UK: IP Bulletin - September 2011

KEY CASES AND DEVELOPMENTS

• L'Oréal SA and others v eBay International AG and others, ECJ- High Court reference. The ECJ has given its judgment on the questions referred it by the High Court. More >>>
• The Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and others, Court of Appeal – NLA end-user licence. The Court of Appeal has upheld the decision of the High Court which held that end-users of an online news-monitoring service needed their own web end-user licence from the Newspaper Licensing Agency. More >>>
• Twentieth Century Fox Film Corporation and others v British Telecommunications plc, High Court – ISP to block access to Newzbin website. The High Court has ordered that BT take measures to block access to the Newzbin website. More >>>
• Lucasfilm Limited and others v Andrew Ainsworth and another, Supreme Court – copyright in a sculpture and enforcement of US copyright in English courts. The Supreme Court has upheld the lower courts' decisions that Star Wars Stormtrooper helmets were not sculptures, but overturned the Court of Appeal's decision that English Court did not have jurisdiction in a US copyright infringement claim. More >>>

PATENTS

ECJ - questions on SPC referred by High Court
Synthon BV v Merz Pharma GmbH & Co KG, C-195/09, 28 July 2011

The ECJ has followed the opinion of the Advocate General in a case in which the High Court referred questions to the ECJ on the interpretation of Article 2 of the SPC Regulation.

Article 2 of the SPC Regulation (EC Council Regulation No 1768/92) provides that:

On 14 April 1989, Merz applied for European Patent 0,392,059 ("the basic patent"). It was granted in 1993 and would expire without the benefit of the SPC on 14 April 2009. The basic patent was in respect of a second medical use of memantine: a fact which explains why it was granted despite the earlier commercial availability of memantine on the market in Germany for 25 years.

Merz was granted a SPC on 14 August 2003. Although the SPC was granted on the basis of EU-wide marketing authorisations granted in 2002, there was a 1976 authorisation under the then existing German law which did not require testing. Merz had also obtained a Luxembourg authorisation in 1983 which, although it was under a law which was consistent with Directive 65/65/EEC, relied on the German authorisation and did not test the product.

In its application for a SPC, Merz identified the basic patent. It also identified the 2002 authorisation, but not the earlier Luxembourg or German authorisations.

Synthon BV sought revocation of the SPC on a number of grounds, or a declaration that it had a zero term.

The High Court referred questions to the ECJ which asked the ECJ to clarify whether, as Merz contended, Article 2 refers to the placing on the market in the Member State in which the SPC application was made or, as Synthon argued, to the first placing on the market in the territory of the Community.

The Advocate General said (see April 2011 Bulletin) that it was not compatible with the objectives of the SPC Regulation to extend the protection to products which were already present on the Community market on a different basis before the marketing authorisation was obtained in accordance with Directive 65/65.

The ECJ has followed the Advocate General's opinion and held:

Article 2 of the SPC Regulation for medicinal products must be interpreted as meaning that a product, such as that at issue in the main proceedings, which was placed on the market in the European Community as a medicinal product for human use before obtaining a marketing authorisation in accordance with Council Directive 65/65/EEC and, in particular, without undergoing safety and efficacy testing, is not within the scope of the Regulation and may not, therefore, be the subject of a supplementary protection certificate.

A supplementary protection certificate granted for a product outside the scope of the Regulation as defined in Article 2 is invalid.

TRADE MARKS

ECJ - L'Oréal v eBay High Court reference
L'Oréal SA and others v eBay International AG and others, Case C-324/09, 12 July 2011

The ECJ has given its judgment on the questions referred it by the High Court. The judgment has given a more restrictive interpretation than the Advocate General of Article 14(1) of the E-commerce Directive which exempts information society service providers from liability for unlawful acts hosted by them.

In May 2009, judgment was given in the High Court on part of the claim brought by L'Oreal against eBay, which raised two main questions: Is eBay liable for trade mark infringements committed by its users? Does eBay itself commit infringements by using trade marks in relation to infringing goods ie by using L'Oréal's trade marks to direct people to infringing goods on the eBay website?

The High Court found that the sellers on the eBay site had infringed L'Oreal's trade marks, either because the goods the sellers sold were put on the market outside the EEA, and L'Oréal did not consent to those goods being put on the market within the EEA; or, the goods the sellers sold were counterfeits. The court found that eBay was not jointly liable for the infringements committed by the users of the site (see May 2009 Bulletin).

The court referred a number of questions to the ECJ, which has now given its judgment as follows (see December 2010/January 2011 Bulletin for the report on the Advocate General's Opinion).

1. Where goods bearing a trade mark registered in a Member State or a CTM, and which have not previously been put on the market in the EEA (or EU in the case of a CTM) (i) are sold on an online marketplace to a consumer located in the territory covered by the trade mark or (ii) are offered for sale or advertised on a marketplace which is targeted at consumers located in that territory, the trade mark proprietor may prevent that sale, offer for sale or advertising.
2. Where the proprietor of a trade mark supplies its authorised distributors with items bearing that mark which are intended for demonstration to consumers, and bottles bearing the mark from which small quantities can be taken for supply as free samples, those goods are not put on the market.
3. The trade mark proprietor may oppose the resale of goods on the ground that the reseller has removed their packaging, where essential information, such as information relating to the identity of the manufacturer or the person responsible for marketing the cosmetic product, is missing.
   
   Where the removal of the packaging has not resulted in the absence of that information, the trade mark proprietor may still oppose the resale of an unboxed perfume or cosmetic product, if the proprietor establishes that the removal of the packaging has damaged the image of the product and, hence, the reputation of the trade mark.
4. The proprietor of a trade mark is entitled to prevent an online marketplace operator from advertising goods bearing that trade mark which are offered for sale on the marketplace (on the basis of a keyword which is identical to his trade mark), where the advertising does not enable reasonably well-informed and reasonably observant internet users, or enables them only with difficulty, to ascertain whether the goods concerned originate from the proprietor of the trade mark or from an undertaking economically linked to that proprietor or, from a third party.
5. The operator of an online marketplace does not 'use' signs identical with or similar to trade marks which appear in offers for sale of its customers displayed on its site.
6. Article 14(1) of the E-commerce Directive exempts information society service providers from liability for unlawful acts hosted by them. It applies to the operator of an online marketplace where the operator has not played an active role allowing it to have knowledge or control of the data stored.
   
   The operator plays an active role when it provides assistance with, in particular, the presentation of the offers for sale or promoting them.
   
   Where the online marketplace operator has not played an active role, the operator cannot rely on the exemption in a case which may result in an order to pay damages, if it was aware of facts or circumstances on the basis of which a diligent economic operator should have realised that the offers for sale were unlawful and, in the event of it being so aware, failed to act expeditiously to remove or to disable access to the information.
7. Article 11 of the IP Enforcement Directive must be interpreted as requiring Member States to ensure that the national courts are able to order the online marketplace operator to take measures which contribute, not only to bringing to an end the infringements by users, but also to preventing further infringements. The injunctions must be effective, proportionate, and dissuasive and must not create barriers to legitimate trade.

COPYRIGHT

Supreme Court – copyright in a sculpture and enforcement of US copyright in English Courts
Lucasfilm Limited and others v Andrew Ainsworth and another, [2011] UKSC 39, 27 July 2011

The Supreme Court has upheld the lower courts' decisions that Star Wars Stormtrooper helmets were not sculptures, but overturned the Court of Appeal's decision that English Court did not have jurisdiction in a US copyright infringement claim.

The dispute concerned copyright in the helmets of the "Stormtrooper" soldiers from the Star Wars films.

PICTURE A

The Supreme Court has upheld the lower courts' decisions that the helmets were not sculptures because they were utilitarian, and so were not artistic works under the Copyright, Designs and Patents Act 1988. It was the Star Wars film that was the work of art that Mr Lucas and his companies created. The helmet was utilitarian in the sense that it was an element in the process of production of the film being a costume or prop for the film.

In considering whether the English court may exercise jurisdiction in a claim against persons domiciled in England for infringement of copyright committed outside the European Union in breach of the copyright law of that country, the Supreme Court overturned the Court of Appeal's decision that English Court did not have jurisdiction in a US copyright infringement claim.

It held that US copyright infringement claims were justiciable before the English Courts. It reviewed the various cases which have previously suggested otherwise, including the Moçambique rule, which it said had been abolished by statute or eroded by subsequent case law.

The court said that the modern trend was in favour of the enforcement of foreign intellectual property rights. It referred to Article 22(4) of the Brussels Regulation, which only assigned exclusive jurisdiction to the country where an intellectual property right originated in cases which concerned registration or validity of intellectual property rights that had to be deposited and registered. The court also referred to Rome II (which did not apply in the present proceedings) which showed clearly that there was no European public policy against the litigation of foreign intellectual property rights.

Court of Appeal – NLA end-user licence
The Newspaper Licensing Agency Ltd and others v Meltwater Holding BV and others, [2011] EWCA Civ 890, 27 July 2011

The Court of Appeal has upheld the decision of the High Court which held that end-users of an online news-monitoring service needed their own web end-user licence from the Newspaper Licensing Agency Ltd (see November 2010 Bulletin for report of the High Court Decision).

Meltwater provided an online news-monitoring service called "Meltwater News" which contained a reference to every use of the search term and set out (a) a hyperlink to each relevant article, (b) the headline from the article, (c) the opening words of the article after the headline and (d) an extract from the article showing the context in which the search term appeared by reproducing the search term and some words immediately preceding and following it.

Meltwater (following a dispute in the Copyright Tribunal) entered into a web database licence with the Newspaper Licensing Agency Ltd (NLA) to carry out its monitoring activities of newspapers.

NLA brought copyright infringement proceedings against PRCA, an end-user of Meltwater News. The issue in dispute was whether the end-users required a web end-user licence from NLA to receive and use Meltwater News.

The High Court held that the end-users did need a web end-user licence from the NLA, as without one they were infringing the newspaper publishers' copyright. PRCA appealed.

The Court of Appeal has upheld the decision of the High Court and found that:

• Headlines are capable of constituting copyright works. The Court referred to the test for subsistence of copyright set out by the ECJ in Infopaq, in particular the requirement that in order to be original, the subject matter should be the author's intellectual creation. This did not alter the test for originality already established by English case law.
• The reproduction of each Meltwater news item (comprising a headline and extract) could potentially infringe copyright in the original work and there was a substantial likelihood that this would occur regularly and to a significant extent. Some of the text extracts would inevitably constitute a substantial part of the works from which they were taken.
• End-users did not have a defence under section 28A of the CDPA (transient or incidental copying) or section 30 of the CDPA (fair dealing).
• End-users' activities did not constitute a permissible use under regulation 19 of the Database Regulations (by a lawful user of insubstantial parts of the databases of newspaper publishers which had been made available to the public).
• The NLA's demand for a web end-user licence was not a double-licence of any activity because the web database licence with Meltwater did not authorise the end-users to make any of the copies that were made on their computers when they opened the Meltwater News email, searched the Meltwater website or accessed the newspapers' website by clicking on a link from Meltwater News. None of these were the same copies as were sent by Meltwater.

The court said that the order proposed by the High Court should be amended to recognise the fact that there may be some cases in which neither the headline nor the extract constitute a copyright work or a substantial part of a copyright work.

High Court – ISP to block access to Newzbin website
Twentieth Century Fox Film Corporation and others v British Telecommunications plc, [2011] EWHC 1981 (Ch), Arnold J, 28 July 2011

The High Court has ordered that BT take measures to block access to the Newzbin website.

The applicants were well-known producers and distributors of films, namely Twentieth Century Fox Corporation, Universal City Studios Productions LLP, Warner Bros Entertainment Inc., Paramount Pictures Corporation, Disney Enterprises, Inc., and Columbia Pictures Industries, Inc. The respondent, BT, is the largest ISP in the UK, with a market share of about 35%.

The High Court had previously held that the applicants' copyright in their films had been infringed by Newzbin Ltd's website service. This indexed and enabled binary content to be searched, including unlawful copies of films (see report in March 2010 Bulletin). Newzbin Ltd subsequently went into voluntary liquidation and the Newzbin website (Newzbin1) ceased to operate. However, shortly after this, a new Newzbin website (Newzbin2) began operating, which was very similar to the Newzbin1 website. The Newzbin2 website was operated by unidentified individuals acting under pseudonyms. The servers used to host the Newzbin2 website were located in Sweden. The domain name www.newzbin.com was registered to a company in the Seychelles.

The applicants applied for an order requiring BT to block, or at least impede, its subscribers from accessing either the Newzbin1 or Newzbin2 websites. BT defended the application on a number of grounds.

Section 97A of the CDPA provides that

Arnold J agreed to make an order requiring BT to adopt technical means to block, or at least impede, its subscribers from accessing either the Newzbin1 or Newzbin2 website. One of the key issues was the interpretation of the requirement of "actual knowledge" in section 97A. The judge found that BT knew that the users and operators of Newzbin2 infringed copyright on a large scale and, in particular, infringed the copyrights of the applicants. It knew that the users of Newzbin2 included BT subscribers, and it knew that those users used its service to receive infringing copies of copyright works made available to them by Newzbin2. It followed that BT had actual knowledge of other persons using its service to infringe copyright.

The applicants made it clear that this was a test case: if they were successful in obtaining an order against BT, then they intend to seek similar orders against all the other significant ISPs in the UK. The other ISPs were informed of the present application in case they wished to intervene, but did not do so.

High Court – live internet streaming
ITV Broadcasting Limited and others v TV Catchup Limited and The Secretary of State for Business, Innovation and Skills (intervenor), [2011] EWHC 1874 (Pat), Floyd J, 18 July 2011

The High Court has considered infringement by live streaming over the internet. The court's provisional view is that streaming infringes broadcast copyright.

The defendant, TV Catchup Limited, operated a website which enabled the public to watch live UK television on computers, smart phones and games consoles. The claimants were national broadcasters and alleged that TV Catchup had infringed the copyrights in their broadcasts by communicating the broadcasts to the public by electronic transmission, and by the making (or authorising the making) of transient copies of broadcasts and films on TV Catchup's servers and on the screens of users.

Section 20(1)(c) of the Copyright, Designs and Patents Act 1988 (CDPA) provides for a general right of the copyright owner of communication to the public.

Section 28A provides:

Section 73 provides a defence where a wireless broadcast made from within the UK is received and immediately re-transmitted by cable. Section 73(2)(b) states that copyright in a broadcast is not infringed to the extent that the broadcast is made for reception in the area in which it is re-transmitted by cable and forms part of a qualifying service. Qualifying services are listed in section 73(6) and include all the BBC services, ITV1, Channel 4 and Channel 5.

The judge dismissed a claim that CDPA section 20(1)(c) was made ultra vires and held that it was enacted with proper powers.

The judge's provisional views were that:

• TV Catchup was communicating films and broadcasts to the public but was not reproducing a substantial part of the broadcasts on its servers and on users' screens. He will refer questions to the ECJ on these issues.
• TV Catchup was reproducing a substantial part of the films on its servers and on users' screens, and that it had a defence under section 28A of the CDPA in respect of reproductions in the servers but not on the screens. These views are subject to the ECJ's forthcoming response to questions referred to it from the Football Association Premier League case (in which Advocate General Kokott has given an opinion that territorial exclusivity agreements relating to the transmission of English Premier League football matches are contrary to EU law.)

The judge said that the availability of the section 73 defence depended on the interpretation of the word "cable". The stream entered the internet by cable, but the last part of its journey might be wireless: for example, where the viewer was using a wireless broadband connection or was watching the stream on a mobile phone. The judge considered that, while the internet itself should be regarded as cable, any streaming to mobile phones would be outside the scope of the defence.

As TV Catchup's broadcasts of London regional services were transmitted indiscriminately and not specifically to London users, they were not "made for reception" in the area into which they were re-transmitted, and so did not attract the defence.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.