Art collector's court case signals potential legal and contractual issues with NFTs
Out-Law Guide | 01 Jul 2020 | 2:54 pm | 17 min. read
The business impact of the coronavirus outbreak is spilling into the world of intellectual property (IP) as courts and IP offices around Europe adapt their procedures to account for the coronavirus crisis.
Businesses wishing to register or renew patents, trade marks or designs, or that are involved in legal disputes involving those or other IP rights, such as copyright and database rights, should understand how the new approaches being taken will impact them.
The EUIPO deals with the registration, renewal and challenges to the validity of EU IP rights, including the unitary EU trade mark. In light of the "exceptional occurrence" of the coronavirus outbreak, the EUIPO extended all time limits in all proceedings before the EUIPO expiring between 9 March 2020 and 17 May 2020 to 18 May 2020. The EUIPO has issued guidance around what happens now that the time limit extension has expired. The guidance confirms that it is largely back to business as usual around time limits and that if parties are experiencing difficulties in complying with deadlines then the usual mechanisms will apply to deal with this, such as formally requesting an extension of time in the usual way.
The EPO deals with the registration and renewal of, and oppositions to, European patents.
On the impact of Covid-19, it has said:
The EPO does not identify any particular regions that are "high risk" but instead acknowledges that the crisis has no borders: "As of 10 April 2020 countries and regions are no longer classified as international risk areas," it said. "Due to pandemic spread, there is a global risk of acquiring Covid-19".
It is expected that the UKIPO, EUIPO and EPO will continue to issue guidance as we move though this ever changing situation. Intellectual property law expert Florian Traub of Pinsent Masons, the law firm behind Out-Law, said: "This is clearly an evolving situation. Not every IP office has the statutory right to extend deadlines comparable to the EUIPO’s executive director’s decision, but we can expect that examiners will use their maximum discretion in granting extensions or upholding restitutio-applications. Applicants, trade mark owners and opponents must still exercise caution as some statutory deadlines are non-extendible by law."
The WIPO is the global forum for IP services, policy, information and cooperation. It is responsible for administering, among other things, global systems for the registration of patents, trade marks and industrial designs, and it also provides arbitration services in relation to disputes over rights in domain names.
Like other IP authorities, the WIPO has shut its various offices around the world for non-essential staff, including its headquarters in Geneva, Switzerland. All meetings are postponed or cancelled through until the end of May.
Despite its office closures, the WIPO has said that its operations under the Patent Cooperation Treaty, the Madrid System for the International Registration of Marks, the Hague System for the International Registration of Industrial Designs, the Lisbon System for the International Registration of Geographical Indications as well as administering other intellectual property (IP) and related systems are continuing during the current crisis. Its Arbitration and Mediation Center (AMC) is also continuing to process domain name disputes under the Uniform Domain Name Dispute Resolution Policy (UDRP) and other alternative dispute resolution cases.
It said: "WIPO has activated its business continuity protocol and moved to an almost entirely virtual work presence, with only a small pool of personnel retaining access to our Geneva, Switzerland headquarters. This is in line with public health authorities’ guidance to curb the further spread of Covid-19. We are committed to ensuring that any transitional issues experienced by users, IP offices and any other stakeholders in our processes are kept to a minimum despite these extenuating circumstances."
The UK Intellectual Property Office (UKIPO) deals with the registration, renewal and challenges to the validity of UK IP rights – trade marks, registered designs and patents.
The UKIPO had previously declared that Tuesday 24 March 2020 and all subsequent days until further notice were considered to be ‘interrupted days’. This meant that deadlines for trade marks, designs, patents and supplementary protection certificates since 24 March were extended until the UKIPO notified the end of the interrupted days period. In its latest update, on 22 June, the UKIPO confirmed that the last interrupted day will be 29 July 2020. This means that the first normal day of operation when all interrupted days deadlines expire will be Thursday 30 July 2020.
On 29 June, the UKIPO issued a new notice concerning temporary fee changes, to support businesses experiencing financial hardship as a result of the Covid-19 pandemic but that want to maintain IP rights valuable to their business or progress pending applications. Although the business as usual position will apply from 30 July and deadlines will once again need to be met and fees paid, the UKIPO has made a number of temporary fee reductions. These reduced fees will apply from 30 July 2020 to 31 March 2021 in relation to patents, trade marks and registered designs. Specifically:
In relation to the courts of England and Wales, Lord Chancellor Robert Buckland issued a statement on the impact on the courts of Covid-19, and a further message has also been posted to judges by the Lord Chief Justice
Generally it is business as usual in the civil courts where adjustments have been made so that hearings can proceed through the use of telephone, video-links and other technology.
Court staff have been moving towards home working and e-filings are to be accepted by the Business and Property Courts, within which the IP courts sit in England and Wales.
Guidance has been prepared for judges and practitioners on how to conduct remote hearings before civil courts. The guidance addresses the application of Civil Procedure Rules and sets out legal issues that should be considered before remote hearings can commence. The guidance also explains the process of what will happen when a hearing is fixed and provides some further clarity around the preparations parties should complete and how remote hearings will operate.
Further guidance on case management issues, including the application of the Civil Procedure Rules and court-imposed deadlines, as well as how the court should deal with emergency applications is anticipated from the senior judiciary.
The government has published a webpage where the latest guidance can be found on courts and tribunals planning and preparation.
The Civil Procedure Rules 1998 have recently been updated in various ways in response to the Covid-19 pandemic. As part of a pilot, the new Practice Direction (PD) 51Y was signed off on 26 March 2020 by the Lord Chancellor. This PD is in relation to video and audio hearings and it clarifies that a court will direct remote hearings to be heard in private where "…necessary to do so to secure the proper administration of justice".
A new Practice Direction 51ZA took effect on 2 April and will cease to have effect on 30 October 2020. That PD relates to extension of time limits and the clarification of PD51Y audio and video hearings. One of the key changes is that parties can now agree to an extension up to 56 days without formally notifying the court, rather than the current 28 days, providing that does not put a hearing date at risk. In addition, the PD51ZA amends the audio and video hearing PD51Y and makes it clear that a person seeking permission to listen to or view a recording of a hearing may do so by request and is not required to make a formal application under the CPR.
The Intellectual Property Office of Ireland (IPOI) remains open. In line with the recommendations of the Irish government, its physical office has been closed to the public from Friday 13 March. This closure has now been extended to 2 June 2020. The patent comptroller has confirmed that these days are deemed to be 'excluded days' for all purposes under Irish patent law, trade mark law and design law. The IPOI will continue to maintain all of its online and e-services, including e-filing of applications, electronic fee payments and enquiries by email during normal opening hours.
The comptroller explained that Rule 78 of the Patents Rules 1992 "provides that whenever the last day fixed by the Patents Act, 1992 or by these Rules, for doing any act or thing at the Office falls on any of the days on which the Office is not open to the public (which days shall be excluded days for the purposes of the Act and these Rules), it shall be lawful to do any such act or thing on the first day which is not an excluded day next following such excluded day".
The comptroller has indicated that “subject to the government’s further easing of restrictions and barring unforeseen circumstance, it is intended that this will be the last extension of the 'excluded days' provision". Accordingly, the comptroller has encouraged all users, rights holders, businesses and IP professionals to attempt to meet original deadlines and payment due dates where possible so as to avoid congestion of the Office’s online systems when the 'excluded days' provision expires.
The Courts Service in Ireland published an update to its Covid-19 Statement on 8 May 2020. The effect of the update is outlined below.
The courts remain open. Cases can be commenced through the central office of the High Court in the normal way and the central office has a drop box procedure in place to address concerns presented by Covid-19. The Statute of Limitations therefore continues to run.
The Irish courts are now extending the use of virtual remote court hearings, and are organising more physical hearings. Courtrooms have been laid out with physically distanced spaces and cases are being listed at staggered times, with no more than 10 people allowed in the courtroom at any one time.
In the High Court, three courts are now open daily for remote hearings, and seven courts are dealing with physical hearings on a daily basis, subject to social distancing rules. Cases which involve oral testimony are not currently being heard. The High Court will also sit throughout the Whit vacation in order to continue to work through the list of pending cases.
For all cases before the Commercial Court – a division of the High Court which hears all significant IP cases – all directions as to the exchange of pleadings, affidavits for motions, witness statements, remain in place and must be complied with by the parties. The Commercial Motion Lists will resume on 25 May 2020 and will be held remotely until further notice. Papers should be lodged by email and there will be a remote call over every Friday of the cases listed for hearing the following week.
Remote hearings are also taking place in the Court of Appeal and in the Supreme Court.
The president of the High Court has added to the list of urgent matters that will be heard. This includes commercial litigation, including IP cases, for example, injunctions and their enforcement and urgent applications for judicial review. In the current unfolding crisis events can move quickly and profoundly for a party. It is worth noting that all the normal suite of injunctions can be applied for in Ireland, including for example interim ex parte, quia timet – that is to prohibit an actionable wrongful act where such act is threatened, apprehended or imminent – or mareva/asset freezing injunction – that is to restrain the dissipation or removal of assets.
Otherwise, a case may be treated as urgent if a good case can be made. A party can email the relevant court registrar setting out the reasons why the case should be considered urgent. This should be on notice to the other side which must be given a chance to set out its position.
Judgments will continue to be published online and parties will not be required to attend court for the delivery of those rulings.
Ann Henry of Pinsent Masons said "Ireland has now entered phase one of the government’s roadmap for reopening society and business. We had our first virtual hearing last week. It concerned a multi-party intellectual property discovery application before the Commercial Court and ran very smoothly. In truth the Courts Service have done tremendous work in getting the virtual hearings up and running so quickly. There’s reform happening now across the Irish courts. Recently we applied in person for urgent injunctive type relief in a patent litigation matter and likewise we got heard quickly and received the Order straight away. I have to say 'hats off' to all involved in the courts – there has been a lot of pressure to ensure the courts continued to function and they have done it."
The French parliament adopted an emergency law on 22 March, via a fast-track legislative procedure. The law introduced a so-called 'state of health emergency', which was initially due to end on 24 May but has now been extended until 10 July, and gives the French government the power to take a wide range of emergency measures. This includes the power to take a number of measures aimed at addressing the administrative and judiciary consequences of the pandemic, such as:
Shortly after the law was adopted, the French government adopted a set of decrees enacting exceptional measures using its powers under the new law. The government has since added new decrees to the package and updated the initial decrees.
The package covers a wide range of emergency measures aimed at addressing the current situation, and includes adjustments relating to time periods due to expire during the state of health emergency in France, and adjustments relating to rules before judiciary courts on non-criminal matters. The measures have implications for IP rights holders and users.
There are adjustments relating to time periods which were or are due to expire between 12 March 2020 and 23 June 2020, the so-called 'legal protection period'. Save for exceptions, the adjustments include the following measures:
Jules Fabre from Pinsent Masons said: "These extension rules apply to all time periods set by the French Intellectual Property Code and in particular deadlines for: filing oppositions, paying renewal fees, filing administrative or judiciary complaints, filing third party observations or responding to notifications from the INPI."
"The extension rules do not apply, however, to deadlines resulting from international or European conventions such as deadlines for: priorities for international extensions, payment of fees for filing of patent applications, applying for supplementary protection certificates, which are subject to supra-national provisions," he said.
"The INPI has announced that it will remain close to the public until at least 2 June, but most INPI employees and examiners are working remotely from home so that examination, grant and official publications can continue, and all online services – filing, renewals, payment of fees, registrations, for example – remain available as normal," Fabre said.
There are also adjustments relating to rules before judiciary courts in non-criminal matters, including the following measures:
Courts in France had already activated their contingency plans on 16 March and judicial activities were limited to 'essential' court cases, such as extremely urgent summary proceedings, certain criminal proceedings and certain proceedings before juvenile courts subsequently.
The Judiciary Court of Paris and the Paris Court of Appeal – which have exclusive jurisdiction over patent disputes – had suspended all case management hearings, trial hearings and hand down of judgments until 11 May, the date lockdown was ended in France.
While they had been temporarily authorised by the government, IP courts were not able to hold hearings via videoconference. "There are various reasons for this, including the fact that clerks were not able to access remotely to RPVA – the courts' secured e-filing system, which is mandatory to communicate with the lawyers representing parties in a proceeding – and because the use of unsecured videoconferencing systems was not approved by the Paris courts," Fabre said. In addition, the clerk office could not process new complaints, injunction applications or applications for saisie-contrefaçons, which is a procedure for recording IP infringements.
Fabre said: "As a consequence of this, virtually all pending IP cases were put on hold for the duration of the lockdown, unless in situations where parties and the lawyers have managed to make the case progress on their own. However, with the lockdown in France ended on 11 May, courts are very progressively resuming normal activities."
On 27 April, the president of the Paris Judiciary Court officially announced that for all cases which were due to be heard on a date between 16 March and June 24 a judgment will be handed down without a trial hearing, under the specific procedure authorised by the government emergency decree, if no such objection is raised by the parties. The president of the Paris Court of Appeal had adopted similar measures on 23 April in relation to cases where were due to be heard on a date between 11 May and 24 May.
In addition, judges of the Third Chamber of Paris Judiciary Court, which is competent for IP matters, announced on 23 April that their physical presence at the court will be re-established according to a rota. Further guidance from the president of the court in this respect has still to be issued, but the clerk office had already resumed activities on a part-time basis, primarily to process messages on RPVA and assist with the handing down of judgments.
They stressed that priority will be given to handing down judgments for cases heard before the lockdown and rescheduling case management hearings which had been cancelled, potentially by teleconferencing, as the physical presence of the lawyers at hearings will not be possible until at least mid-June. They also confirmed that until the end of the public health crisis, and in order to reduce the backlog of cases created as a consequence of the lockdown, judgments will be handed down without a trial hearing, based on files only.
The judges also provided guidance for saisies-contrefaçon requests and applications for preliminary injunctions, the latter being processed only if extreme urgency can be shown.
Dr. Nils Rauer of Pinsent Masons said that, in Germany, over the last few weeks the courts have concentrated on urgent matters such as preliminary injunction proceedings. This was based on legislation enacted by the Bundestag at the beginning of the pandemic in Europe. Courts moved into a so-called emergency operation mode. Written procedure without oral hearings became the temporary standard.
However, main proceedings are in the course of being picked up again and oral hearings are being re-scheduled. Rauer said the path back to the new normality to some extent depends on the facilities and staffing of the individual institution. “Safety first” is still and will remain the prerogative and the current rules on health protection are to be observed. Therefore, oral hearings are moved to the biggest court rooms in order to allow for adequate social distancing. The minimum distance between attendees and judges is set to be 1.5 metres at all times.
The German constitutional court has handed down a number of Covid-19 related decisions over the last few weeks. These cases reached the constitutional judges by means of urgent proceedings. The cases were and still are handled in accordance with a statement the court issued on 18 March 2020. Coincidently, the president of the German constitutional court, professor Andreas Voßkuhle, ended his 10-year term as president two weeks ago. The last decision he announced was on the European Central Bank’s decisions on the public sector purchase programme. Remarkably, the German constitutional court held that those purchases exceed EU competences.
The German Patent and Trademark Office is allowing trade mark clerks to work remotely from home if possible in a bid to maintain operations. A statement also issued on 18 March by the German Patent and Trademark Office confirmed that all deadlines already granted in pending proceedings will be automatically extended until 4 May 2020. The office will try to take the current situation into account within the framework of legal possibilities open to it when conducting the proceedings for the protection of intellectual property rights. This, it said, applies in particular to the approval of requests for the extension of time limits set by the office. In addition to that there will be no oral proceedings until 30 June 2020. However, the German Patent and Trademark Office said that it cannot extend legally specified time limits.
20 Mar 2020
17 Mar 2020
Art collector's court case signals potential legal and contractual issues with NFTs