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Friday, 6 July 2012

Supreme Court: IP exists, but can't be defined

Apart from hacking, this
model is excellent for
making crank calls
In February of this year, guest Kat Darren posted this analysis of the decision of the Court of Appeal for England and Wales in Phillips v Mulcaire, in which that eminent court, dismissing the appeal, affirmed that the privilege of self-incrimination could not be relied on by a phone-hacker. This was, in short, because that privilege could not be invoked in proceedings involving intellectual property. Now, earlier this week, the Supreme Court has, in almost record time, heard and dismissed a further appeal by the hapless Mr Mulcaire. You can find the decision at [2012] UKSC 28 SC (the IPKat's friend Hugo Cox, who provided the link, picks up a substantial katpat for prodding him into action in writing this note).

In case you missed it, Phillips worked for the notorious public relations consultant Max Clifford, spin-doctor to many a celebrity-in-need. Glenn Mulcaire, a private investigator who was often engaged by naughty and now-dead newspaper News of the World, had been convicted of intercepting Clifford's voicemail messages. Phillips, alleging that Mulcaire intercepted her voicemail messages too, brought a civil claim both against him and that newspaper, saying that her clients often left voicemail messages containing factual information, some of which was private and some commercially confidential. Mulcaire was ordered to disclose information concerning the interceptions, including the identity of those who had instructed him to carry it out, but he resisted the order on the basis of privilege against self-incrimination.

It suddenly dawned on Tibbles
that he was hacking into
the wrong Phillips ...
The High Court twice (here and here) concluded that the privilege claimed by Mulcaire was excluded by the Senior Courts Act 1981 s.72(2)(a) on the basis that the information intercepted amounted to intellectual property. The Court of Appeal agreed. The Supreme Court was  then asked to consider two questions: (i) what did the words "intellectual property" in s.72(2)(a) actually mean? (ii) assuming that, if Mulcaire complied with the order, Mulcaire would expose himself to criminal proceedings for conspiracy, would such proceedings would be for a "related office" within the meaning of s.72(5)? [which provides that the privilege against self-incrimination can't be invoked where the offence for which Mulcaire might be incriminating himself is related to the intellectual property-based civil action]?

The Supreme Court's answers, unanimously delivered, were that s.72 did indeed exclude Mulcaire's privilege against self-incrimination: that the proceedings brought by Ms Phillips were proceedings for rights pertaining to intellectual property and that the conspiracy proceedings to which Mulcaire would expose himself on disclosure of the information amount to a “related offence”.

The Supreme Court prepared a helpful summary of its decision, as follows, with paragraph references in square brackets:
Where Parliament has left no room for doubt that it intends the privilege to be withdrawn, there is no need for the Court to lean in favour of the narrowest possible construction of the reach of the relevant provision. An important part of the legislative purpose of these provisions is to reduce the risk of injustice to victims of crimes. That purpose might be frustrated by an excessively narrow approach [14]. Various definitions of “intellectual property” were put before the Court but they are not particularly helpful because there is no universal definition of the term [18] [at least it's official: there is no helpful definition of "intellectual property". Now perhaps we can stop arguing about it ...]. The starting point must be the language of the definition in s.72(5). For present purposes the essential point is that the definition in s.72(5) contains the words “technical or commercial information”. The meaning of those words must be something in which a civil claimant has rights capable of being infringed. The fact that technical and commercial information ought not, strictly speaking, to be described as property cannot prevail over the clear statutory language. Whether or not confidential information can only loosely, or metaphorically, be described as property is simply irrelevant [19]-[20] [ditto, with regard to another sterile and pointless argument]. Not all technical or commercial information is confidential [23]. Conversely a secret about a person’s private life is not naturally described in normal usage as technical or commercial, even if it could be turned to financial advantage by disclosing it, in breach of confidence, to the media. [24]. Purely personal information is not “other intellectual property” within the meaning of s.72(5). The purpose of s.72 was to prevent remedies against commercial piracy from being frustrated, not to cover the whole of the law of confidence [28]- [29]. While there may be commercial value in personal information and this may lead to some difficult borderline cases, it is not a reason for adopting an unnatural construction of the definition [31]. On the facts pleaded in this appeal there is no great difficulty as to “mixed messages”, where some of the information is commercial and some is not. Ms Phillips’s pleading is to the effect that the voicemail messages left by her clients contained commercially confidential information. There is no reason to suppose that the commercial information was not significant [32]. 
There must be a sufficient connection between the subject-matter of the claimant’s civil proceedings and the offence with which the defendant has a reasonable apprehension of being charged. Pursuant to s.72(5) the offence must be committed by or in the course of the infringement to which the proceedings relate unless the offence involves fraud or dishonesty, in which case a looser connection is sufficient [34]. It is well established that conspiracy is a continuing offence. While the offence is committed as soon as the unlawful agreement is made, the conspiracy continues until the point when the agreement is terminated by completion, abandonment or frustration [43]. If Mr Mulcaire conspired to intercept messages on mobile phones, an offence was committed when the unlawful agreement was made. But the offence continued so long as the agreement was being performed. Every interception pursuant to the unlawful agreement would be in the course of the offence [45].
The IPKat is greatly heartened by the Supreme Court's pronouncements that (i) definitions of IP are unhelpful and (ii) there's nothing to be gained from arguing whether confidential information is property or not.  Now that these issues have been decided, we can all get back to arguing about issues that can easily be resolved, such as what to do about file-sharing, defragmenting Europe's patent system, trolls, lookalikes, balancing affordable medicines with affordable investment ...


Anonymous said...

Will we soon see the re-introducion of the death penalty? Not for serious crimes of course, (where the privilege against self incrimination still prevails) but only for civil claims relating to IP matters (hanging someone for murder would continue to be inhumane)...

Ken Moon said...

Jeremy, I think the Supreme Court has got it right in terms of s.72, but I cannot agree that beyond this it is not helpful to require rigour in the meaning of "intellectual property" or that nothing is to be gained by arguing whether confidential information is property or not.

Both issues arise in day to day practice, never mind in academic fora. Apart from having to explain ad nauseum to clients that there is no general law against "intellectual property infringement" as such, many practitioners draft licences and other agreements using the term intellectual property to mean "proprietary" ideas in some clauses and to mean legal rights in those ideas in other clauses to make the agreement a nonsense. Some drafters have sought to have a bob each way, like in the Senior Courts Act, not quite sure whether they mean information or legal rights.

It is vital to have certainty in whether confidential information (in my practice it will be trade secrets) is property or not. If not, it cannot be assigned and trade secret transactions can become more complex. I believe the authors of Gurry 2nd edition have it right and at best courts' references to "property" (other than in the US) are merely metaphorical. Knowing this one drafts an agreement to put the transferee in possession of the trade secret coupled with irrevocable perpetual covenants on behalf of the transferor to discontinue use and not to disclose to third parties. If that is right those who use a form of assignment face the possibility of having the transaction struck down.

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