Learn more, at the IPR webinar September 3rd 11-30 to 13-00.
From little acorns, great oafs do grow; IP protection is important for businesses and other entities both big and small.
An interesting short article is attached concerning IP protection, for small businesses but translatable to other entitities commercial and non-commercial.
An additional reference to the suggestions contained in the above article (registering trademarks and distinctive logos, patent protection for Software Apps, and protection by asserting copyright and design rights in Software), would be to highlight the continuing success of the Intellectual Property Enterprise Court. For multitrack cases (complex legal issues cases) the IPEC has a limit on damages of up to £500,000 – which Court can hear trademark, patent and copyright infringement cases. Costs orders will be made which are proportionate to the nature of the dispute and subject to a cap of no more than £50,000. This arguably puts resolution of intellectual property disputes within reach of small and medium sized enterprises, especially in meritorious cases with a considerable sum in dispute.
The small claims track is for suitable claims in the IPEC with a value of up to £10,000. Costs orders on the small claims track are highly restricted.
The Intellectual Property Enterprise Court and Guides can be found at:
Please note in the attached statutory instrument, which came into force on 1 June 2014, the introduction of the new s29A (copies for text and data analysis for non-commercial research) of the Copyright Designs and Patents Act 1988, which makes provision for the copying of material in order to carry out a ‘computational analysis’ of all the materials contained within the copyright work for the purposes of ‘non-commercial research’.
This provision covers all types of copyright work for the purposes of section 1 of the 1988 Act, including literary dramatic, musical or artistic, and for the purposes of section 29(4). This is part of the Government’s policy to permit copying of copyright material for educational and research purposes, and to be used in line with modern and innovative teaching methods.
New sections 32, 35 and 36 of the 1988 Act are substituted; the new section 32 is a fair dealing permission with a copyright work for the sole purpose of illustration for instruction (including acts done in the ‘setting and answering of examination questions’ – section 32(2). Again, the dealing must be for a ‘non-commercial purpose’ and be by a person giving and receiving the instruction.
The new section 35 permits educational establishments to make copies of recordings of broadcasts which have been made for non-commercial educational purposes of the establishment and communicate them to staff and pupils. There is an added proviso for communication off premises, that the communication is by means of a secure electronic network accessible only to staff and pupils.
There are other changes including copying and the amount of a work that may be copied in any 12 month period; and the reader is referred to the attached Statutory instrument for the main amendments to the 1988 Act. The references to required licences from copyright owners, including commercial licences, where they could be validly put in place, would be reviewed and negotiated by Universities and the Contracts Officer in the usual way. Any advice required in relation to the same should be sought in each case.
The Statutory Instrument: Copyright Rights in Performances (Research, Education, Libraries and Archives) Regulations 2014 No. 1372:
In R (Rotherham Borough Council et al) v Secretary of State v Business and Skills  EWCA 1080 it has been very recently reported that the Councils in the appeal, had disappointingly suffered a defeat in the Court of Appeal (on 28 July) in their claim for judicial review. That much is true.
However on 30 July (yesterday), the combined Councils’ expedited appeal, including the assertion that the Government owed a public sector equality duty pursuant to section 149 of the Equality Act 2010 has won favour in the UK Supreme Court and is due to be heard on 22 October.
The combined appeals included breaches of UK and EC law directed at the Government’s failure in duty by producing discriminatory and disproportionate cuts in ERDF funding cuts for their regions – as found at first instance by Stewart J.
This appeal will be of great interest and importance to Universities for a host of reasons, not the least of which being:
1. Novel arguments related to the macroeconomic funding including ERDF will be passed through the prism of high level EU principles of equal treatment and proportionality in the Department of Business Innovation and Skills failure to treat the Regions in the same way as other regions – the Court of Appeal indicated that the Commission had not imposed a legal standard as to how to allocate funds to transition or any other regions, and even if one were found a very high threshold of unreasonableness would need to be reached.
2. The public sector equality duty (the PSED) pursuant to section 149 of the Equality Act 2010 will also be relied upon in a very novel way to assert equal treatment, and to uphold the decision at first instance that the PSED was breached by the Government – Stewart J paragraph 93.
3. The wide margins of discretion and the broad discretionary brush wielded by Government in making political economic and social choice in allocation of funding had to involve exercise of broad discretion; pursuing objectives including ‘a target for improving conditions for research and development’ and a target for reducing greenhouse gases and emissions and increasing energy efficiency, was described as ‘classic territory for affording the decision maker a wide margin of discretion’ (at paragraph 57 of the Court of Appeal decision – Dyson MR)
4. The equal treatment principle, which requires that ‘comparable situations must not be treated differently and different situations must not be treated in the same way unless such treatment is objectively justified’. The principle was put more shortly: ‘Has there been a failure to treat like cases alike (and unlike cases differently)?’ The entire appeal was summarised to be about how the equal treatment principle should be applied; and what margin of discretion should be afforded to the Secretary of State when deciding whether different categories are alike or unalike – whether Liverpool could be compared with Highlands and Islands, or Northern Ireland in a meaningful sense (the ‘comparability question’). There is (apparently) no authority as to the issue as to the exercise of margin of discretion of the decision maker (in this case of the Secretary of State for Business Innovation and Skills) on the question of ‘comparability’ – and there lies the rub.
5. The Court of Appeal set out the comparators of the economic performance of the different regions, and they are the list that would be familiar to Universities in ERDF funding: general economic performance of different regions, respective employment rates for aged based groups, and significantly ‘conditions for research and development’ and respective greenhouse gas emissions (cf. the Energy Efficiency funding stream etc). The Court of Appeal perhaps rightly emphasised that the comparison exercise between regions was ‘multi-factorial’ – and then decided that the ‘decision maker is entitled to a wide margin of discretion in making such a decision’ – which should only be interfered with if a high standard of unreasonableness was met. It is difficult in my view to take sides on such an argument, but the University sector (indeed any party receiving ERDF funding) ought to be watching the progress of the appeal closely.
6. There was concern expressed in the appeal that the Councils’ domestic appeals (to be heard in October this year) would prejudice recipients in Funds in other regions, if not derail the entire ERDF funding stream itself. It was evident that the Commission’s position regarding the lawfulness of the Government’s policy was not formally known, and the parties were advised to obtain information and advise on further appeal as to the Commission’s position vis a vis the parties – central and local government. However, an expedited appeal, resulting from a permission hurried into the Supreme Court on the last day of term, is at least a first brisk step towards clarity. The issue as to whether following the forthcoming appeal there could be a reference to the European Court also remains open, and much would depend on the general position the Commission takes, which is currently unknown.
The decision of Justice Stewart:
the decision of the Court of Appeal on 28 July 2014:
Useful Local Government Article by Mark Smulian on the Court of Appeal defeat:
This case was the subject of a previous Blog; the hearing of the appeal being heard 17 to 19 June 2014, which was available for viewing on the live feed of the UK Supreme Court.
In the above decision, Lord Neuberger has confirmed at paragraph 7 (page 4 of the judgment) that a principal has a right to an account and equitable compensation for a bribe or secret commission. It was also recognised that where an agent acquires a benefit in breach of fiduciary duty, the relief is primarily restitutionary or restorative, rather than compensatory. As previously explored, restitutionary responses (as here) involve the agent giving back the enrichment received at the expense of the principal, as opposed to merely confining the principal to a claim for compensation for loss – probably by way of the personal claim only. This decision is much more expansive remedially.
The basic rule, according to FHR European Ventures’ should now be that an agent who obtains a benefit in breach of his fiduciary duty to his principal holds that benefit on trust for his principal. Equity for the present day (common law and equity having been fused since the Judicature Act 1873) has recognised the existence of a new proprietary right against agents in receipt of bribes or secret commissions.
At paragraph 7 of the Judgment it was further emphasised that the agent’s duty to account for the bribe or secret commission was a personal remedy in favour of the principal, against the agent.
The second important clarification made at paragraph 7 concerned the ‘equitable Rule’, which was stated to be that where a benefit is acquired by the agent as a result of his fiduciary position:
‘…the equitable rule is that he is to be treated as having acquired the benefit on behalf of his principal, so that it is beneficially owned by the principal. In such cases, the principal has a proprietary remedy in addition to his personal remedy against the agent and the principal can elect between the two remedies.’ (end of paragraph 7).
What are the practical implications? The practical implications for Universities
The Judgment covers much more of interest than what follows of course, however some of the general commentators have drawn out the following significant practical implications:
Firstly, the rule is not confined to agents and principals per se. The net is cast over other recognisable fiduciary relationships – employer-employee, company director, and persons acting in an official capacity, and of trustees acting under a formal trust. Universities are not uniquely affected by this change, but should audit transactions that involve potential conflicts of interest including any parties in transactions receiving commissions.
Secondly, full blown proprietary claims, coupled with the process of tracing (tracing as the process identifying the enrichment, which is now proprietary, and following substitutions of the property, in whatever form that substitution might take) can be made in the usual way, including tracing into the hands of third parties; subject to the usual defences for recipients of bona fide purchase. The proof of the existence of a proprietary base, following an agent’s receipt of a secret commission, would include the concurrent liability of the agent to a personal claim. Claimants could opt for making either a personal or a proprietary claim, depending upon the particular facts of the case.
All the usual remedies will remain, including Freezing orders, but would now be used in tandem with remedies for preserving proprietary interests.
Finally, agents in light of the confirmation that there is a proprietary base (inferred from the agent’s fiduciary status) in bribes and commissions, will need to inquire thoroughly into conflicts of interest that could arise from payments, or where possible, seek formal consent from principals to the receipt of any commissions. This is not a change unique to Universities, but highlights the need for parties to make detailed enquiries as to potential conflicts, and whether consents have been granted regarding commission payments. This would include enquiries from parties along the line of any transaction in which a University is involved where there is likelihood of commission payments. Once tracing has done its work, a Claimant wronged party can now hook the property or its value back from any party in the chain or into whose hands the property or its value has been traceably and survivably received – subject to defences.
The concern (‘traceable’ all the way back to Lister v Stubbs and further) that a proprietary claim against an agent was wrong and was never part of the law, for it would mean that unsecured creditors claims against an insolvent agent would be trumped by the proprietary claim of the principal; has been rejected. Lister v Stubbs, for good or ill, has been overruled.
FHR European Ventures Press Summary:
FHR European Ventures v Cedar Capital: Judgment
In relation to what is generally referred to as ‘Pre-publication research’please note that the Intellectual Property Act 2014 (which is enacted but not yet in force – coming into force on 15 July 2014), by section 22A, has created a novel exemption from the Freedom of Information Act 2000, for pre-publication research. The exemption obtained in the course of, or derived from a ‘programme of research’ will amount to exempted information if the following conditions are met:
(a) the programme is continuing, with a view to publication by a public authority (cf. Universities are public authorities pursuant to Schedule 1 Part IV clause 53 of the 2000 Act), of a report of the Research…and
(b) disclosure of the information under the 2000 Act before the date of publication would or be likely to prejudice: (i) the programme (ii) the interests of any individual participating in the programme (iii) the interests of the Authority (cf. the University) which holds the information, or (iv) the interests of the Authority mentioned in paragraph (a) if it is a different authority from that which holds the information.
Commentators have remarked that in all the circumstances of the case, the public interest in maintaining exemption must be balanced against and outweigh the public interest in disclosing the information, and that each case would be decided on its own merits. The writer knows of no provisions referring to this balancing exercise, however it is generally recognised that the new exemption would allow Universities as Researchers to consider and validate their research work before putting it into the public domain.
Section 22A(2) is a new provision whereby the Authority (cf. the University) would not be obliged to ‘confirm or deny’ whether they hold exempt information, if by doing so this prejudices the above factors listed (i) to (iv) above.
When the writer comes across further elucidating commentary on the new section 22A Research exemption they will be posted further in this blog.
The link to the new Intellectual Property Act 2014 (adding the new section 22A to the Freedom of Information Act 2000) can be found at:
The Football World Cup as global drama seems, by dint of the sheer brilliance of the players, to have shaken off preoccupations about the beautiful game’s darker subplot – including the Qatari allegations of bribes and secret commissions. It is currently speculated that such payments, if proven could result in a re-run of the entire bidding process for the staging of the 2022 World Cup. The case of FHR Ventures LLP v Cedar Capital Partners (and Mr Mankarious) is more modest in remedial terms – the principal seeking to recover back the value received by the agent (the first measure of the agent’s enrichment), or the value surviving (the second measure of enrichment) or traceable in the hands of the agent or third parties (if a proprietary claim is for the first time recognised by the Supreme Court) in agency type cases.
Relevance of this bribery case to Universities:
All Government contracts contain provisions relating to the criminal law and the Bribery Act 2010, however any University would still have to fall back on the common law to seek the recovery of bribes and secret commissions in all their general contracts so this week’s appeal is highly relevant to our general contracting position and a useful reminder of the current state of the law.
The question before the UK Supreme Court this week does not perhaps include the category of corrupt payments in the form of a bribe, however it does include the remedial consequences of secret commissions, and bribes to agents, and whether the beneficiaries could seek recovery not merely as a personal claim but also upon a constructive trust, and allow recovery on a proprietary basis.
This is an age old problem – best illustrated by the nineteenth century case of Lister v Stubbs  45 Ch D 1 (the claim against an agent receiving a secret commission, the principal being confined to only a personal claim for value received by the agent) closing off any possibility of a proprietary claim by trust, constructive or otherwise. Lister was not followed in the later Privy Council decision (a bribe case involving a Government prosecuting official) in Hong Kong v Reid  1 AC 324.
The Supreme Court website has put the question on appeal as follows:
Does an agent who receives a secret commission hold the sum paid on constructive trust for his principal(s) giving rise to proprietary rights?
The applicants in the appeal are a company called Cedar Capital Partners (CCP/’Cedar’) who together with a Mr Mankarious entered into an agreement (an exclusive Brokerage Agreement) with the owners of a hotel in Monte Carlo, for Cedar to arrange for the sale of the hotel in exchange for a fee of €10m. Cedar subsequently acted as agent on behalf of the respondents in the appeal, who were a consortium who wished to purchase the hotel for €211.5m. The €10m fee was paid to Cedar in accordance with the Brokerage Agreement within 5 days of the owners of the hotel receiving the payment price for the hotel from the consortium. The €10m fee (paid by the vendor to the agent Cedar) was a payment unknown to the consortium (purchasers) on the facts.
When the consortium discovered the payment of the €10m to Cedar/Mr Mankarious, they sought recovery of the payment from Cedar/Mr Mankarious. They succeeded before Justice Simon in obtaining an account for the €10m, however the judge held that the claim was personal only (‘in personam’) and the money held by Mr Mankarious was not held on a proprietary basis, on a constructive trust or otherwise.
The Court of Appeal reversed this decision, and held that in receiving the secret commission, Cedar/Mr Mankarious had exploited an opportunity properly belonging to the consortium, and accordingly the €10m fee was to be held on a constructive trust, which was proprietary in nature, and therefore traceable as surviving enrichments in substitutions (eg. where the €10m was used to purchase property as a substitute for the original enrichment, or paid into or converted into property through other media such a bank account etc).
This proprietary quality in the enrichment is the subject of the appeal – a claim and legal right not previously recognised at the highest Court level in relation to agents receiving secret commissions or bribes.
The general concern has been to disallow a beneficiary principal gaining priority in an insolvency claim in the insolvent fraudster’s estate, but this legal policy might change next week.
There are seven Supreme Court Justices listed; and Lord Collins has been called back into the squad as an impact player for his understanding of Company law, insolvency and priority. It would be mixing metaphors to say he has come off the bench, in fact being called back ‘to’ the Bench!
Lord Collins appears to have been the first instance judge in Daraydan (etc) v Solland (etc)  EWHC 622, involving the recovery of bribes and secret commissions charged in the refurbishment of luxury properties in London and – er Qatar. In the event that the current law of Equity undergoes a change this week, in recognising that the receipt of a secret commission or a bribe has proprietary consequences and that beneficiaries could indeed engage in the process of tracing, identify and follow substitutions made in the property to its ultimate surviving value or indeed into the hands of a third party, it will arguably add to the armoury of the victims on the margins of bribery and fraud. So as in the World Cup, there is still ‘everything to play for.’
First Instance decision of Simon J:
Court of Appeal decision of Lewison LJ:
the decision of Lawrence Collins J in Daraydan (etc) v Solland (etc)  EWHC 622:
The University has a Contracts and Compliance officer, Chris Kenning. He provides internal legal support and expertise in the area of research and funding.
He looks into Research Contracts in the University sector, with growing interest in ensuring the distribution of academic research for the enhancement of learning and the protection of the University’s commercially exploitable academic and scientific knowledge to the benefit of the University and staff where applicable.
If you need further support: C.Kenning@staffs.ac.uk
Public Relations Consultants Association Ltd v Newspaper Licensing Authority and others
Newspaper Licensing Authority v Meltwater  UKSC 18
The Court of Justice of the European Union – Judgment made on 5 June 2014 – Temporary acts of (copyright) reproduction within section 28A of the Copyright Deigns and Patents Act 1988
This blog is an update from those previous, dealing with the above Meltwater Judgment of the UK Supreme Court (see links below). The facts can be found in the previous blogs on this subject; however it is clear that the decision is of great assistance to the consultant company (Meltwater) and its Association; the case will presumably be remitted back to the UK Court to finalise the issue of costs – what appears to be a substantial victory in terms of their accessing temporary copies of copyright works. In the writers’ view this appears to be a logical result in terms of the general functionality of the Internet, but the writer anticipates that ‘Paywalls’ and other secure access portals to copyright works, such as News media will perhaps proliferate to a greater extent. Readers will recall the gist of the UK Supreme Court decision, namely that viewing the Meltwater report(s) on the website appears to be covered by the ‘temporary copies’ exception within section 28A of the Copyright Designs and Patents Act 1988.
The reference to the Court of Justice of the European Union
It will also hopefully be recalled (from the previous blog) that Lord Sumption stated that the issue in the appeal has a ‘transnational dimension’ and that the application of copyright law to internet use has important implications for many millions of people across the EU making use of what has become a basic technical facility.’
The questions referred by the UK Supreme Court were as follows (see paragraph 20 of the CJEU judgment):
In circumstances where :
an end-user views a web-page without downloading, printing or otherwise setting out to make a copy of it ;
copies of that web-page are automatically made on screen and in the internet “cache” on the end-user’s hard disk;
the creation of those copies is indispensable to the technical processes involved in correct and efficient internet browsing;
the screen copy remains on screen until the end-user moves away from the relevant web-page, when it is automatically deleted by the normal operation of the computer;
the cached copy remains in the cache until it is overwritten by other material as the end-user views further web-pages, when it is automatically deleted by the normal operation of the computer;
and the copies are retained for no longer than the ordinary processes associated with internet use referred to at (iv) and (v) above continue;
Are such copies (i) temporary, (ii) transient or incidental and (iii) an integral and essential part of the technological process within the meaning of Article 5(1) of Directive 2001/29/EC1 ?
1 Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society
The European Court of Justice’ answer:
On those grounds the Court (Fourth Chamber hereby rules:
“Article 5 of Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related rights in the information society must be interpreted as meaning that the copies on the user’s computer screen and the copies in the internet ‘cache’ of that computer’s hard disk, made by an end-user in the course of viewing a website, satisfy the conditions that those copies must be temporary, that they must be transient or incidental in nature and that they must constitute an integral and essential part of a technological process, as well as the conditions laid down in Article 5(5) of that directive, and that they may therefore be made without the authorisation of the copyright holders.”
The following are important to note from the CJEU Judgment:
1. Paragraph 26: the on-screen and cached copies from a computer are ‘temporary in nature;
2. Paragraph 33: on-screen and cached copies are regarded as ‘an integral part of the technological process’ at issue in the main (ie.UK) proceedings
3. Paragraph 37: the on-screen copies and the cached copies are ‘an essential part of the technological process’ at issue in the UK proceedings;
4. Paragraph 46: the period during which the on-screen copies remain in existence is limited to what is necessary for the proper functioning of the technical process used for viewing websites. Consequently the copies must be regarded as ‘transient’.
5. Paragraph 54, 60 and 63: Art 5(5) of the Directive (cf. the exemption applying provided it ‘does not conflict with a normal exploitation of the work and…not unreasonably prejudice the legitimate interests of the rights holders’ was not breached and could therefore be made without authorisation from the copyright holders.
The CJEU judgment (5 June 2014) can be found at:
The Court of Appeal decision can be found at:
The decision at first instance, of Mrs Justice Proudman can be found at:
The UK Supreme Court Press Summary can be found at:
The UK Supreme Court decision (lead judgment by Lord Sumption) can be found at:
and on the Bailii Site at:
Please find attached the link to discussion document issued by the Commission in relation to the General MGA. The preliminary discussion document refers mainly to Finance and financial information. However, it is informative in relation to clarification of contractual terms, such as the Intellectual property clauses.
For Intellectual property the following are noteworthy, the 2008 Recommendations have been well and truly dusted off, and re-emphasised:
1. the Notes emphasise the obligation to take measures to implement the ‘Commission Recommendation’ on the management of intellectual property in knowledge transfer activities (see page 23 – Section 3: Rights and Obligations related to Background (IP) and Results). The recommendation principles were that member states are required: (i) to ensure that all public research organisations define Knowledge Transfer as a strategic mission and (ii) encourage public research organisations to establish in public policies and procedures for the management of intellectual property in line with the Code of Practice set out in Annex 1 (see link to the Commission Recommendations below).
the Link to the 2008 ‘Commission Recommendations on the Management of Intellectual Property in Knowledge Transfer Activities’
2. Article 26.4, is noteworthy (at page 179) whereby as ownership to protect Results, the Agency/Commission,
“may with the consent of the beneficiary concerned, assume ownership of results, ‘to protect them’, if a beneficiary intends up to four years after the period set out in Article 3 – to disseminate results…”
It will remain to be seen how this provision and its exceptions will operate, especially in light of the fact that Universities and commercial parties might not have had sufficient time to assess whether the IP could be commercially exploited – even after the period of 4 years following the contractual period set out in Article 3.
There are many useful Notes in the attached, including some curiosities (such as at Article 26.2, page 178). In relation to joint ownership of IP by reason of joint creation, which (in the view of the writer) begs more questions than it answers. It is arguable that the parties would separately agree ownership regardless of the manner of creation of the IP – an issue that will be further discussed in relation to Article 26.2 – the joint ownership agreements will require closer consideration.
3. At the top of page 180, there is the Note which reads: ‘Best Practice: To avoid or resolve ownership disputes, beneficiears are advised to keep documents such as laboratory notebooks to show how and when they produced the results’ Laboratory Notebooks have been the subject of a previous Blog, however the Notes cover other useful ‘Best Practice’ gems such as this.