AIPPI Report: Are you sitting comfortably? Mellor QC recounts soft IP's 2013 "unfinished business"

The AmeriKitten transfixed
by the summer rain
against her window pane

On a rainy June afternoon last week, raincoat-clad IP lawyers and AIPPI members made their ways to the offices of Allen & Overy, to hear James Mellor QC’s round up of the big ‘soft IP’ judgments of last year. Joined on stage by His Honour Judge Hacon, Mr Mellor QC took the audience through some ‘unfinished business’ and noted some take home points from the rest of 2013. The AmeriKat is grateful to A&O's eloquent trainee, Rachel Fitzgerald, who with pen in hand summarized Mellor's round-up for the Kat's readers. Rachel reports:

"Turning first to the landmark CJEU exhaustion decision in UsedSoft (C-128/11)(the ‘unfinished business’ from the AIPPI round-up of 2012 cases, and the facts of which you can be reminded of in this earlier Kat post), Mr Mellor QC noted a willingness on the CJEU’s part, to categorically ignore the Software Directive’s express reference in Article 5 to ‘specific contractual provisions’, in favour of looking at the transaction as a whole. This meant that, despite express provisions in Oracle’s licences granting for “an unlimited period, a non-exclusive, non-transferable user right”, because it was decided that the original licencing arrangement constituted a sale under Article 4(2), the distribution right had been exhausted, and the licensee of the ‘spare’ licence capacity, (i.e. the second acquirer), was a lawful acquirer under Article 5(1). In this decision (which has been labelled by many a ‘results based decision’), it clearly did not matter to the CJEU that the original licence was non-transferable. Furthermore, it was made it clear that Article 4(2) is not limited to tangible copies, but applies equally to intangible copies, including where the copy is sold as corrected and updated by the copyright holder.

A recap on hyperlinking and communication to the public came next, in light of the Svensson decision (C-466/12), where it was held that while provision of clickable links to protected works is an act of communication to the public, the communication must be directed at a new public in order to fall within Article 3(1) of the InfoSoc Directive. Hyperlinks to protected works made freely available on the internet do not infringe the copyright subsisting in the protected works, unless the hyperlink gives users a method by which they can circumvent access restrictions to the work (e.g. subscription access), because then the work is being made available to a new public, i.e. consumers not considered by the copyright holder. Mr Mellor QC thought that the decision was fair, but warned that the judgment highlights the possibility that the “long arm of digital copyright extends to end users who may re-tweet material including links etc. without having the ability to check whether they may be infringing copyright”.

After referring those of us keen to understand the distinction between trade evidence and expert evidence to the Rihanna judgment ([2013] EWHC 1945), Mr Mellor QC addressed whether the Court of Appeal interpreted the “average consumer” correctly in the Interflora v Marks & Spencer judgments ([2012] EWCA Civ 1501 and [2013] EWCA Civ 319). In Interflora I, Lewison LJ held the “average consumer” in cases of trade mark infringement is conceptually different from the substantial proportion of the public test in passing off, and (perhaps incorrectly) assumed that to pinpoint the “average consumer” means to take a statistical view of the results. In an attempt to rectify this point, Mr Mellor QC referred the audience to the Gut Springenheide case (Case C-210/96) and the Court’s decision that “the national court must take into account the presumed expectations which it evokes in an average consumer who is reasonably well informed and reasonably observant and circumspect”. This notion of the average consumer as a reasonable consumer rids us of the vulgarity of a statistical calculation of the average, while at the same time allowing to exclude outliers. Mr Mellor QC pointed out that following this more useful interpretation of who the “average consumer” is, there is perhaps very little difference between the tests for passing off and likelihood of confusion after all.

Another issue in Interflora II was raised: the use of surveys as evidence in trade mark infringement cases. According to Lewison LJ, whether survey evidence should be admitted at all, comes down to whether the court is satisfied that the evidence is (a) likely to be of REAL value; and (b) that the likely value of the evidence justifies the cost (bold caps courtesy of Lewison LJ). Inevitably, this assessment will mean that survey evidence is not as useful as it may have once been, but as Sir Robin Jacob said in his judgment in the same case, the survey is not completely dead, as it is still “possible to conduct fair surveys and they may indeed lead to witnesses of value”.

Mr Mellor QC rounded off the evening by sneaking in a 2014 offering. In the Betty Boop trade mark judgment handed down by by Mr Justice Birss in February ([2014] EWHC 439), it was held that A.V.E.L.A. had infringed UK and Community Trade Marks and committed acts of passing off. The judgment (which topically makes a distinction between three classes of average consumer), makes for an interesting read in itself, but for a reminder of the juicy bits, the IPKat post from February can be found here.

The AmeriKat sadly had to duck out of the closing of Mellor's remarks, but she did note that gone seem to be the days when there used to be innumerable references and decisions to and from the CJEU in trade mark cases that practitioners would have to grapple with (copyright references are of course a different story!).   Nowadays, things seem to have calmed down a little bit, with a handful of key decisions in 2013 to digest.  However, that does not mean to say all is well and resolved in the non-patent IP world.  For example, that knotty issue of evidence in trade mark proceedings seems to be a prime candidate for some further attention from the English courts in 2014.  Watch this space!