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Talk this evening 6.15pm @BPPLawSchool Holborn on innovation implementation in technology
This evening, I will be giving a presentation in room 2.6 here in the BPP Law School, Holborn, on disputes involving Apple, Samsung and HTC involving tablets and smartphones.
The learning objectives of this talk are as follows:
- To give an overview of two disputes in intellectual property between multi-national parties in the technology sector.
- To contextualise the importance of two intellectual property rights (patents and design rights) in how multinational companies create ‘competitive advantage’.
- To improve the “commercial awareness” of applicants for training contracts this summer.
I wished to give an explanation of how multi-national companies involved in technology use innovation to create competitive advantage to generate profit, but look at it from the perspective of the industry of intellectual property protection in the form of design rights (tablet) and patent (“slide-to-view” mechanism of smartphones).
The handout for this talk is here.
Students on the LPC might find the talk interesting as these intellectual property rights have been introduced on the Legal Practice Course special elective on commercial law and intellectual property. The subject-matter is also a valid topic for a recent interesting example of ‘commercial news’, which might be aired in the training contract application form or in the interview itself.
A “calico” – all will be revealed….
Music copyright: hitting the right note?
Photo of camper van kindly supplied by iStock Photo as a royalty-free image
Copyright is a fascinating area of intellectual property law. There has been a range of different discussions, from whether Tweets are copyrightable, to who actually owns the copyright of images of people who are photographed (such as the famous Robert Doisneau image). A full description of the background to the law of copyright is provided here.
There are a number of interesting examples of reported breaches of music copyright infringement, such as George Harrison vs Bright Tunes Music Corp., Michael Bolton vs the Isley Brothers, Johnny Cash vs Gordon Jenkins, Vanilla Ice vs Queen & Bowie, and John Fogerty vs Creedence Clearwater Revival.
In a famous case Ludlow Music Inc. v Williams (No. 2) [2002] EWHC 638, heard at the Chancery Division of the High Court, the material facts are introduced thus:
[para. 1] “The claimant, Ludlow Music Inc. (“Ludlow”) is the owner of the copyright which subsists in the works of the celebrated American musician Woody Guthrie. In 1961 Woody Guthrie composed the lyrics and music of a song called “New York Town”. In 1973, the songwriter Loudon Wainwright III composed a parody of Woody Guthrie’s lyrics called “I am the Way (New York Town)”, which was set to the same music. The claimant owns the copyright in the Loudon Wainwright III lyrics. The first defendant, Robbie Williams, is the well-known pop singer. With the second defendant, Mr Chambers, he is the composer of a composition whose title is “Jesus in a Camper Van”. Mr Nicholas Strauss Q.C. sitting as a deputy judge of the Chancery Division held on an application for summary judgment under CPR, Pt 24 (now reported at [2001] F.S.R. 271) that the lyrics of “Jesus in a Camper Van” infringed the copyright in the lyrics of “I am the Way (New York Town)”. There is no suggestion that there is any infringement of Woody Guthrie’s musical work. The judge reserved the question of damages to this hearing, in the light of an open offer which had been made by the defendants before the proceedings started.”
Proving the infringement is itself a very interesting affair. Part of this argument is addressed in para. 1 of Ludlow Music Inc. v Williams [2001] E.M.L.R. 7
“This was copied to Alison Rowden, EMI’s sampling/infringement manager, who states that she thought it was borderline whether a substantial part of “I am the Way” had been copied and whether copyright clearance was required. She wrote to Evelyn Sasko on August 21 enclosing a tape. She said:
With regard to “Jesus in a Camper Van”, you will note that its similarity to “I am the way (New York Town)” is lyrical only and is limited to two lines. Furthermore, the lyric we use is not exactly the same and in our opinion the context and the use of the two songs overall are very different. We feel that “Jesus in a Camper Van” contains elements inspired by, rather than directly copied from, “I am the way (New York Town)”.
In “Case No. 2″, as for the amount of damages, a very interesting discussion commences at para 37:
“Section 96 of the Copyright, Designs and Patents Act 1988 (the “1988 Act”) provides that in an action for infringement, and subject to the provisions of Chapter VI of the 1988 Act, “all such relief by way of damages, injunctions, accounts or otherwise is available to the plaintiff as is available in respect of the infringement of any other property right”. Section 97 makes provision for damages in infringement actions:
97.
(1) Where in an action for infringement of copyright it is shown that at the time of the infringement the defendant did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates, the plaintiff is not entitled to damages against him, but without prejudice to any other remedy.
(2) The court may in an action for infringement of copyright having regard to all the circumstances, in particular to—
- (a) the flagrancy of the infringement, and
- (b) any benefit accruing to the defendant by reason of the infringement,
award such additional damages as the justice of the case may require.
This case raises issues both as to the proper approach to damages for infringement generally and as to additional damages in particular.”
This discussion is pursued in para 38, where it is suggested that the notion that damages in copyright infringement actions compensate the claimant for the depreciation in the value of the copyright caused by the activity of the defendants is “not a particularly helpful formulation”. The judgement then argues that in General Tire v. Firestone [1975] 1 W.L.R. 819, [1975] R.P.C. 197, the principles are comprehensively set out by Lord Wilberforce.
For more on copyright, please follow Emily Goodhand, @copyrightgirl, on Twitter.
National Audit Office report: Implementing transparency
Implementing Transparency Report from the NAO
Data are of course massively important to business clients making commercial decisions, and of course to the lawyers advising them. Data management is also a huge aspect of the academic and practitioner work in intellectual property.
According to the National Audit Office, “In some sectors, data that would better inform accountability or choice is either not held or not yet made available. For example, in social care, neither the Department of Health nor its funded bodies collect appropriate information on comparative costs and performance of providers of home care for adults. For local government services, the Government has discontinued established performance frameworks and the Local Government Association is developing a new approach to performance reporting.”
According to the aforementioned press release, Amyas Morse, head of the National Audit Office, said:
“Opening up access to public information has the potential to improve accountability and support public service improvement and economic growth. What the Government is lacking at the moment is a firm grasp of whether that potential is being realised. If transparency initiatives are to be more than aspirations, then Government needs to measure and monitor both their costs and benefits. This is vital for tracking success and learning what works.”
The Guardian has reported on the following aspects:
“Read between the lines of its report out today, Implementing Transparency, and you will see a government which has been chucking out tonnes of data, that no-one looks at and without a complete strategy. Oh and it’s cost an awful lot of money.”
Specifically, their recent article provides the following:
- Government departments reckon on spending from £53,000 to £500,000 each year on just providing and publishing open data
- data.gov.uk was originally run by the Central Office of Information and received funding of £1.2m in 2010-11 from the Department for Business, Innovation and Skills. In 2011-12, the project was brought inside the Cabinet Office, and what the report calls “further engagement activity with stakeholders” increased the annual running costs to £2m
- The police crime maps cost £300,000 to set up and have annual running costs of more than £150,000. The National Policing Improvement Agency has budgeted £216,000 in 2011-12 to further develop the site, including linking crime data to police and justice outcomes
This does not seem to be matched by public interest. For example, also according to that Guardian report:
“While data.gov.uk has had more than 1.75m visits since it was launched in January 2010 (which is pretty much what the Datablog gets in a good month) most of its visitors leave from either the home page or the data page on the website. Page views for transparency data on the Ministry of Justice website represented just 0.02% of the overall site traffic from April to September 2011″
America Invents Act 2011 – a long way from Lincoln
The history of innovation in the US is formidable. Abraham Lincoln had an avid interest in cutting-edge technology. As an attorney, he represented railroads. During the Civil War, he frequented the telegraph office (which provided the instant-messaging of its day) for the latest news from the front, and was actively involved in directing troops. He encouraged weapons development and even tested some new rifles himself on the White House lawn. He is, in fact, the only US president to hold a patent (No. 6469, granted May 22, 1849). It was for a device to lift riverboats over shoals.
The US is very proud of its record on innovation, more than its history in innovation, some might say. In his 2011 State of the Union address, President Barack Obama, championing US innovation, research and development, called on Americans to “win the future“, This, he said, is “our generation’s Sputnik moment.” The Senate approved a sweeping reform of the nation’s patent laws on Thursday, sending to Obama an Act that changes the system for determining priority for inventions at the patent office, and provides more financing for an agency beset by application backlogs and outdated computer systems.
State of the problems
It now takes, on average, two years to get a preliminary ruling on an application, and an additional year for final grant, according to the US patents office. The Internet age, furthermore, has created a surge in applications: in 1997, 2.25 patents were pending for every one issued, but by 2008 the rate had nearly tripled, to 6.6 patents pending for every one issued, according to patent office statistics. A backlog of about 700,000 applications is made worse by computer systems that are out of date, according to Gary F. Locke, the current US Scretary of Commerce.
The America Invents Act (formerly the Patent Reform Act of 2011)is the product of extensive consideration. For four Congresses, the US have worked on this. A principal justification for the impending changes to patent law is that they will promote technological progress in the United States (and thus create jobs). It will possibly change America’s inventor-friendly patent system to favor whoever files for an application first. The House of Representatives passed their version of the Act on June 23, 2011 by a vote of 304-117. After rejecting proposed amendments to a bill approved by the House last June, the Senate voted 89 to 9 to pass the bill, completing an effort of at least six years to overhaul the patent office’s operations and the procedures by which patents can be challenged. The full text of the Act can be accessed here from JD Supra.
Some interesting key features of the new Act are as follow.
Changes to Novelty Rules
The shift to a first to file system is central to the America Invents Act. This provision has the potential to encourage early disclosures of information by the inventor. Although prima facie it appears to provide no more ability for inventors to engage in disclosures than the existing one-year statutory bar, under which an inventor was free to disclose whatever it wanted for the one-year period prior to filing, it perhaps may result in more disclosures than under the present structure. A disclosure race may be encouraged. It is perhaps rather simpler to award patents to the first person that files an application, regardless of whether or not they are the original inventor.
The new Act arguably favours big corporations who can file patents as soon as they hear about a new invention. Several groups representing small businesses, entrepreneurs and early-stage investors have said that change puts small companies, which usually account for the bulk of new jobs, and individuals at a disadvantage to large companies that employ fleets of patent lawyers. Many large corporations — like General Electric, Caterpillar and IBM — supported the bill, which opponents suggested was evidence that the bill favors behemoths at the expense of the little guy.
Creation of a Prior User Defense
Even as the changes to the novelty rules seem to encourage early peripheral disclosures of technological information, at least for US-only inventors, the creation of a prior user defense pushes towards less disclosure. The types of inventions that the prior user defense most applies to are those with the capability of being protected through secrecy. A prior user defense is less important for inventions whose workings are readily understandableM once they are placed on the market because these products already represent potentially invalidating prior art; thus, this type of defense is considered to have most relevance for non-self disclosing inventions, a category that includes many processes.
Elimination of Best Most Requirement
Section 15 of H.R. 1249 effectively eliminates the best mode requirement by amending the list of invalidity defense to exclude best mode While the best mode requirement remains in 35. U.S.C. 112, and thus theoretically could be used by a patent examiner to reject an application, failure to disclose best mode may also not be a basis for holding a patent unenforceable any longer.
Post-grant review
The Act currently contains a provision for an eight-year period of postgrant review of patents already issued. The measure was specifically aimed at so-called business method patents, which provide protection for a unique method of performing a task. The measure was, in fact, heavily favoured by the banking industry, which has been beset by patent infringement suits over things like electronic imaging of paper checks.
The next London #tweetup
People will remember that I enjoyed very much the last legal #tweetup that I attended. The next ‘do’ will be at The Old Bank Of England, 194 Fleet Street, London, UK. London TweetingLegals (organised everytime successfully by Shireen Smith of Azrights – personal website of Shireen) is a regular meet-up in the capital to connect lawyers and related professionals, and law bloggers together. Azrights was set up to provide good value Intellectual Property (IP) focused, IT, and Internet law services of high-quality. It is dedicated to providing the innovations the market needs. These are indeed challenging times for professional legal services firms, and the alternative business structures, and the stakeholders within them, as well as, of course, clients, customers, and the general public.
Shireen has a very relevant post here, how lawyers should perhaps position themselves in the new deregulated market.
Are lawyers getting it right giving free advice to prospective clients to impress them with their lawyering skills
For more information contact Shireen Smith, of Azrights info@azrights.co.uk,
To come along, please go to this page. The event is on September 26th, roughly between 6.30 and 9 p.m.
The Amazon "1 click" patent
Telstra Corporation Limited v Amazon.com, Inc [2011] APO 28 (9 May 2011)
The patents and patent applications directed to Amazon’s ‘1-click’1 online shopping concept have attracted substantial controversy around the world, in particular in the context of the patentability of business process and software patents. The ‘1-click’ concept allows customers to make online purchases with a single click, with the payment information needed to complete the purchase previously provided by the user.
The Australian Patent Office has rejected Amazon.com Inc’s patent application for its 1-click ordering system after a successful opposition by Telstra Corporation Limited.
Therefore, the decision gives Amazon a clear indication of how it can amend its patent application to overcome the rejection. This decision forms part of a long history of challenges around the world (most notably in the United States and Europe) to patent applications filed by Amazon for its 1-click ordering system which provides for a simplified process for purchasing goods online.
In Australia, the grant of Amazon’s application (AU 762175)2 was opposed by Telstra Corporation Limited (Telstra). The opposition was primarily on the grounds that the claimed invention was not novel and lacked an inventive step in light of a number of prior art documents, including one of Telstra’s own patents. The patent application claims a method for ordering an item in response to a single action performed to order the item.
Construction
Firstly, the construction of the term ‘a single action’ was considered, both with reference to the clarity of the claims and as being pivotal to the questions of novelty and inventive step. The opponent argued that the claimed ‘single action’ was unclear, and did not necessarily mean ‘only a single action’ (the wording used in corresponding US patent 5960411). The Delegate referred to the principles of construction as laid out in Décor Corp Pty Ltd v Dart Industries Inc [1988] 13 IPR 385, and with reference to the specification and dictionary definitions came to the conclusion that the claimed ‘single action’ does mean ‘only a single action’.
In this construction heavy reliance was placed on the description that ‘…the single action generally refers to a single event received by a client system that indicates to place the order.’ In light of this passage, the Delegate goes on to say that despite (semantically) being two actions, an action such as the double click of a mouse button would ‘clearly fall within the scope of ‘a single action’ as that term is to be understood in the claims’.
1-Click ordering is not new in light of Telstra’s “click-to-call” patent
Amazon’s patent application contained 141 claims. The Delegate of the Commissioner of Patents found that some of the claims (including the very broad first claim directed, quite generally, to a single action item ordering system) were not new in view of one of Telstra’s “click-to-call” patents, which Telstra filed before Amazon filed its patent application for the 1-click system.
Telstra’s patent describes a method of making a telephone call in which a person simply selects (clicks on) the telephone number they wish to dial in an electronic directory to place a call. Importantly, the method allowed the parties to the call to make prior billing arrangements, streamlining the calling process and allowing them to make a call in only one step. The Delegate considered the placing of a call to be the ordering of an item.
The Delegate referred to the ‘reverse infringement test’ for novelty, where infringement occurs when each and every essential feature of a claim is disclosed in the alleged anticipating document. Under the construction of the claims adopted, the Delegate found that 10 of the 141 claims did lack novelty in view of Telstra’s own patent.
Some claims not inventive in light of common general knowledge
The Delegate also found that claims 1, 2 and 4 – 61 were not inventive in light of the common general knowledge (“CGK”) known to persons skilled in the art at the priority date. Specifically, the Delegate accepted Telstra’s submission that:
- the display of order or item information for Internet ordering systems and the use of a web browser to access that display; and
- the use of, amongst other things, clicking a mouse button over a pre-defined area of displayed information to select information or send instructions,
formed part of the CGK.
The Delegate concluded that, in respect of claim 1, the “single action” was the only feature which was not already part of the CGK (“CGK”).
He found that, “as a matter of simple logic”, one way to ensure that customers could check-out more easily (a problem the invention was trying to address) was to reduce the number of steps involved in “checking-out”, ideally down to one step.
Interestingly, although the Delegate accepted Telstra’s submission that claim 1 permits there to be one or more additional actions prior to the “single action” claimed, in assessing whether the claimed system was new, the Delegate appeared to count the number of actions required to place the order. On that basis, he excluded a number of documents published before the filing date of Amazon’s patent application which included more than one action when assessing whether Amazon’s invention was “new”.
Inventive step
“Inventive step” was also considered.
Because the application was filed before 1 April 2002, combining two or more unrelated prior art documents or acts to establish lack of an inventive step was not possible. Consequently common general knowledge figured prominently in the case put forward by Telstra and evidence from experts in the field was extensive from both sides.
The Delegate referred to a number of approaches for determining whether the claims were obvious or not, advocating the problem–solution approach whilst being mindful of its limitations – particularly with respect to combination or simple inventions.3 Under this approach the Delegate found that the use of an identifier (such as a ‘cookie’) as defined by claims 3 and 62 to 141 was in fact inventive. This is despite the finding that cookies were, in their own right, common general knowledge at the priority date.
On this finding, 60 of the 141 claims which do not include the identifier feature were found to be invalid.
The future
As would be expected Amazon has been provided with an opportunity to propose amendments to the application to address the Delegate’s findings.
Perhaps what the outcome of this case emphasises is how important it is to bear in mind the common general knowledge and state of the art at the time a specification was filed. The widespread scepticism about how this kind of software implementation could possibly be patented is, arguably, based on the opinion that this solution must have been obvious given e-commerce, storing a computer’s details on a server, and the use of cookies were all known at the time.
Therefore, ultimately, although the Delegate found that a patent could not be granted for many of Amazon’s broader claims, Amazon concentrated its arguments on claims involving the use of cookies to enable 1-click ordering. The Delegate found that claims relating to the use of cookies were new and inventive when Amazon filed its patent application in 1997, and therefore deserving of patent protection. Subject to any appeal to the Federal Court of Australia lodged by Telstra or Amazon, Amazon can now amend its application and obtain a patent for claims relating to its use of cookie technology in the context of 1-click ordering.
Lotus or no Lotus?
Group Lotus Plc & Anor v 1 Malaysia Racing Team SDN BHD & Ors [2011] EWHC 1366 (Ch) (27 May 2011)
Neutral Citation Number: [2011] EWHC 1366 (Ch
The judgment is available here.
After weeks of deliberation, the High Court in London ruled yesterday that two apparently different ‘Lotus’ teams could continue to race in the sport.
In a detailed judgment, Mr Justice Peter Smith ruled that Team Lotus had the right to race in F1 as “Team Lotus” – and that the car manufacturer “Group Lotus” had the right to use the Lotus name in association with another racing team. That meant they could continue to run in their classic black-and-gold livery with Renault, as they have done so far this year, in the Lotus Renault GP team. The court ruled also that Team Lotus, a ‘new’ Anglo-Malaysian outfit created to enter F1 in 2010 as Lotus Racing, had breached a licensing agreement with Group Lotus last year.
Under this ruling, “Team Lotus” has the right to continue to race in Formula One under the name Team Lotus, but the effect of the judgment is that only “Group Lotus” can use the name ‘Lotus’ on its own in F1. “Group Lotus” is concerned that this aspect of the judgment will cause confusion in the eyes of spectators and the wider public. Accordingly, “Group Lotus” is seeking leave to appeal so that the right to use the Lotus brand in Formula 1 is clarified once and for all in the interests of the sport and the fans.
The issue over the racing colours arises from the decision of “Group Lotus” to paint its cars in the “iconic” black and gold. Last year, the Lotus Racing cars were what might be called “traditional” Lotus colours of green and yellow. There are thus currently two sets (four in total) of cars entered into F1 proposing to or already racing with the name Lotus incorporated in their name. The major issue therefore is whether or not two sets of Lotus cars can legitimately race in F1 under a name incorporating Lotus in some way and use the Lotus Roundel. The organisers of F1 do not apparently regard it as a problem.
Central to the case is the perceived goodwill, by fans and customers, towards the brand of “Lotus”, as it is popularly understood.
Para 156
GL was formed to manufacture and sell sports cars in 1958. It directly has done nothing else. Colin Chapman started life racing cars. He also manufactured racing cars and sold them to Privateers. In the early to mid 1950s he started racing under the name “Team Lotus”. By 1961 and with the incorporation of TLL a decision was made clearly to compete in F1. Thereafter the Team Lotus raced cars; it did not manufacture them. It is clear that the goods and services that TLL sold when it went into the F1 business were the benefits that might accrue to being associated with a successful team. GL appreciated those benefits and paid for them []. Sponsors appreciated them and will have paid for them. Success breeds spin offs. The racing public likes to buy goods and memorabilia associated with successful F1 cars. This has over the years become a significant part of the income for F1 racers. “The public” thereby identified is not the same as the public at large nor is it necessarily in my view the same as the public who might like to watch F1 racing on television. Equally the public from the point of view of GL’s sales of Lotus sports cars is the public who primarily wish to buy its products i.e. Lotus sports cars. Some members of the public will undoubtedly be attracted because of the association with Team Lotus. It will be thought that if GL is associated with successful racing cars they might be expected to produce successful sports cars. There will be people who buy Lotus sports cars who have no interest in F1 racing. They simply buy Lotus sports cars in preference to other sports cars.
Mr Justice Peter Smith ruled that “Team Lotus” had to pay damages to “Group Lotus” for the breach of their licensing agreement. According to the judgment, it appears that the common practice of referring to “Team Lotus” as “Lotus”, in a second reference, and “Lotus Renault”, as Renault, may have to end. Finally, “Group Lotus” announced yesterday that they are seeking leave to appeal because they believe the judgment will cause confusion in the eyes of spectators and television viewers.
