Patents in Europe and the EU

"Where are we now?" is the question on everyone's lips when it comes to the long trek from national patents alone to the desired destination, the Promised Land of the single patent for the European Union and a centralised and harmonised patent litigation system. Explaining the background, Oliver Varhelyi (Head of Unit, DG Internal Market and Services, European Commission) described the legal bases on which the form and substance of the agreed new regime could be reached through a combination of unanimous and majority votes.

The legality of the new proposals, which combine EU activities with those of the European Patent Organisation -- a non-EU entity -- is the subject of a reference to the Court of Justice in respect of which the Advocate General's Opinion is due in late May, the Court's advice a couple of months later. Oliver believes that this initiative has every chance of going ahead, but further details remain to be agreed: fee levels and the new system's operating language(s). Why is Oliver so convinced that the language issue is going to be settled? Discussions have continued with the most sensitive Member States" (= France) and, he adds, "we are sticking to our guns" -- which some might guess to be aimed at Paris.

First panellist to speak was emeritus IPKat Professor Johanna Gibson (Queen Mary Intellectual Property Research Institute), pressing Oliver for further confirmation of the likelihood of success of this essential federal project and of the true degree of industrial support for the new scheme. Without naming any specific industrial sectors, Oliver felt that their various interests had all been addressed. Moderating the session, David Perkins (Arnold & Porter) thought that 2016 was the target indicated from the Commission, a date which was described both as optimistic and pessimistic by other panellists. Lord Hoffmann asked why European patents and EU patents had to be yoked together: the answer was, it seemed, "because they have to". Creating a court just for European patents in the EU would be a waste of effort.

Posthumous pleasure for performers

In case you missed it, the European Parliament website yesterday published this item (thanks, Hugo Cox, for forwarding the link):

"Music copyright to be extended to 70 years for performers

Copyright term for music recordings must be extended from 50 years to 70 years, says legislation adopted on Thursday by the European Parliament. By adopting the report by Brian Crowley (IE, UEN) with 377 votes in favour, 178 against and 37 abstentions, MEPs voted to increase the term of copyright protection to ensure that performers continue to receive royalties for 70 years from the first publication or performance of their song.

The European Commission had previously proposed an extension of the copyright protection up to 95 years. According to Mr Crowley, the compromise reached by the Parliament on 70 years takes into account Council's resistance and would facilitate an agreement with national governments [this remains to be seen ...].

A fund for session musicians

The increased copyright protection would also benefit producers, thanks to additional revenues deriving from the extension.

A dedicated fund for session musicians was also supported by the Parliament. This fund would be financed by contributions from producers, who would be obliged to set aside for this purpose, at least once a year, at least 20% of the revenues gained from the proposed extension of copyright term [this should make a bit of work for the accountants, too, particularly where revenue results from compilations containing works in which there is  (i) regular copyright, (ii) extended copyright and (iii) no copyright]. This fund will reward those session musicians who gave up their rights when signing the contract for their performance.

MEPs amend a provision relating to this fund so as to give collecting societies, which represent performers' and producers' interests, the right to administer the annual supplementary remuneration.

"Clean slate" clause to ensure extension benefits performers

To ensure that performers fully enjoy the additional royalties deriving from copyright extension, MEPs amend the original text so as to prevent the use of previous contractual agreements to deduct money from the additional royalties [retrospective deprivation of contractual and proprietary entitlements? Call for the European Convention on Human Rights!].

Possibility to renegotiate contracts

An amendment approved by MEPs allows performers to renegotiate the contracts concluded before the entry into force of this legislation, 50 years after the first publication of their recording.

Copyright extension for audiovisual works, too?

The Parliament also asks the Commission to launch an impact assessment of the situation in the European audiovisual sector by January 2010, with a view to deciding whether a similar copyright extension would benefit the audiovisual world [depends what you mean by "benefit the audiovisual world", the IPKat supposes. There does not appear to be an obvious consensus within that world as to what will be of benefit to it].

"Use it or lose it" clause

According to the approved legislation, if producers, 50 years after the publication of a phonogram, do not make it available to the public [does this mean "continue to make it available? If it's been published, it has presumably been made available], performers can ask to terminate the contract they signed to transfer their rights to the label.

The producer has one year to make the recording available to the public, failing this his rights will expire.

Review legislation after three years

Finally, MEPs ask the Commission to submit three years after the entry into force of the new legislation an assessment of its application with particular regard to the digital market.

Member States will have two years to transpose the new legislation.

Current legislation on copyright

Under current EU laws, recorded musical performances are protected for a maximum of 50 years. This means that over a period of 50 years, performers receive remuneration for each time their work is played on the air. After 50 years, artists lose control over the use of their works and no longer receive this income.

Composers already enjoy copyright protection for 70 years after their death [Says the IPKat, I don't suppose they enjoy it at all: they're dead, if that means anything to EU legislators]".

Famous old joke about what composers do after they die here, here and here

European Parliament backs 95 year copyright

The Legal Affairs Committee of the European Parliament has today approved legislation extending (in the words of the press release) 'the copyright protection for music compositions on physical devices (i.e. digital forms are excluded) to 95 years.' [The IPKat assumes this means sound recordings].

An amendment has been made to 'to prevent the use of previous contractual agreements to deduct money from the additional royalties'.

Session musicians will benefit from a fund to which producers will have to contribute at least 20% of royalties they gain from the term extension.

The legislation will be reviewed after 3 years, and then every 4 years. The Commission has also been asked to look at whether a similar extension is justified in the audiovisual sector.

A plenary vote will take place in March.

The IPKat can't claim to be thrilled by the decision, but he suspects that the writing was on the wall. He notes that 95 years is almost double the current 50 years, but at the same time, he can't help but think that all the terms are rather arbitrary. He's puzzled by the exception for digital recording - doesn't this emasculate the extension (or is there something about the way that recordings are usually made that the Kat doesn't know?)

STOP PRESS: The IPKat thanks Chris Ellins from the University of Westminster for this link to the Legal Affairs Committee's documents.

Linguistic laughs -- an expert writes

The IPKat's venerable and learned friend Dr Alexander von Mühlendahl is a man whose experiences both as Vice-President of OHIM and as an attorney in private practice have given him some precious insights into the linguistic problems that have beset Europe's Long March to harmonisation, the single market and a common understanding.

Right: the Verpiss-Dich plant, originally designated Coleus canina (presumably on account of its smell), is now thought to be a Plectranthus: see the IPKat note on Schrader v CPVO here

Prompted by David Keeling's recent post he tells the Kat:

"The laugh is certainly called for.

The original language of the Plectranthus case is German, and in that language all the terminology put on his pointed needle by David Keeling is indeed correct: the term in Article 7 of the Plant Variety Regulation is "Unterscheidbarkeit"; in the English it is "Distinctness" (English mother tongue/readers may know how to distinguish between distinctness, distinctivity, and distinctiveness). In French it should be -- the Article 7 term -- distinction, a term at times properly used in the French translation of the judgment (which may well be the original), but even there at times the "caractère distinctif" raises its head (e.g. in para. 25 of the judgment), while the proper term should have been "distinction".

The problem thus is one of proper translation, rather than sloppy language in the original. David, who in one of his past lives was at the ECJ's translation service, will know how difficult the task is.

Perhaps your readers may also chuckle at another translation "error":

The applicant in the case had claimed that the variety SUMCOL 01 for which protection was sought had already been marketed in the European Union in January 2001, under the designation "Verpiss Dich". A proper rendering in English would have been "Piss Off", but the translation service prissily chose "get lost" (in para. 12) (imagine the smell of the plant!)

As for the discretion that the CFI grants the CPVO, anything else would have come as a surprise, given the sometimes time-consuming and complicated examinations carried out by the CPVO and the participating national offices in determining stability, distinctness, novelty, etc. - it is difficult to imagine the CFI itself carrying out a re-examination or appointing experts to do so. Perhaps trade marks are indeed less complicated than plant varieties".

Plant samples here and here
Urine samples here and here
Why we love cat pee, but hate dog pee here
Thomas Bowdler here

Truth, transparency and the role of academic research

P. Bernt Hugenholtz is someone for whom this member of the IPKat team has the highest regard. Attached to the Institute for Information Law at the University of Amsterdam, he has established his reputation as a scholar, a lawyer and as an acute observer of reality on so many occasions that his credentials are not seriously open to challenge. Accordingly -- while the IPKat may not (and indeed does not) agree with everything Professor Hugenholtz has ever said or written -- he would not lightly dissent from any position which he has taken on a matter of substance. It was therefore with a sense of increasing outrage that this Kat read the text of an open letter sent by Professor H to Dr Jose Manuel Barroso, President of the European Commission. The letter goes like this:

" The Institute for Information Law (IViR) of the University of Amsterdam is a leading research institute in the field of European copyright law. In 2006 and 2007, IViR produced two major studies on EU copyright law and policy:

• The Recasting of Copyright & Related Rights for the Knowledge Economy,

• Study on the Implementation and Effect in Member States' Laws of Directive 2001/29/EC on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society.

Both studies were commissioned by the Commission (DG Internal Market and Services) in December 2005, discussed at great length with Commission officials at every stage of their completion, officially approved by the Commission, and finally published on the DG Market website. Both studies were researched and written by teams of expert researchers in the fields of law and economics that were recruited from IViR and various other European institutes. In addition, the main conclusions of the Recasting Study were discussed with leading European scholars in the field of intellectual property law, prior to its final submission.

Since their completion and publication, both studies have attracted considerable attention in scholarly circles and among stakeholders and continue to play an important role in informing the current debate on the future of copyright law and policy in the EU. It comes therefore as a complete surprise to us to discover that our studies have been almost entirely ignored in the so-called `forward looking package' on Intellectual Property that the Commission has released on July 16, 2008.

The Explanatory Memorandum that accompanies the proposal for a term extension of the rights of performing artists and phonogram producers, which is the centre-piece of the Commission's package, references at various places studies and data provided by stakeholders, but fails to even mention our Recasting Study, which deals with the topic of term extension in detail and, on the basis of a thorough legal and economic analysis, rejects the main arguments made in favour of an extension. The Explanatory Memorandum also disregards our critical analysis of the issue of co-written musical works, which constitutes a separate chapter of the Recasting Study.

Amazingly and quite misleadingly, the Explanatory Memorandum states (on p. 6, in fine) that `[T]here was no need for external expertise'. This is patently untrue, as the terms of reference of the Recasting Study, which were drawn up by the European Commission (Invitation to tender Markt/2005/08/D), expressly asked for the examination of, among other issues, the need for a term extension and the issue of co-written musical works. The Impact Assessment that supposedly underlies the Commission's proposal also ignores the Recasting Study, except for a single mention in footnote 51, which quotes our study out of context. Similarly, the Green Paper on Copyright in the Knowledge Economy, that covers much of the terrain explored in both our studies, once again ignores the critical findings of our research.

We are, of course, well aware that several conclusions of the IViR studies do not agree with the policy choices underlying the Commission's proposals. And we are certainly not so nave as to expect that the recommendations of an academic institution such as ours, however well researched and conceived they may be, will find their way into the Commission's policies in undiluted form. What we would expect however is that our work, which was expressly commissioned by the policy unit in charge of these proposals, be given the appropriate consideration by the Commission and be duly referenced in its policy documents, in particular wherever the Commission's policy choices depart from our studies' main recommendations.

As you are certainly aware, one of the aims of the `Better Regulation' policy that is part of the Lisbon agenda is to increase the transparency of the EU legislative process. By wilfully ignoring scientific analysis and evidence that was made available to the Commission upon its own initiative, the Commission's recent Intellectual Property package does not live up to this ambition. Indeed, the Commission's obscuration of the IViR studies and its failure to confront the critical arguments made therein seem to reveal an intention to mislead the Council and the Parliament, as well as the citizens of the European Union.

In doing so the Commission reinforces the suspicion, already widely held by the public at large, that its policies are less the product of a rational decision-making process than of lobbying by stakeholders. This is troublesome not only in the light of the current crisis of faith as regards the European lawmaking institutions, but also - and particularly so - in view of European citizens' increasingly critical attitudes towards intellectual property law.

I hereby urge the Commission to fully inform the European Parliament and the Council of Ministers of the findings of our studies in connection with the above-mentioned proposals and to duly and properly reference our work in future policy initiatives.

Copies of this letter will be sent to Mr. C. McCreevy (Commissioner DG Market and Services), the European Parliament and the Council of the EU. This letter will also be publicly posted on our website at http://www.ivir.nl/".

This member of the IPKat team shares Professor Hugenholtz's sense of grievance. I suspect that, if we are honest, most if not all of us are guilty of supporting lobby groups when they serve our purposes -- but there is all the difference in the world between supporting a position and justifying it. As a copyright owner I naturally want to see long, strong, enforceable rights to protect my work -- but I have to be kat enough to concede that the policy which is adopted into law should, as far as possible, be based upon objective and verifiable grounds, with any position that is contrary to my own being refuted on the basis of clear evidence and reasoning or rejected on the basis of support of a higher contrary principle.

Merpel chimes in here too. She says, this is not just an issue for the Commission and the institutions of the European Union. There is a feeling among many in the private sector too that academics are a cheap form of "hired gun", to be engaged in order to deliver the desired research results. I have seen proposals for, and been asked to perform, research projects in the private sector in respect of which I have been informed of the available funding, the time-scale and the desired conclusion. It would make more sense for the Commission to pay attention to the research it pays for -- and over which it has substantial control in terms of aims and methodology -- than to allow its ear to be bent by lobby groups whose attitude towards academic research may be that it is just another convenient commodity to be paid for, like advertising and public relations.

EU on term extention for sound recordings

The IPKat has learnt from a combination of Boing Boing and Slashdot that the EU appears to have ditched plans to extend the term of sound recordings, and also to require ISPs to filter content.

The website of the CULT committee (don't get too excited - CULT stands for Culture and Education, rather than anything more sinister) did not have the latest set of minutes, recording this decision.

Can any of the IPKat's readers offer any further information?

Boost or bust for EU online content sector?

On Friday the European Commission decided to give a new boost to Europe's online content sector. The idea is that EU citizens should be able to enjoy easier and faster access to a rich variety of music, TV programmes, films or games via the internet, mobile phones or other devices.

Right: the interests of the consumer and the content provider are not always in harmony ...

According to this official release

"The Commission ... encourages the content industry, telecoms companies and Internet service providers to work closely together to make available more content online [the IPKat says, haven't they been doing this already? It's the lure of profit that motivates them rather than the Commission's encouragement], while ... ensuring a robust protection of intellectual property rights. The Commission also wants to facilitate copyright licences for online content covering the territory of several or all of the EU Member States. According to Commission studies, a truly Single Market without borders for Creative Online Content could strengthen considerably the competitiveness of Europe's music, film and games industry and allow retail revenues of the sector to quadruple by 2010 if clear and consumer-friendly measures are taken by industry and public authorities (see IP/07/95).

"Europe's content sector is suffering under its regulatory fragmentation, under its lack of clear, consumer-friendly rules for accessing copyright-protected online content, and serious disagreements between stakeholders about fundamental issues such as levies and private copying", said Viviane Reding, EU Commissioner for the Information Society and Media [says the IPKat, it's not surprising that there should be serious disagreements between stakeholders, given that the suppliers of content see the cost of dissemination of their content as a barrier to wider access to their work, while carriers see the cost of content as a barrier to their being able to supply more content. But someone has to pay, surely]. "We have to make a choice in Europe: Do we want to have a strong music, film and games industry? Then we should give industry legal certainty, content creators a fair remuneration and consumers broad access to a rich diversity of content online. I will work on these issues with my colleagues in the Commission and propose a Recommendation by mid-2008 on new ways for achieving a single market for online content. I ask in particular Europe's consumer associations to take a very active part in this debate [In other words, the IPKat says, if the consumer lobby shouts loud enough it can drown out the pleas of both content providers and carriers]. Because for online content, the demand and preferences of 500 million potential consumers are the strongest arguments for achieving new solutions at EU level." ["Give the people what they want!"]

The Commission has adopted today a Communication on "Creative Content Online in Europe's Single Market". This strategic document is the starting point for new EU actions to support development of innovative business models, cross-border services and consumer-friendly offers.

The retail sale and distribution of high value "creative" content online represents a major structural change in the European content market. Whilst the online market share of music sales is reportedly reaching 25% in some European countries such as the UK, the retailing of video content, and the availability of on-demand TV programming via the Internet is as yet still a nascent market. Such high value "creative content" also covers radio, online games, online publishing and educational content. New market developments also arise from Web 2.0, i.e. user-created content, that consumers themselves may wish to "protect" from unauthorised re-use.

The Commission consulted the public on these issues in 2006. On the basis of this, the Commission sees a need for strengthening the European content market and the influence of European consumers needs on this market.

In the Communication, the Commission identifies four main, horizontal challenges which merit further action at EU-level:

Availability of creative content – Owners of creative content are sometimes reluctant to make it available for online distribution. Amongst the reasons for this are concerns over illegal downloads and online "piracy". In addition, there are across the EU major difficulties in negotiating and settling terms of trade between the right owners and the online distributors of creative content.The Commission is therefore today strongly encouraging stakeholders to find innovative and collaborative solutions to exploit the market for content online. A first step into this direction was taken in 2006 with the "European Film Online Charter" (see IP/06/672), but the Commission notes a lack of ambition and implementation in the follow-up to this initiative.
Multi-territory licensing for creative content – Online environments such as the Internet and mobile services inherently allow content services to be made available across the single European market. However, the lack of multi-territory copyright licences – allowing the use of content in several or all EU Member States – makes it difficult for online services to be deployed across Europe and to benefit from economies of scale. [the IPKat says, this may give a clue as to which way "official" thinking will tilt the forthcoming ECJ reference in Murphy, noted here, in which the notion of Europe as a single market for the supply of copyright-protected content will be under review] While it is first for rights holders to appreciate the potential commercial benefits of multi-territory licensing, there is an underlying need, also from a consumer perspective, to improve on existing licensing mechanisms.

Interoperability and transparency of Digital Rights Management systems (DRMs) – Technologies that support the management of rights and the fair remuneration of creators in an online environment can be a key enabler for development of innovative business models. Lengthy discussions amongst stakeholders have yet to lead to the deployment of interoperable and user-friendly DRM solutions. The Commission therefore seeks to establish a framework for DRM transparency concerning, amongst others, the interoperability of different DRMs, and ensuring that consumers are properly informed of any usage restrictions placed on downloaded content, as well as of the interoperability of related online services [says the IPKat, if interoperability of technical standards is under review, the Commission will have to keep in mind the need for consistency between the treatment of cartels and oligopolies in this sector and their treatment in other sectors where the demands of the consumer lobby are less obvious].

Legal offers and piracy – Piracy, including the unauthorised up- and downloading of copyrighted content, remains a central concern. The Commission intends to instigate co-operation procedures ("codes of conduct") between access/service providers, right holders and consumers to ensure not only the widespread offer of attractive content online, but also adequate protection of copyrighted works, and close cooperation on the fight against piracy and unauthorised file-sharing [the IPKat says, the IP Enforcement Directive also talks of cooperation, but the Commission seems paranoid about the risk that such cooperation might appear anticompetitive].

The market for online content is developing at a rapid pace. According to a Commission study (covering EU-25), the retail revenues from content online will more than quadruple from €1.8bn in 2005 to €8.3bn by 2010 (see IP/07/95).

With the Communication "Creative Content Online in Europe's Single Market", the Commission is launching today a public consultation in order to prepare – by mid 2008 – an EU Recommendation on Creative Content Online for adoption by the European Parliament and the Council. Stakeholders are invited to comment on today's Communication by 29 February 2008.

In addition, the Commission will set up the "Content Online Platform", a stakeholders' forum, to initiate collaborative work with all stakeholders on issues where further discussions are needed. Consumers will be given a strong voice in this platform".

Merpel adds that any initiative is better than no initiative at all, but hopes that the Commission will be relaxed about letting this one be shaped by consultations rather than shoe-horning consultations within the structure of the Commission's statement here. A big problem faced in this sector is that developments happen quickly and the scene changes rapidly, whereas the mechanism by which the Commission identifies a problem and responds to it is slow, ponderous and linear. It's a bit like lining up a heavy cannon that has to be carefully primed and aimed before firing, when the target moves rapidly and -- when it comes to dealing with competition and IP issues -- one's friends, foes and allies can be one and the same.