Intellectual Property in the New Millennium: Essays in Honour of William R. Cornish

INTELLECTUAL PROPERTY IN THE NEW MILLENNIUM

Intellectual property law is a subject of increasing economic importance and the focus of a great deal of legislative activity at an international and regional level. This collection brings together contributions from some of the most distinguished scholars in this exciting and controversial field, covering the full breadth of intellectual property law, that is, patents, copyright, trade marks and related rights. The contributions examine some of the most pressing practical and theoretical concerns which intellectual property lawyers face. These include: expanding the boundaries of IP in the face of new challenges, such as appropriate legal responses to digitisation and new technologies; relations between developed and developing worlds; the relationship between different legal traditions in a world of increasingly shared international norms; and the relationship between intellectual property rights and other areas of law, such as contract and criminal law. lionel bently will, from October 2004, be Herchel Smith Professor of Intellectual Property Law at the University of Cambridge, Director of the Centre for Intellectual Property and Information Law, and Fellow of Emmanuel College, Cambridge. He taught previously at King’s College, London. He has published widely in the field. david vaver is Professor of Intellectual Property and Information Technology Law in the University of Oxford, where he is also the Director of the Oxford Intellectual Property Research Centre at St Peter’s College. He has published widely in the area of intellectual property law, and currently serves on the UK Minister of Trade and Industry’s Intellectual Property Advisory Committee.

INTELLECTUAL PROPERTY IN THE NEW MILLENNIUM Essays in Honour of William R. Cornish

Edited by D. VAVER AND L. BENTLY

CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi Cambridge University Press The Edinburgh Building, Cambridge CB2 8RU, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521846431 © Cambridge University Press 2004 This publication is in copyright. Subject to statutory exception and to the provisions of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press. First published 2004 Reprinted 2005 The rights of the editors and the authors of the works herein have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988. A catalogue record for this publication is available from the British Library ISBN 978-0-521-84643-1 hardback Transferred to digital printing 2009 Cambridge University Press has no responsibility for the persistence or accuracy of URLs for external or third-party Internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate. Information regarding prices, travel timetables and other factual information given in this work are correct at the time of first printing but Cambridge University Press does not guarantee the accuracy of such information thereafter.

CONTENTS

List of contributors Foreword Preface

page ix

xi xii

General intellectual property 1

International intellectual property jurisprudence after TRIPS 3 Michael Blakeney

2

Harmony and unity of European intellectual property protection 20 Hanns Ullrich

3

Oskar Hartwieg’s thoughts on the English legal system 47 Dieter Stauder (with David Llewelyn)

4

Intellectual property in a peripheral jurisdiction: a matter of policy? 58 Hector L. MacQueen Patents and plant protection

5

Creating the community patent and its court Sir Robin Jacob

6

Patents – what’s invention got to do with it? Sir Hugh Laddie

7

Common law and civil law approaches to patent claim interpretation: ‘fence posts’ and ‘sign posts’ 96 Donald S. Chisum v

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8

Indirect infringement of patents in Israel: judge-made law 109 Amiram Benyamini

9

Genomics and the food industry: outlook from an intellectual property perspective 124 Joseph Straus

10

From ‘outmoded impediment’ to global player: the evolution of plant variety rights 137 Margaret Llewelyn Trade marks and unfair competition

11

Dilution of a trade mark: European and United States law compared 159 J. Thomas McCarthy

12

Unfair competition: is it time for European harmonization? 175 Gerald Dworkin

13

Coexistence between the tort of passing off and freedom of slavish imitation in Polish unfair competition law 189 Stanisl
aw Sol
tysi´nski

14

Confidentiality, patents and restraint of trade Jim Lahore and Ann Dufty

202

Copyright, moral and neighbouring rights 15

The Berne Convention: the continued relevance of an ancient text 217 Sam Ricketson

16

The (new?) right of making available to the public Jane C. Ginsburg

17

Private copy licence and levy schemes: resolving the paradox of civilian and common law approaches 248 Andrew F. Christie

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18

Paternalism and autonomy in copyright contracts Paul Goldstein

19

Criminality and copyright Colin Tapper

20

Towards new forms of neighbouring rights within the European Union? 280 Pascal Kamina

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William R. Cornish – curriculum vitae Index

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CONTRIBUTORS

Amiram Benyamini Tel-Aviv District Court Judge. Ph.D. in Law, University of London (L.S.E.); LL.B., LL.M., Tel-Aviv University. Lecturer in Law, The Tel-Aviv College of Management Academic Studies Law School, and the Herzlia Interdisciplinary Center Law School. Michael Blakeney Herchel Smith Professor of Intellectual Property Law, Queen Mary, University of London. Donald S. Chisum Inez Mabie Professor of Law, Santa Clara University, Santa Clara, California Andrew F. Christie Davies Collison Cave Professor of Intellectual Property, University of Melbourne Law School; Director, Intellectual Property Research Institute of Australia, University of Melbourne. Ann Dufty General Counsel, Corrs Chambers Westgarth, Solicitors Gerald Dworkin Emeritus Professor of Law, King’s College, University of London; Director of the Intellectual Property Academy, Singapore. Jane C. Ginsburg Morton L. Janklow Professor of Literary and Artistic Property Law, Columbia University School of Law. Paul Goldstein Lillick Professor of Law, Stanford University. Sir Robin Jacob A Lord Justice of Appeal. Pascal Kamina Dr.Jur. (France), LL.M., Ph.D., Cantab.; University of Poitiers, France. Sir Hugh Laddie Judge, Patents Court and Chancery Division, High Court of Justice for England and Wales. ix

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list of contributors

Jim Lahore Professor Emeritus, University of London; Professorial Fellow, University of Melbourne. David Llewelyn Partner at White & Case. Margaret Llewelyn Ph.D., Reader in Intellectual Property Law, University of Sheffield. J. Thomas McCarthy Senior Professor of Law, University of San Francisco; Founding Director, McCarthy Institute of Intellectual Property and Technology Law. Hector L. MacQueen Professor of Private Law; Director, AHRB Research Centre for Intellectual Property and Technology Law, Edinburgh Law School, University of Edinburgh. Sam Ricketson Professor, University of Melbourne. ´ Stanislaw Soltysinski Professor of Law, A. Mickiewicz University ´ member, Poland’s Codification Commission; School of Law, Poznan; member, UNIDROIT Governing Board. Dieter Stauder Director of the International Section of the Centre d’´etudes internationales de la propri´et´e industrielle (CEIPI) in Strasbourg; Associate Professor of the University Robert Schuman; member of the European Patent Office. Joseph Straus Dr. jur. Dres. jur. h.c., Professor of Law, Universities of Munich and Ljubljana; Marshall B. Coyne Visiting Professor of International and Comparative Law, George Washington University Law School, Washington D.C.; Managing Director, Max Planck Institut for Intellectual Property, Competition and Tax Law, Munich; Chairman, Managing Board, Munich Intellectual Property Law Center. Colin Tapper Emeritus Professor of Law, Magdalen College, Oxford. Hanns Ullrich Dr. iur., M.C.J. (N.Y.U.); Professor, European University Institute, Florence; Bundeswehruniversit¨at, M¨unchen.

FOREWORD

Lord Mustill once observed that ‘some of the most penetrating legal minds, both on and off the bench, have directed themselves to the evolution of patent law’ (Genentech Inc’s Patent [1989] RPC147, 258). He put this down to the fact that ‘the industrial revolution happened where and when it did’, or, putting the matter another way, the tendency for brains to follow money. Bill Cornish’s contribution to the development of patent law (and intellectual property law generally) certainly supports the first proposition, although (academic salaries being what they are) I am not sure that it supports the second. At any rate, whatever the motivation, he has been one of the small band of brilliant academic intellectual property lawyers who have made the subject a fascinating and demanding branch of study. Bill’s contribution has been remarkable not only for the penetration on which Lord Mustill remarked, for the breadth of his learning (demonstrating that a taste for the history of the subject is never a disadvantage in understanding the present law), and for its easy lucidity, but also for the wry irony (one can almost see the slight lift of the Australian eyebrows) which permeates the work and makes it such fun to read. Occasionally one feels that a concession to academic propriety has driven him to decide that the better jokes should be kept in the footnotes and not allowed to break out into the text, but one way or another solemnity is kept at bay. For my part, I am honoured to have been asked to contribute a foreword to this collection of essays to mark Bill’s retirement and thereby to have the opportunity to acknowledge both the assistance and the pleasure which I have had from his work. The word ‘retirement’ itself has some ironic overtones, since although it is no doubt true that Bill will shortly cease to be in full-time paid employment as a law teacher at Cambridge, the possibility that one will plausibly be able to describe him as retired seems very remote. As far as the development of intellectual property law is concerned, the more remote the better. Leonard Hoffmann House of Lords xi

PREFACE

This collection brings together contributions from some of the most distinguished scholars in the field of intellectual property law, that is, patents, copyright, trade marks and related rights. The possibility to assemble so impressive an array of authors in a single volume is provided by the retirement of Professor William Cornish from the Herchel Smith Chair in Intellectual Property at the University of Cambridge. William Cornish was born and educated in South Australia. He came to the UK in 1960, initially to study for the BCL degree at Oxford, and immediately afterwards began lecturing at the London School of Economics. There he spent the bulk of his early career. After a brief interlude at Queen Mary, he was made a Professor in 1970. In 1990 Professor Cornish moved from the LSE to Cambridge University, where he became a Professor and Director of the Centre of European Legal Studies. In 1995 he was appointed the Herchel Smith Professor of Intellectual Property Law. Professor Cornish’s achievements in a career which has lasted over forty years are simply too numerous to review here other than selectively and briefly. Readers wishing to gain a full appreciation are referred to his curriculum vitae, which we publish herein. He is widely, and rightly, regarded as the father of intellectual property teaching and scholarship in the UK. In 1967, while at the LSE, he, Robin Jacob (now Jacob LJ, and a contributor to this collection) and Richard Lloyd, established the first course in Intellectual Property Law on the University of London LL.M. In due course he published his groundbreaking textbook, Intellectual Property: Patents, Trade Marks and Allied Rights in 1981, and, despite the emergence of a number of imitators, it remains – in its fifth edition – the most intellectually sophisticated work of its kind. His careful and subtle thought, informed by an acute awareness of history, of comparative experience abroad, and by a real appreciation of the subtleties of legal reasoning, impressed all who encountered it, whether from academia, the profession or the judiciary. In recognition of his immense contribution to the development of understanding of the law, xii

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in 1997 he was made an honorary QC and is attached to the fine set of intellectual property specialist chambers at 8 New Square, Lincoln’s Inn. Professor Cornish’s contribution extends well beyond the walls of the universities, and well beyond the UK. For example, he has been involved in policy-making within the UK: in the 1980s, advising the House of Lords’ sub-committee on European Community legislation; in the 1990s, as chairman of the National Academies Policy Advisory Group (NAPAG) on Intellectual Property and the Academic Community; and, more recently, in his work (with Margaret Llewelyn and Mike Adcock) on IPRs and genetics for the Department of Health. Professor Cornish has also come to be regarded as the pre-eminent British voice in the international arena, researching at the Max Planck Institute in Munich in 1979, joining the editorship of its publication, IIC, and becoming an External Academic Member in 1989. He was also President of ATRIP, the international association of researchers and teachers of intellectual property, in the 1980s and has been Vice-President of ALAI (Association Litt´eraire et Artistique Internationale) since 1990. For those who have encountered Professor Cornish only through his work on intellectual property law, it may be a surprise to learn that he is also a specialist in civil law and legal history. In fact, his first book, published in 1967, was on The Jury. 1989 saw the publication of his phenomenal survey of modern British legal history, Law and Society in England 1750–1950, written with the late Geoffrey de N. Clark. In addition, he has written on fields as varied as the history of land mortgages and various aspects of the law of restitution. He is a scholar with a remarkable breadth of interests in an era of increased specialization. It was doubtless in recognition of this that he was made a Fellow of the British Academy in 1984. Despite Professor Cornish’s many interests, this festival of writing is an appreciation of his work on intellectual property law. The contributions reflect some of the most pressing practical and theoretical concerns which intellectual property lawyers face today. These include the adaptation of intellectual property law to meet the new challenges of digitization and biotechnology; conflicts between developed and developing countries over the appropriate level of intellectual property protection; the relationship between different legal traditions in a world of increasingly shared international norms; and the relationship between intellectual property rights and neighbouring areas of law. Thanks to the work of Professor Cornish, there is today a body of intellectual property scholars who are well equipped to understand these issues, to assess the nature of the problems

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they confront, and to offer solutions. These essays are offered as a small token of their gratitude. LB DV

Postscript to Chapter 5 The Community Patent proposal has once again come off the rails. In March 2004 the EC Competitiveness Council was unable to finalize it because of problems relating to the legal effect of translated claims, the time for filing translations, and jurisdictional issues. I am only a little sorry about the failure, as the proposals contained deep flaws. The time has come to revive the proposal for a European Patent Litigation Protocol (‘EPLP’), whereby such countries as wish to may form a single Patent Court to litigate parallel European patents. The EPLP proposal is quite advanced and is unfettered by complex constitutional questions (e.g., the Patent Court’s relationship with the European Court of Justice and any need to be located in Luxembourg). It can be driven more by practical considerations. Although the proposal lacked some impetus whilst the Commission was pressing for the Community Patent, that impetus should now be restored. If established, such a Court could very well form the basis of a future Community Court. The latter would then be formed round a working system rather than one frustrated by impractical criteria. It could be staffed by national patent judges, use the language or languages most practicable for the case, sit where most convenient, and have a headquarters somewhere suitable (perhaps Paris?). A nucleus of states such as France, Germany, the UK, and a few others would be enough to get the scheme going. In concluding the EPLP, however, politicians would do well to remember that the patent system is there for industry and the public, and not for patent lawyers, patent agents or even patent judges.

General intellectual property

1 International intellectual property jurisprudence after TRIPs michael blakeney ∗

A. International law and intellectual property rights As in many other fields of intellectual property law, Professor Cornish was a pioneer in the way in which his commentaries and treatises on British intellectual property law were the first to locate that law in its European jurisprudential context. As the counterpart Herchel Smith Professor at the University of London, this contribution attempts to broaden that perspective to take account of the international law impact following the promulgation of the TRIPs Agreement. Intellectual property rights exist primarily by virtue of national laws. So-called global intellectual property rights are a bundle of nationally enforceable rights. However, it is true to say that in most countries, those national rights exist not only as a consequence of domestic legislation or jurisprudence, but also because of international, multilateral, bilateral and regional obligations. In a number of regional associations, such as the European Union, there is the possibility of regional legislation either with direct national effect, or which prescribes national intellectual property norms. International intellectual property laws play an important role in harmonizing national substantive and procedural rules. This is particularly the case with the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), which prescribes domestically enforceable norms for the protection of intellectual property rights as a condition of membership of the WTO. Thus, international law plays an important constitutional role both in providing procedures and modalities for negotiating the norms and standards of domestically enforceable intellectual property rights and in the harmonization of national and regional intellectual property norms. ∗

Herchel Smith Professor of Intellectual Property Law, Queen Mary, University of London.

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The adoption of common intellectual property standards is facilitated when countries can be assured that the same regulatory standards will prevail in competitor states.

1. The legal sources of international intellectual property law The legal sources of international law which are applicable to the international intellectual property regime, as well as all other fields of international law, are conveniently set out in Article 38 of the Statute of the International Court of Justice. This Article provides that the Court, in resolving the disputes which are referred to it, shall apply: 1. international conventions, whether general or particular, establishing rules expressly recognised by the contesting states; 2. international custom, as evidence of a general practice accepted as law; 3. the general principles of law recognized by civilized nations; 4. subject to the provisions of Article 59 [which, inter alia, allows the court to call witnesses and experts] judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law. This Article, which became part of the Statute of the Permanent Court of International Justice of the League of Nations, was incorporated into the 1945 Statute of the International Court of Justice. It lists the principal contemporary sources of international law, although without indicating a formal hierarchy of sources. International intellectual property law is largely derived from treaty law; however, with the increasingly central significance of dispute settlement, general principles of law are becoming more important. Assertions of the primacy of human rights principles above intellectual property law are compelling a re-examination of the traditional international sources of intellectual property law.

(a) Treaty law The international intellectual property regime is grounded upon the Paris Convention for the Protection of Industrial Property 1883, and the Berne Convention for the Protection of Literary and Artistic Works 1886. The gradual development of the international intellectual property regime commenced through the promulgation of special treaties under these two treaties. Two important departures from this process were the formulation of the Universal Copyright Convention in parallel

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with the Berne Convention and the recent promulgation of the WTO TRIPs Agreement. The rules of international law governing the interpretation and application of treaties are set out in the 1969 Vienna Convention on the Law of Treaties. Most countries have subscribed to this treaty. The USA is a notable exception, although it has indicated that it accepts the terms of the Convention as reflecting customary international law applying to treaties. It has not yet been authoritatively established that the treaties establishing regional organizations are governed by the Vienna Convention, but as a matter of practice, this is likely to be the case.1

(b) Customary international law Unlike other areas of law, intellectual property law has been obliged by technological change to develop fairly rapidly. Consequently, the gradual evolution of international intellectual property law through the application of customary principles is not likely in this area. However, even legislative change is too slow to keep up with technological developments and thus private standard-setting is becoming increasingly important. This is particularly the case with the impact of the Internet upon intellectual property law, where the regulation of domain name registrations occurs on a self-regulatory basis. Customary international law principles have been cited in discussions about voting procedures within the Paris Union. Until 1980, votes for amendments to the Paris Convention had to be unanimous, but a proposed amendment during the first session of the Diplomatic Conference to Revise the Paris Convention for the Protection of Industrial Property, which was held in Geneva in March of that year, provided for the adoption of amendments by votes of a two thirds majority. The USA representative stated that it was ‘our view that the rule of unanimity for the adoption of a final text, which was a traditional practice for revision of the Paris Convention that ripened into a principle of customary international law, can itself be changed only by unanimous agreement’.2 As this argument failed to convince the delegates at the 1980 meeting and the following year at the Nairobi Diplomatic Conference for the Adoption of a Treaty 1 2

See J. H. H. Weiler, ‘The Transformation of Europe’ (1991) 100 Yale L.J. 2403. See M. Kirk, ‘Summary Minutes of the Meetings for Diplomatic Conference for the Adoption of a Treaty on the Protection of the Olympic Symbol’ in WIPO, Records of the Nairobi Diplomatic Conference for the Adoption of a Treaty on the Protection of the Olympic Symbol (1984), 70.

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on the Protection of the Olympic Symbol, the existence of a customary international law principle on this subject is called into question. A question which has not yet been explored is the extent to which principles of customary law applicable to the protection of real property and tangible chattels apply also to intangible property. Also to be explored is the application of the customary international law principles such as pacta sunt servanda3 and the legal equality of states.

(c) Judicial precedent Judicial precedent has not proved to be an important source of international intellectual property law. There have been no intellectual property cases brought before the International Court of Justice or its predecessor, the Permanent Court of International Justice. This situation has begun to change with the adjudication of breaches of the TRIPs Agreement by the Dispute Settlement Body of the WTO, based upon recommendations by a panel or the Appellate Body. Although the reasoning of the panels and the Appellate Body are not binding, future panels and the Appellate Body are obliged to consider their reasoning. It has been suggested that the rule of law in the international economic system would be promoted if national and regional courts adjudicating matters falling within the purview of WTO Agreements gave effect to decisions of the panels and Appellate Body.4 National and regional courts are the principal sources of judicial authority in the intellectual property field. Although not primary sources of international law under Article 38 of the Statute of the International Court of Justice, they are important in constituting the body of general principles of international law. (d) Legal writings Article 38 of the Statute of the International Court of Justice refers also to the writings of highly qualified jurists as a secondary source of international law. The common law courts have tended to refer more readily to scholarly works than have the civil law courts. In the rapidly developing field of international intellectual property law, the writings of jurists can play an important role in promoting consistency and coherence. 3 4

The rule that international agreements shall be performed in good faith. T. Cottier, ‘Dispute Settlement in the World Trade Organization: Characteristics and Structural Implications for the European Union’ (1998) 35 Common Market Law Rev. 325.

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(e) General principles of law Aside from treaty law, general principles of law are the most important source of international intellectual property law. A number of important general principles of judicial procedure have already been incorporated into the enforcement provisions of the TRIPs Agreement, such as the requirement in Article 41.2 that ‘procedures concerning the enforcement of intellectual property rights shall be fair and equitable’ and that they ‘shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays’. Similarly the requirement in Article 41.3 that decisions be ‘on the merits of a case shall preferably be in writing and reasoned’ and that they ‘shall be made available at least to the parties to the proceeding without undue delay’ are procedural principles which have arguably become generally accepted. Due process is enshrined in the TRIPs Agreement in the requirement in Article 41.3 that ‘decisions on the merits of a case shall be based only on evidence in respect of which parties were offered the opportunity to be heard’. Article 42 of the TRIPs Agreement requires that procedures are fair and equitable in that defendants are entitled to ‘written notice which is timely and contains sufficient detail, including the basis of the claims’. The Article’s requirement that parties ‘shall be duly entitled to substantiate their claim and to present all relevant evidence’ has probably also become a general principle of law, as has the requirement that procedures not impose ‘overly burdensome requirements concerning mandatory personal appearances’. Substantively, general principles of good faith and equity are probably part of the corpus of substantive international intellectual property law. The doctrine of proportionality, in the sense that laws ought not impose obligations in excess of those that are reasonably necessary to deal with the circumstances which give rise to them is a general legal principle, which has influenced the European Court of Justice. 2. International organizations The administration of aspects of the international intellectual property regime is undertaken by a number of international and intergovernmental organizations which are also established by treaty. The principal general intellectual property organizations at the international or inter-governmental level are the World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO).

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Specific aspects of international intellectual property law fall within the mandates of a number of international organizations: copyright and folklore: United Nations Educational Scientific and Cultural Organization (UNESCO); plant variety rights: Union for the Protection of Plant Varieties (UPOV); access to genetic resources: Food and Agricultural Organization (FAO), Conference of Parties of the Convention on Biological Diversity (CBD), United Nations Environment Programme (UNEP); medical technologies: World Health Organization (WHO); neighbouring rights: International Telecommunications Union (ITU); technology transfer: United Nations Industrial Development Organization (UNIDO); technology transfer and the impact of intellectual property rights in developing countries: United Nations Conference on Trade and Development (UNCTAD). A number of regional organizations have also established intellectual property norms and structures. These include the Andean Pact, European Union (European Patent Organization (EPO) and the Office for Harmonization in the Internal Market (OHIM)), North American Free Trade Association (NAFTA), MERCOSUR and the Association of South East Asian Nations (ASEAN). Additionally, specific intellectual property institutions have been established with regional functions. These include the African Regional Patent Organization (ARIPO) and the Eurasian Patent Office. In each case these organizations were established by treaties which govern their powers and functions. As each of these organizations were established by treaties, the scope and effect of their operations will also be dictated by the principles of treaty interpretation. In the case of the European Union, the oldest of these regional arrangements, the constitutive treaties play an important constitutional role in which general principles of public international law are replaced by constitutional principles.5 The perceived transcendental impact of the global intellectual property regime upon all aspects of human enterprise has caused questions to be raised about the human rights implications of intellectual property. In its Report, Human Rights and Human Development, the United Nations Development Programme (UNDP) suggested that aspects of the TRIPs Agreement might be inconsistent with the International Covenant on Economic, Social, and Cultural Rights and the International Covenant on Civil and Political Rights.6 5 6

See Weiler, n. 1 supra. UNDP, Human Rights and Human Development (2000), 83–88.

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On 17 August 2000 the UN Sub-Commission for the Protection and Promotion of Human Rights, noting that – ‘. . . actual or potential conflicts exist between the implementation of the TRIPS Agreement and the realization of economic, social and cultural rights in relation to, inter alia, impediments to the transfer of technology to developing countries, the consequences for the enjoyment of the right to food of plant variety rights and the patenting of genetically modified organisms, “bio-piracy” and the reduction of communities’ (especially indigenous communities’) control over their own genetic and natural resources and cultural values, and restrictions on access to patented pharmaceuticals and the implications for the enjoyment of the right to health,’

adopted a resolution calling into question the impact of the TRIPS Agreement on the human rights of peoples and communities, including farmers and indigenous peoples worldwide. The resolution noted ‘the apparent conflicts’ between the intellectual property rights embodied in the TRIPS Agreement and international human rights law, particularly that ‘the implementation of the TRIPS Agreement does not adequately reflect the fundamental nature and indivisibility of all human rights, including the right of everyone to enjoy the benefits of scientific progress and its applications, the right to health, the right to food, and the right to selfdetermination’ (Article 2). The resolution reminded ‘all Governments of the primacy of human rights obligations over economic policies and agreements’ (Article 3). On the other hand, the guarantee in Article 27(2) of the Universal Declaration of Human Rights that ‘Everyone has the right to protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author’ suggests that the protection of intellectual property might itself be a human right. This is emphasized in the similarly worded Article 15.1.c of the International Convention on Economic, Social and Cultural Rights. The apparently conflicting intellectual property implications of these human rights conventions can be reconciled by contrasting the role of human rights as a foundational justification for intellectual property protection and the impact of human rights norms in shaping existing intellectual property rights. The UN Sub-Commission’s concern was addressed primarily to the possible adverse impact of intellectual property rights upon access to medicines. In this latter context the signatories of the November 2001 Doha Declaration on Public Health have indicated that

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patent rights in relation to anti-HIV AIDS drugs, should yield to the untrammelled availability of those products. The former context is illustrated by the demands of indigenous groups that intellectual property protection be erected around the traditional knowledge of those groups.7

3. Interpretation of international agreements The main principles of treaty interpretation in international law are set out in Articles 31 and 32 of the Vienna Convention on the Law of Treaties. Article 31(1) provides that a treaty ‘shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its objectives and purpose’. The ‘context’ for the purposes of the interpretation of a treaty, is defined in Article 31(2) in addition to the text, including its preamble and annexes, to comprise: ‘(a) any agreement relating to the treaty which was made between all parties in connexion with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.’

Also to be taken into account, according to Article 31(3), together with the context, ‘(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties.’

Article 31(4) permits the parties to a treaty to give a special meaning to a term. According to Article 32, recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm a meaning resulting 7

See UN Commission on Human Rights, Sub-Commission on Prevention of Discrimination and Protection of Minorities, ‘Draft UN Declaration on the Rights of Indigenous Peoples’ (1995) 34 International Legal Materials 541.

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from an application of Article 31 or to determine a meaning when the interpretation according to the Article leaves the meaning ambiguous or obscure or which leads to a result which is manifestly absurd or unreasonable. These principles of treaty interpretation in an intellectual property context have been addressed in a number of the Panel and Appellate Body decisions concerned with disputes which have arisen under the TRIPs Agreement.

(a) US–India patent protection for pharmaceuticals (1996) This dispute concerned a complaint by the USA that India had failed to establish a mailbox mechanism for the receipt of patent applications, as required by Article 70.8 of the TRIPs Agreement and that it had failed to grant exclusive marketing rights, as required by Article 70.9. The mailbox mechanism was envisaged for developing countries during the transitional period, prior to the substantive patent obligations of the TRIPs Agreement coming into effect in those countries. In setting out the standards applicable to the interpretation of the TRIPs Agreement, the Panel sought to apply the customary rules of interpretation of public international law as set out in the Vienna Convention.8 The Panel ruled that the good faith interpretation of the TRIPS Agreement required ‘the protection of legitimate expectations derived from the protection of intellectual property rights’.9 Also the Panel noted that as the TRIPs Agreement was one of the Multilateral Trade Agreements negotiated under the framework of the GATT 1947, it was obliged to apply GATT jurisprudence, which also recognized the principle of legitimate expectations. Sub-paragraph (a) of Article 70.8 of the TRIPs Agreement required that where a WTO Member did not make patent protection for pharmaceutical and agricultural chemical products available at the date of entry into force of the WTO Agreement, it had to provide a means by which applications for patents of such inventions could be filed. In interpreting this sub-paragraph, the Panel stated that ‘like other provisions of the covered agreements, [it] must be interpreted in the light of (i) the ordinary meaning of its terms; (ii) the context; and (iii) its object and purpose, following the rules set out in Article 31(1) of the Vienna Convention’.10 The Panel found that the ordinary meaning of Article 70.8(a) envisaged the establishment of a mechanism to permit the filing of relevant patent 8 9

WTO, Report of the Panel, WT/DS50/R, 5 September 1997, para. 7.18. 10 Ibid. Ibid., para. 7.24.

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applications and the allocation of filing and priority dates ‘so that the novelty of the inventions in question and the priority of the applications claiming their protection can be preserved for the purposes of determining their eligibility for protection by a patent at the time that product patent protection will be available for these inventions’.11 The Panel found that these findings were confirmed by the negotiating history of the TRIPs Agreement, ‘in which the patent protection for pharmaceutical and agricultural chemical products was a key issue’.12 In addition, the Panel noted that countries were required to provide also for exclusive marketing of the products in question, if those products obtained marketing approval during the transitional period. Finally, applying the GATT jurisprudence in relation to legitimate expectations,13 the Panel observed that ‘predictability in the intellectual property regime is indeed necessary for nationals of WTO Members when they make trade and investment decisions in the course of their businesses’.14 Consequently, the Panel concluded that Article 70.8(a) that India was remiss in not having amended its patent law to permit mailbox applications to lead to the grant of patents at the end of the transitional period for developing countries. It also concluded that unpublicised administrative practices for the receipt of patent applications did not meet the obligations imposed by the TRIPs Agreement.15 The Appellate Body disagreed with the Panel’s distillation of the legitimate expectations principle from earlier GATT 1947 Panel Reports. It considered that since the legitimate expectations principle had developed in the context of non-violation complaints, it would be inappropriate to apply it in a violation context under the TRIPs Agreement.16 The Appellate Body also rejected the Panel’s inclusion of legitimate expectations within the Vienna Convention principle of ‘good faith interpretation’, because this involved the imputation of words and concepts into the TRIPs Agreement, which were not there, or, arguably, not intended.17 The Appellate Body criticized the Panel for creating ‘its own interpretative 11 13 14 15 16 17

12 Ibid., para. 7.27. Ibid., para. 7.29. E.g. WTO, Report of the Panel, ‘United States – Taxes on Petroleum and Certain Imported Substances’ BISD/34S/136, adopted on 17 June 1987, para. 5.2.2. WTO, Report of the Panel, WT/DS50/R, 5 September 1997, para. 7.30. Ibid., para. 7.42. WTO, Report of the Appellate Body, ‘India–Patent Protection for Pharmaceutical and Agricultural Chemical Products’, 1997, paras. 34–42. Ibid., para. 45.

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principle, which is consistent with neither the customary rules of interpretation of public international law nor established GATT/WTO practice’.18 It stated that both ‘panels and the Appellate Body must be guided by the rules of treaty interpretation set out in the Vienna Convention and must not add to or diminish rights and obligations provided in the WTO Agreement’.19 The Appellate Body considered the issue before it to be what ‘means’ were envisaged in Article 70.8(a) for the filing of mailbox applications. Applying the interpretative rules from the Vienna Convention, it sought to resolve this question by an examination of the wording of this provision and ‘in light of the objective and purpose of the TRIPS Agreement’.20 As the latter includes ‘the need to promote the effective and adequate protection of intellectual property rights’, the Appellate Body agreed with the Panel that the means established under Article 70.8(a) had to provide a sound legal basis to preserve novelty and priority.21 It concluded that as the administrative instructions upon which the Indian mailbox system was based, were contradicted by the mandatory provisions of the Indian Patents Act, India had not complied with Article 70.8(a). Similarly, since India had introduced no exclusive marketing legislation, as required by Article 70.9, the Appellate Body agreed that India was also in breach of this provision.

(b) US–Canada term of patent protection (2000) The measure which was in dispute in this case was section 45 of Canada’s Patent Act, which applied a 17-year patent term to patents granted prior to 1 October 1989. The USA objected that this provision did not make available the 20-year patent term mandated by Article 33 of the TRIPs Agreement. The Dispute Panel agreed with the US objection.22 Canada objected to the Appellate Body that the Panel decision was inconsistent with Article 70.1 of the TRIPs Agreement, which provided for the nonretroactivity of ‘acts’ which occurred prior to the date of application of the TRIPs Agreement. Canada also relied on Article 28 of the Vienna Convention on the Law of Treaties, which provides that a treaty’s provisions do not operate to bind a party in relation to any act, fact or situation which pre-dates the treaty’s entry into force for that party. The Panel had ruled that Article 70.1, which was concerned with acts occurring prior to the date of application of the TRIPs Agreement, did not 18 22

19 20 21 Ibid., para. 46. Ibid. Ibid., para. 55. Ibid., para. 57. Report of the Panel, WT/DS170/R, 5 May 2000, para. 7.1.

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override the rule in Article 70.2 of the Agreement with respect to ‘existing subject matter’, which was protected on the date of application. Canada submitted that this ruling failed to consider the contextual relationship between the two provisions. Also Canada submitted that the Panel’s ruling failed to apply the interpretative maxim lex specialis derogat legi generali which stipulates that a general rule, such as in Article 70.1 must yield to those to the specific provisions in Articles 70.6 and 70.7, which concerned the compulsory licensing of patents and enhanced protection, respectively. In addressing Canada’s arguments in relation to retrospectivity, the Appellate Body, applied Article 31 of the Vienna Convention on the Law of Treaties, to address first, the text of the treaty provision.23 Thus, on this textual analysis, the term ‘act’ which occurred before the date of application, concerned matters which were completed by the date of application of the TRIPs Agreement. However, the Appellate Body also noted as a matter of policy, that if this phrase was interpreted to cover all continuing situations involving patents which were granted before the date of application of the TRIPs Agreement, then Article 70.1 would preclude the application of virtually the whole of the TRIPs Agreement to such acts.24 Article 28 of the Vienna Convention provides that: ‘Unless a different intention appears from the treaty or is otherwise established, its provisions do not bind a party in relation to any act or fact which took place or any situation which ceased to exist before the date of entry into force of the treaty with respect to that party.’

The Appellate Body took the view that, absent a contrary intention, Article 28 applied to any ‘situation’ which has not ceased to exist under a new treaty.25 It called in aid, for this interpretation, the Commentary on Article 28, as forming part of the preparatory work of the Vienna Convention.26

(c) EC–US section 110(5) of the US Copyright Act This dispute concerned section 110(5) of the US Copyright Act of 1976, as amended by the Fairness in Music Licensing Act of 1998, which placed limitations on the exclusive rights provided to owners of copyright in relation to certain public performances and displays. Section 110(5)(A) exempted from the concept of copyright infringement, the communication of a 23 24

Report of the Appellate Body, WT/DS170/170/AB/R, 17 September 2000, para. 53. 25 26 Ibid., paras. 59–60. Ibid., para. 72. Ibid., para. 73.

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transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes, unless a direct charge was made to hear or see the transmission, or the transmission was further transmitted to the public. Section 110(5)(B) excepted the communication by an establishment of a transmission or retransmission embodying a performance or display of a non-dramatic musical work intended to be received by the general public, originated by a licensed radio or television broadcast station in an establishment not larger than a prescribed size and where no direct charge was made to see or hear the transmission or retransmission. The objective of the exception in (B), as disclosed in a House of Representatives report, was to exempt small commercial establishments ‘not of a sufficient size to justify, as a practical matter, a subscription to a commercial background music service’.27 The EC alleged that these exemptions were inconsistent with the US obligations under TRIPs, particularly under Article 9.1 together with Articles 11(1)(ii) and 11bis(1)(iii) of the Berne Convention, causing prejudice to the legitimate rights of copyright owners. Article 9.1 of the TRIPs Agreement obliged WTO Members to comply with Articles 1–21 of the Berne Convention, excluding Article 6bis. Consequently, the Dispute Panel accepted that Articles 11(1)(ii) and 11bis(1)(iii) of the Berne Convention had been imported into the TRIPs Agreement. These Berne Convention provisions required the authorization by a copyright owner of the public performance of protected works. The USA argued that the TRIPs Agreement, incorporating the substantive provisions of the Berne Convention, allowed Members to place minor limitations on the exclusive rights of copyright owners and that Article 13 of the TRIPs Agreement provided the standard by which to judge the appropriateness of such limitations or exceptions. Article 13 provided that: ‘Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.’ The US claimed that the ‘minor exceptions doctrine’ constituted a subsequent practice of the Berne Union Members within the meaning of Article 31(3)(b) of the Vienna Convention. 27

Conference Report of the House Committee on the Judiciary, Subcommittee on Courts and Intellectual Property, H.R. Rep. No. 94-1733, 94th Cong 2nd Sess. 75 (1976) cited, ibid., para. 2.5.

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The Dispute Panel explained that in applying the general and supplementary rules of interpretation contained within the Vienna Convention to interpret in good faith the provisions within their terms of reference, they were required to afford the ordinary meaning of the terms of a treaty ‘in their context and in the light of its objective and purpose’.28 Article 31(2) of the Vienna Convention provides that: ‘The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty . . .’

The Berne Revision Conference in Brussels in 1948 had rejected the insertion of the minor exceptions doctrine into the Berne Convention, as encouraging the widening of exceptions. As a compromise, at the Brussels Conference, it was agreed that a statement concerning the possibility to provide minor exceptions in national law would be included in the General Report. The Panel noted that the Rapporteur-General had been ‘entrusted with making an express mention of the possibility available to national legislation to make what is commonly called minor reservations’ and considered that this choice of words reflected an agreement within the meaning of Article 31(2)(a) of the Vienna Convention.29 Additionally, state practice, reflected in the national copyright laws of Berne Union members, as well as of WTO Members before and after the date of the TRIPs Agreement, confirmed the Panel in its view about the minor exceptions doctrine.30 Having established the existence of the minor exceptions doctrine, the Panel considered that it had been incorporated into the TRIPs Agreement as part of the Berne acquis, by virtue of Article 9.1, importing Articles 1–21 of the Berne Convention. This was also confirmed by references to the doctrine in negotiating documents produced during the Uruguay Round.31 Thus the doctrine was held to form part of the context of Articles 11(1)(ii) and 11bis(1)(iii) of the Berne Convention as incorporated into the TRIPs Agreement. However, Article 13 of the TRIPs Agreement required that limitations and exceptions to exclusive rights (1) be confined to certain special cases, (2) do not conflict with the normal exploitation of the work, and (3) do not unreasonably prejudice the legitimate interests of the right holder. The Panel ruled that in applying 28 29

WTO, Report of the Panel, WT/DS160/R, 15 June 2000, para. 6.43. 30 31 Ibid., para. 6.53. Ibid., para. 6.55. Ibid., paras. 6.60–6.66.

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these three conditions to an exception in national law, both actual and potential effects of that exception had to be taken into account. Applying this approach, the Panel ruled that section 110(5)(A) was unobjectionable, but that in relation to section 110(5)(B), the US had not demonstrated that its business exemption did not unreasonably prejudice the legitimate interests of the rights holder.32 Consequently, it recommended that the Dispute Settlement Body requested the US to bring sub-paragraph B into conformity with its obligations under the TRIPS Agreement.

(d) EC–US section 211 Omnibus Appropriations Act of 1998 (2002) This dispute concerned a complaint by the EC that section 211 of the US Omnibus Appropriations Act of 1998 was inconsistent with a number of the provisions of the TRIPs Agreement, as read with the relevant provisions of the Paris Convention for the Protection of Industrial Property. Section 211(a)(1) of the US Act sought to prohibit dealings ‘with respect to a mark, trade name, or commercial name’ which was the same or substantially similar to a mark, trade name or commercial name that was used in connection with a business or assets that had been confiscated by the Cuban Government, unless the consent had been obtained of the original owner, or successor in title to the mark, trade name or commercial name. Section 211(a)(2) provided that no US court could ‘recognize, enforce or otherwise validate any assertion of rights’ by a ‘designated national’ based on common law rights or under section 515305 of Title 31, Code of Federal Regulations, pursuant to which the Cuban Assets Control Regulations had been promulgated. The EC had argued that section 211(a)(1) was inconsistent with Article 2.1 of the TRIPs Agreement in conjunction with Article 6quinquies of the Paris Convention and with Article 15.1 of the TRIPs Agreement. This argument had been rejected by a WTO Dispute Panel. However, the Dispute Panel had sustained the EC argument that section 211(a)(2) was inconsistent with Articles 16.1 and 42 of the TRIPs Agreement, but not with Article 2.1 of the TRIPs Agreement in conjunction with Articles 6bis and 8 of the Paris Convention and was not inconsistent with Article 4 of the TRIPs Agreement. The Panel had also ruled that trade names were not a category of intellectual property covered by the TRIPs Agreement. Appeals were filed by both parties. The US had argued that the interpretation of section 211 by the Dispute Panel was a question of fact and therefore not justiciable by the 32

Ibid., para. 6.265.

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Appellate Body, which was confined to matters of law. This argument was rejected by the Appellate Body, which followed its ruling in the US-India Patent Protection for Pharmaceuticals ruling that ‘municipal law may also constitute evidence of compliance or non-compliance with international obligations’33 and, therefore, it was entitled to examine the Dispute Panel’s interpretation of the meaning of section 211 under US law.34 The issue in this dispute which raised questions about the interpretation of international conventions, was whether trade names were covered by the TRIPs Agreement. Article 8 of the Paris Convention provides that a trade name ‘shall be protected in all countries of the Union without the obligation of filing or registration, whether or not it forms part of the trademark’. The Dispute Panel had ruled that trade names were outside the categories of intellectual property to which the TRIPs Agreement applied. The Panel had relied for its conclusion on Article 1.2 of the TRIPs Agreement, which stated that: ‘For the purposes of this Agreement the term “intellectual property” refers to all categories of intellectual property that are the subject of Sections 1 through 7 of Part II.’ Applying the interpretative principles found in Article 31 of the Vienna Convention, the Panel stated that ‘the textual reading of Article 1.2 is that it establishes an exclusive definition and this is confirmed by the words “all categories” the word “all” indicates that this is an exhaustive list’.35 The absence of trade names from sections 1–7 of Part II of the TRIPs Agreement, the Panel found to be determinative of the issue. The Appellate Body disagreed with the Panel on this matter. It noted that Article 8 of the Paris Convention, which dealt only with trade names, had been imported into the TRIPs Agreement by Article 2.1. The Appellate Body referred to its previous statement in US–Gasoline that: ‘One of the corollaries of the “general rule of interpretation” in the Vienna Convention is that interpretation must give meaning and effect to all the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.’36

The Appellate Body observed that the effect of the Panel’s interpretation, would have meant that there was no purpose in including Article 8 of 33 34 35 36

WTO, Report of the Appellate Body, WT/DS50/AB/R adopted 16 January 1998, para. 65. WTO, Report of the Appellate Body, WT/DS176/AB/R adopted 2 January 2002, para. 105. WTO, Report of the Panel, WT/DS/176/R, 6 August 2001, para. 8.26. WTO, Report of the Appellate Body, United States–Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 1 November 1996, 106.

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the Paris Convention within the TRIPs Agreement. It also rejected the Panel’s interpretation of the negotiating history of the TRIPs Agreement. In particular, it rejected the documents upon which the Panel had relied as having nothing to do with trade names.37 The Appellate Body concluded, inter alia, that section 211 of the US statute was inconsistent with Article 2.1 of the TRIPs Agreement, in conjunction with Article 8 of the Paris Convention. 37

WTO, Report of the Appellate Body, n. 34 supra, para. 339.

2 Harmony and unity of European intellectual property protection hanns ullrich ∗

A. Introduction The European Union has established a system of intellectual property protection of its own making. It embraces everything from plant varieties to patents, trade marks, designs, copyright and its related rights, and it includes some odd outgrowths.1 It has been developed at an accelerating pace. Trade mark protection stems from 1988 and 1994 with a gestation period of roughly twenty years.2 Design laws were harmonized in 1998 with the Community Design being introduced in 2001; overall this took about ten years.3 Whereas Community Plant Variety Protection came into being more rapidly,4 the introduction of Community rules for patents is

∗ 1

2

3

4

Dr. iur., M.C.J. (N.Y.U.); Professor, European University Institute, Florence; Bundeswehruniversit¨at, M¨unchen. Such as Directive 87/54/EEC of 16 December 1986 on the legal protection of topographies of semiconductor products, OJEC 1986 L 24, 36; see E. P Heilein, Die Bedeutung des Rechtsschutzes f¨ur integrierte Halbleiterschaltkreise in der Praxis, 2003. See First Council Directive to approximate the law of the Member States relating to trademarks of December 21, 1988 (OJEC 1988 L 40, 1) – there has never been a second directive on the subject; Council Regulation (EC) No. 40/94 of 20 December 1993 on the Community trade mark (OJEC 1994 L 11, 1 as last amended by Reg. 422/2004 of February 19, 2004, OJEC 2004/70, 1); as to the beginnings see Commission, Memorandum on the creation of an EEC trade mark, Bull EC, Sup. 8/76, 5 et seq. See Directive 98/71/EC of 13 October 1998 on the legal protection of designs (OJEC 1998 L 289, 28); Council Regulation (EC) 6/2002 of 12 December 2001 on Community Designs, (OJEC 2002 L 3, 1, rect’d OJEC 2002 L 179, 31); as to the beginnings Commission, Green Paper on Legal Protection of Industrial Designs, Brussels, June 1991 (Doc III/F/5131/91), 8 et seq. See Council Regulation 2100/94 of 2 July 1994 on Community Protection of Plant Varieties (OJEC 1994 L 227, 1, as amended OJEC 1995 L 258, 3); for an overview T. Millet, ‘The Community system of plant variety rights’, 24 Eur. L. Rev. 231 (1999).

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dragging on for almost more than a generation,5 obliging the Community to create in the meantime, and in the shadow of the European Patent Organization,6 here and there some smaller add-ons on national protection.7 The law on copyright and related rights, by contrast, has been revolutionized by the Community within a decade by no less than seven directives,8 each of them being pushed through the legislative process within a few years. The different periods of maturation of legislation are not due to a varying degree of political consensus in any of the fields of intellectual property. The controversies surrounding the extension of copyright protection to computer software9 have been no less vigorous than those that caused design protection to enter into force on the basis of a non liquet compromise.10 Nor could technological progress, which changed copyright so deeply, account alone for the divide. After all, patent protection should follow technological development most closely. More likely, the divide is the result of the growing importance of the service industry and 5

6 7

8

9 10

The Luxembourg Conference on the Convention for the European patent for the common market (Community Patent Convention, OJEC 1976 L 17, 1) was held in November/ December 1975 after years of preparation, see ‘Die Luxemburger Konferenz u¨ ber das Gemeinschaftspatent, Bericht der Deutschen Delegation’ (Haertel), GRUR Int 1976, 187, 188 et seq. (Munich) Convention for the Grant of European Patents of 5 October 1973, BGBl II, 649 as amended OJ EPO 1999, 1. Notably by regulations for supplementary certificates for medicinal products (Reg. 1768/92 of 18 June 1992, OJEC 1992 L 182, 1) and for phytosanitary products (Reg. 1610/96 of 23 July 1996, OJEC 1996 L 198, 30), and by Directive 98/44 of 6 July 1998 on the legal protection of biotechnological inventions (OJEC 1998 L 213, 13). Directive 2001/84/EC of the European Parliament and of the Council of 27 September 2001 on the resale right for the benefit of the author of an original work of art (OJEC 2001 L 272, 32); Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonization of certain aspects of copyright and related rights in the information society (OJEC 2001 L 167/10); Directive 96/9/EC of the European Parliament and of the Council of 11 March 1996 on the legal protection of databases (OJEC 1996 L 77, 20); Directive 93/98/EEC of 29 October 1993 harmonizing the term of protection of copyright and certain related rights (OJEC 1993 L 290, 9); Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission (OJEC 1993 L 248, 15); Council Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property (OJEC 1992 L 346, 61); Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs (OJEC 1991 L 122, 42). See J. Huet, J. C. Ginsburg, ‘Computer Programs in Europe: A Comparative Analysis of the 1991 EC Software Directive’, 30 Col. J. Transnational L. 327 (1992) with references. See Art. 14, 18 Design Directive; recital 13 Community Design Regulation; supra note 3.

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its marriage with information technology.11 Even more obvious is that the divide coincides with the distinction between intellectual property rights that are acquired by administrative grant, i.e. upon a registration procedure, and those which are acquired by mere operation of the law. As this difference also seems to distinguish those areas of intellectual property where the Community, by an act of unification, has created its own Community titles of protection, from those where it limited itself to harmonize national intellectual property law, the opposition between unification and harmonization becomes a matter of interest. Indeed, at least prima facie, the establishment of the Community’s own system for the protection of Community Marks, Community Plant Varieties, Community Designs and, most likely to come, Community Patents would appear to be the more ambitious Community effort, challenging directly Member States’ sovereignty and political will by establishing a rivalry. But is this enough to explain the different pace of the legislative process? And as regards substance of protection, does Community protection really live up to its role as a rival system? What, in fact is its relationship with harmonization, which sometimes was its predecessor and companion, and sometimes not.12

B. Harmonization and unification: changing roles 1. From harmonization to unification In a conventional Community perspective harmonization and unification may not generally be distinguished according to the breadth of the areas of law covered; these may be general, specific or sectoral, and so it is with respect to intellectual property law. With the exception of copyright law,13 the Community has established or is about to establish systems of protection of its own for all major types of subject-matter of protection, and also for some rather specific or sectoral ones, such as plant varieties and geographical indications.14 Whereas in the latter cases there have been no 11 12

13 14

See Commission, Green Paper on Copyright and the Challenge of Technology, COM (88) 172 final of 7 June 1988. Plant variety protection never was subject to harmonization, and copyright law did not see any effort of unification (see infra 3(a), (b)); in patent law harmonization, for diverse reasons, remained limited to certain types of inventions (see supra n. 7, and infra 2(b)). See infra 3(a), (b). As to plant variety protection see supra n. 4; as to indications of origin see Council Regulation (EC) No. 2081/92 on the protection of geographical indications and designations of origin for agricultural products and foodstuffs, OJEC 1992 L 208, 1 (as last amended OJEC

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parallel efforts of harmonization, national laws of trade marks, designs, and inventions have been harmonized prior to unification. Such harmonization seemed to be intended simply to pave the way for unification. In truth, however, harmonization had and has to satisfy more functions than such a subservient one.

(a) Harmonization at the service of unification Indeed, the historical origins of Europeanization of intellectual property through unification, and the Treaty’s originally narrow concept of ‘approximation’ of laws both contribute to look at harmonization of national intellectual property in a perspective precisely of setting up a unified system of protection. In both trade mark law and patent law the Community entered the scene only with some delay, and then as a deus ex machina coming to solve the problems Member States had created or were unable to overcome when attempting to establish Community intellectual property rights by way of an international convention.15 With respect to design law a rather influential academic initiative had again set the focus on unification.16 Whereas, for another while, unification of patent law was left to fruitless efforts of Member States, the creation of the Community trade mark was begun, in the early seventies, on the basis of concomitant, (in fact, however, prior) approximation of national systems of protection. As, at that time, the Community had not yet the authority to harmonize in the interest of an Internal Market,17 approximation generally tended to

15

16

17

2003 L 99, 1); B. Schwab, ‘The Protection of Geographical Indications in the European Economic Community’ [1995] E.I.P.R. 242. For the development see H. Ullrich, ‘Patent Protection in Europe: Integrating Europe into the Community or the Community into Europe?’ 8 Eur. L. J. 433, 437 et seq. (2002) with references; as regards the Community trade mark, the Community, in fact, started the legislative process early after negotiations for the Community Patent Convention had been resumed, but the decision to proceed by way of a regulation rather than by way of a convention really fell only as the risks of the convention approach materialized, see Commission, Memorandum, infra n. 41, Nr. 4, 47 et eq.; Commission, ‘The Need for a European Trade mark, Competence to Create One’, Working Document III/D/1294/79, 11 IIC 58, 174 (1980) sub D, F. See ‘Auf dem Wege zu einem europ¨aischen Musterrecht’, Diskussionsentwurf des MaxPlanck-Instituts f¨ur ausl¨andisches und internationales Patent-, Urheber- und Wettbewerbsrecht, GRUR Int. 1990, 565 and Ritschler, Report, ibid., p. 559 et seq.; Commission, Green Paper on the Legal Protection of Industrial Designs, loc. cit. paras. 1.10.3, 3.6, 3.9. Art. 100a (now Art. 95) was introduced in 1992 by the Single European Act in support of a new approach to harmonization; see Tietje in Grabitz, Hilf (ed.), Das Recht der Europ¨aischen Union, looseleaf, Munich, Supp. 21/2003, Art. 95 annot. 1 et seq.

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be ‘minimum’ harmonization, and so it was in trade mark law.18 Its main objective was – or seemed to be – precisely to only approximate national concepts of the signs qualifying for trade mark protection so that priority relations with the Community trade mark could be determined clearly, and in a way that was favourable to Community marks.19 In addition, an attempt was made to channel the Community Court’s jurisprudence on exhaustion into a narrower riverbed – an attempt that failed20 – and to bring national systems of protection on a par21 so that Member States would swallow unification more easily – an attempt which, however, had much broader implications.22 In patent law, similar obstacles to unification arising from divergences of national law did not exist or had been removed prior to the Community’s intervention. Thus, the Strasburg Convention on the Unification23 of Certain Points of Substantive Law of Patents for Invention24 has brought a high degree of uniformity to the concepts of patentable invention, novelty, and inventive activity.25 This meant, inter alia, that, conceptually speaking, determination of priority relations became a matter of applying international rather than national standards. The European Patent 18

19

20

21

22 23 24 25

See Commission, A New Trade mark System for the Community – Proposal for a First Directive of the Council on the approximisation of the laws of Member States on Trade marks, Proposal for a Regulation of the Council on the Community Mark, Bull. EC Supp. 5/1980, 14 (introduction to the comments on the proposed directive); First Trade mark Directive, supra n. 2, recital 3 (but the Directive harmonized more extensively than had been envisaged originally). See Commission, A New Trade mark System, ibid. 15 et seq. (comments on Art. 3 proposed Directive), 59 et seq. (Comments on Art. 7 proposed Regulation); ibid., Memorandum, loc. cit. sub No. 90 et seq. See as to the construction of Art. 7 of the Trade mark Directive in accordance with the Court’s previous reading of primary Community law (Art. 30 et seq., now Art. 28 et seq.) Cases C-427/93, C-429/93, C-436/93, Bristol Myers Squibb v. Paranova [1996] ECR I-3457, and its subsequent case-law on repackaging and rebranding by parallel importers, recently CJEC of April 23, 2002, Case C-443/99, Merck, Sharp + Dohme v. Paranova Pharmazeutika [2002] ECR I-3703, and companion cases; for a recent account Gross, Harrold, ‘Fighting for Pharmaceutical Profits’ [2002] E.I.P.R. 497. Such as the extension of trade mark protection to services which, however, was not the original intention of the legislator (see Commission, A New Trade mark System, supra n. 18, p. 14 (introduction to the proposed Directive), but was accomplished only at later stages of the legislative process: see now Art. 1 Trade mark Directive. See infra (b) and 3(a), (b). This is the official ‘misnomer’, because, in truth, it is a convention for the approximation of law. Of 27 November 1963, BGBl 1976 II 658. General transformation into national law, however, was slow – frequently as a package with the European Patent Convention – and became effective only for patents granted following national ratification, cf. Case 35/87, Thetford v. Fiamma [1988] ECR I-3585.

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Convention, which, from the beginning, had been conceived of as the basis for the Community patent system, adopted and expanded these principles. In addition, it established uniformity in respect of such fundamental issues as the additional protection of inventive processes by the protection of the products resulting from the process, the determination of the scope of protection ratione materiae, and the term of protection.26 Most Contracting States revised their purely national systems of protection in accordance with the model set by the European organization,27 and they even anticipated in their national laws some major substantive rules of the otherwise undesired Community Patent Conventions.28 It was mainly the combined effect of the rapidity of technological progress and the slowness of progress in patent law unification which caused the Community astonishingly to intervene by harmonization of national law in an area of patent law where protection will hardly ever be sought only on a national basis: biotechnology.29 As regards designs – and also utility models30 – the situation again resembles that which prevailed at the time of trade mark harmonization. Considerable differences of national concepts of protection concerning even the very rationale of protection, and the interdependence of access to national or Community protection, which results from the principle of priority, led the Community to prepare unification by a ‘minimum’ harmonization of the principles of design protection.31 This need not be 26 27 28

29 30

31

See Art. 52 et seq., 63, 64, 69 EPC. See Haertel, ‘The Harmonizing Effects of European Patent Law on National Patent Laws’ (1983) 14 IIC 719. Such as the definition of acts of infringement and the exceptions therefrom, see Art. 29 Community Patent Convention 1976 (OJEC 1976 L 17, 1), Art. 25 et seq. Community Patent Convention 1989 (OJEC 1989 L 401, 9); §§ 9 et seq. German Patent Act 1981; Art. L 613-1 et seq. French C. Prop. Int. Directive 98/44/EC of the European Parliament and the Council of 6 July 1998 on the legal protection of biotechnological inventions, OJEC 1998 L 213, 13. See Commission, Proposal for a Directive of the European Parliament and the Council approximating the legal protection of inventions by utility model, COM (97) 691 final (OJEC 1998 C 36, 13), modified by COM (1999) 309 final; and lastly with respect even to establishing a Community Utility Model, Commission, Summary report of replies to the questionnaire on the impact of the Community utility model with a view to updating the Green Paper on protection by the utility model in the internal market, Brussels, 1 March 2002. See Commission, Green Paper on the legal protection of industrial designs, loc. cit. sub. 2; recital 6 Proposal for a European Parliament and Council Directive on the legal protection of designs, OJEC 1993 L 345, 14, subsequently specified by recital 5 Directive 98/71/EC on the legal protection of designs: ‘sanctions, remedies and enforcement should be left to national law’.

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explained here in detail.32 But it must be remembered, that the failure of the Community to achieve harmonization with respect to such a major polito-economic issue as the extension of design protection to the repair of component parts of complex products by must-match spare parts also constitutes a major lacuna and drawback of the Community Design.33

(b) Harmonization in the interest of undistorted competition Harmonization measures preparing unification may be specific and/or more or less detailed, and the degree of detail may depend on the unification perspective. A common feature of harmonization in support of unification seems to be its limitation to a minimum. Thus, typically, harmonization concerns the definition of protectable subject-matter, and of the substantive conditions of the acquisition of protection but not matters of procedure, whether regarding registration or invalidation.34 It also extends to the scope of protection, i.e. the definition of infringement in terms of the subject-matter and of the acts covered by the exclusivity, and to the exceptions from that exclusivity. This extension, however, characterizes only Community measures of harmonization, not convention-based uniformization as it has occurred in patent law. The difference arises because Community harmonization is also concerned with ensuring the well-functioning of the Internal Market. It therefore more or less coincides with a distinction between harmonization in the interest of unification and harmonization in the interest of undistorted competition. As will be seen, this additional dimension of harmonization has its own importance for the relationship between market integration and intellectual property policy.35 With respect to unification the point is that, although such additional harmonization is not indispensable for unification, at least not in theory, the latter will always follow the lines of protection which harmonization has drawn first. It is in that positive sense that harmonization and unification are linked together, implying, on the one hand, that, as to its substance, unified intellectual property seems to be subservient to the value and policy judgments underlying 32

33

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See G. Dinwoodie, ‘Federalized Functionalism: The Future of Design Protection in the European Union’, 24 AIPLA Qu. J. 611 (1996); K. Levin and M. Richman, ‘A Survey of Industrial Design Protection in the European Union and the United States’ [2003] E.I.P.R. 111. See European Policy Evaluation Consortium, Final Report, 18 November 2002: Impact assessment of possible options to liberalise the aftermarket in spare parts (available from http://europa.eu.int/comm/internal market/en/indprop/design/spareparts-final eu). See recital 5, Trade mark Directive; recital 5, 6 of the Design Directive. See infra, section 3.

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the legislator’s harmonization decision, and, on the other, a recognition of the need of substantive equivalence of national intellectual property protection. However, the Community legislator considers maintenance of this parallelism to be a matter of its discretionary authority. Some measures of harmonization are offered to national legislators as a non-binding option. This may be an act of respect for national sovereignty, but it raises a question when the Community legislator subsequently adopts the same measure as a rule of unified law, such as in the case of protection of known marks against acts of unfair exploitation outside the realm of confusing similarity.36 As, by definition, harmonization of the rules in question is not indispensable for the well-functioning of the Internal Market, why is its elevation to a rule of unification justified? Does the Community have a broader authority for unification than it has for harmonization?

2. Deeper integration through unification? (a) The objective of unitary protection Unification of intellectual property protection differs from harmonization not only as regards the legal status of the property titles granted – supranational instead of national – but foremost as regards the breadth and depth of the exercise of Community authority. Unification cannot be had at a ‘minimum’.37 While there are interfaces with national law in general which naturally limit the scope of unification,38 the basic principle of Community intellectual property rights is their independence from 36

37

38

See Art. 4(4), Art. 5(5), Trade mark Directive as regards the protection of known trademarks independently from a risk of confusing similarity; as proposed in 1980, the Directive would have excluded Member States from granting such extended protection, reserving it to the Community Trade mark, see Commission, New Trade mark System, supra n. 18 Bull. EC., Supp. 5/80 at p. 16. Though this has been done with respect to the narrow issue of patent term prolongation for pharmaceutical and phytosanitary products (see supra n. 7) resulting in litigation which Case C-350/92, Spain v. Council [1995] ECR I-1985, has resolved with short shrift given to the doctrinal problems of the case: after all, crafting a Community title on a national property right amounts to quite some interference with national law. In particular as regards the relationship with general property law (transfer, inheritance, insolvency, licensing etc.), see Art. 27 et seq. Community Design Regulation; Art. 16 et seq. Community Trade mark Regulation; Art. 22 et seq. Community Plant Variety Regulation. These interfaces may hide considerable potential of conflict, for instance as regards national rules on attribution of ownership in employment relations, and they may have rather profound dimensions, such as those of the relationship between the Community’s IPR policy and Member States’ constitutional principles protecting or limiting private property.

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national law. They are acquired, assigned, maintained, protected and invalidated as a matter of Community law only; their claim to unity rests on the basis that the Community will not only ensure their indivisibility, but also their substantive integrity throughout the Common Market. Therefore, the establishment of Community intellectual property implies the development of a self-contained system of protection that ultimately must be extended even to the remedies for infringement.39 The need, and, consequently, the justification for the introduction of such an autonomous system of protection originally has been based on two considerations, namely the coextension of economic (innovative, marketing) activities of enterprises with the Common Market rather than with national markets,40 and the incompatibility of the principle of national territoriality of protection with a unitary Internal Market.41 Whereas the former reason boils down to a requirement of equal access to equal protection which, in principle, may as well be satisfied by – more or less – enhanced harmonization should full uniformity be really needed on economic grounds, the latter reason seems to be legally compelling. As long as exclusive rights of intellectual property may be acquired, assigned, abandoned or invalidated on the basis of national territoriality, they may, if held separately by independent persons, be the cause of conflicts resulting in territorial market limitations. Such cases exist and have become famous.42 They may be minimized by harmonization,43 but they will not 39

40 41

42

43

In that respect Community intellectual property regulations are not consistently specific: whereas Art. 98 Community Trade mark Regulation, and Art. 90 Community Design Regulation provide for injunctive relief, but leave the definition of claims for damages to national law, Art. 94 Community Plant Variety Regulation autonomously defines the availability of both remedies in detail, and so do Arts. 41 et seq. of the Proposed Community Patent Regulation; for a recent proposal of change see infra n. 111, and accompanying text. See from the beginning, Commission, Memorandum on the creation of an EEC trade mark, loc. cit. Bull. EC 8/76 No. 18 et seq. See Commission, Memorandum on the creation of an EEC trade mark, loc. cit. Bull. EC 8/76, No. 35 et seq.; Commission, A New Trade Mark System, loc. cit. Bull. EC 5/80 at p. 55 et seq. (Comments on the proposed Community Trade Mark Regulation); Commission, The Need for a European Trade Mark, loc. cit. sub. D II; ibid., Green Paper on the legal protection of industrial designs, sub. 3.8.6. See with respect to trade mark law, Case 119/75, Terrapin/Terranova [1976] ECR 1039; Case C-317/91, Deutsche Renault v. Audi [1993] ECR I-6227; with respect to patent law, Case 35/87, Thetford v. Fiamma [1988] ECR 3585. In addition, requirements of domestic exploitation or mandatory licensing obligations may result in territorial splits. E.g. in patent law by substituting the concept of absolute novelty to that of relative novelty, which was at the origin of the Thetford v. Fiamma case, supra n. 42; however, market segregation by territorially separate assignments will remain with us, see Case C-9/93, IHT Internationale Heiztechnik/Ideal Standard [1994] ECJ I-2789.

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disappear. Will unification make them disappear, at least in the long run?44 There is no uniform answer to this question, but it never is fully in the affirmative.

(b) The reality of selective integration The basis for this hesitant reply is the very principle which, of necessity, underlies unification of intellectual property. Enterprises are not obliged to make use of the Community system of protection. It is offered as an option. This implies that enterprises may have good reasons to choose – or to revert back to – national protection. Such reasons may even be compelling, such as those which are characteristic of trade mark protection.45 Here neither harmonization nor unification may overcome the naturally national context of trade mark selection and acquisition. Word marks, by far the largest category of distinctive signs, are language-dependent; the perception of the distinctive character of symbols, pictures, tones is, for example, subject to preconceived or subconscious cultural understanding. Therefore, the impossibility of making the territorial scope of acquiring and exploiting a trade mark match the Common Market is not necessarily due to the territorial limits of protection or to its legal ‘disunity’, but to the factual boundaries of the subject-matter’s merit of protection. The Community Trade Mark Regulation expressly takes account of these limits, and the courts have recognized them constantly.46 All of this does not mean that unification of trade mark protection has no merits in terms of integration. To the contrary, the availability of a Community Mark by one central granting procedure may be particularly useful; not only does it offer the opportunity to obtain a sign that may prevail throughout the entire Common Market, thus providing an incentive to seek protection for signs which so qualify, but it also provides a platform for defining the true scope of the ‘cultural conflicts’ in trade mark ownership and selection, and for minimizing them.47 44 45 46 47

That has been the perspective of Commission, Memorandum on the creation of an EEC trade mark, Bull. EC Supp. 8/76 sub No. 35. See C. Rohnke, ‘Gemeinschaftsmarken oder nationale Marken’, GRUR Int. 2002, p. 979. See recently Ct. 1st Inst. of 3 December 2003, Case T-16/02, Audi v. OHIM, not yet officially published. This original concept (see Commission, Memorandum on the creation of an EEC trademark, Bull. EC Supp. 8/76 sub No. 37, 99 et seq.) has been limited subsequently (see Commission, A new trade mark system for the Community, Bull. EC Supp. 5/80 at p. 71 (comments on Art. 35), but would seem to remain valid as a de facto advantage.

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In patent law there is less need for such a platform of opportunities and conflict minimization. Once standards and conditions of protection have been harmonized, the principles of priority and of novelty and the ubiquitous unity of the subject-matter48 all by themselves reduce the risks of territorially split acquisition of protection to marginality. In this perspective, therefore, there is no good case to be made for unification, and the likelihood of territorially defined assignments, though not altogether marginal, does not really improve it. Territorially limited patent transactions, such as may occur in the framework of mergers and acquisition of enterprises, if outlawed by unification of protection, will take the form of no less market-specific licences, just as they will do in trade mark law. To be sure, territorially selective patenting may raise concerns of market unity,49 but the Court of Justice already has set some disincentives,50 and there are valid reasons for opting for – selective or Community-wide – national protection only. The proposed Community Patent Regulation provides enough examples, such as the – problematic – language regime or the exposure to the risk of being subject to Community-wide compulsory licences.51 Enterprises may also legitimately prefer rapid, albeit territorially limited, acquisition of title by mere registration to the grant of a patent, however secure, after years of an excessively time-consuming examination, and they may wish to have the free choice as to which – cheaper and more expert – court to go when in need of enforcing protection.52

(c) The reduction of transaction costs Similar considerations may apply in the area of design protection, which, though relating to unitary subject-matter, in some instances may best be 48 49 50 51

52

Recognized by the ECJ in Case 15/74, Sterling Drug v. Centrafarm [1994] ECR 1147. See H. Ullrich, ‘Patentschutz im europ¨aischen Binnenmarkt’, GRUR Int. 1991, 1, 7 et seq. See Case 187/80, Merck v. Stephar [1981] ECR 2063; Joint Cases C-267 and C-268/95, Merck/Primecrown et al. [1996] ECR I-6285. As to the language regime see Art. 24a Proposed Community Patent Regulation as modified by the Council, 4 September 2003 and 30 October 2003 (Doc. 12219/03; 14130/03; available at http://europa.eu.int/comm/internal market/en/indprop/patent), H. E. Huebner, ‘Community Patent and Translation Costs’ [2003] E.I.P.R. 543, and H. Ullrich, supra n. 15 at 468 et seq. (2002) with references; as to compulsory licences, see Art. 21 et seq. Proposed Community Patent Regulation. The Community favours a central Community court (see Commission, Proposal for a Decision by the Council on the Establishment of a Community Patent Court and on the appeal from the Court of First Instance of 23 December 2003, COM (2003) 828 final), but interested circles, while not at all hostile, have also extensively argued for designated national courts, see W. Tilmann, ‘Gemeinschaftspatent mit einem zentralen Gericht’, GRUR Int. 2003, 381.

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sought on a national or regional level.53 The general point with respect to all industrial property rights, however, is that the territorial integrity of protection is not likely ever to be achieved or to be desirable as such, or to be attractive enough alone to support unification of the systems of protection. The very fact that in the area of – voluntarily harmonized – patent law there was never enough interest in substantive unity of protection to carry the unification efforts over the hurdles set by the bureaucratic and industrial circles concerned, should be evidence enough that additional advantages or ‘plus values’ of unification are necessary to make it succeed. The most obvious form of the added value of unification by comparison to harmonization is the reduction of transaction costs for either the acquisition and maintenance or the enforcement of protection, or for both. (i) Centralization of registration Thus, in the case of the Community Mark – and most likely also in the case of the Community Design – centralization of the granting procedure represents not only the hallmark of the system,54 and a certain breakthrough in the administrative organization of the Community, but an advantage for all concerned: the applicant, his opponent, and, at least in terms of the public expenditure saved, the public in general. The Community’s granting procedure, though already subject to reform as regards one of its peculiar features, i.e. examination in the interest of facilitating the acquisition of Community marks,55 also proved to be superior to international systems of centralized registration with which, for a moment, it seemed to be in competition.56 The Madrid Agreement for the International Registration of Trademarks simply offers no safe and efficient enough way to obtain Community-wide protection, since it is essentially a system for the acquisition of multiple national protection that depends on the viability of the national mark in the country of origin, and on its recognition in the country of destination. 53 54 55

56

E.g., with respect to local or regional fashion, handicraft products etc. See recital 2 Community Trade Mark Regulation; recital 3 Community Design Regulation; recital 4 Community Plant Variety Regulation. See Commission, Proposal for a Council Regulation amending Regulation (EC) No. 40/94 on the Community trademark of 27 December 2002, COM (2002) 767 final, Explanatory Memorandum at Art. 39; Commission, Report on the operation of the system of searches resulting from Article 39 of the Community Trade Mark Regulation of 27 December 2002, COM (2002) 754 final. See Hannsmann, Schmetz, Supranationale Markeneintragungen, Mitt. Pat. Anw. 1990, 221.

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In patent law, by contrast, the European Patent Organisation’s system of granting patents by a centralized procedure on uniform conditions has proved to be so successful that, despite its high costs and procedural weaknesses, it apparently has been a viable alternative to the introduction of a Community Patent.57 There is, indeed, no doubt that if the European patent did not exist, the Community would have pushed – and would have been pushed – much earlier and with much more energy to establish its own system. In fact, however, ever since the failure of the Community Patent Convention (1976), it did not even dare any longer to insist on the primacy of the system it proposed, but had to accept the nonunitary European bundle of uniform national patents as a rival system of protection.58 (ii) Centralization of litigation The Community, therefore, was in need of yet another advantage of a Community Patent that would give sufficient thrust to the unification effort, namely the provision of a unified litigation system for both invalidation and infringement procedures. The need was obvious enough, but ways to satisfy it proved to be either too demanding or not promising enough. Ultimately, it was and is only the European Patent Organization’s persistent threat to establish a ‘European Patent Judiciary’59 of its own that convinced the Community of the need to take the more determined initiative of establishing a ‘Community Patent Court’ of first instance within its own judicial system.60 The initiative is, of course, controversial and more ambitious than the approach adopted to solve the same problems of unitary enforcement with regard to the Community Trade mark, the Community Design, and Community Protection of plant varieties. There is a limited, but still large number of national courts that have been designated to serve as Community Courts. Leaving aside the problem of forum shopping, which is excluded when jurisdiction is reserved to one court but which is not an evil per se, centralisation of litigation will not necessarily result in better 57 58

59 60

For details see H. Ullrich, supra n. 15 at 440 et seq. Compare Art. 86 Community Patent Convention 1975 to Art. 81 Community Patent Convention 1989 and recital 4 Proposed Community Patent Regulation (supra n. 51); the availability of purely national patent protection, by contrast, has never been put into question. See S. Lugginbuehl, ‘A Stone’s Throw Away from a European Patent Court: The European Patent Litigation Agreement’ [2003] E.I.P.R. 256. See supra n. 52; for the development W. Tilmann, supra n. 52 at 381; H. Ullrich, supra n. 15 at 473 et seq.

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law61 or deeper integration. Its main advantage is faster and safer law at – hopefully – lower cost. Enforcement will, no doubt, become more effective. This, however, is a matter of general concern, which has been taken care of already by the Community in accordance with Article 65 of the Treaty and which, as such, hardly justifies unification in particular areas of the law.62 By contrast, a true advantage of unification of protection over its mere harmonization might be the exclusion of territorially divergent validity/ invalidity judgments, and yet it is highly overrated. Courts are held to construe and apply internationally uniform law, such as that of the European Patent Convention, which precisely governs the conditions of grant and invalidation (Art. 138 EPC), in an internationally uniform way.63 They generally do so even in the absence of a superior court such as the Court of Justice, which, with respect to truly harmonized intellectual property law, watches over its harmonious construction by virtue of its exclusive privilege of ultimate interpretation of Community law. At any rate, the risk of divergent validity judgments again relates much less to the survival of protection of the same invention in different courts than to forum shopping. As formerly in the highly integrated United States, however, that problem concerns much more the legal integrity of the patent system as such than market integration. And unitary courts do not necessarily represent the best solution.

3. Imposing a Community policy of intellectual property protection Unification of intellectual property law may, of course, seek to prevail by offering more advantages than just reduced transaction costs of acquiring, maintaining and enforcing the exclusive right. An attractive bait to put in the window would be more protection than is available under – harmonized – national law. While the Community has done precisely 61

62

63

The problem of intellectual isolation of specialized courts is compounded in the case of full centralization. Thus, a good deal of the recent critique of the functioning of the US patent system is explicitly or implicitly directed at the Federal Circuit Court, see Federal Trade Commission, To Promote Innovation: The Proper Balance of Competition and Patent Law Policy, Washington D.C. October 2003, Chapter 4, II, Chapter 5, IV (available at http://www.ftc.gov/opp/intellect/detailsandparticipants. . . .). Or else decentralised enforcement of EU-competition rules, as introduced by Council Regulation 1/2003 of 16 December 2002 on the implementation of the rules of competition laid down in Art. 81 and 82 of the Treaty (OJEC 2003 L 1, 1), would simply constitute an obvious legislative blunder. For more details see H. Ullrich, supra n. 15 at 456, 467 with references.

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this in trade mark law by granting extended protection to known marks and by dissociating trade mark as property from the business for which it has been developed,64 it generally has not yielded to this temptation. It must, indeed, appear surprising, at least to a naive observer, that the Community has never tried to push its case for a Community patent by dressing it up with protection for computer-implemented and for biotechnological inventions, nor has it sought to promote its Community design by promising protection for spare parts. Rather, it has first dealt with all these pro-protection proposals on the level of harmonization.65 Such caution is hardly sufficiently explained by the controversial nature of these issues, which may make their resolution equally difficult on all levels of legislation. Rather, its reasons may be found in both the complicated structure of Community competences in the area of intellectual property, which make unification and harmonization highly interdependent, and in the very nature of policy decisions on the scope of intellectual property protection.

(a) Harmonization as a political process Both these points are more easily explained by first examining an area of intellectual property, which up to now has deliberately been left out here: copyright law. It is, indeed, revealing that the Community has never extended its worries about the risks of territorially divided ownership and territorially separate assignments of exclusive rights to the area of copyright, even though they clearly exist. Is it because in copyright we are used to it, since the principle of priority does not apply anyway, or is it because, in the absence of a registration requirement, there are no transaction costs to be saved? Clearly, the risks of market splits are fewer. In particular, diversity of ownership due to independent double creation is not linked to territoriality nor a necessary cause for territorial segregation, 64 65

See supra n. 36, and Art. 17 Community Trade Mark Regulation. See Commission, Proposal for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions, COM (2002) 92 final of 20 February 2002 (OJEC 2002 C 151, 129); European Parliament, Directorate-General for Research, Working Paper: The patentability of computer programmes, Luxemburg, Legal Affairs Series, 2002 (by R. Bakels, B. Hugenholtz); Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions, OJEC 1998 L 213, 13, and Commission, Development and implication of patent law in the field of biotechnology and genetic engineering, COM (2002) 545 final; as to spare part protection, see supra n. 33.

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but assignments may be. In addition, public interest limitations of the exclusive right, even if harmonized, may result in at least some de facto territorial division, and then, of course, there are the transaction costs of copyright enforcement territory by territory. In fact, the Community has been well aware of the problems raised by the existence of multiple territorial copyright claims, and once even attempted to solve them by fiction and empty promises.66 It did so by way of a harmonization directive when it sought to establish equal conditions of competition in matters where national laws differed too widely, such as with respect to neighbouring rights, rental and lending rights or the copyright term.67 Although harmonization in these cases may be said to have been minimalist in that it concerned only some specific issues of copyright protection, it very well points to that basic characteristic of harmonization, which is that it is never limited to ‘approximation’. Rather, it involves the very policy judgment which is at the root of any determination of the scope of intellectual property protection, i.e. the assessment of the trade-off between protection and competition,68 and it does so in a situation of actual or potential conflict between the interests of the Member States of the Community. Therefore, when seeking harmonization of national intellectual property law, the Community must be able to persuade Member States that by giving up some of their own intellectual property policy they will jointly gain something more. This Communityled bargaining process between Member States and with the Community, which is nothing else than a permanent effort of enhancing integration, goes far to explain the profile of intellectual property harmonization. It has been clear and easy in the case of the prolongation of the term of copyright protection;69 it was more difficult, but much less doubtful in the case of rental rights, even though the Court of Justice was not convincing on 66 67 68

69

See Art. 1(2)(b) and recitals 14–17 Cable and Satellite Broadcasting Directive, supra n. 8. See references supra n. 8. The economic literature on this fundamental issue of all intellectual property is abundant. For lawyers it has been summarized by W. R. Cornish and D. Llewlyn, Intellectual Property: Patents, Copyright, Trade Mark and Allied Rights (5th ed. 2003), at paras. 1–39 et seq., 3–36 et seq., 9–45 et seq., 9–54 et seq., 15–22 et seq. Thus the problems raised by Case 341/87, EMI Electrola v. Patricia Im- und Export [1989] ECR 79 have been overcome by the across-the-board prolongation of the duration of copyright by the Term Directive (supra n. 8), which was less than satisfactory, see W. Cornish and D. Llewellyn, loc. cit. sub 9–55; as to the international consequences see Eldred v. Ashcroft (123 Ct. 769 (2003)).

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that matter,70 just as it has not been in the case of supplementary certificates;71 and the process failed in the spare parts case where Member States’ conflicting interests are structural and the stakes are too visible.72 In many of the cases, and increasingly so, the Community relied on an overriding common policy rationale as its main argument and means of enticement, namely the enhancement of international competitiveness of European industry by way of extended or reinforced intellectual property protection, an argument that was strong enough even to support the creation of entirely new copyright concepts and exclusive rights.73

(b) Harmonization instead of unification Modernization, adaptation to technological progress, and the promotion of some policy objective, however symbolic,74 have thus become the hallmarks of harmonization in copyright law, and, as in other areas of intellectual property,75 much more so then the concomitant dismantlement of obstacles to integration.76 Their attainment on the basis of a more or less reluctant political goal-adherence of Member States77 requires such a 70

71 72 73 74 75

76

77

Case C-200/96, Metronome Musik v. Music Point Hokamp [1998] ECR I-1953 took the difference between a property system and a liability system of intellectual property protection more seriously than the fundamental right to freedom of business and competition. Case C-350/92, Spain v. Council [1995] ECR I-1985; see also Case C-316/95, Generics v. Smith Kline and French Laboratories [1997] ECR I-3928. See supra n. 33, and Case C-38/98, Renault v. Maxicar [2000] ECR I-2973; Case C-23/99, Commission v. France, 2000 ECR I-7653. See recital 2 Computer Program Directive (supra n. 8); recital 7 et seq. Database Directive (supra n. 8). See the mini-money-mouse to which the Community’s mountains have given birth by the Artists’ Resale Right Directive, supra n. 8. E.g. recitals 1–3, 7, Directive on biotechnological inventions (supra n. 29), and generally H. Ullrich, ‘Protecting Technology: Property or Policy?’ in Granstrand (ed.), Economics, Law, and Intellectual Property – Strategies for Research and Teaching in a Developing Field (The Hague, 2003). The shifting focus of harmonization of intellectual property protection is mirrored by the changing titles of harmonization directives. Out of the overall number of 12 directives or proposed directives, only four expressly state the harmonization objective (trade marks, satellite broadcasting and cable transmission, copyright term, copyright in the information society), whereas all the other are ‘on the legal protection of’ their respective subject-matter. As evidenced by the record of timely and correct implementation, which is conspicuously poor for the Directive on Biotechnological Inventions (see Commission, Development and implications of patent law in the field of biotechnology and genetic engineering, supra n. 65: eight Member States have not implemented in due time and the Commission, after having established an extra-persuasion process now has introduced an action for breach of the Treaty against them). The record is not much better in other areas: six Member States

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high degree of specificity in the details of harmonization that not only the nature of directives as ‘framework laws’,78 which Member States may and must implement, has been altered, but also the difference to the establishment of an outright system of unified intellectual property protection has become a matter of form rather than substance. The Directive on copyright in the information society79 again illustrates this point both by its general approach, the breadth of its coverage, and the limitative nature of the menu of exceptions from which Member States may choose, but not depart one bit. As regards copyright protection, strict observance of the difference of form between harmonization and unification, and abstention from any measure of unification are matters of direct concern for Community law. Indeed, whatever importance the establishment of unitary, Communitywide intellectual property rights may really have for economic integration, if done with respect to copyright law it would create a new problem of competence, if not altogether one of the mode of integration. The reason is that due to the acquisition of copyright protection by the act of creation, i.e. without any requirements of registration but simply by operation of the law (ex lege), unification of copyright protection cannot, as in the areas of industrial property protection, be based on the principle of optionality. Rather, once a ‘Community copyright’ system has been put into force, protection would become automatically operable and effective for all works which qualify for it under the regulation.80 Such protection would be more than a better alternative or substitute to national copyright, it would simply supersede it. Ultimately, therefore, allowing copyright unification would be tantamount to giving the Community concurrent legislative power on the matter which, once exercised, would, within the bounds of the Community copyright, empty national copyright of all its substance, and, for the rest, relegate it to a – problematic, because cumulatively available – default position.

78 79 80

are being sued for not correctly transforming the Directive on public lending right and rental rights (Commission, Press release of January 16, 2004, IP 04/60); nine Member States for not having implemented the Directive on copyright in the information society (Commission, Press release of 17 December 2003, IP 03/1752) etc. The terminology of Art. 32 Draft Treaty on a Constitution for Europe (OJEC 2003 C 169, 1). Supra n. 8. An effect which is entirely distinct from the direct effect of Community regulation as such. Thus, the regulations on the creation of supplementary certificates of protection, supra n. 7, require an application and a registration of the ‘grant’ (to which they are, of course, entitled as a matter of law).

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(c) Priority through preemption? (i) The case of unregistered Community designs Recently, however, the Community has taken precisely such an audacious measure of unification of intellectual property protection. Under its Community Design Regulation, even unregistered designs enjoy protection, and they do so to the same extent as do registered designs (Articles 10, 19(1)). Only the term of protection is shorter (Article 12: 3 instead of 25 years), and the exclusivity is not absolute, but protects only against direct or equivalent copies (Art. 10; 19 para 2). The unregistered design right has its origin in the Max Planck Initiative for a Community design, where it was proposed on the assumption that such short term, basic protection would represent only some sort of an ancillary right to the Community design.81 Recitals 16 and 17 of the Community Design Regulation, however, make it clear that the unregistered right represents an alternative to the registered design right, intended to protect short-lived designs which do not need or support a registration procedure. Clearly, therefore, neither the time limit nor the limitation to infringement by any sort of literal or nonliteral copying makes the unregistered Community Design an appendix to the Registered Community Design82 that could pass the competence-test of Article 308 more or less undetected. Since, by its concept of protectable subject-matter and by its scope, it is fully equivalent to both the registered Community Design and the protection of registered designs under harmonized (!) national law, it clearly has a directly preemptive effect on national protection, whether afforded by registered designs or by other remedies against design misappropriation.83 (ii) Article 308 With the exception probably of trade mark law,84 Community industrial property protection certainly has the factual potential to displace national protection in the long run simply by virtue of the savings of transaction costs.85 As regards design protection, such creeping substitution is all the more likely as the Community has decided to 81 82 83

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See Max Planck Institute, supra n. 16, GRUR Int. 1990, 561, 577 sub III 1, and Art. 8, 11, 12 of the Max Planck draft, ibid., p. 566. V. Saez, ‘The Unregistered Community Design’ [2002] E.I.P.R. 585. This was the intention of the Max Planck initiative (supra n. 16, GRUR Int. 1990, 561, sub III 1), and continues to be the intention of the directive, see V. Saez, ‘The Unregistered Community Design’ [2002] E.I.P.R. 585. For the reasons see supra sub 2. (b). For details see H. Ullrich, supra n. 15 at 482 et seq.

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rival national systems on the same level, namely that of acquisition of protection by mere registration.86 While such a development would be problematic enough,87 extension of Community protection to unregistered designs may raise the more properly legal issue of whether Article 308 of the Treaty authorizes the Community to legislate with preemptive effect in a field like intellectual property, where, according to Articles 30 and 295, Member States seem to have retained at least the sovereignty to maintain their systems of protection.88 The issue has not yet been presented to the European Court of Justice. It is, in fact, an entirely open question whether, when called upon to examine the actual exercise by the Community of the subsidiary authority granted to it by Article 308, the Court would again rely on as blunt an assertion of Community legislative power as it made, first, in opinion 1/94 relating to the Community’s external power,89 and then again, by simple reference, in cases where the Community’s internal authority had been put into question. Indeed, all these latter cases related only to measures of harmonization90 or, at best, quasi-harmonization,91 not to unification, let alone to ‘preemptive unification’. It also is not unlikely that the Court would try to minimize the issue, as the Community apparently would like to have it, for example, by insisting on the short term and the minor economic importance of the unregistered design, if the latter be the case. Therefore, instead of deeply delving into the uncertain grounds of Article 308, a narrower focus is preferred here, namely the question – raised by Article 308 in legal terms of necessity, but dealt with here more as a matter of integration policy – of the proper relationship between unification and harmonization as ways to establish an intellectual property policy of the Community. 86 87 88

89 90 91

See M. Schl¨utelburg, ‘The Community Design: First Experience with Registrations’ [2003] E.I.P.R. 383. See supra n. 85. While Art. 295 clearly protects Member States at least against systemic changes of their property regimes (see Karpenstein in Schwarze (ed.), EU-Kommentar (Baden-Baden, 2000), Art. 295, annot. 6), the question may still be raised whether intellectual protection as a market regulation for information goods enjoys protection to the same extent as does property in general. In this respect, analogies to national constitutional law might be misleading to the extent that the latter relates to the protection of individual intellectual property: see F. Fechner, Geistiges Eigentum und Verfassung (T¨ubingen 1999), 94 et seq., 105 et seq. . Opinion 1/94 [1994] ECR-I 5267, 59. Case C-377/98, Netherlands/Parliament and Council [2001] ECR I-7079 13 et seq. Case C-350/92, Spain/Council [1995] ECR I-1985.

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(d) Government or governance? (i) Optionality as a principle In an integration policy perspective the relationship between harmonization and unification of intellectual property protection in the Common or the Internal Market seems to rest on quite a number of contradictions. As already mentioned, historically unification had been set as the goal by Member States themselves, and has continued to be pursued as a major objective of legal-economic integration by the Community. However, in the legal system of integration as provided for by the Treaty, the basic competence of the Community is one for harmonization only (Art. 95), the competence for unification being merely of a complementary nature (Art. 308). Both provisions, it is true, do have the same policy orientation. As has been shown and is clear from the Court’s case law, Article 95 allows not only more than approximation of national laws, but also the pursuit of any Community policy,92 provided it implies the removal of barriers to market integration. Article 308 is expressly directed at enabling the achievement of Community policies within the framework of the Common Market.93 Since, however, both competences may not simply overlap, or else the subsidiarity condition by which Article 308 limits the Community’s action would be superfluous, there must be a line of demarcation between both competences. Arguably, this line of demarcation must set a limit to unification. It would, indeed, be surprising, if the Community would be empowered to achieve, within the same area of law, so to speak more integration by virtue of Article 308 than it may accomplish on the basis of Article 95. Optionality of Community intellectual property, therefore, appears to be much less a concession made in favour of Member States, than a prerequisite to the Community taking competence under Article 308. This then would mean that the Community may not unify intellectual property protection when this would result in preemption of effective and independent national protection. Such a result, which obviously would apply to protection of unregistered designs by the Community, appears to be all the more justified as the Court has authorized the Community to create entirely new rights of protection by way of harmonization.94 A prominent example is database protection,95 92 93

94 95

See supra n. 90, 23 et seq. As to possible distinctions between the Common and the Internal Market and their consequences for the scope of legislative power afforded by Arts. 95 and 308 respectively, see L. W. Gormley, ‘Competition and Free Movement: Is the Internal Market the Same as a Common Market?’ [2002] Eur. Bus. L. Rev. 517. See supra n. 90. See Art. 7, Directive on Database Protection (supra n. 8) introducing a ‘sui generis’ right of protection for investments in information processing.

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but there are others as well.96 It is, indeed, not easy to explain why the Community chose Article 95 as a basis for introducing the latter, but Article 308 for introducing unregistered designs, and even less so since national design protection had been subject to harmonization anyway97 – unless, of course, Article 95 is held to be altogether the wrong way to develop new titles and systems of intellectual property protection. (ii) From functional self-restraint . . . Arguments limiting harmonization in various ways have been made quite impressively by doctrine on the basis of a functional reading of Article 95 in the light of the principles of specific attribution, of proportionality, and of subsidiarity regarding the distribution of powers between the Community and its Member States (Article 5).98 While, at first glance, some such arguments appear to be unsatisfactory in that they may frustrate the Community’s interest in developing new forms of protection in accordance with technological and cultural change, they in reality all confirm that the Community does not dispose of the kind of general competences which, in a federalist regime, might have been attributed to it. Therefore, whatever control the Community may exercise over the configuration and the development of intellectual property by virtue of Articles 28 et seq., 48 et seq. and 95 of the Treaty, the principles are that intellectual property protection is a matter of national law,99 that the creation of Community titles requires proof which

96 97

98

99

Such as the protection of technical measures of copyright protection, see Art. 6, Directive on Copyright in the Information Society (supra n. 8). Supra n. 3. The Design Directive applies only to registered designs (Art. 2); for the variety of forms of protection, see K. Lewin and M. Richman, supra note 32; with respect to the UK, see W. Cornish, supra n. 68, paras. 14–10 et seq., 14–30, 14–37 et seq. See M. Bonofacio, ‘The Information Society and the Harmonization of Copyright and Related Rights: (Over)Stretching the Legal Basis of Art. 95?’, 26 Leg. Iss. Eur. Integr. 1, 54 et seq. (1999), who ultimately refers the Community to the procedure of Treaty revision. For a general policy critique and perspective see R. Hilty, ‘Entwicklungsperspektiven des Schutzes geistigen Eigentums in Europa’, in Behrens (ed.), Der Schutz des geistigen Eigentums in Europa (Baden-Baden (forthcoming)). See also Tietje in Grabitz, Hilf (ed.), supra n. 17, vor Art. 94–97 EGV, annot 3, 36, Art. 98 annot 52. It is an open question whether Art. III-68 of the Draft Treaty on a Constitution for Europe (OJEC 2003 C 169, 1), once enacted and ratified, will really change the principles governing attribution of competences as regards legislation on intellectual property. It certainly emancipates Community intellectual property from its exceptional status under Art. 308, but this will be only the result of the exclusion of harmonization measures in Art. 17 Draft Treaty, which is the new substitute for Art. 308. The principles of subsidiarity (Art. 9 para. 3) will apply, since Art. III-68 comes within the shared competence of Member States and the Community (Art. 13 para. 2), and since the safeguard of a national system of property is maintained (Art. III-331).

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justifies making an exception from the principle of specific attribution of power, and that there is no rule of preemption. It is these principles which determine the division of functions between unification and harmonization and their limits. The authority to establish Community titles as an option to reduce the transaction costs due to their particular mode of protection by registration is already hard stretched when it is extended to cover the creation of entire systems of intellectual property which apply across all sectors of industry. However, its use is unacceptable in areas of protection, where no comparable costs of access to Community-wide (national) protection exist, but where, instead, protection by Community titles essentially operates to frustrate Member States’ sovereignty. Circumventing such conflicts by extensive harmonization, which results in the total uniformisation of national intellectual property protection, not only encroaches upon the principles of proportionality and subsidiarity, which limit the authority granted by Article 95,100 but also misses the rationale of Article 95. Article 95 does not provide for a general competence of the Community to legislate autonomously in the interests of the Internal Market as it sees fit, nor does it bring the matters at stake into the exclusive jurisdiction of the Community, i.e. it does not provide for a transfer of competences.101 Rather, Article 95 establishes a right of directorship and control over the exercise of national competences by Member States.102 It is aimed at directing Member States rivalry towards Community goals by obliging them to compete by reference to and on the basis of one single common market, and on the merits of common policy concepts. This is quite a lot, in particular as regards intellectual property, the policy and yield of which is traditionally determined by reference to the potential of national territories,103 but it is different from the centralist view of a uniform market operating under homogenous conditions, i.e. conditions which are perfectly equal for all. 100 101

102 103

See, in part dissenting from the prevailing doctrine and case law, Tietje in Grabitz, Hilf (ed.), supra n. 17 Vor Art. 94–97 EGV, annot 54 et seq., 58 et seq. with references. See Art. 95 paras. 4–6. The exercise of national competence may be limited in cases of mandatory and definite (limitative) harmonization, but a directive will never substitute Community law for national law, see also supra n. 99. To use a distinction a` la mode: Art. 95 provides for Community governance, not for Community government. And so does the Community in international trade, both defensively (see Case C-355/96, Silhouette International Schmied v. Hartlauer [1998] ECR I-4799; Case C-173/98, Sebago v. G.+B. Unic [1999] ECR I-4103), and aggressively, see Art. 11, Database Directive; the economic rationale being that intellectual property incentives can best be set by reference to the territorial markets the legislator is able to control.

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This is not the place to discuss the potential and the risks of – horizontal or vertical104 – regulatory rivalry, and the limits to which it must be subject to harmonization in the Community. It may well be a matter of legislative discretion, which an already reluctant Court will not control,105 whether protection of computer software, of short lived designs, of technical protection measures or of databases, to name only some examples,106 needs to be as fully harmonized as it has been. There are so many options for protection, which ought to be explored more carefully. Our overseas rivals sometimes teach us the feasibility and/or desirability of different concepts,107 sometimes they seem to impose their concepts as if we had no choice,108 and sometimes we act opportunistically with a view to apparent international constraints.109 Would not a more distinct use of unification and harmonization of intellectual property be preferable to our rush to unity and uniformity? In the area of registered rights, in addition to its transaction cost advantages, unification seems to be the proper way for offering consistent systems of protection as a model, while limited harmonization may serve to form and to preserve the basis for their development from national experience. There still will be enough interaction and conflict between the two, in particular as unification may be consistent in itself, but not necessarily with existing national systems, and as harmonization will not easily assure such consistency without curtailing the effectiveness of either the supranational or the national system of protection.110 104 105 106

107

108 109

110

See Ullrich, supra n. 85. See supra n. 70. Others would be the protection of semiconductor layouts, see supra n. 1, or harmonization of utility model protection, see supra n. 30, which, however, did not meet with much enthusiasm by industry, and recently disappeared from the Commission’s homepage; for a general analysis and critique see Hilty in Behrens (ed.), supra n. 98 passim. See G. Westkamp, ‘Protecting Databases Under US and European Law – Methodical Approaches to the Protection of Investments Between Unfair Competition and Intellectual Property Concepts’ (2003) 34 IIC 772; J. Reichman, ‘Database Protection in a Global Economy’, Rev. int. dr. e´ con. 2002, 455. See supra n. 1. E.g. by bringing computer software protection under copyright in order to benefit from international protection under the Berne Convention for the Protection of Literary and Artistic Property, whereas, with respect to semiconductor layouts and sui generis protection of databases, the US and the EU respectively took care to stay outside this umbrella. See as to the problems of cumulative Community and national, harmonized or not harmonized protection in the field of designs, Dinwoodie, supra note 32. Cumulation is a general, but unprincipled rule of intellectual property harmonization: see Art. 9,

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(iii) To uniformity and dominance? The fact, however, is that the overall development of intellectual property protection in the Community has taken or is about to take exactly the opposite direction. Thus, by its Directive on measures and procedures to ensure the enforcement of intellectual property rights,111 the Community takes virtually the last and definite step of uniformization between Community and national protection of intellectual property and between the various national systems. Whereas the completion of Community intellectual property protection by common rules and procedures of enforcement may be quite reasonable as a matter of ensuring consistency and effectiveness of the system, harmonization of national rules of enforcement is a rather doubtful enterprise.112 Not only is there an obvious risk of friction with the surrounding system of national law of torts and procedure, as well as a problem of consistency resulting from the fact that national laws have only been harmonized in part. Harmonization of remedies and enforcement procedure is however also bound to produce effects of backlash and spillover as it creates a demand for further harmonization, both horizontally and vertically. Indeed, equal enforcement of nationally unequal rights would make little sense, just as strong enforcement of harmonized law and weak enforcement of non-harmonized law will hardly be acceptable politically. A more subtle form of interpenetration of unification and harmonization of intellectual property protection is presented by the ‘harmonious’ interpretation of the terms and concepts of Community and of harmonized national intellectual property law. Whereas such parallelism of construction seems reasonable to the extent that harmonization and unification are complementary by nature, as in some areas of trade mark law or design law,113 and whereas such parallelism clearly is intended by the ultimate centralization of jurisdiction as regards direct actions and preliminary rulings in intellectual property matters, it gives unification quite some control, if not dominance over national law. This is so because harmonized national law has to be construed in conformity with the harmonization directive as informed by the unification regulation. This cascade of construction is likely to have a deep impact on the nature of

111 112 113

Computer Software Directive, Art. 13, Database Directive, Art. 9 Directive on Copyright in the Information Society (all supra n. 8). Commission, COM (2003) 46 final. See for a detailed critique Hilty in Behrens, supra n. 98, para. 4.3 b) with references. E.g. as regards the concept of a registrable mark, of distinctiveness etc., see supra 1 (a), (b).

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harmonization. In the controversy over international exhaustion of trademark protection, it resulted simply in the transformation of minimum harmonization into limitative harmonization,114 thus suppressing even that residual sovereignty which the harmonization Directive might have left to Member States.

C. Conclusion A contribution in honour of William Cornish certainly is not the right place to further discuss these latter issues.115 The examination undertaken was not intended to be more than a first approximation of the formal aspects of a subject of more profound dimensions. Coherence of a Community system of intellectual property protection has not been looked into, even though it is all too obviously missing.116 Nor did this essay dare to approach its subject from a national rather than a Community perspective, even though a principle of coexistence implicitly was assumed to underlie European intellectual property protection. In fact, at present the ‘division of tasks’ between Community-directed and national protection still seems to rest more on tradition and intuition than on attribution of well-defined specific functions, if that were ever possible.117 Regulatory rivalry is often called upon to serve as a discovery process where human foresight does not reach out far enough. But will it ever result in mutual and timely adaptation of systems where the relationship tends to be hierarchical? Will it do so with respect to matters which, as intellectual property protection, for their larger part, may be readapted only after a time lag of at least a generation?118 Even if so, will the shift of balance, which is bound to recur then in cycles, be preferable to harmony 114 115

116

117 118

See supra n. 103. See W. Cornish, J. Drexl, R. Hilty, A. Kur, ‘Procedures and Remedies for Enforcing IPRs: the European Commission’s Proposed Directive’ [2003] E.I.P.R. 447; W. R. Cornish, ‘Trade Marks: Portcullis for the EEA?’ [1998] E.I.P.R. 172. See as to illustrative problems resulting from cumulation of the diverse forms of – national and/or Community – protection, supra n. 10; as to the spare parts issue, supra n. 33; generally R. Hilty, in Behrens, supra n. 98 passim, in particular para. 4; it would be easy, albeit unrewarding, to add to this list. But see as regards trade marks, supra B 2.(b); as regards utility model protection, supra n. 106; generally R. Hilty, in Behrens, supra n. 98, passim. For the conditions and limits of regulatory rivalry, see Barbouze des Places, ‘La concurrence des syst`emes’, Rev. int. dr. e´ con. 2003 (forthcoming); H. Ullrich, ‘L’ordre concurrentiel, Rapport de synth`ese’, M´elanges Pirovano, (Paris, 2003), 481. It may be noted that the assessment of the results of regulatory rivalry again is a matter of political discourse and decision within the multi-level system of governance, which is that of the Community.

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and unity, which might be established by joint political discourse within the legislative process of the Community? This raises the question of whether the formal process of harmonization and unification has been designed and handled judiciously enough to result ultimately in some harmony and unity of the substance of the law, if that may ever be achieved at all.

3 Oskar Hartwieg’s thoughts on the English legal system dieter stauder (with david llewelyn) ∗

A. Introduction English law has long been a source of fascination for German lawyers.1 In particular, the English procedural rules and the style of judgments which result are still marvelled at today. On the other hand, foreign criticism of the litigation process in England is not unheard of (to use an English understatement, perhaps); for example, the well-known complaint about the high costs of litigation in comparison with the civil law parts of Europe (anyone who has had the misfortune to be involved in litigation in that other common law country, Ireland, will know that even English litigation costs can seem reasonable when compared to the Dublin scales). As the essential basis of comparison between legal systems, German comparative lawyers Zweigert and K¨otz have relied on the notion of ‘the style’ of families of law.2 This ‘style’ can be found in literature, art, architecture, the conduct of a person (a person has ‘style’), and in people’s individual and social environments. The behaviour of people is further reflected in their dealings and conduct before the court and in the legal process. Procedural law and especially litigation practice is an expression of the legal style of a country, it is a part of the social fabric of a society. ∗

1

2

Dieter Stauder, Director of the International Section of the Centre d’´etudes internationales de la propri´et´e industrielle (CEIPI) in Strasbourg; Associate Professor of the University Robert Schuman; member of the European Patent Office. David Llewelyn is a partner at White & Case. See the list of literature compiled by Hartwieg, Die Arbeitsteilung zwischen Anw¨alten und Richtern, p. 58 n. 39 (article published in 1983), reprinted in a posthumously published selection of articles by Oskar Hartwieg, Tatsachen- und Normarbeit im Rechtsvergleich. Ausgew¨ahlte Aufs¨atze (with a Foreword by Kegel, edited by Hesse and Meder with the assistance of Eckardt, Ette, Lendvai, Peinze, Schroeder and Winter), (2003); below this collection is used for the citations of articles by Hartwieg; see further, Zweigert and K¨otz, An Introduction to Comparative Law (translated by Tony Weir), (3rd ed., 1998), p. 180 et seq. and p. 205 et seq. Zweigert/K¨otz, above n. 1, p. 63 et seq.

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Oskar Hartwieg, with whom Bill Cornish played the piano whilst Oskar played his cello, made it his task in the two decades prior to his untimely death in 2001 to present, in a comparative law fashion, as both a model and a source of education the process of litigation and legal practice in England.3 He considered the English legal system, its ‘style’, with wonderment, admiring even the White Book (the bible of litigation practice in the High Court). At the same time he attacked the deficiencies of German legal process and its practices with both a fine understanding and a scathing but cultured pen, whilst promoting many of the methods of working and practices of the English legal process as possible solutions. The fact that he had an idealised vision of the English process does not mean that his views can or should be ignored nor should that detract from a reasoned consideration of his criticisms. As lawyers we should be delighted when our turf is fought over with enthusiasm and emotion, even when that entails harsh criticism: neither Bill Cornish nor Oskar Hartwieg can be accused of avoiding a fight about what they believe is right and just in their chosen areas of legal expertise.4 English-language readers have been deprived of an extensive first-hand knowledge of Hartwieg’s comparative law work, setting out what he finds praiseworthy about English law and problematic about German law, since they have been published mostly in the German language.5 Unfortunately also, his publications may not have been given sufficient credence by the German legal establishment. The very different concepts of English law are not readily accessible to those German lawyers lacking an education in comparative law. Differences between the two legal systems do not lie only in their basic principles and logical nature; a fact understood only too well by the numerous German (and Austrian) comparative and 3

4

5

Main Works: Die Kunst des Sachvortrags im Zivilprozess. Eine rechtsvergleichende Studie zur Arbeitsweise des englischen Pleading-Systems, (1988) and ‘The Art of Framing the Case under English and German Rules of Procedure. A Comparative Case Study’, publ. in Ausgew¨ahlte Aufs¨atze, p. 77 et seq. (supra n. 1), publ. in Japanese 1990; Gerhard Kegel calls it ‘ein Glanzst¨uck’ (Vorwort zu Ausgew¨ahlte Aufs¨atze, p. VIII). Hartwieg was a caustic critic. He combined his criticism of the German style of decision with a critical evaluation of decision making. He was concerned about the independence of the judiciary, especially after the time of fascism, and also the training of young lawyers to be courageous and committed; a view which looked ‘not without envy’ at the judiciary in the Anglo-Saxon world: Konrad Zweigert, ‘Zur inneren Unabh¨angigkeit des Richters’, in Festschrift f¨ur Fritz von Hippel, zum 70. Geburtstag, ed. by Josef Esser und Hans Thieme (1967), pp. 711, 721. In English: ‘The Art of Framing the Case under English and German Rules of Pleading – A Comparative Case Study’ and ‘Pleading Actions and Defences under Foreign Law’, in I. Fletcher, L. Mistelis and M. Cremona (eds.), Foundations and Perspectives of International Trade Law (2001); both articles published in Ausgew¨ahlte Schriften, supra n. 1).

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conflicts lawyers who made their home in England as a result of the rise of Hitler and subsequently enriched so much legal literature in the English language.6 When comparing the common law with the civil law systems of Continental Europe, comparative law study has already accepted that it is unrewarding to attempt the translation of similar, congruent terms. This is particularly so in the area of procedural law. It is one of the most difficult things for a Continental lawyer to explain in English the procedural law of his or her civil law jurisdiction using terminology comprehensible to the English trained lawyer.7 For the majority of terms there are only equivalents and approximations. Translations succeed only with careful functional scrutiny of the expressions used because they can otherwise differ considerably in the legal reality they represent. In the following pages, we highlight some core terms which Oskar Hartwieg developed to structure the analysis of procedural law in his books and essays. He took great pains with selection of terminology and was not afraid to rely on sociological rather than legal definitions. With the creation of new terminology, Hartwieg attempted to develop and provide new tools for comparing legal systems. One additional remark should be noted: the following considerations do not focus on every-day cases, the average piece of litigation, which the parties and judges can handle as a matter of routine.8

B. ‘Framing the case’ This expression pervades Hartwieg’s work9 and describes the requirement that a judge must be able to decide a case in a legally-justifiable and rational way. The basis of the conflict between the parties must be fixed or clearly delineated and then framed in a structured way: ‘[t]he 6

7

8

9

See for example the works of Otto Kahn-Freund, much admired by Hartwieg; e.g. KahnFreund, ‘Common Law and Civil Law – Imaginary and Real Obstacles to Assimilation’, in M. Cappelletti (ed.), New Perspectives from a Common Law of Europe (1978), p. 137 et seq. An example given by Oskar Hartwieg is the translation of ‘remedy’ with the notion ‘Rechtsbehelf’; in English law the remedy is an essential part of the case and cannot be separated from the substantive questions, see F. Lawson (with the assistance of H. Teff), Remedies of English Law (2nd ed., 1980). See Hartwieg, ‘Innovationsleistungen zivilrechtlicher Sachverhaltsarbeit’, in: Ausgew¨ahlte Schriften, supra n. 1, p. 30 et seq.; the English procedure in such cases can be viewed as a Rolls Royce compared to a Volkswagen, both of which reach the same place but with differing degrees of comfort and expense, a comparison made by H. K¨otz, ‘Zur Funktionsteilung zwischen Richter und Anwalt im deutschen und englischen Zivilprozess’, in Festschrift f¨ur Imre Zajtay (1982), pp. 277, 292. Hartwieg, ‘The Art of Framing the Case’, supra n. 3.

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most delicate, hard and time-consuming work in every civil action is the elaboration of a determinable case’.10 For the purposes of trial, the substance of the argument is distinguished either as fact or as a question of law. This distinction is prevalent in all rational legal systems. Two tasks of the judge are bound together: the determination of the facts through appropriate evidence, and the legal evaluation of those facts. Where facts are concerned, legally relevant facts are to be separated from the irrelevant ones, a separation that depends on a clear structuring of the legal rights claimed and the defences put forward. A further task of the ‘case framing’ is to draw together the substantive issues and the procedural law.11 In the course of educating foreign lawyers about German law and its legal mindset, the following is always emphasised: the German lawyer learns about substantive law quite independently of its application through litigation procedure, of the cause of action and of all other procedural idiosyncrasies. The substantive law, which consists of a web of rights and duties, is a comprehensive edifice fabricated and furnished with an inner logic. This fabrication is structured and controlled by a network of systematical principles and dogmatic schemes. The German lawyer spends a lot of his time and effort during legal training understanding the interplay of these rights and duties, which regulate all events from the cradle to the grave, and in contextualising them. At this point, an interesting, comparative law observation arises which highlights the effect of this way of thinking: through this legal system the German lawyer learns to resolve conflicts between different legal provisions each with distinguishable rights and duties. Without this highly developed set of rules,12 the plethora of self-traversing claims and defences would result in a dysfunctional legal system. Thinking in terms of resolution of conflicts between parallel or concurrent rights is a necessity in any legal system which endeavours to create a coherent law possibly without internal contradictions, in a comprehensive way within a unitary and balanced system. The balancing of conflicting rights is the art of the German civilian lawyer. It is difficult for him to comprehend how relatively little the English 10 11

12

Ibid., at p. 83 Hartwieg analysed critically the method called ‘Relationstechnik’ taught to young lawyers in Germany in: Hartwieg H. A. Hesse, Die Entscheidung im Zivilprozess. Ein Studienbuch u¨ ber Methode, Rechtsgef¨uhl und Routine in Gutachten und Urteil (1981); using as an historical model the actio system of Roman law, p. 105 et seq. See K. Larenz and C.-W. Canaris, Methodenlehre der Rechtswissenschaft (3rd ed., 1995), p. 87 et seq.

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lawyer appears to be confronted at trial with the collision of bases of claim and substantive provisions. The evolutionary system in which preconceived causes of action have been developed and refined over many years assists the English lawyer in the detailed construction of his claim, since those pre-formulated causes of action are available into which he inserts the factual details of the dispute. On the other hand, in German legal disputes the lawyers are forced to frame their case with a view swinging back and forth (mit ‘pendelndem’ Blick) between factual content and legal norms. Framing the case by means of a legal norm as the basis of a claim (defining the cause of action in the English sense) is not done in German law and proceedings, and can emerge for the first time late in the process: the English process seeks to put the dispute into a pigeonhole, a cause of action, at an early stage (and through the division of labour between the advocates and the judge.)

C. Pre-trial procedures in English law and the German law position English litigation is noted for its development of the case through the interim stages. After proceedings have been issued, the claimant then sets out the scope of the claim in the claim form, to which the defendant responds. From then on, further pleadings ensue, with amendment upon amendment after amendment. Details of factual events are relied on in the pleadings and thus the mixture is of fact and of law. The development of the case is achieved in a formal way, so that a clear framework of rights and defences is produced. Only then does the procedure concern itself with which facts are contested or averred. This process is referred to as ‘action-based’.13 The term is one which emanates from Roman law in which the ‘actio’ is a form of pleading which informs the judge of the claim and defences upon which he must decide once certain evidence is adduced. Through its rigorous operation, the English litigation procedure provides certainty in the development of the dispute to be resolved. In Continental Europe, on the other hand, it remains unheard of for such a system of pleadings to develop at the pre-trial stage before the 13

Hartwieg has invented a new term: ‘Remedial Framing of the Case’ in ‘Prozessuale Aspekte einheitlicher Anwendung der Wiener UN-Konvention u¨ ber dem internationalen Warenkauf (CISG). Eine komparative Fallstudie zur einheitlichen Rechtsanwendung’, in Ausgew¨ahlte Aufs¨atze, supra n. 1, p. 107 et seq.

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matter comes before the judge at trial. It is viewed as costly both financially and in terms of time and may deter parties from pursuing the matter to trial. Since the parties are obliged to understand all the argued and unargued points and to present (as a result of the comprehensive process) to the court an itinerary for the case, there are many tactical possibilities and opportunities for procrastination in these pre-trial stages. Here lies the weakness in the English procedure and recent changes (in particular the early case management conference before a junior judge, which helps to move the procedure more in the direction of a judge driven process rather than the traditional party driven one) have sought to reduce these possibilities and opportunities, with a certain degree of success.14 It is time at this juncture to cast a comparative law glance15 at the German process: when a party here contests manifest facts, which it knows itself or which can be identified in evidence adduced early, a decisive judge can extinguish such an argument under German law by applying the precise rules of evidence and by reversing the usual burden of proof. This means that the judge is able during the trial to clarify which facts need to be proved by evidence and which party is obliged to prove them. This active intervention by the judge leads to the English view that a ‘judge administered’ legal process operates on the Continent, whereas the English procedure is still to a large extent driven by the parties to the dispute.16 Hartwieg noted that ‘German judges in practice frequently confess that they spend about 90% of their professional work in finding out from [the parties’] complex and often inconsistent statements, what they really want to say, what they in fact are contending and whatever the real case they are dealing with might be’.17

D. Division of labour between advocates and judge18 An important principle in German litigation is that a judge may pronounce his decision when he decides that the case is mature enough for 14 15

16

17 18

See Davis, ‘Developments in English patent litigation’, EPI Info 3/2003, p. 79. See Hartwieg, ‘Prozeßsreform und Summary Judgement. ‘Prognostisch-fr¨uhes’ und ‘Wahrheitserh¨artet-sp¨ates’ Entscheiden’, in Ausgew¨ahlte Aufs¨atze, above n. 1, p. 217 et seq. For an explanation of recent changes in the procedure, see W. Cornish and D. Llewelyn, ‘Le contentieux de la contrefac¸on de brevet en Grande Bretagne’ in ‘La d´efense des droits ´ de la propri´et´e industrielle en Europe, aux Etats-Unis et au Japon’, in M´elanges offerts a` Dieter Stauder (2001), p. 40 et seq. (published in English at (2000) 31 IIC 627). ‘The Art of Framing the Case’, supra n. 3, at p. 86. See Hartwieg, ‘Die Arbeitsteilung zwischen Anw¨alten und Richtern’, in Ausgew¨ahlte Aufs¨atze, supra n. 1, p. 51 et seq.

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resolution. On the other hand, in an exaggerated fashion, it could be said of the English system that the case comes before a judge only when it is ready for deciding. Under German law it would suffice that the claimant presents a case in which it sets out its desired remedy: it is unnecessary that a lawyer also presents legal argument. An old legal adage which is still taught today proclaims that ‘the parties present the facts, the court knows the law’: iura novit curia. Of course, such an over-generalization is today no longer legal reality. Moreover, lawyers mostly adopt a position on the legal basis of a claim in addition to the presentation of the facts upon which the case is based. However, there is in German procedure no equivalent to the English procedural rule whereby the parties must make legal submissions, or the strict requirement that the defendant traverse specifically the claims put forward. The consequences are not unknown. The claimant presents facts, the defendant answers. Legal pleadings accompany these formal documents, the reliance on particular legal bases is however neither binding on the court nor on the adversarial parties: ‘every lawyer will see that the complaints made by Charles Dickens about the London Chancery Division in the early 19th century can be made in respect of the German civil procedure practice of the late 20th century’.19 The German system thus presents the defendant with a broad opportunity to hinder the clear framing of the case according to a particular cause of action by permitting a wide-ranging presentation of both relevant and irrelevant information. The claimant, too, is also allowed to present a mass of facts from which the judge can then extract support for a particular remedy: in Hartwieg’s view resulting in judgments which ‘may be characterized as positivistic and idealistic but sometimes remote from the very facts of the decided case’.20 These very general forms of pleading do not apply to many professional and responsible lawyers, who try to ensure well-structured claims and defences. It is evident that in the field of intellectual property, with its high cost and often specialist legal counsel, lawyers on both sides try to maintain consistent and coherent claims and defences. However, this is not compulsory. The non-compulsory form of claims and responses to them has the consequence that the judge is active in the exchange of written pleadings and intervenes to produce clarity. The judge’s duty is to promote 19 20

‘The Art of Framing the Case’, supra n. 3, p. 94. ‘The Art of Framing the Case’, supra n. 3, p. 86.

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cooperation between the parties in producing their pleadings and, under the court’s direction, to limit the case to the relevant facts. The role of the judge goes further in identifying which facts are to be argued and which are not. This active intervention of the judge in the procedure makes sense and indeed is the direction in which English procedure has gone in recent years. An alternative is that the judge would wait until the parties have made their full submissions and have been heard in order then to determine which facts are really relevant and instruct the parties accordingly. That could lead to surprise decisions and deprive the parties of their right to put forward their case in the way they consider most appropriate. It is therefore viewed as necessary in such a system that the judge intervenes for the protection of the parties. In the English procedure the intervention serves a different purpose: here it seems that intervention at the interim stages is deemed necessary in order to speed up the process in the interests of the parties and of justice.

E. Costs of trial: a comparison Hartwieg was not unduly concerned about the high costs of the English procedure. Despite this, we offer a few thoughts on this contentious question. Whether there is still such a large difference in this respect can be argued. It is indeed not so certain any more that much litigation before the English courts is significantly more expensive than comparable litigation in many civil law countries. The hardest part of the English legal battle lies at first instance against which appeals are only brought occasionally (and in recent years this has been tightened further) and only rarely does a case reach the House of Lords as a last stop. Thus, it may be misleading to compare only the costs of a first instance trial, given that in the Continental system far more appeals happen as a matter of course. In addition, only a small number of issued proceedings end up before the judge at trial and result in a judgment. Some 90 per cent of cases formally commenced are compromised through settlement before trial, especially now that there are severe costs consequences if a party is unwilling to enter into good faith mediation efforts. From this perspective, comparative law analysis begs the question whether such a process has advantages over the Continental one. On the Continent, a much larger number of judges pronounce a larger number of judgments and there are

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far more appeals.21 It must be at least arguable that the better system may be that where the parties are more willing to settle. But here we meet an objection: would not every court system receive praise as a result of this argument, even when it is inefficient? The differentiation with the English system must lie in the following: first of all, it is coming ever more to the fore that with the growing number and cost of legal conflicts, ‘alternative dispute resolution’ (ADR) is becoming more popular.22 Secondly, English court practice is in no way inefficient but is highly developed and of an internationally recognised quality. The attraction of the English system must lie elsewhere. One can search for it in the interim stages, during which settlements are usually arrived at, increasingly with the encouragement of the judges. It can be argued also that the whole pre-trial process takes the form of an alternative dispute resolution system, an encouragement to settle. Indeed, the frontloaded nature of legal costs under the recent so-called Woolf reforms of procedure are in themselves a significant incentive to settle (especially combined with the general rule that the costs follow the event after a trial, in other words the loser pays the winner’s costs, or at least a large proportion of them). Generally, both systems, the English and the German, should encourage serious negotiations towards settlement. In English procedure it is often beneficial that there is an exchange of written submissions both on fact and on the legal position which can identify for the parties what the risk is and tend towards the encouragement of settlement. There is something similar in the German process: pleadings and defences may be used in a conciliation hearing with the judge who may, of his own volition and on the basis of the preparatory work, suggest a sensible solution. However, an objective observer would surely conclude that the German civil process has to accept more the need for the parties to orientate their submissions towards properly-framed legal claims. This requires that they be presented clearly. One has to compel the parties to present a coherent structure for their submissions. Similarly, the defendant should orientate himself in his defence towards the submissions in the claim. In the recent changes to English process, it has been learnt from the German practice that it is also the judge’s task to clarify at an early stage which issues are 21 22

These factors are also mentioned by Hartwieg, ‘Die Aufgabe der Streitfixierung’, in Ausgew¨ahlte Aufs¨atze, supra n. 1, p. 49. This is now a major subject in England; see for example H. Brown and A. Marriot, ADR Principles and Practice (2nd ed., 1999), paras. 3-016 et seq. and 3-032 et seq.

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relevant and which are not, and thereby avoid unnecessary work (and cost).

F. Judgment style The German style of judgment is, at least according to textbooks and arguably actually is in practice also, an expression of the authority of judges. It presents the outcome from the judge’s point of view: not in a discursive, but rather an authoritative way. This is changing, however. Nonetheless, there is still a difference in German legal education between judgment style and opinion style and woe betide the law candidate who writes a draft of a judgment in the reasoned style of an opinion. Oskar Hartwieg directed a keen attack against this form of judgment style: ‘the courts’ reasoning appears as laconic; in consequence pleadings, facts and the procedural development of a case at hand are rarely reported in detail, while the courts take much attention to their (often highly abstract) legal arguments’.23 Quite apart from anything else, there is the strangeness of German law that the names of the judges, of the parties and of other persons involved are left out of published judgments.24 On the other hand, the English judgment is exemplary in style.25 The judge writes personally, he sets out the matter in a concrete and detailed manner, he explains what he thinks, opines, has reservations and doubts,26 is irritated or may retrospectively correct a witness without contradicting him. The English judgment is discursive, in some ways narrative, but nonetheless human. It is to a significant extent the expression of a human interaction with the parties and also the case. It allows much more to be understood by the third party reader (and also the parties), and it should be valued for this. It is trite to say that English judges make the law and that German ones, like other continental civil law judges, apply the law. Of course, it 23 24

25

26

‘Pleading Actions and Defences under Foreign Law’, above n. 5 at p. 245 in n. 20. Hartwieg, ‘International Trade Law und die deutsche Justiz. Nebst Case Study zum Renvoi durch Qualifikation im Rechtsvergleich’ (publ. 2002) in Ausgew¨ahlte Aufs¨atze, above n. 1, p. 285 and to the ‘judiciary as a tool of control’, p. 296 et seq.; a last and highly controversial text by Hartwieg. Very worthwhile reading on the style of judgments in France, England and Germany is ¨ K¨otz, ‘Uber den Stil h¨ochstrichterlicher Entscheidungen’, 37 RabelsZ 245 et seq.; for a comparison between Germany and France, see Zweigert/K¨otz, above n. 1, p. 130. Hartwieg called it ‘Die Pr¨azision des kundigen Zweifelns’ (the precision of experienced doubts) in the common law, in: ‘Auslandsurteile im Wirkungsvergleich’, in: Ausgew¨ahlte Aufs¨atze, above n. 1, p. 274.

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is appreciated today that there is not really such a clear differentiation. The case is the important thing in terms of legal reality; and yet the highest German courts (and also the lower courts) fill their judgments with guidelines, which are unknown in English cases. The English judgment is an object of wonder to the Continental lawyer. It makes him smile with its comprehensive and detailed content. It portrays the case as a story of the facts and the trial, especially when it goes to the House of Lords. It is surely the openness of the English judgment which leads the Continental reader to marvel.27 No judge in Continental Europe is able to take so much pleasure in recounting a case as an English one (even though today none really matches the heights of some of the imagery used by Lord Denning). It is not inconceivable that an English judgment in a case which is not legally complex could consist of a clear narration of the events in dispute, after which the judge states ‘and so ordered’ without any, or little, discussion of the law. The application of the law, the judgment, arises so directly from the description of the facts that it is not necessary to discuss particular legal provisions or cite case law.

G. Summary The realisation of the ideals of justice through the civil process was the most important concern in the legal career of Oskar Hartwieg. In his legal publications, he occupied himself critically with the historical condition of the law and was, so far as German law is concerned, interested in the causes that led to injustice in Germany’s history. It was his quest to examine the relationship between legal instruments and processes and the people who take part in the process and how these affect the creation of law. In doing so he aligned himself with the true thinkers about the German and English legal systems who approach each with an open but critical mind and therein lies the ongoing connection with Bill Cornish. 27

As an example for German readers, see the judgment of Megarry VC in Flynn v. Flynn, [1968] 1 WLR 103.

4 Intellectual property in a peripheral jurisdiction: a matter of policy? hector l. macqueen ∗ ‘The law [of intellectual property] . . . is largely based on statutes applicable to the United Kingdom as a whole. By contrast, most of the case law has been decided in English courts. Nonetheless there are three separate jurisdictions to which litigants may on occasion resort. While the procedures and remedies available in Northern Ireland closely resemble those of England and Wales, the Scottish system is often distinct in substance or in nomenclature. The special characteristics of Scottish litigation, however, are not pursued here.’1

Bill Cornish has not often had other occasion to refer to Scots law or Scotland in the course of his published work, whether on intellectual property,2 legal history,3 or other topics.4 But nevertheless his support ∗

1

2

3 4

Professor of Private Law; Director, AHRB Research Centre for Intellectual Property and Technology Law, Edinburgh Law School, University of Edinburgh. I am grateful to Frances MacQueen, Alan Peacock, Donald Smith and Charlotte Waelde for helpful discussions of some of the issues raised in this paper. I have also benefited from my time as a member of the following groups: the board of directors of the Edinburgh University technology transfer company, Edinburgh Research and Innovation Ltd; the British Academy working party on the contributions of the arts, humanities and social sciences; and the DTI Intellectual Property Advisory Committee. All website references were last checked on 31 December 2003. W. R. Cornish and D. Llewelyn, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th edition, Sweet and Maxwell, 2003), ch. 1–03. A similar paragraph is found in all the preceding editions of the book, which are of course by Bill Cornish alone. Note, however, recognition of the significance of the Scottish dimension in the early history of copyright in W. R. Cornish, ‘The author’s surrogate: the genesis of British copyright’, in K. O’Donovan and G. R. Rubin (eds.), Human Rights and Legal History: Essays in Honour of Brian Simpson (Oxford University Press, 2000), 254–70, at 259–60. To the references there given, add now A. Mann, ‘Scottish copyright before the statute of 1710’, 2000 Juridical Review 11, and ibid., The Scottish book trade 1500–1720: print, commerce and print control in early modern Scotland (Tuckwell Press, 2000), ch. 4. But see W. R. Cornish and G. de N. Clark, Law and Society in England 1750–1950 (Sweet & Maxwell, 1989), at 18, 63, 277. See e.g. W. R. Cornish, The Jury (Pelican, 1971), at 16, 282–3. Note also the impact of Bill’s work on restitution (Scottic´e, unjustified enrichment): see his ‘“Colour of office”:

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of colleagues working on intellectual property in Scotland, notably with regard to the AHRB Research Centre for Intellectual Property and Technology Law at the Edinburgh Law School, has been generous, unstinting and greatly appreciated by the beneficiaries. The thought that the topic for this essay could be appropiately addressed in Bill’s honour was prompted by recollection of some gently amused comments of his at the time about the opening ceremonies of the Scottish Parliament on 1 July 1999, in particular his musician’s appreciation of the singing in the chamber (and, significantly, before the Queen) of Burns’ ‘A man’s a man for a’ that’.5 On the face of it, however, Scottish devolution did not seem a matter of much moment for intellectual property lawyers as such. The Scotland Act 1998 reserves to the Westminster Parliament legislative competence over intellectual property (henceforth ‘IP’), Internet services, electronic encryption and, indeed, much commercial law in general.6 And even if the devolution settlement is not necessarily set in stone for ever, it seems unlikely that there will ever be a legislative power to create Scottish systems of patents, copyright, trade marks, designs, and so on; indeed, the initiative on these subjects now does not even lie at UK, but rather at European and global levels. Despite all this, on 22 June 1999, I found myself arguing in the annual lecture of the Scottish Group of the Society for Computers and Law that IP was an important subject for a devolved Scotland.7 I pointed out that in modern development and reform of IP laws the most vocal and powerful influences came from large industry and others in the ‘centres’ of IP, while those from the ‘periphery’, such as Scotland, were scarcely to be heard at all, even although their interests were not necessarily co-terminous with those at the centre. The fact that the Scottish Parliament could not legislate in a

5

6 7

restitutionary redress against public authority’ [The Sultan Azlan Shah Law Lecture 1986], (1987) Malaysian and Comparative Law 41; on the House of Lords, in Woolwich Building Society v. Inland Revenue [1993] AC 70, a case which was of crucial importance to the reorientation of Scots enrichment law in Morgan Guaranty Co of New York v. Lothian Regional Council 1995 SC 151. For the programme of songs and readings at the opening of the Scottish Parliament, see http://news.bbc.co.uk/1/hi/special˙report/1999/06/99/scottish˙parliament˙opening/377516 .stm. An opportunity for some reciprocal amusement arose from the proceedings on 2 May 2001 when Nelson Mandela became an Honorary Fellow of Magdalene College, Cambridge, of which Bill was then President: see the BBC’s report at http://news.bbc.co.uk/ 1/hi/uk/1309216.stm. Scotland Act 1998, Schedule 5 Head C. The lecture is published as ‘Intellectual property in a peripheral jurisdiction’ (1999) 10(4) Computers and Law 30.

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particular area did not mean that its members (or the Scottish Executive) could not talk about that subject. I wrote as follows: ‘We do not know what Scottish business wants or needs from intellectual property law as its growth and development continues. We need to ask ourselves whether there is any connection between Scotland’s apparent under-performance in entrepreneurship and starting up businesses, and failures either of intellectual property itself or in the knowledge of those who might benefit from it. . . . It is with this sort of thing, I think, that an intellectual property research centre based in Scotland can play a useful role. . . . [W]e can also try to find out more about intellectual property in Scotland, and represent to the principal centres of the subject what is important on the periphery. . . . I would hope that, whatever may be the formal constraints on the legislative competence of the Scottish Parliament, it will feel free to discuss intellectual property as an important element in the economic performance of this country, but will wish to do so on the basis of research and knowledge.’8

Five years later, with the Scottish Parliament and Executive firmly established and fully operational, the time seems ripe for a return to these issues. In the 1999 lecture I observed that the Patent Office published no breakdown of the parts of the United Kingdom from which applications for registered IP rights (henceforth ‘IPR’) came. This has ceased to be the case since the Office’s Annual Report for 2001, when it began to provide just such a regional analysis of applications for and grants of rights. The ‘regions’ used for this purpose are aligned with the geographical areas covered by the regional development agencies (in Scotland, principally Scottish Enterprise). The figures for Scotland which can so far be derived from this exercise are given in Table 1. As well as gaining a better-informed perspective on the significance of the registered IPR in Scotland, one might deduce from the figures in Table 1 that overall the country has recently been contributing between 4 and 5 per cent of the United Kingdom’s registered IPR. This also appears to match Scotland’s contribution to overall research and development (R&D) expenditure in the UK,9 both figures representing an undercontribution in relation to Scotland’s 8.6 per cent share of the UK population. The numbers of IP registrations have also been in decline relative 8 9

Ibid., 34–35. Scottish Economic Statistics 2003, table 2.12 (at http://www.scotland.gov.uk/stats/ ses2003/ses03-17.asp).

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Table 1 Filings for and grants of registered intellectual property rights from Scotland 1999–2002. Bracketed percentage figures relate the Scottish to the overall UK numbers

Patent applications filed Patent applications granted Trade mark applications filed Trade mark applications registered Design applications filed Design applications registered

1999

2000

2001

2002

n/a

1,198 (5.55%) 141 (4.76%) 1,174 (4.61%) 889 (4.61%) 152 (4.09%) 209 (5.07%)

1,120 (5.35%) 107 (3.84%) 1,044 (5.01%) 772 (4.10%) 141 (4.01%) 177 (4.56%)

1,165 (5.77%) 163 (4.92%) 1,164 (5.37%) 891 (5.05%) 218 (4.45%) 186 (4.38%)

n/a 1,056 (4.79%) 787 (4.98%) 228 (5.88%) 217 (5.43%)

Source: Patent Office Annual Reports 2001–2003.

to the rest of the United Kingdom, apart from a very modest recovery in 2002. The overall UK performance in that period saw a slight falling off in application and grant rates, apart from a peaking of trade mark applications and grants in 2000 and a small recovery in 2002. In terms of numbers of filings and grants, Scotland out-performs consistently only Wales and Northern Ireland amongst the other regions of the United Kingdom.10 In 2000, however, there were more patent applications from Scotland than from the East Midlands (1,198 to 990), although the English region gained more patent grants, with 153 to 141. In 2001 Scotland (1,120 filings and 107 grants) was ahead of the North East (440 filings and 46 grants) on patents; but the North East’s apparently catastrophic decline from 2000 levels of 1,632 filings and 208 grants was to be explained by the creation of a new entry in the 2001 table, for that large north-eastern county, Yorkshire, which by itself managed to out-perform Scotland that year, with 10

The English regions listed in the Patent Office reports are North East, North West, East Midlands, West Midlands, South West, London, South East, East of England. As noted below, Yorkshire was introduced to the patent table in the 2002 report. As might be expected, London, South East and East of England are the ‘hot spots’ for filing and granting registered intellectual property rights.

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1,299 filings and 143 grants. Yorkshire remained ahead of Scotland in 2002, with 1,240 filings and 177 grants. In its 2003 report, Measuring Scotland’s Progress Towards a Smart, Successful Scotland,11 the Fraser of Allander Institute from Strathclyde University noted that the Scottish patenting rate was generally lagging in the United Kingdom, even in relation to those parts of England with a generally similar economic structure, but suggested that the particularly wide gap between Scotland and the south-east of England12 ‘probably reflects the location of headquarters and corporate R&D departments’.13 Overall, however, the low patenting rate ‘may also indicate that Scotland is failing to capitalise fully on converting knowledge into successful products and processes’.14 The Fraser of Allander report is part of the Scottish Executive’s regular assessment of Scotland’s economic performance, which has followed since the publication in June 2000 of the Executive’s The Way Forward: Framework for Economic Development in Scotland.15 This identified strengths in sectors such as electrical and instrument engineering, whisky, tourism and the North Sea, and in basic scientific research; these were offset, however, by weaknesses, judged against both international (OECD) and UK standards; in particular, low productivity, corporate R&D, innovation, and business birth rate, and the lack of enterprise headquarters and global businesses. Priorities for action included an approach to enterprise support through the Executive’s economic development agencies16 that would encourage an enterprise culture, support innovation and the commercialisation of research by business and industry, assist new business formation, and foster tourism. The Executive also promised to develop knowledge of economic performance in Scotland, the better to assist the formation of, in what has become a well-worn phrase, evidence-based policy.17 In January 2001 the then Minister for Enterprise and Lifelong Learning, Wendy Alexander, published a document entitled A Smart, Successful 11 12 13 15

16 17

Accessible at http://www.scotland.gov.uk/library5/government/sss03-00.asp. ‘South-east’ here means the London, South East and East of England regions taken altogether. 14 Fraser of Allander Institute Report (supra n. 11), at 23. Ibid. SE/2000/58 (at http://www.scotland.gov.uk/library3/economics/feds-00.asp). The Framework is now under review: see http://www.scotland.gov.uk/pages/news/2003/11/SEel147. aspx (6 November 2003). Scottish Enterprise and Highlands and Islands Enterprise (HIE), under which there are networks of local enterprise companies (LECs). Sometimes modified to the cannier evidence-influenced, or evidence-informed, policy.

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Scotland,18 which set out a comprehensive policy statement of what the Executive wanted from its enterprise agencies and networks. This signalled a shift from a basic policy of encouraging inward investment by foreign firms to one of internal technology transfer and better exploitation of the local research base. In particular the importance of ‘clusters’ – the interaction and collaboration of industry and the universities in particular localities – was highlighted, with biotechnology said to provide a key instance already in existence. Under the heading ‘Increased commercialisation of research and innovation’, the document stressed the need to increase levels of R&D spending in Scottish companies, which lagged well behind the UK average; to create more effective technology transfer between universities and businesses; and to increase the number of patent registrations from Scotland. The weaknesses of low business startup rates and poor commercial and industrial R&D investment were thus to be addressed by better use of the research strengths of the Scottish universities and other research institutions.19 The policy required the business sector to recognise and pursue the value of research in innovation and development, while also getting the university and research worlds to involve themselves much more in the commercial exploitation of the ideas which they generated.20 IPRs, and in particular patents, were to be an important element in this mix. Also of significance were the ‘spin-out’ and ‘start-up’ companies through which university research was already being commercialised; ‘spin-outs’ being the enterprises in which the relevant university retained at least a share of ownership, and ‘start-ups’ those in which university staff and students were permitted to take their research to the marketplace without significant university involvement. The Scottish universities themselves were already well aware of the importance of the IP generated within their laboratories and elsewhere, 18 19

20

Accessible at http://www.scotland.gov.uk/library3/enterprise/smart-successful-scotland. pdf. Significantly, from the beginning of devolution the universities were placed under the aegis of the Enterprise and Lifelong Learning rather than the Education Department of the Scottish Executive. This is of course part of a worldwide trend. See Ann Monotti with Sam Ricketson, Universities and Intellectual Property: Ownership and Exploitation (Oxford University Press, 2003). For critical discussions of its significance for the ‘mission’ of research universities from a USA perspective, see Corynne McSherry, Who owns Academic Work? Battling for Control of Intellectual Property (Harvard University Press, 2001), and Derek Bok, Universities in the Marketplace: the Commercialisation of Higher Education (Princeton University Press, 2003).

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although perhaps more for their own than the nation’s economic benefit. In 1997 the Scottish Committee of the Dearing National Inquiry into Higher Education endorsed the view that ‘revenues generated by the exploitation of intellectual property could provide a substantial additional source of income to [higher education] institutions’.21 In a document published in May 2002, Universities UK claimed that ‘Scottish universities now own more intellectual property than Scottish industry’,22 while the Universities Scotland website states that 35 per cent of the royalties earned by UK universities from IP comes to Scottish universities.23 In 2000–2001 Scottish universities filed around 10 per cent of all patent applications from Scotland, proportionately more than double the figure for university patent applications across the whole United Kingdom.24 The Higher Education Business Interaction Survey for the academic year 2000–2001 showed that ‘Scotland’s higher education institutions have been and are generally more active than the rest of the UK regarding commercialisation of their IP, contributing: 11 per cent of new university patents filed, 15 per cent of UK licences granted and 14 per cent of spin-off companies formed in 2000/2001’.25 In that year 62 university spin-offs and start-ups commenced operations, employing 931 people; while 59 such companies started within the past three years were still in business.26 The key change in the ‘smart, successful Scotland’ policy, however, was that the IP produced by the university and research sectors was to be 21 22

23 24

25

26

Para. 4.113 (accessible at http://www.leeds.ac.uk/educol/ncihe/scottish.htm). Universities UK, The University Culture of Enterprise: Knowledge Transfer across the Nation (May 2002), 22 (at http://www.universitiesuk.ac.uk/bookshop/downloads/ knowledgetransfer.pdf). See the Universities Scotland website: http://www.universities-scotland.ac.uk/Facts%20 and%20Figures/Research.pdf (at 2). Higher Education Business Interaction Survey 2000–01, Higher Education Funding Council for England & Wales 2003, and Patent Office, Annual Facts and Figures 2000–2001, Patent Office 2001. Higher Education Business Interaction Survey 2000–01, Scottish Report, introduction, para. 11 (accessed via the Scottish Executive website, at http://www.scotland.gov.uk/ about/ELLD/EI/00016585/HEBI˙Scot˙2001.pdf). The UK University Commercialisation Survey Financial Year 2002 published in November 2003 by Nottingham University Business School, the Association for University Research and Industry Links and the University Companies Association, which reports a general increase of activity and an out-performance of US and Canadian universities in technology transfer in terms of return on money spent, cannot be broken down to provide Scottish figures more up-to-date than those in the text. The report is accessible at http://www.auril.org.uk/ webpages/UKTT NUBS FY2002 FR.pdf. Scottish Report (above, n. 25), paras. 7.2, 7.3.

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deployed, not as an additional source of revenue to support the efforts of the sector as such, but as a means to develop economic activity across Scotland as a whole. The main response of Scottish Enterprise to this policy has been the establishment of three Intermediary Technology Institutes (ITIs), the creation of which was announced in December 2002 and which have since been slowly coming into full operation.27 There are ITIs for Life Sciences, Energy, and Communications Technology and Digital Media (Techmedia), located respectively in Dundee, Aberdeen and Glasgow. The idea is that the ITIs will be ‘hubs’, each identifying, commissioning, and supporting the diffusion of market-focused, but precompetitive, research in its field. They will thus, it is hoped, be in a position to help solve the problems of the lack of commercial R&D, and the difficulty of putting industry and commerce in touch with relevant university research.28 However, IPRs present some difficulties for the ITIs. Thus when Gordon Campbell, the chair of ITI Scotland, and Dr Janet Brown, the director of competitive business for Scottish Enterprise, jointly gave evidence about the ITIs to the Enterprise and Culture Committee of the Scottish Parliament on 25 November 2003, they explained that the institutes will be essentially commissioning bodies whose remit is to identify market opportunities and to match research to those opportunities; that is to say, to provide a link between the basic research in the universities and the further applied research needed to transfer that work to a market. The ITIs, it appeared, would wish to be purchasers of IP from the universities, rather than licensees. Campbell said: ‘Our preferred solution is for the intellectual property to reside with the institutes, so that the institutes can have the maximum flexibility in helping the commercialisation of the intellectual property.’29 One can see that universities valuing their IP might have some doubts about this position, which no doubt explains Campbell’s additional observation that the approach ‘is not cast in stone. We are in discussions with the universities 27

28

29

See generally Scottish Enterprise, ITI Scotland: Realising Scotland’s Potential (December 2002), accessible at http://www.scottish-enterprise.com/publications/iti scotland realising scotlands potential.pdf; and the ITIs’ website, http://www.itiscotland.com/. Note also the existence of a website, http://www.scottishresearch.com, listing Scottish university inventions, set up by the Scottish Higher Education Funding Council and Scottish Enterprise. Scottish Parliament Official Report, 25 November 2003, col. 310. The Official Report can be accessed at the Scottish Parliament website, http://www.scottish.parliament.uk/.

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and their representatives about how that intellectual property will be maintained.’30 There were also some signs of tension between Mr Campbell and Dr Brown about IP. Thus Mr Campbell observed: ‘We see intellectual property as being a source of income to the institutes, so that they can reinvest in further development. There are a number of ways in which income for the institutes can be generated and a number of ways in which intellectual property can be used to the benefit of Scotland, from licensing the intellectual property to companies to companies developing products based on intellectual property, which may or may not be as a result of licensing.’31 Dr Brown then immediately pointed out that ‘the measurement framework that Scottish Enterprise will apply will aim not to maximise the return of intellectual property revenue to the ITIs, but to maximise company value. It is not about selling to the highest bidder, but about selling to gain the best economic impact for Scotland.’32 The position of the universities providing the initial IP was left unexplained, although Dr Brown later indicated that ITIs are not merely about commercialising existing university research or basic science, but rather more about ‘allowing an additional amount of research to be undertaken . . . to pull all those pieces of research together so that a company can use the research’.33 The debate about IP ownership and commercialisation is also evident in another guise in the Lambert Review of Business-University Collaboration published in December 2003.34 Although this report was commissioned by the Treasury, it relates to the devolved areas of higher education and economic development agencies, and it is, as the report acknowledges, ‘for the devolved administrations to consult on and decide how to take forward’ its recommendations in their territories. Of especial relevance to the ITIs, and indeed to the Scottish higher education institutions, will be Lambert’s view that the starting point for negotiations on research collaboration involving the universities should be the universities’ ownership of the resulting IP unless industry had made a ‘significant contribution’ to the research, whereupon ownership should become negotiable. Lambert also 30 31 32 33

34

Ibid., col. 310. Ibid., col. 311. Ibid., col. 311. Ibid., col. 325. The model thus seems to be Project Alba, for which see my SSCL lecture (above n. 7) at 30. For the Enterprise and Culture Committee’s rather anodyne response to what it had been told about ITIs, see its Third Report, 2003, Report on Scottish Solutions Inquiry (SP Paper 67, 18 December 2003), paras. 113, 114. Accessible at http://www.lambertreview.org.uk. The review was conducted by Richard Lambert.

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suggests that university-industry research collaborations might be easier to agree if there could be voluntarily developed model contracts covering the ownership and exploitation of IP. Lack of clarity over ownership of IP in research collaborations makes for long and expensive negotiations, and it may be, suggests Lambert, that universities are setting too high a price in negotiations over IP. It needs to be remembered that public funding for the basic research carried out in universities is intended to benefit the economy as a whole rather than to create significant new sources of revenue for universities.35 In any event, the US experience suggests that technology transfer activity produces for universities at most only relatively small amounts of money.36 A final relevant development regarding IP in devolved Scotland is the announcement on 3 December 2003 of a National Intellectual Assets Centre (NIAC), set up by the Scottish development agencies with funding from the Scottish Executive.37 The Centre will help Scottish firms protect and exploit, not only IP such as patents and trade marks, but also brands, employee know-how, trade secrets and technical information. It will promote awareness and provide advice on identification, protection and exploitation. The difference from the ITIs is that the NIAC will seek to help businesses with the ‘intellectual assets’ which they already have, rather than introducing them to producers of IP by research for material to take to market. All this makes evident the basic point that the Scottish Executive has recognised IP as of fundamental importance for the development and improvement of economic performance in Scotland. In consequence, the subject has also been talked about many times in the Scottish Parliament. The evidence given before the Parliament’s Enterprise and Culture Committee in November 2003 has already been discussed. In a number of earlier debates going back to at latest 2001, there were discussions of the issue of commercialisation of university research, a topic which also became embroiled in questions about the evaluation of university research and the future of the Research Assessment Exercise as well as the funding of universities more generally.38 The last is a particularly sensitive issue 35 36 37 38

One might add, however, that, if so, it is not clear that publicly funded research should lead instead to the private profit of commercial enterprises. See also Times Higher Education Supplement, 14 November 2003 (‘Do not bank on spin-off income’). See press release at http://www.scotland.gov.uk/pages/news/2003/12/SEEL198.aspx. See e.g. Scottish Parliament Official Report, 1 November 2001 (debate on teaching and research funding: future of Scottish Higher Education Funding Council); 6 November

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in Scotland, since one of the first acts of the Parliament by which there emerged a Scottish approach distinct from the rest of the United Kingdom was the abolition of ‘up-front’ university tuition fees in 2000.39 The emergence in 2003 of proposals for differential ‘top-up’ tuition fees to generate more funding for universities in England and Wales has thus led to considerable and, to date, inconclusive debate about the future funding of Scottish universities, especially given the generally agreed significance of their research to economic development.40 What evaluation may be made of the public discussion so far of IP in a devolved Scotland? The first point is that the discussion has focused almost entirely on policy issues and on the role of IP in economic development. Innovation, supported and made profitable by IPRs, is seen as the key to economic progress, rather than imitation, the antithesis of IP. There has been, however, little or no discussion of the substance of IP law, and of whether as it stands the law meets the perceived needs of either policy, university and other researchers, business or other potential users of the end products of research. Indeed, IP, when it is not taken to mean rather generally the knowledge which is held or developed by researchers, is often simply equiparated with patents, other forms of IP being ignored or treated as of relative unimportance or low priority. Yet new trade mark registrations can also be indications of new businesses starting up, or of existing businesses diversifying in a way which they believe to need a distinct identity in the marketplace;41 while design registrations likewise signal products which in themselves may not be new ideas but which will nonetheless be different from their competitors, wherever these may be. The focus on patents can also be linked with a belief that economic development is to be achieved through ‘high’ rather than ‘low tech’ and traditional industries. While Scotland has strengths in high tech, the others identified by the Executive back in 2000 included ones – whisky and tourism, for example – to which forms of IP other than patents are highly relevant. But there has been nothing like the public discussion of this

39

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2002 (debate on science and the Parliament); see also debates of Enterprise and Lifelong Learning Committee 8, 30 May, 12 June 2001. See the Education (Graduate Endowment and Student Support) (Scotland) Act 2001 (asp 6), partially implementing the 1999 Report of the (Cubie) Committee of Inquiry into Student Finance. By coincidence the Scottish Executive was conducting a Higher Education Review at the time ‘top-up’ fees became a subject of public debate: see http://www.scotland.gov.uk/ about/ELLD/HESP/00016640/HEReview.aspx. See also the report of the Parliament’s Enterprise and Culture Committee, cited above, n. 33. They can also be of previously unregistered marks already used by a business.

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aspect to compare with what we have seen in relation to the commercialisation of university research. Two examples must suffice to demonstrate why that wider discussion should be taking place. In the autumn of 2003 the highly traditional world of Scotch whisky was divided over the actions of the distillers Diageo in relation to its Cardhu brand of malt whisky. Because the brand was selling too well in a number of foreign markets, Diageo was running out of Cardhu single malt,42 and began to market, under its established labelling but as ‘pure malt’ Cardhu, a drink which was in fact a mixture of Speyside malts.43 This led to severe criticism from other distillers of malt whiskies, who saw in Diageo’s actions the beginning of a process by which the distinctiveness of the concept of a ‘single malt’ whisky would be diluted and eventually destroyed. The Scotch Whisky Association, apparently with the aid of the Scottish Executive, eventually brokered a somewhat uneasy settlement announced on 4 December 2003, by which Diageo would continue to use the phrase ‘pure malt Cardhu’ for its product, but would change the colour of the labelling affixed to it to ensure market differentiation. Meantime the Association would ‘urgently’ pursue work to provide definitions of a single malt.44 But it must be open to question whether leaving this to the Association is good enough; the matter is at least related to the laws of passing off, trade marks and, perhaps, geographical indications and trade descriptions, and it should, as the distillers William Grant & Sons have argued, be taken up in that legal context if the malt whisky industry wishes to have a secure basis for its marketing in future.45 42

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Single malts are produced by an essentially pre-industrial technology, using a watery extract of malted barley dried in peatsmoke and fermented by yeast, with distillation in a pot-still followed by at least three years’ storage (preferably much more) in oak (usually sherry) casks. This is not a ‘blended’ whisky, blends being typically made by mixing malt whisky with whisky distilled in patent-stills from grains other than malted barley in an industrial mode of production. Nor is it a ‘vatted’ malt, which a distillery produces by a mixture of its own malts of different ages. See generally David Daiches, Scotch Whisky: Its Past and Present (Glasgow: Fontana/Collins, 1980) and R. J. S. McDowall (revised.by William Waugh), The Whiskies of Scotland (London: John Murray, 1986). See the Scotch Whisky Association website, http://www.scotch-whisky.org.uk/, ‘Press Releases’, ‘SWA reaches agreement over Cardhu’. For the background, with illustrations of the offending labels, see http://news.bbc.co.uk/1/hi/scotland/3289181.stm (‘Whisky Branding Deal Reached’) and accompanying links. See http://news.bbc.co.uk/1/hi/scotland/3292103.stm (‘Whisky Rules should become Law’). Diageo ‘voluntarily’ withdrew Cardhiu pure malt from the market in March 2004, but the general point remains.

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A second illustration of the relevance of IP other than patents can be found in the National Cultural Strategy which the Scottish Executive published in 2000, and which was to underpin the development of Scotland’s cultural life until 2004.46 Amongst the objectives was the maximisation of the contribution of both the ‘cultural sector’ and the ‘creative industries’ to Scotland’s economy, including the potential for ‘cultural tourism’. The Strategy relates to both Scottish culture and culture in Scotland. That this is in turn links to ‘smart, successful Scotland’ was recognised by the First Minister, Jack McConnell, in a major speech on cultural policy delivered on St Andrew’s Day (30 November) 2003: ‘To create a smart successful Scotland you need the fundamental building block of creativity. The creative industries have shown themselves to be one of the leading growth areas in our economy. And the cultural sector attracts and retains creative people.’47

The Strategy stated that ‘the cultural and creative industries are . . . estimated to be worth around £5 billion [i.e., around 4 per cent of Scottish GDP] to the Scottish economy each year; 50,000 are employed in the cultural sector’.48 The creative industries were defined in the Strategy as: ‘the activities which have their origin in individual creativity, skill and talent and which have a potential for wealth and job creation through the generation and exploitation of intellectual property. They comprise Architecture, Advertising, Arts and Cultural Industries, Design (including Fashion, Design and Crafts), Film, Interactive Leisure Software (computer games, consumer packaged software), Music, New Media, Publishing, Radio and Television.’

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Creating Our Future: Minding Our Past, accessible at http://www.scotland.gov.uk/ nationalculturalstrategy/docs. Full text available at http://www.scotland.gov.uk/pages/news/extras/p 00017600.aspx. There are echoes in the passage quoted of the ‘Florida thesis’, that creativity (defined to include technological, professional and academic as well as artistic and media work) is the decisive source of competitive advantage, and that economic growth occurs most in places open to creativity and attractive to creative people: Richard Florida, The Rise of the Creative Class: And How it’s Transforming Work, Leisure, Community and Everyday Life (Basic Books, 2002). The employment figure rises to 100,000 elsewhere in the document, and also in the Scottish Enterprise website material about the creative industries (see further n. 56 infra). Compare the GDP percentages with those quoted for the UK, Europe and the USA in Gillian Davies, Copyright and The Public Interest (2nd ed., Sweet & Maxwell, 2002), ch. 8.003. For Australia, see Australian Copyright Council and Centre for Copyright Studies, The Economic Contribution of Australia’s Copyright Industries (2001).

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The Strategy suggested that these industries were ‘set to grow significantly faster than the economy as a whole’, mainly as a result of digitisation of content, opening up not only prospects of rapid, worldwide distribution, but also new applications leading to new cultural forms, new businesses, and inter-activity with users.49 Clearly fundamental to all this if it is indeed having, or is to have, the desired economic impact, is the law of copyright, performers’ rights, and design rights; perhaps trade marks might also be important as a way of branding and promoting products in a global marketplace. Indeed, without underlying IPR the creative industries might find it very difficult to have any economic life at all.50 There has been no sign, however, in subsequent implementation of the Cultural Strategy, or in reporting upon its success or otherwise, that there has been any policy reflection upon relevant parts of IP law in the Executive, or elsewhere. The 2002 Annual Report on the Strategy does report the production of a CD ROM on copyright to guide members of the Scottish Library and Information Council: ‘key to its success’, says the Report, ‘is the fun element of working through a maze scenario, in learning about copyright information’.51 However that may be, personal knowledge suggests that few working in the Scottish cultural sector find copyright to be fun; rather, many consider it to present significant difficulties and impediments in achieving their objectives, not least in the context of digital dissemination.52 In general the three Annual Reports since the publication of the Strategy simply retail ‘good news’ stories, such as the establishment of a National Theatre for Scotland,53 the introduction of a Gaelic Language 49

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On this theme see also the report of a British Academy working party on the contributions of the Arts, Humanities and Social Sciences ‘That full complement of riches’: the contribution of the arts, humanities and social sciences to the nation’s wealth (July 1 2004, accessible at http://www.britac.ac.uk/). See John Howkins, The Creative Economy: How People Make Money from Ideas (Allen Lane, Penguin Press, 2001); Ruth Towse (ed.), Copyright in the Cultural Industries (Edward Elgar, 2002). See http://www.scotland.gov.uk/library5/society/sncs2.pdf, (at 54). See http://www.law.ed.ac.uk/ahrb/publications/online/chreport1.rtf (registration required), recording a meeting of representatives of the Scottish cultural sector held on 1 September 2002, to discuss copyright issues. Digitisation is important not only in the creative industries but in impressive activities (with associated e-commerce) such as Scottish Cultural Resource Access Network (http://www.scran.ac.uk/), Scottish Archives Network (http://www.scan.org.uk), and Scotland’s People (http://www.scotlandspeople.gov.uk/). Universities come into the picture again here, with the development of distance learning packages often disseminated across the Internet. See http://www.scotland.gov.uk/pages/news/extras/00015600.aspx.

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Bill,54 or the creation of a Scottish Cultural Portal,55 but provide no systematic data on the economic contribution of either the cultural sector or the creative industries, or about how they are developing from an economic point of view. Some further information (but not much) can be obtained on the Scottish Enterprise website.56 Of course, cultural policy is not simply about the economic, and social welfare factors, such as the environment, the physical and mental health of individuals, personal self-confidence, access and education, are also legitimate and important concerns for government in this area.57 But the economic dimension, and along with it the relevant IP issues, seem almost to have been ignored in the implementation and reporting of the Cultural Strategy so far; and that cannot be right. Economists would argue that creative activities that pay off in economic advance arise from product or process innovation, which originates in all sectors of the economy, and it is thus a simple logical error to identify creative industries as a new separate category somehow apart from manufacturing and service industries. Upon what substantive IP issues might the Scottish Executive and Parliament wish to reflect in the further implementation of their economic and cultural strategies? The development of policies seeking the promotion of technology transfer in and from universities is not confined to Scotland, and has prompted discussion elsewhere about IPRs in this context. So for example a committee chaired by Bill Cornish reported for the National Academies Policy Advisory Group (NAPAG) on Intellectual Property and the Academic Community in 1995,58 and their work was the basis for a Royal Society working group report, Keeping Science Open: The Effects of Intellectual Property Policy on the Conduct of Science, published in April 2003.59 At least some of the issues raised in these documents also have importance beyond the universities, technology and commercialisation. Moreover there is a constant stream of other relevant reports and legislative proposals, mainly at a European level, and there is a clear need, 54 55 56

57 58 59

See http://www.scotland.gov.uk/consultations/culture/glbc-01.asp. For which see http://www.scotlandsculture.org/index.htm. http://www.scottish-enterprise.com/sedotcom home.htm; click on ‘Services to Industry Groups’, then on ‘Creative Industries’. There seems to be no relevant information on the Scottish Arts Council website (http://www.scottisharts.org.uk/). See further on this the First Minister’s St Andrew’s Day speech (cited above, n. 47). Henceforth ‘NAPAG Report’; accessible at http://www.royalsoc.ac.uk/policy/ (click on ‘1995’). Henceforth Keeping Science Open; also accessible at http://www.royalsoc.ac.uk/policy/ (click on ‘2003’).

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against the background just sketched, for input and response to these from a Scots perspective. Ownership of IP, highlighted in the Lambert Review, is addressed in both the NAPAG and the Royal Society reports. In relation to the products of university research, what is the scope of the rights of employers under present legislation to both patents and copyrights arising from the work of employees in the course of their employment?60 Should these rights be extended to cover the work of students in the universities, which is often a key contribution in the science and technology areas in particular? Can anything be done with the rules on joint ownership of IP61 to help to resolve the difficulties often arising from collaborative research between universities and industry? Should the funders of research be given a stake in resultant IP? Is the entitlement to ‘just compensation’ from an employer to an employee who has made a patented invention which is of ‘outstanding benefit’ to the employer62 providing an incentive to innovate, and, if so, might it be extended or adjusted to fit other contexts? Again, what IPRs should be recognised? Will it be for the general good if computer software as such becomes patentable, and what should then be done with the existing copyright protection of the same subject-matter?63 Would it be helpful to universities or small businesses in Scotland if technological developments of lesser inventiveness than needed for patents could be registered for a ‘second-tier’ level of protection without prior examination for validity?64 Or should there rather be concentration upon making the process of obtaining a patent generally quicker and easier, 60

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Patents Act 1977 (henceforth ‘PA’), s. 39; Copyright, Designs and Patents Act 1988 (henceforth ‘CDPA’), s. 11(2); see NAPAG Report, paras. 12.1–12.3; Keeping Science Open, supra n. 59, paras. 2.8, 4.12. PA, ss. 7, 36; CDPA, s. 10. PA, ss. 40, 41. The UK Patent Office ‘Consultation on a Proposed Patents Act (Amendment) Bill’ considered the present position in this area (see http://www.patent.gov.uk/about/ consultations/patact/proposals2.htm, paras. 73–82), but no change is currently proposed (http://www.patent.gov.uk/about/consultations/responses/patact/enforcement.htm, paras. 94–111). See also Keeping science open, supra n. 59, para. 3.47. See W. R. Cornish, ‘Cumulation and convergence of intellectual property rights’, in P. Mirfield and R. Smith (eds), Essays for Colin Tapper (LexisNexis, 2003), 200– 201; Cornish and Llewelyn (supra n. 1), ch. 19.26–19.33. A proposal for a Directive on the patentability of computer-implemented inventions was forwarded to the Commission and the Council by the European Parliament in September 2003: see http://www.patent.gov.uk/about/ippd/issues/softpat.htm for the best overview (with relevant links) of current developments. See NAPAG Report, paras. 6.3–6.5; also W. R. Cornish, ‘Scientific Research and Intellectual Property’, in (1994) 2(3) Hume Papers on Public Policy, at 48–50.

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without relaxing standards of examination for validity? Shifting away from technology to culture, have recent developments of performers’ rights achieved a just and efficient level of protection, or created barriers to the production and dissemination of works embodying these performances?65 Both the NAPAG and the Royal Society reports reflect a widespread perception within the universities that IPRs can be a brake upon research and publication of its results.66 With regard to patents, should a grace period be introduced, to stop disclosure and publication of results automatically preventing the subsequent grant of a patent?67 Under both patents and copyright, how far does the prevention of ‘commercial’ research in relation to protected material inhibit other researchers building upon that material for the public good?68 Does the strong protection of databases against unauthorised extraction and reutilisation cause such difficulties for researchers as to outweigh the need to ensure some return to those who invest in the creation of such databases?69 Should copyright owners be able also to protect their products with such digital fences as to preclude others from exercising their fair dealing rights, or to limit or exclude those rights by contract?70 Enforcement of IP is also an important issue which has recently attracted a European legislative initiative.71 In Scotland, legal practitioners

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For discussions of a possible Directive in this area, see http://europa.eu.int/comm/ internal market/en/indprop/model/index.htm. A matter of current concern for the World Intellectual Property Organisation in Geneva: see http://www.wipo.org/documents/en/meetings/2003/avp im/index.htm. For the current UK position see CDPA Part II as amended, most recently by the Copyright and Related Rights Regulations 2003 (SI 2003 No. 2498), reg. 7; and, further, Cornish and Llewelyn (supra n. 1), ch. 13.30–13.40. And see also the arguments of McSherry and Bok (supra, n. 20). See NAPAG Report, paras. 5.1–5.4; Keeping Science Open, para. 3.39; and further Cornish (supra n. 64), 50–52. In December 2002 the DTI Intellectual Property Advisory Committee (IPAC) published a position paper on grace periods (hostile), responding to a Patent Office consultation on the subject: see http://www.intellectualproperty.gov.uk/ipac/std/observations.htm. See PA, s. 60(5); CDPA, s. 29 as amended by SI 2003 No. 2498, reg. 9. See NAPAG Report, para. 8.1–8.2; Keeping Science Open, paras. 3.23, 4.19–4.22, 5.5–5.9, 5.21. For further comment see W. R. Cornish, M. Llewelyn and M. Adcock, Intellectual Property Rights (IPRs) and Genetics: A Study into the Impact and Management of Intellectual Property Rights within the Healthcare Sector (Cambridge: Public Health Genetics Unit, July 2003), s. 2C2(a). A detailed study of the subject by Trevor Cook for the Intellectual Property Institute, London, should appear in 2004. 70 See Keeping Science Open, ch. 5. Ibid., para. 4.21. Proposal for a Directive of the European Parliament and of the Council on measures and procedures to ensure the enforcement of Intellectual Property Rights, COM

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specialising in the field sense an increase in local IP litigation which some attribute to the greater willingness of the Scottish judges, compared with their English brethren, to enforce IPRs. Also relevant may be the lower expense of litigation in Edinburgh by comparison with London, the emphasis on written pleadings bringing out the true issues between the parties at a relatively early stage, and the focused nature of the Scottish equivalents of the Mareva injunction (arrestment on the dependence) and the Anton Piller order (commission and diligence under the Administration of Justice (Scotland) Act 1972). Special Rules of Court for IP cases were introduced in 1994.72 But the advantages claimed for IP litigation in Scotland need to be offset by the absence within the IP rules of provision for speedy trials or streamlined procedures comparable with those available, not only in England, but also, very successfully, in the general commercial cause rules of the Court of Session itself.73 In conclusion, then, although IP is rightly a subject of public policy discussion in devolved Scotland, that discussion still has much ground to cover. The protagonists of technology transfer and commercialisation need to take on board questions about IP law itself, and how the answers may be related to their policy objectives. Likewise, those whose primary concern is the substance of IP law should become more aware of the impact of their debates in the arenas of economic development, basic and applied research, and general public policy. This of course includes cultural policy which, in Scotland at least, has also been too much divorced from economic as well as IP policy. The Scottish Executive and Parliament may need to accept that there are limits on what government can do for economy and culture beyond the provision of basic infrastructure. Inter-disciplinary sensitivity and research, drawing together work on policy, economics, culture and law (as so well exemplified in the work

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(2003) 46 (01), adopted (Official Journal 2004, L157/45, 2004/48/EC); Commission of the European Communities, January 2003 (text at http://europa.eu.int/eur-lex/ en/com/pdf/2003/com2003 0046en01.pdf). IPAC published a report on the enforcement of patent rights in November 2003, for which see http://www.intellectualproperty.gov.uk/ipac/pdf/enforce.pdf. SI 1994, No. 1443 (S. 69), ch. 55 (as amended). The small number of ‘Copyright Patents actions initiated’ in the General Department of the Court of Session as recorded in the Civil Judicial Statistics since 1995 may be explicable because these figures seem not to include trade marks (amongst registered rights), or common law rights such as passing off and breach of confidence, and also because most IP litigation in Scotland involves primarily the remedy of interim interdict (the equivalent of the English interlocutory injunction), which would be initiated in the Petitions rather than the General Department. The Petitions figures in the Civil Judicial Statistics unfortunately cannot be broken down to reveal figures for IP cases.

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of Bill Cornish himself) is clearly the way forward; and, it may finally be concluded, not just in Scotland, but in the United Kingdom and its other regions as well.74

Postscript The Scottish executive published a beautifully produced but essentially vacuous Cultural Policy Statement on 22 April 2004.75 This announced a year-long review of its cultural strategy to be carried out by a Cultural Commission, leading to a Culture Bill projected for 2007. The Statement says nothing about the economic significance of the cultural sector, or about IP. 74

75

In addition to the Lambert Review (above n. 34), see the DTI’s Innovation Report, Competing in the Global Economy: The Innovation Challenge (December 2003), accessible at http://www.dti.gov.uk/innovationreport/. Accessible at www.scotland.gov.uk/library5/education/ncs04-00.asp.

Patents and plant protection

5 Creating the community patent and its court the rt. hon. sir robin jacob ∗

What I am going to do is to start at the beginning, skim the middle, and talk about where we are now.

A. The beginning – 1962 Amongst my late father’s papers I found a little (just over A5 size) booklet with a fading green outer cover. It was published by Her Majesty’s Stationery Office in 19621 and the price was five shillings. It is entitled Translation of a Draft Convention relating to a European Patent Law. The original document was prepared by a committee of representatives of the six members of the EEC.2 The draft said that ‘European patents’ shall have a unitary and autonomous character, that they shall have effect in the territory of all Contracting States, and should be subject only to the provisions of the Convention. So the idea of a proper European Patent is very old – going back to the time before I, at least, had only the faintest idea about patents at all.3 ∗

1 2

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A Lord Justice of Appeal. Evening Student, London School of Economics and Political Science, 1963–67. W.R.C. taught me in three out of these four years. I’ve never recovered, I’m glad to say. S.O. Code No. 51–367. I do not know the date of the original, save that it was in 1962, nor who the Study Group were. So far as I have researched things (which is not a lot), the idea came out of the Council of Europe in the 1950s – see below. I met Mr R. G. Lloyd QC in 1959 at D. N. Pritt QC’s retirement party (my father had brought me along on the way to a family trip to a Shakespeare play at the Old Vic: one did that sort of thing in those days). I was put in a corner of the party at 1 Pump Court and got talking to this affable man, who, upon learning that I was going to Cambridge to read science, suggested I should consider the Patent Bar when I came down. I thought little of it at the time, wanting to be a scientist. When I found out I was not clever enough, in due course the patent bar seemed a possible option. Fortunately, it was dead easy to get in – a double 3rd was no bar.

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Many people now involved in patents were not even born.4 It was a time when the phrase ‘intellectual property’ was unknown to all but a few specialists – and to those few, it meant copyright and like rights only.5 It was a time when there was very little intellectual property litigation.6 It was a time when no one taught the subject in this country7 and probably most other places; a time when hardly anyone sued on a patent in the US because they were near certain to lose. What did these early pioneers have in mind for the problems which must be grappled with and solved if there is to be an effective European patent? I start with language. They had proposed a European Patent Office and had much about the detail of how it was supposed to work. You can see the outlines of the shape of the EPO in this document.8 For language, the proposal was that ‘the languages in use at the European Patent Office shall be English, French and German’ (my emphasis).9 That is remarkable, for none of the six countries who had contributed to the proposal has English as a mother tongue. It is also remarkable in that Italian was not included, even though at the time Italy was the third 4 5

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That includes Bill’s successor, Professor Lionel Bently. ‘Intellectual Property’ was the name of a magazine published by BIRPI (the predecessor of WIPO – I forget what BIRPI stood for). It dealt with copyrights. Patents (and industrial designs) were the subject of a sister publication called ‘Industrial Property’ – sounding rather as though it deal with factories and machinery. Look at the thinness of [1962] RPC and remember the RPC were the only reports dealing with patents, trade marks and designs – such cases as there were in copyright were in other reports – only about a dozen in the whole of the 1960s. When the Fleet Street Patent Law Reports (as they were then called) were started in 1963 by Raph Lunzer they were a roneo-ed foolscap size early publication of what was going to be in the RPCs when the Office finally got round to publishing them. Not quite right – in the 1950s Mr T. A. Blanco White started giving a weekly lecture course to would-be patent agents at somewhere called ‘Holborn College’ (long subsumed into some greater institution – probably by now the University of Westminster). Signing up to the lectures was purely voluntary and they were not aimed at the patent agents’ exams. So only the bright and interested came. Anthony Walton took over from Blanco in about the early 1960s. I took over from him in 1969 and Hugh Laddie from me. I think the course died after that, though Peter Prescott may have done them for one year. I think the students paid 7/6d for an eight-week course. I got very little – except I had to learn patent law to teach it! For instance Boards of Appeal from the Examining Division (Art. 58), and an Administrative Council. Notably on substantive patent law one can find (in Art. 21)(1)) the predecessor to Art. 69(1) of the EPC in exactly the same language. There was no Protocol – they knew what they were doing in this draft proposal. One also finds the basic conditions for patentability in the same language as that used in the EPC. This gives rise to a further thought – if one is to go to the travaux pr´eparatoires for the EPC, one should in principle go back to the travaux pr´eparatoires to this draft Convention. Is this the way of madness? Art. 34(1).

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largest EEC member. Of course, the proposal was not intended to be limited to the EEC. On the contrary the draft Convention said that ‘any State which is a party to the Paris Convention . . . may apply to accede to this Convention’.10 The early pioneers foresaw the chaos of unlimited languages for a multi-lingual patent system. They did propose that you could apply in your own language if you wanted, though you had to have a translation into one of the three languages of the Office within a month thereafter.11 As to the Courts for, and system for enforcement of, the proposed European Patent, the pioneers were much vaguer. They envisaged a ‘European Patent Court’. This was not to be an EEC court, not part of the European Court of Justice. It was to be free-standing though ‘the question whether this court will be attached to an already existing international court is left open’. The Court was somehow to work in parallel with national courts – an idea which has hung around and bedevilled the proposed European Patent for many years – and still does albeit only for a proposed short term transitional period.12 The whole thing was hardly worked out at all – and to the extent it was, it would have been wholly impractical. We have here an early sighting of one of the real giant problems of creation of a supra-national patent: the tension between the obvious need for a corresponding supra-national court and the existence of national courts and procedures emerges for the first time. But the Study Group clearly either thought the problem was so easy of solution that it was merely a matter of detail to be worked out later, or they saw that it was so difficult that the only thing to do was to shelve it, try to work on other bits of the proposed system and hope that somehow it would become easier over the years. One idea espoused then was the German model for dealing with infringement and validity – a split system. The court was to stay an infringement action if the defendant could show a prima facie case of invalidity. This idea has bedevilled the creation of a European Patent. I am no expert on German law or procedure, but I well remember an IAPPI lecture (the first I ever went to) given by the first President of the Federal Patent Court in London in about 1972. He explained the German system 10

11

The EPC is not so all-embracing – only ‘European States’ can join (see EPC Art. 166). Actually, I do not see why any state should not be allowed to join the EPC in principle – many countries cannot afford to have their own patent offices or would not wish to spend money on them. Why, for instance, should Australia or India not join? Convergence of patent law can be achieved little by little as well as by a World Treaty. 12 Art. 24(2). Until 2010 under current proposals.

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as being the result of history and politics – that civil wrongs were matters for the various States whilst the validity of a patent was a Federal matter, the patent having been granted by a Federal Authority. Still today there is this split in Germany.13 The idea of repeating it for Europe persisted until industry made it clear it was not wanted in response to a Commission Green Paper of June 1997. From time to time the idea re-surfaces – I dare say it will again at some point.14 Another idea which still hangs around now was mooted in those early days. This was that the European Patent Office should be obliged to produce a technical opinion if a national court so asked. Judge Ford got a similar rule put into the Rules for the Patents County Court.15 He never used it and no one ever asked for a report. The rule went with the Woolf reforms and rightly so – quite what was a requesting court supposed to do with a report? Accept it, thus in effect making the Office the judge, or put it to the parties for comments and possible evidence (with much extra time and cost) or what? The idea is hopeless – but it has a capacity for re-surfacing which must be resisted as part of any litigation process. It (or rather a variant of it) is being mooted for British patents.16 The idea is that parties could ask the Office for a non-binding opinion. I see no harm in that, provided it is not part of any litigation process. Once one gets it mixed up with a real fight, no good can come of it. 13

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And it has been made to work in Germany and is deeply entrenched there. As always tradition plays a large part in how a thing works – although in theory you can sue for infringement in any State, in practice there are only three centres where people sue – they are where the lawyers are. Another problem relates to rights of audience – only lawyers can appear before the infringement courts, whereas patent agents can appear before the Federal Patent Court – there are similar differences in the UK. The same sort of problem faces the new European Patent Court – see below. It has an appeal to the na¨ıve, such as politicians or even civil servants who have no experience of an actual working patent litigation system. The reasoning is something like this: (i) patents and their validity is a highly technical matter – suitable for technicians; (ii) these are to be found in Patent Offices; (iii) so a Patent Office is the place to deal with validity; (iv) enforcement of a patent is a legal matter; (v) so you want lawyers and courts to deal with this. In the real world the grant of patents often involves legal issues and their scope and enforcement always involves technical issues. Commercially scope, validity and enforcement are part of just one question: should the defendant be stopped? The former County Court Rules, Ord.48A, r. 7(1)(b). The Intellectual Property Advisory Committee Report of 14 January 2004 has something similar – a non-binding review of validity by the Office which may be taken into account on the question of costs if a Court comes to the same view. The latest Government proposals, in a Bill of 15 January 2004, takes up the idea, extending it to infringement and specifically making the opinion non-binding. It may work for some cases – we shall see. I am a bit reminded, however, of the pointless ‘risk of infringement’ of an earlier patent statement required by s. 9 of the 1949 Act.

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Any similar idea for the European Patents Court should be firmly resisted. Patent Offices are for granting patents. They should have no concern over their enforcement. And the ultimate arbiter of validity should be a Court, not the Office that granted a patent. The function of an Office is essentially to filter out bad ones before grant. Sometimes Offices perceive themselves as having a higher function – as ultimate interpreters of the law and final determiners of fact. This is a dangerous idea – not because courts are cleverer than Offices (though courts are apt to be a lot more experienced in law), but because Offices seldom are in a position to make the ultimate decision and do not have the necessary procedures. Generally, fights over patentability at the early stage of the life of a patent have elements of shadow boxing. No one really knows yet whether the invention is important and does not fight the case hard – people oppose patents in case they might be important – they tend to do that in bulk, as the mass of EPO oppositions proves.17

B. The next 40 years I move on – to note the main events before coming to the present proposals.18 In 1963 the Council of Europe19 promoted the Strasbourg 17

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Most of the oppositions are about patents that in the end have no real importance. This suggests that the EPO should seriously consider abolishing the nine-month time limit for entering opposition after grant. If people could simply apply for revocation whenever a patent seemed important I think, indeed confidently predict, that the number of ‘oppositions’ would fall dramatically. This is superficially counter-intuitive but not so if you think about it a bit more. With the present nine month time limit you have to start your central attack on the patent generally before its commercial significance, if any is known. So you start as a precautionary measure. It is now or never for a central attack. Experience bears out that having no time limit reduces rather than increases patent office conflicts. When the British Office abolished oppositions and belated oppositions (which had to be started within 1 year of grant), widened the grounds of attack to permit all grounds and permitted applications for revocation at any time rather than in a short window, it expected a mass of new work. More hearing officers were appointed. The actual result was far from the expected flood of applications for revocation. The opposite happened – a complete drop-off in disputes. And they never came back. To do otherwise would serve no useful purpose – they were essentially years of nonprogress – backburner years whilst the EPO settled down and other parts of the EU developed. Set up in 1949 to ‘defend human rights, parliamentary democracy and the rule of law, develop continent-wide agreements to standardise member countries’ social and legal practices, promote awareness of a European identity based on shared values and cutting across different cultures’. It is distinct from the EU and has played a major part in the creation of other European institutions and initiatives – most notably the European Convention on Human Rights and the European Court of Human Rights.

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Convention – a proposal for the harmonisation of substantive patent law. They did a good job – providing the draft of our modern substantive law – a draft which has stood the test of time well.20 Strasbourg was taken up by the next to come on the scene, the creators of the European Patent Convention and the Community Patent Convention. Work started on these in the late 1960s, there being a pause after Strasbourg. A first draft of the EPC appeared in 1970, just before the Banks Committee21 reported on the British System. Whilst noting these European developments, the Committee basically assumed that UK law would continue to be free standing. Much of what it recommended was in due course ignored in favour of the European Patent Convention proposals. By 1973 the EPC was done. Two years later, in 1975 the CPC emerged. The EPC dealt with substantive patent law and the creation of the EPO in ways we all know. The CPC was the first full attempt at a Treaty to create a European Patent. It set forth substantive rules of infringement and some half-baked ideas about courts and language. The substantive law (like that of the EPC and just as easily) duly found its way into our law.22 Nothing happened following the CPC. The language and court regime was unacceptable to industry – which is hardly surprising since, so far as I know, it was hardly consulted. In the 1980s the Commission returned to the fray – producing the Luxembourg version of the CPC. Even though a viable granting Office had come into being by then, the Luxembourg draft was not much better than the 1975 proposal. For courts the idea was that national courts would deal with infringement, having the power to grant EU-wide injunctions and that there would be an appeal to a common court of appeal established at a Community level. The national courts would have had the power to revoke the patent Community wide, but only when invalidity was raised as a defence. It would also have been possible to file revocation actions at the EPO.23 It is a similar idea as is being used for trade marks.24 I cannot 20

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Though I wish they had an explicit ground for dealing with a claim which goes beyond what has really been invented. As things are we have to fashion and distort other grounds (an odd mixture of obviousness and insufficiency) to do the job which such a necessary ground must cover. 22 Cmnd 4407, price £1 3s 0d. Patents Act 1977, ss. 60, 61. Which by then had already developed a serious backlog of oppositions and had (as it still does) seriously inadequate procedures. It sort of works for these because trade mark infringement is still essentially local – as experience has shown. There may well be real trouble with EU registered designs – we shall have to see. There could be a flurry of forum shopping for these long-term rights. Unregistered rights are so short-term that local enforcement will probably suffice – often interim measures will settle the matter.

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believe that any serious users of the litigation system were consulted – the opportunities for forum shopping are so obvious to such a user. Nor can I see how anyone ever thought that a Court of Appeal could work on materials sent up by the courts whose procedures and evidence gathering (if any) differed wildly. Quite apart from the language problem, the 1989 proposals were self-evidently unworkable. And the idea of using the EPO as an ultimate arbiter of validity would have been unacceptable to holders of patents for important inventions. So again nothing happened. In the 1990s the Commission pursued the problem further. But even then it was still considering the obviously unworkable – particularly the concept of a split between validity and infringement. And it had not bitten the bullet of a proper court of first instance and appeal. By 1997 the Commission went out for public consultation via its ‘Green Paper’.25 A Select Committee of the House of Lords considered the Green Paper, producing a report in 1998.26 It is a penetrating document – and it is worth quoting the conclusions in full: ‘The Committee believes the Community patent, a single patent which is valid throughout the Community, would have advantages over the present system of European and national patents. The success of the system depends firstly, as we said in our 1986 Report, on keeping the costs down. A practical solution has to be found to the question of the number and extent of translations. There must also be judicial arrangements which will command the confidence of industry. The Community patent has to be sufficiently attractive to industry and able to compete alongside national patents and the European patent. If not, it will remain a white elephant which no one will want. It is clear to the Committee that there is substantial interest in and support for a Community patent within industry at the present time. A major political push and a preparedness to compromise on the language question are needed if the idea is to become a reality.’

The follow-up paper27 to the Green Paper said: ‘the general message from all of these discussions is the need to put greater emphasis on the practical aspects of the patent system, which should take account of user’s needs.’

Is it not extraordinary that the project – now about 40 years old – should only at this time have gone to widespread consultation? And is the message 25 26 27

COM(97) 314 final, 24.6.97. 9 June 1998, HL Paper 15 ‘The Community Patent and the Patent System in Europe’. February 1999.

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received at all surprising? Obviously not – but, as we shall see, I do not think that lesson has been learned. Two matters were made clear by the consultation – first that industry did not want a split infringement/validity system, and second, that it wanted a proper court system. The Commission at least recognised that which had long been self-evident – that there must be a proper court of first instance as well as of appeal. I pass over the next couple of years during which the Commission produced various draft papers. It was in March 2003 that there was a visible move – the European Council decided to go ahead with a Community Patent by what they are pleased to call a ‘common political approach’. The Council decided the following key features: (a) There should be a court of first instance (the ‘Community Patent Court’, ‘CPC’) and of appeal, the appeal court being attached to the Court of First Instance (‘CFI’). (b) The courts should be attached to the CFI – i.e. the HQ should be in Luxembourg, but with a power to sit elsewhere.28 (c) The courts should sit in panels of three, assisted by technical experts. (d) The proceedings are to be in the official language of the member state where the defendant is domiciled, although if the parties and court consent, any official language can be used. (e) Upon grant, the claims must be translated into all official languages. Since then the Commission has been at work. On 23 December 2003 it produced two linked proposals for Council Decisions:29 one establishing the CPC and dealing with appeals to the CFI, the other conferring jurisdiction on the Court of Justice. The documents are based on the March 2003 Council decisions. The proposals will be considered by the Council’s Court of Justice working party in January 2004 and no doubt there will be lots of submissions. I pick from them certain features. First the structure of the CPC. The idea is to have seven legally qualified judges who have ‘sufficient’ experience in patent law. They are to sit in two chambers of three, assisted by technical experts. The initial suggestion is one from each of seven fields.30 Could such a court actually work – and 28 29 30

Thus rejecting the permanent regional chamber idea – which would be bound to have led to forum shopping. COM(2003) 828 final; COM (2003) 827 final. Inorganic chemistry, organic and polymer chemistry, biochemistry and biotechnology, general physics, mechanical engineering, information and communication technology, electrical engineering.

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just as important, be acceptable to patentees. I am not sure. There is no proposal that at least in the early years the court could be staffed by national patent judges. This is a great mistake: users are much more likely to trust a court staffed by tried and tested judges. Moreover, in the early years there may well not be enough litigation to justify full-time judges. The Commission has made estimates of the amount of work which the court will face. These are 50, 100 and 150 cases in the first three years. This must be highly speculative.31 Certainly, I think one can fairly say that in the early years the case load is likely to be lighter. Indeed, although there is an idea for national courts to hear infringement cases in the interim period until 2010, I doubt that this is even necessary. I do not think the Commission understands that in most fields disputes about patents do not take place in the early years of the patent. I do not have any difficulty with assistance by ‘technical experts’. On the contrary, I think this a good idea – one which we could perhaps usefully use more in the UK.32 It ought to help the judges read into the case faster. What concerns me, however, is the risk that the ‘assistance’ turns into ‘judging’. There is no way that the experts could be real experts, having a proper and deep understanding of the technology of a particular case. Many important fields of technology are much too specialised for this. The Commission accepts that there will be party expert evidence – but it is not spelt out how this will be dealt with. For myself I think it would be sensible to have some, very limited, cross-examination in appropriate cases – particularly where any evidence of fact is given. Some of this could be by way of advance questions in writing. I do not want to see the largescale open-ended cross-examination which occupies much unnecessary time in our courts. I confess I am unhappy with the seat of the Court – Luxembourg. These cases will be attended by parties and experts to a much greater extent than other kinds of case dealt with there. The time has come to put important Community Courts in accessible places.33 It is fair to say that for the first 31 32

33

The crude figures are 50,000 Community patents a year and an annual litigation rate of 1 per cent of patents in force. Up until now ‘scientific advisors’ have only been used in high technology cases – and the advisors have been top in their field, e.g. the use of Professor Brenner (now a Nobel prize winner) in the Chiron litigation in the early 1990s or the retired Head of BBC Engineering in the colour television litigation of the 1970s. This is not so much for the British – for whom there are easy flights to Luxembourg, But the journey from other EU countries is not easy. There is the same problem for OHIM – the British can pop-down on easyJet but try going from Stockholm or Warsaw.

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time for any Community Court the proposal envisages sitting elsewhere, but that may prove difficult in practice. Nor am I happy about the status of the judges of the CPC – below that of those of the CFI. Hugh Laddie and I suggested that there should be just one level, appeals being heard by some of those who had not participated in the first instance decision. In the Federal Court of Australia, there is just one level of Judge. Appeals from a decision of one judge are heard by panels of three others. It works extremely well. And it would work for the Community Patent with some intelligent adjustment of the judges and imaginative use of national judges too. As things are, it may be difficult to get some of the best patent lawyers or judges to apply for the job in the new court.34 There are some very good ideas – letting the judges decide the rules of procedure for instance. Rules of procedure drafted by civil servants and enshrined in some difficult-to-amend law always work badly.35 Nor do I have any real problem, in principle, about the idea that European Patent Attorneys, in addition to lawyers, should have some rights of audience. But the standard will have to be a lot higher than some of the stuff which goes before the EPO. Commercially I expect that in practice lawyers will be used – this will be big litigation for a continent-wide injunction. As to the appeal court (part of the CFI) it is envisaged there will be a panel of three only, assisted again by technical experts. Commendably the Commission has realised that an appeal should be just that, not an opportunity to put in better evidence or new prior art, willy-nilly.36 Commendably, the CPC is to be given power to use electronic communication. I think its machinery should be constructed from the outset on the basis that very much of its work will be done that way. There should be an electronic court file, and ready provision for the use of video-links. It is vital to remember that by the time the system really takes off, video linking will be near routine, and as easy as using a telephone now. Enforcement is to be by fine. There is no provision for ‘contempt of court’. I do not have a real problem about this – though there are hardline infringers from time to time. Curiously, the proposed Directive on Enforcement is inconsistent with this limited proposal for enforcement. 34 35 36

Judging nothing but patents day in, day out, is not everyone’s cup of tea. The EPO is a good example of this. This is vital – slackness in this area leads to indefinite proceedings, as happened a lot in the EPO at one time, though they have tightened up a bit in recent years.

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I would have thought that it would be better if the court could not only impose a fine, but that its order could automatically (without the need for registration) be enforced in any Member State, by the machinery available in that state. Many of these things are matters of detail – I do not regard them as insurmountable. The Commission has done a good job of fleshing out the bones given to it by the Council in March last year – the ‘common political approach’. The real problem is those bones themselves – are they a viable skeleton? Thrashed out by politicians, they have never been tested by asking the potential users – customers. The Green Paper consultation did not ask them what they thought of the straightjacket now imposed on the Commission’s proposals. Let me examine key proposals which I think are formidable obstacles to success. First, the language problem. The compromise is that the patent will be in one of the three languages of the EPO but the claims must be translated into all EU languages – 20 as things stand. I do not know what this will cost – all are agreed, a lot. The Council says this will be an incentive to keep claims short – a good idea since most patents have far too many claims.37 What is clear is that just the claims can give only a rough idea of the scope of protection – which is determined by the terms of the claims as interpreted using the description and drawings.38 In the real world I doubt very much whether most of industry concerned with a pan-European patent will ever look at these translated claims. They will use one of the EPO language versions – as they must now if they want to get involved in an opposition or apply for a patent themselves. So the political compromise may help price the EU patent too high without any real benefit. The other, I think bizarre, requirement, is that the defendant must be sued in his language unless he agrees to another. How many owners of inventions important enough to justify continent-wide protection will be happy if they have to sue an infringer in one of the EU’s more obscure languages? How does this help the court work? It may be (I suspect often) the case that the infringer could perfectly well use an official EPO language but would insist on his own language precisely to slow down the case and make things difficult for the other side. Why give Nokia the option to be sued in Finnish when in practice it works in English?39 The correct solution 37 38 39

Most cases turn on just one claim, a few on two. More than two is rare indeed. Art. 69 EPC. I suspect that it would opt for English anyway, but one can never be certain.

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was to leave the choice of appropriate language to the Court. Of course if a defendant had no EPO language in which to work, arrangements to use his language would have to be made – but in practice that is likely to be rare. The political compromise here may be enough to deter people from applying for EU patents at all. After all they have a choice. Many may prefer the patchwork system of national and European Patents we have now. There is a real possibility. What the politicians overlooked was that here is being created an optional system – one that has to be more attractive than the current set up. And they failed to realise that the the window of what is practical for this project is very narrow indeed. There is more about this ill-thought idea. As usual with this sort of problem,40 the politicians overlooked the fact that the patentee usually has a choice of who and where to sue. Logically, he would sue the manufacturer. But if the manufacturer is domiciled in a rare language country, the patentee may sue the manufacturer’s customer domiciled in a country whose language is of the patentee’s choice – forum shopping for language is a real possibility. Whether a ‘spider in the web’ theory can be developed for the CPC remains to be explored. It should not have to be. Pragmatism should have dictated choice of language. So the new system faces a series of obstacles: language (claims in all languages and having to sue in the defendant’s), uncertainty as to who the judges will be, a failure to use the expertise of existing national judges, and unattractive seat of the court. The true costs remain to be set. Will it fly? I do not know. I suspect no one else does either – and that very fact may put some off applying for Community patents. There may be others who will boldly take a chance – perhaps betting on the notion that the new court, especially in its early days, will be pro-patentee.41 If the system does not get going this time, what will happen? Well, I think a European patent will be so necessary in future years that the defects will have to be put right. The 50-year-old project will simply extend to being a 70-year one. One day there will be a Europe-wide patent and courts to go with it.

Postscript Since the above was written, the Community Patent proposal has had a further serious setback. A full postscript by the author can be found in the Preface. 40 41

The same thing arose under the Brussels Convention on the Jurisdiction and Enforcement. Much the same happened with the US Court of Appeals for the Federal Circuit.

6 Patents – what’s invention got to do with it? sir hugh laddie ∗

There is a significant difference between the civil law and common law approach to intellectual property rights. In the former, the justification for the creation and enforcement of such rights is the belief that the author has a moral right to retain control over his intellectual creations. In the common law system, a different policy is the driver. Ours is an economic justification. We sometimes say that we are free to do or copy anything save only to the extent that it is expressly prohibited by law and that the law only imposes a prohibition where an economic case can be made for it. Freedom to compete, including the freedom to copy and improve on competitor’s products, is the fuel on which our economy runs. Restrictions are to be kept to a minimum. Although the language of fairness may be used as an additional tool to sell intellectual property rights to politicians and the public, both the existence of intellectual property rights and the scope of protection has to be justified on the basis that the commercial benefits to society outweigh the disadvantages of restrictions on competition. This may make the expansion of existing IP rights or the creation of new ones rather more easy to accept in the civil law system. It is a value judgment whether any particular type of creation or work product is worthy of protection. Where the effort employed in the creation of one type of work is sufficient to merit protection on moral grounds, it is not difficult to argue that other works which involve similar amounts of effort in creation are as worthy of protection. We like to think that in the common law system we are more hard-nosed. For us, the purpose of intellectual property rights is to encourage the development and commercialisation of new and valuable products or processes which, absent a period of protection from competition, would either never be created or not commercialised.

∗

Judge, Patents Court and Chancery Division, High Court of Justice for England and Wales.

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For those brought up in the common law system, these differences have already caused problems and disquiet in relation to some European intellectual property legislation. For example, since we object to the creation of monopolies which have no commercial justification, the common law purists find it difficult to accept the creation of trade mark rights which do not protect trade. Trade marks are enforced so as to prevent the public from being deceived as to the source of goods or services. What is protected is the trade. Under some parts of EU legislation it appears that what is protected is the mark itself, not the trade. The economic justification for intellectual property rights is no more often asserted than in the case of patents. Even the European Patent Convention is based on the theory that the anti-competitive price paid by the creation of patent monopolies is worth paying. The pharmaceutical industry is frequently used to explain how the system works. It may not be typical of the industries which benefit from patent protection, but it is a vivid example and easy to understand. I will use it in this article. The theory is simple. When a company develops a new pharmaceutical and it is protected by patent, it is the patent which holds off competitors. High prices can be charged and large profits generated. Some of those profits can then be ploughed back into research and development in the hope of producing a new generation of good pharmaceuticals which will generate more profits and so on. There is a trade off. The company and its shareholders make profits and the public, which pays the price, gets the new medicines. In this field it is apparent that, without patents, few new products would be marketed. The expense in producing a new pharmaceutical is in the research and development stage. Normally, once it has been discovered and given regulatory approval, the manufacture of a new pharmaceutical will be comparatively cheap and its replication by competitors easy. Without the protection of patents, there will be no ability to recoup the cost of the research and development, let alone fund such activities in the future. No private company is going to enter this business unless it can see a reasonable prospect of obtaining a return on investment. The lack of pharmaceutical innovation in the command economies of the old Soviet Union and China suggest that State funding will neither be sufficient nor as effective. Inventiveness marks out what can be protected. But the purpose of this article is to suggest that it is a poor, or indeed illogical, basis upon which to determine what is and what is not worthy of monopoly. For present purposes, I will leave to one side the question of anticipation. It is a rigid test which, on any analysis, can invalidate the most

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meritorious subsequent development. Although the analysis below applies just as much to the law of anticipation, this ground of invalidity is of little commercial importance. Accidental anticipations, that is to say anticipations which do not also give rise to strong arguments of obviousness, are comparatively rare and normally easy to circumvent with the assistance of sympathetic patent offices and courts. The real problems arise in relation to obviousness. When patents and patent applications succumb to invalidity attacks, obviousness is the most common cause. This inevitably generates friction between the community of patentees and applicants on the one hand and patent offices and national courts on the other. A company which has spent millions of dollars on research and has produced a valuable new drug will be understandably irritated when, say, a court declares the patent invalid for obviousness, thereby opening up the market to competitors who are free to copy. That irritation is likely to be particularly acute when the raison d’ˆetre of the patent system is said to be the economic encouragement of research and development. The problems can be approached by considering first the concept of ‘obvious to try’. The classic statement of this principle is set out in the judgment of the Court of Appeal in Johns-Manville Corporation’s Patent.1 It was said that a development should be treated as obvious if ‘the person versed in the art would assess the likelihood of success as sufficient to warrant actual trial’. Statements to similar effect have been made by the EPO. On its face, this produces an unworkable or irrational test. If the reward for finding a solution to a problem and securing a monopoly for that solution is very high, then it may well be worthwhile for large players to examine all potential avenues to see if one gives the right result, even though the prospects of any one of them succeeding are much less than 50/50. What makes something worth trying is the outcome of a simple risk to reward calculation. Yet, if the reward is very large, the avenues worth trying will be expanded accordingly. So, the more commercially attractive the solution and the more pressing the public clamour for it, the harder it will be to avoid an obviousness attack. In those circumstances a solution which is quite low down a list of alternatives, all of which are more or less worth trying, will fail for obviousness; a consequence which is consistent with the decision in Brugger v. Medic-Aid.2 Once one considers the problems thrown up by the doctrine of ‘obvious to try’ the more one realises that it is the whole law of obviousness which 1

[1967] RPC 479.

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[1996] RPC 635.

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sits uneasily with the commercial justification for patent protection. The point can be illustrated by reference to the sort of thinking which now goes into the planning of a development programme using genetic engineering techniques. The first step is to identify a disease which is caused by a known infective agent (a bacterium or a virus) and which gives rise to a serious and common illness in rich countries. A cure for such an illness, if protected by patents, will give rise to large profits. The development of the cure may involve the application of genetic engineering techniques, including the analysis of the genetic code of the infective agent and putting part of that code into a carrier which can then be used to generate anti-bodies to the complete agent. All these steps are well known. They are also time consuming. The application of these steps to produce a workable vaccine will involve considerable expense. If successful, this will lead to the creation of a vaccine which will take time, perhaps years, and further expense to develop into a commercial product with regulatory approval. Yet every step along this path could be seen to be both technically obvious and commercially worthwhile – assuming, of course, that patent protection can be secured. However, because each step is obvious, patent protection cannot be secured and, without such protection, the whole development process makes no commercial sense. This runs counter to the underlying rationale of patent protection. As suggested above, the purpose of intellectual property rights is to encourage the development and commercialisation of new and valuable products or processes which, absent a period of protection from competition, would either never be created or not commercialised. Yet the example set out above suggests that the requirement of inventiveness may hinder the achievement of this objective. The trouble is that the requirement of inventiveness is unrelated to the commercial justification for patents. If patents were really reserved only for developments which are unpredictable and the result of unconventional thought, few businessmen would pursue them. Placing money on the 3.30 at Epsom would be a better bet. In the real world, money is put into research directed at finding solutions to known problems and the routes followed are those which, on the current state of thinking, are the most likely to produce results. This is a growing problem. In many cases the courts have warned against being misled by the clarity of hindsight into finding patents obvious. Underlying that is the realisation that, once an area of technology is understood, the way an invention works becomes not only comprehensible but logical. It is but a short step to finding it obvious. As has been

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said, an invention is only an invention if it is based on a not too complete understanding of its subject-matter. In many fields our understanding of the technology is proceeding apace and leaving behind commercial applications. For example, in the world of medicine and genetics, not only do we now have great understanding of how chemicals and genes work but there are now new disciplines which allow the technician to determine what shape of molecule exhibits a particular beneficial property and how to make molecules of that shape. It is this type of technology which will be used to tackle diseases in the future, yet in many cases it may be said that the application of such technology to solve known problems is not inventive. It appears that the field of pharmaceuticals, the example which is most often used to demonstrate the necessity of patent protection to delivery of new and valuable products to the public, also illustrates how ill-suited the law is to achieving that goal. It has been said that patents are not granted simply for coming first in the race to achieve an obvious product or process. Yet in many cases, absent the commercial incentive of a patent, there will not be a race at all.

7 Common law and civil law approaches to patent claim interpretation: ‘fence posts’ and ‘sign posts’ donald s. chisum ∗

A legal system providing a property right in a human creative effort rests on two fundamental bases: the standards for establishing the right and the scope of the right. Copyright law requires that an author’s work be original, and it confers on the author exclusive rights against unauthorized copying, distribution and other activity of works that are substantially similar in expression to the protected work. Similar requirements are imposed by trademark law for product and service identification symbols and by patent law for inventions. To define the scope of an intellectual property right, legal systems have adopted one of two approaches. First, protection scope can be defined by a direct comparison of the creator’s work and an accused work. Copyright and trademark law follow this approach for determining protective scope, that is, infringement. Consider a copyright example. An author’s work, a play ‘Romeo and Juliet’, portrays the travails of young lovers from contrasting family cultures in Verona, Italy, centuries ago. An unauthorized accused work, a motion picture ‘West Side Story’, portrays a similar story set in twentieth-century New York. The author’s copyright is infringed if the accused work is judged to be substantially similar in expression to the protected work. For trademark law, the inquiry is analogous. One company adopts a trademark ‘Lexis’ for legal data bases. Later, another company uses ‘Lexus’ for luxury automobiles. The mark owner’s trademark is infringed if the accused mark is judged to be sufficiently similar to create a likelihood of confusion or dilution. Second, protection scope can be defined by requiring the creator to pose a reasonably precise verbal statement of the extent of the right. Among the major intellectual property regimes, patent law adopts ∗

Inez Mabie Professor of Law, Santa Clara University, Santa Clara, California.

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this approach, requiring an inventor as part of the patent procurement process to include one or more claims setting forth the extent of the invention.1 Patent law interjects a written delineation of the invention between an inventor’s creation and an accused product or process to determine infringement (and, indeed, between the creation and the prior art to determine whether the invention is patentable). Whether patent law ought to require a written claim to an invention is debatable, but the requirement is conventionally accepted as sound. Under the conventional view, the claiming requirement serves two purposes. First, the claim defines the invention for purposes of determining patentability, during both examination by a patent office and judicial assessment. Second, the claim provides notice to the public, usually, a business entity seeking to avoid a patent, of what the patent covers. The notice supposedly provided by a written claim enables the entity not only to determine whether to engage in potentially infringing conduct but also how to develop alternative technology (‘design around’). But words are only words, and a claiming requirement can fully serve its intended purposes only if there is reasonably predictable certainty as to how the words of a claim will be interpreted by critical decision-makers. Thus arises a central problem for every patent system that requires a verbal definition of a protected invention: how to achieve consistency in the interpretation of the claims in patents. This central problem did not escape the attention of the framers of Europe’s harmonized patent system. To establish uniform standards for the patentability of inventions was a relatively straightforward task – though it entailed compromises and value choices. Issues were raised and resolved. Should there be ‘absolute’ novelty, as existed in some European countries, or should there be a ‘grace period’ as existed in Germany? Should an earlier-filed patent application’s disclosures be deemed prior art for novelty and obviousness as of the application’s filing date? The framers recognized that the central problem of claim interpretation was an even tougher one to resolve. Claim interpretation is typically reposed in national courts. The judges of those courts bring to claim interpretation attitudes and traditions derived from a general, national legal culture. 1

See, e.g., 35 U.S.C. § 112 (‘ . . . The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention’.); European Patent Convention Articles 78(1)(c), 84 (‘A European patent application shall contain . . . one or more claims’; ‘The claims shall define the matter for which protection is sought. They shall be clear and concise and be supported by the description.’).

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A national judge will apply the same mental processes in interpreting words in all legal instruments, whether in a statute, a contract, or a patent claim. The framers of European patent law harmonization were faced with a specific national conflict (or at least the perception of a conflict) on judicial patent claim interpretation: Germany versus the United Kingdom. The former has a civil law tradition; the latter a common law tradition. Resolution of the conflict was essential: the two countries had the largest volume of litigation over patent infringement in Europe. On the one hand, German courts were deemed to view the language of a patent claim as a guide to determining what the patented invention is – only a guide, the invention and whether it has been misappropriated by an accused infringer being determined by a plenary consideration of the patent’s disclosure and the relationship between the invention and the prior art. On the other hand, United Kingdom courts were deemed to view patent claim language as the exclusive and restricting definition of the invention. For example, if a patent claim required that a component be ‘vertical’, the German courts would assess the reason for the ‘vertical’ limitation – did the nature of the invention as an advance over the prior art require strict verticality or merely substantial verticality that would perform the function of the invention? – and deem the patent to cover any structure or method that appropriated the invention. This approach, in theory, assured a fair scope of protection for patent owners: allowing a slight variation from the literal requirement of ‘vertical’ might authorize appropriation of the invention’s essence. The United Kingdom courts would define ‘vertical’ and deem the patent to cover only structures or methods that met the definition. This approach, in theory, assured certainty and predictability of the scope of patent protection. Professor William Cornish, in his characteristic lucid manner, described the conflict as between ‘fence post’ claiming and ‘sign post’ claiming.2 In United States jurisprudence, the conflict is described as between ‘central’ claiming and ‘peripheral’ claiming.3 2 3

W. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights 165 (4th ed., 1999). In Warner-Jenkinson Co Inc v. Hilton Davis Chemical Co 520 U.S. 17 (1997), the United States Supreme Court rejected an argument that ‘the evolution in patent practice from “central” claiming (describing the core principles of the invention) to “peripheral” claiming (describing the outer boundaries of the invention)’ required abandonment of the doctrine of equivalents.

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The European harmonizers attempted to bridge the German–UK gap by stating in Article 69 of the European Patent Convention that a patent’s extent of protection should be determined by ‘the terms of the claims’, the claims being interpreted in light of a patent’s description and drawings. This appeared to endorse the ‘fence post’ concept. But the harmonizers hedged: they adopted a ‘Protocol’ to Article 69 that, rather bluntly, declared that patent claim interpretation methodology should track a middle course between the German and United Kingdom approaches. The Protocol decreed that claims were not to be limited to the strict, literal meaning of their words, a repudiation of the deemed United Kingdom approach, but, also, were not to be viewed as merely a guideline, a repudiation of the deemed German approach. Professor Cornish noted that the former was a ‘caricature of the former British approach’ and the latter ‘an exaggeration perhaps of the old German approach’.4 But the Protocol concluded with an injunction with which it is hard to disagree: patent claim interpretation should combine ‘a fair protection for the patentee with a reasonable degree of certainty for third parties’. Has the Protocol been effective in achieving a harmonized European approach to the interpretation of patent claims? That is an issue for others to address and assess. Of interest here is a recent action to amend the Protocol to include a reference to non-literal infringement by equivalents. The United Kingdom courts had a headstart into the era of Article 69 Protocol harmonization of claim interpretation. The House of Lords’ 1982 Catnic Components decision, applying pre-harmonization law, injected a doctrine of ‘purposive construction’ to moderate strict literalism.5 How the purposive construction doctrine relates to Article 69 and its Protocol has vexed the United Kingdom courts. In an evolution typical of common law jurisprudence, the United Kingdom courts formalized and elaborated on the Catnic Components purposive construction doctrine. They broke down the doctrine into three steps, inquiring, sequentially, whether: (1) a ‘variant’, that is, an item that does not conform to the strict, literal definition of a patent claim term, has a ‘material effect’ on how a patented invention works; (2) the absence of a material effect ‘would have been obvious’ at the patent’s publication date to a person of ordinary skill in the art; and (3) a reader of the patent would have understood that the patent owner intended strict compliance with the patented invention’s 4 5

W. Cornish, supra n.2, p. 166. Catnic Components v. Hill & Smith [1982] RPC 183.

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claim language.6 As will be seen, these inquiries have analogues in United States case law. Comparison of the European experience with the harmonization of patent claim scope determination with the experience of other major patent-granting countries, especially Japan and the United States, is of both scholarly and practical interest. Japan is of interest because its legal system is based on a civil law approach.7 But of even greater interest is the experience in the United States, a common law jurisdiction. For patents, the US is truly the big tent, the centre ring, for exposing concepts on patents and their scope: not only has it a large market for technologybased products and services but it enjoys – or perhaps suffers from – a litigious culture. Many suits alleging patent infringement are brought, and the issue of how to interpret the claims of the patent-in-suit is almost always a key point of dispute between a patent owner and an accused infringer. Procedural developments have made legal standards for claim interpretation particularly important in United States patent litigation. Patent infringement may be resolved at two stages of a suit in a trial (first instance) court. The first stage is summary judgment. The title ‘summary judgment’ is misleading because of the word ‘summary’; with a summary judgment motion, each party has full opportunity to present its position, but the motion can be granted only if there is no genuine issue of material fact. That is, a court grants summary judgment if only issues of law are posed. The second stage is a trial in which the parties present oral and documentary evidence and the trier of fact resolves any conflict on issues of fact. Proceeding to trial significantly increases the length and expense of a patent litigation. The United States legal system is unique in permitting either party to request that trial be to a jury consisting of ordinary citizens. A trial court’s infringment determination is subject to review on appeal. In the United States, nearly all appeals concerning the validity and infringement of patents are channelled to a single appellate court – the Court of Appeals for the Federal Circuit.8 In all three contexts, summary judgment, jury trial, and appellate review, whether claim interpretation is a question of law or fact is pivotal. 6 7 8

E.g., Improver Corp v. Remington Consumer Products Ltd [1990] FSR 181. See T. Takenaka, Interpreting Patent Claims: The United States, Germany and Japan 17 IIC Studies (1995). Because of the technical definition of the jurisdiction of the Federal Circuit, some appeals raising issues of patent law continue to go to other appellate courts. See, e.g., Holmes Group, Inc v. Vornado Air Circulation Systems, Inc 535 U.S. 826 (2002).

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If it is a question of fact and there is a genuine dispute between the parties, summary judgment cannot be granted, the decision must be submitted to the jury, and an appellate court must respect a trial court decision, reversing only if that decision is clearly erroneous. If it is a question of law, summary judgment may be granted despite the dispute, the judge, not the jury, makes the decision, and an appellate court reviews claim interpretation in a plenary fashion (‘de novo’). In the landmark Markman decision, the United States Supreme Court held that claim interpretation is a question for the trial judge, not the jury.9 The Federal Circuit subsequently extended this holding to appellate review, ruling that claim interpretation should be reviewed ‘de novo’ on appeal, that is, without deference to a trial court’s interpretation.10 Combined, these holdings revolutionized patent litigation in the United States. Patent owners and accused infringers use substantial resources to convince a judge what disputed terms in a patent’s claims mean. This often leads to a unique procedure, the ‘Markman Hearing’, in which a trial judge hears background information on the pertinent technology necessary to resolve the question of law on patent claim interpretation. In turn, the Federal Circuit produces dozens of lengthy opinions every year devoted to parsing the meaning of particular patent claim language. In the post-Markman era, there has been a blizzard of judicial writing on how to interpret patent claim language. The decisions address issues, such as the use of dictionaries to determine the ordinary meaning of words, the role of examples and explanations in a patent’s specification, the limiting effect of a patent’s prosecution history, that is, the record of proceedings in the patent office leading to patent issuance, and the weight to be given to expert witness testimony. How does the large and ever-expanding universe of United States jurisprudence on claim interpretation compare to the experience of patent harmonization in Europe? At first blush, there is no direct comparison. The essential problem that moved the European harmonizers was expansion of the scope of protection beyond the bare, literal terms of a patent’s claims in situations in which it appeared an accused product or process appropriated an invention’s essence but avoided the language of the claims, expansion driven by the need to provide a fair scope of protection to patent owners counterbalanced by the need to achieve certainty. United States patent jurisprudence 9 10

Markman v. Westview Instruments, Inc 517 U.S. 370 (1996). Cybor Corp v. FAS Technologies, Inc 138 F.3d 1448 (Fed. Cir. 1998).

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avoided this problem through use of the doctrine of equivalents, first recognized by the Supreme Court more than 150 years ago and reconfirmed in 1997 and 2002 in the Warner-Jenkinson and Festo decisions.11 The Festo decision (2002) explicitly recognized that the doctrine of equivalents created uncertainty as to claim scope, but it opined that such uncertainty was the price for assuring fair protection scope. ‘If patents were always interpreted by their literal terms, their value would be greatly diminished. Unimportant and insubstantial substitutes for certain elements could defeat the patent, and its value to inventors could be destroyed by simple acts of copying. For this reason, the clearest rule of patent interpretation, literalism, may conserve judicial resources but is not necessarily the most efficient rule. It is true that the doctrine of equivalents renders the scope of patents less certain. It may be difficult to determine what is, or is not, an equivalent to a particular element of an invention. If competitors cannot be certain about a patent’s extent, they may be deterred from engaging in legitimate manufactures outside its limits, or they may invest by mistake in competing products that the patent secures. In addition the uncertainty may lead to wasteful litigation between competitors, suits that a rule of literalism might avoid. These concerns with the doctrine of equivalents, however, are not new. Each time the Court has considered the doctrine, it has acknowledged this uncertainty as the price of ensuring the appropriate incentives for innovation, and it has affirmed the doctrine over dissents that urged a more certain rule.’12

Warner-Jenkinson (1997) placed limitations on the doctrine in order to achieve greater certainty. It directed that equivalency be determined on an element-by-element basis, that is, there must be an equivalent of every claim requirement. The all-elements rule precludes comparison of a claimed invention as a whole with an accused product or process. If a claim element is completely missing from the accused product or process, there can be no infringement under the doctrine of equivalents. Warner-Jenkinson also confirmed the limiting effect on the doctrine of equivalents of ‘prosecution history estoppel’. The estoppel exception to the equivalents doctrine provides that a patent owner may not capture through equivalents subject matter surrendered by an amendment to a patent’s claims, or even by an argument regarding the basis for the patentability of an invention, during ‘prosecution’, that is, during 11 12

Festo Corp v. Shoketsu Kinzoku Kogyo Kabushiki Co Ltd 535 U.S. 722 (2002); WarnerJenkinson Co Inc v. Hilton Davis Chemical Co 520 U.S. 17 (1997). 535 U.S. at 731–732.

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negotiations between the patent owner and the patent office officials leading to a patent’s issuance. Warner-Jenkinson’s discussion of prosecution history estoppel failed to resolve important questions and led to another Supreme Court decision, Festo, in 2002.13 Festo set forth concepts similar to those used by United Kingdom courts in construing claim language. The courts inquire whether the absence of a material effect of a ‘variant’ would have been ‘obvious’ to a person of ordinary skill in the art. Festo similarly indicates that a patent owner is not estopped by a narrowing claim amendment from claiming an accused equivalent (i.e., variant) if the accused equivalent was not foreseeable at the time of the amendment. The doctrine of equivalents in United States patent jurisprudence deflects the pressure for an expansive ‘purposive’ claim interpretation. Nevertheless, the tension between the civil law, traditional German approach using claim language as a ‘sign’, and the common law, traditional United Kingdom approach using claim language as a ‘fence’, is replayed in United States case law when an accused infringer attempts to narrow, not expand, a claim’s literal scope. Patent practitioners, aware of the limiting effect of claim language, persistently press broadly-worded claims before the patent office. Once allowed as a patent, the patent owner asserts the patent’s claims against accused infringers whose products and processes differ significantly from those set forth in the patent’s written description (specification). Responding, accused infringers attempt to narrow patent claim scope to the examples and explanations set forth in the specification. Decisions by the Court of Appeals for the Federal Circuit oscillate between a literalistic (fence post) approach and a purposive (sign post) approach to claim interpretation. Federal Circuit decisions consistently affirm certain general principles.14 Words in a patent claim are presumptively given their ordinary meaning. Claims are construed in light of the specification but must not be limited by ‘reading in’ limitations based on the specification disclosure and the ‘preferred embodiment’ of the invention. Statements during a patent’s prosecution are to be given weight. Extrinsic evidence, such as testimony by experts and the inventor, cannot vary a patent claim’s plain meaning. As always, general principles do not resolve specific controversies. Patent claim controversies involve especially difficult interpretation 13 14

Festo Corp v. Shoketsu Kinzoku Kogyo Kabushiki 535 U.S. 722 (2002). See, e.g., Vitronics Corp v. Conceptronic, Inc 90 F.3d 1576 (Fed. Cir. 1996).

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problems. Two examples concerning biotechnology illustrate the claim interpretation dilemma on choosing between a literal broad interpretation and a narrowing purposive interpretation. In Amgen (2003),15 five patents concerned recombinant erythropoietin (EPO), processes for producing EPO, and vertebrate and mammalian cells with DNA sequences encoding for EPO. The claim interpretation in Amgen is of particular interest from a comparative law perspective because the scope of corresponding patents has been litigated in the United Kingdom.16 The patents’ specification gave examples in which an exogenous human EPO gene was transformed into mammalian cells, Chinese hamster ovary (CHO) and monkey (COS-1) cells. The specification taught one way to make EPO recombinantly. The technology of the accused infringer, Transkaryotic Therapies, entailed making EPO from cells in culture by using endogenous activation, i.e. causing a gene already present in a human cell in culture to produce EPO by inserting an appropriate promoter upstream of the gene. The accused infringer’s technology was developed ten years after the application leading to issuance of the five patents was filed. The accused infringer argued that the patent claims should be limited to use of exogenous DNA. The argument was supported, to a degree, by both the patents’ specifications and their prosecution history. The specification stated that the invention was ‘uniquely characterized’ by the expression of exogenous DNA sequences. During prosecution, an examiner stated that the specification did not ‘guide one of ordinary skill in the art in the discovery of non-transformed . . . cells’. Nonetheless, the Federal Circuit held that the accused infringer’s argument would improperly import a limitation into the claims. The ‘plain meaning’ of the claims controlled. Some claims in the patents required that the EPO be ‘non-naturally occurring’ or entail ‘vertebrate’ or ‘mammalian’ cells. The accused infringer argued that these phrases should be construed to exclude human cells. Again, the Federal Circuit disagreed. There was no ‘clear disavowal’ of claim coverage during the patents’ prosecution histories. The patents’ specification expressly described humans as a subset of mammals and vertebrates. A deletion to the original reference to use of human DNA in human cells in the filing of a continuing application and an argument during prosecution of a European 15 16

Amgen Inc v. Hoechst Marion Roussel Inc 314 F.3d 1313 (Fed. Cir. 2003). See Dunlop, ‘Court of Appeal Gets to Grips with the Protocol’ [2003] E.I.P.R. 25(8), 342–350.

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application did not constitute an admission of non-coverage of the use of human DNA in human cells. In contrast to Amgen is Biogen (2003),17 which involved two patents (‘567 and ‘779) concerning production of human interferon in Chinese hamster ovary (CHO) cells. The Federal Circuit held that, properly interpreted, the ’567 patent’s claims were limited to a single DNA construct (i.e. a construct with both a marker gene and an interferon gene), even though the claims did not expressly recite such a limitation. The specification described only the use of a single DNA construct (i.e. linked co-transformation). The patentee had stated during prosecution that the claims were broad and not limited to a single DNA construct. During the prosecution of an earlier patent application (’843), the patentee had distinguished a prior art reference on the ground that the prior art reference showed multiple gene constructs whereas its invention entailed a single construct. During the ’567 prosecution, the patentee stated that its prior argument during the ’843 prosecution had been an ‘inadvertent oversight’, based on an erroneous understanding of the prior art reference and that its invention’s true scope was to the use of CHO cells to produce human interferon, independent of the construct used. In a statement of ‘Reasons for Allowance’, the examiner stated that the claims were similar in scope to those in the parent ’843 patent and were limited to linked co-transformation (single construct). The patent owner responded, disputing the examiner’s interpretation. Nevertheless, the court held that the specification and prosecution history limited the interpretation of the claims to linked co-transformation. A patentee’s statements during prosecution could not broaden the disclosure of the specification. Most recent decisions by the Federal Circuit reflect a literalist approach to claim interpretation, much in the tradition of the United Kingdom approach. Decisions recite that there is a ‘strong’ or ‘heavy’ presumption in favor of giving patent claim words their ‘ordinary’ meaning.18 This presumption will be overcome only if there is clear evidence in either the patent’s specification or its prosecution history. The obvious question is: how does a judge know a term’s ordinary meaning? The answer given is: the dictionary! Decisions regularly cite dictionaries to confirm the ordinary meaning of both technical and non-technical words. 17 18

Biogen, Inc v. Berlex Laboratories Inc 318 F.3d 1132 (Fed. Cir. 2003). Johnson Worldwide Associates Inc v. Zebco Corp 175 F.3d 985 (Fed. Cir. 1999).

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The practice of judges of citing dictionaries in support of claim interpretation has disturbing implications. Dictionaries often given multiple, even inconsistent definitions. Which should be selected? Which dictionaries should be deemed authoritative? (Decisions regularly cite the 1989 second edition of the Oxford English Dictionary, but other, lesser dictionaries are also cited.) Should a court credit a dictionary produced by a private corporation that is regularly involved in patent litigation? (One Federal Circuit decision cites the ‘Microsoft Computer Dictionary (4th ed.1999)’ for definitions of ‘data packet’, ‘overlay’, and ‘switch’.)19 Should a court rely on a dictionary not cited by a party without giving notice to the parties? Texas Digital (2002)20 is interesting. In the opinion, the court took a rather extreme position on the importance of using dictionary definitions to ascertain the ordinary meaning of words in a patent claim. It indicated that a judge, whether at trial or on appeal, is free to consult dictionaries whether they are cited by the parties or not. ‘Dictionaries are always available to the court to aid in the task of determining meanings that would have been attributed by those of skill in the relevant art to any disputed terms used by the inventor in the claims. . . . When a patent is granted, prosecution is concluded, the intrinsic record is fixed, and the public is placed on notice of its allowed claims. Dictionaries, encyclopedias and treatises, publicly available at the time the patent is issued, are objective resources that serve as reliable sources of information on the established meanings that would have been attributed to the terms of the claims by those of skill in the art. Such references are unbiased reflections of common understanding not influenced by expert testimony or events subsequent to the fixing of the intrinsic record by the grant of the patent, not colored by the motives of the parties, and not inspired by litigation. Indeed, these materials may be the most meaningful sources of information to aid judges in better understanding both the technology and the terminology used by those skilled in the art to describe the technology.’21

The court went on to indicate that it is methodologically incorrect to consult a patent’s specification on the meaning of claim terms without first determining the meaning of the terms based on dictionaries. 19 20 21

Apex Inc v. Raritan Computer Inc 325 F.3d 1364 (Fed. Cir. 2003). Texas Digital Systems, Inc v. Telegenix Inc 308 F.3d 1193 (Fed. Cir. 2002). 308 F.3d at 1202.

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‘Consulting the written description and prosecution history as a threshold step in the claim construction process, before any effort is made to discern the ordinary and customary meanings attributed to the words themselves, invites a violation of our precedent counseling against importing limitations into the claims. . . . For example, if an invention is disclosed in the written description in only one exemplary form or in only one embodiment, the risk of starting with the intrinsic record is that the single form or embodiment so disclosed will be read to require that the claim terms be limited to that single form or embodiment. . . . Indeed, one can easily be misled to believe that this is precisely what our precedent requires when it informs that disputed claim terms should be construed in light of the intrinsic record. . . . But if the meaning of the words themselves would not have been understood to persons of skill in the art to be limited only to the examples or embodiments described in the specification, reading the words in such a confined way would mandate the wrong result and would violate our proscription of not reading limitations from the specification into the claims.’22

Yet the court acknowledged that one must, indeed, consult a patent’s specification to determine which of multiple dictionary definitions are pertinent. ‘Because words often have multiple dictionary definitions, some having no relation to the claimed invention, the intrinsic record must always be consulted to identify which of the different possible dictionary meanings of the claim terms in issue is most consistent with the use of the words by the inventor.’23

Thus, one sees the schism between United Kingdom literalism – the strict ‘fence post’ approach – and German fundamentalism – the ‘sign post’ approach, replayed in United States case law on claim interpretation. All patent systems seek a common policy objective on patent claim scope: fair protection for patent owners combined with a reasonable degree of certainty. Which system best implements this objective: the United States system with a rather strict verbal orientation to determine ‘literal’ infringement, softened by a doctrine of equivalents or a European system with a potentially more expansive orientation to claim interpretation, possibly augmented in the future by an equivalency concept? Perhaps each system is appropriate for the legal culture in which it resides. Both 22

308 F.3d at 1204.

23

308 F.3d at 1203.

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systems probably reach the same and correct result in the vast majority of cases. The United States system likely reaches the correct result on patent scope in a higher percentage of cases, but it does so at high cost, to wit, greater complexity, expense and uncertainty. This cost may be justified in view of the high stakes of patent litigation in the United States. It cannot be justified in jurisdictions in which enforcement of a patent is important but rarely involves the tens and hundreds of millions of dollars typical of US patent litigation.

8 Indirect infringement of patents in Israel: judge-made law amiram benyamini ∗

A. Historical background Traditionally, the doctrine of contributory or indirect infringement has not been an integral part of Israeli patent law. More correctly, it has never been recognized as such by the Israeli legislator. This is mainly due to the fact that Israeli patent law derives from English patent law since the British Mandatory Ordinance of Patents and Designs 1924, substituted by the Israeli Patents Act 1967. As is well known, English common law did not include an indirect infringement prohibition until the Patents Act 1977. The introduction of indirect infringement into UK law resulted from the need to adapt national laws to the provisions of the Community Patent Convention 1975 (CPC).1 The Israeli legislator was probably influenced by the common law’s negative attitude towards indirect infringement, thus ignoring creative efforts by Israeli courts to adopt such a doctrine. This attitude could be justified in the past, as long as Israel was considered to be a developing country. Such countries normally oppose the granting of strong rights in patents, as patents are registered in most cases by foreign enterprises in order to prevent competition by local industry. Section 49 of the Israeli Patents Act 1967 (prior to the 1998 amendment discussed below) defined the term ‘infringement’ by conferring on the patentee the right to prevent all third parties not having his consent from exploiting the patented invention. Section 1 defined the term ‘exploiting ∗

1

Tel-Aviv District Court Judge. Ph.D. in Law, University of London (L.S.E.); LL.B., LL.M., Tel-Aviv University. Lecturer in Law, The Tel-Aviv College of Management Academic Studies Law School, and the Herzlia Interdisciplinary Center Law School. For a comparative study on the subject of indirect infringement, including EC law, US law and the UK and common law countries law, see: A. Benyamini, Patent Infringement in the European Community, IIC Studies Vol. 13 (1993), at pp. 173–235 (hereinafter referred to as ‘Benyamini’).

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the invention’ as: ‘any use of the invention, including making, marketing or deriving benefit therefrom in any other way . . .’2 Given this wide-scope and liberal definition of infringement, it was at least arguable that indirect infringement is prohibited under Israeli law, as it could be viewed – indeed it is viewed – as a way of ‘deriving benefit’ from the invention. Nevertheless, Israeli courts have showed until recently clear restraint, declining to adopt the doctrine so vital to patent protection, due to the lack of an explicit provision in the Patents Act.3 They tried to fill the gap created by the absence of a prohibition on indirect infringement by applying the tortious doctrine of joint tortfeasance to patent law, thus treating a person who aids and abets a direct infringement as a joint infringer.4 This is exactly the way in which the courts in the UK under the former law, as well as the courts in Canada and Australia, dealt with problems resulting from the lack of indirect infringement doctrine.5 Another way suggested in Israel for dealing with the indirect infringer was under the law of unjust enrichment or restitution.6 The tortious solution fell short of indirect infringement doctrine. For one thing, there can be no liability under the joint tortfeasance doctrine, unless a direct infringement, in which the defendant is involved, has been actually committed; that requirement is not part of the indirect infringement doctrine in many countries.7 For another, the mere supply 2

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4

5 6

7

This definition was probably influenced by the old British Royal Command which granted the patentee, inter alia, the exclusive right to ‘make, use, exercise and vend the said invention . . . and that the patentee shall have and enjoy the whole profit and advantage from time to time accruing by reason of the said invention . . .’ See Case 148/64 Hochman v. Faglin, 18(3) P.D. 640 (S. Ct.), where the indirect infringement proposition may have been rejected only because the patented product’s parts were intended for assembly abroad, which is not an indirect infringement in every country: see Benyamini, s. 6.1.1. See also Case 854/83 Thorn E.M.I. v. Electronoa, 50(2) P.M. 273 (Dis. Ct. of Jerusalem), where the court was not ready to treat the supply of spare parts for a patented machine as an infringement; but this may also be the rule in countries that have an indirect infringement doctrine: see Benyamini, s. 9.6. See: Case No. 817/77 Beecham Group Ltd. v. Bristol Myers Co., 33(3) P.D. 757 (S. Ct.), where the court held that patent infringement is a tort, hence treating the British supplier of the patented products and its Israeli importer as joint tortfeasors. i.e. joint infringers of the patent. See: Benyamini, s. 9.1.1. See: Case No. 5768/94, 5614/95, 993/96 A.Sh.I.R. v. Forum, 52(4) P.D. 289 (S. Ct.), which refers generally to intellectual property, and Case No. 505/94 Regba v. Zehori (Dis. Ct of Tel-Aviv), that refers to indirect infringement of patents – see below. S. 26 of the Community Patent Convention 1975 as amended in 1989 (CPC), and patent laws of the EC Member States that have adapted their national law to the CPC, do not require actual direct infringement: see Benyamini, ss. 9.1.1–9.1.2. But the tendency of the

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of essential elements of the patented invention is not sufficient to give rise to liability as a joint infringer, even when the supplier knows that they are suitable and intended for use in that invention; it must be proved that the supplier acted in a concerted design with the actual infringer, or induced him to infringe.8

B. The old definition: non-compliance with constitutional and free competition considerations The broad definition of infringement under the old Israeli patent law could hardly be considered as compatible with constitutional principles of Israeli law, as well as general patent law principles. Sections 3 and 8 of Basic Law: Human Dignity and Liberty 1992 prohibit, inter alia, any violation of a person’s right of property, except by a law befitting the values of Israel, enacted for a proper purpose and to an extent no greater than is required (the rule of proportionality). Sections 3 and 4 of Basic Law: Freedom of Occupation 1994 contain similar provisions regarding the violation of the right to freedom of occupation (i.e., to carry on any occupation, profession or trade). These provisions are practically regarded as part of Israel’s constitution, thus having a supremacy over other laws.9 Needless to say, the patent monopoly limits the right to freedom of occupation of third parties engaged in areas related to the patented invention. Hence, it could well be argued that the wide definition of infringement under the old patent law was unconstitutional. Prohibiting ‘any use of the invention . . . or deriving benefit therefrom in any other way’, without specifying exactly what are the acts constituting an infringement, could scarcely be regarded as complying with the requirement that there shall be no violation of the right ‘except by a law’. This limitation is commonly understood as requiring an express provision of law that prescribes the basic parameters allowing the violation of a constitutional right. Further, such a vague definition could be interpreted and applied by the courts so

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Supreme Court in Israel is to adopt such a requirement: see the Regba and Rav-Bariah cases discussed below at pp. 113 et seq. See: Benyamini, s. 9.1.1. and the cases cited in n. 6 there. This point was emphasized by the Israeli Supreme Court in the Regba and Rav-Bariah cases discussed below, and led to the adoption of the indirect infringement doctrine. Israel does not have an ordinary and complete constitution. Rather, it has Basic Laws that are enacted from time to time and cover various constitutional subjects. Basic Laws cannot be revoked or amended by an ordinary majority, and any law violating one of their provisions might be declared as invalid by the Supreme Court.

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as to enlarge the patentee’s rights by creating new types of infringement,10 in a way that exceeds the measures necessary to achieve the very object of the patent system. This could prejudice third parties’ rights to freedom of occupation (in the sense of freedom to carry on a trade or profession) in a non-proportional manner, which is unconstitutional. This proposition has never been brought before the courts, and it was certainly not the reason for amending the definition of infringement in 1998. But the Supreme Court has ruled more than once that patent rights should not be interpreted so as to impair third parties’ rights to freedom of occupation beyond what is really necessary to reward the inventor, and provide him with a useful incentive to innovate. When defining the rights conferred by a patent, the courts should balance the two contradicting constitutional rights: the patentee’s right of property, and third parties’ right to freedom of occupation.11 The legal possibility of creating new types of infringement by a liberal interpretation of the old definition could also be considered contrary to fundamental principles of patent law. Given the inherent contradiction between patent monopoly and free competition, it is a well-established rule in the EC as well as in Israel, that the patent monopoly should not extend beyond what may be regarded as the essence of the right, i.e. those elements of protection that can be justified as essential for granting the inventor a fair reward for his invention, and an effective incentive to innovate.12 This rule has been reiterated by the Israeli Supreme Court with regard to intellectual property rights in general, and patent rights in particular: the courts should find the right balance between the patentee’s rights and free competition requirements.13

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For example: under the old UK law, on the basis of the broad definition of infringement (see n. 2 above), the patent monopoly could extend to products made by a patented machine (Wilderman v. Berk (1925) 42 R.P.C. 79), or products made from a patented product (Beecham Group Ltd v. Bristol Laboratories Ltd [1978] RPC 153 (H.L.)). These acts, which are not prohibited in other countries, were considered under UK law as ‘use of the invention’. For patent cases see: Case No. 217/86 Shechter v. Avmatz, 44(2) P.D. 846; Case No. 427/86 Blas v. Kibutz Dan, 43(3) P.D. 323; Case No. 796/86 Porat v. Zemel, 44(4) P.D. 578; Case No. 7614/96 Zehori v. Regba, 54(3) P.D. 721; Case No. 613/93 Tivol v. Shamir (Dis. Ct. of Jerusalem, reported in Padior). For other intellectual property rights see: Case No. 513/89 Interlego v. Exin-Lines, 48(4) P.D. 578; Case No. 2687/92 Geva v. Walt Disney, 48(1) P.D. 251; A.Sh.I.R. v. Forum, n. 6 above. For the decisions of the European Court of Justice delineating the ‘specific subject-matter of the patent’ see Benyamini, s. 4.7 and Ch. 5. See the cases cited in n. 11 above.

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C. First move to adopt the indirect infringement doctrine: the Regba case Given the great importance of indirect infringement prohibition to patent protection, and in view of the fact that such doctrine is part of patent law in most industrialized countries, it was only a matter of time until Israeli courts decided to recognize and adopt that doctrine. The first courageous step in that direction was taken in 1994 (i.e. before the 1998 amendment) by the Tel-Aviv District Court in the Regba case.14 The court ruled that supplying basins coupled with a mould specifically designed for applying the patented method of fixing flat basins, with the knowledge that they are intended for use in the patented method, constitutes a form of ‘exploiting of the invention’, and hence amounts to an infringement of the patent. This was a classic case of indirect infringement. Indeed, the court stated that the defendants exploited the invention indirectly, relying, inter alia, on the US contributory infringement doctrine.15 This decision was overruled by the Supreme Court on the merits of the case, leaving open the principal legal issue whether the doctrine of indirect infringement applies in Israel.16 The Court noted that the basins had a non-infringing use, and it was not satisfactorily proved that the defendants had known the basins were intended for use in the patented method. Furthermore, there was no evidence showing that a direct infringement actually occurred as a result of the defendants’ acts. In these circumstances the Court ruled that the defendants’ activity could not amount to an indirect or contributory infringement – even if that doctrine were part of Israeli patent law – as it is also not prohibited under US and UK patent law.17 The Court added in an obiter dictum that adopting an indirect infringement doctrine would be indeed a desirable development. But the 14 15

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Case No. 505/94 Regba v. Zehori, reported in Padior (President of the Tel-Aviv District Court, U. Goren J). A similar decision concerning an indirect infringement situation was given by the Tel-Aviv District Court in Case No. 181/94 Brita v. Eliahu (unreported). In Case No. 603/94 Itung Ltd. v. Tamas Ltd. (reported in Dinim), the Tel-Aviv District Court gave an interlocutory order preventing the defendant from manufacturing blocks specifically adapted and knowingly intended for use in the patented method of building, without, however, stating the legal basis for this order. Case No. 7614/96 Zehori v. Regba, 54(3) P.D. 721 (the decision was written by E. Matza J, with the concurring opinions of T. Strasberg-Cohen J and I. Tyrkel J). The Court reviewed the legal position regarding s. 271 of the US Patent Act 1952, and s. 60(2) of the UK Patents Act 1977. However, there are significant differences on this subject between the two systems of law: see below.

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Court emphasized that the scope of prohibition, if applied, should be limited along the lines of US and UK patent law provisions dealing with contributory or indirect infringement. More specifically, as the Court explained, there can be no indirect infringement unless three cumulative conditions are proved: (a) the element supplied is an essential part of the patented invention; (b) the supplier knows that this element is suitable and intended for use in that invention; (c) there must be some relation between the indirect infringement and a direct infringement of the patent. The Court’s statement in favor of adopting an indirect infringement doctrine was accompanied by a significant reservation. The Court could not find a clear basis for an indirect infringement prohibition in the language of the Patents Act 1967. Moreover, in 1998 – after the District Court’s decision and before the Supreme Court’s ruling – the Israeli legislator amended the definition of ‘exploiting the invention’ in Section 1 of the Patents Act 1967. The new provision prescribes an exhaustive definition of the acts constituting an infringement, without any reference whatsoever to indirect infringement. Further, the old general prohibition on ‘any use of the invention’ and ‘deriving benefit therefrom in other way’ – was omitted from the new definition.18 The Supreme Court noted in the Regba case that this amendment makes it even more difficult to introduce indirect infringement into patent law, as it seems that the legislator did not consider such a prohibition as part of the patentee’s rights. Yet the Court left open the question whether it would be possible for the courts to adopt in the future the indirect infringement doctrine in the absence of an express statutory provision in the Patents Act. But one year later the Supreme Court took the decision – or should we say took the lead – and introduced that doctrine into Israeli patent law.

D. The 1998 amendment: intended limitation of patent rights or wrong application of the TRIPs agreement As explained above, constitutional and free competition considerations should have led the Israeli legislator to amend the broad and unlimited 18

S. 1 of the amended Patents Act 1967 defines the term ‘exploiting the invention’ as follows: (1) Where the invention is a product, any of the following acts: making, using, offering for sale, selling or importing for one of these purposes; (2) Where the invention is a process – using the process, and with regard to a product obtained directly by the process – any of the following acts: making, using, offering for sale, selling or importing for one of these purposes . . .’

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definition of infringement even before the 1998 amendment. But none of these factors has actually played a role in formulating that amendment. The 1998 amendment resulted from the Agreement on Trade-Related Aspects of Intellectual Property Rights including Trade in Counterfeit Goods (the TRIPs Agreement), which was administered by the World Trade Organization (WTO) and came into effect on 1 January 1995. Israel subscribed to the WTO in 1995, and thus had to adapt its intellectual property rights to the provisions of the TRIPs Agreement by 1999. Indeed, the new definition of infringement prescribed in section 1 of the Israeli Patents Act 1967, as amended in 1998, closely follows the rights conferred by the patent as defined in Article 28 of the TRIPS Agreement. That was, in my opinion, a colossal mistake. Most significantly, the TRIPs Agreement provides for adequate standards, which are considered as the minimal protection necessary for granting effective intellectual property rights. The Agreement’s provisions regarding the scope of protection have been reduced to the lowest common denominator, in order to enable the least-developed countries to join the Agreement without prejudicing the right of the industrial countries to grant broader rights. Therefore, it is expressly stipulated in Article 1(1) of the Agreement, that ‘Members may, but shall not be obliged to, implement in their law more extensive protection than required by this Agreement, provided that such protection does not contravene the provisions of this Agreement’. Remarkably, the Agreement’s provisions do not provide for any protection against acts like indirect infringement, offering a patented process for use and stocking the protected products for use or sale in the patent territory. Further, the Agreement only prohibits the ‘selling’ of the protected products, which is narrower than the common term ‘putting on the market’.19 In view of all this, it is difficult to conceive why an industrial country like Israel, blessed with a prospering high tech industry and so many inventors, has chosen to adopt in the 1998 amendment the TRIPS Agreement’s definition of patent rights, granting inventors such a narrow protection for patents. Moreover, the legislator totally ignored in that amendment the Supreme Court’s decision in the Regba case, that stated very clearly the importance of indirect infringement doctrine to patent rights, as well as the Court’s view that adopting that doctrine would be most desirable. It is the legislator’s right in a democratic country to reject the courts’ opinion on any legal matter. But the new definition of the patentee’s 19

See Benyamini, s. 6.4.

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rights was introduced without any serious discussion, and there are no indications whatsoever of an intentional decision to limit the patentee’s rights in comparison with the rights granted by the majority of industrial countries, and those conferred upon the patentee under the law that preceded the 1998 amendment.20 Therefore, it seems that the reason for this unfortunate result is an error in applying the TRIPS Agreement provisions.

E. Final adoption of indirect infringement prohibition: the Rav-Bariah case A year after the Supreme Court’s decision in the Regba case, the Court finally and clearly adopted the indirect infringement doctrine in the Rav-Bariah case,21 in spite of the fact that the legislator did not find it necessary to introduce such a prohibition as part of the 1998 amendment of the Patents Act. The plaintiff ’s patent in this case was granted for a combination of three elements forming a lock intended for use in a car’s gear-lever. The defendants marketed a kit containing two essential elements of the patented lock, specifically adapted and knowingly intended for use in the invention. As the court stated, this was a classic indirect infringement case, the only question being whether Israeli patent law prohibits such conduct. The Tel-Aviv District Court held that the defendants’ acts did not amount to an infringement, and this decision was overruled. The Supreme Court reviewed the statutory provisions regarding indirect or contributory infringement in the EC, the UK, Canada, Germany and the US. The Court examined the possibility of resolving cases of indirect infringement by applying the tortious doctrine of joint tortfeasance, as had been done in the past under the UK’s old law, as well as in Israel.22 However, as the Court explained, the tortious prohibition only partially covers the situations dealt with by indirect infringement. Indeed, it could not be proved that the defendants induced the purchasers of the lock’s 20

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There is no clue whatsoever as to the reason for this important change in the patentee’s rights in the explanatory notes included in the governmental Bill of Patents (Amendment No. 3) 1997. Case No. 1636/98 Rav-Bariah v. Havshush, 55(5) P.D. 337 (the decision was written by I. Englard J, with the concurring opinions of the President of the Supreme Court A. Barak J and A. Procaccia J). See nn. 4–5 above.

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elements to infringe the patent, or that they acted in a concerted design with those purchasers; therefore the tortious doctrine was inapplicable. In these circumstances, the court maintained it was time to introduce the indirect infringement doctrine into Israeli patent law, following the Court’s remarks in the Regba case in favour of such a move. The Court seemed to be bothered to some extent by the fact that the doctrine was finally adopted by case-law and not by the legislator, bearing in mind the constitutional basic principle concerning the separation of powers. But the Court mentioned that the doctrine had been evolved by the US and German courts before it was recognized by the legislator, and followed in their steps. As to the scope of prohibition on indirect infringement, the Court held (following the Regba case) that it shall be subject to those limitations stipulated in the UK and US Patents Acts, formulating these limitations as follows: (a) the element supplied is an essential part of the patented invention; (b) the supplier knows, or ought to have known in the circumstances, that this element is specifically suitable and actually intended for use in the invention; (c) the prohibition shall not apply when the element supplied is a staple commercial product, i.e. it has a substantial non-infringing use. This exception must be proved by the defendant. The Court pointed out that US courts have added a fourth condition for prohibiting contributory infringement, namely that there can be no contributory infringement unless a direct infringement has actually occurred.23 But the Court did not make it clear whether this condition is also required under Israeli law, noting that actual direct infringement had occurred in the specific case of Rav-Bariah.24

F. The legal position after the Rav-Bariah case: vagueness and legal uncertainty The Supreme Court’s precedent in the Rav-Bariah case may be criticized on two levels: constitutional law and patent law. It raises difficult questions 23 24

Aro Mfg. Co. v. Convertible Top Replacement Co. 365 US 336, at 341–342; 128 U.S.P.Q. 354 at 357 (S. Ct 1961). But in the Regba case, n. 11 above, the Supreme Court found this condition an essential integer of indirect infringement, though it was stated as an obiter dictum.

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which are expected to cause problems on these two different levels, as explained below.

1. Constitutional aspects It seems that in the course of what may be viewed as judicial activism the Court did not attribute due significance to the conspicuous fact that the legislator introduced in 1998 a new and exhaustive definition of infringement, leaving out any type of indirect infringement. The legislator omitted from this definition the old phrase ‘any use of the invention . . . or deriving benefit therefrom in any other way’, which could be used as a basis for indirect infringement. The new definition was enacted some years after the District Court’s decision in the Regba case, which might indicate the legislator’s policy against prohibiting indirect infringement. This situation is totally different from that which led to the statutory prohibition on indirect infringement in the US and Germany in the wake of case-law development there. The Israeli Supreme Court added, in fact, a new provision to the Patents Act. It was not a matter of interpreting the existing law, but, rather, introducing a key supplement to that law: a judge-made law. It was not done cautiously by way of evolution, from one case to another, but in a revolutionary way – in one swift move. No single court can develop such an important and complicated doctrine as indirect infringement in one decision – not even in some consecutive decisions. Courts are bound to decide each case on its merits, and the litigating parties bring before them (at least they are expected to do so) only those arguments and considerations pertaining to the case at issue. No court can see the whole picture, or deal with all the implications resulting from its decision, in a single case. Therefore, the courts are not the appropriate body to introduce into patent law a comprehensive doctrine of indirect infringement – certainly not in a single decision. It should be clearly emphasized that introducing an indirect infringement prohibition into Israeli patent law was most desirable, given its vital importance to patent protection and to the patentee’s ability to enforce his rights. The question is whether it would not have been more appropriate to leave this work to the legislator, given that the indirect infringement prohibition conflicts with the constitutional right to freedom of occupation and with free competition. It is the legislator’s duty, as well as power, to lay down the basic parameters of a law that allows the violation of constitutional rights, striking the right balance between the conflicting rights: the patentee’s right of property and third parties’ right to freedom

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of occupation. It is also the legislator’s role to ensure a due balance between patent monopoly and free competition. The legislator should have provided for an indirect infringement prohibition, delineating its boundaries by stipulating limitations on that prohibition, in order to ensure that patent rights do not go beyond what is really needed to reward the inventor and provide him with an effective incentive to innovate. Further, the Court adopted in a selective manner parts of the US and UK patent law, thus impairing the delicate balance achieved in these laws between patent monopoly and free competition. The Court based itself upon US patent law, but adopted only the contributory infringement doctrine stipulated in section 271(c) of the Patent Act 1952, ignoring the patent misuse doctrine introduced in section 271(d) of that Act in order to balance and prevent undesirable results deriving from contributory infringement. Altogether, it is at least arguable that the Court’s decision in Rav-Bariah is unconstitutional, since it entails a violation of third parties’ right to freedom of occupation not done ‘by a law’, as required by section 4 of Basic Law: Freedom of Occupation.

2. Patent law aspects The Rav-Bariah precedent has left us with a half-baked doctrine of indirect infringement. This result derives directly from the fact that the doctrine was not enacted by the legislator. Such legislation would have been done in a methodical manner, on the basis of careful deliberation, after hearing experts and representatives from different sectors. Rather, it has been introduced by the Supreme Court by way of adopting fragments of provisions from different systems of patent law, thus leaving key elements of that doctrine unclear.25 The Court held that the doctrine was applicable subject to the qualifications derived from US and UK patent law, which appears to be an unsuccessful effort to cross-breed from these two different systems of law. The result might be a mutant doctrine of indirect infringement. Clearly, there are significant differences that cannot be reconciled between indirect infringement under UK law (in fact EC law) and US contributory infringement. The US doctrine is viewed as an application 25

For a criticism of the Rav-Bariah precedent for the lack of theoretical basis of indirect infringement in the Court’s decision, and the absence of clear definition of the doctrine’s terms, see: M. D. Birnhack, ‘The Birth of a Tort: Contributory Infringement in Patent Law’, Justice Technologies: Law, Science and Society (The Buchman Faculty of Law Series, Tel-Aviv University, 2003), at p. 169.

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of the tortious joint-tortfeasance rule to patent law, and as an expression of the prohibition on aiding and abetting direct infringement. Hence, US law requires the occurrence of an actual direct infringement resulting from the indirect infringement. It does not prohibit the supply of essential means of the patented invention when they are intended for utilizing the invention in a lawful manner, such as private non-commercial use, or use for a legitimate experiment. Similarly, US law does not prohibit the mere offering of such means, even if they are intended for an unlawful use of the invention. By contrast, UK and EC patent law prohibits the offering or the supply of essential means suitable and intended for use in the invention, even where it is clear that the person offered or supplied would not commit a direct infringement, as his acts are exempted from infringement. The fundamental concept of the CPC, unlike US law, is that indirect infringement constitutes a prohibited and independent use of the invention, which is not necessarily based on contribution to direct infringement.26 Examining the way in which the Court formulated the indirect infringement prohibition, one may get the impression that it generally follows the indirect infringement provision of Article 26 of the CPC. However, the Court held that the doctrine shall only apply when the supplier knows that the essential element supplied is specifically suitable for the patented invention. That condition is clearly not part of the CPC’s provision (Article 26(1)), which extends the prohibition to elements (means) that also have a substantial non-infringing use, unless it is a staple commercial product (Article 26(2)).27 Similarly, the Court defined ‘staple commercial product’ as referring to a product which has a substantial non-infringing use, whereas Article 26(2) of the CPC refers to a ‘staple commercial product’ in the narrow sense of a basic product commonly used and sold on the open market. Using these terms, the Court probably sought to adopt the US staple/non-staple distinction. Section 271(c) of the US Patent Act 1952 requires that the means supplied are ‘especially made or especially adapted for use in an infringement’, excluding means that are ‘staple article or commodity of commerce suitable for substantial non-infringing use’. In other words, the Court mixed the provisions of US patent law with those of the EC or UK patent law. Further, in adopting the US concept that defines the type of means covered by the prohibition, the Court left out, intentionally or unintentionally, an important integer of contributory 26 27

For these differences between US law and EC or UK law see: Benyamini, s. 9.1.2. See also Art. 26(3) CPC and s. 60(6) of the UK Patents Act 1977. See Benyamini, s. 9.4.1.

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infringement in US law, as well as in UK and EC law, namely, the prohibition on an inducing supply of staple commercial products intended for use in the patented invention.28

G. Prospective problems in applying the indirect infringement prohibition The Supreme Court combined two diverging doctrines of indirect infringement: contributory infringement under US law and indirect infringement under EC and UK law. The result is a wholly new doctrine that is not similar to either of them. Every doctrine of indirect infringement, under any system of law, has been developed elaborately and methodically so as to achieve the necessary harmony between all of its integers, and the right balance between patent monopoly and free competition. Omitting one or more integers of a given system, as the Court did, is bound to detract from that harmony and balance. When dealing with indirect infringement cases in the future, trying to ascertain the true scope of the indirect infringement prohibition in Israel, the courts will not know which system of law they are supposed to follow. Instead of interpreting a statutory provision, they will have to continue the judgemade law practice initiated by the Supreme Court, unless the legislator decides to regulate the whole subject. The courts will have to decide in the future whether indirect infringement requires an actual direct infringement; whether it covers the mere offering of essential means intended and suitable for use in the invention; and whether the prohibition covers their offering or supply for an exempted use, such as permissible repairs, legitimate experiments on the invention or private non-commercial use. A decision will also be needed on the question whether an inducing supply of staples, or any means that also have a substantial non-infringing use, is prohibited when they are knowingly intended and suitable for use in the patented invention. Further, the courts will not be exempted from the need to examine other types of indirect infringement recognized in some countries, such as the making or importing of essential means intended and suitable for use in the invention, although these acts are not prohibited under US, UK and EC law.29 Since indirect infringement has not been introduced into 28 29

See Art. 26(2) CPC, s. 60(3) of the UK Patents Act 1977 and s. 271(b) of the US Patent Act 1952. Japanese patent law prohibits these acts, as indirect infringement there is limited to means exclusively suitable or especially adapted for the invention: Benyamini, s. 9.2 n. 2.

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Israeli patent law by means of a statutory conclusive provision, there is no special reason to follow just US, EC or UK law; other patent systems may also serve as a useful source of inspiration. The courts will also have to deal with cases of offering a patented process for use, which is regarded as a direct infringement under Article 25(b) of the CPC and section 60(1)(b) of UK Patents Act 1977, and a contributory infringement under section 271(b) of US Patent Act 1952.30 This type of infringement is not included in the Israeli Patents Act 1967, which only prohibits the use of a patented process, and the courts have never referred to this issue. If the courts decide that such conduct amounts to an indirect infringement, the way would be open to prohibit it on the basis of the Rav-Bariah precedent, by interpreting the term ‘element’ or ‘means’ as including intangible things like know-how. But if the courts consider this conduct as a type of direct infringement (as they should do, in my opinion), they would have to decide whether they are going to supplement the statutory definition of infringement by introducing another new prohibition, just as the Supreme Court did in the Rav-Bariah case. If they decline to do so, the result would be unreasonable: the supply of an essential element of a patented process would be prohibited according to the Rav-Bariah case as an indirect infringement, whereas the supply of the whole patented process (e.g. by selling the know-how required for its utilization or an apparatus that makes the process) would be permitted. Another important and difficult question that would require the courts’ decision is whether the making or marketing of use claim products, unassembled patented products or products capable of infringing use, should be treated as a direct or indirect infringement. Formerly, the courts had to treat such activity as a direct infringement in order to grant the patentee effective protection. But after the Rav-Bariah precedent, treating these acts as an indirect infringement has also become an option (though, in my opinion, not the preferable one).31

H. Conclusion The above-mentioned problems represent only a few examples of issues relating to indirect infringement. No one can predict how they will be dealt with by the Israeli courts in the future. Indeed, some of these issues would have required work of interpretation by the courts even with a statutory 30 31

For general discussion of this type of infringement see Benyamini, s. 7.2. See the full discussion on these issues: Benyamini, ss. 6.1.1–6.1.3.

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provision of indirect infringement. But as it has been adopted by the Supreme Court, by creating an impossible mixture of US-EC indirectcontributory infringement, legal uncertainty is much greater. This is going to affect, unfortunately, the ability of enterprises and industrialists engaged in areas relating to patents to evaluate the economic hazards involved in the development and application of new technologies. Patent lawyers are surely confronted with a formidable task of advising their clients on this subject. Furthermore, it is feared that, at the end of the day, Israel will find itself with an incomplete and disharmonious doctrine of indirect infringement, if the courts follow and derive ideas from different patent systems. An intervention by the legislator, as happened in the US and Germany, appears to be the best solution for this problem. The Israeli legislator should formulate the indirect infringement doctrine in a comprehensive manner, taking into account third parties’ right to freedom of occupation and free competition considerations, so as to clarify the principles and scope of prohibition on the one hand, and its exceptions on the other.

9 Genomics and the food industry: outlook from an intellectual property perspective joseph straus ∗

A. Introduction Whenever the impact of intellectual property rights, especially patents, on modern societies, be it developed or developing, is discussed, two topics dominate the debate: health and medicines, and the fact that the adoption of the International Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs) in 1994, will, eventually, oblige all World Trade Organization (WTO) Members to provide for patent protection for pharmaceuticals. Surprisingly, an equally important aspect of health, namely nutrition and food, and the TRIPS general obligation to patent food products, which before TRIPS in many countries had shared the fate of pharmaceuticals, i.e. had not been eligible for patent protection, is not even touched upon.1 This is the more surprising in view of the changes, which modern biotechnology brought into the food production chain, starting with improvements of the raw materials and microorganisms used in food processing and ending with new possibilities for designer products with benefits for the consumer, the farmer and the environment.2 This essay will address the impact which genomics is having on life-science-based industries, explain the specifics of the food production chain and the techniques involved, and analyze the perspectives, potentially resulting from ∗

1 2

Dr. jur. Dres. jur. h.c.; Professor of Law, Universities of Munich and Ljubljana; Marshall B. Coyne Visiting Professor of International and Comparative Law, George Washington University Law School, Washington D.C.; Managing Director, Max Planck Institut for Intellectual Property, Competition and Tax Law, Munich; Chairman, Managing Board, Munich Intellectual Property Law Center. Cf., e.g. Commission on Intellectual Property Rights (CIPR), Integrating Intellectual Property Rights and Development Policy (London, 2002) pp. 29 ff. Cf. R. D. Pridmore, D. Crouzillat, C. Walker, S. Foley, R. Zink, M.-C. Zwahlen, H. Br¨ussow, V. P´etiard, B. Mollet, ‘Genomics, Molecular Genetics and the Food Industry’ (2000) 78 Journal of Biotechnology, 251–258 at 257.

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these new technologies and the legal environment established under the TRIPS umbrella.

B. The impact of genomics Phillip A. Abelson, one of the prominent former editors of Science magazine, in an Editorial of 27 March 1998, entitled ‘A Third Technological Revolution’ expressed the following view: ‘Changes that will have effects comparable to those of the Industrial Revolution and the computer-based revolution are now beginning. The next great era, a genomics revolution is in an early phase. Thus far, the pharmaceutical potentials of genomics have been emphasized, but the greatest ultimate global impact of genomics will result from manipulation of DNA of plants. Ultimately, the world will obtain most of its food, fuel, fibre, chemical feed stocks, and some of its pharmaceuticals from genetically altered vegetation and trees. Until recently, comparatively little research has been devoted to changing plant genomes. Now, major companies including Dow Chemical, DuPont, Monsanto, Novartis, Pioneer Hi-Bred and AgrEvo are spending billions of dollars annually on genetic engineering and on acquiring stakes in genome-oriented companies. For example, DuPont has obtained a 20 per cent stake in Pioneer Hi-Bred, the major corn breeder and distributor. Calgene is now owned by Monsanto, and Mycogene is controlled by Dow.’3

Over five years later, little if any doubt can be said to exist about the accuracy of the scenario predicted by Abelson, although it has to be acknowledged that the development has not been a simple and linear one. It has been (and will continue to be) affected by a number of factors: from purely political influences to technical difficulties. The fact, however, is that genetically altered soybeans, cotton, canola, potatoes and other plants are already produced on an increasingly large scale. By the late 1990s, the United States of America had approved more than 30 genetically modified crops for commercial use.4 In 2003 the USA grew 42.8 million hectares (63 per cent of global total),5 followed by Argentina with 13.9 million hectares (21 per cent), Canada with 4.4 million hectares (6 per cent), Brazil 3 million hectares (4 per cent), China 2.8 million hectares 3 4 5

(1998) 279 Science 219. N. Williams, ‘Agricultural Biotech Faces Backlash in Europe’ (1999) 281 Science 768 ff. As compared with 1999, when some 20 million hectares were planted with transgenic plants in the entire North America (cf. C. Mann, C. Crop, ‘Scientists Seek a New Revolution’ (1999) 283 Science 310 ff at 313), this is an increase of more than 100 per cent.

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(4 per cent)6 and South Africa 0.4 million hectares (1 per cent of the global transgenic crop area). Of these six leading genetically modified (GM) crop producing countries, China and South Africa had the highest year-on-year increase with 33 per cent growth rate. In 2003, 55 per cent of the 76 million hectares of soybeans, and 11 per cent of the 140 million hectares of maize, planted globally were transgenic.7 These developments were partly preceded, partly paralleled by huge investments by industry amounting to several billions of US dollars and resulting in numerous mergers, some of them of mega-size.8 However, the forecasts that major pharmaceutical companies could merge with Dow, DuPont, Nestl´e or Archer Daniels Midland have not materialized so far.9 On the contrary, companies such as Novartis and Aventis have externalized all of their activities related to plants (pesticides, seeds and plant biotechnology).10 This may be linked to the fact that developments of transgenic plants with nutritional or pharmaceutically effective traits, which can be processed into ‘functional foods’11 and so-called ‘nutraceuticals’,12 (which are designed to supplement the human diet by increasing the intake of bioactive agents that are thought to enhance health and fitness), are still lagging behind predictions.13 Moreover, the public debate 6 7 8

9 10 11

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Up from only 2000 hectares in 1997, and 700,000 hectares in 2000 (see for details J. Huang, S. Rozelle, G. Wang, ‘Plant Biotechnology in China’ (2002) 295 Science 674 ff. All data according to Crop Biotech Update Special Edition of 14 January 2004, ‘Global Status of Commercialized Transgenic Crops: 2003’. In May 1998, Monsanto bought DeKalb and Delta & Pine Land for US$4.2 billion and related to a joint venture with Cargill; AgrEvo bought Plant Genetic Systems for US$600 million (cf. J. Enriquez, ‘Genomics and the World’s Economy’ (1998) 281 Science 925); Novartis invested US$600 million in Plant Genomics (P. Marsh, Financial Times, 22 July 1998, p. 16); cf. also R.F. Service, ‘Chemical Industry Rushes toward Greener Pastures’ (1998) 282 Science 608. In 2000, Novartis Agribusiness merged with Zeneca Agrichemicals, a former part of ICI, into Syngenta, the largest agribusiness group in the world (see for more details on these developments G. Assouline, P.-B. Joly, St. Lemari´e, ‘Plant Biotechnology and Agricultural Supply Industry Restructuring’ (2002) 4 Int. J. Biotechnology 194 ff. (Nos. 2/3, 2002)). As predicted some six years ago by J. Enriquez (1998) 281 Science 926. Cf. G. Assouline, P. B. Joly, St. Lemari´e, (2002) 4 Int. J. Biotechnology 201 (Nos. 2/3, 2002). On functional foods, cf. B. German, E. J. Schiffrin, R. Reniero, B. Mollet, A. Pfeiffer, J.-R. Neeser, ‘The Development of Functional Foods: Lessons from the Gut’ (1999) 17 TIBTECH 492 ff. (December 1999)). There is a growing industry in this rapidly growing market of by far more than US$10 billion in the US alone (cf. St. H. Zeisel, ‘Regulation of “Nutraceuticals”’ (1999) 285 Science 1853. Although the potential use of transgenic plants such as potatoes and bananas as ‘edible vaccines’ was announced some seven years ago (cf. Tacket and Arntzen (1997) 4 Nature Med. 607), no respective products have reached the markets yet. However, companies like Bayer CropScience continue their efforts in developing high-quality foods like potatoes

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and controversy concerning genetically modified organisms, primarily in Europe,14 but also in India, Brazil and the United States has made the pharmaceutical and food industry increasingly reluctant to invest in green biotechnology.15

C. Some specifics of the food industry Notwithstanding the potential of genomics, and notwithstanding the fact that ‘advanced biotechnology provides that basis for a homogenisation of the food industry in the form of bio-industrialisation of stable intermediates and their subsequent reconstruction in a wave of radical product innovation’,16 the food industry does not appear to take the same approach as the agro-chemical industry as far as patenting activities are concerned.17 Despite its size and the most remarkable capital concentration among the multinational food enterprises during the last two decades, it has been observed by experts that: ‘A sectoral breakdown of M & A operations carried out by the world’s top ranking FMNs shows that these food giants invest less in the upstream activities concerning agribusiness, seeds and animal feed. They also pay less attention to non-food activities. So we witness a withdrawal of these FMNs from industries and activities that have no direct relation with the food sector. The era of giant industrial conglomerates seems diminished and yielded to the birth of recentralized food processing firms restructured around their core business. M & A operations just like partnerships lead more and more to the food and drinks sector exhibiting a dynamic development.’18

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with improved starch properties (cf. P. Mitchel, ‘Europe responds to UK’s GM field trials’ (2003) 21 Nature Biotechnology 1418 s., Box at 1419 (December 2003)). Symptomatic was a statement made at time by German Foreign Minister Joschka Fischer: ‘Europeans do not want genetically modified food – period. It does not matter what research shows; they just do not want it and that has to be respected.’ (quoted from J. A. Moore, ‘More than a Food Fight’ (2001) (No. 4, Summer) Issues in Science and Technology 31. Cf. G. Assouline, P. B. Joly, St. Lemari´e (2002) 4 Int. J. Biotechnology 202 ss. (Nos. 2/3, 2002). J. Wilkinson, ‘The R & D Priorities of Leading Food Firms and Long Term Innovation in the Agro Food System’ (1998) 16 Int. J. Technology Management 711 ff. at 719. For patenting in agro chemical industry see, e.g., J. Enriquez (1998) 281 Science 925; R. Stone, ‘Sweeping Patents Put Biotech Companies on the War Path’ (1995) 268 Science 656. Cf. also J. H. Barton, P. Berger, ‘Patenting Agriculture’ (2001) Issues in Science and Technology 43 (No. 4, Summer 2001). S. Tozanli, ‘Capital Concentration Among the Food Multinational Enterprises and Development of the World’s Agro-Food System’ (1998) 16 Int. J. Technology Management 695 ff. at 702.

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It has further been observed that it was always unlikely that the leading actors in the final food sector would play an innovative role in the production of genetically engineered products. Rather, the pressure for radical biotechnology innovation comes from the specialized agrobiotechnology firms such as Calgene, the major agrochemicals (which have entered new food products via the sweetener and diet/health markets), such as Monsanto and DuPont, and firms based on fermentation technology, some primary processing sectors, biological intermediates producers and particularly Japanese companies where the focus on generic fermentation expertise has tended to narrow the gap between food and pharmaceuticals.19 It also worth noting that R & D activities in the food industry, which as a proportion of net sales represent 0.4 per cent as against 3.8 per cent for chemicals, or as proportion of value added, between 1 per cent and 2 per cent as against 10 per cent and 40 per cent for pharmaceuticals,20 can not be easily characterized by the indicators used to categorise dynamics. Moreover, the number of patents held by the food industry is viewed as mediocre21 which may indicate a tendency in the industry to rely on secrecy and ‘lead-time’ to protect its investments in innovation.22 Not surprisingly, many food sectors emerged as clearly dependent on supplier industry for their innovative activity – drink, fruit, and vegetable preservation, meat, sugar, animal foods and grain.23 In order adequately to understand and ultimately appraise the role genomics has started to play in the innovation of agro food, it should be recalled that food industry can be presented in a very simplified linear form as a multiphase production process. Its first phase constitutes agriculture, followed by primary processing, production of additives, processing of ingredients into final products and their distribution.24 The potential impact of genomics on respective phases of the food production process can be assumed in the following way. In the phase of agriculture: Transgenic plants and animals with new resistances, leading to more efficient and cheaper production, transgenic 19 20 21

22 23 24

J. Wilkinson, supra n. 16, at p. 719. Ibid. at p. 712. Cf. P. By´e, ‘The Food Industry: Still a Craft Industry?’ (1998) 16 Int. J. Technology Management 655 ff. at 673, 674. In fact, patent applications for food final products constitute some 1.41 per cent (1990) to 1.22 per cent (1999) of all PCT-applications (Source: PCTPAT Database). J. Wilkinson, supra n. 16, at p. 713. J. Wilkinson, ibid. See for details J. Wilkinson ibid., at p. 715.

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plants and animals with higher yields; transgenic plants with controlled mechanisms for ripening periods, transgenic plants with prolonged durability (shelf life); transgenic plants and animals with new traits, giving rise to products with new characteristics, e.g. lower cholesterol content, improved nutritional value due to the presence of specific vitamins,25 minerals, etc., and/or specific pharmaceutically active, taste appealing, etc. components. In the phase of primary processing: Use of products of transgenic plants or animals with traits optimizing the exploitation of processing technology, by prolonged durability, adapted size, consistency of material to be processed, e.g. fruits, leaves, etc.; use of genetically modified microorganisms in processing (fermentation) technologies; use of DNA information of human, microbial, plant or animal origin for the discovery and production of valuable new additives and ingredients involved or for reduction or removal of harmful ingredients. In the phase of final products: ‘Functional foods’ and ‘nutraceuticals’ owing their characteristics to specific genetic information introduced either in plants or animals whose products were processed or into additives and other ingredients involved.26 The role of genomics in the agro food system should be apparent even from this very incomplete and simplified description of the food production process. Science-based R & D activities are already important for the food industry, but with genomics that importance is sure to increase, while simultaneously the focus of such activity is likely to shift from one phase to another. Genomics is also likely to lead to further diversification of respective industries and an ever increasing number of collaborations.27 25

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The best known example being the ‘Golden Rice’ (cf. T. Gura, ‘New Genes Boost Rice Nutrients’ (1999) 285 Science 994 ff.; M. L. Guerinot, ‘The Green Revolution Strikes Gold’ (2000) 287 Science 242 ff.; and I. Potrykus, ‘The “Golden Rice” Tale’, posted at Ag Bio View, archived at: http://agbioview.listbot.com, 23 October 2000). Cf. for more details D. DellaPenna, ‘Nutritional Genomics: Manipulating Plant Micronutrients to Improve Human Health’ (1999) 285 Science 375 ff.; B. Mazur, E. Krebbers, Sc. Tingey, ‘Gene Discovery and Product Development for Grain Quality Traits’ (1999) 285 Science 372 ff.; R. D. Pridmore, D. Crouzillat, C. Walker, S. Foley, R. Zink, M.-C. Zwahlen, H. Br¨ussow, V. P´etiard, B. Mollet, B., ‘Genomics, Molecular Genetics and the Food Industry’ (2000) 78 Journal of Biotechnology 251 ff., who exemplify this on Cacao tree genomics (improvements of raw material), Lactobacillus johnsonii La1 (improvements of industrial fermentation and processing), and the bacterium Streptococcus thermophilus (improvements in the production of yoghurt, mozzarella and hard-cooked cheeses). In this respect reference should be made only to P. Brabanti, A. Gambardella, L. Orsenigo, ‘The Evolution of Collaborative Relationship Among Firms in Biotechnology’ (1999) 1 Int. J. Biotechnology 10 ff.; P.-J. Joly, ‘Innovating Through Networks: A Case Study in

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For the world to master its food problems, advances in food production seem imperative, although in Europe with its overproduction of food the needs of developing countries for increased food production and for food with improved nutritional content, which can be generated only by using modern biotechnology,28 seem simply to be ignored.29 The fact, however, is that if the world’s population continues to grow as predicted for the next twenty years, global cereal yield must increase 80 per cent over the 1990 average to feed these additional people.30 It equally should be apparent that the number of intellectual property rights involved in the food production process has already multiplied and will come to take on an entirely new significance for all involved.31

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Plant Biotechnology’ (1999) 1 Int. J. Biotechnology 67 ff.; L. K. Mytelka, ‘New Trends in Biotechnology Networking’ (1999) 1 Int. J. Biotechnology 30 ff. S. L. Boyd, W. A. Kerr, N. Perdikis, ‘Agricultural Biotechnology Innovations versus Intellectual Property Rights – Are Developing Countries at the Mercy of Multinationals?’ (March 2003) 6 The Journal of World Intellectual Property 211 ff., at 211, observe in this regard: ‘Existing resources will prove inadequate as will current farming practices. To increase the current level of production will require substantial changes to farming methods and, in particular, crop yields. Exploiting more extensive methods to embrace marginal land is unlikely to meet projected needs. Not only will marginal land not yield the output necessary, but following this path is likely to have wide-reaching detrimental effects on the environment through the use of pesticides, depletion of water resources and destabilization of fragile land.’ Genetically modified food (GM food), in particular in Europe has been faced with strong opposition by large parts of the public. According to empirical data provided by Professor Thomas Hoban of North Carolina State University, 72 per cent of US consumers support agricultural biotechnology and only 14 per cent regard genetic modification as a serious risk in food products. The figure in the latter respect being in Sweden 65 per cent, in Austria 60 per cent, in Germany 50 per cent and in the United Kingdom 35 per cent (cf. T. Ayers, ‘A Tomato by Any Other Name? U.S. and EC Grapple with Labeling’ (1998) 281 Science 714, 715). Since then, the European situation has experienced little change. However, a study published in December 2003 by KGC Research revealed that the percentage of those who refuse to buy genetically modified products fell from 61 per cent to 48 per cent – in a sample of 3,500 interviewed (cf. The Report EU-Verbraucher unentschieden, transcript 1-2/2004). Cf. P. Ronald, H. Leung, ‘The Most Precious Things are not Jade and Pearls . . .’ (2002) 296 Science 58 ff.; cf. also I. Serageldin, ‘World Poverty and Hunger – The Challenge for Science’ (2002) 296 Science 54 ff.; same, ‘Biotechnology and Food Security in the 21st Century’ (1999) 285 Science 387 ff., and T. Acharya, A. S. Daar, P. A. Singer, ‘Biotechnology and the UN’s Millennium Development Goals’ (2003) (Dec.) 21 Nature Biotechnology 1434 ff. PCT-applications statistics, which relate to food final products, and which according to PCTPAT database reveal for 1990, 292 applications or 1.41 per cent of all PCT-applications and for 1999, 1.039 applications (or 1.22 per cent of total), may not be representative, since they do not cover all the biological tools involved in different stages of food production, such as genes, microorganisms, enzymes, etc. It should be added, however, that even more sophisticated statistics, for instance structured either by industry of manufacture (IOM),

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D. Genomics and patenting In order to avoid any misunderstanding, it should be made clear from the outset, that this essay is rather narrowly focused on implications which patents have or may have for the food industry in the light of the new technologies, especially recombinant DNA technology, involved in the food production chain, on the one hand, and the changed international legal environment in the area of intellectual property, on the other. Although the specific implications for developing countries are not ignored, they are touched upon only in this limited context and only to the extent necessary. When considering the role of intellectual property rights for the food industry, a critical development was the adoption of the TRIPs Agreement, which entered into force on 1 January 1995. Under Article 27(1) TRIPs, Members of the World Trade Organization (WTO) are obliged to make patents available for any inventions, whether products or processes, in all fields of technology, provided they meet the usual patentability requirements, i.e. are new, involve an inventive step (are non-obvious) and are capable of industrial application (useful), as well as sufficiently disclosed in the patent application (Article 29(1)). Although WTO Members are allowed to exclude from patentability certain categories of inventions, and developing countries, countries in transition to market economy and least developed countries were offered transition periods of five or eleven years, respectively, to comply with all patent protection related obligations (Articles 65–66),32 the room for manœuvre under TRIPs has been substantially narrowed. An invention may be excluded from patentability on the basis that the prevention of its commercial exploitation is necessary to protect ordre public or morality in the territory of a Member, including to protect human, animal or plant life or health or to avoid serious prejudices to the environment. However, such an exclusion may not be made merely because the exploitation of

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or sector of use (SOU), also do not offer entirely reliable information and actually do not substantially deviate from those of the PCT database. According to A. Zohrabyan, R. E. Evenson, ‘Biotechnology Inventions: Patent Data Evidence’, in V. Santariello, R. E. Evenson, D. Zilberman, G. A. Carlson, Agriculture and Intellectual Property Rights (2000), pp. 197 ff., Tables 12.2 and 12.3 at pp. 202, 203, of US biotechnology patents granted for 1976–1998, 1.1–1.2 per cent were for food, in total numbers, in 1990, some 38, in 1998–1999, some 443, which demonstrates a remarkable increase, but at a very low level. On 27 June 2002, the WTO Intellectual Property Council announced that least-developed countries’ transition period for the full protection of pharmaceuticals would be extended from 2006 until 2016. No extension of that sort was adopted for any other type of inventions. Cf. also S. L. Boyd, W. A. Kerr, N. Perdikis, supra n. 28.

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that invention is prohibited by the law of a Member. Consequently, whenever the commercial exploitation of an invention in question is allowed in a Member, that invention cannot be excluded from patentability under Article 27(2) TRIPs. Moreover, Members may also exclude from patentability plants and animals and essentially biological processes for their production. However, they have to grant patents for microorganisms, as well as non-biological and micro-biological processes, including those for the production of plants or animals.33 Also, plant varieties must be offered protection either by patents or an effective sui generis system or by any combination of both (Article 27(3)(b) TRIPs). Thus, under the TRIPs Agreement WTO Members have to secure patent protection not only for modern genetic engineering techniques, including for the production of animals and plants,34 but also for biological material including micro-organisms.35 Although no definition of either the notion ‘technology’ or that of ‘invention’ is contained in the TRIPs Agreement, and in particular the subtle distinction between patentable inventions and unpatentable discoveries is not defined, this does not, in principle, throw any doubt upon the patentability of naturally occurring biological material, such as DNA, viruses, plasmids, cell lines, etc. For, if micro-organisms are declared to be mandatory subject matter eligible for patent protection under Article 27(3)(b) TRIPs, naturally occurring biochemical substances, such as sequences of nucleotides (DNA),36 per argumentum a maiore ad minus 33

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Since under Art. 28(1)(b) TRIPs process patents cover at least the product obtained directly by the patented process, plants and animals obtained by patented non-biological (e.g. rDNA, microinjection, etc.) or micro-biological processes, are also covered by those patents. Cf. for more, J. Straus, ‘Implications of the TRIPS Agreement in the Field of Patent Law’, in F.-K. Beier, G. Schricker, From GATT to TRIPS (Weinheim, 1996), pp. 160 ff., at 185; C. M. Correa, ‘The GATT Agreement on Trade Related Aspects of Intellectual Property Rights’ [1994] EIPR 327 at 328. Cf. J. Straus, Genpatente – Rechtliche, ethische, wissenschafts- und entwicklungspolitische Fragen (Basel and Frankfurt/Main, 1997), pp. 56 ff. The very multilayered problem of patentability of genes of whatever origin cannot be discussed here in any detail. It should suffice to note that DNA-sequences, despite their double nature, on the one hand, the physical carrier of information – the molecule – on the other hand, the information itself, have been and are treated as biochemical substances by virtually all courts and patent offices. In the controversial debates emphasizing that in case of genes pure information is at hand, it is overlooked that whenever DNA is used in practice, be it as diagnostic marker, be it for protein expression, etc., it is always used as biochemical substance, i.e. the molecule. It also should be recalled that the nucleotides themselves represent complex chemical structures and therefore there is no substantial difference to be seen between a ‘normal’ chemical formula and the DNA sequence. The main

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are also to be regarded subject matter for which patent protection must be available under the TRIPs Agreement. Thus, information embodied in genetic resources can be excluded from patent protection only if their commercial exploitation is not allowed in that Member (Article 27(2)). The fact that the TRIPs Agreement does not define the notion of ‘invention’ should not be taken to imply that WTO Members, no matter whether developed or developing countries, are permitted to exclude materials pre-existing in nature from patentability.37 Those countries which have chosen such an approach are not only failing to comply with TRIPs principles,38 but also appear to be economically ill advised, particularly with respect to agricultural biotechnology. Since local chemical prospecting, breeding and field trial activities are indispensable for research and development,39 as long as no adequate protection is offered, companies, especially multinationals will be under-investing in crops in those countries.

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difference is that the sequence represents a much more complex chemical structure (see for details J. Straus, 2004, ‘Optionen bei der Umsetzung der Richtlinie EG 98/44 u¨ ber den rechtlichen Schutz biotechnologischer Erfindungen, Berne, No. 12.4.1 with further references). By this statement, however, nothing is said about what exactly constitutes the invention in a given case, i.e. providing the substance, the DNA, which was previously not available, or finding one or more functions or uses of that sequence, and the scope of protection of such patents (see for more details J. Straus, ‘An Updating Concerning the Protection of Biotechnological Inventions Including the Scope of Patents for Genes’, (2003) OJ EPO, Special Edition No. 2, 166 ff., 170 ff.). As advocated by C. Correa, ‘Implementing the TRIPs Agreement in the Patent Field – Options for Developing Countries’ (1998) 1 Journal of World Intellectual Property, 75 at 79; and by the study of the Secretariat of the United Nations Conference on Trade and Development (UNCTAD) (prepared with the assistance of C. Correa, K. Maskus, J. Reichman, H. Ullrich), The TRIPs Agreement and Developing Countries (Geneva 1996), No. 145 at p. 34, where it is explained that due to the fact that the TRIPs Agreement does not contain a definition of ‘invention’, domestic legislation may exclude the protection of ‘substances found in nature’, including cells and subcellular components (such as genes). Contra J. Straus, Roundtable Discussion, in T. Cottier, P. C. Mavroidis, Intellectual Property: Trade, Competition, and Sustainable Development (Ann Arbor, 2002) pp. 532 ff. Such patentability exclusions are provided for e.g. in Art. 6(b) of Decision 344 of the Andean Group, which stipulates that substances already existing in nature and their replications are not an ‘invention’. Similarly, Art. 6(g) of Argentine patent law for ‘any kind of life material or substances already existing in nature’. One should, however, not underestimate the impact of patent protection on indigenous research activity, which should always be the primary focus. For instance, the first patent issued in Egypt for biotechnology and molecular biology related products was for a Bacillus thuringiensis strain indigenous to Egypt and was granted to scientists from the Agricultural Genetic Engineering Research Institute (AGERI), Giza (cf. A. El-.Azab, ‘Egyptian Intellectual Property Rights and Their Relation to the General Agreement on Tariffs and Trade (GATT)’, in F. H. Erbisch and K. M. Maredia (eds.), Intellectual Property Rights in Agricultural Biotechnology (Oxford, New York, 1998) pp. 65 ff., at 71.

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For instance, absence of patent protection will cause under-investment in crops suitable for tropical climates by holding back the complete development of such crops, or will continue to focus investment on commercially valuable crops suited to developed countries.40 Bearing in mind all the specific phases of the food production process, it seems clear that under the TRIPs Agreement, WTO Members have to provide patent protection, and/or plant variety protection respectively, for all genomic inventions involved in that process at its different stages and their resulting end products including final foods. This has not only farreaching consequences for those 35 countries which under old intellectual property regime did not provide for patent protection for food products,41 but also for the internationally active, as well as local food industry: on the one hand, this industry is now able, except in the least developed countries until 2006, to acquire patents in all WTO Members for food products and the technologies involved in their production at all stages, but, on the other hand, it will also be faced with patents of competitors and specialized biotechnology companies, as well as academic institutions, which are active in the area of genomics.

E. Outlook At the present stage of development one has to observe that the importance of patents for food production very much depends on the respective phase of the food production chain and the players involved. As far as the phase of agriculture is involved, where a small number of large agrichemical companies, such as Bayer CropScience, Dow Chemical, DuPont, Monsanto, and Syngenta dominate the world markets and control a substantial part of agricultural patent portfolio,42 patenting activity is high and highly visible, although mainly focused on inventions related to transgenic plants disposing of different resistances, such as against 40

41 42

See S. Boyd, W. A. Kerr, N. Perdikis, supra n. 28, at p. 229. Thus, not surprisingly, from South Africa, where patents have been granted for various biotechnological inventions, including genetically modified micro-organisms, plants and animals, numerous local plant biotechnology projects involving international partnerships have been reported, for instance, in soybeans, canola, maize, tomatoes, sunflowers and sorghum (cf. R. A. Wolson, ‘Report on South Africa’, in F. H. Erbisch and K. M. Maredia (eds.), Intellectual Property Rights in Agricultural Biotechnology (Oxford University Press 1998), pp. 73 at 78 ff., and Table 6.3 at 87. Cf. J. Straus, Implications of the TRIPS Agreement in the Field of Patent Law (1996), p. 174, with further references. See J. H. Barton, P. Berger, (No. 4, Summer 2001) Issues in Science and Technology 46.

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herbicides or pesticides.43 Despite the enormous concentration of the industry involved, there is a fierce competition in the market, which led to a number of extremely costly patent controversies. These controversies partly resulted from the fact that researchers of the competing companies worked in parallel on the same problems and had also close ties to some, sometimes the same, academic researchers with a different understanding of handling and communicating research results.44 Despite the remarkable spread of transgenic plants around the world reported at the outset, the resistance of large parts of the public in different regions of the world, and in particular in Europe, has seriously affected the operations of agribusiness and led to, at least a temporary, decrease of research efforts.45 Most deplorable, however, are the results of that resistance in Europe, where basic technology of gene transfer into plants using the Agrobacterium thumaefaciems technology was originally developed by Jozef Schell and Marc van Montague, but where numerous promising field trials ended in 1999 in a Moratorium.46 Since Europe is now about to lift the Moratorium and to open up the market for transgenic plants and allow planting transgenic seeds, Member States of the European Union will become a market for transgenics, developed and produced elsewhere. Less visible are patenting activities in the phase of primary processing and in the phase of final products, where the problems of labelling of genetically modified products, which is not to be addressed here, is an obvious one. At least for the time being, the large multinational food producing companies seemingly decided to slow down their research activities in these areas and to avoid any public appearance which could associate them with genetically altered food. Since patents are closely watched by some parts of the public and easily lead to negative headlines in the newspapers, 43

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The already mentioned ‘Biscuit’ European Patent of Monsanto, however, relates to softmilling wheat producing flour with favourable baking properties (cf. EPO Press Release of 27 January 2004). The background of the first pioneering research work in plant genetics and its implications for the involved companies is reported in D. Charles, Lords of the Harvest (Cambridge, Mass, 2001). Cf. J. H. Barton, P. Berger, (No. 4, Summer 2001) Issues in Science and Technology 46. Companies which had heavily invested in seed and other agribusiness had to experience serious financial problems (cf. J. Enriquez, R. A. Goldberg, ‘Transforming Life, Transforming Business: The Life-Science Revolution’ (March–April 2000) Harvard Business Review 96 ff., at 101. Cf. J. Straus, ‘The Need to Protect Intellectual Property in Plant Science’, in P. Haines, 2003 Syngenta Lectures, Almere, pp. 34 ff.

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companies apparently also have further reduced their patenting activities, at least in Europe. Given the undeniable potential of genomics for food production and the equally undeniable need for more and better food in large regions of the world, these developments cannot last for long, or if they do, the harm might become irreparable. It should go without saying that research efforts in this area should not be slowed down but be accelerated, not least to improve the safety of the entire technology and overcome the obstacles to the production of functional foods and nutraceuticals which are genuinely attractive to consumers. In turn, this could help to reduce the increasingly unaffordable cost of our healthcare systems. The relative inactivity and low propensity towards patenting on the part of large multinational food companies, which instead rely on their market power, may, on the other hand, present an opportunity for innovative biotech companies and research institutions outside the industry. They could clearly step into the niches, which exist due to the hesitations of the large industries and by acquiring intellectual property rights, now available in all WTO Members, they could clearly improve their competitive position and market value and at the same time contribute to the badly needed innovations. Bearing in mind the example of Egypt, and also in view of the remarkable success of Cuban researchers in biotechnology,47 it should equally go without saying that there are around the world a number of groups, which could compete successfully in this area and which could contribute positively in the fight against famine and malnutrition. One should not underestimate the potential which intellectual property rights offer as an incentive in this respect. With the benefit of hindsight we can see that the obligation under the TRIPs Agreement to provide for patent protection for food products has neither had particularly positive nor particularly negative effects. While this might previously have been tolerable because of the limited potential of the technologies then existing, at present this means under exploiting an important instrument of economic policy to the disadvantage of those in need of more and better food. It is up to our legislators to provide an environment in which genomics and patents can produce optimal results to the benefit of the public at large. 47

Cuban scientists have developed and patented the only vaccine effective against Meningitis B, and the USA lifted the importation ban for that product! (Cf. P. A. Singer, A. S. Daar, ‘Harnessing Genomics and Biotechnology to Improve Global Health Equity’ (2001) 294 Science 87 ff.).

10 From ‘outmoded impediment’ to global player: the evolution of plant variety rights margaret llewelyn ∗

A. Introduction In the second edition of his textbook, Intellectual Property, Cornish described plant variety rights as an ‘outmoded impediment’1 which obstructed the ‘logical framework of protection’, namely the use of patents for the protection of plant material. Cornish also remarked that it was equally true to call the exclusion of plant varieties from patent protection an ‘outmoded impediment’ and this view reflected a mood2 in European patent circles that the exclusion, which many national patent laws contain, was an anachronism. The right had been introduced to serve a specific purpose in the 1960s, but now was thought to impose ‘unwarranted barriers against some of those who invest in biotechnical and agricultural research and wish to have patents for their successful results’.3 Retaining the exclusion, Cornish predicted, would result in ‘the EPC provision [being] progressively pared down by interpretation’.4 In light of these views he cautioned, in a footnote, that those then engaged in a revision of the International Convention for the Protection of New Plant Varieties ∗ 1

2

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Reader in Intellectual Property Law, University of Sheffield. W. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (2nd ed., 1989), p. 148, paras. 5-055. For an alternative perspective from 1989, see M. Llewelyn ‘Future Prospects for Plant Breeders’ Rights Within the European Community’ [1989] 9 E.I.P.R. 303. F. Beier, S. Crespi and J. Straus, Biotechnology and Patent Protection: An International Review, OECD, 1985. Bent, Conlin, Jeffrey, and Schwaab called it a ‘bifurcation’ of variety protection rights ‘to the detriment’ of patent protection for plants in Intellectual Property Rights in Biotechnology Worldwide (Macmillan Publishing, 1987), whilst Straus called it ‘a sacrifice on the altar of European patent law unification’: ‘Genetic Engineering and Industrial Property’ (1986) 11 Industrial Property 454. Supra n. 1. Ibid.

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(UPOV) ‘ought to consider whether the regime has a viable future’.5 This appears to be a thinly veiled criticism of plant variety rights in general and, the so-called ‘dual protection prohibition’, contained in Article 2(1) of the UPOV Convention 1978, in particular. It is this latter (which the original 1961 UPOV Act also contained) which is regarded by some as the cause of the exclusion of plant varieties from patent protection.6 As Cornish correctly points out, by the late 1980s there was a growing recognition of the economic potential of the plant bioscience industry. This recognition meant that the question of how to protect new plant innovations took on a far higher legal and political profile than had previously been the case (with the discussions on patentability attracting wide attention whilst those involving plant variety rights went comparatively unnoticed). At the European level, the question was raised in the context of: (a) a possible revision of the European Patent Convention (EPC); (b) the proposed EU Directive on the patenting of living material;7 and (c) whether there should be a Community plant variety rights system.8 Such discussions taking place against the background of an evolving patent law jurisprudence which rapidly saw protection extend to all aspects of a plant, other than a variety per se. At the international level, the issue was raised as part of the negotiations which lead to the creation of the World Trade Organisation and its Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPs), and to the revision of the International Convention on the Protection of New Plant Varieties (UPOV). A constant theme throughout these discussions was for the removal of the exclusion on patenting plant varieties and the full force of patent protection to be available to plant innovators. Lying behind many of the pro-patenting views expressed, was the expectation that the removal of the bar to patent protection would result in the inevitable demise of plant variety rights. The thinking was that the right only survived in the absence of any choice, once that choice was provided then the patent system would prevail and plant variety rights would fall into disuse. The last decade, in particular, has given lie to this expectation. Not only does the exclusion in patent law remain, (whilst the dual protection prohibition has been removed), but the place of plant variety rights within the global industrial property family, for developed as 5 6 7 8

Ibid. n. 37. See supra at n. 2. Eventually Directive 98/44/EC. Eventually EC Regulation 2100/94.

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well as developing countries, has been both affirmed and secured through the debates surrounding Article 27(3)(b) of TRIPs. In achieving this the plant variety rights system has removed its own internal ‘impediments’ to the patenting of plant varieties whilst, in contrast, the hoped for radical rethink of the patent law exclusions has failed to materialise. This paper will discuss how, despite the predictions that the plant variety rights system had outlived its usefulness, the right has proved itself ‘viable’. In so doing, it will also ask whether the revisions made to the right ensure that it still performs its primary function, (providing appropriate and effective protection for the European plant breeding industry) or if its new guise has produced a different form of ‘impediment’?

B. An ‘outmoded’ right? The evolution of plant variety rights post 1991 Two explanations can be put forward why the plant variety rights system can no longer be regarded as ‘outmoded’. The first can be attributed to the substantive amendments made to the right itself. The second lies in a change in the way in which the right is perceived.

1. Substantive adjustments – strengthening the right The two most significant developments to take place in European plant variety rights protection post-1989 are the revision of the UPOV Convention in 1991 and the introduction of the Community Plant Variety Rights Regulation in 1994. The former requires member states to make certain substantive amendments to their national plant variety rights and provides them with opportunities to further strengthen that national provision if they should wish. The Community Regulation provides an example of how that opportunity to further strengthen the right has been taken. In order to explain how the right has been strengthened it is necessary to compare the two relevant UPOV Acts.9 The first is the 1978 Act, which was in force at the time Cornish wrote his second edition. The second is the 1991 Act, which was adopted shortly afterwards. 9

The comparison of both Acts has practical value as both Acts are currently in force. Many developing countries, when faced with the obligation set down in Article 27(3)(b) TRIPs to provide protection for plant varieties by either patents and/or a sui generis right, felt unable to sign up to the 1991 Act for both administrative and conceptual reasons. The UPOV Union, therefore, kept the 1978 Act open for ratification by non-UPOV member states.

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(a) The Acts in outline Of the changes probably the most important from the perspective of ensuring the survival of plant variety rights, within the developed world at least, are the following.10 (i) Dual protection Article 2(1) of the 1978 Act prohibits the provision of both a patent or a right in accordance with the UPOV Convention for the same genus or species, the so-called ‘dual protection prohibition’. The 1991 Act does not contain this prohibition. This will be discussed in Part C. (ii) Protectable subject matter The 1978 Act does not contain a definition of a plant variety and merely stipulates that the right will be granted over varieties which are shown to be distinct, uniform, stable and commercially new. Whilst the 1991 Act contains the same criteria, it has reintroduced the definition of a plant variety. A plant variety is defined as any plant grouping within a single botanical taxon of the lowest known rank which, irrespective of whether the conditions for a grant of a plant variety right are fully met, is new, distinct, uniform and stable. The fact that the grouping can be identified as a plant variety irrespective of whether or not it meets the conditions for grant takes account of varieties with a level of uniformity which is acceptable to industry, but not acceptable for a grant of rights. It also allows granting offices to take these ‘varieties’, which are usually not uniform or stable, into account when assessing distinctness and novelty. The manner of producing the variety is irrelevant. The right is available over varieties bred using essentially biological processes, such as natural selection, as well as over those bred using cutting-edge biotechniques. In theory, the reintroduction of a definition of a plant variety means that there is a concrete notion which can be used to define that which is protectable by plant variety rights and that which is excluded under patent law. There are, however, problems with the definition used. The first is that it conceives of the existence of varieties which are not protectable under plant variety rights. This raises the question of what is excluded under patent law, plant varieties in general or only plant varieties protectable 10

For a more detailed discussion, see M. Llewelyn and M. Adcock, European Plant Intellectual Property (Hart Publishing, 2004), ch. 2 and G. Dutfield, Intellectual Property Rights and the Life Science Industries (Ashgate, 2003).

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under plant varieties?11 The second is that the right once granted does not merely encompass the plant grouping so defined but extends to the constituent elements of the variety (which includes the individual genes which give rise to the distinct, uniform and stable characteristics). The problem with this is that the term appears intended to refer to those elements of a plant which are capable of producing and reproducing the distinct, uniform and stable characteristics which, when replicated within a plant grouping, create the variety. This means that ‘if a single plant cell were capable of producing an entire plant, a grouping of such plant cells would be treated in the Regulation as “variety constituents”’.12 If this is an accurate interpretation of the term then arguably both patent and plant variety rights protection could be available for the same material. Indeed, there is also the potential for conflict between the two systems as clearly the granting of a patent over a single plant cell capable of producing an entire plant could be regarded as a granting over a variety constituent which is protected under plant variety rights. Finally, the right can extend to material derived from harvested material (for example such products as essential oils or medicinal products) although it should be noted this is, at present, only an option which has not been exercised. (iii) Protectable species and genera The 1978 Act requires member states progressively to extend protection to more species and genera. In contrast, the 1991 Act requires member states to provide protection in respect of all species and genera within five years of joining. The extension of the right to varieties from all genera and species is important when looked at in the context of plant intellectual property in general. As previously mentioned, the effect is that all aspects of plant material can now be the subject of a plant intellectual property right. Plant varieties from any genus or species being protectable under plant variety rights and all other aspects of the plant, from genes to species, protectable by a patent. (iv) Extent of the right Both Acts allow the holder to sell, or offer for sale, reproductive material of the protected variety. Central to the right granted under the 1978 Act was that it prohibited use of the protected material for the purposes of commercial marketing. As the presumption 11

12

The EU Directive makes it clear that ‘plant variety’ is defined by reference to the Community plant variety rights system but it does not say if the exclusion is confined to only those plant varieties protectable under plant variety rights. P.A.C.E. van der Kooij, Introduction to the EC Regulation on Plant Variety (Aspen Publishers, 1997) at p. 13.

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lying behind the right was that any non-commercial marketing use, such as retaining seed from one year to the next for further resowing, would not be an infringing act any non-commercial marketing use derogations did not have to be specifically permitted. In contrast, the right granted under the 1991 Act is not confined to commercial uses. As there is no longer a presumption of a right to non-commercial marketing use, the 1991 Act clearly spells out the derogations. (v) Derogations from the right Under both Acts the right granted to the breeder does not extend to the use of material for research purposes (or to the products of that research) nor does it extend to use in commercial breeding programmes. However, the 1991 Act states that where the research results in a variety which is ‘essentially derived’ from the protected variety then the protection will extend to the essentially derived plants as well. It is not entirely clear how the term ‘essentially derived’ is to be interpreted and it is likely that this will be left to the courts to determine, which could give rise to vagaries of interpretation. The introduction of the notion of an essentially derived variety ensures that breeders are not able to use protected varieties to develop a ‘new’ variety which is cosmetically different and then claim that the two are different. Where it is held that the second variety is essentially derived13 from the former, then the holder of the initial plant variety right will be able to prevent the second breeder from using the second variety without his consent. Despite widening the scope of the right granted, the 1991 Act also reflects a need to protect other societal interests and it does not remove the possibility of permitting farmers to retain harvested material from one year to the next – the so-called ‘farm saved seed’. Article 15(2) contains an optional exclusion. It permits member states ‘within reasonable limits’ and ‘safeguarding the legitimate interests of the breeder’ to ‘restrict the breeder’s right . . . in order to permit farmers to use for propagating purposes, on their own holdings, the protected variety’ or a variety covered by the essentially derived variety provisions. The requirement that the use must be on their own holdings indicates that it must not be a commercial use. It is widely understood that any exercise of this provision should 13

Article 13(6) of the EC Regulation states that a variety is essentially derived if: (a) it is predominantly derived from the initial variety or if it has been derived from another variety which is predominantly derived from the initial variety; (b) it is distinct in accordance with the provision relating to distinctness (Art. 7); and (c) notwithstanding that it accords with the requirement under Art. 7, it nonetheless conforms to the initial variety in its essential characteristics.

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not extend beyond that which was permitted under the 1978 Act. In the EU this restriction has been adopted in Community plant variety rights system. Small farmers are permitted to save seed from one year to the next without additional payment but all other farmers must pay an ‘equitable remuneration sensibly lower than the original price’ (Article 14).14 At the global level there is a view, incorrectly based, that Article 15 means that all member states of UPOV automatically have to stop permitting farmers to retain seed from one year to the next without requiring an additional payment to the right-holder. This is incorrect. The Article only has this effect if a member state chooses to include it in its national legislation. If they do not, then farmers remain free to resow harvested material from the protected variety. As can be seen, there have been significant adjustments in the form of the right provided. Although there remain some who continue to question the need for two forms of protection,15 these changes have, to a considerable extent, silenced many of those who felt the right did not meet the needs of the modern bioscience industry. These substantive developments have done much to modernise the right ensuring its survival, but they are not the only changes which have taken place. An additional, unremarked, development has been a change in the image of plant variety rights.

2. Re-inventing plant variety rights – a change of image16 An examination of the literature surrounding plant variety rights has seen an evolution of the right from being a sector specific right, serving a particular agricultural function, to an internationally recognised property 14

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The EC Regulation exercises this option and Art. 14 contains a three-tiered farm saved seed structure. The first tier comprises those plant varieties which may not be resown without a second full payment being made to the plant breeder; these varieties are all those which do not appear on the list making up the second tier. The second tier states that varieties within certain designated species may be resown but only upon the payment of an equitable remuneration sensibly lower than that originally paid. The third tier consists of those farmers who fall within the EU classification of ‘small farmer’, and who do not grow more than 92 tonnes of cereals on their farm. Only this group is exempt from paying any further royalty. See T. Cook, Plant Variety Rights: An Outmoded Impediment? (Intellectual Property Institute, 1998) and J. Straus, Patenting of Life-Forms – the European Experience and Perspectives in T. Cottier and P. C. Mavroidis (eds.), Intellectual Property: Trade, Competition and Sustainable Development, World Trade Forum Vol. 3 (University of Michigan Press, 2002) at p. 341. See M. Llewelyn and M. Adcock, supra n. 10 and G. Dutfield, Intellectual Property Rights, Trade and Biodiversity (Earthscan, 2000) and also supra at n. 10.

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right. In its new guise it is regarded as a vital part of the intellectual property arsenal of most international organisations engaged in bioscience. Two factors have been instrumental in achieving this status. The first is the re-stylisation of plant breeders’ rights as plant variety rights. The second has been the absorption of plant variety rights within the industrial property family.

(a) Breeders’ right or variety right? Over the years there has been a gradual shift from an interchangeable use of either the term plant breeders’17 or plant variety right to the use of one in preference over the other. In recent years, the former has effectively ceased in usage (in developed countries at least, with Australia and Canada being the notable exception). The significance of this change lies in understanding what the right was introduced to do. As will be discussed in more detail below, the primary reason for introducing plant variety rights was the need to encourage scientists to engage in the research necessary to produce a new plant variety. Prior to the introduction of modern plant breeding techniques, it could take between ten and fifteen years to breed a new variety which would contain the desired traits, such as winterhardiness, and be unlikely to mutate or sport following repeated propagation. Once produced, a non-F1 hybrid variety was (and is) relatively easy to reproduce. As the economic importance of the agricultural industry grew, so too did the calls for the results of plant breeding programmes to be protected in the same way as the results of other types of scientific research.18 For a number of reasons the patent system was not seen as conducive to either promoting the research or recognising the type of scientific endeavour involved,19 and the decision was taken to introduce a right specifically designed with the needs of an individual sector in mind. 17

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For example, the UK report, which led to the introduction of the Plant Varieties and Seeds Act 1964, was entitled Plant Breeders’ Rights, Report of the Committee on Transactions in Seeds, Cmnd. 1092, HMSO 1960. See ‘International Conference for the Protection of New Plant Products’ [1961] Industrial Property Quarterly 104; ‘International Conference for the Protection of New Plant Products’ [1962] Industrial Property Quarterly 5; B. Laclavi`ere, ‘The Convention of Paris of December 2, 1961 for the Protection of new Varieties of Plants and the International Union for the Protection of New Varieties of Plants’ [1965] Industrial Property Quarterly 224. The arguments put forward were that it would be difficult to demonstrate that either plant material or plant breeding practices were novel or inventive and whilst the results were of industrial application, it would not be in the public interest to allow a patent. It was also accepted that it would be difficult for plant material to meet the disclosure requirement.

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The decision to introduce a limited monopoly right over agricultural crops was not universally approved, even within the plant breeding industry itself. Many breeders felt that plant material should be freely available to those who could make use of it for the development of other socially valuable crops.20 The persuasive justification for the right was to secure and promote a nationally important industry and not merely to provide rights over plant material. The introduction of the system of a sui generis system protection was, therefore, intended to underline that what was being rewarded was the time and effort put in by breeders to produce valuable new crops. A key factor in the decision to introduce this right was that during the 1940s and 1950s there was an increased recognition of the social and economic value of the agricultural industries and this industrial importance, which included recognising the value of the work of the breeders who provided the basic material for use by farmers, had to be protected. The rationale for the right was, very specifically, to recognise and reward the investment put into the production of new plant varieties by a specific category of scientists – hence it was referred to as a breeders’ right. The determination of a form of protection suitable for the type of material concerned was, it is argued, a secondary consideration which naturally followed from the need to foster a specific, nationally important, sector. The fact that at this time the majority of plant breeding activity took place within the public sector is also relevant to this argument. As the property, and market, value of plant material increased so has the emphasis on the provision of a right for breeders decreased correspondingly. In addition, the growth in private plant breeding operations (not to mention the increased plant breeding activity of multi-national companies) has meant that it is less easy to categorise the right as being for the benefit of a discrete industry. What appears to be happening is an increasing emphasis on providing protection for the thing bred – in 20

For example, in 1952 Sir George Stapleton, founder of the Welsh Plant Breeding Station, wrote to the then director, Professor E. T. Jones: ‘. . . no breeder ever has had or ever can have any sort of monopoly of his product.’ Professor Jones replied with equal caution: ‘I am fully aware that a breeder has no monopoly of his products except that he might exercise some form of copyright restriction should he feel that this might be a wise thing to do, but scientific work should have no restrictions, and copyright should preferably only be used in order to ensure that the public generally gets the benefit of receiving an article in the form in which it is intended by its producer.’ The significance in this exchange lies in the fact that Professor Jones was one of the experts involved in the discussions which led to the introduction of plant variety rights. Clearly, he was sufficiently reassured by the form of right introduced as he was also one of the original members of the UK Plant Varieties and Seeds Tribunal set up under the Plant Varieties and Seeds Act 1964 (UK).

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other words protecting the value of the plants themselves – and less on providing a form of protection specifically for plant breeders. The gradual removal of the term ‘breeders’ right’ from references to the right and the trend to only referring to the right as a ‘variety’ right reflects a recognition of the economic value of the plant material protected.21 In what could be said to be a reversal of emphasis, the issue now is not primarily on protecting a specific group but on protecting a specific type of valuable material irrespective of the sector involved in its production.22 As a number of key players in the plant breeding sector are closely allied to modern biotechnologies, it can be difficult to see why the plant breeding industry should be singled out from other areas of bioscience.23 The change in emphasis is important as it could be said to result in a modification of the function of the right. The issue now is not merely whether the protection provided is suitable for the sector concerned, but whether it is appropriate for the type of material involved. It is accepted that this is a subtle shift in emphasis, but it is possibly one reason for the survival of plant variety rights. In other words, the right can be justified on the grounds that it is a more appropriate form of protection than patents for plant material. The question of whether it is suitable for what is an increasingly privately funded industry is almost a corollary to this. This reversal is perhaps not surprising given that a public interest justification in providing sector-specific protection is becoming more difficult to defend. The importance of this subtle distinction will be discussed below.

(b) A form of industrial property right? The second major change is that the right is now commonly referred to alongside patents and trade marks as if it is itself a form of industrial property right; yet when it was first introduced it was not regarded as being 21 22

23

A similar change can be seen in the change from ‘performers’ rights’ to ‘rights in performances’. A key factor could be said to be the growth in private plant breeding institutions. In the 1950s the sector was mainly publicly funded and there was a strong public interest in protecting it. With the growth in private plant breeding initiatives the emphasis is arguably less on encouraging involvement in plant breeding but on protecting the valuable commercial assets resulting from breeding programmes. This is the underlying ethos behind TRIPs Art. 27, which mandates first, in Art. 27(1) that patent protection must be available for all fields of technology, and then reinforces the need for protection (albeit not necessarily by a patent) in respect of plant varieties in Art. 27(3)(b). The explicit, and therefore primary, obligation is to provide protection for plant varieties; it is not to provide support for those breeding the varieties, even though this is the inevitable outcome of providing the protection.

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such. Plant variety protection was not introduced through the development of the Paris Convention,24 but rather by way of an independent treaty, the UPOV Convention. As mentioned, plant variety rights were introduced to reward plant breeders for the time and effort involved in breeding new plant varieties because it was important to provide farmers with the best possible agricultural plant material. Its object was not to protect inventive activity as such mainly because it was, at the time the right was introduced, difficult to demonstrate that a traditional breeding programme was inventive. It was, therefore, predominantly an agricultural right granted to breeders in order to encourage the development of beneficial new crops.25 The distinction between the function of an industrial property right, and patents in particular, and the agricultural right becomes apparent when a simple comparison of the two rights is made.26

(c) Patents and plant variety rights: functional distinctions The first point of contrast between the two rights is that patents serve to protect novel results which are non-obvious. In order to ascertain whether or not the invention is obvious to one skilled in the art it is necessary to demonstrate (or disclose) the steps taken in arriving at the invention. Disclosure is ensured if the specification describes what was known before and demonstrates why what the inventor did was not an obvious step forward given what had been known before. In contrast, the plant variety rights system is not intended to protect non-obvious results. Most plant breeding activity involves trying the obvious – if breeders were required to show that what they had done would not be obvious to a person skilled in the art then few if any rights would be granted. The rationale for the grant of a plant variety right is 24 25

26

Despite the fact that Art. 1(3) states that wine, grain, tobacco leaf, fruit, minerals, beer, flowers and flour are capable of attracting industrial property protection. The fact it was not regarded as an industrial property right per se can be seen both in Cornish, supra n. 1, where the right is described in an Appendix, and the World Intellectual Property Organization’s Introduction to Intellectual Property Theory and Practice (Kluwer Law International, 1997) which does not include any discussion of plant variety rights in its substantive chapters on intellectual property rights. Confusingly, the section on International Treaties or Conventions in Intellectual Property, contains a chapter on UPOV. See M. Llewelyn and M. Adcock, supra n. 10, at chapter 1 and M. Llewelyn, ‘Which Rules in World Trade Law: Patents or Plant Variety Rights’ in T. Cottier and P. C. Mavroidis (eds.), supra n. 15, at p. 303.

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therefore not to protect inventiveness. There is no need for the breeder to disclose information about how the variety was developed as s/he does not have to prove that their decision to pursue a particular line of research was unobvious. The key rationale for the grant of a plant variety right is the protection of the time invested in producing a new variety which is distinct from others of the same species, and which, over time, remains uniform and stable following reproduction. The function, to protect the time invested in bringing a distinct, stable and uniform variety to the market, is further reflected in the fact that plant variety rights are available over discoveries.27 This is in stark contrast to the patent system which, in Europe at least, explicitly excludes discoveries from protection. A further point underlining the objective to foster a sector as a whole rather than individual interests within that sector is that the use of protected plant varieties in commercial breeding programmes is not prohibited, whereas such use would be an infringing act under patent law. Secondly, the right is generally administered by governmental agencies responsible for agricultural matters and not by offices concerned with trade and industry, as is the practice with patents. This ensures that the operation of the right conforms with any overarching agricultural policy. The third and final point of distinction is that, in contrast to the paper assessment undertaken to determine whether an invention is patentable, a plant variety is subjected to two years of practical trials before the right is granted. These serve to show whether or not the variety is actually distinct, uniform and stable as opposed to simply relying on a written description provided by the breeder. The trials are undertaken by the granting offices in conjunction with breeding institutes, such as the UK’s National Institute of Agricultural Botany (NIAB). A breeder may be requested to provide the reproductive material of the variety for retesting at any time during the period of grant to verify that it is still distinct, uniform and stable. However, despite the distinctions between the two rights, it has become increasingly difficult to demonstrate clear blue water, either in functional or practical terms, between them. It is common for those discussing intellectual property rights and the protection of plant material to refer to patents and plant variety rights in the same breath as if they belong to the same family of protection. The consequence of this has been to imply that the plant variety rights system is a form of intellectual property protection 27

Mere discovery of a variety is not sufficient to support the grant of a plant variety right, the applicant has to demonstrate that the variety breeds in a uniform and stable fashion over repeated reproduction cycles. A wholly naturally occurring plant grouping is unlikely to do this as it will naturally sport or mutate. These tendencies are controlled via plant breeding programmes.

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with the same objectives and rationale as patent law. This makes it is easier to think of the right as an alternative to patents, the necessity for which is explicable by reference to the specific subject-matter. It is worth noting, however, that at no time has it been formally agreed that plant variety rights should now be regarded as a member of the intellectual property family and it is likely that if the matter were to be debated strong arguments would be presented by both sides as to why it should/should not be regarded as either an industrial or intellectual property right.28 The reasons why this has been allowed to evolve without objection are two-fold. Firstly, as discussed above, the plant variety right has been significantly amended following the revision of the UPOV Convention in 1991. In many respects the type of right granted under plant variety rights is the same as that provided by a patent. Secondly, the requirement to provide either patent and/or sui generis protection for plant varieties within the TRIPs Agreement does not mention any difference in origin of the right (namely that one is an intellectual property right governed by the TRIPs Agreement whilst the other is not, and therefore, arguably, not governed by TRIPs).29 This provides an impression that the right(s) to be provided by the member state have the same basis and standing in law, and, by extension and inference, that they are both intellectual property rights. The recognition of plant variety rights, rightly or wrongly, as a form of industrial property protection is further reinforced in the Community Plant Variety Rights Regulation which states in Article 1 that: ‘A system of Community plant variety rights is hereby established as the sole and exclusive form of Community industrial property rights for plant varieties.’ (Emphasis added.) Each of these developments have served to modernise the plant variety protection ensuring it can no longer be dismissed as ‘outmoded’. However, the question remains whether plant variety rights in its recast form is an ‘impediment’?

C. An ‘impediment’? There are two issues for discussion here. The first is whether the plant variety rights system remains an ‘unwarranted barrier’ to the patenting of 28 29

See J. H. Reichman, ‘Legal Hybrids Between the Patent and Copyright Paradigms’ (1994) 94 Colum. L. Rev. 2432. The lack of applicability of the TRIPs Agreement to UPOV-style plant variety rights is supported by the fact that whilst the Agreement refers to a host of international conventions on industrial/intellectual property it does not mention any of the UPOV Conventions.

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plant material. The second is whether the modernisation of the system, making it less sector specific, could backfire with the result that the right, in its new guise as a de facto patent right, will serve to deter, or impede, plant breeding.

1. The dual protection prohibition 30 Over the years this provision has been taken to mean that dual protection could not be sought using both ordinary patent law and under plant variety rights which accord with the UPOV Convention. This interpretation was given additional weight by the specific exclusion of plant varieties in the European Patent Convention. Because of this perception many commentators on the plant variety rights system thought that the obligation, imposed by UPOV and reiterated by an equivalent bar in European and national patent law, rendered the plant variety rights system, in both form and intent, an impediment. However, this view was based on a misreading of the provision which was not intended to prevent member states from providing both patents and plant variety rights over plant varieties. Article 2(1) only applied where both the patent and plant variety protection accorded with the provisions of UPOV. In other words the patent grant depended on the variety being distinct, uniform and stable, the right granted applied only to the reproductive material of the variety, and it was subject to the research and farm saved seed derogations. Ordinary patent protection, which did not accord with the provisions of UPOV, was not, in fact, prohibited.31 This explains the ability of the US to join UPOV despite the fact that it provided protection using patents and plant variety rights and the fact that it had to amend its plant patent provisions before acceding to the Convention. Because it was recognised that there were misconceptions as to the interpretation and application of the prohibition, the UPOV Union voted to remove the dual protection prohibition from the 1991 text. This means that member states may now provide either or both forms of protection, which in turn leads to greater accord between the UPOV Convention 1991 and Article 27(3)(b) TRIPs for this will enable member states to 30

31

Both the original 1961 and subsequent 1978 UPOV Acts stated in art. 2(1) that: ‘Member states may recognise the right of the breeder provided for in this Convention by the grant either of a special title of protection or of a patent . . . a member State of the Union whose national law admits of protection under both these forms may provide only one of them for one and the same botanical genus or species.’ See the M. Llewelyn and T. Cook debate in Plant Variety Rights: An Outmoded Impediment? A Seminar Report (Intellectual Property Institute, 1998).

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make use of the cumulative aspect of that obligation.32 The remaining barrier, or impediment, to protecting plant varieties under patent law is the exclusion contained within the patent law. This is certainly the case within the European Union – although it should be stressed that the option, such as it is, only operates at the national, and not community, level.

2. Dual protection in Europe Both the European Patent Convention33 and the EU Directive on the Legal Protection of Biotechnological Inventions34 expressly exclude plant varieties from patent protection, which is unsurprising given that the latter is intended to complement the former. Both also make specific reference to the protection of plant varieties by the plant variety rights system.35 The impression given is that the exclusion of plant varieties is because they are the sole protectable subject matter of the plant variety right system – such an impression serving to underline the view that it is the existence of plant variety rights which is the impediment to the use of the patent system to protect plant varieties. However, the Community Regulation does not prohibit the use of the patent system as a means of protecting plant varieties at the national level. Arguably, this could apply to both the EPC, which grants rights which have national effect, and the Directive, the provisions of which member states must take into account in their national patent laws. The Community Regulation contains two statements relating to methods of protection for plant varieties. The first is contained in the opening Article to the Regulation and therefore carries with it symbolic significance. Article 1 states: ‘A system of Community plant variety rights is hereby established as the sole and exclusive form of Community industrial property rights for plant varieties.’ Aside from the fact that this clearly refers to the right contained within the Regulation as an industrial property right, which is interesting given that the right was established under the agricultural Directorate and not 32 33 35

‘ . . . Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof.’ (Emphasis added.) 34 Art. 53(b). Art. 4(1). Art. 2(3) of the Directive specifically refers to the concept of ‘plant variety’ being defined by the Community plant variety rights system, whilst the European Patent Office’s (EPO) new rules on interpretation, which adopt the Directive for the purpose of supplementary interpretation, defines ‘variety’ in language identical to UPOV although the rules do not refer to UPOV as such.

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industrial property, the importance of this provision lies in the words ‘the sole and exclusive form of Community . . . right’. On first reading this might be thought to rule out any patent being granted as the only right recognised within the European Community is plant variety rights, but this is not what Article 1 says. What it states is that it is the only Community right to be granted over plant varieties, that a right which is granted by a Community Office which has effect in all EU member states – this does not affect national rights nor would it prevent plant varieties being patented under national patent laws although it would prohibit the grant of a Community patent right. Article 3 reinforces the Community aspect of the right by stating: ‘This Regulation shall be without prejudice to the right of the Member States to grant national property rights for plant varieties, subject to the provisions of Article 92(1).’ Article 92, which is headed ‘Cumulative Protection Prohibited’ states that: ‘Any variety which is the subject matter of a Community plant variety right shall not be the subject of a national plant variety right or any patent for that variety.’ Article 92 clearly refers to two types of cumulative protection being prohibited. Protection using both national and Community plant variety protection and protection under both national patent law and Community plant variety rights. The prohibitions only apply to the granting of duplicate protection over the same variety and not to the availability of the protection itself. The language of the Article is unambiguous and it clearly conceives of a situation where national patents may be granted over plant varieties. If Article 92 was not intended to be taken to refer to the possibility of both a patent and a plant variety right being available then why specifically prohibit cumulative protection under both systems? The prohibition on cumulative protection only makes sense if both forms of protection can or could be accumulated.36 Obviously, there are some countries around the world which do permit the grant of either a patent or plant variety right or both: the United States of America is the obvious example. The Regulation does not apply to these countries. It is specifically intended to ‘create a Community regime which . . . allows for the grant of industrial property rights valid throughout the Community’.37 Article 92 can only be read, therefore, as anticipating the situation where it is possible to obtain a valid national patent over a plant variety within the European Community. 36 37

See M. Llewelyn, ‘The Patentability of Biological Material: Continuing Contradiction and Confusion’ [2000] EIPR p. 191. Preamble to the Regulation.

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The situation in Europe would, therefore, appear to be thus. The European Patent Convention introduced, and the EU Directive has reinforced, the exclusion of plant varieties from patent protection. In contrast, the UPOV Convention has removed its barrier to dual protection and this is apparently confirmed in the text of the Community Regulation by the fact that Article 92 recognises the possibility of both patents and plant variety rights being available at the local level. However, the Community Regulation does not wholly eliminate the dual protection prohibition for where dual protection is possible, via the grant of either a Community right and a national patent or of a national plant variety right and a Community right, then the plant variety concerned may be the subject of only one right and not both. Where two rights have been granted the Community right takes precedence. The language of the Community Regulation makes it clear that it is envisaged that patent protection can, and possibly should, be available over plant varieties but that the potential for such protection should be confined to the local level and that a breeder should make a choice between acquiring national rights (whether in the form of a patent and/or a plant variety right) and a Community right. The impediment to the availability of patent protection for plant varieties is therefore removed. The question which remains is why, given that the plant variety rights system directly contemplates a time when both patent protection and plant variety rights will be available for plant varieties, has this not been copied in the developments in patent law? There is a remarkably simple explanation. Whilst many involved in the negotiations leading to the Community Regulation took note of the developments in respect of the Directive, there was very little reciprocal interest in the plant variety right. The primary concern of the drafters was to ensure parity between the EPC and the Directive and this appears to have been at the expense of (a) aligning the Directive and Regulation and (b) taking advantage of the opportunity Article 92 presented.

3. Where lies the impediment? Those responsible for determining plant variety rights policy and practice, which are invariably the national Ministries of Agriculture, clearly do not see a problem with opening up the two systems as potential sources of protection for plant breeders. So where does the resistance lie? Plant breeders are increasingly faced with an incursion of multinationals into the plant breeding worlds and yet, as a survey commissioned

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by the European Commission demonstrates,38 the majority of plant breeders fall within the category of small to medium-sized enterprise (SME). It is well known that SMEs do not make use of the patent system. SME plant breeders do, however, make full use of plant variety rights. Could it possibly be that it is convenient for those who administer patent law to continue excluding plant varieties because the plant variety rights system is actually the more appropriate right not only on the basis of protecting a particular thing but, and also arguably more importantly given the original justification for the sui generis right, because it is more appropriate for the industry concerned? Of course, there is an argument for saying that the increasingly restrictive interpretation given to the plant variety exclusion in patent law renders the exclusion effectively redundant, but it cannot be denied that in terms of usage by the plant breeding industry it is the sui generis right which, at present, is the one which is preferred. However, whilst any legal basis for calling plant variety rights an ‘outmoded impediment’ might have been removed, there is still a need for caution when celebrating the changes which have taken place.

4. A new impediment to plant breeders? The majority of the plant breeders, within the EU at least, are SMEs. Increasingly, patents will be sought, and granted over all aspects of plant material up to and encompassing plant varieties.39 At the same time, whilst the rights available under plant variety rights are stronger than ever before, there are new issues over the extent of a breeders’ right over the results of research programmes (and, in particular, the uncertainty which the notion of the essentially derived variety raises40 ) – not to mention the potential problems resulting from cross-licensing involving patented genes and 38

39 40

The Plant Intellectual Property Project administered by the Sheffield Institute of Biotechnology Law and Ethics together with the French plant breeders’ union, SICASOV and Plant Technology Ltd, Ireland. The project evaluated the current European provision of plant intellectual property rights and included a survey of the European plant breeding industry to assess the use of, and attitudes towards, plant intellectual property. For a discussion of the project see M. Llewelyn and M. Adcock, supra n. 10. This is clearly the intended outcome of the introduction of the EU Directive and is supported by the jurisprudence of the EPO. See Proceedings of the Conference on Plant Intellectual Property within European and the Wider Global Community (Sheffield Academic Press, 2001) and http://www.shef.ac.uk/ uni/projects/pip.

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protected plant varieties.41 There is a fear that whilst the strengthened right might appear attractive to the multinationals (particularly in the context of encouraging associations with research institutions in the developing world), this might be at the expense of the SME breeder. In particular, the uncertain ambit of the concepts of ‘essentially derived’ and ‘significant technical progress’ might have a stultifying effect on plant breeding programmes as breeders remain uncertain as to what is permissible (or even what status research outcomes could have). Crucial to this concern is the inclusion of plant variety rights within the intellectual property law family and its status as a right to be used in addition to patent protection. The cumulative effect of ensuring that all aspects of plant material – from gene, variety through to whole species – can be protected by one or other form of plant intellectual property rights means that access to plant material for breeding purposes is likely to become more restricted. In contrast to the majority of multinationals now entering the plant breeding arena, most European plant breeders have little or no experience of the patent system. They also have limited experience of finding a way through (or negotiating around) a thicket of different rights in order to use material for breeding. These factors, together with the differences between the two systems, could have a serious impact on a core group of European breeders.

D. Conclusion The view that the plant variety rights system was outmoded was clearly shared by those involved in revising the UPOV Convention. The removal of the dual protection prohibition could be taken as an implicit acceptance that, notwithstanding the other substantive amendments, unless it was removed the plant variety rights system would remain a target. The result of these revisions is a plant variety rights system which is closer in effect and spirit to the patent system, and which does not preclude both forms of protection being available to protect plant varieties. However, as the full impact of the developments in both plant variety rights and patent 41

This is primarily a European issue introduced under Art. 12 of the Biotech Patenting Directive. The problem is that the grant of a compulsory cross-licence will be dependent on the breeder (or inventor) demonstrating that their new variety which incorporates the patented material for which the licence is sought (or the invention for inclusion in the protected variety) constitutes a ‘significant technical progress’. The problem is that a breeder might not know until the end of the breeding programme if the resulting variety, using the patented gene, will fulfil this requirement.

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law begins to appear, there is a need to ensure that the interests of the majority of those engaged in plant breeding in Europe are not overlooked in the stampede to protect. Plant variety rights may no longer be an outmoded impediment to patent protection but what neither it, nor the emerging collective of plant intellectual property rights, must become is an impediment to plant breeding.

Trade marks and unfair competition

11 Dilution of a trade mark: European and United States law compared j. thomas m c carthy ∗

A. Introduction Professor Cornish has wisely warned us that: ‘What matters is that “dilution” . . . should be prevented only in cases where there really is sufficient cause for interfering with the freedom of all traders to promote their goods and services as best they can.’1 No part of trade-mark law that I have encountered in my 40 years of teaching and practicing IP law has created so much doctrinal puzzlement and judicial incomprehension as the concept of ‘dilution’ as a form of intrusion on a trade mark. It is a daunting pedagogical challenge to explain even the basic theoretical concept of dilution to students, attorneys and judges. Few can successfully explain it without encountering stares of incomprehension or, worse, nods of understanding which mask and conceal bewilderment and misinterpretation. With the advent of the 1988 EU Trade Mark Directive2 and a growing body of interpretive European Court of Justice (ECJ) case law, it is much easier than in the past to make a comparison of EU and US trade mark law, including anti-dilution law. While the anti-dilution provisions of Articles 4(4)(a) and 5(2) of the EU Directive are ‘optional,’ in fact, every EU nation has adopted them in its domestic law.3 In the US, since the ∗ 1 2

3

Senior Professor of Law, University of San Francisco; Founding Director, McCarthy Institute of Intellectual Property and Technology Law. W. R. Cornish and D. Llewelyn, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th ed., 2003), §17–99. First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to Trade Marks. While in 1988 it was the ‘EC’ and the ‘EU’ did not yet exist, I cite it as the ‘EU Trade Mark Directive’ for ease of reference. See Davidoff & Cie SA v. Gofkid [2003] 1 CMLR 35, para. AG7. In Europe, the Community Trade Mark system contains provisions that mirror those in the Trade Marks Directive. As

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enactment of the 1996 federal anti-dilution Act, in theory there is a uniform law consistent throughout the nation. There will inevitably be variations in interpretations among EU nations and among US federal circuits. In Europe, as more ECJ decisions are rendered, those variations will hopefully be lessened. In the US, if an amendment is made to the anti-dilution statute or another Supreme Court case addresses the conflicts in interpretation, perhaps more clarity will gradually emerge. But in view of the history so far in both Europe and America, I am not confident that clarity and predictability are just over the horizon. Courts on both sides of the Atlantic have not been very successful in making sense of their respective anti-dilution laws.

B. What is an anti-dilution law? 1. In Europe The commentators uniformly refer to Trade Mark Directive Articles 4(4)(a) and 5(2) as anti-dilution laws,4 loosely modeled on those in place in the Benelux and other European countries for many years.5 But the word ‘dilution’ is absent from the Directive. The key language of Article 5(2) provides: ‘Any Member State may also provide that the proprietor [of a registered trade mark] shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trade mark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.’6

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in the US, the Directive states that dilution is both a ground for opposition and a basis for a lawsuit claiming an invasion of the registered mark owner’s rights. Cornish and Llewelyn, supra n. 1, at §17–99. T. Martino, Trademark Dilution, 100 (Oxford University Press, 1996) (‘Benelux cases [preEU Directive] have enjoined junior uses which arguably engendered an unmistaken awareness that the mark denoted a different product emanating from a different source.’); General Motors Corp. v. Yplon S.A. [1999] 3 CMLR 427, para. 28 (Advocate General Jacobs: ‘[I]n the course of negotiations in the Council, a provision protecting marks “with a reputation” was included at the request of the Benelux countries, and became Article 5(2) of the Directive.’) Before the 1988 EU Directive, anti-dilution laws were in force in several European nations. But while the doctrine in the Benelux was part of trade-mark law, in other countries, such as Germany, it was a part of unfair competition law. (Emphasis added.) Article 4(4)(a) of the Directive mirrors this language in the context of relative grounds of validity of registration. Unexplored by the ECJ is the scope and

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The European Court of Justice seems loathe to use the word ‘dilution’ and even more loathe to refer to the theoretical, historical and logical foundations of the dilution concept.7 Advocate General Jacobs has usually avoided the word ‘dilution’.8 Only in 2003 in the Adidas case did Jacobs attempt to pin down what ‘dilution’ means and take a look (albeit an abbreviated one) at its history and purpose.9 There, he defined ‘dilution’ as ‘detriment to the distinctive character of a trade mark’ and divided it in the two classic categories used in the United States: blurring and tarnishment. Jacobs also blended in the concept of ‘free riding’, using the example of rolls royce whiskey. What is surprising to me is that in the 2003 Adidas case, searching for the theoretical and historical basis for the concept of ‘dilution’, Jacobs looked, not to its German and Benelux origins, but back in time and across the ocean to the 1927 Schechter article in the Harvard Law Review.10 Of course, Schechter looked back across the ocean to Europe to the 1924 German odol case as a basis for his theories.11 Jacobs said that ‘the courts in the United States . . . have added richly to the lexicon of dilution . . .’ I smiled at reading this passage, for it gives the misleading impression that the American courts have the US anti-dilution federal law all squared

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meaning of the open-ended phrase ‘without due cause takes unfair advantage of . . .’ See Cornish and Llewelyn, supra n. 1, at §17–101 (‘[I]t is enough to show that a defendant is taking unfair advantage, without showing that the proprietor is suffering detriment.’) One of the rare uses of the word ‘dilution’ by the Court itself is in Case C-408/01 AdidasSalomon AG v. Fitnessworld Trading Ltd [2004] 1 CMLR 14 where, in para. 37, the court refers to the argument by the Commission of the European Communities that the Directive relates to ‘a likelihood of dilution of or detriment to the mark’s reputation’. Earlier, in 1998, the ECJ said that an accused mark which calls to mind a senior trade mark could result in a dilution of the image linked to the senior mark. Sabel BV v. Puma AG [1998] 1 CMLR 445, para. 15. Two exceptions are when Jacobs employed the word ‘dilution’ to characterize a claim under the Benelux law. Sabel BV v. Puma AG [1998] 1 CMLR 445, para. 39; General Motors Corp. v. Yplon S.A [1999] 3 CMLR 427, para. 10. Case C-408/01 Adidas-Salomon AG v. Fitnessworld Trading Ltd [2004] 1 CMLR 14, paras. 37–40. Schechter urged legal protection against the ‘gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon noncompeting goods’. Schechter, ‘The Rational Basis of Trademark Protection’ (1927) 40 Harv. L. Rev. 813, 825, reprinted in (1970) 60 Trademark Reporter 334. The Schechter proposal for a new form of protection was limited to situations where the junior mark was identical, when the famous mark was coined or arbitrary and only if the uses were on non-competing and non-similar goods or services. Odol Case, 1924, 25 Juristiche Wochenschrift 502 (the owner of odol for mouthwash canceled registration of odol for steel products); described in T. Martino, supra n. 5, at p. 5.

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away and neatly sorted out. Nothing could be further from the truth. In the US, puzzlement reigns and conflict and disarray over dilution is the hallmark of judicial decisions, from the US Supreme Court on down.

2. Dilution in the United States For several decades, starting in 1947, a number of states enacted antidilution laws. But for various reasons, they were seldom invoked and rarely resulted in a finding of liability. Not until enactment of a federal law in 1996 did dilution emerge as a hotly debated and litigated issue by the trade mark bar and the judiciary. The key portions of the federal Act provide: ‘The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person’s commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark, and to obtain such other relief as is provided in this subsection . . .12 The term “dilution” means the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of – (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake, or deception.’ 13

I estimate that as of the end of 2003, there have been almost 400 reported judicial decisions from both trial and appellate courts interpreting and applying the federal anti-dilution law. So there is a considerable body of case law precedent. Unfortunately, much of the case law sheds more heat than light on making sense of what an anti-dilution law means. There are several splits of authority between federal courts located in different parts of the thirteen federal circuits in the United States. Consistency and predictability are hard to find. By 1999, a split of interpretation developed between the Second Circuit Court of Appeals in New York and the Fourth Circuit in Virginia as to whether the plaintiff in a Lanham Act section 43(c) dilution case had to prove an actual, present injury to its famous mark or a mere likelihood of harm. The Fourth Circuit held that a plaintiff had to present proof of 12

Lanham Act s. 43(c)(1), 15 U.S.C. 1125(c)(1).

13

Lanham Act s. 45, 15 U.S.C. 1127.

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actual damage. The Second Circuit disagreed and held that such proof was not necessary to prove liability: a preliminary injunction could be obtained to prevent threatened injury to the strength of the famous mark. In its 2003 Victoria’s Secret decision, the US Supreme Court resolved the split and essentially agreed with the Fourth Circuit view. In its 2003 Victoria’s Secret decision,14 the Supreme Court held that proof of actual dilution, not just the likelihood of dilution, is required. There was no dispute that plaintiff ’s victoria’s secret mark for women’s lingerie and wearing apparel qualified as a ‘famous mark’ as required by Lanham Act, section 43(c). In Elizabethtown, Kentucky, located south of Louisville, Victor and Cathy Moseley in 1998 opened victor’s secret, a retail store in a strip mall selling men’s and women’s lingerie, adult videos and sex toys. After being contacted by Victoria’s Secret, the Moseleys changed the name of their store to victor’s little secret and stood their ground. Plaintiff filed suit for trademark infringement and dilution. The district court dismissed the trade mark infringement count on summary judgment (finding no possibility of proving a likelihood of confusion) but granted plaintiff Victoria’s Secret summary judgment on the federal anti-dilution Act count, finding dilution by tarnishment. The Moseleys appealed and the appellate court affirmed, finding dilution by both blurring and tarnishment. The Supreme Court reversed, returning the case to the district court for a possible trial. In my view, the Supreme Court created two categories of dilution cases: where the conflicting marks are identical and where the marks differ. The court said that: ‘[A]t least where the marks at issue are not identical, the mere fact that consumers mentally associate the junior user’s mark with a famous mark is not sufficient to establish actionable dilution.’ The clear implication of this holding is that where the marks are identical, the fact that consumers mentally associate the junior user’s mark with a famous mark could be (but not necessarily has to be) sufficient to establish dilution. I believe that this means that when a famous mark is used by another in identical form, no further evidence will ordinarily be necessary to reach the conclusion that the famous mark has in fact been ‘diluted’ to some extent, no matter how relatively minor is the junior use. For example, if hypothetically, the famous mark rolex for watches was used without licence on sports shoes (‘rolex shoes’) it should be clear that the rolex 14

Moseley v. V Secret Catalogue, Inc., 123 S. Ct. 1115 (U.S. 2003).

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mark, has to some extent, lost its unique link with a single source of watches and has now been fragmented and diluted to some degree. If this unauthorized use is permitted, the assumption is that others are sure to follow and sooner or later the ROLEX mark will suffer a loss of its capacity to serve as a strong mark. This is the fundamental theory of the slippery slope and dilution by blurring.15 In cases where the conflicting marks are not identical, the Supreme Court’s holding is that the fact that consumers mentally associate the junior user’s mark with a famous mark is not sufficient evidence to prove actual dilution. The Supreme Court’s Victoria’s Secret opinion is terse and cryptic, giving little information on the kind of evidence it thought would suffice to prove actual dilution in cases of non-identical marks. In my view evidence of actual dilution damage in non-identical marks cases will often fall into two categories: expert testimony and survey evidence.16

C. Why is there a need for a strong anti-dilution law when there is a broad scope of protection through the traditional likelihood of confusion rule? If a legal system has a test of likely confusion which broadly encompasses confusion over sponsorship, affiliation or connection, then many of the ‘deficiencies’ cited by proponents of a broad trade mark protection are taken care of. The ‘need’ for a separate system of protection through a dilution theory is much less pressing. And the burden of persuasion on proponents who advocate a broad scope to anti-dilution laws is much heavier in such a legal environment. US law made this expansion of the scope of ‘confusion’ by fits and starts in case law over a period of several decades from about 1940 through 1970.17 An amendment to the federal Lanham Act in 196218 opened the door to expansion of the likely confusion rule and it was finally codified in 1989.19 A parallel expansion has more recently occurred in Europe. 15 16 17 18

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See J. T. McCarthy, Trademarks and Unfair Competition (4th ed., 2003 rev.), §24:94. Ibid., §24:94.2. Ibid., §24:2. In 1962, the key definition of infringement in the federal Lanham Act was broadened by an amendment that eliminated the requirement that confusion, mistake or deception had to be of ‘purchasers as to the source of origin of such goods or services’. The broad scope of ‘confusion’ was codified in 1989 in Lanham Act s. 43(a). A federal claim under Lanham Act s. 43(a) for infringement of an unregistered mark is triggered by a use which ‘is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association’ of the user with the senior user.

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In the Sabel case,20 Advocate General Jacobs said that ‘likelihood of association’ in Trade Mark Directive Articles 4(1)(b) and 5(1)(b) was not simply an inept use of words which were intended to encompass the theory of an anti-dilution law. Rather, I think that ‘likelihood of association’ represents an expanded form of the traditional test of likelihood of confusion.21 The ECJ judgment itself in Sabel does make one important point very clear: Articles 4(1)(b) and 5(1)(b) are not the sections that import ‘dilution’ into the Directive. They merely expand the scope of likelihood of confusion: ‘[T]he concept of likelihood of association is not an alternative to that of likelihood of confusion, but serves to define its scope.’22 In the Canon case, the ECJ cleared up an important question left unclear after Sabel: is likelihood of confusion limited to confusion over origin, or does it also encompass confusion that there is an association with the senior user by sponsorship, affiliation or connection? Advocate General Jacobs said of Article 4(1)(b) of the Directive: ‘[I]f, despite recognizing that the goods or services have different places of origin, the public is likely to believe that there is a link between the two concerns, there will be a likelihood of confusion within the meaning of the Directive.’23 The court agreed: ‘[T]he risk that the public might believe that the goods or services in question come from the same undertaking or, as the case may be, from economically-linked undertakings, constitutes a likelihood of confusion within the meaning of Article 4(1)(b) of the Directive.’24 I read these statements as adopting the position that likelihood of confusion includes confusion as to sponsorship, affiliation or connection. Advocate General Jacobs’ view in the Canon case was completely consistent with US law when he noted that the stronger the senior mark, the broader the scope of protection that should be given to it when it 20 21

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Sabel BV v. Puma AG [1998] 1 CMLR 445. Both Jacobs and the ECJ rejected the view that ‘likelihood of association’ means that the accused mark merely ‘calls to mind’ the senior mark. Advocate General Jacobs said in Sabel that the fact that the junior mark serves merely to ‘call to mind’ the senior mark is not sufficient to establish a likelihood of confusion of association. The same rule holds in the United States. See J. T. McCarthy, supra n. 15, at §29:9; In re Ferrero, 479 F.2d 1395 (C.C.P.A. 1973) (‘The very fact of calling to mind may indicate that the mind is distinguishing, rather than being confused by, the two marks’). Sabel BV v. Puma AG [1998] 1 CMLR 445, para. 18. Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer, Inc [1999] 1 CMLR 77., para. 30. (Owner of canon for cameras opposed the German registration of cannon for motion picture and cinema products and services.) Canon at para. 29.

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challenges a similar mark used on far flung goods and services which are quite different from those of the senior user.25 This is congruent with US law on point.26 Given this parallel expansion in both the US and the EU of their definition of ‘likely confusion’ what exactly are those cases that are not taken care of by confusion over sponsorship, affiliation or connection and that cry out for a broad scope for a new and radically different form of exclusive rights for trade marks? While such unusual cases may well exist, should not any anti-dilution law be confined to such rare cases?

D. Validity: what kind of marks should qualify for the special protection of an anti-dilution law? 1. ‘Reputation’ in the European Union: niche fame? In the ‘chevy’ case,27 the ECJ interpreted the Directive language in Article 5(2) requiring that to be protected against dilution, the mark must have ‘a reputation in the Member State’.28 General Motors is the maker of the chevrolet auto, known familiarly by the nickname chevy. This term was registered by G.M. as a trade mark in the Benelux territory. General Motors sued the Belgian maker of chevy cleaning products in a Belgian court for violating the Benelux post-1996 version of the legal prohibition against dilution. Unlike the pre-1996 Benelux law, which extended the possibility of anti-dilution protection to all marks, the post-1996 version tracked the EU Directive and required that the senior mark must have a ‘reputation’ in the relevant nation.29 The defendant argued that the mark chevy did not have the required ‘reputation’ in the Benelux nations. 25

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Canon – AG Jacobs at para. 32 (‘The more well known or unusual a trade mark, the more likely it is that consumers might be confused into believing there to be [a] trade connection between the goods or services bearing the same or a similar mark’); the Court at para. 19 (An opposition may be successful under Art. 4(1)(b) where the goods or services are different and ‘the earlier mark, in particular its reputation, is highly distinctive’). J. T. McCarthy, supra n. 15, at §11:73. See e.g. Champions Golf Club v. Champions Golf Club, 78 F.3d 1111 (6th Cir. 1996) (‘The stronger the mark, the more likely it is that encroachment on it will produce confusion’). General Motors Corp. v. Yplon S.A. [1999] 3 CMLR 427. In addition to requiring on the validity side that the mark have a ‘reputation’, on the infringement side, the Directive requires that and the accused use be detrimental to ‘the distinctive character or the repute’ of the trade mark. The ECJ also held that for proposes of the Directive, the Benelux territory must be treated as a single ‘Member State’ to determine in what territory the required ‘reputation’ existed.

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The Court in its judgment adopted the test that to have a ‘reputation’, the senior mark must be known by a ‘significant part’ of the concerned public: ‘The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark.’

The ECJ specifically refused to define what is a ‘significant part’ and refused to adopt a rule that there must be knowledge by a majority or, indeed, any given percentage of the public as being required. Rather, the ECJ escaped into the traditional judicial formulation that ‘all of the relevant facts of the case’ must be balanced before determining if a given mark qualifies as having the ‘reputation’ required by the Directive. However, the court did list five examples of factors to be considered: (1) the market share occupied by goods or services sold under the mark; (2) the ‘intensity’ of use of the mark; (3) the geographic extent of use of the mark; (4) the duration of use of the mark; and (5) the amount of investment in promoting and advertising the mark. Of course, all of these five examples are merely circumstantial evidence of the scope of usage of the mark, not direct evidence of the state of mind or knowledge of the relevant public. Direct evidence is most often accessible only through survey evidence, which is commonly used in the US in determining if a mark qualifies as ‘famous’. Hinting briefly at the possibility of a mark having ‘niche fame’, the ECJ indicated that a ‘reputation’ could be achieved among a ‘specialized public’ consisting only of those who buy a particular type of product, giving the example of ‘traders in a specific sector’. This hints at the possibility of niche fame because it seems to allow dilution protection to be extended, for example, to a mark that is known only to persons who own a recreational sailboat or to persons who own high-end audio equipment. It is hard to see why the ECJ felt the need to reach out and make such a significant interpretation in a case involving autos and detergents, neither of which qualifies as purchased only by ‘traders in a specific sector’. I hope that the ECJ has not thus inadvertently turned a corner and rejected the view that to qualify for the extraordinary protection of an anti-dilution law, the mark must be well known among the entire purchasing public, not just a few who compose the niche market for a specialized product. To qualify under the Directive, must the mark be known throughout the territory of a nation or is knowledge of the mark in only one locality

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sufficient? The ECJ held that having a reputation ‘in the Member State’ cannot mean a reputation ‘throughout’ the territory of the nation. The ECJ simply said that a reputation in a ‘substantial part’ of the nation would suffice. Again, the ECJ appears to be backing into the position that ‘niche fame’, this time on the territorial level, is sufficient. Would knowledge of a mark only in one city or one political segment of a nation be sufficient? If so, then it would be effective only against an accused use in that city or political segment. Those in other parts of that nation would have no knowledge of the mark and the mark would have no ‘reputation’ outside that enclave. Legislative history of the US federal anti-dilution Act indicates that the fame of the senior mark should extend through a ‘substantial portion’ of the United States.30 In my view, ordinarily a mark should not be dubbed ‘famous’ under the federal Act unless it has been used on a substantially national scale. A mark used only in one state or in a small region of the US should not be categorized as ‘famous’ under the federal law.31 Advocate General Jacobs said in the chevy case that ‘it is possible to conclude’ that there is a difference between the ‘reputation’ needed to invoke the EU Directive’s anti-dilution provisions compared to the degree of recognition of a mark needed to invoke the Paris Convention Article 6bis power to protect a non-registered or non-used mark in a nation because the mark is ‘well known’ in that nation.32 Jacobs’ position was that less knowledge and fame should be required to establish a ‘reputation’ for antidilution law than to establish that the mark is ‘well known’ under the Paris Convention. His support for this view comes entirely from examining the dictionary meaning of the words ‘reputation’ and ‘well known’ in the European Union languages. Jacobs made no attempt to look at the policies underlying these two different legal doctrines. In my view, to invoke the Paris Convention Article 6bis in the United States the mark should be sufficiently well known in the US in the relevant sector of the public such that this junior user’s use is likely to cause confusion. This should not be confused with the degree of ‘fame’ required to qualify a mark as ‘famous’ in order to invoke the special scope of exclusivity granted by the anti-dilution law. I think that that is an entirely different 30 31 32

J. T. McCarthy, supra n. 15, at §24:92. See Star Markets, Ltd v. Texaco, Inc., 950 F. Supp. 1030, 1035 (D. Haw. 1996) (while fame in all 50 states is not required, fame in only the state of Hawaii is not sufficient). TRIPs Article 16(1) extends the Paris Convention 6bis provisions to service marks and requires the mark to be well-known only to the ‘relevant sector of the public’.

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matter, which requires a considerably higher degree of knowledge.33 Thus, at least as to the extent that Jabobs’ view could be extended to the United States, I disagree with his view. It should be noted that while the European Directive limits harmonization of ‘dilution’ protection to registered marks, the US federal antidilution law also extends to unregistered marks, an expansion that I have criticized.34

2. ‘Fame’ in the United States: niche fame? Under the federal anti-dilution statute, some courts have held that niche fame is possible, but is actionable only as against a defendant who is using the mark in the same niche market. Typical of those courts is the statement of the Third Circuit: ‘We are persuaded that a mark not famous to the general public is nevertheless entitled to protection from dilution where both the plaintiff and defendant are operating in the same or related markets, so long as the plaintiff’s mark possesses a high degree of fame in its niche market.’35 Some judges have observed that acceptance of the theory of niche market fame produces a strange result. The legal theory of anti-dilution was conceived to protect strong marks against a diluting use by a junior user in a product or service line far removed from that in which the famous mark appears. For example, in the US, the most popular list of offending examples against which anti-dilution laws are directed is: dupont shoes, buick aspirin, schlitz varnish, kodak pianos and bulova gowns. The assumption is that traditional likelihood of confusion could not be proven in such cases. Hence, a kind of ‘extra-special’ legal exclusivity was felt necessary to give the owners of strong marks the kind of protection that they ‘deserve’. Thus, using the anti-dilution law when the parties are selling their products in the same niche market sounds a dissonant note. Why the need to invoke the ‘super weapon’ of the antidilution law to resolve what appears to be a garden variety infringement case?36 33

34 35 36

See e.g. Groupo Gigante S.A. v. Dallo & Co., Inc., 119 F. Supp. 2d 1083 (C.D. Cal. 2000) (mark used in Mexico for grocery stores was sufficiently well known in the United States to invoke the well-known marks doctrine of the Paris Convention, but not famous enough to invoke the federal anti-dilution law). J. T. McCarthy, supra n. 15, at §24:90. Times Mirror Magazines, Inc. v. Las Vegas Sports News, L.L.C., 212 F.3d 157 (3d Cir. 2000). J. T. McCarthy, supra n. 15, at §24:112.1.

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E. Can an anti-dilution law be invoked against a competitor? Should it? 1. Policy considerations Professor Cornish has observed: ‘What about the mark-owner for similar goods who has a reputation? The fact that he has that reputation does not exempt him from having to show the confusion element required under Type 2 [likely confusion of association]; it simply aids his task.’37

I read this as taking the position that when the goods or services of the contesting parties are competitive or similar, then the result will stand or fall on the presence or absence of likely confusion. Anti-dilution law was not designed to fit such cases. Nor should the law be deformed to fit when the parties are competitive. With this position, I wholeheartedly agree. If ‘dilution’ is viewed as overlapping with the doctrines of confusion over source and confusion over sponsorship, affiliation or connection, then ‘dilution’ will, in many cases, surely devour the traditional confusionbased grounds for defining the scope of trade-mark rights. To apply ‘dilution’ in the case of competing litigants is, in my view, a dangerous misuse of the dilution theory. It is bound to result in harm to the balance of free and fair competition. I believe that ‘dilution’ (of whatever dimensions) must be defined as a separate and distinct kind of protection for a few (a very few) trade marks. Dilution by blurring and infringement by a likelihood of confusion are not stops along the same railway line: they are different lines altogether. They are separate lines because they are separate kinds of consumer perception.38 In the United States, some courts39 and commentators40 see blurring and confusion merely as different points along a single line continuum of consumer perception. In my view, this is a dangerously erroneous view and misses the key difference between the two doctrines. The 37 38 39

40

Cornish and Llewelyn, supra n. 1, at §17–101. J. T. McCarthy, supra n. 15, at §24:70. Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 219, 51 U.S.P.Q.2d 1882, 1890 (2d Cir. 1999) (the court opined that consumer confusion is evidence of dilution by blurring: ‘A junior use that confuses consumers as to which mark is which surely dilutes the distinctiveness of the senior mark.’). J. B. Swann, ‘Dilution Redefined for the Year 2000’ (2000) 37 Houston L. Rev. 729, 748, (2000) 90 Trademark Reporter 823, 841 (‘Confusion and dilution are states of mental association existing on a continuum that begins with a mistake as to origin and ends with a gradually diminishing appreciation of the original’).

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mark that confuses does not necessarily dilute. It does not because dilution is and should be a separate legal theory positing a different kind of damage to a mark caused by a different form of consumer perception. Any attempt to weld the two doctrines together is bound to result in error and bafflement. Examples are the 2003 European Court of Justice decisions in Davidoff and Adidas.

2. Europe: the 2003 EC Davidoff and Adidas decisions In its 2003 Davidoff decision, the EC rejected the opinion of Advocate General Jacobs and decided, contrary to the wording of the Directive, that the anti-dilution provisions could be (and later in Adidas said they must be) invoked against a competitor.41 Advocate General Jacobs argued that the anti-dilution provisions of Directive (Articles 4(4)(a) and 5(2)) were a special form of exclusive rights reserved solely for cases of nonsimilar goods or services. In my view, Jacobs’ view is sound and has a firm foundation in the history and basic theory of the dilution concept. But, inexplicably, the Court rejected Jacobs’ opinion and held that an anti-dilution law is an over-arching legal remedy applicable to any and all situations, whether the goods and services are competitive, similar or non-similar. The Court later the same year adhered to its position in the Adidas case.42 The Court said that Article 5(2) ‘cannot be given an interpretation which would lead to marks with a reputation having less protection where a sign is used for identical or similar goods or services than where a sign is used for non similar goods or services’.43 I interpret this as meaning that to not apply an anti-dilution law to similar goods cases would be to give strong marks ‘less protection’ than weaker marks under overall trade mark law. This, I think, reveals a misunderstanding of why the anti-dilution concept was created in the first place. Reserving the extraordinary protection of an anti-dilution law to cases of ‘non similar’ goods or services (as the Directive explicitly states) does not give ‘less’ protection to strong marks with a ‘reputation’. The concept of an anti-dilution law was specifically created to create more protection in the form of a special and extraordinary remedy for strong and famous marks. But this extra 41

42 43

Davidoff & Cie SA v. Gofkid [2003] 1 CMLR 35 (the owner of the mark davidoff, registered and used on jewellery and smokers’ articles, sought to prevent the registration and use in Germany of the mark durfee for similar goods.) Case C-408/01 Adidas-Salomon AG v. Fitnessworld Trading Ltd. [2004] 1 CMLR 14. Davidoff & Cie SA v. Gofkid, supra n. 41, para. 25.

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protection was limited to situations where even an expansive version of the traditional likely confusion test would not be successful. Marks with a ‘reputation’ do not receive ‘less’ protection under the explicit language of Articles 4(4)(a) and 5(2) of the Directive – they receive more protection. When the goods or services of the contesting parties are competitive or similar, then the traditional confusion-based rules apply to their broadest and most robust extent. If the mark is so strong as to have a ‘reputation’, then in cases of competitive or similar goods or services that mark should have no difficulty prevailing under the traditional confusionbased rule of law. There should be no need to switch gears and invoke the extraordinary remedy of an anti-dilution law. Even more surprising to me was the ECJ’s decision in Adidas that a nation that has incorporated the exact language of the Directive in its domestic law (the whole point of harmonization) is not permitted to interpret it as written – to apply ‘dilution’ solely to cases of non similar goods or services.44 Rather, the EU nations must apply their anti-dilution laws to cases of similar goods and services, regardless of the literal language of the Directive. I find it astonishing that the ECJ should read the word ‘not’ out of the Directive45 based on the spurious reasoning that the literal wording gives ‘less’ protection to strong marks with a ‘reputation’. The Court is stretching the Directive beyond the concept of what ‘dilution’ means and why anti-dilution laws were created.

3. In the United States The federal Act is not limited to the traditional non-competitive setting in which the concept of ‘dilution’ was first envisioned by its creators.46 Of course, this is inconsistent with the rationale for the concept of dilution. 44

45 46

Case C-408/01 Adidas-Salomon AG v. Fitnessworld Trading Ltd. [2004] 1 CMLR 14. Adidas sued Fitness world in a Dutch court, asking for a preliminary injunction, claiming that defendant’s two stripe design on sports clothing both infringed and diluted Adidas’ triple stripe design. The Dutch court found no likelihood of confusion and no dilution because the defendant’s stripe design was used solely as decoration and ornamentation. The ECJ said that a nation, if it enacts the ‘optional’ language of Article 5(2) must extend it to cases of similar goods: para. 20. Article 5(2) states that the challenged use must be ‘in relation to goods or services which are not similar to those for which the trade mark is registered’ (emphasis added). See Lanham Act s. 45 definition of ‘dilution’, which states that dilution can exist ‘regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties’.

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Some US courts have ignored this rationale and have applied the antidilution law in cases of competitive or similar goods. For example, in the Nabisco ‘fish cracker case’, the parties were competitors, both making and selling snack crackers.47 The trial court granted and the Second Circuit Court of Appeals in New York affirmed, a preliminary injunction against Nabisco’s imitation of Pepperidge Farms’ fish-shaped goldfish brand crackers. The injunction was based solely on anti-dilution law. The district court first considered plaintiff ’s dilution claim, admitting that it considered plaintiff ’s likelihood of confusion claim last and then only ‘in the most cursory fashion’. No likelihood of confusion was found for reasons that seem highly dubious. In my view, the court had it backwards: the traditional likelihood of confusion test should have been the focus of this case between competitors, not an afterthought to the main show of a dilution analysis. In my opinion, the anti-dilution laws should only be rarely and sparingly applied to cases involving parties selling in the same market. The anti-dilution theory was not designed or conceived to apply to such cases and it makes a poor fit. It is the wrong tool for the job. Its mis-use in competitive situations is bound to upset the balance of free and fair competition and to deform the anti-dilution doctrine.48

4. Conclusion on similar goods cases I believe that both the European Court of Justice and some American courts, by a superficial reading49 of their statutes without reference to their basis in history and logic, have carried the law beyond that encompassed within any concept of ‘dilution’.

F. Conclusion I agree with Jonathan Moskin’s view that no matter how much one embraces the theory of dilution of marks, proving that some kind of ‘dilution’ damage to a mark has resulted is a formidable task: ‘The difficulty with dilution . . . is that although the broad conceptual outlines of 47

48 49

E.g. Nabisco, Inc. v. PF Brands, Inc., 191 F.3d 208, 222 (2d Cir. 1999) (‘[W]e believe that dilution can occur where the junior mark’s use competes directly with the senior’s as well as where the junior use is in a non-competing market’). See J. T. McCarthy, supra n. 15, at §24:112.1. It is a superficial reading in that it has been an overly literal statutory reading in America and a contra-literal reading in Europe.

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the theory are readily understood, it is extraordinarily difficult to prove in any given case that a mark has been diluted, or even to know how to go about assembling such proof.’50 The US Supreme Court in the Victoria’s Secret case took only a small first step to try to resolve this dilemma. The ECJ has not yet been presented with a case raising the difficulty of proving that ‘dilution’ has in fact occurred. I agree with those who support a strong and expansive anti-dilution law that there are indeed cases of an accused use of a famous mark which many would agree constitute a form of free riding or unfair competition, but which are not taken care of by even an expansive form of the test of a likelihood of confusion of sponsorship. But I think that those cases are not nearly so frequent or common as anti-dilution law advocates claim. Nor do such instances cause an indisputable and clearly demonstrable injury to the famous mark. What is especially disappointing to me is that neither the US Supreme Court nor the European Court of Justice has carefully examined the historical, logical and theoretical foundations of the dilution concept in order to resolve rationally the thorny questions surrounding anti-dilution laws. On both sides of the Atlantic, the courts have instead resolved cases by an abstract reading of the wording of their respective laws, divorced from their theoretical foundations. Until this approach is modified, I fear that little progress towards clarity can be made. 50

J. Moskin, ‘Victoria’s Big Secret: Whither Dilution under the Federal Dilution Act?’ (2003) 93 Trademark Reporter 842, 843.

12 Unfair competition: is it time for European harmonization? gerald dworkin ∗

Professor Cornish’s pioneering textbook on Patents, Copyright, Trade Marks and Allied Rights first appeared in 1981. Its rather conservative title no doubt reflected the general lack of familiarity then with the term ‘Intellectual Property’. It was an important area of law, but left to the specialists and their clients; the wider world knew little of it or of its significance. Successive editions of the text have witnessed a transformation; the emergence of intellectual property from a backwater to feature prominently now as valuable property demanding attention from those involved in most forms of economic activity and from politicians and others involved in national and international affairs. There was a paucity of intellectual property literature then; today it is overwhelming. IP laws, now, are stronger, more extensive, more pervasive, harmonized and globalized than ever could have been contemplated in 1981. TRIPS, introduced to ensure that the legitimate channels of exploitation of intellectual property were not undermined by inadequate laws or ineffective means of monitoring and enforcing them, projected the intellectual property image throughout the world. Thereafter, efforts were made to ratchet up the minimum standards of TRIPS to TRIPS-Plus by international conventions (such as the WIPO Copyright Treaties), international resolutions (such as those affecting trade marks and the internet and wellknown marks) and, as a surprising recent development, by means of an increasing number of bilateral Free Trade Agreements. There are many, however, who are now alarmed by what has been a seemingly unstoppable intellectual property blitzkrieg. One of the themes underlying Professor Cornish’s approach to intellectual property is that of proportionality: whilst it may be appropriate to develop intellectual ∗

Emeritus Professor of Law, King’s College, University of London; Director of the Intellectual Property Academy, Singapore.

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property law in accordance with its raisons d’ˆetre, namely to encourage and protect the results of innovation, creativity and consequential investment, it is necessary to guard against excessive protection which can hamper competition without serving any socially useful purpose. This view is shared by most specialist intellectual property judges, certainly those presently on the UK bench. These voices of caution and moderation have today been joined by more strident and more varied interest groups which are far more questioning and hostile to the ways in which intellectual property is being exploited and some, indeed, challenge the very existence of intellectual property itself. Hence, globally, the intellectual property world and opposing interests are battling to establish acceptable compromises to cope with the threats and benefits generated by digital and other technologies in a world of massive counterfeiting and piracy and ubiquitous means of copying and disseminating intellectual property products. Through successive editions of his textbook and in other writings, Professor Cornish, with characteristic elegance, has concisely incorporated, analysed and reflected on these developments. There have been significant changes in virtually all areas of intellectual property and his insights on these are second to none. There is one topic, though, which has remained practically unchanged since 1981: unfair competition. UK law has scarcely moved during this period and Professor Cornish’s treatment of the topic in the 5th edition remains much the same as in his first.1 This is somewhat surprising since, conceptually, unfair competition is a remedy which provides an opportunity for courts to explore the proper limits of intellectual property protection; and it is said to demonstrate a major divide between the civil and the common law intellectual property systems. There were some calls in the very early days of the European Community for a re-examination of the law of unfair competition, but for the most part they were ignored.2 Similar calls have been made more recently. Since large parts of European IP law have now been harmonized, usually with express provisions that other rights and remedies, including unfair competition, remain unaffected, is it likely or desirable that attention should now be directed at this matter? This paper will address the issue briefly. 1 2

Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th ed., 2003), paras. 1-13–1-22. There have been very few studies; but see the excellent work by A. Kamperman Sanders, Unfair Competition: the Protection of Intellectual and Industrial Creativity (Clarendon, 1997).

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From a UK and Irish perspective, the harmonization of European laws has frequently resulted in these outnumbered defenders of common law principles having to give way to the overwhelming weight of the civil law, although not always and not yet for unfair competition. Unfair competition has been championed by civil lawyers as providing greater protection against parasitic competitors than the common law, without any obvious or untoward harm to trade in relevant areas of economic activity. Most common lawyers remain unconvinced. To them, the civil law remedy constitutes a threat to the proper balance between intellectual property rights and the competitive market. To them, ‘unfair competition’ is an alien and undesirable term As is so often the case, both perspectives are extreme. When the mists of misunderstanding are cleared away, it can be seen that both systems provide similar remedies for most forms of ‘unfair competition’ and that, where the civil law does provide more extensive protection, it does so uncomfortably, lacking a clear perspective or principle as to how far its more extensive protection should go. To focus properly on the key issue of concern to common lawyers, it is useful to turn to Deane J’s analysis in Moorgate Tobacco Co. v. Philip Morris3 of the term ‘unfair competition’ which has been used in judgments and learned writings in at least three distinct ways, namely: ‘(i) as a synomyn of the doctrine of passing off; (ii) as a generic name to cover the range of legal and equitable causes of action available to protect a trader against the unlawful trading activities of a competitor; (iii) to describe what is claimed to be a new and general cause of action which protects a trader against damage caused either by “unfair competition” generally or, more particularly, by the “misappropriation” of knowledge or information in which he has a “quasi-proprietary” right.’

Essentially, then, the question is whether the common law should adopt the third category approach of a new and general unfair competition cause of action which has the capacity to reach beyond passing off and the other economic torts. Common law judges have strongly opposed such a general cause of action. Deane J, in the same case, explained that the rejection of –

3

[1985] RPC 219.

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gerald dworkin ‘a general action for “unfair competition” involves no more than a recognition of the fact that the existence of such an action is inconsistent with the established limits of the traditional and statutory causes of action which are available to a trader in respect of damage caused or threatened by a competitor. Those limits, which define the boundary between the area of legal or equitable restraint and protection and the area of untrammelled competition, increasingly reflect what the responsible Parliament . . . has determined to be the appropriate balance between competing claims and policies.’

Yet, curiously, Article 10bis of the Paris Convention requires all Member States to provide ‘effective protection against unfair competition’. Does this mean that, in opposing a general tort, the courts are ignoring these international obligations? That depends, of course, on the scope of the term ‘unfair competition’ in Article 10bis, for if effective protection of all that it comprises is provided through means other than a general unfair competition remedy, then there would be no breach of the Paris Convention. Article 10bis(2) helps to some extent: ‘Any act of competition contrary to honest practices in industrial and commercial matters constitutes an act of unfair competition.’ That vague definition, which is featuring more frequently in international documents and legislation, is elaborated in Article 10bis(3), but the words ‘the following in particular shall be prohibited’ indicate clearly that it is not an exclusive definition. The matters expressly prohibited in the Article relate essentially to competitive activities which cause confusion or deception in the market place (misrepresentation) and false allegations which in some sense discredit and damage a competitor. These two types of conduct are of the essence of actionable unfair competition. Most relevant litigation in civil law jurisdictions involves such behaviour. The common law jurisdictions also provide protection, not by using a general all-embracing tort of unfair competition, but by employing the narrower and more specific torts of passing off, injurious falsehood and the rest of those little-used torts coming under an umbrella term called the ‘economic torts’. The question left unanswered in Article 10bis is whether there is another class of activity ‘contrary to honest practices’ which is actionable in the civil law countries but not in the common law countries and which could be regarded as within the remit of the Article. There is: misappropriation; more particularly ‘misappropriation without misrepresentation’. Although, in truth, this comprises only a small part of the

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coverage of the civil law concept of unfair competition, this is what is regarded as its essence by many in common law countries. Common law courts, in setting their sights against providing a remedy against misappropriation as such, have emphasized the public interest in ensuring that ‘unfair’ competition does not undermine the legitimate freedom of traders to compete ruthlessly against each other. Harman J put the matter colourfully: ‘The damage by one trader to another’s trade is the essence of the results of competition. The man who makes a better mousetrap, leading to people beating a path to his door to buy it, will inevitably damage the business of the makers of the earlier, worse mousetraps; they will, perhaps sadly, go out of business unless they are backed; but that is what competition is about; and that is what has been the driving force for the success of the capitalist world. It is an absolutely fundamental proposition . . . that this alleged tort really amounts to saying that there has been competition, and adding the old nursery cry “It’s unfair!” To that I would only cite my nanny’s great nursery proposition: “The world is a very unfair place and the sooner you get to know it the better.” . . . In my view, unfair competition is not a description of a wrong known to the law. Competition that causes some loss may also be unfair because it breaks existing legal rights, but competition which is effective is not thereby unfair.’4

Jacob J expressed the same view, more soberly, in Hodgkinson & Corby v. Ward’s Mobility Services:5 ‘There is no tort of copying. There is no tort of taking a man’s market or customers. Neither the market nor the customers are the plaintiff’s to own. There is no tort of making use of another’s goodwill as such. There is no tort of competition.’ One of the frequent, but often overstated, claims made for the common law is that its evolutionary approach can normally, although not necessarily immediately, cope adequately with new problems. Thus, passing off, which covers perhaps the most important part of the concept of unfair competition, is a much more extensive remedy today than it was decades ago. It has developed by a gradual stretching of the capacities of the three major elements of the action: goodwill, confusion and damage or the likelihood of damage. Thus, the first element, goodwill, is no longer strictly confined to a single business or undertaking, as the well-known champagne and wine cases demonstrate. Similarly, the need for a trader to prove that it has a commercial goodwill within 4

Swedac v. Magnet & Southern [1989] FSR 243.

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[1995] FSR 169.

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the jurisdiction in which it is protected, as opposed to a strong reputation in another country, has been relaxed in many common law countries. The concept of ‘confusion’ has also become a variable feast. Even a century ago, it became accepted that there could be actionable confusion which went beyond confusion as to the origin of goods: a trader who sells genuine goods but misleads the consumer not as to its origin but as to its quality, e.g. second-hand, is also liable for passing off. Where courts would like to provide a remedy but need to justify this by finding some kind of confusing conduct, tenuous forms of confusion have occasionally been accepted; a whiff of confusion somewhere, although not necessarily at the point of sale, may suffice. Hence, the courts have dabbled with the concept of ‘post-sale’ confusion and, even more questionably, ‘initial interest’ confusion in order to ground an action. As far as damage or the likelihood of damage is concerned, common law courts no longer look solely at loss or potential loss of profits. Loss of licensing opportunities has opened the door to successful actions against traders who are not direct business competitors in connection with both similar and dissimilar goods or services. Now that the concept of dilution has been introduced into many trade mark codes, via uneasy US doctrine, the common law courts appear to be readier to explore the extent to which the blurring or tarnishing of a commercial brand or image is sufficient to satisfy the likelihood of damage requirement. The acceptance of ‘reverse passing off’ as a variant of the tort of passing off proper demonstrates how common law courts can extend the reach of the law by treating what is essentially non-confusing and so nonactionable misappropriation as actionable misrepresentation; the argument being that where a person shows a customer the plaintiff ’s product as an example of its own work, there is sufficient confusion to allow the plaintiff to sue for passing off, even though the customer may never have heard of the plaintiff and was not confused as to the origin of the goods to be sold to him. In point of fact, as the US Supreme Court has recently shown in Dastar v. Twentieth Century Fox,6 such a case is less about confusion than misappropriation – the taking of something created by the plaintiff without licence. These and other judicial devices enable courts to go some way in providing appropriate remedies in connection with new forms of unfair competition. Yet, in spite of what many thought was encouragement from

6

123 S.Ct. 2041 (2003).

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the House of Lords,7 common law courts are not prepared, overtly, to provide a remedy in situations of unjustifiable misappropriation, absent some additional form of misrepresentation. Two reasons are normally advanced for this: first, uncertainty and unpredictability; secondly, a general action of this kind could undermine the established policy justifications for the carefully defined intellectual property monopolies and quasi-monopolies. The first concern, that of uncertainty, was clearly expressed by Deane J in the Moorgate case: ‘Neither legal principle nor social utility requires or warrants the obliteration of . . . [the boundary between the area of legal or equitable restraint and protection and the area of untrammelled competition, [which] the responsible Parliament . . . has determined to be the appropriate balance between competing claims and policies] by the importation of a cause of action whose main characteristic is the scope it allows, under high-sounding generalisations, for judicial indulgence of idiosyncratic notions of what is fair in the market place.’ Comments of this kind display an unusual and false modesty on the part of the judiciary. Whilst it may be true that it is not for the courts to interfere too boldly in policy matters more sensibly left for the legislature, judges are not automatons and use their judgment and discretion in applying vague concepts on an almost daily basis. The need to determine whether conduct is reasonable (for example, in the law of negligence) or fair (for example, in assessing the copyright defence of fair dealing or fair use) are familiar exercises for them, which they usually handle well. In any event, this concern has recently been made even less relevant as a result of the recently harmonized European trade mark laws. As a result of the Trade Marks Directive, all Member States, including the common law jurisdictions, have incorporated unfair competition language into their trade marks regimes. For example, Article 6 of the Directive sets out various defences to trade mark infringement, provided the defendant has acted ‘in accordance with honest practices in industrial or commercial matters’, the precise language used in Article 6bis of the Paris Convention. The second objection has far more substance. All monopoly or quasimonopoly rights are regarded as exceptions to the general principle which abhors monopoly and favours free competition. The codes providing for patents, copyright, trade marks and designs have been developed with

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considerable precision and have legislative approval. Dixon J expressed this well in Victoria Park Racing Co. v. Taylor:8 ‘Courts of Equity have not in British jurisdictions thrown the protection of an injunction around all the intangible elements of value, that is, value in exchange, which may flow from the exercise by an individual of his powers or resources whether in the organisation of a business or undertaking or the use of ingenuity, knowledge, skill or labour. This is sufficiently evidenced by the history of the law of copyright and by the fact that the exclusive right to invention, trade marks, designs, trade name and reputation are dealt with in English law as special heads of protected interests and not under a wide generalisation.’

It is this consideration which has been particularly pertinent in the United States in seeking to determine whether its unfair competition remedy (which is virtually a synonym for passing off/palming off and related actions) should encompass misappropriation. The majority of the Supreme Court in the famous case of International News Service v. Associated Press9 was prepared to do so. Pitney J developed a superficially attractive ‘reaping without sowing’ argument. The defendant was – ‘appropriating to itself the harvest of those who have sown. Stripped of all disguises, the process amounts to an unauthorised interference with the normal operation of the plaintiff ’s legitimate business precisely at the point where the profit is to be reaped, in order to divert a material portion of the profit from those who have earned it to those who have not; with special advantage to the defendant in the competition because of the fact that he is not burdened with any part of the expense of gathering the news . . . [A] court of equity ought not to hesitate long in characterising it as unfair competition in business . . . It is said that the elements of unfair competition are lacking because there is no attempt by the defendant to palm off its goods as those of the plaintiff, characteristic of the most familiar, if not the most typical, cases of unfair competition . . . But we cannot concede that the right to equitable relief is confined to that class of cases. . . . The defendant’s conduct differs from the ordinary case of unfair competition in trade principally in this that, instead of selling its own goods as that of the plaintiff, it substitutes misappropriation in the place of misrepresentation, and sells the plaintiff ’s goods as his own.’ (Emphasis added.)

Whether as a consequence of the powerful dissents in that case of two Supreme Court giants, Brandeis and Holmes JJ, or for other reasons, the 8

(1937) 58 CLR 479.

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248 U.S. 215 (1918).

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decision has been more ignored (outside the lecture halls) than applied. US unfair competition law covers operates primarily passing off and related economic torts. With very few exceptions, the US judiciary has fought shy of developing any strong unfair competition misappropriation theory. Thus, recently, in National Basketball Association v. Sports Team Analysis and Tracking Sys. Inc.10 the INS v. AP decision was limited to its special facts and treated as a remedy available to protect a plaintiff whose ‘hot news’ has been misappropriated. The ‘hot news’ doctrine applies where: 1. 2. 3. 4.

the plaintiff generates or collects information at some cost or expense; the value of the information is highly time sensitive; the defendant’s use constitutes free-riding at the plaintiff’s expense; the defendant’s use is in direct competition with the plaintiff’s product or service; and 5. the ability of defendants and others to free-ride would reduce the plaintiff’s incentive to gather information so drastically that its incentive to continue making the information available would be ‘substantially threatened’. This doctrine, together with the ‘famous marks’/dilution developments, seems now to mark the boundaries of misappropriation in the United States. If neither the common law nor US systems have any properly developed misappropriation unfair competition law, and are chary of getting involved with it, how then do civil law unfair competition systems deal with such matters? The answer is, ‘with difficulty’. As mentioned, there are relatively few cases based upon misappropriation simpliciter, compared with cases which involve misrepresentation and other factors which are easily catered for in the common law. Civil law jurisdictions appear to have no common approach to these matters. Some appear to be just as uneasy about moving away from the comforting control of misrepresentation as the common law courts. Others, seemingly less concerned, have developed, albeit cautiously, remedies in similar ways to the common law, but without being fettered by the need to find the existence of confusion. For example, German unfair competition law no longer restricts remedies to competitors; and traders dealing with dissimilar goods cannot evade the scrutiny of the courts. Also, as in the common law, the concept of dilution has been used to widen the reach of ‘unfair’ behaviour. The French law of ‘concurrence deloyale’, too, is beginning to embrace a concept of 10

105 F.3d 841 (2d Cir. 1997).

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‘economic parasitism’ to provide appropriate remedies in a modern society. Many countries are prepared to interfere where a defendant unnecessarily ‘slavishly copies’ in order to appropriate the benefit of the plaintiff’s product; some look at the defendant’s motives and are prepared to interfere when the defendant has acted unconscionably. Yet all these developments are slow and short of convincing principle. For the nagging question keeps on arising: if people are free to copy in the absence of any established intellectual property rights preventing then from doing so, how can it be unconscionable simply to copy the plaintiff’s unprotected product? If ‘patenting around’ an invention is not infringement, why should the competitor be at risk of an unfair competition suit? One theme common to most systems is that copying, without more, does not constitute unfair competition. A simple claim for misappropriation without misrepresentation normally cannot succeed. To justify an intervention in the name of unfair competition, it is usually necessary to go beyond that and look for some additional factor, a plus factor, to justify the intervention of a court. The problem, though, is to determine what these additional factors are, and why they should trigger the intervention of the court. Interesting recent attempts to grapple with this problem have been made in the Israeli courts in the context of its Unjust Enrichment Law.11 To establish unjust enrichment, a plaintiff has to show that: (i) the defendant has been enriched; (ii) the enrichment of the defendant emanates from the plaintiff; and (iii) the enrichment of the defendant is unlawful or ‘unjust’. The Israeli courts, in accepting that copying, without more, is not unjust, emphasized that there must be an ‘additional element’ constituting unfair competition. In A.S.Y.R. v. Forum (1998), a decision of the Israeli Supreme Court, Barak P identified some of the criteria which might be relevant in identifying a sufficient additional element: (a) the more the work that has been copied is important, novel, unique and makes a substantial contribution (to the public interest), the stronger the likelihood that the copying or imitation thereof could be regarded as unfair competition; (b) the efforts invested by the creator and by the copier; (c) the intensity of the copying, that is, whether it was systematic or sporadic; 11

This description has been taken from an internet note by Mr Tal Band of Horowitz & Co. Unfortunately, it appears that the note is no longer on the internet.

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(d) the mental state of the copier, that is, whether he was aware of the copying; (e) the existence of alternatives for copying – when reasonable alternatives exist for the manufacturing of a product, similar in function and different in its appearance, there is a stronger tendency to see the copying of the appearance as unfair competition; (f) the result of the copying, that is, when copying results in the potential deterrence of manufacturers from investing in new products and technologies, there should be a stronger inference of unfair competition. The interrelationship between established intellectual property rights and unfair competition was also addressed, but apparently not completely resolved. Thus, in the view of some members of the Court, the fact that a product did not meet the relevant requirements for intellectual property protection was not necessarily a bar to recovery; and ‘a plaintiff who could have registered his right but did not should be expected to provide the Court with an adequate explanation for not doing so. Failure to register a recognizable right does not “shut the door” to a remedy based on unjust enrichment, but it would be a relevant consideration allowing the Court more room for refusing to grant such a remedy’. In seeking to demonstrate that an unfair competition remedy was not necessarily inconsistent with the established intellectual property rights, it was emphasized that protection offered by the Unjust Enrichment Law was limited and considerably weaker than the protection offered by the laws of intellectual property. Protection against unjust enrichment would be given only for a limited period, which does not come close to the periods of protection offered by the specific laws of intellectual property. Whilst this is a welcome attempt to grapple with the problem of the ‘additional factor’, it leaves many questions unresolved. The lack of a clear and widely applied misappropriation policy in the civil law courts does not bode well for those who would like to see the common law expand. How far is unfair competition a matter of international interest? From the evidence of TRIPs, there appears to be little such interest. There is no special section on unfair competition, which is referred to in only two places, namely, in the section on The Protection of Undisclosed Information, a form of misappropriation not based on misrepresentation (Article 39) and in the section on Geographical Indications (Article 22(2)(b)). WIPO has shown some, though not overly enthusiastic interest, by publishing its Model Provisions On Protection Against Unfair Competition (1996). Much of the document deals with the subject matter specifically

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referred to in Article 10bis of the Paris Convention and also confidential information, but there are occasional references to unfair competition situations going beyond confusion. In earlier drafts of the document, specific references were made to misappropriation and ‘slavish copying’ but neither term appears in the final version. Professor Cornish’s criticism of a very broad model law of unfair competition issued by WIPO being treated by developing countries as having the same force as an international convention to be uncritically implemented has perhaps been heeded.12 In many cases, new forms of undesirable business misappropriation can be dealt with by remedial legislation; assuming that the problem is sufficiently general to justify legislative attention. It is not always easy, though, to legislate quickly or at all. Thus, even though there was a positive reaction on the part of the UK Government in response to requests for amendments to the copyright legislation to cover format rights expressly, the task was abandoned as too difficult. Accordingly, format rights which are an important commercial product, are more difficult to protect in the UK than they are in civil law countries. There are several examples of unfair competition law being used to protect creators of television formats which have been unfairly misappropriated. Another example in the UK of an unwillingness to deal with a major case of misappropriation was the unsuccessful attempt by the brands industry to introduce unfair competition legislation to deal with the ‘lookalike’ problem where supermarkets and others, without causing confusion or using a registered trade mark, unfairly copy the get-up of successful products. In each of these cases, though, there is some force in the view that changes and developments in the general law were sufficient to cope with the problems. There are, of course, important examples of sui generis legislation which have been introduced to deal with particular areas of unfair competition. A relatively early example is the sui generis legislation protecting layout designs and semiconductor topographies. A much clearer example is the European Database right, which was introduced expressly to deal with those who misappropriate information from databases. Although providing a remedy against unfair competition, it has been created as a property right, which is one of the major reasons why there has been so much difficulty in the US in persuading the legislature to introduce a similar right. Indeed, if any provision to protect ‘sweat of the brow’ databases is to be accepted in the US, it is likely to be based upon a 12

W. R. Cornish, ‘Genevan Bootstraps’ [1997] E.I.P.R. 336.

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weaker unfair competition remedy, rather than a property right, and the current legislation before Congress couches the proposed remedy in the same terms as the ‘hot news’ doctrine restated in the Motorola case referred to above.13 And we must not forget the ingenuity of the courts in catching new forms of misappropriation by linking them to misrepresentation, as witness the One in a Million case,14 where cybersquatting, a clear case of misappropriation, was squeezed into the passing off formula on the grounds that a cybersquatter holds a potential ‘instrument of fraud’. Thus, the case for supporting the introduction of a wider common law tort of unfair competition to cover misappropriation has not been clearly made out. Perhaps, there should be more economic analysis of the arguments for or against expansion. The gaps in the law which might be filled satisfactorily by an expanded remedy should be identified more clearly. For example, is the law relating to character merchandising or personalities in need of a misappropriation remedy or is the evolving common law now coping more satisfactorily? Has the case for a broader form of unfair competition been weakened at all by the creation of other wide rights, in particular the recently created, broad European registered and unregistered design rights. The temptation to argue that since unfair competition and misappropriation doctrine now forms part of the European law of registered trade marks, the common law should be developed at least to match it is superficially attractive, but more work has to be done before many will really be convinced. Perhaps Professor Cornish was wise to urge restraint when, with reference to the WIPO Model on Unfair Competition Law, he said that ‘there is much to be said in favour of the view that today’s world needs to keep a strict rein on the spread of unfair competition liability, for it can all too easily become a weapon by which first entrants on to successful markets can engage in legalistic bullying of those who would subsequently seek to compete with them’.15 Whether or not that is the case, unfair competition is certainly an area of the law which deserves more detailed investigation, both the common law and the civil law. If the call for harmonization were to be heeded, then the common lawyers might have difficulty in keeping 13

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The Database and Collections of Information Misappropriation Bill [Act] of 2003, H. R. 3261, would allow database owners to sue in civil court for damages arising from the theft of the information in the database. British Telecommunications v. One in a Million [1999] FSR 1. W. R. Cornish, ‘Genevan Bootstraps’ [1997] E.I.P.R. 336.

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misappropriation at bay. Were that to happen then, if not by the next edition then the one after, Professor Cornish could be called upon to assess some exciting developments and might even be prepared to approve a more interventionist judicial approach. We shall see.16 16

Shortly after this paper was written, I came across the new edition of C. Wadlow, The Law of Passing Off – Unfair Competition by Misrepresentation (2004). This edition introduces an excellent analysis of the entire area, including a detailed description of the background to art. 10bis of the Paris Convention and other international agreements. It is interesting to note that Wadlow’s view, too, is that a European harmonization of unfair competition law is on the cards, not the least because of developments in European litigation which could lead to pan-European jurisdiction, even for unfair competition actions.

13 Coexistence between the tort of passing off and freedom of slavish imitation in Polish unfair competition law ∗ ´ stanisl
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William Cornish is one of the preeminent legal authorities of our time in the field of intellectual property. Those of us who have had the privilege of working with Bill know his independence, his openness to new ideas, and his ability to write clearly and persuasively. I have had the pleasure to collaborate with Bill in two distinct capacities: in the late 1960s, he was my tutor at the London School of Economics when I was a British Council graduate student; in the early 1990s, we both served as members of the Board of Overseers and the Scientific Council of the Max Planck Institute in Munich, the ‘Mecca’ of Intellectual Property legal research. Professor Cornish belongs among those great scholars who have always remained independent and served as advocates of the public interest. At a time of unprecedented pressures for greater protection of the intellectual property right and its ‘Europeanization’, he has remained aware of the risk of overprotection and stifling of competition as a result of granting too much protection to investors in the field of industrial property and copyright laws.

A. Introduction My article deals with the issues at the borderline between misappropriation of a competitor’s three-dimensional products (designs) and freedom of imitation in Polish law. ∗

´ member, Poland’s Professor of Law, A. Mickiewicz University School of Law, Poznan; Codification Commission; member, UNIDROIT Governing Board.

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In many EU countries, in particular Germany and France, protection against the direct imitation of products has been granted under the general notion of the tort of unfair competition. In some European jurisdictions protection against imitation of products has been accorded under the concepts of ‘misappropriation’, ‘slavish imitation’, etc.1 While explaining the scepticism of English and other common law judges to follow this trend, Professor Cornish explains that: ‘One of the most fundamental assumptions about a competitive economy has been that once a product enters a market, exactly that type of imitation needs to be present, at least as a potentiality. For no other mechanism will so efficiently secure the welfare of consumers as the prospect of such competition. The intellectual property rights in ideas (patents, copyrights, etc.) exist by way of limited exception in order to encourage the mental effort and productive investment which will procure new products and services. To add to their scope by a right against misappropriation or unfair imitation is to place an amorphous impediment in the way of competition by imitation and that is an inherently controversial step’.2

A similar rationale against the adoption of a new type of tort of slavish imitation has been forcefully emphasized by Jacob J in Hodgkinson & Corby Ltd. v. Wards Mobility Services Ltd., who cited with approval an earlier US decision rendered by Judge Learned Hand: ‘There is no tort of copying. There is no tort of taking a man’s market or customers. Neither the market nor the customers are the plaintiff’s to own. There is no tort of making use of another’s goodwill as such . . . At the heart of passing off lies deception or its likelihood, deception of the ultimate consumer in particular.’3

In the early 1990s, Poland was confronted with the task of harmonization of its intellectual property laws with those of the European Community. Although there is no EU directive in the field of passing off, the duty of approximation imposed on the Polish intellectual property regime under the so-called Europe Agreement (Article 62), was interpreted broadly to include unfair competition law.4 Poland’s international obligation of approximation of her laws with EC law encompassed a duty to ‘transplant’ 1 2 3 4

Compare W. Hefermehl, Wettbewerbsrecht (M¨unchen 1990), at pp. 541 et seq. W. R. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (4th ed., 1999), at p. 15. [1995] FSR 169. ´ See further S. Sol
tysinski, ‘Agreement on Association of Poland with European Communities’, 19 Polish Yearbook of International Law (1991–1992), at pp. 189–190.

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basic legal principles in a given area from leading ‘old’ European jurisdictions, especially in the absence of Community directives or regulations. Thus, it is clear from the above that Poland could follow a ‘pick and choose’ strategy of ‘importation’ of EU unfair competition rules, but only in those areas which were not covered by Polish international obligations under TRIPS or the Poland–United States Agreement on Economic Cooperation of 1991, which provided detailed and uniform standards for protection of trade secrets. The domains of ‘passing off’ and ‘puffing off’ belonged to the former category. The Polish Parliament passed a comprehensive Law on Combating Unfair Competition (‘LCUC’) in 1993.5 The LCUC consists of four basic parts: general provisions (ch. 1), delineation of specific torts of unfair competition (ch. 2), civil remedies (ch. 3), and criminal sanctions (ch. 4). The new law was largely patterned on the German Law of Unfair Competition. It is worth stressing the role of the socalled ‘general clause’, which states ‘an act of unfair competition consists of an act which is contrary to law or good business practices, provided it infringes or threatens to violate the interest of another business entity or customer’. The purpose of such a general concept of an act of unfair competition is to fill the gaps left by the specific torts of unfair competition set forth in the second chapter of the LCUC (passing off, misappropriation of trade secrets, misleading advertising, etc.). In the absence of established rules governing the concept of slavish imitation or passing off in the EU law or TRIPS, Poland opted for ‘select’ common law approaches in this field. The pertinent provisions of the LCUC on imitation of products are contained in Article 13, as follows: ‘1. Imitation of a finished product through the copying of its external shape by the use of technical means of reproduction shall be an act of unfair competition if it may cause to customers confusion as to the identity of the producer and/or the product. 2. Imitation of the functional characteristic of a product and in particular its external and internal construction and shape which guarantee its utility shall not amount to an act of unfair competition. If the imitation of the functional characteristics of a finished product requires reproduction of its distinctive shape, and this may cause customers to be mistaken as to the identity of the producer or the product, the imitator shall mark the product in an appropriate way.’

5

The Act of 16 April 1993, as amended in 1996, 1997, 1998 and 2002, hereinafter ‘LCUC’.

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It is clear from the above that the Polish definition of an act of unfair imitation is based upon the common law concept of passing off. Its central ingredient is misrepresentation by the defendant by copying the nonfunctional features of the other’s product. The foundation of the plaintiff ’s case must lie in proving that the imitation of his product may result in misleading the consumer as to the origin of the product. The proof of actual deception of the plaintiff ’s customers is not required. A reasonable likelihood of confusion is enough. Furthermore, the plaintiff must prove that the deed of the defendant at least threatens the interests of the former or the consumer. The latter requirement is not spelled out in Article 13 but is provided in the general clause (Article 3.1). As already mentioned, the general clause supplements the list of specific torts of unfair competition. Moreover, each specific statutory tort set forth in chapter 2 of the LCUC must comply with the requirements of Article 3. It is interesting to note that Article 13(2) of the LCUC delineates the limits of the ‘right to copy’, or rather it sets forth the requirements for exercising the freedom of imitation of the functional features of another’s products.6 After having established that at least in English jurisprudence the right to copy is a corollary of the traditional concept of passing off, the drafters of the LCUC persuaded the Polish Government and the Parliament that, for the sake of clarity, the boundaries of the freedom of imitation should be enshrined in the new law. According to Article 13(2) of the LCUC, an imitation of the functional features of a product not protected by intellectual property law does not constitute an act of unfair competition. The second sentence clarifies that the imitation of a competitor’s product may involve slavish imitation of such details where functional and non-functional elements are merged. In such a case, to avoid deceiving the consumer as to the identity of the producer and/or the product, the imitator is obliged to label his/her product appropriately to eliminate the risk of confusion.

6

While preparing the draft of Art. 13, I was influenced, in particular, by the gospels according to Black J in Sears, Roebuck & Co. v Stiffel Co. 376 U.S. 225, 239 (1964) and O’Connor J in Bonito Boats, Inc. v. Thunder Craft Boats, Inc. 109 S. Ct. 971 (1989). These and other US Supreme Court cases proclaimed a so-called ‘right to copy’ designs which are nonprotectable under intellectual property rights or pertain to innovations for which copyright or patent protection had expired. Thus, for instance, in the relatively recent case of Bonito Boats, supra, writing for the unanimous Court, O’Connor J cited with approval an early case where Judge Hand remarked that non-protected patterns may be copied ‘slavishly down to the minutest detail’: Crescent Tool Co. v. Kilborn & Bishop Co., 247 F 299, 301 (2d Cir. 1917).

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The requirement set forth in Article 13(2) in fine incorporates the advice offered by the US Supreme Court in Stiffel.7 There, the Court held that the State of Illinois was not permitted to apply its laws to prevent Sears from copying Stiffel’s unpatented product (a lamp), for that would interfere with the federal policy favouring competition beyond the bounds of federal law. The Court admitted that the lamps copied by Sears could have caused confusion in the consumer’s mind. However, the Court held that Illinois’ legitimate interests in preventing deception could be better achieved through labelling requirements. These would be less restrictive of competition than a total ban on copying. Although Poland is not a federal state, the rationale underlying Stiffel and Bonito Boats8 is the same. The history of intellectual property demonstrates the need to strike a proper balance between protection granted to ideas which are covered by intellectual property laws, and the right to imitate ideas and information in the public domain. Indeed, even in countries which do not have a federal system, public policy should encourage imitation in the absence of intellectual property protection or of conduct which causes a likelihood of confusion.9

B. Case law developments As in many EU jurisdictions, Polish courts were confronted with disputes involving the imitation of functional features of Lego toy bricks. Lego Trading A/S and Kirkbi A/S, Denmark (‘Lego’) produce and market the world-famous toy bricks which have been also successfully marketed in Poland. As the pertinent product is not protected by industrial property laws and the copyrightability of its design is doubtful, the owners of the brand brought a claim against its Polish competitors who were marketing slavishly imitated bricks under the trade mark ‘Cobi’. The plaintiffs alleged both a violation of Articles 310 and 13 of the LCUC. They alleged, inter alia, deception of consumers as to the origin of the product, slavish imitation, and misappropriation of goodwill.11 7 8 9

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Sears Roebuck & Co., supra n. 6, at 225. See supra n. 6. See Jacob J in Hodgkinson, supra n. 3. It is interesting to note that Jacob J quoted with approval Judge Learned Hand’s opinion in Crescent Tool, supra n. 6, where the latter said: ‘The critical question of fact at the outset always is whether the public is moved in any degree to buy the article because of its source and what the features are by which it distinguishes that source. Unless the plaintiff can answer this question, he can take no step forward. No degree of imitation of detail is actionable in its absence . . .’. Note 3 supra. The so-called general clause of LCUC. See the text accompanying n. 5 supra. Lego System v. K. Podles, R. Podles and Colbert Sp. z o.o. Supreme Court decision of 11 July 2002, OSNC 2003/5/73 at 78 et seq.

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The plaintiffs’ claims were rejected by the lower courts and, on extraordinary appeal (kasacja), also by the Supreme Court. The Court agreed with the Court of Appeal that the defendants had not acted in contravention of Article 13(2) of the LCUC. The competitive bricks marketed by the defendants constituted a slavish imitation of the functional features of Lego products. Indeed, they were even fully interoperable with Lego bricks, so that the consumers could play with both brands of the toys. Firstly, the Supreme Court found that in the absence of intellectual property rights, the plaintiffs could not prohibit imitation of their products. Second, the Court agreed with the lower courts that there was no likelihood of confusion. The defendants placed their trade mark ‘Cobi’ on each of the sides of their bricks. Furthermore, the ‘Cobi’ toys were marketed in packaging materials which were completely different from those of the Lego get-ups. Apart from prominently displaying the Cobi trade mark, the defendants’ packaging contained the full name of the firms and their addresses. Thirdly, the Supreme Court emphasized that it shared the dominant view among Polish commentators that the general clause of the LCUC does not provide a basis for granting business entities exclusive rights of exploitation for non-protectable designs or other innovations. Monopolistic rights subject to no term would be contrary to public policy.12 The Supreme Court rightly stressed that such rights would be inconsistent with the principle of freedom of economic activity enshrined in the Polish Constitution. Finally, the Court held that the facts established by the lower courts did not prove that the defendants violated any laws or acted contra bona mores. Hence, the plaintiffs’ argument that Cobi violated Article 3 of the LCUC also failed. In its decision of 26 November 1998, the Supreme Court dealt with a dispute where the plaintiff-appellant alleged that the defendant-respondent violated Articles 3 and 13 of the LCUC by manufacturing products which allegedly incorporated his proprietary design which was protected abroad but not in Poland.13 The gist of the complaint comprised an allegation that the defendant had misappropriated the pertinent design and had succeeded in registering it as a utility design in the Polish Patent Office. 12 13

´ S. Sol
tysinski, M. Po´zniak-Niedzielska, in Ustawa o zwalczaniu nieuczciwej konkurencji. Komentarz (J. Szwaja, ed.) (Warszawa 2000), at pp. 360–361. C.K.N. 904/97, as published in Orzecznictwo Sac du Najwy˙zszego No. 5/1999, item 97.

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Consequently, the plaintiff strenuously argued that the defendant had infringed Article 13 of the LCUC or at least acted in violation of bona mores contrary to the dictates of the general clause (Article 3). The Supreme Court held that in the case of a conflict between the LCUC and patent law or any distinct intellectual property statute, the latter laws prevail. Thus, as long as the registration of the defendant’s utility design is valid in Poland, the plaintiff-appellant may not seek protection under the LCUC. In other words, he must challenge the pertinent patent or other intellectual property right granted in Poland.14 Both the courts and commentators discussed the scope of application of Article 13 of the LCUC. In the Radio C case, for instance, the plaintiff alleged that the defendant violated Articles 3 and 13 of the LCUC by imitating a wellknown radio programme. The plaintiff maintained that the defendant’s radio station illegally borrowed the general idea of the competitor’s programme, including fictitious names of the personalities participating in the programme, which had been successfully aired for a long time by the plaintiff. The Court of Appeal filed a motion with the Supreme Court asking for a preliminary ruling on whether such competitive behaviour constitutes tortious unfair competition under Article 13 of the LCUC.15 The Supreme Court ruled that Article 13 of the LCUC applies only to acts of illegal copying of three-dimensional tangible products. However, it held that imitation of a radio programme may constitute an act of unfair competition under the general clause enshrined in Article 3. In its reasons, the Supreme Court explained the relationship between distinct intellectual property laws and the LCUC. In the Court’s opinion, in the case of a dispute regarding the pertinent copyright between two competitors, they are not precluded from seeking protection under the LCUC. At first glance, the Radio C case is difficult to reconcile with the earlier judgment of the Supreme Court in the utility design case referred to above.16 However, it should be observed that a holder of copyright, unlike the owner of a registered utility design, does not rely on a patent or copyright registration, which is based on an administrative decision that is accorded a presumption of validity until such decision is finally adjudicated null and void or 14

15 16

´ The decision was approved subject to some reservations by M. Kec pinski, a gloss pub´ Polskich No. 5/1999, item 91. M. Po´zniak-Niedzielska and lished in Orzecznictwo Sac dow ´ S. Sol
tysinski concurred with the Supreme Court, in Ustawa o zwalczaniu nieuczciwej konkurencji. Komentarz. (J. Szwaja ed.) (Warszawa, 2000), at p. 362. Decision of the Supreme Court of 23 February 1995, III C.Z.P. 12/95, as published in Palestra, No. 9-10, 1996, at 226. See the text accompanying n. 12, supra.

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expires. Hence, the parallel application of Article 3 of the LCUC seems to be appropriate in cases involving concurrent liability under copyright and unfair competition laws. Commentators also agree that cumulative protection enjoyed by a plaintiff under patent or other industrial property statutes, as well as under the LCUC, is sometimes justified if a set of relevant facts upon which the plaintiff relies falls within the ambit of an intellectual property law and a given tort of unfair competition.17 Some legal writers opt for an extension of the scope of application of Article 13 to get-up, wrapping and packaging.18 While agreeing that copying or imitation of such items is often undertaken in an effort to benefit from the competitor’s reputation, they accept that such acts of passing off may be pursued under the general clause (Article 3) rather than under Article 13 of the LCUC. The latter deals with an illegal copying of ‘ready products’. Only in a rare case when a given packaging or wrapping constitutes a ready and three-dimensional product may the plaintiff seek protection against its slavish imitation under Article 13. A lively debate continues as to whether the right to copy enshrined in Article 13(2) of the LCUC excludes a challenge of illegal imitation under the general clause. Podrecki and Traple maintain that even in a case of the proper designation of a copied product by way of prominently putting the name of the copier on the product, such practice may constitute an act of unfair competition in the event of misappropriation of the reputation of the copied product.19 The authors suggest that, in some cases, the copier should not only properly mark his copies but should also 17

18

19

The relationship between the LCUC and intellectual property laws protecting specific intangibles is subject to divergent opinions among legal authorities and judges. According to a dominant view, it is impossible to compare statute with statute. Rather, concrete rules defining a given tort of unfair competition ought to be compared with pertinent norms protecting a distinct intellectual property subject matter. For instance, the norms of the Trademark Law should be compared with the LCUC rules on protection of brand names and designations of an enterprise (undertaking) set forth in art. 5 of the Law. See ´ Problemy og´olne nowej ustawy o zwalczaniu nieuczciwej konkurencji, Ruch M. Kec pinski, Prawniczy, Ekonomiczny i Socjologiczny, No. 2/1994, at 11 et seq. J. Szwaja, n. 11, supra, at 58 et seq. A view prevails, however, that Polish law frequently allows cumulative protection under the LCUC and a specific law on industrial property, copyright or an allied right. Strictly speaking, the LCUC also represents a species of intellectual property law pursuant to art. 8(viii) of the Convention on Establishment of the World Intellectual Property Organization. Its broadly defined subject matter covers the concept of ‘fair competition’. P. Podrecki, E. Traple, Przejec cie lub na´sladownictwo formy zewnec trznej cudzego produktu jako czyn nieuczciwej konkurencji. Prace z Wynalazczo´sci i Ochrony Wl
asno´sci Intelektualnej (2001), No. 77, at 51. Ibid., at 52.

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introduce other changes (‘to keep distance between the two products’). There is no ground for such additional requirements in Article 13(2). Furthermore, an extensive construction of the general clause (Article 3) would be contrary to the clear public policy objective set forth in Article 13, which favours slavish imitation of products which are not protected by distinct intellectual property laws, including trade secrets law. Hence, copying is illegal only in the case of confusion and at least a threat to the interests of a competitor. It has been argued that business actors should be prohibited from following market leaders by imitating new series of their products.20 The argument was rejected by the Supreme Court in the Lego case.21 Indeed, manufacturing and putting on the market non-protectable imitations of a well known product (e.g. toy bricks) benefits the consumer. The fact that the copied toys are inter-operable with products marketed by the market leader is in the public interest and should be promoted, as long as there is no confusion as to the origin of the product and its manufacturer. Interoperability of the ‘original’ and a comparable new product is frequently an argument in favour of limiting the scope of a given species of intellectual property rights.22

C. The dilemma of parallel intellectual property rights The proliferation of new and distinct types of intellectual property rights leads to many forms of intended and unintended consequences. The relationships between the new species of intellectual property laws and the three traditional forms of protection of technological and cultural innovations (i.e. copyright, patent, and unfair competition law) are rarely defined by legislators. This frequently leads to an undermining of the basic assumptions of intellectual property laws, namely balancing the interests of the authors (innovators) or rather investors with the interests of society. The adverse social effects of parallel cumulative protection have been examined by several authors in connection with the triple-layer protection available to computer programs by patent, copyright and trade secret laws. Samuelson demonstrated that any multiple protection scheme for technological innovations leads to an unduly long period of protection 20 21 22

Ibid., at 55. Note 10, supra. See further W. Cornish, Inter-operable Systems and Copyright [1989] E.I.P.R. 391.

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for utilitarian solutions.23 Another author stressed that a combination of patent and copyright protection vitiates the stated objectives of the patent and copyright clause in the US Constitution by thwarting the disclosure of innovations, thereby limiting incentives to forego R&D costs and to exploit the existing pool of ideas without delay.24 The author persuasively argues that concurrent patent and copyright protection of a work creates a situation which is practically indistinguishable from that of double patenting.25 As demonstrated by Professor Cornish, allowing cumulative protection through registered designs and copyright leads to negative consequences from society’s perspective.26 For this reason copyright protection for designs was deliberately excluded from much of the industrial field in the 1911 and 1956 reforms of UK copyright laws. Section 51 of the Copyright Designs and Patents Act 1988 (UK) cuts out ‘the application of copyright to industrial products which are not themselves capable of being the subject of copyright’. It accordingly states that the act of making an article from a ‘design document or model’ which records or embodies a design cannot after all constitute ‘infringement’.27 Thus, Section 51 eliminates copyright protection from the design which is a ‘design document or model recording or embodying a design for anything other than an artistic work’. British legislators have been aware of the ill consequences of concurrent copyright, trade secret and passing off protection for unregistered designs. In the United States the courts limit some negative consequences of parallel protection by resorting to the doctrine of federal preemption. Thus, for instance, in Sears and more recently in Bonito Boats, the US Supreme Court refused to tolerate the extension of state unfair competition laws to non-protected designs or patterns which did not merit federal patent protection or involved technical solutions for which patent protection had expired.28 23 24 25

26 27 28

P. Samuelson, ‘CONTU Revisited: The Case Against Copyright Protection for Computer Programs in Machine-Readable Form’ [1984] Duke LJ 663, 734–735. Kline, ‘Requiring an Election of Protection for Patentable and Copyrightable Computer Programs’ (1985) 67 JPTOS at pp. 339; 364–366. ´ See generally S. Sol
tysinski, Legal Protection for Computer Programs, Public Access to Information and Freedom of Comparative Research and Development Activities (1990) 16 Rutgers Computers and Tech. L.J. 447. Note 2, supra at 364–365. Ibid., at 575. See Sears, Roebuck & Co. v. Stiffel Co. at 239 and Bonito Boats, Inc. v. Thunder Craft Boats, Inc., n. 6, supra.

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The dilemma of parallel protection of utilitarian designs has also been identified by the Polish Parliament. As already mentioned, Article 13(2) of the LCUC enshrines the concept of ‘slavish imitation’ of such patterns and designs, provided the copied product is properly marked by the competitor resorting to copying functional features thereof. However, there is no prohibition of concurrent protection of innovations or works and, in principle, legal doctrine allows concurrent intellectual property protection. The scope and prerequisites of such parallel protection has not been discussed in greater detail so far. Under Polish law, designs may be protected by patents, utility model and industrial model registration rights.29 The Polish Copyright Law of 199430 protects ‘every manifestation of creative activity of individual character . . . regardless of its value, destination and the mode of expression (work)’.31 Industrial patterns are expressly listed among copyrightable works (Article 2). To eliminate the negative consequences of cumulative protection of industrial designs, Article 116 of the newly passed Industrial Property Law provides that Copyright Law remedies aimed at protecting economic (pecuniary) interests of the copyright holder do not apply in the case of manufacturing products based upon industrial designs after the expiration of the registered right.32 The foregoing ‘conflict-of-laws’ rules are fully justified. However, in some cases, the exploitation of the industrial property right in the industrial design may be prevented by the copyright holder on the basis of his/her droit moral (e.g. the right of integrity of the work). Similarly, it is not clear whether the Polish legislator has the power to establish such a conflict-of-intellectual-property-laws rule covering all cases of expiration of the pertinent industrial design. Such industrial property rights may expire, for instance, due to non-payment of fees to the Patent Office, well before their statutory term of protection, while Article 7.4 of the Berne Convention provides for a minimum 25-year period of copyright protection for the designs.33 The question arises as to whether section 51 of the Copyright Design & Patent Act 1988 29 30 31 32 33

See Arts. 65, 95 and 105 of the Law of Industrial Property of June 2000, as published in Dziennik Ustaw, No. 119, Item 1117, hereinafter ‘Industrial Property Law’. The Law on Copyright and Allied Rights of 4 February 1994, as published in Dziennik Ustaw on August 1, No. 80, Item 904, hereinafter ‘Copyright Law’. Art. 1 of the Copyright Law. The registration right granted for an industrial design expires after 25 years. See further J. Barta and R. Markiewicz, ‘System Prawa Prywatnego’, in (J. Barta, ed.), Prawo autorskie (Warsaw 2003), at p. 27.

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(UK) is consistent with the Berne Convention. Arguably, the object of section 51 is a limitation of the application of copyright to industrial products ‘which are not themselves capable of being the subject of copyright’.34 The Industrial Property Law lacks a similar conflict-of-intellectualproperty-laws rule with respect to concurrent protection of utility models under industrial property and copyright laws. In principle, utility models should rarely qualify for copyright protection because, by definition, they constitute utilitarian patterns, which are not required for any artistic or ornamental features. However, a given utility model may possess characteristics qualifying it for copyright protection. In a recent case, the Warsaw Court of Appeal ruled that a utility model may enjoy cumulative protection under industrial property and copyright laws.35 Fortunately, in cases where plaintiffs claim such cumulative protection judges seem to require higher than usual thresholds of creativity and originality of the work constituting a utility or industrial design. The higher judicial requirements for copyrightability for models are visible, in particular, in an unpublished judgment of the Warsaw Court of Appeal involving a utility model, where the court held that the plaintiff must prove that the model shall be not only new but also that it must display discernible, individual and creative features.36 Cumulative copyright and industrial property protection for industrial designs, coupled with the Berne Convention standards provided for the minimum term of protection for such works (i.e. 25 years), may undermine the public policy rules enshrined in Article 13(2) of the LCUC and Article 116 of the Industrial Property Law. The judicially imposed standards of ‘creativity’ and ‘originality’ for such works seem to be interim measures for curtailing the detrimental effects of cumulative protection. The main problem consists in the practical deprivation of society of the expected benefits resulting from the expiration of a shorter industrial property right. Thus, for instance, in the case of cumulative protection of a design, where a registered industrial design or utility model right expires, the specific subject matter may still enjoy copyright protection despite the fact that following the expiration of the registration right, the innovation ought to fall into the public domain but may continue to enjoy protection under the Berne Convention.37 34 35 36 37

W. Cornish, n. 2 supra, at 575. Judgment of 1 February 1995, I Acz 1208/94, as published by J. Barta and R. Markiewicz, n. 33, supra, at 27. Ibid. ´ See further S. Sol
tysinski, n. 24, supra, at 455–474.

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It is worth mentioning that firms occupying leading market positions frequently seek extensions of their exclusive rights by way of trade mark, unfair competition or copyright protection. Fortunately courts refuse to approve the idea of trade mark registration for purely functional designs. Recently, for instance, the Supreme Court of Poland approved the Patent Office’s refusal to register the Lego trade mark consisting of the pertinent design.38 It is worth mentioning that Lego has been trying to secure limitless exclusive rights to their designs, despite the fact that the pattern of the toy brick has been borrowed from a long expired patent. Striking a healthy balance between the policies of intellectual property protection and the general rule of free competition, emphasized by the US, British and Polish courts referred to in this paper, requires activism and vigilance of those who believe in the supremacy of the rule of free competition in the process of shaping uniform international standards of intellectual property. 38

Supreme Court decision of 8 January 2003 III RN 240/01 (unpublished). Perhaps similar public policy reasons lie behind the Privy Council’s decision in Interlego v. Tyco Industries [1988] RPC 343, which approved Tyco’s reverse engineering of Lego toy bricks. In their Lordships’ opinion, the Hong Kong Court of Appeal correctly concluded that the Lego bricks did not qualify for copyright because they had been used for the purpose of industrial reproduction at the relevant time.

14 Confidentiality, patents and restraint of trade jim lahore ∗ and ann dufty ∗∗

A legal system which offers protection to the creator of confidential information, while at the same time granting patent protection to suitably qualified inventors, must accept that there may be hard cases when the two very different protection regimes come into conflict. The differences between the two regimes have been extensively documented1 and they are widely understood by those who work in the intellectual property field. That hard cases can still arise when an inventor seeks to maintain the confidentiality of disclosed information, while at the same time prosecuting an application for patent protection for an invention encompassed by that information, has, however, been given stark illustration in the recent decision of the High Court of Australia in Maggbury Pty Ltd v. Hafele Australia Pty Ltd.2 There is an inherent tension between the protection given to confidential information or trade secrets,3 and that given to patents for inventions which will inevitably be published in the process of prosecuting the application to grant.4 The essential requirement for protection of trade secrets ∗ ∗∗ 1 2 3

4

Professor Emeritus, University of London; Professorial Fellow, University of Melbourne. General Counsel, Corrs Chambers Westgarth, Solicitors. See, e.g., in the United States Lear v. Adkins 395 US 653 (1969) and Kewanee Oil Company v. Bicron Corporation 416 US 470 (1974). [2001] HCA 70; 53 IPR 1 (‘the Maggbury case’). This is true whether the protection is tied to the concept of unfair competition, as stipulated in the TRIPS Agreement, or under a more general equitable obligation to act in good faith as is the case in the Anglo/Australian systems. Article 39(1) of the Agreement on Trade Related aspects of Intellectual Property Rights (TRIPs Agreement) requires member countries to protect ‘undisclosed information’ in the course of ensuring effective protection against unfair competition as provided in Article 10bis of the Paris Convention (1967). Article 39(2) provides for protection against disclosure, acquisition or use ‘in a manner contrary to honest commercial practices’. A note to Article 39(2) indicates that this includes practices such as breach of contract, breach of confidence and inducement to breach.

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is that the information is secret – that it has ‘the necessary quality of confidence about it’.5 A person seeking patent protection must, however, disclose the invention in a manner sufficiently clear and complete for the invention to be carried out by a person skilled in the art. It is disclosure which provides consideration for the grant of the monopoly which the patent gives.6 Patent protection, and actions for protection of confidential information, are therefore not in any way complimentary. Rather, they should be regarded as offering alternative, and mutually exclusive, forms of protection.7 The fact that a patent application will, almost inevitably8 , lead to publication of the specification and the loss of any confidential information attaching to the invention, is often not fully appreciated by the inventor or patent applicant. In Mustad v. Dosen where the plaintiffs had, by their own act in applying for a patent, published the trade secret which they then sought to restrain the defendant from communicating, Lord Buckmaster summarised the problem in the following way:9

5

6 7

8 9

For a comprehensive survey of the law of confidential information in the common law system see W.R. Cornish and D. Llewelyn, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (5th ed., 2003); and in Australia, R. Dean, The Law of Trade Secrets and Personal Secrets (2nd ed., 2002). Coco v. A N Clark (Engineers) Ltd [1969] RPC 41 at 47 per Megarry J (England, Chancery Division), quoting Lord Greene MR in Saltman Engineering Co. Ltd v. Campbell Engineering Co Ltd (1948) 65 RPC 203 at 215 (England Court of Appeal). Megarry J’s statement of the requirements for the protection of confidential information has been adopted by many courts in the United Kingdom and in Australia. The requirement of disclosure is a condition under Article 29(1) of the TRIPs Agreement. In Australia see Patents Act 1990 (Cth), s. 40(1), (2) and (3). The tension between trade secrets and the patent law requirement of disclosure, was considered by the United States Supreme Court in Kewanee Oil Company v. Bicron Corporation 416 US 470 (1974). In holding that state trade secret protection was not pre-empted by operation of the federal patent laws, the court considered the often competing objectives of the two systems. Marshall J noted that trade secret protection provided a substantial disincentive to seeking patent protection thus depriving society of the benefits of public disclosure of the invention which it was the policy of the patent laws to encourage. Douglas and Brennan JJ considered that the conflict between the two was obvious: ‘The decision of Congress to adopt a patent system was based on the idea that there will be much more innovation if discoveries are disclosed and patented than there will be when everyone works in secret. Society thus fosters a free exchange of technological information at the cost of a limited 17 year monopoly.’ [416 US 470 at 497] Unless the application is withdrawn before it is open to public inspection (OPI). [1963] RPC 41; 3 All ER 416 at p. 418 (House of Lords). It seems that similar principles will apply if it is a third party who puts the confidential information into the public domain and not the confider: Attorney General v. Guardian Newspapers Ltd (No 2) [1990] AC 109

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jim lahore and ann dufty ‘Of course, the important point about the patent is not whether it was valid or invalid, but what it was that it disclosed, because after the disclosure had been made by the appellants to the world, it was impossible for them to get an injunction restraining the respondents from disclosing what was common knowledge. The secret, as a secret, had ceased to exist.’

Although the price of obtaining patent protection will be public disclosure of the claimed invention, there are a number of reasons why an inventor may require a confidentiality or non-disclosure agreement. It might transpire that no patent grant is made because the application is withdrawn before it becomes open to public inspection. In addition, the person to whom the information is disclosed may otherwise obtain a ‘head-start’ or ‘springboard’ in the use of the information. These may appear to be good reasons for securing a comprehensive agreement before information is disclosed in any commercial negotiation despite the fact that a patent application may be made. The Maggbury case, however, illustrates the difficulties an inventor can face when the nature of the relevant intellectual property rights and common law rules limiting freedom of contract are not fully understood. The events which led to the litigation followed a standard pattern. Mr Allen was interested in the space-saving possibilities of drawer, and wall mounted, ironing boards. He invented a ‘foldaway ironing board assembly and a related pivotal support assembly’. His company, Maggbury Pty Ltd,10 applied for patents on 14 July 1995 and 4 August 1995. An international application was made under the Patent Co-operation Treaty (‘PCT’). The international publication date in respect of the PCT application was 6 February 1997, resulting in full public disclosure of the substance of the claimed inventions. The publication date in Australia was 12 days later. At the time of the trial no patents had been granted on any of the applications.11 After the applications were made Mr Allen and his companies (‘Maggbury’) entered into negotiations with the Hafele companies (‘Hafele’) to seek commercial partners for the development of the inventions worldwide. Mr Allen made it clear that he would not allow anyone access to prototypes of the ironing boards, or information

10 11

at p. 285 (House of Lords); Attorney General (UK) v. Heinemann Publishers Australia Pty Ltd (1988) 10 IPR 153 at p. 229 (NSW Court of Appeal). This was not in issue in the Maggbury case where the information was disclosed through the actions of the claimant and the relationship between the parties was contractual. The applications were subsequently assigned to Gisma Pty Ltd, the second appellant, another of Mr Allen’s companies. There was evidence which suggested that in fact it was unlikely that patents would be granted.

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relating to them, unless confidentiality undertakings were given and representatives of Hafele executed two agreements, each entitled ‘Deed of Confidentiality’, on 25 July 1995 and 13 November 1995. Hafele agreed that it would: (a) treat any Information which Maggbury disclosed to it in relation to the invention as private and confidential, and would not use the Information for any purpose other than to fairly and properly assess proposals for commercially exploiting the invention; (b) not ‘at any time hereafter’ use the Information ‘for any purpose whatsoever’ except with Maggbury’s consent; and (c) ‘forever’ observe the obligations of confidence, unless released by Maggbury. The definition of ‘Information’ was critical. It read: ‘Information’ means each and every record of information whatsoever disclosed, shown or provided to Hafele by the Inventor in relation to the Product, and without limiting the generality thereof, includes any writing, sketches, diagrams, models, film, video tape, plans, designs, drawings, manufactured prototypes, layouts, schedules or photographs.’

The definition of ‘Product’ referred to the first patent application. This was regarded as being a clear indication that both parties understood that patent protection, which would form a basis for the commercial exploitation of the ‘Product’, was being sought. There was nothing in the agreement limiting the obligations relating to the ‘Information’ to information which remained confidential at the time of any breach or threatened breach nor was there any restriction on the duration of the undertakings. Negotiations between the parties eventually broke down. Subsequently Mr Allen became aware that Hafele was distributing a wall-mounted foldaway ironing board and that a wall-mounted ironing board with a new drawer-mounted version was being manufactured in Germany. Maggbury commenced proceedings in the Supreme Court of Queensland seeking to enforce the confidentiality undertakings given by Hafele. Byrne J made orders granting injunctive relief which restrained Hafele from manufacturing and distributing the wall-mounted ironing board and any ironing board made using wholly or in part information derived from the documents or prototypes provided by Maggbury. That decision was reversed by the Queensland Court of Appeal. It had become apparent, at trial, that the fact that patent applications had been

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filed posed a major potential risk to Maggbury. On appeal, counsel for Maggbury argued that certain features of the design details had not been disclosed in the patent specifications. The Court of Appeal noted that ‘. . . it would be surprising if a patent specification intended to protect a number of different embodiments of the invention would fail to set out, with a view to obtaining protection for them, all aspects of the invention thought by the inventor to be of value’.12 It concluded that ‘. . .[i]nsofar as the patent specification failed to disclose any information about the invention, it is likely to have been either commonplace or of no real significance’.13 Maggbury appealed to the High Court of Australia which held, by a majority (Gleeson CJ, Gummow and Hayne JJ, Kirby and Callinan JJ dissenting), that the appeal should be dismissed.14 Given the conclusions reached by the Court of Appeal on the quantum and significance of the public disclosure which had taken place,15 Maggbury was forced, on appeal, to argue that the injunctions granted at trial enforced negative stipulations in the confidentiality agreements which, on their proper construction, continued ‘forever’ and which did not depend upon the continuation of secrecy or lack of public disclosure.16 The appeal raised three main issues: 1. By making Australian and international applications for patents in 1995 and 1996, which would lead to public disclosure of the Information, had Maggbury deprived itself of any basis for complaint against Hafele? 2. If Hafele was in breach of the confidentiality agreements, did the common law doctrine of restraint of trade relieve Hafele of its contractual obligations by rendering such agreements, or the offending restraints on trade contained within them, unenforceable in law? 3. If not, was it open to the primary judge to conclude that an injunction was a necessary and appropriate remedy in the circumstances to restrain Hafele from breaching the covenants contained in the confidentiality agreements? The majority held that, ordinarily, the obligations relating to the use and disclosure of the ‘Information’ would be construed as limited to 12 13 14 15 16

Reported in Maggbury Pty Ltd v. Hafele Aust Pty Ltd [2001] HCA 70 at [37]; 53 IPR 1 at [37]. The Court of Appeal decision has not, to date, been reported. Ibid. Maggbury Pty Ltd v. Hafele Aust Pty Ltd [2001] HCA 70 at [59]; 53 IPR 1 at [59]. The High Court accepted those conclusions. Ibid. at [38].

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subject-matter which retained the quality of confidentiality at the time of breach.17 After an examination of the authorities their Honours concluded that it was not possible to read down the provisions in the agreements requiring Hafele to treat the Information as confidential forever, or to treat them as applying only to information which retained its confidential character at the time of the alleged breach. The provisions obliging Hafele to ‘treat’ the Information as ‘confidential’, to ‘forever’ observe the confidentiality obligation, and forbidding use of the ‘Information’ without consent ‘for any purpose’, ‘at any time’, were, in the opinion of the majority, expressions of explicit intent in inescapable terms.18 Had this not been the case the majority acknowledged that a limited restraint, which operated after the public disclosure and the failure of the negotiations, to prevent Hafele from enjoying a ‘head start’ might have been regarded as reasonable protection for Maggbury.19 A patentee is required to disclose the best method of carrying out the claimed invention but, contrary to the findings of the Court of Appeal in the Maggbury case, there will often be background know-how or show-how which lies behind the invention and which facilitates its use. Once a patent specification is open for public inspection the information which it contains is no longer secret and, arguably, cannot provide a basis for injunctive relief. A person to whom the invention has been disclosed prior to the publication date is, however, likely to have an advantage over all other potential competitors and may, unless restrained, obtain a ‘head-start’ or ‘springboard’ in the use of the invention. In addition, disclosure of the background information may help the confidant to make earlier and more effective use of the invention than those with no access to it. There may, therefore, be good reasons for securing a comprehensive agreement before information is disclosed in any commercial negotiation even though a patent application has been, or will be, made. Presumably, in the Maggbury case, an attempt was made to impose an unrestricted, permanent restraint on Hafele’s use of the Information because Hafele was ideally placed to compete with Maggbury in the production of the wall mounted ironing boards. The final issue considered by the High Court was the extent to which the doctrine of restraint of trade should render the covenants given by Hafele unenforceable. 17 18 19

Ibid. at [45]. Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70; 53 IPR 1 at [53]. [2001] HCA 70 at [53]; 53 IPR 1 at [53].

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In the development of the modern doctrine of restraint of trade it has been held to be particularly relevant to three classes of contract:20 non-competition agreements by vendors of businesses; post employment restraints in employment contracts and partnership agreements and exclusive dealing arrangements between traders, such as ‘solus’ agreements.21 Not all contracts imposing a restraint will be treated by courts in the same way. But, as Meltz has argued, the root of the doctrine is the striking down of ‘monopoly’.22 The statement of general principle by Lord Macnaghten in the Nordenfelt case is still seen as the basis of the modern law:23 ‘The true view at the present time is, I think this. The public have an interest in every person’s carrying on his trade freely; so has the individual. All interference with individual liberty of action in trading, and all restraints of trade themselves, if nothing more are contrary to public policy and are therefore void. That is the general rule. But there are exceptions. Restraints of trade and interference with individual liberty of action may be justified by the special circumstances of a particular case. It is a sufficient justification and indeed it is the only justification, if the restriction is reasonable – reasonable that is, in reference to the interests of the parties concerned and reasonable in reference to the interests of the public, so framed and so guarded to afford adequate protection to the party in whose favour it is imposed while at the same time it is in no way injurious to the public. That, I think, is the fair result of all the authorities.’

The fundamental rule is that a restraint, to be enforceable, must be reasonable in the interests of the contracting parties.24 The opposition between this doctrine and that of securing freedom of contract in commercial 20 21

22 23

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J.D. Heydon, The Restraint of Trade Doctrine (2nd ed., Butterworths, 1999) p. 15. See, e.g., Petrofina (Great Britain) v. Martin [1966] Ch 146, 1 All ER 126; Esso Petroleum v. Harper’s Garage (Stourport) Ltd [1968] AC 269; Texaco Ltd v. Mulberry Filling Station Ltd [1972] 1 All ER 513; Amoco Australia Pty Ltd v. Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288; Peters (WA) Ltd v. Petersville Ltd [2001] HCA 45; 181 ALR 337. D. M. Meltz, The Common Law Doctrine of Restraint of Trade in Australia (1995) at p. 33. Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at p. 565; Amoco Australia Pty Ltd v. Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at pp. 305, 315–316. In asking whether such a restraint is reasonable, it is permissible to consider the quantum of consideration received by the covenantor, the effect of the agreement on the position of the covenantor, and where the parties bargain on an equal footing they should be treated as the best judges of what is reasonable in their own interests. See the comments by Gibbs J in Amoco Australia Pty Ltd v. Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at p. 316 and Heydon, supra n. 20, at pp. 178–184.

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agreements, and the different considerations which may apply to different classes of contract, was noted by Dixon J in Peters American Delicacy Co Ltd v. Patricia’s Chocolates & Candies Pty Ltd:25 ‘The opposition has been resolved by the adoption of a clear rule making it necessary to justify all contracts in restraint of trade as reasonable in the interests of both the parties and by applying the test of reasonableness according to the situation the parties occupy and so recognising the different considerations which affect employer and employee and independent traders or business men, particularly vendor and purchaser of the goodwill of a business.’

In Maggbury, Callinan J described the doctrine in the following way:26 ‘The doctrine of restraint of trade gives effect to the policy that “every man shall be at liberty to work for himself, and shall not be at liberty to deprive himself or the State of his labour, skill, or talent, by any contract that he enters into.” The doctrine derives from a reaction to the guilds and royal monopolies of Tudor and Stuart England. The common law set its face against these from at least the beginning of the 17th century, treating them as nefarious; and the doctrine came to extend to other fetters upon an Englishman’s liberty to trade. However, in response to commercial realities, the law was forced to relax some of its opposition. It exempted certain classes of restraints from the reach of the doctrine, and it abandoned the prohibition on voluntary, general restraints (which operated throughout the whole of the United Kingdom or beyond). But although the guilds and royal monopolies of England have long since been consigned to the history books, along with trial by ordeal and the Divine Right of Kings, the ancient distrust persists. It lies at the heart of the presumption that restraints are bad unless proved otherwise. It also underpins the rule that any restraint that goes beyond what the courts consider to be reasonable in the interests of both parties must be struck down, even if there is no evidence of harm to the public.’ [Citations omitted.]

If the doctrine applies, the only question for a court is whether a restraint in a commercial agreement can be justified as necessary to protect a genuine commercial interest, rather than being merely an attempt to stifle competition. Is it ‘so framed and so guarded as to afford adequate protection

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(1947) 77 CLR 574 at p. 590. Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70 at [90]; 53 IPR 1 at [90].

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to the party in whose favour it is imposed, while at the same time it is in no way injurious to the public?’27 In Maggbury, no attempt had been made, at trial, to justify the restraints as reasonable in the interests of the public and the parties.28 Once the majority had decided that the confidentiality agreements should be read as providing protection for the Information after it passed into the public domain, their Honours had little difficulty in holding that the provisions imposed trading restraints upon the activities of Hafele and were in restraint of trade. Their Honours held that it was not to the point that Hafele could carry on its trade without relying upon the particular disclosures of Maggbury by, for example, having recourse to the public domain and their own previously acquired skills and experience, or that the restraints had been freely bargained for by the parties.29 Callinan and Kirby JJ, in strong dissenting opinions, took the view that the restraint of trade doctrine was inapplicable and that the confidentiality agreements were enforceable at the suit of Maggbury. Both their Honours emphasised the fact that the agreements were freely negotiated at arm’s length and that the parties were advised by lawyers and other experts.30 Kirby J was concerned that the application of the doctrine to agreements of the kind under consideration in Maggbury would tend to discourage inventors of modest means from making disclosures essential to found meaningful negotiations with larger manufacturers and marketing organisations, The restraint of trade doctrine, in his Honour’s opinion, being an invention of the common law, should be applied ‘with a broad flexible rule of reason’.31 Callinan J proposed a more radical approach, querying whether the doctrine should have any application, or a much more limited application, in modern times.32 His Honour thought that a particular difficulty 27

28 29 31

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Nordenfelt v. Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535 at p. 565 per Lord Macnaghten (House of Lords). See also Stokeley-Van Camp Inc v. New Generation Beverages Pty Ltd (1998) 44 NSWLR 607; Ingersoll-Rand (Aust) Ltd v. Industrial Rollformers Pty Ltd [2000] NSWSC 712 at [343]. Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70 at [59]; 53 IPR 1 at [59]. 30 Ibid. at [54]–[55]. Ibid. at [65], [67], [96]. Ibid. at [71] citing Howard F Hudson Pty Ltd v. Ronagne (1972) 126 CLR 449 at p. 453 per Barwick CJ; Esso Petroleum Co Ltd v . Harper’s Garage (Stourport) Ltd [1968] AC 269 at pp. 331–332; Adamson v. New South Wales Rugby League Ltd (1991) 31 FCR 242 at p. 292 per Gummow J. His Honour acknowledged that different considerations might apply to restraints on employees from those which apply to commercial contracts of the kind under consideration in Maggbury: at [70]. Ibid. at [91].

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with the doctrine is that it has not been clear in its application,33 but he nevertheless considered that he was constrained by authority to apply the doctrine. This being the case there was one broad question which must asked:34 is it in the interests of the community that this restraint should, as between the parties, be held to be reasonable and enforceable? His Honour had no doubt that if this question was asked in relation to the restraints in Maggbury, those restraints should be held to be enforceable, even on the current law of restraint of trade.35 His Honour was particularly affected by the argument that striking down such restraints might have adverse consequences on trade if ‘owners of new and unpatented products would hesitate before transmitting the information and making the disclosures essential to bring about meaningful negotiations’.36 In Maggbury it was not disputed that once information has passed into the public domain it is no longer ‘confidential’ so that it cannot, in the absence of contract, be protected. What was in issue was whether the doctrine of restraint of trade should be applied to render invalid and unenforceable a freely negotiated, arms-length agreement between commercial parties, where the purpose of the restraint was to protect information disclosed by one party to the other, and where both parties understood that the information would be published in the normal course of the patent application process. The question which Maggbury clearly articulates, but to which no satisfactory answer is given, is to what restraints should the restraint of trade doctrine apply? When parties negotiate a commercial arrangement from positions where one does not have the other at an unfair advantage and, after hard bargaining, they reach an agreement which each finds in its interests to accept should a court find that their bargain is unreasonable?37 The agreements in Maggbury were negotiated freely at arm’s length, between parties who executed them ‘with eyes wide open’.38 It was 33

34 35 36 37

38

Ibid. at [95]. His Honour referred to the different tests proposed by the House of Lords in Esso Petroleum Co Ltd v. Harpers Garage (Stourport) Ltd [1968] AC 289, and the decision of the High Court of Australia in Peters (WA) Ltd v. Petersville Ltd [2001] HCA 45; 181 ALR 337. Ibid. at [97]. Ibid. Ibid.; citing the US decision in Biodynamic Technologies Inc v. Chattanooga Corporation 644 F. Supp. 607 at p. 611 (1986). Amoco Australia Pty Ltd v. Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at p. 294 per Menzies J; Esso Petroleum Co Ltd v. Harper’s Garage (Stourport) Ltd [1968] AC 269 at p. 323 per Lord Pearce. Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70; 53 IPR 1 at [65].

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acknowledged by the High Court that the principle of freedom of contract is not, of itself, an answer to the claim that a particular restraint is an unreasonable restraint of trade.39 But even if this is the case, as the authorities seem to suggest, the law should seek to uphold bargains and enforce restraints unless it can be demonstrated that the restraints cause the public significant economic harm of an anti-competitive nature.40 If the doctrine applies, the question should be whether it is in the interests of the community that the restraint should, as between the parties, be held to be reasonable and enforceable.41 In cases where the restraint does not interfere with the covenantor’s business or its pre-existing freedom to trade, it can hardly be said that the public is likely to be injured by the stifling of competition.42 The public interest may, on the contrary, lie in enforcing agreements which encourage inventors to disclose innovative ideas to potential collaborators in order to secure development funding, joint ventures or other commercial arrangements without losing those rights when the invention is disclosed, whatever might be the outcome of any patent application.43 There are, after all, strong policy reasons for encouraging the enforcement of commercial undertakings, particularly where there is no countervailing public interest to prevent that occurring. If the covenants imposed on a covenantor are, like those imposed on Hafele, very restricted in their effect,44 it is arguable that the traditional applications of the common law doctrine, designed as they are to preserve freedom of trade from unreasonable contractual restriction, should be of little relevance. As Kirby J said: ‘On the face of things, this was therefore a case where Hafele, having agreed to explicit, limited and particular restrictions on the use it could make of “the Information”, proceeded in clear breach of its covenants, to do exactly what it had promised not to do. Hafele was interested in Maggbury’s idea. At all relevant times it was a participant in the affected market. It wanted to get “the Information”. It was not itself content to rely on the public disclosure 39

40 41 43 44

Ibid. at [56] and at [68] and see Amoco Australia Pty Ltd v. Rocca Bros Motor Engineering Co Pty Ltd (1973) 133 CLR 288 at pp. 304, 306, 317, 328–329; Peters (WA) Ltd v. Petersville Ltd [2001] HCA 45; 181 ALR 337 at [37]–[39]. Per Callinan J in Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70; 53 IPR 1 at [93], [96]. 42 Ibid. at [97], [69]. Ibid. Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70; 53 IPR 1 at [71] per Kirby J, at [97] per Callinan J. They applied only to Information disclosed to it by Maggbury.

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made in connection with the patent applications. It wanted access to the prototypes, photographs, designs and other related information. When this could not be secured without execution of the confidentiality agreements, it executed them. It thereby procured what it wanted. It promptly proceeded to manufacture and market a substantially identical product. Its appeal to public policy and the common law to protect it from its freely entered contractual obligations does not therefore have an immediate attractiveness.’45

The lesson from Maggbury is that an application for a patent starts a process which will, in the normal course, have a result which makes it essential to draft any confidentiality agreement in relation to the invention the subject of the application so that unreasonable restraints do not apply to information in the public domain, or at least information put into the public domain by the party asserting the quality of confidence. 45

Maggbury Pty Ltd v. Hafele Australia Pty Ltd [2001] HCA 70; 53 IPR 1 at [67].

Copyright, moral and neighbouring rights

15 The Berne Convention: the continued relevance of an ancient text sam ricketson ∗

A love of history has always enlivened the legal scholarship of Bill Cornish. He has written and lectured on many topics, from the role of the jury, the law of restitution and across the spectrum of intellectual property law, but one is left with the impression that his first love has always been legal history, with a strong emphasis on economic and social developments. Hence, it is appropriate in this essay to take a historical starting point, and to consider the continuing contemporary relevance of an international convention that was first formulated in the century before last. This is the Berne Convention for the Protection of Literary and Artistic Works, which is one of the fundamental cornerstones of the modern intellectual property system. There are many issues here that are ripe for consideration, and any comprehensive examination of them is beyond the scope of this essay. However, there are several matters concerned with treaty interpretation that are now of considerable significance, illustrating the continuing relevance of an ‘ancient text’. Before discussing these, however, some background is required.

A. A star is reborn (the comeback kid) For a considerable part of its existence, the Berne Convention was essentially a static instrument. Beginning modestly, and even circumspectly, it had a vigorous adolescence and early adulthood, and then entered a period of little or no growth (unlike many middle-aged adults) and even faced the threat of substantial reduction (in the period 1960–1967). Indeed, after the trauma of successive revision conferences in 1967 and 1971 where the status quo was barely maintained, the prevailing view was that there would be no more revisions of the old kind, and that it would thereafter ∗

University of Melbourne.

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remain unchanged, a kind of enduring artifact to a particular conception of authors’ rights that could be taken no further in the changing circumstances of the late twentieth century. Moreover, a significant number of very important countries of both copyright producers and users stubbornly remained outside the Berne Union, alienated, perhaps, by the no formalities rule in Article 5(1). Even as late as 1986, the USA, the then Soviet Union and China were among the notable Berne non-members. As we all know, this position has changed radically over the past 15 years or so. As anticipated, Berne has remained unrevised, but contrary to expectations it has moved steadily to centre stage as the cornerstone of the modern international copyright system. The chronological steps by which this has occurred are worth restating:
In the early 1980s, the USA and other substantial trading nations,

including those in Europe and Japan, became concerned at the apparent lack of recognition and/or enforcement of their nationals’ intellectual property rights in a number of other countries, notably in Asia and South America. Existing intellectual property conventions, including Berne, had little to say about the enforcement of the rights contained in those conventions, and there was no effective means of ensuring compliance with the obligations under these conventions, even by offending countries that were actually signatories.
Bilateral trade sanctions were a limited response to these problems, and were actively pursued by the USA in a number of instances during this period. Multilateral responses, however, were clearly more promising.
A revision of the GATT (the Uruguay Round) beginning in 1986 provided the impetus for a broader multilateral response and, for the first time, compliance with intellectual property norms was articulated as one of the trade disciplines to be pursued at the multilateral level.
Not wishing to reinvent the wheel, Berne provided negotiators with a ready-to-wear set of norms that could be incorporated into the new Agreement on Trade-Related Intellectual Property Rights (TRIPs).1 It also provided a suitable platform on which further Berne-plus substantive and enforcement obligations could be erected.2 Compliance with these norms could then become a matter for the dispute resolution machinery of the newly created World Trade Organization (‘WTO’).3 1 2 3

See Article 9(1), TRIPs Agreement. See further Articles 10–14 and Section 2 (Civil and Administrative Procedures and Remedies), TRIPs Agreement. Part V, TRIPs Agreement.

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A consequence of this was that Berne compliance became an essential

component of WTO membership, regardless of whether a country was a Berne member or not. However, the USA, one of the chief promoters of TRIPs but outside of Berne for its first 102 years of existence, soon recognized the anomaly of insisting upon Berne compliance while not actually being a member itself. The USA therefore joined Berne in 1989, and was followed by a number of other major trading countries, including China (1992), the Russian Federation (1995), Republic of Korea (1996) and Indonesia (1997). There are now over 150 members of the Berne Union, and it covers virtually all the inhabited territories of the globe.
Interpretation of Berne norms is therefore no longer a matter for national legislators and policy makers seeking to ensure compliance under their domestic laws, but effectively in isolation from each of others. It is now a matter of real multilateral concern, with the WTO dispute resolution machinery providing an effective means of achieving compliance from WTO members. This is unlike the pre-TRIPs position where the only means of achieving compliance with Berne obligations (apart from reliance upon customary international law notions of ‘fundamental breach’) was the theoretical right of access to the International Court of Justice under Article 33(1) of the Paris text of Berne with respect to disputes between member countries ‘concerning the interpretation or application of this Convention’. This provision had never been invoked and its effectiveness under the Paris text was substantially eroded by the facility provided to members to declare that they were not bound by the jurisdiction of the court (Article 33(2)).4
There has been no substantive revision of Berne itself, but already a significant related or associated agreement, the WIPO Copyright Treaty (the WCT),5 together with a neighbouring rights cousin (the WIPO Performances and Phonograms Treaty6 ), has been concluded to deal specifically with digital and online issues and has now come into force. 4

5

The right of access to the International Court of Justice was introduced in Article 27bis of the Brussels Act of Berne and was compulsory. In its report to the Stockholm Revision Conference in 1967, Main Committee IV noted that there had not been any petition pursuant to Article 27bis, but also noted the view expressed by some delegates that the compulsory nature of the provision may have been an ‘obstacle for several countries of the Union to the ratification even of the Brussels Act’. The Committee went on to recommend that any revised version of Article 27bis (now Article 33) should not be mandatory: Report of Main Committee IV, Stockholm Revision Conference, in 1886. Berne Convention Centenary. 1986 (WIPO, 1986), p. 218. 6 Geneva, December 1996. Geneva, December 1996.

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As an ‘associated agreement’ under Article 20 of Berne, this also requires full compliance with Berne norms7 and draws upon them expressly in relation to exceptions and limitations to the new rights established under it (the ‘three-step test’ under Article 10). Applying a term from the entertainment industry, it can be said that the above shows that Berne has now made a ‘comeback’ and is even bigger and better than before. It has even attracted the excoriation of critics who, in earlier times, might have pointed pityingly to its lack of relevance and static character. Thus, one recent commentator has titled his article ‘Burn Berne’ and has argued forcefully, if somewhat inappropriately, for its ‘repeal’.8 For good or bad, Berne is now the starting point for assessing and determining international copyright obligations, and the matter of its proper interpretation is therefore of utmost importance. Two issues, in particular, arise for consideration here:
Given that it is the base or starting point, how does Berne control and/or

constrain the interpretation and application of later instruments such as TRIPs and the WCT ? This is particularly relevant in the case of the incorporated provisions, raising the question of whether a Berne provision that is incorporated into, say, the WCT can receive a different interpretation as a provision of that instrument as opposed to the interpretation that it might receive as part of Berne.
The extent to which ‘clarifications’ of Berne provisions that are embodied in later instruments such as the WCT and TRIPs are constitutive, in the sense of creating new international norms or standards under Berne, or are simply declarative of what was ‘already there before’.

B. Approaches to interpretation Berne is an old treaty (1886), and even its latest text (Paris, 1971) precedes the adoption of the Vienna Convention on the Law of Treaties.9 Nonetheless, it seems generally accepted that the rules on treaty interpretation contained in that instrument, in particular Articles 31–32, are codifications of the rules of customary international law on such matters. 7 8 9

See Article 1(4), WCT. A Story, ‘Burn Berne: why the Leading International Copyright Convention must be Repealed’, (2003) 40 Houston Law Review 101. Under Article 4 of the Vienna Convention, it is provided that it only applies to treaties entered into after its coming into force (27 January 1980). Accordingly, it does not apply to the Paris text of Berne but clearly does to the WCT (entry into force 2002).

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Accordingly, both the Berne Convention and the later instruments such as TRIPs10 and the WCT fall to be interpreted under the same rules. A potential point(s) of conflict, however, that arises is where the same provision, namely a provision of Berne, falls to be interpreted according to these rules, but within the context of different instruments, i.e. as part of Berne itself, as an incorporated part of the WCT, and as an incorporated part of the TRIPs Agreement. Each of these instruments was formulated in different circumstances and with different purposes, and these matters can have a significant effect on their respective interpretations. The starting point here is Article 31(1) of the Vienna Convention, which provides: ‘A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.’

Leaving aside the matter of ‘context’ (helpfully defined in Article 31(2) as including the text of the treaty and accompanying and subsequent agreements between the parties), the exhortation to interpret ‘in the light of its object and purpose’ can give rise to potentially different approaches as between Berne and the later agreements. How are the object and purpose of a treaty to be ascertained? An obvious starting point is to consider the title and preamble of the treaty in question. In the case of the latest text of Berne, the answer is, at first reading, quite straightforward: it is a ‘Convention for the protection of the rights of authors in their literary and artistic works’ and begins with a recital that ‘[T]he countries of the Union, being equally animated by the desire to protect, in as effective and uniform a manner as possible, the rights of authors in their literary and artistic works, . . . have agreed as follows . . .’ There is no other preamble or recital of the kind so beloved of modern treaty makers and legislators, particularly in Europe, that points to any other object or purpose of the Convention. The immediate impression, 10

While the TRIPs Agreement is a later agreement (1994), there is a provision in Article 3(2) of the Understanding on Dispute Settlement, to which TRIPs is subject that dispute panels are to construe TRIPS ‘in accordance with the customary rules of interpretation of public international law’. It appears that the reason for this is that the USA, an important member of TRIPs, is not a party to the Vienna Convention. See further N. W. Netanel, ‘The Digital Agenda of the World Intellectual Property Organization: Comment: The Next Round: The Impact of the WIPO Copyright Treaty on TRIPS Dispute Settlement’ (1997) 37 Virginia Journal of International Law 441, 449. At the same time, it appears that the USA takes the view that the provisions of the Vienna Convention reflect custom: see further Restatement (Third) of the Foreign Relations Law of the United States 145 (1986).

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therefore, is of an agreement that is one-dimensional in its concerns, namely that it is directed solely to the protection of the rights of authors. In the interpretation of its provisions, therefore, it can be said that the preferred interpretation will be the one that advances this objective, as distinct from any other that might serve other purposes or even be at odds with the protection of the interests of authors. By contrast, both TRIPs and the WCT contain a number of competing objects and purposes that are to be balanced, it seems, against those of authors. Thus, the WCT preamble starts with the rights of authors, but then lists a number of other matters that are to be taken into account: ‘The Contracting Parties, Desiring to develop and maintain the protection of the rights of authors in their literary and artistic works in a manner as effective and uniform as possible, Recognizing the need to introduce new international rules and clarify the interpretation of certain existing rules in order to provide adequate solutions to the questions raised by new economic, social, cultural and technological developments, Recognizing the profound impact of the development and convergence of information and communication technologies on the creation and use of literary and artistic works, Emphasizing the outstanding significance of copyright protection as an incentive for literary and artistic creation, Recognizing the need to maintain a balance between the rights of authors and the larger public interest, particularly education, research and access to information, as reflected in the Berne Convention, Have agreed as follows: . . .’

Some of these matters are neutral in content, e.g. the references to the introduction of new international rules and the impact of economic, social, cultural and technological developments, but the sting comes at the end: the need to ‘maintain a balance’ with competing public interests. In other words, authors’ interests and the copyright incentive are to be moderated or weighed against these other interests. The TRIPs Agreement is even more catholic in its preamble, with trade matters accentuated as well as the interests of developing countries and developmental and technological objectives. There is no specific reference to the importance (or otherwise) of authors and/or creators, although

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there is a solemn recognition that ‘intellectual property rights are private rights’. However, Articles 7 and 8 have specific relevance to the matter of object and purpose. Article 7, entitled ‘Objectives’, raises the matter of ‘balance’ directly: ‘The protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.’

Article 8 then articulates certain ‘principles’ that members may take into account in formulating and amending their laws and regulations, allowing them to adopt ‘measures necessary to protect public health and nutrition, and to promote the public interest in sectors of vital importance to their socio-economic and technological development’ (Article 8(1)) as well as adopting ‘appropriate measures’ to prevent the abuse of intellectual property rights by rights holders (Article 8(2)). TRIPs is clearly an instrumentalist agreement, that sees intellectual property rights, including copyright, as means for promoting certain trade, economic and social purposes: the rights of authors here are only one aspect of the matrix of interests involved. It will be obvious that under both the WCT and TRIPs there is a need to accommodate or ‘balance’ a number of objectives or purposes and that some of these may well be inconsistent, if not in conflict. Thus, where there is a choice of interpretations of a particular provision that might favour authors, in one instance, or some other interest, such as education, research, public health or development, in another, the first might be preferred under Berne with the second being preferred under the WCT or TRIPs, as the case may be. These differences are of more than academic interest, as becomes apparent when one approaches the interpretation of a common clause such as the three-step test. The latter is replete with terms that may be interpreted in various ways, for example, the expressions ‘certain special cases’ (step one), ‘normal exploitation of the work’ (step two) and ‘unreasonably prejudice’ and ‘legitimate interests of the author’ (step three). Each may receive a wider or narrower interpretation, e.g. with respect to whether a particular kind of use of copyright material can be made subject to a compulsory licence, depending upon what objectives and purposes are in mind, and this can clearly lead to inconsistent results when one is considering whether a particular limitation or exception in national law is acceptable according to the three-step test. And this, of course, is just one

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example of the differences that may arise as between the provisions of earlier and later texts. Given that both the WCT and TRIPs incorporate the whole of Articles 1–21 of Berne,11 other issues that might arise are as follows:
In relation to the exclusive right of reproduction under Article 9 of

Berne, does this extend to digital uses and acts of storage in an electronic medium? This is a matter of some uncertainty (see below), where narrower and wider views are possible. Thus, under Berne a wider and more pro-author interpretation might suggest an affirmative answer, whereas a more limited response might follow under the WCT and TRIPs when regard is had to public interest considerations such as educational and developmental uses.
In relation to the broadcasting and communication rights under Articles 11bis and 11ter of Berne, do these cover what another contributor to this volume12 has called ‘push’ and ‘pull’ technologies? Once again, differing conclusions might follow, depending upon which instrument is under consideration.
In the case of moral rights under Article 6bis of Berne, is the protection of these rights under the WCT (but not TRIPs) the same as under Berne? For example, issues of waiver and consent, which are not explicitly dealt with in that provision might be more readily excluded under a proauthor Berne interpretation, but might be more readily comprehended under a more ‘balanced’ WCT.
In relation to Article 18 of Berne, would the ‘conditions of the application of the principle [of retroactivity]’ referred to Article 18(3) permit of a more flexible application under the WCT and/or TRIPs, than under Berne? These are only instances of the kind of divergences that could arise in the interpretation of common provisions under these different instruments. Thus, a more pro-author interpretation under Berne may sit uneasily with a more ‘balanced’ interpretation under the WCT or TRIPs. This lack of conformity between objects and purposes is therefore a potential problem. Or is it? There are two possible means by which these conflicts may be resolved. The first is to be found in express provisions of the later texts; the second 11 12

Noting, of course, that TRIPs specifically excludes any requirement for member countries to comply with Article 6bis of Berne, which deals with moral rights. See J. Ginsburg ‘The (new?) right of making available to the public’, p. 234, infra.

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is by having regard more generally to the overall text and history of the earlier text.

1. Express provisions of the later text In the case of the WCT, Article 1 tackles the problem directly by providing as follows: ‘Relation to the Berne Convention (1) This treaty is a special agreement within the meaning of Article 20 of the Berne Convention for the Protection of Literary and Artistic Works, as regards Contracting Parties that are countries of the Union established by that Convention. This Treaty shall not have any connection with treaties other than the Berne Convention, nor shall it prejudice any rights and obligations under any other treaties. (2) Nothing in this Treaty shall derogate from existing obligations that Contracting Parties have to each other under the Berne Convention for the Protection of Literary and Artistic Works. (3) . . . . (4) Contracting Parties shall comply with Articles 1 to 21 and the Appendix of the Berne Convention.’

These provisions apply immediate constraints on the interpretation of the WCT’s provisions, including those that are incorporated from Berne. Thus, a ‘special agreement’ under Article 20 of Berne can grant to authors more extensive rights than those granted by the Convention, but cannot contain other provisions contrary to this Convention. More specifically, the non-derogation provision in Article 1(2) of the WCT must entail the consequence that no interpretation of a WCT provision should be adopted that would be inconsistent with the interpretation and application of an existing obligation that Berne members that are also WCT members have between themselves. Finally, Article 1(4), the incorporation provision, requires compliance with the substantive obligations of Berne, regardless of whether the states concerned are members of Berne or not. Article 1 of the WCT therefore ‘ties back’ WCT obligations to those of Berne in two ways: as a special agreement, it cannot be in conflict with the earlier instrument (Article 1(1)) and, in the case of Berne members that are members of the WCT, it cannot derogate from the obligations that those members have towards each other under Berne (Article 1(2)). In the case of incorporated Berne provisions, this must mean that it is the Berne interpretation that should be applied to these provisions, even though

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they are strictly obligations under the WCT. This leaves unanswered the question of what is the position of a non-Berne WCT member – could such a country apply a different non-Berne interpretation to an incorporated Berne provision, on the basis that this will not be in breach of Article 1(2), as the country in question is not a Berne member and has no Berne obligations towards any other country that it can breach? But such a possibility may be of theoretical interest only, given the complete overlap to date between Berne and WCT membership. Under the TRIPs Agreement, a similar position applies: there is an identical non-derogation provision in Article 2(2), under which nothing in Parts I to IV of TRIPs is to derogate from existing obligations that members have towards each other under Berne. While this clearly indicates the primacy of Berne interpretations of incorporated Berne obligations, this may have a more wide-ranging impact than in the case of the WCT. The latter, after all, is a special agreement under Berne. The TRIPs Agreement, by contrast, seeks to achieve other and quite different purposes, and the impact of Article 2(2) must therefore be to pare back TRIPs to the extent that it is not consistent with Berne. There is an oddity that should be noted here: under Article 9(1) of TRIPs, it is provided that the obligations of members to comply with Articles 1–21 of Berne and the Appendix do not extend to rights or obligations arising under Article 6bis. Accordingly, there can be no requirement under TRIPs to protect moral rights as such. In particular, this is reflected in the formulation of the three-step test that is adopted in Article 13, the third step of which refers to the ‘legitimate interests of the right holder’ as distinct from the ‘legitimate interests of the author’ under Article 9(2) of Berne. This indicates that an exception under Article 13 of TRIPs to an incorporated Berne right, such as reproduction or public performance, could entail a consequence that was unreasonably prejudicial to the legitimate interests of authors, so long as it did not have this effect on right holders (who might be quite different persons or entities). An example might be an omission to acknowledge authorship or a licence to make changes to a work without the permission of the author. However, even if such an exception could be justified in terms of Article 13, it could, in the case of Berne members, cut across their obligations under Article 6bis of that Convention, and therefore be in breach of Article 2(2) of TRIPs (the non-derogation provision). Accordingly, while TRIPs does not require the protection of moral rights by way of incorporation of Berne, it will not be possible for any provision of TRIPs to authorize the doing of something that is contrary to moral rights obligations that members have directly under Berne.

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2. The provisions of the earlier text While Articles 1(2) of the WCT and 2(2) of TRIPs peg back the requirements of that instrument to Berne interpretations, it is also possible that the objects and purposes of Berne travel some way toward the more balanced approach that is embodied in both these later instruments. Thus, it is significant to note the ‘recognition’ in the WCT preamble quoted above of ‘the need to maintain a balance between the rights of authors and the larger public interest, particularly education, research and access to information, as reflected in the Berne Convention’. This reference may be special pleading – after all, a provision in a later text cannot on its own make the Berne Convention what it is not, namely a convention concerned with balancing the rights of authors against those of the wider public – but it does prompt a further inquiry into what is meant by the expression ‘object and purpose’ as it appears in Article 31(1) of the Vienna Convention. In this regard, it is useful to look beyond the words of the Berne preamble to determine what more may be said about the ‘object and purpose’ of the Convention. Titles and preambles do not necessarily contain the sum total here, particularly in the case of older agreements formulated before the present fashion of lengthy preambles and recitals. In the case of Berne, it is possible to make the following observations:
The preamble of the present Paris text only dates from that text (1971):

prior to this, there was no preamble at all. There is no explanation for this insertion, other than a statement in the Report of the 1971 Revision Conference that it was desired to recognize the work of the previous Stockholm Conference (which was done in the next recital after that quoted above).13 It will be recalled that the Paris Revision Conference was something of a ‘repair job’, intended to resolve the divergences that had emerged at the Stockholm Conference four years earlier with respect to developed and developing countries.14 The object of delegates, therefore, was to ensure the continuity of what had gone before, but at the same time the balance of the Convention was significantly altered with the adoption of the Appendix and the recognition of the concerns of developing countries. This suggests that the apparently stark proauthor objective in the preamble needs to be interpreted in this light. 13 14

General Report of the Diplomatic Conference for the Revision of the Berne Convention, Paris, 5 July to 24 July 1971, para. 20. See further S. Ricketson, The Berne Convention for the Protection of Literary and Artistic Works: 1886–1986 (Centre for Commercial Law Studies, Queen Mary College, 1987), chapter 11.

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The Berne Convention, as an overall instrument, has never been limited

to just the single objective of protecting authors’ rights. An examination of its successive texts shows that other interests have long been recognized in its provisions, for example: – In the 1886 text, translation rights were limited to 10 years (Article 4) and a further Article (6), while recognizing the protection of ‘lawful translations’ as ‘original works’, acknowledged that once the translation right of a work had fallen into the public domain, the translator could not ‘oppose the translation of the same work by other writers’. The interests of user countries in having ready access to translations of foreign texts were clearly recognized in these provisions. – The 1886 text also contained exceptions in relation to newspaper articles of ‘political discussion’ and ‘news of the day’ and ‘miscellaneous information’ (Article 7), while educational and scientific uses were stated ‘not to be affected by the present Convention’ (Article 8). – The 1886 text also contained (as have all subsequent texts) a ‘public order’ override for sovereign states (Article 13). – The Berlin text of 1908 retained and refined the exceptions and limitations of the original text, while expressly acknowledging the interests of the emerging sound recording industry in the compulsory mechanical reproduction licence that was included in new Article 13. – The Rome text of 1928, while recognizing new exclusive rights in relation to broadcasting and public communication of works, also acknowledged in Article 11bis(2) the public interest aspect of these new rights by leaving the regulation of their exercise to national legislation. – The Brussels text continued prior exceptions and limitations and added a specific provision with respect to the reporting of current events (Article 10bis), while the ‘minor reservations’ doctrine was enunciated in the General Report of Marcel Plaisant as a set of implied exceptions to public performance and communication rights. – The limitations with respect to developing countries contained in the Stockholm and Paris texts have already been referred to above. Accordingly, the reference to ‘balance’ and the Berne Convention in the WCT preamble is far from meaningless, and points to the need to interpret Berne provisions in a qualified way. As Numa Droz, the Swiss president of the Berne drafting conferences of 1884–1886, stated in his closing address to the first conference in 1884, the aim of the drafters was far from absolute:

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‘Whereas, for one thing, certain delegations might have wished for more extensive and more uniform protection of authors’ rights, due account did also have to be taken of the fact that the ideal principles whose triumph we are working towards can only progress gradually on the so-varied countries that we wish to see joining the Union. Consideration also has to be given to the fact that limitations on absolute protection are dictated, rightly in my opinion, by the public interest. The ever-growing need for mass instruction could never be met if there were no reproduction facilities which at the same time, should not generate into abuses. These were the various viewpoints and interests which we have sought to reconcile in the draft convention . . . Our work is therefore the result of mutual concessions, and it is with that in mind that it is recommended to all governments for approval.’15

In this way, it can be said that the approaches to interpretation under Berne and later instruments such as the WCT and TRIPs are not necessarily as far apart as might at first appear. WCT and TRIPs members cannot be required to interpret their Berne obligations in any way other than as required by that Convention; on the other hand, the latter should be interpreted in accordance with the modified objects and purposes outlined above.

C. Later ‘clarifications’ of Berne : the constitutive/ declarative debate A further issue of interpretation concerns the effect of provisions in a later text, such as the WCT or TRIPs, that seeks to indicate what is covered, or intended to be covered, by an earlier agreement, such as Berne. For present purposes, the WCT is of more immediate interest, as it contains a number of such ‘clarifications’, each of which is framed in a different way, for example: 1. Computer programs: Article 4 of the WCT provides that these are protected ‘as literary works within the meaning of Article 2 of the Berne Convention’. It is further provided that such protection applies to ‘computer programs, whatever may be the mode or form of their expression’. An ‘agreed statement’ then provides that the ‘scope of protection for computer programs under Article 4 of this Treaty, read with Article 2, 15

Minutes of the Sixth Meeting of the Conference for the Protection of Authors’ Rights, 18 September 1884 in 1886. Berne Convention Centenary. 1986 (WIPO, 1986), p. 105.

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is consistent with Article 2 of the Berne Convention and on a par with the relevant provisions of the TRIPs Agreement’. 2. Exceptions and limitations: Article 10(2) provides that Contracting Parties shall, ‘when applying the Berne Convention, confine any limitations of or exceptions to rights provided for therein’ in accordance with the three-step test. There is an elaborate agreed statement to this provision that seeks to ‘clarify’ its effect vis-`a-vis the Berne Convention. 3. Application in the digital environment: There is no provision in the WCT that expressly addresses the scope of the reproduction right under Article 9 of Berne, but there is the following agreed statement to Article 1(4): ‘The reproduction right, as set out in Article 9 of the Berne Convention, and the exceptions permitted thereunder, fully apply in the digital environment, in particular the use of works in digital form. It is understood that the storage of a protected work in digital form in an electronic medium constitutes a reproduction within the meaning of Article 9 of the Berne Convention.’

Each of these examples involves an analysis of the relationships between different texts, as well as a consideration of the status of the various accompanying ‘agreed statements’, and the author has dealt at length elsewhere with the second and third.16 The following discussion is therefore limited to the first of these, computer programs.

Computer programs At first sight, Article 2 of the WCT attempts to resolve an issue that was previously unclear under Berne, namely whether computer programs fall within the scope of the expression ‘literary and artistic works’ which is defined in Article 2(1) of that agreement. The latter provides inclusively that ‘the expression “literary and artistic works” shall include every production in the literary, scientific and artistic domain, whatever may be the mode or form of its expression . . .’. A list of examples then follows, but these do not include computer programs, understandably, perhaps, since Article 2(1) was last revised in 1967 (at Stockholm), and the importance of computer programs was only dimly perceived at this stage. Indeed, for some time after 1967, it was unclear whether these were more 16

The author has already dealt at length with issues concerning the three-step test and digital reproduction in a study prepared for WIPO in 2003 and available at http://www.wipo.int.

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appropriately protected under patent law or whether some intermediate sui generis solution was desirable.17 It was only by the mid-1980s that it was clear that a number of countries were adopting a copyright approach, protecting computer programs as original literary works.18 Writing in 1986 on the centenary of the Berne Convention, Dr Arpad Bogsch, the former Director-General of WIPO, noted that, although many member countries were now protecting computer programs under copyright, there were still wide differences as to the scope and form of this protection, while some countries had some doubts about this, as this would ‘erode the system of protecting traditional forms of authors’ works’. Dr Bogsch went on to note that at some stage the importance of this subject-matter would be such that: ‘. . . complete clarity will be indispensable about the question whether every country to the Berne Convention is obliged – because of its being party to that Convention – to grant protection (with the norms of that Convention) to computer programs and, if so, is obliged to grant such protection to computer programs created or first (or simultaneously) published in any other country member of the Berne Union.’19

At this stage, therefore, Dr Bogsch was clearly of the view that Berne itself would need amendment, in order to ensure that computer programs were included as literary works. Ten years later, this development had certainly become more pronounced at the national level, and, indeed, protection of computer programs as literary works under Berne had become a mandatory requirement under the TRIPs Agreement in 1994.20 Insertion of a similar requirement under Article 4 of the WCT was therefore a logical next step. But do these ‘collateral obligations’ under the WCT and TRIPs mean that the protection of computer programs is now mandated under Article 2(1) of Berne itself, in the absence of any direct amendment to that provision? There can be no doubt that such an obligation binds members of TRIPs and the WCT as part of their wider obligations under those 17

18

19 20

After a study by a WIPO Advisory Group of Non-Governmental Experts on the Protection of Computer Programs, model provisions for the protection of computer programs were proposed by WIPO, but were not taken up by any WIPO member: [1977] Industrial Property 265. A notable first was the USA, then not a Berne member, that did so in 1980; Australia followed in 1984; the European Union in 1991, with the adoption of the Council Directive 91/250/EEC of 14 May 1991 on the legal protection of computer programs. 1886. Berne Convention Centenary. 1986 (WIPO, 1986), p. 69. Article 10(1), TRIPs Agreement.

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agreements, but can it have any effect on those Berne countries that are neither WCT nor TRIPs members? Such a question may be of diminishing practical importance, given the rapidly increasing membership of TRIPs and the WCT, but it still lacks a ready answer. The dilemma is this – is Article 4 simply declarative of what was already the case under Berne, as a consequence of a proper interpretation of the inclusive definition of ‘literary and artistic works’ in Article 2(1)? Or is it constitutive, in the sense of embodying a new norm that is binding on all Berne members? In the case of the first, it may be asked, why have such a provision in the first place, as this will already have been the position and to embody it in an express provision in another convention will create uncertainty where previously there was none. In the case of the second, there is the obvious limitation referred to above, namely that it can only bind those Berne members that are also WCT and/or TRIPs members and cannot create a new norm binding on Berne members generally. The relevant rules of treaty interpretation are only of limited assistance here. Thus, Article 31(3) of the Vienna Convention provides: ‘3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties.’

Accordingly, it is possible that a subsequent agreement between the parties as to the interpretation of a particular provision, such as Article 2(1) of Berne, could be effective in either a declaratory or constitutive sense – declaring an interpretation acceptable to all members or, alternatively, in effectively amending Article 2(1) so as to include computer programs in the list of examples of literary and artistic works that appears there. In either case, a country that became a member of Berne after such a subsequent agreement would be bound to protect computer programs as literary works qua its newly assumed obligations under Berne. The obvious hurdle here is that it seems clear that the subsequent agreement would have to be between all current Berne members before it could have either effect – and this clearly was not the case with respect to the WCT, either at the time it was signed at the Diplomatic Conference in December 1996 or subsequently, as only a fraction of Berne members have yet become members of the WCT. In the case of the TRIPs Agreement, the overlap

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may now be much closer in that it is possible that there will soon be an almost completely common membership between Berne and TRIPs, with the consequence that it will be possible to regard Article 10(1) of TRIPs as representing a subsequent agreement between Berne members. The other possibility is provided by Article 31(3)(b) of Vienna, namely that Article 4 of the WCT and Article 10(1) of TRIPs are simply declarative of the position now applying with respect to the status of computer programs as a matter of the subsequent practice of Berne members. ‘State practice’ may not require express unanimity as between member states on the issue in question, but it would seem necessary at least that there is no dissent to the practice in question. If this is so, then it may be that the interpretation and application of the treaty provision in question can be changed as a result of this practice, with the further consequence that this interpretation and application will become binding on new members of the convention as well as upon those that may not previously have adopted it in express terms but have not previously opposed it. If this is the case with the protection of computer software, then Article 4 of the WCT and Article 10(1) of TRIPs can have no more than a declarative effect vis-`a-vis what has now happened to Berne as a matter of crystallized subsequent state practice.

D. Concluding comments Treaty interpretation is often a dry subject, but the purpose of this essay has been to highlight the continuing relevance in this regard of an ‘ancient text’ (Berne) in relation to the contemporary framework of international copyright relations. Berne is now, for better or worse, the base on which important later agreements are founded, and the way in which incorporated provisions and declaratory statements are to be interpreted are now matters of great importance to national legislators and international bodies. The present essay has therefore sought to illustrate some of these matters.

16 The (new?) right of making available to the public jane c. ginsburg ∗

I am honoured to contribute to this Festschrift for Bill Cornish, the leading exponent of the English (even if many of them are in fact Anzacs) School of Copyright and Intellectual Property. In addition to greatly valuing his scholarship, I hold Bill in especial esteem for his unswerving sanity in ALAI meetings, and for the piano duets in which he occasionally indulges my spouse. The following essay is offered in the spirit of international inquisitiveness that has animated so many of my contacts with Bill.

A. Introduction The Berne Convention 1971 Paris Act covered the right of communication to the public incompletely and imperfectly through a tangle of occasionally redundant or self-contradictory provisions on ‘public performance’; ‘communication to the public’, ‘public communication’, ‘broadcasting’, and other forms of transmission. Worse, the scope of rights depended on the nature of the work, with musical and dramatic works receiving the broadest protection, and images the least; literary works, especially those adapted into cinematographic works, lying somewhere in between. The 1996 WIPO Copyright Treaty (hereafter, WCT) rationalized and synthesized protection by establishing full coverage of the communication right for all protected works of authorship. The WCT also introduced a new designation, the ‘right of making available to the public’. This right corresponds to much communication of works over the Internet, whose users ‘access these works from a place and at a time individually chosen by them’ (WCT, Article 8). As the drafters of the WCT (and its companion ‘Internet treaty’ the WIPO Performers’ and Phonograms Treaty [hereafter WPPT], Articles 10 ∗

Morton L. Janklow Professor of Literary and Artistic Property Law, Columbia University School of Law. Many thanks for comments and suggestions to Professor Sam Ricketson.

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and 14) sought to modernize the Berne Convention to address new exploitations by means of new technologies,1 one might infer that the ‘right of making available’ is something new and different, not previously within the Berne Convention minimum rights protected. If so, then Berne Convention members who have not yet ratified the WCT are not obliged to enforce foreign Berne Union authors’ rights of making available (unless that country’s own authors enjoy such a right, in which case the principle of national treatment would require extending the same protection to Unionist authors).2 The WCT has entered into force,3 but many Berne Member States have yet to ratify the treaty.4 As a result, the determination whether the ‘right of making available’ is a substantive enlargement of Berne Convention rights, rather than a reaffirmation of the scope of the rights already mandated by Berne, carries practical consequences. Another practical consequence of the characterization of the ‘making available’ right concerns its amenability to compulsory licensing. To the extent the right was comprehended within the Berne Convention Article 11bis broadcasting and retransmissions rights, Member States may subject it to compulsory licensing. Were the right either outside the Berne Convention altogether, or included only within the ‘communication to the public’ rights set out in other articles of the Berne Convention, then Member States must treat the making available right as an exclusive right. Whether the ‘right of making available’ is a reaffirmation or an enlargement, its actual scope remains to be ascertained. This essay will explore the meaning of ‘making available’ in the WCT and ‘communication to the public’ in the Berne Convention by applying these concepts to several of the principal forms of communication over the Internet. How, for example, should one analyze communications to and from websites, or peer-to-peer exchanges, or email, under the Berne Convention? What, if anything, do the WIPO Treaties add to the analysis? 1

2 3

4

See, e.g., WCT Preamble, Recital 3; Records of the Diplomatic Conference on Certain Copyright and Neighboring Rights Questions, 675–77 (WIPO 1996); J. Reinbothe and S. von Lewinski, The WIPO Treaties 1996, 24 (2002) [hereafter Reinbothe and von Lewinski]; M. Ficsor, The Law of Copyright and the Internet, para. 1.45–47 (2002) [hereafter Ficsor]. Berne, Art. 5(1). The WCT entered into force effective 6 March 2002, see http://www.wipo.int/treaties/ notifications/wct/0032.html; the WPPT entered into force effective 20 May 2002, see, http://www.wipo.int/treaties/notifications/wppt/0032.html. Currently (as of 6 May 2004), the Berne Convention has 155 member states, see http://www.wipo.int/treaties/en/documents/word/e-berne.doc, while the WCT had 42 see http://www.wipo.int/treaties/en/documents/word/s-wct.doc; and, as of 24 February 2004, the WPPT had 43, see http://www.wipo.int/treaties/en/documents/word/s-wppt.doc.

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B. Predicate question of private international law: who is ‘the public’ to which works are communicated or made available? In considering the scope of the communication and making available rights under the Berne Convention and WIPO Treaties, it is necessary to recognize that neither the Berne Convention nor the WIPO Treaties define the ‘public’ in ‘communication to the public’ or in ‘making available to the public’, though it may be implicit that any group comprising the ‘non public’ (for example, the traditional ‘family circle’) should be economically insignificant.5 In the absence of a treaty definition of ‘the public’, Member State legislation or case law must fill the gap. But neither the Berne Convention nor the WIPO Treaties clearly designate which national law supplies the definition. One might assume that the relevant ‘public’ is the public in the country to which the work is being communicated or made available. But this may place simultaneously into play a great number of countries’ laws. In the analogous situation of satellite communications, many commentators advocated, and the European Union adopted, a different characterization, localizing the act of communication to the public of satellite signals at the point of emission, rather than at the multiple points of receipt.6 Unless one takes the position that the EU has acted inconsistently with an implicit Berne Convention designation of the applicable national law – that of the country(ies) of receipt of the communication,7 it would follow that the Berne Convention leaves open to a variety of national private international law solutions the question of which country’s law defines the ‘public’ to which the works are being made available, as well as any scope in excess of the conventional minima for the right of communication to the public. As for the WCT, the argument favouring localization in the country(ies) of receipt may be stronger, as the text of Article 8 (and of WPPT Articles 10 and 14) ties the act of making available to the place and time chosen by 5

6

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S. Ricketson, The Berne Convention for the Protection of Literary and Artistic Works: 1886– 1986 (Centre for Commercial Law Studies, Queen Mary College, 1987) para. 8.71 [hereafter Ricketson]; Reinbothe and von Lewinski, supra n. 1, at pp. 107, 111. Council Directive 93/83/EEC of 27 September 1993 on the coordination of certain rules concerning copyright and rights related to copyright applicable to satellite broadcasting and cable retransmission, Art. 1(2)(b), Official Journal L 248, 6 Oct. 1993, pp. 0015–0021. Dr. Arpad Bogsch, the former Director General of WIPO, had contended that Article 11bis required application of the laws of all the countries within the receiving ‘footprint’ of direct broadcast satellites, but this view has not been generally accepted, see Ricketson, supra n. 5, at paras. 8.81–83; Ficsor, supra n. 1, at paras. 4.42–4.48.

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the end-user. It might follow that the ‘public’ is located wherever the end user accesses the work. On the other hand, facilitating the implementation of authors,’ performers’ and record producers’ rights in networked commerce furnished much of the impetus for the WIPO Treaties, yet separate application of the laws of all the countries of receipt would seem to encumber exploitations over the Internet. As a result, one might contend that interpreting the WIPO Treaties to require applying so many different laws would be inconsistent with that underlying goal. But if neither the Berne Convention nor the WIPO Treaties mandate application of the laws of each country of receipt, neither do they oblige Member States to apply the law of the country of emission. (Moreover, in the context of Internet communications, it is not always clear which is the country of emission.) It would therefore appear that if the WIPO Treaties do not themselves designate which national law will supply the definition of ‘public’, then each Member State remains free to choose between the law of the country of emission or of receipt, or indeed, to designate some other means of determining which country’s(ies’) law(s) govern.

C. Testing the scope of the rights of communication to the public and ‘making available’ Consider the following scenarios: 1. Roger Jolly runs a website, Pirates-R-Us.com, from which he offers a variety of digital-format copyrighted works, including photographs, musical recordings, videogames, and text. Users accessing the site may download the desired files directly from the Pirates-R-Us.com site. 2. Jean Lafitte operates a website, music4free.com, that aggregates links to other websites from which users can download unauthorized copies of recorded music. Some links are identified by the name of the music file; clicking on these links takes the user directly to another website and automatically downloads the named file from that website to the user’s hard drive. Other links are identified by the names of the other websites; clicking on these sends the user to the website, from which she may elect to download a variety of files. 3. Secret-sharer.com distributes a software program, TotalShare, enabling end users to designate digital files of all kinds (text, image, sound, audiovisual) on their hard drives for other users of TotalShare to copy into their hard drives. Tracy Trader has accordingly designated files corresponding to the text and recorded reading of the 19th Harry

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Potter book, Harry Potter and the Never-Ending Royalty Statement, and a collection of great outtakes from all 14 Harry Potter films to date, as well as a poster depicting in the part of Dumbledore, Russell Crowe – the fourth actor in a role that has definitively capped the cinematographic careers of more elderly predecessors.8 4. Sir Joseph Porter KCB, having acquired the various Harry Potterrelated files from Tracy’s hard drive, forwards them to a listserv consisting of his sisters and his cousins (whom he numbers by the dozens) and his aunts, as well as all practitioners of Admiralty law, and the occasional Tar. 5. Oscar, an admiralty lawyer on Sir Joseph’s listserv, emails Lucinda the files he received from Sir Joseph. Lucinda keeps her digital copies, but also sends the files on to Sybilla, who in turn sends them to Clancy, and so on. This essay addresses the extent to which the Internet-inspired WIPO Treaties’ ‘making available’ right in fact reaches the conduct at issue in each of these scenarios. It will also consider how the same conduct would have fared under the communication to the public rights in the Berne Convention, in order to discern what the WIPO Treaties add to the prior scope of protection.

1. The Pirates-R-Us website (a) ‘Making available’ under the WIPO Treaties The facts of this hypothetical fit squarely within the ‘making available’ right, which, indeed, appears to have been conceived to cover exactly this kind of communication.9 The right applies equally to all kinds of Berne Convention-protected works, as well as to sound recordings, through the 8

9

This scenario reflects the facts of several recent litigations in a variety of countries; see e.g., In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003) (preliminary injunction awarded against operator of file sharing network); Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 259 F.Supp.2d 1029 (C.D. Cal. 2003), appeal pending (maintenance of file sharing network held not to give rise to contributory or vicarious liability); Buma-Stemra v. Kazaa (Court of Appeal Amsterdam, 28 March 2002), [2002] AMI 134 (declining to award preliminary injunction against distribution of file sharing software); Jasrac v. MMO Japan (Tokyo District Court, Jan. 29, 2003), http://www.jasrac. or.jp/ejhp/release/2003/0129.html (English-language summary) (awarding preliminary injunction against distribution of FileRogue file-sharing program). Reinbothe and von Lewinski, supra n. 1, at p. 108; Ficsor, supra n. 1, at paras. 4.112–4.1115; 4.129–4.140.

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WPPT. Roger has posted all of these kinds of works on his unrestricted website so that any member of the public can access, download to a temporary or permanent storage medium, view or listen to the contents from any place (with Internet access) and at any time ‘individually chosen by them’. Assuming the countries of emission and/or receipt have ratified the WIPO Treaties, Roger would therefore require the authorization of the copyright owners of the works his site makes available.

(b) ‘Communication to the public’ under the Berne Convention By contrast, the analysis of Roger’s potential violation of Berne Convention norms is considerably more complex. Because the Berne Convention does not confer a uniform communication right across all protected subject matter, and does not cover sound recordings at all, it is necessary to divide the analysis by type of communication, and by type of work. The broadest right, with respect to subject matter, does not cover all kinds of Internet-relevant communications; the broadest right, with respect to covered communications, does not extend to all types of works. As Roger is offering the gamut of copyrighted works, we will start with the right most inclusive of subject matter, Article 11bis, which covers all ‘literary and artistic works’ (but not sound recordings), and concerns broadcasting and ‘any other means of wireless diffusion of signs, sounds, or images’. 11bis also reaches retransmissions, including by wire, effected by someone other than the original broadcaster. It does not extend to communications that originate by wire. Although wireless access to the Internet is already available, and may become increasingly widespread, most users access Roger’s site by wire. The rightholders might contend that when members of the public access Roger’s site, a ‘retransmission’ will have occurred, because the placement of the works on Roger’s site required an initial transmission. Even assuming, however, that posting the works to the website constitutes a transmission (a term the Berne Convention does not define), the posting will not have been a ‘broadcast’ of the works, as required by Article 11bis(1)(ii). As a result, much of Roger’s current activity will not come within the scope of Article 11bis. Other provisions of the Berne Convention do apply to transmissions originated by wire, but they address specific types of works: literary works adapted into cinematographic works (Article 14(1)(ii)), and cinematographic works (Article 14bis(1)). If the videogames are considered ‘cinematographic works’ (a matter for determination by national law), then Roger’s site may violate the rights of the videogame producers, as

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well as of the authors of any underlying literary works from which the games were adapted. Authors of dramatic, dramatico-musical or musical works, and of literary works enjoy the exclusive right of authorising the ‘public performance [or recitation] by any means or process’ and ‘any communication to the public’ of a performance or recitation of those works (Articles 11, 11ter). A public performance or recitation by any means or process presumably means something different from any communication of the performance or recitation to the public, or it would not have been necessary to articulate these rights separately. If ‘public performance’ or ‘recitation’ imply a live performance or recitation before the public, then Roger’s website does not implicate those rights. By contrast, if ‘any communication to the public of a performance [or recitation]’ includes performances and recitations that are not rendered live before a public, then the communication to the public of a sound recording of a performance of a musical composition or of a reading of a literary work (whether the recording is made live or in a studio) would invade the composer’s or author’s right. But is Roger’s website communicating recorded performances of musical compositions to the public? As with the ‘making available’ right, the ‘public’ in ‘communication to the public’ is implicated, because anyone with Internet service can access the website. Whether there is a ‘communication’, however, may be less clear. The French text of Article 11 provides for ‘public transmission by all means’ (not ‘any communication’); this may in fact be limited to wired transmissions, as Article 11bis concerns wireless broadcasting, and has the effect of excluding broadcasting from the scope of Article 11.10 To the extent that Roger’s site is accessed by wire, the Article 11 right may apply. To the extent that any of the communication rights may apply, there remains the question whether the ‘public’ to which the work is communicated must receive the work at the same time. While it is implicit in the broadcasting and retransmissions rights that the members of the receiving public may be separated in space, the Berne Convention does not specify whether they may also be separated in time. Put another way, the question is: At whose impetus, the sender’s or the recipient’s, must the transmission occur? Both Articles 11 and 11bis address traditional ‘push’ technologies: broadcast or wired transmissions from an originating (or retransmitting) entity to a passively receiving public. The transmitting entity selected the content and the timing of the communication; the 10

See WIPO, Guide to the Berne Convention (Geneva, 1978) para. 11.5; Ricketson, supra n. 5, at para. 8.70.

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public’s choice was limited to selecting among pre-programmed communications, it did not extend to making up the programming to be received. While ‘broadcasting’ may imply widely sending a communication simultaneously to many potential recipients, the more open-ended language in Article 11bis covering ‘any other means of wireless diffusion of signs, sounds or images’, as well as the broader concept of ‘communication to the public’ in Article 11, need not exclude ‘pull technologies’ like Roger’s website. Although those technologies may not have been contemplated in 1948, when the ‘any communication to the public’ right was first introduced into Article 11,11 and the ‘any other means’ language first appeared in Article 11bis,12 nothing in the text of these Articles prohibits their application to on-demand transmissions.13 On the other hand, given the historical context, it may be bold to assert that these Articles oblige Member States to classify on-demand transmissions as communications to the public. Finally, even assuming Article 11 and 11bis apply to ‘pull’ technologies, neither reaches the wired communication (other than via third party retransmission) of the text of the literary works, and of the photographic images that Roger offers from his site. As to these works, as well as with respect to sound recordings, the Berne communication rights present significant gaps that the WIPO Treaties appear successfully to fill, at least in the archetypal case represented by the Pirates-R-Us.com website.

2. Music4free.com (a) ‘Making available’ under the WIPO Treaties Jean Lafitte’s site does not directly send digital files of the recorded music to users who access the music4free.com site. Rather, Jean Lafitte aggregates links to other sites. In some cases, if a user clicks on a link, she will be sent to another site, and a process of automatic downloading from that site will commence. In other instances, she will be sent to another site, and will 11 12 13

See Ricketson, supra n. 5, at para. 8.70. See ibid., para. 8.77. The Records of the 1948 Brussels revision reveal a paticular preoccupation with the ‘th´eatrophone’, a dial-up service that allowed subscribers to hear transmissions of performances over a telephone line. The Report acknowledged that the number of listeners at any given time was likely to be small, and offered this as one reason for the technology’s non coverage by the Article 11bis(1)(ii) broadcasting right. The Report also urged that rights over this technology not be subject to the Article 11bis(2) authorization to Member States to impose compulsory licences. Documents de la conf´erence r´eunie a` Bruxelles, p. 256 (Bureau internationale pour la protection des oeuvres litt´eraires et artistiques, 1951).

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be able to browse that site, with the possibility of ultimately selecting a file to download. From the user’s point of view, the experience of clicking on the first kind of link to acquire the file is the same, whether or not she knows that the file is coming from Jean Lafitte’s site or from some other site; either way, she contacts the music4free.com site and receives the file without the apparent further intervention of another website operator. In the second case, the user knows she is being taken to another site, from which she may download files of recorded music. In either case, the linked-to websites are making works available to the public in the same way that Roger Jolly’s site does. But, in either case, is Jean Lafitte’s site, by rerouting to the other sites, also ‘making [the files] available’ to the members of the public who contact his site? Article 8 WCT (and 10 and 14 WPPT) gives authors the exclusive right of ‘making available to the public of their works in such a way that members of the public may access these works from a place and at a time individually chosen by them’. The ‘place’ contemplated most likely refers to the place where the member of the public is located (for example, at home, or at an Internet caf´e). But the text might also be read to refer to the networked ‘place’, e.g. website, that the user contacts in order to gain access to the work.14 Applying that interpretation, in the second case, the connection between accessing Jean Lafitte’s site and the communication of the work may be too attenuated, because the user knows that the site from which she is receiving the work is no longer music4free.com. The other site becomes the place from which the user chooses to access the work. In the first case, by contrast, the place from which the user appears to be accessing the music is the music4free.com site, which is the only site she chose. Accordingly, though the source of the communication is ultimately another site, the user’s selection should control. Jean Lafitte might point to the Agreed Statement to WCT Article 8 (and to WPPT Articles 10 and 14): ‘It is understood that the mere provision of physical facilities for enabling or making a communication does not itself amount to communication within the meaning of this treaty . . .’ He would contend that supplying links to other sites merely provides the means for others to make available, and does not constitute making available in its own right. But the Agreed Statement does not exempt all enabling; instead it excludes only enabling achieved solely through the 14

Nothing in the Records of the Diplomatic Conference, supra n. 1, indicates that the language ‘from a place and at a time individually chosen by them’ received special attention, apart from general endorsement of its adaptability to digital communications.

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provision of ‘physical facilities’. ‘Physical facilities’ most likely refers to the hardware infrastructure supplied by the telecommunications companies and Internet service providers who lobbied for the Agreed Statement,15 rather than to the digital rerouting code contained in Lafitte’s website. Indeed, the Agreed Statement may prompt a negative inference favorable to the composers, performers and producers. If merely providing ‘physical facilities for enabling or making a communication’ (emphasis supplied) does not itself constitute a communication, then other forms of enabling communications might be deemed communications in their own right.

(b) ‘Communication to the public’ under the Berne Convention Because the only works at issue are recorded musical compositions (sound recordings being excluded), Article 11bis would cover wireless communications, and Article 11(1)(ii) would cover the wired communications, at least if one interprets the Berne Convention to cover ‘pull technologies’. In this case, the WIPO treaties expand coverage by including sound recordings. Do the WIPO treaties also enlarge rights vis a` vis the Berne Convention, other than expressly covering transmissions initiated by recipients? There will be a further difference in coverage between the Berne Convention and the WIPO Treaties to the extent that enabling a third party to communicate a work is itself a communication of that work to the public within the meaning of the WIPO Treaties, but not of the Berne Convention. The Berne Convention lacks the textual support the WIPO Treaties lend to the argument for inclusion of at least some facilitators. As a result, the characterization of facilitators as ‘communicators’ will be a matter of national law application of Berne Convention norms. 3. Tracy Trader/Secret-Sharer.com (a) ‘Making available’ under the WIPO Treaties By opening her hard drive to all TotalShare-equipped users who seek to acquire the music and other files that Tracy ‘shares’, Tracy is making these files available to the public, within the meaning of the WIPO Treaties. The WIPO Treaties make clear that an act of communication to the public through ‘making available’ occurs when the work is ‘accessed’ by members of the public. Accordingly, it should not matter whether the access occurs 15

See Ficsor, supra n. 1, at para. C8.24 (on lobbying); Reinbothe and von Lewinski, supra n. 1, at p. 112 (on infrastructure).

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from websites or hard drives; whether the files reside on a website or on an open hard drive, they are equally available for accessing. TotalShare users would be considered ‘the public’ because any member of the public may acquire and use the file-sharing software; its dissemination is neither limited nor private. This leaves open the question whether users of a filesharing program whose circulation was restricted to family members or friends would also be considered ‘the public’. A distinct, and difficult, question concerns Secret-Sharer.com. This company makes its own software available to the public, but by doing so, does it also make the files on Tracy’s (and other users’) computer available to the public? Secret-Sharer.com makes it possible for Tracy and others to engage in the act of making available, but its facilitation is far more indirect than Jean Lafitte’s. Where, at least with respect to the automatically downloaded files, Jean Lafitte’s site identified specific works to be made available, the TotalShare program allows end users to acquire any and all files that participants designate as available for file-sharing. Copyright and neighbouring rights owners might urge the negative inference from the Agreed Statement, as Secret-sharer.com is providing digital, not physical, facilities for enabling communications to the public. But here the argument may prove too much, particularly as it is uncoupled from the contention made with respect to music4free.com, that the user had chosen that website as the source for the particular works made available. In Secret-sharer.com’s case, the user chooses the site to acquire the means to access works, but not to acquire the works themselves. For that, the user turns to other users’ hard drives. It would therefore appear that it is up to Member States to determine the circumstances under which those who supply the means of making available are also deemed participants in those acts.

(b) ‘Communication to the public’ under the Berne Convention Even assuming the Berne Convention applies to ‘pull technologies’. the subject matter limitations of the disparate Berne communication rights result in much more spotty coverage than the WIPO Treaties afford. While the wired communication of Harry Potter and the Never-Ending Royalty Statement in digital book form would not be covered, Berne Convention Articles 11ter(1)(ii) and 14(1)(ii) would protect the literary work to the extent of its incorporation in the recorded readings and of its adaptation into the film clips that Tracy also ‘trades’. The poster would be covered only with respect to those users who access Tracy’s hard drive through a wireless Internet connection (Article 11bis(1)(i), applicable to all the

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works that Tracy trades), but the film clips would be protected against both wireless and wired access (Article 14bis(1)).

4. Sir Joseph Porter KCB Because Sir Joseph Porter has sent the Harry Potter files to a listserv, the communication may be of the traditional ‘push’ variety, covered by the general communication to the public right, rather than by the specific making available right. The ‘making available’ right might imply that members of the public have selected the works they ‘pull’ from the person or entity who makes them available.16 On the other hand, Sir Joseph’s correspondents decide whether or not to open the files that Sir Joseph unilaterally sent them, so that the ultimate act of ‘access’ is at a time and from a place (understood as meaning the user’s location, rather than the original location of the file) chosen by the user.17 Even if the sending to the listserv were not deemed a ‘making available’, it would be a ‘communication’ (whether the communication is ‘to the public’ remains to be determined) within the scope of the WIPO Treaties, because, unlike the Berne Convention, the WIPO Treaties extend the general communication to the public right to all categories of protected works. (The analysis of Berne Convention coverage of the works Sir Joseph sends to the listserv would be the same as that regarding Tracy Trader’s file sharing.) As for whether Sir Joseph’s communication or making available is ‘to the public’ under either the WIPO Treaties or the Berne Convention, it is possible that the treaties assume a traditional ‘family circle’ limitation on the concept of ‘the public’, even though they do not define the latter term. An aggressively generous interpretation of ‘family circle’ might include the sisters and the cousins whom Sir Joseph numbers by the dozens, not to mention the aunts. But, even in the absence of a treaty definition of ‘public’, Sir Joseph has probably gone too far, for he has included the entire Admiralty bar, as well as the occasional tar. At this point, he has exceeded even an enlarged family circle (fraternal feelings among admiralty lawyers notwithstanding), and has encompassed a substantial number of unrelated persons. The larger the group of selected recipients, the more likely 16 17

See Reinbothe and von Lewinski, supra n. 1, at p. 109. For that reason, Reinbothe and von Lewinski conclude, supra n. 1, at p. 110, that ‘there is no difference between the situations involving “push technology” . . . and . . . comparable situations involving the “pull technology” . . .’

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the communication is to diminish the effectiveness of the author’s protection called for by the Preamble of the WCT,18 and to impinge on the author’s exercise of her ‘exclusive’ rights.19

5. Oscar and Lucinda . . . and Sybilla . . . and Clancy . . . and . . . While many individuals may ultimately receive the Harry Potter files, each communication is personal, point-to-point and seriatim. Despite the absence of a treaty definition of ‘public’, it is unlikely that any Member State would find support in either the Berne Convention or the WIPO Treaties for extension of the making available or communication rights to these individualized transmissions.

D. Conclusion Some of the WIPO Treaties’ provisions may fairly be deemed to reaffirm the scope of rights already present in the Berne Convention, while others clearly add new protections to the range of minimum rights. The WIPO Treaties have significantly expanded the subject matter coverage of the Berne Convention’s communication to the public right, filling in the kinds of blank spots that this Essay’s analysis has exposed. The WIPO Treaties have also eliminated the disparate treatment of wired and wireless transmissions. The core concept of ‘making available’, however, can fairly be called neither a reaffirmation nor a novelty, for it resolves an ambiguity as to whether the old communication to the public rights accommodated or excluded ‘pull technologies’. This essay has concluded that if Berne did not mandate the inclusion of recipient-initiated transmissions, neither did it preclude them. The right may have been incipient, but there was sufficient uncertainty to leave room for Member State interpretation. As a result, it is appropriate to mark the ‘making available’ right as a clarification. The text of Article 8 of the WCT lends further support to this view of the communication to the public right because it encompasses the ‘making available’ right within the general exclusive right of communication to the public.20 18 19 20

See Reinbothe and von Lewinski, supra n. 1, at p. 111. See Ricketson, supra n. 5, at para. 8.71. See WCT Art. 8: ‘. . . the exclusive right of authorizing any communication to the public of their works, by wire or wireless means, including the making available to the public . . .’ (emphasis supplied); Reinbothe and Von Lewinski, supra n. 1, at p. 103 (‘the making available right was considered to be an aspect of the communication right.’)

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If the making available right clarifies a prior ambiguity, then those Berne Member States who are not WCT/WPPT members, and had previously limited the application of the Berne communication rights to ‘push’ technologies, need not now implement a making available right. On the other hand, when any of these countries join the WIPO Copyright Treaties, they will be obliged to implement the ‘making available’ right as a full exclusive right. Those non-WCT/WPPT Berne members who had interpreted the communication rights to extend to ‘pull’ technologies should continue to do so (within the subject matter limitations of Articles 11, 11bis, 11ter, 14 and 14bis). If any of these countries had previously treated wireless on-demand communications as coming within the local equivalent of the broadcasting and wireless diffusion rights, then those countries would be entitled (but not obliged) under Article 11bis(2) to subject those transmissions to compulsory licensing. Moreover, upon joining the WIPO Treaties, those countries would be permitted to continue to maintain the compulsory licence regime.21 The regime would only apply to wireless on demand transmissions; wired on demand transmissions would not have come under Article 11bis(1)(ii), and the Berne Convention therefore would not have permitted compulsory licensing with respect to those transmissions. As for the scope of the ‘making available’ right, this essay has endeavoured to show that not all forms of communication of works over the Internet come within its reach. Moreover, some of the excluded (or at best ambiguously covered) communications may be economically significant. This suggests that, despite the aim of the WIPO Treaties’ enactors to assure ‘effective and uniform’ ‘protection of the rights of authors’,22 technology may continue to outstrip the ingenuity of the drafters of multilateral instruments. 21 22

See Agreed Statement to WCT Art. 8: ‘It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2).’ WCT Preamble, recital 1.

17 Private copying licence and levy schemes: resolving the paradox of civilian and common law approaches andrew f. christie ∗

A. Introduction The issue of private copying and its implications for copyright owners is not new, and suggested resolutions of the conflicting interests at stake are varied. One such resolution is the implementation of statutory licence and levy schemes. This short paper examines a paradox about these schemes. Statutory licence and levy schemes for private copying have been readily accepted in continental European countries for many decades. By contrast, such schemes have only recently begun to emerge in common law countries. This situation is paradoxical – the statutory licence and levy scheme is common in those jurisdictions which place significant emphasis on authors’ moral rights, and yet is rare in those countries that give primacy to the utilitarian rationale for copyright. Why is this so? This paper makes some observations on this topic, which may explain the paradox. It begins by analyzing the differing starting points for dealing with private copying in civilian and common law systems, using the German, United Kingdom and Australian experiences as paradigmatic. This analysis sheds light on the way in which the nature of the problem of private copying is perceived in those two systems. This paper then observes the legislative responses to this problem that have occurred in the two systems, and in particular in Germany, Canada and the United States. A view is then offered about what conclusions might tentatively be drawn from these analyses and observations in respect of the future resolution of the problem of private copying. ∗

Davies Collison Cave Professor of Intellectual Property, University of Melbourne Law School; Director, Intellectual Property Research Institute of Australia, University of Melbourne. The author gratefully acknowledges the contributions of John Davidson, Saba Elkman, Katerina Gaita and Sarah Moritz.

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B. The paradox When one looks at statutory licence and levy schemes for private copying throughout the world, it becomes apparent that the vast majority of such schemes are in the civilian law countries of continental Europe.1 Very few of such schemes are in the common law world. This appears paradoxical, because the continental European copyright system is viewed stereotypically as a system of ‘authors’ rights’2 – that is, a system where the primary purpose of copyright is to protect the personal interests of authors. Under this view, copyright is a natural entitlement of the author: because a work reflects the personality of the author, copyright must exist so that the author can control the uses to which the work is put.3 Consequently, the emphases in the copyright law of civilian countries are often significantly different from those in the copyright law of common law countries. There is, for example, a greater emphasis on moral rights, and the authors’ economic rights are treated somewhat differently.4 A statutory licence and levy scheme may appear antithetical to a copyright system in which the authors’ rights are paramount. This is because a statutory licence and levy directly interferes with the relationship between the author and the audience which enjoys the author’s work. Put simply, a statutory licence and levy removes a degree of control from the author. Such a scheme effectively declares that a licence will be imposed, for which compensation is received by means of a levy, irrespective of authorial consent. This appears contrary to one’s stereotype of the principles underpinning continental European copyright law. It is, however, a fact that all the early private copying licence and levy schemes were enacted in continental Europe. Hence one is led to ask why this might be. 1

2

3

4

Countries with a statutory licence and levy for analogue recording media include Austria, Belgium, Denmark, France, Finland, Germany, Greece, Hungary, Iceland, Italy, the Netherlands, Norway, Poland, Portugal, Spain, Sweden and Switzerland. At least one of these countries also has a similar legislative scheme for digital media: see article 56 Law on Copyright and Neighbouring Rights (Belgium). See e.g. M. Rehbinder, Urheberrecht (Verlag Beck, 2002), p. 182; S. Ricketson, The Law of Intellectual Property (Law Book, 1984) p. 6; K. Garnett et al., Copinger and Skone James on Copyright (13th ed., Sweet and Maxwell, 1999), Volume I, p. 29. As reflected in the foundational case Gema v. Grundig 1 ZR 8/54, 17 BGHZ 266, [1955] GRUR 492: ‘The author’s control of his work . . . results from its very own nature . . . and merely finds recognition and form through legislation.’ J. McKeough, et al., Intellectual Property: Commentary and Materials (3rd ed., Thomson, 2002), p. 18.

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The stereotype of the Anglo-American common law copyright system is that it is a system of ‘owner’s rights’.5 Under this view, copyright is an economic tool: it provides a solution to an economic problem. The economic problem is one of sub-optimal levels of creation of works. The solution is the grant of proprietary rights over the author’s work. Put simply, copyright’s essential purpose is to correct market failure. This market failure arises because the work, by virtue of being intangible, is non-rivalrous and non-excludable. That is to say, the consumption of the work by one person does not deprive other persons of it, and it is not possible to exclude other persons from consumption of the work unless proprietary rights are given in relation to it. Without the grant of proprietary rights in relation to the work, the work is likely to be subject to free-riding by third parties (e.g. unauthorized reproduction of the work) and hence the creator of the work is unable to appropriate the full value of the work. This, in turn, reduces the incentive for creators to create works, with the result that there is suboptimal production of works (a ‘deadweight loss’). Copyright avoids this deadweight loss by granting proprietary rights in relation to the work. Given this strongly utilitarian rationale for copyright, one would assume that the common law copyright system would be particularly sensitive to, and embracing of, schemes solving economic problems. Private copying is an economic problem, and a statutory licence and levy scheme is a solution to this problem. Thus, one would expect to see statutory licence and levy schemes for private copying within the copyright laws of common law countries. Yet, until relatively recently, there were no such schemes in common law copyright regimes; and even today they are relatively rare. So the paradox emerges: the common law copyright system resists the solution of a statutory licence and levy scheme, despite it appearing consistent with a utilitarian justification for copyright – and yet the civilian copyright system embraces it, despite such an approach appearing antithetical to a system that places the entitlement of the author as paramount. Why?

C. Resolving the paradox 1. The default position It may be argued that the reason for the paradoxical situation described above is the different ‘default’ position on private copying within the 5

S. Ricketson, supra n. 2, at p. 7; see also D. Lindsay, The Law and Economics of Copyright, Contract and Mass Market Licences (Centre for Copyright Studies, 2002).

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DE (pre-1965)

CA (pre-1997) Private Copying Not Excepted

Private Copying Excepted

No Remuneration (in practice)

No Remuneration (in law)

Figure 1 Default position on private copying

civilian and the common law copyright systems. The different default positions are illustrated in Figure 1. In Figure 1, Germany (DE) is used as the paradigm of the civilian copyright system. Put in simple terms, prior to the introduction of a statutory licence and levy, there existed in German copyright law the situation that private copying was excepted from infringement, and there was no obligation on private copiers to remunerate the author for private copying.6 Essentially, it was understood that the author could not control consumption of a work in the domestic realm where private copying was involved, insofar as such private copying was for noncommercial purposes.7 All the author could practically control was the dissemination of the work to the audience. The author’s right to remuneration was viewed as resulting from the enjoyment which an audience derives from it.8 Given the genuine exception to copyright infringement vis-`a-vis private copying as contained in Article 15(2) of the Literatururhebergesetz 1901, however, payment was not owed to the author. The author had no exclusive rights over such copying, and hence was not entitled to remuneration for it. The situation in Germany before the introduction of a statutory licence and levy contrasts markedly with copyright law as it is at present in the United Kingdom and Australia,9 and as it was until recently in Canada. 6 7 8 9

Article 15(2) Literatururhebergesetz (LUG) 1901. Gema v. Grundig 1 ZR 8/54, 17 BGHZ 266, 271–2 [1955] GRUR 492. Ibid. In fact, a statutory licence and levy scheme for private audio copying was introduced into Australian copyright law in the late-1980s, but was found unconstitutional: see Australian Tape Manufacturers Association Ltd v. Commonwealth of Australia (1993) 176 CLR 480. In that case, the High Court ruled that Part VC of the Copyright Amendment Act 1989 (Cth)

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In these legal systems there exist very limited exceptions to the copyright owner’s rights. The most important exception is for copying done for research and study.10 That exception does not, however, cover private copying in the sense discussed here. The default position in the common law world (as exemplified by the United Kingdom and Australia) is, therefore, that no private copying is permitted. Further, in practice there is generally no remuneration paid for private copying which occurs in the common law countries. It is true that if the copyright owner can identify the occurrence of private copying and can prosecute those doing it, then the copyright owner can receive remuneration for it. In practice, however, there is really no entitlement to remuneration for private copying. This is because the occurrence of such copying is so difficult to identify, and thus is so difficult to prosecute, and hence is so difficult to licence. The situation described above is a polarization. At one extreme (exemplified by Germany pre-1965), private copying is permitted as a matter of law; at the other extreme (exemplified by the United Kingdom, Australia and, until recently, Canada), private copying is not permitted as a matter of law. Interestingly, in neither case is remuneration available to the copyright owner whose work has been privately copied. In the case where private copying is permitted, remuneration is not required as a matter of law. In the case where private copying is not permitted, remuneration is generally not available due to the practicalities of enforcing the right to prevent private copying.

2. The move to the middle ground As with all polarizations, there is a middle ground. The middle ground is that private copying is permitted (under a statutory licence) and remuneration for it is paid (under a statutory levy). The rationale for this middle ground is as follows. The reality is that private copying is occurring, and increasingly so given technological developments. Such copying is objectionable to the copyright owner, but in practice it cannot be prevented. The compromise solution is to legitimize the inevitable (the private copying) and at the same time provide the owner with the otherwise unobtainable (remuneration for the copying).

10

was invalid because it was a revenue enactment that had been passed in the legislature in an incorrect manner. For example: s. 29(1), Copyright, Designs and Patents Act 1988 (UK); ss. 40 and 103C Copyright Act 1968 (Aus); and s. 29, Copyright Act R.S.C. 1985, c. C-42 (Canada).

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UK, AU

DE (1965) CA (1997)

Private Copying Not Excepted

Private Copying Excepted

Private Copying Excepted

No Remuneration (in practice)

Remuneration (Levy)

No Remuneration (in law)

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Figure 2 Move to the middle ground: statutory licence and levy

It is noteworthy that no jurisdiction appears to make use of the middle ground as the default position on private copying. Nevertheless, this middle ground position is now being obtained by way of legislative reform. It was first achieved in the civilian copyright system, with Germany leading the way in 1965.11 It was only quite recently, however, that this middle ground position was reached in the common law system too, with the new provisions on private copying in Canada.12 This move to the middle ground is illustrated in Figure 2. The idea for a middle ground solution to the problem of private copying emanated from Germany in 1965. At that time, it was recognized that the previous treatment of private copying warranted reconsideration, due to technological advancement. In particular, the nature and potential scale of private copying was changing, due to the possibilities for automation of private copying provided by tape recording machines. It would be unfair were the author not entitled to prevent such automated private copying.13 Accordingly, such copying was found to not be within the private copying exception.14 The problem that arose upon this finding was how to permit the copyright owner to enforce the right against this sort of copying. There was a particular dilemma in that privacy was then, and continues to be, guaranteed in Article 13 of the Basic Law. All mechanisms considered for the 11 12 13 14

S. 53 Urhebergesetz (UrhG) 1965. Part VIII: Private Copying, Copyright Act R.S.C. 1985, c. C-42. Gema v. Grundig 1 ZR 8/54, 17 BGHZ 266, 278, 290, [1955] GRUR 492. Ibid.

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enforcement of copyright against the infringing private copier interfered with that right to privacy. It was because of this dilemma that a solution was reached, whereby a statutory licence was introduced for private copying onto tapes, and a statutory levy was imposed on manufacturers of recording devices.15 It was understood that this levy would ultimately reach the person who benefited directly from the licence to copy for private, noncommercial purposes. Canada, in somewhat different circumstances, adopted a very similar system in 1997.16 At the outset there was no licence for private copying under the Canadian copyright legislation. However, by the mid-1990s it was recognised that one type of private copying in particular – the private copying of musical works – was so pervasive that it constituted a significant financial loss to copyright owners. In justifying the need for a private copying regime, the Canadian government cited the 1995 Report of the Task Force on the Future of the Canadian Music Industry, which found that nearly 44 million blank tapes were sold in Canada in 1995 and, of those, that approximately 39 million were likely used by consumers to copy sound recordings.17 In response to this problem, Canada introduced both a licence and a levy for the private copying of musical works.18 Canada now finds itself in essentially the same middle ground position as Germany did in 1965.

3. The reason for the move As Figure 3 shows diagrammatically, there has been a convergence of approach to the problem of private copying amongst the civil law and the common law countries. It appears that the civilian copyright systems 15

16 17

18

S. 53 UrhG 1965 (Germany). It should be noted that a European Union Directive has been passed in an attempt to harmonise elements of copyright in the Member States of the European Union. The relevant Directive is the Directive of the European Parliament and of the Council on the harmonisation of certain Aspects of copyright and related rights in the information society, 2001/29/EC. This Directive will, of course, impact on the law concerning private copying in Germany (as well as other Member States). However, the Directive allows Member States to retain legislative exceptions, or indeed to legislate to create exceptions, to copyright for private copying for private use and non-commercial purposes: see Article 5(2)(b). Part VIII: Private Copying, Copyright Act (R.S. 1985, c. C-42) (Canada). See Canada, House of Commons of Canada, Standing Committee on Canadian Heritage, ‘A study of Bill C-32, An Act to amend the Copyright Act’ (3 October 1996), Evidence of Hon. Sheila Copps ([then] Deputy Prime Minister and Minister of Canadian Heritage), online: Parliament of Canada: http://www.parl.gc.ca/committees352/heri/evidence/2196-10-03/heri-21-blk101.html (date accessed: 21 March 2001). See ss. 80 and 82 of Part VIII: Private Copying, Copyright Act R.S.C. 1985, c. C-42 (Canada).

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converged to the middle ground to solve what was essentially a philosophical problem. This philosophical problem was that traditionally the author should not enter the private space of the user of copyright material,19 and yet not to allow the author to do so in the world of automated copying is unfair.20 By contrast, the Canadians converged to the middle ground to resolve what was primarily a practical problem. This practical problem is that the author needs to be allowed to control private copying but cannot do so due to the difficulty in identifying and restraining its occurrence. The resolution to these problems is the same: the legislature expressly sanctions private copying (by way of a statutory licence) and at the same time expressly mandates compensation to the author (by way of a statutory levy). What can be learned from the convergence, from very different starting points, of the German and Canadian copyright systems insofar as they address private copying? Perhaps the German statutory licence and levy scheme was earlier in time precisely because German copyright law was confronted with a philosophical dilemma. On the one hand, privacy was and continues to be routed in the Basic Law; on the other hand, an author has a moral entitlement to remuneration which results from the ‘debt of gratitude’ owed by consumers for their enjoyment of an author’s work.21 By contrast, the general understanding of copyright in the common law world is that it provides an incentive for the production of the optimal amount of creative works. So long as authors continue to create, the practical problem of the enforcement of an author’s remuneration right does not demand a resolution, or such a resolution first gains impetus only when the financial values involved are considerable.

D. The Curious Case of the United States The case of private copying in the United States is unique: the default position of the law has aspects of both the continental European system and the Anglo-common law system. This unique position results from the primary legislative provision applicable to private copying: the ‘fair use’ defence.22 The allegory of Schr¨odinger’s Cat comes to mind when one thinks about the United States’ fair use provision. Whether or not an instance 19 20 21 22

Gema v. Grundig 1 ZR 8/54, 17 BGHZ 266, 279 [1955] GRUR 492. Ibid. Ibid. Copyright Act 1976, 17 U.S.C. §107.

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of private copying is an infringement of copyright under US law depends on whether that copying constitutes a fair use. What is and is not a fair use is fact-specific, and cannot be predicted with certainty in advance of a court ruling. In the allegory of Schr¨odinger’s Cat, there is a superposition of possible outcomes (the cat is both dead and alive) prior to opening the lid of the box. Likewise with fair use, there is a superposition of possible outcomes (the private copying is both permitted and is an infringement) prior to a court ruling on the matter. The superposition of states of Schr¨odinger’s Cat does not collapse to a single outcome (a cat that is either dead or alive) until the lid of the box is lifted and the cat is observed for signs of life. With fair use, the superposition of states does not collapse to a single outcome (an act of private copying that is either permitted or is an infringement of copyright) until a court rules definitively on an infringement suit. If an act of private copying is a fair use, then that act is not an infringement of the rights of the owner of the copyright in the work that was copied, and accordingly the law does not require the payment of any remuneration to the copyright owner. If, however, an act of private copying is not a fair use, then that act is an infringement of the rights of the owner of the copyright in the work copied. It does not follow, however, that the copyright owner will in fact receive remuneration for such acts of private copying. As discussed above, there is the practical problem of the copyright owner identifying acts of private copying and enforcing rights against private copiers. In practice, the copyright owner is generally unable to obtain remuneration for private copying even when it is not permitted as a fair use. It follows, therefore, that the default position in the United States has aspects of both the continental European civilian system and the Anglocommon law system default positions. This position is illustrated in Figure 3. Recently (albeit in a minor way) the United States, like Canada, has moved to the middle ground. The case in point is the Audio Home Recording Act of 1992.23 This Act confers on consumers a right to engage in non-commercial audio home recording, and provides compensation to copyright owners for losses arising out of such recording by way of a royalty on the transfer price of recording devices and recording media.24 It 23 24

Pub. L. No. 102–563, 106 Stat. 4237 (1992); codified at 17 U.S.C. §§ 1001–1010. In addition, the Act obliges manufacturers to incorporate technological copy protection measures into recording devices.

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NON-FAIR USE

FAIR USE

Private Copying Not Excepted

Private Copying Excepted

No Remuneration (in practice)

No Remuneration (in law)

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Figure 3 US default position: fair use exception

NON-FAIR USE

STATUTORY LICENCE

FAIR USE

Private Copying Not Excepted

Private Copying Excepted

Private Copying Excepted

No Remuneration (in practice)

Remuneration (Levy)

No Remuneration (in law)

Figure 4 Alternative US approach: AHRA (1992)

is, in short, a statutory licence and levy scheme. The situation pertaining to certain private copying in the US post enactment of the Audio Home Recording Act is illustrated in Figure 4.

E. Conclusion What, if anything, can be concluded from the above analyses of and observations on the response of civilian and common law copyright systems to the problem of private copying? It would seem that there is an inexorable move in each system towards the middle ground of resolving the dilemma of private copying by way of a statutory licence

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and levy – irrespective of the underlying rationale for and philosophy of the copyright law concerned. Although this move to the middle ground occurred earlier and more comprehensively in Europe, the US and Canadian experiences suggest that the adoption of a statutory licence and levy approach will become more common in common law jurisdictions in the future. It was surmised above that the reason for the time-delay in this convergence of the two systems is explained by the way in which the problem is perceived within those systems. Because the problem of private copying was perceived essentially as a philosophical problem within the civilian system, the need for a solution to the problem was perhaps considered more pressing than it was in the common law system. The latter responded only when the economic nature of the problem became particularly significant. Looking at these developments at an abstract level, it might be concluded that there has been and will continue to be a natural evolution of both the authors’ rights system and the owners’ rights system towards statutory licence and levy schemes as a means of solving the problem of private copying, whatever the technology involved.25 25

It is acknowledged that the observed moves toward statutory licences and levies have occurred in either the analogue era (e.g. Germany) or the early digital era (e.g. United States and Canada) rather than the more mature digital era of the twenty-first century. By ‘early digital’, the author means the digital era prior to mass use of the Internet. In the context of private copying, the ‘early digital era’ does not include the Napster phenomenon. The US Audio Home Recording Act of 1992 is ‘early digital’, in that it is concerned primarily with copying by digital tape recording machines; computers are excluded from its operation: Recording Industry Association of America v. Diamond Multimedia Sys., Inc. 180 F. 3d 1072, 1076 (9th Cir. 1999). The Canadian legislation, similarly, does not (yet) target computer equipment used for private copying. It might be argued that in the current, more mature, digital era – that is, the era post-Napster – the situation will be different. This author thinks not.

18 Paternalism and autonomy in copyright contracts paul goldstein ∗

Most, if not all, of the great controversies in Anglo-American copyright situate copyright owners against copyright users – what William Cornish in his 2002 Horace S. Manges Lecture at Columbia Law School called a ‘two-dimensional’ approach ‘with its concentration upon the exclusive right to prevent users from engaging in infringing activities’.1 It must have been a surprise for many in Cornish’s American audience to discover that this Cambridge luminary had crossed the Atlantic not to opine on such current battles as those between copyright owners and Internet users, but rather to weigh in on the ‘tripartite linkages implanted in European laws on author’s rights’, specifically, French and German measures to protect authors from unfair exploitation by the publishers and other intermediaries who bring their works to market.2 In fact, Cornish could not have selected a more timely topic, nor a better venue in which to explore it. It is the creative author who stimulates copyright’s moral pulse, and the economic relationship between authors and publishers promises to be a dominating issue for copyright in the present century – even more so in the common law world than in the civil law world where doctrine already closely regulates this fraught relationship. The focus of Professor Cornish’s Manges Lecture was the mandatory remuneration provisions of the 1957 French Authors Rights Law3 and the 2002 amendments to the German Copyright Act4 providing, respectively, ∗ 1 2 3

4

Lillick Professor of Law, Stanford University. W. Cornish, “The Author as Risk-Sharer”, 26 Colum. J. L. & Art. 1 (2002). Ibid. The French Intellectual Property Code, Art. L. 131-4, prohibits lump sum payments in all but a limited number of situations and requires instead that the author participate proportionately, through royalties. The German Copyright Act, Art. 32(1), provides that if the remuneration contractually agreed upon between author and publisher is not equitable, the author may obtain equitable remuneration through judicial proceedings. See generally, K. Gutsche, ‘New Copyright

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for proportional and minimum remuneration to authors (and, in the case of the German legislation, performers). The provisions have no direct counterparts in common law tradition. Nonetheless, other aspects of common law legislation and case law reveal similarly paternalistic motives and aim to serve comparable economic ends. The aim of this essay is to complement Cornish’s reflections on civil law doctrines protecting authors with some details on the approach that one common law jurisdiction – the United States of America – takes to the same issue. US law treats authors more paternalistically in their copyright contract dealings than the nation’s vaunted traditions of contractual autonomy would predict. More than 20 years ago, Barbara Ringer, the former US Register of Copyrights, observed that ‘[t]here is only so much that a copyright statute can do to safeguard the property rights of authors against unintentional, improvident, unfair and unremunerative transfers; but, given the special pressures and the weight of a long tradition favouring “freedom of contract”, the 1976 Act did what it could’.5 Ringer listed the 1976 Copyright Act’s accomplishments: ‘1. It narrowed the scope of ‘works made for hire’. 2. It safeguarded the rights of authors of contributions to collective works. 3. It made copyright divisible, assuring that authors retain any rights they do not transfer. 4. It prohibited involuntary transfers of the rights of individual authors. 5. It reversed the common law presumption that, when an author or artist transfers a prototype copy (a painting or manuscript, for example), the copyright is transferred also. 6. It established a system for terminating unremunerative transfers after a period of years. 7. It established various requirements with respect to the execution and recordation of transfers and the registration of copyright claims. Taken together, these provisions rule out oral transfers, require the authors’ signature for any rights they transfer and, in one way or another, require that anyone claiming copyright ownership must be able to trace their chain of title back to the author.’6

5 6

Contract Legislation in Germany: Rules on Equitable Remuneration Provide “Just Rewards” to Authors and Performers’ (2003) 25 EIPR 366; W. Nordemann, ‘A Revolution of Copyright in Germany’ (2002) 49 J. Copyright Soc’y U.S.A. 1041. B. Ringer, ‘United States of America’, in S. Stewart (ed.), International Copyright and Neighbouring Rights (2nd ed., Butterworths, 1989), pp. 480, 501. Ibid.

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Of these changes, the 1976 Act’s provision for termination of transfers – unremunerative or not – is by far the most dramatic. Section 203 of the 1976 Copyright Act provides that, in the case of grants of copyright interests made on or after 1 January 1978, authors and their statutory successors enjoy the right to terminate the grant at any time during a five year period that begins to run thirty-five years from the grant’s execution.7 The right, which is non-waivable, was intended to serve the same general object as the copyright renewal provisions of earlier acts (provisions that were prospectively eliminated by the 1976 Act): ‘a provision of this sort is needed because of the unequal bargaining position of authors resulting in part from the impossibility of determining a work’s value until it has been exploited.’8 The termination of transfer provisions effectively approximate the goal, if not the precise method, of the French and German royalty provisions by giving author and publisher the opportunity to renegotiate the author’s compensation for a successful work after 35 years. Notably, the 1976 Act exempts works for hire from the operation of the termination of transfer provisions, and these works occupy a far broader domain than might be suggested by Barbara Ringer’s observation that the 1976 Act ‘narrowed the scope of “works made for hire”.’ Ringer’s observation applies only to the first of two alternative formulas that the Act provides for works for hire. The second formula is the more ambitious, sweeping nine economically important categories of independently created works into its embrace, so long as the parties have agreed in writing that the work shall be considered a work for hire: ‘a work specifically ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in 7

8

In the case of grants of renewal term interests executed before 1 January 1978, s. 304(c) gives authors and their statutory successors the right to terminate the grant at any time during a five-year period beginning on 1 January 1978, or 56 years after the date statutory copyright was originally secured, whichever is later. See generally, P. Goldstein, Copyright (Aspen Publishers, 2003) paras. 4.10.5–4.11. H. R. No. 1476, 94th Cong., 2d Sess. 24.

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paul goldstein the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.’9

The work for hire provision, particularly as expanded by this second clause, effectively negates most if not all of Ringer’s ‘pro-author’ changes in circumstances where the author lacks the bargaining power or the will to work as a freelancer. In addition to circumventing the termination of transfer provisions, the work for hire rubric can obliterate the rights of contributors to collective works because it vests rights initially in the author’s employer; it reserves no rights to the actual author because it vests all in the employer; and it eliminates any pro-author consequence from the execution and recordation safeguards because title in the case of a work made for hire will vest initially in the employer in any event. Authors in the United States may fare better under judicial construction of copyright contracts than under legislation, such as the termination of transfer provisions, that intrudes more directly into the contracting process. Some, but not all, state and federal courts construing copyright contracts will place a thumb on the scale in favour of authors by applying a presumption that interests not expressly conveyed are impliedly reserved to the author.10 Courts resolve contract ambiguities against the party responsible for drafting the contract, ostensibly because the drafter was best placed to express the parties’ shared intentions,11 or because, in the typical copyright contract negotiation, the drafting party will also be the more experienced party and so should bear the consequences of any drafting failure.12 Because, in the great majority of cases, a presumption against the drafter – the publisher or other commercial enterprise that came to the bargaining table with a form agreement in hand – will effectively be a presumption in favour of the author, these decisions are comparable to those in which courts apply a more explicit pro-author bias. 9 10 11

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§101. See, e.g., Warner Bros. Pictures v. Columbia Broadcasting Sys., 216 F.2d 945 (9th Cir. 1954). Restatement (Second) of Contracts, §206 (1979) (‘In choosing among the reasonable meanings of a promise or agreement or a term thereof, that meaning is generally preferred which operates against the party who supplies the words or from whom a writing otherwise proceeds’). See, e.g., Rey v. Lafferty, 990 F.2d 1379, 1391 (1st Cir. 1993); Apple Computer, Inc. v. Microsoft Corp., 709 F.Supp. 925, 929 (N.D. Cal. 1989).

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State courts, most notably in New York, will sometimes extend a paternalistic hand by limiting the publisher’s freedom to reject, for any reason or for no reason at all, an author’s delivery of the work under contract. Book publishing agreements rarely if ever expressly obligate the publisher to accept a delivered manuscript. While early decisions gave the publisher a broad, almost unlimited, discretion to decide whether the submitted work’s form, style and content were satisfactory,13 later courts, evidently concerned that such broad publisher discretion could render the contract illusory, implied an obligation of good faith into the publisher’s decision whether to accept delivery.14 Beginning in the 1980s, courts in the Southern District of New York – the venue of the great bulk of these contract disputes – further narrowed the publisher’s discretion by tying good faith to an objective standard and shifting to the publisher at least part of the burden of proving it. In one case, the court ruled that, having induced the author ‘to write the first half of the novel in reliance on its approval of the outline, and having induced her to complete the novel in reliance on its enthusiastic reception of and payment for the first half’, the publisher owed the author ‘something more than simply an honest belief that the manuscript was unsatisfactory as written. It owed her, at the very least, a detailed explication of the problems it saw in the manuscript, and an opportunity to revise it along the lines its editors suggested.’15 Courts divide on whether a publisher can reject a work because the market anticipated for the work failed to materialize. At least one court has ruled as a matter of law that a publisher may weigh financial considerations in deciding whether to accept a work.16 But another court, applying California law to the contract terms before it, ruled against a publisher’s argument that it could reject an author’s manuscript for any good faith reason, whether or not related to the quality of the work.17 13 14

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See, e.g., Walker v. Edward Thompson Co., 37 A.D. 536, 56 N.Y.S. 326 (1899). See, e.g., Demaris v. G.P. Putnam’s Sons, 379 F.Supp. 294 (C.D. Cal. 1973) (publisher entitled to reject manuscript on life of Howard Hughes where it obtained lawyer’s opinion that publication would expose it to lawsuits for copyright infringement and invasion of privacy); Goodyear Publishing Co. v. Mundell, 75 A.D.2d 556, 427 N.Y.S.2d 242 (1980). Dell Publishing Co. v. Whedon, 577 F.Supp. 1459, 1462–1463 (S.D.N.Y. 1984). See also Harcourt Brace Javanovich, Inc. v. Goldwater, 532 F. Supp. 619 (S.D.N.Y. 1982) (ruling that, in rejecting the manuscript of the author’s political memoir, the publisher had acted improperly because it failed to provide the author with editorial assistance that might have corrected the claimed defects in the manuscript). But see Doubleday & Co. v. Curtis, 763 F.2d 495 (2d Cir.), cert. dismissed, 474 U.S. 912 (1985). Random House, Inc. v. Gold, 464 F. Supp. 1306 (S.D.N.Y.), aff’d, 607 F.2d 998 (2d Cir. 1979). Chodos v. West Publishing Co., 292 F.3d 992 (9th Cir. 2002). On the expanding duties of grantees under copyright contracts, generally, see P. Goldstein, supra n. 7, para. 4.6.

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State, not federal, law is the main repository for contract doctrine in the US federal system. Nonetheless, federal courts, particularly in the Ninth Circuit which encompasses California among other states, have evolved a federal common law of copyright contracts. In one decision, S.O.S., Inc. v. Payday, Inc.,18 the Ninth Circuit Court of Appeals substituted this federal common law for an otherwise applicable California rule that contracts should be construed against the drafter. (This was a comparatively unusual case in which the copyright owner had drafted the contract, and the California rule would have required the court to presume that the owner had granted to its licensee any right that it had not expressly reserved.) Drawing on the principle that the Copyright Act aims to protect authors in their contract dealings the court fashioned a countervailing federal law presumption favoring copyright owners, so that ‘copyright licenses are assumed to prohibit any use not authorized’.19 In the court’s words, ‘[w]e rely on state law to provide the canons of contractual construction, but only to the extent such rules do not interfere with federal copyright law or policy’.20 To be sure, not all contract rules – federal or state – will tip the scales in the author’s favour. For example, when determining whether ambiguous language in a copyright contract’s granting clause effects a narrow transfer, such as an exclusive licence, or a broad one, such as an assignment, courts generally hold that the more extensive right has been granted.21 Also, some federal courts have been less ambitious than those in the Ninth Circuit in developing an interstitial common law of copyright contracts.22 Nonetheless, it should be clear that judicial construction of copyright contracts to vest in authors all of the rights – including rights in new technologies and new markets – that are not expressly granted may be even more generous to authors than the French and German remuneration 18 20

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19 886 F.2d 1081 (9th Cir. 1989). 886 F.2d at 1088. 886 F.2d at 1088. See also Cohen v. Paramount Pictures Corp., 845 F.2d 851, 854, (9th Cir. 1988) (‘Moreover, the license must be construed in accordance with the purpose underlying federal copyright law. . . .We would frustrate the purposes of the Act were we to construe this license – with its limiting language – as granting a right in a medium that had not been introduced to the domestic market at the time the parties entered into the agreement’). See, e.g., Houghton Mifflin Co. v. Stackpole Sons, Inc., 104 F.2d 306, 311, (2d Cir.) cert. denied, 308 U.S. 597 (1939); Hubbard Broadcasting, Inc. v. Southern Satellite Sys., Inc., 593 F.Supp. 808, 810–811 (D. Minn. 1984), aff’d, 777 F.2d 393 (8th Cir. 1985), cert. denied, 479 U.S. 1005 (1986). See, e.g., Bartsch v. Metro-Goldwyn-Mayer, Inc., 391 F.2d 150 (2d Cir. 1968).

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provisions, for they give authors a plenary right over markets, such as the videocassette and DVD market, that were not contemplated at the time the contract was made. In this respect, they approximate Article 31(4) of the German Copyright Act, which provides that no grant can encompass a use that depends on a technology unknown at the time of the grant.23 It is of course debatable whether authors are the beneficiaries of paternalistic measures or are in fact their victims. Particularly in the case of mandatory, nonwaivable measures such as the 1976 Copyright Act’s termination of transfer provisions, these regulations may require authors to forgo a present economic benefit – the added value a publisher would be willing to pay to be free of the threat of termination – that may be worth much more to authors than some future, and possibly dubious, benefit arising from contract renegotiation 35 years hence. (Cornish’s trenchant observations on this phenomenon – accounting not only for economic theory, which would characterize any such contract constraints as foolish, but also for explanations based on how authors view the phenomenon – are well worth reading.24 ) By contrast, rules of contract construction (so long as they are only default rules and are in that sense waivable) offer a less intrusive version of paternalism. They enable authors, if they wish, to trade the promise of long-term advantage for the instant gratification of modest fortune, and do so without sacrificing the moral rewards of autonomy. 23 24

See, e.g., Videoweitausvertung (‘Secondary Exploitation on Video’) German Federal Supreme Court, 11 Oct. 1990 (Case No. I ZR 59/89), 22 I.I.C. 574 (1991). W. Cornish, ‘The Author as Risk-Sharer’ (2002) 26 Colum. J. L. & Arts 1, 4.

19 Criminality and copyright colin tapper ∗

Our honorand has never espoused conventional wisdom, especially not that promoted by those pressing for ever greater expansion of the law of intellectual property to protect the interests of the entertainment and information industries.1 It is thus fitting to examine the expansion, both in extent and severity, of the imposition of criminal sanctions as a means for its enforcement.2 It is not so long since the highest courts3 rang with denunciation of any attempt to equate infringement of intellectual property rights with the crime of theft. Rank Film Ltd v. Video Information Centre4 was a unanimous decision of a very strong House of Lords, the main speech being delivered by Lord Wilberforce.5 The defendant resisted an Anton Piller order as breaching his privilege against self-incrimination by soliciting information and the supply of documents relating to alleged pirating6 of video tapes. Three crimes were advanced; infringement of copyright, criminal conspiracy to infringe, and criminal conspiracy to defraud. The ∗ 1

2 3

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Magdalen College, Oxford. For a recent example see [2003] EIPR 447 questioning the wisdom partly for such reasons of the Proposal for a Directive of the European Parliament and of the Council on measures and procedures to ensure the enforcement of intellectual property rights: COM 2003 46 final 30 January 2003; see now as adopted OJEC 2004, L 157/45, 2004/48/EC. Discussion is here largely confined to the law of the United Kingdom, and to copyright. Nor was infringement of copyright considered by the Criminal Law Revision Committee in its Eighth Report Theft and Related Offences (Cmnd. 2977, 1966); or mentioned by Smith in The Law of Theft before the 4th edition in 1979, and then dismissed as clearly outwith the ambit of theft. [1982] AC 380. With the explicit concurrence of Lords Diplock, Russell and Roskill, and without dissent from Lord Fraser. See also in the United States Dowling v. United States 473 U.S. 207 (1985) at 217 per Blackmun J: ‘interference with copyright does not easily equate with theft, conversion or fraud’. For a distinction between ‘pirating’, ‘counterfeiting’ and ‘bootlegging’ in this context see R v. Johnstone [2003] UKHL 28, per Lord Nicholls at para [1].

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claimants argued that any such privilege could be abridged by section 31 of the Theft Act 1968. Although Lord Wilberforce disregarded the first two crimes, on the interesting ground that they were moribund, he thought that the third was valid,7 and unaffected by section 31, because ‘Infringement of copyright is not theft’.8 This was crucial, and all the stronger since the House of Lords was reluctant to disallow the appeal, indeed Lord Russell pleaded for extension of section 31 to such cases.9 Yet there remains strong pressure to regard infringement as theft.10 The Commission of the European Union recently asserted counterfeiting and pirating to be criminal offences in all member states.11 It deplored discrepancy and defect in the varying versions, and promised to investigate supplementation of national law with a layer of Community penalties, perhaps the imposition of minimum levels of penalty, and even the harmonisation of procedure and evidence. It argued that such illegality comprised 5–7% of world trade, cost hundreds of billions of Euros, and endangered 200,000 jobs.12 It ascribed growth to the advent of digital technology, more especially asserting 39 per cent of operational software illicit. It felt criminality of infringement to be more dissuasive, and more effective procedurally and evidentially. It is proposed to consider here first, the validity of the criminalisation of the infringement of intellectual property rights, in the light of history; and second, very briefly, the value of doing so, in the light of policy.

A. Validity Before there were printed books little distinction was made between physical documents and rights to what they conveyed. It was common to treat 7 8 9 10

11 12

Which was clearly the case since some of the defendants were facing just such charges. At 443A. At 448F. As indicated by lobbyists with names like ‘Federation Against Copyright Theft’ (FACT); books entitled Copyright Theft (J. Gurnsey 1995); and most egregious of all the remark by a government minister that ‘Theft is theft’ when recommending the assimilation of penalties for infringement of copyright and trade mark, Hansard H. C. Vol. 383 col. 289. In the United States it has even extended to the title of legislation as in the No Electronic Theft Act 1996, although this may strive more for acronymic aptitude than analytic exactitude. Combating Counterfeiting and Piracy in the Single Market COM (98) 569 Final at para 5.3. Ibid., para. 5. It is pertinent to remark that none of these claims is authenticated at all convincingly, no explanation is offered for the truly staggering imprecision of a range of 2 per cent of total world trade, and one suspects that much of it rests on the sloppy, but industrially convenient, assumption that the existence of an illicit copy can be equated with the loss of a sale of the legitimate item at full price.

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the right to copy as conveyed with the manuscript, and natural to protect both with the law of theft.13 Only after the invention of the printing press did greater facility for multiplying copies create any need to distinguish. At first the primary consideration of the state was not so much with copying the contents of works as with their nature, and in particular with the regulation of their distribution. Royal favour was extended to enable wider distribution of works furthering the causes of the established powers.14 However, the invention of printing coincided, by no means coincidentally, with the bitter religious and political disputes of the Reformation and the emergence of the nation state, so control was needed to prevent use of the press by potential subversives.15 Such control was expressed: positively, by royal warrant privileges to print particular works,16 and even patents to print works of a generic class, such as law books or bibles, incidentally expanding patronage and raising revenue; and negatively, by regulation requiring all17 printing presses to be licensed, and ultimately giving jurisdiction to enforce such regulation to the then newly established Court of Star Chamber. However, the apparatus of government was still in its infancy, and the very flood of measures designed to quell abuse demonstrates the ineffectiveness of these controls. In an eery precursor of modern attitudes18 the public sector involved the private so as to achieve its objectives. The interests of booksellers and printers were engaged by granting a Charter to the Stationers’ Company to regulate for the government. Its preamble makes it abundantly clear that the primary aim was regulation. The means was largely19 to permit the Company to license printing and publication of works, to establish evidence of such matters by entry in the Company’s register, to permit enforcement by conferring wide powers of 13 14 15 16

17 18

19

See H. Ransom, The First Copyright Statute (Univ. of Texas Press, 1956) p. 21. For an early example see 1 Richard III c. 9 (1484). It is thus unsurprising to find Henry VIII proclaiming royal control over printing in 1534 in 25 Henry VIII c. 15. Such privileges appear to have been modelled on a scheme invented in Venice to cope with the earlier use of printing there, but by 1518 the system was sufficiently established in England for it to be expedient to publish a list of extant privileges. For many years a very small number. See the recent controversy about governmental regulation and access to commercial encryption systems for information held in electronic form which caused the provision of encryption information to be dropped from the Electronic Communications Act 2000 and instead inserted into the Regulation of Investigatory Powers Act 2000. Just occasionally conflict arose between printing directly licensed by the Crown and by the Company; see Stationers v. Patentees (Atkyn’s Case) Carter 89 (1666) where the Crown patent prevailed.

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seizure and destruction, and to establish a system of domestic regulation and enforcement through the Company’s ordinances and its own Court of Assistants.20 Involvement of Star Chamber started in 1586, incorporating criminal sanctions, including both fines and imprisonment,21 and was ultimately encapsulated by decree in 1637.22 Even after the demise of Star Chamber in 1641 Parliament extended regulation in statutory form,23 much to the disgust of John Milton,24 so shifting responsibility from the Stationers’ Company to the government, as the Company’s control of printing and publishing began to weaken.25 After the restoration of the monarchy, statutory regulation seamlessly continued in the form of the Licensing Act of 1662. This persisted26 until its final lapse, despite vigorous opposition by the Stationers, in 1694. Although the Company supported further renewal of the Licensing Act it was opposed by those, like John Locke,27 determined to defeat the Stationers’ monopoly, and end regulatory censorship. The Stationers then chose to rest their case on the rights of authors, and press for new legislation to vest them with the fullest rights, not of course mentioning that once so vested, such rights could be assigned, and things proceed essentially as before, with power in the hands of the booksellers, who had by then become dominant over the printers in the Company. The new legislation, although originally drafted according to the wishes of the Stationers, ran into opposition similar to that which had defeated the renewal of the Licensing Acts, and was crucially amended to grant protection not of indefinite duration, but for limited periods of time. It is ironic that the 20 21

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The jurisdiction of which was enhanced by the use of ordinances forbidding recourse to the ordinary courts, see e.g. that of 1678 quoted in H. Ransom, supra n. 13, at p. 81. Although even imprisonment was not always effective as in the late sixteenth century one enterprising printer managed to print ten thousand copies of a particular work despite being imprisoned at the time for just such activities, E. Arber (ed.), A Transcript of the Registers of the Company of Stationers of London 1554–1640 Vol. II, p. 756. Conveniently reproduced in Appendix II to L. Patterson, Copyright in Historical Perspective (1968). Four ordinances in 1643, and more comprehensive legislation in 1649 and 1653. Expressed in Areopagitica. The number of works entered in the Company’s register more than halved in the year following the abolition of Star Chamber. Subject to a hiatus between 1679 and 1685. In yet another uncanny anticipation of later controversy Locke at this time suggested 50 or 70 years as possible limitations of term upon what was not yet commonly described as copyright (although infringement was already described as piracy, with the OED citing an occurrence in this context as early as 1668).

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preamble follows the Stationers’ prescription of vesting rights in authors, and in justifying it on the basis of the encouragement of authorship, but then withholds the crucial ingredient of full ownership in the usual sense of the corpus of rights ascribed to the owner of a chattel.28 The Copyright Act of 171029 essentially adopted the mixture of civil and criminal remedies which had developed over the centuries, characterised in a central provision for the destruction of infringing works, and the forfeiture of a fine, calculated by the number of infringing copies, divided equally between claimant and state.30 The Act also contained provisions designed to restrict monopolistic pricing,31 although these seem never to have been very effective. Its penultimate provision makes its hybrid nature, as between civil and criminal law clear in its reference to ‘Actions, Suits, Bills, Indictments, or Informations for any Offence that shall be Committed against this Act’. Although the limitation of copyright to a term of years was almost certainly derived from the similar limitations on patents for inventions instituted by the Statute of Monopolies in 1624 the orientation of the legislation was different, in that the mischief aimed at by the former statute derived from the success of grants of exclusive patents to manufacture, whereas the mischief aimed at by the latter was the failure of the exclusive liberty to copy. This is reflected in the absence of any new penalties for infringement in the former.

1. Explicit criminalisation of infringement As noted above, the booksellers and publishers opposed the imposition of time limits upon the copyright term, and sought to argue that the effect of the legislation was to add to, but not subtract from, the incidents of a supposed common law copyright.32 Such view was based on the concept of 28 29

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Although the two most common analogies then used for the ascription of copyright were land and children, neither of them capable of being stolen at common law. Or 1709 if the contemporary dating of the start of the year at the end of March is retained. It also constituted the model for the copyright clause in the Constitution of the United States (art. 1 §8 cl. 8), and its first copyright statute (1 Stat. 124 (1790)). Section 1. Section 4. It is noteworthy that printing patents had been explicitly exempted by its s. 10(1) from the operation of the Statute of Monopolies in 1624. One argument for which was that the Act provided no protection for unpublished manuscripts, and for which it was argued copyright protection must exist, and in the absence of statutory provision could come only from the common law.

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copyright accruing as an incident of universal laws of the origin of rights of property. It was dashed by the House of Lords in Donaldson v. Beckett.33 Its rejection in favour of a strictly statutory basis for the ascription of copyright led to the proliferation of legislation to extend the ambit of copyright to different types of work.34 To a greater or lesser extent the form of such legislation echoed that of 1710, although there were small variations such as specific provision for the intervention of common informers,35 the award of double costs,36 and the specification of magisterial jurisdiction.37 In no case, however, despite infringement being referred to as an offence, was there fundamental departure from predominantly civil procedure, often explicitly specified as an action upon the case.38 The catalyst for change seems to have been the development at the end of the nineteenth century of public forms of, especially musical, entertainment. The common informer and damages remedy procedure appears to have been abused,39 leading first to curbs on the procedure,40 then to the involvement of the police in seizure of infringing material,41 and finally in 1906 to the formal imposition of criminal sanctions for infringement.42 This legislation made a number of specified acts including printing, reproducing, selling, and even possessing, pirated copies of musical compositions an offence punishable with a five pound fine for a first offence, with the possibility of imprisonment with hard labour for two months for a subsequent offence. The Act contained a special defence for those who could prove that they acted innocently, although in the case 33 34

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4 Burr. 2408, 98 E.R. 257 (1774). And in the United States by the decision of the Supreme Court in Wheaton v. Peters 8 Pet. 591 (1834). Such as: engravings, Engraving Copyright Act 1734, 1767; prints, Prints Copyright Act 1777; sculpture, Sculpture Copyright Act 1814; dramatic performances, Dramatic Copyright Act 1833; lectures, Lectures Copyright Act 1835; and other forms of fine art, Fine Arts Copyright Act 1862. As it also did in the United States, although there with earlier consolidation in the legislation of 1856 and 1870. 36 Engraving Copyright Act 1767, s. 5. Prints Copyright Act 1777, s. 7 38 Fine Arts Copyright Act 1862, s. 8. Copyright Act 1842, s. 15. See preamble to Musical Compositions Act 1882; T. Scrutton, The Law of Copyright (2nd ed., William Clowes, 1890) pp. 93–94. See above, and further legislation under the same title in 1888. Musical (Summary Proceedings) Copyright Act 1902. This Act refers to such material in part as ‘pirated copies’ defined in s. 3 to mean ‘any copies of any musical work written, printed or otherwise reproduced without the consent lawfully given by the owner of the copyright in such musical work’. It seems to have been passed to prevent publishers resorting to self-help, see T. Scrutton, Law of Copyright (4th ed., 1903), p. 107. Musical Copyright Act 1906. Here too there had been earlier similar legislation in the United States in 1897 revising § 4966 of the by then codified statute.

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of a first offender it also required proof by the prosecution that where copies bore the name and address of printer or publisher, the accused knew that the copies were pirated.43 When copyright legislation was first consolidated in 191144 the legislature made a clear distinction between civil and criminal45 remedies. This legislation extended criminal liability46 to all forms of protected works,47 without enacting the special provisions relating to burden of proof found in the 1906 legislation.48 A feature of this part of the Act was that it permitted an order for the destruction of infringing copies whether or not the accused had been convicted of an offence.49 This criminal offence seems not to have been used to any great extent. Lord Wilberforce said in Rank Film Ltd v. Video Information Centre:50 ‘The criminal offences created by section 21 cover almost precisely the same ground as the bases for civil liability under the Copyright Act 1956 . . . In practice, as one might suppose, section 21 is very rarely invoked: only one case came to our knowledge, namely of a prosecution under the Copyright Act 1911, and potential liability under it might well be disregarded as totally insubstantial. The same argument would apply as regards conspiracy to breach it.’

However, Lord Wilberforce did think that infringement might in a commercial setting amount to fraud, sufficient to provide the basis for conspiracy to defraud.51 This was regarded by the industry as inadequate, and submissions were made to the Whitford Committee to strengthen criminal law in relation to infringement by making mere possession of infringing copies an offence, and transferring the burden to require the accused to negate intent. Both were accepted by the Committee, together with an increase in penalties.52 43 44 45 46 47 49 50

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Musical Copyright Act 1906, s. 1. Here too the United States had moved first by explicitly making infringement of copyright a misdemeanour in s. 28 of its new codifying Copyright Act of 1909. Described as summary. Although mere possession was not generally made a criminal offence. 48 Copyright Act 1911, s. 11(1)(a). Which was explicitly preserved, ibid., s. 11(4)(b). Ibid., s. 11(3)(b). [1982] AC 380 at 441. See also Copyright and Designs Law (Cmnd 6732, 1977) para. 708. The same was true in the United States where it was said in U.S. v. Wells 176 F. Supp. 630 (S.D. Tex., 1959), at 633 of s. 28 of the 1909 Act that ‘there are few guides to the interpretation of this seldom-used criminal statute’. With which some of the defendants had indeed been charged. Cmnd 6732 at para. 711.

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It should, however, be noted that the Committee was reluctant to extend search and seizure powers in respect of infringing material, stating that:53 ‘We are not however prepared to make a recommendation which would involve the police in what is essentially a civil matter unless and until it is clear that this is essential.’

The Copyright, Designs and Patents Act 1988 (‘CDPA’) accepted some of these recommendations. It made possession of an infringing work an offence,54 but still required it to be proved by the prosecution that the accused knew, or had reason to know, that it was an infringing article. It expressly disavowed the use of presumptions to transfer the persuasive burden of negation to the accused.55 Penalties were substantially increased, and explicit powers to search for infringing articles were conferred.56 A further innovation was that general provision was made in section 296 for the creation of criminal offences57 in relation to a number of acts in relation to devices specifically designed or adapted to evade copy protection mechanisms in the case of works in electronic form. For these purposes the burden was reversed. It emerged that such offences were not applicable only to ‘pirates’, but extended to perfectly respectable businesses and businessmen in dispute about the proper limit of copyright protection.58 Indeed, despite strong hints from the Court of Chancery that summary criminal proceedings should be adjourned pending resolution in the High Court, the magistrates refused to do so. A strict view was also taken in Sony Computer Entertainment v. Owen59 of the application of section 296 holding, as in relation to similar legislation in the United States,60 that the mere 53 54

55 57 58 59 60

At para. 718 (emphasis supplied). Although possession only in the course of business, CDPA s. 107(1)(c). Earlier legislation had already introduced an offence of possession in particularly sensitive sectors, Copyright Act (1956) Amendment Act 1982 (sound recording and film); Copyright (Computer Software) Amendment Act 1985 (computer programs). 56 CDPA, s. 107(6). By CDPA, s. 109. Including the publication of information intended to enable or assist in circumvention, CDPA, s. 296(2)(b). Thames and Hudson v. Design and Artists Copyright Society Ltd [1995] FSR 153 (a dispute about what amounted to fair use). [2002] EWHC 45 (Ch.), [2002] ECDR 298. Universal City Studios v. Reimerdes 111 F.Supp.2d 294 (SDNY, 2000); US v. Elcom Ltd 203 F.Supp. 2d 1111 (ND Ca, 2002).

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possibility of such a device being used for purposes other than infringement of copyright was no defence. Still unsatisfied, the industry turned to a different aspect of the developing technology for further protection. Great advances had been made in encryption, and if materials were made available on licence, and only in encrypted form, the incidence of copying might be reduced, and additional revenue generated.61 It is, however, a feature of technological protection that it is often vulnerable to technological counter-measures, especially when the protective technology is incorporated in marketed products. Thus no sooner had the industry devised a scheme of encryption to prevent the copying of DVDs containing copyright works, than hackers had published on the internet code for programs to subvert them. Nevertheless, this approach had attracted the support of governments in most jurisdictions which were net exporters of technology, and information services, so there was the prospect of securing the buttress of international support. It came in Article 11 of the World Intellectual Property Organisation62 Copyright Treaty which provided that contracting states: ‘shall provide adequate legal protection and effective legal remedies against the circumvention of effective technological measures that are used by authors in connection with the exercise of their rights under this Treaty or the Berne Convention and that restrict acts, in respect of their works, which are not authorised by the authors concerned or permitted by law.’

This followed a lead sponsored by the United States.63 A green light was thus shown for the use of criminal law to accomplish this end.64 This legislation is not aimed directly at infringement of copyright,65 but at the evasion,66 or facilitation of evasion,67 of technological measures used for 61 62 63

64

65 66

Essentially the very same motivations which led to the genesis of the whole concept of copyright protection in the sixteenth century, see above p. 268. Hereafter WIPO. For an illuminating account of that lead see P. Samuelson The U.S. Digital Agenda at WIPO, 37 Va J Int L 369 (1997) showing the influence of Bruce Lehman’s Working Group, Intellectual Property Rights and the National Information Superstructure (1995). In the United States it took the form of the Digital Millennium Copyright Act 1998. For a full account see D. Nimmer, ‘A Riff on Fair Use in the Digital Millennium Copyright Act’ (2000) 148 U Pa LR 673. The term ‘paracopyright’ was used in Congress as a generic term to encompass this form of regulation, 144 Cong. Rec. E2136, 2137 (1998). 67 Copyright Act 1976, s. 1201(a)(1). Ibid., sections 1201(a)(2) and 1201(b)(1) .

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the protection of copyright works. Such indirect criminalisation of the means of production of infringing works is reminiscent of the powers of search and seizure of presses vested in the Stationers’ Company in England in the sixteenth century. Encouraged by the TRIPS agreement and the WIPO treaties of 1996 the European Union has produced a huge, and continuing, series of green papers, consultation documents and directives, almost all of them seeking to extend the range of protected rights, means of protecting them and the level of protection, not excluding adjectival concerns such as extension of search and seizure powers, interim remedies and evidential provisions. Such a Directive68 has recently69 been implemented in the United Kingdom by the introduction of the Copyright and Regulated Rights Regulations 2003. These are designed to amend the 1988 legislation so far as it does not already provide for the measures ordered by the Directive.70 In particular, both CDPA section 107 dealing with direct criminal offences, and section 296 dealing with circumvention of protective devices and measures have acquired substantial supplementation. In the case of section 107 this has taken the form of a new sub-section (2A) largely attaching criminal sanctions to the new exclusive right to communicate.71 In the case of section 296, a wholly new and much expanded section has been introduced under the new rubric of Circumvention of Protection Measures. This reflects the broadening of protection so as to deal not only with mechanical protective devices but a large array of protective devices, such as encryption systems, even extending to the protection of rights management systems. It is not possible here to describe or evaluate the whole turgid mass of these provisions, but they follow the position promoted by the United States at the WTO and WIPO. Even before these measures had been implemented, the European Commission had proposed a further Directive72 to harmonize means of enforcement.73 The justification was more than usually strident, 68 69 70

71 72 73

2001/29/EC of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society. S.I.2003/2498. They came into force on 31 October 2003. Powers of search and seizure, penalties, and liability to forfeiture had all been augmented even earlier in the Copyright and Trade Marks (Offences and Enforcement) Act 2002 (a lobbyist sponsored Private Member’s bill, supported by the government). Section 20 of the CDPA 1988 has been substantially broadened in scope, and redefined. COM 2003/46 of 30 January 2003 on measures and procedures to ensure the enforcement of intellectual property rights (since adopted: see supra n. 1). Thus recognising the paradox that uniformity of substantive law ensures differential application of that law so long as adjectival law diverges.

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suggesting infringement of intellectual property rights to be associated with the spread of terrorism.74 As ever the threatening statistics emanated from trade groups and lobbyists.75 While use of encryption to protect copyright works is emphasised, and criminalisation of evasive devices so justified, there is nothing to prevent the use of encryption beyond the limits of copyright. It follows that protection afforded by such criminalisation effectively extends to such works. Here too comparison with the Stationers’ Company is appropriate. Printing was applied not only to new, but to ancient works,76 and the whole thrust of the Stationers’ arguments in the seventeenth century was to preserve its monopoly on printing and publishing both ancient and new works. This legislation has provided for the modern electronic publishing and entertainment industries a level of protection thought excessive for publishers of printed books nearly three centuries ago. It should be noted that some attempt has been made to mitigate the severity of such regulation by the provision of limited exceptions for such things as reverse engineering, encryption research and security testing. However the extremely limited extent of such exceptions highlighted the general absence of any broad exception similar to that of ‘fair use’ of copyright works.77

B. Value Criminal offences constitute a sub-set of civil infringements, since in order for there to be criminal liability, there must first be civil. In order to justify the imposition of such liability the advantages of so doing must outweigh the disadvantages. It may thus be useful to consider possible advantages and counter-arguments, and then possible disadvantages. 74

75

76 77

Even this did not approach the claim of the sponsors of the 2002 Copyright and Trade Marks legislation that infringement could result in the death of children, (2001) H.C. Vol. 364, col. 580. Delicately described in COM 172/88 Green paper of 7 June on Copyright and the Challenge of Technology – Copyright Issues Requiring Immediate Action para. 2.2.1 as ‘informed estimates rather than rigorously controlled data’; and in connection with the high estimate of the impact upon employment admitting here in para. 2 C that precise measurement is difficult. It was this that so greatly excited Locke’s opposition to renewal of the Licensing Act, and the early drafts of the Copyright Act. For detailed criticism of the position in the United States see J. Litman, ‘The Public Domain’ (1990) 39 Emory LJ 965; Y. Benkler ‘Free as the Air to Common Use: First Amendment Constraints on Enclosure of the Public Domain’ (1999) 74 NYULR 354.

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1. Advantages It can be claimed that criminal liability is justified by the superiority of its pre-trial or trial procedures, and by the nature of the sanctions which criminal liability offers. At the pre-trial stage the principal difference between civil and criminal systems is that in civil initiative is essentially private, whereas the invocation of criminal law requires the active co-operation of public bodies and organisations, typically the police, government agencies,78 and the prosecution services.79 It is, of course, generally true that the public sector commands greater resources than private individuals. It is, however, also true that the demands upon public resources are greater, so it by no means follows that greater resources will be made available in any given case.80 Given conflicting demands on public resources the availability of civil remedies in every case is likely to operate as a disincentive to acceptance of the need to deploy them here. The initiative for public prosecution is also rarely spontaneous, but more often a response to prompting from the private party which regards itself as a victim of the relevant activity. In many cases the need to impel public bodies into a response may slow speedy reaction. In England, civil law has recognised the need for initial haste, to forestall the destruction of evidence and the dissemination of resources by providing ex parte access to the courts for the necessary orders.81 Apart from financial constraint, public authorities may be unwilling to become involved in what may well seem, and indeed be, a dispute about a particular arcane question of commercial or civil law. They are likely to resent and resist the invocation of criminal liability as a bargaining tool in any such dispute. At one time it might have been thought that an advantage of the use of criminal pre-trial process would be to secure access, through police powers of search and seizure, to material evidence, without the need to disclose material of one’s own which might be of use to the suspected infringer. Yet, as noted above, the civil courts developed their own at least equally effective procedures for search, and recent legislation has 78 80

81

79 Such as the Serious Fraud Office. Such as the Crown Prosecution Service. It is widely believed that the collapse of a number of very large-scale anti-trust cases in the United States was assisted by the disparity between the lesser resources made available by the Federal government than those willing to be expended by the large private firms under investigation. Once known as Anton Piller orders and Mareva injunctions, thus indicating their essentially common law creation, an exercise more acceptable in civil than criminal proceedings.

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somewhat evened the field so far as pre-trial disclosure of evidence is concerned.82 At trial it is far from obvious that procedure favours the criminal prosecutor over the civil claimant. The principal difference for claimants is that in criminal proceedings the case must be proved beyond reasonable doubt, while in civil it is necessary to prove it only on the balance of probabilities. It also remains the case that more evidence is available in civil proceedings than in criminal. Hearsay is now freely admitted in civil proceedings,83 but even after the latest reform in Part 11 Chapter Two of the Criminal Justice Act 2003, much less in criminal. Where trial by jury is available in criminal proceedings there may also be perceived to be a greater element of risk than in trial by judge alone in civil proceedings for infringement. There remains the difference in sanctions. Imprisonment is available as a sanction in some situations for criminal infringement, but not in civil proceedings.84 It may be thought that in this way the possibility of criminal proceedings increases deterrence of infringement. However, deterrent effect depends more upon the likelihood of detection of infringement, the likelihood of criminal proceedings being brought, and of the imposition of imprisonment as a sanction. It is not at all clear that these factors will not operate to dilute the deterrent effect of the availability of criminal sanctions to a significant extent.

2. Disadvantages It has been suggested above that many of the apparent advantages of the choice of criminal proceedings are likely to be illusory. It remains to consider positive disadvantages. It is suggested that the overlapping of civil and criminal liability may prejudice civil liability in two ways. First, the possibility of criminal proceedings may have an inhibiting effect on pre-trial civil process. In Rank Video the defendant succeeded because the information he was ordered to supply would infringe his privilege against self-incrimination.85 While it is true that this situation 82

83 84 85

Especially in the obligations to preserve and disclose material evidence imposed upon the prosecution by ss. 3, 4, and 7 of the Criminal Procedure and Investigations Act 1996 (as supplemented by the provisions of the Code of Practice under s. 23). Under the provisions of the Civil Evidence Act 1995. Except for contempt in case of wilful disregard of a court order. It is ironic that it failed to do so in relation to direct prosecution for infringement of copyright only because that remedy was at that time ineffective.

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has been the subject of remedial legislation, its interpretation must, since the Human Rights Act 1998, be construed compatibly with the European Convention of Human Rights, and the privilege is regarded by the European Court of Human Rights as a bastion of the protection of the accused, guaranteed by Article 6 of the Convention. More generally, the protection of the Convention is much more extensive in relation to criminal proceedings than to civil,86 thus again rendering the choice of criminal liability less eligible. Finally, while it is true that civil proceedings have an advantage in terms of speedy availability at the interim stage, it is less easy to predict which will have the advantage so far as a full trial is concerned. If criminal proceedings come on first and result in an acquittal that may in practice discourage civil proceedings, however little issue estoppel can be based on acquittals, or acquittal itself constitute evidence in subsequent civil proceedings. 86

For example in condemning reverse onus provisions.

20 Towards new forms of neighbouring rights within the European Union? pascal kamina ∗

Over the last 15 years the process of European harmonisation of copyright and related rights resulted in the introduction of new forms of protection, subject-matter or rights within the legislation of EC Member States, thus expanding the scope of intellectual property to an unprecedented level. At the time of their harmonisation, most of these rights were already implemented in a number of Member States, and were simply extended to other jurisdictions in this process. This choice to harmonise upwards, to the highest existing standard, can be explained by the legitimate concern expressed by the European institutions not to deprive rights owners in certain Member States of part of their existing rights, otherwise protected under the Treaty.1 However, as a result most of these extensions and additions lack the careful practical and economic analysis associated with similar extensions of copyright over its long history. What took under traditional copyright law decades to implement, with long doctrinal and judicial debates, was regulated at the European level over ten years and, in some cases, with very little discussion. The extension of the term of copyright and related rights is typical of this attitude. As Professor Dworkin pointed out, ‘there has been remarkably little detailed examination of the policy considerations applicable to the determination of appropriate periods of protection either for copyright or for related rights’.2 Recital 5 of the Term Directive merely stated ∗ 1

2

Dr. Jur (France), LLM, PhD, Cantab; University of Poitiers, France. EC Treaty, Art. 295 (‘This Treaty shall in no way prejudice the rules in Member States governing the system of property ownership’). See also Art. II-17 of the draft European Constitution (‘Intellectual property shall be protected’). G. Dworkin, ‘The EC Directive on the Term of Protection of Copyright and Related Rights,’ in H. Cohen Jehoram, P. Keuchenius, Jacqueline Seignette (eds.), Audiovisual Media and Copyright in Europe (Kluwer, 1995), p. 27.

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that the term was no longer sufficient to cover two generations, which is simply wrong.3 In fact, the need for harmonisation of the term of copyright was felt following the decision of the ECJ in EMI v. Patricia,4 which involved differences in the duration of sound recording (neighbouring) rights in Germany and Denmark; and because it was more difficult to deprive German copyright owners of 20 valuable years of protection than to grant an additional protection to copyright industries, harmonisation was effected to the highest standard. As Professor Cornish points out, ‘loose assertions of the type indulged in by the Community, however, pass for adequate justification and that in itself is interesting’.5 This remark also applies to the introduction of new neighbouring or related rights. It is true that, at the time of their harmonisation in the EC Rental Directive, the main forms of related rights (on phonograms, broadcasts and performances), were not new to most Member States’ copyright and related rights legislation. And the fact that their protection had been widely discussed at the national and international levels justified a quick response by the Community authorities. In this process, however, very little attention was given to the rationale for protection of these rights, especially concerning minor forms of protection such as the protection of videograms or of unpublished works that had fallen into the public domain.6 These fell under the general rationale put forward for other entrepreneurial rights, i.e. the idea that risky and high investments in media required adequate protection, as exposed in one (only one!) recital of the Rental Directive:7 ‘Whereas (. . .) the investments required particularly for the production of phonograms and films are especially high and risky; whereas the possibility 3

4 5 6

7

Directive 93/98/EEC of 29 October 1993 harmonising the term of protection of copyright and certain related rights, OJ 1993 L 290/9. With an average lifespan of 70 years, a 50 years p.m.a. duration covers two generations. Even if one author has his or her child late, for example at the age of 40 and dies at the age of 70, the child will be 80 at the end of the 50 years period. See also W. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (4th ed., 1999) at para. 9–55. Case 341/87 EMI Electrola GmbH v. Patricia Im- und Export Vmbh [1989] ECR 79. Cornish, supra n. 3, at para. 9–55. For our purpose we will set aside performers’ rights, which share very little in common with the other, entrepreneurial, neighbouring rights, and which had little influence on the definition of the other neighbouring rights. Directive 92/100/EEC of 19 November 1992 on rental right and lending right and on certain rights related to copyright in the field of intellectual property, OJ 1992 L 346/61, Recital 7.

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pascal kamina for (. . .) recouping that investment can only effectively be guaranteed through adequate legal protection of the rightholders concerned;’

This justification was long adopted in relation to phonograms,8 and to most copyright lawyers this form of protection offers a perfect analogy to assess the demands for new neighbouring rights formulated by other industries.9 The problem is that this approach is overly simplistic. The history of the protection of phonograms and comparative law teach that there exist at least three additional justifications for granting a right to phonogram producers. The first one is the proximity with traditional copyright, and more precisely the theoretical possibility of likening certain (musical) sound recordings to original works of authorship.10 The creation of a commercial phonogram is not the mere result of a technical operation (‘pushing a button’), but also reflects the work of the sound engineer (or ‘sound designer’), which is particularly complex, and has a certain creative aspect.11 The second justification, closely associated to the first, is the existence of specific investment in the production of an individual phonogram, distinct from the investment in the underlying work. The third justification is practical. Since record producers are usually mere licensees of the recorded work, they do not have, in most legal systems, standing to sue for copyright infringement. Thus, separate protection may be justified by the practical need to grant to sound recording producers a strong title to protect their investments through infringement actions. Of course, the actual protection granted to phonogram producers generally goes further and covers non-original recordings, as well as recordings involving no specific work or investments, e.g., personal recordings. But the great majority of commercial phonograms fit the rationale described. 8

9

10 11

The oldest form of neighbouring right, first implemented in the UK in the Copyright Act 1911. This also constitutes the main justification for the neighbouring right of broadcasting organisations, as revealed in the various drafts leading to the Rome Convention and in preparatory works leading to the Rental Directive. Consider, for example, the rationale advanced in the UK by the Report of the Gregory Committee for the introduction of a right in broadcasts in the Copyright Act 1956 (UK): ‘the position of the BBC, as we see it, is not, in principle, very different from that of a gramophone company or a film company. It assembles its own programmes and transmits them at considerable cost and skill. When using copyright material it pays the copyright owner and it seems to us nothing more than natural justice that it should be given the power to control any subsequent copying of these programmes by any means.’ (Cmnd. 8662 (1952) at p. 117). As is the case under US copyright law. In this respect, it should be recalled that some early decisions in Continental Europe have accepted the possibility of protecting certain phonograms as original works of authorship.

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It is submitted that by reducing the rationale for entrepreneurial or neighbouring rights to a mere ‘sweat of the brow’ approach, loosely defined, Member States and Community authorities have somehow disrupted the delicate balance established in the field of intellectual property within copyright, and between copyright and industrial property. Clearly, from the Rental Directive, disparities resulting from differences in Member States’ legislation and their internal market relevance have sufficed, and indeed will suffice, to justify the introduction of new neighbouring rights in all Member States. The dangers associated with the introduction of new monopolies are sometimes limited by the creation of well designed exceptions, as in the case of the specific related right for producers of databases. But overall there is a cruel lack of discussion on the principle of introduction of rights which mostly have a scope and economic impact potentially like that of copyright.12 This lack even resulted in the introduction of new neighbouring rights of sometimes questionable practical utility. A perfect example is the neighbouring right of videogram producers.13 This right was introduced in several Member States and in the EC Rental Directive not as a substitute for the protection of underlying audiovisual works but as an additional right on the audiovisual recording granted to the film producer, on the model of the right on phonograms granted to phonogram producers.14 The problem is that, in contrast with sound recording producers, in most cases film producers obtain the copyright in the audiovisual and contributory works embodied in the recording, and thus do not need another copyright title to protect their investments through infringement actions. In addition, the work involved in the recording of an audiovisual work is difficult to separate from the work involved in the creation of the audiovisual work itself. In relation to the included audiovisual work (if any) the videogram is nothing but a copy. It can thus be questioned whether such double copyright protection is needed to encourage film producers 12 13 14

The specific protection for previously unpublished works that have fallen into the public domain, introduced by the Term Directive (Art. 4), supra n. 3, is one of these. The ‘rights of producers of first fixations of films’ under the EC Copyright Directives. The idea of a right in audiovisual recordings or television broadcasts was proposed relatively late. The UK 1956 Act was the first Copyright Act to implement this idea and introduced inter alia entrepreneurial copyrights in cinematograph films, but these rights replaced the protection of the underlying work by a classical copyright. In Germany, the Copyright Act 1965 introduced neighbouring rights in film recordings in favour of the film producer. The German example was followed by several Member States during the copyright reforms of the 1980s, and notably in France by the Copyright Amendment Act of 1985.

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to produce films (at least until this rights generate a distinct flow of fees from the exploitation of film works, probably through dedicated collecting societies). This example shows that the introduction of new neighbouring rights in the process of harmonisation is not subject to a very strict assessment of rationale. Therefore, it might be useful to have a quick look at specific forms of neighbouring rights existing in certain countries to see what form future harmonisation in this field could take. It is possible to identify three major areas for reform: the introduction of a neighbouring right for organisers of cultural or sporting events; the introduction of a broadly defined neighbouring right in all recordings; and the extension of the scope of the neighbouring right of broadcasting organisations to other types of broadcasters or transmitters.

A. A neighbouring right for organisers of cultural or sporting events? Cultural or sporting events are nowadays a very valuable form of property. Live cultural events may, in some jurisdictions, attract copyright protection as original works of authorship. But some Member States have introduced specific neighbouring rights protection for the producer of such events. For example, in Germany, ‘organisers of performances’ are granted a specific neighbouring right under Article 81 of the Copyright Act of 1965. This Article provides that if a performance is organised by an enterprise, the consent of its owner in addition to the consent of the performer shall be required for its communication to the public by screen or loudspeaker, for its fixation, its reproduction and for the broadcasting of a performance. This right lasts for 25 years from performance or from publication of the recording of the performance, as the case may be.15 In France, Law No. 92–652 of 13 July 1992 amending a Law of 16 July 1984 on the organisation and promotion of sporting activities, enshrined the exclusive rights for the organiser of a sporting event or competition.16 15 16

1965 Act, Art. 82 The new Article 18-1 of the Law of 16 July 1984 provides: ‘The right of exploitation of a sporting event or competition belongs to the organiser of this event, as defined under Articles 17 and 18’ (‘Le droit d’exploitation d’une manifestation ou d’une comp´etition sportive appartient a` l’organisateur de cet e´ v`enement, tel qu’il est d´efini aux articles 17 et 18’). Article 18-2 further provides that ‘the assignment of the right of exploitation of a sporting event or competition to a broadcaster cannot prevent the information of the public by the other broadcasters’ (‘La cession du droit d’exploitation d’une manifestation ou d’une comp´etition sportive a` un service de communication audiovisuelle ne peut faire

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What is remarkable about this text is that there is no time limit for this protection, and very little description of its regime. Although the legislation does not create, technically speaking, a neighbouring right, this form of protection is very close to intellectual property, and may well have similar economic consequences. This is, as one author stated, proto-intellectual property, or rather, a proto-neighbouring right. What is the rationale for such protection? The reference to the protection of the specific investments of the producer is not very convincing here, especially since the investment to be protected here should be that of the sport teams or of the performing artists. In fact, the only justification seems to be to grant an ability to reinforce, through the allocation of a property or quasi-property right, contractual rights or exclusivities acquired by the organisers. This is close to the rationale underlying the protection of persons having exclusive contracts with performers, established in the UK and Ireland.17 This rationale may not be very strong, but should the internal market relevance of such rights appear in the future (e.g., by their adoption in other Member States) or should lobbyists take up the issue, these forms of protection may well provide a model for further harmonisation of neighbouring rights within the EU.

B. A general neighbouring right in respect of presentations or recordings of works? Another interesting evolving subject might be the extension of existing neighbouring rights over certain recording media (phonograms and videograms) to other forms of ‘recording’ in the broadest meaning (including ‘prints’).

17

obstacle a` l’information du public par les autres services de communication audiovisuelle’), and expands on this latter principle. In the UK, the Copyright, Designs and Patents Act 1988 (‘CDPA’) grants ‘recording rights’ in the performance to persons having an exclusive recording contract with the performer (recording means both film and sound recordings of the performance). Recording rights are in principle not assignable or transmissible (s.192B), but the recording contract can be assigned, and the assignee, if he is a qualifying person, is entitled to the recording rights (s.185(2)(b)). This protection grants to the owner of the recording rights the right to withhold consent for recording a performance by a performer with whom there is an exclusive contract, using recordings made without consent, importing, possessing or dealing in such recordings. The duration of protection follows that for performances. The Irish Copyright and Related Rights Act 2000 established similar protection (Chapter 3, ss. 215 and seq). To the best of my knowledge, such rights do not exist outside these countries.

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The neighbouring right in respect of the typographical arrangement of a published edition of a literary, dramatic or musical work, enacted in the UK,18 offers a perfect example of such a right. One might also mention the specific neighbouring rights existing in some jurisdictions in respect of non-original photographs.19 One could even imagine the creation of a single neighbouring right covering all recordings or fixations of works. An embryo of such right may be constituted through the extension of the scope of the neighbouring right in videograms. Although this right is harmonised within the EU, its definition varies among member states, and may in some cases cover the recording of videogames or multimedia works. Therefore, it could be said that in practice several countries have already extended the scope of neighbouring rights so as to cover recordings of works other than audiovisual or phonographic recordings. This may well serve as a model for a new general neighbouring right on recordings. Given the very loose rationale for existing neighbouring rights in this field (especially videograms), one cannot see what could prevent the introduction of such a new ‘synthetic’ right covering all sorts of recordings, including page layouts and photographs. The development of the concept of the public domain will certainly create industry demand for such additional forms of protection.

C. A general neighbouring right in respect of transmissions of works? Another development could be the extension of the protection offered to broadcasters in the audiovisual fields to other forms of ‘broadcasters’ (transmitters), for example on digital networks. This extension is partly realised in some Member States by the broad language adopted to define the neighbouring right of broadcasters, which may encompass web sites and even certain transmissions by telecommunications operators, under protection initially tailored for broadcasters. For example, in the UK, the applicability of the definition of cable programmes and cable programme services to Internet services such as web sites, as suggested by legal authors,20 was confirmed in at least one case.21 18 20 21

19 CDPA, s. 8(1). As in Italy. See H. Laddie, P. Prescott, M. Vitoria, The Modern Law of Copyright (Butterworths, 1995) at para. 7.18. Shetland Times v. Wills [1997] FSR 604 (Scot).

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In this respect it should be pointed out that under the EC Copyright Directives, the term ‘broadcast’ has a broad meaning covering broadcasts transmitted by wire or over the air, and that the protection of broadcasts is not linked to any type of programme or content. Accordingly, a broadcast need not necessarily comprise a television programme or the transmission of a copyright work or performance, and protection could well extend to transmissions over digital networks or to interactive services. This seems to be confirmed by the EC Directive on copyright and related rights in the information society of 22 May 2001, which clearly encompasses such services in its definition of ‘communication to the public’.22 Accordingly, the related right in respect of broadcasts may become a general neighbouring right on transmissions of works and possibly even on transmissions tout court. These events are only examples of possible major developments in the protection of neighbouring rights within the European Union. But there exist other possibilities for evolution and harmonisation in more limited areas. A major one, at the intersection of copyright and trade marks, concerns rights in respect of titles of works.23 But there are other perhaps more remote areas for harmonisation, waiting only for consecration at the national level. One could take as an example the protection of television 22

23

See Directive 2001/29/EC, Recital 25: ‘It should be made clear that all rightholders recognised by this Directive should have an exclusive right to make available to the public copyright works or any other subject-matter by way of interactive on-demand transmissions. Such interactive on-demand transmissions are characterised by the fact that members of the public may access them from a place and at a time individually chosen by them.’ The extent to which copyright protection is afforded to titles of copyright works varies among Member States. Some laws, however, provide for the additional protection of a title, even when it is not original, under a system close to trade mark protection. Hence, Art. L.112-4 of the French Intellectual Property Code provides that the title of a work is protected as the work itself if it is original. The same Article provides for residual protection akin to unfair competition: the title of a work may not be used, even if the work is no longer protected, to distinguish a work of the same kind if such use is likely to create confusion. Protection under specific provisions akin to trade mark is implemented in other countries as well. In Sweden, for example, titles are protected by copyright but under a specific provision which borrows from unfair competition. Article 50 of the Swedish Copyright Act provides that a literary or artistic work may not be made available to the public under a title which may be easily confused with a previously published work. In Germany, titles of works are protected as ‘commercial designations’ under ss. 5 and 15 of the Trade mark Act of 1994. And in Italy, titles of copyright works are not protected under copyright, but under a specific neighbouring right (Arts. 100–102 of the Copyright Act of 1941, as amended).

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formats,24 or the protection of works of folklore, scientific works or recipes. When the time comes, it is to be hoped that the rationale for such types of protection will be carefully discussed before any extension occurs through harmonisation. The risk of disparate protection may sometimes be preferable to the implementation of community-wide monopolies with adverse effects on the creation and distribution of works. 24

In 1994 the UK Department of Trade and Industry announced that it was considering whether copyright protection should be extended to programme formats and issued consultation papers on the subject. The document did not propose the introduction of a new sui generis right, but instead proposed to extend the definition of ‘copying’ so as to include borrowings of ‘format’ elements. It was not followed by any legislative action. A sui generis protection akin to copyright was also proposed in an amendment introduced by the House of Lords during the passing of the Broadcasting Bill 1990. It is not impossible that, under industry pressure, one or more Member States may initiate legal action in this field.

INDEX

Abelson, Philip, 125 Aberdeen, 65 advocates, England and Germany, 52–54 African Regional Patent Orgnization (ARIPO), 8 AgrEvo, 125, 126 Alexander, Wendy, 62 alternative dispute resolution, 55 Andean Group, 133 Andean Pact, 8 appeals, from Community Patent Court, 88 appendices, Archer Daniels Midland, 126 Argentina, 125, 133 ASEAN, 8 Asia, breach of IP rights, 218 audience rights, 88 Australia, 88, 110, 144, 251, 252 Bayer CropScience, 126, 134 Benelux, trade marks, 160, 161, 166 Berne Convention broadcasting, 228, 235, 239, 241 constitutive/declarative debate, 229–233 current events exception, 228 and developing countries, 228 express provisions of later text, 225–226 history, 217–220 interpretation, 219, 220–229 landmark, 4 and making available right, 235 members, 219 minor exceptions doctrine, 16, 228

newspaper articles, 228 non-members, 218 object and purpose, 221–224, 227–229 preamble, 227 provisions of earlier text, 227–229 public communication, 234, 235, 239–241, 243–245 public order exception, 228 public performances, 15, 240 revision conferences, 16, 217, 227 transmissions, 239–240 and TRIPS, 218–219 and UK copyright law, 200 bibliographies, biological material, 132 bio-piracy, 9 biotechnology Biotech Patenting Directive, 155 EU law, 25, 36, 151 and food industry, 127–130 patent claims, 103, 104–105 patentability, 133 Scotland, 63 and TRIPS, 124 Bogsch, Arpad, 231 bootlegging, 266 Brazil, 125, 127 broadcasting Berne Convention, 228, 235, 239, 241 copyright, 224 meaning, 287 neighbouring rights, 282 television formats, 287 Brown, Janet, 65–66 Burns, Robert, 59

299

300

index

cable programmes, 286 Calgene, 125, 128 Campbell. Gordon, 65–66 Canada genomics, 125 indirect patent infringement, 110 plant breeders’ rights, 144 private copying, 251, 252, 253, 254–255 US-Canada patent dispute, 13–14 charts, China, 92, 125, 126, 218, 219 circumvention of technological measures, 274 civil law systems and common law systems, 91–92 Continental Europe, 49, 51–52, 56–57 judgment styles, 56–57 patents, 103 unfair competition, 183–184 command economies, 92 common law systems and civil law systems, 91–92 patents, 103 statutory licence and levy schemes, 248–250 unfair competition, 177–183, 190 communication to public. See making available to public communication to public, Berne Convention, 234, 235, 239–241, 243–245 Community Patent Convention, 84–90, 109, 120–121 Community Patent Court, 86–88 comparative law civil and common law systems, 91–92 costs of trials, 54–56 English and German litigation, 48–57 EU/ US trademark dilution, 159–174 judgment styles, 56–57 patent claims, 98–108 pre-trial procedures, 51–52

private copying, 248–255 role of advocates and judges, 52–54 competition, unfair civil law systems, 183–184 common law systems, 177–183 European Union, 26–27, 176–188 genomics, 135 and patents, 92, 112, 118 Poland, 189–201 and trademark dilution, 170–173 and TRIPS, 185 unfair competition, meaning, 177–179 unjust enrichment, 184–186 computer programs, 21, 43, 197, 229–233 confidential information, and patents, 202–213 confidentiality agreements, 204–213 Convention on Biological Diversity (CBD), 8 copyright authors’ rights, 249 Berne Convention. See Berne Convention broadcasting, 224 Copyright Act 1710, 270 Copyright Act 1988, 273–274 criminal liability. See criminal liability and cultural strategies, 71 current events exception, 228 defining infringement, 96 digital fences, 74 English history, 268–276 EU law, 21–22, 37 exclusive reproduction rights, 224 fair dealing, 74 minor exceptions, 15–17 musical compositions, 271–272 newspaper articles, 228 owners’ rights, 250 Poland, 199 private copying. See private copying public order exception, 228 Scotland, 71 supplementary works, 261–262

index term, 35, 270–271, 280–281 termination of transfers, 260–262 three-step test, 223, 226 translations, 228 UK law, 198, 199 US-EU copyright dispute, 14–17 waiver and consent, 224 WIPO Copyright Treaty, 219 works for hire, 261–262 copyright contracts failure to perform, 263 paternalism, 263 unexpressed rights, 264–265 United States, 260–265 US 1976 Act, 260–262 Cornish, William, 48, 58, 72, 98, 99, 137–138, 159, 170, 175–176, 186, 189–190, 198, 217, 259–260, 281 counterfeiting, 266, 267 criminal liability advantages, 276–278 disadvantages, 278–279 European Union, 275–276 exceptions, 276 imprisonment, 278 indirect criminalization, 274 IP infringement, 279 IP infringement and theft, 266–267 UK history, 267–276 value, 276 Cuba, 17, 136 cultural events, 284 customary international law, 5–6, 220 databases, 74, 186–187 Dearing Report, 64 Denning, Lord, 57 designs and cultural strategies, 71 EU law, 20, 22, 23, 25–26, 34 unregistered community designs, 38 developing countries, 9, 228 Diageo, 69 Dickens, Charles, 53 dictionaries, and judicial interpretation, 105–107 Doha Declaration on Public Health, 9 domain names, registration, 5

301

Dow Chemical, 125, 126, 134 Droz, Numa, 228–229 due process, TRIPS, 7 Dundee, 65 DuPont, 125, 126, 128, 134 Dworkin, Gerald, 280 East Midlands, 61 editorial notes, 262 Egypt, 133, 136 electronic communication, EPC, 88 encryption, 268, 274 circumvention, 274–276 England. See also Scotland; United Kingdom case framing, 49–51 case management conferences, 52 comparative law, 47–49 costs of trials, 54–56 judgment styles, 56–57 pre-trial procedures, 51–52 role of advocates and judges, 52–54 technical experts, 87 weaknesses of litigation system, 52 Woolf reforms, 55, 82 environment, and patents, 131 estoppel, 102–103 Eurasian Patent Office, 8 European Patent Convention plant varieties, 137, 138, 150, 153 scope, 151 European Patent Organization (EPO), 8, 21, 32 European patents claim requirements, 97, 101 Community Patent Convention, 84–90, 109, 120–121 Community Patent Court, 86–88 enforcement, 88–89 European Patent Convention, 33, 84, 92, 99 European Patent Court, 81–83 European Patent Office, 80–81 indirect infringement, 109, 120–122 languages, 89–90 law, 20, 21, 22, 23, 30, 32, 34 legal history, 79–90 Strasbourg Convention, 83–84

302

index

European Union centralisation of litigation, 32–33 competition law, 26–27 constitutional treaties, 8 copyright law, 21–22, 37 criminalization of IP infringement, 275–276 databases, 186–187 and genomics, 127, 130, 135 harmonization of competition laws, 176–188 harmonization of IP law, 22–27, 34–37, 280–284 imposition of IP policies, 33–45 Information Society Directive, 287 IP law, 20–22 neighbouring rights, 281–288 patents. See European patents plant varieties, 20, 22, 138, 139–149, 151–153 pre-emptive unification of IP law, 38–39 private copying, 254 Rental Directive, 281–282, 283 satellite communications, 236 trade mark dilution, 160–162 trade mark reputation, 166–169, 172 transaction costs, 30–33 unification of IP law, 22–33 US-EU copyright dispute, 14–17 US-EU omnibus appropriations dispute, 17–19 fair dealing, 74 fairness and equity, TRIPS, 7 FAO, 8 film rights, 283 Fischer, Joschka, 127 food industry, 127–130 forum shopping, 32, 84 France, 183, 190, 259, 284–285, 287 freedom of contract, 212 freedom of occupation, 111–112 Gaelic language, 71 GATT, 11, 12–13, 218

genetic resources, 8, 132–133 genomics and food industry, 127–130 generally, 124–136 GMOs, 9, 127, 130 impact, 125–127 outlook, 134–136 patents, 131–134 geographical indications, 22–23, 69, 185 Germany comparative law, 50–51 copyright, 259 costs of trials, 54–56 indirect infringement of patents, 117 IP enforcement, 81–82 judgment styles, 56–57 patents, 97, 98–99 performance organizers, 284 pre-trial procedures, 51–52 private copying, 251–252, 253–254, 255 role of advocates and judges, 52–54 trade mark dilution, 160, 161 unfair competition, 183, 190, 191 weaknesses in legal system, 48 get-up, 196 Glasgow, 65 goodwill, 179–180, 209 Gregory Committee, 282 Hartwieg, Oskar, 47–57 hearsay evidence, 278 Hitler, Adolf, 49 HIV/ AIDS, 10 human rights, 8–10, 278 illustrations, 262 imprisonment, 278 indexes, 262 India, 11–13, 17–19, 127 indigenous communities, 9, 10, 133 Indonesia, 219 industrial property, 17, 18, 30–33, 146–149, 199–200 Information Society Directive, 287 injurious falsehood, 178

index

303

intellectual property rights. See also specific rights criminal liability. See criminal liability defining scope of rights, 96–97 parallel intellectual property rights, 197–201 trends, 177 International Court of Justice, 4, 6 International Covenant on Civil and Political Rights (ICCPR), 8 International Covenant on Economic, Social and Cultural Rights (ICESCR), 8, 9 international law, 3–4, 7, 18 international organizations, 7–10 International Telecommunications Union, 8 international treaties, 4–5, 10–19 Internet, 5 Ireland, 47, 285 Israel 1998 patent law amendment, 114–116 constitutional principles, 111–112, 117 indirect infringement of patents, 109–123 judge-made law, 118–119 old definition of patent infringement, 111–112 problems of judge-made law, 121–122 Rav-Bariah case, 116–119, 122 Regba case, 113–114, 115, 117 unjust enrichment, 184–186

languages, European patents, 89–90 League of Nations, 4 legal costs, England and Germany, 54–56 legal writings, 6 legitimate expectations, 12–13 lex specialis derogat legi generali, 14 literary and artistic works, 230–231 Locke, John, 269, 276 Luxembourg, 87

Japan, 100, 128 Jones, E. T., 145 judges, English and German litigation, 52–54 judgments, comparative law, 56–57

NAFTA, 8 National Academies Policy Advisory Group (NAPAG), 72, 73, 74 neighbouring rights cultural and sporting events, 284 EU approach, 283 EU introduction, 281–282 phonograms, 281–282, 285 presentation of works, 285–286 transmission of works, 286 videograms, 281, 283–284, 285, 286

Korea, and Berne Convention, 219 K¨otz, H., 47 Laddie, Hugh, 88 Lambert Review, 66–67, 73

making available to public meaning of public, 236–237, 244 scenarios, 237–239, 241–244, 245–246 scope, 235–246, 247 WCT, 234–235, 236–237, 238–239, 241–243, 245–246 maps, 262 Max Planck, 38 McConnell, Jack, 70 Meltz, D. M., 208 MERCOSUR, 8 micro-organisms, patentability, 132 misappropriation, 178–179, 181–183, 185–187, 189–201 misrepresentation, 192 Monsanto, 125, 126, 128, 134 moral rights, 224, 226, 248, 249 morality exceptions, 131 Moskin, Jonathan, 173 municipal law, and international law, 18 musical arrangements, 262 musical compositions, 271–272 Mycogene, 125

304

index

Nestl´e, 126 newspaper articles, 228 non-retroactivity principle, 13–14 North East, 61 Northern Ireland, 58, 61 Novartis, 125, 126 OHIM, 8 Olympic symbol, 6 pacta sunt servanda, 6 Paris Convention 1883, 4, 5–6, 147, 168–169, 177–178, 181, 186 passing off meaning, 177–180, 190 Poland, 190–201 reverse passing off, 180 tort, 178 United States, 187 whisky, 69 patent infringement indirect infringement in Israel, 109–123 Israeli definition, 111–112 joint tortfeasance, 110, 116–117 unjust enrichment, 110 Patent Office statistics, 60–62 patents AIDS drugs, 10 claim requirements, 96–98 common and civil law systems, 98–108 Community Patent Convention, 84–90, 109, 120–121 Community Patent Court, 86–88 and competition, 92, 112, 118 and confidential information, 202–213 confidentiality agreements, 204–207 double patenting, 198 equivalents, 102–103 EU. See European patents excluded categories of inventions, 131–132, 133 food industry, 128 and freedom of occupation, 111–112 and genomics, 131–134

importance, 68–69 infringement. See patent infringement inventiveness, 92–95 mailbox mechanism, 11–12 monopolies, 92 and plant varieties, 147–149 Strasbourg Convention, 83–84 time limits, 13, 74, 83 TRIPS obligations, 131–134 US claims, 100–107 US-Canada patent dispute, 13–14 US-India pharmaceutical patents, 11–13 performers’ rights, 14–17, 71, 240 Permanent Court of International Justice, 4 pharmaceutical products, 11–13, 17–19, 27, 92, 124 phonograms, 281–282, 285 Pioneer Hi-Bred, 125 pirating, 266, 267, 271 Plaisant, Marcel, 228 plant varieties breeders’ right or variety right, 144–146 definition, 140–141 developing countries, 9 dual protection prohibition, 150–153 EU law, 20, 22, 138, 139–149, 151–153 exclusion from protection, 137–139, 142–143 farm saved seeds, 142–143 genomics, 125 industrial property right, 146–149 and patents, 147–149 plant breeders, 153–155 post-1991 evolution of rights, 139–149 private breeding institutions, 146 rights as impediments, 149–155 TRIPS, 132, 134, 136, 149 UPOV. See UPOV Poland copyright law, 199 Europe Agreement, 190

index industrial property law, 199–200 Law on Combating Unfair Competition, 191–200 misappropriation, 189–201 parallel intellectual property rights, 199–201 Poland-US Agreement on Economic Cooperation, 191 unfair competition case law, 193–197 precedents, international law, 6 principles of international law, 7 printing regulation, history, 268–276 private copying default positions, 250–252 European Union, 254 fair use, 255–256 Germany, 251–252, 253–254, 255 middle positions, 252 research exception, 252 statutory licence and levy schemes, 248–255 United States, 255–257 proportionality, 7, 41, 111, 112, 175 public communication, Berne Convention, 234, 235, 239–241, 243–245 public interest, 212, 228 public order exceptions, 131, 228 public performances, 14–17, 240 publishing, regulation history, 268–276 Reformation, 268 related rights. See neighbouring rights Rental Directive, 281–282, 283 research exception, 252, 276 restitution, 110 restraint of trade, 206, 207–213 retroactivity, 224 Ringer, Barbara, 260, 261, 262 Roman law, 51 Royal Society reports, 72, 73, 74 Russia, 219 Samuelson, P., 197 satellite communications, 236 Schechter, 161

305

Scotland. See also United Kingdom economic performance, 60, 62–63 enforcement of IP rights, 74–75 Gaelic language, 71 and intellectual property, 59–76 intermediary technology institutes, 65–66 legal system, 58 National Cultural Strategy, 70–72 National Intellectual Assets Centre, 67 National Theatre, 71 Parliament, 59 Patent Office statistics, 60 patenting rate, 62 Scottish Cultural Portal, 72 universities, 63–66 whisky industry, 69 self-incrimination, 278 separation of powers, 117, 118–119 sources of international law, 4–7 South Africa, genomics, 126, 134 South America, 218 Soviet Union, 92, 218 sporting events, 284 Stapleton, George, 145 Star Chamber, 269 Stationers’ Company, 268–269, 270, 275, 276 statutory licence and levy schemes Canada, 254–255 default positions, 250–252 generally, 248–255 Germany, 253–254, 255 middle positions, 252 paradox, 249–250 Strasbourg Convention, 83–84 subsidiarity, 41 Sweden, 287 Syngenta, 126, 134 tables, 262 television formats, 186, 287 terrorism, 276 test material, th´eatrophone, 241 theft, IP infringement, 266–267 three-step test, 223, 226

306

index

trade mark dilution claims against competitors, 170–173 concept, 159, 160–162, 175, 180 EU/ US law, 159–174 fame in US, 169 need for anti-dilution laws, 164–166 niche reputation, 166–169 reputation in EU, 166–169, 172 trade marks confusion, 164–166, 170–171, 180 and cultural strategies, 71 defining infringement, 96 dilution. See trade mark dilution EU law, 20, 22, 23–25, 29, 31, 34 likelihood of association, 165 purpose, 92 significance of numbers, 68 whisky, 69 trade names, US-EU dispute, 17–19 trade secrets, and patents, 202–213 transaction costs, EU IP law, 30–33 transfer of technoloogy, 9, 63 translation rights, 228 transmissions Berne Convention, 239–240 compulsory licensing, 247 neighbouring rights, 286 WIPO treaties, 246 treaties, 4–5, 10–19 trial costs, 54–56 TRIPS and Berne Convention, 218–219, 221–229, 233 dispute settlement, 6 generally, 3 and Israeli patent law, 115–116 jurisprudence, 11–13 patents, 115, 131–134 plant varieties, 132, 134, 136, 149 principles, 7, 223 role, 175 source of law, 5 and unfair competition, 185 UNCTAD, 8 UNDP, 8 UNEP, 8 UNESCO, 8

UNIDO, 8 United Kingdom. See also England; Scotland; Wales Copyright Act 1988, 273–274 copyright law, 198, 199, 282 indirect infringement of patents, 109, 117, 118, 119, 121–122 misappropriation, 186 neighbouring rights, 285, 286, 288 patent claims, 98–100 patent infringement, 110, 116 private copying, 251, 252 publishing regulation history, 268–276 United Nations, 9 United States anti-trust cases, 277 and Berne Convention, 218, 219 circumvention of technological measures, 274 Constitution, 198 contributory infringement of patents, 113, 117, 118, 119–122 Copyright Act 1976, 14, 260–262 copyright contracts, 260, 265 copyright interpretation, 262–265 criminalization of IP infringement, 274, 275 genomics, 125, 127, 136 and international IP breaches, 218 jury trials, 100 misappropriation, 182–183 parallel IP rights, 198 and Paris Convention, 5 patent claims, 100–107 plant variety rights, 152 Poland-US Agreement on Economic Cooperation, 191 private copying, 255–257 public performances, 14–17 supplementary works, 261–262 termination of copyright transfers, 260–262 trademark dilution, 164, 168 trademark fame, 169 unfair competition, 183, 186–187, 193

index unregistered trade marks, 169 US-Canada patent dispute, 13–14 US-EU copyright dispute, 14–17 US-EU omnibus appropriations dispute, 17–19 US-India pharmaceutical patents, 11–13, 18 and Vienna Convention, 5 works for hire, 261–262 Universal Copyright Convention, 4 Universal Declaration of Human Rights, 9 universities, 63–67, 68 unjust enrichment, 110, 184–186 unpublished works, 281 UPOV, 8 1978 Act, 139–142 1991 Act, 140, 141–143, 150 dual protection prohibition, 138, 150–151, 153, 155–156 revisions, 138, 139–149 Venice, 268 videograms, 281, 283–284, 285, 286 Vienna Convention on Law of Treaties context, 10 general rules of interpretation, 18 good faith, 10, 11, 12, 16, 221 non-retroactivity principle, 13

307 object and purpose, 221–224, 227–229 role, 5 special meanings, 10 supplementary means of interpretation, 10

Wales, 61 whisky industry, 69 Whitford Committee, 272 WHO, 8 William Grant & Sons, 69 WIPO, 7, 175, 185–186 WIPO Copyright Treaty (WCT) Agreed Statement, 242–243 anti-circumvention measures, 274 and Berne Convention, 221–233 computer programs, 229–233 making available right, 234–235, 236–237, 238–239, 241–243, 245–246 purpose, 219 WIPO Performances and Phonograms Treaty, 234, 242–243 WTO, 6, 7 Yorkshire, 61 Zeneca, 126 Zweigert, Konrad, 47

WILLIAM R. CORNISH – CURRICULUM VITAE

BORN:

9 August 1937, South Australia

EDUCATION etc:

St. Peter’s College, Adelaide; Adelaide University (LL.B., 1960); Oxford University (B.C.L., 1962); LL.D. Cambridge 1997. Barrister of Gray’s Inn, 1963; QC hon. caus. 1997, attached to Chambers, 8 New Square, Lincoln’s Inn

ACADEMIC HONOUR:

Fellow of the British Academy, 1984

TEACHING POSTS: 1962–68 1969–70 1970–90 1990–2004

Assistant Lecturer and Lecturer, London School of Economics Reader in Law, Queen Mary College Professor of English Law, London School of Economics Professor of Law, University of Cambridge, Fellow of Magdalene College; since 1995, Herchel Smith Professor of Intellectual Property Law. Director, Centre for European Legal Studies of the Cambridge Law Faculty, 1991–1994

PRINCIPAL SUBJECTS TAUGHT Civil law: trusts, contract, restitution; Intellectual property: patents, trade marks, copyright and associated rights; Modern legal history OTHER ACADEMIC POSITIONS Visiting Lecturer, University of Adelaide Law School, 1969 Special Guest Lecturer, U.B.C. Law School, Vancouver, 1973

289

290

william r. cornish – curriculum vitae Visiting Researcher (by grant from the Thyssen-Stiftung), Max Planck-Institute: Intellectual Property, Competition, Taxation, Munich, 1979 Visiting Professor, Monash University Law School, 1987 Visiting Professor, Hong Kong University Law School, 1989 External Academic Member, Max Planck Institute: Intellectual Property, Competition and Taxation, 1989– National Academies Policy Action Group, Working Party on Intellectual Property (Chairman), 1993–94

JOURNALS: International Review of Industrial Property and Copyright, Member, Editorial Board, 1984–89; Editor, 1989– Modern Law Review: Editorial Committee Member 1965–; Secretary 1965–69; Case Note Editor 1970–78 Journal of Business Law: Section Editor, Patents, Trade Marks, Copyright, 1968–90 European Intellectual Property Review: Member, Editorial Board 1979– Tulane Civil Law Forum, Board of Contributing Editors 1991–

SOCIETIES, COMMITTEES, etc.: International Association for Teaching and Research in Intellectual Property, Executive Committee Member 1981–83; 1987–88 President Elect 1983–85, President 1985–87 British Literary and Artistic Copyright Association, Chairman 1981–85; Executive Committee Member 1986– Association Litt´eraire et Artistique Internationale, Member Executive Committee, 1981–, Vice President, 1990– Max Planck-Institute for Intellectual Property 1980–89; (Common Law) Institute of Intellectual Property, Member of Council, 1982–; Member of Board 1998– House of Lords Sub-Committee on EC Legislation: Special Adviser on Trade Marks, 1981–; Special Adviser on Patents, 1985–; as such principal draftsman of the House of Lords Select Committee on the European Communities’ Reports on Trade Marks (HL 21, 1982) and A European Community Patent (HL 17, 1986)

william r. cornish – curriculum vitae

291

European Parliament, Legal Affairs Committee, Independent Expert for Hearing on Directive on Copyright in Satellite and Cable Television, February, 1992. NAPAG Working Group on Intellectual Property, Chairman, 1993–94 WIPO Arbitration and Mediation Center, Geneva, Arbitrator and Panellist under the Uniform Domain Name Disputes Policy, 2000–

PUBLICATIONS BOOKS: The Jury (Allen Lane and Penguin Books, 1968, revised edition 1971) (with A. L. Diamond & others): Sutton & Shannon on Contracts (7th ed., Butterworths, 1970) Legal Aspects of Computer Programs for Education (National Development Programme in Computer-assisted Learning: Technical Report No. 12) (with F. Clark & others) Encyclopedia of United Kingdom and European Patent Law (Sweet & Maxwell, 1977, with twice-yearly Releases: 1992), Releases 31, 32 (with J. Hart & others) Crime and Law in 19th Century Britain (Irish Academic Press, 1978) (with M. Atchison and B. F. Livesey) Scholarly Publishers Guide: Legal Aspects (University of Leicester, 1979) Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights (Sweet & Maxwell, 1981; 2nd edition, 1989, with parallel publication in U.S. by Matthew Bender, 1991; 3rd edition, 1996; 4th edition, 1999; 5th edition, with D. Llewelyn, 2003 (Editor) Piracy and Counterfeiting of Intellectual Property and Copyright (CLIP, 1984) (Editor) Copyright in Free and Competitive Markets (ESC Publishing, 1986) Intellectual Property Casebooks: I. Patents and Confidential Information; II. Copyright and Industrial Designs; III. Trade Marks and Names (ESC Publishing, 1985–87) (with the late G. de N. Clark) Law and Society in England 1750–1950 (Sweet & Maxwell, 1989) Cases and Materials on Intellectual Property, 1990; 2nd edition, Sweet & Maxwell, 1996; 3rd edition, 1999; 4th edition, 2003 (Edited with R. Brownsword and M. Llewelyn) Law and Human Genetics: Regulating a Revolution (Hart Publishing, 1998) (Edited with R. Nolan, J. O’Sullivan and G. Virgo) Restitution: Past, Present and Future (Hart Publishing, 1998) (with M. Llewelyn and M. Adcock) Intellectual Property Rights (IPRs) and Genetics (Study for UK Department of Health), Cambridge Genetics Knowledge Park, 2003

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william r. cornish – curriculum vitae

Intellectual Property: Omnipresent, Distracting, Irrelevant? Clarendon Lectures in Law, 2002, University of Oxford (Oxford University Press, 2004)

MAIN ARTICLES: ‘Unfair Competition? A Progress Report’ (1972) 12 J.S.P.T.L. 126 ‘Cumulative Protection for Industrial Designs’ (1973) 8 U.B.C.L.R. 221 ‘Unfair Competition and Consumer Protection in England’ (1974) 5 I.I.C. 73 ‘Unlauterer Wettbewerb und Verbraucherschutz in England’ GRUR Int., Dec. 1973 (with A. P. Sealy) ‘Jurors and the Rules of Evidence’ [1973] Crim.L.R. 208 (with A. P. Sealy) ‘Jurors and their Verdicts’ (1973) 36 M.L.R. 496 ‘Protection of Confidential Information in English Law’ (1975) 6 IIC 43 ‘Der Geheimnisschutz im englischen Recht’ GRUR Int., Mar. 1975 ‘The European Patent Conventions’ [1976] JBL 112 ‘Employees’ Inventions’ in M. Vitoria (ed.), The Patents Act 1977 (Sweet & Maxwell, 1978) ‘Photocopying, Libraries and the Copyright Law of the United Kingdom’ (1976) 4 Int. J. Law Libs. 26 ‘Industrial Property’ in Annual Survey of Commonwealth Law, chapter each year from 1965 to 1977 ‘Nature et fonction juridique de la marque en droit britannique’ in Marque et Droit Economique (Union des Fabricants pour la Protection Internationale de la Propri´et´e Industrielle et Artistique, 1977) ‘Defects in Prosecuting – Professional Views in 1845’ in P. Glazebrook (ed.), Reshaping the Criminal Law (Stevens, 1978) 305 ‘Legal Control over Cartels and Monopolization 1880–1914: A Comparison’ in N. Horn and J. Kocka (eds.), Law and the Formation of Big Enterprises in the 19th and early 20th Centuries (Vandenhoeck & Ruprecht, 1979) ‘Copies in UK Copyright’ in J. H. Spoor, Copies in Copyright (Sitjhoff & Noordhoff, 1980) (with P. G. McGonigal) ‘Copyright and Anti-Trust aspects of Parallel Imports under Australian Law’ (1980) 11 IIC 731 ‘England’ in H. Coing (ed.), Handbuch der Quellen und Literatur der neueren Europ¨aischen Privatrechtsgeschichte, Band III. 2 (Beck Verlag, 1982), 2217 (with J. Phillips) ‘The Economic Function of Trade Marks: An Analysis with Special reference to Developing Countries’ (1982) 13 IIC 41 ‘The Passing-Off Action in English Common Law’, Industrial Property No. 5, 1982, and in French, Propri´et´e Industrielle, No. 5, 1982) ‘Protecting the Appearance of Products: A British Experiment’ (Revue de la F´ed´eration Internationale des Conseils en Propri´et´e Industrielle, No. 34, May 1983 (Speech to Edinburgh Congress of FICPI))

william r. cornish – curriculum vitae

293

‘Patents and Innovation in the Commonwealth’ (1983) 9 Adelaide L.R. 173 ‘Die wesentlichen Kriterien der Patentfahigkeit europaischer Erfindungen: Neuheit und erfinderische Tatigkeit’ (GRUR (Int.) No. 4, 1983) (Speech to First Colloquium of Judges from European Patent Convention countries specialising in patent matters) ‘Copyright Reform in Great Britain’ Nordiskt Immateriellt R¨attsskydd, 1983 (Speech to Swedish Copyright Society) ‘Unfair Competition in Case-law and Statute’ (1985) 10 Adelaide L.R. 220 ‘Cable Television and Copyright: the U.K. Position’ in Cohen Jehoram (ed.) Cable Television: Media and Copyright Law Aspects (Kluwer, 1983) ‘Patents and Innovation in the Commonwealth’ in L¨ucke (ed.) The Adelaide Law School Centenary Essays (1986) ‘“Colour of Office”: restitutionary redress against public authority’ [The Sultan Azlan Shah Lecture 1986] (1987) Malaysian and Comparative Law 41 ‘The United Kingdom’ in M. Nimmer and P. Geller, World Copyright Law and Practice (Matthew Bender, 1988, with Annual Releases; 1992–1999) ‘Moral Rights under the Copyright Act 1988’ [1989] E.I.P.R. 388; and in German, [1990] GRUR Int. 500 ‘Rights in Employees’ Inventions – the United Kingdom Experience’ (1990) 21 IIC 298; and in German, [1990] GRUR Int. 339 ‘Computer Program Copyright and the Berne Convention’ [1990] E.I.P.R. 129 ‘Confidence in Ideas’ (1990) 1 Ind. Prop. J. (Australia) 3 ‘Licensing of Rights in University Innovations’, Paper to WIPO-ATRIP Symposium, Costa Rica, September, 1990 ‘The Mortgage of Land in English Law’ in H. Coing (ed.), Studien zur Einwirkung der Industrialisierung auf das Recht (Duncker & Humblot, 1991) 161– 178 ‘The Madrid Agreement for the International Registration of Trade Marks: the United Kingdom Perspective’ (1991) 22 IIC 779 ‘The Effect of the Growing Acceptance of Neighbouring Rights’, ALAI, Aegean Sea Conference (1991) 302–20 ‘The Basic Character of Confidential Information in the Common Law’ in H. Leser and T. Isomura (eds.) Wege zum japanischen Recht (Duncker & Humblot, 1992) 843–850 ‘Works made in Employment: the UK Position’ in G.J.H.M. Mom and P. J. Keuchenius (eds.), Het Werkgeversauteursrecht (Deventer, 1992), pp. 29–35 ‘Nouvelles technologies et naissance de nouveaux droits’ in Institut de Recherche en Propri´et´e Intellectuelle Henri-Desbois, L’Avenir de la Propri´et´e Intellectuelle (1992) 5–14 ‘The International Relations of Intellectual Property’ [1993] C.L.J. 46–63 ‘Das “Statute of Anne” (8 Anne c.19)’, Historische Studien von Urheberrecht in Europa, Vol 10, 67–77 (1993)

294

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‘Intellectual Property: Annual Survey’ (1990) 10 Yearbook of European Law 357– 368; (1992) 12 ibid. 635–642; (1993) 13 ibid. 485–497 ‘Bribes and Secret Commissions: the Principal Questions’ in P. B. H. Birks (ed.) The Frontiers of Liability, vol. I (OUP, 1994) 77–81 ‘Copyright in Scientific Works (Scientific Communications, Computer Software, Data Banks): An Introduction’ and ‘Ownership of Copyright in the Results of Academic Research: the Position in the Common Law Countries of the EC’, Ringberg Colloquium, Gewerbliche Rechtschutz und Urheberrechte an Forschungsergebnissen, 19–22, 1.94 ‘The Notions of Work, Originality and Neighboring Rights from the Viewpoint of Common Law Traditions’ in WIPO Symposium on the Future of Copyright and Neighboring Rights (Paris 1–3.6.94) 81–87 ‘Authors in Law’, 23rd Chorley Lecture, (1995) 58 M.L.R. 1 ‘Scientific Research and Intellectual Property’, Miller Lecture, Edinburgh University, Hume Papers on Public Policy, Privacy and Property (vol. 3, no. 2, 1994) 41–55 ‘Auteurs et new equities en droit anglais’, in C. Colombet and P. Sirinelli (eds.) Propri´et´es Intellectuelles: M´elanges en l’honneur de Andr´e Fran¸con 73–82 ‘Großbritannien’ in Urhebervertragsrecht: Festgabe f¨ur Gerhard Schricker (1996) 643–684 National Academies Policy Advisory Group, Intellectual Property and the Academic Community (March, 1995) ‘Intellectual Property Infringement and Private International Law: Changing the Common Law Approach’ [1996] GRUR Int. 285–89 ‘Harmonisierung des Rechts der privaten Vervielf¨altigung in Europa’ [1997] GRUR Int. 305–08 ‘Chronique du Royaume-Uni: Recent changes in British Copyright Law’ [1997] RIDA 151–189 ‘Judicial Legislation’ in R. W. Rawlings (ed.) Law, Society and Economy – Centenary Essays for the LSE (OUP, 1997) Chap. 17 ‘Protecting Databases: the EC Directive’ [1997] N.Z.I.P.J. 186–192; 21 Col-VLA J.L.A. 1(1996); (and with variations) ALAI Study Days, Amsterdam 1996, Proceedings, 435–442 ‘General Report: Copyright Contracts in the Digital Environment’, ALAI Congress, Montebello, 1997, Proceedings ‘Trade Marks: Portcullis for the EEA?’ [1998] E.I.P.R. 172 ‘Technology and Territory: a New Confrontation for Intellectual Property’ in O. Werner, P. Haberle, Z. Kitagawa, I Saenger (eds.) Brucken fur die Rechtsbvergleichung (1997) 298–308 ‘Die Zukunft des Designschutzes in Europa aus der Sicht des britischen Rechts’ [1998] GRUR Int. 368–371 ‘Experimental Use of Patented Inventions in European Community States’ (1998) 29 IIC 795

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295

‘Copyright Infringements and the Internet’ in European Commission, Creativity and Intellectual Property Rights: Evolving Scenarios and Perspectives’ (1998) 87–96 (and in French) ‘Informal Rights in Industrial Designs: Why Impose Community Constraints?’ in Kabel and Mom (eds.), Intellectual Property and Information Law: Essays in Honour of Herman Cohen Jehoram (Kluwer, 1998) 253–261 ‘Silhouette – Through a Glass Darkly’ Festkrift till Gunnar Karnell (Carlsson Law Network, 1999) 99–110 ‘The Author’s Surrogate: the Genesis of British Copyright’ in K. O’Donovan and G. Rubin (eds.), Human Rights and Legal History (OUP, 2000), Chapter 10, pp. 254–270 ‘Intellectual Property’ in Peter Birks (editor), English Private Law (Oxford University Press, 2000, with supplements) Chapter 6, pp. 465–507 ‘Free Movement of Goods: Pharmaceuticals, Patents and Parallel Trade’ in R. Goldberg and J. Lonbay, Pharmaceutical Medicine, Biotechnology and Eureopan Law (CUP, 2000) 11–24 (with David Llewelyn), ‘The Enforcement of Patents in the United Kingdom’ (2000) IIC 627 (with Catherine Seville) ‘Developments in United Kingdom Copyright Law’ [2001] RIDA 305–357 ‘Regulation of IPRs in the EU’ in C. Saunders and G Triggs (eds.) Trade and Cooperation with the European Union in the New Millennium (Kluwer, 2002) 115–128 ‘The Author as Risk Sharer’ (Horace S. Manges Lecture, Columbia Law School, 2002) (2002) 26 Col. J.Law & Arts 1

SHORTER ARTICLES AND NOTES [1964] 27 M.L.R. 225 ‘Relying on Illegality’ [1964] 27 M.L.R. 472 ‘Rescission without Notice’ [1964] 27 M.L.R. 593 ‘A Licence Coupled with an Equity’ [1965] 28 M.L.R. 361 ‘Punishment for Defamers’ [1965] 28 M.L.R. 577 ‘Report of the Departmental Committee on Jury Service’ [1965] 28 M.L.R. 587 ‘The Profits of a Self-Appointed Agent’ [1966] 29 M.L.R. 428 ‘Economic Duress’ [1966] 29 M.L.R. 570 ‘Australian Views on Personal Injury’ [1966] 29 M.L.R. 686 ‘A Verdict in Error’ [1967] J.B.L. 248 ‘Marks Denoting a Standard’ [1967] J.B.L. 249 ‘Confidence and Patent Publication’ [1967] J.B.L. 249 ‘Colour Television and the War’ [1967] J.B.L. 374 ‘Subconscious Copying of a secret invention’ [1967] J.B.L. 375 ‘Copyright in history’ [1967] J.B.L. 376 ‘Employees with confidential information’

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[1967] J.B.L. 377 ‘Information of equivalent drug’ [1967] J.B.L. 378 ‘The Rolls-Royce Case’ [1968] J.B.L. 63 ‘Omissions & alterations in plays’ [1968] J.B.L. 64 ‘The publisher and the anonymous author’ [1968] J.B.L. 65 ‘Expunging a trade mark: special circumstances’ [1968] J.B.L. 67 ‘False trade description – “applying” and “causing”’ [1968]J.B.L. 163 ‘Sherry follows Champagne’ [1968] J.B.L. 164 ‘Passing Off – A Miscellany’ [1968] J.B.L. 165 ‘Trade Marks: A Descriptive infringement’ [1968] J.B.L. 257 ‘Pulls’ [1968] J.B.L. 258 ‘Infringement Actions in the House of Lords’ [1968] J.B.L. 259 ‘Employee’s Knowledge of a Foreign Patent’ [1968] J.B.L. 259 ‘A two-letter trade mark’ [1968] J.B.L. 343 ‘Fairly based – earlier broad description’ [1968] J.B.L. 344 ‘Confiscation and a trade mark’ [1968] J.B.L. 345 ‘Computer software – Australian application’ [1969] J.B.L. 60 ‘Design copyright’ [1969] J.B.L. 61 ‘Convention Applications’ [1969] J.B.L. 62 ‘Prior publication’ [1969] J.B.L. 63 ‘Poll evidence in trade mark cases (Scotland)’ [1969] J.B.L. 148 ‘Book titles as trade marks’ [1969] J.B.L. 149 ‘Reducing pairs sensibility’ [1969] J.B.L. 149 ‘Interlocutory relief in patent actions’ [1969] J.B.L. 242 ‘Confidence, Copyright and Calumny’ [1969] J.B.L. 244 ‘Mark becoming Descriptive’ [1969] J.B.L. 312 ‘Expunging under Section 11 – the Applicant’s case’ [1969] J.B.L. 314 ‘Improper trade mark licensing’ [1970] J.B.L. 44 ‘Trade secrets – a right to use upon payment?’ [1970] J.B.L. 47 ‘Importing a Reference and Part B marks’ [1970] J.B.L. 48 ‘Chemicals: Scope of Claims’ [1970] J.B.L. 143 ‘Importer’s Mark’ [1970] J.B.L. 145 ‘Limits of Trade Mark Registration’ [1972] J.B.L. 314 ‘Trade Marks: Registration and Deception’ [1972] J.B.L. 317 ‘The Penumbra of Passing-off ’ [1972] J.B.L. 319 ‘Proving Copyright in Industrial Designs’ [1973] J.B.L. 57 ‘Passing off and Characters’ [1973]J.B.L. 59 ‘Sufficient Description’ [1973]J.B.L. 60 ‘European Patent Office at Munich’ [1973] J.B.L. 61 ‘Passing-Off ’ [1973] 1 British Businessman’s Law 22 ‘On Protecting Fictional Characters’ [1973] J.B.L. 174 ‘An Internal Memorandum & Copyright’ [1973] J.B.L. 177 ‘New Products and Trade Marks’

william r. cornish – curriculum vitae

297

[1973] J.B.L. 254 ‘Drug Patents and Monopolies’ [1973] J.B.L. 258 ‘Unwitting Anticipation’ [1973] J.B.L. 260 ‘Obtaining an Invention’ [1973] J.B.L. 261 ‘Fabric Designs’ [1973] J.B.L. 365 ‘Damages for Patent Infringement’ [1973] J.B.L. 366 ‘Copyright in Spare Parts’ [1973] J.B.L. 368 ‘Patent Licences and the Rome Treaty’ [1973] J.B.L. 369 ‘Threat to take Patent Proceedings’ [1973] J.B.L. 369 ‘Know-how’ [1973] J.B.L. 63 ‘The European Patent System’ [1974] J.B.L. 66 ‘A European Trade Mark?’ [1974] J.B.L. 67 ‘Artistic Copyright in a Sofa’ [1974] J.B.L. 68 ‘Prior Claiming: Different Invention’ [1974] J.B.L. 70 ‘Coloured Drug Capsules’ [1974] J.B.L. 156 ‘The Scope of the Patent System’ [1974] J.B.L. 158 ‘What the Ex-Employee may Take Away’ [1974] J.B.L. 159 ‘Passing-off: Recent Developments’ [1974] J.B.L. 249 ‘Blue Paraffin’ [1974] J.B.L. 251 ‘Packs of Pills’ [1974] J.B.L. 252 ‘Coloured Capsules as Registered Designs’ [1974] J.B.L. 323 ‘British Trade Mark Reform’ [1974] J.B.L. 327 ‘Works of Artistic Craftsmanship’ [1974] J.B.L. 329 ‘Industrial Designs: Australiasian Developments’ [1974] J.B.L. 50 ‘The Definitional Stop Aids Flow of Patented Goods’ [1975] J.B.L. 53 ‘Parallel Passage for Trademarked Goods’ [1975] J.B.L. 142 ‘The Unsuspected Patent Application and the Sale of Goods’ [1975] J.B.L. 143 ‘Dissipating Confusion and Part B Marks’ [1975] J.B.L. 175 ‘Dispelling Deception and Passing-off’ [1975] J.B.L. 234 ‘Interlocutory Injunction’ [1975] J.B.L. 236 ‘Patent Law Reform: the Government’s White Paper’ [1975] J.B.L. 237 ‘Patentees as Willing Licensors’ [1975] J.B.L. 313 ‘Photocopying and Authorization’ [1975] J.B.L. 315 ‘Striped Capsules again’ [1976] J.B.L. 60 ‘The Scope of Patent Infringement’ [1976] J.B.L. 61 ‘Trade Libel Resurgent’ [1976] J.B.L. 64 ‘Calling the Sparkle Bubbly’ [1975] 38 M.L.R. 329 ‘Trade Marks, Customer Confusion & the Common Market’ [1975] 38 M.L.R. 563 ‘Interveners and Unjust Enrichment’ [1976] J.B.L. 277 ‘Ex parte Orders to Inspect Premises’ [1976] J.B.L. 279 ‘Interlocutory Injunctions: Patents’ [1976] J.B.L. 280 ‘A Common Field of Activity’ [1976] J.B.L. 281 ‘Similar Fact Evidence’

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william r. cornish – curriculum vitae

[1976] J.B.L. 358 ‘The Treaty of Rome and Trade Marks’ [1976] J.B.L. 362 ‘The EEC Trade Mark – a new initiative’ [1976] Int. Journal of Law Libraries, March, ‘Photocopying, Libraries and Copyright Law’ [1977] J.B.L. 71 ‘Misappropriating another’s work’ [1977] J.B.L. 181 ‘The Patents Bill’ [1977] J.B.L. 182 ‘Imports and Patent Infringement’ [1977] J.B.L. 183 ‘Likelihood of damage in passing-off’ [1977] J.B.L. 274 ‘The Whitford Report: Industrial Designs’ [1977] J.B.L. 277 ‘Trade Marks: foreign manufacturer and importer’ [1977] J.B.L. 357 ‘Patents Act’ [1978] J.B.L. 83 ‘Copyright: First Ownership’ [1978] J.B.L. 85 ‘Obviousness, present and future’ [1978] J.B.L. 87 ‘Tangible Risk of Injury’ [1978] J.B.L. 192 ‘Repairs to Patented Goods’ [1978] J.B.L. 193 ‘“Tie-ups” in Patent Licences’ [1978] J.B.L. 195 ‘Drawing the Same Picture’ [1988] E.I.P.R. 99 ‘The Canker of Reciprocity’ [1991] C.L.J. 223 ‘Conflicting Trade Marks in the EC: Demise of Common Origin’ [1991] C.L.J. 407 ‘Following Money, Changing Position’ [1991] E.I.P.R. 3 ‘Designs Again’ [1992] C.L.J. 231 ‘Comparative Advertising: Denigration and Sycophancy’