UK: Technology And IP eBulletin - April 2010

In this issue:

• Enforcing your IP rights - A Worthy Investment?
• Controversial Digital Economy Bill receives Royal Assent
• Ignorance is Bliss for Google
• "Super-injunctions" - not so super after all?

Welcome to our Spring Technology and IP eBulletin. To coincide with the 10th Anniversary of World Intellectual Property Day today, Monday 26 April 2010, we have put together a number of interesting articles which focus on some of the day to day issues raised by World IP Day.

The World Intellectual Property Organisation notes the aims of World IP Day as being:

• to raise awareness of how patents, copyright, trademarks and designs impact on daily life
• to increase understanding of how protecting IP rights helps promote creativity and innovation
• to celebrate creativity, and the contribution made by creators and innovators to the development of societies across the globe
• to encourage respect for the IP rights of others

Further information of World Intellectual Property Day can be found at http://www.wipo.int/ip-outreach/en/ipday/.

DMH Stallard's Technology and Media Practice delivers a complete range of intellectual property protection and exploitation services. We are leaders in our field and are recognised by a number of the leading legal directories for our excellent lawyers.

In this edition, we look at the following issues:

• Enforcing your IP rights – A Worthy Investment?
• Controversial Digital Economy Bill receives Royal Assent
• Ignorance is Bliss for Google
• "Super-injunctions" – not so super after all?

ENFORCING YOUR IP RIGHTS - A WORTHY INVESTMENT?

It is a common misconception that enforcing your Intellectual Property rights will be a long, drawn out, and costly process. Brand owners often believe that if they try to enforce their IP rights, they will end up spending more in legal fees and people investigating the problem, than they'll recover in the long run.

As brand owners, it is an unavoidable fact that you will always be under attack from counterfeiters – the more successful your business, the more likely this is to be a problem. However, in clear cases we are often able to recover damages and costs delivering a significant net recovery for the business in addition to securing undertakings to stop the infringers from doing it again – its all about choosing the right battles and the right legal team.

DMH Stallard lawyers get results for our clients on the basis of our sound understanding of our clients' commercial goals. Not only do we strive to recover money to pay for all of your legal costs, we also work hard to secure an impressive return on your investment. As an example, we are currently working closely with Office Holdings Limited ("Office Shoes") pursuing 8 separate claims against companies who have infringed a number of their shoe designs. Through enforcing Office Shoes' unregistered rights, DMH Stallard have been able to secure undertakings from all parties involved, damages for loss of sales, and contributions to their legal costs. By working closely with Office Shoes, DMH Stallard has been able to turn enforcement of IP rights into a costs and revenue centre, as well as working with them to raise their profile of a business which responds swiftly and aggressively to any infringements.

CONTROVERSIAL DIGITAL ECONOMY BILL RECEIVES ROYAL ASSENT

The Digital Economy Bill, which has been the subject of lobbying and protest from digital rights groups, received Royal Assent on 8 April 2010. The Bill was introduced to address findings in the Digital Britain Report, a report which was the subject of close scrutiny, research and consultation. The same cannot be said of the Bill itself.

The Bill was passed during the so-called Parliamentary "wash-up" period - the short period of time between the calling of an election and the dissolution of Parliament. Many consider that it is entirely inappropriate for a Bill of such importance to have been passed using a process predominantly designed to push through uncontroversial and unopposed Bills and are concerned at the lack of proper scrutiny and Parliamentary debate afforded to it – reportedly, only 40 of some 640 MPs attended the second reading.

The Digital Economy Act 2010 includes, among others, the following new measures:

• A duty on Ofcom to report on the UK's communications infrastructure
• Obligations on internet service providers (ISPs) to reduce online copyright infringement
• Provisions relating to website blocking
• Increased penalties for copyright infringement

By far the most hotly debated of its provisions are those relating to copyright infringement and website blocking.

The Act gives the Secretary of State the power to impose technical obligations on ISPs to take measures against subscribers who have had more than a prescribed threshold of copyright infringement reports made against them – the so-called "three strikes rule". These measures include limiting internet connection speed and suspending the subscriber's service altogether. Further, the Act contains a website-blocking provision, which provides for the granting of blocking injunctions by a court in respect of websites which are being or are likely to be used in connection with copyright infringing activity.

For content creators, the passing of the Act is a welcome move and a step closer to addressing the problem of peer-to-peer file sharing. For ISPs, internet subscribers and WiFi providers such as internet cafés, schools and universities, the prospect of these new powers being implemented is a daunting one.

However, only time will tell what the full effect of these provisions will be, with the most controversial, including the subscriber suspension and website blocking measures, to be the subject of further scrutiny and debate and requiring secondary legislation before they can be implemented.

IGNORANCE IS BLISS FOR GOOGLE

Google has escaped liability for multiple claims of trade mark infringement through its AdWord application, much to the dismay of trade mark owners.

Google operates a paid referencing service called 'AdWords' which enables businesses to reserve "keywords" and appear as a sponsored link on a search results page. These sponsored links are displayed either on the right hand side of the results page or above the natural search results.

A fee for the referencing service is payable by the advertiser for each click and advertisers who reserve the same keyword are listed in descending order according to the amount paid to Google. To facilitate the AdWord application, Google set up an automated process for the selection of keywords and the creation of ads so that businesses have control over the text included on the sponsored link.

In 2008, various companies, including luxury goods producer Louis Vuitton Malletier SA, brought claims against Google for trade mark infringement under the AdWord application. Following appeals by Google, the French Courts subsequently sought clarity from the European Court of Justice (ECJ) on the following issues:

1. Whether an owner of a trade mark is entitled to prevent a paid referencing (service such as the AdWords application) from displaying trade marks under Article 5(1)(a) and (b) and 5(2) of the Trade Marks Directive 89/104.
2. Whether the AdWords application falls within the meaning of Article 14 of the E-Commerce Directive 2000/31 so that that Google could not be liable for illegal activity until it has been notified by the trade mark owner of the unlawful use of the sign by the advertiser.

In reviewing the facts the ECJ distinguished between the advertiser and Google as the internet service provider. The court concluded that whilst a trade mark owner could prevent an advertiser from using an identical or similar sign under on the AdWords application, the trade mark owner could not bring a claim against Google. The fact that Google had created software to enable advertisers to use a sign did mean that Google itself was using the sign.

In relation to the second issue, and whether Article 14 of the E-Commerce Directive applied to paid referencing services, the ECJ focused on Google's role as the AdWord application provider. The ECJ concluded that the software created by Google to run the application meant that the information was processed automatically and knowledge of infringing trade marks could not therefore be assumed. The ECJ described Google's role as merely technical, automatic and passive and Google could not therefore be liable for data which was stored unless, having obtained knowledge of the unlawful nature of the date, the service provider failed to act expeditiously.

As a result of the ECJ's ruling, trade mark owners must now sue advertisers individually to combat trade mark infringement issues arising from the use of AdWords or similar services. This is likely to be a logistical nuisance given that each EU national court has leeway to decide what it is exactly that will constitute an infringement.

Only time will tell whether this ruling will have a serious impact on advertisers' use of keywords. Perhaps an easier prediction for the time being, is the ability of Google to turn a blind eye to the infringing data stored within its ever-expanding crypt.

"SUPER-INJUNCTIONS" - NOT SO SUPER AFTER ALL?

The term "super-injunction" conjures up an image of something mighty powerful – a superhero amongst court orders? In simple terms an injunction is a Court order ordering you to do or not to do something, usually with dire consequences if you fail to observe it. Injunctions are granted in carefully controlled circumstances by the High Court. The super-injunction – as it has become popularly known – is a draconian order which can stop the reporting of a court case –and even stop the reporting of the fact that an injunction has been granted by the Courts at all.

However the "super-injunction" may not be so super after all. Following concerns expressed by, amongst others, the Culture, Media and Sports Committee, these powerful orders will now be reviewed by the Master of the Rolls, Lord Neuberger, alongside other senior judges, media group representatives and media lawyers starting on 4 May.

The super-injunction first hit the public consciousness last year when an order for a super-injunction by oil firm Trafigura attempted to stop the reporting of questions being asked in Parliament about the dumping of toxic waste in West Africa, sparking an intense debate about parliamentary freedom of speech. The Culture, Media and Sports Committee report states that they "strongly urge that a way is found to limit the use of super-injunctions as far as is possible and to make clear that they are not intended to fetter the fundamental rights of the press to report the proceedings of Parliament."

The super-injunction even kicked the world of football earlier this year when John Terry's attempts to super-injunct the reporting of his affair with the ex-girlfriend of a team-mate eventually fell foul of the mark amidst much press furore about freedom of the media. In that case it was felt that Terry's overwhelming concern in applying for the order was not to upset his sponsors. Unsurprisingly it was felt that that was not an outcome which the Court was there to help achieve.

We will be watching developments with keen interest from early May.

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.