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

Wednesday, 7 December 2016

PPDs and standard disclosure - can you have your cake and eat it?

In the post-Brexit referendum world, is anyone else suffering from fatigue concerning the English proverb regarding the consumption of cake?  This was even before a long lens photographer caught handwritten notes from a conservative MP's aide leaving a meeting with the Department for Exiting the EU last week, apparently commenting on a preferred post-Brexit model for the UK (see here).  [The IP Kitten - trained from day one to keep files and notes hidden when in public places - shudders at such wrecklessness]. 

What about PPDs and standard disclosure in the Patents Court?  Can the patentee be pro having cake and pro eating it? Mr Justice Birss has provided the answer in Varian Medical Systems AG v (1) Elekta Limited; and (2) Elekta Holdings Limited [2016] EWHC 2679 (Pat).  This GuestKat apologises for continuing the cake idiom, but suggests it is worth it so that she can share a photo of the White Book (Volume 2) cake, as baked by her multi-talented Stephenson Harwood colleague Stephanie Wickenden.

Essential eating for all IP litigators
The dispute concerns Varian's patent concerning a machine for use in radiotherapy in which a magnetic resonance imaging system is used to image the tumour which is receiving or is to receive the radiotherapy.  The radiation beam comes from the linear accelerator. The invention provides for the control of the radiation beam in "real time" so that, if the tumour moves, as compared to its location as specified in the treatment plan, the radiation beam can follow it.

The claimants pleaded case included the following: "After publication of the patent, prior to the issue of the claim form and thereafter, the defendants have infringed and threatened to intend to infringe [the claims] by doing the following acts in the United Kingdom without the claimant's consent: (a) ... offering to dispose of ... a system comprising an MRI (magnetic resonance imaging) guided radiotherapy machine as claimed in at least the aforesaid claims of the patent."   The defendants contend that they do not offer for disposal a machine with the relevant characteristic.


CPR Part 63 and Practice Direction 63 para 6.1

The claimants submitted that offering for disposal was in issue but that no disclosure has been given in relation to it by the defendants.

The application before Birss J concerned a discrete point of patent practice namely what the Product and Process Description (PPD) is for, and how the provision of a PPD interacts with a party's standard disclosure obligations.  To the best of this GuestKat's knowledge, the issue does not appear to have been addressed head on in any other reported case.  CPR Part 63 r63.9 relates to disclosure in patent cases and practice direction 63PD 6.1 is the provision which deals with product and process descriptions:

"6.1 Standard disclosure does not require the disclosure of documents that relate to –

(1) the infringement of a patent by a product or process where –

(a) not less than 21 days before the date for service of a list of documents the defendant notifies the claimant and any other party of the defendant's intention to serve –

(i) full particulars of the product or process alleged to infringe; and

(ii) any necessary drawings or other illustrations; and

(b) on or before the date for service the defendant serves on the claimant and any other party the documents referred to in paragraph 6.1(1)(a)."


Birss J concluded that paragraph 6.1 is concerned with the nature and characteristics of the product or process in issue and the question of whether the product or process falls within the claims.  The fact that Elekta had served a Product Description in accordance with the practice direction did nothing to alleviate the defendants from whatever disclosure obligations they otherwise had relating to acts of infringement.  In other words, the applicant's request for standard disclosure related to a different issue [more of a coffee with your cake than a second slice, muses the IP Kitten].  As a result, there was no reason why Elekta should not disclose documents which relate to communications with customers or potential customers relating to the development of its product. 

Tuesday, 6 December 2016

BREAKING: Unanimous Supreme Court in Samsung v Apple finds that damages may be based on a component, not whole product

Has a bite been taken out of Apple's damages
 or is it too soon to tell?
The AmeriKat has perhaps become cynical over the course of 2016.  When asked recently what she thought motivates people's decision making process, her answer was resolutely "money".  Money, money, money (as Abba would say).  The Supreme Court has also had money on their mind (as Snoop Dog would say).

Today, in Samsung v Apple (2016), an unanimous Supreme Court has held that where a multi component product is concerned, damages need not be calculated on the basis of the whole end product sold to a consumer.  Instead, damages may be assessed on the basis of only a component of that product. The dispute concerns Apple's design patents for specific elements of the iPhone and Samsung's previous order to pay Apple $399 million in damages for infringing its designs.  For a summary of the background see the AmeriKat's previous posts here.

35 USC § 289 states that:
“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250 . . . .” 
The question before the Supreme Court was:
Must the relevant "article of manufacture" always be the whole end product sold to the consumer or can it also be a component of that product?  
Depending on the answer, the design patent holder may always be entitled to the infringer's total profit of the whole product or only sometimes entitled. 

In a refreshingly short decision, Justice Sotomayor (delivering the opinion of the Court) stated that the term "article of manufacture" includes both a product sold to a consumer and a component of that product:
"So understood, the term “article of manufacture” is broad enough to encompass both a product sold to a consumer as well as a component of that product. A component of a product, no less than the product itself, is a thing made by hand or machine. That a component may be integrated into a larger product, in other words, does not put it outside the category of articles of manufacture."
The Federal Circuit's narrower reading of "article of manufacture" was that because consumers could not purchase individual components of the whole product, they therefore did not constitute an "article of manufacture".  In their words "[t]he innards of Samsung’s smartphones were not sold separately from their shells as distinct articles of manufacture to ordinary purchasers".  This, the Court held, could not be squared with the text of Article 289.  The Supreme Court therefore reversed the Federal Circuit's decision.

Although the parties had asked the Supreme Court to resolve, for each of the design patents at issue, whether the relevant article of manufacture was the smartphone or the particular component, the Court declined stating that:
"Doing so would require us to set out a test for identifying the relevant article of manufacture at the first step of the §289 damages inquiry and to parse the record to apply that test in this case. The United States as amicus curiae suggested a test, see Brief for United States as Amicus Curiae 27–29, but Samsung and Apple did not brief the issue. We decline to lay out a test for the first step of the §289 damages inquiry in the absence of adequate briefing by the parties. Doing so is not necessary to resolve the question presented in this case, and the Federal Circuit may address any remaining issues on remand."
So back to you Federal Circuit to figure out what the right test is....

(Belatedly) remembering Raymond Niro, the most influential person in patent litigation whom you may have never heard of


In August, 2016, one of the most influential persons in modern patent litigation, Raymond Niro, passed away at the age of 73. It has taken IPKat some time to properly recall Mr. Niro, but as we approach the end of 2016, it is appropriate to do so now. Some (indeed many) Kat readers may not recognize Mr. Niro’s name, but are likely familiar with the moniker that, according to many accounts, was bestowed upon him by an assistant general counsel of Intel. That nickname was "patent troll”, a term that has become a central part of contemporary IP parlance. If there is one person who is most directly identified with the phenomenon, known in a more anodyne fashion as NPE (non-practicing enterprise) or PAE (patent assertion entities), it was Mr. Niro. Vilified, condemned, or worse; admired, revered or even more; probably no person in contemporary IP practice was more divisively viewed than Mr. Niro.

IPKat does not intend to address the debate over NPE’s, PAE's and the like, which has been voiced many times on this blog site, and the arguments over which will surely continue to rage on for the foreseeable future. The intention of IPKat is modest and personal—to briefly recount the life of the person who changed the way that patent litigation is perceived and practiced.

Born to Italian parents in Pittsburgh (ironically, perhaps, he died while visiting the island of Capri in Italy), Mr. Niro studied chemical engineering, worked for a time at Shell Oil as an engineer before taking a position at DuPont, where he wrote patents. Like so many patent practitioners of his time, he studied law at night at George Washington University. (This Kat can only hope that one or more graduates of this program will yet share in writing their memories of that experience.) After completing his studies, he moved to Chicago in 1969 to join the IP firm now known as Brinks Gilson & Lione. In 1976, he left the firm to set up a law office with Gerard Hosier. There, they came up with what is described as a “novel” form of client representation at the time—contingency representation of small inventors in patent litigation cases. In 1994, he and Mr. Hosier parted ways and Mr. Niro set up a law firm bearing his name.

Mr. Niro’s courtroom skills were legendary, and he is said to have possessed special skills in cross-examination and being able to connect with the jury. He was a reported master at focusing the case before the jury on the (small, aggrieved) inventor rather than the invention. It is reported that he was victorious in 20 jury verdicts in a row, generating awards in excess of $400 million dollars (reportedly, he set his fee at between 35%-45% of the gross revenues received.) In addition to his court room victories, there were numerous settlements reached after the mere receipt of a cease and desist letter from his office.

Mr. Niro never seemed to waiver from his declared commitment to representing the small inventor. His son Dean is quoted in the Chicago Tribune as saying that his late father—
"…. loved the small inventor and was the champion of the little guy. He was never happier than when he was meeting with the individual inventor, and when he represented those people, it meant more to him than you could imagine."
Mr. Niro apparently enjoyed substantial financial success in his practice. He endowed the Niro Distinguished Intellectual Property Lecturer and Raymond P. Niro Professor of Intellectual Property Law at the College of Law at DePaul University.

Over the last decade, a number of factors have made it more challenging for patent plaintiffs, including the America Invents Act, U.S. Supreme Court decisions on patentability and fee shifting, and appellate court decisions on patent damages. President Obama himself called out against the practice of patent assertion entities. Debate will continue on the pros and cons; Kat readers are invited to reach their own conclusions. What is undeniable is that during his career Mr. Niro exerted a towering influence over the practice of patent litigation.

For more on Mr. Niro, see here and here.

Photo from Chicago Tribune (Family photo / Handout)

Genuine use of three dimensional EU trade marks - heated arguments over ovens

Registered mark
In 2004, the German company Bullerjan GmbH applied for the shape depicted on the right as EU trade mark (or Community trade mark, as it was then) for ovens (stoves). In 2005, the mark was registered.

In 2012, plaintiff Toni Klement filed an action for cancellation of the mark for lack of genuine use. Klement's principal argument is that the mark was always used in connection with the sign "Bullerjan" affixed to the front of the oven (see image below). Klement lost both before the EU IPO and the General Court, but the Court of Justice on 1 December 2016 reversed the General Court's judgment (EU:C:2016:918). Since the order is only available in German and French, the following provides a brief summary for the English speaking public.

Article 15 EU Trade Mark Regulation (207/2009) reads
1.   If, within a period of five years following registration, the proprietor has not put the Community trade mark to genuine use in the Community in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the Community trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use.
The following shall also constitute use within the meaning of the first subparagraph:
(a) use of the Community trade mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered [...]

[Note that the wording has been amended by Regulation (EU) 2015/2424, but the above is the relevant version for this case.]

Actual use
The General Court in its judgment of 24 September 2015 (EU:T:2015:688) reminded everybody that genuine use required use that served the main function of the mark, namely identification of source (with reference to EU:T:2004:225). Genuine use did not require use in isolation of the registered sign (with reference to EU:C:2005:432). However, a registered mark that was used in connection with another sign must still be perceived as indication of origin (EU:C:2013:253 - Colloseum Holding). The joined use must further not affect the distinctive character of the registered mark (EU:T:2005:438 - CRISTAL CASTELLBLANCH). This required taking into account both the distinctiveness of the added element(s) (EU:T:2014:119 - PALMA MULATA) as well as the distinctiveness of the registered mark. The weaker the distinctiveness of the registered mark, the more readily it was affected by the addition of a distinctive element (para. 33).

With regards to the case at issue, the General Court held that the shape of the oven as registered was unusual, reminding of an aircraft engine rather than a stove, and highly distinctive, despite its functionality and "notwithstanding that other manufacturers sold ovens under the word marks Bruno and Bulder that have a very similar shape, because this may be because these manufacturers want to achieve a certain technical effect, namely heat exchange by convection" (para. 39).

Competitor's "Bruno" oven
It was primarily this last statement the Court of Justice took issue with. It held, in essence, that it was contradictory to consider the "Bullerjan" oven's shape "unusual" and highly distinctive when there were similar shapes on the market. The degree of distinctiveness of the registered mark was highly relevant when assessing whether it was affected by the addition of other distinctive elements (with reference to EU:C:2016:642 - Lotte/EUIPO, para. 30 - only available in French and German). The case was sent back to the General Court to re-assess why the shape of the registered mark was perceived as an indication of origin and not merely as the functional appearance of the goods claimed given the existence of similar shapes on the market.

The case leaves me somewhat puzzled. The reasoning of the General Court seems indeed unconvincing. But if the shape of the "Bullerjan" oven was highly distinctive when registered - and that seems to be the case to me at least, functionality notwithstanding - then why has the trade mark owner tolerated the use of similar shapes by its competitors? Unless there are good reasons for it which escape me, the case serves as a reminder that registering a mark is only part of the game. You also need to enforce your mark, or you risk losing it.

Wild Boys Sometimes Lose It: Duran Duran fail to reclaim their US copyright

A few weeks after his eighteenth birthday, Duran Duran co-founder Nick Rhodes signed a music publishing agreement assigning his existing and future copyrights to a publisher, as did the other band members. None of them was aged more than 21 at the time.

Had they taken advice from a copyright lawyer at the time (1980), one can imagine a conversation along the following lines:

Duran Duran: Please please tell me now: Is there something I should know? Is there something I should say?
 Lawyer: You mean, is there something you should say, before your copyright goes away?
Duran Duran: That's funny, for a lawyer. But we didn't agree to pay you a hundred quid for your songwriting talents. What do you think about this contract?
Nick Rhodes, co-founder of Duran Duran (photo: Eva Rinaldi, CC BY_SA 2.0)
Lawyer: Well, you're agreeing here to assign all of your existing and future copyrights worldwide for their full term. That's pretty standard stuff. But there's a new Copyright Act in the United States, just two years old, and it will allow you to reclaim your copyright from the publishers after 35 years. Which is nice, though it does rather assume anyone will be buying your records in 2015 (no offence). 
Duran Duran: Eh thanks. What exactly should we do? 
Lawyer: When the 35 year mark is approaching, you'll simply serve a notice on the publisher. Tell them you want your copyright back, lodge a copy of the Notice with the Copyright Office and hey presto it will revert to you. So in your contract, you could include a clause stating that the assignment is without prejudice to your rights under section 203 of the US Copyright Act to terminate the assignment of the US copyright. 
Duran Duran: They'll never go for it. Have you seen our haircuts? They won't change their standard contract for us. And if they don't sign us up, nobody will.
Lawyer: Well don't worry about it. When Congress was passing the law, they had unequal relationships like that in mind. Here's what they say in House Report 94–1476 introducing the law: 
"A provision of this sort is needed because of the unequal bargaining position of authors, resulting in part from the impossibility of determining a work’s value until it has been exploited ... Instead of being automatic, as is theoretically the case under the present renewal provision, the termination of a transfer or license under section 203 would require the serving of an advance notice within specified time limits and under specified conditions. However, although affirmative action is needed to effect a termination, the right to take this action cannot be waived in advance or contracted away."  
And it's right here in section 203(5): "Termination of the grant [of a transfer or licence of copyright] may be effected notwithstanding any agreement to the contrary, including an agreement to make a will or to make any future grant." So basically, it doesn't matter what you sign now. You can't contract away the right to claim the copyright back when the time comes. 
Duran Duran: Cool. Now about your fees. We've been thinking. Maybe we can cut you in on the royalties for our first three albums instead? 
Lawyer: Thank you, but my understanding is that you have never even been inside a recording studio. I think I'd prefer the hundred pounds we agreed on. In cash please, boys.
Factual background

This conversation never happened of course, and indeed we don't know if the band took any advice or knew about the possibility of claiming the US copyright back in the future. What we do know is the band members signed a music publishing agreement assigning the "entire copyrights" in their existing and future works for the "full term" of the copyrights, to Gloucester Place Music Ltd (then called Tritec Music Ltd, and now part of the Sony/ATV group).

In 2014, with the 35 year point approaching, band members Nick Rhodes, Simon Le Bon, John Taylor, Andy Taylor and Roger Taylor, duly served Notices under section 203 in respect of 37 songs, including most of their best-known works like "Girls on Film", "Rio", "Hungry Like The Wolf" and "Is There Something I Should Know?".

Gloucester Place Music responded by seeking a determination from the English High Court that such Notices, if not retracted, would represent a breach of contract, i.e. by improperly terminating an assignmentwhich the band members had no right to do.

Effect of contractual agreement

Mr Justice Arnold has decided in favour of the publisher and against the band members. The case is Gloucester Place Music Ltd v Le Bon & Ors [2016] EWHC 3091 (Ch). His decision is based on the fact that the contract was made under English law, and on its proper interpretation the parties are assumed to have been aware when entering into the Agreements, at least in general terms, of the effect of section 203, and to have nevertheless contracted away the US copyright for its full term. He summarised at [44]:

"The language of clause 3(a) is wide and general. Particularly when read together with clause 4, I consider that what the language would have conveyed to a reasonable person having the relevant background knowledge was that the parties' intention was that the "entire copyrights" in the Compositions should vest, and remain vested, in the Claimant for the "full term" of the copyrights. That implicitly precludes the Group Members from exercising rights under US law which have the result that the Claimant's ownership of the copyrights is brought to an end prior to their expiry. Moreover, this interpretation is reinforced by clause 6(b), by which the Group Members promised not to transfer any interest in the copyrights to any other person, which I read in context as meaning any person other than the Claimant. (This is clearer from the wording of clause 6(b) of the Service Company Music Publishing Agreements, which refers to "any person, firm or corporation other than Tritec".) In effect, what the Group Members have done by exercising their rights of termination is to transfer the reversionary interest in the copyrights from the Claimant to themselves."
The reference to "a reasonable person having the relevant background knowledge" was held to include some knowledge of US copyright law. In other words, someone signing a contract such as this was assumed to know, at least in general terms, about the possibility of reclaiming copyright in the US.

Insofar as it goes, this may be a pretty unremarkable interpretation of a contract under English law. But what about the fact that under US law the right to terminate the assignment cannot be contracted away?

Conflict with US law

Arnold J. noted the US law aspect but pointed to the fact that Article 7(1) of the Rome Convention, which provides for effect to be given to the mandatory rules of the law of another country with which the situation has a close connection, does not have the force of law in the United Kingdom by virtue of section 2(2) of the Contracts (Applicable Law) Act 1990.

The issues of US law were treated as questions of fact. No expert evidence had been provided as to the meaning of the US statute, nor had permission been sought to do so. So efffectively they were never brought properly before the court.

The solicitor for the defendants (i.e. the band members and their service companies) had made a statement in his witness statement that:

"As a consequence of Section 203, a US Court would not allow a claim for damages for breach of a contractual agreement because the statutory termination right supersedes any contractual right. This applies whether that contract was governed under English or US law." 
The defendants argued that this was admissible evidence, and was unchallenged. Arnold J had little time for this argument. It was no more than a statement of case with which they could expect the other side to take issue at trial. It was a statement made by an English solicitor who, he noted, claimed no expertise in US law, with no basis given and no citation of any decided cases supporting the assertion, and nor did it address whether the position was the same in the period 1980-1983.

To the IPKat it appears that this failure to introduce evidence as to US law represented a major oversight by the defendants, or at least a very risky assumption that the point was self-evident. This Kat cannot tell whether the outcome would have changed if the judge had evidence that the position as stated by the solicitor was both correct as to the law now and at the relevant time, but the failure to adduce this evidence undermined the defendants' reliance on the US law point.

Nick Rhodes, commenting on the judgment, said "We are shocked that English contract law is being used to overturn artists’ rights in another territory. If left untested, this judgment sets a very bad precedent for all songwriters of our era and so we are deciding how properly to proceed."

The IPKat would like to see the case appealed, and would prefer to see artists free to exercise their statutory rights, but is less convinced that the decision sets a "very bad precedent". A future litigant who introduces strong expert evidence on the US law point would at the minimum ensure that the court would have to consider afresh the conflict of laws question.

Rhodes also commented that the band members signed the agreement as "unsuspecting teenagers ... when we knew no better". This bears out the "unequal relationship" rationale for section 203, and is another reason why it would be extremely interesting to see the US law point properly considered.

Arnold J's decision serves a salutory purpose, reminding anyone signing a publishing agreement that the court will interpret the agreement from the viewpoint of a reasonable person with the necessary background information, including some knowledge of copyright law. This makes obtaining good advice all the more critical when the bargaining position is unequal.

Monday, 5 December 2016

Around the IP Blogs!

This kitten brings you the highlights of some IP law blogs!

Getting ready to catch up!
On The 1709 Blog, Marie-Andree Weiss comments on the Court of Cassation decision of 16 November 2016, ECLI: FR:CCASS:2016:C101300, which ruled that, under French Law, moral rights cannot belong to a corporation. The dispute involved the unauthorized use of photographs of watches in connection with an advertising campaign other than the one that was originally commissioned.

Staying with copyright, Mark Anderson discusses on IP Draughts the English Court judgment of 2 December 2016 in Gloucester Place Music Ltd v Le Bon & Ors, [2016] EWHC 3091 (Ch). The case involved the worldwide agreements governed by English Law assigning the 1980s band Duran Duran songs to Gloucester Place Music Ltd. In 2014, the band requested the reversion of the assigned copyright in the USA, by serving a series of notices based on section 203 of the US Copyright Act. The English Court found that the band “have acted in breach of the agreements by serving the notices, or, where they have not yet taken effect, will do so if they are not withdrawn”. Accordingly, the agreements governed by English law prevent the band from requesting the reversion of the assigned copyright in the USA.

Moving to trademarks, IPKat Neil Wilkof discusses on IP Finance Marriott’s branding strategy after the Starwood acquisition. Such a takeover involves the expansion and management of 30 brands, some of them different luxury brands addressed to the same type of customers. Time will tell if customers will discern the distinctions.

Staying with trademarks, Richard Taylor and Alasdair Muller blog on RE: MARKS ON TRADEMARK AND COPYRIGHT about the English Court of Appeal decision of 1 November 2016 in R v C and others, [2016] EWCA Crim 1617. The Court found that the sale and distribution of grey goods can be a criminal offence under the article 92 of the Trade Marks Act 1994.

Over at Kluwer Trademark Blog, Boris Malakhov reports the Russian IP Court judgement in Daimler AG v TMR Import, case No. A41-39075/2016. The Court found the inapplicability of the Customs Code pre-trial term of 10 days in parallel import issues. The proceedings were started based on such a pre-trial term instead of the pre-trial term of 30 days set out in the Federal Law No. 47-FZ.

Finally, Vilhelm Schröder discusses on TrustinIP the challenges of trying to prevent the further disclosure of a trade secret once disclosed and how to obtain damages in such a situation. Vilhelm provides a practical approach for enforcing trade secret rights in the context of the new EU Trade Secrets Directive, particularly regarding confidentiality obligations when the parties are bound up in litigation.

Sunday, 4 December 2016

"tronc"--the most bizarre rebranding of 2016?


About this season last year, this Kat reported on his brand of the year—"Cofix", the name of an Israeli-based company that sells a variety of products at one fixed price. Moving from the sublime to the ridiculous, this Kat will this time recognize arguably the most bizarre rebranding for 2016.

The dubious winner is the formerly-known Tribune Publishing Company, the third-largest newspaper publisher in America, being the owner of such newspapers as the Chicago Tribune (this Kat ever so fondly remembers receiving daily to his apartment door a copy of the Chicago Tribune over 40 years ago) and the Los Angeles Times. But the name Tribune is no more. In its place, the rebranded moniker is “tronc”, being short for “Tribune online content”, as part of what the company describes as refashioning itself as a “content curation and monetization company focused on creating and distributing premium, verified content.” So what is wrong with “tronc”? As the poet wrote— “let me count the ways.”

This Kat first considered whether the word “tronc” might also be the name of a character in something like Star Trek, Harry Potter or The Lord of the Rings? It seems not. But it does turn out that “tronc” is a dictionary word, meaning “(in a hotel or restaurant) a common fund into which tips and service charges are paid for distribution to the staff.” As such, it is one of those words which, from the trademark law point of view, can be descriptive with respect to some goods or services and arbitrary to others. As for a “content curation and monetization company”, the word is on its face arbitrary (although this Kat cannot recall all the instances in which he has been asked by a trademark examiner whether the mark in question is an acronym for something more descriptive). However, it is highly unlikely that a consumer will connect between “tronc” and the “Tribune online company.”

So, once we have agreed that the mark is arbitrary, let’s move from the pure trademark law aspects to consider what makes a brand “good. On this point, James Surowiecki of The New Yorker magazine has offered some insights in his November 14th piece, “What’s in a Brand Name?” Surowiecki begins by recalling the Platonic dialogue Cratylus, and the difference of view between Cratylus and Hermogenes over whether “there is sometimes a connection between meaning and sound.” The field of “phonetic symbolism” has sought to describe circumstances when this might be the case.

Surowiecki writes that—
“In one experiment, people were shown a picture of a curvy object and one of a spiky object. Ninety-five per cent of those who were asked which of two made-up words—“bouba” or “kiki”—best corresponded to each picture said that “bouba” fit the curvy object and “kiki” the spiky one. Other work has shown that so-called front-vowel sounds, like the “i” in “mil,” evoke smallness and lightness, while back-vowel sounds, as in “mal,” evoke heaviness and bigness. Stop consonants—which include “k” and “b”—seem heavier than fricatives, like “s” and “z.”
As Wikipedia observes, “[t]he defining characteristic of a back vowel is that the tongue is positioned as far back as possible in the mouth without creating a constriction that would be classified as a consonant. Back vowels are sometimes also called dark vowels because they are perceived as sounding darker than the front vowels.” The focus is on so-called phonemes, described as being—
“the perceptually distinct units of sound in a specified language that distinguish one word from another, for example p, b, d, and t in the English words pad, pat, bad, and bat.”
This line of research has discovered that dark beers do better, brand-wise, if the name contains a back vowel. “Frosh” for ice cream, graced by a “big, creamy vowel”, did better than “Frish” for the same product. On that basis, Häagen-Dazs comes in for special praise— “a double back vowel emphasized by a nonsensical umlaut.” Other findings include that alliteration and vowel repetition are good and that the letters “X” and “z” are more likely to be remembered and connote speed and fluidity. For multinational companies seeking a single brand across borders, the fact that at least some of the observed phonemic relationships are consistent in various languages is of particular interest. Against this backdrop, Surowiecki observed that--
“Perhaps Tronc thought it was being boldly unconventional, but ignoring rules that may originate in human instinct is foolish. Tronc wants to seem light, fast, forward-looking, and unburdened by the media industry’s past, but its back-vowel sound and its leaden “k” ending sonically convey something heavy, slow, and dull.”
Surowiecki’s criticism is, all things considered, unequivocal but measured. Consider that a satirist named John Oliver is reported by Wikipedia to have described tronc as “the sound an ejaculating elephant makes." This Kat tends to agree with the thrust of the criticism about "tronc"(although he has no first-hand knowledge about elephants) and he can only muse—how did a company whose raison d'être is dealing with words get it so wrong?

Saturday, 3 December 2016

Never too late: If you missed the IPKat last week!

Too busy making a list and checking it twice to keep up with IPKat this week? No problem, here is the 124th edition of Never Too Early For Christmas References Never Too Late.

Festive Feline Level 100

The case of Napp Pharmaceutical Holdings Limited v (1) Dr Reddy's Laboratories (UK) Limited (2) Sandoz Limited [2016] EWCA Civ 1053 was previously reported on the IPKat here (first instance) and here (interim application). This case whizzed through to the Court of Appeal in under six months from the issue of proceedings and Eibhlin summarises the judgement.


Internkat Tian brings us all the details of the 2nd EU-China IP Forum which she attended in London on 8th November, organised by IP Key and the Centre for Commercial Law Studies (CCLS), Queen Mary University of London (QMUL), with support from Renmin University of China (RUC).

The Journal of Intellectual Property Law & Practice (JIPLP) conference will take place Monday, 16 January 2017 at the Simmons & Simmons offices in London. Register here.

The 11th edition of the Pan-European Intellectual Property Summit takes place on 1st and 2nd December at the World Customs Organization in Brussels. Register here.

Kat friend Jeremy Morton brings a summary of The ItechLaw Association held its European conference programme in Madrid on November 9-11.

David gives us an a roundup of what’s been happening in relation to the European Qualifying Examination (EQE) for prospective patent attorneys.

Southampton law student Stephen Barratt provides a review of the Court of Justice of the European Union (CJEU) decision in Microsoft, a reference for a preliminary ruling from Latvia concerning the principle of digital exhaustion as applied to computer programmes.

A review of the happenings in the IP bloggersphere in Around the IP Blogs and a of  Sunday Surprises including IPKat topping the list of the most popular copyright law blogs of all time!

*** PREVIOUSLY ON NEVER TOO LATE ***

Never Too Late 123 [week ending on Sunday 20 November] | Time for a Haar-cut - please do not relocate the Boards of Appeal of the European Patent Office | Remember the House Ban? How two years flies past | Gilead triumphant as Court of Appealupholds Arnold J in Idenix's Sovaldi appeal |
BREAKING: CJEU follows AG and holds French law on out-of-print books contrary to EU law | Again on the first post-GS Media national decision | Top 5 things IP lawyers must remember about English contract law | Monday Miscellany | Around the IP Blogs |

Never Too Late 122 [week ending on Sunday 13 November] | Is depositing better than sequencing? | European Commission on Biotech Directive: tomatoes about to be squashed? | The U.S. presidential election of 1876: votes, cannabis and intellectual property|  CJEU upholds duty to reverse-engineer trade marks in Rubik's cube decision, but what about the actual v abstract test?  | BREAKING: CJEU says that EU law allows e-lending| Around the Web Blogs| IP Publishers and Editors' Lunch 2016!| Firings will continue until morale improves - Merpel revisits the EPO| 

Never Too Late 121 [week ending on Sunday 6 November] | Sunday Surprises | Firings will continue until morale improves - Merpel revisits the EPO | Will too much of one and not enough of the other spell bad news for innovation? | BREAKING NEWS Brexit - High Court rules Government cannot Invoke Article 50 under Crown Prerogative | Canada's new approach to diagnostic practices prompts division at CIPO

Never Too Late 120 [week ending on Sunday 30 October] | Court of Appeal on Pregabalin - Pfizer still in pain, but Swiss claims re-interpreted again | Procedural fairness and the Penalties Regulation: R(Roche) v Secretary of State for Health | Meet the Trade Mark Judges (Part two) | AG Szpunar says that the notion of "places accessible to the public against payment of an entrance fee" does not apply to hotel rooms | Charlie Chaplin won't come back from the dead, neither will Montis' copyright in the Chaplin chair | Linking to unlicensed content: Swedish court applies GS Media | Urgent crowd sourcing request-- "ugly" clauses in IP agreements | How much attention should the IP community give to non-compete clauses? | Friday Fantasies | Around the IPKat’s Cousins Blogs


Friday, 2 December 2016

Next week - UK Supreme Court hears the Brexit case

Next week, there is a once-in-a-lifetime opportunity to become a UK constitutional law expert.  The Supreme Court (which truly is a UK court, not an England-and-Wales court) will hear the appeal on the various legal challenges related to the Brexit process.  This is not of course an intellectual property matter, but please show forbearance as this Kat is enormously excited about it. It is probably the most important legal case in his lifetime, and could well be the case of the century. Many readers will doubtless already be aware of next week's hearing, but others may not be familiar with the arrangements.

As a brief background, the case is not about whether or not the UK will leave the EU.  Rather, it is about who, within the UK constitutional framework, has the power to take the decision to leave the EU referred to in Article 50(1) of the Treaty on European Union, and make the notification under Article 50(2).  Is it the Prime Minister acting alone, or is an Act of Parliament (and possibly the consent of the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly) required?  The case therefore goes right to the heart of the constitutional settlement in the UK, including the rights of the devolved legislatures of Scotland, Wales and Northern Ireland, and the respective powers of the Westminster Parliament on the one hand and the Government, who have executive powers independent of Parliament under what is termed the Royal (or Crown) Prerogative, on the other.

The historic hearing is set for four days from 5 to 8 December and includes as advocates some of the finest legal minds in the country. For the first time, the Supreme Court will sit in its full current composition of 11 judges (handily avoiding both the possibility of a tied decision, and any suspicion that a different composition would have reached a different conclusion).

There is unprecedented and most welcome transparency about the case.  Not only will the case be streamed live from the Supreme Court website (so, unless the technology breaks down, you will be able to view from the comfort of your office, your sofa, or a beach in the Seychelles), but the submissions of the parties have been made available online as well.  These, together with a timetable for the hearing (illustrated below), can all be found on the Supreme Court website.  So you can spend your weekend reading the written arguments, and procrastinate once again on your Christmas shopping, should you wish.



Technically, the case is a little complex, as it involves an appeal of the Brexit case that was heard in London by the Divisional Court of the Queen's bench, which decided against the Government (reported by this Kat here), a referral from Northern Ireland in respect of the case heard in Belfast that decided the points in the Government's favour, various interveners and interested parties either from the original cases, or who were given permission by the Supreme Court to intervene, including both the Scottish and the Welsh Governments.  The hearing will be crammed with QCs from across the country, and the complexity of the background of the cases and the large number of parties result in a 4-day marathon.

This Kat thinks it will be fun, and hopes he is not proved wrong.  He is far too cautious to predict the outcome, which is expected to be known in January.

UPDATE:  The IPKat has been sent a link to a summary of the arguments before the Supreme Court produced by Edwin Coe (acting for one of the respondents).  The link can be found here.

The proposed new VAT rules on e-publications: do they have any implications for copyright and digital exhaustion?

Trying to understand
newly proposed VAT rules
Can VAT rules have any implications for ... copyright?

Yesterday - as part of its Digital Single Market Strategy - the EU Commission unveiled proposals for new tax rules with the objective of supporting e-commerce and online businesses in the EU.

Among the measures proposed, there is one that may be of interest also from a copyright perspective. 


New VAT rules for e-publications


The Commission proposed in fact to apply the same VAT rate to e-publications, eg e-books and online newspapers, as for their printed equivalents, thus removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications.


As explained in the relevant proposal, according to the VAT Directive electronically supplied services including electronically supplied publications have to be taxed at the standard VAT rate (minimum 15%). On the other hand, Member States have the option to tax publications on any means of physical support at a reduced VAT rate (minimum 5%) and some Member States were granted the possibility to continue to apply VAT rates lower than the current minimum of 5% (super-reduced rates) including exemptions with the deductibility of the VAT paid at the preceding stage (so called zero rates) to certain printed publications.


Readers may remember that, not long time ago, in the context of actions [European Commission v France, C-479/13, and European Commission v Luxembourg, C-502/13] that the EU Commission had brought against France and Luxembourg over their VAT regime, the Court of Justice of the Union (CJEU) ruled [here  and here] that, unlike analogue publications, Member States [like France and Luxembourg] cannot apply a reduced VAT rate to e-books. The court held in fact that, for the purpose of Article 98(2) of the VAT Directive, an e-book is not a good, but rather an "electronically supplied service" within the meaning of the second subparagraph of Article 98(2) of that directive.

The result [see p 2] of all this has been "a markedly less favourable VAT treatment of e-publications in most Member States": a situation that the new VAT regime is meant to remedy. 

The proposed amendment of Article 98 of the VAT Directive does in fact exclude e-publications from the treatment reserved to "electronically supplied services", although - it would seem - not from their general classification as "electronically supplied services".

What are the copyright implications of all this? Well, it would appear - potentially - that analogue and electronic copies of protected works should be subject - if not to the same classification - at least to the same treatment. 

But in what sense?

VAT-induced exhaustion
Digital exhaustion under the InfoSoc Directive

The scenario that immediately comes to mind - being also unsolved at the level of CJEU jurisprudence (at least for subject-matter other than computer programs) - is that of digital exhaustion.


Readers will promptly recall that in its shocking 2012 decision in UsedSoft, C-128/11 [Katposts here] the CJEU held that Article 4(2) of the Software Directive envisages digital exhaustion in relation to the first sale of digital copies of computer programs.

Following that decision, it has remained uncertain whether the same conclusions can be also extended to works falling under the InfoSoc Directive.

In its 2015 decision in Allposters, C-419/13 [Katposts here] the CJEU appeared to suggest that exhaustion under Article 4(2) of the InfoSoc Directive only applies to the tangible support (corpus mechanicum) of a work, and would not extend to the work incorporated therein (corpus mysticum). Being devoid of any tangible support, this might mean that the right of distribution in a digital copy would never be exhausted. At the time of the Allposters decision I wrote an article [here for a pre-edited version] in which I also referred to the CJEU decision in European Commission v France to come indeed to the conclusion that, albeit rooted within a very specific (analogue) background, in that judgment the CJEU appeared to rule out any possibility of having digital exhaustion under the InfoSoc Directive.

The AG Opinion in VOB

After all I might have been wrong, in the sense that this conclusion might have been premature. 

Although in the recent VOB case [C-174/15 - a reference for a preliminary ruling asking if EU law allows libraries to e-lend works in their collections] both Advocate General (AG) Szpunar in his Opinion [here] and the CJEU in its judgment [here] ruled out that addressing the issue of digital exhaustion under the InfoSoc Directive would be relevant to addressing the questions referred by the Dutch court, that case has something to tell about digital exhaustion under the InfoSoc Directive.

Of particular interest is the AG Opinion.

First, the AG dismissed the idea that Allposters could call "into question [or limit] in any way the conclusions which follow from the Usedsoft judgment." [para 54].

No differences in digital
and analogue publications either
Secondly, the AG rejected the relevance of argument advanced by the French Government [and, yes, also myself in the article mentioned above] that "the differential treatment, for value added tax purposes, of books in a physical medium and books distributed by electronic data transmission ... demonstrates that those two book formats are not equivalent." [para 59] 

The AG noted not only that such approach would be possibly against the principle of tax neutrality, but also recalled that "the Commission has recently published an action plan on VAT [of which yesterday's package is a follow-up] in which it specifically contemplates the alignment of the VAT rate applicable to digital books and newspapers with that applicable to printed books. That approach confirms the stance taken by the Commission, also in the present case, that electronic books and printed books are in substance equivalent." [para 62, emphasis added]

Conclusion

An initiative on VAT rules for e-publications does not, of course, have direct copyright relevance. Nonetheless, the package adopted yesterday is another step into the direction of suggesting the analogue and electronic copies of works could (or, rather, should?) be subject to the same treatment. Such principle of 'equal' treatment might not be limited to the field of VAT rules.

In any case and having said so, one should also recall that the package proposed by the Commission does not remove e-publications from their qualification as electronically supplied services, but rather sets an exception from their treatment as such.

In all this, the uncertainties surrounding digital exhaustion under the InfoSoc Directive remain, although it is not excluded that - when the opportunity arises - the new VAT rules might be invoked by those who advocate the existence of this principle beyond the realm of the Software Directive, ie in the InfoSoc Directive.

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