For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Wednesday, 23 July 2014

Wednesday whimsies

Around the weblogs.  Over on the increasingly busy SOLO IP blog, IPKat team member contrasts the fortunes of IP practitioners in small practices with those of medical practitioners: which has had the better deal over the past few decades?  Having survived a brief flurry of comments as to the distinction between liqueur and liquor, Class 46's Laetitia introduces us to the HEATSTRIP dispute, in which a naughty agent who tries to register his principal's trade mark, having lost before the OHIM Board of Appeal, gets a second helping of comeuppance from the General Court. On IP Finance, Rob Harrison marks the launch of the Australian Global Innovation Index: phrases like "packed with metrics", "best practice" and "degree of scepticism" give a hint of what you might just find there. "Taylor Swift is incredible" is the title of a guest piece written by Richard Tomasi and hand-crafted by our own Eleonora. Never heard of Taylor Swift (pictured, above left, with the IPKat)? Then take a look.

Come to the BioHub. This Kat has never been to a BioHub; indeed, until last night be had never even seen the word. However, he has discovered a good way of getting into one. There's an IP seminar & networking event coming up on 30 September 2014 at the BioHub at Alderley Park, Cheshire. It's masterminded by Appleyard Lees and this Kat has a feeling that former guest Kat Robert Cumming has had something to do with it. The star attraction is Judge Richard Hacon, who was appointed as specialist circuit judge of the Intellectual Property Enterprise Court (IPEC) for England and Wales when most of us were sharpening our teeth knives in anticipation of the seasonal turkey in December 2013. There will be some war stories and law stories, plus all the usual delicacies.  This event is free to all comers and will take place in the conference centre by Robert's office at the BioHub at Alderley Park. The fun starts at 4.30 pm with the quaint tradition of registration and carries on till the bar runs dry networking is brought to a seemly conclusion. To attend, email Sara Baines at to register your interest.  Space is limited so do book early. The Appleyards and Lees apologise to anyone who will miss out on the event due to the patent examinations, explaining that Judge Hacon "has limited availability to speak in the North". 

Now here's a brand
name that summarises
this Kat's sentiment ...
This Kat, born and bred a Londoner, has just been reminded by Richard Pringle (Head of Validation Services, Valideus Ltd) that the priority period for .LONDON domains -- which gives priority to categories of potential registrants including owners of UK registered and unregistered trade marks -- closes on 31 July. Beyond that date, as Richard delicately puts it, "it will be a straight case of first-come, first-served".  The .LONDON registry website is here and its priority rules are here. He adds:
"Our view of the situation is that with over 50,000 applications expected for .LONDON domain names in the pre-launch period alone, the domain will quickly reach critical mass and be a familiar sight online and potentially a valuable domain suffix for brands. Furthermore, with this volume of applications there will be many that are for trade marks in the offline world. These will include registrations of descriptive dictionary words, trade marks in different sectors, trade marks used by brand interest groups, fan sites and gripe sites; as well as some trade marks registered for cybersquatting". 
While his memory is good enough to recall the days when the choice of top-level domain was really quite important, it's not good enough to recall the last time he actually typed a whole domain name into his browser, or even paid attention to the top-level domain: his habits are determined by long familiarity with the advantages of search engines and his skill, whether intuitive or intellectual, in identifying the fastest way to find his target sites [very good, says Merpel, but you still can't find your way round the OHIM and EPO websites ...]. Are .LONDON and its equivalents really important any more? Or has the time of the prestigious or catchy domain name come and gone? Do tell us what you think.

BREAKING: Report on responses to Public Consultation on EU copyright now available

One of the many messages that reached
the Commission during the time
of the Consultation
As this blog reported a few days ago, there were rumours that, whilst publication of the White Paper on EU copyright had been indefinitely delayed at least until September [with the current Commission's term of office running until 31 October 2014], before the summer break there would have been the publication of a report on the 9,500 responses [and a total of over 11,000 messages, including questions and comments] that the 3-month Public Consultation on the Review of EU Copyright Rules [here and here] attracted.

This is indeed what has just happened. Shortly before 5 pm GMT, the Directorate General (DG) for Internal Market and Services of the European Commission released its much-awaited Report.

This Kat has just started reading it (it is quite long as a document), and decided to run a mini-Katseries on its main points. 

Let's start now with some data about responses and respondents, and the responses to the questions on cross-border access to content and more rights involved in a single act of exploitation. Further posts will follow tomorrow.

Be careful what you wish for ...
Why so many responses and messages?

The DG seemed to confirm that the main reason why the Public Consultation attracted so many responses was not really because Europe has been suddenly invaded by an army of copyright enthusiasts, but rather because popular stakeholder-driven initiatives such as Fix Copyright!, Creators for Europe and really boosted participation. 

As a term of comparison, just think [and read: page 9 of the leaked Impact Assessment, on which see here] that the 2008 Green Paper on Copyright in the Knowledge Economy only attracted something like 350 responses and the 2009 Consultation on Creative Content Online received a bit more than 200 replies. 

Those numbers are really depressing if compared to the most recent Public Consultation.

Who took part in it?

When responding to the Public Consultation, one was required to indicate which general group he/she belonged to among: end user/consumer; institutional user; author/performer or their representative; publisher/producer/broadcaster or their representative; intermediary/distributor/other service provider or their representative; collective management organisation; public authority; Member State; other.

Why just 11 Member States?
Well, the majority of respondents (58.7%) were end users/consumers, followed by authors/performers (24.7%). 

Regrettably in this Kat's opinion, only 11 Member States (Denmark, Estonia, France, Germany, Ireland, Italy, Latvia, the Netherlands, Poland, Slovakia, and the United Kingdom) took part in the Public Consultation. Merpel would thus like to launch the campaign #SendCopyrightFolks2Governments.  

And now, for the responses - Part I

1. Cross-border access to online content

Unsurprisingly, the vast majority of end user/consumer respondents reported facing problems when trying to access online services in another EU country. They stated that they are regularly confronted with access restrictions depending on the geographic location of their IP address. Besides the already notorious MasterChef Italia drama, this is happening to this Kat right now having purchased Girls on Amazon Instant Video while in the UK, and being unable to stream it in Italy because unavailable in this Member State.

For some services, consumers/end users reported being redirected to a national website when trying to access the same service in a website with a different geographical location. 

So? "In general, end users/consumers would like to be able to access all content from any online stores whether directed to the Member State in which they reside or not. At the minimum, many consumers say, there should be transparency as to the possibilities of accessing content cross-border and on territorial restrictions. They consider the blocking of content to be mostly arbitrary and unpredictable." 

Institutional users like libraries lamented that it is very difficult to negotiate licences and manage subscriptions for multiple Member States.

Interestingly, authors/performers and publishers/producers/broadcasters generally considered that the deficit of cross-border accessibility of content does not result from the fact that copyright is territorial or from problems in licensing, since multi-territorial licences are available. In other words, it is not really a copyright problem. Well, says Merpel, then it may be a problem of ... competition? She adds: don't forget the ongoing investigation into Pay TV services.

2. The rights relevant for digital transmissions: the ‘making available’ and the ‘reproduction’ rights

Unsurprisingly, not many end users/consumers expressed a view on the scope of exclusive rights that apply to digital transmissions. Of those who did, a large majority found the scope of the making available right unclear.

Typical expression to the question
"Would you please explain what
the making available right is about?"
As to the possible solutions, views were divided. Certain individual consumers and organisations representing them expressed a preference for the country of origin approach, claiming that targeting [which the CJEU appeared to reject in respect of jurisdiction in Pinckney and Hi Hotel] seems more complex and difficult to apply in the online world. 

Others considered that the country-of-origin approach would require a much higher level of harmonisation of copyright law at EU level than at present and therefore saw the targeting approach as more suitable for now. 

Authors and performers were in principle opposed to the country of origin approach as a solution for clarifying the territorial scope of the making available rights and indicated potential problems with forum shopping.

Most of the end users/consumers said that the practice of licensing the reproduction right and the making available right separately is not fit for purpose in the digital environment.

Record and film producers, and  music and book publishers, generally took the view that the scope of the making available right is sufficiently clear and stated that applying multiple rights to a single act of economic exploitation in the online environment does not create problems. However, broadcasters’ views were divided on this very issue. Some (like commercial broadcasters) did not see a problem with the scope of the making available right, while many public service broadcasters stated that a clarification of the scope of the making available right is needed to improve legal certainty. 

On the application of the two rights a large proportion of broadcasters indicated that if the reproduction is only ancillary to the given form of exploitation, it should be assumed that the licence for the main copyright act also covers such ancillary reproductions. Others indicated that in such a situation both rights should be licensed together.

While collective management organisations stated that no licensing problems have arisen from the fact that both the reproduction and the making available rights have to be licensed for the digital exploitation, intermediaries/service providers said that the application of two rights to a single act of exploitation increases transaction costs, as they have to contract with multiple licensors and make multiple payments

Some Member States pointed to some lack of clarity with regard to the scope of the making available right and the boundaries between the rights of making available and reproduction (emerged also the level of national case law), but overall they did not consider this a top priority area for the EU.


Stay tuned for consideration of the other issues, starting with linking and browsing in the next post of this series.

Distasteful -- or worse? Trade mark registration, morality and public sentiment

The IPKat received earlier today an email from Alan Clarke (Clarke IP Ltd), who writes:

"You may be interested to hear of this extremely distasteful (alleged - I've not checked any facts) attempt to register trade marks for the flight numbers of the two downed Malaysian Airlines jets - the recent Ukrainian incident, and the mysterious disappearance of flight MH.370. The quote below comes from the Guardian. The alleged registrant is wasting its money if it wishes to obtain money in this way, but it can't but cause more distress to a group of people already enduring enormous suffering".
The item on the Guardian website reads as follows:
"My colleague Kate Hodal @katehodal, who is in Kuala Lumpur, has come across a macabre twist to the MH17 and MH370 disasters: A company called Seyefull Investments in Belize has filed to trademark the terms "MH17" and "MH370" so it will get paid every time either term is used in print, radio, TV or online media. She emails:
The Coconuts website reports: The company's application to register "MH17" as one of its trademarks, in fact, was filed on July 17, aka the exact same day Malaysia Airlines Flight MH17 was shot down over eastern Ukraine, killing all 298 people on board.

The application for "MH370" was made on May 2, after a more "respectful" period of time had passed since Malaysia Airlines Flight MH370 disappeared en route from Kuala Lumpur to Beijing.

The online portal continues: While the process of registering the flight numbers of crashed aircraft might be completely legit, and Seyefull Investments Ltd might actually succeed in their attempt to make money off any mention of "MH17" and "MH370", it still remains a fact that this is an ugly, opportunistic attempt at cashing in on the suffering and pain of thousands of grieving family members and millions of people worldwide - not to mention the ended lives of the hundreds of people on board both doomed jetliners."
Apart from the obviously distasteful nature of the possible use of the reported applications as trade marks, says the IPKat, there's a question as to whether a trade mark attorney, asked by a client to register such a mark, should simply execute the client's instructions on the basis that, if he or she didn't, someone else would -- or should something be said along the lines of "don't you think that what you're doing is really likely to upset people?" Or should the instruction simply be rejected  on the basis of "we're not the sort of firm that does things like this".  Merpel adds, there may be a time when such marks can be registered -- but won't that be when they are no longer likely to be associated by victims of a disaster or tragedy with the event in question, or where there is a prevalent secondary meaning? Words like TITANIC must have been very painful for many people to bear at one time but, 102 years after the event, no objection now remains to that word's registration as a trade mark and use as a film title. When does bad taste fade?

Article 3(1)(f) of Trade Mark Directive 2008/95 provides that
"(f) trade marks which are contrary to public policy or to accepted principles of morality"
shall not be registered, and 15 U.S.C. para 1052(a) of the Lanham Act in the USA provides that registration shall be refused to a mark which
"Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute; ..."
How would the wording of these provisions be applied to these applications?

What do readers think?

Italian court says that Wikipedia cannot be responsible for third party content

Earlier this month the Tribunale di Roma (Rome District Court) had some say on the
liability of hosting providers for third party content. 

It was not an IP case, but rather a slander/defamation one, and concerned the Italian version of the Wikipedia pages dedicated to Italian entrepreneur and politician Antonio Angelucci [the page is still inaccessible on grounds of an earlier interim injunction] and the newspaper known as Il Riformista

Mr Angelucci and his son Giampaolo sued Wikimedia over allegedly defamatory information regarding themselves and published on Wikipedia, each seeking damages for EUR 10m [Merpel could not help but notice that the counsel for the Angeluccis was a certain Antonio Conte. She concluded that he must have been that Conte].

Wikimedia objected that: (1) the information regarding the Angeluccis was either true or did not harm their honour and reputation; and (2) it does not have any editorial control over the content produced by third parties and published on Wikipedia. In other words, Wikipedia is a hosting - not content - provider. 

Ready to contribute but, alas,
no internet connection
The latter is because "Wikipedia is an online open-content collaborative encyclopedia; that is, a voluntary association of individuals and groups working to develop a common resource of human knowledge. The structure of the project allows anyone with an Internet connection to alter its content.

Hence, "Wikipedia cannot guarantee the validity of the information found [t]here", and "None of the contributors, sponsors, administrators or anyone else connected with Wikipedia in any way whatsoever can be responsible for the appearance of any inaccurate or libelous information or for your use of the information contained in or linked from [its] web pages." 

This also means that users "are being granted a limited license to copy anything from [its] site; it does not create or imply any contractual or extracontractual liability on the part of Wikipedia or any of its agents, members, organizers or other users." 

Speaking of hosts,
no one can be more gracious than Gustavo
The Tribunale rejected the plaintiffs' claim, and held that in running the Wikipedia project Wikimedia merely "hosts on its servers information provided by its users" [cf the recent criticism of the Tribunale di Torino, which suggested that this definition of hosting may have become obsolete]

Furthermore, "there is no contractual relationship between the authors of the information and the hosting provider", and actually the Wikipedia project is all about encouraging third party contributions. Hence, Wikimedia cannot be considered responsible for the information hosted on its platform.

According to the Tribunale Wikimedia is not subject to the provisions of Legislative Decree 70/2003 by which Italy transposed the Ecommerce Directive into its own legal system, in that it is established outside the territory of the EU. Nonetheless the regime envisaged by that piece of legislation may be taken into consideration for guidance, in particular in the part in which it provides that a hosting provider may only be responsible for third parties' infringements when it has actual knowledge of the presence of illegal content or, upon obtaining such knowledge or awareness does not act expeditiously to remove or disable access to the content. 

Neither was the case of Wikimedia, concluded the Court.

Tuesday, 22 July 2014

U.S. Representatives Hear about Droit de Suite and Droit Moral

This portfolio should be enough
to put you through college, my son
The U.S. House of Representatives Subcommittee on Courts, Intellectual Property and the Internet, held a Hearing on July 15 on “Moral Rights, Termination Rights, Resale Royalty, and Copyright Term.” I jumped at the opportunity to write about it, as the hearing gave me a chance to pepper my post with famous French copyright expressions such as droit de suite, joie de vivre, and droit moral.

Resale Royalty, or droit de suite for us béret-wearing IP attorneys, is the right for artists to profit financially from the subsequent resale of their work and thus being able to benefit from the increased value of their own reputation as artists. When France first adopted such a right in 1920, legislators were shown during the debate a drawing of a child in rags pointing at a painting that sold for a hefty sum at an auction and wailing “It’s one of Papa’s paintings!”

Indeed, there is an inherent unfairness in the first sale doctrine for visual artists, as they produce works of art which may not be mass-reproduced without losing their fine art status, and thus must make a living by selling their original art. In the U.S., only California has a droit de suite, the California Resale Royalties Act in 1976, which provides visual artists a royalty of 5% of the sale proceeds if the seller resides in California or if the sale takes place in California. The law, however, has recently been declared unconstitutional by a District Court under the dormant Commerce Clause, which prevents U.S. states from unduly burdening interstate commerce. The case is on appeal.

There is no federal droit de suite. The Copyright Office had published a report on the issue in 1992 and at the time did not recommend adopting such right. It noted, however, that Congress should take another look at it if the European Community (now the European Union) would extend this right to all its Member States. It did so in 2001 when adopting Directive 2001/84/EC on the resale right for the benefit of the author of an original work of art. The Copyright office published in December 2013 an adjunct report on resale royalties for visual artists and concluded that U.S. visual artists may indeed be disadvantaged if lack of an U.S. droit de suite prevents them from gaining financially from subsequent sales of their works as they increase in value. It thus supported Congress’consideration on adopting such a right in the U.S.

 Article 14ter of the Berne Convention provides for a droit de suite, and the U.S. joined the Convention in 1989, but implementing article 14ter is only optional. However, article 14ter is reciprocal, and since the U.S. does not have a resale royalty, U.S. artists are not able to take advantage of the droit de suite if their work is sold in countries having such a right. As more than seventy countries have adopted such resale royalties rights, such as the U.K. or France, and as Canada and China are also considering adopting it, the issue of non-reciprocity is likely to become even more salient for U.S. visual artists.

 This is why Representative Jerry Nadler (D-NY) introduced in February 2014 a bill, H.R. 4103, the American Royalties Too Act of 2014 (ART), which would provide artists a resale royalty if their work of visual art is sold at an auction for no less than $5,000. This relatively low threshold follows the recommendation of the 2013 Copyright Office report, so as not to benefit only the most famous artists. The royalty would be the lesser amount of 5% of the sale or $35,000. Visual artists’ collecting societies would be in charge of distributing the royalties to the artists. Failure to pay the royalty would be considered copyright infringement and plaintiff could seek statutory damages. 

U.S. auction houses are lobbying hard against ART, arguing that it would hurt the art market, but artists are in favor of it. Rep. Nadler noted in his introductory speech to the Hearing that the national arts advocacy organization Americans for the Arts supports this legislation, as well as the Visual Artists’ Rights Coalition, which includes the Artists Rights Society, the Visual Artists and Galleries Association, the American Society of Illustrators Partnership, the National Cartoonists Society, the Association of American Editorial Cartoonists, and the Association of Medical Illustrators.

No doubt, in order to continue to force their witnesses to speak French, the Subcommittee Hearing also discussed droit moral, which protects the non-economic rights of the artist, such as the right of integrity of the work or right to attribution. U.S. copyright law provides for limited moral rights under the federal Visual Artists Rights Act of 1990 (VARA), which provides authors of works of visual arts a right to attribution and integrity. Only single copies of drawings, print or sculpture, or limited editions of 200 copies or fewer signed and numbered by the author, are protected by VARA. Representative John Conyers Jr. (D-MI) noted during his introductory speech that courts have struggled to interpret VARA. Rep. Conyers also noted that droit moral can be awarded by contract. However, I would say that only artists with quite a bit of clout and an IP attorney on retainer (Yeah!) would be in the position of negotiating such rights.

Congress also heard Rick Carnes, a songwriter and the President of the Songwriters Guild of America, testifying in favor of granting moral rights to music creators. For Mr. Carnes, “[a]n essential element of moral rights… is the ability to have a remedy when we are wronged” (p.5). Mr. Carnes also testified in favor of establishing small claims copyright courts so that songwriters could enforce their copyright more easily and at a lower cost, a concept supported by the Copyright Office. Mr. Carnes testified that, for songwriters, “each song we write is our baby” and so the moral right of attribution is particularly important.

This view was shared by Professor Michael W. Caroll, the Public Lead for Creative Commons USA, who testified that the various Creative Commons licenses, while allowing royalty-free sharing and reuse of work at no cost, also require attribution in exchange for the use of the work. Professor Caroll noted that receiving attribution is “in some cases… more important to the creator than any interest in profit or compensation” (p.4).

Unlike the ART bill, there is no bill introduced in Congress to award more comprehensive moral rights to all artists. However, Congress seems to be concerned about protecting every artist, not only the more famous ones, and so may introduce in a few years a bill to provide moral rights, at least the right to attribution, to every work of art protected by copyright. But that is only a guess.

AG Villalón's parthenotes Opinion in IMC could provide stem cell research certainty (at least for now...)

Now only if  we could clone Kats....
Following from the IPKat's alert last week of the Advocate General's Opinion in the reference from Henry Carr QC (sitting as Deputy Judge of the High Court) [not Mr Justice Arnold, as previously indicated] in International Stem Cell Corporation v Comptroller General of Patents, Shohta Ueno, Associate with Allen & Overy's IP Litigation team in London, helpfully summarizes the key points of the AG's Opinion and predicts whether the CJEU will follow suit:
On 17 July 2014, Advocate General Cruz Villalón delivered his Opinion in Case C-364/13 International Stem Cell Corporation v Comptroller General of Patents, recommending that the CJEU allow patenting of “unfertilised human ova whose division and further development have been stimulated by parthenogenesis”.  This would be achieved by excluding such cells from the term ‘human embryos’ in Article 6(2)(c) of Directive 98/44 (Biotechnology Directive) “as long as they are not capable of developing into a human being and have not been genetically manipulated to acquire such a capacity".

To refresh readers’ memories, the case was referred to the CJEU by Henry Carr QC on appeal from a decision of the examiner that International Stem Cell Corporation’s (ISC) applications were contrary to Article 6(2)(c) of the Biotechnology Directive. The question referred to the CJEU was:

“Are unfertilised human ova whose division and further development have been stimulated by parthenogenesis, and which, in contrast to fertilised ova, contain only pluripotent cells and are incapable of developing into human beings, included in the term “human embryos” in Article 6(2)(c) of Directive 98/44 on the Legal Protection of Biotechnological Inventions?”  
In seeking to persuade the CJEU of his answer to this question, AG Villalón starts by explaining that the question is identical to Brüstle, but with one critical difference – the cells in question are activated by parthenogenesis and therefore are incapable of developing into human beings.


No explanation needed...
By way of background, parthenogenesis is a method by which unfertilised ova are artificially induced into cell division by chemical and electrical techniques (cells derived in this way are referred as "parthenotes").  However, due to absence of fertilisation, parthenotes lack paternal DNA which means human parthenotes can never develop into human beings. This stems from the fact that expression of certain maternal and paternal genes are essential to drive development forward at the very early stages post fertilisation, a concept known as "genomic imprinting". As AG Villalón explains under current scientific understanding parthenotes would not be categorised as totipotent cells, and would, at best, be "pluripotent" cells.

Pluripotent v totipotent

So what does this distinction amount to?  First, totipotent cells (“toti” means “entire or whole” in Latin) are those which are capable of developing into an entire organism. A good example of this would be a fertilised ovum.   On the other hand, pluripotent cells (“pluri” means “several or many” in Latin) can turn into most cell types but crucially, if left on their own, lack the ability to develop into an entire organism.

The distinction is a very important one as whilst the preamble of the Biotechnology Directive states that human totipotent cells should be excluded from patentability, AG Bot and the CJEU in Brüstle did not have any issue with patentability of pluripotent cells (leaving aside the issue of whether such pluripotent stem cells originated from a human embryo).   On the contrary, in his Opinion AG Bot, stated that “pluripotent cell in isolation cannot therefore be regarded as constituting an embryo itself”.   Based on this, the heart of the ISC case was whether parthenotes should be categorised as ‘totipotent’ or ‘pluripotent’ and thus whether they should be patentable.

The decision in Brüstle

Oliver Brüstle
Readers will recall that, in Brüstle, the CJEU held that parthenotes are human embryos capable of developing into a human being and, therefore, are excluded from patentability. In his analysis, AG Villalón disagrees with AG Bot’s characterisation that parthenotes and non-fertilised ova subjected to somatic-cell nuclear transfer are the same and both capable of developing into a human being (this characterisation was followed by the CJEU). AG Villalón argues that the CJEU at the time of judgment did not have the correct scientific understanding of parthenotes. He states that the key criterion for parthenotes being categorised as human embryos (and hence excluded from patentability) is whether they are inherently capable of developing into a human being.  AG Villalón sets out as follows:

“According to my reading of the Court’s argument, the decisive criterion that should be taken into account for determining whether an unfertilised ovum is a human embryo hence is whether that unfertilised ovum has the inherent capacity of developing into a human being, i.e. whether it really constitutes the functional equivalent of a fertilised ovum.”  
Thus, AG Villalón’s Opinion seems to get around the Brüstle decision by carving out parthenotes from being categorised as ‘human embryos’ under Article 6(2)(c) of the Biotechnology Directive.

What is meant by “As long as they are not capable of developing into a human being and have not been genetically manipulated to acquire such capacity”

AG Villalón argues there is a possibility that one day it might be possible for scientists to genetically manipulate a human parthenote so that it acquires the ability to develop into a human being. He notes in particular that the technology has already been successfully tried in mice, and that, if parthenotes acquire such ability, they would no longer be patentable as they would fall within the term ‘human embryos’ under Article 6(2)(c) of the Biotechnology Directive.  
If the CJEU follows AG Villalón’s Opinion and adopts the same language in their decision, patentees would therefore need to come up with a specific carve out language when drafting their patents to ensure that they do not fall foul of this decision.

Ordre public and morality

While AG Villalón addresses the issue of morality at paras 32-49 of his Opinion by stating that Article 6(1) and (2) of the Biotechnology Directive should be considered side by side, he does not go further to address the more fundamental question of whether stem cell research generally is contrary to ordre public and morality. This also was not expressly considered in the Brüstle decision. There is, therefore, is a stark lack of discussion on these principles and their intersection with the field of stem cell research, although perhaps they remain too controversial for a clear conclusion to be achieved. 

Significance of the Opinion

There is of course no guarantee that the CJEU will follow the approach set out in AG Villalón’s Opinion, but it is hoped that they will do so as it is a sensible analysis based on the existing case law.  In particular, because AG Villalón’s Opinion follows the same reasoning as Brüstle, it should not be too difficult for the CJEU to distinguish this case from their Brüstle decision.

Should the CJEU follow AG Villalón’s decision, it is expected, as in Brüstle, that the EPO will quickly declare that their practice will follow the CJEU’s decision.

The practical impact of such a decision and statement from the EPO, could lead to an increase in patent filings and investment in this area as the decision will have provided a degree of certainty that was absent following Brüstle.  However, any certainty obtained could be defeated once technology advances further (as predicted by AG Villalón).  Such an approach will inevitably lead to additional references in the future.  However, in the meantime, patentees may wish to exercise caution, when referring to ‘human embryos’ in their patent drafting given the degree of confusion by the CJEU as to what this term refers to.

Tuesday tiddlywinks

This Kat has recently heard from his friends at Coller IP that they've been busily preparing a report, "3D Bioprinting of human transpant organs – A patent landscape", that might be of major interest to many readers of this weblog. It's the fruit of a work experience project undertaken by Mohsan Alvi and Matthew Duckett, under the supervision of Robert Gleave, and you can read it here. It's 42 pages in total and offers a useful collection of thoughts, facts and references.

"Global Innovation Index 2014: Switzerland, UK and Sweden lead Rankings with Encouraging Signs from Sub-Saharan Africa" is the excited message from the World Intellectual Property Organization (WIPO) in its press release here. You can check out your favourite countries in this list and see how they fare. The full rankings feature 143 jurisdictions and there are quite a few surprises. No doubt the fact that the UK comes second in the list is something to do with the fact that its recent ratings in the Eurovision Song Contest have nothing to do with innovation and are therefore excluded.

Merpel is most miffed at not being shortlisted as a potential judge and will not therefore cast her reassuring shadow over the proceedings when the Unified Patent Court opens its doors to hear your cases.  Those of you who would like to know more about the shortlist of judges for the Unified Patent Court may like to take a look at this piece which  (Eubelius) wrote for the Kluwer Patent Blog.  Says Peter:

Want to be a UPC judge? Better
get yourself a degree ...
"It came for a lot of people as a surprise that more than 354 candidates were found with potential to become a legally qualified judge. However, it should be taken into account that the UPC Agreement clearly states that legally qualified judges have to possess the “qualifications required for appointment to judicial offices in a Contracting Member State”. A literal reading of this requirement implies that to become a judge in the UPC, it is sufficient to have the qualifications in a Contracting Member State to become a judge. It is not required to actually be or have been a judge in one of the member states. Article 15 of the UPC Agreement further specifies that judges should ensure the highest standards of competence and have proven experience in the field of patent litigation. Therefore, lawyers that have a proven experience in patent litigation and possess the qualifications required for appointment to judicial offices in a Contracting Member State, could be a candidate and can appear on the shortlist. 

A technically qualified judge needs a university degree, a proven expertise in a field of technology and a proven knowledge of civil law and procedure relevant in patent litigation. It is to be expected that a lot of patent attorneys applied for technically qualified judge.
When will the UPC open its doors?  What was predicted to be the beginning of 2015 has now slipped back to the end of that year. Might it be that even this prediction is somewhat optimistic? 

Despite his long-standing and deeply-felt dislike of the manner in which the UK Intellectual Property Office continues to trivialise innovation in the eyes of innocent children by fusing it in their minds with the antics of Wallace & Gromit, this Kat is keeping his promise to his friends in that otherwise sane and sensible institution to make mention of Cracking Ideas (an "educational resource for 4-16 year olds encouraging innovation, enterprise, creativity and knowledge of intellectual property rights"). You can check it out here. There's also a Facebook page here and a five-minute YouTube clip on Cracking Ideas 2014, here.

Around the weblogs.  There was plenty being posted on the IP blogosphere over the past few days.  IPKat blogmeister Jeremy, writing on the SOLO IP blog, is in mischievous mood when invited by LinkedIn to picture himself working for Freshfields. On Art & Artifice Rachel Buker mulls over the difference between flexibility and inconsistency when it comes to applying fair use principles in artistic copyright cases. The SPC Blog carries a hot-off-the-press piece from victorious law firm Powell Gilbert following judgment in Eli Lilly v Human Genome Science.  For IP Finance, Mike Mireles writes on the tribulations of YUM brands in China while, still in Asia, Althaf Marsoof on the jiplp weblog explains how a court in Sri Lanka chose to balance the interests of tobacco brand owners and public health. Finally, on Excess Copyright, Canadian blogger and Katfriend Howard Knopf catches a Red Bus to take him on a journey to the same issues as Rachel Buker, above.

Monday, 21 July 2014

Precedent III - is it res judicata?

This is the third and, the IPKat expects, final post in this reflective series considering the role of “precedent” at the European Patent Office (EPO).  The previous two posts (here and here) have attracted considerable comment, much of which is worthwhile reading. There is however always more to say and an aspect that has not so far been covered, although it has arisen in some of the comments, is the issue of res judicata and how it differs from precedent.  Since the aim of this series of posts has been to try to step outside of the framework of any individual system of jurisprudence and to try to look at the effect in practice of these concepts, the IPKat will try to explain the difference in practical terms, and again try to draw some parallels with national practice.

Precedent, as discussed in the previous two posts, is concerned with statements of the law. The Rules of Procedure of the Boards of Appeal refer in Article 21 to “an interpretation or explanation of the Convention”; in UK precedent, the emphasis is on the legal reasoning that is used to reach a particular decision and the exposition of law and legal tests applied along the way.  The consideration of precedent is the degree to which a subsequent tribunal should use the same statements of the law, and the same legal tests in a similar manner, as used in previous cases.  The important thing is that it does not refer to the outcome of the case, such as whether the patent is valid and whether it is infringed by a particular product.

Res judicata is about the outcome of a case, and refers to the principle that, once a matter has been decided as between two parties in a decision that is final (ie not open to further appeal), neither party can re-litigate the same matter again.  This is not telling the Court how to decide a case; rather it is telling a party that it may not even raise the issue or seek to have it decided in a different manner.

The confusion between the two arises because in both cases one can use the term “binding”.  In “binding precedent” a subsequent tribunal must follow an earlier statement of the law; when discussing res judicata one can say that the earlier decision is binding on the parties.

On reflection, it was perhaps misleading of the IPKat to refer to Article 112(3) EPC ("The decision of the Enlarged Board of Appeal referred to in paragraph 1(a) shall be binding on the Board of Appeal in respect of the appeal in question") and Article 111(2) EPC ("If the Board of Appeal remits the case for further prosecution to the department whose decision was appealed, that department shall be bound by the ratio decidendi of the Board of Appeal, in so far as the facts are the same") in the context of precedent in the original post, because really they refer to res judicata – the aspects of the case that have been decided by the (Enlarged) Board of Appeal are not open to challenge in the remitted proceedings.  Thus if the Board of Appeal has decided that a claim set is novel, then in principle during the remitted case the novelty of those claims is not further open to question.

Res judicata is a relatively simple concept in principle, but its application in practice is actually rather complex, because its extent and applicability of the doctrine are frequently questioned.  The recent UK Supreme Court case Virgin Atlantic Airway Ltd v Zodiac Seats UK Ltd [2013] UKSC 46 (see IPKat here) concerned whether a finding of validity of a patent as between two parties was res judicata even if the patent was subsequently revoked.  Overturning previous precedent, the Supreme Court decided that it was not.

What is particularly interesting from the point of view of the place of EPO decisions within European jurisprudence is that it is generally acknowledged that EPO decisions do not create any res judicata.  Thus a person who unsuccessfully opposes a European patent at the EPO is quite free to challenge the patent again nationally, for example as a defence to an infringement action.  For example, Grégoire Triet and Jean-Hyacinthe de Mitry of Gide Loyrette Nouel kindly drew the IPKat’s attention to a highly apposite decision, remarking as follows:
"We would like to draw your attention on the attached judgment handed down by the Court of appeal of Paris in 2005 [you can access it here or download it here].

The background was rather classic. A patent owner brought an infringement case against an alleged infringer before French courts. In parallel, the infringer opposed the delivery of the patent before the EPO. The opposition was eventually dismissed and the infringement proceedings resumed in France.

Before the Court of Appeal, the patent owner argued that the EPO decision had res judicata over the Court and, consequently, that the defendant could not dispute the validity of the patent any more. The defendant disagreed and argued that EPO decision could not have res judicata over a French court.

The defendant invoked various grounds, the main ground being that an EPO decision originates from an administrative authority in charge of granting patents and not a court of justice handing down binding judgments. This was the ground adopted in first instance.

The Court of Appeal ruled in favour of the defendant and affirmed the first instance judgment. Although the reasoning of the Court is slightly different, for it found that (i) the preparatory works of the Munich Convention show that there was an intent to avoid that national courts be bound by EPO decisions, (ii) no section of the Munich convention provided that EPO decision had res judicata over national courts, and (iii) based on Section 22 of EU Regulation 44/2001, a national court has sole jurisdiction to revoke the national part of an European patent.

Unfortunately (for the sake of law of course), this case was not heard by the Supreme Court".
The same conclusion was reached in respect of England and Wales in Buehler AG v Chronos Richardson Limited (Merpel loves this decision because it cites the maxims "nemo debet bis vexari pro una et eadem causa" and "interest rei publicae ut finis sit litium" - there is nothing like a bit of judicial Latin).  According to that decision, the same approach is taken in Germany, according to the decision of the Bundesgerichtshof in Zahnkranzfraser (Case No X ZR 29/93).

This gives rise to a situation that this Kat finds counter-intuitive, namely that a UK Court, for example, will give deference to the exposition of law in an EPO Board of Appeal case, but will then quite happily come to a different conclusion concerning, for example, novelty or inventive step.  This can even in principle be on the basis of the same prior art, since a UK Court will generally take the view that differences in expert evidence , for example, may justify a different outcome.  For example, as was stated in Generics (UK) Limited and others v H Lundbeck A/S [2009] UKHL 12:
“National courts may reach different conclusions as to the evaluation of the evidence in the light of the relevant principles, but the principles themselves should be the same, stemming as they do from the EPC.”
Even here, however, we see signs that UK courts are trying to be more consistent with the EPO, and in the HGS v Lilly litigation, reading the decision of the Supreme Court in Human Genome Sciences Inc. v Eli Lilly and Company [2011] UKSC 51 (see IPKat here) it is possible discern in the judgment a desire to not only apply the jurisprudence of the EPO Boards of Appeal, but also to reach the same conclusion (of sufficiency of the claims) on the specific facts of the individual case.

If the EPO revokes a patent then that is the end of the matter and there is no patent for a national court to exercise any jurisdiction over.  If the EPO maintains a patent in opposition, then, as stated above, anyone, including the unsuccessful opponent, can generally still challenge the validity of the patent in national proceedings.  The degree to which a national court will defer to the EPO finding varies from country to country.  Perhaps readers would care to comment with respect to their own jurisdiction how easy it is in practice to successfully challenge the validity of a patent already found valid by the EPO, such as whether it is generally necessary to use different prior art.

Ten million! Thanks so much ...

This morning the IPKat weblog's Google page-view counter (which readers may have noticed in the sidebar on the left-hand side of the IPKat's home page) reached the magical, if admittedly arbitrary, figure of 10,000,000.  The Kat, together with Merpel, just wanted to take this opportunity to say another big "thank-you" to their readers from all around the world who have kept on visiting their blog and whose comments, criticisms and witticisms have both educated them and enriched their understanding of IP and how it works.

Thanks are also due to the many regular and guest Kats past and present, plus our occasional guest contributors, for keeping a regular flow of at least passably interesting blogposts -- and, as ever, our especial gratitude goes to the legislators, lawyers, litigants and judges whose combined efforts, for good or ill, have provided such fertile material for us to discuss.

Thank you all!

Tama the ten million dollar cat here
Tommaso the ten million euro cat here
Ten million wildcats here

Italian court says that YouTube’s Content ID should be used to block allegedly infringing contents

A couple of months ago this blog reported that the Tribunale di Torino (Turin District Court) had rejected an application for an interim injunction brought by Delta TV in the context of proceedings between this and Google and YouTube. 

As readers might recall, Delta TV produces and markets TV programs, and holds the economic rights to a number of South American soap operas for a number of territories (including Italy), where it licences the relevant rights to third parties. 

Delta TV became aware that a number of episodes of such soap operas dubbed in Italian had been unlawfully uploaded on YouTube. It also became aware that, by inserting their titles on Google Search, the first results displayed links to such YouTube videos. 

Delta TV sued [the case is still pending] Google and YouTube for secondary copyright infringement, seeking damages for over EUR 13m. It also sought an interim injunction to have the videos removed from YouTube.

Antonio is confused:
how on earth could one prefer URLs
to titles such as
Sortilegio ("spell") or
La forza del desiderio ("the strength of desire")?
YouTube and Google opposed the application, claiming that, as soon as they became aware of such allegedly infringing contents, they removed them from YouTube, in compliance with the obligations set for hosting providers by the Ecommerce Directive and the piece of legislation (Legislative Decree 70/2003) that implemented it into the Italian legal system. 

The Tribunale di Torino dismissed the request for an interim injunction, holding that from Articles 16 and 17, and Recitals 42 to 48 of the Directive as interpreted by the Court of Justice of the European Union (CJEU) in its decisions in Cases C-70/10 Scarlet [here] and C-360/10 Netlog [here], it follows that:

a)  YouTube does not have any duty to determine in advance whether individual users who upload videos onto its platform have actually the right to do so. 
b)  The only case when a hosting provider such as YouTube may be responsible for third parties' infringements is when it has actual knowledge of the presence of illegal content or, upon obtaining such knowledge or awareness [according to the judge it is necessary for the rightholder to indicate the URLs of the allegedly infringing content, not just the title of the works in which copyright has been allegedly infringed] it does not act expeditiously to remove or disable access to the content. 
c)  EU and Italian laws forbid any obligation on ISPs to monitor the information they store or transmit. Moreover, should obligations of preventative control and filtering be imposed on hosting providers, the broad diffusion of services based on the adoption of automatic uploading systems would be negatively affected.

The Tribunale found - among other things - that, upon receiving notice of the relevant URLs, YouTube had acted expeditiously to remove all the allegedly infringing videos. The judge also suggested that to prevent future infringements, rightholders may continue monitoring whether new allegedly infringing content is uploaded, or – even better - participate in YouTube's Content ID program. This allows rightholders to deliver reference files of content to which they say they own the copyright to YouTube, metadata describing that content, and policies describing what they want YouTube to do when it finds a match. YouTube compares videos uploaded to the site against those reference files, and when a match is found it applies the rightholder’s chosen policy, ie (a) make money from the upload; (b) leave it up and track viewing statistics; or (c) block it from YouTube altogether.

Delta TV appealed the decision, seeking an injunction that would require YouTube and Google to prevent further infringements. According to Delta, this could be done by requiring the defendants - rather than Delta - to activate Content ID. Delta also argued that, by indexing and organising the contents uploaded onto its platform, YouTube is not a hosting provider that is eligible for the Ecommerce Directive “safe harbors”.

The Tribunale di Torino has now issued its decision [made available only at the end of last week] and - contrary to the dramatic reports of some newspapers [here and here] that suggested that YouTube can no longer be considered a hosting provider within the Ecommerce Directive - agreed with Delta's claims to a pretty limited extent. 

Enforcement v Ecommerce Directive?
No need for a fight
IP protection and information society services: the latter prevail

The three judges that re-examined Delta’s claim started by observing that there might be a clash between IP protection (which is also protected as a fundamental right within Article 17(2) of the Charter of Fundamental Rights) and information society services. 

At the EU level, this might have resulted in a conflict between the Enforcement Directive and the Ecommerce Directive, but EU legislative avoided it: Article 3(2)(a) of the former states in fact that that directive would not affect the latter, notably Article 12 to 15. 

This means that the safe harbor provisions of the Ecommerce Directive prevail over the Enforcement Directive, yet within the boundaries set by the Ecommerce Directive itself, in particular at Recitals 42, 43, 45, 46, 47, and 48. 

It is within this legislative framework that: (1) the prohibition of a general obligation on providers to monitor the information transmitted or stored must be interpreted and, more generally, (2) the balance between IP protection and information society services must be established. 

The judges then recalled that in L'Oréal and Scarlet the CJEU prohibited national measures that would require an intermediary provider to monitor actively all the data of each of its customers in order to prevent any future infringement of IP rights. However, the jurisdiction conferred on national courts must allow them to order those intermediaries to take measures aimed not only at bringing to an end infringements already committed, but also at preventing further infringements.

Don't worry Cecil:
safe harbors still exist
YouTube is a new generation provider, yet still a hosting provider

The judges then considered whether YouTube could be considered a content – rather than hosting - provider. They noted how technological development has been such as to supersede the descriptions provided in the Ecommerce Directive, which posits the idea of a hosting provider as a subject that merely "sells storage space" [does this imply a suggestion to EU law-makers that this directive should be updated?].

These days no hosting provider may be considered completely neutral in respect of the information stored, in that the very way in which it organises such information economically supports its activities by making its service attractive to advertisers. 

YouTube should be considered a new generation hosting provider. However, this does not mean that a subject like YouTube is not eligible for the safe harbors of the Ecommerce Directive, but rather that the duty of care that can be reasonably expected from it pursuant to Recital 48 to the Directive may be of a higher standard. 

Rightholders must specify URLs, and YouTube should use them as reference files for Content ID

The judges confirmed that rightholders must indicated the URLs of the allegedly infringing content when sending a formal request to YouTube. Sole indication of the title of the works in which copyright has been allegedly infringed is insufficient. 

Once this has occurred, can the hosting provider be required to prevent future uploads of the same contents that were accessible at the URLs specified? 

According to the judges, this question must be addressed from both a legal and technical standpoint.

As regards the former, it is necessary to determine whether imposing this obligation would conflict with the provisions of the Ecommerce Directive. According to the judges, this control would be ex post and specific, thus differing from a general obligation to monitor.

In relation to technical feasibility, the judges found that it would be possible for YouTube to employ Content ID to prevent further infringements. Although Content ID works through reference files provided by the rightholder, in the case of requests to remove specific URLs of YouTube videos, such reference files would be already present on the video hosting platform. This means that YouTube could use directly those files to prevent the future uploading of identical contents. In any case, the rightholder shall remain responsible towards third parties for any illegitimate use of Content ID.

... rather than those of courts?
So what?

In the end, the Tribunale only accepted Delta’s claim that YouTube should use Content ID to prevent further alleged infringements, by using the reference files at the URLs specified in Delta’s earlier formal request to block new identical contents.

Wait a second, says Merpel: isn’t this already one of the options from which rightholders using Content ID may choose from?

Basically this new decision of the Tribunale di Torino just means that Delta has decided that it does not want to monetise or leave the contents up, but rather wishes to have them removed when the same reference files are found again on YouTube, and that YouTube must comply with its request.

This is something that YouTube would do even without being sued and actually do better than the solution proposed by the Tribunale. Rightholders who participate in the Content ID program may in fact provide YouTube with the reference files of any contents to which they own the copyright and want blocked, while in the case of Delta TV YouTube will have to use Content ID only to block the contents specified in its earlier removal request.

Is this a smart solution for Delta TV? Let’s now wait for the final decision of the Tribunale to know more ...

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