Ofcom Online Copyright Infringement Tracker Wave 3

Ian predicted below that research into online copyright infringement would continue — as Ofcom's publication this week of its "wave 3" online infringement tracker demonstrates, it was a prediction well made.

The report is quite lengthy, and I have only skimmed through it, but I'm posting in case it is a resource useful to others studying this module.

One sentence which jumped out at me — something which always annoys me — is that the report writer appears to equate the use of BitTorrent with copyright infringement. BitTorrent may well be used for copyright infringement, but there is a real risk that we slide towards regulating technologies because of their potential for infringement, or even because they are used for infringement, rather than treating them as conduits, just as with communications providers, with a detrimental impact on innovation and creativity.

Piracy - Winners and Losers

The European Commission has (something that was news to me)  a Joint Research Committee. Apparently

the Digital Economy Research Programme at the JRC Institute for Prospective Technological Studies, which carries out economic research on information society and EU Digital Agenda policy issues, with a focus on growth, jobs and innovation in the Single Market. The Digital Economy Research Programme is co financed by the Directorate General Communications Networks, Content and Technology.

This quote comes from the title pages of a report commissioned from the Institute for Prospective Technological Studies , http://ipts.jrc.ec.europa.eu/> and published by the committee under the title  ‘DigitalMusic Consumption on the Internet: Evidence from Clickstream Data’. 

The report’s abstract summarises its key – and somewhat controversial finding:

The goal of this paper is to analyze the behavior of digital music consumers on the Internet. Using clickstream data on a panel of more than 16,000 European consumers, we estimate the effects of illegal downloading and legal streaming on the legal purchases of digital music. Our results suggest that Internet users do not view illegal downloading as a substitute to legal digital music. Although positive and significant, our estimated elasticities are essentially zero: a 10% increase in clicks on illegal downloading websites leads to a 0.2% increase in clicks on legal purchases websites. Online music streaming services are found to have a somewhat larger (but still small) effect on the purchases of digital sound recordings, suggesting complementarities between these two modes of music consumption. According to our results, a 10% increase in clicks on legal streaming websites lead to up to a 0.7% increase in clicks on legal digital purchases websites. We find important cross country differences in these respects.

Essentially, the argument is that online piracy actually benefits right owners as people who access material in this way are likely to increase their use of legal sources.

The study is based on investigations in 5 European counties; France, Germany, Italy, Spain and the UK so is somewhat limited in its scope. It indicates that the ‘positive’ effects are greater in the Northern European States than in Spain and Italy.

Some other studies have reached similar conclusions but the majority confirm the views of most involved in the copyright industries that  piracy is a drain on its resources. The leading industry organisation, the International Federation of the Phonographic Industry (IFPI), has responded to the publication with severecriticisms of the report’s methodology and its conclusions.

I suspect the debate will continue.

The Times: IP Article

There is a 16 page article called Intellectual Property in the Times today, 18/03/13. It's by specialist media company Raconteur and is well worth a read.

It contains some very interesting pieces on IPR largely around patents e.g. the Patent Box tax incentive setup by the UK government as well as smaller articles on combating rogue traders, and social networks IPR.

If you cannot get hold of a hard copy and don't have an online subscription I believe it is possible to access it via Nexis but I haven't tried it myself.

Patent Wars

Although there are tentative signs of moves towards a peace treaty, the technology giants Apple and Samsung have been engaged in a series of patent disputes in a range of countries. The High Court in London delivered judgements in respect of two disputes in March 2012 – making some reference to decisions of the German courts in identical litigation. The two cases are Samsung Electronic Co. Lt. v Apple Retail UK Ltdand Apple Sales International [2013] EWHC 467 (Pat) and a second case of the same name reported at  [2013] EWHC 468 (Pat). The former contains the most detailed legal analysis.

As with all patent litigation, the background to the dispute is technical and I must confess to understanding around one word in ten in the (lengthy) technical sections of the judgements. I think the essential dispute is relatively simple.  Samsung had been granted patents for elements of technology used to enable mobile phones to connect to mobile networks. These had come to form the basis of international standards for GMS and LTE mobile telephony (effectively 3G and 4G systems).

Where patented technology is used as the basis for international standards it is a condition that the patent holder licence its use to any party upon fair and reasonable terms. Samsung were willing to allow Apple to use its technology in return for a royalty payment amounting to  2.4%  of its income from iPhone sales. Such tactics are fairly common in patent litigation. Microsoft own patents in respect of technology used in Android phones and it has been estimated  that companies such as HTC and Samsung which manufacture these phones pay royalties of between $10-12 per phone. The income for Microsoft from these two companies alone is around $3 billion per annum. Given Microsoft had an income of around $70 billion in 2012, the benefits are clear and illustrate why companies such as Apple and Microsoft and Google are willing to pay massive amounts of money to but patent portfolios from technically innovative but financially challenged companies such as Kodak and Motorola.

There was no doubt that Samsung owned patents and the judge made it clear in both cases that that the iPhone infringed them. But, and it proved to be a very big but, the validity of any patent can be challenged at any time. Apple claimed that the Samsung patents were invalid.

Timing is always important in patent matters – as illustrated famously by the telephone patent example of Alexander Graham Bell and Elisha Gray. In the present litigation Samsung had been awarded a number of European patents whose validity extended to the UK. These patents were derived from (the technical term is claimed priority from) earlier patents awarded to Samsung in South Korea. The Patent Cooperation Treaty provides that patent applicants have a period of 12 months from the date of submitting an application in one signatory state to submit elsewhere and claim the benefit of the earlier date. Submission in different states and in different languages can and does cause linguistic problems. In this case the judge (Mr Justice Floyd) commented:

Neither the 726 patent, nor the document from which it claims priority is a well drafted document. Not only have they both suffered in translation, but there is a looseness of definition and lack of clarity which must, it seems, go back to the original Korean. It is more important than ever to recall that it is the technical understanding of the skilled person, rather than the patent lawyer or grammarian, which one is seeking to extract from the document. (Para 35)

The first leg of Apple’s argument was that the European patents were not sufficiently closely related to their Korean precursors to qualify for protection. As any mobile phone user will be aware the pace of development in the field is rapid and it was conceded by Samsung that if they could not claim priority, their European patents would be invalid on the ground that the technologies they described was not novel.  Apple’s second claim was to the effect that the European patents (and by implication the Korean ones) were invalid because the technologies described failed to meet the key requirement of patentability that there be an inventive step. Samsung’s patent applications had, as is required, listed what it considered to be the current state of the art.  Apple argued that, taking the state of the art into account, a person reasonably skilled in the field would have regarded Samsung’s patented technology as an obvious next step.

Issues of Priority

The Patents Act 1977 provides that an invention is entitled to priority if it is supported by matter disclosed in the priority document.  Article 87(1) adopts rather different terminology providing that priority may be derived from an earlier application in respect of the "same invention".

The Patents Act provides that it is framed to have the same effect as the Convention and reference was made to the decision of the Enlarged Board of Appeal of the EPO in G02/98 Same Invention, [2001] OJ EPO 413. Here it was stated that priority:

is to be acknowledged only if the skilled person can derive the subject-matter of the claim directly and unambiguously, using common general knowledge, from the previous application as a whole.

As laid down by the Court of appeal in Unilin Beheer v Berry Floor [2004] EWCA (Civ) 1021 the test is effectively whether a skilled person could read the prior patent and know how to apply  the invention described in the first patent.

What we see here is a nice illustration of the difference between novelty and obviousness. It is not enough that the notional skilled person could read the prior patent and see an obvious way to develop it in a different way. It has to be the same way. Where (linguistic issues apart) patents are the same there is no significant problem. Here though, as in many cases, there were differences.  In an example which has been used in the courts, there might be a prior patent which claims elements A+B+C. Can a later patent which claims elements A+B only claim priority. The less than completely helpful answer, as so often was that it all depends. Patents can be very different in their nature. They may describe new technology in which case omitting one item from a later application may not be significant. Alternatively, a patent may relate to the combination of existing items in a novel manner. Omitting one may take it outside the scope of the prior patent. To give a very trivial example, mixing red, yellow and blue paints will produce (depending on the combinations) shades of grey or brown. Mixing only blue and yellow will produce green. Quite a different thing.

In construing the terms and scope of a prior patent it is well established that the task facing a court is to consider what a person ‘skilled in the art’ would have understood the patent to mean. This involves consideration of the specification and also of the claims listed in the document. The latter, was emphasised by Mr Justice Floyd are more important:

the exercise is one of construing the language of the claims in the context of the specification. The meaning of that language is informed by the technical understanding gained from reading the specification. Thus the specification has an important role in understanding the meaning of the language used. It is not, however, a proper approach to construction to start with the specification and ask what a patentee who has made that disclosure might be intending to claim, and then to shoe-horn the meaning of the language of the claim to fit with that understanding, whatever language he has actually used. To do so would be to afford supremacy to the description over the claims, contrary to the guidance given by Article 69 EPC and its protocol. (at para 67)

He continued at paragraph 106 :

If I may summarise, the task for the court is therefore:

(a) to read and understand, through the eyes of the skilled person, the disclosure of the priority document as a whole;

(b) to determine the subject matter of the relevant claim;

(c) to decide whether, as a matter of substance not of form, the subject matter of the claim can be derived directly and unambiguously from the disclosure of the priority document.

After considering the evidence of expert witnesses for both parties the judge concluded that the European patent could not claim priority from the earlier Korean patent. In essence this conclusion would have been sufficient to dispose of the case. It was conceded by Samsung that developments in technology between the dates would have meant that the European patent application would have been struck down for lack of novelty. To cover the possibility that this element of the judgment might be struck down on appeal he continued to deal with Apple’s second challenge. As was stated:

Apple contend that the 726 patent is obvious over two prior art citations. The first is an article by Bömer and others entitled “A CDMA Radio Link with ‘Turbo-Decoding’: Concept and Performance Evaluation (“Bömer”). The second is an article by Valenti and Woerner entitled “Variable Latency Turbo Codes for Wireless Multimedia Communications” (“Valenti”)

The Bömer article was published in 1995 and the Valenti article in 1997. As indicated above, both were cited in the Korean and European patent applications as evidencing the existing state of the art. Samsung claimed that their patents marked a sufficient advance over the state of the art. Counsel for Apple argued that a skilled person reading the cited articles would consider the subsequent patent specification to have been an obvious development from them.

 Inevitably much of the material in the judgement is very technical in nature. The legal approach to be followed was specified by the Court of Appeal in Pozzoli v BDMO [2007] EWCA Civ 588 in the form of a four step test. As summarised at paragraph 148 in the present case, this requires the court to  

(l)(a) Identify the notional "person skilled in the art"”

(b) Identify the relevant common general knowledge of that person;

(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;

(3) Identify what, if any, differences exist between the matter cited as forming part of the "state of the art" and the inventive concept of the claim or the claim as construed;

(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?

Most judicial attention in the present case focused on the Bömer article. This described a concept  for transmitting speech and data on 3G mobile networks. Samsung had implemented this in practice but the question was whether a skilled person reading the Bömer article and then the Samsung patent would say that the latter was an obvious step? The court accepted that the article and the patent had significant differences. The latter was certainly novel in patent terms but as the judge concluded:

Neither side’s expert suggested that this would present any difficulty. Both experts also expressed the view that it was obvious in the light of Bömer to specify different bit error rates, and thus different super frame sizes for the same service.

155. I have therefore come to the very clear conclusion that claims 1 and 14 are obvious in the light of Bömer.

In total the Samsung patent had 25 claims. In a course of action that attracted judicial displeasure, Samsung argued that each claim stood by itself. This is contrary to normal practice and the judge was of the view that claims 1 and 14 were vital to the whole patent as all the other claims were dependent upon them and, like a pile of dominoes, their fall would inevitably follow the major claims.

The judge did conclude that, if the Samsung patents had been valid, Apple’s implementation in its iPhone and iPad would have constituted infringement. Given his previous findings, this was, at best, a pyrrhic victory for Samsung. It is only one battle in a protracted war (and it remains unclear whether Samsung will appeal) but this was a decisive victory for Apple.

SAS Institute v World Programming

We had some discussion about this case last year. It concerned the question whether the defendants had infringed copyright in the claimant's package of programs. They had produced a competing product through studying the operation of the original programs. There was no question of access to the original source code.

At trial Mr Justice Arnold indicated doubt whether there was copyright infringement but referred a series of questions to the European Court of Justice. The answers were given last year and in a Judgement delivered on 25 January Mr Justice Arnold gave his final decision.

Perhaps unsurprisingly, the decision is very much in favour of the defendants. Copyright, he held did not subsist in programming languages and the activities conducted by the defendant fell within the ambit of the provisions of the  Directive on the legal protection of computer programs

Overall, an interesting case and further confirmation of the limited extent of copyright protection against acts which do not involve mere copying of an original work.

"News outlets improperly used photos posted to Twitter: judge"

I'm not convinced that this is as ground-breaking as the article suggests — "one of the first big tests of intellectual property law involving social media" — both because we've had an almost identical case around Flickr in Europe, and because the principle that making something available to the public is not the same as making something available as a free for all is pretty much the central notion of copyright as a property right, but here's a story confirming that putting something online does mean it is available for free commercial use.

"Free Ride"

If you are looking for something to read over Christmas, you might enjoy "Free Ride,' by Robert Levine.

It's not the kind of book I would usually read — I tend to an anti-copyright stance — but I thought it was well-written, and really quite interesting. It did make me question whether creativity would flourish or fail in the absence of copyright, although I was not convinced by the argument that Internet access providers should pay rightsholders on the basis that they profit from infringement (perhaps not unsurprisingly).

Worth a look if you are interested in a slightly different approach to copyright in the digital age.