For the half-year to 31 December 2015, the IPKat's regular team is supplemented by contributions from guest bloggers Jani Ihalainen, Nikos Prentoulis and Mark Schweizer.

Birgit Clark is on Sabbatical till the end of the year

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 4 September 2015

IPEC puts its Sensitive Touch on joint authorship claim in a musical work

Nedim Malovic
A few months ago the Intellectual Property Enterprise Court (IPEC) issued a very interesting decision regarding post-punk bands, copyright and joint authorship in musical works. The case is Minder Music & Another v Sharples.

At the time when this judgment was released the IPKat did not have the chance to report on it. This is why it is particularly grateful and truly delighted to host the following analysis by music and IP enthusiast Nedim Malovic (Stockholm University), which will be also published soon in the Journal of Intellectual Property Law & Practice.

Here's what Nedim writes:

"This case concerned the rights to a song, Touch Sensitive, recorded by the band “The Fall” and first performed in 1998. Julie Adamson, a band member, wrote the music and the vocalist, Mark Smith wrote the lyrics to the song. Mr Smith later assigned his rights in the song to one of the claimants, Minder Music. In 1999 Mr Smith and Ms Adamson agreed that the rights to the song should be split one-third to Mr Smith and two-thirds to Ms Adamson.        

The defendant in the proceedings, Steven Sharples, was engaged in the production of the album version of the song, having been assigned this task following an oral agreement between himself and a Mr Bernard McMahon.

Yes, this is indeed a picture of "The Fall"
Besides an inquiry as to damages, in their action before the IPEC the claimants sought a declaration that: Minder Music owned a 33.34% off the copyright share in the album version of Touch Sensitive, while Ms Adamson owned 66.66% to it (or such share as the Court would determine); and no part of the copyright to this song was owned by Mr Sharples at any point.

Mr Sharples denied that the claimants were entitled to such declarations and damages, on the ground that he had contributed substantially to both the lyrics and music, and had also entered into a settlement agreement with Ms Adamson that would entitle him to a one-third share in the copyright to the song. The agreement under which Mr Sharples had relied upon was one concluded in 2013 to settle a dispute regarding the division of royalties held by PRS, and according to which each party was to receive a third share.

The decision

In reaching her decision, deputy judge Miss Recorder Amanda Michaels considered whether: (1) the settlement agreement was valid and binding upon the parties; (2) any oral agreement was made by Mr McMahon and Mr Sharples, and if so, whether Mr McMahon had the actual authority of “The Fall” to enter into such agreement on their behalf; (3) Mr Sharples’s claim to be a joint author of the album version of Touch Sensitive was a valid one under s 10(1) of the Copyright, Designs and Patents Act 1988 (‘CDPA’).

A sensitive touch ...
(1) Whether the settlement agreement was valid and binding

The claimants submitted that the agreement was an unconscionable bargain because Mr Sharples had taken undue advantage of Ms Adamson’s precarious economic situation to press her into entering a substantially disadvantageous settlement.          

The judge declined to set aside the settlement agreement because the evidence provided did not show any undue pressure, and in part actually showed that Ms Adamson actively sought the agreement as a way of resolving her financial problems, through which she hoped for the release of the accrued royalties.

(2) Whether there was any valid agreement between Mr McMahon and Mr Sharples

The judge took the view that this agreement was void because Mr McMahon was not authorised – either in fact or by conduct – to act as agent for the band collectively or for Mr Smith and Ms Adamson as individuals.

(3) Whether Mr Sharples’s claim of joint authorship was a valid one

This point required the judge to consider relevant case law on joint authorship pursuant to s10 CDPA, notably Bamgboye v Reed and Brookerand Another v Fischer. These authorities suggest that joint ownership is not necessarily the same as equal ownership of copyright. Where two or more collaborators claim to have contributed to a copyright work the task of the judge is to discern the nature and extent of each party's contribution in order to determine his or her share of the copyright. To this end, what needs to be taken into account is the degree and quality of each party’s contribution, considering that in any case such contributions – while significant – do not need to be equal in terms of quantity, quality or originality.

This said, the judge considered Mr Sharples’s contributions to the lyrics and music of Touch Sensitive, respectively. With regard to the former, she dismissed any joint authorship claim. However, the judge found that the defendant’s contribution to the music of the song could entitle him to joint authorship and ownership of 20% of the copyright value of the album version of Touch Sensitive.

... and a slightly less sensitive one
Practical significance

The case indicates that not every contribution to the creation of a work justifies a share of the copyright in that work. More specifically the contribution at hand must add some value to the work, although it does not need to be equal in terms of quantity, quality or originality among all co-authors. In other words, the contribution must be of the right kind, ie sufficiently original. As regards the extent to which a derivative work is a new work, the judge took the view that it suffices to deploy the UK approach, namely that a work is the result of its author’s own skill, labour, or effort.

In determining to what extent a derivative work is a new work, one may consider that the degree of originality required would be less stringent in the event of deploying the UK approach in lieu of the standard of originality indicated by the Court of Justice of the European Union in Infopaq and its progeny. Among other things, this conclusion is supported by the Opinion of Advocate General Paolo Mengozzi in Football Dataco, in which he held the view that copyright protection requires something more than just labour and skill (para 35).

In this case the judge did not engage in any discussion of whether and to what extent the EU standard of originality differs from the traditional UK test. Indeed, on this very point there has not yet been any particularly thorough discussion in UK courts. The result is that the dictum by Mrs Justice Proudman in Meltwaterie that the test of quality has been re-stated but … not significantly altered by Infopaq” (para 81), possibly (and regrettably) still remains the most explicit stance in this respect." 

Criminal Copyright: Should Copyright Protection not be Given to Works by Criminals?

Crime doesn't pay, or so they say even when some (nearly) dash away with millions of pounds worth of jewellery in broad daylight in London. No matter what your crime has been, be it big or small, one should not be able to benefit from that crime financially, so as to not encourage others to take the same route with the aim to benefit in a similar fashion. With this in mind, could a criminal, even when their crimes are unrelated to the IP rights conferred, benefit from those rights in the light of their criminal status?

This Kat is a big history fanatic, and has spent a great deal of his youth reading about a variety of historical topics; a prominent one of which was World War II. For those less familiar with the topic [although this Kat would be surprised if someone would not be aware of this individual], Joseph Goebbels, the propaganda minister for the Nazi regime in the 1940s, was instrumental in the success of the regime in its early days, especially in relation to the rising disdain towards ethnic and religious minorities in Germany and the rise of the party in general in its formative years. Along with his prolific writings during that time, he also kept a meticulous journal of his plans and events that occurred, proving a very valuable insight into the lesser known facets of the regime itself through a figure that was instrumental to its success and ideologies.

Anyone can be evil, no matter how fluffy
Joseph Goebbels' journals were subsequently used for the writing of a biography of the controversial figure by Peter Logenrich, published by Random House this year (although it was published 5 years ago in Germany). After the publication of the biography Cordula Schaht, the daughter of Hjalmar Schaht, the minister of economics for the Nazi government, sought to reclaim royalties on the sale of the book, since the journals Joseph Goebbels wrote during his lifetime were used heavily in the book, often copying paragraphs or excerpts verbatim. The diaries and all rights to the works were given to Mr Schaht upon the death of Joseph Goebbels.

In their argument, although outside of court, Reiner Dresen, counsel for Random House, argued that no royalties should be paid to Ms Schaht as " money should go to a war criminal". Due to his heavy involvement in the Nazi regime, Random House clearly believed that they had a moral obligation to withdraw payment due to the heinous crimes committed during this time. Mr Dresen also relied on a non-moral argument, as Mr Goebbels was included in a list by the Allied Control Council, banning his estate from any financial transactions (possibly to prevent any moving of financial assets outside of Germany, unduly gained during WW2).

The Munich District Court saw otherwise [and if any readers would have access to the case, this Kat would happily update the post with it], and awarded Ms Schaht her due royalty payments, although highlighting the expiry of any rights in the works in the end of 2015, which marks 70 years from Joseph Goebbels' death. Random House has indicated that they will appeal the decision to the German Supreme Court, but whether their case has any likelihood of success is uncertain.

The case made this Kat ponder, should copyright take morality into account when awarding protection or the benefit from said rights? What do our readers think? Arguably, when looking at the Copyright, Designs and Patents Act 1988, the answer would be no, as protection is awarded to any work, irrespective of the author's past or the work's content. This is important, since who would be the judge of what is morally acceptable or who is worthy of copyright protection; a question that is ripe with subjectivity and uncertainty.

Thursday, 3 September 2015

Counterpoint: The Economist's attack on the patent system-- it's all about controlling the narrative

Fellow Kat Nicola has done an elegant job summarizing the case against the current patent system set out by The Economist in the Leader, entitled “Time to Fix Patents”, which appeared in the 8 August issue (the title of whose cover minced no words—"Set innovation free! Time to fix the patent system"). The truth is, however, that what is really at stake in the arguments made by The Economist (including the more elaborated version contained in the same issue, entitled “A question of utility”) has less to do with economics, but everything to do about controlling the public narrative about patents and IP more generally. For that reason, it should be a matter of particular concern within the IP community.

“A question of utility” expands on the Leader primarily by bringing what purports to be the economic case against patents (“Patents are protected by governments because they are thought to promote innovation. But there is plenty of evidence that they do not.”) By “plenty of evidence”, The Economist primarily means the arguments made by Michele Boldrin and David Levine, two economists affiliated with Washington University in St. Louis, in their 2008 book, The Case against Patents, and their supporting 2012 paper produced for the Federal Reserve Bank of St. Louis. The title of the book speaks for itself. Still, this Kat does not believe that The Economist really intends us to treat the Boldrin and Levine work as settling the economic case regarding the relationship between the patent system and innovations. Views have been expressed pro and con, as one might expect concerning an issue as complicated as this: how do we define and measure innovation, on the one hand, and how does one tease out the effect of the patent system, on the other? This difference of opinion is hardly surprising. Economics is hardly an exact science; lest we forget, the economic profession failed to warn us adequately about the Great Recession. Nor is it easy to reach consensus about fundamental issues. Reaching further back in economic history, the profession continues to debate the onset and staying power of the Great Depression in the 1930s. Against this backdrop, one book on the connection of patents and innovation is hardly the last word on the subject.

No, what these articles are ultimately intended for is to try and set the narrative by which the patent system is discussed. To this end, economics is merely a hand-maiden. In so doing, The Economist joins a long tradition. We have seen the struggle to control the patent narrative played out several times in the recent past. In the 1960s, the hostility to anything that had a whiff of monopoly was disfavoured, and so we watched the Warren court in the United States express demonstrable hostility to the patent system. That narrative changed in the 1980s, when the United States began to fear that its business supremacy was at risk in the face of industrial Japan. Strong patents, indeed strong IP rights more generally, were seen as essential—the TRIPS Agreement and the globalization of a robust IP regime followed. Strong patents could seemingly do no wrong. And then, around the turn of the new millennium, two developments appeared. First, we began to hear more and more about the corporate unlocking value in patents, epitomized in the book, Rembrandts in the Attic.  Patents were now assets, to be bought, traded and sold. But in some intellectual circles, trading in such a monopoly asset was viewed as unseemly, if not worse.

Even more telling, at least at the rhetorical level, was the rise of the patent troll. Forget that no consensus has ever been reached on what is a patent troll/NEP (see Part II of the WIPO report, "Study of the Public Domain (II)"). Is Carnegie Mellon University as the plaintiff in a patent litigation action a good patent owner or an odious patent troll? Relying on a slim number of legal/economic studies, purporting to show that patent trolls are a drag on innovation (indeed, even the White House adopted this position in its report—"Patent Assertion and U.S. Innovation"), patent trolls became the perfect bogeyman for all those who felt hostility to patents. This combination of turning the patent right into a commodity, on the one hand, and a tool for exploitation of patent rights, on the other, provided the fertile ground on which this most recent revisionist form of patent narrative of the patent system has taken root.

No, this Kat is not an IP Luddite. The patent system and the laws underlying it can certainly be improved. But this is not what the two pieces in The Economist are about. As for their ultimate narrative, this Kat can do no better than bring some representative quotes from the piece--“A question of utility.”
“A growing amount of research in recent years, including a 2004 study by America’s National Academy of Sciences, suggests that, with a few exceptions such as medicines, society as a whole might even be better off with no patents than with the mess that is today’s system.” [Nevertheless, the article does go on to lament how poorly patents seem to serve pharmaceutical innovation so nothing seems to be left.]
“But a top-to-bottom re-examination of whether patents and other forms of intellectual property protection actually do their job, and even whether they deserve to exist, is long overdue. Simple abolition raises problems in terms of the ethics of property rights...” [and then follows a list of proposed changes]. "If defenders of the patent system really seek to foster innovation, they should be prepared to do so in their own back yard."
But before one gets too complacent about concession to the importance of property rights per the quote above, consider the following comment in a review of the book by Alexa Clay and Kyra Maya Phillips, “The Misfit Economy: Lessons in Creativity from Pirates. Hackers, Gangsters and Other Informal Entrepreneurs" which appeared in the July 4, 2015 issue of The Economist. The reviewer writes:
“But the next item on the list, copying, is more controversial. Though the authors studiously (and repetitively) say that they do not endorse the theft of intellectual property, their sympathies are clearly with those who mix counterfeiting with innovation. Owners tend to have overly fixed ideas about how their property should be used, they argue. Outsiders, on the other hand, may have more innovative ones.”
How far can this emerging narrative go? This book review offers one view, where property rights ultimately seem to have no place in their vision. At the end of the day, it is the potential for mischief as a by-product of the narrative championed by The Economist that is the real matter at issue.

Will Impulse shoppers be Impulsive? CJEU gives guidance

Five-and-a-bit months after the Opinion of Advocate General Wahl was published in Case C-125/14, [here, with Katnote here] in Iron & Smith Kft v Unilever NV, the Court of Justice of the European Union (CJEU) has delivered its decision, in response to a request for a preliminary ruling from the Hungarian Fővárosi Törvényszék (the Budapest Municipal Court).

The facts of the underlying dispute are as follows.  Relying on its earlier Community word mark (CTM) IMPULSE, leading brand owner Unilever NV opposed an application by Iron & Smith Kft. to register a colour figurative sign featuring the words ‘be impulsive’ as a Hungarian trade mark.  The Hungarian Intellectual Property Office (HIPO) found that Unilever had sold large quantities of and publicised the goods designated by its CTM IMPULSE (which seem to be some sort of perfumed and/or deodorant body spray) the United Kingdom and Italy, with that mark enjoying a 5% market share in the United Kingdom and a 0.2% market share in Italy. Even though this market share finding did not relate to Hungary, HIPO found that the reputation of the CTM had been proved in a substantial part of the European Union and refused the application, adding that a risk of the later mark taking unfair advantage could not be ruled out.

Iron & Smith applied to the Fővárosi Törvényszék for annulment of the decision to refuse its application. Entertaining doubts as to the correct interpretation of Article 4(3) of European Union's much interpreted and indeed much misinterpreted trade mark directive, the referring court asked the CJEU to give it a preliminary ruling on the following questions:
‘(1) Is it sufficient, for the purposes of proving that a Community trade mark has a reputation within the meaning of Article 4(3)  …, for that mark to have a reputation in one Member State, including where the national trade mark application which has been opposed on the basis of such a reputation has been lodged in a country other than that Member State?

(2) May the principles laid down by [the CJEU] regarding the genuine use of a Community trade mark be applied in the context of the territorial criteria used when examining the reputation of such a mark?

(3) If the proprietor of an earlier Community trade mark has proved that that mark has a reputation in countries other than the Member State in which the national trade mark application has been lodged — which cover a substantial part of the territory of the European Union — may he also be required, notwithstanding that fact, to adduce conclusive proof in relation to that Member State?

(4) If the answer to [Question 3] is no, bearing in mind the specific features of the internal market, may a mark used intensively in a substantial part of the European Union be unknown to the relevant national consumer and therefore the other condition for the ground precluding registration in accordance with Article 4(3) of the Directive not be met, since there is no likelihood of detriment to, or unfair advantage being taken of, a mark’s repute or distinctive character? If so, what facts must the Community trade mark proprietor prove in order for that second condition to be met?’
AG Wahl advised the CJEU to answer the questions referred by the Fővárosi Törvényszék as follows:
(1) [Answering questions 1 and 2, correctly in this Kat's view] For the purposes of Article 4(3) ...  it may — depending on the specific mark which is described as enjoying a reputation and, accordingly, on the public concerned — be sufficient that a Community trade mark enjoys a reputation in one Member State, which does not need to be the State in which that provision is relied upon. In that regard, for the purposes of determining whether a reputation exists within the meaning of Article 4(3), the principles laid down in case-law in respect of the requirement to show genuine use of a trade mark are not relevant.

Commercially pertinent ...
(2) Where the earlier Community trade mark does not enjoy a reputation in the Member State in which Article 4(3) ... is relied upon, in order to prove that, without due cause, unfair advantage is taken of, or detriment is caused to, the distinctive character or repute of the Community trade mark for the purposes of that provision, it is necessary to show that a commercially pertinent proportion of the relevant public in that Member State will make a link with the earlier trade mark. In that regard, the strength of the earlier mark constitutes an important factor for the purposes of proving such association [This Kat thought that this is right too, though some big brand owners will not like it. However, he doubts that it will make a practical difference in many cases since, even if no unfair advantage is taken and no detriment inflicted, the chances of there being a likelihood of confusion will generally prevent the later mark being registered].
This Kat expected the CJEU to go along with AG Wahl's Opinion, which it more or less did. Today the CJEU ruled as follows:
1. Article 4(3) of Directive 2008/95 ... must be interpreted as meaning that, if the reputation of an earlier Community mark is established in a substantial part of the territory of the European Union, which may, in some circumstances, coincide with the territory of a single Member State, which does not have to be the State in which the application for the later national mark was filed, it must be held that that mark has a reputation in the European Union. The criteria laid down by the case-law concerning the genuine use of the Community trade mark are not relevant, as such, in order to establish the existence of a ‘reputation’ within the meaning of Article 4(3) thereof [thus endorsing and paraphrasing the advice given by AG Wahl].

... or commercially significant?
2. If the earlier Community trade mark has already acquired a reputation in a substantial part of the territory of the European Union, but not with the relevant public in the Member State in which registration of the later national mark concerned by the opposition has been applied for, the proprietor of the Community trade mark may benefit from the protection introduced by Article 4(3) of Directive 2008/95 where it is shown that a commercially significant part of that public is familiar with that mark, makes a connection between it and the later national mark, and that there is, taking account of all the relevant factors in the case, either actual and present injury to its mark, for the purposes of that provision or, failing that, a serious risk that such injury may occur in the future [again, ruling along much the same lines as AG Wahl proposed, but going into more detail by stipulating the need for actual or highly likely damage].
It is not known at this stage whether the CJEU understands there to be difference between a "commercially pertinent proportion" of the relevant public or a "commercially significant part" of it. Nor can this Kat guess whether the terminology of making a "link" and making a "connection" will be a matter for future analysis -- though it should not be since it is clear from para [28] that the CJEU is using the terms synonymously ["link" is perhaps being phased out, since it's only used twice in the ruling, as against eight uses of "connection"].

What makes people sweat here and here
What makes people smell here and here

Wednesday, 2 September 2015

Wednesday whimsies

Never too late!  On the Monday of every week this weblog publishes a "Never Too Late ..." feature in which it summarises, complete with links, the topics covered in the previous week's Katposts.  This week was no exception. However, since Monday of this week was a public holiday in the United Kingdom, many readers from that happy land may well have missed this week's round-up. If you were one of them, it's here.

Enforcement seminar: a final reminder.  Attendance figures are up into the 90s now for the JIPLP-GRUR seminar next Tuesday, 8 September, on the Impact of the IP Enforcement Directive on National Law. It's still possible to get a few more people into the venue, kindly provided by Taylor Wessing LLP which has given us use of its London facilities. With speakers Wiebke Baars (from Taylor Wessing's Hamburg office) and Michael Edenborough QC (Serle Court), panellists Paul Stevens (Olswang LLP), Anna Carboni (Redd; till recently an Appointed Person) and Mark Owen (Taylor Wessing), it's bound to be both educational and entertaining. The seminar is free to attend. If you've not yet signed up but plan to do so, click here for details.  Likewise, if you have already signed up but then discover that you can't attend, please let the organisers know so that someone else can fill your space.

Just for starters ...
Not out to lunch ... but looking forward to dinner. As previously intimated on this weblog, on Thursday 10 September IPKat blogmeister Jeremy is speaking at the next dinner meeting of UNION (the Union of European Practitioners in Intellectual Property, that is).  The title -- "IP in 2015 - Where we are v Where I thought we'd be"  -- is broad enough to suit all tastes and a multiplicity of interpretations. Details of the event can be found in full in this flyer.  The venue is the Royal Over-Seas League, which is somewhere around here.  Cutlery will be provided.

A chance to have your say 1.  Back on 4 August, Merpel posted this item on the Association of Members of the Boards of Appeal (AMBA) consultation on the reform of the Boards of Appeal of the European Patent Office.  She is naturally delighted that some folk have offered their comments, even though this is a non-chargeable activity, but she is concerned that not enough good souls have lent their own wisdom to this once-in-a-lifetime exercise.  Please, therefore, take a look at the proposals and do the honourable thing ...

A chance to have your say 2. In order to enhance the efficiency of the global patent system the IP5 Offices -- that's the patent offices of the United States, China, Korea, Japan and Europe --  endeavour to explore the harmonisation of their practices and procedures. This being so, the Patent Harmonisation Experts Panel (PHEP, a technical body of the IP5) has initiated work on the following items under the lead of the Offices in brackets:
  • unity of invention (EPO, SIPO)
  • citation of prior art (KIPO, USPTO)
  • written description/sufficiency of disclosure (JPO).
Maintaining that significant progress has been made in all three topics. The IP5 Offices have produced comprehensive reports outlining their own relevant practices regarding unity of invention and citation of prior art, and have also compiled a list of terminology on written description/sufficiency of disclosure. Your feedback is welcomed, though it's anybody's guess what they might do with it. The documents for you to peruse and comment upon are unity of invention, citation of prior art and the list of terminology on written description. Please send your comments to IP5 here. If anyone has something really exciting to say, can they copy Merpel in, please? There's more information available here (Katpat to Chris Torrero).

Words, words, words ... The ever-cultured Mark Anderson, of IP Draughts fame, has been attending the Edinburgh Festival of late.  What was in his mind? According to his post on this great annual attraction:

This blog is meant to be about intellectual property, and there was little in the above performances that raised IP issues, though IP Draughts idly speculated on whether the repetition of a single word several hundred or thousand times could amount to a copyright work.
We all know the answer to that, but we're not saying.  

Point: The Economist is Infallible - Patents need to be questioned

In good, old high-school debate style, Neil and I are doing a point-counterpoint.  The dividing line? This Economist article from August 8th. The article kicks off with the fundamental economic question for IP - how does it incentivise innovation? Pointing to a number of shortcomings in patents in agriculture and pharmaceuticals, The Economist concludes that patents don’t.  It’s a strong opening and a good one.  If the political justification for a patent system is based on growth and innovation, then the patent system should be held accountable to its impact on these areas.

This is in contrast to the magazine's historical views; the article article notes the magazine’s support for the abolition of the UK patent system in the 19th century. The Economist is not immune to flip-flopping (e.g. flip-flops on African economies). TechDirt finds flip-flops on patents in the last five years. In 2015, The Economist is arguing in favour of patent policy reform with higher thresholds for patentability and shorter terms in what they call a "rough-and-ready" system. 

It's a kind of magic
The Economist also questions the romantic ideal of the lone inventor.  As most innovation is cumulative, the limitations of the patent system's ability to adequately reward multiple innovators is a fair criticism. (See my previous post.) The same TechDirt article argues that here The Economist inappropriately adds "feelings" to the argument.  I disagree with TechDirt; the rhetoric surrounding patents has long evoked emotive case studies where lone inventors, patients with neglected diseases, etc. 'suffer.'  

One phrase in The Economist's article that will no doubt raise the hackles of IPKat readers is, “patent lawyers are masters of obfuscation.” It's a hyperbole, but not completely off the mark. The crafting of a patent claim could be construed as a magic trick. Claims have the illusion of being very specific and are anything but.  However, the charge of obfuscation could equally be levied at economist's penchant for bewitching with numbers.

I question the suggestion that, “under-resourced patent officers will always struggle against well heeled patent lawyers.”  It is unclear who “patent officers” are, but it should not be patent examiners.  It is politicians and policy officials who struggle against heavily-funded lobbying (and sometimes between themselves.) As is always the case with lobbying, it is those that stand to lose or gain the most that lobby the hardest.  In recent patent memory, this has been well-funded patent owners and less well-funded users of patents.

The Economist calls for adjusting key policy levers: introducing a use-it-or-lose-it test, increasing the ease of challenging an existing patent, lowering the bar for invalidity, increasing the non-obviousness requirement and shortening patent term.  All very sensible from the econ-centric perspective, she said blithely (far too much to unbundle in a blog post), but exactly how to put in practice is another matter. 

Kats going haywire
While this clear, rough-and-ready system will have some losers, it is likely the most efficient.  The more complex a system, the more it increases transaction costs such as legal costs.  A system tailored to each case is impossible and inefficient, the one-size-fits-all is an economically efficient solution.  That is not to say that the distribution of the costs and benefits does not matter, but there is a balance to be struck between an efficient system and one that can adapt to the unique characteristics of the economy. Indeed, The Economist calls for shorter terms in fast moving tech areas.  A tricky task, possibly on a slippery slope, and a reason we have such debates.

Overall the question has always been how to strike the right balance between the interests of private innovators and society.  And that is what this article is fundamentally about – questioning whether we have that balance right.

N.B. There is a second article in The Economist on patents, of which IPWatchdog was not a fan. This post focuses on the Op-Ed "Time to Fix Patents."

P.S. A Kat-pat to my personal IP-economics clipping service (a.k.a. D.A.D.) for alerting me to the article while I was distracted by beaches. 
P.P.S. At my favourite conference, EPIP in Glasgow this week.  Looking forward to updating IPKat readers on all things hot and economics.    

Tuesday, 1 September 2015

Even regulations have a heart -- Italian court on moral rights in legal texts

Giovanni Casucci
From fellow IPKat contributor Alberto Bellan comes a moving story about EVERYTHING that matters, ie copyright, love, and Italy (of course).

Here's what Alberto writes:

"Law students are usually told that one of the major differences between common law copyright and continental diritto d'autore [why not? Let’s use the Italian phrase] lies on a different threshold of originality. Under this approach, UK copyright would protect almost anything that comes out from a human's brow with a bit of sweat. By contrast, the French-derived systems would require a higher degree of creativity and would allow only true artistic works embedding the author's personality to get protection under their diritto d'autore regimes. While the Court of Justice of the European Union has been fully gradually harmonising those positions, an avant-garde decision of the Court of Venice has just acknowledged moral rights in a pretty-far-from-what-is-normally-considered-art text, ie an anti-counterfeiting regulation.

The claimant in that case was Mr Giovanni Casucci, a very-well known Italian IP lawyer and teacher leading the Bardhele Pagenberg practice in Italy. In 2003 Mr Casucci created an anti-counterfeiting service to be used during fairs as a quick and almost-free-of-charge alternative to judicial enforcement. That service, which he provided along with other professionals, was based on a set of rules (the ‘Regulation’) allowing exhibitors and third parties to obtain seizures, evidence acquisition and, in certain cases, the closure of stands hosting infringing products within a few hours. Companies attending the fairs where the Regulation was in force were bound to it and the orders of those who operated the service under a specific clause included in the relevant fair agreement.

(Almost) never for money,
always for love
In January 2011 Mr Casucci discovered that the Fiera di Vicenza, ahead of the Vicenza Oro T-Gold First exhibition, had started using his own Regulation without his permission. The Fiera di Vicenza had received the Regulation from another Italian colleague of Mr Casucci, who had been so kind to almost-entirely copy the Regulation's set of rules without its author's consent and, most importantly, without attribution. Mr Casucci brought proceedings against Fiera di Vicenza and that other lawyer, claiming moral rights infringement. Both defendants alleged, among other things, that the Regulation was just a set of provisions utterly devoid of creative and artistic character -- "originality", they said. As it did not reflect Mr Casucci's personality, the defendants argued, it would have not presented the minimum degree of originality provided by Italian law to access diritto d'autore protection.

The Court of Venice, though, strongly disagreed with the defendants. "In order to receive protection under moral rights provided by Italian Copyright Law", the Court said echoing the Court of Justice of the European Union in Infopaq and its progeny, it is just necessary for a work to be "the author’s own intellectual creation", meaning that, "the work must be 'creative' in the sense of new [new? Well, that’s a pretty free adaptation of the Infopaq language …] and original: it has to reflect the author’s personal and individual contribution as a result of a processing presenting a sufficient additional value as compared with the situation existing before the creation itself".

You do not need to be Giovanni Bellini to have your work protected by diritto d'autore in continental countries -- or, at least, in Venice: "the degree of originality and novelty can be modest (the creativity can’t be excluded just because the creation lies in simple ideas and notions)", the Court said, "and also a legal creation such as an anti-counterfeiting Regulation … can be protected under the Diritto D'Autore Law", the latter protecting all and any "work of sciences or art in general, also on consideration of the open and merely illustrative protectable works' list provided by Art 2, Italian Diritto D'Autore Law".

Isn't it pure poetry?
The Court also found that, in the case of Mr Casucci's Regulation, the work at hand was new and creative (read: "original") enough to access to the Diritto D'Autore protection, there being a bit of Mr Casucci's heart in it: "The Regulation does not appear to be a merely necessitated list of rules and procedures. Rather, it represents a specific expression of provisions designed to implement an anti-counterfeiting service within the scope designed by current laws in the IP field and according to Mr Casucci's professional experience in this field. As a result, the outcome is a series of personal, original, new and creative set of rules [deriving from] Mr Casucci's experience", whose originality also lies on "the way in which those provisions are organised and mixed within the author's own particular expression form".

Accordingly, the Court of Venice established that both Fiera di Verona and the lawyer who had copied Mr Casucci's Regulation had infringed his moral rights in the Regulation, and ordered the lawyer to pay a symbolic compensation to Mr Casucci and publish the decision on a number of Italian newspapers.

This decision is plenty of good news. Firstly, the Court of Venice's approach appears to faultlessly bring (or bring back) copyright to its own truly function: protecting people's literary works, whatever field of the human literature works belong to. Secondly, although some differences still exist between the two paradigms of copyright/diritto d'autore, those differences could be easier to overcome than many think – to be noted in view of a possible, proper European harmonisation not only through case law. Eventually, although lawyers' social perception might not be that good, it is with great relief that one learns that at least someone considers those within the legal profession as comparable to artists. I've always wanted to be a poet. I've almost made it.” 

Lack of originality, slogan similarity and the Greek elections

The snap Greek elections, which have been called for 20 September, did not seem to have taken anyone by surprise, with exception of the "creative" branches of... the two larger political parties in Greece. How so? It appears that in a rush to make their mark and put their slogans in everyone's mouth the incumbent SYRIZA party and the main opposition party NEA DIMOKRATIA (or New Democracy) managed to get themselves caught up in a mark - slogan row over Greek word "ΜΠΡΟΣΤΑ" (BROSTA), which means forward.

New Democracy leader and his slogan
It seems that New Democracy first occupied the spot by using the mark - slogan "Η ΕΛΛΑΔΑ ΜΠΡΟΣΤΑ" (I ELLADA BROSTA), i.e., "Greece forward". Accordingly, when a few days later, SYRIZA leader Alexis Tsipras spoke in a party event, with the words "ΜΟΝΟ ΜΠΡΟΣΤΑ" (MONO BROSTA), i.e., "Only forward", appearing on his back, New Democracy complained over copying of its campaign.

This GreeKat would sympathize more with the opposition campaign team, if he thought there is any originality in using "forward" in political campaigns. In the rather frustrated status he has found himself into, he also thinks that if any of the two slogans was ever filed as a trade mark, it should be rejected not so much as lacking distinctiveness, but primarily as being misleading... just a(n angry) thought.  
... and SYRIZA leader with his version

To be fair, it is not the first time SYRIZA had a mix up with campaign slogans. A short 8 months ago, on January 2015, during the previous election campaign, it had initiated the campaign with "ΤΟ ΜΕΛΛΟΝ ΞΕΚΙΝΗΣΕ" (The future has started), which was quickly replaced by "Η ΕΛΠΙΔΑ ΕΡΧΕΤΑΙ" (Hope is coming). The reason was that the party's initial choice had already been used by Socialists PASOK in their 2000 election campaign.
The January 'comparative' pic as appearing in

This GreeKat would also have preferred if IP truly attracted the spotlight in Greek elections, as he feels it is a key throttle for innovation and growth, which in turn is paramount to addressing the Greek crisis. Alas, he fears he stands for another disappointment. At least, there is a bit of fun with political parties logos and slogans.

Monday, 31 August 2015

Letter from Japan 3: Copyright and industrial design: trapped in the Tripp Trapp ...

Here's the third in the series of occasional guest posts from Japan from one-time guest Kat and Class 46 trade mark blogger Laetitia Lagarde.  Laetitia's first post, on product placement, can be read here. and her second post, covering non-traditional marks, is here.  Now she looks at the copyright/design interface:

Copyright does not enjoy the same degree of harmonization throughout EU as trade mark and design laws do;  the intersection of these rights is nonetheless very common and a product's protection can  fall within one or more IP right category.

At the EU level, the interaction between copyright and design is found in Article 17 of the Designs Directive 98/71, “Relationship to copyright":

"A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State”.

As a result, the cumulative protection by both copyright and design laws differs greatly among the EU countries according to their standard of originality  —which is higher than the requirements of “individual character” for design protection.

For example, France and Benelux Countries have recognized the principle of “unité de l’art,” meaning that copyright protection for both applied art and industrial works shall be determined under the same criteria. However Germany has a very high threshold which excludes most designs from copyright protection; the UK requires a level of "artistic craftsmanship"; and Italy only protects designs which can be separated from the product to which they are applied (the principle of "scindibilita").

This Kat remembers fondly her previous home jurisdiction’s internal conflict, yet passionate debate (in the case of Italy, the word “passionate” is something of an inderstatement) about protecting luxury furniture designs; this caused a delay in implementing the EU directive which granted design, prototypes and patents for, among others, furniture and home accessories the same copyright protection as other artistic works. (see here). The underlying reasons for trying to exclude this double protection were not only to avoid copyright protection continuing after the lapse of registered rights, but also to encourage design registration.

Now turning to Japan, the majority of court precedents have ruled implicitly or explicitly that copyright is not denied by the mere fact that a work is an industrial product. The Design Act protects exclusively registered designs defined as “the shape, patterns or colours, or any combination of them, of an article which creates an aesthetic impression through the eye” as long as it does not fall under the category of unregistrable designs. The Copyright Act explicitly states that works of artistic craftsmanship are protected as artistic works. However, there are no provisions governing other types of industrial products (works of applied art). Therefore a decision on whether a certain product is protected is a matter of interpretation.  Court decisions basically recognize it is not appropriate to grant the same level of copyright protection to industrial products as in the case of fine arts. Accordingly copyright protection is granted to an industrial product only if it is “deemed comparable to fine arts or it has the qualities of fine arts”. In practice, only a very limited number of industrial products can satisfy the requirements for copyright protection. 
A decision on whether “it is deemed comparable to fine arts” or “it has the qualities of fine arts” is made on the basis of (1) whether the work has a high level of aesthetic expression or artistic qualities; (2) whether it is produced only in pursuit of aesthetic expression, (3) without substantial restrictions for practical purposes; and (4) whether it can serve as an object of art, or a complete artistic work, apart from its functionality.

Tripp Trapp
With that background, the IP High Court of Japan recently issued a Judgment (Stokke v Katoji, Intellectual Property High Court, April 14, 2015, Hei 26 (ne) No. 10063) which recognized the copyright in an industrial design, namely for the TRIPP TRAPP children’s chair (Stokke has known some IP trials and tribulations for the same chair in Europe, see here). The High Court reversed the lower court Judgment of the Tokyo District Court (here), which denied copyright protection for industrial designs, in particular 3D designs. The Appeal Court held that “there is no reasonable reason to limit a finding of copyright protection for applied arts on the ground of a protection by Design Law”, thereby considerably lowering the threshold for copyright protection for applied arts where a finding of originality under the Copyright Act would be sufficient.

Katoji NewYorkBaby
In conclusion however, the Stokke decision denied copyright infringement because the Katoji products were not similar to those of TRIPP TRAPP. This recent Tokyo Court decision thus allows copyright holders to sue for copyright infringement even in the absence of design registration under the Design Law. This will facilitate the enforcement of the Unfair Competition Prevention Act, which prohibits for example the production of slavish copies of a product design for three years from the first sale in Japan. Japanese practitioners are wondering whether Stokke will become a predominant trend for future similar cases.

Stokke AS is also the holder of trade mark rights relating to the chair. The slogan “The chair that grows with the child” has been used in the marketing of the Tripp Trapp chair since the 1980s. Looks like IP rights also grow with the chair in Japan...
Philosophy on designs from Japanese schoolchildren here
Designs for cat trees and chairs  here (some might be worthy of copyright protection)

Monday miscellany

Posting of comments: a new Kat policy. In order to make it easier to follow the discussions and threads of debate which appear in the readers' comments section beneath each blogpost, the IPKat has initiated a new policy -- comment-posters are asked to identify themselves via a pseudonym if they don't want to use their own names, since there are far too many people called "Anonymous" and can be difficult-to-impossible to work out which Anonymous is which.  The new policy comes fully into effect a week from now, on Monday 7 September.  Click here for a fuller explanation.

The IP Factor cometh.  Here's a final reminder that tomorrow, Tuesday 1 September, fellow IP blogger and patent attorney Michael Factor will be joining sundry friends at The Old Nick, Sandland Street, Holborn for a pleasant chat about ethics and the intellectual property professions. The time: 5 pm till 7 pm.  Michael. incidentally, is over in England to participate in a conference which is being held at St Edmund's College, Cambridge, on 4 to 5 September on "Patents on Life: through the lenses of law, religious faith and social justice".

Getting to the office on a winter morning
can be an invigorating experience ...
Interested in working in economics & IP?  The Kats' friends at the World Intellectual Property Office (WIPO) are in need of some quality company to keep them amused during the long, snowy nights of a Geneva winter.  Accordingly, and having nothing better to do, they are advertising a two-year post of Senior Economist in their Creative Economy section [Merpel is assured that this is not a euphemism for Accounts]. The post holder will focus on copyright and work with Carsten Fink and his team of cool cats [economists and statisticians: well, that figures ...]. The closing date for applications is 25 September.  Since attractive jobs for IP-friendly economists are available for applicants only a little more frequently than the Presidency of FIFA, this Kat expects that there will be many, many applicants.  Merpel assumes that, if the number of applications greatly exceeds the number of positions available, market forces will ensure that this will be reflected in a correspondingly lower salary.  Click here for application details.

Around the weblogs. The 1709 Blog carries an update on last year's Copyright Literacy Survey and subsequent developments -- and on a chance to play Copyright the Card Game. The same blog features John Enser's observations on the next bout of Euro-consultations, these being on the Satellite and Cable Directive, attractively branded "SatCab" (Eleonora's Katpost on SatCab and its possible implications for geoblocking can be found here).  However, pride of place among recent IP blogposts belongs to the must-read piece by Barbara Cookson on SOLO IP entitled "Mis-sold Community Trade Marks": Barbara makes a valid point very well, and this Kat hopes that Europe's judges, legislators and businesses take note of it.

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