June issue now out - what's in it?

As readers know, JIPLP is renowned, among other things, for running ahead of schedule. Unfortunately, our latest issues have been unexpectedly delayed. We’re back on track now though and hope to catch up with our publication schedule as soon as possible. In the meanwhile, let me remind you that many articles, case notes and reviews are available online before issues are formally published - you can read them through OUP's Advance Access feature (freely available to all subscribers).

Here's what you can find in our latest issue, which is now available in print and online. If you are not a subscriber, you can find more information about our subscription schemes here. You can also purchase short-term access to individual articles by visiting the relevant page on JIPLP's website.


Table of Contents


Volume 11 Issue 6 June 2016

Editorial

Current Intelligence

Articles

From GRUR Int.

IP in Review



Editorial - Muscling in on unjustified threats: Reform is long overdue but is it enough?

In our May issue, Editorial Board member and Scottish solicitor Gill Grassie (Brodies LLP) highlighted the main issues surrounding the legal framework applicable to groundless threats in the UK, taking a look at the Intellectual Property (Unjustified Threats) Bill published in October 2015 and discussing the way forward.

The Intellectual Property (Unjustified Threats) Bill was finally introduced in the House of Lords on 19 May 2016. But have Gill's concerns been addressed? What do readers think?

Muscling in on unjustified threats: Reform is long overdue but is it enough?

Gill Grassie
Email: gill.grassie@brodies.com.

The UK regime of unjustified or groundless threats has long been a controversial subject for IP practitioners and their clients. It is largely unique to the UK and the Republic of Ireland and concerns threats to retailers that are merely selling goods that are alleged to infringe, as opposed to manufacturers. These retailers (‘secondary infringers’) may well want to avoid a legal fight and take the easy option of ceasing to deal in the goods concerned. As a result, the manufacturers (‘primary infringers’) may never have the opportunity to defend the allegations or even know why they have lost that particular customer. Despite its good intentions, the threats legislation and case law usually leads to a difficult discussion with a client and can, in practice, act as a barrier to exercising registered IP rights.

So what are unjustified threats all about? To recap, if an IP owner makes a communication to a third party alleging infringement that can be reasonably viewed by it as a threat to take action in the UK courts, that party, or anyone aggrieved by the ‘threat’, can sue the rights owner for making an unjustified threat of proceedings. In such an action injunctive as well as compensatory relief can be sought. The threats legislation can, as might be imagined, easily catch IP owners and their advisers out, especially those based outside the UK who may not even know of its existence or easily understand its complexity. The requirements vary according to which type of intellectual property right (IPR) is being invoked, and the regime does not include all types of IPR. Passing off, copyright, trade secrets and database right are excluded and therefore threats based on these grounds are legitimate, whether made to a secondary or primary infringer.

IP rights are, of course, intended to incentivise scientific and technical advancement, development and creativity. Arguably the threats provisions are a disincentive to do this as well as to protect IP by way of registration. Why invest in a new idea and protect it with a patent if to avoid being sued yourself you are forced to sue every infringer? Should it not be possible instead to use your rights to seek in good faith to persuade them to stop the infringement? An IP holder may know only the identity of the retailer/reseller of the infringing products and so has no option but to pursue them in the first instance. The reaction of clients is often one of disbelief when they are told of the risks of the tables being turned on them for, as they see it, perfectly legitimate use of their rights for the purpose for which they were acquired in the first place.

Originally conceived to prevent bullying use of IP monopoly rights and as a way to tackle unfair competition, the regime ironically encourages rights holders to go straight to court without any advance notice. This can be a very expensive sledgehammer to crack a nut. Also, far from assisting a negotiated commercial resolution it is more likely to put the parties at loggerheads and delay, or even take away any chance of, achieving a sensible out of court settlement. All of this is at odds with a court system in the UK that puts the onus on the parties to attempt to resolve matters out of court and to view litigation as the last resort. Indeed, failing to attempt to mediate or negotiate before suing, at least in the English courts, can result in costs penalties.

The regime has, for the reasons outline above, been the subject of consternation in the IP profession. This is perhaps not surprising taking account of the fact that the lawyer or IP professional sending any relevant communication can themselves be sued if the threat is held to have been unjustified. Often that very angle is used by the lawyers acting for the allegedly threatened party as a nuisance tactic to try and drive a wedge between the lawyer acting for the rights holder and their client, as it raises clear issues of conflict. Frequently IP lawyers will request an indemnity from their clients as a condition of sending the potentially threatening communication, prompting the client to terminate the relationship, especially where they do not have a longstanding relationship with the lawyer concerned.

Matters would be far more straightforward if it were always easy to decide what constitutes an actionable threat. However it is often far from clear. Case law suggests only that the definition is very broad and lawyers trying cleverly or artificially to draft their way around the provisions in any letter before action will not be guaranteed success. Also the alleged threat will potentially be ‘unjustified’ if no court action had, at the time of its issuance, yet been raised. If, on the other hand, an action has been raised for infringement, of course the threat has been carried out. That prevents any action for threats being raised, irrespective of the merits of the substantive case. This does not sit neatly with the need to prove infringement and that the right is valid to have good defence where a ‘threat’ is made before any action is raised. Merely raising an action after the threat is made does not in itself afford a defence. Apart from certain safe harbour provisions the only way to justify a threat is to counterclaim successfully and prove there has been infringement and that the right is valid. Smaller businesses that have used their limited budgets to create, protect and register their IP can frustratingly be prevented from even trying to resolve even potentially strong cases of infringement out of court for fear of being sued themselves and caught up in a court battle they are obliged to fight at huge cost. In addition, the fight is commonly with a larger entity with much deeper pockets. Is this result not simply bullying too?

Lawyers, as always, look for loopholes to exploit and with threats there is no exception. The fact that the threats regime does not apply to all IP creates the possibility of evading the legislation. An example is passing off, which is often referred to as a ground of action instead of registered trade mark infringement. However, this can be counter-productive as the alleged infringer is not then on notice of the full case against it. A procedural device which arguably can be used in the Scottish Court of Session to get around the application of threats is to raise an action and have it warranted for service and send the writ (a Summons) to the defender, along with a cease and desist letter. Scottish procedure means that an action has already been raised at the point the threat is made and so there is no unjustified threat. The benefit of this is that raising the action is not hugely costly and there is generally no obligation to pursue it further.

Bearing all of this in mind, the writer was understandably enthused when she heard some time ago that the Law Commission was reviewing the law of threats. Following consultation, the Intellectual Property (Unjustified Threats) Bill was published in October 2015. On analysis, the proposed reforms are not particularly radical and are largely aimed at bringing all the relevant IP rights into line so that there is some consistency. They do however offer lawyers and patent/trade mark attorneys immunity if they have clearly identified in the ‘threat’ that they are acting for a disclosed client. This should be good news for IP owners as there should be no more indemnity requests from their lawyers, who should be able to take a more robust approach overall without the risk of the conflict issue arising. Justification of a threat will, however, still ultimately depend on whether the IPR holder actually sues/counterclaims and wins both the infringement and validity argument. Could matters be improved if, as alluded to above, just raising an action in the first place before or after the threat is issued amounted to a defence, where the court can (as is the proposal in the Trade Secrets Directive) impose sanctions on a party where its action is manifestly unfounded. This should be a suitable disincentive to raising such abusive actions and to sending out letters alleging infringement where there is no basis. Indeed the Law Commission itself indicated that it may be appropriate to consider the introduction of a new tort of making false allegations.

Complicating matters further, the Bill has recently been amended in an attempt to deal with the new incumbent UPC (unified patent court) system. These amendments will inevitably mean the UK law of threats will continue to reach beyond these shores and may even be a more frequent issue in the future if the UPC is as successful as is hoped. If the Bill is enacted in its current form all international and UK-based IP right holders, will need to be aware that they may be sued in the UK courts if they make a communication of a threat to bring infringement proceedings regarding an alleged act of infringement in the UK. This will be irrespective of the country in which that communication was made or received, or indeed in which proceedings are threatened. On the other hand, threats of actions elsewhere in the EU for acts committed in the UK would presumably (theoretically at least) not be subject to threats provisions.

The Intellectual Property Office launched a consultation on the Bill, which concluded on 13 November 2015. It is hoped that contributions to that consultation will inform the Government's review of the draft Bill, allowing it to progress through the legislative process. All in all, the proposed new UK threats regime raises many complex issues for IP practitioners and their clients where the latter own the affected registered IP rights. It is perhaps a pity that advantage was not taken of the opportunity to make more radical change and to create a level playing field with the rest of Europe in accordance with the policy of harmonisation. This is certainly a space to be watched as we progress through 2016.

© The Author(s) (2016). Published by Oxford University Press. All rights reserved.

In person interview - Paul Maier

Our second interview with an IP celebrity features Paul Maier, Director of the EU Observatory on Infringements of IP Rights at the European Union Intellectual Property Office (Twitter: @EU_IPO). Paul joined OHIM in 1995, as chief advisor to the President of the Office, before being appointed as Director of the Designs Department in 2002 and President of the Boards of Appeal in 2005. In his current position, Paul oversees the European Observatory on Infringements of IP Rights, a network of experts and specialist stakeholders that help shape IP policy in the EU. You can find out more about the Observatory here.

A short note to all our readers: the In Person series features a selection of IP personalities chosen by the editors of JIPLP. However, we would be absolutely delighted if you shared your own In Person interview, either as a comment to this post, or via email. Further, you may wish to take our list of questions and ask them to your favourite IP people, sharing the resulting interviews with our readers. The In Person series, after all, is about each and every one of us!


In Person interview with Paul Maier


How did you first become interested in intellectual property?

During my studies in business law in Strasbourg.

Who were your formative influences in IP?

Professor Burst was the first who spoke to me about IP but I must insist that I am of no school in particular and find academic “wars” particularly unhelpful and tiring!

What was the first IP-related task you had to undertake?

In 1983 I started my career working for AIM (Association of European Branded Product Industries). There I had my first professional contact with trade mark law, unfair competition and related subjects. I was following and reporting on the EC developments in these matters. My first real work on IP was with the copyright unit of the Commission. I was in charge of the preparation of the directive on harmonisation of the term of protection of copyright and neighbouring rights (Dir 93/98).

What IP reform would you most like to see implemented?

The next important step in the EU is to make the Unified Patent Court a success! Of course we all wait to see what will happen with the copyright reform too.

Who or what is the IP owner’s worst enemy?

Often people think that having a registration is the hardest part of IP protection. Actually making sure your rights are respected by first monitoring your market and other registrations and then eventually enforcing your rights is essential. The mistake is to think that after registration the work is done!

Who in IP today do you most admire?

I will not give any names! Not that there are not many people I can think of to cite but this is like speeches: it is not only what you say that is important! Forgetting something or someone important can be worse than saying something wrong! Let me just say that people I think of come from all fields of IP: officials, judges, academics, lawyers and other professionals, leaders in stakeholder groups. There are admirable people in all these categories that would deserve to be named. What is important is to have good ideas and put all the efforts into making them a reality!

If you could not have been involved in IP, what would you have liked to be?

I would have been involved in EU integration anyway! I have been an EU official for 28 years now. I am a convinced European.

What IP publication/training course do you particularly recommend?

IP teaching has evolved hugely over the years and there are many good books, IP institutes and training courses in general. The IP Tool Kits prepared jointly by EPO and EUIPO are great documents. In general both academies have really good material. For the rest CEIPI in Strasbourg, Queen Mary in London, Fordham in NY are great places to study IP. There are many more nowadays!

What is your favourite song/book/film?

Again an impossible question, the choice will depend on the moment and the place I am in! To give an idea: Book: Animal Farm by G. Orwell Film: Les tontons flingueurs by G. Lautner, dialogues by M. Audiard Song: All along the watchtower by B. Dylan, J. Hendrix version

What’s your favourite meal …?

Food is important and good food can be really great. I am a curious eater in the sense that I like to discover new tastes and eating habits. But really a good meal is one I share with my family and /or friends! You can have a great dinner with only reasonable food but great company. Great food can be spoilt by bad company…

… and with whom would you most want to eat it?

See above

What brand most closely reflects your personal ethos?

No publicity!

What three words best describe you?

Open minded (I hope!), determined, looking for solutions.

If a genie offered you three wishes, what would they be?

There are no genies and it is very good that it is like that. I think people must do their best in what they have to do. You make your choices and implement them.

In person interview - Jeremy Phillips

JIPLP is launching a new series of In Person interviews (our readers may remember that the journal published several In Person profiles a few years ago - you can read them all here). This new round of interviews is designed to introduce our readers to some members of the IP community that have in common an outstanding passion for, and dedication to, intellectual property in all its forms. We have sought to bring together a diverse group of people, with different backgrounds, careers and perspectives - some are rising stars or renowned personalities in the field of IP, others are at the beginning of a promising career. All, however, have crossed the path of intellectual property and have experienced the same incantation. We hope that these interviews will inspire others to follow in their footsteps. And for all those that are already part of our IP community, the In Person series is not only an occasion to learn more about our colleagues, but also a great opportunity to reflect on the role that we all play in shaping the future of intellectual property.

For our first interview, we turned to our own Jeremy Phillips, the founder of JIPLP and of the IPKat, a person whose love for IP has been, is, and will always be, an inspiration for all of us. Jeremy's IP knowledge is as legendary as his desire to share it. His unparalleled contribution to IP cannot be translated into numbers (blog posts, articles, conferences, students, ...), but I think it is safe to say that Jeremy has been (and still is!) an amazingly patient, encouraging and supportive teacher for anyone interested in IP and willing to dedicate some time and energy to it.

A short note to all our readers: the In Person series features a selection of IP personalities chosen by the editors of JIPLP. However, we would be absolutely delighted if you shared your own In Person interview, either as a comment to this post, or via email. Further, you may wish to take our list of questions and ask them to your favourite IP people, sharing the resulting interviews with our readers. The In Person series, after all, is about each and every one of us!


In Person interview with Jeremy Phillips


How did you first become interested in intellectual property?

By chance. It’s a long story which I’m happy to tell anyone who wants to buy me a coffee …

Who were your formative influences in IP?

Melville B. Nimmer and John C. Stedman, who taught me that it was possible to take a lively interest in wider policy matters without losing one’s integrity as a black-letter lawyer; Royce Whale, for reminding me that at the end of every legal right and duty was a human being; finally, my students, whose questions and comments did more than anything else to shape my sustained interest in the subject.

What was the first IP-related task you had to undertake?

Defending myself from an allegation of passing off and copyright infringement when, as a student, I was involved in a delightful parody of a rather pompous official student newspaper.

What IP reform would you most like to see implemented?

I would like to see the task of comparing trade marks for similarity and likelihood of confusion taken away from trade mark examiners and the judiciary. This job should be handed over for an instant and irrevocable decision by a lay panel of ordinary people or, failing that, a panel of trained hamsters. It could only be an improvement.

Who or what is the IP owner’s worst enemy?

Individually our worst enemies are ourselves.  Collectively, economists whose models fail to take into account the way in which the IP systems actually work.

Who in IP today do you most admire?

As a class, the IP media and all the IP owners, practitioners, judges and administrators who do so much to ensure that our understanding of IP is not only shared but made speedily accessible to others.  As for individuals, the list would be a very long one since I have always been encouraged to see the admirable qualities of others.  Top of that list come people who have achieved great things through their persistence.  Top of the list come Dids Macdonald and Tove Graulund for their contributions to ACID and MARQUES respectively. Richard Arnold will be there too, as soon as he has achieved the allegedly impossible and installed initial interest confusion as a doctrine of English common law.

If you could not have been involved in IP, what would you have liked to be?

If I couldn’t have been involved in IP, I would still like to have been.  Failing that, there are two roles I’d love to have tackled.  Both require patience, intellect, an ability to accept and absorb quantities of painful criticism, good communication skills and motivational abilities and a deep understanding of the theory and practice of law: they are (i) managing a top-class football team and (ii) being a rabbi.

What IP publication/training course do you particularly recommend?

I wouldn’t recommend any course in particular, since the success of any programme depends far more on the needs, attitude and effort of a person taking it than on the syllabus, teaching staff and facilities offered. 

As for publications, I’d strongly recommend sticking to primary sources — Conventions, statutes, case law and so on — supplementing them with other people’s commentaries only where necessary. In that regard I’m naturally prejudiced towards JIPLP and the IPKat weblog, not just because of my personal involvement in them but because, for the decade before my retirement, they represented around 90% of the material I read.

What is your favourite song/book/film?

Song: you can’t be around for as long as I’ve been and just have one favourite song.  Three close runners-up for the favourite spot, in no particular order, are Mahler’s “Lieder eines fahrenden Gesellen”, The Electric Light Orchestra’s outstanding 1973 version of “Roll Over Beethoven” – a real period piece -- and The Incredible String Band’s cryptically profound “Cousin Caterpillar” — and there are about a hundred alternative songs that would have made the list of near misses if I was in a different mood when compiling it.  The winner, though, is “Rainbow High”, from the original recording of Evita where it is sung by Julie Covington.  Apart from the sheer power of the music, which makes it so difficult to sing, the words are compelling. They reflect the brash self-confidence and conceit, the ambition and the resolve that are so valuable if properly used and so destructive if abused. They also recognise the causative link between illusion and the reality it creates.

There should be a category for most-hated music too.  Into this category fit Max Bygraves’ eternally irritating “Tulips from Amsterdam”, Idina Menzel’s ubiquitously noxious “Let It Go” and the grindingly turgid Pachelbel Canon.

Book: in English, it has to be The Gruffalo — one of the most perfect pieces of text ever crafted: it has structure, content, wit and wisdom, and it maintains momentum and the reader’s interest from start to finish.  Outside of that, the massive, spectacular textual embroidery of the Babylonian Talmud, in its combination of Hebrew and Aramaic, is a compulsive read that, once started, one can never master — but neither can one ever put it aside. 

Film: it has to be a dead heat between “Les Enfants du Paradis” and “Les Parapluies de Cherbourg” — two French films that are each one-of-a-kind.  They just about fend off “Blues Brothers”, “Ratatouille” and “Paddington” …

What’s your favourite meal …?

The opening salvo would be a ball of boiled gefilte fish and beetroot and horseradish source with fresh, warm white challah to whet the appetite, followed by a shot of Woodford Reserve to clean the palate. I’d continue with my wife Sara’s 100% perfect chicken soup.  The main course would feature roast chicken with its crisp skin garnished with paprika complemented by a selection of assorted green spices, with a spread of roasted root vegetables, all washed down with a decent Cabernet Sauvignon.  To conclude: blackberry and apple crumble, followed by a long, hot glass of water with sliced lemon, some real (70% entry-level) plain chocolate and a couple of cubes of crystallised ginger.

… and with whom would you most want to eat it?

My favourite dining companion is my wife Sara and I always enjoy feasting with my family.

Turning to the intellectual property community, first there is my noisy meal.  I enjoy sharing my meals with lively, well-informed and opinionated debaters.  My ideal IP conference table of 10 would likely include Hugh Hanson, Howard Knopf, Eleonora Rosati, Alex von Muehlendahl, Verena von Bomhard, Massimo Sterpi, Mark Summerfield, Robin Jacob and Tobias Cohen Jehoram. 

Then there’s my quiet meal, to share with friends whose best thoughts are too easily cut off by the excited interruptions of others and who have to be listened to carefully in order to be fully appreciated.  Around this table sit Neil Wilkof, Darren Smyth, Francis Gurry, Shireen Smith, David Nimmer, Fidelma Macken, David Stone, Tan Tee Jim, and Bankole Sodipo.

What brand most closely reflects your personal ethos?

Oxford University Press: it’s old, wise, pernickety, committed to quality and traditional — yet always willing to try something new, and generally right even when it’s wrong.

What three words best describe you?

Not for publication.

If a genie offered you three wishes, what would they be?

One of my favourite jokes concerns a man who, when offered a wish, asked to be absolutely irresistible to women.  When he woke up the next morning, he discovered that he had metamorphosed into a bar of chocolate.


Since I can’t second-guess the outcome of my wishes, I would decline to make use of them.

Editorial: counterfeiting and terrorism - what is the link?

Our latest editorial, masterfully crafted by Marius Schneider, explores the link between counterfeiting and terrorism, arguing that the former is frequently a low-risk, high-reward funding source for terrorists. Could a stronger and more efficient approach to counterfeiting be an effective measure against terrorism?

Counterfeiting and terrorism 
Marius Schneider
Attorney-at-law at the Brussels and Mauritius bar.
Email: ms@cew-law.be;office@ipvocateafrica.com.

Identifying and cutting off terrorists' access to funding has become a key priority for the international community. It is thus not surprising that while the United Nations, the European Union, G8 and others present action plans to dry up financial sources for terrorists, right-holder organizations remind the authorities and policymakers of the links between counterfeiting and terrorism. 
The French right-holders' association Union des Fabricants (Unifab) has presented a report on ‘Counterfeiting & Terrorism’ (available at:http://www.unifab.com/images/Rapport-A-Terrorisme-2015_GB.pdf) in which they highlight the proven links between counterfeiting and terrorism. The thoroughly documented report presents the involvement of several terrorist organizations in counterfeiting activities, explains the reasons for this choice and recommends further actions. 
We learn, for example, that Mokhtar Belmokhtar the leader of Al-Qaeda in the Maghreb (Aqmi), responsible for several recent attacks in West Africa, has the nickname ‘Mr Marlboro’ because large parts of his activities are financed by counterfeit and contraband tobacco products. 
What is more astonishing is that the Kouachi brothers—the terrorists involved in the Paris attacks on Charlie Hebdo—were under the surveillance of the French anti-terrorist police, until the monitoring of their telephone conversations revealed that they were setting up a business involving counterfeit clothing and sports shoes. This is when the police surveillance was stopped because, according to the officers, they were leaving the terrorist world to focus on petty crime. Only a few months later the Kouachi brothers burst into the newsroom of Charlie Hebdo. Some of the weapons used in the attacks were financed by the counterfeiting activity and the Director-General of French Customs confirmed that in this particular case there were ‘close links between counterfeiting and the financing of terrorism’. This specific example shows how regrettable it is that public authorities categorize counterfeiting as a ‘petty crime’ while in reality, it represents a major funding method for organized crime in general and terrorism in particular. 
The Unifab report shows that the conflict in Syria is partially financed by the traffic of counterfeit amphetamines, which are very popular with consumers in the Middle East and those fighting in the conflict. In Syria, the money obtained from the sale of these counterfeit amphetamines enables forces to arm themselves, while the—albeit fake—medicine is used by fighters who see it as a way to withstand many hours in battle, without fear or fatigue. 
In relation to the Paris attacks of 13 November 2015, the links are less obvious: the report points out that some of the terrorists come from the Belgian city Molenbeek, which is considered as a notorious place of radicalization, and the report cites the mayor of Molenbeek, who expressly links delinquency such as drug trafficking, counterfeiting and offences to social law with the phenomenon of radicalization. 
In this particular case one can only ‘feel the link’, but the suspicions are not established beyond reasonable doubt. Then again, this is probably due to the fact that both terrorism and counterfeiting remain illegal activities which are carried out underground. To stay with the example of Molenbeek—which I know very well since I regularly assist my clients with seizures of counterfeit products in this part of Brussels—it is clear that counterfeiting and other delinquency are widespread in this community. However, to conclude from there that this leads to radicalization and ultimately to terrorism is less obvious. Having said that, there will inevitably be instances where candidates for the jihad engage in counterfeiting or piracy to make ‘quick money’ to finance a trip to terrorist camps or for their terrorist ventures like the Kouachi brothers did in France. 
The Unifab report clearly shows why counterfeiting is a ‘logical choice’ for terrorists—and other malicious individuals—who are out for quick money while taking a low risk. The report demonstrates that counterfeiting is a highly lucrative activity in comparison to other criminal activities, such as drug dealing or human trafficking, while the stakes are low for those who are caught. This is due in part to the fact that the legislation in place in most countries is not sufficiently dissuasive, that penalties are rarely enforced and are often well below the maximum that the law provides for. 
The report rightly concludes that the gap between the reality of counterfeiting and its treatment by national, European and international institutions is almost unreal! 
© The Author(s) (2016). Published by Oxford University Press. All rights reserved.