LAW AND TAXTATION

HISTORY AND DEVELOPMENT OF INTELLECTUAL PROPERTY LAW

Intellectual Property

Intellectual property (IP) is a term referring to creations of the intellect for which a monopoly is assigned to designated owners by law. Some common types of intellectual property rights (IPR) are copyright, patents, and industrial design rights; and the rights that protect trademarks, trade dress, and in some jurisdictions trade secrets: all these cover music, literature, and other artistic works; discoveries and inventions; and words, phrases, symbols, and designs.

Intellectual Property LawIntellectual property law deals with the rules for securing and enforcing legal rights to inventions, designs, and artistic works. Just as the law protects ownership of personal property and real estate, so too does it protect the exclusive control of intangible assets. The purpose of these laws is to give an incentive for people to develop creative works that benefit society, by ensuring they can profit from their works without fear of misappropriation by others.

History of formation of Intellectual Property Law the first ancient archaeological evidence of use of trademarks was found in the soils of Pakistan when seals were discovered from the ruins of Mohenjo-Daro and Harappa. These seals (trademarks) were used by the producers and traders to mark their products which they used to sell locally as well as in foreign markets as there were trade links between Mohenjo-Daro / Harappa and the Egyptian civilization.

Copyright was not recognized as an exclusive right until long after the invention of the printing press. The British Statute of Anne (1710) was the first real Act on copyright which gave the author rights for a fixed period of time. Internationally, the Berne Convention of 1887 set out the scope of copyright protection and after periodic revisions, is still in force today. Copyright’s history has taken it from a legal concept regulating copying rights in the publishing of books and maps to one with a significant effect on nearly every modern industry, covering such items as sound recordings, films, photographs, software, architectural works, internet, cyberspace etc.

As trade and commerce grew within and beyond territorial boundaries and into neighboring countries and continents, so did unfair practices by unscrupulous elements, and therefore the need for protection of rights of genuine traders was felt which, at the pre-statutory times was extended primarily on moral basis. The evolutionary process of globalization of trade and commerce grew in the 18th and 19th centuries by the revolutionary advancements in the means of travel and communication brought about by the invention of the steam engine, telephone, telegraphic and wireless technologies which catapulted the journey towards a global society. Thus when Marconi invented radio and got a patent for it in the year 1896. With globalization, trade and commerce not only became international but also borderless in nature and at the same time more competitive. Businesses and enterprises not only looked for new markets for their products but also started looking for establishing their set-ups outside their home country in search of cheaper labor and raw materials to lower production costs and enhance profitability.

Governments around the world began competing for such foreign trade and investment by providing effective legal framework and implementing investment friendly policies which drove the trend of globalization of businesses. Traders and businesses began setting up subsidiary companies in those countries which provided effective protection to their rights and investments and as a result higher profitability and an investment friendly environment. Businesses of the developed and developing countries also began negotiating and concluding joint ventures, licensing, contract manufacturing, distribution, agency or outsourcing arrangements. While some countries protected trademarks, they did not recognize patents or designs; some did not have any intellectual property laws at all.

Therefore the businesses of the developed and developing countries began to realize the increasing threat of “theft” of their technology, manufacturing or trade secrets etc., which were the backbone of their businesses. Thus the issue of effective protection to intellectual property rights globally was felt. The necessity for international protection of intellectual property was first brought to prominence when in 1873, foreign exhibitors refused to attend an International Exhibition of Inventors in Vienna as they were afraid that their inventive products may be stolen and then commercially exploited in other countries. The first major international treaty in this respect came into force in 1884 with the signing of the Paris Convention for the Protection of Industrial Property with 14 founding member States. As global trade grew, more and more businesses began raising concerns over protection of their rights outside their home country. During the first half of the 20th century, various treaties were signed among developed and developing countries to afford cross-border protection to trademarks, copyrights, patents and designs. The efforts continued until the signing of the TRIPs Agreement, which came into force on January 1, 1995 in the developed countries and on January 1, 2000 in the developing countries (on Jan 1, 2005 for Patents only). The main objective of TRIPs is to get implemented, strengthen and harmonize intellectual property laws among all the signatory countries. Under the TRIPs Agreement, the governments of members States agreed to minimum standards with regard to various forms of intellectual property rights such as

(i) Copyright and Related Rights (ii) Trademarks(iii) Geographical Indications(iv) Industrial Designs(v) Layout of Integrated Circuits (vi) Trade Secrets(vii) Patents

Pakistani Courts had long realized the importance of protecting the rights of owners of the Intellectual Property Rights. Their approach, when dealing with issues relating to Intellectual Property Rights, has always been forward looking and futuristic. The Courts of Pakistan were recognizing globalization and international trade, and enforcing rights based on such principles, at times when even some of the developed nations were only beginning to discuss these issues.

The first reported judgement where a Pakistani court gave due effect to international copyrights in musical works first published in Italy extending to Pakistan is the case of Hotel Metropole Ltd v. Performing Rights Society, PLD 1967 Kar 168. Courts in Pakistan were embracing as applicable to Pakistani law, all necessary legal principles affecting international companies and their businesses. Thus in a dispute between two international companies, interalia relating to trademark rights, the Honourable Sindh High Court in the case of Carl Zeiss Stiftung v. Carl Zeiss Stiftung, Jena, PLD 1968 Karachi 276 at page 298 observed as follows:

“One of the principles is that the law of domicile of a corporation governs it in respect of its constitution and the other is that, Court has no jurisdiction to entertain an action where its ground involves an Act of State. Discretion cannot be exercised independently of the principles of proper law which law, in respect of a foreign corporation, must be determined with reference to the principles of Conflict of Laws.”

On the other hand the first milestone observation recognizing internationalization of trade came in 1979 from the Honourable Sindh High Court in a case reported as Societe De Fabrication v. Deputy Registrar of Trademarks and another, PLD 1979 Kar 83 at page 87 where the court, while protecting an international trademark, observed:

“The conduct of the respondent in appropriating Trademarks of foreign owners is not proper…... It is common knowledge that trade in French perfumery is of international character. With the revival of International Trade and international publicity, the rights of owners of foreign Trade Marks ought to receive some safeguard unless it is clear from the evidence that the foreign owners have abandoned their intention of marketing their products under the mark in this country.”

One of the oldest ways of globalizing Intellectual Property Rights is through licensing of Intellectual Property. This is also the most commonly used way of commercializing Intellectual Property on the global scene. Unless the countries provide an effective platform enabling the licensing contracts to be entered into and worked out, as well as ensure that the termination of such contracts can be done without difficulty, no productive growth of global commercialization of products incorporating one or more forms of Intellectual Property Rights is possible. As far as licensing of Intellectual Property Rights is concerned, Pakistani courts have so far adopted a rational, pro-active and confidence building approach in adjudicating the rights. Thus in the cases of Bolan Beverages vs. Pepsico Inc., (2004 CLD 1530) the Honourable Supreme Court, while in the cases of Concentrate Mfg. Co., vs. Seven-up Bottling (2002 CLD 77) and Roomi Enterprises vs. Stafford Miller (2005 CLD 1805 (DB)) the Honourable High Courts upheld the rights of the owners of trademarks to terminate license agreements. Globalization of society and trade and the scientific revolution has thrown a big challenge upon intellectual property system, the moral justification for which has always been that it helps to promote and reward innovation for the betterment of the society as a whole. Article 7 of the TRIPs Agreement states that “the protection and enforcement of intellectual property rights should contribute to the promotion of

technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”

Challenges:

One of the challenges is to ensure that the intellectual property system is developed internationally as a promoter of socio-economic growth, while, at the same time, making acquisition, protection and enforcement of IP rights easier and more effective worldwide. The government of Pakistan has already reacted to the challenges thrown by globalization and has amended the Intellectual Property laws of the country and to a large extent, has brought these laws into conformity with the international obligations of Pakistan under the WTO/TRIPs Agreement.

The rapid development in digital technology is greatly affecting all facets of our lives. Satellite broadcasting, cable television, digital transmission systems, high powered and compact storage devices and last but not the least, the information super highway Internet have completely transformed the manner in which intellectual property can be created, used and disseminated. The strength of such technologies makes them truly global, defying all borders, yet in certain circumstances threatening and terrifying as well. Technology and the Internet have had a significant impact on intellectual property and the international IP system. By virtue of high tech gadgets and equipment, anyone can make “virtually genuine” copies of original works with speed, accuracy and in volumes that were not conceivable some years ago. Alarmingly, this does not stop here!! Every copy can be further reproduced into equally good copies and disseminated to public almost instantaneously. Also, the equipment needed to do all this is not only affordable for “counterfeiters” but is also available with millions of individual users in homes and private places. In other words, stealing another’s intellectual proprietary rights and exploiting them commercially has never been easier.

It is to be noted that in the case of infringement of intellectual property rights an infringer may be selling infringing products via internet through “virtual” offices and may have no “physical” place of business or establishment within the territorial limits of Pakistan. However, since the products will be offered to public in Pakistan within the territory of Pakistan, it is submitted, that at least part of the cause of action would arise in Pakistan and the courts in Pakistan would have jurisdiction to adjudicate upon such matters. There would, of course, be a challenge as to how to enforce such judgment in such a case. For this purpose, the government of Pakistan would have to look into entering treaties and agreements with more and more countries for enforcement of foreign judgments so that at least a judgment in such a case could be served upon the company hosting an offending website, forcing it to pull it down. As in the past, our superior courts have anticipated modern trends and displayed their progressive approach with issues relating to digital technology. Thus the Honourable Sindh High Court in the case of Acer Inc. v. Acer Computers, 2004 CLD 1131 extended protection to internationally well-known mark ACER against its

misuse as a domain name on the Internet and granted an injunction restraining the use of ACER either as a trademark or a trade name or as a part of the domain name, despite the absence of any standalone statutory provision on this issue.

Cases

1. S. Victor Whitmill v. Warner Bros. Entertainment Inc.

In the recent movie The Hangover Part II, Stu Price, a strait-laced dentist played by actor Ed Helms, wakes up after a night of debauchery in Bangkok to find a tribal tattoo wrapped around his left eye, his skin still painfully pink. Price’s tattoo is identical to the one Mike Tyson has, and it alludes to the boxer’s cameo in the original 2009 movie The Hangover.

Tyson’s tattoo artist S. Victor Whitmill filed a lawsuit against Warner Bros. Entertainment on April 28, just weeks before the movie’s May 26 opening. Since he obtained a copyright for the eight-year-old “artwork on 3-D” on April 19, he claimed that the use of his design in the movie and in advertisements without his consent was copyright infringement. Warner Bros., of course, saw it as a parody falling under “fair use.”

On May 24, 2011 Chief Judge Catherine D. Perry of the United States District Court for the Eastern District of Missouri denied an injunction on the movie’s release, but said Whitmill still had a case. If it meant avoiding a long trial, Warner Bros. said, in early June, that it would be willing to “digitally alter the film to substitute a different tattoo on Ed Helms’s face” when the movie is released on home video. But that ending was avoided on June 17, when Warner Bros. and Whitmill hashed out an agreement of undisclosed terms.

2. Kellogg Co. v. National Biscuit Co.

In 1893, a man named Henry Perky began making a pillow-shaped cereal he called Shredded Whole Wheat. John Harvey Kellogg said that eating the cereal was like “eating a whisk broom,” and critics at the World Fair in Chicago in 1893 called it “shredded doormat.” But the product surprisingly took off. After Perky died in 1908 and his two patents, on the biscuits and the machinery that made them, expired in 1912, the Kellogg Company, then whistling a different tune, began selling a similar cereal. In 1930, the National Biscuit Company, a successor of Perky’s company, filed a lawsuit against the Kellogg Company, arguing that the new shredded wheat was a trademark violation and unfair competition. Kellogg, in turn, viewed the suit as an attempt on National Biscuit Company’s part to monopolize the shredded wheat market. In 1938, the case was brought to the Supreme Court, which ruled in favor of the Kellogg Company on the

grounds that the term “shredded wheat” was not trademarkable, and its pillow shape was functional and therefore able to be copied after the patent had expired

3. Amazon's 1-Click Patent

Amazon was granted a patent for 1-click technology on September 28, 1999. Also known as one-click buying, the technology allows customers to make an online purchase in a single click—without having to manually input billing and shipping information every time they purchase a product. Instead, 1-click uses a billing address and credit card or other payment info that is kept on file in the user's account.

There have been several patent disputes surrounding 1-click technology, including a patent infringement lawsuit filed against Barnes & Noble in 1999—only a month after Amazon's patent was issued. Barnes & Noble offered a checkout option called "Express Lane," which also enabled shoppers to make a purchase with one click. The lawsuit was settled in 2002; however, the terms were not disclosed.

4. Bratz Dolls vs. Barbie

In 2008, Barbie was finally declared the winner in the long-running intellectual property rights battle between Mattel, Inc. and MGA Entertainment Inc., the makers of Barbie dolls and Bratz dolls, respectively. In the lawsuit, Mattel sued MGA claiming that MGA stole the concept and the name of the Bratz doll from them.

Carter Bryant, designer of the Bratz doll, was an employee of Mattel, but also working as a consultant for MGA when he designed the doll. A few years after MGA began selling Bratz,

Mattel sued both Bryant and MGA alleging copyright infringement. Because Bryant was on the Mattel payroll when he created the doll, the Bratz name and design are considered trade secrets. The courts sided with Mattel and ordered MGA to pay $100 million in damages.

5. Adidas America Inc. v. Payless Shoesource Inc.

In 1994, Adidas and Payless got into a scuffle over stripes. Adidas had used its three-stripe mark as a logo of sorts since 1952, and had recently registered it as a trademark. But Payless was selling confusingly similar athletic shoes with two and four parallel stripes. The two companies hashed out a settlement, but by 2001, Payless was again selling the look-alikes. Fearing that the sneakers would dupe buyers and tarnish its name, Adidas America Inc. demanded a jury trial. The trial lasted seven years, during which 268 pairs of Payless shoes were reviewed. In the end, Adidas was awarded $305 million—$100 million for each stripe, as the Wall Street Journal’s Law Blog calculated.

As told earlier in the report that Intellectual property law deals with the rules for securing and enforcing legal rights to inventions, designs, and artistic works. Every big company buy patents, trademarks, copy rights and other tools of intellectual property law to protect their product and services. To explain the intellectual property better we have chosen a case where Apple Sues Samsung over the different claims that sumsung infringement the apple means violate the law and the right.

CASE: APPLE SUES SAMSUNG: A COMPLETE LAWSUIT ANALYSIS

On January 5, 2007, 4 days before the iPhone was introduced to the world, Apple filed a suite of 4 design patents covering the basic shape of the iPhone. These were followed up in June of that year with a massive filing of a color design patent covering 193 screen shots of various iPhone graphical user interfaces. It is from these filings along with Apple's utility patents, registered trademarks, trade dress rights and much more property laws.

The Apple company's complaint openly says "Instead of pursuing independent product development, Samsung has chosen to slavishly copy Apple’s innovative technology, distinctive user interfaces, and elegant and distinctive product and packaging design, in violation of Apple’s valuable intellectual property rights." This is why Apple sue Samsung.

Background

The background section of Apple's complaint has a couple interesting nuggets in it: Apple's sold "over 60 million" iPod touches as of March 2011, which is the first time a specific number has ever been broken out for that device, and we're also told that 108m iPhones and 19m iPads have been sold. What's more, Apple spent more than $2 billion advertising the iPhone, iPod touch, and iPad during its fiscal years 2007 to 2010.

It's in this section that Apple also lays out what it considers to be its protectable intellectual property: seven utility patents, three design patents, trademarks on several iOS system app icons, and a host of trade dress registrations on the iPhone, iPod touch, iPad, and the packaging that each comes in. (Yes, the packaging — companies spend millions designing gadget boxes, after all.)

Apple finally sued a file against samsung alleging in a 38-page federal complaint on April 15, 2011 in the United States District Court for the Northern District of California that several of Samsung's Android phones and tablets, including the Nexus S, Epic 4G, Galaxy S 4G, and the Samsung Galaxy Tab, infringed on Apple’s intellectual property: its patents, trademarks, user interface and style. Apple's complaint included specific federal claims for patent infringement, false designation of origin, unfair competition, and trademark infringement, as well as state-level claims for unfair competition, common law trademark infringement, and unjust enrichmen.

The claims that Apple made due to which they sued Samsung are...The claims are explained one by one in detail. There were many claims that apple did on samsung but here we are discussing the most important one. These are claim due to which apple won the case in United States and samsung paid for the damages. It shows the importantance of Intellectual property law that due to these law apple sued samsung easily.

1)Trade dress infringement under 15 U.S.C. § 1125

This is a trademark that protect us against False designations of origin, false descriptions, and dilution forbidden. Trade dress is a species of trademark, the law that governs brand names, logos, and other identifiers of a particular company’s goods.  With trade dress, however, it is the singular look and feel of the product that tells the consumer who makes it. Below is the Apple list of trade dress elements it thinks Samsung is infringing due to which Apple claimed it through this registered trademark 15 U.S.C. § 1125

Hardware and software trade dress claims

a rectangular product shape with all four corners uniformly rounded; the front surface of the product dominated by a screen surface with black borders; as to the iPhone and iPod touch products, substantial black borders above and below the

screen having roughly equal width and narrower black borders on either side of the screen having roughly equal width;

as to the iPad product, substantial black borders on all sides being roughly equal in width; a metallic surround framing the perimeter of the top surface; a display of a grid of colorful square icons with uniformly rounded corners; and a bottom row of square icons (the "Springboard") set off from the other icons and that do

not change as the other pages of the user interface are viewed.

Packaging trade dress claims

a rectangular box with minimal metallic silver lettering and a large front-viewpicture of the product prominently on the top surface of the box;

a two-piece box wherein the bottom piece is completely nested in the top piece; and use of a tray that cradles products to make them immediately visible upon opening the

box.

2) Federal trade dress infringement under 15 U.S.C. § 1114

This trademarks is again for the design of the shape and that no one can copy that shape as it is registered. Under this trademarks Apple registered 3 patent and trademark under United State office of trademark and patent That means Apple's already convinced the USPTO these elements are distinctive and protectable. Those 3 registered patent are...

U.S. Registration No. 3,470,983 is for the overall design of the product, including the rectangular shape, the rounded corners, the silver edges, the black face, and the display of sixteen colorful icons.

U.S. Registration No. 3,457,218 is for the configuration of a rectangular handheld mobile digital electronic device with rounded corners.

U.S. Registration No. 3,475,327 is for a rectangular handheld mobile digital electronic device with a gray rectangular portion in the center, a black band above and below the gray rectangle and on the curved corners, and a silver outer border and side.

As we can see in picture that samsung have also introduced almost the same design which eventually infringement the design of the phone which is registered and it has actually made consumer confused regarding buying of product they think both are same phones. This is the second claim that apple have over samsung.

3) Federal trademark infringement under 15 U.S.C. § 1114

Apple registered trademark on several IOS system icon and TouchWiz includes six icon with exactly the same icons.

The registered trademarks are as follows...

No. 3,889,642 is the iOS messaging app icon. No. 3,886,200 is the iOS photos app icon. No. 3,889,685 is the iOS settings app icon. No. 3,886,169 is the iOS notes app icon. No. 3,886,197 is the iOS contacts icon. Pending No. 85/041,463 is the iTunes icon, which is

a riff on U.S. Registration No.2,935,038, the desktop iTunes logo.

As we can see in above picture it is almost the same so Apple claim that samsung have million of option for a phone icon then why samsung instead chose a white handset resting at an angle on a green gradient background. This end up the option of differentiation and in most cases it is impossible to ignore.

4) Patent 5,946,647: “System and method for performing an action on a structure in computer-generated data”

This patent covers iOS’s ability to recognize certain text strings and automatically add links. For example, if you get a text message that says “Meet me for a drink tonight,” the word “tonight” will automatically have a link applied. Tapping the link will prompt you to add a new entry to your calendar.

5) Patent 6,847,959: “Universal interface for retrieval of information in a computer system, a patent that Apple claims is central to universal search”

Apple’s universal search patent covers technology that allows the device to simultaneously search local content as well as content on the Internet.

6)Patent 7,761,414: “Synchronous data synchronization among devices”

This patent covers the way that Apple’s iPhone and iPad synchronizes data in the background while users continue to add new data.

7)Patent 8,046,721: “Unlocking a device by performing gestures on an unlock image”

Every iOS device user on the planet is very familiar with this technology, which has been the first thing users see when they pick up an iOS device since the first iPhone debuted in 2007. The patent describes a system whereby a device will be unlocked by performing a gesture over a lock screen image.

This also include the most important claim that apple did was that Samsung have introduced Nexus phone with the The "slide-to-unlock" feature in which you unlock your touch-screen phone by sliding your finger across the screen. However, apply claim that they have introduced it earlier and Samsung have copied this feature. After this claim was justified and approved by court Samsung paid damages and ended this feature in their phones.

These are some of the claims that Apple did against Samsung and Sued them. They did this because they wants Samsung to pay up for the infringements in the past and stop infringing in the future. Specifically, Apple's asking the court to permanently forbid Samsung and its various divisions and suppliers from ever infringing Apple's claimed Intellectual property again. The case was filled in California and Germany by Apple and Apple won the case in California but it was not the end, in response to it Samsung was filled case against Apple in South korea and Japan where Samsung won. The cases were filled in Nine countries with almost 50 lawsuit around the globe with billions of dollars claimed between them.

This case is the best to illustrate the intellectual property law that how does these patent, trademark and rights help us and are important for our goods and services. It develop a proactive approach toward protecting our intellectual property that is it make sure existing features are covered. Second Watch and analyze competitor’s filings and file blocking patents, as appropriate.