The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Saturday, 21 October 2017

AIPPI Congress Report 13: The Business of IP: Big Data, Big Issues

I am not "big" -
I am just a collocation of
large sets of fur
How big is your data? If you ever pondered how big is "big" and where the future of Big Data is leading, you are in luck - AusKat Tom Reid (Accenture) reports from the Big Data session at the AIPPI World Congress in Sydney.  
"The sixth panel session at AIPPI’s Sydney Congress, moderated by my co-Guest Kat Warwick Rothnie, focused on issues for IP law raised by “Big Data”—a term arguably dating from as early as 1989.
The question for debate was whether existing IP rights sufficiently protect the interests of those in industry who create and use Big Data, but discussion moved quickly into the related topics of AI and the Internet of Things.
The session opened with a presentation by video from the European Data Privacy Supervisor, Giovanni Butarelli, pointing out some of the difficulties raised by the intersection between such interests and other rights, not least the rights of individuals in relation to personal information.  Mr Butarelli also noted the problems raised for democracies by reliance on Big Data to generate news content, particularly filter bubbles (the tendency of some online algorithms to serve up news by reference to a user’s prior reading or viewing habits, resulting in a progressive narrowing of news topics and the elimination of competing views), and fake news resulting from the automated propagation, via algorithm-powered media, of an originally untrue story.
Dr Benjamin Mitra-Kahn, Chief Economist at Australia’s IP registration authority, IP Australia, pointed out the ways in which we all trade in personal information—including when, as consumers, we routinely trade our information about ourselves for some monetary or other benefit, such as a supermarket discount card.  Dr Mitra-Kahn raised the question of whether, from an economic perspective, the market in such information is fairly balanced: he asked whether a consumer who is required to disclose personal information to get access to a service really has a practical choice, including where the service is technically discretionary but is routine or convenient.  Neatly, he used the AIPPI conference app, which requested personal information to register, as an example.
Tina Chappell, Associate General Counsel and Director of Intellectual Property Policy for Intel Corporation, focused on the advent of artificial intelligence as a logical evolution of Big Data, supported by simultaneous—and still continuing—advances in connectivity and computing power.  In this, she was supported by Dr Mitra-Kahn, who had begun his presentation by announcing that the age of Big Data is over, and that the age of AI is upon us.  Ms Chappell defined AI as the ability for systems to sense, reason, act, and adapt, and compared the effects she expects from the growth in prevalence and sophistication of AIs to the agricultural, industrial, and digital revolutions, being, according to Intel CEO Brian Krzanich, “the next major turning point in human history”.  Among her predictions, she told the panel audience to expect 50 billion connected devices by 2020, and an AI market worth US$96 billion by 2025—and US$290 billion by 2035.  For lawyers already nervous about a tight legal market, Ms Chappell had the happy news that an AI had recently been able to successfully predict the outcome of 70% of 7,700 US Supreme Court cases decided between 1953 and 2013, based on text analytics.  While the current number might be only 20% better than chance, it will no doubt improve.
Kenichi Nagasawa, Head of IP at Canon Inc, focused on the allied area of the “Internet of Things”.  He pointed to the increasing importance of standards-essential patents to the technologies that enable the IoT, including 4G, video compression standards, and wireless communication protocols.  According to Mr Nagasawa, the convergence of technologies brought about by the IoT will bring participants in traditionally separate industries into contact and potential conflict over IP rights.
Questions focused on the fascinating question of AIs as… IP creators.  If an AI generates an invention entirely by itself (and potentially is the first even to identify the problem solved by its invention), do we reward anyone with a monopoly, and if so, who?  Panellists here pointed to the well-known macaque photo debate as an analogy.  On the other side of the coin, can an AI infringe, and in what circumstances should a human being be held responsible for that infringement?  (Readers might be tempted to think the question premature, but Ms Chappell’s presentation mentioned a case where Swiss police had “arrested”—or perhaps just confiscated—a robot that had bought ecstasy pills online as part of an art installation about the dark web.)
Dr Mitra-Kahn had perhaps the best answer: when chess Grandmaster Garry Kasparov lost to Deep Blue in 1997, he didn’t stop playing chess—he began training with a computer.  So the future probably belongs, at least initially, to teams comprising both human beings and AIs, and the challenge for IP policy makers will be to establish rules on how much human involvement is required for a monopoly right to subsist."

AIPPI Congress Report 12: Sparkling wine corks pop as AIPPI passes resolution on geographical indications

The AmeriKat getting her
teeth into some celebratory
champagne
With people suing airlines for serving sparkling wine as opposed to champagne, the topic of geographical indications (GIs) is in the news.  It was also the subject of a resolution at this year's AIPPI Global Summit in Sydney.  Guest AusKat, Tom Reid (Accenture), reports:  
"This blog recently posted on an avalanche of academic material on geographical indications (GIs) and their cousins, appellations of origin (AOs).  To this may now be added a resolution on the topic passed at AIPPI’s annual meeting in Sydney, for which the author acted as secretary for the committee proposing the resolution
To recap and paraphrase, a GI indicates that a product has a characteristic or reputation “essentially attributable to its geographical origin”, whereas an AO is a subtype of GI indicating that the product’s characteristics are due “exclusively or essentially” to the geographical environment from which it originates.
The wine and cheese wars have persisted since the original Lisbon Agreement on AOs in 1958 (most recently revised in 2015 and now known as the Geneva Act).  While AIPPI’s objectives include the harmonisation of intellectual property laws among jurisdictions, it had, until now, refrained from saying much on the topic.
Twenty-eight member national groups contributed responses to a questionnaire preceding this year’s resolution, however, indicating significant member interest.  The responses documented what is a highly variable, patchwork approach to GI or AO protection among jurisdictions, consisting of a calico (note loosely-linked Kat pun) mix of sui generis rights and certification-type trade marks.  The inconsistent treatment is reflected, for example, in the fact that some jurisdictions, including New Zealand and Vietnam, protect GIs (via TRIPS) but not AOs; and some, such as Australia, protect them by sui generis legislation only in relation to certain products—such as wines.
AIPPI’s aim in Sydney was to establish at least a framework for future contributions to, among other things, WIPO’s Lisbon System working group, in which AIPPI has, for several years, participated as an observer.  The resolution adopts some basic principles, including:
  •  definitions of GIs and AOs drawn from corresponding definitions under TRIPS and the Geneva Act;
  • that registrations providing for the protection of GIs and AOs should be available;
  •  that GIs and AOs, both domestic and foreign, should be protected against both “use that is misleading or deceiving for consumers as to the origin or the characteristics of the product”, and “any conduct which harms or unduly exploits or takes advantage of the reputation of the GI or AO”
  •  that injunctions and money damages should be available for infringement; and 
  • that grounds for revocation should include that the GI or AO has become generic.
Détente, however, was not entirely achieved: more strongly-worded paragraphs recommending prohibiting the registering of a trade mark or domain name conflicting with a GI or AO were, after discussion in which the terms “Champagne” and “Prosciutto di Parma” were politely mentioned by delegates, voted down in the plenary session in favour of deferring those issues to future study.
This is, of course, where the real debate lies.  Time will tell whether the same economic factors that have contributed to an inability to find common ground at the diplomatic level constitute, in microcosm, a similar obstacle for AIPPI.
The full text of the resolution will be available at AIPPI’s website."

Friday, 20 October 2017

A defensive non-assert? Philips v Asustek and HTC

This GuestKat cut her patent litigation teeth on smart phones - back in the day when smart phones were not so smart.  She therefore had a wave of nostalgia delving into the acronyms of mobile telecommunications standards in the recent Court of Appeal decision of Koninklijke Philips N.V. v Asustek Computer Incorporation, HTC Corporation and others [2017] EWCA Civ 1526.  The judgment concerns an appeal from a decision of Arnold J on a preliminary issue [2016] EWHC 2220 (Pat), regarding the construction of a California law governed patent cross-licensing agreement containing a covenant not to assert patents against third parties. 

Background

HTC are the third party beneficiaries of a covenant contained in a 1998 cross-licence agreement between Qualcomm Inc and the Claimant, Philips. At trial of the preliminary issue, Arnold J held that the covenant did not cover HTC's acts of alleged infringement complained of by Philips in patent infringement proceedings brought in the English High Court. The three patents in issue concern High Speed Packet Access (HSPA) and have been declared essential by Philips to the Universal Mobile Telecommunications System (UMTS) standard developed under the European Telecommunications Standards Institute (ETSI). 

The cross-licence is governed by the laws of the state of California.  It was common ground between the parties that under California law extrinsic evidence is admissible as an aid to interpretation to a greater extent than under English law.  Admissible extrinsic evidence includes the circumstances under which the parties negotiated or entered into the contract, the object, nature and subject matter of the contract, how and why particular language emerged from the parties' negotiations, and the subsequent conduct of the parties.  There was evidence of California law before the judge at first instance and he made extensive findings as to the relevant California law - none of these findings was challenged on appeal (see summary of findings at paragraph 32(i) to (ix) of appeal decision). 

HSPA was added to the UMTS standard in 2002 (enabling handsets to download data at high speeds) and in 2004 (for uplink data transfer).  The alleged infringing HTC handsets implement releases 5 and 6 of UMTS, and have HSPA.  HSPA is a hybrid TDMA/CDMA system. 

Covenant not to assert

The relevant extracts of the cross-licence provide as follows:

"QUALCOMM Option to Obtain Covenant Not to Assert. Philips hereby grants QUALCOMM an option to designate any or all of its existing and future CDMA licensees as a 'CDMA Technically Necessary Patent Beneficiary.' "..."Philips, on behalf of itself and its Affiliates, hereby covenants that, as to each CDMA Technically Necessary Patent Beneficiary, Philips and its Affiliates will not assert any of their CDMA Technically Necessary Patents against any manufacture, use, sale, importation of equipment and/or components, or other acts of infringement, relating to a CDMA Wireless Industry Standard of a CDMA Technically Necessary Patent Beneficiary".

The clause also provides that "nothing in this Section 4.3[1] shall prohibit or otherwise limit Philips' right to assert any of its patents against any entity for infringement relating to any TDMA equipment or system (including, without limitation GSM, IS-54, PCS-1800, and PCS-1900)."

"CDMA Wireless Industry Standard" is defined as standards for public code division multiple access communications including but not limited to a number of specified standards "including the proposed ETSI UMTS standard" and their "subsequent releases, revisions, derivations".   This definition also expressly excludes any standard "which utilizes a TDMA over-the-air interface".  

HTC argued that they are covered by the covenant not to sue, because (i) they have been designated a "CDMA Technically Necessary Patent Beneficiary" in writing by Qualcomm to Philips; (ii) the patents have been declared essential to the UMTS standard; and (iii) the UMTS standard is a "CDMA Wireless Industry Standard".  Philip submitted that the alleged infringements arise from HTC's implementation of high speed packet access (HSPA) which is not an act of infringement of a "CDMA Wireless Industry Standard".

Decision

The key issue on appeal was whether the non-assert covenant reached through and prevented Philips from bringing patent infringing claims covering HSPA - a hybrid CDMA/TDMA system that did not exist at the time the cross-licence was entered into. 

Had the drafters of the cross-licence expressly resolved the dilemma by stating in the HTC argued that the definition of CDMA Wireless Standard was completely clear, and expressly included the proposed ETSI UMTS standard within the definition?  Or did the exclusion for TDMA - which had been requested by Philips - mean that a hybrid TDMA/CDMA was excluded? 

Following an extensive analysis of contemporaneous events and witness evidence including the purpose of the cross-licence, the negotiations and drafts back and forth, the Court of Appeal concluded that the judge had not reached an incorrect conclusion and the appeal was dismissed.  The most significant factor was the absence of an express provision for payment of royalties to Philips.  This meant that had Philips been licensing its TDMA patents, it was doing so for nothing, yet the evidence showed that Philips had a much stronger position in TDMA than Qualcomm.  This was a "clear indicator that, if there is a practical and realistic construction of the agreement which does not result in Philips giving away its TDMA rights, then that construction should be adopted".  The equipment that implemented HSPA was TDMA equipment, and the covenant not to assert did not provide HTC with a defence to patent infringement. 

This is not the end of the story - HTC have other defences which await trial. The IPKat will keep you posted. 

Thursday, 19 October 2017

Recommendation on measures to safeguard fundamental rights and the open internet in the framework of the EU copyright reform

Further to the release of the European Commission’s Proposal for a Directive on Copyright in the Digital Single Market, the discussion has focused on a number of aspects. The proposal to remedy the so called ‘value gap’ (Article 13) [Katposts here] has attracted significant attention and commentary.

Together with a group of scholars active in copyright issues, Professor Martin Senftleben (Vrije Universiteit Amsterdam) has published a Recommendation on measures to safeguard fundamental rights and the open internet in the framework of the EU copyright reform.

Professor Senftleben explains more in detail the content of the proposal.

Here’s what he writes:

 Article 13 of the Proposed Directive on Copyright in the Digital Single Market (DSMD) and the accompanying Recital 38 are amongst the most controversial parts of the European Commission’s copyright reform package. Several Members States (Belgium, the Czech Republic, Finland, Hungary, Ireland, the Netherlands [here] and Germany [here]) have submitted questions seeking clarification on aspects that are essential to the guarantee of fundamental rights in the EU and to the future of the Internet as an open communication medium. 

A closer analysis of these questions in the light of jurisprudence of the Court of Justice of the European Union (CJEU) shows that the measures contemplated in Article 13 DSMD can hardly be deemed compatible with the fundamental rights and freedoms guaranteed under Articles 8, 11 and 16 of the EU Charter of Fundamental Rights. The application of filtering systems that would result from the adoption of Article 13 DSMD would place a disproportionate burden on platform providers, in particular small and medium-sized operators, and lead to the systematic screening of personal data, even in cases where no infringing content is uploaded. The filtering systems would also deprive users of the room for freedom of expression that follows from statutory copyright exceptions, in particular the quotation right (Article 5(3)(d) of the InfoSoc Directive) and the right to parody (Article 5(3)(k) of the InfoSoc Directive).

The adoption of Recital 38 DSMD would moreover lead to a remarkable restriction of eligibility for the liability privilege following from Article 14 of the E-Commerce Directive. Recital 38 DSMD does not adequately reflect the current status quo in the area of the safe harbour for hosting laid down by Article 14 E-Commerce Directive. Instead, it takes the assessment criteria of “promoting” and “optimising the presentation” of user-generated content out of the specific context of the L’Oréal/eBay CJEU decision. The general requirement of “knowledge of, or control over” infringing user-generated content is missing. In the absence of any reference to this central requirement, Recital 38 DSMD is incomplete and fails to draw an accurate picture of the current conceptual contours of the safe harbour for hosting.

Furthermore, there can be little doubt that according to the CJEU, Article 15 of the E-Commerce Directive is fully applicable to user-generated content platforms and intended to shield these platforms from general monitoring obligations. The Court’s jurisprudence shows clearly that an obligation to filter any information uploaded to the server of a platform hosting user-generated content would lead to a prohibited general monitoring obligation and be incompatible with Article 15 of the E-Commerce Directive.

In general, the Commission Proposal and subsequent Council Presidency Compromise Proposals confuse and mix different legal questions by bringing together the issue of the scope of the safe harbour for hosting under Article 14(1) of the E-Commerce Directive, and the issue of whether (and when) platform providers themselves carry out an act of communication to the public and fulfil the requirements of Article 3(1) of the InfoSoc Directive.

Looking for a safe harbour
Considering the criteria which the CJEU developed in the context of Article 3(1) of the InfoSoc Directive, it becomes moreover apparent that the mere act of storing and providing access to the public is not sufficient to establish copyright infringement. Recital 38 would dismiss additional infringement criteria that have evolved in the jurisprudence of the Court. Because of the ambiguous wording of Recital 38 DSMD, there is a real risk of modifying the notion of “communication to the public” considerably.

These findings shed light on the need to clarify service provider immunity instead of further complicating the legal assessment criteria. A further clarification of applicable rules should extend the principle that is already reflected in the EU acquis, namely that providers are not liable for users’ actions which they cannot reasonably be expected to know and control (Articles 12 to 14 of the E-Commerce Directive). A further clarification of this rule is advisable to pave the way for a uniform application of service provider immunity throughout the internal market. In the interest of legal certainty and a higher level of harmonization, a well-structured European legislative design of the “notice and takedown” procedure should be introduced, accompanied by an appropriate “counter notice” procedure.

In addition, it would be consistent with the existing acquis to introduce a new use privilege in favour of the creation of content remixes and mash-ups by users and the further dissemination of these remixes and mash-ups on online platforms. As a countermove, online platforms with user-uploaded content could be responsible for the payment of fair compensation. They could either pass on these additional costs to their users, or use a part of their advertising income to finance the payment of fair compensation. To generate an additional revenue stream for authors and performers, this alternative solution is clearly preferable. It does not encroach upon fundamental rights and freedoms, and leaves intact the safe harbour for hosting in Article 14 of the E-Commerce Directive.”

AIPPI Congress Report 11: What's the (technical) problem?

Said every alleged infringer everywhere...
The identification of the technical problem is an important aspect of European patent practice.  In this panel discussion on the final day of the AIPPI World Congress in Sydney, practitioners from Germany, the US, China and Japan explored the importance – or otherwise – of identifying the technical problem in their respective jurisdictions.  James Ellsmore (KWM) reports on Tuesday's final panel session:  
"The European Patent Office’s problem-solution approach to assessing obviousness renders the identification of the technical problem central.  It is also a requirement of the European Patent Convention that an application for a patent state the technical problem the claimed invention solves (at least implicitly, if not in explicit terms).  It was against this background that Dietmar Haug, Senior IP Counsel with KNH Patentanwälte, led a panel of practitioners in a discussion of the metes and bounds of the technical problem and its relevance to prosecution practice and infringement proceedings. Marina Cunningham, Managing Partner of McCormick Paulding & Huber, explained that the requirement to indicate the technical problem in a European application stood at odds with drafting practice in the US.  In the US, Marina explained that current practice is to limit the description of the technical problem in the background section as much as possible.  This is done for several reasons and stands in contrast to previous practice in the US, when applicants used the background section to define the technical problem addressed by the claimed invention.  As Marina explained, framing the problem in this way and identifying the closest prior art did not always work to the applicant’s advantage during prosecution or litigation and has now been abandoned. Sitting on the continuum between Europe and the US, Yali Shao, a partner of Liu, Shen & Associates explained that like Europe, China had adopted the requirement that a Chinese application describe the technical problem.  However, it is not a mandatory requirement: if there is no description in the specification, the examiner will not require the applicant to add a description into the specification.  Yali canvassed a number or pros and cons for either stating or not stating explicitly the technical problem in the specification.  Yali’s suggestion was that the Chinese application should state in a non-limiting way that more than one technical problem can be solved by the invention: “the invention solves at least one general problem and several specific problems”.  The one exception to the foregoing rule, Yali said, was that for business related inventions in China, an applicant should explicitly describe the technical problem in the specification, as this will often assist in demonstrating to the examiner that the claimed business method presents a technical solution and thus exhibits the required technical feature for grant. In Japan, like the US, there is no requirement that a specification include a description of the technical problem.  However, there are, as Nobushige Furuhashi, a partner of Abe, Ikubo & Katayama explained, benefits during prosecution in stating the technical problem – doing so may enhance an applicant’s chances of favourable examination as it is an opportunity to frame the problem that the invention overcomes in a way favourable to the applicant. The panel went on the discuss the effects of stating the technical problem and what impacts this might have for prosecution of the application where objections are raised based on novelty, obviousness, sufficiency and unity of invention, as well as the importance or otherwise of having an identified technical problem in cases of patent infringement.
 The panel session was a timely reminder of the difficulties faced by applicants filing patents in multiple jurisdictions and a valuable opportunity to learn more about how the specific issue of describing the technical problem is treated in different jurisdictions."

AIPPI Congress Report 10: Digital Health

The AmeriKat facing her own digit-al health 
issues...
In an invigorating panel discussion featuring experts from Australia, the US and Japan, the fourth and final pharma session of the AIPPI World Congress explored the IP challenges for digital healthcare businesses.  James Ellsmore (KWM) reports:   
"The key message from the panel, chaired by Niklas Mattsson of Awapatent, was that any IP strategy must align with, and support, the business’ overall commercial goals.  This was the case regardless of the type of business – whether an established pharmaceutical or medical devices company, university spinout or independent start-up. 
From an IP perspective, some of the major challenges identified by the panel included the difficult environment for patenting computer-implemented inventions in jurisdictions like the US and Australia, the need to work effectively with third party partners, and the inherent differences between traditional modes of IP protection, which evolve slowly and offer protection over the long term, and alternative methods of protecting IP in the digital health industry where product life cycles are much shorter.  
What does this mean for businesses looking to play in the digital health space?  First, digital health businesses need to develop (and regularly revise) their IP strategy.  What may have worked in the past, such as filing a patent for a key aspect of the new technology, may not work so well for a digital health technology.  Secondly, businesses should ensure that robust practices and procedures are put in place when working with any third party partners.  And finally, businesses should not be afraid to consider what other (non-traditional) modes of IP protection might support those businesses’ overall strategy and commercial goals. 
The first panellist spoke of her first-hand experience with Cardihab to develop a digital cardiac rehabilitation service.  Leonore Ryan, formerly of the Commonwealth Scientific and Industrial Research Organisation (CSIRO) (Australia’s leading government research body) and Cardihab, provided attendees with an insight into the constraints that digital health start-ups face when bringing a new digital health technology to market.  In Cardihab’s case, it was a 2-person start-up with $50,000 in the kitty.  It needed to get to market quickly and faced difficult choices about how to achieve this with a limited budget.  While it had an IP strategy, Leonore explained that it did not focus on traditional forms of IP protection.  Instead, Cardihab looked to gain a competitive edge through being first to market, enhancing user experience and developing robust clinical trial data to support its technology platform.  In Cardihab’s case, the ability to provide proof of clinical efficacy based on robust clinical trial data was more important than pursuing traditional forms of IP protection.  Leonore’s presentation echoed some of the key themes of an earlier presentation of Jane Perrier the previous day about venturing with IP.  As Jane explained, and which Leonore emphasized, the business must consider its IP strategy and how any IP can be used to achieve the business’ strategic objectives. 
The second panelist, Jonathon Anderson, patent counsel with Eli Lilly, then addressed the session on some specific IP considerations for digital health businesses, considered particularly from the perspective of an established pharmaceutical/medical devices company.  Jonathon expanded on challenges such as patent eligibility for computer-implemented inventions following the US Supreme Court’s decision in Alice, the significance of shorter product lifecycles for digital health products as opposed to pharmaceutical products, and discussed the different types of protection available for graphical user interfaces in the US and their value (or perhaps lack thereof).  Jonathon also canvassed some of the challenges for digital health collaborations between pharmaceutical and medical device companies on the one hand, and universities, research organisations and start-ups on the other.  He offered some ‘tips and tricks’ for overcoming some of these challenges.  A key message of Jonathon’s was that an established business moving into the digital health space needs to be aware of “culture clash” – there are different lifecycle management techniques for digital health products and that what has worked successfully in the past for traditional medical devices or pharmaceuticals may not necessarily work with a new product offering in the digital health space." 
Finally, Osamu Yamamoto of Yusua & Hara spoke of the Japanese experience with digital health technology.  Unlike Australia and the US, Osamu-san pointed out that some of the challenges in those jurisdictions – such as patenting computer-implemented inventions and isolated genomic DNA sequences – do not necessarily apply in Japan.  A key take away from Osamu-san’s presentation was the importance of knowing the market in which the business intends to develop its digital health product or service.  Given Japan’s “super-aging” society, the Japanese government has adopted a number of measures aimed at promoting the development of digital healthcare.  One of these measures was the liberalisation of remote medical treatment, which has led to a number of new applications and systems for the provision of remote medical care.  Other measures have included reforms to laws to protect personal information and to enhance trade secrets protection.  These reforms have significantly changed the landscape for offering digital health products and services in Japan, demonstrating the importance of customising a strategy to the specific market in which the product or service will be developed. 
While cats might have nine lives, digital health businesses only get one shot at success.  The panel session establishes that having an appropriately tailored IP strategy, investing in smart partnerships and being open to non-traditional forms of IP protection might significantly extend a business’ chance of success."

AIPPI Congress Report 9: The middleman - intermediary liability

The only intermediary blocking the IPKat is interested
 in complying with is that of your computer screen
On Monday, AusKat AIPPI reporter Clare Cunliffe attended the AIPPI World Congress panel session on “The middleman – intermediary liability”. The session delved into the problem created by advanced technologies and increased global access to communication networks bring opportunities to exploit and infringe intellectual property rights online, by a variety of actors.  Clare reports:  
"This panel session discussed intermediary liability in the digital world in key jurisdictions, including the availability of site blocking injunctions and addressed the practical effects and inherent limitations of such injunctions in the digital era.
The session was moderated by Agris Bitāns, of Eversheds Sutherland. The speakers were Remy Chavannes of Brinkhof, Marketa Trimble of the University of Nevada, Justice John Nicholas of the Federal Court of Australia and Martin Hosking of Redbubble (an online retailer of artworks uploaded by users). 
The panel considered:
  • What is an intermediary? Mr Chavannes offered a pragmatic definition of an intermediary, being anyone who could help a rights holder either prevent or prosecute an infringer.
  • The types of responsibility that might be imposed on an intermediary. Mr Chavannes suggested that these included financial liability, the responsibility to remove or block objectionable material to to prevent re-publication or removed content, the responsibility to identify primary infringers
  • Who had the rights and duties to determine infringement: This involved considerations of automation, transparency and redress.
Dr Trimble noted that as the twentieth anniversary of the US Digital Millennium Copyright Act approaches, some observations can be made about the safe harbor regime (The DMCA provides that internet service providers will not be liable for copyright infringement by users, if the internet service provider has, among other things, taken certain steps when it receives notice that infringing material resides on its network; adopted and implemented a policy that provides for termination in appropriate circumstances of users who are repeat infringers; and accommodated standard technical measures that are used by copyright owners to identify and protect copyrighted works). 
Those are:
  • The safe harbor regime is very widely used. More than 90,000 entities have registered with the US Copyright Office to claim the protection of the safe harbor provisions.
  • The take down provisions are very widely used. Google has reported that it has taken down more than 3 billion pages.
  • The landscape has changed. In 1998, there were 2.4 million websites, and by 2015, there were 836 million. Since 1998, we have seen the emergence of Google, Bit Torrent, and Facebook.
  • Perceptions of the DMCA have changed. Originally, it was considered that the DMCA would have a chilling effect on free speech. Recently, Google observed that the safe harbor scheme has achieved its objectives (although rights holders have suggested that it is one sided).
Dr Trimble suggested that since legislation traditionally lags behind technology, it may be time to look again at whether the DMCA is striking an appropriate balance between the rights of rights holders and of online service providers. In particular, she observed that there is little incentive for online service providers to implement policing schemes which would result in them having actual knowledge of the infringing acts. She suggested that the scheme should be revisited to create incentives for online service providers to detect infringement, while maintaining the safe harbour protection. 
Dr Trimble also observed that difficult conflict of law issues apply in relation to the issue of intermediary liability. There is scope for clarification of the operation of conflict of laws in the context of intellectual property. 
Clare's very own IP cat
Justice Nicholas observed that in Australia, cases concerning intermediaries in the context of the internet have turned on the communication right and the right of authorisation. He noted that the communication right was introduced very recently, to deal with the online environment, whereas authorisation is a concept that first emerged at the beginning of last century but which has been reinvigorated in the online context. He noted that passive hosts of online content were more likely to have authorised infringement, whereas online service providers that involved themselves in the act of making the content available online might also infringe the communication right. In relation to the right of communication, Justice Nicholas noted that:

  • In Australia, the fact that the copyright owner itself has made content available online does not defeat an allegation that an infringer has infringed the communication right; and
  • hyperlinking to content hosted on another website will not make that content available (although it might constitute authorisation) 
Justice Nicholas made the following observations about authorisation:
  • Depending on the circumstances, sanctioning, approving or countenancing acts of infringement may constitute authorisation. Indeed, inaction or indifferent may rise to the level of authorisation, if the intermediary has the power to prevent the infringement (although this will always involve a fact-specific enquiry).
  • Factors that are relevant to assessing authorisation have been codified into the Australian law (in particular, the court is required to consider whether the alleged authoriser has the power to prevent the infringement, the nature of the relationship between the alleged authoriser and the primary infringer, and whether the infringer took reasonable steps to prevent the infringement)
  • However, the court has wide latitude in determining whether authorisation has occurred, which can lead to uncertainty.
  • The mere provision of facilities will not constitute authorisation.
Justice Nicholas noted that in Australia, the safe harbour provisions are confined to carriage service providers (access providers). The Australian Government is considering whether to expand the scope of protection. 
Justice Nicholas observed that since 2015, it has been possible to obtain site blocking injunctions against access providers, where an online location which is hosted outside Australia (including a website) has the primary purpose of infringing or facilitating infringement. Since the legislation was introduced, there have been four cases. Rights holders seeking to avail themselves of these provisions may be required to pay compliance costs to the access providers.

Remy Chavannes noted that in the EU, there is an ongoing legislative process to update copyright directive to address infringing content on internet platforms, and an ongoing dialogue between the CJEU and the national courts in relation to the implementation of existing rules on intermediary liability, copyright, and intellectual property enforcement. As part of this dialogue, the CJEU has recognised that intellectual property rights are fundamental rights, but that there are other important fundamental rights. Where they collide, national legislators and the courts must achieve a fair balance. This involves considering three factors
  • the scope of exclusive rights,
  • the scope of exceptions and limitations and
  • the extent and method of enforcement.
The CJEU has rejected a proposal that infringing content should be filtered, on the basis that this solution breaches privacy, freedom of expression and freedom of enterprise. However, it has expressed the view that an order to block access to infringing services is potentially permissible, even if it is not 100% effective, provided appropriate safeguards are in place. 
Martin Hosking explained that his company, Redbubble, is a marketplace for user generated content, which makes $200 million in annual sales and hosts more than 11 million images from over 600,000 artists. Because of the nature of Redbubble’s business, it is on the leading edge of the law in relation to intermediary liability.

Mr Hosking expressed the view that Australia’s copyright law is outdated, and ill-equipped to deal with the reality of user generated content. He noted that the Australian Law Reform Commission and the Productivity Commission have both proposed the expansion of Australia’s safe harbour scheme to include more online service providers. He opined that in the absence of an expanded scheme, companies like Redbubble are exposed to expensive litigation, and that contributors and consumers are disadvantaged. 
He said that from an industry perspective, it was necessary to ensure that the laws were stable, and that an appropriate balance between the rights of industry and the rights of service providers is struck. In particular, the law should articulate clear requirements in relation to the takedown of infringing content and in relation to repeat infringers, and build in an expectation of continued infringement. He considered that such a system would be in the interests of all parties, because it would enable artists and contributors to gain distribution, provide mechanisms for easy redress for rights holders, give consumers access to user generated content, and ensure that innovative companies remained in Australia. He expressed the view that in the future, automated takedown procedures would facilitate rights enforcement."

Wednesday, 18 October 2017

BGH gifts shape mark owners sweet victories

lozenge shape mark at issue
The German Federal Court of Justice once again confirmed its reputation for being the most shape mark friendly court in Europe. In four decisions of 18 October 2017, it overturned four decisions by the Federal Patent Court invalidating shape marks. In all four cases, it was undisputed (before the BGH) that the shapes had acquired distinctiveness through use.


In the first cases, the shapes (depicted) were protected for dextrose lozenges (sold under the brand "Dextro Energy"). One shows an individual lozenge, the other a stack of them as they are being sold. The Federal Patent Court held that the shape was necessary to achieve a technical effect in the sense of §3(2)(2) Trade Mark Act (corresponding to article 4(1)(e)(ii) Trade Marks Directive (Recast), "signs that consist exclusively of the shape, or another characteristic, of goods which is necessary to obtain a technical result").


the second lozenge mark
The Bundesgerichtshof disagreed. While the square shape and the v-shaped groves have a technical effect, the bevelled edges and corners did not achieve a technical effect, but a "sensory effect when consumed" ("eine sensorische Wirkung beim Verbrauch"). This was not a technical effect in the sense of the law. Since the shape of the edges and corners were essential characteristics of the marks, the decisions of the Patent Court were overturned.


The other two cases concerned nearly identical shape marks for the packaging of chocolate bars (see image below left). The chocolate is sold under the brand "Ritter Sport". The Federal Patent Court had considered the shape of the packaging to result from the nature of the goods themselves (§ 3(2)(1) Trade Mark Act; corresponding to article 4(1)(e)(i) Trade Marks Directive).



chocolate packaging at issue
The trade mark proprietor appealed also based on the argument that the provision only applies to goods, not to their packaging, but the Federal Court of Justice did not even reach the issue: it considered that the square shape was not an essential characteristic of chocolate bars ("ist keine wesentliche Gebrauchseigenschaft von Schokolade"), annulled the lower court's decision and sent the cases back to the Federal Patent Court (presumably to assess whether there are other grounds for invalidity, namely "shape that is necessary to obtain a technical result", but the press release is not clear on this).


The above summary is based on the press releases nos. 162 and 163/2017 of the Court, the full grounds are not yet published. A detailed analysis of the reasoning is therefore not yet possible.

Standards, patents and competition law conference

The friends at Informa wish to let IPKat readers know that their annual conference on Standards, Patents and Competition law returns to London on 6 and 7 December to discuss the latest developments in law and litigation. 

In particular, the conference will tackle the changes facing standards, FRAND licensing, and the future of SEP in 5G and the Internet of Things.

Speakers include industry representatives and members of the judiciary alike.

There is a 20% discount for IPKat readers: those interested can use the VIP code FKW82763IPKE and register here.

New episode of copyright mini-series 'The Game is on!'

Keen IPKat readers will know that The IPKat was born out of a wish to support and emulate the teaching and learning of intellectual property law, including copyright law. Week in week out, its team of Kats continue in their mission through their writing and celebrate the initiatives of others who do the same. In this spirit, this post brings your attention to the mini-series of short animated films The Game is On! written and directed by Ronan Deazley and Bartolomeo Meletti, available on the Copyrightuser.org.

The aim of their game? Teaching the vagaries and intricacies of copyright law to school-aged children using animated films accompanied by ‘case files’ each dedicated to a different principle of copyright law to support teachers on this journey. The ‘Game is On!’ is *not* a 'pro' copyright propaganda campaign. Rather it aims to create a forum to discuss and challenge the rules provided by UK copyright law in an accessible manner.



Last week, ‘The Game is On!’ released the third episode of the series in which Sherlock Holmes and John Watson are interrogated on their latest investigation into the disappearance of a film star. The plot of this new episode invites the viewers to discover the application of copyright law to films, focusing on documentaries, interviews, co-authorship, and performers to only name a few.  This Kat was delighted to contribute to the case files.

The ‘Game is on!’ will be useful to school teachers but also (and not least!) to all readers whose relatives and family members of all ages remain slightly puzzled by your passion for copyright. This series of animated films offers a playful and stimulating introduction to the discipline – and comes highly recommended for it! 

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':