Background
Back in 1862, John Pepper and Henry Dircks invented an illusion technique, now known as Pepper’s Ghost, which uses plate glass or plastic film and special lighting techniques to make objects seem to appear and disappear, or to make one object morph into another. Over the past century, Pepper’s Ghost has been used in places such as movies, concerts, magic shows and even Disneyland’s Haunted Mansion.

On 26 July 2014, a three-dimensional representation of Homer Simpson participated in Twentieth Century Fox Corporation’s (“Fox”) panel discussion, interacted with the Simpsons’ creator, Mr. Matt Groening, at the comic convention held in San Diego (the “Simpson’s Performance”).

Hologram USA Inc. (“Hologram”) immediately sued Fox and Gracie Films, a film production company who co-produces the Simpson’s Performance, for patent infringement. Not only that, Hologram was so aggressive as to suing also those individuals and companies who supplied certain parts and equipment and technological know-how (“Suppliers”) for making the Simpson’s Performance, in the same lawsuit.

Why using seemingly a technique that has been used for a century would still attract patent infringement liability? This article explores the potential patent infringement in the creation of holographic-like performance on stage.

The alleged patent infringement
Hologram has acquired exclusive licence rights to two patents relating to Pepper’s Ghost from Musion Das Hologram Limited and Uwe Maass (the “Patent Holders”) in the US. The two patents involved are proprietary projection systems that allow moving images to appear within a stage-like setting (the “Patented Technology”). Hologram claimed that the Patented Technology is capable of creating illusion of life-size, three-dimensional moving images on stage that are nearly indistinguishable from real people through the use of a patent system. The patent system offers various improvements over the Pepper’s Ghost technique, including better viewed quality, more visible even in high level of ambient light, and the removal of milky hue.  Hologram asserts that the Patented Technology is the only quality hologram technology available in the world that allows users to create life-like images. The technology has been used worldwide and even Prince Charles has used the hologram tool to make appearances.

Direct infringement
Hologram and the Patent Holders alleged that Fox and Gracie Films had infringed the Patented Technology by making and using within the US the patented invention, including the use of the Patented Technology to create a hologram-like image of Homer Simpson on stage, without obtaining a license or any authorization from them (s. 271(a) of the Patent Laws of the US – Title 35 of the US Code (the “Code”)).

Indirect infringement
Hologram and the Patent Holders also alleged that the Suppliers had actively induced and contributory infringed the Patented Technology through working with Fox and Gracie Films to create the accused apparatus and the Simpson’s Performance (s. 271(b) of the Code).

It was further alleged that the Suppliers had knowledge that Fox and Gracie Films did not have license to the Patented Technology, but contributory infringed the Patented Technology by having its direct and indirect customers to sell material or apparatus for use in practicing the patent (s. 271(c) of the Code).

Fox’s potential arguments
Fox argued that the present claim was without merit. This might be supported by a recent similar case.

Earlier this year, Hologram and the Patent Holders sued Pulse Entertainment Inc. and others for the infringement of Patented Technology in relation to the projection of hologram of the late Michael Jackson at the Billboard Music Awards. The US District Judge decided that Hologram and the Patent Holders’ allegations were unsuccessful as they failed to provide the Court with sufficient information about the patent infringement. Specifically, they failed to provide the Court with sufficient information about the accused apparatus to enable the Court to compare any of the claims in the patents to the accused apparatus.  If as asserted by Hologram that the Patented Technology is the only quality hologram technology available, the high quality of the Simpson’s Performance renders it suspicious of using apparatus which practice the Patented Technology. Yet Hologram may not succeed in its claim against Fox, if it still fails to provide the proof of infringement as it so failed to do in its previous infringement claim against Pulse Entertainment Inc.

Hong Kong producers should be wary
It appears that Hologram and the Patent Holders have applied for/obtained patents in many countries and are fiercely protecting its rights in the Patented Technology. There are a few patents in Hong Kong which are of similar nature, one of them was filed by Disney Enterprises, Inc. from the USA, and another filed by Musion IP Limited from the UK (both are not yet granted). The latter, as its company name implies, may be related to the Patent Holders in some ways. So film producers and event organizers who want to use hologram on stage, as well as their suppliers of related parts, materials and the technological know-how, should be wary in their deployment of the hologram technology and make sure that they would not infringe others’ patent rights.

Hong Kong patents law prohibits both direct infringement and indirect infringement similar to the USA. For direct infringement, section 73 of Patents Ordinance (“PO”) provides that the proprietor of the patent has the rights to prevent third parties from doing a number of specified acts in Hong Kong without his/her consent, including: in relation to any product which is the subject matter of the patent – making, putting on the market, using or importing the product; and in relation to any process which is the subject-matter of the patent – using the process or offering the process for use in Hong Kong when the third party knows, or it is obvious to a reasonable person in the circumstances, that the use of the process is prohibited without the consent of the proprietor of the patent.

For indirect infringement, section 74 of the PO provides that a person can be held liable for indirect or contributory infringement of a patent if that person supplies or offers to supply in Hong Kong another person with means to induce that other person to commit patent infringement.

Conclusion
The legal consequences of the lawsuits in the USA in respect of the Patented Technology and their impacts on using hologram technology are still uncertain. However, looking at the alleged patent infringement of the Simpson’s Performance case, much attention and caution should be paid to the use of technology and the supply of certain parts, equipment and technological know-how relating to holographic performance to avoid any infringement act.

Should you need any assistance in relation to patent infringement, please feel free to contact us for further information.

For enquiries, please contact our Intellectual Property & Technology Department:

E: ip@onc.hk

T: (852) 2810 1212

W: www.onc.hk

F: (852) 2804 6311

19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong

Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.