UK: IP Bulletin – February Edition - Cases from December 2010 and January 2011

KEY CASES AND DEVELOPMENTS

• L'Oréal SA v eBay International AG, Advocate General Opinion - response to High Court reference. The Advocate General has given his opinion on the questions referred to the ECJ by the High Court. More . . .
• Virgin Atlantic Airways Ltd v Delta Airways Inc, High Court - summary judgment and joint liability for infringement. The High Court has granted summary judgment and held that the supply of an incomplete kit of parts in the UK for assembly outside the jurisdiction does not infringe. More . . .
• Syngenta Participations AG and another v Plant Bioscience Limited; State of Israel - Ministry of Agriculture v Unilever N.V., EPO Enlarged Board of Appeal - exclusion from patentability of plant breeding methods. The EPO Enlarged Board of Appeal has held that Article 53(b) of the European Patent Convention excludes methods for cross-breeding and selecting genomes of plants, even if a step in the process is of a technical nature. More . . .
• Football Dataco Ltd and others v YAHOO! UK Ltd and others, Court of Appeal – database right and copyright in football fixture lists. The Court of Appeal has referred questions to the ECJ concerning the interpretation of Article 3 of the Database Directive (96/9/EC) in relation to football fixture lists. More . . .

PATENTS

Court of Appeal - amendment of mobile-phone patents
Nokia GmbH and others v IPCom GmbH, [2011] EWCA Civ 6, 20 January 2011

The Court of Appeal has upheld a High Court decision that a patent relating to mobile phones was invalid, and that applications to amend another patent held to be invalid should be refused.

The patentee, IPCom, and Nokia were engaged in an international patent battle. In the High Court, two of IPCom's patents were held to be wholly invalid.

Immediately before trial, IPCom applied to amend one of the patents in response to additional prior art sought to be introduced by Nokia. Nokia subsequently withdrew its application to cite the prior art on the first day of the trial, and the High Court held that IPCom was not entitled to proceed with its application to amend on the grounds that it would be procedurally unfair. After the finding of invalidity at trial, IPCom renewed its application to amend, which was also refused.

IPCom appealed the refusals to allow the applications to amend and the finding of invalidity of the other patent. The Court of Appeal upheld the High Court's decisions.

Regarding the first application to amend, the Court of Appeal held that Floyd J had correctly exercised his discretion in refusing the application to amend. The application was too late and so it would have been procedurally unfair to continue with the trial because Nokia did not have the proper opportunity to consider the proposed amendment.

The High Court judgment concerning the second amendment primarily applied the principles laid down by the Court of Appeal in Nikken v Pioneer Trading, in which it was held that a post-trial application to amend a patent should ordinarily be refused if it would involve a second trial on validity. This was because procedural fairness required a party to put forward the whole of his case before trial thereby avoiding expense, delay, uncertainty and double vexation of the successful party.

IPCom made a number of arguments as to why the decision in Nikken should not apply which were rejected by the Court of Appeal.

High Court - summary judgment and joint liability for infringement
Virgin Atlantic Airways Ltd v Delta Airways Inc [2010] EWHC 3094 (Pat), 30 November 2010

The High Court has granted summary judgment to the defendant and held that the supply of an incomplete kit of parts in the UK for assembly outside the jurisdiction does not infringe.

Virgin is the owner of a European patent for aircraft seats which can be converted into a flat bed. This seat had been designed by Contour, which then supplied other airlines, including Delta, with a design of a flat-bed seat called "Solar Eclipse". Virgin sued Contour for patent and design right infringement. In January 2009, the High Court held the patent to be valid but not infringed and rejected the design right infringement claims. On appeal, in December 2009, the Court of Appeal reversed the High Court decision and held that the patent was valid and infringed.

Then in September 2010, in the EPO opposition proceedings, a Technical Board of Appeal maintained the patent, but in an amended form. The amendments included the deletion of all the seat unit claims.

After the action against Contour had been commenced, Virgin also sued Delta on the basis of joint liability for acts of infringement committed by Contour. Contour manufactured parts of the seat assembly in the UK, but the installation of the system in the planes took place solely in the US.

Following amendment in the EPO opposition, Delta applied for summary judgment. The parties agreed that Virgin's allegations relating to the seat units, as distinct from the seating systems, should now be disregarded following the amendment.

Direct infringement only took place in the US. However, Virgin argued that Delta was liable under section 60(1)(a) by dealing in a "kit of parts". Section 60(2) (contributory infringement) did not apply because there is a double territorial requirement: firstly, the supply or offer for supply of the "means relating to an essential element of the invention" has to take place in the UK, and secondly, the means had to be "suitable for putting, and are intended to put, the invention into effect" in the UK.

Arnold J granted summary judgment. He said that summary judgment applications in patent cases are unusual unless, as here, there has been a previous trial involving the same patent and product.

He concluded that Virgin had no real prospect of establishing infringement by Contour pursuant to section 60(1)(a). Claim 1 was limited to a seating system comprising seat units assembled and arranged on an aircraft. Contour has not assembled and arranged Solar Eclipse seat units on an aircraft in the UK.

The fact that Contour has made and supplied to Delta within the UK Solar Eclipse seat units which are capable of being assembled and arranged on an aircraft in the claimed manner is not enough, since Delta obtains the aircraft from elsewhere and the seat units are assembled and arranged on the aircraft outside the UK.

He said that the essence of the invention of claim 1 is the arrangement of the seat units on the aircraft, and the way in which it saves space. That advantage is not realised until the seat units are assembled and arranged on the aircraft.

Therefore, Delta is not jointly liable for any infringement by Contour.

As a postscript to the judgment, Arnold J added that his decision does not necessarily deprive Virgin of the possibility of relief against Delta. Virgin may be able to bring a claim against Delta for infringement of its US patents. It may also, in the future, be in a position to sue Delta for infringement of a European patent (UK) containing seat unit claims.

EPO Enlarged Board of Appeal - exclusion from patentability of plant breeding methods
Syngenta Participations AG and another v Plant Bioscience Limited G 0002/07; State of Israel - Ministry of Agriculture v Unilever N.V. G 0001/08, 9 December 2010

The EPO Enlarged Board of Appeal has held that Article 53(b) of the European Patent Convention excludes methods for cross-breeding and selecting genomes of plants, even if a step in the process is of a technical nature.

Case G 2/07 concerned a patent application for a method for breeding a member of the Brassica family with elevated levels of a particular compound (4-methylsulfinylbutyl glucosinolates, or 3-methylsulfinylpropyl glucosinolates, or both).

Case G 1/08 concerned a patent application for a method for breeding tomato plants that produces tomatoes with reduced fruit water content.

Questions were referred by two Technical Boards of Appeal to the Enlarged Board, following which the cases were combined.

Article 53 of the European Patent Convention (EPC) provides that:

Rule 23b(5) of the Implementing Regulations to the EPC 1973 states that:

The Enlarged Board of Appeal answered as follows:

A non-microbiological process for the production of plants which consists of sexually crossing the whole genomes of plants and subsequently selecting plants is in principle excluded from patentability as being "essentially biological" within the meaning of Article 53(b) EPC.

Such a process does not escape the exclusion of Article 53(b) EPC merely because it contains a step of a technical nature which assists the crossing or selecting of plants.

However, if there is an additional step of a technical nature which introduces a trait into the genome or modifies a trait, so that the introduction or modification of that trait is not the result of mixing the genes by crossing, then the process is not excluded from patentability.

High Court – third party access to validity documents from court file
Pfizer Health AB and another v Schwartz Pharma AG and others v Strickland (Legal) LLP (Applicant), [2010] EWHC 3236 (Pat), Floyd J, 8 December 2010

The High Court has allowed a third party to have access to copies of documents concerning the validity of patents from the court file of an action which had settled. The third party had a commercial interest in the patents.

Commission - monitoring of patent settlements
Press release IP/11/40
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/11/40&format=HTML&aged=0&language=EN&guiLanguage=en

The European Commission launched the second round of its monitoring of patent settlements between pharmaceutical companies on 17 January 2011.

TRADE MARKS

Advocate General Opinion - L'Oréal v eBay High Court reference
L'Oréal SA and others v eBay International AG and others, Case C-324/09, 9 December 2010

The Advocate General has now given his opinion on the questions referred to the ECJ by the High Court.

In May 2009, judgment was given on part of the claim brought by L'Oreal against eBay, which raised two main questions: Are eBay liable for trade mark infringements committed by their users? Do eBay themselves commit infringements by using trade marks in relation to infringing goods?

The 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.

The court referred a number of questions to the ECJ, on which the Advocate General has now given his opinion as follows:

Where testers and samples which are not intended for sale to consumers are supplied without charge to the trade mark proprietor's authorised distributors, such goods are not "put on the market" by the proprietor or with his consent within the meaning of Article 13(1) of the CTM Regulation.

In certain circumstances, the trade mark proprietor is entitled to oppose further commercialisation of unboxed products within the meaning of Article 13(2) of the CTM Regulation where the outer packaging has been removed without the consent of the trade mark proprietor.

Where the operator of an electronic marketplace purchases a keyword which is identical to a registered trade mark, which is displayed to a user in a sponsored link to the operator's website, the display of the sign as a keyword in the sponsored link constitutes 'use' of the sign within the meaning of Article 9(1)(a) of the CTM Regulation.

Where clicking on the sponsored link leads the user directly to advertisements or offers for sale of infringing goods, that constitutes use of the sign by the operator of the electronic marketplace 'in relation to' the infringing goods within the meaning of Article 9(1)(a) of the CTM Regulation.

However, this does not have an adverse effect on the functions of the trade mark provided that a reasonable average consumer understands, on the basis of information included in the sponsored link, that the operator of the electronic marketplace stores in his system advertisements or offers for sale of third parties.

Where the goods offered for sale on the electronic marketplace have not yet been put on the market within the EEA by or with the consent of the trade mark proprietor, it is sufficient to show, in order to make out an infringement claim, that the advertisement is targeted at consumers within the territory covered by the trade mark.

Article 14 of the E-commerce Directive exempts information society service providers from liability for unlawful acts hosted by them. It provides that:

1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
2. 1. the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
   2. the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information.

The Advocate General said that there is 'actual knowledge' of illegal activity or 'awareness' of facts or circumstances where the operator of the electronic marketplace has knowledge that infringing goods have been advertised, offered for sale and sold on its website, and that infringements of that registered trade mark are likely to continue regarding the same or similar goods by the same user of the website.

COPYRIGHT

Court of Appeal – database right and copyright in football fixture lists
Football Dataco Ltd and others v YAHOO! UK Ltd and others [2010] EWCA Civ 1380, 9 December 2010

The Court of Appeal has referred questions to the ECJ concerning the interpretation of Article 3 of the Database Directive (96/9/EC) in relation to football fixture lists.

The claimants organised professional football matches and alleged that they owned rights in the football fixture lists of English and Scottish leagues. The defendants needed to use the fixture lists in the conduct of their betting businesses.

The claimants alleged that the defendants were using the fixture lists without a licence in breach of their rights, which were: database right under Article 7 of the Database Directive, copyright in a database under Article 3 of the Directive, and copyright under the CDPA.

In the High Court, Floyd J held that the fixture lists were the product of selection or arrangement of data protected by database copyright under Article 3 of the Directive, but not by database right or any other copyright (see April 2010 Bulletin). The defendants appealed and the claimants cross-appealed (on the Article 7 point).

The Court of Appeal has referred questions to the ECJ concerning the interpretation of Article 3 of the Database Directive (96/9/EC). The court also referred a question as to whether the Directive precluded national database copyright in databases independent of the Directive.

Article 3 of the Database Directive (96/9/EC) provides for harmonised copyright for databases, and is incorporated into UK law in s.3A CDPA 1988 which states:

The questions are as follows:

1. In Article 3(1) of Directive 96/9/EC on the legal protection of databases what is meant by "databases which, by reason of the selection or arrangement of their contents, constitute the author's own intellectual creation" and in particular:
   
   
   1. should the intellectual effort and skill of creating data be excluded?
   2. does "selection or arrangement" include adding important significance to a pre-existing item of data (as in fixing the date of a football match);
   3. does "author's own intellectual creation" require more than significant labour and skill from the author, if so what?
      
      
2. Does the Directive preclude national rights in the nature of copyright in databases other than those provided for by the Directive?

Court of Appeal – infringement of photographer's copyright
MGN Ltd and others v Grisbrook [2010], EWCA Civ 1399, 9 December 2010

The Court of Appeal has upheld the High Court's decision (see October 2009 Bulletin) that a licence granted by a freelance photographer to MGN Limited to use photographs in the Daily Mirror newspaper, did not cover commercial exploitation of archive websites containing back copies of the newspaper.

A term extending the licence to cover such exploitation could not be implied because this was not in the joint contemplation of the parties at the date of the contract. When considering the issue of an implied licence, the High Court followed the approach of Lightman J in Robin Ray v Classic FM PLC that any licence represents a derogation from or relaxation of the copyright owner's statutory rights. It must, therefore, be for the defendant to justify (absent express agreement) the basis for extending the licence to cover what would otherwise be separate acts of infringement.

Court of Appeal – Pink Floyd royalty dispute with EMI
Pink Floyd Music Ltd and another v EMI Records Ltd [2010], EWCA Civ 1429, 14 December 2010

The Court of Appeal has dismissed an appeal by EMI Records against a High Court decision to grant Pink Floyd two declarations in a royalties dispute with EMI (see April 2010 Bulletin).

The result of the decision is that EMI must account for income received by internet service providers, such as iTunes, and that the clause prohibiting sales of the albums in question as individual tracks also applies to online distribution.

High Court - judicial review of Digital Economy Act
R (British Telecommunications plc and another) v Secretary of State for Business Innovation and Skills, 11 November 2010

The High Court has granted permission for judicial review concerning the online copyright infringement provisions of the Digital Economy Act. The application was made by British Telecommunications plc and TalkTalk Telecom Group plc.

ECJ – protection of graphical user interface
Bezpečnostní softwarová asociace – Svaz softwarové ochrany v Ministerstvo kultury, Case C-393/09, 22 December 2010

The ECJ has held that a graphical user interface (GUI) is not protected by copyright under the Software Directive (91/250/EEC), but can be protected by copyright under the Information Society Directive (2001/29/EC) . The court also held that television broadcasting of a GUI did not constitute communication to the public of a work protected by copyright under the Information Society Directive.

DESIGNS

IPO – consultation on innocent infringement
IPO press release, 1 December 2010
http://www.ipo.gov.uk/pro-policy/consult/consult-live/consult-2010-desleg.htm

The IPO has launched a consultation which presents two proposals to equalise the remedies available in the UK for innocent infringement of UK registered designs and Community designs.

Financial remedies are currently available for unintentional infringement of a Community design, but are not available for unintentional infringement of a UK registered or unregistered design.

It is proposed to either limit the liability of those who unintentionally infringe Community designs in line with the current law governing the infringement of UK registered designs, or alternatively to remove the limitation of liability in respect of unintentional infringement of UK registered designs.

The deadline for submissions is 21 March 2011.

GENERAL

Commission – new R&D and Specialisation block exemptions and Horizontal Cooperation Agreements Guidelines
Commission press releases IP/10/1702 and MEMO/10/1676
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/1702&format=HTML&aged=0&language=EN&guiLanguage=en
http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/10/676&format=HTML&aged=0&language=EN&guiLanguage=en

The European Commission has adopted new R&D and Specialisation block exemptions and Horizontal Co-operation Agreements Guidelines. They replace the existing block exemption Regulations from 1 January 2011, with a transitional period of two years for existing agreements that meet the conditions of the superseded Regulations.

Chancellor's Autumn Statement
http://www.hm-treasury.gov.uk/press_65_10.htm

The Chancellor's autumn forecast statement included proposals to introduce a 10% corporation tax rate, from 1 April 2013, for income from patents first commercialised after 29 November 2010 (a "Patent Box"), and to review the support research and development tax credits provide for innovation. Responses to the proposals should be made by 22 February 2011.

Select committee - inquiry into protection of IPR online.
Culture, Media and Sport Committee press release, 6 December 2010
http://www.parliament.uk/business/committees/committees-a-z/commonsselect/culture-media-and-sport-committee/news/intellectual-property-rightsinquiry-deadline-extended/

The House of Commons Culture, Media and Sport Select Committee have announce that, due to BT and TalkTalk having been given leave to apply for judicial review of sections of the Digital Economy Act, which is likely to be heard between February and April 2011, the timescales for the Committee's ongoing inquiry into the Protection of Intellectual Property Rights Online, are affected.

The Committee has therefore agreed not to hold any evidence sessions in public until judicial review proceedings are concluded and to extend the deadline for written evidence until 23 March 2011.

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