Intellectual Property Law

Q&A Intellectual Property

Janice Denoncourt

Intellectual Property Lawcards 2012 - 2013

Routledge

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Questions & Answers

Bonus Question

TRIPS is arguably the most important and comprehensive international agreement on intellectual property rights. Discuss the effects of TRIPS on the UK.

Answer Plan

Explain the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
Why is TRIPS important?
What effect does TRIPS have on the UK?

Answer

Like other countries, the UK frequently signs up to international treaties by which it is then bound in international law. An example of such a treaty is the Agreement on Trade-Related Aspects of Intellectual Property Agreement 1994 (TRIPS) administered by the World Trade Organisation (WTO) based in Geneva, Switzerland. TRIPS was ﬁnalised at the end of the Uruguay Round of world trade negotiations in 1993.

It is widely acknowledged that the TRIPS Agreement is the most important instrument to date concerning intellectual property protection. The TRIPS Agreement does not attempt to deﬁne intellectual property (IP). However, it includes all key areas of IP and requires its members to recognise the existing standards of protection within the Berne and Paris Conventions. TRIPS establishes minimum global standards of protection for copyright, rights neighbouring copyright, trade marks, geographical indications, designs, patents, topographies of integrated circuits and undisclosed (conﬁdential) information. Less developed countries have been given an extended period in which to make the necessary changes to upgrade their domestic legislation.

It has been argued that strengthening intellectual property protection will increase foreign direct investment in developing countries and will lead to a greater transference of technology, thus ensuring that the TRIPS Agreement meets its stated objective set out in Art 7:

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.

The most important provisions of TRIPS relate to the IP rights enforcement powers in Part III. Before TRIPS, enforcement matters, that is procedure, remedies and criminal sanctions were left to national law – there was no multilateral precedent.

Internally, TRIPS is backed by the WTO’s dispute settlement procedures against recalcitrant member states. This enables one state to take action against another that it alleges is guilty of breaching the terms of TRIPS. For example, after a complaint by the US, India was requested to bring its transitional arrangements for patent protection of pharmaceutical and agricultural chemical products into line with Art 70. Sanctions may include the withdrawal of WTO advantages, including removal of concessions in the same area of trade, or the imposition of quotas and restrictions on a state’s exports.

In addition, TRIPS operates alongside the World Intellectual Property Organisation (WIPO). In other words, WIPO initiatives still have an important role to play – for example, the 1992 Convention of Biological Diversity (CBD) recognises the rights of indigenous peoples who preserve biological resources to share in the beneﬁts arising from their commercial exploitation, and calls for greater protection for traditional intellectual resources of the developing world, notably plant culture, medicinal products and indigenous folklore.

In the UK, the Patent Ofﬁce is responsible for formulating and delivering the UK policy on TRIPS topics. In particular, the UK Patent Ofﬁce has identiﬁed two key policy areas:

Technical assistance to developing countries. Art 67 of TRIPS requires developed country members, such as the UK, to provide technical and ﬁnancial cooperation to developing and least-developed country members.
TRIPS and essential medicines. At the World Trade Organisation’s Ministerial Meeting in Doha in 2001, Ministers agreed on a declaration about the TRIPS Agreement and public health. The declaration states that the TRIPS Agreement does not and should not prevent members from taking measures to protect public health. It was agreed to allow the making of medicines under compulsory licences for export to developing countries.

It is important for a developed country, such as the UK, to help countries with little or no pharmaceutical sector to make effective use of compulsory licensing. Accordingly, the TRIPS Agreement was amended in 2005 to reﬂect this decision. This decision is the ﬁrst time a core WTO agreement has been changed. This shows the willingness of member states, such as the UK, to ensure that the TRIPS Agreement does not stop the lesser developed countries from taking measures to protect public health.

In conclusion, there is no doubt that the TRIPS Agreement 1994 is the most important and comprehensive international agreement on intellectual property rights. Full implementation of the current TRIPS Agreement is a key objective of the UK Government which has pledged to work closely with all WTO members to work through any obstacles to this implementation.

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The Good, the Fair and the Ugly

Good essays are the gateway to top marks. New to this edition, The Good, The Fair, and The Ugly shows you the style of essay which works well in exams, as well as the simple errors that can cost you essential marks. Written by our Q&A authors, each of these interactive essay-based tutorials highlights key themes and common errors and illustrates essays of specific standards:

Whilst marking criteria will vary, as a general guide, the Good answer will be based on a general mark of a first or upper second class; the Fair answer will be based on a lower second or third class and the Ugly answer would result in a fail.

The Good

Does the patenting of biological material conflict with traditional justifications for patent law, and in particular John Locke's (1632–1704) Labour theory?

Refer to the relevant statute and case law to support your answer.

The principal purposes of a patent law system are to recompense invention, encourage disclosure of inventions, thus stimulating further advancements, and protect ideas in the public domain. In return for a limited monopoly, the traditional justifications for the patent law regime rely on the concept of reward for labour (the ‘Labour theory’) and the disclosure of useful inventions in the public interest, among others. However, these traditional justifications for the legal protection of intellectual property rights often conflict with modern moral and ethical considerations, especially in connection with biotechnological inventions. Biotechnology is the development of commercial products from biological processes.

The UK patent law regime is regulated by the Patents Act 1977. Under the Act, inventions are patentable if they meet the criteria set out in s 1(1) of the Patents Act 1977. However, s 1(3) of the Act excludes the patenting of inventions contrary to public policy and morality. This provision has become increasingly important in the context of patenting biological inventions. Further, the Act was amended by the Patent Regulations 2000 inserting s 76A and Schedule A2 which implement the EU Biotechnology Directive. Biotechnological inventions are now defined in s 130 of the Act as ‘products or processes containing biological material, that is, material containing genetic information and capable of being reproduced in a biological system’.

Does the patenting of biological material conflict with John Locke’s (1632–1704) ‘Labour theory’ which was conceived several centuries ago? It is well known that Locke identified labour as the original and just foundation of property. In brief, Locke’s was a labour theory of property. Locke viewed private property ownership as legitimate and he argued that the labourer should be rewarded for his efforts. But, he stated that the reward for labour was conditional, so that ‘there must remain objects of similar qualities in sufficient quantities to supply others’. In other words, Locke was concerned to grant some form of reward, so long as that reward was not detrimental to the public interest.

In relation to biotechnological inventions, the conditional aspect of Locke’s labour theory is reflected in the arguments propounded by some scientists in relation to the Human Genome Protect (‘HGP’). The HGP identifies all the human genes and determines the sequence of base pairs for the entire human genome, storing information in databases for further advancements in biotechnology. Succinctly, the genome is the ‘complete set of genetic information of an organism’. On the one hand, the raw sequence of the human genome is a natural manifestation of nature, not made by the human hand. On the other hand, the other format consists of the cloned or isolated and purified partial DNA fragments. The DNA fragments must be excised from the natural context of the human genome, isolated, purified and cloned before scientists can study them. Since the sequenced gene fragments do not exist in their natural state and are therefore ‘not nature’s handiwork’, they are patentable subject matter.

However, certain scientists argue that instead of allowing human genes, tissues and organs to become privately owned commercial property controlled by business for a twenty-year term, the intellectual property law community should work towards creating a global treaty to jointly administer data concerning the human genome and the gene pool for other plants and animals on behalf of future generations. In line with Lock’s Labour theory, the community should ensure that sufficient genetic information is available for use by others.

More recently, modern legal academic Professor Michael Pendleton has argued against promoting private interests because in his view progress has been made only by re-combining pre-existing knowledge. Pendleton’s theory provides that ‘no one own an idea . . . all ideas lie within the public domain’.

The creation of a global treaty to jointly administer data concerning the human genome and the gene pool for other plants and animals on behalf of future generations could be said to be a combination of Locke’s Labour theory (don’t take more than you need) and Pendleton’s theory that an invention cannot be attributable to an individual or small group of people. Elaborating further on Locke’s Labour theory and in line with Pendleton’s theory, Nozick asserts that the labourer should be entitled only to the ‘value added’, not to the total value of the resulting product. Further, it is not only the object and the labour added that have value, but the thoughts and ideas of those who came before (affirming Pendleton).

The counter-argument is that a patent monopoly is the key means of rewarding research-based industries, such as the biotechnological and pharmaceutical industries, enabling them to recoup their massive research and development invest during the patent term where they have the exclusive right to exploit their invention. It is estimated that it takes on average more than ten years to create a useful biotechnological product or process and to market it. Patents protect against competition at the vulnerable early stages of development and converts a risky investment into a saleable commodity. In particular, the patent system protects a patentee’s invention from prospective infringers by preventing others from copying, making, using, offering for sale, or selling another’s work without consent. However, most prospective gene patentees seek patent rights on genetic sequences, which lack intrinsic marketability or definite utility. Should DNA sequences be protected by patents? Is there a need to put an end to the international rush to patent DNA fragment sequences with no known function? Clearly, however, genetic research contributes to the development of many of today’s breakthrough pharmaceuticals and diagnostic tests.

Nevertheless, some scientists object to patents over biological material because of the effect on research in that permission needs to be obtained, licence fees paid in order to use the information. Indeed, one of the strongest arguments opposing DNA sequence patenting is the assertion that such patenting hinders innovation rather than promoting it and so holders of DNA sequence patents have the capability to deprive researchers and physicians of any use of that sequence for diagnosis, treatment, or development of disease treatments. It is argued that scientific integrity is being compromised by commercialism and the giving of property rights over ‘nature’ and further that patent monopolies are being used as a device to monopolise industries and restricting the flow of ideas. In the scientific community, knowledge is usually developed in a cooperative manner through the open disclosure of new knowledge and peer testing of that knowledge. Accordingly, the growing trend towards the commercialisation of research has led to the practice of promoting secrecy and hindering the exchange of information amongst researchers in biotechnology. It is true that information-sharing between laboratories seems to be inhibited by patents and licensing. In other words, until researchers acquire patent rights, publication of research findings may be delayed and the commercialisation of genetic research diminishes the collaborative efforts in scientific research.

Certainly, there are criticisms of the current system of granting patents for biotechnological inventions. However, historically, there is a long tradition in granting patents for purified natural products such as that granted to Louis Pasteur (1822–95) for yeast ‘free from organic germs of disease’. In Parke-Davis & Co v H.K. Mulford & Co (1911) it was held that purified human adrenaline was patentable because, through purification, it became ‘for every practical purpose a new thing commercially and therapeutically’. Some hold the view that as gene sequences already exist naturally and are discovered rather than invented, they should not be patentable. How can the genetic codes which stimulate and codify the make-up of every living cell and organism be bought and sold? This view is supported by the BioIndustry Association, the trade industry representing the UK biotechnology industries.

In addition, many people believe that it is morally and ethically wrong to treat life, and thus biological material, as commercial property. DNA sequence patenting has been attacked on religious grounds based on the notion that genetic manipulation is the same as ‘playing God’, and that the fruits of such work should not be rewarded with patent control.

On the other hand, the patent system significantly benefits society by expediting the discovery of new medications, technologies and non-infringing improvements, while decreasing consumer costs through the development of non-infringing substitutes. Further, the patent law principles may already provide the means to adapt to biotechnological inventions. For example, as the process of isolating gene sequences becomes more commonplace, it will inevitably become harder to show an inventive step which is a legal pre-requisite to the grant of a patent. It is also interesting to contrast the case of biological material with that of chemical elements in the period table. Such elements were largely non-obvious when first isolated and purified, and very useful, but they were not held to be patentable because they were discoveries of nature, despite the human ingenuity involved in isolating them. In conclusion, there is need to find a viable compromise that protects knowledge in the public domain and encourages further biotech research.

Commentary:

A good answer will critically assess whether the traditional philosophical rationales justifying the grant of patent monopolies are still relevant when considering modern dilemmas over the patentability of certain biological material. This answer effectively deploys the relevant statute and case law at each point of the analysis. It provides a comprehensive analysis of the two limbs of the question illustrated with topical and relevant examples. The answer also presents a balanced discussion by providing counter arguments.

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The Fair

Does the patenting of biological material conflict with traditional justifications for patent law, and in particular John Locke's (1632–1704) Labour theory?

Refer to the relevant statute and case law to support your answer.

This answer will begin by stating the extent to which biological material can be patented and then discuss the relevance of traditional justifications to modern patent law.

The term “biological material” potentially refers to microbiology and biotechnology. Microbiology is associated with production techniques for pharmaceuticals and other substances which use micro-organisms in controlled reactions. Biotechnology has a broader scope and generally refers to the engineering of genetic materials towards a range of practical ends. Inventions are patentable if they meet the criteria set out in section 1(1) of the Patents Act 1977 (“the PA”).

Since the Court of Appeal’s decision in Upjohn’s Application [1977] R.P.C. 94 methods of treating the human or animal body have been unpatentable on the basis that treatment was not capable of industrial application, this decision was consolidated by article 52(4) of the European Patent Convention 1973 (“the EPC”) and subsequently by sections 4(2-3) of the PA. Traditionally this exception was justified by the view that the medical profession should not be hindered by the commercialisation of practice. Although this justification remains essentially the same today, it has been re-labelled with different language as part of “public health policy” in the European Union.

Despite article 53(b) of the EPC, section 4(1) of the PA and articles 3, 4(1) and 4(3) of the Biotechnology Directive 98/44 (“the BD”) processes for the production of certain animal and plant varieties have been patented. A number of cases illustrate this development, the case law centres on the scope of the phrase “essentially biological” in article 53(b) of the EPC. Modern biotechnology has gone beyond known biological and classical breeders’ processes and is therefore no longer essentially biological. Patents were granted in: Ciba-Geigy/propagating material [1984] O.J. EPO 112, Lubrizol/hybrid plants [1990] O.J. EPO 59and Harvard/Oncomouse [1990] O.J. EPO 476.

“The exclusion of varieties and essentially biological processes in part expresses ethical objections to human intervention in the generation of animals and plants, objections which may equally be raised on the moral and public policy grounds. But this exclusion has its basis primarily in the expectations of traditional industries and professional expertise of plant and animal breeding. Those industries now find themselves participating in biotechnological and similar grand-scale high-investment strategies, for which innovators and their financiers expect protection against competition and look towards the broad range which the patent system is most likely to provide. The European Patent Office’s interpretation of the exclusion, which was to have been entrenched in EC national laws by the proposed BD, goes as far as it can to accept this new development. Even without the BD, it is quite likely that, in individual states, courts and offices will prove reluctant to depart from the emergent European position.”

Section 1(3) of the PA excludes the patenting of inventions contrary to public policy and morality. In the past this had been a “seemingly underused provision” however, this provision has become important in the context of patenting biotechnological inventions.

In the United States, the Oncomouse technology was granted a patent and therefore a monopoly as regards production and licensing as a reward for the research carried out in this field and as a reward for investment. This gave effect to the Supreme Court’s decision of Diamond v. Chakrabarty where it was stated with typical American gusto that: ”anything under the sun made by man apart from a human being should be regarded as patentable”.

Traditionally patents have been granted for a number of reasons, for example: to incentivise inventors and to increase knowledge. In summary they are largely economic reasons. In Europe ethical considerations have been confused with concerns over the best way to limit the scope of monopoly rights granted by patent claims. Nott believes: “moral and public policy objections should play no part in the question of grant…patent office examiners lack any expertise to form the appropriate judgement”. This view is too extreme to have any practical application, a balance must be struck between morality and the promotion of competitive technological development.

Commentary:

This answer is quite strong on answering the first limb of the question relating to the patentability of biological material, but does not contain much content analysing the traditional justifications and in particular Locke’s labour theory. It is however very well-written and argued. The writing style is logical, succinct and the content is accurate. The student also makes an effort to refer to relevant statute and case law to support and illustrate the ideas presented. The final paragraph contains concluding remarks which directly address the first limb of the question.

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The Ugly

Does the patenting of biological material conflict with traditional justifications for patent law, and in particular John Locke's (1632–1704) Labour theory?

Refer to the relevant statute and case law to support your answer.

To be patentable an invention must be new. Section 2 of the PA 1977 elaborates
section 1(1)(a) of the Patent Act 1977 that an invention that forms part of the ‘state of the art’ is not new.

To decide whether invention is new is a three-step process:

Finding the state of the art;
Interpreting the specification to establish the boundaries of the invention being claimed;
Comparing the invention as claimed to prior art on the priority date of the invention.

If the invention has been disclosed before its priority date, it is not new. A microbe, plant or animal, as it exists in nature is not new. Thus for any invention to be patent able it must involve the “Hand of A man”. The novelty requirement, which precludes the patenting of subject matter as it exists in nature, the patent law have additional stringent requirements which prevent the patenting of a subject matter, which is not a substantial advancement over previously known technology.

The most important of these requirements is the requirement that an invention to be “non-obvious” in order to be patent able. Unusual or unexpected advantageous properties are characteristics, which can help establish unobvious ness.

Also difficulties in obtaining the result make it unobvious. The test used in the UK to determine unobviousness was set in Windsurfing International v Tabur Marine [1985] where Justice Oliver lay down the Windsurfing test, which has four stages.

Another requirement of patent law is that the patent application must provide a description of the invention in such a detail, that a person skilled in the art of the invention, reading the description, can make and use the invention without undue experimentation. Technograph v Mills & Rockley [1972] R.P.C Lord Reid “…the hypothetical addressee is a skilled technician who is well acquainted with workshop technique and who has carefully read the relevant literature”. This requirement is the heart of the patent system because it ensures that, if a patent is granted, the publish will be able to learn from the invention, improve upon the invention, and when the patent expires, practice the invention without any patent restriction.

The requirement that a patentable be susceptible or capable of industrial application is set out in Section 4(1) of the Patent Act. This requirement had no previous counterpart in previous British Statutes. In part the concept is concerned with the categories of subject matter that fall within the sphere of the patent system.

Biotechnological inventions are defined as products or processes containing ‘biological material’, which is material containing genetic information and capable of being reproduced in a biological system’.

Commentary:

This essay answer is a borderline fail. It represents an answer slightly below the acceptable standard for a passing mark. While the student demonstrates general familiarity with the patent law subject area and does include some accurate material, this material is largely irrelevant and not well-shaped to answer the two limbs of the specific question posed. The answer contains poorly developed arguments in relation to the patenting of biological material and does not address the traditional justifications for patenting. A short answer on the correct topic in general terms will score around 30-35%.

Routledge

Senior Law Lecturer

Nottingham Law School

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Lawcards

Revision Checklist

Chapter 2: Confidential Information

Basic elements of breach of confidence
Categories of protectable information
The essential elements of breach of confidence; information, obligation of confidence and risk of damage
The public interest defence
Remedies: damages and injunctions

Chapter 3: Patents

Patentability criteria: novelty, inventive step and industrial applicability
Categories of work excluded from patentability
Patent application procedure
Infringement and defences
Exhaustion in patent law
Revocation of patents
Ownership of patents, including employee inventions
Damages in patent actions

Chapter 4: Copyright

International agreements in copyright
Copyright must subsist in the work
The requirement of originality in copyright
Copyright protects expression and not ideas
Categories of protected work under s 1(1) of the Copyright, Designs and Patents Act 1988
Infringement issues: substantiality and causal connection
Authorship
Secondary infringement
Permitted acts
Ownership of copyright
Remedies: damages and injunctions

Chapter 5: Passing Off

The elements of passing off: the 5 part and 3 part tests
The requirement of goodwill
Misrepresentation and deception
The use of personal names under passing off
Actionable damage; diversion of custom or damage to reputation
Remedies

Chapter 6: Malicious falsehood

Elements of malicious falsehood
Malice
False statements
Damage

Chapter 7: Character Merchandising

Defamation – use of defamatory images
Copyright – protection of the physical expression of a character
Trade marks
Passing off

Chapter 8: Registered Trade Marks

The registration system – advantages of its use
Registrability of a trade mark
Rights in a trade mark – protection against unauthorised use
Comparison of trade marks – similarity and likelihood of confusion
Damages for infringement

Chapter 9: Design Rights

Registered designs under the Registered Designs Act 1949 – registrability
Unregistered designs under the Copyright, Designs and Patents Act 1988 – definitions
Infringement and remedies
Chapter 10: Remedies
Injunctions – permanent and interlocutory
Pre-trial orders – prevention of destruction of evidence
Damages
Criminal sanctions

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Quizzes

Glossary

Additional Problem Questions

Click on the "Suggested Answer" to display the answer

Problem Question

Gavin has just purchased a container-load of T-shirts featuring Homer, Marge, Bart, Lisa, and Maggie, characters from the American animated television sitcom, "The Simpsons" from Kevin in London. Kevin assured Gavin that the T-shirts were produced under licence from Fox Broadcasting Company, the US-based producers and owners of copyright in the characters depicting the show's eponymous family. Gavin is very sceptical of Kevin's assurances because of the latter's penchant for copyright infringements and several previous copyright-related offences and convictions. However, due to huge demands for the Simpsons' T-shirts in the run-up to the show's 20th anniversary, Gavin plans to sell the T-shirts anyway, resolving to rely on Kevin's assurances should he be challenged by the copyright owners.

Will Gavin be infringing copyright? Or has he already infringed copyright? Would Gavin's position be different if the copyright owners notified him about their copyright in the animated characters, after Gavin had sold some, but not all of the T-shirts? What are the possible remedies available to the copyright owners should Gavin be deemed a secondary infringer? What sort of remedy could Gavin resort to in order to recoup his loss?

Answer Plan

This question requires the student to have a good grasp of relevant provisions of copyright legislation and case law on circumstances when secondary infringements could take place, the crucial role of the mental state of the alleged secondary copyright infringer, the remedies available to copyright owners, and the legal fate of the alleged secondary copyright infringer.

Suggested Answer

The scenario depicts in the question deals with a situation of secondary infringing acts and the mental element needed for secondary infringement, assuming all the acts take place within the United Kingdom. We learnt that Gavin bought the T-shirts off Kevin in London, so Gavin would not be a primary infringer if Kevin was lying and had no permission of the copyright owners as he claimed. However, Gavin could potentially be committing the secondary infringing acts of keeping (in the course of business), offering and exposing for sale (in his stall), and selling the T-shirts. These acts are prohibited by section 23 of the Copyright, Designs and Patents Act, 1988.

In order for Gavin to avoid liability for possible secondary copyright infringement, he has to show that from the facts, he has no knowledge or reason to believe that the T-shirts he bought from Kevin infringe Fox Broadcasting Company's copyright in the Simpsons characters. See section 23 of the Copyright, Designs and Patents Act, 1988.

The pertinent question therefore is whether Gavin has the requisite knowledge? We have to look at the scenario for clues. From the facts, he seems to know that the Simpsons characters are protected by copyright. However, does Gavin truly believe that Kevin was an official licensee of copyright in the Simpson characters? He is well aware of Kevin's notorious previous copyright infringements and convictions. But could Gavin's knowledge of Kevin's habitual copyright infringements be enough to ground the claim that he knows or has reason to believe that the Simpsons T-shirts are infringing?

In Pensher Security Doors Co Ltd v. Sunderland City Council [2000] RPC 249, the Court of Appeal approved the distinction between knowing facts that give rise to a mere suspicion and facts that provide a reason to believe. If Gavin could establish that his knowledge of Kevin's previous copyright breaches gives him no more than mere suspicion that the Simpsons' T-shirts could be infringing, then on the authority of Pensher Security Doors Co Ltd, he could escape liability for secondary copyright infringement. However, if the Court believes to the contrary, and affirms that Gavin's knowledge of Kevin's previous copyright infringements should have made him to know or give him a reason to believe that the Simpsons' T-shirts are indeed infringing, then Gavin could be liable for secondary copyright infringement. Given the facts, it would appear that Gavin would find it very difficult to establish that the facts give him no more than mere suspicion, and the court, in the circumstance, would most likely find that there was sufficient evidence to support that Gavin had knowledge or a reason to believe that the T-shirts were infringing.

Moreover, if the owners of copyright in the Simpsons' characters had written Gavin directly or through their solicitors that the T-shirts were not official and were infringing, Gavin would thereafter be deemed to have knowledge about the infringing T-shirts and would, without doubts, be regarded as a secondary copyright infringer from there on. Significantly at this point, the question of whether Gavin has knowledge or mere suspicion that the T-shirts are infringing would become moot.

Also, from this point on, Gavin will not be able to legally dispose of the unsold stock, and the copyright owners could ask for an order of court that the unsold stock be delivered up to them for detention as provided for respectively under sections 99 and 100 Copyright, Designs, and Patents Act 1988 on order for delivery up and right to seize infringing copies by copyright owners.

Obviously, an order for delivery up or seizure of unsold stock would leave Gavin out of pocket. So what can he do? He has no remedy under the copyright law against Kevin, but he could sue Kevin for a breach of implied term of their contract that Kevin had title to the T-shirts and that the T-shirts were legally sold.

Problem Question

Whilst on holiday in Marrakesh Morocco, Jane purchased 600 Radiohead CDs, which were on sale at a very low price. She brought them back to home in London in order to sell them to friends and acquaintances at a profit, which she did. However, unknown to her the CDs were fake.

(a) Has she infringed copyright and if so, how and when?

(b) Would her position be different legally if she had purchased the CDs in Germany?

(c) Would her position be different if in either of the above situations, the CDs were genuine ones produced by Radiohead's record company for distribution in Morocco and Germany?

Answer Plan

This question deals with the legal issues raised by Jane's importation of infringing fake music CDs from outside of the EU into the UK. The question is primarily intended to test students' knowledge of the EU as a single jurisdiction and market for copyright works vis-à-vis countries outside the EU. This distinction is useful for determining when parallel importation (an infringing activity) takes place, the nature of the infringing activity of the importer of works subject to copyright protection, as well as remedies available to copyright owners.

A useful starting point is to examine the copyrights that exist in a typical music CD that would be owned by the Radiohead or their record company. The next logical step should then focus on examining at what stage Jane commits an infringing activity under the Copyright Act 1988, the implications of purchasing the fake CDs from Germany as opposed to Morocco, and what her legal position would be if the CDs were not fake, but were first sold into Moroccan and German markets by Radiohead or their record company prior to Jane's purchase.

Suggested Answer

There are clearly a number of copyrights that typically exist in a music CD. These include (a) musical works (basic tune plus arrangement), (b) lyrics, (c) sound recording, (d) compilation (selection and ordering of tracks-probably as a compilation rather than database) and (e) sleeve artwork. A good fake will infringe all these copyrights.

At what stage does Jane commit an infringing act under the Copyright, Designs and Patents Act 1988?

Infringing acts must take place within UK jurisdiction. Therefore, it is the stage at which Jane imports Radiohead's music CDs into the UK that the infringing acts take place. However, under section 22 of the copyright Act 1988, in order for Jane to commit an infringing act by importation of the CDs into the UK, she must know or has reason to believe that the CDs are infringing copies. Under section 27 of the Copyright Act, the CDs are by law, infringing copies because they are not genuine. This takes us right back to the question of knowledge that we earlier deal with in Gavin's case in question 2 above. Invariably, proving whether or not Jane has knowledge or reason to believe that the music CDs she bought in Marrakesh were fake, would depend on the factual circumstances such as the price she bought them at, whether there are any tell-tale signs that the CDs were fake, etc. The bottom line Jane could be liable for secondary copyright infringement for importing those CDs into the UK.

Is Jane also a primary copyright infringer?

Yes, it will appear so by virtue of section 18(2) & (3) of the Copyright, Designs and Patents Act 1988, which makes Jane an issuer by placing infringing copies of Radiohead CDs on the market in the European Economic Area (EEA) for the first time. Note that unlike secondary infringement, there is no mental element qualification to primary infringement. Therefore, even if she escapes liability for secondary copyright infringement on account of requisite knowledge or reason to believe that the CDs are not genuine, she will not escape liability for primary infringement.

Would her position be any different if she had purchased the music CDs in Germany?

If she had purchased the CDs in Germany, she would not be an issuer or primary copyright infringer under section 18 of the Copyright Act, because the CDs have already been imported into and issued in Germany, which is part of the EEA, by the person/s she from whom she bought the CDs.

What if the CDs she imported from Morocco were genuine copies produced by Radiohead's record company for distribution in Morocco?

If the CDs were not fakes, then they are not 'infringing copies' within the meaning of section 27 of the Copyright Act, 1988. Therefore, Jane will not be liable for secondary copyright infringement. However, she may still be liable for primary copyright infringement under section 18 for importing from Morocco and issuing or placing the music CDs on the market within the EEA. Section 18 does not require copies issued to be unlawful copies, and will apply even to official copies. Jane's importation of the CDs from Morocco into the UK will amount to parallel importation. Although the CDs are official copies, Radiohead's or their record company's rights are not exhausted for copies they placed or issued in Morocco or anywhere outside of the EEA.

On the other hand if she had brought in the lawful copies into the UK from Germany, she would not be infringing any copyright, as Germany is within the EEA and part of the single market.

Problem Question

Discuss whether the following invention by Healthfirst Pharmaceuticals Company would be patentable (subject to questions of novelty, obviousness and internal validity?)

Healthfirst Pharmaceuticals Company has identified the genes, present in most mammals, which are responsible for many aspects of the ageing process. By modifying these genes the company is able to create and breed pigs that show human-like signs of ageing such as wrinkling skin, reduced reaction time, and dementia at an accelerated rate over the lifespan of the animal. (Normally pigs show different ageing signs before the end of their natural life.) The company chose the pig rather than other animals as pigs are physiologically similar to humans. It hopes to sell these pigs for use in experiments into treatments for ageing process in humans and animals, cosmetics, etc.

Answer Plan

This question raises a number of issues regarding the modification to the genetic identity of animals that are addressed in the Biotech Directive. A useful starting point is to identify the basic principles on the patentability of genes discovery, and then go on to discussing further qualifications under the Biotech Directive.

Suggested Answer

As a general rule, a mere discovery of a gene is not a patentable invention because it is not capable of industrial application under section 1(1) (c), and it is excluded under section 1(2) (a) of the Patents Act, 1977. The pertinent question is whether Healthfirst's invention is caught by these provisions? In order to answer this question, it is necessary to examine what exactly the company claim to have invented. Healthfirst seems to have discovered how ageing genes work. The company reached this conclusion by identifying and isolating the gene, identifying what the gene does, and figuring out how to modify the gene's behaviour to produce something useful from it: a laboratory animal (pig) which ages like humans. It is clear from the foregoing analysis that Healthfirst's research efforts go beyond merely discovering a gene. The company actually makes an invention (pigs) which appear to be new and are clearly capable of industrial application.

Because the invention involves genes, we need to apply the provisions of the Biotech Directive as stated in Schedule A2 of the Patents Act 1977, and refer to the Directive where necessary.

Also, because the invention involves animals, and a way of producing animals, we need to first consider paragraph 3(f) to Schedule A2 of the Patents Act 1977, which forbids the patenting of traditional biological processes for the production of animals. It is clear from the evidence that Healthfirst used a microbiological process and not biological processes therefore their invention will be patentable.

A potential obstacle to Healthfirst's invention is paragraph 3(e) to Schedule A2 of the Patents Act 1977. It forbids processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes. This provision is meant to implement the general ideas of the first decision in Harvard/Onco Mouse [1990] EPOR]. The pertinent question is whether this invention is caught by this provision? It is not clear from the facts presented here if the laboratory experiments for modifying the pigs' ageing process cause or will likely cause them any suffering. If this is the case, then there must be substantial medical benefits to humans or animals in order for the invention to be patentable. The next logical question is whether from the facts, there are any medical benefits? Yes, there are medical benefits, as the invention can be used to treat dementia in humans. The fact that it can also be used in cosmetics will not diminish its medical benefits potentials, and will be patentable.

Other possible legal obstacle to the invention is the general "order public" or morality objection under section 1(3) of the Patents Act. However, it is not an issue in this case, and need not be discussed.

2. James is a biochemist working for Beautyfirst Cosmetics Ltd, a London based company that specialises in beauty products and cosmetics. James is also a keen amateur football player. Recently, after a football game, he was examining the ingredient list on the bottle of liniment he uses to ease his aches and pains. He was amazed to find that one ingredient was the same as an active ingredient of a cream for treating skin wrinkles, which he was working on in the laboratory. He has been having a problem delivering the active ingredient to skin membrane. When he returned to his lab, he tested the liniment, and used it to deliver the active ingredient across skin membrane very effectively. James now believes that a composition based on the skin liniment recipe would be an effective anti-wrinkle cream.

Problem Question

Can James patent the cream and what exactly could it claim?

Answer Plan

The issue raised in this question deals primarily with the problem relating to getting a patent for a new use for a known compound or product. This problem was dealt with by the Enlarged Board of Appeal of the EPO in G2/88 Mobil Oil III/Friction Reducing Additive [1990] OJEPO 93, and G6/88 Bayer/Plant growth regulating agent [1990] OJEPO 114. The first step is to identify the nature of James' invention and examine whether he could apply for a national patent in the UK or to the European Patent Office (EPO).

Suggested Answer

The active compound in James' claimed invention is from an existing compound which has been previously used in the liniment for aches and pains. James has now found a new use for this old compound: an anti-wrinkle cream. In the UK, it's a longstanding principle of novelty that no one could get a patent for merely ascertaining the properties of a known substance. (IG Farbenindustrie AG's Patents (1930) 47 RPC 289 at 322.) Thus in Bayer AC (Meyer's) Application [1984] RPC 11, a claim to compound X for use in combating medical condition Y was refused because compound X was already known as a therapy.

In order to circumvent this principle, and allow patents claims for second medical use, a method of claim known as the Swiss-type claims was devised. The Swiss method generally refrains from claiming the product, but will rather claim a new method of using a known material. This was upheld by the enlarged Board of Appeal in G05/83 EISAI/Second Medical Indication. The new section 4A (3) and (4) of the Patents Act 1977 as amended, has now incorporated this reform into the UK law.

In light of the above analysis, James should be able to get a patent for his invention in the UK provided his invention is for a second medical use, and he frames the claim in such a way as to focus on the new method of using the compound, rather than the compound itself which obviously is not new. The only problem with such a patent is that it will be difficult to enforce. James cannot prevent people from using the existing liniment for aches and pains, which contains the active ingredient in his patent.

The EPO has taken the Swiss-type claim exception beyond medical uses into the realm of all types of technology in cases such as Mobil Oil III/Friction mentioned above, although UK courts are reluctant to follow suit. So even if James' invention is not accepted as a medical invention, he could apply for an EPO patent provided the claim is appropriately framed as mentioned above. Again, the problem of enforcement won't go away. EPO does not enforce patents, only national courts do. Thus, while James could end up getting a UK or EPO patent for his invention, it is one which is potentially unenforceable, because he can't stop people using existing products which contain the active ingredient of his patent.

Problem Question

List and briefly outline the different types of protection that exist (or might exist) for designs created since Wednesday 6th March 2002 in the UK.

Answer Plan

This question requires students to discuss the four types of protection for designs in the UK: These are copyright, UK unregistered design right, registered designs and EU unregistered design protection.

Suggested Answer

Copyright Protection of designs

The first type of design right is the one conferred by copyright. Copyright work will often be a drawing (graphic work, artistic quality is irrelevant) but could be a model or mock up if protected by copyright as a sculpture, work of artistic craftsmanship or, in the case of flattish things, engraving.

In order to establish infringement, copying will have to be alleged; usually direct copying that may involve 2D to 3D conversion or vice versa.

Limitations on using copyright to protect designs

The first limitation is the defence under section 51 of the Copyright Act 1988. It provides that it is not an infringement of copyright in a design document or model recording or embodying a design for anything other than an artistic work or typeface to make an article to the design or to copy an article made to the design.

The second limitation is section 52 (2) of the Copyright Act 1988, which sets the duration of copyright designs protection at 25 years. This is in contrast to the standard life plus 70 years duration granted by section 12 of the Copyright Act to authors of literary, dramatic, musical, or artistic works.

UK unregistered designs right.

The second type of designs right is the one conferred by the UK unregistered designs provisions under sections 231 to 247 of the Copyright Act. The following are the key features of the type of protection conferred by the UK unregistered design right.

First, the right protects the shape and configuration of an article not including surface decoration from being copied. See generally section 231 of the Copyright Act 1988. Second, the right only protects original designs (section 213 (1)), third, there is no technical requirements for a "work" to be involved as required by copyright protection for designs. Therefore, a rough mock up like in Hensher v. Restawile Upholstery (Lancs) [1976] AC 64 would give rise to UK unregistered design right. Forth, the right protects functional designs just as well as aesthetic ones, though exclusions may apply, i.e., (must fit, must match), section 231 (3) (b) (i) (ii), fifth, there is no "dictated by function exclusion", and sixth, a UK unregistered designs only last 15 or 10 years, see generally section 216 of the Copyright Act 1988.

Registered designs right

This is the third type of designs right conferred in the UK. It may be obtained from a national Designs Registry in Europe or from OHIM Office in Alicante, Spain. Both national and Alicante offices require that the same basic requirements be satisfied for protection.

The following are the key features of the UK/EU registered designs right: First, appearance of a product is protected, and this can include surface decoration, colour, etc. Second, interfaces (must fit) and things dictated by technical function are excluded from registered designs right. Third, only new designs are protected, plus they must have individual character. The test for novelty is an objective test. Fourth, a registered design right must be applied for, and sixth, a registered design right can last up to 25 years from application. See generally sections 1-47A of the Registered Designs Act 1949 for detailed provisions protecting registered designs right in the UK.

EU unregistered design right

This is the fourth type of designs right that could be applied for in the UK and across national designs registries in the EU. It should be considered as a non-registered version of UK/EU registered designs discussed above.

The following are the key features of EU unregistered designs right: First, it only confers an anti-copying right and not a monopoly right, second, it only lasts for t3 years from the date the products were first marketed, and third, novelty and individual character etc, are required.