For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Wednesday, 17 September 2014

AIPPI Congress Report 4: Should Europe embrace a patent linkage system?

The site of this year's Pharma Day -
reminding the audience that, yes, you
are in Canada
Without the slightest hint of pharma fatigue, the AmeriKat continued her Pharma Day in the SPC session.  Sadly, however, she had to leap off like the bounding feline beast of prey that she is for a meeting (::snort:: IP joke!).  But not to fear, the AmeriKat's ever-eloquent colleague, Eibhlin Vardy was in attendance and reports on what was a lively discussion on the topic of "Early Resolution Mechanisms for Patent Disputes Regarding Approved Drug Products" with Larry Welch of Eli Lilly (US) moderating panelists representing a range of views across the innovator / generic spectrum.  Over to Eibhlin:
"Welch began by explaining the background to patent linkage, by reference to the US Hatch-Waxman legislation of 1984. This was a compromise between innovator and generic companies, and resulted in legislation on a number of components including patent term restoration, data exclusivity, and patent linkage. The key aspects of patent linkage in the US system are that originator companies must notify their patents to the regulator and industry, and generic companies must notify innovator companies of marketing authorisation applications. In Welch's opinion, the US patent linkage system works fairly well, in that it allows the resolution of patent issues prior to the approval of a generic product. He observed that patent linkage systems exist to some extent in a number of jurisdictions, including Canada, Mexico, Australia, and Korea. 
Warren Sprigings (Sprigings IP Law, Canada), started by saying that other countries should learn from Canada's mistakes in implementing a patent linkage system with some similar features to the US system. The Canadian system links new drug approvals to certain patent requirements. Although proceedings under the Canadian Patent Medicines (Notice of Compliance Regulations) (known as PM(NOC)) are supposedly "summary proceedings", in practice they can be complicated, expensive and very time consuming, involving both fact and expert evidence. Once proceedings are initiated, there is an automatic 24-month stay of the generic marketing authorisation application, and in Spriging's opinion, this automatic stay provides originator companies with an incentive to issue proceedings even if they are not warranted on the facts. Once the PM(NOC) proceedings are concluded, there is a right of appeal to the Court of Appeal, and the unsuccessful party can still bring an infringement, DNI or invalidity claim as appropriate. Therefore, even if a generic company is successful in PM(NOC)proceedings it may still be subjected to litigation for years thereafter. There is one carrot for generic companies in the PM(NOC) Regulation in that damages are recoverable from the date the generic would have otherwise entered the market. However, the onus is on the generic to establish lost sales and profits which is very difficult in practice. 
Young Kim (Kim & Chang, Korea) outlined the patent linkage system in Korea introduced in 2012, which applies to both small molecule and biologics. In Korea, patent notification is optional (unlike the US system), but despite this there were over 1,000 patent notification listings up to the end of 2013. An improvement of the Korean system over the Canadian one is that any notified patent must be relevant to the product approval dossier, meaning that generic companies are less likely to get bogged down in irrelevant patents. In Korea, the system is bifurcated, meaning that generic companies can issue validity and scope of claim proceedings before the IP Tribunal/Patents Court, while infringement is dealt with separately by the High Court. A draft Bill is expected to be passed by the end of 2014, including the introduction of a stay for 12 months (directed at generic sales rather than marketing authorisation approval). Kim explained that the Korean system seeks to minimise the negative impact on generic companies, but she is concerned that it has apparently resulted in a massive increase in invalidity/scope confirmation actions by generics, leading to a significant litigation burden. 
David Rosenberg (GSK, UK) explained that although there is no patent linkage or early resolution mechanism in Europe (with the exception of Portugal), there are three European issues that need addressed: 
1.There is a significant drop in reimbursement price at generic launch, which can never be recovered;
2. This price drop has an extra-territorial effect, due to international reference pricing amongst certain European Member States; and
3. Third parties may suffer harm as a result of this price drop - for example if there are cheaper alternative drugs available to treat the same condition, the sales of a third party will be affected by a generic entrant. 
Rosenberg recognised the need to balance protection for originators, and freedom to operate for generics. However, he observed that the current system is procedurally imbalanced, given that generic companies can issue litigation to clear the path well in advance of any product launch, but originator companies have no sight of the generic company's activities until very shortly before launch. It is therefore impossible for originator companies to launch infringement proceedings at an early stage. This lack of transparency could be addressed by making generic abridged marketing authorisation applications public. Without an early resolution mechanism systems, preliminary injunctions are essential. However, the possibility of third parties (such as the payor Department of Health) obtaining a cross-undertaking in damages following the grant of a PI is a further complication in the system which could have significant ramifications for the way originator companies think about litigation going forwards."
The AmeriKat wonders whether there is scope for greater transparency of generic launch plans in Europe, either by a linkage system (avoiding the Canadian experience) or by making generic marketing authorizations public in the way described by David.  Given the general move in Europe towards more transparency in numerous respects in the pharma industry, why should transparency in relation to a generic's activities be any different?  Would the potential allegation that such launch plans are commercially confidential trump any such measure?  What do readers think?

AIPPI Congress Report 3: Biosimilars - into the great unknown?

The AmeriKat successfully keeping
herself awake yesterday morning
After an ungodly early morning breakfast meeting yesterday morning, the AmeriKat dragged her paws to the second session of yesterday's Pharma Day sessions on the hot topic of "Biosimilar pharmaceutical products".  The session was promised to explore the latest developments in the area, including key definitional issues and the currently contentious issue of naming biosimilars.  Although there was an unusual lack of AIPPI audience participation, the panel did not fail to deliver.

Masahisa Yamaguchi (Chugai Pharmaceutical Co, Japan) provided a very concise and helpful summary of the biosimilars landscape.  Masahisa explained that unlike small molecule drugs, it is impossible to produce exact copies of reference biological drugs.  As such, the regulatory pathway to approval of such drugs is crucial.  However, the global regulatory position is mixed.  In Japan there is only one single guideline published in 2009 in relation to all types of biosimilars.  In the US there are four draft guidelines including the latest one, published in 2014, entitled Clinical Pharmacology Data to support Demonstration of Biosimilarity to a reference Product.  However, these are all draft guidelines.  In Europe, a general guideline has been published entitled "Similar biological medicinal products".  There are also product specific guidelines in Europe making Europe's regulatory landscape a little bit more user-friendly.

Masahisa explained that the major feature that these three systems have in common are the requirements of post-marketing surveillance studies and risk management plans.  The big difference between the three systems is that in naming.  In Japan a different non-proprietary and brand name is required to be distinguishable from the reference drug.  In Europe the biosimilar adopts the same non-proprietary name as its reference product.  In Australia they use a different non-proprietary name.  In Japan, there is a three-part naming process.  The divergence in approach has led the World Health Organization to develop its own recommendations - the use of a different non-proprietary name of the reference product plus a unique suffix.  Generally, innovators argue that a different proprietary name should be required, while generics oppose such an argument.  The main point in dispute, Masahisa explained, really turned on what is better for prescribers and patients.  In his view, both arguments have merit, but for now the only certainty was that the different regulatory authorities had different opinions on the issue.

AIPPI's Pharma 2 lineup for yesterday morning
Although there are many biosimilar products on the market in Europe, Masahisa explained that the US market is less developed.  In Japan, there are currently four biosimilar products on the market.  This generally low market impact could be attributable to the cost of developing biosimilars which are more expensive than small molecule generics.  A developer will need financial power behind them to develop biosimilars.  Masahisa also explained that the general price reduction of biosimilars in Europe is around 10-35%, of that of the reference product. The penetration rate in Europe is 10-30%.  In Japan, he considered that the market penetration is less than 5%.  This relatively slow and low market penetration rates may have to do with the fact that, besides expensive, biosimilar substitution is not allowed in Japan and Europe, resulting in a longer regulatory approval pathway.

Looking to the future, Masahisa explained that the projected total sales of biologics to 2020 shows rapid growth.  One of the most important and strong areas of growth is the monoclonal antibody field.  This will be the next target for biosimilars, he concluded, but it requires significant investment.

Agnes Klein (Health Canada) was next up to explain the regulatory framework for drugs and biologics in Canada under the Food and Drugs Act.  Following a technical sprint through the Canadian regime for biosimilar approval, Agnes described some key pointers for framing the studies that Canada Health look at when examining biosimilar applications.  Such factors included the preference of equivalence trial data over non-inferiority trial data, studies that are conducted using clinically relevant endpoints to detect potential differences (which could be different from the innovator's original study) and for pivotal trials, duration, route of administration and dosage ranges should be similar.  On the final point, Agnes stated that it was very unlikely that extrapolation of a different route or dosage would be permissible if there was no sufficient pharmacokinetic or pharmacodynamic data to support such extrapolation.

Health Canada says "no"
to automatic biosimilar
A significant issue with biosimilars, Agnes explained, was that of immunogenicity.  Most biologics introduce some level of anti-drug antibodies and these antibodies may have an undesirable clinical effect on pharmacokinetics and pharmacodynamics, efficacy or safety.  From a safety perspective, these antibodies can cause allergic or anaphylactic reactions, reduction to efficacy, reduction of autoimmunity and/or neutralization of an endogenous counterpart.  Unwanted immunogenicity is currently difficult to predict from analytical and non-clinical data in terms of incidence, characterization, clinical consequences and significance.  Risk based immunogenicity evaluation strategy and the filing of post-marketing risk management plans are therefore required just like any small molecule generic drug.  Agnes explained that Canada is moving towards a life-cycle management regime for all drugs, which is especially important for biosimilars as they are finding that increasingly biosimilars have common trans-properties.

Agnes concluded by explaining that Canada Health does not support automatic substitution of a biosimilar for a reference drug, but that biosimilars "are safe and effective as guidelines are sufficiently robust to ensure safety and efficacy.

Prior to introducing the final panelist for the morning, the moderator Mary Padbury (Ashurst, Australia) cited a comment made by to provide some context for the current slow growth rate of biosimilars in the global market.  Jimenez stated that although there will not be a big difference in the rate of growth of biosimilars for the next 2-3 years, there will be an inflection point in 2016-2019 when it is anticipated there will be big biosimilar launches. By 2020, we are likely to see a big impact in the biosimilar market.  

Is the Hospira v Genentech case just
the first of many biosimilar cases
to come before the English Court?
The final speaker, Dominic Adair (Bristows, UK) brought the audience back to the present market conditions of low market penetration.  This has been evidenced in the UK by very few cases involving biosimilars having been heard by the High Court.  Currently there are 17 biosimilars approved by the European Medicines Authority - two of which are for monoclonal antibodies both for infliximab.  But, against this background there has not been much biosimilar patent litigation save for one case decided earlier in the year - Hospira v Genentech (see IPKat post here) - where Hospira was clearing the path in respect of two patents covering Genetech's Herceptin cancer drug.  Although the uptake in biosimilar litigation has been slow, Dominic predicted that as we begin approaching the biologic patent cliff with basic biosimilar patents expiring, there will likely be an increase in litigation activity.  In the meantime, echoing Masahisa's comments, it is likely that a reason for the generally quiet biosimilar litigation landscape could be attributable to there not being enough approvals to create litigation, a longer regulatory process to obtain marketing authorizations for biosimilars and strategic moves by biosimilar manufacturers to wait until the expiry of the basic patent.  On this final point, Dominic explained that when he investigated this issue he found that when the two EMA approvals for infliximab were granted in 2013, it was reported that Hospira and Celltrion would only enter markets that did not have patent protection for Remicade.  Eastern Europe was therefore the target for that biosimilar market launch.

Without any litigation in this space, it is difficult to predict whether the courts will react similarly to issues raised in biosimilar litigation as they do to those raised in standard  small molecule litigation.  A significant issue that Dominic raised related to the granting of interim and permanent injunctions.  In the classic case the test for an interim injunction under American Cyanamid asks whether there is a serious question to be tried, whether damages would be an adequate remedy and where the balance of convenience lies.  The launch of generics pre-patent expiry is a substantial threat to innovators given the dramatic price spiral following the first launch (see commentary in SmithKline Beecham v Apotex). The normal course of conduct is that the first generic prepares for launch, ends up challenging the patent(s), litigation ensues and depending on the outcome all the other generics with market approval pile in.  The price of the innovator product reduces dramatically and its market share can reduce significantly.  In such circumstances irreparable harm is straightforward as the price will never recover and it is therefore relatively easy to obtain an interim injunction from the English court.

What does the future of biosimilar
litigation hold?  Do we have
some idea or is it into
the great unknown?
However, the biosimilar situation is different.  There are less approvals for biosimilars, so it is arguable with only one or two biosimilars on the market innovators are not going to see the price spiral that they experience with small molecule generic launches.  On present market conditions, a biosimilar launch will see the innovator likely operating in a duopoly.  Further, given that many biologics are delivered with specific delivery devices, like Humira, and other patient care programs there may be reluctance by patients and doctors to change to a biosimilar.  Again, this could result in a less dramatic price and market share reduction.  Dominic questioned whether in these circumstances the court will be as ready to grant in injunction.  His view is that it could be more difficult, but this has to still be weighted against the difficulty in calculating damages in an assessment after trial.

So what is the take-home point from this session?  With a current diverse regulatory landscape and small market penetration, we are still few years off from reaching the precipice of the next big frontier in patent litigation.  It probably won't be until the AIPPI Congress in Cancun, Mexico in 2018 when we really start seeing how the regulators and courts will react to this current great unknown.

Of Welsh love spoons, patents and trains: Brits and Chinese still get on just fine

Last week this weblog hosted the first of two instalments of the adventures of the members of the British IPO/FCO-led Expeditionary Force that headed for the Far East to do their bit for China-UK Intellectual Property Week (a.k.a. #UKChinaIP).  In the post below, participants and Katfriends Gwilym Roberts (CIPA, Kilburn & Strode) and Catherine Wolfe (ITMA, Boult Wade Tennant) share their further experiences:

Extra functionality
over chopsticks?
"The sheer scale of the Chinese IP operation emerged as part of the team found themselves at the Suzhou Patent Examination Cooperation (PESC) Centre in East China. The team, including Beijing Embassy’s Shi Hui, and the IPO’s Andy Bartlett, Andrew Davidson and Nathan Abraham arrived desperate to share knowledge and a Welsh love spoon brought along in case of memento exchange. Outside Suzhou, the “Venice of China” SIPO has set up a subsidiary Examining section in a purpose-built 60,000 sq. m facility with its own restaurant and pagoda, handling 30,000 grants and 70,000 exam reports last year and more still this year (although it’s never quite clear where design patents and utility models figure in these statistics). UKIPO’s Deputy Director Andy Bartlett gave a discussion of quality control measures, which was of huge interest and relevance to an operation with no fewer than 1,300 Examiners, and about to double in size. And we heard about the training at PESC -– from this reporter’s patent attorney point of view, by far the most important issue. But despite a false alarm, the love spoon did not change hands.
There's no truth in the story
of the Chinese IP infringers'
favourite karaoke track
being "I Did It Your Way"
Reassuringly there was a comfortable convergence on best practices, the biggest difference inevitably being scale; someone else can do the maths on proportional patent turnover at IPO v SIPO. PESC seems to use a mix of teaching and experience based training with lectures from local and SIPO based experts, and has a quality control mechanism which is itself quality-controlled by SIPO in a sort of recursive quality super spiral. Given the target of two million patent filings per year by next year in China, this scale and growth is essential; SIPO recognises that this needs to go hand in hand with maintenance of quality and, if the outcome matches their ambition, then patent offices around the world will want to know how they did it. This was a good opportunity to keep to policy -– to underline our enforcement concerns in China, build mutual respect for our systems –- two jobs done. The team then stayed in Suzhou new city for a pleasant evening chatting to academics from a local branch of Liverpool University, including a comparison of modern theory on stimulation of creativity v drafting broad claims, but still no love spoon exchange. Another staggering place (enormous hotel, café, pizza restaurant and karaoke lounge – but no people). They really do plan ahead there.
Opportunity lost? The IPO could have marketed
the joys of slow-track Welsh railway technology?
Then on to Nanjing by superfast train. Watching one of those come through the station without slowing down had even the most travel-hardy delegate glassy-eyed. Following more information- (and to our delight, love spoon-) sharing at the Jiangsu Provincial IPO we headed (in a minibus with a card table, and cards) on to the Technical University for a round table followed by a panel session on trends in European IP; another opportunity for Gwilym Roberts, Catherine Wolfe and Rob Furneaux to promote British expertise, then back to another fabulous hotel, playing snap all the way. Mention is also due to the China-British Business Council at this point. The Council set up many of these provincial meetings and also took the team to a very pleasant Bavarian micro-keller to recuperate in the evening.

The final leg was Hong Kong, with excellent discussions of a range of IP issues, a well-attended panel session headed by HKIPD Director Ada Leung and the opportunity to express once again CIPA’s support for and enthusiasm to assist with the current patent law and system reboot there. The ambition is huge, but we met an impressive team who look likely to deliver both on the law and the training of Examiners and attorneys to accompany it. Then home.

The week was demanding and aimed high but, in terms of coverage and delivery, hit its targets. There is no faulting the intentions nor endeavour of the IPO team both here and in Tom Duke’s domain and, while there may be many more visits to come, and much depletion of Wales’ armoury of love spoons, this correspondent at least is confident that our policy goals will be met".

Tuesday, 16 September 2014

Deadmau5 and the new Batmobile: is there any synergy?

The BBC reports that Zack Snyder has tweeted the first official photo of the new Batmobile, which will be featuring, if not actually taking the star role, in the forthcoming movie which he is directing, Batman v Superman: Dawn of Justice. [Merpel was rather hoping for something more legal content, maybe Batman v Superman: Court of Justice, but this seems unlikely at present].  The vehicle (below), which is likely to give Batman a headache fitting it neatly into a supermarket parking lot, is a good deal less car-like than the original model (even more below).

Never mind issues of fuel consumption, one wonders how the new Batmobile does for spares and components. Merpel is just a little disappointed that the vehicle doesn't have a number-plate.  As for insurance ...

This Kat has been doing some legal speculation too, since he suspects that there may be some synergy between the new Batmobile and Deadmau5.  Having recently pondered the case of the de-branded Ferrari/Purrari belong to Deadmau5 (on which see Lucy Harrold's guest post here), it occurred to him that the new and plainly monochromatic Batmobile, suitably de-branded and decorated, might appeal to the Canadian rapper (or is it wrapper?) [it has now been explained that he isn't a rapper, but the pun was too good to waste -- and Merpel is sure that he could if he tried ...]. After all, what is a bat but a flying mouse, so the Batmobile embodies an aural-to-conceptual link between "mouse" and "mau5".  But how might Deadmau5 choose to decorate it?

If Deadmau5 were to get his hands on the Batmobile and give it the Nyan Cat treatment, an interesting issue would arise.  On the assumption that the newly-styled Batmobile is an authors' work in which moral rights vest, would the exposure of a Deadmau5-decorated Batmobile to potential ridicule infringe its creator's right to object to derogatory treatment or distortion in those countries where that right is protected?  Such decorative activity might fall within the protective scope of parody under the recent ruling of the Court of Justice of the European Union in Deckmyn [on which see fellow Kat Eleonora's post here] -- but that ruling appears to this Kat to have no application beyond the realm of the distribution right, and at a pinch other economic rights, and would not be able to assist a defendant in a moral rights-based claim.

Readers' comments and suggestions are welcomed.

IP Publishers and Editors Lunch 2014

The IPKat can now confirm that we have all the necessary ingredients for the IP Publishers and Editors Lunch 2014. We have a date, Tuesday 25 November, at 12.30 pm to 2.30 pm. We have a venue, this being the London offices of law firm Bircham Dyson Bell, round the corner from Birdcage Walk -- a clear conceptual magnet for those of the feline persuasion, though few if any birdcages are now seen in those sumptuous parts. Finally, we have a guest speaker, the ever-challenging Ashley Roughton (barrister, one of the General Editors of The Modern Law of Patents, published by LexisNexis and now in its third edition).  This event is free to attend and offers a lovely opportunity to rub shoulders with other people who are part of the sequence of events that leads from things happening in the field of IP to those selfsame things being known and discussed.

In past years we have welcomed colleagues from various corners of the world. We do hope that this year will be no exception!

If you are involved in any aspect of intellectual property editing or publishing, whether in the traditional media or the social media, and you'd like to attend, please email the IPKat at and let him know.

Monday, 15 September 2014

AIPPI Congress Report 2: Second medical use heats up a Sunday morning

Good morning, Toronto!
Sunday mornings. Normally, the AmeriKat can be found burrowing under her comforter (not her "duvet" while she is on this side of the Atlantic) clinging to her final hours of pyjama-wearing, work-avoiding bliss. However, yesterday morning was different. At the crack of dawn she sprinted to the hotel gym before a dizzying whirlwind of client meetings and navigating her way through the streets of Toronto to show her whiskers at a plethora of law firm hosted sessions. The AmeriKat's colleague, Eibhlin Vardy, had a similarly eventful morning at the AIPPI Congress. Eibhlin reports:
Following a manic dash to the Eaton Centre to find suitable convention attire following lost baggage, this AIPPI Congress newcomer settled down to hear the deliberations of Working Committee Q238 on "Second medical use and other second indication claims".
At the outset, the Committee expressed an ambition to pass a resolution that went further than merely endorsing the status quo. The Working Committee rose to the challenge, and the wording of the resolution was duly agreed which called for changes to both the legal and regulatory framework.
Highlights included discussion on how infringement of second medical use claims should be assessed when the product has a skinny label with a carve-out for the patented indication. There was agreement that the offering or promotion of a skinny label product, where such offer or promotion (e.g. by sales reps) specifically referred to the patented second medical use should constitute infringement. The Working Committee then went further, and approved a non-exhaustive list of 9 factors that should be taken into account when determining whether acts relating to skinny label products might amount to an infringement, even where there is no explicit reference to the patented indication. This list included: (1) subjective factors, such as the alleged infringer's intent; (2) the alleged infringer's actions, including any steps taken by the alleged infringer to discourage or encourage infringing use for patented indication; and (3) wholly external factors such as the economics of the relevant market, and the prescription practices of relevant professionals. This list of factors, to be considered on a case by case basis, recognises that second medical use claims may require special treatment when considering the issue of patent infringement. 
The Working Committee also resolved that the pharmaceutical regulatory framework "governing the marketing of pharmaceuticals, their labelling, prescription, distribution, dispensing and reimbursement should be transparent as to whether drugs are being dispensed for patented medical uses, and, while not preventing the legitimate commercialisation of products for second medical uses that are not patent protected, facilitate the proper enforcement of patent protection for second medical uses.” Many jurisdictions had raised concerns about the regulatory framework in their national responses to Q238. In view of the fact that the pharmaceutical market was so heavily regulated, to do otherwise would mean that regulatory law would be allowed to distort patent law.
The Working Committee concluded by passing a further resolution proposed shortly before lunch, urging the relevant authorities to approve necessary measures so that effective protection of second medical use patents is not jeopardised by the regulatory framework.
Q238 is being discussed right now in today's plenary session.  Eibhlin will be back to report on the outcome in due course.

AIPPI Congress Report 1: A new era of IP collaboration and harmonization

The AmeriKat's view of Toronto at this year's AIPPI Congress
"What do you do?" asked the Canadian immigration official at Toronto's international airport.  "I'm an IP litigator", replied the Amerikat.  She paused thinking such a job title was probably more specific than what he was after.  "IP stands for 'intellectual property', right?", the officer replied.  The AmeriKat nodded.  The officer sighed.  "Yeah, we are seeing quite a few of you coming through."  An understatement, if ever there was one.  Thousands of IP lawyers, reporters and the like have come from all corners of the globe this year's AIPPI Congress. Along with her A&O colleagues Eibhlin Vardy and Lorraine Neale, the AmeriKat will be reporting the best bits from this year's Congress for readers who were not able to make the trip to a sunny autumnal Toronto.

Last night's Opening Ceremony was a culmination of a day which saw the AmeriKat bursting into huge smiles when seeing old friends and meeting new ones, contributing to the tailoring of the new working questions for next year's Congress in Rio (the four questions are on trade secrets, copyright exceptions for libraries and academic use, inventorship and free-riding in respect of trade marks) and clinking glasses with her colleagues on the new Special Committee on the Unified Patent Court.    

The Opening Ceremony held at the cavernous Roy Thomson Hall saw a panel of speakers welcoming the attendees in between bursts of energetic arrangements of famous Canadian music from the 60s to now.  The outgoing President of AIPPI, John Bochnovic (Smart & Biggar) gave an emotional speech about the work AIPPI has done to increase the involvement of its members and efficiency of the organization, and most importantly, its global reach.  More needed to be done to reach potential members in Africa, Bochnovic stated, as well as maintaining the constant collaboration with members outside of annual events like the Congress.  He also welcomed the new regime whereby Congresses would be held annually instead of every two years, as a step in ensuring constant collaboration.  Next stop, Rio de Janeiro in 2015.    

The key note speech was given by the quietly eloquent (and funny) Justice Marshall Rothstein of the Supreme Court of Canada.  Justice Rothstien continued the theme of collaboration and harmonization with that of the coordination of the law between domestic courts.  He recommended that domestic courts should consider judgments of other foreign domestic courts as, in his experience, a well-reasoned decision of a foreign court on similar facts can provide good insight into the legal analysis and the possible consequences of such a decision.  It can be beneficial, he continued, but not always appropriate.  

In support of his argument Justice Rothstein cited two Canadian Supreme cases.  The first was the 2008 decision in Apotex v Sanofi whereby the court was tasked to consider validity of selection patents and the test for anticipation and obviousness.  There the Court found assistance from Lord Walker in the House of Lords decision in Synthon v SmithKline Beecham.  This was an example of where Canadian law was reinforced and supported by foreign sources.  In respect of the obviousness test, Justice Rothstein stated that at the time the Canadian test was considered out of step with the rest of the world, particularly the UK and US where a more flexible approach was being applied.  Although the Canadian court was not bound to change the law they nevertheless considered it worth while to examine foreign sources such as Justice Kennedy's Opinion in KSR and Lord Hoffmann's dicta in Lundbeck.  Again, these decisions helped strengthen the Canadian law on obviousness so that it could evolve into a more flexible test .   

But foreign law does not always have immediate weight.  In the Harvard Mouse case, the Canadian Supreme Court overturned Justice Rothstein's decision when he was an appellate judge which would have permitted patentability in the case.  Such a decision would have been inline with caselaw in the US and Europe.  He specifically applied the US Supreme Court's decision in Chakrabarty to find support for patentability for higher life forms.   The Canadian Supreme Court overturned his decision in a 5:4 vote.  Like Justice Rothstein, the dissent also found support for patentability in the laws of other countries.  The position in other countries was not a reason per se for the Canadian court to permit patentability of higher life forms, but because:
"The mobility of capital and technology makes it desirable that comparable jurisdictions with comparable intellectual property legislation arrive at similar legal results."
Justice Rothstein considered that the openness of comparative analysis can lead to gradual harmonization which is an "important and laudable goal for IP law".

In concluding his key note address, Justice Rothstein recalled the occasion when he was asked to decide a moot held at UCL between Sir Robin Jacob and Lord Hoffman (watch the moot here).  At the time he turned to his wife and asked "Did you ever in your wildest dreams think I would be asked to decide a moot between these two world IP icons?"  His wife turned to him and said "Marshall, you are not in my wildest dreams."

And with that, the 2015 AIPPI Congress is open.  Expect more reports this week from the AmeriKat, Eibhlin and Lorraine on topics as diverse as second medical use and the ever-important issue of harmonization of privilege. 

Never too late! If you missed the IPKat last week ...

Our good friend Alberto Bellan has been kept particularly busy in composing this weekly round-up (our eleventh) of blog posts which you may have missed if you were away last week. This is because, inclusive of regular features like the Monday Miscellany and Friday Fantasies, the IPKat team posted a total of 22 items -- the largest number of Katposts in a single week since this blog was founded in 2003.  

Last week's offering looks like this:

Last week, the Court of Justice of the European Union (CJEU) issued its decision in Case C-201/13 Deckmyn [on which see earlier posts herehere and here]. The ruling concerned the notion of parody under Article 5(3)(k) of the InfoSoc Directive and stressed the need to "strike a fair balance" between copyright protection and freedom of expression. With regard to the latter, the Court held that the relevant right holder has "in principle, a legitimate interest in ensuring that the work protected by copyright is not associated" with a parody that conveys a discriminatory message. What did the Court mean by "legitimate interest" if not "moral rights", wonders Eleonora?

* Trade secrets: even more exposed!

After Jeremy’s review of Trade Secrets and Undisclosed Information last week here, Sam Davies of the International Chamber of Commerce informs Kat-readers that the ICC has just released a new publication entitled Trade Secrets: Tools for Innovation and Collaboration. Penned by Jennifer Brant and Sebastian Lohse, the paper is freely accessible on the ICC’s website. In the words of Daphne Yong-d'Hervé, Chief IP Officer at ICC, the paper “explains what trade secrets are, then looks into the challenges that companies face in managing trade secrets in the real economy”. Jeremy praises the initiative and wonders why ICC lacks general visible participation in mainstream IP circles. Merpel meows and asks more details about the authors of this paper.

* A Most Un-Magical of U.S. Trade Mark and Copyright Disputes

There’s a harsh IP battle going on in the US between Disney and Canadian electronic musician and performer Deadmau5.  As Lucas reported in April, it concerns a US trade mark application covering a mouse-head design that Disney considers confusingly similar, also diluting its several trade marks that depict the globally famous head of Micky Mouse. Lucas updates readers on the recent twists of this story, the most intriguing of them being the cease and desist letter that Disney received from Deadmau5 for having used one of his songs without the artist’s consent.

* Spirit Bear: not an Urban myth, rules court

“The Spirit Bear” is a nickname for the Kermode bear, a white, non-albino species of the black bear, which can be found on the Northwest coast of British Columbia, Canada. The City of Terrace and Kitasoo Band Council, in British Columbia owned trade mark rights over the name “Spirit Bear” and opposed to its use on vodka and gins by a local distillery. The Federal Court that heard the case just issued its decision, and Rebecca recounts how it went. 

* A Transatlantic Battle Over Ownership of Vivian Maier’s Photographs

This is about an intriguing multi-jurisdictional case concerning the photographic works of Vivian Maier. The latter was born in New York City to a French mother and an Austrian father. She lived most of her life in Chicago working as a nanny for well-to-do families, and died in Illinois in 2009. While a nanny, she took thousands of photographs, but most of them were never developed during her life, remaining in thousands of undeveloped rolls that she stored in a storage facility. When she failed to pay storage rent, her photographs, films, and negatives, were auctioned off and bought by several bidders, some of which published and used them in various ways. After Vivian shuffled off her mortal coil, various subjects between the US and France claimed copyright and copyright infringement over her works. Moral rights over unpublished works appear to be the big issue here, Marie-Andrée explains.

* The Copyright and Technology contest has now a winner

On 1 October 2014 the London offices of Reed Smith LLP are hosting the 1-day Copyright and Technology conference, which promises to be very engaging and carries a discounted registration fee for IPKat readers. On 25 August last the IPKat launched a contest, requiring aspiring entrants to create an artistic work that would illustrate in the best/most humorous/saddest/etc the relationship between copyright and technology. After a tough selection process, Eleonora announces the winner.

* Broadcast Monitoring Service is (Partly) Fair Use for New York Judge

In  Fox News Network, LLC v TVEyes Inc., No. 1:13-cv-05315, Fox News sued TVEyes, a US company that monitors and records “all content broadcast by more than 1,400 television and radio stations twenty-four hours per day, seven days per week, and transforms the content into a searchable database for its subscribers”, among the latter being the White House and the U.S. Army. The searchable database that TVEyes created provides portions of the transcript highlighting the keyword and a thumbnail image of the show that used that keyword, along with video fragments of the indexed show. Does the defendant's activity fall within the scope of fair use? Do read Marie-Andrée’s report of the decision just issued by the Southern District Court of New York (SDNY) if you want to know!

After filing a Micky Mouse-looking trade mark and suing Disney for copyright infringement over one of his songs, Canadian electronic musician and performer Deadmau5 goes on the Katfloor again, this time for having de-branded his Ferrari and affixed a wrap in the design of the Nyan Cat 2011 YouTube phenomenon, as well as a a ‘Purrari’ badge and the image of a prancing cat on the bumper.  The iconic automotive company Ferrari was not particularly happy with his interpretation, and Katfriend Lucy Harrold speculates how things would go if the eclectic Canadian would have done that in the UK.

* BREAKING NEWS: CJEU says that libraries may digitise books and make them available at e-reading points, and that licences do not prevent exceptions

Eleonora pens about the CJEU’s decision in Case C-117/13 Technische Universität Darmstadt v Eugen Ulmer KG. As the very same Eleonora reported at the time when the case was refereed, it concerns unauthorised digitisation of one book by a university library to allow the latter’s electronic consultation from the library terminals, as well as the possibility to allow users to print out the work on paper and store them on a USB stick. It is all about the Infosoc-Directive system of exceptions and its national implementations, a matter on which the Copyrightkat has a lot to say.  

* BREAKING: AG Cruz Cruz Villalón suggests adoption of new 'causal event' jurisdiction criterion for online copyright infringement cases

An Austrian photographer sees his works diffused over the internet by a German company without his consent. Which national court owns the jurisdiction to hear the case under Article 5(3) of the Brussels I Regulation? This is a tricky question, as the CJEU’s case law has been adopting different approaches for assessing jurisdiction in such cases. And it might become even trickier, Eleonora explains in this post, should the CJEU agree upon the Advocate General (AG) Cruz Villalón’s Opinion in Case C-441/13 Pez Hejduk v EnergieAgentur.NRW GmbH. Between the “intention to target” criteria of Sportradar [here and here] and the “accessibility” one adopted in Pinckney [herehere and here], the AG identifies a third way for assessing jurisdiction when it comes to infringements causing “delocalised” damages. Can the “causal event” criterion lead to a revolution in EU jurisdiction rules for copyright litigations?

* BREAKING NEWS: AG Cruz Villalón thinks that there can only be "analogue" exhaustion and suggests that the right of adaptation has not been harmonised

Another groundbreaking opinion comes from AG Cruz Villalón, this time on case Case C-419/13 Art & Allposters International BV v Stichting Pictoright. As Eleonora explains in this post, the case is basically about the question: "Can the person who owns copyright to a painting and has previously consented to having the image represented therein marketed as a poster later object to the commercialisation of the same image transferred on canvas?”. AG Villalón provides for his take on this issue, focusing on the meaning of “right of adaptation” and on the hot topic of exhaustion in digital and physical environments.

* Bye-bye Mike -- but will we soon say hello to an IP Tsar?

The IPKat weblog has carried numerous pieces on the advantages of having an Intellectual Property Enforcement Coordinator of the sort that has emerged in the US (see eg here, here, here and here). The guy who held a none-too-similar position in the UK is Mike Weatherley MP (Intellectual Property Adviser to the Prime Minister, Member of Parliament for Hove and Portslade and unashamed promulgator of Rock the House), who is hanging up his Parliamentary boots at the next Election in order to pursue an honest career outside Westminster. Jeremy reflects again on the importance of this figure, hoping that the debate over its possible implementation and strengthen in the UK may be soon re-opened.

* Examining IP PhDs: a Katchat with IP profs

Three learned IP Professors, namely Lionel Bently (University of Cambridge), Eoin O'Dell (Trinity College Dublin), and Estelle Derclaye (University of Nottingham), answers Eleonora’s questions upon the sense of IP PhD (“What are you looking for in a PhD thesis when you examine it?”; “Have you noticed any changes in the average quality of IP PhD theses over the past few years?”; “Do you find it difficult to fail a thesis?; When a thesis goes wrong, whose fault is it?”; “If you could make one change to the current system for examining PhD candidates, what would it be?”; “How marketable do you think are the skills of PhD candidates you are used to examine inside academia, as well as outside it?”). Like earlier Eleonora’s posts on this topic [here, here, here], here’s another must-read for those who are thinking of going in for this life-changing experience. 

* Copyright dispute relating to "Ascot" photograph: will a Munich model now receive "100,000 Euros for her boobs"?

Birgit tells of a copyright suit currently pending before the Court of Munich upon a photographic composition of the late eccentric German and Swiss photographer Gunter Sachs. The photograph at stake, called “Ascot”, depicts the German model Kirsten Klie bare-chested in a mostly unbuttoned white blouse, wearing a hat and binoculars. The very same Kirsten alleges to have contributed to the work with further added value, creatively advising Sachs before the composition was made and claiming royalties accordingly. Hot stuff, here.

Retro Bag Shop’s application; opposition by Brian Poulton (Case 0/358/14) is a trade mark case decided last month by Hearing Officer Oliver Morris in the UK Intellectual Property Office. The case concerned an application to register a figurative trade mark with the text “NORTHERN SOUL - KEEP THE FAITH” and the image of a black fist. For those to which those elements do not ring a bell, “Northern Soul” is one of the musical genres that characterized the Mod movement, a youth current born in the UK in the '60s. The very same black fist is rooted in that movement’s cultural tradition. Can symbols of the glorious “rage and style” guys be monopolised by a bag seller? Jeremy leaves the floor to Katfriend Shalini Bengani, who recounts how it went.

There has been plenty of coverage of the UK IPO/FCO-led China-UK Intellectual Property Week, with even the  BBC's Today radio show picking it up.  Put together by Britain’s multi-tasking China IP attaché Tom Duke, the visit took in eight cities in five days, spreading the word for and about IP in the UK.  It has been equally well received in China, with meetings on the margins at a high level and TV coverage on their national broadcaster, CCTV.   But what did our reporters on the ground think?  Participants and Katfriends Gwilym Roberts (CIPA, Kilburn & Strode) and Catherine Wolfe (ITMA, Boult Wade Tennant) share their thoughts.
* Those European Courts: a Venn diagram
Last month, here, Jeremy bemoaned the confusion caused by there being so many courts that have the word "European" in them. Fellow blogger Kuan(self-described as "half lawyer, half geek, mainly harmless") must have felt the same anxiety when he depicted a useful visual graphic that displays the overlap (or absence of overlap) of these noble institutions.

Neil addresses the issue of trade marks co-owned by a number of persons under the lens of that IP right’s rationale. How we conceptually justify multiple ownership of a trade mark, eg, with reference to the quality control notion? Can it be said that all owners use, or potentially use, the mark, in a uniform manner -- or the “quality control” is just another legal fiction of the magical IP world?

Monday miscellany

"Patent Value": tomorrow's dialogue.  The event co-hosted tomorrow by the IPKat and the IP Finance blog, in which Intellectual Asset Management editor Joff Wild and our blogging colleague Neil Wilkof discuss the impact of patent litigation on the values of patents, still has a little room for late registrants -- but if you want to come you'll have to let us know by mid-day today.  Details can be found here.  And if you have already registered but can't come after all, do let us know, so our kind hosts at EIP can cater refreshments for the right number of people. Thanks!

E-CRIME: coming your way! The IPKat has been asked to highlight the commencement of a fresh new European project, called E-CRIME, which focuses on the economic impact of cyber-crime in Europe. Naturally he is delighted to oblige, even if in Merpel's opinion E-CRIME is just a teensy-weensy bit descriptive for a project focusing on cyber crime. You can find more about this project by reading the short note on it on the IP Finance weblog here or by clicking on to the E-CRIME website here.

Long-time friend and trade mark connoisseur David Goldring (Oakleigh IP Services) disturbed this Kat's pre-weekend reveries on Friday with the following message:
I spotted this mark [ie the mark displayed on the right] in this morning’s UK Trade Mark Journal No.2014/038 dated 12 September 2014: 
UK00003023916, 27 September 2013 (25) Image for mark UK00003023916 BOLLOX Class 25 - Adult male under garments, including boxer shorts and under pants. 4E Products Ltd Representative: Bingham, Ian Mark 
Perhaps this is one for the IPKat, to show the folly of the system?? Perhaps the word describes the examination procedure? Does it not offend Section 3(3)(a) [of the Trade Marks Act 1994, equivalent to Article 3(1)(f) of Directive 2008/95] as being contrary to public morality – "bollox" being the modern spelling of bollocks (especially in electronic media)? [if Google Search hits are a reliable reflection of modern spelling trends, the modern spelling has already overtaken the more correct original]  Also, is it not descriptive of the purpose – being applied for in respect of the goods/clothing in which testicles are contained/protected/worn?  Can you register ARMS for a sweater, LEGS for trousers or FEET for shoes? Surely registration of such words can and will offend a reasonable section of the public. 
Merpel recalls the words she wrote on this very weblog back in November 2008, commenting on an indignant guest post by Katfriend Sally Cooper concerning the UKIPO's willingness to tolerate applications for A*****E and Q***** (here)
" ... in the light of the [OHIM] Grand Board of Appeal ruling, in Case R 0495/2005 G Application of Kenneth (t/a Screw You) [2007] ETMR 7, it's difficult to say that there's such a thing as a sign that's inherently offensive and contrary to good morality right across the Nice Classification: while A*****E will be regarded by most consumers as extremely unpleasant for most classes of goods and services, it's possible to think of relevant consumers of specific goods and services who might find the concept a turn-on. ...".
This Kat feels that the Trade Mark Registry is not the best place to deal with issues of offensive branding. After all, failure to obtain trade mark registration doesn't offer any comfort or protection to the public: traders can carry on using brands like this which, precisely because they are offensive, or cause some degree of amusement to those who favour them, are always likely to some sort of market success.

Morocco: great place for an IP policy ...?
Around the weblogs.  Afro-IP's running series on African countries' IP policies has now reached number 34, thanks to Caroline NCube, this being the turn of Morocco.  The jiplp weblog warns of predatory publishers who are chasing IP authors (among others) in the hope of enticing them to pay to publish their works in journals of doubtful value.  On Class 46, Laetitia Lagarde reports a recent decision in which the General Court of the EU had to stretch the imagination a little in order to find genuine earlier use of one DELTA mark, in what might be reasonably viewed as a different form from that in which it was registered, in order to support what is probably a quite justified opposition to the registration of another DELTA mark, where both were in the general area of healthcare.  Finally, we discover from SOLO IP that that intrepid solo practitioner Barbara Cookson is now in Toronto, attending this year's AIPPI conference. It is rumoured that a Kat is among the Canadian pigeons too ...

Something to read. Volume 4, issue 3 of the Queen Mary Journal of Intellectual Property has now been published by Edward Elgar Publishing under the direction of the journal's Editor-in-Chief, our good friend and emeritus Kat Jo Gibson.  You can peruse its contents here.  Enjoy!  Incidentally, each issue offers free access to one of the articles published in it: this issue's special offer is "Intellectual property rights and benefit sharing from marine genetic resources in areas beyond national jurisdiction: current discussions and regulatory options" by Claudio Chiarolla. You can access Claudia's article from the contents page above or just click here.

Dutch court refers questions to CJEU on e-lending and digital exhaustion, and another Dutch reference on digital resale may be just about to follow

The Tom Kabinet portal
A few days ago Future of Copyright reported that the Court of Appeal of The Hague has decided to seek guidance from the Court of Justice of the European Union (CJEU) as regards a couple of copyright-related matters of topical interest right now, these being e-lending and digital exhaustion. 

This Kat has learned from a Dutch Katfriend who wishes to remain anonymous but nonetheless tweets as 'Pacta sunt servanda' (@TreatyNotifierthat it is Court of First Instance of The Hague (Rechtbank Den Haag), not the the Court of Appeal, which has decided to refer the case. It has done so in the context of proceedings between the Dutch Association of Public Libraries (Vereniging van Openbare Bibliotheken) and Stichting Leenrecht (this a collection agency designated by the Dutch government for payments of lends, which it then redistributes to rights holders via a separate organisation named LIRA).

Although the questions have yet to be finalised [the parties have time until 1 October to make comments], so far they read as follows (in Dutch of course):

"1. Dienen de artikelen 1 lid 1, 2 lid 1 sub b en 6 lid 1 Lrl aldus te worden uitgelegd dat onder “uitlening” als daar bedoeld mede is te verstaan het voor gebruik ter beschikking stellen
- voor een beperkte tijd
- zonder direct of indirect economisch of commercieel voordeel
- op afstand
- door middel van downloaden
- op basis van een one user once [sic!] copy model
- via voor het publiek toegankelijke instellingen
van een kopie in digitale vorm van auteursrechtelijk beschermde romans, verhalenbundels, biografieën, reisverslagen, kinderboeken en jeugdliteratuur?
[can lending ebooks on a one-user-one-copy basis be regarded as lending under the Rental Directive? 'Pacta' explains that in its ruling the 
Rechtbank Den Haag said that lending can be interpreted as: i) the term in normal use (according to the judge: transferring temporarily the "beschikkingsmacht" (the power to do things with it) to someone) which would (again according to the judge) not apply to ebooks in this case, as one version would remain stored on the servers of the library; or ii) is defined by Article 2(1)(b) of the Rental Directive: making available for use (....), which is technique-independent (and thus would apply to ebooks)]

2. Als vraag 1. bevestigend moet worden beantwoord, geldt voor de toepassing van de uitleenexceptie in de zin van artikel 6 Lrl de eis dat het door de instelling uitgeleende exemplaar van het werk in het verkeer is gebracht door een eerste verkoop of andere eigendomsovergang van dat exemplaar in de Unie door de rechthebbende of met zijn toestemming in de zin van artikel 4 lid 2 Arl?
[if so, is it required for the use of the public library exception, that the work has entered into circulation through a first sale (...) of that copy in the Union by the rights holder or with his consent? 'Pacta''s comment is: the question focuses on whether sale is a requirement as at the moment ebooks are formally never truly sold, but they are rented for an indefinite duration; and whether exhaustion of the distribution right is a requirement for the application of the lending exception. The judge is quite clear that the answer should be in the negative as there is no reason to assume that exhaustion is a requirement for application of lending under the Rental Directive]

3. Als vraag 2. ontkennend moet worden beantwoord, stelt artikel 6 Lrl andere eisen aan de herkomst van het uitgeleende exemplaar, zoals bijvoorbeeld de eis dat het uitgeleende exemplaar is verkregen uit legale bron?

4. Als vraag 2. bevestigend moet worden beantwoord, dient artikel 4 lid 2 Arl aldus te worden uitgelegd dat onder de eerste verkoop of andere eigendomsovergang van materiaal als daar bedoeld mede wordt verstaan het op afstand door middel van downloaden voor gebruik voor onbeperkte tijd ter beschikking stellen van een digitale kopie van auteursrechtelijk beschermde romans, verhalenbundels, biografieën, reisverslagen, kinderboeken en jeugdliteratuur?"
[This question, only to be answered if sale is a requirement regarding lending+lending exception in the Rental Directive, concerns whether the distribution right is exhausted when the library downloads (and thus formally rents for indefinite duration) the ebook. In other words: should ‘obtaining’ an ebook be regarded a sale within the Rental directive? The judge appeared inclined to respond in the negative though]

Apparently, this may not be the only new reference from The Netherlands, as another one in the context of litigation arisen as regards a digital marketplace for second-hand ebooks may follow soon. Still 'Pacta' explains what this other case is about:

"Tom Kabinet ( started in July this year (covered in many Dutch media; also covered here) a digital marketplace for second-hand ebooks using EPUB (the usual ebook standard for most apps/suppliers but not, for example, Kindle).

Sellers create an account (which includes a bank account number for receiving earnings) and can upload ebooks onto the site. They agree to deleting their own personal copies from their own device(s) and confirm that they had legally obtained them [this is very similar to the functioning of ReDigi (a "pre-owned digital marketplace" for music, software, ebooks and audiobooks), which was at the centre of an interesting US decision last year (here and here) which denied the applicability of the first sale doctrine (the US equivalent to EU exhaustion) to digital subject-matter].

Buyers may buy ebooks, which they download from the site; and to which Tom Kabinet attaches a “visitable and invisible” digital watermark “hash”, which enables its identification should it surface on, say, a piracy-oriented website.
Think-outside-the-box solutions
may not always
be appreciated at first

Upon launching the website, Tom Kabinet sent letters to publishers explaining the initiative and inviting them to support it. It is not completely surprising that they didn’t. Two organisations representing publishers (Nederlandse Uitgeversverbond and Groep Algemene Uitgevers) filed instead a “kort geding”, ie a legal action seeking a verdict on short notice based on what the likely judgement would be in a fully fledged court case. They sought an order that would require Tom to stop its service, amongst others because Tom could not guarantee that the seller would remove his/her own copy. They further indicated that storing the ebook was an act of reproduction action and a communication to the public; and that Tom was facilitating the distribution of illegal ebooks. 

In its verdict on 21 July last the 
Rechtbank Amsterdam (Court of First Instance of Amsterdam) made a few interesting remarks: (1) there was no evidence of bad faith on the side of Tom Kabinet; (2) there was uncertainty surrounding the applicability of the principle of exhaustion and the Court did not feel like following certain German decisions [on which see further below]; (3) the judge declined to say which of the parties was “right” regarding the legality of Tom Kabinet's initiative in light of the existing legal uncertainty (specifically mentioning the potential questions in the public libraries case), and held instead that Tom maintained a defendable position that probably only in a fully fledged court case could be assessed. 

There may be two further steps after a verdict of this kind. A “kort geding” can be appealed (spoed appel; accelerated appeal) which will result again in a “kort geding”-like session”. Both parties furthermore may start a fully fledged court case (a “bodemzaak”). The news is that last week the publishers indeed filed the accelerated appeal. No bodemzaak has been started yet, but the publishers keep this option open.

Now how will this action end up at the CJEU? Not at the spoedappel stage as that is too time-critical. But it may happen in the possible bodemzaak. Assuming the verdict will be upheld on spoedappel; I think the bodemzaak will be started by the publishers as the stakes are simply too high and the legal uncertainty too big. As this is a matter of principle and Dutch judges are quite keen on seeking guidance from the CJEU, 
I think it is highly likely there will be a reference for a preliminary ruling mainly regarding exhaustion, unless ... the answer to question 2 of the CJEU reference made last week in Vereniging van Openbare Bibliotheken (VOB) v Stichting Leenrecht answers the exhaustion question in such a way that it is also applicable here.

Thanks so much 'Pacta' for this helpful insight! Now, why are e-lending and digital exhaustion so controversial?

But can you hide under an ebook?

Future of Copyright explains that public libraries started lending ebooks to their users last January. However, the legal position of ebook lending in The Netherlands is unclear at the moment. Since the current lending provision is not specifically addressed at ebooks, it is debatable whether ebooks fall within the scope of the provision. Moreover, the provision is not applicable to software. The question arises whether ebooks could be considered software. Therefore, libraries that want to include ebooks in their catalogue have to sign contracts on the lending conditions with every separate rights holder.

IPKat readers might also remember that in its draft White Paper [leaked by the IPKat here - by the way: a White Paper from the Commission was is expected this month: does anyone have any info in this respect?] the Commission expressed the view that, despite the overall unclear legal regulation of e-lending, a legislative initiative in this area would be premature.

Digital exhaustion

In the wake of the post-UsedSoft [here] stress disorder, it is unclear whether there might be digital exhaustion for copyright-protected subject-matter other than software. Incidentally, that was a case where the principle “pacta sunt servanda” was somehow disregarded, as the CJEU held that a licence may be actually considered a sale if certain conditions are met.

Hereby we rule:
no digital exhaustion 

beyond software!
Last year the IPKat had a poll with its readers, and the result was that the majority (61%) of respondents thinks that, when given the opportunity to address this issue, the CJEU would say that exhaustion of the right of distribution as per Article 4(2) of Directive 2001/29 (the InfoSoc Directive) encompasses both tangible and intangible copies.

However, both German courts and Advocate General (AG) Cruz Villalón disagreed with this conclusion.

Earlier this year the Court of Appeal of Hamm ruled [here and here] in fact that the right of distribution is not subject to exhaustion when it comes to digital subject-matter [audiobooks in that case] other than software. The court denied the applicability of the principles expressed in UsedSoft - "whether directly or by analogy" - beyond the (narrow) confines of the Software Directive, which is to be considered as lex specialis in relation to the provisions of the InfoSoc Directive. In so doing, the Hamm judges upheld the earlier decision of the Regional Court of Bielefeld [here]

Coming to AG Cruz Villalón, in his Opinion last week in Case C-419/13 Art & Allposters International BV v Stichting Pictoright [here] he appeared to suggest that the InfoSoc Directive is all about tangible - not also intangible - exhaustion. 

When interpreting the meaning of 'object' in Article 4(2) of that directive, he held the view that this term does not refer to the copyright-protected work, but rather its material support. According to the AG, this interpretation would be confirmed by Recital 28 to the InfoSoc Directive, which states that copyright protection "includes the exclusive right to control distribution of the work incorporated in a tangible article" and "the first sale ... of the original of a work or copies thereof by the rightholder or with its consent exhausts the right to control resale of that object", with a clear reference to the need for a tangible support.

In light of the above, it is thus apparent that whether the InfoSoc Directive allows digital exhaustion is fairly controversial at the moment, so a clarification from the CJEU would be welcome indeed.

UPDATE: the post has been amended to reflect Barbara Stratton (@B_Stratton1) 's observations, for which Pacta and this Kat are grateful.

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