IPO consults on copyright exemptions in the digital age

The Intellectual Property Office (IPO), the government agency formerly known as the Patent Office (not Prince) is currently consulting on the scope of the exemptions to copyright infringement. As copyright law typically lags behind both the available technology and common practice, it should not be a surprise that this consultation on the digital age is long overdue.

By way of example, one of the exemptions being consulted on is the "format shifting" exemption. While we have had the time shifting exemption for some time now (recording TV programmes on your VCR to watch at a time more convenient), format shifting is currently copyright infringement. Format shifting is where the user copies a legitimately purchased copyright work into another format that is more convenient to them e.g. copying CDs onto a PC or converting music files to MP3.

One of the aims of extending the copyright infringement exemptions to format shifting must be to avoid the "its ok everyone does it" mentality of copyright infringement. The idea is that if people know they are allowed to "format shift" but not to say download films from the Internet, then this will assist businesses and the creators they represent in preventing others infringing their work.

The current proposal is to limit the format shifting exemption to private use, so it would not cover selling, gifting or otherwise sharing the copy, including sharing through Internet file-sharing sites. One of the specific areas for consultation is the extent to this proposed exemption and whether it is limited to sound recordings and films or can be extended more widely.

Canny readers may be wondering about the implications of Article 5 of the Copyright Directive (2001/29/EC) in relation this new proposed exemption. As regards existing exemptions allowing for private copying, which are contained in the Directive, Article 5 provides that the right holders of such copyright materials copied for private purposes are to receive "fair compensation".   According to the IPO, the limited nature of the new proposed exemption does not raise the spectre of such an obligation on the consumer to pay fair compensation. Whether misguided or not, in the opinion of the IPO the proposals will represent a fair balance between the interests of both copyright owners and consumers and if the copyright owners wish to go further, then digital rights management (DRM) technologies are open to them to protect their assets.

The other proposals are targeted at allowing schools and universities to make the best use of digital technologies, such as interactive whiteboards and virtual learning networks for distance learning and also to allow the use of technology to archive material before the format it is stored on goes out of date or the hard copy deteriorates. Currently there are exemptions for educational use.  However, these only apply to copying not "communicating" the copy to the public and so prevent copies being electronically sent to distance-learning students.

The consultation follows some of the recommendations made in the Gowers Review of Intellectual Property we have covered in previous IP e-bulletins. As the exemptions are the subject of consultation, their details and full extent are yet to become clear.  However you can have your say by responding before 8 April 2008. The embryonic nature of the proposals mean that anyone who is interested should seize this real opportunity to help shape the extent of copyright protection in the digital age.  The consultation raises some interesting questions as to the scope of the proposed exemptions and the IP e-bulletin will keep you up to date with developments in future editions.

Oh and as for the Prince reference, the consultation also aims to add a new exemption of caricature, parody or pastiche.

20 February 2008

Gemstar challenges Virgin set-top boxes

The latest twist in the ongoing saga of Richard Branson's Virgin Media and Rupert Murdoch's News Corporation sees Gemstar TV Guide Inc, a US TV listings company currently 41% owned by the Murdoch run News Corporation, bring proceedings against Virgin Media in the High Court in England alleging three counts of patent infringement.

The patents in question form part of Gemstar's extensive patent portfolio relating to interactive programme guide ("IPG") technology. Gemstar alleges that Virgin Media is infringing three of its European patents (EP0969662, EP1377049 and EP1613066).

The claims for Patent EP0969662, a Television Schedule System, include an electronic program guide comprising television program listings including title, telecast time and channel, a time and channel grid, a moveable cursor to highlight channels within the grid and a means to change the time and channel grid into a single channel guide of the highlighted program listing. 

Patent EP1377049, User Interface for Television Schedule System, claims a system for allowing users to select favourite channels and storing these in electronic memory.

Patent EP1613066, Electronic Program Guide with Digital Storage, claims an interactive television program guide system for transferring recorded programs on user television equipment and seems to cover recording television programs and then transferring the recording to another medium.

The subject matter of the claims in all three patents would appear to cover the standard features on most set-top boxes today and therefore may not seem particularly novel or patentable. The priority dates for the first two patents do, however, date back to 1990 and the priority date for EP1613066 is in 1998.

The publication of the grant of EP1613066 took place in  June 2007 and so a number of weeks of the 9-month period for filing a central opposition at the European Patent Office remain. It may be that the current infringement proceedings against Virgin Media provide an impetus for the commencement of opposition proceedings. 

Gemstar have entered into licence agreements for their patented IPG technology with a number of other companies in the UK and the rest of the world, including the Sony Corporation, Mobi TV, Snapsteam and BSkyB.

Samir Armaly, Executive Vice President, Intellectual Property and Licensing at Gemstar is quoted as saying that the company had "worked diligently to license Virgin Media" for Gemstar's IPG technology but that "negotiations did not lead to a resolution".

A Virgin spokesperson countered Armaly's statement by responding:

"We're confident the courts will see Gemstar's action for what it really is: a piece of flagrant opportunism. We have been advised by our external counsel that the case is without merit and we will defend ourselves vigorously."

Earlier the year, Virgin Media brought legal proceedings against BskyB, which is also largely owned by Rupert Murdoch and chaired by his son James, for anticompetitive behaviour following the companies failing to reach an agreement as to Virgin's carriage of a number of BSkyB channels including Sky One.

Gemstar entered into a suite of merger agreements with Macrovision Corporation in December 2007. However, the merger transaction has not, as at the date of writing, completed. Macrovision is a California based company which designs technology to prevent viewers from watching and copying digital material without the correct authorisation and the deal has been described by various US commentators as a somewhat unusual partnering.

It will be interesting to monitor Gemstar's attitude to the proceedings if the merger goes ahead.  This may provide a clue to the true character of these proceedings; a genuine attempt to protect IP or simply part of a larger more general dispute between Murdoch and Branson's media empires.

20 February 2008

Fair dealing floors scientology stance on Cruise

In January 2008 the "Church of Scientology" reportedly threatened several websites with copyright infringement actions for displaying a video of Tom Cruise.  The video in question shows Cruise enthusiastically extolling the virtues of the Scientology to the appropriately intense refrain of the "Mission Impossible" theme tune.

Whilst the video itself offers insight into little beyond the mindset of Cruise, it does allow an opportunity to consider the relevant defences to such alleged copyright infringement under the Copyright Designs and Patents Act 1977. 

Any potential breach of copyright caused by websites reproducing the video in this manner may be subject to the defence of fair dealing under section 30(2) of the Act:

"Fair dealing with a work (other than a photograph) for the purpose of reporting current events does not infringe any copyright in the work provided that…it is accompanied by a sufficient acknowledgement."

The exemption of photographs ensures protection of the work of newspaper and current affairs photographers. 

A "sufficient acknowledgment" is an identification of the work in question by its title or other description and, unless the work is anonymously published or the author cannot be ascertained by reasonable enquiry, an identification of the author.  However, no acknowledgement is required in relation to sound recordings, broadcast or films where impossible "for reasons of practicality or otherwise."

There is no requirement for the work to have already been made available to the public, as is required under the section 30(1) exemption of fair dealing for criticism or review.  There are however boundaries to the concept of "fair dealing" - a work made available in breach of confidence would be unlikely to fall within section 30(1) or 30(2).

The courts have taken a liberal approach in defining "current" events – diaries of Paddy Ashdown regarding events dating back two years were deemed to fall within this definition.   The court did however determine the UK's return of Hong Kong to China in 1997 to fall outwith current events in 2005.    Clearly Cruise is a high profile figure, and much furore surrounded the actor shooting a film in Germany recently due to Germany's longstanding suspicion of Scientology. The footage may therefore be deemed a current event by the courts.

Thus, it seems likely that providing a link to the video of Cruise would not infringe the copyright due to the application of section 30(2).  However, unless the copyright owner's details are very difficult to access, an acknowledgement of the owner should be provided when reproducing a work for the purpose of reporting current events.

20 February 2008

Pearly whites

French designer fashion brand Lacoste recently lost a battle against a dental practice in England. The two parties seem an unlikely pair to have much in common, but the dispute came about when the dental practice sought to register as a trade mark a logo of a crocodile it had been using for many years along with the words 'The Dental Practice'. The logo appeared on the dental practice's sign and depicted a crocodile with a big white grin. Lacoste's well known trade mark is also of a crocodile but there are notable differences between the two.

A trade mark is any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings. A trade mark can be registered in a number of different classes for various goods and services and gives the owner monopoly rights to use that name in connection with the goods or services in respect of which it is registered. When the dental practice sought registration for its trade mark, presumably in the class of 'medical services', Lacoste sought to oppose it on the basis that there could be confusion because it is confusingly similar to its trade mark.

While the two marks did have similarities, when taken as a whole including the words 'the dental practice', the judge at the Intellectual Property Office who was hearing the appeal held that they were not similar and allowed the application by the dental practice to proceed.

While it may seem surprising that Lacoste should be threatened by a small town dental practice, it is important for companies to actively protect their intellectual property. Lacoste has built a good deal of brand exclusivity and while it is better known for its clothing range, it does have coverage in the 'medical services' category and so was entitled to seek to challenge this registration.

20 February 2008

Protection of trade secrets

Protecting "trade secrets" is of crucial importance to the success of many businesses. Examples of sensitive material include technical information or diagrams, recipes, formulae, processes, business or marketing plans or ideas, customer lists, or anything else which is of value to a business and can be kept confidential.

Trade secret protection is often seen as a valuable alternative to finite intellectual property rights (IPR) such as patent or copyright protection, as trade secrets can subsist as long as the business continues to trade, and even beyond. Also, patents are not always available, and where they are it is usually only for the finished working invention. Trade secret protection can protect ideas and work-in-progress from industrial espionage. Another disadvantage of patents is that applications and granted patents are publicised. This could allow a competitor to learn from the patent, without actually using it. Worse still, publication of an invention could even lead to others using and benefiting from it in secret, despite legal prohibitions on them doing so. Copyright suffers a disadvantage in that it only prevents copying of information. A current topical example of this downfall is where an individual transferring employments uses a database of his/her former employer's customers by committing certain key clients to memory without actually "putting pen to paper", and then approaching these customers in his/her new employment.

Some trade secrets could in actual fact be ascertained by "reverse engineering"; products available for a competitor to buy on the open market can be analysed by scientists or engineers. In such a case, traditional IPR may the best option to prevent others imitating the product. On the other hand, famous trade secrets such as the recipe for Coca-Cola are still kept confidential today, and attempts to imitate these products in the market using reverse engineering often do not manage to recreate "the real thing" in the eyes of the consumer. Trade secrets are also especially useful for protecting information which is used solely within a business to give an edge over competitors; by keeping the outside world unaware that the information even exists.

Confidentiality
The main weapon in the protection of trade secrets is the law of Confidentiality. A victim of a "breach of confidence" may raise an action to prevent the information being used by another party, or a damages action for loss caused as a result of the unauthorised dissemination of the trade secret. In order to establish a breach of confidence it must first be shown that the unauthorised party received the information under an obligation of confidence.

In relation to employees, an implied obligation of confidence arises automatically as part of an implied duty of good faith and fidelity in all employment contracts. However, when the employment contract ends, the duty also becomes less stringent. Therefore, best practice is to include express duties of confidentiality in all employment contracts and to specify the duration of the protection. Express duties also allow the employer to specify exactly what information is to be kept confidential.

Other parties who may have access to trade secrets (for example, self-employed workers, customers, consultants, service providers, potential joint venture partners) should have contractual obligations of secrecy imposed upon them to make certain that an obligation of confidence arises.

Where there is doubt over what information is covered, or where there is not a specific contractual obligation of confidence, the courts will assess whether there has been a breach of confidence based on the circumstances surrounding the trade secret, and so the following practises should be considered:

• Marking all important documents as confidential
• Restricting access to valuable information among only those who have a genuine need to use it, including use of password protection on electronic documents
• Ensuring that information important to the business is not openly discussed and made available, and keeping it behind locked doors where possible or appropriate
• Training staff on the need for confidentiality and on what types of data are considered trade secrets and
• Using confidential attachments to agreements with third parties, including named individuals who are to have access to particular information, and regimes for recording, storing and destroying information.

Restrictive Covenants
"Restrictive Covenants" are contractual obligations imposed on employees to prevent them working for certain organisations or for any organisations within a sector for a specified length of time after ceasing to work for the employer. They are a useful tool in preventing information being acquired by competitors, but they must be used with care because the courts often strike down covenants as invalid if the restrictions are "too greedy". The duration of the restrictive covenant will be relevant in determining whether the obligation is enforceable. The seniority of the employee in question and the individual's role within the organisation will also be factors here.

Due to uncertainties in the use of restrictive covenants, specialist employment law advice should be sought before trying to impose these obligations on current or joining employees. However, both restrictive covenants and the law of confidentiality can play a vital role in protecting the value of trade secrets.

20 February 2008

Greater protection for Scotch Whisky?

Scotch Whisky has long had a certain cachet for the more sophisticated consumer, however, this means that it can be tempting for producers to use a variety of descriptions for their products which can lead to confusion.  As a result, the Department for Environment, Food and Rural Affairs (DEFRA) is currently consulting on its proposed Scotch Whisky Regulations 2008.

Existing legislation gives some protection to the "Scotch Whisky" denomination but DEFRA is concerned that, apart from the basic definition of Scotch Whisky in the existing legislation, there is considerable scope for confusion by the use of different categories of whisky and regional descriptions.

The consultation paper (please click here to view the paper) sets 22 different questions seeking detailed responses in relation to definitions of the different types of Scotch Whisky, labelling requirements and the prohibition of maturing Scotch Whisky abroad.

The consultation paper and draft regulations propose defining Scotch Whisky in 5 categories:

1. Single Malt Scotch Whisky
2. Single Grain Scotch Whisky
3. Blended Malt Scotch Whisky
4. Blended Grain Scotch Whisky
5. Blended Scotch Whisky

DEFRA has proposals as to how it will wish to define each category and is seeking to distinguish between single whiskies and blends which are made up of a number of different single whiskies.

Scotch Whisky is recognised as a geographical indication at EU level but DEFRA also proposes to give specific protection to locality and regional names.  These are:

• Highland
• Lowland
• Speyside
• Campbeltown
• Islay

The proposal is that these names could only be used for whiskies distilled in those locations as  DEFRA is concerned to stop some practices which it views as confusing, for example using descriptions such as "Speyside Cask Finish" in relation to whiskies distilled elsewhere.  At present a number of trade marks exist where a regional geographical name forms part of a product name or part of an existing company name and DEFRA's proposal to deal with this is to exempt some trade marks which are already registered before any new law comes into effect.  Brand owners, take note!

The ingenuity of label designers who are able to create the impression that a bottle contains Scotch Whisky is also recognised as part of the consultation and the proposed legislation would make it unlawful to label or market any drink which is not Scotch Whisky under a label designating it as Scotch Whisky or which uses words or pictures which might suggest that such a product is Scotch Whisky.

Over 100 organisations have already been invited to respond to the consultation and, if you wish to do so as well, the closing date for responses is 25th March 2008 with the intention that most of the new regulations will come into force in June this year.

20 February 2008