The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Wednesday, 31 October 2007

No new USPTO rules (yet)

STOP PRESS: The IPKat hears from reports here and here that the USPTO has been enjoined (for English speakers read "prevented") from bringing into force the proposed new rules relating to claims and continuations. These were due to come into force tomorrow (1 November), but have now been put off for at least a couple of months while a US court reaches a final decision.

US patent applicants can breathe a (temporary) sigh of relief, and allow themselves a Happy Halloween.

(right: the IPKat in disguise has a little celebration).

For more information on this and other US patent matters, the IPKat highly recommends Dennis Crouch's Patently-O blog.

Forthcoming London events - and that mysterious Italian fine

On Tuesday 13 November the Intellectual Property Institute takes pleasure in presenting the 2007 Stephen Stewart Lecture. The speaker is the IPKat's friend William Patry, who appears to have cornered the market for credentials for giving a memorial lecture in the field of copyright law (Senior Copyright counsel at Google Inc., in its New York City office. Previous convictions include copyright counsel to the US House of Representatives' Committee on the Judiciary; Policy Planning Advisor to the Register of Copyrights, US Copyright Office; full-time law professor; as well a private lawyer. Blogger and author of the seven-volume Patry on Copyright, published in January 2007 by Thomson/West, the largest work written on the subject).

Right: a visual metaphor for the fault line that divides rights owners from users -- the chasm can be bridged, but at what personal cost?

William's subject is “Metaphors and Moral Panics in Copyright”. As the lecture information explains,

"Intellectual property is intangible and abstract; not surprisingly, so are key concepts within the field, such as the idea-expression dichotomy. Early rationales for copyright in the UK to encourage learning, and in the US to promote the progress of science, are also abstract. Cognitive linguists propose that metaphors are essential to understand such abstractions. Under this approach, metaphors are not affective or rhetorical devices, but rather cognitive vehicles by which we directly understand one conceptual domain in terms of another.

Left: detail of an early steam-powered VCR. Never popular with consumers because of the condensation it deposited on TV monitors, this device was never perceived as a threat to the economic well-being of rights-owners.

Those advocating grants of robust copyright employ a number of metaphors to achieve their desired result, usually in conjunction with what British sociologists in the 1960s and 1970s began calling "moral panics," seen in Jack Valenti's testimony that "the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." Those who oppose copyright have their own sets of moral panics and metaphors, such as "information wants to be free." The lecture will review how metaphors and moral panics have been used to obfuscate rather than enlighten".

Ponders the IPKat, what can we learn from these recent experiences? does enlightning ever strike twice? Kindly hosted by London-based law firm Slaughter and May, this event's doors open at 4.30pm for a 5pm start and entry is free -- but you have to register with the IPI here first.

Panic here; don't panic here; Boston Strangler here

The next meeting of BLACA (the British Literary and Artistic Copyright Association) takes place on Thursday 8 November at 6.15 pm, in the Adelaide House, London office of Berwin Leighton Paisner. The speaker this time is the IPKat's friend John Enser (Partner, and Head of Music, Olswang). John's topic is "Fair dealing in a digital world". Having seen and heard John in action, the Kat can confirm that he is an entertaining and knowledgeable speaker -- so this is a golden chance to see him in action.

BLACA emphasises that non-members are welcome, particularly if they would like to consider joining the association. For further details, see

Yesterday the IPKat expressed his surprise at the magnitude of an administrative fine imposed on unauthorised file-sharers in Italy. Today he is assisted by his much-appreciated former student Luca Giove , who tells him
"I think that the Italian police authorities probably applied Article 174bis of the Italian Copyright Act, which is not available in the WIPO text but was introduced in 2000 and amended in 2003.

Pursuant to this provision an administrative fine is applicable in addition to the criminal fine for each violation of the criminal provisions on copyright. The fine is therefore proportional to the number of infringed copyright works and/or copies. Each violation may carry an administrative fine of between Euro 103 to Euro 1,032.

Euro 103 x 120,000 files is approximately Euro 12,000,000 ...".

Castles in Spain, trade marks in vain?

Thanks to his good friend and legal scholar Dr Verena von Bomhard (Lovells, Alicante) the IPKat has picked up some valuable intelligence concerning a case that was referred to the European Court of Justice from the Mercantile Court in Barcelona: Case C-328/06 Alfredo Nieto Nuño v. Leonci Monlleó Franquet. Advocate General Paolo Mengozzi rendered his Opinion on 13 September 2007 and it is still unavailable in English (you can however read it in German, Spanish, French, Italian, Portuguese, Polish, Finnish, Estonian, Czech and Slovene. Says Verena,

"This case concerns well-known marks and Article 6bis of the Paris Convention. The question posed is whether a "well-known mark" in a Member State is one that is known and established in a Member State or in a signficant part of it, or whether it can result from recognition of the mark in an autonomous region, province, or town, depending on the products or services in question and their target customers.

The background is that Mr Monlleó, owner since 1978 of a real estate agency in the Spanish city of Tarragona operating as FINCAS TARRAGONA (fincas = plot, realty, property etc.), sought the invalidation of the trade mark FINCAS TARRAGONA, registered in the name of Mr Nieto (bthis was by way of counterclaim, since Mr Nieto had filed an infringement claim based on his registered mark). Apparently Mr Monlleó had managed to establish that, in Tarragona, the name of his real estate agency was well-known [comment: this is bound to occur where people use/register completely descriptive names. It is not easy to see how Mr Nieto managed to register the term FINCAS TARRAGONA as a Spanish trade mark in the first place].

Mr Mengozzi's reply was refreshingly novel, as befits one who is new to this field. He said that the concept of "well-known" as referred to in Article 4(2)(d) of Council Directive 89/104 is that of the Paris Convention on the Protection of Industrial Property and that, therefore, one must focus on the Convention. He then explains at great length the different possible general interpretations of the Paris Convention as granting an "equal treatment" only or as "unionist" in the sense that it establishes generally applicable rules both to merely domestic situations and those that involve foreigners.

However, as Mr Mengozzi says, the ECJ should not pronounce on this as the EU is not a member of the Paris Convention. Accordingly, he finds another way of answering the question: referring to Article 4(4)(b) of the Directive, he argues that the Member States are free to introduce in their national legislation the concept of unregistered trade marks. Based on the freedom which member states enjoy in defining the requirements for the protection of unregistered trade marks, he deduces that they are also free to define a well-known mark. That leads him to say that the member states are free to consider, as also being "well-known" within the meaning of Article 4(2)(d) Directive, marks that are not well-known in the entire territory or even in a significant part of it, but merely in a "more reduced geographic area".

It is, however, a simple fact that Spanish legislation chose NOT to introduce the concept of "unregistered marks". It seems fancifully creative to allow the judges of a member state the full freedom to interpret the concept of "well-known" under the Paris Convention simply because the legislation could have opted to introduce the protection of unregistered marks".

The IPKat agrees with Verena's observation that it is disconcerting that merely use-based rights of purely local significance (to use the language of Article 8(4) of the Community Trade Mark Regulation) could ultimately be held against Community trade marks via the notion of "well-known marks" which is contained in Art. 8(2)(c) of the same Regulation. It would be reasonable to assume that the Community legislature clearly considered that such rights could have no more than mere local significance.

More on Tarragona here
Tarragon vinegar here

Tuesday, 30 October 2007

Veni, vidi, fimi

The IPKat is grateful to his learned colleague Ben Challis (Music Law Updates) for drawing his attention to a press release headed "ITALIAN RAIDS LEAD TO FINING OF ILLEGAL MUSIC UPLOADERS". The release, from Italian organisation FIMI (the umbrella organisation of the Italian music recording industry), reads:

"Four illegal music file-swappers face fines of €12 million

Italian police questioned four people for illegally uploading copyright infringing music onto the internet following a raid near Milan. In addition to pressing criminal charges, the police have issued the uploaders with an administrative fine of €12 million.

Officers from the Guardia di Finanza di Milano took part in Operation Genux which saw the arrest of four individuals aged between 30 and 45 in the town of Melgnano. They had been sharing more than 120,000 files containing copyright infringing music using the DCC++ peer-to-peer network.

The police seized six computers, seven external hard discs and more than 2,300 CD-Roms during the raids. The products seized included catalogue from artists such as Madonna, Vasco Rossi, U2 and Elisa. The police also seized copies of software programmes such as Vista and Office, as well as video games.

Left: the IPKat, in enforcement mode

Officers were acting on search warrants issued by Alessandra Simion, the Public Prosecutor of Lodi and were assisted by the Italian anti-piracy federation FPM. The €12 million administrative fine was levied under Article 174 of the Italian Copyright Act".

The press release then continues with a message from FIMI chairman Enzo Mazza, who says:
"People are wrong to think they are anonymous when they post material onto peer-to-peer networks. In fact they can be located and legal action brought against them. The administrative fines levied in this case show that abusing copyright on a grand scale can be an extremely costly business.”
This is an amazing sum of money -- we're talking of euros here, not lire -- and its punitive effect will send out a clear message to all large-scale Italian file-sharers. But the IPKat's a little puzzled. WIPO's text of Article 174 of the Italian Copyright Act reads:
"In penal proceedings under this Section injured party, as a civil complainant, may at any time request the penal judge to apply the measures and sanctions specified in Articles 159 and 160" [Kat's note: Articles 159 and 160 deal with the removal or destruction of infringing copies].
Does this provision really empower the police to impose such a fine? And can a fine of this magnitude really be imposed as part of an administrative procedure, without so much as a trial? He hopes that one or two of his Italian cousins will put him right.

More Genuxes here, here, here and here

Worth a flutter?

The IPKat has read with great interest a news item, via Conservation Commons, about how researchers who helped discover a new species of Mexican butterfly are offering to sell the naming rights in order to raise money to fund more research. It is hoped that at least US$50,000 will be raised by auctioning off the rights to name the 4-inch "owl eye" butterfly, which lives in Sonora, a Mexican state bordering Arizona.

Right: the butterfly in question (male, above, and female, below)

Says the article:

"According to the scientific tradition, discoverers of a new species have the say in naming it. In recent years, some discoverers have auctioned off their naming rights to raise money.

... naming rights for a new monkey species brought in US$650,000 two years ago. A group of 10 new fish species that went on the naming auction block at the same time earlier this year brought in a total of US$2 million".
The auction, on the internet auction site, closes this Friday, 2 November. When this item was posted, the bidding was only up to US$6,250 -- so here's a golden opportunity for everlasting fame and gold-plated conservation credentials.

Merpel says, whoa there! Things aren't so easy, especially for those of us who are intellectually proprietorily inclined. How about some answers to the following questions?

* What is the legal basis upon which the discoverer of a new butterfly species can sell the naming rights? Is this right exclusive and irrevocable, or can it be challenged by the subsequent disclosure that the butterfly was previously found by a third party, who also wishes to sell naming rights?

Left: the IPKat and Merpel ponder how to distinguish the little girl butterfly from the little boy butterfly ... (cyber-cats)

* Is the denomination of a butterfly a "use" of the name for the purpose of acquiring distinctiveness as a trade mark, for demonstrating genuine use of that mark or for infringing another's mark?

* Is there a register of butterfly names? Does it protect against duplication of names?

* What would happen to anyone who used the words (i) Champagne or (ii) London Olympics 2012 in the butterfly's name?

* do the naming rights confer any entitlement to the genetic make-up of the butterfly or to any chemical compounds that may be extracted from it?

* what about the caterpillar?

Cousin Caterpillar here (in this blogger's opinion, one of the greatest songs ever written/performed)
Caterpillar recipes here

MTV v MTV; latest UPOV and Hague accessions

The increasingly useful Birgit Clark has drawn the attention of the IPKat to a remarkable news item concerning Hungarian public broadcaster Magyar Televizio -- an organisation that, until now, has carried out its daily tasks free from the attentions of this weblog. Magyar Televizio, known affectionately by its acronym MTV, survived the Soviet occupation -- but it is now facing a far sterner test: vigorous litigation against Viacom, owner of the MTV music channel. The Magyars are seeking to keep the American interlopers from using the MTV acronym on their home turf in Hungary.

The IPKat appreciates that MTV is extremely popular among the younger, livelier elements of the television-watching community, and he suspects that even he would be unlikely to watch the one channel in the mistaken belief that it was the other -- but he recalls that the Hungarians are a nation that greatly values tradition and the cultural role of their own institutions. Verdict: a home win.

Check your horoscope in Hungarian on MTV here

The IPKat has been solemnly informed of some recent notifications of commitment to the norms of international intellectual property law. By notice UPOV No. 104, the Republic of Turkey announces the deposit of its instrument of accession to the International Convention for the Protection of New Varieties of Plants (UPOV), as revised to 1991. The Convention enters into force in Turkey on 18 November 2007. Another notice, Hague No. 83, signals the accession of Mongolia to the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs. The Geneva Act will enter into force in respect of Mongolia on 19 January 2008.

Right: Mongolian designer shoes from

Monday, 29 October 2007

Big deal for Diehl, but Varec presses for disclosure

The IPKat is grateful to his old, old friend Tom O'Shea for drawing his attention to the Opinion of the Advocate General in Case C-450/06 Varec v État belge. This is ostensibly a public procurement case - and the IPKat never reads those - but the Court has been asked by the Belgian Conseil d’État (Council of State) whether a body hearing an appeal concerning the award of a public contract must protect the confidentiality of business secrets while remaining entitled to take account of evidence containing them.

The Belgian Defence Ministry invited tenders for the supply of tank track links. Two bids were received, one from Varec, the other from Diehl Remscheid. The contract was awarded to Diehl and the award decision, which listed a number of technical, administrative and legal grounds for excluding Varec’s bid, stated that Diehl satisfied all the selection criteria. That decision was based on, inter alia, consideration of certain plans and samples that were annexed to Diehl’s bid and which, at Diehl’s request, were returned to it after evaluation of the bids. Varec, challenging the award of the contract, asserts that Diehl’s bid did not in fact comply with all the criteria for the award. In order to evaluate that claim, it said, Diehl's plans and samples should be examined as evidence both by the reviewing court and by Varec after it asked for that review to take place. Diehl objected to lodging those plans and samples on the ground that they embodied confidential information and business secrets to which it did not wish Varec to have access. The auditeur (a sort of Advocate General in the Conseil d’État) considered that, if the contracting authority does not lodge a complete file, it has failed in its duty to assist in ensuring proper administration of justice and fair proceedings, and the Conseil d’État has no alternative but to annul the contested award.

Advocate General Eleanor Sharpston QC has taken the side of fair play against the argument that business secrecy is paramount. She advises the court to rule that:

"Article 1(1) of Council Directive 89/665, read in conjunction with the provisions of Council Directive 93/36 relating to the protection of confidential information, requires a review body

(a) to take cognisance of the whole of the administrative file and other evidence on which the contracting authority based its award and

(b) to accord confidential information the same protection as is accorded to it at the award stage.

Those obligations must be carried out subject to the right to a fair hearing and to equality of arms, which implies in particular that the review body should take care not to use any evidence withheld from one or more principal parties in any way which could infringe those rights".
The IPKat comments that confidentiality is not the subject of any pan-European IP right; it is merely legal recognition that is given to a set of facts and it is bound to be subservient to any principle of European economic policy that encourages fair competition.

Right: the IPKat conducts his own examination of the technology in question ...

Merpel says, but won't this make some contractors wary about bidding for public contracts at all - and won't this have a knock-on effect upon third parties whose confidential and valuable know-how might have to be disclosed to a competitor or a competitor's licensee?

China trips

China agrees to TRIPs amendment

ChinaDaily reports that the Standing Committee of the National People's Congress of China yesterday accepted the amendment to the TRIPs Agreement on patents and public health. The amendment will come into force once two thirds of TRIPs members accept it. The members have set themselves an informal deadline of 1 December 2007 to reach this deadline. Until then, the 2003 waiver remains in force.

The IPKat suspects that the December deadline won’t be met. According to the WTO website, 11 Member states have agreed to the amendment (China is the twelfth). This brings the total acceptance level up to 8% - only 59% to go then…

Ruotsi saved for the Swedes

What with all the excitement of his trip to Sweden for the copyright conference, the IPKat nearly overlooked another of those fascinating bits of minor EU legislation that speak volumes for the cultural differences of Member States. The law in question is Commission Regulation 1255/2007 of 25 October 2007 amending Commission Regulation 874/2004 laying down public policy rules concerning the implementation and functions of the .eu Top Level Domain and the principles governing registration.

Right: this charming chappie was found in the course of a Google search of the wildlife of Ruotsi ...

This Regulation is only two Articles in length, but the sting is in the annexed tail. As the Preamble says:

"Article 8 of Regulation (EC) No 874/2004 implements the public policy rules concerning geographical concepts by providing for a procedure to permit Member States, candidate countries and all the members of the European Economic Area to request the registration or the reservation of their name by their national governments. In pursuance of this objective, and with a view to fully guaranteeing the geopolitical and linguistic diversity of the European Union and the interest of both Member States and European citizens, on 10 October 2005 Regulation (EC) No 874/2004 was amended by Commission Regulation (EC) No 1654/2005 amending Regulation (EC) No 874/2004 laying down public policy rules concerning the implementation and functions of the .eu Top Level Domain and the principles governing registration".
In other words, EEA Member States can stop applicants registering the names of their countries as .eu domain names in lots of different languages. The list has been refreshed, following the recent admission of Bulgaria and Romania to the EU. Some countries have got quite gung-ho about this, listing every national and regional/provincial name they can think of, while others have been quite modest. Top of the list is Germany (141 names), followed by Belgium (131) and Spain (130). Luxembourg comes last with only three, which is a pretty poor show if you consider that even Malta scores 13. The United Kingdom notches up a meagre 14. The reserved names for Sweden include the exotic-sounding Ruotsi -- a name which, Merpel supposes, many ignorant people (but not of course herself) would first look for on a map of Africa.

Sunday, 28 October 2007

Does spinach curb the urge to litigate? Lacoste caught in crossfire

All the way from the US comes this link to the NY Times, via the IPKat's friend Miri Frankel. It deals with Jessica Seinfeld's best selling cookbook, Deceptively Delicious, described as "a cookbook for parents of picky eaters". Readers have pointed out some similarities between this book, published this month by HarperCollins' imprint Collins, and The Sneaky Chef by Missy Chase Lapine, published by Running Press. Both authors maintain that parents should purée healthy foods like spinach and sweet potatoes and hide them in childhood favourites like macaroni and cheese or brownies, to ensure their consumption by recalcitrant minors. It transpires that The Sneaky Chef was submitted to HarperCollins twice—once in February 2006 without an agent and again in May last year, the second time represented by an agent. Both times she was rejected. Lapine finally landed a deal with Running Press in June 2006, the month that Collins won an auction to publish Ms Seinfeld’s book.

The refreshingly good news is that no-one is threatening to sue anyone. Says the IPKat: bad news, perhaps, for kids who don't want to eat their spinach even when it's camouflaged. Adds Merpel: bad news for litigation lawyers too?

The IPKat's friend Juan Ramón Rubio Munoz writes to tell him about an interesting example of "trade mark abuse by third parties, undesirable association, parody and other misuses" -- the subject of one of the workshops at the MARQUES conference in Porto last month. He tells the Kat of a recent Spanish episode:

"Unfortunately, most of the info I have is in Spanish, but I’ll try to translate. First, by way of background, there is a political confrontation between the Socialist Party (PSOE, in government) and the Popular Party (PP, in opposition) relating to the inclusion in the public schools’ programme of “educación para la ciudadanía" (education for citizenship). This subject is supposed to teach children a school about the civic values of Spanish society (sex equality, non-discrimination by sex orientation, etc) and is promoted by the Socialist Party, whereas the Popular Party is opposed, since they are afraid it’s going to be a means for promulgating propaganda regarding the left’s social values. In the middle of this polemic, the young militants of the Socialist Party (“Juventudes Socialistas”) broadcast a video promoting “education for citizenship”, making a parody of a very popular TV quiz. In the original TV programme, two competitors try to discover as many words as possible of a set of hidden words, on the basis of their initial letter (one word for each one of the letters of the alphabet) and a short definition or description of the term. For instance: “Starting with “R”: biggest city of Italy, capital of this country” = “Rome”, and so on. The young socialist militants have juxtaposed in their parody a normal left-oriented young girl and a caricaturized extreme “posh” right-oriented young guy. Their questions and replies seek to illustrate (in exaggerated form) the different perception of these values by the two opponents. For instance, to the question: “Starting with “I”: Role of the women in our society”, the right-oriented guy replies “Inferioridad” (Inferiority) whereas the left-oriented girl replies “Igualdad” (equality). To the question “Starting with “M”: Legal union of two people with the same sex” the right-oriented guy replies “Mariconas” (a depictive term for homosexual) whereas the left-oriented girl replies “Matrimonio” (marriage). And so on. At the end of the video, the right-oriented guy gets a “Failed” score in civic values. You can watch the parody in full here.

As you can imagine, the right-oriented guy represents a ridiculous, silly, sexist and superficial person. But have a look to what he is wearing: a pink Lacoste polo with an exaggerated green crocodile on it".

Says the IPKat, so far as he is aware, the crocodile is blue, not green (but, then, he is a bit colourblind). Adds Merpel, Lacoste has sat back and done nothing publicly - which is probably the wisest thing to do in commercial terms. A false move by a brand owner can alienate consumers who perceive an attempt to preserve a brand's independence and integrity as a statement reflecting its own position regarding its political and sexual orientation.

Gay crocodile here

Saturday, 27 October 2007

Develey disappointed as ECJ resists Paris squeeze

Another no-hope Community trade mark appeal Case C‑238/06 P, Develey Holding GmbH & Co. Beteiligungs KG, was rejected by the European Court of Justice last Thursday, 25 October. Develey applied to register, in Classes 29, 30 and 32, the shape of a plastic bottle. The examiner, Board of Appeal and Court of First Instance (discussed by the IPKat here) all agreed that the bottle shape was unregistrable because it was devoid of distinctive character.

Before the European Court of Justice Develey argued not only that it was distinctive, but that there had been a violation of Article 6 quinquies of the Paris Convention which states:

"A. (1) Every trademark duly registered in the country of origin shall be accepted for filing and protected as [it] is in the other countries of the Union, subject to the reservations indicated in this Article. Such countries may, before proceeding to final registration, require the production of a certificate of registration in the country of origin, issued by the competent authority. No authentication shall be required for this certificate.

(2) Shall be considered the country of origin the country of the Union where the applicant has a real and effective industrial or commercial establishment, or, if he has no such establishment within the Union, the country of the Union where he has his domicile, or, if he has no domicile within the Union but is a national of a country of the Union, the country of which he is a national.
B. Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases:

(i) when they are of such a nature as to infringe rights acquired by third parties in the country where protection is claimed;

(ii) when they are devoid of any distinctive character, or consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed;

(iii) when they are contrary to morality or public order and, in particular, of such a nature as to deceive the public. It is understood that a mark may not be considered contrary to public order for the sole reason that it does not conform to a provision of the legislation on marks, except if such provision itself relates to public order.

This provision is subject, however, to the application of Article 10 bis".
It was Develey's contention that Article 6 quinquies was part of EU law since the EU and its member states were members of the World Trade Organization and Article 2(1) of WTO's Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPs) requires members to apply the substantive provisions of the Paris Convention. OHIM's failure to apply Aricle 6 quinquies meant that it had failed to protect Develey's earlier German registration of the same trade mark. The ECJ was not impressed. It said:
"40 The provisions of the Paris Convention also cannot be relied on directly in the present case.

41 First of all, the Community is not a party to the Paris Convention, in contrast in fact to the TRIPs Agreement.

42 Secondly, when the Community legislature considered it necessary to give some provisions of the Paris Convention direct effect, it expressly referred to them in Regulation No 40/94, in particular, in relation to absolute grounds for refusal, in Article 7(1)(h) and (i) of that regulation. By contrast, Article 7(1) makes no such reference in relation to the distinctive character of trade marks, and the Community legislature has in this respect created a separate provision in Article 7(1)(b) of Regulation No 40/94.

43 Thirdly, while the direct effect of the Paris Convention could flow from the cross-reference made to it by Article 2(1) of the TRIPs Agreement, such a cross-reference cannot, in the absence of the direct applicability of the TRIPs Agreement, render the Paris Convention directly applicable.

44 Consequently, in the present case, neither the TRIPs Agreement nor the Paris Convention is applicable and the Court will examine the grounds of appeal only in so far as they allege a breach by the Court of First Instance of Regulation No 40/94".
The IPKat notes that the ECJ took the remind Develey that it was the applicant to satisfy OHIM that its applied-for mark was distinctive rather than for the office to prove that it wasn't, that the German registration was not affected by the success or failure of the Community trade mark application and that, since the Community trade mark system is an autonomous regime, there is nothing incongruous about one trade mark registry finding a mark distinctive while another does not. Merpel says, looking on the bright side, Develey managed to get from an initial application to a final rejection, via three appeals, in only five and a half years. Well done!

Get the last bit out of the bottle here and here

Friday, 26 October 2007

Challenges for Media Content Producers

IPKat team blogger Jeremy is in Stockholm today, attending a conference: "International Copyright and IP Law: Challenges for Media Content Producers". This event, organised by the Media Management and Transformation Centre together with the Institute of Foreign Law, Jönköping International Business School. Some 90 academics, practitioners, rights owners and dedicated students attended, of whom (if figures cited by copyright expert Jan Rosén are true) some 30 are statistically likely to be actively involved in file-sharing.

Jan's talk, ostensibly on Swedish compliance with international copyright obligations, also provided a delightful opening into the psychology of a fair-minded, law-abiding nation when faced with the three-way collision between the interests of copyright owners, users of protected materials and the providers of the means by which the latter obtain and potentially abuse the rights of the former. He also introduced the IPKat to a term which, he suspects, he should have already known: digital Maoism.

Next to speak, giving the perspective of Swedish creators (and also, incidentally, users), was Kristina Lidehorn (Chief Legal Counsel, TV4). Kristina described the scenario of all content -- lawful and unlawful -- coming into the home through the same hole in the wall". Kristina was followed by Monique Wadsted (MAQS, but speaking for the media companies), who gave a live demonstration how torrents work (linking to The Pirate Bay) and what their significance is in commercial and legal terms [IPKat note: for an account of the threats made to TPB and their responses, click here].

This session concluded with a panel discussion, chaired by Jan, in which Kristina and Monique were joined by Johan Axhamn (secretary to the Swedish Ministry of Justice investigation into music and film on the internet), at which the battle between legal and commercial solutions was reviewed -- particularly within the context of the rights in question mainly being American, the beneficiaries being Swedes and the position of Sweden as a marginal market with its specific cultural needs. Slow responses by media companies to consumer demand, the particularly comfortable position of service providers and the effect of the IP Enforcement Directive were all under review.

After lunch barrister Gillian Davies (alias Copinger and Skone James on Copyright) touched on a technically tricky topic, the extent to which the interpretation of copyright law at national level affects international treaties.

Right: pirates flourished before an intricate web of bilateral copyright treaties gave way to the Berne Convention

Gillian explained the evolution of international treaties as they moved from establishing bare principles to requiring the adoption of minimum substantive norms, as well as the consequences of direct or indirect implementation of those norms in domestic law.

Swedish legal academic Edward Humphreys -- a driving force behind this event -- then focused sharply on the protection of TV format rights, including Big Brother, Who Wants to be a Millionaire and The Farmer Wants a Wife. After outlining the magnitude of the commercial market and the extent to which mainline IP protections skirt round format protection, Edward asked some testing questions as to how formats can best be protected, making the most of the various ingredients of any given format that might enjoy protection in their own right.

The day closed with presentations by Dimiter Gantchev (WIPO) on his organisation's work towards the establishment of a framework for "business and development" [says Merpel, is business what you do when you create IP, while development is what you do with someone else's?] and the BBC's Martyn Freeman, giving a view of the opportunities, challenges and headaches for businesses operating in a multitude of copyright regimes.

Lessig count: there was just one mention of Larry Lessig in the course of the whole day's programme. Is this, ask Merpel, the result of embarrassing ignorance or of a new European determination to think for itself?

What particularly struck this bit of the IPKat was the excellence of so much of the current research, and the high level of awareness and sensitivity to contemparary issues, that his Swedish hosts displayed.

Right: a Swedish wildcat, meditating over the concept of digital Maoism (or is it Miaoism?)

The IPKat's verdict: however much you deny it, and however much the new media make it easy to receive and absorb information from around the world, the best way to learn and think about new ideas and concepts is to sit down and talk to other people about them - particularly if those other people are fresh to you. Even when you are working in London, constantly discussing your own ideas and arguments with your own friends and colleagues is a comfortable route to complacancy and parochialism. This visit to Stockholm helped clear out the cobwebs of habits of thought, for which the Kat is truly grateful.

Further details of the programme here
All the presentations have been recorded. If you'd like to hear them, absolutely free, and if you'd like copies of the available PowerPoints, email Barbara Eklof here


This arrived from the BBC via the IPKat's friend Simon Haslam: it's a report on how, following an Interpol investigation, the British and Dutch police have cooperated in an operation to close down OiNK, a reputedly widely-used source of illegally-downloaded music. The police raided a flat in Teesside, North-East England, as well as several properties in Amsterdam. It is claimed that OiNK leaked 60 major pre-release albums this year alone, according to the International Federation of the Phonographic Industry (IFPI), who spent two years doing some investigative groundwork together with British Phonographic Industry (BPI).

The IPKat is impressed at the level of cooperation here, both between IP bodies themselves and between those bodies and the police authorities at both national and international level. Merpel wonders, though, about all the cases that never end up as triumphant victories in result of insufficient resources, getting tangled up in bureaucratic red tape and the complexity of the web of infringement itself.

Further details from IFPI here
Last squeak from OiNK
Two little piggies that got away, here ...

Thursday, 25 October 2007

Caipi capers

The IPKat earlier this week posted information concerning a Court of First Instance decision on a Community trade mark application for the word CAIPI that was available only in French and German. His old friend and inspiration Tibor Gold makes him the following kind offer (as well as giving his take on the case):

"Next time we meet I will treat you to a delicious cocktail called caipirinha, based on a Brazilian spirit called cachaça, very refreshing …

“Caipi” was refused at all instances below as descriptive, Art. 7(1)(c)).

Here the evidence appeared to establish that ‘caipi’ was a common abbreviation of caipirinha in at least some EU countries, especially in Germany. The fact that caipi has other significations had no effect on the correctness of the decisions below (DOUBLEMINT) nor was the Board of Appeal wrong to go beyond analysing the current market situation and also consider possible future developments, and nor again was there a duty on the BoA to prove that the contested sign was a dictionary word (PAPERLAB).

Next, the usual short shrift was given to arguments based on the word having been registered nationally in some EU Member States (electronica; BioID). Lastly on descriptiveness, an argument based on Art 12 CTMR was also dismissed, it appears the appellant ran a sort of Gerolsteiner type of argument that his registration would not impede third parties selling caipirinha cocktails with others’ ingredients so long as they are honest, but this found no favour having regard to the duty on OHIM to examibe strictly so as not to register invalid signs (LIBERTEL) and the finding in OLDENBURGER that Art 12 has no role to play in ex parte examination.

It followed from the finding of descriptiveness under Art. 7(1)(c)) that the sign also offended against ‘distinctive character’ in Art 7(1)(b). The appeal failed".

Verena von Bomhard (who heads Lovells' Alicante office) offers some sage advice to anyone who might overdo it:
"Caipi is Caipirinha, a Brazilian Cachaca-based drink with limes, brown sugar and crushed ice, refreshing to body and mind (until the second one, then it's DANGEROUS). Caipi is not a dictionary term but very commonly used in many countries as an abbreviation for Caipirinha.

There is also Caipirovka, the same but instead of Cachaca they use Vodka - that is NOT a "Caipi". And it's not Brazilian".
Charles Swan (Swan Turton) cites what looks like a formal definition:
"The word "caipirinha" is the diminutive version of the word "caipira", which refers to someone from the countryside, being an almost exact equivalent of the American English hillbilly. The word may be used as either a masculine or a feminine noun, but when referring to this drink it is only feminine (usage of diminutives is conspicuous in Brazil). However, a Brazilian hardly ever thinks of a "country person" when ordering a "Caipirinha". In the mind of a Brazilian, the word "Caipirinha" is mostly associated with the drink itself".
He adds:
"Isn’t caipi just a silly abbreviation of caipirinha for the benefit of non-Portuguese speakers who aren’t sure how to pronounce the word and don’t want to embarrass themselves at the bar by getting it wrong?"

House of Lords overturns CA in Yeda appeal

The long-awaited patent appeal in Yeda Research and Development Company Limited v Rhone-Poulenc Rorer International Holdings Inc and others [2007] UKHL 43 was handed down yesterday. The IPKat heard the news from his Australian friend Duncan Bucknell. Unusually, a majority of three of the five Lords of Appeal in Ordinary could be described as IP judges: Lord Hoffmann, Lord Walker of Gestingthorpe and Lord Neuberger of Abbotsbury (the other judges being Lord Phillips of Worth Matravers and Lord Mance).

In short, this was an appeal by Yeda against the Court of Appeal's refusal to allow amendments to its reference to the Comptroller General of Patents, under the Patents Act 1977 s.37(1), of the question of the true proprietorship of a patent owned RPR. This patent was for a treatment for cancer involving the use of certain chemicals in combination. Yeda initially filed a reference, alleging that it should be a joint proprietor of the patent along with RPR, asking that scientists working on its behalf should be named as co-inventors. Subsequently, following the decision of the Court of Appeal in Markem Corp v Zipher Ltd [2005] EWCA Civ 267, Yeda applied to amend its statement by

* adding references to other rules of law on which it relied for its title to the patent, and

* alleging that its scientists were the sole inventors and that the patent should therefore be transferred into the name of Yeda alone.

By the time the application for amendment was made, the two-year limitation period stipulated under the Patents Act 1977, s.37(5), had expired.

In this action the questions for determination were
(i) what a person claiming entitlement to a patent in someone else's name had to prove: was it enough for him to show that he was the inventor and that the registered proprietor was not, or did he have to allege that the registered proprietor had procured registration by breach of some other rule of law? and

(ii) whether, after the expiry of the two-year limitation period, a person could amend a claim for joint entitlement, to make it a claim to sole entitlement.
Allowing the appeal, the House of Lords (for whom Lord Hoffmann gave the main speech) said as follows:
* Sections 7(2) and s.7(3) of the Patents Act 1977 provided an exhaustive code for determining who was entitled to the grant of a patent.

* the first step in any dispute over entitlement was to decide who was the inventor of the claimed invention: this was the actual deviser of the invention.

* by s.7(4), a person who sought to be added as a joint inventor bore the burden of proving that he contributed to the inventive concept underlying the claimed invention; a person seeking to be substituted as sole inventor bore the additional burden of proving that the inventor named in the patent had not contributed to the inventive concept.

* there was nothing in the statute that said that entitlement depended on anything other than being the inventor. Nor was there any justification, in a dispute over who was the inventor, for importing questions as to whether either claimant had some personal cause of action against the other.

* the result in Markham was correct, the broad principle it established -- that any claim to entitlement to a patent, even by someone claiming simply to have been the inventor, required reliance upon "some other rule of law" -- was wrong, so that decision would be overruled. The first set of amendments sought by Yeda was thus unnecessary.

* an amendment of a claim for joint entitlement to a claim to sole entitlement was not the assertion of a new claim;

* proceedings under s.37(1) were not an ordinary civil claim, but rather a reference of a question to the comptroller. The statement accompanying the reference was not analogous to a claim form asserting a cause of action in a court of law, and the question of whether a claim to full entitlement was a new or different claim was irrelevant.

* the real question was whether amendment of the statement of facts would make the reference a new one. Plainly, it would not. In this case the reference had been made within the two-year period, identifying the statutory questions referred to the comptroller. The comptroller was still being asked to decide those questions and it was difficult to see how any amendments to the accompanying statement could make it a different reference.
The IPKat thinks this is plainly right and that it makes good sense too.

Wednesday, 24 October 2007

Me unregistrable, You Jane

The IPKat has come across a recent decision of the OHIM Fourth Board of Appeal, refusing registration of a sound mark represented as follows:

‘The mark consists of the yell of the fictional character TARZAN, the yell
consisting of five distinct phases, namely sustain, followed by ululation,
followed by sustain, but at a higher frequency, followed by ululation, followed

by sustain at the starting frequency, and being represented by the
representations set out below, the upper representation being a plot, over the
time of the yell, of the normalised envelope of the air pressure waveform and
the lower representation being a normalised spectrogram of the yell consisting
of a three-dimensional depiction of the frequency content (colours as shown)
versus the frequency (vertical axis) over the time of the yell (horizontal axis).’


The appeal and application was refused in a decision which would seem to suggest that sonograms aren't much use of representing sound marks, and that musical notation is the only option.

The Board made the following points:

* The Shieldmark case is perfectly clear. Other OHIM decisions which have sought to broaden it to sonagrams have make their comments obiter dictum. The coments in the Roar of a Lion decision were expressly dissented from.

* The wording in this case was not clear or self-contained

* The sonogram was not self-contained, clear or intelligible because it couldn't be read to produce precise sound

* It also wasn't accessible – it couldn't be retransformed by competitior into a sound. The verbal description didn't help because reader wouldn’t be able to rebut any other verbal image. While there may be specialist software available to transform a sonogram into an image, one can’t expect third party to install it on his computer. Besides, in quite forthrright terms, the Board held that it was not clear that software worked anyway.

* The representation was not self-contained if additional software was needed to read it.

* The fact that much of the public was familiar with the Tarzan yell didn't rectify the problem with graphic representation (though it could have been relevant to distinctiveness).

* The Board rebutted an attack on the accessibility of musical notation, holding that it equivalent to a language, and understood by a significant percentage of the public.

The IPKat says that if sonograms aren't sufficient for graphical representations, that leaves only musical notation, which would limit sound marks to snatches of music.

How many languages for European patents? Peer-to-patent posts again

How many languages should the European patent be in? This was the question for a recent IPKat poll. Perhaps unsurprisingly, the favourite answer was "only one". Unfortunately it is not possible to trace the origins or the identities of respondents to this anonymised survey, but the IPKat has a shrewd suspicion that the majority consists primarily of people having one or more of the following characteristics: (i) they are from outside Europe, derive most of their income from outside Europe and regard protection in that continent as a necessary evil on which the least amount possible should be spent; (ii) people who operate in one or more of the three official European Patent Office languages and (iii) people whose work lies in industrial sectors involving telecomms, software etc where most patents are not read other than for the one-off purpose of establishing industry standards.

What is notable is how many people still want translation of the full patent - or at least the claims - into the language of every European jurisdiction in which a patent takes effect.

Left: a new generation of Pollyglot Europeans is agitating for a streamlined language policy (listen here to Polly speaking Esperanto)

Combined, this group actually outweighs the "only one" group. This, says Merpel, indicates that there are still many people - academics, researchers and those who work in so-called minority languages - for whom the disclosure of an invention in a patent application is a valuable source of learning.

Peer-to-patent posts again. According to his latest information, Peer-to-Patent has posted a further seven pending United States patent applications for review by interested parties. This latest batch covers inventions in such diverse fields as

* detecting browser-based exploits
* progress indicators for program execution
* managing storage system performance as a resource
* clinical decision support for doctors
* selection of optimal executable code for a system
* drag-and-drop functionality
* crossbar arithmetic processor.
The IPKat, suppressing any gut reactions as to where he'd like to drag and drop the penultimate item on the list, urges all suitably qualified readers to participate in this experiment.

Right: IPKat team blogger Jeremy remembers his own experience of a "crossbar arithmetic processor" ...

Tuesday, 23 October 2007

LICK ME doesn't get just desserts

A chilled out decision from the UK Trade Marks Registry.

The applicant applied to register LICK ME ICE CREAM for ice cream and other frozen desserts under Class 30 of the Nice Agreement. The application was opposed by Minghella Ltd, which argued that the mark was descriptive and lacked distinctiveness because the mark was entirely descriptive of the way that ice cream is consumed, and consequently would not be viewed as a badge of origin. [Not so says the IPKat – one should never underestimate the joys of biting into ice cream].

Not so, Mr Hearing Office Salthouse found.

On the issue of distinctiveness, while LICK ME would be seen as an invitation to eat the product, it was unusual both for being gramatically incorrect, and because it was the product itself which was extending the invitation. Consequently, it would be seen as a badge of origin and consumers would be able to use the sign to make repeat purchages if the ice cream proved tasty.

The sign also wasn’t descriptive. the quality. While the term LICK ME would be seen as saying that the ice cream was ‘so good that you will want to lick it in order to prolong the experience, this was not a usual method of describing ice creams.

The IPKat says that clearly Mr Hearing Office Salthouse hasn’t read Alice Through the Looking Glass. On a more serious note, the IPKat can begrudgingly see why the mark doesn’t fit within any of the grounds for the refusal of registration, but at the same time, it still feels like the sort of term that other traders might need to use.

Catching counterfeits: European Commission seeks ACTA mandate

The IPKat has just been reading Press Release IP/07/1573, which emanated from Brussels earlier today.

Right: impatient with international initiatives to deal with fakes and counterfeits, the IPKat decides to take the matter into his own paws

The press release reads, in relevant part [with added IPKomments]:

"European Commission seeks mandate to negotiate major new international anti- counterfeiting pact

The European Commission has announced today that it will seek a mandate from European Member States to negotiate a new Anti Counterfeiting Trade Agreement (ACTA) with major trading partners, including the US, Japan, Korea, Mexico and New Zealand. Such an agreement would strengthen efforts to protect European intellectual property around the world, a key part of the EU's Global Europe trade strategy. ACTA’s goal is to provide a high-level international framework that strengthens the global enforcement of intellectual property rights and helps in the fight to protect consumers from the health and safety risks associated with many counterfeit products.


ACTA would contribute to fighting counterfeiting in three ways:

Building international cooperation leading to harmonised standards and better communication between authorities. This will build on coordinated anti-counterfeiting work the EU is already doing with large partners like the US. These standards would then be spread to other countries if they wished to sign up to ACTA. The EU has proposed transitional mechanisms and technical assistance to help advanced developing countries join the pact in the future.

[The IPKat says, this sounds pretty grand - but there are plenty of unanswered questions here. Does "better communication between authorities" mean only communication between equivalent forces, e.g. between customs authorities, or will it enable customs in one country to cooperate with criminal enforcement, tax or asset recovery agencies in another? ]

Establishing common enforcement practices to promote strong intellectual property protection in coordination with right holders and trading partners. The EU is consistently pushing countries like China to enforce anti-counterfeiting legislation and to toughen the legal penalties for intellectual property theft. Closer coordination on international benchmarks can reinforce this pressure;

[The IPKat wonders what sort of cooperation IP owners can expect from criminal enforcement and customs authorities, given the difficulties of getting hold of criminal evidence for use in civil proceedings, difficulties in releasing personal data concerning actual or suspected infringers and the widely-held attitude of the public authorities in many jurisdictions that they're got enough to do already without policing IP rights for what are often misleadingly viewed as a cadre of spoilt, super-rich businesses. Merpel adds, I'm not sure which countries are "like China" - and why. Surely China is a special case all on its own because we can't do without its manufacturing capacity and we're totally scared to do anything about its infringement for fear of what any trade retaliation might do to us.]

Creating a strong modern legal framework which reflects the changing nature of intellectual property theft in the global economy, including the rise of easy-to-copy digital storage mediums and the increasing danger of health threats from counterfeit food and pharmaceutical drugs.

[The IPKat says, if there's a "strong modern legal framework" that does what it says in this press release, thank heavens for ACTA - because no-one else has been able even to work out what the workable solutions are, let alone devise a framework for them.]


Twenty years ago, counterfeiting might have been regarded as a problem chiefly for the makers of luxury goods. [The IPKat says, at this point the press release cites a load of figures which, he believes, are quite wildly inaccurate but which may just as easily be underestimates of the problem as overestimates] ...


A key part of the Global Europe Communication by the European Commission was a commitment to strengthen further efforts to protect and enforce European intellectual property around the world. Since then, the European Union has been worked with countries like China, Russia and others to stop widespread and systematic piracy of European companies' intellectual assets. The European Commission is also including strong IPR chapters in all its new generation of Free Trade Agreements with India, Korea, ASEAN and Latin America".

The IPKat wishes this mission well, but wishes that he were filled with as much optimism as the press release seeks to encourage. He hopes the Commission for the world's premier single market zone won't have to wait too long for its mandate -- and he hopes that any EU Member State reluctant to support it will have some very cogent reasons for doing so.

If the ACTA initiative can solve the massive problems caused by counterfeiting and IP infringement, that would be wonderful. But, says Merpel, maybe the best we can hope for is that those who enforce IP at all levels won't just be facing greater administrative demands that distract them from their important tasks.

Mission Impossible here
Achieving the Impossible here, here and -- to show it really does happen occasionally -- here

Refreshingly French; Jules Rimet now online

The IPKat is having a "let's be nice to the French Day" today, so he's hoping that one of his cousins from the other side of the Channel Tunnel will tell him all about l’affaire T‑405/04, Borco-Marken-Import Matthiesen GmbH & Co. KG v Office de l’harmonisation dans le marché intérieur (not available in English). It looks like the dismissal by the Court of First Instance of an appeal against the Board of Appeal's refusal to allow registration of the word CAIPI as a Community trade mak for alcoholic beverages other than beer in Class 33.

The IPKat has done a little research. According to Babel Fish, "Caipi" is the French, German (the other language of the CFI's decision) and Spanish word for the English word "caipi" - which isn't in his dictionary. A search for "caipi" in Google Image however conjured up numerous refreshing-looking drinks, of which that on the right is a good example. Could this, the IPKat ponders, be of some relevance to the outcome in this case? Merpel says, judging by the green hue, I'd say the drink was extract of frog ...

The decision of the High Court for England and Wales in Jules Rimet Cup Ltd v Football Association (the "World Cup Willie" trade mark case) was noted on Monday by the IPKat here. It's now available in full on BAILII, so you can read it here.

Recent publications

The October issue of Euromoney's near-monthly Managing Intellectual Property is another action-packed thriller - features in this deliciously glossy mag include the following:

* an interview with Lord Triesman (the UK's new IP czar), which leaves the IPKat feeling that he is a well-briefed party apparatchik who has learned his lines and uses all the right words and phrases but is probably being paid to absorb the messages with which he will be bombarded from all sides by some of the most articulate and persuasive lobby groups around. At this early stage it's difficult to get the feeling that he is actually for or against anything except the principle of being reasonable and listening to everyone before jumping to what might otherwise have been intuitive conclusions. Merpel adds, he started 12 out of 15 of his answers with the word "well". Miaou ...

* staff reporter Peter Ollier writes about the rumblings of Chinese companies that have worked out how much more money they can make by establishing Chinese brands in the capitalist heartlands rather than knuckling down to the admittedly lucrative but less profitable serfdom of outsourced manufacture for (principally) US and European IP owners. This piece is of far greater interest than the interview with Lord Triesman and of much more long-term significance too in global terms;

* Garry Booth (a journalist who specialises in insurance and reinsurance issues) talks up the attractions of insuring IP-related risks. The IPKat has read plenty of IP insurance articles that read like advertisements for prospective policy-holders - thie piece has more appeal for those who might be thinking of taking their money.
Full contents and details of this issue here

Intellectual Asset Management magazine is now celebrating the tenth birthday of the Bowie bond - the brilliant way of raising money on the strength of a flow of copyright royalties, or of losing it on an inept gamble, depending on your cultural preferences. The bimonthly Globe White Page title also contains the following:
* an investigation by editor Joff Wild of The Gathering - a small but influential group of IP owners, spanning old and new technologies, which enables its members to share ideas and push together without the hassle and interference of formal membership organisations ...

* an enjoyable if unashamedly predictable romp through the 12 key attributes of a successful Chief IP Officer, put together by Robert Sterne (Sterne Kessler Goldstein Fox) and Ron Laurie (Inflexion Point strategy);

* "Just Say No", a very serious (if correct) argument by the triumvirate of Stephen Haber, Scott Kieff and Troy Paredes that expansion of the US research use exemptions to patent infringement would end up causing more harm than good.

Monday, 22 October 2007

Microsoft: they think it's all over...

Some of the crowd are on the pitch, the fat lady is singing, hell is very cold this time of year, and Microsoft have today announced the end of their decade-long battle with the European Commission, according to reports (here, here, here and many other places).

Microsoft have announced that they will not be appealing against the recent CFI decision (see IPKat posting here), and European Competition Commissioner Neelie Kroes said in a speech today,

"I want to report to you today that Microsoft has finally agreed to comply with its obligations under the 2004 Commission decision, which was upheld last month by the Court of First Instance.

I have been in almost daily contact with Steve Ballmer over the last two or three weeks. As a result of final contacts that took place early this morning, I am now in a position to present to you the results of those highly constructive conversations.

Under the 2004 decision, Microsoft is obliged to provide information allowing third party developers of work group server operating systems to develop products that interoperate with the Windows desktop operating system. Microsoft has previously offered to license this information to developers on terms that the Commission thought wholly unreasonable.

Following our intensive discussions, Microsoft has now made substantial changes to its provision of this information, introducing the changes that I asked for.

I told Microsoft that its royalty rates were too high for the patents they claim are applicable to the interoperability information. In response, Microsoft has slashed its requested royalties for a worldwide licence, including patents from 5.95% to 0.4% - less than 7% of the royalty originally claimed.

I told Microsoft that the royalties for access to its secret interoperability information were unreasonable and had to be reduced. Microsoft has now abandoned its demand for a royalty of 2.98 % of revenues from software developed using licensed information. That percentage royalty has become a nominal, one-off payment of €10 000. This is all that has to be paid by companies that dispute the validity or relevance of Microsoft's patents.

The Commission will now adopt a decision as soon as possible on the pending non-compliance case regarding past unreasonable pricing for the interoperability information, on which the Commission sent a Statement of Objections on 1 March 2007.

I told Microsoft that it had to make interoperability information available to open source developers. Microsoft will now do so, with licensing terms that allow every recipient of the resulting software to copy, modify and redistribute it in accordance with the open source business model.

I told Microsoft that it should give legal security to programmers who help to develop open source software and confine its patent disputes to commercial software distributors and end users. Microsoft will now pledge to do so.

I told Microsoft that developers who sign licensing agreements with them should have the means to ensure respect for the 2004 decision. Microsoft has now accepted that it must give legally binding guarantees to licensees about the completeness and accuracy of the information it provides and that the licensee can obtain effective remedies, including damages, from the High Court in London. These private enforcement tools come on top of the Commission’s powers and continued vigilance to ensure that Microsoft complies with its obligations in this area as in others.

I also said that Microsoft had to provide complete and accurate technical documentation – and backed that demand with additional fines last year. I can now say that Microsoft has substantially respected this obligation. That said, Microsoft’s obligation to document its protocols is an ongoing one – the documentation needs to be maintained as its products evolve, and new issues may arise once it is being used by developers. But as of today, the major issues concerning compliance have been resolved.

Put together, these changes in Microsoft's business practices, in particular towards open source software developers, will profoundly affect the software industry. The repercussions of these changes will start now and will continue for years to come.

The Commission's 2004 decision set a clear precedent against which Microsoft's anti-competitive behaviour could be judged. Now that Microsoft has agreed to comply with the 2004 Decision, the company can no longer use the market power derived from its 95% share of the PC operating system market and 80% profit margin to harm consumers by killing competition on any market it wishes.

Today's changes to the implementation of that decision set a second clear precedent. When Microsoft illegally uses its market power to destroy competition on a market, the onus is on Microsoft to change its business practices to allow competition and innovation to be restored to the market, so consumers are given the choices to which they are entitled.

Microsoft has finally taken steps to comply with the 2004 Decision. However, I want to stress two points.

First, Microsoft has ongoing obligations to continue to comply with the 2004 Decision. If new issues arise in relation, for example, to the completeness and accuracy of the interoperability information, then Microsoft must address those issues immediately.

Second, the March 2004 Decision, as confirmed by the Court of First Instance last month, also sets a precedent with regard to Microsoft's future market behaviour in this and other areas. Microsoft must bear this in mind."

The IPKat can hardly believe it, having watched the situation evolve over several years. Merpel for one was 100% certain that Microsoft would appeal, and she has hardly ever been proved wrong. Can that really be the end of the matter? Should we be looking forward to proceedings in the High Court? Or has Steve Ballmer (see video below) really turned over a new leaf?

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