INTELLECTUAL PROPERTY, MEDIA & TECHNOLOGY EDITION EXECUTIVE SUMMARY

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1 LAWWATCH 0 EXECUTIVE SUMMARY COPYRIGHT: Coward v Phaestos Ltd & Ors [2013] EWHC 1292 (Ch) (England, High Court, 17 May 2013) The plaintiff left the business which he had set up. The business had first started as a partnership, but was later incorporated. The plaintiff had written the original software on which the business was based. He sought to determine the defendants use of that software by arguing that the copyright in the software belonged to him as the author and that he had merely allowed the defendants to use it. The English High Court found that he had written the software while a partner in the business. The software was a fundamental part of the business without which it could not operate. It held that, therefore, the software was partnership property and belonged to the defendants. PASSING OFF: Fenty v Arcadia Group Brands Ltd (t/a Topshop) [2013] EWHC 2310 (Ch) (England, High Court, 31 July 2013) The defendant, a high street fashion retailer, sold a t-shirt with an image of the plaintiff on it. While the defendant had paid the photographer for the use of the image, it had not sought the plaintiff s permission to use it. The plaintiff brought an action of passing off on the basis that she had not authorised the use of her image. The English High Court found on the facts that the plaintiff was known as both a musician and as a fashion icon. She had large merchandising and endorsement operations. It also found that the defendant s marketing sought to connect itself in people s minds with stylish celebrities, and that the image of the plaintiff that had been used on the t- shirt came from a video shoot of one of her singles. Bearing all these factors in mind, the Court held that there was a likelihood that persons buying the t- shirt would have thought that it had been authorised by her. PATENTS: Eli Lilly and Co v Janssen Alzheimer Immunotherapy [2013] EWHC 1737 (Pat) (England, High Court, 25 June 2013) The defendant was the proprietor of a Patent for the treatment of Alzheimer s Disease. The Patent discloses and claims pharmaceutical compositions comprising an antibody to amyloid-ß deposits in the brain (a characteristic of Alzheimer s Disease). Later research conducted after the Patent application date contradicted the assertion made in the Patent that the invention would work across the scope of the claim. The English High Court invalidated the Patent for insufficiency as the disclosure of the Patent did not make it plausible that any antibody to Aß would be effective to prevent and/or treat a disease characterised by amyloid deposits, and further that the invention in the Patent could not be performed without undue burden

2 LAWWATCH 1 TRADE MARKS: Case T-515/11 Delphi Technologies Inc v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (European Court of Justice, 6 June 2013) Delphi Technologies Inc submitted the phrase Innovation for the real world for registration as a Community mark. The European Court of Justice upheld the decision of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) to reject the application on the grounds that the phrase was devoid of distinctive character. The slogan could apply to any trader. As the phrase was not capable of individualising the goods or services of one trader, the public would associate it with any goods which were capable of being marketed by any undertaking offering innovative products. 8

3 LAWWATCH 2 COPYRIGHT Where the plaintiff set up a business partnership and wrote the software on which that business was founded, held that the software belonged to the partnership as partnership property: -- Coward v Phaestos Ltd & Ors [2013] EWHC 1292 (Ch) (England, High Court, 17 May 2013) To discuss the possible implications of this for your business, please contact: Facts The dispute arose in relation to the ownership of the intellectual property rights in a quantitative trading software used by a highly successful quantitative trading business ( IKOS Business ) now carried on through the defendant companies. The software is an automated system which makes investment decisions based on mathematical models and algorithms implemented in software and databases. LAM Chung Nian d: e: chungnian.lam@ wongpartnership.com The plaintiff, Dr Coward, is a mathematician and computer programmer. Until his resignation on 11 December 2009, Dr Coward was Chairman and a director of IKOS CIF Ltd, one of the defendant companies. The plaintiff wrote the original software upon which the IKOS Business was based and made a significant contribution to the development of the software over the years. The business was founded as a partnership in 1992 in England by the plaintiff and his wife, although the exact arrangement of their roles was in dispute. Later, the plaintiff and his wife became estranged, and the plaintiff left the business to set up a rival organisation. Jeffrey LIM d: e: jeffrey.lim@ wongpartnership.com The plaintiff contended that he wrote a substantial part of the software used by the defendants and that he owned the software s copyright. He claimed that the defendants merely had an implied licence from him to use the software. Further, as the licence was determined by him in December 2009 through his resignation, he alleged that the defendants continued use of the software amounted to a copyright infringement. In response, the defendants contended, among other things, that the software was partnership property. Decision The English High Court found on the facts that a partnership had been created. The original partners had moved back to England with the intention of commencing the partnership business and had taken steps to establish the business through meetings. Strong weight was also accorded to the business plan which the plaintiff participated in writing, in which he referred to the establishment of the partnership in past tense. Furthermore, on the basis the

4 LAWWATCH 3 plaintiff s statements in cross-examination and in his witness statement, it was clear to the Court that the plaintiff accepted that he had written the software for the purposes of setting up the IKOS Business, and had therefore written the software in his capacity as a partner. Considering the fact that the software had been written in the course of the IKOS Business, the Court held an asset such as the software was not prevented from being partnership property simply due to the lack of transfer of legal title from the plaintiff to the partnership. Most importantly, the Court held that the software was used and treated as partnership property because it was central to the carrying on of the partnership business: It formed the essential bedrock of the company, in which the partnership had invested substantially, without which the trading and investment operations of the business would fail. It was clear that the software was intended to be a partnership asset. The developer had enabled the software to become entangled with further developments made by employees of the partnership, which was evidence that the software was intended to be an inextricable part of the partnership. It was only logical that the software, which was critical to the partnership business, was partnership property, so as to prevent it from falling into the hands of the plaintiff or any other third party, the consequence of which could seriously threaten the business. Our Analysis / Comments In situations where the author of a copyrighted work is under the employment of another party, it should be noted that the first copyright owner of this work is generally the employer (section 30(6), Copyright Act). To fall within this rule, two criteria must be met: The author must be an employee (as opposed to an independent contractor); and The work must be created by an employee in the course of his employment. The rules governing employment cases may, however, be excluded or modified by agreement between employee and employer (section 30(3), Copyright Act). In relation to partnerships in particular, it should be noted that whether an asset has been brought into the partnership is very much a question of fact. Where an asset belonging to one partner has been used by the partnership and treated as its property, there is a presumption that it has been brought into the common stock and is part of partnership property (see section 20(1), Partnership Act).

5 LAWWATCH 4 PASSING OFF A fashion retailer sold a t-shirt with an image of a celebrity who was both a pop music star and a fashion icon. The celebrity successfully brought an action for passing off against the retailer. Facts that went towards establishing misrepresentation included the fact that retailer s marketing played up an association with stylish celebrities, and that the photo used came from a video shoot of one of the celebrity s singles: -- Fenty v Arcadia Group Brands Ltd (t/a Topshop) [2013] EWHC 2310 (Ch) (England, High Court, 31 July 2013) Facts The plaintiff in this action, Robyn Rihanna Fenty ( Rihanna ), is a famous pop star. The defendant is a high street fashion retailer ( Topshop ). In March 2012, Topshop started selling a t-shirt with an image of Rihanna on it. While Topshop had a licence from the photographer who took the photograph in question, they had no licence from Rihanna. Rihanna brought an action for passing off against Topshop. Topshop argued as follows: There was nothing on the t-shirt which represented itself as an item of official Rihanna merchandise and customers did not think that the t shirt was official Rihanna merchandise. It was a high quality fashion led garment, very different from standard pop star merchandise. The public would not have had the expectation that the garment was necessarily authorised by the person shown in the image since there was at the time a trend for image t-shirts and Topshop sold many garments like this. Decision On the law of passing off, the English High Court noted that the mere sale by a trader of a t-shirt bearing an image of a famous person is not, without more, an act of passing off. For passing off to succeed, there had to be a misrepresentation about trade origin. In other words, if a member of the public in question had purchased the t-shirt because they simply wished to buy an image of the pop star, then no misrepresentation had taken place. For misrepresentation to occur there had to be a connection of some kind between the defendant and plaintiff which would lead the public to suppose that the plaintiff had made herself responsible for the quality of the defendant s goods or articles.

6 LAWWATCH 5 In this case, the Court noted that Rihanna was a world famous pop star who ran very large merchandising and endorsement operations. She had promoted a specific association in the public mind between herself and the world of fashion, and had had a series of endorsements and promotions with brands such as River Island, Armani, and H&M. She had occasionally designed her own t-shirts as part of these campaigns, and she was regarded as a style icon by many people. Accordingly, the Court concluded that Rihanna had and had had in 2012 ample goodwill to succeed in a passing off action of this kind. The Court then went on to consider whether there had been any misrepresentation. In this regard, it held that there was, and based its conclusion on the following bases: There was no indication of artist authorisation on the swing tag or neck label. However, while this pointed against authorisation, it was not strong enough to negate the impression that the garment was authorised. Topshop had made a considerable effort to emphasise connections in the public mind between the store and famous stylish people, including Rihanna. This would enhance the likelihood in the purchaser s mind that the said garment had indeed been authorised. The nature of the image itself seemed to be a fairly strong indication that it may be an authorised product. It had been taken during the video shoot for one of Rihanna s singles. Accordingly, Rihanna s fans would recognise or think that they recognised the particular image of Rihanna as a particular picture of her associated with the particular context of the video shoot and music single. For persons who would buy such a t-shirt, the idea that the garment was authorised would be part of what motivated them to buy the product. The Court found that many persons would buy a product because they thought that Rihanna had approved of it given her status as a style icon. Many persons would also wish to buy it because of the value of the perceived authorisation itself. In both cases, they would have been deceived. The Court concluded that if a substantial number of purchasers were likely to be deceived because of a false belief of authorisation, then that would obviously be damaging to Rihanna s goodwill: It would amount to sales lost to her merchandising business. It represented a loss of control over her reputation in the fashion sphere. It was a matter for Rihanna, and not Topshop, to choose what garments the public thought were endorsed by her. The Court therefore found that Topshop s sale of the t-shirt without Rihanna s approval was an act of passing off and, accordingly, found for Rihanna.

7 LAWWATCH 6 Our Analysis / Comments Under English law, there exists the concept of character and personality merchandising, which refers to the practice of promoting goods or services in association with the names or images of famous persons or characters, real or fictitious. In Singapore, however, there is as yet no decision concerning this developing area of the law, and it is not yet clear whether the practice of character and personality merchandising will be sanctioned here, although there have been some indications that the practice may be accepted here. PATENTS Where evidence of later research done after the patent application date contradicted the assertion made in the patent that the invention disclosed therein would work across the scope of the claim, held that such evidence would be relied upon to invalidate the patent on the ground of insufficiency: -- Eli Lilly and Co v Janssen Alzheimer Immunotherapy [2013] EWHC 1737 (Pat) (England, High Court, 25 June 2013) Facts Eli Lilly and Company ( Lilly ) brought a claim seeking an order for revocation of European Patent (UK) No ( Patent ), of which the defendant, Janssen Alzheimer Immunotherapy ( JAI ), is the proprietor. Lilly also sought a declaration that dealings in pharmaceutical compositions comprising an antibody called solanezumab, which Lilly currently had in development for the treatment of Alzheimer s Disease, would not infringe the Patent. The Patent concerns the treatment of Alzheimer s Disease, which is characterised by amyloid deposits in the brain. The Patent discloses and claims pharmaceutical compositions comprising an antibody to ß-amyloid peptide, also referred to as amyloid-ß or Aß, which may be effective in treating Alzheimer s Disease by breaking down these deposits. The Patent also outlines methods for detecting the level of the immune response against Aß in a patient suffering from or susceptible to Alzheimer s Disease. Claim 1 of the Patent is a pharmaceutical composition comprising an antibody to Aβ and a pharmaceutically acceptable non-toxic carrier or diluent, for use in preventing or treating a disease characterised by amyloid deposits in a patient, wherein the isotype of the antibody is human IgG1.

8 LAWWATCH 7 Decision The English High Court held that, on the grounds of added matter, novelty, and obviousness the Patent was valid. However, the Patent was invalidated on the ground of insufficiency. A preliminary point addressed by the Court was whether post-dated evidence could be used to demonstrate insufficiency of the Patent. JAI had submitted that it was not open to a party challenging the validity of the patent on the ground of insufficiency to rely upon evidence which was not available as at the application date, such as the results of subsequent clinical trials, to contradict the assertion made in the patent that the invention would work across the scope of the claim. This submission was rejected by the Court, which held that it is permissible for a party attacking the validity of a patent to rely on post-dated evidence. In this respect, the Court followed the following statement in Regeneron Pharmaceuticals Inc v Genentech Inc [2013] EWCA Civ 93: if it is shown the prediction is wrong and the invention does not work with substantially all the products or methods falling within the scope of the claim then the claim will be insufficient. The Court went on to describe the approach to take with regards to sufficiency, stating that the court had to undertake a two-stage enquiry: Determination of whether the disclosure of the patent, read in the light of the common general knowledge of the skilled team, makes it plausible that the invention will work across the scope of the claim. If the disclosure does make it plausible, to consider whether the later evidence establishes that in fact the invention cannot be performed across the scope of the claim without undue burden. For the first stage, Lilly tried to argue that the disclosure of the Patent did not make it plausible that any antibody to Aß could be used in preventing or treating a disease characterised by amyloid deposits. The Court held that, although the disclosure would alert the skilled team to proceed with caution before administering antibodies to humans, the skilled team could still regard the claim made in the Patent as plausible. However, the Court went on to find that the disclosure of the Patent did not make it plausible that any antibody to Aß (provided it is of IgG1 isotype) would be effective to prevent and/or treat a disease characterised by amyloid deposits. The Court noted that a trial of the antibody had demonstrated that the Patent was classically insufficient and could not be performed without undue burden. The trial had demonstrated that the antibody was not suitable

9 LAWWATCH 8 for the methods of treatment covered by the Patent, and the antibody which had been developed was not efficacious and had unacceptable adverse effects. Accordingly, the Court concluded that the Patent accomplished no more than to invite a skilled team to perform a very significant research project with a high prospect of failure. Our Analysis / Comments This case concerns the tests applied to assess the validity of a patent, and makes a number of interesting points in relation to the approach to determining sufficiency of a patent. It will often be a balancing act for patentees between filing a patent application as early as possible, and waiting for the data which is able to support the invention described. In Singapore, the relevant legislation is section 80 of the Patents Act, which states that the Registrar may, on the application of any person, by order revoke a patent for an invention only on any of the grounds listed in section 80(1)(a) to section 80(1)(g). Insufficiency is considered a ground of revocation in section 80(1)(c), which provides that the Registrar of Patents may, on the application of any person, by order revoke a patent for an invention on the ground, among other things, that the specification of the patent does not disclose the invention clearly and completely for it to be performed by a person skilled in the art. TRADE MARKS Where a slogan, Innovation for the real world, was not sufficiently distinctive and could be applied to any trader, held that it was not registrable as a trade mark: -- Case T-515/11 Delphi Technologies Inc v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (European Court of Justice, 6 June 2013) Facts This was an action brought by Delphi Technologies Inc ( Delphi ) against the decision of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) ( OHIM ) concerning the application for registration of the word mark INNOVATION FOR THE REAL WORLD ( Mark ) for, among other things, motor vehicle products, GPS navigation systems, and medical apparatuses.

10 LAWWATCH 9 Delphi had submitted the Mark for registration as a Community mark in July The application was rejected on the grounds that the Mark was devoid of distinctive character. Delphi made submissions to the effect that the expression REAL WORLD was not descriptive, promotional, or laudatory, and that several similar marks had been successfully registered. Delphi s submissions were rejected by the examiner, and an appeal was made to OHIM. The appeal to OHIM failed as OHIM was of the opinion that the Mark would not be viewed as an indication of the commercial origin of the goods by the relevant public (in this case, English-speaking professionals and the Englishspeaking general public). The expression innovation for the real world would be understood by the relevant public as a laudatory message that Delphi s goods were innovations for the real world, especially so since the goods concerned pertained to a market where innovation was essential. Furthermore, the Mark was not distinctive there was nothing in the Mark beyond its promotional meaning that would enable the relevant public to memorise the Mark instantly as a distinctive mark, and the Mark was not imaginative, surprising, or unexpected. Lastly, the Mark was a banal slogan which had not acquired distinctive character through use over many years, unlike the slogan in P Audi v OHIM [2010] ECR I535, where the slogan in question was Vorsprung durch Technik. Delphi appealed the decision to the General Court on, among others, the following grounds: OHIM had erred in law in the application of Article 7(1)(b) of Regulation No 207/2009 ( Regulations ). OHIM did not take into account the use and the renown of the Mark and its acquired distinctiveness through such use. Decision The European Court of Justice dismissed the claim and validated the decision made by OHIM. The Court noted that, according to Article 7(1)(b) of the Regulations, trade marks which are devoid of any distinctive character may not be registered. For a mark to possess distinctive character, it must serve to identify the goods in respect of which registration is applied for as originating from a particular undertaking, and thus to distinguish those goods from those of other undertakings. It stated that the distinctive character of a mark must be assessed, first, by reference to the goods or services in respect of which registration had been applied for and, secondly, by reference to the perception which the relevant

11 LAWWATCH 10 public has of those goods or services. In the case of compound word signs, the relevant meaning, established on the basis of all their constituent elements and not only one of them, must be taken into account and the assessment of the distinctive character of such signs cannot be limited to an evaluation of each of their words or components, considered in isolation, but must be based on the overall perception of the marks by the relevant public and not on the presumption that elements individually devoid of distinctive character cannot, on being combined, have a distinctive character. As such, in order to assess whether or not a trade mark lacks distinctive character, the overall impression given by it must be considered although it may be useful to start by examining each of the individual features which make up that mark. In the case of marks consisting of signs or indications that are also used as advertising slogans, indications of quality or incitements to purchase the goods or services covered by that mark, their registration as trade marks is not excluded by virtue of their use as advertising slogans. In the case of the slogan, Innovation for the real world, the Court held that the Mark could not be regarded as having distinctive character because it could not be perceived other than as a promotional message: Considered as a whole, the Mark was instantly apparent to the relevant English-speaking public, without any further consideration, as meaning that the goods covered by the Mark are innovations for the real world, and not as an indication of the commercial origin of those goods. It was not sufficiently original or resonant to require at least some interpretation, thought, or analysis on the part of the relevant public, as that public was led to associate that Mark immediately with any goods which are capable of being marketed by any undertaking offering innovative products. The Mark did not constitute a play on words and contained no imaginative, surprising, or unexpected element so as to confer on it, in the minds of the relevant public, a distinctive character. In coming to its decision, the Court noted that even where the relevant public comprised of professionals who would possessed a generally high level of awareness, this awareness could be relatively low when it came to purely promotional indications which well-informed consumers would not necessarily see as decisive or as an indication of the commercial origin of the goods or services concerned. Our Analysis / Comments Section 7(1)(b) of Singapore s Trade Marks Act (Cap 332) ( TMA ) uses the same wording as Article 7(1)(b) of the Regulations.

12 LAWWATCH 11 According to the Singapore Trade Marks Manual, a slogan as a mark is objectionable under section 7(1)(b) TMA if it sends a message that could apply to any trader and is therefore not capable of individualising the goods or services of one trader. In deciding whether a mark is devoid of distinctive character, the approach generally adopted is to assess the mark applied for, without taking into consideration any other devices or elements which are deployed in use together with the mark. The test to be applied is whether the average consumer for the goods will see the mark as a trademark without being educated to think so. Consumers may be aware that slogans are commonly used in trade for purely advertising purposes and may therefore not accept a slogan as an indication of trade source as readily as they would a traditional indication of trade source, such as a word, logo, or figurative mark. Examples of types of slogans which might be objected to on grounds of being devoid of distinctive character include: Motivational statements which could potentially apply to any sort of undertaking; Customer service statements (e.g., WHERE CUSTOMERS COME FIRST ); and Promotional statements and normal means of marketing goods or services where, without education, the sign would be perceived as a promotional slogan by the relevant public. SOME OF OUR OTHER UPDATES DATE TITLE 2 August 2013 LawWatch: Issue 6 of August 2013 LegisWatch: SGX Amends Listing Rules to Enhance Shareholder Communication and Transparency 23 August 2013 LawWatch: Environmental & Green Laws Edition 30 August 2013 LawWatch: Issue 7 of 2013

13 LAWWATCH 12 CONTACT DETAILS Singapore WongPartnership LLP 12 Marina Boulevard Level 28 Marina Bay Financial Centre Tower 3 Singapore Tel: Fax: /5722 China WongPartnership LLP Beijing Representative Office Unit 3111 China World Office 2 1 Jianguomenwai Avenue, Chaoyang District Beijing , PRC Tel: Fax: Middle East WongPartnership LLP Abu Dhabi Branch Al Bateen Towers Building C3 Office (P1) P.O. Box No Abu Dhabi, UAE Tel: Fax: contactus@wongpartnership.com WongPartnership LLP Shanghai Representative Office Unit 5006 Raffles City Office Tower 268 Xizang Road Central Shanghai , PRC Tel: Fax: WongPartnership LLP Licensed by the QFCA Office Amwal Tower, West Bay P.O. Box No Doha, Qatar Tel: Fax: wongpartnership.com