The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Parvis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Wednesday, 24 May 2017

Is there copyright in the taste of a cheese? Sensory copyright finally makes its way to CJEU

Readers with an interest for copyright in unusual or, rather, less conventional 'objects' [I will explain below why the word 'works' might not be appropriate] will know that for quite some time it has been disputed whether IP protection - particularly in the form of copyright - is available to, say, perfumes or culinary creations.

So far proponents of sensory copyright have not been really met with widespread approval [for the sake of a debate organised in London a while ago by IPKat founder Jeremy Phillips and BLACA, I supported the motion that there is indeed such thing as sensory copyright - my slides are available here; Jeremy's report can be read here].

Not long time ago, contrary to some lower instances' decisions, the French Supreme Court dismissed for instance the idea that copyright could subsist in a perfume [herehere for a Dutch take on the matter], and in 2015 a Dutch court (Gelderland District Court) refused to acknowledge that copyright would subsist in the taste of a cheese, Heks'nkaas [see here and here].

Speaking of cheese, the Dutch saga of Heks'nkaas is - thankfully - not over.

The case is in fact making its way to the Court of Justice of the European Union (CJEU) for guidance on whether EU law allows copyright protection in taste (in this case, the taste of a cheese). 

Despite its subject-matter this new reference is anything but cheesy. 

The content of the CJEU reference

As explained by Amsterdam-based Syb Terpstra (De Brauw Blackstone Westbroek N.V), counsel to one of the parties in the Heks'nkaas case, yesterday the Arnhem-Leeuwarden Court of Appeal issued an interim decision, in which it held that guidance from the CJEU is needed to determine:

  1. Whether EU law [read: the InfoSoc Directiveallows copyright protection in taste;
  2. If so, what requirements must be met in order to determine subsistence of copyright protection? 

The actual questions are available (in Dutch) here [thanks to @TreatyNotifier for providing the link].

Why this reference is important

This new case promises to be a very interesting and important one, if the CJEU deems it admissible. 

The reason is essentially that the CJEU will need to clarify at last what is meant by 'work', thus revisiting and elaborating further on its earlier case law, notably Infopaq and its progeny [particularly BSA and FAPL].

In that string of cases the CJEU held that under EU law copyright protection should arise any time a work is 'its author’s own intellectual creation', ie a work is sufficiently original. In FAPL, for instance, the CJEU had to determine whether football matches as such can be eligible for copyright protection. The court denied that that would be the case of football matches because they "cannot be classified as works. To be so classified, the subject-matter concerned would have to be original in the sense that it is its author’s own intellectual creation." [paras 96 and 97]

There is no legislative definition of 'work'. I argued elsewhere that CJEU case law appears to suggest that the notions of 'originality' and 'work' conflate, in the sense that the assessment of originality entails that of whether a certain 'object' is to be regarded as a 'work'. Possibly the reason for this is that in the Infopaq line of cases (and even in BSA), the focus of the questions referred to the CJEU was more on what originality means, rather than what a work is. In this sense, the Heks'nkaas case will be to some extent different [at least as long as the CJEU does stick to the text of the questions as referred, instead of re-writing them]. The focus will be primarily on defining the notion of 'work' and then perhaps re-visit the topic of originality.

Guidance as to what a 'work' is - at least in the context of the InfoSoc Directive - must be found outside the body of EU law, possibly in Article 2 of the Berne Convention. The InfoSoc Directive, in fact, implemented into the EU legal order the WIPO Internet Treaties; the WIPO Copyright Treaty mandates compliance with Articles 1 to 21 of the Berne Convention.

The Berne Convention adopts an open-ended definition of 'literary and artistic works'. Article 2(1) does not define the term ‘works’, although it clarifies that such expression “shall include every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression”. 

According to the relevant WIPO Guide, from the general tone of the Convention it follows that “these must be intellectual creations (the words appear in paragraph (5) of Article 2).” The same Guide adds that “[f]or this reason many national laws … provide that, to enjoy protection, the works must be original in the sense that they possess creativity.” 

In general terms, it may be said that “[t]he term ‘production’ … only indicates that the protected object must have emerged from the mind of a person, left the sphere of the mind and become realized. This coincides with the term ‘expression’ also contained in the definition.” [§5.66]

Does the taste of a cheese fall within such definition of 'work'? 

'Say cheese'
Why this reference could have been is important for the UK

An additional profile of relevance of this new CJEU case is that there is the potential for the CJEU to hold - particularly, but not necessarily only, if it acknowledges the possibility of sensory copyright - that EU law envisages an open-ended subject-matter categorisation.

While this is already the case of continental copyright traditions (relevant statutes do not limit the types of works in which copyright can subsist), the same is not true for the UK.

The Copyright, Designs and Patents Act 1988, in fact, envisages a closed list of eligible copyright subject-matter [see also my guidance for students here]. As UK-based readers know, this has proved challenging for less conventional works, in the sense that not always a suitable category can be identified. This has resulted in denying copyright protection in, say, the assembly of a scene (Creation Records) or the Stormtrooper helmet (Lucasfilm).

In a piece published on GRURInt I argued that EU law - or, rather, CJEU case law - mandates the opening up of UK subject-matter list. Although 1709 Blog readers did not agree with this proposition, in his judgment in SAS v WPL, Arnold J [at para 27] held that: "In the light of a number of recent judgments of the CJEU, it may be arguable that it is not a fatal objection to a claim that copyright subsists in a particular work that the work is not one of the kinds of work listed in section 1(1)(a) of the Copyright, Designs and Patents 1988 and defined elsewhere in that Act." At the same paragraph, however, referring to Infopaq the learned judge added that: "it remains clear that the putative copyright work must be a literary or artistic work within the meaning of Article 2(1) of the Berne Convention ... While the definition of "literary and artistic works" in Article 2(1) is expansive and open-ended, it is not unlimited."

With hard Brexit [ie a situation in which the UK will be no longer bound by EU law and CJEU judgments] on the horizon, some might think that the Heks'nkaas case will have a more limited relevance for the UK. However:

  • According to latest CJEU statistics [the average duration of CJEU proceedings in the context of references for a preliminary ruling is 14.7 months: see p. 28], when the Heks'nkaas case is decided the UK will be still part of the EU;
  • As clarified by UK Government in its White Paper accompanying the Great Repeal Bill, this bill "will provide that historic CJEU case law be given the same binding, or precedent, status in [UK] courts as decisions of [UK] Supreme Court" [p. 14].

In conclusion

The Heks'nkaas case is one to watch. Not only will it determine to what extent copyright protection can be stretched [let's not forget that since Sieckmann, trade mark protection has not been really available to sensory 'signs', and things will not really change in my view with the disappearance of the graphic representation requirement], but also what system of copyright categories EU law or, rather, the CJEU envisages.

Never Too Late: If you missed the IPKat last week!

If the first hot and sunny days of the year have distracted you from the IP news, no problem! The 148th edition of Never Too Late is here to (re)freshen you up.

Typical late spring Kat waiting to catch...some sun
Book Review: Russell-Clarke and Howe on Industrial Designs The 9th edition of the go-to practitioner's text for design law in the UK is out. Extensively updated, it is the definitive guide to the protection of industrial designs in the UK.

Scope of review by the General Court of decisions by the EUIPO Board of Appeal: the last act in LAGUIOLE Former Guest Kat Valentina Torelli talks about the guidelines set in the LAGUIOLE case, where the Court confirmed that the GC must apply rules of national law where Article 8(4) EUTMR is invoked in proceedings before the EUIPO.

Dining out on trade marks - ZUMA - the own name defence for pets and groundless threats The case Azumi Ltd v Zuma's Choice Pet Products Ltd [2017] EWHC 609, saw the trade mark dispute between a premium dog food company and a high-end Japanese restaurant in London. A fight to the bone!

The popular China copyright monitoring website 101 On April 19, the Copyright Society of China announced the official online Copyright Monitoring Center. Kat Tian Lu discussed the highlights of the service and the emergence in China for the need of “pay for copyright”.

Where are the women? Supreme Court hosts London launch of ChIPs with call to action to advance women in tech, law and policy The AmeriKat discusses the ChIPs meeting in London, a full-house event held by the non-partisan, non-profit organisation, where the ups and downs of women in tech, law and policy were analysed.

Br*x*t and brands – out of the EU in 680 days What will happen to IP rights in a post-Brexit world? Former Guest Kat Darren Meale discerns the question in all of the IP facets, also reassuring the IP world that together any change can be solved.

In memoriam: Adolph Kiefer, Olympic gold medalist, innovator and inventor extraordinaire Adolph Kiefer, a world record holder and Olympic champion literally swam in talent, as he was not only an aquatics sport prodigy, but also an innovator, as in the 60's and 70's he filed several utility and design patents. The IPKat celebrates his polyhedral talents.

Digital copies, exhaustion, and blockchains: lack of legal clarity to be offset by technological advancement and evolving consumption patterns? Kat Eleonora Rosati talks about this particularly complex issue, by discussing the relevant case -law and by giving the latest updates, notably about the first 'disintegrating e-book'. Stay tuned.

German TV show allowed to call right wing politician 'Nazi sl*t', Hamburg court rules This interesting case deals with the concept of satire, where the court seised deemed that the use of the terms was an hyperbole and not an implication of support of the ideology. Katfriend Mirko Brüß reports.

Latest leak reveals that review of EU IP enforcement framework is currently in a deadlock The enforcement framework of the Digital Single Market Strategy seems to not have progressed in the past two years, according to a leaked Commission internal note. Will the enforcement framework be changed? To be continued...

Never Too Late 147 [week ending on Sunday 7 May] Deterrence sentencing for copyright infringement: Court of Appeal gives guidance I AIPPI Event Report: Will the Unwired Planet v Huawei FRAND judgment lead to fewer NPEs? I Unjustified Threats Bill receives royal assent I"Socialistic brand": a unique category of vintage brand I Movement afoot in the patent scene in Argentina I‘Right to be forgotten’ may potentially apply to all top-level domains, says Swedish Data Protection Authority I A General Civil Restraint Order against issuing further IP claims - Is this the end of the Perry v Brundle saga? I Monday Miscellany, Wednesday Whimsies

Never Too Late 146 [week ending on Sunday 30 April] Italian court finds Google and YouTube liable for failing to remove unlicensed content (but confirms eligibility for safe harbour protection) I Happy World IP Day! I Protecting the SOVEREIGN - The Royal Mint v The Commonwealth Mint I BGH on the freedom of the seas, ahm, panorama I ESPN: When Teflon is not enough in the face of platform disruption I BREAKING: CJEU in Filmspeler rules that the sale of a multimedia player is a ‘communication to the public’ I Filmspeler, the right of communication to the public, and unlawful streams: a landmark decision I Varsity Brands and Star Atheltica - A Closer Look I Court of Appeal dismisses Huawei's first appeal in Unwired Planet patent fight I Once upon a time: Inventive step argumentation as storytelling I Tuesday Miscellany, Around the IP Blogs, Never Too Late

Never Too Late 145 [week ending on Sunday 23 April] Should investment in innovation worry about geographic dispersion? Steve Case says "yes", but what about Pareto?|Trade mark trolls in Cuba: an update|Double-check your docketing!|Fordham 25|Unwired Planet v Huawei: Is FRAND now a competition law free zone? Not so fast…|European patent troll boom spurs Google, Adidas, Intel & Daimler backed IP2Innovate to demand Commission "get tough with US patent trolls"|AIPPI Report: Recapping 2016's most important soft IP cases

Never Too Late 144 [week ending on Sunday 16 April] Around the IP blogs |Time to celebrate, debate and have fun! Register for Fordham IP conference's 25th anniversary|Commission Roadmap: No Directive on SEPs (for now)|Author of Wall Street Charging Bull is raging over Fearless Girl, but does he have a valid moral right claim?|Launch Event: Advancing women in tech, law and policy, ChIPs comes to London on 27 April 2017|Am I covered by that UK copyright exception? Here's my checklist|Fujifilm v AbbVie: practice, procedure and policy analysis|Overturning a trade mark opposition decision - Part 2 - SOULUXE - likelihood of confusion|Overturning a trade mark opposition decision - Part 1 - IWATCH, descriptive goods and acquired distinctiveness

Tuesday, 23 May 2017

US Supreme Court uses TC Heartland to blunt key troll tool, but will California welcome the next wave of troll litigation?

The AmeriKat's view on her way to San Jose.  Will
California be the new hotbed of troll litigation?  
With the ramifications of yesterday's US Supreme Court decision in TC Heartland reverberating from coast to coast, the AmeriKat has asked her Kat friends at California-headquartered firm, Fenwick & West, to provide some more background for European readers, what this means for patent trolls and foreign defendants.  Patent litigation partner Mike Sacksteder and associate Athul Acharya report:    
"For the past 27 years, plaintiffs have been able to bring patent infringement suits against most corporations almost anywhere in the United States. So-called non-practicing entities (“NPEs”), also known as “patent trolls,” have taken advantage of that fact to make the United States District Court for the Eastern District of Texas the country’s most popular forum for patent lawsuits by a huge margin. But yesterday, in TC Heartland LLC v. Kraft Food Group Brands LLC, the United States Supreme Court changed the dynamic, simply by reinterpreting a single word in the patent venue statute. As a result of the Court’s decision, a domestic corporation not organized under Texas law and without a “regular and established place of business” in the Eastern District is no longer amenable to suit there.
Legal Framework:  Where does a corporation reside? 
The legal question in the case is relatively simple: Where does a corporation “reside”? The United States’ general venue statute provides that a defendant may be sued where it resides, and that “for all venue purposes”—“except as otherwise provided by law”—a defendant corporation “shall be deemed to reside” in any judicial district where it is “subject to the court’s personal jurisdiction.” To simplify somewhat, in practice this has meant that corporations that direct their activities throughout the States can more or less be sued throughout the States. A more specific venue statute for patent cases provides that a corporate defendant may be sued for patent infringement either in a district where it has a “regular and established place of business” and has committed alleged acts of infringement, or in the state where it “resides.” The issue before the Court, therefore, was whether the general statute supplies the definition of “resides” in the patent-specific statute, or whether the specific statute is, in the words of the general statute, an exception “otherwise provided by law.”
The evolution of the field
The Supreme Court had previously addressed this question in its 1957 decision Fourco Glass Co. v. Transmirra Products Corp., in which it canvassed the history of the statute and determined that Congress had enacted the patent venue statute specifically to limit the fora in which a corporate defendant could be sued for patent infringement. The Fourco Court accordingly held that a corporation’s residence for patent purposes was only its domicile—the state in which it was incorporated—and that the patent venue statute stood “complete, independent and alone controlling in its sphere.”
In 1988, however, Congress amended the general venue statute. Shortly thereafter, in its 1990 decision VE Holding Corp. v. Johnson Gas Appliance Co., the United States Court of Appeals for the Federal Circuit—an intermediate court that hears all patent appeals from American trial courts—held that the amendments to the general venue statute had brought the patent-specific statute within the general statute’s ambit. Absent review by the Supreme Court, that decision was binding throughout the States.
As discussed above, in the 27 years since VE Holding, patent plaintiffs—in particular, NPEs—have flocked to a single district court tucked away in Marshall, Texas, and the small cities nearby. More than 40 percent of U.S. patent cases are filed in the Eastern District of Texas, and a quarter of all patent cases nationwide are overseen by a single judge there. More than 90 percent of those cases are brought by non-practicing entities. Indeed, some see the explosion in such suits in the last decade as a driving force behind the Supreme Court’s recently renewed interest in the field of patent law.
Justices disfavor implied amendment 
The Court’s unanimous decision in TC Heartland rejected the Federal Circuit’s decision in VE Holding and restored the Fourco regime. Invoking the canon against implied repeals—here applied to implied amendment—the Court reasoned that absent a “relatively clear indication of its intent,” Congress does not alter the meaning of one statute by amending another. Here, Congress may have amended the general venue statute in 1988 and 2011, but it had left the patent venue statute untouched since the Fourco decision. The Court accordingly held that the amendment of the former did not affect the meaning of the latter. That statute therefore continues to mean what it meant in Fourco: A suit against a domestic corporation for patent infringement must be brought either where the corporation has an established place of business and commits an act of alleged infringement, or in the state in which it is incorporated. 
Takeaway:  Patent trolls no longer pick the playing field - most of the time
TC Heartland is a game-changing decision for a large majority of NPE lawsuits, but it will not end such suits, nor will it keep all of them out of the Eastern District of Texas. Although the majority of such cases will need to be filed elsewhere, venue will remain proper against any domestic defendant that maintains a “regular and established place of business” in the District and is alleged to infringe there—by making, using, selling, or offering to sell the allegedly infringing product or service. The remaining troll suits are likely to concentrate to a certain extent in Delaware, where many companies are incorporated, and in technology centers such as the Northern District of California, where many NPE targets are headquartered.
But what all this means for foreign corporate defendants is uncertain—the Supreme Court studiously avoided opining on the subject in its opinion in TC Heartland. In its last word about foreign defendants in patent lawsuits, however, the Court held that “suits against aliens are wholly outside the operation of all federal venue laws, general and special.” The statutory framework has changed since that decision, but the general principle has not: “a defendant not resident in the United States may be sued in any judicial district.” The Court’s decision this week means that the question will be subject to litigation anew—but in all likelihood, venue for patent suits against foreign corporations will continue to lie anywhere in the United States."

Shinder, Shinder, Shinder … will you ever be like Tinder?

Shinder's founder
and only available match,
Shed Simove
Move on Tinder: there is a new dating app on the market, conveniently named Shinder
Katfriend Nedim Malovic (Sandart & Partners) looks into the IP implications of this genius entrepreneurial/'romantic' idea by Shed Simove [if you are wondering who that is, here is his website].
Here’s what Nedim writes:
“Shed Simove, a British author, performer, self-proclaimed motivational speaker and entrepreneur has successfully created his own web-based dating app where you get one chance to swipe right on just one man: Shed Simove himself. 
The app specifically targets women, although men can also sign in. However, men who try to match with Mr Simove are greeted with a brief message informing them that Mr Simove prefers dating women.
The idea of a Shinder app came after using other apps. Mr Simove tried to come across as quirky as possible on other dating apps to attract better matches (this smells of too many left swipes), but had little luck.
Mr Simove employed several techniques, including: photoshopping a Tinder photo of himself bursting out of a Kinder Surprise egg (“Tinder Surprise”) [should be swiped right just for this]; and making a “Bumble pick of the month” logo (“No one cared”). 
UK IPO trade mark application for 'Shinder'
All this until he decided that he needed to adopt a different strategy: Shinder was thus born.

Shinder works in a way similar to Tinder (apparently it also employs an algorithm similar to the one of Tinder): you set up a profile and get to swipe. If users swipe left, the app tells you “You dodged a bullet there, Shed is extremely high maintenance.” If you swipe right, the app promises to notify you if it’s a match. If Mr Simove likes you back, the app opens up a dialogue between the two parties.
A blatant trade mark infringement… or not?
The first IP implication of all this is the use of Shinder as the name of the app: can something like this be tolerated in a Tinder-dominated trade mark world?
A simple trade mark search reveals that Tinder has filed and obtained an international trade mark registration for territories including the EU and the US. There is therefore a 'Tinder' trade mark registered for services in classes 9, 42 and 45 of the Nice Classification.  
As the UK IPO trade mark database promptly reveals, a while ago Mr Simove filed a domestic trade mark application – for 'Shinder' for services in classes 9, 42 and 45 of the Nice Classification.
This brings into consideration whether Tinder (arguably also a trade mark with a reputation) may successfully oppose the application on the basis of a conflict with its own registered trade mark (Tinder has indeed opposed the application).
The Tinder and Shinder signs are phonetically and graphically similar, although the sign above the letter “i” is a small flame for Tinder and a devil’s silhouette for Shinder.
Another noteworthy feature is the colour of the logos, both in not so dissimilar shades of red. In addition to the similarity of the signs, both signs are also used for identical services.
There seems to be indeed a serious likelihood that Tinder’s opposition (already filed) will succeed.

Infringement proceedings?
In addition to the opposition aspect, should Mr Simove use his ‘Shinder’ sign in the course of trade, could Tinder also succeed in an action for trade mark infringement?
Also here the answer appears to have an answer in the affirmative. 
A question that might be raised is whether Mr Simove could successfully argue that Shinder is a parody of Tinder.
At the moment there is no statutory defence for parody at the EU level, despite the timid opening made by the new Trade Mark Directive and the Trade Mark Regulation as revised in 2015.
The reason for a non-existent parody defence under trade mark law may be that a sign that distorts one that has been registered as a trade mark may take unfair advantage of its distinctive character and repute. This is at least what the German Bundesgerichthof thought in its decision of 2 April 2015 - I ZR 59/13 - Springender Pudel (see here for a summary of the decision). The eminent risk of allowing a parody defence seems to be that the defendant might profit from the similarity of his and the trade mark owner’s signs to attract a level of attention for his products that it would have otherwise not been able to have."  

Monday, 22 May 2017

BREAKING: Supreme Court limits US patentee's forum shopping capabilities

What do you mean I need to curtail my
forum shopping habit?
Hot off the presses in DC this morning is the much-awaited decision in TC Heartland LLC v Kraft Foods Group Brands LLC (2017).  In a unanimous (8-0) decision, the justices found in favor of TC Heartland in holding that 28 U.S.C. §1400(b)  - the patent venue statute - is to be interpreted narrowly.  The provision states that:
“[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” (empahsis added)
The Court held that "resides" means the State of incorporation (see Fourco Glass Co v Transmirra Products Corp 352 US 222 (1957)).  It does not extend to mere business activity.  

A broader definition of "residence" set out in the the general venue statute - 28 U.S.C. §1391(c) - had been amended twice to provide that "“[e]xcept as otherwise provided by law” and “[f]or all venue purposes,” a corporation 
“shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court’s personal jurisdiction with respect to the civil action in question.” (emphasis added)
The question for the Court was whether this definition overrode §1400(b).  The answer was "no". Delivering the opinion of the Court, Justice Thomas wrote:
"In Fourco, this Court definitively and unambiguously held that the word “reside[nce]” in §1400(b) has a particular meaning as applied to domestic corporations: It refers only to the State of incorporation. Congress has not amended §1400(b) since Fourco, and neither party asks us to reconsider our holding in that case. Accordingly, the only question we must answer is whether Congress changed the meaning of §1400(b) when it amended §1391. When Congress intends to effect a change of that kind, it ordinarily provides a relatively clear indication of its intent in the text of the amended provision. See United States v. Madigan, 300 U. S. 500, 506 (1937)
. . .
The current version of §1391 does not contain any indication that Congress intended to alter the meaning of §1400(b) as interpreted in Fourco. Although the current version of §1391(c) provides a default rule that applies “[f]or all venue purposes,” the version at issue in Fourco similarly provided a default rule that applied “for venue purposes.” 353 U. S., at 223 (internal quotation marks omitted). In this context, we do not see any material difference between the two phrasings
. . .
Fourco’s holding rests on even firmer footing now that §1391’s saving clause expressly contemplates that certain venue statutes may retain definitions of “resides” that conflict with its default definition. In short, the saving clause makes explicit the qualification that this Court previously found implicit in the statute. "  (emphasis added)
Heartland had challenged the decision by Kraft Foods to commence infringements proceedings in Delaware (where Kraft is incorporated) on the basis that Heartland shipped the allegedly infringing products into the state.  Heartland, otherwise, had no meaningful local presence in Delaware.  Heartland applied to dismiss the case or transfer venue to Indiana, where it is headquartered.  The case has now been remanded.

So will this be the blow to the much loved (by patentees, anyway) Eastern District of Texas that so many defendants have been dreaming of?  Is this a further blow to patent trolls in the US?  Will patentees look to other global venues where forum shopping presents more opportunities, for example in Europe and under Article 33 of the UPCA?  Or is this just balance returning to forum shopping in the US and it will be business as normal? What do readers think?  

Judge sounds alarm of weakened US patent system, while industry groups start amending Section 101

Is the  US patent alarm really going off or is it just
time to hit snooze ?  

The AmeriKat has been spending some time back working in her motherland recently.  No matter where she turns she hears some rhetoric about the "failing US patent system".  What is going on? While she is delving into the doomsday PR and the opposition who claim this is all tactical scaremongering, she brings news of a recent interview, for the new online IP video series Clause 8, with retired former Chief Judge of the Federal Circuit, Paul Michel.  In the interview he sounds an alarm about the condition of America’s patent system:

“I think it’s doing badly, I think it’s highly distressed, has been substantially weakened and needs serious repair, revival, and strengthening.”
His heightened sense of alarm stems from a concern that America’s patent system has been going in the wrong direction while other patent systems have been improving.  He believes that America’s system needs to be immediately improved for America to remain globally competitive.  In particular, he points out:

“While we’ve been weakening our patent system in many ways in recent years, China and other countries have been greatly upgrading their patent systems.  And patent enforcement in countries like Germany is much faster, much stronger, much cheaper, much less disruptive, and much more certain.  So, investment is shrinking here and it’s growing elsewhere because the investors follow the incentives.  If it’s too hard to get patents or defend patents or enforce patents, people who control money will invest in something other than research and development and the follow-on commercialization.  So I think the stakes are really high. We need a really a big course correction.  We need it very badly.And, we need it right now!

Judge Michel provides a stern warning
During the video interview, Judge Michel focuses on the immense uncertainty created by the U.S. Supreme Court’s patent eligibility decisions.  Because of “bad law,” he argues, “whether you get your patent or whether it’s declared ineligible” now often depends on “the luck of the draw” in America. His views echo those of previous USPTO Director David Kappos, who has repeatedly argued - and extensively documented - that it is now much easier “to get patents on software and biotechnology inventions in China and Europe than it is in the U.S.”

Watch the entire Clause 8 interview to hear Judge Michel discuss his role in the Watergate investigation, why a strong patent system is necessary for economic growth, immediate fixes that should be made by the USPTO, congressional action necessary to fix patent eligibility law in America and more.  

Patent eligibility has been a hot topic following recent US Supreme Court decisions - Mayo v Prometheus,Bilski v. KapposMyriad Genetics and Alice Corp v. CLS - so much so that AIPLA and IPO have issued legislative proposals on patent eligibility focused on pushing Section 101 into some technically neutral language.  AIPLA's legislative proposal, similar to the earlier IPO proposal, states that:
"The Supreme Court’s subjective interpretation of patent eligibility law is undermining the fundamental principles underlying the 1952 Patent Act on which our modern innovation economy rests. Section 101 of Title 35 was intended as an enabling provision, identifying particular categories of subject matter that qualified for patent protection; it was not intended to provide the standard for deciding whether a particular technical advance should receive patent protection. Sections 102, 103, and 112 set out the “conditions of patentability,” and were intended to provide a yardstick for judging novelty, non-obviousness, and the sufficiency of disclosure in the specification and claims. The Supreme Court has applied its own subjective rules of patent ineligibility that have increasingly blurred these statutory functions, causing significant uncertainty in the law and driving innovation investments abroad."
The IPO proposal (which Judge Michel expressed support for) document continues:
"After the Alice decision, the Federal Circuit quoted from Bilski that “In choosing such expansive terms . . . modified by the comprehensive ‘any,’ Congress plainly contemplated that the patent laws would be given wide scope.” Further, the Federal Circuit has recently recognized that “[a] too restrictive test for patent eligibility under 35 U.S.C. § 101 with respect to laws of nature (reflected in some of the language in Mayo) might discourage development and disclosure of new diagnostic and therapeutic methods in the life sciences, which are often driven by discovery of new natural laws and phenomena.” “[I]t is unsound to have a rule that takes [certain] inventions…out of the realm of patent-eligibility on grounds that they only claim a natural phenomenon plus conventional steps, or that they claim abstract concepts.”"
AIPLA's proposed amendment to Section 101 is as follows:
"a) Eligible Subject Matter.—Whoever invents or discovers any new and
 useful process, machine, manufacture, composition of matter, or any useful improvement thereof, may obtain  shall be entitled to a patent therefor, subject only to the conditions and requirements of set forth in this title.
(b) Sole Exceptions to Subject Matter Eligibility.—A claimed invention is ineligible under subsection (a) only if the claimed invention as a whole exists in nature independent of and prior to any human activity, or can be performed solely in the human mind.  
(c) Sole Eligibility Standard.—The eligibility of a claimed invention under subsections (a) and (b) shall be determined without regard to the requirements or conditions of sections 102, 103, and 112 of this title, the manner in which the claimed invention was made or discovered, or whether the claimed invention includes an inventive concept."
Or is Dave Kappos' suggestion of just scrapping the section to be preferred? Too many words, after all, are only there to be misinterpreted by the Courts.  But while Congress is tied up with the Russia investigation,  the IPKat cannot foresee a huge amount of legislative attention on this issue (no matter how important) in the immediate future.  Or at least until after former FBI Director Comey testifies....

Nestlé loses yet another KitKat battle

The KitKat Kat
It will not have escaped readers that last week the Court of Appeal handed down its decision in Nestlé v Cadbury [2017] EWCA Civ 358, ie the KitKat trade mark dispute. 

Why?  Because every where you looked the mainstream media was pushing out the puns and mangling the IP rights.  

Roland Mallinson (Taylor Wessing) provides his comments on the recent decision:

Here's what Roland writes:
"The decision of the Court of Appeal not to accept Nestle's evidence of acquired distinctiveness in the UK conflicts with the acceptance of such evidence in the parallel EU action by the EU General Court only five months ago. As the Court of Appeal observed, it is bound by the rulings of the General Court on the interpretation of EU law but it is not bound to follow the latter's rulings of fact. It has deliberately chosen not to do so here. Not only that but, in the leading judgment, Kitchin LJ made observations to suggest that he considered the General Court had applied the wrong test as set out by the CJEU. In fact, the evidence in the two cases was not quite identical. Curiously, it was the seemingly more flawed initial survey evidence that was held to be sufficient by the General Court and yet the later "improved" version of the consumer survey was rejected by the Court of Appeal.

There seems to be somewhat of a trend for senior national courts and the EU courts to disagree about the perceptions of relevant consumers. The reverse occurred last summer when the EU's General Court held that the word NEUSCHWANSTEIN (the name of Ludwig II's fantasy castle in Bavaria) was inherently distinctive for merchandising goods throughout the EU (and so also in Germany), despite the fact that four years earlier the Bundesgerichtshof had held that, for German people, it emphatically was not. Indeed the EUIPO Cancellation Division and the Board of Appeal had likewise ruled contrary to this earlier ruling of Germany's most senior court on the matter.

Considerable semantics have been at play in this case. Nuanced interpretations of the words "perception" and "reliance" feature heavily in the judgments. The Court of Appeal has sided with Mr Justice Arnold in effectively applying a line of English cases that require evidence of acquired distinctiveness to show that consumers rely on the mark as an indicator of origin. This is despite the fact that, when answering Arnold J's questions referred to it in the same case, the CJEU had clearly declined to take the opportunity of endorsing the reliance test that Arnold J was propounding. To be fair, all three appeal judges took pains to deny that they were applying a test of reliance. The court's position is that evidence of such reliance clearly suffices and also that Nestle's evidence did not show reliance. Whilst the latter is not supposed to mean Nestlé loses, it is hard not to see this as having been the test in effect. The original registry decision by senior officer Allan James was held to be not open to challenge, although (without the benefit of Arnold J's reference and the CJEU ruling) it had the concept of reliance woven through much of it. Rather than repeating that, the Court of Appeal articulated the primary ground for its decision as being that Nestlé did not appear to have used the shape in a "trade mark sense". It weighed heavily on the judges' minds that the evidence showed no recent promotion of the shape in advertising or packaging (it seemingly stopped featuring in the 1960s). This meant the impressive survey results were not the result of any trade mark use and just reflected mere recognition and association arising from widespread non-trade mark use of the shape.

It means that with some concerted use in this manner and fresh evidence, the shape could still be registrable with a new application. However, it is probably easier and cheaper for Nestle just to appeal and that seems the likely course. It is certainly open to question whether the English courts are choosing to re-interpret the CJEU's ruling through Brexit-tinted glasses. This could be the first area of trade mark law where the EU and UK regimes start diverging."

An EU text and data mining exception: will it deliver what the Digital Single Market Strategy promised?

At the time of unveiling its Digital Single Market Strategy in May 2015, the EU Commission linked the establishment of a fully connected digital single market to the objective of creating a favourable environment for European start-ups and SMEs.

With specific regard to copyright, however, it soon appeared that start-ups and SMEs were not really part of the picture as far as Commission’s action in this area of the law is concerned. In this sense, the proposal for a directive on copyright in the Digital Single Market, which was released in September 2016, is a telling example.

The content of the proposed text and data mining exception

The draft provisions intended to remedy the so called ‘value gap’ (Article 13) and establish a new right for press publishers (Article 11) have been extensively criticized for – among other things – having the potential to raise barriers to entry in the markets for, respectively, hosting platforms and news aggregators, and also push out of these markets existing start-ups and SMEs that may be ‘too small to compete’.

Also the Commission’s proposal for a new mandatory exception that would be vital to EU tech-intensive businesses, ie a text and data mining exception (Article 3), falls short of what an ambitious and competitive digital single market may need.

By text and data mining it is intended as “any automated analytical technique aiming to analyse text and data in digital form in order to generate information such as patterns, trends and correlations” (Article 2(2)). A couple of examples of mining tools developed and employed by European SMEs and start-ups are those of Treemetrics (Ireland; a forest management platform) and XDiscovery (Italy; a search engine that allows mapping correlations between different topics).

Although including commercial and non-commercial uses alike, the scope of the proposed text and data mining exception appears particularly narrow as regards its catalogue of beneficiaries. These would be, in fact, only research organizations. They would be able to rely on the exception solely to carry out text and data mining of works or other subject-matter to which they have lawful access for the purposes of scientific research. In addition, the definition of ‘research organization’ itself is narrow: it only includes (Article 2(1)) universities, research institutes, non-profit or public interest research-intensive organizations.

In principle the draft directive does not exclude applicability of the text and data mining exception to public-private partnerships (Recital 10), but rules out that this could be possible when a commercial undertaking has a decisive influence and control over the research organization in question (Recital 11).

Waiting to mine some data ...
But would they be able to do so?
The UK experience

The proposed EU exception would be also narrower than the existing UK exception for text and data analysis (s29A of the Copyright, Designs and Patents Act 1988). The UK introduced it in 2014 on belief that the existing legislative framework (Article 5(3)(a) of Directive 2001/29) would already allow Member States to permit text and data mining activities under the umbrella of the exception for scientific research. Most importantly – albeit limited to non-commercial uses – the beneficiaries of the UK exception are not just research organizations, but also individual researchers (‘any person’ who has lawful access to a work).

The reactions of the SME and start-up community

Further to the release of the proposed directive on copyright in the Digital Single Market, EU start-ups and SMEs have noted how the current drafting of Article 3 fails to provide legal certainty, and regrettably excludes anyone who cannot be regarded as falling within the definition of ‘research organization’.

In this sense, Allied for Startups has pointed out that innovative start-ups would be left outside the scope of Article 3, being unable to benefit from the text and data mining exception. This would be so also on consideration that the limited resources of a start-up would make it difficult, if not impossible tout court, to consider entering public-private partnerships that are both time-consuming and challenging to handle.

The draft Comodini Cachia report

The next step for the overall process that would eventually lead to the adoption of a new directive on copyright in the Digital Single Market is the European Parliament vote (originally scheduled for 19-20 June, but currently it is unclear when this will take place) on the draft report that MEP Therese Comodini Cachia has been preparing on the Commission’s proposal. On 10 March a first draft version of the report was unveiled; possible amendments are currently being considered.

As far as text and data mining is concerned, the draft report seeks to clarify what copyright-relevant act (normalization of information) the new exception would cover. It also proposes to broaden to a certain extent the scope of the exception, by envisaging – subject to a compensation requirement – the possibility for research organizations that do not have lawful access to information to have nonetheless access to normalized data for text and data mining.

The draft report for the moment also appears to consider broadening the types of beneficiaries of the exception.

More ambition is needed

When considering different options for a text and data mining exception, the Commission held the view that an exception that would not restrict types of uses and beneficiaries would go too far.

Yet, considering the general framework for exceptions and limitations that already exists under EU copyright (Article 5 of Directive 2001/29), there are no particular legal reasons as to why an exception should in principle exclude certain subjects from the range of beneficiaries, as long as the conditions in the three-step test (these being that an exception is to be only applied in certain special cases which do not conflict with a normal exploitation of the work or other subject-matter and do not unreasonably prejudice the legitimate interests of the rightholder: Article 5(5) of Directive 2001/29) are respected.

As noted by the German Bundesrat in a recent opinion, the exclusion of beneficiaries other than research organizations from the scope of the EU text and data mining exception would be not just impractical, but also cause the end for many providers of data analysis in Europe.

The EU approach to text and data mining could and should be more ambitious. This would be necessary to develop the full potential of SMEs and start-ups arising and operating in Europe, thus also making Europe more competitive on the global scale and permitting the creation of a functioning digital single market. More ambition is also needed to encourage and make possible the work of individual researchers, and allow European citizens to have access to information that can be only generated through text and data mining activities and whose potential awaits to be unlocked. 

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