In this series we discuss the opportunities, trends and challenges that Brodies' experts experience when working internationally.

In this episode, Brodies' experts Iain Rutherford and Ross Campbell discuss the considerations when faced with an intellectual property dispute both in the UK and internationally. From what is classed as intellectual property to the key considerations in different jurisdictions, they explain how to navigate, what can be, a complex situation.

Listen to our previous podcasts on Apple Podcasts, Spotify or wherever you usually listen to your podcasts by searching for "Podcasts by Brodies".

The information in this podcast was correct at the time of recording. The podcast and its content is for general information purposes only and should not be regarded as legal advice. This episode was recorded on 27/01/2023.

David Lee, Podcast host

David Lee hosts Podcasts by Brodies. David is an experienced journalist, writer and broadcaster and he is also the host of 'The Case Files' and 'What do I do if...' podcasts by Brodies.

David Lee, Podcast host]


00:00:05 David Lee, Host

Hello and welcome to ‘Podcasts by Brodies’. My name is David Lee, and in this series we will be discussing the opportunities, trends and challenges that Brodies experts experience when working in areas of law with an internationaldimension.

Brodies lawyers are globally connected experts in their fields, they advise clients across all key sectors, from real estate to education, energy, food and drink, life sciences and personal and family matters, to name just a few.

The latest episode focuses on intellectual property, or IP, and we're discussing managing intellectual property disputes in the UK and beyond.

I'm joined for this podcast by two Brodies specialists, partner, Iain Rutherford, who is head of the IP disputes team, and senior associate, Ross Campbell, welcome to you both.

If I can start with you Iain, let's just set the context to begin with, what do we mean, in simple terms, by intellectual property and can you give us some tangible examples of what intellectual property is or might be?

00:01:13 Iain Rutherford, Partner

Thank you for starting with a straightforward question!

When people think about intellectual property, quite often, what they start off by thinking about are things like copyrightpatents and trademarks. At a very basic level, copyrightis effectively a term that's used to describe rights that creators have over literary and artistic works, and will typically cover things like books, music,but can extend to computer programmes, databases, maps and technical drawings.

Patents are an exclusive right that are granted to protect inventions and generally provide a patent owner with the right to decide the manner in which that invention can be used by other people, and trademarks are a sign that's capable of distinguishing the goods or services from one enterprise to those of other enterprises, so it brings in brand protection.

There are other, slightly more niche areas that would also fall within the definition of IP. So designs and registered design rights, geographical indications, areas of origin are signs that are used on goods that have a specific geographical origin and also trade secrets and confidential information. All of this would fall within the ambit of intellectual property, and all can have really significant impacts for businesses if there is any infringementor breach of materials and things which are hugely significant and of great value to their businesses.

00:02:50 David Lee, Host

Ross, why is intellectual property important and who is it important to?

00:03:03 Ross Campbell, Senior Associate

First, in terms of who it's important to, I think the answer to that is everyone. Every business has intellectual property and often its most valuable and important assets will be IP.

I think a business' name and its brand are very obviously important to them, as are processes, its designs, any artwork it might have, software inventions and just keeping certain information confidential, it's something that's obviously key. All these things are fundamental to the way in which many organisations do business, and whether it's something that used to set themselves apart from the competitors or simply to establish their brand identity, it's undoubtedly important for them to protect that IP and ensure that others are unable to benefit from it unlawfully.

I think for that reason, businesses are generally prepared to take whatever action is required to protectthose interests.

00:03:57 David Lee, Host

Thanks Ross, just back to you Iain, the title of this podcast is about managing intellectual property disputes, so in broad terms, why do intellectual property disputes arise? Who typically are the parties in a dispute?

00:04:12 Iain Rutherford, Partner

It's fair to say there's a broad spectrum, given the wide nature of things that are covered by the definition of intellectual property. So you can vary from an attack on a company by a disenfranchised former employee who's deliberately taken confidential information - and therefore the steps that you're then taking to try and recover that confidential information - to the more typical type of IP dispute, where there is a genuine misunderstanding or dispute between the parties about the similarity of particular brands.

That's what you will generally see in trademark disputes where the question for the court is, is there a confusing similarity between these two particular brands? Often if it's got to the stage of a judge having to decide it, that's because it is not clear cut as to whether or not there genuinely is a confusing similarity between these brands. That's where it tends to get quite interesting with judges having to make that assessment about whether or not consumers would genuinely be confused into believing that a product that was marketed under a particular brand may appear as if it was actually the brand belonging to the competitor.

00:05:32 David Lee, Host

Ross, if you do find yourself embroiled in an IP dispute of any kind, where do you start?

00:05:42 Ross Campbell, Senior Associate

I think to some degree it will depend upon the nature of the dispute, but I think one of the key points generally is that it is good to try to address these issues early if you can and if someone's infringing your IP, the onus really is on you to do something about it, and the quicker that you're able to shut that down, the better chance you have of minimising the damage to your business and preventing the infringing party from continuing to use your IP.

The most effective remedy, and the one which is generally sought, is to try to stop the infringementwhich is more straightforward than pursuing financial claims for damages at a later stage. As a result, often IP disputes will resolve at an interim stage, it's fairly unusual to get to a full trial. If an interim order is obtained, which prevents the infringementpending the final determination of the matter, it will often be what's needed to move the case towards a resolution.

I think there are many matters that are capable of resolution without the need to go through a full court process. Sometimes infringing the IP is legitimately accidental and the infringing party will take appropriate action when notified, whether that's ceasing the infringing activity, like changing their logo, obtaining the license they need - in the case of using particular software or playing music in public - or even just agreeing to make adjustments or limitations to the use of it going forward, such as the removal of a word from a company's name.

There are, however, many cases in which parties just need to accept that they are in for a battle, and I think that obtaining interim orders and getting in there early can allow a party to land quite a key and often decisive early blow.

00:07:28 Iain Rutherford, Partner

I think that's an important point that Ross makes there actually, that it is the temptation is often to think that in an IP dispute that it's going to be very much, one side is right and the other side is wrong. But you don't see - because they're resolved behind closed doors effectively - the amount of cases that are resolved just by agreement. And that agreement can be on the basis that there is some kind of coexistence, you know some limited use of a trademark or operating in different markets. There's a lot of that goes on behind the scenes. So it's not a straightforward right or wrong, and that's often not the outcome that would suit either party best to take the risk of a court finding.

What you will find is that when the cease and desist letter is issued, there is a process of negotiation and that's obviously the best way of finding a compromise position that may work well for both parties, actually quite beneficial commercial relationships can be built up off the back of what appears to be quite an acrimonious starting point.

00:08:30 David Lee, Host

Do you find that passions run quite high sometimes because somebody's actually defending something that they've created, either, as you say, you've written something, they've recorded something, they've created what they see as a really distinctive brand, there must be passions running high at times.

00:08:48 Iain Rutherford, Partner

I think that's absolutely right, because I think the starting point often - if it's a brand issue or a trademark issue or a passing off - is that a brand owner feels that someone is trying to take advantage of their brand. But even if you look at it in a copyrightsphere in relation to original artistic works, there's a personal element to that. So absolutely, you're going to see that it will inflame passions and I think often you're finding that parties are a bit more aggrieved for exactly the reason you've identified, David, that it's pushing particular buttons and therefore trying to bring people back round to seeing that there may be an alternative perspective on the other side. And therefore that there may well be scope for some kind of agreement is often the role that we find ourselves in.

00:09:41 David Lee, Host

Obviously copyrightand IP disputes don't stop at borders, so what's the regime in Scotland and what happens if the dispute goes further afield? Let's start with just going into the UK, what are the differences?

00:10:01 Ross Campbell, Senior Associate

In terms of in Scotland, one of the particular advantages that we have here is that I talked about obtaining interim order. It's relatively quick and easy and less expensive to obtain an interim interdict in Scotland, and if you're looking to try to put a stop to the infringing activity, then obtaining a quick and easy interim interdict can be so effective in doing that.

In Scotland, an interim interdict can be granted, often with limited or no advance notice being given to the infringing party. Often there will be an expectation that you should at least be sending a cease and desist letter that will give them an opportunity to stop what they're doing before you go to court, but there are circumstances in which the courts are sometimes prepared to grant an interim interdict without the infringing party being given a chance to be heard or even potentially being aware the proceedings have been raised. So the infringing party will then receive a court order requiring them to cease the infringing activity immediately, which all of a sudden puts them on the back foot, meaning that obtaining an order like that can be very valuable tool.

I think looking at it from the other side, another advantage to the Scottish system, and something that's available there, is a caveat. That's a step that's taken by many businesses as a protective measure against such orders being granted. It basically means that that if you've launched a caveat and someone seeks an interim order against you, you’ll be notified about that and given a chance to be heard. It's a step you can take if you think you might be heading towards a dispute but it's also something that many businesses do as a matter of course. It's something that might happen long before there's ever any indication of a dispute but it means that in the event that something like that does happen, you have an opportunity to be heard.

I think it goes back to what we said about the fact that often there can be innocent infringementor it's not clear cut and something you've done is not obviously infringing or it's certainly subject to dispute - if you have a chance to have your side heard, I think that's an important thing to have, given that if you're receiving a court order and the first that you're hearing about it is when the order has already been granted, then it could be quite disruptive to your business and suddenly, as I said, you're on the back foot and having to take steps to try and reverse the process and have the interdictremoved.

00:12:31 David Lee, Host

There's quite a lot of stuff on the Brodies website that describes Scotland as a friendly and efficient venue to resolve disputes which some may agree with, some may not in a broader sense.

Obviously we've got designated IP judges and as you've laid down there, Ross, you know some specific rules as well.

What if we do go further afield, Iain, what about the rest of the UK? Do you approach IP disputes any differently beyond the Scottish border?

00:12:59 Iain Rutherford, Partner

The processing procedure is slightly different, as Ross has identified, there's no caveat system in England, which generally means that there is more of an expectation that there will be some kind of pre- litigation contact.

I should just say in relation to caveats, I would generally say to any business that's doing business in Scotland, you should be lodging caveats because they're comfortably the best value thing that you can obtain from a lawyer in Scotland and they just need to be renewed on an annual basis and it would just give you that protection. But that system doesn't exist in England so therefore there is a bit more of pre-litigation engagement.

There's a general perception that litigating in England is more expensive than Scotland. There's more paper involved, a lot of actions are more front loaded and I think that's true. However, in relation to intellectual property disputes, there is an alternative option in England through a body called IPEC, the Intellectual Property and Enterprise Court, and that's deliberately designed to have more efficient case management of IP disputes and it also has a significant cost cap. The idea there is that litigants shouldn't be put off by the prospect of a significant adverse cost award against them.

So in a way, litigating an IPECgives us similar approach to what you might find in Scotland. You can go fairly quickly for injunctive relief through IPEC, but it is a judgement call - do you want that cost protection? Equally, if you have the deeper pockets, do you want to take the risk that you're not going to get your costs back or certainly not the full amount of your costs back? There's also an overall liability cap, around £500,000, so if it is a higher value dispute there would be reasons that you wouldn't go down that more efficient route. But it has certainly been successful and gives an alternative option in England where, as I say, the perception is generally that litigating is a much more involved, expensive and time-consuming process.

00:14:57 David Lee, Host

If an IP dispute has a Scottish element and a wider UK element to it, have you got the choice where you might begin a dispute process?

00:15:11 Iain Rutherford, Partner

You’ve got a choice. If there is infringement in Scotland and England, then the only way to stop that infringement UK wide would be to raise proceedings in both jurisdictions. That often requires a good degree of coordination, because what you wouldn't want to do - particularly say there was a situation with confidential information - is effectively tip the infringer off by going after them in one jurisdiction and then laterally going in the other. So there's often a degree of coordination required.

But it all depends on the situation, because it may well be that the process of just successfully obtaining an order in one jurisdiction would be enough to put the infringer off and not to take the risk of potential contempt of court in any of the jurisdictions but for the belt and braces approach, that's where we've often come in on the Scottish side, you would be looking to launch in one, two, three, four jurisdictions all at the same time to shut down that infringement on a UK wide or a global basis.

00:16:10 David Lee, Host

Just to move slightly further afield, Ross, what about IP disputes in the UK? How do they fit in with what we've just heard about the Scottish system and the UK system?

00:16:24 Ross Campbell, Senior Associate

One of the main points there is that with the EU there are so many different jurisdictions and that brings with it many different processes that apply in those different jurisdictions. So, inevitably, there will be a need to run disputes differently depending on where you are and that's why we at Brodieswork with our contact firms in different jurisdictions across Europe to ensure that clients are getting the best local expert advice, so that they know the best steps to take wherever their dispute happens to be.

There are some EU wide IP rights and laws and then we have the likes of the EU Intellectual Property Office for the registration of EU Trademarks and design rights and the European Patent Office for Patents.

We also have the unitary patent system which will soon be with us - that's going to represent a huge change to the patent system in Europe, but whilst you have these EU wide measures there is still definitely going to be differences between the different systems.

We talked about the differences between Scotland and England, but there are so many different jurisdictions across the EU that do things differently. So when we're approaching disputes in the EU, one of the key messages is it's important to be alive to this and that it may result in different ways of doing things, different remedies being sought, varying levels of costs and potentially different outcomes.

00:17:51 David Lee, Host

Is there a really bad place in Europe to get involved in an IP dispute where the system is very complicated and very costly? Is there any way you should try and avoid at all costs?

00:18:02 Iain Rutherford, Partner

Italy gets a bad reputation, just in terms of the speed of the process because there used to be a thing in an arbitration context where proceedings were deliberately launched in Italy so that they would get kind of tied up, but that prevented people from raising disputes anywhere else.

A lot of other European jurisdictions - we do quite a lot in France, Germany and the Netherlands - you will find that - again back to Ross's point about injunctive relief - there's a lot of parallels there in terms of that early stage which is often the decisive factor in IP dispute. There are a lot of parallels there between, Germany, The Netherlands, France, in terms of the ability to obtain injunctive relief and the speed with which you can obtain injunctive relief.

00:18:47 David Lee, Host

Iain, you talked earlier on about a lot of people think it's either right or wrong here and clearly it's not, there's a lot of grey areas in IP disputes.

What are the typical complications, Ross, that can arise? Where do things start to get kind of tricky when you're going into an IP dispute?

00:19:10 Ross Campbell, Senior Associate

As we said, sometimes the infringement will be straightforward, but often that's just not the case.

If you're talking about playing copyrighted music without relevant license or using the same name as someone else, then you're dealing with something relatively straightforward. But when you're starting to get into things like patents and looking at inventions or complicated trademarks, or even some sort of copyright infringement things can get very technical.

Complications can arise when you're starting to look at the technical nature of some of these and I think that when you're dealing with that from a disputes perspective, I think it's having the right people on board with the technical knowledge that can advise clients appropriately in that sense and I think it can definitely complicate things when you do have differing opinions as to those technicalities.

00:20:09 David Lee, Host

Iain, we've travelled into UK, we've travelled into the EU, what about what about the US? Again, are our IP disputes dealt with differently there?

Why is it important to understand the differences between the different jurisdictions and how you approach disputes that do cross numerous boundaries?

00:20:31 Iain Rutherford, Partner

As Ross has said in relation to Europe, if we're managing a US dispute, we'll be working with local US firms. But we have managed quite a few of them and I think probably the main difference that stands out to me, is that it is undoubtedly harder to obtain that early injunctive relief and it takes longer in the US than we would typically expect in the UK.

The tests for obtaining injunctive relief in the US - you have to meet a higher bar than you do in the UK - so quite often you're having to accept that you might be in for a long haul. You might not get your temporary restraining order in the first place, and therefore you're looking at an IP action being more of a damages action which would not be the typical starting point in the UK.

The other thing you have to be alive to in the US, is that different states can have quite different approaches just in terms of the judicial attitude to protecting IP.

It is absolutely that point about obtaining the right advice and speaking to the right people who properly understand exactly, if you have a choice, how to pick these things to make sure that you're getting things off to the best start.

That's really the point I was making, in terms of intra UK - it's unlikely that if you've got an issue that's arising in a variety of places that you would look to try and launch all of these actions all at once. So I think in some respects, picking the right jurisdiction where you feel that your case is strongest to send that clear message at the beginning, is the right way to go about it, but the only way you're going be able to make that assessment is by weighing up the expert advice from the various different jurisdictions.

We do a lot of - at that early stage - just pulling… what are the options in the US? What are the options in Germany? What were the options in the Netherlands? How does that fit in? Therefore, if we are going to launch the big litigation here, where are we best to do that? Where do we have the strongest position, both in terms of the evidence, but also in terms of the likely approach that the court might take to this particular dispute?

I think you've seen one of the best examples, these different approaches and different jurisdictions is the Apple/Samsung patent litigations that were litigations all over Europe, the UK and the US. What was fascinating was essentially a lot of the legal issues were similar, but that the outcomes and the speed with which those outcomes were arrived at in these different jurisdictions were fundamentally different. There was success in the US, but failure in the UK, and all on similar grounds. You would assume a degree of similarity but just because of the different approaches that are taken in these different jurisdictions, you're seeing materially different outcomes and also hugely significant differences in terms of the amounts of money that were spent on these things.

00:23:30 David Lee, Host

Presumably that means the parties can move on in certain jurisdictions more quickly than they can in others?

00:23:38 Iain Rutherford, Partner

Exactly right.

00:23:40 David Lee, Host

Which is quite challenging in an era of global technology, I guess?

00:23:45 Iain Rutherford, Partner

Absolutely. We're not quite at the stage of having a global court, who can issue decisions and all of these things.

00:23:53 David Lee, Host

Ross, let's bring it back to the clients, it's quite a complex area. Some clients might be a little bit ‘Oh my goodness, what is what is going on here? Where do I start?’. I'm guessing one of the key things, and maybe this is an obvious thing to say, but it's get advice early.

00:24:12 Ross Campbell, Senior Associate

Yes, as we've said, some IP rights are really valuable and businesses will want to do what they can to protect them. I think that getting expert advice on that and being able to know where you stand, and to decide where to take the steps and what steps to take are really important to protecting the rights.

I think the other point is, as I said earlier, acting quickly can often make such a difference, particularly if you're looking to stop the infringing activity rather than having to go down the route of looking to recover any losses that you suffered, and in order to put you in the best place to do that, seeking expert advice at an early stage is really what you want to be doing.

Obviously, IP is something that many businesses operating globally have and they have operating in so many different jurisdictions, it means that there's potential infringementin so many different places. As Iain said, getting expert advice from people who are placed in those different places, it's something that you'd want to be considering. As we said, one of the great things for us at Brodiesis that we do have such a good network of global contacts and we're well placed to work with those contacts all across the world. In order to ensure the effective management of an IP dispute, but more importantly, pushing it towards a resolution.

00:25:38 David Lee, Host

Iain, one thing we've not talked about too much is avoiding costly and long running disputes in the first place. What are your broad tips to clients to try and avoid getting embroiled in an IP dispute?

00:25:54 Iain Rutherford, Partner

I think a lot of it is to do with what steps you take to proactively protect your IP. So a lot of the things that we've been talking about, there are processes of early registration. If you're looking at patents, and if you're looking at trademarks or even in design rights as well, if there is something that you're developing or if you have a brand that is valuable, then what you should be doing is speaking to a trademark or patent attorney at an early stage to see whether or not what you have is registrable. Because that will give you that degree of protection and what you don't want is somebody else getting in there ahead of you.

It's also really important when you're starting up in business, to run searches just to check whether or not a brand that you're intending to develop is one that may already be registered to somebody else, because you want to make sure that you're free to use any particular branding that you would be looking to use.

So, it's part of the start-up process, part of just the way that you run the business, just thinking about what IP you have and what is valuable and taking the steps to protect it. Even in relation to confidential information and trade secret, these things are only confidential to the extent that you as a business take steps to keep them confidential, so you're not going to be able to turn to a court further down the line and say, "that's confidential information," when it was shared even freely within the business. So you have to kind of register or try and keep track. Think about how you would demonstrate that these things are confidential and to the extent the intellectual property is registerable. Take those steps and take those steps at an early stage so that you're not getting into some kind of dispute at a bad time for you as a business.

00:27:41 David Lee, Host

Finally, if you do become embroiled in an IP dispute, beyond the basic advice, what's your broad advice to clients who get embroiled in a really challenging, thorny IP dispute?

00:28:03 Iain Rutherford, Partner

Remember that the court is there and particularly in an IP dispute the courtis there and it is a very useful weapon.

There is quite often a reticence sometimes, and almost a fear of pushing that button and going to court, but particularly in IP context, usually what you're looking for is your remedy - something that a court could grant you, certainly in the UK. So don't hold off on pushing the button on that final stage, because that could be a real game changer in terms of where you're going to stand in that dispute.

So take the advice, assess the options, but don't wait around. If you've been aware of somebody infringing your IP and you've sat on it, not done anything about it for a while - that in itself can be a deciding factor in whether or not you're actually granted interim relief because there needs to be that degree of urgency. These are not ones to sit on or mull over for a huge amount of time.

Assess the options, understand the options, but then if you're left with no real alternative, do get into court and get into court quickly.

00:29:13 David Lee, Host

Great stuff. Thank you very much, Iain, and thank you Ross for your tremendous insights today. Listen now for more episodes in this ‘Podcast by Brodies’ series with an international dimension.

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Ross Campbell

Senior Associate