Global Forum on IP: Report 3

Three weeks ago, following a hearty lunch during the first day of the Global Forum on IP this Kat made her way to the trade mark parallel session, but as she sat down a shadowy realization (picture, left) begun to creep: she knew that as hard as she tried, she could not face another conference session on Google AdWords. After attending about 6 seminars, one of which she herself presented at, how much more could she learn about the CJEU (ECJ) case and would it be any different to what had come before? A cynical voice thundered saying "No, it won't be. Go to the oft-neglected copyright session, instead." So with the voice booming away, she decided that the copyright parallel session would be the best place for her and her report of that balmy Singaporean afternoon is set out below.

Pirate Bay and the Digital Economy Act: Is the time ripe for an overhaul of copyright law?

Although the session had the Digital Economy Act (DEA) in the title very (very) little was said about the actual Act or the fact it was being judicially reviewed. Professor Hughes, the moderator of the session from the Cardozo School of Law, began the session by expounding on the beginnings of ISP liability and peer-to-peer technology culminating in the Napster and Grokster litigation in the US. This litigation was the impetus for the US legislature and courts to examine ISP liability in the US. This issue is still pertinent 10 years later with the extensive litigation that has been seen in the Pirate Bay litigation - whose service was ordered to be cut off by the Danish and Italian courts. The question has now become whether or not ISPs should be involved in graduated responses, and if so what should their level of involvement be in this response.

Jan Rosén, (picture, left) Professor at Stockholm University stated that the UK, like many other countries in the EU, has instruments of graduated response legislation to stop traffic and to ascertain IP addresses of suspected copyright infringers. This has very much been central to the debate on these issues. Professor Rosén asked whether in this growing system of "copyright abolitionism" we have learned something from piracy and the Pirate Bay case. The simple answer, he says, is that copyright has survived and has come out stronger than ever and Professor Rosen cannot see any alternative to this. He does however, note that stopping internet service has deep issues concerning freedom of expression and privacy.

Professor Rosén acknowledged that copyright is a complex area of law and has been so over the years. In recognition of this increasing complexity and in line with what Mr Justice Arnold said earlier in the morning (see report here), Professor Rosen stated that UK copyright should be amended by a new act. The UK Copyright Act, like the Swedish copyright act, is just layer after layer of amendments which it makes it too difficult to understand or interpret.

It may have been sitting under the halogen lights coupled with her jet lag but the IPKat tuned out for a bit (picture, right - the IPKat warming her whiskers under the lights) and when she looked up again she was staring at a slide entitled ‘Pirate Bays contribution to a contribution…” and that was the end for her for a couple of minutes. She mentally returned to the program when Professor Rosén spoke about whether or not ISPs should benefit from reduced liability due to the social value of their work and business. This argument had been rejected by the the Swedish Court in Pirate Bay. However, the Swedish court did say that liability may be reduced for ISPs because of impassive willfulness due to automation and intense traffic, i.e. being passive and not acting with full responsibility. As the IPKat understood it, any kind of ISP service maybe liable for contributory infringement at least according to the Swedish Appeal Court. This may not fall under willfulness, but it could be argued as being grossly negligent in Sweden suggested Professor Rosen.

Professor Ng-Loy Wee Loon of the National University of Singapore stated that Singapore is also looking to a graduated response type legislation. To rightsholders, graduated response mechanisms are just another enforcement measure -they are not actually getting any additional rights. Professor Loon says she can understand why this is an effective means of enforcement of copyright in an area which is ripe with infringement, i.e., the internet. In Singapore there is a separate police force, the IPR Branch in the Criminal Investigation Department, which enforce IP infringement. But a lot of burden is placed on this branch and the tax payers who pay for the enforcement of a private right.


ISPs similarly have a burden by way of their gatekeeping function. But with this burden comes the benefit of safe harbor provisions; the provisions of which in Singapore are similar to the US model (see AmeriKat reports on the Safe Harbor provisions in the DMCA here). Professor Loon questioned how much further copyright enforcement should go in protecting copyright. She thinks there should be a three-strikes law which should be called "balance-balance-and-balance". The RecordTV v MediaCorp TV Singapore (2010) case was cited. The technology involved the ability of any member of the public being able to register with the plaintiff and following registration could use the system to record the TV programs, i.e. time-shifting. This is permitted by the Singapore Copyright Act under section 114. MediaCorp TV Singapore is the main broadcaster in Singapore and produces television programs like documentaries. The issue before the court was the right of communication to the public. When this case went to the Court of Appeal, there were questions about the scope of communication to the public. Where there is a one–to–one translation, i.e., where the streaming of the broadcast is to the user of RecordTV individually, and not to the public, the court looked at the bigger policy picture. Right at the start of the Court of Appeals judgment, the court asked how the court should strike a “just and fair balance” between all the interests of the affected stakeholders, including the interests of consumers, content providers as well as technology and service venders. They said the balance should come down in favor of the wider public interest, and therefore RecordTV’s service did not involve a communication to the public. Professor Yoon says she is not sure about this aspect of the Court of Appeal’s judgment. She believes the court bended over backwards to make this decision make sense in the favor of balance because the parliamentary debate on this issue seemed to indicate that such a case of RecordTV should fall within the definition of communication to the public. Professor Yoon stated that it may not have been the wrong decision, but it was a very alternative route to get there.

The overall point that came out from the two presentations was that from both Singapore and Sweden alike, even when legislatures craft safe harbors for ISPs, if the judge wants to throw the book at an infringement based model or wish to protect an ISP, they will do so regardless of the legislative intent.

Google Book Settlement

The next session discussed the Google Books Settlement. An IPKat favorite and always entertaining speaker, Mr Tilman Lueder, Head of Unit (Copyright) of the European Commission, (picture, left) the moderator of the session, begun by giving background on the Google Book project. Lueder compared the Google Book Search to the EU’s Europeana project which is “falling behind” because, he says, the EU has a strict copyright system without fair use. Mr. Lueder suggested that if we wanted to facilitate large scale digitization we would have to change the laws and could not leave this in the hands of a private party settlement. Meanwhile, he says he is not so sure that this is Europe's only option any more. The European Commission published an impact study on orphan works and there was no forthcoming consensus as the publishers, users, and the like do not seem to speak the same language. One can be excused in thinking, Mr. Lueder continued, that the Google Book Settlement is not so bad – or at least not as difficult as passing legislation.

Professor Rosén said that this issue was very vast. Now that Google Settlement diminished to only a fraction of its previous incarnation, there is still 50 million works that have been digitized. Something will surely happen with these digitized works. The question is whether we want a global player who has a capacity to offer these large catalogues of works in a private capacity? No collecting society can provide such a big repertoire. A detailed discussion then ensued about the Nordic compulsory licensing system, which this IPKat has such strong views on its un-workability throughout the EU that she unfortuantely automatically stops listening. One could even feel the rest of the audience switch-off as soon as the issue of compulsory licensing was brought up.

Professor Wong stated that she thinks that the Google Book Settlement should be approved. She says that the second version is many ways an improvement on the first especially due to the resolution for the foreign rights owners. Leaving aside the anti-trust issues, she does not believe that dragging the copyright issue to trial would be beneficial. Professor Wong also stated that even though a private company is handling these licences, it may be no bad thing for the US to experience a licensing system. There are some cautions going forward beyond the Google Book Settlement which includes the treatment of orphan works. Professor Wong also stated that it has been frustrating for her that the US legislature has started initiatives dealing with orphan works but they have not gone anywhere. Although not mentioned by name this would include the Shawn Bentley Bill, which this IPKat knows intimately being the subject of her LLM dissertation, which was a good bill but never went anywhere. In addition, proposals for the exemption of Section 108 to the Copyright Act -an exemption for libraries and private individuals - which still has gone nowhere. The Google Book Settlement is one elegant solution in addressing the problem of orphan works.

Professor Hughes (picture, left) from the Cardozo School of Law said the seeds of the Google Book project is that they make money from the Google Book Project, a little fact that Google always seems to forget when promoting the Settlement. Although, doctrinally, there may have been an argument for fair use, politically there is no way there could be fair use. The Statement of Interest from the US government filed in 2008 opposed the first settlement. The Statement of Interest focuses on market dominance of Google. The Department of Justice say they should not achieve anything more than first-mover advantage in scanning the books and then obtaining a licence. The settlement should not do anything more in prolonging market dominance. The recent filing in September 2010 characterized the revised Settlement as a “bridge too far”, which includes the issue of orphan works.

Mr. Lueder asked if orphan work legislation is misguided. The Department of Justice says that the Google Book Settlement is a private agreement substituting for legislation of private rights for members who are not present. This troubles Professor Hughes, and, as readers know ,the AmeriKat greatly (see her post here). Professor Hughes says that the wider issue is what does this project say about the system of publishing in the US as well as the role of libraries. Will we be entirely cutting out the middle-man in all of these processes? Professor Hughes says that if he was a librarian, he would be very concerned about the Google Book Project.

Mr. Lueder says that although we have recognized that we should not have private parties legislate on issues, the difficulty in the orphan works experience in Europe makes such private legislation seem attractive. Professor Hughes says that with the Google Book Settlement in the US we may be seeing a mixture of private settlement with the US Government guiding them in a quasi-legislative role of saying whether the settlement is acceptable or not – the “you are getting warmer, warmer. Nope, now you are colder” game.

Mr Justice Arnold (picture, right), in audience, argued that although Mr. Lueder says that legislation like orphan works is challenging the point surely is to balance the interests and make a judgment as to where that balance lies [a judge would say that, says the IPKat]. Why, said Mr Justice Arnold, does there have be a complete consensus on the legislative issue before legislation is made? Mr. Lueder says that every time they try to strike a balance in proposed legislation, they receive pressure from stakeholders and this constantly makes this legislative process challenging. He said that at times the rights holder community is so strong, that they feel that any strike of balance is an attack on their rights and this holds back the balance. Likewise with the other side of the camp, the IPKat says.

Admittedly, there was one more session in this afternoon but the AmeriKat, having sat under the halogens and suffering from a mean case of jet lag, stalked up to her hotel room to take a 40 minute Kat nap before dinner.

Global Forum on IP: Report 2

Celebrity Leveraging

Robert Raskopf, partner at Quinn Emanuel Urquhart & Sullivan LLP was up after the coffee break discussing the exploitation of celebrity rights in the US. The right of publicity is a state based right without federal law intervention, despite a movement to see a federal statute. The right of publicity allows individuals to control the commercial use of their name, image and the like. The first mention of a right of publicity came from an article written by Justice Brandeis in the Harvard Law Review written over 120 years ago about the right of privacy including, amongst others, intrusion, false light, and public disclosure of private facts. Even back in 1890 the reasons for the establishment of the right of privacy had to do with the encroachment of technology, such as cameras and telephones, on private life. This is the same continuum that we see today.

There are 28 states that have a common law right to publicity and another 19 that have statutory based rights of publicity. The one that has the greatest protection is that of Indiana whose statue protects a person’s right of publicity for 100 years post mortem and extends to a signature, appearance, gesture or mannerism which may indicate that person’s personality. Indiana is also home of Curtis Management (CMG) which includes in its portfolio that of Amelia Earhart, Mark Twain, James Dean and Babe Ruth, which is why we see Indiana with such strong protection. In California, the Astaire Celebrity Image Protection Act passes rights of publicity to heirs with protection at 70 years post mortem. New York, however, is at the other end of the spectrum which has a much narrower protection under Article 5, Section 51 of their Civil Law Statute and by virtue of Pirone v MacMillan where the Second Circuit held that the right derived from privacy and not from publicity, and therefore there were no transferable rights of publicity following death of the individual.

Typically, where the potential plaintiff is domiciled when they die can create a lot of difficulties dependent on the state’s law. The Marilyn Monroe case exemplified this as her domicile was held to be that of New York and not of the claimed California so she lost the right of publicity which had earned her at least $30 million before she died. The lesson being if you are going to die, die in Indiana.

Raskopf cited the case of CMG Worldwide v The Upper Deck Co., Inc case where he acted for the defendant. CMG owns the rights of publicity and is the licensing agent for several deceased Major League Baseball players including Lou Gherig. It had licensed Topps the exclusive rights to use some of these players images. The case was filed in Indiana against Upper Deck who put out a baseball card for every one of the Yankee games including a set which was interspersed amongst the nine other series that they intended to release. The cards had been made and ready for distribution, but CMG obtained an injunction in Indiana Federal Court which meant that they could not ship the cards. The Defendants were able to ascertain that none of the players at issue were resident in Indiana at the time of death and the case was transferred to New York and went on to settle. The Indiana court then denied the temporary restraining order which would have crippled the client’s distribution and business reputation - the cards of which were worth about $100 million. In another case Upper Deck had a licence to use an image of Derek Jeter but didn’t have rights from the MLB to show aspects of his employment including the uniform of the NY Yankees which is owned by the MLB. An injunction was applied for but again was rejected.

At the Supreme Court level there has only been one case of Zacchini v Scripps- Howard Broadcasting Company, otherwise known as the Human Cannonball case where the defendants broadcast the entirety of a 15 second clip of a guy shooting himself out of a canon. Although it was essentially a news report, the entire act had been shown so people would therefore no longer have a reason to go see him in person as they had already seen it.

He stated that there is some resistance from the Media Bar in the move for greater protection of rights of publicity. There was a case of a SuperBowl commercial run by Hyundai in which half of a second of the 30 second ad called "Luxury" showed an image of a Louis Vuitton repeat pattern a basketball. The purpose of this was to show new ideas of luxury. LVMH sued because of the use of this 'semi-logo'. He stated that this action was kind of a way of LVMH controlling their image. He questioned how far one can go in attempting to control an image in such circumstances. Raskopf’s personal point of view is that the First Amendment is more paramount than that of the celebrity’s right to control their image.

Views from the Bench: The Next Ten Years in Intellectual Property

The judges were up next looking into their fuzzy crystal balls for the next ten years in intellectual property. The chair, David Llewelyn, opened up by asking what a collective of judges is called and suggested it is a “gaggle”

Justice Andrew Phang, Judge of Appeal from the Supreme Court of Singapore stated that the body of IP law in Singapore is rapidly growing in comparison to how relatively small the jurisdiction is. The courts are also drawing increasingly on the case law of other jurisdictions and try to read their decisions as wide as possible to develop good principles of IP law for Singapore. There are cases where Singapore do vary including the application of the law of passing off as applied in the House of Lords case of Scandecor. Although they thought it was commercially sensible, there were many concerns about the tort and made suggestions on possible alternatives. Justice Phang referenced the case of City Chase Stores v LVMH – the question was whether the concept of infringing acts had to be “trade mark use” in their code. There are conflicting decisions in other jurisdiction, but the Singapore court said that infringing use had to be trade mark use. ("What is trade mark use in Singapore?", this IPKat wonders.)

Justice Phang stated that the Singapore courts are concerned to make sure that there is consistency of law between different branches of IP law and statutes – the intra and inter-IP harmony. This harmony can be seen in Valentine Corp case where there were at least 2 points of consistency established by the courts including the alignment the concept of confusion both for purposes of registration and for infringement. The court also held that there was no difference for the burden of proof for bad faith for revocation or invalidation.

Judge Joachim Bornkamm, Presiding Judge of the Federal Supreme Court of Germany was next up who stated that in the next ten years, as in the past ten, legislation will play a very small role in IP. This can be shown most clearly in the field of international IP legislation. WIPO has not called for a need for a new international IP law or treaty revision as “one has not dared to change the old treaties.” There is also great difficulty in creating new international legislation as we cannot legislate down IP protection and harmonization has proved very difficult to achieve, which we can see from European legislation where there has been great change, but little harmonization in this area. Judge Bornkamm also spoke on the attitude of judges towards new technology and the continuing need of judges to assess how current law can fit in with new technological advances. The question is no longer just how one can fill in the gaps in legislation with advances in technology but how can one protect the internet from the creation of strict IP laws. Judges, he said, can take for granted the business models developed through the Internet, but the law has to fit to make these business models work. The case about the Google’s image search in Germany was cited. In this case a German painter sued Google for making her images available as thumbnails in the Google Image Searches. The Google Image Search found her images on her website. It was difficult to say why there was not a copyright infringement, but from the start of the proceedings it was clear that the court would not allow this one decision to stop Google’s Image Search, especially when there are technologies to stop search engines from picking up these images. The IPKat says that in the US we see the courts provide similiar decisions which are protective of such business/technological models on the internet. Judge Bornkamm stated that there is a balance that judges are now increasingly faced with striking between protecting rightsholders and the owners of new technologies.

Judge Rader, Chief Judge of the US Court of Appeals for the Federal Circuit said that IP law has fallen dangerously behind technology and the marketplace. He said that we have to recognize that IP is the most important regulatory agent of the new marketplace and control of the future, but IP law has not recognized this importance. This will not be solved by international treaties who are struggling to even be preserved in their old form. In practical terms this means that in the next decade judges need to observe each other’s work in each other’s national courts to determine if one country is going down the path of isolating themselves in the international market place by virtue of their decisions; a self-regulatory check, in a sense. He can’t say that he will be changing his decision to keep them in harmony with the other judges as that would conflict with his oath, but he does think his responsibility includes ensuring that there are not conflicts between IP and its impact on the international market place. Judges will have to take the initiative of facilitating this process. The challenge of the next decade is to use the technology of communication to learn from each other and with that knowledge to approach each other in a way which harmonizes. Judge Radar cautioned that "harmonizes" was not the appropriate word, because our laws are individually different, but that decisions should "reach the goals of harmony without legislation” because the market demands it and we have already fallen too far behind. Judge Rader thinks that it is inevitable that US judges will actually begin to look to international judges and their decisions.

Mr Justice Richard Arnold, UK High Court Judge in the Chancery Division was up next who said that he wants to see WIPO deal with audio-visual performances, a left over issue from the 1990s. He suggested that it is manifest that they should be granted the same level of protection as audio performances. He wants to also see an establishment of a European patent and European patents court, with the latter being the higher priority. The present situation for litigating patents is “deeply unsatisfactory”. European TM Directive and CTM Regulation is also on Arnold J’s list for a complete re-haul and cited the Max Planck’s review and recommendations of these two issues which will be published at the end of January. He stated that the ECJ jurisprudence tells us that the Directive and Regulation are not the best drafted of instrument and thus are ripe for review.

Mr Justice Arnold said that a new copyright act is needed in the UK as the Copyright Designs and Patent Act (CDPA) 1988 is a patchwork quilt of amendments and is a creature of the 1980s. He also wants to see a return to the “traditional British approach to IP with the election of an expert committee to look at the whole of IP with a report, with a White Paper with proposals" and then legislation." This was done for the 1988 act and Mr Justice Arnold says this is a good process, unlike the piecemeal IP reviews we have seen recently. It is better to take the time and it is worth doing. Mr Justice Arnold then gave a brief introduction to the development of the new Patent County Courts (PCC) regime and judge who he says are already making a significant difference to the way IP litigation works . He said the PCC and Colin Birss QC is finally fulfilling the role it was set up to play in providing access to low cost IP litigation.

Hon Robert van Peursem, Vice President of the District Court, The Hague (who was the only one whose picture the IPKat could not find) said that there are three prospects in patent law in the next ten years which include the possibility of a unitary EU patent, enhanced cooperation, and the gradual end of absolute product protection in Europe. The official Commission proposal has been published to move forward with enhanced cooperation now supported by 12 member states including the UK. At present, it is vehemently being blocked by Italy and Spain. Judge van Perusem said that we must establish an EU patent board which would be a giant step forward and which many are working hard to see established. Last year an opinion was requested from the Court of Justice on legality of the Draft Agreement. The Advocates-General Joint Position was leaked which noted 4 problems with this Draft Agreement on the legality of the Patent Court. There is also a suggestion that EPLA could be revived, despite it not being very politically feasible at the moment. He stated that Floyd J’s address at the 15th European Patent Judges’ Symposium in Lisbon in September 2010 stated that in Article 54(5) of the EPC there is a no purpose-limited product claims for non-medical second use which was suggested should be expounded to all second-use claims in general. If we allow purpose-limited product claims which is currently not possible in EU law, the solution could be a product claim with instructions for use for a new and inventive purpose. He also cited the Monsanto decision was where the CJEU gave guidance on Art 9 of the Biotech Directive. (IPKat note: the above was recorded at high speed as Judge van Peursem was speaking, so error may have been made and if so, please let the IPKat know.)

Dr Jiang Zhipei, now-retired Chief Justice of IPR Tribunal of Supreme People’s Court. From January to November 2010, Dr. Zhipei said that there were 39,913 first instance IP case, most of which were copyright cases at 23,304. There were 1,057 cases that concerned foreigners or foreign companies. The number of IP cases has steadily increased in China which will only increase in the next ten years. The new patent act and regime implemented in 2010 will be the development to watch in China in the next ten years to see how the act will affect patent practice in China. The State Council also issued an action plan to address IPR infringement and counterfeit products as a national campaign to protect all IP rights in China.

Something which made the IPKat purr with pride was Judge Bornkamm's ending comment about his use of the “sophisticated reporting of IPKat”. He stated that the enormous amount of information which is free and up to date is making it easier for judges like himself to use the internet to understand what is happening in IP litigation throughout the world. What is beneficial, he said, was that the various jurisdictions which are reported by the IPKat allows him to identify recurrent themes and questions making it to the courts in various countries. Purrrrrr.

Global Forum on IP: Report 1

After a harrowing 20 hours of flight time from New York absent any cat naps, this IPKat made it to Singapore for the IP Academy's 3rd Global Forum on Intellectual Property last week where she spoke on a subject dear to her and the IPKat’s heart – that of IP information overload. Unfortunately, flying from the US necessitated her arriving a day earlier to make it in time for the speaker’s welcome reception where, with a glass of wine in hand, she watched the sky above Singapore’s dazzling city lights break into flashes of light during a tropical thunderstorm. At the time of writing, seated at the back of the impressive Collyer Room at the Fairmont Hotel with laptop in paw, she prepared herself to report on the events, gossip, and intrigue of two days of fiery global IP debate.

In what will be the first of four instalments, the IPKat sets out some events from the first morning below.

Opening

The theme of the conference, “Turbulent Times: Onwards & Upwards for Intellectual Property”, focused on the changing and turbulent financial markets and impact of social media on intellectual property. Before launching into the content of the conference, this IPKat has to mention how incredibly organized and well-produced the conference was; there is nothing like it in the UK or Europe – it really does feel like the Oscars of the IP conference world.

The conference opened with a very impressive video introducing the importance of IP and the IP Academy including a great shot of the Deputy Chairman and External Director of the IP Academy, and the IPKat’s friend, David Llewelyn. David opened the conference by emphasizing the truly global nature of the conference with presentations coming from 35 countries and the increasing importance and development of IP law in Singapore, to whose government he paid tribute to in advancing IP law.

Mr K Shanmugam, Singapore’s Minister for Home Affairs and Minister for Law gave the opening address where he stated that 2010 growth for the region was 8.8% and is projected to continue to grow in 2011 which underpins the shift of gravity to and emphasis on the importance of the Asian markets. Innovation-centric growth in Asia will be a foundation of the growth. IP assets in Singapore represent 60-80% of a business's value, the valuation of which will be now included in all business valuations in the future. In 2010, WIPO opened an office in Singapore which represents the further development of IP in the region as a tool for economic growth. The office provides expert determinations, dispute resolution and training. Singapore was also one of the negotiating parties in the Anti-Counterfeiting Trade Agreement (ACTA). These examples were cited to show the increasing seriousness with which the role of IP plays in Singapore.

Following the opening address, an amusing moment was witnessed by all where the opening speakers placed their hand on a white globe which turned blue upon their unified touch – the IPKat tried to wrangle that globe into one of her carry-on bags but without success.

IP & China: Getting Ready To Rumble in the New Asian Decade

The always pertinent topic of IP and China was the first keynote address given by business school Professor Peter Williamson of the University of Cambridge who focused on three topics: evolving innovation activity in China, trends in Chinese IP rights, and the look to the future. Turning to the first topic, Williamson stated that he has spent 25 years in China working on innovation issues. China was originally focused on cost innovation strategies by using their low costs business model to innovate their business models. He illustrated this by the looking at Digital Direct X-ray Equipment (DDX) whose market was initially dominated by GE and Phillips. These companies used the technology for things such as heart scans with the machines costing around $400,000. Chinese company Zhongxing obtained a variation of the technology from its parent company via a Russian partner. The technology obtained was considered obsolete in the West (the IPKat is not sure what was meant by “obtained”). By using this obsolete technology they re-engineered it to compete with the advanced technology and to then enter the mid-stream market with a machine cost of $20,000. The mid-stream market was a section of the market that the Western companies had not focused in and so Zhongxing was able to become dominant in this section of the market. Williamson rebutted some Western views that taking obsolete technology like this is not innovation because they were not changing or developing new technology, just improving the old. Surely, taking what has come before and improving on it is innovation?

Several similar case studies later, Williamson turned to IP rights in China with a slide on the increasing trend of Chinese companies applying for patents; a trend which is steadily growing. Williamson stated that the granting rates for patents in China were comparable to that in the UK which he seemed to suggest meant that the quality of the patents granted were comparable to that in the rest of the world. The IPKat says just because the number of patents being granted are similar does not mean that the patents are being similarly assessed as they are in the US or Europe. A pie chart was displayed showing that as much as 23% of patents applied for were from academic institutions in China compared with 7% in the US. Why this may be, was not fully discussed so if readers have any thoughts please let the IPKat know. Also, interestingly Williamson stated that the number of co-applicant or collaborate filings in patents is much lower than that in the US.

Williamson concluded his informative talk by saying that the real prize for the future is to take technology from the West and combine with the business and innovation strategies in China to develop products for the global market. Williamson also suggested that companies looking to collaborate with Chinese companies should focus on commercialization of products, not necessarily the innovation of products, because where China has excelled is in the ability to conduct large-scale experimentation in a very short amount of time. He also suggested that Chinese companies will be starting to enter the cross-licensing game which will be a very big growth area in China as the isolation of Chinese innovation begins to end.

The Internet and Copyright – Problem Solved?

The second keynote speech was a fiery debate entitled “The Internet and Copyright – Problem Solved?”. The IPKat wouldn’t have thought there was much debate on this topic given that the answer is surely “no”, but the panelists of Andrew Keen who was described as “Internet Guru and best-selling author” and Harold Feld, Legal Director of Public Knowledge proved to have more to say then just that. Mary Wong from the University of New Hampshire, School of Law moderated the session.

Feld (picture, left) introduced the concept of creative destruction which has seen industries becoming entrenched and resting on the laurels of previous innovations and business models. This entrenchment destroys the future prosperity of innovation as technology advancements leave the old models behind. He argued that we have achieved this model of creative destruction and now no rights holder feels secure and this is a good thing, because it is this anxiety and pressure that results in the pressure to create and innovate. Of course innovators need to be rewarded, so it is important that concepts of copyright be preserved in the digital world but we must reject temptations of those who see business models threatened by putting a stranglehold on the internet and the necessary creative destruction. There is an enormous amount of copyright works being created on the very thing that is “threatening” innovation. Held cited the example of YouTube, where some rightsholders who were threatened by them initially, later embraced the technology and innovation by entering into partnership with them. It would be a shame that in the name of profitability and in the name that no infringement ever takes place, creativity that has flowered on the internet would be completely destroyed. There is a cost of infringement and a cost of creation, and Held submitted that the balance between these two has been achieved.

Keen, citing Lady Gaga (right) as an example, stated that talent like her only dares to be creative and innovative because someone has invested money in her talent for which they are monetarily rewarded later (slightly simplistic, the IPKat suggests). The internet creates a problem where the creative talent has their creative product undermined by the likes of YouTube whose model, Keen stated, was premised on turning a blind eye to IP infringement. Keen thinks that we are turning into a culture of permissive intellectual property infringers and that Larry Lessig’s thoughts on the virtues of a remix culture is incorrect. Keen thinks that the younger generations do not see or understand the consequences of IP infringement and that in order to maintain the heroes of our youth, the kids today must pay for their content. This IPKat is sure many of her generation are very concerned of the need to maintain Lady Gaga’s multi-million dollar lifestyle, despite how much we love her and her music.…..

Feld responded by saying that he has not noticed Viacom going out of business because of YouTube or any other entertainment conglomerates going out of business. Instead they are now working for a living instead of relying on the old days where they had little competition. Keen then asked what companies like facebook are doing for musicians and artists – what are they doing for creative industries? Keen does not think they are doing anything, but anyone who uses facebook knows that musicians, TV programs and artists use facebook as a promotional tool for their fans which surely acts as an aid to creative talents’ bottom line for creativity. Keen states that a free culture is not a viable culture while citing the Wikipedia example and that there is a need to figure out how to monetize these products. Keen also warned of the danger of fetishizing the giving content away for free. Keen also said that cutting out the middle-man in models where artists can self-publish is a shame because the artists cannot just be ‘artists’ but they have to be skilled in self-promotion. Such a business model may mean that people like the Bob Dylan’s of the future may not be as successful because they also have to be marketers.

Feld stated that having grown up in era of public television who make calls for public contribution of money and expertise, he does not see the problem with free culture. Individuals who contribute to Wikipedia do so voluntarily; this does not mean a contributor’s content is being exploited. Wikipedia gives value and asks for value all for free and what is so wrong with this? Feld thinks that there is a large enough group of people who make this sustainable and we should be free to try and maintain this model. This IPKat also adds in response to Keen (picture, left), why is there always a necessity to commoditize and monetize content and business models? Not everything in the world has to necessarily be developed to achieve the consumerists' greatest good - that of achieving a profit.

Feld also argued that one does not strip search every customer leaving your store to ascertain whether they have figured out a creative way of reliving you of some items; the same should apply to the digital environment. Shoplifting for traditional merchants is an expense that has been factored into business models since time immemorial and such should also be factored into models on the internet. The IPKat went up to Feld after the debate and thanked him for this great illustration which she hopes he continues to use and develop in the future.

Want more IP intrigue? The second instalment will be published tomorrow!

Ownership and control of IP: report 3

Following the Ownership and control of IP conference lunch-break solicitor-advocate Bratin Roy (Bristows) emphasised, in "Inventions and Innovations Created by Employees: who owns, who controls?", that the three main concerns raised here are exploitation, compensation and termination. Commercial exploitation depends on having the right to exploit commercially; compensation may be payable where the exploitation is sufficiently profitable, and termination of the employment relationship may trigger competing claims to ownership.

Bratin explained that much depends, under the Patents Act 1977, s.39, on the nature of the duties of the employee and the manner in which those duties are expressed. Thus, for example, a physician's duty is to treat his patients, not to create an invention in order to treat a patient. However, a qualified engineer's duties might create the expectation that he would exercise inventive skills even though his role was managerial. The situation was fluid, not least since a consultant might still be subject to implied duties towards his client that corresponded to the duties owed by the employer to the employee.

The rules relating to copyright were contrasted with those for patents. Under the Patents Act 1977, s.42 any contract in a contract of employment that seeks to give the employer any greater right than its statutory rights is unenforceable, while under copyright an employer can in principle contractually take all rights in all works created by an employee. Confidentiality rules also come into play, particularly at the point at which the employment relationship terminates.

The penultimate speaker, Claire Howell (Aston University), tackled the rules governing the payment of compensation to employees in respect of the outstanding benefit conferred on their employers or even third parties on account of their patented inventions. She gave a bouncy and enthusiastic explanation of both the entitlement of employees to compensation and the means of its assessment in two recent cases known to readers of this weblog, Kelly & Chiu v GE (the Myoview case) and Shanks v Unilever.

Claire's presentation closely analysed the terminology of the Patents Act 1977, s.40, which triggers the entitlement to compensation, to show how difficult it was to bring an outstanding benefit from a patent within the scope of that provision in terms of causation and the potential multiplicity of routes by which the benefit to the employer might be obtained. This is important: for example, a benefit derived from the period of data exclusivity to which the developer of a pharma product is entitled is not derived from any resultant patent, even though it results from the invention which has been patented. Commenting on how hard it is to place a value on intellectual property, especially in the case of a patent for a unique product for which there was no comparable alternative, Claire ran through the list of criteria in s.41 of the 1977 Act which reduce the scale of any compensation to which inventive employees would be entitled.

Finally, David Morris (WilmerHale) addressed the mechanics of actually acquiring IP rights, looking at best practices for buyers and sellers of target assets. He reminded participants that the same rules -- and therefore the same practices -- would not hold for all jurisdictions or for all IP rights. Basic issues such as the accurate identification of the assets being bought and sold and the need for due diligence, were however constant.

David spoke of binding contracts with "gaps", offering flexibility and taking account of timelines while also giving parties the chance to fill in the details subsequently in the light of competition law requirements or other sensitive matters. Waxing lyrical on the joys of due diligence, David contrasted vendor due diligence -- where for example several prospective purchasers are competing to acquire an auction product -- with the real thing, purchaser due diligence which assures the purchaser of the properties it acquires and enables it to ascertain whether it is getting value for money. Lists of IP are handy, showing what is being acquired, when it needs renewal, and so on.

Moving on to formalities, warranties and risk assessment, David reminded the audience of the ease with which registered rights can be dealt with, in contrast with unregistered rights, and the need to comply with statutory requirements such as making sure that copyright assignments are in writing and signed by or on behalf of the licensor (Copyright, Designs and Patents Act 1988, s.90(3)). Indemnities ("a pound-for-pound remedy") were highly praised as a means of guarding against the damage caused by infringing third-party rights. David's Five-Minute Finale consisted of five classic issues:

1. Contractors retain ownership of their IP unless the contrary is established or there's an implied licence;
2. Agreements to assign are not the same as assignments: they need to be implemented or they may confer no more than an equitable entitlement;
3. Shared-use IP: what happens when a group or business sells just part of itself? Some sort of agreement splitting or sharing IP may be needed. Best practice is to agree everything in advance, bearing in mind any possible insolvency risk;
4. Overlapping rights: two or more IP rights can cover the same product. All may need to be addressed;
5. Problem agreements: an agreement may be well drafted and explicit, but it addresses a business objective which has changed and needs changing or updating. Amendments will need consideration.

David also offered a list of Top Tips -- basically, assess the position early, be alert, be cautious, "measure twice, cut once", act quickly once you've made up your mind what to do, and basically be perfect ....

Ownership and control of IP: report 2

Next to speak on the Ownership and control of IP programme was Chris Stothers (Arnold & Porter), on the topic of IP and Abuse of Control. This was a canter through the highways and byways of European competition law, sensitising participants as to the points at which their business arrangements and/or their market dominance might lead to trouble. The key articles of the Treaty that govern IP abuse are Articles 101 (agreements etc which distort or prevent competition) and 102 (abuse of dominant position). Ascertaining that most people in the audience only encountered competition issues on an average of once a year, he observed that, given the potentially pervasive nature of competition rules, they were either very fortunate or in very big trouble. He noted that the European Commission has been trying to encourage private enforcement and damages awards -- these being cheaper for the Commission than having to do the enforcement itself.

Chris took the audience through some of the most significant EU cases involving intellectual property rights, including Magill and Microsoft -- both of which are regarded with little affection by IP lawyers. In Magill copyright was regarded as a barrier to the creation of a market for TV listings magazines, while in Microsoft the same IP right was the subject of a request for easy access so that a competitor could produce interoperable programs to run on its own platform. In each case, it was felt that there was an "exceptional circumstance" that justified the reduction of copyright protection.

Combined with the interoperability case in Microsoft was a further complaint, raised on the Commission's own initiative, that the bundling of Microsoft's Media Player into its Windows package stifled competition for the product. Microsoft was forced to offer an unbundled version of Windows without Media Player as Windows N.

Chris continued with a report on the Commission's sectoral investigation of the pharma industry, which caused huge resentment concerning its deployment of dawn raids. The Commission was hugely critical of proprietary pharma company techniques of life cycle management for products by securing second- and third-generation patents. There were many mistakes in the Commission's preliminary report and it was full of economics and percentages. The final report, in July 2009, was far more restrained.

Nerys Tasker (Olswang LLP) then gave a round-up of some recent UK case law that reflects the tussle between a commissioning body and an author as to where ownership and control of copyright lies. She emphasised the contrast between the position of the employed author, whose IP would generally vest in the employer, with that of the independent party who has been commissioned. She also pointed out that the position is different with regard to commissioned designs.

Starting with Ray v Classic FM, Nerys explained the manner in which a consultancy agreement relating to creation of a classical music playlist was interpreted as leaving copyright with the author, subject to a licence to the radio station to exploit it in the UK -- which was within the contemplation of both parties -- but not beyond that jurisdiction. She then moved on to the dramatic dispute over the copyright in the Doc Martens Airwair logo, in which the designer of the logo was held to have no legitimate interest in the copyright in that logo, given the circumstances in which he was commissioned to create it. The subsequent history of these cases, in Lucasfilms v Ainsworth (the Star Wars stormtrooper helmet case) and in Infection Control v Virrage, was then succinctly explained, along with the application of common law principles regarding the implication of terms that a copyright be licensed or assigned to the commissioning party.

Ownership and control of IP: report 1

Speaking at today's conference on Ownership and Control of IP Rights, Colin Pearson (right, Cleary Gottlieb Steen & Hamilton) gave a broad overview of the key issues relating to the ownership and control of patents, copyrights and other maintstream IP rights. He also raised a number of questions relating to the extent to which the use of trade marks might be controlled without actually destroying the right itself. The elimination of trade marks from use in cigarette marketing -- particularly in Australia -- and possible human rights limitations on the restriction of uses of trade marks consisting of designers' names and pharma products were discussed as cases in point. Other issues touched upon by JIPLP board member Colin included standards-setting arrangements, where FRAND (fair, reasonable and non-discriminatory) licences provide a framework within which the exploitation of IP is limited within industry-settled terms: many of these arrangements are dispute-riven and fraught with competition law problems.

Next up was Nigel Parker (Allen & Overy), speaking on IP joint ventures (JVs) and collaborations. Why enter a JV, he asked. They can reduce risk, rationalise costs, grant access to new markets, serve as a means for each partner to get to know the other better -- perhaps with a view to acquiring it -- and provide access to assets, including IP, which the partner won't sell outright. Quoting a PWC report, Nigel warned of the complexity of JVs: it takes three times as much paperwork, due diligence etc to set up a JV than will be consumed by a merger or acquisition.

Turning to the life cycle of a JV, Nigel reminded us that, at the point you enter into a JV, you must consider each phase of its life including its termination (JVs typically run for 7-10 years, while the IP rights they generate may run for a lot longer). Don't let the commercial pressures to conclude the deal comprise the quality of the actual agreement, he cautioned [the IPKat was delighted to hear this, since so many people keep telling him that comprehensive and accurate drafting is the enemy of the IP business deal]. Keeping control means reducing risk. Background IP rights, which pre-exist the JV and subsist in the hands of the partners, must be carefully considered: are they to be assigned to the JV, or merely licensed -- and what happens to them on termination of the JV? If there is an IP licence, a liquidator might describe it as an onerous licence and disclaim it [says the IPKat, on a recent dispute involving this area, see Butters v BBC here].

Nigel then took participants through a case study, a JV between GSK and Pfizer for the establishment of a world-leading HIV R&D company: one had a number of drug products in the pipeline, the other had the facilities for testing them. Aspects of the deal included variable equity interests, depending on whether the income derived from the background assets of either side.