Friday fortissimo

The IPKat thanks Simon Haslam (Abel & Imray) and Jim Davies (Bell Dening) for simultaneously sending him this link to the BBC's news that members of the former pop group Busted are fighting over royalties, two original members of the boy band saying that they are owed an estimated £10m in unpaid royalties. Ki McPhail and Owen Doyle maintain that they were the co-authors, with James Bourne and Matt Willis, of songs in which they were forced to sign away their rights after "threats" and "undue pressure". The songs include Year 3000 and What I Go To School For. The pair assert that, when they were forced out of the group, they were not told that record label Universal liked the songs and had offered Busted a lucrative record deal when they signed the agreement. The action, before Mr Justice Morgan, is scheduled to last for 15 days.


The very same Jim Davies has also tipped the IPKat off about Wikileaks, a whistle-blowing website, which is reportedly receiving support from the American Civil Liberties Union and the Electronic Frontier Foundation on the basis that a court order that knocked Wikileaks offline in the US raised "serious First Amendment [i.e. freedom of speech] concerns". The original order, made in favour of wealth managers Julius Baer by US district judge Jeffrey White, ordered Dynadot - the company that hosts the Wikileaks website in America - to remove all mentions of the site from its address books. The bank took the action in mid-February because, it is understood, the documents hosted could have had an impact on a separate case being heard in Switzerland. Said Julius Baer, this case has nothing to do with free speech: ""This action has been brought solely to prevent the unlawful dissemination of stolen bank records and personal account information of its customers. Many of those documents have also been altered and forged".


Meanwhile, the very same Simon Haslam has also sent news of a battle, reported on the BBC, between Japanese video game giant Capcom and film-maker MKR Group, which contends that Capcom's Dead Rising game infringes the copyright of George A Romero's 1978 film Dawn of the Dead, to which it holds the rights. Both Romero's film and the game involve battles with zombies inside a sprawling shopping mall. The IPKat is amused at this ongoing dispute, given the propensity of European copyright to resurrect itself. Merpel adds, one good way of raising the dead is to get yourself a jolly good alarm clock ...



From the Independent, via Peter Groves (Bircham Dyson Bell) comes news that the Scots are seeking protection for the traditional kilt. According to this item,

"Just as Parmesan if it is made in certain regions of Italy and sparkling wine can only be called champagne if it is made in the area of the same name in France, the traditional kilt is at the centre of a campaign which, if won, would mean that only those made in Scotland could call themselves Scottish kilts.

The campaign is the idea of an Edinburgh-based kilt-maker, Howie Nicholsby, who, exasperated by the influx of cheap, foreign imports calling themselves Scottish kilts, got in touch with the Scottish Member of European Parliament Alyn Smith to see if they could persuade the European Commission to give the Scottish kilt protected designation of origin (PDO) status.

If their attempt is successful it would mean that only kilts that were hand sewn, made in Scotland and made from pure wool could be known as a Scottish kilt. Those that did not meet the three criteria would simply have to be known as kilts".

The IPKat marvels at how pervasive the notion of PGI/PDO status has come: once upon a time it was only seen as a means of protecting the appellations of some wines, drinks and other foodstuffs. Merpel adds, I've never eaten a kilt, but doubt they are very tasty.

US stem cell patent success

Associated Press reports that the USPTO has upheld one of Wisconsin Alumni Research Foundation (WARF’s) human stem cell patents (decisions are pending on two other patents). The patents in question appear to be for the cells temselves, and a method used to isolate them. On Monday, a USPTO hearing examiner rejected an obviousness challenge to the patent for the isolation method. Groups spearheading the opposition have said that they intend to appeal.

The IPKat notes that there is also a pending WARF application before the EPO. There the debate has been all about the morality of patenting human stem cells. The UK has observed that morality shouldn’t bar such applications in the absence of consensus on the moraltiy of research involving human stem cells. The IPKat finds it a little odd that the debate is so differently focused on the two sides of the Atlantic, but reckons that it ultimately comes down to the same thing on both jurisdictions: should we be patenting something so fundamental?

Calls for help!

Here's a procedural point that IPKat team blogger Jeremy has been pondering. Since the Community trade mark and the national trade mark laws of European Union Member States have the same criteria for, eg, registrability, opposition, non-use and genuine use, it is perfectly possible for the same issue -- involving the same mark(s) and quite possibly the same parties -- to be the subject of conflict both in proceedings before OHIM and before the national courts of Member States.

Right: members of the ECJ, coming out of the woodwork ...

Where decisions of OHIM are challenged, appeals lie to the Court of First Instance and thereafter to the Court of Justice of the European Communities; where decisions of national offices are challenged, a court may refer one or more questions to the Court of Justice for a preliminary reference. What Jeremy is wondering about is the interrelationship of parallel proceedings. The ECJ has the facility to join cases, but does this entitle it to join an appeal in CTM proceedings with a reference for a preliminary ruling? Are there repercussions in terms of procedure and costs? What are the implications so far as the independence of Community and national systems are concerned? Has anyone written on this topic? Please let Jeremy know by email. All interesting and/or valuable replies will be published.



Another request from Jeremy: he has recently been introduced to the concept of meta-analysis of intellectual property literature. The idea is that, when a person encounters a field of intellectual property law, commerce, policy or practice for the first time, he may have no idea which things are important to read and which are not. A methodology of meta-analysis enables him to evaluate the available materials and decide not only which are more important or valuable but which he should read first. Thus literature which is current, which is based on identified sources and which is peer-reviewed will receive a higher "score" than literature that is old, based on unsupported generalisations and which has undergone no objective validation before it was published.

Do any readers of this weblog know of any such exercises having been done for intellectual property literature? As before, please let Jeremy know by email if you can help him at all.



Writing in Afro-IP, Darren Olivier discusses the first ever decision of an ARIPO Board of Appeal. For the unititiated, ARIPO is the African Regional Industrial Property Office. It administers the Banjul Protocol on Marks, which was adopted in 1993 and establishes a trade mark filing system under which an applicant may file a single application either at one of the contracting states or directly with the ARIPO Office, designating states in the application where he wishes his mark to be protected. According to the ARIPO website,

"The Protocol came into force on March 6, 1997 for Malawi, Swaziland and Zimbabwe. Lesotho and Tanzania have joined the Protocol in the course of 1999. It is expected that other ARIPO member states will ratify or accede to the Protocol in the near future".

Darren says that it's not clear which countries have amended their national legislation, following conflicting reports that only Botswana, Zimbabwe, Lesotho and Swaziland may have done so. If any reader has current information on this, or has any comments concerning enforcement of ARIPO marks, can they please email Darren here and let him know.

You are what you EIT

Earlier this week the European Commission's Official Journal published Common Position 2/2008 of 21 January 2008 "adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to the adoption of a Regulation of the European Parliament and of the Council establishing the European Institute of Innovation and Technology" (EIT).

Right: the spare European Parliament has been nominated as a good location for the EIT by the oneseat.eu campaign

Under Article 2 of the draft Regulation,

"For the purpose of this Regulation, the following definitions shall apply:

1. ‘innovation’ means the process, including its outcome, by which new ideas respond to societal or economic demand and generate new products, services or business and organisational models that are successfully introduced into an existing market or that are able to create new markets [the IPKat says, I'm not sure what this either means or is intended to mean, but I always thought that it was people, not ideas, that respond to demand];

2. ‘Knowledge and Innovation Community’ (KIC) means an autonomous partnership of higher education institutions, research organisations, companies and other stakeholders in the innovation process in the form of a strategic network based on joint mid- to long-term innovation planning to achieve the EIT challenges, regardless of its precise legal form [the IPKat wonders whether the constant emphasis on terms like "Community" and "partnership" is part of a deliberate downplaying of the role of the private and the individual in the innovation process -- a process which ultimately emanates from the individual]; ..."

Article 3 of the same draft states the objective of the EIT. This is

"to contribute to sustainable European economic growth and competitiveness by reinforcing the innovation capacity of the Member States and the Community. It shall do this by promoting and integrating higher education, research and innovation of the highest standards".

Forgive the cynicism, but the IPKat awaits proof that successful innovation is something that can be organised and taught, rather than stimulated and inspired. He hopes he's wrong. Merpel adds, "I did a quick word search through the draft Regulation and couldn't find the words 'patent' or 'invention' anywhere".

More on the proposal here

New edition of Laws of the Internet

The IPKat is delighted to see that the third edition of Gringras: the Laws of the Internet has just been published under the auspices of a brand-new team. This is the first Gringras to be published by Tottel and, like any legal work nowadays that aspires to be taken seriously, it is multi-authored. Alasdair Balfour tackles the competition law aspects, Stephen Hignett the tax bits and barrister Phillip Johnson the elements relating to trade marks, domain names and passing-off -- all this under the watchful eye of the work's principal author, Olswang's Elle Todd (pictured, right, looking authorial -- or is it authoritative?).

So what do you get for your money? The book starts with an easy-to-read introduction to the internet itself and to much of the terminology that drives it. There then follows a disclaimer that this book really is about English law. It doesn't have the token chapter on highlights of US law that British publishers are so fond of, which means that Tottel must be confident that the book will sell even without it, but the reader will encounter the Digital Millennium Copyright Act, the Communications Decency Act and various other US legal sources where necessary. European Union law is not neglected either -- though there is not a lot of it on this particular topic right now.

The text, written in a clear, direct and unambiguous style, resonates with the monosyllabism of the principal author's names: you won't find long sentences meandering into a conclusionary "perhaps". The idea is that an intelligent reader who is not a legal scholar can navigate it effectively.


Left: "No", says Merpel, "I was looking for something on hot links, not hot lynx ..."


Any reader who gets bored with the subject-matter (and who can sustain an interest in the dry technicalities of data protection?) can switch to the myriad boxed scenarios that populate the text: the occurrences they describe are those with which the reader can far more easily identify.

For a reviewer who tends to see internet law as a sort of adventure playground for computer-savvy IP lawyers, this book has a strongly corrective effect. The work first focuses on the formation and enforcement of contracts made through the medium of the internet, then on its delictual dimension (negligent misstatement, defamation and product liability typical good examples). It is only halfway into the book that it picks up the IP theme, which it deserts 130 pages later for the dubious delights of criminal law, data protection, tax, competition and internet regulation.

Biographical details: hardback, xxxix + 531 pages (no wasteful appendices; index starts at p.503). ISBNs 1845922433 and 9781845922436. Price £128. Publisher's price "only" £128. More details and publisher's order form here. Rupture factor: moderate. Cover colour: purply mauvish.

From the margins to the mainstream?

Creative Britain -- New Talents for the New Economy is the title of the UK Government's latest action plan for the creative industries, unveiled last week through a press release jointly issued by three government departments. The action plan itself is 81 pages long, but it shouldn't take you very long to read: it's prettily garnished with deeply symbolic illustrations, white space, large print and lightweight aspirations that beg to be attached to some real-world detail: so far as the triumph of form over content is concerned, it's a genuine masterpiece -- a cross between a manifesto of popular sentiment and a PowerPoint presentation.

Right: the action plan may be seen as utopian in its idealism ...

The press release heralds "26 key commitments for Government and industry across every stage of the creative process" and the plan seeks to hit, in no particular order, the following targets:

* the establishment of 5,000 apprenticeships to help people from all backgrounds make the most of their creative skills;

* an independent review to investigate the path to "next generation broadband";

* a World Creative Business Conference, this being an annual event bringing together world leaders in the creative and financial sectors;

* the taking of steps to protect intellectual property, including a commitment to take action on illegal file sharing by 2009, if industry fails to reach a voluntary solution.

* the first ever comprehensive plan for Government support for the creative industries is published today, marking their shift from the margins to the mainstream of economic and policy thinking.

The starting point of the comprehensive strategy is "unlocking creative talent, helping it flourish and turning it into jobs" [the IPKat is glad that this aim is quite unrelated to the dumbing down of educational syllabuses and the simplification of school examinations to the extent that it's becoming difficult for prospective employers to trawl the pool of highly-qualified, talented applicants in order to ascertain which ones can read and write]. Further along, the action plan adds:

“The Government is committed to safeguarding the intellectual property rights of those who make a living from their creativity, ensuring the long-term economic viability of our creative enterprises [the IPKat says, this looks like a coded commitment to extend copyright in sound recordings and performances, doesn't it?].

A comprehensive package of measures to support business has also been developed following extensive consultation with the industries. Their priorities included greater protection for intellectual property, and help for creative businesses to access finance and grow".

Left: ... but it will be hell to implement!

Business and Competitiveness Minister Shriti Vadera said:

"The way we will do business, access many government services, as well as information and entertainment will change beyond recognition over our lifetime and these new technologies will push the boundaries of today’s communications infrastructure.

We must be ready to respond to future technological developments which will place unprecedented challenges for our communications networks over the coming decade.
That is why we need to look ahead into the future now. We need to prepare the way for the UK to adopt groundbreaking new technologies to ensure that we do not get left behind – competitively or technologically".

The IPKat seems to recall much the same message from Prime Minister Harold Wilson at the Labour Party's Annual Conference in 1963. Only the audience, the technologies and the speaker have changed ...

Other IP-specific proposals are summarised in the action plan under Commitment 16:

"UK-IPO will put into action a plan on IP enforcement

5.10 The UK-Intellectual Property Office (UK-IPO) will deliver improvements within the current enforcement arrangements. It will:

• Explore options for voluntary enforcement funds.We recognise there is already a great deal of effective partnership working between enforcement agencies and industry. We want to build on this and would welcome proposals from the creative industries for new industry-funded initiatives to help tackle physical and online IP theft. Such funding could be targeted on the establishment of mobile specialised enforcement teams to crack down on illegal activity.

• Pilot a ‘Fake Free London’ campaign on IP enforcement. Building on the work of the UK Film Council and other rights holders, Fake Free London will bring the rights holders, creative industries, the Government and enforcement agencies together to maximise resources to make London free from counterfeit goods in the run up to the 2012 Olympics. UK-IPO will pilot a project across key authorities, including all five Olympic boroughs. Findings from the pilot in late spring 2008 could provide a model for a much wider roll-out across London and in other cities.

• Establish and fund a National Centre of Excellence to deliver expert police resource focused on tackling IP Crime and to help provide a national perspective to the work going on at a local level.

• Work with Trading Standards Officers and local authorities to make best use of the Proceeds of Crime Act – which is generating around £500,000 per month in IP crime-related assets.

• Work with the Association of Chief Police Officers to provide extra focus on enforcement activity and encourage further action.

• Establish a Ministerial and industry forum to bring together rights-holders, consumer groups, the Government and technology companies to discuss new ideas, issues and solutions to the challenges and opportunities afforded by new technology".

Right: the campaign for Fake Free London hots up, as police swoop on juvenile p2p suspects.

At this point, the IPKat throws the discussion open to his readers. He's sure they'll have something to add. Anyway, he's anxious that his habitual scepticism might lead him to miss the undoubted merit that several elements of the plan possess. Merpel says, I love the idea of a Fake Free London -- but will it produce a Congestion Charge Effect, concentrating infringements in the zone immediately outside the fake-free bit?

Stop das press! No more surreptitious state surveillance

The IPKat's amiable and scholarly friend Dr Guido Westkamp (pictured right, together with his highly-trained news hound) has just written to inform him as follows:

"Today the German Constitutional Court decided that the state may not engage in surreptitious surveillance of information technology systems. The case, a constitutional complaint against a law permitting such surveillance by intelligence services, was decided on the basis of a new human right in the confidentiality and integrity of information technology systems. The court emphasises that this right, which applies where other fundamental rights affecting privacy are inapplicable (such as the rights in confidentiality of telecommunication communications or the right to inviolability of ones home), is derived from the fundamental rights in personal dignity and personality rights under the constitution. The right can only be restricted where significant higher ranking fundamental values need be protected, such as the life and integrity of others (that is, as a means to prevent acts of terrorism provided there are sufficient reason to believe that surveillance will the state to prevent such acts, but only if the surveillance measure is permitted by a judge on a case by case basis).

The decision may have a dramatic impact in relation to the constitutionality of protected rights management information systems deemed to protect copyright. Where a supplier of copyright works manipulates data stored on a customers computer, or where personal data are being collected in order to allow the right holder to trace the use of works supplied online, it appears that if the customer can invoke the new right there is little left to argue for right holders that such means are necessary to protect copyright. It seems most unlikely that the protection of copyright can serve as a basis for higher ranking interests that would provide a legitimate purpose for justifying such intrusion. I incidentally wonder what would happen if the German Constitutional Court would find the DRM provisions under copyright unconstitutional and thereby void, given that it is derived both from the WCT and the Information Society Directive".

The link to the decision is here. The IPKat imagines that this decision may have repercussions for more than copyright management systems, since it may come into conflict with scenarios in which, on the face of it, IP Enforcement Directive 2004/48 would contemplate the disclosure of infringement-sensitive materials held by internet service providers and regular database holders. Merpel sniffs, surely it would be a good idea if matters of this sort -- given their fundamental nature -- were resolved by the Commission and by pan-European legislation before they arose, rather than by national courts after they arose ...

More on Parmesan

Yesterday the IPKat picked up on the European Court of Justice ruling in the Parmesan dispute (Case C-132/05 Commission of the European Communities v Federal Republic of Germany). He promised to say more about it, so here goes ...

Right: German manufacturers of Parmesan cheese worry that their business is in meltdown following the ECJ ruling

Prompted by complaints by what the court calls several "economic operators" [says the IPKat, presumably this is a code name for "legitimate manufacturers of and traders in cheeses bearing Parmesanesque designations of origin"], the Commission asked the German authorities to give clear instructions to the government bodies responsible for the combating of fraud to stop the marketing on German soil of products designated as ‘Parmesan’ but which did not comply with the specification for the PDO ‘Parmigiano Reggiano’ (according to the Commission, 'Parmesan' was a translation of the PDO ‘Parmigiano Reggiano’ and its use infringed a PDO which was protected by Council Regulation 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs ).

The German Government said nein: in its view, while the term ‘Parmesan’ had historical roots in the region of Parma, it had become a generic name for hard cheeses of diverse origins, grated or intended to be grated, distinct from the PDO ‘Parmigiano Reggiano’. Accordingly its use infringed no PDO rights. The Commission disagreed and commenced these proceedings.

The European Court of Justice rejected the argument that a PDO enjoys protection only in the exact form in which it is registered. It accepted that PDOs could become generic, citing the examples of Camembert and Brie [says the IPKat, that's a big concession: under Article 13(3) of the Regulation, "Protected names may not become generic."], but concluded that Germany had not proved that Parmesan had itself become generic: unauthorised use of the term was thus an infringement. The court nonetheless dismissed the Commission's action. Thwe key bit of the decision is Article 10(4) of the Regulation. When it provides that,

‘[i]f a designated inspection authority and/or private body in a Member State establishes that an agricultural product or a foodstuff bearing a protected name of origin in that Member State does not meet the criteria of the specification, they shall take the steps necessary to ensure that this Regulation is complied with …’,

this indicates that the designated inspection authority and/or private body in a Member State is that of the Member State from which the PDO comes -- in this case Italy, where Parmesan comes from, or at least ought to come from -- and not Germany itself.

This seems a sensible enough result, the IPKat thinks. If the responsibility for enforcement lay with the German authorities, who chose not to enforce on the basis that, in its opinion, the word 'Parmesan' was either generic or did not infringe the Parmigiano Reggiano PDO, the Italians would have been the first to assert that the right of enforcement lay with themselves and not the German authorities.

Merpel adds: the court observed that

"from the point of view of the Commission, the central question in legal proceedings between private economic operators is that of compliance with the intellectual property rights enjoyed by the producers established in the region of origin of the product concerned, whereas the purpose of action by the public authorities against infringements of Article 13 of Regulation No 2081/92 is not to protect private economic interests but those of consumers, whose expectations as to the quality and geographic origin of that product should not be disappointed. The protection of consumers intended by the regulation would be compromised if the enforcement of the prohibitions laid down by the regulation were completely dependent on the taking of legal action by private economic operators".

She wonders whether the Commission would endorse this argument -- which the court rejected -- in respect of the enforcement of privately owned trade marks. Consumers have expectations that the products they buy are genuine, after all.

More about Parmigiano Reggiano than you may have wanted to know, here
Cooking with Parmesan here and here
Something to avoid: Vegan Parmesan Flavor Grated Soy Topping

PCT filings for 2007: cause for celebration or concern?

WIPO press release PR/2008/536, "Unprecedented Number of International Patent Filings in 2007", reports that there was an unprecedented number of international patent filings in 2007. This is no surprise, says the IPKat: since there are hundreds of thousands of numbers to choose from and the Patent Cooperation Treaty isn't that old, the chances are that almost any number of patent filings in 2007 -- whether large or small -- was going to be unprecedented in the sense that no precedent for it could be found in the statistics for previous years.

Right: "If all else fails", the patent attorney said, "we can always get it through the USPTO ..."

On a more serious note the press release reads:

"In a year that saw a record number of filings under the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty (PCT), the cornerstone of the international patent system, inventors from the Republic of Korea (4th place) and China (7th) consolidated their top ten position in 2007, along with the United States of America (1st) , Japan (2nd), Germany (3rd), France (5th), United Kingdom (6th), Netherlands (8th), Switzerland (9th) and Sweden (10th). In total, a record 156,100 applications were filed in 2007, representing a 4.7% rate of growth over the previous year. For the fourth year running, the most notable growth rates came from countries in north east Asia which accounted for over a quarter (25.8%) of all international applications under the PCT".

The IPKat notes that the press release carries a lot of useful and thought-provoking data. Some of it is encouraging, some quite depressing. Thus it is good to see that the total number of Patent Cooperation Treaty states now stands at a record high of 138, following last year's accession of Angola and the Dominican Republic. It is however sad that, while growth over 2006 is up 4.7%, this is in effect entirely attributable to the increased filing activities of 14 of the world's top 15 patent filing nations (the exception being the Netherlands, which had a quiet year by its own inventive standards). Among the other 120+ countries that make up the "All Others" category, PCT filings fell by 2.6% -- a figure that can be explained away with smooth words and diplomacy but which should continue to trouble the conscience until it is reduced and ultimately eliminated. To give some idea of the gap between the 'invents' and the 'invent-nots', the tenth-best developed country, Sweden, filed an estimated 3,533 PCT applications; the tenth-best develeping country, Colombia, filed just 31.

All for the sake of lost golf balls ...

Another of those little cases that almost escaped the IPKat's keen attentions was last Friday's ruling in Key-TV Ltd and others v Ramsay and another, a decision of Robin Knowles QC sitting as a deputy judge of the Chancery Division for England and Wales. It's not on BAILII: the Kat encountered it on the LexisNexis Butterworths subscription-only service.

Right: looking for the original agreement -- or was it just a rough draft?

When GSI was incorporated in 2002, Ramsay held 70% of its shares and the second defendant 30%. Both were its directors. In January 2003 GSI applied for a patent for the Ballfinder, a method and apparatus to locate lost golf balls. KTV entered into a European distribution agreement with GSI to sell Ballfinders, raising capital from investors including the fourth claimant in this action, which took a 7.5% shareholding in KTV in return for his investment. KTV in turn invested those funds in GSI and took a shareholding of approximately 10%. These arrangements were reflected in a number of documents, including a shareholders agreement that included a warranty by Ramsay that all of the intellectual property rights relating to the Ballfinder

"which exist at the date hereof or are created hereafter and which have not already been transferred to [GSI] will be assigned to [GSI] as soon as possible and ... [the first defendant] holds any interest which he may have in such Intellectual Property Rights on behalf of and for the sole benefit of [GSI]."

In April 2004 another company, GSM, was incorporated in the Isle of Man. Its sole subscriber was GSI, Ramsay being its sole director and it was created in order to undertake the manufacture of Ballfinders for GSI under licence. GSM later applied in the Isle of Man for a new patent for Ballfinders.

The manufacture of Ballfinders did not proceed as planned, following delays and funding problems. Then, in November 2005, the defendants caused GSM to issue and allot 1260 shares to Ramsay and 540 shares to the second defendant, thereby diluting GSI's shareholding to a fraction of 1%. On 16 November 2005 an exchange of emails indicated that agreement for the advance of further finance could be reached with the third and fourth claimants, following which KTV's solicitors sent a draft agreementsto the defendants. Under the terms of the draft, Clause 2.11 warranted that GSI was the sole shareholder of GSM.

Signature was deferred until 23 November 2005, when the version of the agreement brought for signature by Ramsay had been altered. Clause 2.11 was altered so as to reverse its effect, providing a warranty that GSI was not the sole shareholder of GSM. That change was not brought to the attention of KTV, who signed the documents without reading them. Ramsay then told the third claimant that he had caused GSM to apply for a 'stand-alone' patent'. On discovering that GSI's ownership of GSM had been reduced, KTV sued for breach of contract (specifically the shareholders agreement) and breach of fiduciary duty.

Robin Knowles QC allowed KTV's claim. In his view, the actions of the defendants were motivated by their own interests, not those of GSI, and with the purpose of personal gain rather than gain for GSI. They had acted in breach of their fiduciary duties as directors of GSI and also in breach of their contractual promise, under the shareholders agreement, to use all reasonable endeavours to maintain and improve and extend the business interests of GSI.

The IPKat says, many people today believe that patent specifications are a waste of time because no-one reads them. The same appears to hold for the documentation relating to IP transactions, which gets shoved into a drawer and forgotten about on far too many occasions. While the defendants' conduct was unconscionable and the chances were that KTV would win in court, all parties could have been spared a good deal of expense and inconvenience if they had only read the agreement before they signed it. Merpel adds, it's good to be reminded that the Isle of Man -- which is NOT part of the European Union -- has its own legal system and its own IP laws.

Isle of Man IP law here
Ballfinders on sale from Amazon here

Parties polarised in bear dispute

Today's Telegraph reports that the dispute between the Nuremburg Zoo and Bavarian confectionery manufacturer Fair Field over rights to the trade mark FLOCKE ("snowflake") has now reached the courts. Fair Field applied to register the word FLOCKE on 13 January for herbal lozenges, five days before the city of Nuremburg announced that it had chosen the same name for its newborn new polar bear cub. The zoo suspected foul play, since Fair Field applied to register not only the FLOCKE mark, but also FLOCKE THE POLAR BEAR and FLOCKE THE POLAR BEAR CUB (the IPKat is quoting from the Telegraph here, but it seems natural that the company should want an English-language trade mark given that its own name is English too). Anyway, judgment has been adjourned till 7 March and the court has urged the parties to settle if they can. The IPKat suspects that, had this case broken out in England and Wales, the bear would probably be in the hands of the social workers by now; it would be taken into care, given a new identity and released elsewhere to enable it to make a fresh start ...

Financial footnote: it appears that Flocke the polar bear is worth millions of pounds in revenues to the city of Nuremburg, both from admission tickets at the zoo and from licensing and merchandising deals. The cub shot to fame after the zoo initially said it would leave nature to take its course when her mother showed signs of rejecting her, only to perform a U-turn in the face of a public outcry [Merpel says, it's not fair -- there's never any public outcry when someone neglects a trade mark and just lets nature take its course].

The story of Knut the polar bear here
Make your own polar bear here
Recipe for Alaskan polar bear here

See earlier posts on Class 46 by leading authority on German polar bear cub trade marks Birgit Clark here, here, here, here, here, here and here

Cheesy decision from the ECJ

Bloomberg reports that the ECJ has ruled that "Only cheeses bearing the protected designation of origin 'Parmigiano Reggiano' can be sold under the name 'Parmesan'". However, it has also stated that it is for Italy (the home country of the registration) and Germany to take action to ensure that no one else uses the name.

The IPKat is intrigued. How can Italy take action where the infringement is in Germany? More to follow when the actual decision comes out.

The never-ending story and the Robin that roared

Last night the Right Honourable Lord Justice Jacob gave delivered the 11th Burrell Competition Lecture in the pleasant surroundings of the Royal College of Surgeons of England, Lincoln’s Inn Fields, London. This event, organised by the Competition Law Association, has been in the past associated in the IPKat's mind with two things: (i) what IP lawyers say and (ii) what competition lawyers don't say. This year it was the turn of the "I speak the truth" wing of the IP fraternity, with Lord Justice Jacob holding forth on the theme, "The monopolists v the anti-monopolists--a never-ending story". The title theme, he explained, came from an observation by the venerated competition lawyer Sir Jeremy Lever, who observed that, while Sir Robin was a monopolist, he was an anti-monopolist.

The thesis of Sir Robin was that, if one considers the attitudes taken by the judiciary towards the enforcement and the regulation of IP monopolies, there is a bipolar effect: the pendulum swings between hostility towards the enforcement of IP rights and a reluctance to consider any activity which falls within their scope as being anything other than infringing. Taking an historical view of judicial attitudes in the United Kingdom and the United States, he sought to describe the motion of this pendulum, identifying and contrasting three principal species of law:

* laws that actually control monopolies;

* laws that offer a defence against an attempt to enforce monopolies (in Europe, the so-called 'Euro-defences')

* laws that provide a check on the enforcement of a specific IP right.

According to the evening's blurb, "The occasion will be extremely enjoyable and of interest to all lawyers, economists, business people and others with a keen interest in competition and IP law". Not necessarily so, says the IPKat. It should have made many competitionists cringe at the apparently random and piecemeal manner in which the law has sought to interfere with the misuse and nonuse of IP rights: a theme that pervaded this year's lecture was the lack of predictability and stability that businesses must face as the pendulum -- driven as much by the human prejudice of judges and East Texan juries -- swings inexorably from one extreme to the other.

Right: competition lawyers attempting to eviscerate yet another intellectual property monopoly

Not surprisingly, given Sir Robin's professional interests and experience, his examples were drawn mainly from intellectual property law itself and from patents. His best line was reserved however for reports of the competition authorities which, he observed, were "about as thick as a telephone directory -- and almost as interesting".

All in all, this was a most enjoyable evening, for which the organisers should be congratulated. The best way to encourage them, if you enjoy contemplation of the IP/competition law interface, is to join the Competition Law Association by following the link above (or its parent, the International League of Competition Law).

French president calls for stronger protection for souffles

The Sydney Morning Herald reports that Monsieur le President is calling for French gastronomy to be added to the list set up by UNESCO’s Convention on the Protection and Promotion of the Diversity of Cultural Expressions. According to M. Sarkozy

"Agriculture and the professions which craft it every day are the source of our country's gastronomic diversity - it is an essential element of our heritage…That is why I want France to be the first country to apply to UNESCO, from 2009, for our gastronomic tradition to be recognised as a world heritage. We have the best gastronomy in the world."

A chef involved in the project, Guy Savoy added:

“You can talk about cuisine in numerous countries around the world …[but France] is the only one to have such diversity and such possibilities for transforming the produce of local artisans, be they on land or sea".

Mexico has already had a similar bid turned down. The verdict on France is expected in 2010.

The IPKat calls on Mr Brown to follow suit. Who knows when those nasty foreigners will take unfair advantage of Great Britain’s gastronomic treasures. The threat to the humble British black pudding should not be sniffed at. More seriously, the IPKat reckons that national cuisines have been exported outside their birthplaces so comprehensively that it’s rather difficult to work out what any country’s cuisine is anymore.

News from India and Pakistan

The IPKat has received a notice concerning a forthcoming event in Ooty, India. He learns that

"The Society for Technology Management (STEM), India's premier and pioneering technology transfer forum, will be hosting its flagship international program, the Graduate Course in IPR and Technology Transfer, at Hotel Sullivan Court, Ooty, India from 13-16 April 2008. The four-day program will examine the role of Intellectual Property as a strategic technology transfer tool using case studies, best practices and interactive discussions.

The world-class faculty for the programme is comprised of senior IP practitioners, decision makers and academics drawn from the US, EU and Asia. All faculty members are senior professionals having years of experience and expertise in intellectual property management and technology transfer. This programme is aimed at research heads, technology transfer officers, IP managers, technology managers, regulatory affairs specialists, and senior policy makers engaged in IP policy development. Participants will be able to learn current best practices in IP and innovation management; accelerating commercialization through technology licensing and developing a policy framework to manage their intellectual assets. Details on the previous 2007 STEM IP programme, including faculty profiles, participant profiles and comments on the programme, are available online at http://www.stemglobal.org/".

The IPKat is also grateful to his Indian friend Ayan Roy Chowdhury for drawing his attention to this piece from Telegraph India concerning the ongoing dispute over Kashmiri handicrafts. Both India and Pakistan lay claim to Sozni shawls, for which the Jammu and Kashmir Craft Development Institute has sought geographical indication status. Also in dispute are Pashmina and Kani shawls. A possible solution to the dispute may be found if it can be established that shawls made on each side of the India-Pakistan border are of the same character and quality.

More copyright please, says SNP MP

The IPKat learns (via Impact and the Open Rights Group) that a British MP has put forward a Private Members' Bill titled "Sound Recordings (Copyright Term Extension) Bill 2007-08", with the apparent aim of "extend[ing] beyond 50 years the copyright term of sound recordings; and for connected purposes". What exactly this would entail is not yet clear, as the bill has not been published. It is, however, due for its second reading in the UK Parliament on 7 March 2008, when we should be able to find out more. This seems to be in line with European Commissioner Charlie McCreevy, who has recently been reported as saying that he wants the same thing Europe-wide (which is surely the level at which any actual legislation would have to be started these days).

The MP in question is Peter Wishart, who just happens to be an ex-member of the (embarrassingly awful, in this Kat's opinion, but admittedly quite popular) Scottish folk-rock group Runrig, as well as being SNP Member of Parliament for the Perth and Perthshire North constituency. On the latest update of the House of Commons Register of Members' Interests, he states, "I receive royalty payments from EMI/Ridge Records [Runrig's record company] for my recorded works with Runrig, with whom I serve as an unremunerated director. I receive payments for my published works from the Performing Rights Society."

Whilst the IPKat would be very surprised to see Runrig earning any money from royalties relating to their sound recordings in 50 years (although he probably won't be around to see it happen), he can see why Mr Wishart would want as much copyright as he can get his hands on, just in case. Could the hands (or even Hands) of EMI perhaps have had something to do with it too, since they have a much bigger vested interest? Should MPs even be allowed to table Bills where they clearly have something to gain from them being passed?

First 300 RCD decisions now available

Back in January 2007, MARQUES -- the Association of European Trade Mark Owners -- published on its website a Review of the First 150 Decisions on the Validity of Registered Community Designs. Today a revised second edition, Review of the First 300 Decisions on the Validity of Registered Community Designs, was launched on the MARQUES website.

Presenting the Review at the Winter Meeting of MARQUES in the strikingly beautiful Hesperia Tower Hotel, Barcelona this morning, David Stone (Howrey) explained the methodology of the Review and its significance, also highlighting some of the major problems faced in Community design practice in determining issues such as prior disclosure. For MARQUES members, the report is available on the MARQUES website: click Teams, then Designs Team, then Registered Community Designs. Anyone wishing to make enquiries concerning the Review is welcome to contact David direct.

Boehringer Ingelheim v Swingward decision: and the show's not over yet...

The Court of Appeal has delivered its verdict in Boehringer Ingelheim v Swingward. (Readers will be excused if they have a sense of deja vu as they read those words). This is in the light of the ECJ's reponse to the second set of questions referred to it in this case. The ultimate result is Jacob LJ's statement "what I would do for the present is hold that the defendants have complied with BMS condition 4 and in particular that their activities by way of re-boxing and re-labelling have not caused and will not cause damage to the reputation of the claimants' trade marks.". The for now element is a result of a request from the claimants that the Court of Appeal hold off from making its final decison in the light of the fact that there is a pending Austrian reference to the ECJ asking the following questions:

1(a) Are Article 7 of the Trade Marks Directive [full title set out] and the case-law of the Court of Justice of the European Communities which has been pronounced on it to be interpreted as meaning that proof that reliance on the trade mark would contribute to an artificial partitioning of the market must be furnished not only as regards the repackaging in itself, but also as regards the presentation of the new packaging?

If the answer to this question is in the negative:

(b) Is the presentation of the new packaging to be measured against the principle of minimum intervention or (only) against whether it is such as to damage the reputation of the trade mark and its proprietor?

The IPKat can only agree with Jacob LJ's introductory comments:

Notwithstanding the two references to the ECJ and its answers, each "side" claims to have won...That is a sorry state of affairs. European trade mark law seems to have arrived at such a state of uncertainty that no one really knows what the rules are, outside the obviously core case of straightforward infringement (the use of a mark as a trade mark for the defendant's goods which is the same as or confusingly similar to a plaintiff's registered mark registered for the same or similar goods). Big brand owners want bigger rights; smaller players, no change or less. The compromises which have emerged have very fuzzy lines. So it is that in this case, notwithstanding two references (and a host of cases about relabelling parallel imports going back at least 30 years...), there is still room for argument. There is indeed a yet further reference about the subject still pending before the ECJ, see below.

The only winners here seem to be the lawyers (and of course the academics who get to write about the whole sorry mess).

Luxembourg suffers defeat at hands of local ECJ

Only French-speakers will know how embarrassed les Luxembourgeoises must be, since the European Court of Justice, in Case C-328/07, Commission des Communautés européennes v Grand-Duché de Luxembourg, ruled that the tiny Duchy had failed to implement the provisions of Directive 2004/48, the IP Enforcement Directive. The key bits are in paragraphs 8 to 12:

"8 Devant la Cour, le Grand-Duché de Luxembourg admet que la directive n’a pas été transposée dans son ordre juridique interne, tout en réitérant que la loi de transposition luxembourgeoise, qui devrait intervenir à bref délai, ne peut être élaborée sans tenir compte des lois belge et française correspondantes, eu égard à l’influence, dans le domaine concerné, de la jurisprudence de ces deux États membres sur la jurisprudence des juridictions luxembourgeoises.

9 Il convient de souligner que, selon une jurisprudence constante, l’existence d’un manquement doit être appréciée en fonction de la situation de l’État membre telle qu’elle se présentait au terme du délai fixé dans l’avis motivé (arrêts du 14 juillet 2005, Commission/Espagne, C‑135/03, Rec. p. I‑6909, point 31, et du 6 décembre 2007, Commission/France, C‑106/07, non encore publié au Recueil, point 16).

10 En l’espèce, il est constant que, à l’expiration dudit délai, les mesures nécessaires pour assurer la transposition de la directive dans l’ordre juridique national n’avaient pas été adoptées.

11 Par ailleurs, il y a lieu de rappeler qu’un État membre ne saurait exciper, notamment, de pratiques propres à son ordre juridique interne pour justifier l’inobservation des obligations et des délais prescrits par une directive (voir en ce sens, notamment, arrêts du 9 septembre 2004, Commission/Espagne, C‑195/02, Rec. p. I‑7857, point 82, et du 27 septembre 2007, Commission/France, C‑9/07, non publié au Recueil, point 9).

12 Dans ces conditions, il y a lieu de considérer le recours introduit par la Commission comme fondé".

Says the IPKat, as usual I'd appreciate some guidance. Can a kind, French-speaking reader post a brief summary below? Merpel adds, Luxembourg losing before the ECJ is a bit like a football team losing at home, isn't it?

Kosovo IP rights

A circular received by the IPKat from Balkan-based IP practice SD Petosevic has informed him as follows:

"Kosovo independence that was declared this past Sunday, February 17, 2008, did not result in any immediate changes for the right holders in this new European jurisdiction. It is expected, however, that the outstanding questions regarding International Registrations and European Patents will be resolved in the near future.

Kosovo passed its own IP legislation and established its own Intellectual Property Office while still under the UN protectorate on November 19, 2007. The new IP law in Kosovo allows 12 months for re-registering Serbian registrations and re-filing pending applications. Right holders have until September 1, 2008 to maintain predecessor country priority for IP rights in Kosovo.

Franchisor wins trade mark appeal but is given "little hope" of damages

Franchise-related disputes rarely get before the courts, since franchisors have a penchant for discreetly arbitrating any fall-out between them and their franchisees -- but Gary Fearns (trading as Autopaint International) v Anglo-Dutch Paint & Chemical Co and others [2008] EWCA Civ 99 (here on BAILII, decided yesterday) is an exception, since it involved the relationship between a franchisor and his franchisee's suppliers.

Fearns, who sold paint and associated products for use on cars, held UK registered trade marks for the words AUTOPAINT INTERNATIONAL and for a device mark which included them. Fearns had his own paint shops and licensed his own Autopaint franchisees, sourcing his paint from various defendants for which Anglo-Dutch was the UK distributor. In 2004 Anglo-Dutch started to sell paint, under the Autopaint brand, directly to Fearns' Autopaint franchisees. Fearns sued for trade mark infringement, passing off, malicious falsehood and infringement of copyright and breach of contract relating to a "paint tin agreement". He further alleged that the defendants had acted together or individually intentionally to inflict economic harm on him by unlawful means. Ango-Dutch said they were entitled to sell the products directly to the franchisees and that Fearns had agreed to this as a means of reducing his endebtedness to them.
Deputy Judge Christopher Floyd (see IPKat note here) considered that, on the evidence, it had indeed been agreed that Anglo-Dutch could sell direct to franchisees if Fearns couldn't supply them himself - but that they could not just sell any products that the franchisees could get from them. There had accordingly been some infringement going on. There was however no infringement of copyright in Fearns' design and logo: these were not printed matter of a 'primarily literary or artistic character' and thus had only had a limited period of copyright protection under section 52 of the Act. On the facts there was also some passing off and a bit of breach of contract too.

Fearns appealed both regarding the judge's decision on the consent agreement and on the question of causation arising from Anglo-Dutch's alleged wrongful acts; the Court of Appeal (Lord Justice Waller, Lady Justice Arden and Lord Justice Toulson) allowed his appeal in part.

* The Deputy Judge had to make up his mind as to whether to prefe the evidence of Anglo-Dutch to that of Fearns. He recognised the points that could be taken on behalf of Fearns but, having weighed up the competing points, he was entitled to hold in favour of Anglo-Dutch.

* Fearns' position at the time was very difficult, since he had ordered products which he needed for his franchisees but which he could not obtain unless he paid. He offered to make payments in order to obtain more deliveries. If that did not enable him to satisfy his franchisees, he had the choice between losing their goodwill and possibly his business, or keeping their goodwill by letting Anglo-Dutch deliver paint and retain the proceeds in part to pay off the debt. It was understandable for Fearns to have taken the option which the judge found he did.

* Until the extent of any infringements of the trade marks and the extent of any breaches of the consent agreement were known, the court could not rule on their effect.

* It appeared unlikely that Fearns would be able to establish that, if Anglo-Dutch had stuck to the consent agreement, he would have been able to maintain his franchise business. However, until the extent of the breaches were clear, he should not be prevented from seeking to establish that, if the consent agreement had been respected, he would have been able to survive with his network of franchisees intact. Accordingly the appeal was allowed to the extent that Fearns was not to be prevented from establishing, if he could, loss of his business flowing from breaches of the consent agreement.

The IPKat notes that this is another of those appeals that spends a lot more time focusing on the facts than on the law, on account of the need to treat with great care the evidence submitted on both sides. Sometimes parties to IP ligitation are accused of rewriting the past to suit their ends -- but if they wrote down their agreements with sufficient clarity in the first place there would be no need to do this since there would be nothing to rewrite [Merpel adds, if there's nothing written down in the first place, what's written down later isn't re-writing anyway...].

Henry Ford on car paint
Paint it Black here

Budweiser dispute goes back in time

Readers of this weblog may get a sense of deja-brew when they see the case name Budejovicky Budvar Narodni Podnik v Anheuser-Busch Inc. Well, there has been a fresh outbreak of litigation between those two noble beneficiaries of the legal profession, this time fought out in the Chancery Division of the High Court for England and Wales. You can find it as case [2008] EWHC 263 (Ch) on BAILII, which faithfully reproduces the words of (non-IP-specialist judge) Mr Justice Norris.

The IPKat won't even trouble to explain this one, which stems from an application filed in June 1989 and which harks back to the late, unlamented pre-directive legislation in the United Kingdom and involves a conflict for two marks, registered on the same day for largely the same goods, where one of those marks later turned out to be an earlier mark than the other.

A prize -- a pristine copy of the most recent edition (the 8th) of Butterworths' Intellectual Property Law Handbook -- goes to the best summary of this decision in NOT MORE THAN 150 WORDS. Please send your entry here. A further copy is offered as a prize for the best haiku on the Budweiser dispute, so get writing! (Best entries will be published).

Varec ruling values confidentiality ahead of transparency in tendering

The conflict between maintaining the confidentiality of industrial data and facilitating open competition for public contracts lay at the heart of last week's European Court of Justice ruling in Case C-450/06 Varec SA v Belgium, Diehl Remschied GmbH & Co intervening (click here for the IPKat's note on the Advocate General's Opinion in this case).

Right: for the not-so-tender -- real leopard tracks

To summarise the issue: back in December 2001 the Belgian government invited tenders for the supply of track links for Leopard tanks for which Varec and Diehl both submitted bids. Belgium didn't think Varec's bid met its technical selection criteria and also thought it unlawful. Diehl's bid, however, was unobjectionable, well priced and fitted all the criteria. Unsurprisingly the contract went to Diehl. In Belgian proceedings to annul the award of the contract, Varec wanted to see the details of Diehl's submission and was told it couldn't because that information was confidential. The trial court stayed the proceedings and asked the European Court of Justice a question for a preliminary ruling on whether the provisions of EU law relating to public tenders required the relevant authority to ensure confidentiality and observance of the business secrets contained in the files communicated to it by the parties to the case, including the contracting authority, while being entitled to appraise itself of such information and take it into account.

The European Court of Justice ruled as follows:

"[The law] must be interpreted as meaning that the body responsible ... must ensure that confidentiality and business secrecy are safeguarded in respect of information contained in files communicated to that body by the parties to an action, particularly by the contracting authority, although it may apprise itself of such information and take it into consideration.

Right: another Belgian phenomenon -- Leopold tracks

It is for that body to decide to what extent and by what process it is appropriate to safeguard the confidentiality and secrecy of that information, having regard to the requirements of effective legal protection and the rights of defence of the parties to the dispute and, in the case of judicial review or a review by another body which is a court or tribunal within the meaning of Article 234 EC, so as to ensure that the proceedings as a whole accord with the right to a fair trial".

The IPKat notes that the European Court of Justice appears to value the confidentiality of information ahead of the entitlement to disclosure in the interests of open competition and fair play, whereas Advocate General Sharpston, while recognising the need for confidentiality, appeared to give it a more subservient role as against the entitlement of bidders for a contract to see that competing offers are fairly evaluated. Merpel says, yes but where does this leave the unsuccessful bidder who has been rejected on technical grounds that it may believe are open to challenge?

How the leopard got his spots here
The IPKat's favourite Belgian tank here

The Knorr, the merrier

Another decision that nearly slipped beneath the IPKat's whiskers for good was Knorr-Bremse Systems for Commercial Vehicles Ltd v Haldex Brake Products GmbH [2008] EWHC 156 (Pat), a ruling of England and Wales Patents Court judge Mr Justice Lewison (full text available on BAILII).

Knorr, an English wholly-owned subsidiary of a German company, was part of a group of companies that manufactured brake systems -- as did a German company, Haldex. Knorr's parent company had developed a valve which, said Haldex, infringed its European patent. Haldex began infringement proceedings in Germany, where Knorr's parent proposed to initiate invalidity proceedings against the European patent's German emanation. The dispute was settled by an agreement that conferred jurisdiction on the patent disputes division of the Dusseldorf (Germany) regional court. Under this agreement Knorr's parent promised not to challenge the validity of Haldex's patents.

Knorr subsequently developed a new valve, which was to be made in the UK for the British market. To be on the safe side, Knorr sought an acknowledgement of non-infringement from Haldex and, on receiving none, applied for a declaration of non-infringement. According to Knorr, both the fact of the jurisdiction agreement and its content, and in particular the question whether it bound Knorr as a subsidiary of its parent, had to be determined under Council Regulation 44/2001 (the Judgments Regulation). Haldex disagreed. In its opinion, once the existence of a jurisdiction clause was established as a matter of the autonomous law of the Regulation, its scope -- and in particular the question who was bound by it -- was to be determined by the applicable national law, which in this case was German law.

Lewison J chose to keep the litigation in England. In his opinion:

* Whether Knorr was bound by the jurisdiction clause was governed by the Regulation, not by German law (applying the fairly obscure and oft-forgotten ECJ ruling in Case C-269/95 Benincasa v Dentalkit).

* Knorr was not itself a party to the settlement agreement, nor was it even suggested that it was a successor to the rights and obligations of its parent.

* The argument that Knorr was bound by the jurisdiction clause was itself based entirely on principles of German law, which was not, so far as British law was concerned, applicable in this case.

* Even if German law were the applicable law, Knorr was still not bound by the settlement agreement.

The IPKat says, the most interesting part of this case is the judge's comments on the effect of the no-challenge clause by which Knorr's parent promised not to attack the validity of Haldex's patents. He said:

"49 In Bayer AG and Maschinenfabrik Hennecke GmbH v. Süllhöfer [1990] F.S.R. 300 the ECJ held that it made no difference that the non-challenge clause was contained in an agreement settling litigation. The court said:

"[14] In the Commission's view, an undertaking not to challenge an industrial property right included in a licensing agreement should, in principle, be considered to be a restriction of competition. Such a clause is, however, compatible with Article 85(1) of the EEC Treaty when it is included in an agreement whose purpose is to put an end to proceedings pending before a court, provided that the existence of the industrial property right which is the subject-matter of the dispute is genuinely in doubt, that the agreement includes no other clauses restricting competition, and that the no-challenge clause relates to the right in issue.

[15] The point of view put forward by the Commission cannot be accepted. In its prohibition of certain agreements between undertakings, Article 85(1) makes no distinction between agreements whose purpose is to put an end to litigation and those concluded with other aims in mind. It should also be noted that this assessment of such a settlement is without prejudice to the question whether, and to what extent, a judicial settlement reached before a national court which constitutes a judicial act may be invalid for breach of Community competition rules.

[16] A no-challenge clause included in a patent licensing agreement may, in the light of the legal and economic context, restrict competition within the meaning of Article 85(1) of the EEC Treaty.

[17] In regard to that context, it should be pointed out that there is no restriction on competition when the licence granted is a free licence in as much as, in those circumstances, the licensee does not suffer from the competitive disadvantage involved in the payment of royalties.

[18] Nor does a no-challenge clause contained in a licence granted subject to payment of royalties restrict competition when the licence relates to a technically outdated process which the licensee undertaking did not use."

In the present case it is common ground that both KBS and Haldex are part of an oligopoly in the field of braking systems for commercial vehicles and that their trade is conducted throughout the EU. On the face of it, therefore, a non-challenge clause is likely to distort competition and affect trade between member states. There is no question in the present case of a free licence. Nor is it possible to say that the technology in question is outdated, since Haldex relies on the two patents as preventing the commercialisation of the SV3801 valve.

I do not have to decide whether KBS UK are right in their contentions, but I do consider that they have the better of the argument. There is at the least a good arguable case that, even if KBS UK are bound by the non-challenge clause (which in my judgment they are not) that clause is void because it contravenes article 81 EC. "

Merpel says, the principle that a contested IP right will not be challenged is one that is often implied or, more frequently expressed, in settlement agreements. But it is really necessary to look behind the form of the agreement and consider the genuine substance of the dispute. The validity of a patent is routinely called into question by an alleged infringer, but that may be as much for strategic or nuisance value in the litigation as because there is any serious risk of the patent being invalid. It would be harsh if a clause that was designed to make peace between parties on the infringement issue were to have serious consequences in terms of EU and national competition law. Tufty says: well, if the validity of the patent wasn't really an issue in the first place, there's no harm in saying that the alleged infringer remains free to challenge it, is there?

How brakes work here

Cardiff has a new look - and dragons aren't welcome

The IPKat was mildly bemused to read on the BBC website that Cardiff has spent £45,000 on a new logo to promote the city. The logo is made up of the name Cardiff in English and Welsh and eight coloured disks. According to the Cardiff tourist website

‘The radical redesign is a visual representation of the city and everything that it stands for. Gone are the stereotypes of daffodils and dragons. The brand takes inspiration from the palette of colours that represent the Capital City – from the greens of its parks to the blues of its waterfront.’

Less kind visitors to the BBC’s website have pointed out the similarity between the new logo and the contents of a tube of Smarties.

The IPKat who, like all good intellectual property lawyers, has a soft spot for South Wales wonders if it’s really a good idea to dissociate Cardiff from its heritage. If it is, then he wonders if it’s wise to replace the Cardiff ‘brand’ with an image that is so abstract that one needs slightly dodgy marketing bumph to understand it.

Roundabout trade avoids trade mark infringement, says Court of Appeal

The IPKat has been a little slow to report on Eli Lilly and Co and another v 8PM Chemist Ltd [2008] EWCA Civ 24, a decision of the Court of Appeal for England and Wales earlier this month, on appeal from the ruling late last year from Mr Justice Mann (noted here by the IPKat).

In brief, Eli Lilly -- a big international pharma company -- owned the Community and UK registrations of the Cialis, Lilly, Evista, Humalog and Humulin word and logo trade marks. 8pm, a substantial UK company, ran a pharmacy business. Eli Lilly's products sold well in the USA, where patients tried to buy genuine goods more cheaply outside the USA, generally by using the internet. This was done in the following manner: USA patients would first get a doctor's prescription for the product; they would then order it from a Canadian company, which placed an order with a Turkish company (which had genuine stocks of the drugs concerned, packaged in boxes bearing the Lilly trade marks, instructions in Turkish and containing information leaflets in Turkish). That order would then checked by a pharmacist, who reviewed the dispensing label to check the directions. The appropriate label would then be stuck on to the side of the Lilly box, following which the product would be placed into a brown box which was sealed and given a label containing just the patient's name and address. Each brown box was then air-freighted to 8pm in the UK, where the box remained sealed and the relevant trade mark was not revealed. Boxes would then be posted to the patient in the US.

8pm's activities were all carried out under an authorised Customs procedure which enabled products to be processed or dealt with in the UK without incurring the obligation to pay duty or VAT. The goods were under 'inward processing relief suspension' and were, accordingly, not 'released for free circulation' in the EU. Eli Lilly sued for trade mark infringement and, in an application for interim relief, Mann J held that there was an arguable case of infringement and granted an interim injunction. 8pm appealed.

The Court of Appeal (Lords Justices Rix and Jacob and Sir William Aldous) allowed the appeal.

* The European Court of Justice of the European Communities in Case C-405/03 Class International BV v Colgate-Palmolive Co (here ) had made it plain that a trade mark owner's goods which were 'non-Community' goods were to be regarded as not having entered the EU for trade mark infringement purposes. This was so, regardless of the fact that those goods had a physical presence.

* Using a mark in the course of trade required introduction of the goods into the Community for the purposes of putting them on the market there. As long as the requirements of the customs-approved treatment or use, other than release for free circulation, under which the goods had been placed were satisfied, the mere physical introduction of the goods into the territory of the Community was not 'importing' and did not entail using the mark in the course of trade.

* The key issue is whether there is an interference with the right of first marketing within the EU. The genuine goods of a trade mark that never become Community goods do not interfere with that right.

* The essential function of the claimants' European trade marks was in no way jeopardised by 8pm's activities. No one in Europe even saw the trade marks and it was unlikely in those circumstances that there would be infringement.

* There was no use of the marks 'in the course of trade'. 8pm's acts were all in relation to goods subject to Customs control and none of the goods ever became Community goods. It followed that the marks were never used in the course of trade in the EU. The giving of an impression to consumers in the USA that goods emanated from the UK, if that could be proved, did not make the case arguably different from that in the case law of the European Court of Justice.

The IPKat can't fault the reasoning of the Court of Appeal, but he feels unhappy at the result. That's not to say that he believes that the principle of Class International is wrong, but rather that any set of rules that requires such a roundabout business model in order to comply with the formal rules relating to trade mark infringement creates the impression that something dodgy is being done.

Second BAYERISCHES BIER case for ECJ

The IPKat has just learned that last week the German Supreme Court referred a question to the ECJ relating to the conflict between the geographical indication (GI) BAYERISCHES BIER ("Bavarian beer"), which was protected in 2001 (the application initially was filed in 1994) on the basis of the then current Regulation 2081/92 and the international trade mark registration for BAVARIA HOLLAND BEER, designating Germany, with a priority date of 1995 and covering "beer".

The claimant, the Bayerische Brauerbund e.V. (Bavarian Brewery Association) requests that the IR proprietor agrees to cancellation of the IR's German designation on the basis that it infringes the GI. The parties disagree over the question whether the Regulation on the basis of which protection was granted to "Bayerisches Beer" is valid. The question of validity of this Regulation is already subject of proceedings before the European Court of Justice, having been referred by an Italian Court which is also hearing proceedings between the two parties.

The German Supreme Court has now referred further questions relating to the relationship between trade marks and a GI which was granted in the course of "simplified" proceedings. The questions relate in particular to the GI's priority date and whether the application date is relevant if -- as is the case in simplified proceedings -- only the GI's registration is published, not its application.

A second question relates to the regulation according to which "Bayerisches Beer" was registered and whether it is invalid. If so, the Court asks whether the claimant can claim protection on the basis of national law [Beschluss vom 14. Februar 2008 – I ZR 69/04 – BAVARIA. Source : German Supreme Court press notice No. 30/2008] (information supplied by the IPKat's friend Kathrin Vowinckel).

The IPKat assumes that the ECJ will consolidate this reference with the earlier Italian one. Merpel adds, these Bavarians beers probably make a pleasant change from all that Budweiser ...