Fair Use and the Future Explored: Chip N' Dale: Rescue Rangers Movie

Yesterday, my kids and I watched the new movie, Chip N’ Dale:Rescue Rangers.  This is probably the funniest Intellectual Property law related movie I’ve seen.  Disney takes on IP Law doctrine and policy in a very humorous way.  As an exercise in understanding U.S. IP law, the facts the movie raises are very nice.  Here’s a few examples: ET v. Batman; Ugly Sonic; Chippendales; and on and on.  They also take on: a glimpse at the future of augmented reality; artificial intelligence and creativity; culture wars; Hollywood nostalgia reboots (talk about bootlegging); and the future of counterfeiting. There are so many references my brain almost exploded from overload. As a tip, be sure to take in the background materials, e.g., advertisements. Lol. They take some pretty nice shots at competitors, but I wonder what’s going to come back.  Interestingly, the Pirates of the Caribbean ride at Disneyland has been closed for “refurbishment.”  [In full disclosure, I am a very big fan of Disney and may be extremely biased.]

Guest Post: Professor Denoncourt's Event Report -- Intellectual property: meeting global business and technology challenges

IP Finance is very happy to offer our readers this guest post by Nottingham Law School professor Janice Denoncourt summarizing the high points of a Montreal Council on Foreign Relations event featuring Francis Gurry, outgoing Director General of WIPO.  

On 15 September 2020 the Montreal Council on Foreign Relations (CORIM) organised a fascinating 30 minute webinar with Francis Gurry, Director General, WIPO.  The event is part of CORIM’s Business Series Online accessible for a small fee of CAD $30.  “Who will finance Innovation?”  is the strapline of WIPO’s Global Innovation Index 2020 https://www.wipo.int/global_innovation_index/en/2020/.  Canada currently ranks 17th overall behind Japan and Ireland, retaining its position from last year, but well out of the top 10 where it aspires to be.

From Geneva, Gurry discussed emerging global business and technology challenges with moderator, Lally Rementilla.  Lally is well-known in the Canadian intellectual property (IP) backed finance world.  In July 2020 she was appointed Managing Partner, IP-Backed-Finance for BDC Capital (www.bdc.ca).      

By way of background, the Business Development Bank for Canada (BDC, French: Banque de Développement du Canada) is Canada’s bank for entrepreneurs.  It is wholly owned by the Government of Canada.    Jérôme Nycz, executive vice president at BDC Capital stated, “Our goal…is to make Canada a leader in the IP space.”  BDC Capital, the bank’s investment arm, has created a new CAD $160 million intellectual property (IP) development financing fund to support IP-rich companies who seek to commercialize their IP, increase their competitiveness and expand globally.  This BDC’s IP finance initiative is a positive reflection on Canada’s comprehensive 2018 National IP Strategy https://ic.gc.ca/eic/site/108.nsf/eng/home. 

The pair discussed several broad topics and set out below are the highlights.  

Rementilla asked for Gurry’s perspective on the role of IP rights in the new world order.  Gurry noted that a number of tendencies have been accelerated by Covid-19 virus and pandemic, not to mention worrisome trade wars and cyberwarfare, resulting in further complexity in the IP world.  Nevertheless, despite the gloom and doom ‘IP is a vector for collaboration’ said Gurry.  Indeed, 2.1% of the world’s global gross domestic product (GDP) is tied to research and development.  Gurry hopes that despite the decline in foreign direct investment, international collaboration in innovation will continue.  He cited the example of innovation hotspot Silicon Valley, where the majority of inventors are foreign.  

A key geopolitical change of course is the rise of Asia and in particular the People’s Republic of China (PRC) as a patent powerhouse.  Gurry noted that the PRC is buoyed by its national focus on IP leading to it overtaking the United States in filing patents overseas.  Indeed, I would add that the PRC announced earlier this year that it is preparing the outline for its second National IP strategy for the 2021-2013 period.  According to Gurry, a successful national IP strategy involves a focus ‘from the top’ on science, technology and innovation and further that ‘success comes when there is an awareness at the very top of the importance of protecting a nation’s competition advantage’. 

Turning to finance for IP-rich tech start-ups, Gurry surmised that ‘With a start-up you are basically backing an intangible asset’.  Further, as author of Intellectual Property, Finance and Corporate Governance (2018) I was delighted to hear that Gurry supports re-thinking the gaps in traditional accounting to better support valuation intangible IP rights.  In December 2019, I had the pleasure of attending a meeting with the BDC’s C-suite in Montreal alongside Lally and other IP experts.  I shared my views and IP in the boardroom research to raise awareness of the potential of IP-backed financing, which has now come to fruition.  

Gurry acknowledges that there are changing perceptions about IP rights.  However, he cautioned that the alternative, a scenario where no one uses IP rights, could lead to a lack of transparency.  The publication of patent information is ‘the most systematic record of humanity’s technology’, he said.   

In response to Professor Isolde Gendreau’s (Université de Montreal, Faculté de Droit) question regarding the potential for supra-national enforcement of IP rights, Gurry recognized that counterfeiting and piracy are now global issues.  These behaviors affect both developed and developing countries alike and require a global response.  Thus, WIPO’s focus is on ‘building respect for IP rights, rather than putting teenagers in jail’.  WIPO will look to ‘build capacity to take action internationally’. 

The CORIM webinar, ‘Intellectual property: meeting global business and technology challenges’ may have flown under the radar for many outside Canada.  However, it is a timely reminder of Gurry’s wisdom and contribution to the global IP landscape as WIPO’s Director-General since 2008.  His term will end this month. Join me in wishing him every success in the future. 

Dr Janice Denoncourt

Associate Professor

Nottingham Law School

Nottingham Trent University

The war on counterfeits: how much would you spend?

Quoted in a press release today, the UK's Minister of State for Intellectual Property David Lammy has emphasised the Government’s commitment to fighting counterfeiting and piracy with the launch of guidance designed to highlight the Proceeds of Crime Act 2002.

Right: at present the sums lost annually to counterfeits dwarf the sums spent in reducing or recouping that loss.

The guidance leaflet

" ... seeks to raise consumer and market trader awareness of IP crime as well as warning would-be buyers and traders of counterfeit goods of the real cost – not only in terms of economic damage but also the risks to health and safety".

Says David Lammy:

"Counterfeiting and piracy rob our economy of millions of pounds every year - intellectual property crime is worth £1.3 billion in the UK with £900 million of this flowing to organised crime. It affects people in their day-to-day lives presenting not just bad value for money but also posing a real risk to public safety.

"Legislation alone will not combat counterfeiting and piracy. Laws must be fit for purpose but effective enforcement is key. The Proceeds of Crime leaflet sends a clear message that we are all serious about tackling this problem."

The press release adds that developments in technology and communications have led to increases in intellectual property crime over the past decade, with estimates that the international trade in fake goods is worth around $200 billion - higher than the GDP of more than 150 countries.

These figures - an annual loss of £1.3 billion to the UK, and $200 billion worldwide - may be right or wrong, but it is impossible to determine them with any accuracy. Figures that can be determined with some accuracy, however, are the sums of money that are spent by the public sector specifically for the purpose of reducing or recouping this loss. Does anyone have such figures, or at least an estimate of them? Given the loss to the revenue of vast sums in value-added tax , corporation tax and income tax which results from trade in counterfeits and pirate product, it might be expected that the UK government, nationally and locally, would get a decent return on its investment if it spent something like £130 million a year on tackling it -- rather than leaving IP owners to struggle on their own initiative and at their own expense.

EBAY fined £31million for counterfeits

It is not often that an IP related case steals the front page of London's popular free daily Metro paper but Ebay have done just and scooped headlines across the world. The well known auction site eBay has been fined £31million for selling fake Louis Vuitton goods online. The French fashion house took eBay to court for selling a range of fake luxury bags, clothes and perfumes. A Paris court ordered the internet giant to pay damages to Louis Vuitton and barred eBay from selling perfume brands Christian Dior, Kenzo, Givenchy and Guerlain, also owned by Luxury goods firm Louis Vuitton Moet Hennessy. eBay bosses have apparently said that they plan to lodge an appeal. The court also warned eBay that they face a daily £40,000 fine if they run adverts for the perfume and cosmetic brands. French courts have long been in favour of brand holder's rights and a number of brand holders have used the French system to enforce their trade marks and related IP but none it appears on this scale, not only for the potential legal effect of the decision across world but also for the amount of damages awarded. If anyone has a copy of the decision (in English preferably) please send it here.

Damages calculation totalling $4.3 million

Karin Segall of Foley & Lardner LLP writing for World Trademark Report on the recent case of Gucci America Inc v MyReplicaHandbag.com (Case 2008 WL 512789, February 26 2008) highlights that $4.3 million has been awarded by a US Court in a counterfeiting matter. According to Segall:

"The underlying case involved claims by Gucci America Inc, Chloé SAS and Alfred Dunhill Ltd against several defendants for offering a variety of counterfeit products bearing the trademarks GUCCI, CHLOE and DUNHILL."

"In order to determine the amount of statutory damages per type of goods, the court surveyed case law and noted that most judges award well below the maximum on the basis of "per mark per type of goods". Ultimately, the court drew from its own experience in a similar case in which damages in the amount of $100,000 per mark infringed was awarded. Using that number, it awarded $3.6 million to Gucci, as there were six marks infringed and six different types of counterfeit goods (ie, $100,000 multiplied by six marks multiplied by six types of goods). Chloe was awarded $400,000 based on counterfeiting of four marks and one type of product, and Dunhill was awarded $300,000 for three marks and one type of product. Altogether, the defendants were thus jointly and severally liable for a total amount of $4.3 million."