- Dendron GmbH & Ors v The Regents of the University of California & Boston Scientific Limited (19/05/04). As a matter of construction of the definition of exclusive licence in the patents act 1977 s.130 (1), the words "from the proprietor of or the applicant for a patent" meant "granted by the proprietor or by a person duly authorised by the proprietor for that purpose".
The claimants (Dendron GmbH & Ors (D)) sought to revoke a European patent held by the University of California (UC). UC and Boston Scientific Limited (B) counterclaimed for infringement of the patent. B claimed to be entitled to sue for infringement as exclusive licensee under the patent. Dendron GmbH & Ors (D) alleged that a third party (Target Therapeutics Inc (T)) was the exclusive licensee. Accordingly, the preliminary issue for determination was whether B was the holder of an exclusive licence under the patent in suit within the Patents Act 1977. B was not registered as exclusive licensee so the issue had to be decided on the basis of the construction and effect of the licence agreements. UC had granted T a licence in a contract labelled an "exclusive license agreement". The licence was expressed to be assignable by T only with the written consent of UC. Subsequently UC, T and B entered into a further agreement by which they agreed to vary T's licence so that B was appointed exclusive licensee under the patent with the United Kingdom. D submitted that B was not an exclusive licensee but a sub-licensee of T, which did not meet the requirement in the statutory definition of an exclusive licence for the licence to be "from the proprietor of a patent". D further contended that T's licence was and had always remained in the same form, with the result that T remained an exclusive licensee.
It was held that as a matter of construction of the definition of exclusive licence in s.130(1) of the Patents Act 1977, the words "from the proprietor of or the applicant for a patent" meant "granted by the proprietor or by a person duly authorised by the proprietor for that purpose". It was not possible for two documents simultaneously to confer on one person "to the exclusion of all other persons" any right in respect of the invention. It was clear from B's licence that T, described as "existing exclusive licensee" in the recitals to B's licence, had been supplanted by B. T had ceased entirely to be exclusive licensee in respect of the patent.
- The European Council votes through controversial amendments to the draft Directive on the patentability of computer-implemented inventions. By rejecting most of the amendments which the European Parliament had made to the draft, the Council has reverted to a text very similar to the original proposal from the European Commission.
The European Parliament had introduced the amendments because it feared the original text of the draft Directive would open the door to unlimited patenting of software, including for business methods and software which does not contribute to the state of the art.
The open source software movement is against the idea of patenting software, partly because it fears that it would lead to patent warfare between large software developers as is seen in the United States.
The European Council's amended draft Directive will be resubmitted to the European Parliament for a second reading later this year and, in view of the divergence between the drafts, a lot of negotiation can be expected.
For further information see:
http://europa.eu.int/comm/internal_market/en/indprop/comp/
- Naomi Campbell v Mirror Group Newspapers Ltd (06/05/04). By a three to two majority decision the House of Lords upheld Naomi Campbell's appeal in her breach of confidentiality and data protection claim against the Daily Mirror.
The decision re-instates the damages awarded in the High Court decision and reverses the Court of Appeal's award of expenses in favour of the Daily Mirror.
To view the judgement see:
www.parliament.the-stationery-office.co.uk/pa/ld200304/ldjudgmt/jd040506/campbe-1.htm
- Latest in the Eolas patent saga (11/05/04). The University of California has filed a response to the US Patent and Trade Mark Office's initial finding that its patent for embedding interactive functions such as "applets" or "plug-ins" into web pages (the Eolas patent) is invalid. The University of California is running the same argument which was successful in their court action against Microsoft last August, namely that the prior art which the USPTO cited is not relevant to the merits of the patent.
It is now up to the USPTO to consider the response. Their re-examination of the patent could take up to another year.
For further information, see www.computerweekly.co.uk.
- European Commission warns (03/05/06) 16 EU royalty collection societies that an agreement between them creates a "one stop shop" music licence which may be in breach of EU competition rules. The European Commission has sent a Statement of Objections to sixteen national royalty collection societies in respect of an agreement between them for licensing music copyright for public performances via the internet (the "Santiago Agreement"). The Commission believes the Santiago Agreement may infringe the prohibition on anti-competitive agreements under Article 81 of the EC Treaty.
The Santiago Agreement allows each of the individual collecting societies to license music copyright in all of the national territories of each collecting society. The idea was to create a "one-stop shop" for commercial users, rather than them having to obtain an individual national licence for each country, as was previously the case. Once music is reduced to a digital format and becomes accessible via the internet, traditional national boundaries cease to be relevant, because the music can be downloaded around the world.
The Commission favours the principles behind the Santiago Agreement, as it recognises that the traditional national approach will not work in the internet environment and a new paradigm is required. However, it has grave concerns about the underlying territorial restrictions in the Santiago Agreement. It believes a situation has resulted whereby commercial users are restricted in their choice of licensor to the collecting society established in their own member state. This hindrance to freedom of choice for commercial users discourages efficiency and may hinder the development of the single market.
The Commission points to the IFPI Simulcasting agreement which has established pan-European licensing of music copyright for simultaneous transmission via television, radio and the internet. Under this regime, broadcasters have the freedom to choose any of the individual national collecting societies in the European Union as their licensor. Similarly, in the standard agreement between record producers' collection societies for licensing of copyright for webcasting (the broadcasting of TV or radio programmes via the internet only), commercial users have a free choice of which licensor to use.
The Commission believes that these examples encourage competition between the individual national collecting societies which, ultimately, benefits the consumer. The Santiago Agreement, however, adopts the opposite approach and this has prompted the Commission to investigate. The recipients of the Statements of Objection have two and a half months to respond and the Commission is at pains to point out that it has not pre-judged the outcome.
To view the Commission press release see: http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/04/586&format=HTML&aged=0&language=EN&guiLanguage=en
- Judgement of the ECJ (29/04/04) in the IMS Health GmbH & Co. OHG v NDC Health GmbH & Co. KG (Case C-418/01). The owner of an intellectual property right is entitled to determine how it should be exploited and compulsory licensing will only be ordered in exceptional circumstances. The ECJ has defined the circumstances in which refusal by a dominant company to grant a licence, even to a potential competitor could breach European competition law.
Three questions on the interpretation of Article 82 EC arose in proceedings between IMS Health GmbH & Co. OHG and NDC Health GmbH & Co. KG concerning the use by the latter of a brick structure developed by IMS for the provision of German regional sales data on pharmaceutical products. The ECJ largely followed the opinion of the Advocate-General and answered the questions posed by the German court. The ECJ discussed the circumstances in which a refusal to license the database would constitute an abuse of a dominant position. According to the court the exclusive right to reproduce the database forms part of the copyright-holder's rights and refusal of a licence cannot in itself, constitute an abuse. However, the exercise of an exclusive right my, in exceptional circumstances give rise to abusive conduct. The Court set out the following three conditions for establishing where the refusal by a copyright owner to give access to a product or service indispensable to carry on business may be regarded as an abuse:
- the undertaking which requested the licence intends to supply to potential customers the data in question by way of new products or services not offered by the rights holder; and
- the refusal is not justified by objective considerations; and
- the refusal is such as to reserve to the rights holder the market for the supply of data on sales of products in the Member State concerned by eliminating all competition on that market.
See the judgement at:
http://europa.eu.int/smartapi/cgi/sga_doc?smartapi!celexplus!prod!CELEXnumdoc&numdoc=62001J0418&lg=EN
- The Office of Science and Technology releases (29/04/04) a consultation document relating to the Seventh Framework Programme (FP7). The Seventh Framework Programme will cover the period 2006-2010/11. The UK Government is consulting widely to inform policy on the new Programme inviting comments by 26 July.
For further details see:
www.ost.gov.uk/ostinternational/fp7/index.html
- Lord Sainsbury announces (26/04/04) first £50 million call for a £150 Million innovative R&D programme in seven technology sectors. The seven priority areas are Bioprocessing; technologies to support environmentally-friendly transport; advanced composite materials and structures; inter-enterprise computing; renewable technologies; disruptive technologies in electronics and displays; and sensor and control systems. The money will be available by open competition through two of the DTI's new business support products: Knowledge Networks and Collaborative Research and Development. Applications can be made on-line via the DTI website.
For information see: www.dti.gov.uk/technologyprogramme
- Communication published by the Commission (16/04/04) advocating legislation on the collective management, including licensing of copyright and related rights. On 16th April, the European Commission issued a communication on the management of copyright and related rights in the internal market. Chapter 3 of the document considers the collective management of copyright by collecting societies who license rights and also monitor, collect and distribute royalties for individual rights holders. From the users' points of view, such collecting societies provide access to a global catalogue of rights for use both on-line and off-line in a 'one stop shop'.
However, the Commission is concerned that there is a lot of variation in legislation and practice between member states and is therefore keen to adopt a uniform approach across the internal market by implementing new pan-European legislation.
Its recommendations include adopting rules to govern the persons who may establish a collecting society, the legal form which the society may have, proof of efficiency, operability, accounting obligations and the number of represented rights holders which are required.
The Commission also suggests imposing obligations on the collecting societies to publish their tariffs, to require reasonable licence conditions and to provide a mechanism whereby users can challenge tariffs (possibly via special tribunals). Consistent rules are also advocated on whether users who challenge tariffs must deposit money before they may use the rights which are the subject of the challenge.
The Commission wants to ensure the transparency and accountability of collecting societies in their relationships with rights holders as regards the acquisition of rights, the conditions of membership and the rights holders' access to internal documents and financial records relating to licensing revenue and deductions. The Commission would also like to ensure that rights holders have some influence over the decision making process and the social and cultural policy of their collection society. According to the Commission, the advent of digital rights management systems should also give rights holders the possibility of managing their own rights individually.
Finally, each member state should exert adequate control over collecting societies, for example by the creation of a specific body to perform this task. This will require common ground across all member states on the competencies and composition of such bodies and whether or not their decisions will be binding.
The Commission's suggestions will undergo public consultation before draft legislation is developed.
See http://europa.eu.int/eur-lex/en/com/cnc/2004/com2004_0261en01.pdf
- Novello & Co Ltd v Keith Prowse Music Publishing Co Ltd (07/04/04). The claimant sought to establish that it owned the reversionary interest in the copyright in the works of a deceased composer by reason of an assignment in 2000 by the trustees of the composer's will. The defendant asserted ownership by way of an assignment prior to the composer's death. The musical works in question had all been created pre Copyright Act 1956. Although the musical works were composed in the 1940s and attracted copyright under the Copyright Act 1911, the existence and enforceability of such rights depended on the Copyright, Designs and patents Act 1988. The 1988 Act made the issue between the parties dependent on the provisions of the 1956 Act at the time when the 1973 assignment was made.
Between 1941 and 1945 Mr Addinsell assigned the "whole of his copyright" in the music and songs to Keith Prowse and Co Ltd (KP) in exchange for a royalty. Thereafter, KP assigned the rights to the defendant. In 1973 Mr Addinsell executed a further assignment in writing in favour of the defendant of "the whole of the copyright throughout the world of and in all the musical compositions written and/or composed by the undersigned, the copyrights in which have therefore been acquired by KP by earlier assignments to the intent that this assignment shall operate under the 1956 Copyright Act". It was this assignment that the defendant relied upon.
Before the commencement of the 1956 Act on 1st June 1957, the answer was clear. Section 5(2) of the Copyright Act 1911 ("the 1911 Act"), whilst conferring on the owner of the copyright a general power of assignment for the whole or part of the term of that copyright, made express provision that no inter vivos assignment would be operative to vest the reversionary interest in the assignee and that those rights would vest (notwithstanding any agreement to the contrary) in the author's personal representatives. The proviso to s.5(2) was preserved by Sch 7, para 28(3) of the 1956 Act in relation to certain types of assignment made before 1st June 1957: see para 28(1). The issue between the parties is whether the combined effect of these provisions was also to apply the proviso to s.5(2) to assignments made after that date, but in respect of existing works to which the provisions of the 1911 Act, including s.5(2), had previously applied.
The Act of 1911 was repealed by the Copyright Act 1956; and the Act of 1956 contains no provision comparable to the proviso to section 5(2) of the 1911 Act. However, by virtue of section 50 and paragraph 28 of the Seventh Schedule of the 1956 Act, the proviso to section 5(2) of the Act of 1911 remains applicable to pre-1957 works, unless some further assignment of the copyright has been made since the commencement of the Act of 1956.
See judgement at: www.courtservice.gov.uk/View.do?id=2473
- Cyprotex Discovery Limited v University of Sheffield (01/01/04). The defendant University owned the copyright in software developed with the claimant under a research agreement by virtue of an independent agreement.
This appeal by Cyprotex Discovery Limited ("Cyprotex") concerns the ownership of copyright in a set of computer programs arising out of research carried out by the University of Sheffield ("Sheffield") and subsequently developed into a potentially commercially exploitable form by an employee (Dr Edwards) of Cyprotex.
Sheffield had developed a series of algorithms, databases and associated computer software ("Simcyp") to assist in the prediction of how potential new drugs would be absorbed in the human body. However, the system needed further work to make it accessible to other researchers and industry. Sheffield then entered into a multi-party research agreement (the "Agreement") with sponsors from the industry to develop the program into a user-friendly model which would be commercially exploitable. The sponsors would then have rights to obtain a licence to the system on favourable terms. Cyprotex was one of the sponsors and agreed with Sheffield that it would provide sponsorship in the form of the services of one of their employees (Dr Edwards).
Dr Edwards was provided with the background information from Sheffield necessary to write the program and he solely wrote the software code.
When the relationship between Cyprotex and Sheffield broke down, there was a dispute over the ownership of the copyright in the computer program.
The Agreement was poorly drafted in many respects, including the following:
- The Agreement clearly expressed that copyright ownership in improvements to the computer program would vest with Sheffield and also indicated that Sheffield was allowed to license third parties and sponsors to use the resulting intellectual property in the computer program. No statement was made about who would have ownership in the computer program itself, as opposed to the improvements to it.
- It did not cater expressly for the type of sponsorship provided by Cyprotex in that it stated Cyprotex would provide £17,000 six months after signing the Agreement, whereas the parties had already agreed that Cyprotex's sponsorship was to be provided in kind.
- It was drafted on the basis that Sheffield would employ the programmer needed to undertake the program of research, whereas the services were provided by an employee of Cyprotex which was one of the sponsors.
- It was undated and provided for a start date for the programme of research nearly four months earlier than the actual start date.
- It did not cater for the situation which had occurred, namely that the period of performance and the programme of research were suspended indefinitely prior to the conclusion of the second phase of the research programme but without termination of the research agreement through the contractual termination provisions.
At trial, Sheffield pointed to a clause in the Agreement which stated that 'all inventions, improvements and/or discoveries… which are conceived and/or made by one or more members or other agents of the University acting either on their own or jointly with one or more employees of the Sponsors in performance of the Programme of Research' should belong to the University. Sheffield said that the new program was made jointly by Dr Edwards and a Sheffield employee and therefore Sheffield should own the copyright in the new program.
Cyprotex referred to a clause which said that 'rights to inventions, improvements and/or discoveries…relating to the Programme of Research made solely by employees of the Sponsors shall belong to each Sponsor respectively'. Cyprotex said that the programming work had been done solely by Dr Edwards and that, therefore, Cyprotex owned the new program.
The trial judge had stated that because of ambiguities and lacunae in the Agreement, he was free to look at the surrounding circumstances in construing its terms. He held that the commercial purpose of the Agreement would be largely defeated unless Sheffield owned the rights in the software and that the production of the software fell under the provision for IP made "in performance of" rather than "relating to" the programme. He accordingly held that the software belonged to Sheffield.
The trial judge also stated that in the absence of a contract to the contrary, then Cyprotex would be adjudged to be the owner of the copyright in the program (as employer of Dr Edwards). Sheffield was, amongst other things, able to rely on the existence of an 'informal' oral agreement between the parties prior to completion of the Agreement under which it was claimed that Cyprotex had agreed that copyright should be vested in Sheffield. The court stated that it was the intention of the parties that the program would belong to Sheffield.
The Court of Appeal upheld the trial judge's decision, but on a somewhat different basis. The Research Agreement had contemplated that the University would recruit a programmer to produce the software. This was done through the separate oral side agreement with Cyprotex, under which they would provide the programmer in lieu of a monetary contribution under the Research Agreement. The programmer therefore did the work as an agent of the University and this clearly fell within the provision giving the rights to the University.
There was an entire agreement clause (clause 13) within the Agreement which stated that the Agreement and the documents referred to in it formed the entire agreement between the parties. However, it plainly did not contain or supersede the agreement between Sheffield and Cyprotex in relation to the services of Dr Edwards in respect of his recruitment as a computer programmer. The court found that such an agreement was not an agreement relating to the subject matter of the research agreement but rather a bilateral agreement. So far as clause 13 was concerned, the "agency" created between Sheffield and Dr Edwards was not created by the Agreement but by a separate agreement between the parties.
See judgement at: www.courtservice.gov.uk/View.do?id=2444
- Sir Robert McAlpine v Alfred McAlpine Plc (31/03/040 [2004] WWHC 630 (Ch). The removal of an identifier from a company name which originally distinguished it from another company name amounted to passing off.
Passing off was established. The evidence illustrated that use of "McAlpine" alone suggested a reference to work carried out by the claimant. The use of the name "McAlpine" would have resulted in confusion for many people. The elements of goodwill, misrepresentation and damage required to establish passing off were satisfied and the injunctions were granted.
See judgement at: www.courtservice.gov.uk/View.do?id=2440
- International Business Machines Corporation & I.B.M United Kingdom Ltd v Web-Sphere Ltd & Ors (17/03/04). The presence of a hyphen between the different elements of a business name is not sufficient overall distinctiveness to avoid infringement of a community trade mark.
IBM brought claims for infringement of its community trade mark "WEBSPHERE". IBM brought claims for infringement of its Community trademark "WEBSPHERE". IBM applied for a Community trade mark in 1998 after conducting extensive international searches including domain name searches. The application was unopposed, and registration was completed in 2000 giving IBM exclusive rights and protection under Council Regulation 40/94 Art.9(1). The trademark was a word mark and included Classes 9, 38 and 42, relating in particular to computer software, communication, and website services. Web-Sphere Ltd (W) was registered after a Company name change in mid 1999. W owned three internet domain names and specialised in website consultancy. By mid 2000 W had produced its own communications software under the name WEB-sphere. W contended that IBM's trade mark was invalid under various limbs of Council Regulation 40/94 Art.7(1) because it was (a) devoid of any distinctive character; (b) consisted exclusively of signs designating its intended purpose; and (c) consisted exclusively of customary language, and also contended that IBM's trade mark and W's sign were not identical because of the presence of a hyphen in the latter.
The claim for trademark infringement failed.The word "WEBSPHERE" had no recognisable meaning as a whole in English and it was distinctive, furthermore neither the whole nor the individual parts, "WEB" and "SPHERE" described the goods or services provided and there was no evidence to show that the word had acquired a special trade meaning so the objections under Council Regulation 40/94 failed.
The presence of a hyphen was deemed an insignificant difference, notwithstanding that the average consumer was a sophisticated computer user who would be aware of the importance of a hyphen for internet searching. W could not rely on the exception for use of its own name as it had not existed before the well publicised launch of IBM's products nor before IBM's application to register the trademark. Furthermore W had not conducted any searches of its own prior to its change of name, nor had it taken any steps to minimise the risk of confusion. W was ordered to change its name and cease using its domain names or assign them to IBM.