Copying from the internet is a contentious issue, which is leading to an increasing number of intellectual property court cases. Jonathan Cornthwaite of Wedlake Bell Solicitors looks at recent developments in copyright, domain names and trademarks.

Intellectual property is set to become the asset of the 21st century. And the internet is the most remarkable information technology yet devised by mankind.

Put these two great intangibles together, and you have a combination of staggering power.

But you also have a potential threat of epic proportions. Intellectual property is, at bottom, about stopping people from copying. Yet the internet is the world's greatest copying machine. It enables material to be reproduced instantaneously, automatically and ubiquitously.

So the ways in which the law enables rights-holders to restrain this unauthorized reproduction are crucial. This article reviews some recent legal developments in three relevant areas: copyright, domain names, and trademarks.

Illegal file-swapping is an urgent copyright issue

Illegal file-swapping is one of the most topical and pressing legal issues relating to copyright online, and there have been a series of important developments in recent months.

Following successful legal action in the USA and Australia for copyright infringement against companies that provide peer-to-peer (P2P) file sharing, the British Phonographic Industry (the UK record industry's trade association) launched formal legal proceedings last summer against 'serial uploaders', individuals who, between them, had uploaded over 8,000 songs to the internet for others to download.

And shortly thereafter it made available a free software programme called Digital File Check that enables users to block file-sharing software and remove illegally copied files.

In November 2005 an important High Court victory for rights-holders was won in the case of Polydor Limited et al v. Brown et al [2005] EWHC 3191.

The defendants had engaged in the practice of making available songs for download using P2P file-share programs, and Polydor (together with a number of other record companies) sued for copyright infringement.

Justice Collins granted summary judgment, on the basis that the defendants had connected a computer to the internet where the computer was running P2P software, and had also placed music files containing copies of the claimants' copyright works in a shared directory.

This, he held, constituted copyright infringement under sections 16 and 20 of the Copyright, Designs and Patents Act 1988 ("CDPA 88").

In the meantime the Federation Against Software Theft (FAST) had been undertaking a covert 12-month investigation called Operation Tracker into illegal software-sharing online.

In January of this year it applied to the High Court for an order that ten ISPs (including BT, Telewest, Tiscali and NTL) disclose the details of customers suspected of illegal file-sharing.

The identification was necessary because most file-sharers use false names and addresses. FAST's application was successful, and on 30 January 2006 the ISPs were ordered to hand over the details of some 150 suspected file sharers.

In the same month the BPI announced that it had obtained summary judgement in the High Court against individuals who had infringed copyright by making songs available for download using P2P file-sharing programs. The defendants were ordered to stop their file-sharing activities, and to pay thousands of pounds in damages.

These and other actions are being followed with great attention by those concerned about online copyright infringement. It will be interesting to see whether rights-holders confine themselves the civil remedies, or whether they choose to rely also on the criminal offences under CDPA 88.

For example, it is a criminal offence under section 107(2A)(b) of CDPA 88 for an individual to communicate a copyright work to the public (other than in the course of a business) to such an extent as to effect prejudicially the owner of the copyright where the individual has knowledge, or has reason to believe, that by doing so he is infringing the copyright.

Use of domain names was found to infringe trademarks

Two recent High Court decisions have held that domain names registered by defendants have constituted trademark infringement and passing off.

The case of Global Projects Management Limited v. Citigroup Inc et al [2005] EWHC 2663 involved allegations by Citigroup that the unauthorized registration by Global Projects Management Limited (GPM) of the domain name infringed its registered trademarks and constituted passing off.

Even though GPM had not tried to sell the domain name to Citigroup, Mr. Justice Park had little difficulty in finding that the mere registration and maintenance in force of a domain name which led people to think that its registration was linked to another person was enough to make it a potential 'instrument of fraud'.

Following the well-known decision in British Telecommunications plc v. One in a Million plc [1999] FSR1, he granted summary judgment based on passing off. For good measure he also found that trademark infringement had occurred, and held that one of GPM's directors was also liable.

More recently, Tesco has also been successful in High Court proceedings involving domain names.

The factual basis of the case of Tesco Stores Limited v. Elogicom Limited et al [2006] EWHC 403, in which the author's firm represented Tesco, was rather more complex than that of GPM v. Citigroup.

It involved an arrangement whereby the defendants registered over 20 domain names featuring the word 'tesco', pursuant to which online purchases made by consumers from Tesco websites triggered commission to be paid by Tesco to the defendants via an intermediary, Trade Doubler AB, with whom Tesco had a website affiliation agreement.

The judge held in March 2006 that by registering and making its domain names available as 'pathways on the internet to Tesco websites’ in order to earn commission, Elogicom had infringed Tesco's trademarks and passed off.

And he found that Elogicom's refusal to transfer its domain names to Tesco created a risk of future violation of Tesco's trade mark rights, and granted Tesco the injunction that it sought.

Trademark delimitation agreements must be drafted carefully

Most readers will be aware of iTunes, the electronic store launched by Apple Computer (Computer) in 2003 whereby, in return for a relatively modest sum, music content can be legitimately downloaded to any PC capable of running the iTunes software with a view to playing the content back on one's PC or iPod.

This service has recently been the subject of major High Court litigation launched against Computer by Apple Corps Limited (Corps), the well-known record company formed by The Beatles.

Following a previous trademark court case settled in 1991, Corps and Computer had entered into a trademark limitation agreement that sought to define the parties' respective exclusive fields of use for their respective brands and logos.
Corps now alleged that Computer's use of its Apple brands in connection with the operation of the iTunes music store represented a breach of the delimitation agreement.

For example, Computer's Apple logo appeared on the screen when a user accessed the iTune's music store, and remained visible at all times except when a customer was downloading a track.

But in May 2006 Mr. Justice Mann dismissed the claim. He held that the use by Computer of its Apple logo did not breach the delimitation agreement, since the use was in relation to Computer's music store rather than in relation to music content falling within Corps' reserved field of use.

The case (Apple Corps Limited v Apple Computer Inc. [2006] EWHC 996) demonstrates the difficulty and importance of drafting trademark delimitation agreements very carefully, particularly when they apply to evolving online technology.

More cases are expected

More cases in the English courts will inevitably follow in this crucial area, as the interplay between intellectual property rights and the internet is thrashed out in litigation.

In the meantime the protection of intellectual property online is one of the principal areas being studied by the Gowers Review, which is the biggest governmental review of intellectual property for years, and its recommendations are expected this autumn.

Jonathan Cornthwaite is partner, head of intellectual property law at Wedlake Bell.
Wedlake Bell Solicitors website