Guidebook to Intellectual Property 9781509948673, 9781509948703, 9781509948697

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GUIDEBOOK TO INTELLECTUAL PROPERTY This is the new edition of a unique book about intellectual property. It is for those new to the subject, both law students and others such as business people needing some idea of the subject. It provides an outline of the basic legal principles, educating the reader as to the shape of the law. Critically, it also gives an insight into how the system actually works. You cannot understand chess by merely learning the rules – you also have to know how the game is played: so too with intellectual property. The authors deliberately avoid technicalities: keeping things simple, yet direct. There are no footnotes to distract. Although cases are, inevitably, referred to, they are explained in a pithy, accessible manner. All major areas of IP – patents, trade marks, copyright and designs – are covered, along with briefer treatment of other rights and subjects such as breach of confidence, plant varieties and databases. A novice reader should come away both with a clear outline of IP law and a feeling for how it works. Students will be able to put their more detailed study into perspective. Users will be able to understand better how IP affects them and their businesses.

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Guidebook to Intellectual Property Seventh Edition

Sir Robin Jacob Matthew Fisher and

Lynne Chave

HART PUBLISHING Bloomsbury Publishing Plc Kemp House, Chawley Park, Cumnor Hill, Oxford, OX2 9PH, UK 1385 Broadway, New York, NY 10018, USA 29 Earlsfort Terrace, Dublin 2, Ireland HART PUBLISHING, the Hart/Stag logo, BLOOMSBURY and the Diana logo are trademarks of Bloomsbury Publishing Plc First published in Great Britain 2022 Copyright © Sir Robin Jacob, Matthew Fisher and Lynne Chave, 2022 Sir Robin Jacob, Matthew Fisher and Lynne Chave have asserted their right under the Copyright, Designs and Patents Act 1988 to be identified as Authors of this work. All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without prior permission in writing from the publishers. While every care has been taken to ensure the accuracy of this work, no responsibility for loss or damage occasioned to any person acting or refraining from action as a result of any statement in it can be accepted by the authors, editors or publishers. All UK Government legislation and other public sector information used in the work is Crown Copyright ©. All House of Lords and House of Commons information used in the work is Parliamentary Copyright ©. This information is reused under the terms of the Open Government Licence v3.0 (http://www.nationalarchives.gov.uk/doc/ open-government-licence/version/3) except where otherwise stated. All Eur-lex material used in the work is © European Union, http://eur-lex.europa.eu/, 1998–2022. A catalogue record for this book is available from the British Library. A catalogue record for this book is available from the Library of Congress. ISBN: PB: 978-1-50994-867-3 ePDF: 978-1-50994-869-7 ePub: 978-1-50994-868-0 Typeset by Compuscript Ltd, Shannon

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PREFACE TO THE SEVENTH EDITION Thomas Blanco White wrote three little books in the late 1940s. These were called Patents and Registered Designs (64 pages), Trade Marks and Unfair Competition (72 page) and the third was simply called Copyright (90 pages). The price of each was 4/-, (now 20p). They were written for ‘business men’, ‘manufacturers’ and ‘traders’. They were not for students – for the very practical reason that there were none for no-one taught these subjects at any UK university. It would not be until 1967 that the first university course on what is now called ‘intellectual property’ was started at the LSE by Blanco’s pupil, William Cornish. In 1962 Blanco combined the three little books into one called Industrial Property and Copyright (225 pages). The price was 25s (now £1.25). Robin Jacob joined Blanco’s Chambers in 1967. Blanco asked him to help with the next edition which the then publishers, Sweet & Maxwell, made as part of series called Concise College Texts. For the first time, students formed part of the intended readership. But the book was not, and still is not, intended for students alone. Business people, traders, publishers, importers and manufacturers are still part of our target audience. And it would do economists, competition authorities and journalists good to read it – to refrain from interfering or pontificating about the system until they have understood how it really works. This book does not try to expound the detail of the law (which has changed a lot). It is largely, aimed at how the law actually works. Whether the reader is a student, in business or even a lawyer from outside this area of law, what we intend is what Blanco intended: that the essential nature of living IP law be described. That is why there are no footnotes, few case references in the text and little attempt at any detailed exposition– after all this is intended to be more like a story book than a reference work. What we want is the reader to come away with a good idea of how IP works in practice. It is that conveying a sense of how IP works which makes this book special and different – what Blanco achieved with his pamphlets. Some of the text, we are glad to say, remains his. And some of it is so relevant now that we wish economists and competition lawyers would not only read it but understand it. One of the authors (Robin Jacob) even read a passage from the 1947 patent pamphlet at the 2008 European Commission’s presentation of its preliminary findings in its Pharma Inquiry. The Commission thought it had discovered new things about the patent system called ‘patent clusters’. But Blanco described them back in 1947 and you will find the same passage here in Chapter 5 (see ‘Improvement Patents’). It was all there from Blanco all those years ago. No other work we know contains such a description – yet that is part of how the system works both now and has done at

vi  Preface to the Seventh Edition least since the modern era of patents started with the procedural reforms of the mid-nineteenth century. Perhaps it goes back to Boulton and Watt. As we said in Preface to the last edition, we regard ourselves as custodians rather than authors of this book. Our job has been to preserve it by bringing up to date such detail as it contains but to avoid changing it. We hope we have succeeded. Robin Jacob, UCL and 8 New Square, Lincoln’s Inn Matthew Fisher and Lynne Chave, UCL

CONTENTS Preface to the Seventh Edition��������������������������������������������������������������������������������������v Table of Cases������������������������������������������������������������������������������������������������������������ xix PART I INTRODUCTION 1. Imitation, Monopoly and Control.......................................................................3 Introduction�������������������������������������������������������������������������������������������������������������3 Kinds of Intellectual Property��������������������������������������������������������������������������������3 ‘Exclusive Rights’������������������������������������������������������������������������������������������������������4 Registered and Unregistered Rights����������������������������������������������������������������������6 Foreign Law��������������������������������������������������������������������������������������������������������������6 Spatial and Temporal Monopolies�������������������������������������������������������������������������6 Other Things�������������������������������������������������������������������������������������������������������������7 Exclusive Licensees��������������������������������������������������������������������������������������������������7 The Scheme of this Book�����������������������������������������������������������������������������������������7 2. Courts, Remedies and Legal Actions...................................................................9 Civil and Criminal Law�������������������������������������������������������������������������������������������9 The UK Civil Courts������������������������������������������������������������������������������������������������9 The Continued Importance of EU Law���������������������������������������������������������������10 Dispute Fora Other than Courts��������������������������������������������������������������������������11 Infringement, Revocation, Declarations and Threats Claims��������������������������12 When to Sue�����������������������������������������������������������������������������������������������������������13 Time�������������������������������������������������������������������������������������������������������������������������14 Costs������������������������������������������������������������������������������������������������������������������������15 Remedies�����������������������������������������������������������������������������������������������������������������15 Introduction���������������������������������������������������������������������������������������������������15 Interim (‘interlocutory’) Injunctions����������������������������������������������������������16 The Final Injunction��������������������������������������������������������������������������������������17 Financial Remedies����������������������������������������������������������������������������������������17 Damages�����������������������������������������������������������������������������������������18 Account of Profits��������������������������������������������������������������������������19 Other Remedies���������������������������������������������������������������������������������������������19 Seizure of Infringing Goods���������������������������������������������������������������������������������20

viii  Contents 3. Patent, Copyright or Design?..............................................................................21 Introduction�����������������������������������������������������������������������������������������������������������21 Patents���������������������������������������������������������������������������������������������������������������������21 When Patents Suffice�������������������������������������������������������������������������������������21 Designs: Registered and Unregistered�����������������������������������������������������������������22 Design Registration���������������������������������������������������������������������������������������22 Unregistered Design Right���������������������������������������������������������������������������22 Copyright����������������������������������������������������������������������������������������������������������������23 Computer Software����������������������������������������������������������������������������������������23 Periods of Protection���������������������������������������������������������������������������������������������24 Patents�������������������������������������������������������������������������������������������������������������24 Registered Designs�����������������������������������������������������������������������������������������24 UDR�����������������������������������������������������������������������������������������������������������������25 Copyright��������������������������������������������������������������������������������������������������������25 A  Role for Trade Marks?��������������������������������������������������������������������������������������25 ‘Imitations’ and Copying���������������������������������������������������������������������������������������25 Another Way?���������������������������������������������������������������������������������������������������������26 PART II PROTECTING THE PRODUCT 4. Patents and How to Get Them............................................................................29 Introduction�����������������������������������������������������������������������������������������������������������29 The Patent Law System������������������������������������������������������������������������������������������29 When Is an Invention Patentable?�����������������������������������������������������������������������30 Non-inventions����������������������������������������������������������������������������������������������30 Excluded Inventions��������������������������������������������������������������������������������������31 Industrial Applicability���������������������������������������������������������������������������������31 Novelty������������������������������������������������������������������������������������������������������������31 Inventive Step�������������������������������������������������������������������������������������������������32 Entitlement: Who Can File a Patent Application?���������������������������������������������32 Inventions Made by Employees�������������������������������������������������������������������32 The Patent Specification����������������������������������������������������������������������������������������34 Patent Attorneys�����������������������������������������������������������������������������������������������������34 When to File?����������������������������������������������������������������������������������������������������������35 The UK Application Process���������������������������������������������������������������������������������36 Filing an Initial Application�������������������������������������������������������������������������36 Filing the Final Specification������������������������������������������������������������������������37 Preliminary Examination, Search and Publication�����������������������������������37 Substantive Examination������������������������������������������������������������������������������38 Grant, Term and Costs����������������������������������������������������������������������������������39 Amendment after Grant����������������������������������������������������������������������������������������40 Revocation after Grant������������������������������������������������������������������������������������������40

Contents  ix The Invention is Not Patentable�������������������������������������������������������������������41 Insufficiency����������������������������������������������������������������������������������������������������41 Non-entitlement���������������������������������������������������������������������������������������������42 Impermissible Amendment��������������������������������������������������������������������������42 Ownership��������������������������������������������������������������������������������������������������������������42 A Brief History�������������������������������������������������������������������������������������������������������43 5. Important Inventions������������������������������������������������������������������������������������������44 Introduction�����������������������������������������������������������������������������������������������������������44 Where Others have Tried��������������������������������������������������������������������������������������44 An Important Invention����������������������������������������������������������������������������������������45 Protection Abroad��������������������������������������������������������������������������������������������������45 The European Application Process����������������������������������������������������������������������46 The Application Process��������������������������������������������������������������������������������46 A  Unified Patent Court and Unitary Patent����������������������������������������������47 EPO Oppositions�������������������������������������������������������������������������������������������47 Post-grant Amendment��������������������������������������������������������������������������������48 The Patent Cooperation Treaty����������������������������������������������������������������������������48 What Route to Take?����������������������������������������������������������������������������������������������49 ‘Improvement’ Patents�������������������������������������������������������������������������������������������51 Action for Infringement or Revocation��������������������������������������������������������������52 The Scope of a Patent: Claims and Equivalents�������������������������������������������������52 What Amounts to Infringement?������������������������������������������������������������������������54 Delayed Actions�����������������������������������������������������������������������������������������������������55 6. More about Patents����������������������������������������������������������������������������������������������57 The Importance of Validity�����������������������������������������������������������������������������������57 Evading Patents������������������������������������������������������������������������������������������������������57 By ‘Designing Around’����������������������������������������������������������������������������������58 By Making Something ‘Old’�������������������������������������������������������������������������58 Licensing�����������������������������������������������������������������������������������������������������������������59 The General Principle������������������������������������������������������������������������������������59 Limits on Licensing and Exploitation���������������������������������������������������������60 Compulsory Licensing����������������������������������������������������������������������������������61 Supplementary Protection Certificates���������������������������������������������������������������61 Taxation and Patents����������������������������������������������������������������������������������������������62 Drugs and Similar Chemical Compounds���������������������������������������������������������62 Problems���������������������������������������������������������������������������������������������������������62 ‘Selection’ Patents�������������������������������������������������������������������������������������������63 Genetic Engineering����������������������������������������������������������������������������������������������64 Rights in New Forms of Plants�����������������������������������������������������������������������������65 The Government’s Right to Work Patents�����������������������������������������������������������66 Keeping Inventions Secret for National Security�����������������������������������������������67

x  Contents 7. Industrial Designs������������������������������������������������������������������������������������������������68 Introduction�����������������������������������������������������������������������������������������������������������68 UK Registered Designs������������������������������������������������������������������������������������������69 Registration Abroad��������������������������������������������������������������������������������������70 Scope of Protection����������������������������������������������������������������������������������������71 UK Unregistered Design Right����������������������������������������������������������������������������72 EU UDR, CUDR and SUDR��������������������������������������������������������������������������������73 Copyright and Designs������������������������������������������������������������������������������������������74 Use of Other Rights to Protect Designs��������������������������������������������������������������74 PART III TRADE MARKS, PASSING OFF AND UNFAIR COMPETITION 8. Trade Marks and Passing Off�����������������������������������������������������������������������������77 Introduction�����������������������������������������������������������������������������������������������������������77 Passing Off and Registration of Trade Marks�����������������������������������������������������77 What Does Passing Off Do That Registration of Marks Can’t?�������������������������������������������������������������������������������������������79 Kinds of Registered Trade Marks�����������������������������������������������������������������79 Trade Mark Conflicts������������������������������������������������������������������������������������80 9. Trade Mark Registration�������������������������������������������������������������������������������������82 Introduction�����������������������������������������������������������������������������������������������������������82 Absolute Grounds��������������������������������������������������������������������������������������������������82 The Mark Must be Distinctive����������������������������������������������������������������������83 The Mark Must Not be Contrary to Public Policy or Morality��������������������������������������������������������������������������������������������������84 The Mark Must Not be Deceptive����������������������������������������������������������������85 The Mark Must Not be a Specially Protected Emblem�����������������������������85 The Mark Must Not be Applied for in Bad Faith���������������������������������������85 Special Requirements for Shape and Other Non-conventional Trade Marks�������������������������������������������������������������������������������������������86 Relative Grounds: Earlier Marks and Rights������������������������������������������������������87 Earlier Trade Marks���������������������������������������������������������������������������������������88 Other Earlier Rights��������������������������������������������������������������������������������������89 Applications and Oppositions������������������������������������������������������������������������������89 Classification of Goods and Services����������������������������������������������������������90 The Applicant�������������������������������������������������������������������������������������������������90 Examination���������������������������������������������������������������������������������������������������90 Acceptance and Publication�������������������������������������������������������������������������91 Opposition������������������������������������������������������������������������������������������������������91 Registration�����������������������������������������������������������������������������������������������������92

Contents  xi 10. Trade Mark Infringement�������������������������������������������������������������������������� 93 Introduction�����������������������������������������������������������������������������������������������������������93 What Activities Can a Registered Trade Mark Stop?����������������������������������������93 Expanding Trade Mark Functions���������������������������������������������������������������95 The Tests for Infringement�����������������������������������������������������������������������������������95 (i) Identical Marks and Identical Goods/Services����������������������������������95 (ii) Identical Marks and Similar Goods/Services, or Similar Marks and Identical Goods/Services��������������������������������97 (iii) Identical or Similar Marks and Identical, Similar or Dissimilar Goods/Services������������������������������������������������98 Dilution������������������������������������������������������������������������������������������99 Tarnishment�����������������������������������������������������������������������������������99 Taking an Unfair Advantage������������������������������������������������������100 Use��������������������������������������������������������������������������������������������������������������������������100 Who to Sue?����������������������������������������������������������������������������������������������������������101 Contested Actions������������������������������������������������������������������������������������������������102 11. Exceptions to Trade Mark Infringement������������������������������������������������������ 103 Introduction���������������������������������������������������������������������������������������������������������103 Use of Own Name or Address����������������������������������������������������������������������������103 Descriptive and Non-distinctive Use����������������������������������������������������������������103 Referential Use�����������������������������������������������������������������������������������������������������104 But there Must be Honesty���������������������������������������������������������������������������������105 Comparative Advertising������������������������������������������������������������������������������������105 Earlier Rights��������������������������������������������������������������������������������������������������������106 Use of Defendant’s Own Registered Mark��������������������������������������������������������106 12. Removal from the Register – Revocation and Invalidity��������������������������� 107 Introduction���������������������������������������������������������������������������������������������������������107 Grounds for Revocation��������������������������������������������������������������������������������������107 Non-use���������������������������������������������������������������������������������������������������������107 The Mark has become a Common Name in the Trade���������������������������110 The Mark has become Misleading�������������������������������������������������������������111 Partial Revocation����������������������������������������������������������������������������������������111 Grounds for Declaration of Invalidity���������������������������������������������������������������111 13. EU Trade Marks, ‘International’ Registration and Well-Known Marks.................................................................................................................... 113 Introduction���������������������������������������������������������������������������������������������������������113 The EU Trade Mark���������������������������������������������������������������������������������������������113 Applications for an EU Trade Mark����������������������������������������������������������114 Applications for Revocation or Invalidity������������������������������������������������115 Infringement Actions����������������������������������������������������������������������������������115

xii  Contents ‘International’ Registration of Trade Marks�����������������������������������������������������116 Well-Known Marks����������������������������������������������������������������������������������������������116 14. Collective Marks, Certification Marks and Geographical Indications........................................................................................................... 118 Introduction���������������������������������������������������������������������������������������������������������118 Collective Marks��������������������������������������������������������������������������������������������������118 Application for Registration�����������������������������������������������������������������������118 Infringement�������������������������������������������������������������������������������������������������119 Revocation and Invalidity���������������������������������������������������������������������������119 Certification Marks����������������������������������������������������������������������������������������������120 Application for Registration�����������������������������������������������������������������������120 Infringement�������������������������������������������������������������������������������������������������121 Revocation and Invalidity���������������������������������������������������������������������������121 Geographical Indications������������������������������������������������������������������������������������121 15. Passing Off���������������������������������������������������������������������������������������������������������� 123 A General Rule�����������������������������������������������������������������������������������������������������123 Varieties of Passing Off����������������������������������������������������������������������������������������123 ‘Badges’ and Reputations������������������������������������������������������������������������������������124 The Risk of Deception���������������������������������������������������������������������������������125 Get-up Cases������������������������������������������������������������������������������������������������126 Business Names��������������������������������������������������������������������������������������������127 Exceptional Cases Where Confusion is Tolerated�����������������������������������127 Use of Own Name�����������������������������������������������������������������������127 Descriptive Names and Marks��������������������������������������������������128 Marks that the Public Treats as Descriptions��������������������������128 ‘Extended’ Passing Off���������������������������������������������������������������������������������129 Odd and Unusual Instances��������������������������������������������������������������������������������130 Where the Claimant Does Not Trade��������������������������������������������������������130 Other Odd Instances�����������������������������������������������������������������������������������131 Suing for Passing Off�������������������������������������������������������������������������������������������132 16. Malicious Falsehood and Other Actions........................................................ 134 Introduction���������������������������������������������������������������������������������������������������������134 Malicious Falsehood��������������������������������������������������������������������������������������������134 Riding v Smith, 1876������������������������������������������������������������������������������������134 Hayward & Co v Hayward & Sons, 1887��������������������������������������������������135 Mentmore v Fomento, 1955�������������������������������������������������������������������������135 De Beers v General Electric, 1975���������������������������������������������������������������135 Compaq v Dell, 1992������������������������������������������������������������������������������������135 DSG Retail v Comet Group, 2002���������������������������������������������������������������136 Conclusion����������������������������������������������������������������������������������������������������136 Domain Name Disputes��������������������������������������������������������������������������������������137

Contents  xiii Company Name Disputes�����������������������������������������������������������������������������������138 Advertising Standards Controls�������������������������������������������������������������������������139 PART IV COPYRIGHT AND RELATED RIGHTS 17. Introduction to Copyright������������������������������������������������������������������������������� 143 Introduction���������������������������������������������������������������������������������������������������������143 The Nature of Copyright�������������������������������������������������������������������������������������143 Copyright, Reputations and Competition��������������������������������������������������������145 Types of Copyright Dispute��������������������������������������������������������������������������������146 Copyright in Practice������������������������������������������������������������������������������������������146 Copyright and Confidence���������������������������������������������������������������������������������146 Old Copyright Works������������������������������������������������������������������������������������������147 A Short History����������������������������������������������������������������������������������������������������147 18. Works: The Subject of Copyright.................................................................... 149 Works: A Closed List�������������������������������������������������������������������������������������������149 Merit, Originality and Substance���������������������������������������������������������������150 Triviality��������������������������������������������������������������������������������������������������������150 Updated Works��������������������������������������������������������������������������������������������151 Compilations and Databases����������������������������������������������������������������������152 Photographs and Sound Recordings���������������������������������������������������������153 Foreign Works����������������������������������������������������������������������������������������������153 EU Influence on Originality and Works�����������������������������������������������������������154 Illegal and Immoral Works���������������������������������������������������������������������������������155 Overlapping Rights����������������������������������������������������������������������������������������������156 Translations��������������������������������������������������������������������������������������������������156 Other Cases��������������������������������������������������������������������������������������������������157 19. Authorship, Ownership and Term of Copyright.......................................... 158 Introduction���������������������������������������������������������������������������������������������������������158 The Basic Rule – Copyright Belongs to the Author�����������������������������������������158 Literary, Dramatic, Musical or Artistic Works�����������������������������������������158 Computer-Generated Works�����������������������������������������������������159 Entrepreneurial Works��������������������������������������������������������������������������������159 Joint Authorship�������������������������������������������������������������������������������������������159 Exception 1 – Works by Employees�������������������������������������������������������������������160 Exception 2 – Commissioned Works����������������������������������������������������������������161 Crown and Parliamentary Copyright����������������������������������������������������������������162 Where Authorship is Uncertain�������������������������������������������������������������������������162 Orphan Works������������������������������������������������������������������������������������������������������162 Duration and its Link to the Author and the Work����������������������������������������163 Authorial Works�������������������������������������������������������������������������������������������163

xiv  Contents Crown Copyright�����������������������������������������������������������������������������������������163 Entrepreneurial Works��������������������������������������������������������������������������������164 20. What Is Infringement of Copyright?������������������������������������������������������������� 165 Introduction���������������������������������������������������������������������������������������������������������165 Primary and Secondary Infringement��������������������������������������������������������������165 A Derivative Link is Crucial�������������������������������������������������������������������������������165 Proving Derivation��������������������������������������������������������������������������������������166 Infringement by Reproduction��������������������������������������������������������������������������167 Copying���������������������������������������������������������������������������������������������������������167 A Substantial Part Must be Copied�����������������������������������������������������������167 Where Some Part (But Only a Small Part) is Copied Exactly������������������������������������������������������������������������168 Where there is Merely a Similarity of Form or General Idea����������������������������������������������������������������������������169 Example 1�������������������������������������������������������������������������������������170 Example 2�������������������������������������������������������������������������������������171 Changes in Material Form���������������������������������������������������������171 Other Forms of Primary Infringement�������������������������������������������������������������172 Issuing Copies to the Public�����������������������������������������������������������������������172 Publishing an Unpublished Work��������������������������������������������������������������172 Renting/Lending a Work����������������������������������������������������������������������������173 Performing/Showing a Work in Public�����������������������������������������������������173 Communicating a Work to the Public������������������������������������������������������173 Adaptation����������������������������������������������������������������������������������������������������175 Getting Others to Infringe and Similar Cases������������������������������������������175 Secondary Infringement�������������������������������������������������������������������������������������176 21. What Is Not Infringement?...................................................................... 178 Introduction���������������������������������������������������������������������������������������������������������178 The Owner of the Copyright Cannot Control Legitimate Copies�������������������������������������������������������������������������������������178 Specific Exceptions����������������������������������������������������������������������������������������������179 Temporary Copies���������������������������������������������������������������������������������������179 ‘Fair Dealing’ Defences�������������������������������������������������������������������������������180 Non-commercial Research and Private Study�������������������������180 Non-commercial Text and Data Analysis��������������������������������180 Criticism, Review or Quotation and Reporting Current Events���������������������������������������������������������������������������������������181 Parody, Caricature and Pastiche������������������������������������������������182 Other Statutory Defences���������������������������������������������������������������������������183 Incidental Inclusion��������������������������������������������������������������������183 An Artist Reusing Sketches, etc.������������������������������������������������183

Contents  xv Representation of Artistic Works in Public Places�����������������183 Broadcasts������������������������������������������������������������������������������������183 Time-Shifting�������������������������������������������������������������������������������184 Computer Programs�������������������������������������������������������������������184 Other Cases����������������������������������������������������������������������������������184 Problematic Situations�����������������������������������������������������������������������������������������185 Personal Copies for Private Use�����������������������������������������������������������������185 The Public Interest, Control of Information and the Human Rights Act���������������������������������������������������������������������������������������������185 22. Dealings in Copyright�������������������������������������������������������������������������������������� 187 Introduction���������������������������������������������������������������������������������������������������������187 Formal Problems��������������������������������������������������������������������������������������������������187 On Transfers of Copyright��������������������������������������������������������������������������187 Foreign Formalities���������������������������������������������������������������������188 On Licensing������������������������������������������������������������������������������������������������189 Contracts Relating to Copyright������������������������������������������������������������������������189 Implied Terms����������������������������������������������������������������������������������������������190 Where Works are Made to Order����������������������������������������������190 Where a Publisher Agrees to Publish an Author’s Work�������������������������������������������������������������������������191 Bequests of Copyright Works����������������������������������������������������191 Sales of Part of a Copyright������������������������������������������������������������������������192 Publishing Agreements�������������������������������������������������������������������������������192 Literary Agents����������������������������������������������������������������������������193 Manuscripts Sent for Advice����������������������������������������������������������������������193 Collective Licensing�������������������������������������������������������������������������������������193 Taxation and Authors������������������������������������������������������������������������������������������194 23. Moral and Other Related Rights�������������������������������������������������������������������� 196 Moral Rights���������������������������������������������������������������������������������������������������������196 Introduction�������������������������������������������������������������������������������������������������196 Right to be Identified as the Author����������������������������������������������������������196 Right to Object to Derogatory Treatment������������������������������������������������197 False Attribution of Authorship�����������������������������������������������������������������198 Examples��������������������������������������������������������������������������������������198 Right to Privacy of Certain Photographs and Films�������������������������������199 Duration of Moral Rights and Waiver�������������������������������������������������������199 Other Related Rights�������������������������������������������������������������������������������������������199 Performers Rights and Recording Rights�������������������������������������������������199 Artists’ Resale Right�������������������������������������������������������������������������������������200 Copy Protection – Anti-circumvention����������������������������������������������������200

xvi  Contents PART V MISCELLANEOUS MATTERS 24. The Criminal Law and Customs Seizure������������������������������������������������������� 205 Introduction���������������������������������������������������������������������������������������������������������205 The Trade Marks Act 1994����������������������������������������������������������������������������������205 The Copyright, Designs and Patents Act 1988�������������������������������������������������206 Registered Designs Act 1949������������������������������������������������������������������������������207 The Consumer Protection from Unfair Trading Regulations 2008���������������207 Other Criminal Laws�������������������������������������������������������������������������������������������207 The Practical Working of the Criminal Law�����������������������������������������������������208 As an Alternative to Civil Action���������������������������������������������������������������208 Enforcement Provisions������������������������������������������������������������������������������209 Penalties��������������������������������������������������������������������������������������������������������210 Customs Seizures�������������������������������������������������������������������������������������������������210 25. Confidence and Privacy������������������������������������������������������������������������������������ 211 Introduction���������������������������������������������������������������������������������������������������������211 Rights to Privacy������������������������������������������������������������������������������������������211 The Action for Breach of Confidence����������������������������������������������������������������212 The General Rule�����������������������������������������������������������������������������������������212 When Is Information Confidential?����������������������������������������������������������212 Circumstances Giving Rise to a Relationship of Confidence��������������������������������������������������������������������������212 Trade Secrets – What Will Be Protected?�������������������������������������������������214 Marking Things ‘Confidential’���������������������������������������������������214 Confidence and Contract�����������������������������������������������������������214 Where the Information Becomes Public Knowledge�������������214 Remedies�������������������������������������������������������������������������������������������������������215 Suing Third Parties��������������������������������������������������������������������������������������216 Problems of Proof����������������������������������������������������������������������������������������216 Where the Action Will Not Lie������������������������������������������������������������������217 ‘No Confidence in Iniquity’�������������������������������������������������������217 Disclosures in the Public Interest����������������������������������������������217 Public Policy��������������������������������������������������������������������������������217 The Duty of Confidence Must be Owed to the Claimant�����������������������218 Sale of ‘Know-How’���������������������������������������������������������������������������������������������218 The Need for Agreements�����������������������������������������������������������������������������������219 Difficult Cases�������������������������������������������������������������������������������������������������������219 Privacy and the Press�������������������������������������������������������������������������������������������220 The ‘Ordinary Citizen’ and the ‘Celebrity’������������������������������������������������221 How Much Can the Story Be Fleshed Out?����������������������������������������������222 Some Examples��������������������������������������������������������������������������������������������222

Contents  xvii A Brief Excursion into a Dry Debate����������������������������������������������������������������223 The EU Trade Secrets Directive�������������������������������������������������������������������������224 26. Database Right.................................................................................................... 225 Introduction���������������������������������������������������������������������������������������������������������225 What Is a Database?���������������������������������������������������������������������������������������������226 Subsistence of the Database Right�������������������������������������������������������������226 Criteria for Protection���������������������������������������������������������������������������������226 Duration and Dealings��������������������������������������������������������������������������������227 What the Database Right Protects���������������������������������������������������������������������227 Exceptions to Database Right Protection�������������������������������������������������227 Actions for Infringement of Database Right��������������������������������������������228 27. Reselling IP-Protected Goods: Licence or Exhaustion of Rights������������� 229 Introduction���������������������������������������������������������������������������������������������������������229 Does the Trade Activity Fall within the IP Holder’s Exclusive Rights?���������230 Consent/Licence���������������������������������������������������������������������������������������������������230 Exhaustion of IP Rights���������������������������������������������������������������������������������������231 Post-Brexit Trade between the UK, the EEA and the World�������������������������231 Free Movement of Goods within the European Economic Area������������������232 Example 1: Patents Where First Sale is in the EEA���������������������������������233 Example 2: Same with Trade Marks����������������������������������������������������������233 Example 3: Unconnected Parties���������������������������������������������������������������233 When Rights are Not Exhausted������������������������������������������������������������������������233 Example 4: Debranding�������������������������������������������������������������������������������234 28. Some International Aspects and Competition Law������������������������������������ 235 Public International Law Aspects����������������������������������������������������������������������235 A Little History��������������������������������������������������������������������������������������������235 The TRIPS Agreement��������������������������������������������������������������������������������236 Issues with TRIPS and Subsequent Developments���������������������������������237 EU Law������������������������������������������������������������������������������������������������������������������238 An Introduction to EU Legislation������������������������������������������������������������238 EU Directives and Regulations������������������������������������������������������������������239 Competition Law�������������������������������������������������������������������������������������������������239 EU Competition Law����������������������������������������������������������������������������������240 Article 101������������������������������������������������������������������������������������240 Article 102������������������������������������������������������������������������������������240 UK Competition Rules��������������������������������������������������������������������������������241 The Uneasy Relationship between Competition Law and IP�����������������241 Private International Law������������������������������������������������������������������������������������242 Foreign Intellectual Property Rights���������������������������������������������������������242 Example 1�������������������������������������������������������������������������������������242

xviii  Contents Example 2�������������������������������������������������������������������������������������242 Historical Example 3�������������������������������������������������������������������243 Patents Example 4�����������������������������������������������������������������������244 Foreign Entitlement to UK IP Rights����������������������������������������������������������������244 Index������������������������������������������������������������������������������������������������������������������������������247

TABLE OF CASES Ackroyds (London) v Islington Plastics [1962] RPC 97�����������������������������������������213 Actavis UK Ltd v Eli Lilly & Co [2017] UKSC 48, [2017] RPC 21�������������������������54 Adidas-Salomon AG v Fitnessworld Trading Ltd (C-408/01) EU:C:2003:582, [2004] ETMR 10�����������������������������������������������������������������������100 Aerotel Ltd v Telco Holdings Ltd [2006] EWCA Civ 1371, [2007] RPC 7������������30 Anheuser-Busch Inc v Budejovicky Budvar Narodni Podnik (Application for Revocation) [2002] EWCA Civ 1534, [2003] RPC 25���������������108 Ansul BV v Ajax Brandbeveiliging BV (C-40/01) EU:C:2003:145, [2003] ETMR 85����������������������������������������������������������������������������������������������������109 Apple Corps Ltd v Cooper [1993] FSR 286�������������������������������������������������������������161 Apple v Samsung [2012] EWCA Civ 1339, [2013] ECDR 2����������������������������� 19, 71 Argos Ltd v Argos Systems Inc [2018] EWCA Civ 2211, [2019] FSR 3���������������101 Argyll v Argyll [1965] 2 WLR 790, [1965] 1 All ER 611������������������������������� 213, 216 Argyllshire Weavers v A Macaulay (Tweeds) Ltd (No 3) [1964] RPC 477������������������������������������������������������������������������������������������������������������������128 Armin Haupl v Lidl Stiftung & Co KG (C-246/05) EU:C:2007:340, [2007] ETMR 61 ���������������������������������������������������������������������������������������������������109 Arsenal Football Club Plc v Reed (C-206/01) EU:C:2002:651, [2003] RPC 9�������������������������������������������������������������������������������������� 93, 94, 95, 206 Ashdown v Telegraph Group Ltd [2001] EWCA Civ 1142, [2002] RPC 5����������������������������������������������������������������������������������������������������������186 Asprey & Garrard Ltd v WRA (Guns) Ltd (t/a William R Asprey Esquire) [2001] EWCA Civ 1499, [2002] ETMR 47�������������������������������� 103, 127 Att Gen v Guardian Newspapers [1990] 1 AC 109, [1988] 3 WLR 776, [1988] 3 All ER 545���������������������������������������������������������������� 155, 213 Aveda Corp v Dabur India Ltd 2013] EWHC 589 (Ch), [2013] ETMR 33����������������������������������������������������������������������������������������������������������� 97, 98 Avnet Inc v Iosact Ltd [1997] ETMR 562, [1998] FSR 16����������������������������������������96 Bach v Longman, 98 ER 1274, (1777) 2 Cowp 623, [1777] 6 WLUK 3���������������147 BAGA v UK Gymnastics, 2021. See UK Gymnastics Ltd v British Amateur Gymnastics Association Baigent & Leigh v Random House [2007] EWCA Civ 247, [2007] FSR 24���������169 Bauman v Fussell [1978] RPC 485����������������������������������������������������������������������������171 Bellchambers, 2010 Unreported��������������������������������������������������������������������������������209 Bestobell Paints Ltd v Bigg [1975] FSR 421�������������������������������������������������������������136 Biogen Inc v Medeva PLC [1997] RPC 1, (1997) 38 BMLR 149�����������������������������41

xx  Table of Cases BMS v Paranova (C-427/93) EU:C:1996:282, [1996] ETMR 1�����������������������������234 BMW v BMW Telecommunications Ltd [2019] EWHC 411 (IPEC) �����������������139 BMW v Deenik (C-63/97) EU:C:1999:82, [1999] CMLR 1099�����������������������������105 BMW v Technosport London Ltd [2016] EWHC 797 (IPEC), [2016] FSR 34���������������������������������������������������������������������������������������������������������105 Boehringer Ingelheim KG v Swingward Ltd (C-348/04) EU:C:2007:249, [2007] ETMR 71�����������������������������������������������������������������������234 Bollinger SA v Costa Brava Wine (No 4) [1961] 1 WLR 277, [1961] 1 All ER 561�����������������������������������������������������������������������������������������������122 Boston Scientific Ltd v OHIM (T-325/06) EU:T:2008:338��������������������������������������98 Boulter, 2008. See R v Boulter (Gary) BP Amoco Plc v Kelly Ltd [2001] NI 25, [2002] FSR 5��������������������������������������������96 Braha, 2011. See R v Braha Bristol Conservatories v Conservatories Custom Built [1989] RPC 455�������������132 British Airways Plc v Ryanair Ltd [2001] ETMR 24, [2001] FSR 32����������� 104, 106 British American Glass v Winton Products (Blackpool) [1962] RPC 230��������������������������������������������������������������������������������������������������������������������74 British Horseracing Board v William Hill Organisation Ltd (C-203/02) EU:C:2004:695, [2005] 1 CMLR 15:�������������������������������������� 226, 227 British Leyland Motor Corp Ltd v Armstrong Patents Co Ltd [1986] AC 577, [1986] RPC 2792��������������������������������������������������������������������������68 British Northrop v Texteam Blackburn Ltd [1973] FSR 241, [1974] RPC 344�����������������������������������������������������������������������������������������������������150 British Sugar Plc v James Robertson & Sons Ltd [1997] ETMR 118, [1996] RPC 281���������������������������������������������������������������������������������������� 84, 96, 104 Brompton Bicycle Ltd v Chedech/Get2Get (C-833/18) EU:C:2020:79, [2020] ETMR 29������������������������������������������������������������������� 74, 154 Brüstle v Greenpeace eV (C-34/10) EU:C:2011:669, [2012] 1 CMLR 41���������������������������������������������������������������������������������������������������������������65 Bud and Budweiser Budbräu TMs, 2003. See Anheuser-Busch Inc v Budejovicky Budvar Narodni Podnik (Application for Revocation) Byrne v Statist [1914] 1 KB 622���������������������������������������������������������������������������������160 C More Entertainment AB v Sandberg (C-279/13) [2015] ECDR 15������������������174 CA Sheimer (M) Sdn Bhd’s Trade Mark Application [2000] ETMR 1170 (Note), [2000] RPC 484��������������������������������������������������������������������99 Cable & Wireless PLC v British Telecommunications PLC [1998] FSR 383�������������������������������������������������������������������������������������������������������������������134 Cadbury Ltd’s Trade Mark Application [2012] RPC 18�������������������������������������������82 Campbell v MGN [2004] UKHL 22, [2004] EMLR 15���������������������������������� 221, 222 Canon Kabushiki Kaisha v Metro Goldwyn Mayer Inc (C-39/97) [1998] ECR I-5507, [1999] 1 CMLR 77����������������������������������������������������������������97 Carflow v Linwood [1998] FSR 691����������������������������������������������������������������������������13 Case of Monopolies, 1604 11 Co Rep 84b, 77 English Reports 1260���������������������43

Table of Cases  xxi Catnic v Hill & Smith [1981] FSR 60, [1982] RPC 183��������������������������������������������53 CBS Inc v Ames Records & Tapes Ltd [1981] RPC 407�����������������������������������������176 CBS Songs Ltd v Amstrad Consumer Electronics Plc [1988] RPC 567���������������176 CDW Graphic Design’s Trade Mark Application [2003] RPC 30���������������������������84 Celine Sarl v Celine SA (C-17/06) EU:C:2007:497, [2007] ETMR 80������������������105 Cellular Clothing Co v G White & Co (1953) 70 RPC 9����������������������������������������128 Centrafarm BV v Sterling Drug Inc (C-15/74) EU:C:1974:114, [1975] FSR 161�������������������������������������������������������������������������������������������������������������������233 Chappell & Co v DC Thompson & Co [1928-1935] Mac CC 467������������������������168 Chelsea Man v Chelsea Girl [1987] RPC 189������������������������������������������������������������78 Chiemsee, 1999. See Windsurfing Chiemsee Produktions- und Vertriebs GmbH v Boots- und Segelzubehor Walter Huber (C-108/97) Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] ETMR 1020, [1999] RPC 826 �����������������������������������������������������������������129 Cipriani, 2010. See Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd Clark v Associated Newspapers [1998] 1 WLR 1558, [1998] RPC 261����������������199 Coco v AN Clark (Engineers) Ltd [1968] FSR 415, [1969] RPC 41������������ 212, 216 Cofemel – Sociedade de Vestuario SA v G-Star Raw CV (C-683/17) EU:C:2019:721, [2020] ECDR 9����������������������������������������������� 74, 154 Coin Controls v Suzo [1999] Ch 33, [1997] 3 All ER 45 ���������������������������������������244 Colgate-Palmolive BV v Koninklijke Distilleerderijen Erven Lucas Bols NV [1979] ECC 419����������������������������������������������������������������������������99 Compaq Computer Corp v Dell Computer Corp Ltd [1992] BCC 484, [1992] FSR 93������������������������������������������������������������������������������ 135, 136 Confetti Records v Warner Music UK Ltd (t/a East West Records) [2003] EWHC 1274 (Ch), [2003] ECDR 31 �����������������������������������������������������197 Constantin Film Produktion GmbH v EUIPO (C-240/18 P) EU:C:2019:553, [2019] ETMR 50�������������������������������������������������������������������������84 Cramp & Sons Ltd v Frank Smythson Ltd [1944] AC 329, [1944] 2 All ER 92�������������������������������������������������������������������������������������������������������������152 Crown Prosecution Service v Morgan [2006] EWCA Crim 1742������������������������206 Cummins v Bond [1927] 1 Ch 167���������������������������������������������������������������������������156 De Beers v General Electric [1975] 1 WLR 972, [1975] FSR 323�������������������������135 Deckmyn v Vandersteen (C-201/13) EU:C:2014:2132, [2014] ECDR 21�����������������������������������������������������������������������������������������������������������������182 Designers Guild Ltd v Russell Williams (Textiles) Ltd (t/a Washington DC): [2000] 1 WLR 2416, [2001] 1 All ER 700��������������������170 Deutsche Grammophon Gesellschaft GmbH v Metro SB Grossmarkte GmbH & Co KG (C-78/70) EU:C:1971:59, [1971] CMLR 631����������������������233 Diageo v Intercontinental Brands [2010] EWCA Civ 920, [2011] RPC 2����������������������������������������������������������������������������������������������������������������������129 Diageo v Intercontinental Brands [2010] EWHC 17 (Ch), [2010] ETMR17�����������������������������������������������������������������������������������������������������������������209

xxii  Table of Cases Dickens, Re [1935] Ch 267�����������������������������������������������������������������������������������������192 DOCERAM GmbH v CeramTec GmbH (C-395/16) EU:C:2018:172, [2018] ECDR 13�������������������������������������������������������������������������������������������������������������������70 Douglas v Hello! Ltd (No 2) [2003] EWCA Civ 139, [2003] EMLR 28 ��������������222 Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly & Co Ltd [2009] EWCA Civ 1362, [2010] RPC 9�����������������������������������������������������������������������������64 DSG Retail v Comet Group [2002] EWHC 116 (QB), [2002] FSR 58�����������������136 Dunhill Ltd v Sunoptic SA [1979] FSR 337�������������������������������������������������������������127 DUNS LICENSING ASSOCIATES/Estimating sales activity (T154/04) EP:BA:2006:T015404.20061115, [2007] EPOR 38����������������������������������������������30 Dyson Ltd v Registrar of Trade Marks (C-321/03) EU:C:2007:51, [2007] ETMR 34������������������������������������������������������������������������������������������������������82 Electrolux v Dyson, 1999, See Emaco Ltd v Dyson Appliances Ltd Eli Lilly & Co v Human Genome Sciences Inc [2011] UKSC 51, [2012] RPC 6������������������������������������������������������������������������������������������������������������64 Emaco Ltd v Dyson Appliances Ltd [1999] ETMR 903�����������������������������������������137 Erven Warnink v J Townend & Sons (Hull) Ltd [1979] AC 731, [1979] FSR 397������������������������������������������������������������������������������������������������������129 Exxon Corp v Exxon Insurance Consultants International Ltd [1982] Ch 119, [1982] RPC 69����������������������������������������������������������������������������151 Faccenda Chicken Ltd v Fowler [1987] Ch 117, [1986] FSR 291����������������� 214, 224 Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, [2014] ETMR 26������������������������������������������������������������������������������������������������������� 129, 209 Farmers Build Ltd (In Liquidation) v Carier Bulk Materials Handling Ltd [1999] RPC 461 ������������������������������������������������������������������������������72 Fenty v Arcadia Group Brands Ltd [2015] EWCA Civ 38�������������������������������������131 Ferrari SpA v DU (C-720/18) EU:C:2020:854,[2021] ETMR 9����������������������������109 Fisher v Brooker [2009] UKHL 41, [2009] FSR 25�������������������������������������������������160 Fixtures Marketing Ltd v Organismos Prognostikon Agonon Podosfairou (OPAP) (C-444/02) EU:C:2004:697, [2005] ECDR 3����������������226 Football Association Premier League Ltd v Panini UK Ltd [2003] EWCA Civ 995, [2003] ECDR 36�����������������������������������������������������������������������183 Football Association Premier League Ltd v QC Leisure (C-403/08) EU:C:2011:631, [2012] FSR 1��������������������������������������������������������������������� 154, 174 Football Dataco Ltd v Yahoo! UK Ltd (C-604/10) EU:C:2012:115, [2012] ECDR 10������������������������������������������������������������������������������������������� 226, 227 Football Dataco v Stan James [2013] EWCA Civ 27, [2013] FSR 30����������� 226, 227 Fort Dodge Animal Health Ltd v Akzo Nobel NV [1998] FSR 222 ��������������������244 Francis Day & Hunter v 20th Century Fox [1940] AC 112, [1939] 4 All ER 192�����������������������������������������������������������������������������������������������������������151 Francis Day & Hunter v Bron [1963] Ch 587, [1963] 2 All ER 16������������������������166 Fraser v Evans [1969] 1 QB 349, [1969] 1 All ER 8������������������������������������������������218 Fraser v Thames TV [1984] QB 44, [1983] 2 All ER 101���������������������������������������213

Table of Cases  xxiii Freddy SpA v Hugz Clothing Ltd [2020] EWHC 3032 (IPEC), [2021] ECDR 8������������������������������������������������������������������������������������������������������127 French Connection v Woodman [2007] ETMR 8, [2007] RPC 1���������������������������84 Frisby v BBC [1967] Ch 932, [1967] 2 All ER 106��������������������������������������������������198 Fulton Co Ltd v Totes Isotoner (UK) Ltd [2003] EWCA Civ 1514, [2004] RPC 14����������������������������������������������������������������������������������������������������������69 G 2/12 and G 3/12 (Broccoli/Tomato II) EP:BA:2015:G000212.20150325, [2016] OJ EPO A28�������������������������������������������������������������������������������������������������65 G 3/08 (Programs for computers) EP:BA:2010:G000308.20100512, [2010] EPOR 36�������������������������������������������������������������������������������������������������������30 G 3/19 (Pepper) EP:BA:2020:G000319.20200514, [2020] OJ EPO A119��������������65 GAT v LuK (C-4/03) EU:C:2006:457, [2006] FSR 45���������������������������������������������244 Gerber Garment Technology Inc v Lectra Systems Ltd [1997] RPC 443��������������18 Gerolsteiner Brunnen GmbH & Co v Putsch GmbH (C-100/02) EU:C:2004:11, [2004] ETMR 40��������������������������������������������������������������������������103 Ghazilian’s Trade Mark Application [2002] ETMR 56, [2001] RPC 33 ����������������84 Gilham, 2009. See R v Gilham Gillette Co v LA-Laboratories Ltd Oy (C-228/03) EU:C:2005:177, [2005] ETMR 67����������������������������������������������������������������������������������������������������105 Gillette v Anglo-American [1913] 30 RPC 465���������������������������������������������������������58 Gömböc Kutato, Szolgaltato es Kereskedelmi Kft v Szellemi Tulajdon Nemzeti Hivatala (C-237/19) EU:C:2020:296, [2020] ETMR 41���������������������87 Google France Sarl v Louis Vuitton Malletier SA (C-236/08) EU:C:2010:159, [2010] ETMR 30 ����������������������������������������������������������������������100 Greater Glasgow Health Board’s Application, Re [1996] RPC 207�������������������������33 Green & Co (Stoke Newington) Ltd v Regalzone Ltd [2001] EWCA Civ 639, [2002] ETMR 22�����������������������������������������������������������������������104 Griggs v Evans [2005] EWCA Civ 11, [2005] FSR 31���������������������������������������������162 Grimme v Scott [2010] EWCA Civ 1110, [2011] FSR 7�������������������������������������������55 GS Media BV v Sanoma Media Netherlands BV (C-160/15) EU:C:2016:644, [2016] ECDR 25������������������������������������������������������������������������174 Hallen v Brabantia (UK) Ltd (No 1) [1991] RPC 195����������������������������������������������59 Harris Tweed, 1964. See Argyllshire Weavers v A Macaulay (Tweeds) Ltd (No 3) Harrison v Teton Valley Trading Co Ltd [2004] EWCA Civ 1028, [2005] FSR 10�����������������������������������������������������������������������������������������������������������86 Harvard/Onco-Mouse (T 19/90) EP:BA:1990:T001990.19901003, [1991] EPOR 525�����������������������������������������������������������������������������������������������������64 Hasbro Inc v EUIPO (T-663/19) EU:T:2021:211, [2021] ETMR 39�����������������������85 Hauck GmbH & Co KG v Stokke A/S (C-205/13) EU:C:2014:2233, [2014] ETMR 60������������������������������������������������������������������������������������������������������87 Hawkes & Son (London) Ltd v Paramount Film Service Ltd [1934] Ch 593���������������������������������������������������������������������������������������������������������������������168

xxiv  Table of Cases Hayward & Co v Hayward & Sons (1886) 34 Ch D 198����������������������������������������135 Heidelberger Bauchemie GmbH’s Trade Mark Application (C-49/02) EU:C:2004:384, [2004] ETMR 99�������������������������������������������������������������������������82 HFC Bank Plc v HSBC Bank Plc (formerly Midland Bank Plc) [2000] FSR 176������������������������������������������������������������������������������������������������������127 Higgs, 2008. See R v Higgs Hollister Inc v Medik Ostomy Supplies Ltd [2011] EWPCC 40, [2012] FSR 17�����������������������������������������������������������������������������������������������������������19 Hotel Cipriani Srl v Cipriani (Grosvenor Street) Ltd [2010] EWCA Civ 110, [2010] RPC 16 ����������������������������������������������������������������� 117, 127 HRH Duchess of Sussex v Associated Newspapers Ltd [2021] EWCA Civ 1810, [2022] ECDR 13 ����������������������������������������������������������� 146, 223 HRH Prince of Wales v Associated Newspapers [2006] EWCA Civ 1776, [2006] ECDR 20������������������������������������������������������������ 213, 216 Hubbard v Vosper [1972] 2 QB 84, [1972] 1 All ER 1023�������������������������������������181 Human Genome Sciences, 2011. See Eli Lilly & Co v Human Genome Sciences Inc Hyde Park Residence Ltd v Yelland [2001] Ch 143, [2000] RPC 604�������������������185 Improver v Remington Consumer Products Ltd [1990] FSR 181��������������������������53 Imutran v Uncaged Campaigns [2001] 2 All ER 385, [2002] FSR 2���������������������217 Independent Television Publications Ltd v Time Out Ltd and Elliott [1984] FSR 64���������������������������������������������������������������������������������������������������������150 Infopaq International A/S v Danske Dagblades Forening (C-5/08) EU:C:2009:465, [2009] ECDR 16��������������������������������������������������������������� 154, 169 Initial Services v Putterill [1968] 1 QB 396, [1967] 3 All ER 145�������������������������217 Intel Corp v VIA Technologies Inc [2002] EWCA Civ 1905, [2003] FSR 33�����������������������������������������������������������������������������������������������������������60 Interlego v Tyco [1989] AC 217, [1988] RPC 343�������������������������������������������� 68, 150 Ipcom GmbH & Co KG v Vodafone Group Plc [2021] EWCA Civ 205, [2021] Bus LR 813���������������������������������������������������������������������������������������������������66 IRC v Muller [1901] AC 217����������������������������������������������������������������������������������������77 Irvine v Talksport [2002] EWHC 367 (Ch), [2002] FSR 60����������������������������������131 Island Records v Tring International Plc [1996] 1 WLR 1256, [1995] FSR 560��������������������������������������������������������������������������������������������������������17 ITV Broadcasting Ltd v TV Catchup Ltd (C-607/11) EU:C:2013:147, [2013] FSR 36���������������������������������������������������������������������������������������������������������174 ITV Ltd v Time Out Ltd and Elliott [1984] FSR 64������������������������������������������������150 J Bollinger SA v Costa Brava Wine Co Ltd (No 3) [1960] Ch 262, [1960] RPC 16��������������������������������������������������������������������������������������������������������129 Jacques v Chess [1940] 2 All ER 285�������������������������������������������������������������������������128 Jif Lemon case (Reckitt v Borden, 1991) [1990] RPC 341����������������������� 74, 99, 124, 126, 126

Table of Cases  xxv Johnstone, 2003. See R v Johnstone Kabushiki Kaisha Sony Computer Entertainment Inc v Ball (Application for Summary Judgment) [2004] EWHC 1738 (Ch), [2005] FSR 9�����������������������������������������������������������������������������������������������������������201 Kaye v Robertson [1991] FSR 62�������������������������������������������������������������������������������220 Kean v McGivan [1982] FSR 119������������������������������������������������������������������������������130 Kelly v GE Healthcare Ltd, 2009 [2009] EWHC 181 (Pat), [2009] RPC 12����������������������������������������������������������������������������������������������������������33 King Features Syndicate Inc v O&M Kleeman Ltd [1941] AC 417, [1941] 2 All ER 403�������������������������������������������������������������������������������������������������68 Kipling v Genatosan [1923–28] MCC 203���������������������������������������������������������������168 Koninklijke Philips Electronics NV v Remington Consumer Products Ltd (C-299/99) EU:C:2002:377, [2002] ETMR 81���������������������� 86, 87 L’Oréal SA v Bellure NV [2010] EWCA Civ 535, [2010] RPC 23�������������������������100 La Mer Technology Inc v Laboratoires Goemar SA (C-259/02) [2004] ECR I-1159, [2004] ETMR 47 ����������������������������������������������������������������109 Laboratoires Goemar, 2004. See La Mer Technology Inc v Laboratoires Goemar SA (C-259/02) Lambretta Clothing Co Ltd v Teddy Smith (UK) Ltd [2004] EWCA Civ 886, [2005] RPC 6������������������������������������������������������������������������ 72, 73 Lawson v Dundas [1985] The Times 13 June (Eng) ����������������������������������������������150 Lego Juris A/S v OHIM (C-48/09 P) EU:C:2010:516, [2010] ETMR 63��������������������������������������������������������������������������������������������������������� 87, 152 Levola Hengelo BV v Smilde Foods BV (C-310/17) EU:C:2018:899, [2019] ECDR 2����������������������������������������������������������������������������������������������� 74, 154 Lewis, 1997. See R v Lewis Leyland v Armstrong, 1986. See British Leyland Motor Corp Ltd v Armstrong Patents Co Ltd Lidl SNC v Vierzon Distribution SA (C-159/09) EU:C:2010:696, [2011] ETMR 6������������������������������������������������������������������������������������������������������105 Lindt & Sprungli AG v Franz Hauswirth GmbH (C-529/07) EU:C:2009:361, [2009] ETMR 56�������������������������������������������������������������������������85 Lion Laboratories Ltd v Evans [1985] QB 526, [1984] 2 All ER 417��������������������217 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel BV (C-342/97) EU:C:1999:323, [1999] ETMR 690�������������������������������������������� 97, 98 London Taxi Corp Ltd (t/a London Taxi Co) v Frazer-Nash Research Ltd [2017] EWCA Civ 1729, [2018] ETMR 7���������������������������� 86, 126 LTJ Diffusion SA v Sadas Vertbaudet SA (C-291/00) EU:C:2003:169, [2003] FSR 34�����������������������������������������������������������������������������������������������������������95 Lucas Bols v Colgate-Palmolive, 1976. See Colgate-Palmolive BV v Koninklijke Distilleerderijen Erven Lucas Bols NV Lucasfilm Ltd v Ainsworth [2011] UKSC 39, [2011] FSR 41 ��������������149, 150, 242 Lux v Pike [1993] RPC 107������������������������������������������������������������������������������������������32

xxvi  Table of Cases Marks and Spencer v One in a Million Ltd [1998] 4 All ER 476, [1999] FSR 1�������������������������������������������������������������������������������������������������� 137, 139 Martin v Kogan [2019] EWCA Civ 1645, [2020] FSR 3�����������������������������������������160 Matthew Gloag v Welsh Distillers Ltd [1998] FSR 718������������������������������������������132 Maxim’s Ltd v Dye [1977] FSR 364���������������������������������������������������������������������������245 McCain International v Country Fair [1981] RPC 69 �������������������������������������������128 Meltwater Holdings v Newspaper Licensing Agency, 2011. See Newspaper Licensing Agency Ltd v Meltwater Holding BV Menashe v William Hill [2002] EWCA Civ 1702, [2003] RPC 31��������������������������55 Mentmore v Fomento (1955) 72 RPC 157���������������������������������������������������������������135 Merck & Co Inc v Stephar BV (C-187/80) EU:C:1981:180, [1982] FSR 57���������233 Mirage Studios v Counter-Feat [1991] FSR 145������������������������������������������������������131 Mitsubishi Shoji Kaisha Ltd v Duma Forklifts NV (C-129/17) EU:C:2018:594, [2018] ETMR 37�����������������������������������������������������������������������234 Moore v News of the World [1972] 1 QB 441, [1972] 1 All ER 915���������������������199 Moorhouse v University of New South Wales [1976] RPC 151����������������������������176 Morgan, 2006. See Crown Prosecution Service v Morgan Moroccanoil Israel Ltd v Aldi Stores Ltd [2014] EWHC 1686 (IPEC), [2014] ETMR 55����������������������������������������������������������������������������������������������������124 Murray v Big Pictures [2007] EWHC 1908 (Ch), [2007] ECDR 20���������������������222 Nelson v Rye [1996] 2 All ER 186, [1996] FSR 313�������������������������������������������������172 Nestle SA v Cadbury UK Ltd, 2017. See Societe des Produits Nestle SA v Cadbury UK Ltd Neutrogena Corp v Golden Ltd (t/a Garnier) [1996] RPC 473��������������������� 78, 106 Newspaper Licensing Agency Ltd v Marks & Spencer Plc [2001] UKHL 38, [2001] ECDR 28���������������������������������������������������������������������������������167 Newspaper Licensing Agency Ltd v Meltwater Holding BV [2011] EWCA Civ 890, [2012] RPC 1�������������������������������������������������������������������� 151, 154 Nintendo Co Ltd v Console PC Com [2011] EWHC 1458 (Ch)��������������������������201 Nintendo Co Ltd v Playables Ltd [2010] EWHC 1932 (Ch), [2010] ECDR 14�����������������������������������������������������������������������������������������������������������������201 NLA v Marks & Spencer, 2003. See Newspaper Licensing Agency Ltd v Marks & Spencer Plc No-Nail Cases Proprietary Ltd v No-Nail Boxes Ltd [1946] AC 447, [1946] 1 All ER 523�������������������������������������������������������������������������������������������������66 Nova Productions Ltd v Mazooma Games Ltd [2006] EWHC 24 (Ch), [2006] RPC 14��������������������������������������������������������������������������������������������������������149 Novartis v Union of India, 2013 Civil Appeal Nos 2706–2716 of 2013���������������238 Numatic International Ltd v Qualtex (UK) Ltd [2010] EWHC 1237 (Ch), [2010] RPC 25��������������������������������������������������������������������������������������������������������126 O2 Holdings Ltd (formerly O2 Ltd) v Hutchison 3G Ltd [2006] EWCA Civ 1656, [2007] RPC 16�������������������������������������������������������������������������106

Table of Cases  xxvii Office Cleaning Services Ltd v Westminster Window and General Cleaners [1946] 1 All ER 320, (1946) 63 RPC 39��������������������������������������������������������������128 Orlwoola [1910] 1 Ch 130, (1909) 26 RPC 846���������������������������������������������������������85 Oxford v Moss [1979] Crim LR 119�������������������������������������������������������������������������223 Pain, 1986. See R v Pain Parker-Knoll Ltd v Knoll International Ltd (No 2) [1962] RPC 265��������������������127 Pasterfield (t/a Glider Advertising Design) v Denham (t/a Denham Design) [1999] FSR 168����������������������������������������������������������������������������������������197 Pearce v Ove Arup [2000] Ch 403, [1999] FSR 525������������������������������������������������242 PepsiCo Inc v Grupo Promer Mon-Graphic SA (C-281/10 P) EU:C:2011:679, [2012] FSR 5 �������������������������������������������������������������������������������71 Philips v Remington, 2003. See Koninklijke Philips Electronics NV v Remington Consumer Products Ltd (C-299/99) Philosophy Inc v Ferretti Studio Srl [2002] EWCA Civ 921, [2003] ETMR 8������������������������������������������������������������������������������������������������������109 Phones 4U Ltd v Phone4U.co.uk Internet Ltd [2005] EWHC 334 (Ch)��������������133 PJS v News Group Newspapers Ltd [2016] EWHC 2770 (QB)�����������������������������221 Polydor Ltd v Brown [2005] EWHC 3191 (Ch)������������������������������������������������������174 Premier Brands UK Ltd v Typhoon Europe Ltd [2000] ETMR 1071, [2000] FSR 767������������������������������������������������������������������������������������������������������100 Priestley, 2004. See R v Priestley (RW) (No 1) Pro Sieben Media AG v Carlton UK Television Ltd [1999] FSR 610��������������������181 Procter & Gamble Co v Reckitt Benckiser (UK) Ltd [2007] EWCA Civ 936, [2008] FSR 8��������������������������������������������������������������������������������71 Pullman v Pullman (1919) 36 RPC 240��������������������������������������������������������������������132 R v Boulter (Gary) [2008] EWCA Crim 2375, [2009] ETMR 6����������������������������206 R v Braha [2011] EWCA Crim 1160�������������������������������������������������������������������������209 R v Gilham [2009] EWCA Crim 2293, [2010] ECDR 5�����������������������������������������209 R v Higgs [2008] EWCA Crim 1324, [2008] FSR 34����������������������������������������������208 R v Johnstone [2003] UKHL 28, [2003] FSR 42�������������������������������������205, 206, 209 R v Lewis (1997) 1 Cr App R (S) 208������������������������������������������������������������������������206 R v Pain (1986) 82 Cr App R 141, [1986] Crim LR 168�����������������������������������������207 R v Priestley (RW) (No 1) [2004] EWCA Crim 2237, (2004) 148 SJLB 1064��������������������������������������������������������������������������������������������������������208 R v Wendy Fair Markets Ltd [2008] EWCA Crim 2459�����������������������������������������208 R (on the application of British Academy of Songwriters, Composers and Authors) v Secretary of State for Business, Innovation and Skills [2015] EWHC 2041 (Admin), [2015] RPC 27 �������������������������������185 Ray v Classic FM Plc [1998] FSR 622�����������������������������������������������������������������������191 Reed Executive Plc v Reed Business Information Ltd [2004] EWCA Civ 887, [2005] FSR 3��������������������������������������������������������������������������������11 Reed Executive Plc v Reed Business Information Ltd [2004] EWCA Civ 159, [2004] RPC 40���������������������������������������������������������������������� 80, 96

xxviii  Table of Cases Response Clothing Ltd v Edinburgh Woollen Mill Ltd [2020] EWHC 148 (IPEC), [2020] FSR 25���������������������������������������������������������������������155 Rey v Lecouturier [1910] AC 262������������������������������������������������������������������������������244 Riding v Smith (1876) 1 Ex D 91���������������������������������������������������������������������� 134, 135 Robb v Green [1895] 2 QB 1��������������������������������������������������������������������������������������214 Roussel-Uclaf v Hockley International Ltd [1996] RPC 441���������������������������������231 Ryanair Ltd v PR Aviation BV (C-30/14) EU:C:2015:10, [2015] ECDR 13���������228 Sabel BV v Puma AG (C-251/95) [1997] ECR I-6191, [1998] 1 CMLR 445���������97 Saltman Engineering Co v Campbell Engineering Co (1948) 65 RPC 203���������212 Sawkins v Hyperion Records Ltd [2005] EWCA Civ 565, [2005] RPC 321��������152 Schlumberger v EMGS [2010] EWCA Civ 819, [2010] RPC 33�����������������������������32 Schütz v Werit [2013] UKSC 16, [2013] 2 All ER 177, [2013] RPC 16������������������55 Schweppes Ltd v Wellingtons Ltd [1984] FSR 210��������������������������������������������������182 Seager v Copydex (No 1) [1967] FSR 211, [1967] RPC 349������������������������� 213, 215 Seager v Copydex (No 2) [1969] FSR 261, [1969] RPC 250����������������������������������215 SECOND SKIN Trade Mark [2001] RPC 30, [2002] ETMR CN3������������������������108 Shanks v Unilever Plc [2019] UKSC 45, [2019] RPC 24������������������������������������������33 Sheeran v Chokri [2022] EWHC 827 (Ch), [2022] FSR 15 ����������������������������������166 Sheimer’s TM Application, 2000. See CA Sheimer (M) Sdn Bhd’s Trade Mark Application Sieckmann v Deutsches Patent- und Markenamt (C-273/00) EU:C:2002:748, [2003] ETMR 37�������������������������������������������������������������������������82 Silberquelle GmbH v Maselli-Strickmode GmbH (C-495/07) EU:C:2009:10, [2009] ETMR 28��������������������������������������������������������������������������109 Sillitoe v McGraw-Hill Book Co (UK) Ltd [1983] FSR 545����������������������������������181 Sky Ltd (formerly Sky Plc) v Skykick UK Ltd [2021] EWCA Civ 1121���������� 85, 90 Smith Kline & French Laboratories Ltd v Sterling-Winthrop Group Ltd [1975] FSR 298, [1976] RPC 511������������������������������������������������������ 74 Smith Kline v Harbottle [1980] 1 CMLR 277, [1979] FSR 555�������������������������������54 Societe des Produits Nestle SA v Cadbury UK Ltd [2017] EWCA Civ 358, [2017] FSR 34����������������������������������������������������������������������������126 Sony v Ball, 2004. See Kabushiki Kaisha Sony Computer Entertainment Inc v Ball (Application for Summary Judgment) Spanish Champagne, 1960. See J Bollinger SA v Costa Brava Wine Co Ltd (No 3) Starbucks (HK) Ltd v British Sky Broadcasting Group Plc [2012] EWHC 3074 (Ch), [2013] FSR 29�������������������������������������������������������������������������83 Starbucks (HK) Ltd v British Sky Broadcasting Group Plc [2015] UKSC 31, [2015] FSR 29����������������������������������������������������������������������������� 116, 125 Stena Rederi AB v Irish Ferries Ltd [2003] EWCA Civ 66, [2003] RPC 36����������������������������������������������������������������������������������������������������������������������55 Stichting Brein v Ziggo BV (C-610/15) EU:C:2017:456, [2017] ECDR 19�����������������������������������������������������������������������������������������������������������������175

Table of Cases  xxix STILTON Trade Mark [1967] FSR 15, [1967] RPC 173�����������������������������������������120 Storace v Longman, 1788 Unreported, (Noted in Clementi and Others v Golding and Others) 170 ER 1069, (1809) 2 Camp 25��������������������147 Stringfellow v McCain Foods (GB) Ltd [1984] RPC 501���������������������������������������130 Svensson v Retriever Sverige AB (C-466/12) EU:C:2014:76, [2014] ECDR 9�������������������������������������������������������������������������������������������������������������������174 Symbian Ltd v Comptroller General of Patents, Designs and Trademarks [2008] EWCA Civ 1066, [2009] RPC 1������������������������������������������30 Synthon BV v SmithKline Beecham Plc (No 2) [2005] UKHL 59, [2006] RPC 10����������������������������������������������������������������������������������������������������������31 Taverner Rutledge v Trexapalm Ltd [1975] FSR 479. [1977] RPC 275����������������130 Temple Island Teas v New English Teas [2012] EWPCC 1, [2012] FSR 9�����������144 Terrapin (Overseas) Ltd v Terranova Industrie CA Kapferer & Co (C-119/75) EU:C:1976:94, [1976] FSR 557��������������������������������������������������������233 Thaler v Comptroller General of Patents Trade Marks and Designs [2021] EWCA Civ 1374������������������������������������������������������������������������������������������32 The European v The Economist [1998] ETMR 307, [1998] FSR 283���������������������97 Theakston v MGN Ltd [2002] EWHC 137 (QB), [2002] EMLR 22����������������������222 Thomson Holidays Ltd v Norwegian Cruise Lines Ltd [2002] EWCA Civ 1828, [2003] RPC 32���������������������������������������������������������������� 110, 111 UK Gymnastics Ltd v British Amateur Gymnastics Association [2021] EWCA Civ 425������������������������������������������������������������������������������������������130 Ukulele Orchestra of Great Britain v Clausen [2015] EWHC 1772 (IPEC), [2015] ETMR 40�������������������������������������������������������������������������������������128 United Biscuits (UK) Ltd v Asda Stores Ltd [1997] RPC 513��������������������������������124 United Brands Co v Commission of the European Communities (C-27/76) EU:C:1978:22, [1978] 1 CMLR 429��������������������������������������������������241 Universities UK Ltd v Copyright Licensing Agency Ltd (Costs) [2002] EMLR 35, [2002] RPC 36������������������������������������������������������������������������180 UOGB v UKUO, 2015. See Ukulele Orchestra of Great Britain v Clausen US Playing Card’s Application, 1907 WN 251�����������������������������������������������������������74 Vestergaard Frandsen v Bestnet Europe Ltd [2017] EWCA Civ 2511�������� 214, 223 Vidal-Hall v Google Inc [2015] EWCA Civ 311, [2015] FSR 25���������������������������220 Virgin Atlantic Airways Ltd v Zodiac Seats Ltd [2013] UKSC 46, [2013] RPC 29����������������������������������������������������������������������������������������������������������48 Volvo v Heritage (Leicester) Ltd [2000] ETMR 940 (Note), [2000] FSR 253������������������������������������������������������������������������������������������������������105 Wagamama Ltd v City Centre Restaurants Plc [1995] FSR 713, [1996] ETMR 23 �����������������������������������������������������������������������������������������������������98 Walter v Lane [1900] AC 539�������������������������������������������������������������������������������������157 Wendy Fair Markets, 2008. See R v Wendy Fair Markets Ltd White, Hudson v Asian [1964] 1 WLR 1466, [1965] RPC 45��������������������������������126

xxx  Table of Cases Windsurfing Chiemsee Produktions- und Vertriebs GmbH v Boots- und Segelzubehor Walter Huber (C-108/97) EU:C:1999:230, [1999] ETMR 585����������������������������������������������������������������������������������������������������84 Wombles v Wombles Skips Ltd [1975] FSR 488, [1977] RPC 99��������������������������130 Wright, Layman and Umney v Wright (1949) 66 RPC 149�����������������������������������127 Wright’s case, 1949. See Wright, Layman and Umney v Wright YouTube/Cyando (C-682/18) EU:C:2021:503, [2021] ECDR 13��������������������������175 Zanella SNC’s Community Trade Mark Application [2000] ETMR 69�����������������98 Zino Davidoff SA v AG Imports (C-414/99) EU:C:2001:617, [2002] ETMR 9������������������������������������������������������������������������������������������������������234

part i Introduction

2

1 Imitation, Monopoly and Control Introduction This book is about the law of commercial and industrial monopoly and imitation, and how it works: imitation by one manufacturer of another’s products, imitation by one trader of the names and badges by which another’s goods or business are known; imitations, deliberate or not, accidental or on purpose. It is about how the law deals with the appropriation of other people’s ideas, labour, creations or goodwill. It is also about how people can acquire monopoly rights over profitable things (such as make certain products or sell them under particular names), and how those monopolies are protected and kept from getting out of hand. Thirdly, it is about how people can control the use other people make of their creative work. Often these subjects overlap to the point of inseparability.

Kinds of Intellectual Property ‘Intellectual property’ (IP) is an umbrella term used to cover all the various rights which may be invoked to prevent imitations of various sorts. Contrary to quite a lot of woolly terminology and thinking, the rights are actually quite distinct. For legal purposes they are considered individually. In practice, the kinds of imitation and the applicable rights often overlap. The manufacture of a product might infringe a rival’s patent. But it may also infringe design rights of various sorts, some of which come into play if there has been copying, others even if there has not. For another example, industrial designs are given protection in theory to protect the work of the designer – to protect the artistic element in manufacture. In some cases, however, the main value of design protection is to supplement the manufacturer’s trade marks by securing exclusive rights in the ‘get-up’ of the goods – a function that in legal theory belongs rather to the law of passing off or registered trade marks. For a third example, patent protection can be used in such a way as to build up the reputation of a trade mark for the patented goods such that the effect of the monopoly that the patent gave can be felt long after it has expired, because the trade mark has by then become so well established. Exactly how to go about using, enforcing and challenging the various monopoly rights to best commercial advantage is a matter for complex strategic assessment. Quite often it is possible to do almost as much with an unchallenged monopoly

4  Imitation, Monopoly and Control (such as a granted patent) as with one that is secure (such as a valid patent) because the costs and risks for a competitor of breaking the monopoly by legal action are often very high. The mere possession of a patent, however rubbishy to a lawyer’s mind, may be of real value for commercial purposes and it will encourage others to think of ways of ‘designing around’ the monopoly, rather than face an action for infringement once substantial resources have been committed. Because of the substantial cost and time of finding out exactly what it is they can do by going to court to get a judge to tell them, a great deal of IP law in practice involves not squabbling in court over the existence or scope of rights but getting into the best position for reaching agreement on who should be allowed to do what. Even a weak IP right (or a collection of them) can often be licensed to a large company for a lot of money, partly because it can be cheaper to pay a modest licence fee per product than to risk any one patent being upheld and disrupting sales. Few markets are purely national these days. Because IP rights tend to be somewhat different in their effect in different countries, even if a right seems hopeless in one country, it might be good elsewhere. That difference can be used to try to obtain commercial advantage. So, one Court of Appeal judge who thought that a UK patent was clearly invalid referred to the fact that it had been upheld as valid in Holland – an instance of ‘quot homines, tot sententiae’ (‘there are as many opinions as there are men’). A patentee – and to some extent other IP owners – can have several shots at a commercial rival across different countries because cases are judged by humans, who sometimes have reasonably held but differing views. In some cases, maintaining a market in one country may be very valuable, even if the rest of the world is lost. The consequence is that it can really pay to have a go at obtaining the rights in question and, often, in enforcing them.

‘Exclusive Rights’ Most of the legal rights with which this book is concerned are rights to stop other people doing things – what an old cynic once called ‘the grit in the wheels of industry’. For some reason (or possibly none), Acts of Parliament and EU legislation do not put it like that; thus, the proprietor of a registered industrial design is said by the Act to have ‘the exclusive right’ to do certain things with the design, and the other rights are expressed in similar language. But what is meant is not that the owner of the design, patent or copyright concerned has, by that ownership, the right to do anything they could not otherwise do, but that they have the right – subject to questions of validity – to exclude all others. This is worth emphasising, as the position is too often not understood. For instance, some people who take the trouble to secure patents for inventions believe that, somehow, possession of the patent secures to them the right to manufacture their inventions without interference. It does nothing of the sort: the thing such an inventor wants to

‘Exclusive Rights’  5 manufacture may well incorporate other people’s patented inventions, and the only way the inventor can be sure that they have the right to manufacture is by searching to find what patents other people have. The inventor’s own patent (if it is valid, and the specification is properly drawn up – points discussed later) confers the right to stop other people using the patented device – and nothing else. In principle, the position is much the same with other IP rights: the exception being ownership of a UK registered trade mark, which gives a limited freedom from infringement of other people’s UK registered marks. A related misconception is that IP rights can readily be treated as items of property independent of the underlying business which they protect. IP rights can, of course, be bought, sold or licensed. This has led to a tendency by accountants to want to value IP rights independently of any associated business, thereby ‘increasing’ net asset value. Such an approach overlooks the fact that the IP rights merely provide the business with protection from competition; so, to value the rights and business separately is likely to involve a significant element of double-counting – absent the rights, the business would be worth less. Another form of this misconception is that IP rights have some sort of inherent value that can be exploited. But that is not so – the value of an IP right entirely depends on what it protects: what it is for. If people want to do that thing (e.g. use a copyright work or a patented invention), then the right protecting it is valuable. If not, not. That said, IP rights often have significant value for licensing or, in many cases, for securing reciprocal freedom to operate from others. A large patent portfolio (or even a small and good one) can be a key driver for persuading competitors to provide their own technology to you. One of the largest research-based companies in the world estimated some years ago that it obtained about 10 times more value from IP deals giving it access to the rights of others than it got from licensing rights for money. Since that company had a licensing programme worth about $1bn per annum at the time, the access rights provided a serious benefit. It can really pay for large companies (and increasingly even small companies and universities) to have a reasonable arsenal of IP rights which can be deployed, if necessary, sometimes to open up new markets and sometimes just to wave about. People sometimes talk about companies fighting their way into oligopolistic markets using their patent portfolio as a sort of IP battering ram. This has, to some extent, fuelled an arms race, particularly with respect to patents. There is no sign of let up in the number of patent applications being made, and companies in countries which have historically not been so active in this area (such as India and China) have become major players in some fields. The underlying problem here is that in a number of areas the costs of acquisition of rights are much lower than the potential benefits of having those rights (including their utility as part of a portfolio of other rights). Whereas, in times past, companies might have simply given up on obtaining protection, it makes increasing sense to protect even currently non-exploitable rights, just in case.

6  Imitation, Monopoly and Control

Registered and Unregistered Rights Most IP rights must be applied for and registered to take effect, but there are some important ones which arise automatically as a matter of law. Of particular significance are copyright and related rights; the right to prevent goodwill being undermined by deceptive conduct in the market (‘passing off ’); unregistered design rights; and the right to stop misappropriation of trade secrets (‘the action for breach of confidence’).

Foreign Law This is a book mainly about UK law. In many cases, despite Brexit, this is now still the same as IP law throughout the EU. Patent law is essentially the same for some non-EU European countries too, for example Switzerland. Indeed, almost all foreign legal systems have something corresponding, more or less, to the various UK rights we discuss, but outside the EU the correspondence is seldom very close. Commonwealth countries, and to some extent the USA (though that has some bizarre aspects, like jury trial in patent cases), have legal systems which work much like ours. Their IP laws are variable, however: some are based on old UK laws, others have changed their laws to be more like our present ones and others still have forged their own direction. Other countries, including European countries, have legal systems which work in a different way, so that even where their law is supposed to be the same as ours – as with European patent, trade mark and some design law – it sometimes works differently in practice.

Spatial and Temporal Monopolies Many IP rights are time limited (e.g. 20 years from filing for patents, 25 years for registered designs) and exist only for certain territories (mainly countries). The fact that the exclusive rights are limited by space and time can cause a whole lot of problems for international trade and international law. For example, one of the key objectives of the EU is to create a single market. So, the laws are designed to achieve free movement of goods and services by reducing or eliminating the effect of national boundaries. This objective stands in opposition to the structure of IP law because IP rights are largely national. Another key objective of EU law is healthy competition. But the right to exclude others, an IP right, is a right to prevent competition. Thus, IP law must be reconciled with these other objectives. The interface between the two is rather jagged.

The Scheme of this Book  7

Other Things Although this book is mainly about exclusive rights themselves, it also deals with other matters, for instance systems of licensing and the action to prevent threats of certain types of IP litigation.

Exclusive Licensees A licensee is someone who has been given permission by the rights holder to do something that would otherwise be an infringement of the right. An exclusive licensee is a licensee who has that permission to the exclusion of the rights holder as well as anyone else. In such cases, an exclusive licensee has concurrent rights with the rights holder to sue for infringement, and they can pursue an action as if they were the copyright owner or patentee, etc. There are certain formalities – registration at the UK Intellectual Property Office (UKIPO) being one – which must be observed by exclusive patent and trade mark licensees in order for them not to lose rights to some legal costs if they win. In most instances, if an exclusive licensee sues, the registered proprietor must be joined into the proceedings, but the court can dispense with this requirement in the case of copyright. The point of making the proprietor join the proceeding is that they will be bound by the result – it would obviously be unfair if a defendant could be sued twice, first by the exclusive licensee and later by the proprietor.

The Scheme of this Book This book is divided into sections broadly along the lines drawn by the main Acts of Parliament dealing with these branches of the law. The basic division is into three parts: the first is concerned with protection of the product, and deals mainly with the law of patents and industrial designs; the second is concerned with the way things are sold, and deals mainly with the law of trade marks, passing off and other rules preventing unfair competition or unfair selling techniques; and the third deals with the law of copyright (apart from its use to protect industrial designs) and certain related issues, such as performance rights and ‘moral’ rights. It also deals with the law of confidential information. This division into three parts is a consequence of the fact that the various sorts of IP right are governed by different legal rules. Commercial strategies and disputes often cut across these lines. It is one of the functions of this book to show the interrelations between the different subjects in a way that more specialised works cannot easily do. There is a large amount of academic writing, by lawyers

8  Imitation, Monopoly and Control and economists, on the value of IP rights and the ways in which they are protected. For example, doubts are sometimes expressed by industrialists as to the value of patents at protecting the competitive advantage that their innovations produce, and some companies prefer to keep their inventions secret rather than disclose the details to the world in exchange for a limited monopoly. Often these concerns are industry-specific; depending in part on how fast innovation occurs and can be commercially exploited. So, a form of protection that might suit the biotech industry might be useless for heavy engineering. Doubts are also sometimes expressed by economists and industry analysts (not nearly so much by those in industry) concerning the importance of the IP system in providing incentives to research and innovate. The importance of providing proper incentives is one of the (several) justifications most frequently offered for giving people IP rights in the first place. As with most laws affecting business, the legislation which is the source of most of the law with which this book deals is a mishmash of compromise, some of it the result of effective lobbying by particular interest groups, some a result of muddled thinking or questionable drafting by legislators and some which is sensible and practical. There is insufficient space in this book for detailed consideration of those arguments or of the empirical work (often of a limited or over simplistic nature) which has been done to support them.

2 Courts, Remedies and Legal Actions Civil and Criminal Law Enforcement of IP rights is largely by action in the civil courts. Proceedings must be started and paid for by the right-owner or exclusive licensee (but if they win, they will at least recoup some of this via an order for costs). In some cases, particularly those of ‘counterfeits’ (near exact copies of things such as perfumes and ‘designer’ clothes), criminal enforcement can also be used. Generally, such prosecutions are paid for by the public – either via local authorities or, exceptionally in the case of big dealers, by the Crown Prosecution Service. Criminal courts can punish by fines and/or imprisonment. They can also make ‘compensation orders’, but in practice such orders are unlikely to amount to what a civil court would assess as damages. Often, of course, getting money out of criminals is problematic anyway. While much of this book is devoted to civil law, we outline the criminal law in Chapter 24.

The UK Civil Courts Violation of an IP right brings its owner into conflict with an infringer. Most IP conflicts are settled without court action. That is particularly so in clear-cut cases where infringement was, perhaps, inadvertent or plans to launch the infringing product are still in the early stages, and it is easier and safer for the potential defendant to back off. Violators who won’t stop after being made aware of the right (care must be taken to avoid ‘threats’, in the case of some IP rights, see later) must, if all else fails, be sued. It is a fact of life that most IP rights are rather fuzzy at their edges (e.g. what is a ‘substantial part’ of a copyright work, or when are two trade marks too similar?) or uncertain in their very nature (e.g. the value judgment as to whether a development said to be an invention is so close to a prior idea that it is ‘obvious’). Where there is lots at stake, it may be rational for both sides to fight (a fact often ignored by competition lawyers and politicians who think that all litigation is a bad thing). Even weak cases may be worth a long shot if there are many millions at stake. The UK has three separate judicial systems: England and Wales, Scotland, and Northern Ireland, all three being bound by the UK Supreme Court. A little IP litigation takes place in Scotland, where the judges (and lawyers), though very

10  Courts, Remedies and Legal Actions good indeed, are less specialist, so cases can take longer to come on and to be heard than in England and Wales. Northern Irish IP case are very rare. England and Wales have by far the largest proportion of the UK’s IP cases and have a selection of specialised IP courts to deal with them. For big cases, it is the Chancery Division of the High Court, which has within it an even more specialised group of judges forming the ‘Patents Court’. The Intellectual Property Enterprise Court (IPEC) hears ‘small’ (value up to £0.5m) IP claims. A winning side’s costs recovery from the loser is capped at £50,000 – still a tidy sum for an SME (the acronym generally used for small- to medium-sized enterprises), but a lot less than for a big IP (generally patent) case in the High Court, where it could be £1m or more. Capping also means the parties know the maximum they will have to pay the other side if they lose. IPEC itself has a ‘small claims track’ for infringement cases worth up to £10,000, within which each side usually pays its own costs. Often it is used by ‘litigants in person’, i.e. by the unrepresented. It has proved useful for small ‘rip-off ’ cases, such as those where someone has cut-and-pasted someone else’s photo from the internet and used it commercially. The English and Welsh courts normally have specialised judges – indeed, the principal patent judges have spent their careers in IP, and often have science degrees.

The Continued Importance of EU Law The Court of Justice of the European Union (CJEU) in Luxembourg, the EU’s top court, was, at least until Brexit at the end of 2020, of ever-increasing importance to much of UK IP law (patents being the main exception, see below). Back in the 1970s and 1980s, its IP activities were focused purely on the jagged edges between national IP laws, free movement of goods between Member States and EU competition law. Thereafter, increasingly, substantive IP law issues were drawn into its thrall. EU harmonisation of trade mark law began in the early 1990s. A lot of activity followed with the CJEU, trying to work out what that law meant. That took a considerable time (and is not over yet: there are still cases examining fundamental things, as well as some just tinkering with the outer boundaries of the law). More recently, the CJEU has seen a lot of copyright cases too, many dealing with fundamental questions such as the conditions for subsistence of copyright and what constitutes infringement, particularly on the internet. Aspects of design law were also harmonised within the EU but, overall, this seems to have been less problematic – perhaps because there is just less litigation involving designs than copyright and trade marks. Patent law, however, is largely non-EU law, being based instead on an international convention called the European Patent Convention (EPC). (Thus, post-Brexit, the UK continues to be very much a part of the European patent system.) The remit of the CJEU as regards patents is, therefore, much more limited.

Dispute Fora Other than Courts  11 Within that remit, the CJEU had to consider aspects of biotech patents, since they are the subject of a Directive, and also many supplementary protection certificate cases (a kind of extension of patent term for medicines and agrochemicals where it takes a long time to get approval to sell the product). Most people think it has made a fine old mess of these! Even after Brexit, EU law will remain of great importance for most UK IP rights. There are a couple of reasons why. Firstly, quite a lot of current UK IP legislation implements EU Directives by copying their key provisions, e.g. the Trade Marks Act 1994 and the amended Registered Designs Act 1949. While the EU has not produced an EU-wide copyright law, pre-Brexit it directed how some key parts of copyright law should be. Given all this was already in our legislation pre-Brexit, it now just ticks along. Secondly, the basic position for case law is that all pre-Brexit CJEU decisions continue to apply in the UK unless and until the Court of Appeal or Supreme Court decides otherwise in a particular case. These higher courts will probably be very cautious about doing that.

Dispute Fora Other than Courts Some sorts of dispute, mainly about whether a right should be (or has validly been) granted, take place in offices which grant IP rights. The UK Intellectual Property Office (UKIPO) can hear trade mark oppositions (objections to the grant of UK trade marks), and attacks upon the validity of UK patents, trade marks and registered designs – the former is used a lot, the latter hardly ever. And the European Patent Office (EPO) has its own elaborate and ponderous system for dealing with post-grant disputes about the validity of patents. These are called ‘oppositions’ though they are really claims for revocation, as you can’t ‘oppose’ something which has already happened! Within the EU, oppositions to the grant of EU-wide trade marks and challenges to the validity of trade mark and design registrations can take place before the European Intellectual Property Office (EUIPO) – a somewhat overambitious name since it only deals with registered trade marks and designs. It has Boards of Appeal, from which one can appeal further to the General Court (i.e. first instance court) of the EU, with a possible appeal in important cases to a chamber of, or in really important cases the full court of, the CJEU. Partly because of increasing costs, but also because of the increasing internationalisation of IP problems (with room for parallel actions in different countries and a patchwork of results), parties are increasingly turning to mediation or arbitration as ways of dealing with their IP conflicts. There are even cases where English courts have ‘punished’ (by withholding some or all of an award of costs) a winner who has unreasonably refused to mediate. There are limits to this, however. If the parties have negotiated ‘without prejudice’ (i.e. so that their discussions cannot be used in court), then the court cannot tell whether one side or the other was unreasonable and thus ‘punish’ the winner, Reed, 2004.

12  Courts, Remedies and Legal Actions The UKIPO has a procedure to provide a non-binding opinion in cases of patent validity and infringement. This is relatively quick and cheap, and so it can help parties (particularly small parties) to form a realistic opinion of their chances, which might deter litigation or help existing disputes to settle. The system works with some effectiveness in small cases, though no one would say it is rip-roaring success. The UKIPO also offers a mediation service, but with limited use so far. There are probably an increasing number of mediations of IP cases using mediators outside the UKIPO scheme.

Infringement, Revocation, Declarations and Threats Claims IP rights are enforced by an action in the civil courts for infringement. Although few cases go to a full trial (most being settled on the way, or effectively resolved by an interim order), it is against what they assess would happen at a full trial that the parties evaluate their respective positions. A full action to trial in the Chancery Division of the High Court normally takes about a year (very fast by international standards). Broadly, there are the following stages: a claim, a defence (and often a counterclaim if the validity of a registered right is challenged), disclosure of relevant documents by both sides, witness statements of fact and expert reports. Ultimately there is a trial when each side’s witnesses and experts give evidence, which is tested by cross-examination. There can be many incidental disputes on the way. Usually in an infringement action the issue of liability is decided first. If the claimant wins, then the court will normally grant an injunction (restraining the defendant from future infringing behaviour) and award costs to date. Entitlement to any financial remedy and an award of costs for that is assessed later, though in practice the parties almost always settle this. If the IP right sued upon was registered and found invalid, that right will be revoked and the defendant will get its costs. Sometimes it makes commercial sense for a party that thinks that it might be sued for infringement to start the fight. This particularly applies in the case of patents, where actions to ‘clear the way’ are not uncommon. A party which might be affected by a patent may apply for its revocation, seek a declaration of noninfringement, or both in the alternative. In such cases, the patentee – who is now the defendant – usually responds by counterclaiming for infringement and the case, in effect, becomes a normal infringement action. Another way a fight can start is via a ‘threats’ action. These need a little explanation. Non-IP disputes, for instance over a contract or road accident, usually just involve a claimant and single defendant. Normally what happens is the claimant’s lawyer writes to the defendant what is called a ‘pre-action’ letter setting out the claim. The hope is that there will be a negotiation leading to a settlement without any need even to start proceedings. It usually works. But if not, proceedings start and either are settled on the way to trial or, if not, as a last resort, by the trial. IP fights

When to Sue  13 are potentially more complicated because there may be multiple potential infringers. An IP owner can, of course, sue the main source of the allegedly infringing goods: the manufacturer or importer. But the owner is also entitled to sue people further down the supply chain, including the customers or sub-customers of the source company, and may do so without also suing the manufacturer or importer. A letter sent to anyone down the line saying ‘If you do not stop, I shall sue you’ will be very worrying to the recipient. Typically, these people are not well placed to assess whether the allegations are true, and in any event, will not want to get involved in legal proceedings and so will probably just stop buying the goods. So, the IP holder will get the commercial effect of an injunction, stopping sales without ever having to start proceedings, still less carry them through to establish the validity of their claim. To try to stop such bullying conduct there is a special ‘threats’ action available in respect of threats to sue for infringement of patents, registered and unregistered design rights or registered trade marks. Notably, it does not apply to threats of suing for passing off or infringement of copyright (don’t ask us why!). In 2017, a rather complicated regime replaced earlier schemes. Threating letters to manufacturers or importers are allowed. Lawyers who write threatening letters for their clients can no longer be sued for making threats, although their clients can. If a threats action succeeds, the claimant – the party who has been the recipient of an unjustified threat – is entitled to an injunction and any damage it can prove was caused by the threats. And of course, the IP holder can defend the claim by showing that the threats were justified: that the recipient was infringing a valid right. In reality, the practical effect of these provisions is rather limited. What mostly happens is that if a threatening letter is written to a customer of a manufacturer or importer, the manufacturer or importer will start a threats action. The IP owner will defend by saying that the right is valid and infringed, and will counterclaim for infringement. The threats action turns into a case about infringement and validity. Also, it is actually very difficult – near impossible – to get damages for unjustified threats – the view being that it is not so much the threat of proceedings as the very existence of the patent action which puts people off buying the goods, Carflow v Linwood, 1998. The effectiveness of the provision is also limited by the exception that it is not a threat merely to notify someone of the existence of an IP right. This leads to rather cryptic letters along the lines: ‘Dear Sirs, we write to inform you of the existence of UK Patent No. …’. This really means ‘But for the threats provisions we would be saying you are an infringer of UK Patent No. …’. Finally, the IP owner can avoid any ‘threats’ problem by simply suing and offering to settle at the same time – there is a difference between threatening to put the knife in and negotiating terms for pulling it out!

When to Sue In general, the IP holder can choose when to sue. An infringement action can be brought either when infringement has already started, or even, if it is threatened,

14  Courts, Remedies and Legal Actions earlier. If infringement has already taken place, a successful claimant will be entitled to damages for what has already occurred as well as an order restraining future infringement. They may also get an order that any infringing goods be delivered up for destruction or rendered innocuous. In many cases, instead of damages, it is possible to claim the profits the infringer has made from the infringement. However, litigation is expensive, and although the losing party will be ordered to pay the winner’s costs, the amount paid will usually fall well short (typically 60–70%) of covering the winner’s lawyers’ bills. Even if damages are reckoned in with the costs the loser pays, there is seldom money to be made by IP litigation – litigation, for all except the parties’ lawyers, is not a sustainable business model in and of itself. Actions are mostly brought to stop further infringement and to establish the legal position for the future; very seldom are they brought for the sake of the damages. (It is not the same in the USA.) It follows that, in almost all cases, the right time to start an action for infringement (if one is to be started at all) is when infringement begins – or, even better, when it is first threatened. This is especially true of actions for trade mark infringement or passing off actions, since in these cases the right to sue may be lost by delay. There are other reasons why actions for infringement are best brought quickly if they are to be brought at all. Obviously, it is best not to have to fight. It follows that the best sort of action to start is the sort that will not be defended. Whether an action is defended or not naturally depends in large degree on whether the case is important enough to the defendant to make it worthwhile going to the trouble and expense of fighting and facing the commercial uncertainty of not knowing what the result will be. The defendant in an infringement action faces the prospect of an injunction against continuing the offending business (and damages), and it is not easy to plan not knowing whether such an injunction will be issued or not. Accordingly, just as few people start infringement actions unless they feel they must, so few people defend them unless they feel they must. If an infringer is left to infringe in peace for years – to spend money advertising a new business or a new product, to develop a new market to the point where it becomes profitable, perhaps even to build a new factory or re-equip an old one – there may be no real option but to fight. Yet, had the action been brought earlier on, before there was so much at stake, the ‘offending’ activity would probably have been dropped, rather than waste time and money fighting. There are always other products and other markets. In trade mark cases especially is this so: it is very rarely worth fighting for a new mark, even if the chances are in your favour.

Time Although the various rights with which this book is concerned are all enforced by actions of much the same nature, the cost and complexity of litigation varies widely between the different cases. Actions for patent infringement are in a class

Remedies  15 by themselves – in complexity, in cost, in the time needed to bring them to trial. Few patent disputes are finally settled inside a year, so an infringement which will have ceased to be commercially important within a year or so is often hardly worth suing over at all, whilst an infringer who can be sure of stopping infringement within a year or so can often face the possibility of an action with comparative equanimity. This considerably reduces the practical value of patents for short-term products. A copyright, trade mark or passing off action may be brought to trial in a matter of months, and the cost and trouble are much less, too. Actions for infringement of design rights are intermediate in character; whether they are more like patent actions or more like copyright actions depends on how the parties (and the court) handle them.

Costs The cost of litigation, particularly IP litigation, has always been a running sore with users. They want the moon: all the following in combination: speed, low cost and certainty. The last – certainty – is often underrated, but is very important. If each side receives the same advice about the likely result, the case will probably not happen at all, or if it does, it should settle early. But if both sides think they are going to win or that anything can happen, then settlement is much less likely. That being said, the problem of legal costs has become of greater public concern in recent years. It is not always necessary to use a solicitor. The predecessor of IPEC (which went by the silly name of the Patents County Court) was created mainly so that patent attorneys could instruct a barrister direct, or even appear themselves. Recently, more use is being made of IPEC because of new rules which cut down costs. However unnecessarily, some clients, or perhaps their patent attorneys, are a bit frightened by the thought of going up against the big battalion law firms. They need not be. A good patent attorney with (and sometimes without) a good barrister can be a formidable fighting team for small or even medium-size cases. Even larger cases do not need more than the addition of a good solicitor and perhaps one assistant. Sensible clients will ask why their lawyers want to use so many people on their case – a slim team is usually more effective than teams twice the size.

Remedies Introduction ‘Remedies’ is the English lawyers’ word for the type of order which can be made by a civil court. We write about these, and the practicality of the legal process for obtaining them, early on in this book because, ultimately, it is what orders a court

16  Courts, Remedies and Legal Actions can make which govern how people behave. What courts can order is what IP is mainly about. Broadly, there are two sorts of ‘remedy’: interim and procedural on the one hand, and final on the other. But sometimes, as a practical matter, interim remedies decide the case without more.

Interim (‘interlocutory’) Injunctions There are cases in which to wait even a matter of months is to wait months too long. In these, the court may be asked to act at once, and to grant an injunction at the outset against the alleged infringement – not a permanent injunction, but an interim one, lasting until the trial of the action is decided. Many trade mark and copyright infringements, and many cases of passing off (especially where there is a suggestion that the defendant is dishonest), are best dealt with in this way. A claimant who is granted an interim injunction must give what is called a ‘crossundertaking in damages’ – a promise to the court that, if in the end the action fails, the claimant will compensate the defendant for the interference to the defendant’s business caused by the injunction. In most cases, this is not an important matter; but an interim injunction in a patent case may well stop a production line or a very profitable generic drug, and the damage caused to the defendant may be very great. At the same time, the result of the action is seldom entirely certain. So, there the claimant must accept the risk if they succeed to secure an interim injunction that they may lose at final trial. Whilst that risk must of course be assessed, an interim injunction is generally worth it, even if the claimant ultimately loses. Whilst the trial is pending, the IP rights holder will be able to retain 100% of the market and maintain their product price. That will generally be worth more money than would be involved in paying on the cross-undertaking. Provided the claimant acts as soon as the infringement is brought to light (this is essential), an interim injunction may be granted to preserve the status quo until the trial. Unless the evidence reveals that the claimant has no real prospect of success at the trial, the court will consider whether the balance of convenience lies in favour of granting or refusing an interim injunction. An important consideration in weighing the balance of convenience is whether the claimant or the defendant will be adequately compensated by damages if the injunction is either wrongfully refused or wrongfully granted. The court tries to make an order at the interim stage which will put the trial judge in the best position of being able to do justice at the end of the day. In reality, if a court grants an interim injunction, that will generally be an end of the matter. It is seldom worth a defendant’s while to take the matter to full trial to see if they can win and get compensated under the cross-undertaking, since there are usually better, less risky ways of making money. That is less so in the case of very large battles such as those in the generics pharmaceuticals industry, where awards for damages on a cross-undertaking can run into millions of pounds.

Remedies  17

The Final Injunction This is the big one. IP rights are the right to exclude. The injunction is the court order enforcing that, requiring the defendant to keep off the protected territory on pain of punishment if they do not. The real point of most infringement actions is that in this country, once the court (after appeals have been exhausted) has declared that an IP right exists, is valid and has been infringed, reputable business people will not want to argue the point any further. Although the owner of the right usually asks for, and usually gets (if victorious), an injunction against further infringement, it is the decision that really matters, not the formal order. Indeed, such an order is so rarely disobeyed in commercial cases (where the defendant is almost always a company) that effective methods of dealing with real disobedience are hardly ever invoked. In practice, the thing to do against individuals who are determined infringers is to sue them personally, not just the companies which they control, and which are infringing for the time being. This prevents these individuals from forming new businesses for the purpose of infringing. Ultimately, disobedience of an injunction by an individual means imprisonment.

Financial Remedies The successful claimant has a choice: compensation for the damage the infringement has done to the claimant’s own business or payment of the profits that the infringer has made from the infringement instead. In either case, only the damage suffered or the profits made in the six years immediately prior to the issue of the claim in the action and since the issue of the claim can be awarded. In exceptional cases, where the court disapproves of the claimant’s conduct for some reason, profits can be refused, but damages can be refused only in the special cases discussed below. Of course, neither problem may arise in some cases – for example, there will be no damage or profit where the infringer merely made samples of an infringing article and was stopped by an interim injunction before commercial plans progressed any further. In practice, if the claimant wins the liability trial, the defendant must (if the claimant asks) make a preliminary disclosure of its infringing activities, so that the claimant can make an informed choice about whether to take damages or profits, Island Records, 1995. On receiving such a request, the court will order an investigation, but before this takes place (i.e. before the parties have seen each other’s books in detail, and sometimes at all) the infringer usually makes an offer. If the claimant accepts, then all is well and good; if not, the investigation takes place, but at the claimant’s risk as to costs. If the amount found to be due turns out to be less than the defendant offered, then the claimant pays for the investigation, but if it is more, then it is the infringer who pays.

18  Courts, Remedies and Legal Actions

Damages Where the claimant elects to receive damages, the court orders an inquiry into just how and how much the infringement has injured the claimant. There is an exception to this, however, in the case of patents, designs and copyright where, at the time of infringement, an infringer was not aware, and had no reasonable grounds for supposing, that the monopoly infringed existed. In such cases, no damages are payable. Such ‘innocent’ infringement is rare in patent, design and trade mark cases because importers and manufacturers are normally expected to undertake reasonable searches of the UKIPO databases to ensure that what they want to do is all right. It is rarer still in copyright cases, since most works of recent origin (i.e. within the last 100 years or so) are pretty well bound to enjoy copyright protection (see the copyright chapters). So, an infringer who copies a work ought to have known that. In any case, the infringer who goes on infringing after a warning, or notification of the existence of IP rights, can no longer be innocent. As to the measure (the lawyers’ word for amount) of damages, the claimant is entitled to full compensation for any monetary damage suffered that could reasonably be foreseen to be caused by the infringement. Thus, if an infringing book or machine has sales of so many, the author or inventor will have lost so many royalties. A claimant who is a manufacturer or publisher can ask the court to assume (unless the infringer can show that this was not so) that each infringing sale has cost them a sale, and they are entitled to the profit so lost. There may be other heads, too. The owner of an infringed trade mark may have to pay for additional advertising to restore the position; the owner of an infringed patent or design may be forced, whilst waiting for the action to be tried, to reduce profit margins to retain any share of the market; a patentee may have lost sales of spare parts or other goods – termed ‘conveyed goods’ – which normally are expected to follow the sale of a patented machine, Gerber v Lectra, 1996. All that can be added in. Or the matter may be approached in a different way: pirating of a copyright work may render the work valueless or passing off may partly or wholly destroy goodwill. Damages may be assessed by estimating the value of the IP before and after the infringement and taking the difference. Some cases are complicated, of course; but it is seldom difficult to make a rough estimate of the sum likely to be involved. The key question when dealing with a manufacturer-claimant is: what is their profit on a sale? Very often, that will be simply the difference between the manufacturing cost and the sale price. In the case of particularly serious infringements of copyright (only), the court may award a claimant ‘additional’ damages. For these, particular regard is had to the flagrancy of the infringement and any benefit accruing to the defendant by reason of the infringement. For instance, if a newspaper publishes material believing that the profits to be gained from publication would exceed the compensation which a claimant could prove, additional damages may well be awarded.

Remedies  19

Account of Profits When it comes to taking an account, it is the infringer’s profits, not the claimant’s, that matter. These are harder to assess than damages. For one thing, it is difficult to judge the extent to which (in assessing the profit from infringement) that part of the business can properly be loaded with overheads. The basic rule is that general overheads do not count, unless the defendant can show that they had to spend them to make the offending sales, Hollister v Medic, 2012. Obviously, there can be arguments about that. In addition, it is the profits from infringement that matter: they may or may not be separable from other matters giving rise to profits. Take, for example, a book of which only part infringes; or a pair of socks, of which all that was patented was the way the toe was made. It may be very difficult in such cases to say what part of the profit is attributable to what. It is often even harder for a claimant to guess what the answer is going to be before having had a chance to review the defendant’s accounts in fine detail. Accordingly, it is usually too risky to ask for an account of profits: hence its limited use in practice. However, suppose that the inventor of a better way of making the toes for socks can show that making the toe in the patented way saves, on average, per dozen pairs of socks, so many minutes of an operative’s time at so much an hour – then an estimate of the profit from the invention is directly available for comparison with estimates of damages before the claimant makes its election. In copyright cases, innocence is no defence to a claim for profits. In other cases, it probably is, based, no doubt, on the theory that an account of profits is an equitable remedy. Equity acts on the conscience, and innocent defendants do not have anything on their conscience for what they had done.

Other Remedies In addition to the above, the court can order delivery up or destruction of infringing goods, though the court will not order this if they can be rendered non-infringing. Defendants can also be compelled to disclose the names of their customers and suppliers of infringing goods. As a requirement which has been carried over from EU law, a defendant can be ordered to advertise the fact that the court has found them to be an infringer. There is and was no EU requirement the other way around, i.e. an order against a claimant who has lost to advertise that fact, but there ought to be, so that any commercial cloud of uncertainty over a defendant’s product caused by the litigation can be dispelled. However, the English courts have decided that they have the power to order a losing claimant to advertise that they lost if the claimant contributed to commercial uncertainty while the action was running, Apple v Samsung, 2012. It is in the last 50 years, or so, that cases of piracy have become much more common in many different fields of commerce. Partly in response to this, the

20  Courts, Remedies and Legal Actions courts have held that in extreme cases, orders can be made upon the application of the claimant alone, which require the defendant to permit the claimant’s solicitors immediate access to enter premises and inspect documents. They are now formally called ‘search orders’, but the name ‘Anton Piller order’ is often used, named after one of the early cases in which one was granted. The purpose of this order is, of course, to ensure that an unscrupulous defendant has no time to hide or destroy incriminating products, documents or evidence. The courts have also held that even innocent parties who have become ‘mixed up’ in the wrongdoing (the Customs, warehousers, internet service providers, and the like) can be compelled to disclose at least the name of the wrongdoer. Such parties (save, possibly, the Customs, who are in a special position) can also be restrained from permitting pirate goods from leaving their possession until at least there has been time for the case to come properly before the court. Defendants are protected against potential abuse of search orders by stringent conditions governing their grant and particularly by the appointment of a neutral ‘supervising solicitor’. Another remedy, very powerful in clear piracy cases, is the ‘freezing’ or Mareva injunction (after the first case when such an injunction was granted). This freezes a pirate’s assets and bank account; it might not work directly against a dishonest pirate prepared to take a chance as regards contempt of court, but will be obeyed by honest third parties such as banks holding the pirate’s money.

Seizure of Infringing Goods There are UK and EU systems in place whereby Customs authorities can be asked to seize imported infringing goods (see Chapter 24). In addition to the inspection and discovery orders referred to above, there is also partial ‘self-help’ remedy for copyright infringement – to be exercised only with great caution! After having notified the local police station, a copyright owner can seize infringing copies exposed or immediately available for sale (such as in a street market). Adequate notice must be left for the alleged infringer to challenge the seizure in the courts. An alternative, and safer, route is to apply to court for an order that the offending articles be delivered up.

3 Patent, Copyright or Design? Introduction When considering how to protect a new product against imitation, the questions are these: does the case call for patenting, can it be left to copyright or unregistered design right, and is design registration advisable? It is vital to decide upon a strategy early: there is a limited window of opportunity for filing patent or registered design applications.

Patents A patent protects what is new and inventive over what went before, e.g. a new article or new way of using or making something. The product or process does not actually have be better or even as good, though in reality people seldom patent new and inventive things which are not also better. Why would they? In an extreme case, a patent can be wide enough and represent a big enough advance over earlier ideas to give its owner a complete monopoly of a new industry, at least for a limited time. For instance, there were patents giving a monopoly of telephones, of pneumatic tyres and of transistors. Very few patents are this important however, but the existence of almost any patent (if it is thought to be valid or potentially so) will make it necessary for competitors to work around or even undertake major research, rather than simply copying the patentee’s product.

When Patents Suffice Whether patent law can give a manufacturer the protection it needs depends on three considerations: how new the thing is, how important it is and for how long protection is required. The degree of novelty will decide whether patent protection is available and, if so, how wide the patent monopoly will be. The importance (or potential importance) of the invention will decide how much trouble it will be worth a competitor taking to get around the monopoly and how big a risk of legal attack a competitor will be prepared to face. The time factor may decide whether it is practicable to carry out the design or research work needed to avoid a monopoly whose validity cannot readily be challenged.

22  Patent, Copyright or Design? If freedom from competition while building a big new business is needed, only a patent of unusually wide scope with a really important invention behind it will do: any ordinary patent could be evaded by competitors long before the business was firmly established. If what is wanted is a monopoly in a new line of goods not of great importance, a patent of comparatively narrow scope should suffice, for it will usually be less trouble for competitors to produce something different than to risk trouble with patents. In intermediate cases, it may be very hard to get proper protection: where goods are markedly more successful than what was made before but without being very strikingly different, it is doubtful whether any patent can prevent imitation. This point is important and will be considered more fully in the next two chapters.

Designs: Registered and Unregistered Design rights are rights over a product’s appearance, whether its shape or decoration, or both. Sometimes, design protection for how the product looks can supplement patent protection (which covers how the product works, or how it is made). There are no less than four different sorts of design right.

Design Registration Design registration is relatively quick and cheap. It can work where there is nothing patentable about a new product but effort has been made to make it visually distinctive. It deals with competitors who arrive at the same design independently, since it is infringed whenever a later design is too close, so (unlike unregistered rights, below) there is no need to prove copying. (Inevitably, though, it is much easier to persuade a court that someone else’s design is the same as yours if you can show that they have copied.) Ideally, the application to register must be filed before the design is shown to anyone otherwise than in strictest confidence – in this respect, the requirement of novelty is a little looser than that for patents. Unbelievably, there are two sorts of registered design, UK national registrations and the UK part of pre-Brexit EU registrations carried over into corresponding UK rights. The two are equivalent in scope.

Unregistered Design Right Unregistered design right (UDR) gives useful short-term protection for designs for manufactured products, or items of handicraft. Like copyright, it arises automatically. Although free in the sense of there being no official fees, a sensible designer will incur the internal costs of keeping records of all stages of the design

Copyright  23 process. This will include all drawings, models and prototypes, as well as records as to who did what and when. Where designers are employees, records should also include their employment contracts, and if they are freelance, then the terms of engagement and preferably a proper assignment of all rights in the design should be obtained. Like copyright, UDR does not give a complete monopoly, it only prevents copying, so if others come up with the same or similar design independently, they cannot be stopped. Unbelievably (again!), in the UK there are now two sorts of UDR, one arising under our own UK Copyright Designs and Patents Act 1988 and others which arose because of an EU Regulation before Brexit. The latter have been replaced by equivalent UK rights. The two kinds of UDRs have different terms and somewhat different scopes of protection (see Chapter 7).

Copyright Copyright protects literary, artistic, dramatic and musical works, as well as other products of what may loosely be called the entertainment industry – films, sound recordings, broadcasts and the like. It arises automatically as soon as a work is physically recorded, without any need for any formalities, application or registration. (Some people think that ‘to copyright’ a work (a misnomer because you don’t have to do anything other than create it) you must put © on it, but this is not so. But using a © does serve as a warning that the creator is copyright-savvy and may be the sort of person who knows how to sue. Copyright gives a right to prevent copying, not a complete monopoly against independent creation, as a patent or registered design does. Copyright can overlap with design protection where the product is also an ‘artistic work’, as well as in the case of certain 2D graphic designs.

Computer Software Computer programs are, in general, protected by copyright as a ‘literary work’. This is infringed both when a listing of the program is copied (copied as a listing or recorded as a runnable program) and when an object-code or assembly-code version is reproduced. Copyright protection, valuable though it is for preventing direct copying of programs, is comparatively narrow. Programming techniques or the ideas for programs, as distinct from actual programs, call for patent protection: but computer programs ‘as such’ are supposed not to be patentable. However, ingenious patent attorneys aided by enthusiastic EPO Boards of Appeal have found ways in which this can be done in practice. There was a long debate about whether the exception to patentability of computer programs should be removed, but this is unlikely now. The Americans do not have

24  Patent, Copyright or Design? an exception, but there is not much evidence that allowing programs to be patentable there has done any good – except, of course, to lawyers and perhaps the big companies such as IBM and Microsoft. (The same goes for patents for business methods; indeed, even more so.)

Periods of Protection Each different form of IP protection provides for a different period of protection.

Patents The maximum term for a patent – if annual renewal fees are paid – is 20 years from the date of filing of the application. In practice, most patents do not last that long: most ideas which seemed to be valuable at the time of patenting prove to have no or little commercial importance, so it is not worth paying the renewal fees. Patent protection is not fully effective until the patent is granted, although, if granted, damages for any infringement can be claimed from the date on which the application was published, generally around 18 months from application. Examination takes longer than that. How long depends partly on the applicant (how quickly responses are made to queries) and partly on the office. There are far fewer delays at the UKIPO than the EPO (European Patent Office). Typically, it takes between three and five years to grant, although an applicant in the UKIPO can, for a good reason or because it relates to green technology, ask for the application to be ‘fast tracked’. If granted, processing to grant may take as little as a year. But whichever office one uses, and by whichever route grant is sought, patents are near useless for quickly produced and short-lived lines of goods, since for these the invention is likely to have lost its importance long before any patent comes into force. Additional problems occur in fields that require regulatory approval before marketing, as the wheels of motion of regulation are generally slow. Accordingly, it is normal for new pharmaceutical products to face delays of many years before full marketing is allowed. During all this time, the patent life is slowly ticking away. To remedy this, EU law created so-called ‘supplementary protection certificates’ (SPCs), which had to be applied for via each national patent office. SPCs in effect extend the period of protection for pharmaceutical and agrochemical products protected by patents which suffered regulatory delays getting to market. A UK system continues post-Brexit.

Registered Designs In the UK, registration for a design is quick – usually about two months from filing. But until registration, there is no protection. This lead time should therefore

‘Imitations’ and Copying  25 be factored in for products that are very quick and easy to copy, so that the design owner is able to pounce at once. Registration lasts for five years from the date of application and can be kept alive on payment of renewal fees every five years for a maximum term of 25 years. Few design owners find this worth doing. Only about half of registered designs are renewed at the end of the first five-year period. The product has either come and gone, or never came at all.

UDR UK UDR lasts for up to 10 years after articles made to the design are first marketed, but with a maximum term of 15 years from when the design was first recorded. Also, it is possible for others to apply for a compulsory licence five years after first marketing. The term of UDR based upon EU UDR is much shorter, only three years from when the product is first made available.

Copyright Copyright in an artistic work arises when the work is made. Protection is immediate, no waiting for registration. In general, the term is 70 years from the end of the year in which the author dies, but there are exceptions. Many think that this is far too long, but the laws are made by those who listen to powerful lobbyists, such as publishers and the record and movie industries.

A Role for Trade Marks? There may also be a role for trade marks in the protection of a new product – aside, of course, from the choice of a new name, or brand, to market it under. As we shall see in Part III, product shapes can also be trade marks protected via registration and/or the law of passing off. Nevertheless, there are quite severe restrictions on the type of product shapes that can be registered as marks. However, if registration can be secured, then a trade mark can last indefinitely, provided the mark remains in use and renewal fees are paid every 10 years. Equally, if it can be shown that goodwill vests in a product shape – again, quite difficult to do – then protection against passing off is available for as long as that goodwill is maintained.

‘Imitations’ and Copying In an action for infringement of a patent or design registration, in theory it makes no difference whether infringing goods are copied from those of the owner of rights or if the infringer has devised their product entirely on their own. The

26  Patent, Copyright or Design? main questions to be decided are, first, whether the patent or design registration is valid; and, secondly, whether the monopoly given by it is wide enough to cover the alleged infringement. It matters not whether the ‘infringer’ was aware of the existence of the patent or design registration. Their knowledge makes no difference to the grant of an injunction, nor even, in some cases, to liability to pay damages and to pay the costs of the action. In an action based on UDR or copyright, however, the position is different: the action will only succeed if it can be shown the alleged infringement was copied (directly or indirectly) from the protected design or copyright work. Throughout this book, when we speak of ‘imitations’, we mean to include not only copied but also independently developed products. In the case of registered designs, the risk is not usually very serious and can be easily avoided by a proper search. The risk of inadvertent infringement of patents, however, in any industry where there is appreciable technical progress, will usually be a serious one if the new product is noticeably different from the old. There is no way of avoiding this risk except thorough acquaintance with, or thorough search of, all current patents in the branches of industry concerned; in fields such as electronics these may number thousands. No attempt is made in this book to suggest any other way, and discussions in later chapters on avoiding patents refer only to patents whose existence is already known. A thorough search of a field of any size is difficult and rather expensive; a good patent attorney will do it as cheaply as it can be done. And not even a genius can find patents until they are published – so you are always at risk from an inventor who is only slightly ahead of you.

Another Way? The essence of a patent is that the applicant receives a monopoly in return for full disclosure of the invention in the specification filed at the UKIPO or EPO and later published. Published specifications are an extremely valuable source of information in many fields; in some, they are almost the only reliable source of information about recent developments. Sometimes, however, technical knowledge is best protected by not publishing it at all. Indeed, even where an invention is patented, those who work it soon acquire special knowledge of how to work it. The law will sometimes protect such unpublished information under the action for breach of confidence (see Chapter 25).

part ii Protecting the Product

28

4 Patents and How to Get Them Introduction This is the first of three chapters on patents. In this chapter, we discuss the requirements for an invention to be patentable, how a UK patent is obtained and the grounds on which it may be challenged after grant.

The Patent Law System Many of the important provisions of UK patent law are based upon an international treaty called the European Patent Convention (EPC). The UK was one of the original signatories of the EPC, and was among the first to ratify it in 1977. The EPC is not an EU treaty, meaning the aspects of patent law which are governed by the EPC were not affected by Brexit. The EPC established a European patent system: a common set of rules governing when patents should be granted in EPC member states. By the Convention, the participating countries (now 38, including the 27 EU countries) agreed to enact new national laws to harmonise their own patent law with EPC. The UK Patents Act 1977 (UKPA) did this for the UK. The Convention also established the European Patent Office (EPO), having its main seat in Munich, for granting ‘European’ patents. As no country was willing to give up its own patent office, the compromise was to give applicants the option of applying for a patent either via a national patent application (‘the national route’) or via the EPO, with patents granted under either route being functionally equivalent. The EPC deals only with patentability and scope of patents. The original parties set up a separate treaty to deal with patent infringement: the Community Patent Convention 1975 (CPC). This was an EU (or EEC, as it was then) endeavour, intended to bring with it the jurisdiction of the Court of Justice of the EU (CJEU, or ECJ as was) as the senior court. The CPC was a sickly child and, despite an attempt at revival in the late 1980s, it succumbed to fatigue, primarily through lack of love from industry (which did not want the ECJ or the CPC’s hopeless procedural system), and died. So, there is no common European patent court – yet (see Chapter 5). Consequently, you can get different results when the ‘same’ patent is litigated in different countries. This is not just because the facts might come out differently

30  Patents and How to Get Them in different courts, but also because the lack of a single ‘top’ patent court for Europe means that the views of the national ‘top’ courts of each country as to what the EPC actually means can, and do, differ. Since the 1990s, however, the judges from the main ‘patent’ countries of the EPC (Germany, UK, France and the Netherlands) have made a concerted effort to get to know each other with a resulting convergence of approach. Differences are therefore less than they were. In this chapter, we shall consider UK national patents. We return to the EPC and European patent applications in Chapter 5.

When Is an Invention Patentable? Not every bright idea is patentable. To be patentable, an invention must be new (novel), inventive (non-obvious) and capable of industrial application. Perhaps surprisingly, neither the UKPA nor EPC defines what an ‘invention’ is, but they do identify certain things which are not inventions, as well as excluding certain inventions from patent protection.

Non-inventions The UKPA (and EPC) identifies a non-exhaustive list of things that will not be patentable by virtue of their nature, declaring them ‘not inventions for the purposes of the Act’. They are essentially intellectual: scientific theories, mathematical methods, computer programs, aesthetic creations of all sorts and business methods. Patents for computer programs have caused a lot of difficulty. These ‘non-inventions’ are not patentable ‘as such’. But what does that mean? Both our courts and the EPO Boards of Appeal (when considering the equivalent provisions of the EPC) have grappled with this. In a series of cases (including UK: Aerotel/Macrossan, 2006 and Symbian, 2008; EPO: Duns, 2007 and G03/08, 2010 – none an easy read!) the answer is broadly this: it depends on whether the matter forming the nub of the invention – its new contribution to the field – is technical or whether it falls within one of the excluded categories. Thus, in Symbian, a patent for a program which sped up a computer was allowed as making a technical contribution, whereas in Maccrossan, a program for helping fill in a company formation form was refused because it was for a business method. But whether a program is ‘technical’ can be close to a metaphysical question. In practice, it is generally possible to frame an invention on the borderline to avoid the exclusion, so a computer program can be presented as some sort of device (a computer loaded to run the program for instance). In the 1990s, US judges adopted an ‘anything under the sun made by man’ approach, both for computer programs and business methods. Since then, the US Supreme Court has cut ‘patent eligibility’ down in unfathomable ways.

When Is an Invention Patentable?  31

Excluded Inventions The UKPA (and EPC) also deny patent protection to some types of invention which might otherwise be patentable, either because their commercial exploitation would be ‘contrary to public policy or morality’ or because they relate to methods of treatment of humans or animals by surgery or therapy or are methods of diagnosis. Although medical and veterinary treatments are not patentable, apparatus, devices and drugs used for treatment are. The legislation also excludes ‘plant or animal varieties or essentially biological processes for the production of plants or animals’. We look at excluded matter in more detail in Chapter 6.

Industrial Applicability A patentable invention must be ‘capable of industrial application’, which includes agricultural applications. In the UK, the courts have read the provision as requiring the invention to have some ‘useful purpose’, rather than being purely abstract or intellectual matter, thereby policing the boundary between ‘inventions’ and mere ‘discoveries’ or speculation. For ‘traditional’ subject matter, this requirement causes few issues, but more recent technological developments have brought the issue back to the fore (see Chapter 6).

Novelty To be patentable, an invention must be new at the time that the patent application is filed, or if priority is claimed (see below), at its priority date. An invention is new if it has not already been ‘made available to the public’, i.e. at least one member of the public has had free access to the invention. Often that is by an openly published prior document which clearly describes the invention, but there are other ways – for instance, if the inventor blurts it out in a public lecture or tells even a single individual about it (other than in confidence). Selling a product or using it in public destroys novelty if it can be analysed without ‘undue difficulty’ to find out how the invention works. But sometimes, selling or showing a product merely provides the public with access to the product, not the invention. In the past, public (and even in some cases secret) prior use of any sort was enough to invalidate, but that is no longer so. The prior use or disclosure must ‘enable the public’ to work the invention, Synthon, 2006. Where this is so, in the jargon of patent law, the invention is said to be ‘anticipated’ by the prior publication or use (the ‘prior art’). A couple of further points: first, it is enough if the prior art gives at least one member of the public a means of finding out what the invention is. It does not actually matter whether or not anyone did. Thus, a patent for an invention about portable traffic lights lacked novelty because the inventor tried out his invention

32  Patents and How to Get Them at a road junction at night, and a skilled observer could have worked out what the invention was by standing nearby and watching what happened (even though no one did), Lux v Pike, 1993. Nor does it matter whether the prior disclosure takes place here or abroad.

Inventive Step To be patentable, a novel invention must also involve an ‘inventive step’ over anything in the prior art. Lack of inventive step is also called obviousness. This is one of the most important, yet one of the most uncertain, grounds of patentability. In principle, it is only common sense that any more or less self-evident variant of an old idea does not deserve a patent. The trouble is that in practice it is often very difficult to decide after the event (sometimes many years after) what would have been obvious to the ‘skilled person’ – a notional ordinary worker in the relevant field who lacks any inventive capacity – when the patent was applied for. Although courts have established various tests which help to assess whether the difference between the invention and the prior art made an inventive contribution, a lot depends on the court’s feeling as to whether the invention was a good idea. Sometime the patentee wins by asking, ‘If it was obvious, why was it not done before?’ A good example is Schlumberger v EMGS, 2010. That is a particularly effective question if, once the invention was made, it made lots of money and could have been devised years before it was.

Entitlement: Who Can File a Patent Application? Anyone can apply for a UK patent, but the application may only be granted to the inventor(s) or to someone who has a valid claim to the invention derived from them. Thus, the inventor is entitled to have the patent granted in their name as owner, unless someone else can prove a better claim. Where someone other than the inventor is named as an applicant, they must explain to the UKIPO how and why they are entitled to the patent. For example, the applicant may have purchased the invention (taken assignment) from the inventor. When someone other than the inventor is entitled to the patent, the inventor still has the right to be identified as such. As we write, a UK case about whether an invention produced by artificial intelligence, with the AI named as the ‘inventor’, can be patented by the owner of the AI machine. Currently the Court of Appeal has said no – by two to one, Thaler, 2021.

Inventions Made by Employees One common instance where someone other than the inventor is entitled is where an invention is made by an employee. Not all inventions made by employees,

Entitlement: Who Can File a Patent Application?  33 however, belong to their employer: it all depends on the circumstances. The test is whether it was the employee’s job to make that sort of invention. If so, it belongs to the employer (just as boots made by a worker employed to make boots belong to the employer, not the worker). Otherwise, it belongs to the employee, even though they may have made it in during working hours and misappropriated the employer’s materials for the purpose. A CAD operator, for instance, might be expected to finesse the product design they are drawing up, if they can, but a radical redesign may well fall beyond the scope of this employment, even if the idea was sparked off by something connected with their work. Thus, an eye doctor, whose job was essentially to treat patients, was entitled to a patent for an eye treatment device he invented because inventing was not part of his job, Greater Glasgow Health Board, 1996. In deciding what an employee’s duties are, their contract of employment is a starting point, but it is also necessary to assess what the person’s actual job entails, as a role might evolve over time or the invention may have resulted from a special assignment. Directors are generally in a special position where anything which might reasonably relate to the company’s business belongs to the company: by and large, directors must never profit at their company’s expense. (The English agent of a foreign engineering concern has been held to be in that sort of position, too.) There is no halfway house, except by mutual agreement. If the invention does not belong to the employer, it is the employee’s. In such circumstances, the employee can demand a royalty from their employer for its use, refuse permission to use it altogether or even sell it to a competitor of the employer. Inventions made before or after the period of employment also belong to the employee. An employee’s contract may make a special more favourable arrangement to the employee than the UKPA provides, but any agreement less favourable is ineffective. Sometimes, there is a special agreement, under which an employee-inventor co-owns the patent with their employer. This sort of arrangement is best put into writing and vetted by a solicitor – on both sides. Inventors should note that as a co-owner, they cannot licence someone else to work the patent on their behalf, including a company they may have formed for this very purpose, unless the agreement with their employer specifically says so. If the employer does particularly well out of a patented invention made by an employee, the employee can apply (to the UKIPO or court) to be awarded a fair share of any ‘outstanding benefit’ the employer got from the invention or the patent (unless the rewarding of employees for that sort of invention is already covered by a collective agreement). People employed mainly abroad when their inventions were made cannot apply. This provision had little effect until recently, but now the courts have held the provision has teeth. In Kelly v GE, 2009, two inventors were awarded £1.5m between them where the judge thought their employer would make at least £50m profit from their invention. And in Shanks v Unilever, 2019, after an overlong and hard-fought case, the Supreme Court ruled that the inventor of a device which had brought in £24m in royalties with no risk or expense to the employer should have £2m.

34  Patents and How to Get Them

The Patent Specification A patent application must be accompanied by a specification containing the details of the invention for which protection is sought. The specification must contain a description of the product, apparatus, process or article, or whatever is to be the subject of the patent. The description, in turn, must contain enough information to enable a ‘person skilled in the art’ (PSA) to work the process or make the product concerned. Typically, it also includes some background discussion of the prior art and seeks to emphasise how the invention is different and an improvement on what has gone before. It is important that the description describes the invention as fully as possible, else it might leave the patent vulnerable to challenge for lack of sufficiency. Where appropriate, the description may refer to an accompanying set of drawings. The specification must also include one or more ‘claims’: statements providing a definition of the matter for which protection is sought. The wording of the claims is particularly important because they are used to determine (i) whether the invention claimed is new and inventive, etc. and (ii) whether or not another’s product or process infringes and can be stopped. We return to infringement in Chapter 7. Claims are usually written in jargon (to make them as general as possible), and a good deal of practice is needed to understand exactly what they are saying. Likewise, a good deal of practice is needed to write them well. The specification also includes an abstract – a brief summary of the invention. If the application proceeds all the way through the application process, the specification will be published at least twice. The version which matters is the ‘B-spec’ (the one with ‘B’ after the patent number). The version with an ‘A’ after the number is the application as filed. The ‘A-spec’ is what the applicant asked for, whereas the ‘B-spec’ is what they got. If the patent is amended post-grant (see below), there will be a ‘C-spec’ too.

Patent Attorneys In practice, the work of drawing up the patent specification is usually given to a patent attorney. Claim drafting lies at the heart of a patent attorney’s craft. The content of the specification not only has to pass detailed scrutiny by expert patent examiners, but if the patent is ever the subject of legal proceedings, it must also be proof against the destructive criticism of hostile lawyers and experts, for the wording of the specification will determine the validity and scope of the patent. Patent attorneys are also responsible for negotiating with the patent examiners at the UKIPO or EPO to secure patent grant and are also involved in most related proceedings before these offices. It is possible for an applicant to do everything without professional help, but if a patent is worth applying for at all, the difference made by experienced drafting and skilled negotiation with the examiner will

When to File?  35 be worth far more than a patent attorney’s fees. Furthermore, current application procedure, especially where overseas patents are required, is so complex that it is best left to experienced professionals. A good patent attorney may (literally) be worth their weight in gold.

When to File? Preparation of a specification is usually a long and involved job, but equally, it is often important that the application is filed at the earliest possible moment, as soon as enough is known about the invention to prepare the specification. If there is delay, then a competitor, here or abroad, working along the same sort of lines may publish or market something, or file their own patent application, which might make it difficult, or impossible, to secure a valid patent. Too often, inventors let the cat out of the bag too soon by releasing information which invalidates their own patent, e.g. by taking samples to a trade show, publishing a note in a trade journal or giving a lecture. As we have seen, even a single non-confidential disclosure is enough to destroy a subsequent patent, which can be particularly problematic for an invention which needs some sort of public trial. There are always ongoing proposals to ameliorate the harshness of this rule – by providing a ‘grace period’ during which an inventor’s own disclosure does not count as prior art, but this creates uncertainty. The USA used to have a ‘first-to-invent’ system which allowed an inventor up to a year from the time they had ‘reduced their invention to practice’ to file their application and discounted any intervening disclosure by them. The rules led to much litigation. The USA changed to a ‘first to file’ system in 2013, albeit ameliorated by a one-year grace period for the inventor’s own publication. There is rather a lot of uncertainty about how this works. Prudent applicants (which includes big companies) never rely on grace periods. Grace periods are not recognised under the EPC, but UK patent law allows an applicant to secure a right of ‘priority’ by filing an incomplete ‘informal’ application in the first place. The applicant then has a year from this original ‘priority date’ to either ‘complete’ the application or prepare and file a proper ‘formal’ application. (During this priority year, the applicant can also apply for patents in other countries; see Chapter 5.) Provided the invention is well enough described in the description to ‘support’ the claims of the final one, the novelty of the invention will be judged as of the earlier date, and the original informal application is then simply dropped. But there are snags with this approach, since if the original description is found to be lacking enough, the priority date will be lost. Loss of priority may be crucial, if relevant information has been made available to the public meanwhile. Just what is necessary for an earlier specification to ‘support’ the claims of a later one is not precise, as those that drafted the UKPA did not use words that mean anything very definite, either to a lawyer or to anyone else.

36  Patents and How to Get Them Although it might not be intended that an initial specification will be the ultimate specification (its real purpose being to provide priority for the invention), it is still worth taking care to include as much detailed information as possible to foreshadow the claims of the final specification. Accordingly, the invention must be identified in terms broad enough to cover not only the actual product or process that the applicant thinks they would be likely to use commercially, but also any alternative that competitors may want to use – or that competitors may be prepared to use, if compelled to do so by the need to avoid the patent. To ensure that such broad claims will hold priority, as much basis as possible for them must be laid in the original specification: both by indicating the general principles of operation of the invention and by suggesting alternatives to whatever is actually described in detail in the description. Many inventors dislike trying to think of and describe alternatives that they believe to be inferior, but it ought to be done. They should be encouraged to think of as many variants of their basic idea as possible – good, bad and indifferent. It is a good idea to ask them to put themselves in the mind of someone trying to pinch their idea. If the alternatives later turn out to be hopelessly inferior, there is no need for these to be claimed when the final specification is drawn up. Sometimes the very exercise of making the inventor think of alternatives results in a new bright idea, or at the very least helps to identify where the boundaries of the ‘invention’ lie. If, as often happens, the inventor later thinks of a development of the concepts included in the original preliminary application, then another informal application should be filed to secure a priority date for this specific improvement. So too with any later new developments. The final application on which the patent will ultimately be based must be filed within 12 months of the earliest application, and the final specification can combine the matter contained in all the earlier applications.

The UK Application Process Filing an Initial Application To secure an application date – perhaps to serve as a priority date, as discussed above – a patent applicant must file, as a bare minimum, a request for grant (containing information including the invention’s title, the name and address of the applicant, and the identity of any patent attorney appointed) and a patent description, together with any drawings. Further steps must be taken within 12 months, or the rights will lapse. Of course, it is open to the applicant to file a complete specification, including claims and an abstract. Only if a complete specification is filed can the applicant request the UKIPO to conduct a patent search (see below). This initial 12-month period is generally used to assess the commercial potential of the invention, so that an informed decision can be made as to whether it is

The UK Application Process  37 worth pursuing the application further and to decide about foreign protection. Once the application has been lodged, the applicant is free to disclose the technical information contained within it without prejudicing the novelty of the invention so far as described in it. For the reasons explained above, however, it is generally a good idea to keep details of the invention confidential for as long as possible, and at least until the final ‘formal’ specification has been filed. Sometimes there is a bit of tension here if outside financing is needed. Most investors will not agree even to look at an invention unless a patent application is already on file. Once filed, the UKIPO gives the application a number, and the applicant can use ‘Patent Pending’ on the product and supporting promotional literature, which may itself deter others from copying.

Filing the Final Specification If priority has been secured with an informal application, the final specification must be filed within 12 months of the first application. This also marks the deadline for any foreign patent applications (if these are to claim priority too – see Chapter 5). Even before the filing, the inventor should be hard at work to discover the secret of the product’s success to ensure the answer is included in the final specification. The final specification must distil the distinguishing features of the ‘invention’ into a set of claims. Guessing or failing to understand which features really matter (and which are merely ‘nice to have’) is too risky, so the final specification must be drawn up by someone who knows what the vital points are. That means detailed discussion between inventor and patent attorney. If the two don’t get on, the inventor should change attorney.

Preliminary Examination, Search and Publication When the applicant has either completed the initial application or lodged a new formal application (claiming the priority date of the initial application), the applicant must also request (and pay for) a preliminary examination and a search of earlier patents. The preliminary examination goes to the formal correctness of the application and specification. Although, in theory, all publications of any kind count as prior art, in practice, the search tends to focus on earlier published patent specifications for the same sort of invention, and the search results will provide the applicant with an indication of patentability. Occasionally, the official search produces nothing. This is inconvenient, since it leaves the applicant and patent attorney in the dark as to what earlier documents there are. To avoid this, the attorney will sometimes ‘draw a search’ by including initially a broader claim than they consider the applicant is likely to be entitled to. By provoking a response from the Office, the attorney can review the position in the light of later circumstances.

38  Patents and How to Get Them Assuming the applicant deals with any formality issues noted in the preliminary examination report, including, for example, the form to identify the inventor if the applicant is not the inventor, the next step is publication of the specification. This happens a maximum of 18 months after the priority date (if there is one) or the application date (if not). If the applicant wishes to avoid publication, perhaps because the search report is damming, then the application must be withdrawn before this takes place.

Substantive Examination Next, the applicant must request (and, again, pay for) full (‘substantive’) examination. This must be done, at the latest, within six months of the application being published. Here, the examiner considers the results of the search and assesses whether the invention claimed is the sort of thing that is patentable; whether the specification is clear and complete enough to enable a skilled reader to work the invention; and above all, whether, when compared with what appears in earlier publications, the invention is new and inventive (i.e. non-obvious). It is reasonably easy to decide whether a supposed invention is new – normally the examiner has only to read the claims and look in the earlier documents for anything falling within those claims. Deciding whether an invention is obvious, on the other hand, is always difficult, and with nothing to go by except what appears in earlier documents, becomes almost impossible. Naturally, then, examination for obviousness produces some odd objections: often examiners turn the application down by pointing to one document which has some of the claimed feature and another which contains the rest to see whether the applicant’s patent attorney can produce a convincing answer as to why it is not obvious to mix-and-match these features. When examining for obviousness, the examiner considers only documents published before the date of application (or earlier priority date, if there is one). But in considering whether the invention is new, they must also look at unpublished specifications of patents already on file at that date: in relation to novelty only, these are treated as if already published. The examiner issues an examination report setting out the basis of any objection raised, giving a set period for response. It will not be possible to settle the final form of the claims until the examiner’s comments have been received. If the specification has been well drawn up and there has been no surprise prior art, the examiner may not make any serious objections, although they may still find something to complain about. It may be advisable to make even the most half-hearted objection an excuse for quite large alterations in the claims, for the claims are being framed less with a view to satisfying the examiner than with a view to what a judge may say later. It may also prove desirable sometimes to frame the specification in a way to which the examiner will object. Examiners are not trained lawyers and have a lot of work to get through, and so naturally tend to prefer standard patent jargon and standard forms of claim to anything new. Patent jargon might suit doubtful inventions since

The UK Application Process  39 its incomprehensibility makes it harder for competitors to decide what the claims mean, and whether they are anticipated or not. A court less conditioned to jargon may take a different view. Besides, sooner or later new sorts of claim become desirable: claims for important biotech inventions and suchlike. There has to be a first of such things, and any good examiner will probably notice and question it. Finally, we should mention a ploy said to have been used by one wily old patent attorney to ensure that he could have a second look at the application before it was accepted – he always included a claim to a ‘Wellington Boot’. The examiner would have to object, preventing them from just accepting the application. On receipt of the report, the applicant, via their attorney, can either abandon the application, if the position looks hopeless, or respond, explaining why the examiner is wrong. It may be necessary to revise the specification – typically by narrowing the scope of the claims to define the novel and inventive aspects of the invention more clearly. If, after a bit of to-ing and fro-ing, the examiner and attorney disagree, the matter will be reviewed by a senior examiner (after a hearing, if the applicant wants one). If the application is then refused, the applicant can appeal to the Patents Court.

Grant, Term and Costs If the examiner has no objections or is satisfied that any objections raised have been overcome, the patent is granted. The specification, including any amendments submitted in response to the search and examination, is published. It is only after the patent has been granted that its owner may commence proceedings against any infringers, but a patentee is able to claim for damages for any infringements which have occurred since publication of the application. A patent granted by the UKIPO covers the whole of the UK. Typically, a UK patent application will take around four years from initial filing to grant, but an applicant is able to request more rapid processing if, for example, early infringement is likely or has even started. Paying fees early and responding to objections quickly will also reduce the time to grant. In practice, most applicants are happy for their applications to take the usual course since this spreads out the patenting costs – usually upwards of £4000 (including official fees and attorney charges) – while the commercial potential of the invention is being investigated. The maximum term of the patent is 20 years from the filing date (even if an earlier priority date is claimed), subject to payment of annual renewal fees. The closer to expiry, the higher these fees are. Money can, of course, be saved by not paying renewal fees and letting the patent lapse. In fact, most patents lapse long before the 20-year maximum term, since inventions which seemed promising at the time turn out not to be commercially valuable. Because it is generally impossible to tell at the beginning what an invention is likely to be worth, it is often sensible to apply for a patent just in case. If you don’t apply, there is no chance of later protection if the invention turns out to

40  Patents and How to Get Them be important. Few inventions are profitable quickly enough to tempt others to infringe in their early years; indeed, many inventions of importance are seldom very profitable until quite late in the life of any patent covering them.

Amendment after Grant The UKIPO search conducted as part of the patenting process usually uncovers a representative collection of published documents on which later attacks on a patent might be based, while applicants themselves will usually know what sort of thing was made and used before the date of the application. Sometimes, however, a publication or other disclosure, not considered when the specification was drafted, will turn up later, which calls the validity of the patent into question. Or it may turn out that something too close to what has been claimed was used in public, either in this country or abroad, before the priority date – the applicant either not knowing of it or omitting to mention it to their patent attorney. In such circumstances, validity may sometimes then be restored by amending the scope of the patent, i.e. altering the claims to narrow them down until they no longer include whatever it is that has turned out to have been unpatentable. It is nearly always far better to amend as soon as the invalidity problem emerges: amendment is easier then (for it is less likely to be opposed), and fewer problems will arise afterwards. Amendment post-grant requires the UKIPO’s permission or, if the patent is the subject of a pending court action, that of the court. Permission to amend is not very difficult to obtain provided the amendment complies with the law. Widening the claims is not allowed (nothing can be made to infringe after amendment if it did not before). Nor is it permissible to add new information about the invention – ‘added matter’, as it is called. So, it is not possible, for instance, to cure by amendment a failure to give adequate instructions to carry out the invention (insufficiency), nor to add a new feature which was not mentioned in the specification and has since been found essential to work the invention. One may properly cut a claim down, to exclude something old or obvious, but it is dangerous (though sometimes useful) to try to include an explanation of the reasons for what has been done – as the explanation may in itself add new matter. Furthermore, amendment may make it impossible to recover damages for pre-amendment infringements. The result is that while the power to amend is very useful, it is a poor substitute for successful drafting of a specification in the first place.

Revocation after Grant A patent, once granted, may still be revoked, either by a procedure before the UKIPO or in court, if anyone can show (in effect) that it should not have been granted. Such an attack on a patent is frequently made if the patentee sues for

Revocation after Grant  41 infringement, as part of the defence to the action. Challenging a patent in the UKIPO is much cheaper than attacking it in court, mostly because of the different way in which the evidence is provided; but an attack in the UKIPO will often be less likely to succeed and is liable to be slower. In practice, people seeking revocation of a patent hardly ever use the UKIPO – they use the Patents Court or IPEC (see Chapter 2). The grounds on which a patent may be challenged matter a lot. While it is generally not too difficult to decide whether a patent is infringed or not, it is seldom easy to decide whether it is valid. Thus, whenever there is a question of enforcement, validity may be the most important topic. We discuss the grounds of invalidity below.

The Invention is Not Patentable As we have discussed already, a competitor may discover prior art which was not uncovered by the UKIPO search and was not considered by the patentee when the patent application was drafted. It is practically impossible to undertake an exhaustive search for prior art, and, in any case, the patentee’s competitors will often be better placed and have a stronger motive to spend more resources than examiners to locate the most relevant disclosures. And of course, examiners will seldom know of prior uses disclosing the invention. Novelty and inventive step therefore often rear their heads in a challenge. Other grounds of attack are that the claims cover excluded subject matter, or the invention is incapable of industrial application. Where this is so, it is possible for some of the claims to be valid (or even, to be partly valid) while others are invalid. Such a position gives rise to procedural problems, but for most purposes the important question then is: is any claim that has been (or will be) infringed valid? Non-infringed claims matter little.

Insufficiency A patent specification is ‘insufficient’ if it does not disclose the invention clearly enough and completely enough for it to be performed by a person skilled in the art. While it is possible for there to be sufficient instructions to put some of the claims into effect, a specification tends to be sufficient for all claims or insufficient for all. Insufficiency can also apply where the ‘disclosure’ in the description is not as wide as the claim – so that you cannot perform some part of the claim, Biogen, 1997. This is one of the ways the courts have dealt with the problem of overbroad claims – where the patentee has claimed more than they have really invented. The other way is to use a combination of obviousness and insufficiency in a rather tortured way – to say that a claim which covers an obviously desirable thing is obvious unless there are sufficient instructions on all ways as to how to make it. The law here is not particularly satisfactory because it is not often easy to apply these

42  Patents and How to Get Them general notions to particular cases. The trouble is that there is no explicit ground of undue width of claim (as there used to be), so the courts have had to concoct one.

Non-entitlement A patent can be revoked if it was granted to someone not entitled to it. Only the person who is really entitled to the invention can run this ground, and then only within two years from grant. In practice, this objection is never raised because if an invention is stolen and patented, the victim usually brings a claim to have the patent transferred to them (or invokes a procedure before the UKIPO to the same end).

Impermissible Amendment Finally, a patent can be challenged because an impermissible amendment has been made. There are two sorts: that the specification has been amended to disclose something not disclosed in the specification as first filed, or that it has been altered post-grant to make the claims cover something they did not cover before.

Ownership A patent (or just an application) can be bought and sold much like other property. In the case of patents, the transfer must be in writing and signed by both parties. It is strongly advisable that the transaction is registered at the UKIPO so that the name of the current owner appears on the Register. Failure to register could lose the new owner some of their rights to costs if successful in suing on the patent, or might even result in loss of rights entirely if another party subsequently purchases the same patent from its previous owner without knowledge of the earlier transaction. While the names of the original applicant or patentee will appear on the copies of the published specifications, which can be found online, full details of the patent’s history – including whether it is in force or not – can be found on the online register on the UKIPO’s rather good website: www.ipo.gov.uk/p-ipsum/. A sale or other disposition of the patent may be effective in law if made by those whose names appear on the register of proprietors, whether or not it ‘really’ belongs wholly or in part to someone else. If, therefore, the inventor (for example) or the promoters of a company intending to exploit the invention wish to retain some control over a patent, it may be wise for them to arrange to be registered as co-proprietors.

A Brief History  43

A Brief History The English patent system, from its earliest foundations in the Middle Ages, has been based on the principle of incentivising technological development with a temporary monopoly. In the fourteenth and fifteenth centuries, grants of letters patent (patent means open) were made by the monarch to encourage European skilled workers to come to England and teach industrial methods to the (largely agricultural and mercantile) English. Often the grant was conditional on the grantee providing practical training of native apprentices as to how to work the invention. Until the early seventeenth century, it was very difficult to challenge these monopolies: to do so was regarded as evidencing a lack of proper respect for the sovereign’s authority. The royal prerogative to grant patents was widely abused as a source of crown patronage (the famous Case of Monopolies, 1603, was about a patent for playing cards. The court said the patent was bad at common law – it was hardly a new invention by that time). The Statute of Monopolies of 1623 confined the legitimate exercise of the prerogative power to grant patents to the ‘true and first inventor’ in respect of the sole working or making of ‘any manner of new manufactures … which others at the tyme … shall not use’. It also set a limit of 14 years (two periods of apprenticeships) for the monopoly. The statute said that the grant of letters patent shall be permitted provided also that ‘they be not contrary to the law nor mischievous to the state, by raising prices of [commodities] at home or hurt of trade, or generallie inconvenient’. It was not until the eighteenth century that the patent specification became important as providing an educational function and helping somewhat define the scope of the monopoly. Until then, the subject matter of the patent was usually described in very broad and general terms, and the patentee was probably in a relatively strong position to beat off infringers (for whom the punishment could be imprisonment). Legislation was passed which established that the grant of the patent would be made conditional upon the patentee’s filing a specification of his invention within six months of grant, which would show that the invention existed, telling the public how to work it and showing what the claimed invention was. At the time, getting a patent was very expensive – as Dickens so well explained in his cynical (but accurate) description in The Tale of a Poor Man’s Patent. (Patents have always been an expensive business – there is nothing new about that.) Only from 1852 did an inventor have to file a specification upon application for a patent. At the same time, a single British Patent Office was created, uniting the previously separate systems for England and Wales and Scotland. The requirement for patent claims dates from 1883. The official search and examination to determine whether the invention was novel was introduced in 1902. The system remained largely unchanged until the new European system started in 1978.

5 Important Inventions Introduction Every now and then, somebody makes a really important invention. Quite often, nobody knows this has happened until too late, and it is found either that the person who made the crucial step did not bother to apply for a patent at all or that their application was considered just as a matter of routine, so that they got a patent that would do very well to cover some minor improvement yet withstand neither a determined challenge to its validity nor a determined attempt to invent around its ‘claims’. In that case, the invention can be used by anyone prepared to spend a little time and money upon research and rather more upon litigation. Sometimes, though, the inventor – or the inventor’s employer – knows they are on to a good thing. What should they do about it?

Where Others have Tried If the invention is one that a lot of people have been trying to make, there may well be very little to be done except get whatever patent the UKIPO will grant and hope for the sympathy of the court in due course. For in that case, the UKIPO will be able to locate dozens or even hundreds of specifications dealing with the subject matter, and others may have come so close to the right answer that there is little left to patent. Of course, the failure of many others to arrive at the actual invention is strong evidence that it is a good invention, rather than something obvious; but in practice, the drafting of valid claims that are broad enough to give real protection for the invention may be impossible where there have been too many earlier proposals. Some big companies make a point of patenting every slight advance in research: partly in the hope that if one of their competitors finds the answer, they will have enough patents of their own that are important enough to bargain with, partly for the very purpose of making it difficult or impossible for competitors to get valid patents. (Economists, many of whom cannot grasp how the patent system works and has always worked, are apt to express concern about this as the creation of ‘patent thickets’ and talk about ‘hold-ups’, even in industries as fastmoving as telecoms. There is no evidence whatever that the thicket or hold-up conjectures are true.) An independent inventor, hoping to make a large fortune

Protection Abroad  45 by research in competition with the research departments of such large corporates, is for this reason almost certainly wasting their time unless they make a truly important advance. They would probably make more money by research in a field that is specialised enough for their success not to be a serious challenge to any bigger rivals.

An Important Invention Consider the case of a manufacturer who has devised an invention that they believe is important, and that is unexpected enough to offer a chance for a really valuable patent. It will have to be valid, for it is sure to come under hostile scrutiny as soon as its importance is understood; yet it must also have claims that are wide in scope, so that competitors cannot escape from it except possibly by spending large sums upon research. It follows that particular attention will have to be paid to legal technicalities, which means extra trouble and extra expense in applying for the patent – though they will be trifling compared with the trouble of fighting a lawsuit later and the expense that will be incurred even if the suit is successful.

Protection Abroad In Chapter 4, we outlined the process for securing a UK national patent, but in the case of a really important invention, it will also be necessary to patent abroad. Even a company unable to contemplate manufacturing abroad or bringing infringement actions abroad to protect an export market may want to license foreign manufacturers and get something that way. (Even a foreign manufacturer who is mainly interested in ‘know-how’ will often be unwilling to sign a satisfactory agreement unless there are patents in their home country on which to hang the agreement.) Potential investors might only be interested if there is at least the potential of securing international patents for these reasons too. The first step is still, usually, to file a UK national application, as this will establish a priority date. In this case, it is probably worth the extra cost of requesting a patent search too, so that the implications of any relevant results can be considered in good time before the foreign filing decision has to be made. If the foreign applications are to benefit from the UK priority date, then they must be filed on or before the anniversary of the initial filing. The next step is to identify where patent protection is really required. Only the largest companies with the deepest pockets engage in truly global filing strategies covering all possible countries, and then only for their most significant developments. In some industry sectors, there are only a relatively small number of countries where most manufacturing takes place, so national patent applications in these will usually be enough. The decision often boils down to whether to file

46  Important Inventions a combination of a European and national applications or whether to go for an International application under the Patent Cooperation Treaty (PCT), and then whether to keep a separate UK patent application going too.

The European Application Process As we have seen, there are two parts to the EPC. The first is the harmonisation of the rules on patentability and the scope of patents in the signatory states. The second is the granting of ‘European’ patents by the EPO in Munich. Prior to the EPC, applicants requiring protection in several European countries had to lodge a separate national application in each state of interest. This would incur significant cost and duplication – not only official fees and patent attorney charges in every country, but also translating the patent specification into an official language of the different patent offices. Subject to one complication (‘oppositions’ – see below), once the EPO grants a ‘European’ patent, it takes effect as a national patent in each designated country. A UK patent granted by this route is called a ‘European Patent (UK)’, but it is not really ‘European’ (unlike the EU trade mark and designs, which we discuss in later chapters). It is a UK patent, just as if it had been granted by the UKIPO. It will have corresponding sister patents in other European countries – EP(FR), EP(DE), etc.

The Application Process Typically, when a European patent application is made, it will claim priority from an earlier national patent application for the same invention. For UK applicants, this could be either a formal or an informal UK application. It is possible, though, to file European applications as the ‘first’ application without claiming any priority, or to file a European application via an International application under the PCT, which we shall come on to discuss. The European patent application process is quite similar to the UK process that we described in Chapter 4, but with some important differences. The first key difference is that a European patent application can potentially cover up to 38 different countries. On filing, an applicant can keep open the option of securing protection in all of them or choose (‘designate’) only some of them. The application can be filed in any one of the official languages (English, French or German). The chosen language is used for the entire application process. Another difference is that renewal fees are payable while the patent is still pending, with the first one due two years after the application date, and annually thereafter. As with UK patent applications, European applications are subject to a preliminary examination and search, and then publication at the 18-month stage. The search report will be published separately if it is not available in time, and it is this date which sets the deadline for requesting full examination and confirming

The European Application Process  47 the countries of interest (and paying the corresponding fees). After examination, either the application will be accepted or there will be the opportunity to respond to the examiner’s objections. Refusal can be appealed to a ‘Board of Appeal’. If the application is allowed, there are further grant fees to pay, and the applicant must also file translations of the claims in the two other official languages before the European patent is granted. The granted European patent will only take effect in designated countries where it is ‘validated’. For some of the EPC countries, validation requires filing a translation of the full text of the specification into an official language of that country, which can be quite costly. Others now only require the claims to be translated if the specification is in English. (Most will require a translation if you want to enforce the patent in that country.) After grant, annual renewal fees will become payable at each national patent office, but as the rights are independent, it is possible to keep the patent in force in some countries and allow the rights to lapse elsewhere.

A Unified Patent Court and Unitary Patent We mentioned in Chapter 4 that plans envisaged in the 1970s for a ‘Community Patent’ under the CPC came to naught, but an ambitious plan of similar impact is very likely to come to fruition in 2022, after over 50 years of discussion. In due course, once a European patent has been granted by the EPO, applicants will be able to select a near EU-wide patent (Spain, Poland and Croatia haven’t joined) called a ‘Unitary Patent’ or ‘EUP’ as an alternative to national patents in those countries. In tandem, the Unified Patent Court (sometimes referred to as the UPC) is being established, which will have a single jurisdiction over sister European patents (whether granted before or after the Court starts). There will be a transitional period whereby patent owners can opt out of the system for their existing patents. Until the present government backed out in 2020, the UK was to be part of the scheme. (Based as it is on the EPC, it would have been possible to stay in notwithstanding Brexit.) It is too soon to discuss this further, save to observe that a lot will depend on the judges and the costs of the system, which are not yet known.

EPO Oppositions There is one feature of the EPO system which calls for special mention: the misnamed ‘opposition’. Within nine months of grant, anyone can ‘oppose’ the patent at the EPO and seek its revocation. If successful, an opposition knock outs the patent everywhere. Unfortunately, the procedure is extraordinarily slow, leaving the fate of the patent or the scope of eventual claims uncertain for many years. (This may operate to a patentee’s advantage, as uncertainty alone often puts competitors off.) Moreover, the procedure is, at least to those used to the Anglo-Saxon

48  Important Inventions system, crude and uncertain. It proceeds almost exclusively on paper, with oral hearings seldom lasting more than a morning. There is no real method of assessing evidence – assertion of technical fact by an advocate may be accepted. ‘I discussed the case with an engineer yesterday and they said …’ seems to do as well as a sworn statement. There is no cross-examination or discovery of documents. Sometimes parties are permitted to take the other by surprise at a hearing, for instance by producing an exhibit ‘out of the hat’. The slowness of the system can have serious effects on enforceability too. In many European countries, national courts will not enforce the patent or hear revocation proceedings whilst there is an opposition pending, though there is the later advantage that considerable respect is given in those countries to a patent which has survived EPO opposition. Once UK courts would only stay proceedings pending determination of an opposition if the result of that opposition (on appeal) was imminent. Virgin Atlantic v Zodiac, 2013 changed that somewhat, but broadly speaking, our courts will allow someone affected by a patent to attack it even if there are parallel EPO proceedings. Moreover, our courts do not treat a patent which has survived an EPO opposition differently from a patent which has not. They use their own judgment on the evidence before them – the opposition decision reasoning will of course be taken into account, but no more. The possibility of an EPO opposition is a factor in favour of filing national applications, since then there can be no ponderous EPO procedure running in parallel. Some companies avoid the EPO route for patents in Europe precisely because they do not trust the EPO opposition procedure. The EPO has made some effort to hurry things up in urgent cases (both before grant and in oppositions). However, to a patentee wanting their patent granted, or to an opponent wanting their opposition determined, the Office’s sense of urgency still seems rather like that of those who think that mañana conveys too great a sense of haste.

Post-grant Amendment In Chapter 4, we discussed the likely reasons for post-grant amendment of patents in the UK national context. Once a European patent has been granted, it is possible for the applicant to lodge a single request at the EPO to seek amendment of all the resulting national patents. The amendment can only be to reduce the scope of the claim, rather than, for example, to improve clarity or add in a new claim. If accepted, the amendment takes place ‘centrally’ – it applies in all designated countries.

The Patent Cooperation Treaty The PCT is administered by the World Intellectual Property Organization (WIPO) in Geneva – a UN agency. The PCT establishes a procedure to file a single ‘International’ patent application, which automatically designates all member

What Route to Take?  49 states (currently over 150 countries). The International application adds an extra step in the patenting process, but by doing so, it delays the deadline (and cost) for filing foreign national patent applications and thereby buys time, so that a more informed decision may be made. Many applicants believe it is worth the additional time and expense, so the system is very popular. The granting (or not) of national or regional patents designated in the International application takes place in the ‘national phase’ and remains under the control of the national or regional patent offices. The International application is filed either at the applicant’s ‘national’ patent office (including the EPO) or directly at WIPO. It can claim priority from an earlier national patent application filed in the preceding 12-month period. The application papers, including the specification, are filed in one language (which can be English), and one set of fees are paid. The receiving office checks formalities, and then sends it to one of the major patent offices (such as the EPO) for an ‘International Search’. The applicant receives a ‘Written Opinion’ setting out any relevant prior art found and preliminary conclusions on novelty and obviousness. The applicant can then assess how good the chances are of getting a patent and if things do not look good, they can quit before spending too much. If the application is not withdrawn following receipt of the search, the application will be published at the 18-month stage. It is also possible for the applicant to request an ‘International Preliminary Examination’, which is a more detailed analysis, usually based upon revised claims and submissions made in response to the earlier written opinion. In this way, the applicant can enter the ‘national phase’ in the countries of interest with the application in a form which is more likely to be accepted by the national patent offices. The cost for entering the national phase may still cost several £ks per country, but these costs have been deferred by around 18 months by the International phase. The PCT procedure is somewhat complex (with some risk, therefore, of things going wrong) and so best navigated by patent attorneys who know what they are doing.

What Route to Take? Since an applicant wishing to secure patent protection in Europe has the option of filing national patent applications or a European application, possibly via the PCT, then which route should they choose? Several factors will influence the choice. First, cost. As a rule of thumb, the EPO route is likely to work out cheaper than national applications if protection is required in three or more countries. The saving arises from both official fees and the fact that you only need to use one patent attorney, rather than employing one in each of the countries of interest. Moreover, there is no need for early translations, so this cost is deferred until you can be confident that your European patent will be granted. And even when granted, only translations of the claims are needed for most countries unless and until the patentee sues for infringement. If one uses the national route, then

50  Important Inventions translations are needed on filing, which will generally be within 12 months of the initial application. A patent attorney’s fees for drafting a patent specification are likely to be upwards of around £2000. The UKIPO fees to grant are relatively modest (less than £300, cheaper if you file things electronically). The EPO official fees to grant are over 10 times higher. In both cases, there will be further attorney’s fees to see the application through to grant, which might range between £2000 and £5000, depending on the complexity of the case. Translation of a patent specification into another language is likely to cost upwards of £1000. Patent attorneys have devised ingenious ways of delaying the time when fees need to be paid. This gives the applicant more time to see whether what they have is actually a good idea commercially and whether the patent is likely to be any good. Next, speed. The UKIPO is markedly faster than the EPO. For instance, in the early 1990s, an infringement and validity action about the patent for the first hepatitis C testing kit was decided by the UK High Court and Court of Appeal within two-and-a-half years of grant by the UKIPO. The corresponding EPO application (made at the same time) was still pending several years later, and the opposition in the EPO was still going some eight years after grant. The position is largely the same now, perhaps not quite as bad. The lesson is obvious: if you think infringers will soon emerge, file a national UK application. Thirdly, validity and scope. A patent drawn up to suit the practice of one country will seldom be fully suited to others. So International or European applications using a single specification for all countries may not be as good as individually tailored applications. Fourthly, there is the ‘eggs in one basket’ versus the ‘gap in protection’ choice. If the applicant goes the European route and something goes wrong (e.g. the EPO find the invention unpatentable after examination or opposition and an appeal fails), then protection is lost in all the countries designated. On the other hand, a refusal of a national application in one country may leave a gap in protection, but national offices might reach a different conclusion. The ‘belt and braces’ option is to do both, but this costs a lot more and so is only likely to be an option for those with the deepest pockets. A compromise for UK applicants is to at least maintain a UK national application in addition to a European one. This increases the cost somewhat, but provides flexibility and security against things going wrong. You can often adjust the trailing application (almost certainly that in the EPO) using the experience gained from the earlier one – though there are limits to this. Adopting this double-barrelled approach may also be a sensible precaution given the uncertainties of the potentially forthcoming Unified Patent Court. Ultimately, an applicant must choose between the patent granted by the EPO and that granted by the UKIPO, because the rules do not permit double patenting of the same invention. Absent a positive choice, the EP(UK) patent will prevail. In countries outside the European system, an International application might be sensible unless it is very clear from the outset where national patents are required.

‘Improvement’ Patents  51

‘Improvement’ Patents If a patent proves profitable, its owner will want to go on profiting from the invention for as long as possible, even after the patent expires. One way in which a monopoly in an important invention may effectively be kept alive after the patent has come to an end is by patenting large numbers of minor improvements to the original invention. Provided these are genuine developments (which meet the patentability standards in their own right), and provided they are patented with determination and persistence, by the time the original patent expires, a would-be imitator should be faced with this situation: that the article described in the original specification (and which is now free for others to copy) is so inferior to contemporary designs that it is commercially unsaleable. But the imitator cannot equal the newer product without risking an action for infringement of one or more of the improvement patents. Even if the patentee does not win in all cases, the costs the competitor might incur in fighting and losing other actions might still take much of the profit out of the venture. For this reason, the existence of a mass of improvement patents is often a sufficient deterrent to would-be imitators. The patentee’s position need not deteriorate with the further lapse of time, as their product – protected by the improvement patents – should always be some years ahead in design. The longer they keep the field to themselves, the greater the advantage they gain in manufacturing experience. This monopoly will last until some competitor comes along with the skill needed to ‘design around’ the more dangerous patents and the courage to fight a patent action if necessary; how long this will be will depend as usual on the importance of the market covered by the monopoly, as well as on the rate at which the originator continues to devise new patentable improvements. Such monopolies have sometimes lasted a very long time indeed. Where the owner of the original patent is the manufacturer, the patenting of improvements presents no particular difficulty. Where, however, the main patent is exploited by licensing someone else to manufacture in return for payment of a royalty on production, the patentee will find it difficult not to lose control as soon as the original patent expires. In such a case, the developments on which improvement patents can be based are likely to be made by the licensee, who will also have the practical experience. Any new patentable developments will naturally belong to the licensee. Sometimes, the licensed manufacturer can be persuaded to agree that the original patentee shall become the owner of the improvement patents, but such arrangements are mostly illegal under competition law. It is in general very difficult for an inventor who is not actively engaged in an industry to keep any substantial control over it by means of patents. Cases do still occur from time to time of inventors making large fortunes by using their inventions to build up large manufacturing businesses, while other inventors do well enough by selling their patents to existing firms and at the same time getting important posts with those firms as consultants or designers. The inventor who makes any large sum simply by the sale or licensing of their patents seems to be rather rare.

52  Important Inventions

Action for Infringement or Revocation The ultimate testing ground for a patent is the court. Generally, only important patents are litigated, those of minor scope can be invented around and, unless there is a lot of money at stake, litigation will probably not be worth it for either side – they make a deal instead. The first case in which a patent is involved is vital for that patent – there is normally just one fight about the validity and scope. Normally such a fight is started by the patentee suing for infringement, the common response to which is a counterclaim for revocation. However, a potential defendant can start things off by claiming revocation and/or by seeking a declaration of non-infringement – to which the patentee often responds by counterclaiming for infringement. If the patentee loses, it means either that the patent is found invalid and the grant is revoked or that the claims of the specification are found to be too narrow to cover what the defendant makes or does. In the former case, there is no longer any patent; in the latter, everyone in the industry now knows how to get around it. If the patentee wins, on the other hand, the patentee’s competitors will probably respect that patent in future: there are always other things to make and sell that do not involve a patent action. Furthermore, if the patent is held valid, the patentee will receive a ‘certificate of contested validity’, which, while not forbidding others to challenge the validity of the patent or to claim they are not infringing it, will make it extra expensive for them if they lose. The actual effect of a certificate is to entitle the patentee, if they win another action on that patent, to ‘indemnity costs’ instead of ‘standard costs’ for the action. The upshot of the arcane rules of costs assessment is that ‘indemnity costs’ will be around 90% or more of the winner’s costs compared to ‘standard costs’ of about 70%.

The Scope of a Patent: Claims and Equivalents Most patent disputes include an argument about the meaning (what lawyers call ‘construction’) of the claims. Generally, the patentee says the meaning is wide enough to include what the defendant is doing; the defendant says not so. Sometimes, the defendant adds that if the claim is wide enough to catch them, then they also cover something old or obvious, and so are bad. In the UK, we tend to be reasonably careful about patent claims. After all, their purpose is not only for telling people what they cannot do, but also what they can. And it is the patentee (or at least their patent attorney) who draws them up in the first place, meaning they have free choice on how their invention is defined. UK courts have traditionally held the patentee to their word. Elsewhere in Europe, the traditional approach was different. The features listed in the claims were historically used more as a guide as to what the invention might be, leaving it to the courts to determine whether an infringer had taken the inventive concept or not.

The Scope of a Patent: Claims and Equivalents  53 With the harmonisation of patent law under the EPC, all countries bound by the agreement are supposed to treat claims in the same way. Indeed, there is a special ‘Protocol on the Interpretation of Article 69’ which tries to achieve this. This says that countries should neither read claims too literally nor treat them only as a guide, but that the correct approach lies somewhere in the middle. However, as there remained a fairly large gap between the two ‘forbidden’ extremes, countries could ostensibly comply while still largely carrying on as before. To try to narrow the gap, the Protocol was amended in 2000 to say that national courts must ‘take equivalents into account’ when applying Article 69. Typically, being a diplomatic compromise, it still does not say how! For instance, you could take the view that if a patentee elects to use a specific term (‘glued’, say), then as it was open to them to be more general (‘fixed’, say), they must have meant to be precise and to exclude equivalent fixing methods. Or you could take the opposite view and interpret ‘glued’ to cover things which are screwed, nailed, welded, etc., especially if the form of fixing has no impact on how the invention works. Let’s look at a few examples. The patent in Catnic v Hill & Smith, 1982 was for a ‘box lintel’ – a building component for going over the openings for doors or windows. Old lintels were formed of reinforced concrete, steel girders or (the very old ones) parts of tree trunks. Catnic’s idea was to use a hollow steel box shaped as taught by the patent. The patent claim called for two horizontal plates ‘substantially parallel’ to each other, an inclined support member and a ‘second rigid support member extending vertically’ from one horizontal plate to the other. The fight was over the meaning of ‘extending vertically’. The defendant company used a support member 6° off true vertical, but which was good enough to work. They argued that the claim meant true vertical, emphasising this by contrasting the way the claim dealt with the horizontal plates. It was enough for these to be ‘substantially parallel’, whereas the word ‘vertical’ was not qualified. The House of Lords had no difficulty in dismissing this as a lawyer’s quibble. The person skilled in the relevant art would understand ‘vertical’ to mean any member vertical enough to work (a ‘purposive’ construction). The only wonder of the case is how the Court of Appeal ever thought otherwise. On the other hand, in Improver v Remington, 1989, the patent was for a device for plucking unwanted body hair – in the refined language of the patent, a depilator. The patentee’s idea was to use a rotating helical spring bent in a curve. One end was fixed to an electric motor and the other to a fixed bearing. As the spring rotated at high speed, its windings opened and closed rapidly, thus catching and pulling out the hairs. The patent claim specified a ‘helical spring’. The wily defendant substituted for this a rubber rod with transverse slits. When this rotated, the slits opened and closed just as in the case of the windings of a helical spring. But, both here and in Hong Kong, the courts held there was no infringement. True, the rod had all the necessary properties of the helical spring (it was appropriately ‘bendy’ and ‘slitty’), but it was not a ‘helical spring’ as required by the claim. To find that the defendant’s product fell within the claim, it would have been necessary to ignore

54  Important Inventions the word ‘helical’ altogether or regard it as no more than a kind of shorthand for a component having the necessary properties. That was more than interpretation of language could go. The German courts differed, applying their then doctrine of infringement by a direct equivalent of features specified in a claim. It is doubtful whether the case would be decided the same way now in Germany because they have narrowed their ‘doctrine of equivalents’ so as to exclude inventive equivalents of what is claimed. Nor is it clear that a UK court would now find for the defendant. The UK Supreme Court decided, in Actavis v Lilly, 2017, that not only should patent claims be construed purposively (as before), but that if a claim element had been substituted with an equivalent element, there would nonetheless be infringement. The Actavis case was about a medicine. The patent claim was limited to a sodium salt of a chemical called pemetrexed. The defendant used the potassium salt instead. Even school children are taught that potassium and sodium behave very similarly because they are from the same family of elements. And anyway, scientists would know that it would make no difference whether the product was one salt or the other because when the medicine dissolves in the stomach, the salt ionises (i.e. dissociates) from the pemetrexed. The Supreme Court said the patent was infringed by the defendant’s variant, despite the plain meaning of the term ‘sodium’, because it was obvious to a skilled person reading the patent that the variant achieves the same result as the claimed invention and achieves it in substantially the same way. Unlike the current German position, the Supreme Court said – unnecessarily, in the circumstances – that even inventive equivalents would be caught. That has a serious implication: if an inventive equivalent of a patent claim now infringes, there is a reduced incentive for others to ‘invent around’. It remains to be seen whether the courts will follow this aspect of Actavis. They don’t have to. US patent law also has a doctrine of equivalents which has bounced up and down over time. In recent years, the uncertainty it creates has led the courts to apply the doctrine more and more restrictively. Other national courts in Europe have their own ‘doctrine of equivalents’ under the EPC, but there is still no real agreement as to what it is! Some think the whole doctrine, even though it may achieve a kind of ‘justice’ in a particular case, is not worth the costs of uncertainty which are its inevitable consequence.

What Amounts to Infringement? The UKPA contains a list of the kinds of activity which amount to infringement. Most of those which amount to ‘direct’ infringement are what one might expect: making, selling, importing or using a patented article; working a patented process; or selling, importing or using products obtained directly therefrom. But it is also an infringement to ‘keep’ the article or product. This really means ‘stock for commercial purposes’, so a mere carrier is not liable, Smith Kline v Harbottle, 1980.

Delayed Actions  55 And ‘making’ can involve a question of degree. Thus, where a patent claim was for an ingenious cage holding and supporting a large, standard plastic bottle, a party who simply replaced old bottles for new was held not be to ‘making’ the claimed product, Schütz v Werit, 2013. There are also various forms of what is called ‘indirect infringement’. Thus, a supplier of a ‘means relating to an essential element of an invention, for putting the invention into effect’ will infringe if they know, or it is obvious to a reasonable person in the circumstances that those means are suitable for putting and are intended to put, the invention into effect in the UK. A defendant who made and sold a patented potato harvester was caught in this way. The patent claim required the use of a rubber roller. The defendant sold a machine with a steel roller, and also sold a rubber roller for the farmers to replace the steel roller with. The end users were the ones who ‘made’ the invention, but the defendant was still supplying the ‘essential means’, Grimme v Scott, 2010. There is an exception to this rule, where what is supplied is a ‘staple commercial product’ – and even then, it is infringement if the supplier intended to induce the recipient to infringe. Also, there are some general exceptions: for things done privately and noncommercially (it is not at all clear what ‘privately’ means here: probably, ‘privately as distinct from commercially’); for experiments with the invention; for methods of medical treatment (e.g. the making up of individual medical prescriptions); and for use by foreign ships and aircraft (which includes regular ferries, for instance, between England and Ireland, Stena v Irish Ferries, 2003). There is also a special provision protecting those who used, or had prepared to use, the invention before the priority date of the patent. They may go on doing what they did or had prepared to do before. This last provision is necessary because use of an invention only invalidates a subsequent patent for it if the use makes the invention available to the public. Manufacturing processes may well not be made public, or a product may be incapable of analysis. It is a fundamental tenet of patent law that a patent should not be able to prevent a person doing what they did openly before it was applied for. The infringing act must be carried out within the UK (or its continental shelf – added for the oil industry). However, use within the UK is read widely; for instance, an online bookmaker who had UK punters using their own computers as terminals could not escape infringement by keeping the server abroad – the defendant was still, in substance, using the patented system (computer, program and terminals) within the UK, Menashe v William Hill, 2003.

Delayed Actions We emphasised in Chapter 1 that, in most cases, if a patent action is going to be fought at all, the sooner it is started the better. Equally, there are cases where an action should not be started at all. For example, a patent of dubious validity

56  Important Inventions may be of considerable commercial value, being respected by most competitors. If someone does pluck up enough courage to infringe, it may be better to buy them off with a licence at low rates (or even free of royalty) rather than risk suing. It may be better to buy off a whole series of competitors – a sort of game of sardines. If, on the other hand, the patent is probably valid and infringers are not of great importance compared with those who respect the patent or pay royalties, it may be worthwhile waiting until the patent has almost expired and then cleaning up by demanding damages from infringers – rather than upsetting things by suing earlier. In any case, where an infringer is not sued right away, consideration should be given to notifying them of the existence of the patent to stop them pleading innocence later. Again: suppose a competitor finds a way around the patent and tries to patent their alternative. The immediate reaction of some patentees is to attack this alternative patent, but often this is the wrong reaction. The right thing to do may well be to do nothing, as having this alternative route protected may stop other rats from using the same hole. From the point of view of an intending imitator of the patented article, there is a serious risk that the patentee may allow them to make the imitation for several years, but then make a claim for a very large sum in damages. Before manufacture begins, a competitor can bring an action asking the court to declare that the article proposed for manufacture will not infringe the patent concerned – a declaration of non-infringement. In the same action, the claimant can also ask the court to revoke the patent if it is believed to be invalid. The proceedings, in either case, are nearly as expensive as ordinary actions for infringement and may be rather easier for the patentee to win, but there might be some tactical benefits – the threat of having to defend the patent in court might bring an intransigent patentee to the negotiating table.

6 More about Patents The Importance of Validity A goodly proportion of granted patents are found invalid when they are closely challenged in litigation. This is hardly surprising since patent office examiners have limited time and budget, and may simply have not found the best prior art. Sometimes economists and others (who apparently don’t live in the real world) get excited about this and say things like patent offices should ‘raise the bar’. It can’t be done and never has been. Think of a patent office as a kind of coarse sieve – filtering out clear cases of validity and letting arguable ones get through. It is the only way the system can work – and always has. Since most lawsuits about patents cost at least £200k per side (and generally a lot more), and the larger part of the cost falls on the loser, validity is a serious matter for patent owners. (A patentee can insure against the risk of having to sue infringers, and some do.) It does not follow, however, that patents are useless; rather, this is a measure of success that patents have. It is expensive and risky to challenge the validity of a patent. Save in clear cases (which will settle early), it is hardly ever possible to be sure the challenge will succeed. In the ordinary way, therefore, it is a better proposition commercially to make something unarguably outside the scope of the patent than to risk an action for infringement. As a rule, it is only the most important patents that are attacked, and even then the attacker will try to find a design that escapes at least the more impressive claims as far as possible. The great majority of patents go through their lives in peace, with nobody really convinced they are valid but nobody prepared to take the risk of infringing them. Commercially they are just as useful as if they had been valid. Thus, even an invalid patent is often valuable enough to make it worthwhile keeping on bluffing until the bitter end. And there is a lot of truth in the old adage ‘a weak patent in strong hands is worth more than a strong patent in weak hands’.

Evading Patents Having looked at infringement in Chapter 5, we turn our attention to strategies that businesses use to avoid facing allegations of patent infringement.

58  More about Patents

By ‘Designing Around’ It is much easier to say why a particular patented device is successful, and, critically, what else would be successful, once a product using that device has been on the market for some time than it was when the patent specification was originally drawn up. The patent attorney who drafts the specification must attempt to foresee what, up to 20 years in the future, other manufacturers are likely to want to do, and must frame the claims so as to include all these future activities. At the same time, they must exclude anything that has been published before. (The inventor who creates a crystal ball for patent attorneys will make a fortune!) In practice, what an attorney does is to estimate which features of the new product are going to be important to its success and make the claims cover whatever combinations of those features are not present in the known prior art. If they get it right, the patent should be valid and fairly hard to ‘design around’. If the patent drafter either gets it wrong or some unknown piece of pertinent prior art is unearthed, then problems arise. It may, for example, become apparent that either what is claimed is something only trivially different from that in the disclosure (in which case, the patent will be invalid for obviousness) or that the monopoly has been confined to include a feature which proves to be non-essential (in which case, competitors may be able to avoid infringing the patent by omitting that particular feature). Though the courts may disregard features shown not to be practically significant, this cannot be relied upon to happen. (Indeed, mostly the courts say that the patentee must have regarded the feature as significant, else it would not have been included in the claim.) The more and better information the client gives to their patent attorney at the initial stages, the better they can predict what is likely to be significant. That is why it is important to get a good patent attorney – one who can really understand the technology, and who has the vision to frame claims which are wide enough and yet still stand up to scrutiny. A good working relationship with one’s patent attorney is a valuable asset indeed.

By Making Something ‘Old’ A granted patent specification lists the prior art identified in the UKIPO’s search, and other prior art can be found online (see, e.g. the EPO’s search site: https:// worldwide.espacenet.com) or by employing a private searcher. One way of avoiding a patent is to go back to one of these earlier ideas and use that, or something only trivially different. The patentee is then in a dilemma: if a rival’s product falls within the patent claims, then the invention is not sufficiently different from the earlier idea and the patent must be invalid. If it is not within the claims, then there is no infringement. A defendant who says their product is old, or an obvious development of what is old, is said to be raising a ‘Gillette’ defence, named after an old case, Gillette v Anglo-American, 1913. There, the defendant’s razor closely resembled an old razor, and the court said there was ‘no inventive step’ between the defendant’s product and the old razors.

Licensing  59 If the patentee has made a real technical advance and the specification is skilfully drawn, the patented product should have a sufficient commercial advantage over earlier designs, and the patent will protect that advantage. If, however, as so often happens, the patentee is only the first to interest the public in an idea and not the first to make it technically successful, then competition based on earlier designs may be very damaging. Hallen v Brabantia, 1989 is a good example of this sort of thing. The patent holder had been the first to put PTFE (polytetrafluoroethylene, Teflon) – the ‘non-stick’ material – onto a type of corkscrew called a ‘self-puller’: when you go on turning, the cork rises up out of the bottle. But self-pullers were old, and a Frenchman had put PTFE onto another type of corkscrew to help get the screw into the cork. It was obvious thereafter that PTFE would improve the ‘getting-in’ of any kind of corkscrew, including self-pullers. So, even though the claimant was the first to make PTFE self-pullers commercially attractive, they had no valid monopoly in them. No system of patents can stop competition of this sort: the commercial innovator of this kind must rely upon the commercial advantages of being first to market, ideally adopt a good trade mark, and perhaps gain patents on minor features and a registered design or two to make it impossible for rival products to look the same. As ways of avoiding patents go, this method of digging up an old design is reasonably safe. It also has the advantage, in theory, that there is no need to do any patent search to see if what is being done is without danger. Sadly, in practice, things are rarely this simple. If what is now made is exactly what was made (or described) before the patent, then certainly any claim that covers it must be invalid. Nearly always, however, some alteration of the old design will be needed, if only to make it suitable for modern production. Then a quite different question arises: whether the changes made to the old design were obvious changes to make before the date of the patent. The answer may easily be that they only became obvious changes to make later, once the patent owner had demonstrated that there was a market for something close to the old design. But if that is so, it is possible for the patent to be both valid and infringed. Most firms will prefer not to take this risk unless the matter is of real commercial importance, so that, in the ordinary way, the patent will be almost as useful to its owner as if the earlier design had never been published. As we saw in Chapter 3, the value of a patent may depend greatly on its not being too important – like a chess pawn.

Licensing The General Principle So far, we have only considered patent monopolies as a means of keeping imitations off the market. There is another way of exploiting a patent: the grant of licences. If the patent is valid, the manufacture, importation, sale or use of a patented article

60  More about Patents (or of articles made by a patented process or machine) are each only lawful if the patentee gives permission for them. Such permission is called a ‘licence’. Subject to the exceptions mentioned below, a patentee can charge what they like for the licence and make what rules they like for its exercise. For those who do not wish (or cannot afford) to manufacture under the patent themselves (e.g. a university), this is the normal way of making money out of a patent.

Limits on Licensing and Exploitation Not every sort of limitation or condition, though, is allowed. First, there are the rules about ‘exhaustion of rights’ (see Chapter 27). Next, there are the limits which competition law imposes on what can be done with patents (and other IP rights). UK competition rules govern business activities which might affect trade within the UK. These mirror EU law, which might also be triggered if EU trade is affected. Essentially, broadly anti-competitive agreements and abuses of monopoly are caught. A good example would be where a patentee, as a condition of a licence or the sale of a patented product, also requires the buyer to purchase wholly unrelated unpatented items (‘If you want to buy my patented running shoes you must also buy my shorts’). For a really important patent, a refusal to license on reasonable terms may amount to an abuse of monopoly in the eyes of some. Some violations of competition licensing rules may even give a defence to what would otherwise be an infringement of a valid patent, Intel v Via, 2002. Competition authorities are apt from time to time to get concerned – indeed, some would say overconcerned – about patents, particularly important ones. One of their raisons d’être is to prevent and/or punish what Europeans call ‘abuse of a dominant position’. The authorities are apt to see patents as creating a dominant position – and the more important the patent, the more that is so. But one of the major points of the patent system is to grant a legal (not necessarily market) monopoly and to incentivise investment in innovation and development of new ideas. The anti-monopoly mindset of competition authorities is apt to ignore that. A current instance of that are three concurrent consultations by the EU, USA and UK into the working of licensing of ‘standard essential patents’ – patents covering an industry standard, such as 5G or Wi-Fi. The owners of such patents all agree to license each other and any third parties on FRAND (‘fair reasonable and nondiscriminatory’) terms. The authorities have got the idea that somehow patentees are charging more than FRAND, or there is some other problem. But you only have to ask whether there is any real problem with innovation in this area to see that there is none – innovation is proceeding faster than one could have imagined even 10 years ago. And if you were told that a licence for all the patents for a car would cost of maximum of US$30 (or less) for the life of the car, you would surely think there are other, more important, problems. We would love to talk more about this but just don’t have room.

Supplementary Protection Certificates  61

Compulsory Licensing A patent owner ought to exploit their invention if they can; ordinarily, they ought not to use the patent to prevent all use of the invention without good reason (one might be that they own an equally good one which they are exploiting). In the hope of preventing such misuse of patents, provisions of one sort or another have been included in patent legislation for many years: in particular, provisions permitting anyone who wants to use an invention, and can show that the patents covering it are being misused in certain ways, to apply to the UKIPO for a compulsory licence, enabling them to use the patented technology upon payment of a proper royalty. The application cannot be made until the patent has been granted for at least three years. Compulsory licence provisions have never proved effective in lowering prices, and the present ones are hardly ever used. When they did apply in the case of medicines, they made some very rich without contributing anything to research. Contrary to popular myth, patents are not used for suppressing new ideas: the difficulty with anything really new is to convince anyone to take it up. Stories about patents for everlasting lightbulbs and the like being bought up by existing manufacturers to protect their existing business are apocryphal. The few applications for compulsory licences that are made are not concerned with inventions that have been suppressed, but with inventions that have already proved profitable – the patentee wants to keep all the profit to themselves and the licensee wants a slice.

Supplementary Protection Certificates Most of the life of a patent for a medicine or agrochemical may be over before the safety authorities give permission for the patented product to be marketed. So, the patentee may have spent a fortune yet have very little monopoly period to recover sunk costs and make a profit. There is an EU Regulation and scheme to deal with this problem, which the UK has replicated post-Brexit. Under this, a certificate can be obtained which extends protection for a patented medicine or agrochemical (the one actually sold, not everything covered by the original patent) for up to five years from the normal expiry of the patent. The amount of extension is the period between application for the patent and first permission to market anywhere in the UK (previously, EU) less five years, to a maximum of five years. Although the rules for Supplementary Protection Certificates (SPCs) were meant to be simple, they are far from it (partly because those who wrote the SPC Regulation seemed to know little about either patents or regulatory rules). The numerous references to the CJEU about them has made matters worse!

62  More about Patents

Taxation and Patents Patents are subject to special rules as to tax. As one might expect, the costs of inventing and patenting an invention are normally regarded as deductible expenses when computing profits. Royalties are not allowable as business expenses of a manufacturer who pays them; instead, whoever pays the royalty out of taxed income should deduct tax before paying and may then keep it. If there is no profit (i.e. no taxed income) to pay the royalties out of, the tax must be deducted and handed over to HM Revenue and Customs (HMRC). Furthermore, capital sums paid for patents and patent licences (but not sums paid for know-how) are treated as income of the seller spread over a six-year period, this being balanced by allowing the purchaser annual allowances on what they have paid. (This is not quite as hard on inventors as it seems, for a professional inventor must reckon the proceeds of sale of patents as income anyway. It is hard on purely amateur inventors, but they have too few votes to matter.) The position of foreign patentees needs watching here: they naturally tend to demand that a UK licensee agrees to pay royalties (and even more, capital sums) free of tax. There are agreements in force with most foreign countries under which a foreigner can get payment in full (in the case of royalties, the payer is compensated for the tax they would otherwise have deducted and kept), but the foreign patentee has to make the request, and licence agreements ought to be specially framed accordingly. VAT is payable on most patent-related transactions, e.g. royalties. On a brighter note, there is no stamp duty on IP transactions. A scheme called the Patent Box was introduced in 2013 which offers patent owners some tax relief. The general idea of this is to reduce corporation tax paid on the profits made from the taxpayer’s patented inventions to 10%. The notion is that this will encourage research: you cannot get the benefit unless you played a significant part in the research leading to the invention. There are lots of complications (e.g. to allow for research by a group company), and it is unclear how well it is working, even though the amount awarded is increasing year on year. In the latest HMRC figures (for the tax year 2018–19), nearly £1.13bn was claimed by 1405 companies. Of this number, 28% of the companies were classified as ‘large’ and received over 90% of the relief. There is no way to tell how much additional R&D the scheme is incentivising. It may simply encourage companies to apply for more patents of minor scope, since HMRC is not able readily (or at all) to assess the quality or scope of any patent claimed by the taxpayer to justify the reduced rate.

Drugs and Similar Chemical Compounds Problems The effective patenting of newly invented drugs and the like presents special difficulties. The fundamental problem is this. If the drug concerned is an entirely new

Drugs and Similar Chemical Compounds  63 chemical, its discoverer will be entitled to patent it; but because it is entirely new, they will be unable to tell what related substances will be so similar in their effects as to be just as good. If they attempt to guess what other substances will work, the guess may be hopelessly wrong; but if they confine the patent specification to what is really known, competitors (who now know from the discovery what sort of thing to look for) will be able to market some related substance which has not been covered by the patent. The preparation and trial of any new drug is a long job, and even the biggest research laboratories can try out only a few likely compounds at a time. To some extent, the difficulty can be overcome by the power of amendment, but this is seldom completely satisfactory. The inventor’s main safeguard from competition is the cost of testing and marketing a related substance; but if the drug is profitable enough, that it will happen. Generic drug makers are in it for the money. Even worse difficulties face the one who discovers how to prepare a substance that already exists in nature (a protein, for instance, or something like penicillin), for there are bound to be other ways of doing the job that they cannot cover. Further, the person who discovers a new and valuable property of an old substance must be very crafty to get any sort of patent at all, even to cover the stuff as sold. What they do, for instance, is to claim ‘a pharmaceutical dosage form’ containing the old compound, and they are allowed to have a claim in the form of ‘X [the old substance] for the treatment of A [a disease for which X has not been used before]’. The EPC fictionally treats ‘X for a new purpose’ as new, even though X is old. Similar dodges can be devised for other types of invention. It may also be possible to get a patent to cover a process of using the stuff (not, though, use in medicine); but collection of royalties or finding out about infringements may be very difficult. Rational people would say such inventions were particularly valuable and need to be especially encouraged; but others (a sort of alliance of competition lawyers, some economists and cheap medicine campaigners, including some generic companies who want to make a lot of money) advocate restricting such patents, rather than encouraging them. The reality is that there is a strong emotional reaction amongst many who ought to know better against patents for new medicines. The stronger their voices, the more patent law may be restricted, and the less likely it is that new medicines and better forms of old ones will be found. Covid has made the voices even louder.

‘Selection’ Patents There is a special sort of invention that turns up fairly often in the field of chemistry and leads to what are called ‘selection’ patents. When a new and valuable chemical compound is discovered – a new drug perhaps, or a new sort of dyestuff – it will usually be apparent at once to a skilled chemist that innumerable other closely related compounds may be as good or better. But there is usually still room

64  More about Patents for invention in making those compounds, one by one, and finding out which really are as good or better; and even more room for invention in seeing (without making them all) others which will be as good or better. This picking out of the useful ones from a large class which is already known in general terms is known as ‘selection’, though the word has no technical meaning in patent law. In practice, if an inventor finds a compound which is better or different from the earlier, known, large class, they will get a valid patent (e.g. in Dr Reddy v Eli Lilly, 2009, a claim to a specific compound was held to be valid against a general disclosure of a class of 1019 compounds which included the one in question).

Genetic Engineering When recombinant DNA techniques were first developed in the late 1970s, it became possible to identify particular genes or the DNA codes and structures of viruses. Much speculative money went into ‘biotech’ companies, which scrambled to find these in the hope of obtaining valuable patents. And by and large, quite a number were granted. One can take the view that any new information, even if obtained by routine techniques, can be the basis of a patent (as in the USA initially, where any new isolated gene stretch of DNA was patentable). Or one can be stricter and require that the technique used has some novel and unexpected twist to it. Broadly, that was, and still is, the position in Europe. In the UK, it has been decided that you can have a gene (and corresponding protein and antibody) patent if you have discovered a gene and its code and have more than a mere speculative idea what the protein or its antibodies might be used for. A ‘plausible’ or ‘reasonably credible’ claimed use or an ‘educated guess’ can suffice, Human Genome Sciences, 2011. Genetic engineering patents create great controversy, not only of a purely moral or emotional kind (‘How can you patent life?’, ‘Such patents are monopolies over God’s creation’, etc.), but also of a more practical kind, in that they are apt to give the patentee a total monopoly over anything to do with the gene, whether by way of research, diagnosis or even treatment. In the USA, the Supreme Court cut down gene patenting somewhat by saying you could not patent an isolated gene. The reasoning was specious – that it was a merely a ‘discovery’ – whereas it is actually a molecule carrying a code which could be harnessed to make a protein. Another area where controversy raged is the patentability of genetically engineered animals (there is no problem over bacteria). The EPO took nearly 20 years over the point in the ‘Harvard Onco-Mouse’ case – a mouse which develops cancer for use in cancer research. The EPO finally decided in favour of patentability in 2004. The argument about animals is largely over, but possibly could flare up again for it raises emotion and debate which is not always rational.

Rights in New Forms of Plants  65 Next, stem cell tools took the spotlight. The CJEU waded in (biotechnology being one of the few areas in patents where the EU has legislated), holding that even if an invention is not directly concerned with the use of human embryos, a patent must be refused if the invention requires the destruction of even a single human embryo at some point in the past, Brüstle, 2011. It made no difference that the embryo came from a store which would probably be lawfully destroyed in the future. Accordingly, even inventions using ‘off the shelf ’ stem cells derived, at some point, from the destruction of a human embryo are unpatentable. The chilling effect of this decision on stem cell research seemed important, but fortunately is less so now because other approaches have emerged.

Rights in New Forms of Plants More recently, the battles have been about patents for new plants. The EPO originally decided that the specific exclusion of biological processes to produce plants did not exclude the product of an excluded biological process, thereby permitting the patenting of plants, G2/12 (Broccoli/Tomato II), 2015. But in 2020, the EPO (under pressure from anti-patent forces) changed its mind, with the result that plants and animals obtained by essentially biological processes are not patentable after all, G3/19 (Pepper), 2020. It remains possible to patent microbiological processes, however. They are rather important, since many antibiotics are made by fermentation. Although this recent EPO case law has curtailed patent protection for new and inventive forms of plant, plant varieties are already eligible for protection by a separate system of ‘plant breeders’ rights’ covered by the Plant Varieties Act 1997. This system works a bit like patents, but with a separate procedure for obtaining them that is administered by the Plant Variety Rights Office (PVRO). For a variety to be protected, it must be new, distinct, uniform and stable. By ‘new’ is meant ‘not previously commercialised’. The PVRO examines applications for plant variety rights. It only allows grant for a variety for which a special scheme has been created for the relevant genus or species to which the variety belongs. There are different periods of protection for different species (ranging from 25 to 30 years), and all are subject to periodic renewal within this time. The plant breeders’ rights prevent others from commercial use of the protected variety for production or reproduction, sale or offering for sale, conditioning for the purpose of propagation, exporting or importing, or stocking for any of the foregoing purposes. There are specific exceptions for private and non-commercial use, experimental use and use for the purpose of breeding another variety. There are also express provisions allowing farmers to use farm-saved seed for the payment of a ‘fair fee’, which should be lower than the royalty charged on the sale of the certified seed. Compulsory licences are available to prevent abuses of

66  More about Patents monopoly, and special provisions govern the names of new varieties. There is a parallel pan-EU scheme.

The Government’s Right to Work Patents Any government department may use, or authorise others to use, any patented invention ‘for the services of the Crown’. Although a patentee cannot prevent Crown use, they are entitled to compensation for that use, unless the invention was one that any government department already had independent knowledge of before the patent application was filed. (There are similar provisions allowing Crown use of registered designs and design rights, though in practice these tend to matter less.) The kinds of activities which might be covered by Crown use are quite wide; for instance, they include providing the emergency services with priority access to the mobile phone network, IPCom v Vodafone, 2021. (However, on the facts, the defence failed because the particular contract which the user had with the UK government did not qualify as ‘authorisation’.) Surplus patented articles originally made for government use may be freely sold. So too can articles confiscated by HM Revenue and Customs and medical supplies. During a war and for war purposes, for national purposes during a period of emergency or in respect of inventions concerned with atomic energy, government departments may authorise anyone to sell such articles, whether originally made for government use or not – subject to rights to compensation. The Government may also have weapons and munitions made here for allies, or the UN, and sell them to the government or organisation concerned. Except in these cases, the Government has no right to authorise the sale of such articles without permission from the patentee. If the patentee has licensed a firm also authorised by the Government to use an invention, the royalties fixed by the licence need not be paid so far as government use is concerned. Such a licensee may still be liable to make some payments to the owner: guaranteed minimum royalties, for instance, No-Nail Cases v No-Nail Boxes, 1944. In general, however, the owner must rely on their right to demand compensation from the Crown. If the amount of compensation is not agreed, it will normally be settled by referring the matter to the High Court. The Crown is supposed to let inventors know that it is using their patents, but it tends not to (especially, but not only, where military secrets are involved). So, one of an inventor’s main issues tends to be finding out what use, if any, is being made of their invention. This problem is exacerbated by the fact that it is for the Crown to decide whether or not it is using an invention. It tends not to ‘own up’, even where it knows of the patent, if it decides the scope of the patent does not cover what is being done or that the patent is invalid. Naturally, the patentee might take a different view, but they do not get the chance to complain unless they find out some other way that their patent is being used.

Keeping Inventions Secret for National Security  67 In 2020, the World Health Organization adopted a resolution which urged governments, international organisations and relevant stakeholders to collaborate to ensure adequate supplies of vaccines, therapeutics and medical supplies in light of the then emerging Covid pandemic, whether through existing schemes for licensing of patents via pooling schemes or (and this was the main emphasis) by ‘patent waiver’. The Crown use provisions specifically cover the production and supply of drugs and medicines during a period of emergency and so could have been invoked. (Indeed, although the army is the usual beneficiary of Crown use, these powers were used to procure certain drugs for British hospitals in the 1960s.) Calls for a waiver of patents for Covid vaccines and treatments were widespread, many from traditional anti-patent organisations, and calls for Crown use provisions to be invoked were part of this. There was no evidence that these would do any good. Problems of vaccine and medicine supply are largely technical and often have nothing to do with the patent system – which should be left to incentivise research and development into future medicines and vaccines. They will surely be needed for future pandemics.

Keeping Inventions Secret for National Security There are special provisions about patents containing information which, if published, might be prejudicial to national security. If an application is made to patent such an invention, and if and for so long as the Secretary of State (really, the appropriate service department) considers that it ought to be kept secret, the application will not be published. In addition, although it will be examined, it will not proceed to grant. (Amazingly, similar provisions apply to registered designs! Whoever thought that a registrable design might be prejudicial to national security must be out of touch with the real world.) Similar provisions also apply to inventions involving atomic energy, whether of military character or not. Military inventions that the armed forces think good enough to use are precisely the ones they will want to keep secret. So, the provisions giving inventors the right to be compensated for Crown use applies in such cases as if the patent were granted in the ordinary way. In addition, the Crown can, if it likes, compensate the inventor for any damage resulting from the secrecy. It would, of course, be useless to keep such inventions secret here if they were published abroad. So, it has been made a crime for anyone resident in the UK to apply for a foreign patent if the application contains information which relates to military technology or might be prejudicial to national security, unless a UK application has already been filed and six weeks have then elapsed without any secrecy direction being made. If an applicant wants to apply direct to the EPO or foreign patent offices for potentially sensitive material without first filing in the UK, then they should apply to the Security Section (which occupies the mysterious sounding ‘Room GR70’) at the UKIPO for security clearance – although the prospect of a criminal prosecution for breach of this rule seems pretty remote.

7 Industrial Designs Introduction Since Victorian times, our law has included protection for ‘industrial designs’. Originally the general idea was to protect the artistic element in mass-produced articles (shape or applied decoration, or the like). Protection was supposed to be by a system of designs registered at the Patent Office – like a patent for an invention. But over the years, both Parliament and the courts managed to produce a convoluted system as a result of the interaction between the law of registered designs and that of copyright. The problem arose because copyright in drawings (as ‘artistic works’) would be infringed by copying an article made from them. This is easy enough to understand where a truly artistic drawing is concerned (e.g. ‘Popeye’, King Features v Kleeman, 1942), but seems odd in the case of purely mechanical items, such as an exhaust pipe. The whole business got out of hand: not only was the law complicated, it was unsafe to make things which were copies of, or based upon, really quite old articles. For instance, Lego were using (successfully, until final appeal) copyright to maintain a monopoly in their system, even though the basic brick was designed (actually by an Englishman, who was originally copied by Lego) in the 1940s. Absurd arguments as to eye appeal or otherwise of a Lego brick were deployed in all seriousness, Interlego v Tyco, 1989. In the case of spare parts (exhaust pipes), it took the House of Lords to say: never mind copyright, you are allowed to make them, Leyland v Armstrong, 1984. In 1988, Parliament tried to sort things out. It created a second system for design protection to lie alongside the registered system: an unregistered design right where protection arises automatically without a need for registration. It was (and remains) pretty complicated in detail. Subsequently, the EU added its half-euroworth. The UK was required to revise UK design law to correspond with a new EU approach. In addition, the EU introduced its own, EU-wide, system of registered designs. From 2003, it became possible to register these at what is now somewhat misleadingly (because it does not do patents or copyright) called the European Intellectual Property Office (EUIPO) in Alicante. On top of that, the EU created its own automatic EU unregistered design right, which mirrors the EU registered rights (and so differs from its UK cousin). Post-Brexit, although these EU-wide rights no longer apply in the UK, new rights (called continuing unregistered design rights and supplementary unregistered design rights) have been created in their stead to compensate for any loss

UK Registered Designs  69 of design protection in the UK. Copyright can also still play a part – see below. On top of that, some designs can be registered as trade marks or protected by passing off. The upshot is that things are pretty complex – four different sorts of right especially for designs, and three more if you include copyright, registered trade marks and passing off. No one could, or does, call it rational – but no one seems to be in a position to simplify things either. Broadly, however, the position may be rather more straightforward than it seems – it is unsafe to copy anything that has come on the market within the last 10 years. If you do, then you are likely to fall foul of an unregistered design right. Even simple things, such as a floppy rectangular case for a flat-folding umbrella, can be the subject of such a right, Fulton v Totes, 2003. And the sensible thing to do, even if you have not, or your supplier has not, copied, is to check whether an article you make or import bears too close a resemblance to a registered design still in force: a job for a good patent attorney.

UK Registered Designs Almost any visual aspect of a product can be registered: ‘the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of a product or its ornamentation’. It is the design, as applied to any product, which is protected. And ‘product’ is widely defined too, covering even such things as ‘graphic symbols’ (computer icons, for instance – or graphic trade marks). For a design registration to be valid, the design must be new (i.e. not the same as any design which has already been made available to the public) and have ‘individual character’. The latter, in essence, requires the design to be noticeably different from any earlier publicly available design. In assessing individual character, the freedom the designer has in creating the design is taken into account. ‘Made available to the public’ does not have the clear, bright-line meaning it has in patent law. For patents, novelty is destroyed if one person has the prior information and is entirely free to use it – that is why blurting out your invention before you have applied for the patent is a very bad idea. But for design law, a prior disclosure is not regarded as making the disclosure ‘available to the public’ if ‘it could not reasonably have become known in the normal course of business to persons carrying on business in the geographical area comprising the United Kingdom and the European Economic Area and specialising in the sector concerned’. This is dreadfully vague – and particularly odd, given that for infringement there is no ‘sector concerned’. Prior to Brexit, the CJEU had still not had the opportunity to make sense of this, and probably would not have succeeded even if it had. Complicating things further, there is a ‘grace period’: a prior disclosure by, or with the consent of, the design holder does not count, provided that any application for registration is made within one year of this disclosure. This means that the product can be tested

70  Industrial Designs in the market first – only incurring the (modest) cost for registration if it seems successful enough for others to want to copy. Apart from question of ‘newness’ and ‘individual character’, there are certain other specific exclusions from registrability: components of a complex product which are not visible in normal use of the complex product, features of appearance ‘solely dictated by the product’s technical function’, and ‘must fit’ or ‘must match’ features of designs are the most important. All are vague concepts. Some have been clarified a little by litigation already (e.g. shapes have been held to be ‘dictated by function’ where functional considerations motivated their design – it did not matter that other shapes could do the same thing, DOCERAM, 2018. Others will need to be thrashed around in the courts in order that any real sense can be wrung from them. Registration gives a true monopoly, so, unlike copyright or unregistered design right, there is no requirement to prove copying. A defendant infringes if they make or deal in a product having a ‘design which does not produce on the informed user a different overall impression’ from that of the registered design, degrees of freedom of design again being taken into account. But, as always, it helps if the defendant copied. The value of registration can be very great for a successful design, for instance a classic furniture design. You get up to a 25-year monopoly, provided you remember to pay renewal fees every five years. Don’t ask us why registered designs get 25 years whereas patents only get 20 – it is one of life’s little mysteries! Registering a design involves much less time, effort (and cost) than a patent. Normally some good line drawings or photographs (from all angles) of a threedimensional prototype are all that is needed. Two-dimensional designs (e.g. a wallpaper) only need a single image, or a sample in some cases. The biggest defect of the system once was that it took about six months for the registration to come through, so that for things which were only short-term crazes, the craze would be over before protection was obtained. Things are a lot faster now, especially with the advent of electronic filing. The UKIPO now works on the basis that most designs will be registered within two months of application. Official fees for a UK design application start from £50 for a single design, with reduced fees for any additional designs filed at the same time by the same applicant. An attorney, if one is used, will have professional fees (starting from around £250), and there may be an additional cost for the preparation of suitable drawings. It is possible to make the application without an attorney, but, unless the applicant makes regular applications and knows what to do, it often is best to use one: there are some bureaucratic technicalities and some legal complexities, such as how best to illustrate the design in order to maximise protection, that may trap the unwary.

Registration Abroad The design registration system can be used to claim priority in other countries (applications abroad have to be made within six months, rather than a year as

UK Registered Designs  71 in the case of patents). At present, most other countries have design registration schemes, though the variation from country to country is more marked than in the case of patents. (Indeed, the equivalent of a registered design in the USA is a special variety of patent, called a ‘design patent’.) Where foreign design protection is required, there is the option to file a series of national applications, but there are two systems in place which make the filing of foreign designs more straightforward. Firstly, you can file a single application for an EU registered design, which covers all EU countries in one go. The EUIPO application procedures are similar to those of the UKIPO, and if electronic filing is used, the registration certificate may be issued the very same day. There is also an ‘international’ route, similar to the PCT system available for patents, which is also administered by WIPO and which is sometimes referred to as a ‘Hague’ or ‘International’ application. An international filing ultimately results in a bundle of national design registrations, but as the filing formalities are handled centrally, this not only reduces administration, but can also result in significant cost savings compared with filing separate applications. Prior to Brexit, an EU registered design also provided protection in the UK. Since the subject matter and scope of the EU-wide right was the same as for a UK registration, applicants frequently used the EU route as an alternative to a UK national registration. (Although the EU registration fee was higher, at €350, it provided protection in 28 countries.) Post-Brexit, EU registered designs ceased to have effect in the UK. To compensate, all EU registrations in force on 1 January 2021 were cloned onto the UK Designs Register as equivalent UK registrations, i.e. having the same filing, registration and priority dates as the original EU registration. Also, applicants for pending EU registrations were given a period to file a UK application that would retain the filing and any priority date of the original EU filing.

Scope of Protection Compared to the other main IP rights, there is relatively little design litigation. The scope of protection of a registered design is comparatively narrow. This is because the test for infringement asks whether the alleged infringement produces the same or a different overall impression on the ‘informed user’. The CJEU has held that this notional person ‘knows the various designs which exist in the sector concerned, possesses a certain degree of knowledge with regard to the features which those designs normally include, and, as a result of his interest in the products concerned, shows a relatively high degree of attention’. When a comparison is made, this should be ‘a direct comparison between the designs at issue’, Pepsico v Grupo Promer, 2011. In sum, this means that a merely general overall resemblance between the design and the accused design will not usually be enough. UK cases confirm this, including P&G v Reckitt, 2007 (air freshener cannisters) and Apple v Samsung, 2012 (tablet computers: note that the Apple registered design

72  Industrial Designs sued upon was for a prototype which was not the same as the commercial version of its iPad).

UK Unregistered Design Right The UK Unregistered Design Right (UK UDR) is essentially a right born of frustration. It was introduced in 1988 to replace the over-powerful protection given by copyright to functional designs (then life of author plus 50 years). UK UDR only protects against copying and has a more limited term than a registered design. A designer is automatically given a UK UDR in the ‘shape or configuration’ (internal or external) of the whole on any part of an article. The design must be original (usually understood to mean in the traditional copyright sense of being the designer’s own work, not copied), and must additionally be ‘not commonplace in the design field in question’ – a fuzzy notion, which the courts have had some difficulty in dealing with. In Farmers Build v Carrier, 1999, the court said it should be construed narrowly and that a comparative exercise to find out how similar the design is to those of other similar articles is involved. And in Lambretta v Teddy Smith, 2004, the court said that ‘design field in question’ covers the sort of designs with which a notional designer of the article concerned would be familiar. Both of these explanations help a bit, but are hardly precise – blame the legislator, not the courts. To enjoy UK UDR protection, the designs must also have been recorded in a ‘design document’, which could be a drawing or a physical article. There are special modifications (both as to the extent of the right and the nationality of origin) in relation to design rights in the topography of semiconductor products, following our implementation of an EU directive on the subject. There are exceptions to UK UDR: none can exist in a method or principle of construction, or in a design of an element of interface which must fit some other article (e.g. a spare part) or must match some other article so as to form an integral whole (e.g. a car body panel), or in a surface decoration. So, while many designs which are eligible for registration will also be protected by UK UDR, there is not a complete overlap. Surface decoration or wholly graphic designs, for example, are excluded from UK UDR. UK UDR is extremely powerful and pervasive. Almost any piece of design work will give rise to one. It protects a design for 10 years after it was first sold, or 15 years after the date of creation – whichever expires first. However, protection is cut down after the first five years of marketing: then rivals are permitted to copy the design by obtaining a compulsory licence. So, there may be quite a few cases where, when the copying starts a few years after first marketing, it will be doubtful whether a case could be brought to trial before the end of the five-year period during which an injunction can be had. In such cases, the crucial question will often be: can the designer obtain an interim injunction meanwhile? In practice, UK UDR is valuable to protect against slavish imitations early in the life of a product. So it helps in fast-changing fashion trades, such as toys and

EU UDR, CUDR and SUDR  73 garments. It also gives initial protection to a designer who is relying upon the 12-month grace period before registering the design, or in the period between the filing of an application for registration and grant. UK UDR cannot be used as a basis for claiming priority for foreign applications. Indeed, unless a foreign country recognises an equivalent right, their nationals are not entitled to UDRs here. The list of such countries is very short: citizens of Hong Kong (SAR) and New Zealand may therefore rejoice, while everyone else cries in a corner. It will obviously be important to keep drawings and prototypes for future enforcement. A well-advised design-based company would have a standard procedure for this, and for ensuring that the employment records of the design employees (and assignments from outside designers) are retained.

EU UDR, CUDR and SUDR EU unregistered design right (EU UDR) is based loosely on the idea of UK UDR – protecting only against copying and for a more limited term. Protection is even shorter, however – only three years from when it was first ‘made available’ (in the design sense) in the EU. There are other differences (e.g. the threshold for protection for EU UDR is the same as for EU registered designs), but they will overlap in many cases. More importantly, EU UDR is wider than its UK counterpart, since UK UDR does not extend to aspects of surface decoration (e.g. the choice of colours of the panels of an old design of garment; see Lambretta, 2004), whereas an EU UDR would do so. As a result of Brexit, EU UDR ceased to have effect in the UK at the end of the transition period. Instead, two new unregistered design rights were created. There is a transitional ‘continuing unregistered design right’, or ‘CUDR’. This replaces EU UDR for designs which had been protected by EU UDR at the end of the transition period. It lasts for the remainder of the original three-year term. Then there is a ‘supplementary unregistered design right’, or ‘SUDR’. This is for eligible designs made available in the UK (or another qualifying country) on or after 1 January 2021. They are protected automatically for three years from the date of disclosure. As we write, there is uncertainty as to whether the same design can be protected by both an EU UDR and the new SUDR. This is because EU design law is still unclear as to whether EU UDR is contingent upon the first making available of the design taking place within the EU, or whether it is sufficient that the first disclosure was such that it could be known about by those from the EU – say, at an international trade show in the USA or China, or now the UK. Most believe that the EU UDR requires first disclosure to be somewhere within the EU. If this view ultimately prevails, then a designer may have to elect whether a new design is first made available in the UK – to attract SUDR – or within the EU – to attract EU UDR. Equally, it is uncertain whether attempts at simultaneous publication, such as on a website, would succeed in securing

74  Industrial Designs protection by both or would instead result in protection by neither! Of course, this dilemma can be solved by secured registered design protection in both the UK and the EU, where funds permit.

Copyright and Designs Up until relatively recently, the scope for protection by copyright of industrial designs for most artefacts was limited. The CDPA provides that it is not an infringement of copyright (but it may be an infringement of UK UDR) to make a 3D article, directly or indirectly, from copyright-protected design drawings or models unless the design or model is for an ‘artistic work’ (e.g. a sculpture). But, as we discuss further in Chapter 18, a batch of pre-Brexit CJEU cases concerning eligibility for copyright protection (Levola, 2018; Cofemel, 2019; and Brompton Bicycle, 2020) suggest that the UK’s approach, which limits copyright to only certain ‘artistic’ works (sculptures and works of artistic craftsmanship) rather than protecting all 3D product forms, might have been incompatible with EU copyright law. It remains to be seen whether the UK senior courts will agree, and even then, whether they determine it appropriate to follow the CJEU case law in this respect.

Use of Other Rights to Protect Designs Some designs can be protected in other ways: for instance, a design may in some cases also be a trade mark, e.g. the back of a playing card, US Playing Card’s Appn, 1907 or the scheme of coloration of medicinal capsules, Smith Kline & French, 1976. However, the courts are careful to prevent these other forms of protection (which may be perpetual) from straying too far into the field of designs proper, so, for example, the shape of a Philips electric razor was not registrable as a trade mark (see Chapter 9). Similarly, claimants sometimes try to use a passing off action to protect a design, but generally fail. An example of this is British American Glass v Winton, 1962, where the claimant failed to protect the design of his glass animals by passing off because he could not show that the customers cared which make of glass animal they were buying and so were not cheated if they bought one of the defendant’s. On the other hand, in the Jif Lemon case, Reckitt v Borden, 1991, the claimant stopped a rival plastic lemon containing lemon juice precisely because it did (to the surprise of some, including the claimant’s counsel – one Robin Jacob) manage to prove that a substantial number of customers cared about the maker, and would be deceived by the defendant’s lemon.

part iii Trade Marks, Passing Off and Unfair Competition

76

8 Trade Marks and Passing Off Introduction Most European countries have some sort of general rule of law forbidding unfair competition. The UK does not: but most of the activities that such a rule would discourage run contrary to specific rules of English law. In particular, English law has rules – some judge-made, but a large part from statute – which prevent the filching of a competitor’s trade by misleading conduct. As we shall see, these have expanded quite significantly over time so as to prevent various kinds of competition which are stigmatised as unfair, even in many cases where it does not mislead the public. The judge-made rules have existed for many years and have been adapted to meet modern conditions. Their original object was largely to protect the ‘goodwill’ of a business. It is difficult to define goodwill, but it has famously been said to be the ‘attractive force which brings in custom’, IRC v Muller, 1901. It can be thought of as the reputation that a business enjoys as a result of having actually traded using a particular name and therefore having become known by the public. In order to protect this goodwill, the law forbids any trader from conducting trade so as to mislead customers into mistaking their goods or business for someone else’s. This sort of deception is known as ‘passing off ’. It makes no difference whether it is other traders or the general public who are deceived; nor whether the deception is fraudulent (i.e. intended) or innocent; nor how it is brought about. Passing off does not extend to non-deceptive encroachments upon a business: it is not passing off to say honestly and truly ‘my cola is as good as Coca-Cola, but half the price’. Nevertheless, where there is deception, passing off can be a powerful and effective remedy. Judges don’t like people who deceive!

Passing Off and Registration of Trade Marks A problem with passing off, however, is that it relies on a claimant showing that they have actually traded in the UK using a mark and as a result have built up sufficient goodwill. It also relies on showing that the conduct complained of is deceptive (we discuss later how much trade and what kind of deception must arise

78  Trade Marks and Passing Off for the law to intervene). This can make it a cumbersome tool and of more limited utility for several reasons. First, if a business has just started up or has not started trading at all, it may not have established any or enough goodwill to stop a rival from adopting the same or a similar mark. In an action for passing off, the claimant must prove that they have sufficiently extensive goodwill for their goods or services to be recognised by members of the public; otherwise, it will hardly be possible for people to be deceived when they come across similar goods or services put out by the defendants. It follows that the passing off will protect established businesses from imitation of their names or trade marks but does not provide a shield behind which a new goodwill can be built up. Second, proving cases of passing off, except in obvious situations where a defendant is using the same mark plainly to steal a claimant’s business, is not always easy. Cases depend heavily on the evidence and can turn on finding sufficient numbers of actual customers who were confused (see, e.g. Chelsea Man v Chelsea Girl, 1987, where customers of the claimant came to court, and Neutrogena, 1994, where a number of deceived customers were located via various sorts of opinion polls). Third, because it is not necessary to show that a defendant intended to pass off, a trader can be taken by surprise by someone else asserting prior rights to a mark. So, for nearly 150 years, there has been a parallel system of trade mark registration. If and when granted, these marks are recorded in a public register, which can be searched by others, for instance to check that their own proposed mark would not conflict with an earlier registration. Registration gives rights which, by and large, are more powerful than the rights given by passing off, and the costs of obtaining registration are normally modest. Registration generally makes it much easier for a claimant to prevent the sort of deception which involves imitation of trade marks or brand names. However, this is not always so. First, registration of a mark is not always possible because, as might be expected, there are some policy and practical limits placed on the types of thing that may be registered (Chapter 9). Second, and partly as a result of the fact that it is now easier to register a trade mark, enforcement in some cases has become more difficult and uncertain. Nevertheless, it remains the case that traders are well advised to register all their trade marks, since it will generally make legal disputes over trade marks and brand names simpler and cheaper to resolve. Even more important than that, it will generally warn rivals off altogether: why look for trouble when you are considering what mark to use? Things are different once a business is committed – it may feel it has to stand and fight. Critically, therefore, it is normally possible to register a mark before there has been any use of it at all (the exception is in the case of very descriptive marks and certain other, non-standard, marks, such as colours, which we discuss later). Since registration gives an almost absolute right to stop others from using that mark or one like it, goodwill can be built up behind the shield of protection given by the

Passing Off and Registration of Trade Marks  79 registration. That is why prudent businesses register (or at least seek registration) before starting use. Even if unused, it is in practice virtually impossible to remove a mark from the register for at least five years after it was put on. The natural consequence of this is that the Trade Marks Register has become clogged with huge numbers of marks, often making it difficult for rival traders to find marks suitable for use.

What Does Passing Off Do That Registration of Marks Can’t? Why, if registering a trade mark carries so many benefits, does anyone sue for passing off? There are several reasons. First, many businesses do not register as comprehensively as they could, so that resort to a passing off action may be necessary to cover flaws in their registered trade mark position. Second, passing off can occur in cases that have nothing at all to do with trade marks: for example, the marketing of goods whose get-up is the same (in everything but the wording on the package) as that of an oldestablished line; cases of reverse passing off (see later); celebrity endorsement; and so on. Thirdly, the fact that enforcement of registered trade marks has become more difficult and uncertain means that a claim of passing off may be included in proceedings as a back-up in the event that the case on the trade mark infringement fails. And there is one particularly overriding reason for suing in passing off where this is possible – judges are very apt to stop anyone who is actually doing something deceptive. The converse is also likely to be true – mere technical infringements of a registered mark do not invoke judicial sympathy in the same way, and so judges are apt only to stop clear cases.

Kinds of Registered Trade Marks Readers who have persevered this far will not be surprised to learn that this area of law, like patents, has increased in complexity as a result of EU action and then Brexit. Until recently, there were two types of registered mark in the UK: a UK national registered mark, obtained from the UK Trade Mark Registry under the provisions of the Trade Marks Act 1994; and an EU registered trade mark (EUTM), obtained from the EUIPO (European Union Intellectual Property Office) under the provisions of the EU Trade Mark Regulation. While EUTMs no longer cover the UK, they can still be enforced in the remaining EU countries. For most purposes, the substantive law relating to UK marks and EUTMs is the same. This is because the Trade Marks Act 1994 is itself based on European legislation, namely the European Trade Mark Directive, which the EU Trade Mark Regulation also tracks very closely. For this reason, UK trade mark law includes the pre-Brexit

80  Trade Marks and Passing Off decisions of the CJEU on the Directive and the Regulation. Many of the cases we refer to later are decisions of that court. A claimant who sues on a UK trade mark must satisfy at least one of three different tests, depending on the relevant facts. Which test applies is crucial, since it will affect how easy it is to win. If the mark used by the defendant is identical to the claimant’s registered mark and is being used by the defendant for identical goods or services to those covered by the claimant’s registration, then the case is straightforward. The claimant only has to prove that the marks are identical and that the goods or services are identical – assuming that the trade mark is valid, and that no relevant exception applies (see Chapter 8). Where there is the ‘double identity’, the claimant will be in a commanding position: there is no need to prove anything more, such as a sufficiently extensive goodwill, or that the public has been or is likely to be deceived, as there would be in a passing off case. If the defendant only uses a similar mark, or uses an identical mark but only for similar goods or services (or both), the test the claimant must meet is more onerous. It must show that, because of the similarity of the marks or the goods or services, there is a likelihood of confusion. This is rather like the requirement to prove deception in a passing off case and so can make the case much more complicated. However, there is still no need for the claimant to prove goodwill – the mark is taken to be in use, and to have a goodwill, Reed v Reed, 2004. Finally, if the defendant is using a sign which is identical or similar to the claimant’s registered mark (irrespective of whether the goods/services are identical, similar or dissimilar to those for which the mark is registered), the claimant can also succeed in a case for infringement if they can prove two things: first, that the trade mark has a reputation (again, this is very similar to the requirement in passing off); and secondly, that the defendant’s use of the mark, ‘being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark’. Despite attempts at clarification by the CJEU, exactly what is required for this aspect of infringement is still uncertain (see Chapter 10).

Trade Mark Conflicts In a double identity situation, the case is usually clear. A complaint by the trade mark holder will usually result in the potential defendant backing off. It is relatively easy for anyone contemplating using a new mark to check the Trade Marks Register (now with a fairly high degree of accuracy online, at www.gov.uk/searchfor-trademark) to find out whether it is available for use or not. Having a patent or trade mark attorney or solicitor do a trade mark search or, at the very least, doing one yourself online is obviously the best way to avoid disputes. Litigation is much more likely to arise where there is no registered trade mark (and the potential claimant therefore relies on passing off), or where there is a registered trade mark but the potential defendant is using a mark which is only

Passing Off and Registration of Trade Marks  81 arguably similar or is using an identical mark but only for similar or dissimilar goods or services. In these situations, the difficulties in proving the case are likely to mean that the outcome will not be certain for either side. And, unless there is a plain case of passing off, the uncertainties of the law caused by a failure of the legislation to address most, if not all, of the basic problems of trade marks, coupled with appalling drafting, further encourage litigation. The CJEU, to which we used to have to go to clarify matters, did not always succeed in doing so, and indeed not infrequently it only made matters worse.

9 Trade Mark Registration Introduction Here we explain what sort of thing can be registered as a trade mark, discuss the conditions required, and give an outline of the procedure for both registration and opposition. Registration is not the be-all and end-all of a mark’s existence. A mark which has been registered can be revoked or invalidated later (see Chapter 12). There are two broad categories of objections to registration. They are called ‘absolute’ and ‘relative’. The absolute grounds are those inherent to the nature of the mark applied for, whereas relative grounds are those concerned with earlier rights of others.

Absolute Grounds The absolute grounds for refusal determine the types of sign that can, or cannot, be registered as trade marks. The types of things which can be registered under the Trade Marks Act now go well beyond obvious marks made up of words, logos and pictures. It is possible, in principle, to register the three-dimensional shape of goods and packaging, e.g. the shape of the Coca-Cola bottle for non-alcoholic beverages; colours, e.g. a particular shade of purple for chocolate, Cadbury’s, 2012; combinations of colours, Heidelberger Bauchemie, 2004; and sounds, e.g. the roar of the MGM lion. The main limit is that the sign must be capable of being represented clearly and precisely on the Trade Marks Register. This is straightforward for traditional trade marks, like words and logos, which can be represented graphically using words or images, but more exotic signs may fail the test. Thus, you can’t currently register smells because it is not possible to file something sufficiently precise. A sample of the smell is neither easily accessible nor durable. And the CJEU decided that a written description of a smell, such as a ‘balsamically fruity scent with a slight hint of cinnamon’, is not sufficiently precise or objective, Sieckmann, 2002. The need for there to be a ‘sign’ also excludes abstract concepts or generalisations. An application to register a transparent bin for a vacuum cleaner was refused because it covered an entire class of signs, rather than a single and specific shape-and-colour combination, Dyson, 2007. Selecting a sign of the type which is capable of registration is only the first step. The mark must also be distinctive, not descriptive and not otherwise excluded for

Absolute Grounds  83 policy or practical reasons. Distinctiveness is likely to be much more difficult to establish in the case of non-traditional mark types, such as shapes, colours and sounds. This is because they are far less likely to be regarded by members of the public as indicating the source of the product than conventional marks such as words and logos.

The Mark Must be Distinctive Distinctiveness is a crucial concept in the law of trade marks and passing off. A distinctive mark is one which is suitable for differentiating the goods of one trader from those of another. This contrasts with a descriptive mark (one that describes the goods or their characteristics) or one otherwise unsuitable for distinguishing the origin of goods because it would not be regarded as denoting origin at all. Trade marks are not registered in the abstract; they are registered for specific goods and/or services. Accordingly, a mark that might be perfectly acceptable for certain goods (Apple for mobile phones) may be wholly unsuitable for others (Apple for fruit-based products). Distinctiveness and descriptiveness are not black-and-white concepts. In general, marks are spread along a spectrum, with completely descriptive marks at one end and completely distinctive marks at the other. An entirely meaningless made-up word (Kodak, for example) is ideal, from a trade mark lawyer’s point of view, for distinguishing goods. However, from a marketing point of view, at least for a newly marketed product, the opposite may be true. There is a strong tendency to prefer at least somewhat descriptive marks since they are more likely to tell the public something about the product or service concerned. The tension between the marketing and legal departments is clear. To be registerable, a mark must reach a certain threshold of distinctiveness when used in relation to the goods/services for which it is to be registered. This can be achieved by the inherent nature of the mark itself when it has an innate capacity to distinguish, for example, an invented or arbitrary word. Quite where the threshold lies is a matter of degree. Often businesses try to register a descriptive mark by adding a small decorative or figurative element to what is otherwise perfectly bland. This tactic only succeeds where the addition is prominent and distinctive enough in its own right. (Short shrift is given to a mere ‘fig leaf ’ addition, see Starbucks v BskyB, 2012). In addition to considering the inherent distinctiveness of the mark, a further important consideration is whether the mark has acquired a distinctive character as a result of the use made of it. Whilst some marks (such as Soap for toiletries) could never in practice acquire distinctiveness through use, many other, less directly descriptive, marks may, on being used extensively for a particular product or service, become sufficiently well known that they achieve what is known as ‘acquired distinctiveness’ (such as Doublemint for chewing gum). There is no hard and fast rule for assessing whether a mark is sufficiently distinctive and not too descriptive to be registrable. If the mark is already

84  Trade Mark Registration customarily used in the trade for the goods of the application, then it will almost certainly not be registrable. Names like ‘The Crown’ or ‘The Red Lion’ for the services provided by a public house might fall in this category. Further, if other traders might legitimately wish to use the mark to describe any characteristic of their product or service, it is likely not to be registrable. Certain categories of mark are generally more difficult to register, in particular, geographical marks (e.g. Chiemsee, the name of a lake in Bavaria, for clothing, Chiemsee, 1999) and laudatory marks (e.g. Treat for dessert sauces and syrups, found invalid in British Sugar v James Robertson, 1996).

The Mark Must Not be Contrary to Public Policy or Morality This requirement covers a multitude of sins. In particular, a mark is likely to be refused if it would cause offence or offensive behaviour. Three examples give a flavour of the type of marks which are likely to be refused on this ground. Tiny Penis for clothing, footwear and headgear was refused on the basis that the mark would cause offence to ‘right-thinking’ members of the public if used on, say, advertising billboards or on the side of a bus, Ghazilian’s Appn, 2002. The irony here is that refusal to register the mark would not prevent this from happening – all that registration prevents is the use by others of the mark. Nevertheless, the judge pompously pronounced that ‘correct anatomical terms for parts of genitalia should be reserved for serious use and should not be debased by use as a smutty trade mark for clothing’. Whether this is a generally accepted moral principle, or indeed a relevant concern, is subject to debate. And, of course, why anyone would want the mark is a complete mystery anyway. In more recent years, this rather prudish view has taken a back seat. For instance, an attack on the validity of the trade mark FCUK was rejected in French Connection v Woodman, 2006. The court considered that there was nothing inherently objectionable in the mark; the fact that it could easily be rendered offensive by switching round a couple of the letters was irrelevant. (King Cnut – he of commanding the tide fame – would no doubt be relieved.) More recently, the CJEU allowed the mark Fack Ju Göhte, the name of a successful comedy film, on the basis that reasonable people with average thresholds of sensitivity and tolerance would not have considered its use in that context to be problematic, Constantin Film, 2020. Trade marks which might promote violence or hate will not be permitted. So, www.standupifyouhatemanu.com was refused on the ground that it was likely to function as a badge of antagonism and to increase the incidence of football violence or other offensive behaviour, CDW Graphic Design’s Appn, 2003. The reader may find this a bit farfetched – most people (especially supporters of other teams) would more likely see it as a joke. But, as is often the case, trade mark law seems to have no sense of humour. One other thing for the reader to ponder is whether a slogan of this sort is a trade mark at all?

Absolute Grounds  85

The Mark Must Not be Deceptive A mark cannot be registered if it will deceive the public, for instance, as to the nature, quality or geographical origin of the goods or services. The classic example is Orlwoola, 1909, registered for clothing: if the goods were made wholly of wool, the mark was descriptive, and if they were not made wholly of wool, it would deceive.

The Mark Must Not be a Specially Protected Emblem Certain emblems enjoy special protection. Thus, trade marks consisting of or containing various emblems such as the Royal arms, representations of the Royal crown and the Royal family, flags, national emblems of countries, emblems of international organisations, coats of arms and Olympic symbols are subject to special rules relating to registration.

The Mark Must Not be Applied for in Bad Faith A trade mark application must not be made in bad faith. There is considerable uncertainty as to what type of behaviour may be covered and as to how reprehensible the behaviour must be for the application to be refused, although the CJEU has said, albeit not very helpfully, that a claim of bad faith requires an evaluation of all of the surrounding circumstances. The Court has also indicated that the test requires consideration of two things: what the applicant for the mark knew; and (separately) whether a reasonable and honest person would regard the applicant’s conduct, in light of this knowledge, as being in bad faith, Lindt & Sprungli, 2009. Therefore, mere knowledge of a third party’s claimed rights is not enough. The bar seems to be set quite high, requiring ‘a dishonest intention or other sinister motive … which departs from accepted standards of ethical behaviour or honest commercial and business practices’, Hasbro v EUIPO, 2021. But ‘sinister motive’ is not limited to fraud or dishonesty. It is enough if an applicant with no intention to use the mark in relation to the goods and services covered by the application had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, Sky v SkyKick, 2020. It would therefore appear that using the Trade Mark registration system for an ulterior purpose is ‘bad faith’. On the return of this case to our Court of Appeal, Sky v SkyKick, 2021, it is entirely possible that this test was misapplied. The court held, for example, that where an applicant applies for a mark for a term of vast scope (‘computer programs’),

86  Trade Mark Registration it does not act in bad faith if it intends to use the mark in relation to at least one thing falling within this scope. So, for instance, an intention to use for computer games would be enough even though the registration will also cover computer controls for nuclear power stations and all sorts of other, quite different things in which the applicant has no remote commercial interest. As we write, the UK Supreme Court has granted permission to appeal. It is an important case, not least because specifications of vast scope have become a menace – clogging up the Register and leading to disputes which make little commercial sense. The fact that marks can be cancelled, or their specifications cut down after five years if there is no use (see Chapter 12), is not enough to deal with the problem as a practical matter. One area where the bad faith test clearly applies is ‘trade mark misappropriation’, i.e. where someone else is entitled to the mark. This occurs when the applicant knows, or ought to know, that the trade mark belongs to someone else but nevertheless applies for the mark in their own name. Thus, in Harrison v Teton Valley, 2004, the mark applied for was China White for cocktails. The owners of a well-known nightclub called Chinawhite successfully challenged the registration. The club sold a house cocktail called Chinawhite which had been developed by employees of the nightclub, including the bar manager. The bar manager had told the applicant this, but the applicant nevertheless applied to register Chinawhite in his own name. This fell short of the standards of acceptable commercial behaviour observed by reasonable businesses and so was in bad faith.

Special Requirements for Shape and Other Non-conventional Trade Marks Signs consisting of the shapes of goods are eligible for registration. But registration of such marks is subject to certain special restrictions to ensure that a trade mark proprietor cannot thereby monopolise features of shape which other traders have a legitimate interest in using or which otherwise would afford an unfair advantage. Thus, a sign cannot be registered if it consists exclusively of a shape which results from the nature of the goods themselves (natural shapes), a shape which is necessary to obtain a technical result (technical shapes) or the shape which gives substantial value to the goods (value-adding shapes). This set of ‘shape’ exclusions has also recently been extended to cover marks which comprise other ‘characteristics’ of the goods, so potentially colour and sound marks, etc. These requirements are in addition to those which apply to all types of trade marks, including the requirements that the mark is distinctive. Many marks that fall foul of these special exclusions are often also insufficiently distinctive to be registered, e.g. London Taxi, 2017. The CJEU has considered the exceptions, as they apply to shapes, in a number of cases. It remains to be seen how the principles set out for shapes will be applied to other characteristics of goods. The case of Philips’ three-headed rotary shaver established the rule for ‘technical’ shapes, Philips v Remington, 2003. Philips’ mark actually consisted of a

Relative Grounds: Earlier Marks and Rights  87 2D drawing of the product depicting the three circular heads with rotating blades arranged in an equilateral triangle. In practice, everyone treated this as a registration of the shape itself. Philips sued Remington for trade mark infringement by the sale of its three-headed rotary shaver, which used the same equilateral triangle arrangement. Remington argued that Philips’ trade mark was invalid on various grounds, including that it was a technical shape caught by the exclusion. Remington argued that the essential features of the shape shown in the trade mark were designed to achieve a technical result and therefore should not be registrable. The Court of Appeal agreed, rejecting Philips’ argument that because there were other ways of achieving the same technical performance (for example, using four heads not three, or arranging the heads in a different configuration), the mark was valid. This point was also referred to the Court of Justice, who came to the same conclusion, meaning Philips lost. An attempt to register the form of a basic Lego brick foundered in a similar way, Lego Juris, 2010. The scope of the natural and value-adding exclusions remains a bit obscure, despite ‘guidance’ from the CJEU in a case concerning the distinctive design of the Tripp Trapp high chair for children, Hauck v Stokke, 2014. The Court held that the ‘natural shape’ exclusion was not limited to cases where protection was sought for a very basic product shape or the only possible shape of the goods (a banana shape for bananas, for example), but also extended to apply whenever the essential features of that shape are ‘inherent to the product’s generic function(s)’. The Court went on to say that the exclusion is intended to cover features of shape ‘which consumers will be looking for in the products of competitors, given that they are intended to perform an identical or similar function’. In terms of the high chair in issue, each of its features were attributable to the stability and adjustability of the chair. The Court also considered whether the chair shape was also a value-adding one. Previously, this exclusion was assumed to be limited to excluding works of art or other decorative products purchased solely for their aesthetic appeal. But the CJEU held that this was too narrow: the question is whether the appearance of the goods ‘strongly influences’ consumers’ preference for those goods, such that the product’s design is ‘one of the fundamental elements’ which determines its ‘market success’. For example, consumers might be drawn to the design of a chair because it evokes ‘comfort’, ‘solidity’ and ‘ergonomics’. More recently, the CJEU held that a shape may add substantial value to the goods when it is the embodiment of a mathematical theory, Gömböc, 2020. A Gömböc is a unique self-righting shape. You learn something every day!

Relative Grounds: Earlier Marks and Rights Even if a mark complies with the absolute requirements of registrability set out above, it may still be unregistrable because it clashes with an earlier registered trade mark covering the UK or another protected right (including e.g. an

88  Trade Mark Registration unregistered mark, a protected design or copyright work). Such clashes are called ‘relative’ grounds of objection. The UK Intellectual Property Office (UKIPO) only acts to refuse an application if a third party actually takes action successfully to make the objection out. The examination process includes a search for potential conflicting earlier registered marks. If it finds any, all the Office does is to tell the owners of the earlier marks about the application, leaving it to them to oppose it if they wish. Often, of course, the parties negotiate a settlement – the applicant may, for instance, persuade the owner of the earlier mark to cut down its specification (or both parties may each do so) so that there is no conflict.

Earlier Trade Marks For a UK trade mark application or registration, the earlier trade marks which need to be considered are other UK registered marks, any International trade marks which designate the UK and any earlier well-known marks (International marks and well-known marks are discussed in Chapter 13). It is no longer necessary to consider earlier-dated EUTMs, save for those which have been cloned into an equivalent UK trade mark based upon a pre-Brexit EUTM. Similar cloning arrangements were made for any International trade mark registrations and applications that designated the EU on 31 December 2020. Whether or not there is sufficient similarity between one of these earlier trade marks and the mark applied for, such that the mark applied for should not be registered, is assessed by a series of three tests, mirroring those which apply in cases of infringement. The most straightforward case of conflict is where there is double identity, i.e. the mark applied for is identical to an earlier trade mark and the goods or services specified are also identical to those of the earlier mark. There is also potential conflict where the mark applied for is identical or similar to an earlier trade mark and the goods or services for which it is applied for are only similar to those covered by the earlier registration, or where the goods or services are identical but the marks are only similar. In these circumstances, there is only conflict if there is sufficient similarity between marks and between goods or services to evoke a likelihood of confusion when assessed overall. Finally, there can be conflict if the earlier mark enjoys a reputation and the mark applied for is identical or similar, provided that use of the mark applied for would, without due cause, take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark. These tests are discussed in detail in the context of infringement (see Chapter 10). Since the same principles apply, we do not anticipate that discussion here. Obviously, where the grounds for refusal of registration exist in relation to only some of the goods or services for which the mark is applied for, the mark should be refused only in relation to those goods or services, permitting registration in respect of the other goods or services applied for.

Applications and Oppositions  89

Other Earlier Rights A trade mark application will be refused if use of the mark applied for is liable to be prevented by the law of passing off. UK trade mark applications may also be challenged based upon other earlier rights, e.g. copyright or design right. For example, an application for a mark consisting of a logo or device which infringes someone else’s copyright would be refused. To rely on an earlier unregistered mark, the challenger must be able to show that it could prevent use of the trade mark applied for by a notional passing off action (Chapter 15). In a real passing off case, the court considers all the circumstances surrounding the defendant’s use. In the case of a trade mark application, the UKIPO considers, in the abstract, what would be normal and fair use of that mark. After all, the applicant may not be using the mark at all, or the use might not extend across the entire scope of the application. As with earlier trade mark rights, if this ground can only be made out in respect of some of the goods or services, the mark should only be refused in respect of those goods or services. In theory, it might even be possible for the mark to be limited in geographical extent if the notional passing off applied only in some parts of the UK. This approach could create practical problems – but it hasn’t happened yet.

Applications and Oppositions An application to register a UK mark must be made to the Registrar of Trade Marks at the UKIPO. (The Registrar also has the grander title of Comptroller-General of Patents, Designs and Trade Marks.) The UKIPO is in Newport, Wales, but most filings are made online. Applications are normally filed by trade mark attorneys or solicitors acting on the applicant’s behalf, but it is increasingly common for businesses to apply directly without using a professional advisor. If possible, it is wise to employ an experienced advisor to make the application, since this can prevent problems with the application and registration in the long run. However, the UKIPO has an excellent website (www.gov.uk/topic/intellectual-property/ trade-marks) which offers plenty of information for those wishing to go it alone. Using the services of an attorney, the costs of applying for a registration start from around £550, of which £200 is the official fee (£170 if filed electronically). The costs increase if the goods or services of interest cover more than one classification class (see further below). Additional professional fees will be incurred if there are problems leading to significant correspondence with the UKIPO, or if the application is opposed. A straightforward case takes around four months, but it can take a lot longer if there are objections to be overcome or if the application is opposed by a third party. Hence it is advisable to apply for registration as far as possible in advance of planned use.

90  Trade Mark Registration

Classification of Goods and Services There are 45 different classification classes, which group goods and services according to their general nature. So, for example, ‘industrial oils and greases’ are in Class 4, along with ‘fuels’ and ‘lubricants’; ‘games, toys and playthings’ are classified in Class 28; and ‘education’ and ‘training services’ appear in Class 41, along with ‘entertainment services’. An application may be made for goods and services in more than one class, each additional class needing an extra fee. An applicant must specify the particular goods or services of interest in each class covered. The specification of the goods and services listed is important. Ideally, the applicant should include all the goods/services where the mark is currently in use or where use is contemplated in the future, as well as spare parts and accessories, or ancillary services. However, as discussed above, broad claiming in the specification is not without its problems: it increases the likelihood that the application will be opposed, as well as the potential for partial revocation for non-use later (see Chapter 12). There is even the possibility of revocation for lack of good faith (see SkyKick, referred to above). A sensible working rule is that the specification should list what the applicant uses or intends to use the mark for, plus a reasonable penumbra.

The Applicant The application should be made by the person, firm or company actually using or intending to use the mark. Those acting as an agent or representative of an overseas proprietor should not apply for a mark without the authorisation of the proprietor. (Agents who apply in their own name and later try to make off with the mark will lose it by a declaration of invalidity of the registration, by an order for the proprietor’s name to be substituted for that of the agent or even by a court order compelling assignment of the registration to the principal.) A mark can be applied for jointly by two or more applicants but, unless there is an agreement in place that regulates use, the default position is that each is allowed to use the mark independently for their own benefit without requiring the permission of the other. This creates a danger that the mark becomes deceptive and liable to revocation (see Chapter 12).

Examination Every application is examined to see that it complies with the absolute grounds, i.e. the basic requirements as to registrability. If the Registry considers the application meets these then it will be accepted. If not, the applicant will receive an examination report which sets out the nature and extent of any objections, with a set period to respond to avoid refusal or partial refusal. Simple objections, such

Applications and Oppositions  91 as clarification of the specification of goods, are typically dealt with by a short exchange of correspondence or telephone call with the examiner, but for more weighty matters, an applicant also has the option of attending a hearing (virtual or in person) to discuss the objections with a senior examiner. The applicant may file evidence in order to try to overcome any objections, particularly if it is suggested that the mark is not distinctive. Here, the applicant will need to file evidence of the use made of the mark over a number of years to try to prove that it has acquired distinctiveness through use. A final decision of the Registrar that the mark is not registrable can be appealed to the High Court or to an Appointed Person (someone with experience in trade mark law, usually a Queen’s Counsel or an IP academic). In the UK, courts are apt to uphold the decision of an experienced trade mark official if the point involves a value judgement, such as whether the mark is distinctive. In such cases, the courts only interfere if an error of principle is made.

Acceptance and Publication Once the UKIPO is satisfied that any objection has been overcome, the application is accepted and the intention to register is published in the online Trade Marks Journal. Once the application has been published, anyone who wishes to oppose registration has two months to do so. An unopposed mark will only be registered after this period has expired.

Opposition Anyone may oppose an application on any of the grounds for which the Registrar may refuse to register a mark (e.g. the trade mark is descriptive of the goods for which it is to be registered). They may also oppose on the basis that the application conflicts with an earlier right that they hold. The usual reason for opposition is that the advertised mark is too similar to a mark that the opponents are using or have registered. But any other legal right (such as copyright in a device mark) will do. A would-be opponent may also apply to extend the opposition deadline to three months, and the UKIPO will then notify the applicant of the potential opposition. This process provides additional time so that the parties can see whether formal opposition can be avoided. This may result in the application being withdrawn, but it is not unusual for an amicable settlement to be reached which involves amendment to the goods and services covered to better distinguish the respective areas of interest. The procedure for opposition commences with the opponent filing a statement setting out the grounds of opposition to the mark and paying the opposition fee. (This is currently either £100 or £200, depending on the number of different

92  Trade Mark Registration grounds relied upon.) The applicant is then given a period to respond with a counterstatement. This period can be extended if both parties wish to seek a negotiated settlement and agree to enter a ‘cooling-off period’. Then, proceedings are suspended for up to 18 months, but this can be terminated at any time by either side if negotiations break down. If and when a counterstatement is filed, each side files evidence in support of their case. The case can be decided on the papers, but if either or both sides want an oral hearing there will be one, virtual or in person. The ‘judge’ is one of the Registrar’s hearing officers. An appeal from the decision of the hearing officer can be made to the High Court or the Appointed Person (as described above in relation to examination). Oppositions are sometimes bitterly fought, not only by opponents (who often have much to lose, since the new registration might reduce the value of their existing goodwill), but also by applicants. Nevertheless, fighting in the case of an unused new mark will often not be worth the legal costs, time and uncertainty involved. Most applicants in such situations would simply drop the application and start again with another mark – it’s rarely worth betting the farm at this stage.

Registration If an application is unopposed, or once any opposition has been resolved, the application proceeds to registration and the applicant receives a certificate of registration. Occasionally, even where there is no opposition, the UKIPO may raise a late objection if new matters have come to light which suggest that the application was accepted in error. If this happens, the applicant should be given an opportunity to respond before the final refusal. The initial period of registration is for 10 years from the application date, but the registration may be renewed (the official fee is currently £200 for one class, plus an extra £50 for each additional class to be renewed) every 10 years for as long as the mark remains of commercial interest. Only once the trade mark is registered can the trade mark owner sue someone for infringement. Despite completion of the registration process, the defendant can challenge the registration by way of defence and make a counterclaim for revocation or declaration of invalidity (see Chapter 12).

10 Trade Mark Infringement Introduction What amounts to infringement is closely linked to the sometimes-elusive question of the functions of a registered trade mark. So we discuss functions first. Then we discuss the three types of trade mark infringement. Even if one of these applies, an infringement action will still fail if either the registration is invalid (see Chapter 12) or there is a defence (see Chapter 11).

What Activities Can a Registered Trade Mark Stop? Registration of a trade mark gives its owner an exclusive right. The right is defined negatively by rules which set out the acts that others cannot do without the owner’s consent. The prime rationale behind the infringement rules is to ensure that registered trade marks act as a ‘guarantee of origin’. The ‘guarantee’ is to ensure that when the public see the registered trade mark used in relation to certain goods or services, they can be sure that the goods or services in question originate from the trade mark owner (or some entity under their control). The point is to make sure that the public is not deceived. If the public buys a can of soft drink bearing the name Coca-Cola, they are entitled to assume that it is the famous soft drink, and not an imitation made by somebody else. The infringement rules are intended to prevent this kind of imitation. But there are other rationales too. The rules go further than merely protecting the trade origin function. Arsenal v Reed, 2003, which was all about football merchandise, provides a useful illustration. In common with other top clubs, Arsenal made a great deal of money by selling ‘official’ merchandise bearing the club’s name and badge. These were registered as trade marks for things like T-shirts, scarves and hats. Mr Reed, an Arsenal fan, had been selling goods bearing the Arsenal marks from a stall near the Arsenal football ground for over 30 years. The vast majority of his merchandise was unofficial, but this was indicated by prominent signs on his stall. Arsenal sued Mr Reed for passing off and trade mark infringement. The passing off case failed in the High Court because the judge found that Arsenal had not proved that fans buying from Mr Reed would believe that his merchandise came from the club or was licensed by it. In 30 years of trading, the club could not show a single instance of confusion which had come to light.

94  Trade Mark Infringement The infringement case turned on the question of how far the protection given by a registered trade mark should extend. Arsenal argued that since Mr Reed was using their registered trade marks in relation to the goods covered by the registrations, it was a straightforward case of infringement. Mr Reed maintained that mere use of the offending sign was insufficient: to be an infringement, the use had to be ‘in a trade mark sense’ to indicate trade origin. The judge in the High Court agreed that Reed was not using the Arsenal marks to indicate trade origin (i.e. who had made them), but simply as a badge of ‘support and allegiance’. Reed’s customers bought his products because they bore the Arsenal name and crest, not because they thought it was an ‘official’ club product. The tricky legal point was whether use of a sign as a badge of allegiance should amount to trade mark infringement. The judge referred the point to the European Court of Justice (now the CJEU) for a definitive ruling. When issued, it provoked a storm of academic and judicial dispute. The CJEU agreed that the ‘essential function’ of a trade mark was to guarantee the identity of the origin of the marked goods or services, but found that the question of whether the sign was perceived as a badge of allegiance or not was immaterial. It concluded that Arsenal was entitled to prevent use of the trade mark by Reed, thereby appearing to find that there was deception as to trade origin. When the case came back to the High Court, the judge said that it was not the CJEU’s business to determine the outcome, because such questions of fact are for the referring court only. So he held that Mr Reed won. The Court of Appeal disagreed with the judge, saying that Reed’s use interfered with the origin function. It is not entirely easy to understand why. So it was a bit of a dodgy win for Arsenal. Legally speaking, what the CJEU did was to stretch the notion of what acts affect the essential function of the trade mark as a ‘guarantee of origin’. Infringement is not limited to preventing deception of the public as to the origin of the goods. It now extends to any use of the trade mark in the course of trade which, whilst it does not serve to indicate origin, may harm the trade mark’s use by its proprietor as a guarantee thereof. The result for traders in merchandise, like Mr Reed, is that they are prevented from selling anything other than ‘official’ products (if they can get them), and for consumers that they will only be able to buy ‘official’ shirts, scarves and the like. It was a win for big players against the little – as has largely been the case for all the ‘functions’ invented by the Court. A postscript to the case shows how copyright and trade marks can overlap. When the High Court judge found against Arsenal the first time, Arsenal decided to do something about its badge. The old one, a splendid Victorian thing with a Latin motto (Victoria Concordia Crescit), was out of copyright. So Arsenal got a new badge, a rather amateurish affair designed by one of its directors. Copyright in this would last for ages – 70 years after the author died. Pirate copies could be suppressed by the use of copyright rather than trade marks. (Legally the plan worked, though the fans did not like it, especially those with tattoos of the old badge!)

The Tests for Infringement  95

Expanding Trade Mark Functions Following Arsenal, the CJEU elaborated on the functions (plural) of a trade mark. In a series of cases, the Court has held that guarantee of origin is only one (albeit the ‘essential’) protected function of a trade mark. In these days of sophisticated commerce, the Court has said the trade mark also provides a consistent guarantee of the quality of the goods or services provided (the ‘guarantee function’). It provides a basis for publicity and advertising (the ‘advertising’ function), is a focus for the trade mark owner’s investment (the ‘investment’ function) and is a platform for communicating with the consumer (the ‘communication’ function). Some of these functions are rather vague and potentially overlapping. But unauthorised use that a court decides harms any one of them will now amount to infringement. We discussed Arsenal at length because it illustrates an important fact about modern trade mark law: it has broken free of its origins in preventing deception and now has utility in protecting investment in creating a brand aura and identity. Whether that is a good thing or not will be debated for many years. In post-Brexit UK, it may well be that the courts will become less enthusiastic about the ‘functions’ approach to trade mark infringement: traditionally, the common law has been more pro-competition than civil law jurisdictions in many respects. For now, we return to the current law.

The Tests for Infringement The UK Trade Marks Act 1994 provides for three types of trade mark infringement.

(i)  Identical Marks and Identical Goods/Services Double identity of marks and goods/services is the most straightforward case. The claimant has only to prove that the defendant’s mark is identical to the registered mark and is being used for goods or services identical to those for which registration has been obtained (assuming, that is, that the trade mark registration is valid and that no relevant defence applies, as discussed in Chapters 11 and 12). The vast majority of cases of this type will settle unless, of course, there is some other issue at stake. This said, it is not always easy to say whether or not the marks and goods or services are identical. The ‘identity’ test was set out in LTJ Diffusion v SADAS, 2002. The registered mark was Arthur in a fancy script, while the defendant’s used Arthur et Félicie in a device (picture) mark. On one view, the defendant’s mark was identical, since it reproduced Arthur in its entirety, but the Court held that a sign was only identical to a registered trade mark where there was reproduction, without any modification

96  Trade Mark Infringement or addition, of all the elements of the registered trade mark. Two marks would also be ‘identical’ where any differences are so insignificant that they would go unnoticed by an average consumer. Following this, the Court of Appeal held that Reed Business Information was not identical to Reed alone since ‘Business Information’ added something significant to ‘Reed’ in the former sign, Reed v Reed, 2004. Nevertheless, the Court also stated that there may be cases where the added matter is effectively ignored by the consumer when comparing the marks: accordingly, ‘Palmolive soap’ might be considered identical to ‘Palmolive’ because ‘soap’ adds nothing relevant, having only purely descriptive significance and thus would not feature in a comparison of trade marks. Another facet of this approach is that the courts compare the registered mark with the sign used by the defendant, ignoring extraneous matter. So it is no defence in double identity cases to say that there is other material which ensures that there is no confusion. One extreme example of this is BP v Kelly, 2002. Here, BP, which has a registration for the colour green for petrol stations, successfully sued the operator of a petrol station who had painted it green. Kelly’s premises were prominently marked in such a way that no one could suppose that they were owned by BP, but this did not matter. In using the colour green, Kelly used an identical sign in relation to identical services, and so had infringed. Deciding whether the registered goods or services are identical to the defendant’s goods or services is usually more straightforward. On the whole, the question will be resolved by deciding whether, in ordinary parlance, they might be considered the same. An example illustrates this principle: in British Sugar, 1996, the claimant contended that the defendant was using the mark on a ‘dessert sauce or syrup’ which fell within the scope of the claimant’s registration. The argument was based upon comments made on the back of a jar of the defendant’s product which said that it could be used with desserts. Nevertheless, it was primarily sold as a spread, and the court considered that no one would naturally call it a ‘dessert sauce’ any more than they would call a jam a dessert sauce. The action failed. The position is often more complicated with services because their specifications are apt to be woolly and broad. Wary of this, the courts have said that specifications of services should be read narrowly. Thus, in Avnet v Iosact, 1998, the court said that the defendant, an internet service provider, was not offering ‘advertising and promotional services’ by providing customers with web pages on which they could publicise their products. And in the Reed case, a sophisticated internet jobs site was not ‘an employment agency service’ because it did not actually put employers and employees in contact with each other. Finally, one general remark about double identity infringement: it was not a very good way of legislating. We suspect that those concerned thought there was bound to be confusion whenever there was double identity. If so, that was naïve. For instance, a defendant may use the registered mark to compare their own goods with those of the registered trade mark owner (comparative advertising; see Chapter 11). Or an owner may want to stop parallel imports of their own (genuine) goods from other countries (see Chapter 27). To prevent silly results, the Court

The Tests for Infringement  97 added to the double identity test, requiring that one of the ‘functions’ of a trade mark must also be adversely affected. It may even be that the Court embarked on its notions of ‘function’ because the legislation as it stood was inadequate.

(ii)  Identical Marks and Similar Goods/Services, or Similar Marks and Identical Goods/Services The second type of infringement arises where the defendant’s mark is identical to the claimant’s registered mark, but it is used only for goods or services which are similar to those covered by the registration; where the goods or services are identical, but the respective marks are only similar; or where both marks and goods or services are similar. In such cases, the claimant must also show then that there exists a likelihood of confusion on the part of the public because of the similarity/identity of the marks and the goods/services. The legislation says that ‘a likelihood of confusion’ includes ‘a likelihood of association’. Much judicial ink has been expended over the meaning of these terms. Many of the cases were decided by the CJEU (SABEL v Puma, 1998; Canon v MGM, 1999; and Lloyd, 2000), which has come up with the ‘global appreciation’ test. In a nutshell, this requires the court to take into account all relevant factors, such as the degree of similarity between the marks and the goods/services, and the distinctiveness (as discussed in Chapter 9) of the registered mark, to work out whether confusion is likely or not. The factors are interdependent. A lesser degree of similarity between goods or services may be offset by a greater degree of similarity between marks, and vice versa, but it is important to note that the test requires both the marks and the goods/services to be similar to some degree. Similarly, the more distinctive the registered trade mark (either in itself or because of the reputation it possesses on the market), the greater the risk of confusion. The converse is also true. So, when The European newspaper sued The European Voice newspaper for trade mark infringement, the fact that ‘European’ was an ordinary English word in common use (and not in itself distinctive of the plaintiff ’s newspaper) militated against a finding of a likelihood of confusion, The European v The Economist, 1998. When it comes to assessing the similarity of the marks, they must be looked at from the point of view of the ‘average consumer’ – who is assumed to look at the mark as a whole and to pay more attention to its distinctive or dominant components rather than analysing its details. In the case of composite marks, consisting of two or more elements, the average consumer, although perceiving the mark as a whole, will nonetheless appreciate that it consists of separate units and consider each to have continuing significance. Thus, in Aveda v Dabur Uveda, 2013, the High Court held that there was a likelihood of confusion between the registered mark, AVEDA, and DABUR UVEDA. The court reasoned that the average consumer would perceive the defendant’s mark as being a house mark (DABUR) plus a secondary mark (UVEDA), and if familiar with the registered mark, they

98  Trade Mark Infringement would be likely to mistake UVEDA for AVEDA. Although the average consumer is assumed to be reasonably well informed, observant and circumspect, Lloyd, 1999, account is taken of the fact that a consumer generally does not make a sideby-side comparison. Imperfect recollection of the registered mark is likely when the consumer sees the defendant’s mark. One of the problems is that the average consumer is an entirely fictional legal construct. The law of passing off looks at things somewhat more realistically and asks whether a significant proportion of the relevant population would be confused. Confusion, as a concept, is satisfied if there is either direct confusion (thinking that the defendant’s goods are those of trade mark owner) or indirect confusion (thinking the goods/services come from an entity which has some economic link with the owner, or that the trade mark owner might have expanded their lines). This, and the imperfect recollection of the average consumer, is well illustrated by Wagamama v City Centre Restaurants, 1995. The claimant ran a Japanese-style noodle restaurant under the registered mark Wagamama. The defendant launched an Indian restaurant called Rajamama. The judge found that because the name Wagamama was quite meaningless to the public, being an entirely made-up word, imperfect recollection of the mark was very likely. Therefore, although, when seen side-by-side, the marks were easily distinguishable, in normal use they would not be so seen. Moreover, there was a real risk of indirect confusion – many of those who did not mistake Rajamama for Wagamama might think that the Wagamama people had branched out to offer an Indian variant. There was a substantial likelihood of confusion on both counts and hence trade mark infringement. As far as the similarity of goods/services is concerned, there are a number of things to consider. The most important are their nature, their intended purpose, their method of use and whether they are in competition with each other or are complementary. Thus, buckles and shoes have been considered similar goods, Zanella’s Appn, 2000, as have medical apparatus for placing a suture and hollowfibre oxygenators (medical devices capable of oxygenating the blood during surgery), Boston Scientific, 2008. Both cases were decided on the basis that the goods were complementary, and that when the similarity of the marks was taken into account the consumer could think they came from the same manufacturer.

(iii)  Identical or Similar Marks and Identical, Similar or Dissimilar Goods/Services The final type of infringement goes beyond tackling confusion, but it only applies if the registered mark has acquired a reputation. It is concerned with cases in which the defendant is either free-riding on the reputation of that registered mark or harming the reputation in another way. Clearly, a claimant relying upon this type of infringement must first establish that the registered mark has a reputation. If it

The Tests for Infringement  99 has, they must then go on to establish that the defendant’s use of the mark, ‘being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark’. The effect is to give wider protection to the owner of a trade mark of repute than for the owner of an unknown mark. Precisely how much still remains rather uncertain, not least because relatively little has been said about when use is ‘without due cause’. The requirement that the claimant’s mark have a reputation is akin to the requirement for goodwill in passing off (see Chapter 15). Customers must know the mark as the claimant’s ‘badge’. This means that the mark must be known by a significant part of the public concerned with the goods/services covered by the registration. To decide whether this condition is satisfied, the court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, the geographical extent and duration of its use, and the amount the owner has invested in promoting it. Because reputation is assessed based upon the particular market sector in which the trade mark owner operates, the trade mark doesn’t necessarily need to be ‘famous’ enough to be known to the general public in the sense of being a household name. The second part of the test is more complicated: the CJEU says a public perception of ‘a link’ will do – though precisely what amounts to ‘a link’ remains a mystery. Some examples may assist. The kinds of scenario which are likely to be caught are as follows.

Dilution If a reputed mark, and, in particular, one known for exclusiveness and luxury, is used for all manner of unrelated goods, then ubiquity will whittle away, or dilute, its uniqueness. This is the type of ‘detriment to the distinctive character’ of the protected mark that the law seeks to prevent. So use of Chanel or Gucci on plastic toys, pizzas, disposable nappies or betting shops would be detrimental to the distinctive character of those marks.

Tarnishment Some goods or services are generally considered by the public to be somewhat insalubrious in character. Tarnishing, or ‘detriment to the repute’, as it is labelled in UK trade mark law, occurs when a mark with a reputation for something is used by someone else in connection with dissonant goods or services of this type. Classic instances of tarnishing are use of the mark VISA for condoms, Sheimer’s TM Appn, 2000 and in a famous Benelux case, Klarein for a liquid detergent when the mark Claeryn was well-known for Dutch gin, Lucas Bols v Colgate-Palmolive, 1976. Some think that this sort of decision can go too far – in the UK, for instance, Jif lemon juice happily coexisted for many years with Jif detergent and even Jiffy condoms.

100  Trade Mark Infringement

Taking an Unfair Advantage This has been described as ‘free-riding on the coat-tails of a famous mark’, Adidas-Salomon, 2003. In that case, it was suggested that use of Rolls-Royce by a manufacturer of whisky would take advantage of the mark’s distinctive character or repute unfairly. Again, to English eyes, that is taking things a bit far. Nevertheless, it is clear that a comparison list that mapped famous perfumes onto smell-a-like doppelgangers would be caught by the provision – a position that one member of the Court of Appeal (now an author of this book) described as an example of ‘trade mark law prevent[ing] the defendants from telling the truth’, L’Oréal v Bellure, 2010. But the detriment or unfair advantage must be real and not fanciful. For example, the owner of the well-known mark Typhoo for tea failed to prevent the defendant from using Typhoon for kitchen equipment, Premier Brands v Typhoon, 2000. The claimant’s argument that Typhoon would cause dilution and tarnishing, because of the association with the destructive power of tropical cyclones, was rejected. The fact that anyone even dared advance such a daft argument shows how far things have gone.

Use What type of use of his mark may the owner of a registered trade mark prevent? Firstly, the use made by the defendant must be in the course of trade, as opposed to for private or domestic purposes. But as long as the use is in trade, a very wide variety of acts may be prevented. The most obvious uses the claimant will be able to stop are putting the mark on goods or their packaging, offering goods or services for sale by reference to the mark, actually selling or supplying them by reference to the mark, importing and exporting them by reference to the mark, and using the mark on business papers (catalogues, invoices, headed notepaper and the like) and in advertising. The use does not have to be in writing; oral use of the mark (e.g. a radio or television advert) can also be prevented. However, the mark must be used ‘in relation to’ the relevant goods or services. There is a quite complicated theoretical question about what use should be considered infringing use, and the case law is not wholly consistent on this issue. Nonetheless, in practice, the courts do not have much difficulty in differentiating cases where a mark is used in relation to the goods in question from cases where it is not. There are harder cases, such as ones where a keyword is used in an internet referencing service: that too can count as ‘use’ of a mark, Google/Louis Vuitton, 2010. The courts are quite used to distinguishing between cases where a sign can be found somewhere on goods and where it can genuinely be said to be used in relation to those goods so as to identify the trade origin.

Who to Sue?  101 There are also difficult areas where marks are used on the internet. They are visible worldwide and so turn up on search engines anywhere. In general, if it is clear that the website’s owner (remote though it may be) is soliciting business from the UK, that will count as use in the UK. If not, not. Sometimes, however, the distinction is not that clear-cut. For instance, in Argos v Argos, 2018, the wellknown (in the UK) UK retailer Argos sued a US company called Argos Systems Inc. The latter’s construction software was only available in the USA. A lot of UK shoppers searching for the Argos UK website wrongly guessed that it would be found at www.argos.com and ended up at the US company’s website. They quickly saw that it was the wrong ‘Argos’ and found the right one (www.argos.co.uk). By itself, this was evidently not use by the US company in the UK. However, the US company also decided to try and make a quick buck from the additional traffic and so put some adverts on their website. To the extent that these were of relevance to the UK market, then there was targeting of UK consumers – not least because the domain name argos.com was used to direct users to its website, where they could then see these ads. The case eventually floundered because the Court of Appeal thought that the use did not take unfair advantage of the UK mark. This is not the only example of big companies trying to use the trade mark system for what most sensible people would regard as overprotection.

Who to Sue? Most prudent traders avoid the possibility of infringement by checking the UK Trade Marks Register before adopting a new mark. But if infringement does occur, an action to enforce the trade mark owner’s rights may be brought either against the party who applied the mark to the goods in the first place (or imported them, if they were marked abroad), or against anyone who has subsequently traded in them. Each subsequent trader, however, will usually have the right to bring into the action, as a ‘third party’, the person who sold them the goods, so that in the last resort whoever marked or imported the goods will usually be liable for the whole of the damages. Thus, assuming that they have the money to pay, it generally makes most commercial sense to bring the action against the manufacturer or importer only. Dealers lower down the line are less frequently sued, unless the owner of the mark cannot discover who made or imported the goods (suing the dealer may be one way of finding this out), or the dealers themselves have large stocks of falsely marked goods. In this connection, registrations for services are ordinarily quite different from those for goods. Trade marks used on goods tend to stay on the goods as they pass from hand to hand, whereas marks for services are ordinarily used just by the one business that actually provides the services.

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Contested Actions The defendant in an action for infringement can (and usually does) claim by way of defence that the registration of the mark is invalid, and ask the court to cancel it. When this happens, the case is likely to be made more lengthy, complicated and expensive. If the validity of the registration is disputed and is upheld by the court, the owner of the mark may ask the court for a ‘certificate of validity’ for the registration (just as in a patent case, see Chapter 5). In practice, the certificate acts as a warning to the trade that this particular mark is too firmly established to be safely challenged.

11 Exceptions to Trade Mark Infringement Introduction The scope of infringement is defined widely – so widely that it would be overprotective without some exceptions. If any of these apply, the defendant will win even if the registration is valid. In practice, a defendant may rely on an exception and may also say the registration is invalid (see Chapter 12). And the general law may provide other defences (e.g. consent, express or implied, or perhaps inordinate delay).

Use of Own Name or Address Honest use (i.e. ‘use in accordance with honest practices in industrial or commercial matters’) by an individual of their own personal name, even if that name is used in the course of trade, does not infringe. The defence does not extend to company names even if that name is also the name of the person who owns or runs it. Actually, the defence seldom works. Unsurprisingly, use will not be held honest if it causes deception of customers. So, in practice, save in relation to unused registered marks (where there will be no confusion), this defence is seldom of value. For instance, a Mr William Asprey could not rely on this defence in respect of his use of the name ‘William R. Asprey’ for a shop selling luxury goods when there was evidence that customers of the claimant’s well-known shop Asprey would be confused, Asprey & Garrard v WRA, 2002.

Descriptive and Non-distinctive Use The descriptive use defence is the most important exception, although also the most difficult to identify in practice. This is mainly because there are different types of use which may be deemed to be ‘descriptive’. We use inverted commas because the exception covers uses which are not purely descriptive, in particular, use for the defendant’s goods. In Gerolsteiner v Putsch, 2004, for example, the claimants’ registered mark was Gerri for mineral water. The defendants sold Kerry Spring mineral water, imported into Germany from an Irish company called Kerry Spring

104  Exceptions to Trade Mark Infringement Water. The German court thought that ‘Kerry’ sounded so similar to ‘Gerri’ that there was a likelihood of confusion. On a reference, the CJEU held the descriptive use defence applied: the term indicated the geographical origin of the water, even though the Irish company was also using it as their trade mark. Other, more obvious, cases arise where the defendant uses the claimant’s registered trade mark as a description rather than as a trade mark. For example, use on the label of a jar of spread of the words Robertson’s Toffee Treat did not infringe the registered mark Treat, because ‘Treat’ was used descriptively, not as the maker’s mark (which was Robertson’s), British Sugar v James Robertson, 1996. Similarly, ‘spork’ on a price list to describe a cross between a spoon and a fork was not an infringement of the registration of Spork, the term having been used generically in the trade and the defendant’s price list clearly indicating the manufacturer of the product, Green v Regalzone, 2002. There are also cases where the defendant uses the claimant’s registered mark to refer to the claimant’s goods or services by way of comparison. An example is British Airways v Ryanair, 2001, where Ryanair used the British Airways trade mark, BA, as part of the slogan EXPENSIVE BA … .DS!. Comparative advertising has become a subject on its own – we discuss it shortly. Yet another case is where the defendant uses the claimant’s registered trade mark to refer to the claimant’s goods or services to indicate some characteristic of the defendant’s goods or services. For example: ‘These tights contain Lycra.’ The courts have tended to take rather a practical approach to this provision: where it is clear that the defendant is using a term in a descriptive manner and fairly, there will be no infringement. If not, there will. This category of defence was recently updated to include use of a sign which is not distinctive. This was to close a gap in the original wording. It applies to signs that are not necessarily descriptive, but are otherwise devoid of distinctive character and which third parties might therefore have a legitimate need to use. An example might be where the registered trade mark is a non-conventional one, such as a colour. Another might be where the registered mark combines distinctive and non-distinctive elements, and the defendant uses only the latter.

Referential Use There is also a defence (which may overlap with the descriptive defence) where a defendant needs to use a registered trade mark to identify, and now to refer to, the claimant’s own product. An example would be to indicate the nature or intended purpose of a product – e.g. use by the defendant to refer to accessories and spare parts of the trade mark owner. The recent extension of this defence to referential use more generally might open up its application to artistic or parodical use, since the Directive on which this change is based specifically refers to defences to ensure ‘full respect for fundamental rights and freedoms, and in particular the freedom of expression’.

Comparative Advertising  105

But there Must be Honesty For all the above exceptions, the defence only applies if the use is ‘in accordance with honest practices in industrial or commercial matters’. There is accordingly a duty to act fairly with respect to the interests of the trade mark proprietor. The test is objective: if there would be unfair competition with the claimant or some link is suggested with them (where there is in fact none), then the defences cannot apply, Celine, 2007. Thus, use is not honest if: it gives the impression that there is a (fictional) commercial connection between the defendant and the trade mark owner; it affects the value of the trade mark by taking unfair advantage of its distinctive character or repute; it entails the discrediting or denigration of that mark; or where the third party presents its product as an imitation or replica of the product bearing the trade mark of which it is not the owner, Gillette Finland, 2005. Cases about the ‘honesty’ of referential use have cropped up in the car industry. Thus, the defence failed where a dealer who had had its authorised dealership revoked started using the phrase ‘Independent Volvo Specialist’, with the words ‘Independent’ and ‘Specialist’ in much smaller lettering. The court was influenced by the fact that the defendant had previously been an authorised dealer and had written to customers in such a way as to give the misleading impression that it continued to be an authorised dealer, Volvo v Heritage, 2000. By way of contrast, in BMW v Deenik, 1999, the CJEU held that ‘BMW Specialist’ written fairly large was legitimate. Similarly, the High Court permitted an independent garage to say that they specialised in BMW cars, but not to use the official BMW roundel logo (also a registered trade mark). The public was likely to think that this meant that they were formally authorised by BMW, BMW v Technosport, 2016. In trade marks, as in life, a lot depends not only on what you say, but how you say it. Context matters. The reader might like to mull over whether a trader who sold what they called ‘Ford Spares’ would be all right.

Comparative Advertising Comparative advertising has its own special legislation, the Business Protection from Misleading Marketing Regulations 2008, based on EU legislation, the Directive Concerning Misleading and Comparative Advertising (CAD) of 2006. CAD provides a list of the kinds of comparative advertising which are permitted. If a comparison does not satisfy this list, then it will infringe any registered mark used in the advertisement. The list includes things like making sure that the comparison is between goods or services meeting the same needs or intended for the same purpose; or is objective and verifiable; that it does not take unfair advantage of, discredit or denigrate the trade marks; and that it does not cause confusion. What matters for the purposes of the CAD is whether the comparison is like-for-like, Lidl, 2011. An advertisement is misleading if the information in or omitted from it is such that the decision to buy the goods was made in the

106  Exceptions to Trade Mark Infringement mistaken belief that the selection of goods from the advertiser was representative of the general level of his prices or in the mistaken belief that all of the advertiser’s products were cheaper than those of his competitor. Some aspects of CAD might seem, to some, insufficiently permissive. For instance, a mere vulgar denigration of the plaintiff such as that in BA v Ryanair (see above) would now probably not be allowed under the CAD – the law has no sense of fun! Also, a comparative advertisement which ‘presents products as imitations or replicas of products bearing a protected mark’ is not permitted – even where it is perfectly lawful to make these and say so honestly. The UK Trade Marks Act now expressly integrates the Misleading Marketing Regulation into the legislation. Even before that was made express in the Act, a use permitted by the CAD was held not to infringe where there was a true comparison of rival mobile phone service prices, which was CAD-compliant, O2, 2007.

Earlier Rights Generally speaking, a registered trade mark cannot be used to stop someone who can prove continuous prior use of a conflicting mark in a particular locality. The earlier user must show that at the date of registration, or the date of first use of the mark by the trade mark owner (whichever is earlier), they could have prevented the trade mark owner’s use of the mark in that locality by the law of passing off (see Chapter 15). Suppose the claimant had registered an unused trade mark for cleaning services but, prior to the date of application, the defendant was already using the same mark for cleaning services in Bristol, and could prove that they had generated goodwill there at the relevant date. Because the defendant could have prevented the claimant from using the mark for cleaning services in Bristol by passing off, they will have a defence to trade mark infringement, but only insofar as their use continued in Bristol.

Use of Defendant’s Own Registered Mark Use of a registered trade mark by its owner is not an infringement of any earlier registered mark, but only to the extent to which the later registration is not open to an invalidity challenge (see Chapter 12). Of course, this defence only applies if the defendant is actually using the mark as registered. It failed, for example, in Neutrogena v Golden, 1996, where the defendant had registered the mark Nutralia, but was actually using Neutralia. Also, if an infringement claim is based upon a registration which is open to challenge for non-use, then a defendant is now able to rely upon this vulnerability without having to commence separate revocation proceedings.

12 Removal from the Register – Revocation and Invalidity Introduction Just because a mark is put on the register does not mean the registration is invulnerable. A registration mark can be attacked by anyone. Such attacks are often by way of a defence and counterclaim to an infringement action. But free-standing attacks are also made, themselves sometimes drawing a defence and counterclaim for infringement. There are two types of application: those for a declaration of invalidity and those for revocation. A claim for a declaration of invalidity is a claim that the mark should never have been registered. If it is successful, the registration will be treated as never having happened – what lawyers call a ‘nullity’. A claim for revocation is a claim that something that has happened since registration such that it should no longer continue in force, e.g. a claim for non-use for the required period (see below). Either way, the mark is knocked out for the future, but invalidity knocks it out for the past too. There will be a stump of time before the revocation when the registration was in force. Potentially, a trade mark owner of a revoked mark could therefore sue for acts done in that stump, but there is now a defence that effectively prevents this. Sometimes applications are made to limit the scope of protection of a mark (partial invalidity or partial revocation) where the problem arises only in respect of some of the goods or services. For example, a mark might have been used for a narrow range of goods but registered for a much broader class. You can challenge a registration by applying to the Registrar at the UK Intellectual Property Office (UKIPO) or the High Court, but if proceedings concerning the mark are pending in court (as they will be in an infringement case), the application must be made to the court. This chapter sets out the grounds on which a registration can be attacked. Many of these are the same as those for refusing to register a mark (Chapter 9).

Grounds for Revocation Non-use There is a general maxim in trade mark law: ‘Use it or lose it.’ In practice, this is more qualified. The mark owner is given a period in which to put a mark into

108  Removal from the Register – Revocation and Invalidity use before it will become vulnerable to cancellation on this ground. The rationale of this ground of revocation is to reduce the number of trade marks and, hence, conflicts between them. The clogging up of trade mark registers with a large number of unused and/or overly broad trade marks is sometimes called ‘trade mark clutter’. Cluttering can make it difficult for others to select and register new marks for fear of infringement in circumstances where there would be no actual conflict in the market. A mark which has not been used in the UK for a period of five years can be revoked. Time only begins to run from the date when the mark is actually registered, not the application date, so an owner has some time from filing to put it into use, particularly in instances where the application has faced significant objection or opposition. A registration is also vulnerable to revocation if use of the mark ceases for a continuous period of five years or more, but a mark may not be revoked if use starts or recommences before any application to revoke the registration is lodged. When challenged for non-use, the burden is on the trade mark owner to show that the mark has been used within the relevant period. After all, they will know what use they have made of the mark. The use must satisfy a number of requirements. First, it must be by the owner or with their consent (thus a licensee’s use will do). Secondly, use must be in relation to the goods or services for which the trade mark was registered. Thirdly, the use must be use of the trade mark as registered, or in a form of the mark which differs only in minor ways which do not change its distinctive character. This begs the question: how much variation can be made before the distinctive character of a mark is altered? Some guidance can be obtained from the cases, but it can often be a difficult question on which reasonable people can differ. Thus, 2nd Skin was held to share the same distinctive character of the registered mark Second Skin, Second Skin TM, 2001. In the long-running beer wars between the US and Czech Budweisers, the Court of Appeal upheld the decision of the Trade Mark Registry hearing officer that use of the words Budweiser-Budweiser-Budvar-Budweiser-Budbräu-Bud- in block capitals around a circle enclosing a motif consisting of a shield with a lion on it, superimposed on a castle with towers, was use of the registered mark in a form which did not alter the distinctive character of the registered mark consisting only of the words Budweiser Budbräu in stylised writing. The High Court had concluded differently. The Court of Appeal actually preferred the view of the judge in the High Court over that of the hearing officer, but it did not have free choice to determine the outcome because the role of an appeal court is limited to correcting an error of principle, Bud and Budweiser Budbräu TMs, 2003. The differing views expressed indicate the uncertainty that exists if a trade mark owner opts to use a different version of the mark than they registered. The moral is clear: a mark which is not used in the same form as registered is in danger of revocation for non-use. So if a trade mark owner decides to vary the mark used, they should at least attempt to register the variant, too.

Grounds for Revocation  109 The final requirement is that the use must be ‘genuine’. The CJEU considered the meaning of ‘genuine use’ in Ansul v Ajax, 2003. Minimax was registered for fire extinguishers and associated products. While the trade mark owner stopped selling fire extinguishers, they continued to sell parts under the mark and to maintain, check and repair them. The Court held that, where the trade mark owner sells parts which are integral to the structure of the goods previously sold and uses the mark registered for this purpose, then there may be genuine use for those goods, not just the parts. More generally, it explained that genuine use entails use of the mark on the market, thereby excluding internal use within the owner’s business. In other words, the use of the mark must relate to goods or services that are either already marketed or about to be marketed, in the sense that preparations, such as advertising campaigns, to secure customers are already under way. Even a tiny amount of use (e.g. samples to test the market), with no intention other than trading under the mark, will do, Laboratoires Goemar, 2004. However, the use of the mark must be ‘real’ in the sense that it is intended to maintain or create a share in the market for the goods or services protected by the mark. This means that token use with the motive of protecting the registration against revocation is not ‘genuine’ in this sense. Similarly, use on free gifts – bottles of drink – bearing the mark which were handed out to promote a brand of clothing was not genuine use in respect of ‘beverages’ because they are not distributed with the aim of penetrating the market for drinks, Silberquelle, 2009. In Ferrari v DU, 2020, the CJEU considered the role of the second-hand market in the goods as proof of genuine use. Ferrari’s Testarossa mark was registered for ‘cars’. It sold a very small number of Testarossa cars between 1984 and 1996, but no new ones since. However, it had resold some second-hand vehicles within the fiveyear period before the claim for revocation was made, and claimed that this was ‘rights-maintaining use’. The CJEU agreed that resale of goods by the trade mark owner might be ‘genuine use’, but left it to the national referring court to assess whether the sales amounted to genuine use in this case. If the owner cannot show use, it may nonetheless be able to show that there are proper reasons for the non-use. If it can, the mark will not be revoked. ‘Proper reasons’ have limited scope. Any obstacles must have a direct relationship with the use of the trade mark, not just reflecting general market conditions, and make that use impossible or unreasonable. Ordinary commercial delays that a business might expect to encounter when, for example, launching a new product is not a proper reason, Philosophy di Alberta Ferretti TM, 2003. The obstacle must be ‘independent of the will’ of the proprietor, and not just ‘out of their control’ once created, Armin Häupl v Lidl, 2007. In revocation proceedings for non-use, it is not uncommon for the specification of goods or services covered by the registration to be a lot broader than the trade mark owner’s actual use. If so, the court must first decide precisely what things the mark has been used for and then cut down the specification to one which reflects the use made and gives a fair level of protection. That is not always straightforward, and the precise scope of the limitation made by the court can be crucial.

110  Removal from the Register – Revocation and Invalidity For example, in Thomson Holidays v Norwegian Cruise Lines, 2003, Freestyle was registered for ‘arrangement and booking of travel, tours and cruises; escorting travellers and arranging the escorting of travellers; providing tourist office services and booking and provision of accommodation and catering services for travellers’. Thomson had actually only used the trade mark for package holidays of the 18–30 variety. Thomson sued Norwegian for using Freestyle for cruise holidays – generally known for attracting older customers. The first instance judge limited the specification to exclude cruises on cruise ships on the ground that these cruises formed a distinct category of holiday which differed in kind and customer from land-based holidays such as Thomson’s. The Court of Appeal rejected this, holding that the specification should be limited to ‘package holidays’ – this would be how an average consumer would describe the services provided by the trade mark owner. Therefore, while at first instance the trade mark owner lost when its mark was limited to exclude cruises, it won on appeal because cruise holidays were a type of package holiday and so it was a double identity case. Of course, in the real world, even though a wide specification of goods or services may be vulnerable to revocation for non-use over much of the specification, the trade mark owner is still likely to gain an advantage from it. People do not want to get into trade mark fights, so, if a company is not committed to a mark, it is likely to use another rather than become involved in a protracted non-use fight.

The Mark has become a Common Name in the Trade A registered trade mark is also liable for revocation if its owner, through their acts or inactivity, permits the mark to become the common name for the product in the trade – often referred to as the mark becoming ‘generic’ or the process of ‘genericide’. This may occur where the owner is the first on the market with a new product, and the trade mark used then becomes adopted in trade as the name of all products of this type (a ‘proprietary eponym’), not just those that originate from the trade mark owner. There are numerous examples where trade marks have come to be generally used by consumers as the common name for a product. Sometimes the mark just turns completely into the generic word: ‘gramophone’ and ‘aspirin’ are two old examples (although aspirin is still a trade mark some countries). There are other, subtler, cases: where the public know the word is a trade mark but nonetheless commonly use it in a generic context. ‘Hoover’ is the classic example, ‘Yale’ and ‘Biro’ are others, and ‘Google’ is a more recent exemplar. This sort of case is not strong enough for revocation, because revocation is limited to cases in which the mark has become a common name in the trade. Moreover, this must have come about owing to the owner’s own actions or inactivity. In practice, this makes owners proactive in policing use of their mark. The ‘Don’t say Velcro’ video campaign in 2017, available to view on YouTube, illustrates one method of educating the public about the appropriate generic term to use (incidentally, it’s ‘hook-and-loop fastener’) in place of the registered mark.

Grounds for Declaration of Invalidity  111 The appearance of a trade mark in a dictionary is one type of evidence which challengers adduce to show that a mark has become generic. In 2019, a specific provision was introduced into UK law (based upon a provision in an EU Directive) which allows a trade mark owner to sue the publisher of a dictionary if they refuse to amend a reference which indicates (incorrectly) that a registered trade mark is a generic term.

The Mark has become Misleading A registered trade mark will be revoked if it can be shown that the mark has become misleading. This is similar to the requirement for registration that a mark applied for must not be deceptive (Chapter 9). However, for revocation, the misleading nature of the mark must have arisen as a consequence of the use made of it by the owner, or with their consent.

Partial Revocation As noted, in relation to each of the grounds for revocation, if the grounds only exist in respect of some of the goods or services for which the trade mark is registered, then the mark will be revoked only for those goods and services, see, e.g. Thomson Holidays.

Grounds for Declaration of Invalidity These include any of the absolute grounds for refusal of an application: in other words, that the mark is not distinctive, is descriptive, contrary to public policy or morality, deceptive, a specially protected emblem, applied for in bad faith or, in the case of a non-conventional mark, such as a shape, that the mark is caught by the exclusion for characteristics which are exclusively technical, natural or value-adding in nature. The difference in the case of an application for invalidity post-grant is that on the question of distinctiveness and descriptiveness, the facts will be considered as at the date of the application for invalidity. So, a mark which was originally non-distinctive at the time of application will not be invalidated if, as a result of the trade mark owner’s use of it subsequently, it has acquired a distinctive character by the time that the validity of the registration is called into question. An application for invalidity may also be made on the ground that one or more of the relative grounds applies. Only the owner of the earlier right can challenge a registration on this basis. An invalidity application will fail if it can be shown that the owner of the earlier mark or right relied upon has acquiesced to the registered mark’s use for a period of at least five years. In such a case, the earlier rights owner

112  Removal from the Register – Revocation and Invalidity cannot prevent the use of the later trade mark in relation to goods or services in relation to which it has been used either, except if the later mark was applied for in bad faith. As with the grounds for revocation, if the grounds for invalidity exist in respect of only some of the goods or services, there may be partial invalidity of the registration in relation to those goods or services only.

13 EU Trade Marks, ‘International’ Registration and Well-Known Marks Introduction First, we briefly consider two other schemes of trade mark protection for securing trade mark protection beyond the UK – the EU and International registration routes. These can be used instead of, or in addition to, filing national trade mark applications at the local registries in the countries of interest. There has been some harmonisation of trade mark law at the international level, but this has still left room for a degree of variation in procedure and practice at the national level. Using the EU and/or International routes can streamline and simplify procedures, making the prosecution and maintenance of registrations in multiple jurisdictions less expensive and more predictable. Finally, we outline the special protection provided for by international treaty to well-known, but unregistered, marks.

The EU Trade Mark Until Brexit, EU trade marks (EUTMs – which used to be called Community trade marks or CTMs) provided protection in the UK, along with the other 27 EU Member States. This is no longer so for EUTM applications lodged after 31 December 2020. As of this date, however, all existing EUTMs were automatically cloned into a comparable UK right (retaining the filing and priority dates of the original EUTM), while applicants for EUTMs that were still pending could refile an equivalent UK application while maintaining the priority date of the original EUTM. Despite Brexit, many UK businesses will still be interested in securing trade mark protection in the EU. The EUTM route has a number of advantages compared to national filings in some or all of the 27 remaining Member States. Importantly, injunctions can be granted in court in one Member State which prevent use of an EUTM throughout the EU. The legislation that governs the EUTM regime, the EU Trade Mark Regulation, is, to all intents and purposes (at least as far as the scope of this book is concerned), the same as the Trade Mark Directive, upon which the UK Trade Marks Act 1994 is based. Accordingly, for the most part, the substantive law relating to UK trade marks and EUTMs is the

114  EU Trade Marks, ‘International’ Registration and Well-Known Marks same. But the procedure for applying for and, in certain respects, litigating an EUTM is rather different. The main differences are covered here. The EUTM system is administered by a body called the EU Intellectual Property Office, or EUIPO (which recently changed its name from the cumbersome Office for the Harmonisation of the Internal Market, or OHIM). A bit like our own UKIPO, EUIPO and its Boards of Appeal decide on whether EUTMs should be registered in the first place and also deal with applications for their revocation and invalidity.

Applications for an EU Trade Mark Applications must be in an EU official language, and must also identify a (different) second language from one of the EUIPO’s five working languages, English, French, German, Italian and Spanish. An application must be filed directly at the EUIPO, but can be done online, which is easier and cheaper than using paper. The EUIPO has a useful website, at https://euipo.europa.eu, which contains detailed information about the procedure, as well as links to the online filing portal. Applicants, whether natural or legal persons, based outside the EU (e.g. the UK) must appoint a professional representative to act on their behalf. In practice, this would be the sensible thing to do anyway. Just like a UK trade mark application (Chapter 9), an EUTM must be applied for in specific classes for specific goods or services, and again, the specifications should be carefully chosen to reflect the use which the applicant intends to make. The cost of filing is currently €1000 (€850, if filing online) plus additional fees for each additional class of goods or services – €50 for the second class and €150 per class thereafter. The application should be made by, or on behalf of, the person, firm or company actually using or intending to use the mark. An agent or representative of the proprietor should only apply for registration of the mark in their own name if they have the proprietor’s consent. (Otherwise, use of the mark, the application and any subsequent registration will be vulnerable to challenge by the true proprietor.) EUIPO examines the mark to see whether any of the ‘absolute’ grounds for refusal of the mark apply, e.g. that the mark is not distinctive (see Chapter 9). If any objections are raised on examination, the applicant can respond. If there are no objections, or those raised are overcome, the application is published electronically in the EU Trade Marks Bulletin. If the objections cannot be overcome, then the Office will refuse the application. Refusal can be appealed to a Board of Appeal. From there, a further appeal is to the General Court of the EU and, in important cases, the CJEU – not a very sensible system, as the entire process can take a decade or more. As in the UK, the EUIPO cannot raise any objection based on earlier marks or rights (‘relative’ grounds), but the Office does conduct a search for earlier EUTMs which could conflict with the application. It then notifies the owner of any earlier EUTMs found, so that they can oppose the application or negotiate a settlement (often by one or both sides restricting their specifications or

The EU Trade Mark  115 goods or services). An applicant may also elect to pay extra at the time of filing to receive an additional search report covering certain national registers. But as many national offices have opted out of this, and those that do provide little detail, the results are often of limited value. When the application is published, anyone can make observations to EUIPO as to why the mark should not be registered on absolute grounds. These are sent to the applicant for comment. The date of publication establishes the deadline for opposition by the owners of earlier conflicting rights. They have three months from then to oppose. An opposition can only be based upon relative grounds. During any opposition procedure, each side can file written observations. A decision is then made by the Opposition Division. Such decisions can be appealed to the Board of Appeal, and from there to the General Court and possibly to the CJEU if the case involves an important point. If there is no opposition, or any opposition is unsuccessful, the application will proceed to registration. Renewal fees are payable every 10 years to keep the EUTM in force. They mirror the application fees.

Applications for Revocation or Invalidity Applications for revocation or invalidity of an EUTM go to the Cancellation Division (with appeal to the Board of Appeal and then the General Court). Cases based on earlier marks or rights can only be made by the proprietor of the relevant earlier mark or right. Given the unitary nature of an EUTM, a successful challenge – even if based upon a right or ground which only applies in one, or some, Member States – will knock out the entire EUTM. But here, the holder does have the option of converting the EU right into equivalent national trade marks in the remaining Member States. Each Member State must nominate an ‘EU Trade Mark Court’ where EUTMs can be litigated. Applications for revocation or invalidity may be made in those courts, but only by way of a counterclaim to an infringement claim. (Until Brexit, in the UK judges of the Chancery Division of the High Court used to sit as EU trade mark judges.)

Infringement Actions Actions for infringement must be brought in an EU Trade Mark Court, normally in the country where the defendant is domiciled or in which they have an establishment. In these circumstances, the court will have jurisdiction over acts of infringement in any country in the EU. An injunction may be granted so as to operate EU-wide, though certain, essentially administrative, functions by way of registration have to be gone through before it can be enforced in another EU country.

116  EU Trade Marks, ‘International’ Registration and Well-Known Marks

‘International’ Registration of Trade Marks Companies with an international business need to obtain trade mark protection in many countries. To simplify the process, there is a centralised system of ‘International’ registration under the ‘Madrid Protocol’ – an international agreement overseen by the World Intellectual Property Organization (WIPO) in Geneva. The system provides a single procedure for applying for registrations in all or any countries which have signed up to the Protocol. There are currently 109 signatories, covering 125 countries, including most, although not all, major markets. The EU is also a signatory, so one can apply for an EUTM via the International registration route too. In essence, the system allows the applicant to apply for an International registration, based upon an application or registration in the applicant’s ‘home’ territory. The applicant designates the countries where registration is sought. The application is made through the applicant’s local IP office, which forwards it on to WIPO. WIPO undertakes a limited examination (mainly looking for compliance with filing formalities), before recording the details on the International Register. It then forwards the details to each of the designated countries for a full examination, covering the usual grounds in that jurisdiction. If protection is confirmed in a designated country, the International registration gives the same protection as a national mark in that particular country. The astute reader will realise that there is actually no such thing as an International registration – it is in fact a system for applying for national or regional registrations: a bunch of parallel registrations. However, the system does have a unitary character in some administrative respects. For example, renewal fee payments are made to WIPO (which passes them on to the national office), and changes of ownership, addresses, etc. are recorded centrally too, rather than having to complete these procedures at each and every national office. This can save a lot of time and money, particularly for businesses with large portfolios of trade marks.

Well-Known Marks Some foreign marks may be known in the UK, but not registered, or even used, here. If so, there is clearly no registration to infringe, and passing off may well not provide a remedy against someone who starts using the mark here (to succeed in passing off, the claimant must have goodwill here, not a mere reputation – see Starbucks v BSB, discussed in Chapter 15). Some may think that unsatisfactory. After all, if the mark is known here, those who know it will be deceived. Nonetheless it is the law. The position is ameliorated, however, if the reputation of the mark is big enough for it to be ‘well-known’ in the UK. Then a special provision of the Trade Marks Act will apply, which does not require the owner of the

Well-Known Marks  117 foreign mark to carry on business or have any goodwill here. The provision implements a provision of an international treaty called the Paris Convention. But what does it mean for a mark to be ‘well-known’ in the UK? It probably means something less than famous, but something more than merely having a small reputation. Factors such as the degree of knowledge, the relevant market sector, the duration of use, the extent of promotion and so on all come into it. We are in ‘how many grains of sand makes a pile’ territory here! If a mark can be shown to be well-known, the owner is entitled to restrain, by injunction, the use of any mark which is identical or similar to it when used for identical or similar goods or services if that use is likely to cause confusion. There is no right to damages. Since the provision was introduced in 1994, it has not featured much, and tends to be relied upon in conjunction with other grounds, such as in Hotel Cipriani v Cipriani (Grosvenor Street), 2010, where the claimant won on passing off too.

14 Collective Marks, Certification Marks and Geographical Indications Introduction Collective and certification marks differ from ordinary trade marks. They do not communicate a message of trade origin from a single enterprise; instead, the messages they convey relate more broadly to ‘type’ and ‘quality’. A collective mark relates to the type of business of a number of traders who supply the goods or services, while a certification mark is a guarantee that the marked goods or services have a particular characteristic or meet a defined quality standard. Geographical indications overlap with these to a certain extent, but are dealt with under a separate system of protection.

Collective Marks A collective trade mark is owned by a trade or professional association. It is used by the association’s members to identify their membership of that organisation (and thereby distinguish their goods or services from those of others who are not members). Two examples of registered collective marks are the logo of the Federation of Master Builders and the emblem of the National Association of Jewellers. The general provisions of the Trade Marks Act 1994 apply to collective marks, subject to certain qualifications.

Application for Registration An application for a collective mark must be filed by an association which has the capacity to hold property rights (unincorporated associations have no legal identity and so could not qualify). There are two stages of examination. The first is an examination of the application on the usual grounds that apply to conventional trade marks, i.e. an assessment of the mark’s inherent registrability on absolute grounds (distinctiveness, deceptiveness, etc.) and a search to identify earlier rights which might give rise to a challenge on relative grounds based upon likely

Collective Marks  119 confusion, dilution, etc. The second stage is an examination of the association’s rules governing use of the mark. The examination on absolute grounds is adapted for a collective mark because its distinguishing function differs from ordinary marks – the question is whether the mark is able to distinguish the goods/services of members of that association from those of others who are not. The practical effect of this is that certain terms which might be objected to as being descriptive for an ordinary mark because it indicates the geographical origin of the goods (and so does not signal a single source of them) might well be accepted as a collective mark. For example, the trade association of producers of San Daniele ham in Italy registered a figurative mark including the words Prosciutto di San Daniele Sd for dry cured ham from the area geographically delimited by the current boundaries of the Municipality of San Daniele del Friuli. Additionally, the mark must not be something which is liable to mislead the public as to the character or significance of the mark, in particular, by being taken as something other than a collective mark. For the second stage, the UKIPO reviews the regulations governing use of the mark. These must identify the conditions for persons to be authorised to use the mark, the conditions of membership of the association and, where they exist, the conditions of use of the mark. The mark will not be registered unless the regulations pass muster and are not contrary to public policy or accepted principles of morality. The regulations are open to public inspection. Any amendments to the regulations must be accepted by the Registrar of Trade Marks.

Infringement The same tests for infringement apply to collective marks as to standard registered trade marks. In the case of collective marks consisting of signs or indications designating the geographical origin of the goods, the proprietor cannot prevent the use of such signs or indications by a third party where they are used in accordance with honest practices in industrial or commercial matters.

Revocation and Invalidity A collective mark may be revoked or invalidated on the same grounds as a standard registered trade mark (see Chapter 12). The mark may also be revoked: if it was misleading when registered; if it has become misleading because the proprietor has failed to observe or secure the observance of the regulations governing use of the mark; or if the regulations have been amended so that they no longer comply with the requirements outlined above or are contrary to public policy or to accepted principles of morality.

120  Collective Marks, Certification Marks and Geographical Indications

Certification Marks A certification mark indicates that the products so marked are certified by the trade mark owner in respect of origin, material, mode of manufacture of goods or performance of services, quality, accuracy or some other characteristic. Any supplier that meets the specified standard may use the mark in accordance with the regulations. Certification marks are often owned by trade associations or standardsetting organisations that are able to demonstrate their competence to certify the goods/services and monitor compliance with the required standards. For instance, the British Standards Institution’s ‘kitemark’ is a certification mark – goods that carry this mark comply with the relevant BSI standard. The general provisions of the 1994 Act apply to certification marks, subject to certain qualifications.

Application for Registration The application process for certification marks is similar to the two-stage process for collective marks. The application must be filed by the certifying body covering the goods/services which are being certified. The applicant must be neutral (and seen to be so) when undertaking the certification, meaning that it cannot itself do any business of supplying the certified goods or services. So, the applicant will generally be a trade or professional association (e.g. the Stilton Cheese Makers’ Association), but unlike a collective mark, there is no requirement that the applicant be an association. The test for ‘distinctiveness’ applied at the first stage is whether the mark is able to distinguish certified goods or services from those which are not. As with collective marks, a certification mark may, therefore, consist of something which indicates the geographical origin of the goods or services. Also, the mark must not be something which is liable to mislead the public as to the character or significance of the mark, in particular, by being taken as something other than a certification mark. (Such an objection can often be addressed by adding the words ‘certification mark’ to the mark.) During the second stage, the applicant submits the regulations governing use of the mark. (An example of the sort of thing is to be found in the report of Stilton TM, 1967.) The UKIPO must be satisfied that the regulations are not contrary to public policy or morality and also comply with the following requirements. They must indicate who is authorised to use the mark, the characteristics certified by the mark, how the certifying body is to test those characteristics and to supervise use of the marks, the fees (if any) to be paid in connection with operation of the mark and the procedures for resolving disputes. As with collective marks, the regulations must be open to inspection and the UKIPO must approve any amendments made to them. Finally, an applicant for a certification mark must be competent to certify the goods or services for which the mark is to be registered.

Geographical Indications  121

Infringement The same tests for infringement apply to certification marks as to standard registered trade marks (see Chapter 10). In the case of marks consisting of signs or indications designating the geographical origin of the goods, the proprietor cannot prevent the use of such signs or indications by a third party where they are used in accordance with honest practices in industrial or commercial matters.

Revocation and Invalidity A certification mark may be revoked or invalidated on the same grounds as a standard registered trade mark (see Chapter 12), or on the following additional grounds: that the mark was registered in breach of the requirement that the proprietor must not conduct business supplying goods or services of the kind certified; that the mark is misleading in the way outlined above; or there is a defect in the requirements outlined above relating to the regulations. A certification mark may also be revoked: if the proprietor starts to carry on business supplying goods or services of the kind certified; if it has become misleading in the way outlined above in relation to applications; if the proprietor has failed to observe or secure the observance of the regulations governing use of the mark; if the regulations have been amended in such a way that they no longer comply with the requirements outlined above or are contrary to public policy or to accepted principles of morality; or if the proprietor is no longer competent to certify the goods or services for which the mark is registered.

Geographical Indications Various complicated EU legislation has made it possible to obtain protection for certain geographical indications (GIs) for food, wine and agricultural products. GIs identify a product’s characteristics, reputation, geographical connection or particular method of production, and protect it against imitation and misuse. A GI is not owned or used by a specific business, but rather any producer can use a protected GI, provided they abide by the relevant regulations and are verified to do so. GI protection, therefore, overlaps with the collective and certification marks discussed above. There are three different types of labels – Protected Geographical Indication (PGI), Protected Designation of Origin (PDO) and Traditional Specialty Guaranteed (TSG) – which each protect slightly different attributes. Well-known GIs include Stilton Cheese and Scotch Whisky. An explanation of this legislation is outside the scope of this book, but the whole subject of GIs has become of increasing importance not only within Europe, but also internationally. Wine names, for instance, are now very well

122  Collective Marks, Certification Marks and Geographical Indications protected within the EU, with the EU scheme taking over from various national law systems, for instance our own passing off law which protected ‘champagne’, Bollinger v Costa Brava Wine, 1961. The scope of protection can be quite far reaching. For example, in 2019, the Scotch Whisky Association succeeded in enforcing its GI for Scotch Whisky against a German producer selling whisky using the mark Glen Buchenbach. Although the protected term was not being used, a German court was persuaded that as the word ‘Glen’ is strongly associated with Scotland and Scotch Whisky, use of it on a product that was not ‘Scotch Whisky’ was misleading and likely to convey a false impression of the product’s origin to consumers. GIs for cheese names are also popular. There have been major running battles to reclaim some ‘stolen’ names. Feta is a good example, made the subject of a PDO in 2002. Arguments erupted between Greece, which wanted it as a PDO, and Germany, France and Holland, which did not (until the Greeks won this battle, most cheese sold in Europe as ‘feta’ cheese did not come from Greece). Some names (cheddar, for instance) are past recall. Even where PDOs are well established within one jurisdiction, there can be friction with other countries (often the USA). American winemakers, for instance, are apt to use ‘stolen’ European names, such as chablis. These sorts of battles are often fought within the context of the WTO. After Brexit, any quality label which was protected under one of the EU GI schemes is now protected in under a new ‘UK’ GI scheme. It is operated by the Department for Environment, Food and Rural Affairs, not the UKIPO. The scheme covers the same three categories of GIs as the EU scheme and protects products which are sold in Great Britain. (Despite the ‘UK’ GI label, products in Northern Ireland continue to be covered by the EU GI scheme.) The UK has also reached an agreement with the USA to provide UK protection for certain wine names (over 700 American Viticultural Area (AVA) labels which identify the specific grapegrowing region in the USA) and two spirit drinks names (Bourbon Whiskey and Tennessee Whiskey).

15 Passing Off A General Rule The general rule governing passing off is that traders may not conduct business in such a way as to lead customers to mistake their goods or business for the goods or business of someone else. There are lots of ways of doing this, but the heart of this wrong is telling lies to the public in such a way as to damage another trader’s goodwill. If the court thinks that is going on, it is going to want to stop it. In reality, this general rule is often more important than all the technical rules of the law of registered trade marks put together. Still, it is important to remember that the law of passing off is not simply a law that prevents the telling of lies. It is about the telling of specific kinds of lie in specific circumstances. The reason that discussion of this subject belongs in a book about intellectual property is that the lies that passing off law prevents are those which injure a kind of proprietary right built up through trading; it is therefore very closely allied to infringement of trade marks. Indeed, some people talk of passing off as protecting a ‘common law trade mark’, but that terminology is not exact.

Varieties of Passing Off A considerable variety of activities are lumped together under the name ‘passing off ’. They range from simple cases of dishonest trading – where someone puts someone else’s brand on a product of theirs or a doctor prescribes a particular manufacturer’s drug and the customer is simply given a different, cheaper brand – to cases that are in effect trade mark infringement. The majority of passing off cases now are those akin to trade mark infringement cases, in that a defendant has used the trade name, or other badge (or something so close as to deceive) of the claimant, on a product not originating from the claimant. There are more sophisticated versions now and again, such as manufacturers who declare, untruthfully, that their products are ‘as seen on TV’. Or there is the practice of some large supermarket chains to package their ‘own brand’ to look like the brand leader, so that a significant number of people are deceived. Until the mid-1990s, a number of cases where the brand owner tried to stop this failed. The brand owners unsuccessfully tried to prove the public believed that they made the goods for the supermarket, whereas the

124  Passing Off supermarkets said they only used the lookalike get-up to indicate that their goods were the same sort of thing as that of the brand owner. But in United Biscuits v Asda, 1997, the claimant showed (although only just, and then with a bit of a fair wind from the judge) that the public believed that they made a Penguin biscuit lookalike called a Puffin for the supermarket. In the immediate aftermath, supermarket lookalikes became a little rarer (or perhaps more subtle): although any change of tide seems to have been only short-lived. In 2014, a court had to consider whether Aldi’s Miracle Oil hair product range was too like the claimant’s Moroccanoil-branded products that it amounted to passing off, Moroccanoil v Aldi, 2014. As the supermarket’s slogan was Like brands. Only cheaper, it was clear that the defendant has designed the product get-up to call the branded product to mind. This was not good enough to amount to a misrepresentation. Taking factors such as the different channels of trade and price difference (£30 versus £4) into account, the judge was not persuaded that a significant enough number of consumers would either mistake one product for the other or believe that Aldi’s product was licensed or made by the brand leader. Big brand owners continue to campaign for an anti-lookalike law – which might be covered by some sort of general ‘unfair competition’, as is common in civil law countries. The UK does not have such a law – and in any event is apt to be more pro-competition than civil law. What some think is unfair, other see as no more than fair market competition. There are also odd cases of passing off that fit no general category, but where the court feels that some kind of deceptive conduct ought to be stopped. Whenever one trader manages to benefit from another’s goodwill, there is likely to be at least an arguable case of passing off.

‘Badges’ and Reputations Most cases of passing off, then, are cases where one trader, without actually saying that their goods are someone else’s, nevertheless indicates this by using a badge, designation, etc. that people have come to regard as indicating the other’s goods. In the simplest case, this badge may be an ordinary trade mark – perhaps a trade mark that for one reason or another is not registered for the goods concerned. (If it is registered, there will be trade mark infringement as well as passing off.) It may be the name of a business, or of someone associated with the business. It may be a special appearance or ‘get-up’ of the goods: a specially shaped package, for instance, such as a plastic lemon (Jif, see later). But all such cases have these essentials in common: the ‘badge’ (whatever it may be) must be one that has, as a result of trade, come to distinguish the goods of a particular trader or group of traders; and it must have been imitated closely enough, whether deliberately or by accident, for people to be deceived.

‘Badges’ and Reputations  125 So, a passing off claimant must prove two main things: that the mark or other badge relied upon has a sufficient reputation amongst customers; and that there is a real risk that the defendant’s activities will lead to deception or damaging confusion of those customers. Actually, there is also a third thing: to prove damage, but proof of the first two things will usually be enough because there will be damage by way of lost sales and damage to the reputation of the claimant’s badge. The UK Supreme Court has recently held that there is a fourth element. The claimant must have established a reputation based upon trading and customers located within the UK. ‘Mere reputation’ within the UK, as might arise from trade undertaken elsewhere in the world, will not suffice, Starbucks v BSB Group, 2015. The action for passing off is based on protecting goodwill in the badge concerned. Goodwill requires more than just a reputation. A good working definition is ‘the attractive force which brings in custom’. If you have no trade here, mere fame will not bring in custom. Despite the ubiquity of the internet and increase in international travel, the Court refused to recognise the notion of ‘international goodwill’, fearing protection based upon foreign reputation alone would be too easy to secure and create unjustified monopolies that would impede competition. After all, in most cases, it is open for international companies with real business interests in the UK to reserve protection for their marks by way of trade mark registration. And if the mark is actually famous here, it will get protection as a famous mark anyway (see Chapter 13).

The Risk of Deception Judging the risk of deception in these cases is not unlike judging whether one trade mark infringes another (Chapter 10). But in a passing off action, the question is not whether any fair use of the defendant’s mark, or other badge, would be likely to confuse the average consumer, but whether what the defendant is actually doing is or will be misleading. This means that a court has to look at all the circumstances to see whether they increase or decrease the risk. It may be important, for instance, whether (and how) the defendant puts their own name on the goods, and what, if anything, this name will mean to the customer. So, whereas in trade mark infringement the comparison is ‘mark for sign’, which generally leaves out aspects of context likely to increase or diminish confusion, for passing off there is a more general assessment. The degree to which the customers already know where the goods come from may also be important. Businesses dealing directly with manufacturers probably know very well the source of the goods they are purchasing, and so are less likely to be deceived by markings which would be misleading to the less experienced consumers. It is when the goods get into shops before the general public, who often make purchasing decisions in a hurry, that misleading markings really matter most.

126  Passing Off

Get-up Cases It will be clear from what we have just said that cases of passing off by ‘get-up’ – meaning the overall appearance of the product as it is presented for sale – are not very common. Very few manufacturers put the real emphasis of their advertising upon the mere look of their products or packaging. Even if packaging did not change as often as it does, it would still be more sensible to put the real emphasis on a brand name. So, the public is taught to look for the name, and they do; and people are not apt to be deceived by similar packaging with a different brand name or bearing none at all. There was a case a long time ago, White, Hudson v Asian, 1965, where the court held that it was passing off merely to use a red-coloured wrapper for wrapping cough sweets; but it was in Singapore at a time when many customers could not read the European names printed on the rival wrappers. The evidence was that the claimant’s sweets were known and asked for simply by words meaning ‘red paper’ cough sweets. It wouldn’t happen now. In Reckitt & Colman v Borden, 1990, the claimant, who sold Jif lemon juice in a plastic lemon carrying a loose neck label, were able to prove that the defendant’s plastic lemon would deceive customers, even though it also carried a loose but different label. The case was exceptional, however. The claimant was able to prove that although customers did not bother to look at the label, they did care about the make of lemon juice – they wanted Jif. (An American judge with the improbable name of Learned Hand once put the point this way: ‘What moves the customers to buy?’) The claimant was also able to prove actual deception. (It stationed solicitors behind refrigerators in supermarkets on Pancake Day who waited until a shopper picked the defendant’s lemon, and then asked them what product they thought they had selected.) Despite some predicting that this plastic lemon case would spawn many more passing off actions, this has not transpired. It remains the fact that get-up cases are rare precisely because most people do read the labels on most things. Similarly, although registered trade mark law has spawned a variety of attempts to protect product shapes by trade mark registration, applicants struggle to demonstrate that consumers look for the shape or get-up of the product alone (e.g. Nestlé v Cadbury, 2017 – shape of a four-fingered KitKat bar; London Taxi Company v Frazer-Nash, 2017 – shape of a London black cab). One get-up case which did buck the trend is Numatic v Qualtex, 2010. Here, the claimant – the manufacturer of Henry, the anthropomorphic, bowler-hatted vacuum cleaner – was able to prevent the defendant from imitating the product’s overall shape based on passing off after registered design protection had expired. As in the Jif lemon case, the claimant’s success is attributable to the specific facts. Even though the defendant intended to differentiate their cleaner by applying a brand name, as customers did not know who made Henry, this was unlikely to dispel confusion as to whether the source of both products was the same. More recently, the manufacturer of designer shapewear WR.UP jeans (which claim to ‘smooth, shape and sculpt’ the wearer) was able to satisfy a judge

‘Badges’ and Reputations  127 that it enjoyed goodwill in the get-up of the rear of the jeans, embodied in the particular shape, cut, seams, etc., because these ‘rear branding elements’ were readily recognisable and more prominent than the conventional trade marks. He had no hesitation in finding that the makers of an ‘obvious rip-off ’ copy were passing off, Freddy SpA v Hugz, 2020.

Business Names Many passing off actions have been concerned with business names. Actions about business names are much like actions about trade marks: the claimant has to show, on the one hand, that people have come to associate the name in dispute with them and, on the other, that the defendant’s version of it is misleadingly similar. In judging similarity, it is particularly important to have in mind what sorts of customers are concerned, and this may depend on use of the name in advertising. If the claimant’s or defendant’s name is merely used as a company name in dealings with other companies and so on, it may remain unknown. In HFC Bank v Midland Bank, 2000, HFC tried to stop the Midland Bank from changing its name to HSBC. It failed because it could not show that someone with whom HFC had achieved brand name recognition would be deceived by the use of HSBC.

Exceptional Cases Where Confusion is Tolerated In certain special cases, the law accepts as inevitable a certain amount of confusion, and the court will not interfere so long as the defendant does nothing dishonest and nothing to make matters worse. The following are examples.

Use of Own Name There is no absolute right to trade under one’s own name, especially where the public are likely to be misled by such use. Individuals have a limited right to use their own name in business, even though they have a surname that is better known in the relevant trade as the name, or mark, of someone else. But a person who takes unfair advantage of the fact that they possess such a name will be restrained from doing so. The case reports record far more instances where courts have prevented use of a person’s own name than cases where the court has let them go on. An established company may claim a right to trade under its name too, very much as an individual may; but if a new company is formed with a name that is confusingly similar to that of some other business, the court will usually order it to change that name. Readers needing further warning of the dangers of assuming a right to trade under one’s own name may care to look at Wright’s case, 1949 (for soap), Parker-Knoll v Knoll International, 1962, Dunhill v Sunoptic, 1979, Asprey & Garrard v WRA, 2002 and Cipriani, 2010.

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Descriptive Names and Marks Those who choose to carry on business under a name which does little more than describe their activities cannot complain if others do the same, and must tolerate quite small differences between their trading name and those of other people. Thus, in Office Cleaning Services v Westminster Window, 1946, a case between rival office-cleaning companies, it was held that the names Office Cleaning Services and Office Cleaning Association were not too close. In the same way, those who claim words which are apt descriptions of the goods, such as ‘oven chips’, can’t complain if others describe their goods in similar terms, McCain v Country Fair, 1981. But in all these cases, the court will intervene if the defendant is dishonest, or the mark is likely to have been selected knowing that it might deceive. A defendant who is trying to get their goods or business mistaken for someone else’s will find the court very ready to believe that they have succeeded. This was a factor in the success of a claim brought by the Ukulele Orchestra of Great Britain against the United Kingdom Ukulele Orchestra, UOGB v UKUO, 2015. Not only was there evidence of a large number of instances of confusion arising, but it was shown that at the time that UKUO adopted its name, it knew of UOGB and knew (or should have known) that confusion between the two was likely.

Marks that the Public Treats as Descriptions Special difficulties arise with those very well-known trade marks that the general public treats as merely the generic name of the article concerned. A customer asking an ironmonger for a new ‘Yale lock’ may be wanting one made by the Yale people themselves, but equally may just be wanting an ordinary pin-tumbler cylinder lock, without caring by whom it is made. There may be genuine confusion between the customer and the shop assistant as to which is meant; or a dishonest shop assistant may use the ambiguity as an excuse to supply a substitute. In Cellular Clothing Co v White, 1953, for example, the case hinged on a number of trap orders made by agents of the claimant. They went into the defendant’s shop and asked for Aertex goods, but were sold those of another manufacturer. However, some members of the public used ‘aertex’ merely as a description of a particular type of fabric. So, the trap orders did not show that the customers were not getting what they asked for. Similarly, where a former trade mark had become descriptive, adding the word ‘Genuine’ to it does not turn it back into a trade mark again (‘Genuine Staunton’ for Staunton-pattern chessmen, Jacques v Chess, 1940), whilst, on the other hand, use of someone else’s trade mark is not made permissible by adding the word ‘type’. A Scottish judge once described ‘genuine’ as almost as sinister in significance as ‘type’, Harris Tweed, 1964.

‘Badges’ and Reputations  129

‘Extended’ Passing Off It is just as misleading to say, untruly, that goods come from a particular area – as with ‘Scotch whisky’ or ‘Parma ham’ – so as to use the wrong trade mark on them. In such cases, any trader who has a legitimate claim to use the place name concerned may sue the trader who misuses it for passing off. By way of example, successful claims where the courts effectively have protected against misuse of descriptions of a product have been brought in relation to champagne (Spanish Champagne, 1960), Swiss chocolate (Chocosuisse, 1999), and Greek yogurt when used for yogurt made in upstate New York (Fage v Chobani, 2013). But some place names, and especially anglicised place names, may become so broadly descriptive of a type of product that the public has ceased to think the use of the place name means the product necessarily comes from that place, e.g. cheddar cheese. Nevertheless, where the public expects goods bearing the description to possess certain qualities, or to be made in accordance with certain techniques or to a particular recipe, then whilst anyone who genuinely makes his product that way may use the mark, its use on the wrong sort of goods may still be passing off. So, courts have held that Advocaat denotes a drink made with fresh eggs and brandy, and so should not be applied to a drink made from powdered egg and fortified wine, Erven Warnink v Townend, 1979. Similarly, using the name Vodkat for a spirit-based drink which had only half the alcohol content of vodka was held to be passing off, Diageo v Intercontinental Brands, 2010. In these sorts of cases, the goodwill in the name is shared by the producers of the goods and any one of them can sue to protect that goodwill. There may be intermediate cases in which the meaning of a geographical term or other description may depend on context. Thus, it has been held that ‘champagne’ necessarily connotes wine (of a particular sort) from the Champagne district of France, and that its use for similar Spanish wine could not be justified, even if it is expressly labelled ‘Spanish champagne’. So also with ‘elderflower champagne’ (though some think this was overprotective). ‘Sherry’ was for some years ambiguous. Following a decision on passing off, the position was that it could only be used alone for wine (of a particular sort) from the Xérès region of Spain, but ‘British sherry’ was allowed only because it had been used for 100 years. Now, ‘British sherry’ is not allowed at all. Like many wine names, sherry now also has protection as a PDO (see Chapter 14). Likewise, while ‘Cornish pasty’ was once widely seen by many as a generic term covering any ‘pasty’, this name now has PGI protection: its use is limited to pasties originating from Cornwall, and including specific proportions of beef and particular vegetables (no carrots or peas!). In all these cases, the class of people who genuinely use the mark lose trade to the person who falsely uses it. A logical extension of the rule includes cases where the claimant uses some official approval mark to indicate compliance with certain product regulations and the defendant falsely uses such a mark to indicate

130  Passing Off he complies too. In principle, the courts ought to hold that to be passing off, but it would be important to prove the facts and define what you want to stop. Recently, the British Amateur Gymnastics Association (BAGA), which operates as British Gymnastics, failed to do that in a passing off claim against a company trading as UK Gymnastics, which ran gymnastics courses and competitions on a commercial basis – although the business name seemed to suggest that it might be a national governing body of the sport. It is important to note that the trade mark system may apply in this field too. In fact, BAGA did succeed on infringement of registered trade marks, BAGA v UK Gymnastics, 2021. Not only may ordinary trade marks apply, but collective and certification trade marks (see Chapter 14) are well suited to protect shared and collective names and badges.

Odd and Unusual Instances Where the Claimant Does Not Trade There can be passing off even though there is no trade or business in the ordinary sense concerned; thus, the professional institutions can (and now and again have to) sue both people who put letters after their names so as falsely to pretend to have a professional qualification and people who form societies with similar initials so as to give members something they can put after their names. There have been passing off actions about noms de plume as well as about the titles of books and plays. But there has to be some sort of business connection, in a wide sense, between the claimant and the sort of thing the defendant is doing to satisfy the court that there is a real likelihood of the claimant suffering some sort of damage to their business interest if the defendant’s actions continue. Thus, the late Mr Stringfellow, a legendary nightclub owner, failed to stop a food company calling its long, thin frozen chips Stringfellows because the court thought that he was not really suffering damage, Stringfellow v McCain, 1984, and the founder of a small, local political party called the Social Democrats could not stop the use of that title by the later, more famous, party, Kean v McGivan, 1982. Over the last 50 years, there have been a number of cases concerning ‘merchandising rights’ in popular characters. They tend to arise in the following way: a manufacturing organisation takes a well-known film, television or radio personality – real, fictional or even mythical – and exploits the character’s popularity to advertise and sell their goods. The question arises: can the character concerned (or, in the case of fictional characters, their creators) take action to prevent such exploitation? Again, the answer turns on whether a reasonable person would think that there was any business connection between the claimant and the defendant. Thus, the court refused to restrain a builders’ skip hire business from using the name of fictional litter-picking creatures living under Wimbledon Common, Wombles v Wombles Skips, 1975. In Taverner Rutledge v Trexapalm, 1975, a lollipop manufacturer who

Odd and Unusual Instances  131 had taken a franchise to use ‘Kojak’ – the name of a TV detective with a penchant for lollipops – was enjoined from using the name at the suit of a rival, but unlicensed, manufacturer who had already built up a reputation selling lollipops under the name. Some years later, in Mirage Studios v Counter-Feat, 1991, a case involving Teenage Mutant Ninja Turtles, it was held arguable that a defendant who sold T-shirts with pictures reminiscent (but not enough to infringe copyright) of the cartoon turtles was passing off. Here, the court said that most people expected this sort of thing to be licensed, and so ‘non-genuine’ goods would deceive the public. What may have been overlooked, however, is that the public were probably not interested in whether or not there was a licence; what they wanted was what they got: a T-shirt with the design in question. A different situation may arise in a case involving an endorsement, as opposed to a merchandising, where the defendant uses a celebrity’s name or image to promote their business. In this type of case, the manner of use of the celebrity’s name or image might give the impression that the celebrity recommends or approves the product (particularly if the celebrity in question has previously endorsed products). Where the public may well be misled in this way, the celebrity would be entitled to prevent such use as passing off. This was the outcome when a radio station used a photograph of the well-known racing driver, Eddie Irvine, on the front of a brochure in a move to promote advertising opportunities on the station, Irvine v Talksport, 2002. The photograph, used without his permission, had been manipulated to show Mr Irvine listening to a radio, prominently marked with the radio station’s name. The judge held that a significant proportion of recipients of the brochure would have thought that Mr Irvine had endorsed or recommended the radio station. The Court of Appeal agreed. More recently, in Fenty v Arcadia, 2015, the Court of Appeal upheld a claim for passing off brought by the singer Rihanna against clothing retailer Topshop. The shop had produced a T-shirt which featured a photograph of the singer, obtaining the photographer’s, but not the singer’s, permission. The court emphasised that use of an image of a person, such as on a garment, was not of itself passing off (celebrities do not enjoy a general right to control the use of their image within the UK), but in this case the singer was able to demonstrate that she already ran an established merchandising and endorsement business, and had previous business dealings with Topshop. The misrepresentation was that Rihanna was associated with the T-shirt in some way. This perceived involvement made it more attractive to her fans, and so played a material part in the public’s decision to buy it.

Other Odd Instances The ordinary case of passing off concerns the sale of goods in such a way that purchasers will be deceived or confused as to whose goods they are. But there can be passing off even where the goods come from the right manufacturer: by selling second-hand goods as new, spoilt goods as sound or lower-priced goods

132  Passing Off as superior ones. There can also be passing off where sellers are confused as to the identity of the buyer instead of the other way round. It might even be passing off where the defendant’s name cannot be objected to, and it is his address that is confusing. A single case illustrates these last two possibilities, Pullman v Pullman, 1919. The defendant, a former director of the family firm, had many years later set up on his own, under his own name. He subsequently altered the name of his house to resemble that of one of the claimant’s factories (in itself, probably legitimate: it is not passing off to call a private house by a name confusingly similar to that of someone else, so long as no business is involved). However, he then moved his business office to his house, and wrote from that address to people who had been supplying the claimants with materials, offering to buy from them. That was passing off. Another odd case is illustrated by a dispute involving conservatories. Here, the defendant’s sales team showed photographs of the claimant’s conservatories to potential customers, claiming falsely that the images were examples of their own designs and quality of workmanship. This was also held to be what become known as ‘reverse’ passing off, Bristol Conservatories v Conservatories Custom Built, 1989. Likewise, labelling bottles containing Scotch whisky as ‘Welsh whisky’ was found to be, arguably, passing off, Matthew Gloag v Welsh Distillers, 1998.

Suing for Passing Off Most actions for passing off follow one of three patterns. In the first, the claimant, on learning of the passing off, acts at once and starts an action, immediately applying for an interim injunction to stop the defendant’s activities temporarily, until the case can be brought to trial. It takes about a month for the parties to prepare written evidence from a few important witnesses and bring the case in front of a judge, who decides on the spot whether the case justifies a temporary injunction or not. By that time, both parties know enough of the strength of the other side’s case to work out which way the full trial is likely to go, so there is generally no point in actually fighting the action any further. In the second type of case, the claimant acts quickly, but either does not ask for or perhaps cannot obtain an interim injunction. Instead, the court may order a so-called speedy trial – that is, a trial within a few months – rather than the more usual 12–18 months which most cases take to come to trial. The case will still require the considerable preparation involved in a full trial, as to which see below, though with less time to do it in, but the advantage for both sides is that the matter will be resolved quickly and, at least in theory, before the dispute has caused significant commercial damage. The third type of case goes something like this. The claimant does nothing for months, or even years. When action is finally commenced, it is of course too late to ask the court for an interim injunction or speedy trial, since the delay was

Suing for Passing Off  133 the claimant’s own fault. As there is no way the parties can accurately assess each other’s cases, or see how the matter looks to a judge, the dispute proceeds to trial. At the trial, the claimant must prove, by evidence from those concerned with the trade, how well known their business or their goods are and how confusing whatever the defendant is doing is. The defendant locates witnesses who have never heard of the claimant; and/or witnesses who have become accustomed to the two parties trading under similar names/marks (or whatever identifier the dispute is about); and/or witnesses who are too alert to be confused by any state of affairs worth arguing over at all. Such trials are long and expensive, and the outcome will be uncertain. Furthermore, while the parties are awaiting trial, the trade and public probably have got used to distinguishing between the two businesses or trade marks – so that what was passing off when it started may have ceased to cause serious confusion by the time the case comes to trial. The moral is obvious. And it is true not only for passing off, but for registered trade marks too. One author put it this way when sitting judicially: ‘It was in 1879 that James LJ observed that “the very life of a trade mark depends on the promptitude with which it is vindicated.” Nothing has changed. Like gardens, trade mark cases always get worse with neglect – even if rights are not actually lost, delay is apt to turn what would be over in a few weeks by a quick application into a mini State Trial’, Phones 4U v Phone4U.co.uk Internet, 2004.

16 Malicious Falsehood and Other Actions Introduction This chapter deals with other proceedings which may involve trade marks or otherwise overlap with actions for trade mark infringement and passing off. We first look at a different sort of unfair competition, known as malicious falsehood. We then look at disputes involving domain names and company names which might also be trade marks. Finally, we look briefly at the rules concerning advertisements and the complaints process of the Advertising Standards Authority.

Malicious Falsehood Malicious falsehood (also known as trade libel, slander of goods, slander of title or injurious falsehood) consists of injuring someone else’s business by making, with ‘malice’, a false statement to a third party. Malice is satisfied if the statement is made either with knowledge of its falsity or recklessly without caring whether it is true or not. Proving this is seldom easy. Generally, the statement must be so false that the defendant cannot reasonably have believed to be true. The claimant must show financial loss, or the real risk of it. Because of the difficulty in proving malice, cases of malicious falsehood are rare. They have become even more so since the Trade Marks Act 1994. Trade mark infringement provides a cause of action in cases where the statement made by the defendant makes use of the claimant’s registered trade mark and causes detriment to it without the claimant needing to prove any ill intent (see Chapter 10). Accordingly, where a claimant can rely upon trade mark infringement it will usually be a waste of time and money to include a claim of malicious falsehood (as the court held in Cable & Wireless v BT, 1998). The law of malicious falsehood will still be relevant in some cases, for example, where the claimant does not have a registered trade mark or where the defendant has not referred to the claimant’s registered trade mark. It is best seen by considering a few examples.

Riding v Smith, 1876 The false statements concerned need not relate directly to the business. This was a case where the claimant’s trade decreased because of rumours that his wife, who

Malicious Falsehood  135 served in his shop, had committed adultery. It was held that this was good ground for an action.

Hayward & Co v Hayward & Sons, 1887 The defendant, having brought a passing off action against the claimant and lost, issued advertisements making it look as if they had won. The claimant successfully sued in malicious falsehood to get these advertisements stopped.

Mentmore v Fomento, 1955 The defendant had sued a third party for infringement of patent and had won, but there was an appeal from the decision to the House of Lords still on foot and no injunction was in force pending appeal. The defendants thought Selfridge’s store was selling a product infringing the same patent. Its solicitor approached Selfridge’s at a critical moment for Christmas trade and told them that unless the product was instantly removed from sale ‘there will be a little court job again’, implying that an injunction would be granted if the store did not comply. In fact, the defendant knew very well that until the appeal had been decided, they would get no injunction against other infringers. An injunction was granted to stop the defendant telling people about their successful patent action without disclosing the full facts.

De Beers v General Electric, 1975 The claimant and the defendant both made abrasives from artificial diamonds. The defendant had circulated a pamphlet to prospective customers purporting to show, by the results of scientific tests, that the claimant’s products were inferior to those of the defendant. The defendant sought to have the claim struck out as disclosing no reasonable cause of action, but the court held that there is a point at which mere ‘puffing’ turns into denigration of the rival’s goods and a claim becomes actionable. Whenever a reasonable person might consider that an untrue claim was being made seriously, and with malice, then the claimant disclosed a reasonable cause of action.

Compaq v Dell, 1992 Dell’s advertisement showed pictures of computers in pairs, one of theirs paired with one of Compaq’s. Under each was a price and the accompanying text said that the computers were ‘basically and essentially the same’. The judge held they were not, and granted an injunction. This sort of comparison involves a question

136  Malicious Falsehood and Other Actions of degree (for instance, in one case, the Compaq computer had 50% more memory than the Dell it was paired with). Had the difference been less marked, the defendants might have succeeded with only a slightly unfair comparison.

DSG Retail v Comet Group, 2002 The claimant and defendant were electrical retailers. The claimant began a series of promotions, the first offering discounts of 10% off ticketed prices for selected goods and the second offering to beat the defendant’s price by £10 for any product over £300. The defendant retaliated by using posters at its stores stating: ‘Today and everyday Comet prices will be lower than local competitors … We even beat competitors’ 10% off and £10 off weekend promotions.’ The judge held that, read as a whole, the public would understand the defendant’s posters to mean that the defendant’s ticketed prices were invariably less than the claimant’s promotional prices. This was false, since the defendant would only charge a lower price when challenged by a customer. The judge dismissed the defendant’s argument that the public would understand the statements on the posters as a mere puff, and granted an injunction.

Conclusion Enough examples have been given to show the nature of this sort of action. It must not be assumed that claimants would always win such actions; traders are apt to say that other people’s goods are worse than theirs, and even where such statements are demonstrably false a judge will not necessarily decide that they are dishonest. Furthermore, interim injunctions are very rarely granted in these cases when defendants intend to argue at trial that what they said was true, as seen in Bestobell v Bigg, 1975. Here, a decorator painted a house on London’s busy South Circular Road brown, but the brown paint started to turn green, with hideous effect. They said the paint was no good, but the paint company said it had been mixed and applied incorrectly. To make their point, the decorator put up a large notice for all to see saying ‘This house was painted with Carson’s paint’, clearly implying the paint was indeed no good. An interim injunction was refused because the defendant intended to justify his assertion at trial. The Compaq case was an exception to this rule, as the judge found no jury could reasonably conclude that the statement was true. Litigation is always uncertain, however, and it is wisest not to do anything that can result in an action reaching a court. The safe rule is to avoid making disparaging statements about a rival business or its products – especially one using a rival’s trade marks. It should not be forgotten that if such statements hurt anybody’s feelings, an expensive libel-type action may result. Curiously, the feelings of limited companies are rather easily hurt.

Domain Name Disputes  137 There is another problem with cases of this kind. Usually a defendant has said something about a claimant’s goods which the defendant regards as unfair. Such cases therefore provide a forum for inviting the court to compare rivals’ products to determine whether the respective claims made for them are correct. Thus, in Electrolux v Dyson, 1999, the court was essentially asked to rule on the suction and dust pick-up characteristics of Dyson vacuum cleaners as compared with their Electrolux rivals – a kind of Which! magazine test by malicious falsehood litigation. In that case, the court sent both companies home with fleas in their ears, having held that neither side had been quite fair about the other in their consumer advertising.

Domain Name Disputes ‘Cybersquatting’ sprang up as soon as the internet started to become popular for business use. A cybersquatter registers domain names that it anticipates a large corporation might want to use. It then approaches that business offering to sell the registrations for large sums, usually with a thinly veiled threat that if the company does not pay, the names might fall into the hands of others. Two mechanisms have been developed to deal with this. The first is suing for infringement of registered trade marks (and possibly passing off). The primary advantages of going to court is that firm, readily enforceable relief can be obtained, and generally very quickly. Thus, Marks & Spencer stopped a cybersquatter who had registered, as domain names, numerous variants of ‘marksandspencer’, Marks and Spencer v One in a Million, 1998. However, this approach is not cheap, and even a costs order in favour of the trade mark owner may not, in practice, be enforceable. The second procedure is to invoke a special domain name dispute resolution procedure, which is much less expensive and can be quicker. ICANN (the Internet Corporation for Assigned Names and Numbers) is the organisation that oversees the domain naming system and is responsible for accrediting the registries which allocate the domain names (Verisign, for example, is the registry for ‘.com’ domain names, while Nominet oversees ‘.uk’ domains). ICANN has developed its Uniform Dispute Resolution Process (UDRP), which has been adopted by many registrars. Nominet has a similar dispute resolution service. The contract formed between registrar and registrant when a domain is registered binds the registrant to the dispute resolution process. Broadly, if the trade mark owner files a complaint, the registrar will take action where: (i) a registrant has registered a domain name which is identical or confusingly similar to a trade mark in which the complainant has rights; (ii) the registrant has no rights or legitimate interests in respect of the domain name; and (iii) the registrant’s domain name has been registered and is being used in bad faith. There are some well-recognised indicators of ‘bad faith’. It will be found, for example, where it appears that the domain name was acquired primarily for the

138  Malicious Falsehood and Other Actions purpose of selling it to the complainant, or to a competitor of the complainant, for a sum well in excess of out-of-pocket costs associated with registration. A bad faith claim will be bolstered if the registrant has a previous history of such conduct. It is bad faith to register a domain name primarily for the purpose of disrupting a competitor’s business. It is also bad faith to use a domain name intentionally to attempt to attract internet users to a particular online location by creating a likelihood of confusion with the complainant’s mark. If a complaint is successful, the offending domain name will either be cancelled or transferred to the complainant. The websites of ICANN (www.icann.org) and Nominet (www.nominet.uk) both offer comprehensive guidance to their procedures.

Company Name Disputes The Company Names Tribunal (CNT) was established in 2008 to provide a cost-effective procedure for brand owners wanting to challenge registration of a company name because it is too similar to a name or mark in which they have goodwill or a reputation. A company name may be challenged before the CNT where it is the same as a brand of the complainant or sufficiently similar such that ‘its use in the UK would be likely to mislead by suggesting a connection between the registered company and the brand owner’. To succeed, the brand owner must demonstrate that the registration of the company name is ‘opportunistic’. The type of ‘bad faith’ behaviour discussed above in relation to domain names is likely to be opportunistic. Another example is a speculative registration which is the combination of two existing company names on hearing rumours that the two companies are in merger talks. A registrant will be able to defeat the challenge if they can demonstrate that it is already operating under the name and has incurred substantial start-up costs. There is also a defence that the name was adopted in good faith, or the company name was registered before the complainant had established any goodwill. The outcome is decided by an adjudicator, who is also a hearing officer at the UKIPO (and so experienced in deciding trade mark cases). Adjudicators consider the submissions and evidence of the parties, and then determine whether the company name should be changed. In the first decision that the CNT issued in December 2008, the adjudicator upheld the complaint of The Coca-Cola Company Limited against Coke Cola Limited – a choice of name which would be difficult to defend! Indeed, the vast majority of complaints filed at the CNT are undefended, and even those where the registrant does file a defence tend to be decided in favour of the brand owner. This suggests that the CNT route will often be a good alternative to trade mark infringement proceedings where a clear case of opportunism can be made out. However, it is less suitable for disputes over names which are less clear-cut – for example,

Advertising Standards Controls  139 where the registrant has already been trading for some time, or where there is a genuine dispute concerning who has the best claim to the name. In 2019, BMW relied upon classic trade mark infringement and passing off to challenge the registration of BMW Telecommunications Limited as a company name by its sole director, a Mr Benjamin Michael Whitehouse, BMW v BMW Telecommunications, 2019. Although he had only used the company to invoice one customer for railway communication consultancy services, this use might have been enough to provide him with a defence under the CNT procedure. However, the court, applying the principles of One in a Million, held that the registration of the name in itself amounted to a false representation that the company was connected with BMW.

Advertising Standards Controls As we said earlier, a business on the wrong side of a misleading comparative advert can challenge it by suing for malicious falsehood. And if a registered trade mark is involved, then the use may also amount to trade mark infringement, as discussed in Chapter 10. There is also an extrajudicial system provided by the Advertising Standards Authority (ASA), the UK’s independent regulator of advertising. The ASA provides an alternative forum for breaches of its Codes of Practice (full details can be found on its website: www.asa.org.uk/). While a detailed review is beyond the scope of this book, there are some general rules which advertisers should follow: adverts must be capable of objective substantiation, should not be misleading (whether by inaccuracy, ambiguity, exaggeration or omission), should not take unfair advantage of the reputation of trade marks or so closely resemble another advert that it misleads, is likely to mislead or causes confusion. Complaints may be brought to the ASA by members of the public or by competitors, or following a referral from trading standards officers. A complaint is initiated by completing an online form. (If the complaint is made by a company against a competitor, then the complaints form should only be filed after attempts have been made to resolve the issue with the advertiser directly.) The ASA assesses the complaint against its advertising codes. In some simple cases, the ASA will decide that a formal investigation is unnecessary, and instead will contact the advertiser with advice and guidance on how to resolve the complaint. In more serious cases, there will be an investigation. The advertiser can defend its advert and supply any evidence in support. The details are passed to an independent panel, called the ASA Council, to determine whether the ASA code has been breached. If it has, the offending advert must either be changed or withdrawn. The ASA can refer advertisers and broadcasters that persistently break the codes to other bodies with powers of legal enforcement, such as Trading Standards or Ofcom. It also ‘names and shames’ repeat offenders on its website.

140  Malicious Falsehood and Other Actions By way of example, the British Association of Counselling and Psychotherapy (BACP) had a complaint upheld against someone offering psychotherapy services. The individual’s website stated that she was a BACP member. Although this was once true, her membership had lapsed without renewal. The complaint was settled by removal of the offending reference. Had BACP registered its mark as a trade mark or collective mark, then the use would have also been a clear case of infringement, but the matter was no doubt dealt with more quickly and cheaply using the ASA process.

part iv Copyright and Related Rights

142

17 Introduction to Copyright Introduction Copyright was originally intended primarily for the protection of authors, artists and composers, and to provide a legal foundation for the innumerable transactions by which they are paid for their work. Copyright sits alongside what tend to be called ‘related rights’ (including moral rights and rights in performances, which we discuss in Chapter 23). Conceptually, these should be kept separate as, despite often deriving from the same or similar creative efforts, they are underpinned by different rationales as well as possessing very different terms and scopes of protection. Over time, copyright and related rights have expanded far beyond their original scope, both in terms of the subject matter protected and the extent of that protection. Here we aim to cover the whole field of copyright. Before the current copyright legislation, the Copyright, Designs and Patents Act 1988 (CDPA), copyright had been stretched so far by the courts that it gave a very long period of protection (the life of the author plus 50 years) to industrial designs for even the simplest articles. The CDPA restricted copyright protection for industrial designs, replacing it with an unregistered design right, such that ‘full’ copyright only applied to prevent others making such articles in certain special cases – for example, where the original work was a work of artistic craftsmanship. But while UK legislators were cutting back protection, legislators in the European Community (as the EU was then called) were busy extending it, in the name of harmonisation. These harmonisation Directives have had an important influence on UK copyright, and have resulted in significant amendments being made to the law. That said, many of the underlying principles of copyright have remained largely undisturbed and the courts regularly refer to the old cases for help with new problems. Other aspects of copyright law have, with the additional assistance of the Court of Justice of the CJEU, become unnecessarily complex.

The Nature of Copyright The primary function of copyright is to protect the fruits of a person’s creative efforts from exploitation by others. As with the other forms of IP, copyright is only a negative right, i.e. a right to prevent others doing certain things that fall

144  Introduction to Copyright within the copyright owner’s control. However, in contrast to patents and other registered IP rights, a crucial ingredient of copyright infringement is a derivative link (copying – directly or indirectly) between the copyright work and the alleged infringement. It is an infringement of copyright to reproduce, for example, any ‘literary, dramatic, musical or artistic work’ without the consent of the owner of the copyright in that work. However, even an identical works (and so apparently copied) will not infringe if independent creation can be proved. Copyright protects ‘works’, not ideas. If ideas can be taken without copying a ‘work’, the copyright owner cannot interfere. This distinction is, however, difficult to draw, both theoretically and practically. Here is an example. If a photograph is taken of a landscape, that photograph will be protected by copyright: good or bad, it counts as an ‘artistic work’. It will be an infringement of copyright, subject to exceptions (see Chapter 21), if, without consent, that photograph is reproduced – either in the sense in which a newspaper would ‘reproduce’ it, by scanning it and using it for printing, or if an artist were to sit down with the photograph in front of them and make a painting of it. Nevertheless, in the latter case, there are evidently questions of degree – whilst a cubist interpretation of the photograph might in some respects be considered a copy, there are prickly questions over whether this should be seen as a reproduction (and thereby infringement) for copyright purposes. Furthermore, as a general rule, it would not be an infringement for another photographer to take a similar photograph of the same landscape: the landscape is not copyright, for the photographer did not make it (the position might be different if a scene had been specially created), and the second photograph, though using the idea of the first, would not be a reproduction of the first. The distinction between taking an idea (allowed under copyright law) and taking the expression of that idea (generally prohibited) is, even in the field of photography, a difficult one to draw, and sometimes, even with the best of intentions, the courts have simply got it wrong: see, e.g. Temple Island Teas v New English Teas, 2012. This was a case of different photos from same position of the Houses of Parliament in London. The fact that the photographer had ingeniously modified the copied photograph to be black and white save for a red London bus on the bridge should have made no difference. Only the idea of a red bus on a black-and-white scene of Westminster Bridge and Parliament was copied. Does the reader agree? An extension of this point, and a further wrinkle of copyright law, is that ‘reproduction’ has rather different meanings in different contexts – a difficulty running right through the law. Accordingly, while the CDPA differentiates between different categories of ‘works’ for some purposes, for others it lumps them all together. If we speak of one book being copied from another, this is not the same sort of ‘copying’ as occurs when (for example) a painting is made into a printing plate to illustrate a book. In fact, the copyright in a work of literature and the copyright in a painting are not quite the same sort of thing; and the copyright in a song is

Copyright, Reputations and Competition  145 again something rather different. Nor is the legal protection needed by the author or publisher of a novel really the same as that needed by the author of a song (who is mainly concerned to stop its being sung or recorded without payment) or by an architect (who is mainly concerned to ensure that anyone wanting a house such as they would design will employ them rather than a competing architect). A sculptor, furthermore, receives their main protection from the general law of property; copyright will usually be of secondary concern.

Copyright, Reputations and Competition It is not the function of copyright to protect personal or business reputations, or to prevent business or professional competition: it can sometimes be useful for such purposes, but these uses are adventitious. Thus, it is not infringement of copyright to imitate an author’s literary style or, probably, even to write a book including characters another has invented (new James Bond or Sherlock Holmes stories, for example) – though any of these things may be unlawful for other reasons, e.g. if people are misled into thinking that the original author is responsible for the imitation or perhaps if the hero’s name is a registered trade mark. Similarly, it is normally not infringement of copyright to copy another’s brand name or advertising slogans. (Here again, such acts are likely to be unlawful for reasons we discuss elsewhere.) It may or may not be an infringement of copyright to use a photograph of a respectable actor to adorn the cover of a disreputable magazine: it depends on who owns the copyright in that photograph, and whether it is a publicity photograph issued for general use. The actor’s remedy for that sort of thing may be an action for libel or for breach of confidence (if their privacy has been invaded), or (if the photograph was taken for private or domestic purposes) for infringement of moral rights (see Chapter 23). On the other hand, if in such a case the actor does own the copyright in the photograph, an action for infringement of copyright is likely to be the simplest way of dealing with the matter. So too for the brand and slogan: if these are original enough to enjoy copyright protection (CJEU case law has made it more likely that they might, as we discuss in Chapter 18), a complete advertising brochure is likely to enjoy protection as a ‘literary work’, while any photograph or drawing in it is likely to be copyright as an ‘artistic work’. Such works may be trivial from an artistic or literary point of view, but for copyright purposes they have to be very trivial indeed before they are ineligible for protection altogether, and commercially they may have great value. A trade mark may consist of a picture, and the copyright in the picture or logo might be of great value in supplementing trade mark protection. Indeed, it will go further – protecting reproduction on anything, for instance the Arsenal logo on a nuclear power station.

146  Introduction to Copyright

Types of Copyright Dispute Copyright disputes (other than disputes about industrial designs) tend to fall into three groups. There are the straightforward cases, where a substantial work such as a computer program or a film has simply been pirated. Here, it is purely a matter of using the machinery of the law to enforce clear legal rights. There are also many cases where the original work has little intrinsic value or has not been reproduced in any ordinary sense but where copyright is invoked for ulterior reasons, usually of a commercial character. In between come those cases where the work copied is a substantial one, embodying a great deal of another’s labour and effort – a fixture list or a timetable, or something of that sort perhaps – but nevertheless its value derives more from such things as goodwill or as a source of information than from the creative labour put into it. In these last two groups, the argument will be as to whether copyright law applies at all.

Copyright in Practice Although reported copyright disputes tend to fall mainly into the last two groups, the practical and commercial importance of the copyright system lies elsewhere. The main function of the system is to provide a legal foundation for transactions in ‘rights’: to provide a legal sanction behind the arrangements by which, for instance, composers are paid whenever their music is used on radio or in a film. Such matters rarely give rise to litigation. So, outside the particular industry, people are very rarely concerned with, or can even find out much about, them.

Copyright and Confidence It is not the function of copyright to prevent betrayal of confidence, whether personal or commercial. But the conditions under which English law protects confidences as such are somewhat limited (see Chapter 25). Copyright may be a valuable additional weapon. For instance, an ordinary letter may be indiscreet without being confidential, and may fall into the hands of the press without any illegality. But even a letter is a ‘literary work’ and so enjoys copyright protection to prevent its unauthorised reproduction. There may be no way to stop someone into whose hands it falls lawfully from just showing people the original without copying, but they can be stopped from making copies of it for circulation or otherwise making it available to the public. A recent example is where Meghan Markle successfully claimed that a newspaper’s publication of large sections of private letters she had sent to her father was a clear infringement of her copyright, HRH The Duchess of Sussex v Associated Newspapers, 2021.

A Short History  147

Old Copyright Works One effect of the 70-year post-mortem term is, of course, that the previous Copyright Act of 1956 is also still of major importance, since a large number of copyright works were created when it was in force by authors who died less than 70 years ago. For most purposes, any copyright that such works enjoy is governed by the present law; nevertheless, questions of whether the works have lost copyright protection (or whether they had it in the first place and, if so, who owns it) may depend on the law applicable when they were created. Such cases are not common enough to justify detailed discussion here. A good working rule is that if a work had copyright before 1 August 1989, its copyright continued after that date, lasting until the end of the 70th year following the author’s death.

A Short History Copyright was originally intended to protect authors, artists and composers, not industrial designers or engineers. The first real Copyright Act, the Statute of Anne of 1709, gave authors of books the sole right and liberty of printing them for a term of 14 years. Before that, the Crown assumed a royal prerogative of granting licences to printers. They were highly profitable for the Crown, and also afforded an opportunity to keep printers of seditious material in line. In the early sixteenth century, decrees of the Star Chamber were used to keep printers in check. There were common law rights which gave authors (and, of course, the Crown, which never turned down an opportunity for profit) a limited right to share damages from book pirates. ‘Books and other writings’ under the Statute of Anne were held to include musical compositions, Bach v Longman, 1777, and dramatic compositions, Storace v Longman, 1809. In the former case, JC Bach sued the publishers for reproducing harpsichord and viol di gamba sonatas. Lord Mansfield said: ‘A person may use the copy by playing it; but he has no right to rob the author of the profit by multiplying copies and disposing of them to his own use.’ This is an early instance of a recurring theme in copyright law: if something is worth copying, it is worth protecting. That principle has heavily influenced the courts and Parliament ever since. There were further Copyright Acts in 1814, 1842, 1911 and 1956, as well as Acts dealing with specific aspects of copyright, such as the Engraving Copyright Act 1734 (the introduction of which was largely influenced by Hogarth), the Sculpture Copyright Act 1814 and the Dramatic Literary Property Act 1833. The period and scope of protection was extended with each passing Act, since the lobbying power of persons with the most to gain from extended copyright protection (more often publishers than authors) usually outweighed that of consumers who had the most to lose from it. The Berne Convention – one of the main international treaties on copyright – accordingly now provides for a minimum period

148  Introduction to Copyright of life of the author plus 50 years. The UK copyright term (in the main, life of the author plus 70 years) derives from an EU Directive of 1993. It then went up to life plus 70 elsewhere too, e.g. the USA. The reader may ponder whether adding 20 years to the Mickey Mouse or Picasso copyrights was a good or a bad thing. The object of the current legislation, the CDPA, was to ‘restate’ copyright law. In fairness, it is probably impossible to make a simple statutory code which deals with something as complex as creativity and its commercial exploitation; nevertheless, the CDPA takes statutory obfuscation to new levels. The Act was also intended to serve as the law for the twenty-first century. That, too, has not proved possible. The Act has been amended in lots of ways, including to deal with extensions to copyright term, to cope with the problems of reverse engineering in computer software and to implement various requirements of EU Directives. The Act as now exists resembles a somewhat tattered cardigan, with holes, new buttons and patches strewn across its previously pristine knit. Despite its complexity, the basic principles of copyright embodied within it have remained unchanged for nearly 250 years.

18 Works: The Subject of Copyright Works: A Closed List The basic rules for UK copyright are in the Copyright Designs and Patents Act (CDPA) 1988, as amended (a lot!). The Act draws a broad distinction between what copyright people call ‘authorial works’ (literary, dramatic, musical and artistic works) and ‘entrepreneurial works’ (sound recordings, films, broadcasts and the typographical arrangement of published editions). Whether authorial or entrepreneurial, it is worth noting that copyright can only exist if the thing created is acknowledged as protectable under the Act. A closed list of ‘works’, some of which have definitions, is found in the CDPA. It is therefore not enough to say ‘I used artistic skill in creating this and so this is subject to copyright’ if the ‘this’ is not on the list. So, for instance, a Star Wars stormtrooper helmet was held not be ‘sculpture’ and so was incapable of attracting copyright, Lucasfilm v Ainsworth, 2011. The closed list is so important that it is worth illustrating more. For instance, it will be an infringement of copyright to film a play without consent, but not to film a dog show or a boxing match: the first is a ‘dramatic work’, the others are not, for nobody has composed or arranged precisely what happens at them. If the promoters of such spectacles want to prevent photography, they must do it in some other way – such as by only selling tickets to people who agree not to take photographs. So, also, a card-index system is not copyright; nor is a game, though the writtenout rules of the game will be (as a ‘literary’ work), and so may the design of the game board. Thus, a person who devises a new game may be able to prevent other people copying the board or rulebook. A collection of five-letter code words was held to be a protected ‘literary work’ (skill was needed in selecting the words so as to guard against errors in transmission), but not a system for coding the wholesale prices in a catalogue: however ingenious a system, and however successful in concealing the retail profit from customers, it was a mere scheme and not a ‘work’. The written instructions for decoding the prices would be copyright: but that copyright would not be infringed by a competitor who wrote his own instructions, quite independently. Similar issues arise in respect of the question whether copyright as a ‘dramatic work’ can attach to the spectacle that evolves as one plays a computer game. The court has said no – the spectacle is not one of the types of work in the Act and, in particular, is not a ‘dramatic’ work, the latter being something capable of being performed, Nova v Mazooma, 2006.

150  Works: The Subject of Copyright The Act, as noted, has an exhaustive list, and definition, of ‘works’. Authorial works include: ‘literary works’, defined as ‘any work, other than a dramatic or musical work, which is written, spoken or sung’. Such things as novels, lectures, addresses, poems and speeches are obviously included. The Act also specifically says that tables, compilations, computer programs and databases are ‘literary works’. ‘Dramatic works’ obviously includes plays, scripts for films, dance and mime (‘film’ itself is also a work, but of a different category). ‘Artistic works’ include ‘graphic works’, e.g. paintings, drawings, engravings, photographs (and similar things, such as photo-lithographs and holograms) and sculptures. Works of ‘artistic craftsmanship’ and works of architecture also count as ‘artistic works’. Scores, tunes and melodies are all ‘musical works’. Records, CDs and other devices for reproducing sounds are all ‘sound recordings’; sound and television broadcasts are ‘broadcasts’; and the typography of books is included in ‘typographical arrangement of published editions’ (which protects publishers of new editions of out of copyright from facsimile copies of the new edition).

Merit, Originality and Substance In general, works are protected regardless of merit. Bad plays or paintings get the same protection as great ones. Things as mundane as TV listings, ITV v Time Out, 1984, a tune of four notes Lawson v Dundas, 1985, and drawings of simple machine parts, British Northrop v Texteam, 1974 have all been protected under copyright in the past. However, authorial works (‘literary’, ‘dramatic’, ‘musical’ and ‘artistic’ works) must be ‘original’ to enjoy copyright protection. ‘Original’ means not entirely copied from another work – the work must ‘originate’ from its author. So, for example, in Interlego v Tyco, 1989, there was no new copyright in what was effectively a tracing of an old drawing. For certain works, the nexus between an author and their purpose in creation is stronger still. Therefore, the intention of the creator was decisive to whether or not the work was a ‘sculpture’ in Lucasfilm, above. For entrepreneurial works (‘sound recordings’, ‘films’, ‘broadcasts’ and the ‘typographical arrangement of published editions’), the standard is subtly different: copyright is said not to subsist to the extent that they are a copy of a previous work of the same type. ‘Works’ must also be substantial enough to deserve the name, though here, again, the standard is not high. They must also not be utterly ephemeral: accordingly, whilst spoken words fall within the definition of ‘literary work’, copyright will not subsist until they are recorded in some material form.

Triviality In some disputes, the main issue is sometimes whether the copied work embodies enough ‘skill, labour and effort’ (or now, intellectual creativity) to be called ‘original’.

Works: A Closed List  151 Because this involves a matter of degree, borderline cases are apt to be unpredictable: one judge could go one way, another the other. And the relative merits and morals of the parties may affect the decision. Nevertheless, it is possible to give some idea of the probability that a particular ‘work’ will be held to have copyright. One way of approaching the question of where to draw the line is to say that ‘anything worth copying is worth protecting’. In many cases, this is a useful rule of thumb, but the difficulty of drawing it tends to be most acute just in the sort of case where the rule is not applicable – in those commercial cases where something has been copied, not really to avoid the trouble of producing something similar, but for extraneous reasons. The most that can be said with certainty is that any sort of drawing may be held to have copyright; that even a few bars of music may have copyright; and that short literary works, such as limericks or haiku, will not be deprived protection on the mere count of simplicity. Nevertheless, the dividing line between original works and those that do not attract copyright because the author’s input is below the de minimis level is fiendishly difficult to divine. Accordingly, whilst the title of a song – The Man Who Broke the Bank at Monte Carlo – was held not to enjoy protection as a literary work, Francis Day & Hunter v 20th Century Fox, 1940, more recently the court has stated that some newspaper headlines may do, Meltwater Holdings v NLA, 2011. Nevertheless, a single word is not enough to be a ‘literary work’ even though it was novel and lots of effort went into coining it, Exxon, 1982. Although merit is not necessary, a composition that is striking (‘original’ in the ordinary, as distinct from the copyright, sense) is more likely to be protected than a commonplace composition of the same length. Even so, short business letters and newspaper advertisements have been held to be original literary works, notwithstanding being devoid of signs of literary skill.

Updated Works For updated works, the first question that arises is how much of the ‘work’ derives from any particular author: for it is only the part for which an author is responsible that can be considered in deciding whether their contribution has produced a new original work. Suppose, for instance, that a textbook has run, as legal textbooks often do, into a large number of editions over a great many years. The first edition was no doubt an original work, but perhaps that copyright has lapsed. Each subsequent edition may or may not give rise to a new copyright in the whole book, depending on whether the amount of work done by the editor in producing the new edition is sufficient to be called the creation of a new work. (It does not matter for this purpose whether the new edition is edited by the original author or by someone else; the test is the same in either case.) In connection with a textbook, this question is usually not very hard to answer, though the answer is hard to put into words; one can ‘feel’ the difference between making minor or routine alterations in the book and making a more

152  Works: The Subject of Copyright substantial contribution to the book as a whole. In other cases, the distinction may be very hard to draw, and when this is the case, courts may reach seemingly illogical decisions that confuse matters still further. On one side of the line is the Lego case, above. On the other, a learned musicologist who stitched together surviving fragments of the music of a seventeenth-century composer, filling in the gaps to create a performing score, was held entitled to copyright in the whole. The court held that the process of editing undertaken here combined scholarship and knowledge derived from a long and detailed study of the composer’s music with a certain amount of inventiveness and that this was enough to be original, even though the author was trying to recreate out-of-copyright music, Sawkins v Hyperion, 2005.

Compilations and Databases It is particularly difficult to lay down rules for determining whether there is copyright in a compilation or arrangement of facts or of non-copyright material. Traditionally, there would clearly have been copyright in such things as Who’s Who, railway timetables or mathematical tables if they were ‘original’ in the standard, non-copied sense. Messages sent out by news agencies have accordingly been held copyright, even where literary form was not involved – as have stock-exchange prices; a week’s radio programmes; the starting prices for a race (which took some skill in sorting out); and anthologies of poems (not themselves copyright). It has, however, been denied to a list of starting positions (which were merely written down, as they were determined by ballot) and an edition of an out-of-copyright book shortened by cutting out about half of it. (In the latter case, there were critical notes published with the new edition and these were held copyright.) Copyright was also denied for a local timetable, made by selecting and rearranging entries from a larger timetable relating to a particular town, and for a selection of seven non-copyright tables of conventional type for a diary. About all that can be said in general is that mere industry, or effort, counts less than knowledge, skill or taste in such matters; that the amount of labour that goes into a particular compilation is of great importance; and that anything published in permanent form – a book, for instance – has a better chance of protection than such ephemeral productions as a notice on a notice board. The rest is a matter of how the court feels about it. In the case of the diary, Cramp v Smythson, 1944, for instance, the Court of Appeal decided one way, the judge who tried the case at first instance and the House of Lords the other: a sure sign of the sort of case where anything can happen. An ordinary book of non-fiction is likely to enjoy copyright protection on two separate grounds: both from the literary skill that went into writing it, and from the skill and effort that went into selecting which particular facts to include and which to leave out, and how the former should be arranged. Here again, the line is difficult to draw: a particular compilation of facts will have copyright protection, but mere ideas will not.

Works: A Closed List  153 Things got even murkier since the implementation of the EU Database Directive in 1996. Now a collection of information which before was a ‘table’ or ‘compilation’, and so a literary work, could find itself labelled a ‘database’. The distinction is important. While sharing many aspects, database rights differ from tables and compilations in that the materials that make them up are arranged in a systematic, or methodical, way and are individually accessible. Databases are only protected as copyright works if, and to the extent that they are, by reason of the selection or arrangement of their contents, the ‘author’s own intellectual creation’. Databases which fail to meet this standard of originality might benefit from a special form of protection, known as a ‘database right’ (Chapter 26).

Photographs and Sound Recordings Copyright protection of photographs (‘artistic works’) is not restricted as to merit or subject matter, but, like any other works, must be ‘original’. This needs some consideration. In a sense, no photograph is original: for the camera only records what is presented to it. But there is more to taking a photograph than that. A photographer makes choices about what to include in the frame, the camera angle, lighting, etc., and so the skill of the photographer will attract copyright protection, just as will the skill of the artist who makes an engraving from a painting. It is the change of form of the work and the skill involved that in these cases justify copyright. Where there is no change of form, copyright must be justified in some other way. A mere rephotographing of a photographic print, for instance, would not give the second photograph its own copyright. But it may be assumed that, in any practical case, whoever did the rephotographing could show that enough additional skill and originality was invested to give rise to a new copyright in the new photograph. One area where there may be no copyright is in photographs taken by security cameras – not only is there no ‘author’, but there is nothing which can be called creative input (see more below). A similar issue applies to sound recordings. Whilst not technically subject to a requirement of originality, copyright in these subsists only to the extent that they are not copied from a previous sound recording. Accordingly, the same sound recorded by two independent people could form the basis for two separate copyrights in those recordings. However, a ‘mere’ rerecording would give no additional protection. Nevertheless, in practical cases, such as transfer of a ‘historic’ recording from a vinyl to a digital format, there may be arguments at the fringes that a recording company has done enough work improving the recording quality to make it effectively a new recording and so give it a new copyright.

Foreign Works Foreign works are protected either if they are first published in the UK or if they are authored by a citizen, resident or person domiciled in a country with which the

154  Works: The Subject of Copyright UK has a treaty to that effect – the relevant treaty is called the Berne Convention. It now has 180 members, so only a few countries have not joined. The basic arrangement is that a citizen of any member state gets the same copyright in another member state as would a citizen of that state.

EU Influence on Originality and Works EU harmonisation has impacted the reach of copyright protection, both in terms of what should be eligible for protection and what authorial qualities are required for copyright. Generally speaking, the EU Directives are silent on these issues (reflecting the lack of consensus amongst EU Member States at the time they were ratified). Photographs, databases and computer programs, however, are singled out for legislative attention and deemed original if they are the ‘author’s own intellectual creation’. In 2009, the CJEU held that this standard of originality applied to all authorial works, Infopaq v Danske, 2009. People still debate whether, and if so how, this test differs from the UK’s traditional definition of originality as arising from the skill, labour and effort of the creator. An early indication from the Court of Appeal, NLA v Meltwater, 2011, suggested that the two tests were synonymous – and indeed in subsequent cases, the two tend to be used somewhat interchangeably. On a purely linguistic level, ‘skill, labour and effort’ would seem to encompass exertions that would not be described as ‘intellectual creation’. Nevertheless, while there may be differences in fringe cases, where an author has exerted creative skill, labour and effort, both tests evidently arrive at the same result. The requirement for the work to be the author’s own intellectual creation is consistent with the requirement that the work must originate from the author (i.e. is ‘not copied’). Creative freedom is evidently of paramount importance. Accordingly, where there is no scope for the author or designer to make free and creative choices – for example, if the appearance of the features of a folding bicycle design are all dictated by function, then originality will not be found, Brompton Bicycle, 2020. This reasoning also underpins the CJEU’s rejection of copyright in live sporting events: ‘football matches, which are subject to rules of the game, leav[e] no room for creative freedom for the purposes of copyright’, Football Association Premier League Ltd v QC Leisure, 2011. Recently, the CJEU has also turned its attention to what is meant by a ‘work’, holding that the author’s creation must be ‘expressed in a manner which makes it identifiable with sufficient precision and objectivity’ to qualify as such. Thus, copyright protection was denied to the taste of a cheese because it was too imprecise and subjective to satisfy these requirements, Levola Hengelo v Smilde, 2018. Moreover, the Court has clarified that every ‘original’ product design or 3D form will enjoy copyright protection as an ‘artistic work’, Cofemel v G-Star, 2019, firmly rejecting

Illegal and Immoral Works  155 the argument that states should be able to impose additional requirements, such as a threshold of ‘aesthetic value’, before copyright can exist. This freeform approach is a far cry from the CDPA’s exhaustive list of ‘works’ and their associated definitional prerequisites (e.g. intention to create a sculpture). They therefore call into question whether the UK’s legislative requirements are compatible with EU law – a question that is obviously far less pressing following Brexit than it might have been before. The point nearly came up for decision in Response Clothing v Edinburgh Woollen Mill, 2020. Was a woven fabric which had a wave pattern running through the fabric a ‘work of artistic craftsmanship’? The judge said ‘yes’ – applying the rule that even a prior statute should be construed in accordance with later EU legislation if possible. The cumulative effect of the CJEU case law is to meld the concepts of ‘originality’ and ‘works’. Potentially, according to EU rules, a copyright ‘work’ is anything which captures an author’s creative expression, provided it is concrete enough to be clearly and objectively perceived. A closed list is not permitted. Additionally, EU case law increased the overlap between copyright and design rights, which would undo the efforts of the drafters of the CDPA to do just the opposite (see Chapter 7). The UK courts will have to decide, post-Brexit, whether to depart from this CJEU case law or not.

Illegal and Immoral Works It has been said that the courts will not protect a work that is illegal, immoral, indecent or similarly undeserving of protection. Accordingly, it is open to question whether a libellous poem or an obscene film or photograph can seek to rely upon copyright if it is copied. Inevitably, a great deal will depend on the attitude of the judge trying the case. Late in 1939, for example, copyright protection was refused to a would-be humorous document entitled ‘The Last Will and Testament of Adolf Hitler’; while not obscene, it was in the view of the judge vulgar and indecent. Presumably, however, some people thought it funny, or it would not have been worth publishing, let alone worth copying too. The judge was evidently not blessed with the same (or possibly any) sense of humour, but if he had been, the case would probably have gone the other way. More recently, members of the House of Lords expressed a view that a former spy who had written a book, called Spycatcher, should be unable to bring a copyright infringement claim because of the ‘disgraceful circumstances’ in which the book was written – in breach of the duty of confidence that he owed to the Crown, A-G v Guardian No.2, 1990. Since cases of this sort are rare, the limits of this exception have never been very clearly laid down, and it is perhaps questionable whether the ‘exception’ still remains, these days, except for all but the most scandalous or scurrilous publications.

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Overlapping Rights In general, it is irrelevant to the question of whether copyright subsists in a work to consider whether it is covered by some other copyright too. For instance, in the case of what are called ‘collective works’ – symposia, magazines, encyclopaedias, etc. – there must necessarily be a whole series of copyrights in the separate articles, stories or illustrations, as well as a copyright in the work as a whole: in its general plan and arrangement. Furthermore, it is also generally irrelevant, at least as far as copyright subsistence is concerned, that a given work contains within it something that is an infringement of (or perhaps merely copy of) another, earlier, work. The key aspect, in much the same way as the example of the new edition of a book discussed above, is the contribution made by the author of the later work. In Chapter 17, we explained that a painting can be a reproduction of a photograph for copyright purposes. There will be a copyright in the painting separate from that in the original photograph: the painting is an ‘artistic work’ in its own right, requiring skill and judgement for its execution, notwithstanding that the scene depicted is taken from a photograph. In such a case, it will be unlawful to reproduce the painting unless the owners of both copyright in the photograph and the painting consent. Similar cases are common in other arts, too: in a recording of music, both the music itself and the recording are separate works, unless the music is quite old. There could be copyright lyrics, too. The point is important in dealings in copyright, for it will be ambiguous to refer to ‘the copyright in the painting’ if more than one copyright exists in the painting, and any legal agreement using such language may have rather unexpected effects.

Translations A translation will have copyright, independently of the work from which it is translated. The classic comical example of this was a case where the court had to decide upon the ownership of the copyright, if any, in a book said to have been dictated to a ‘medium’ by the spirit of a biblical character dead for 2000 years. The court noted that the book was not written in any current language, but in somewhat archaic English, and decided that the translation from one language to the other must have been done by the medium – who consequently had a translator’s copyright, Cummins v Bond, 1926. The full case is well worth reading itself as a ‘literary work’. Do not suppose the judge believed the book to have been dictated by any spirit; but a judge has to decide an ordinary civil case on such evidence as the parties choose to put before him. Since both accepted that the book had a ghostly origin, it was proper for the judge to decide the case on that basis! The matter translated need not itself be a literary work of the type capable of copyright protection; the test to be applied is whether the translator has left their own personal stamp on the translation, such as in the particular word choice, syntax, etc. If they have, then copyright will subsist.

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Other Cases In much the same way, it has been held that a shorthand report of a speech has its own copyright (a literary work), separate to that of the person who spoke the words themselves, Walter v Lane, 1900. It is the shorthand-writer’s skill and labour from which the copyright derives. The speech will, if written in advance, also be copyright, again as literary work. Where the speech is given off the cuff, the act of creating the short-hand version will fix the words and create both copyright in the speech, as well as that of the shorthand writer. A photograph of a painting, or a painting made from a photograph; a film made from a book or play and the ‘book of the film’ – and all similar instances – will share a comparable approach. In these cases, there are two copyrights (at least): one, in the original work, covers both works; the other covers the transformed work only. So again, an architect’s original plans will be copyright as drawings (an artistic work). A building made from the plans will attract a further architectural copyright as another kind of artistic work. Finally, a copyright in the typographical arrangement of a published edition of a work will overlap with any copyright in the work itself.

19 Authorship, Ownership and Term of Copyright Introduction If its conditions are satisfied, the law creates a copyright instantly and automatically. There are no formalities: no system of application, grant or registration. There is no verb ‘to copyright’ in UK law. Questions of subsistence and ownership normally never arise unless and until the copyright is the subject of a dispute or transaction. It will then be necessary, often many years after creation of the work and with no assistance from registers or formal documents, to divine ownership. It is therefore fortunate that the rules governing this are not too difficult.

The Basic Rule – Copyright Belongs to the Author Except for the situations mentioned below, the first owner of copyright in a work is its author. Since the owner is the party which benefits from the exclusive rights to control exploitation of the work, and the term of copyright is often pegged to the life of the work’s author, identification of the author/s is a vital first step. There are different definitions of authorship for different types of works.

Literary, Dramatic, Musical or Artistic Works The author of a literary, dramatic, musical or artistic work is the creator, i.e. the person who actually expends the effort, labour, skill, etc. creating it. For instance, the ‘author’ of a book will be the person who composes the language used. This is not necessarily the same person that writes it down: if a person dictates a book to a secretary, the secretary is not the author. If, on the other hand, a person merely provides a rough outline or some ideas to someone else to flesh out into a book, the latter is the author. If a book is illustrated by drawings, the ‘author’ of the drawings will be whoever drew them, notwithstanding that the idea for each illustration was taken from the book itself. There are books where, although one person wrote the whole text, another provided and selected the material for the book and determined its arrangement to

The Basic Rule – Copyright Belongs to the Author  159 a sufficient extent to be considered a joint author (see below). In general, however, for a literary work, the person who selects the actual words used will be the sole author: for instance, where a ghostwriter composes a person’s autobiography, the ‘ghost’ will be held to be the sole author, even though the subject of the autobiography supplies such facts as may be included.

Computer-Generated Works Unlike most countries, the UK’s legislation has a special provision for authorship of ostensibly authorial works which are ‘computer-generated’. The author is deemed to be the person making the arrangements necessary to create the work. For much of the 30 years that this provision has been in place, it received little or no attention. It has now come more to the fore following the increased use of machine learning and artificial intelligence (AI) in the creative process. In some cases, AI is simply used as a tool to help an author express their own creativity, but in others, an output is produced (arguably) without any human input. Academics and other organisations have argued that copyright’s originality requirement links authorship inextricably with human creativity – so that copyright does not and should not protect works which have no human author. Indeed, it is uncontroversial that, once set in train, an AI system will continue to churn out new works without requiring any incentive or reward (such as the grant of legal protection) to do so. As we write, the UK government is reviewing whether copyright is the most appropriate way to protect the outputs of machine creativity. The consultation might result in removing protection for computer-generated works, or limiting protection to computer-assisted works only.

Entrepreneurial Works There are special rules for authorship of entrepreneurial works. Sound recordings are considered to have been authored by their producer – defined as the person by whom arrangements necessary for the making of the work have been made. The author of a film is the producer and principal director, meaning that if these are different people, then the copyright will be held by them as joint authors. For broadcasts, the author is the person making the broadcast, and for the typographical arrangement of a published edition it is the publisher.

Joint Authorship Where two (or more) people have each made a significant, original contribution to a work and share responsibility for the form of expression, they will be joint authors if their contributions are not distinct. As in the case of this book! Contributors of separate chapters to an edited collection, however, will not gain joint authorship of

160  Authorship, Ownership and Term of Copyright the whole, but will remain individual authors of their own contributions. However, a musician who contributes a distinctive part to a musical track may well be a joint author of the resultant musical work, Fisher v Brooker, 2009. Equally, input in the dramatic content of a screenplay may give rise to joint authorship, even though someone else has penned most of the text of the script, Martin v Kogan, 2021. In practice, it is not always straightforward to determine whether a contributor has made enough of the right kind of contribution to amount to authorship. The assessment of joint authorship is contextual and will involve both a quantitative and qualitative assessment of the relative contributions. Contributions that might count as authorial for a screenplay (dramatic work) might only amount to unprotected ideas for a book (literary work). The starting presumption is that all joint authors will receive equal ownership shares, but courts can deviate from this if it is evident that some undertook a greater share of the creative work than others.

Exception 1 – Works by Employees Where a literary, dramatic, musical or artistic work or a film is made by an employee in the course of their employment, the copyright belongs to the employer, not the employed author – subject to any agreement to the contrary. This does not include cases where the author can be loosely said to be ‘employed to produce the work’ but is not employed in the ordinary sense. Thus, the editor or publisher who commissions a book or article using a ‘contract for services’ gets ownership of the copyright only if the contract says so, whereas a publisher who employs an author by a ‘contract of service’ gets the copyright automatically. (Just as there is no need for a contract saying that boots made by a bootmaker working under a contract of service belong to the factory owner.) Similarly, an architect engaged to design a house does not lose control of the copyright in the plans to the building’s owner, but a draughtsman who works for a salary will be an employee, and the copyright in the plans they are paid to draw will belong to their employer. The exact limits of the phrase ‘in the course of employment’ are rather woolly. It and has given rise to much litigation over many years, mostly in fields other than copyright. For most purposes, however, it means simply that the author was an employee, rather than an independent contractor or freelancer, and that the creation of the work was part of their job. For many tasks that an employee undertakes, the position will be fairly clear-cut, but on the other side of the line, there was a case where a translation had been made by a man for his employers, but this was done in his spare time and for extra payment (as distinct from an overtime payment). It was held that the translator, not his employer, was the first owner of the copyright in the translation, Byrne v Statist, 1914. It may be that the employer could have demanded that the copyright be handed over to him, but this question did not arise, for it was not his employer that the translator was suing. It is not clear to whom works of a secretly moonlighting employee belong.

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Exception 2 – Commissioned Works There used to be another important exception to the ‘author-is-first-owner’ general rule, which was abolished for future works by the CDPA in 1989. The rule related to commissioned works of certain kinds. If someone commissioned the taking of a photograph, the making of an engraving or the painting a portrait, and paid or agreed to pay for it, the commissioner – not the photographer, engraver or artist – would be first owner of the copyright in the commissioned work. The exception still applies to pre-CDPA works. Because of the long duration of copyright (see below), there are many pre-1989 commissioned pieces still in copyright. This ‘old’ rule can be important, for instance, for old photographs. There have been quite a few cases about it, several turning on whether there was payment, or an obligation to pay, at the time the photo was actually taken: if not, the photographer/engraver/portraitist would own the copyright. One case concerned the photographs for the cover sleeve of the Beatles’ Sgt Pepper’s Lonely Hearts Club Band album. They were taken in 1967 by Michael Cooper, a fashionable sixties photographer. He took several rolls of film of the Beatles on the famous set and of them wandering about the studio. The photographs included the one actually used for the cover, and several other, similar out-takes. Cooper’s son wanted to exploit some of these out-takes, while the Beatles wanted to stop this. The judge held that there was not enough evidence to show that there was a commission prior the photographs being taken, or that the person doing the commissioning had paid (or agreed to pay) for them. The Beatles lost, Apple Corps v Cooper, 1992. There are many situations in which a person commissions another person to undertake some creative work. Under the current law, the question of ownership might be thought simple: given the commissioning exception has been abolished, we revert to the general rule – the author is the first owner. While this is generally true, it can still cause problems. For example, if an engineering company asks an advertising consultant to design a campaign poster and nothing is said about copyright, then the rule says the copyright owner is the consultant. Similarly, if a partner in a firm does a drawing for business purposes, then the employee exception does not apply because a partner is not an employee. In strict law, both of these conclusions are true. Nevertheless, the courts are not comfortable with such solutions, since they can lead to results which no one really intended at the time. So they occasionally fudge the issue a bit. Some judges take the view that if commercial people and organisations do not make proper provision to regulate their affairs, then that is tough luck: the courts shouldn’t spring to their aid. But others will say one of two things: either the engineering company has an implied licence to use the poster design for its campaign or, more rarely, that the company is the ‘equitable owner’ of the copyright. The same will apply in the second example – the firm may be held to have an equitable right to the copyright. Being the equitable owner means that you have a right to have the legal title to

162  Authorship, Ownership and Term of Copyright the copyright transferred into your name. Accordingly, where a designer who had been commissioned to create a logo for a client purported to transfer the copyright in the design to one of his client’s competitors, the Court of Appeal held the equitable ownership to vest in the client notwithstanding the provisions of the CDPA, Griggs v Evans, 2005. This solution gets around the problem that the legislation principally gives rights to the creators of the work, but this could sometimes result in the creators holding the people for whom they do the work to ransom when this could never have been intended. The best way of avoiding ownership issues is by a prior written agreement. A would-be author (the prospective owner) can enter into an agreement with another party which transfers (assigns) ‘future’ copyright in a work which has yet to be created, with the result that the other party becomes owner of the copyright as soon as the works covered by the agreement come into existence.

Crown and Parliamentary Copyright Where a work is made either by Her Majesty or by an officer or servant of the Crown in the course of their duties, the copyright belongs to the Crown. There is a separate Parliamentary copyright. The Crown does not always enforce its copyright, allowing such things as Acts of Parliament to be freely reproduced from the official editions published by the Stationery Office; but the copyright is there, and it is enforced in relation to things like Ordnance Survey maps.

Where Authorship is Uncertain If a work appears to be signed, or to bear an author’s name, the courts will assume, unless it is proved otherwise, that the person whose name or signature the work bears is the owner of the copyright; if not, the first publisher will be presumed to be the owner. These are, however, merely rules of evidence; they do not alter rights, but they do sometimes make it easier for the copyright claimant to prove their case. In particular, they make it possible to sue for infringement of the copyright in an anonymous work without disclosing the author’s name.

Orphan Works Shakespeare’s Iago said: ‘men are men; the best sometimes forget’. Copyright lasts so long that the author of old works may well be unknown or unfindable. Such works are called ‘orphans’. Until recently, if you wanted to use an orphan work, you had to take a chance. Now there is a statutory scheme for getting a compulsory licence from the UKIPO if you can show that you could not locate the author despite a

Duration and its Link to the Author and the Work  163 diligent search. The UKIPO sets and collects a licence fee and maintains an orphan work register. If the rightful copyright owner shows up, they can claim fees collected within the last eight years. Unclaimed fees are supposed to pay for the system, with any balance funding social, cultural and educational activities. The scheme is not a roaring success. It started in 2014, and currently the register lists only 1541 licences for all types of work (none significant).

Duration and its Link to the Author and the Work Obviously, determining the category of work that a particular creative endeavour falls within is important from the perspective of subsistence – as there are subtle differences between the different types in the criteria required for copyright to exist. However, the classification of a work is important for more than just that. Duration of copyright, for example, will vary depending on the type of work under consideration – in particular, between authorial and entrepreneurial works.

Authorial Works For authorial works (literary, musical, dramatic and artistic works) not covered by Crown copyright, the general rule is that copyright expires at the end of the period of 70 years from the end of the calendar year in which the author dies. Even considering the economic incentives provided by copyright, this is an awfully long time and one which defies rational explanation. For works where two or more people are joint authors, the clock only starts ticking when the last of them dies. Evidently, given the importance of the author in this equation, there are supplementary rules that will apply where the work is of unknown authorship or has been created by a computer. For works of unknown authorship, the right expires 70 years from the end of the calendar year in which the work was made or, if the work has been made available to the public within this period, 70 years from the end of the calendar year in which it was first made available. For computergenerated works, the term is 50 years from the end of the calendar year in which the work was first made.

Crown Copyright Crown copyright lasts for 125 years from the end of the calendar year in which the work was made or, if the work was published within 75 years of it being made, 50 years from commercial publication. This provision has the merit that it is possible to find out whether the copyright in Crown works has expired without having first to find out who the author was: an almost impossible task in the case of, say, an Ordnance Survey map.

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Entrepreneurial Works For entrepreneurial works, duration varies from category to category. Sound recordings are protected for 50 years from the end of the calendar year in which the recording was first made or, if published or otherwise (legitimately) made available to the public within this period, 70 years from first publication. Authors from outside the UK, however, only get this term provided their national laws entitle them to it (provided that this is no longer than the period permitted to UK authors). This 70-year term changed from 50 years some years ago, following lobbying by a number of ageing musicians who had been successful when younger and for whom the words ‘pension fund’ apparently had no meaning. Films are something of an anomaly. In contrast to most other works, their term of protection is determined based on the demise of a collection of people, only one of whom is considered an author of the cinematographic work itself. Protection is again pegged at life plus 70 years, but the clock only starts ticking once the last to perish of a set list of people has shuffled off this mortal coil. The list includes: the principal director; the author of the screenplay; the author of the dialogue; and the composer of music specifically created for and used in the film. Only the first in this list is actually considered an author of the ‘film’ for copyright purposes. Copyright in a broadcast lasts for 50 years from the end of the calendar year in which the broadcast was made, with copyright in any repeat broadcast expiring at the same time as that in the original. The typographical arrangement of published editions has copyright for 25 years from the end of the calendar year of first publication.

20 What Is Infringement of Copyright? Introduction Copyright is simply a right to stop other people doing certain things (the ‘acts restricted by the copyright’). This chapter is about what these are. The next is about exceptions to those rights.

Primary and Secondary Infringement Copyright infringement can be divided into ‘primary’ and ‘secondary’ infringing acts. The distinction between them is twofold. Primary infringement requires no mental element – an unconsciously or accidentally made copy is just as much an infringement as if duplication were intentional. (But note the impact that EU case law has in respect of certain acts of ‘communication to the public’ via the internet, discussed later.) It can also occur in private settings: there is no requirement for any of the acts of primary infringement to be carried out in the course of trade. Secondary infringement, by contrast, concerns commercial acts (such as importation or dealing in the course of business), and rests on the person accused knowing, or having reason to believe, that they were working with an infringing copy. Most of this chapter concerns primary infringement. We consider secondary infringement at the end.

A Derivative Link is Crucial The most important point about copyright infringement is that it only prevents people doing things with material that has some causal link with a copyright work. The clue is in the name: copyright. Unlike patents, for example, independent creation will always be a defence. If a work is independently created, then there can be no infringement, irrespective of what restricted act is alleged to have been committed. It has been said, for example, that six monkeys, operating typewriters at random, would sooner or later reproduce all the books in the British Library, among them works that were copyright. But there would be no infringement, for there would be no copying: the work would have been reproduced quite

166  What Is Infringement of Copyright? accidentally, without reference to the original. Accordingly, even complete identity of works is insufficient to found a claim for copyright infringement if there was no opportunity for copying to have taken place.

Proving Derivation The difficulty of proving a causal link is sometimes serious. It will very seldom be possible to prove directly that copying took place: only the alleged infringer knows how the work came into existence. So, in practice, the only thing to do is to point to the resemblances between the two works and to say that these resemblances are too many and too close to be due to coincidence. It helps to have proof that the alleged copyist had access to the original work. The court can then be asked to infer that some sort of copying must have taken place. If the resemblances are enough to give rise to an inference of copying, it will then be up to the alleged infringer to explain this away if possible. They will need a reasonable explanation of how those resemblances could have come into existence without any copying. For example, work X might be similar to copyright work Y because they are both based upon an earlier third-party work Z. Not every explanation will do: judges are not exactly credulous. For example, if the explanation is that X thought the whole thing up without ever having seen or heard of the earlier work, the judge will want to see X (or hear some good reason why they cannot see X) and find out whether to believe the story or not. But if the explanation is reasonable, the copyright owner must find some other way of proving the case, and as we have said, there is usually no other way available. An illustration of this is Francis Day & Hunter v Bron, 1963, where, although there were very great similarities between the claimants’ old tune ‘In a Little Spanish Town’ and the defendant’s pop song ‘Why’, this was not enough to prove infringement, as the composer of ‘Why’ (whose story was believed) said he could not remember ever hearing the claimants’ tune, although he was prepared to admit that he might have heard it on the radio when he was young. Sheeran v Chokri, 2022, is a recent case. Derivation need not be direct – one work may, for example, be a window into another, such that when a restricted act is carried out in relation to it, the copyright in both is infringed. Suppose, for the sake of argument, that a short poem written by X is incorporated by Y as one verse of a song. Someone who then performs the entire song in public without consent of the others may well infringe the copyright in both Y’s literary work (in the lyrics) and X’s poem (also a literary work), even though they have never seen X’s work or perceived it to have an independent existence. Moreover, infringement need not be conscious or deliberate – it is just as much a derivative copy if made carelessly as if duplication were intentional. All that is necessary for an infringement (so long as a substantial part of the earlier work is taken – discussed below) is that the work in respect of which the restricted act has been performed should somehow, through some channels, be derived from the earlier.

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Infringement by Reproduction The type of infringement which first comes to mind when most people think of copyright is that embodied by the name itself: the right to stop copying of a work. It is infringement if the work is reproduced in any material form without the consent of the copyright owner. To give a simple example, consider an article in a magazine. In the ordinary course, it might have been sent in by a freelance author (or perhaps by their literary agent), who is the owner of the copyright. Submitting it for publication means that the author wants it published in return for the proper fee – and the only possibility of argument lies in the size of the fee. It is only when something goes wrong that a dispute about copyright arises. Suppose the manuscript also includes some illustrations which were not the writer’s to offer for publication; then each copy of the magazine ‘reproduces’ them without the consent of the copyright owner(s) of the illustrations. That is infringement. (The person who sent the article in would usually end up paying the damages, if they have the money, but the magazine would be primarily liable for copying.) Or the whole article may be very like one that appeared earlier in some other magazine, but not quite the same. This may or may not constitute an infringement of the copyright in the earlier story, depending on the circumstances. It is necessary to consider in some detail just where the line is to be drawn.

Copying The Copyright Designs and Patents Act 1988 (‘CDPA’) uses the word ‘copy’ in this connection. ‘Copying’ is an act restricted in all descriptions of copyright work and, for authorial works, refers to the reproduction of the work in any material form – including storing the work in any medium by electronic means. For artistic works, this also includes making a two-dimensional copy (perhaps a photograph) of a three-dimensional work (say a sculpture), and vice versa. Copying of the other forms of work shares a similar definition. For broadcasts and films, copying is extended to include the making of a photograph of the whole or any substantial part of any image forming part of that broadcast or film. For the typographical arrangement of published editions, copying is, in contrast, restricted to facsimile reproduction of the published edition, NLA v Marks and Spencer, 2003. In all cases, a reproduction is still a copy irrespective of whether it is transient (importantly, this includes material briefly stored in computer memory) or incidental to some other use of the work.

A Substantial Part Must be Copied As for all restricted acts, copying is only an infringement when it is carried out in relation to the whole or a substantial part of the work. This requirement – also

168  What Is Infringement of Copyright? called ‘substantial taking’ – involves a question of degree: the precise dividing line between a substantial and insubstantial part of a work being essentially a question of fact and impression. As always with this sort of question, there will be clear cases one way (e.g. an exact or near exact copy) and the other (e.g. where the resemblance is slight). The quality of what is taken is what matters more than the quantity. Importantly, what is substantial is assessed according to its importance to the claimant’s work and not to the defendant’s.

Where Some Part (But Only a Small Part) is Copied Exactly While the principle ‘what is worth copying is worth protecting’ is not always a good guide, here it is. If a court is satisfied that there is a copyright work, and that the defendant thought it worthwhile copying out, word for word, some part of that work, it will be very hard to persuade that court that the part copied was not substantial. Thus, where four lines of a short poem of Kipling were reproduced in an advertisement, the court found no difficulty in holding that this was a substantial enough part of the poem for there to be infringement, Kipling v Genatosan, 1923. However, a lot depends on how the court feels about the case. Where, for instance, the title of a short story was taken from the refrain of a popular song, and four lines from the song were printed below the title (as of course quotations often are), the court held that this was not an infringement of the copyright in the song, Chappell v DC Thompson, 1935. The line must be drawn somewhere: the owner of the copyright in the song was not really deprived of his property or of an opportunity to draw profits from his property; and regarded as a literary work, the song was not quite in the same class as Kipling. This question of merit is rather a difficult one. Strictly speaking, it is not easy to see how the merit of a work should affect the matter at all. Yet, in practice, it is always easier to base a successful action for infringement upon a work that has merit than upon a work that has not. The law is never absolutely rigid, and the court will give a common-sense decision where it can. It is fortunate that this is so; but it is sometimes in consequence a little difficult to forecast what the decision will be. An instructive case as to what is a substantial part of a work arose from the inclusion in a newsreel of a military parade of a sequence taken while the band was playing the copyright march, ‘Colonel Bogey’. The sequence lasted less than a minute, and other things were happening at the same time, but the principal air of the march was clearly recognisable. This was held to amount to taking a substantial part of the march; the more so, because the soundtrack of the film could have been used by itself as a record of the march – to provide incidental music during an interval, for instance, Hawkes v Paramount, 1934. While the defence of incidental inclusion (see Chapter 21) could now apply, the principle remains. Divination of what constitutes a substantial part of any given work is undoubtedly tricky. The absolute quantity that is taken is clearly not a sound guide by itself – four lines from a limerick may well cross the threshold, but four lines from

Infringement by Reproduction  169 War and Peace may not. Equally, reliance upon the proportion of a work taken would again unfairly prejudice longer, and arguably more creative, endeavours. That’s why the courts often emphasise that substance is more a question of quality than of quantity. An important background influence is undoubtedly what makes a work original in the first place – the creative skills of the author. The link between originality, the authorial contribution of the creator of the work and the concept of infringement is therefore critical. Indeed, according to the Court of Justice of the EU (CJEU), to infringe, the defendant must have reproduced a part which amounts to an expression of the author’s own intellection creation, Infopaq, 2012. As we saw in Chapter 19, this terminology matches the EU definition of originality.

Where there is Merely a Similarity of Form or General Idea In discussing this question, it must first of all be remembered that there is no copyright in ideas. The mere concept of a story about star-crossed lovers, or a school for young wizards, cannot be claimed as anyone’s property. Equally, mere factual information, such as the length of a river or the height of a mountain, cannot be the subject of ownership by any one person. Nevertheless, the dividing line between idea and expression is often a difficult one to draw. It is clear that the protected element of a literary work, for example, goes deeper than just the precise words used by the author to describe a scene. It is also apparent that the ‘part’ to which we refer when considering substantiality need not be discrete; it can be a feature or combination of features of the work abstracted from it. Accordingly, even where there is no textual reproduction, elements of the underlying architecture of a work (plot, characters, storyline, etc.) may be sufficiently expressed in the text as a whole for them to gain protection from copyists. However, determining where ‘idea’ ends and ‘expression’ begins is so fraught with difficulty as to be impossible to predict with any degree of precision – which makes for wonderful arguments over the substance of any given work where there is no textual copying. A prominent example of such delights may be found in the Da Vinci Code case, Baigent & Leigh v Random House, 2007. Here, Dan Brown was accused of copying the central plot and theme of the claimants’ book The Holy Blood and the Holy Grail. The plot itself, which the claimants described as one of ‘historical conjecture’, revolved around the idea that Jesus’ bloodline survived in France after his crucifixion, merging with the Merovingian bloodline around the fifth century and carrying on. The Court of Appeal considered that whilst it was evident that inspiration had been taken from the claimants’ work (Brown admitted this), and that reproduction of the underlying architecture of a text could found a claim to copyright infringement, on the facts before it there was not enough to find substantial taking. The parts reproduced were of too generalised and abstract a nature to be considered a substantial part of the claimants’ work. It must also be remembered that every competent worker in any field must be expected to be familiar with any important work that has gone before; and it is just

170  What Is Infringement of Copyright? these important and successful works, that everyone ought to know and that will inevitably influence works that come after them, that are likely to attract infringers. In fiction, it is indeed often the poor, unknown author whose unexpectedly brilliant work is stolen, but in real life that sort of thing is seldom a commercial proposition. The inevitable influence of one work on those that follow it does not involve infringement of copyright. The difficulty is to distinguish between drawing on the common stock of experience and making improper use of other people’s work. It is often difficult to determine whether a defendant has got sufficiently close to the claimant’s work to infringe. A good rule of thumb is that if a defendant has reproduced enough for it to be clear that they have copied, that amount of reproduction will be sufficiently substantial to infringe, Designers Guild, 2003. The key question is again, however, whether the defendant’s work incorporates a substantial part of the elements that made the claimant’s work original in the first place – whether this is expressed in terms of the skill, labour and effort expended by the creator or as the elements that made the work the author’s own intellectual creation. Judges have sometimes tried to express the way the line is to be drawn by saying that for there to be infringement, one work must produce the ‘same effect’ as the other, but this is not always a reliable guide. To put it slightly differently, there must be something that might make people encountering the two works in succession feel, ‘I have read this story – or seen this play – or heard this music – before’. But the mere fact that one work reminds a reader or viewer of another work is not enough – it is not an infringement of copyright to try to reproduce someone’s style of writing (or composing). Some examples may help.

Example 1 Many years ago, one Austin composed a new arrangement of the music of a work that had long ago lost any copyright it had ever possessed: the Beggar’s Opera. It was a popular success. The new arrangement was, of course, protected by copyright. A manufacturer of gramophone records, wishing to take advantage of Austin’s success, brought out a recording of extracts from the Beggar’s Opera. Since the tunes were all old, this in itself did not infringe any of Austin’s copyright. But the recording went further: although the actual notes were not copied from the Austin arrangement, the tunes were ‘dressed up in the same way’, as the judge put it. That was infringement: a record is a ‘reproduction’. The case in fact raised in a different context the same question as the example discussed in earlier chapters, of the photographer who sees a successful photograph of a landscape and goes and takes another like it. They may photograph the same view, for there is no more copyright in a view than there was in the tunes of the Beggar’s Opera. But they must not go further and imitate, to any substantial extent, the tricks by which the first photographer has converted the view into a successful photograph. The Austin case also illustrates the way in which the circumstances of a case influence the court’s findings. The defendants there had advertised their records in a way that emphasised the relation with Austin’s successful arrangement, and in

Infringement by Reproduction  171 fact, in this connection lay the whole reason for bringing out those records at that time at all. This made it by no means easy for the defendants to argue that they had really taken nothing from Austin: the defence was in effect merely that, as a technical legal matter, what they had done was not reproduction of a substantial part of that which was the subject of copyright. Purely technical defences are always dangerous. If such a question arises on a comparison of two apparently independent works, the case is not prejudiced by any admissions that the one work is connected with the other, and such a defence takes on a rather different aspect. The defendant can, and does, argue that there has been no copying at all in any ordinary sense; that the resemblances between the two works, if not pure coincidence – any two works being indeed much more alike than perhaps their authors would admit – are the result of the sort of unconscious influence mentioned above as inevitable and legitimate; and that these resemblances are trivial, not substantial. (A defendant may even argue that the resemblances are due to legitimate ‘quotation’ of phrases that the hearer will be expected to recognise as coming from earlier works.) Only then does the defendant argue that, in any case, what is common to the two works is not the sort of thing that the law calls ‘reproduction’. If there is real doubt as to the copying, the technical defence will have a much more favourable reception.

Example 2 Bauman was a photographer of high repute who took pictures for the Picture Post magazine. One of them was of two fighting cocks, which he took in Cuba. Fussell was a painter. He saw Bauman’s photograph in the Picture Post, cut it out, pinned it to his studio wall and from it painted a picture of two fighting cocks in the same position and attitude as the birds in the photograph. In the painting, the colouring was different, as was the general effect of the painting, which was not at all photographic. Experts were lined up on each side, including the Arts Director of the Arts Council and Professor Moyniham, a well-known painter from the Royal College of Art. The Court of Appeal judges (divided 2:1) spoke of the ‘feeling and artistic character’ of the respective works. These were different and so, somewhat surprisingly, the claimant lost. Moral: when courts get into the realms of the ‘feeling and artistic character’ of a work, anything can happen, Bauman v Fussell, 1953.

Changes in Material Form A rather similar sort of question can arise where there is a change in the material form taken by a work: for instance, to take examples that have come before the courts, where it is suggested that a dress infringes a drawing of a dress, or a shopfront infringes an architect’s sketch of a shopfront. Clearly the two cannot be identical in either case, but there is still a sense in which it can be said that there is reproduction of one work by the other.

172  What Is Infringement of Copyright?

Other Forms of Primary Infringement Reproduction (in a material form) is the chief type of infringement. However, the legislation also contains others. Some are applicable to all forms of works and others to defined subsets. As for copying, in each case the acts are only infringing if carried out without consent in relation to the whole or a substantial part of someone else’s copyright work.

Issuing Copies to the Public Issuing copies to the public (without consent) is an act that is restricted in all types of copyright work. It essentially involves putting into circulation a physical copy not previously put into circulation (posting things on the internet is covered by ‘communication’, another restricted act, discussed below). This sort of infringement very seldom occurs alone unless one is dealing with imported works. That is because publication is impossible unless copies of the work are in existence and the making of the necessary copies in this country will normally itself constitute infringement. Nevertheless, it can apply even where the copies that have been made are legitimate, providing, that is, that their issuance has not been explicitly or impliedly consented to. An example may assist. Suppose that a recording artist gives their manager permission to make and sell copies of the artist’s work only during the course of their management contract. During the term of the contract, the manager exercises this right and makes 100 copies, but only sells 50. Despite their legitimacy as copies, it will be an act of infringement for the manager to sell his stockpile once the contract is over, Nelson v Rye, 1996. The right to issue copies gives the copyright owner the ability to control the first distribution of each and every copy made, but not to control subsequent circulation. In particular, it is not aimed at curtailing a second-hand market in copyright goods. We shall revisit, in Chapter 27, how far the principle of ‘exhaustion of rights’ can be used in controlling copies of works which a copyright owner has consented to be put on the market elsewhere in the world from subsequently being imported into the UK.

Publishing an Unpublished Work It is also impermissible to publish a previously unpublished work without consent. This can be important, for large damages may flow from it: in particular, the author’s own chance of a successful launch may be completely spoilt by an anticipatory publication.

Other Forms of Primary Infringement  173

Renting/Lending a Work Derived from an EU Directive, the public rental or lending of a copy of a work is an act restricted by copyright for certain works: literary, dramatic and musical works; sound recordings and films; and artistic works other than works of architecture and applied art. A copyright owner is, in essence, given the right to a reasonable royalty every time any of these works is rented to the public. While evidently not applicable to private lending between friends, of a book or DVD, for example, the right does enable the copyright owner to an extra strand of income that is not exhausted by the first sale of the copy in question. Before internet streaming took over, this was of considerable commercial importance.

Performing/Showing a Work in Public It is an infringement of copyright to do any of the following in public without the copyright owner’s consent: perform a literary, dramatic or musical work, or to play or show a sound recording, film or broadcast. The same applies to public performance of anything close enough to a work for its reproduction to infringe. ‘In public’ here has a rather special meaning. It refers not to the sort of place where the performance or showing takes place, but to the sort of audience that is present. Nor does it mean that the performance is one that anyone who likes can attend, still less that a charge must be made for admission. For this purpose, any performance etc. is ‘in public’ that is not restricted to members of the home circle of whoever is responsible for the performance. Guests can be present, of course; there can be a very large party to see or hear the performance: but it must be a genuinely domestic affair, or it will be public for copyright purposes. An amateur dramatic show by members of a Women’s Institute for fellow members only; background music in a supermarket or factory, or which is loud enough to be heard in the public parts of a restaurant – all these, unless licensed, infringe copyright as ‘performances in public’. For the showing/playing of a broadcast in public, there is a specific defence that operates where the audience has not paid for admission to the place in which the broadcast is to be seen or heard (Chapter 21). ‘Performance’ for this purpose includes ‘delivery’ (i.e. by a human performer) and any mode of visual or acoustic presentation. Accordingly, showing a film in public is both ‘playing or showing’ the film itself and a performance in public of any play, music or sound recording embodied in the film.

Communicating a Work to the Public Following the implementation of an EU Directive, the CDPA was amended to add a new form of infringement: communication to the public. This act applies

174  What Is Infringement of Copyright? to literary, dramatic, musical and artistic works, to sound recordings and films, and to broadcasts. ‘Communication’ may be distinguished from ‘issuing copies to the public’: the former is concerned with prohibiting the distribution of intangible copies of the work (via broadcasting or the internet), whereas the latter is concerned with tangible copies. It also differs from ‘performance in public’ and ‘playing or showing in public’ (at least under the UK’s legislative understanding of the terms) in that the public does not need to be present at the point of communication for there to be an infringement (although it may be, see below). Accordingly, a person who plays a tune on a saxophone in the street would be performing the (musical) work in public, whereas someone recording themselves playing the same and then uploading it to the internet would be committing an infringing act of copying (making the recording) followed by an infringing act of communication to the public (uploading it). The law surrounding the right of communication to the public has become increasingly complex, despite (or perhaps because of) a large number of references to the CJEU, all seeking to clarify its bounds. The CJEU has indicated that the act of ‘communication’ is to be broadly construed. Accordingly, it covers the transmission of broadcast works, via a television screen and speakers, to those present in a pub. (Evidently there is overlap between this and the UK’s understanding of ‘playing or showing’ in public.) The case law has also developed a specific meaning for ‘the public’. What is required is ‘a new public’, which is different to the one contemplated by the copyright owner at the time of the initial transmission, FAPL v QC Leisure, 2011. Although communication to the public has particular relevance in the context of online piracy, merely connecting a computer running peer-to-peer software to the internet where music files containing copies of a claimant’s copyright works are placed in a shared directory falls within the infringing act, Polydor v Brown, 1995. The ‘new public’ requirement also covers unlicensed ‘catch-up’ TV services, ITV Broadcasting v TV Catchup, 2013. The CJEU has also considered whether the act of inserting into a web page a hypertext link to another’s copyright work is a ‘communication to the public’ of that work. It held that there is no communication to the public where a party merely hyperlinks to a protected work that is freely accessible on the internet, provided that the copyright owner consented to it being placed there, Svensson v Retriever, 2014. Conversely, the right is triggered if the hyperlink permits users to bypass a paywall, or other means to restrict access to the material, C More Entertainment, 2015. Where, however, a link is to a freely accessible third-party site, but one which does not have permission to display the protected work, then the Court has identified other factors which might help to determine whether the communication right has been infringed. These include whether the unauthorised party has made use of technical means which provide access to a copyright work that users would not otherwise be able to access, whether the act is undertaken for commercial gain and whether any checks have been made to determine whether the protected content linked to was published legally, GS Media v Sanoma, 2016. While video-sharing or

Other Forms of Primary Infringement  175 file-hosting platforms, such as YouTube, are not making a communication to the public by merely providing the platform infrastructure, national courts must make a case-by-case analysis to determine whether a platform’s actions in the round constitute a deliberate intervention in the sharing of illegal content, which should trigger direct liability, Stitching Brein v Ziggo, 2017; YouTube/Cyando, 2021. As the communication to the public right is an act of primary infringement, the state of mind of the defendant should be irrelevant. However, the CJEU cases seem to have muddied the distinction between primary and secondary infringement to some extent in relation to this particular right.

Adaptation It is an infringement of the copyright in a literary, dramatic or musical work to make or reproduce an ‘adaptation’ of it. Adaptation includes translation and conversion into a strip cartoon, as well as conversion of a literary into a dramatic work, and vice versa. Cases about conversions and other adaptations are often very difficult, for they raise in acute form the same sort of difficulty as has already been discussed in connection with the phrase ‘reproduction of a substantial part of a work’. Such a conversion need involve no detailed copying: a novel could be converted into a silent film, for instance (which would be ‘reproduction’ of a dramatic adaptation, if not ‘reproduction’ of the original work) without taking a single word – there would indeed be no words, apart from occasional captions. This would be an infringement, if done without consent. If, instead, a non-silent film was produced, it could still be an infringement, notwithstanding that the dialogue was independently written without any copying from the novel. In the same way, it has been held that a ballet infringed the copyright in a short story; there could be no question of using the same words, but the ballet nevertheless ‘told the same story’. There is obviously a question of degree here. Substantial taking will apply in the same manner for adaptations as it will for other forms of infringement – and therefore taking a bare plot may not be sufficient to constitute infringement; incidents of the story must be taken too. However, the nature of the act itself would suggest that it is not necessary for two works to resemble one another to the extent needed for one novel to infringe the copyright in another novel, or one play in another play. Nevertheless, the exact boundaries of substantial taking for the purposes of adaptation are probably incapable of exact definition. There may be cases where the claimant could allege, in the alternative, that the defendant has either made an unauthorised adaptation or has reproduced a substantial part of the work.

Getting Others to Infringe and Similar Cases In accordance with ordinary rules of law, it is as much an infringement to get someone else to do an infringing act as to do it oneself. In particular, an employer

176  What Is Infringement of Copyright? is responsible for acts of infringement committed by employees ‘in the course of their employment’. But copyright law goes further and makes it an infringement to ‘authorise’ another to perform any of the infringing acts. What constitutes authorisation is not always clear in practice. In essence, it involves granting, or purporting to grant, the right to do one of the restricted acts. It can include commissioning another person to produce an article to an infringing design or selling a work such as a computer program, where loading and running it on a computer involves making an electronic copy. In addition, an author who offers a manuscript to a publisher to publish authorises the publisher to do so; and if the publisher sends it to a printer, they authorise the printer to reproduce it. (It is usual for publishing agreements to make the author warrant to the publisher that the book infringes no copyright; but even without this warranty, the ordinary law would enable the printer to recover from the publisher, and the publisher from the author, any loss they had suffered as a result of copyright trouble.) ‘Authorising’ covers other things too: any case where someone who does not control a copyright accepts a royalty for its use would be authorising the use, even though the initiative came entirely from the user. So, when photocopiers became common, those who allowed the public to utilise these services unaccompanied, e.g. libraries, needed to take special care to avoid being taken to authorise the use of those facilities for the purposes of infringement, Moorhouse v University of New South Wales, 1976 – usually by the deployment of prominent warning signs. Merely knowing that someone else is going to infringe copyright is not authorising an infringement: to sell a person a copy of a play, for instance, with a warning that it must not be publicly performed, can never be an infringement unless it is a copy of a pirated edition. What the buyer intends to do with it is not the seller’s affair. Such a sale without a warning is also probably safe, since a purchaser ought not to assume that they haves any right to perform the play. With films, however, the position is different. Similarly, to hire out records or CDs to the public who will use them for home duplication was not an infringement, CBS v Ames, 1981; so also the sale of high-speed dual-deck tape recorders (cutting edge then – imagine being able to record a tape not just at normal speed, but twice as fast as usual!) is not an infringement in itself, though the accompanying advertising must obviously not go so far as to authorise infringement, CBS v Amstrad, 1985.

Secondary Infringement The acts of secondary infringement depend, as noted, upon possession of the relevant mens rea – knowing or having reason to believe, for example, that one is dealing with an ‘infringing copy’, or that apparatus is likely to be used so as to infringe copyright. Self-evidently, an ‘infringing copy’ includes one whose

Secondary Infringement  177 making constituted a primary infringement of copyright, but the definition also encompasses works which are imported and which, if made in the UK, would have constituted an infringement or a breach of an exclusive licence agreement relating to that work. A copy which was lawfully made abroad can, therefore, still infringe in the UK, since the copyrights in different countries are separable. Accordingly, it is infringement in respect of all types of work to import an infringing copy, to provide means for making an infringing copy, or to possess or deal with an infringing copy where the importer/dealer etc. is in possession of the relevant knowledge. Generally speaking, ‘dealing’ covers any sort of commercial dealing (including, for instance, free distribution on any appreciable scale, as well as sale). Infringing copies that are imported may be seized by HM Revenue and Customs on entering the country if the copyright owner has taken the trouble to ask them to (see Chapter 24). It is also secondary infringement of a literary, dramatic or musical work merely to permit a place of public entertainment to be used for an infringing performance. ‘Permit’ in this context simply meaning that the person in question has the authority to stop the performance but does not do so. There will, however, be no infringement where the person giving permission believed at that time, and upon reasonable grounds, that performance would not infringe copyright. The point of this provision is that the actual performers may well not be worth suing, whereas the owner of the venue may have deeper pockets.

21 What Is Not Infringement? Introduction Because the various activities that amount to infringement are defined widely, there are cases where it is necessary to provide exceptions. In principle there are two ways of doing this. You could do what the Americans do – simply provide that ‘fair use’ of a copyright work is not an infringement, leaving it to the judges to decide whether a particular use is ‘fair’. Or you could do what we in the UK do and provide an insanely detailed list of exceptions. ‘Fair use’ has the advantage that it can be shaped for new circumstances and tailored to the particular case in hand. But it has the disadvantage of a larger degree of uncertainty (what is fair to one may seem unfair to another) than a precise list of exceptions. The CDPA contains around 50 exceptions. We obviously cannot consider all of these – some of which are arcane indeed – so we will concentrate here on just the main ones. But before we do, we must first consider consent, for, of course, it is no infringement to do something which the copyright owner has permitted.

The Owner of the Copyright Cannot Control Legitimate Copies Consent can be specific or general. It is therefore perfectly permissible for a copyright owner to give someone consent to perform a work but not to copy it, or to copy it but not to issue copies to the public, etc. The copyright owner, although given broad powers of control over infringement by copying and dealings with infringing copies, has no control within a single country over the resale of copies that are legitimate. Once these enter free circulation, their purchasers can deal with them as they please, provided they commit no further infringing act. In the UK, this follows from the wording of the Act: all forms of secondary infringement consist of doing something with an ‘infringing copy’ (this includes imports of things which if made in the UK would infringe). Some examples illustrate the distinction: an ordinary business letter gains copyright as a literary work. A competitor who gets hold of an indiscreet letter and distributes copies of it will infringe that copyright. However, provided they get hold of the letter lawfully and properly, there is nothing to stop them showing the

Specific Exceptions  179 original to customers: a more troublesome proceeding perhaps, but probably just as effective. So, too, the purchaser of a painting will usually not also purchase the copyright in it, but that only matters if they want to copy it: a painting’s owner can sell or exhibit the original without troubling about copyright. It is only ‘infringing copies’ of works that are dangerous in normal handling. This general rule is subject to modification in relation to copies of works coming from outside the UK. We consider this in more detail in Chapter 27. No formalities are needed for ‘consent’ to operate; however, unless the consent takes the form of a proper licence (such as is considered in Chapter 22), it can be withdrawn for the future at any time. Consent must be obtained before the acts to which it applies are done. In particular, a copy made without consent is an infringing copy. The flipside of this coin is that if, at the time when a copy was made, the making had consent, then that copy is an authorised copy and the copyright owner has no more control over it – unless, once again, additional infringing acts are committed.

Specific Exceptions As we have said, the CDPA lays down a number of specific exceptions to the rules for infringement. Several apply only to particular categories of ‘works’. Examples of some too niche for detailed discussion here include the use of typefaces (artistic works) in the ordinary course of printing; the public reading or recitation by one person of a reasonable extract from a published literary or dramatic work; and the recording of folk songs for archival purposes. What follows are those of more general application.

Temporary Copies We noted in Chapter 20 that the making of a copy that is transient or incidental to some other use of the work would still be an act of infringement. Whilst sensible in itself, the extension of liability to such copies has the potential to wreak havoc in the modern online world – every time an email is opened or a web page is displayed, for example, a copy of the content is made in the RAM of the device on which it is viewed (not to mention the parts cached on the hard disk). If all of these copies required consent from the owner of the copyright in the work, then either the internet would grind to a halt or else we would have to engage in ungainly debate about implied licences. Happily, consent is not required, as specific exception is made for such transient or incidental copies which have no independent economic significance, and which are created as an integral and essential part of a technological process for certain purposes (including to enable lawful use of the work). The defence applies to all works other than computer programs and databases (for obvious reasons) and broadcasts.

180  What Is Not Infringement?

‘Fair Dealing’ Defences The CDPA includes a number of general ‘fair dealing’ defences which cover specific activities (or ‘dealings’), provided that any stated conditions are complied with. A court will first determine objectively whether the defendant’s activity is of the right kind, and then assesses whether, in the circumstances, the defendant’s dealing was a fair one. ‘Fair’ here means little more than that the treatment must be genuinely and reasonably for the purpose. Again, this is objective, and not whether the defendant honestly believed that their use was fair.

Non-commercial Research and Private Study First, copyright will not be infringed by fair dealing of a work for purposes of noncommercial research or private study. For instance, it would be an infringement in an examination paper for anyone to publish or copy and distribute the paper either before or after the examination concerned, but not for a student to make a single copy of a past paper for the purpose of revision. This is clearly an act for the purpose of private study, and making a single copy of such a work would be ‘fair’ in the sense of the Act. This is also a type of activity that copyright law is not, in any case, well adapted to prevent. On the other hand, to copy a large part of a librarybound textbook for ‘private study’ when the work is on sale and a copy could have been bought probably would not be ‘fair’ and so would be infringement, Universities UK v Copyright Licensing Agency, 2002. This is currently a matter of great concern to university libraries and the like – they cannot afford the licences needed to make all textbooks free online, yet need to do this, particularly in Covid times, when students can’t get to libraries. ‘Research’ in this context will include both research in the traditional sense – for example, to prepare for a scholarly essay on a subject – and also things like printing out product reviews from the internet when researching a potential purchase. The Act makes a distinction between ‘private study’ and ‘research’. Not only must the latter be non-commercial, either directly or indirectly, but the defence only applies if the research includes a sufficient acknowledgement of the source materials. In both instances, the defence only applies to the individual student/researcher (or a librarian delegated to make the copy on their behalf). There are separate provisions in the Act which specifically cover the activities of educational establishments, such as schools, universities and libraries.

Non-commercial Text and Data Analysis This is one of the defences introduced in 2014 following a government review, undertaken a few years earlier, of how well the copyright system was adapted to the digital environment. Text and data mining involves the computational analysis of the contents of a work to identify patterns or trends in a body of works which would be impossible for a human researcher to detect. Provided that a person has

Specific Exceptions  181 lawful access to a work (e.g. by paying a subscription to a journal), then they may copy that work in order to subject the material to computational analysis, but only for non-commercial purposes. Additionally, the copy must be accompanied by a sufficient acknowledgement of the source work whenever this is possible. There are also limits on what can be done with the copies made for this purpose, so that subsequent resale or reuse for other purposes is not permitted. However, this defence applies irrespective of any term in an agreement with the copyright owner that purports to prevent such activities. The fact that commercial use falls outside this exception is a severe limitation, not least because many of the socially useful data mining activities will be commercial in nature. For example, advances in artificial intelligence means that this technique can be used to trawl through huge volumes of scientific material to identify potential new uses for old pharmaceuticals which are already known to be safe. This would not fall under the defence, notwithstanding that copyright was never intended to protect facts, information and ideas contained within protected works. Furthermore, it would not be an infringement merely to read or browse through a copyright work – which is arguably what the computer is actually doing.

Criticism, Review or Quotation and Reporting Current Events Fair dealing with any copyright work for purposes of criticism or review is not an infringement provided the work has already been made available to the public and the review/criticism acknowledges the title and author of the work. Again, the dealing with the work has to be fair, although the criticism of it need not be (at least for copyright purposes)! Any extract may be published if this is genuinely intended to enable the reviewer to make their comments. However, the courts are alive to the prospect of infringement being dressed up as criticism/review where the purpose of the reproduction is, in reality, something different. Accordingly, student study notes that abridged copyright works, reproducing substantial portions of them with critical commentary, were not protected by these provisions, Sillitoe v McGraw Hill, 1983. The dealing was not fair: the real motive of the copyist was simply to enable the reader of the notes to enjoy the work concerned without buying it. This said, valid criticism, for example of a literary work, is not limited to commenting on the literary style, and evidently extends to the underlying ideas and thoughts expressed by the work, Hubbard v Vosper, 1972, and the doctrine and philosophy behind a work or its creation, Pro Sieben v Carlton, 1999. Whether the whole of the work can fairly be published in a review or criticism will depend upon the circumstances: a whole short story could probably not be, but the decision will inevitably be very fact specific. Similarly, it is not an infringement to quote from a published copyright work, provided that the use is accompanied by a sufficient acknowledgement (where practical) and the use is fair. In some instances, this might overlap with the defence for criticism and review, but it also covers quotations used for other purposes. In the case of the latter, the quotation must be ‘no more than is required’. To some

182  What Is Not Infringement? extent, this seems to overlap with the fairness requirement, since arguably a fair quotation would only reproduce the amount of the protected work required to make the point. Finally, there is no infringement in fair dealing with any work – other than a photograph – for the purpose of reporting news or current events in any media format. Sufficient acknowledgement is again required to accompany the report unless, in respect of reporting by means of sound recording, film or broadcast, this would be impossible for reasons of practicality or otherwise. What is ‘fair’ for this purpose is less clear. Evidently, the amount reproduced, and the purpose and necessity of that use, as well as the motives of the copier, will all be relevant considerations. ‘Criticism or review’ and ‘reporting current events’ are terms of wide and indefinite scope which should be interpreted liberally, but the actual (subjective) intentions of the defendant are of limited importance in assessing whether the use of the work was for those purposes. The provisions are intended to protect the role of the media in informing the public about matters of current concern to the public. The upshot is that, provided the use is reasonable and is genuinely directed to the purpose of criticism, review or reporting current events, it is unlikely to infringe.

Parody, Caricature and Pastiche Until recently, making a parody based upon another’s copyright work was potentially a copyright infringement, depending upon whether the parody reproduced a substantial part of the original work. This was graphically illustrated by a case involving a label very similar to the Schweppes Indian tonic water label (an artistic work), but with Schlurppes on it instead. It was intended as a joke for use on bubble bath. Schweppes did not find it funny; they sued. History does not relay whether the court was amused – in any event, it granted Schweppes summary judgment, Schweppes v Wellingtons, 1984. This changed in 2014, since when fair dealing of a work ‘for the purposes of caricature, parody or pastiche’ does not infringe copyright in that work. The Court of Justice of the EU (CJEU) has held that a parody has two essential characteristics: it must evoke an existing work, while being noticeably different from it, and it must constitute an expression of humour or mockery, Deckmyn, 2014. While this definition will influence UK courts in their application of this exception, the defence is not a carte blanche for parodies and the like since fairness must also be considered. Therefore, parody of a famous artwork may be legitimate as a piece of social commentary, but a Schweppes-like case, where one trader’s advert parodies the better known one of their rivals, may not be fair dealing since the motive for doing this is purely commercial. Additionally, a parodist may be caught out if they select a copyright work that is also protected as a registered trade mark, since there is no equivalent parody defence in trade mark law – although there probably should be.

Specific Exceptions  183

Other Statutory Defences Incidental Inclusion There is a rather narrow exception for incidental inclusion of copyright material in an artistic work, sound recording, film or broadcast. The defence covers situations like that in which an outside broadcast relays a song being played over a loudspeaker on a pleasure boat as it sails by (which would ordinarily be infringement by communication), or where a photograph of a public monument catches an advert on the side of a bus as it drives past. The application of the defence requires consideration of whether the inclusion really is ‘incidental’. Obviously, where material is specifically chosen for inclusion in the work, it cannot fall within the defence, regardless of whether it appears somewhere in the background. Accordingly, where a publisher producing football cards featuring pictures of famous players in their team strip was sued by the FA (which owned the copyright in a logo displayed on the shirts), the Court of Appeal held that this was not incidental, FA v Panini, 2004. The whole point of the photo was to show them in their strip, and the logo was integral to this.

An Artist Reusing Sketches, etc. It is not an infringement for the author of an artistic work who has parted with the copyright in that work to make use again of preliminary sketches, models, etc., provided that this is not done to imitate the first work. That is to say, the author may use details again, provided they do not actually copy them from the work where copyright has been sold, but only separate details. It is, of course, never easy to show that an artist has infringed their own copyright, for if their style is at all individual, one picture of theirs is likely to be much like any other of a similar subject.

Representation of Artistic Works in Public Places To paint, draw or photograph a building, or a piece of sculpture or such like work that is permanently displayed in public, is not infringement; nor is the publication or communication of the picture. Neither is it an infringement to include such a work in a film or television broadcast. This is sometimes called ‘freedom of panorama’. There are, of course, restrictions on photography in many public places, but they are not copyright-based restrictions. The pictures themselves are, of course, protected by copyright, and their reproduction would need the consent of the owner of that copyright.

Broadcasts For the showing/playing of a broadcast in public, there is a specific defence that operates where the audience has not paid for admission to the place in which the

184  What Is Not Infringement? broadcast is to be seen or heard. This defence extends to films and certain (but not all) sound recordings contained within the broadcast, but does not apply to other works. Accordingly, a free public showing of a broadcast containing a recording of a speech (a literary work) will benefit from the defence as far as the copyright in the broadcast is concerned, but will still infringe the copyright in the literary work (subject, of course, to any other defence that may be applicable in the circumstances).

Time-Shifting Recordings made for the purpose of time-shifting are not infringements. But the recording must be made ‘solely for the purpose of enabling it to be viewed or listened to at a more convenient time’. So, there is nothing wrong in building up a personal library of films shown on television, provided that convenience is the motivation. However, dealing with any copies so made (by, for example, offering for sale or hire, or by communication to the public) will render the copy ‘infringing’ for that purpose – and therefore invoke the secondary infringement provisions. There is a range of other detailed fair-dealing provisions dealing with broadcast programmes and provision of subtitled copies.

Computer Programs Computer programs present a special problem. There has to be a balance between the desire of creators of programs to earn revenues, on the one hand, and the wishes of users to make back-up copies and the opportunity for other developers to create new programs which are compatible with existing ones, on the other. The result is that it is not an infringement (for a lawful user of a program) to make back-up copies where they are necessary for the purposes of their lawful use. Nor is it an infringement to convert a program from a low-level language into a highlevel language (i.e. decompile it), or to copy it by doing so, provided it is necessary to decompile it to create an independent program which can be operated with the existing one and the information so obtained is not used for any other purpose. Also, it is not an infringement to do things necessary to use the program, such as correcting errors in programs, unless that is specifically forbidden by contract.

Other Cases There are various provisions permitting reproduction and performance of works in the course of school lessons, and a rather limited provision permitting the publication of anthologies for school use. There are also special provisions allowing the supply by libraries of copied extracts from books and periodicals, and a provision allowing general copying, from archives, of unpublished works whose authors have been dead for more than 70 years. It is not an infringement of copyright to do

Problematic Situations  185 any act for the purpose of parliamentary or judicial proceedings. Of course, it is also not an infringement to do an act under specific statutory authority.

Problematic Situations Personal Copies for Private Use As we mentioned in Chapter 20, copyright differs from the other main IP rights in that infringement may result from private use, and not just use that occurs in a commercial context in the course of trade. In practice, however, few copyright owners ever sued individuals over their private use, and many consumers just assumed that they already had a right to make private copies of e.g. CDs that they already owned. Recognising this, the CDPA was amended in 2014 to include a specific exception for personal copies for private use. However, following a legal intervention, R (British Academy of Songwriters, Composers and Authors and others) v Secretary of State for Business, Innovation and Skills, 2015, this revision was held unlawful because it failed to provide for any form of compensation paid to copyright owners to offset the private copies made – a requirement of the relevant EU Directive on which the provision was based. So, although copyright owners are still not enforcing their rights against individuals, there is still no general private use defence. It remains to be seen whether the Government will seek to reintroduce one at some point in the future, especially since the UK is no longer tied to the compensation element post-Brexit.

The Public Interest, Control of Information and the Human Rights Act Copyright can give its owner very great control over aspects of the information recorded in a work – for example, it can be a very effective instrument for stopping publication of embarrassing things, and interim injunctions are often available to restrain copyright infringement. However, as has been noted, copyright protects expression and not ideas (or facts) themselves. In contrast, therefore, to actions for breach of confidence (Chapter 25), which will provide protection over information per se, copyright is troubled less often by questions of balancing its proprietary interests with the human right of freedom of expression. In most cases, there is no need to reproduce someone else’s expression to disseminate the information their work contains – and so arguments that the ‘public should know about this’ will rarely assist a copyist’s defence. The information can usually be presented in a different manner and so not infringe in the first place. That is what the Court of Appeal said in Hyde Park v Yelland, 2001, though the trial judge (one of your authors) said ‘a picture conveys more than a thousand words’, and he still thinks

186  What Is Not Infringement? he was right! To the extent that reproduction is a necessity, there is always fair dealing – verbatim extracts of published works for the purpose of criticism, review, quotation or news reporting will evidently be acceptable provided that the dealing is fair, and that sufficient acknowledgement is given. However, there are potentially situations in which this might not be enough, and where the public interest can only be fulfilled by more excessive reproduction. Where freedom of expression really is in the balance, there are two alternative solutions: first, the court may simply refuse to grant an injunction – it is, after all, a discretionary remedy; second, it may apply the public interest defence. The Court of Appeal has noted that the circumstances in which public interest may override copyright are not capable of precise categorisation or definition, Ashdown v Telegraph, 2001. Nevertheless, the Human Rights Act 1998 would suggest that there is a clear public interest in protecting freedom of expression – giving a third party a right to perform a restricted act with the copyright work verbatim – in those rare cases where this free speech right trumps copyright. Nevertheless, the circumstances in which public interest will prevail will probably be few and far between, and decisions will inevitably be very fact specific.

22 Dealings in Copyright Introduction The right given to authors of preventing other people from reproducing their works is of very little value in itself. The main problem most authors face is to get to a position where anyone wants to reproduce their works at all! Once this has been solved, a whole group of legal questions arise: not only formal problems of transfer of copyright, but various other questions, as to the terms on which reproduction shall take place, what money is to be paid to the author and to HM Revenue and Customs, and so on. This chapter is concerned with questions of this type.

Formal Problems On Transfers of Copyright Copyright can be freely transferred, either as a whole or for a particular field – for instance, the film rights in a novel or the performing rights in a play can be transferred separately from the right to print and publish. Any such rights can also be transferred for the entirety of the copyright term or for a more limited term. In fact, copyright can be carved up pretty much as the parties please. Nevertheless, formalities must be satisfied: the transfer, whether whole or partial, must be in writing and signed by, or on behalf of, the assignor. An assignment may also be prospective. The CDPA permits future assignment of copyright in a work that has yet to be created, without need for any subsequent assignment once the work comes into existence. But an actual transfer (even prospective) is not the same as a mere agreement to transfer. Consider, for instance, the common case of a book or article commissioned by a publisher for a lump sum, on the understanding that the publisher will be the copyright owner. Even if there is a written agreement to that effect, an agreement entered into before the work is created will not – then and there – transfer the copyright unless it also expressly assigns the copyright and is signed by, or on behalf of, the prospective first owner of the copyright. Only then does the copyright belong to the publisher when the article or book comes into existence. Otherwise, the author will continue to own the copyright (although having agreed that the publisher shall have it).

188  Dealings in Copyright Some publishers, but not all, do demand actual assignment in such cases, though all could if they wished. For most purposes, the position is the same as if the copyright had been transferred; but the difference will become important if any sort of dispute arises. If the copyright is infringed, for instance, and the publisher wishes to sue the infringer, either the publisher must get a written assignment of the copyright, together with the right to sue for past infringements, or the action will have to be brought in the author’s name – though the publisher must pay for it and will be entitled to any damages that may be recovered. Or again, suppose there is a dispute as to who owns the copyright. The author (either thinking themselves entitled to do so or acting dishonestly) sells the copyright to a second publisher, who knows nothing of the agreement with the first. The second sale will be effective, as the author remains the copyright owner, and the only remedy the first publisher has is to sue the author for breach of contract. (If the second publisher knew of the agreement, or even if circumstances were such that they ought to have found out about it, then they will, however, be bound by it.) This distinction between selling and agreeing to sell runs right through the English law of property. It is not a special feature of copyright or IP more generally. There are many problems that cannot be understood unless this is borne in mind. In connection with the sale of a house, for example, few people forget that although there is an ‘exchange of contracts’ to agree terms of sale, until the house has been formally conveyed to its new owner, it is not theirs. But with intangible property, like copyright, this is not so easy to remember. There was a case, for instance, of the reconstruction of a company which had many various assets. They included a valuable copyright that was never transferred, as intended, to a new company. The omission was discovered only after the old company had been dissolved. The difficulty could be, and was, overcome, though it meant going to court. But that sort of thing costs time and money. Few companies would wind themselves up without, for instance, handing over the land on which their factory was built, but copyrights can easily be overlooked by transactional lawyers. In the context of a big takeover, IP rights are not at the forefront of their minds! The company, and their lawyers(!), were fortunate, but as assets of a dissolved company pass to the Crown as bona vacantia (ownerless property), the copyright could have been purchased by a third party before the omission to assign it had been discovered.

Foreign Formalities The copyright in any country outside the UK can – so far as English law is concerned – be dealt with separately from the UK rights. However, where foreign copyrights are concerned, any transfer must conform to the legal requirements of the country concerned. Some countries demand more and some less in the way of formalities when property is transferred. An assignment valid by English law which purports to assign a foreign copyright will usually suffice, but it is seldom wise to rely on this. In some countries, copyright protection may involve formalities, and failure to register may involve inconvenience. In countries, including the

Contracts Relating to Copyright  189 USA, which have legislation regulating monopolies (as well as having copyright laws differing in some respects from ours), it is always unwise to try to attempt transfer without local advice. Of course, those who are much involved in copyright matters (film, book and music publishers, for instance) have rule-of-thumb methods for handling foreign copyright problems, which usually to work well enough.

On Licensing An owner of copyright who does not want to transfer it outright may license it: that is to say, they may grant to someone else the right to do acts that would normally infringe that copyright. For this, no formalities are required – the grant may be made orally just as well as in writing – however, a more permanent record obviously carries with it certain evidential benefits. There is also a distinction that must be watched: that between a licence and a mere consent to the doing of certain acts. In the strict sense, a licence simply provides permission, perhaps within specific parameters and for a certain period of time, to perform an act that would otherwise infringe. It does not convey a proprietary interest, and therefore in its general form does not provide standing for the licensee to bring an action in their own name or a right to transfer the licence to others (although this latter permission may be included in the licence itself expressly or by implication). As such, it may appear to offer little that a mere consent does not. However, the CDPA does provide for licences to enjoy certain proprietary elements. Thus, a licence can give rights enforceable against the owner (in case they change their mind), or against anyone to whom the owner transfers the copyright (except a purchaser in good faith for valuable consideration and without knowledge (actual or constructive) of the licence, or a person deriving title therefrom). A mere consent, on the other hand, can be withdrawn by the copyright owner or overridden by a sale of the copyright, leaving the other party with nothing except (possibly) a right to sue for breach of contract. An exclusive licence, moreover, i.e. a licence authorising the licensee to do certain acts to the exclusion of all other persons, including the person granting the licence, carries even more rights, as it provides the licensee with standing to bring an action for infringement on their own account.

Contracts Relating to Copyright Apart from the points already mentioned in this chapter, dealings in copyright are entirely a matter for contract: that is to say, those concerned may make what rules they please. What has happened in relation to any particular copyright must consequently be deduced from such agreements, formal or informal, as the parties have made; this may be a matter of very great difficulty. In particular, it should be assumed that any agreement drawn up by the parties themselves will prove difficult for lawyers (including judges) to sort out: the former and latter have quite

190  Dealings in Copyright different ideas both as to the way they use language and as to the sorts of things that agreements ought to provide for. It is, however, possible to lay down a few general rules as to what the position is likely to be if the parties have said nothing definite to the contrary.

Implied Terms In all cases, the law is very wary of reading into agreements terms that the parties have not actually stated. The rule is that a term will only be implied if the agreement cannot be effective without it, so that there can be no doubt that if, when the contract was made, the parties had been asked whether this was what they wanted, they would both have said, ‘Yes, of course’. For example, if there is a sale of a copyright work of art, the copyright will not be transferred with the physical work unless the parties agree that it shall. This is obvious in the case of a work with many copies, like a coloured print; it is not so obvious in the case of something like a painting of which only the original exists. But if the parties are silent as to the copyright, the law will not assume that they meant to transfer it unless it is clear that this must have been so. In the case, say, of a sale of a painting to a maker of Christmas cards, if both parties knew that the purchase was for the purpose of making a Christmas card version of the work, it will be clear that they must have meant that the purchaser should have some right to reproduce the painting; but it does not necessarily follow that this means ownership of the copyright, rather than a licence to reproduce. In any event, unless there is something in writing assigning the copyright, the purchaser will get merely a contractual right to have the copyright assigned over or a licence granted, as the case may be.

Where Works are Made to Order Commissioned works present a special problem (Chapter 19). It will often be clear (if not expressly stated) that the parties meant the copyright to be transferred to the party commissioning the work. A term in their agreement to that effect will then be implied. For instance, where a publisher commissions a book for a lump sum payment, even if nothing is said about copyright, it will normally be assumed that the publisher is meant to have it. The author is not an employee (so as to make the publisher the first owner of the copyright). Nevertheless, for a lump sum payment, the publisher presumably expects to get the whole thing, copyright and all. (But remember, there will only be an agreement to assign the copyright to the publisher, not an actual transfer, unless the signed agreement says it is a transfer.) On the other hand, if payment is to be by royalty, there will be no reason to suppose that the publisher is necessarily to have more than a licence to publish. In one case, Robin Ray was asked by Classic FM to compile a list of suitable works for playing on its UK radio station. When Classic FM sought to use the list for other purposes, Ray sued, arguing that they had no licence to do so. Classic FM retorted

Contracts Relating to Copyright  191 that they owned the copyright in Ray’s compilation, but even if they didn’t, their use was licensed. The court disagreed, finding that the work was Ray’s and that Classic FM did not enjoy a licence to do anything more than was contemplated at the time of the agreement, Ray v Classic FM, 1998. Similarly, in the case of an architectural work, even if specially commissioned, the only term as to copyright which will be implied into the contract is a licence to the architect’s client to erect the buildings contracted for in accordance with the drawings. The architect will therefore retain copyright.

Where a Publisher Agrees to Publish an Author’s Work There are cases, however, where it is clear that the parties must have intended to provide for quite a number of matters that they said nothing about. So, if an author has sent the manuscript of a book to a publisher and the publisher agrees to publish it, and nothing else is said at all, then the law will imply, grudgingly, the bare minimum of terms to complete the contract. The publisher has a licence to publish an edition of the book, but that is all: the author of course keeps the ownership of the copyright. The publisher must pay the author a reasonable royalty, based upon the sort of royalty an ordinary publisher would normally pay for that sort of book published on those terms. The publisher must publish a run of an edition of the book, of reasonable size having regard to all the circumstances, within a reasonable time. A reasonable time for publishing a book in these days will be many months, and there would certainly be no obligation upon the publisher to hurry unduly; but they must not deliberately delay. The publisher must not, for instance, as one once did, deliberately delay publication so as to enable a rival to scoop the Christmas market with a book on the same subject – in return, of course, for a share of the profits on the rival’s book. Finally, the publisher is not entitled to publish the book under someone else’s name as author. The position might be different if they owned the copyright outright; then they could probably deal with the work as they pleased, subject to any moral rights that might apply (Chapter 23). In the same way, if a manuscript is sent to the editor of a periodical, the editor may publish it, but must pay a reasonable rate. Their usual rates will usually do, and will certainly do if the author has taken them before. But a periodical which usually pays unusually low rates should tell new authors about them before publication, or it may find that the court considers them unreasonable. The editor of a periodical is not entitled to publish in book form manuscripts sent to him for periodical publication without the author’s consent.

Bequests of Copyright Works In one case, the CDPA itself creates a presumption that copyright runs with the property in the actual work: where an original document or other material thing, recording or embodying an unpublished literary, dramatic, musical or artistic work,

192  Dealings in Copyright or a sound recording or film, is bequeathed by a will which does not mention the copyright. Of course, this presumption only applies so far as the testator owned the copyright at the time they died. It is only a presumption – if the author bequeaths their physical property to A and their copyright to B, then A and B will have to do a deal – A has no licence to publish, and B cannot permit publication because they haven’t got access to the work. This was the background of a case about an unpublished Charles Dickens short story, re Dickens deceased, 1935.

Sales of Part of a Copyright The same sort of considerations arise when a copyright is partially sold (or otherwise assigned). Here, the position tends to be clearer, for the parties must have said something about what they intend shall happen; and all the lawyers have to decide is what the parties’ words mean. (The answer may surprise the parties, but that often happens to those who are insufficiently explicit in the first place.) Thus, the sale of the performing rights in a play or a song will not pass the right to make films or recordings of the work, unless there is some special reason why the parties must have meant this to be so; but it will pass the right to prevent any film or record of the work being shown or played in public. This will be vital in the case of a play to be made into a film, which is almost certainly intended for public exhibition (unless, perhaps, it is meant solely for export to a country where either there is no copyright or the performing right has not been sold); but it will be less important to the maker of a record. Records and CDs, as normally sold, are – like their digital equivalents – in fact not licensed for a public performance. Every UK sound recording at least bears a notice to that effect, and a similar notice is also buried in the terms and conditions of all the leading digital download services.

Publishing Agreements Two odd points relating to publishing agreements deserve mention. Such agreements often contain a clause requiring the author to offer their next book (or next so many books) to the same publisher. This is a perfectly legitimate clause for a contract to contain and can be enforced: a court will grant an injunction not only to prevent the author disposing of those books elsewhere, but also to prevent another publisher, who took those books (knowing about the agreement), from publishing them. On the other hand, an agreement to write a number of further books would not be enforceable by injunction: injunctions are not given to compel the performance of personal services. The second point is more difficult. Suppose the author, not being under any obligation to offer their next book to the same publisher, writes another on the same subject and offers it to a second publisher, who publishes it and so spoils the market for the first: has the first publisher any remedy? Or suppose the publisher

Contracts Relating to Copyright  193 puts out a second book on the same subject at the same time, and so spoils the first author’s sales: has the author any remedy? The answer will, of course, depend on what the publishing agreement says, and since the publisher will very likely have drawn it up, it will probably protect them against the author but not vice versa. If the agreement is altogether silent on the subject, it seems fairly clear that in an ordinary case the author would have no remedy; probably the publisher would have none either, but this is not quite so clear.

Literary Agents It is usual for established authors at least to employ literary agents to place their books and deal with the various forms of copyright arising from them. Here again, the respective rights of the author and the agent – as against each other – are whatever they agreed them to be when the agent took the job. Against the outside world, however, the agent’s powers to deal on the author’s behalf will be those that such agents usually have. Authors can, provided the agent is agreeable, place specific restrictions on the agent’s authority; but such special terms and restrictions will have no effect against third parties who do not know of them.

Manuscripts Sent for Advice It is not unusual for authors to send their works to more successful/established colleagues for comment, advice and assistance in placing with publishers or producers. The rights of the author in such a case are clear. The recipient of the manuscript must not, of course, publish it (though they may be expected to show it to one or two colleagues) or copy from it.

Collective Licensing Collective licensing is a tool used by right holders to grant licences on standard terms to those who used copyright materials in circumstances when it would be impractical or uneconomic to negotiate bespoke licences with the users of protected content. Instead, collective management organisations (‘CMOs’), or collecting societies, manage the licensing of copyright works to users and collect royalties for the right holders. In the music industry, for example, the rights for the use of musical compositions and lyrics are handled by the Performing Right Society (PRS) on behalf of songwriters, composers and publishers, while Phonographic Performance Ltd (PPL) collects and distributes on behalf of performers and record labels. In 2018, the two formed a joint venture, PPL-PRS, to streamline arrangements, making it easier for businesses and other organisations to play music (e.g. to employees or customers via the radio) or perform it in public (e.g. for use in a village play)

194  Dealings in Copyright by obtaining a licence covering use of both the authorial works and the sound recording. In the case of a film, including previously published music, the film company buys a licence to include the music in the film (there are standard arrangements for this), but does not have authority to license public performance of it. The cinema requires a standard PRS licence, which covers that. The film distributor, in effect, warrants that an exhibitor will have no copyright trouble, provided their cinemas are PRS licensed, i.e. the film company is expected to look after performing rights in any book or play the film is made from, but not performing rights in music except that especially written for the film. The actual agreements used in the film industry tend to be rather incomprehensible, but custom has established what they are supposed to mean. The CDPA established the Copyright Tribunal, with the power to see that the standard licences are not unreasonable, replacing the Performing Right Tribunal, which exercised similar powers. This control of licensing by the Copyright Tribunal is of great importance, especially in the entertainment industry, where collective licensing bodies are commonplace. Reporting in 1988, the Monopolies and Mergers Commission (as it was then called) recognised that CMOs were by their nature monopolistic and that appropriate controls were needed to ensure that they do not abuse their market power. As well as setting terms for collective licensing schemes, the Copyright Tribunal can, for example, determine royalties for the rental right, grant certain consents on behalf of performers in certain circumstances and settle the terms of licences of right. It can also take remedial action following a determination by the Competition and Markets Authority that the copyright owner is engaging in anti-competitive practices contrary to the public interest.

Taxation and Authors The question of tax upon authors’ earnings, important as it is, can be dealt with here only very briefly. The position is broadly this. Any author who makes a business or profession of writing or composing, or anyone who makes a business of dealing in copyrights, must pay income tax on the whole profits of that business, whether they are received in the form of royalties or as lump-sum payments. Those who do not make a business of it, like casual authors or people who happen to have come into possession of an odd copyright, must pay income tax on receipts if they are income, but not if they are capital. It does not necessarily follow that royalties are income, though they usually are; still less does it follow that lumpsum payments are capital. The test is more or less this: was there a valuable asset, and has it been converted into money (in which case, the proceeds of conversion will be capital) or has it been used as a source of profit – as an income-bearing investment, so to speak? If it has, that profit will be income. The sale of an existing copyright by someone who has never written a book before, whether for a

Taxation and Authors  195 single payment or an annual payment, may be capital, and not taxable by income tax. On the other hand, a royalty of so-much-a-copy on the sales of a book is almost certainly income, even if it is paid as a lump sum when the agreement is made. If a work is commissioned, the payment is almost certain to be received as income whatever form it takes: essentially, it is payment for services, not the sale of any asset. Thus, the author of a really successful work will find some difficulty in arranging their affairs so as to avoid paying out, in one or two years of extremely high income, most of what they gets for it. However, such an author is allowed to spread out’ (for tax purposes) payments received to a reasonable extent over a longer period.

23 Moral and Other Related Rights Moral Rights Introduction Moral rights have nothing to do with morals. They are special rights conferred by the CDPA to give creative people a sense of artistic control over copyright works that they have authored. The name comes from the French (‘droit moral’). The French and Germans have traditionally been much more interested in these kinds of rights. The main moral rights are unlike a lot of the rest of intellectual property: they are about creativity and art (and, above all, reputations), not economics – or so the orthodox theory goes. Artists and writers are often (and generally rightly) concerned about two things: fame and the ‘artistic integrity’ of their works. Of course, both can be of commercial importance too; fame is usually swiftly followed by profit. Much of the popular appeal of intellectual property is derived from stereotypical images of the starving (balding and bearded?) inventor in a garret or impecunious artists eking out a living from a bare paint-splashed studio. Moral rights are inspired by a slightly different popular image: the artist whose creative genius goes unrecognised while their works are sold on every street corner; or the writer whose creative abilities are brought into disrepute by distasteful alteration. They are principally concerned with protecting the reputation of the artist or author. As such, they are independent of, and separate from, any copyright that may vest in a work. There are four kinds of moral right that pertain to copyright works – although there are also moral rights in performances (see below).

Right to be Identified as the Author The right to be identified as the author of a work applies to literary, dramatic, musical or artistic works and films. There are certain exceptions, such as computer programs (which, as we have seen, are treated as literary works). This right is sometimes called the ‘paternity right’, probably also from the French. It may be thought that this term is physiologically and psychologically implausible, as well as being sexist. Indeed so.

Moral Rights  197 An author (or film director) has the right to be identified as such, broadly speaking, whenever the work in question is exposed to the public. So, in the case of literary work, whenever the work is published commercially, authors can insist that their name appears as the author. Or, in the case of a film, when it is shown in public, is communicated to the public or copies are issued thereto, the director can insist on a credit. Similarly, architects can insist that they are identified on the buildings they have designed. But before authors can insist on identification, they first must assert their right. There is no set way to do this, but a simple document, signed by the author or director, or a clause in an assignment of copyright will suffice. It is now common to see at the beginning of books (including this one) recognition that the author/s have asserted their rights to be identified as such. If the right is infringed, the author can claim damages (or possibly an injunction) as a breach of statutory duty.

Right to Object to Derogatory Treatment The right to object to a derogatory treatment of your work is arguably the most troublesome of the moral rights. Not every alteration made to the work will be a ‘treatment’, and although the CDPA says that a treatment is derogatory ‘if it amounts to distortion or mutilation of the work or is otherwise prejudicial to the honour or reputation of the author or director’, there is no real guidance as to what this means. The florid terminology ‘honour or reputation’ sounds like something out of another age, and the precious few cases that have discussed the term have (perhaps wisely) resisted the temptation to assess this standard purely through the eyes of the aggrieved author themselves. Instead, the courts have generally adopted a pragmatic view. Accordingly, in one case, colour variations and other ‘trivial’ alterations that could have been the ‘subject of a Spot the Difference competition in a child’s comic’ were not considered objectively sufficient to comprise derogatory treatment, Pasterfield v Denham, 1999. In another, an objection to the overlaying of a musical track with a rap vocal that was claimed to contain references to violence and drugs was defeated on the ground that no evidence was presented concerning the claimant’s honour or reputation, or indeed of any prejudice to either, Confetti Records v Warner Music, 2003. (Arguably, the case is more noteworthy for the judge’s comments that ‘the words of the rap, although in a form of English, were for practical purposes a foreign language’.) Since the law is intended to protect the author’s reputation, it is not an infringement if the author is not identified or has not previously been identified with the work, or if there is a sufficient disclaimer. There is no general right to prevent mutilation – the right is mainly there to prevent people thinking that the author was responsible for it. Also, for example, making an adaptation or arrangement cannot amount to derogatory treatment per se – it must also be detrimental to the author’s honour or reputation.

198  Moral and Other Related Rights This moral right does not apply to works made for reporting current events or in relation to the publication in newspapers or works made for that purpose. Nor does it apply if an author creates a copyright work as an employee, such that the copyright is owned by the employer. There are certain other exceptions. For example, the BBC (and only the BBC) can chop works around with impunity in order ‘to avoid the inclusion in a programme broadcast by them of anything which offends against good taste or decency, or which is likely to encourage or incite to crime or to lead to disorder or be offensive to public feeling’. This exception was probably procured by the BBC as a result of its experience (pre-moral rights) in contract law. A playwright who had sold it a radio play successfully objected to its being broadcast yet omitting the vital line: ‘My friend Sylv told me it was safe standing up’, Frisby v BBC, 1967. As with the right to be identified as the author, the right to object to derogatory treatment is infringed, essentially, by people who put the mutilated or distorted work before the public – for example, by publishing it, issuing copies, showing/performing it in public, etc. The right to object to derogatory treatment is also infringed (essentially) by people who deal in works which have been subjected to derogatory treatment knowing or having reason to believe that those works have been subjected to derogatory treatment. Remedies are, again, principally damages, although a specific injunction may be granted on terms prohibiting the doing of any act unless a disclaimer is made dissociating the author or director from the treatment of the work.

False Attribution of Authorship The law of defamation is designed to provide a remedy if people say untrue and unfortunate things about people. The right to object to false attribution of a work is similar in intent. Few things are as likely to bring a reputable author into disrepute as it being said that ‘so-and-so wrote X’, where X is some especially unmeritorious work. Accordingly, individuals have the right not to have a literary, dramatic, musical or artistic work falsely attributed to them as author. It gives a similar right to directors in relation to films. Again, it is an infringement to put a work before the public in or on which there is a false attribution (for example, by exhibiting it if it is an artistic work or by issuing copies to the public if it is a literary work). It is also infringed by someone who deals in works on which there is a false attribution knowing or having reason to believe that there is a false attribution thereon. There are various other restricted acts. The right not only protects authors and directors. It is potentially valuable in the hands of interviewees of newspapers.

Examples The News of the World published an article with the headline ‘How My Love for The Saint Went Sour by Dorothy Squires talking to Weston Taylor’. (‘The Saint’ was

Other Related Rights  199 a well-known TV series, with the protagonist played by Roger Moore.) Dorothy Squires sued for libel and for false attribution of authorship. In the Court of Appeal, Lord Denning said, with characteristic pithiness: ‘The article purports to be written by Dorothy Squires. It says “By Dorothy Squires.” That was untrue. She did not write it.’ The jury awarded her £4300 for the libel and an extra £100 for false attribution of authorship, Moore v News of the World, 1972. Alan Clark, a colourful Conservative MP, also relied on this provision to stop a spoof of his diaries written by a satirist which appeared in the Evening Standard. Many readers thought it was the real thing. He had not written it, and he won as well, Clark v Associated Newspapers, 1988.

Right to Privacy of Certain Photographs and Films If a person commissions a photograph or film for private and domestic purposes, and if copyright subsists in the resulting work, the commissioner has the right not to have copies of the work issued to the public, exhibited or shown in public, or otherwise communicated to the public. Commissioned wedding photographs and videos should therefore be safe to some extent from media exposure.

Duration of Moral Rights and Waiver Moral rights last so long as copyright subsists in the work, save that the right to object to false attribution only subsists for 20 years after the author’s death. None of the rights are assignable, but all (apart, once again, from the false attribution right) can be disposed of by will – the anomalous right is exercisable post mortem by the former holder’s personal representative(s). Any of the moral rights may be waived by an instrument signed in writing by the person giving up the right. People who commission works often insist on that.

Other Related Rights Performers Rights and Recording Rights Bootlegging has long been a problem in the entertainment business. Until the CDPA, there was a kind of legal fudge which gave performers some rights to prevent these. There were also criminal provisions. However, the effect of the fudge was to give performers rights that were too extensive, and to give recording companies (who cared most about bootlegging) no real rights at all. The CDPA attempted to sort this out. In essence, the Act now gives performers ‘economic rights’ to control the exploitation of their performances, and separate moral rights

200  Moral and Other Related Rights to be identified and to object to derogatory treatments. It also gives a party having exclusive recording rights in connection with such a performance the right to prevent exploitation of illicit recordings (either by dealing in copies of them or by broadcasting the performance). Various criminal offences are also created. There are certain qualifying requirements (mainly nationality or residence of the performer, or the place where the performance took place). These are very liberal, and the likelihood is that if the person performing would qualify for UK copyright, they would be entitled to performers’ rights as well. To be entitled to recording rights, the party must have an exclusive recording contract (i.e. a contract entitling that person, to the exclusion of all others including the performer, to make recordings for commercial exploitation). Similar to performers’ rights, recording rights are given, essentially, to prevent others exploiting illicit recordings. Performers’ rights and recording rights subsist for 50 years from the end of the calendar year in which the performance takes place or, if during that period a recording of the performance (other than a sound recording) is released (in the sense of being consensually published, played or communicated to the public), 50 years from the year in which it was released. However, if a sound recording is released, then the performers and recording rights last for 70 years from the end of the calendar year in which it was released. Performers’ moral rights last for as long as that performer’s rights subsist in relation to the performance.

Artists’ Resale Right The artists’ resale right (ARR) was introduced into UK law in 2006, as the result of an EU Directive. Certain works of art, such as paintings and sculptures, are exploited by sale of the original work, rather than by sale of multiple reproductions. Often, young, unknown artists sell their works at a low price. A lucky few become famous and the works they sold when young become very valuable. It was thought unfair that the artist should have no reward for that. Subject to certain conditions, eligible artists (if living) or their estate (if not) are due a royalty each time their work is sold on the professional art market for more than €1000 (yes, post-Brexit, it’s still in euros) for as long as copyright subsists in the work. The royalties are collected by a collecting society on the artist’s behalf. There is no evidence that it has done any good except to artists whose work has gone up in value a lot and don’t really need the money.

Copy Protection – Anti-circumvention Companies, particularly in the entertainment and software industries, increasingly try to ensure that their works cannot be copied by using copy protection technology. This prevents copies from being ripped from (say) a DVD or stops them being made in an unauthorised way. In 2003, the UK strengthened its anti-circumvention

Other Related Rights  201 legislation by revising the CDPA to implement an EU Directive to stop people selling (and using) devices intended to circumvent copy protection. This has been invoked by Sony to stop a trader selling chips which could be fitted into a games console to trick the device into believing that the games software being played had the necessary embedded authentication codes. This enabled the console to play not only authentic games software, but also unauthorised copies and genuine games intended for foreign regions. Sony obtained summary judgment, Sony v Ball, 2004. Nintendo also got in on the act by obtaining summary judgment in respect of the sale of cards designed to get around the copy protection in its handheld games consoles, Nintendo v Playables, 2010; Nintendo v Console PC, 2011.

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part v Miscellaneous Matters

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24 The Criminal Law and Customs Seizure Introduction Some types of IP infringement are so dishonest or otherwise wicked that they are crimes. Some laws are specifically targeted (e.g. offences under the Hallmarking Act 1973). IP laws are more general. In the UK, trade mark, copyright and registered (but not unregistered) design legislation provide for offences. There are none under UK patent law, but in some countries there are. There are those who say we should have patent offences here too, but the mind boggles at the idea of a magistrates’ court or an Old Bailey jury deciding issues of infringement or validity.

The Trade Marks Act 1994 If someone applies a sign to goods or packaging which is identical to, or likely to be mistaken for, a registered trade mark, or sells goods which bear (or the packaging of which bears) such a sign or has such goods in their possession in the course of business for the purpose of selling them, an offence may be committed. The defendant must have acted with a view to gain for themself or another or with intent to cause loss to another and, obviously, without the consent of the proprietor of the trade mark. Also, the goods concerned must be goods in respect of which the trade mark is registered, or the registered mark has a reputation in the UK and the use of the sign takes unfair advantage of or is or would be detrimental to the distinctive character or repute of the trade mark. This is like one of the tests for civil trade mark infringement. But, unlike the civil wrong, it is a defence to show that the defendant believed, on reasonable grounds, that the use of the sign in the manner in which it was used was not an infringement. Johnstone, 2003 considered this. The defendant sold bootleg Bon Jovi CDs. Not surprisingly, the label of the CDs said the band was Bon Jovi. The band had registered Bon Jovi as a trade mark. The House of Lords held first that the criminal offence was no wider than the civil offence of infringement – any other conclusion would have been astonishing, though the criminal trial judge (who would have no experience of trade mark law) got it wrong. Second, it was a question of fact whether a sign was being used descriptively. Third, even

206  The Criminal Law and Customs Seizure though a defendant has a defence – a reasonable belief that the use was not an infringement – the defendant carried the burden to prove that this defence applied. In reality, this means the offence is one of near absolute liability. It is no use, for instance, for the defendant to say: ‘but my customer knew it was a fake’ (see Morgan, 2006) or that ‘this was such obvious rubbish that no one could think it was genuine’ (see Boulter, 2008). There are a couple of riders. First, although the Johnstone court considered the CJEU decision in Arsenal v Reed, 2003, it did not know of the Court of Appeal decision that extended protection beyond trade mark use (Chapter 10). Would Johnstone’s descriptive use of Bon Jovi amount to infringement under the civil law now? And if so, should he have been convicted? We leave the reader to ponder. Second, it seems clear that Johnstone would have been guilty under copyright law provisions – so why was he not charged under these, given that there was a potential legal problem with the trade mark case? We offer two possible reasons. The first is simply that the prosecution was not very competent – it blundered (IP is not the everyday fare of many prosecuting authorities). The second is that a copyright charge may have needed witnesses, e.g. as to performance or creation of the musical work, and that seemed too complicated. For ourselves we favour the first explanation, but no one will ever know.

The Copyright, Designs and Patents Act 1988 It is a crime for anyone, without the licence of the copyright owner, to make for sale or hire or to import (otherwise than for private or domestic use) any article which is, and which they know or have reason to believe, is an infringing copy of a copyright work. This provision has come into greater play in recent years, especially with the increase in penalties and in the powers of police searches and seizure powers brought about by the Copyright etc. and Trade Marks (Offences and Enforcement) Act 2002. There are also some private prosecutions. Some prosecutions collapsed because of technicalities – which matter much more in the context of a criminal charge, where a person’s liberty may be at stake, than they do in a civil case, where the problem is usually cured by an amendment. These days, prosecutions are often in the context of ‘designer’ goods. In the summer of 2021, for instance, the police (led by the City of London Police’s IP Crime Unit, or ‘PIPCU’) seized 12 tonnes of these in a warehouse in Manchester. Arrests and prosecution followed. Much earlier, and before most people knew the internet existed, a man was given a year in prison for supplying copyright games over it, Lewis, 1997. Illicit dealings in recordings which breach rights in performances (‘bootlegs’), fitting games consoles with devices to overcome a technological measure aimed at preventing the playing of pirate games and dealing in unauthorised decoders for satellite TV are all punishable criminally.

Other Criminal Laws  207

Registered Designs Act 1949 Making or dealing in what ordinary language would call close knock-offs (the statutory language is more pompous) of a registered design are offences under a provision of this Act as amended for the umpteenth time in 2014. Unbelievably, the provision is section 35ZA! It is not easy to find out how many prosecutions or convictions under this provision have taken place. There is some pressure by designers to have it extended to unregistered design right, but it is not clear that this would do much, if any, good.

The Consumer Protection from Unfair Trading Regulations 2008 The general criminal law about unfair trading with the public is now largely set out in these, made to comply with EU requirements for harmonisation of laws about consumer protection. The rules are primarily aimed at consumer protection, but they also have the significant incidental effect of protecting IP owners. They say generally that ‘unfair commercial practices are prohibited’. They then set out six categories of these. Each has a detailed definition. Here, we just set out those most relevant to IP. First, it is an offence for a trader to engage in a commercial practice which concerns any marketing of a product (including comparative advertising) which creates confusion with any products, trade marks, trade names or other distinguishing marks of a competitor. This conduct is actionable provided it causes, or is likely to cause, the average consumer to take a transactional decision they would not have taken otherwise. In deciding whether this will occur, account must be taken of the factual context and of all its features and circumstances. Secondly, it is an offence for a trader to engage in a commercial practice of promoting a product similar to a product made by a particular manufacturer in such a manner as deliberately to mislead the consumer into believing that the product is made by that same manufacturer when it is not. Broadly, therefore, the criminal law covers the same ground as that covered by the civil action for passing off. That is hardly surprising, since the heart of passing off lies in misrepresentation to consumers.

Other Criminal Laws Other laws which can be employed to tackle counterfeiting and piracy are: (a) Serious collaborations to infringe by way of deceptive conduct – such as in Pain, 1986, concerning counterfeit Chanel perfume – can be prosecuted for criminal conspiracy under the Criminal Law Act 1977 or as a breach of the common law (conspiracy to defraud).

208  The Criminal Law and Customs Seizure (b) The Fraud Act 2006 makes it an offence for a person to have in his possession or under his control any article for use in the course of, or in connection with, any fraud. (c) The money laundering provisions of the Proceeds of Crime Act 2002 (POCA) were used in an attempt to take action against a market operator and its two directors in Wendy Fair Markets, 2008. The company had ‘turned a blind eye’ to the fact that as many as a fifth of its stallholders were selling fake goods. In the end, it was acquitted by the Court of Appeal, but only because the case was aimed at the management style, rather than the specific offences for which they were charged. (d) A person who is convicted of one of the principal counterfeiting or piracy offences in the Copyright etc. Act 1988 or the Trade Marks Act 1994 will be deemed to have ‘a criminal lifestyle’ under POCA and may be subject to a confiscation order – see, e.g. Priestley, 2004 (confiscation order for £2.29m). (e) Injunctive action under the Enterprise Act 2002 may be considered when breaches of ‘criminal lifestyle’ IP legislation harm the collective interests of consumers.

The Practical Working of the Criminal Law As an Alternative to Civil Action Although a criminal IP offence may have been committed, if (as is almost always the case) there is also a civil wrong, then civil proceedings by the trader affected by their breach (or sometimes their trade association) are nearly always preferable for a number of reasons. First, the civil court has the power to grant an injunction to restrain further acts of the type complained of and, in most cases, an injunction can be obtained very quickly. Secondly, the court can award damages (including additional damages in the case of a flagrant copyright infringement). Thirdly, the award of costs in a civil court is much higher than in a criminal court. Fourthly, the standard of proof required is lower (balance of probabilities for civil and beyond reasonable doubt for criminal). Fifthly, the procedure in a civil court is generally much easier than in a criminal court. Finally, civil proceedings are essentially under the claimant’s control, whereas the case may not be the public prosecutor’s highest priority. Next, there is the fact that IP law is apt to have tricky points. Prosecuting authorities are, with a few notable exceptions, not experts in IP law, and the law has lots of little pitfalls. For instance, in Higgs, 2008, the defendant had been converting games consoles so they could play pirate games. He was charged with the crime of selling a device designed for circumvention of effective technological measures. But over a three-day trial, the prosecution failed to prove a simple necessary element of the crime, namely that illicit, albeit temporary, copies would

The Practical Working of the Criminal Law  209 be made within the computers of the users. So, he got off, though he knew that he would not be so lucky a second time. Again, in Gilham, 2009, the prosecution made a complex meal of a case about pirate games, trying to say that the temporary copying of bits of a program was an infringement, when it had missed the straightforward case of infringement by copying whole images. It took the Court of Appeal to point that out. And, of course, there was Johnstone, which failed in trade marks, but which would have succeeded if a copyright or performance right offence had been charged. It follows that, in practice, the criminal provisions have their main application where the IP rights are clear, the real question being whether the defendant was responsible and how much they did. That alone can involve complex issues of fact. Nowadays, in cases of large-scale counterfeiting, prosecuting authorities are much more prepared to act than they once were. Thus, for instance, a largescale counterfeiter of golf clubs who sold them via eBay and who acted in a large global conspiracy was found guilty after an 11-week trial, Bellchambers, 2010. He got four years and co-conspirators lesser sentences. And in another case, Braha, 2011, a major dealer in fake Burberry shoes was subject to a confiscation order of £11m, with 10 years’ imprisonment if he defaulted. It remains the case, however, that prosecutors primarily concentrate on ‘consumer protection’ of the public at large, rather than enforcing IP for the benefit of the IP owner. Of course, the two concerns overlap. Thus, trading standards officers do take action against blatant pirates.

Enforcement Provisions The Copyright, Designs and Patents Act 1988 and the Trade Marks Act 1994 make local trading standards authorities responsible for the enforcement of the main offences. Trading standards authorities are empowered (by the Local Government Act 1972) to take proceedings. Authorised officers can make test purchases, enter premises (subject to certain conditions) and seize goods for the purpose of ascertaining whether an offence has been committed. It is also possible for a private prosecution to be brought, and they are (though rarely). A trading standard officer gave evidence for the vodka maker who was complaining in a civil action that another company was passing off its product, Vodkat (only half the strength of vodka), for the real thing, Diageo v Intercontinental Brands, 2010. In most cases, officers only act in plain cases of infringement and are more likely to do so if they receive complaints from the public. Often, in the case of counterfeits, the right holders also complain and assist in the prosecutions. There is nothing to prevent anyone who feels injured by another’s passing off or infringement of a mark from reporting the matter to a local officer: this will generally produce some result, if only a warning letter to the culprit. However, officers are unlikely to do anything until they have checked the complaint out for themselves. In Fage v Chobani, 2013, use of ‘Greek Yoghurt’ for what was, in fact, American

210  The Criminal Law and Customs Seizure yoghurt was held in a civil action to be passing off, but an earlier complaint to trading standards had not been taken. This is not atypical: the case was not entirely clear, and in practice it is not really the job of enforcement authorities to worry about marginal situations. In reality, the criminal law is only for serious and obvious cases.

Penalties These have become more severe over recent years – a response to the increase in counterfeiting and piracy. The current levels of penalty are provided by the Copyright etc. and Trade Marks (Offences and Enforcement) Act 2002 and the Digital Economy Act 2010. Broadly, the maximum penalty for serious cases is now 10 years’ imprisonment plus fines. Those who run companies involved in pirating can also be disqualified from acting as company directors for up to 15 years. Large confiscation orders can also be made.

Customs Seizures Another way IP owners can hold down infringement is by customs seizure of infringing goods as they enter the country. Broadly, the scheme is that IP right holders give notice to the Customs authorities of the existence of their rights, pay a fee and undertake to indemnify Customs if anything is wrongfully seized and the owner claims damages from Customs. The system has its limitations, for the obvious reasons that Customs cannot check anywhere near everything, and in any event are not exactly IP experts. They work best in cases of clear trade mark or copyright infringement – counterfeits. Even then, the owner must supply Customs with advance warning of the particular importation concerned, which means that they will probably have enough information to bring a civil action anyway. Until Brexit, we were also part of a similar EU system. The system does not apply to the traveller who brings home a book for ‘private and domestic’ use.

25 Confidence and Privacy Introduction Thus far, we have generally been discussing matters that have revolved around the acquisition or infringement of, or dealings in, types of right clearly recognised as property: turning certain, essentially non-proprietary, elements – technical or creative ideas, etc. – into something that the law will recognise and protect, and which thereafter becomes personal property. The subject matter of this chapter is different. It deals with information itself: secrets and confidences, things unknown by the public at large, things generally considered too slippery to be treated as property. There is some overlap with many of the things already discussed. For instance, confidence and secrecy are essential before a patent is applied for, as any open disclosure of the invention before the priority date will destroy novelty or make it obvious. Protection and enforcement of that secrecy is paramount. This chapter also straddles some of the same material as copyright. Not the right to stop others from reproducing a work as such, but rather to prevent them making use of information it might contain – a job which copyright will seldom do. Copyright ownership cannot be used to stop readers of a book from making use of what they learnt by reading it, from lending it to friends to read or even from reciting snippets of it in public to anyone who will listen. However, if the work is unpublished and unknown, and is given to another under conditions of secrecy, then the matter would be very different: the law will intervene to maintain the secret and restrain its use. The sorts of problems dealt with under breach of confidence will generally, although not always, arise in commercial matters: the inventor who shows the invention to a potential investor before patent applications have been filed; the manufacturer who supplies technical drawings and specifications to a subcontractor; the retailer who gives customer details to the manufacturer so that they can be supplied direct. In all cases of this sort, what the person who supplied the information really wants is to stop the recipient of the information from using it except for the purpose for which it was given. A mere right to stop the recipient from making copies, which copyright gives, is not enough.

Rights to Privacy The action for breach of confidence also has use in a less commercial context, as a vehicle to prevent (or gain compensation for) invasions of privacy. The most

212  Confidence and Privacy well-known cases concern celebrities or others in the public eye. These actions were given additional impetus by the ‘right to private life’ provisions incorporated into English law by the Human Rights Act 1998. We first look at the traditional law of confidence and then at the law of privacy.

The Action for Breach of Confidence The General Rule The law of breach of confidence is essentially concerned with the promotion of conscionable behaviour – if a person undertakes to keep a secret, then they should be held to this: there is a public interest in enforcing such pledges. Nevertheless, the rights to prevent unauthorised dissemination or use of the imparted information only arise in certain circumstances and are subject to certain exceptions. The general rule has been put in the following way, namely that a recipient of confidential information may not use that information without the consent of the person from whom it was received, Saltman v Campbell, 1948. Another way in which this has been expressed is that a claimant suing for breach of confidence must show three things: first, that the information has the necessary quality of confidence about it; secondly, that the information was imparted in circumstances importing an obligation of confidence; and thirdly, that there was an unauthorised use made of that information, Coco v Clark, 1969. There is a degree of overlap between the elements of this test: fundamentally, one has to know the extent of the obligation before one can consider if the use is unauthorised; equally, the quality of confidence may be provided by the circumstances in which it was imparted. Nevertheless, it provides a useful manner of structuring the inquiry, and is often quoted.

When Is Information Confidential? Circumstances Giving Rise to a Relationship of Confidence These can be shortly stated: a person can be prevented from misusing information given to them if, when they receive it, they agree, expressly or impliedly, to treat it as confidential. No formal agreement is needed, although having one helps to make the position clear to everyone from the outset. Most cases, by contrast, concern situations where the parties’ expectations were not so clear-cut. Where there is no express agreement, all the circumstances surrounding the relationship between the parties will be considered. If it appears that the parties cannot have intended the information to be given freely – often seen through the eyes of a reasonable person in the shoes of the recipient of that information – then it was given in confidence. A lot may depend upon how the defendant behaved. If

The Action for Breach of Confidence  213 information is given for a particular purpose, it is easily inferred that the parties intended the information to be used only for that purpose. The pupil-master of one of your authors put it this way when they first went out for coffee: ‘If you lend someone a teapot, they can’t mix paint in it.’ A few examples from cases, quite old but still regularly cited, will make the point clearer. In Seager v Copydex, 1967, an inventor had discussed his invention with the defendant with a view to their taking it on. During the discussion, the inventor mentioned another idea that he was working on. The defendant did not take the first invention, but they later launched a version of the second, even using the name which the inventor had given it. The court held that the defendant had taken the claimant’s idea, albeit subconsciously, and that the relationship between the parties must have been confidential since it could not be supposed that the inventor was giving the information away freely, but rather for the purpose of interesting the defendant in his product ideas. In Ackroyds v Islington Plastics, 1962, the defendant had been under contract to manufacture plastic ‘swizzle sticks’ (things for ridding champagne of those nasty bubbles) for the claimant. The claimant had supplied the defendant with information and a special tool for this purpose. It was held that the defendant could not use either the information or the tool to manufacture swizzle sticks on their own account, since both had been handed over solely for the purpose of helping them manufacture for the claimant. The next example shows that the law of confidence, although mostly finding its application in the commercial field, is perfectly general. In Argyll v Argyll, 1965, the then Duchess of Argyll sued to prevent the Duke from supplying to a Sunday newspaper (and to prevent the Sunday newspaper from publishing) what the Duke had said to her in confidence during their marriage, which had ended in divorce a little earlier. The judge said that the relationship was in its nature confidential and that the obligations of confidence continued after the marriage had ended. Similarly, in Fraser v Thames TV, 1982, three actresses had pitched the idea of a soap opera following the adventures of Rock Follies, an all-girl rock band, to Thames TV, assuming that they would take starring roles. Instead, the TV company stole the idea. It had to pay heavy damages for breach of confidence. In Attorney-General v Guardian Newspapers, 1990, the interim injunctions against publication of Peter Wright’s Spycatcher diaries in the UK were based on the author’s breach of confidence (the House of Lords said that the Crown might also be entitled to copyright in them). Similarly, in HRH Prince of Wales v Associated Newspapers, 2006, Prince Charles succeeded in an action to restrain publication of extracts from a handwritten travel journal in which he recorded his experience of, and thoughts about, the handover of Hong Kong to China in 1997. One of the Prince’s private office staff had taken a copy of the journal and given it to the Mail on Sunday. The Court of Appeal considered that the information had been disclosed in breach of a ‘well recognised relationship of confidence, that which exists between master and servant’; as the newspaper was aware of this, the Prince’s case was ‘overwhelming’.

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Trade Secrets – What Will Be Protected? A case called Faccenda Chicken v Fowler (yes, really!), 1987, said that there were two sorts of confidential information: that which was a true trade secret and information which had ‘some confidential element’. The latter would only be protected whilst the employee was still employed. Whether this distinction matters in practice is doubtful, but the UK Supreme Court approved it in Vestergaard v Bestnet, 2013.

Marking Things ‘Confidential’ We have said that the test of confidentiality is the express or implied understanding of the parties. It follows that marking a document ‘confidential’ will not necessarily make it so if the person who receives it does not know, and has no reason to believe or expect, that it is confidential. Emblazoning a copy of today’s newspaper with a handwritten banner proclaiming it ‘Top Secret’ will not bind any subsequent readers with an obligation of confidence in relation to it. The Government often marks documents ‘commercial in confidence’ in cases where that is obviously not so, or where public interest would override a duty of confidence. Nevertheless, there are situations in which such a marking may tip the balance.

Confidence and Contract Where parties are in a contractual relationship, they often expressly provide for obligations of confidence. Thus, normally no scientist will be employed by the research department of a company unless they agree to keep the company information secret, even after they leave it. But even where there is no such express obligation, the relationship between the parties may of its nature give rise to obligations of confidence: as in the ‘swizzle stick’ case above, or in Robb v Green, 1895, where an ex-employee was restrained from using a list of his old employer’s customers for his own benefit. The law of confidence exists independently from, but sometimes coincides with, the law of contract.

Where the Information Becomes Public Knowledge What if, by the time the action comes to trial, the information concerned has been either wholly or partly made available to the public? At first sight, it would seem absurd that a defendant should be under any restriction in using information which is now public knowledge. But things are not so simple if you think about it. The defendant may have obtained a considerable advantage from information which was confidential when it was supplied to them, even if it has become public knowledge since. One judge expressed this sort of situation vividly, saying the defendant was using the information

The Action for Breach of Confidence  215 as a ‘springboard for activities detrimental to the plaintiff ’. The exact scope of this notion is not well defined. At one extreme, it is clear that a business that lets all the information be disclosed by publication of a patent specification can no longer prevent ex-employees from revealing that information to others. It is also clear that the courts will give some relief to a claimant who shows that the defendant has obtained an unfair head start over others by using the claimant’s confidential information as a ‘springboard’, even when the information has later become public. In such cases, the courts say that although the information was derivable from public sources, that was not what the defendant did; instead, they relied upon the ‘tainted source’ of the confidential disclosure made to them. A defendant is likely to find themselves in difficulty once they fall under suspicion of having used a ‘tainted source’. It may then be no use trying to argue: ‘Look, I know I had dealings with the claimants in the past which were confidential, but I developed this machine by myself and here are my plans to prove it.’ The court may still feel that the idea originated from the claimant and find a breach of confidence, as in Seager, 1967. Accordingly, information may have a limited degree of confidentiality even though it can be ascertained by reverse engineering, or through compilation of public domain sources. Additionally, an injunction may be granted to prevent a defendant from benefiting from a past misuse of confidential information, even if the information had subsequently ceased to be confidential. Such injunction will be limited so as to simply remove the defendant’s head start: once information has become public, it cannot be a breach of confidence to gather it from public sources and use it for one’s own gain.

Remedies The remedies for a breach of confidence are much the same as those granted for the infringement of the other rights discussed in Chapter 2. Thus, injunctions can be, and often are, awarded, together with damages or accounts of profits. In some other cases, including Seager, the court will award damages only where this is considered enough to compensate the claimant. Here, the information was publicly known by the time of the action, and the defendant had not solely relied upon the information that Mr Seagar had disclosed. The parties disputed the way in which damages should be calculated, and the matter went to the Court of Appeal again upon this question (Seager v Copydex, 1969). It held that damages should be based on the market value of the information, which depended upon its importance: whether, for example, it was inventive enough to support a patent, or was merely the sort of information which could have been supplied by any expert. In any case, a court may be swayed by considerations of financial damage suffered by virtue of the defendant’s unlawful use (and thereby calculate on the basis of lost profits), or perhaps by the claimant’s propensity and willingness to license (and hence calculate on the basis of a reasonable royalty).

216  Confidence and Privacy A claimant who acts quickly enough may be granted an interim injunction in an appropriate case. Where the information taken is not yet public, for example, an interim injunction will preserve the status quo while the case is fought. Courts are less willing to grant such injunctions in ‘springboard’ cases partly because the questions of fact which arise (e.g. exactly how much of the information relied upon by the defendant was taken from the claimant and how much they have found for themselves) are too difficult to resolve without hearing all the evidence, and partly because a successful claimant in such cases will, in the end, only be awarded damages. Accordingly, in Coco v Clark, although the judge refused an interim injunction, he thought that, pending trial, the defendant ought to pay a potential royalty into a bank account, so that the claimant would be safeguarded if he eventually won, and the defendant gave an undertaking to this effect to the court to avoid an injunction.

Suing Third Parties If the owner of the information is able to act before it has been disclosed to any third party, then an injunction preventing disclosure should be all that is needed. If the information has already been passed, an injunction will not be much good unless it binds the third party too. Anyone who receives information that they know (or ought to know) reached them through a breach of confidence has a duty not to use or disclose it, and the court will in a proper case grant an injunction to enforce that duty. Thus, in Argyll, not only was the Duke placed under an injunction, but so too was the Sunday newspaper which was going to print the information. There were similar results in Spycatcher and Prince of Wales. The exact limits to the circumstances in which third parties are liable are not fully worked out because there have not been that many cases on the subject. However, it is probably fair to say that where someone pays for the information in good faith, they will not be stopped from using it. It would be different for a bad faith actor, for example where a company has bought information from someone knowing or having reasonable grounds to suspect them to be an industrial spy or an employee of another company. The case will be weaker if the information is passed on without payment.

Problems of Proof It might be thought that the law gives enough protection to confidential information to make dealing with it perfectly safe. That would be entirely wrong. As always, neither the general law nor even a carefully drawn contract is any real protection against dishonesty. The function of these things – of a proper contract, especially – is to make it clear, amongst honest parties to a transaction, just what they may and may not do.

The Action for Breach of Confidence  217 If a would-be claimant does come up against a rogue, the case may be difficult to prove. It carries the burden to show that the confidential information was disclosed to the rogue in circumstances giving rise to an expectation of confidence and that the rogue is using it. Sometimes the would-be claimant will not even know. Suppose Company A learns from an employee of (competitor) Company B that a particular line of research was tried, and found useless. This information will save A time and effort in trying that line, but B may never know. When it comes to information passed on to third parties, problems of proof become even harder.

Where the Action Will Not Lie ‘No Confidence in Iniquity’ Since the action for breach of confidence is founded originally upon what is conscionable, it is a creature of equity. The courts will accordingly not grant a remedy if the information which the defendant threatens to reveal or use is something which ought not, in conscience, to be protected. There are many examples in the cases. Thus, in Initial Towel Services v Putterill, 1967, the claimant was denied interim injunctions against an ex-employee and a newspaper when the ex-employee alleged that the information he gave to the newspaper showed that the claimant had been a party to a secret illegal price fixing arrangement.

Disclosures in the Public Interest As a variant of the above, breach of confidence may sometimes be seen as a balancing act between two competing interests: the public interest in ensuring that people respect obligations to keep things secret and a competing public interest in making certain information known. In cases where liability for breach of confidence is found, the balance falls one way, but in other cases it may fall the other. Thus, in Imutran v Uncaged Campaigns, 2001, the court permitted a campaigning organisation to disclose information concerning the welfare of research laboratory animals to relevant regulatory authorities, but not to the press, as it was in the public interest to do so. Equally, in Lion Laboratories v Evans, 1985, the court allowed disclosure of confidential documents to the press that showed the claimant’s breathalyser product was faulty. There was a wide public interest in knowing that convictions based on readings taken from the device might be unsafe.

Public Policy There are cases where, as a matter of public policy, agreements for confidence will not be enforced. The most important of these is in relation to skilled employees who leave one business to take up employment in the same field, perhaps with a

218  Confidence and Privacy rival manufacturer. The court will only enforce clauses in employment contracts preventing the ex-employee from working for the competitor, provided the restriction is not too broad in terms of the geographical area to which it extends and the time for which it runs. The court will also prevent an employee or ex-employee from disclosing the industrial or commercial secrets of their employer, irrespective of whether there is a clause to this effect in their contract of employment. However, a court will not prevent a person from using the general skill and knowledge (as opposed to confidential information) which has been acquired by reason of their employment. The line between general skill and commercial secrets is sometimes hard to draw; but be drawn it must, for otherwise skilled employees would never be able to change jobs. So important is the ability of a skilled person to do their job that even an express agreement seeking to bind the employee not to use such general knowledge will be invalid. The position of directors deserves special mention. Any information obtained by a director by virtue of their office is, in effect, held on trust for the company, and must only be used for the purposes of the company. Since the directors are responsible for the conduct of the business of the company, it is seldom open to them to say that they were not told and did not realise that the information acquired was confidential.

The Duty of Confidence Must be Owed to the Claimant In Fraser v Evans, 1969, the claimant sought an interim injunction to restrain publication of extracts of a confidential report prepared for the Greek government in a newspaper. It was held that although the report was confidential, and although the claimant owned the copyright in report, he could not succeed. The breach of confidence claim failed because the report belonged to the Greek government and not to him. Only the person to whom the duty of confidence is owed can sue to enforce it. He failed on copyright infringement since it seemed very likely that a fair dealing defence would succeed at the trial (Chapter 21).

Sale of ‘Know-How’ Secret ‘know-how’ is often treated as an article of commerce, which can be sold outright, like any other property, or be handed over on terms like those of a patent licence. Even a patent licence may often turn out, in reality, to be largely dealing in know-how, since it can be the know-how that is worth the money, rather than the more-or-less dubious monopoly given by any patent. This sort of transaction presents no great difficulty in the ordinary case where both parties are honest. Agreements governing such transactions deal in detail with the degree of ‘confidence’ to be attached to the information handed over, and especially with the position after the agreement comes to an end.

Difficult Cases  219

The Need for Agreements It is always better to have questions of confidence properly covered by agreement than to leave them to implications of the general law. Consider again the case of a manufacturer trying out an invention which an inventor has offered them. If everything goes well, there will be no issue. But suppose the inventor’s ideas turn out to be more-or-less unworkable. The manufacturer may then drop the whole scheme. But what is the position if, in the course of finding out that the original invention offered does not work, the manufacturer works out what is wrong, and then is able to make something that does work? The manufacturer, especially if they have paid for the right to have first go at the invention, will feel that they have taken nothing from the inventor that they have not paid for. The new improvement is theirs, and they owe the inventor nothing. The inventor will probably feel that the manufacturer is either being difficult or making unnecessary alterations so as to avoid paying a proper royalty. If a fight is to be avoided, there ought to be an agreement making it clear exactly what the manufacturer is entitled to keep if the original invention is rejected, and just exactly when a royalty or purchase price is in the end to be payable.

Difficult Cases Of course, there are difficulties no agreement can anticipate; especially as neither inventors nor manufacturers are always sensible or co-operative. For instance, a manufacturer is most likely to be interested when an invention presented to them aims to solve a problem that they are already aware of and, perhaps, have even been trying to solve. The reaction to seeing an outsider’s proposal may well be to reject it, while then being encouraged to revisit the in-house attempts and make them work – perhaps with a bit of help from the alternative proposals that the outside inventor has suggested. Inevitably, in most such cases, the inventor is adamant that the manufacturer has stolen their invention, and the manufacturer is equally adamant that they have merely pursued (as they ‘really’ always intended) their own previous line of development. They will never agree on the facts and may have to ask a court to decide between them. If a proper agreement is made, before the invention is disclosed, this should serve to limit the range of the dispute, and so will save time, costs and some bitterness, if nothing else; but even so, a dispute may be inevitable. It is worth examining in some detail the factors that make disputes so difficult to avoid in many matters of confidence. The instance just given suggests one factor: that much information seems very much more valuable to the person giving it than to the person listening. Another factor is well illustrated by the example of a wholesaler who lets suppliers know the names of their customers. The wholesaler’s position is inherently risky. Sooner or later, it will pay for the suppliers and/or customers to cut them out, and what they see as an ordinary change in business procedure will

220  Confidence and Privacy look to the wholesaler like dirty work. The middleman sees a list of customers/ suppliers as something of great value, since to them it is – but to others, the list is worth precisely what they would have to pay someone to compile it from business directories etc. So, often what really matters is not some trade secret, but just trade habits that nobody bothers to alter. The same thing can happen with industrial know-how: the difference between making something well and making it badly can be a matter of secret know-how, but is more often a matter of skilled management and skilled labour. If a skilled person changes their job for higher pay and their new employer’s products jump ahead in quality, it is easy to assume that some secret has gone with them, whereas in fact secrets played very little part in the matter. So, one gets a sort of typical case, where the defendant has been rather careless over the claimant’s confidence, not thinking it mattered much, and the claimant is over-suspicious, not realising that any competent person in the defendant’s position could do the job without anybody’s secrets. Both parties are sure they are in the right, and the result can easily be litigation, whose outcome will be anyone’s guess. There are people who deliberately set out to steal their employer’s secrets – as soon as the employer finds out, there are efficient and fast procedures available in the civil courts (search-and-seizure and bank-account-freezing orders) on top of the criminal law (see Chapter 24). Most of the litigation fought in this field, as in most others, however, is between people who just did not think sufficiently.

Privacy and the Press Whilst the UK courts have long protected personal confidences (in contrast to some countries), there was no general ‘right of privacy’ as such. The Court of Appeal so held in Kaye v Robertson, 1990. Journalists inveigled their way into the hospital room of the sitcom actor Gordon Kaye, who was recovering from brain surgery after an advertising hoarding fell on him during a storm. They interviewed and photographed him. The court said there was nothing he could do about it. Since then, the courts have developed remedies for cases where the press reveals or threatens to reveal information about individuals which they would prefer to keep under wraps. The Human Rights Act, which incorporates the European Convention on Human Rights (ECHR), has been a spur to this development. Article 8 provides that ‘Everyone has the right to respect for his private and family life, his home and his correspondence’. As such, the courts have developed an approach which amounts to a tort of invasion of privacy in all but name. There are now two separate and distinct causes of action: an action for breach of confidence, and one for misuse of private information, Vidal-Hall v Google, 2016. A major distinction between the traditional action for breach of confidence and that more recently developed in the name of privacy lies in the existence, or otherwise, of an obligation of confidence. The traditional action is functionally blind to

Privacy and the Press  221 the nature of the information it protects and will just as happily restrain publication of a commercial secret as a marital infidelity, provided, that is, that there is an obligation to be enforced. For many years, the courts pulled and stretched at the boundaries of this concept, struggling to construct an artificial relationship of confidence between intruder and victim. In more recent years, however, the need to manufacture an obligation in this way has been eradicated, replaced by a more straightforward enquiry as to whether the claimant has a reasonable expectation of privacy. In this way, an action based upon respect of privacy does not necessarily depend upon the confidentiality/secrecy of the information alone, PJS v News Group, 2016. Once a reasonable expectation of privacy has been established, it is then a question of balancing the right to private life under Article 8 with the right to freedom of expression under Article 10. And just as with the traditional action, there are some instances in which the public interest in protecting the claimant’s affairs will be outweighed by a broader public interest in disseminating the information – there is no confidence or right of privacy in an iniquity is the general rule for privacy claims too.

The ‘Ordinary Citizen’ and the ‘Celebrity’ Interesting questions arise over whether the law of privacy treats the ‘ordinary citizen’ somewhat differently from the ‘celebrity’. On the one hand, there are comments in some cases (albeit generally in dissent) that suggest those in the public eye have to expect and accept greater scrutiny. On the other are judgments in which the courts abstain, sometimes explicitly, from making any broad pronouncements, preferring instead to advocate an intense focus on the facts – which some may claim essentially amounts to the same thing. In some of the cases, shades of the maxim ‘As you live by the press, so shall you die by the press’ are evident. In particular, if someone actively presents a false picture to the public about matters which would ordinarily be private, the courts recognise that the press is entitled to expose the truth to the public. This was illustrated in Campbell v MGN, 2004. A tabloid newspaper ran a story about the supermodel Naomi Campbell attending Narcotics Anonymous. She had previous made a point of saying (falsely) that she did not use drugs. Her lawyers, therefore, did not even try to argue that the press was not allowed to report the fact of her drug dependency and the fact that she was seeking treatment, given that she had specifically given publicity to the very question of whether she took drugs. The case went to the House of Lords, which said (by a majority) that the newspaper had gone too far in publishing details, including photographs of her at the door of the Narcotics Anonymous meeting. An ordinary citizen who had not sought to reveal details of their private life would have an even stronger case for protection in respect of matters of this kind. But then, in a classic tale of chicken-and-egg, the papers would also inevitably be less interested in running such a story in the first place.

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How Much Can the Story Be Fleshed Out? Newspapers obviously want not only to print the bare facts of an embarrassing story, but to give it added colour or credibility by, for example, adding photographs of the activity in question. Assuming that publishing the facts is legitimate, how far can they go in illustrating the story? The answer is, unfortunately, not clear. On the one hand, there may be some judicial sympathy for the newspaper editor, who has to make quick decisions which may not always look so good when pored over in great detail in court. It is claimed, often vociferously, that unless there is reasonable latitude, the freedom of the press would be unduly curtailed. However, a line of cases stretching from the decision in the Campbell case adopted a rather stricter approach, involving consideration of whether publication of the ancillary material was necessary and whether it was likely to be harmful. Even so, the line between what is permissible embellishment of a factual story and what goes too far is not easy to draw. In general, the courts have tended to disapprove of the publication of photographs where the bare story would suffice to put the information before the public, as is evident in some of the examples below.

Some Examples In 2002, a children’s TV presenter sued to prevent publication of a story about sexual activity with prostitutes, accompanied by photographs. The court permitted publication of the story but not the photographs, observing that photographs had a particularly intrusive nature and that the courts were generally willing to prevent their publication, Theakston v MGN, 2002. In 2003, Michael Douglas and Catharine Zeta Jones successfully sued Hello! magazine, which published photographs of their wedding that had been clandestinely obtained. The couple had entered into an exclusive deal with a rival magazine, OK!, giving that magazine exclusive picture rights for a substantial sum. OK! were also claimants in the action, and they received the lion’s share of the substantial damages awarded, Douglas v Hello, 2003. In 2007, an action was successfully maintained against a photographic agency which supplied the Sunday Express with a picture of the infant son of author JK Rowling, being pushed in a pram on a public street in Edinburgh. The Court of Appeal considered that the fact the claimant in this case was the child tipped the balance in favour of finding that there was a reasonable expectation of privacy, despite the nature of the activity photographed being completely anodyne and occurring in a public place, Murray v Big Pictures, 2007. In 2021, the Daily Mail claimed that it was necessary for them to publish sizeable extracts from a private letter from the Duchess of Sussex to her father to correct a one-sided account of the reasons behind their estrangement, which another newspaper had published. Although the court conceded that the father had a right to correct inaccuracies, it was unnecessary and disproportionate to

A Brief Excursion into a Dry Debate  223 publish so much of the letter’s content to do this. Moreover, the court rejected the publisher’s claim that the article contributed to a debate of public interest, but saw it rather more simply as being ‘for the purpose of satisfying public curiosity’, Duchess of Sussex v Associated Newspapers, 2021.

A Brief Excursion into a Dry Debate A debate has smouldered in the pages of academic journals for over 100 years concerning the legal nature of confidential information. It is one thing to say that the law will prevent people from taking the fruits of breaches of confidence; it is quite another to work out (as a matter of legal theory) why such protection should exist in the first place. After all, there must be some basis for creating a liability. There are (essentially) three theories. The first (probably the most ancient) is property-based. This holds that confidential information is a kind of property just like any other which can be transferred and is protected by an action in essence similar to conversion of goods or trespass. There are numerous problems with this theory, not least the fact that breach of confidence does not provide rights in rem (which means enforceable against the world at large – anyone), but rather only rights against those touched with the obligation. Moreover, confidential information does not have at least one important incident of other personal property – you are not guilty of theft if you steal it. For example, Oxford v Moss, 1978 was a case of a student dishonestly getting access to an examination paper. If he had actually stolen the physical paper, that would have been theft – but he always intended to return it, so there was no intention permanently to deprive his university of its property. The second is the ‘contractualist’ theory. This holds that confidential information is protected because of a kind of contract, express or implied. Purely contractualist theories of legal liability are out of favour at present. In any event, this theory does not really make room for the notion of stopping a third party, who got hold of the information from the impartee, from using or disclosing it. It particularly does not fit the case of someone who receives the information in good faith and only learns it was confidential later. The third, currently dominant, approach is more nebulous. An equitable obligation of confidence is based on ‘good faith’ – the conscience of the defendant must be touched. An example is Vestergaard. A company had taken and used confidential information from the claimant. It was held liable for breach of confidence. The claimant also claimed against a director of the defendant (she had money), but had no knowledge of the information or that it had been stolen and no reason to suspect that. She was not liable because her conscience was not touched. Although the courts may not be able to define precisely when the principles will be invoked, they know a case for their application when they see one. As judges sometimes say privately: ‘s**ts lose’.

224  Confidence and Privacy The inability clearly to articulate a basis or framework for protection is not in practice serious. There are usually so many other uncertainties of fact in confidential information cases (such as whether the information has the necessary quality of confidence about it) that a bit of disquiet about the basis for granting relief does not matter. The important underlying point which this debate highlights is that monopolies protected in virtue of the ‘proprietorship’ of or control over confidential information are only regulated by the courts (subject to the general principles of the Human Rights Act) – obligations of ‘good faith’ are rather powerful and flexible legal tools.

The EU Trade Secrets Directive The EU passed the Trade Secrets Directive in 2016, aimed at those EU countries whose laws or legal procedures in this area were inadequate. It was implemented in the UK by The Trade Secrets (Enforcement, etc.) Regulations 2018, which continue in force post-Brexit. Thus, there is now a statutory basis for the protection of trade secrets. The Directive has its own definition of ‘trade secret’, which is not quite the same as that of Faccenda Chicken (it draws no distinction between ‘true’ trade secrets and information ‘with some confidential element’) – but, as we have said, that has not mattered in practice. So, it remains to be seen whether the legislation introduced will make any difference.

26 Database Right Introduction UK copyright law has long recognised the protection of collections of information, including rather mundane things such as timetables and football fixture lists, as ‘compilations’ – a sub-category of literary works. Readers will recall (from Chapter 18) that copyright restricts copying of the whole, or a substantial part, of a work. So, even though these things enjoyed copyright protection, there was technically no protection for the underlying data itself. Furthermore, until the Database Directive of 1996, there was no harmonised approach to the protection of compilations within the EU. Many countries did not think that mere compilation involved sufficient creative input from the compiler to deserve copyright. The Database Directive confirmed this. Therefore, despite, requiring that ‘original’ databases should receive copyright protection in all EU Member States, it defined originality rather restrictively. Accordingly, a database is original if, by reason of the selection or arrangement of its contents, the database constitutes the author’s own intellectual creation. What this means in practice is yet to be fully worked out, although the CJEU has ruled that intellectual effort exerted in creating data does not count. Protection is therefore narrower than the old UK approach, and things like football fixtures and lists of riders and runners are no longer protected by copyright. But the Directive also required Member States to create a new kind of intellectual property right: the sui generis (continental lawyers love Latin) database right, which can be used to prevent the extraction or re-utilisation of data in a qualifying database. The main purpose of the right was to protect the significant investment made in gathering large (increasingly online) collections of information together and presenting it in an organised way. The Directive was duly incorporated into UK copyright legislation. The Directive is a good example of how not to legislate. The vagueness of its drafting is immediately apparent. It even contains many more recitals (the preambles setting the context) than substantive provisions. In its 25-year life, the European Commission has consulted twice on whether the database right serves any useful purpose. In each case it concluded that it was mostly harmless – easier to leave in place as is, rather than reform or abolish – hardly a ringing endorsement.

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What Is a Database? A database is defined as a collection of independent works, data or other materials which are arranged in a systematic or methodical way and are individually accessible by electronic, or other, means. This definition is not limited to ‘electronic’ databases; any form will do. And it is very wide, covering much more than what one would ordinarily think of as a ‘database’, for example, a collection of journal articles which have been subject to an editorial process to arrange them in a logical order.

Subsistence of the Database Right A database right will only exist if the ‘maker’ of the database qualifies for protection. In broad terms, UK nationals, residents and businesses qualify. Prior to Brexit, the UK was also required to provide database rights to EEA individuals and businesses. While, under the terms of the Withdrawal Agreement, database rights that existed in the UK or EEA before Brexit will continue to exist in both territories for their duration, similar provisions were not put in place for databases created post-Brexit. As a result, UK makers are no longer eligible for database protection in the EEA and, conversely, EEA makers no longer qualify for UK database rights. Those based outside both the UK and the EEA do not qualify for database rights in either the UK or the EEA unless their country provides equivalent protection for databases. Notably, the USA does not.

Criteria for Protection To enjoy protection under the sui generis regime, there must have been a ‘substantial investment in the obtaining, verifying or presenting the contents of the database’. Any kind of investment will do (including financial, human or technical resources), and the substantiality of an investment is judged qualitatively and quantitatively. But, as has been foreshadowed above, there is one major qualification: no matter how much investment or work goes into creating a database, any efforts which are solely directed at creating the data do not count – this is the wrong kind of investment, Football Dataco v Yahoo!, 2012. This makes little intellectual sense, but one can see the policy reason for it – otherwise, you would get a monopoly in the data itself. Thus, the official lists of runners and riders at race tracks, or football fixture lists (the creation of each of which involves a lot of time, effort and skill), do not benefit from the database right, BHB v William Hill, 2004; Fixtures Marketing v OPAP, 2004. On the other hand, you do get a database right if you record what can fairly be regarded as objective data and put that into a database. In Football Dataco v James, 2013, for instance, the claimant sent people to

What the Database Right Protects  227 every football ground where a match was playing and got them to phone in to say what was happening and to provide information about goals, scorers and times. This information all formed part of the protected database. Thus, a database need not be ‘original’ to be protected, but one which is both original and results from a substantial investment of the right kind will be eligible for both forms of protection.

Duration and Dealings The database right lasts for 15 years from the end of the calendar year in which the database was completed or, if made available to the public, from the end of the calendar year in which it was made available to the public. However, if a database is updated regularly, the 15-year period begins to run again if the new (or revised) database would count as a substantial new investment. Database rights may be sold (by assignment, for example) and may be licensed.

What the Database Right Protects There are two kinds of prohibited act: extraction and re-utilisation of the whole or a substantial part of the contents of the database. Extraction is the temporary or permanent transfer of the contents to another medium. Re-utilisation is defined in the Directive as: ‘Any form of making available to the public all, or a substantial part, of the contents of the database by the distribution of copies by renting, by on-line or other forms of transmission.’ This depends on the scale of the investment which went into what was taken (see the BHB and Football Dataco cases above). What amounts to a ‘substantial part’ is considered both qualitatively and quantitatively. Repeated and systematic extraction of insubstantial parts of the contents of a database may amount to the extraction or re-utilisation of a substantial part where they imply acts which conflict with the normal exploitation of the database, or unreasonably prejudice the legitimate interests of the database’s maker. Whereas, in copyright law, it is an open question as to whether taking small but regular helpings, each of which is insufficient to infringe in itself, can constitute infringement in the aggregate, the Database Directive makes it clear that it is possible for this to constitute infringement.

Exceptions to Database Right Protection There are rather complex exceptions to protection for ‘lawful users’ and there are some of the same limitations as exist for copyright protection (e.g. parliamentary

228  Database Right and judicial proceedings). There are not, however, exceptions for criticism or review, or for reporting current events, and the education and research exceptions are narrower than for copyright protection. In addition, a CJEU decision confirmed, somewhat perversely, that contract terms can be used to impose stricter terms of use where a database fails to meet the protection requirements than is afforded by the sui generis right, Ryanair v PR Aviation, 2015.

Actions for Infringement of Database Right Actions for infringement of database right are very similar to copyright infringement claims. All the usual remedies are available (e.g. an injunction, damages, accounts of profits). Additional damages may be claimed in the case of flagrant infringements. Exclusive licensees may sue in their own name.

27 Reselling IP-Protected Goods: Licence or Exhaustion of Rights Introduction This chapter is about when IP rights can, and cannot, interfere with trade in genuine goods first sold by, or with the consent of, the IP owner. Can an owner use IP rights to control subsequent dealing in those goods, either in its domestic market or in international trade? As a matter of principle, we might think that the obvious answer to this question is ‘no’. The IP rights holder has had their slice of cake with the first sale, and so can’t ‘double-dip’ by requiring extra remuneration in every subsequent dealing of that thing – the first trade has ‘exhausted’ the right. Conversely, we might remark that the world is a big place and the ability of consumers to pay for goods varies dramatically from region to region. We might also ask whether an IP owner should be able to take advantage of this and charge different prices for the same product in different places – simply taking advantage of the economics of supply and demand? This itself is a loaded question. Profit seeking, despite being the basis of the capitalist economy, has a rather bad rap. However, price differentials can also be seen in another light. Take a pharmaceutical company which sells medicines to developing countries at cost (quite a few do). If the company can’t use its IP rights (especially patents or trade marks) to stop these low-cost medicines being immediately re-exported to high-price countries, such as the USA or most European states, you can be sure some arbitrageur will do just that. The pharma company is then discouraged from selling the low-price medicines. The same will happen if a publisher sells (or authorises a local publisher to sell) educational books in a developing country at a lower price than it sells at in developed markets. So, can IP rights be used to control resale? The answer, in a purely domestic context, is usually ‘no’. But when cross-border trade enters the equation, things become a little more complicated. IP rights are inherently territorial – they emanate from domestic laws or are granted (on the whole) by domestic registration procedures. So, they generally (in the case of the registered rights, always) provide that importation is, at least prima facie, an act of infringement.

230  Reselling IP-Protected Goods: Licence or Exhaustion of Rights Nevertheless, resale (even after importation) will be permitted if any of the following apply: 1. If the trade activity falls outside of the IP holder’s exclusive rights. 2. If the IP owner has consented to that trade – i.e. licensed it expressly or impliedly. 3. If the ‘exhaustion of rights’ rules apply. We consider each of these in turn.

Does the Trade Activity Fall within the IP Holder’s Exclusive Rights? Each type of IP needs separate consideration because each has its own set of exclusive rights which fall under the IP owner’s control. Patents give a right to stop, for example, the sale or use of a patented article; trade marks give a right to stop trade in goods offered under the mark. The definitions of infringement set out the range of activities which require the IP owner’s consent. For copyright, the position is a little more complex, and overlaps heavily with the next section on consent. While the owner gets the right to control the issue of copies to the public, this is limited to the first issue of a particular copy within the UK or EEA (a European artifact still maintained following Brexit), so that any subsequent distribution is outside of the copyright owner’s control. Infringement is also extended in the case of someone dealing in ‘infringing copies’, but even then will only bite where those dealing in them have knowledge that the copies are infringing (see Chapter 20). If they deal in non-infringing copies already in circulation in the EEA, they have no need for a licence. However, if they import the copies, the law says these are infringing if their making in the UK would have been an infringement or if it would have been a breach of an exclusive licence agreement. So, a mere licence to make and sell copies of a work in the place of export will not do. That is what enables copyright owners to license different publishers in different countries safe in the knowledge that copies will not cross from the territory of one licensee to another, or back to their home market.

Consent/Licence Things are different for different rights. Under UK law for patents, a patentee selling the patented product anywhere is taken to have granted a licence running with the goods under their patents worldwide. But in the contract of first sale, they can also restrict what can be done with the goods following that sale, e.g. impose a limited licence restricting where the goods can be resold. In the past (i.e. before competition law outlawed resale price maintenance), the contract could

Post-Brexit Trade between the UK, the EEA and the World  231 specify the minimum price at which the patented goods could be sold. To impose a limited licence, the patentee has, in the words of one judge, to ‘bring it home’ to the purchaser and those deriving title from them, Roussel-Uclaf v Hockley, 1995 (importation of a product made in China with a label: ‘For use in PRC only, re-export forbidden’). For trade marks, one might think the rule ought to be that if the goods are genuine goods marked by the trade mark owner, there is no infringement simply because there is no deception – all later dealings are dealings with the ‘real thing’. That was once the law in the UK, but not since EU harmonisation. This is partly because it falls under ‘double identity’ infringement (same mark, same goods) since deception is not a requirement, and partly because the CJEU focuses on the principles of exhaustion and free movement. It does not drill down into exactly what an IP right protects before applying these. For copies of copyright works made by, or under the licence of, the UK copyright owner, the position is that set out in the section above.

Exhaustion of IP Rights Exhaustion of rights (called the ‘first sale doctrine’ in the USA) is a means for limiting an IP owner’s control to the first sale or marketing of protected goods. It overrides what would, or might, be an infringement due to the territorial nature of IP rights. Exhaustion rules are important because they determine when parallel trade, i.e. cross-border movement of genuine IP-protected goods which have already been placed on a particular market with the rights holder’s consent, can take place. There is no international consensus on this. The TRIPS agreement (see Chapter 28) leaves the choice of national, regional or international exhaustion as a matter for each Member State. While recent CJEU case law has reinforced the CJEU’s ‘fortress Europe’ approach (the late Professor Cornish’s happy phrase), the US Supreme Court surprised many by recently adopting international exhaustion for both copyrights and patents.

Post-Brexit Trade between the UK, the EEA and the World As we write, the UK continues to recognise the pre-Brexit ‘regional’ exhaustion regime, such that IP rights in goods that are placed on the EEA market are exhausted both in the EEA and in the UK. Consequently, UK IP rights cannot be used to prevent parallel imports from the EEA. However, the EU has not reciprocated, meaning that IP rights can be used to prevent outbound parallel exports from the UK entering EEA countries.

232  Reselling IP-Protected Goods: Licence or Exhaustion of Rights Having consulted on the subject in 2021, the UK Government has recently stated that there is ‘not enough data available to understand the economic impact of any of the alternatives’ to the current regime. So, we stick with what we have, at least for now, as the powers that be also remain committed to ‘exploring the opportunities which might come from a change to the regime’. Speculation as to what they may eventually come up with is pointless, save to say that, as in all lobbying cases, the one who shouts the loudest may well win. Accordingly, for the time being, the statement of principles found below will apply to goods moving within the EEA or from the EEA to the UK. Goods originating in the UK, however, find themselves outside the walls of ‘fortress Europe’.

Free Movement of Goods within the European Economic Area In light of the EU’s commitment to free movement within its ‘single market’, the territorial characteristics of IP presented a problem. Primary EU legislation (Treaty on the Functioning of the European Union (TFEU) and its predecessors) is set against national rules that may operate to partition the market. EU law therefore prohibits restrictions on the freedom of movement of goods across national boundaries within the single market. Articles 34 and 36 TFEU provide for the free movement of goods. (The provisions were the same, but had different numbers in earlier versions – the important cases were decided under these.) Article 34 TFEU says that quantitative restrictions on imports and measures having equivalent effect are to be prohibited. Article 36 then gives specific dispensation to otherwise prohibited restrictions in certain areas and for certain purposes, including the protection of industrial (intellectual) property, provided that they are not a means of arbitrary discrimination or disguised restriction on trade between Member States. The CJEU (and the ECJ before that) worked out special principles which aim to reconcile the free movement of goods with the territoriality of IP rights. First, although EU law does not affect the existence of an IP right, there are circumstances in which the exercise of that right can be prohibited or curtailed. In other words, whilst, technically, some activities may be infringements, there may be good reason to restrict a rights holder’s ability to object to them in certain circumstances. Second, the IP owner’s rights are exhausted in respect of goods put into circulation, either by the owner or with their consent, anywhere within the EEA (EU plus Iceland, Liechtenstein and Norway). So, once IP-protected goods are sold in any EEA state, they are in free movement – they can freely be bought and sold – and there is generally nothing that the rights holder can do about it. Third, Article 36 TFEU permits exceptions to the free movement of goods only to the extent to which those exceptions are necessary to safeguard the rights that

When Rights are Not Exhausted  233 constitute the specific subject matter of the type of IP in question. This is simply another way of saying that free movement is very important within the EU and that exceptions will only be entertained in well-defined circumstances. The effect of these rules is best illustrated by examples.

Example 1: Patents Where First Sale is in the EEA Sterling Drug held patents for a urinary infection drug in both the UK and the Netherlands (both then part of the EEC, the precursor to the EU). They sold the drug cheaply in the UK, but it was very expensive in the Netherlands. Centrafarm bought some of the drug in the UK and shipped it to the Netherlands, selling for a handsome profit. Held: there was nothing that Sterling Drug could do about this. The rights were exhausted by putting the drug into circulation for the first time in the UK, Centrafarm v Sterling Drug, 1974. The rule applied even if the patent owner was seeking to restrain import into a country where it had a patent from a country where it did not – it had no right to ‘exhaust’, Merck v Stephar, 1981.

Example 2: Same with Trade Marks Metro bought ‘Polydor’-marked records in France (where they were cheap) and sold them in Germany (where they were expensive). Held: there was nothing that the trade mark proprietor could do to stop this. The goods were genuine, i.e. were made under the trade mark owner’s control, and had been placed on the market in the EU with their consent, Deutsche Grammophon v Metro, 1971. Subsequently, the free movement rules were specifically included within the trade marks legislation.

Example 3: Unconnected Parties Terranova, who had registered the mark Terranova in Germany, tried to prevent an unconnected company called Terrapin from importing building materials marked Terrapin into Germany. Terranova succeeded, since the respective marks and goods were similar enough to give rise to a likelihood of confusion, provided that the mark did not act as an arbitrary means of discrimination or a disguised restriction on trade between Member States, Terrapin v Terranova, 1976.

When Rights are Not Exhausted There are two situations in which a first sale by the rights holder will not trigger exhaustion.

234  Reselling IP-Protected Goods: Licence or Exhaustion of Rights The first is where goods are first put on the market outside the EEA, and it is not demonstrated that there is unequivocal consent to their marketing within the EEA. UK courts were initially sceptical of this as it applies to trade marks. (If the goods are original, what is the problem? The rights holder has already got their slice of profits when the goods were first sold. Why should it matter if this was in the EEA or elsewhere?) However, a number of decisions of the CJEU confirmed that ‘exhaustion’ was a regional EU concept, and that consent could not be inferred from such things as: silence; the lack of a warning notice being affixed to the goods; or the fact that the trade mark owner has not communicated to all subsequent purchasers their opposition to the goods being marketed in the EEA, Davidoff v AG Imports, 2001. Usually, therefore, consent will need to be expressly provided. The second situation is where the goods have been somehow tampered with or altered by the reseller after they were first marketed by the IP rights holder. Classically, this occurs in situations involving trade marks in situations where goods are repackaged or relabelled to better satisfy the market of the Member State of import. A derogation from the principle of free movement is permitted where this is necessary to protect the subject matter of the right. Essentially, repackaging is considered to affect the origin function of the mark, i.e. it serves as a guarantee of origin. Accordingly, repackaging is only allowable if: (i) it is necessary; (ii) it does not affect the condition of the goods – i.e. there is no physical impairment; (iii) the repackaging is not untidy, of poor quality or likely to injure the reputation of the mark; (iv) notice is given to the rights holder that the goods have been repackaged; and (v) the importer indicates on the new packaging that the goods have been repackaged, BMS v Paranova, 1996; Boehringer II, 2007.

Example 4: Debranding Duma purchased Mitsubishi forklifts from outside the EEA, removed all branding and imported them into the EEA. Mitsubishi sued Duma, arguing that removal of registered marks from the products amounted to trade mark infringement. The CJEU agreed: trade mark registration within the EEA enables the mark owner to control the first marketing of the branded goods in the EEA, and Duma’s debranding had deprived Mitsubishi of this right, Mitsubishi v Duma, 2018. Most trade mark lawyers in the EU, as well as in the UK, think that infringing a trade mark you’re not using is a nonsense! But the ‘fortress Europe’ mindset prevailed.

28 Some International Aspects and Competition Law Once upon a time, international considerations played but a small part of the work of an IP lawyer. Each country had its own IP laws, all differing from each other. But, as trade has become increasingly global, IP laws have had to follow. While IP rights remain essentially national rights, there has been increasing harmonisation of the rules affecting what the rights protect. The development of IP policy is also increasingly guided by international concerns. We have seen how EU law has redefined the IP landscape in its Member States, through the adoption of Directives that harmonise laws and Regulations that create pan-European rights. We have also seen how the European Patent Convention has harmonised the patent law of now 38 countries. Some international aspects of IP are broader still.

Public International Law Aspects A Little History The effects of IP have been felt at an interstate level for hundreds of years. Mediaeval monarchs offered temporary monopolies under letters patent to entice foreign artisans to England to teach native craftsmen their secrets, in order that the realm would be improved (stealing secrets is, after all, a brilliant way to advance). The first known such grant was by Henry VI in 1449 to a Dutchman for a new and better way of making stained glass. The system of one-off grants of monopolies for new trades continued sporadically, but Elizabeth I went one step further, selling monopolies in old trades as well, a practice brought to a halt (save for ‘manners of new manufacture’) by the Case of Monopolies of 1603 (a monopoly in playing cards invalid) and the Statute of Monopolies, 1624. There was no international regulation of patents then. That only began in the nineteenth century. The impetus for tackling IP at an international level came from a seemingly innocuous source: an international exhibition held in Vienna in 1873. Potential exhibitors were concerned that the IP laws of what was then the Austro-Hungarian Empire would provide inadequate protection for their creations. This threatened their participation in the exhibition. A special law was therefore passed securing temporary protection to foreign exhibitors. More critically, an international

236  Some International Aspects and Competition Law congress on patent reform was convened. This led to the talks that created the grandfather of international IP instruments: the Paris Convention for the Protection of Industrial Property 1883 (the last main amendment was in 1967). Nearly all countries in the world have signed up to it. The Convention has at its core the principle of national treatment, i.e. all countries party to the Convention must treat the nationals of foreign states the same as its own in matters to which the Convention pertains. Before then, states were perfectly free to discriminate on grounds of nationality. (Indeed, under the US Patents Act 1836, the official fee-scale distinguished between US and non-US citizens: whilst US nationals paid $30 for a patent, all others were asked to pay $300, unless, that is, you happened to be British, in which case you paid $500 – some grudges take a long time to fade.) The Convention also introduced various rules that made it simpler to gain IP protection in multiple states. One of the most important of these is the right of priority. This rule gives applicants a specified period (six or 12 months) following an initial application in one Convention country in which to file applications in others. An application made within this window is treated as having been made on the same day as the first application, with all the benefits that this brings. Following the Paris Convention, international attention focused on ensuring mutual recognition of IP rights, facilitating international registration and setting minimum standards for protection. The Berne Convention of 1886 (last revised in 1971) lays down fundamental requirements for the copyright laws of its signatory states: a minimum term of protection; no formalities (i.e. protection is not dependent upon registration, it arises upon creation of a qualifying work); national treatment, etc. This pattern was followed in other areas: the Madrid Agreement 1891 (trade marks); the Rome Convention 1961 (concerning Performers, Record Makers and Broadcasting Organisations); the Geneva Convention 1971 (Phonograms). The list could go on (but would be very boring if it did …). More recently, a series of multilateral (and some bilateral) treaties have focused on setting detailed minimum standards of IP protection and restrictions on the exceptions and controls that governments can exercise over IP rights.

The TRIPS Agreement The most important modern treaty is the TRIPS Agreement (The Agreement on Trade-Related Aspects of Intellectual Property Rights – no one mentions the missing ‘A!’ established by the World Trade Organization (WTO) in 1994. It requires members of the WTO (now nearly all countries) to adhere to fairly tight IP standards, in many cases going far beyond those demanded under earlier treaties. In significant respects, TRIPS places a straitjacket on its signatories, requiring them to uphold certain minimum standards of protection and removing much of the flexibility in setting an internal IP agenda available in the past – gone, for example,

Public International Law Aspects  237 are the days where state-sanctioned piracy of the type enjoyed by mediaeval kings would be acceptable. By bringing IP within the international trading system, TRIPS also provides something that was missing in all earlier Conventions: an enforcement mechanism. Accordingly, although the agreement is not directly effective in any UK courts, it has real teeth. Even the USA, which provides for generous protection in many respects, has been held by the WTO to have violated TRIPS by providing inadequate IP protection in a particular respect.

Issues with TRIPS and Subsequent Developments Subsequently, TRIPS had faced much criticism. This mainly stems from a perception that the standards it sets prevent developing countries from copying themselves into greater prosperity. There is an extensive academic debate among economists and lawyers alike as to whether it makes sense (economic or otherwise) for countries to introduce a high level of IP protection when they lack the resources to benefit therefrom. For developing countries, therefore, some argue that extensive IP rights are a burden, not a benefit. Others, of course, maintain that IP rights contribute to particular kinds of valuable economic activity, whether this be foreign investment, or the development of local creative industries or local scientific research. There is some truth on both sides, and a definitive answer to the question of whether IP is ‘good’ or ‘bad’ in these cases may be impossible to reach. (Indeed, even the most talented minds have, as yet, failed to prove whether IP offers a net gain or a net loss to society. But as we have it, we might as well make the best of it.) What can be said with some confidence is that the context in which any given intellectual property regime operates is critical to whether it delivers tangible benefits. So, while it may pay Kenya to have a sophisticated plantbreeder’s rights regime (apt, given its extensive export industry in horticulture), it may not pay it to have a sophisticated patents regime (if it lacks a sufficiently large research base for it to be an advantage as it may not attract foreign investment). The devil is clearly in the detail. Other criticisms of TRIPS have focused on the impact of introducing rigid, Western-style, patent laws on the ability of poorer countries to obtain less expensive generic pharmaceuticals, including for the treatment of AIDS and, currently, Covid vaccines and treatments. Whilst there are mechanisms in place to assist developing countries without their own manufacturing facilities to obtain generic pharmaceuticals from countries where there is manufacturing capacity, it is doubtful that this will provide an adequate answer. A ‘Covid waiver’ for vaccines would almost certainly make no difference because their reliable and safe manufacture is hugely difficult and complex. Many who accept that pharmaceutical companies need money for R&D (and to pay shareholders) find it much harder to understand why those funds should come from those who can least afford it (and who may be unable to benefit from the therapy at all if patent level prices are charged).

238  Some International Aspects and Competition Law The current international IP debate has become complex and polarised. Some states have taken matters into their own hands and have, for example, working within the limited flexibilities which the TRIPS Agreement affords, placed limits on when patent protection will be available for improvement drugs, such as new pharmacological forms of old products, Novartis v Union of India, 2013. Others think that TRIPS does not go far enough, and so now rely upon forging bilateral and plurilateral trade agreements with like-minded states which permit more stringent ‘TRIPS-Plus’ provisions. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is an example, one which the UK Government has expressed interest in joining post-Brexit. The overall picture of international IP law is now a fragmented scene, overlaid with complications brought about from overlaps with other international regulatory systems (including human rights law, environmental law and investment law) which can ultimately culminate in a clash of objectives and conflicting obligations. One big question: without the patent incentive in place, would the inventions covered by patents for Covid vaccines (particularly for the mRNA vaccines) ever have been developed in the years preceding the pandemic? Would we have them but for the patent system? And two more: given that it is strongly predicted that there will be more pandemics, should the world be investing more in vaccine research? If so, who will pay other than investors who take the risk?

EU Law EU law has had a very significant influence on UK IP law. It has been greatest in two aspects. First, much of modern IP law has been harmonised across the EU Member States, generally leading to a greater degree of protection (e.g. greater scope or longer duration), new rights (e.g. the database right) and more limited exceptions. Secondly (and working in the opposite direction), EU rules on free movement and on competition have had considerable influence in reducing the things that proprietors can do with IP rights to interfere with interstate trade. The CJEU takes a central role in the interpretation (some say misinterpretation) of this EU legislation and the national statutes derived from it. We cannot ignore the EU’s influence in IP. Although the UK has now left the EU, under the terms of the withdrawal, the UK continues to be governed by EU law as it stood on 31 December 2020. Pre-Brexit CJEU case law remains binding on the UK courts, unless or until either the Court of Appeal in England and Wales or the UK Supreme Court determines otherwise. Post-Brexit CJEU case law will not be binding, but it is likely to remain influential.

An Introduction to EU Legislation The sheer volume of EU IP-related legislation is enormous. This is only to be expected. By 1787, copyright and patents were considered of sufficient commercial

Competition Law  239 importance to warrant mention in the US Constitution (article 1, section 8) as matters about which the Federal Congress could legislate. It is unsurprising, therefore, that some two centuries later, the EU began to see (and continues to see) IP as more of a ‘federal’ question than one for the Member States alone. Given the EU’s provenance as a ‘single market’, it would seem odd if differences between Member States’ IP laws or the territorial nature of IP could disrupt this regime. So, harmonisation of IP rights has been a mainstay of the EU Commission’s legislative agenda. Whilst the original Treaty of Rome gave no explicit power to the EU (or its forebears) to regulate IP, this did not stop a legislative programme which was intended to harmonise IP laws between Member States or to create pan-European rights. We have looked at EU influence on substantive aspects of UK patent, design, trade mark and copyright law, much of which is based wholly or partially on EU Directives. When the Treaty of Lisbon came into effect in 2009, the regulation of IP within the EU was given specific legislative grounding. Article 118 of the Treaty on the Functioning of the European Union (TFEU) contains an explicit mandate for the Council and European Parliament to ‘establish measures for the creation of European intellectual property rights to provide uniform protection of intellectual property rights throughout the Union’. There are no signs that the EU’s interest in IP is waning. If the EU changes or adds to IP, what will the UK do?

EU Directives and Regulations EU Directives apply to Member States. They set out, sometimes in fairly general terms, at other times precisely, what the Member States have to do by way of national legislation. Directives must be transposed into national legislation – they do not in themselves make changes in the law. Once implemented into national law, the CJEU has jurisdiction to interpret provisions of these Directives via references from national courts. Regulations are different as they apply throughout the EU automatically without requiring any national legislation. As described earlier, an EU Trade Mark or Community Design provides a unitary right covering the entire EU. The scheme for unitary patents (covering nearly all the EU) is now very likely. These pan-European rights are created by way of EU Regulations – the most direct form of EU law. Regulations require no national implementing legislation. They take effect in every Member State from the instant that they are passed.

Competition Law The territorial and monopolistic characteristics of IP create other concerns relating to restrictions on competition that are facilitated by IP rights. When does a legitimate ability to exclude competitors turn into an abuse of market power?

240  Some International Aspects and Competition Law Can a licensing arrangement be so restrictive that it deserves to be regulated for being anti-competitive? The answer to these important questions can be found in competition law. This is another area where UK law has been strongly influenced by EU law (see Chapter 6).

EU Competition Law There are two important provisions of the TFEU dealing with competition: Articles 101 and 102. (These were renumbered from earlier versions.) The competition rules focus on the impact a particular trader (or group thereof) has on the relevant market. These competition rules are enforceable via proceedings brought by the EU Commission, as well as being directly effective in the national courts of Member States. (The Commission is the EU’s administrative institution. It is split into a number of Directorates General (DGs), each responsible for a particular area of law or policy. The one that deals with competition policy is one of the most powerful.)

Article 101 Article 101 prohibits agreements ‘which have as their object or effect the prevention, restriction or distortion of competition within the internal market’. It is of general application, although the article sets out some specific examples of agreements which would normally be caught. These include price fixing, production control, market sharing agreements and making the conclusion of contracts subject to supplementary obligations which have no connection with the subject matter of the contract. In the IP field, this latter category is particularly important, and may include things such as tying clauses (e.g. insisting that a licensee purchases all raw materials for operating the licensed process from the patentee), charging royalties on non-patented products or even obliging a licensee to disclose all the new technical information learnt from the operation of the product/process to the patentee. The EU has usefully enacted a series of Regulations which grant clearance to certain kinds of IP agreements. These ‘block exemptions’ provide some measure of certainty and predictability. Parties that tailor their agreements to fit the block exemptions will normally be safe from challenge under the competition rules, although there are no complete guarantees. The most recent Technology Transfer Regulation of 2014 includes a set of complex rules governing what can/cannot be done in (mainly technical – patents, know-how, etc.) IP licensing agreements.

Article 102 Article 102 prohibits abuse of a dominant position within the single market or any substantial part of it. This is not a simple concept: what, for example, are the hallmarks of dominance? Clearly, being in a dominant position will require the possession of significant market power. If a firm can behave ‘to an appreciable

Competition Law  241 extent independently of its competitors, its customers and, ultimately, consumers’, then it risks being seen as occupying a dominant position, United Brands v Commission, 1978. Although the importance of market share will vary from one market to another, as a rule of thumb, if an enterprise’s share of a market is greater than 40%, with the other competitors having much smaller shares, it may be considered dominant. Nevertheless, uncertainties remain, and disputes often arise over the definition of the relevant market in such cases. Possession of an IP right, such as a patent, can place a party in a dominant position, but it does not necessarily do so. Also, Article 102 requires abuse of this position, such that dominance in a market, whilst necessary, is not sufficient for the provision to bite. Whether a dominant position has been abused must be judged individually in each case. Examples of conduct which may constitute abuse include charging excessive prices for products protected by a patent or refusing to license except upon restrictive terms.

UK Competition Rules Pre-Brexit, the UK competition rules, set out in the Competition Act 1998, mirrored the EU rules, although the prohibitions relate to conduct affecting competition in the UK, not the EU. Although, post-Brexit, the EU competition rules ceased to apply to the UK, they continue to cover the activities of UK businesses that trade in the EU, meaning that some anticompetitive behaviour may now be actionable under both sets of rules.

The Uneasy Relationship between Competition Law and IP Many competition lawyers and regulators view IP rights, especially patent rights, with suspicion at best, and downright loathing at worst. They never say so explicitly, often parroting obviously wrong things like ‘IP and competition laws have a common objective’. In part, the problem arises because a patent gives a legal monopoly in the patented thing – which they are apt to equate with a market monopoly (when many/most are no such thing). More seriously, they are apt to forget that patents are instruments of innovation –that patent terms are limited and that innovative companies are not just competing with each other as regards products, but in effect competing in innovation itself. For example, however important a range of medicines a pharma company now has, that range (or most of it) will be unprotected within 10 years. Unless it can find new and better ones, it will become a generic company. So also for mobile phones: the competition is not merely in products (unlike e.g. for cement) – but in innovation itself. The result of this uneasy relationship is that, from time to time, competition authorities (not just in the EU, but others too) seek to intervene in patent litigation, saying that enforcement of the patent (particularly important ones) would breach

242  Some International Aspects and Competition Law competition rules. Sometimes defendants in patent actions plead that enforcement of the patent would breach competition law. Most of this comes to nothing in the end, but it can cause delays and increase the cost of litigation.

Private International Law Private international law – ‘conflict of laws’, as it is often known – is a collection of procedural rules that deal with such things as jurisdiction (whether a court has authority to hear a particular case), choice of law (which country’s law should be applied) and the ability of a court (or legal system) to recognise (enforce) foreign judgments. It is a vast topic: much too large for this book. Additionally, it has been affected by Brexit uncertainty, since the UK is no longer bound by EU Regulations used to determine which courts should hear cases in intra-EU disputes. Nevertheless, the global importance of IP, as well as the global nature of trade, means that the influence of private international law in this area is difficult to ignore. Accordingly, we now turn to consider a few of its more critical aspects.

Foreign Intellectual Property Rights Issues of the subsistence of an IP right can usually only be decided in the courts of the country whose laws confer the right, meaning the courts of other countries have no right to judge these. But some issue may be explored by foreign courts, as is best illustrated by example.

Example 1 A young UK architect thought that a rather more famous architect had taken his designs for a town hall and used them to build an art gallery in Rotterdam. Making a copy of a work in Holland did not infringe his UK copyright, but could he sue for infringement of Dutch copyright in the English courts? For some years it was thought that foreign copyright claims were ‘non-justiciable’ in the English courts (see comparative example, directly below). However, the Netherlands and the UK were both parties to the Brussels Convention, which provides for jurisdiction in the EU countries. The court held that he was able to bring his claim for infringement of Dutch copyright law before the English court, Pearce v Ove Arup, 1999.

Example 2 The UK Supreme Court followed a similar line of argument in respect of US copyright in Star Wars Stormtroopers’ helmets, Lucasfilm v Ainsworth, 2011. It held that a man in Twickenham who sold copies of the helmets (including by post to

Private International Law  243 customers in the USA) could be sued here for infringement of the US copyright (there was no UK copyright). The Court asserted there were no issues of policy which militated against the enforcement of foreign copyright, but a realist might think otherwise – for it seems unrealistic that a UK individual with only very low US sales could afford to fight a rich US corporation. The Court also said states had an interest in the international recognition and enforcement of their copyrights. We’re not sure about that either – these are private rights. In the end, the Court said that, where there was a basis for personal jurisdiction over the defendant (because he was here), and the substantial dispute was about ownership of the relevant copyrights and their infringement rather than about their subsistence, the issues could be raised in the English courts.

Historical Example 3 For many years, an ancient order of Carthusian monks brewed a liqueur at the monastery of La Grande Chartreuse in France. They used a secret process, jealously guarded. As well as being enormously devout, the monks were evidently shrewd businessmen. The head of the order, one Abbé Rey, registered ‘Chartreuse’ as a trade mark in various countries, including France and the UK. In 1901, the French government passed a law which declared illegal all unlicensed religious associations failing to obtain authorisation from the state. The monks applied for authorisation, but the government (which probably thought the Carthusians had had it too good for too long) refused. The order was dissolved. The monks were forcibly expelled from France and all their property, including their trade marks, was confiscated and sold. But one thing not even the French government could take away from them was their secret process. That the monks carried with them into their Spanish exile, where, not too far from the French border, they cocked a snook at the French government and set up in business again. The monks were as devout as ever and the liqueur was as delicious as ever. The inevitable happened. The liquidator, a Monsieur Lecouturier, purported to grant the right to sell Chartreuse liqueur to another (who did not have the secret). Trade mark war broke out. The monks sought to prevent the liquidator, and those claiming under him, from importing liqueur marked ‘Chartreuse’ into the UK, relying on their UK trade marks. At first, they succeeded. But then the liquidator, ‘by a contrivance which it is difficult to reconcile with the actual truth’ (as the House of Lords put it), somehow got the trade mark registrations transferred to his name, alleging that he was the assignee of the Abbé Rey. The liquidator then tried the reverse trick and managed in the lower courts to prevent the monks from importing their Chartreuse into the UK. The House of Lords was outraged. Lord Shaw said: ‘I do not see anything conferring upon the liquidator of the property of the Carthusian Order a right to strip that order of their possessions in all parts of the world.’ It was held that the property in question (the UK registrations) was situated in the UK and must

244  Some International Aspects and Competition Law therefore be regulated according to the laws of the UK. The French transfer did not confer title to the UK registrations on the liquidator, and the monks won, Rey v Lecouturier, 1910.

Patents Example 4 Under the Brussels Convention (now a Regulation), which regulates jurisdiction and judgments in the EU, there are special rules about where claims for the infringement and validity of registered IP rights can be heard. Claims about invalidity are subject to the exclusive jurisdiction of the courts of the country of registration or deposition. Thus, actions concerning the validity of a UK patent must be brought in the courts in the UK. There is no such express rule concerning infringement actions. This gives rise to the prospect of suing a defendant (usually a company) in the courts of the defendants’ domicile in respect of infringement of patents in a number of different countries. For example, a claimant could choose to sue a defendant based in France in respect of alleged acts of infringement undertaken in the UK, France and Germany. But since validity is subject to exclusive jurisdiction of the relevant local courts, what if the defendant says by way of defence that the patents are all invalid? The UK courts took the practical view that infringement and validity are so bound up together that, absent special circumstances, they should be tried together. Accordingly, if validity is raised as a defence, the whole case (infringement and validity) has to be tried in the patent’s country of registration, Coin Controls v Suzo, 1997; Fort Dodge v Akzo Nobel, 1998. The CJEU adopted the same approach in GAT v LUK, 2006, holding that the exclusive jurisdiction of the national registration should be taken to apply whatever the form of proceedings in which the issue of a patent’s validity was raised. To permit a court seized of an action for infringement, or for a declaration of non-infringement, to establish (indirectly) the invalidity of the disputed patent would undermine the binding nature of the rule of jurisdiction. Of course, one cannot sue in any country for infringement – there must be acts constituting infringement done in the jurisdiction of the country conferring the right. So, for example, the holder of a UK registered trade mark cannot sue for infringement in respect of acts done in Ireland.

Foreign Entitlement to UK IP Rights There are no nationality-based restrictions on who is entitled to apply for UK patents, registered designs or trade marks. Similarly, most foreign works and performances are entitled to the same protection as local ones, pursuant to various mutual recognition treaties, such as the Berne Convention and other reciprocal

Foreign Entitlement to UK IP Rights  245 arrangements. These are reflected in the qualification rules of UK copyright legislation. Different rules do apply in some cases. Those governing performances in films and sound recordings, for example, can be very complicated. Similarly, foreign nationals or companies can sue for passing off, provided that there is UK-based goodwill in the UK. For example, Maxim’s, the famous Parisian restaurant, maintained an action for passing off against a restaurant of the same name in Norwich (also decorated in French period style), Maxim’s v Dye, 1977. The position with UK unregistered design right is less generous to foreigners, since qualification for protection usually requires some connection to the UK or a country, such as Hong Kong or New Zealand, where there is agreement to provide reciprocal protection. Although US citizens can claim UK copyright, they are not entitled to UK unregistered design right, because the USA does not provide reciprocal protection. Foreign claimants are treated in exactly the same way as domestic claimants in litigation, but they sometimes have to provide security for the costs of litigation, whereas domestic claimants do not. This is not a matter of discrimination; it is simply that is easier to chase a losing party here for the money than in other countries.

246

INDEX A Account of profits breach of confidence  215 claimants choice of remedy  17 database rights  228 general principles  19 Adaptations of ‘authorial works’  175 Advertisements of court findings  19 Advertising standards controls  139–140 Amendments European patents  48 UK patents  40–42 Applicable law  6 Application/registration procedures certification marks  120 collective marks  119–120 EU trade marks (EUTM))  114–115 European patents  46–47 ‘international’ registration of trade marks  116 UK patents  32–39 UK trade marks  82–89 Artistic works see Literary, dramatic, musical or artistic works Artists’ resale rights (ARRs)  200 Authorship basic rule of copyright  157 computer software  159 entrepreneurial works  159 joint authorship  159–160 literary, dramatic, musical or artistic works  158–159 tax on authors’ earnings  194–195 uncertain authorship  162 B Bequests of copyright works  191–192 Breach of confidence see also Privacy circumstances giving rise to a relationship of confidence  212–213 defences  217–218 difficult cases  219–220

duty of confidence must be owed to the claimant  218 general principles  212 importance  6 injunctions  215–216 long-lasting academic debates  223–224 need for agreements  219 overview  211 prevention of invasions of privacy  211–212 problems of proof  216–217 relationship with copyright  146 remedies  215–216 sale of ‘know-how’  218 trade secrets  214–215 C Certification marks applications for registration  120 defined  120 infringement actions  121 revocation and invalidity  121 Collective marks applications for registration  119–120 infringement actions  119 ownership by trade or professional association  118 revocation and invalidity  119 Commercial exploitation artists’ resale rights (ARRs)  200 consent, licensing and exhaustion  230–233 copyright  187–194 database rights  227 exclusive licensees  7 ‘exclusive rights’  5 patent licensing  60–61 sale of ‘know-how’  218 TRIPS Agreement  236–238 Commissioned works contractual issues  190–191 ownership of rights  161–162 Community trade marks (CTMs) see EU trade marks (EUTM))

248  Index Company name disputes  138–139 Comparative advertising  105–106 Compensation see Damages and compensation Competition law see also International law EU law  240–241 important questions  239–240 ‘improvement’ patents  51 limits on licensing and exploitation  60 UK competition rules  241 uneasy relationship with IP  241–242 Compilations  152–153 Compulsory licensing  61 Computer software authorship  159 copyright protection  23–24 right to make back-up copies  184 Consent copyright infringements  178–179 re-sale of IP rights  230–231 trade mark infringements  102 Continuing unregistered design rights (CUDRs)  74 Copying changes in material form  171 examples  170–171 meaning and scope  167 requirement for ‘substantial taking’  167–168 similarity of form or general Idea  169–170 small parts worth copying  168–169 Copyright commercial exploitation  187–192 computer software  23–24 consent of owner to operate  178–179 contractual issues  190–194 defences  179–186 duration of protection  147, 163–164 exceptions to infringement  179–186 fair dealings defences/exceptions  180–182 formal problems with dealings  187–189 history and development of law  148–149 human rights  186 illegal and immoral works  155 illegal commercial exploitation  206 impact of EU harmonisation  154–155 importance  6 infringements adaptations  175 authorising or encouraging others to infringe  175–176

communicating works to the public  173–175 copying of whole or a substantial part of the work  167–171 difficulty of proving a causal link  166 issuing copies to the public without consent  172 meaning and scope of ‘copying’  167 need for causal link  165–166 no protection for reputation of competition  145 performing/showing works in public  173 primary and secondary infringements distinguished  165 problematic situations  185–186 publishing unpublished works  172 rental or lending of copies  173 by reproduction  167 secondary infringements  176–177 use of copy protection technology  200–201 moral rights duration of protection  199 overview  196 right to be identified as the author  196–197 right to object to derogatory treatment  197–198 right to object to false attribution  198–199 right to privacy of certain photographs and films  199 waiver  199 original rationale  143 overlapping rights  156–157 ownership ability to consent to operate  178–179 basic rule  157 commissioned works  161–162 Crown copyright  162 entrepreneurial works  159 joint authorship  159–160 literary, dramatic, musical or artistic works  158–159 orphan works  162–163 Parliamentary copyright  162 uncertain authorship  162 works by employees  160 personal copies for private use  185 practical and commercial importance  146 primary function and nature  143–145

Index  249 protection of literary, artistic, dramatic and musical works and entertainment industry  23 protection of UK unregistered designs  74 relationship with breach of confidence  146 subject matter ‘authorial works’ and ‘entrepreneurial works’ distinguished  149–150 compilations  152–153 databases  152–153 foreign works  153–154 need for ‘skill, labour and effort’  150–151 photographs and sound recordings  153 protection regardless of merit  150 updated works  151–152 tax on authors’ earnings  194–195 Costs see also Fees benefits of speedy action  14 effect of lengthy proceedings  14–15 patents certificates of contested validity  52 choice of European patent or national patent  50 Criminal sanctions see also Customs seizures civil and criminal law distinguished  9 overview  205 practical working of the criminal law alternative to civil action  208–209 enforcement provisions  209–210 penalties  210 unfair trading  207 unlawful commercial exploitation copyright  206 other criminal laws  207–208 registered designs  207 trade marks  205–206 Crown copyright duration of protection  163 ownership  162 Customs seizures  66, 210 see also Criminal sanctions D Damages and compensation benefits of speedy action  14 breach of confidence  215 claimants choice of remedy  17 database rights  228

Database rights copyright  152–153 criteria for protection  226–227 database defined  226 dealings  227 defence/exceptions  227–228 duration of protection  227 infringement  227 requirement for ‘maker’ to qualify for protection  226 Dealings see Commercial exploitation Debranding  234 Deceptive marks  85 Declarations of invalidity certification marks  121 collective marks  119 EU trade marks (EUTM))  115 overview  107 removal of trade marks from register  111–112 Defences breach of confidence  217–218 copyright back-up copies of computer programs  184 fair dealings  180–182 incidental inclusion  168, 183 innocence is no defence  19 public broadcasts  183–184 re-use by author of preliminary sketches, models, etc  183 representation of artistic works in public places  183 time-shifting  184 various miscellaneous provisions  184–185 patents ‘Gillette’ defence  58 improperly granted patent  40–41 violations of competition licensing rules  60 stage in proceedings  12 trade marks (registered) challenge to registration  92, 102 descriptive use defence  103–104 double identity cases  96 referential use  104 use of own name  103 passing off  127 Delivery up or destruction of infringing goods  19

250  Index Descriptive names and marks exceptions to passing off  127 exceptions to trade mark infringement  103–104 registration of  83–84 Design rights see EU registered design rights; EU unregistered design right (EU UDR); UK registered design rights; UK unregistered design rights (UK UDR) Dilution of trade marks  99 Dispute fora other than UK courts  11–12 UK civil courts  9–10 Distinctive marks  83–84 Domain name disputes  137–138 Dramatic works see Literary, dramatic, musical or artistic works Drug patents ‘selection’ patents  63–64 underlying problems  62–63 Duration of protection copyright  25, 147, 163–164 database rights  227 moral rights  199 patents  24, 39 UK registered designs  24–25 UK unregistered designs  25 E Emblems  85 Employees copyright ownership  160 entitlement to file patent application  32–33 Enforcement of IP rights civil and criminal law distinguished  9 complexities of enforcement  3–4 criminal sanctions  209–210 dispute fora  9–10 infringement actions  12–15 remedies see Remedies ‘threats’ actions  12–13 Entrepreneurial works ‘authorial works’ distinguished  149–150 authorship  159 duration of protection  164 EU law advertisements of court findings  19 competition law  240–241 continuing importance  10–11, 238 database rights  225

directives and regulations  239 geographical indications  121–122 impact of harmonisation on copyright  154–155 overview of legislation  238–239 re-sale of IP-protected goods  231–233 role of EPC  29–30 trade secrets  224 unlawful commercial exploitation of trade marks  206 EU registered design rights effect in UK  71 scope of protection  71–72 EU trade marks (EUTMs)) see also Certification marks; Collective marks; Geographical indications; UK trade marks administration by EUIPO  114 application procedures  114–115 infringement actions  115 revocation or invalidity  115 UK marks compared  79–80 EU unregistered design rights (EU UDR) effect in UK  73 importance  6 protection of appearance  22 relationship to SUDR)  73–74 European patents see also UK patents application process  46–47 choice of European patent or national patent  49–50 drugs and similar chemical compounds  62–64 duration of protection  24 entitlement to file patent application  32–33 genetic engineering  64–65 importance of validity  57 important inventions  44–50 infringement ‘construction’ of claims  52–54 delayed actions  55–56 ultimate testing ground for a patent  52 opposition proceedings  47–48 overview  46–48 patent attorneys  34–35 patentable inventions  30–32 plant varieties  65–66 post-grant amendments  48 protection of new and inventive product or process  21

Index  251 role of EPC  29–30 strategies to avoid infringement  58–59 three key considerations  21–22 Unitary Patent scheme  47 value of published specifications  26 Examination certification marks  120 collective marks  119 European patent applications  46–47 UK patent applications  37–39 UK trade mark applications  90–91 Exclusive rights benefits  5 meaning and scope  4–5 trade activities falling within holder’s exclusive rights  230 Exhaustion of rights continued recognition of pre-Brexit ‘regional’ exhaustion regime  231–232 issuing copies to the public  172 limits on licensing and exploitation  60 re-sale of IP rights  231 Exploitation of rights see Commercial exploitation F Fair dealings criticism, review or quotation and reporting current events  181–182 non-commercial research and private study  180 non-commercial text and data analysis  180–181 overview  180 parody, caricature and pastiche  182 Fees see also Costs European patent applications  46–47 ‘international’ registration of trade marks  116 UK patent applications  39–40 UK trade mark applications  92 ‘First sale doctrine’  231 Flags  85 Fora see Dispute fora Freezing injunctions  20 G Genetic engineering  64–65 Geographical indications complexities of EU law  121–122 ‘UK’ GI scheme  122

‘Get-up’ design protection  125 passing off  79, 125–127 H Human rights control over confidential information  224 copyright  186 fragmentation of IP law  238 privacy (Art 8)  211–212, 220 I Imitations see also Copying meaning and scope  26 ‘Improvement’ patents  51 Incidental inclusion  168, 183 Industrial designs see EU registered design rights; EU unregistered design right (EU UDR); UK registered design rights; UK unregistered design rights (UK UDR) Infringements certification marks  121 collective marks  119 copyright  165–177, 200–201 criminal sanctions see Criminal sanctions customs seizures see Customs seizures database rights  227–228 effect of lengthy proceedings  14–15 EU trade marks (EUTM))  115 key questions  25–26 overview  12 problem of legal costs  15 UK patents  52–59 UK trade marks  93–102 when to sue  13–14 Injunctions breach of confidence  215–216 database rights  228 final injunctions  17 freezing injunctions  20 interim (‘interlocutory’) injunctions  16 Intellectual property (IP) applicable law  6 benefits of licensing  4 complexities of enforcement  3–4 duration of protection see Duration of protection enforcement see Enforcement of IP rights ‘exclusive rights’  4–5 implications of globalisation  4

252  Index three part division  7–8 umbrella term to cover various rights  3 uneasy relationship with competition law  241–242 Interim (‘interlocutory’) injunctions breach of confidence  216 general principles  16 International law see also Competition law private international law  242–245 public international law  235–236 spatial and temporal monopolies  6 ‘International’ registration of trade marks  116 Inventions defined  30 important inventions  45–50 patentable inventions  30–32 ‘selection’ patents  63–64 Inventive step  32, 41, 58 L Licensing benefits for weak IP right  4 copyright  189, 193–194 exclusive licensees  7 ‘exclusive rights’  5 Patents  42, 60–61 re-sale of IP-protected products  230–231 Literary, dramatic, musical or artistic works computer software  23–24 duration of protection  163 ‘entrepreneurial works’ distinguished  149–150 ownership of rights  158–159 M Madrid Protocol  116 Malicious falsehood defined  134 difficulties of proof  134 examples  135–136 uncertainty of litigation  136–137 Mareva injunctions  20 Monopoly rights complexities of enforcement  3–4 duration of protection see Duration of protection ‘exclusive rights’  4–5 spatial and temporal monopolies  6

Moral rights duration of protection  199 overview  196 right to be identified as the author  196–197 right to object to derogatory treatment  197–198 right to object to false attribution  198–199 right to privacy of certain photographs and films  199 waiver  199 Musical works see Literary, dramatic, musical or artistic works N Name disputes company names  138–139 domain names  137–138 use of own name  103, 127 National emblems  85 National security  67 Novelty challenges  41 design registration  22 disclosure after filing  37 effect of prior knowledge  69, 211 examination  38 patentable inventions  31–32 when to file  35 whether patent protection is available  21 O Olympic symbols  85 Opposition proceedings EU registered trade mark applications  115 European patent applications  47–48 UK trade mark applications  91–92 Originality need for ‘skill, labour and effort’  150–151 protection regardless of merit  150 Orphan works  162–163 Own name use exceptions to passing off  127 exceptions to trade mark infringement  103 Ownership of rights collective marks  118 copyright  158–163 exclusive rights  4–5 patents  42

Index  253 P Parliamentary copyright  162 Passing off advantages over trade mark protection  79 badges and representations  124–125 business names  127 exceptional cases where confusion is tolerated  127–128 ‘extended’ passing off  129–130 general principles  77 general rule  123 ‘get-up’ cases  126–127 importance  6 need to judge risk of deception  125 odd and unusual instances  130–132 three types of case  132–133 trade mark protection compared  77–79 variety of infringing activities  123–124 Patent Cooperation Treaty  48–49 Patents see European patents; UK patents; PCT Application see Patent Cooperation Treaty Performers rights  199–200 Plant varieties  65–66 Prior art definition  31–32 earlier published patent specifications  37 grace period’ for disclosure  35 inventions not patentable  31 making something ‘old’  58 need for inventive step  32 substantive examination  38 Privacy see also Breach of confidence adding colour or credibility to press stories  222–223 breach of confidence cases  211–212 ‘ordinary citizens’ and ‘celebrities’ distinguished  221 privacy and the press  220–221 Private international law collection of procedural rules  242 foreign entitlement to UK IP rights  244–245 foreign intellectual property rights  242–244 Public interest anti-competitive practices  194 breach of confidence  217 copyright  185–186 privacy and the press  221

Public international law history and development  235–236 TRIPS Agreement  236–238 Public policy breach of confidence  217–218 refusal of UK trade marks  84 Publication EU registered trade mark applications  115 UK patent applications  37–38 UK trade mark applications  91 R Re-sale of IP-protected products consent and licensing  230–231 continued recognition of pre-Brexit ‘regional’ exhaustion regime  231–232 exhaustion of rights  231 free movement of goods within EEA  232–233 overview  229–230 trade activities falling within holder’s exclusive rights  230 Recording rights  199–200 Referential use of trade marks  104 Registration see application/registration procedures Remedies account of profits  17, 19 advertisements of court findings  19 breach of confidence  215–216 damages and compensation  17–18 delivery up or destruction of infringing goods  19 final injunctions  17 freezing injunctions  20 interim (‘interlocutory’) injunctions  16 meaning and scope  15–16 search orders  19–20 seizure of imported infringing goods  20 ‘self-help’ remedies  20 Revocation certification marks  121 collective marks  119 EU registered trade marks (EUTM))  115 invalid patents  52 UK patents  40–42 UK trade marks  107–111 Royal emblems  85

254  Index S Search orders  19–20 Secondary infringements of copyright imports which if made in UK would infringe  178 need for relevant mens rea  176–177 primary infringements distinguished  165, 175 time-shifting of recordings  184 Seizure of imported infringing goods  20 ‘Selection’ patents  63–64 ‘Self-help’ remedies  20 Shapes  86–87 Spatial monopolies  6 Supplementary protection certificates  61 Supplementary unregistered design rights (SUDR)  73–74 T Tarnishment of trade marks  99 Taxation on authors’ earnings  194–195 patents  62 Temporal monopolies  6 Temporary copies  179 ‘Threats’ actions  12–14 Time-shifting  184 Trade marks see EU registered trade marks (EUTMs); UK trade marks Trade secrets contractual relationships  214 EU law  224 information becoming public knowledge  214–215 marking a document ‘confidential’  214 two sorts of confidential information  214 Transfer of rights problems with copyright  187–189 UK patents  5 Translations  156 U UK GI scheme  122 UK patents see also European patents activities amounting to infringement  54–55 administration of PCT  48–49 amendment after grant  40 amendments  40–42 application procedures  32–39 choice of European patent or national patent  49–50

commercial exploitation  42 confidentiality of information prejudicial to national security  67 drugs and similar chemical compounds  62–64 duration of protection  24, 39 entitlement to file patent application  32–33 free movement of goods within EEA  233 government’s right to work patents  66–67 history of English patent system  43 impermissible amendments  42 importance of validity  57 important inventions  45–51 infringement actions  52–55 insufficient specification  41–42 licensing  42, 60–61 patent attorneys  34–35 patentable inventions  30–32 protection of new and inventive product or process  21 revocation  40–42 role of EPC  29–30 special tax rules  62 strategies to avoid infringement  58–59 supplementary protection certificates  61 three key considerations  21–22 transfer of rights  5 value of published specifications  26 UK registered design rights duration of protection  24–25, 25 general requirements for registration  69–70 history of English system of protection  68–69 priority in other countries  70–71 protection of appearance  22 quick and cheap registration  22 scope of protection  71–72 unlawful commercial exploitation  207 UK trade marks see also Certification marks; Collective marks; EU trade marks (EUTMs); Geographical indications absolute grounds for refusal  82–87 conflict situations  80–81 declarations of invalidity  111–112 exceptions to trade mark infringement  103–106 free movement of goods within EEA  233 infringement actions  95–106 opposition proceedings  91–92 passing off compared  77–79

Index  255 registration procedures  89–92 relative grounds for refusal  87–89 removal from register  107–112 revocation  107–111 scope of protection  25 types of registered trade marks  79–80 well-known marks  116–117 UK unregistered design rights (UK UDRs) history of English system of protection  68–69 importance  6 introduction  72 passing off  74 requirements for protection  72 scope for copyright protection  74 trade mark protection  74 useful short-term protection  22–23 valuable protection early in the life of a product  72–73 Unfair advantage from use of trade marks  100 Unfair trading  207

Use of own name exceptions to passing off  127 exceptions to trade mark infringement  103 Use of trade marks dilution  99 exceptions to trade mark infringement  103–106 infringements  100–101 revocation for non-use  107–110 tarnishment  99 unfair advantage  100 W Waiver moral rights  199 patent waivers  67 Well-known marks  116–117 World Intellectual Property Organisation (WIPO) administration of PCT  48–49 ‘international’ registration of trade marks  116

256