17 January 2010

Patents: Fisher Rosemount Systems Inc.'s Application

The first decision from the Comptroller for 2010 offers an interesting discussion on how to assess an invention's technical contribution when applying the Aerotel/Macrossan and Symbian guidelines.

In Fisher Rosemount Systenms Inc. Application BL 0/003/10 12 Jan 2010 the applicant appealed against the examiner's report that the claims of the invention were excluded from patentability because they related to a computer program as such. The invention related to a process control system and in particular to a method of accessing process control data, viewing and modifying that data and using the modified data to update control programs within the system. The invention described a method by which the operator is able to develop and to add functionality to his or her own applications at any time without the need to rewrite or compile the control system software. The applicant claimed:
"A system for accessing process control data, comprising:
  • a pre-generated partial class that includes pre-generated class elements associated with accessing process control data;
  • a user-generated partial class associated with the pre-generated partial class and having user-defined class elements that can access process control data via the pre-generated class elements;
  • a user interface configured to instantiate a client object based on the pre-generated partial class and the user-generated partial class and configured to access process control data based on the pre-generated and user-defined class elements; and
  • a client model configured to load an object handle and a real object associated with the client object and communicate process control data between the client object and a server via the object handle and the real object."
In his skeleton argument, the applicant's patent agent offered the following alternative claim:
"A process control system having a process control machine and a client machine, the process control machine being communicatively coupled to control devices in a process control system, the process control machine being operable to automate and manage the process control system in accordance with process control data, the process control system further comprising a system for providing process control data, comprising:
  • a pre-generated partial class that includes pre-generated class elements associated with accessing process control data;
  • a user-generated partial class associated with the pre-generated partial class and having user-defined class elements that can access process control data via the pre-generated class elements;
  • a user interface configured to instantiate a client object based on the pre-generated partial class and the user-generated partial class and configured to access process control data based on the pre-generated and user-defined class elements; and
  • a client model configured to load an object handle and a real object associated with the client object and communicate process control data between the client object and a server via the object handle and the real object,
the client machine being operable to generate an output in accordance with the communicated process control data."

The hearing officer rejected both claims.

As for the claim as originally drafted, Mr. Micklewright said:
"In my view the contribution relates to a system for enabling a user to access process control data. This is achieved by instantiating a client object based on pre-generated and user-generated partial classes. The user-generated partial class elements access the process control data via the pre-generated class elements. The client object has associated with it a real object which communicates process control data between a server and the client object via an object handle. Dr Lockey contends that the contribution relates to a new process control system. This does not however seem to me to be the case except to the extent that the means for accessing process control data is considered part of a process control system. The same process control data is used to control the same process plant. The only thing that is different is the way a user accesses the process control data."
The alternative claim provided more difficulty because it claimed "a process control system" rather than a "system for accessing process control data" and the process control system had a process control machine coupled to control devices in the process control system and a client machine. Relying on BL 0/150/07 where the hearing officer found that a first version of claim 1 was excluded but an alternative version was not, the applicant argued that the invention could be considered a system for monitoring a process control system as it could retrieve real-time process control data. The hearing officer disagreed:
"I am not convinced the same arguments apply in the present case. The invention does not include any direct manipulation or control of specific features or entities of the physical process that could be said to relate to monitoring of the process. Rather it sets out a general scheme for making it easier for a user to access process control data. The invention in BL O/150/07 related to actual manipulation of entities of the physical process. The present invention does not have such a function. Moreover the features added into the alternative version of claim 1 are all entirely standard features of process control systems such as those discussed in the discussion of the prior art at the beginning of the divisional application. They therefore cannot be said to contribute to the actual contribution made by the claim. It is therefore immaterial in this case as to whether the claim is directed towards a process control system or to a system for accessing process control data. Moreover the fact that an output is generated does not add to the actual contribution. In BL O/150/07 the output related very specifically to the flow analysis. In the present case the output is non-specific and in fact all the claim says about this output is that it is “in accordance with the communicated process control data”. The substantive features of the claim, namely the use of pre-generated and user-generated partial classes to instantiate client objects associated with real objects to access process control data, are the same. I therefore conclude that the contributions made by both the first version of claim 1 and the alternative version of claim 1 are in substance the same."
Mr Micklewright could find nothing in the invention that took it outside the excluded field.

15 January 2010

Costs: Why not abolish the Patents County Court?

I have just finished reading Chapter 24 of Sir Rupert Jackson's final report on costs (Review of Civil Litigation Costs: Final Report) which was published yesterday. It is a good report and I welcome its proposals for intellectual property.

However, back in July 2009 I proposed a more radical solution to the IP Bar Association and the working group of the Intellectual Property Court Users' Committee ("IPCUC") that was set up to formulate proposals for the reform of the Patents County Court. IPCUC did not see fit to include my suggestions in its submissions to Jackson (which is understandable since they call for the abolition of the Patents County Court and an extension and reform of the Comptroller's jurisdiction) but I still they think they have merit.

As Jackson's recommendations will require primary legislation there will have to be a debate in Parliament and perhaps elsewhere on how best to improve intellectual property dispute resolution in the UK (or at least England and Wales). I publish my submissions now in the hope that they may be able to inform that debate.

"Proposals for Reform of the Patents County Court


Jane Lambert

I agree with the Working Group that “at present SMEs are denied access to justice in IP cases because they are priced out of the system” and that “if litigation were made affordable, many more IP claims would be brought and defended.” I am also of opinion that Her Majesty’s government fails to comply with art 41 of TRIPs and art 3 of the Enforcement Directive by not providing cost-effective procedures for resolving infringement disputes and restricting access to justice to SMEs. I endorse the conclusion that any reformed procedure should be cheaper and that costs should be limited and predictable but I strongly disagree that the way forward is to re-launch the Patents County Court with its own rules of procedure that would differ in many respects from the Civil Procedure Rules.

Those objectives could be achieved better by abolishing the Patents County Court altogether and transferring its functions to the Comptroller-General of Patents, Designs and Trade Marks (“the comptroller”)[1] and harmonizing the procedures of the patents, trade marks and design tribunals. Primary legislation would be required to

· delete the words “and any other person may by agreement with each other” form s.61 (3) of the Patents Act 1977;[2] and

· amend the Registered Designs Act 1949, the Copyright Designs and Patents Act 1988, the Trade Marks Act 1994 and the statutory instruments implementing the Community Trade Mark and Community Design Regulations in the UK to enable the comptroller to hear any claim that falls within paragraphs 2.2 [3] and 18.1 ;[4] of the Part 63 Practice Direction;

· harmonize the practice of the existing IPO tribunals by for example introducing the Appointed Person into patents, designs and other intellectual property claims; and

· confine appeals to appeals from the Appointed Person to the High Court or Court of Appeal on a point of law only.

I fear that the Working Group’s proposals run flat in the face of the Ministry of Justice’s policy of simplifying civil justice within the courts and tribunals structures. Should a pan-European intellectual property court[5] ever be formed the PCC will provide a fourth forum for the resolution of IP disputes competing for specialist work with the Patents Court, the IPO and the new European court.

If the PCC is to remain I am strongly against special rules and practice directions for its business, particularly if they are a common and civil law hybrid. The CPR as amplified and clarified by the Chancery and Patents Court Guides should continue to apply. Perhaps the streamlined procedure could become the default procedure. I agree that applications should be in writing except where there is a special reason for a hearing and in those few applications where a hearing is justified as much as should be done by telephone or video link. Two days may be enough for patent trials which are more likely to turn on the law or the construction of the specification than on fact. They are unlikely to be enough for copyright, breach of confidence or passing off where there is more likely to be a dispute of fact. I agree that costs should be limited to a scale but they should be the same as for the IPO.

3 July 2009

The Media Centre
7 Northumberland Street
T 0870 990 5081
F 0870 990 5082

[1] The Chief-Executive of the UK Intellectual Property Office who is also known confusingly as “the registrar” in trade mark and .design matters.

[2] As the section now stands it reads “The proprietor of a patent and any other person may by agreement with each other refer to the comptroller the question whether that other person has infringed the patent and on the reference the proprietor of the patent may make any claim mentioned in subsection (1)(c) or (e) above.”

The need for agreement by all parties effectively stymies this provision forcing all patentees to go to court where they risk substantial costs should their action fail.

[3] “The following claims must be dealt with in the court –

(1) any matter arising out of the 1977 Act, including –

(a) infringement actions;

(b) revocation actions;

(c) threats under section 70 of the 1977 Act; and

(d) disputes as to ownership;

(2) registered designs;

(3) Community registered designs; and

(4) semiconductor topography rights.”

[4] “Any of the following claims must be brought in the Chancery Division, a Patents County Court or a county court where there is also a Chancery district registry –

(1) copyright;

(2) rights in performances;

(3) rights conferred under Part VII of the 1988 Act;

(4) design right;

(5) Community design right;

(6) Olympic symbols;

(7) plant varieties;

(8) moral rights;

(9) database rights;

(10) unauthorised decryption rights;

(11) hallmarks;

(12) technical trade secrets litigation;

(13) passing off;

(14) geographical indications;

(15) registered trade marks; and

(16) Community registered trade marks”

[5] Whether it is a specialist chamber of the European Court of Justice as proposed in some of the earlier drafts pf a Community patent regulation."

14 January 2010

Trade Marks: Firecraft - a Cautionary Tale and More Work for the IP Bar

In Evans and another v Focal Point Fires Plc [2009] EWHC 2794 Mr. Justice Peter Smith granted summary judgment to the claimants in a claim for passing off. The claimants, who had sold fire surrounds in partnership under the name "Firecraft" since 1991, sued one of the UK's largest manufacturers of gas fires for marketing its products under the registered trade mark FIRECRAFT since May 2001.

The basis of the judge's decision was that the issue of passing off had already been determined in the Trade Marks Registry of the IP Office by the hearing officer, Mr. James, on behalf of the Registrar in invalidation proceedings. By his decision of 18 Nov 2008 Mr. James declared the registration invalid under s.47 (2) (b) of the Trade Marks Act 1994 on the ground that the claimants had an "earlier right" within the meaning of s.5 (4) (a) of the Act. That sub-section provides:
"A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented-
(a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade,"
Even though, as Mr. Geoffrey Hobbs QC observed in WILD CHILD [1998] RPC 455, an invalidity hearing in the Registry is very different from a passing off trial in the High Court in that such hearings tend to last only a couple of hours and evidence is rarely tested by cross-examination, and despite the judgment of the Court of Appeal in Special Effects Ltd v L'Oreal SA and Another [2007] ETMR 51, [2007] EWCA Civ 1, [2007] Bus LR 759, [2007] RPC 15 that opposition proceedings are not res judicata the judge held that the defendant had no real prospect of success in defending the passing off action.

As the IPO observed in its latest Tribunal Practice Note TPN 6/2009 Mr. Justice Peter Smith's decision has "ramifications" and "significant consequences". Accordingly all invalidation proceedings under s.5 (1), (2), (3) and (4) will require a hearing ("yea") and require the attendance of the parties or their legal representatives ("whoopee")!

Patents: US Patent Filings

A table of the top 50 US patent filings for 2009 appears in a press release by Kivett & Co, Communications based on data analysed by IFI Patent Intelligence. Top of the list is IBM with 4,914 patent applications followed by Samsung (3,611), Microsoft (2,906), Canon (2,206) and Panasonic (1,829).

The presence of a Korean company as number 2 followed by Japanese companies in 4th and 5th slots has been the focus of attention in the USA. According to the press release 51% of all applications were made from overseas: 23% from Japan, 5.6% from South Korea and Germany 5.2%. Sadly there were no British applicants in the top 50 and the top European applicant was Siemens of Germany with 716 applications.

The press release notes some American successes: GM up by 68% since last year and Cisco, Boeing and Xerox by 30%, 26% and 18% respectively.

See also Steve LeVine's article in Business Week: "IBM may not be the Patent King after all".

For a table of patent grants for the UK for 2007 and 2008 see the IPO's Facts and Figures for 2008.

See also my article "Korea: an IP Giant" which I published on 10 Jan.

13 January 2010

Patents: Molnlycke v BSN

This is another case on Regulation (EC) No. 44/2001 on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. The main issue was whether a claim in England for infringement of a European patent should be stayed while an application for a declaration of non-infringement proceeded in Sweden under art 27 (1) of that Regulation. It turned on whether the claim in England was between the same parties and involved the same subject matter as the proceedings in Sweden.

The Applications
In Mölnlycke Health Care AB and another v BSN Medical Ltd. and another [2009] EWHC 3370 (Pat) the defendants applied for a stay of the English proceedings because they had applied for declarations in the Stockholm district court that the patent in suit did not prevent them from marketing their Cutimed Siltec wound dressings in the UK. The claimants made a cross application for an interim injunction to restrain BSN from marketing that product until judgment or further order. The application and cross-application came on before Mr. Justice Floyd.

The Legislation
Art 27 (1) of the Regulation provides that "[w]here proceedings involving the same cause of action and between the same parties are brought in the courts of different Member States, any court other than the court first seised shall of its own motion stay its proceedings until such time as the jurisdiction of the court first seised is established." The respondents. Mölnlycke Health Care AB ("the Swedish company" or "MAB") and its UK subsidiary and exclusive licensee, Mölnlycke Health Care Ltd. ("the British company" or "MUK"), opposed the application on the ground that the Swedish proceedings did not involve the same cause of action and was not between the same parties. The British company was not party to the Swedish application and they contended that the claim in England was for damages for infringement of the patent in England.

The Cases
The Court of Justice of the European Union had considered art 27 in Case 406/92 The Tatry [1995] 1 Lloyd's Rep 302, [1995] All ER (EC) 229, [1995] 1 LLR 302, [1994] ECR I-5439, [1999] 2 WLR 181, [1995] ILPr 81, [1999] QB 515, [1994] ECR I-05439, [1995] CLC 275 and Drouot Assurances [1999] Lloyd's Rep IR 338, [1998] ECR 3075, [1998] ECR I-3075, [1999] QB 497, [1998] CLC 1270, [1998] ILPr 485, [1999] 2 WLR 163, [1998] All ER (EC) 483, [1999] Lloyds Rep IR 338. These had been reviewed by the Court of Appeal in Kolden Holdings v Rodette Commerce [2008] EWCA Civ 10, [2008] Bus LR 1051. Lord Justice Lawrence Collins (as he then was) discerned the following guidance from those cases:
"The starting point is that these general propositions can be derived from The Tatry and Drouot. First, the object of article 27 is to prevent parallel proceedings in different member states and to avoid conflicts between decisions and irreconcilable judgements: The Tatry, para 32; Drouot, para 17. Second, the term between "the same parties" has an independent or autonomous meaning:The Tatry, para 47. Third, in considering whether two entities are the "same party" for the purposes of applying the regulation, the court looks to the substance, and not the form: The Tatry. Fourth, although the parties must be "identical" (the The Tatry, para 33, Drouot, para 18) this identity is not destroyed by the mere fact of there being separate legal entities involved: in The Tatry in the English proceedings the party was the sister-ship, and in the Dutch proceedings was the shipowner: in Drouot the barge owner and the hull insurer were held to be capable of being the "same parties". Fifth, whether they are identical for this purpose may depend on whether there is such a degree of identity between the interests of the entities that a judgement given against one of them would have the force of res judicata as against the other (Drouot, para 19). Sixth, it will also depend on whether the interests of the entities are identical and indissociable, and it is for the national court to ascertain whether this is in fact the case; Drouot, para 23. In the context of a subrogated claim the court also emphasised that the insured would not be in a position to influence the proceedings: Drouot, para 19."
The Decision
Applying those guidelines the judge decided that the British company's interests in the English litigation were not necessarily the same as those of the Swedish company in the Swedish proceedings:
"31.The most difficult question is whether, in the context of the present case, the interests of the parties in the two actions are identical and indissociable. At one, rather high level the interests of MAB in Sweden and MAB and MUK together in the UK are identical: an interest in preventing the infringement of MAB's patent. But Mr Purvis QC submits that MUK have, by the acquisition of the exclusive licence, acquired the right to protect its UK business from damage. There is as yet no counterclaim for infringement in Sweden, and, he submits, it may not be possible under the Convention for an additional party to counterclaim there, particularly as Article 6(3) only allows for jurisdiction to be founded for a counterclaim "arising from the same contract or facts on which the original claim was based". So, if MUK is treated as the same party as MAB, MUK may be deprived of a right to damages which is distinct from any possessed by MAB.

32. I have come, somewhat reluctantly, to the conclusion that I must accept those submissions. I think it would be wrong to treat MUK as the same party when the effect may be to deprive it of the benefit of its exclusive licence in this way. This is not a case like
Kolden where a party has acquired the whole of the benefit of a contract, leaving the assignor with nothing - MUK has been granted a specific right which is additional to the right which MAB continues to hold. Moreover it is not possible for MUK to assert its right independently of MAB, because of Section 67(3) of the Act. To put it another way, the interest of MUK which is in play in the English action is different to any interest of MAB which is in play in Sweden. Moreover, even if this were to be an answer to this point, there is no evidence before me which would justify the assumption that MUK would be able to launch a counterclaim in Sweden."
Despite his finding that the British and Swedish companies had different interests and the fact that one was an action for damages for infringement of a European patent in Britain while the other was an application for a declaration of non-infringement Mr Justice Floyd was reluctant to find that the causes of action were different.

The Injunction
The judge refused to grant an interim injunction on the grounds that the claimants had left it too late. They had been aware of the defendants' marketing plans since April and of actual sales since September 2009. They had obstructed the Swedish proceedings and had taken no steps to enforce their patents elsewhere in Europe. Had they moved more quickly the action might well have come to trial before the hearing of this application.

12 January 2010

Copyright: Lucasfilm Ltd v Ainsworth

Every so often a case comes along that is remembered for having something to say on more than one important issue. One such case was Catnic Components Ltd. v. Hill & Smith Ltd. [1982] R.P.C 183 which is cited not just for Lord Diplock's speech on purposive construction of patent claims but also for the so called Catnic defence to copyright infringement. Another example isOccular Sciences Ltd v Aspect Visions Care Ltd [1997] RPC 289 which contributed to the law of confidence and design rights. The judgment of the Court of Appeal in Lucasfilm Ltd. and Others v Ainsworth and Another [2009] EWCA Civ 1328 was such a case. The Lord Justices considered what constitutes a "sculpture" for the purposes of s.4 of the Copyright, Designs and Patents Act 1988. whether the "design document" and/or the industrial process exceptions to copyright in s.51 and s.52 of the Act could apply, equitable title to commissioned works, whether there is such a thing as "extra EU jurisdiction" whether an English court could or should enforce a foreign copyright and the circumstances in which an English court should enforce a default judgment of a foreign court.

The Facts
The defendant Andrew Ainsworth had worked on the first Star Wars film in the late 1970s. His job was to make for the film set a plastic model of a storm trooper in helmet and armour from paintings and drawings of storm troopers that had been made by a Mr. McQuarrie and a clay model of one of the trooper's helmets that had been made by a Mr. Pemberton. Mr. Ainsworth carried out his commission but he went on to mass produce further copies which he marketed over the internet. He sold some US$14,500 worth of those items in the USA. The claimants, which had acquired the copyrights in Mr. McQuarrie and Mr. Pemberton's works, sued Mr. Ainsworth for infringement of its US copyrights in California. Mr. Ainsworth did not file a defence to that action or otherwise submit to the jurisdiction of the American court. In default of defence, the US court awarded the claimants US$20 million damages for copyright infringement of which US$10 million were compensatory damages. The claimants brought proceedings in England to enforce their British and American copyrights and recover the compensatory, but not the punitive, damages portion of their US damages award.

First Instance
The claim came on for trial before Mr. Justice Mann and the transcript of his judgment is reported at Lucasfilm Ltd. and Others v Ainsworth and Another [2008] EWHC 1878 (Ch.) [2009] FSR 2. The trial judge dismissed the British copyright infringement claim on the ground that Mr. Ainsworth had a defence under s.51 and s.52 and that in any case Mr. Pemberton's helmet was not a work in which copyright could subsist. However, he held that Mr. Ainsworth had infringed the claimants' US copyrights and injuncted him from marketing or selling his models in the USA. His lordship also held that Mr. Ainsworth held such copyrights as might exists in his works anywhere in the world on trust for Lucasfilm and ordered him to assign those copyrights to them. On the other hand, he refused to enforce the damages award.

The Issues
The claimants appealed the dismissal of their claims for infringement of their British copyrights and enforcement of their US judgment. Mr. Ainsworth appealed against the injunction and the order to assign his copyrights. Thus, the issues for the court were as follows:

(1) Whether Mr. Pemberton's model and Mr. Ainsworth's reproductions were sculptures for the purposes of s.4 (1) (a) of the Copyright, Designs and Patents Act?

(2) Whether s.51 of the Act afforded a defence to the British copyright infringement claim.

(3) Whether s.52 afforded a defence to such claim.

(4) Whether the courts of England and Wales were bound to hear claims for infringement of copyright in countries outside the European Union by art 2 of Regulation (EC) 44/2001 on Jurisdiction and the Recognition of Enforcement of Judgments in Civil and Commercial Matters.

(5) Whether they were to hear such claims by Mr. Justice Lloyd's dicta in Pearce v Ove Arup [1997] 2 WLR 779 or otherwise.

(7) Whether the Court should enforce the default judgment against Mr. Ainsworth.

(8) Whether Lucasfilm was beneficially entitled to the copyright in the model that Mr, Ainsworth had made for it for use in Star Wars.

What is a Sculpture for the Purposes of s.4?
The significance of this point was that if Mr. Ainsworth's reproductions had been sculptures they would thus have been artistic works. The s.51 exception discussed below does not apply to a design document for an artistic work. Accordingly, the copyrights subsisting in Mr. McQuarrie's drawings and for that matter Mr Pemberton's model would have been infringed by makingsculptures - that is to say Mr. Ainsworth's model storm troopers - from the designs contained in those drawings, paintings and model. The claimants could have prevented Mr. Ainsworth from making and selling his storm troopers for the lives of Mr. McQuarrie and Mr. Pemberton plus 70 years. If they were not sculptures, the s.51 exception would apply. The operation of s.51 had been suspended until 31 July 1999 by the transition provisions of Schedule 1 of the 1988 Act but that period had now expired.

The problem for the Court was that there is no definition of sculpture in the Act. Did the term apply only to busts, statues and other likenesses in which case it would exclude a lot of abstract works which are universally regarded as sculptures. If it had a wider meaning did it extend to prototypes? If it did extend to prototypes the distinction between copyrights and designs which Parliament had tried to settle with the 1988 Act would have been confused. There had been a number of cases on the point from common law jurisdictions around the world but these seemed to turn on their particular facts and it was very difficult to discern any consistency. At trial, Mr. Justice Mann set out the following guidelines for determining whether or not a three dimensional object was a sculpture or simply a prototype at paragraph [118] of his judgment:
"From those authorities, and those approaches, a number of guidance factors can be extracted. I call them guidance rather than points of principle, because that gives them the right emphasis. The judges deciding the cases have not sought to lay down hard and fast rules in an area where subjective considerations are likely to intrude, and I will not attempt to do so either. However, I do think the following points emerge from the cases or from the concepts involved:

(i) Some regard has to be had to the normal use of the word.

(ii) Nevertheless, the concept can be applicable to things going beyond what one would normally expect to be art in the sense of the sort of things that one would expect to find in art galleries.

(iii) It is inappropriate to stray too far from what would normally be regarded as sculpture.

(iv) No judgment is to be made about artistic worth.

(v) Not every three dimensional representation of a concept can be regarded as a sculpture. Otherwise every three dimensional construction or fabrication would be a sculpture, and that cannot be right.

(vi) It is of the essence of a sculpture that it should have, as part of its purpose, a visual appeal in the sense that it might be enjoyed for that purpose alone, whether or not it might have another purpose as well. The purpose is that of the creator. This reflects the reference to "artist's hand" in the judgment of Laddie J in Metix, with which I respectfully agree. An artist (in the realm of the visual arts) creates something because it has visual appeal which he wishes to be enjoyed as such. He may fail, but that does not matter (no judgments are to be made about artistic merit). It is the underlying purpose that is important. I think that this encapsulates the ideas set out in the reference works referred to in Wham-O and set out above (and in particular the Encyclopaedia Britannica).

(vii) The fact that the object has some other use does not necessarily disqualify it from being a sculpture, but it still has to have the intrinsic quality of being intended to be enjoyed as a visual thing. Thus the model soldier in Britain might be played with, but it still, apparently, had strong purely visual appeal which might be enjoyed as such. Similarly, the Critters in Wildash had other functions, but they still had strong purely visual appeal. It explains why the Frisbee itself should be excluded from the category, along with the moulds in Metix and Davis. It would also exclude the wooden model in Wham-O and the plaster casts in Breville, and I would respectfully disagree with the conclusions reached by the judges in those cases that those things were sculptures. Those decisions, in my view, would not accord with the ordinary view of what a sculpture is, and if one asks why then I think that the answer is that the products fail this requirement and the preceding one – there is no intention that the object itself should have visual appeal for its own sake, and every intention that it be purely functional.

(viii) I support this analysis with an example. A pile of bricks, temporarily on display at the Tate Modern for 2 weeks, is plainly capable of being a sculpture. The identical pile of bricks dumped at the end of my driveway for 2 weeks preparatory to a building project is equally plainly not. One asks why there is that difference, and the answer lies, in my view, in having regard to its purpose. One is created by the hand of an artist, for artistic purposes, and the other is created by a builder, for building purposes. I appreciate that this example might be criticised for building in assumptions relating to what it seeks to demonstrate, and then extracting, or justifying, a test from that, but in the heavily subjective realms of definition in the artistic field one has to start somewhere.

(ix) The process of fabrication is relevant but not determinative. I do not see why a purely functional item, not intended to be at all decorative, should be treated as a sculpture simply because it is (for example) carved out of wood or stone."
Applying these guidelines the judge concluded that neither Mr. Pemberton's model nor Mr. Ainsworth's reproductions were sculptures.

The Court of Appeal endorsed the judge's approach. After analysing previous cases on the point the Lord Justices concluded at paragraph [77]:
"it is not possible or wise to attempt to devise a comprehensive or exclusive definition of "sculpture" sufficient to determine the issue in any given case. Although this may be close to adopting the elephant test of knowing one when you see one, it is almost inevitable in this field. We therefore consider that the judge was right to adopt the multi-factorial approach which he did."
They also found that the judge had applied his guidelines correctly and upheld his finding. In doing so, the Lords Justices had to distinguish the case before them from Britain v Hanks (1902) 86 LT 765 where Mr. Justice Wright had held that a collection of model soldiers were artistic works. They did so on the basis that the model soldiers in Britain v Hanks were collectors' items whereas Mr. Ainsworth's models were but toys.

The S.51 Exception
S.51 (1) of the Act provides that
"[i]t is not an infringement of any copyright in a design document or model recording or embodying a design for anything other than an artistic work or a typeface to make an article to the design or to copy an article made to the design." "Design" is defined as "the design of any aspect of the shape or configuration (whether internal or external) of the whole or part of an article, other than surface decoration" and "design document" as "any record of a design, whether in the form of a drawing, a written description, a photograph, data stored in a computer or otherwise."
The purpose of this section is to prevent overlap between copyright and design right. There is a corresponding provision for design right in s.236 of the Act:
"Where copyright subsists in a work which consists of or includes a design in which design right subsists, it is not an infringement of design right in the design to do anything which is an infringement of the copyright in that work."
Having decided that the model stormtroopers were not sculptures and hence not artistic works it followed that the s.51 exception did apply and that it afforded a defence to copyright infringement for Mr. Ainsworth.

The S.52 Exception
S.52 applies "where an artistic work has been exploited, by or with the licence of the copyright owner, by (a) making by an industrial process articles falling to be treated for the purposes of this part as copies of the work, and (b) marketing such articles, in the United Kingdom or elsewhere." The exception is contained in sub-section (2) which provides:
"After the end of the period of 25 years from the end of the calendar year in which such articles are first marketed, the work may be copied by making articles of any description, or doing anything for the purpose of making articles of any description, and anything may be done in relation to articles so made, without infringing copyright in the work."
Sub-section (4) allows the Secretary of State to make rules defining "industrial process". The Secretary of State has exercised his power under s.52 (4) by making The Copyright (Industrial Process and Excluded Articles)(No. 2) Order 1989 (SI 1989 No 1070). Art. 2 (a) of that Order provides that an article is made by an industrial process if it is one of more than 50 articles all of which fall to be treated as copies of an artistic work. Art 3 (1) (a) of the Order excepts from the exception "works of sculpture". Again, having already determined that Mr. Ainsworth's storm troopers are not sculptures it followed that the s.52 exception also applied.

The upshot was that Mr. Ainsworth had a complete defence to the claim for copyright infringement by virtue of both s.52 as well as s.51 of the Copyright, Designs and Patents Act 1988.

Whether the English Courts were bound to entertain Claims for Infringement of Foreign Copyrights by Reg 44/2001
There was no dispute that Mr. Ainsworth had infringed Lucasfilms' US copyrights from the UK by placing advertisements for his products in US publications, operating a website in the USA and sending his products to American customers. Default judgment for infringement of those copyrights had been entered against him in California but Mr. Ainsworth was here.

Art 2 (1) of Regulation (EC) 44/2001 enables persons domiciled in an EU member state to be sued in the courts of that member state subject to the other provisions of that regulation. In C-281/02 Owusu v Jackson and Others [2005] ILPr 25, [2005] ECR I-553, [2005] 2 All ER (Comm) 577, [2005] EUECJ C-302/02, [2005] QB 801, [2005] EUECJ C-281/02, [2005] 1 CMLR 43, [2005] 1 Lloyd's Rep 452, [2005] 1 CLC 246, Case C-302/02, [2005] 2 WLR 942, [2005] ECR I-1383, the Court of Justice of the European Union seemed to suggest that the courts of EU member states were bound to entertain claims against their nationals even where a jurisdiction outside the EU would be more appropriate. Scathingly, Lord Justice Jacob referred to that as "extra EU jurisdiction" or "universal international jurisdiction".

Owusu was a personal injuries case. The claimant, who was domiciled in England, had rented holiday accommodation in Jamaica from the first defendant who was also domiciled in this country. The first defendant relied on Jamaican contractors to maintain the property. While at the accommodation the claimant sustained serious injuries. Alleging breach of contract by the first defendant and negligence against all the others the claimant sued the Jamaican as well as the English defendants in the Sheffield District Registry. The defendants applied for a stay of the proceedings on the grounds that England was not the appropriate forum. The learned deputy judge who heard the application considered he was bound by art 2 of the Brussels Convention to refuse the application. On appeal, the Court of Appeal referred the following questions to the Court of Justice under what is now art 267 of the Treaty on the Functioning of the European Union:
"1. Is it inconsistent with the Brussels Convention where a claimant contends that jurisdiction is founded on Article 2, for a court of a Contracting State to exercise a discretionary power, available under its national law, to decline to hear proceedings brought against a person domiciled in that State in favour of the courts of a non-Contracting State:

(a) if the jurisdiction of no other Contracting State under the 1968 Convention is in issue;

(b) if the proceedings have no connecting factors to any other Contracting State?

2. If the answer to question 1(a) or (b) is yes, is it inconsistent in all circumstances or only in some and if so which?"
The Court replied:
"The Convention of 27 September 1968 on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters, as amended by the Convention of 9 October 1978 on the Accession of the Kingdom of Denmark, Ireland and the United Kingdom of Great Britain and Northern Ireland, by the Convention of 25 October 1982 on the Accession of the Hellenic Republic and by the Convention of 26 May 1989 on the Accession of the Kingdom of Spain and the Portuguese Republic, precludes a court of a Contracting State from declining the jurisdiction conferred on it by Article 2 of that convention on the ground that a court of a non-Contracting State would be a more appropriate forum for the trial of the action even if the jurisdiction of no other Contracting State is in issue or the proceedings have no connecting factors to any other Contracting State."
Relying on that decision, Lucasfilm contended that
"Owusu decided that, for the EU, the courts of the Member State of the defendant's domicile have, and must exercise, subject-matter jurisdiction over any claim in any civil or commercial matter brought against the defendant unless it is one of the excluded matters provided for in Art. 1 of the Regulation. It makes no difference that the claim is in respect of acts done by the defendant in a place far far away from the EU. Or that the acts, if done by the defendant in his Member State of domicile, are lawful by the law of that State. Or that the courts of the country where the defendant actually did the allegedly wrongful act also have personal jurisdiction over him, with the obvious consequences for forum shopping that implies. Or that the dispute concerned has no intra-Member State or effect. Or that there is no EU interest requiring or making it convenient that the Member State concerned should have jurisdiction. If correct, the rule is rigid, admitting of no exception. We will call the postulated subject-matter jurisdiction the "extra EU jurisdiction". It could also be called "universal international jurisdiction".
The Court of Appeal had no difficulty in rejecting this bold proposition. First, Regulation 44/2001 was ancillary to art 65 of the Treaty of Rome (as it then was) which provided for "judicial co-operation in civil matters having cross-border implications." There was nothing in that article to indicate an intention to create an extra EU jurisdiction. Nor was there evidence of any such intention in Reg. 44/2001 itself. Secondly, Owusu was concerned with in personam jurisdiction and not jurisdiction in rem. The Court of Justice held that the rule of forum non conveniens had been displaced where a court has personal jurisdiction over a defendant by his presence in England and Wales but it did not address the question that arises where the court has no in rem or subject matter jurisdiction. Thirdly, the notion that the courts of the member states had "extra EU jurisdiction" in rem was inconsistent with the Court of Justice's decision in C-4/03 GAT v LUK [2006] ECR I-6509, [2006] FSR 45, [2007] ILPr 34 where the court held that a German court had no jurisdiction to determine the validity of a French patent. Fourthly, the notion was also inconsistent with Voda v Cordis [2007] 476 F.3d 887, the leading American authority on extra-territoriality. Finally, the Court of Appeal's analysis coincided with that of Mr Justice Colman in Konkola Copper Mines Plc v Coromin [2005] EWHC 898 (Comm), [2005] Lloyds Reps 555.

Pearce v Ove Arup
In Pearce v Ove Arup Ltd [1997] 2 WLR 779 Mr. Justice Lloyd observed at page 789 that as a result of the Brussels Convention:
"an English court will not be able to refuse to adjudicate on an action, if brought here against an English domiciled defendant, based on the infringement of the French law of privacy, or an artist's droit de suite, or some other legal right under the law of another contracting state to which English law has no equivalent."
(see my contemporaneous case note). This was of course only obiter dicta because the judge struck out the claim on the ground that there was no real prospect of success though the action was later restored by the Court of Appeal. In Lucasfilm the Lords Justices made clear that their extra-territorial jurisdiction was conferred by the Brussels Convention and applied only to the member states of the European Union. It was thus irrelevant to the issues before them in Lucasfilm, namely whether an English court should entertain claims for infringement of copyright in countries outside the EU.

Extra-Territorial Jurisdiction outside the EU
Finding no binding authority on the point, the Court of Appeal found that they were able to consider the issue de novo. The Court ruled at paragraph [174] that claims for infringement of copyrights of countries outside the EU were not justiciable. The Lord Justices' reasons were as follows:

(1) For nearly 120 years it has been settled that an English court will entertain proceedings for a tort abroad only if the wrongdoing is also actionable in England (see British South Africa Co. v Companhia de Mocambique [1893] AC 602). That rule has been abolished by art 2 of Reg 44/2001 in respect of wrongdoing in other EU member states but it still applies to alleged wrongdoing outside the EU.

(2) Enforcement of non-EU copyrights would involve a clash of IP policies of different countries. Lucasfilm was a case in point. Was it right to restrain a UK national in England from acts that were quite lawful in England just because those acts would have been unlawful if they had been done within the territory of a foreign state?

(3) Any restraint would amount to an interference in a foreign country in that it would preempt the decision of the foreign court.

(4) It would encourage forum shopping and with it satellite litigation such as anti-suit injunctions and applications for declarations of non-infringement.

Check Spelling
(5) As the Court of Appeals for the Federal Circuit observed in Voda, governments could have provided for extra-territorial jurisdiction in the IP conventions but have chosen not to do so.

(6) Their judgment was in line with that of the Federal Circuit in Voda.

For all these reasons the Court allowed Mr. Ainsworth's appeal against Mr. Justice Mann's injunction against infringing Lucasfilm's American copyrights and discharged that injunction.

Enforcement of the Default Judgment
It has long been settled that a foreign judgment can be enforced against a defendant in England only if the defendant places him or herself within the jurisdiction of the foreign court. The question for the Court was whether Mr. Ainsworth had done that. He was not physically present within the USA. He had never consented to the jurisdiction of its courts by contract or otherwise. All he had done was to sell his goods there. It has long been recognized in England that merely selling goods in another country does not amount to presence in that country. Indeed, sending a sales representative to a foreign country does not amount to "presence". Recognizing that "the internet and its uses takes us into a new world" the Court considered whether the internet or a website makes a qualitative difference requiring different rules on jurisdiction and decided that it did not. Accordingly, the Court concluded that Mr. Ainsworth had never been within the jurisdiction of the US courts and refused to enforce the default judgment.

Copyright in Mr. Ainsworth's Model
This was the only issue upon which Lucasfilm succeeded. The trial judge considered at paragraph [195] of his judgment the circumstances in which Mr. Ainsworth's work had been commissioned and his contribution to the project as a whole. Applying the officious bystander test he concluded that the parties would have intended Lucasfilm to acquire such copyrights as might subsist in Mr. Ainsworth's work. The Court approved Mr. Justice Mann's reasoning and dismissed Mr. Ainsworth's appeal against the order to assign his copyrights to Lucasfilm. There was, of course, no British copyright as Mr Ainsworth's model was not a sculpture.

Although the Court of Appeal did not think that the internet required any special rules on jurisdiction, the everyday reality is that it has increased the frequency of collisions between different legal systems. This seems to have occurred or at least been recognized earlier in the USA where the courts have developed rules for dealing with such collisions. In Zippo Mfr. Co, v Zippo Dot Com Inc.952 F Supp. 1119 (W.D. Pa), for instance, Judge McLaughlin drew a distinction between active and passive websites. Active websites are those through which a trader does business whereas passive sites are those through which he or she gives information. An active website brings a trader within the jurisdiction of a court whereas a passive site does not. This is a sensible distinction and one that companies seem to be able to live with as they often provide different sites for different markets with different terms and conditions to take account of different consumer protection laws, language and business practices. The Court of Appeal did not discuss the American cases on the internet and jurisdiction which is perhaps strange in that they would have provided an answer to several of the issues before the court in Lucasfilm, particularly as the court did discuss and apply Voda. This may have been because EU law provides a regulatory framework for e-commerce and distance selling but it is more likely to be because this is the first time the Court of Appeal has had to consider these questions and it occurred neither to the Lord Justices nor to counsel to consider the American cases.

Post Script
This case has now gone to the Supreme Court and I have today discussed the decision in a further case note "Lucasfilm v Ainsworth: The Supreme Court's First IP Appeal" Very broadly, the Supreme Court affirmed the Court of Appeal's reasoning with two qualifications but allowed the appeal on the justicialbility of a US copyright infringement claim. If you want to discuss any aspect of this case with me, call me on 0800 862 0055 or use my contact form.
1 Aug 2011