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

Monday, 24 October 2016

Court of Appeal on Pregabalin - Pfizer still in pain, but Swiss claims re-interpreted again

While this moggy was struggling to get back from Indonesia, the Court of Appeal handed down its decision in the pregabalin appeal Warner-Lambert Company LLC v Generics (UK) Ltd (t/a Mylan) & Ors [2016] EWCA Civ 1006 (13 October 2016), and finally the IPKat has managed to blog about it (the lateness by no means reflecting on the importance of the judgment).

It is very much a judgment of three halves.

In the first part of the judgment (up to [135]), which substantively disposes of the case, Lord Justice Floyd (with whom Lord Justic Kitchin and Lord Justice Patten agreed) upheld the decision of Mr Justice Arnold on the validity of the patent.  Arnold J had considered that the claims of the patent that were alleged to be infringed were insufficient, and in particular claim 3 directed towards use of pregabalin for neuropathic pain, because the patent did not render it plausible that pregabalin would be effective at treating central neuropathic pain, only peripheral neuropathic pain.  Floyd LJ agreed with Arnold J's construction of the claims, and rejected the challenge to the finding that claim 3 was not plausible across its breadth.

On the other hand, Floyd LJ also rejected a cross-appeal from Mylan and Actavis challenging the finding that the patent did make a plausible claim that pregabalin was effective to treat peripheral neuropathic pain (that is, seeking to widen the scope of the finding of invalidity of the patent).  Thus, the first instance judgment on validity was completely upheld.

The second part of the judgment, which procedurally disposes of the case (subject to any appeal to the Supreme Court, which Pfizer is reportedly seeking) relates to the refusal to allow Warner-Lambert (the patentee and Pfizer subsidiary) the opportunity to amend claim 3 after the end of the trial.  Arnold J considered that this was an abuse of process.  After a detailed analysis, Floyd LJ concluded "I therefore do not consider that there is any basis for this court to interfere with the judge's evaluation on the issue of abuse of process."

Then we come to the third part of the judgment, relating to infringement.  Merpel gleefully reminds the IPKat that this part of the decision is strictly obiter and therefore non-binding (since the findings on validity and abuse of process make the infringement issue moot), but only a fool would disregard it.  Moreover, this is really where it starts to get interesting.

In the Court of Appeal decision relating to interim relief before the main trial before Arnold J, Floyd LJ had examined the proper interpretation of Swiss-form, second medical use claims (the present judgment states that this was at the behest of the parties: "The court was invited by both parties at that stage to decide the issue of law so that the parties knew where they stood for the purposes of the trial").  The problem was, the parties disagreed on what was the test that the Court of Appeal had laid down.  At the first instance interim proceedings, faced with a choice of foreseeability and intention, Arnold J had in his substantive decision in the case plumped for the latter:  for a Swiss form claim to be infringed, it had to be not just foreseeable to the manufacturer that his product would be used for the claimed indication, but the manufacturer had to actively intend (or, as Arnold J put it "subjectively intend") that it be so used.  The Court of Appeal judgment had referred to both foreseeability and intention, and Arnold J thought the test laid down by the Court of Appeal was that it had to be foreseeable to the manufacturer that this product would be intentionally administered for the claimed indication, the intention coming from a doctor, or, under rare circumstances, a pharmacist.

It now turns out that when referring to "intention" in the earlier judgment, Floyd LJ had not meant what Arnold J understood, but rather a much narrower sense that: "Intentional use is to be distinguished from use where the drug is prescribed for a different indication and, without it in any sense being the intention of the treatment, a pain condition is in fact treated."  Thus, unsurprisingly in the present judgment, Floyd LJ thought that "the judge [Arnold J] fell into error in seeking to dissect the requirement for intentional treatment of pain in this way".  Instead, for a Swiss form claim to be infringed "it is only essential that the manufacturer is able to foresee that there will be intentional use for the new medical indication" (where "intentional use" has the meaning just stated).

Thus, Floyd LJ has now clearly laid down a test which is close to the pure "foreseeability" test that Warner-Lambert originally contended for:

The issue which the judge was called upon to decide was whether Actavis knew or could foresee that at least some of the prescriptions written generically for pregabalin to treat pain would in fact be fulfilled with Lecaent. Had Warner-Lambert succeeded in upholding valid claims on which they relied for infringement, it would then have been necessary to decide whether, at any of the various dates analysed by the judge, that test of knowledge or foresight was satisfied. If so the judge should have gone on to consider whether Actavis had taken all reasonable steps in their power to prevent Lecaent from being used to treat pain.

Moreover, and very helpfully, he has also laid down what kind of steps taken by the generic manufacturer would be sufficient to be the "reasonable steps" (in the last sentence just quoted) required to prevent liability for infringement|:

If that is the basic test to be adopted, what is sufficient to negative the existence of intention? In my judgment the absence of the patented indication from the label cannot conceivably be sufficient to negative the intention. ...
Viewed in this way I think the answer becomes clear. The intention will be negatived where the manufacturer has taken all reasonable steps within his power to prevent the consequences occurring. In such circumstances his true objective is a lawful one, and one would be entitled to say that the foreseen consequences were not intended, but were an unintended incident of his otherwise lawful activity. 

This Kat is a little disappointed that the judgment refers to the judge falling into error with no apparent acknowledgement that the source of the error is in fact the lack of a clear test being laid down in the earlier Court of Appeal judgment.  However, a clear exposition of what the Court of Appeal regards as the correct test is most welcome, and the IPKat eagerly awaits a case in which it can be applied.

Sunday, 23 October 2016

Around the IPKat’s Cousins Blogs

This InternKat brings you some highlights of the IPKat’s cousins blogs!

Ben Challis reports on The 1709 Blog on a number of items, including the expected sentencing next month by the Liverpool Crown Court in the Wayne Evans case; publication by The Music Managers Forum of the ‘Dissecting the Digital Part 2’ report; the request for Comments by the US Copyright about researching and repairing software-enabled devices; and the victory by Kanye West, Jay Z and Frank Ocean in a copyright infringement lawsuit filed by songwriter Joel McDonald.

with copyright, Patricia Covarrubias blogged in IP tango about measures taken by the Peruvian National Institute for the Defence of Competition and Intellectual Property Protection (INDECOPI) for enhancing authors rights. Moving to trademarks, the blog also covered the INTA announcement about the opening in 2017 of the Latin America representative office in Santiago (Chile).

Over at MARQUES Class 46, the blog discusses the judgment in the Gucci v. Guess saga, where the General Court upheld the findings of the Board of Appeals. More about trademarks on SOLO IP, where Barbara Cookson described the tough life of the Solicitor mark in York.

Moving to the economic field, the IP Finance blog has recently brought a summary by former GuestKat Mike Mireles (Hat Tip to Professor Paul Caron's Tax Prof Blog) about the California Legislative Analyst Office report on how much subsidies have really affected movie activity in California, and IPKat Neil Wilkof's ruminations on the challenges of building fashion brands online, focusing on the European company Zalando.

On IP enforcement issues, Amanda Lotheringen blogged on Afro-IP about the launch of the “South African Training Manual on Investigation and Prosecuting IP Crime for Senior Law Enforcement”. South Africa is the first Member State that has adopted a customised version of the WIPO manual on this topic. Finally, on The SPC Blog, Rob Stephen discussed the UKIPO decision regarding the Supplementary Protection Certificate (SPC) sought for the nab paclitaxel.

With free trade and globalization under attack, can IP licensing come to the rescue?

Whatever one’s view about globalization and free trade (dislocation of jobs, social and economic inequality and loss of sovereignty, not to
mention free movement and immigration), one cannot deny that more and more skepticism is being expressed, from the Brexit vote to the US Presidential candidates and so on. If the overarching trend since the 1950’s has been towards institutional integration, the current winds are casting doubt on this tendency. The question arises: how might this affect IP?

The justification for IP focuses on lofty notions such as creating the proper incentives for creation and invention. But let’s not kid ourselves: IP became mainstream while globalization and free trade were taking hold as instruments in fostering economic growth, roughly from the 1980’s. Many IP practitioners are probably too young to remember that this was not always so. In those antediluvian days, IP protection was viewed with skepticism on both sides of the Atlantic; there was wide-spread hostility to patents based on competition law grounds, while trademarks were viewed as a manipulative tool to create otherwise unnecessary consumer desires. For the most part, IP was a backwater legal area, at best a quirky niche practice.

The linkage of IP with the rise of globalization and free trade changed all of that. IP became valuable because it was seen as generating ever-greater commercial value, enhanced by the international reach of IP. There was a wide-spread tendency to view IP and global trade as two sides of a single, inevitable coin, even if the two are not necessarily one and the same. As Professor Matthew Kennedy graphically observed in the context of the TRIPS agreement, negotiating and implementing an IP agreement within the framework of a “multilateral trading system [is] like a cuckoo’s egg laid and hatched in the nest of another species” (p.1). Assuming arguendo declining support for globalization and free trade, this Kat can imagine three different ways to view the future relationship between them, depending upon whether one believes that the relationship between IP and globalization/free grade is coincidental or causal:

1. IP will be unaffected—The rise in the role of IP while globalization and free trade took hold was merely coincidental. The factors that propelled IP forward in the 1980’s were driven more by the transformation from an industrial to a post-industrial world, where intangible assets are increasingly important. Whatever the ebb and flow of globalization and free trade, this transformation will continue. As such, IP will continue to flourish.

2. IP will be disfavored as having been a major contributor—Here, IP is viewed as having a deleterious causal connection. To the extent that IP favors those who take advantage of the knowledge economy and facilitates replacing labor with capital in production, it can be accused as having contributed to the dislocation of workers and increasing income disparity. Accordingly, there is little reason to strengthen IP protection.

3. IP will be swept up as a bi-product of the hostility—Even if IP is not held directly accountable, it will still be affected by the general hostility to internationalism in the form of globalization and free trade. Here, as well, there will be no reason to strengthen IP protection, if all that that such measures do is to enhance the very factors that are under attack.

Even if the optimistic scenario outlined in (1) above comes to pass, one cannot ignore data that indicate a material slowing in world trade. This suggests a decline in the width and breadth of global supply chains and a potentially increasing focus on national, as opposed to trans-national commercial activity, here. If so, as applied to IP, will this mean more, or less, IP activity? The more instinctive response is to argue for less as a natural outcome of less trade. Multi-national patent or trademark protection may be less essential if there are diminished opportunities for trade in protected products across borders.

But perhaps there is a counter scenario. Unlike the situation before 1980, many more countries outside of North America and Europe can claim an increasing middle class. If a decrease in the scope of world trade does not allow satisfying them in the current manner, it does not mean that such needs cannot be met otherwise. One such way might be by import substitution, but another is via increased licensing of IP rights to exploit local potentials and capacities. Should this come to pass, perhaps scenario (1) described above will be the more likely one, after all.

The new French law targeting "automated image referencing services": does EU law allow it?

Image Search for IPKat
As reported by this blog [herehere and here], earlier this year France adopted a law [Loi No 2016-925 on freedom of creation, architecture and cultural heritage] which - among other things - introduced new provisions [Articles L 136-1 to 136-4] into the Code de la propriété intellectuelle (CPI) to regulate the exercise of the exclusive rights of reproduction and representation vis-à-vis automated image referencing services. 

The content of the new provisions

As explained by Brad Spitz in a post published on the Kluwer Copyright Blog, "the new provisions will apply to ‘automated image search services’, which Article L.136-1 IPC defines as any online public communication service that reproduces and makes available to the public for purposes of indexing and SEO, plastic, graphic or photographic works, collected in an automated way from online public communication services (i.e. internet websites). In other words, these provisions target search engine services like Google Images."

Spitz also adds that Article L.136-1 IPC specifies that the images have to be ‘reproduced and made available’ by the image search services. This suggests that an act of reproduction is needed in order to trigger the entire mechanism envisaged by Loi No 2016-925. Lacking reproduction, no permission would be needed.

But: permission from whom? Article 136-2(1) CPI answers that, by saying that the publication of a plastic artwork, graphic or photographic work by an online communication service will be now subject to the consent - not of authors - but rather one or more collecting societies appointed to this end by the French Ministry of Culture.

Readers will remember that on this blog I have already expressed some doubts regarding the compatibility of this new legislative initiative with EU law. In particular, three main questions come to my mind once again.

1) A deprivation of rights?

The first question is whether a mechanism by which relevant authors are ab initio deprived of their right to authorise or prohibit the reproduction and making available of their works through online referencing systems [appointed collecting societies will instead have such right] is in line with EU copyright law, notably the InfoSoc Directive.

Collecting societies are not included among relevant categories of rightholders in this piece of EU legislation. Further to the decision of the Court of Justice of the European Union (CJEU) in Reprobel [here], it is questionable whether such a departure from the so called author principle is allowed by the InfoSoc Directive [and France may not be the only instance ...].

This conclusion is strengthened by the Opinion of Advocate General (AG) Wathelet [here] in the pending reference in Soulier [the decision is due in a few weeks' time, 16 November 2016]. The AG stated [paras 38-39, emphasis added] that: 

Were you thinking of doing as you please?
"Article 2(a) and Article 3(1) of Directive 2001/29 require the prior express consent of the author for any reproduction or communication to the public of his work, including in digital format. That consent constitutes an essential prerogative of authors.
In the absence of any derogating EU legislation, the author’s express and prior consent for the reproduction or communication to the public of his work cannot be eliminated, assumed or limited by substituting it with tacit consent or a presumed transfer which the author must oppose within a fixed time limit and in accordance with conditions laid down by national law. It follows that national legislation like the decree at issue, which replaces the author’s express and prior consent with tacit consent or a presumption of consent, deprives the author of an essential element of his intellectual property rights."

It follows that, by depriving authors of their ability to authorise the making of acts of reproduction/communication to the public, French legislature might have gone against what is allowed under EU law.

In addition - further to the CJEU decision in Luksan [here; what was at stake here was an Austrian law that - in contrast with EU law - failed to recognise film directors as first copyright owners] - it is arguable that by vesting ab initio collecting societies with the rights to exploit copyright works France might have deprived authors of their fundamental right to (intellectual) property, as expressly protected instead under Article 17(2) of the Charter of Fundamental Rights of the European Union.

2) A re-design of liability rules?

The second question also relates to the compatibility with existing CJEU jurisprudence. 

Even if the French law requires the making of both an act of reproduction and and an act of communication to the public to fall within its scope of application, it appears to assume that an automated image referencing service:
  • is primarily responsible for the making of acts of reproduction and communication to the public; and
  • in any case, is not eligible for the safe harbour protection in the Ecommerce Directive.
Under the existing EU framework, it may be questionable whether such approach is correct. 

With particular regard to the notion of communication to the public, while it has taken the CJEU several judgments to try and make sense of this notion, as of today it is unclear whether an online referencing service can be considered as making acts of communication to the public itself. 

In the recent GS Media decision [discussed herehereherehere], the CJEU confirmed that if one construes communication as merely requiring the making available of a work, ie without the need for any actual transmission, then what needs to be considered is "the indispensable role played by the user and the deliberate nature of its intervention. The user makes an act of communication when it intervenes, in full knowledge of the consequences of its action, to give access to a protected work to its customers, and does so, in particular, where, in the absence of that intervention, its customers would not, in principle, be able to enjoy the ... work" [para 35]

One could wonder whether in the case of an online referencing service, it is this or rather the creators of the websites indexed  (or, in any case, third parties) that play such indispensable role to give access to protected works [as noted here, a similar approach seems to have been (correctly?) taken also by the EU Commission in its recently proposed directive on copyright in the Digital Single Market in relation to the so called 'value gap'].

Another model notification
under Directive 2015/1535
As I noted here, in light of certain decisions of the CJEU and national courts alike, it may be argued that – in the case of a copyright work made available through the service of a passive online intermediary – the latter would not commit an act of (unauthorised) communication to the public (potentially giving rise to primary liability for copyright infringement), because the role that is ‘indispensable’ in the whole process is the one of the third-party/uploader, rather than that of the intermediary. 

3) Why French Government did not notify the EU Commission?

Finally, Directive 2015/1535 requires Member States to notify the EU Commission of any draft technical regulation targeting information society services. The reason, as explained at Recital 4 of the directive, is that "[b]arriers to trade resulting from technical regulations relating to products may be allowed only where they are necessary in order to meet essential requirements and have an objective in the public interest of which they constitute the main guarantee."

By looking at the relevant Commission's database, it seems that this has not happened for Loi No 2016-925 at the draft stage. The only notification I have been able to find relates to the draft decree implementing Articles L-136.3 and L 136.4 IPC.

What could the implications of this missed notification be? 

The answer might be 'inapplicability' of relevant provisions. The CJEU clarified that this would be the effect of the failure by a Member State to notify draft technical regulations before they are adopted in its 1996 decision in CIA Security, and confirmed this in its 2000 Unilever judgment.

Something along these lines has been also suggested in relation to the German and Spanish initiatives on so called 'ancillary copyright' for press publishers [see B Vesterdorf (2015), ‘The effect of failure to notify the Spanish and German ancillary copyright laws’ 37(5) EIPR 263]

Ultimately, the right of appointed collecting societies to license the reproduction and making available of images via automated image referencing services could be unenforceable. So automated image referencing services might not have to secure a licence after all.

In conclusion ...

... It seems that the path to royalties is paved with a number of potential obstacles. As anticipated by Spitz in his blog post, it is indeed likely that "[t]here will be long discussions and probably lawsuits before some royalties result from these new provisions."

But what do readers think?

Saturday, 22 October 2016

Unauthorised communication to the public in an online environment as a criminal offence in the UK?

"The UK’s digital economy is growing fast and digital technology is transforming every sector and all aspects of our lives. If the UK is to remain ahead and be a world leader in the digital economy we need to continue to raise our ambition".

With these words, on 5 July last UK Government justified the introduction in the House of Commons of the Digital Economy Bill 2016 [currently at the Committee stage], ie a series of measures to:

·             empower consumers and provide better connectivity so that everyone has access to broadband wherever they live;
·             build a better infrastructure fit for the digital future;
·             enable better public services using digital technologies;
·             provide important protections for citizens from spam email and nuisance calls and protect children from online pornography.

The Bill also contains measures in the area of intellectual property. 

Of particular interest is clause 26 on "infringing copyright and making available right" [isn't the making available right one of the rights granted by copyright?] and targeting online copyright infringements. In particular the second paragraph proposes to amend the current wording of section 107(2A) of the Copyright, Designs and Patents Act 1988 (CDPA):

“In section 107 (criminal liability for making or dealing with infringing articles, etc), for subsection (2A) substitute—
“(2A)A person (“P”) who infringes copyright in a work by communicating the work to the public commits an offence if P—
(a)knows or has reason to believe that P is infringing copyright in the work, and
(i)intends to make a gain for P or another person, or
(ii)knows or has reason to believe that communicating the work to the public will cause loss to the owner of the copyright, or will expose the owner of the copyright to a risk of loss.
(2B)For the purposes of subsection (2A)—
(a)“gain” and “loss”—
(i)extend only to gain or loss in money, and
(ii)include any such gain or loss whether temporary or permanent, and
(b)“loss” includes a loss by not getting what one might get.””

Translated: an unauthorised act of communication to the public in an online environment might be a criminal offence in the UK. How?

A UK-based copyright academic [who wishes to remain anonymous] explains it all.

Here’s what he/she writes:

I have been trying to think through the change made to section 107(2A) by the Digital Economy Bill 2016.

Section 107(2A)

Section 107(2A) Copyright, Designs and Patents Act 1988 currently states:

"A person who infringes copyright in a work by communicating the work to the public—
(a) in the course of a business, or
(b) otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright,
commits an offence if he knows or has reason to believe that, by doing so, he is infringing copyright in that work."

There is very little authority on the meaning of the phrase “to such an extent as to affect prejudicially the owner “.

Copinger (17th ed), [22-18], p 1626, n 94 cites the Hong Kong case of Hksar v Chan Nai Mang (2005), in which it was held that the meaning of “affect prejudicially” was wide in scope and not necessarily restricted to economic prejudice, although that was the obvious area at which the section was directed. The correct analysis was that the infringer must have intended to distribute much more widely than to one downloader, and thus his acts amounted to an attempt to distribute to such an extent as to affect prejudicially the copyright owner.

Laddie et al (5th), [20.26], p 823, referring to the phrase in section 23(d) of the CDPA, calls it “a sweeping up provision which would appear to cover most forms of handling of infringing copies not covered elsewhere.” Referring to the same provision, Copinger (17th ed), [8-15] 689 states: “It is not, however, easy to imagine a case in which distribution is neither in the course of trade or business nor prejudicial to the owner of the copyright, except perhaps where only a few copies are distributed to persons who would never have bought the work anyway.”

The current law: summary

Overall, one might conclude that on the existing law:

(i)     Prejudice to the owner is part of the actus reus (that is, the objective conditions for the offence rather than the mental state – mens rea - of the offender);
(ii)    Prejudice need not necessarily be economic;
(iii)   It can be direct as well as indirect;
(iv)    It is not an onerous standard;
(v)     It might require more than distribution or communication to one or two person, but once the number is in the 20s or 30s, it seems, one can assumed prejudicial effect (through loss of sales).

Actus reus ...
Clause 26 of the Digital Economy Bill 2016

Clause 26 of the Digital Economy Bill 2016 proposes to amend this. The definitions of gain and loss seem to derive from section 5 of the Fraud Act 2006 (though restricted in clause 26).

a.      Broadening the actus reus

As before, there must be a communication to the public. There is no longer a requirement that the communication be in the course of business, or that there be a prejudicial effect. Instead, the new provision offers a narrowing of the mental (mens rea) requirement.
b.      Narrowing the offence: the mens rea element

The proposed clause would also narrow the scope of the offence by elaborating the mens rea requirement. If enacted, this requires not just (as now) that the alleged offender knows or has reason to believe there is copyright infringement, but also that he she (i) intends to make a gain or (ii) knows or has reason to believe that the act will cause a loss or expose the owner to a risk of loss.

It seems that “intends to make a gain for [himself] or another person” is regarded as approximating to the previous condition that the act be “in the course of business.” Thus, for example, a publican who, without a licence, shows a broadcast of a football game to its customers doubtless does so with intent to gain (attracting customers, increasing sales).  A more difficult example is a lecturer who includes unlicensed images (falling outside the CLA/DACS licence) on its “slides”. Here there is a communication “in the course of business” (under existing law), but whether it can be said to be with an intent to make a gain is more difficult. There is no monetary gain for the lecturer, and probably not in any real sense for the employer, the University. So this might be an example where the changed language brings about a sensible redefinition.

However, private actors not acting as business people might intend to make some sort of gain, and thus now be caught within the criminal regime. One example might be uploading to a platform  a sound recording that infringes copyright by employing a “sample” where some small portion of the platform’s advertising revenue will be paid to the uploader. One might wonder whether posting user-generated content should be so easily categorised as a criminal offence. Another example might be a person who establishes a blog and includes unlicensed images reproduced from sites elsewhere on the Internet. As long as the “gain” they are hoping for is reputational, then there is no criminal act (under this head). However, if in due course they hope to sell the blog, it might be that there is the relevant “intent to gain.”

The loss component of the offence can also be unpacked. A Defendant will be liable where he/she

knows the act will cause a loss;
has reason to believe the act will cause a loss;
knows the act will expose the owner to a risk of loss;
has reason to believe the act will expose the owner to a risk of loss.

So the broadest of the circumstances in which a Defendant will be liable is where he/she communicates the work to the public, (i) having reason to believe that this act infringes copyright and (ii) having reason to believe the act will expose the owner, P, to a risk of loss by P not getting what P might get (even if only temporarily).

If a Defendant knows, or has reason to believe, that the act (communication to the public) will mean that a single person, who would have purchased a copy of the work (or access to it, for example, through an Internet stream), will not do so (for example, because they can and will now download a copy, or because having read the work or seen the images, they no longer would want to access it), it seems to follow that said Defendant has reason to believe the infringing act will cause a loss. Equally,creating a hyperlink to material that is normally subject to conditional access by payment would cause loss in the relevant sense.

If a Defendant knows, or has reason to believe, that the act (communication to the public) could be licensed, and that licence would involve payment, then it also seems to follow that said Defendant has reason to believe the infringing act will cause a loss. One example might be playing music at a garden fete, knowing that a licensing scheme is operated by the PRS, and thus not obtaining a licence has cause loss to the copyright owner.

If a Defendant knows, or has reason to believe, that the act (communication to the
A case in which the mens rea is self-evident
public) could be licensed to others, and that such a licence would involve payment, but that Defendant’s use will mean that such a licence will not occur, then it also seems to follow that said Defendant has reason to believe the infringing act will cause a loss. One example might be including a photograph on a blog, knowing that photographer’s obtain remuneration for authorising use of photographs on a basis that the licensee has “exclusivity”, and this will not be possible after the photograph has featured on a blog.

c.      Mens rea v prejudicial effect

While the differences between the existing law and the proposed law are rather subtle, ultimatey the effect of the new clause will be mostly to broaden the scope of criminal liability:

(i)     It clearly broadens the offence by replacing requirement of use in the course of business with one of intent to make (financial) gain;
(ii)    It clearly broadens the concept of “prejudicial effect” to include any financial loss (whereas under the existing law it is conceivable that trivial levels of financial loss might not have amounted to a “prejudicial effect”);
(iii)   It extends the breadth of “effect” to include "risk of loss".

However, the new clause narrows criminal liability in three respects:

(i)     In so far as some uses in the course of business might not have involved and “intent to gain”;
(ii)    By replacing prejudicial effect with losses in terms of money, it excludes from consideration non-monetary losses (eg losses of privacy);
(iii)   It adds a new mental (“mens rea”) element with respect to the gain/loss in question, which makes liability dependent not merely on the likelihood of loss (the provision in fact seems to contemplate that such loss is certain – it “will” occur), but on an appreciation of the certainty of such loss by the Defendants. In some situations, this might mean that the Defendant would need to know about the relevant licensing arrangements, at least at a general level. A Defendant who downloads and posts an image on a blog might well be able to argue that it appreciated this was a technical infringement of copyright, but did not believe, and had no reason to believe, it would cause any loss (for example because the image had already circulated widely on the Internet).

d.      Other objections

It might be wondered what is hoped to be achieved by this change. Certainly, the existing requirement that the communication “affect prejudicially” the right-holder is not a model of clarity, and the change will bring the terms of the subsection into line with other areas of criminal law such as the Fraud Act. However, if clarity and consistency are the goals, one might wonder why the same  language, “affect prejudicially,” is to be left in CDPA s 23(d), s 107(1)(e), 296ZB(1)(d), all in relation to distribution of copies. It seems strange to change this just for s 107(2a)(b) and s 198(1A)(b).

Moreover, in so far as the change substantially broadens criminal liability, one might question how far this represents good policy. Shouldn’t criminal liability (leading potentially to a 10 year prison sentence) be targeted at the obvious wrongdoers – the Kim Dotcoms, Megauploads and The Pirate Bays of the Internet-world? The criminal law, it should be remembered, can be deployed by way of private prosecution, so can become a very significant weapon in the hands of those involved in “speculative invoicing” or similar forms of harassment. Where prosecutions are launched (rather than threatened), the Crown Prosecution Service can in some circumstances take over the prosecution and discontinue proceedings, but there is no system in place for ensuring this occurs.  Perhaps the solution would be to abandon the slippery notion of “prejudice” with the more concrete notion of “loss” and “gain”, but to introduce a threshold, for example, a requirement that any loss/gain is 'commercially substantial' or ‘on a commercial scale’ to clarify that the criminal law is not to be used as a weapon with which to harass those committing trivial acts of infringement.”

Friday, 21 October 2016

Friday Fantasies

Friday Kat is at play.
TGIF! The weekend is almost underway and the IPKat is here to bring you a well-chosen list of miscellaneous IP events and news stories. Bon appetit.

1. The 10th Annual Standards, Patents & Competition: Law & Litigation, organized by IBC Legal will take place in London on 5-7 December 2016. Enjoy the 10% discount for IPKat readers (code: FKW82676IPKL).

2. James Thomson from the UKIPO brings us his frontline updates: International Trade Mark Applications can now be sent to the UKIPO using the email address: (this is an interim measure, and an e-filing system will be introduced soon). 
He asks that readers note:
• We would encourage you to use the UKIPO version of the MM2
• The MM17/MM18 will be accepted if filed with the MM2.
• No other forms or correspondence should be emailed to this address.
• An updated version of the UKIPO’s form MM2 can be found here

3. New book: Low Life Lawyer, a new novel penned by former solicitor Michael Simmons and inspired by his lengthy (50+ years) legal career has been published. To quote His Honour Judge Barrington Black, it is “a book to be enjoyed by lawyers and their prey alike”. A detailed book guide can be found here. 

4. Open consultation: Review of European Electronic Communications Regulatory Framework. Launched by the Department for Culture, Media & Sport (UK). This consultation closes at Nov. 30, 2016 11:30pm. Ways to respond are as follows:
Email to:
Write to: 
EU Framework Review, Markets and Consumer Policy Team
Department for Culture, Media & Sport, 100 Parliament Street, London

The event and all documentation will be in English and Estonian with simultaneous interpretation.

6. Brexit: FRAND, pharmaceuticals & intellectual property. Tuesday 1st November 2016 at the Law Society, 113 Chancery Lane, London WC2A 1PL, from 6pm.
This free event aims to bring together a range of perspectives to explore some of the key issues which Brexit will raise including in relation to the Unified Patent Court, trade marks and designs and SPCs. The presentations will seek to provide some practical guidance as to the likely implications and steps which can or should be taken now.
It is a Q&A style seminar moderated by Lord Hoffmann with a panel comprising with outstanding speakers. To register, please contact Andrew Grosvenor at or 020 7379 3550.

7. CopyCamp 2016: International conference on the future of copyright in Europe Oct. 27-28, 2016. The conference will be held at Kinoteka in Warsaw, Poland over Thursday and Friday and will be also streamed online. 

8. Dr. Eleonora Rosati has recently been interviewed by The Hollywood Reporter, addressing the IP issues facing protection of TV formats.

9. Brands in the digital market: seminar organized by BBP University Intellectual Property Society is coming soon. Save the date: Nov. 10, 2016.

10. Sick and tired of the refusals issued by the USPTO? For a possible remedy visit the Class 46 (trade marks) blog hosted by MARQUES, discussing a forthcoming seminar to cover both legal and procedural issues, as well as explaining the tools available, and which is designed to help applicants overcome objections when filing International Registrations based on the home application or registration. The class will be hosted in three versions:
- Amsterdam, The Netherlands, Monday, 24 October 2016
- Munich, Germany, Wednesday, 26 October 2016
- London, UK, Friday, 28 October 2016 

Meet the Trade Mark Judges (Part One)

Monday evening marked the annual IBIL and MARQUES Meet the Trade Mark Judges event at UCL.

This year the chair, The Rt Hon Professor Sir Robin Jacob, posed a set of pre-selected questions from the audience to:
  1. Paolo Catallozzi (Judge of the Enterprise Court of Rome) 
  2. The Hon Mr Justice Henry Carr (Judge of the English High Court) 
  3. Judge Christopher Vajda (Court of Justice of the European Union) 
  4. Oliver Morris (UK Intellectual Property Office Senior Hearing Officer) 
The evening covered enough ground to fill (at least) two posts.  This is Part One...

How much does advocacy play a part in judges reaching their decision? 

Not a new question but an understandably popular one for a room full of lawyers.  The broad consensus was that it can be very helpful to the judge to have good advocates but it's rare that it swings a decision one way or another.

Selected soundbites include:
  • If a party is in the right they have many chances to win even if their lawyer is not as good. 
  • Judges are not distracted by legal style... but when a famous lawyer is speaking a judge may unconsciously pay more attention.  
  • If there is no established jurisprudence it can be particularly helpful to be guided through the relevant steps the court is required to follow (and may avoid judges getting bored!)    
  • Whilst the English bar has a very good reputation in the Court of Justice of the European Union (CJEU), it does not follow that they always win the case!  
  • In the Intellectual Property Office (IPO), an advocate's style can make a particular difference where a case is finely balanced. 
  • A good advocate is unlikely to win a bad case but a bad advocate may lose a good one.
The view from the High Court of England and Wales was particularly pro-advocacy.  Carr J noted that the importance of advocacy was most noticeable where you have litigants in person without any professional legal input.  He gave the CLIPS scheme a glowing endorsement.  This scheme uses volunteer advocates to assign free representation to litigants in person in the Chancery Division.  Carr noted that whilst it may not make a big difference to the eventual outcome it made it much easier for the judge to identify and consider the relevant issues and use the limited court time effectively.  Carr estimated that in around 20% of marginal cases he might change his mind on a particular issue following persuasive advocacy but this might not necessarily affect the outcome.

Does the involvement of a well-known lawyer indicate a winning or a losing case?  There were two schools of thought: (1) a famous lawyer could not possibly have accepted a losing case for fear of the damage to their reputation; or (2) only more established lawyers take on the 'challenging' cases.

Big difference in the CJEU is the long gap between the hearing and reaching decision if the case requires an opinion from the Advocate General (AG).  In Vadja's experience, most cases he handles (and certainly all difficult cases) have an AG opinion.  The Court will wait for the AG's opinion before discussing the case between them.  In practice, this means the court has to return to their notes from the hearing several months after the event when the finer points under discussion may be a more distant memory.  This meant that the starting point is generally the AG's opinion (as intended).

How long should advocacy last? 

The CJEU now has a fixed time limit of 15 minutes for everyone.  Judge Vadja's view was that this approach works well. Written pleadings normally quite full and the oral hearing is simply a supplement to those pleadings.  Because of the nature of the court, the majority of the advocates have not appeared before the court before.  His big warning to advocates was not to simply repeat the written testimony but be sure to add something new and focus on the key points.  The judges often try to ask questions to focus the advocates to the case.  This means the hearings consist of short oral submissions followed by questions.  Although questioning of counsel is not necessary, it nearly always happens in practice.

Do we take too long in England? Henry Carr gave a simple answer: "Yes".  But went on to note that appeals do not tend to take too long and 15 minutes is not long enough to explore questions of fact.

The Italian courts have full discretion to decide the order in which issues are presented and how many minutes are permitted per issue.  However, unlike English judges, the Italian ones will not normally interrupt.  Hearings generally take 10s of minutes rather than hours.  The problem for Italian judges is not the oral hearing it is the written statements which can involve a lot of trees (as well as some irrelevant issues).

Should judges have prior experience of trade mark law before being entrusted with a case?  And is that prior experience necessarily a good thing?

At an EU level, a large proportion of the CJEU and General Court's case load concerns trade marks.  However, most judges have no prior experience of trade marks before they join the court.  Is this a problem?

It was a question of balancing efficiency with diversity.

To improve the efficiency of a court, particularly when it deals with a large volume of trade mark cases, there is something to be said for someone familiar with issues and arguments.  Therefore it can be helpful to have judges who are familiar with the underlying legal issues they have to consider.

Catalozzi indicated that the Italian system could benefit from more judges having prior litigation experience.  The same issue arises at the CJEU where many judges are nominated from routes where they have not had to gain litigation experience. As Robin Jacob put it: "I've seldom met anyone who doesn't think poachers turned gamekeepers isn't a good idea".

Although the General Court is on a hiring spree (the number of judges is doubling so each Member State will contribute two judges), Judge Vadja's view was that setting quotas is not helpful.  However, it is important to have a balanced and diverse court in terms of prior experience (career judge vs former practitioner), specialism and background.  Judge Vadja highlighted that it is a good thing for any judicial system to represent people from different backgrounds and with different perspectives.

Carr noted that many of the best trade mark judgments come from non specialists such as Neuberger LJ.  In his view, it is not necessary to have specialist trade mark judges.  However, patents is a different issue and non specialists tend to struggle with patent cases.

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