From March to September 2016 the team is joined by Guest Kats Emma Perot and Mike Mireles.

From April to September 2016 the team is also joined by InternKats Eleanor Wilson and Nick Smallwood.

Wednesday, 25 May 2016

Chief Master Marsh calms fears of IPEC overburdening with new transfer and triage process

The AmeriKat lost in thought
about how to value an IP claim
(c) Joe Delaney
Last week, the Kat published a guest post from James Sweeting (Lewis Silken) on the transfer and triage processes introduced by the new Chancery Guide (see post here).  The concern was that with the new "triage" process, whereby the Court will decide whether an action started in the High Court should remain or be transferred to the IPEC, there may be a tendency to transfer any claim less than £500,000 to IPEC.  James stated:
"However, the Masters in the Chancery Division are, at the moment, conducting the triage process a) as soon as the particulars of claim are lodged (in accordance with the Chancellor’s statement here) and b) with reference only to the ascribed value of the claim. It seems like their fairly hard and fast approach is this: anything less than £500,000, regardless of any other aspect of the transfer guidelines (eg “whether the facts, legal issues, remedies or procedures involved are simple or complex”), the IPEC Court Guide, the scale of disclosure, the number of witnesses etc is automatically transferred to IPEC."
Earlier this week, the Kat received an email from Chief Master Marsh in the Chancery Division who stated that all was not to be feared.  He explained as follows:
"I hope the following comments will allay the fears expressed by your contributor about a flood of transfers to the IPEC resulting from the early triage system in the Chancery Division:

1. The transfer guidelines in the Chancery Guide at para 14.19 make it clear that an order for transfer out will only be made if the value of the claim is ascertainable.

2. Since the early triage procedure was instituted in January 2016 only seven orders for transfer to the IPEC have been made at the early triage stage.

3. Every order for transfer contains the usual rubric permitting a party to apply to set aside the order."
Does this solve the fears outlined by James? James responded as follows:
"The whole point is that the value of IP claims are almost always unascertainable until there has been Island v Tring disclosure and that never takes place until after the issue of liability has been determined."
Which begs the perennial question - how do you value an IP claim when it comes to the Claim Form?  Is the amount always unascertainable?  And, if not, can the figure on the form always be believed?  The UPC Preparatory Committee's guidelines on calculating value-based fees suggests a way forward  for patent claims (see here), but what about other forms of IP?  

SCHHH ... it's not a single brand

The IPKat is very grateful to David Pellisé and Juan Carlos Quero of Pellisé Abogados in Barcelona, for telling him about a new reference that is fizzing its way to the Court of Justice of the European Union. 

Interested in the limits of parallel importation? Then pour yourself a stiff G&T and read on. The Barcelona Commercial Court (nº 8) in Spain has essentially asked the CJEU to rule on what happens when the owner of a trademark right has caused uncertainty as to the function of origin.

The famous SCHWEPPES trade mark: it looks
the same worldwide, but ownership varies
from one EEA country to another
The dispute relates to parallel imports of soft drinks bearing the famous SCHWEPPES trademark. The defendant, Red Paralela SL (for whom Pellisé Abogados acted), imported SCHWEPPES drinks into Spain from other European Economic Area (EEA) countries, most notably from the UK. The plaintiff, Schweppes SL, took action as the exclusive licensee of its sister company, Schweppes International Limited, which owns the Spanish trademark registration for SCHWEPPES.


The imported products were genuine UK-branded SCHWEPPES drinks, but the trademark rights are divided across the EEA, and not (Red Paralela would argue) in the most transparent way. Apparently, in 1999, Schweppes International sold the trademark rights in many EEA countries, the UK among them, to the Coca-Cola Group. However, for some countries, such as Spain, the trademark rights were retained by Schweppes International and licensed within the group, while in yet other countries such as the Netherlands, Schweppes International retained ownership but licensed the rights to Coca-Cola.


The IPKat understands this to mean that in any given EEA country, one can buy genuine SCHWEPPES tonic water, but this might have been produced:

  • by a Schweppes International subsidiary such as Schweppes SL in Spain

  • by Coca-Cola as the trademark owner, as in the UK, with no involvement of Schweppes International or any associated company, or

  • by Coca-Cola as the licensee of Schweppes International, as in the Netherlands


Presumably, Schweppes International can only object to parallel importation in the second of these cases, but the question now raised is whether it should even be able to object in the second case, particularly in view of the "global brand image" issue. Schweppes International promotes a “global brand image” (as the Barcelona Court puts it) which is associated with the United Kingdom, from where the brand originates. The IPKat understands this as referring to the fact that both Schweppes International and Coca-Cola promote the SCHWEPPES-branded products as being in a direct lineage from the invention of the soft drink in 1783 by Jacob Schweppe. 

Confused yet? The IPKat suggests you have a G&T.


The Spanish subsidiary, Schweppes SL, has apparently been pretty successful until now in enforcing this market division between different EEA countries, having successfully brought many infringement actions on the basis of the Spanish registration, obtaining more than forty injunctions and favourable decisions of first instance from different Spanish Courts.


However, in view of the arguments raised by the defendant Red Paralela SL, the Barcelona Commercial Court (nº 8) has decided to refer four questions to the EU Court of Justice. Two of these four questions deal specifically with the limits of the trademark function of origin.


The first question asks:


  • Is it incompatible with Article 36 of the Treaty on the Functioning of the European Union and Article 7.1 of Directive 2008/95/EC and Article 15.1 of the Directive (EU) 2015/2436 for the holder of a trademark in one or more Member States to prevent parallel importation or marketing of products, bearing a virtually identical trademark owned by a third party, from another Member State, when the holder has promoted a global brand image associated to the Member State from which the products intended to be prohibited came?


The second question asks:


  • Is it incompatible with Article 36 of the Treaty on the Functioning of the European Union and Article 7.1 of Directive 2008/95/EC and Article 15.1 of the Directive (EU) 2015/2436 for the holder of a well-known trademark to use it in a manner that generates confusion in the average consumer regarding the corporate origin of the product?


As David & Juan Carlos observe, the answers of the EU Court of Justice to these questions may impose additional burdens on trademark owners with regard to the correct use of a trade mark to fulfil the function of origin. 

The IPKat thinks that Schweppes and Coca-Cola have done a pretty good job in marketing SCHWEPPES as a single global brand ... so much so that until hearing of this case he had no idea that the tonic water sold in Spain was from a different corporate stable than that sold in the UK. Looking at the respective websites would not have cured the IPKat of this misconception, referring as they both do to the same genesis story from 1783. So should a brand owner who sells off the brand rights in some countries be treated differently according to whether the brand continues to be marketed seamlessly to consumers as a single global brand? Is the function of origin of a trade mark fulfilled in these circumstances, and if not, what are the consequences for enforcing the trade mark rights?

Tuesday, 24 May 2016

What does the timing of the US Defend Trade Secrets Act and EU Trade Secrets Directive really mean for companies?

The AmeriKat listening intently to trade secrets
expert, Jim Pooley
With President Obama signing the Defend Trade Secrets Act into law a couple of weeks ago and the imminent adoption of the European Trade Secrets Directive by the European Council (assumingly, see post here), 2016 seems to be the year for trade secrets.  The timing of the two laws could not be more perfect for trade secret owners, not least given the emphatic and helpful statements made by legislators regarding the value and importance of trade secrets to both economies.  Given all the excitement, the AmeriKat has been in continual correspondence with Kat friend James Pooley.  For readers who do not know, James is recognized as one of the world's leading trade secret scholars and practitioners.  His recent induction to the IP Hall of Fame says as much (see here).

James was actively involved in the passage of the US Defend Trade Secrets Act, testifying before Congress on the legislation last year (see previous post here).  So with two new trade secrets laws on both sides of the Atlantic, what does this really mean for companies seeking to protect and enforce their valuable trade secrets?  Here is what James has to say: 
"Do you see synergy for clients in managing their trade secrets on a global basis in light of the two laws?
Secrecy is a right that derives from a promise of confidence, rather than registration with a government. It exists wherever the business relationship does. So companies have always operated internationally to coordinate their disclosures and confidential projects in part based on whether any given country’s laws and courts provided realistic remedies in case something went wrong. The Trade Secrets Directive will improve what has been a patchwork of laws within Europe by providing for minimum standards of protection, making it easier for companies to predictably manage their global information assets. In that sense one could say that the simultaneous appearance of these two laws will allow clients to more closely align their internal protection schemes in the U.S. and Europe.
But given that the misappropriation of trade secrets is now, more often than not, digital with information crossing state and international borders at a click of a button, how far do these laws really go?
I believe that these coincident efforts on both sides of the Atlantic reflect a common concern of business that the global, networked economy relies in part on robust protection for industrial secrets. From the company viewpoint, having one law that supplies equivalent remedies worldwide would be ideal. That’s not going to happen soon, if ever, but in the meantime every step towards harmonization reduces friction and increases efficiency. We’ve already seen substantial work put into the relevant articles of  the Trans-Pacific Partnership agreement (TPP) (Articles 18.74 and 18.78), and I would be surprised if the same focus were not brought to bear in the ongoing Transatlantic Trade Investment Partnership (TTIP) negotiations.

James Pooley
What should European-based companies keep in mind when they now come to enforce their trade secrets under the DTSA? 
Just last December a US jury awarded $75 million to a U.K. company that alleged its secrets had been stolen by Caterpillar, a major U.S. manufacturer. So European companies should not be concerned that they will be unfairly treated in a contest with a US defendant. But they need to be ready for the broad discovery that characterizes US litigation. And in a trade secrets case, the plaintiff often faces a more difficult discovery burden than the defendant, because its “reasonable efforts” in protecting the information will be at issue, along with damage claims that depend on a complex history of its development of the purloined technology. They need to prepare themselves for a much more aggressive fight than is typical of European litigation. That said, European companies that have a well-prepared case can get direct access to facts – through discovery – that may well have eluded them in a domestic lawsuit. 
What about the pleading requirements?  In the UK, litigants can encounter difficulty in particularizing the trade secrets that have been subject to misuse because they do not know the extent of what has been taken.  Even if they do, they are concerned about disclosing highly sensitive information to the very people that they know/suspect of stealing their trade secrets.  Nevertheless, claimants have to particularize their case well enough to be able to survive a strike out or summary judgment application.  
Importantly, the US standard for pleading trade secret cases recognizes that much of what happened will likely be unknown to the plaintiff at the outset; it is enough to have a reasonable suspicion that the misappropriation occurred. Of course, it helps to be very specific in pleading the circumstantial evidence that is known. But there should be no worry about disclosing the trade secrets themselves in a public complaint; this is typically addressed later, and the plaintiff’s description of its secrets will be protected by a protective order, even limiting access to litigation counsel for the most sensitive information,
In circumstances where the claimant doesn't have as much information as they would like to meet the pleading requirements, will the ex parte seizure mechanism under the DTSA assist? Or will the in-built safeguards deter this type of practice?  
The ex parte seizure will seldom be used, because it is so difficult to obtain. And in any event the seized information is provided only to the court in the first instance.  I suspect that extracting it from that process will be more cumbersome than obtaining the information through normal discovery.
Will there be a "long arm" of the DTSA, like there arguably is under Article 3(5) of the European Trade Secrets Directive?  
Regarding the DTSA, one area of interest – both for U.S. and European firms – will be the willingness of federal courts to apply the law to behavior that happens entirely or mostly outside of the U.S. but causes substantial impact in this country. Some have speculated that an existing provision of the Economic Espionage Act (the criminal statute that the DTSA amended to add a civil cause of action) indicates an intent that the law should apply extraterritorially. But that portion of the Economic Espionage Act (18 U.S.C. § 1837) speaks in terms of the “offense” and the “offender,” making it an awkward fit with a civil cause of action. 
The long arm of trade secrets laws...
However, the DTSA expressly requires the USPTO Director to prepare a detailed bi-annual report to Congress on the “theft of the trade secrets of United States companies occurring outside of the United States” (see Section 4).  We can assume that the legislators were focused on that kind of conduct. But in my view, the result in any given case will have less to do with statutory arguments than constitutional questions of in personam jurisdiction that examine the fairness of requiring a foreign defendant to appear in the US.  The DTSA will allow these questions to be put to federal judges who as a group are more experienced with handling international disputes. 
Given this potential for federal judges to wrestle with possible extra-territorial trade secret theft, this might make the US an even more attractive forum for trade secret litigants.  And of course, those big damages awards help....
I expect that European companies would find it attractive to sue in the US to take advantage of our broad discovery rights and generous damages law. And since they would most likely be suing defendants who are physically present in the US and who have allegedly benefited by using the information, there should be no significant jurisdiction issue, even if most of the relevant transactional facts occurred outside the country. 
Returning to Europe, the legislative process there was driven largely by legitimate concerns of industry and policymakers about European competitiveness. But from my outsider’s perspective, the Directive was mistakenly seen by some as a corporate threat to personal liberties and the mobility of labor. The end result, in my view, did not go far enough in guaranteeing robust enforcement, and it also created some extremely broad exceptions. Looking forward, I think the EU eventually will have to confront the fact that a trade secret plaintiff needs access to facts that are usually known only to the defendant. While that doesn’t necessarily require US-style discovery, there should be some way to address that need within the framework of civil law systems.
It seems a shame that the EU Trade Secrets Directive missed a trick, then.   Although I can imagine that many of the same arguments about the threat to personal liberties/mobility of labor would be employed against an introduction of disclosure measures.  However, it must be remembered that sometimes disclosure also shows the opposite - there was no trade secret misuse.  It can cut both ways.  In any event, ever looking for solutions, perhaps given the ongoing IP Enforcement Directive consultation there is scope for amendment so that it applies to trade secrets as well (in particular the measures in Section 2). 
Well, I am certainly no expert in European political procedures, but clearly businesses will not enjoy full practical enforcement of trade secret rights until they have a way to get at important facts that are under exclusive control of the target. Whether that happens by fixing the TS Directive so that it incorporates the Enforcement Directive, or by some other route, I would of course not venture a guess or make a recommendation.
I was intrigued by the recent news of US Steel Corp asking the US government to ban imports of what would be "infringing goods" under the EU Trade Secrets Directive from Chinese steel importers under Section 337 of the Tariff Act of 1930 .  US Steel alleged that Chinese hackers stole their trade secrets. The intersection of cybersecurity laws and trade secrets will be undoubtedly be increasingly important in the future, but will this mean the DTSA and civil recourse will be underused?   
Cyberespionage is one of many ways that secrets leak in the globalized, digitized economy. (More losses occur through careless employees and sloppy management of transactions.) We can expect that as information assets become increasingly valuable and vulnerable, companies will become increasingly sophisticated concerning both loss prevention and the pursuit of remedies after the fact. Although barring importation of tainted goods under Section 337 is one way to deal with trade secret theft, it only works against the goods themselves. If you want to recover damages for loss or prevent further leakage, you need to sue the wrongdoer, and the DTSA will be widely used to do just that.
Thanks, James!"  

Monday, 23 May 2016

Which national laws will UPC witnesses be subject to? And more "fun" questions from the draft UPC Code of Conduct

Sorry, what did you say, Merpel?  
The AmeriKat does not always listen to everything Merpel says and, indeed, even less often when Merpel tries to boss her around (which is frequently).  Nevertheless, it seems someone was listening to Merpel following her post on the CCBE's letter on the draft Code of Conduct for patent practitioners before the Unified Patent Court (see here).  Last week the Preparatory Committee published the current draft of the Code of Conduct (see here).  In the accompanying statement, the Preparatory Committee stated that:
"EPLAW, EPLIT and epi has taken on the task to help the Preparatory Committee develop a draft Code of Conduct for representatives who appear before the Court, as referred to in the Rules of Procedure of the Unified Patent Court. A draft Code of Conduct was presented to the Preparatory Committee at its 15th meeting on 14 of April 2016 where it was in general well received by delegations. Thereafter work has continued and the draft has been further improved. Further work is expected in the coming month before the draft is tabled again at the meeting of the Committee planned for 30 of June."
The Background section of the draft states that it is subject to any additional amendments of the Rules of Procedure.  It continues:
"Some observations in this respect were, however, made with regard to R. 291 (1) RoP while drafting the CoC. R. 291 (1) relates to the exclusion of representatives from the proceedings and, as presently drafted, would seem to compromise the position of both a Client and his/her Representative in ongoing litigation. 
Presently, until any possible future joint disciplinary body is founded, a mechanism for referring such a matter to a relevant body for the respective national lawyers or the epi would seem more appropriate. 
The draft CoC was discussed in the 3rd UPC Expert Panel Meeting in Paris on September 18th, 2015, where valuable feedback was received and thereafter incorporated. The draft Code of Conduct was presented to the full Preparatory Committee at its 15th meeting 14 of April 2016 where it met with general approval from Member States delegations. Furthermore, EPLAW, EPLIT and epi are grateful that experts in particular from IPLA and CCBE proposed amendments to the draft CoC in April and early May 2016, which are equally incorporated in the current version. All this was helpful to further improve the quality and acceptance of the CoC. In the coming weeks, EPLAW, EPLIT and epi will continue discussing the draft with interested parties."
The AmeriKat notes the reference to "under applicable law" in respect to witnesses of fact and party experts (adopted from the Rules).  For example, para 3.1. states:
"A Representative shall ensure that witnesses are at all times fully informed about their obligation to tell the truth and of their liability under applicable national law in the event of any breach of this obligation."
Under the Rules of Procedure, witnesses have a duty to tell the truth.  For example, Rule 175(2) provides that written witness statements shall be signed and include a statement of the witness that "he is aware of his obligation to tell the truth and of his liability under applicable national law in the event of any breach of this obligation.".  Rule 178(1)  provides that before the court hears witnesses, the witness needs to provide a declaration that the evidence they will give shall be the truth. Further, Rule 179(4) refers to the possible sanctions for giving false evidence as follows:
"The Court may decide to report to the competent authorities of the Contracting Member States whose courts have criminal jurisdiction in case of the giving of false evidence on the part of a witness." 
The same rules outlined above with respect to witnesses of fact also apply to experts.  Under Rule 181(2), experts are, when summoned under Rule 177, reminded that the they have a duty to:
  • assist the Court impartially on matters relevant to his area of expertise which overrides any duty to the party retaining him; and
  • be independent and objective, and shall not act as an advocate for any party to the proceedings.
Court appointed experts are subject to their own rules and duties (see Article 57 of the UPCA and Rules 185-189).

To the AmeriKat this immediately begs five questions:
  1. What applicable law is a witness governed by? In the case of experts, this should be relatively straightforward in that they may be governed by the terms of their engagement, but what about witnesses of fact? 
  2. Does paragraph 3.1 of the Code of Conduct mean that a representative has to actually substantively advise witnesses on their liability under applicable national laws (whatever that is)? Might such a requirement be in conflict with the representative's national code of conduct?   
  3. Will witnesses/experts involved in the same action, but subject to different national laws, create an uneven playing field in terms of evidence?  
  4. In relation to criminal offences, how does national criminal jurisdiction even pertain to the conduct of witnesses in the UPC?   
  5. How on earth is this going to work in practice?  

What a fun Monday afternoon research task for someone....Merpel?  Are you awake?  Do readers have any clever solutions?

Are academic publishers liable for ginormous damages?

Who owns the copyright in works created by university faculty under US law is contested, and has recently become relevant with the advent of commercially valuable digital courses created by faculty members. It is also highly relevant for traditional scholarly publishing, however.

Academic cat
Under the "work-made-for-hire" or "work-for-hire" doctrine of US copyright, the rights in "a work prepared by an employee within the scope of his or her employment" are owned by the employer (§ 101 Copyright Act). At first blush, works created by university professors seem to be works made for hire; after all, professors are employees of the university being paid to teach, research and publish. Doubts arise because the works created by professors do not necessarily promote the interests of the employer, but are created without supervision in the pursuit of knowledge and truth. In the 1920s, US courts established a "teacher" or "academic" exemption to the work-for-hire doctrine, but it is unclear whether it has survived the 1976 revision of the Copyright Act (for background see Blanchard, The Teacher Exception, Innov High Educ 2010Strauss, Anything but academic, Rich. J.L. & Tech 2011; Hellyer, Who owns this article?, Law Library Journal 2016). Some decisions post-dating the 1976 Copyright Act have acknowledged the teacher exception, others are silent on the issue, and the Supreme Court has never explicitely addressed it.

Now assume, for argument's sake, that the teacher exception to the work made for hire doctrine does not apply after the coming into force of the 1976 Copyright Act, and universities do own the copyright in the work of their faculty, provided the individual employment contract does not stipulate anything to the contrary. The wording of the relevant § 101 Copyright Act is certainly broad to entertain this possibility. It appears that up to 1990s, most employment contracts with university professors did not address copyright ownership in works created by faculty, but maybe some reader has more insight. So we have a potential 20 year or so window in which the universities, not the professors, own the copyright in the scholarly writings of the professors.

When an academic publisher accepts a work for publication, the author often has to assign the copyright in the work to the publisher, or at the very least grants the publisher a non-exclusive license for publication and distribution. Problem is, "nemo plus iure transferre potest quam ipse habet" - you cannot assign a right you do not own. If the copyright in the work was owned by the university, it is being published and distributed by the academic publisher without the copyright owner's consent.

As some have pointed out - and I unfortunately do not know the original source for this theory - this could potentially expose academic publishers to massive liability. US Copyright law knows statutory damages for copyright infringement of between $ 750 and $ 30,000 per work (up to $ 150,000 in case of wilful infringement, but the publishers here hardly commit the infringement wilfully). Elsevier, the largest scholarly publisher worldwide, publishes approximately 400,000 articles annually, and its archive contains 13 million documents. If for even a fraction of those works it does not have the necessary rights for publication, the statutory damages could exceed not only Elsevier's annual revenue, but global GDP.

Since scientific publishers have been increasing subscription fees for journals to an extent university libraries publicly call "unsustainable" and privately "extortionist", universities may be motivated to sue, if only to increase their bargaining power.

One immediately apparent problem with such a suit, should it be successful, would be the recourse scientific publishers may take to the authors having assigned rights they did not own. Faculty may be in no position to actually compensate scientific publishers for statury damages awarded against the publishers, but universities should be hesitant to throw their faculty under the bus. So we may not be seeing this legal action soon, although I for one would love to see some of the profits of academic publishers being returned to universities.

Never Too Late: If you missed the IPKat last week #Nevertoolate

Busy week last week & missed the IPKat? Don't worry, the 97th edition of Never Too Late is here to bring you up to speed.

Quick! there's still time to catch last
week's IPKat
"Simply" invalid: French trade mark win for M&S in the Tribunal de Grande Instance de Paris

News from the IPKat's friends at Gide Loyrette Nouel of a decision of the Tribunal de Grande Instance de Paris (the French Court with exclusive jurisdiction at first instance in trade mark matters) concerning Marks & Spencer. The decision addresses a number of issues relating to the registrability of descriptive terms in English as European Union Trade Marks and the permissible scope of counterclaims for invalidity and revocation for non-use. Katfriend Emmanuel Larere explains.

Two upcoming events

Darren Smyth brings you news of two upcoming events:

1. IBC Legal's Biotech & Pharma Patenting Conference 2016 taking place on 23-24 June 2016 in Munich. You can see the agenda and book through this link, which also includes a 20% discount for IPKat readers.

2. UNION-IP's summer champagne reception on 29 June 2016 at the Royal Society. You can see the flier of the event here. Baroness Neville-Rolfe, Minister for Intellectual Property, will be speaking.

Does Mr Justice Birss' decision in Positec finally signal the end of disclosure in obviousness cases in the UK Patents Court?

The AmeriKat was so busy meowing about last week's case management decision of Mr Justice Birss in Positec v Husqvarna [2016] EWHC 1061 that she forgot to write about it. Why the interest? Well, it has to do with a long-standing and "notorious" point in English patent law - disclosure.

IPEC or bust? High Court refusing to deal with IP claims with a value of less than £500,000

We all know that the Chancery Division is changing and modernising in a number of ways. The changes are not just changes to fee structure but also the transfer and triage processes introduced by the new Chancery Guide and how these are being deployed in practice. Could this lead to an overburdening of IPEC, and is the Chancery Division out of step with other divisions of the High Court when it comes to transfer? A thoughtful piece, penned by Katfriend James Sweeting, Senior Associate at Lewis Silkin.

Federal Circuit Distinguishes Enfish in New Patent Eligible Subject Matter Decision

The patentability of computer-implemented inventions has been in doubt in the United States since the U.S. Supreme Court decision Alice Corp. v. CLS Bank. However, the recent Enfish v. Microsoft case provided some hope to those who favor patentability of computer-implemented inventions. Now, Mike Mireles brings you up to date with a new case - TLI Communications v. AV Automotive, et al. - that may shed further light on the matter.

Evidence Based Policy Making – Beliefs and a Book

Nicola Searle questions the sanctity of evidence-based policy making (EBPM) in her review of Paul Cairney’s new book “The Politics of Evidence-Based Policy Making.”

BREAKING: Mr Justice Green rejects judicial review challenge to UK's tobacco plain packaging law

Annsley Merelle Ward brings you the highlights as Mr Justice Green hands down his 386 page decision in Tobacco Packaging [2016] EWHC 1169 rejecting applications for judicial review brought by several of the world's tobacco manufacturers in respect of The Standardised Packaging of Tobacco Products Regulations 2015 - the plain packaging rules - which have just come into effect in the UK.

The IPKat IP Limerick Competition 

Darren announces the IPKat limerick competition.

Friday Fantasies
http://ipkitten.blogspot.co.uk/2016/05/never-too-late-if-you-missed-ipkat-last_23.html

India's new intellectual property policy - Paramount Pictures opposes trade mark application by shoe emporium - IP gets a mention in the Queen's speech - AIPPI Trade Mark reform seminar - WIPO's roving seminar takes them to France - Fancy contributing to the Kat?

PREVIOUSLY ON NEVER TOO LATE

Never too late 96 [week ending on Sunday 15 May] Takedown request tactics in Italy | Wines, spirits, cheese & GI infringement | EU report on GI infringement published | Merpel on latest developments at EPO | Does UPC spell disaster for the EPO boards of appeal? | Andy Grove: in memoriam | Friday Fantasies | Has Federal Circuit revived computer-implemented inventions? | AIPPI event on EU trade mark reform | Ex Deep Purple member registers band name as trade mark | Copyright in the telephone directory

Never too late 95
 [week ending on Sunday 8 May] The Economist presents an anti-patent narrative (and is set straight) | UPC Code of Conduct | Period of compensation for trademark violation - Advocate General Wathelet's decision in C-280/15 'Nikolajeva' | Independent Fashion and IP | Italy approaches UPC ratification | Creative franchising copyright - notably of the Klingon language | ITMA discussion of the Trunki decision | IP Challenges in Bio-Pharmaceuticals | Tobacco Products Directive is valid, according to CJEU | Universal Music score summary judgment against IFP


Never too late 94 [week ending on Sunday 1 May] - Vantablack: is it possible to have rights over a colour? | Anne Frank's diary & geoblocking | Magic Leap lampoons Google Glass | Arnold's decision in Richter Gedeon Vegyeszeti Gyar RT v Generics| US Trade Secrets Act passes House | Publishing and the Machine| DSM Communication on Platforms leaked!| Google Books legal saga ends | s52 CPDA repeal comes into force 28 July 2016 | The latest Jack Wills v House of Fraser judgment


Never too late 93 [week ending on Sunday 24 April] - No UK judges in the UPC? | Young EPLaw Congress | EU Commission SPC update | Technical teach-ins for judges | Patentability of user-interface designs | Trade Secrets and Copyright Pre-Emption | Austro-Mechana v Amazon C-572/14 | Lay-offs at Intel | Trade Marks and Cadbury | Shakespeare's Cultural Capital | Geo-blocking and competition law

"Cybersecurity" Directive makes European Council appearance, but where is the Trade Secrets Directive?

The AmeriKat can confirm - the EU Trade Secrets
Directive is NOT under the couch...
....but there are some dust bunnies
Nothing drives the AmeriKat more crazy than when things or people go AWOL.  Thus, her fur bristled when the 17 May came and went but no big Council press release concerning the adoption of the EU Trade Secrets Directive that was passed by the European Parliament last month (see Kat posts here).

Instead, the European Council adopted the Network and Information Security (NIS) Directive during its first reading.  The NIS Directive provides that operators of critical IT services (think energy, transport, health and finance) meet certain security obligations.  Who falls within this category will be determined by each Member State, whereas digital service providers (such as search engines and cloud services) will be directly subject to the Directive.  Member States are also required to cooperate in sharing information when tackling cybersecurity threats.  The Council press release states:
"Each EU country will also be required to designate one or more national authorities and to establish a strategy for dealing with cyber threats. 
The Netherlands presidency together with the EU Agency for Network and Information Security (ENISA) has already started preparing the implementation of the directive. A first informal meeting of the network of Computer security incident response teams (CSIRT) set up under the directive took place in The Hague on 5 April, followed by a second meeting in Riga on 10 May."
The NIS Directive will go back to the European Parliament for a second reading, thereafter it is expected to enter into force in August (which is an auspicious time given most of Europe is on holiday...).

This follows US efforts to tighten up cybersecurity, including the signing into law last December of the Cybersecurity Act of 2015 (with a focus on collaborative regimes, like the NIS) and President Obama's announcement this year of the Cybersecurity Action Plan and a new Federal Chief Information Security Officer position.  Japan is also working on its own three-year Cybersecurity Strategy and is planning to update its Cybersecurity Law.

The simultaneous global efforts in improving cybersecurity and trade secrets are no coincidence, of course.   This month, the UK Government published the "Cyber Security Breaches Survey 2016" which found that 65% of large firms detected a cyber security breach or attack in the past year. Over half (55%) of firms also reported that they stored at least some commercially confidential data on cloud servers.  Commercially confidential information stored on site and in the cloud is likely to contain a company's trade secrets.  Therefore, the risk of cyberattacks is not just a risk of data loss and disruption, but a risk of trade secret theft.  Indeed, top finance officials from the G7 met recently to discuss the issue.

So, the AmeriKat is sticking with her prediction that although 2017 may be the year of the UPC, 2016 will be remembered as year of trade secrets and cybersecurity.  But just where, oh where is that final EU Trade Secrets Directive text?  The IPKat (@IPKat) has, this evening, asked the EU Council where it is.  We will see if he gets an answer.  In the meantime, if readers have any inkling (or if it is hiding in some dark corner of the EU Council website), do let the IPKat know at theipkat@gmail.com.

Friday, 20 May 2016

Friday Fantasies

 The IPKat, India bound
India's new Intellectual Property Policy. The IPKat has been racking up the airmiles over the past week, investigating the Indian government's new IP policy. The policy promises to streamline the processes for applying for trade marks and patents and establish specialist courts for IP disputes.  The policy lists several key objectives, including:
  • To modernize and strengthen IPR administration.  In particular, Finance Minister Arun Jaitley has pledged to reduce the time period for registering a trade mark to one month by 2017.
  • To strengthen the enforcement and adjudicatory mechanisms for combating IPR infringements.   
Many thanks to Katfriend R.S. Praveen Raj, a former patent examiner for the Indian government, for informing the IPKat about this development. You can read the full policy here.


Paramount Pictures opposes trade mark application by shoe emporium:  Paramount says it has been using its trade mark since 1972. The Sneakerdon applied to register its trade mark in the US in August 2015. Paramount Pictures has opposed Sneakerdon's application. Sneakerdon may try the parody defence, but this is always a difficult argument before the USPTO. It may be that that Snearkerdon's application will shortly be resting with the fishies.... 






IP gets a mention in the Queen's Speech:  At the State Opening of Parliament, the Queen announces the laws that the government hopes to get approved by Parliament in the coming year. This year's speech, given earlier this week, promised to bring in a new bill to tackle unjustified threats relating to IP rights.  Yesterday, Baroness Neville-Rolfe, Minister for IP, introduced the Intellectual Property Unjustified Threats Bill in the House of Lords (track the status of the Bill here).  According to the IPO's e-mail update the Bill will:
She who wears the crown,
said very little about IP
this year....
"help create an IP environment that favours negotiation and settlement rather than litigation. It proposes changes that help clarify the existing provisions making the provisions more consistent across the relevant IP rights - patents, trade marks and designs."
Key elements of the Bill include:

• protecting retailers, suppliers and customers against unjustified threats
• bringing the law for trade marks and designs into line with that for patents by allowing a rights holder to challenge someone who is a primary actor without fear of facing a groundless threats action
• protecting professional advisers from facing personal legal action for making threats when they act for their clients
• making the necessary changes to threats law so that the protection against unjustified threats can apply to European patents that will come within the jurisdiction of the Unified Patent Court
Thanks to Robert Watson at Mewburn Ellis LLP for spotting this in the Queen's Speech and Vicki Salmon (IP Asset) for flagging the IPO's statement.  If you have any questions please feel free to email them to IPUnjustifiedThreats@ipo.gov.uk

AIPPI Trade Mark Reform seminar:  
As summarized in the guest post earlier this week, AIPPI's seminar on the Trade Mark Reforms elicited a great deal of debate and discussion.  If this left you wanting more, you can delve back into the detail of the evening via a guest contribution from Alex Woolgar (Allen & Overy) which has been posted on the MARQUES Class 46 blog here.

WIPO's roving seminar takes them to France:  The IPKat is pleased to announce an excellent (and free) opportunity to learn about WIPO and network with like minded professionals at two events being held in France - the first in Paris (7 June 2016) and the second in Lille (9 June 2016).  Presentation and event materials will be in French. For more information and to sign up click here.

Fancy contributing to the Kat. Be it by Guest Post or Comment, have a quick read of our policies here and get writing/commenting.

The IPKat IP Limerick Competition

Readers with a keen eye on their diaries will have noted that we have had in rather short succession World Intellectual Property Day on 26 April and National Limerick Day on 12 May.  The IPKat has decided to merge the two, and wishes to announce the running of an IP Limerick Competition.

To get readers in the mood, he will offer his own piece, which was in turn prompted by one from his friends at Managing Intellectual Property, whose opening lines he stole borrowed was inspired by.

The judges at the Supreme Court
Don’t always do what they ought
And so they malign
A breakthrough design
Whose representations fall short.

This pays homage to the recent Trunki decision, reported by the IPKat here.

So, for this competition, contestants are invited to contribute a limerick on the subject of a decision from a supreme court (or similar - including CJEU and Bundesgerichtshof*) in any country in the the world on any intellectual property or related matter.  The limerick should conform to the traditional aabba rhyme pattern of the example above and at least pay homage to the customary scansion. The submission should also include a reference to the case being referenced, and a very brief (50-100 words) precis of its subject matter.  Please identify yourself in your submission - anonymous submissions will be disregarded.   (*the IPKat realises that this will offend purists, but is adopting a purposive construction)

Please email your submissions to ipkatlimerick@gmail.com  Submissions made elsewhere (eg in the comments section of this post) will not be considered in the competition.

It is up to you whether you wish to complimentary or disparaging of the judgment concerned.  UK-based readers may wish to bear in mind that while scandalising the judiciary no longer constitutes contempt of court in England and Wales, the IPKat seems to recall that murmuring judges is still an offence in Scotland.

Submissions will be judged according to arbitrary and undisclosed criteria by this Kat and a volunteer from Managing Intellectual Property.  MIP has also kindly agreed to donate the prize, which will be one complimentary place at a Managing IP event of the winner's choice within the next 12 months.  This will include catering and CPD, but will exclude travel and accommodation expenses.

The deadline for submissions is 23 June 2016 - the same day as the UK vote on whether to leave the EU, to help you remember.

Authors will retain copyright in their submissions, but, by submitting their entries, grant the IPKat a licence to publish on this blog any entries that he chooses, including the winner and runners up. They will then be subject to the usual IPKat Creative Commons licence (see the IPKat sidebar).

Thursday, 19 May 2016

BREAKING: Mr Justice Green rejects judicial review challenge to UK's tobacco plain packaging law

The AmeriKat's version of plain packaging....
This morning Mr Justice Green handed down his 386 page decision in Tobacco Packaging [2016] EWHC 1169 rejecting applications for judicial review brought by several of the world's tobacco manufacturers in respect of The Standardised Packaging of Tobacco Products Regulations 2015  - the plain packaging rules - which are set to come into effect in the UK tomorrow.

The Regulations were introduced, in part, to the policy established by the World Health Organization (WHO) in the Framework Convention on Tobacco Control (FCTC).  The FCTC provided a series of measures that contracting states were encouraged to adopt, including the prohibition on advertising on packaging and upon tobacco products (refereed to in the judgment as "standardized packaging" or commonly referred to as "plain packaging" - see Kat posts here).  The decision summarizes this provision as follows:
"At base it involves a substantial limitation being imposed upon the ability of manufacturers to advertise or place branding upon the outer packaging or the tobacco product itself. The Regulations do not however involve all tobacco products being sold in a homogeneous, undifferentiated manner. The manufacturers can still place the brand name and variant name upon the box and in this way they can still communicate their identities to consumers and differentiate themselves from their competitors. But the manner in which the name and brand may be used is highly regulated in order, in effect, to strip away as much of the attractiveness of the branding or advertising as possible."
Directive 2014/40/EU (the TPD) is the European legislation that implements the mandatory part of the FCTC.  The Directive required certain restrictions to be introduced into Member States' laws in respect of the labelling and packaging of tobacco products.  The TPD introduced a series of prohibitions relating to the presentation and appearance of different products.

Australia was the first country to introduce plain packaging restrictions.  Giving evidence in this case, the Australian Government stated that, as confirmed by their post-implementation review, the legislation is working well, with data demonstrating that the measures were having a desired effect on the prevalence and use of tobacco in Australia.   The UK Regulation was introduced without the benefit of the analysis of the Australian evidence on the basis that the UK Parliament considered that there was a real risk to public health and welfare if there was a delay in introducing the Regulation pending a full-blown analysis of the Australian evidence.   Based on the evidence available, the UK Parliament felt that the measures in the Regulation would be effective.

The Grounds

The manufacturers contended that the Regulations were unlawful under international, EU law and domestic in numerous respects. Mr Justice Green consolidated these arguments into 17 Grounds of Challenge.  Most of the the Grounds will be of interest to trade mark lawyers.  In particular, in relation to Grounds 6-8  - Non-expropriation of property without compensation -the judge summarized his findings as follows:
"I reject the submission however that the rights have been expropriated. Title to the rights in issue remains in the hands of the tobacco companies; the Regulations curtail the use that can be made of those rights but they are not expropriated. Indeed, the rights remain important in the hands of the tobacco companies because the word marks can still be used on packaging and will serve their traditional function as an identifier of origin. I accept that the figurative marks cannot be used in this manner but they still have certain, admittedly very limited, vestigial uses, which the Regulations do not curtail. Further the restrictions imposed pursue a legitimate public health based interest; a conclusion not challenged by the Claimants. These two factors (retention of title and measures imposed for legitimate public interest reasons) are in large measure sufficient to defeat in law the submission that the rights have been expropriated." 
What does a trade mark actually do - exclude or use?

Diving into this finding, you will find an interesting section on the judge's analysis on how to define a trade mark right - is it a negative right to exclude or a positive right to use?  The decision goes through a long analysis of the case law on the nature of trade mark rights.  Counsel for the Secretary of State argued that it is a negative right.  Because the Regulation merely limited the "use" of trade marks they did not strip away the trade mark owner;s right to prevent or exclude others from using their mark (citing Arnold J in Pinterest v Premium Interest).

Counsel for the manufacturers said that this position was artificially narrow in that it did not look at the "essence" or "substance" of a trade mark, since the real value of a trade mark for the purposes of Article 1 of the First Protocol of the ECHR is in its commercial exploitation (i.e. its use).  A trade mark would be an "economic hollow shell" if it could not be so used.  The "substance over form" analysis was the relevant test when looking at the Charter.  Under the Regulation, symbol or figurative marks could no longer be used at all either on packaging or on the tobacco products themselves, whereas the name trade marks could at least be used albeit only in a highly circumscribed manner.  Counsel for the manufacturers also cited the High Court of Australia's decision in JTI International v Commonwealth of Australia where the court accepted that the Australian measure had, in respect of the trade mark rights:
“rendered useless for all practical purposes”, according to Heydon J, at 216); and on the basis that “rights to exclude others from using property have no substance at all if use of the property is prohibited” (according to French CJ, 37); and that “each property right conferred included a right of use by the owner” (according to Heydon J at 216); and/or that the owners’ proprietary rights included “the right to turn the property to valuable account by licence or assignment” (Crennan J at page [264]. 
Mr Justice Green concluded at [744] that:
"It follows that in delineating the property rights in issue a Court is not confined to the narrow and legalistic task of identifying and “classifying” what the bare minimum legal essence of the right is.  And as to practical, real world, substance it is clear, and was not in fact disputed by the Secretary of State, that the economic value of a trade mark lay in its use as well as its ability to exclude. In particular, the commercial value of a trade mark lay in its ability to forge links of recognition or identity and reputation in the mind of consumers. The Claimants adduced a substantial body of evidence on this which included evidence of international transactions where trade marks had accounted for a significant portion of the consideration paid."
Even so, Green J concluded that the substance of the rights have not been wholly destroyed, although he did accept that they had been "significantly and even substantially diminished".  At [745] he held:
"On the contrary the rights retain important functions. Regulation 13 explicitly protects against revocation for non-use and preserves the rights attached to registration and hence the right to prevent others from using the trade marks in an unauthorised manner. This is not, as was submitted, an illusory or fictitious exercise; on the contrary the Regulations permit tobacco companies to both place their name and the brand name on the packaging. As such the trade marks still serve their core function as an identifier of origin."
In his summary of the decision, Green J stated that:
"I accept that the Regulations do substantially limit and restrict the use of those rights but they do so for entirely proper and legitimate reasons and they do so striking a fair balance between the right to property and opposing public health interests and rights.  I have in this regard rejected the contention that the tobacco companies should entitled to any compensation at all.  I cannot see any logical or rational basis for imposing upon the State a duty to pay compensation to the tobacco companies for ceasing to engage in an activity which facilitates a health epidemic and imposes vast costs upon the state.
...
When one stands back from the immense detail of these challenges, as the Secretary of State submitted during the hearings, the essence of the case is about whether it is lawful for States to prevent the tobacco industry from continuing to make profits by using their trade marks and other rights to further what the World Health Organisation describes as a health crisis of epidemic proportions and which imposes an immense clean‐up cost on the public purse.
In my judgment the Regulations are valid and lawful in all respects.   
There is no basis upon which I could or should strike down the Regulations or prevent them coming into effect tomorrow. "
This judgment follows the CJEU's decision earlier this month holding that the TPD is valid (see decision here).  The AmeriKat plainly has not read all 386 pages of the decision in detail, so imagines that there will be a wealth of further analysis on the decision to come and its bearing on trade mark law and principles.  In the meantime, Reuters is reporting that BAT is planning to appeal the decision, whereas Philip Morris has not (see press release here).  

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