Mills & Reeve: Technology Law Update

Bye bye England: what will happen to Community Trade Marks and Community Registered Designs if the UK or another Member State says “Good-bye”?

With the recent debates about an in-out EU referendum rumbling on, the relationship between the UK and the EU is under continuing scrutiny. The political and economic issues of a withdrawal may take newspaper headlines, but the impact on Community trade marks and registered designs should not be forgotten either.

It has become increasingly common for businesses, instead of registering trade marks or designs on a national basis within the EU, instead to register a Community trade mark or design – this is a single registration which covers all EU member states  and which has been praised for administrative ease and cost effectiveness.  

Whilst Community trade mark and design legislation provides for the extension of Community trade mark and design protection to new countries joining the EU, the possibility of any country leaving the EU appears to have been regarded as inconceivable. The legislation is silent to what would happen if, for example, the UK were to leave the European Union.  

After Ireland left the United Kingdom in 1921, owners of existing UK trade marks and registered design were entitled, on payment of a fee and within 6 months of the commencement of the relevant legislation, to register their UK trade mark or design as an Irish trade mark or design (without any change in the priority date).

If a similar procedure were to apply in respect of CTMs and CRDs on the UK leaving the EU, this would place the onus on owners to apply to have their trade marks and designs separately registered in the UK, failing which they would lose protection in the UK (unless there was already a corresponding UK registration).  Apart from placing a considerable administrative burden on the UK IP Office, this could also result in significant costs to owners of large portfolios, who would have to pay additional registration and renewal fees.

Other alternatives include (i) allowing existing CTMs and CRDs to continue to apply to the UK until they are up for renewal; or (ii) automatically converting existing CTMs and CRDs into UK registered trade marks and designs administered by the UK IP Office.

But that bit is actually the easy bit when you consider the other issues that will need to be resolved:

1. Exhaustion of rights

Community trade marks and design legislation provides that owners of CTMs and CRDs will not be entitled to prohibit their use in relation to products which have been put on the market in the EU by them or with their consent.  This is known as the “exhaustion of rights”.

• If the UK were to leave the EU, would owners of the “descendant” UK trade marks be entitled to prohibit the importation into and sale in the UK of products, which they first placed on the market elsewhere in the EU Member States? 

• If so, would it be relevant whether these products had first been placed on the market before or after the UK left the EU?

• What would happen if ownership of the “descendant” UK trade mark were to be transferred to an entity different from the owner of the corresponding CTM?  Would a trade mark owner be entitled to oppose the importation of products lawfully bearing an identical UK trade mark into EU Member States, even though that trade mark originally belonged to a subsidiary or affiliated company?

2. Licences

• What would happen to EU-wide licences of CTMs and CRDs? Would the licence also continue to apply  to the “descendant” rights in the withdrawing state and would the licensor be prohibited from transferring its ownership to another party? 

• How would a licence expressed to be granted in respect of a CTM or CRD even be read after a split?

And a final, more economic point for brand owners to note - if the UK does end up outside the EU, however CTMs and CRDs are dealt with, it is more than likely that businesses wishing to protect their trade marks and designs in Europe will be faced with additional registration costs. 

Written by Richard Plaistowe

Does the UK need more investment in R&D?

I've just had an article (written by the BBC's tech correspondent Rory Cellan-Jones) pointed out to me, which questions why the UK, and Cambridge in particular, doesn't have more 'world-class technology companies', given its big role in the history of the computer.

The article does go on to mention some big Cambridge success stories (ARM, CSR and Autonomy) and how the introduction of the Raspberry Pi may be the first step to ensuring a new generation of computer science enthusiasts, but the basic suggestion seems to be that there is not enough investment in the UK in:

1. R&D generally (1.7% of GDP in the UK, as compared to 2.8% in Germany and 2.9% in the United States); and

2. Tech companies - once they want to move on from small start up to the next stage, they are often 'selling up to big American firms' (this from Dr Mike Lynch, Autonomy's founder who sold on to HP of course).

So, is there anything that can be done to improve this situation? One suggestion was for the UK government to 'think more about using its own procurement budgets to help UK firms in the way the US did'. This may however be difficult - you'll probably be aware that the European Commission recently failed to approve a planned tax break for the video games industry (for games where more than 80% of production was in the UK) on the grounds that 'no obvious market failure' in competition needed to be addressed (see article here). On that basis, would an attempt by the government to ensure more business for UK tech companies be seen by the EU as an attempt to unfairly distort competition?

We'd like to hear your thoughts on this...

Younger UK IPO Mediation Service

Lord Younger, the Intellectual Property Minister, announced today that the UK IPO Mediation Service, which was established in 2006, is to be modernised.  The aim if to make resolving intellectual property disputes outside of the Courts cheaper and quicker for small businesses.

Some of the changes include a reduction in mediation fees, options for mediation which include short telephone sessions and access to mediators who specialise in a wider range.

The UK IPO’s Mediation Service resources can be accessed here.

IP-related business support initiatives

As the UK works its way through the economic downturn, the Government are introducing lots of incentives to try to encourage entrepreneurs and businesses to set up shop and stay in the UK and, more importantly, to pay UK taxes. 

The UK IPO has recently published a factsheet providing an overview of the IP-related business support initiatives and financial incentives available to SMEs in the UK, which includes information in relation to:

-          The Growth Accelerator

-          The Patent Box

-          The Design Council’s Design Leadership Programme

-          UKTI’s Passport to Export

-          The Technology Strategy Board’s Catapult Centres, SMART initiative and Innovation Vouchers

-          The Manufacturing Advisory Service

-          Pro Bono advice clinics organised by the Chartered Institute of Patent Attorneys and the Institute of Trade Mark Attorneys

-          The EPO Patent Libraries

-          The British Library’s Business and IP Centre

-          and the IPO’s own IP Masterclasses, Get It Right First Time seminars, IP Healthchecks, IP Insight newsletters, Mediation Service, Opinion Service, and IP Audit Scheme.

Anything ICANN do for trade mark protection

Yesterday evening I attended a talk by Tony Willoughby on domain name disputes, which gave an interesting insight into the process of enforcing your trade mark rights under the current Nominet and ICANN procedures. Prior to the talk the topic of conversation included the introduction of new generic top-level domains, or gTLDs, by ICANN and the potential impact on trade mark owners (and their purses) an increased number of suffixes might have.

Following the announcement in June 2011 that gTLDs were going to be opened up to .anything, .everything and .everyone, as summarised on our previous Naked Law blog post, ICANN announced earlier this week that there will be a further opportunity for trade mark owners to protect their rights.

From 26 March 2013, rights holders will be able to submit their trade marks for verification to the Trademark Clearinghouse. Once independently verified by the Clearinghouse the trade mark owner will have the opportunity to register their trade marks as domain names for each new gTLD before the general public. They will also benefit from an alert service which will notify the trade mark owner when a domain name is registered that matched the trade mark in the Clearinghouse register.

The proposed cost is $150 for recording one trade mark for one year. Trade mark owners are however likely to face additional costs if they decide to register additional domains and the alerts service appears to work like current trade mark watch services, leaving it up to the trade mark owner to decide whether to pursue the registrant in order to obtain the offending domain name.

The EU and US - a new special (economic) relationship?

This afternoon, Brussels and Washington announced that the EU and the US are intending to launch negotiations on a trade and investment agreement which could result in the biggest bilateral trade deal ever negotiated. The negotiations will commence once the relevant internal procedures for approval have been completed.

The press release provides a broad outline of the three main areas which the parties are seeking to negotiate; market access, regulatory issues and non-tariff barriers and addressing shared global challenges and opportunities in the 21st century. Changes to the regulatory frameworks in particular could potentially have a significant impact on technology and life sciences businesses. If the EU and US can find common ground on standards and procedures and reach regulatory compatibility, for example in relation to pharmaceuticals or medical devices, the need to comply with two sets of regulatory approvals for products and the associated costs to businesses will be reduced.

A joint statement from United States President Barack Obama, European Council President Herman Van Rompuy and European Commission President José Manuel Barroso can be found here.

Freedom day for copyright? Government to introduce wider exceptions to infringement

The Business Secretary, Vince Cable has been active again -- announcing proposed changes to allow more "fair use" of copyright works.

The changes, set out in a report from the UK IPO, "Modernising Copyright: a modern, robust and flexible framework", on which the IPO has already consulted, will permit more extensive use of copyright works without adversely affecting copyright owners.  Some key elements:

• Home users will be permitted to store on multiple media/devices -- but not to share their copies with others (even in their family);
• Educational use will be extended to more work types and permitted to education more generally rather than just designated educational establishments -- and there will be significantly increased freedom for digital use of content in education, including provision over distance learning programmes
• Use for research in non-commercial data mining and similar activities  (as well as private study) will not infringe, widening scope for exploring information stored in copyright works -- but whether the non-commercial restriction will be wide enough to permit practical research is an open question still;
• The role of the Secretary of State in opening up opportunities where copyright owners use DRM or other technological protection means to prevent these activities, has been re-emphasised, as has the opportunity for owners to take advantage of this by offering "DRM lite" at a higher price.
• Several other changes are proposed, including making it easier to modify and adapt copyright works for use by disabled people.

Small beer perhaps, but there is not all that much the UK Government can do when one takes into account its commitments under international conventions, and there are some significant opportunities here.  Some comments:

• Media shifting for private users will make many things private users already do legal -- but there will probably be lots more things that private users feel are fair game which will still not be fair use. 
• The widening exceptions for educational use will help wider education - by museums and non-conventional education establishments; and remove some irritating idiosyncrasies which will make it easier to produce more exciting teaching materials -- but, as more educational institutions look to monetise their digital teaching opportunities, there will (not surprisingly) be significant obstacles to selling their teaching materials;
• Opportunities for digital mining for non-commercial research could open up significant avenues of research, and researchers could be taking account of this now for future grant applications for academic research -- but what happens if they then want to make commercial use of the results?  Until it is clear what the boundary between non-commercial and commercial is, can one be sure that the rsults of the reseach can be used?
• Users of DRM -- digital rights management or other technological copy protection measures, should look at the opportunities for producing separate DRM protected and DRM relaxed products to take advantage of what happens when users would like a product which they can media shift, or annotate for disabled people, or use in a wider educational context.  And DRM appliers can probably take advantage of this now, even while there is uncertainty as to how the legislation may work out.

We look forward to seeing and commenting on the detailed proposals. 

Trade secrets are being discussed EU-wide...

Hot on the heels of the Information Commissioner (see below), the European Commission has anounced a public consultation to collect views about how business and research know-how is protected across the EU (perhaps with one eye on a New Year's Resolution). 

About time, some might say.  As the Commission itself has noted, keeping vaulable information secret is often the only or most effective way that businesses have to protect their intellectual property - after all, not every good idea is patentable.  The Commission has picked up concerns regarding the effectiveness of legal protection against the misuse of confidential information, which is currently only regulated at national level (without harmonisation across the EU), and decided to analyse the situation.

Changes to the laws on the protection of confidential information are likely to be highly relevant to the technology sector.  You can follow, and contribute to, this consulation on the Europa website between now and 8 March 2013.

ICO sets the records straight - businesses can be fined for not keeping theirs in order

Monetary penalties from the ICO in relation to breaches of the Data Protection Act 1998 (“DPA”) have become associated with organisations losing significant amounts of personal data, sometimes in more obscure ways such as a disposal in a supermarket car park recycling bin. Yesterday the ICO announced that it had served its first monetary penalty which did not relate to a data loss. Prudential was served with a monetary penalty of £50,000 for mistakenly merging records of two customers who shared the same first name, surname and date of birth. In addition, Prudential failed to rectify its mistake despite being contacted on several occasions.

This decision should serve as a reminder that businesses should ensure that any personal data held, be it of employees or customers, is accurate and up-to-date (in order to comply with Principle 4 of the DPA) and that they ensure appropriate follow-up action is taken upon receipt of notifications by customers which state that details held about them are incorrect.

Notification process for data controllers - ICO consultation

The current notification system for data controllers and the look of the register may be set to change in the new year. The Information Commissioner's Office has launched a consultation for the public and data controllers to obtain their views on how the notification process can be made easier and the register more user friendly. The consultation closes at 5pm on 30 November and the consultation documents can be found on the ICO website here. The ICO will then aim to publish a summary of the responses and the ICO's reaction to them by the end of January 2013.