioning of the European Patent Court".
The event commanded an all-star line-up of speakers.  In case you were wondering, they were
  • Margot Fröhlinger, Director, DG Internal Market and Services, European Commission, Brussels
  • Dr Klaus Grabinski, Federal Supreme Court (Bundesgerichtshof) Karlsruhe
  • Professor Sir Robin Jacob, University College London 
  • Marcin Korolec, Undersecretary of State, Ministry of Economy, Warsaw
  • Eurico Marques dos Reis, Judge of the Court of Appeal, Lisbon
  • Kevin Mooney, Partner and Head of Intellectual Property, Simmons & Simmons, London
  • David Rosenberg, Industry Affairs Manager, Corporate IP Department, GlaxoSmithKline, Brentford
  • Thierry Sueur, Vice President, Intellectual Property and Vice President, European & International Affairs, Air Liquide (tbc)
  • Maciej Szpunar, Undersecretary of State, Ministry of Foreign Affairs, Warsaw
  • Professor Winfried Tilmann, Of Counsel, Hogan Lovells International, Dusseldorf
  • Vincent Tilman, Senior Advisor European Affairs, Eurochambres, Brussels
  • Robert van Peursem, Judge, The Hague District Court
  • Pierre Véron, Avocat, Véron&Associés, Paris
Unbeknownst to the cast, and to the 80 or so participants, there was also an envoy from the Republic of Katland, who sent back this report:
"The purpose of the conference, declared the Polish Minister opening proceedings, was to "look at the Court from the point of view of users - the Judges, lawyers and entrepreneurs". [Is 'entrepreneurs' a euphemism for 'litigants'? If so, the needs of plaintiffs -- who make the decision to go to court -- and defendants, who have little option to go when sued, may reflect different points of view. In any event, why are judges and lawyers listed ahead of the litigants? This reflects a poorly-focused mind-set, say Merpel] Unfortunately, this message had clearly not reached Winfried Tilmann who, speaking next, immediately informed the conference that "there was no political will in Council or in Parliament to re-open [the December 2009] package deal". He concluded with the dark warning that speakers should "resist the temptation to fight old battles". Plainly precisely nothing of consequence was up for discussion in his opinion, which begged the question: what actually was the point of the conference?

A succession of speakers then largely toed the Tilmann line. Unsurprisingly, perhaps, these were led by the German speakers such as Judge Klaus Grabinski. But French support too came from Thierry Sueur. While he sensibly urged that the Court be allowed to decide the language of proceedings, he implored Poland not to be afraid to push the Court agreement through, saying "let's not look for perfection" [Heaven forfend that one should even consider such a thing, adds Merpel. No-one really wants a perfect patent litigation system, do they?].

Then at last, (likening himself to Daniel entering the lions' den) Kevin Mooney pointed out a few of the fundamental flaws in the proposed arrangements, notably that no-one had explained how the Court was supposed to be funded, following withdrawal of the Commission's financial support (so central to the 2009 draft) consequent upon the ECJ's March 2011 opinion.

Following this lead, the touch-paper was well and truly lit by Judge Robert van Peursem, with a typically Dutch piece of plain speaking. Deeply critical of the proposals, he saw no reason to stick with the 2009 Council conclusions, saying it was not just a case of mending some details. He said that the "politicians should start to listen to the users" [If only! They scarcely listen even to one another ...]. Expressing strong support for the "excellent" British "Concerns of Principle" paper [on which click here] and the equivalent Swedish paper, he implored the Commission to "listen to those expert voices sincerely, not politely, or not at all". So strong was his condemnation of the proposals, that he declared that he "would seriously consider to decline to take part in this system as it stands", saying also that he spoke for the majority of his first instance colleagues.

Never a man to be outshone, Sir Robin Jacob described all amendments to the litigation proposals since the EPLA proposal as retrograde, and warned of the dangers of creating the "patent equivalent of the Euro". He said that if he were a user he would certainly opt out.
Noble support for the Daniel cause came next from David Rosenberg, who declared himself a wholehearted supporter of a unitary court, but only if it was better than the present system -- which this was not. He observed that it was important to get it right for innovation, not for politicians. It was not just a political project and if it had to take more time, so be it. This was not a case of following the advice of Macbeth (right) that " If it were done when 'tis done, then 'twere well It were done quickly": That, he pointed out, was said in relation to the killing of a king, whereas for this project, a more apt exhortation would be "when it is done, it should be done right".

So what did Margot Fröhlinger make of all this in her speech? Dishearteningly she said that some aspects of the agreement such as bifurcation and composition of panels "could not be improved". She was "surprised" at the criticism. This envoy from Katland was not alone in his surprise at her surprise. Robert van Peursem pointed out that he had made precisely the same observations at five different conferences [This just goes to show how foolish it is for members of the IP community to believe that their expertise and experience have any value in a world of convenience and expediency]. It was impossible to put any questions to Margot Fröhlinger, however, to ask her if having now heard these criticisms, she would listen, or whether she would follow the Tilmann line. Instead, the subsequent "debate" consisted mainly of a series of attacks on the Daniels by various of the faithful lions. Thierry Sueur described the dissenting speakers as "isolated" (a suggestion strongly rebutted by Robert van Peursem) and astonishingly responded to Sir Robin Jacob's plea not to "do a Euro" by describing the Euro as a "great success". This perhaps summed up the attitude of some: that criticism (no matter how constructive) is quite simply heretical to the political project that the unified court has become, and those heretics deserve to be thrown to the lions.

But it was not all doom and gloom for those who would like to see a good agreement, not just an agreement at any cost. Reassuringly, the German view was far from universally supportive. Speaking from the floor, having curiously been deprived of a speaker's platform, Jochen Pagenberg voiced support for more debate on the issues, including revisiting exclusivity in purely domestic disputes and suggested a transitional period of 15 years or more. Even Margot Fröhlinger appeared to concede that the transitional and opt-out arrangements could in fact be considered further.

Daniel waited patiently to be eaten while the lions debated the benefits of bifurcation and pondered as to whether they should dine alone, in pairs or in panels of three ... 
So what will the next steps be? Almost certainly some decisions will never be overturned. The bifurcated system is here to stay. So too is the panel system of permanent local panels of two local judges and one guest judge. This combination will almost certainly lead to forum-shopping among the divisions of the Court. But other issues may yet be revisited: the transitional arrangements in particular. If improvement here could be negotiated, together with a concession that the Central Division could be used by patentees commencing infringement cases, that would make a considerable difference. Let us hope that the political imperative to do a deal - any deal - does not in Sir Robin Jacob's words leave us in 15 years' time with a system which is more expensive than the present one. Whatever the outcome, however, the Daniels deserve a great deal of thanks for their efforts in Warsaw. The lions certainly know now, if they did not know it before, that they are in for a fight to reach a better agreement".

SuperGroup: Fashion, Recession and IP

It seems quite a long time ago that this Kat confidently described intellectual property as the most recession-proof area of legal practice and, while he's sure he's right in principle, he can't say hand-on-heart that the facts are always as correct as the theory they're supposed to support.  Anyway, he hasn't been writing as much about IP and the R-word as perhaps he should have, so he's grateful to his respected friend Fredericka Argent for penning the piece below, which reflects on the effect of recession on the balance between original design, investment and playing safe by copying:

SuperGroup: Fashion, Recession and IP 
Times are tough in business, and none more so in the fashion industry. Newspaper pages are filled with tales of woe: high street stores suffering from declining sales, lack of consumer interest and, in a few cases, insolvency. However, some stores are managing to buck the trend. Those that do tend to be either low cost ‘fast fashion’ retailers or, at the other end of the spectrum, luxury designer brands. It is rare to find a mid-range high street store that is truly flourishing in these austere times. And yet, one such retailer can claim to be doing just that – the all-conquering Superdry. 
Superdry is the casual-wear label du jour. The brand is easily-spottable with its bright colours, contemporary designs and distinctive Japanese characters emblazoned on everything from T-shirts to rucksacks. It was set up in 2003 by the very un-Japanese-sounding Julian Dunkerton and, despite competition from similar style retailers on the market, such as Abercrombie & Fitch, Jack Wills and Uniqlo, to name a few, SuperGroup has recently revealed pre-tax profits of £50.2 million. Yet, even with success in the UK, Europe, the USA and Australia, SuperGroup is not complacent about the need to stand out amongst rivals in the highly competitive market for casual clothing. As such, it has adopted a tough approach to protecting its brand –- essentially, issuing legal notices to all those that seek to “copy” its designs. 
Cunningly disguised as cats,
Superdry bodyguards keep a
watchful eye out for unwanted
In 2009, The Times ran a story about Superdry’s approach to high street imitations: at a trade fair in Germany, the company employed two bodyguards to prevent unaccredited buyers from entering and photographing its clothing. SuperGroup claims – arguably sensibly – that it is cheaper to employ such methods than enter into legal battles. Overall, they spend around £1 million per year protecting their designs. Says Julian Dunkerton: “we are probably the most copied brand in the UK and these cases are becoming all too frequent... we are determined in protecting our intellectual property.” 
In January 2011, it was reported that SuperGroup was pursuing nearly 100 legal actions for breach of its copyrights or design rights. There have been some obvious infringers, such as ‘Superfly’ and ‘Silverdry’, makers of counterfeit Superdry products. But SuperGroup has been equally forceful about pursuing other, mainstream retailers who they believe have infringed either their copyrights or design rights in individual pieces of clothing. 
Some examples of recent cases: 
·         May 2009: The Guardian ran a piece covering SuperGroup’s allegations against Primark, accused of copying key features of Superdry’s famous leather jacket, ‘Brad’, as worn by David Beckham. A financial settlement for an undisclosed sum was agreed out of court and Primark agreed to stop producing the jacket. 
·         January 2011: The Telegraph reported that SuperGroup was awarded £45,000 in the High Court against a Lancashire fashion group, Rhodi, who it claimed had breached design rights in their range of Lumberjack-style hooded shirts. Rhodi did not file a defence and, following judgment in SuperGroup’s favour, they were ordered to cease and desist from selling the infringing shirts and surrender their stock. 
As recently reported by The Daily Mail, the latest focus of Superdry’s litigious attention is the Arcadia Group, owned by Sir Philip Green. One amongst this group is the store, Burton, which currently sells a ‘Navy Wool 2-in-1 Funnel Coat’ coat (right) that SuperGroup deems to be an infringement in the design rights of its ‘Jermyn Street’ trench coat. SuperGroup has issued a writ through DKH Retail Ltd, its subsidiary, against Arcadia Group, alleging ‘close similarities’ between the two competing coat. It claims that ‘various small and immaterial alterations’ have been made to Burton’s coat in an attempt to ‘avoid a charge of blatant copying’. SuperGroup is seeking damages from Arcadia Group as well as the destruction or delivery-up of the offending goods. 
Protecting the design 
Clothing has always been a tricky area when it comes to intellectual property protection, partly because fashion is so transient that the period of protection may outlive the clothing line itself. Designs in the UK can be protected by copyright and/or a design right. An unregistered design right, like copyright, arises automatically. Alternatively, a design may also be registered under UK or European Community law. 
Without access to the court documents, it is not possible to know the scope of protection around the Jermyn Street trench coat. It seems likely that as an international company, SuperGroup would choose protection as a registered design under the Community Design Regulation 6/2002. A design will be protected under this regime if it is ‘new’ and has ‘individual character’ (Article 4(1)). Registered design protection lasts for up to 25 years and would give SuperGroup the exclusive right to exploit their design and prevent unauthorised copying. 
Comments on the legal battle 
I am in two minds about SuperGroup’s case against Arcadia. On the one hand, I look at the two items in question and see a fairly generic men’s woollen coat, which could have been designed by any one of the many mainstream high street stores. I also wonder how ‘creative’ a designer can really be when designing a coat that has to look simple, serve a functional purpose and fit the average man. 
On the other hand, perhaps the reason why I, as a consumer, think that the coat is generic is because of the abundance of copycat men’s winter coats on the market. This would point to a fundamental lack of creativity in the retail industry at the moment and widespread and open counterfeiting. Certainly, this is something that Dids McDonald, CEO of ACID (Anti-Counterfeiting In Design) seems to think. Regarding the Superdry v Primark battle, Dids had this to say: 
The investment incentive is not there for some retailers do the design, research and development; instead retailers look at what’s selling – and it tends to be design-led companies that bring out the hottest stuff – take it, change it a bit and hope that’s OK.  To bring a product to market takes time, investment and creative skills.  There are a lot of companies out there that are free-riding on another’s designs as a fast track to market. It has to stop!” 
It is sad to think that this may be the case. The fashion industry contributes some £21 billion to the UK economy and this year’s London Fashion Week has shown how the UK breeds some world-class designing talent. For all designers – be it creators of high fashion clothing or those creating everyday wear for the big retail chains, intellectual property is one of their most important and valuable assets. Where this asset is threatened by rivals perhaps they should be encouraged to robustly defend their rights. 
However, it is important not to confuse counterfeiting with healthy competition which, from a consumer’s point of view, leads to choice in the market. A balance must be struck in the protection of design rights: counterfeiting – be it blatant or subtle – is unacceptable. It is with regret that I read reports, such as that by the UK’s IP Crime Group detailing the high levels of counterfeiting in clothing in the United Kingdom. But, equally, I would question whether all of SuperGroup’s claims against its rivals can be strictly justified. Are Burton’s designers lazily free-riding on the success of a popular Superdry coat, or is this simply a case of two designers creating similar but independent articles of clothing in response to consumer demands? Only time will tell how (or indeed, if) this question is answered. In the meantime, I’d be interested to hear readers’ thoughts on this matter.

Monday, 26 September 2011

Monday miscellany

Friday came and went -- and the IPKat was too busy chasing his tail to notice that he hadn't posted his usual reminder to check the Forthcoming Events page. There are plenty of seminars, events, conferences and other social gatherings listed, so do take a look!

Around the weblogs.  First, congratulations to IP Finance on securing its 1,000th email subscriber! Now for the serious stuff. This week's A to Z tour of official African intellectual property websites takes Afro Leo to the Republic of Djibouti, where online is evidently not the place to be.  New PatLit blogger Michael Thesen has got off to a roaring start with two excellent posts on calculation of damages via the licence analogy and the private and social costs of patent trolls.  Online publication of next month's issue of the Journal of Intellectual Property Law & Practice is the excuse for airing the editorial on jiplp: it's "L'Oréal, eBay and tyranny of the unknown". 1709 Blog's Ben Challis reviews some big issues relating to the new Facebook Music service here. IPKat blogger Jeremy's soulmates in pedantry on IP Draughts wax lyrical on the problems of using "will" or "shall" in contracts, many of which can be cured by using "must".

Feeling FRANDly?  The Oxford University Press quarterly Journal of Competition Law & Economics (JCLE) is something that catches this Kat's attention from time to time. Every so often it features an article that is of great interest to the IP community. One such article in the current issue (vol.7, no.3) is "Fair, Reasonable and Non-Discriminatory (FRAND) Terms: a Challenge for the Competition Authorities" by Mario Mariniello (a member of DG Competition's team). According to the abstract,
"Standards contribute to increase welfare to the extent that they reduce production costs and increase products' value to consumers. The adoption of a standard can, however, raise competition concerns. After the adoption of the standard, the chosen technology may lack effective substitutes. The owner of an intellectual property (IP) right essential to the technology may indeed use the additional market power that may be gained through standardization (competitors being absent ex-post) to charge higher prices to “locked-in” licensees. To mitigate such a hold-up risk, standard setting organizations usually require patent holders to disclose their relevant IP rights ex-ante and/or to commit to license IP on fair, reasonable and non-discriminatory (FRAND) terms. This article suggests a methodology to assess whether FRAND commitments are violated, from a competition perspective. The proposed methodology extends the framework proposed by Cecilio Madero and Nicholas Banasevic by outlining four necessary conditions for an ex-post licensing behaviour to be considered anticompetitive, in violation of FRAND commitments".
There's no algebra and plenty for IP strategists to think about, which makes a pleasant change from some law-and-economics pieces this Kat has unsuccessfully sought to read in recent years.

ICANN has now launched a micro website for new generic Top-Level Domains (gTLDs), which you can access here, and is also promoting a six-minute video which you can view here. ICANN President and Chief Executive Officer Rod Beckstrom says it will be “the definitive source for any and all information relating to the gTLD program, for applicants, potential applicants or simply the curious”.  If any domain-name savvy reader would like to put this definitive source through its paces and review it for this weblog, this Kat would be happy to hear from that good soul.

Better late than never, says the IPKat [and better early than late, says the ever-realistic Merpel]. On 29 July of this year the IPKat posted this report ("When is a secret not a secret?") on the decision of Mr Justice Arnold in LG Electronics Inc v Sony Europe Ltd, Sony Computer Entertainment Europe Ltd, Sony Computer Entertainment Inc and Sony Corporation. In so doing, the Kat lamented that the decision, which looked like an interesting one, had not yet been posted on BAILII. Well, it has now and you can read it here, thanks to a tip-off from one of the Kat's most observant friends.

Believe it or not, here are even more events

Miffy demonstrates her patented
technique for looking awake and
interested in patent seminars ...
There's an IPKat seminar coming up on the afternoon of Thursday 3 November, 5.00pm to 6.30pm, in the pleasantly-equipped and conveniently-located London offices of Olswang LLP, 90 High Holborn. The speaker is Dr Galit Gonen (who heads up the European patent litigation team at Teva Pharmaceuticals) and her subject is "Linkages between legal and marketing theories regarding secondary patents for pharmaceuticals".

A panel of sensible and well-informed people will comment briefly on the paper (which is based on Galit’s PhD thesis) before it’s thrown open to the floor for general discussion. Mr Justice Arnold (Patents Court, England and Wales), Professor Jo Gibson (Intellectual Property Institute and Queen Mary Intellectual Property Research Institute) and Chris Stothers (IBIL and Arnold & Porter) will be there and the Kat hopes to confirm the presence of one of the stars from the Intellectual Property Institute's Economics Unit.

Refreshments will be provided and registration is FREE, which means it doesn't cost anything [Merpel explains, every time the IPKat runs a free seminar someone emails him to ask how much it costs to attend ...]. There is no registration form. If you'd like to attend, please email the IPKat here and tell him. He will acknowledge your email when he can, which may not be till next weekend.

"Football, Broadcasting and the Internal Market: Is a common audio-visual space in sight?"  That's a bit of a mouthful. It's also the title of a seminar which the City University is holding on Tuesday 11 October 2011, from 1730 to 2030pm, at its premises in Northampton Square, London.  IPKat team member Jeremy will be there. Although he's described as a speaker, along with Lorna Woods, Dan Wilsher and Jonathan Griffiths, he's just going to be giving a few thoughts on the commercial impact of next week's ruling of the Court of Justice of the European Union in Joined Cases C-403/08 FA Premier League and others v QC Leisure and C-329/08 Murphy v Media Protection Services.  To refresh readers' memories: the cases concern pub landlords, including Karen Murphy, who contracted with satellite service providers based outside the UK whose (cheaper) broadcasts included Premier league football. The football bodies have argued that this infringes UK copyright law. In reconciling intellectual property rights with the free movement of services, the Court has the potential to transform broadcasting in the EU.  Full details and registration here. This event is worth one CPD point for practising solicitors.

At last, an illustration
which is absolutely safe
from legal action from the
London Organising Commttee
for the Olympic Games
For those who are heartily fed up with events concerning patents, here's something completely different.  CLT are holding a one-day conference on Wednesday 26 October, Intellectual Property: the Olympics and the Paralympics Conference 2011, somewhere in Central London. Topics tackled by an all-star team of speakers, cunningly chaired by IPKat team blogger Jeremy, include the following:

  • Legal Basis for Protecting the Olympics
  • Legal Structures for Protecting the Olympics
  • The Olympics and Trade Mark Law in the UK and Europe
  • Transmitting the Olympics
  • The UK’s Special Legislation: An Overview
  • Ambush Marketing
  • Advertising, Sponsorship, Keywords and Other Headaches
So if you think you, or one of your clients, may be likely to fall foul of the various intellectual property and Olympic rights that have been put in place for next year's jollities in London, click here for further details.

There's no point in keeping it secret, even if it is about privacy, but Professor Michael Birnhack (Tel Aviv University and a Visiting Fellow at the Institute of Advanced Legal Studies) is giving a lunchtime seminar  entitled “Theory of Privacy” on 12 October at 12.30pm. in Room 103, School of Advanced Study, South Block, Senate House, Malet Street, London WC1E 7HU. All relevant details can be found here.

A little tipple for
the IPSoc youngsters ...
IPSoc, the bright, dynamic organisation for bright, dynamic IP professionals, has just announced its latest forthcoming event, a talk by Mark Chacksfield (8 New Square) on 10 October on "Patents -- Key Issues Update". Mark must be quite a talented young fellow since his web page proclaims that he specialises in all areas of intellectual property. Anyway, you can get all the details you need from the IPSoc website here. The venue is the London office of Hogan Lovells International LLP and there will be some pleasant refreshments for the youngsters. don't miss it!

Unpaid costs re-revisited

The IPKat didn't really expect the issue of unpaid costs in contested IP proceedings to disappear (see earlier post, "Unpaid Costs Revisited", here). That will only happen once there are no more unpaid costs. He has however been giving some thought to the letter, below, from Andy Bridle (Bridle Intellectual Property Limited, Canterbury), who has acted on behalf of a client who was awarded costs following a vexatious trade mark opposition by a competitor and who has been unable to recover the costs award that was made in his client’s favour.  He writes:
"...  It occurred to us that the attorneys for the other side could be considered to be liable for their client’s costs, as they are acting on behalf of their client. On this basis, a complaint could be raised with the relevant regulatory body for the attorneys in question (e.g. the Intellectual Property Regulation Board, IPReg, in the case of UK attorneys), if the costs award was not paid by the attorneys for the other side, on behalf of their client. This should represent a cost-effective method of recovering a costs order, as firms would not relish the idea of being dragged before the body responsible for regulating their industry for alleged non-payment of costs incurred by their client. It would then be up to the attorneys in question to recover this cost from their client in the same way that they would recover the cost of an official fee paid on behalf of their client.
I suspect that most firms would start to ask clients for funds to be held on account when asked to represent them in such proceedings, to cover the possibility of a costs award being made against their client. This should make parties think seriously before proceeding down the opposition route.

Of course, there exists the possibility of a party bringing proceedings without having professional representation. In such cases, it would be a relatively straightforward matter to increase the official fees in such cases to provide for a proportion of the fee being held by the Office in the event of a costs order being made against that party. Thus the fees payable by a party represented by a professional representative would be £X (or Euros) and the fees payable by a party representing itself would be £X+Y, where £Y would be refunded in the event that the party in question is successful or used as payment (or part payment) of the costs order in the event that a costs order is made against them. If the party is defending an opposition filed against them, then they would simply pay £Y when filing their counterstatement if they choose not to be represented.

The USPTO seems to be able to cope with a two-tier charging system (small entity fees and large entity fees), so such a system which charges different fees depending on the nature of the party in question should not be overly difficult or expensive to manage.

In terms of our experience, we are seriously considering raising a complaint with IPReg that the firm of attorneys representing the other side are breaching their professional duty by failing act on behalf of their client in settling the costs award that was made against their client".
Both Andy and the IPKat (who is mildly annoyed that he didn't think of putting this on the list of options in his recent poll) would like to hear from readers in the UK and beyond as to whether they think this might be a viable remedy to a problem which, though small in global terms, has a disproportionate power to annoy and frustrate successful parties in opposition proceedings.

Meanwhile, from Graham Burnett-Hall (a partner in Marks&Clerk Solicitors LLP) comes the following suggestion:
"With regard to the non-payment of costs relating to Community trade marks, I suggest a procedure by which, if any costs order was not paid within 28 days, the creditor could have the details of the debtor added to a list to which all credit rating agencies would be notified, or at least have access. The prospect of being given a bad credit rating should encourage prompt payment".
This Kat, who has at times been infuriated by the difficulty of raising credit even though he is the proud possessor of a perfect credit rating that stretches back into the mists of antiquity, would hate this fate to happen to him, but he wonders whether it would have the desired effect.  Again, readers' thoughts are welcomed.

Sunday, 25 September 2011

Patent conferences: what are they worth?

What cats do in autumn when they're
not attending patent conferences ...
Autumn is traditionally a very busy time for intellectual property conference organisers, with the weeks from mid-September to early December being increasingly crammed with meetings of international and regional organisations, industrial and professional associations and with events put on by the conference "private sector": commercial companies.  The latter cannot routinely rely on the loyalty or commitment of members, service providers or lobbyists when they're looking for speakers or seeking participants to register and make the event a viable one. Private sector conference organisers have to succeed on the merit of each programme. If they cannot provide something fresh and stimulating, something to prise participants from their daytime activities, they do not succeed.

Over the years this Kat has spoken in, chaired, participated in panels of, written programmes for and even gatecrashed a large number of private sector conferences, and has had ample opportunity to consider what makes them tick.  Essentially there are four things that most paying participants want, in varying proportions: (i) the stimulus of fresh ideas and perspectives on old topics, (ii) indications as to where the subject of the conference is going, in terms of general trends, (iii) a chance to evaluate speakers (whether judges, lawyers in practice or anyone else) with or against whom they may be working, and (iv) a chance to network. Quality of the papers presented is never irrelevant, though most speakers' subjects can scarcely be exhausted in the time allocated for them and, in terms of post-event benefit, the shelf-life of even the best lectures is unlikely to outlast the long-term benefit of a good professional relationship forged over a congenial lunch.

This Kat has been taking a particularly close look at three forthcoming private sector events, each of which is organised under the brand of IBC Legal Conferences.  There are two reasons for this scrutiny: the first is his longstanding fascination with event programmes, which double as a valuable source of ideas for articles in journals and people who can be invited to write them. The second is that IBC has kindly agreed to offer a 10% discount to IPKat (and PatLit) readers who register for them. Since this weblog has frequently expressed its concerns about the high price of conference registration, any reduction for its readers is greatly welcomed.

The first of the three events is Standards and Patents 2011 (16 to 17 November, Millennnium Hotel London Knightsbridge), a subject which has been discussed at some depth on the IP Finance weblog, mainly through the medium of a series of seven guest posts by Keith Mallinson (WiseHarbor).  This is the fifth annual conference IBC has run on this topic and this Kat, having participated as a speaker in an earlier one, remembers coming away from a feeling that this was a subject that was growing more quickly than it could conveniently be caught up with.  The number of standards bodies is vast and their provenance is ancient: the International Telecommunications Union's roots go back to telegraphic standards in 1865. As the quest for global standards comes increasingly into conflict with perceptions of both public interest and self-interest, this looks like one growth area that is likely to grow.
  • For further information concerning this programme, click here.  To claim your 10% discount, remember to quote the VIP Code FKW82242IPKE.

The second event is the US Patent Reform Congress 2011, which is being held at the same venue as Standards and Patents but a day later (18 November).  Since this event is preoccupied with the recently-passed America Invents Act, it goes without saying that this isn't (yet) an annual event.  The object of this exercise is to present the results of several years of anguished debate to a European audience which will have to advise and and act upon the basis of unknown, untried legislation in what is still the most prized single domestic market for patented products and services.  It will be good to hear what Q. Todd Dickinson (former  US Under-Secretary for Intellectual Property and now Executive Director of the AIPLA) has to say on the subject -- both on and off the record.
  • For further information concerning this programme, click here.  To claim your 10% discount, remember to quote the VIP Code FKW82243IPKE

Last in time, but by no means in terms of importance, is the third annual International Patent Litigation conference, which takes place at London's Bloomsbury Hotel on 8 December.  This event is conveniently close both to Christmas and to London's fabled West End but, if you're really feeling demob-happy at the end of a long, frustrating year, it's a great chance to see and hear Professor Sir Robin Jacob in action. Another speaker who long ago won this Kat's admiration for his sheer brilliance was Brinkhof's Richard Ebbink. Having said that, no speaker should be more important than the event itself, and the programme presses all the main buttons in terms of topics of concern. Damages for patent infringement would come out top of this Kat's priorities, since he is being asked about their assessment increasingly often in a Europe in which harmonised law does not lead to homogenised outcomes. Where is the stream of references to the Court of Justice on the interpretation of the damages provisions of the IP Enforcement Directive, he wonders?
  • For further information concerning this programme, click here.  To claim your 10% discount, remember to quote the VIP Code FKW82249IPKE

Friday, 23 September 2011

Can There Be an E-Book Library?

The recent demise of the Borders book chain reminded this Kat once again of the ambivalent position of the consumer within the ecosystem of the book and magazine industries. Popular wisdom holds that the Borders chain failed because it did not adjust to changing reading (or non-reading) habits and the migration from physical books to the e-book platform. Whether Borders was simply a book company that lost its way (unlike, say, Barnes & Noble), or whether it is the canary in the coal mine of the ultimate demise of the physical book store business, is still being played out. The Nook e-book reader here has at least bought Barnes & Noble more time to test the ultimate answer to this question.

So how does the consumer of books fit into this? I was a Borders loyalist (I largely eschewed Amazon, since I hate to pay the delivery charges). This meant that, whenever I came to the U.S., I made a special effort to find the local Borders store in whichever city I found myself. I reckon that I purchased 5-10 books a year on that basis, although I admit that my usual pattern in the store was first to find the Specials tables and only thereafter to consider full-priced titles. In so doing, was I good for Borders and/or the book publishing industry? Did Borders fail because of, or rather, despite me?

Be that as it may, I like to think that, as a reader, this Kat is unequivocally in favour of supporting the content-creating industry. Aren't we taught that copyright is principally about providing incentives for the creation of more and more contents. But that is the rub--contents for whom, and at what price? As a consumer of contents, I want to obtain books as cheaply as possible, subject only to the unqualifiable psychic benefit that I may derive by walking throuogh a book store.

But I am also an author, and not a mass-market one to boot. Wearing that hat, I have both my own interests as an author and those of my publisher at heart. As such, the person I least want to meet is my cash-conscious alter ego as he careful paces along the aisles of Borders and its ilk. Say what you want to say, this is hardly a full allignment of interests between all of the relevant actors in the physical book ecosystem.

These ambiguities were brought home again by a recent report that appeared in The Wall Street Journal (September 12th) entitled "Amazon in Talks with Publishers Over Fee-Based Digital Book Services." The gist of the report is that Amazon is considering the launch of a service (described as "Netflix Inc.-like") whereby customers will pay an annual fee for access to online contents. Based on the report, Amazon would offer publishers "a substantial fee" for signing up to the program, which is described as "a library of content". Amazon may limit the number of titles that it will for free via the service.

As reported, however, publishers "aren't enthusiastic about the idea because they believe it could lower the value of books and because it could strain their relationships with other retailers that sell their books." The article goes on: "Publishing executives would rather have people buy their books, and they are concerned that participating in the program could create the impression among consumers that books have little inherent value."

Public libraries may be great in providing access to books (and thereby encourge reading and create a more knowledgable citizenry) for a token modest charge. However, a private form of online lending library, where the delivery platform is a source of revenue for the platform that has the affect of crowding out potential purchasers of the book themselves, seems to be less desirable, at least for the content owners.

Looking at this as a consumer, the plan seems attractive. After all, provided that the fee is not prohibitively expensive, it would seem to offer access to contents without having to engage in the repeated purchase of individual titles. For at least certain kinds of subjects, it is the contents and not the books per se that are of interest, and the plan seems to offer a nifty way of accessing such contents in a manner that favourably resonates with my experiences with libraries over the years.

But this distinction between contents and books must certainly be a nightmare scenario for publishers. It is not enough that they must contend with the challenge of finding a workable pricing model for e-books here. Now they face the threat that, for certain categories of titles, providing access to contents in the form of online lending, rather than ouright purchase of the book for display on an e-reader, will be the norm. Can the parties find a pricing model that satisfies all parties involved -- publisher, online distributor, and consumer? Stay tuned.

More on Borders here.
More on Netflix here.

Thursday, 22 September 2011

The altar of expediency

Before Europe's patent practitioners burn the old books
on patent litigation, let's all be sure that we are happy
with the contents of the new ones ...
That Unified Patent Court which has so divided opinion in Europe has been very much in the IPKat's mind in recent days.  The problem is that, while most people are either enthusiastic or at least accepting of the idea of having a Unified Patent Court for the European Union's 27 Member States, many experts are anxious about the actual details and a simple Kat could be forgiven that everyone seems to want a different one.

Anyway, the Draft agreement on a Unified Patent Court and draft Statute of 14 June 2011 has now been examined, weighed, measured, pondered, praised, criticised, printed out and converted into fleets of paper darts -- and there is no doubt that there are some serious problems which remain to be resolved.

Here in the United Kingdom, the grandly-named EU Patent Reform Consultation Group (concerning which see CIPA, August 2011, pages 488-490) formed a sub-group to examine the Draft Agreement.  The sub-group did not consist of a bunch of conscripts who had been dragged from the drinking houses of Holborn, sobered up and then instructed to moan about the Draft Agreement; rather, it was a select gathering of some of the finest patent experts on this part of the planet -- academics, practitioners, patent owners and even a blogger -- most of whom are, it may gratifyingly be said, friends of the IPKat even if, as indicated, none of them has [recently, says Merpel] been dragged from any of the drinking houses of Holborn.

What points have been troubling the sub-group? Here are some of them, in no particular order (though you can read them all for yourself in full in the sub-group's Concerns of Principle paper, here):
  • Momentum towards political adoption this year is dangerous. It appears that the Commission and the Presidency of the European Union expect to secure adoption of the Draft in political terms by the end  of 2011 [that's 100 days from now] and hope for a diplomatic conference to get it signed up under the Danish Presidency during the first six months of 2012 [the London Olympics start on 27 July ...]. This isn't a huge amount of time, given the number of weekends and holidays between now and then and the fact that the various problems posed by the task of creating a workable Unified Patent Court system have to be solved by people, not by calendars.
  • There is clearly still much that is unsatisfactory about the substance of the proposal as it stands. Annoyingly for the practitioners who will have to work with the system if it is to confer any genuine benefit and not be a disaster, some of the substantive points which trouble them relate to matters that have already been agreed at political level, of which the most significant in this Kat's opinion is the requirement to have two national judges in the proposed local divisions. Given that this has been agreed at the political level, it will be a difficult subject to revisit -- but it's easier to revisit it now than to live with it until the end of time, which may be the earliest that the proposed system can expect to be changed once it has been put into operation. Other substantive points are more technical, as enthusiastic readers will see if they care to peruse Sections 15 and 17 of the Concerns of Principle paper.  
  • The drafting of the Draft is none too felicitous, since many bits of it are in need of clarification. The sub-group's marked-up copy testifies to this, since it bears over 100 corrections or amendments: a sure indication of the fact that there is still a lot to do.

  • Costs, costs, costs ... Those silly litigants will keep ask about them.  Does it really matter to them? Surely not. Can't they see that it doesn't matter how much it will cost them, so long as they remember that the Unified Patent Court is the most politically expedient compromise that money can buy? On a less emotive note, a complaint that is made about many national systems, including that of England and Wales, is that patent litigation is too expensive. A related complaint is that it is often difficult to gain a reliable notion of how much it is likely to cost.. Patent litigation is an exercise in risk management, and this requires more guidance about the likely cost, but there is frustratingly little clarity on this topic. While it might be unrealistic to start with a consideration of what litigants are prepared to spend and then work backwards towards a system that literally fits the bill, the exercise would help draw attention to the importance of adequate provisions for costs.

  • The provisions giving the Unified Patent Court exclusive jurisdiction over European patents, which you will find in Articles 3 and 58, have struck fear into the heart of many a robust corporation. Not every litigant is happy to risk its very existence in an untried and untested court, untrammeled by practice and precedent, and the case in favour of extending the ability to opt out is strong.  Also, there is an old saying that the proof of the pudding is in the eating.  If the court is good, it will be used. If it is not, one should not be forced to use it -- a point made in Section 5 of the Concerns of Principle.
The IPKat is convinced that the sub-group's work proves convincingly that a large number of issues need to be addressed and reiterates that the mere fact that this means reopening issues that many would see as agreed is no reason for not addressing them.  To do so otherwise would be analogous to refusing to check the map when you're heading in the wrong direction because you've achieved prior consensus as to which was the right road to take.  Merpel bets that there must be other countries whose patent experts are having, or have had, similar thoughts, and she hopes that they will make their anxieties and their preferences known too.

The IPKat's favourite means of resolving disputes:
much cheaper than litigation; much quicker too --
and a lot more fun! (Photo by Cathcat).
While some folk may maintain that the occasionally irreverent and sometimes humorous comments made by a pair of fictional Kats do not deserve to be taken seriously, this blog urges readers not to confuse the medium with the message.  The Unified Patent Court is an important project with potentially almost unimaginably important consequences for Europe's hard-pressed economies, innovative industries and manufacturing sectors.  It has taken Europe several centuries of organic evolution to develop the system which we have today, centuries of trial and error, experiment and improvement, measured and deliberate thought and a shared sense of what it is we are trying to achieve. Let us not throw it all away in a matter of months for the sake of speed, a frail, vulnerable and beautiful ideal sacrificed on the altar of expediency.

Autumn a golden season for Interflora

Pumpkin by Flowers by Walter
As summer gives way to autumn and the golden leaves tumble, the prettiest flowers are those that come the florists -- which brings the IPKat on to today's decision in Case C-323/09 Interflora Inc and Interflora British Unit v Marks & Spencer plc and Flowers Direct Online Limited, a reference to the Court of the European Union (ECJ) for a preliminary ruling from the High Court of Justice of England and Wales.

Essentially, the problem here was that Marks & Spencer bought the word 'interflora' as a keyword for Google's AdWord paid referencing service, so that people who were looking for the world-famous Interflora flower delivery service would find an advertisement for Marks & Spencer's rival service at the top of the non-organic, paid-for search results. This did not make Interflora very happy since (i) they were proprietors of the hugely famous INTERFLORA trade mark, (ii) internet users who keyed in "interflora" as a search term were obviously looking for their website and not Marks & Spencer and (iii) worst of all, this was just before the onset of St Valentine's Day, which is one of the biggest events of the year for the flower trade. This just had to be trade mark infringement, said Interflora. The ECJ's ruling in Google France that neither the sale nor the use of terms protected by trade marks as keywords constituted a per se trade mark infringement didn't help them -- but that was a "5(1)(a)" case, where same goods/same mark (double identity) infringement was alleged. Here Interflora had a '5(2)' argument, based on a use which allegedly damaged the mark's reputation or distinctive character without due cause.

The trial judge, Mr Justice Arnold, painstakingly analysed both the relevant law and the facts, before referring a raft of ten questions for preliminary rulings. Following some helpful correspondence between the referring judge and the ECJ's registry, the ten questions were pruned down and clarified to a miserly four.

Today the Court of Justice ruled as follows:
"1. Article 5(1)(a) of ... Council Directive 89/104 ... and Article 9(1)(a) of Council Regulation ... 40/94 ... must be interpreted as meaning that the proprietor of a trade mark is entitled to prevent a competitor from advertising – on the basis of a keyword which is identical with the trade mark and which has been selected in an internet referencing service by the competitor without the proprietor’s consent – goods or services identical with those for which that mark is registered, where that use is liable to have an adverse effect on one of the functions [which raises the interesting question of how many functions a trade mark has. The Court has identified four by name, but it was reported last week in the MARQUES conference that up to 17 have been identified] of the trade mark. Such use:

– adversely affects the trade mark’s function of indicating origin where the advertising displayed on the basis of that keyword does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods or services concerned by the advertisement originate from the proprietor of the trade mark or an undertaking economically linked to that proprietor or, on the contrary, originate from a third party;

– does not adversely affect, in the context of an internet referencing service having the characteristics of the service at issue in the main proceedings, the trade mark’s advertising function; and

– adversely affects the trade mark’s investment function if it substantially interferes with the proprietor’s use of its trade mark to acquire or preserve a reputation capable of attracting consumers and retaining their loyalty.

2. Article 5(2) of Directive 89/104 and Article 9(1)(c) of Regulation No 40/94 must be interpreted as meaning that the proprietor of a trade mark with a reputation is entitled to prevent a competitor from advertising on the basis of a keyword corresponding to that trade mark, which the competitor has, without the proprietor’s consent, selected in an internet referencing service, where the competitor thereby takes unfair advantage of the distinctive character or repute of the trade mark (free-riding) or where the advertising is detrimental to that distinctive character (dilution) or to that repute (tarnishment).[this looks like good news for Interflora ...]

Advertising on the basis of such a keyword is detrimental to the distinctive character of a trade mark with a reputation (dilution) if, for example, it contributes to turning that trade mark into a generic term.["for example"opens the door to a large categories of actually or arguably genericising uses. This will be a litigation growth area, predicts Merpel]

By contrast, the proprietor of a trade mark with a reputation is not entitled to prevent, inter alia, advertisements displayed by competitors on the basis of keywords corresponding to that trade mark, which put forward – without offering a mere imitation of the goods or services of the proprietor of that trade mark, without causing dilution or tarnishment and without, moreover, adversely affecting the functions of the trade mark with a reputation – an alternative to the goods or services of the proprietor of that mark". [while this is expressed as a general principle, the Kat thinks that, in practice, it will become a narrow exception].
This IPKat team member is going to give this some further thought to this ruling and test it out a bit over a refreshing pint of Badger when the opportunity arises. In the meantime, he's quite struck with the relatively intelligible mode of expression of the Court's ruling which seems to him, prima facie, to be about as good as we can hope for when applying twentieth-century pre-internet trade mark legislation to a set of facts that is not provided for by the Directive and Regulation and which is scarcely within the radar of the Recitals.

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