Wright, Johnston & Mackenzie Solicitors

Amazon’s one-click system granted patent protection

In a highly controversial decision, the US Patent and Trademarks Office (USPTO) has approved an amended version Amazon’s controversial “one click” patent application.

Amazon’s “one click” system makes it possible for a customer to buy a product with the click of a single web-page button, without having to provide credit card and shipping information every time.

Amazon initially attempted to patent the system in 2006, but were met with a mass of objections.

The patent was challenged on the basis that some of the innovations claimed by Amazon’s patent application were not new developments, known in patent law as “prior art”. US patent law does not offer protection to technological developments which would be obvious to practitioners who work in that area. 

Opponents to the application also argued that the idea was an obvious development, and therefore did not merit patent protection.  As a result of these objections, the USPTO rejected 21 out of 26 patent claims. 

In response, Amazon submitted an amended patent application with a narrower scope - limiting the patent’s coverage to online shopping cart systems rather than all one-click e-commerce. The USPTO accepted Amazon’s amended application.

The narrowing of the scope of the application means that the technology will be able to be used by others outside the online shopping cart systems.

However, opponents argue that the application is still too broad and the system is an obvious development and should not be afforded patent protection at all.

If you wish any further advice relating to patents or intellectual property rights in general, please contact a member of the iTech team.

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Digital Economy Bill controversially passed by ‘wash up’

The highly controversial Digital Economy Bill has been passed by Parliament and will become law before the upcoming May general election.

The Government hopes that the Bill will stimulate the UK’s digital economy and provide a solid infrastructure to enable the creative arts in the UK to flourish.

However, as iTech has reported in the past 12 months, the Bill has come in for severe criticism from a number of sources, in particular in relation to its provisions relating to cutting-off illegal file-sharers.

The Bill was passed using a process known as ‘wash up’, whereby legislation is rushed through before Parliament breaks up for a general election. This meant that the Bill was only subject to two hours of legislative scrutiny, rather than the usual weeks or months.

Only three specific parts of the Bill were the subject of challenge by the opposition parties and much of the Bill was simply waved through by MPs.

Below is a summary of the most important provisions of the final Bill relating to information technology and intellectual property:

Internet Piracy

Perhaps the most controversial part of the proposed Bill surrounded the issue of illegal downloading and how best to punish illegal file-sharers.

As the iTech team reported in May, it was proposed to give the High Court powers to force internet service providers to disconnect persistent illegal file-sharers and block websites which enabled illegal file-sharing. These proposals were dropped after a series of objections from the Opposition parties.

However, the Government has simply replaced the proposals in the final Bill with an amendment which will effectively achieve the same outcome by different means.

This means that the courts will still have the power to force internet service providers to disconnect illegal file-sharers and block certain websites.

The final Bill also gives Ofcom the power to impose fines of up to £250,000 on internet service providers who do not act against persistent illegal file-sharers.

Internet Domain Names

The Bill grants the Government new powers to intervene when new internet domain names are registered, after consulting with Ofcom. At present, domain names are handed out by an independent body.

In particular, the Government has instructed Ofcom to investigate companies who register “.uk” websites to ensure that they are not doing so for “illicit use” – i.e. illegal downloads. The Government hopes this will provide another barrier to those wishing to illegal file-share.

Intellectual Property

It was proposed to allow organisations and individuals to use “orphan works” i.e. works whose owners are not known or cannot be found.

However, after strong opposition by the opposition parties, this provision was dropped.

It is expected that the reaction to this will be mixed. Public institutions such as the British Library will be disappointed due to their wish to make more of its vast catalogue of works available online.

However other individuals and businesses will welcome the deletion, including photographers, who have argued the change would allow the publisher to take their work without paying for it, simply by claiming their owners could not be traced.

Two other clauses were passed, raising the maximum penalty for a criminal conviction for copyright infringement to £50,000 and absolving libraries of copyright infringement for lending ebooks and audiobooks.

The impact of the Digital Economy Bill will be massive, both for consumers and businesses and it is expected that the debate and controversy surrounding a number of its provisions and the way it was rushed through Parliament will continue for some time to come.

If you wish any further information on the Digital Economy Bill and what it may mean for you, please contact a member of the iTech team.

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Avoid unintended consequences – get your contracts signed!

The UK Supreme Court has held that a contract can be enforceable, even when the parties have not signed it.

The case involved two companies, Molkerei Alois Müller (MAM) and RTS Flexible Systems (RTS). MAM and RTS entered into discussions regarding a deal, valued at approximately £1.7million, in which RTS agreed to supply and set up packaging machines for MAM.

The parties agreed that RTS could commence work on the basis of an outline deal, accompanied by a letter of intent. After the expiry of the outline deal, the parties negotiated the contract in detail and agreed all of the important points of the contract.

An important clause of the contract stated that the contract would not be in force until signed by both parties. However, the parties soon fell out over the performance of RTS’ machines and the contract was never signed.

The dispute resulted in a court action and the courts had to decide how much, if any, of the contract was in force.

The courts at first instance decided that the contract was indeed partially in force, but on appeal this ruling was overturned by the Court of Appeal who held that none of the contract was in force.

Finally, on appeal from the Court of Appeal, the Supreme Court held that almost all of the contract was in force.

The Supreme Court found that MAM and RTS had a clear intention to enter into a legal relationship - they had agreed the terms of the contract, including a fixed price between them. MAM and RTS had also behaved as if the contract was in force, by following its requirements and restrictions.

As a result, the Supreme Court held they had effectively waived the requirement for the contract to be signed and the contract was therefore enforceable.

This case highlights the importance if formally agreeing and signing all agreements before work commences. If you wish any advice relating to commercial contracts, please contact a member of the iTech team.

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ECJ clears Google over Adwords trademark claim

The European Court of Justice has ruled that Google’s AdWords system does not break trademark law.

The AdWords system enables any person or company to have their adverts appear on Google beside certain keywords. Crucially, this allows a company to have their adverts appear when a search is made for a competitors trade marked name.

The case was referred to the ECJ by the French Courts and was brought by luxury goods manufacturer Louis Vuitton Moet Hennessy (LVMH).  Louis Vuitton argued that Google infringed its trademarks by allowing third parties to bid on those trademarks in the AdWords system. 

In spite of Louis Vuitton’s claims, the Court found in favour of Google.

The Court held that although other companies could bid on a firm’s trademark, which would make advertising for the trade mark owner more difficult and costly, this did not in itself undermine the advertising function of a trademark.

The Court stated that “Google has not infringed trademark law by allowing advertisers to purchase keywords corresponding to their competitors’ trademarks”. 

Importantly however, the Court set out that advertising does infringe trademark rights where the advert implies that the results are linked to the trade mark owner, or could cause confusion about who was behind the advert this would be a breach of the rules on the part of the advertiser. 

The Court also provided some guidiance by advising that where an advert is clearly labelled as sponsored advertising, and not included within the “natural” results and the third party’s trademark does not appear in the text of the advert, then confusion is less likely to be inferred.

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EU tries to clarify Data Protection terms for all Member States

An EU Working Party has provided some crucial clarification on the meaning of the terms “data controller” and “data processor”.

Under data protection law, data controllers and data processors must comply with different rules to protect an individual’s personal data. It is therefore essential in every working relationship to determine who is the data controller and who is the data processor.

However, as business relationships have become more complex, it has become more difficult to determine who is the data controller and the data processor in that relationship. EU Member States are also interpreting the terms differently, leading to different data protection principles in different Member States.

As a result there has been growing pressure for the terms to be better defined to assist individuals and indeed Member States in fulfilling their data protection obligations.

In April, EU data protection regulators “The Working Party” provided some much needed guidance on this issue.

The Working Party guidance splits data controller and data processor into two separate categories:

1. The “controllers”, who allocate responsibility to a third party (the data processor) to ensure protection of an individual’s personal data when it is processed. Their main role is ensure compliance by the data processor with data protection rules.

2. The “processors” who are a separate legal entity from the data controller and process personal data on the data controller’s behalf.  They act on behalf of the controller to ensure compliance with data protection legislation.

In summary, the controller is responsible for the processor’s compliance with data protection law and the processor acts on the controller’s behalf. 

It is hoped that this guidance will help individuals to fulfill their data protection obligations and Member States to clarify their data protection laws.

If you wish any further information on data protection, please contact a member of the iTech team.

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Buena and Universal battle for rights to the Sugababes name

A founding Sugababes member, Mutya Buena, has applied to the European Trademarks Registry for ownership of the band’s name.

Buena claims that the three initial band members – Siobhan Donaghy, Keisha Buchanan and Buena herself - own the trade mark rights in the Sugababes name. However, the band’s recording company, Universal Records are also claiming ownership of these trade mark rights.

If Buena’s application is successful, it will mean that she will own the rights to use the Sugababes name on goods such as books, CDs and DVDs.

As a general rule in the case of manufactured pop groups, the record company that manufactured the band will own all rights in the band’s name. 

However, when the band was not manufactured and people come together to create a group independently, then the issue of ownership of the band’s name is less clear cut and will ultimately fall to the facts of the individual case.

Buena claims that Sugababes were formed in 1998 by the original band members alone, with no influence from the record company. Universal Records disputes this claim.

It is likely that the case will fall on the facts of the case and in particular (1) were Sugababes manufactured and (2) what arrangement or deal was put in place at that time in relation to ownership of the name.

Any person can apply for a trade mark that has not already been registered. However, if a third party can prove they have a prior right to that name (e.g. they have used the name for a period of time), then they can object to the application.

Therefore, Universal Records and the other band members may be able to prove that they have the right to the trademark through the fact that they’ve been using it prior to Buena’s application. 

The record label and existing, or previous, band members have until May 8 to oppose the application and iTech will keep you updated with progress.

If you wish any advice in relation to trademarks or intellectual property rights in general, please contact a member of the iTech team.

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