Intellectual Property
Update No.2
This update contains summaries of the following cases
 Koninklijke Philips Electronics NV v Remington Consumer Products Ltd on the
registrability of shape trade marks, in particular, the scope of the exception to
registrability for shapes necessary to obtain a technical result;
 Lily Icos Ltd v Pfizer Ltd in which the patent for Viagra was confirmed to be
invalid by the Court of Appeal;
 Eskandar Nabavi v Eskandar Ltd and Shirin Guild on design right and whether a
design for garments was original, not being commonplace;
 Edmund Irvine and Tidswell Ltd v Talksport Ltd on passing off and how it now
may give a remedy for a false endorsement case, indicating that the importance of
a common field of activity has diminished if not disappeared altogether in such
cases;
 The important decision of the Court of Appeal in Kirin Amgen v Hoechst which
covers a lot of ground on patent law.
There is also a description of the proposed Directive on software patents and some
brief notes of cases of interest.
Note: the case reference IPLR is to Intellectual Property Law Reports, published
electronically by EMIS Professional Publishing and in respect of which David
Bainbridge is the general editor. The series started in 2002 and is one of a number of
Intellectual Property services available from EMIS.
Case C-299/99 Koninklijke Philips Electronics NV v Remington
Consumer Products Ltd
[2002] IPLR 7, European Court of Justice.
Facts
The claimant (“Philips”) had sold three-headed electric shavers for some time and had
a registered trade mark being a drawing showing a representation of the three heads in
a triangular configuration. The mark had been registered under the Trade Marks Act
1938 and had been transferred to the register under the Trade Marks Act 1994 when
that Act came into force. The defendant also made a three-headed electric shaver and
Philips sued for infringement of the trade mark. (It also sued in respect of a
registration of the three-headed shaver as a registered design). There were a number
of challenges on the validity of the trade mark registration.
Jacob J, in the Patents Court, held that the trade mark registration was invalid on the
following grounds:
- the sign was not capable of distinguishing the claimant's goods from those of other
undertakings,
- the sign lacked a distinctive character, and
- the sign consisted exclusively of a shape necessary to obtain a technical result.
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He also held that the registered design was not infringed by Remington’s shaver and
that Philip’s trade mark was not a well known trade mark subject to protection under
Article 6bis of the Paris Convention on the Protection of Industrial Property.
The Court of Appeal also considered that the trade mark was invalid but referred a
number of question to the European Court of Justice for a preliminary ruling under
Article 234 of the EC Treaty.
Held
The ruling of the European Court of Justice was as follows:
1. There is no category of trade marks not excluded from registration by Article
3(1)(b), (c) and (d) and 3(3) of the trade marks Directive which is nonetheless
excluded by Article 3(1)(a). In other words, there is no class of signs which would
be excluded because they are devoid of distinctive character, are descriptive or
laudatory, etc or which have become customary in the trade, but in respect of
which the applicant can show that they have acquired a distinctive character
through use, which are nonetheless excluded on the basis that they cannot
constitute a trade mark.
2. To be capable of distinguishing for the purposes of Article 2 of the Directive, a
shape mark does not require any capricious addition, such as an embellishment
which serves no functional purpose.
3. In a case where a trader has been the only supplier of particular goods to the
market, extensive use of a sign consisting of the shape of those goods may be
sufficient to give the sign a distinctive character for the purposes of Article 3(3) in
circumstances where, as a result of that use, a substantial proportion of the
relevant class of persons associates that shape with that trader or believes that
goods of that shape come from that trader. This is, however, a question for the
national courts. It will involve an inquiry, on the basis of specific and reliable
data, that the presumed expectations of an average consumer of the category of
goods or services in question, who is reasonably well-informed and reasonably
observant and circumspect, are taken into account and that the identification, by
the relevant class of persons, of the product as originating from a given
undertaking is as a result of the use of the mark as a trade mark.
4. The ground of refusal of shapes on the basis that the sign consists exclusively of a
shape necessary to obtain a technical result must be interpreted to mean that a sign
consisting exclusively of the shape of a product is unregistrable if it is established
that the essential functional features of that shape are attributable only to the
technical result. Moreover, this ground for refusal or invalidity cannot be
overcome by establishing that there are other shapes which produce the same
technical result.
The last part of the ruling means that the exception under Article 3(1)(e), second
indent, of the trade marks Directive (see section 3(2)(b) of the Trade Marks Act 1994)
applies even if it can be shown that other shapes can be used to achieve the same
technical result. In this sense, the word “necessary” in the exception is used in a
relatively weak sense. If it were otherwise, the exception would rarely apply.
Although the ruling is not particularly transparent on this point, it seems that a shape
mark (where the shape is necessary to obtain a technical result) may be registrable, if
the other requirements are met, if the sign does not consist exclusively of the shape,
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for example, if the shape has some embellishment or other addition to the basic shape
which achieves the technical result in question.
It was noted in the judgment that the shape mark exceptions are not to be overcome
by evidence of distinctiveness as is the case in respect of some of the other absolute
grounds of refusal.
Lily Icos Ltd v Pfizer Ltd
[2002] EWCA Civ 1, Court of Appeal, 23 January 2002
Facts
Claim 1 of the patent for Viagra claimed the use of a known compound for the
manufacture of a medicament for the curative or prophylactic treatment of erectile
dysfunction in a male. This is a Swiss-type claim. The compound claimed by the
patent was already well-known and had previously been used to treat angina and other
complaints and had been the subject of two earlier patents belonging to Pfizer.
Therefore, the Viagra patent was for a second medical use of a known compound.
This is allowable under section 2(5) of the Patents Act 1977.
Lily Icos commenced proceedings for revocation of the patent and it was attacked on
a number of grounds, including the ground that it lacked inventive step.
At first instance, Laddie J held that the patent was obvious. Previously published
journal articles were the basis of the finding. In particular, one article suggested that a
compound that inhibited a substance known as PDE VA (a type of such inhibitor was
the claimed compound) had promising potential uses which included the treatment of
impotence. The article, by a Dr Murray, went on to say that a clearer picture of the
potential of such inhibitors would be obtained when other rationally designed
inhibitors became available.
Laddie J said that the patent was simply a way of putting Dr Murray’s
recommendations into effect and that a person skilled in the art would have realised
that the recommendations were worth trying.
Held
The Court of Appeal (Aldous LJ, with whom Buxton and Longmore LJJ agreed)
confirmed that the Viagra patent was invalid on the ground of obviousness. A claim
by Pfizer that the judge’s reasoning was based on hindsight was rejected by Aldous
LJ. He accepted that the article by Dr Murray explicitly provided the way forward.
Pfizer also claimed to have been surprised by the invention in claim 1 of the patent.
However, the Court of Appeal did not accept that this indicated an inventive step and
agreed with Laddie J that a person skilled in the art would, on the basis of the articles,
have known of such matters even though Pfizer’s own workers had previously not
known them.
Pfizer had put great store in Claim 9. This claimed use according to the previous
claims but adapted for oral treatment. Aldous LJ rejected this as constituting an
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inventive step, saying that it was an obvious goal being something other workers in
the field would have given a high priority to bearing in mind the previous usual
method of administering drugs to cure male erectile dysfunction by injection. Pfizer
argued that there might have been risks perceived with oral administration of the drug
which would have deterred anyone from trying it. Again, this was rejected. Aldous LJ
approved of Laddie J’s view that “it is all too easy in a case like this to raise a lurid
fear and for that to obscure the issues” and agreed with his conclusion that a skilled
team would not have been put off trying oral administration. On the contrary, they
would probably pursue that avenue first of all.
As the finding of obviousness was sufficient to dispose of the case, there was no need
to consider the other objections to validity which were on the grounds of lack of
novelty, insufficiency and added matter.
Eskandar Nabavi v Eskandar Ltd and Shirin Guild
[2002] IPLR 6, [2002] EWCA Civ 316, Court of Appeal.
Note: the decision at first instance in this case is discussed in the fifth edition of
Intellectual Property under the name Guild v Eskandar Ltd [2001] FSR 38 (neutral
citation number – page 645 of the printed version of the reports).
Facts
Mr Nabavi and Mrs Guild were both born in Tehran, Iran. Eventually, they settled in
London. Mrs Guild completed a course in art and started to design garments, based on
ethnic and peasant clothing she could remember from Iran. Mrs Guild’s designs,
based on a garment she called the “Big Square Shirt”, derived from shapes, frequently
squares, which were flat and even when laid out fully but fell elegantly and fluidly
when worn. Mr Nabavi also worked in the clothing design field, originally producing
knitwear and then becoming interested in designs for Persian carpets and oversize
clothes. Some clothes to which his designs were applied were sold in shops such as
Liberty’s and Harrods. There was some evidence that Mr Nabavi had previously
designed and made clothing to a wide, square design similar to the designs of Mrs
Guild.
Mr Nabavi and Mrs Guild met in 1991 and discussed the possibility of doing business
together and they formed a partnership. Mrs Guild alleged that she left samples of her
garments and drawings with Mr Nabavi so that he could work on them. A further
meeting resulted in a decision that Mr Nabavi should visit a knitting manufacturer,
“Havelock” so that it could produce knitware to Mrs Guild’s drawings.
Havelock produced samples of the garments. Shortly afterwards, Mrs Guild and Mr
Nabavi dissolved the partnership and, following this, Havelock commenced the main
production of garments to the designs. After this, Mrs Guild made garments to her
designs to a width of 100cm and Mr Nabavi made handknits. Eventually, in 1994 Mr
Nabavi launched a collection of garments, some of which were 100cm wide. Mrs
Guild complained to Mr Nabavi and alleged that he was copying her designs but there
was no response. Three years later Mrs Guild’s solicitors wrote again to Mr Nabavi
and commenced proceedings for infringement of copyright and design right in respect
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of Mrs Guild’s designs for a sweater, a cardigan and a shirt, seeking injunctions,
damages (or an account of profits) and delivery up of the infringing copies.
Mr Nabavi denied the allegations and claimed that his designs came from copying
another sweater made by a designer called Gigli, a sample garment produced by
Havelock made up to an incorrect measurement and a few other small and
inconsequential amendments. He denied copying Mrs Guild’s designs and
counterclaimed under section 253 of the Copyright, Designs and Patents Act 1988 on
the basis that Mrs Guild had made groundless threats of infringement proceedings.
This counterclaim was dismissed.
At first instance (reported as Guild v Eskandar Ltd [2001] FSR 38 – page 645) Rimer
J held that the sample garments, being machine-made and of a simple kind for mass
production, were not works of artistic craftsmanship.
In terms of the design right, Rimer J held that it subsisted in the designs, which were
original and not commonplace, and that Mr Nabavi had copied those designs,
infringing the design right. As Mrs Guild was unable to produce the original sketches
showing the designs, Rimer J based his decision on garments produced later by Mrs
Guild, which were not identical to the designs alleged to have been infringed.
It appeared that a major component of the designs, the width of 100 cm, was a result
of a mistake by Havelock in making samples of the designs. Another feature of the
designs, which was held not to be commonplace included a cross-over collar.
Mr Nabavi appealed, arguing that Rimer J’s judgment was inconsistent and his
conclusions were unjustified.
Held
The appeal was allowed. The Court of Appeal held that Mrs Guild’s designs were not
original or, alternatively, any originality was not attributable to Mrs Guild alone, if at
all. Furthermore, Mr Nabavi had not copied those designs.
The Court of Appeal pointed out that interfering with a trial judge’s findings of fact
was unusual without a clear basis to work upon, citing Designers Guild Ltd v Russell
Williams (Textiles) Ltd [2000] 1 WLR 2416. The trial judge has the advantage of
hearing and seeing prima facie evidence given by witnesses, which an appeal court
does not have. Therefore, there should not be a reversal of the judge’s findings of fact
unless he has erred in principle.
Originality
Even if the choice of a width of 100cm was based on an error in making samples, it
could still give rise to originality and a decision to adopt that mistake could still be a
result of skill, although incorporating such a mistake deliberately required no labour.
The Court of Appeal accepted that there were inconsistencies in Rimer J’s decisions
as to whether the features of the designs were original or commonplace. He spoke of
the width being “relatively unusual” and described the features of a cross-over V-neck
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and ribbed cuffs as being “not particularly unusual”. He concluded that the features,
as a whole, were “original in the copyright sense”.
The Court of Appeal held that an important difference between the designs in
question and the design of the Gigli sweater was an increase in width from 88cm to
100cm. This was a design feature which had been created jointly by Mr Nabavi and
Mrs Guild from a pre-existing design. As the remaining variations were
commonplace, this was insufficient to establish a finding of originality looking at the
garments as a whole. Therefore, Rimer J had erred in principle on the issue of
originality. Design right did not subsist in Mrs Guild’s designs.
Copying
Although the appeal court had come to the conclusion that Mrs Guild was not the sole
owner of the design, but that she owned it jointly with Mr Nabavi, the court
considered the issue of copying by Mr Nabavi on the assumption that the trial judge’s
decision on originality was correct.
There are many cases on infringement of copyright (analogous to design right) where
it has been held that substantial similarity with evidence of familiarity with the first
work will raise an inference of copying, leaving the defendant with the burden of
proving otherwise. In terms of similarity, the Court of Appeal considered that the trial
judge, in weighing up the essential shapes and dimensions, had taken the correct
approach. The fact was that the designs were relatively simple and this put pressure
on Mrs Guild to prove copying. The more simple a design was, the greater the chance
that similarities could arise by coincidence and the greater the onus on the claimant to
prove copying. Although Mr Nabavi had access to the work, he had not been crossexamined on whether he had copied. Rimer J said that he found Mr Nabavi to be a
reliable witness, yet he had rejected his evidence of the reasons for similarity.
Another factor was that the garments put in evidence differed from the designs as
claimed and the Court of Appeal thought that the trial judge failed to use the right
comparators in his finding of copying. It was accepted that there were a number of
inconsistencies in the judge’s decision and the Court of Appeal stated “The dilemma
is inescapable, either Mrs Guild’s design was not original or Mr Nabavi did not copy
it”. Finally, Rix LJ said that allegations of conscious copying are serious and could
seriously damage an alleged infringer's reputation. Because of this, such allegations
should be strictly pleaded and proved.
Edmund Irvine and Tidswell Ltd v Talksport Ltd
[2002] IPLR 12, [2002] EWHC 367, Chancery Division
Facts
Edmund (Eddie) Irvine was a famous Formula 1 racing driver who, apart from racing,
made money by endorsing products. The defendant was a company running a radio
station which decided to change the emphasis of its broadcasting more towards sport
and changed its name from Talk Radio to Talksport. It obtained the rights to cover the
Grand Prix Championship on radio in 1999.
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As part of its promotion for the new venture, the defendant distributed marketing
material which included a brochure on the front of which was a photograph of Eddie
Irvine. Although the defendant had obtained permission to use the photograph, it was
altered for publication such that, instead of holding a mobile phone as in the original,
Eddie Irvine was holding a portable radio which clearly bore the words “Talk Radio”.
The defendant confirmed that no more brochures would be distributed when Eddie
Irvine complained. However, Eddie Irvine still sought damages for passing off.
Held
Laddie J found that the defendant was liable for passing off and he confirmed that
Eddie Irvine had goodwill capable of being protected by a false claim that he
endorsed the defendant’s radio service. The judge distinguished endorsement from
merchandising. A person endorsing a product is conveying a message that he
approves of the product or is happy to be associated with it. Merchandising, on the
other hand, involves the exploitation of famous images, themes or articles without
necessarily conveying the message that the owner of that image, etc. endorses the
product or is associated with it. Different considerations apply, therefore, in respect of
merchandising cases.
The main purpose of a passing off action is to protect the exclusive right to goodwill
from damage. The protection extends beyond damage caused by passing off inferior
goods as those of the owner of the goodwill.
Disapproving of McCulloch v Lewis A May Ltd (1948) 65 RPC 58 (the “Uncle Mac”)
case, Laddie J held that, for an action in passing off to be successful, there is no need
to prove that a common field of activity exists between the activities of the claimant
and defendant. All that is required is that the claimant can show that the defendant has
trespassed upon his exclusive right to reputation or goodwill in such a manner that its
exclusivity is reduced, blurred or diminished. Laddie J alluded to the fact that the
commercial environment in which passing off operates is in a constant state of flux
and the law of passing off has expanded though there is still a need to show
misrepresentation. The courts should now take judicial notice of the fact that it is
common for famous people to exploit their names by endorsing products
The law of passing off should reflect the realities of the market place and the fact that
manufacturers and retailers pay well-known personalities to endorse their goods.
Consequently, in principle, an action for passing off can succeed in a false
endorsement case such as this.
Kirin Amgen & Ors v Hoechst Marion Roussel and
Trankaryotic Therapies Inc
[2002] IPLR 18, EWCA Civ 1096, Court of Appeal
Facts
A number of proceedings were brought in relation to a patent for the production of
erythropoietin (“EPO”). The patent enabled the production of EPO in larger quantities
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than before by genetic engineering techniques. EPO was useful in the diagnosis and
treatment of blood disorders. The patent had been granted by the European Patent
Office following its filing in 1984.
Claim 1 claimed “a DNA sequence for use in securing expression in a prokaryotic or
eukaryotic host cell of a polypeptide product having at least part of the primary
structural confirmation [sic] of that of erythropoietin to allow possession of the
biological property of causing bone marrow cells to increase production of
reticulocytes and red blood cells and to increase hemoglobin [sic] synthesis or iron
uptake, said DNA sequence selected from the group consisting of [the claim then
refers to a number of DNA sequences]”.
Claim 19 claimed “a recombinant polypeptide having part or all of the primary
structural conformation of human or monkey erythropoietin [described by reference to
Tables of EPO, variants or derivatives] possessing the biological property of causing
bone marrow cells to increase production of reticulocytes and red blood cells to
increase hemoglobin [sic] synthesis or iron uptake and characterized by being the
product of eukaryotic expression of an exogenous DNA sequence and which has
higher molecular weight by SDS-PAGE from erythropoietin isolated from urinary
sources”.
Claim 26 was for a polypeptide product of the expression in a eukaryotic host cell of a
DNA sequence according to any of Claims 1, 2, 3, 5, 6 and 7.
At first instance it was held that claims 19 to 25 of the patent were invalid and were
ordered to be revoked (claims 20 to 25 were dependent upon claim 19). However, the
judge held that claim 26 was infringed by the defendants, collectively referred to as
TKT.
Held
The Court of Appeal held that the patent was valid but that it had not been infringed
by TKT. A number of issues came up for consideration.
Construction of claims
The method of construing a patent claim is the same whether the issue is its validity or
infringement. Some of the claims, such as claim 26 were for a product produced by a
process. In terms of such claims, a rule of practice at the European Patent Office is
that it is allowable to claim a product made by a process only if that product cannot be
defined by reference to its composition or structure or other determinable parameter.
However, this rule has no relevance for national courts.
Where a claim is made to a product produced by a process, it is the product of that
process which is protected, not the product per se.
Claim 26 was construed as limited to products produced by the expression of a DNA
sequence as described in claim 1 and the other claims referred to in claim 26. Similar
reasoning was held to apply to claim 19.
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Infringement
TKT’s process was held not to fall within a strict literal interpretation of claim 26, in
which the DNA sequence was already in the host cell, as in the TKT process, the
DNA sequence was outside the cell. Therefore, the TKT process was a variant and the
question as to whether it infringed required consideration of the Protocol on the
interpretation of Article 69 of the European Patent Convention and the “Protocol
questions” referred to in Wheatley (Davina) v Drillsafe Ltd [2001] RPC 133. Those
questions are:
1 Does the variant have a material effect on the way the invention works? If yes,
the variant is outside the claim. If no –
2 Would this have been obvious at the date of publication of the patent to a
reader skilled in the art? If no, the variant is outside the claim. If yes -.
3 Would the reader skilled in the art nevertheless have understood from the
language of the claim that the patentee intended that strict compliance with the
primary meaning was an essential requirement of the invention? If yes, the
variant is outside the claim.
A negative answer to the last question would lead to the conclusion that the
patentee was intending the word or phrase to have not a literal but a figurative
meaning denoting a class of things which included the variant and the literal
meaning.
The trial judge had decided the first question in the negative. The Court of Appeal
disagreed, as the variant used endogenous DNA whilst the patent used exogenous
DNA. Therefore, the variant worked very differently to the claimed invention. As that
was the case, TKT’s process did not infringe.
The finding as to the first Protocol question was sufficient to dispose of the allegation
of infringement, but the Court of Appeal continued to review the judge’s approach to
the second question. The Court of Appeal confirmed that the purpose of the second
question was to give a reasonable degree of certainty to third parties, as required by
the Protocol. In deciding this question, it is assumed that the skilled person is told of
the invention and the variant and would then have to decide whether they worked in
the same way. The Court of Appeal thought that the judge was mistaken in assuming
that the skilled person would know that the variant was equivalent to the patented
process.
Novelty
Before the invention, the prior art showed that it was possible to isolate EOP from
urinary sources. However, only tiny amounts could be isolated from immense
amounts of urine. The Court of Appeal held that claim 26 was not anticipated by this
and the claim did not include urinary EPO in its scope. Indeed the specification
expressly acknowledged the prior existence of urinary EPO.
Insufficiency
Section 72(1)(c) of the Patents Act 1977 states that a patent may be revoked on the
ground that the specification of the patent does not disclose the invention clearly
enough and completely enough for it to be performed by a person skilled in the art.
Several challenges on the patent by the defendants were based on insufficiency.
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In the House of Lords decision in Biogen Inc v Medeva plc [1997] RPC 1 it was held
that, where an invention discloses a principle of general application, the claims may
be framed in correspondingly general terms and the patentee is not required to
demonstrate that the invention works in every single case. In relation to the patent in
suit, the patentee did not have to prove that every single product which could be
produced by the process in accordance with the invention, actually worked. For
revocation on this basis, it would have to be shown that at least one DNA sequence
covered by the claim was unsuitable for expressing EPO. The defendants failed to
show this was so.
Another allegation of insufficiency was made on the basis that the invention claimed
higher levels of EPO than had previously been achievable. The Court of Appeal held
that claim 1 was not limited to high level expression of EPO. The fact that only low
level expression was possible until subsequent techniques were developed was
irrelevant.
Another attack on sufficiency was described as a “squeeze”. It was submitted that, if
TKT’s process fell within the patent claims, then the claims lacked sufficiency
because they did not show how TKT’s process could be performed. This argument
was rejected by the Court of Appeal. It was bound to fail as the court had already
accepted that the TKT process was outside the claims of the patent.
Claim 19 was the subject of the final allegation of insufficiency. An EPO of a higher
molecular weight was claimed. The difficulty was that the molecular weight of
urinary EPO varied and tests for molecular weight would be difficult to perform and
might be inconclusive. If this was so, it would make it very difficult for third parties
to discover whether their products infringed the claim. At first instance, the judge
accepted this ground of insufficiency but the Court of Appeal held that the allegation
was really an allegation of lack of clarity rather than an allegation of insufficiency. It
was important to bear in mind that lack of clarity and conciseness were relevant only
to patentability, being a requirement in respect of applying for a patent under section
14(5) of the Patents Act 1977). Lack of clarity was not a ground for revocation under
section 72. Therefore it was irrelevant as regards revocation on the grounds of
insufficiency. Following the grant of a patent, lack of clarity of the claims would be
relevant only to the claimant’s task in proving infringement. Lack of clarity could
place a real hurdle for the patentee in this respect.
The description in claim 19 of a “higher molecular weight”, did not mean the
specification was insufficient. The main issue was whether the skilled person,
following the specification, could perform the invention, bearing in mind such a
person would be looking for success rather than failure. For this allegation to succeed,
it would have to be shown that the test for molecular weight was insufficient, judged
from the perspective of a skilled person in 1984, who would seek to achieve success
rather than failure. The state of the art in 1984 indicated that urinary EPO did, indeed,
have a lower molecular weight.
Whether the specification was framed in good faith and with reasonable skill and
knowledge
As the judge had held that the patent was only partially valid, the patentee had to
show that the specification was framed in good faith and with reasonable skill and
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knowledge for relief to be available in respect of that part which was valid and
infringed, under section 63. The Court of Appeal agreed with the judge’s finding that
the patentee had proved this. The specification contained a number of errors but the
Court of Appeal said that any mistake in a specification must be considered in the
context of the specification as a whole. Even an error which appears, with hindsight,
to be obvious does not prevent a decision in favour of the patentee if the mistake is of
no consequence. As regards mistakes made by contractors engaged to write a
specification for a patentee, that does not relieve the patentee of the obligation to
prove that the patent was framed in good faith and with reasonable skill and
knowledge.
Proposed Directive on Software Patents
Section 1(2) of the Patents Act 1977 expressly prevents the patenting of computer
programs as such. This is in accordance with Article 52(2) of the European Patent
Convention. There has grown up a significant body of law both at the European
Patent Office and national courts (particularly in the UK) on the patentability of
computer programs notwithstanding the basic exclusion (for example,
Vicom/Computer-related invention [1987] EPOR 74, Gale’s Application [1991] RPC
305, Fujitsu Ltd’s Application [1997] RPC 608, IBM’s Application [1999] RPC 864,
etc.; see Intellectual Property, 5th edition, pp. 364 – 372).
Although somewhat of an oversimplification, it can be said that, as the exclusion on
the patenting computer programs as such applies in relation to computer programs as
such, patents may still be available for inventions including computer programs if
they cause a technical effect when run and the application is directed towards that
technical effect (providing the other requirements such as novelty and inventive step
are present). However, a patent will not be granted if the effect is, itself, among the
excluded matter, such as a method for performing a mental act.
Some countries outside Europe, in particular the United States grant patents for
software inventions much more freely and the Trade Related Aspects of Intellectual
Property Rights Agreement (“TRIPs”) does not have an exclusion for computer
programs equivalent to that in the European Patent Convention. This has driven calls
for a change to European patent law. A further issue driving the need for changes to
be made is that there are differences between the European Patent Office and the
courts in some Member States. Even though most case law in the Member States
comes from the UK and Germany, there are even differences of interpretation of the
exclusion between the courts of those countries. This problem could become
exacerbated as more litigation in this area takes place in other Member States.
Therefore, there is also a need to harmonise the law on software patents in Europe.
As a result, the European Commission has published a proposal for a Directive on the
patentability of computer-implemented inventions COM(2002) 92 final, 20.02.2002.
Member States of the European Patent Convention would have to agree to modifying
the Convention accordingly and, in particular, Article 52(2)(c) would have to be
changed by the deletion of computer programs from the list of non-patentable
inventions. Domestic patent laws would also have to be amended.
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The main provisions of the proposed Directive
The proposed Directive, if adopted in its current form, will make relatively little
difference to the existing jurisprudence of the European Patent Office relating to
software patents. In particular, the requirement for technical contribution remains.
Computer-implemented inventions must belong to a field of technology; Article 3.
Article 2 contains the basic definitions.
A “computer-implemented invention” is any invention the performance of which
involves the use of a computer, computer network or other programmable apparatus
and having one or more prima facie novel features which are realised wholly or partly
by means of a computer program or computer programs. The use of the term prima
facie means that it will not be necessary to establish actual novelty by carrying out an
exhaustive search. What it intended is that the presence of technical contribution will
be assessed by consideration of whether the invention contains an inventive step
rather than reflecting on whether the invention is novel.
This seems sensible, given the immense difficulty in carrying out effective and
exhaustive searches for prior art in the field of computer software. However, there is a
danger of falling into the same trap as in the United States where it is claimed that the
US Patents and Trade Marks Office does not possess a sufficiently large database on
which to judge the patentability of software inventions. Consequently, it is alleged
that there are many invalid software patents on the US register of patents (Hart, R,
Holmes, P and Reid, J, The Economic Impact of Patentability of Computer Programs,
Report to the European Commission, Intellectual Property Institute, pp 5-6).
Article 2 also contains a definition “technical contribution” which means a
contribution to the state of the art in a technical field which is not obvious to a person
skilled in the art.
Article 4 is very important and it states the criteria for patentability. They are:
1. A computer-implemented invention is patentable on the condition that it is
susceptible of industrial application, is new, and involves an inventive step.
2. A computer-implemented invention must, as a condition of involving an inventive
step, make a technical contribution.
3. The technical contribution is to be assessed by consideration of the difference
between the scope of the patent claim considered as a whole, elements of which
may comprise both technical and non-technical features, and the state of the art.
The first condition simply restates the basic test under the European Patent
Convention. The requirement for technical contribution can be seen as a qualification
of the basic test for patentability. In respect of inventions not containing excluded
subject-matter, the need to expressly specify technical contribution is not required, for
example, in the case of a mechanical invention.
The third condition is stated by the Commission to be consistent with European Patent
Office Boards of Appeal decisions such as in Case T26/86 Koch & Sterzel/X-ray
apparatus [1988] EPOR 72. There, the Technical Board of Appeal held that an
invention must be assessed as a whole and the inclusion of non-technical matter does
not detract from the technical character of the invention as a whole.
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The explanatory memorandum to the proposed Directive states that a computerimplemented invention which lies in one of the other excluded fields (such as a
method for doing business) may still be patentable even if it contains a non-obvious
technical contribution. However, if the contribution to the state of the art resides
wholly in non-technical matter the invention will not be patentable. This would be the
case, for example, where the contribution comprised no more than a method for doing
business. Thus, it may be possible to have a claim in a patent which has both technical
and non-technical matter. This will not give any rights in respect of the non-technical
features on their own. This may modify the law as set out in Case T854/90 IBM/Card
Reader [1994] EPOR 89 where it was held, inter alia, that the presence of technical
means when carrying out a business activity does not mean that the business activity
has a technical character and is, therefore, an invention.
The memorandum goes on to state that a technical contribution may come from:
- the problem underlying, and solved by the claimed invention;
- the means, that is the technical features, constituting the solution of the underlying
problem;
- the effects achieved in the solution of the underlying problem;
- the need for technical considerations to arrive at the computer-implemented
invention as claimed.
Article 5 makes it clear that the patent may be granted in respect of products or
processes, in line with both the European Patent Convention and the TRIPs
Agreement. Therefore, a programmed computer, a programmed computer network or
other programmed apparatus, a process carried out through the execution of software
by such a computer, computer network or apparatus may be claimed. However, this
does not extend to claims to computer program products on their own or as a carrier
as this would be equivalent to allowing patents for computer programs as such. To
this extent the proposal is inconsistent with the decision in Joined Cases T935/97 and
T1173/97 IBM’s Application [1999] RPC 861 where a claim to a carrier, such as a
computer chip containing a program capable of producing a technical effect when run
in a computer, was held to be capable of being validly claimed (see also the Patent
Office Practice Note [1999] RPC 563 which followed that decision and adopted an
equivalent practice).
Where a computer-implemented invention is patented, there will be an inevitable
overlap with the copyright subsisting in that software and, in some cases, also an
overlap with the database right. Taking note of the exceptions to infringement of
copyright in computer programs, originating from Directive 91/250/EEC on the legal
protection of computer programs (OJ L 122, 17.5.91, p.42), Article 6 states that, in
particular, the provisions relating to decompilation and interoperability are not
affected by the proposed Directive. Thus, acts of decompilation in accordance with
the computer program Directive will not infringe any patent granted for an invention
implemented by the program concerned. Article 6 also includes the protection
afforded by provisions concerning semiconductor topographies and trade marks. The
proposed Directive omits any mention of the sui generis database right or copyright in
items of software other than computer programs.
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The proposed Directive also includes provision for monitoring the impact of the
changes and imposes an obligation on the Commission to submit a report on the effect
of the Directive to the European Parliament and the Council no later than three years
after the date for compliance with the Directive.
More cases of interest
Case C-206/01 Arsenal Football Club plc v Matthew Reed
Opinion of Advocate General Ruiz-Jarabo, 13 June 2002
Arsenal Football club had a number of trade marks and sued the defendant who was a
trader selling football clothing such as scarves bearing these marks. At first instance
in the Chancery Division, Laddie J held that the trade marks were not infringed nor
was the defendant liable for passing off (on the basis that there was no proof of actual
confusion on the part of consumers). On the trade mark point, Laddie J held that the
defendant’s use of the trade marks was not use in a trade mark sense. Rather the use
was as a badge of support, loyalty or affiliation. However, he referred the matter to
the European Court of Justice for a preliminary ruling.
The Advocate General said that whether use is use as a trade mark was a matter for
national courts to decide but using a sign identical to the trade mark raised a
presumption that use was use as a trade mark. The protection afforded by a trade mark
was to prevent third parties using it for the purposes of commercial exploitation. The
reasons why a consumer bases his choice of goods or services is irrelevant and the
decisive factor is that consumers buy the goods or obtain the services because they
incorporate the distinctive mark.
Case C-2/00 Michael Hölterhoff v Ulrich Freiesleben
[2002] IPLR 9, European Court of Justice
Freiesleben, who cut and sold diamonds in Germany, had two trade marks, “Spirit
Sun” and “Context Cut” used in relation to diamonds and other precious stones.
Hölterhoff traded in diamonds and, when offering them for sale to a third party,
described the cut of some of his diamonds using the registered trade marks. When
sued for infringing the trade marks, the German court thought that Freiesleben’s oral
use of the trade marks was for descriptive purposes only but referred a question to the
European Court of Justice for a preliminary ruling under Article 234 of the EC Treaty.
The European Court of Justice held that, if in the course of commercial negotiations, a
trader truthfully reveals the origin of his goods, the use of a trade mark solely to
describe the particular characteristics of the goods does not infringe. This applies
where there is no question of the trade mark being perceived as denoting the origin of
the goods.
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Ancare New Zealand Ltd v Fort Dodge New Zealand and Nufarm
Ltd
Judicial Committee of the Privy Council, 28 February 2002
A New Zealand patent was granted for a composition containing praziquantel, which
is effective against tapeworms, and one or more other compounds, such as levamisole,
effective against roundworms. The state of the art at the priority date of the patent was
that tapeworms were not deleterious to health of sheep and that there was no point in
treating the animals for tapeworms. Nevertheless, most farmers and vetinary surgeons
believed that tapeworms were harmful and, despite the current expert view to the
contrary, there was a demand for preparations that would eradicate both roundworms
and tapeworms.
At first instance, the judge held that the patent was invalid for lack of inventive step.
He found that praziquantel was already well-known for eradicating tapeworms and
that levasimole was known to be effective against roundworms. Praziquantel would
be an obvious choice for treating against tapeworm. It would also have been obvious
to anyone familiar with the prior art that it would be worth trying praziquantel and
levasimole if a combined treatment was required. The New Zealand Court of Appeal
upheld that decision at first instance. There was then an appeal to the Judicial
Committee of the Privy Council, where it was argued that the trial judge wrongly
identified the inventive concept as being the idea of combining the two compounds to
treat tapeworms and roundworms. It was also argued that the inventive concept was to
disagree with the accepted wisdom and show prescience in realising that treating
lambs for tapeworm was a sensible thing to do. The ordinary skilled worker would not
have even started to look for such a preparation as he or she would not have
considered it worthwhile doing.
The Privy Council considered that the specification did not identify a need for the
treatment of tapeworms which had previously not been recognised. What it did teach
was how to satisfy an existing need by providing a preparation that could treat both
roundworms and tapeworms. A further problem was that, if the inventive concept was
the idea of finding a preparation that could treat both roundworms and tapeworms, it
was not new. The majority of New Zealand farmers were treating lambs for tapeworm
at the patent’s priority date and compounds for this were known or used previously.
The fact that, at that time, experts did not consider it worth doing did not mean that
the idea of making a preparation to do it was an inventive step. Therefore, the patent
lacked inventive step.
Bonnier Media Limited v Greg Lloyd Smith and Kestrel Trading
Corporation
[2002] IPLR 13, Court of Session (Outer House), Scotland
The pursuer had a newspaper business in Scotland known as "business a.m." and had
a trade mark comprising the words "business a.m." on a rectangular background.
Along the top of the rectangle were the words "Scotland's Business, Financial &
Political Daily". The mark was registered accordingly. The pursuer also operated a
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website through which it provided an online service to supplement its publishing
activities and owned a number of internet domain names, including "business.co.uk".
The first defender lived in Greece and was the managing director of the second
defender, a company incorporated in Mauritius.
During 2001, the pursuer received an email from “Gregory A Lindstron” of a firm
known as LJ and Co. It confirmed that LJ & Co had acquired the domain
"businessam.com" and would sell it to the pursuer for $25,000. The first defender's
name was given as a contact name. The pursuer brought an action for trade mark
infringement under section 10(2) and (3) of the Trade Marks Act 1994 and for passing
off. An interim interdict was granted in favour of the pursuer and the defenders
applied for it to be recalled or restricted. They based their argument, inter alia, on
grounds relating to jurisdiction.
Lord Drummond refused to recall or restrict the interim interdict. As regards
jurisdiction, Article 5(3) of the Brussels Convention states that, as a derogation from
the basic rule that a defendant should be sued in the Member State in which he is
domiciled, in matters relating to tort, delict or quasi-delict he may be sued in the
courts in the Member State in which the harmful event occurred. However, Article
5(3) does not expressly mention threatened wrongs. The fact that some provisions in
the Civil Jurisdiction and Judgments Act 1982 stated that this rule, in some cases,
applied also to the place where the harmful event was likely to occur did not mean
that Article 5(3) of the Brussels Convention only applied to completed wrongs and
not to threatened wrongs. Therefore, the Scottish courts had jurisdiction over the
defenders in respect of a wrong threatened in Scotland.
It was accepted that, potentially, operating a website can result in a delict (or tort)
being committed in every country in the world from where the website can be seen
but it does not follow that a delict is committed in each and every country in the world
(see, for example Euromarket Designs Inc v Peters and Crate & Barrel Ltd [2001]
FSR 203 discussed in Intellectual Property, 5th edition in Chapters 20 and 21)
Placing a website on a computer server situated outside Scotland could amount to a
threatened delict in Scotland if, on the facts, the material on the website was clearly
aimed at a business located in Scotland so as to amount to passing off or trade mark
infringement in Scotland.
Legislative changes
The Patents and Plant Variety Rights (Compulsory Licensing) Regulations 2002 came
into force on 1 March 2002. They implement Article 12 of Directive 98/44/EC of the
European Parliament and of the Council on the legal protection of biotechnological
inventions (OJ No. L 213, 30.7.98, p. 13) and enable the Comptroller General of
Patents, Designs and Trade Marks and the Controller of Plant Variety Rights, acting
jointly, to grant non-exclusive compulsory licences and cross licences where the
exploitation of a patent would infringe a plant variety right and vice versa.
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The Copyright, etc. and Trade Marks (Enforcement and Offences) Act 2002 received
Royal Assent on 24 July 2002. When it is brought into force, the Act will increase the
penalties for the “copyright piracy” offences to a maximum of 10 years imprisonment,
in line with the maximum now available for the trade mark offences under section 92
of the Trade Marks Act 1994. The Act will also amend the Copyright, Designs and
Patents Act 1988 and the Trade Marks Act 1994 as regards search warrants and
powers of seizure.
Other items
European Patent Convention: Bulgaria, Estonia, the Czech Republic and Slovakia
have acceded to the European Patent Convention as at 1 July 2002. This now
increases the total number of Member States to 24. Apart from the above-mentioned,
this includes all the European Union Member States, Cyprus, Liechtenstein, Monaco,
Switzerland and Turkey. A number of other countries are expected to accede soon.
They are Latvia, Lithuania, Poland, Romania, Slovenia and Hungary.
David Bainbridge
5 September 2002
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