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LICENSING EXECUTIVES SOCIETY
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An Own Goal - or mearly extra time?PRACTICAL ADVICE FOR RIGHTS HOLDERS Arsenal Football Club Ltd v Matthew Reed Many of you will by now have read press reports commenting on the result of the recent case brought by Arsenal Football Club against a street vendor named Matthew Reed. Some of these reports have questioned the very future of clubs' and rights holders' licensing programmes, suggesting that intellectual property rights can now be circumvented with impunity. Such a reaction is unjustified, because a careful analysis of the court judgment reveals a number of steps which a rights holder can take in order to preserve its position. Before looking at the action you can take, there follows a quick summary of the case. The Facts Arsenal had brought an action for passing off and registered trademark infringement against Matthew Reed who had been selling scarves, hats and shirts outside the Highbury Ground since 1979. The goods he sold were not official Arsenal merchandise. Arsenal's claim had two main limbs:
The claim for passing off failed because Arsenal was unable to provide any evidence that potential customers of Mr Reed (usually Arsenal fans) were confused about the origin or trade association of the goods that he was selling. Mr Reed had displayed signs stating that his goods were not linked to the club, and other street vendors who had signed up to Arsenal's official licensing scheme had their own signs confirming that position. In addition, Arsenal could not provide a single witness to state that they had actually been confused. The Judge decided that customers were well aware that they were not purchasing official goods from Mr Reed. Consequently he held that the club had not proved their case and ruled against them on this. In the claim for registered trademark infringement, Mr Reed clearly used the marks without consent. However, Mr Reed argued that he was not infringing because he was using the words and devices not as trademarks, but instead as mere "badges of allegiance". The Judge agreed with Mr Reed as a matter of fact that Mr Reed was not using Arsenal's names or its crest and cannon logo as a trademark. One very important issue of law remained. Could use of such "non trademark use" amount to an infringement of registered trademark rights? The Judge has decided to refer that question to the European Court of Justice for a definitive ruling. He said that existing case law is unclear on this issue. He has not therefore made any ruling on the trademark infringement issue. Conclusions The main conclusion to be drawn from this case in relation to merchandising is that enforcing unregistered trademarks by proving passing off may well be difficult, and registered trademarks are still a powerful weapon in your armoury. Accordingly words, signs, logos and so on that are being used, which have not been registered, should be registered as soon as possible. Use them as trademarks for example, on swing tickets, packaging or neck labels. Use emblazoned on a product is unlikely to be trademark use. Copyright can be another valuable weapon, which incidentally did not feature in this case. So if you use a crest or logo or if you are intending to commission a new design, ensure a written assignment of copyright is obtained from the designer. James Whittaker, Partner, and Nick Rudgard, Solicitor, Addleshaw Booth & Co Sport Unit. Top President's Diary
My LES diary continues to be very full and my work for the society very rewarding. The Council and I are continually trying to make improvements, which will benefit our members. We are now pleased to be able to offer Continued Education Points for TM/CPA solicitors at many of our meetings, including the LES B&I Annual Conference. We welcome comments from members, and would be particularly pleased to receive suggestions for speakers at our regional meetings. At the end of April I attended the LES International Delegates meeting and also the International Conference in Capetown. The weather was very variable and, entirely predictably, the British contingent managed to bring rain to Capetown after a long period of drought! At the International Delegates meeting presentations were given by each national or regional society and by the various committees. I attended the Industrial Sector Committee meeting. The committees comprise Automotive, Biotechnology, Chemical Industries, Environmental Technologies, Health Care products, Industry - University and we aim to be interactive with all interested members. The committee reports will be entered onto level 3 of the LESI ORG website and we would encourage all members to read them and to contact the Chairs or Vice Chairs of the committees if they would like to participate in any committee. Level 3 is open to all members and is accessible with a password, which is readily obtained by following instructions on the web page. I also attended a European National Presidents meeting, where we discussed the planned meetings in St Petersburg 2001 (15th to 18th September) and Prague 2002 (8th to 10th September). Please check the LESI website for further details. Future European meetings have been planned in France in 2004 and in UK/Ireland in 2006, the specific venues will be decided after discussion within each society. The conference programme for Oxford has now been circulated to all members. We advise you to reserve your place as soon as possible. The conference programme is also to be found on the LES B&I website (www.bi.les-europe.org/). We would like to draw your attention to the Introductory Licensing Course, to be held on Thursday morning, 28 June. This is an ideal opportunity for you to introduce the younger members of your firms to licensing. I hope to see many of you in Oxford and trust the weather will be better than in Capetown. Chris Goodman
Working with Technology Law and PracticeEdited by Jennifer Pierce, Solicitor, Charles Russell and Iain Purvis, Barrister, 11, South Square, Gray's Inn Published by Sweet & Maxwell, March 2001. Price £95 + VAT.
Jennifer Pierce and Iain Purvis, as well as distilling all of their expertise and authority into ten chapters, have assembled thirteen additional contributors, all acknowledged experts in their field.
The twenty-four chapters run to 500 pages, plus comprehensive tables of relevant cases and statutes, European and international legislation, and treaties and conventions. Together with a CD containing statutory EC and Governmental material referred to in the main text, the book can be divided conveniently for the purpose of review into four sections.
The first, introduced by Jennifer Pierce with contributions from Dr Paul Cunningham of Manchester University, Dr Paul Castle of MTI Partners Ltd, and Graham Stroud, Research DG, European Commission, deals comprehensively with public sector, venture capital, and European Commission funding. It includes explanations of the new approach embodied in the current 5th Framework Programme and is completed by perspectives from Dr Roger Holdom of University College, London and James Evans of the University of Manchester for the universities and from Dr Campbell Wilson of AstraZeneca for industry.
The second gives a valuable, easily read treatment of patent law and the laws of confidence, trademarks and passing off by Iain Purvis with patenting procedures and practice contributed by Derek Chandler, CPA and the laws of copyright and designs by Dr Uma Suthersanen, of Queen Mary's College, University of London.
Then follows guidance on the ownership of IP followed by expert introductions to EC & UK competition law by Mark Brealey and Kelyn Bacon of Brick Court Chambers and US antitrust law by Michael L Weiner of Skadden, Arps Slate Meagher & Flom.
Jennifer Pierce provides excellent guidance on R&D and licensing agreements and assignments and Nicholas Thompsell's contribution, 'Companies and Other Business Structures', will prove valuable to those involved with start-up companies and seeking the terms on which a venture capitalist might be prepared to invest.
Finally, when things go wrong, Nigel Jones, of Linklaters & Paines, provides guidance on the enforcement of IP rights and the remedies, litigation, arbitration and ADR procedures that should be considered.
Working with Technology will fully justify the authors' wishes that, in addition to the anticipated legal readership, the book will prove particularly helpful to non-lawyers grappling with the complexities of the many aspects of IP management. Oh, that it had been published ten years earlier!
Trevor Hunter
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Is There a Bubble to Burst in Biotech Companies?The development and use of new technology is central to the activities of many LES members. It is our lifeblood! The last twelve or eighteen months has witnessed, "the bursting of the dotcom bubble". A year ago the use of the Internet was an exciting way of carrying out many transactions. The sky was the limit and extravagant estimates were made on market size and profitability. The great majority of this euphoria has now disappeared and it would be interesting to know whether we have reached the bottom or whether more bad news has yet to come and will depress things further. Exciting new developments in the field of drug technology, very often biotechnology, have been with us for a number of years. We are still optimistic that small companies may produce valuable new drugs but the expectation of their potential value has diminished. Are we going to see a similar growth of pessimism in this technology as that already experienced in the dotcom area? I am sure LES members are well aware of the major differences between the development of these two technologies. Potentially, a dotcom company could mature and become valuable very rapidly. Two or three years were a very long time in this area. Whereas the time span from invention to successful commercialisation of a new drug can be 10 years, (even though your well-seasoned contributor knows that it was much shorter 25 years ago!). In many situations the following three parties are involved in such a development:
If one of these parties is not present there cannot be any successful commercial development. Research is the lifeblood of the university professor, the inventor. An academic who spends all his time teaching students does not carry much weight. In the past, research was done for its own sake. The results were published for the benefit of mankind and hopefully the researcher received the plaudits of his peers. Did Fleming make any money out of his basic contributions to the development of penicillin? Today if an academic makes a valuable invention it may be suggested to him, by a university development officer, that he can make money out of its commercialisation and that he should be thinking about patents and IPR in general. If not carefully advised at this stage, he may imagine that his latest baby will rapidly make him a millionaire, he will not be thinking of the enormous amount of work it takes to commercialise a new product! University involvement has changed in the last few years (and rightly so). They are now generally more focused on making money from the research work carried out in their scientific laboratories. While it would be untrue to say that all universities appreciate the importance of the commercialisation of inventions, there is a much greater appreciation of its significance in the year 2001 than there was 25 years ago. Thus the development officer will talk to the professor about commercialisation of the invention and will be very much concerned to make sure that the university gets its fair share of any royalties or the like which may result. In many instances nothing will happen without an entrepreneur (venture capitalist). He will probably have contacts in financial institutions and they will be encouraged to invest money in the development of the new product. A company may be set up to continue the research and development. The academic may then be offered shares in the new company and there will be talk of stock options. He will be asked to give some estimate of when he thinks the product might come to commercial viability and how large the market will be for the valuable new discovery. He is moving into a field in which he will have probably little prior knowledge and where he can be said to be an uninformed novice. In 1997 LES held its Annual Conference in Cambridge. One of the workshops I attended comprised presentations by three executives of newly established companies, who were going to make "tremendous profits out of exciting new drugs". At about the same time I had been engaged by Directorate General IV of the European Commission to undertake a study where I asked many large companies in this country:
It was very clear from the replies received that this was a most difficult thing to do. Many large companies had great problems in estimating what market size might be. When it came to the even more difficult area of estimating what percentage of that market they might be able to obtain, the replies were vague and it was clear that it was largely guesswork and no firm predictions could be made. Back in Cambridge there were confident predictions that in 10 or 12 years time there would be a peak in the relevant market. Estimates were given of the size of that market and what percentage of that market the new drug under development could hope to obtain. The events subsequent to this workshop have shown that all three presentations were wildly optimistic! Is anyone to blame and who suffers from a marketing exercise involving selling shares to the general public on the basis of estimates that should not have been made? If the share price collapses, the academic still has his job at the university. The university has not got its expected slice of the action but is not responsible for the newly floated company. The merchant bank and the entrepreneur have probably got their small percentages of fees from the flotation, but may well be reluctant to invest in the future. The real sufferers, however, are the small private investors who held shares in the company. Should the regulatory authorities take a closer interest in the contents of any prospectus that is used to raise money? If suitable warnings are not given in a prospectus, is it the fault of the laws under which the regulatory authority operates, or is it a failure on the part of the authority to exercise powers that it possesses? Does the fault lie with the financial institution that makes a public offer without checking sufficiently on what is said in the offer? Do we need a statement to be metaphorically "stamped" on any new offering that it may not be suitable for small private investors? I submit that LES members, who may be involved in one way or another with an exciting new flotation, should be very careful to warn clients about the risks involved. After all, if something goes wrong, an aggravated party may try to hold them responsible. Do you carry sufficient professional insurance? MICHAEL BURNSIDE (All rights reserved). Top
Nominet's New Dispute Resolution Procedure
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| Dawn Osborne Email: dawn@iprights.com |
Tony Willoughby Email: tony@iprights.com |
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LES Scotland Region
Super Models
The Scottish Branch's "Super Models" meeting looked at 3D-models as a communication tool in the technology transfer and commercialisation process. Held at the Rapid Design and Manufacturing Centre (RDM), it was an opportunity for the 48 attendees to learn about sophisticated prototyping methods from Gerard Ryder, Centre Manager. David Gow, Director of Rehabilitation Engineering Services, Lothian Primary Care NHS Trust and inventor of the most sophisticated electronic arm in the world, provided a moving (in all senses of the word) example of the value of accurate models for evaluation and trials. All were then able to tour the Centre and watch models being made, on subjects as varied as jaw bones, buggy handles, building restoration and aluminium tooling.
The evening was certainly to prove an immediate success for one attendee. Dr Richard Halpin, who was attending only his second LES event, found himself in urgent need of a rapid prototype the next day.
Richard, a consultant general surgeon, has invented a highly innovative surgical device that has already won a John Logie Baird Award for innovation. The device has applications in a variety of surgical uses, including trauma surgery and transplantation. The day after the LES event Richard received a phone call informing him that he had been Highly Commended in a competition run by Medical Futures and sponsored by Johnson & Johnson. The phone call also invited him down to London the following week for the prize-giving by Nicola Horlicks. However, the organisers were very keen that Richard bring down a model of his invention. From what he had seen and learned the previous evening Richard was able to get some rapid prototypes made in a matter of days. "Without a doubt if I hadn't been at the LES event I would not have had the information which enabled me to understand the concept and then source these rapid prototypes so quickly. I'm extremely grateful to the LES (Scottish Branch) for organising the demonstration and you can rest assured I'll be attending all their events in the future!"
Caroline Sincock
Chair, Scotland Regions
- The RDM is a joint project between four Glasgow higher educational establishments and aims to provide cost- effective access to rapid prototyping for research and education. It is certainly an excellent way to introduce the group of technologies known as rapid prototyping and first-stage tooling technologies that create 3D models layer by layer for sectors as diverse as biological sciences to mechanical engineering, from high street consumer products to the ITC industries.
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News from LES International
Over the years LES B&I has provided many of the executive members of LES International. We encourage you all to join LES committees, both locally and internationally. You will find closer association with the society rewarding both professionally and personally.
Barry Quest accepts poisoned chalice!
At the recent International Delegates meeting in Capetown, nominations were announced for the executive members of LES International who will take office, subject to ratification by international delegates, at the next international meeting at Palm Desert in October.
The presidency will pass from Ed Shalloway (LES USA & Canada) to Thierry Sueur (LES France), and Barry Quest (LES Britain & Ireland) will take over from James Leavy (LES France) as International Secretary, thereby preserving what has become a near European monopoly on this office. Previous incumbents have included Donal O'Connor and Renate Siebrasse (both LES Britain & Ireland).
Is it only Europeans who feel comfortable with the administrative duties of this office? More likely, and as was suggested by one South American delegate, it seems to be easier to talk the Europeans into accepting this particular "poisoned chalice"! As another delegate commented, "in addition to the normal duties of circulating reports, agendas, minutes etc., the International Secretary is usually expected to deal with everything, which nobody else wants to deal with"!
Donal, Renate and James along with the LESI Communications Committee (chaired by Barry Quest) have all spent time modernising the reporting procedure and now almost all paperwork has 'disappeared'. All documentation is posted on a confidential page of the LESI website and delegates are given, by email, the address from which they can read, download and print it out (or store it on laptops) - whatever they require. Committee chairs are now encouraged to post their reports directly onto the form-based interactive committee section of the LESI website.
Barry Quest is a senior partner of patent and trademark attorneys Wilson Gunn which has offices in Manchester, Birmingham and London. He has long been involved with LES and, amongst other positions, has been President of LES Britain & Ireland. He sees his prospective position as International Secretary of importance to his personal interest in licensing and also in continuing the tradition of involvement of Britain & Ireland members in international matters.
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The LESI Website
The LESI website is the responsibility of the International Communications Committee, currently chaired by Barry Quest (LES Britain & Ireland). The site was first established by the previous chair, Crispin Marsh (LES Australia & New Zealand) working with our British-based Internet consultant, Roger Tully. The site has now grown considerably; much information and many interactive features have been added, and it is well worth visiting, or re-visiting.
The site can be found at www.lesi.org and a password is required to enter the members' section. If you haven't got one you can register online and it will be sent to you promptly by email. Once you have got a password you can change it instantly on the site to something more memorable.
The members' section contains a complete site map and search facility. It is easy to find your way around and see what is available.
In particular, have a look at these features:
- Members links: a searchable database of members offering their services (as lawyers, patent attorneys, licensing consultants etc) - is your company there?
- Helpful links: an up to date list of websites of international public bodies relevant to licensing.
- Newsletters: online access to newsletters of LES societies around the world - including our own News Exchange.
- Speakers database: a searchable database of people who have spoken at LES conferences with details and, in some cases, complete presentations.
- Who's Who: a searchable database of LES members holding office or involved in international committees.
- Members directory: interactive online access to the international list of members (all LES societies). You can search for individual members, and you can call up your own entry and update the details. A password is required which can be obtained online.
- What's on: a list of conferences and meetings around the world.
- Committees section: each international committee has its own page and reports are posted directly onto the website. Have a look at the different committees, see what they are up to and if you are interested contact the chair and ask to join. You will be welcomed.
- Submission section: this includes an online interactive form. Committees use this to post their reports. Any member is welcome to use the facility to post any relevant comment, question or request. Try it out. Full instructions are given on the site, but don't worry about getting it wrong; any mistake can be corrected simply by clicking on the email button to send a message to our ever vigilant Internet consultant.
…. And much more.
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Disruptive Elements
It has been suggested to me that News Exchange should provide space for LES members to air their thoughts. Therefore the purpose of this new column, Disruptive Elements, is to give anybody who wants a chance to voice their opinion under anonymity, at least nominally so, about things which concern them. One of the great advantages of writing a column is that you are not expected to be objective! We all have our pet hates and horrors as well as our hobbyhorses. However, the main thing to appreciate in writing this column is the intention to provoke, and if you do not like what is said, then write in and disagree!
Mary Elson
licensing and, if so, what should it be?
The arguments against any type of qualification are immediate and obvious. You will hear them trumpeted out every time anybody suggests it. They usually start with, "Our skills are as diverse as are our objectives in being a member of LES". However, that is not the same as saying you should not have a qualification. There is no reason, in my view, why you cannot be a member of LES without having a specific qualification in licensing. There is no doubt that LES members come from a variety of backgrounds including:
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Some are in industry and some in private practice. So, "how can we possibly have a qualification?"
The next concern is usually, "are we endorsing those with qualifications as being experts in licensing?" Not at all! Nobody suggests that when a university grants degrees in engineering they are certifying that the bridges built by the engineer will not fall down!
Clearly, the most difficult argument to combat is how do you have an all-embracing qualification? I am a qualified mechanical engineer and the amount I know about chemical engineering would fill a nanolitre. However, I am still an engineer! I believe we could have many modules in a course on licensing and we could insist that people with particular skills should take modules in other areas to complete their qualification. There is no point, in my view, in teaching a lawyer contract law but I think there is a considerable benefit in teaching lawyers something about technology and something about the practicalities of licensing and what may go wrong. Anybody with any experience of licensing will know that 90% of all licence agreements are seriously defective in that they do not deal adequately with the commercial aspects of the contract. In fact they are often invitations to disagree! They are usually very good on arbitration, governing law, terms of payment, and so on, but they often have major gaps in the practicalities.
In my experience, many lawyers do not understand patents and the interpretation of claims. I am astonished at how often people, who are quite skilled in licensing, will licence products for their clients without sitting back and asking, "just how strong is the protection of the patents that we are licensing?" They do what they believe is a due diligence but you must ask the question - "do they fully understand what they are doing?" I think in many instances, they do not. Then we have the commercial areas, royalty rates, valuation of technology, and so on. Many of us are seriously deficient in this area. It is my opinion that, for the lawyer interested in licensing, a good commercial and practical rundown on intellectual property and patents in particular would be of great value. Similarly, for the non-lawyer, I believe that a basic grounding in contract law and competition law would be a great advantage, whereas, modules on negotiation skills would be of benefit to everyone.
Having said all that, the immediate cry must be - "why bother"? We can acquire this knowledge at various talks and conferences. However, as anybody knows, unless there is an examination at the end of something, most of it goes in one ear and goes out the other!
I know this from my own experience. I am very interested in wine and, for many years, I toyed with going on various wine appreciation courses until one day, I decided - yes, I needed to go on one. Then, I made the even more important decision. I realised that it was pointless until I did something with an examination at the end of it. I may have forgotten 90% of it within two years of the exam, but once I have reached an acceptable level of qualification, then I never forget the basics. I ended up by doing some certificates for the trade and I have to say that sitting the examination was what really made me learn it. So, my question to you, the reader of this column, is how do we go about it? Is it worthwhile or am I talking absolute rubbish?
A LES member.
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South African Government Legislation - an update
A court action brought against the South African Government by a group of multinational pharmaceutical firms has been withdrawn.
As reported in the last issue of News Exchange, the Pharmaceutical Manufacturers' Association of South Africa (PMA) was seeking to prevent the implementation of new legislation, which it said would undermine its members' intellectual property rights. The action was abandoned by the PMA after an agreement was reached with the Government over the issue of the pricing of drugs.
The PMA's withdrawal of its application to have certain provisions of the Medicines and Related Substances Control Amendment Act 1997 declared unconstitutional brought to an end a protracted and costly legal battle that has attracted much adverse publicity for the pharmaceutical industry. At the heart of the case was the proposed Section 15C of the Act which, if adopted, would allow the parallel importation of patented drugs in certain circumstances. This, argued the PMA, would deny its members their rights in pharmaceutical patents. Now that the case has been withdrawn, the disputed Section 15C seems almost certain to be brought into effect, although the PMA did at least gain assurance from the Government that the new law will meet with the requirements of the TRIPS agreement.
The out-of-court settlement was greeted with some enthusiasm by the many Aids charities and aid agencies that had campaigned in support of the Government of South Africa. They maintain that the new legislation is central to the provision of affordable treatment for the millions of South Africans infected with HIV. However, the particular circumstances in which the Government will sanction parallel importation of patent-protected medicines have yet to be properly defined, and at present no implementing regulations have been drawn up. It may, therefore, be some time before the parallel importation of patented drugs into South Africa begins to take place.
Dr. Michael Douglas
Wilson Gunn M'Caw (Bioscience Unit)
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New Members
Council has been pleased to welcome the following new members to the Society:
- Mr John Allen, Manager, Madge Networks BV;
- Mr Alan Bryson, Partner, Clifford Chance;
- Mr Bruce Burniston, Consultant, John Collins & Partners;
- Mrs Janice Clayforth, Head of Bibliographic Data Licensing, The British Library;
- Dr Alan Fernyhough, Manager - Technology & New Business Development, Kobe Steel Europe Ltd;
- Dr Adam Hajjar, Senior Technology Transfer Exec., Freemedic plc;
- Ms Linda Polik, Business Development Executive, Stirling University;
- Ms Christine Rinik, European Intellectual Property Counsel, Invensys plc;
- Ms Eleanor Taylor, Manager, Proof of Concept Fund
NEWS Exchange is circulated as a service to members of the Society. Editorial contributions and advertising/insert enquiries are welcome and should be addressed in the first instance to the editor.
Editor: The Kudos Partnership Ltd,
Emerson Court, Alderley Road, Wilmslow, Cheshire SK9 1NX
email:s.ireland@kudos-uk.com