A message from the Editor

I'd like to thank the journal's contributors for the articles, Current Intelligence notes and other contributions which they have made this year. Since so many JIPLP authors are drawn from the ranks of its readers, the journal has an ideal opportunity to let its contents reflect its readers' prime interests and concerns within the very wide field which is intellectual property today. This in turn is reflected in the journal's buoyant level of subscriptions and high rate of renewals -- no mean feat in a period which, if no longer recessionary, is still only in the early stages of recovery.

I also have some cautionary words. Plagiarism, and its unwelcome cousin -- making use of other people's work without due acknowledgement -- are practices which are endemic in a world which fails to respect intellectual property. Our readers are entitled to be spared from their worst effects, but no journal, not even JIPLP, enjoys an automatic immunity from the unauthorised lifting of text and content from their original authors.

JIPLP affirms its commitment to take a firm line against plagiarism and failure to attribute sources. If any author or reader suspects that he or she is the victim of either of these practices, please email me immediately with as many details as are available, so that steps can be taken to attribute uncited sources and to acknowledge the true authorship of text and tables which have been copied without permission.  Any author who perpetrates these practices will be unwelcome within the JIPLP community and can be assured that this journal will not want to publish further content from a tainted source.

A new issue -- and a guest editorial on IP and the environment

Another year, another journal cover colour. The livery chosen for JIPLP's cover in 2011 is a handsome purple, depicted on the right.  While the January 2011 issue is available online in full to subscribers, its contents are available to everyone and you can check them here.

The editorial for this issue is a guest piece, written by Editorial Board member and Scottish solicitor Gill Grassie (Maclay, Murray & Spens, LLP).  It reads like this:
"Pooling together: IP as hero or villain?

Many stimuli exist for developing sustainable new clean green energy resources and the technologies they involve. Traditional fossil fuels are running out and nuclear is often viewed as unsafe. Crucially, global warming has become an accepted priority for the world to tackle. As the 2012 Kyoto Protocol deadline for reducing greenhouse gas emissions approaches, the focus increases on developing clean, sustainable, energy resources. In Scotland, the First Minister has set a target of 80 per cent electricity generation from renewables by 2020. These factors combine to create a perfect storm in which the renewables industry has an opportunity to take centre stage as the realistic solution to the imminent global crisis.

Can the IP regime play a key role in delivering these ambitious goals, thus becoming a world ‘saviour’, or will it be portrayed as the villain? Can we balance exploiting an organization's technology for monetary gain using the traditional IP system with removing barriers to innovation to establish viable green energy resources? IPRs (particularly patents) are often criticized as inhibiting innovation and as being morally reprehensible. Is this the chance to shake these perceptions off?

At a relatively early stage of the emerging renewables market where some basic technologies are already old, investors and businesses want to protect their investments/technologies by securing patent protection, hence the sharp rise in patent filings in various different green energy sectors since the late 90s (wind energy patent applications in 2007 were around 1400 compared to about 100 in 1995; carbon capture energy technology patent filings have trebled since 2000). Stronger government policies in key markets and growth in private investment have encouraged this rise.

Patent prosecution can take a long time. To accelerate the process, the UK and the USA have introduced a fast-track process to examine green technology patents with a claimed turnaround of 12 months. Whether this timescale is achieved is another question—and patent protection is not enough on its own.

Other initiatives currently under trial include the introduction of green patent databases which collate all so-called ‘green’ patents into one database. This will consist of a fast-tracked patents application process, creating a general pool as opposed to collating specialized sectoral technology (wind, tide, hydro, carbon capture, photovoltaics, biomass, and their subsets). These are all steps in the right direction, but could IP mechanisms play a more prominent role in accelerating these technologies?

If ‘The whole is greater than the sum of its parts’, why not cooperate on R&D? The financial rewards may not be as large but the sharing of knowledge may make the set targets more quickly achievable. One mechanism of potential benefit is patent pooling to create a commercial vehicle facilitating licensing and cross-licensing of the technologies. This tried and tested mechanism has been at the forefront of the telecommunications sector where 3G technology has been pooled successfully and 3G networks are now standard across the industry. Other examples include the pooling of DVD patents among industry players including Samsung, Hitachi, and Panasonic. Perhaps one reason why patent pools have succeeded is that they create a win-win situation in the process of patenting technology and then marketing it. Even patent owners who lack the means to exploit their patent benefit through the licensing of their patented technology to those able to bring it to market; potential licensees benefit from greater time- and cost-efficient licensing; and all parties in the pool have access to the latest technology which can springboard speedier innovation, in turn conferring benefits on society as a whole.

Patent pooling is not an alien concept to ‘green’ industries. In 2008, IBM co-founded the Eco-Patent Commons, a non-commercial pool, administered by the World Business Council for Sustainable Development. Companies donate relevant patents to the pool, which anyone can access. Each patent donor agrees to take no action against users. Pools on this model might be set up specifically for particular types of renewable energy technology.

On the downside, pools might reduce competition both between the parties and their products, stifling innovation rather than encouraging it. Where there is a global drive to develop clean, sustainable, energy resources, governments could incentivize participating organizations. This might remedy worries of innovation slowdown. Concerns regarding reduced competition could be addressed in each pool's headline terms.

Since renewable energy will be a key market for years to come, traders in this area must be able to exploit their technology while contributing to society through further innovation. To achieve that (and hero status?) the challenge for the IP regime and its users is that both must be innovative".

An ‘active ingredient’ of a drug must be present when the drug is administered

Author: Bart A. Gerstenblith (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC)

PhotoCure ASA v Kappos, 603 F.3d 1372 (Fed. Cir. 2010), District Court, Eastern District of Virginia

Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq188, first published online on 21 December 2010

The term ‘product’ in 35 USC §156(a) means the active ingredient that is present in a drug when administered, not necessarily the ‘active moiety’ of the drug.

Legal context

This appeal from a summary judgment decision of the US District Court for the Eastern District of Virginia concerns the interpretation of the patent term extension provisions of the Drug Price Competition and Patent Term Restoration Act 1984 (the ‘Hatch-Waxman Act’). These provisions are codified at 35 USC §156. In particular, this decision addresses the statutory meaning of the terms ‘product’ and ‘active ingredient’ in section 156, and whether ‘active ingredient’ is synonymous with ‘active moiety’. It also addresses the scope of deference to which an agency that is charged with administering a statute is entitled in these circumstances.


MAL hydrochloride and ALA hydrochloride
Methyl aminolevulinate hydrochloride (MAL hydrochloride) is the active ingredient in the drug Metvixia, which is used in photochemotherapy or photodynamic therapy to treat actinic keratoses—precancerous cell growths on the skin. When Metvixia is applied to the skin, MAL hydrochloride concentrates in the cells to be treated. The cells use MAL hydrochloride to form an excess amount of protoporphyrin IX (Pp), a naturally-occurring light sensitive compound. Pp is activated on exposure to light, and a chemical reaction ensues that kills the precancerous cells.

MAL Hydrochloride was patented as a new chemical compound in US Patent No. 6,034,267 (the '267 patent). Its patentability was based on its improved therapeutic properties as compared with aminolevulinic acid hydrochloride (‘ALA hydrochloride’), a known compound. ALA hydrochloride was previously reviewed and approved by the US Food and Drug Administration (FDA) for the same therapeutic uses as MAL hydrochloride. MAL is the methyl ester of ALA. The '267 patent describes the biological and physiological advantages of the MAL product over the ALA product, including that MAL is better able to penetrate skin and other tissues, is a better enhancer of Pp production than ALA, and provides improved selectivity for the target tissue to be treated.

FDA approval and PTO denial of patent term extension
Metvixia was considered a ‘new drug’ by the FDA and required full review and approval prior to its commercial marketing and use. Following FDA approval, PhotoCure applied for a patent term extension of the '267 patent under the Hatch-Waxman Act. The US Patent and Trademark Office (PTO) consulted with the FDA. The FDA advised the PTO that MAL hydrochloride is an ester of the previously FDA-approved ALA hydrochloride, and expressed its view that the requirements of 35 USC §156(a)(5)(A) were not met.

The PTO subsequently denied PhotoCure's requested term extension, stating that the ‘active ingredient’ in section 156(f)(2) does not mean the product that was approved by the FDA; rather, it means the ‘active moiety’ of that product. The PTO's view was based on its conclusion that MAL hydrochloride is the ‘same product’ as ALA hydrochloride because the ‘underlying molecule’ of MAL is ALA, and that ‘ALA is simply formulated differently in the two different drugs’. Accordingly, since the same ‘product’ was previously approved by the FDA, the subsequent approval of Metvixia was not the first commercial marketing or use of that ‘product’.

The District Court decision
The district court disagreed with the PTO. In particular, the court considered (1) the separate chemical composition, (2) the separate patentability, and (3) the separate FDA approval of the drugs. The district court found that MAL hydrochloride, not ALA hydrochloride, is the active ingredient in Metvixia® under section 156(f)(2)(A). Accordingly, the statutory requirements for patent term extension were satisfied because the MAL hydrochloride product was subjected to a full FDA regulatory review prior to its commercial marketing and use, under section 156(a)(4), and this FDA review permitted the first commercial marketing and use of the MAL hydrochloride product, under section 156(a)(5)(A). The district court thus held that the PTO's ruling was ‘not in accordance with law’, and that the '267 patent on MAL hydrochloride was subject to term extension.


The Director of the PTO appealed to the Federal Circuit, arguing that the district court incorrectly interpreted the statutory terms ‘drug product’ and ‘active ingredient’. The PTO asserted that (1) the statutory term ‘drug product’ means ‘active ingredient’, and ‘active ingredient’ means the ‘active moiety’ of the drug—the part responsible for the pharmacological properties—not the product that is actually present in the approved drug; and (2) that the agency's interpretation is entitled to deference.

The Federal Circuit rejected the PTO's arguments. Initially, it noted that the Patent Term Extension statute was enacted to restore a portion of the patent life lost during the lengthy procedures associated with FDA's regulatory review in order to preserve the economic incentive for development of new therapeutic products. It then reiterated its holding in Glaxo Operations UK, Ltd. v Quigg, 894 F.2d 392, 393 (Fed. Cir. 1990), that ‘product’ in section 156(a) means the product that is present in the drug for which federal approval was obtained. As explained by the district court, and repeated by the Federal Circuit, a compound can only qualify as the active ingredient of a drug if that compound itself is present in the drug when administered (see Hoechst-Roussel Pharms., Inc. v Lehman, 109 F.3d 756, 759 n.3 (Fed. Cir. 1997): ‘For purposes of patent term extension, this active ingredient must be present in the drug product when administered’). As correctly interpreted, the active ingredient of Metvixia was MAL hydrochloride, not ALA hydrochloride, since ALA was not present in the drug when administered. The Federal Circuit also noted that even under the PTO's incorrect statutory interpretation, the approval of Metvixia would meet the criteria for patent term extension because it was not disputed that (1) the pharmacological properties of MAL differ from those of ALA (as explained by the '267 patent); and (2) MAL hydrochloride is a different chemical compound from ALA hydrochloride. Those differences thus warranted separate patenting and separate regulatory approval even though their chemical structures are similar. Accordingly, the Federal Circuit held that they are different ‘products’ with different ‘active ingredients’ as those terms are used in section 156.

The Federal Circuit also addressed the PTO's argument that Pfizer Inc. v Dr. Reddy's Laboratories, Ltd., 359 F.3d 1361 (Fed. Cir. 2004), supported the PTO's statutory interpretation of ‘active ingredient’ as ‘active moiety’. Specifically, it noted that Pfizer did not concern the Glaxo holding that the active ingredient must be present in the drug product as administered. Rather, the issue in Pfizer was whether infringement of an extended patent on the drug amlodipine was avoided by changing the salt form of amlodipine. Also, Pfizer did not hold that an extension is not available when an existing product is substantively changed in a way that produces a new and separately patentable product having improved properties and requiring full FDA approval before commercial marketing and use. Rather, the disputed product in Pfizer was a salt that was included in Pfizer's patent claims and for which Pfizer had provided data to the FDA. Thus, according to the Court, its previous decision in Pfizer did not change the law of section 156 and did not concern a different, separately patented product requiring full regulatory approval.

Finally, the Court found that the PTO's erroneous statutory interpretation was not entitled to deference under Skidmore v Swift & Co., 323 US 134 (1944), or Chevron, USA Inc. v Natural Resources Defense Council, Inc., 467 US 837 (1984). Chevron did not apply because the statute is unambiguous and Skidmore deference was not warranted because the PTO's interpretation was neither persuasive nor consistent. Thus, even if some deference were owed to the PTO's interpretation, neither Chevron nor Skidmore permits a court to defer to an incorrect agency interpretation.

In sum, the Federal Circuit found that the PTO's statutory interpretation, which would have excluded MAL hydrochloride from patent term extension, was contrary to the statutory purpose because MAL hydrochloride is the active ingredient of a new and improved drug product. Accordingly, it affirmed the holding of the district court that the '267 patent on MAL hydrochloride is subject to term extension.

Practical significance

The Federal Circuit's decision endorses the meanings of the terms ‘product’ and ‘active ingredient’ as discussed by the Court in Glaxo. It also clarifies how its decision in Pfizer, which many (including the district court) felt was in conflict with Glaxo, should be understood going forward. The Court seemingly took a narrow view of its holding in Pfizer, by focusing heavily on several key facts in that case that were distinct from those presented here. Even with this narrowing, however, it is hard to rectify Pfizer's repeated endorsement of the term ‘active ingredient’ meaning ‘active moiety’ (see Pfizer, 359 F.3d at 1366, quoting the FDA's statutory interpretation of ‘active ingredient’ as ‘active moiety’ and the FDA's definition of ‘active moiety’), with the results of Glaxo and those reached here. As pointed out by PhotoCure's appellate brief, the result in Pfizer may be more reasonably understood as an issue of fairness rather than statutory interpretation.

In considering whether FDA approval of a new drug warrants patent term extension, this decision clearly places importance on (1) whether the new drug and an existing drug share similar properties, (2) whether the FDA required a full regulatory review of the new drug, (3) whether the PTO considered the new drug separately patentable, and (4) whether the active ingredient that is actually present in the new drug when administered is also present in a previously approved drug when administered.

Court of Justice rules on scope of fair compensation for private copying exceptions

Authors: Ben Allgrove, Michael Hart and Victoria Dockrell (Baker & McKenzie)

Padawan SL v Sociedad General de Authores y Editores de España (SGAE) Case C-467/08, Court of Justice of the European Union, 21 October 2010

Journal of Intellectual Property Law & Practice (2010), doi: 10.1093/jiplp/jpq189, first published online on 17 December 2010

The Court of Justice of the European Union has ruled that the concept of ‘fair compensation for copyright levies must be interpreted uniformly in all Member States which have a private copying exception and must be calculated on the basis of the criterion of the harm, if any, caused to authors of protected works by that exception, so levies should not be applied to equipment, devices and media not made available to private users and clearly reserved for uses other than private copying’.

Legal context

Under Article 2 of Directive 2001/29 (the Information Society Directive), authors, producers and performers have an exclusive right to control the reproduction of their works. However, Article 5(2)(b) providesthat Member States are entitled to provide for a private copying exception to infringement where the copying is ‘made by a natural person for private use and for ends that are neither directly nor indirectly commercial’ provided that the rightsholders obtain ‘fair compensation’ for that use to the extent it is not restricted by technological measures. Such an exception to infringement has been implemented in the vast majority of the 27 EU Member States, with only a few, including the UK and Ireland, electing not to do so. The EU Member States with such exceptions have provided for the required ‘fair compensation’ by giving statutory backing to copyright levy regimes which apply a levy to various forms of reproductive media and/or equipment used for such activities. The types of equipment and media to which such levies are applied and the rates of such levies vary considerably between the Member States.


SGAE, a Spanish collecting society, applied a levy to the sale of all digital reproductive devices, equipment and media (the ‘Equipment’), payable by retailers, manufacturers and importers into Spain of this Equipment. Under this system Padawan, who markets such Equipment including CD-R, CD-RW, DVD-R, and MP3 devices, was required to pay a levy on its products. Padawan refused to pay the demanded levy claiming that the indiscriminate application of the levy to its products was unfair given that the majority of its customers used the Equipment in question for professional and commercial use, and thus did not fall under or benefit from the private copying exception in Spanish law. Having failed at first instance, Padawan appealed and certain questions were referred to the Court of Justice for the European Union (CJEU), which ruled as follows:
‘1. Fair compensation’ is an EU concept which must be interpreted in a uniform manner across all Member States, even though Member States have the right to choose the system of collection.
2. Whatever the system of fair compensation implemented by a Member State, it must ensure a fair balance is struck between rights holders and those liable to pay the compensation. Fair balance means that fair compensation is calculated on the basis of any harm caused to authors through the private copying of their works. Where Equipment capable of copying is supplied to natural persons as private users, the fact of this harm will be presumed.
3. There must be a link between the application of a levy and the presumed use of the equipment or media on which it is levied.
4. The indiscriminate application of a levy to undertakings and professional persons who clearly purchase digital reproduction devices and media for purposes other than private copying is not compatible with the concept of ‘fair compensation’ in the Directive.
5. The decision as to whether or not the specific Spanish levy in question has been imposed indiscriminately by SGAE on all digital reproduction equipment, devices and media is a matter for the referring court'.

This decision has attracted considerable comment in the market from both sides of the debate on copyright levies. Rights holders are heralding the ruling as confirmation of the legitimacy of levy regimes. Véronique Desbrosses, Secretary General of the European Grouping of Societies of Authors and Composers saying: ‘What is very positive is that the court clearly gave support to the compensation schemes that exist in most member states.’ On the other side Bridget Cosgrave, Director-General of DIGITALEUROPE, an industry group for consumer electronics manufacturers, says: ‘The most important result to come out of this decision is that lawmakers recognise the unfair and untransparent methods used by collecting societies when calculating and claiming copyright levies. The judgment presents an opportune moment to address the other inadequacies in the current regime.’ Can these views be reconciled?

The decision reaches a number of conclusions which challenge the existing approach to copyright levies. The CJEU's clear statement that the concept of ‘fair compensation’ is an autonomous EU law concept which must be interpreted uniformly is significant. Copyright levies vary widely across Europe without any clear uniform approach being applied across Member States. The CJEU decision has laid down a marker that a copyright levy can only be fair compensation if it is applied uniformly in all Member States. This raises the prospect of future challenges to levy regimes where there are material inconsistencies between Member States.

More significantly, the CJEU's confirmation that fair compensation must be linked to the harm, if any, suffered by the rightholder arising from the private copying exception sends the message that such harm must be demonstrated and related to both the application and rate of the levy. The CJEU has therefore opened the door for those subject to copyright levies to demand that the collecting society identify and quantify the harm for which the levy seeks to compensate. It clarifies that levies are not a licence but a means of compensation for demonstrable harm and also seems to preclude a restitutionary justification for copyright levies. If that is the case, does a rights holder suffer any harm if a lawful purchaser of a CD format shifts the tracks on that CD to an MP3 player? Is there really a lost sale? Up until 2008, German copyright levies applied a different tariff on printers depending on their speed and whether they printed in colour or black and white. These sort of criteria for levies would seem to have no basis in a regime rooted in addressing harm to the rights holder.

In contrast, rights holders will welcome the CJEU's ruling that there is, in effect, a presumption of harm, though that still leaves open the question as to how one quantifies that harm. Nor does the CJEU tell us whether or not that presumption is rebuttable.

Manufacturers will also welcome the CJEU's ruling that levies are not fair if they are applied indiscriminately. In this case, the CJEU left it to the referring court to decide if Padawan's sales of media to professional users were sales to users who would not benefit from the private use exception in Spanish law. If so, then the levy would be indiscriminate and contrary to European law. This ruling offers opportunities for pushback where media is primarily targeted at business customers.

The CJEU has not clarified the important threshold question in this area. It says that, to justify a levy as fair, a collecting society needs to show that the media/device is capable for being used for private copying: ‘It follows that the fact that that equipment or devices are able to make copies is sufficient in itself to justify the application of the private copying levy, provided that the equipment or devices have been made available to natural persons as private users’ (56). But it later qualifies this low threshold by saying that levies are not justified where devices/media are ‘clearly reserved for uses other than private copying’ (59). This takes us no further towards answering the question of where the line between these two positions is.

The CJEU's analysis of the threshold question is more liberal than the approach previously taken by Member State courts in this area, in particular in Germany. For example, in 2007 it was held in Germany that certain levies could only apply to a single function HP printer where that printer was used in conjunction with a PC and a scanner in a similar way to a traditional photocopier. In doing so the standard being applied was a higher one that merely that the device in question was capable of being used for copying, which the printer clearly was.

Practical significance

While this decision will not entirely satisfy either side of the debate, collecting societies may be more concerned about it; the ruling is likely to embolden those who are asked to pay levies to mount challenges which themselves might ultimately have to be resolved by the CJEU. In particular, further challenges to the application of levies to equipment or media clearly not used for private copying are likely as the CJEU has clearly ruled that such levies are not justifiable. One can expect more heated negotiations with companies with mixed B2C and B2B models.

This also raises the interesting question as to whether those companies that have paid levies on such products are entitled to claim back payments which have been made under what is, in effect, a mistake of law. Given that it is estimated that the consumer electronics industry alone paid some €2bn in levies in 2009, there is a significant enough amount of money involved for people to be taking a close look at this.

SGAE v Padawan is also a precursor to another CJEU reference, Stichting de Thuiskopie v Mijndert van der Lee and Others (Case C-462/09). In that case the CJEU will consider whether both Dutch and German levies are payable when a Dutch online retailer sells products into Germany. If the answer to that question is no, then positioning of services for copyright levy purposes will become a major strategic decision for businesses.

It currently appears that it will be the CJEU rather than the Commission which will lead the way to clarification of the confusion and serious lack of harmonization that exists in the copyright levy world. Previous considerations of intervention by the Commission have not proceeded. Indeed, it has stated that levies will not form part of the framework directive on collective rights management on which it is currently working (expected March/April 2011). This decision seems to indicate that the CJEU is willing to rise to this challenge and its future decisions should be watched with great interest.

Holy Smokes! British American Tobacco defeats trade mark challenge in the Commonwealth Caribbean

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

Philip Morris Products S.A. v British American Tobacco (Brands) Limited, Civil Appeal No. 1 of 2009, In the Matter of the Trade Marks Act, Cap 257 Laws of Belize, Revised Edition 2000

Journal of Intellectual Property Law & Practice (2010), doi: 10.1093/jiplp/jpq185, First published online 16 December 2010

Philip Morris (PM) lost its challenge in the Supreme Court of Belize to the application for registration by British American Tobacco (BAT) in Belize of its cigarette label EMBASSY as a trade mark under the Trade Marks Act, Cap 257, Laws of Belize (BTMA).

Legal context

The first question for the Supreme Court of Belize was whether the MARLBORO trade mark owned by PM was similar to BAT's EMBASSY trade mark, which was being registered for goods identical or similar to those in respect of which MARLBORO was protected, and there existed a likelihood of confusion on the part of the public, which included a likelihood of association with the MARLBORO trade mark, contrary to section 37(2)(b) BTMA (section 5(2) of the UK Trade Marks Act, 1994 (TMA)/Article 4(1)(b) of the Trade Mark Directive 1998. The second question was whether the MARLBORO trademark was a mark with a reputation which, by section 61 BTMA, was protected under Article 6 bis of the Paris Convention for the Protection of Industrial Property. A third question considered was whether MARLBORO was protected under section 37(3) BTMA, which provides that a trade mark which is (a) identical or similar to an earlier trade mark and (b) is to be registered for goods and services which are not similar to those for which the earlier mark is protected, shall not be registered if, or to the extent that, the earlier trade mark has a reputation in Belize and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier mark (see section 5(3) TMA and Article 4(4)(a) Directive).

Facts and analysis

BAT applied to the Belize Intellectual Property Office (BIPO) for registration of its cigarette label EMBASSY as a trade mark. This was opposed by PM, who argued that the EMBASSY trade mark was substantially identical to or deceptively similar to its registered trade mark and the goods in respect of which the BAT application was made were identical or similar to those for which its MARLBORO mark was protected. PM also argued that its mark had acquired a reputation in Belize and that the use of the EMBASSY trade mark was confusingly similar because a similar design to its MARLBORO mark appeared at the bottom of the BAT mark. BAT claimed that its trade mark was not identical with or similar to PM's mark and as such was not likely to deceive or cause confusion in Belize.

Notwithstanding its concession that the MARLBORO mark might have acquired a reputation in Belize, BAT argued that both marks have co-existed peacefully in many markets around the world. The Registrar rejected the opposition on the basis that, while the goods were identical, the marks were not similar and there was thus no likelihood of confusion. PM appealed to the Supreme Court on the basis that, having accepted that PM's mark was a well-known mark under the Paris Convention, the Registrar should have considered the legal implications of that added protection which arose by reason of section 37(3) BTMA and section 61(2) BTMA (which incorporated Paris Convention protection for marks with a reputation).

The decision

Chief Justice Conteh accepted that, given the finding of the Registrar that the goods of the parties, such as cigarettes and cigars, were identical, there might be no need for the Registrar to refer to section 37(3) BTMA which dealt with identical or similar marks on dissimilar goods and services. He pointed out that ‘this was a limited view by the Registrar, given the admitted reputation of Philip Morris's trade mark. He ought to have considered sub-section (3) of the Act’. I am uncertain why this was necessary: a finding that goods are identical precludes examination of section 37(3) BTMA, which refers to dissimilar goods only. Conteh CJ continued that the Registrar should have taken into account the distinctive character of the MARLBORO trade mark and its admitted reputation when determining whether the similarity or identity between PM's goods (cigarettes etc) in respect of its earlier trade mark and those goods covered by BAT's (cigarettes) was sufficient to give rise to a likelihood of confusion. This is startling since the Registrar referred to Case C-251/95 Sabel BV v Puma AG for the view that in assessing the similarity of trade marks, the average consumer usually regarded a trade mark as a whole and does not conduct a detailed analysis of it; in conducting an assessment of the visual, aural and conceptual similarities of the trade marks, reference must be made to the overall impressions created by the trade marks while taking note of their distinctive and dominant components. Admittedly, the Registrar did not make mention of the reputation of the MARLBORO trade mark, but this does not undermine his firm conclusion on the facts that the goods in question were identical.

Conteh CJ claimed that section 37(3) BTMA was aimed at preventing dilution of marks with a reputation even where the goods and services to which the earlier mark and the proposed mark for registration were not similar: it enabled an owner of a trade mark in Belize to raise as a relative ground for refusing the registration of another trade mark that was identical or similar to its trade mark for goods and services that are dissimilar, but only where its registered trade mark had acquired a reputation. Citing the decision of the Court of Justice of the European Union in Case C-292/00 Zino Davidoff v Gofkid, Conteh CJ claimed that the ‘additional’ protection afforded by section 37(3) was against dilution of an earlier trade mark even where the goods and services for which the earlier trade mark and the later trade mark were identical (and, presumably, similar too). Thus, to avail of this ‘additional’ (anti-dilution) protection, the proposed trade mark had to be identical with or similar to the earlier trade mark which had a reputation in Belize.

Conteh CJ also claimed that Article 6 bis of the Paris Convention protected well known trade marks from later trade marks which constituted a reproduction, imitation or translation likely to create confusion with that earlier well known trade mark. In doing so he rejected BAT's contention that the protection afforded by Article 6 bis of the Paris Convention applied only to marks that had not yet been registered under the BTMA but which enjoyed significant reputation outside Belize. That approach was too limited and failed to appreciate the breadth of protection that Article 6 bis of the Paris Convention afforded. He claimed that the owner of a mark with a reputation can gain protection under sections 37(1) and (2) BTMA and even under subsection (3) if its conditions were satisfied: the ‘additional’ protection would also extend to that which obtained under Article 6 bis. Conteh CJ accepted that the rationale for this protective regime under these sections was to protect against confusion in the minds of consumers in relation to goods and services covered by an earlier mark such as to lead them to think that those goods and services were the same as those to which the later mark related or that they had a common design.

Would the use of the EMBASSY trade mark constitute a reduction, an imitation or a translation likely to create confusion with MARLBORO, the well-known trade mark? Conteh CJ accepted the Registrar's finding that the respective goods were identical and, having examined the affidavits submitted by the parties and comparing the two trade marks, held that the two trade marks were neither identical nor similar: the inverted tail-end of the ribbon in the EMBASSY mark, even if it were to be placed to the very top of its mark, would not ‘bear the slightest resemblance, identity or similarity with a roof that is inverted’. This inverted roof was an important feature of the MARLBORO trade mark. A finding that the marks were similar or identical was important because that finding was ‘no doubt central to the protective regime of trade mark law’ under sections 37(2), 37(3) BTMA and under Article 6 bis of the Paris Convention. The Registrar, applying Sabel v Puma correctly, thus reached the correct on similarity.

Conteh CJ held that the dominant and distinctive component of the MARLBORO mark was the roof device, whereas that of the EMBASSY mark was its horizontal ribbon. Not only was there no likelihood of confusion but the use of the EMBASSY trade mark in Belize would not take unfair advantage of or be detrimental to the distinctive character (the roof device) or repute of the MARLBORO trade mark. Further, given the nature of the goods, the average consumer did not engage in any detailed analysis of their marks at the point of purchase but requested the products by name. Since there was surely a phonetic and aural world of difference between the two marks, they could co-exist in Belize. The judge was fortified in his conclusion because decisions in Australia, Korea and Colombia have reached the same conclusion in similar disputes between the parties.

Practical significance

Conteh CJ's analysis of section 37(2)(b) BTMA is sound, focusing on the global assessment of the likelihood of confusion. According to the ECJ in Sabel BV v Puma AG, a global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components. That assessment was still necessary as the court then considered section 37(3) BTMA, even if it applied only to dissimilar goods and services.

Conteh CJ assumed that the jurisprudence of the ECJ applied in Belize, although the BTMA was not expressly based on the TM Directive. However, since the BTMA and the TMA are the same in most respects, they have a similar (or perhaps identical) origin. It is an open question now whether the legislative changes made to the TMA as a result of decisions of the ECJ should also be made in Commonwealth Caribbean countries that have modelled their trade mark legislation on the TMA.

The court also considered the applicability of Article 6 bis of the Paris Convention, which did not first require that both trade marks be identical or similar. However, there was still a requirement that the later mark constitute a reproduction, an imitation or translation likely to create confusion in the minds of the public, so the court was not relieved of the obligation to compare the two trade marks.

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".

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.


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.

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.


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.


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.

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.

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.

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.


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?


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.

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).”

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.


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).