There have been a number of recent cases in the Patents County Court for England and Wales which have affected the world of art. The “red bus” decision has attracted the most attention but another case, Hoffman v D.A.R.E, regarding the application of the “innocent infringer” defence and calculation of damages awards for infringement of photographs is, perhaps, of greater practical significance for photography professionals and artists generally.

This was a case where the finding of infringement was relatively straightforward. 19 of Mr Hoffman’s photographs had been used on the defendant’s websites, D.A.R.E did not have Mr Hoffman’s permission to use the images. However, it mistakenly believed that it had a right to use the photographs because they appeared on a Department of Health website and consequently were assumed to be covered by Crown copyright.

The innocent infringer

D.A.R.E claimed that it had not paid Mr Hoffman because it “had not intentionally or knowingly infringed his copyright”. However, the fact that D.A.R.E thought that it had permission is not a defence under section 16 of the Copyright Designs and Patents Act. [Section 16 sets out the various acts that constitute copyright infringement]. By hosting the images on the various websites, D.A.R.E was found to have communicated the works to the public (section 16 (1)(d) as set out in more depth in section 20(2)(b)).

D.A.R.E then sought to rely on section 97 which appears to offer a defence to infringers who are “innocent” of the infringement. As the judgment points out, this is not strictly speaking a defence but rather a bar to damages.

Although D.A.R.E understood that it had the right to use the images, this was not sufficient to rely on the innocent infringer test. As the judgment explains:

“None of this [belief that D.A.R.E had the right to use the images] amounts to a defence under s.97. [D.A.R.E.] understood it had permission under what it understood to be the relevant copyright.This is a very different thing from an argument that the defendant had no reason to believe copyright subsisted at all…. To believe that one had permission under (in this case) Crown copyright is the opposite of a belief … that there is no copyright in existence.” (my emphasis).

This places the requirement for satisfying the innocent infringer test as extremely high and it is hard to think of many occasions where it can be relied upon. Given the low threshold for artistic works, reliance on this defence is likely to only apply where a work is so old that it is reasonable to assume that it has fallen into the public domain.

What’s the damage?

Mr Hoffman assessed his damage as £250 per photograph per year (i.e. £19,000 over the four years that the photographs were on the websites). He also claimed an additional 50% uplift for the use of thumbnails on the websites. This was not the correct approach. Rather “the right sum by way of damages is the sum which a willing photographer in Mr Hoffman’s position and a willing user in D.A.R.E’s position would have agreed upon”.

In reaching the assessment of damage, the judge made the following observations:

“the parties would have agreed a single fee to use an image, having regard to the period of use. I do not doubt the fee would have been larger for a longer period of use but it would not” be the same amount for every year of use.

“it seems to me unlikely that a further fee … would be agreed for thumbnails of the very same image.”

He ultimately reached a figure of £10,000 in damages with interest calculated at 4% (i.e. 1% above the average base rate for the period).

Whilst the exact basis for this sum is unclear, the factors which went into the decision making process are set out above. Finally, it is worth remembering that D.A.R.E was a UK charity [it is now insolvent], this may have influenced the amount awarded.

Are you a photographer? How much would you charge for the use of 19 photographs on two websites? Would that amount change if you were negotiating with a charity? Any other insights into the quantum of copyright are, as always, greatly appreciated.

Source:

http://aandalawblog.blogspot.com.au/2012/02/he-who-dares-infringe-copyright-fails.html

As many readers will be aware, Australia has a pre-grant opposition procedure which can be used to challenge a decision of the Australian Patent Office to issue a patent.  Opposition proceedings are conducted before the Patent Office, and are initiated by the opponent filing a Notice of Opposition.

There is, however, only a limited time period within which to oppose an application once it has passed examination.  Specifically, details of the accepted application are published in the Australian Official Journal of Patents, and the official publication date (which is also listed in the AusPat database record for the application) commences a three-month opposition period.

Once the opposition period has expired, it is generally no longer possible to oppose the application.  In exceptional circumstances, an extension of time to lodge a Notice of Opposition may be available, however once the patent has actually issued there is no longer any possibility of opposing, because the grant of a patent is not reversible.

So what can be done about granted patents which are of doubtful validity, and which may be of concern to another party operating within the Australian market?  There are two options available in this situation:

1. requesting re-examination by the Patent Office; and/or
2. commencing revocation proceedings in the Federal Court of Australia.

The procedures, pros and cons of each are discussed in this article.

RE-EXAMINATION

Re-examination is initiated by filing a request, along with the required official fee (currently A$800.00).  The request must include copies of the prior art documents relied upon by the requester and, for each document, a statement explaining the relevance of the document to the patent claims, i.e. why each claim is either not novel, or not inventive, in view of the document.

Unlike the current US re-examination procedure, there is no requirement to establish a ‘substantial new question of patentability’.  In Australia, all re-examination requests are automatically granted.

An examiner will then reconsider the claims in light of the request and accompanying submissions and, if persuaded that there are possible grounds for revocation of one or more claims, issue a re-examination report to the patentee.

The process is essentially ex parte, i.e. after the initial filing, the requester takes no further part in the proceedings.  However, since anyone is entitled to request re-examination (including a patent attorney), it is possible for the actual interested party to remain anonymous.

There are, however, some significant limitations to the re-examination process (additional to the inability of the requester to intervene after the initial request has been filed):

1. re-examination can only be based on grounds of lack of novelty or obviousness – no other matters that would have been grounds for refusal during examination or opposition can be raised in re-examination;
2. the prior art that can be submitted is limited to published documents – for example, a prior public use which is not also covered by an enabling disclosure in a published document cannot form the basis for re-examination; and
3. for various legal and practical reasons, it is extremely difficult to succeed in a re-examination based on obviousness.

Re-examination is therefore only a truly viable option if the requester has clearly novelty-destroying prior art in the form of published documents.

The cost of re-examination depends largely on the number of documents relied upon, and the number of claims challenged, since these determine the amount of work that must go into the initial submissions.  A typical re-examination submission prepared by a professional agent (i.e. an Australian patent attorney) might cost A$4000.00-A$5000.00, however it is not unknown for a re-examination request to cost well in excess of $10,000.00, with absolutely no guarantee of success.

Re-examination proceedings are generally resolved, one way or another, within a matter of months.

REVOCATION PROCEEDINGS

Revocation proceedings are initiated by filing an application with the Federal Court of Australia.

The Federal Court can consider all grounds of invalidity, and all forms of prior art, including prior public or commercial use, which may be evidenced by witness testimony and documents which may not themselves have been publicly available at the time, but which nonetheless help to establish what was in public use.

An application for revocation can be filed preemptively with the court.  There is no requirement for there to be an existing dispute or controversy, or for the applicant to have any expectation that the patentee may commence infringement proceedings.  However, if there are convincing grounds for revocation of the patent, it may be an effective strategy to contact the patentee before commencing court action in an effort to negotiate a settlement, which could include persuading the patentee to voluntarily amend the patent, or to grant a royalty-free license.

The cost to prepare and file an application with the Federal Court is typically in the range of A$10,000.00-A$20,000.00.  Costs from that point depend upon the nature and complexity of the asserted grounds of revocation.  A case in which a lack of inventive step is asserted (which under Australian law is heavily evidence-based) could easily run to A$150,000.00 or more.

Revocation proceedings, from the time of filing of an application with the court, to the time of a final decision, would typically run for between one and two years.

It is worth bearing in mind that if the revocation application is potentially infringing the patent in Australia, revocation proceedings could be a risky option.  As a practical matter, the true party in interest in court proceedings cannot remain anonymous, and in appropriate circumstances the patentee may use the proceedings to file a cross-claim for infringement of the patent, which may significantly increase the complexity and cost of proceedings.

In Australia, unlike (say) the US, it is usual for the court to make an award of costs against the losing party.  This is a two-edged sword for the revocation applicant.  If successful, it is possible that the court may order the patentee to pay a substantial proportion of the applicant’s costs of the proceedings.  On the other hand, failure means potentially having to pay the patentee’s costs of defence in addition to the costs of the unsuccessful revocation efforts.

SUMMARY

In summary, the pros of re-examination are:

1. relatively low cost;
2. anonymity is possible; and
3. speedy resolution.

The cons of re-examination are:

1. limited grounds;
2. limited prior art (documents only); and
3. poor prospects of success, except in very clear cases of anticipation.

Pros of revocation proceedings in court are:

1. all grounds available; and
2. no limitations on prior art or evidence.

The cons of court proceedings are:

1. cost;
2. no anonymity;
3. slow resolution; and
4. risk of retaliation.

It should be noted, however, that an opposition – which ought to provide a compromise between these two extremes, if filed in time – is not without risks and disadvantages.  An opposition can become expensive, and the standard of proof required of the opponent is, in fact, higher than in revocation court proceedings.

Anybody considering an attack on a patent or application which is causing concern is therefore very strongly encouraged to seek professional advice specific to their circumstances.  Yes – lawyers and patent attorneys always say this about everything.  But that is because it is generally true!

In October 2010, the Bundesgerichtshof (“BGH”), Germany’s highest court in civil law matters, decided in the ‘AnyDVD’ case (case reference I ZR 191/08) a lawsuit brought by several music companies against Heise Verlag, an online publisher specializing in IT and computer news (see the IPKat’s earlier report here).

The music companies took objection to reports published on Heise’s website which included links to a third party website (“SlySoft”) that offered software that allowed circumventing copy protection for DVDs. While the lower courts, the Regional and Higher Courts of Munich I, had held that Heise’s online reports were itself copyright infringing, the BGH took the view that adding the links on Heise’s website which linked to SlySoft’s website — where SlySoft offered copyright right infringing software — was covered by the constitutional right of freedom of press and freedom of opinion under Article 5(1) German Constitution. By way of further background: the ‘AnyDVD’ decision is, inter alia, based on Article 95 a German Copyright Act which is based on Article 6 of the Copyright Directive (Directive 2001/29/EC) (“Obligations as to technological measures”).

On further appeal, the Bundesverfassungsgericht (German Federal Constitutional Court), Germany’s highest court, has now confirmed the BGH’s decision (case reference: 1 BvR 1248/11 of 15 December 2011, full German text here) and agreed with the lower court’s balancing of Intellectual Property Rights and freedom of press and freedom of opinion. In summary: placing a link to a third party website on one’s own website “could not only be interpreted as a mere technical service and thus in isolation, but was due to its character of providing information” also covered by the constitutional guarantees of freedom of press and freedom of opinion. The Bundesverfassungsgericht thus agreed with the BGH, which had held that purpose of the links on Heise’s website was not only to technically facilitate to access the SlySoft’s website but the links were to be regarded as part of Heise’s reporting because they were complementing and ‘backing up’ what was reported with additional information. The BGH had also held that the fact that Heise was aware that the software offered on SlySoft’s website was copyright infringing did not change this and so could not be blamed on Heise since the information interest of the general public was of higher importance.

In its appeal decision Bundesverfassungsgericht stressed that by placing the link to SlySoft’s website on its own website, Heise did not automatically make the content of SlySoft’s website its own opinion. Finally, the Bundesverfassungsgericht poined out that the BGH had correctly balanced the conflicting rights when it had found that Heise’s placing of the link did not further encroach (“no deepening of the encroachment”) in the claimant’s copyrights since SlySoft’s website could very easily be found via an Internet search engine anyway.

A rather complex decision – neatly argued by the court in only 38 paragraphs. No further appeal is possible (within the German court hierarchy….).

Source:

http://ipkitten.blogspot.com.au/2012/02/german-constitutional-court-confirms.html

A reporter called me the other day on the Apple-Proview trademark kerfuffle. She kept wanting me to give her a quote on what foreign companies should take away from this dispute and I kept parrying with her, unable to give her just one. I kept finding myself saying “it’s probably more complicated than that.”

Let me back up a bit. As many of you no doubt know, Apple is in a massive trademark fight with a Shenzhen-based company called Proview. Near as I can tell, the facts are as follows:

• Proview-Shenzhen registered the iPad trade-name before Apple had ever manufactured an iPad.
• Proview-Taiwan (a Taiwanese company that is not the same company as Proview-Shenzhen) entered into an agreement with Apple (or, more accurately, a company acting on Apple’s behalf) to sell its Asian iPad trademarks to Apple.
• Apple claims that agreement with Proview-Taiwan included the PRC iPad trademark, but Proview is claiming otherwise.
• Apple sued Proview (I think Proview-Taiwan, but I am not sure) in Hong Kong and the Hong Kong court ruled that Apple is entitled to use the iPad trademark on the Mainland.

Here is where it gets so complicated and here is how I see it:

• Proview-Shenzhen still shows up as the owner of the iPad trademark in China.
• It is not clear if Proview-Shenzhen ever contracted with Apple to give Apple the China iPad trademark or any sort of license to use that trademark.
• It appears that Proview-Taiwan did enter into some sort of trademark sale or licensing agreement with Apple (again, actually the company acting on Apple’s behalf), but since Proview-Taiwan did not own the PRC trademark for iPad, there are some real issues as to the validity of such a sale or license.
• Did Proview-Taiwan have any interest in the PRC iPad trademark such that it could transfer or sell that interest to Apple?
• Did Proview-Shenzhen ever agree to sell or license its iPad trademark to Apple?

What I find really difficult to believe is that Apple and/or Apple’s attorneys would have done a deal to acquire rights to the iPad trademark in China without having done real due diligence on that trademark. Basic due diligence would have revealed that the PRC iPad trademark was registered to Proview-Shenzhen and at that point, Apple would have required Proview-Shenzhen (not Proview-Taiwan) sign on to the contract to assign or license the PRC mark. So the first thing to be learned from this (maybe) is to do your due diligence and make sure that when you are buying something or securing a license to something that you are in fact doing so with the company that is actually authorized to sell or license that item.

This all came to the fore when Proview-Shenzhen started asking trademark officials in various Chinese cities to start pulling iPads from store shelves because those iPads infringe on Proview-Shenzhen’s trademark.  Some cities are pulling iPads from store shelves and this is obviously not good for Apple. [Full Disclosure: I have a disproportionate percentage of my retirement savings wrapped up in Apple stock]. Some cities seem to be refusing to do so, in what appear to be political, not legal, reasons.

Now Proview-Shenzhen is saying that is going to ask China customs to block exports of Apple’s iPads from China because they infringe on Proview-Shenzhen’s trademark. The media (and even Proview-Shenzhen itself) seem to believe this will not happen because it would look so bad for China politically. This is where the real lesson lies. If you are not Apple, I can pretty much assure you that all of your iPads would be off the shelves in China by now and they would also not still be leaving China via export. The real lesson then is on how to prevent this from happening to “your” trademark and that lesson is really quite simple. If you want to avoid your product getting pulled off shelves in China and/or prevented from leaving China, make sure that the trade-names and trademarks you put on your product (or on its packaging) are actually registered (or licensed) to you in China. And just to be clear, “in China,” for purposes of China’s trademark law, does not mean in Hong Kong or in Taiwan or in Macau or in the United States or in Australia or in any other country. If you want China trademark protection, you must register the trademark in China.

For more on China trademark law, check out the following:

• File Your Trademark In China. Now.
• How And Why To Trademark In China
• Hey Sucker, We’ve Got Your China Trademark And You Are Goin’ Down
• Who Should Own Your China IP? Maybe Not You
• China Trademarks. Do you Feel Lucky? Do You?
• China Trademarks. Do You Feel Lucky? Do You? Part II
• China Trademarks. Do You Feel Lucky? Do You? Part III

Here are some articles for those who want to read more about the Apple-Proview fight:

• Proview calls on Chinese customs to end iPad import and export (slashgear.com)
• The iPad is too big to ban in China, authorities tell Proview (venturebeat.com)
• Proview Admits It Will Be Hard To Get iPad Export, Import Ban Imposed (socialbarrel.com)
• Apple could buy its way out of Chinese iPad ban hints Proview chairman (slashgear.com)

Just don’t say we didn’t warn you.

UPDATE: Stan Abrams over at China Hearsay has two great (recent) posts on this dispute. The first post, “Apple vs. Proview: The Assignment Agreement!” contains Stan’s analysis of the Trademark Assignment Agreement between Apple (actually it’s stand-in entity) and Proview. Stan does a great job of analysing the Assignment Agreement, which really is by far the key issue involved in the case. I completely agree with all that Stan says about the Agreement and I add one thing to it. If you think you can properly assign a Chinese trademark without using an experienced attorney to draft the contracts and oversee the agreements you are wrong. And if you think that after reading Stan’s post, you are flat out crazy.

The second post, “What Have We Learned About China’s IP System? Answer: nothing,” posits that the issues in this matter involve a commercial dispute, not IP. I generally agree with this. The heart of the issue is how you secure ownership or rights to someone else’s trademark.

Source:

http://www.chinalawblog.com/2012/02/apple_v_proview_so_much_to_learn.html

Dramatico Entertainment Ltd & others v British Sky Broadcasting Ltd & others [2012] EWHC 268 (Ch)(20 February 2012) is today’s big British copyright news. Mr Justice Arnold, sitting in the Chancery Division, England and Wales, gave judgment. This blogger hasn’t yet had a chance to read the details, but this is how Music Week saw the ruling:

“The UK record industry has today claimed a major victory in its fight against the Pirate Bay – with the High Court recognising that the site’s owners and users are operating illegally.

Claimants represented by the BPI – including Dramatico, EMI, Polydor, Rough Trade and Warner – argued that the UK’s leading six Internet Service Providers should block the filesharing site. Defendants including BT, TalkTalk, Sky and Virgin Media did not attend the hearing and were not represented.

In a written [84 paragraph] judgment handed down earlier today, Mr Justice Arnold ruled that “both users and the operators of TPB infringe the copyrights of the Claimants (and those they represent) in the UK”. He added [in paragraph 81]:

“In my judgment, the operators of TPB do authorise its users’ infringing acts of copying and communication to the public. They go far beyond merely enabling or assisting. On any view, they ‘sanction, approve and countenance’ the infringements of copyright committed by its users. But in my view they also purport to grant users the right to do the acts complained of. It is no defence that they openly defy the rights of the copyright owners. I would add that I consider the present case to be indistinguishable from 20C Fox v Newzbin [here] in this respect. If anything, it is a stronger case”. …

A further hearing is now set for in June to decide which ISPs should block the site, and how”.

Source:

http://the1709blog.blogspot.com.au/2012/02/pirate-bay-stronger-case-of.html