Scotsman Legal Review: Intellectual Property

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In the Year of Innovation, Architecture and Design 2016, Scotland is celebrating its most exciting entrepreneurs and businesses.

With so many ideas, products and services being developed rapidly – 2,488 start-up companies were recorded in Scotland in 2015 – the race is on to safeguard all the hard work that has gone into creating them.

“The creative industries sector is burgeoning and more generally, as you would expect from Scotland, a highly innovative – and supported – backbone to industry,” says Val Surgenor, a partner at MacRoberts, specialising in intellectual property (IP), information technology and charity law.

“It’s a very innovative time whether it is in mHealth [mobile health], medical device, food and drink or manufacturing generally.

“Certainly we are seeing an ever-increasing demand for our branding services and an increased awareness of intellectual property rights generally and in light of this we have seen an increased demand for IP audits, particularly those funded through government grants.”

Another trend which has been keeping Scotland’s IP lawyers occupied is an increase in the litigious side of IP management.

The IP team at Brodies mainly handles disputes, the avoidance of them and their resolution.

Partner Gill Grassie highlights social media as one emerging theme which is continuing to gain momentum.

“While it can be a very useful tool for clients who engage with it, it can bite back quite severely and has the potential to seriously damage a brand almost instantaneously,” says Grassie.

“As such, it is having an ever-increasing impact on a number of our clients in terms of their brand protection and especially the management of their brands online.”

Grassie and her colleagues are handling more and more matters where something which has gone “viral” on social media could have a detrimental impact on a client’s reputation and brand.

“Care needs to be taken in the strategy adopted in dealing with and mitigating these instances as the matter under discussion or dispute will now be played out in full public view and with the public contributing their comments as things progress,” she says.

“Fuel can easily be added to the fire if one wrong step is taken.”

September saw the much-awaited decision from the Court of Justice of the EU (CJEU) – known as the GS Media decision – which relates to posting hyperlinks to other copyright works.

Prior to the decision, the position was unclear on posting a hyperlink to a third party copyright work on another website where that content was freely available, but where it may have been uploaded without the consent of the copyright owner.

The CJEU ruled that if the party posting the link knew, or ought to have known, that the copyright content was being published illegally, or if the party did so to seek financial gain, then it would be infringement of copyright.

Grassie explains: “This means that businesses will now have to consider checking the web source of any material to which they are proposing to link, for example on their own website or elsewhere, to ensure the original third party post was legitimate and not infringing.

“Copyright owners will view this as a victory as it enables them to insist on unlicensed third party links to their online materials being removed.”

Food and drink is high on the economic agenda, the result of which has been a focus on protected geographical indications (PGI) and other similar EU schemes designed to protect names and quality of food, drink and agricultural products.

“These are EU-dependent rights and largely affect food and drink, which is a rapidly growing sector for the Scottish economy,” says Grassie.

“As such, PGIs and their like are of huge potential value to the Scottish economy with Scotch whisky, Arbroath Smokies and Scottish Salmon – Scotland’s largest food export – being some of the better known types of goods covered already by these IPRs [intellectual property rights].”

At present, there is no national law which protects products this way and IP is one area which has the potential to be heavily impacted by the UK’s vote to leave the EU.

One of the most recent developments was the EU Commission’s proposals for copyright in the Digital Single Market, which were officially released on 14 September.

Some are considered controversial, including the introduction of a neighbouring ancillary right for press publications and proposed monitoring and reporting obligations placed on providers of platforms dealing in user-generated content, such as YouTube, Google and Facebook.

The next stage for the proposals, which aim to promote efficiency and competition in the EU copyright economy, is to go through the various stages of the EU legislative process, during which they may change through negotiations and debate.

“From a Brexit perspective, most of our IP rights are driven by both European legislation and treaties which Scotland, as part of the UK, has signed up to either as part of the UK or as an EU member,” says Surgenor.

For as long as the UK remains in the EU, EU trademarks (EUTM) are valid in the UK. Post Brexit, UK businesses will be able to register EUTMs which will ensure protection of their trademarks in the remaining EU member states.

“For EUTM rights holders that wish to ensure their current registrations provide protection in the UK, the position is less clear,” Surgenor explains.

“The UK government is currently considering available options. It is thought, but has yet to be confirmed, that a system will be put in place to ensure that holders of EUTMs will have their rights extended to include the UK once the UK has left the EU.”

The same applies to designs; until the UK “Brexits”, Registered Community Designs (RCDs) remain valid in the UK.

One area which is not impacted by Brexit is the European Patent Convention, the validity of existing European patents covering the UK continuing unaffected.

“UK copyright laws will continue to comply with EU copyright directives while the UK remains a member of the EU,” continues Surgenor.

“The terms of exit negotiations will dictate the legal effect of EU directives and regulations post Brexit.

“The IPO [Intellectual Property Office] notes that UK copyright works will be protected around the world even after the UK leaves the EU as the UK is a member of numerous international treaties and agreements.”

Briefing: IP and future industries, by Douglas McLachlan

The thriving tech sector in Scotland has continued to grow and innovate in 2016, and along with it the wide range of specialist legal services needed for start-ups and expanding businesses.

With more than 84,000 people currently employed in the sector in Scotland, the industry is struggling to recruit the estimated 11,000 individuals it needs year on year.

Despite an increased eagerness (particularly among millennials) to try their hand at tech entrepreneurship, securing funding remains a challenge for most start-ups.

The implications of the Brexit decision are still sinking in and businesses are searching for clarity to help them plan their future course.

The creative and tech industries are no different, leading to anxiety about sourcing suitable tech savvy or creative industry workers from outside the UK. 

The advantage of being a full service law firm with our primary focus on the Scottish market is that we have been able to provide support to both private and public sector clients in this sector on a range of corporate, commercial, IP, finance and employment issues.

As an IP specialist, it’s certainly been a busy year, from advising on high value government IT projects, film, TV and music clients, to budding app developers.

We even found the time to win a rare registered design lawsuit in the Court of Session and we fully expect more of the same in 2017.

Douglas McLachlan is partner in creative and future industries at Anderson Strathern.

The Scotsman’s annual legal review looks at some of the most active areas of legal practice in Scotland. Informed by comprehensive data published by Chambers and Partners and Legal 500, the articles give exclusive insight into the work of more than 11,000 practising solicitors and over 460 practising advocates.