Applied Technolgies Manufacturing v. Apple Projects (Mr Richard Arnold Q.C.; O-348-04; 11.11.04)
The Registrar ordered revocation for non-use of the mark MOVIESTAR (a series of marks in stylised form) registered in class 9 because the proprietor had not responded to the application.
The proprietor appealed, saying that it had never received the application sent by the Registry. On investigation, the Registry found that the Royal Mail had been unable to deliver the letter to the address for service, but had left a card advising the recipient that the item could be collected from the local Royal Mail sorting office. For reasons given at the hearing, the proprietor had failed to act upon the card.
Mr Arnold would have preferred to dispose of this matter but could not do so because the applicant did not appear at the hearing. He therefore ordered that the proprietor file evidence supporting what its representative had said at the hearing and evidence of use of the mark or reasons of non-use. If it did not, the Hearing Officer’s decision would be set aside, but the discretion under rule 31(3) would be exercised against the proprietor. If it did, the applicant would then be given the opportunity to consider whether it consented to the appeal and if it did, the appeal would be allowed and a timetable was set out for exchange of evidence. If not, the matter would come back before Mr Arnold.
In so ordering, Mr Arnold held that under rule 10(4), since there was no prescribed manner in which a document had to be sent, the application which was sent to the proprietor’s address for service by registered post had been “properly sent”. Further, under rule 31(2) (which provides that the registered proprietor has 3 months from “the date on which a copy of the notice is sent by the Registrar to the proprietor” in which to file a counter-statement etc.) the operative event in setting the time limit was the sending of the documents and not their receipt. Mr Arnold did not find support for this interpretation in section 7 of the Interpretation Act 1978 (and in this respect Mr Arnold differed in his reasoning from Mr Hobbs in the OIOI decision O-340-04 (see below) and he did not agree with the implicit finding that time starts to run again if the Registrar discovers that the application has not been delivered and re-sends it). Mr Arnold held that there was no burden on the Registrar to verify tha the documents had been received.
If no counter-statement is received, under rule 31(3), the Registrar has a discretion as to whether or not to treat the proprietor as not opposing the application. In this case, contrary to rule 54, the Registrar had not allowed the proprietor to be heard before a decision had been taken adverse to its interests. This was a serious irregularity. Without the safeguard of rule 54, the system would be contrary to Article 6 of the European Convention for the Protection of Human Rights.
The proprietor should have been notified that the Registrar proposed to exercise its discretion under rule 31(3) to treat the proprietor as not opposing the application for revocation unless it requested a hearing or made written submissions. By analogy to CPR rule 13.3 (judgment in default), for the discretion to be exercised in a proprietor’s favour, it would need to establish that: (a) it had not complied with the time limit under rule 31(2) for good reason, such as not receiving the application for revocation; (b) it had a real prospect of successfully defending the application or that there was some other good reason why it should be permitted to defend; and (c) there was no other good discretionary reason why it should be denied relief.
Coggins v. Skjelland Group (Mr Geoffrey Hobbs Q.C.; O-340-04; 22.10.04)
The Registrar ordered revocation for non-use of the device mark OIOI registered in class 25 because the proprietor had not responded to the application. The proprietor appealed, saying that she had never received the application sent by the Registry because she had ceased connection with the address for service. Mr Hobbs set aside the decision and directed the Registrar to indicate to the parties how he would proceed under rule 31(3).
Initially, the application was sent by recorded delivery but returned by the Royal Mail as “undeliverable”. The Registrar then sent the application by ordinary post to the same address. Mr Hobbs held that the combination of rule 10(4) and section 7 of the Interpretation Act 1978 (which provides that where an Act requires a document to be served by post then service is deemed to be effected by properly addressing, pre-paying and posting a letter containing the document and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of the post) meant that service was effected when the Registrar dispatched the letter the second time.
Mr Hobbs held that the Registrar was under no duty to verify the currency of the address for service, but the failure to comply the requirements of rule 54 was a serious irregularity.
Oakley v. Animal (Mr Peter Prescott Q.C. sitting as a Deputy Judge;  EWHC 210 (Ch); 17.02.05)
Directive 98/71/EC on the legal protection of designs provides a 12 month “grace period” in which publication of a registered design by the proprietor would not invalidate it.
The Registered Designs Regulations 2001 implement the Directive by amending the Registered Designs Act 1949. These Regulations came into force on 9 December 2001, some six weeks after the implementation date of 28 October 2001 specified by the Directive.
Under the amended Act, infringement issues for all registered designs should be considered under the new law, and the new law on validity applies to new registrations, but the old law on validity continued to apply to any existing registration, being one which had been applied for at any time up till 9 December 2001. A derogation from the immediate implementation of the new law in respect of all registrations, old or new, permitted under the Directive allowed the continued application of the old law (Article 11.8). The parties disagreed as to whether such a derogation, which involved a policy choice, could properly be implemented by the Secretary of State simply laying Regulations before Parliament, or whether primary legislation and proper Parliamentary consideration ought to have be used instead.
Section 2(2) of the European Communities Act 1972 (“ECA”) gives a Government Minister the power to change laws using regulations “for the purpose of implementing any Community obligation” (section 2(2)(a)) or “for the purpose of dealing with matters arising out of or related to any such obligation” (section 2(2)(b)). Further, section 2(4) ECA permits the Minister to make the Regulations without necessitating approval from Parliament. Section 2(2) together with section 2(4) have been described as a “King Henry VIII clause” and should be construed narrowly with any doubt resolved against the Executive.
The deputy judge held that the UK was not under any “obligation” to use the Article 11.8 derogation so the Secretary of State could not rely on section 2(2)(a). Having reviewed the dearth of case law on the scope of the power in section 2(2)(b), and concluded that:
“[it] does not enable the Executive to make secondary legislation with the potential to amend or repeal even an Act of Parliament, and to achieve a result not required by a Community obligation, just because its purpose is in some way related to or arises out of that obligation…”
The deputy judge found that a policy choice – to derogate or not to derogate? – was not a mere matter “related to” the Directive within the preferred meaning of section 2(2)(b) ECA, and therefore the Regulations purporting to implement that choice were ultra vires.
In relation to the “blue pencil test”, Mr Prescott held that since, in passing the 1949 Act Parliament had chosen the regime in relation to validity, absent the ultra vires Regulations 12(2) and 12(3), the old law on validity should still apply as that was the intent of Parliament despite the fact that Parliament has never in fact addressed the choice set out in the Directive. In the result, Mr Prescott found in favour of Animal.
The deputy judge examined the ECJ judgment of Markopoulos (C-255/01) and whether the UKwas entitled to use the derogation in Article 11.8 of the Directive after the implementation date. The ECJ decided that a MemberState cannot exceed the ultimate time limit for derogation by a late transposition of, in that case, the Qualifications of Auditors Directive retrospectively implementing a derogation. It is not clear if this decision is specific to the facts or has general application.
As a result of the late implementation of the derogation, designs registered in the “delay window”, i.e. 28 October 2001 to 9 December 2001, are governed by old validity law when they should be governed by new law - something not permitted under EU law. The deputy judge’s ultimate solution was to “blue pencil” Regulation 12 to change the phrase “before the coming into effect of these Regulations” to the words “before 28 October 2001” to cure the defect. This does not, however, address the question of whether retention of the old law was a legitimate option at the date of the Regulations.
Decisions of the Scottish Courts
Tayplan Ltd v. D & A Contracts* (Lord Kingarth;  ScotCS CSOH 17; 28.1.05)
The importance of keeping on top of ownership of IPR was emphasised in this recent Scottish decision on title to copyright in a house design. If ownership of intellectual property rights is not properly assigned and kept track of on a formal legal basis this can lead to difficulties as and when enforcement action is required.
The pursuers/claimants, a property development company, commenced proceedings for infringement of copyright in regard to certain house type design drawings in the Court of Session in Scotland. The defenders were also a property development company who were accused of being about to develop their site in accordance with the copyright drawings. Before the pursuers could get to proof (trial) on the evidence to establish their case of infringement the defenders requested a preliminary hearing (known as a procedure roll debate) on the issue of title to copyright. This type of hearing is equivalent to a strike out hearing under English procedure. It was argued by the defender that, at the time the proceedings were raised, the pursuers did not have sufficient title to the copyright in question and that the action should be dismissed.
At the hearing before one of the Scottish IP judges, Lord Kingarth, various arguments were made regarding the chain of title. Originally the copyright had belonged to the individual designer, a Murray Watt of Classic Design Partnership. The design had been drawn on behalf of a company, Braid Homes Limited, to a planning brief supplied by them. There had been a letter exchange in May 1999 which had finished off with a letter from Braid Homes which ended with the following statement: “Once completed the copyright to all designs, drawings, perspectives, layouts and art work relating to the above development will become the sole property of Braid Homes Limited”. It was accepted by both sides that this was not sufficient to be an agreement as there was no offer and acceptance. This statement was categorised as a new contractual provision.
The pursuers’ argument was that subsequent actions were enough to demonstrate a binding contract. In particular, there was a subsequent assignation of 10 April 2003 by Mr Watt’s partnership to Braid Homes Limited. However, Braid Homes Limited had also assigned the copyright to the drawings of Mr Watt to the pursuers – notably prior to the assignation by Mr Watt to them - on 1 March 2000. Clearly Braid Homes did not own copyright at that date and so it was accepted that this did not effectively assign the copyright in question. However, the pursuers’ argument was that it gave them a contractual right to obtain a copyright assignation from Mr Watt. Part of that argument was that the assignation of 1 March 2000 clearly assigned, in favour of the pursuers, the contractual rights, which they claimed they had by virtue of the 1999 exchange of letters, to an assignation from Mr Watt of the relevant copyright. If it did not, then the 10 April 2003 assignation simply completed title by virtue of accretion or ratification.
The defenders argued that the pursuers must have title at the time the action was raised which was 26 February 2003. This pre-dated the April 2003 assignation. A title defect could only be cured during the action if the pursuers basically had title at the time they raised it and could complete it. A personal right to acquire a copyright was not enough. They also criticised the detail of the parties to the assignations and communications in question as they did not tie up when analysed.
The pursuers’ argument basically was that they had a personal right to acquire the copyright at the time the action was raised which was enough to be completed by the assignation of 10 April 2003 or to be capable of being completed by the time of the proof or trial. They compared this to the position in England which would be that there was an equitable right to copyright which would enable them to bring proceedings for infringement.
Lord Kingarth, decided that there were arguments either way on whether the pursuers had sufficient right to entitle them to bring the proceedings in the first place. However, they did have a clear, unqualified personal right to demand an immediate assignation from Mr Watt of the copyright in question and there was nothing to suggest that Mr Watt, as original owner of the copyright, would at any stage have done anything other than to comply with any request for an assignation. There were no authorities which suggested that the personal right to acquire title was insufficient to enable proceedings to be raised. Furthermore, Lord Kingarth indicated that “if the pursuers could thus be said to have had a least sufficient title to raise the present proceedings, this would it seems mean that that the position in Scotland in practice at least was the same as the position in England where, in similar circumstances, a so-called equitable owner could, it appears, at least raise proceedings for infringement”. His Lordship commented “it would be unfortunate if the right to bring proceedings for infringement of copyright, the substantive law of which is common to both jurisdictions and is governed by the Copyright, Designs and Patents Act 1988, was thought to be significantly different as between them”.
Thus His Lordship agreed that the pursuer did have a sufficient right to bring the action and could proceed to trial. His Lordship did not, however, decide that the pursuers’ rights had already been completed by the assignation of 10 April 2003. This was because it was an assignation from the partnership of Ronald W Watt, Chartered Architects rather than from Murray Watt himself. Thus further clarification was needed on this issue. The circumstances were that the pursuers were allowed to proceed to proof (trial) subject to satisfaction on this aspect in due course.
Profile Software Ltd v. Becogent Ltd* (Lord Kingarth;  ScotCS CSOH 28; 16.2.05)
Lord Kingarth, adopted a commercial and practical interpretation of various IPR Agreements. The Court chose not to apply a strict literal interpretation to the Agreements to avoid an absurd situation where no party would have been able to enforce them on the basis that title to sue for breach of and the interest in enforcing compliance with a software licence vested in two separate parties.
The Pursuer/Claimants commenced proceedings for infringement of copyright alleging that the Defenders had breached the terms of a software licence by decompiling, adapting and copying licensed software. Before the issue of infringement could go to Proof/Trial the Defenders requested a preliminary hearing to challenge the Pursuer’s title to enforce the terms of the software licence. This type of hearing is known as a Preliminary Proof in Scotland and is broadly equivalent to a strike-out hearing under English procedure. It was argued by the Defender that the Pursuer had no title to enforce the terms of the licence agreement which had been granted by a liquidator and therefore the part of the action seeking return of licensed material should be dismissed.