At the root of the intellectual property system lies a bargain between the creator of the intellectual property and the State (or perhaps ‘society’ would be a better expression). By his or her efforts the individual has created something with which society would be better off if it could use: the intellectual property system provides a mechanism for the creator to gain a pecuniary advantage from letting society have the use of their creation.
In the U.S.A., this is expressly recognised in the Constitution, which permits Congress to legislate ‘to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries’ (Art I, §8, par. 8). The U.S. Congress’s first effort to legislate to protect trademarks (a single word being the American usage) was ruled unconstitutional by the Supreme Court: trademarks were neither ‘writings’ nor ‘discoveries.’ Trademarks legislation had to be based on the so-called ‘commerce clause’ in the Constitution, designed to encourage and protect interstate commerce. This Article of the Constitution has more recently been invoked to enable protection for databases to be enacted.
Different philosophies have at different times applied these basic, universal principles in different ways. In civil law systems, where the law of copyright is modelled on the French system, copyright is regarded as an especially sacrosanct form of property, an author’s work amounting to an extension of his or her personality. This led to an emphasis on what have become known as moral rights. Copyright harmonisation in the EU has eroded many of the differences between the civil law and the common law approaches, and the international conventions have resulted in extensive cross-fertilisation, so that (among other examples) UK copyright law has protected moral rights since 1989.
You could say that in the final analysis intellectual property rights protect knowledge, or information. Not, clearly, any old information, but definitely special types of information: information expressed in an original way (copyright), information about the appearance of articles or products (designs), information about how to make things or how things work (patents), and information connecting goods or services to their providers (trade marks). And, of course, information of any kind that is confidential.
There is an abundance of academic literature on whether it is right to protect these types of information. Reflecting the reasoning underlying the IP clause of the U.S. constitution (quoted above, in the preceding section), the WIPO Intellectual Property Handbook gives two reasons, although it understandably takes the opportunity to promote the virtues of intellectual property laws:
One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations. The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and application of its results and to encourage fair trading which would contribute to economic and social development.
Section 6 of the Statute of Monopolies2 1623 or 1624 (depending, as with the first Copyright Act, on which calendar you use) outlawed all monopolies except those ‘for the term of 14 years or under hereafter to be made of the sole working or making of any manner of new manufactures within this Realm to the true and first inventor’. It was therefore the first pillar of English and UK patent law. It made patents for inventions a special case, so we can reasonably ask: if monopolies are generally seen as a bad thing, why should patents (and other forms of intellectual property, which are also types of monopoly) be an exception?
Is it right that the types of information protected by patent, copyright, design or trade mark law should be given the status of property? After all, a broad prohibition of unfair competition could do the job. The unfair competition laws found in many jurisdictions (especially civil law ones) and required by the Paris Convention, to which the UK has been a signatory for well over a century, prohibit activities which are defined widely enough to cover appropriating another person’s invention or work.
Perhaps relying on unfair competition law would do the job presently done by intellectual property laws, but equally one could regard intellectual property laws as nothing more than special cases of laws against unfair competition. Indeed, the law on passing off is gradually coming – some might say has already come – to resemble an unfair competition law. But it seems far too late to re-engineer on non-property principles the system that has developed over the past several centuries or more.
Intellectual property laws must strike a balance between the interests of several parties – what in modern parlance have come to be called ‘stakeholders’. The inventor, author or designer is obviously one; the owner of the rights, not always (indeed, perhaps, not usually) the same person, is another; and users (or would-be users) of the subject-matter of the rights are others. We will see that the statutes governing the different areas of intellectual property are carefully-crafted instruments which tread a delicate path between these differing standpoints, defining what activities might constitute infringements and what activities which would otherwise infringe can be carried out without having to get permission from the rights owner – a sort of safety-valve to prevent the rights becoming too strong, or ‘overreaching’.
The word ‘commons’ is increasingly used in discussions about intellectual property law, especially copyright. It alludes to old systems of land ownership in which common land was available for the use of all, and was used (with a capital ‘C’) by the philosopher John Locke to refer to things that remain available to all – the opposite of private property. The concept corresponds closely to that of ‘public domain’, although in intellectual property law that expression should be used with care as it means different things in different contexts: material which is in the public domain for confidentiality purposes might still be protected by copyright. ‘Creative Commons’ is the name given to a movement to liberalise the terms under which copyright works, and more recently patented inventions, are made available to users.
A similar philosophy of openness underlies the Free Software movement and the Open-Source approach to software licensing, which are dealt with at greater length below.4
Turning these creations of the intellect into a form of property, as intellectual property law does, assimilates it to other forms of property which have the uniting feature that they are scarce resources: land, for example. Granting proprietary rights in land is intended to ensure that it is used optimally – the market will, in theory, ensure that rational owners put it to the best use they can. However, intellectual property is not a scarce resource: apart from the fact that more is being created all the time, a single ‘piece’ of intellectual property (a patent, for example) is not lost when an infringement takes place. The activities of an infringer might diminish the value of the patent, and the appropriation without payment of the right to work the patent enriches the defendant at the cost of the patent owner, making the activity economically analogous to theft, but the owner does still have the property. It is said that it is not ‘rivalrous’, as are other forms of property. If it is not a scarce resource, should not information be available to all and form part of the Commons?
The answer, at least most people’s answer, is likely to be a compromise between creating powerful property rights, and the Commons. Unless you have a philosophical objection to property in general, or to treating creations of the intellect as property (rather than relying on a sweeping law against unfair competition) certain types of information should be protected. The discussion then centres on the safeguards that are needed to protect the interest of the rest of society – those who would use the Commons.
Here academia and practice diverge: there is little discussion of these matters in the cases, which – naturally – concern the law as it is, not as it might be. Dranez Anstalt v Hayek5 is cited as an exception to this general rule, although the subject is rather peripheral to the main issue in the case, which was the restrictions placed on Dr Hayek,6 who had invented a new type of ventilator but was prevented by a no-competition obligation from working freely in the field. The Court of Appeal (the leading judgment being given by Chadwick LJ with whom Brooke LJ and the Lord Chief Justice, Lord Woolf, agreed) took a distinctly utilitarian view of the matter:
The grant or registration of a patent confers a monopoly. The statutory monopoly can be justified on the grounds that it is necessary (for a limited time) in order to encourage inventors, and those who fund them, to apply their skills and resources in developing products and processes from which the public will benefit. But the balance between the benefits which will accrue to the public from permitting monopolies in order to encourage invention and the detriment which may be suffered by the public from monopolistic practices is struck by the patent legislation. A case in which it could be justified as reasonable in the interest of the public to superimpose further contractual restraints on invention, going beyond what Parliament has thought necessary, must be regarded as exceptional. In particular, it must be a wholly exceptional case in which the imposition of such restraints on a pioneer in a field of medical science – in the development of which there is, at least prima facie, such an obvious public benefit – can be justified. There is nothing in his judgment to indicate whether, and if so why, the judge thought that this was such a case. In my view he ought to have concluded that it was not.
Why should these matters be treated as property? Several theories are commonly advanced to justify property, and are often used – albeit with limited success – to justify intellectual property:
There is no scientific proof that protecting intellectual property makes for a better society. In Bali, for example, even in modern times, there was no concept of copyright: an individual’s creations were free to be used by everyone. Before the patent system in the UK took on its present form – during the industrial revolution, which when I was at school some time later was put broadly between 1750 and 1850 – innovation was encouraged by the award of prizes (called ‘premiums’) by bodies such as the Royal Society for the encouragement of Arts, Manufactures and Commerce (known as the Royal Society of Arts, or RSA – another example of that archaic use of the word ‘art’). The Society would publish a wide variety of challenges which people would try to solve: this is what Captain Bligh was trying to do, taking breadfruit to the West Indies where it was expected to be a successful crop, when the crew of the Bounty mutinied. He won his premium on a subsequent attempt. This problem-solving approach is reflected in modern patent law, which can be analysed as protecting technical solutions to technical problems. (Establishing breadfruit in the West Indies, as such, lacks a technical dimension.)
Commentators8 identify several theoretical justifications for protecting intellectual property. To these, in the interest of balance, we should add theories which question it. They all derive from theories concerned more generally with property. It is worth saying at the outset that the theories apply best to copyright and patents (and their close relatives in the designs field), and not to trade marks: but if one considers the important property right in the trade mark area to be business goodwill, the theories makes better sense. The theories can be divided into two groups, namely those based on a pre-social, natural rights approach, and those based on a social, positive-law approach. The former stress
The labour theory of property tells us that a person who labours on property that is unowned or owned in common acquires natural property rights in the fruits of his or her labours, which the state must respect and enforce. It was originally expounded by John Locke (1632-1704) in his Second Treatise on Government (1689). The theory reflects the simple and intuitive proposition that what we create, we should own: but Locke was not thinking about intellectual property when he wrote it – the first copyright legislation was still 20 years off and copyright would not become important for more than a tiny elite for many decades; patents as a means of protecting inventions would not become important until the start of the Industrial Revolution; and the expression ‘intellectual property’ would not appear in print until 1769. Locke’s theory should therefore be understood in the context of a predominantly agricultural society.
Nozick takes issue with this as a justification for intellectual property in his book Anarchy State and Utopia.9 Why should the labourer gain the object on which their labour is expended, rather than losing the labour? He likens this to pouring a can of tomato juice into the sea, and claiming ownership of the ocean.10 Logic certainly suggests that the labourer should only enjoy the value added as a result of their effort, rather than the whole value of the mixed thing-plus-labour. Hettinger tells us that Locke argues that ‘99 per cent’ of the value of an apple is created by picking it, which seems reasonable (though Hettinger sees it otherwise) because while it remains on the tree the apple is no good to anyone. But this surely shows the limitations of applying to intellectual property a framework devised with agriculture and handicrafts in mind. Nozick suggests that it is also unsuited to an industrial society.
The basic notion that labouring on a resource creates a property right is famously subject to John Locke’s Proviso: that there be ‘enough and as good left in common’, in other words that after one person has laboured to create property subsequent people can do the same and create their own property. Nozick expresses the proposition slightly differently: the acquisition of property through labour is legitimate provided others suffer no net harm, a proposition that seems closely related to the ‘greatest good of the greatest number’ tenet of utilitarianism. Nozick’s ‘no net harm’ proviso includes the situation where people are left poorer than they would have been under a regime that did not allow property to be acquired through labour, or by a reduction in the resources available for their use: but ‘net harm’ does not include a diminution in the opportunities to acquire property rights in unowned resources by being the first to labour on them.
The Proviso is difficult to reconcile with the way intellectual property laws work. Copyright, to be fair, does strive to leave ideas in the Commons, so later authors can write their own versions of what amount to the same stories; but the patent system (and its close relative, the registered design system) gives monopoly protection, leaving nothing in the Commons once a patent has been granted.
Nozick argues that Locke’s Proviso is not violated by patent rights because, although others’ access is limited, the patented invention only exists because of the inventor’s efforts. However, he considers that Locke’s theory does require two limitations – first, that subsequent ‘inventors’ must be permitted to make and sell their inventions (reducing patent protection to a form of copyright, requiring a nexus between the infringer’s product and the patentee’s invention), and secondly that protection should last for no longer than the time it would take to make the invention. But because patent laws do not work in the way Nozick thinks they should, Locke’s theory cannot be said to justify them. And as for trade marks, a concept which Locke would probably have had great difficulty understanding, the labour theory simply cannot provide a justification for making them property. A fancy logo might take significant labour to create, but the act of creation is rewarded by copyright, not trade mark, protection. The labour theory might justify protecting trade goodwill, and there is a close relationship between that and trade marks, but trade goodwill is not intellectual property.
The Lockean approach also runs into problems when one takes into account that the labourer11 creates nothing from scratch, but rather builds on what has gone before. He or she is standing on the shoulder of giants.12 How can we account for the giants’ contribution? If the labourer is obliged to pay a royalty to the giants whose patent or copyright they are using, that would seem to answer the question, but if the giants’ protection has expired or was never secured in the first place, the labourer is taking a free ride on it – at the expense, probably, of the consumer, because who else is there to bear the cost?
This approach also fails to take account of the fact that the labourer will be remunerated at the rate determined by the market – set by reference to factors far removed from the labour, and therefore often excessive. Hettinger argues that remuneration is a liberty, not a right, and in any case is this relevant to the question whether intellectual property is justified? The law does not confer a right to receive remuneration, merely the opportunity to demand it. Moreover, given that many people can enjoy a single piece of intellectual property at once, the problem of excess reward becomes multiplied.
The deserts argument, as explained by Hettinger, focuses not on what is owed to the labourer but on what they deserve. It suggests that the labourer should receive some benefit from the labour, but it does not stipulate that the benefit should take the form of property rights: fees, awards, status, admiration and other rewards might be more appropriate. The labourer’s deserts may be property rights, but certainly not always, because that logic would lead to parents owning property rights in their children.13
Because they were formulated to explain why private property was a good thing, rather than specifically justifying intellectual property, these theories leave a great deal to be desired as justifications for intellectual property. For a start, they do not help at all with justifying trade marks, which are not the product of labour (although the underlying goodwill is). They suggest that property rights should be perpetual, and intellectual property laws provide for time-limited protection. They cannot be reconciled with the selectiveness of intellectual property laws, which protect inventions only if they are not only novel (which inventions must be, as a matter of logic) but also inventive, so not every inventor’s labour will be rewarded. We have already seen that Nozick tried to reconcile the Lockean proviso with modern patent law by suggesting that second and subsequent devisers of the same ‘invention’ should have equal rights to the true inventor, which would make patents into a form of copyright. And the natural-rights theorists provide no basis on which employers would own the rights in their employees’ inventions and copyright works.
We need a better justification for intellectual property than the natural-rights approach. Fortunately we do not have to look far.
The basic tenet of utilitarianism, most famously expounded by Jeremy Bentham (1748-1832) in An Introduction to the Principles of Morals and Legislation in 1789, a century after Locke, is expressed in the simple (and simplistic) formula, ‘the greatest good for the greatest number’. It is concerned with the maximisation of social welfare, with balancing the power of exclusive rights to stimulate creativity and innovation against their tendency to limit public enjoyment of what is created. A specific application of this approach to the intellectual property field can be found in the writings of William Landes and Richard Posner, leading lights of the Chicago School and scholars of law and economics, although many readers (especially those with a less-than-easy facility with mathematics) will find the amount of economics in their work daunting. In their review of copyright law14, the authors point out two key problems: that works can be easily and cheaply replicated (in the digital age the cost of replication is often negligible), and enjoyment of the work by one person does not preclude enjoyment by others. The minimal costs of reproduction mean that, without legal protection, creators would have great difficulty recovering the cost of creation in the face of competition from copyists. Granting exclusive rights therefore empowers creators. There are alternatives (for example, patronage such as that enjoyed by artists and composers in the pre-copyright age) but they use social resources less efficiently.
The same authors provide a utilitarian justification for trade marks, too15. Using these distinctive signs to communicate with consumers reduces search costs, enabling us to identify the goods or services we want quickly and easily; and they help guarantee consistent quality (and if branded products disappoint, perhaps because Cadbury’s chocolate is no longer made in Bourneville, they enable us easily to recognise what we no longer wish to buy). This is a powerful justification for granting exclusive rights: and the other side of the coin is that consumers will suffer detriment if more than one producer is allowed to use the same (or a similar) identity on their goods.
Landes and Posner also claim, less convincingly, that trade marks improve the quality of the language, increasing the stock of nouns: this is a rather dubious claim, given that trade marks should never be used as nouns lest they become generic, though clearly it is common for them to be misused in this way. Nevertheless, Landes and Posner assert that the trade marks system creates ‘words or phrases that people value for their intrinsic pleasingness as well as their information value’, the suggestion being that exclusive rights encourage that creativity. Without trade mark law, how many English-speakers would be familiar with the phrase ‘Vorsprung durch Technik’, let alone know what it means?16
Trade marks may also be socially harmful, Landes and Posner argue, because the first entrant to a market may appropriate especially attractive or informative names. Certainly that is true of attractive names, but the law of trade marks is designed to prevent informative signs achieving protection (whether by registration or at common law): and in any case, while these matters may justify protecting trade marks, they do not advance the case for treating them as property rather than relying on unfair competition laws.
Intellectual property rights might be the best way to deliver the greatest good to the greatest number, but it is inherent in the fundamental tenet of utilitarianism that a balance has to be struck. If intellectual property laws become too protective – if the limited monopolies not sufficiently limited – the great number of consumers do not receive the greatest good: that is concentrated in the hands of the small number of rights owners. On the other hand, if protection is weak, the greatest number will not, in the long run, enjoy the greatest good: the amount of good will be reduced because inventors will stop inventing and creators will stop creating, being unable to earn a living form their work.
So long as a close eye is kept on the balance, however, the utilitarian equation surely provides the most convincing justification for intellectual property.
Property rights can be justified by reference to the need for some property to meet basic human requirements, such as shelter and nourishment. Applying this to intellectual property is, however, a bit of a stretch. Owning copyright in one’s creative works is not necessary to one’s sovereignty and security at the same fundamental level as other types of property, although clearly owning copyright (or other intellectual property) can be the foundation for an income.
On the other side of the coin, stopping others using their own ‘inventions’17 (and, though copyright should not have this effect but often does, their own creations) is detrimental to the dignity of other people. When you add that to the objection that intellectual property does not meet basic human needs, this theory too fails to provide a sound justification for intellectual property.
In a related approach, Kant and Hegel argued that private property rights are crucial to the satisfaction of some fundamental human needs, and resources should be allocated so as best to enable people to satisfy those needs. Either intellectual property rights protect the expression of ‘will’, an activity considered to be central to the idea of personhood; or, because they will create social and economic conditions conducive to intellectual activity, they will help humans to flourish.
Hughes18 develops guidelines from Hegel’s Philosophy of Right:
Intellectual property laws as we know them do not measure up well against these standards. The omniverous approach to protection – outlined below in paragraph 2.4 – is at odds with (a) above, for a start: (b) justifies personality or image rights, which the law rarely protects, and (c) justifies moral rights, but neither justifies other forms of intellectual property.
A further argument says that property rights can, and should, be shaped to help foster the achievement of a just and attractive culture. This argument, which seems to be directed to questions about what to do with property rather than whether it is a good thing to start with, was advanced by Jefferson, Marx (in his early days), the Legal Realists, and both ancient and modern proponents of classical republicanism. There are similarities between this approach and the utilitarian one, but it posits a richer vision of desirable society than one based only on social welfare.19 It also raises dangerous questions of what might be considered ‘just and attractive’, questions which would probably receive a very different answer in Nazi Germany or the Soviet Union (or in contemporary times North Korea) than in the United Kingdom.
If I pose the question, it is a fair bet that I think the answer is ‘yes’, certainly in the case of the utilitarian argument. This analysis of the benefits of intellectual property falls down when one considers the broad scope of what is protected. Not every creation of the intellect is equally valuable. Beethoven’s ninth symphony is superior, by almost every conceivable measure, to Direct Line’s advertising jingle, but copyright law does not distinguish between them. (One way in which the jingle is arguably superior to the symphony is, however, its suitability for use as a trade mark, and trade mark law accordingly gives it protection as such.) Nor does patent law distinguish between a blockbuster drug that will save many lives and – well, how about U.S. 2009/188617 for a method of making works of art using the nose of a dog?
Those comparisons, telling as they may be, overlook one important limitation of the intellectual property system. It does not exist to remunerate creative people: it merely provides legal support to their efforts to earn remuneration. It is not for the law to say that Beethoven’s work is better than the advertising jingle, or that the new drug is of greater value to humanity than dog-nose-art. The market will answer those questions.
It is far from universally accepted that intellectual property laws are good, in principle or as they stand. As well as the obvious point that intellectual property can be said not to satisfy Locke’s proviso (‘enough and as good’), or that the law does not produce the greatest good for the greatest number (which could be said to account for the positions of critics such as Richard Stallman and Laurence Lessig), or that it fails the test of other established justifications, there are also schools of thought that reject the idea of intellectual property in principle.
Peter Drahos writes in the preface to the electronic edition of his book, ‘I am against intellectual property rights in their present form and more or less against them in any form.’ If after writing the definitive book on the philosophy of intellectual property he has come to that conclusion, it must have some weight.
Others argue that intellectual property rights are the enemy of freedom of thought and freedom of expression. While the law on breach of confidence certainly prevents the use of some information, the same cannot be said of the patent system (public disclosure of the invention being a condition for grant) or copyright (which encourages authors to make their works available, by giving them the possibility of making money from them). So that argument cannot be said to be compelling.
Marxist commentators provide a critique of intellectual property laws, not a justification: but they help us to understand the role of intellectual property in society. It is particularly interesting to consider the growth of importance of intellectual property rights in late-stage capitalism: indeed, it could perhaps be said to be the ultimate triumph of capitalism to separate value from physical objects. Capitalism turns everything into property – commodifies20 things, so that they can be traded – and in doing so it destroys the Commons. Intellectual property law is perhaps the paradigm case of turning something that cannot be traded, and therefore has little or no value, into something that can.
It is not difficult to see in the behaviour of copyright owners who refuse to acknowledge (short of legal compulsion) the acts permitted under the copyright legislation, or of trade mark owners who seek protection in myriad classes for all manner of goods and services, registering not just their trade marks but also the component parts of them, or patent owners whose business is pursuing infringers rather than making anything, a programme of enclosure analogous to, and (depending on your point of view) as destructive as, that which took place in the agricultural revolution and the Highland clearances. Intellectual property owners are often modern-day commodity fetishists.
If the whole of intellectual property law could be reduced to a simple prohibition of unfair competition (as I suggested earlier), is unfair competition in itself against the law? Although there is a large – and growing – body of law concerned with protecting competition, the answer to that general question is ‘no’. But the UK’s law is often said to be deficient in this respect.21
Article 10bis of the Paris Convention requires contracting states to provide an effective remedy against unfair competition, which it defines as:
… any act of competition contrary to honest practices in industrial or commercial matters.22
It is not an intellectual property issue, but as it occupies the same territory (and, as I observed above, if one did not accept that intellectual creations should be a form of property, a law against unfair competition could do most of the job instead) and therefore fits fairly well within the Convention. Many countries have taken the Paris Convention at face value and introduced unfair competition laws: in Case C-100/02, Gerolsteiner Brunnen v Putsch23 the Court of Justice, considering language in the trade marks directive lifted straight from Article 10bis, reformulated the obligation:
The condition of honest practice constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner
Judges in the UK have always taken a robust view of competition. Business conduct is generally regarded as fair if it is not criminal, which is a very low standard of fairness. Consistent with this approach, English law lacks any general concept of unfair competition, and the same is true of many other common-law jurisdictions,24 although in the United States the Supreme Court (albeit only by a majority, with very powerful dissenting judgments from two of its biggest names, Justices Holmes and Brandeis) upheld a claim to unfair competition (sending the plaintiff’s stories by telegraph from the east coast to the west coast so as to publish the news there before the plaintiffs) in International News Service v Associated Press25.
A claimant who wants protection for something must therefore try to find an intellectual property right that will do the job, and if (as in Green v Broadcasting Corporation of New Zealand26, known as the Opportunity Knocks case after the television show involved) no intellectual property right does the job there will be no protection. An appeal to general principles of unfair competition will cut no ice with the court. Green is one of a series of cases in which the House of Lords and the Privy Council (some of the same judges in more than one of the cases) dug in their heels and refused to countenance what they considered an unjustified extension of intellectual property protection: other cases in the series include the Coca Cola Trade Mark case mentioned above, British Leyland Motor Corp & Ors v Armstrong Patents Company Ltd & Ors27, Cadbury-Schweppes v Pub Squash Co28, and CBS Songs Ltd v Amstrad Consumer Electronics Plc29.
That is not to say that there is no law in the UK to protect competition. Ever since accession to the European Communities in 1973 (and for British business operating in the common market, since long before that date) the competition rules now found in Articles 101 and 102 of the Treaty on the Functioning of the European Union have been part of the legal landscape. Since 1998, domestic competition law (in the form of the Competition Act of that year) has consciously emulated those rules, so leaving the European Union will not involve abandoning competition law.
Nor is it to say that the judicial conservatism of the 1980s still pertains. The key modern passing-off case, Erven Warnink B.V. v. J. Townend & Sons (Hull) Ltd.30 (the Advocaat case), shows the House of Lords prepared to push the boundaries of the action, and later cases such as Irvine v Talksport31 follow that trend (though in Irvine the claimant had to go to appeal to obtain sufficient damages to make it, as he put it, worth getting out of bed).
Cadbury-Schweppes v Pub Squash Co32 shows a different approach to passing-off, in which the Privy Council recoiled from creating a monopoly by protecting the way in which the appellants’ product was advertised. To market a soft drink product to hardened beer-drinkers, emphasising its masculine characteristics, required a particular approach, and if the appellants were to succeed in their claim that the respondent’s advertising amounted to passing off, small new entrants would find it impossible to enter the market already occupied by large companies with well-known products – the perpetual problem of foreclosure.
Despite all this (or perhaps as a consequence of some of it), it has been said that we have a law of unfair competition in the UK: and said by no less an authority than Aldous LJ, who was the Patents Court judge for several years before his promotion to the Court of Appeal, and before that a leading member of the intellectual property Bar. He first expressed this heresy, though not in so many words, in British Telecommunications Plc & Ors v One In A Million Ltd & Ors33, and repeated it more overtly in Arsenal FC v Reed34. However, his successor in the Patents Court, Jacob J (as he then was) took a different view in Hodgkinson & Corby v Ward’s Mobility Services35, saying that there was no tort of taking another trader’s customers (the robust view of what amounts to fair competition).
If the English courts have some differences of opinion, how much worse it is when you add the European Union to the equation. In L’Oréal v Bellure36 Jacob LJ asserted (at para 141) that ‘the basic economic rule is that competition is not only lawful but a mainspring of the economy.’ The Court of Justice (Case C-487/07) said that, on the contrary, taking unfair advantage of another’s trade mark could be an infringement. When the case came back to the Court of Appeal, Jacob LJ noted (at para 2):
Not for the first time in intellectual property cases (e.g. British Horseracing Board v William Hill37, Arsenal v Reed38 and Boehringer Ingelheim v Swingward39 the Court’s judgment has left enough room for the parties to disagree about what it means.
He then went on to say (at paras 6 and 7):
The problem, stated at its most general, is simple. Does trade mark law prevent the defendants from telling the truth? Even though their perfumes are lawful and do smell like the corresponding famous brands, does trade mark law nonetheless muzzle the defendants so that they cannot say so?
I have come to the conclusion that the ECJ’s ruling is that the defendants are indeed muzzled. My duty as a national judge is to follow EU law as interpreted by the ECJ. I think, with regret, that the answers we have received from the ECJ require us so to hold.
1Probably the most accessible exploration of the philosophical basis of intellectual property law is Hettinger, Justifying Intellectual Property, Philosophy & Public Affairs Vol. 18, No. 1 (Winter, 1989), pp. 31-52, but readers must bear in mind that this is the work of a philosopher (he is professor of philosophy at the College of Charleston in South Carolina) commenting on U.S. law. Drahos, P. A Philosophy of Intellectual Property (ANU, 2016, an electronic edition of the work first published in 1996 by the Dartmouth Publishing Company) is the leading, perhaps the only, book-length (265 pages) treatment of the topic, and can be downloaded free of charge from the Australian National University website. See also Jacob, The Stephen Stewart Memorial Lecture: Industrial Property – Industry’s Enemy? [1997] IPQ 3; Libling, The Concept of Property: Property in Intangibles, (1978) 94 LQR 103; Spence, Passing Off and the Misappropriation of Valuable Intangibles, (1996) 112 LQR 472. For general reviews of theoretical justifications for protecting intellectual property (which tend to blur the distinctions between patents and copyright, say little about designs, and prove hard to apply to trade marks), see Justin Hughes The Philosophy of Intellectual Property 77 Geo. L.J. 287 (1988) and Fisher, Theories of Intellectual Property in New Essays in the Legal and Political Theory of Property (Cambridge University Press, 2001), and (much shorter) Neil Wilkof’s critique of Fisher’s piece from the Journal of Intellectual Property Law and Practice (March 2014). For a different perspective, see Brooks, Intellectual property rights – the modern day enclosure of the commons: I deal below, briefly, with the Marxist view of intellectual property, which sheds a great deal of interesting light on the state of intellectual property law in the modern world.
2Deazley, R. (2008) ‘Commentary on the Statute of Monopolies 1624’, in Primary Sources on Copyright (1450-1900), eds L. Bently & M. Kretschmer, www.copyrighthistory.org.
3The title of the fifth album by The Moody Blues (1970). The album has no relevance to this discussion except to provide a neat title.
425.4.8 And 25.4.9.
5[2003] FSR 561, [2002] EWCA Civ 1729 (26 November 2002) at para 25.
6For the views of Dr Hayek’s philosopher namesake, Friedrich, on intellectual property see this online article by Stephen Kinsella.
7The distinction between these last two – the pre-social, natural rights approach of Locke and others, and the social, positive-law approach of Hobbes, Mill, Bentham and others, is explained in J.Getzler, ‘Theories of Property and Economic Development, Journal of Interdisciplinary History, XXVI: 4 (1996) at p.641. See also, J.Waldron, The Right to Private Property (Oxford, Clarendon Press, 1988); S.Munzer, A Theory of Property (Cambridge University Press, 1990), and more recently, M.J.Radin, Reinterpreting Property (University of Chicago Press, 1993). These references are taken from ‘Theories of Private Property in Modern Property Law’ by Sukhninder Panesar [2000] Denning Law Journal 113.
8For example, the articles by Hettinger, Hughes and Fisher and the book by Drahos listed in note 1, supra.
9Page 175.
10Would it not be more realistic to consider pouring the ocean into a can of tomato juice and claiming ownership of the juice? There is certainly an important matter of proportion to be considered. The invention or creation might reasonably be considered to be greater than the common material incorporated in it.
11It remains the best word to use, although we are getting further and further away from its ordinary meaning.
12Another album title, this time Oasis (2000), though the phrase came originally from Sir Isaac Newton (Letter from Isaac Newton to Robert Hooke, 5 February 1676, as transcribed in Jean-Pierre Maury (1992) Newton: Understanding the Cosmos, New Horizons): ‘If I have seen further it is by standing on the shoulders of giants.’ Noel Gallagher reportedly read the quote in a pub on a then-novel £2 coin and noted it down on a cigarette packet, but being inebriated at the time got it slightly wrong.
13Becker, Property Rights, page 46, cited by Hettinger.
16Used as a slogan trade mark by Audi AG, it means ‘advancement through technology’.
17The inverted commas are there because patent law’s novelty requirement means that, while subjectively an individual might regard something they have devised as an invention, the patent system generally recognises only the claim of the first person to devise it.
19See Neil Netanel, Copyright and a Democratic Civil Society.
20Different from commoditizing things – removing elements that differentiate products in the market place.
21Or not: see Davis, J. (2010). WHY THE UNITED KINGDOM SHOULD HAVE A LAW AGAINST MISAPPROPRIATION. The Cambridge Law Journal, 69(3), 561-581. doi:10.1017/S0008197310000802 (arguing that except for the concept of “unjust enrichment” or “pure misappropriation”, existing torts and some statutory law, often originating in EU law, cover the same ground as other countries’ unfair competition laws). See also One more outing for Arsenal: a case of dilution or one for restitution? Christopher Wadlow Journal of Intellectual Property Law & Practice, Volume 1, Issue 2, January 2006, Pages 143–147, https://doi.org/10.1093/jiplp/jpi029 (“Aldous LJ was unlikely to have been contemplating the introduction of a common law doctrine of trade mark dilution, or any other extension to passing-off which would remove misrepresentation from its central position as one of the essential elements of the Classical Trinity, and that the existing state of the authorities rules out any such development by the Court of Appeal. … It is tentatively suggested that an extension of existing passing-off principles to cases of pure unjust enrichment may have been what Aldous LJ had in mind, and that this would not necessarily be too radical a step for the common law to accommodate.”)
22You will find this wording in the trade marks directive and regulation, and therefore also in the Trade Marks Act 1992.
23[2004] ECR I-691 (7 January 2004).
24For example, the Australian case Victoria Park Racing v Taylor (1937) 58 CLR 479 in which the High Court held (affirming the decision of the Supreme Court of New South Wales) that no wrong was committed when the defendant allowed a radio broadcaster to erect a five metre high platform on his property, enabling the broadcaster to provide information about the proceedings at the claimant’s race track. The broadcasts made possible off-track betting, as a result of which the claimants, who had erected a high fence around the track, suffered a big drop in attendance.
25(1918) 248 U.S. 215.
26[1989] UKPC 26 (18 July 1989).
27[1986] UKHL 7 (27 February 1986).
28[1980] UKPC 30 (13 October 1980).
29[1988] UKHL 15 (12 May 1988)
30[1979] AC 731, [1980] R.P.C. 31.
31[2002] EWHC 367 (Ch) [2002] 2 All ER 414 (13th March, 2002).
32[1980] UKPC 30 (13 October 1980).
33[1998] EWCA Civ 1272 (23 July 1998)
34[2003] EWCA Civ 696 (21 May 2003), where he spoke (para 70) of ‘the cause of action traditionally called passing off, perhaps best referred to as unfair competition. ... The traditional form of passing off as enunciated in such cases as Reddaway v Banham [1896] AC 199 is no longer definitive of the ambit of the cause of action.’ His Lordship went on:
As Cross J said in Vine Products Ltd v Mackenzie & Co Ltd [1969] RPC 1 of the decision in the Spanish Champagne cases (Bollinger, J. and others v Costa Brava Wine Coy. Ltd [1960] RPC 16 and [1961] RPC 116).
“A man who does not know where Champagne comes from can have not the slightest reason for thinking that a bottle labelled “Spanish Champagne” contains a wine produced in France. But what he may very well think is that he is buying the genuine article – real Champagne – and that, I have no doubt, was the sort of deception which the judge had in mind. He thought, as I read his judgment, that if people were allowed to call sparkling wine not produced in Champagne “Champagne,” even though preceded by an adjective denoting the country of origin, the distinction between genuine Champagne and “champagne type” wines produced elsewhere would become blurred; that the word “Champagne” would come gradually to mean no more than “sparkling wine;” and that the part of the plaintiff's goodwill which consisted in the name would be diluted and gradually destroyed. If I may say so without impertinence I agree entirely with the decision in the Spanish Champagne case – but as I see it uncovered a piece of common law or equity which had till then escaped notice – for in such a case there is not, in any ordinary sense, any representation that the goods of the defendant are the goods of the plaintiffs, and evidence that no-one has been confused or deceived in that way is quite beside the mark. In truth the decision went beyond the well-trodden paths of passing-off into the unmapped area of “unfair trading” or “unlawful competition”.
35[1995] FSR 169.
36[2007] EWCA Civ 968 (10 October 2007).
37[2005] EWCA (Civ) 863, [2005] RPC 883.
38[2003] RPC 696, [2003] EWCA Civ 696.
39[2004] EWCA Civ 129, [2004] ETMR 90).