An Introduction to Intellectual Property for Commercial Lawyers

An Introduction to IP for Commercial Lawyers

Jane Lambert

29 April 2015

Agenda

• Intellectual property and intellectual assets

• International legal framework for IP

• Institutions

• Types of IP

• Choosing the right kind of IP

• Practical tips

• Enforcement

• Contracts relating to IP

Intellectual Property and

Intellectual Assets

• Two concepts are often confused even by

lawyers and it is vital to know the

difference.

• Confusion between the concepts can give

rise to disputes.

Intellectual Property

• Intellectual property (“IP”) is the umbrella

name for the bundle of rights that protect

investment in intellectual assets.

• Examples include patents, trade marks,

registered designs, unregistered design

rights, copyrights, obligations of

confidence and rights to bring

an action for passing off.

Intellectual Assets

• Intellectual assets (“IA”) are the subject of

such legal protection.

• Examples include inventions, novels,

computer programs, performances, films

and goodwill.

• They are assets that give one business a

competitive advantage over

all others.

Intellectual Assets

Intellectual assets (“IA”) fall into the

following categories:

– Brands

– Design

– Technology

– Works of art and literature.

Intellectual Assets

It is often possible to protect the same IA in

different ways:-

• an advance in technology may be

protected by a patent or by the law of

confidence as a trade secret; or

• a brand may be protected by registration

of a trade mark or by the law

of passing off

Intellectual Property

Some IP rights need to be registered with a

national or regional intellectual property office: -

• examples of registered rights include patents,

trade marks and registered designs.

• others arise automatically such as copyrights

and rights in performances,

obligations of confidence

and the right to bring an action

for passing off

Policy

Intellectual property laws balance two conflicting public interests:

– Incentivizing investment in technology, creativity and marketing; and

– Preventing monopolies and promoting competition and freedom of trade.

Proviso vi of the Statute of Monopolies 1623 is an example of the first imperative.

The Statute of Anne 1710 is an example of the second.

International Legal Framework

• International trade and investment is regulated by the Agreement establishing the WTO (“the WTO Agreement”).

• Any country seeking access to the markets of world’s richest nations must adhere to the WTO Agreement.

• The WTO Agreement has several annexes one of which is TRIPS.

• TRIPS is therefore a condition of WTO membership

TRIPS

• WTO member states must adhere to Paris, Berne and Rome Conventions and Washington Treaty.

• They must also provide minimum protection for works of art, brands, geographical indications,technology, semiconductor topographies and undisclosedinformation.

International Treaties

• Paris Convention for the protection of

industrial property 1883

• Berne Convention for the protection of

literary and artistic works 1886

• Rome Convention for the protection of

performers, producers of phonograms and

broadcasting organizations

1961

International Treaties

• Washington Treaty on Intellectual Property

in Respect of Integrated Circuits 1989

• Patent Co-operation Treaty (“PCT”) 1970

• European Patent Convention (“EPC”) 1973

• Madrid Protocol 1989

• Hague Agreement 1925

• Nice Agreement 1957

International Treaties

• WTO member states are required to implement obligations under those treaties into their domestic laws.

• Obligations can be enforced by other member states under dispute settlement procedures annexed to WTO agreement.

• Sometimes also by businessesand individuals under bilateralinvestment treaties (“BITs”).

Implementation in UK

• Registered Designs Act 1949

• Patents Act 1977

• Copyright, Designs and Patents Act 1988

• Trade Marks Act 1994

• Plant Varieties Act 1997

Implementation in EU

• Community trade mark regulation 2009 (“CTM Regulation”) which establishes Community trade mark (“CTM”)

• Community design regulation 2002 which establishes registered Community designs (“RCD”) and unregistered Community designs (“UCD”)

• Community plant variety rightsregulation 1994

Implementation in EU

• Community Patent Convention 1974 signed but never implemented

• Stumbling blocks

– Dispute resolution

– Language

• Unitary Patent

– Agreement on Unified Patent Court

– Regulations on enhanced co-operation

Institutions

• Intellectual Property Office: UK patents, trade marks and designs and implementation of IP Policy

• European Patent Office (“EPO”): established by EPC for registration of European patents on behalf of member states

• OHIM (Office for Harmonization in the InternalMarket): CTM and RCD registry

Institutions

• Plant Varieties Rights Office: part of

DEFRA which enforces Plant Varieties Act

1997

• Community Plant Varieties Office:

enforces Community plant variety rights

• World Intellectual Property

Organization (“WIPO”): UN

specialist agency for IP

Types of IP

• Brands: UK and Community trade marks, passing off, geographical indications

• Design– Decorative: registered designs, RCD, UCD. Copyright

– Functional: unregistered design right

• Technology: patents, tradesecrets, design rights, copyright in programs, database rights, plant breeders’ rights

• Works of art and literature:- Graphic arts and literature: copyright and publication right

• - Performing arts: rights in performances

Choosing the right IPR

• Identify the income streams for the business over the business planning period

• Anticipate threats to those income streams

• Consider counter-measures to those threats most of which will be commercial

• For threats such as plagiarism choose appropriate legal protection

• Ensure funding for enforcement

Enforcement

• Save for bootlegging, counterfeiting, piracy and deliberate copying of registered and registered Community designs which are offences, IPR have to be enforced by civil proceedings.

• CPR Part 63 requires IP actions to be brought in Chancery Division orCounty Court hearing centres with Chancery District Registries

Enforcement

• Within the Chancery Division there are two specialist courts: Patents Court and the Intellectual Property Enterprise Court (“IPEC”).

• Patents Court hears patents, registered and registered Community design, semiconductor topography and plant variety claims.

• IPEC hears claims under £500,000 that can be heard in 2days

Enforcement

• IPEC has a small claims track for claims under £10,000 in which the district judge can award injunctions and orders for delivery up but where costs are limited to a few hundred pounds.

• All other cases can be heard in the Intellectual Property List of theChancery Division or ChanceryCounty Court hearing centres.

Enforcement

• Hearing centres outside London are at Birmingham, Bristol, Caernarfon, Cardiff, Leeds, Liverpool, Manchester, Mold, Preston and Newcastle upon Tyne.

• Mercantile Courts and the Technology and Construction Court occasionally hear IP issues (eg. Intercity Comms vSolanki [2015] EWHC B3 (Mercantile) (27 Feb 2015)

Alternatives to Litigation

• Comptroller-General of Patents, Designs and Trade Marks has jurisdiction over certain patent, trade mark and registered and unregistered design right disputes.

• EPO can hear oppositions to grants of European patents.

• OHIM can hear revocation andinvalidity disputes relating to CTM and RCD.

Alternatives to Litigation

• IPO Examiners can give non-binding opinions on validity, infringement and other disputes relating to patents and will soon be able to give similar opinions in relation to registered and unregistered designs;

• WIPO and other bodies can determine gTLDand certain ccTLDdisputes;

• Nominet can determine certain.uk domain name disputes

Alternatives to Litigation

• WIPO provides arbitration, mediation and

other ADR services.

• IPO provides a mediation service.

• Other arbitrators (including 4-5 Gray’s Inn

Square) provide specialist IP dispute

resolution services

Enforcement

• England and Wales is arguably the most expensive jurisdiction in the world to enforce IP rights.

• In 2003 IPAC found that the average cost of enforcement in France, Germany and Netherlands was €50,000 or less but £1 million in Patents Court and£150,000 – 250,000 in PatentsCounty Court

Enforcement

• Costs have been reduced since 2010 with

£50,000 costs cap for multitrack claims in

IPEC and small claims jurisdiction but

litigation in the rest of the Chancery Division

and the County Court is expensive.

• IP owners should be advised to take out IP

insurance and instruct a watch

service as soon as they apply

for IP rights.

Contracts relating to IP

• Assignments: transfers of IPR (analogous to conveyances of freehold)

• Licences: permission to do what otherwise might be unlawful:– Exclusive: tantamount to assignment and

perhaps analogous to a long lease;

– Sole: licensor retains right touse the IA but agrees not to grant more than one licence;

– Non-exclusive: permission to dowhat would otherwise be unlawful

Usual Clauses in Licences

• Recitals

• Parties

• Definitions and Interpretation

• Grant

• Rights

• Territory

• Term

• Minimum Transactions

Usual Clauses in Licences

• Reporting

• Inspection of records

• Computation of Royalties

• Undertaking to pay royalties

• Termination

• Remedies

• Exclusion on Collateralcontracts, representationsand warranties

Usual Clauses in Licences

• Whole agreement

• Severance

• Force majeure

• Notices and notifications

• Choice of law

• Choice of jurisdiction

Any Questions?

Jane Lambert

4-5 Gray’s Inn Square

London

WC1R 5AH

Tel 020 7404 5252

[email protected]

http://nipclaw.blogspot.co.uk