Update: IT and intellectual property

Development in technology, the internet and how music is accessed and played has, in the past 10 years, led to EU and UK intellectual property (IP) legislation. The convergence of technology has also meant that lawyers far from having to specialise more have needed to broaden their expertise wider within the field.

In the UK the new systems for Intellectual Property Office (IPO),previously the Patent Office, opinions on patents and their mediation service have been well received ((2006) 150 SJ 1422, 03.11.06).

It was decided in the Court of Appeal in Unilin Beheer BV v Berry Floor NV Information Management Consultancy Limited (t/a Responsive Designs and/or Tapis UK), B&Q plc [2007] EWCA Civ 364 that damages for patent infringement awarded by an English court must not be repaid even if the patent is later declared invalid by the European Patent Office (EPO). The Court looked at who has final say in a patent case, a UK court or the EPO. It ruled that when the UK courts system is exhausted and an order is made that damages must be paid, that order cannot be overturned because of actions at the EPO.

At the end of 2006 the Court of Appeal upheld a decision that two computer software patents were void in a rare such case to reach such a High Court. The patents were not well enough drafted '“ see Halliburton [2006] EWCA Civ 1715.

Free online publication and application service

A new patents publication service has been available since 18 June 2007 on the UK- IPO website to allow users to view and download patents on their day of publication. This service has the facility to download all patents published from 1 January 2007.

The UK-IPO is in line with the EPO by making these publications available online and has used similar technologies to provide the new service. Sean Dennehey, director of patents, said: 'This new service responds to an increasing wish amongst users to access patent information online and keeps the UK-IPO at the forefront of the way IP business is conducted in the UK.'

Separately the IPO in June issued a new service on its website. The service allows users to apply for patents online and provide their inventorship information using a web-based interface. Users can also request search and examination of their application in this way.

This new service complements the existing and continuing patents e-filing service which uses the EPO's epoline ® system. Its launch coincides with the first anniversary of the implementation of the Patents Electronic Case System (PECS) which replaced paper case files with electronic ones (www.ipo.gov.uk).

Data protection decision

On 28 March 2007 the Court of Appeal handed down its judgment in Johnson v Medical Defence Union Ltd (No 2) [2007] EWCA Civ 262. It is rare that the Court of Appeal looks at the data protection legislation so this judgment is of particular interest. David Johnson had earlier had his claim for damages for breach of the Data Protection Act (DPA) 1998 dismissed by the High Court and here the Court of Appeal agreed. In the process they examined what is personal data within the DPA. The High Court had awarded him £10.50 for pecuniary loss and £5,000 for distress. However the Court of Appeal held that the information which was selected by a 'risk manager' at the defendant was not 'processing' under the DPA so therefore no damages could be awarded.

Monitoring employee emails

In a recent case before the European Court of Human Rights the Court held that the UK government must pay £3,000 damages and legal costs to Lynette Copland whose emails, phone calls and web use had been monitored by her employers at Carmarthenshire College without her knowing. This was the material fact. Most employers in fact tell employees and/or have a web use policy so would be unaffected by this decision. Here it was held that her rights had been breached under the European Convention on Human Rights Article 8 '“ that 'everyone has the right to respect for his private and family life, his home and his correspondence'. The college had no policy in place at the time informing employees that their communications might be monitored.

Data retention

In April the Home Office published its draft regulations requiring some call data to be kept by telecoms companies for one year. The regulations will implement EU legislation in the UK. The Home Office's consultation runs until 11 June, and the Directive stipulates that the mobile and fixed line phone rules must be in place by 15 September.

Open source: revised licence

Revisions to the open source code licence (GPL) have been published.

Guidance on privacy and electronic regulations

The Information Commissioner's Office (ICO) has issued an updated version of its guidance to the Privacy and Electronic Communications Regulations. Those regulations deal with issues such as sending unsolicited emails and opt in and opt out of emails and are therefore very important in the area of direct marketing. It replaces the original guidance the ICO published some time ago but keeps the same format of Part 1 'Marketing by Electronic Means' and Part 2 '“ the rest of the regulations such as use of cookies and mobile phone location data. However one change is that Part 1 of the guidance is now divided into two documents '“ one is for subscribers/recipients of commercial email and the other part is for marketers.

ICSTIS Code of Practice 11th edition

Ofcom has approved the 11th edition of the ICSTIS Code of Practice. ICSTIS is the premium rate regulator and many IT lawyers need to take as much account of relevant codes of practice as legislation itself.

EU directives codified

The EU has issued codified versions of three directives '“ Directive 2006/114 of 12 December 2006 concerning misleading and comparative advertising, Directive 2006/115 of 12 December 2006 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, Directive 2006/116 of the European Parliament and of the Council of 12 December 2006 on the term of protection of copyright and certain related rights.

Gowers Review

Most readers will have read about the wide ranging Gowers Review of Intellectual Property. Some changes in IP law have already occurred following the review. New powers to help Trading Standards officers against counterfeiting and piracy crime came into force on 6 April 2007. The new powers under the Copyright, Designs and Patents Act, aim to make enforcement of copyright infringement the responsibility of Trading Standards and give officers the power to make test purchases, enter premises and inspect and seize goods and documents.

Malcolm Wicks, MP, science and innovation minister, said: 'The UK film, music and game industries are among the most creative and innovative in the world, but peddlers of counterfeits are costing those industries up to £9bn a year. The taxpayer is also losing out to the tune of £300m. It's a serious offence, whether committed by small-scale hawkers or international crime organisations. IP criminals should know that the UK is not a safe place. The risk of 10 years' imprisonment and unlimited fines is very real and from this date forward a markedly higher risk'. The government says it suspects that all international crime organisations are now involved in counterfeiting and use this as a way to launder money and fund a wide range of criminal activities.

Andrew Gowers' Review of IP, published in December 2006, underlined the importance of effective enforcement. Gowers said: 'The ideal IP system creates incentives for innovation, without unduly limiting access for consumers and follow-on innovators. And it must take tough action against those who infringe IP rights at a cost to the UK's most creative industries'.

Modernisation of patents rules

The IPO has been consulting on rules to modernise patent litigation. The rules are in the draft Patents Rules 2007 and are the first significant reform of the rules governing patents and patent applications for 11 years, and 'is the most wide-reaching reform for almost 30 years,' the IPO says. The new litigation procedures are just one area of proposed change. Others include new provisions to reflect modern working practices such as the electronic filing of patent applications, digital libraries of patent documents available over the internet, and the IPO's recent move to electronic case-files for patent applications. It is hoped the rules will be in force before the end of the year.

Repackaging

Once goods have been put on the market in the 27 EU member states (and the two other European Economic Area countries) they can circulate freely thus enabling traders to buy in one state and export to another. Although importing without permission from the UK trade mark, patent or copyright owner is an infringement and imports can normally be stopped if those goods have been put on the market in any of the 29 countries by the rights owner or with their consent then the import cannot be stopped '“ under the free movement of goods rules of the Treaty of Rome. Controversial proposals in the new EU treaty being debated in June at the date of writing to omit as an objective of the union ensuring an internal market 'where competition is free and undistorted' is unlikely to have an immediate impact.

So keen is the EU to ensure a single market that 'parallel importers' within the 29 states are encouraged and sometimes goods can be repackaged and relabelled. Over the years there have been several important decisions on repackaging. In April 2007 an important decision of the European Court of Justice was handed down in this area. In Case C-364/04 Boehringer and Others v Swingward Ltd there was further clarification of the conditions with which parallel importers have to comply before they may repackage or relabel pharmaceutical products. It also addresses the burden of proof which applies to the parallel importer and the trade mark owner.

Boehringer makes medicinal products. Swingward and Dowelhurst imported them into the UK and altered the packaging and the information leaflets of the products. The alterations varied. Boehringer objected to the alterations and sued in the UK where the case was referred on to the European Court of Justice (ECJ) for clarification on EU law.

Earlier case law has looked at this area and found the following five conditions to apply. Repacking can be done if:

• the repackaging is necessary to market the product in the country of import;
• the repackaging does not affect the original condition of the product inside the packaging '“ so pouring out medicine into other bottles would not be lawful but just removing outer cardboard packaging normally would;
• the new packaging clearly states who repackaged the product and the name of the manufacturer;
• the presentation of the repackaged product is not likely to damage the reputation of the trade mark and its owner (so the repackaging should be done well, not be poor quality); and
• the importer gives notice to the trade mark owner before the repackaged product is put on sale and, on demand, supplies him with a sample of the repackaged product.

The judgment held that:

• the conditions apply to relabelled products in the same way as they apply to repackaged products;
• the first condition only applies to the fact of repackaging and not to the style or manner of repackaging. There is now no need to prove that the way in which the packaging is styled is a requirement of national law in order to carry out a parallel import;
• the fourth condition can apply to repackaging or a label that detracts from the image of reliability and quality attaching to the product, even if it is not defective, of poor quality or untidy. Parallel imports of high-end goods can therefore be challenged if the repackaging or relabelling does not match the standards of the original packaging; and
• the question as to what changes to packaging made by parallel importers are likely to damage the trade mark's reputation (such as not putting the trade mark on the packaging or covering up the original mark by a sticker) is a question of fact to be determined by the national courts.

Also the burden of proof is on the parallel importer to prove that the five conditions are satisfied. In relation to the second and fourth condition, it is enough for the parallel importer to provide evidence that leads to the reasonable presumption that the condition has been fulfilled.

Database right

In case C-215/07: Verlag Schawe the ECJ gave a preliminary ruling on whether copyright and national provisions which provide that an official database (containing a collection of calls for tenders by a German regional authority) does not enjoy sui generis protection, is compatible with Directive 96/9 on the legal protection of databases.

Copyright and Microsoft decision

In terms of legislation there has been a relative period of calm on the copyright front. The EU directives on software, copyright term, fair use type rights (exceptions to copyright) and database right and in place and the UK Copyright, Designs and Patents Act 1988 as amended remains the principal UK legislation. Under the EU competition rules the application of the technology transfer regulation to software copyright licences has not led to any case law and there remains no EU legislation or rules on competition law and other types of copyright licence nor apparently any likelihood of any. However there are always copyright cases which help to explain the legislation. In September the European Court of First instance confirmed Microsoft had abused its dominant market position and required it to make certain information available to competitors.

No copyright in ideas

For a time it appeared easier for rights owners to allege copyright in ideas had been infringed. However the Court of Appeal in Nova Productions Limited v Mazooma Games Limited & Others [2007] EWCA Civ 219 in March upheld a High Court decision that 'merely making a programme which will emulate another but which in no way involves copying the program code or any of the program's graphics is legitimate,' said Lord Justice Jacob. The judgment should be required reading for all computer lawyers.

Da Vinci Code case in Court of Appeal

At the end of March 2007 the Court of Appeal confirmed last year's copyright decision in Michael Baigent and Richard Leigh v The Random House Group Limited [2007] EWCA Civ 247 that the novel the Da Vinci Code was not copied from The Holy Blood and The Holy Grail (HBHG), leaving the claimants with a legal bill which may be up to £3m. The Court of Appeal said that the ideas behind both books were too general to be protected by copyright law. Lord Justice Lloyd concluded: 'what he [Dan Brown] took from HBHG amounted to generalised propositions, at too high a level of abstraction to qualify for copyright protection, because it was not the product of the application of skill and labour by the authors of HBHG in the creation of their literary work. It lay on the wrong side of the line between ideas and their expression.'

Parallel importation of copyright protected materials

In late March 2007 CD WOW! lost a high court case concerning parallel imports of copyright protected CDs from Hong Kong. Most parallel import cases to date have concerned trade marks so this is of particular interest. However it simply confirmed the current law '“ that import without permission from the local rights owner is an infringement. However the company says it will continue its fight despite the £35m award against it taking the matter to the European Court of Justice if it can. The March decision was Independiente and others v Music Trade-Online (HK) Ltd and others [2007] EWHC 533 (Ch). It was found to have breached previous undertaking given to the court about sales of CDs.

Copyright in emails

Under the Copyright Designs and Patents Act 1988 copyright exists in all kinds of written and other materials from the mundane to the literary. In one case the High Court has held that business letters are also protected and that sending them by email without permission can breach copyright unless there is a licence or implied licence to do so. In Cembrit Blunn Ltd Dansk Eternit Holding A/S v Apex Roofing Services LLP and ROY Alexander Leader [2007] EWHC 111 (Ch). The case was principally about the quality of slates supplied but one issue which in fact led to the initial proceedings for intellectual property was whether an internal letter should have been sent elsewhere by email without permission. The claim was issued in July 2005 following the circulation by Apex of an internal letter (the letter) dated 27 February 2004 written by executive vice-president of Dansk. The letter considered and discussed possible settlement of a claim which had by that time been threatened by Apex against Cembrit UK in relation to the slates. The claimants contended that the circulation by Apex of the letter constituted an infringement of copyright and misuse of confidential information and they made an application to restrain further circulation of the letter pending trial. They also sought disclosure of the identity of the person who had provided Apex with the letter. Apex gave undertakings not to circulate the letter further pending judgment or further order but declined to identify its source. It also defended the allegations of infringement of copyright and breach of confidence on the grounds that the use made of the letter was justified to counter false statements made in an earlier letter written by the claimants' solicitors to a number of other people.

The judge said: 'In the light of the evidence and having compared the letter to the earlier works upon which it was based, I have no doubt that its production did involve a substantial degree of independent skill and labour and that it does justify the subsistence of copyright. The effort expended by Mr Jorgensen was clearly significantly more than trivial. . . A comparison of the letter with the documents to which I have referred shows that there are significant differences between them. Moreover, and importantly, the letter sets out Mr Jorgensen's views about Apex'. The judge went on to say that the letter had protection.

Community Trade Mark documents

It is cheaper to obtain a Community Trade Mark (CTM) which covers all 27 EU states rather than pay in individual EU countries for national marks so CTMs continue to grow in popularity. In June 2007 it was announced that correspondence between trade mark agents and the Community Trade Mark Office is now available online. Previously the documents could only be obtained by fax and for a fee. The files make interesting reading. They include letters between the owner of the mark and the CTM office.