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

Thursday, 30 November 2017

INTA Brand Authenticity Conference (Report 2): Building brand value via ethical and sustainable credentials

Some tea, possibly Darjeeling, yesterday
After the first report from INTA's Brand Authenticity Conference, Alex Woolgar (Allen & Overy) is back with further updates from today's Berlin event.

Here's what Alex writes:

"The afternoon's proceedings kicked off with a session on the benefits and challenges of 3D printing for brand owners. This is a topical issue in the INTA world - a cross-committee effort co-ordinated by the Designs Committee recently resulted in an INTA position paper on 3D printing (which concluded that the area should be monitored, but the technology is not yet sufficiently advanced to render current IP protections inadequate). 

Mette Andersen of Lego gave the inside view from a business that one might speculate is more threatened by 3D printing than most. Lego's view is quite balanced - subject to due respect for Lego's IP rights (e.g. trade marks for the logo, word mark and the shape of Lego characters, but not the shape of the bricks, and some designs and patents), it is quite relaxed about the developing technology. There may be some benefits for consumers e.g. the ability to obtain special and out-of-production parts, and to customise models. There are however limitations e.g. the quality and time of production are currently inferior to plastic moulding. Lego is monitoring the area and, subject to improvements in quality, may explore offering customised 3D-printed pieces. 

Next was Lars Thalmann, co-founder of e-NABLE, a non-profit community which provides open source designs for, and 3D prints, customised prostheses, primarily for human hands. He listed some of e-NABLE's many success stories, including Söckchen, a Secretary bird of prey (and now a minor celebrity in Germany), whose prosthetic leg was designed and printed within 34 hours. As Class I medical products, human prostheses have to be CE-marked within the EU. In discussion on the possibility of using 3D printing to produce spare parts, Lars noted that (in Germany at least) replacing a vehicle part with a 3D-printed spare may push the vehicle outside of regulatory authorisation. This may raise liability issues in the case of an accident if the spare part is manufactured by a specialist producer and/or it is made negligently. 

Registered EUTM 
Finally, John F. Hornick of Finnegan gave a counterbalancing perspective. John argued that 3D printing will bring a dramatic change for brands, such that traditional IP rights and legal strategies will be undermined. In John's opinion, the technology will only become better, faster, cheaper and more widely available over time. John expects this to usher in a move from mass production to "mass customisation" (allowing e.g. replacement of a single plate from a set) and, ultimately, greater consumer control and power. The solution for brand owners may therefore lie in non-IP based business solutions / new economic models. John drew an analogy with the iTunes and Spotify solutions to the first wave of music streaming and file sharing websites - although Napster could be shut down, suing all consumers was never an option. 

Form of use - 
Alex believes this is meant 
to represent a Saguaro cactus, 
although expert confirmation 
would be welcome
There followed a session on the value of CSR and sustainability, led by Adam Garfunkel of Junxion. This session explored the concept of the "triple bottom line" and the rising importance of social and environmental concerns for companies: 84% of investors now take these factors into account alongside the traditional financial bottom line. But social and environmental  factors also influence the economic picture: these issues are important to Millennials, who will make up 80% of the workforce in 2025. As is often reported, Millennials tend to be flightier in their working lives, and look for the values of their workplace to align with their own. Adam suggested that if companies do not do sufficiently well on engaging employees with CSR initiatives, turnover rate may increase, leading to productivity and recruitment challenges and costs (and the converse is also true). From a trade marks perspective, the panel noted that sustainability metrics are currently piecemeal, and are not yet sufficiently standardised for companies to communicate their credentials clearly and concisely to consumers e.g. by way of a new certification mark. 

The third session, moderated by David Stone of Allen & Overy LLP, featured Beate Schmidt, President of the Bundespatentgericht, and Alexander Von Mühlendal of Bardehle Pagenberg (and former OHIM/EUIPO Vice-President) discussing six recent trade mark court decisions covering the green/environmental area. The author's take-home is that it remains challenging to register and/or to achieve a broad scope of protection for trade marks denoting "green" credentials or GIs. Beate recounted Bundespatentgericht decisions on GREENIT DAS SYSTEMHAUS (descriptive and non-distinctive for IT services) and SMART SUSTAINABILITY (descriptive and non-distinctive for motor vehicles and associated equipment and services) - as readers may recall, the average consumer in Germany is usually taken to have a good understanding of English. Readers may not be aware that the Bundespatentgericht is obliged to investigate the cases before it ex officio, which explains the court referring in its judgment to its own Google searches for other uses of SMART SUSTAINABILITY in Germany.  

I dealt with four CJEU decisions - DarjeelingPortoKerrygold and Cactus. In Darjeeling, the CJEU ruled that the essential function of the Darjeeling Tea Board's collective marks was not to guarantee a particular geographical origin (unlike GIs), and consequently the opposition against registration of marks including DARJEELING for lingerie failed. In Porto, the CJEU overturned the General Court's decision that although the opposition against PORT CHARLOTTE for whisky was not made out on the basis of the GI for PORT/PORTO wine,  the opposition was made out under protections under Portuguese law (the CJEU held there was no justification for a broader scope of protection under national law). In Kerrygold, the CJEU held that peaceful co-existence of the KERRYGOLD and KERRYMAID dairies in their native Ireland (Kerry is a county famous for its cattle) was a relevant factor in the overall assessment of confusion between the marks in Spain, but not determinative. Finally, in Cactus, use of a cactus device (see below) was held to have the same semantic content and distinctive character as a composite mark featuring the device and the word CACTUS, such that there was genuine (trade mark) use.

Finally, in a session moderated by Mladen Vukmir of Vukmir & AssociatesCamille van Gestel of Waka Waka and Peter Dernbach of Winkler Partners (Taiwan) explained their personal motivations for their organisations' respective sustainability and CSR missions. Waka Waka developed from a carbon offset programme for the 2010 FIFA World Cup in South Africa, into manufacturer and supplier of solar-powered micro lights, with the aim of reducing the number of people without electricity worldwide (currently over one billion). This has clear quality of life and educational benefits. Peter explained his own mission to give something back in his adoptive country of Taiwan, in the form of his firm's extensive CSR programme based on the three Cs (colleagues, community and clients). He advocated a collaborative and experimental approach to the development of CSR programmes."

Now available!: English translation of Dutch Supreme Court decision in MSD v Teva highlights UK Supreme Court's Actavis decision

The AmeriKat is no longer in the dark about what
the Dutch Supreme Court were saying in
MSD v Teva
Thanks to a wonderful Kat friend, readers can now benefit from the translation of the recent Dutch Supreme Court's decision in MSD v Teva (as reported here).   You can access the document here.

As a reminder the case concerned the use of ribavirin for the manufacturer of a pharmaceutical composition for treating a specific sub-group (the G1N-subgroup) of HCV patients suffering with chronic hepatitis. The Court held that second medical use claims can be directly and indirectly infringed and that there should be no distinction in the treatment as between the type of second medical use claims in issue - be it Swiss-type or EPC 2000.

The relevant extracts previously referred to in the AmeriKat's post are now set out below:
"Extent of protection of Swiss-type claims

Direct infringement
3.4.4 The difficulty arises with a patent containing a Swiss-type claim, which is formulated by its nature as a process claim (see 3.4.2), since as a result of the effect of Article 64(2) EPC or section 53(1) preamble and at b DPA 1995 (cf. above in 3.4.2), the extent of protection would also extend to the manufacture or application of the substance for the first medical indication if that patent has expired. This would be incompatible with the principle underlying patent law to the effect that anyone is at liberty to apply the doctrine of a patent that is no longer in effect, and also with the principle expressed in Article 69 EPC that the extent of protection of a patent should not extend beyond what is justified by the invention. For this reason, it must be assumed that a manufacturer or seller will only then directly infringe a patent with a Swiss-type claim if he foresees or ought to foresee that the generic substance he manufacturers or offers will intentionally be used for treatment covered by the second medical indication patent. This requires that the average person skilled in the art, on the basis of the SmPC and/or the product information leaflet or some other circumstance, will consider that the substance is (also) intended for or suited to that treatment. The manufacturer or seller will then have to take all effective measures that can reasonably be required of him to prevent his product from being dispensed for the patented second medical indication. The mere circumstance of a carve-out in the SmPC and product information leaflet of the generic drug – as in the present case – is generally not sufficient to rule out direct infringement. (Cf. Supreme Court 14 April 2017, ECLI:NL:HR:2017:692, NJ 2017/296, para. 3.5.2).

3.5 Against the background of all of the foregoing factors, cassation grounds 1.1, 1.2 and 1.3 correctly complain that the distinction drawn by the Appellate Court in the scope of protection of patents for the 'classic second medical indication' and the 'sub-group indication', mentioned at 4.2 of the contested judgment, is an incorrect distinction. As follows from the deliberations at 3.4.4 above, it is necessary in all cases of Swiss-type claims for (direct) infringement, and also sufficient, that the average person skilled in the art will consider that the substance is (also) intended for or suited to the treatment covered by the second medical indication patent, that the manufacturer or seller foresees or ought to foresee that the generic drug he manufactures or offers will intentionally be used for that treatment and that he does not take the steps specified above in 3.4.4. There is no place in the system of the EPC for a categorical distinction between the two types of second medical indications, introduced in abstracto, as done by the Appellate Court at the end of 4.4 – in relation to the specifically indicated use. The remaining complaints in cassation ground 1 require no discussion. The same applies to cassation ground 2.
Indirect infringement 
. . . . 
3.6.3 As already held at 3.4.2 above, Swiss-type claims are recognized in order to be able to protect a second medical indication as a patent and they take the form of purpose-limited process claims. It could be argued that, taken literally, there cannot be an indirect infringement of such a patent, for instance by an intermediary, since he would after all not be supplying or offering to supply means that could be used for the process in the manner specified in section 73(1) DPA 1995, consisting of the use of the substance mentioned in the claim for the preparation of a pharmaceutical product. Against the background of the reason that gave rise to recognition of the Swiss-type claims, and also having regard to the possibility available in the EPC since the revision in 2000 of linking a product-bound result claim to a patent for the protection of a second medical indication (Article 54(5) EPC incorporated in the DPA 1995 as Section 4(6)) – a revision that did not intend to break with the patentability of substances or combinations, as developed in case law, by means of a Swiss type claim (see EBoA 19 February 2010, G 0002/08, at 5.10.1-4 and the Preparatory Documents MR/18/00 and MR/24/00 quoted therein) – the reasonable protection of the patent proprietor prescribed by Article 1 of the Protocol justifies accepting that there can be an indirect infringement of a Swiss-type claim, on the same basis as for a claim in accordance with the current Article 54(5) EPC. A finding along the same lines was made by the Bundesgerichtshof (BGH 14 June 2016, no. X ZR 29/15, GRUR 2016/921 (Eli Lilly v Actavis), paras. 83-85). The possibility of an indirect infringement of a Swiss-type claim has also been acknowledged by the Supreme Court of the United Kingdom (UKSC 12 July 2017, no. [2017] UKSC 48 (Actavis v Eli Lilly), paras. 103-112).

3.6.4 This means that, as is the case with a patent containing a claim such as those rendered possible by Article 54(5) EPC, an indirect infringement of a Swiss-type claim is possible. With a purpose-limited product claim, the purpose given to the product (the drug) is after all "an essential element of the invention" as specified in section 73 DPA 1995. The foregoing deliberations mean that the manufacturer of a generic medicine can also indirectly infringe a patent for a second medical indication, namely if he supplies or offers to supply the drug to persons not entitled to work the invention and where he knows or it is obvious given the circumstances, that the drug is suitable and intended for the patented second medical indication. It is not an objection to this that he can therefore both directly and indirectly infringe such a patent. The UKSC has also held, as is apparent from the case law cited at 3.6.3, that the same conduct may amount to both direct and indirect infringement."
The AmeriKat was specifically struck by this comment at para 3.6.3:
"The possibility of an indirect infringement of a Swiss-type claim has also been acknowledged by the Supreme Court of the United Kingdom (UKSC 12 July 2017, no. [2017] UKSC 48 (Actavis v Eli Lilly), paras. 103-112)." 
So it seems, the Actavis v Lilly ripple effect (although on a different point) is definitely being felt far and wide, including in the Dutch Supreme Court. 

INTA Brand Authenticity Conference (Report 1): Building brand value via ethical and sustainable credentials

For those of us freezing away in London today, there were those a couple of degrees colder in Berlin at INTA's Brand Authenticity Conference.   No idea what that conference is? Don't worry, the AmeriKat's friend Alex Woolgar (Allen & Overy) reports on what it is all about and this morning's sessions for the Kat's readers.  Over to Alex: 
"The Brand Authenticity conference breaks new ground for INTA - it is the first INTA conference dealing with what is an increasingly important topic for brands and consumers alike. Consumers are taking more of an interest in the ethical and sustainable credentials of brands and, in turn, companies are waking up to the risks and rewards in this area. Brand professionals can add value by understanding this developing environment, the legal tools available to brands to earn and retain consumer trust and loyalty, and how best to deploy these tools.

Santiago Peralta, co-founder of Pacari Chocolate, kicked off proceedings with a passionate keynote address. Based in Quito, Ecuador, Pacari is a pioneering independent "tree to bar" chocolate manufacturer. Santiago explained how this model ensures quality and fairness at every stage of the process. Pacari is the most-awarded chocolate ever at the World Chocolate Awards (the "Olympics of chocolate") and, based on the gratefully-received samples, the author can see why. Santiago spoke about how the values of sustainability (over all timescales) and responsibility for the welfare of suppliers and employees are central to the company's identity. Pacari has received various certifications, such as the biodynamic Demeter and USDA Organic marks, and as a B Corp. Clearly, these certifications are hugely valued by Pacari - they serve the dual purpose of confirming that the company is living up to its ethical principles, and also serve as a badge of assurance to Pacari's target customers. Next was a series of presentations covering the evolution of corporate social responsibility (CSR).

Frederick Mostert of the Oxford Intellectual Property Research Centre and King's College London (and formerly of Richemont and a past INTA President) traced the origins of the concept of "sustainability" from 1962's Silent Spring by Rachel Carson to the present day. Speaking in his capacity as a Trustee of the Royal Academy of Culinary Arts, Frederick detailed the Academy's new "six pillars" of its food philosophy: sustainable; local; bio-friendly; animal-friendly; waste management; and communality. 90% of the chefs surveyed requested this initiative and, interestingly, the younger generations of chef are the most passionate about these issues (suggesting the trend towards sustainability will continue in future). Frederick has assisted the Academy in developing a mark to certify compliance with these pillars. Finally, Frederick reminded attendees that certifications can sometimes be misleading to consumers e.g. despite common assumptions, "organic" food products can include non-sustainable and unhealthy ingredients such as palm oil and corn syrup.

Katja Aßmann of Demeter-International explained the background and purpose of the Demeter mark, particularly familiar to German consumers for the certification of biodynamic products (i.e. more stringent than organic standards, and potentially valuable in reducing greenhouse gas (GHG) emissions). She noted that there is latent and increasing demand for "better" food and beverages: 80% of Germans do not want to consume GM products, and 41% would like to buy organic wherever possible.

Patricia Magaña-Spiegel of Fairtrade International spoke about the history of Fairtrade, its development of globally uniform standards of trade, and consumer recognition of the single worldwide Faitrade mark. In 2016, Fairtrade producers received an aggregate price premium of €150 million. However, Fairtrade's mission is now broader than fair prices, and the brand's strength is being leveraged in other areas e.g. elimination of forced and child labour.

Finally, Peter van Den Bulk (AB InBev) and Joseph J. Ferretti (PepsiCo, and current INTA President) spoke about the CSR programmes of their respective companies. Joe noted that, as large companies with a significant footprint, they feel even more responsible to reduce the negative side-effects of doing business. Peter detailed AB InBev's efforts to encourage more local supply (e.g. by brewing beer from Cassava root in Mozambique) and to reduce water consumption (from 2012 to 2016, consumption per litre produced has reduced from 3.54 to 3.14 litres, saving the equivalent of 40,000 Olympic swimming pools' worth of water per year, despite business growth)

Joe explained PepsiCo's goal to increase the sustainability and healthiness of its portfolio. The use of water was again a big issue, set against the backdrop of an expected 70% increase in global demand for food by 2050, and decreasing fresh water supplies. Joe suggested that, ultimately, achieving greater sustainability is also good for business: it allows continued supply of essential raw materials; if suppliers are paid fairly they are less likely to go bust and cause disruption; and reducing waste (only 6% of PepsiCo's production waste is sent to landfill) greatly helps the bottom line. Interestingly, PepsiCo retains a target of a 20% reduction in GHG emissions by 2030, notwithstanding the planned US withdrawal from the Paris climate accord.

The final session of the morning (moderated by Mette Andersen of Lego) was a two-part review of the standards brands must live up to in order to be deemed "responsible", and the trade mark issues in communicating this. Giulia Di Tommaso (Elipe), who works extensively with Unilever, took the first topic. Giulia gave an overview of the increasing standardised KPIs and rankings in this area, such as the OXFAM food brands ranking matrix, and the UN's sustainable development goals. Giulia noted that the latter features 169 KPIs i.e. the goals present considerable business complexity. However, Giulia argued that they also present an opportunity: there may be a significant first-mover advantage for businesses that take the lead on this. Consumers alone are unlikely explicitly to demand every possible improvement, but companies may benefit from (i) improved brand perception; and (ii) opening up new markets, along "build it and they will come" lines.

Laetitia Lagarde of Baker & McKenzie gave an overview of some trade mark issues arising for "green" businesses, products and services. In general, the bar for registration of marks featuring terms such as "eco" and "bio" is quite high given the inherently descriptive and/or laudatory character of the terms. Mette noted that the position is slightly different in Denmark - an inherently descriptive/non-distinctive mark will be registered with figurative elements - but in practice this will reduce likelihood of confusion in an infringement context (e.g. BIO BABY and BIO BABBY for nappies were held to not be confusingly similar). There are various other restrictions on use of "green" terms e.g. Regulation 834/2007 on the labelling of organic food products with the EU "leaf" logo, which treats the terms "bio", "eco" and "organic" as interchangeable (even though they may not be perceived as such by consumers). There also is a lesser-known mark available for non-edible environmentally-friendly goods and services, the EU Ecolabel (which has been around since 1994). The Cosmetics Regulation does not specify conditions for the use of "green" terms, so in this respect the cosmetics market is regulated by EU and national laws preventing misleading advertising. However, there are some private certification marks available e.g. the Soil Association mark in the UK, Ecocert in France and BDIH in Germany."

UK House of Commons committee progresses final stages of UPC ratification

IP Minister Jo Johnson proposes  motion on
UPC (Immunities and Privileges) Order 2017
Meanwhile, in a room somewhere in Westminster, Kat friend Alex Robinson (Dehns) was observing the latest goings-ons on the Unified Patent Court with respect to the UK's ratification process.  With the AmeriKat's whiskers down in a stack of papers, Alex helpfully reported for readers on what happened at yesterday's Delegated Legislation Committee:  
"The British political headlines this week may have been dominated by the so-called “Brexit bill”, the Irish border conundrum and the curious case of the 58 Brexit impact assessments that may or may not ever have existed (never mind hard or soft Brexit; the impact assessment row suggests that the Government may have discovered Quantum Brexit).  But to those of us with an interest in the UPC, the real political action this week took place not in Brussels or at the despatch box, but in the rather more rarefied surroundings of Committee Room 11 of the House of Commons, where, yesterday, the snappily-named Sixth Delegated Legislation Committee met to discuss the even more snappily-titled Unified Patent Court (Immunities and Privileges) Order 2017. [Do stay awake at the back of the class.] 
Delegated Legislation Committee (DLC) debates are normally pretty dull affairs – DLCs have no power to amend a Statutory Instrument put before them, and can only vote on a motion that the Committee has “considered” the SI. However, the UPC Immunities and Privileges Order has acquired disproportionate significance, as it is the final piece of the legislative jigsaw which will allow the British Government to ratify the UPC Agreement. And so on Wednesday afternoon a small but dedicated band of UPC-watchers, including this Kat-for-a-day, headed along to Westminster to watch our lawmakers in action. 
Jo Johnson MP, as the minister for IP, proposed the motion, relying on the by-now extremely well-worn refrains about the patent system being fragmented, costly and burdensome, implicitly suggesting that the UPC will solve all of this – a matter on which many have opinions… Mr Johnson did include one interesting statistic: about a quarter of all patents which are litigated in the UK are also litigated elsewhere in Europe between the same parties. If anybody has a source for this please let us know! [As we all know, it is rather a leap in logic to assume that all of those parties will want or need a single pan-European judgment, but we shan’t dwell on that here.]
More interesting to this observer were the comments made in reply by Opposition MPs. Jack Dromey MP noted the importance of Britain remaining a “nation of innovation” as it leaves the EU.  He recognised the importance of the patent system in this regard. He called the legislation an “eminently sensible move” and stated that “we wholeheartedly support it”.  That “we” is intriguing. Does this give us a clue to official Labour Party policy on the UPC? Or was he speaking only on behalf of those in attendance? Answers in the comments, please.

It was not all mutual congratulation though. Angela Eagle MP had some pertinent and uncomfortable questions for the Government about various of the elephants which were also crowded into the room besides MPs, clerks, Kats and other creatures. While calling the UPC a “wholly good thing”, Ms Eagle noted the irony of Britain assisting in bringing it into existence on the one hand while “fragmenting itself” from the EU on the other hand. In this respect she noted the fact that the UPC Agreement is not itself EU law, but that it is closely linked to the Unitary Patent Regulations.  She also alluded to expert opinions that the UK would need to take “further steps” to stay in the UPC after Brexit – presumably here referring to the Gordon/Pascoe opinion and others. Ms Eagle further noted the recent developments in Germany and asked whether these would be a help or a hindrance to “getting the timing right” [this observer assumes that she prefers the option of the UPCA entering into force prior to Brexit].  She queried how the UK could remain part of the UPC system without remaining subject to the CJEU’s oversight, and rather pointedly asked Mr Johnson whether his department was prepared for the task of negotiating new agreements regarding the UK’s post-Brexit relationship to the UPC, if it was indeed the Government's intention to remain part of the UPC system.

Relevant though those points were, Ms Eagle unfortunately bundled them all into one rather rambling multi-question intervention which allowed Mr Johnson to respond in broad terms that didn’t shed much light on the Government’s future intentions. He stressed that, while still an EU member, the UK should and will carry out all necessary legislation allowing the Government to ratify the UPCA; he also stated an expectation that “we will need to negotiate with our European partners regarding the future relationship” but stopped short of saying whether or not the Government intended to seek any such relationship. [Only a cynic would suggest that the Government hasn’t thought about this yet.] 
Mr Dromey noted that his support for the legislation was on the basis that there would be an “enduring mechanism” after Brexit and said that British exclusion from the UPC would be a source of “immense concern”.  Mr Johnson’s words in reply were extremely carefully chosen – he simply noted that the Government wanted to put itself “in a position to enable the UPC to come into existence” and “continue to play a facilitating role in setting it up” but that the future relationship would be “subject to negotiation”. The CJEU issue was not mentioned at all. 
After another intervention from Ms Eagle on similar lines as before, the Chair (Adrian Bailey MP) cut the debate short, noting that the discussion was supposed to be confined to the substance of the SI, and put the motion to a vote. The motion was carried unanimously, Mr Dromey’s “immense concern” notwithstanding.

So, what are we to make of all this?

First, and in practical terms: the DLC’s consideration of the SI means that all that remains in the Commons is a formality. A motion will be put before the House on behalf of Mr Johnson’s older brother, the Foreign Secretary, “That the draft Unified Patent Court (Immunities and Privileges) Order 2017, which was laid before this House on 26 June, be approved”. Indeed, such a motion has already been listed in the House of Commons’ Order of Business, although no date has yet been assigned. According to this helpful briefing paper, no debate will take place (the debate having been delegated to the DLC) and so the House can only approve or reject the SI. The last time an SI was rejected by the House of Commons was in 1978 and so it seems that approval is essentially a foregone conclusion.

The House of Lords must also give its approval to the SI in a similar fashion. The corresponding Grand Committee discussion in the House of Lords has been scheduled for 6 December.

If both the Commons and the Lords give their approval swiftly, there now seems to be a realistic possibility that the UK will be in a position to ratify the UPC Agreement before the year is out, or early in 2018 if the Commons and Lords votes cannot be scheduled in the remaining time before the Christmas recess.

Second, there is the rather more Rumsfeldian question of the “known unknowns”, chief among which is what Mr Johnson meant by wording such as “we want to put ourselves in a position” to enable the UPC to come into force, or “continue to play a facilitating role” or “work to bring it into operation”. The Eagle-eyed [pun fully intended] will notice that he has stopped short of saying that we will actually ratify the Agreement. Coupled with his acknowledgement that the future relationship will be a “matter for negotiation” does this give us a hint that the Government might withhold formal ratification as a bargaining chip subject to discussion of the future relationship (not unlike its, erm, wildly successful approach to negotiations over the Brexit bill, Irish border and future trade agreements)? Or is this GuestKat engaging in the type of meticulous verbal analysis against which Catnic warned us? Assuming that the official transcript in Hansard confirms this report, it’s possible to parse Mr Johnson’s words either as fulsome support for ratification or as a rather more noncommittal position. Truly, it seems, actions will speak louder than words over the next few months.

Another set of “known unknowns” is the Labour Party’s policy on the UPC. Mr Dromey’s comments seem to hint at Labour support for the UPC, and, indeed, support for continued UK membership after March 2019. But was he speaking on behalf of the party, or merely expressing a personal view? Enthusiasm for the UPC does not seem to sit comfortably with the party’s apparent commitment to leaving the single market and customs union, or the somewhat ambivalent stance of the current party leadership towards business.

Overall, then – progress has indisputably been made towards UK ratification, but whether the UK will actually ratify the Agreement, and what (if anything) it might seek in post-Brexit arrangements, remain as unclear as before. Of course, if the Bundesverfassungsgericht fails to issue a final judgment before 2019 or 2020 in the German constitutional case, this could all turn out to be rather academic. It will be most interesting to see what – if anything – emerges from Karlsruhe after the deadline for third-party submissions elapses on 31 December."
You can watch the proceedings here.  The transcript in Hansard should be available sometime today.

Claim of joint authorship fails in the Florence Foster Jenkins case

Florence Foster Jenkins - the film
Last week, the High Court settled the dispute between script writer Nicholas Martin and opera singer Julia Kogan over the authorship of the script used to produce the film Florence Foster Jenkins (full decision here). The decision gives a clear summary of the case law on joint authorship applicable in the UK. However, Hacon J’s reasoning becomes a bit  more uncertain regarding the distinction he proposes to draw between ‘primary skill’ and ‘secondary skill’ and how it may apply to a claim of joint-authorship [para 44 to 51]. The subsequent paragraphs detail with each point in turn. 

The dispute

Martin applied to the court to confirm his rights as the sole author and reject Kogan’s joint-authorship claims. Martin and Kogan lived together as partners when Martin began writing the script, which described the life of Florence Foster Jenkins, an American socialite and would-be soprano known perversely for her poor voice (hear here!). Martin produced three drafts to each of which Kogan contributed inter alia edits to the dialogue and suggestions of scenes or themes. By the time Martin produced the last version of the screenplay, the couple had separated. The film premiered in 2016, crediting Martin as  sole author of its script.
The actual Florence Foster Jenkins

Kogan’s case for joint authorship was based on the argument that the contributions she made to the first three drafts of the script had found their way into the last (and fourth) version. Hacon J rejected this contention, stating that  Kogan had failed to satisfy the condition of ‘collaboration’ and ‘sufficient contribution’ to qualify her as ‘joint author’ of the work.  Moreover, the Court stressed that Kogan’s defence was poorly served  claims that lacked in clarity and evidence [para 10-11]. 

‘Collaboration’, consent and ‘common design’

Hacon J noted that Kogan’s claim of joint authorship in the screenplay failed to meet the "collaboration" requirement, noting that Section 10(1) of the CDPA 1988 made it an express requirement for the copyright work ‘to be produced by the collaboration of two or more authors’ to be regarded as jointly authored [para 13 to 15]. Indeed, at the time Martin finalised the last iteration of the script, which served as the actual screenplay of the film, the parties were no longer living together and they had not discussed the final version, unlike  the previous drafts [para 16, 26]. This alone was enough, in Hacon J’s view, for the condition of ‘collaboration’ to fail – as far as the last version of the script was concerned [para 26].

Hogan’s counsel attempted to argue that Hogan's consent for previous drafts to be used within the final script was a form of collaboration, holding  that “consent was enough to make her a collaborator” [para 25]. Hacon J rejected this  claim, stating that

“Consent by an author to the use of his or her work product in combination with that of another is no doubt necessary for collaboration, but not sufficient. There must have been a 'common design'…” [para 25].

‘Sufficient contribution’: ‘ultimate arbiter’, ‘primary skill’ and ‘secondary skill’

Another condition that arises from the definition of joint authorship under section 10(1) is that or all collaborators  make a ‘sufficient contribution’ to the work [para 15, para 28-53]. Hacon J examined why Kogan’s contribution to the previous drafts of the script was sufficient to make her joint author of its final version. Hacon J rejected Martin’s contention that the mere fact that he ‘had the final words as to what would go in and what would not’ was enough to rule that he was sole author [para 28-29]. There  is nothing in the precedents on ‘sufficient contribution’ that warranted such an ‘absolutist’ application of the ‘ultimate arbiter test’ [para 29]. Though this fact is relevant to test of joint-authorship, it is not enough to be decisive taken on its own [para 54, point 9 and 10].

In  concluding that Kogan had not sufficiently contributed to the screenplay [para 85], even by adding to the first three drafts, Hacon J considered the following points and authorities:

the use of paws...a primary skill?
Kogan’s counsel argued that the test for joint authorship should be assessed in light of the test  for ‘intellectual creation’, following the jurisprudence of the ECJ regarding the Infopaq decision.  According to the defendant, ‘the test for whether a work is protected by copyright is now governed by EU law’ [not for much longer in the UK!] [para 38]. The court agreed, but concluded that there was no material difference between the UK test for ‘skills and labour’ and the EU doctrine of ‘intellectual creation’ [para 43]. Hacon J writes:

“Turning to contributions which did form part of the creation of the work, it could be inferred from earlier cases that the significance of the contribution depends on the type of skill employed in making that contribution. Here I use 'skill' as a shorthand term for the intellectual creativity of an author required for copyright protection within the meaning discussed in Infopaq.

Finally, Hacon J goes on to explain how a useful distinction can be drawn between ‘primary skill’ and ‘secondary skill’ employed to create a work [para 44 to 51]. In the context of literary works, Hacon J explains that  primary skills would relate to “the selection and arrangement of words in the course of setting them down”. By contrast, secondary skills would apply to “inventing the plot and character”. With regards to artistic works, Hacon J associates the notion of ‘primary skill’ with "the use of a pencil, brush, computer or other means to create an image". On the other hand, ‘secondary skills’ for this category of works would involve “the composition and selection of colour”. 

Hacon J stresses that the distinction between primary and secondary skills does not imply that one is more important than the other to the creative process, but that the specific test of ‘sufficient contribution’ in relation to joint authorship under copyright law would be more easily met in cases of primary skills. He takes the view that a larger amount of secondary skill must be employed to receive joint-authorship for it, in comparison to primary skill [para 48-50].

This Kat finds the distinction interesting in itself, and as such, worth exploring further. What is questionable  are the types of creative choices Hacon J has classified as either ‘primary’ or ‘secondary’. For example, some would take the view that in many cases  the choice of a painting’s colours or composition is as defining for its originality as ‘the use of a brush’. If so, perhaps all such choices could be seen as ‘primary’. In fact, most nineteenth century painters in Europe dedicated their work to showcasing the importance of light and colour to a painting over brush skills and methodical composition. 

For this reason, this Kat would counsel against formally associating specific creative choices to either type of ‘skill’ through judicial precedents, should the notions of ‘primary’ and ‘secondary’ skills catch momentum in UK case law. However, this more flexible approach, while preventing a rigid taxonomy of creative skills from settling in the jurisprudence on joint authorship, might lead to over-uncertainty and  unpredictability.

The use (any?) brush...a primary skill?
Indeed,  perhaps the primary/secondary skill distinction does not achieve anything that would not be obtained by applying the more general idea-expression dichotomy doctrine.  As such, what Hacon J describes as ‘secondary skills’ would be akin to ‘ideas’ (unprotected by copyright, therefore insufficient contributions) and what he regards to be ‘primary skills’ would be a form of expression (protected by copyright).  

This Kat wonders how readers come down on the issue of primary and secondary skills.

Wednesday, 29 November 2017

EU Commission sets middle course for SEP licensing in Europe

The AmeriKat sinking her teeth into some pretty inflexible 
FRAND royalties  
Today the EU Commission published their much-awaited and debated communication on standard essential patent (SEP) licensing. The document entitled "Setting out the EU approach to Standard Essential Patents" contains 14 pages of key principles aimed at fostering a "balanced, smooth and predictable framework for SEPs".  The key principles reflect two stated objectives:  (1) incentivising the development and inclusion of technologies in standards by providing fair/adequate return and (2) ensuring fair access to standardized technologies to promote wide dissemination.

The AmeriKat is pouring over the communication, but in brief, the key points are as follows:
  • Increase transparency of declaration system and more user-friendly accessibility to databases of standard developing organizations.  ["Three cheers to this proposal" exclaims the AmeriKat...and patent litigators everywhere.]  
  • Higher degree of scrutiny on essentiality claims, with scrutiny being performed by an independent party.  Although the Commission noted that this would have to be balanced against the cost.  
  • Still significant flexibility in how FRAND rates are established.  IP valuation should be focused on the value of the patented technology itself, not value attributed by the fact it has been included in a standard.  Value should not be influenced by the market success of the product unrelated to the patented technology.  Individual SEPs cannot be considered in isolation; parties need to take into account a reasonable aggregate rate for the standard, assessing the overall added value of the technology to avoid royalty-stacking. 
  • Non-discrimination between "similarly situated" licencees is fundamental (see Unwired Planet v Huawei [2017] EWHC 711).   
  • Patent pools within the scope of EU competition law should be encouraged, especially in the context of the Internet of Things (IoT) industries and for SMEs.  
  • Use-based licensing and licence-for-all not mandated, but not ruled out.  It is all on a case-by-case basis and dependent on sector and business models.   The Commission encourages "sectoral discussions with a view to establishing common licensing practices".  It further noted at page 1 that "[o]nce a standard is established and the holders of the SEPs have given a commitment to license them on fair, reasonable and non-discriminatory (FRAND) terms, the technology included in the standard should be available to any potential user of the standard" (i.e. chipset licensing still possible).  
  • Patent assertion entities (PAEs/NPEs) are subject to the same rules as other SEP holders, including (importantly) on injunctions.  
  • However, proportionality is still key when it comes to injunctive relief.  Many implementers may point to para 3.2 which refers to Article 3(2) of the IP Enforcement Directive and the needs to ensure proportionality stating that: "the proportionality assessment needs to be done carefully on a case-by-case basis. The Commission feels that considerations need to be given to the relative relevance of the disputed technology for the application in question and the potential spill-over effects of an injunction on third parties. "  
  • Proportionality of injunctions when PAEs/NPEs concerned highlighted.  See para 3.5 which states "The application of the proportionality principle by courts provides yet another safeguard. The Commission will closely monitor the ongoing impact of these market players on the SEP licensing market in Europe, in particular once the EU unitary patent is operational." 
  • Mediation and arbitration should be encouraged in this area for "swifter and less costly dispute resolution" [although the AmeriKat is not so convinced on the "less costly" claim...].
The Communication concludes that it will
"closely monitor the SEP licensing markets with a particular focus on IoT technologies, by making use of the expert group that will be created and launching further studies if necessary. It will take stock of progress achieved and assess the need for further measures to ensure a balanced framework for smooth, efficient and effective licensing of SEPs on that basis."
The communication is not binding or a statement of law, but will surely be deployed by SEP holders and implementers when negotiating licences and/or when engaged in litigation (including during the FRAND dance, see Huawei v ZTE (Case C-170/13).  This is particularly true given that neither of the camps who were intensely lobbying in advance of the publication seem able to declare an outright victory in respect of their primary positions (see post here outlining the two positions).  It seems to be a score-draw.  However, the Fair Standards Alliance did state in a press release that it was a "victory for all European consumers and innovative businesses - especially Europe's car industry" in that the use-based licensing model that had been proposed by IP Europe was not adopted (see also the FSA's letter to the Commission sent on 15 November 2017).

IP Europe also heralded the Communication as positive (although a bit more muted) with Francisco Mingorance (Executive Secretary of IP Europe) stating that:
“Today is a good day for consumers around the world, as well as the many businesses – small and large – that will rely on ‘fair reasonable and non-discriminatory’ access to the 5G open technology standard to create new products and services for the upcoming Internet of Things.” “IP Europe’s members welcome any initiative that will lead to smoother licensing negotiations. We note that this is particularly important for our SME members because they need as much support in the licensing process as the SME implementers."
"And with that, all parties join hands with the Commission and march off into the sunset..." snarks Merpel....

But before the AmeriKat allows Merpel to end this post on a sarcastic note, it is worth flagging that the Commission was busy today publishing two additional communications both on IP enforcement - which you can read more about here and here.  More to come on these later. 

The VCAST decision: how to turn a private copying case into a case about communication/making available to the public

Earlier today this blog reported that, a few months after Advocate General (AG) Szpunar released his Opinion in VCAST, C-265/16 [here], the Court of Justice of the European Union (CJEU) has now released its decision.

As readers know, this was a reference from Italy (Turin Court of First Instance) that one would have thought [as the questions were indeed about it!] to concern the understanding and application of the private copying exception within Article 5(2)(b) of the InfoSoc Directive to cloud-based video-recording services.

Well, although the AG Opinion is indeed about this, the CJEU judgment is not. 

The Court, in fact, made the case about the right of communication/making available to the public within Article 3 of the InfoSoc Directive.

Let’s start then and see why VCAST is not really – or at least is no longer - a case about the private copying exception.


The facts of the case are rather simple: basically, the Italian litigation revolves around the lawfulness of a cloud-based recording service, provided by VCAST, that allows its customers to make copies of terrestrial TV programmes broadcasts including, among other things, those of RTI. 

Importantly, the possibility to make such recording is granted irrespective of whether customers can lawfully access the programmes terrestrially, ie offline. A clear instance is, as well explained by the AG in his Opinion, that for RTI programmes it is generally required that the user happens to be on the Italian territory.

Under Italian law it would appear that VCAST activity might be lawful, although the CJEU did not consider this a given. Nonetheless, the Court deemed it helpful to base its analysis on the assumption that Italian private copying exception applies to VCAST’s activities. 

The question became therefore whether a national law of this kind is compliant with what Article 5(2)(b) of the InfoSoc Directive (read in combination with the three-step test in Article 5(5) therein) provides.

Private copying … but is VCAST’s service only about the making of copies?

After recalling that exceptions should be interpreted strictly, the Court confirmed the finding of the AG – which follows from the seminal Padawan decision - that for the private copying exception to apply it is not required that the beneficiary is the one who directly makes the copy of the copyright work at issue.

However - and this is the interesting part of the Court’s analysis - VCAST’s activity is not about reproductions or, at least, is not just about reproductions. Hence, the discussion around the private copying exception is not the whole story.

More fundamentally, in fact, VCAST does not only organize the recording of TV programmes for its customers but, instead, makes them available to them in the first place. It follows that VCAST’s activity cannot be assessed exclusively under the binary distinction reproduction/private copying. It is also necessary to take into account the making available part and, with it, Article 3 of the InfoSoc Directive.

What does all this lead to?

“[A]lthough the private copy exception means that the rightholder must abstain from exercising his exclusive right to authorise or prohibit private copies made by natural persons under the conditions provided for in Article 5(2)(b) of Directive 2001/29, the requirement for a strict interpretation of that exception implies that that rightholder is not deprived of his right to prohibit or authorise access to the works or the subject matter of which those same natural persons wish to make private copies.

It follows from Article 3 of Directive 2001/29 that any communication to the public, including the making available of a protected work or subject matter, requires the rightholder’s consent, given that, as is apparent from recital 23 of that directive, the right of communication of works to the public should be understood in a broad sense covering any transmission or retransmission of a work to the public by wire or wireless means, including broadcasting.” [39-40]

So, again, communication/making available to the public

The Court thus moved on to recall the requirements for an act of communication (or, rather, making available in this case) to the public [the judgment refers extensively to Reha Training, which – despite being a Grand Chamber ruling – has been quite neglected in decisions like GS Media, Filmspeler and Ziggo].

Interestingly, the CJEU stated that to have an ‘act of communication’ a transmission of a copyright work is required. The Court noted that there would be a transmission made by the broadcasting organisation, on the one hand, and a transmission made by VCAST, on the other hand. Both are done using a different means of transmission for the protected works, and are intended for different publics.

The result?

“without the rightholder’s consent, the making of copies of works by means of a service such as that at issue in the main proceedings could undermine the rights of that rightholder.
Accordingly, such a remote recording service cannot fall within the scope of Article 5(2)(b) of Directive 2001/29.” [51-52]

This means that VCAST’s service cannot be provided without the prior authorization of the relevant rightholders, in that its activity also amounts to communication/making available to the public within Article 3 of the InfoSoc Directive.


The outcome of the VCAST case is not surprising, nor is the fact that the CJEU answered the questions referred by the national judge rephrasing them and considering issues other than those raised.

More generally, the decision highlights once again the absolute centrality of the right of communication/making available to the public, especially in the online environment.

While cloud-based video recording services per se are not to be regarded as unlawful, certainly the CJEU decision sets precise boundaries for designing a service that would be compatible with EU law. 

The first condition, stressed in particular by the AG, is that users of a cloud-based recording service must have lawful access to the terrestrial programmes that they wish to record in the first place. 

The second condition is that the provider of a video-recording service cannot elude the authorization of the relevant rightholders when what it wishes to provide is a service that allows the recording of content by making it available for recording in the first place. But is this a probatio diabolica? Possibly. If so, then cloud-based video recording services would likely need to be licensed to operate under EU copyright law without the risk of infringing third-party rights.

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