- Computer companies including IBM, Hewlett Packard and Dell (08/07/04) launched a joint challenge on the validity of a patent held by video conferencing company Forgent for JPEG image compression following Forgent's announcement that it would be seeking royalties and failure to negotiate a licence agreement.
Forgent Networks announced that it would seek royalties for the transmission of JPEG images from makers of browsers, PDAs, digital cameras, phones and scanners. A standards body, the Joint Photographic Experts Group has said it believes that the patent is invalid. However, over the last couple of years the patent has been licensed extensively worldwide including a reported $15 million deal with Sony. In April this year enforcement action was taken against over 30 computer companies including IBM, Apple, Hewlett Packard, Dell and Gateway.
See www.news.zdnet.co.uk and www.theregister.co.uk
- Celltech R&D Ltd V Med Immune Inc (18/06/04). Clause in patent licence badly drafted and did not use the word "exclusive" although it was obvious that it was intended to be an exclusive jurisdiction clause. UK liability proceedings not stayed pending outcome of US patent validity proceedings.
Celltech owns a family of patents called the "Adair" patents and sought to claim royalties from Medimmune under a patent licence dated 19 January 1998. Under the licence Medimmune had to pay royalties on sale of its product "Synagis" an antibody preparation to treat Respiratory Syncytial Virus (RSV) which but for the existence of the licence would infringe one of the Adair patents. After the launch of Synagis in the US, UK and Germany Medimmune denied any liability to pay royalties and alleged that there was no infringement of the Adair Patent because of a substitution of amino acid serine by threonine on residue 23 of the antibody, thereby changing the donor residue specified in the patent.
Just before royalties became payable by Medimmune, Medimmune commenced an action in the US seeking to revoke the Adair patent and seeking a declaration that Synagis did not infringe the patent.
Clause 13 of the patent licence conferred jurisdiction relating to questions of liability on the courts of the United Kingdom. Medimmune had applied for a stay of the US validity proceedings. Medimmune submitted that even if clause 13 was an exclusive jurisdiction clause there were good and compelling reasons why it ought not to be enforced. Medimmune submitted that issues of infringement were intertwined with issues of validity and the US courts were the best place to construe a US patent. Celltech submitted that the issue in the case was a short point of whether but for the licence there would be literal infringement of the patent; clause 13 was an exclusive jurisdiction clause and ought to be given effect to.
It was held that although the clause conferring jurisdiction on the UK courts was badly drafted and did not use the word "exclusive", it was obvious that it was intended to be an exclusive jurisdiction clause. Where parties had bound themselves by an exclusive jurisdiction clause, effect should ordinarily be given to it in the absence of strong reasons for departing from it. There was no reason in this case that demanded the proceedings be stayed in the face of the exclusive jurisdiction clause.
- Cambridge Display Technology Ltd v Ei Dupont de Nemours & Co (18/06/04). The definition of the minimum annual royalty to be paid under a licence agreement had been intended to impose a different commencement date than provided for elsewhere in the agreement.
The claimant made a claim against the defendant under a licence agreement (signed 16 October 2001) in relation to its entitlement to minimum royalties. The point of dispute is when the minimum royalty begins to be payable. The claimant contended that the first minimum royalty became payable within 60 days of 16 October 2003; i.e. by 16 December 2003. The defendant's case was that the first payment was due within 60 days of 16 October 2004.
Clause 3.5 deals with the payment of a minimum royalty and provides as follows:
"Within sixty (60) days of the end of (a) the first two Years under this Agreement and (b) each year thereafter, the Licensee shall, in the manner provided in Clause 3.6 below, pay to Cambridge Display Technology the shortfall (if any) between the royalties paid in accordance with clause 3.1 above and the Minimum Royalty payable with respect to the period in question."
The definition of "Minimum Royalty" in clause 1.1 of the agreement states as follows: means in relation to each Year after January 1, 2003, US 1 million."
It was held that the language used made it impossible to treat the date provision in the definition of minimum royalty as a mere reflection of the provisions of clause 3.5. The ordinary meaning of the phrase "each year after 1 January 2003" had to be each complete period of 12 months from 16 October that took place after 1 January 2003.
- Badge Sales v PSM International (11/06/04). The claimant was granted an injunction to restrain the defendants selling handbags (and paying claimant royalties), which claimant claimed would be a secondary infringement of its design right.
The defendant issued a claim under the Copyright, Designs and Patents Act 1988 s.227 against the claimant for secondary breach of the design right. The defendant gave an undertaking not to import any more such bags. However, the defendant wished to sell the five and a half thousand bags in stock before the trial and offered to pay the claimant royalties on such bags.
The Claimant sought an injunction to prevent the sales of the existing cheap imitation goods as these would flood the market and ruin the claimant's long term trading prospects. The claimant submitted that there was a serious issue to be tried and the defendant's loss would be easier to quantify and the balance of convenience lay on the claimant's side. The defendant submitted that the court had no power to grant an injunction as the defendant had been "innocent" within the meaning of s.233(2) of the Act.
The court held that both parties had not yet exchanged evidence on the matter sufficient to enable the court at this interim stage to decide whether the defendant was "innocent" or not. It could be said that s.223(2) applied as a bar to interim injunctions having regard to the state of the evidence at the time when the injunction was requested. As there was a serious issue to be tried and the balance of convenience lay with the claimant the injunction would be granted.
- Patent Office launches new 'What is the Key' campaign (08/06/04) for SMEs to raise awareness of the value of IP and how best to make the most of their own intellectual assets and the consequences of not being aware of others' IP.
The campaign was launched at the UK Business Week Event on 8 June in London. The organisation is working in partnership with CIPA and ITMA to raise awareness of IP.
See: www.the-key.biz
- Changes to the EU Software Patents Directive are strongly opposed (21/05/04). The changes appear to allow the widespread patenting of software in Europe, and MPs are being lobbied with concerns from companies who fear about stifling innovation and preventing legitimate market competition.
The changes appear to allow the widespread patenting of software in Europe, and MPs are being lobbied with concerns from companies who fear about stifling innovation and preventing legitimate market competition.
British companies who opposed the changes which were voted on in May were urged to lobby their local MPs with their concerns.
According to Richard Allan MP there has since been an opportunity to reopen the debate, where people in the industry can contribute their views.
People are concerned about the possible increase of software patenting, as ideas, rather than just physical devices will be patentable.
See: www.computerweekly.com and
www.europa.eu.int/comm/internal_market/en/indprop/comp/index.htm
- Federation Against Software Theft (FAST) (18/05/04) now anticipate 3 or 4 cases per year under section 109 of the Copyright, Designs and Patents Act 1988 against companies who violate copyright on software licences. Using s109 of the Act a search warrant may be issued if there are reasons to believe an organisation is infringing copyright and directors could face up to 10 years imprisonment.
FAST is becoming stricter with company directors who are believed to be too complacent about software copyright violation. FAST recently quoted a recent IDC report that estimates a reduction in piracy from 25% to 15% would mean an overall increase in the value of the IT industry from £37.5 billion to £54.4 billion and 40,000 jobs would be created.
See: www.fast.org.uk
- Pamela Dallas Brighton & Dubbeljoint Co. Ltd. v Marie Jones (18/05/04). The joint author of a copyright work did not need to make an equal contribution but the contribution needed to be significant.
The first claimant (Pamela Dallas Brighton) sought to exert her rights in respect of the play "Stones in his pocket". In 1996, Dubbeljoint Co. Ltd. commissioned the defendant to write the play that was then directed by Ms Brighton. In 1999 Ms Jones, to some extend, rewrote the original script. It was recognisable as the same play, but both were different "dramatic works" according to the Copyright Designs and Patents Act 1988, and each has its own separate copyright. Ms Jones then exploited the copyright in her 1999 script by various contracts with theatre and the like. Following the commercial and critical success of the 1999 version, Ms Brighton made two claims against Ms Jones. First of all, she claimed a joint ownership of the 1996 script because of contributions she made to the play during the course of the initial rehearsals. Secondly Ms Brighton stated that she provided the defendant with a draft script for the opening scenes of the play which Ms Jones then incorporated into the 1999 version of the play. The claimant alleged that the draft script was a dramatic work in itself, that copyright subsisted in it and that copyright was owned by her. Although the defendant was authorised to use the script in the 1996 version, she was not authorised to incorporate it into the 1999 version. The claimant alleged that Ms Jones' exploitation of the 1999 script constituted unauthorised use and infringements of Ms Brighton's copyright in the draft opening script.
The burden of establishing that the defendant was not the sole author of the 1996 version of the play rested on the claimant (s104 (2) of the Act). If someone claimed to be a joint author, although the contribution which he needed to make to the creation of the work did not have to be equal in magnitude to the contribution of the other joint author, it still needed to be significant. The 1996 script and the 1999 script were different dramatic works within the meaning of the Act and each had its own separate copyright. The first claimant was not the joint author of the 1996 script
It was held that although the first claimant's contributions during the rehearsal were important and valuable, they were not beyond what was expected form her as a director and were not of the nature to make her a joint author of the play. During the rehearsal Ms Jones did not agree with all of the claimant's suggestions and the actual form of expression of the dialogue on paper was composed solely by the defendant.
Concerning the draft opening script, it was held that the draft opening script was a dramatic work in itself, that copyright subsisted in it and that copyright was owned by the claimant. The draft opening script were used to a sufficient extend to infringe copyright since over 17 elements of Ms Jones' final script were taken from the claimant's draft opening script. However, the writing of the 1999 script and the early exploitation of copyright in the 1999 script were act which were not unauthorised by the claimant because the claimant did not revoke her authority until 7 November 2001. Only future contracts by Ms Jones to exploit the 1999 script will involve breaches of the claimant's copyright in the draft opening script unless the claimant's consent for them is obtained.