That’s right. Stupid!
According to tax experts interviewed for this report on CBS news, the savings achievable by US companies moving some of their intellectual property rights to Ireland is so good that you would be stupid not to.
According to the report, the USA, with a headline rate of 35%, has the highest corporation tax rate in the developed world. In comparison Ireland’s rate of 12.5% may be reduced to as low as 2.5% for income derived primarily from intangible assets such as intellectual property.
Cisco CEO, John Chambers, drives home the point. Chambers emphasises that one of the key responsibilities of the US multinational CEO is the reduction of the effective corporation tax rate.
New Morning IP works with US companies to legitimately reduce their corporation taxes on intellectual property income. If you are a CEO or are responsible for your corporation’s tax rate then please email or call +353-1-254 2340 to find out how you could save money.
It’s been a busy week for copyright.
First came the 180 page judgment in Koger -v- HWM which saw the defendants successfully resist claims of copyright infringement and breach of confidentiality in relation to the software product they developed after leaving the employment of the plaintiffs. The judgment is available here (part 1 and part 2).
Secondly the recording industry was dealt a blow in the High Court when Mr Justice Charleton held that there was no provision in Irish copyright law to grant injunctions directing ISPs to take action against alleged illegal downloaders (EMI -v-UPC via @tjmcintyre). While UPC, the ISP in question, came in for come criticism from the judge, the Court was of the opinion that it was unable to take action since Ireland had not fulfilled its obligations under EU law in relation to copyright infringement. Naturally, there is quite a bit of commentary in the press (three articles alone in the Irish Times here, here and here). Understandably the record producers are not best pleased. Sharon Corr has also weighed in behind the producers. In my opinion the story is not at all black and white. Like most things in life things are not as simple as they may seem. It is hard to see this as just a case of illegal downloaders ruining the music business and denying artists from benefiting from their works.
There are many reasons why the producers are in trouble and some of it may even be their own fault. I am not convinced that there is a direct connection between the success of the artist and that of the record company. For example Thom Yorke thinks the music industry has had its day, not all artists are in love with the current business model. Finally Seth Godin provides a great analysis of the music industry and the issues facing it. In his opinion the problem is a failure to adapt to the internet and that attempts to control it by DRM, legal action etc. are destined to fail. The IPKat also agrees.
Finally the final draft of the ACTA treaty was published. This Treaty has been the subject of intense negotiation beween several countries and the EU in an effort to introduce a minimum international standard for the protection of intellectual property rights. The treaty targets counterfeiters and pirates and has sparked controversy in relation to illegal downloading, border measures and drugs. The best analysis so far comes from the IPKat (here and here)
This is a great presentation from @lessig on the tension between the complexity of copyright and culture. There is also a very good discussion of the US Google Books settlement and the importance of orphan works.
Watch and enjoy.
The European Commission Directorate General for Trade has just published a report on the latest round of negotiations of the Anti-Counterfeiting Trade Agreement (ACTA) which recently took place in Switzerland.
Transparency has been a hot topic in relation to ACTA and a working draft of the agreement was released in April after considerable political pressure. Although the theme of transparency continues with the negotiators having met with civil society representatives in order to exchange views, an updated draft has not been released to date.
ACTA has also been accused of having several unpleasant side effects including mandating the seizure of generic drugs in transit and the searching of personal music players by customs agents looking for pirated music.
The Commission report provides a concise summary of ACTA, and obviously in light of the perceived negative affects focuses mostly on what ACTA is not:
While ACTA aims at establishing effective enforcement standards for existing intellectual property rights, it is not intended to include new intellectual property rights or to enlarge or diminish existing intellectual property rights.
ACTA will not interfere with a signatory’s ability to respect fundamental rights and liberties. ACTA will be consistent with the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Declaration on TRIPS and Public Health. Participants reiterated that ACTA will not hinder the cross-border transit of legitimate generic medicines, and reaffirmed that patents will not be covered in the Section on Border Measures. ACTA will not oblige border authorities to search travellers’ baggage or their personal electronic devices for infringing materials.
Conspicuous by its abscence, however is a lack of specific assurance that ACTA will not provide for graduated repsonse or “three strike” treatment of internet users accused of illegal downloading. The report merely states that ACTA will not interfere with a signatory’s ability to respect fundamental rights and liberties.
One such event occurred in the world of model railways in August last year when the United States Court of Appeals for the Federal Circuit (the CAFC, which is essentially the IP court for the USA) handed down an important judgment in a dispute over the interpretation and enforceability of an open source software license, namely the Artistic License.
The Plaintiff/Appellant, Robert Jacobsen brought a case against KAM Industries claiming breach of copyright in software which Mr Jacobsen had developed to help program the electronic hardware that is used to control model railways. The software was made available by Mr Jacobsen free of charge subject to the Artistic license. The Defendants allegedly downloaded the software, made changes and distributed the modified software as part of their proprietary and competing product. The Defendants did not do so according to the terms of the Artistic License.
Mr Jacobsen claimed breach of copyright and sought an interlocutary injunction to prevent the breach. The District Court, however, held that the breach was a breach of a covenant of the license which the court interpreted to be a contractual breach and therefore injunctive relief was not available.
The CAFC overturned this ruling, finding that the breach was in fact a breach of a condition of a license and therefore injunctive relief and other remedies were available to the Plaintiff. The case was remanded back to the district court for further adjudication.
Interestingly the court considered the particular aspects of open source licenses and noted that according to settled jurisprudence the license was drafted in such a way to make the restrictions of the license conditions. The court relied on US jurisprudence on the construction of leases in this regard.
Furthermore the court noted that although the Plaintiff had made the software available for free, the element of collaboration which allows faster development of more reliable code was good consideration in exchange for making the code available for free. The lack of money changing hands did not mean that there is no economic consideration. The Court held that the conditions set forth in the Artistic license “were vital to enable the copyright holder to retain the ability to benefit from the work of downstream users.”
Open Source software projects invite computer programmers from around the world to view software code and make changes and improvements to it. Through such collaboration, software programs can often be written and debugged faster and at lower cost than if the copyright holder were required to do all of the work independently. In exchange and in consideration for this collaborative work, the copyright holder permits users to copy, modify and distribute the software code subject to conditions that serve to protect downstream users and to keep the code accessible.
The choice to exact consideration in the form of compliance with the open source requirements of disclosure and explanation of changes,
rather than as a dollar-denominated fee, is entitled to no less legal recognition. Indeed, because a calculation of damages is inherently speculative, these types of license restrictions might well be rendered meaningless absent the ability to enforce through injunctive relief.
So why is this important?
This ruling is important for a number of reasons.
Firstly it shows that open source licenses are enforceable.
Secondly it shows that breaches of licenses can be breaches of copyright and therefore, in the EU at the very least, authors have recourse to both civil and criminal remedies including permanent injunctive relief and so on.
Thirdly, open source is widely used, particularly in telecommunications applications. One of the key reasons is the availability of reliable, tested code which gives developers a real benefit, such benefits were reflected in the CAFC decision above.
Finally although this is a US decision, the reasoning is quite straight forward and would be persuasive in our jurisdiction. Not only that, but considering the position of the US in the world, and the mobility of software, any impediments to distribution or execution of code in the US is certain to devalue a product relying on software.
Laurence Lessig described the ruling thus:
The legal and financial community tend to dismiss open source licenses at best dismissively and at worst as the work of cranks probably due to a lack of understanding of the operation of the open source model. However the CAFC ruling now shows that these licenses have teeth and there is no doubt that more disputes will arise in this area.
This is an interesting one. Via Lessig’s blog, a report that copyright holders have pressurised Amazon into removing a feature on their latest version of the Kindle e-book that reads the stored book aloud.
The Kindle is a product developed by Amazon that stores books electroncally and which includes an “E-Ink” screen that is very readable. It is one of the holy grails of publishing and a major innovation in the publishing world.
With the latest version of Kindle, Amazon added a new fearure that allows the text to be converted into speech. The feature is quite useful in that you can plug the Kindle into your MP3 jack in your car and listen to your book while driving without having to source separate audio and text versions of the book.
As Lessig pointed out, no rights of the copyright holder are violated by implementing this feature. Although it is in their interest to limit the use to which their copyright material is put, it is clear that they cannot prevent a person who has purchased their material from reading it aloud.
Just imagine if the Irish Times, for example tried to stop its readers from reading the paper aloud.
So this is a case of rights holders using their position (perhaps dominant position) to prevent innovative products from reaching the market.
This is an example of how incumbents can use their market power to prevent innovation. In Ireland we have witnessed something similar whereby the media companies have pressurised Eircom into facilitating the disconnection of alleged copyright offenders from the internet and also into blocking certain sites. Arguably Eircom is not obliged to police the internet and the license holders are entitled to pursue breaches of copyright in the normal ways. But they are using their market power to put pressure onto ISPs to act as their agents.
Is this fair? Probably not.
Is it good for the economy and business? Definitely not.
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