When a key player in the Government’s plans to strengthen the IP framework, encourages business owners to file their own trade marks, explaining this is to help them afford trade mark registration, I wonder what’s going on.

Many lawyers educate the public about the value of taking legal advice.  So, it is somewhat surprising for a Government funded entity to communicate the message that legal advice may be dispensed with.  For example, on the IPO website it says “some applications may benefit from professional advice” implying not all of them do.

What is really going on here?   IP law is not a straightforward topic, and in my experience all business owners benefit from professional advice.  So why does the IPO put this in doubt?

The IPO offers a wealth of information on its site www.ipo.gov.uk.  As a firm we suggest clients use the resources available for preliminary information, so that their time with us can add maximum value.  But when it comes to drafting, searching, or making informed decisions about trade marks and broader IP issues, we absolutely recommend taking professional advice as does every other IP lawyer I know.

As far as government organisations go, the IPO is fantastically helpful.  They are quick to respond, thorough, and staff are an absolute pleasure to deal with, so it saddens me to find myself levelling criticism in  their direction.  But as a solicitor who advises SMEs on Internet, and IP matters, including trade mark filings, I am absolutely sure that encouraging SMES to file their own trade marks often doesn’t do them any favours.

Some downsides of DIY trade marks

Some people who file their own applications are unsuccessful in securing a registration.  Take a look at the refused marks.  Many either have  fundamental errors which could not be resolved, or if they could be resolved, the business owners didn’t know how to do so or lacked time to deal with it.  Often applications fail because the mark is descriptive and incapable of functioning as a trade mark.

I’m even more worried about those who succeed in securing registration because the scope of the applications is often inadequate to cover the activities of their business.  What is a serious issue is that these entrepreneurs’ success gives them a false sense of security.  Some even go on to file their own Madrid applications via the WIPO website. Filing more widely on the basis of what is often an inadequate UK base application compounds the problem. If their applications are drafted by professionals there may be some recourse if they turn out to be unsuitable, but if they themselves drafted the form as laymen, they have no come back if their business suffers as a result.  Certainly they would not be able to complain that it was the IPO’s fault as the IPO is careful to avoid liability.  It will not review people’s application forms before they file.

Possible clue

The courts don’t suggest parties adopt a DIY approach to advocacy, and the DVLA don’t recommend that you pop the bonnet on your car at home to prepare for your MOT.  Although its heart is in the right place, and there is no disputing that any effort to inform the public about trade marks is worthwhile, the overall approach of the IPO does not seem to be in the best interests of the applicants themselves.  If the IPO’s motivation is really to help start ups then why not give them a discount on official fees instead?

The fact is that it is in the IPO’s interests to encourage SMEs to file trade mark applications.  A couple of years ago the IPO made 100 redundancies due to the reduced number of filings in the recession. So, on the face of it the IPO does have a conflict of interest.  If it  encourages taking advice then people would go to advisers who may not necessarily recommend trade mark registration.

In pushing trade mark registration as it undoubtedly does, the IPO is not helping start ups.  It’s adding to their costs and depriving them of the opportunity to consult lawyers who might suggest that they need not apply for a trade mark at the beginning unless they have a name they want to own (and which is capable of being owned).

Indeed, many start ups choose descriptive names and these are just fine for getting the business off the ground.  The name tells potential customers what the business does, and as it’s descriptive, nobody else will be able to register it.  Later, if the business succeeds, it should brand itself with a good name and have it professionally registered.

You don’t need to register a trade mark

I doubt the IPO is making it clear to start ups that they don’t need to register a trade mark.  Indeed judging from the below case, the IPO is likely helping businesses with descriptive names to find ways to register whatever they can, quite regardless of whether it’s an important brand element for them to register.

When would the IPO suggest taking professional advice then?

One business I know well, chatted to an IPO representative at a business start up fair, and then proceeded to file two trade mark applications for marks they felt would succeed through the registration process.  These were not much used as trade marks within the business, and therefore low priorities for registration.  The names the business did use for its products and services were too descriptive to register as trade marks.  So, these other names were seized on for no better reason than that they might succeed in being registered.

Unbeknown to the business, they have a serious problem on their hands in not having a distinctive brand name they can trade mark.

The business was so successful it had already licensed its format in a couple of countries and was set to expand more widely internationally.  The business simply did not appreciate what it means to not have a name it can own.  Any professional would advise a rebranding in light of the business’ intention to licence globally.  Otherwise, it would be missing out on owning a valuable IP asset.

Independence is key

The fact that this business spoke to an IPO representative and walked away none the wiser about the importance of consulting a professional and instead engaged in wasteful trivial trade mark registrations speaks volumes about the undesirable consequences the IPO’s current policy is having.  Unless the IPO distances itself from helping applicants to file their own marks, it is reducing the quality of its IP awareness raising activities.

This particular business is successful and could easily afford to pay a legal representative for advice.

Cutting costs

So the current IPO policy is not helping entrepreneurs to see there is more value to be obtained from taking advice than just securing a trade mark registration.  For many, registering a trade mark is not essential initially, but, where trade marks are important (for example, for a fashion label applying its brand to clothes) then getting it right is crucial.  Such businesses should be encouraged to get legal help because a professionally drafted trade mark will be better than one they can produce themselves, and it’s an investment they are making in their business.  If they need to cut costs, then let the business itself decide what to cut.  It is not necessarily a smart move to cut out professional legal costs.

And if 80% of businesses fold in year one, then let them decide in consultation with their professional advisers whether a trade mark registration is appropriate for them.  If they don’t even have a suitable name, I’d suggest they cut out expensive branding and websites too until they’re more established.  Starting out cost effectively and thinking carefully about what you spend money on is a sensible approach.  An example of a business that adopted this strategy is Distilled.  It was known by a different name in its first 18 months and rebranded when it knew the business would be viable.

The IPO – A Competitor

Personally I now see the IPO as my competitor.  Sometimes I think: Surely there must be competition rules to protect us against unfair competition from a government funded entity?  An entity that influences businesses not to consult lawyers except in rare cases, and advises them that when they do want to consult someone: “Professionals who belong to the Institute of Trade Mark Attorneys and the Chartered Institute of Patent Attorneys are especially useful in helping you obtain and understand your IP rights”. How does the IPO justify making such a statement.  I would love it if the Law Society took this up with them.

Surely it depends what sort of IP need a business has.  In our knowledge economy where intangible assets are signficant to most businesses, not just to inventors or creatives, it’s likely that many start ups are in need of other types of IP advice.  Those setting up web based businesses (and websites are a bundle of IP rights) have copyright issues and need appropriate contracts and lawyers who understand the internet.  IP Solicitors such as my firm, are probably more able to help them with their typical IP needs than other types of IP professional.  But by directing everyone in need of trade mark or other IP help to ITMA and CIPA the IPO is not necessarily helping people to find the best person for the job.

Solicitors are skilled and experienced professionals.  The IPO does not need to protect the public against them.  The IPO should instead focus its energies on helping the public to distinguish between regulated professionals who are insured and are answerable to professional bodies from others who prey on inventors and creatives with their various IP services.

The UKIPO has a huge responsibility in this area, and should take care when making recommendations that they don’t unintentionally mark out one group of professionals as being more useful than another when they have not offered sufficient explanation to allow readers to choose what is right for them.  So, in my view the IPO needs to make some changes. It should encourage SMEs to take professional advice, and should avoid favouring one profession over another.  This is particularly important in light of the IPO’s impending consultation reported in IPKAT to identify how lower cost IP legal and commercial advice can be provided to SMEs

Lawyers are expensive, particularly if you are in dispute with someone.  However, because prevention does not sell, many small business owners tend not to use lawyers except when they are unfortunate enough to face litigation.  In the meantime, rather than use lawyers to draft any agreements for them, even important ones like terms of business. they are turning to the burgeoning industry of contract templates and buying standard precedents to use.

The problem is many of the contract templates on sale are every bit as lengthy and complicated as legal precedents used by contract lawyers. Unless you’ve got seven years of legal training under your belt, these so called “simple templates‟ can be an overwhelming place to start for the layperson!    

Even where the templates ARE written in plain English they have a fundamental flaw: It is difficult to know how to use or alter them because it’s the details of the commercial transaction which will determine how you should tailor the document. If you lack an understanding of the business context and the dynamics that would entail the need to alter a standard template how can you properly adapt it to your situation? Rarely are transactions so standard that a general legal document is adequate.  As I explained in my blog  Why use a lawyer when you can buy a legal agreement? last week entrepreneurs would do far better to just use plain English and avoid any legalese when writing their own agreements.

If you’re left to grapple with complex drafting alone and then there’s a dispute on that agreement,  you are unlikely to be well positioned to contest the dispute, and it will cost you a lot more than it need do to resolve it.

You do not need to sign a piece of paper to be bound by its terms.

There are many misconceptions about contracts, including the belief that it’s necessary to sign a piece of paper in order to have a contractual relationship. That’s not the case.

When you engage someone to perform a service for you, or agree to sell something to someone, a contract exists between you and the other party whether you realise it or not. The exception is if it’s purely a domestic relationship, which the law treats differently.

If either of you put forward written terms at the right time during your discussions you would have a contract on those terms even though nothing was signed.

It’s important to realise that your email discussions, and telephone conversations are enough to create a binding contract.  If you don’t document the agreement then it will be quite messy and expensive to resolve any disputes later.

In my blog I explained how to document your own agreements informally using plain English instead of relying on bought templates. Here I just want to explain what happens if you can’t negotiate a solution with the other side and need to involve a lawyer to help you resolve the dispute.

Resolving disputes using lawyers

Lawyers start by gathering background information to try to work out the legal answers to the issues in dispute between you.  They will question you on the oral and written discussions you had with the other party before the contract was formed. Details of who said what and when will be relevant to shed light on your mutual intentions and what you “signed up to”, as will any written terms either of the parties put forward.

After building a picture of the background circumstances, the lawyers would apply their knowledge of contract law principles to your situation to pin point the time when the contract was formed in the eyes of the law.  This date would also give an indication of what terms were incorporated within it.  Your discussions or documents sent after that date are generally unlikely to have contractual effect.  It can happen that the contract is formed before people  realise it and the  legal agreement they used had no effect!

Say your dispute is about an ecommerce website being delivered late. You had engaged a PR company and incurred various other expenses relying on the web developer’s promise to deliver your site on time.  The delays left you considerably out of pocket.

Your lawyers decide you have an arguable case to claim that the other side broke the contract.  So, they would write a letter claiming compensation on your behalf.  There has to be a lot of posturing to get the other side to want to conclude the matter without resort to court.  So, the dispute will generally mention legal actions and remedies that the parties could avail themselves of if the other side fails to agree to their demands.  It can therefore be quite unpleasant to be involved in a dispute.

The other party’s lawyers will hopefully give advice along similar lines. So if you have a good case, it’s likely they will suggest their clients be ready to make an offer of compensation to you.  They may not do this straight away, but they will advise their client of the strength of your case.  When the offer is made it will probably be lower than the sum you claimed.  That’s just the way negotiations tend to go.  However, you never know whether the other party is serious or just bluffing, and risk losing the chance of a settlment each time you reject their offer.  Some correspondence will ensue before a final compromise is reached or the matter is escalated to issue of legal proceedings (which is not to say you will end up in court).

If the other side’s lawyers glean some information which they think weakens your claim, they will respond to say you contributed to the delay because of something you did (such as changing the brief) or failed to do (such as providing a list of requirements by a set date), and therefore are not entitled to any compensation, or as much compensation as you claimed and so on.   Generally, after some correspondence back and forth the matter is resolved. Only a tiny number of disputes end up in court. 

That’s not to say it doesn’t matter what document you use.  The better your documentation, the cheaper it will be to resolve disputes, and the less likely you will be to be to need lawyers to help you resolve matters.  The real purpose of a legal agreement is to achieve clarity.  It’s not just to have a piece of paper.  The reason for having a legal agreement is to encourage you to think through the details and discuss them with the other side before the contract between you is formed.  Hopefully if you are like minded you will do a deal and if you’re not, the pre-contract negotiations will highlight it so you walk away from the deal.

In business, contracts and agreements are part of daily life.  Consulting a lawyer to draft all your agreements can be expensive, so in practice, only bigger businesses have the resources to get legal advice every time they need an agreement.

As an entrepreneur you will find it necessary to document many of your own agreements, and should know which ones are too important to draft yourself.

Written agreements are binding documents that define the obligations of the parties involved in a specific project. So it’s advisable if you sell a good or service, to have a clear record of what was actually agreed. Memories fade, and a written record ensures that if disagreements arise later about what was actually intended or agreed, you will have documents to look at to see what was actually intended when you entered into the arrangement.

So, should you buy a legal agreement to use when entering into a new type of arrangement?  In my view this can be dangerous because there is no such thing as a standard template.  The context in which you use a template will differ from the ‘standard’ scenario envisaged in the basic template.  So, you will need to tailor the template to suit your particular transaction.

The terms of your particular deal are more likely to be accurately reflected in your document if you avoid using a ‘standard’ template.  I’ve seen many completely rubbish agreements signed by entrepreneurs who drew comfort from the fact that they were using an existing template.  Unless you have solid familiarity with the template and know how to adapt it to suit your particular transaction it may be better NOT to use legal templates as the starting point when drafting your own agreements .  Instead perhaps use them as a guide as to what to include in your own drafting (subject to the point I make below about avoiding use of any legal terminology, or clauses you don’t understand).

If you have a lawyer create an agreement for you and negotiate and redraft variations of it, you may develop the necessary familiarity with that particular template to reuse it on your own.  But otherwise, in my experience it’s safer to record simple agreements by emailing details of the ‘deal’ and asking the other party to confirm by email that the terms are correct as written in your email. Here are a few elements of written agreements to focus on:

1. Define the scope of work.

2. Indicate exactly what is to be done by whom and within what time frame. Also indicate who determines if the work has been completed satisfactorily.

3. Establish time frames.

4. Indicate how long the agreement lasts and how you will be able to terminate it sooner if for any reason either of you want to do so.  There should be a clear exit strategy.

5. Establish milestones and indicate when payments are to be made and clarify payment arrangements.

6. Focus especially on clarity about money issues: who pays what, when and how. What happens if payment is not made on time?

Be sure to avoid using legal language unless you know really well what those terms mean.  Legal terminology if misused could have unintended consequences on your circumstances.  For example, if you intend to give someone sole rights to distribute something but use the wrong term and give them exclusive rights instead, the legal consequence is that you give the other party all the rights, and deprive yourself of the right to distribute that thing yourself.  Nor should you ever say ‘sole and exclusive’.  This is a tautology.  Each of these words has a very precise legal meaning and consequent impact on the scope of the rights granted.  Be clear whether you mean ‘sole’ or ‘exclusive’. That’s why in my opinion  it’s far better to avoid such pitfalls by using plain English.  Say exactly what you mean in ordinary language you both understand.  Whether you’re agreeing something with clients, vendors, joint venture partners, affiliates, or anyone else for that matter, by ensuring the details are documented in a style and language you both understand, it’s much more likely you’ll end up with an effective written agreement.   

The benefit of recording the terms of your agreements in writing is that you air issues upfront and sort essential details out so you stand a better chance of negotiating your own solution if things don’t work out between you.  Next week I’ll explain what tends to happen when two parties end up in a dispute they can’t resolve without the help of lawyers.

Going through this process of documenting your agreement could very quickly show if you are about to engage in business with someone you shouldn’t be entering into business with.

Obviously, complex agreements (especially where a great deal of money is at stake) should always be drawn up or reviewed by a lawyer. It would be false economy not to consult a lawyer if the transaction concerns a commercially significant issue for your business.  Otherwise you will spend ten times as much ultimately on legal fees.

Copyright offers crucial protection to individuals and businesses alike enabling them to own and exploit their creative works.  This might include photographs, articles, software, website designs, films, music and a range of other forms of creative expression.  Copyright law allows authors to claim compensation when their work is copied without authorisation, but a critical issue which can be overlooked by less vigilant creatives is a limitation on the time period during which claims can be made.

Limitation periods control the length of time a claimant has to bring legal action, for example following an infringement of their copyright, and these periods vary from country to country.  In the UK, the relevant period is 6 years from the date on which the cause of action accrued for copyright infringement.  The upshot of this is that claims for compensation will only stretch back 6 years – so if you wrote a book in 2003, and it was copied and resold without your permission until the end of 2005, by the end of this year it would no longer be possible to bring a claim for the profits made from that infringement.  If the infringement continues, compensation will only be available in relation to a rolling 6 year period.  What is important is to remain vigilant.  Services like Copyscape allow you to scan the web for reproductions of your content; for images the equivalent is available through Google Similar Image Search, or Tineye; but for works sold offline, it may be less straightforward.

Nowadays there is increasing awareness about the value of “intellectual property” and brands.  Yet “intellectual property” is a term that alienates many people because they don’t understand what it means or how it applies to them. 

According to IP Asset Maximizer, more than 50 % of corporate value today lies in the form of intangible assets.  So it’s worth developing an awareness of your IP.  Every business has the potential to have some intangible assets. 

Intangible assets will comprise IP like patents, trade secrets, copyright, trademarks, and contractual relationships.  Employee knowledge is also valuable IP and is one reason why it’s worth having a know-how system in place to capture knowledge to preserve the company’s intellectual capital.

However, IP assets don’t just exist without more.  They need to be identified, captured, protected and commercialised in order to realize their value.   Whatever size of business you are, you need to manage your intangible assets. 

While the importance of an IP strategy is appreciated in larger organisations, it’s not so well appreciated at the smaller company level.  An IP strategy is just as important for smaller businesses, including early stage businesses.                                          

Some entrepreneurs, especially those in start-up mode, are skeptical whether it’s actually worth spending money protecting something that has little or no immediate value, such as their name.  An analogy to the physical world may help explain this.

If someone built a house on a plot of land that didn’t belong to them you’d wonder why they were spending time and money on such an inherently risky project.  The owner of the land could evict them at any time.  Even if the land was for sale, it would make sense to first
                                                                                                       buy it in case someone else beat them to it and bought the plot first.  Demolishing your house and finding another plot to rebuild it on would be very expensive.

So, if you don’t want to register your name as a trade mark, an appropriate IP strategy can accommodate that, and you have various choices for approaching this. Effectively, you could decide to just to build a temporary shed on the plot for now, with a view to building a house later, either on that land or elsewhere once your fortunes improved. 

Not securing the intangible rights to something like your brand name is the equivalent of building a house on a plot of land you don’t own.  It’s far easier to buy the rights at the beginning than to conjecture whether you would have strong enough rights to fend off someone else who beat you to the punch and registered the name first.   

Moreover the name you choose determines how good your plot will be to build on.  Some name choices will give you a completely clear area to call your own.  It’s as if your land were in the middle of countryside with few neighbors looking on.  On the other hand, other name choices would put you in a heavily overlooked area with the likelihood of trespassers constantly coming onto your land no matter how hard you worked to ring fence your patch.  

If the aims of the business are to first see whether it is viable before incurring costs registering rights, then an appropriate IP strategy might be to rebrand in a couple of years if the business succeeds.  However, it is a mistake to then completely neglect all IP issues.  There are some IP rights which are lost forever if not addressed in the early days. Once the business succeeds its intangible assets acquire value.

So even a modest start up needs an IP strategy.  If the business will generate IP rights which others are unlikely to freely sign over if left until the business succeeds, then the IP strategy will involve securing those rights immediately rather than postponing this.  

I hope this post will serve to demonstrate that an IP strategy is not set in stone. Its details will vary for each business, based on the industry, the available budget and resources, and most important of all, the business’ goals.

If you have yet to set your IP strategy, now might be the time to do it.  The economic climate is tough, and deferring decisions about IP protection can mean that important IP issues are neglected.  Neglect is not an appropriate IP strategy for any business.

Key to Apple’s surging popularity have been the ease of use of its products and software, and seamless integration between its devices and services.

Arguably unique in the personal computer industry, Apple exercises strict controls over every element of its product line.  This control over both the hardware and software used in its computers, peripherals and devices has enabled the company to ensure a consistent user experience worldwide, and to avoid compatibility issues which have in the past plagued other platforms.

However, this monopoly also means less choice for consumers.  Often, PC users choose to buy their own commodity hardware, put it together and install their operating system of choice.  The motivations for this are varied: some users are searching for bleeding edge performance; others are looking for value; and some simply enjoy the experience of building their own PC.

In the past a number of businesses have established themselves as alternative Mac hardware vendors – typically selling cheaper PCs tailored to be compatible with Apple’s OS X.  A recent example of such a business, fighting Apple in the courts for the right to do so, is Psystar.

Some would argue that Apple are shooting themselves in the foot by preventing other vendors from selling compatible packages that might increase the user base of OS X, sell more copies of the operating system and, possibly, sell more devices developed to integrate with that operating system.  However, Apple differs from companies like Microsoft in that it is arguably a hardware business.  Allowing hardware competitors into the marketplace to increase software sales is not good business sense for the company.  Particularly as the strength of Apple’s brand depends upon its ability to exercise strict controls over the user experience – “It just works”.

So, Apple’s software licence for OS X imposes significant restrictions on licensees.  A recent US ruling highlights the utility of software licences in enabling developers to control how their work is used.  At issue was whether the US first sale doctrine applied such that a purchaser could sell on Apple’s software as they saw fit – think buying a car and selling it on second hand.  The court found, unsurprisingly, that customers are not buying the software itself – they do not own the software after they buy a disc holding a copy of OS X, or download it – they are merely granted a licence to use it subject to a range of restrictions.  The terms of the licence they are granted preclude its use on other hardware.

This is bad news for Psystar but, as Groklaw points out, good news for proponents of Open Source Software.  It affirms the (albeit widely accepted) presumption that a US purchaser of open source software is not entitled by way of the first sale doctrine to resell it on their own terms and thereby circumvent an open source licence.

Websites, iPad apps, accounting systems, and the software running on your home wireless router are all the result of an often considerable investment of time, money, skill and effort.  In return, their creators are typically rewarded with a bundle of intellectual property rights.  One of the most important of these is copyright, which protects the software itself, and the graphics and text used in the interface.  However, more powerful protection is potentially available through registration of a patent for innovative aspects of software.  Rather than protecting design elements, or the source code behind software, a patent can be directed at protecting the more abstract mechanism used by the software to achieve its function.

The patenting of software is one of the most hotly debated issues in the field of intellectual property, and probably the most high profile case in the field is that of Amazon’s ‘1-click’ patent.  The alleged innovation consisted of a way of allowing online shoppers to buy products with a single click.  Instead of entering payment details each time, the Amazon servers identify visitors using a cookie stored on their computer and retrieve the information automatically.  While Amazon secured patent protection for the technique in the United States back in 1999, its efforts to obtain protection internationally provide an interesting illustration of the differing approaches taken to patent protection of software inventions in different jurisdictions.

For example, while the Canadian, US and Australian patent regimes have so far been broadly in favour of crucial elements of Amazon’s patent claims, the European Patent Office appears to be taking a different stance.  A more detailed analysis of the fate of the patent is available here.

There are also differences in the treatment of applications for patent protection of software within Europe, between the European Patent Office and the UK Intellectual Property Office, with the latter being viewed by some as less lenient when it comes to computer implemented inventions.

One comment in the Guardian’s editorial on the subject resounds with this author:

Until the mid-1990s the computer industry – including Microsoft – was opposed to such licensing. This was mainly because the industry was so innovative without the protection of patents, which in any case involved often quite trivial advances in technology that were regarded as a standard part of an engineer’s work.

Every non-trivial piece of software involves a series of technical problems overcome through the innovative application of a developer’s expertise and experience.  Unquantifiable amounts of code are written, and an unfathomable number of problems overcome each day by software engineers worldwide, and the 1-click ‘innovation’ by Amazon is far from the most complex of these.  Much like that of a developer, a lawyer’s work involves using language to communicate complex information, and the analysis of rules and their application under specific circumstances.  If monopoly rights were granted over certain approaches to applying rules to sets of facts, to the structure of contract templates, or to more effective means of communicating information linguistically, I would be concerned that many legal professionals would grind to a halt.

While patents offer an important incentive to innovate, and a just reward to those who develop new technology benefitting society, I worry that if the bar to patent protection is set too low for software then smaller players in the field, who cannot afford to acquire patent portfolios or to pay for licensing agreements, may be forced out of the market altogether.

Intellectual property is the cornerstone of many modern businesses, and the law offers various mechanisms to safeguard know how, creativity, ingenuity and investment in reputation and marketing.  A significant complexity when it comes to securing rights is deciding which means of protection is/are appropriate.  An important factor in such a decision is the nature of a particular piece of IP – for example, is the purpose of a particular product design feature to differentiate it from other goods?  Is it to endow the product with an aesthetic advantage? Or does it perhaps make the product better at doing its job?

A recent dispute between Georgia-Pacific and Kimberly-Clark highlights the importance of these issues when it comes to securing protection.   The case involved alleged infringement of trade marks held by GP relating to the quilted design of toilet paper, a product they have been selling for over 100 years, and which they had improved with a diamond-shaped quilted design 20 years ago when also rebranding it as Quilted Northern.  In addition to trade mark protection, GP had also obtained utility and design patents for their innovative tissue, a strategy which would arguably be their undoing.

Notable here is that some of the IP protection secured by GP had expired by the time the dispute arose, however, as rights which can be renewed indefinitely, their trade marks continued to be in force.

In the early 1990s, Kimberly-Clark also added a quilted design to its toilet paper, sparking a dispute between the two companies involving 675,000 documents and more than 12 witnesses.  Crucial in determining the existence of trade mark infringement was whether the subject of the trade marks was functional.   Trade marks are used to distinguish the origin of goods, and under US law a defence is available to alleged infringers of a trade mark if they can show that the mark is functional.  In this instance the Court found clearly in favour of KC.

The Court’s finding that there was no trade mark infringement rested in part on Georgia-Pacific’s proprietorship of several utility patents covering the quilted design.  These operated as evidence that the design was in fact functional.  In case law cited by the Judge, it was explained that a design is functional:

‘if it is essential to the use or purpose of the article or if it affects the cost or quality of the article’

In GP’s utility patent, the quilted design was claimed to improve the perception of softness and bulk, and reduced ‘nesting’ and ‘ridging’.

The Court stated that ‘if a design is functional the owner cannot trademark the design and block innovation. Georgia-Pacific, whether intentionally or not, patented their Quilted Diamond Design and claimed it to be functional. They must now live with that choice and can benefit only under the protection of a patent, not that of a trademark.’

Another key factor in the decision was the advertising strategy employed by GP.  The Court looked queried whether the advertising ‘tout[ed] the utilitarian advantages of the asserted design’, finding evidence of functionality in GP advertising, which included the following claims:

-          Quilted to Absorb;

-          Quilted to create thousands of places for moisture to go;

-          Our two softest layers of premium tissue are gently quilted together to give you and your family exceptional softness and comfort; and

-          Quilted Northern Ultra with a unique new quilted design for more quilting and comfort than ever before.

This case offers an important lesson about patents and trade marks products.  By filing patents covering or related to the functionality of the quilted designs, the company made it far more difficult to argue a case for trade mark infringement.  Similarly, by marketing the product based on the functionality of the quilted diamond design, GP further weakened its argument.

While some might argue that GP effectively shot itself in the foot, on the other hand could it not simply be the case that irrespective of the IP registration strategy adopted, protection of the quilted designs belongs in the realm of patents.  That the utilitarian properties of the design render them subject to more time-limited protection than the indefinite security offered by the trade mark regime.

Either way, the dispute is a timely reminder that marketing, design and legal professionals need to cooperate in order to manage risk effectively, make informed decisions, and succeed in the marketplace and the courts.

The Pirate Bay has been thrown into the limelight a number of times, not least following a legal battle over copyright infringement which resulted in jail sentences for the four site operators in April 2009 (though at the time of writing, the website is still operational).  Recently two of its founders announced their decision to establish a more legitimate file-sharing service, BayFiles.

The pair founded the Pirate Bay back in 2003, and the site quickly became infamous as a place to find and illegally download copyrighted content including music and movies.  The site relied on BitTorrent, a protocol making it possible for thousands of users to share the burden of distributing files, and meaning that the Pirate Bay did not need to host any copyrighted material itself.   Instead it simply offered a search facility allowing users to find out what content was being shared, and where to get it.

In contrast, Bayfiles aims to provide users with faster downloads and increased reliability through the HTTP protocol.   HTTP is used when retrieving webpages and the vast majority of other material found by typical users on the world wide web.  It involves downloading files straight from a server.  So, unlike with the Pirate Bay, BayFiles intends to directly host the files being shared.  An oft cited argument against alleged infringement of services like the Pirate Bay is that they do not store or transmit infringing content; should Bayfiles be used by pirates this will not be the case, and it might seem therefore that there is an increased risk of liability for infringement.  Out of the frying pan and into the fire perhaps?

Co-founder Fredrik Neij explains the choice of HTTP saying ‘BitTorrent is increasingly throttled or even filtered by ISPs, HTTP usually is not’.  On the subject of copyright infringement, BayFiles have said that they will follow potential complaints and take down files that might infringe copyright when identified. They intend to comply with the Digital Millennium Copyright Act (DMCA) and have registered DMCA officers on board to handle complaints.  Their terms of service explicitly provide that content which violates third party copyrights will not be accepted, and that they will terminate without notice and without recourse, accounts of holders who are repeat infringers of copyright.  The site will log the IP addresses of uploaders, and disclose these if legally obliged to do so, but details of downloaders will not be retained.

A variety of similar services exist, such as MegaUpload and RapidShare, and perhaps through diligent compliance with copyright law, and prompt action in response to notices of infringement they continue to operate despite hosting a range of copyright content.   That is not to say that they haven’t come under fire – as illustrated by actions in both the US and Germany.

The founders have described that their ultimate goal as making sharing effortless and efficient while maintaining privacy.  They note:

‘Storage and transfers on Bayfiles also preserve users’ privacy. And another advantage is that users can be sure that content stays up, which is important for personal backups. It also guarantees that other personal files such as your MP3 collection are always accessible; so users are able to stream it live to any device.’

Admirable goals, copyright compliance and easy file sharing for all.  Despite the founder’s aims, some remain skeptical that the site will avoid infringement.  A lawyer with legal firm Cobbetts told the BBC “I suspect what they’re concentrating on is the idea that if it can be shown that they’re infringing or facilitating the infringement of an identifiable copyright work, they will comply with the requirement to notice and take down in time ….  So there will be a lot of infringement – but they are basically saying if you catch us we will cough’.

Nevertheless, the new venture is a far cry from a site which took a somewhat less positive view of the rights of copyright owners, and the work of their lawyers [see here].

The London riots brought chaos to the city for a few nights, and at times the looting and violence spread faster than news sites could keep track of them, leaving many to turn to social media for their source of news. Often TV coverage became unreliable, and the BBC played looping footage of past events, whilst rioting in different areas was still taking place. Twitter became the fastest method for the public to find out what was happening around London, and to check if their area had been hit by the riots.  

The advantage social media has is its immediacy, something traditional news channels cannot compete with easily. Due to the fast paced nature of the riots, the speed of social media really came into play.  As Darcy Mitchell of The 7^th Chamber put it, ‘for one night social media beat the sleeping giants of old style media to their own game: front line reporting in the heart of the action’. News websites tried to keep up with the riots, setting up live blogs to follow the action, but they still did not manage to keep up with the ever- unfolding events. At times even the traditional media relied on social media for the most up to date information on the riots.

Some media operations such as the Guardian and Sky News did set up live blogs, which helped to communicate the true scale of what was happening across London better than TV could. However, although these operations received large amounts of traffic, it was Twitter that benefited the most during the riots. Experian noted this, saying ‘The real-time sharing of information through Twitter has made the platform the ideal discussion platform to spread updates on major news events like the riots, and yesterday (8 August) was Twitter’s biggest ever spike in UK traffic online’.

More Fiction than Fact?

Interestingly, rather than seeing social media as a totally new way of spreading the news, it might be seen as a return to the old days before news corporations existed to report on major events. In those days news relied on word of mouth to be spread. Obviously, back then word of mouth did not have the capacity to spread as quickly it can through social media. However, there is a downside and a difference to this style of news telling. As social media consultant Matt Rhodes said: ‘There’s a danger of thinking that because something is on Twitter, it’s true. People have some kind of trust in things that are published’. Whereas when news is spread verbally, the majority of people take it with a pinch of salt, news reported on Twitter or Facebook is taken more as fact.

At times rumours were circulated just as much, and perhaps even more than facts during the riots. As social psychologist, Aleks Krotoski, stated, ‘the problem with social media or the internet is how quickly this information can spread. Misinformation has been around for a really long time, but historically there have been gatekeepers to confirm things externally’.

Amongst rumors published via social media were claims the Camden Roundhouse had been set on fire; groups of hooded youths were heading towards Holloway, and even that rioters had attacked London Zoo, setting various animals free.

Yes, the use of Twitter and Facebook to spread news can sometimes create more fiction than fact; however,we are nevertheless seeing a fundamental change in how news is being reported. Before the age of social media, journalists acted as gatekeepers to information, where news corporations held the power to spreading news.

Now, social media has given power to the public to report news themselves.

This is not to say that traditional media is being replaced by social media.  Many journalists Tweet alongside the public, separating fact from rumors and providing more trustworthy accounts of the riots. Social media represents a new element to news reporting. We still need the traditional media to provide official accounts of events in the world, but what social media allows is for the public to add their own comments and analysis on events, arguably giving a more diverse voice and democratic way of news reporting. Social media allows those who are personally witnessing events unfolding to report what is happening.