High Court allows evidence of witnesses to be adduced following guidance laid down for surveys
A recent decision in the Interflora and Marks & Spencer infringement proceedings saw the High Court ruling in favour of Interflora, allowing Interflora to adduce evidence of thirteen witnesses. The court followed the guidance laid down by the Court of Appeal even though the case did not involve a 'survey'. However, the Court of Appeal has overturned the ruling, saying that the judge applied too lax a test and should instead have asked himself whether the evidence was of real value.
Interflora Inc and another v Marks and Spencer plc and another  EWHC 273 (Ch), 21 February 2013
Interflora Inc & another v Marks & Spencer plc  EWCA Civ 319, 5 April 2013
The claimant Interflora Inc ("Interflora") made an application to the court to adduce in evidence the witness statements of thirteen witnesses at a trial of the action scheduled for April 2013. Interflora did not accept that the court's permission was needed to adduce the evidence but, acting cautiously, made the application. The defendant, Marks & Spencer plc ("Marks & Spencer"), disagreed and said that permission was needed and should be refused.
There have been a number of recent judgments relating to the dispute between the parties. Interflora allege that Marks & Spencer infringed Interflora's UK and Community trade marks for the word INTERFLORA by ensuring that advertisements for Marks & Spencer's flowers were displayed when consumers search for "interflora" (and similar terms) using Google on the internet.
Interflora took a number of steps to identify potential witnesses for the trial of the action. The company looked at potential witnesses from among its own customers in the UK and identified 106,006 individuals from its marketing databases. Each individual was sent an email link to a questionnaire which contained a number of questions. A total of 6,866 individuals completed the questionnaire. Of those, 395 were identified as having seen the Marks & Spencer link in response to an internet search for 'interflora'. All were telephone interviewed to determine if they were prepared to be witnesses, which resulted in 56 individuals who were prepared to be contacted again. Each of the 56 was interviewed by Interflora's solicitors (contemporaneous notes of the telephone calls were disclosed to Marks & Spencer's solicitors) and witness statements were obtained from 13 of the individuals.
The parties were in dispute as to whether the exercise was a 'survey' or not. The court concluded that it did not matter whether one called the exercise a survey or not. The only question to be answered by the court was whether permission should be granted to adduce the evidence. Accordingly, was the evidence of the 13 witnesses of value and did the value of the evidence justify the costs involved?
The judge, Arnold J, considered that the evidence was of some value and that the value of the evidence did justify the cost. He granted Interflora permission to adduce the evidence of the 13 witnesses.
Concerning value of the evidence, the judge agreed with Interflora that the witness evidence provided evidence of confusion which was regarded as highly relevant in trade mark and passing off cases
While Marks & Spencer said that the evidence was not representative of the legal construct through whose eyes the question of likelihood of confusion falls to be assessed, the judge rejected this argument. Claimants had never been required to show that the confused witnesses were statistically representative of the consumer population. In addition, Interflora had explained its witness gathering procedure in detail and had provided full disclosure of relevant documents. Interflora had thus provided full transparency.
On costs, the judge examined costs incurred by the parties to date and anticipated costs to end of trial and concluded that the costs of the witness evidence appeared to be no more than 5% of the total costs of the litigation. Therefore, he concluded that the value of the evidence justified the costs involved.
Marks & Spencer appealed the decision. On 16 April 2013, the Court of Appeal ruled that the judge had mischaracterised the evidence by labelling it evidence of "actual confusion". It was not: the question asked of the witnesses (which the Court of Appeal considered an unfair question) was not directed at the actual experience of the witness (it was only to be asked if the interviewee failed to mention a connection between Interflora and Marks & Spencer). There was obvious confusion between past experience of a witness and response to a leading question which was inherent in the way that question was framed. One interviewee even articulated the effect of the question asked, and it was very likely that other interviewees thought it, or did not realise the effect of the question on their answers. Finally, the Court of Appeal said that a judge should not admit evidence of this kind unless the party seeking to call it satisfied him that (a) it was likely to be of real value; and (b) the likely value of the evidence justifies the costs. In the present case, the judge had asked himself whether the evidence was of "little or no value". The Court of Appeal was unable to determine if the judge simply thought that the value would be more than minimal or whether he thought that it would carry real weight. If the latter, it was hard to identify why he thought that. In the Court of Appeal's view, the judge had conducted a flawed analysis of the nature of the application, the quality of the raw data that supported the witness statements, and ultimately applied too lax a test.
The Court of Appeal's ruling makes clear that evidence of "little" or "no value" or minimal value is not sufficient to be admitted. The evidence must be of "real" value as well as likely to justify the costs. The Court of Appeal made clear that the days of survey evidence are not at an end. On the contrary, surveys may lead to witnesses of value.
But if the circumstance of the evidence gathering amounts to mere "scratching around for something" and that exercise produces very little, there is good reason to exclude the evidence.
High Court rules that A & E Television's HISTORY channel trade mark is not infringed by Discovery's DISCOVERY HISTORY
The High Court found in favour of the defendant and said that the defendant was entitled to the benefit of the protection conferred by section 11(2)(b) of the Trade Marks Act 1994 - the word HISTORY identifies the characteristics of the goods (namely a channel which provides history programmes) and the addition of the word DISCOVERY serves to distance Discovery's channel from A & E Television's channel.
A & E Television Networks LLC and another v Discovery Communications Europe Ltd  EWHC 109 (Ch), 1 February 2013.
The claimants A & E Television Networks LLC and AETN UK ("AETN") broadcast two very popular channels in the UK, HISTORY (previously known as the HISTORY CHANNEL from 1995 to 2008) and MILITARY HISTORY. The defendant Discovery Communications Europe Ltd ("Discovery") also broadcasts cable and satellite channels in the UK. In 2010 it changed the name of its DISCOVERY KNOWLEDGE channel to DISCOVERY HISTORY.
AETN claimed that the name DISCOVERY HISTORY had caused and would continue to cause deception amongst members of the public who believe the channel is connected with HISTORY (the reputation of HISTORY is such that the addition of DISCOVERY will not dispel deception.
AETN claimed passing off in respect of Discovery's use of the names HISTORY, THE HISTORY CHANNEL and MILITARY HISTORY. AETN also claimed trade mark infringement of its UK word mark THE HISTORY CHANNEL, a Community trade mark ("CTM") THE HISTORY CHANNEL and a CTM for the word HISTORY plus a device consisting of the letter H:
Discovery's logo is as follows:
The High Court ruled that Discovery's use of the name and logo DISCOVERY HISTORY and the abbreviation DISC. HISTORY, the latter used in a TV programme guide, did not infringe either the UK trade mark THE HISTORY CHANNEL, or the CTMs for the same words and the AETN logo incorporating the word "History" above.
Having considered the facts and evidence, the judge said that Discovery had the benefit of the defence available under section 11(2)(b) of the Trade Marks Act 1994 and under Article 12(b) of the CTM Regulation (207/2009/EC):
Section 11(2) (b) states:
"A registered trade mark is not infringed by....the use of indications concerning the kind, quality, intended purpose, value, geographical origin, the time of production of goods or of rendering of services, or other characteristics of goods or services,...";
Article 12(b) of the CTM Regulation states:
"A Community trade mark shall not entitle the proprietor to prohibit a third party from using in the course of trade....indications concerning the kind, quality, intended purpose, value, geographical origin, the time of production of goods or services or of rendering of the service, or other characteristics of goods or services;...".
Firstly, the judge said that Discovery's use of the word HISTORY on its own did not do anything other than identify the nature of its operation (the delivery of history related TV programmes). The judge also said that the addition of the word DISCOVERY serves to distance Discovery's channel from AETN's channel because DISCOVERY identifies the channel with a group of channels from Discovery of which Discovery History is but one.
Equally, the judge said that use of the word HISTORY did not infringe the registered trade marks because of the provisions of section 11(2)(b) and Article 12(b) as the word HISTORY identifies the characteristics of the goods (namely a channel which provides history programmes).
Further, AETN's word History plus device consisting of the letter H was not infringed by Discovery's own logo. The judge did not consider them to be confusingly similar.
Finally, Discovery's use did not amount to passing off of the claimants' names "History", "The History Channel" or "Military History". The judge did not accept that the claimant's marks were invalid (he simply decided that the defendant's actions did not infringe the marks in question) and rejected the defendant's counterclaim for a declaration of invalidity.
The case serves to illustrate the difficulties in pursuing an infringement action where the allegedly infringing mark identifies the characteristics of the goods or services provided (in this case a TV channel providing history programmes) and also the problem of choosing non-descriptive names for products and services.
Spain challenges the EU Regulations relating to the European Patent with Unitary Effect
While Spain challenges the Unitary Patent package yet again, creating further uncertainty over the new regime, the CJEU has finally ruled on the 2012 challenge brought by Spain and Italy, dismissing both countries' complaints concerning legality and fairness of the new framework.
CJEU rules on Italy's and Spain's challenges to the new patent framework
Spain has brought two new actions (CJEU cases C-146/13 and C-147/13) before the Court of Justice of the European Union ("CJEU") challenging the EU Regulations relating to the new European patent with unitary effect. Information relating to Spain's actions has not been made public so no details of the challenges are available.
Spain (along with Italy) previously challenged the proposals before the CJEU (CJEU cases C-274/11 and C-295/11) in 2012 – the challenges related to the validity of the Council decision of March 2011 authorising enhanced cooperation in the area of unitary patent protection. Spain and Italy argued that EU legislation prevented EU Member States from taking advantage of the enhanced cooperation mechanism to create the new patent framework, that EU powers had been misused, that there had been a breach of the condition that enhanced cooperation must be adopted as a last resort only and that as well as infringement of EU law, there had been a disregard for the judicial system of the EU. Advocate General Bot's opinion in December 2012 was that the challenge should be dismissed. On 16 April, the CJEU formally ruled that both countries' complaints should be dismissed – the CJEU said that the Council of the European Union had the necessary competence to use the enhanced cooperation mechanism, there had been no misuse of power, the arguments concerning infringement were unfounded and the process had been properly used.
Although the CJEU has ruled on last year's challenge, Spain's new challenge to the proposals is likely to lead to further uncertainty surrounding implementation of the new regime for patent protection in Europe.
The Supreme Court rules on the meaning of "makes" in section 60(1)(a) of the Patents Act 1977
The Supreme Court has ruled that providing replacement bottles for crates (intermediate bulk containers) used to transport liquids does not amount to patent infringement.
Schutz (UK) Limited v Werit (UK) Limited and Schutz (UK) Limited No 2 v Werit (UK) Limited  UKSC 16
Schutz (UK) Limited ("Schutz") is the exclusive licensee of Protechna and the leading manufacturer of a type of crate, a rigid composite intermediate bulk container ("IBC") used for the transportation of liquids to end users. Werit (UK) Limited ("Werit") sells bottles for IBCs to a reconditioner, Delta Containers Limited ("Delta"). Delta's business is in acquiring IBCs originally manufactured and marketed by Schutz, reconditioning the crates and then selling them on the market.
The IBCs are of a sturdy construction consisting of a metal cage with flexible weld joints which give the IBC its strength and durability. The plastic bottles on the other hand which fit into the cage often may not be reused because of the nature of the liquids transported (residues of toxic liquids may be present) or because the bottles may be physically damaged during transportation. The IBC therefore has a longer life span than the bottle.
Delta, as a reconditioner, acquired discarded Schutz manufactured IBCs, replaced the original Schutz bottles with Werit bottles and offered the cross-bottled IBCs for sale. Schutz objected to Delta's cross- bottling activities and brought proceedings against Werit for patent infringement. (It was common ground that if Delta infringed the patent, then Werit also infringed.) Two issues arose. The principal issue was the meaning of the word "makes" in section 60(1)(a) of the Patents Act 1977 (the "Act") which provides as follows:
" ...a person infringes a patent for a particular product if he makes the product without the consent of the patentee."
(The second issue related to costs sanctions under section 68 of the Act (and the Supreme Court provided some guidance on how the costs sanctions under section 68 of the Act work)).
In the High Court Floyd J held (distinguishing United Wire Ltd v Screen Repair Services Scotland Ltd  4 ALL ER 353) that the cross-bottling did not amount to "making" the product because the inventive concept was embodied in the Schutz cage. The Court of Appeal however, following United Wire, considered that the issue should not be determined by reference to the inventive concept and that cross-bottling did amount to "making" because the Schutz cage ceased to exist once the bottle was removed leaving a component remaining from which a new IBC could be made. Werit appealed.
The Supreme Court unanimously allowed Werit's appeal, concluding that Delta did not "make" the patented product contrary to section 60(1)(a) of the Act.
The Supreme Court said that the word "makes" does not have a precise meaning, it must be interpreted contextually, by reference to the facts of the case, and must be given a meaning which it can reasonably bear. In addition, replacing a constituent part of an article does not mean that the activity involves the "making" of a new article rather than constituting a repair of the original article; the two concepts of making and repair may overlap. That said, repair often involves replacement of one or more constituent parts of a product. The question of whether replacing a part of a patented article constitutes "making" is a matter of fact and degree; in some cases the answer may be clear but the Supreme Court said that the present case was an example of identifying the various factors which apply on the facts, weighing them up and concluding as a matter of judgment whether the alleged infringer does or does not "make" the patented article.
The Supreme Court concluded that several factors indicated that the bottle could be described as a relatively subsidiary part of the patented article such that its replacement did not involve the making of a new article:
- the bottle is a free standing, replaceable component of the patented item and is simply replaced within the metal cage;
- the bottle has no connection with the claimed inventive concept;
- the bottle has a significantly lower life expectancy than the inventive component (the cage); and
- the bottle cannot be described as the main component of the article.
Delta, apart from replacing the article, does not do any additional work to the article beyond routine repairs. Delta, therefore, does not "make" the patented article. Accordingly, Werit does not infringe.
(Concerning United Wire (a case which related to a screen consisting of a frame with wire mesh attached), the Supreme Court said that the facts of the present case could be contrasted with United Wire in that the replacement plastic bottle is a free-standing item of property which does not include or relate to the inventive concept whereas in United Wire the replacement part, a wire mesh system, had no independent identity from the retained part, the frame.)
This decision has implications for companies manufacturing replacements (consumables) for parts of patented articles. However, note that for certain inventions, the inventive concept may be in the replacement itself.
High Court allows use of disclosed documents in other proceedings
What use may a party make of documents which have been disclosed during the course of proceedings after those proceedings have come to an end? This is a question which concerns many litigants. The High Court has considered (i) the circumstances in which disclosed documents may be used in other legal proceedings, and (ii) whether privilege is waived on disclosure of a document which was said might be privileged, was subsequently found to be privileged but which had been used in the proceedings for the purposes for which it had been disclosed..
Dupont Nutrition Biosciences ApS v Novozymes A/S  EWHC 155 (Pat), 7 February 2013
The claimant Dupont Nutrition Biosciences ApS, formerly known as Danisco A/S, ("Danisco") brought a claim in the UK for revocation of the defendant's European patent (UK) No 1 804 592. The defendant ("Novozymes") counterclaimed for infringement of its patent.
However, before the action came to trial, the patent was revoked in proceedings before the European Patent Office ("EPO") and the UK action ended. The applications before the court in the present case concerned terms of the final order to be made on termination of the claim and counterclaim. The principal issue before the court was the use which could be made of documents disclosed in the course of the proceedings for the purposes of other legal proceedings in other jurisdictions.
Civil Procedure Rule ("CPR") 31.22 provides that, unless the court gives permission otherwise or the parties agree, a party to whom a document has been disclosed may use the document only for the purpose of the proceedings in which it is disclosed, except where the document has been read to or by the court, or referred to, at a hearing which has been held in public. The court may under CPR 31.22(2) restrict the use to which the document is put, even where the document has been deployed in court.
The effect of this rule is that once a disclosed document is deployed in the course of a public hearing, the obligation not to use the document is discharged, although the court may rule otherwise. If the document has not been deployed in a public hearing, the document may not be used in other proceedings unless the court or the parties agree.
There were a number of hearings relating to the UK action in the months leading up to the trial date (two of which related to permission to use certain disclosed documents in other proceedings):
- In December 2011, Danisco applied for:
- a stay of the action in the UK pending the revocation decision in the EPO; and
- permission to use a limited selection of documents in specified
proceedings both before the Technical Board of Appeal
("TBA") at the EPO and in other proceedings.
The judge, Arnold J, ruled at the time that a stay was not justified. The UK action was listed for an early trial in March 2012. The judge also refused permission to use the documents in the foreign proceedings. That decision was upheld by the Court of Appeal.
- In January 2012, Danisco applied for:
- specific disclosure of documents from Novozymes.
- specific disclosure of documents from Novozymes.
The application was granted by Morgan J.
- On 2 March 2012, at the pre-trial review:
- Novozymes submitted that the additional disclosure of documents
was proving to be a considerable burden and raised the question of
an adjournment of the trial.
- Novozymes submitted that the additional disclosure of documents was proving to be a considerable burden and raised the question of an adjournment of the trial.
The judge, Arnold J, declined to hear an application for an adjournment in the absence of proper evidence.
- On 8 and 9 March 2012 (two weeks before the trial):
- Novozymes made an application for an adjournment; and
- Danisco said that any adjournment should be on terms including,
inter alia, that Novozymes disclosed documents could be
used by Danisco in the various jurisdictions in dispute (including
The Netherlands, Denmark, Germany and Finland) as well as at the
The judge, Mann J, concluded that Novozymes were in the position of having to ask for an adjournment of the trial due to their own fault and went on to decide that there were special circumstances which justified the use of the disclosed documents by Danisco "in the proceedings relating to EP 1 804 592 and members of that patent family, including in the pending proceedings in the European Patent Office, Denmark, Netherlands, Germany and Finland" subject to the parties using their best endeavours to preserve confidentiality of the documents to the extent the jurisdictions allowed.
The judge said that had "the trial taken place when it was supposed to have taken place the disclosure documents would have been deployed in court and as a result would have been available for use in other jurisdictions...it seems clear to me that it is fair that in the circumstances Danisco should be able to use the documents which it would have been able to use [had] they been deployed at a trial which [Danisco] did not want to have vacated at this point in time...it seems right to me ...that those documents should be deployed." The disclosed documents were duly deployed before the TBA and the patent was revoked in June 2012.
Unfortunately, the wording of the order agreed following the adjournment hearing was not the same as that discussed in the judgment and approved by the judge so Danisco applied for a declaration that it was permitted to use the documents in all proceedings relating to the patent and divisional applications and utility models derived directly and indirectly therefrom, including in future (non-pending) proceedings, in pre- and post- grant proceedings, in proceedings relating to entitlement and in proceedings brought by other companies in the Danisco group. Novozymes submitted that the order was intended to be limited to the then pending proceedings in respect of both the European patent in the TBA and the national designations in the national courts of the EPC countries. Further, Danisco sought an injunction preventing Novozymes from objecting to the use of the documents by Danisco in foreign proceedings.
(During the specific disclosure exercise a privileged document (the "Luna memo") had been disclosed by Novozymes in the non-privileged list of documents. The Luna memo was subsequently identified to Danisco as being privileged (on 23 March 2012) but Danisco by that stage had made several uses of the document in the proceedings (it had been referred to in further information served on 12 March 2012; further information regarding the Luna memo itself had been requested by Danisco by letter on 15 March 2012; and the Luna memo had been referred to in an expert report prepared on the morning of 23 March 2012). Danisco stated that they had no reason to believe, from the contents of the Luna memo, that the memo was privileged.)
The judge, Floyd J, ruled that the documents may be used by Danisco and Danisco (UK) Limited in inter partes proceedings (in courts or patent offices) in Europe in relation to validity and/or infringement of (but not ownership of) patent and related rights in the same family as the patent in suit whether or not the proceedings were pending on 9 March 2012.
The judge also concluded that (i) privilege had been waived in the Luna memo and there was no basis for restricting its further use; and (ii) there were no grounds for granting the injunction sought by Danisco to prevent Novozymes objecting to the admission of the documents in foreign proceedings.
In his conclusions the judge said that the term "patent family" is used by patent offices and patent practitioners to denote a group of related patents and related rights and use of the term to describe only a bundle of national designations would be unusual. He decided that the permission granted was not restricted to EP 1 804 592; the permission was extended to the family of European patent and related rights, including the patent in suit and utility models and divisional patents.
The judge also ruled that the original order was not limited to proceedings which were pending at the date of the order; the permission did not extend to Danisco using the documents to make third party observations (use should be limited to inter partes proceedings only); the documents should not be used in entitlement proceedings (the original order did not contemplate proceedings about ownership which are of an entirely different character to proceedings about validity and infringement); and that use should not extend to other companies in the Danisco group (not only was such use not indicated by the terms of the confidentiality provisions, Danisco had been acquired by Dupont and this would mean much wider use of documents than had been intended under the original order).
Specifically concerning the Luna memo, Civil Procedure Rule Part 31.20 provides that where a privileged document is inadvertently inspected, the document or its contents may only be used with the permission of the court. Two questions arose on the facts. Firstly, Novozymes' solicitor made clear at the time of disclosure that due to the absence of key personnel on holiday some documents on the non-privileged list might later be identified as privileged. Did this mean that privilege had not been waived in the Luna memo? Secondly, was there anything in the document that would put a reasonable solicitor on notice that the document had been disclosed by mistake? The judge said that where documents are supplied for a limited purpose the court may recognise that there has been no general waiver of privilege. However, in this case the Luna memo was being disclosed for the general purposes of the action. Danisco used the document for the purposes for which it was disclosed. No complaint could then be made about the uses to which the document had been put. While Danisco was aware of the possibility that the Luna memo (and other disclosed documents) may be privileged, the proposition that the document was disclosed for a limited purpose could not be justified. Further, Novozymes argued (i) that the Luna memo contained some redactions which Danisco's solicitors should have appreciated meant that the document was privileged; and (ii) that the technical content of the memo (it contained details of tests on E.coli phytase, an enzyme used by Danisco and not Novozymes) should have suggested to Danisco's solicitors that the document was created in connection with litigation and was therefore privileged. The judge disagreed with Novozymes, concluding that privilege in the Luna memo was waived and that Danisco should not be put under restrictions as to its use.
The case shows that successfully applying to adjourn a trial will not necessarily prevent a party's disclosed documents being used in other proceedings which take place after the date originally fixed for the trial.
In addition, extreme care is always required when reviewing documents for disclosure.
Reserving one's position by indicating to the other party that some documents might later be identified as privileged (due to circumstances such as the absence of key personnel on holiday) is not sufficient to prevent waiver of privilege. Further, the parties respective positions in the case appear to have been complicated by the terms of the order handed down at the application to adjourn the trial. It was only on attempting to agree the wording of the order that the parties appreciated the issues raised and it has taken a further hearing to reach resolution.
Copyright protection for functionality of a computer program revisited
Following the ruling of the CJEU in May 2012 on copyright protection for functionality of a computer program, the High Court has now handed down judgment in what is hopefully the final episode of this long standing dispute - functionality of a computer program, programming language and the format of data files used in a computer program are not protected by copyright in computer programs under Art 1(2) of the Software Directive.
SAS Institute Inc v World Programming Ltd  EWHC 69 (Ch), 25 January 2013
SAS Institute Inc. ("SAS Institute") developed analytical software known as SAS (the "SAS System"), an integrated set of programs which enable users to carry out data processing and analysis tasks, including statistical analysis. The core component of the SAS System, Base SAS, enables users to write and run application programs to manipulate data. Such applications are written in a language known as SAS Language. The functionality of Base SAS could be extended by the use of additional components, three of which were relevant to the main proceedings (SAS/ACCESS, SAS/GRAPH and SAS/STAT, referred to together with Base SAS as 'the SAS components').
World Programming Limited ("WPL") created an alternative computer program, the World Programming System (the "WPL System"), which enabled users to run application programs written in SAS language. WPL's intention was to emulate much of the functionality of the SAS components as closely as possible, but WPL did not have access to the claimant's source codes. WPL wanted its customers' application programs to run in the same way on the WPL System as on the SAS components.
SAS Institute sought an order that WPL's actions represented an infringement of its copyright in its computer programs. The English court had previously ruled that it was not an infringement of the copyright in the source code of a computer program for a competitor of the right owner to study how the program functions and then to write its own program to emulate that functionality. (See Navitaire Inc v Easyjet Airline Company (1) and Bulletproof Inc (2)  EWHC 1725 (Ch), 30 July 2004.)
However, SAS Institute challenged that approach and claimed that WPL:
- copied the manuals for the SAS System (the "SAS Manuals") published by SAS Institute when creating the WPL System, thereby infringing copyright in the SAS Manuals;
- in so doing, indirectly copied the computer programs comprising the SAS components, thereby infringing copyright in those components;
- used a version of the SAS System known as the Learning Edition in contravention of the terms of its licences, was thereby in breach of the relevant licence agreements and infringed copyright in the Learning Edition; and
- infringed the copyright in the SAS Manuals by creating its own manual (the "WPL Manual") and some quick reference guides (the "WPS Guides").
The High Court referred a number of questions to the CJEU concerning interpretation of Article 1(2) and Article 5(3) of the Software Directive (91/250/EEC) and Article 2(a) of the Information Society Directive (2001/29/EC). At the same time, the judge expressed his own view that all SAS' claims should be rejected save for the claim that WPL had infringed copyright in the SAS Manual when creating the WPL Manual.
Article 1(2) Software Directive provides that "Protection in accordance with this [Software] Directive shall apply to the expression in any form of a computer program. Ideas and principles which underlie any element of a computer program, including those which underlie its interfaces, are not protected by copyright under this Directive".
Article 5(3) Software Directive provides that "The person having a right to use a copy of a computer program shall be entitled, without the authorisation of the right holder, to observe, study or test the functioning of the program in order to determine the ideas and principles which underlie any element of the program if he does so while performing any of the acts of loading, displaying, running, transmitting or storing the program which he is entitled to do".
Article 2(a) Information Society Directive provides that "Member States are to provide authors with the exclusive right to authorise or prohibit direct or indirect, temporary or permanent reproduction by any means and in any form, in whole or in part, of their works".
In summary, the High Court's referred questions asked (i) [concerning Article 1(2)] ...whether the functionality of a computer program, its programming language and the format of data files used in it to exploit certain of its functions, constituted a form of expression of the program and may be protected by copyright; (ii) [concerning Article 5(3)] ...whether a person who obtained a copy of a computer program under licence may observe, study or test its functioning to determine the ideas and principles underlying any element of the program without further authorisation from the copyright owner, where the person carries out acts covered by the licence but with a purpose going beyond that set out in the licence; and (iii) [concerning Article 2(a) of the Information Society Directive] ...whether reproduction (in a computer program or a user manual) of certain elements described in a user manual constituted infringement of copyright in the user manual.
The CJEU response
The CJEU found that:
- Article 1(2) of the Software Directive must be interpreted as meaning that neither the functionality of a computer program nor the programming language and the format of data files used in a computer program in order to exploit certain of its functions constitute a form of expression of that program and, as such, are not protected by copyright in computer programs for the purposes of that directive; and
- Article 5(3) of the Software Directive must be interpreted as meaning that a person who has obtained a copy of a computer program under a licence is entitled, without the authorisation of the owner of the copyright, to observe, study or test the functioning of that program so as to determine the ideas and principles which underlie any element of the program, in the case where that person carries out acts covered by that licence and acts of loading and running necessary for the use of the computer program, and on condition that that person does not infringe the exclusive rights of the owner of the copyright in that program; and
- Article 2(a) of the Information Society Directive must be interpreted as meaning that the reproduction, in a computer program or a user manual for that program, of certain elements described in the user manual for another computer program protected by copyright is capable of constituting an infringement of the copyright in the latter manual if – this being a matter for the national court to ascertain – that reproduction constitutes the expression of the intellectual creation of the author of the user manual for the computer program protected by copyright.
The case then returned to the High Court for a ruling on how the CJEU's decision should apply in this case.
The High Court decision
Arnold J ruled that all of SAS Institute's claims should be dismissed except for the claim in respect of the WPL Manual.
In response to SAS' submission that the judge's previous conclusion (that WPL had infringed copyright in the SAS manuals when creating the WPL Manual but had not infringed copyright in the SAS Manual by producing the WPS Guides) should be reconsidered, the judge concluded that WPL had infringed copyright in the SAS Manuals by substantially reproducing the manuals in its own WPS Manual (and not to a greater extent than he had previously considered in his first decision). The judge confirmed his conclusion that the WPS Guides did not infringe the SAS Manual.
The judge considered that the CJEU ruling confirmed the English courts' previous decisions that copyright in a computer program did not protect the programming language, its interfaces (specifically data file formats) or its functionality from being copied.
Concerning the programming language and data file formats, the judge considered SAS' submission that both might be protected as copyright works in their own right under the Information Society Directive (since they were not protected under the Software Directive) if they are their author's own intellectual creation but expressed his provisional view that a programming language such as the SAS language was not capable of being a copyright work (many intellectual creations are not works and it was clear to the judge that the programming language had evolved considerably since its origins). If SAS wished to submit further argument and amend its claim to plead that the language and data file formats were distinct works which satisfied the necessary criteria for subsistence of copyright, it was too late in the proceedings to do so now. The judge considered that there was also a question of originality over the data file formats.
Finally, concerning functionality, the judge concluded that the responses of the CJEU made clear that functionality (and programming language and data file formats) was not protected by copyright because it does not constitute "a form of expression" within the meaning of Article 1(2) of the Software Directive. Reproducing the functionality (or language or data file formats) could not therefore contribute to the copying of a substantial part of the program because none of these represented the expression of the intellectual creation of the author of the program following Infopaq International A/S v Danske Dagblades Forening, Case C-5/08.
Concerning whether WPL's use of the Learning Edition fell outside the scope of the terms of the relevant licences, SAS made two allegations of breach; firstly that the Learning Edition was used by more than one employee of WPL (the licence permitted use by one customer) and secondly, that the Learning Edition was used for purposes beyond the scope of the licence. The judge looked at the allegations separately and concluded that:
- it was common ground that the licence extended to use by the customer who was the individual employee who clicked on the "yes" button when installing the Learning Edition and that use by other employees was outside the scope of the licence. However, Article 5(3) entitled WPL to observe, study and test the functioning of the Learning Edition to determine its ideas and principles. It did not matter whether that right was exercised by licensed or unlicensed employees. Article 9(1) of the Software Directive renders null and void any contractual restrictions which are contrary to Article 5(3), including contractual restrictions on the employees exercising the right under Article 5(3); and
- the CJEU said that Article 5(3) entitles a licensee to observe, study or test the functioning of a computer program in order to determine its underlying ideas and principles, that such determination of ideas and principles may be carried out within the framework of acts permitted by the licence and that such acts do not infringe the copyright in the program. The judge said that the 'acts' referred to are the acts of loading, displaying, running, transmitting or storing the program and that WPL did not lose the protection of Article 5(3) due to it performing acts which fell outside the scope of the licence.
Accordingly, the judge said that WPL's use of the Learning Edition was within Article 5(3) and to the extent such use was contrary to the licence terms they are null and void by virtue of Article 9(1) and as a result none of WPL's acts amounted to a breach of contract or infringement of copyright.
This is likely to be the final decision in this long running dispute. It follows the CJEU's response and is consistent with the English court's ruling in Navitaire – it is not an infringement of copyright in the source code of a computer program for a competitor of the right owner to study how the program functions and then to write its own program to emulate that functionality. The decision brings some certainty to the protection of computer programs and, to that extent, is likely to be welcomed by the computer industry – it is clear that copyright does not protect programming language, its interfaces (specifically data file formats) or functionality under the Software Directive.
There remains the question of whether programming language might be protected as a distinct copyright work under the Information Society Directive. The judge's comments cast doubt on the matter but as the point was not pleaded by SAS in the proceedings, the question remains outstanding.
CJEU finds that live internet streaming constitutes "communication to the public"
The CJEU has responded to the High Court on questions referred concerning infringement of copyright in the broadcasting of programmes through live streaming on the internet – "communication to the public" within the meaning of Article 3(1) of the Information Society Directive does include live streaming of programmes over the internet.
ITV Broadcasting Ltd and others v TV Catchup Ltd, Case C-607/11, 7 March 2013
Article 3(1) of the Information Society Directive (2001/29/EC) on the harmonisation of certain aspects of copyright and related rights in the information society (a directive intended to harmonise copyright laws within the EU) provides that:
"Member States shall provide authors with the exclusive right to authorise or prohibit any communication to the public of their works, by wire or wireless means, including the making available to the public of their works in such a way that members of the public may access them from a place and at a time individually chosen by them."
The claimants ("ITV") broadcast television programmes throughout the UK. The defendant, TV Catchup Ltd ("TV Catchup"), offered an internet television broadcasting service which allowed users to receive via the internet live streams of free to air television broadcasts including TV broadcasts transmitted by the claimants. Access to TV Catchups service was limited to those users in possession of a valid TV licence at a location within the UK (users are required to agree to these conditions). TV Catchup's service is funded by advertising.
ITV brought proceedings for copyright infringement, alleging that copyright in broadcasts and films was infringed by TV Catchup's communication of them to the public.
The High Court referred a number of questions to the Court of Justice for the European Union ("CJEU"), in particular:
Does the right to authorise or prohibit a "communication to the public of their works by wire or wireless means" in Article 3(1) of the Copyright Directive extend to a case where:
- A third party (that is to say, an organisation other than the original broadcaster) provides a service whereby individual subscribers within the intended area of reception of the broadcast who could lawfully receive the broadcast on a television receiver in their own homes may log on to the third party's server and receive the content of the broadcast by means of an internet stream?
The CJEU ruled that the concept of 'communication to the public' (within the meaning of Article 3(1) of the Information Society Directive) must be interpreted as meaning that it covers a retransmission of the works included in a terrestrial television broadcast where the retransmission is made by an organisation other than the original broadcaster by means of an internet stream made available to subscribers who log on to the organisation's server even though those subscribers are within the area of reception of that terrestrial television broadcast and may lawfully receive the broadcast on a television receiver.
The CJEU also said that the fact that the retransmission is made by a competitor of the original broadcaster or is funded by advertising and is therefore profit making (as in the present case) does not influence the answer to the question referred.
The response of the CJEU will be welcomed by broadcasters and owners of the content of broadcasts. The ruling that transmission and retransmission of broadcast works will constitute a communication to the public, even if the user is legally permitted to view the original broadcast on television, allows broadcasters and content owners to prevent such transmissions where transmission occurs without their consent. Providers of live streaming services risk copyright infringement if the requisite consents are not obtained.
The case will now return to the English High Court where the CJEU's decision will be applied to the facts of the case.
The German Federal Patent Court refers questions to the CJEU concerning a colour trade mark
This referral concerning colour marks and degrees of recognition may be a case to watch. The questions referred by the German court relate to a colour trade mark for the colour red.
A particular colour of red had been registered as a trade mark since 2007 but had been used by the proprietor Sparkassen in Germany since the 1960s and 1970s as a corporate colour. Santander and Oberbank recently asked the German Patent and Trademark Office to invalidate Sparkassen's trade mark registration. Both banks had used the colour red for their respective logos for some time and both banks were new to the German market. The Federal Patent Court decided to refer several questions to the CJEU for a preliminary ruling. The questions include how well known a particular colour would have to be in order to remain protected as a trade mark and could the CJEU determine the level of recognition required (the number of consumers who would have to understand the colour as the symbol of a particular company).
See: Cases 33W (pat) 103/09 and 33W (pat) 33/12
Amendments to scale costs in Patents County Court claims
A new statutory instrument has been published which amends the scale costs in Patents County Court claims (see the Civil Procedure (Amendment) Rules 2013). A new section IV (Scale Costs For Claims In A Patents County Court) in Part 45 of the rules incorporates the scale costs set out in Table A and Table B of a new Practice Direction supplementing Part 45 (which is yet to be published). The rules, which detail caps on costs for stages of proceedings, came into force on 1 April 2013.
See: The Civil Procedure (Amendment) Rules 2013.
European Commission consults on new technology transfer block exemption and guidelines
The European Commission is consulting on a draft of a new technology transfer block exemption regulation and revised guidelines on the application of Article 101 of the Treaty on the Functioning of the European Union to technology transfer agreements.
Comments are invited by 17 May 2013. The current block exemption regulation will expire on 30 April 2014.
See: MEMO/13/120 Draft Commission Block Exemption Regulation, Draft Commission Guidelines and DG Competition Consultation Page
Trade Marks Rules 2008 and Registered Designs Rules 2008 to be amended by new Statutory Instrument
The Trade Marks and Registered Designs (Amendment) Rules 2013 (SI 2013/444) have been published. These amend the Trade Marks Rules 2008 (SI 2008/1797) (as amended) (Trade Marks Rules) and the Registered Designs Rules 2006 (SI 2006/1975). The new Rules amend the drafting relating to various prescribed periods, in order to correct some drafting defects. As such, the Rules have not been the subject of a consultation.
The new Rules amend how various time periods that refer to particular events are calculated, so that the date on which the relevant event occurred is not included in the calculation.
The new Rules also correct a drafting defect in rule 23(2)(a) of the Designs Rules (under which the registrar may require a person to give security for the costs of any application or appeal if specified conditions apply).
See: The Trade Marks and Registered Designs (Amendment) Rules 2013
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