Economic Prosperity Deal with the USA

Author Carol M. Highsmith Licence: Public Domain Source Wikimedia Commons 

 

Jane Lambert

One of the arguments in favour of Brexit before the 2016 referendum was that it would enable the UK to join the North American Free Trade Agreement ("NAFTA") or some other free trade agreement with the USA.  Donald Trump terminated NAFTA in his first presidency but he replaced it with the United States-Mexico-Canada Agreement ("USMCA").  He has now finished USMCA by imposing punitive tariffs on Canadian and Mexican imports and talking about annexing Canada.

Negotiations between HMG and the US government on a possible trade deal started during Mr Trump in his first term and continued during the Biden administration.  On 8 May 2025, the two governments announced the General Terms for the US and UK economic prosperity deal.  This is not a comprehensive free trade agreement.   The document is only 5 pages long and covers tariffs, non-tariff barriers, digital trade, alignment and collaboration on economic security, commercial considerations and opportunities and other matters.  There is no provision for dispute resolution, and the only mention of intellectual property is confirmation in para 6 that both governments intend to discuss high-standard commitments related to intellectual property rights protection and enforcement.

An update was published by Mr Trump and Sir Kier Starmer on progress towards the implementation of the agreement on the first day of the G7 summit on 16 Jun 2025.   I will monitor and report on progress in this publication.

Anyone wishing to discuss this article may call me during office hours on +44 (0)20 7404 5252 or send me a message through my contact form.

IP Provisions of the UK's Free Trade Agreement with India

Science City, Kolkata

Author: Biswarup Ganguly Licence CC BY-SA 3.0  Source Wikimedia Commons

 

Jane Lambert

By a press release dated 6 May 2025, the Department for Business and Trade announced that the United Kingdom had concluded a trade deal with India.  According to Dominic Webb's UK India Free Trade Agreement, a research briefing for the House of Commons Library dated 9 May 2025, no details are available, but the deal seems to consist of a free trade agreement and a double contributions convention.  The research paper refers to UK and India clinch trade deal after three years of talks in Politico, which states that negotiations for a bilateral investment treaty are continuing.

The Free Trade Agreement

The Department for Business and Trade published a chapter summary on the issues that had been agreed in its policy paper, UK-India trade deal: conclusion summary, on 15 April 2025.  Work is continuing on the legal text and the resolution of a few remaining issues. Once the text has been finalized, it will be checked by both sides' lawyers.  Domestic approval will then be sought in each country.  Once that has been obtained, the agreement can be signed, after which it will enter into force.

The agreement will cover anti-corruption, the temporary movement of natural persons, competition and consumer protection, customs and trade facilitation, trade and development cooperation, digital trade, the environment, financial services, goods market access, good regulatory practice, government procurement, innovation, intellectual property, labour, professional business services, rules of origin, remedies, sanitary and phytosanitary, small and medium enterprises, state owned enterprises, subsidies, technical barriers to trade, telecommunications, trade and gender equality and trade in services.  

Intellectual Property

According to para 4.15 of the policy paper, the IP chapter will support the British and Indian economies "through effective and balanced protection of IP rights.  It will cover copyright and related rights, designs, trade marks, geographical indications, patents, and trade secrets, as well as the enforcement of IP rights, and ongoing cooperation in relation to IP matters.  The chapter will secure improvements to patent procedures in India to reduce the administrative burden, speed up processes, and lock in commitments that provide for transparency and legal certainty in the patent system.  India will commit to engaging on aspects of copyright and related rights, including public performances, artists' resale rights and the copyright terms of protection.  UK food and other suppliers will be able to seek protection for all geographical indications and not just wines and spirits in India. Nothing in the outline agreement will commit the UK to domestic legislative change, undermine the UK’s IP system or its international positions on IP.  There is likely to be a degree of overlap between IP and some of the other agreed issues, such as competition and consumer protection, digital trade, financial services, innovation, small and medium enterprises, technical barriers to trade and telecommunications. 

Existing IP Protection in India

According to the WIPO, India ranked 39 among the 133 countries in the global innovation index in 2024.  The main IP statutes appear to be The Copyright Act, 1957, The Designs Act, 2000, The Geographical Indications of Goods (Registration and Protection) Act, 1999, The Patents Act, 1970, The Protection of Plant Varieties and Farmers' Rights Act, 2001, The Semiconductor Integrated Circuits Layout-Design Act, 2000 and The Trade Marks Act, 1999,  India is party to the main intellectual property treaties including Paris, Berne and Rome Conventions, the Patent Cooperation Treaty and the Madrid Protocol (see WIPO-Administered Treaties, Contracting Parties/Signatories India).

Comment

This is the UK's 4th new trade agreement since it left the European Union and potentially the most important.   I shall return to the topic as more information becomes available.  Anyone wishing to discuss this topic may call me on +44 (0)20 7404 5252 during normal UK business hours or send me a message through my contact form at any time.

EU's Exhaustion of Rights Doctrine to Remain in Force in UK

Standard YouTube Licence

Jane Lambert

Shortly before the UK-EU Summit on 19 May 2025, the Intellectual Property Office announced that the doctrine of exhaustion of rights will continue to apply to the UK even though the UK has left the European Union and notwithstanding that the doctrine will not apply in the opposite direction (see IPO press release Certainty for businesses and choice for consumers as UK maintains IP rights regime 15 May 2025).  In view of the furore over the so-called reset of relations between the UK and EU with threats from the Leader of the Opposition and Reform UK to reverse the deal it is surprising that the IPO's announcement has received so little attention in the press (see Badenoch vows to reverse Starmer's EU Deal The Telegraph 19 May 2022).

Exhaustion of Rights

The doctrine of exhaustion of rights was developed by the Court of Justice of the European Union to reconcile the tensions between arts 30 and 34 of the Treaty on the Functioning of the European Union.  Art 30 provides:

"Customs duties on imports and exports and charges having equivalent effect shall be prohibited between Member States. This prohibition shall also apply to customs duties of a fiscal nature."

Arts 34 and 35 supplement art 30 by prohibiting restrictions on imports and exports.  However, art 36 allows some exceptions:

"The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions on imports, exports or goods in transit justified on grounds of public morality, public policy or public security; the protection of health and life of humans, animals or plants; the protection of national treasures possessing artistic, historic or archaeological value; or the protection of industrial and commercial property. Such prohibitions or restrictions shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States."

In Case 16/74 Centrafarm v Winthrop [1974] ECR 1183, the Court said:

"[7] Inasmuch as it provides an exception to one of the fundamental principles of the common market, Article 36 in fact only admits of derogations from the free movement of goods where such derogations are justified for the purpose of safeguarding rights which constitute the specific subject-matter of this property.
[8] In relation to trade marks, the specific subject-matter of the industrial property is the guarantee that the owner of the trade mark has the exclusive right to use that trade mark, for the purpose of putting products protected by the trade mark into circulation for the first time, and is therefore intended to protect him against competitors wishing to take advantage of the status and reputation of the trade mark by selling products illegally bearing that trade mark.
[9] An obstacle to the free movement of goods may arise out of the existence, within a national legislation concerning industrial and commercial property, of provisions laying down that a trade mark owner' s right is not exhausted when the product protected by the trade mark is marketed in another Member State, with the result that the trade mark owner can [oppose] importation of the product into his own Member State when it has been marketed in another Member State.
[10] Such an obstacle is not justified when the product has been put onto the market in a legal manner in the Member State from which it has been imported, by the trade mark owner himself or with his consent, so that there can be no question of abuse or infringement of the trade mark.
[11] In fact, if a trade mark owner could prevent the import of protected products marketed by him or with his consent in another Member State, he would be able to partition off national markets and thereby restrict trade between Member States, in a situation where no such restriction was necessary to guarantee the essence of the exclusive right flowing from the trade mark."

In Case C-9/93 IHT Internationale Heiztechnik GmbH and Uwe Danzinger v Ideal-Standard GmbH and Wabco Standard GmbH. (Free movement of goods) [1994] ECR I-2789, [1994] EUECJ C-9/93, the Court explained the principle of exhaustion of rights at para [34]:

"So, application of a national law which would give the trade-mark owner in the importing State the right to oppose the marketing of products which have been put into circulation in the exporting State by him or with his consent is precluded as contrary to Articles 30 and 36. This principle, known as the exhaustion of rights, applies where the owner of the trade mark in the importing State and the owner of the trade mark in the exporting State are the same or where, even if they are separate persons, they are economically linked. A number of situations are covered: products put into circulation by the same undertaking, by a licensee, by a parent company, by a subsidiary of the same group, or by an exclusive distributor."

 Brexit

Although art 61 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community provided that intellectual property rights which were exhausted both in the EU and in the UK before the end of the transition period under the conditions provided for by EU law should remain exhausted both in the EU and in the UK, the doctrine ceased to apply to the UK after the end of that period.   The IPO published guidance entitled 
Exhaustion of IP rights and parallel trade on 30 Jan 2020.

Consultation

In a Consultation document on the UK’s future regime for exhaustion of IP rights, first published on 7 June 2021 and subsequently updated, the IPO noted:

"The concept of exhaustion has built up over many decades. When the UK was part of the EU, the UK was part of the EU’s regional exhaustion regime. The principle of exhaustion of rights is derived from the provisions concerning the prohibition of qualitative restrictions in the Treaty on the Functioning of the EU (and the EEA Agreement) as interpreted by EU case law and was specifically recognised in various EU Directives as implemented into domestic legislation. As a result of domestic legislation concerning EU exit this principle continues to have the same effect in domestic law as it had before the end of the implementation period (the UK’s unilateral application of the EEA regional regime). In particular, the principle of exhaustion is relevant to section 7A of the Registered Designs Act 1949, sections 18 and 27 of the Copyright, Designs and Patents Act 1988 and section 12 of the Trade Marks Act 1994."

Between 7 June and 31 Aug 2021, the IPO consulted on the following options:

• UK’s unilateral application of a regional EEA regime, otherwise known as a “UK+” regime:  Inbound parallel import of goods only automatically permitted from EEA countries (assuming there is separate authorisation for regulated goods such as medicines);
• National: Inbound parallel import of goods not automatically permitted from any country; 
• International: Inbound parallel import of goods automatically permitted from any country (assuming there is separate authorisation for regulated goods such as medicines); and 
• Mixed: Ability to parallel import will depend on any decision on treatment for a specific IP right, good or sector.

None of those options provided for parallel export of goods except to countries with an international regime.   The consultation document explored each of those options.   A response form asked consultees for their views.

Response 

According to para 45 of the Government response to the consultation on the UK’s future exhaustion of intellectual property rights regime. HMG received 150 responses:  120 from businesses and organizations, 17 from individuals and 13 from respondents who failed to state whether they were businesses, organizations or individuals.   A list of the corporate respondents can be found in the Government Response at para 46.  The responses are summarized in UK’s future exhaustion of intellectual property rights regime: Summary of responses to the consultation.

Outcome

According to the IPO's press release, HMG has opted for UK+.   This will not require new legislation. The Intellectual Property (Exhaustion of Rights) (Amendment) Regulations 2023 SI 2023 No 1287 will continue to apply.

Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during normal office hours or send me a message through my contact page at any time.

British Courts' Jurisdiction in Actions Concerning EU Trade Marks

Jane Lambert

 

An issue in SkyKick UK Ltd and another v Sky Ltd and others (Rev1) [2024] UKSC 36 (13 Nov 2024) was whether the  UK courts retained their jurisdiction to determine pending proceedings involving EU trade marks after 31 Dec 2020 when EU law ceased to apply to the UK.  I mentioned the issue in The Supreme Court's Judgment in SkyKick v Sky in NIPC Law on 19 Jan 2924 but did not discuss it in detail because it was secondary to whether a registration could be invalidated on the ground that the application to register the mark had been made in bad faith because the applicant did not have a genuine intention to use the mark in relation to some or all of the specified goods or services.  I am returning to the jurisdiction issue here because Lord Kitchin devoted 91 paragraphs of his judgment and an appendix to the topic and Lord Reed, the President of the Supreme Court, added a further 38. 

European Union Trade Mark Courts

Art 123 (1) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (codification) (Text with EEA relevance) OJ L 154, 16.6.2017, p. 1–99 ("the EU Trade Mark Regulation") required EU member states to designate in their territories as limited a number as possible of national courts and tribunals of first and second instance to perform the functions assigned to them by that Regulation.  Pursuant to reg 9 of the Community Trade Mark Regulations 1996 (SI 1996 No 1908) as amended by reg 3 of The Community Trade Mark (Designation of Community Trade Mark Courts) Regulations 2005 (SI 2005 No 440) the High Court and Court of Appeal were designated Community trade mark courts and later renamed EU trade mark courts in the UK. Art 124 of the EU Trade Mark Regulation conferred exclusive jurisdiction on those courts for infringement and declarations of non-infringement claims and counterclaims for revocation and declarations of invalidity. 

Art 50 of the Treaty of European Union

Art 50 (2) of the Treaty on European Union required the EU to negotiate and conclude an agreement with a member state that had notified its intention of withdrawing setting out the arrangements for its withdrawal.  Art 50 (3) of the Treaty further provided that the Treaties would cease to apply to the state in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification, unless the European Council, in agreement with the member state concerned, unanimously decided to extend that period.

The Withdrawal Agreement

An Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community was concluded by the European Union and the British government.   Art 126 of the Agreement provided for a transition or implementation period, that started on 31 Jan 2020 and ended on 31 Dec 2020.  During that transition period EU law continued to apply to the UK pursuant to art 127 (1). 

The Procedural History

As I noted in The Supreme Court's Judgment in SkyKick v Sky  Sky Ltd., Sky International AG and Sky UK Ltd ("the Sky companies") issued proceedings against SkyKick UK Ltd and SkyKick Inc ("the SkyKick companies") for trade mark infringement and passing off before the 2016 referendum.  The trial before Mr Justice Arnold and the reference to the Court of Justice of the European Union took place while the UK was still a member of the EU.  The further proceedings before Lord Justice Arnold took place during the transition or implementation period.  However, the appeal to the Court of Appeal took place after the end of that period.   Even though they had gained ground in the Court of Appeal where the same or similar issues would have arisen, the Sky companies contended that the Supreme Court lost its jurisdiction to deal with EU trade marks after the end of the implementation period.

The EasyGroup Actions

The issue had been considered by the Chancellor, Sir Julian Flaux, in EasyGroup Ltd v Beauty Perfectionists Ltd [2021] EWHC 3385 (Ch); [2022] Bus LR 146; [2022] FSR 8 and by Mrs Justice Bacon in EasyGroup Ltd v Nuclei Ltd [2022] EWHC 901 (Ch); [2022] FSR 23.  In the first of those actions, the defendants applied to strike out those parts of the claimant's claims that sought an injunction and other remedies outside the United Kingdom, on the basis that even though the present proceedings were pending as of 31 Dec 2020 (the date when the UK left the European Union) the High Court no longer had jurisdiction to grant a pan-EU injunction or other remedies in respect of alleged infringement of EUTMs. The Chancellor concluded that he retained jurisdiction to grant pan-European injunctions and dismissed the application.   In para [91] of her judgment in the second action, the parties agreed that Mrs Justice Bacon should proceed on the basis that the court retained the same jurisdiction to deal with both infringement and validity of the EU marks as it had before 31 Dec 2020.  They reached that decision after considering the Chancellor's judgment.  The Sky companies argued that those cases were wrongly decided.

Sky's Contentions

Lord Kitchin noted in para [454] of his judgment that the Sky companies had submitted that, at the end of the transition period all EU trade mark rights in and relating to the UK were extinguished.  Jurisdiction over infringement and validity of EU trade marks now lay exclusively with EU trade mark courts in the remaining EU member states.  Neither the UK nor the EU had legislated for any EU court or tribunal to exercise any jurisdiction over or relating to any comparable UK trade mark that had been issued to EU trade mark owners after their EU trade marks ceased to apply to the UK, or for any court in the UK to exercise any jurisdiction over, or relating to, any EU trade mark in the territories of the remaining member states. Secondly, the Sky companies contended that as of 31 Dec 2020, no courts in the UK were in fact designated as EU trade mark courts to resolve the limited number of cases which were pending before those courts on that day.  Thirdly, the Sky companies submitted that reg 6 and Sched 5 to the Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019 No 269) effectively repealed the legislation designating UK courts as EU Trade Mark Courts.

Judgment

Lord Kitchin rejected the Sky companies' submissions on the grounds that they did not take account of the provisions of the withdrawal agreement.   Art 67 (1) provides:

"In the United Kingdom, as well as in the Member States in situations involving the United Kingdom, in respect of legal proceedings instituted before the end of the transition period and in respect of proceedings or actions that are related to such legal proceedings pursuant to Articles 29, 30 and 31 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council, Article 19 of Regulation (EC) No 2201/2003 or Articles 12 and 13 of Council Regulation (EC) No 4/2009, the following acts or provisions shall apply:
.........
(b)   the provisions regarding jurisdiction of Regulation (EU) 2017/1001......"

Lord Kitchin interpreted those words as follows in para [436]: 

"(a) the provisions of the EUTM Regulation "regarding jurisdiction"
(b) 'shall apply'
(c) 'in the United Kingdom, as well as in Member States in situations involving the United Kingdom,
(d) 'in respect of legal proceedings instituted before the end of the transition period'."

This was consistent with the guidance of both the EU and UK Intellectual Property Offices which he referred to between paras [441] and [448]. 

Lord Reed reached the same conclusion as Lord Kitchin for much the same reasons.

Further Information

Anyone wishing to discuss this article may call me on 020 7404 5252 during normal office hours or message me through my contact form at other times.

UK Joins the CPTPP

Author L.Tak Licence CC BY-SA 4.0 Source Wikimedia Commons

 

Jane Lambert

On Sunday 15 Dec 2024, the United Kingdom became the 12th member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership ("the CPTPP").  The others are Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.  According to a press release from The Rt Hon Jonathan Reynolds MP and the Department for Business and Trade dated 15 Dec 2024, the combined GDP of those member states amounts to £12 trillion.  HMG states that British membership "creates opportunities for businesses, potentially boosting the economy by £2 billion a year in the long run."

I first mentioned the application to join the CPTPP in my Brexit Briefing for June 2020 on 4 July 2020 and followed the negotiations on the CPTPP page of this website. In Change of Focus, I wrote on 23 Sept 2021, I wrote:

"While bilateral treaties such as the Comprehensive Economic Partnership Agreement with Japan and the proposed Australia-UK Free Trade Agreement contain provisions on intellectual property, it is unlikely that any of them will require amending legislation. What might are the intellectual property provisions of the Trans-Pacific Partnership which are incorporated by reference into the Comprehensive and Progressive Agreement for the Trans-Pacific Partnership and Chapter 20 of the Agreement between the United States of America, the United Mexican States, and Canada, the successor to the North American Free Trade Agreement."

I also noted in British Intellectual Asset Owners' Rights after Brexit: IP Provisions of Bilateral Investment Treaties and Free Trade Agreements on 17 Aug 2020 that

"The Comprehensive and Progressive Agreement for Trans-Pacific Partnership contains provisions against expropriation of investments and dispute resolution provisions that are similar to those found in the bilateral investment treaties that the British government has negotiated with a number of countries. Such provisions entitle individual investors to seek compensation from a national government for the expropriation of their investment which could possibly include the revocation of patents or the loss of an opportunity to market products by reference to a trade mark because of a public health concern. Any free trade agreement that is likely to be negotiated with Australia, Japan, New Zealand and the USA can be expected to contain similar provisions."

The full text of the Agreement can be found on the website of the New Zealand Ministry of Foreign Affairs and Trade. The provisions on intellectual property are in Chapter 18.  Those on dispute settlement are in Chapter 28.  Those on investor protection against expropriation are in Chapter 9. I shall return to this topic as and when issues relating to our membership arise.  Two potential developments are the applications for membership by China and Ukraine.

Anyone wishing to discuss this article may call me during UK office hours on +44 (0)20 7404 5252 or send me a message through my contact form.

Estonia

Tallinn Old Town

(c) 2024 Jane Lambert: all rights reserved

 

Jane Lambert

Last week I visited Estonia and was immediately reminded of Wales.  It is another small country on the Western seaboard of the landmass of which it forms part.  It has a larger territory but a much smaller population than Wales.  Although almost everyone speaks fluent English and many Estonians also speak Russian, the country has its own euphonic language the use of which was discouraged for much of its history   Like Wales, Estonia has a strong choral tradition.  The events by which Estonia regained  its independence are called "the Singing Revolution." 

Estonia has been very successful in establishing and growing new businesses. Examples of Estonian companies that have become household names are Skype, Bolt and Starship Technologies.  Although I had come to Estonia primarily to watch ballet I was also on the lookout for pointers to Estonia's success.  In this article, I have gathered information and pointed to resources that might be of use to UK entrepreneurs.  I will leave it to readers to consider whether Estonia has any lessons for the UK or for any of its nations and regions.

Many of Estonia's new businesses are in such activities as software development, fintech, electronics and robotics.   Those activities require a highly developed digital infrastructure.  In an article for Wired dated 28 Oct 2016, Matt Reynolds described Estonia as "the world's most digitally advanced society." It launched the first 5G mobile network in 2020 and offers very fast broadband to homes and businesses throughout the country.  Those activities also require a highly educated workforce and perhaps another reason for Estonia's success is that it scores high marks consistently in the OECD's PISA (Programme for International Student Assessment) (see PISA 2022 results: Estonia’s education is the best in Europe  Invesr Estonia.  

Estonia is party to the European Patent Convention and has its own Patents Act which was enacted in 1994.  It is also party to the Paris Convention, Patent Cooperation Treaty, the Patent Law Treaty and TRIPs.  Estonia also protects inventions as unitiltu models under the Utilities Models Act 1994.  Other intellectual property statutes to be noted are the Trade Marks Act 2002, the Industrial Design Protection Act 1997, the Layout-Designs of Integrated Circuits Protection Act 1998 and the Copyright Act 1992 which also protects rights in performances and database rights,  Estonia has acceded to the Berne and Rome Conventions, the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty.  Geographical indications are protected by Regulation 2019/787 and Regulation 2024/1143.

The Estonian Patent Office at Tatari 39 in Tallinn keeps comprehensive databases of inventions, trade marks, industrial designs and geographical indications.  It also keeps a list of patent attorneys.  A service that sounds as though it would be very useful to startup founders and other small business owners is pro bono advice on patent and utility model applications by patent examiners between 15:00 and 17:00 on Tuesdays (see "Free Consultations" on the Patent Office website. 

Precedents for establishing, investing in and advising new businesses are available from the Startup Estonia page.  These include agreements for assigning and licensing intellectual property rights which I have reviewed and believe to be sound.   Non-residents of Estonia who want to incorporate and run a company in that country remotely can apply for a status called e-residency,  Successful applicants receive a digital identity which enables them to access many government and private services that would otherwise be reserved for Estonian nationals and permanent residents.

Estonia is a civil law country.  The court system is divided into civil and administrative law branches.  Civil courts determine commercial disputes in accordance with The Estonian Commercial Code.  The County Court is the court of first instance for all matters including intellectual property disputes.  According to Taylor/Wessing's Patent Map Estonia does not have a specialist patents court though, as I mention below, there is at least one County Court judge with patents expertise.  Typical costs of a patent trial where infringement and validity are an issue are €25,000 to €45,000,  Appeal lies to the Circuit Courts and ultimately the Supreme Court which is also a court of cassation.

Estonia has ratified the Unified Patent Court Agreement and has adapted the unitary patent (see the UPC Member States Map on the Unified Patent Court website).   Estonia falls within the Nordic-Baltic Regional Division of the Court of First Instance which also includes Sweden, Latvia and Lithuania.  Kai Härmand who is also a member of the Estonian judiciary sits in that Regional Division.  One of the hearing centres of the Nordic-Baltic Regional Division is in Tallinn at Lubja 4.

As far as I could judge prices in Estonia seem to be about the same as in the United Kingdom although hotels and restaurants in the old town can be expensive.  A good tip from a dancer friend is to eat in the food court of the Solaris shopping centre which is just across the road from the Estonian National Opera House.  That is where the locals eat.   I bought a very nourishing meal of chicken, chips and sparkling mineral water at The Lido for €6.80  before watching my friend dance in Cinderella.   I would never get away with that in Covent Garden.

Anyone wishing to discuss this article should call me on 020 7404 5252 during office hours or send me a message through my contact page.

Innovation & Patents In the United Kingdom

United Nations Offices in Geneva

Author Tom Page Licence CC BY 2.0 Source Wikimedia Commons

Jane Lambert

The Chartered Institute of Patent Attorneys has recently published a 10-page paper entitled Innovation & Patents In the United Kingdom.  In it, the Institute notes that British businesses are falling behind their European competitors in the international patent protection of their technology and proposes a number of remedies including supporting the Society for Chemical Industry's proposal for a Science and Innovation Growth Council to "ensure science industrialisation is at the heart of government policy."

As I said in my opening remarks to the attendees of the Cambridge IP Law Summer School at the start of the session on patents on 13 Aug 2024, a patent confers a monopoly which automatically excludes competing products or processes from the market of the country for which it is granted for so long as the patent remains in force.  It follows that the patent confers a competitive advantage upon the patentee.  Of course, patents have to be obtained for a purpose.  There is no point in acquiring them for their own sake.  But where they implement a business's objective they are a good thing.

I have always regarded it as concerning that European patent applications from the UK have consistently trailed not just the USA and Japan or even countries of approximately the same size such as Germany and France but also the Netherlands with a third of this country's population or Switzerland with one eighth.  As long ago as 10 Sept 2008 I drew up the following table which I inserted in the first blog post of NIPC Yorkshire:

European Patent Applications since 2002

Country	2007	2006	2005	2004	2003	2002
USA	35 588	34 794	32 738	32 625	31 863	30 118
Germany	25 176	24 806	23 789	23 044	22 701	21 039
Japan	22 887	22144	21 461	20 584	18 534	15 912
France	8 328	8 051	8 034	8 079	7 431	6 853
Netherlands	6 999	7 360	7 799	6 974	6 459	5 054
Switzerland	5 855	5 503	5 027	4 663	4 180	3 882
UK	4 979	4 722	4 649	4 791	4 843	4 709
South Korea	4 934	4 595	3 853	2 871	2 075	1 408

(Source Jane Lambert (c) 2008 compiled from annual "Facts and Figures" published by the European Patent Office)

In my article, I wrote:

"The reason for our lacklustre performance is that start-ups and other small businesses, that are the mainspring of innovation in the UK as in most of our competitors, make much less use of the intellectual property system than their equivalents in other countries and, indeed, much less use than multinational enterprises and other big businesses here."

The CIPA seems to have arrived at a similar conclusion because the last section of their paper is headed "Support for Innovative SMEs".

I diagnosed the problem as follows:

"There are two reasons why small businesses eschew the intellectual property system. One is that the cost of obtaining and enforcing legal protection for investment in brands, design, technology and the creative works is prohibitive and the other is that the intellectual property services available to small businesses, particularly outside London, is patchy in quality and, when compared to the unit costs that major companies pay, relatively expensive.
As for cost, research commissioned by the European Patent Office reported that it costs over €32,000 to obtain and maintain a typical, European patent on 6 countries over 10 years. But those costs pale into insignificance when compared to the cost of enforcement, particularly in the UK. According to the British government's own (but now disbanded) Intellectual Property Advisory Committee, it can cost over £1 million for an infringement action in the Patents Court and even £150,000 to £250,000 for the Patents County Court compared to no more than €50,000 in France, Germany and the Netherlands (see the table at page 50 of IPAC "The Enforcement of Patent Rights" published on 18 Nov 2003). The other big difference between big and small companies is that the latter know how the IP system works. They have day to day experience of the legal protection that is available in each jurisdiction, which innovation is worth protecting and which is not, the optimum protection for each innovation in each market, which lawyer, patent or trade mark attorney is good for a particular type of work and so on. They can use their considerable purchasing power to secure the services of the best professionals on advantageous terms. By contrast, inventors and small business people resort to the lawyers who drew up their lease and drafted their T & C and employment contracts who are as often as not on an expensive learning curve and who are forced to pass on their cost of learning or perhaps purchasing the expertise of the London patent bar on to their hard pressed clients."

 Despite the Arnold reforms and the shorter trials scheme TaylorWessing's Patent Map indicates that England and Wales is still the most expensive jurisdiction in Europe to bring or defend an intellectual property infringement action.

Sixteen years ago I wrote that there may not be much one can do about the imbalance of resources between big and small companies but there is a lot that can be done about the learning curve.   My solution was to educate SMEs.   I wrote:

"Inverting the famous conversation between F Scott Fitzgerald and Ernest Hemingway, SMEs are different from other IP users. They have much less money and the little they have has to be husbanded widely. Wise husbandry requires very special skills and those skills are not easy to identify."

To pass on those skills I set up IP Yorkshire on Linkedin which continues to this day:

"To assist businesses to identify high quality advisors NIPC has established a panel of trusted professional advisors who possess those skills and share our mission of bringing high quality professional services within reach of those who need them most but can often afford them least. They include patent and trade mark agents like Janet Bray, Carin Burchell and Barbara Cookson, specialist IP solicitors like Kate Reid of Pemberton Reid and James Love, company and commercial experts like Jane Sachedina and Umberto Vietri and experts in many other fields such as Richard Hall in product design and development, Gareth Morgan in marketing, forensic accountant, Michael Swift and many, many, more. These are some of the experts to whom we refer clients when we are asked to recommend solicitors, patent agents or other professionals. We do that safe in the knowledge that each of those professionals knows his or her job, each of them cares about our clients just as much as we do and each of them will give our clients that professional's best deal."

The CIPA has also concluded that the answer lies in education and they offer to provide it:

"We think that CIPA can bridge this gap because it is our members that are providing the support to practically every British SME that is developing and patenting technology. We want to use our experience of SME technology development and commercialisation to help the government develop innovation policy. We think that our knowledge of the real challenges faced by SMEs commercialising technology can inform practical solutions."

Attorneys are certainly part of the solution but they are not enough by themselves.   They need the skills. experience and knowledge of other professionals such as the group I corralled in this county.   

The only part of the report that I cannot understand is the call for a Science and Innovation Growth Council.  Its functions are not explained and I fear that it would easily degenerate into a quango.  Of course, it has been proposed by the Society of Chemical Industry which is a powerful industrial body and a useful ally. 

I welcome, commend and support the CIPA's initiative though I would take its proposals further.   Anyone wishing to discuss this note may call me on 020 7404 5252 during UK office hours or send me a message through my contact page.

Seraphine Ltd v Mamarella GmbH - The Sequel

Author ich Licence CC BY-SA 3.p Deed Source Wikimedia Commons

German Federal Patent Court

Jane Lambert

Intellectual Property Enterprise Court (Michael Tappin KC) Seraphine Ltd v Mamarella GmbH [2024] EWHC 1507 (IPEC) (18 June 2024)

In Service of Process in Germany After Brexit - Seraphine Ltd v Mamarella GmbH, I discussed the difficulties of serving parties in Germany following the United Kingdom's departure from the European Union and its exclusion from the Lugano Convention. The defendant, Mamarella GmbH ("Mamarella") had challenged the jurisdiction of the court and applied for the service to be set aside. The difficulties were not resolved until Mr Michael Tappin KC held in Seraphine Ltd v Mamarella GmbH [2024] EWHC 425 (IPEC) on 1 March 2024 that the claimant, Seraphine Ltd ("Seraphine") had been entitled to serve process without the permission of the court and rejected Mamarella's challenge to the court's jurisdiction.

In my case note, I mentioned that Mamarella had applied for a stay of the English proceedings pending proceedings in Germany and that that application had been refused by the deputy judge.  it appears from para [3] of a further judgment from Mr Tappin that that was not the case.  Mamarella's application had been based on forum non conveniens and case management grounds.  Mamarella conceded that a party that had agreed to an English jurisdiction clause required overwhelming reasons for a stay on forum non conveniens grounds but it did not abandon its case on case management grounds.  As it appeared that the German proceedings were about to be resolved Mamarella agreed to an order adjourning its application generally with liberty to restore before 24 May 2024 which was also the date upon which Mr Tappin had ordered a defence to be served.

The German proceedings were not resolved before 24 May 2024.   Instead, a fresh date for an oral hearing was fixed for 18 Nov 2024.  Judgment is likely to be handed down between 4 and 8 weeks later.   In accordance with its liberty to restore, Mamarella renewed its application for a stay. Mamarella's case was that the German proceedings were for a declaration that Mamarella has not, through its advertising or sale of 30 identified products (some of which are in issue in the English proceedings), infringed any unregistered Community design rights of Seraphine, and that Seraphine is not entitled to make any unfair competition claim in that regard.  Mamarella argued that in respect of the designs that are in issue in both sets of proceedings a finding by the German court would entitle the successful party to claim that the issue was res judicata. 

Mr Tappin was not persuaded.   In Seraphine Ltd v Mamarella GmbH [2024] EWHC 1507 (IPEC) (18 June 2024) he ordered Mamarella to serve its defence by 3 July 2023 and Seraphone to serve its reply by 31 July 2024.  It was clear from its solicitor's witness statement that preparations for service of its defence were well advanced by 24 May 2024.  He said that he had identified over 80 pieces of potential prior art.  As for the designs that were in issue in both sets of proceedings the deputy judge noted that Mamarella was ready to proceed in the German action in March.   If Mamarella wanted to plead res judicata it could do so now.  A case management conference which was likely to be held in early Autumn could consider the appropriate directions for trial including any that might relate to a judgment by the German court.

Anyone wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact page, 

Service of Process in Germany After Brexit - Seraphine Ltd v Mamarella GmbH

Standard YouTube Licence

Jane Lambert

Intellectual Property Enterprise Court (Michael Tappin KC) Seraphine Ltd v Mamarella GmbH [2024] EWHC 425 (IPEC) (1 March 2024)

As is well known, our good friends on the other side of the North Sea are renowned for their sense of humour.  Since I have to write an article on the riveting subject of service of process in Germany after Brexit I thought it would be fun to share this clip with you,   It is repeated on German television every New Year's Eve.  His Majesty the King referred to it in his speech at a banquet in his honour on his recent state visit.  I was introduced to it by a Swiss friend who tells me that it is also popular in Austria and the German-speaking cantons of Switzerland.

The Connection with the Video

This video's connection with the subject matter of this article is that the procedure for serving process in EU member states is set out in Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).  That regulation ceased to apply to the United Kingdom at 23:00 on New Year's Eve in 2020, the same evening as the "Dinner for One" broadcast.  The Lugano Convention on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters OJ L 339, 21.12.2007, p. 3–41 contains very similar provisions to Regulation 1215/2012 and HM Government applied to rejoin it.  Iceland, Liechtenstein and Switzerland would have countenanced British membership but not the European Commission (see EU Commission rejects the UK's Application to rejoin Lugano on 6 May 2021).

The Litigation

Seraphine Ltd. ("Seraphine") manufactures a range of maternity garments. Mamarella GmbH ("Mamarella") distributes such clothing in Germany. Seraphine alleged that Mamarella had infringed unregistered Community designs that it claims.  It issued proceedings in the Intellectual Property Enterprise Court ("IPEC") on 13 June 2023.

The Applications 

Seraphine attempted to serve these proceedings on Mamarella without the court's permission relying on the Anglo-German Convention of 20 March 1928 on Legal Proceedings in Civil and Commercial Matters.  Mamarella applied for service to be set aside on 17 July 2023.  Seraphin served Mamarella again under the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters whereupon Mamarella issued another application challenging the jurisdiction of the court and requesting a stay pending proceedings in Germany.  Seraphine issued its own application for permission to amend its claim form and particulars of claim and both parties sought leave to adduce expert evidence on German law in relation to the stay application.  Those applications came on before Mr Michael Tappin KC sitting as a deputy judge of the High Court on 26 Feb 2024.  He handed down judgment on 1 March 2024 (see Seraphine Ltd v Mamarella GmbH [2024] EWHC 425 (IPEC)).

Choice of Jurisdiction Clause

CPR6.33 sets out a number of grounds under which a claim form can be served outside the United Kingdom without the permission of the court.  One of them is CPR6.33 (2B) (b):

"The claimant may serve the claim form on a defendant outside the United Kingdom where, for each claim made against the defendant to be served and included in the claim form—
....................................
(b) a contract contains a term to the effect that the court shall have jurisdiction to determine that claim;"

Mr Tappin said that it was common ground that the Supreme Court in Four Seasons Holdings Inc v Brownlie [2017] UKSC 80 and Goldman Sachs International v Novo Banco SA [2018] UKSC 34 and the Court of Appeal in Kaefer Aislamientos SA de CV v AMS Drilling Mexico SA de CV [2019] EWCA Civ 10 had set the following test when addressing that rule:

"(i) that the claimant must supply a plausible evidential basis for the application of a relevant jurisdictional gateway; (ii) that if there is an issue of fact about it, or some other reason for doubting whether it applies, the Court must take a view on the material available if it can reliably do so; but (iii) the nature of the issue and the limitations of the material available at the interlocutory stage may be such that no reliable assessment can be made, in which case there is a good arguable case for the application of the gateway if there is a plausible (albeit contested) evidential basis for it."

Mr Tappin observed that the Court of Appeal had added at para [9 of his judgment that:

"(a) a "plausible evidential basis" is an evidential basis showing that the claimant has the better argument and the burden of proof is on the claimant, (b) the court should seek to overcome evidential difficulties and arrive at a conclusion if it 'reliably' can using judicial common sense and pragmatism, (c) part (iii) of the test applies where the court is simply unable to form a conclusion on the evidence before it as to who has the better argument; to an extent it moves away from a relative test and introduces a test combining good arguable case and plausibility of evidence."

Whether there was a Contract

Seraphine relied on a set of standard terms and conditions some of which had been struck out.  It was headed "Seraphine Limited Terms and conditions of sale" and had been signed by both parties.  Clause 25 of those terms provided: 

"(a) The Contract and any dispute or claim arising out of or in connection with it or its subject matter or formation (whether or not such dispute or claim is contractual) shall be governed by, and construed in accordance with, the laws of England and Wales.

(b) The Company and the Buyer irrevocably agree that, subject to the following sentence, the courts of England and Wales shall have exclusive jurisdiction over any claim or matter arising under or in connection with the Contract (whether or not such dispute or claim is contractual) and that accordingly any proceedings in respect of any such claim or matter shall be brought in such courts. Nothing in the proceedings [sic] sentence shall limit the Company's right to take proceedings against the Buyer in any other court of competent jurisdiction."

Seraphine contended that the alleged infringement of its unregistered Community designs was a breach of contract because clause 15 (a) of those terms and conditions stated that:

"The Buyer shall ensure that each reference to and use of any of the Company's IPR by the Buyer is in a manner from time to time approved by the Company and is accompanied by an acknowledgement, in a form approved in writing by the Company, that the same is IPR of the Company."

Mamarella contended that the terms only applied to "Contracts" that had been made upon the acceptance of "Orders" as defined by clause 2 of the terms.  It conceded that it had placed orders but these fell outside that definition.   It followed that the contracts formed upon the acceptance of the orders were not "Contracts" and that clause 25 did not apply to them.

Mr Tappin was not persuaded by Mamarella's argument.  It was inconsistent with a provision that the terms override any terms or conditions submitted proposed or stipulated by the buyer in whatever form and at whatever time, whether written or oral, which are expressly waived and excluded.  Mamarella had ordered goods from Seraphine Mamaerlla had also relied on the terms in a separate dispute over the performance of an order.  He held at para [24] of his judgment that Seraphine had a good arguable case that the orders that it had accepted fell within the agreed terms including the exclusive jurisdiction clause.  He concluded at [28] that  Seraphine was entitled to serve the proceedings out of the jurisdiction without the court's permission.

Other Directions

    
The deputy judge gave permission to Seraphine to amend its particulars of claim to state how it had acquired unregistered Community design rights in the designs that were already the subject of a claim.  However, he refused to allow Seraphone to claim infringement of unregistered Community designs in earlier designs as there was no evidence that Mamarella had accepted terms containing an exclusive jurisdiction clause in respect of disputes over those earlier designs.   

As Mamarella had consented to an exclusive jurisdiction clause Mr Tappin refused a stay pending proceedings in Germany either on forum non conveniens or case management grounds.   It followed that there was no longer a need to consider either side's application for expert evidence on German law relating to a stay.

Finally, the deputy judge recorded at para [40] of his judgment that neither party had pressed him to determine whether Seraphine's purported service under the 1928 Convention was valid.

Further Information

Anyone wishing to discuss this article further may call me on +44 (0)20 7404 5252 during normal UK business hours or send me a message through my contact page.