IP Protection for all businesses – great and small

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:

Supreme Court decision in ‘FHR European Ventures v Cedar Capital Partners’ – bribes and secret commissions accepted by an agent (as a fiduciary) are held on trust for the principal – an important clarification

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:

Click to access UKSC_2013_0049_PressSummary.pdf

FHR European Ventures v Cedar Capital: Judgment

Click to access UKSC_2013_0049_Judgment.pdf

Intellectual Property Act 2014 section 22A: Freedom of information exemptions for Research

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:

Click to access ukpga_20140018_en.pdf

Proprietary rights in payment of bribes and secret commissions coming home? Perhaps this week.

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 [1890] 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 [1994] 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 facts
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) [2004] 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) [2004] EWHC 622:

Temporary copies (on-screen) and the cached copies: not requiring permission of the copyright holder? The European Court wades in ‘Meltwater’

Public Relations Consultants Association Ltd v Newspaper Licensing Authority and others
Newspaper Licensing Authority v Meltwater [2013] 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:

Click to access UKSC_2011_0202_PressSummary.pdf

The UK Supreme Court decision (lead judgment by Lord Sumption) can be found at:

Click to access UKSC_2011_0202_Judgment.pdf

and on the Bailii Site at:

Click to access 18.pdf

Costs in the Intellectual Property Enterprise Court: Considering conduct of the parties when assessing costs – Access to Justice?

Please find attached an interesting short article (following the previous Blog of 26 March 2014 herein) on the issue of costs in the recent case for making groundless threats of infringement of patent (contrary to section 70 of the Patents Act 1977), that was brought against Mr Perry.

Mr Perry apparently on 26 March 2014 circulated a letter purportedly written by ‘Mr Justice Hacon’; bizarrely reversing the decision in the proceedings. What happens in relation to costs in the light of this and other ‘intemperate’conduct as classified by the Judge?

One of the reasons the IPEC has been celebrated as a great success in terms of Access to Justice for Intellectual Property litigants, small businesses and individuals alike, is that win, lose or draw, the costs cap is set at £50,000.00. The IPEC has been a successful model Court because of the constraint put on costs – can a party’s conduct lead to release of such constraint?

The Judge indicated that the circulation of the purported letter by Mr Perry was a further example of ‘intemperate and eccentric behaviour’ (paragraph 14) in the conduct of of those proceedings; however it is difficult (in the view of the writer) to discern when the conduct of a party becomes ‘truly exceptional’ having regard to the conduct of the parties when assessing costs. Judge Hacon’s decision, notably paragraphs 10 to 17 (under the heading ‘Departure from the costs cap and scale of costs’) explains why in this case the total award of costs against Mr Perry was not granted above the cap of £50,000.00.

Further Judgment of Judge Hacon of the Intellectual Property Enterprise Court (IPEC) dated 2 April 2014


IPKat Blog discussing the above costs decision:


Valuing Consultancy Services: Benedetti v Sawaris revisited

This short note of the appeal in Benedetti, is an attempt to summarise parts of the decision from the extraordinarily learned judgment of Lord Reed, and Lords Clarke and Neuberger, which emphasise the following:

Where ‘Services’ are provided without agreement – regard should be had to Objective market value or market price, at the time of the provision of the service – the value to the recipient of the services is assessed on an objective basis, i.e. the price which a reasonable person in the position of the Defendant would have paid for the Services.

The arguments of the Appellant included whether it should be the value the parties put on the services? Including the late offers by the Defendants, the answer was a decisive no, as Lord Clarke emphasised below:

Lord Clarke at paragraph 30:

‘In the present case it is accepted that Mr Benedetti’s services had an objective value. The issue is whether subjective revaluation can be relied upon, not in order to identify a benefit, but in order to value the benefit so conferred. In my opinion, that is not permissible. Although there is some academic support for such a solution, there is no authority for the proposition that, in cases where a benefit has an objective market value, the Claimant should be entitled to invoke the Defendant’s subject willingness to pay a higher sum for the benefit as reason for valuing the benefit at a higher rate.’

Market value depends critically upon the identification of the relevant market and it is ‘specific to a given place at a given time’. As Lord Reed illustrated using the episode in Vanity Fair – Becky Sharp employing the panic of the British community in Brussels, selling horses prior to rumour of an impending attack by Napoleon (per Lord Reed paragraph 105); Becky obtained a price far in excess of ordinary value. Identification of the market you are in, is perhaps a little paradoxically, an important element in identifying ‘objective’ market value.

Save in exceptional circumstances, the principle of ‘subjective revaluation’ was not recognised; either for identifying a benefit, or for valuing a benefit received. Mr Sawaris made a late offer (i.e. after provision of Services by Mr Benedetti) of €75.1m to Mr Benedetti who he valued highly and wanted to be ‘generous’ to. This late offer, in the absence of contractual agreement, was not to be the high water mark for the enrichment – in addition to the €67 million Mr Benedetti already received for consultancy services.

What lessons can be learnt from the great case of Benedetti?

‘Value’ of consultancy should be governed by an agreement of the parties, by contract, otherwise the Court will have to determine market value – and strive for a measure of objective value. ‘Contract is King’ in all likelihood as Mr Howard, Counsel for Mr Benedetti said in discussion; but if you want to agree value for Services, agree a price.
There was a distinct theme that the Consultant in the case eluded all labels by which a measure for consultancy services could be fixed – was he an investment banker? No. A broker? No, probably not, too limited as a definition. A promoter? Too vague as a definition. This made it (in my view) all too easy for the Defendants to corral the Claimant into a (rough and ready) market rate and reduce the enrichment gained by Mr Sawaris to zero. The Supreme Court upheld judge’s conclusion as to ‘valuation by brokerage’; in the sum of €36.3m. (0.1 to 0.3% of the transaction value). In which case, in light of the fact that Mr Benedetti had already received €67m, he had already achieved, a quantum meruit, ‘as much as he deserved’.

The case (and the judgment of Lord Reed) can be found at:

Click to access UKSC_2011_0087_Judgment.pdf

The helpful Supreme Court Press Summary of the case can be found at:

Click to access UKSC_2011_0087_PressSummary.pdf

Coventry v Lawrence: Nuisance and planning permission in the UK Supreme Court: from the Court of Appeal

There are recognised causes of action beyond the contractual, (or asserting rights in property) which in the University sector it is easy to become preoccupied with. This week in the UK Supreme Court, on appeal from the Court of Appeal, is a case involving the tort of nuisance, tied up in a planning permission. Coventry v Lawrence involves nuisance created from motor sports, and the issue whether the grant of planning permission sanctions any nuisances flowing from the permitted activity.

As every student of the law knows, In Miller v Jackson [1977] QB 966 (nuisance created by the sport of Cricket) Lord Denning MR began his judgment in classic style: ‘In Summertime, village Cricket is the delight of everyone.’ Doubtless Miller v Jackson is a case of its time, but Lord Denning’s judgment is a good frame of mind to begin any query into the law of ‘nuisance’.

The Court of Appeal decision in Coventry v Lawrence is attached. The Supreme Court appeal hearings run today and tomorrow.

Miller v Jackson, and the Court of Appeal decision in Coventry v Lawrence are available from the links below:



Trade Mark infringement and Confusion of Brands: Universities and Massive Open Online Courses (MOOCs)

Please find attached a link to the case, and a Case Note in relation to the Brand confusion case (Regent University v Regent’s University London). This was an interim proceeding between a US and private UK University, heard recently in the Intellectual Property and Enterprise Court.

CK2609Regent UniversityvRegentsUniversityLonBlog


Contract Reviews: Factsheet outlining the Contract Review Service

Flowchart – Contracting Process 020913

CK0909Contract Review Fact Sheetpdf

Please find attached a short Contract Review Fact Sheet and Flow Diagram, setting out the essential elements of the Contract Review Service provided by Enterprise and Commercial Development. Further information will be provided in future blogs about other aspects of the Contract Review Service.