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LABnews July - August 1998

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10. Intellectual property

10.1. France - Court judges on the "first come, first served" principle of domain name assignment

On 12 March 1998 the Tribunal de grande instance of Paris ruled on a domain name dispute between two companies with an identical name. The company ALICE, established in 1957 and holder from 1975 of the ALICE trademark for advertising services, discovered that another company, established in 1966 under the same name ALICE providing software services, had registered the domain name and maintained a Web site.

The company sued the latecomer for trademark infringement and unfair competition in order to have the defendant prevented from using the trade name Alice in any way and from using the domain name, seeking interim relief.

The defendants stated that there was no risk of confusion as regards the trade name, that they had registered the domain name in 1995 with the French registration authority and that registration in France was governed by the principle "first come, first served".

The Paris Court, on the domain name issue, held that the domain name is granted on the principle of anteriority, thus limiting the principle of speciality which allows concurrent use of a trade name by other companies. The Court also stated that registration of a domain name did not confer on the registrant any intellectual property right, but it foreclosed use of the name to all the other companies. On that basis, holding that registration of the domain name on the basis of the "first come first served" principle foreclosed the possibility of the older company, and holder of the trademark, of using its trade name on the Internet, the court ordered that the domain name be relinquished in favour of the plaintiff.

10.2. USA - Court of Appeals holds that software patents are lawful

In a judgement delivered on 23 July 1998 the U.S. Federal Curt of Appeals of the Federal Circuit upheld the validity of a software patent relating to a "Data Processing System for the Hub and Spoke Financial Services Configuration". The patent relates generally to a system that allows an administrator to monitor and record the financial information flow and make all calculations necessary for maintaining a partner fund financial services configuration. The basic claims of the patent referred mainly to a series of arithmetic logic circuits configured to process the data necessary for the operations above on a CPU and a hard disk. After having unsuccessfully tried to negotiate a licence for use of the patent, State Street Bank & Trust Co, an operator in the area of financial services, brought an action in the Massachusetts Federal District Court for declaratory judgement asserting invalidity, unenforceability, and noninfringement, and then filed a motion for partial summary judgement of patent invalidity for failure to claim statutory subject matter under § 101 of the U.S. Patent Act. The Federal District Court granted the motion and judged inter alia that the claimed subject matter of the patent fell outside the grounds of patentability because it related to a mathematical algorithm and to a business method.

On appeal, the Federal Court of Appeals held that, since a "machine" was claimed in the patent, the subject matter was covered under § 101. In addition, the Court of Appeals held, the subject matter of the claim did not fall under the exceptions on unpatentability of mathematical algorithms, since a mathematical algorithm used to produce useful results is patentable under U.S. law. The court also dismissed the exception of business methods as ill-conceived, stating that since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method. On those grounds the court reversed the first judgement and held that the patent was valid. The judgement is available on the Internet at

10.3. USA - Copyright Office releases report on the future of copyright in a networked world

The U.S Copyright Office has recently released a two-year study entitled "Sketching the Future of Copyright in a Network World" (The study can be downloaded at the US Copyright Office Home Page According to the study, the rapid development of communication technologies breaks down barriers that once prevented pirates from stealing intellectual works. Copyright owners and interest groups are pushing Congress to adopt new laws in order to protect their investments in books , music, film and on-line media industry. However, the proliferation of technology-specific laws is not necessarily the most appropriate answer to the copyright problems raised in the digital environment. Since new copyright legislation cannot follow the rapid technological change, the study concludes that most copyright problems raised by the Internet and other networks may be successfully faced by applying the US Copyright Act. The Act is technology-neutral and after its last revision in 1976 can be interpreted by courts in each particular case.

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