The best IP judgment (n)ever written

Back in August JIPLP launched a competition (details here) to find the Best IP Judgment that has Never Been Written.  The winner should have been announced some not inconsiderable time ago, and I apologise for the delay -- which is entirely of my own making.  I have been in very much in two minds what to do about judging the entries, since the competition did ask for submissions relating to the best IP judgment that had never been written, thus inviting entrants to indulge in some creative writing, but some of the most entertaining and enjoyable entries were from people who gave an account of the best IP judgment that had ever been written.  This was not the end of my woes: JIPLP also received entries that entertainingly described the terms of the best judgment that had never been written (so far, so good) -- but the subject was not IP.

In the end, having read the rules carefully, I concluded that it all came down to a question of construction. Did the words
"All you have to do is send us your account of the best IP judgment that has never been written"
refer to (i) the writing of an account the subject-matter of which was the best IP judgment that had never been written, or to (ii) the best account that had never previously been written concerning a previously-delivered IP judgment (whether written or delivered orally alone)?  Knowing the propensity of some of the entrants to expose new and ingenious interpretations of even the simplest and plainest of instructions, I agonised for some time before deciding in favour of the first construction.  On that basis the winner of the competition is ... David Flynn, of FRKelly, Dublin.  And Robin Fry (DAC Beachcroft) is a very worthy runner up.

Well done, David and Robin: we shall be publishing your entries soon.

JIPLP/GRUR Partnership Page

JIPLP now has a "partnership page" on its official website, to commemorate the journal's collaboration with GRUR Int.  At present, devoid of the artwork consisting of the covers of the two journals, it reads like this:


The Journal of Intellectual Property Law & Pratice (JIPLP) recently entered a new partnership with Gewerblicher Rechtsschutz und Urheberrecht, Internationaler Teil (GRUR Int.), a publication of the German Association for the Protection of Intellectual Property (GRUR). The partnership is based on an exchange of content between JIPLP and GRUR Int., allowing readers of both journals to enjoy additional material at no extra cost. From January 2013, JIPLP will include a new section filled with articles and decisions especially selected from the corresponding issue of GRUR Int.
GRUR Int. is the leading German-language journal specialising in intellectual property law. Published monthly, it combines academic contributions with reports on case law and legislation from both a European and wider international perspective. If you would like to read more about GRUR Int., click here, or, to find out about the GRUR and its other publications, go to the English-language website.
For further information about the link-up between Oxford University Press and GRUR, read the press release here.

To celebrate the partnership, a launch event will be held in London on 22 January and a seminar in Munich in March. If you would like to attend the London event, find out more by reading the JIPLP blog here. Details about the seminar in Munich are available on the GRUR website
We at JIPLP are delighted that the momentum towards the mutual provision of content between the journal, and to the continuing exchange of ideas, is continuing to gather strength and we wish our German friends and colleagues a Happy New Year in which our collaboration bears fruit.

The European "Patent Package": GRUR Int./JIPLP second seminar

Readers of this weblog will already know the details of the first seminar which marks the partnership between JIPLP and GRUR Int.  This morning GRUR is pleased to announce the particulars of the second seminar.  The following announcement appears on the GRUR website:

2nd Seminar 2013

The European "Patent Package": 

2nd GRUR Int. / JIPLP Celebratory Seminar, Munich

To celebrate the partnership between JIPLP and GRUR Int., each journal has agreed to host a seminar dealing with topical European IP issues. The first of these is being organised by JIPLP and Oxford University Press on 22 January 2013 in London and entitled "Secondary Protection for Innovation in Germany: Problem or Solution?".

The second seminar entitled "The European 'Patent Package'" will be taking place in Munich on 6 March 2013. Organised by GRUR in cooperation with the German Patent and Trade Mark Office (DPMA), it will deal with the latest developments in the reform of the European patent system. Please visit the tab for more information and registration details or choose the online-registration.
JIPLP is pleased to see that its own seminar has already attracted registrations from not only Germany but a number of other European countries.  We hope that many of our readers and friends will be able to attend the second seminar in Munich, which is on a subject of great importance and apparently almost inexhaustible fascination.

‘Red shoe sole’ can constitute a valid trade mark

Author: Agnieszka A. Machnicka (Max-Planck-Institute for Intellectual Property and Competition Law, Munich)

Christian Louboutin SA v Yves Saint Laurent Am. Holding, Inc, US Court of Appeals, Second Circuit, No 11-3303-cv, 696 F.3d 206 (N.Y.) 5 September 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps182, first published online: December 14, 2012

The US Court of Appeals held the red sole mark registered by Christian Louboutin to be valid and enforceable when limited to a red lacquered outsole contrasting with the colour of the rest of the shoe, but not when applied to a monochromatic red shoe.

Legal context

The issue was considered in the context of validity of single-colour trade marks and the doctrine of aesthetic functionality as developed by the US judiciary in numerous cases. The principal concern was whether, in certain industries (eg the fashion industry), single-colour marks are inherently non-distinctive and consequently invalid due to their hindering effects on competition.


Christian Louboutin brought an appeal from an order of the US District Court (SDNY, 10 August 2011) denying protection to its registered Red Sole mark in a dispute with Yves Saint Laurent (YSL) fashion house which applied a red sole to an entirely red shoe (discussed in Agnieszka Machnicka ‘Trade marks: Is a ‘red shoe sole’ a valid trade mark?’ (2012) 7(3) JIPLP 157). Louboutin's appeal was based on a claim that the District Court—in spite of having recognized the distinctiveness, fame and registration of the Red Sole mark—committed an error by holding that a single colour cannot constitute a trade mark in association with a fashion item due to its anti-competitive effects. Louboutin's action was supported by the amicus briefs from Tiffany (24 October 2011) and the International Trademark Association (INTA, 14 November 2011). Against that, the amicus brief from (11) law professors (3 January 2012) supported the views expressed by the District Court, in particular its findings about the specific (functional) role that colours play for designers and for consumers in relation to fashion goods.


The Court of Appeals, before deciding on the merits of the case, gave an elaborate introductory analysis of two issues relevant to the claim.

First, it considered the matter of single-colour marks. It noticed that, although the early jurisprudence (before the introduction of the Lanham Act) was not always generous to single-colour marks, there were other ways (such as unfair competition principles) through which courts would recognize indirectly the merit of certain signs acquired through secondary meaning. After the adoption of the trade mark statute, colours would gradually be accepted for trade mark registration, and finally the decision in Owens-Corning Fiberglas Corp 774 F 2d 1116 (1985) made it clear that colour marks which were distinctive, ie able to identify the source of the product, could serve trade mark functions. The position of colour marks was strengthened by the Supreme Court's decision in Qualitex Co v Jacobson Products Co 514 US 159 (1995) which confirmed that there is no objection to the use of a colour as a trade mark when it meets legal requirements (ie distinguishing goods and identifying their source ‘without serving any other significant function’).

Secondly, the court addressed the specific problem of functionality of colours in the fashion industry. It traced the development of the doctrine of functionality of marks encompassing traditional ‘utilitarian’ functionality and ‘aesthetic’ functionality (which constitute a defence to a trade mark infringement claim). It is a developed rule that a product feature is functional in a utilitarian sense when it is essential to its purpose or use as well as when it influences its cost or quality (Wallace International Silversmiths, Inc v Godinger Silver Art Co, Inc, 916 F 2d 76, 2d Cir 1990). Further, when a product's aesthetic design purporting trade mark function is not utilitarian, it still can be considered functional if its monopolisation ‘would put competitors at a significant non-reputation-related disadvantage’ (Qualitex; TrafFix Devices, Inc v Mktg Displays, Inc, 532 US 23 2001) or ‘would significantly limit the range of competitive designs available’ (Coach Leatherware Co v Ann Taylor, Inc, 933 F 2d 162, 2d Cir 1991). However, as the court mentioned, the controversial doctrine of aesthetic functionality was not uniformly applied by the circuit courts. Because it can sometimes be difficult to distinguish between source indication (branding success) and aesthetic function of a product design, the analysis of this issue should be ‘highly fact-specific’. Then, based on this analysis, the court examined the rule of functionality of colours in the fashion industry as formulated by the District Court's order under appeal. The judgment evoked Qualitex to state that there is no prohibition of the use of a single colour as a mark in a specific industrial context (hence, including the fashion domain) and no such rule should be created. Rather, an individualized, case-by-case assessment of the aesthetic functionality should be performed.

Finally, the judgment focused on the Red Sole mark. The court found that the mark as broadly defined in a registration claim (ie ‘The colour/s red is/are claimed as a feature of the mark. The mark consists of a lacquered red sole on footwear’) would prevent all uses of red outsoles by competitors and was therefore, not entitled to protection as such. Nevertheless, the mark in question had acquired secondary meaning when used as a red sole ‘contrasting’ with the remainder of the shoe and, consequently, was protected in this modified form only. In other words, the disputed mark did not acquire secondary meaning in relation to a red sole applied to a red shoe. This finding, seemingly inspired by the law professors' amicus brief, was based on a principle that a single colour—usually not inherently distinctive—can in a particular context be so unusual that it becomes a symbol identifying a product's source. The judgment refers to factors through which the mark became a distinctive indication of the Louboutin brand: advertising expenditures, media coverage, sales success, more than 20 years of the mark's use and records of the mark's counterfeiting.

Since the use of a red sole on monochromatic red shoes by YSL did not infringe the Red Sole mark, the court did not consider the issue of consumer confusion.

Practical significance

The most immediate outcome of this anxiously awaited ruling is that the Red Sole mark was indeed protected (subject to 15 USC § 1119) in the territory of the United States. This matter is not undisputed in other jurisdictions. The controversy around the Red Sole mark is well illustrated not only by its registration in some countries and denial in many other, but also by a recent French case in which a dispute over a red shoe sole between Christian Louboutin and Zara culminated in a decision far less generous for the famous shoe designer, rendered by the Cour de cassation on 30 May 2012.

The effects of the court's finding can be examined from different perspectives. First, it expressed a general norm to the effect that (a) a single colour can constitute a valid trade mark, (b) even in the fashion industry and (c) its validity is assessed on a case-by-case basis. Secondly, in relation to the trade mark in question, its legality was definitely resolved by the court having declared it valid as limited to a lacquered red outsole contrasting with the colour of the ‘upper’ shoe. Thirdly, the verdict has also an impact on the availability of the red colour, namely its use is freely allowed for competitors (a) on all fashion items (any part of clothing or accessorise) except shoe soles which contrast in colour with the rest of a shoe, as well as (b) on monochromatic red shoes.

Some uncertainty still remains as regards the use of other, possibly similar colours (eg burgundy) on the shoe outsoles, since the court did not specify what shade of red constitutes the Red Sole mark. This matter may be resolved in a potential dilution dispute (15 USC § 1125) or will remain dormant if competitors simply avoid using all shades close to red in the context of the Louboutin's mark.

It is likely that there will be more attention given to shoe soles and that their colouring becomes a new canon in the fashion domain (ie blue, green or pink—as demonstrated by current records of the USPTO and mentioned in the law professors' amicus brief). Maybe this novel trend should simply be seen as a flattering result of the revolutionary contribution of Christian Louboutin to the development and history of shoe fashion. For the moment it is certain that a flash of a red sole, at least in the US, guarantees genuine ‘Louboutins’.

India's new copyright law: the good, the bad and the DRM

Authors: Tarun Krishnakumar and Kaustav Saha (National Law School of India University, Bangalore, India)

The Copyright (Amendment) Act 2012 [No 27 of 2012], passed on 22 May 2012 and brought into force on 7 June 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps178, first published online: December 14, 2012

The recent amendment to the Indian Copyright Act 1957 introduces criminal and monetary sanctions for the circumvention of digital rights management (DRM).

Legal context

Since the original Copyright (Amendment) Bill was formulated in 2010, an overhaul of the Indian copyright regime had been imminent for some time. The Copyright (Amendment) Act 2012, passed by the Lok Sabha (lower house of Parliament) on 22 May 2012, was oriented towards achieving that end. Some aspects of the amendment, such as the provisions relating to facilitation of special formats for the disabled and the recognition of rights of contributors to films (such as composers and lyricists), were lauded as necessary and progressive reform while others were passed all but unnoticed. The provisions that relate to the protection of digital rights management (DRM) techniques fall into this latter class.

As is commonly understood, DRM relates to the techniques and methods used to limit access or control over protected intellectual property after the initial sale by the right holder. Common examples include encryption or ‘scrambling’ of copyright music CDs and DVDs to prevent copying (or ‘ripping’), the locking of smart phones to particular service providers and the imposition of restrictive licensing agreements. By their inherently restrictive nature, DRM techniques have important implications for a consumer's rights, for example on his rights to fair use, choice and full enjoyment of the works purchased by him. DRM, by its impact on fair use, can also have a chilling effect on free speech as comment and discussion are stifled by the threat of infringement litigation.

In the Indian context, the decision to introduce DRM-protection measures has been justified by the government which reasons that DRM-protection was necessary to bring India's copyright law in line with WIPO's Copyright (WCT) and Performances and Phonograms (WPPT) treaties. The fact that India had not ratified, much less signed, either of these treaties seems to have gone unnoticed. The World Trade Organization's Agreement on Trade Related Intellectual Property Rights (TRIPS) itself makes no mention of an obligation on signatories—of which India is one—to protect DRM measures. A combination of influences such as sustained if not well-disguised media house lobbying and international pressure due to India's consistent presence on the United States Trade Representative's Special 301 Report (which lists countries that do not provide ‘adequate and effective’ intellectual property protection) seem to have had their intended effect.

Statutory amendments

The DRM-linked statutory changes introduced by the amendment feature in three parts of the amended Act.

First, s 2, the definitions clause, has been amended to define rights management information (RMI) (s 2(xa)) as the title or any other information identifying the work in question (2(xa)(a)), the name or address of the author, performer or rights owner (s 2(xa)(b) and (c)), the terms and conditions regarding the use of rights (s 2(xa)(d)) and would include any number or code representing the above (s 2(xa)(e)).

Secondly, the new s 65A introduces TPM into Indian copyright law. The first clause of the new section criminalizes the circumvention of an effective TPM with the intention of infringing any of the rights conferred by the Act. Offenders shall be punishable with imprisonment for up to two years and fines (section 65A(1)). Clause (2) carves out a number of exceptions to this rule. The general exception under sub-clause (a) exempts anything that is not expressly prohibited by the Act. A proviso to this sub-clause conditions the operation of the general exception to the maintenance of complete records and particulars, of the person performing the circumvention, by anyone facilitating such circumvention.

Sub-clauses (b) to (g) list specific exceptions to criminal liability for circumvention including those relating to encryption research (s 65A(2)(b)), lawful investigations (s 65A(2)(c)), authorized cyber-security testing (s 65A(2)(d) and (e)), user identification or surveillance (section 65A(2)(f)) and in interests of national security (s 65A(2)(g)).

Thirdly, the new s 65B provides for the protection of RMI. The section is two-pronged with the (i) knowing unauthorized removal of any RMI (s 65B(i)) and the (ii) knowing distribution, broadcasting or communication to the public of any work or performance with the knowledge that the RMI has been removed or altered without authority (s 65B(ii)) being made offences punishable with imprisonment for up to two years and fine. The proviso to this section also enables the copyright owner whose interests have been affected by the removal of RMI to seek civil remedies under Chapter XII of the Act.

By introducing these changes, the Act has given recognition to DRM protection in India, both for TPMs and RMI. The implications of these amendments have important consequences for both copyright holders and consumers as discussed in the following segment.


While the provisions governing DRM are intended to operate as a single scheme, the implications of TPM and RMI are to an extent separate. Therefore, it is best to examine them separately.

Technological protection measures

The first clause of s 65A restricts the range of actions that may be considered circumvention to those applied for the protection of rights conferred by the Copyright Act. This provision cannot thus be extended to protect measures that purely restrict or control access to material outside of the protection conferred under the Act. Instead, it takes aim at the prevention of unauthorized copying, broadcasting, communication and the like. Section 65A envisages intention to infringe as a crucial element in the imposition of criminal sanctions. Under this provision, mere circumvention is insufficient without the intention to infringe the rights conferred by the Copyright Act. While this requirement is likely to increase the burden when prosecuting alleged offenders, it has the potential to shield ‘innocent’ or unintended acts of circumvention from criminal liability.

In contrast with the Digital Millennium Copyright Act (DMCA), the Indian Act does not criminalize the facilitation of circumvention either directly or through the production of tools which facilitate circumvention of TPMs. This omission—intentional or otherwise—would ensure that technological innovation is not adversely affected as has been the case in the United States where technologies for other purposes which only incidentally allow circumvention have been outlawed.

Furthermore, under the proviso to s 65A(2)(a), no penalty is specified for a facilitator who does not maintain records of a circumvention. Is this the equivalent to the case of a person who actually circumvents the TPM? The Act provides no clear answer.

Rights management information

Section 65B deals with protection for RMI, which covers any information including the name of the performer, copyright information or an ISBN number which is used to identify or authenticate copies of a work or performance. The first clause of the section deals with the more direct offence of removing or altering RMI embedded in a work while the second clause of the section provides that anyone who, in an unauthorized manner, distributes, broadcasts, communicates to the public or otherwise markets copies of the work with the knowledge that RMI has been removed or altered is equally culpable as the person who removed it in the first place. The wording of this section is quite narrow and provides no exceptions such as those present in regard to TPMs. Problems that this approach could be faced with include instances of companies in converting copyright material into formats designed for (say) consumers with disabilities—a concern voiced by Yahoo India in its submissions to the Parliamentary Standing Committee designated to look into the Bill's provisions.

Certain forms of RMI also collect information about users from their devices without their explicit consent: s 65B, when read with s 2(xa), prohibits these forms of RMI. Such a definition ensures that consumer privacy is not compromised by the use of RMI. These issues aside, the question of whether criminal sanctions are warranted for an act potentially as ‘docile’ as removing or altering RMI—which primarily result in tangible, monetary losses—is one that is likely to remain uncomfortably unanswered.

Practical significance

The problem with the Indian intellectual property regime in general, and the copyright regime in particular, has never been the lack of statutory instruments or sanctions: it has, however, been the lack of an efficient enforcement environment. An undertrained, over-worked and ill-equipped criminal justice system is likely to hamper efforts to enforce DRM protection on a large scale. Ultimately, a homicide is clearly going to be prioritized over a case under ss 65A or 65B for an already under-staffed police force.

It is not therefore known whether the introduction of DRM will actually work towards stemming levels of piracy in India—the ostensible policy objective.

While it is beyond the scope of this article to consider whether combating piracy as a policy objective is desirable, what is certain is that new concerns regarding the rights of consumers in relation to copyrighted works will arise. In practice, one can expect to find media houses and record companies employing more resources and effort in developing new means and methods of DRM, given that the latter are now are protected by the force of law. For the same reason, one can also expect companies increasingly to deploy such means and methods in attempts to protect their copyright material.

In the digital context, increased protection is likely to take a toll on computer processing speeds while courts are likely to see floods of new criminal litigation initiated by media houses as a testament to their newly acquired powers. Consequently, courts will be called on to clarify many of the inherent ambiguities present in the new sections, most of which deal with cutting-edge technological issues which the judiciary will have to adapt to quickly. Given the on-going debates over whether criminal liability is, in the first place, to be enforced in the name of DRM protection, the thin line between common consumer and common criminal is likely to grow even thinner in time to come.

December issue -- and trade secrets: a perfect storm?

The December issue of the Journal of Intellectual Property Law & Practice (JIPLP) is available in full online to its electronic subscribers. However, the list of contents of the current edition is accessible to everyone -- and if you aren't a subscriber but do want to read a specific item, you can purchase short-term access instead.

This month's editorial is the latest in a line of guest editorials by members of the JIPLP editorial board. The author is Neil J. Wilkof, who writes as follows:
"Trade secrets: a perfect storm of unavoidable neglect?

My physics friends tell me that one of the great research challenges is trying to conceptualize and explain dark energy and dark matter. We ‘know’ that dark energy and dark matter are both out there, and together they comprise most of the universe. But because we cannot directly perceive them, our current ability to explain them empirically is limited.

There is something akin to the dark energy/dark matter problem in IP, namely the treatment of trade secrets. We cannot gainsay the centrality of trade secrets. As we were most recently reminded in the February 2012 report by John E Jankowski published by the National Science Foundation, Business Use of Intellectual Property Protection Documented in NSF Survey (NSF 12–307), trade secrets may be the most used of all IP rights, as reported by people in business. Similar findings have been reported over a period of years across different locations. The challenge has been and remains: how can we study and research the subject in a professionally robust manner?

Based on anecdotal evidence, it is our decided view that trade secrets are under-emphasized, in comparison with the other IP rights, whether by IP practitioners, IP academics or in managerial education. Indeed, the situation surrounding trade secrets may well be even less encouraging than with respect to dark energy and dark matter. For the latter, numerous physics professionals are at least involved in trying to shed light on these subjects. To the contrary, there is a palpable lack of attention that is devoted to trade secrets. As a result, there appears to be a serious disconnect between how trade secrets are viewed on the ground as a business matter and how trade secrets are approached by persons most likely to be engaged with them at either the IP professional, research or educational level.

At the level of the IP professional, trade secrets lie outside the bounds of one's usual scope of activity. There are no registrations or other filings to be made in order to establish the right, nor any international treaties or other arrangements that establish at least a minimum framework for how trade secret rights are created and protected. With respect to transactions that involve a trade secret, it is extremely difficult to come up with documentation that adequately describes what kind of trade secret rights are involved. When the valuable trade secrets are based on the company's know-how or tacit knowledge of key employees, the task becomes even more daunting. As a result, from the vantage of the IP professional, there is often a huge element of faith in any transaction involving trade secrets.

At the level of the treatment of trade secrets by the legal Academy, perhaps the most important reason for the lack of attention is the problem of categories: trade secrets do not seem to fall within any of the ‘classic’ subject-matters that comprise IP. Rarely, it would seem, do we find an ‘Overview of IP course’ that treats trade secrets on an equal footing, if at all, with patents, copyright and trade marks. Indeed, influential articles continue to be published on whether trade secrets should be treated at all as a form of intellectual property. Perhaps they are better conceived as a sub-category of such legal rights as commercial tort, fiduciary obligation, unfair competition, contract law or local statutory law. Disputes at the theoretical level about the nature of patents, copyright or trade marks are one thing, but when the self-contained underlying subject-matter of trade secrets is itself to dispute, its attractiveness as a focus of IP academic inquiry is significantly diminished.

It may seem a bit misplaced to consider the treatment of trade secrets by management education (most notably MBA and Technology Management programs). But, in truth, given the finding about the centrality of trade secrets for the business community, inclusion of management education as a part of our discussion is understandable. After all, management education research is most distinguishable from the field of economics by the fact that the former focuses on imparting tools to deal with the actual management of assets, including intangible assets such as IP. Trade secrets, however, pose a particular challenge in this regard because trade secrets do not allow a compact description or ready frame of reference. Moreover, the focus on case studies and empirical results makes research about trade secrets especially difficult. In this context, the desire to conduct research in this area is often ultimately abandoned due to the practical difficulties that such studies pose.

The upshot is that none of the major moving parts that must contribute to our understanding of the theory and practice of trade secrets is contributing in a substantial manner. Whether this perfect storm of neglect of trade secrets can be changed is an important but so far unrealized aspiration".

Balancing the weight of patent infringement and damages

Author: Christopher Hayes (Palmyra Chambers, Warrington)

Schenk Rotec GmbH v Universal Balancing Limited [2012] EWHC 1920 (Pat), Patents Court, England and Wales, 12 July 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps173, first published online: December 4, 2012

This note looks at the application of the relatively rarely-used defence to patent infringement of prior use and the defence to damages for infringement on the basis that the infringer was not reasonably aware of the existence of the patent.

Legal context

Section 64 of the UK Patents Act provides a defence to patent infringement and also a right to continue performing the same acts where the infringer had, in good faith, begun performance of the infringing acts before the priority date of the patent or that they had made serious and effective preparations to do so by the priority date of the patent.

Section 62(1) of the same Act makes provisions that, where a patent has been infringed, no damages shall be awarded where the infringer can prove that he was not aware, and had no reasonable grounds for supposing that the patent existed. Section 62 adds that merely affixing the word patent or patented or similar to a product is insufficient to provide reasonable grounds unless it is also accompanied by the patent number.


Schenck was the owner of European Patent (UK) 1 520 161. The patent relates to a balancing machine with a gripper-like device for affixing balancing weights to propeller shafts or rotors and was granted on 12 September 2007 having a priority date of 4 July 2002. Universal Balancing supplied a balancing machine, referred to in the judgment as the Green Machine, to a third party, GKN, in 2001. This machine was built on a Schenck base supplied by GKN. In 2002 a second machine was supplied to GKN from Universal Balance, again built on an old Schenck base; this is referred to as the Blue Machine in the judgment. In about March 2004 Universal Balancing sold its machines under the Name KISS-234, rather than product numbers as it had done previously.

Schenck produced a brochure which was available on its website from around 2003 which referred to ‘patented unbalance correction’ but did not make reference to any patent number. There was no evidence that Universal Balancing had seen the brochure, although ultimately the judge did not consider sight of the brochure relevant. In 2004–2005 Schenck sent a copy of the patent to GKN, but not to Universal Balancing.

In July 2010, a meeting took place between senior officers of both parties. At this meeting, the existence of the patent in suit was raised by Schenck. This was the first indication that Universal Balancing had of the patent. Universal Balancing's evidence was that they did not actively monitor competitors' patents or designs.

Having construed the patent, the judge found that the patent in suit was not anticipated, nor was it obvious. He then turned to infringement. In short, the KISS-234 machine was held to infringe. An important element of the judge's reasoning was the presence of two lower electrodes in the KISS-234 machine which allowed it to act as a gripper-like device to enable the rotor to receive a plurality of weights, which was also a feature of the patent. In contrast, the single lower electrode of the Green Machine would not have acted as a gripper-like device to allow the rotor to receive a plurality of weights, and for this reason the Green Machine would not infringe the patent. Accordingly, the judge turned to the defences under ss 64 and 62.


Universal Balancing contended that all of its machines from the Green Machine through to KISS-234 were essentially the same. KISS-234 merely reflected a change in the name of the machine, and there were no fundamental differences between it and the earlier machines. In support of this, Universal Balancing contended that in its opinion there were no patentable differences between the Green Machine and KISS-234. In effect, the sale of the KISS-234 was the same act as that which commenced with the sale of the Green Machine, which was undoubtedly before the priority date. In the alternative, Universal Balancing contended that the sale of the Green Machine represented serious and effective preparations for the sale of KISS-234, so as to engage the defence under this limb as well.

The judge, however, held that the Green Machine did not fall within the claims of the patent and that, therefore, s 64 was not, by definition, engaged. The acts of infringement relate to the manufacture and sale of the KISS-234 machine, so the defence turns on whether the sale of the Green Machine amounts to serious and effective preparations for the sale of the KISS-234 machine.

There was no evidence that Universal Balancing had fitted a second electrode or had contemplated fitting a second electrode to any of the Green Machines it sold before the priority date. The Green Machine did not therefore operate in the same way as the KISS-234 machine; they were different products. As a result, the judge found that the act of making and selling the Green Machine was not the same act as making and selling the KISS-234 machine. On this basis, the manufacture and sale of the Green Machine could not be serious and effective preparations for the sale of the KISS-234 machine. Accordingly, Universal Balancing failed to engage the s 64 defence.

Universal Balancing contended that damages should not be available prior to the meeting in July 2010, as this was the first time Universal Balancing knew of the patent's existence. The judge found that the area was a relatively patent-poor technological sphere, with a limited number of competitors and that the scope for patentable developments was relatively small.

Against this background, Universal Balancing did not believe that they needed to have active oversight of competitor's patents portfolios. In the circumstances, the judge rejected the assertion that Universal Balancing should have engaged patent attorneys to perform patent searches which would have identified the patent. As a result, the judge held that Universal Balancing could avail itself of s 62 and that no damages for infringement could be recovered in respect of infringing acts that took place before the meeting in July 2010.

Practical significance

This case confirms the very narrow application of the s 64 defence in the UK. In order to satisfy the statutory criteria, the acts relied on by the defendant pre-priority must be essentially identical to the acts carried out post-priority. What is clear from this case is that, when the courts are assessing the similarity of the acts pre- and post-priority, they will view that similarity very narrowly. The practical result is that, for a defendant, it will often be factually very difficult to demonstrate sufficient similarity where the acts differ between the pre-priority act and the alleged infringing act.

The judgment also raises interesting issues in relation to the s 62 defence and in particular in relation to steps which it would have been reasonable for the defendant to take. On the facts, the judge held that it would not have been reasonable to expect Universal Balancing to engage attorneys and conduct clearance searches, due to the area being patent-poor with limited scope for technical improvements.

However, the corollary of this reasoning is that s 62 is unlikely to be available in the same circumstances to companies with in-house patent attorneys, or in patent-rich areas where such companies are likely to have the resources. More importantly, the expectation that there are likely to be competing patents in the milieu and are all too aware of the need to perform clearance searches in areas of interest.

This decision also provides salutary guidance for patentees, who, if in doubt, should furnish information about key patents to their competitors, ideally a copy of the patent itself, to guard against the possibility that a successful claim for infringement is not met with a plea under s 62.

Apple v Samsung: a preliminary injunction against the Galaxy Nexus smartphone

Author: Stefano Barazza (Studio Legale Barazza)

Apple Inc v Samsung Electronics Co Ltd, District Court for the Northern District of California, 12-CV-00630, Order Granting Preliminary Injunction, 29 June 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps174, first published online: December 4, 2012

The court issued a preliminary injunction in Apple's favour, enjoining the Samsung Galaxy Nexus, on the basis of four patents infringed by the smartphone's operating system, Google's Android. The judgment may yield serious consequences for manufacturers of Android-based devices.

Legal context and facts

In early 2012 Apple filed suit against Samsung, claiming patent infringement, in relation to several of the Android-based devices manufactured by the Korean firm. Apple also brought a motion for a preliminary injunction, aiming to stop the defendant making and selling, in the United States, the Galaxy Nexus smartphone.

The motion focused on four patents (out of the eight asserted in the original Complaint), allegedly infringed by the smartphone's operating system, Google's Android 4.0 (‘Ice Cream Sandwich’):
* the ‘604 patent, which essentially depicts a unified search interface, allowing the retrieval of information from a plurality of sources (including local storage and the internet);

* the ‘647 patent, concerning a system that detects specific data structures (eg phone numbers, email addresses, dates) and allows the user to perform actions directly on them (eg dialling the number, sending an email);

* the ‘721 patent, describing a method of unlocking a portable electronic device, by performing a predefined gesture on an unlock image displayed on a touch sensitive screen;

* the ‘172 patent, which takes into account the difficulty of inputting text on the small keyboard area of a portable device, providing word recommendations that the user can select while typing.

The court noted that the preliminary injunction is an ‘extraordinary and drastic remedy’: Intel Corp v ULSI Sys Tech Inc, 995 F 2d 1566, 1568 [1993]. It then recalled the factors to be assessed, which include the likelihood of success on the merits, the likelihood of irreparable harm, the balance of the hardships and the public interest: Winter v Natural Res Def Council, 555 US 7, 20 [2008].

On the burden of proof, Judge Koh explained that, even during the preliminary proceeding, patents enjoy a presumption of validity. Consequently, the defendant has the initial burden of providing evidence of invalidity, to which the plaintiff must respond with contrary arguments, as substantial questions on the validity of the asserted patents prevent the issuing of an injunction: AstraZeneca LP v Apotex Inc, 633 F 3d 1042, 1050 [2010].

To assess the likelihood of success on the merits, the court first evaluated patent infringement, applying a two-step process (claim construction and verification of the presence of the claim limitations in the accused device), and consequently analysed the invalidity challenges brought by the defendant. Judge Koh clarified that claim construction is to be conducted from the perspective of a person of ordinary skill in the art in question, at the time of the invention, in light of the entire patent, including specifications, taking into account the prosecution history and other extrinsic evidence: Phillips v AWH Corp, 415 F 3d 1303, 1313 [2005]. In relation to patent invalidity, as defined by 35 USC s 102, she noted that the court must verify whether all claim limitations are found in a prior art reference and if the latter enables a person of ordinary skill in the art ‘to make the invention without undue experimentation’: Bard Peripheral Vascular Inc v WL Gore & Assocs, 670 F 3d 1171, 1184 [2012].

With regard to the ‘604 patent, the court evaluated the limitations pertaining to the heuristic modules and algorithms used by the search interface: two modules of the Google Quick Search Box, present in the Galaxy Nexus operating system, infringed the patent at issue. The judgment excluded claims of invalidity based on anticipation and obviousness, observing that prior art references did not disclose all the characteristics of the patent, nor rendered the innovation obvious, as obviousness cannot be demonstrated by merely showing that each of the elements of the claim was, independently taken, known in the prior art: KSR International Co v Teleflex Inc, 550 US 398 [2007].

As for the ‘647 patent, the court assessed whether the web browser application in the Galaxy Nexus infringed it by allowing users to perform actions on detected structure. Constructing the claim, Judge Koh relied extensively on the findings made by Judge Posner in Apple Inc v Motorola Inc (ND Ill, No 1:11-cv-08540), concluding that the disputed device infringed the Apple patent. It was held that prior art references either implemented a mechanism that implied user input, or limited the detection to only one type of data. Further, claims of obviousness were dismissed, as the defendant offered only limited evidence of concurrent inventions.

Construing the ‘721 patent, the court assessed both dependent and independent claims, applying the claim differentiation doctrine. It established that the unlock feature of the Galaxy Nexus (displaying a circle with a padlock in the centre, which the user has to move to another region of the touch screen) infringed the patented innovation. A prior art reference, which described the use of touchscreen toggles to control home devices, was found to disclose only some of the limitations of the asserted claims, without rendering the unlocking mechanism obvious. An additional reference was disqualified for failure to provide evidence of priority, as required by 35 USC sec 102. Finally, the court dismissed Samsung's arguments of indefiniteness, which arises only when the claims are ‘not amenable to construction or insolubly ambiguous’: Datamize LLC v Plumtree Software Inc, 417 F 3d 1342, 1347 [2005].

Similar findings of infringement were made with reference to the word recommendation system protected by the ‘172 patent. Claims of anticipation and obviousness were dismissed, as the prior art references either did not disclose all the technical details of the invention or aimed at solving problems different from those addressed by the patent at issue. The court rejected Samsung's additional arguments, which pointed at some of the asserted claims as hybrid or indefinite.

On irreparable harm, the court recalled previous case law, noting that loss of market share, in the context of a market where the parties are direct competitors, may result in serious potential harm: i4i Ltd P'ship v Microsoft Corp, 598 F 3d 831, 861 [2010]. In the case in hand, the parties were direct competitors in the rapidly growing smartphone market; loss of market share in relation to first-time buyers, whose purchasing decision normally determines their future system allegiance, supported findings of irreparable harm. Judge Koh also accepted Apple's arguments on network effects, observing that the loss of market share in the smartphone market may yield negative effects on the sale of other devices manufactured by Apple, due to brand loyalty and ‘platform stickiness’. However, the court found no likelihood of irreparable harm due to loss of goodwill: Apple's asserted claims of loss of brand distinctiveness were dismissed, as the plaintiff failed to identify case law and evidence supporting it.

The judgment also provided an in-depth assessment of the causal nexus between infringement and irreparable harm required by Voda v Cordis Corp, 536 F 3d 1311, 1329 [2008], which is established ‘by showing either that the patented feature is an affirmative driver of consumer demand, or that the patented feature's absence would suppress consumer demand’. The court held that the unified search interface protected by the ‘604 patent drove consumer demand in such a way to substantially affect market share, on the basis of surveys, product reviews and even Samsung's and Google's documents. The nexus could not be established in relation to the other patents.

The balance of hardship tipped in Apple's favour. Even though the consequences of a preliminary injunction may be severe upon the enjoined manufacturer, ‘the harm faced by Apple absent an injunction is greater’, especially since Apple had presented a strong case on the merits. In light of the findings pertaining to the other factors, the enforcement of Apple's patents was in the public interest, as the protection of valid and infringed intellectual property encourages innovation and investment-based risk: Sanofi-Synthelabo v Apotex Inc, 470 F 3d 1368, 1383 [2006].

A bond of $95,637,141.60 was required, and promptly posted, to enforce the injunction. A motion to stay pending appeal was dismissed by Judge Koh, but subsequently granted by the United States Court of Appeals for the Federal Circuit.

Practical significance

Apple has recently brought several lawsuits, in the United States and Europe, against Android-based devices of Samsung and other manufacturers (see LG M√ľnchen, 21 O 26022/11, recently upheld by the Oberlandesgericht; Rechtbank's-Gravenhage, 24 August 2011, LJNBR577; ITC Inv No 337-TA-710, 19 December 2011). Judge Koh's ruling represents a significant victory for Apple, as all four asserted patents were deemed likely valid and infringed. Thus Apple could seek to enforce them against other Android-based devices, which implement the same features of the Galaxy Nexus.

The juxtaposition of a growing number of decisions exacerbates the risk of non-congruent rulings, either due to the different evidence brought by the parties in front of the courts or to the judicial interpretation of patent claims and prior art. In this judgment, the court extensively recalled Judge Posner's findings in relation to the claim construction of the ‘647 patent. However, in evaluating the anticipation and obviousness of the innovation disclosed in the ‘721 patent, it took a different view to that recently expressed by the Patents Court for England and Wales in HTC Europe Co Ltd v Apple Inc [2012] EWHC 1789 (Pat), in relation to the similar European patent EP1964022.

Preliminary proceedings, in relation to patent (and design: see Judge Koh's judgment, between the same parties, in the Order Granting Preliminary Injunction, 26 June 2012) infringement, face the difficulty of analysing technically complex claims and references. Although the court is required to provide only a prima facie assessment in this regard, it appears that the magnitude of the relief requested, which may have devastating consequences upon the defendant's business, warrants an in-depth investigation which, at this stage, typically resolves in an over-reliance upon the declarations provided by the parties' experts.

Finally, Judge Koh repeatedly highlighted the necessity of identifying the effects of patent infringement on consumers. She clarified that this factor yields significant importance not only in relation to the assessment of the casual nexus between infringement and irreparable harm, but also in assessing the loss of brand distinctiveness as loss of goodwill, a theory towards which she exhibited a cautious, but sensitive, approach.

Secondary Protection of Innovations seminar: an update

Here's an update on the JIPLP/GRUR Int London seminar on 22 January to mark the cooperation of the two journals (details are available here).

First, we are pleased to say that the number of registrants for this events has just topped the 50 mark.

Secondly, we can inform you that the discussion panel has been further strengthened by the addition of Timo Minssen. Timo (right), an Associate Professor at the University of Copenhagen, has taken a particular interest in the secondary level of protection of innovations and we are pleased to welcome him.

Copyright law trumps free movement of unlawfully distributed goods

Author: Thorsten Lauterbach (Robert Gordon University Aberdeen)

Case C-5/11 Titus Alexander Jochen Donner, Court of Justice of the European Union, 21 June 2012

Journal of Intellectual Property Law & Practice (2012) doi: 10.1093/jiplp/jps177, first published online: November 29, 2012

Traders who target customers in a specific European Union Member State for unlawful sales of copyright works can face criminal prosecution in that jurisdiction even if the goods in question are not protected by copyright law in the country of origin; such traders cannot rely of the general principle of the free movement of goods.

Legal context

This case concerns a clash of differing national copyright laws between European Union (EU) Member States with the overarching EU notion of free movement of goods. The latter is manifested by Article 34 of the Treaty on the functioning if the European Union (TFEU) which prohibits quantitative restrictions on imports and all measures having equivalent effects. However, Article 36 TFEU offers a number of exceptions to this prohibition. Of key importance for this case is the protection of industrial and commercial property, which includes copyright law, as a justification for barriers to intra-EU trade.

German law renders the distribution of unlawful copies of protected copyright works a criminal offence, implementing Article 4(1) of Directive 2001/29 on copyright in the information society (the ‘InfoSoc Directive’). That article concerns the right of owners of copyright works to exclusively control their distribution to the public. While the goods in question did not enjoy copyright protection in the country of origin at the time, they did so in Germany. Did German copyright law constitute an illegal barrier to intra-EU trade, or was it lawful courtesy of Article 36 TFEU?


An Italian company, Dimensione, sold replicas of Bauhaus-style furniture of well-known designers, with some of its targeted customer base being located in Germany. Dimensione used marketing materials tailored and aimed at the German market. Donner operated a transport business which would collect the sold items in Italy and deliver them to the German purchasers. While at the time of the sales the replicas did not benefit from copyright protection under Italian copyright law, they did so under German copyright law. There was an argument that although the contracts were completed in Italy, the German customers would only have possession of the goods when they were delivered to them. This, in turn, meant that the replicas were distributed to (the German) public under Article 4(1) of the InfoSoc directive without the permission of the owners of the copyright. The key issue in the German courts was whether Donner's acts constituted aiding and abetting an act of copyright infringement under ss 17, 106 and 108a UrhG (Author's Rights Act) and §27 StGB (Criminal Code). Under German law, goods are distributed when the property is actually transferred to the public and the seller can no longer legally dispose of them. While Donner argued that this transfer had been completed in Italy when he paid for the goods there and then on behalf of the German customers, the Landgericht (Regional Court) Munich II opined that the actual transfer occurred when the goods were delivered to the German customers (and they reimbursed him for the price of the goods and cost of freight). This, in turn, made German law applicable and the Munich court duly convicted Donner.

Donner appealed to the Bundesgerichtshof (Federal Court of Justice), arguing that his conviction, inter alia, contravened the EU's free movement of goods principles, as German copyright law had been used to an artificial partitioning the Single Market. The court asked the European Court of Justice (ECJ) for a preliminary ruling on the following questions: Are Articles 34 and 36 TFEU governing the free movement of goods to be interpreted as precluding the criminal offence of aiding and abetting the prohibited distribution of copyright-protected works resulting from the application of national criminal law where, on a cross-border sale of a work that is copyright protected in Germany,
• that work is taken to Germany from a Member State of the European Union and de facto power of disposal thereof is transferred in Germany,

• but the transfer of ownership took place in the other Member State in which copyright protection for the work did not exist or was unenforceable as against third parties?
Figure 1: E1027 table by Eileen Gray, an example of the type of goods subject to the dispute (Source: courtesy of, used with permission. Clubmarx 19:24, 24 November 2004 (UTC))

Figure 2: Barcelona Chair by Ludwig Mies van der Rohe, an example of the type of goods subject to the dispute (courtesy of Sailko (author) under Creative Commons Licence 3.0)


Interpreting Article 4(1) of the InfoSoc Directive broadly, the ECJ held that ‘distribution to the public’ could be constituted by various activities, rather than one particular type of act. The whole range from concluding the contract to the delivery of goods to customers would be within the ambit. Consequently, the exclusive distribution right could be infringed in different Member States by cross-border sales. If there is evidence that a trader specifically targets customers in a particular Member State, this would constitute ‘distribution to the public’. If a trader set up websites using specific languages, design and distribution of advertising materials and the provision of tailored delivery and payment systems are all relevant in the court's assessment on a case-by-case basis. In respect of traders such as Donner, a national court would have to be satisfied that they themselves were involved in the targeting of the public and whether they were aware of the activities by the actual seller.

The ECJ agreed that there was a potential conflict between the national legislation and the free movement of goods principle anchored in Article 34 TFEU: clearly, an offence of aiding and abetting the distribution of goods protected by copyright constituted a restriction of the free movement of goods. While this contravened Article 34 TFEU, it was possible to justify this restriction under Article 36 TFEU. The ECJ argued that where goods were placed on the market because of differences between national copyright laws, bypassing the permission of the right-holder, national law could be used to restrict the free movement of goods. Consequently, the free movement principle would not trump an offence of aiding and abetting unlawful distribution of goods protected by copyright anchored in national law.

Practical significance

In view of previous ECJ rulings, the outcome in this case may be unsurprising. It is nevertheless significant, not least for businesses which trade in goods that attract copyright protection. If they embark on cross-border trade, there is a need to take account of the copyright laws of other Member States. The Advocate-General had remarked—and the ECJ agreed—that the requesting of consent from the respective copyright owners would have been the prudent step to take before embarking on the particular business venture. Viewed in this light, the approach taken by German copyright law could not be regarded as disproportionately restricting intra-EU trade. On a policy level, it is unclear whether this decision will lead the European Commission to consider further attempts at harmonizing further areas of copyright law where national levels of protection differ between Member States. There are prominent examples where previous rulings had led to European copyright legislation in the early 1990s: Case 62/79 Coditel v Cine Vog (Satellite and Cable Directive), Case 158/86 Warner Bros v Christansen (Rental Rights Directive) and Case 341/87 EMI Electrola v Patricia (Term of Protection Directive). In all of those celebrated instances, it was argued that the differences in copyright protection between Member States hindered the completion of the Single Market programme. In copyright and authors' rights terms, there is still a very long way to go before that objective is attained.

There is a recurring argument that ever-increasing cross-border business and consumer activity via the internet and other communications technology require a wider and conceptually based, less piecemeal, approach to harmonization of national copyright laws for the benefit of all stakeholders. Disputes such as Donner may be quite detrimental to both consumer and business confidence in intra-EU trade, besides painting an unclear picture for owners and authors of copyright works. The recent Commission proposal for a directive on ‘collective management of copyright and multi-territorial licensing of rights in musical works for online uses in the internal market’ may only be the first sign of things to come. Given that a more holistic approach to harmonization of copyright law, while desirable, may be illusory, a high number of smaller steps towards that aim are most likely.