Patent auctions: business and investment strategy in IP commercialization

Legal context. This article concerns patent sale and licensing,asset deals connected with M&A and intangible asset transactions. Key points. Patent owners might find patent auctions a fastway to sell or license their patents. There is a high probabilitythat bidders will purchase or license low- or no- value patentsbecause patent auctions set a very tight time frame for bidders’due diligence. The nature of the patent right creates a bigimbalance in terms of knowledge between owner of the patentand the purchaser or licensee; the latter party can only minimizethe risk of purchasing or licensing a "zero" or low value patentby receiving sufficient time to investigate the patents. IPauctions may however be a better and safer means of purchasingor licensing domain names or trade marks, due to their legalnature. Practical significance. Many companies might believe that patentauction is a swift and effective way to find a purchaser ora licensee for their IP rights. Even so, it is imperative thatthe bidders themselves conduct a proper due diligence of thepatents offered, corresponding to their needs and to their assessmentof their true financial and business value.     

Legal reflections on the Google Print Library Project

Legal context. IP lawyers need a better understanding of theimplications of new technology when advising their clients onlegal strategies for appropriating rents from the exploitationof intellectual property rights in the digital environment.Conversely, clients seeking to ascertain the permissible limitsfor accessing material on the Internet must be made aware ofthe critical distinction between contractual and copyright issues. Key points. Licensing of copyright will continue to be an efficientinstrument for resolving issues relating to compensation andboundaries for permissible use. A sound understanding of thedigital environment will ensure that potential problems associatedwith the scope of the restricted acts under the Copyright, Designsand Patents Act 1988 can be avoided. Lawyers should also beaware of the possible policy developments relating to the exploitationof digital content following the deliberations in the GowersReview. Lawyers should also re-examine the submissions in boththe Grokster and Perfect 10 cases, recognizing the circumstanceswhen copyright arguments raised in other jurisdictions may beimported into the United Kingdom. Practical significance. The absence of any UK legal precedentwith regard to the copyright issues arising from the disputebetween search engine providers and copyright owners providesno excuse for failing to consider how contractual instrumentsmay efficiently resolve issues relating to the appropriationof rents from intellectual property rights. The absence of a‘fair dealing’ exception does not inevitably meanthat, should a similar dispute as that in Google v The Author'sGuild arise in the United Kingdom, a copyright infringementwill have taken place.     

Significant 2005 case law on the Community trade mark from the Court of First Instance, the European Court of Justice and OHIM

Legal context. Each year the ECJ and CFI gives numerous judgmentsin trade mark matters that are of interest to trade mark practitionersthroughout Europe. This article identifies the most importantcases decided in 2005 relating to the major issues in trademark law. Key points. Issues covered relating to procedural questionsinclude the language regime, the duty of Boards of Appeal togive reasons for their decisions, the right of a party to beheard, etc. Numerous substantive issues are covered, relatingto both absolute and relative grounds. The article also containssome helpful annexes that set out some actual comparisons ofsigns and of goods & services that have been carried outby the Luxembourg courts.     

Digital technology: its impact on copyright law and practice in North America

Legal context. The effect of rapid technological change on copyrightlaw in Canada and the United States, and in particular on thebalance between creators' rights and users' rights. Key points. Copyright law involves a balance between the rightsof both creators and users. When initially faced with fast-evolvingdigital technology, the courts struggled with the balancingact and tipped it in favour of users' rights. The Supreme Courtof Canada elevated various exceptions to infringement to userrights, and cautioned against a low standard of originalitywhich would favour creators' rights. The US Court of Appealsremarked that introduction of new technology is disruptive tocopyright owners whose works are sold through traditional mechanisms;and others suggested that a bias in favour of owners rightsmay have well impeded the development of digital culture. Despitethe initial struggles, legislative changes, market forces andrecent deference by the courts to the balancing of various interests,have slowly restored the copyright balance, even when facedwith rapid technological change. Practical significance. Copyright litigants must give carefulconsideration to the balance between creators' and users' rights,and be prepared to justify traditional copyright protectionin fields of new technology.     

Coexistence in Community trade mark disputes: conditions and implications

Legal context. A defence based on coexistence has no legal basisin the Trade Mark Directive or in the Community Trade Mark Regulation.Still, a practical approach to Community trade mark conflictsrequires attention to the situation in the marketplace whereconflicting marks may be shown to coexist without any currentconfusion or dilution being reported. Key points. Trade mark coexistence may sometimes be persuasive,the strict requirements being laid down by the Community courts.Through a detailed review of the case-law of the Community courtsand OHIM's Boards of Appeal, this article explains the conditionsfor and the consequences of proving the coexistence of the conflictingmarks in cases based on likelihood of confusion or dilution. Practical significance. Consideration must also be given tothe effects of third parties' neighbouring marks which may diminishan earlier mark's distinctive character. Accordingly, this articlefurther addresses the issue of whether the scope of protectionof a mark may be damaged by the use of later marks in the lightof the ECJ Judgment in the preliminary ruling Case C-145/05Levi Strauss v Casucci Spa.     

Human rights: in the real world

Legal context. The impact of human rights on intellectual property("IP"), particularly in the light of the Human Rights Act 1998and growing criticism of IP by civil society. Key points. There can be a greater legal, as well as political,role for human rights in the development of IP. The place ofhuman rights in IP litigation is established: see decisionsin Levi v Tesco, Ashdown v Telegraph and ITP v Coflexip. However,the impact of human rights has been limited to extreme peripheralcases, without challenging the central priority accorded tothe interests of IP owners. After considering practical applicationsin "non commercial", "hybrid" and "commercial" fields, thisarticle argues for a more pervasive and central role for humanrights, by greater reference to the Human Rights Act 1998, theEU Charter, international human rights instruments, TRIPS anddecisions of other jurisdictions. This should enable a morebalanced outcome to be reached in many, but not all, cases. Practical significance. IP owners, those challenging IP rights,and those advising them should all consider greater use of humanrights in IP litigation—not just in exceptional cases.Those resisting infringement may increase their prospect ofsuccess; those arguing for infringement will be better placedto counter arguments which may be raised. However, revisionof national, regional and international IP legislation wouldbe required to address all perceived social difficulties withIP.     

Dishonestly and without due cause

Legal context: UK trade mark law was harmonised with the laws of other EU memberstates pursuant to the Trade Marks Directive (89/104/EEC) withthe coming into force of the Trade Marks Act 1994. Since then,the English courts have sought to absorb into English jurisprudencecontinental concepts of unfair competition, and a new code relatingto the use of another's trade mark in comparative advertising.Traditionally, the English approach has been more liberal andless protective of a trade mark owner's rights than that ofcontinental jurisdictions, but since 1994 the ECJ has been calledupon to provide frequent guidance on the interpretation of expressionssuch as the "essential function" of a trade mark and the "dutyto act fairly" in relation to the legitimate interests of thetrade mark proprietor. Key points: This article examines the way in which some recent decisionsof the ECJ have led to the English courts having greater regardto the property interests of the trade mark owner and less regardto the concepts of free market competition and consumer protection.In the recent High Court case of L'Oréal and others vBellure NV and others, Lewison J made findings of infringementunder s.10(1) and (3) Trade Marks Act 1994 where he found thatthere was "free riding" on the back of the reputation of certainof L'Oreal's trade marks without there being any evidence ofconfusion or association between the trade marks and the defendants'signs. Practical significance: For trade mark owners, this change in the approach of the Englishcourts opens up new opportunities to combat look-alike productsand comparative advertisements which take unfair advantage ofthe reputation of established marks.     

Whose trade mark rights? What the Microsoft case means for trade mark owners

Legal context. The article considers the influence of the commissionruling in the Microsoft case, forcing Microsoft to use its WINDOWS-trademark for an ‘unbundled’ version of the program inthe light of the trade mark owner's properties rights. The scopeof these rights is determined by the function of the trade markand the rights that the trade mark laws confer to the ownerin case of infringement. Key points. Trade marks are protected as property rights undercommunity law. They are the embodiment of past investments andtransform the reputation of the owner into a bankable asset.Consumers rely on trade mark owners' control over quality. Thisis mirrored by the rights of the trade mark owner to stop interferencewith quality and image, in particular in the context of resaleof altered products. Any interference that would be considereda trade mark infringement if committed by a private party shouldbe considered an interference with the protected property rightif caused by a government agency. This interference is not justifiedby the public interest because trade mark rights also embodyimportant public interests. Practical significance. If the analysis proposed in the articleis followed, intellectual property rights have to be given greaterweight in shaping antitrust remedies.     

The overlap between registered Community designs and Community trade marks

Legal context: Community trade marks and registered Communitydesigns have co-existed since April 2003. The relevant Europeanlegislation permits some subject matter to be registered undereither or both of these regimes. Key points In the absence of an express prohibition, it wasperhaps inevitable that the owners of distinctive designs wouldconsider registering them as trade marks and, conversely, thatthe owners of certain non-conventional trade marks might takeadvantage of opportunities for cheap and speedy registrationunder the designs system. The ability to obtain registered Communitydesigns and trade marks for the same subject matter is consideredhere. Practical significance A party seeking to protect the designof a distinctive product shape or its packaging may be ableto register it as a Community trade mark where it has missedthe boat for claiming novelty as a registered design, or wherea pre-existing design right is about to expire. On the otherhand, a distinctive and new logo or get-up which needs quickand cheap protection may benefit from being registered as aCommunity design. Neither the rights owners, nor those againstwhom they seek to assert their rights, should accept the validityof a registered Community design without question since thereis no substantive examination procedure. However, where valid,it can provide a powerful alternative to a trade mark and auseful additional weapon against unfair competition.     

Trade mark use in transit: EU-phony or cacophony?

Legal context The present article discusses the opinion of Advocate-GeneralJacobs in Case C-405/05 Class International BV v Unilever NVand others, according to which trade mark owners cannot opposethe entry into the European Union of grey market non-Communitygoods placed in external transit, on the grounds of Article5(1) of the Trade Mark Directive, or any equivalent provision,as such entry does not constitute trade mark use. Key points We examine the consistency of this approach withprior case law of the European Court of Justice, namely in theCommission v France, Rioglass, The Polo/Lauren and Rolex casesand draw a parallelism with Council Regulation (EC) 1383/2003. Practical significance We conclude that trade mark owners shouldbe allowed to prohibit the placing in transit of goods whichwould infringe an intellectual property right under the lawof the transit country, unless the owner or consignor of thelitigious goods can undeniably prove that the goods are notdestined for the internal market. Stop press. At the end of the article the authors provide abrief analysis of the European Court of Justice's decision of18th October 2005 in this case.     

Mediation of Intellectual Property disputes

Legal and practical context. Mediation can bring real benefitsin avoiding protracted and costly IP litigation and is suitablefor most IP disputes except where a matter of principle, suchas construction of patent claims, requires resolution. Key points. Mediation may be used at any time to resolve a dispute.The courts can give robust encouragement by means of costs sanctionsand ADR orders but cannot compel the use of mediation. The Proceedsof Crime Act 2002 may apply to some mediated settlements, particularlythose involving trade mark and copyright infringement disputes. Practical significance. The courts and the Patent Office areactively seeking ways to encourage mediation of IP disputesand the Patent Office has announced the setting up of a mediationscheme.     

The irresistible force of freedom of speech meets the immovable object: trade mark law in South Africa

Legal context. The right of freedom of expression is a fundamentalright entrenched in the Bill of Rights incorporated in the SouthAfrican Constitution. While intellectual property rights donot enjoy this status, they are internationally recognised rightsgranted by a law of general application and may thus in termsof the Constitution limit the fundamental rights protected inthe Bill of Rights, and more particularly the right of freedomof expression. Where the enforcement of trade mark rights comes into conflictwith the right of freedom of expression, the two rights mustbe weighed up against one another and the competing interestsof the owner of the trade mark against the claim of expressionof a user without permission must be considered. The departurepoint of the weighing up process is that neither right is superiorto the other. Key points. This article discusses an action brought by SabmarkInternational, which claimed that Laugh It Off Promotions CCinfringed its registered trade mark BLACK LABEL in respect ofbeer by using a corruption of this mark with strong politicalundertones as ornamentation on T-shirts sold by it. It was claimedthat the offending use diluted Sabmark's registered trade mark.In an appeal, the Constitutional Court rejected the claim onthe basis that Sabmark had not shown that the offending usewas likely to cause economic damage to it. Practical significance. The case in effect equated trade markrights with rights enshrined in the Bill of Rights and thusgave important recognition to intellectual property rights.It created a precedent in intellectual property law, if notin South African law in general, in that the constitutionalcourt overruled a decision of the Supreme Court of Appeal (SCA)and in effect ruled that the SCA had not interpreted the relevantprovision of the Trade Marks Act correctly.     

EU Directive on unfair commercial practices--a UK perspective

Legal context. Lack of any catch-all law of unfair competitionin the UK – difficulty for brand owners in protectingtheir IP rights with regard to look-alike products. UK remediessuch as passing-off and trade mark infringement have provedtoo narrow. EU Directive will add to the remedies availableand may assist brand owners in their battle against look-a-likeproducts. Key points. Legal position on look-a-likes in the UK –objectives of the new Directive. Analysis of the two main waysto establish a commercial practice is unfair in the look-a-likecontext. The likely effect of the Directive in the UK on copycatsyndrome and looking to the future. Practical significance. Brand owners may use the new law alongwith the old to stamp out look-a-like activities. Practicalapplication of the test under the Directive. Remedies includecourt orders to stop and prevent unfair commercial practiceto optional possibility of court-imposed requirement to publisha corrective statement or fine – if latter is introducedinto the UK would be an additional deterrent factor of practicalvalue.     

Walking the groundless threats minefield

Legal context. It is one of the peculiarities of UK law thatthreatening litigation of IP rights can, in some circumstances,give rise to an action for "groundless threats". This has thepotential to cause great disruption to the right-holder's case.There is even the potential for professional advisors to endup in the dock where they made the threat on their client'sbehalf, raising the possibility of a conflict of interest preventingthe advisers from continuing to act. Key points. To minimise the risk of these scenarios, intellectualproperty law advisors, be they patent or trade mark attorneysor solicitors, should be aware of the provisions that governgroundless threats actions for the various IP rights, particularlyin light of the recent changes brought in by the Patents Act2004 and the further changes expected to the groundless threatsprovisions relating to designs. These alterations increasinglycomplicate what has always been a nebulous area of the law.In addition, there is considerable tension between the "talkfirst, sue later" philosophy underlying the Civil ProcedureRules and the "sue first, talk later" approach traditionallyused to circumvent threats actions. Reckitt recently confirmedthat the groundless threats provisions, while running counterto the purpose of the CPR, cannot be ignored by the Courts.This article provides an overview of the current state of thegroundless threats provisions that apply to the various IP rights,and considers how IP owners and their advisors can best navigatethe groundless threats minefield. Practical significance. Groundless threats form a complex andchanging area of IP law in the UK, which advisers need to takeinto account in virtually every dispute. Amendments made toSection 70 of the Patents Act 1977 have not provided a threatspanacea to patent holders and it remains to be seen how thesection will be interpreted by the Courts. What is clear isthat the threats provisions contained in the IP legislationwill remain in force in one form or another for the foreseeablefuture and that they remain a trap for the unwary.     

Pre-sale misrepresentations in passing off: an idea whose time has come or unfair competition by the back door?

Legal context. This article addresses the scope of the tortof passing off in English common law. Key points. The scope of passing off has traditionally beenlimited to confusion at the point of sale. Developments in marketpractice and trade mark law may argue in favour of extendingthat scope to cover both pre- and post-sale confusion. However,such an extension raises commonly voiced concerns about theintroduction of a general tort of unfair competition into Englishlaw. This article considers the specific issue of pre-sale confusionand concludes that there is both the need and the scope to bringit within reach of passing off. To do so would not amount tothe introduction of a general tort of unfair competition, butwould be entirely consistent with the rationale which has alwaysbeen the foundation for the tort. Practical significance. The conclusion advocated in this articlewould expand the range of conduct on which passing off claimscould be based and would increase the protection afforded tothe owners of famous brands.     

Strong trade marks and the likelihood of confusion in European law

Legal context. One of the fundamental assumptions of trade marklaw is that provision should be made to prevent the registrationor commercial exploitation of trade marks that are likely tobe confused with earlier marks. The justification for this assumptionis however unclear. Is it to protect the expectation of itsowner that a trade mark will provide a comfort zone, an areawithin which other traders simply may not enter? Is it to encourageinvestment in the development of a relationship between thetrade mark owner and his prospective customers by offering interference-freemarketing opportunities? Is it to protect the efficiency ofthe market by facilitating the making of decisions by consumersas to which product or process they wish to purchase? Or isit to protect the vulnerable consumer against the personal consequencesof his inattention or inability to discern the differences betweenproducts or services? Key points. This article examines the development of Europeanlaw relating to the protection of strong trade marks, thosewhich are highly distinctive or well known, against similarmarks that may or may not be likely to cause consumer confusion.It demonstrates the manner in which the European Court of Justiceseeks to address the likelihood of confusion in terms whichappear to draw more from legal abstractions than from marketrealities. After giving a favourable review of the controversialdecision of that court in the PICARO/PICASSO case, the articlelists further issues which European trade mark litigation hasso far failed to address. Practical significance. Armed with an understanding of the principlesemployed by the European Court of Justice, trade mark proprietorsin Europe will obtain a better appreciation of the strategiesto be used in either challenging competitors' marks in courtor adopting commercial measures to combat them.     

Can these things be resolved?

This is a report of a presentation on 5th July 2006 by DavidTatham. It focuses on introducing the Uniform Domain Name DisputeResolution Policy (UDRP) and on the ADR procedure of the (then)newly launched .eu domain. The first part provides an excellentintroduction to lawyers     

Questions on the law of evidence in plant variety infringement proceedings

Legal context. Section 940 of the German Civil Procedure Actproviding interim injunctions is applicable, inter alia, inthe enforcement of Plant Variety Rights. Key points. The nature of plants, as living organisms, meansthat the enforcement of intellectual property rights againstalleged infringers raises issues of proof and evidence thatare unique to their subject matter. Practical significance. Interim injunctions have great practicalimportance in Plant Variety infringement cases. Significantevidence problems exist due to the natural variations in plants.This article discusses the practical requirements for establishingevidence of infringement of plant variety rights in actionson the merits as well as in interim injunction proceedings.     

Don't be a Martyr to Res Judicata

The High Court rules that a party who unsuccessfully opposesa trade mark application cannot later re-challenge the validityof the same trade mark by way of defence to an infringementclaim.