Change in law opens door to off-limits creative work

Copyright holders of creative works are being urged to make their mark and claim their rights, following the launch of a new licensing scheme that will enable reproduction of so-called ‘orphan’ creative works and performances.
Orphan works are copyright works where the right holder is unknown or cannot be traced and in the past this meant the works could not be reproduced.  Now, anyone can apply to the Intellectual Property Office (IPO) for a licence to use an orphan work, if they can show they have made real efforts to identify or trace the holder of the copyright.  They will have to pay a fee, and royalties will be held by the IPO for eight years in case rights holders come forward.   
The scheme will enable creative works and performances, such as diaries, photographs, films or pieces of music, to be reproduced on websites, in books and on TV, whether for commercial or non-commercial purposes.   Without the licence, any reproduction would infringe copyright in the UK.   
Designed to give wider access to culturally valuable creative works, which may have previously remained out of public view because the rights holders cannot be identified, a licence will provide rights for up to seven years.   
Protection for copyright holders comes with the IPO holding all royalties it receives for orphan works in a ring-fenced account for eight years from the date of the licence.  The IPO can also refuse to grant a licence, for example where any proposed use could have a negative impact on the value of the work. 
The announcement of the new licensing scheme coincides with the introduction of the EU Orphan Works Directive, which enables museums, galleries and other cultural institutions across the EU to digitise certain orphan works and display them on their websites.  The objective is to increase access to Europe’s cultural heritage for works that are currently only available for viewing in a museum, archive or library. 
The UK licensing scheme and the Directive are complementary but separate.  Unlike the EU directive, the UK Orphan Works licensing scheme applies to all types of orphan works and provides for broader commercial as well as non-commercial use. It can be used by anyone and is not just restricted to cultural and heritage bodies.
Explained Breeze & Wyles Solicitors:  “There are commercial opportunities for users of these orphan works under the new licensing scheme, and some people, such as photographers, have sounded their concerns about a licence being granted after a cursory attempt to find the original owner.   But hopefully a combination of a fairly tough application process, and the fees that will be payable, will provide the required control.  
 “But if copyright owners want to be sure that their works aren’t subject to any future licensing under this new regime, they should make sure that their identity is well known, ideally by inclusion on the work itself.  That’s not always practical, but it’s another thing to bear in mind when authoring or holding such content.”  
ENDS
 
Web site content note: 
This is not legal advice; it is intended to provide information of general interest about current legal issues.

Cadbury’s imperial coat of purple under threat

Rivals given the go-ahead to cash in with replica purple branding, as prime Easter selling season arrives

A long-running court battle between confectionary giants Cadbury and Nestlé has seen the UK Supreme Court throw out an appeal by Cadbury against an earlier judgement that refused to secure their unique colour purple as a trademark.

And despite this being a clash between two international confectionary titans, intellectual property lawyers say the lesson is one that small business would be well advised to learn.

Long time emblem of royalty and emperors, and a symbol of power and nobility, the distinctive shade has been used by Cadbury for its milk chocolate for over 90 years, since it was introduced in 1914 as a tribute to Queen Victoria. But now their rivals Nestlé could cash in with a replica wrapper, just in time for an Easter bunny bonanza.

The UK Supreme Court refused to consider an appeal against a ruling by the Court of Appeal in October, putting an end to Cadbury’s hopes of stopping rivals adopting the distinctive purple wrapping. In the Court of Appeal ruling, judges agreed with Nestlé that the specific shade of purple, identified by its design and print industry reference number - Pantone 2658C – could not be trademarked.

Their judgement hinged on Cadbury’s description of the use of the colour, saying that they were not entitled to register the trade mark for the colour purple because its description as 'the predominant colour applied to the whole visible surface of the packaging of the goods' did not satisfy the requirement of a sign, nor the requirement of the graphical representation of a sign, within the meaning of Article 2 of the Trade Marks Directive 2008/95/EC.

“This is a tale of two international companies with mega brand budgets battling it out in the courts. It shows the lengths that some companies will go to in protecting their brand and the value that they place on that brand identity.” said commercial expert Brendan O’Brien of Breeze & Wyles Solicitors LLP. “But in these big cases there are always lessons for small companies.

“The first one is probably that prevention is better than cure. You are unlikely to be able to defend yourself in the regal style of a Cadbury chocolate bar, so think carefully about what you have that is unique, and how you may be able to protect it. If you’re in the early stages of development, then find out whether your ideas have the potential to be trademarked, before you’ve gone too far down the road.”

He added: “The other important lesson to be learned is that you should never mess with the big brands. Nestlé’s pockets are just as deep as Cadbury’s, so they were equally matched in this case, but if you try to mimic any well known brand identity on a similar product, don’t imagine they won’t spot you. They have teams on alert, watching out for this sort of thing.”

• Société des Produits Nestlé S.A. v Cadbury UK Ltd (Lewison LJ, Sir John Mummery & Sir Timothy Lloyd; [2013] EWCA 1174 Civ; 4 October 2013

ENDS

This information is not intended as legal advice


Internet Goliaths give a lesson for smaller business

A court battle between software giant Microsoft and broadcasting colossus Sky has delivered a sharp lesson in the need to check out trade marks before launching a new product, which experts say is just as relevant to small business.
Microsoft are being forced to change the name of their SkyDrive online storage after Sky issued proceedings alleging trade mark infringement and passing off, arguing that the average consumer would make a link to the Sky brand. Sky’s claim - backed up with evidence of calls to their helpline from customers who had assumed it was one of their services - was successfully upheld in the High Court.
Sky also successfully argued that there was a serious risk to their reputation and that Microsoft’s use of SkyDrive would dilute the brand; and that Microsoft’s actions amounted to passing off by showing goodwill that was generated across Sky’s broadband business and digital content storage which Microsoft could draw upon.
An attempt by Microsoft to counter-claim invalidity of Sky’s trade mark registrations on the basis that ‘sky’ was simply descriptive of cloud computing was unsuccessful.
The case has highlighted the need for companies to undertake clearance searches to check there is no conflict with an existing registered mark and also to minimise the risk of encroaching on the goodwill and reputation of another company which could give rise to a claim of ‘passing off’ such as this.
Explained Commercial expert Brendan O’Brien of Breeze & Wyles Solicitors LLP: “It turns out that Microsoft had done their research back in 2007 but perhaps underestimated the importance of the Sky brand, believing that the company was solely concerned with broadcasting. But Sky had started to supply internet services in 2006 and by 2010 was in use in 3million households and they raised an objection to the SkyDrive name at the outset, which Microsoft decided to contest.
“But the lesson is not just for big business. Global brands are particularly zealous about protecting their name and image and it would be quite wrong for a small company to imagine that they are too small to be noticed by a major international company or that such a company would not bother pursuing a little business.”
He added: “It’s a complex area, but the message to any company looking to develop a new brand for a product or service is to make sure a realistic assessment has been made against current brands, including the potential for any future developments by any similarly named competitor, particularly in fast moving technology markets such as this.”
British Sky Broadcasting Group Plc, Sky IP International Limited, British Sky Broadcasting Limited, Sky International Ag v Microsoft Corporation, Microsoft Luxembourg Sarl
ENDS
This information is not intended as legal advice

Innovating companies can gear up for clever tax benefits

Innovation companies can now maximise the advantageous tax regime that’s been brought in for patented products.
The Patent Box tax regime came into effect in April and it gives companies a reduced 10% corporation tax rate on the proportion of profits derived from the exploitation of patents.
It applies to patents granted by the UK Intellectual Property Office, the European Patent Office or certain other specified EEA countries.
First announced in 2010, the reduced corporation tax rate is designed to encourage businesses to develop and actively exploit patents, rather than sitting on intellectual property (IP) as often happens. The new regime will be phased in over the next four years, with tax savings gradually rising from 60% of potential benefits in year one to the full 100% from April 2017.
The Government has introduced the Patent Box to encourage innovative businesses to invest in the UK and say it should improve the competitiveness of the UK tax system for high-tech companies.
Companies can only benefit from the Patent Box if they are liable to Corporation Tax and make a profit from exploiting patented inventions; they must also own or hold an exclusive license for the patents and must have undertaken qualifying development on them.
But there are opportunities for companies beyond the original patent, as the tax relief is going to be available for profits on whole products, even where the patented item is only a small part of that whole. It is also going to extend to profits earned worldwide, even if the product is patented in just the UK.
As well as providing relief on IP income, the tax relief will also be allowed on license fees received on a patented product or process.
The other bonus for companies is that the Patent Box relief can be backdated to profits earned up to six years prior to the granting of the patent. This should help fund the cost of patenting where there is a short lifespan on a product.
Because it does not apply to non-exclusive licenses, exclusive licenses falling within the Patent Box will be far more valuable to potential licensees. The tax relief can also be claimed for related non-patent IP, such as trademarks and registered designs, so they do not need not be exclusively licensed.
Explained corporate law expert Brendan O’Brien: “There is scope for companies with activities that would not currently fall within the Patent Box to review their strategy and if necessary to modify their activities so that they qualify - although, as with all things, everyone needs to weigh up the admin burden of opting in to such a scheme.”
He added: “It’s a complex area, but any company involved in innovation and patenting should be reviewing what they are currently doing and looking how they might benefit from the new regime.”
ENDS
This information is not intended as legal advice


IP Seminar: Have you left the door open for thieves?

“Whether a start up or a multi million pound business, your Intellectual Property is your most valuable asset.” – Brendan O’Brien, Director, Breeze & Wyles Solicitors LLP

Intellectual property, sometimes abbreviated IP, is a legal definition of ideas, inventions, artistic works and other commercially viable products created from one's own mental processes and essential to the operation of your business. Millions of pounds are lost annually across all industries through IP theft, proving that protection is a necessity not a luxury.

What's in it for me? Creating value from Intellectual Property

In conjunction with Red Sky Partnership Ltd

Date: Thursday, 5 July 2012Time: 9.30am - 11.00am

Venue: Breeze & Wyles Solicitors LLP, 2nd Floor Stag House, Old London Road, Hertford SG13 7LA

This free seminar will ensure that you’re fully informed on all aspects relating to intellectual property, so that you can safeguard and make the most of what is rightfully yours. It is therefore essential for all business owners.

Using a series of case studies, Sarah Staines of Breeze & Wyles Solicitors LLP will demonstrate the very real value of intellectual property in the operation of any business and give an insight into what can go wrong if protection is not sought.

Attendees will also learn how to reduce tax with Research and Development tax credits, and how this can benefit your business. This is a government incentive for companies developing new technology, and an incentive that government know works, so it keeps getting better with each year. Make sure you are not missing out.Following the talks by Breeze & Wyles and Matrix, there will be opportunity to network with other attendees.Spaces are limited to 25 attendees, therefore please respond by Thursday, 28 June 2012 to secure your place. To register, please email Rachel Harper at rachel.harper@breezeandwyles.co.uk or El Edmunds at el.edmunds@breezeandwyles.co.uk. Alternatively, please call 01992 558411.


Why it is good for me? Getting the terms of Trading right

A basic understanding of the law

English law requires four elements for the formation of a contract:
• an offer;
• a corresponding acceptance;
• consideration; and
• an intention to create legal relations.
Having properly drafted and signed terms and conditions will ensure that these four requirements are met.

Clarification

Terms and Conditions allow you to ensure that each party is clear on the agreement and what will happen if either party fail to fulfil their obligations. In the unfortunate event there is a disagreement then referring to the terms and conditions may clarify matters and prevent the need for costly litigation.

Restrict your Liability

If things do go wrong then you want to restrict your liability. Know what you can or cannot limit and use your terms and conditions to protect you and your company.
An important point is that of limiting legal jurisdiction to England and Wales; e.g. if you provide a service to a foreign Company and it refuses to pay then unless you have specified that in the event of a dispute the laws of England and Wales will prevail you may have to sue in the other party’s country, under foreign laws.

Debt Recovery

Your terms and conditions can specify payment requirements and the consequences of late payment. Provisions relating to interest and compensation for late payments can be set out in your terms and conditions, equally early payment discounts could also be included to encourage prompt payment.

Intellectual Property

If Intellectual Property is likely to be created in the process make sure each party knows who will own it. Unless specified the creator owns it but this may prevent the party from using the products or services later if they do not ensure that those rights are transferred to them. Additionally if the creator is generating new Intellectual Property Rights you should make sure that when you finish the contract those rights are licensed to you in perpetuity so that you cannot later be prevented from using it.

Supports an Excellent Service

Use your terms and conditions to back up an excellent service and/or product. Your terms and conditions are an insight to how you run the rest of your company – what do poorly drafted terms and conditions say about the rest of your company?
Most importantly......

Use your terms and conditions! Ensure that each customer/client returns a signed copy to you prior to commencement of their order. Finally keep the terms and conditions up to date – things change, such as VAT rates – you don’t want to be out of pocket due to outdated terms and conditions.

For further information or a review of your existing terms and conditions please contact Brendan O’Brien brendan.obrien@breezeandwyles.co.uk or telephone 01992 558411.


What's in it for me? Creating value from Intellectual Property

What's in it for me?
Creating value from Intellectual Property

“Whether a start up or a multi million pound business your
Intellectual Property is your most valuable asset.” Brendan O’Brien - Director

Using a series of case studies Sarah Staines of Breeze & Wyles Solicitors LLP
will demonstrate the very real value of intellectual property in the operation of any business.

You are invited to a free seminar at Breeze & Wyles Solicitors LLP new offices

at

2nd Floor Stag House
Old London Road Hertford SG13 7LA

on

27 March 2012 at 12.30 pm

Spaces are limited to 25 attendees.
Please respond by 7 March 2012
by e mail to Nick Gething at nick.gething@breezeandwyles.co.uk or
by telephone on 01992 558411


Is your Business worth more than you think?

Intellectual property – what is it and why is it so important?

Whether you're an inventor, an author, a business tycoon or the owner of a small family business protection of your intellectual property is paramount.
What is Intellectual Property?

Intellectual property (IP) could be referred to as “creations of the mind”, for which exclusive ownership rights are recognised. These rights belong to a variety of intangible assets (assets that you can’t see), including inventions, phrases, symbols, music, works of art, and designs to name but a few. Some of the most common types of IP are copyright, trademarks, industrial design rights and patents. The term “Intellectual Property” is far reaching. However, most business owners only see IP as Patents or invention.

The importance of protecting intellectual property:

IP rights are valuable assets for your business - possibly among the most important it possesses. Businesses rarely value the IP or if when they do they do not understand the relationship between the value of terms such as ‘goodwill’ and IP.
Your IP rights can:

• set apart your business from its competitors
• provide revenue through licensing or sale
• offer customers something innovative and diverse
• form an important part of your promotion or branding
• be used as security for borrowing

What can be protected?

Amongst other things you can protect:

• Your business name
• logo
• designs
• inventions
• works of art
• works of intellectual effort
• trademarks

Only some IP is automatically protected by law; but there are other types of legal protection available. However, you must make the appropriate application to take advantage of the protection afforded by them.

It makes sense to do all you can to protect your business – this includes the IP. You can:

• protect it against encroachment by others and defend in the courts your sole right to use, make, sell or import it
• stop others using, making, selling or importing it without your permission
• earn revenue by licensing it
• exploit it through tactical associations with other businesses
• make money by selling it

What next?

Start by asking yourself: Why should others profit from my hard work?
The answer is obvious: They shouldn’t!
Ask further questions such as:
Who owns my website?
The company logo was designed by a third party – who owns the IP?
How do I protect my IP?

For answers to these questions and any other queries you may have we would be happy to help.

Please do not hesitate to contact Brendan O’Brien or Damian Pitts on 01992 558411 or brendan.obrien@breezeandwyles.co.uk or damian.pitts@breezeandwyles.co.uk


Flower power wins the day in Interflora trademark battle

Internet advertisers who use competitor names to draw traffic have been dealt a rap on the knuckles following a high profile battle between Marks & Spencer and Interflora.

In the fast growing world of internet advertising, new online techniques are demanding new rules and the latest ruling from the Court of Justice of the European Union (ECJ) says that a trademark owner can stop a competitor from using their trademark as a keyword in a search engine such as Google.

But the judgement stopped short of a complete ban, saying the competitor would have to be taking unfair advantage of the trademark owner’s reputation or devaluing the trademark itself.

Marks & Spencer had selected the word ‘Interflora’ as a keyword on Google’s paid referencing service, AdWords. As a result, when a member of the public searched for Interflora on Google, a Marks & Spencer advertisement appeared at the top of the screen, as a ‘sponsored link’.

Interflora objected to this and brought proceedings in the High Court on the basis that M&S was abusing its trademark. The English court referred the issue of whether a competitor could use a trademark as a keyword to the ECJ, who published their ruling last week (24th November).

The ECJ ruled that a trademark owner was entitled to prevent a competitor from using its trademark as a keyword in order to advertise identical goods or services, or where using the trademark as a keyword amounts to taking advantage of the reputation of the trademark owner or is likely to dilute or tarnish the trademark.

Explained Brendan O’Brien Head of Business Services: “Although this involved the might of Marks & Spencer versus a franchise representing small florists across the land, I suspect that usually it is a smaller company that wants to take advantage of the reputation of a large company’s trademark. Small businesses should take note of this case and be aware that nowadays trademark owners are vigilant in protecting their rights, both online and offline.”

However the ECJ did not outlaw using a trademark as a keyword completely: this would be allowed, the Court said, where the advertisement put forward alternative goods and services and did not merely offer an imitation of the trademark owner’s goods or services and provided the advertisement did not dilute or tarnish the trademark.
He added “As is so often the case, you can do it if you do it right, so before you use McDonald’s as a keyword to advertise your takeaway, get advice from an expert.”

ENDS

This information is not intended as legal advice

Interflora Inc and Another v Marks and Spencer plc Times Law Reports 24.11.2011
First Council Directive 89/104/EEC Articles 5(1) and (2)
Council Regulation (EC) no. 40/94 Article 9(1)A


Innovating companies need to shine up their patents

Innovation companies need to gear up to maximise the advantageous tax regime that’s set to be introduced later this year for patented products.

And with the news that protected intellectual property can attract greater investment, the move looks all the more important.

The planned move to a 10% corporation tax rate for profits attributable to qualifying patents – the so called ‘Patent Box’ - was first announced in 2010 and the Government has now released proposals for consultation, with the final legislation set to be introduced in Autumn 2011.

The consultation comes as the Intellectual Property Office has reported that research has shown that innovative companies who are protecting their IP – whether through patents, copyright or trade marks - are consistently attracting higher levels of investment.

The reduced corporation tax rate is designed to encourage businesses to develop and actively exploit patents, rather than sitting on IP, as often happens. The new regime will be phased in over five years from 1st April 2013, with tax savings gradually rising from 60% of potential benefits in year one to the full 100% in year five. According to the current proposals, the new rate will apply to global profits derived from products patented in the UK or by the European Patent Office, but it has been left open as to whether other national patents may be included in future.
The system from 2013 will benefit both pre-existing and new patents, but is available only after a patent has been granted, with a back-dated claim of up to four years to the date of the patent application being currently proposed. The Government is particularly asking for feedback as to whether the four year backdating proposal is fair and reasonable and asking business to look at their historical data.

Companies who will be able to claim the reduced rate include both licence owner and exclusive licensees; where the patent is jointly owned, all collaborators will qualify if they can show a significant contribution.

Whilst the tax break will apply to both licence income and patent income embedded in sales proceeds of patented products, it does not seem likely that income from products made from a patented process will be included, with the possible exception of pharmaceuticals, and this may lead to a review of strategy for some companies.
Explained Brendan O’Brien Corporate Law expert: “There is scope for companies with activities that would not currently fall within the Patent Box to review their strategy. If it is possible to attribute activity to a patented product instead of the process, then they could attract the reduced rate. Although, as with all things, everyone needs to weigh up the admin burden of opting in to such a scheme.”

He added: “Every company involved in innovation and patenting must now review what they are doing to see where sales and licence agreements can best benefit from the new regime.

“The other tactic that should be quickly adopted is to submit narrow focus patent applications at an early stage to enable fastest access to the so-called Patent Box, these can then be backed up by the usual applications for broad protection at a later stage. Speed is of the essence as once the application is in, it opens the door to retrospective tax claims after qualification is awarded.”

Within the current proposals, there are no plans to include profits generated from copyright or trade marks in the new arrangements.

ENDS

This information is not intended as legal advice