30 September 2008
28 September 2008
I learned to draft as a pupil at 9 Old Square, the chambers of Robert Megarry, Lenny Hoffmann, Jeremiah Harman and Nick Patten. Unlike the common law chambers where I spent the first 6 months of my pupillage and indeed every set in which I was subsequently a tenant, there were no copies of Atlkin's Court Forms, the Encyclopaedia of Forms and Precedents or any other precedent book in chambers. When I asked why I was told that precedents were at best a distraction to clear thought and clear expression and at worst a potential danger to both the draftsman and his client. Though the ban on precedent books undoubtedly made my pupillage more difficult than it might otherwise have been, I understood the wisdom of it from the start. Indeed, I applied it to my practice and eventually imparted it to my own pupils.
A case transcript that shows just how wise that policy was is the decision of Mr Peter Prescott QC in Oxonica Energy Ltd v Neuftec Ltd  EWHC 2127. Early in his judgment the deputy judge quoted Nicolas Boileau:
My translation, which I prefer to Peter Prescott's, is "He who thinks clearly expresses himself clearly the words coming easily." Mr Prescott urged all draftsmen to frame and display that quotation on their desks. "But too often", he lamented "the opposite precept is followed.
"Bits of legal boilerplate are bolted together so that it is the words that are allowed to shape the concept instead of the other way round. In that regard the invention of the word processor has worked wonders. Sometimes, I fear, it has dispensed with the 'concept' altogether. Misfortune not infrequently follows."
The words that spawned this litigation were a seemingly innocuous definition of "Licensed Products" as
"any product, process or use falling within the scope of claims in the Licensed Application or Licensed Patent".
The agreement in which they appeared was a licence to use a technology that had been developed by both licensor and licensee and which was protected partly by a string of patents and patent applications under the Patent Co-operation Treaty ("PCT") and partly by obligations of confidence that bound the licensee. The licensee had agreed to pay a royalty of 5% of the net sale price received by the licensee on the sale of Licensed Products.
The agreement would have been drawn up when the parties were friends and the only patent application in the contemplation of the negotiators and draftsmen was the application for patent protection in a number of countries using the machinery of the PCT. In the intervening period some patents were granted with very broad claims in some countries and in others patents were granted with very narrow ones. Also during that period, the licensee continued to develop the technology with the result that it could get an improved product that fell outside the claims of the granted patents in several countries though not outside the scope of the claims in the original PCT application. The crunch came when the licensee proposed to supply that new improved product obtained from a source other than the licensor and refused to pay royalties on the sales of that product. The licensor argued that the new product was caught by the definition of Licensed Products because that had been the intention of the parties at the time of their agreement. The licensee replied that it was bound only by the plain words of the agreement and that the patent application had been superseded by a patent that had been granted in terms that did not extend to the improved product.
The agreement contained all sorts of eccentric and redundant provisions, some of which referred to US patent law that had no relevance to the UK, that the deputy judge described as malapropisms. Clearly the agreement had been lifted from precedents - though which precedents his lordship knew not – and "assembled in a strange way". In his lordship's words at paragraph :
"The more I read the document, the more I think: 'A little learning is a dangerous thing'. It contains a number of malapropisms: they cause me to believe that the draftsman was not very familiar with patent practice and terminology. It conveys an impression that he was not always clear in his own mind about what he was doing and, when not clear, allowed his word processor to do his thinking for him."
On reading this case I immediately broke into a cold sweat (as one does) and started to review the technology agreements that I had drafted or helped in the last few days. One, which had been drafted by someone else but which contained a lot of my red ink, was a technology evaluation agreement and licence. The other was a draft assignment between co-inventors in return for a share of receipts. Fortunately, I do think before committing pen to paper or at least finger to keyboard and, after stress testing my drafts again by a number of scenarios, found that they were likely to be robust enough to survive the sort of situation that arose in Oxonica.
Although he clearly agonized over his decision comparing the issue to the conundrum of a Necker cube, Mr Prescott found for the licensior. At paragraph  he said that:
"the proper way to interpret this Licence Deed is to say that "Licensed Products" means things falling within the scope of claims of the Licensed Application or Licensed Patent as the context may require. Likewise, the definitions of "Licensed Application" and "Licensed Patent" should be understood with the qualification as the context may require."
Having regard to the context, his lordship held at paragraph  that royalties are payable on things falling within the scope of claims of the PCT as filed, and nothing else. Accordingly he concluded at paragraph  that royalties were payable in respect of any product, process or use falling within the scope of any claim of the PCT application as appended to the Licence Deed, and nothing else, that the new improved product was a Licensed Product as defined, and attracted royalties accordingly.
The deputy judge reached that conclusion by applying the principles on the construction of contracts that Lord Hoffmann had formulated in Mannai Investment Co Ltd v. Eagle Star Assurance  UKHL 19 and Investors Compensation Scheme v. West Bromwich Building Society  UKHL 28;  1 All ER 98;  1 WLR 896. Those principles essentially mean that the plain words of an instrument need not be followed slavishly if the result would be absurd, manifestly unjust or contrary to the obvious intention of the parties. Patent lawyers will see echoes of that approach in a whole string of Lenny judgments on the construction of patent claims from Improver Corporation v Remington Consumer Product Limited  F.S.R. 181 to Kirin-Amgen Inc and Others v Hoechst Marion Roussel Ltd and others  RPC 169,  RPC 9, (2005) 28(7) IPD 28049,  UKHL 46, 2005] 1 All ER 667. Indeed Lord Hoffmann's impact on patent law has been very much wider. Though essentially a general chancery practitioner in 9 Old Square, he has demystified much of English patent law on such thorny topics as sufficiency and the test for obviousness from Biogen Inc v. Medeva Plc  RPC 1,  UKHL 18, (1997) 38 BMLR 149 to Conor Medsystems Inc v Angiotech Pharmaceuticals Inc and Others  UKHL 49 (9 July 2008). He had been my pupil master's pupil master and may well have been responsible for master's and my own caution in handling other peoples' precedents. He was a rising young silk when I was a pupil but it was clear even to me that he was heading straight for the House of Lords. I used to take a lot of notice of what he said and did and I like to think that some of his thinking has trickled down to me and through me to my own pupils and tenants.
One of the things that I learned early in my career – possibly form or at least through Lenny – was that an agreement or terms and conditions are tools for managing risk. But they are only tools and not a sufficient protection in themselves. Terms and conditions, for instance, can be compared to a medieval castle which typically had three lines of defence, a moat or commanding position on a rocky outcrop, a curtain wall and the keep itself. Most attacks were repelled at the moat or outcrop. If they made it to the curtain wall they were met by arrows and boiling oil. If the attackers got as far as the keep, the castle was in trouble because hand-to-hand fighting was all that was left and we all know what happened to Macbeth when he met McDuff. So it is with Ts & Cs. Best practice is the first line of defence. Get that right – that is to say, give the customer what he or she wants - and you won't go far wrong. Insurance is the second line. If you screw up insurance allows you to compensate your customer or injured party. Terms and conditions manage the risk that arises form unforeseen screw-ups that cannot adequately be insured against. Anything more risks being struck down by the Unfair Contract Terms Act 1977 or the common law. The castle analogy applies to all sorts of other legal instruments such as confidentiality agreements. Public access clients are always asking me for a standard NDA and sulk when I refuse to give them one or quote for doing a proper job. But there it is.
So, folks, the choice is clear. Get a cut-price (and maybe not always that much cut price) from someone in factory chambers or a high street or country law firm with a flash website and glossy brochure and risk ending up in court like Oxonica and Neuftec or pay a bit more to go to a member of the IP Bar Association, the Intellectual Property Lawyers Association or a specialist eligible to join one of those associations such as one of my panellists and get an instrument that says what you intend to say because the draftsman has bothered to take some trouble over the draft and knows what he or she is doing.□
25 September 2008
He seems to have got off to a good start with his acceptance speech. I wish him all the best.
24 September 2008
"A stent for expanding the lumen of a body passageway, comprising a generally tubular structure coated with a composition comprising an anti-angiogenic factor and a polymeric carrier, the factor being anti-angiogenic by the CAM assay, and wherein said anti-angiogenic factor is taxol, or an analogue or derivative thereof."
"The disclosure is of no more than this. The idea is not shown to work (either in humans or in animals), nor to work to any particular extent, nor to work with any particular polymer nor with any particular amount of drug. The invention thus lies in the idea of trying some, one or more, taxol/polymer combinations to determine whether restenosis can thereby be treated. It is at this level of generality that inventiveness must be assessed."
"an illegitimate amalgam of the requirements of inventiveness (article 56 of the EPC) and either sufficiency (article 83) or support (article 84) or both".
21 September 2008
A swimming pool at a country club was drained and various props including a white Rolls Royce motor car assembled for a photograph of a well-known group of musicians for reproduction on their album cover. Although the public was not admitted to the session certain fans of the group who happened to be there were allowed to photograph the scene before official pictures were taken. A freelance photographer who was booked into the club photographed the scene during the session. One of his pictures, which was similar to the one that appeared on the group's album, were published in a national newspaper and offered for sale to the public as a poster. The musician who had arranged the scene together with the group's record company and licensee sued for infringement of copyright and breach of confidence and moved for interlocutory injunction restraining further publication until trial.
Lloyd J found that there was an arguable case in confidence but not in copyright. The arrangement of the props was neither a sculpture nor a collage. Its composition was intrinsically ephemeral its continued existence being in the form of a photograph.
An assignment of copyright is an outright transfer of some or all of the rights of a copyright owner. S. 90 (2) of the Copyright, Designs and Patents Act 1988 provides that an assignment may be limited to one or more, but not all, of the things the copyright owner has the exclusive right to do, or to part, but not the whole, of the period for which the copyright is to subsist. S. 91 (1) permits authors or others who would become first owners of copyrights ("prospective owners") that will or may come into existence in respect of a future work or class of works or on the occurrence of a future event ("future copyrights") to agree to assign such future copyright (wholly or partially) to another person.
S. 90 (3) of the CDPA provides that an assignment of copyright is not effective unless it is in writing signed by or on behalf of the assignor. However, a copyright, like any other species of property, can be held on trust. A trust can come into being impliedly or by operation of law as well as expressly. A company that commissions a graphic artist to do some art work for it is usually beneficially entitled to the copyright in the work as is a party to a joint venture as in IBCOS Computers Ltd. v Barclays Mercantile Highland Finance Ltd.  FSR 275 and Lakeview Computers Ltd. v Steadman and others(1999) CA. unreported 28 November.
Moral rights are not assignable (s.94 CDPA). One of the occasions upon which the right of paternity may be asserted is upon an assignment of copyright. It may be done by including a statement that the author or director asserts his right to be identified in relation to the work into the assignment (s.78 (2) (a) CDPA).
This note that I first wrote in 1999 on the decision of Park J in
whether copyright subsists in a film script which was based substantially on Book IX of Homer's Odyssey;
if it did, whether it was infringed by making an animated film from the script; and
whether the distribution of that film without attributing authorship to the scriptwriters infringed the writers' moral rights.
There were many other issues but they were concerned with the fracts rather than the law.
The case arose from a dispute between two Greek Cypriots, Andrew Christoffer ("Mr Christoffer"), a freelance scriptwriter, and Frixos Constantine ("Mr Constantine"), a director and controlling shareholder of Poseidon Film Distributors Ltd. ("Poseidon"). Mr. Christoffer introduced himself to Mr Constantine either in 1987 or 1991. Mr Constantine took to Mr. Christoffer and offered him a chance to show what he could do. Some time before the 20 Feb 1992 Mr Christoffer wrote a script for a short animated television film of the Cyclops story from the Odyssey which came into Poseidon's possession. He did not do much more work on that script after meeting Mr. Constantine but worked on two other projects for Poseidon between late 1992 or early 1993 and March 1995. One project was called Global Bears Rescue ("GBR"). The other was a rewrite of a film script called "The Diploma". Mr Christoffer never became an employee of Poseidon but worked freelance from Poseidon's offices receiving various fees for his services. Mr. Christoffer and Mr. Constantine quarrelled in March 1995 as a result of which Mr Christoffer cleared his desk and walked out of Poesidon's offices.
Some time before the quarrel Mr Constantine proposed an Odyssey series to BBC Wales and Channel 4. He sent Mr Christoffer's script to the BBC to indicate what the episodes would be like. On 17 Feb 1994 the BBC commissioned Poseidon to produce a 15-minute pilot and agreed to make various payments, including £5,000 towards research and script development.
Mr Christoffer knew very little about that project but he redrafted his script early in 1994. Poseidon commissioned an artist called Simon Bradfield ("Mr. Bradfield") to draw storyboards from one of Mr Christoffers scripts. A company called Vilanima drew a new set of storyboards based on Mr Bradfield's while the script was rewritten by a writer called Jack Pitman ("Mr. Pitman"). Mr. Pitman testified that Mr Constantine gave him a script that had been written by another writer and was asked to rework it, in particular by livening up the dialogue. His instructions were: Dont play with the plot. Just do something with the dialogue. Vilanima made an animated film from its screenplays and Mr. Pitman's script.
A fundamental condition of the subsistence of copyright in a literary, dramatic, musical or artistic work is originality. Originality means the application of independent skill and labour and can include reworking existing material. Nothing illustrates the point more appositely in view of the subject matter of the case than the following quotation from Kipling chosen by Sir Hugh Laddie, Mr. Peter Prescott and Ms. Mary Vitoria (see pages 46 and 80 of volume 1 of the second edition of their book "The Modern Law of Copyright and Design" (Butterworths, London):
"When 'Omer smote 'is bloomin' lyre, '
E'd 'eard men sing by land an' sea;
An' what 'e thought 'e might require,
'E went an' took - the same as me.
They knew 'e stole: 'e knew they knowed.
They didn't tell, nor make a fuss,
But winked at 'Omer down the road,
An' 'e winked back - the same as us."
Sadly, Park J passed up the opportunity to comment on or even refer to this quotation. He observed:
"...... the fact that the original story of the Cyclops was written by Homer (whoever he may have been) and was presumably an original work when it was written ...."
did not prevent a reworking of tht work by a modern writer from being itself an original work within the meaning of the Copyright, Designs and Patents Act 1988. His lordship explained that original in this context does not imply an examination of a works literary quality but rather whether it originated from the person who claims to be the author:
"Mr Christoffer's script originated from him, and is not prevented from having done so by the fact that there is another sense in which it can be said to have originated from Homer."
The judge expressed no view on whether the originality requirement would have been met had Mr Christoffer done nothing more than write a summary of the story but found that Mr Christoffer had done more than that. The core of his script was the same as Book IX of the Odyssey, but there were many variations of detail. In the judge's view, setting out someone else's narrative in the form of a script suitable for filming manifestly involved original work in that it created a work which did not exist before.
An observation with which Sir Hugh and his co-authors would hardly disagree in view of their section headed "The idea/expression fallacy" (page 61 of volume 1) was that:
"Although there is no copyright in an idea, but rather the copyright is confined to the expression of the idea, it does not follow that, merely because the words in the final script (Mr Pitman's script) were different from Mr Christoffer's words, therefore there can have been no copying. In the context of a literary work the concept of copying embraces taking the content of the work, or of a substantial part of it, and reproducing it, whether or not the alleged infringer reproduces the content by using the original authors words or by using his own words."
Relying on Ravenscroft v Herbert  RPC 193 and Harman Pictures NV v Osborne 1 WLR 723, the judge found that Poseidon had infringed Mr. Christoffer's copyright in his script by causing an animated film to be made from it. The infringing acts included direct and indirect copying and adaptation of Mr Christoffers script both through the storyboards and the script. In the case of the storyboards, the chain ran from Mr Christoffer's script to Mr Bradfield's storyboards, from Mr. Bradfield's storyboards to Vilanima's, and from Vilanima's storyboards to the animated pictures in the film. In the case of the script the chain ran from Mr Christoffer's script to Mr Pitman's script and then on to the finished film.
The final intellectual property issue was whether Poseidon had infringed the moral rights of Mr.Christoffer and another writer to be identified as authors of several GBR scripts. S.77 of the 1988 Act entitles the author of a copyright work to be identified as such when the work is broadcast provided that he asserts his right in accordance with s.78. S.78(2) requires an author's right of identification to be asserted either in an assignment of the copyright or by some other written instrument signed by the author. The judge observed that one of these alternatives must be satisfied whether the right is asserted generally or whether in relation to any specified act or description of acts. He found that Mr Christoffer and his co-author had not asserted their rights in either of those ways. Therefore, the action against Poseidon for infringement of their moral rights failed.
A detail of this case that is not entirely clear is precisely what exactly the defendants took. There can be no infringement if the material was out of copyright, such as the transcript of the trial of Oscar Wild in Warwick Film Productions Ltd. v Eisinger  1 Ch 508, as that would not constitute a substantial part of the copyright work. Park J said that the core of Mr. Christoffer's script was the same as Homer but there were many variations of detail but he also found that "the detailed text" of Mr. Pitman's scrip was "not the same as the detailed text for any of the versions of the script which Mr. Christoffer produced." Mr. Pitman was instructed in terms not to alter the plot but simply to alter the dialogue.
The Copyright, Designs and Patents Act 1988 ("CDPA") proscribes 8 separate acts of secondary infringement:
importing infringing copies
possessing or dealing with such copies
providing means for making such copies
transmitting a copyright work over a telecommunications system
permitting premises to be used for an infringing performance
providing apparatus for such infringement
permitting such apparatus to be brought onto premises, and
supplying a sound recording or film for an infringing performance.
An essential ingredient of all those acts is some actual or imputed knowledge primary infringement of copyright.
Importing Infringing Copies
S.22 of the CDPA provides that copyright is infringed by importing into the United Kingdom otherwise than for private and domestic use an article in the knowledge or with reason to believe that it is an infringing copy of a copyright work. An "infringing copy" is defined by s.27 (2) as an article whose making constituted an infringement of copyright in the work in question. Sub-section (3), which was for a time repealed by reg. 6 of the Copyright (Computer Programs) Regulations 1992 but restored by reg. 9 (4) of the Copyright and Related Rights Regulations 1996, further provides that an article is also an infringing copy if it has been or is proposed to be imported into the United Kingdom, and its making in the United Kingdom would have constituted an infringement of the copyright in the work in question, or a breach of an exclusive licence agreement relating to that work. Finally, sub-section (5) extends the definition of infringing copy to various copies referred to in certain sections providing exceptions to the restricted acts.
Possessing or Dealing with Infringing Copies
The following acts are also secondary infringements by virtue of s.23 of the CDPA:
possessing in the course of a business,
selling or letting for hire, offering or exposing for sale or hire,
in the course of a business exhibiting in public or
distributing otherwise than in the course of a business to such an extent as to affect prejudicially the owner of the copyright
an article which is, and which is known to be, or where there is reason to believe it to be, an infringing copy of a copyright work without the licence of the copyright owner.
Providing Means for Making Infringing Copies
S.24 (1) of the CDPA provides that copyright in a work is also infringed by making, importing into the United Kingdom, possessing in the course of a business or selling for hire or offering or exposing for sale or hire an article specifically designed or adapted for making copies of a copyright work knowing or having reason to believe that it is to be used to make such infringing copies without the licence of the copyright owner.
Transmitting a Work over a Telecommunications System
The next sub-section also provides that copyright in a work is infringed by transmitting the work without the licence of the copyright owner by means of a telecommunications system, otherwise than by broadcasting, knowing or having reason to believe that infringing copies of the work will be made by means of the reception of the transmission in the United Kingdom or elsewhere.
Permitting Premises to be used for an Infringing Performance
Where the copyright in a literary, dramatic or musical work is infringed by a performance at a place of public entertainment - which includes premises which are occupied mainly for other purposes but are from time to time made available for hire for the purposes of public entertainment - any person giving permission for that place to be used for the performance is liable for the infringement by virtue of s. 25 (1) of the CDPA unless when he or she believed on reasonable grounds that the performance would not infringe copyright when permission was granted.
Providing Apparatus for an Infringing Performance
Similarly, s. 26 (1) provides that where copyright in a work is infringed by a public performance of the work, or by the playing or showing of the work in public, copyright is infringed by supplying apparatus, or any substantial part of such apparatus, for playing sound recordings, showing films, or receiving visual images or sounds conveyed by electronic means, in the knowledge or with reason to believe that such apparatus was likely to be so used to infringe copyright. In the case of apparatus whose normal use involves public performance, playing or showing, it must be shown that the supplier did not believe on reasonable grounds that the apparatus would not be used to infringe copyright.
Allowing such Apparatus to be brought onto Premises
It is also an infringement under s. 26 (3) to permit such apparatus to be brought onto premises if the the occupier of those premises knew or had reason to believe them that the apparatus was likely to be used as to infringe copyright when giving such permission.
Supplying a Sound Recording or Film for an Infringing Performance
Finally, it is an infringement under s. 26 (4) to supply a sound recording or film that is used to infringe copyright if the supplier knew or had reason to believe that he or she supplied (or a copy made directly or indirectly from it) was likely to be used to infringe copyright.
See Also "What is meant by Primary Infringement"
S. 16 (3) (a) of the Copyright, Designs and Patents Act 1988 provides that references in Part I of the Act to the doing of an act restricted by the copyright in a work are to the doing of it in relation to the work as a whole or any substantial part of it. The question what is a "substantial part" for the purposes of this Act has been considered by the House of Lords on no less than three occasions.
In Ladbroke (Football) Ltd. v. William Hill (Football) Ltd.  1 W.L.R. 273 their lordships emphasized that the test of substantiality was qualitative rather than quantitative. A case that illustrates that point better than most is Warwick Film Productions Ltd. v Eisinger  1 Ch 508 where the volume of material that had been copied was considerable but such material did not constitute a substantial part of the claimant's work because it had itself been copied from an earlier work. The question then arises, as Lord Hoffmann observed at paragraph  of Newspaper Licensing Agency Limited v. Marks and Spencer Plc  UKHL 38 of what quality is one looking for? In his view it must be answered by referring to the reason why the work is given copyright protection. In literary copyright, where copyright is conferred irrespective of literary merit upon an original literary work, the quality relevant for the purposes of substantiality is the literary originality of that which has been copied. In an artistic work, it is the artistic originality of that which has been copied.
Different Types of Substantiality
In Designer Guild Limited v. Russell Williams (Textiles) Limited  UKHL 58 Lord Scott of Foscote said that s.16 (3) may come into play in two quite different types of case. One is where an identifiable part of the whole, but not the whole, has been copied such as a section of a picture, a sentence or two, or even a phrase, from a poem or book, or a bar or two of a piece of music. The other is where the copying has not been exact and where the copying has been with modifications such as the translation of a book or the adaptation of a novel. In the first type of case, the question whether the copying of the part constitutes an infringement depends on the qualitative importance of the part that has been copied, assessed in relation to the copyright work as a whole. His lordship endorsed the test proposed by Laddie, Prescott and Vitoria in the second edition of The Modern Law of Copyright and Designs at paragraph 2-108 of whether the infringer has incorporated a substantial part of the independent skill and labour of the original author.