Intellectual Property Protecting your brand profiting from it

Introduction 1. Social Media - Issues related to corporate use - Issues related to third party/employee use 2. Protecting Copyright in the Digital Age - Rights in data Copyright in software Copyright and anti-circumvention laws 3. Brand Protection - Colour as a trade mark Practical issues from an in-house perspective 4. Patent Box 5. Questions? Page 2

1. Social Media

Social Media Page 4

SOCIAL MEDIA? ? Over 1 billion social media users globally Over 400 million people use FACEBOOK every day Avg FACEBOOK session is 37 mins. TWITTER 23 mins. Smart phones = 51% of UK mobile market (30% in Q 1 2012) Page 5

(i) Corporate use of Social Media 1. TERMS & CONDITIONS a. Barclays [and B&B] publish news, photos and other material to Twitter or Facebook. b. The sites' use of this material is governed by terms and conditions. c. Facebook's T & Cs grant them a licence of the IP in any content posted. d. Facebook allows only restricted use of data gathered through advertising (eg cannot sell to third party). Page 6

(i) Corporate use of Social Media • Last year the online photo and social networking site Instagram introduced the following condition of use: "to help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos, and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you. " • Page 7 Instagram eventually clarified that selling its 100 million users' photos was not its intention.

(i) Corporate use of Social Media So beware site’s TERMS & CONDITIONS and have your own Page 8

(i) Corporate use of Social Media 2. Advertising generally a. Consumer Protection from Unfair Trading Regs – General – unfair commercial practices – Specific – misleading actions – or in some way deceitful – Blacklist – 31 (eg advertorials) b. Code of Non-broadcast advertising. . . (CAP) – Legal, decent, honest and truthful – Communications must not materially mislead or be likely to do so. Page 9

(i) Corporate use of Social Media Complaint against Katie Price Tweet "You're not you when you're hungry @snickers. Uk #hungry #spon" Advertising Standards Agency – NOT UPHELD Page 10

(i) Corporate use of Social Media 3. Multiple jurisdictions (FSMA) a. Authorised persons & financial promotions 4. Market abuse (FSMA) a. Speed – inside information b. Accuracy - creating a false or misleading impression. 5. FSA Handbook a. Non-promotional communications b. Financial promotion (COBS 4, BCOBS 2, ICOBS, MCOB 3) c. Image advertsing Page 11

(i) Corporate use of Social Media 6. FSA – practical matters a. New media may date more quickly than traditional media b. Suitable method for the type of communication. For example, Twitter limits the number of characters – Misleading? – Risk information to be displayed prominently and fairly? c. Geoblocking d. Complaints Page 12

(ii) Third Party/Employee use of Social Media: Nestlé Kit. Kat ● Greenpeace released a fake Kit-Kat commercial on Youtube accusing Nestlé of the use of palm oil and deforestation ● Nestlé attempted to get the video removed from Youtube ● Youtube accepted the removal of the video but the video was reposted by others ● Greenpeace used Twitter to criticise the censorship attempt Page 13

Online criticism: Nestlé Kit. Kat Every 15 minutes a tweet regarding “palm oil” appeared Page 14

Online criticism: Nestlé Kit. Kat Meanwhile the anti-Nestlé discussions moved away from activist blogs and appeared on Nestlé’s Facebook page Page 15

Online criticism: Nestlé Kit. Kat Nestlé responded to the criticism on their wall by… ● Threatening to delete comments left by individuals using modified versions of their corporate logo as avatars… ● Answering ‘fans’ in an aggressive way Page 16

Online criticism: Nestlé Kit. Kat Do you believe in coincidence? Page 17

Policing use of your brand reputation in social media ● Identify which social media platforms your customers use and which are most relevant to your business ● Do not overreact ● Be proactive and implement clear policies and procedures ● Install a monitoring program ● Leverage tools offered by the social network ● Be creative – threatening litigation may lead to a backlash (Freedom of speech versus the protection of reputation/brand) Page 18

2. Protecting Copyright in the Digital Age

(i) Rights in Data ● Sui generis database right - Protects databases not data Where investment in obtaining verification or presentation Infringed by acts of extraction or reutilisation of substantial part Also infringed by repeated extraction/reutilisation of insubstantial parts ● Database Copyright - Protects databases - Higher originality threshold – selection or arrangement of data has to be author's own intellectual creation Page 20

(i) Rights in Data Forensic Telecommunications Services Limited v the Chief Constable of West Yorkshire Police and Stephen Hirst [2011] EWHC 2892 (Ch) • Compilation or table of mobile phone permanent memory absolute (PM abs) addresses (used to recover evidence for criminal investigations) • Copyright did not subsist in individual PM addresses • Copyright did also not subsist in the database of addresses as selection and arrangement not authors' own intellectual creation • Database rights did subsist as there had been considerable investment in the obtaining of the addresses • Confidential information subsisted. Commercially valuable information. Ds should have been aware that had an obligation to keep confidential. Page 21

(ii) Copyright in Software Legal background • Copyright subsists in "original" literary and artisitc works • Software Directive, Article 1(3) provides that a computer program shall be protected "if it is original in the sense that it is the authors own intellectual creation" • Copyright can subsist in: • Computer program itself – source code and object code • Preparatory materials and manuals • Other copyright works incorporated into computer programs eg design and layout of a screen, embedded sound and film, etc • The architecture of a computer system Page 22

(ii) Copyright in Software Copying ? • Copyright prevents the whole or "substantial part" of copyright work being copied • Copying does not need to be intentional • Unconscious recollection of code by programmer who then reproduces it would infringe in the same was as if intentionally memorised • Indirect copying • Work does not infringe just because it is similar so long as no copying has taken place. Page 23

SAS Institute Inc ("SAS") v World Programming Ltd ("WPL") CJEU C-406/10 2 nd May 2012 • Software created by WPL emulated functionality of SAS software. Enable users to execute application software written in SAS specific coding language. • SAS claimed that in creating its software – WPL infringed copyright in SAS manual and indirectly infringed copyright in the software. • SAS claimed that WPL's manual infringed copyright in the SAS manual. • SAS claimed that in studying, observing and testing the SAS learning edition software WPL had breached the terms of its licence to use it. Page 24

SAS Institute Inc ("SAS") v World Programming Ltd ("WPL") CJEU C-406/10 2 nd May 2012 CJEU Decision: • The functionality of a computer program, its programming language nor format of data files protected by copyright because not forms of expression for purposes of Article 1(2) Software Directive • BUT did not necessarily mean that SAS language and format of SAS data files were not protected as works. • Article 5(3) Software Directive allows a licensee to observe, study and test programme to determine the ideas and principles behind it so long as acts covered by the licence. Page 25

SAS Institute Inc ("SAS") v World Programming Ltd ("WPL") CJEU C-406/10 2 nd May 2012 • CJEU also held that infringement occurs where elements from a user manual are reproduced in another manual or computer programme • So long as reproduction constitutes expression of the intellectual creation of the author of the copyright protected user manual • Decision still to be considered/applied by the English High Court Page 26

(ii) Copyright in Software Open Source Software ("OSS") • 80% of organisations expected to have OSS within their own software code base. • Potential for conflicts between OSS licences and traditional proprietary licences. • Risk of core product portfolio becoming subject to T&Cs of an OSS licence. • Companies such as Black Duck can audit software to determine how much OSS is used. Page 27

(ii) Copyright in Software Ownership/Copying • Software developed by a contractor who is not an employee will belong to the contractor in the first instance. • Company should ensure it takes an assignment. • Risk of copying by third party developers/competitors. • Include "sleepers" – lines of code with no function which can identify the origin of the software. Page 28

(iii) Copyright and Anti-Circumvention Laws • Copyright law prevents the circumvention of technological barriers for using computer programs in ways which the right holders do not wish to allow. Sony Computer Entertainment v Paul Owen and Others [2002] EWHC 45 (Ch) • Use of Messiah chips in Playstation 2 s enabled users to play games which had been copied or which were from other countries. Page 29

3. Brand Protection

(i) Colour as a Trade Mark • Colour is registrable as a trade mark if capable of distinguishing goods/services of one business from those of another • It can be difficult to establish that colour (on its own) identifies a particular business… Société des Produits Nestlé SA v Cadbury UK Ltd [2012] EWHC 2637 • Evidence demonstrated that the public associated the colour purple itself with Cadbury's chocolate and therefore Cadbury were entitled to a registered trade mark for that colour for chocolate. Page 31

(i) Colour as a Trade Mark Some other examples, which companies have trade marks for these colours? Tiffany and Co. Jewellery and various other items made of precious metal UPS Transport; packing and storing of goods; services with relation to delivery of letters 3 M (Post it notes) Stationery notes containing adhesive on one side for attachment to surfaces Page 32 John Deere Various domestic and industrial machinery

(i) Colour as a Trade Mark " German savings banks see red over Santander logo" • November 2011 the German saving banks federation (DSGV) asked Santander to stop using the colour red in the German domestic banking sector and to remove it from their 350 branches. • This was followed up by a formal application for an injunction which was granted by the Hamburg court last February. Santander have appealed the decision • According to Die Welt, “recent surveys confirm that the German people identify the colour red not only with love, but also with the savings banks. ” Page 33

(ii) Practical Issues - an In-House Perspective • Who is responsible? • MONITORING • Scorched earth policy? • What to cover? e. g online, Mobile Apps etc • Use of external monitoring company • Company's position vs behaviour • Internal education as to policy Page 34

4. The Patent Box Are you ready?

10% Corporation Tax - outline principles • Effectively reduces corporation tax from 23% to 10% on profits attributable to patented innovation • Patent must be granted in UK, EPO (& some other EU countries) • Retrospectively covers 6 years when pending grant • Applies to Worldwide profits on Relevant IP Income (RIPI). NB Includes income from selling patented products or products incorporating patented invention or spare parts • BUT must offset (1) Routine Return & (2) Marketing Return • Must satisfy Development & Active Ownership conditions • Little correlation to patent scope Page 36

Who can benefit? • Company must be liable to UK corporation tax • Own IP or be the exclusive licensee • Have undertaken "qualifying development", ie: • creating, or significantly contributing to creating invention; or • performing a significant amount of activity to develop the patented invention, any product or any process incorporating the patented invention. • Beware of pitfalls: • 'Significant' • Change of ownership • Group Companies & the 'Active Ownership' condition • Anti-avoidance Page 37

How to calculate? Income ratio to profits Page 38

Considerations & Practical Issues? • Need to map patents to products • Are systems in place to capture Patent Box requirements? • NB Company structure – who holds the rights and who makes the trade? • Is your subject matter patentable? Impact on trade secrets? • Speed to grant & narrowing claims • Monitoring competitors? • What if revoked? • Extension of the ‘Nuisance factor’. . . ? Page 39

5. Any Questions?

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