Monthly Archives: April 2012

Stopping name filching: recent decisions of Company Names Tribunal

Good name in man and woman, dear my lord,
Is the immediate jewel of their souls.
Who steals my purse steals trash. ‘Tis something, nothing:
‘Twas mine, ’tis his, and has been slave to thousands.
But he that filches from me my good name
Robs me of that which not enriches him
And makes me poor indeed.
 Othello, William Shakespeare, Act 3 Scene 3

Section 69 of the Companies Act 2006 introduced a new legal remedy into English law.  Section 69(1) provides:

(1) A person (“the applicant”) may object to a company’s registered name on the ground—
(a) that it is the same as a name associated with the applicant in which he has goodwill, or
(b) that it is sufficiently similar to such a name that its use in the United Kingdom would be likely to mislead by suggesting a connection between the company and the applicant.

An objection is made by application to the company names adjudicator.  Sections 70 to 75 provide a legislative framework for such applications, and are supplemented by the Company Names Adjudicator Rules 2008.

These provisions were brought to IP Draughts’ attention by a tweet on 28 April from the UK Intellectual Property Office (they are busy birds, twittering on a Saturday), which linked to a page of the IPO website containing recent decisions of the Company Names Tribunal.  It is the first time that IP Draughts has seen any decisions under section 69, although the Tribunal has been making decisions for the last couple of years.

Among the decisions recorded on that page are a successful application by BMW and an unsuccessful one by Zurich Insurance.  IP Draughts was interested to read a decision rejecting an application by a firm of solicitors, Miller Rosenfalck LLP, in which they claimed goodwill in the name European Business Lawyers, and adduced as evidence the name of their website: www.europeanbusinesslawyers.com.

Section 69 provides another weapon for someone who thinks their name is being misused, in addition to the existing remedies for infringement of registered trade marks, passing off and remedies for cybersquatting under the dispute resolution procedures of domain name registries – eg see WIPO’s domain name dispute procedures here.

Can J K Rowling claim goodwill in the name Filch?

In some ways, the remedy under sections 69 to 75 is similar to that for cybersquatting: it is relatively low cost (at least if the fee scales, set out in the Rules, are anything to go by – a successful party will be lucky to receive an order for payment of more than a few hundred pounds) and the remedy is an order to change a name.  The ‘flavour’ of the reported decisions is reminiscent of some decisions in domain name disputes.

As far as IP Draughts is aware, the remedy under sections 69 to 75 (and the associated wrongdoing), does not have any official name.  It falls somewhere between infringement and passing off.  IP Draughts would like to suggest that they should be known as actions to prevent filching a company name, so as to distinguish the tort (if it is a tort) from trade mark infringement or passing off.  Please let us know your views on this name by completing the survey, below.

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Resistance is futile: all paths lead to co-ownership of IP

You have probably encountered this scenario.  A university, a small company and a large company are engaged in a research collaboration.  The parties have entered into a written collaboration agreement.  As one might expect, the agreement addresses the question of which of them will own any intellectual property arising from the collaboration, which is defined as Foreground IP.

During the negotiation of the agreement, various proposals were made on the ownership of Foreground IP.  The university suggested that a party would own any IP in improvements of the technology that it brought to the collaboration.  Unfortunately the parties couldn’t agree what would happen if the improvement related to more than one party’s technology.  The large company suggested that it would own all the Foreground IP and license the other two parties.  The small company’s investors wouldn’t accept this solution.  The small company suggested that the three parties should be joint owners of the Foreground IP.

The university’s technology transfer manager vaguely recalled that her patent agent had recommended against having joint ownership, but she couldn’t remember why.  The parties briefly discussed carving up ownership of Foreground IP according to fields of interest, but the parties couldn’t agree on the fields, and anyway what would happen if the IP was useful in more than one field?

In the end, it was agreed that a party would own any Foreground IP that it generated.  This was thought to be the fairest and simplest solution.  Someone pointed out that some IP might be jointly created, so as a fall-back it was agreed that if more than one party generated an item of IP, it would be owned by those parties jointly.

The main problem with this solution, in IP Draughts’ view, is that once the parties are working together in their collaboration, there will be a tendency to assume that any IP generated in the collaboration was the fruit of collective thinking by all of the parties’ scientific representatives, and therefore should be jointly owned.  The parties may be influenced in this by the approach taken in relation to authorship of scientific publications, where all the contributors (and sometimes people who were not contributors) tend to be added as co-authors of the paper.

It will take a brave and clear-headed party to say, thanks for your contribution, it was useful but at a relatively low level, not intellectually distinguished enough to claim ownership of IP.  Of course, this should not be how the parties think, as they should treat IP ownership as a technical legal issue that has no bearing on the worthiness of the scientific contribution.  But in IP Draughts’ experience, parties do not always take this lofty, dispassionate view; he has advised on several, acrimonious disputes over inventorship and ownership of IP arising from scientific collaborations.  Thus, what is originally conceived as a fall-back for the rare case (joint ownership) may become the de facto standard approach during the collaboration.

In IP Draughts’ view there is nothing inherently wrong with parties agreeing joint ownership, as long as they include detailed provisions in their agreement as to how the joint IP is to be owned, protected, enforced, defended, managed, and commercialised, and how revenues from the commercialisation are to be allocated.  At a practical level, parties do not always address these issues in sufficient detail, and if that is likely to be the reality, then it may be better to avoid joint ownership.

There is insufficient space in a blog article to discuss all of these provisions.  Some key legal issues that should be taken into account include the following:

  1. The parties probably intend co-ownership rather than joint ownership.  Under English law these concepts are different.  For example if a husband and wife buy a house together, they can choose whether to be joint tenants or tenants in common.  If they are joint tenants, when one of them dies, the other automatically becomes the sole owner.  If they are tenants in common, the deceased person’s share passes to the beneficiary under their will.
  2. If the parties don’t specify differently, they are likely to own the IP in equal shares.  For example, section 36(1) of the UK Patents Act 1977 provides: “Where a patent is granted to two or more persons, each of them shall, subject to any agreement to the contrary, be entitled to an equal undivided share in the patent.”  Thus if there are 5 inventors from party A and 1 inventor from party B, A and B will each own 50% of the patent, rather than having a split of 5:1.
  3. Under the UK system, and in most countries outside the US, a co-owner cannot assign or license his share without the consent of the other co-owner(s).  In our example, the large company may be able to generate revenue from the IP without licensing or assigning it, ie by using its own manufacturing, distribution, marketing and sales resources.  By contrast, the university is unlikely to be able to generate revenues without licensing or assigning.  If the parties do not address the question of commercialisation and revenue sharing in their agreement, and merely state co-ownership, then the university may be left at a relative disadvantage.

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Filed under Intellectual Property

Postgraduate course on IP transactions: another update

Regular readers may recall a couple of articles on this blog last Summer, in which we discussed plans to develop a course on intellectual property (IP) transactions, possibly leading to a postgraduate diploma.  The article linked above continues to be of interest, if the number of “hits” it receives is an accurate guide: in the last 3 months it has been the sixth most popular article on IP Draughts.

IP Draughts has continued to work on this project, and can now report a real breakthrough following a meeting held at University College London’s Faculty of Laws last week.  Our plans have still to be finalised and confirmed, but it is looking increasingly likely that there will be a 5-day course next February at UCL, organised by UCL’s Institute of Brands and Innovation Law (IBIL).  The main features of the course, as currently envisaged are:

  1. It will be targeted at junior IP practitioners (including solicitors, patent attorneys and licensing managers), and taught mainly by experienced IP practitioners.
  2. It will focus on the law and practice of IP transactions across various industry sectors, including universities and Government, ICT, media, consumer goods and life sciences.  There will be teaching and discussion of various areas of law that affect IP transactions, including IP, contract, insolvency, security over IP, and competition laws.  A range of transaction types will be discussed, including collaborations, licensing (including FRAND), assignment, M&A and investment in spin-out companies.
  3. The course programme will be a mixture of formal lectures and workshops.  Our aim is to combine in-depth teaching of the law with a practical focus on transactions.
  4. Residential facilities will be provided for those who do not live in London, probably at William Goodenough House.
  5. The course will probably include an examination.  Successful candidates will receive a certificate in IP transactions issued by IBIL.

If the course is successful, it may be expanded in subsequent years into a one-year, part-time course leading to a postgraduate diploma course or LLM.

If you would like further information about the course, please contact Mark on 01865 858 878 or at mark@andlaw.eu.  We probably won’t be taking bookings until the Autumn.

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Invalid notices of termination: calculation of time periods

The UK Government seems to have got itself into a pickle over calculating the 3 month time limit for appealing a judgment of the European Court of Human Rights in the Abu Qatada extradition case.  Among many, hysterical newspaper articles, this article by an ex-Government lawyer stood out for IP Draughts as a model of well-reasoned sanity.

The court’s judgment is dated 17th January 2012.  If you count forward three months from that date (and start counting on 17th January), the deadline is midnight at the end of Monday 16th April.  If, however, you ignore the date of the judgment, and only start counting from 18th January, the deadline is midnight at the end of Tuesday 17th April.

The UK Government is clearly of the view that the Monday deadline applied.  On Tuesday this week, it started fresh extradition proceedings on the basis that the previous case was now dead.  It seems that the court’s administrative officials may have been of the view that the Tuesday deadline applied; they accepted the papers for an appeal by Abu Qatada at 11 pm on Tuesday.  There is some suggestion that the court’s officials have  backtracked since Tuesday, and now say that it is up the judges of the court to decide whether or not the appeal was lodged in time.

Although the article referred to above mentions some relevant case law, it seems that the legal position on time limits in cases of this kind has not be clearly established.

Is it any easier when deciding time periods in contracts?

The issues described above are very similar to those that arise when deciding when notice periods apply in contracts.  In the case of contracts, English common law has centuries of experience on this issue, and has developed some settled principles that are applied by the courts.

Consider the example of a contract that states that either party may terminate the contract on 3 months’ notice.  If notice is served today (20th April 2012), when will termination occur?  Several rules need to be considered.

  1. Prior to 1925, references in contracts to months were interpreted as lunar months.  There are 13 lunar months in a year.  By section 61 of the Law of Property Act 1925, references in contracts to months are to be interpreted as calendar months, unless the context otherwise requires.
  2. Calendar months are counted from a specified date. It is not necessary to consider the period from the 1st of a month to, say, 31st (unless the notice period starts on 1st of a month).  This contrasts with the usual understanding of calendar year, which tends to be thought of as the period from 1st January to 31st December.
  3. The “corresponding date rule” requires that one looks at the same date in the diary the relevant number of months ahead.  Thus a period of 3 months from 20th April expires on 20th July.  In the case of Dodds v Walker [1980] 1 WLR 1061, in the Court of Appeal, Templeman LJ said:

…if an act is authorised to be performed on any arbitrary day in any month of the year, then one month elapses on the corresponding day of the next month, provided that the day of the act itself is excluded from computation.

In the same case, in the House of Lords, Lord Diplock said:

The corresponding date rule is simple.  It is easy of application.  …all that the calculator has to do is make in his diary the corresponding date in the appropriate subsequent month.

In the same case, Templeman LJ clarified that if the period expired on a date that did not exist in a particular months (eg 31st February), then the period would expire on the last day of that month.

As Lewison (now Lewison LJ) points out in his book, The Interpretation of Contracts, 3rd edition, at page 426, this case was concerned with interpretation of a statute, but the same rule applies to contracts.

Note that the corresponding date rule assumes that you start counting on the day after the notice is given.  Case law on this and other detailed issues concerning calculation of dates, is summarised in our book, A-Z Guide to Boilerplate and Commercial Clauses, second edition, at page 347 onwards.

IP Draughts’ preference is to avoid using months as the basis of calculation, in view of the complexities described above.  Stating a notice period of 90 days reduces the risk of incorrect calculation.  Giving a few extra days’ notice to be on the safe side may also reduce the risk of giving an invalid notice.  When making that calculation, the separate provisions of the contract’s notices clause should not be overlooked.

Coming back to the Abu Qatada case, it appears that the cautious view would be to assume that one starts counting on the day after the judgment, and that an appeal could be lodged by the other side at any time up to midnight on Tuesday 17th April.  It is not yet clear whether the Home Office legal department was asked to advise on this point and, if it was, what advice was given.

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Filed under Contract drafting