UK: IP Snapshot

Last Updated: 6 January 2012
Article by Nick Beckett, Lucy Kilshaw and Tom Scourfield

COPYRIGHT

SAS Institute Inc v World Programming Ltd, Case C-406/10, 29 November 2011

Advocate General Bot has issued his opinion regarding the scope of protection conferred by copyright on computer programs in Case C-406/10 SAS Institute Inc v World Programming Ltd, a referral from the High Court. The key question was whether it is an infringement of the copyright in a computer program to create another computer program that replicates its functionality, but without accessing the source code.

This is a very important software copyright case and is relevant to authors of computer programs, and any licensors or users of computer programs in Europe. The AG has made it clear that copying the functionality or the language of a computer program, does not constitute copyright infringement. If the opinion is followed, the ability of owners of computer software to prevent the functionality of their programs being replicated will be limited. Other means of protecting their software rights will have to be considered. As the AG is also in favour of interoperability, computer program developers may need to amend their terms of use to give themselves maximum protection.

For our Law-Now of the decision, click here

Scarlet Extended SA v Société belge des auteurs, compositeurs et éditeurs SCRL, Case C-70/10, 24 November 2011.

In the long awaited judgment in the case of Scarlet Extended SA v SABAM, the Court of Justice of the European Union delivered a landmark decision preventing an onerous obligation being imposed by injunction on an Internet Service Provider (ISP) requiring it to prevent copyright infringements online. It ruled that the proposed injunction, which would require an ISP to install an expensive system for filtering, applied indiscriminately to all users as a preventative measure, and capable of identifying files which infringe copyright, was illegal and contrary to applicable fundamental rights, notably proportionality.

The case is a useful exposition of the relevant Directives and fundamental freedoms that must be balanced by the Courts in cases where rights holders seek injunctions against intermediaries. The CJEU has made it clear that such a costly and unlimited filtering requirement imposed on an ISP would be contrary to the E-Commerce Directive and the Copyright Directive and would not respect the rights of ISPs or consumers.

The decision appears to close the door on generalised attempts to require ISPs to filter all communications on their networks to identify copyright infringing material and prevent its transmission. It also implies that any injunctions against intermediaries or other analogous obligations imposed on them, (such as 'technical measures' proposed to be imposed on ISPs under the Digital Economy Act), would need to be shown to be materially better targeted, less onerous and less costly than the filtering obligation proposed here.

For the full text of the decision, click here.

Forensic Telecommunications Services Ltd v West Yorkshire Police & Another [2011] EWHC 2892 (Ch), 9 November 2011

In a decision earlier this month, the High Court held that a table of data produced by Forensic Telecommunications Services Ltd concerning "permanent memory absolute" addresses (known as "PM Abs" addresses) for mobile phones was protected by database right, which had been infringed by West Yorkshire Police. Further, the table was confidential and had been misused. However, copyright did not subsist in the individual addresses or in the table, as there was insufficient skill and labour expended and the selection or arrangement of the contents of the table did not constitute the author's own intellectual creation.

This is an interesting case, particularly concerning database right. It will be a relief to database right owners to see that Arnold J applied protection to the significant investment in data which was not held electronically or arranged in a complex way, but appeared in simple tabular form. Arnold J noted that while no defence had been argued based on WYP's status as a law enforcement agency, it was regrettable that the case had progressed so far as to have expended considerable public funds.

For our Law-Now of the decision, click here.

Circul Globus Bucureşti v Uniunea Compozitorilor şi Muzicologilor din România – Asociaţia pentru Drepturi de Autor (UCMR – ADA), Case C-283/10, 24 November 2011

The CJEU has ruled on the scope of the right to communicate a copyright work to the public under Article 3(1) of the Copyright Directive (2001/29/EC). The CJEU held that Article 3(1) of the Directive had to be interpreted as referring only to a communication to the public which is not present at the place where the communication originates, to the exclusion of any communication of a work which is carried out directly in a place open to the public using any means of public performance or direct presentation of the work.

This decision is unsurprising, however, while the point was arguably fairly clear from the terms of recital 23 and Article 3(1) of the Copyright Directive, in any event, the CJEU's discussion and clarification of the concept of "communication to the public" in this case and the recent Premier League case may be useful.

It should be noted that, whilst not covered by Article 3(1) of the Copyright Directive, communication of a work which is carried out directly in a place open to the public using any means of public performance or direct presentation of the work would, however, be covered by the right to perform, show or play the work in public.

For the full text of the decision, click here.

TRADE MARKS

Chartered Institute of Patent Attorneys v Registrar of Trade Marks, Case C-307/10, 29 November 2011

The Advocate General of the CJEU has indicated that the long established practice at OHIM to accept CTM applications on the basis of class headings is potentially illegitimate, which could significantly impact a large number of existing CTMs in all aspects, from enforcement and oppositions to invalidity and revocation proceedings.

The Opinion was given in case C-307/10, concerning the use of class headings from the Nice Classification to identify goods or services in a trade mark application or registration. In a test case, CIPA had applied and failed to register "IP Translator" as a UK trade mark for class 41 on the basis that this mark is descriptive, since class 41 includes translation services. On appeal, the Appointed Person stayed proceedings and referred questions to the CJEU to ask them to determine with what degree of precision goods or services need to be identified in a trade mark application, and in particular, whether the identification of goods or services by means of class headings is sufficiently precise to identify the goods/ services.

The Advocate General opined that the goods or services must be identified with sufficient clarity and precision so as to enable the competent authority and economic operators to determine accurately the scope of the protection conferred by the trade mark. A reference to class headings may but will not always be sufficient identification provided that these requirements for precision and clarity are met. In practice, however, it seems likely that class-headings will rarely be considered precise enough as a result of the broad range of services that are usually included under a specific class.

If the CJEU follows the approach of the Advocate General this could have a significant impact on both future applications for trade marks and existing registered trade marks. In particular, the "class-heading-covers-all" approach of OHIM may well be revised. This is likely to affect a substantial number of existing registrations for CTMs that have been granted with reference to a class heading in their specifications (there is some suggestion that this may affect around 20% of CTMs). There may well be implications for enforcement (both litigation and opposition) and invalidity and revocation proceedings involving trade marks with such class-heading specifications, since the scope of the protection afforded by such trade marks may be called into question. However, it will be a matter for national courts (those designated as CTM courts) and OHIM to apply the guidance given by the CJEU when the full decision is handed down.

For our Law-Now of the decision, click here.

PROCEDURAL UPDATE

Government to introduce small-claims service for IP claims

In response to the recommendations of the Hargreaves review of Intellectual Property and Growth, the Government has announced that it will be introducing a new small claims service for IP cases in the Patents County Court.

The review indicated that small firms are currently put off enforcing their IP rights due to high costs – 17% of small and medium-sized companies had given up attempting to enforce their IP rights due to high court costs.

The new small claims track will be created for low-value IP claims. It will limit fixed costs and allow damages of up to £5000 per case. The IPO has estimated that around 150 firms will benefit from the service every year – boosting UK business by £350,000.

This is good news for small businesses as it gives them confidence to protect their IP rights. Lengthy court battles can be diminished and they can concentrate on growing their business, thus boosting the UK economy.

COUNTERFEIT GOODS

Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd and others, Nokia Corporation v Her Majesty's Commissioners of Revenue and Customs - Joined cases C-446/09 and 495/09, 1 December 2011

The CJEU has issued a preliminary ruling in respect of two queries referred in joined cases by the English Court of Appeal and the Belgian Court of First Instance in relation to criteria for the legitimate detention of goods and the determination of whether these goods are counterfeit.

In relation to the question referred by the English court, the CJEU ruled that in order for the detention of goods to be legitimate, customs authorities must have evidence that intention (on the part of the manufacturer, importer or distributor) is for these goods to be placed on the market in the EU.

In response to the Belgian court's question, the CJEU held that the "production fiction" (a legal presumption that goods held under a suspensive procedure were manufactured in the country where they are being held) cannot be applied in order to determine whether goods are counterfeit or pirated under the law of the country in which they are held. Going further, it stated that a remedy for infringement will only be available where the rights-owner is able to prove: (i) that the goods would infringe an IP right applicable within the EU if they were placed on the EU market; and (ii) that the release of the goods in the EU was foreseen.

Although disappointing for rights-owners, the ruling is noteworthy in that it provides detailed guidance as to what must be proved in order to obtain detention and remedies, and the kinds of evidence that will be appropriate.
For the full text of the decision, click here.

PATENTS

Schutz (UK) Ltd v Werit UK Ltd and another [2011] EWCA Civ 1337, 22 November 2011

The Court of Appeal has held that the fact that a replacement exclusive licence had not been registered did not deprive the exclusive licensee of its substantial (£2 million) costs. The purpose of registration was to notify the public of who had claims to rights over the patent, and this had been fulfilled by the registration of the original licence. To deprive the licensee of his costs because of a failure to register something which had no effect on the notice to the public would be unfair and would therefore infringe Article 14 of the Enforcement Directive.

Schütz had obtained a replacement exclusive licence to get round the effects of section 44(3), then failed to register that replacement. However, they have managed to evade the effects of this failure due to the broad provisions of Article 14 of the Enforcement Directive.

The Court of Appeal was clear that the purpose of the registration provision is merely to provide notice to the public of who is claiming rights over the patent, and the public is not entitled to any further details of the agreement involved. Provided this notice is correct, even though the agreement on which the original registration was based has been replaced by an unregistered agreement, it would meet the criteria and therefore to deprive the licensee of costs for non-registration of the replacement agreement would fall foul of Article 14.

For the full text of the decision, click here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 23/12/2011.

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