Tuesday, 30 November 2010

IP: it's not just JIPLP

Given the pervasive nature of intellectual property, it is hardly surprising that the Journal of Intellectual Property Law & Practice (JIPLP) is not the only Oxford University Press periodical to cover it.

The current issue of the Journal of European Competition Law & Practice (JECLP), for example, carries a piece which addresses a technical and difficult area involving the confidentiality of corporate statements.  In his article "Leniency Programmes and Protection of Confidentiality: The Experience of the European Commission",  Antonio Caruso amplifies on the following theme, as described in his abstract:
"The principle of confidentiality of leniency submissions is a key point of the EU Leniency Programme. Largely drawn from the functioning of the US programme, the EU Leniency Programme gradually strengthened the protection of the confidentiality of leniency submissions, in order not to put at a disadvantage leniency applicants compared to non-applicants. Protection is nevertheless not absolute and varies depending on the entities that interact with the Commission, such as parties to the proceedings, third parties, foreign, EU Member States' judges or other authorities. 
The legal framework is complex: leniency submissions are covered by the notion of ‘professional secrecy’ (Art. 339 of TFEU) and considered in principle confidential, for the purposes of Regulation 1049/2001 and the publication of decisions. Their disclosure is subject to very specific conditions before judges/national authorities. Whereas EU Courts will be prompted in forthcoming key cases to scrutinize the status of confidentiality of leniency submissions under Regulation 1049/2001 and other regimes, Commission policy remains aimed at protecting the confidential status of corporate statements in all circumstances, whereas enabling disclosure of pre-existing documents only subject to certain conditions".
Available on advance access is a somewhat less intimidating topic for mainline IP practice: the Current Intelligence note by Christopher Stothers (incidentally, a member of the JIPLP editorial board), "Trade mark owner can object to resale of ‘perfume testers’".


Another periodical from the same stable is the International Journal of Law and Information Technology (IJLIT).  The most recent issue (click here for contents) features "Interoperability-Centric Problems: New Challenges and Legal Solutions" by Turgut Ayhan Beydogan.  According to the abstract,
"Interoperability, having the potential to be leverage for spurring follow-on innovation and competitive impulses in the network environment, is attributed to a number of mandatory solutions under EU Directives as well as standardisation efforts. While generally interoperability requirements are determined in a disjunctive and pro-competitive manner in separate industries, convergence turns interoperability into a common problem against the development of ICTs, and renders policy-making a critical venture-point on antitrust and IPR policy. Simply mandating the incumbents, who enjoy economies of scale or creating formally-set standards for each controversial and specific case, would not yield the intended results in terms of a self-sustaining marketplace with a high-level innovation. To create such an environment, both intra- and inter-platform interoperability should be encouraged with a macro and long-term ICT perspective, called the ‘holistic approach’ within the context of this study. 
In the study, the individual policy choices pertaining to specific industries are discussed primarily, and a set of notorious cases, e.g. Microsoft, for interoperability treatment are given, aiming to elaborate on the emerging concerns surrounding innovation, IPRs and standardisation including NGN-related challenges. It is resulted from the discussions that market players would not be able to cope with the IP-based threats and possible bottlenecks of an NGN environment without the responsive solutions that emerge out of consortias, neo-traditional SSOs near EU-wide recommendations and atypical interventions. Ultimately it is concluded that, without the diagnosis and cure of service-level interoperability challenges as well as network-level threats in a timely and co-operative manner that is crystallised in the “holistic approach” embodying all the three ICT industries, neither newly-built NGNs nor IP-based convergence would bring out the intended level of innovative end-to-end services".

Sunday, 28 November 2010

The body corporate as author of a copyright protected work

Author: Ankur Gupta

Pioneers & Leader (Publishers) Ltd v Asia Pacific Publishing Pte Ltd [2010] SGHC 211

citation: Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq175, first published online: November 24, 2010

The Singapore High Court (SGHC) expanded the scope of authorship under Singapore's Copyright law, holding that there is nothing in principle to prevent an incorporated body being deemed the author of a copyright protected work.

Legal context and facts

Probably one of the best-known and most widely applied legal fictions in the world of commerce is that a corporation is a legal person as opposed to a natural person. The limits of this legal fiction are determined by special legal framework and a body of law that bestows the corporation with legal personality.

One of the key issues in the present case was whether an incorporated company, a separate legal entity under Singapore Company Law, can be the author of a work in which a copyright subsists. This issue determined the outcome of the copyright infringement action by Pioneers against the defendant, Asia Pacific Publishing Pte Ltd (APP), in a horse racing publication entitled Punter's Way.

The dispute arose as a result of APP's attempt to undermine Pioneers' case. APP argued that copyright did not subsist in the work, as Section 27 of the Singapore Copyright Act allows only natural persons, as opposed to an incorporated entity, to be considered as the author of copyright protected works. In support of its contention, APP reasoned that granting an incorporated entity a right to found its title to a copyright protected work on the basis of authorship would be contrary to public policy as it would lead to an indefinite perpetual copyright term.

The Act is silent on whether an author of an original work in which a copyright subsists must necessarily be a living person. The SGHC was not persuaded by APP's assertion as regards public policy: the learned judge analysed the Act and concluded that it provided no guidance on the issue.

Looking however towards precedent for guidance, the SGHC referred to Alteco Chemical Pte Ltd v Chong Yean Wah (trading as Yamayo Stationery Manufacturer) [1992] 2 SLR (R) 915, from which one could infer that an incorporated company could be the author of a copyright protected work in certain circumstances. In Alteco, also a decision of the SGHC, the circumstances before the court made it impossible to identify a single person who could lay a claim to the copyright in the final work. Accordingly the only author who could lay a rightful claim to copyright in the final product was Alpha Techno-Japan, the company which had arranged and paid for the creation of the copyright protected work.

Whilst the Alteco court did not expressly declare that an incorporated company (as opposed to a natural person) was legally capable of being an author of a work, the implication drawn from Alteco by the SGHC in Pioneers was to that effect.

Finding in favour of Pioneers on the issue of authorship, the SGHC referred to Section 131 of the Act, which enshrines a presumption in relation to authorship of a copyright protected work. Applying this provision the SGHC held Pioneers to be the author since its name appeared in all editions and issues of the work. Under that section 131 the burden of rebutting the Section 131 presumption fell upon APP. The SGHC found that, on the evidence, APP failed to rebut this presumption.

Analysis

Subsequent to this decision, the issue of whether an incorporated company is legally capable of being identified as the author of copyright protected work was addressed in the Australian decision in Fairfax Media Publications Pty Ltd v Reed International Books Australia Pty Ltd [2010] FCA 984). The Federal Court of Australia (FCA), in Fairfax, held a corporation to be incapable of founding its title on authorship. The FCA, on the authority of two decision of the High Court of Australia (HCA) Nine Network Australia Pty Limited v IceTV Pty Limited [2009] HCA 14 and Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479, opined that for a corporation to own copyright, it must enlist ‘human agencies’ and there should be evidence of employment that the work was compiled or written in the course of such employment.

Both the HCA and the FCA recognized the involvement of ‘human agencies’ as a sine qua non for a corporation to found its title to a copyright in a work. This commonsense approach is consistent with the general principle that, while an incorporated body is a distinct legal entity, it nevertheless carries out its objectives and functions through human agencies. In contrast, the SGHC in Pioneers relied heavily on the reasoning in Alteco in concluding that an incorporated body can be the author of an original work. The Alteco judge, at [25]–[26], reasoned that:
In those circumstances where it would be impossible to identify a single person who could lay a claim to the copyright of the final work, common sense and the principles of common law as well as equity (constructive trust) and equity combine to hold that the only author who could lay a rightful claim to copyright in the final product was Alpha Techno-Japan.
Alteco does not elaborate on the principles of common law and equity referred to here, which vest authorship in a work protected by copyright to a body corporate.

While the Act does not define or elaborate ‘author’, the SGHC interpreted the statutory silence in Pioneers as the lack of statutory restrictions on recognizing an incorporated body as being an author in a copyright protected work:
there is nothing in principle which would prevent an incorporated company from having authorship in a work (at [31]).
The legal basis for this finding is not identifiable here. As the Act is silent on the scope of the concept of author, the legal basis for interpreting ‘authorship’ to include an incorporated body is clearly not to be found in it.

As copyright is a statute-based right, it follows that is where the scope of ‘author’ of a copyright protected work ought to be found in the relevant copyright legislation. The SGHC however strayed beyond the four corners of the Act in finding that a company may, legally, be an author of a work.

Practical significance

This decision will be welcomed by corporations, especially those involved in the business of publishing compilations, databases of information etc where the final literary work is the product of efforts of several individuals including contractors, agents and employees. A corporate entity may now assert authorship over a work subject to any contractual arrangements affecting the scope of the copyright in the work created.

In addition to being first owner of copyright in works, a corporate entity may also be deemed as the ‘author’ of a work protected by copyright. The decision diminishes the personal role of the ‘author’ by enabling ‘authorship’ of a copyright protected work to vest in a corporate entity.

Thursday, 25 November 2010

Madrid court confirms YouTube's host status

Authors: Enrico Bonadio (City University London) and Davide Mula (Università Europea di Roma)

Telecinco v YouTube, Court of Madrid, 20 September 2010

Citation: Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq183, first published online: November 24, 2010

On 20 September 2010 the Court of Madrid gave its decision in Telecinco v YouTube, affirming that the famous video sharing platform (i) is a hosting provider and (ii) is exempted from liability for the copyright infringement committed by its users.

Legal context

On 20 September 2010 the Court of Madrid ruled on an interesting case involving the provision of video-sharing services by the well-known platform YouTube (Gestevision Telecinco S.A.-Telecinco Cinema S.A.U. v YouTube). The Court interpreted Article 16 of the Ley 34/2002, de 11 de julio de Servicios de la Sociedad de Información y Comercio Electrónico (LSSI). This provision implemented in Spain Article 14 of Directive 2000/31 (the E-Commerce Directive), which offers providers of internet hosting service a shield from copyright liability with regard to content hosted by them, if they (i) do not have ‘actual knowledge’ of illegal activity or information and are unaware of facts or circumstances from which the illegal activity or information is apparent, or (ii) upon obtaining such knowledge or awareness, act expeditiously to remove or to disable access to the information.

Facts

The YouTube video-sharing platform allows users to upload and share videos. These videos often consist of, or contain, content which is protected by third party copyright, such as television shows, movies and musical videos.

The claimants, which belong to the Gestevisión Telecinco group, produce TV programmes and shows in Spain and own the copyright on certain videos posted to YouTube platform. They contended that YouTube actively controls and modifies the information and contents posted by its users and should thus be considered as a publisher and content provider. Accordingly, in the claimants' eyes, YouTube is liable for directly infringing their copyright as it reproduces, distributes, publicly performs and displays Telecinco's audiovisual works.

The claimants maintained that the use policy adopted by YouTube (and accepted by its users) showed that its activity was not limited to mere intermediation services. Moreover, the defendant actively selected videos: this was especially true of the so-called ‘suggestions’, videos stored in a special section of YouTube platform and which are selected by its staff, to the exclusion of other videos.

YouTube countered that the videos in question were exclusively uploaded by its users, being automatically inserted in its web platform: only users therefore should be deemed as content providers and, depending on the circumstances, copyright infringers. The defendant also claimed that it implemented a security policy called Video Identification Beta, which aimed to cut down on the number of infringing videos posted to its platform and which required right holders to cooperate with YouTube by informing it of specific infringing videos. Once an infringing video is identified, the right owner can choose between three options: to block the video, not to request its withdrawal or to try to obtain a royalty from the user by proposing to link an ad message to the video in question.

Analysis

The Court of Madrid analysed the following issues: (i) is YouTube a publisher and content provider or a mere hosting provider which offers just intermediation services? (ii) How does one interpret the concept of ‘actual knowledge’of illegal activity referred to in Article 16 LSSI?

Publisher or host?


The distinction between these two categories is critical. While in the case of a publisher the copyright owner need only bring evidence that the former was at fault (in order to succeed in a copyright dispute), when it comes to internet service providers right owners must prove that the providers were aware of the unlawful activities carried out by their users and failed to act expeditiously to stop the infringement.

The Spanish judge stated clearly that YouTube did not carry out any publishing activities and no evidence in this regard could be inferred by the terms of use accepted by users. Thus a video platform provider cannot be considered as a publisher-provider. This also holds true when it comes to the videos nominated as ‘suggestions’ which, the court stressed, are automatically identified and selected through objective criteria, such as their popularity amid users.

It is the user, said the judge, who takes the decision of using a video and who bears liability regarding its content. YouTube merely uses software which converts videos into a format known as ‘Flash’ and stores them into its servers. This process aims to let other users access the shared videos, as most web users have software that can play video in Flash Format. Yet this is a completely automatic process, without any involvement of the video platform provider (see also UMG Recordings v Veoh Networks, United States District Court, C.D. California, 2008). Further, according to the court, YouTube does not facilitate users in downloading videos, nor gives them specific tools useful for said downloading.

Another circumstance which led the Spanish judge to consider YouTube as a mere hosting provider was the fact that, to date, more than five hundred million videos have been stored on its platform, so it would be technically impossible for YouTube to control all these videos.

The meaning of ‘actual knowledge’

After concluding that YouTube was a hosting provider, the Court of Madrid had to verify whether it could be exempted from liability for the copyright infringement committed by its users under Article 14 E-Commerce Directive and Article 16 LSSI on the basis that it was a host which lacked ‘actual knowledge’ of illegal activity.

The Court explained when knowledge could be imputed to video platform providers such as YouTube. Since no general obligation to monitor data stored or to seek facts indicating illegal activity can be placed on hosting providers (Article 15 E-Commerce Directive), it is the copyright owner who must inform service providers about the availability of infringing videos within their platform (see also FAPAV v YouTube, Court of Rome, 14 April 2010). And the right holder should not do so by merely informing service providers that there exists a generic massive infringement of copyright (indeed, many videos uploaded on the platform might contain content not protected by copyright in some jurisdictions, such as parodies). Rather, they should carefully identify, and report the platform provider on, the specific videos which they deem as infringing (in US case law see Perfect 10, Inc. v CCBill, C.D. California, 2007). That is why Youtube implemented a policy (Video Identification Beta) which allows right holders to detect and report on infringing videos, a policy which the service provider adopted under Articles 14 E-Commerce Directive and 16 LSSI and which has turned out to be very efficient.

This decision resonates with a similar decision of the Court of Appeal of Paris in Dailymotion v Carion, Nord-Ouest Production et al. (4th Chamber, Section A, 6 May 2009). Dailymotion, a YouTube-like video-sharing website, was held not liable for copyright infringement since it lacked the required knowledge of the existence of the illegal content. Here the court observed that the hosting exemption provision requires that notifications should be sent to service providers by copyright holders, indicating precisely which content is alleged to be unlawful, its precise location on the website and the reasons why it is unlawful (in US case law see Viacom v YouTube, US District Court, Southern District of New York, June 23, 2010).

Finally, returning to Telecinco v YouTube, the Court of Madrid stressed that the fact that the hosting service in question is remunerated does not make YouTube liable. Since the E-Commerce Directive was enacted to encourage and boost the development of commercial activities on the internet, it would be wrong to decline to exempt from liability an internet service provider just because it charges for its activities (see also Google AdWords v Louis Vuitton, ECJ, C-236/08 to C-238/08, 23 March 2010).

Practical significance

This ruling appears consistent with previous decisions on the liability of hosting providers, both in Europe and US. It again represents a big win for video platform providers and will further boost their business activity.

Cultural diffusion will be also boosted, as the Court of Madrid impliedly recognized: ‘the challenge of companies in the new economy is not to protect acquired rights, but to create value in spreading contents, as the course of time highlights the sterility of artificial barriers’. This confirms that these platform providers—by hosting videos and other files with the aim of making them available and sharing them—actively contribute to disseminate ideas and information and favour cultural diffusion: these are the Web 2.0 applications, which facilitate information sharing and offer their users the opportunity to interact or cooperate with other peers.

This point echoes the point stressed by another Spanish court in SGAE v Jesus Guerra (Case N. 261/09, Barcelona Commercial Court N. 7, Sentencia N. 67/10, March 2010), a dispute involving other popular internet technologies (peer-to-peer networks): in that case the judge emphasized that these technologies are mere conduits for the transmission of data between internet users and may contribute to cultural diffusion worldwide.

Thursday, 18 November 2010

Bits and pieces

1.  Subscribers to the hard copy version of the Journal of Intellectual Property Law and Practice should note that the December 2010 issue has now been dispatched and that they should be receiving it soon, if they have not already done so. This is the last issue to bear the 2010 silver-grey colour, since the 2011 issues will bear a strikingly different hue (this is not merely a matter of aesthetics -- it helps subscribers tell at a glance whether the issue before them is from the current year or is of some antiquity).


Note: the December 2010 issue has been available online to subscribers since 8 November (see post here) and much of its content was available even before that date via JIPLP's Advance Access service.

2,  JIPLP is seeking articles on the following three subjects:
Holy union or IP opportunity?
* Conflict of interest in contentious and non-contentious IP matters: how can law firms best approach them?
* The impending British Royal Wedding: an appraisal of the IP issues.
* Collection of damages and/or profits by the successful IP litigant: risks and their management.
If you are interested in submitting an article on one of these topics, please email me here and let me know.

Wednesday, 17 November 2010

Ownership and renewal rights in Bob Marley's albums

Author: Eddy Ventose (University of the West Indies - Faculty of Law, Cave Hill Campus, Barbados)

Citation: Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq166, first published online 10 November 2010

Fifty-Six Hope Road Music Ltd v UMG Recordings, Inc. (S.D.N.Y.), 10 September 2010

In the latest litigation saga, the heirs of the late Bob Marley have lost their claim that they were entitled to the authorship in and the renewal rights to copyright of various sound recordings made under three agreements entered into by Bob Marley and Island Records in the 1970s.

Legal context

The issue for determination by the District Court of New York was whether the plaintiff company, owned by the heirs of Bob Marley, was entitled to prevent the renewals by the defendant of certain sound recordings on the basis that they were not owned by the defendant, based on various exclusive recording contracts entered into between Bob Marley and Island Records Inc., the predecessor-in-title to the defendant, but by the heirs of Bob Marley on the basis that authorship of the copyright reverted to them when he died in 1981.

Facts and analysis

In 1972, 1974 and 1975, Bob Marley entered into three exclusive recording agreements with Island, on substantially the same terms: Bob Marley was to perform services exclusively for Island and to produce albums under the agreements. Advances made by Island to Bob Marley would be offset against royalties to be paid to him under all three agreements; so too would be the cost of Bob Marley's use of Island's studios to record his performances. Island had the power to compel Bob Marley's attendance at various locations for the purpose of recording his performances. Although both parties were to agree to the lyrics and music to be recorded, this was subject to the overriding ability of Island to decide at its discretion whether such music was acceptable to it for commercial production and to reject it if it was not. The agreements provided that the sound recordings were to be the ‘absolute property’ of Island, which had the exclusive and perpetual right to exploit the recordings by any means whatsoever throughout the world, excluding the Caribbean. Under the 1974 agreement Island had the right to refuse to accept an album if it determined that such an album did not have sufficient commercial potential. The 1975 agreement contained similar provisions but provided that Media Aides, Bob Marley's company, had the right to determine the times and places for recordings. Two albums, ‘Catch a Fire’ and ‘Burnin’, were released under the 1972 Agreement; only ‘Natty Dread’ was released under the 1974 Agreement; ‘Rastaman Vibrations’ and ‘Exodus’ were released under the 1975 Agreement. These five albums contain some of Bob Marley's best-known songs, including ‘Get Up, Stand Up’, ‘I Shot the Sheriff,’ ‘Three Little Birds,’ ‘No Woman, No Cry’ and ‘One Love’. Subsequent agreements were made with the predecessors of Media Aides in relation to the creation of additional albums and the payment of royalties.

The plaintiffs, Rita Marley, Bob Marley's widow and his nine children, through their wholly-owned company, Fifty-Six Hope Road, brought an action against Universal Music Group Recordings Inc (UMG), the successor-in-interest to Island, to prevent the renewals of copyright registrations in relation to the sound recordings created by Bob Marley and released by Island pursuant to the 1972, 1974 and 1975 Recording Agreements (the Marley Recording Agreements). UMG is a unit of Vivendi SA's Universal Music Group. The plaintiffs claimed that the defendant failed to pay Fifty-Six Hope Road all of the royalties due to them under the Marley Recording Agreements and that the renewal of the copyrights of each of the five sound recordings made pursuant to the Marley Recording Agreements (Sound Recordings) reverted to them under the Copyright Act 1909 upon the death of Bob Marley in 1981 and that they owned them. They also claimed that UMG ignored a 1995 agreement to share royalties with Fifty-Six Hope Road Music Ltd (the Royalties Agreement), and in addition failed to consult them on key licensing decisions such as use of Bob Marley's songs in the ringtone market, namely, on AT&T, Sprint and T-Mobile phones.

The arguments


The plaintiffs argued that because Bob Marley died in 1981, before the copyrights in the Sound Recordings entered the renewal terms, ownership of the renewal term copyrights reverted to them under the then Copyright Act 1909 and, that since they had not conveyed the copyrights to UMG or anyone else, they were the rightful owners of the renewal term copyrights. UMG argued that, through its predecessor-in-interest Island, UMG had at all times been the statutory ‘author’ of the Sound Recordings. UMG argued that the clauses of each of the Marley Recording Agreements demonstrated that the Sound Recordings were ‘works made for hire’ under the 1909 Act and that consequently it owned the copyrights in the initial and renewal terms of the Sound Recordings, regardless of when Bob Marley died.

The decision

District Court Judge Denise Cote began by examining the distinction between the meaning of the term ‘author’ in its common dictionary sense and its meaning as a legal conclusion in copyright law. She claimed that UMG did not deny that Bob Marley was the author of the Sound Recordings in the common dictionary sense, ie in the sense that he was their creator or the source of the Sound Recordings. It disputed that Bob Marley was the author of the Sound Recordings in the legal sense, ie in the sense that Bob Marley was the person in whom the statutory copyright in the Sound Recordings initially vested and to whose heirs the renewal term of the copyright reverted when he died before commencement of that term. UMG claimed that, although Bob Marley was the author of the recordings in the common dictionary sense of the words, the Sound Recordings were ‘works for hire’ and that it was therefore entitled to the financial rewards copyright law traditionally granted to encourage such efforts.

Under section 17 of the 1909 Act, ‘author’ included ‘an employer in the case of works made for hire’, which meant that with respect to works for hire, the employer was legally regarded as the ‘author,’ as distinguished from the creator of the work: Martha Graham, 380 F.3d at 634. The Federal Court of Appeal in Martha Graham accepted that section 17 of the 1909 Act meant that ‘[i]f a work is a work for hire under the 1909 Act, the employer as statutory “author” owns the original term, and the renewal term vests in the employer if the employer makes an application for renewal within the last year of the original term.’ It also pointed out that in determining whether a work was a ‘work made for hire’ under the 1909 Act, the Federal Court applied the ‘instance and expense’ test, stating that the copyright belongs to the person at whose ‘instance and expense’ the work was created. Indeed, the jurisprudence of the Federal Court concerning the status of commissioned works under the 1909 Act created an almost irrebuttable presumption that any person who paid another to create a copyright work was the statutory ‘author’ under the ‘work for hire’ doctrine. Also, once it is established that a work was made for hire, the hiring party was presumed to be the author of the work. That presumption can be overcome, however, by evidence of a contrary agreement, either written or oral. The burden of proof is on the other party to demonstrate by a preponderance of the evidence that such a contrary agreement was reached.

On the facts the judge held that the Sound Recordings were ‘works made for hire’ under the 1909 Act, because the Bob Marley Agreements, inter alia (a) clearly demonstrated that the Sound Recordings were created at the instance of Island and that Island had the right to direct and supervise the manner in which Bob Marley created the Sound Recordings; (b) obligated Bob Marley to produce ‘sufficient acceptable recordings’ to comprise a specific number of albums for Island within the term of each agreement and (c) provided that Island would pay Bob Marley certain advances against royalties for the creation of the Sound Recordings. Having concluded that the Sound Recordings were works for hire, the judge held that Island and its successor-in-interest UMG were presumed to be the statutory author under the 1909 Act: while this presumption can be overcome by evidence of an agreement to the contrary, the plaintiffs presented no evidence of such an agreement and that other clauses in the Bob Marley Agreements reinforced the presumption that UMG was the statutory author of the Sound Recordings, because each of the agreements provided that the Sound Recordings were the ‘absolute property’ of Island, which was entitled to the ‘sole and exclusive right in perpetuity’ to exploit the Sound Recordings by ‘any and every means whatsoever.’ The court stated that its conclusion that the Sound Recordings were ‘works made for hire’ was also consistent with the original copyright registrations and renewal registrations, which listed Island, not Bob Marley, as the ‘author’ of the Sound Recordings.

After considering and rejecting each of the arguments advanced on behalf of the plaintiffs as to why the Sound Recordings were not ‘works for hire’ under the 1909 Act, the judge stated that the terms of the Marley Recording Agreements demonstrated clearly that the Sound Recordings were produced at the instance and expense of Island and were therefore ‘works made for hire’ under the 1909 Act: it was irrelevant that Bob Marley might have maintained artistic control over the recording process. What mattered was that Island had a contractual ‘right’ to accept or reject what he produced. The plaintiffs had failed to introduce any evidence of an agreement to rebut the presumption that Island owned the copyrights in the Sound Recordings from the outset. In particular, whether Bob Marley would have recorded his music even if he had not entered the recording agreements with Island was beside the point: UMG, as Island's successor-in-interest, was the statutory author and owner of the initial and renewal term copyrights in the Sound Recordings. The judge also denied the plaintiff's request for a ruling upholding its claims over digital downloads, pointing to ambiguity in the Royalties Agreement. She directed the plaintiffs and UMG directed to enter into court-supervised settlement talks, the conference for which was scheduled for October 29.

Practical significance

The 1909 Act, repealed and replaced by the Copyright Act 1976, continues to apply in relation to works created before 1 January 1976, the date the 1976 Act came into effect. Under the 1909 Act, the term of copyright was for an initial period of 28 years, which could be renewed for another 28 years. The renewal could only be properly done if it was registered by the author in the last year of the first initial period, failing which the author would lose copyright. The 1976 Act extended the renewal term of works created before 1 January 1976 to 47 years, which was subsequently increased to 67 years by the Copyright Term Extension Act 1998. The author was the person entitled to the renewal of copyright for 67 years, subject to one major exception for ‘works made for hire’. In relation to such works, the right to renew after the first term of 28 years was not vested in the person who created the work, but to the person who was the proprietor at the end of the first term, or who had obtained copyright from them. The 1976 Act ‘work for hire’ falls into two categories, namely: (a) works prepared by an employee within the scope of his or her employment; or (b) works which fits into one of nine categories stipulated in the Act and is in writing signed by the parties acknowledging that the work is a ‘work for hire’.

This decision does not mark a shift of emphasis in the principles to be applied in determining when a work is a ‘work for hire’. It does, however, highlight the potentially harsh effects that may result if the work is so defined to allow the proprietor an additional 67 years of copyright protection to the exclusion of the heirs of the creator of the work.

Monday, 15 November 2010

Manufacture or repair?

Authors: Brian Whitehead and Richard Kempner (Kempner & Partners LLP)

Citation: Journal of Intellectual Property Law & Practice (2010) doi: 0.1093/jiplp/jpq167, first published online: 9 November 2010

Schütz (UK) Limited v Werit UK Limited, Protechna SA [2010] EWHC 660 (Pat), 31 March 2010

The Patents Court of England and Wales has confirmed that there is no free-standing right to repair in patent law, and has provided useful guidance for assessing whether repairing or reconditioning a patented product amounts to patent infringement.

Legal context

By s. 60(1)(a) of the Patents Act 1977 a product patent is infringed by making, disposing or offering to dispose of, using or importing the protected product, or keeping it for disposal or otherwise, without the consent of the patentee. This is a wide range of activities, but the concepts of repairing or reconditioning products are not specifically addressed in the Patents Act. Accordingly it is necessary to decide whether these acts constitute ‘making’ a patented product.

Facts

This case relates to a type of container, used for transportation of liquids, known as an intermediate bulk container (IBC). This consists of an outer protective cage and a removable plastic inner bottle in which the liquid is held. In some IBCs, the bottle can be replaced when it becomes unusable. IBC manufacturers sell replacement bottles, but there is also a market for replacement bottles produced by manufacturers other than the manufacturer of the original IBC. Delta reconditioned used IBCs by removing the old bottle, repairing the cage as appropriate, and fitting a new bottle. Delta purchased its replacement bottles from Werit, the first defendant. The reconditioned IBCs were then sold in competition with the original manufacturers' products.

Schütz, the owner of European Patents (UK) 0 370 307 (‘307’) and 0 734 967 (‘967’) relating to IBCs, sued Werit for secondary infringement under s. 60(2) of the Patents Act 1977 and (in separate proceedings) Delta for primary infringement.

Various issues arose in the claim, including the validity of the patents, and whether Schütz's cages fell within the scope of the patents. The latter issue was relevant because repairing a cage could not constitute infringement if the cage itself did not fall within the scope of the patents. Both patents were upheld as valid, although it was held that only the 967 patent was potentially infringed by use of Schütz's cages to produce reconditioned IBCs—Schütz's cages did not fall within the scope of the 307 patent. Of particular interest is the judge's analysis of whether Delta's activities constituted patent infringement: did Delta's activities constitute ‘making’ a product which fell within the claims of either patent?

Analysis

The leading case on whether an activity constitutes ‘making’ a patent product is United Wire Ltd v Screen Services (Scotland) [2001] RPC 24. That case concerned United Wire's patents claiming heavy duty screen assemblies for filtering well drilling mud. The products consisted of two main parts: a filter mesh and a supporting frame. Screen Services reconditioned worn out screen assemblies, originally manufactured by United Wire, by repairing the frames and fitting brand new mesh. Both patents contained claims directed at both the frame and mesh.

Both the Court of Appeal and the House of Lords rejected Screen Services' defence based on an implied right to repair. Lord Hoffmann explained that, for the purposes of patent law, the notions of ‘repairing’ and ‘making’ are mutually exclusive. Any right to repair is therefore nothing more than a residual right, forming part of the right to do whatever does not amount to making the product. The correct test was ‘whether, having regard to the nature of the patented article, the defendant could be said to have made it’. Lord Bingham explained this further, holding that ‘In any action brought by a patentee alleging infringement the crucial underlying question must always be whether what the defendant is shown to have done has deprived the patentee of the full rights to which his patent entitled him’.

The judge in Schütz v Werit, Floyd J, interpreted United Wire as meaning that ‘the correct approach is to ask whether, when the part in question is removed, what is left embodies the whole of the inventive concept of the claim’. Floyd J noted that, if this test was applied to the facts of United Wire, the same conclusion would be reached, because the invention in that case was a combination of both the frame and the mesh.

Applying this approach to the facts, Floyd J concluded that replacing the inner container of a Schütz IBC with a Werit bottle does not amount to making a product which fell within the scope of either patent. This was on the ground that, unlike the situation in United Wire, the inventive concept of the patents resided entirely in the cage, rather than the bottle. After removal of the bottle, the cage still embodies the whole of the inventive concept, and accordingly the addition of a new bottle to an empty cage did not fall within the scope of the patents' claims. The patents were therefore not infringed.

In order to succeed against Werit, Schütz needed to establish that Delta's acts constituted patent infringement. The action against Delta was stayed pending the outcome of this action. Presumably, given the outcome, the patent infringement claims in the action against Delta will now be discontinued, unless this decision is successfully appealed.

Practical significance

There is no free-standing right to repair in patent law. Instead, the issue of whether repairing/reconditioning a patented product amounts to patent infringement must be assessed by considering the particular activities of the repairer in the context of the patent. In most cases, the answer will be straightforward, although in some instances it may be difficult to assess whether the inventive concept is embodied only in the retained part or is a combination of the retained and replaced/repaired parts.

Thursday, 11 November 2010

Profile of JIPLP writers: Emir Aly Crowne-Mohammed

Emir Aly Crowne-Mohammed
In this, the fourth in JIPLP's occasional series of features on its authors, we focus on Canada-based Emir Aly Crowne-Mohammed, who has contributed a total of eight articles and current intelligence notes over the past two years.  Emir Aly tells us:
“For the past few years I’ve been a faculty member at the University of Windsor, Faculty of Law. My research interests lie primarily in intellectual property, gaming law, information technology law and legal education. Most of my research can be found on my SSRN site. Recently, I have also grown increasingly interested in the practical aspects of legal education. In previous years I taught legal research and writing within the Faculty, and this semester I’m teaching a course on contract drafting, which focuses on technology contracting.  My patents course is mainly assessed through a written factum exercise, and my torts class is also assessed primarily through a factum and moot.

Within the world of mooting (or moot court programs), I founded and co-chair the Harold G. Fox Intellectual Property Moot.  And this year I founded and co-chair the Donald G. Bowman National Tax Moot (named after the former Chief Justice of Canada’s Tax Court), and also chair the Black Law Students Association of Canada’s Diversity Moot. All three moots are national competitions open to law students throughout Canada, and elsewhere. My mooting ‘mania’ does not end there. I also run the Appellate Moot Training Program at the University of Windsor, Faculty of Law and have co-authored a book on the subject - The Essential Guide to Mooting (here).

Outside of these research and teaching interests, I’m also a Barrister and a Solicitor, an Executive member of our Faculty Union (VP of Status of Women, Diversity & Equity), a member of the University Senate, and Chair of a Judicial Panel at the University (dealing with academic and non-academic student misconduct). Externally, I sit on the Justices of the Peace Review Council (this has "a mandate to receive and investigate complaints against justices of the peace, review and approve standards of conduct, deal with the continuing education plan and decide whether a justice of the peace may engage in other remunerative work”), and am on the Editorial Board of the Gaming Law Review & Economics (here).

Outside of academia, my main obsession is squash. I can usually be found on the court at least five days a week, with the torn ACL (3x) and meniscus (1x) to prove it. But, I will happily accept all challengers – loser buys the first round (Heineken, Carib or Stella Artois please, and thank you).”

Wednesday, 10 November 2010

IP Provisions of the EU-Central America Association Agreement and Development Issues

Author: Enrico Bonadio (University of Abertay Dundee)

Citation: Journal of Intellectual Property Law & Practice, first published online November 9, 2010 doi:10.1093/jiplp/jpq165


EU-Central America Association Agreement, 19 May 2010

The recent Association Agreement signed between the European Union and Central American countries contains important intellectual property provisions. Some of these provisions have been inserted in the treaty to meet Central American states' needs, especially with reference to technology transfer issues, the protection of public health and the protection of genetic resources and traditional knowledge.

Legal context

On 19 May the European Union (EU) and the six Central American (CA) countries—El Salvador, Guatemala, Honduras, Nicaragua, Costa Rica and Panama—signed an important association agreement. This is the first single regional agreement of the EU to cover political dialogue, cooperation and trade in Latin America. National ratification processes are due to start soon.

With particular reference to trade issues the background logic to this agreement is evident: the EU wants to catch up with the US which signed in 2004 a free trade agreement with CA states and the Dominican Republic since this geographical Spanish-speaking region is commercially and strategically important to the EU.

The association agreement also contains a chapter on intellectual property rights (IPR). The parties are asked to respect certain standards of IPR protection as well as to guarantee an adequate IPR enforcement by making civil, criminal and administrative remedies and measures available to right owners. Most of these provisions complement and integrate the TRIPS Agreement.

In addition to putting emphasis on strong IPR protection (which has been sought more by EU than by the CA negotiators), the agreement also contains provisions specifically meeting the needs of CA countries. The text thus reflects the compromise reached between EU and CA negotiators.

The topics of specific interest to CA states are inter alia (i) technology transfer issues, (ii) the protection of public health and (iii) the protection of genetic resources and traditional knowledge.

Analysis

Technology transfer

The provisions of the agreement regarding technology transfer reaffirm and integrate Articles 7, 40 and 66.2 TRIPS. In particular, according to Article 3 of the IP Chapter, the parties undertake to exchange opinions and information on policies involving technology transfer with a view to facilitating business alliances, licence agreements and outsourcing relationships. The parties also recognize that it is important to create mechanisms which strengthen and promote investments in Central America, especially in innovative and high-tech fields. They also recognize that technology transfer is favoured by training and capacity building activities as well as academic, professional and business exchange programs. The EU is also committed to promote programs aimed at carrying out R&D activities in Central America and to facilitating access to infrastructure and medicines (Article XX of the Agreement).

Protection of public health

Health protection issues are specifically dealt with in Article 2.1 of the IP Chapter. This provision stresses the importance of the Doha Declaration on TRIPS Agreement and Public Health, adopted by the WTO Ministerial Conference in November 2001, which reaffirms flexibility of WTO Member states in relaxing patent protection for better access to essential medicines.

The parties of the treaty also undertake to implement and respect the General Council Decision of 30 August 2003 and the Protocol of amendment to Article 31 TRIPS of 6 December 2005 (Article 2.2 of the IP Chapter). The 2003 Decision introduced a temporary waiver to TRIPS by creating a mechanism to allow WTO members to issue compulsory licences to export generic versions of patented medicines to countries with insufficient or no manufacturing capacity in the pharmaceutical sector; and the 2005 Protocol made permanent that temporary waiver.

Protection of genetic resources and traditional knowledge

Another topic of utmost importance to CA states is the protection of genetic resources and traditional knowledge.

Article 2.4 of the Agreement recognizes the sovereignty of states over their natural resources and the access to their genetic resources pursuant to the 1992 Convention on Biological Diversity of Rio de Janeiro. It also specifies that the parties cannot be prevented from adopting measures aimed at meeting the aims of Rio: (i) conservation of biological diversity, (ii) the sustainable use of its components and (iii) the fair and equitable sharing of the benefits from the use of genetic resources (Article 1 of the Rio de Janeiro Convention).
Further, Article 2.5 stresses the importance to respect and safeguard the traditional knowledge, innovations and practices of indigenous and local communities which are related to the conservation and sustainable use of biological diversity. This provision echoes Article 8(j) of the Rio de Janeiro Convention (which is not expressly mentioned).

Compliance with these principles and provisions is paramount to CA countries, which are biodiversity-rich and are therefore exposed to a major risk, i.e. the risk of misappropriation of their genetic resources and traditional knowledge taken from (and without the prior consent of) local people or farming communities and subsequently patented in industrialized countries (so-called biopiracy cases, of which there have been several in CA). Accordingly, the fact that the association agreement makes reference to the Rio de Janeiro Convention, both expressly (in relation to its main aims) and impliedly (with reference to the protection of genetic-related traditional knowledge), gives a clear message to the EU that its companies and individuals should refrain from taking and developing further genetic resources and associated knowledge from CA and from patenting it in Europe, unless they obtain a prior and informed consent of the community providing the resource in question (see Article 15.5 Convention on Biological Diversity) and share with that community the benefits deriving from the use of said resources.

Another issue of particular interest to CA States is the protection of plant varieties. Article 10 of the IP Chapter reiterates what is already provided by Article 27.2(b) TRIPS and thus leaves the parties free to protect plant varieties either by patents or by an effective sui generis system or by any combination of them. Yet this provision clarifies that there should be no clash between such protection and the right of parties to the association agreement to protect and safeguard their farmers and genetic resources.

In particular Article 10 affirms the right to insert limitations to breeders' rights to allow farmers to save, use and exchange protected seeds or other propagating material. This is the so-called ‘farmers' exemption’ or ‘farmers' privilege’, according to which farmers who have purchased a seed of a protected variety have the right to save seeds from the resulting harvest for planting in the subsequent season as well as to exchange those seeds with other farmers without risk of being sued by the IPR holder. This important exemption allows traditional and age-old practices of farmers: seed exchange is important for purposes of crop and variety rotation (crop rotation is considered a wise practice for many reasons, disease avoidance being a major one) as well as food security.

The insertion of the farmers' exemption is therefore an important result obtained by CA negotiators.
The result is even more striking if we look at other free trade agreements entered into by industrialized countries and biodiversity-rich countries. For example, several free trade agreements concluded by the US oblige the other parties to adhere or to ratify the 1991 version of the UPOV Convention (see inter alia the agreements entered into with CAFTA-DR in 2004, with Chile in 2003 and Colombia in 2006). Also the 2008 Economic Partnership Agreement between EU and the members of CARIFORUM provides that the parties must consider acceding to the 1991 UPOV Convention.

It has been important for CA countries not to accept an obligation to adhere to the 1991 version of the UPOV Convention (only Costa Rica so far has done so), since it strongly limits the farmers' exemption and is not considered as meeting biodiversity-rich countries' needs: in particular it does not authorize farmers to exchange seeds with other farmers for propagating purposes, but merely authorizes them to save and use seeds for propagating purposes on their own holdings within certain limits and subject to the safeguarding of the legitimate interests of the breeder.

Practical significance

The provisions of the EU-CA Association Agreement analysed here are expected to have a positive impact on the Central American social, economic and agricultural system.

Technology transfer and access to medicines will be facilitated. Yet it is in the field of genetic resources that CA states have obtained the most important negotiation results. Stressing, in an IPR set of rules, that patent protection must not interfere with countries' rights to protect their genetic resources under the Convention on Biological Diversity is a good point, taking into consideration that CA is biodiversity-rich (seldom do IPR treaties include rules protecting genetic resources). Linking IPR with the protection of biodiversity—as the EU-CA association agreement does—is far-sighted and will probably help prevent the misappropriation of genetic resources.

The insertion of a broad ‘farmers' privilege’ into the association agreement is also beneficial to CA countries as it will allow farmers to continue carrying out wise traditional practices, such as seed exchange. These practices—which usually take place within the same community and are cooperative rather than profit-oriented—are essential to preserve the vitality of the crops across their different generations, and contribute to genetic diversity and the fight of hunger and poverty (see M. Ricolfi, Interface between Intellectual Property and International Trade: Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), in International Conference on Intellectual Property Education and Training (New Delhi, July 11 to 13, 2001)—Collection of Papers compiled by the WIPO Worldwide Academy (2001), p.80).

Monday, 8 November 2010

Brands, booze and Picric Papers: December special JIPLP now online

The December 2010 issue of the Journal of Intellectual Property Law and Practice is now available online to e-subscribers. The abstracts of each contribution and the list of contents are accessible to everyone (click here for details). This year the December issue contains not one but two Festive Features: "The Posthumous Papers of the Picric Club" (Christopher Wadlow) and Patrick Atkinson and Laurence Kalman's "Brands and booze: a vintage year?".  The respective abstracts of these pieces may be viewed here and here.

This month's editorial focuses on the all-too-often disappointed aspirations of wannabe-licensees of merchandise characters.  It reads as follows:
Cats, dogs, bears, and mice to the slaughter?

Hard shell -- but a soft touch when young
One of the most enduring images that this writer retains from his youth comes from a television documentary feature on leatherback turtles. The programme chronicled the arduous trek from the safety of the ocean deep to the treacherous beaches on which they laid their eggs. Predators, schooled by millennia of inherited knowledge, gathered to attack the newly hatched leatherbacks which scrabbled across the exposed and open sands in an all-too-often futile, fatal run for cover. Only a small fraction of the baby leatherbacks survived to reach the water's edge. Yet for those members of this endangered species which passed this initial ordeal, the reward was great: longevity to the tune of 80 years, amply protected by their thick shells and hides, nourished by a stock of jellyfish for which there was little or no competition.

Returning from the Brand Licensing Europe 2010 Show for the first time since 2005, the image of the turtles was inextinguishably kindled. Here, among the big brand licensing companies with their household names to offer (think Hello Kitty, Muhammad Ali, My Little Pony, and Barbie) were a large number of stall-holders, each offering their own homespun, in many cases quite unknown properties for sale, licence, or some other form of commercialization. Most of the IPs on offer appeared to be cats, dogs, bears, and mice, with a smattering of pigs, rabbits, and ducks. Most were depicted in cloyingly sentimental form, touched up in luminous baby-room pastels, though a few were lovingly naughtified, left scruffy, and unkempt in the hope that, if no parent would take them to heart, they might warm the attention of passing children. Some were sketched, others appeared as photographs or animations. A few had a personality or storyline, but most were devoid of a script or an identifiable ethos: they had nothing to offer but their bodies, as it were.

Going back to my notes from 2005, I confirmed that my perception now was much the same as then. There was, however, one big difference: the properties on offer. Most of the 2005 cats, bears, and so on had simply vanished; they were not in the shops, on TV, or incorporated into electronic or hard copy game formats. A few old directory entries, a battered badge, a sadly unfashionable keyring fob—these evidenced a generation of licensing properties which, like the dinosaurs, had become extinct, but in a far shorter time. Most, like the leatherback turtle, just never made it.

In most cases, a failure to obtain adequate IP protection could not be said to be the problem. Trade mark, design, and copyright are mighty prophylactics against unauthorized copying, but are of little assistance when they attach to creative output that no one chooses to copy or exploit in any other illicit manner. A couple of unwanted teddy-bearers speculated that, had they spent less on their rights registration programme, they would have had more resources, and possibly more energy, to employ in seeking to build relationships with likely licensees.

This point sparked off another observation relating to many of the small-time licensees both in 2005 and now: they had in most cases a clear idea of what they were offering, but only a relatively small notion of what it was that licensees of a branded character, collectively or individually, might be looking for. For a manufacturer of, say, stationery products and school wear for children in the 9–11 age range, for example, it cannot be assumed that any one bear is exchangeable for another as a pencil-case emblem. The ethos of the merchandized character is at stake too: is it backed by a series, a song? Is it a good-conduct bear or is it streetwise? Is it a bear to be coddled and protected, like Paddington? Intellectually non-threatening, like Winnie-the-Pooh? Does it confer smartness by association, like Yogi? Or is it environmentally friendly and safety-conscious, like Smokey?

Yet, for the small proportion of creators who get it right, the rewards are immense. Leatherbacks last just 80 years but trade marks, properly cared for, are forever and provide comfort long after the copyright and design rights are just faded memories of youth. Mickey Mouse, at 82, is four years junior to Winnie-the-Pooh and nearly a decade younger than Felix the Cat. Healthy octogenarian and nonagenarian licence products can thus continue to feed on a renewable stock of children's dreams, often fuelled by parental nostalgia, netting a steady stream of income. But what is the secret of their eternal youth? That must be the subject of a subsequent editorial.