‘Leave all love and 'ope behind, out of sight is out of mind’

Authors: Alex Batteson and Ian Karet (Linklaters)

Citation: Journal of Intellectual Property Law 2009, doi:10.1093/jiplp/jpp173

Folding Attic Stairs Limited v The Loft Stairs Company Limited [2009] EWHC 1221 (Pat) 9 June 2009

The Patents Court (England and Wales) considered the terms ‘preset’ and ‘predetermined’ and interpreted the expression ‘made available to the public’ under Article 54 European Patent Convention (‘EPC’).

Legal Context

Construction of patent claims

In Kirin-Amgen Inc v Hoechst Marion Rousell Ltd [2004] UKHL 45, Lord Hoffmann said:

48. The Catnic principle of construction is therefore in my opinion precisely in accordance with the Protocol. It is intended to give the patentee the full extent, but not more than the full extent, of the monopoly which a reasonable person skilled in the art, reading the claims in context, would think he was intending to claim.

Anticipatory disclosures

Article 54 EPC states:

(1) An invention shall be considered to be new if it does not form part of the state of the art.

(2) The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application. ...

Facts

Folding Attic Stairs (FAS) owned a patent for a process for manufacturing a folding attic stairway. It sued The Loft Stairs Company and its owner for infringement; the defendants counterclaimed for revocation on the grounds of anticipation and obviousness.

The technology concerned stairways for accessing roof spaces or attics of buildings. In their simplest form, these stairways involve the insertion of a generally wooden and rectangular frame within an aperture or ‘ope’ created between the ceiling joists. The following example (not specifically cited as prior art in the proceedings) was employed by the deputy judge as an illustration:

The stairway is provided in three hinged sections. The uppermost is fixed to a trapdoor, being hinged to the frame and spring-biased towards it by means of folding metal support arms. When not required for use, the stairway is folded up and the metal arms force the folded stairway into a nesting position above the ope. The arms also act as a counterbalance when folding and unfolding the stairway.

The widths between ceiling joists, and therefore the ope widths that need to be accommodated, vary from building to building. Rather than manufacture the stairways with varying widths to fit each type of ope width that might be encountered, which would have been too expensive, the prior art settled on a standard width and adjusted for the difference by bending the metal support arms. A problem with the prior art was a limit to the width that could be tolerated by bending. If the ope width departed too far from the standard, the arms were unable to operate freely and more strain was applied to them, eventually leading to failure of the pivot joints. The patent sought to solve these problems as follows:

It introduced an ‘inner frame’ [in addition to the ‘outer frame’ (6) which remained inserted in the ope] and attached the metal support arms (19) to the long sides (or side beams) (14) of the inner frame rather than the top section of the stairway (30). Thus, the width of the inner frame could be varied during the course of manufacture to accommodate various ope widths by varying the length of the end beams (16, 17) of the inner frame. This avoided the need to bend the metal support arms. The key point was that the stairway could remain of standard width.

Claim 1 of the patent reads (emphases supplied by the deputy judge):

A manufacturing process for manufacturing a folding stairway comprising the steps:

forming a rectangular outer mounting frame for complementary engagement and mounting within an associated rectangular ceiling ope of a predetermined size, the outer frame having a pair of spaced-apart side members interconnected by end members extending between associated ends of the side members;

forming an inner stairway carrying frame for pivotally mounting on the outer frame for movement between a nesting position within the outer frame and a downwardly extending in-use position hanging downwardly from the outer frame, the inner frame having a pair of spaced-apart side beams interconnected by an associated pair of spaced-apart end beams, connecting the side beams to the end beams such that each side beam is spaced a preset distance inwardly of the side members of the outer frame when the inner frame is mounted within the outer frame in the nesting position;

preparing an extendable stairway which is foldable between a collapsed stored position for nesting within the outer frame and an extended in-use position;

mounting the inner frame within the outer frame by securing a hinge between an outer frame end member and an end beam of the inner frame thus pivotally mounting the inner frame on the outer frame;

mounting a folding support arm between each side beam on the inner frame and an associated side member on the outer frame, each arm being pivotally mounted on each frame and being foldable intermediate its ends between an extended position corresponding to the downwardly extending in-use position of the inner frame and a folded position corresponding to the nesting position of the inner frame,

each arm having bias means for urging the arm towards the folded position for retaining the inner frame in the nested position within the outer frame; and

mounting an inner end of the stairway between the end beams on the inner frame such that the stairway is foldable between the collapsed and extended positions when the inner frame is in the in-use position.

Analysis

Claim construction

The deputy judge summarized the claim as follows (emphasis transposed from that applied to the full claim above): a manufacturing process for making folding stairways in which you

make an outer frame ‘for complementary engagement and mounting within’ a given ceiling ope,

make an inner frame (for carrying the stairway) by connecting side beams to end beams ‘such that each side beam is spaced a preset distance inwardly of the side members of the outer frame’,

make a foldable stairway that can nest within the outer frame,

hinge one end of the inner frame to one end of the outer frame,

mount spring-biased foldable support arms, one end pivoted to the side beam of the inner frame, the other end pivoted to the side beam of the outer frame, and

mount one end of the stairway between the end beams of the inner frame so that it can fold up in use.

The deputy judge held that a ceiling ope of a predetermined size meant the size of the given ope in which the stairway was to be fitted; effectively, an ope of a size predetermined by the house-builder. He distinguished Nikken Kosakusho Works v Pioneer Trading Company ([2005] EWCA Civ 906), in which Jacob LJ expressed surprise that the words ‘annular groove of predetermined depth’ could appear in a patent claim because the expression begged the question. He did not believe that Nikken criticized the use of the word ‘predetermined’ as such, not least because the words ‘predetermined’ and ‘preset’ very frequently appeared in granted patent claims. In Nikken, it was impossible, even following a reading of the patent as a whole, to deduce the purpose of having a groove of predetermined depth and according to which criterion the depth fell to be predetermined.

Spaced a preset distance meant that the separation between the side beams of the inner (14) and outer (6) frame, respectively, was chosen by the manufacturer (or one to whom he left the decision) with the aim of coping with various ope widths while avoiding excessive bending or cranking of the metal arms. Such a construction would be reasonably certain for third parties: a third party manufacturer would know whether he infringed the claim if he was presetting the distance between the respective side beams himself (in order not too bend the arms too much).

The judge rejected the idea that words of intent should not be used in patent claims. There was nothing in the EPC to support such a proposition. Moreover, the burden would be on the patentee, not the third party manufacturer, to prove the necessary intent. The deputy judge drew an analogy with so-called ‘Swiss-style’ claims in the form ‘use of a known ingredient X for making a medicine for treating disease Y’. He suggested that this really meant use of X with the intention of treating disease Y. If that was permissible in pharmaceutical cases, he saw no reason why it should not be in other industries.

Anticipation

FAS had invited an Irish Government Minister and a newspaper photographer to its factory in order to publicize a recently obtained business accreditation. The visit took place before the priority date of the patent. A prototype of the invention was on display in the factory on the day of the visit. A photographer took a photograph of the owner in front of the prototype; this was subsequently published in a newspaper, again before the priority date of the patent.

The deputy judge found as a fact that the photographer and Minister ‘could have gazed at all parts of the prototype’ if they had wanted to and were free to do so. The judge also found as a fact that no terms of confidentiality had been imposed on the photographer or the Minister, so that they ‘were free to impart to others whatever they did perceive and were able to recall’. However, it was relevant that there was no evidence that the photographer or Minister had in fact inspected the prototype ‘in any detailed sort of way’ and that it was unlikely that they would have had any interest or motivation to do so.

The publication of the photograph was not an anticipation as it did not depict the prototype in full. The question was what would the skilled person have discerned from the photograph. Given the problem addressed by the patent, the judge held that it was not only a patent for a process for manufacturing folding stairways but, based on a purposive construction, for doing so on a repeat basis. Thus, he identified the person skilled in the art as a manufacturing carpenter. It was necessary to avoid defining the common general knowledge to be attributed to that person too narrowly—there was no recognized profession of designing folding attic stairways. Thus, at the filing date, the skilled person would have been only vaguely aware of folding stairways in general terms; the common general knowledge did not include the prior art. The judge found that the photograph would not have divulged to such a skilled person the need to vary the width of the inner frame in accordance with that of the outer frame. He also held that the disclosure of the prototype to the Minister and photographer did not anticipate the claim. This was because the prototype product could not have anticipated a claim to a manufacturing process since it could not have disclosed to the skilled person the need to vary the side beam spacings.

The judge accepted that if the prototype had been in a public place, for example, a street, where anyone might have stopped to examine it, its design would have been deemed to have been made available to the public. However, the judge decided that the prototype was not in a public place at all. It was relevant that it was available for viewing only by a small and defined class, which was uninterested in manufacturing attic stairs or, moreover, the existence of the prototype (Lux Traffic Controls v Pike Signals [1993] RPC 107 distinguished). If information that is available for viewing in private premises by a small and defined class of visitors is to become part of the state of the art, that information must actually be imparted to at least one human mind which is free in law to divulge it to anyone else. It was not enough that it could have been imparted but was not. There was no irrebuttable presumption that information capable of being perceived by persons on private premises was in fact perceived by them, if the circumstances were such as to make it unlikely that those persons were interested in the subject matter. That would amount to an unnecessary legal fiction. On the facts, the judge found that it was unlikely that either the photographer or Minister would have been able to recall the spaced side beams of the prototype.

Practical Significance

The deputy judge seems to have found it important that the disclosure was on private premises. However, it is not clear how this decision fits with previous decisions. In Lux, Aldous J. said: ‘... it is settled law that there is no need to prove that anybody actually saw the disclosure provided the relevant disclosure was in public’. In G01/92 Availability to the Public [1993] EPOR 241 at 243–244, the Enlarged Board said:

‘There is no support in the EPC for the additional requirement ... that the public should have particular reasons for analysing a product put on the market, in order to identify its composition or internal structure. According to Article 54(2) EPC the state of the art shall be held to comprise everything made available to the public. It is the fact that direct and unambiguous access to some particular information is possible, which makes the latter available, whether or not there is any reason for looking for it. ... The introduction of such an additional requirement would remove a commercially available and reproducible product from the public domain. It would mean an unfounded deviation from the principles applied in respect of the other sources of the state of the art as defined in Article 54(2) EPC and it would obviously represent an element of subjectivity leading to uncertainty in applying the concept of novelty as defined in this Article’.

If correct, this decision appears to introduce state of mind as an element in the question of novelty, which may lead to uncertainty. However, the facts are unusual and cases like this should be infrequent.

Bavaria and Bayerisches Bier may co-exist

Authors: Paul Reeskamp and Eva den Ouden (Allen & Overy LLP, Amsterdam)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp180

Bavaria NV and Bavaria Italia Srl v Bayerischer Brauerbund eV, Case C-343/07, Court of Justice of the European Communities, 2 July 2009

Bavaria NV is allowed to use its pre-existing trade marks containing the element ‘Bavaria’ and co-exist with the geographical indication ‘Bayerisches Bier’, provided that those trade marks do not infringe the geographical indication, are registered in good faith and are not subject to any grounds of invalidity or revocation provided for by harmonized European trade mark law.

Legal Context

On 14 July 1992, the European Commission adopted Council Regulation 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs (the ‘GI Regulation’). To be protected under this regulation, an agricultural product or foodstuff must comply with certain specifications as specified in Article 4, evidence that the agricultural product originated in the geographical area details bearing out the link with the geographical environment etc. According to the simplified procedure of Article 17, Member States should have notified the commission, within 6 months of the entry into force of that Regulation, which of their legally protected names or, in those Member States where there is no protection system, which of their names established by usage, they wish to register under that Regulation.

The German authorities notified the name ‘Bayerisches Bier’ within the stated time limit. This name was also already protected through bilateral agreements between Germany, France, Spain, Italy, and Greece. The Commission subsequently adopted Council Regulation 1347/2001 (the ‘Bayerisches Bier Regulation’) as an annex to the GI Regulation to conclude that ‘Bayerisches Bier’ should be protected as a geographical indication in accordance with the GI Regulation.

The main question in the proceedings between Bavaria NV and Bayerisches Brauerbund (BB) was whether Bavaria was allowed to use the pre-existing trade mark BAVARIA, or pre-existing trade marks containing the element ‘Bavaria’, taking into account that the name ‘Bayerisches Bier’ is a protected geographical indication (‘PGI’) under the GI Regulation.

Facts and Analysis

BB, a German association, had the objective of protecting the common interests of Bavarian brewers. Its statutes dated from 1917; since 1968, it was the proprietor of the registered trade marks BAYERISCH BIER and BAYERISCHES BIER.

Bavaria NV, a Dutch brewing company operating on the international market, began using the name ‘Bavaria’ in 1925; that word became part of its name in 1930. Bavaria owned several trade marks containing the element ‘Bavaria’ (‘the Bavaria trade marks’). Bavaria Italia, also a party to this proceeding, was part of the Bavaria group (Bavaria NV and Bavaria Italia are referred to as ‘Bavaria’).

After the German authorities informed the Commission of the application to have ‘Bayerisches Bier’ protected as a geographical indication, a number of Member States filed an objection, specifically with regard to the pre-existence of trade marks including the term ‘Bayerisches Bier’ or translations of it, and expressing the opinion that the term ‘Bayerisches Bier’ or its translations had become generic. After investigation, the Commission concluded that these arguments were unfounded and adopted the Bayerisches Bier Regulation. Bavaria did not bring an action against this regulation.

Subsequently, BB brought an action before the District court in Turin, to stop Bavaria using the Bavaria trade marks. BB sought an interlocutory injunction declaring those marks invalid or revoking them, on the ground that they infringed the PGI ‘Bayerisches Bier’. BB considered that Bavaria misled the public since the Bavaria trade marks contained a geographical indication referring to Bayerisches beer while the Bavaria beer itself was Dutch. The District Court partly granted the action of BB against Bavaria. Bavaria appealed against this judgment. The Court of Appeal referred two questions for preliminary ruling to the European Court of Justice (ECJ).

First question

Is the Bayerisches Bier Regulation invalid, possibly as a consequence of the invalidity of other acts, in the light of a possible breach of general principles, a failure to comply with procedural requirements or a failure to comply with substantive requirements?

With regard to the first question, the ECJ considered that no factor was disclosed which affected the validity of the Bayerisches Bier Regulation. Two issues arising are, however, worth mentioning.

In this context, the issue was raised whether the term ‘Bayerisches’ had become generic. Only if the link between the reputation of Bavarian beer and its geographical origin had disappeared could this be the case, said the ECJ: the mere presence on the market of trade marks including the word ‘Bayerisches’ did not automatically mean this link had disappeared.

Secondly, based on Article 14(3) GI Regulation Bavaria is of the opinion that the PGI ‘Bayerisches Bier’ should not have been registered since their Bavaria trade marks are well known and have been used for a long time. According to Bavaria, the PGI ‘Bayerisches Bier’ is therefore liable to mislead consumers as to the true identity of the products. According to BB and as considered by the ECJ, a situation like this does not exist.

Second question

2. As an alternative, if question (1) is held inadmissible or unfounded, should the Bayerisches Bier Regulation be construed as meaning that recognition of the PGI ‘Bayerisches Bier’ is to have no adverse effect on the validity or usability of pre-existing marks of third parties in which the word ‘Bavaria’ appears?

The consideration of the ECJ with regard to this question is closely related to the first. The ECJ focused on the comparison between Articles 14(2) and 14(3) GI Regulation. Article 14 sets out, among other things, general rules of conflict with regard to the relationship between registered geographical indications and trade marks. Article 14(2) refers to a situation of conflict between a PGI and a pre-existing trade mark, while Article 14(3) governs the situation where registration of a geographical indication would be liable to mislead the consumer as to the true identity of the product, in the light of the reputation of a pre-existing trade mark. According to the ECJ, Articles 14(2) and 14(3) govern separate situations. The fact that there is no likelihood of confusion on the part of the consumer and Article 14(3) is therefore not applicable (as is the case here) will not affect the need to examine the conditions in Article 14(2) that make it possible for a trade mark and a geographical indication to ‘co-exist’.

According to the ECJ, to determine whether a situation of conflict between a PGI and a pre-existing trade mark exists, a national court should analyse:

* whether the use of the trade mark corresponds to one of the situations referred to in Article 13 GI Regulation;
* whether the trade mark was registered in bad faith before the date on which the application for registration of the name was lodged; and, if appropriate
* whether there are grounds for invalidity or revocation of the trade mark as provided for, respectively, by Articles 3(1)(c) and (g) and 12(2)(b) of Trade Mark Directive 89/104.

In summary, the ECJ concludes that the fact that ‘Bayerisches Bier’ is protected as a geographical indication does not adversely affect the validity and the possibility of using pre-existing trade marks of third parties in which the element ‘Bavaria’ appears and which were registered in good faith before the date of the application for registration as a geographical indication, provided that the trade marks are not subject to any grounds of invalidity or revocation under harmonized European trade mark law. It is for the national courts to decide whether such a situation exists.

Practical Significance

This decision is of practical significance in two ways. First, by making clear that the registered geographical indication ‘Bayerisches Bier’ and the pre-existing Bavaria trade marks may co-exist, provided that the use of these trade marks does not correspond to any of the situations referred to in Article 13 GI Regulation, they are registered in good faith and are not subject to any ground of invalidity or revocation under harmonized European trade mark law. In summary, only when BB is able to show that one of these situations exists should the national courts declare the Bavaria trade marks invalid. The outcome of this case is satisfactory. It is undesirable if a trade mark such as Bavaria, which has been successfully used for such a long time, could be easily put aside when the term ‘Bayerisches’ is suddenly protected as a geographical indication.

The explanation of Article 14(2) GI Regulation is in line with Article 24.5(b) TRIPS, which provides that a trade mark consisting of a geographical indication is valid as long as it was registered before the geographical name was protected in its country of origin. Although this article of TRIPS has been subject to discussion with regard to the question whether it incorporates ‘co-existence’, the ECJ's decision is a step in the right direction. Co-existence of pre-existing trade marks and geographical indications is, in principal, possible, though subject to the interpretation of the circumstances of the case.

Secondly, this decision clarifies that the mere presence of trade marks including a geographical indication will not automatically provide that a geographical indication becomes generic. A geographical name only becomes generic if the direct link between the geographical origin and a specific quality of the product (eg its reputation) has disappeared, and the name does no more than describe a style or type of product.

Joint authorship of doo-wop song found based on disputed 10 per cent contribution to lyrics

Author: Charles R. Macedo (Amster, Rothstein & Ebenstein LLP, New York, NY)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp179

Janky v Lake County Convention and Visitors Bureau, Nos 07-2350, 07-2762, and 08-1606, 576 F.3d 356 US Court of Appeals for the Seventh Circuit, 3 August 2009

Joint ownership of copyright was found where an author's contributions to a song contributed to its commercial viability.

Legal Context

Under US copyright law, ‘[t]he authors of a joint work are coowners of copyright in the work’ (17 USC 201(a)). Thus, as long as each contribution rises to the level of authorship, each joint owner holds an undivided interest in the joint work regardless of the quality or quantity of their respective contribution, and can each authorize others to use the work. However, the US law, at least in the Seventh Circuit where this case was decided, recognizes that not every comment or suggestion rises to the level of authorship. Janky v Lake County Convention and Visitors Bureau, 576 F.3d 356 (7th Cir. 2009) clarifies (in an entertaining opinion) the Seventh Circuit's view as to what type of contribution is necessary for someone to be considered an author in a joint work. This case highlights the perils of filing a copyright application containing information which is later contended to be inaccurate and based on a misunderstanding of the legal implications of such information.

Facts

In the late 1990s, the Lake County Convention and Visitors Bureau for Lake County, Indiana, located southeast of Chicago, Illinois, was interested in commissioning a tune ‘singing the county's praises’ (576 F.3d at 358).

Cheryl Janky, a member of ‘Stormy Weather’, an Indiana-based doo-wop group (right), took up the challenge after Henry Farag, another member of Stormy Weather told the band about the opportunity, suggesting that the band might want to give it a shot. In 1999, Janky wrote the music and lyrics for a tune she called ‘Wonders of Indiana’ (a.k.a. ‘Indiana’). When the song was completed in May 1999, Janky filed a copyright application in which she listed herself as the sole author. Thereafter, Janky showed the song to Henry Farag. At this point, the issue of collaboration began. As the Seventh Circuit explained:

Although Farag thought it had potential, he recommended revising the lyrics to better suit the Bureau's vision. Pursuant to a conversation with the Bureau's chief executive officer, Farag suggested that the song needed to focus more on Lake County in particular, as opposed to Indiana in general, and include references to the area as ‘Chicago's neighboring south shore’ and to its ethnic diversity. Janky testified that Farag's recommendations, which she adopted, accounted for 10 percent of the lyrical content (576 F.3d at 359–60).

In December 1999, Janky filed a second copyright application for the revamped song, listing Farag as a co-author who provided ‘additional lyrics’ and characterizing the effort as a ‘joint work’. She also filed a similar document with the American Society of Composers, Authors and Publishers (ASCAP) stating that Farag held a 10 per cent ‘ownership share’.

The ‘revamped’ song was recorded by Janky, Farag, and the rest of Stormy Weather, into a demo, and then a music video, which was ultimately adopted and used by the Bureau, and is the subject of the present copyright dispute.

Farag issued a non-exclusive licence to the Bureau to use the video and song in return for the cost of production. The band had apparently decided that the publicity (rather than a royalty) would be sufficient payment for use of the song. On 1 December 1999, the Bureau made first use of the song at the same time it opened a new visitor's centre. It played the music video and sponsored a live performance. In June 2000, Stormy Weather completed production of the song and included it on an album called ‘Doo-It Doo-Wop’. The Bureau purchased 1500 copies of the album, reselling it at the visitor's centre. The Bureau also made other use of the song.

Janky later alleged that ‘she composed the song and never gave the Bureau permission to use it’ (576 F.3d at 358). Janky ‘testified that she placed Farag's name on the registration form "as an indication of [her] gratitude ... and to demonstrate that [she] appreciated every little bit of support." She said she now realizes that the proper way to acknowledge a "de minimis" contribution is by making a notation on the album cover’ (id at 360). In contrast, Farag maintained that ‘the lyrical changes were "significant," and revisions were also made to the melody’ (id).

Presumably, in recognition of the ‘mistake’ Janky now claims she made in the December 1999 copyright application, on 15 July 2003, she filed a third copyright application for the ‘revamped song’ to correct her ‘mistake’. This third application instead listed herself as the sole author of the music, lyrics, and ‘arrangement performance’. According to Janky, ‘Farag’s license to the Bureau was without effect and the latter's use of the song illegal' (576 F.3d at 361). She notified the Bureau that she was the exclusive owner, but the Bureau continued using the tune until Janky commenced the present lawsuit in October 2003. In what the Seventh Circuit characterized as an ‘over-litigated’ case, with ‘unfocused’ appellate briefing, the US district court ultimately awarded partial summary judgment in favour of Janky on the grounds that Janky was the sole owner of the copyright to the tune at issue, based on its findings that Janky and Farag ‘didn't intend to be co-authors at the time of creation’ and Farag's contributions were ‘nothing more than "minimal revisions" of a song Janky already composed’ (id. at 358, 361). A jury awarded Janky $100,000 in damages for the Bureau's copyright infringement, and the present appeal ensued.

Analysis

The Seventh Circuit provides an entertaining and informative explanation of the criteria to be used in that Circuit for determining whether someone is an author in a ‘joint work’. While the Seventh Circuit also discussed other issues, the present analysis focuses on the main issue on appeal: was Janky the sole author of the copyright work, or was Farag co-author of a ‘joint work’.

Section 101 of the US Copyright Act defines a joint work as ‘a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole’: 17 USC 101. The Seventh Circuit law on co-authors provides that ‘[i]n general, individuals are co-authors of a work only where they (1) intend to create a joint work; and (2) contribute independently copyrightable material’ (citing Erickson v Trinity Theatre, Inc., 13 F.3d 1061, 1068, 1071 (7th Cir. 1994) 576 F.3d at 361.

The Seventh Circuit determines ‘intent’ based on the collaborators' intent to ‘work together in the creation of a single product’, rather than on whether the collaborators intend to ‘recognize each other as coauthors for purposes of copyright law’ (citing Erickson, 13 F.3d at 1068–1069; 576 F.3d at 362). This intent may be evidenced by ‘billing’ or ‘credit’. (citing Erickson, 13 F.3d at 1072).

In adopting the ‘independently copyrightable material’ prong of the Seventh Circuit test, the Circuit explicitly rejected a ‘de minimis’ test, as proposed by Professor Nimmer in his treatise, which requires merely ‘more than a de minimis contribution by each author’. Thus, when a putative author contributes merely ‘(i)deas, refinements, and suggestions’, such a contribution is not enough to make the author a joint author under Seventh Circuit jurisprudence (citing Erickson, 13 F.3d at 1070; ibid).

While the Seventh Circuit has carved out as an exception to the ‘independent copyrightability’ requirement, those works where none of the parts could pass the test of copyrightability due to ‘the nature of the particular creative process’, such as the creation of a comic book, which requires a writer, a penciler, an inker, and a colourist, to form such a work (discussing Gaiman v McFarlane, 360 4 F.3d 644, 658–659; 576 F.3d at 362 n.41 (7th Cir. 2004)), that exception was found to not apply in the present case since Janky was capable of submitting and obtaining, and did actually obtain, a copyright to the original version of the tune, before she ever spoke with Farag about the details of the work.

In its analysis, the Seventh Circuit determined that Janky and Farag intended to create a joint work, despite Janky's post hoc protestations to the contrary, considering Janky's initial acknowledgment of Farag's contribution as a co-author, combined with the ‘considerable control’ that Farag wielded over ‘what the song finally looked like’ (576 F.3d at 362). The Seventh Circuit declined to find that Janky's affidavit to the contrary was sufficient to create a material fact in dispute on this point.

Likewise on the second prong of the test, the Seventh Circuit found, as a matter of law, that Farag's contributions went beyond general ‘(i)deas, refinements, and suggestions.’:

They were concrete expressions and thus pass the test of copyrightability where mere ideas fail. Gaiman, 360 F.3d at 658. In addition, while Farag's changes may have accounted for only 10 percent of the lyrics, they were significant. They were important not only to the final sound, but also to its commercial viability. Before Farag became involved, the song celebrated the charm of Indiana as a state; Farag shifted the focus to Lake County. Without Farag's input, it is unlikely that the Bureau would have embraced the song the way it did (576 F.3d at 363).

Thus the Seventh Circuit weighed the importance of the comments as more important than their volume in determining separate copyrightability, and concluded that the Bureau, rather than Janky, was entitled to summary judgment. Despite this finding, the Seventh Circuit did, however, recognize that this was a ‘close case’ and cautioned:

We have observed in the past that published creations are almost always collaborative efforts to some degree—peers make suggestions, editors tweak words, and so forth. See id. at 658. Were we to deem every person who had a hand in the process a co-author, ‘copyright would explode.’ Id. On the other hand, the very purpose of copyright law is to promote the progress of the arts and sciences, U.S. CONST. art. I, 8, cl. 8; Wildlife Express Corp. v Carol Wright Sales, Inc., 18 F.3d 502, 507 (7th Cir. 1994), a purpose that is defeated if important contributions are denied copyright protection. Placing a contribution in one hopper or the other is not always an easy task, and the judge here made a commendable effort. In the end, though, this doo-wop ditty is a joint work.

Circuit Judge Ripple dissented from the majority opinion to the extent the majority granted summary judgment in favour of the Bureau. While Judge Ripple agreed that summary judgment in favour of Janky was improperly granted by the district court, he would have found that the case should be remanded for further consideration since the record was insufficient to establish:
whether Farag had an intent to become a joint author; and whether Farag's contributions were sufficient to establish separate copyrightability.

Practical Significance

Copyright applications in the USA are deceptively simple forms that many authors believe are easy to fill out. While the questions seem straightforward, the answers are not always so. The failure to appreciate in the first instance the legal implications of the information provided can lead to unintended results. This case serves as a sober reminder to authors of the importance of making sure to consider carefully the respective roles of each participant in the creation of the work, and to record properly those roles in the first instance in their copyright applications, to avoid later disputes over respective rights. Consultation with copyright counsel is strongly recommended.

* Charles R. Macedo is the author of The Corporate Insider's Guide to US Patent Practice, published by Oxford University Press (details here).

JIPLP welcomes Julia Montero to the Editorial Board

JIPLIP Editorial Board members are appointed for a renewable three-year term; they are divided into panels that reflect to some extent their personal interests or experiences within intellectual property -- though they are never bound to contribute ideas and content from solely within the sphere of subject-matter of the panel to which they have been allocated.

The appointment of new Editorial Board member Julia Montero gives this weblog an ideal opportunity to introduce readers to her and, in doing so, to welcome some further input from the in-house perspective. The blog asked Julia to say a few words about herself and she duly obliged. Says Julia:

"I’m a UK-based solicitor currently working on the converged Internet side of Vodafone Group’s products and services in London. I’m also a member of BLACA and SCL, a published author and a former Visiting Professor at the University of Alicante. Prior to qualifying at media firm Michael Simkins LLP and having obtained an LL.M in IP/Computer law (University of London 1999), I spent 4 years developing collective online music licensing at the UK collecting society, MCPS/PRS (now ‘PRS for Music’). I have also worked in-house for EMI Records and Abbey Road Studios advising on digital music, branding and associated commercial issues.

I’ve been particularly interested in the intersection between digital technologies and media since first reading John Perry Barlow’s seminal article ‘The Economy of Ideas’ as an undergraduate. Some 10 years later, IP practitioners in all jurisdictions are still wrestling with many of the legal challenges raised by the exploitation of IP rights across digital platforms. I’m therefore extremely honoured to be joining such a prestigious Editorial team and very much looking forward to contributing to the reporting and analysis of the development of such issues (amongst others!) while on the Transactions and Non-Contentious IP Practice Board".

A full list of the Editorial Board teams can be found here.

ECJ upholds ‘compulsory licences’ of Green Dot trade mark

Author: Christopher Stothers (Milbank, Tweed, Hadley & McCloy LLP)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp181

Der Grüne Punkt-Duales System Deutschland GmbH v European Commission – ECJ Case C-385/07P, 16 July 2009

The European Commission was justified under competition law in restricting the terms of trade mark licences for the Green Dot trade mark and, contrary to the view of the owner, this did not constitute a ‘compulsory licence’ of the mark.

Legal Context

Under Article 40(2) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Members are permitted to take measures to deal with anti-competitive licensing practices so long as such measures are consistent with the other provisions of TRIPS. Under Article 21 of TRIPS, ‘the compulsory licensing of trademarks shall not be permitted’ (by contrast, compulsory licences of patents are permitted under Article 31). This appears to indicate that Members, which include the European Community and its Member States, are not permitted to grant compulsory licences of trade marks even in order to deal with anti-competitive behaviour.

Nevertheless, the European Commission appeared to do exactly that in its Green Dot competition decisions in 2001, without even demonstrating the ‘exceptional circumstances’ required by Magill and IMS Health. The appeals against those decisions have now been rejected by the European Court of Justice (ECJ), sitting as a Grand Chamber of 13 judges, as well as the Court of First Instance (CFI). The CFI judgments were discussed in [2007] JIPLP 653–654.

Facts

In 1991 Germany adopted the Ordinance on the Avoidance of Packaging Waste (‘Verordnung über die Vermeidung von Verpackungsabfällen’). This required manufacturers to recycle their used packaging, either by taking it back at the point of sale or by collecting it from the vicinity of the consumer's home. Manufacturers were permitted to use third parties to meet their obligations.

In 1991, a German company, Der Grüne Punkt—Duales System Deutschland AG (DSD), registered its Green Dot logo as a trade mark and in 1992 it began providing a collection and recycling service for manufacturers throughout Germany. The trade mark is as follows:

Manufacturers who used the DSD system were licensed to use the Green Dot trade mark on their packaging, paying a fee for all packaging so marked. The actual collection was carried out by third parties (‘collectors’) who entered into agreements with DSD.

In 1992 DSD notified its system to the European Commission as involving potentially anti-competitive agreements, seeking either confirmation that these did not breach Article 81(1) of the EC Treaty (negative clearance) or an individual exemption under Article 81(3).

The Commission initially indicated in 1997 that it would take a favourable view of the system. However, issues were raised by a competing waste disposal firm and by certain hair-care product manufacturers, which in 2001 led to the Commission giving two decisions that certain aspects of DSD's system were anti-competitive (Decision 2001/463 [2001] OJ L166/1 and Decision 2001/837 [2001] OJ L391/1).

DSD appealed against both decisions to the CFI, but its application for interim relief in the first case was rejected for lack of urgency in November 2001 (Case T-151/01 R [2001] ECR II-3295); in May 2007, both substantive appeals were rejected (Case T-151/01 and Case T-289/01). DSD brought a further appeal to the ECJ in the first case, but this was also rejected in July 2009. DSD did not bring a further appeal in the second case and so only the first case is considered here.

Analysis

The Commission found that DSD held a dominant position in the relevant market for the supply of collection and recycling services to manufacturers. It also found that DSD had abused that position by basing the fee payable on the volume of packaging bearing the Green Dot trade mark rather than on the volume of packaging collected and recycled by DSD's system. The Commission held that it would ‘in a not inconsiderable number of cases, be economically unrealistic’ for manufacturers to restrict their use of the Green Dot trade mark to packaging which would be collected and recycled by DSD. The abuse was held to be both exploitative, by imposing unfair terms and prices on the users of its system, and obstructive, by effectively preventing DSD's customers from using alternatives to DSD's system: this could not be objectively justified under trade mark law because DSD's system went beyond what was necessary to fulfil the essential function of the trade mark right, which in this case was to indicate to consumers that they could dispose of the packaging through DSD's system. DSD was therefore required not to charge a licence fee for packaging which the manufacturer collected and recycled in some other way.

In its appeal to the CFI, DSD argued (among other things) that the Commission had wrongly imposed a compulsory licence of the Green Dot trade mark, claiming that this breached TRIPS, that the Commission had mischaracterized the essential function of the mark, that the Commission's remedy would impair the distinctive function of the mark and that the Commission had imposed a compulsory licence without any fee.

The CFI disagreed, holding that the Commission had not imposed a compulsory licence, but merely restricted the terms of the licences offered by DSD. The essential function of this particular trade mark was not ‘to guarantee the identity of the origin of the marked goods to the final consumer’, as argued by DSD, but rather that the mark ‘says no more than that the product thus identified may be collected via the DSD system’ or ‘that the [collecting] facility concerned is part of the DSD system’. On this basis, the Commission's decision did not constitute ‘a disproportionate impairment of the trade mark right or, in any event, an impairment which is not justified by the need to prevent an abuse of a dominant position’. Finally, the Commission decision did not preclude a fee for the use of the trade mark but simply prohibited charging the full fee for use of DSD's system where only the trade mark was used.

As a consequence, the CFI made no finding on the argument advanced by the Commission at the interim measures stage that ‘Articles 21 and 40(2) of TRIPS, read in conjunction, permit a balance to be sought between the interests of the owner of the trade mark and the public interest, which means competition free of distortion.’ (Case T-151/01 R, para 132).

In appealing to the ECJ, DSD raised a total of eight grounds of appeal, all of which were rejected by the ECJ.

As the first ground, DSD claimed that the CFI's reasoning was internally contradictory in recognizing at para 194 that DSD might still be entitled to charge a fee for the use of the trade mark. Unsurprisingly, this was rejected by the ECJ, which noted that the CFI had distinguished between such a fee and any fee corresponding to the price of the collection and recovery service.

As the second ground, DSD claimed that the CFI had distorted the meaning of its trade mark licence by finding that it included a ‘separate licence’ for the use of the Green Dot trade mark on packaging where the collection and recovery service was not used. Again, the ECJ rejected this ground of appeal. It held that DSD's trade mark licence required users to affix the Green Dot trade mark to all packaging notified to DSD and intended for domestic consumption in Germany, regardless of whether it was ultimately collected and recovered by DSD, the competition issue arising because a fee for the collection and recovery service was payable in any event.

As part of the third ground and as the fourth ground, DSD claimed that permitting the use of its logo on packaging which it did not collect and recover would deprive its trade mark of its exclusive character. The ECJ began by rejecting the suggestion by one of DSD's competitors that ‘the logo is not a trade mark in the classical sense’ and confirming that DSD was still entitled to assert its trade mark rights against third parties. However, the ECJ noted that the use of the Green Dot trade mark on all packaging notified to DSD was not only permitted but actually required by DSD's trade mark licence. Accordingly, the ECJ held that the trade mark retained its exclusive character.

As the fifth ground, DSD claimed that the CFI had failed to recognize that it was in effect requiring DSD to grant a licence to use the Green Dot trade mark independently of use of DSD's collection and recovery services and had failed to consider whether the conditions for granting such a compulsory licence were met. In the light of the ECJ's interpretation of the trade mark licence described above, the ECJ saw no merit in this argument.

As the sixth ground, DSD again claimed that it was being forced to grant a licence and also that it should be entitled to require its customers to include an explanatory notice on packaging which included the Green Dot trade mark but which would not ultimately be processed by DSD's system. The ECJ referred back to its earlier findings in rejecting the first part of this ground and held that the second part was unfounded given it would not be possible to determine the route taken by a particular item of packaging in advance.

Finally, DSD raised procedural issues as the seventh and eighth grounds, claiming that the CFI had not given it a chance to be heard on certain issues and that the time taken for the proceedings was excessively long. These also were rejected. Interestingly, the ECJ accepted that the CFI's proceedings took too long but held that, as this did not affect the outcome of the case, it should not lead to the judgment being set aside but might give rise to an action by DSD against the Community for damages.

Practical Significance

Even by the standards of competition law, which is rarely the quickest off the blocks, this has been a long-running case. DSD notified its system to the Commission in 1992, the Commission decided that certain aspects were unlawful in 2001 and the final judgment of the ECJ confirming those decisions has now appeared in 2009. The ECJ's comments on these delays, although directed at the CFI, may have broader impact and may encourage damages actions by those who consider themselves damaged by such delays.

However, even then the judgment of the ECJ is unlikely to prevent further disputes in relation to use of the Green Dot logo. In seeking to avoid the grant of a ‘compulsory licence’, the ECJ has relied heavily on the terms of DSD's current trade mark licence, noting that it grants a licence for all packaging materials notified to DSD and therefore finding the anti-competitive behaviour in the size of the fee payable for those packaging materials which are not ultimately collected and recovered by the DSD system. While resolving the matter immediately before it, it does not take an enormous leap of imagination to suspect that DSD will change its trade mark licence in the future. Indeed, in August 2008, DSD announced that from 2009 it would decouple its trade mark licence from its recovery service, allowing third parties to use the Green Dot trade mark provided they undertake to comply with the Ordinance on the Avoidance of Packaging Waste. The terms of such licences, or future licences adopted on the basis of the ECJ's judgment, are likely to come before the competition authorities or courts in due course, in particular in relation to the fees.

More broadly, the ECJ's judgment should be of some comfort to trade mark owners fearing the imposition of a ‘compulsory licence’. Although DSD was unsuccessful in this particular case, the ECJ's formalistic approach based on the terms of the trade mark licence give trade mark owners greater scope to avoid any compulsory licensing of their trade marks in the future by careful drafting. However, compulsory licensing should not be viewed in isolation—other aspects of trade mark licences may still be regarded as anticompetitive, raising risks of fines by the competition authorities and claims for damages by third parties. Modern competition scrutiny in the European Community is driven by economic analysis rather than legal formalism, meaning that trade mark owners cannot simply rely on clever drafting of contractual terms but must also ensure that the substance of their licensing arrangements is not anticompetitive.

Court of Appeal upholds SPC on enantiomer of known racemate

Author: Bratin Roy (McDermott Will & Emery UK LLP)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):775-776; doi:10.1093/jiplp/jpp150

Generics (UK) Ltd v Daiichi Pharmaceutical Co Ltd & Another [2009] EWCA Civ 646 (2 July 2009), Court of Appeal, England and Wales

The Court of Appeal for England and Wales has upheld a decision of the Patents Court confirming the validity of a patent and accompanying supplementary protection certificate to an enantiomer of a known racemate.

Legal Context

A significant number of pharmaceutical products are derived from what are known as chiral compounds. Chiral molecules can take one of two forms, which are mirror images of each other but are not identical, like a person's left and right hands. Thus, the two forms have the same molecular formula, but differ in geometry, and are known as enantiomers. A racemate is a mixture of equal amounts of two enantiomers of a chiral molecule.

This decision confirms that a patent to a specific enantiomer can be inventive, even if the associated racemate is already known. It also confirms that a supplementary protection certificate (SPC), which effectively extends patent protection for medical products to take account of the long time required to obtain regulatory approval, can be valid even if marketing authorization has already been granted for the racemate.

Facts and analysis

The claimant, a manufacturer of generic medicines, brought a claim seeking a declaration of invalidity of European Patent (UK) 0206082 and of associated SPC GB97/085, owned by the defendant. The patent and SPC were to a chiral antimicrobial compound called levofloxacin, the negative enantiomer of a compound whose racemic form is known as ofloxacin, which was a member of the class of compounds called quinolones. The patent had already expired, but the SPC remained in force.

The claimant's case was based on a number of pieces of prior art, including the defendant's prior patent, common general knowledge, and also on a poster briefly displayed at a conference which explained how enantiomers of flumequine, a similar quinolone to ofloxacin, were made. The claimant argued that the patent was obvious in the light of this disclosure.

It was common ground that the relevant claims of the patent did not extend to ofloxacin, which was acknowledged in the patent to be old, having been disclosed by the defendant in a prior patent. The claimant, however, claimed that the SPC was invalid under Article 15 of European Regulation 1768/92: levofloxacin was not to be regarded as a new active ingredient for the purposes granting an SPC, being an active component of ofloxacin, for which there was already a marketing authorization.

Patents Court decision
Mr Justice Kitchin concluded that the patent was valid over all of the cited prior art, and that the SPC was validly granted. He concluded that the patent was inventive over common general knowledge, as knowledge of racemate did not mean that use of only one of the constituent enantiomers was obvious, particularly where that individual enantiomer showed greater efficacy than the racemate, of which the skilled addressee would not have been aware. Further, while the skilled addressee of the patent, reading the poster, would have considered it worthwhile exploring whether ofloxacin could be resolved into its constituent enantiomers, it would not have been obvious that this would be a fruitful exercise.

On the SPC, he held that a marketing authorization for ofloxacin could not be considered authorization to market levofloxacin. Since it had required invention to produce levofloxacin, and marketing authorization was not granted for levofloxacin until 11 years after the patent had been granted, it was just for the defendant to be granted an SPC in respect of that delay. The claimant appealed.

Court of Appeal decision
The Court of Appeal upheld the Patents Court's decision in full. It held that Kitchin J's reasoning regarding the poster was a perfect example of a judge carrying out the balancing task of forming an overall value judgment, and so could not be faulted. As Jacob LJ, giving the lead judgment put it, ‘Only a curmudgeon would say that there is no invention here.’

The Court of Appeal also agreed with the approach taken by the Patents Court over the SPC. This case was one in which the underlying research had led to what was effectively a new medicine. This was precisely the type of research referred to in recital 2 of Regulation 1768/92. The claimant's argument that ofloxacin should be regarded as no more than levofloxacin with an impurity was also rejected. Neither patent law nor the law controlling the marketing of medicines regarded it as such, and there was no reason why the law on SPCs should be any different. The claimant sought to rely on case law from numerous non-EU jurisdictions in support of this contention, which were rejected as being concerned with different statutory language, views of the facts, and policies.

Practical significance

The use of chiral compounds in pharmaceuticals has been, and continues to be, widespread throughout the pharmaceutical industry. The outcome of this latest challenge to the validity of a patent relating to such compounds confirms the approach taken by the UK courts in previous cases, despite the numerous European and non-EU precedents on which the defendants sought to rely. In cases such as this, in which a single enantiomer is unexpectedly found to be superior to its known racemate, that enantiomer is clearly capable of patent protection. This case also confirms that the extremely valuable additional protection afforded by an SPC is also available for such enantiomers.

How much will JIPLP cost next year? Good news for subscribers

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Precedents for the biotech and pharma industries: a book review

Reviewer: Trevor Cook (Bird & Bird. Email Trevor.cook@twobirds.com)

Citation: Journal of Intellectual Property Law & Practice, doi:10.1093/jiplp/jpp182

Book reviewed: Drafting Agreements in the Pharmaceutical and Biotechnology Industries, by Mark Anderson et al. (Eds)

Bibliographic details: Oxford University Press, 2009, ISBN: 978-0-19-953963-5, Loose leaf, pp. c. 1,200. Price: £395 (main work and first year's subscription). Web page here.

This is a book of precedents with two unique features. First, and uniquely at least for a European book (there are no doubt US ones), it focuses on a single industry sector, that of pharmaceuticals and biotechnology. Secondly, and probably uniquely for any book of precedents anywhere in the world, it bravely, and generally successfully, tries to adopt a multi-jurisdictional approach, with agreements primarily drafted and annotated from an English perspective, but with additional commentary also from a number of consultants giving German, French, Spanish, Dutch, and Swedish perspectives on them, and on some individual clauses. This latter feature, while, as the editor admits, not comprehensive, does at least provide a fascinating insight into certain aspects of these other legal systems, and if nothing else will be invaluable in explaining to those with a common law background the various sensitivities on the part of practitioners and contracting parties who are based in those other jurisdictions.

The 38 precedents that the book offers are divided into separate sections for preliminary agreements, collaborative R&D agreements, services agreements, clinical trial agreements, product manufacturing and supply agreements, distribution and marketing agreements, licence agreements and assignments—all types of agreement encountered in the pharmaceuticals and biotechnology sector, and many are very much tailored to the issues encountered in it—indeed many reflect relationships and business models, such as co-promotion, that are unique to the sector. The types of agreement tackled range from the simple to the downright ambitious. Precedents are introduced with general commentary, but commentary on specific clauses in the precedents is set out clearly and conveniently, on the opposite page to the clause the subject of comment. Despite the smaller type face of such commentary, this results, because of its thoroughness, in fewer expanses of blank space than one might fear—the only precedent to suffer from such blank space on the opposite pages is the NHS Clinical Trial Agreement and the accompanying guidance notes, these being standard documents prepared by third parties and which do not adopt the useful arrangement of the rest of the precedents and commentary. In addition to the precedents themselves and their commentary and introductions, there is some general commentary on a number of topics—regulations affecting R&D of pharmaceutical products, IP, competition law, contract law and practice, and tax and currency issues. There is also a small appendix of European Union competition law materials.

One can have every confidence in the drafting, edited as the book is by Mark Anderson, whose area of speciality this is, and who has already written a number of valuable books on technology licensing. My only criticism of the book is a minor one of presentation—some extra dividers to split up the chapters in the main section, which containing the precedents, would have been welcome. But this is a book that can thoroughly be recommended for anyone who is drafting or negotiating agreements in Europe in the pharmaceutical and biotechnology sectors.

The road to Copenhagen: intellectual property and climate change

Author: Matthew Rimmer (Australian National University College of Law and Australian Centre for Intellectual Property in Agriculture, ACIPA)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):784-788; doi:10.1093/jiplp/jpp148

In the lead-up to the discussions over IP and climate change in Copenhagen in 2009, the US House of Representatives passed a resolution that it should be the policy of US government officials in discussions over the long-term action under the United Nations Framework on Climate Change to ‘prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements as of the date of the enactment of this Act for the protection of IP rights related to energy or environmental technology’.

Legal Context

The Ad Hoc Working Group on Long-Term Cooperative Action prepared a draft negotiating text for ‘a shared vision for long term co-operative action’ under the United Nations Framework on Climate Change FCCC/AWGLCA/2009/8. As well as dealing with the need for enhanced action on mitigation and adaptation to the impact of global warming, and questions of financing, technology, and capacity-building, the document canvasses three options to deal with IP and climate change.

Under the first Option, ‘Technology development, diffusion and transfer {shall} be promoted by operating the intellectual property regime in a manner that encourages development of climate-friendly technologies and simultaneously facilitates their diffusion and transfer to developing countries’.

Under the second option,

Specific measures {shall}{should} be established to remove barriers to development and transfer of technologies from developed to developing country Parties arising from the intellectual property rights (IPR) protection, including:
a. Compulsory licensing for specific patented technologies;
b. Pooling and sharing publicly funded technologies and making the technologies available in the public domain at an affordable price;
c. Taking into account the example set by decisions in other relevant international forums relating to IPRs, such as the Doha Declaration on the TRIPS Agreement and Public Health.

Under the third option, ‘[Least Developed Countries] should be exempted from patent protection of climate-related technologies for adaptation and mitigation, as required for capacity-building and development needs. Genetic resources, including germplasms of plant and animal species and varieties that are essential for adaptation in agriculture, shall not be patented by multinational or any other corporations’.

Facts

The House of Representatives was alarmed by the language of the draft negotiating text on long-term co-operative action under the United Nations Framework on Climate Change.

On 10 June 2009, Representative Rick Larsen (Democrat, Washington's 2nd District), moved amendment no. 187, in the US House of Representatives to the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011 HR 2410 (USA). The amendment was a statement of policy regarded climate change:

To protect American jobs, spur economic growth and promote a ‘Green Economy’, it shall be the policy of the United States that, with respect to the United Nations Framework Convention on Climate Change, the President, the Secretary of State and the Permanent Representative of the United States to the United Nations should prevent any weakening of, and ensure robust compliance with and enforcement of, existing international legal requirements as of the date of the enactment of this Act for the protection of intellectual property rights related to energy or environmental technology, including wind, solar, biomass, geothermal, hydro, landfill gas, natural gas, marine, trash combustion, fuel cell, hydrogen, micro-turbine, nuclear, clean coal, electric battery, alternative fuel, alternative refueling infrastructure, advanced vehicle, electric grid, or energy efficiency-related technologies.

Speaking to the amendment, Larsen emphasized that ‘[Intellectual Property Rights] protection gives companies the confidence to invest in critical research and development efforts to meet the growing demand for clean-energy technology’: the amendment to H.R. 2410 would ‘protect the [intellectual property rights] of these clean technologies and ensure these green jobs stay right here in the United States’. He emphasized: ‘It is critical that the investments that American companies are making in clean technology are protected’, concluding ‘Protecting individual property rights will help us reward innovation instead of penalizing it’.

The co-sponsor, Representative Mark Steven Kirk, a Republican (10th district of Illinois; member of the USA delegation to Kyoto in 1997), was suspicious of the language of the draft United Nations Framework Convention on Climate Change. He contended:

The American people need to know that those were code words, like ‘compulsory licensing’ and ‘technology transfer’, that really mean allowing other countries to steal the American patents, copyrights and trademarks for anything related to climate change, efficiency or energy under the draft climate change treaty.

If the United States agrees to a climate change treaty that allows developing countries to seize U.S. intellectual property in this area, economic consequences for green-collar jobs would be devastated. American inventors now hold 50 percent of the world's patents on clean energy, 52 percent of the patents on fuel cells, nearly half of the world's wind patents, 46 percent of the world's solar patents, and 40 percent of the world's patents in the hybrid-electric vehicle market.

Representative Kirk feared: ‘If a climate change treaty specifically allowed compulsory licensing so that Chinese competitors, for example, or European opposition could simply steal the intellectual property of a key U.S. green-collar manufacturer’. He reported an anecdote from Gregg Patterson, the CEO of PV Powered—America's largest manufacturer of solar power inverter technology: ‘One leading American innovator’ told me, ‘If we lose intellectual property rights, capital markets die’.

Representative Howard Berman (Democrat, 28th District of California, and a noted IP ‘maximalist’) expressed similar concerns:

If we want to encourage the international cooperation that's needed in this area, I'm telling you you've got to ensure that the entrepreneurs and the innovators know that their cutting-edge breakthroughs and innovations are protected. This isn't even as much about fair return for the inventors as it is ensuring that people will keep innovating and researching and advancing the technologies because they know that ultimately they will be compensated. So it's a symbiotic relationship. The more we ensure and protect intellectual property, the more we will be able to do in achieving our very important goals with respect to the development and deployment of new energy and environmental technologies.

He was worried that the USA would be deprived of lucrative income from the ‘Green Economy’: ‘The United Nations reported that the global market for environmental technologies could double to $2.74 trillion by 2020 from the $1.37 trillion today because of growth in areas like energy-efficient technologies, sustainable transport systems, and water supply and efficiencies markets’.

Supporting the amendment, Representative Marsha Blackburn (Republican, 7th District of Tennessee), remarked:

American innovators hold 50 percent of the world's patents granted between 2002 and 2008 in the clean-energy field, and I will note that Tennesseans alone hold 1 percent of those worldwide patents in the hybrid/electric vehicle market. It's serious business for our American patent holders. They have invested a lot of time, passion, effort, energy, and economic capital in developing these technologies. It is therefore incumbent upon us in Congress to protect what they have created.

She considered that the language in the draft United Nations Framework Convention on Climate Change ‘would lead to outright theft of our American intellectual property and indirectly benefit the world's most prominent CO2 emitters’.

The resolution reflected intense lobbying from industrial groups including the US Chamber of Commerce, the Emergency Committee for American Trade, the Solar Energy Industries Association, the Natural Hydrogen Association, and the National Association of Manufacturers. According to the Green Patent Blog, Carl Horton, IP counsel from General Electric, said that the new ginger group, the Innovation, Development, and Employment Alliance (IDEA), heavily lobbied members of Congress about the resolution. This new business coalition has sought to promote to the US Congress and the Obama Administration the need for strong IP rights protection to boost innovation and jobs growth.

Without demurral, the House of Representatives agreed to the Larsen-Kirk amendment 432-0.

In addition to the Foreign Relations Authorization Act, Fiscal Years 2010 and 2011 HR 2410 (USA), the United States House of Representatives has also passed the American Clean Energy and Security Act of 2009 HR 2454 (USA), sponsored by Representatives Henry Waxman (Democrat, California's 30th District) and Edward Markey (Democrat, Massachusetts' 7th District).

The chapter on exporting technology has a number of clauses on intellectual property and climate change. Section 441 (8) emphasizes: ‘Intellectual property rights are a key driver of investment and research and development in, and the global deployment of, clean technologies.’ Section 441 (10) stresses: ‘Any weakening of intellectual property rights protection poses a substantial competitive risk to U.S. companies and the creation of high-quality U.S. jobs, inhibiting the creation of new ‘green’ employment and the transformational shift to the ‘Green Economy’ of the 21st Century.’ Moreover, section 441 (11) observes: ‘Any U.S. funding directed toward assisting developing countries with regard to exporting clean technology should promote the robust compliance with and enforcement of existing international legal requirements for the protection of intellectual property rights as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C.3511(d)(15) and in applicable intellectual property provisions of bilateral trade agreements.’

Section 444 (3) provides that the eligibility of countries will be subject to ‘such other criteria as the President determines will serve the purposes of this subtitle or other United States national security, foreign policy, environmental, or economic objectives including robust compliance with and enforcement of existing international legal requirements for the protection of intellectual property rights for clean technology, as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)) and in applicable intellectual property provisions of bilateral trade agreements.’ Section 446 (3) provides that no funds be expended for the benefit of any qualifying activity where that activity or any activity relating to a qualifying activity under section 445 undermines the robust compliance with and enforcement of existing legal requirements for the protection of intellectual property rights for clean technology, as formulated in the Agreement on Trade-Related Aspects of Intellectual Property Rights, referred to in section 101(d)(15) of the Uruguay Round Agreements Act (19 U.S.C. 3511(d)(15)).’

This legislation was passed by 219 votes to 212, with 3 not voting.

The House of Representatives also passed the appropriations act, the Foreign Operations, and Related Programs Appropriations Act 2010 HR. 3081 (USA). Section 7089 provides: ‘Prior to the obligation of the funds made available in this Act for ‘Contribution to the Clean Technology Fund’ or ‘Strategic Climate Fund’ of the World Bank, the Secretary of State shall certify in writing to the Committees on Appropriations that all actions taken during the negotiations of the United Nations Framework Convention on Climate Change ensure robust compliance with and enforcement of existing international legal requirements as of the date of the enactment of this Act that respect intellectual property rights and effective intellectual property rights protection and enforcement for energy and environment technology, including wind, solar, biomass, geothermal, hydro, landfill gas, natural gas, marine, trash combustion, fuel cell, hydrogen, microturbine, nuclear, clean coal, electric battery, alternative fuel, alternative refueling infrastructure, advanced vehicle, electric grid, or energy efficiency-related technologies.’

In addition to such legislative actions, on the 29th July 2009, the Select Committee on Energy Independence and Global Warming held a hearing entitled, ‘Climate for Innovation: Technology and Intellectual Property in Global Climate Solutions.’ This hearing was promoted thus:

The key to solving climate change and developing clean energy is technology, and at the center of technology are intellectual property rights. In the Space Race, America had a singular competitor. In the Clean Energy Race to stop global warming, America is competing with the Chinese, Germans, Koreans, and countless others. How these countries and the world deal with intellectual property rights will have a huge impact on whether technology is available and deployed to solve our global problems.

The inquiry focused upon ‘the impact of intellectual property rights on global warming solutions and how to encourage American innovation while spreading climate related technologies globally.’

Analysis

The members of the House of Representatives seem to be under a misapprehension about the nature of the draft United Nations Framework Convention on Climate Change. Far from representing a radical change to IP law, the draft United Nations Framework Convention on Climate Change seems merely to reiterate language which is already present in TRIPS.

World Trade Organization (WTO) members already enjoy the flexibility of excluding clean technologies from patent protection in order ‘to avoid serious prejudice to the environment’. Article 27(2) of TRIPS provides: ‘Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law’ (my emphasis). In this context, the third option under discussion in Copenhagen is much more limited than the TRIPS language: ‘[Least Developed Countries] should be exempted from patent protection of climate-related technologies for adaptation and mitigation, as required for capacity-building and development needs’.

Far from being a codeword for theft and stealing, as Republican Representative Mark Steven Kirk would have us believe, TRIPS has long recognized the capacity of nation states to provide exceptions for research, and to engage in compulsory licensing and state use. TRIPS Article 30 recognizes that ‘Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties’. Article 31 acknowledges that Member States may provide for the use of patents by governments of third parties, without the authorization of the rights holder. This article is subject to a number of procedural safeguards, including that ‘the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization’. Thus, the statement of the Republican Representative Mark Steven Kirk about compulsory licensing is oxymoronic since such licensing necessarily involves compensation to the patent holder. In this context, the options are discussion under the second option at Copenhagen—such as compulsory licensing for specific patented technologies; patent pooling; and sharing publicly funded technologies—appear to be entirely within the bounds of TRIPS.

Finally, the concerns of the House of Representatives in respect of transfer of climate-friendly technologies have also been overstated. There has been a longstanding concern within the WTO about IP and technology transfer. TRIPS Article 7 provides: ‘The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations’. TRIPS Article 66(2) provides that ‘developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed country Members in order to enable them to create a sound and viable technological base’. These articles are relevant to both the first and third options in respect of IP and climate change under contemplation at Copenhagen.

It would appear to be entirely appropriate for the draft text on long-term action under the United Nations Framework on Climate Change to address such matters as subject matter exemptions, compulsory licensing, patent pooling, sharing of publicly developed technologies, and technology transfer. Indeed, it would be a matter of great concern if the proposed agreement did not properly address matters of IP and climate change.

Practical significance

Given the existing framework of international IP law, how should one interpret the legislative proposals of the United States House of Representatives on intellectual property and climate change?

At best, the House of Representatives could be seen as engaging in political posturing in the lead up to the negotiations in Copenhagen over IP and climate change. In this light, the amendment could be seen as a piece of political theatre, designed to pander to domestic industries, to place pressure on the executive, and act tough to foreign competitors.

A more cynical view would be that the House of Representatives has been captured by industry groups, and is reiterating the specious arguments of lobbyists, without critical reflection or appraisal. If true, this would give grounds for concern, as it would show a basic ignorance of the existing framework laid down by TRIPS, and a misapprehension of the options under discussion in Copenhagen.

The Obama Administration, though, may be more willing to compromise than the House of Representatives in dealing with IP and climate change. The Energy Secretary, Nobel Laureate Steven Chu, has expressed a pragmatic willingness to share certain climate-mitigating technology. He observed, for instance, that there was scope for co-operation between the USA and nations like China in sharing technologies like systems for capturing and storing carbon dioxide from power plants:

Since power plants are built in the home country, most of the investments are in the home country. You don't build a power plant, put it in a boat and ship it overseas, similar to with buildings. So developing technologies for much more efficient buildings is something that can be shared in each country. If countries actively helped each other, they would also reap the home benefits of using less energy. So any area like that I think is where we should work very hard in a very collaborative way — by very collaborative I mean share all intellectual property as much as possible. And in my meetings with my counterparts in other countries, when we talk about this they say, yes, we really should do this. But there hasn't been a coordinated effort. And so it's like all countries becoming allies against this common foe, which is the energy problem.

The statement, albeit qualified, by the Energy Secretary would suggest that, at least some members of the Obama Administration are willing to negotiate and make compromises over the options under discussion in the draft negotiating text for long-term action under the United Nations Framework on Climate Change.

The mechanics of requesting trade mark proof of use

Author: Louisa Hetherington (Reynolds Porter Chamberlain)

Citation: Journal of Intellectual Property Law & Practice 2009 4(11):779-781; doi:10.1093/jiplp/jpp147

Harwin International LLC v Office for Harmonisation in the Internal Market, Cuadrado, SA (Case T-450/07 Court of First Instance of the European Communities, 12 June 2009)

The Court of First Instance of the European Communities (CFI) ruled that the applicant's written objections to documents put forward voluntarily by the proprietor of earlier trade marks in respect of its use of such marks in the course of cancellation proceedings constituted a formal request on the part of the applicant that the proprietor furnish proof of use of its earlier marks.

Legal context

In Community trade mark cancellation proceedings, Article 56(2) and (3) of Regulation 40/94 (now Article 57(2) and (3) of Regulation 207/2009) provides:

If the proprietor of the Community trade mark so requests, the proprietor of an earlier Community trade mark, being a party to the invalidity proceedings, shall furnish proof that, during the period of five years preceding the date of the application for a declaration of invalidity, the earlier Community trade mark has been put to genuine use in the Community in connection with the goods or services in respect of which it is registered and which he cites as justification for his application. ...

According to European Communities case law, such a request must be made ‘expressly and timeously to OHIM’ (Case T-183/02 and T-184/02 El Corte Inglés v OHIM – González Cabello and Iberia Líneas Aéreas de Espaa (MUNDICOR) [2004] ECR II-965). The question in this case was whether the proprietor of the prior Community trade mark in question had indeed made a formal request in accordance with the provisions.

Facts

Harwin applied to register a figurative mark featuring the word PICKWICK for ‘clothing, footwear, headgear’ (Class 25). The Community trade mark reached registration in September 2000. However, in January 2005, Cuadrado applied to cancel Harwin's mark on the grounds of invalidity under Article 55 of Regulation 40/94. The cancellation application was based on two earlier marks belonging to Cuadrado: the word mark PICK OUIC Cuadrado, S.A. VALENCIA, filed on 24 April 1989 in Class 25, and a figurative mark also featuring the words PICK OUIC and also in respect of Class 25 filed on 2 April 1997.

In its application for a declaration of invalidity, Cuadrado included, of its own accord, certain documentary evidence in respect of the use of its earlier trade marks. In its observations in response, Harwin stated that the evidence so provided was inadequate to prove genuine use. Cuadrado responded by supplying additional documents on proof of use.

The Cancellation Division agreed with Cuadrado and duly granted the application for a declaration of invalidity. Harwin appealed to the Board of Appeal, requesting among other things that the Cancellation Division's decision be annulled on the grounds that it had not assessed whether Cuadrado had adequately proved genuine use of its earlier marks. In this respect, Harwin pointed out that the Board of Appeal had already judged that those documents were insufficient to establish genuine use of the PICK OUIC Cuadrado, S.A. VALENCIA mark when it considered the point in opposition proceedings running parallel to the cancellation proceedings.

The Board of Appeal dismissed the appeal, stating that the Cancellation Division had correctly decided that it was not entitled to look at the issue of proof of use of the earlier marks as Harwin had not made an express request that Cuadrado prove use of its earlier marks as required by Article 56(2) and (3) of Regulation 40/94 (now Article 57(2) and (3) of Regulation 207/2009).

Harwin appealed to the Court of First Instance.

Analysis

OHIM argued that, as had been stated in MUNDICOR, a request to furnish proof of use must be made expressly so that the burden of proving use shifts to the proprietor of the earlier marks. It is that request which confers on OHIM the competence to adjudicate whether genuine use has been proved. In the absence of such request, OHIM argued, it must be assumed that the mark is in genuine use and there is no need to examine the issue.

Because Harwin had not made an express request for proof of use when it submitted its observations, Harwin was, in OHIM's view, not allowed to dispute the genuine use of the earlier marks. In other words, since the objections raised by Harwin in its observations did not constitute an express request, the Cancellation Division and the Board of Appeal could not examine the evidence submitted and were correct in going straight to the question of the likelihood of confusion in respect of the marks in question.

The CFI disagreed and decided that Harwin had ‘expressly and timeously’ requested proof of use (as required by case law) when it stated in its observations that the documents provided by Cuadrado in respect of genuine use of its earlier marks were inadequate. The Court noted that, on a literal interpretation of Article 56(2) and (3), the words ‘so requests’ could be understood as referring to the kind of ‘request’ made by Harwin in its observations when it disputed Cuadrado's evidence. Furthermore, Cuadrado had clearly understood Harwin's request as it duly provided additional evidence in response.

The CFI differentiated this case from the facts in MUNDICOR, in which OHIM's arguments were upheld and it was decided that no request to furnish proof of use had been made as the documents voluntarily submitted by the proprietor were submitted as evidence of reputation, not as evidence of genuine use. In MUNDICOR there was therefore no understanding between the parties that the issue for which evidence was being provided was the issue of genuine use. In this case, however, the CFI remarked that there was a clear exchange between the parties specifically in relation to the question of genuine use.

In the CFI's view, the underlying principles are that:

* the proprietor or an earlier trade mark is obliged to prove the use of its mark only if that use is challenged by the proprietor of the trade mark which is the subject-matter of an application for a declaration of invalidity;
* In the absence of such a challenge, OHIM may confine itself to considering whether a likelihood of confusion exists, without considering proof of use.

Where there is such a challenge of the use, whether by means of a request for proof of use submitted by the proprietor of the trade mark which is the subject-matter of an application for a declaration of invalidity or by means of that party challenging the evidence submitted by the proprietor of the earlier mark to prove use, OHIM is required to examine the issue of proof of use prior to that of the existence of a likelihood of confusion.

Practical significance

It is clearly better for the applicant whose mark is being challenged, whether in opposition proceedings or cancellation proceedings, to state expressly and specifically in its observations in response that it requires the opponent and proprietor of the earlier mark to furnish proof of genuine use. However, where it is obvious that both parties are addressing the point through the production of documents and argument, the Court will accept that the request has been made. This decision turned very much on the particular facts, however, and does not necessarily mean that there is any less need for the applicant party to make it clear what he is requesting.