QUESTION
|
Foundation Degree in Business – Year One |
Learning outcomes:
3. Evaluate legal attempts to regulate the market place 4. Examine the different forms of resolving commercial disputes
Michael Keane |
Unit BS20112: Business law
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Scenario
Baldwell Ltd is a UK manufacturer of highly specialist measuring equipment and has a high reputation in its industry. It wishes to market a new product which measures alcohol content. The machine will be marketed to drink drivers who wish to check if they are below the legal limit. It wishes to call then new product “drinksafe”. It is anxious to protect the product. It is also concerned that another company, called Caldwell Ltd has set up, manufacturing measuring equipment.
One of Baldwell’s directors recently met with a director of Zero Gmbh, a German competitor. Between the companies, they had 60% of the European market in specialist measuring equipment for alcohol content but only 5% of market share if the market was defined as ‘measuring equipment’. The two companies had 90% of UK market share in alcohol measuring equipment and 10% of the UK ‘measuring equipment market’. Both directors felt that it would be to their mutual advantage not to compete in certain areas and each agreed not to sell or market in each other’s home market. In other words, Baldwell would not sell in Germany and Zero would not sell in the UK.
Task one
Advise Baldwell what intellectual property rights it should consider in order to protect the new product.
Task Two
Consider what action if any, Baldwell could take against Caldwell.
Task Three
Assess how the dispute between Baldwell and Caldwell could best be resolved.
Task Four
Advise Baldwell of any potential breaches of either European or UK law in relation to the discussions that took place between the two directors.
Assessment criteria
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NB: All tasks should be supported by relevant case law and statutory authority
Pass
The student needs to identify the legal issues that Baldwell faces. Both competition law and intellectual property issues should be addressed. Relevant legislation and case law should be explained and applied to the scenario. Some attempt at identifying and explaining at least three methods of dispute resolution
Merit
In addition to achieving the pass criteria, the student will demonstrate a greater understanding of the relevant issues. The scenario will be analysed. The analysis of Baldwell’s position will be more comprehensive and there is use of supporting case law, where appropriate. There is some evidence of independent research, particularly in relation the second task. There is strong evidence of the different methods of dispute resolution.
Distinction
In addition to the merit criteria, there is greater evaluation of the legal issues. Explanations of the legal principles applicable are more comprehensive and independent research is more substantive. All methods of dispute resolution have been analysed and an appropriate method has been selected with compelling reasons.
Fail
Students will not have met the pass criteria and will have to resubmit all tasks. Work reflects a lack of understanding of the learning outcomes.
SOLUTION
Task 1
In order to protect the new product drinksafe, various options that are available to Baldwell under the Intellectual Property Law (covers patents, industrial designs, copyrights, trademarks, knowhow and confidential information) are detailed below:
- Patents: are those intellectual property rights which grants protection to new inventions and provide the owner of the patent with certain rights like not letting others to make, use, import or sell that invention without the permission of the owner. In order for an invention to be patented it needs to satisfy certain criteria as laid in the Patents Act of 1977 which are (i) newness of the invention; (ii) there is an inventive step involved which is not an obvious step to any knowledgeable and experienced person in that field; and (iii) the invention should have the capability to be useful to some type of industry.
Drinksafe meets all the above requirements and does not fall under the exceptions as provided in Sub Sections 2, 3 and 4A of the Patents Act and thus Baldwell can consider opting for Patent registration. Patent will be granted to Balwell for a period of twenty years with an annual renewal of the patent by payment of requisite fee to the office of the patents registration. An application for the patent registration can be made by Baldwell either in London or New Port. With the grant of the patent to Balwell it would acquire certain rights of a patented product as outlined above like it can bring legal action and claim damages if the product is made, used, imported or sold without its permission but if the product is found to be unsafe the patent expires and the product is required to be removed from the market. The patent granted in United Kingdom is applicable within the country and people who are not belonging to United Kingdom can sell, made, import or use the product outside United Kingdom. In case there is any infringement of the patent right granted on Drinksafe to Baldwell, then an action can be brought in either the patents court or patents county court depending upon the costs incurred in such suits against the infringer under civil law and Balwell can claim injunctions, damages or account of profits. Instead of going to court it is always recommended to go for an out of court settlement as it saves both time and money of the parties to the litigation.
- Copyright protection: Copyright is an automatic right that means there is no need to apply for this right and by simply putting the symbol © along with the name of the owner and date of publication this right initiates. Copyright protection covers written work along with theatrical, musical and artistic works. It also protects book layouts, films, sound recordings and broadcasts. To protect all the literature with respect to Drinksafe, Baldwell can opt for copyright protection under the Copyright, Designs and Patents Act 1988. Baldwell can also protect its website content provided the website has a registered domain name. The duration of protection provided by copyright varies from work to work. For example copyright protection on literature work continues for 70 years after the death of the author and after that it falls in the public domain. Company owns the copyright for any work done of its employees and it is termed as commissioned work. In the commissioned work the company is required to keep the information as to which employee created that work as it can be of great help in case of infringement of the copyright. The person having a copyright on a work can bring an action if there is any infringement of the copyright and can claim damages, injunctions so that there is no further violation of the rights of the owner.
- Other than acquiring patent and copyright Balwell can also consider registering the design and features of Drinksafe under the Designs Act 1949. The protection granted by Designs Act can be on the overall visual appearance of Drinksafe or a part of it. This protection will protect the design only within the country in which it is registered that is in our case in United Kingdom only. For a design to be registered under the designs law it is required that design should be new and it should have an individual character. New here means that there should not be any identical design published in United Kingdom or the European Economic Area and individual character mean that the overall impression of the design is different from any other already disclosed design. Registered design of Drinksafe will give Baldwell design protection for 25 years and it can prevent people from making, using, importing the product to which the design applies. The design right will give Baldwell an automatic protection for the extrenla and internal configuration of Drinksafe and will last for the duration of 10 years after the first making of Drinksafe or for 15 years after the creation of the design of drinksafe. In an action for infringement for design right it is required to be proved by the owner that the design was actually copied and just not the potential of the design to be copied. A registered design is an intellectual property which is quite valuable and there can be an infringement action by the owner of the design against other parties in order to prevent others from making designs similar to the design of the owner. A registered design can be granted quickly and is a secondary protection to the patent.
- Under the provisions of the Trade Marks Act 1994 Baldwell can get protection on its company name and logo. With this protection granted Baldwell can prevent others from using the name of the company or its logo. This protection is required as it will prevent any misuse of the reputation of Baldwell and passing off of goods under its name. It is required for this right to be granted that name of the company and logo should be distinctive and specific.
Task 2
Caldwell is similar sounding as Baldwell and goods of Caldwell can be easily passed off under the name and reputation of Baldwell. The action can be brought for passing off of goods of Caldwell taking advantage of the name and reputation of Baldwell.
Task 3
There are several alternate dispute resolution methods available to parties to resolve disputes other than going to a court which is time consuming and expensive. The dispute between Caldwell and Baldwell can be resolved by way of mediation, conciliation or arbitration. If the parties opt for mediation then both Caldwell and Baldwell will sit together and reach to a conclusion agreed to both the parties. If the mediation fails then they can go for arbitration wherein an independent arbitrator with the consent of both the parties to the dispute will be appointed and that arbitrator would try to get the dispute to conclusion. If arbitration is also not successful then the dispute can be resolved by way of conciliation.
Task 4
The discussion that took place between Baldwell and German competitor Zero Gmbh can lead to breach of the provisions of competition law. It is stated in the competition law that business practices should promote competition in the market and should not put any restriction on the free flow of trade by trying to monopolize the market. The discussion between Baldwell and Zero Gmbh is in violation of this principle of competition law and such an agreement can be considered as void. In United Kingdom the competition governing law is Competition Act 1998 and in European Union it is Treaty on the functioning of the European Union. The agreement between the two can be termed as a cartel as it has been agreed to not compete with each other and such cartel agreements are illegal agreements both under the competition law of United Kingdom and European Union and can lead to a sentence of up to 5 years. It is advisable that Baldwell should terminate this agreement with immediate effect.
References
Books
- Bently, L & Sherman, R (2008) Intellectual property Law 3rd Ed. Oxford University Press
- Cornish, W (2010) Intellectual Property: Patents, Copyrights, Trademarks & Allied Rights 7th Ed. Sweet & Maxwell
Legislations
- Competition Act 1998
- Copyright, Designs and Patents Act 1988
- Designs Act 1949
- Patents Act of 1977
- Trade Marks Act 1994
Others
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