For the half-year to 31 December 2015, the IPKat's regular team is supplemented by contributions from guest bloggers Jani Ihalainen, Nikos Prentoulis and Mark Schweizer.

Birgit Clark is on Sabbatical till the end of the year

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Sunday, 5 July 2015

Le rouge et le noir: when colour hits the IP headlines

When does a red rose look too much like a red rose?  Not everybody spotted this item in the Scottish press last week, but this Kat is surprised that he did not receive the link from one of his many Scottish readers. It's a piece published in heraldscotland with the title "UK Labour tries to block trademark for Scottish Labour Party". This article, in relevant part, reads as follows:  

Labour councillor Dennis Goldie applied last year to secure the name Scottish Labour Party in the hope it would be used by a new stand-alone organisation. Goldie ... wanted to gift the trademark to the leader of Scottish Labour in the event of a general election drubbing [in which the previously dominant party was left with just a single seat]. He admitted the £500 application to the UK Intellectual Property Office (IPO), which was paid for by a local Labour club, would be a "surprise" to HQ, but said it was "done to be helpful". However the UK Labour Party has now raised an objection with the IPO. ...

Goldie ... applied to register the trademark after realising Scottish Labour had never safeguarded its own name. Covering electronic and printed material, clothing, badges, fundraising, and political activity, the trademark was intended to protect the name being hijacked by opponents. But Goldie was clear he also wanted to obtain the name to make it easier for Scottish Labour to break from UK Labour and become fully autonomous. "In the country at large, there probably is a view that the Scottish Labour Party should be independent of the national Labour Party," he told the Sunday Herald at the time. ...

A Labour spokesman said: "The Scottish Labour Party is at its best when we work together with friends and colleagues across the whole of the UK Labour Party. The old trade union slogan applies to our country as much as to our party - unity is strength."
The Labour arty's election manifesto position on recognition of the importance of intellectual property is summarised here. The red rose, as a badge of political affiliation, is much older than the Labour Party, though, being the symbol of the House of Lancaster in the Wars of the Roses.


The defendant's taxi
When does a black cab look too much like a black cab? We won't know the answer to this question until November, but in the meantime thanks to a hot-off-the-press decision of Richard Spearman QC (sitting as a deputy Judge of the Chancery Division, England and Wales) in The London Taxi Corporation Ltd v Frazer-Nash Research Ltd & Ecotive Ltd [2015] EWHC 1840 (Ch), we do know that the trial Judge will be making his or her mind up in this passing-off action without the assistance of a survey of the views of 1,000 members of the taxi-hailing public.

The claimant's taxi
The claimant (London Taxi Company, LTC) carried out a pilot survey asking 98 Londoners "Do you think there is a connection between the company that makes this vehicle [above, right] and the company that makes this vehicle [left]?". LTC then sought the Court's permission to roll this out to a full 1,000 person survey. The deputy Judge, applying the Court of Appeal's guidance in Interflora 1, Interflora 2 and Zeebox, concluded that the survey failed both the "real value" test and the cost-benefit test. He said that this was a case involving ordinary services with which a Chancery Judge would be familiar, that the survey question breached the Whitford Guidelines [summarised by Lewison LJ in Interflora I] and that the photographs shown to respondents did not show the differences between the vehicles sufficiently or fairly.

This Kat can't help noticing that the photo of the LTC taxi appears to have been taken at night-time and that the photo of the alleged infringer looks as though it was taken towards nightfall, neither of which is the very best time for enabling consumers to highlight differences between the vehicles. Merpel disagrees: she is more likely to want to keep her fur dry by catching a black cab at night and when it's raining -- conditions in which all cats cabs are said to look alike ...

Le Rouge et Le Noir here

Thanks go to Chris Torrero for the first item, and to an anonymous benefactor for the second. Both receive katpats for their services.

Arnold J rules on the Beatles, a documentary on their first US concert ever ... and US fair use

Here Comes the Sun
also for the defendants in this case?
Can the unauthorised use of copyright-protected works amounting to nearly 42' in a 95' film be considered fair use under §107 of the US Copyright Act?

This, together with other issues, is what Arnold J had been asked to determine in Sony/ATV Music Publishing LLC & Another v WPMC Ltd & Another [2015] EWHC 1853 (Ch) (1 July 2015), an intriguing case decided earlier this week, having to do with the Beatles and a documentary concerning their first US concert ever. This was held at the Washington DC Coliseum in 1964, and is considered the beginning of the Beatlemania in the US. On that occasion the group performed 12 songs, including the lovely All my loving. The 35' concert was videotaped for subsequent exhibition at cinemas and theatres across the US.

The documentary is "a skilfully-edited synthesis of three main types of material: the [c]oncert [v]ideo; other archive films and still photographs; and newly-filmed interviews with a number of interviewees." Its narrative is summarised at paras 17 and 18 of the judgment. As highlighted by Arnold J, "[i]t is important to appreciate that the [d]ocumentary incorporates almost the whole of the [o]ncert [v]ideo[para 19].


In 2009 one of the defendants (Iambic) acquired a copy of the master tape of the concert video with the intention of making a documentary of the concert entitled The Beatles: The Lost Concert. Subsequently the rights to the tape were transferred to the first defendant (WPMC).

Between late 2009 and October 2010 Iambic negotiated with the claimants (collectively SATV, holders of the rights to the relevant Beatles songs) for a licence to reproduce and otherwise exploit the works as part of the soundtrack to the documentary. No synchronisation licence was executed as a result of these negotiations.

In 2012 SATV discovered that the documentary was being promoted by a means of a website and a trailer. 

Among other things, SATV brought proceedings in both the UK (where the documentary had been made, and pursuant to the Supreme Court decision in Lucasfilm) and the US (this being the defendants' principal target market).

The defendants did not dispute that, lacking a licence, they had committed acts that infringe UK copyright (with no defences being available).

What Arnold J had to determine was:

(1) Whether (under English law) a collateral contract to grant a synchronisation licence was concluded during the negotiations; 
(2) Whether (under English law), if no collateral contract was concluded, the claimants were estopped from denying that they had granted a synchronisation licence; 
(3) Whether the exploitation of the documentary in the US would be an infringement of the US copyrights in the works, or whether instead the fair use defence would apply [the point under US law is currently being considered also in parallel proceedings in the US].  

Mr Justice Arnold
The judgment

Arnold J concluded in the negative in relation to all three issues.

In relation to the first point, the judge held that no contract could be considered as subsisting between the claimants and defendants. 

As regards the proprietary estoppel point, Arnold J derived from Motivate Publishing that such defence is not available in a case like the one at hand, ie a 'subject to contract' case.

Fair use under US law

In determining whether the use made of the songs could be considered fair use under §107 of the US Copyright Act, the judge started his analysis by recalling the relevant factors, these being:

"(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or value of the copyrighted work."
Besides the US Supreme Court decision in Campbell, Arnold J also recalled Pierre Laval's influential article entitled Toward a Fair Use Standard, in which he held that "the answer to the question of justification turns primarily on whether, and to what extent, the challenged use is transformative. The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original."
As a preliminary point Arnold J also addressed criticisms of the fair use doctrine as "indeterminate and unpredictable". The judge recalled that "[o]ver the last decade, however, work by scholars such as Pamela Samuelson, Barton Beebe and Matthew Sag has demonstrated that what at first blush may appear to be an amorphous mass of individual decisions can be analysed and categorised in the same way as other areas of common law (negligence, for example)." [para 100]
Then Arnold J turned to individual consideration of the four fair use factors, as considered in Campbell.

Not this time
With particular regard to the first three factors, he rejected the claimants' argument that to succeed in a fair use defence, the defendant must show that no more has been taken of the copyright work than is necessary for the transformative purpose. 

According to the judge, "what the defendant must show is that the amount taken is reasonable, and not excessive. If no more is taken than is necessary, then that will be reasonable. The defendant does not have to show that he has taken the minimum necessary, however." [para 107] 

The judge also accepted WPMC's contention that "it can be fair use to copy the whole of the copyright work where this is justified by the transformative purpose, particularly but not exclusively if the copy is not a high quality one (e.g. where an image is reduced in size)." [para 108]

In considering whether the use made of the copyright works [isn't it just so refreshing to read about fair use without seeing references to 'copyrighted' works?] could amount to fair use, the judge held that:

Factor (1) - The documentary amounted to a commercial use of the works, and was partly transformative.

Factor (2) - The copyright works are fully expressive works falling within the core of copyright protection.

Factor (3) - The documentary reproduced the entirety of each of the copyright works. According to the judge in this case "the amount copied is clearly excessive. If the [d]ocumentary had merely used a number of excerpts from the [c]oncert [v]ideo, and hence of the [c]opyright [w]orks, then that might well have been reasonable having regard to the transformative purpose. As it is, however, the Documentary goes well beyond that ...[W]hat WPMC are presenting amounts to a package of the [c]oncert [v]ideo with additional material. Furthermore, there is substantial additional use of the [c]opyright [w]orks as part of the soundtrack. Not only does the usage exceed what is necessary to illustrate the nature and effect of the Beatles' performances of the [c]opyright [w]orks, it exceeds what is reasonable for that purpose" [para 116]

Factor (4) - Here the defendants failed to establish that the documentary would not damage the market for, or potential value of, the copyright works if permitted as fair use. On the contrary, Arnold J considered "likely that this would damage the market for, or potential value of, the [c]opyright [w]orks." [para 118] 

Hence Arnold J concluded that inclusion of the copyright works in the documentary did not amount to fair use. 

Saturday, 4 July 2015

Ukunono, The Battle of the Ukulele Orchestras Plays its Last Tune

Trade marks and their distinctiveness seem to be the cats meow late this week, and this Kat thoroughly enjoyed Jeremy’s wonderful lounge read on the Sofaworks case. The discussion is however far from over, since here comes another case, dealing with something far smaller than sofas: ukulelesThe Ukulele Orchestra of Great Britain v Clausen & Another (t/a the United Kingdom Ukulele Orchestra) [2015] EWHC 1772, decided just a mere two days ago, concerned a UK-based ukulele orchestra, The Ukulele Orchestra of Great Britain (UOGB), who have, since the mid 1980s, garnered some fame due to their unconventional and humorous takes on rock songs through the musical offerings of the ukulele and unusual garb in doing so. They attained this fame especially within the UK and Germany through their eccentric performances.

And as with any classic music related story, a rival must emerge. Yellow Promotions, a partnership comprising of Erwin Clausen and Dieter Tings, operated another ukulele outfit called the The United Kingdom Ukulele Orchestra (UKUO), which was created by Mr. Tings and Peter Moss, a professional musician and part-time ukulele enthusiast. UKUO comprised of British musicians, but was based in Germany.

Ukuleles are a feline favourite
UOGB owns the Community trade mark (CTM) “THE UKULELE ORCHESTRA OF GREAT BRITAIN” (No. 009477341), having registered it for a specific set of services under class 41, namely, the organisation, management, staging and provision of live events, concerts, musical performances, and theatre and stage productions; concert services, orchestra services, production of radio and television programmes; publication of electronic publications relating to music and musical instruments; entertainments services (grouped together as “concert services”), and further in respect of class 9 goods, specifically CDs, DVDs, video and audio tapes.

The matter culminated in UOGB claiming infringement under Article 9(1)(b) and 9(1)(c) of the the CTM Regulation, while also alleging passing off. UKUO counterclaimed under Article 7(1)(b), (c), (d) and (g) of the same Regulations seeking to invalidate the trade mark.

Judge Hacon, after dealing with the relevant case law, initially dealt with the claim of invalidity under Article 7(1)(c) (which included subsection (b) as well). As the case focused on only the concert service and CD/DVD goods in classes 41 and 9, he had to determine whether the mark was distinctive in those goods and service, or if it was merely descriptive. Judge Hacon quickly dismissed UOGB’s arguments to the contrary, and saw that the mark was descriptive for both concert services and CDs and DVDs.

He then turned to considerations under Article 7((1)(d), and denied its application in the case due to the mark’s clear lack of use in the trade of ukulele orchestras, thus potentially monopolizing the terms use in the area. As Judge Hacon saw no evidence of the mark’s use in trade, rendering 7(1)(d) inapplicable, he turned to considerations on acquired distinctiveness.

Having failed the previous two hurdles, the mark could still remain should it have acquired distinctiveness for those goods or services under Article 7(3) of the CTM Regulations. A mark can only acquired distinctiveness, as summarized by Judge Hacon and his review of extensive consideration by Justice Arnold in Europcar, through use as a consequence of which the mark indicates to the relevant class of persons the exclusive origin of the goods or services concerned.  Further, this assessment has to be made in the light of the relevant countries within the European Community, and the respective language of the mark itself. UOGB submitted that they had acquired distinctiveness in 12 European countries, predominantly the UK and Germany, but having performed in several smaller, non-English speaking countries as well such as Sweden and Belgium.

Merpel takes a more relaxed approach to music
Judge Hacon quickly dismissed any claim in distinctiveness in relation to CDs and DVDs, but did accept that the orchestra had acquired distinctiveness for concert services in the UK and Germany. The orchestra then had to establish this in Ireland, Malta, the Netherlands, Denmark, Sweden, Finland, Cyprus, Austria, Luxembourg and Belgium, but due to a lack of evidence (and a failure to present such a case at all, as the Claimant argued the burden of proof was to disprove, rather than to prove, distinctiveness) the mark was swiftly deemed to have not acquired distinctiveness in the relevant countries of the Community.

After the mark had been effectively deemed invalid by Judge Hacon, he still considered the possibility of infringement under Article 9(1)(b) and (c). UOGB did establish a firm case of confusion under Article 9(1)(b), as evidence provided showed several instances of actual confusion between the two orchestras and their concerts. He also accepted that UKUO, should the mark have not been deemed invalid, would have infringed it under Article 9(1)(c), as UKUO’s sign was clearly attempting to take advantage of UOGB’s mark, and its use could have caused detriment to UOGB as a result.

Finally, Judge Hacon turned to UKUO’s defense under Article 12(b), and although UKUO did claim the sign used was merely of descriptive character (which it was deemed to be), their adoption of the mark within honest practices in industrial or commercial matters was placed in doubt by the judge. As the two partners of Yellow Promotions, Clausen and Tings, were fully aware, or ought to have been, of UOGB and had even looked at their website when thinking of a name for their orchestra, they clearly acted outside of honest practices and fell foul of Article 12(b).

Outside of the claims relating to the registered mark, UOGB still had their claims of passing off and copyright infringement of dramatic works. With little extra consideration, Judge Hacon accepted the claim of passing off, as the evidence considered previously clearly established all requisite elements of passing off. Due to specific issues in the establishment of what was sought to be protected as a dramatic work, Judge Hacon dismissed their claim of copyright infringement, as evidence given showed no certainty of what performance was being protected, and not simply a set of elements said to be protectable (such as attire, use of only a single instrument and the inclusion of humorous monologues), thus leaving UOGB’s works beyond the scope of copyright.

Ultimately only the claim under passing off succeeded, and UOGB’s mark was deemed invalid. This Kat is by no means an aficionado of small instruments, and believes the fight was a surprising one, seeing that the market for ukulele performances cannot be that big (readers more inclined in this area of music can correct me here).

Friday, 3 July 2015

Sofa, so good? How to lose both your two trade marks and still come out on top ...

Sitting comfortably?  The Sofa Workshop Ltd v Sofaworks Ltd [2015] EWHC 1773 (IPEC), a 29 June decision of Judge Richard Hacon in the increasingly impressive and cost-effective Intellectual Property Enterprise Court, England and Wales, is impressive not only in its length (123 paragraphs) but also for the fact that the court was able to deal with so many legal and evidential issues in just two hearing days.  For those trade mark practitioners who have imbibed the mantra that, since the big countries in the European Union are quite commercially significant as a proportion of the EU, genuine use of a mark in just one of those countries constitutes genuine use of a CTM, there is something of a surprise in store.

DFS subsidiary Sofa Workshop was a retailer of sofas and other furniture, as was Sofaworks. Sofa Workshop traded under the name “Sofa Workshop” and also owned two Community trade marks (CTMs) for the words SOFA WORKSHOP, which between them covered goods and services relating to various forms of furniture and accessories in Nice Classes 18, 20, 24 and 35. Sofaworks traded under the name “Sofaworks”.

Said Sofa Workshop, given the similarity of trading names and the fact that both businesses were competing in the same market, there was a likelihood of customer confusion. Accordingly Sofaworks both infringed its two CTMs and passed itself off as being associated with Sofa Workshop. No way, said Sofaworks. First, both the CTMs were invalid since the words SOFA WORKSHOP were both descriptive and lacking in distinctive character. Even if they were valid, they were liable to be revoked for non-use on the basis that there had not been a genuine use of those marks within the European Community.

Responding to the allegation of invalidity, Sofa Workshop argued that (i) even if its mark were descriptive and non-distinctive for sofas, that wasn't the case for the other goods for which those marks had been registered, (ii) in any event, its marks had acquired a distinctive character in relation to sofas and (iii) even if its CTMs had not acquired any distinctive character, their specifications could still be appropriately narrowed in order to neutralise the objection by eliminating those goods and services in respect of which they were held not to possess distinctive character.

Judge Hacon delivered a judgment of Arnoldian proportions in which he surprised this Kat and probably more than a few other readers by ruling that the marks were invalidly registered (that's not the surprising bit) and that, if they had been, they would have been liable for revocation for lack of genuine use in the EU (that's the surprise).  However, the last laugh -- if a rather expensive one -- went to Sofa Workshop in that Sofaworks was held liable for passing off.  Taking a closer look at the judgment:

Validity of the CTM registrations

It was not in dispute that the words ‘sofa’ and ‘workshop’, taken separately, had well-established meanings in the mind of the average consumer: a 'sofa' was an item of furniture for sitting on and a 'workshop' was a place where goods are manufactured or repaired and from which they may be sold.

How did the average consumer perceive this combination of words? There was evidence that ‘sofa workshop’ was used as a descriptive term by traders in the sofa business and that another 41 furniture-related businesses in the UK used the word “workshop” in their business names. Sofa Workshop itself used the term ‘workshop’ descriptively in its advertising, to indicate the type of place in which its products were made and also to emphasise the higher quality and greater flexibility in manufacture which was a consequence of the products coming from a workshop. Accordingly both CTMs consisted exclusively of signs which may serve in trade to designate a characteristic of some of the goods for which those marks are registered and were thus invalidly registered.

Had the CTMs acquired distinctive character after they were registered?

There was a great deal of evidence of use of the trade name SOFA WORKSHOP in the UK by Sofa Workshop since 1986. While use of a mark does not necessarily translate into that mark becoming distinctive of the user, in the absence of any other candidate mark by which consumers might identify the origin of the goods or services, the substantial use of a mark is a good start to proving that it has acquired distinctiveness.

This evidence related to use and distinctiveness of the marks in the UK and the judge was therefore satisfied that by 19 May 2014, when Sofaworks filed its counterclaim for invalidity, the mark SOFA WORKSHOP had acquired in the UK a distinctive character in relation to sofas and related goods.

This did not however help Sofa Works. since a mark which is descriptive to a native English speaker is liable to be equally descriptive elsewhere because of the widespread use of English in other Member States of the European Union, including the Scandinavian countries, the Netherlands and Cyprus in addition to Ireland and Malta, where English was an official language. There was no evidence though that the words SOFA WORKSHOP had acquired a distinctive character on account of their use in any of those countries. This being so, there was insufficient evidence to establish validity of the two Community trade marks through the acquisition of distinctive character.

Revocation of the CTMs for non-use

From a review of the case law of the Court of Justice of the European Union (CJEU) and especially the ONEL/OMEL case [Case C-149/11 Leno Merken, noted by the IPKat here], it appeared that the law was as follows: (i) the question of whether there has been ‘genuine use in the Community’ is not to be approached from the perspective of whether there has been use of the mark in more than one, two or any other particular number of EU Member States, since territorial borders are to be disregarded; (ii) a CTM is put to genuine use in the EU where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, and used for the purpose of maintaining or creating market share within the Community for the goods or services covered by the mark; (iii) whether the mark has been so used will depend on all relevant facts and circumstances, including the characteristics of the market concerned, the nature of the relevant goods and services, the territorial extent and scale of use, and the frequency and regularity of use; (iv) purely in relation to the territorial extent of use, genuine use in the Community will in general require use in more than one Member State; (v) an exception to that general requirement arises where the market for the relevant goods or services is restricted to the territory of a single Member State.

Here there was no dispute that Sofa Workshop had put its CTMs to genuine use on an extensive scale in the UK in the five year period before the counterclaim for revocation, but there was no evidence that any of Sofa Workshop’s advertising and advertorial publicity was directed at consumers outside the UK even though it was accessible to them, and there was only evidence of one non-UK sale ever being made.  On that basis the CTMs had not been used by Sofa Workshop in the five year period in order to maintain or create market share within the EU for the goods or services covered by the marks. Consequently those registrations were liable to be revoked.

Amendment of the specifications of the CTMs

In the event that the CTMs were valid and should not have been revoked, the proposals for the narrowing of the specification for the goods and services in respect of which they were registered, on the terms suggested by Sofa Workshop, would have been allowed.


On the evidence and following an extensive review of the law, it was established that, among a proportion of relevant actual consumers, which was well above de minimis although markedly less than half the total, there existed a belief that, because of the similarity between Sofa Worshop’s CTMs and Sofaworks’ trading name, the respective goods of Sofa Workshop and Sofaworks came from the same or undertaking or from economically-linked undertakings. This being so, at least one essential function of Sofa Workshop’s CTMs -- the guarantee to consumers of the origin of the goods or services -- was materially damaged and would be further damaged if the court did not intervene.

It is probable that the same conclusion applied with regard to the functions of Sofa Workshop’s CTMs as providing a guarantee of quality of their goods and services. Consequently, if those marks had been validly registered and had not been liable to be revoked, they would have been infringed.

Passing off

For the reasons stated in relation to whether Sofa Workshop’s CTMs had acquired distinctive character in the UK, Sofa Workshop had goodwill in its business there which was associated in the public mind with its trading name ‘Sofa Workshop’. Notwithstanding the descriptive qualities of that trading name when used in relation to sofas and related goods and services, it had still acquired a secondary meaning in the mind of the relevant British public in England and Wales, as a badge of origin for such goods and services

As to the proportion of the relevant public to which Sofaworks' trade name must constitute a misrepresentation, this had to be sufficient to cause material damage to the goodwill of Sofa Works, as was the case here. Thus, for the reasons given in relation to infringement of the CTMs, Sofaworks’ use of its SOFAWORKS sign resulted in a representation to a proportion of the relevant public in England and Wales that the goods and services of Sofaworks came from a source which was the same as, or was associated in the course of trade with, Sofa Workshop. That proportion was sufficient for Sofaworks’ acts to cause material damage to Sofa Workshop’s goodwill. It therefore constituted a substantial proportion, that is to say enough to warrant a finding of misrepresentation on the part of Sofaworks. Accordingly Sofa Workshop succeeded in its claim for passing off.

Kat comments

Says this Kat, the judge's position on revocation is one on which many people would like to see the Court of Appeal's view, and there is so much law in this judgment as a whole that it should not be difficult for a reasonably competent lawyer to find some slant, some shade of meaning, some nuance, some verbal formula in which the judge "couched" his ruling that would provide a basis upon which to launch an appeal.  However, it is quite likely that this will not happen.

Sofa Workshop may be content to let the decision go since,  after all, the company won the action on the ground of passing off and it may be best advised either (i) to carry on using its SOFA WORKSHOP, teaching the public to think of it as a trade mark and not as a non-distinctive descriptor in all relevant English-speaking countries and then to re-apply for a CTM on the basis of well-evidenced acquired distinctiveness, or (ii) to focus its use on the UK alone and apply for a national trade mark.

Sofaworks may be content to let the decision go too, since the decision on passing off looks rock-solid and the other issues went in its favour. More significantly, the company has already indicated that it would be easier for it to change its name than to appeal, since its attraction for its customers lies in the store's concept rather than in its (descriptive) name and it has already spent some £500,000 in legal fees when defending these proceedings.

Cat-proof sofa here and here
Cat trapped in sofa here
Cat-friendly sofa here

Why Finland is not Silicon Valley: farewell Matti Makkonen, the "father of SMS"

We are a society that worships innovation and idolize those who commercially capitalize on it. Mark Zuckerberg, the late Steve Jobs, Sergey Brin and Larry Page are (or were) all larger than life personalities. Indeed, the fame that each has enjoyed is part and parcel of his commercial success, and vice versa. To analogize to copyright, each enjoys something like moral rights in his respective enterprise, whereby the respective persona of each is intertwined with the business itself, to the extent that a failure to speak of the enterprise in terms of its persona is akin to a violation of his commercial “right of attribution”. While Silicon Valley likes to distinguish itself from Hollywood, the role that glamour plays for both is not so dissimilar. Matti Makkonen, aged 63, passed away this week. His name is probably not known to most Kat readers, even after we tell you that this Finnish engineer was popularly known as the “father of SMS”.

As the story goes, Makkonen proposed the idea of text messaging in 1984 in a pizzeria during a telecoms conference in Copenhagen. At that time, he was working in a senior position in the Finnish Telecoms and Postal Authority. In large part due to Makkonen’s direct involvement, the first 160 character format was developed a year later. The first message was sent in 1992 by Brit Neil Papworth to Vodafone director, Richard Jarvis, at work-related party (“Happy Christmas” was the message). Two years later, following developments in phone hardware, Nokia introduced the first phone that enabled its user to write messages easily. While the use of SMS technology is declining, billions of text messages are still sent each day. No exaggeration here—SMS technology has changed the way that the world communicates with each other.

Given all that, what was the concluding comment that this Kat heard on the radio this week, in reporting Makkonen’s death—“He did not bother to seek a patent for his idea. His wife cannot have been too happy about that.” There we have it—innovation, technology and patents, all for one and one for all. Makkonen, however, did not see the world like that. The one word that described him is “reluctant”. He did not like the nickname that had been given to him—"the father of SMS." In his own (text-messaging) words, “I did not consider SMS as personal achievement but as result of joint effort to collect ideas and write the specifications of the services based on them.” Indeed, for a long time, his name was not even associated with the technology. It took some dogged newspaper reporting to uncover his identity and his connection to SMS technology. Only in 2008 did The Economist magazine award him one of its prestigious Innovation awards.

Makkonen seldom expressed his views in public. All the more intriguing was the “SMS interview” that he had with the BBC in 2012. This Kat sets out below several of Makkonen’s text responses to the questions posed by the BBC interviewer.
“20yrs ago I didn’t see sms as separate issue—it was just a feature in the revolutionary mobile communications system.”
“I don’t think that I made a patentable invention, but was one of the early persons to understand the need and the concept. I’m glad the work was done as part of GSM.”
“In my mind private message of high profile persons should be kept out of public discussion. Privacy belongs to telecommunication as much as to private letters.”
“20 years is long time… I believe that reliable convenient to use text messaging will stay forever. Is not necessary what we call sms. No more pay per message.”
“Not my idea but integration of mobile content display to my eyeglasses. Maybe someone is working with it?”
So we do make of this remarkable innovative life of Matti Makkonen? Start with the issue of patents. One wonders whether the Finnish Telecoms and Postal Agency even had a patent policy in 1984 (in any event, Makkonen was a civil servant at the time, so his personal financial interest in any patent that might have been issued would have been limited). This Kat can already hear Professors Michele Boldrin and David Levine, leading proponents of “the case against patents” position, pointing to the development of sms technology as a good example of where patent protection would have only got in the way of technological development. Pushing back is Makkonen’s own appreciation for the centrality of Nokia in the ultimate adoption of text-messaging, and the role that patents presumably played for Nokia during that period. Indeed, Makkonen joined a unit of Nokia in 2000.

As for his total reluctance to embrace the potential for cultivating celebrity status, part of this Kat finds it so very admirable. But there is also a part of this Kat that recognizes that celebrity status helps contribute to the dynamism that high tech entrepreneurship seems to require to reach its full potential. Without detracting from Makkonen’s accomplishments and his contribution to modern life, maybe that is one of the reasons why Finland is not Silicon Valley, despite the excellence of its educational system, the quality of its engineers and the imagination of its business community.

Friday fantasies

Good day for maple leaf growers? Well, maybe not quite, but the IPKat's friends at the World Intellectual Property Organization (WIPO) have just told him in UPOV Notification 117 that Canada has ratified the International Convention for the Protection of New Varieties of Plants (the UPOV Convention), which comes into effect for Canada on 19 July. A full list of countries that have signed up for this convention can be found here.

Also from WIPO, but this time from our Katfriends in WIPO's Communications Division, comes a request to remind everyone of a couple of things: (i) last week saw the first edition of the new WIPO Wire newsletter, which aims to help busy WIPO-watchers stay abreast of what the organisation is doing, with a short-and-sweet, fortnightly selection of news, features and resources [this Kat understands that the WIPO folk warmly welcome feedback on this initiative from the IP community, so don't be shy to tell them what you think]; (ii) in case you have forgotten, WIPO has revamped its entire suite of newsletter offerings, from the specialist updates on global IP services, to news on various law, policy and cooperation-related programmes. Details are available from a new mailing platform, which makes it easier for users to sign up and manage their preferences. This new central subscription page provides an at-a-glance overview of all the different newsletters on offer.

Just a red herring -- or the ultimate truth?  "The Unitary Patent Package, the Court of Justice, Union Law & a further response to the academics" is the latest salvo in the battle between respected Dutch patent practitioner Wouter Pors (who heads Bird & Bird's Netherlands IP practice) and the equally respected and somewhat more numerous collection of the good and great from Europe's academic and practising intellectual property community, spearheaded by Alain Strowel.   The original shot in this battle, arguing that the new patent package was setting a dangerous precedent since the EU Member States were stripping the Union of its powers, can be read here.  Wouter responded here, to the effect that the critics had got it all wrong. "Oh no we haven't", they responded here.  Dutch IP magazine Berichten IE then asked Wouter to write his surrejoinder, which you can read here.

Ukraine police in big clean-up.  Once upon a time it was money-laundering that everyone was worried about. Now, it seems, something quite different is being "laundered" -- leading brands of washing powder and shampoo.  According to an article in the most recent Petosevic Eastern Europe news letter, authorities from the city of Chernivtsi recently uncovered an illegal production plant where two individuals, having purchased cheap washing powder in bulk through wholesale distributors, repackaged it in plastic buckets weighing 5.6 kg apiece for sale online as a popular consumer brand. The police raided the premises, where they found  6.7 tons of washing powder, not to mention 3,800 shampoo bottles and 210 disposable razor packages. Criminal proceedings were then launched under Article 229 of the Criminal Code, which makes it an offence to trade unlawfully through the use of trade marks, brand names, and appellations of origin. Penalties range from fines of 7,000-11,000 euro to the seizure and destruction of counterfeit goods, equipment and materials used for their production.  Says Merpel, while lighter sentences may be appropriate for people who have a previously clean criminal record, it is possible that the courts may wish to impose a heavier fine in the hope that it will have a detergent deterrent effect on others.

The sight of one hand being registered ..  In "Should EU Courts know national statute law and case law? A comparative reprise", guest Kat Alberto Bellan discussed reactions to the decision of the Court of Justice of the European Union (CJEU) in Case C-530/12 P OHIM v National Lottery Commission, [explained in his earlier Katpost herein which that court set aside a decision of the General Court that had effectively allowed the cancellation of National Lottery's Community trade mark on the basis of evidence which was plainly fake but which was presumptively valid under domestic Italian law. This palpable nonsense has now finally been laid to rest since, on Tuesday, in Case T-404/10 RENV the General Court to which these proceedings was remitted has nullified the cancellation decision of the Board of Appeal -- which was made a full five years ago, following the application for cancellation that was made nearly eight years ago. What a shame that it has taken so long to reach this point, adds Merpel, who hopes that this decision will not be subject to a further appeal. 

German IP blogs.  A reader whom this Kat presumes to be German, or at least German-speaking (though his written English is excellent) has contacted the Kat family to ask if they have any recommendations as to the best German-language intellectual property blogs. This Kat is not a talented modern linguist and, while he has taken an active interest in learning what his German colleagues have been thinking and writing, this has always been on the basis that their blogs have been in the English language.  Accordingly, readers are invited to post, using the comments facility below, recommendations of German-language IP blogs -- whether from Germany, Austria, Switzerland or anywhere else that German is spoken. For the convenience of readers, it would be appreciated if respondents could specify the area(s) of IP covered by recommended blogs if that information is not apparent from the title.  Thanks!

Hero with
conservative leanings
Hero status conferred. Mike Weatherley, Vice Chairman at the Motion Picture Licensing Company, former Conservative Member of Parliament and till recently the IP adviser to British prime minister David Cameron, has been awarded the Hero Award from the Chartered Trading Standards Institute (CTSI) for his impact on consumer protection while in parliament. He recently campaigned in support of the work of local trading standards authorities in tackling intellectual property crime and supported the Police Intellectual Property Crime Unit (PIPCU) and managed to help squeeze an additional £3 million out of the Home Secretary, Prime Minister and Intellectual Property Office in order to secure PIPCU's future until 2017. Well done Mike, says this Kat, who rather liked his Rock the House competition -- an imaginative and not unsuccessful attempt to sensitise British parliamentarians to the importance of fostering a live and growing musical culture based on the existence of fair and enforceable intellectual property rights.

Around the weblogs. PatLit carries two pieces of interest: one, by Michael Thesen, addresses patent claim construction in Germany following the Bundesgerichtshof ruling in Rotorelemente. The other, by Jeremy, looks at a recent judicial comment about the absence of a "long-felt want" argument in a patent obviousness action and asks whether that rule of thumb isn't really a bit obsolete.  Elsewhere, the 1709 Blog picks up a light and readable article by Lucinda Hawksley, a direct descendant of Charles Dickens, on her celebrated forebear's contribution to copyright law reform.

Thursday, 2 July 2015

Icons, flags and the Hazzards of intellectual property toxicity

Many people who had not previously heard of the Dukes of Hazzard TV series (1979 to 1985) are now discovering it via the substantial media coverage attending the decision by Viacom subsidiary TV Land to pull the plug on a current re-run on US screens following the tragic Charleston church massacre (see eg "Dukes of Hazzard pulled from TV screens amid Confederate flag row", here).  The trigger for withdrawing the series was the circulation of photographs of the perpetrator of the massacre, self-confessed racist Dylann Roof, burning the United States' Stars and Stripes flag and posing with the Confederate flag -- the rallying icon of the secessionist Southern States.  

Readers unfamiliar with the Dukes of Hazzard may not understand what this series has to do with all of this: the answer is that the car featured in it, a 1969 Dodge Charger named General Lee after the commander of the Confederate Army Robert E. Lee (left), has a Confederate flag on its roof. The Confederate flag is increasingly being regarded as more than an historical milestone in the United States' long march from a society based on slavery and segregation to one that seeks to reflect the aspirations of that country's Constitution. Some people clearly now see it as a badge of current political thought, of a return to the days of white supremacy, though survey results suggest that more people associate with "Southern pride", which seems to this outsider to be an ill-defined and not specifically offensive concept.  TV Land is not the only business to be anxious about the flag's message, it seems: the National Association for Stock Car Auto Racing (NASCAR) has not banned the flag, but has asked fans to stop flying it.

This Kat has been trying to avoid drawing too many comparisons between the swift responses to the use of the flag when a minority of people find it offensive and the determination of the Washington Redskins National Football League team to hang on to its Redskins brand, notwithstanding the plain evidence that it is offensive to many people, to the point at which the Obama Administration is prepared to prevent the team's return to the Washington DC area.

Merpel wonders about this: what if Dylann Roof had not been shown together with a Confederate flag but with some other potent modern icon? Suppose he was clad head to toe in Lonsdale clothing, or if in each photograph he was shown with a gun in one hand and a bottle of Stella Artois in the other? Would consumer actions have been the same, calling for a ban or some sort of punishment on the brand, or do consumers condemn the wrongdoer but forgive the brand?

The Purrberry: no laughing matter ...
The question is not as silly as it may sound: the Lonsdale brand, on account of its consumers, was in the past linked with far-right politics (see eg here and here), and Stella Artois with wife-beating. Other brands have also been tarnished by association with those who favoured them, such as Doc Marten boots with British skinheads and Burberry by chavs. The Confederate flag is not a brand in the commercial sense, since it is a political symbol rather than a business one -- but both flags and brands attract loyalties and generate passions that are often irrational and difficult, if not impossible, to suppress.

In the real world, there are several options. One can drop the brand or flag entirely; one can swiftly withdraw it and then reintroduce it when the time is right, one can change it for another or one can retain it in its entirety but change its essential message. However, not every option is open for every goodwill- (or illwill-)bearing icon, as the owners of the Washington Redskins and the users of the Confederate flag will soon find out if they do not already know.

Dodge Chargers here 
Charge Dodgers here

Uninsured -- and unregistrable: the OAEE 'victims' mark in Greece

The OAEE (initials for Organismos Asfalisis Eleftheron Epaggelmation) or, roughly, Freelancers’ Social Security Organization is (what else) the Greek State’s social security organization for “freelancers” (this includes lawyers in Greece). Exercising its wisdom (at least in trade mark terms), the OAEE filed (and registered) its logo (below right) as a trade mark in Greece in classes 16, 35, 38 and 44 back in 2009.  

Within the context of the easy breezy situation in Greece, a large number of beneficiaries of OAEE have been unable to pay social security contributions over the past years and have been exposed to the possibility of not receiving OAEE’s health benefits and services and, most probably, have also needed advice as to how to handle their situation legally. This has apparently led to the formation of collectives comprising such beneficiaries in an effort to more robustly pursue their interests.

On February such a group named (again a rough translation) “Panhellenic Group of OAEE un-insured” filed the mark below in Class 45 designating provision of information on legal issues and free legal services. 

This application allowed the Greek TM Office to issue one of its few (if not the first ever – after the 2012 TM law revision) ex officio refusals of a trade mark over famous trade mark infringement.The application was also rejected as misleading and as infringing earlier non-registered rights, namely the indication OAEE as a distinctive title. Unfortunately, the reasoning of the decision is a potpourri of the relevant grounds of refusal doing injustice to all of them. The competent Examiner, not citing the earlier OAEE registered trade mark (!), ruled that it has become a famous trade mark in Greece. Although not expressed, one can infer that the Examiner thought that the very function of OAEE suffices to render the relevant trade mark a famous one.

The decision further reads that due to the dominance of the OAEE letters in both marks, in spite of the difference in the way they are styled and the additional word indications of the later mark, the two marks are similar. This similarity leads, under the decision, to the likelihood that the public would consider there being some form of relationship between the owners of the later mark and the Greek State. This risk of ‘association’ is not categorized by the decision in any of the grounds of refusal set forth and sort of leaves us wondering. For sure, it cannot come under famous trade mark infringement, although it could fall within the ambit of the provisions on misleading marks and marks infringing earlier non-registered rights, as OAEE does not own a trade mark in Class 45.   

An interesting angle is that the right part of the later mark includes words of criticism such as "Victims of OAEE", which could give rise to freedom of expression concerns and a defence over the non-existence of any likelihood of association. Unfortunately, the applicant did not respond to the procedural invitation to submit its observations, so we may never find out if this would make an interesting case. The applicant may still file a recourse action before the Trade Marks Administrative Committee. 

This Kat regularly complains (usually in front of a mirror) of the quality of Greek TM Office decisions, because he feels it is not a very hard task. Still, he would accept the accusation that he nags a lot. The decision in Greek is here.

Allfiled allegations and interim relief: balancing the interests of litigants -- and customers

Another in this Kat's series of not-quite-so-recent cases that he is writing up now because they flashed past him when he was too busy to grasp hold of them a couple of months ago is Allfiled UK Ltd v Eltis & 16 Others [2015] EWHC 1300 (Ch), a 19 May 2015 decision of Mr Justice Hildyard, in the Chancery Division, England and Wales, in an action seeking an interim injunction to stop a total of 17 defendants -- former directors and employees and three companies -- from using its confidential information and intellectual property and from carrying on a trade similar to its own.

Once Allfiled realised that its
employees were missing, it
didn't take too long to find out
Allfiled, a company that had developed technology for the storage of important or confidential personal data, alleged that the defendants, who had all worked in developing this system, had left it in order to set up a new company that was developing and selling a similar product, and to poach Allfiled's customers. Damages were claimed for breach of fiduciary duty and breach of contractual covenants not to compete or to solicit Allfiled's customers. While Allfiled sent letters before action in January 2015, when it realised that it had lost staff and contracts, it delayed for two months before applying to the court -- and even then it only did so on the basis of the proceedings it expected to commence and without having issued a claim form. The defendants said they had used neither Allfiled's confidential information nor its intellectual property. In any event, they argued, the covenants on which Allfiled relied were too broad to be enforceable since that most computer programming companies would, on some level, compete with Allfiled and that the balance of convenience between Allfiled and the various defendants before trial weighed against the grant injunctive relief.

Hildyard J had something to please both parties in his 177-paragraph judgment, since he granted interim relief -- but only in part. In his view:

* Allfiled's basic business idea was clearly the same as that developed by the new company, even if there were differences between their respective technologies. However, competition in itself was not precluded.

* Whether the conduct of departing directors and employees was permissible or not was a fact-sensitive question.

* Allfiled's non-competition and non-solicit covenants were broad; they reinforced obligations which might otherwise be implied, but they did not define what information was properly to be characterised as confidential.

* When considering whether to grant a pre-trial interim injunction, the court had to seek to protect rights and expectations which were arguably enforceable, the breach of which could not be properly compensated by damages, applying the American Cyanamid test of whether there was a serious question to be tried unless there were "extreme circumstances where a trial is rendered plainly and obviously otiose" [para 78].

Well, they were
preparing ...
* Even though Allfiled put a term in its customer contracts that intellectual property rights vested in the customer, the evidence disclosed an at least arguable case raising a serious issue to be tried that the work done in relation to its storage system, and the system itself, was confidential and belonged to Allfiled. If this were so, any use of it by the defendants would be a serious breach of Allfiled's legal rights and a serious breach of an ex-director's fiduciary duty. There was a good arguable case against all the defendants that their implied duties of good faith and fidelity as employees included a duty not to make preparations during their employment to compete with Allfiled after their employment ended, and not to solicit other employees to leave.

* Factors against granting an injunction were that Allfiled might not even benefit from it, since it had lost its entire workforce and was in a perilous financial position, while the new company (Port Tech -- the 15th defendant) appeared interested in only one of Allfiled's customers, Magpie: this meant that leakage of information elsewhere was unlikely and an injunction could even backfire on Allfiled because, if the new company was allowed to continue trading, it was more likely to be able to pay damages than if it was forced out of business.

Some magpies seem quite
well able to look after
their own interests ...
* While those factors were outweighed by several factors in favour of granting injunctive relief, it was still inappropriate to stop the new company developing its storage system and fulfilling its contract with Magpie so long as it did so without the use of any property or confidential information that belonged to Allfiled. Injunctive relief would therefore be granted with that proviso, with Port Tech putting part of its profits in escrow -- and an expedited trial of the proceedings would be ordered.

* Given the court's assessment of the balance of convenience, it was not strictly necessary to consider what should be taken as the status quo for the purpose of the American Cyanamid test. Allfiled had actually delayed seeking relief and, while delay was not of itself fatal to relief, the longer the "last change" had gone unchallenged, the more likely that it would be established as the new status quo. The fact that Allfiled had taken a risk in waiting two months after issuing its first challenge to the defendants was another reason for the provisos in the injunctive relief granted.

This Kat hasn't come across an instance before in which the party seeking interim relief no longer has a workforce to service lost customers and wonders if this has happened before. Since specific performance of contracts of employment and, presumably, directors' contracts, is not an available option, the notion of protecting the interest of Magpie -- not a party but nonetheless represented in these proceedings -- seems only right and proper.

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