A Look Back – the last 12 months in Intellectual Property
New legislation in 2021
Digital Single Market (DSM) Copyright Directive: On 12 November 2021 the European Union (Copyright and Related Rights in the Digital Single Market) Regulations 2021 (the “DSM Regulations”) were signed into Irish law. They became effective on the same date, implementing the DSM Copyright Directive in Ireland. The DSM Directive was designed to provide a framework for a more modern copyright legislation that will strengthen the rights and protections afforded to various categories of rights holders in the digital economy. Arthur Cox has published a number of articles on the DSM Directive, available in parts one, two, three, and four.
New IP Court Lists
The Irish Court system underwent a number of changes in 2021 to enhance procedures for intellectual property actions brought in this jurisdiction. The goal of these changes is to ensure that such disputes are dealt with as efficiently, expeditiously and as cost effectively as possible.
The Commercial Court, available for accelerated hearing of significant commercial disputes, will now have a separate Intellectual Property and Technology List sub-division with a number of key new features. In addition, the Circuit Court Rules have been amended to extend its jurisdiction to a range of IP disputes. The Circuit Court’s jurisdiction is for claims up to €75,000. A full briefing on the changes is available here.
Case law update
The Irish Court of Appeal upheld the decision of the High Court revoking Gilead Sciences’ supplemental protection certificate (SPC) for Truvada, a combination therapy used to treat HIV. SPCs provide an additional period of patent protection (to a maximum of 5 years) for a medicinal product, to compensate for the time that may be required to obtain permission to market a regulated product. This case concerned the validity of the SPC, which the High Court had found against, ruling that the underlying patent is relevant to not just HIV but to a number of important viruses and had “very good activity” against hepatitis B. The High Court did not accept Gilead’s claim that HIV is the principal or most important focus of the patent, and as such the subsequent SPC was revoked. The Court of Appeal upheld this, finding the judgment of the High Court to be “unimpeachable”.
The High Court refused an application by Eli Lilly to modularise the trial of the issues the subject of the proceedings. The judgment arose in the context of an ongoing dispute between the parties regarding firstly, a European patent owned by Novartis which Eli Lilly alleges should not have been granted as it lacks novelty and secondly, patent infringement proceedings taken by Novartis against Eli Lilly in relation to a competing product which it alleges infringes its patent. The patent the subject of the proceedings is due to expire on 2 June 2024. The Court refused the application for modularisation on the basis of the risk of prejudice to Novartis. The Court concluded that if modularisation was granted and if Novartis succeeded in its infringement action, it was likely that the patent would have expired before Novartis would have had an opportunity to apply for an injunction. The Court also held that on the balance of probabilities the primary reason for the application was not for the benefit of both parties as is required but rather for the tactical advantage that would accrue to Eli Lily as Novartis would likely miss the opportunity to seek injunctive relief.
In the course of its judgment the Court emphasised the strong public interest in saving Court time through modularisation and commented that were it not for the particular facts of the present case which did not favour the grant of a modularisation order, “where a patent is due to expire, this Court would have little hesitation in ordering the modularisation of the trial in order to potentially save at least 2 ½ weeks of scarce court time”. Whilst the relevant criteria for modularisation will have to be met, the judgment gives a welcome signal of the Court’s willingness to facilitate expeditious determination of issues in a patent dispute case where a patent is due expire imminently.
The English High Court found that a patent, owned by Bayer for a pharmaceutical compound used for cancer treatment, to be an obvious outcome of a routine drug development due to a single item of prior art. The case focused on the “could/would test”, whereby it was not whether the invention had been “obvious to try”, but whether there were sufficient reasons for the invention not to have been tried.
The EPO’s Enlarged Board of Appeal (EBA) confirmed its previous position that there is a prohibition on double patenting at the EPO. The EBA held that a European Patent Application can be refused under Articles 97(2) and 125 of the European Patent Convention (EPC) if it claims the same subject-matter as a European patent which has been granted to the same applicant and does not form part of the state of the art pursuant to Article 54(2) and (3) EPC. This refusal can be made despite the absence of an explicit double patenting provision in the EPC.
The EPO Board of Appeal upheld the principle of an “any person” opposition in view of the broader public good. This principle permits an opposition to be filed against a European patent in the name of a “straw man”, allowing the identity of the interest party to remain hidden.
The European Court of Justice (ECJ) ruled that the EU’s protected designation of origin (PDO), under Article 102 Regulation 1308/2013, for foodstuff and drinks extends to services. This allowed the French champagne lobby to succeed in a legal battle against “Champanillo”, a small Catalan restaurant chain.
The Court held that evocation may also result from a ‘conceptual proximity’ between the protected name and the sign at issue. As such, the decisive criterion for the concept of ‘evocation’ under Regulation 1308/2013 is whether, when the consumer is confronted with a disputed name, the image triggered directly in his or her mind is that of the product covered by the PDO. The regulation does not require that the product covered by the PDO and the product or service covered by the disputed name be identical or similar.
The General Court upheld an invalidation decision of the EUIPO Board of Appeal, holding that Hasbro acted in bad faith, contrary to Article 59(1)(b) European Union Trade Mark Regulation 2017/1001 (EUTMR), by re-filing for its MONOPOLY trade mark with the intention of “evergreening”, i.e. where trade mark owners re-file identical trade marks for identical goods and services in order to secure an additional five year grace period for their new registrations. The General Court noted that the regulation does not define what ‘bad faith’ means, as such it must be interpreted in accordance with its meaning in everyday language, as well as the fundamental purpose of the legislation and the previous case-law of the EU courts.
The Court noted that good faith in filing is presumed, and bad faith, being a subjective intention held at the time of filing, must be proven by the applicant for invalidity with objective evidence. The case for finding bad faith will be stronger where there is clear advantage gained or intended by the trade mark owner, or likewise a detriment to a third party, by circumventing an established rule of EU Law.
The General Court held that the slogan mark “It’s like milk but made for humans” is distinctive for food products. The Court noted that under Article 7(1)(b) EUTMR and settled case law, slogans are not automatically precluded from registration as a trademark, nor are they subject to more stringent requirements of distinctive character. Furthermore, the laudatory or promotional nature of a sign does not preclude it from also acting as a guarantee of origin. Such mark will only be devoid of distinctive character if the relevant public will perceive it as a ‘mere promotional formula’.
Ardagh Metal Beverage Holdings v EUIPO – Case T-668/19
The General Court has upheld the decision of the Second Board of Appeal of the EUIPO, declaring that the sound of a drinks can that is opened, followed by a short silence and a fizzing sound, cannot be registered as an EU trademark (EUTM) because of lack of distinctiveness. The Court held that sound marks must have a certain resonance, enabling the addressed consumer to perceive it as a trademark and not as a functional component or an indicator of intrinsic characteristics. The average consumer must be able to deduce the commercial origin of a product through the mere perception of the sound, without it being combined with other elements such as words or images.
Copyright & Database rights
The Court of Appeal upheld the judgment and order of the High Court pursuant to a preliminary ruling delivered by the CJEU (Case C-265/19) arising from an Article 267 reference on a question of interpretation of a 2006 EC Rental Directive (Directive 2006/115/EC concerning the rental right and lending right and on certain rights related to copyright in the field of intellectual property). The reference became necessary following a long running commercial dispute between the parties representing, respectively, the producers of and performers on sound recordings, in relation to the sums payable to performers from licence fees collected for the public broadcast and performance of their work. The contract between the parties defined certain terms by reference to the Copyright and Related Rights Act 2000.
The High Court gave declaratory orders that the 2006 Directive requires that the right to remuneration accorded to owners of sound recordings publicly broadcast in Ireland must be “equally accorded” to all performers whose performances are included on the recordings; and that the 2000 Act does not properly transpose the 2006 Directive into Irish law because it does not accord to all performers on publicly broadcast sound recordings a right to remuneration for their work.
In rejecting the plaintiffs appeal against the orders, the Court of Appeal held:
- that the High Court does not ordinarily refrain from granting declaratory relief following a ruling of the CJEU on questions referred to it. The High Court is entitled to make declaratory orders without granting other or consequential relief and the discretionary remedy will ordinarily be granted once the plaintiff’s argument is upheld;
- that declaratory relief is a standalone relief and that the implications of the order, following the trial of the preliminary issue, will fall to be determined by the judge presiding over the remainder of the proceedings. The Court of Appeal confirmed that the declaration does nothing more than confirm the law and does not make any determination on the contractual arrangements between the parties, and as such does not infringe on the principle of horizontal direct effect between private parties under EU law; and
- that the High Court cannot make a declaration which specifies that no effect is to be had on the contractual arrangements between the parties as a result of the orders, as this would infringe on the role of the Oireachtas and amount to an impermissible breach of the separation of powers.
Regarding the appeal of the order as to costs, the Court of Appeal showed deference to the decision of the High Court and noted the margin of appreciation afforded to the trial judge in deciding on costs.
Constantin Film Verleih GmbH v. YouTube LLC and Google Inc – Case C264/19
The German Federal Court of Justice had asked the CJEU to rule on the extent of the information that has to be provided on individuals who have committed copyright infringements when uploading content to YouTube, under Article 8(2)(a) of EC Directive 2004/48 on the enforcement of intellectual property rights. Article 8(2)(a) provides that the copyright owner shall be provided with the names and addresses of alleged infringers to enable them to enforce their rights, and the German court sought clarity on whether this covered the e-mail addresses and telephone numbers of the relevant users, as well as the IP addresses at the time the infringing material was uploaded.
The CJEU found that the term “address” shall be interpreted in the same way throughout the European Union, and that in everyday language it covers only the postal address that is a person’s permanent address or habitual residence. As such Article 8(2)(a) did not include a right to, in respect of a user who has uploaded files which infringe an intellectual property right, his or her email address, telephone number and the IP address used to upload those files or the IP address used when the user’s account was last accessed.
The ECJ ruled that an internet search engine specialising in searching the contents of databases, which copies and indexes the whole or a substantial part of a database freely accessible on the internet and then allows its users to search that database on its own website is “extracting” and “re-utilising” the content of that database within the meaning of Article 7 (1) and (2) of the Database Directive (96/9/EC), and as such is infringing database rights of the database owner.
The ECJ applied the policy objective reasoning it had described in Innoweb (case C-202/12), that the purpose of the sui generis right under the Database Directive was the protection of the investment involved in building a database. Melons’ search engine indexed and copied on its own server the content of websites with job advertisements, then provided its own search facility of that indexed content. The ECJ found that the Melons’ search engine allowed for the simultaneous viewing of the entire content of several databases by means other than that provided for by the database-makers, in a way that impacted the ability of the makers to receive a return on their investment, which fell under the scope of Article 7 (1) and (2) of the Directive. Therefore CV, as the maker of the database, was entitled to prohibit this activity.
Decisions from the ECJ on the database directive are relatively rare, as such this decision, which helps further define the principles enumerated in Innoweb, can offer clarity to providers of specialist online search engines.
Framing is a technique which allows users of Website A to view material from Website B within a frame on Website A such that the user does not necessarily know it originates from Website B. Extending its earlier decision in Svensson & ors v Retriever Sverige AB (Case C-466/12) on hyperlinking, the CJEU found that that embedding, by means of the framing technique, in a third-party website page, works that were protected by copyright and that were made freely accessible to the public with the authorisation of the copyright holder on another website, did not amount to a communication to the public. This was subject to two conditions: firstly that the technical means, such as accessibility through the internet, used to make the works available by the framing technique were the same as those previously used to communicate a protected work to the public on the original website; and secondly that access to the works concerned on the original website was not subject to any restrictive measure.
In a decision also applying Svensson, the UK Court of Appeal held that a service enabling UK users, through a website or app, to access internet music radio stations from around the world had infringed copyright by communicating copyright works to the public where such stations did not have the necessary UK copyright licences: TuneIn Inc v Warner Music UK Ltd & another  EWCA Civ 441.
The UK Court did not accept submissions that it should diverge from the jurisprudence of the CJEU following the departure of the UK from the European Union some months previously, and distinguished the acts in TuneIn from the framing in Svensson. TuneIn provided framed links to streams (which incorporated recordings within the Warner’s repertoire) and crucially combined those streams together with other information, which were then organised and displayed using the metadata in those streams for so long as users chose to listen. As such, the platform went beyond mere framing and infringed Warner’s copyright.
For upcoming developments in IP law, please see our Look Forward article, here.