NB _000 75 2_ 11. 11
Domain names in the UK ... 07
Confidential information and trade secrets ... 08
Introduction
In the UK, intellectual property is protected by a complex, sometimes overlapping set of laws that are derived from both English common law and legislation as well as European legislation. Some of these intellectual property rights (IPRs) such as patents, registered trade marks and registered designs, require registration in order for a right to arise. Other rights such as those relating to copyright, passing-off, confidential information and unregistered designs arise automatically.
Under UK law, in many (but not all) cases, IPRs developed by an employee will be owned by the employer. In cases where IPRs will not automatically be owned by a company (e.g. when outside consultants are used), the company’s right to ownership of any IPRs created should be protected by a contract. For more information on this, see our article on Ownership of Intellectual Property Rights.
A company should be properly advised under English law as to how best to identify and then protect the IPRs it may have, as well as how to avoid infringing the rights of third parties. Read on for more detail on IPRs and how to protect them.
Patents
A patent may be secured for the UK either through the UK Intellectual Property Office (UKIPO) or the European Patent Office (EPO), with the additional possibility of entering either system by means of an international application under the Patent Co-operation Treaty (PCT). If granted, a patent confers an exclusive and absolute right to exploit what is covered by the patent and can give 20 years protection provided it is renewed every five years. This period of protection may be extended for medicinal and “plant protection products” by applying for a Supplementary Protection Certificate.
European patent
A European patent (EP), when granted, is essentially a bundle of separate national patents for all the designated states of the EP application. An EP designating the UK (EP (UK)) is treated in the same way as a UK patent in all respects bar one. An EP (UK), as with a UK patent, may be subject to invalidity proceedings in the UK for the duration of its life. There is one significant difference between the two: the EP as a whole is also open to opposition centrally at the EPO, but only for nine months from grant.
Grant
Within 12 months of making an application for a patent in any country in the world, in order to have a chance of being granted patent protection in the UK (or anywhere else in Europe), an application must be made designating the UK (either directly or through the EPO). Otherwise, the invention will be considered part of the prior art and not patentable in the UK.
Priority is based on the first application made anywhere in the world. Provided the applicant applies for a patent designating the UK within the 12 months permitted, it will be the date on which the first application was made (the priority date) that will be considered when assessing prior art.
Validity
In order for a patent to be valid there must, on the priority date, be an invention that is:
novel (not “anticipated by the prior art”); inventive (not “obvious to a person skilled in
the art”);
capable of industrial application; and not excluded from patentability (crucially
schemes, rules or methods for performing mental acts, playing games or doing business, and computer programs as such are
excluded).
Questions of validity are examined very thoroughly in the UK Courts. Patents are regularly revoked. Applications for revocation and/or declarations of non-infringement may be brought whether or not the applicant has been threatened with Court proceedings.
Infringement
A UK or EP (UK) patent can be infringed by doing certain acts in the UK without the patentee’s consent, these being:
making, disposing of, offering to dispose
of, using, importing or keeping a patented product or a product obtained directly by means of a patented process;
using or offering for use in the UK a patented
process;
supplying or offering to supply in the UK a
person other than a licensee with any of the means relating to an essential element of the patented invention for putting the invention into effect – in order to infringe the supplier must also know, or have reason to believe, that such means will be used to put the patented invention into effect in the UK.
Patent proceedings
Court proceedings involving UK and EP (UK) patents take place in the UK only and mainly in London. They are heard by specialist judges in specialist patents courts. The judges make their own decisions; there is no jury.
Patent litigation in the UK takes place in the Patents Court (a division of the High Court) or the Patents County Court depending on the complexity of the case. More complicated cases or cases where the value of the case is over £500k are heard before the Patents Court. The procedure in the Patents Court is thorough and generally involves:
discovery of documents; experiments (when needed);
written fact and expert evidence (experts are
party-appointed, not court-appointed);
cross-examination of those witnesses live at
trial; and
infringement and validity being dealt with in
one trial.
The Patents County Court provides a more streamlined and cheaper alternative to the procedure at the Patents Court.
The level of complex experimental information presented and the amount of cross examination will be controlled in the Patents County Court, providing a more informal and generally cheaper procedure for small-medium enterprises and private individuals.
If either party to an action in the Patents County Court believes the Patents Court is more
appropriate, an application can be made to transfer. Remedies for the patent owner in either court include a temporary or permanent injunction, delivery up or destruction of goods, the award of damages or an account of the infringer’s profits and an award of legal costs.
The decisions of the UK patents judges are regarded as well considered and often carry persuasive weight in circumstances where the same patent is being litigated in other European jurisdictions.
Registered trade marks
and rights in passing-off
A company’s trading names, brand names and logos can all be protected as registered trade marks. Where not registered, they may be protected by the common law action of passing-off (similar to the law of unfair competition in other jurisdictions).
Logos may also be protected by copyright. Registration of a trade mark is not compulsory. Registration confers a statutory monopoly in the use of that trade mark in relation to the goods or services for which it is registered and in relation to similar types of goods and services. An action for infringement of a registered trade mark is much simpler than an action in passing-off.
Registration
The three ways of obtaining a registered trade mark that covers the UK are by applying for:
a UK registered trade mark at the UKIPO; a European Community trade mark (CTM)
at OHIM, one registration covering all the countries of the EU; or
an international mark under the Madrid
Protocol. This is a system where one central application can result in multiple separate national trade mark registrations that are treated independently.
A trade mark must satisfy the following criteria in order to be registrable:
it must be capable of being represented
graphically; and
it must be capable of distinguishing the
applicant’s goods or services from the goods or services of other businesses.
It is possible to register words, designs, three dimensional shapes, and colours.
One application can be used to cover multiple classes of goods and services at the same time. Once an application has satisfied these criteria, the trade mark is advertised in an official journal. This gives third parties the opportunity to oppose registration of the trade mark applied for. Trade mark owners should keep watch (either in-house or through an out-sourced commercial provider) of these official journals in order to oppose marks they consider to be confusingly similar to their own.
Once registered, a mark must be used by the proprietor (or his licensee), and must not be left unused for a continuous period of five years, otherwise it risks being revoked for non-use.
Infringement
The proprietor (and sometimes an exclusive licensee) of a registered trade mark may take action for infringement of a registered trade mark (no action can be taken until the trade mark has been registered). Infringement takes place if a third party, in the course of trade and without consent, uses:
an identical mark on identical goods or
services to those registered;
an identical mark on similar goods or services
where there is a likelihood that the public will be confused;
a similar mark on identical or similar goods and
services to those registered where there must be a likelihood that the public will be confused; or
in respect of a trade mark that has a
reputation in the UK, an identical or similar mark on similar or dissimilar goods or services. Infringement occurs if the mark is used without due cause and takes advantage of, or is detrimental to, the character or repute of the registered trade mark.
Examples of acts of infringement include:
using the mark on goods and packaging; offering goods for sale or supplying services
under the mark;
importing or exporting goods under the mark; using the mark on business papers or in advertising; using the mark as part of a corporate or
trading name;
using the mark on a website; and
using the mark orally, for example, in a radio or
TV advertisement.
Remedies are similar to those for patent infringement.
Comparative advertising
It is open to a trader to use another’s registered trade mark in an advertisement provided its use “is in accordance with honest practices in industrial or commercial matters” and the use would not take “unfair advantage of, or be detrimental to, the distinctive character or repute of the registered trade mark”. The UK courts have interpreted this wording as allowing comparative advertising provided it is not significantly misleading.
Passing-off
If a trader has not registered a mark, it may be able to rely on the common law rights in passing-off. These provide similar protection to registered trade marks but are more difficult to enforce. In order to succeed in an action for passing-off, the trader will need to prove the following:
a reputation in the trade mark in question
so that members of the public associate the mark with his or her goods and/or services;
actual confusion, or the likelihood of confusion
by members of the public between the infringing goods / services and the trader’s goods / services; and
damage (typically financial loss).
This makes such actions considerably more expensive than actions for registered trade mark infringement, because of the evidence that has to be filed.
Use of new trade marks
Before launching a new branded product or service a trader should carry out trade mark searches of the relevant registers in the territories in which it wants to use the trade mark. A trader should also conduct internet searches in order to spot (as far as possible) unregistered use of the proposed mark. Otherwise there is a risk that the mark under consideration may infringe somebody else’s trade mark rights.
Registered and
unregistered design
rights
We do not have utility models in the UK. We do have design rights. The law relating to them is somewhat confused by the number of rights available in the UK. These are:
European Community registered designs
(CRD);
UK registered designs (UKRD);
European Community unregistered designs
(CUD); and
UK unregistered designs (UKUDs).
Registered designs (RDs)
Essentially the two RDs are the same with only their geographical remit being different: the CRD is a unitary right covering the whole of the EU and the UKRD only covers the UK.
These definitions are of critical importance:
Design: “the appearance of the whole or a
part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture or materials of the product or its ornamentation.”
Product: “means any industrial or handicraft
item other than a computer program: and, in particular, includes packaging, get-up, graphic symbols, typographic typefaces and parts intended to be assembled into a complex product.”
So, designs are elements of appearance in products.
In order to qualify for a RD there must be a design (as defined) that is:
new and has individual character; and not dictated by the technical function of the
product (as defined).
RDs last for a period of five years and can be renewed for successive five year periods up to a maximum of 25 years.
Infringement
Infringement takes place if a third party, without the consent of the proprietor, uses the design or any design which does not produce on the informed user a different overall impression. The term “use” includes:
making, offering, putting on the market,
importing, exporting or using a product in which the design is incorporated or to which it is applied; or
stocking such a product for those purposes.
Community unregistered design
(CUD)
For industries where design changes very fast, for instance the fashion industry, the RD system may be too slow and cumbersome. For these industries there is also the CUD.
The CUD arises automatically and provides some short-term protection for designs without the time-consuming process of registration. To qualify, there must be a design as defined for the RD (see above).
The acts of infringement for an RD are also the acts of infringement for a CUD. In addition, with respect to CUDs the proprietor must show that the infringer has copied the protected design. The right lasts for three years from the date the design was first made available to the public.
UK unregistered designs (UKUDs)
This right is very distinct from the CUD and should not be confused with it in its mode of application.
The right is subject to fairly complex qualification rules relating to the nationality of the:
designer; employer; commissioner; or
first marketer of the product.
If any of these individuals is a British or other EU state national or is habitually resident in any of these states, then a UKUD is likely to be available. If the nationality or habitual residence of all these individuals is not in any of these states, a UKUD is likely to be unavailable.
A UKUD arises automatically in respect of an “original design” comprising “any aspect of the shape or configuration (whether internal or external) of an article” which is not surface decoration. It is significantly different from the other types of design right described above in that it does not require any kind of aesthetic appeal on the part of the viewer. Indeed, the UKUD can protect designs that the human cannot even see (such as semiconductor topographies).
Essentially, the purpose of the right is to give relatively short-term, informal protection to technical designs. However there are two important exceptions to protection of such designs. These are “features of shape or configuration which:
enable the article to be connected to, or
placed around or against, another article so that either article may perform its function” (the so-called ‘must fit exception’), or
that the creation fits into one of the
categories of work that copyright protects. These categories include: computer programs, music, books, photographs, drawings, logos and sculptures.
This means that, while very many creations are protected, some are not. For example, the smell of a perfume, a brand name, the collection of objects featured on the cover of Oasis’ Definitely Maybe album and the Stormtroopers’ helmets in Star Wars are all not protected by copyright (although other intellectual property rights might protect them).
An important further limitation on copyright is what is often known as the “idea / expression” dichotomy. Copyright does not protect ideas (no matter how inventive or novel they are). Instead, it protects the expression of those ideas. For example, copyright would not protect the idea, plot or incidents of a computer game but it would protect how those ideas are expressed in the programming code and the images used in it. Copyright comes into existence automatically when the relevant work is created. This can make it a powerful right, because not only are no formal steps needed before it can be relied on but it lasts for 70 years after the death of the creator.
Copyright is owned by the creator unless that creator creates the work as an employee, in which case the employer will own it. This automatic ownership for the creator can cause problems for the unwary - if third parties are creating works, written agreements should be in place ensuring the intended party owns the copyright or setting out who owns what proportions. See our article on Ownership of Intellectual Property Rights for more information about this.
Copyright gives its owner the right to stop other people doing various acts with its works without consent (which can be express or implied). These acts include:
copying - for example, format-shifting and
the temporary copies that are created on a computer when a news article is read; and
“are dependent upon the appearance of
another article of which the article is intended by the designer to form an integral part” (the so-called ‘must match exception’).
These exceptions were specifically intended to prevent spare parts from benefiting from protection as UKUDs.
UKUDs expire 15 years after first recording the design in a design document or the first making of an article to the design, whichever is the sooner. Alternatively, if a design is marketed anywhere in the world in the first five years of the duration of the right, the right will expire 10 years after such first marketing.
Infringement
In order to infringe a UKUD, a third party, without the consent of the proprietor, must:
reproduce the design (i.e. copy it) either
directly or indirectly so as to produce articles exactly or substantially to that design (primary infringement); or
know or have reason to believe that he is
dealing with an infringing article where dealing includes:
importation for commercial purposes; possessing for commercial purposes; selling;
letting for hire; or
offering or exposing for sale or hire, in the
course of a business.
Copyright
Copyright gives a bundle of rights to creators to prevent other people from copying, using or exploiting their original works without their consent. It is the most pervasive of all intellectual property rights, subsisting in anything from menial pieces of text to great works of art, literature and music.
Copyright only protects “original works”. Would-be copyright owners have to show two things:
that their creation is original - i.e. that it
originates from the creator and has required some skill, labour and judgment in creating it. This is normally easy to show; and
Registering a domain
Registration should be carried out via a registrar who will carry out the process of registration for a fee. Reputable registrars can be found on the Nominet website which also provides guidance to businesses in their choice of registration, including comparing prices and considering matters such as whether they will automatically renew the registration on behalf of the company if and when it expires.
When registering a domain, a business must sign up to Nominet’s terms and conditions which include declaring that by registering the domain they are not infringing any trademark. By registering a name similar to a trademark as a domain name and then using that domain in a way likely to suggest an affiliation with that mark, an organisation may be in breach of trademark law and potentially face legal action. For example, only Coca Cola could legitimately register coca_cola.co.uk as the name is so well known in relation to its mark that using it would in itself create the impression that there was an affiliation with that company or product. It is worth noting that a mark does not necessarily have to be registered in the UK to be infringed by a .uk domain.
If the owner of a trademark feels that its mark has been infringed by a domain name, in addition to having the option of pursuing trade mark infringement in the courts, it can pursue the infringement through Nominet’s dispute resolution procedure.
Nominet dispute resolution
The domain name registration process works on a ‘first come first served’ basis. Registrations can, however, be challenged on the grounds that they amount to an “Abusive Registration”. Nominet’s dispute resolution policy provides a non-exhaustive list of examples of Abusive Registrations including:
registering a domain name primarily for the
purposes of selling it to the Complainant or a competitor for an inflated fee or blocking an organisation with rights in the name from registering it (cybersquatting);
using or threatening to use a domain in a way
that is likely to confuse people;
communicating to the public - for example,
broadcasting and making available a work on the internet so that users can choose when and from where to access it.
These rights apply to the whole or a substantial part of a work. Even if less than all of a work is taken, if the remainder is altered or it is merged with another work, the copy may still be infringing if the part taken is sufficiently important to the original. The bar is set quite low, for example reproducing potentially even as little as 11 words of a newspaper article or four frames of a broadcast would be caught.
If any of these acts have been carried out, the potential infringer would have to show that one of the defences to copyright infringement applies. Defences in the UK to copyright infringement are defined narrowly. If there has been copying, for example, the copier must show that what it did was for one of the legitimate purposes set out in the legislation such as fair dealing for criticism, review or news reporting or for time-shifting. There are no general defences available like the US “fair use” defence. There is also no exception in the UK, for example, for parody (although this is under review) or for making other creative use of works for non-commercial purposes.
If they can show infringement, copyright owners can obtain a number of remedies: temporary or permanent injunctions, damages or an account of the infringer’s profits, delivery up or destruction of goods and recovery of their legal costs.
Domain names in the UK
Domain name jurisdiction, unlike other forms of intellectual property, is determined not by where the business or creator seeking protection is based, but by the top level domain. There are currently 22 top level domain names available in addition to country names such as .fr and there will soon be many more. Domain names originate in the US where they are issued and administered under the aegis of ICANN (the Internet Corporation for Assigned Names and Numbers). However .uk domains are overseen by a company based in Oxfordshire called Nominet (www.nominet.org.uk).
Confidential information
and trade secrets
Confidential information
The law of confidential information is an ancillary right used to protect commercially sensitive, valuable and private information which is not afforded protection under more usual intellectual property rights such as copyright. This protection is generally owed to the person who created the information (or paid for it to be created), but the rule is not absolute and is largely dependant on the circumstances in each case. An obligation of confidence can also apply to third parties who receive information by accident or through any other means, even if they don’t know at first that it is confidential.
To be protected, the information must have the required “quality of confidence” (i.e. not be public property or information in the public domain) and have been disclosed in circumstances where an obligation of confidence would be expected to arise. Merely stating something is confidential will not automatically mean it is confidential information.
Circumstances where an obligation of
confidentiality arises
You can keep information confidential: (i) by expressly imposing such an obligation contractually; (ii) if it’s implied as a result of the circumstances of disclosure; and (iii) if it’s implied because one party owes an obligation of confidentiality to another because of a special relationship (e.g. employment relationship).
How long will you be afforded
protection?
In theory, confidential information may be protected indefinitely subject to it remaining confidential in nature and not losing its commercial value or becoming out-of-date. In the case of ex-employees, they will have a duty to keep information confidential for a similar period as, for instance, any restrictive covenants which might be in their contract.
registering a series of names which are similar
to names in which the Respondent has no rights (it is up to the Complainant to prove that there is such a pattern); and
providing Nominet with false details.
Failure to use a registered domain name does not, in itself, constitute proof of an Abusive Registration. Legitimate registration and use of the domain can be shown by, for example:
demonstrating it is genuinely using or
preparing to use the domain for a bona fide offer of goods or services (provided it is not attempting to mislead as to the vendor of these goods and services);
demonstrating that it has been commonly
known or associated with a name or mark similar or identical to the domain; or
showing that the domain name is generic
and, therefore, the Complainant can have no legitimate right over it.
Nominet is responsible for making any changes to domain name ownership required at the end of the dispute resolution procedure.
New top level domain names
ICANN has announced that it will allow
organisations to apply for their own bespoke top level domain names, for a 90-day period starting in January 2012. For example, Coca-Cola might apply for “.coke”, apple might apply for “.apple”. However, it will cost $185,000 (£114,000) to apply for the suffixes, excluding costs associated with putting together a good case in favour of being granted the top level domain.
In order to qualify, companies must demonstrate that they have sufficiently robust IT systems to run and protect the domain, as well as a matrix of trademarks and IP rights which support a legitimate claim to the domain name. While the situation regarding brand names is likely to be relatively clearcut, a more general name such as, for example, .water, could attract multiple applicants in which case it would be auctioned to the highest bidder making costs potentially even greater.
Breach of contract
(employment contracts)
Employees will be under an implied duty of fidelity, good faith and a duty to keep any commercial information within their employer’s organisation confidential. Such obligations may also be expressly incorporated within their contracts. These duties will, however, vary depending on the employee’s role (e.g. a director will be under additional obligations to the company).
Post-termination restrictive
covenants
Employers can also expressly incorporate restrictive covenants which will apply after an employee leaves the organisation. These must not be drafted too widely, but can include obligations not to use or disclose any confidential information or trade secrets, trade connections, customer lists and any goodwill which was built up with customers after they have left the organisation.
Database right infringement
An employee might be in breach of the Database Directive (96/9/EC) if he utilises information for his own benefit (e.g. using client lists) which he extracted from a secured database which he had access to within his employment.
Other causes of action an employer may consider can also include copyright infringement, passing-off, trade mark infringement, protection afforded against domain names and inducing a breach of contract. Again these will have to be assessed on the individual circumstances in each case. The remedies available to recover any trade secrets or confidential information from an employee may include: (i) injunctions (e.g. search and seizure orders); (ii) delivery up, where an ex-employee needs to hand over any confidential documents; (iii) damages; or (iv) account of profits.
Examples of information that may be considered confidential: Scientific theories Financial information Statistics Customer lists Certain formulae Processes Certain recipes
Plans, inventions & drawings Computer programmes
Infringement
To bring an action for breach of confidence a party will need to prove that there is an actual or threatened breach. An actual breach can involve either disclosing the information or using it in an unauthorised manner. The remedies available to a successful party in these circumstances are either to recover on ‘account of profits’ some or all of the profits (if any) made by the infringing party, or compensation for damages. A threatened breach, on the other hand, may possibly be remedied by applying for an injunction.
Other possible remedies might also be available depending on the circumstances in each case. These can include remedies analogous to a breach of contract or breach of a fiduciary duty if a contract is involved or a special relationship exists.
Trade secrets
Confidential information can extend to include trade secrets. Employers will want to safeguard their business and make sure employees don’t disclose any confidential information or trade secrets they acquired during their employment or use it after their employment to make an unlawful profit (e.g. using customer lists to set up a rival company).
Infringement and remedies
As well as pursuing an employee (or
ex-employee) for breach of their obligation to keep information confidential there will also be other ways in which an employer can protect itself.
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© Taylor Wessing 2011
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