Heartache for heartburn drugmaker, though court sweetens the bitter pill

If you're too busy to read all 920 paragraphs of Case T-321/05 AstraZeneca v Commission, delivered today by the General Court of the European Union, let the IPKat help you at least find out what all the fuss is about. Aided only by his native wit and his well-informed friend Stephanie Bodoni (Bloomberg), he can tell you that the day was one of sweetness and bitterness for drug company AstraZeneca.

This morning the European Union's second-highest court [that's the second-highest of two, unless you count the EU's Civil Service Tribunal] upheld the finding of the European Commission that AstraZeneca -- the UK's second-largest pharma company -- misled patent officials and flouted antitrust rules in order to keep a generic competitor off the market. However, the company s fine from 60 million euros to a mere 52.5 million euros [i.e. more or less the cost of buying a good footballer]. The product which AZ had so mischievously sought to keep to itself was Omeprazole, sold as Prilosec and Losec heartburn medicine (among other names).

AstraZeneca had challenged the European Commission's decision back in June 2005 to fine it for market abuse and misleading patent offices in Germany, Belgium, Denmark, Norway, the Netherlands and the United Kingdom, not to mention numerous courts, over Prilosec. While this finding remains unscathed, the General Court [correctly, in this Kat's view] reversed the Commission's finding that AstraZeneca breached EU rules by withdrawing market approvals for older versions of the medicine in Denmark and Norway, thus preventing market entry by generic producers and parallel importers.

The IPKat fancies that there will be an appeal by both sides to the Court of Justice, though this will not be immediate since it takes a long time to read 920 paragraphs, the soccer World Cup is still in full swing and the British interest in Wimbledon Fortnight is not yet ended.

Heartburn in cats here

The Commission's decision (Case COMP/A.37.507/F3 – AstraZeneca) here

How the news was broken by Reuters, Wall Street Journal and the Financial Times

Europe's data czar speaks out over ACTA

Yesterday Peter Hustinx (left), the European Data Protection Supervisor, issued a press statement expressing his disappointment for not being “consulted by the European Commission on the content” of the Anti-Counterfeiting Trade Agreement (ACTA) which was described by the statement as being “an agreement which raises significant issues as regards individuals’ fundamental rights, and in particular their right to privacy and data protection.” Hustinx stated:

"Whereas intellectual property is important to society and must be protected, it should not be placed above individuals' fundamental rights to privacy and data protection. A right balance between protection of intellectual property rights and the right to privacy and data protection should be ensured. It is also particularly crucial that data protection requirements are taken into account from the very beginning of the negotiations so as not later on having to find alternative privacy compliant solutions."

Hustinx also stated that he was concerned regarding the lack of publicly available information regarding the ACTA negotiations (see previous AmeriKat reports here and here) and specifically recommended that a “public and transparent dialogue on ACTA” be established to ensure that its proposals are compliant with EU privacy and data protection requirements.

Last Friday the chapter concerning the allegedly draft provisions of ACTA entitled “Enforcement procedures in the digital environment” was leaked online. The IPKat has summarized some of the key provisions for its readers below:

Section 2 states that each Party to ACTA confirms that civil remedies (as well as limitations, exceptions, or defences with respect to the application of such remedies) are available in its legal system in cases of third party liability for copyright and related rights infringement. “Third party liability” is defined as the liability for any person who “authorizes for a direct financial benefit, induces through or by conduct directed to promoting infringement, or knowingly and materially aids, any act of copyright or related rights infringement by another.”

Section 3 echoes the notice and takedown and Safe Harbor provisions contained in the US’s Digital Millennium Copyright Act (DMCA) (see this IPKat post that outlines the Safe Harbor provisions in action). Section 3 begins by stating that each Party recognizes that individuals using third party online service providers may engage “in copyright or related rights infringement” but that there is also substantial “legal uncertainty with respect to application of intellectual property rights, limitations, exceptions and defenses in the digital environment” which may present “barriers to the economic growth of, and opportunities in, electronic commerce.” The section then states that Parties should provide limitations on a service provider’s liability for infringing activities provided that the service provider:

(1) adopts and reasonably implements “a policy to address the unauthorized storage or transmission of materials protected by copyright or related rights”; and

(2) expeditiously removes or disables access to infringing material upon receipt of legally sufficient notice of alleged infringement.

The only example this document gives of the type of policy to which (1) applies is one that provides for “the termination in appropriate circumstances of subscriptions and accounts in the service provider’s system or network of repeater infringers.” To this Kat, the fact that only one example of a policy was given and this policy mentions “the termination of subscriptions and accounts” of “repeat infringers” points to only to one thing – a “three strike” type rule. If a three-strike policy was the only policy in the contemplation of the drafters at the time of formulating Section 3, how much scope does a service provider really have in formulating a policy that does not include a “three-strike” type rule?

Coincidentally, yesterday the UK Government stated that they were going to abandon the proposal of a “three strike” rule in the proposed Digital Economy Bill. The Guardian reports that following a petition to Number 10 regarding the proposal, the Government now states that it “will not terminate the accounts of infringers – it is very hard to see how this could be deemed proportionate except in the most extreme – and therefore probably criminal – cases." How this new position may affect the UK’s negotiations of Section 3’s conditions on liability limitation is unclear to this Kat.

This Kat will be at tomorrow’s, now sold out, UCL IBIL Brand Seminar - Trade Marks and the Internet (see link here). In the spirit of the issues being discussed at the event, this Kat would be interested to hear anyone’s views on this developing issue of third party service provider liability.

Commission tells IP community, "Forget better legal protection, it's not going to happen"

Via the IPKat's 1709 Blog friend Hugo Cox comes this link to Press Release IP/09/1313 concerning the European Commission's latest take on IP enforcement, "Intellectual Property Rights: Commission comes forward with practical, non-legislative measures to combat counterfeiting and piracy".  

Right: Is the Commission's position a radical innovation or just a polite way of saying "I surrender"?

If they are practical, presumably they are intended to achieve something -- and they are non-legislative there's presumably no need to go through all the hoops imposed by judicial scrutiny. So what are these measures? The IPKat clears his throat and reads:

"The European Commission today [14 September] adopted a Communication on enhancing the enforcement of intellectual property rights in the internal market. The Communication sets out a series of practical initiatives to respond to the dramatic and damaging effect that counterfeiting and piracy is having on EU economies and on society in general [How curious that 'economies' and 'society' are mentioned, but not 'rights owners' -- it's almost as though IP is a public resource, like water or fuel, rather than private property]. The Commission is proposing to complement the existing legal framework by more focused enforcement through greater collaboration between the private sector, national authorities and consumers, throughout the internal market.

Internal Market and Services Commissioner Charlie McCreevy said: " The EU is home to some of most successful businesses in the world [and to some of the least successful. So what?] who consider intellectual property rights to be amongst their most precious commercial possessions. Intellectual property rights encourage innovation and creativity which results in an essential cycle of business development, knowledge, further innovation and employment [Anotherstandard recitation]. They also offer consumers a reassurance that the products and services they buy are legitimate, reliable and above all safe. Unfortunately, there are always those who will seek to undermine honest intentions. We need to stop this dangerous trend not by more legislation, but by mobilising stronger collaboration helping us to fight back [Is it really "Not A but B?"  Is there no scope for "Both A and B"? The former is taken as axiomatic]".

Intellectual property rights are a cornerstone of a creative, competitive, wealth-generating, knowledge-based society. Counterfeiting and piracy undermines this position, placing creators, business, jobs and consumers at ever-growing risk through fake products and services that pose a real threat to health and safety [Is the IPKat imagining things, or have the same sentiments just been expressed in the previous paragraph].

The Commission aims to ensure a highly efficient, proportionate and predictable system of enforcement of intellectual property rights, both within and outside the internal market. [Yes, but ...] The current legal framework provides the tools to enforce intellectual property rights in a fair, effective and proportionate way [This rather implies that the current law is fine. No Criminal Enforcement Directive after all, the Kat presumes. And the Commission must be so very, very pleased with the outcome of the ECJ's Class International and Diesel/Montex case law, which guarantees the safe passage of fake and dangerous products over and across the territory of the EU, free from the meddlesome interference of those busybody IP rights owners, so tactlessl disenfranchised in the first paragraph of this missive].

Complementing legislation, the actions in this Communication aim to:

* support enforcement through a new EU Observatory on counterfeiting and piracy which will bring together national representatives, private sector experts and consumers to work to collect data on and analyse the scope and scale of the problem, share information, promote best practices and strategies, raise awareness and propose solutions to key problems [What will this achieve which hasn't been achieved by the past two decades of watching, talking, lobbying, fact-finding, policy-shaping etc between organisations representing rights owners, enforcement agencies etc? Other than to spend more time and resources flying round Europe and eating meals at the consumers' expense, that is];
* foster administrative cooperation across Europe by developing coordination to ensure that more effective exchanges of information and mutual assistance can take place. As a result, Member States are called to designate National Coordinators. An electronic network for information sharing will also need to be available [So long as the Commission doesn't regard information-sharing between victims of infringement as anti-competitive and so long as we can cope with the red-tape of data protection].
* build coalitions between stakeholders to overcome conflicts and disputes, by developing collaborative voluntary arrangements that focus on concrete problems, such as the sale of counterfeit goods over the internet [This assumes that these unspecified voluntary arrangements between stakeholders will be effective against counterfeiters, who will presumably cooperate with them], and are capable to adapt quickly to changing markets and technology. Such agreements can also be more easily extended beyond the EU and become the foundation for best practice at global level.

The Communication results from the Commission's IPR Strategy for Europe adopted last year and builds upon the recent Council Resolution on a comprehensive European anti-counterfeiting and anti-piracy plan".

The IPKat feels singularly depressed at the thought that this is the best we can come up with.  Merpel goes one step further. Imagine, she says, that the reader of this statement is not a legitimate stakeholder but a trader in counterfeit and pirate products: would such a person not feel assured and comforted by this assortment of pious and waffly sentiments?

European Commission to commission research into IP systems

The IPKat notes that the European Commission's DG Internal Market has recently issued two IP-related invitations to tender (both available here).

One concerns patent quality and is described thus:

The European Commission's Directorate-General for Internal Market and Services plans to conclude a contract for a comprehensive study on patent quality. The aim is to study the quality of patent rights with economic analysis in order to propose effective policy solutions for the optimal functioning of the future patent system in Europe considering its objectives to encourage innovation and the diffusion of new technology and knowledge. This should take into account a system with the co-existence of national and European patents, and a future Community patent which is currently being negotiated between Member States.

The other is a wide-ranging study into the trade mark system, described as follows:

comprehensive study on the overall functioning of the trademark system in Europe. The study shall assess the current state of play of the Community trademark system and the potential for improvement and future development. As the Community trademark system is closely linked to national trademark systems, the study shall also evaluate national systems and, in particular, the relation and interaction between the 2 systems, including the need for further harmonisation. The results shall, in particular, serve as basis for future review of the trademark system as a whole and enhanced cooperation between the Office for Harmonisation on the Internal Market (OHIM) and the national trademark offices of Member States.

The IPKat wonders whether the timing of the two so close together is coincidental. The trade marks project in particular is mega - looking across both substantive and more procedural law (and all within the space of a year). Merpel notes the Commission's optimism regarding the fate of the Community patent...

Standard setting antitrust investigation dropped; Canada rejects business method patents

Rambus competition probe to be dropped

Forbes reports that Rambus and the European Commission have reached an agreement that will see the Commission dropping its antitrust probe into Rambus. The investigation has considered whether Rambus abused its dominant position by setting overly-high royalties for licensing DRAM patents that it was alleged were fraudulently set as industry standards. In return, Rambus will cap certain licence fees for 5 years and will ensure any fee cuts benefit the whole market. The agreement still needs the approval of other industry players.

Had this gone the whole way, the IPKat wouldn't have envied the Commission in trying to figure out what 'excessive royalties' are in this situation.



Canada rejects business method patents

Meanwhile, the Inquirer reports that the Canadian Patent Appeals Board has said a firm no to business method patents. Speaking in an appeal against a decision to refuse the registration of Amazon's One-Click method for buying goods online the Board said:

"since patenting business methods would involve a radical departure from the traditional patent regime, and since the patentability of such methods is a highly contentious matter, clear and unequivocal legislation is required for business methods to be patentable."

The IPKat is no fan of providing patent protection for anything as fundamental as business methods and welcomes the decision.

EU copyright licence and a fully private ICANN: a busy couple of days for the InfoSoc Commissioner

InfoSoc Commissioner, Viviane Reding has been busy in the past couple of days.

The New York Times reports that she, together with Meglena Kuneva, the consumer affairs commissioner are putting forward a proposal for a Europe-wide copyright licence. The idea is to facilitate the sale of online content across national borders without the need for distributors to engage with the different copyright laws of up to 27 Member States.

Meanwhile, Commissioner Reding is calling for ICANN to become a fully private and independent company once its agreement with the US Government expires on 30 September 2009. She would like to see this accompanied by a 'G-12 for Internet Governance' which would would include two representatives from each North America, South America, Europe and Africa, three representatives from Asia and Australia, as well as the Chairman of ICANN as a non-voting member.

It's not often that the IPKat finds himself agreeing with the Eurocrats, but on both issues he thinks there is sense in the proposals. He'd like more detail though about the Internet 'G-12'. Will it really be representative? For example, would the membership rotate? How will it take into account the fact that some countries host far more internet activity than others?

More term extension wrangles

The copyright term extension debate is getting even murkier. The BBC reports:

• The Featured Artists Coalition, a new pressure group with members including a number of prominent musicians has said that the current 95 year proposal will be bad for performers and fans. They back a term extension, but call for the copyright to revert to the artist after 50 years
• The UK voted against the European Commission's 95 year proposal on Friday in Brussels. The UK wants to see the extension limited to 70 years.
  

The IPKat is curious about this. He notes that many of the voices in the debate are prominent musicians who aren't the people who the extension is meant to protect. Sir Cliff isn't holding out the begging bowl, nor are the members of Radiohead. What is the view of the session musicians who are said by the Commission to be in need of the extension, the IPKat wonders?

Prospective costs order; term extension - Gowers speaks

How much will it cost? asks Mr Justice Arnold

The IPKat once again thanks Lisa Chiarelli, this time for bringing his attention to the FT’s coverage of the decision by Mr Justice Arnold to require Allen & Overy to declare what its projected costs are in the battle between RIM and Visto.

The decision covers the second case between RIM and Visto. In the first case, A & O racked up over £5m in costs for a five day trial.

Mr Justice Arnold called the current costs system “inadequate and unsatisfactory” and called for a more “proactive” approach to controlling costs.

The IPKat (who would dearly love to see a copy of the decision) says this sounds jolly sensible. It’s fair that the losing party should have to pay costs, but if costs are allowed to spiral out of control then more defendants will be forced to settle, not because they necessarily have a bad case, but rather because of a fear of handing over a blank cheque for costs.

STOP PRESS: the full text of the decision is now available from Bailii here.

Also in the FT

Andrew Gowers’ response to the UK’s volte-face on the copyright term for sound recordings.

Copiepresse runs aground at first instance

The IPKat has just heard from his friend Stephanie Bodoni (Bloomberg) that the copyright infringement action brought by Copiepresse, the Belgian newspapers' association, against the European Commission has been dismissed. Copiepresse alleged that the European Commission was infringing its members' copyright by linking to their articles, seeking a daily fine of 1 million euros (US$1.3 million) -- having already succeeded in a similar action against Google Inc. The Brussels Court of First Instance dismissed the claims, ruling that it lacked jurisdiction to hear the dispute at all: only a European Union court can review whether the EU's executive agency has infringed intellectual property law by posting links and snippets from articles on its websites. said the court:

"It's up to the applicant to go to the European courts which, if they found a violation by the European Communities of intellectual property rights, could order compensation".

Copiepresse is not going to give in without a fight, though. Said Margaret Boribon, the secretary general for Copiepresse: "We will appeal this decision to the Brussels court of appeal".
The IPKat is curious to see what happens next. He thinks that the Belgian court is right on the issue of jurisdiction, but remembers what happened when someone tried to sue the Commission before the Court of First Instance of the European Communities for infringing its trade mark when it adopted the euro sign. The result was not a pretty one.

Good news for Sir Cliff and eBay

Commission adopts extended performers rights

The European Commission has today adopted a proposal for 'extending the term of protection for recorded performances and the record itself from 50 to 95 years'. [Press release here]. This is said to benefit both performers and record companies. This is designed to 'bridge the income gap' when the sound recordings of performances made in an artist's twenties expires when they reach their seventies.

At the same time, the Commission appears to be tinkering with more general copyright protection for musical works. According to the press release:

In addition, when it concerns a musical composition, which contains the contributions of several authors, the Commission proposes a uniform way of calculating the term of protection. Music is overwhelmingly co-written. For example, in an opera, there are often different authors to the music and to the lyrics. Moreover, in musical genres such as jazz, rock and pop music, the creative process is often collaborative in nature. According to the proposed rule the term of protection of a musical composition shall expire 70 years after the death of the last surviving author, be it the author of the lyrics or the composer of the music.

The IPKat isn't entirely sure if he has read this correctly, but it looks like the Commission is proposing to lump together musical and literary authorial works set to music and grant a single term. If this is correct, this goes against our traditional notions of how such works are viewed, and the same logic (of treating both works as one) could conceivably apply elsewhere, such as in judging infringement.

The Commission is also launching a Green Paper on on the long-term future of copyright policy in the knowledge intensive areas. This will cover scientific publishing, the digital preservation of Europe's cultural heritage, orphan works, consumer access to protected works and the special needs for the disabled to participate in the information society.

The IPKat notes that this is another example of IP rights being expanded to the max. For one thing, record companies appear to be getting some sort of slice of the pie. The 95 year term is generous (though the Kat notes that this would be an increasingly common lifespan). He remains unconvinced that recording artists have a right to be remunerated for life. The seeming changes to authorial copyright also go for the maximum by extending protection of the whole work to the last to die of the group (previously different elements of the work could potentially come out of copyright at different times.


eBay wins in US

Things are looking up for eBay. A US District Court held on Monday that the internet auctioneer had not infringedTiffany's trade marks in failing to prevent fake Tiffany goods to be sold through its site. According to the New York Times, the court found that it was the responsibility of trade mark owners, and not online retailers, to police the online sites for infringers. The US decision runs counter to the emerging trend it Europe, where eBay has been found to have infringed in both France and Germany.

The IPKat can't help but compare this to Napster. The difference is though that eBay's business model isn't built on third party infringement. Quite the opposite - it creates bad will if consumers unwittingly purchase 'fake' goods. The whole thing's a bit of a mess though. Will this mean that US eBay will need to be blocked off to European consumers?

Commission report on collecting societies draft; Intel tomorrow

Collecting societies under threat?

The IPKat has been remiss thus far in failing to report on a draft decision from the European Commission which, if adopted, would lead to major reforms of Europe's music collecting societies. According to the Guardian, the draft, which has not yet been signed by EU Commissioner Neelie Kroes, berates the fact that the collecting societies operate as monopolies within their national borders, partitioning the EU market on national lines. It gives the collecting societies 90 days to terminate their agreements and calls on them to cross-license.

The draft has been criticised for not going far enough to break down national monopolies.

The IPKat notes that, from what little information is available, it seems that the Commission isn't too worried about the notion of collecting societies, but rather about the way in which they operate territorially. This territoriality is understandable, since copyright has grown up as a system of national rights with a slightly different focus in the different Member States.

Tomorrow

Tomorrow the Advocate General will deliver his Opinion in Intel v CPM - a UK reference on dilution. The IPKat will endeavour to bring you the lowdown tomorrow - as long as it isn't only in French.

Commission tackles Austrian patent protectionism

The IPKat has just noticed, rather late in the day, that the European Commission has brought an action against Austria for not allowing patent lawyers outside Austria to represent their clients before the Austrian patent office.

right: the IPKat's shy and retiring distant Austrian relation, the Eurasian Lynx


The case (C-564/07) was brought on 21 December 2007, but the UK-IPO has only just notified that interested parties have until 11 April 2008 to comment.

The Commission's case against Austria goes like this (in the usual Eurospeak):

"Form of order sought

declare that the Republic of Austria has infringed its obligations under Article 49 EC, by

requiring all patent lawyers lawfully established in another Member State [IPKat comment: Germany in particular, one suspects] wishing to provide services temporarily in Austria to first enrol in the special Austrian registers, insofar as registration is conditional on taking out professional liability insurance,

making patent lawyers lawfully established in another Member State wishing to provide services temporarily [IPKat comment: why only temporarily? Why not also permanently?] in Austria subject to disciplinary supervision by the Austrian authorities, even as regards sanctions for conduct other than the serious breach of professional duties,

making any provision of service by a patent lawyer lawfully established in another Member State wishing to provide services temporarily in Austria conditional on taking out professional liability insurance,

requiring patent lawyers lawfully established in another Member State temporarily wishing to provide services temporarily in Austria to instruct a locally registered domestic lawyer or to appoint a person residing in Austria as process agent.

order Austria to pay the costs.

Pleas in law and main arguments

According to consistent case-law of the Court of Justice, Article 49 EC requires not only the elimination of any kind of discrimination on the grounds of nationality against a service provider established in another Member State, but also the removal of all restrictions - even if they apply uniformly to domestic service providers and service providers who are nationals of other Member States - which are liable to prohibit, impede or render less attractive the activities of service providers established in another Member State in which they legally provide equivalent services.

According to the Commission, the Austrian legal provisions regarding patent lawyers represent a restriction on the freedom to provide services within the meaning of Article 49 EC, by requiring patent lawyers lawfully established in another Member State wishing to provide services temporarily in Austria to take out professional liability insurance, to enrol in the Austrian register, to submit to the disciplinary supervision of the Austrian Patent Lawyers Association and, if they wish to represent clients, to instruct a locally registered domestic lawyer.

Those requirements are liable to impede the temporary provision of services in Austria by a patent lawyer lawfully established in another Member State, or at least to render the provision of such services less attractive. That is to say that compliance with the legal provisions of both the Member State of establishment and the Member State in which the service is provided places an additional financial burden on the service provider, since he has to familiarise himself with the provisions applicable in the Member State in which the service is provided; in addition, he is subject to two regulatory systems, without the Member State in which the service is provided taking into consideration the rules to which he is already subject in the Member State of origin. Moreover, the rules in issue are also likely to discourage consumers from enlisting the services of a service provider established in another Member State, as this generates additional costs that are not incurred if the service provider is Austrian.

National provisions that prohibit, impede or render less attractive the exercise of the fundamental freedoms guaranteed by the Treaty are compatible with the Treaty only if, first, they are justified by imperative requirements in the public interest, second, they are applied without discrimination, third, they are suitable for achieving the objective which they pursue, and, fourth, they do not go beyond what is strictly necessary to attain that objective. The recognition of interests as imperative requirements in the public interest is limited to those interests that are not already protected by provisions to which the service provider is subject in his Member State of establishment.

The Commission is of the view that the restrictions in dispute are not allowed as a derogation expressly provided for by the Treaty or justified, in accordance with the case-law of the Court of Justice, by overriding reasons relating to the public interest. The requirements in question to which patent lawyers established in other Member States are subject go beyond that which is necessary to achieve the objectives of consumer protection and the proper conduct of proceedings."

EU Commission wants 95 year copyright on recordings

According to European commissioner Charlie McCreevy, performing artists should no longer be the 'poor cousins' of the music business, and is proposing an increase in the term of copyright for sound recordings from 50 to 95 years. In a press release issued today, he is quoted as saying:

"I strongly believe that copyright protection for Europe's performers represents a moral right to control the use of their work and earn a living from their performances. I have not seen a convincing reason why a composer of music should benefit from a term of copyright which extends to the composer's life and 70 years beyond, while the performer should only enjoy 50 years, often not even covering his lifetime It is the performer who gives life to the composition and while most of us have no idea who wrote our favourite song – we can usually name the performer."

Charlie intends to bring forward a proposal to extend the term of protection for sound recordings to 95 years. This proposal should apparently be ready for adoption by the Commission before the summer break of 2008.

The IPKat sees the dead hand of copyright trying to extend its grasping fingers yet again, having previously failed to persuade Andrew Gowers and the UK government that such an extension could be justified (see IPKat comments here and here). If Charlie cannot see any reason why composers should be receiving royalties up to 70 years after they die, the IPKat wonders why the debate isn't instead about whether to reduce this term, rather than extending the terms of other rights?