For the half-year to 31 December 2014, the IPKat's regular team is supplemented by contributions from guest bloggers Rebecca Gulbul, Lucas Michels and Marie-Andrée Weiss.

Regular round-ups of the previous week's blogposts are kindly compiled by Alberto Bellan.

Friday, 21 November 2014

Les Mignardises du Vendredi

Wine and Donuts 

 Yesterday was Beaujolais Nouveau day and the celebrations may have lasted late into the night. Hopefully, the libations will help France forget the issues that the release by ICANN of two new generic top-level domain names (gTLD), .WINE and .VIN, may create. American wine producers are not too thrilled about these two new gTLDs either and neither is the European Commission, which mentioned ICANN’s “unaccountable processes around domain name rights (such as the .wine and .vin issue)” in a memo about its position for the Internet Governance Forum 2014 which took place early last September. These two new gTLDs are both likely to be acquired soon by a registrar, Donuts, which, of course, also owns the .COFFEE gTLD.

It's a gTLD thing

The European Affairs Commission of France’s Chamber of Representatives, the Assemblée Nationale, adopted on November 4th a resolution about these new gTLDs. The rapporteur of this issue, Representative Philippe Armand Martin, gave as an example of possible issues the release could raise the one of the registrar of .VIN, a first level domain name, selling the second level domain name CHAMPAGNE.VIN to a wine maker producing sparkling wines outside of France’s Champagne area.

France is a fierce defender of its geographical indications and the resolution states that “the protection of geographical indications should be integrated into the process of delegation of second level domain names to protect the interests of consumers and producers.” The resolution also alludes to a forthcoming European Commission communication on the issue at the next Council on November 27 and so the arm wrestling between ICANN and the Commission about these two gTLDs may not be quite over.

Rihanna and Topshop, Continued.

I am in the habit to listen to Rihanna in the car when the weekend starts, so it is fitting that I add this information to the mignardises, which I learned reading his tweet published by Goss- IPgirl. Retailer Topshop is appealing the ruling which prevented it from selling tee-shirts bearing RiRi’s image (don’t you love when you get your IP news from Vogue?) You can refresh your memory about the case here.

 It is an interesting case and Rihanna may well be known to future law students as a right of publicity champion. I do not know the laws involved in this case, so I will not comment much further, but in New York, the case would be won by Rihanna without any doubts. Only (IP) Girl (In the World) indeed.

 Fashion and Trade Mark Dilution

I recently experienced a fashion trademark dilution experience I would like to share with you. On weekends, after an appropriate dose of Rihanna’s music, I like to visit a charity shop (thrift store this side of the Pond) and look at the used book section. Then I hit the tee-shirt section to look for shirts bearing amusing, but counterfeit (or counterfeit, but amusing) slogans and images.
One of my earliest  finds 

I stumbled by chance upon a dress which was hanged in front of the changing rooms. As it was hanging at my eye level, I first saw the trade mark stitched on its back: Loulou de la Falaise. Could it be possible that a Loulou de la Falaise dress had made its way to a US thrift shop, bearing a price tag of $7.45?

Haute Couture (Not)
At this time, I had not even looked  at the dress, but vaguely registered that it was made out of turquoise velvet.

After two seconds of complete consumer confusion, I snapped out of it and inspected the dress further: tacky buttons, cheap material and industrial seams, no lining, made in China. Obviously not the real thing. I was able to enter these information in my, hum, database, and compared it with previously gathered information about Loulou de la Falaise. Muse and collaborator to Yves Saint Laurent. Owner of a shop in Paris on the Rue de Bourgogne, where she sold understated yet luxurious accessories and clothes under her own name. This dress could certainly not have been purchased there.

I happened to know about Loulou de la Falaise, but what if another customer does not know her brand, and purchases the dress? Her name would then be associated with a cheaply-made dress: dilution indeed. However, even though Loulou de la Falaise died in November 2011, she is not forgotten, and more people may still learn about her. A book about her life has just been published and the November issue of British Vogue featured several pages on her. Even the Wall Street Journal recently wrote about her.

 During the same visit, I also saw a safari jacket vaguely resembling the famous Yves Saint Laurent model worn by Loulou de la Falaise and Yves Saint Laurent in the photograph published in the Guardian and the jacket bore the label... Yves.

Have a good weekend you all!

Image of wine and donuts courtesy of Flickr user cooklespi, under a CC BY-NC-ND 2.0 license.

The Consumer Protection Function of Trade Marks: Just so?

This Kat been has thinking a lot lately about trade mark first principles in connection with his participation, together with
fellow Kat Jeremy, in a forthcoming program sponsored by the International Trademark Association (INTA) on the subject of trade marks and overlapping IP rights. One such principle is the recurring assertion that consumer protection is a bedrock of trade mark protection. Is this indeed the case and, if so, how does consumer protection fit within the trade mark protection structure?

Consider the observations made by the distinguished chief judge of the U.S. Ninth Circuit Court of Appeals, Judge Alex Kozinski, in his iconic article, “Trademarks Unplugged” (October 1993, 68 N.Y.U.L. Rev. 960), based on the text of his Boal Memorial Lecture. In the piece, Judge Kozinski considered three situations: the trading of Rolex watches, the sale of clothing bearing the marks of the New York Mets baseball team, and a pirated adaptation of Sega's Cool Spot video game. Going beyond the source function of trade marks, he posited four other kinds of interests embodied in the ownership of a trade mark-—moral, utilitarian, goodwill and free expression. Take the ROLEX watch, being for many a quintessential aspirational good. Because of the low price point of a fake watch, no consumer is deceived into thinking that he has purchased a genuine ROLEX product, nor has the purveyor of the branded watch likely lost a customer because of the sale of the fake watch. This is not to say that the brand holder may not have suffered harm. The question is how to understand the property right of the trade mark owner in such a way as to support the grant of relief in such a situation.

Speaking generally about this question, Judge Kozinski concluded as follows:
"We've considered four different kinds of interests implicated by giving trademark owners a more extensive property right in their marks: moral, utilitarian, goodwill, and free expression. How does a court or legislature go about balancing all of these? Well, as I tell my kids when they ask what I'll do if they run away and join the circus, I don't give advisory opinions. In truth, the hypotheticals I've sketched here indicate that results may be case-specific; many of these are close judgment calls, requiring one to balance interests that point in different directions. Applying these considerations to a particular set of facts requires a normative judgment about the relative importance of competing interests.

It is enough for today to recognize that in our culture, trademarks are doing all kinds of work they weren't originally meant to do. As their new functions become more important, so will the need for law to keep up. It's critical that we consider all the interests at stake and weigh those interests by reference to current reality, not according to rules made up at another time to deal with another reality. Trademarks, trade names, logos, and the other symbols of commerce have evolved. The law must evolve with them.”
The focus of Judge Kozinski’s comments is on the proprietary nature of the trade mark right. In so doing, he does not demonstrate any need to also embrace consumer protection as an alternative basis for the expansion of the trade mark right, even in the light of changing commercial circumstances.

Lest Kat readers think that this approach is limited to the American view of the issue, consider as well the pithy observation made recently to this Kat in an exchange with a highly regarded colleague in CTM practice, who put it simply as follows:
“In the EU, the understanding is that trade marks are IP assets, their protection serving their owners' interests. They do NOT protect consumers, we have other laws for achieving that.”
Here, as well, the position is clear. The trade mark right is a propriety right; protection of the consumer with respect to the use of a mark is not the concern of the trade mark laws.

And so the question: how does the consumer protection function fit as part of the trade mark system? After all, and especially so in certain European countries, unfair competition is a distinct statutory right with respect to trade marks, rather than being an element of the trade mark right itself. Is there any reason to treat consumer protection with respect to a trade mark in a different fashion?

KATNOTE from Jeremy, who has a bit of a bee in his bonnet about the consumer protection function of trade mark law: this seems to be a popular debating topic in the US to the point at which it has generated a rich and energetic literature. So influential is this debate that, in his editorial capacity, he sometimes receives articles submitted for publication in JIPLP that state it as being axiomatic that a function of trade mark law (and often the only function of trade mark law) is the protection of the consumer.

It's worth taking a look at the law in wider terms. The word "consumer" is entirely absent from the Paris Convention on the Protection of Industrial Property;  Part II Section 2 of TRIPS, which deals with trade mark law, makes no mention of the word "consumer" except in the tail end of Art.23.3, which deals with extra geographical indication protection for wines and spirits ("Each Member shall determine the practical conditions under which the homonymous indications in question will be differentiated from each other, taking into account the need to ensure equitable treatment of the producers concerned and that consumers are not misled"). The Community Trade Mark Regulation and Harmonisation Directive, which each actually containing the "c" word, do not articulate a notion of a consumer protection function, and no rights or remedies are open to consumers who are unprotected. While the "essential function" of the trade mark in Europe is 
"to guarantee the identity of origin of the marked goods or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin" (Case C-206/01 Arsenal v Reed)
the protection is given not to the consumer but to the trade mark owner as guarantor of the identity of the origin of the marked goods. 

Consumer protection: are we no more
than canaries in the cage?
As this Kat has remarked on previous occasions, the role of the consumer in European trade mark law is not to be protected but to help the trade mark owner be protected. The consumer is like the canary in the cage which miners used to take underground with them, to detect the presence of poisonous gases. When the canary falls off its perch, dead, the miner carrying the cage knows that it's time to act for his own good. So too, when the consumer falls off his perch, as it were, by being confused, the trade mark owner knows that it's time to act for his own good. In practical terms, neither the canary nor the consumer has much joy in terms of recovery.  

Whether this should be the case is a matter for discussion.  Consumer actions against rogue traders who confuse them, particularly with regard to lookalike packaging, not to mention class actions, might do much to clarify consumer choice in the marketplace and improve its standard of commercial morality.

Thursday, 20 November 2014

Back in England

Back in England! IPKat blog team member is now back in Blighty after his Australia lecture tour.  He just wants to thank his fellow Kats for all their efforts in keeping the blog running smoothly -- and a separate and special "thank-you" to David Brophy for tackling a Google software issue that had many email subscribers freezing or crashing their Outlook software every time they tried clicking on to it.

Flying back today, this Kat had a lot of fun with the entertainment channel of the airline that brought him back.  One of the classic films he watched was John Huston's film noir classic from 1950, The Asphalt Jungle. While the click-through on-screen icon (left) was in colour, the film itself was in black and white -- not the colourised version that led to the celebrated French litigation over the director's moral right to resist such interference with the original -- though somehow film noir seems a strange choice of movie style to colourise.  Readers will notice that the two actors billed on the poster shown here are Sterling Hayden and Louis Calhern.  On the aircraft's movie playlist their names are dwarfed by the name of one of the minor members of the cast whose subsequent fame eclipsed theirs: Marilyn Monroe. Knowing that actors are often quite sensitive about the size of their billing and the order in which they are named, I wonder what measures, if any, are put in place to protect the reputations of those who are the "big names" when the movie is made.

"Fame is the Purr": musicians
should be named
Still playing around with the in-flight entertainment channel, this Kat discovered a wonderfully wide range of music available to the discerning listener.  On the classical music side, for example, one could enjoy not only the standard fare but also such relatively modern composers as Shostakovitch, Schoenberg,Birtwistle, Webern and Steve Reich. The music was great, but there was however something missing. While the names of the composer and the piece being played were available on-screen, there was no indication in the vast majority of cases as to the identity of the performers, whether soloists, ensembles or orchestras. Given that the name(s) of performers may provide the motivation of passengers when selecting their choice of listening, this struck this Kat is strange. In the UK the Performances (Moral Rights, etc.) Regulations 2006 (2006 No.18) gives performers the right to be named and to object to derogatory treatment, but the airline in question is not presumably governed by UK copyright law.

IP Publishers and Editors Lunch. This Tuesday's IPKat lunch for IP Publishers and Editors, looks like having a record turn-out this year, with Ashley Roughton as star speaker.  As a courtesy to this year's hosts, Bircham Dyson Bell (whose London address can be found on its website here: there really is no excuse in this day and age for emailing the IPKat for directions!), you are politely asked to let us know if, having told us you're coming, you might not be attending after all.  Merpel adds that anyone who fails to attend and doesn't give notice to that effect will definitely be inscribed in the Naughty Book.

Happy IP! Professor Estelle Derclaye's inaugural lecture at the University of Nottingham, "Happy IP - what intellectual property has got to do with happiness and vice versa", has a great title -- but does it have any substance? You can find out for yourself by watching the recording, free to view, by just clicking here. The running time is 58 minutes 40 seconds. In it, Estelle (portrayed, right, in a pose that is temptlingly captionable) confesses that her interest was cultivated by a student lecture that mentioned patents, and then by her enjoyment at having to research an IP essay. If only, says this Kat, other people were so accessible to happiness ...

Laughing matter.  "Just a Matter of Laugh? Why the CJEU Decision in Deckmyn is Broader than Parody" is the title of an article by fellow Kat Eleonora which has been accepted for publication in the prestigious Common Market Law Review, in which it will be published next year [this Kat is thrilled to see IP articles getting published in the CMLR: when he was a young and aspiring academic, articles in principle had to be both boring and IP-free in order to get accepted. How things change!].  Eleonora tells us that her contribution is divided into two parts. The first explains the background to the reference in Deckmyn (a case Eleonora has practically made her own: see various Kat references here), summarizing the Opinion of Advocate General Cruz Villalón. The second part discusses specific aspects of the Opinion and the Court of Justice's subsequent ruling. We're not going to spoil the fun by telling you what happens next, but you can read the whole caboodle on SSRN by making the minimal effort of clicking here.

Readers of JIPLP will already know of EU IP Law: a short introduction to European Intellectual Property Law. This is the title of a short book by eminent IP scholars and Katfriends Dirk Visser and Paul van der Kooij of the Leiden Law School, The Netherlands. The authors have published this work as an e-book but, for those who don't like reading things on screen, and for those who don't like getting books free if they can pay for them instead, it will also be published in print in due course. The text of this work can be accessed here or downloaded here. The authors add that they are happy for these links to be passed on to all bona fide students and teachers of the subject -- so feel free to spread the word ...

IPEC: doing well, can still do better. "Representation in the IPEC Small Claims Track" is the title of a most interesting article by Jane Lambert (of NIPClaw fame) on the London IP and Technology Law blog, here.  Jane discusses
... the anomaly that while anyone in the world can appear at a hearing on behalf of a party in the small claims track in most causes of action only a solicitor or other authorized litigator or the party itself can file claim forms or statements of case in that track.
She adds:
That restriction excludes patent and trade mark attorneys who are not authorized to conduct litigation by the Intellectual Property Regulation Board [that's IPReg] (see Rights to conduct Litigation and Advocacy).
Jane also tackles the right of lay representatives to appear as advocates before the Patents County Court: should this continue to apply to proceedings before the Intellectual Property Enterprise Court ("IPEC") small claims track?  Says the IPKat, it's good to see anomalies, inconsistencies and other features that can be improved upon being identified and addressed at what is still an early stage in the life of IPEC and the small claims track. Well done!

BREAKING 'GOLDEN BALLS' NEWS: the CJEU sends the case back to OHIM

Alberto Bellan
The trade mark decision everybody, including Jeremy and Merpel, was waiting for, ie that of the Court of Justice of the European Union (CJEU) in the GOLDEN BALLS saga [on which see earlier IPKat posts herehereherehere, here, and herehas been finally released. 

Our good and talented friend Alberto Bellan explains this latest installment:

"It comes as no surprise that FIFA's idea of IP protection is even more bizarre than the selection procedure of the World Cup hosting countries [see, eg, the unfair IP catenaccio that Blatter's lovely organisation put in place for the Brazil World Cup]

Unsurprisingly, such unfortunate characteristic is common to a number of FIFA's friends, which have brought IP disputes even more senseless than playing football with temperatures reaching 50 C° degrees. 

This is the case of the (in)famous GOLDEN BALLS trade mark saga, which has occupied the European courts and this weblog's pages for almost seven years. 

That endless story should have finally come to an end today, with the decision that the Court of Justice of the European Union (CJEU) issued in Joined Cases C-581/13 P and C-582/13 P. It has not been so.

With such a long-standing story, a little bit of background is in order

Back in 2002 British couple Gus and Inez Bodurs set up a small company named Golden Balls Ltd, for the purpose of making t-shirts and boxer shorts. In 2007 they filed an application for registration of the Community word mark 'Golden Balls' for some products and services of classes 9, 28 and 41. Later on they licensed their trade mark for use by Endemol UK Plc in a TV game show named -- guess what? -- 'Golden Balls'. In earlier 2008 the French firm Intra Presse, organisers of the Ballon D'Or [French for 'Golden Ball', the European Footballer of The Year Award], filed an opposition on the basis of earlier Community word marks 'BALLON D’OR'. The latter covers, among other things, some products and services of the same classes, ie 9, 28, and 41. The grounds of opposition were based on both likelihood of confusion (Art 8(1)(b) of (now) Regulation 207/2009 on the Community Trade Mark) and repute of the earlier mark, under Art 8(5) of the same Regulation.

In 2010, the OHIM Opposition Division ruled in favour of the Bodurs, establishing that the signs were visually and phonetically different and that their slight conceptual similarity for a section of the relevant public (namely, the English and French speaking part) was not enough to establish likelihood of confusion and thus trigger protection under Art 8(5) [see IPKat posts here and here]

The Bodurs and, in the centre 
(though not the golden one), 
Phil Bayles
Intra Presse appealed the decision. In 2011 the First Board of Appeal of OHIM partially upheld the appeal. While visually and phonetically different, the Board said, 'Golden Balls' and 'Ballon D'Or' are conceptually "identical or at the least extremely similar" -- and that that was enough for likelihood of confusion to be established for all the goods and services involved, except for some goods in class 9. The Board held that it was not necessary to take into consideration Intra Presse's claims under Art 8(5).

In September 2013 it was the turn of the General Court (GC) to feature in the GOLDEN BALLS saga [T-437/11 and T-448/11; here's the IPKat report, featuring elephants and post letters]. The GC upheld the Opposition Division's view that the huge visual and phonetic differences and the slight conceptual adherences between the signs, globally considered, prevent those trade marks' to be considered similar under Art 8(1)(b). From the lack of similarity between the signs at issue for the purposes of Article 8(1)(b), the GC inferred the impossibility for 'Ballon D'Or' to access the extended protection provided under Article 8(5), whose application also requires "similarity" between the signs at issue. Thus, Intra Presse's claims were entirely dismissed. At that point, Intra Presse appealed the decision to the CJEU.  

In today's decision, the CJEU set aside the General Court's judgments and partially annulled the decisions of the Board of Appeal -- all in one go

In relation to the findings of the General Court, the CJEU focused on the relation between the conditions for claiming protection under Art 8(5) and under Art 8(1)(b) and, in particular, upon the different threshold of similarity that those provisions require.

Recalling its previous case law, the CJEU established that the threshold of similarity required for the application of Art 8(5) is substantially different from the one under Art 8(1)(b). 

Indeed, while implementation of protection for non-reputed trade marks is conditional upon a finding of a degree of similarity connected to likelihood of confusion between the signs, the existence of such a likelihood is not necessary for the protection conferred by Article 8(5), whose types of injury may be the consequence of a lesser degree of similarity between the earlier and the later marks. So, when it comes to reputed trade marks the extended protection is actionable whenever the relevant public "makes a connection between those marks" or "establishes a link between them" [see CJEU case law in Ferrero v OHMIC552/09 PAdidas-Salomon and Adidas Benelux, C408/01, and Intel CorporationC-252/07]. Accordingly, protection under Art 8(5) cannot be applied only when the assessment carried out for the purposes of Art 8(1)(b) leads to the conclusion that the marks at issue presents no similarity at all. By contrast, whenever event a very low degree of similarity between the signs exists, the Court is required to carry out

Could you establish a link?
"an overall assessment in order to ascertain whether, notwithstanding the low degree of similarity between them, there is, on account of the presence of other relevant factors such as the reputation or recognition enjoyed by the earlier mark, a likelihood of confusion or a link made between those marks by the relevant public".

Consequently, as the GC acknowledged that a slight conceptual similarity between 'Golden Balls' and 'Ballon D'Or' does exist, it should have carried out

"an overall assessment of the marks at issue in order to ascertain whether that low degree of similarity was nevertheless sufficient, on account of the presence of other relevant factors such as the reputation or recognition enjoyed by the earlier mark, for the relevant public to make a link between those marks".

Coming to the findings of the Board of Appeal, the CJEU recalled that it is that Body's duty to decide "on each of the heads of claim submitted for its consideration". As the Board of Appeal had considered unnecessary to examine the pleas that Intra Presse raised on the basis of Article 8(5), the CJEU said, it failed to fulfil that obligation. Thus, the CJEU annulled those decisions to the extent that they dismissed the appeals in relation to the non-similar goods in class 9 and referred the dispute back to OHIM for further consideration in light of the guidelines provided.

Merpel thinks that seven years is far-too-long a period of time to decide whether an earlier 'Ballon D'Or' trade mark could prevent a later 'Golden Balls' sign from being registered. This is even more despicable if one considers the significant economic efforts that small businesses like the one of the Bodurs have been making to defend their rights throughout the intricate EU court system. This expensive tiki taka between EU courts could maybe sound a little less depressing if one tries to figure out how this dispute could likely evolve. As per the CJEU's instructions, the Board of Appeal will now have to assess whether, regardless of actual confusion, the relevant public would establish a link between 'Golden Balls' and 'Ballon D'Or'. 

Community Trade Mark system's 
Rules of Procedure 
After that, however, Art 8(5) extended protection could find application only inasmuch as the use of 'Golden Balls' "takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the earlier trade mark". This seems a bit of good news for the Bodurs. While the establishment of a "link" between signs is one of the many slippery criteria of trade mark law that leave room to a great degree of arbitrariness, it is rather unlikely that one could demonstrate that the Bodurs' sign has free ridden on, or blurred or tarnished the good reputation of the FIFA's Award [the prestige of which has already been irremediably jeopardised after Messi and Ronaldo's monopolised it for the last seven years] in the past twelve years, or that that could ever happen in the future. Although there's still a long way to go, then, not all seems lost for the IPKat's couple of friends.

A list of kat-posts mentioning the Bodurs here.

The Bodurs' Facebook page here.

The Bodurs' shop before and after this lawsuit.

The Bodurs and the IPKat here."

Wednesday, 19 November 2014

Les Caprices du Mercredi

OHIM New Fast Track Program

The Office for Harmonization in the Internal Market (OHIM) is introducing a faster way to register for a trade mark, Fast Track. The new program will start on November 24 and will be free of charge. Applicants will, however, have to pay all fees upfront and also will have to select their goods and services from the OHIM's database of accepted terms, in order to reduce “the likelihood of deficiencies.”

Student Essay Competition Asks About Right to Be Forgotten

The Faculty of Law of the University of Cork is organizing an essay competition and invites all post-junior certificate students to submit an essay of some 1000 words. Among the topics students can chose is this question: “Is it fair for a person to have a legal right to have internet search results erased?”

Let’s hope that the best essay on that question will be published by the University online, as it would be interesting to read the opinion of a young jurist. The closing date for the competition is November 28, so there is still some time to get inspired.

Pigeons and Monsieur Chat

It’s been a while I wanted to write about this French case, even though it is not really an IP case, but more an administrative law case. However, as  the name of the artist involved in this case is Monsieur Chat, Mister Cat, I could not pass the opportunity to briefly write about his tribulations with French justice.

Monsieur Chat is the name chosen by French graffiti artist Thomas Vuille who “tags” cats in public spaces. In August, he tagged images of cats in the Paris metro station Le Châtelet, while it was renovated. The images were thus painted on a temporary structure, not a permanent one. The RATP, the agency in charge of public transportation in Paris, did not however, consider it beautification but, rather, vandalism, and sued the artist for degradations, asking him to pay a 1800 Euros fine.

Under paragraph 1 of article 322-1 of the French criminal Code, “Destruction, damage or deterioration of property belonging to another is punishable by two years imprisonment and a 30,000 Euro fine, unless it has resulted in minor damage.“ Paragraph 2 of the same article specifically incriminates graffiti, considered a somewhat minor offense, as “tracing inscriptions, symbols or designs, without prior authorization, on facades, vehicles, highway or street furniture is punishable by a 3,750 Euro fine and a sentence of community interest work, if it resulted only in minor damage.”.

So Monsieur Chat could have been sued for a even higher fine. However, he is recognized as a real artist by many people who considered suing him to be outrageous. Certainly, it is more interesting for metro riders to look at a bright Monsieur Chat drawing than blank construction walls. But graffiti may have a double nature, both art and vandalism, if painted on an urban canvas without authorization. A few weeks ago, the Paris lower criminal court declared a mistrial over a procedural mistake, so there was no debate. Monsieur Chat was quoted as saying “I just put color. My grandfather was a painter, my father a bricklayer and in my home, it has never been a crime to paint on the walls."

In a somewhat related story, a Banksy graffiti mural was destroyed in the town of Clacton-on-Sea following complaints that the work was racist, as it featured big pigeons holding anti-immigration placards and looking menacingly over a little bird. As one of the placards read ”Keep Off Our Worms”, it can be argued without too much stretch of the imagination that the work was actually anti-anti-immigration. Nevertheless, the local council decided to remove the graffiti. Apparently, the council did not know that the work was a Banksy, but one can wonder if this knowledge would have prevented the work from being destroyed, as a council communication manager quoted in the BBC article said that “We would obviously welcome an appropriate Banksy original on any of our seafronts and would be delighted if he returned in the future.

I wonder what would be deemed “appropriate” by the Clacton-on-Sea local council…

Meccano is Not a Generic Term
The Holidays are approaching fast and maybe some kids would like to receive a Meccano set. But “Meccano” is a trade mark and may not be used as a generic term in the press. A French Court of appeals recently found the French weekly magazine Le Point liable for having used “Meccano” as a generic term to describe construction games in several of its articles. The magazine was fined 30,000 Euros. The Court specified that freedom of the press was not a defense in this case.

Twitter Account on Design Patent
If you are interested in design patents, I recommend following the Twitter account of Sarah Burstein, who teaches law at the University of Oklahoma College of Law. She is closely following design patent application and cases, and her tweets are always interesting to read.

Image of writing courtesy of Flickr user Jonathan Reyes under a CC BY-NC 2.0 license.

Image of pigeon and cat courtesy of Flickr Toni user under a CC BY 2.0 license.

Image of Meccano is courtesy of Flickr user catnthehat under a CC BY-NC-SA 2.0 license.

Lantana's lament: no technical contribution, no patent

Technical contribution? Dream on ...!
It may not be Alice v CLS Bank International all over again, but Lantana Ltd v The Comptroller General of Patents, Design and Trade Marks [2014] EWCA Civ 1463,  a Court of Appeal for England and Wales from 13 November, shows that when it comes to disqualifying computer software from patentability [or patent eligibility, as the Americans prefer to call it] on the basis that it doesn't disclose an invention, the Brits can do the job at least as elegantly as the Yanks. The court, consisting of Lord Justice Kitchin together with Lady Justices Arden (who delivered the main judgment) and Gloster, also had a chance to revisit the Court of Appeal's earlier decision in the combined appeals in Aerotel/Macrossan -- and its three-or-is-it-four-step test of excluded subject matter, a test motivated by the alarm bells set off by the UK Intellectual Property Office when the number of hearings concerning patentability of computer programs had risen from just a couple a year to around four a week.

The following note on Lantana is brought to you via the good services of our good friend and occasional guest contributor Paul England (Taylor Wessing LLP), who writes as follows
Data transfer method makes no technical contribution

The Court of Appeal has held the invention disclosed in a patent application by Lantana Limited to be excluded from patentability, as a computer program “as such”.

Lantana’s application was for a method of extracting and transferring data between two computers, involving the computers being linked up to the internet and one making a request to the other for a file.  The local computer has a list of the documents on the other computer. The user of the local computer sends an email message to the other which automatically responds by sending a message to the local computer with the file attached. The virtue of the invention, Lantana claimed, is that it saves the need for continuous connection to the remote computer and the risks of being hacked while connected, or losing the connection. But does this make it patentable?

The appeal focused on section 1(2) of the UK's Patents Act 1977 [= European Patent Convention Art.52], which excludes patents for computer programs unless the invention goes beyond the computer program “as such”. Accordingly, following the four-step test in Aerotel Ltd v Telco Holdings Ltd; Macrossan’s Patent Application [2006] EWCA Civ 1371, if the invention makes a contribution that is technical in nature, then the invention may be patentable, subject to other objections to patentability – novelty, inventive step etc. 
While there is no comprehensive test for identifying a technical contribution, the courts have established a number of “signposts” to assist (AT&T Knowledge Ventures’ Application [2009] EWHC 343 (Pat), [2009] FSR 19 (as refined)). However, both the Hearing Officer of the UKIPO and Birss J, in the Patents Court, held that these did not assist Lantana in this case; there was no identifiable effect outside the computer program itself, such as making a better computer. As the Hearing Officer said: 
any increase in the reliability of the data retrieval process is solely due to the use of e-mail rather than any other communication method. There is no evidence of either of the two computers or the network being intrinsically more reliable themselves” 
and that, as regards the connectivity problem, 
“The contribution cannot be said to solve the problems identified. Rather it circumvents the problems of maintaining a good continuous connection by simply not using a continuous connection. 
Birss J concluded simply that “In substance the claim relates to computer software running on conventional computers connected by a conventional network”. The Court of Appeal has agreed, holding that the invention is excluded matter, having no relevant technical effect.
What is a lantana? Click here to find out
Lantana the movie here
Latest Australian jurisprudence on the same issue in Research Affiliates LLC v Commissioner of Patents [2014] FCAFC 150, noted on Patentology here.

Tuesday, 18 November 2014

Seeing stars and non-dominant rabbits: a couple of trade mark decisions and a rant

Seeing stars.  All sorts of things have been occupying this Kat's attention for the past few weeks so he hasn't been able to bring you any thoughts or comments about some of the more interesting Community trade mark (CTM) cases that have come from the EU's General Court. In one of these cases, Case T-342/12, Max Fuchs v OHIM, Les Complices, decided back in October, the General Court was faced with an opposition by Les Complices, the owner of CTM and French registrations for the five-pointed star on the left, maintaining that there was a likelihood of it being confused with the CTM applicant's five-pointed star on the right in respect of bags and clothing. Yes there was, said the court in upholding the Board of Appeal's decision, since they were visually similar, and conceptually identical and covered both identical and similar goods.

Now this is the interesting bit: the Board of Appeal's decision was based only on the opponent's earlier CTM -- which was revoked by OHIM's Cancellation Division after the Board gave its decision but before the General Court heard the appeal. Fuchs appealed, arguing that the opposition was devoid of purpose to the extent it was based on the earlier, now dead, CTM. No, said the court: not only could it be said that the opponent did have a legitimate interest in the opposition, but it was also the case that, since revocations don't have retrospective effect, they can't be taken into account anyway.


Another interesting General Court ruling from early October can be found in Joined Cases T-122/13, T-123/13 and T-77/13 Laboratoires Polive v OHIM, Arbora & Ausonia SLU. Here an OHIM Board of Appeal upheld in part a set of oppositions to registration as a CTM of the word mark DODIE and two figurative signs containing the word DODIE (one in blue, shown here, the other in black and white) on the basis that they would likely be confused with earlier Spanish and Portuguese registrations of the word mark DODOT for a range of toiletries and babycare products. Said the court, setting aside the Board's decisions, the diphthong "ie" was unusual both in Spanish and in Portuguese. What's more the intonation and rhythm likely to be adopted by any Iberian trying to pronounce that word would be markedly different from the more familiar "ot" of DODOT. These differences reduced the visual and phonetic similarity to such a degree that no likelihood of confusion would arise in the minds of the relevant public.  There was also the small matter of a rabbit which -- contrary to the opponent's argument -- could not be said to be a negligible part of Laboratoire Polive's marks, even though the word itself remained the dominant element [hint to CTM applicants: maybe a smaller font and a more dominant rabbit are advisable in instances such as this ...].


Trade mark oppositions:
don't expect a quick result
Says Merpel: in the first case the opposed CTM application was filed in December 2006; that's nearly eight years ago.  In the second case, the opposed application was filed more recently, this being just four and a half years ago.  In terms of litigation a few years is no big deal -- but in terms of businesses and their commercial plans, it's a hugely long time.  Merpel continues to believe that, for the sake of businesses and the markets in which they trade, oppositions based on likelihood of confusion alone should never be allowed to grind along at a snail's pace. She repeats, endlessly, something that other Kats have said from time to time: we are not talking about something as profound and technically difficult to resolve as the relationship of the claims in a patent to possibly relevant prior art: we are talking about whether, for example, the use by two different businesses of, in one case, the word DODOT and a logo with a rabbit and, in the other case, the word DODIE are likely to confuse purchasers of toiletries and babycare goods.

Not amused; confused
If the test of likelihood of confusion is treated as an issue of fact and not treated to some pseudo-scientific regime of legal tests and formulae which -- though we are used to them -- appear ridiculous to the layman, we can fast-track oppositions and deal with them in a matter of weeks, if not days. It would be great if some trade mark-granting office could experiment by setting up an opposition "hit squad" to tackle each opposition as soon as it arises, getting the parties together on Skype (or some other conferencing medium) and assembling a sample panel of relevant consumers who can act as guinea pigs when shown the marks and say "yes, we are confused" or "don't be so silly!"

"The claim from Spain is heading down the drain ..." as Bot smacks challenge to unitary patent

"Sin comentarios" -- or should that
be "sense comentaris"?
Readers of this weblog will know that the Spanish have not been happy about the legality of Europe's new unitary patent and that, back in 22 March 2013, they initiated proceedings before the Court of Justice of the European Union (CJEU) to test out their hypotheses. Cases C-146/13 and C-147/13 Kingdom of Spain v European Parliament and Council of the European Union have now both reached the point at which Advocate General Bot has published his Opinion, which means that all that is left now is for the CJEU to determine whether it will follow his guidance (as happens around 80 per cent of the time) or articulate its own reasoning.

In C-146/13 Spain sought an order that would
* declare legally non-existent Regulation 1257/2012 implementing enhanced cooperation in the area of the creation of unitary patent protection and, in the alternative, annul that regulation in its entirety; or
* annul
(a) Article 9(1) in its entirety, and Article 9(2) in the terms set out in the fifth plea in law in support of this action [Article 9 deals with 'Administrative tasks in the framework of the European Patent Organisation'];
(b) Article 18(2) [which deals with entry into force] in its entirety, and all references in Regulation 1257/2012 to the Unified Patent Court as the judicial regime for the EPUE [European patent with unitary effect] and as the source of law for the EPUE.
In short, Spain's position was based on the following submissions:
  • there had been "breach of the values of the rule of law" in so far as a regulation has been established on the basis of a right granted by the European Patent Office, whose acts are not subject to judicial review [strange, isn't it, that suddenly issues concerning the EPO's governance and regulation just seem to be occupying centre strange ...].
  • non-existence of an act of the European Union and, in the alternative, lack of a legal basis for Regulation 1257/2012 in that it does not introduce measures guaranteeing the uniform protection envisaged in Article 118 of the Treaty on the Functioning of the European Union (TFEU) [European Parliament and Council to establish measures for the creation of European IP rights to provide uniform protection of IP rights throughout the Union and to set up of centralised Union-wide authorisation, coordination and supervision arrangements. Council to establish language arrangements for the European IP rights, acting unanimously after consulting].
  • misuse of power through the use of enhanced cooperation for purposes other than those provided for in the Treaties.
  • infringement of Article 291(2) TFEU and, in the alternative, misapplication of the Meroni case-law [on the delegation of powers by EU institutions to regulatory agencies] in the regulation of the system for setting renewal fees and for determining the 'share of distribution' of those fees.
  • misapplication of the Meroni case-law in the delegation to the European Patent Office of certain administrative tasks relating to the European patent with unitary effect.
  • breach of the principles of autonomy and uniformity in the application of European Union law, as regards the rules governing the entry into force of Regulation 1257/2012.
C-147/13, which also raised Meroni issues, was principally directed at an alleged infringement of the principle of non-discrimination by introducing a scheme to the detriment of persons whose mother tongue was not English, French or German, such a scheme being disproportionate to the objective pursued.

Today the Advocate General has advised the CJEU that Spain's action should be dismissed. According to the Curia media release, reproduced here in full:
"Advocate General Yves Bot: Spain’s actions against the European regulations implementing enhanced cooperation in the area of the creation of unitary patent protection must be dismissed

The unitary protection conferred provides a genuine benefit in terms of uniformity and integration, whilst the choice of languages reduces translation costs considerably and safeguards better the principle of legal certainty

The current European patent protection system is governed by the Convention on the Grant of European Patents. That convention provides that, in each of the Contracting States for which it is granted, the European patent is to have the effect of and be subject to the same conditions as a national patent granted by that State.

Through the ‘unitary patent package’, the EU legislature sought to confer unitary protection on the European patent and establish a unified court in this area.

Spain seeks annulment of the two regulations forming part of that package, namely the regulation on the creation of unitary patent protection conferred by a patent and the regulation governing the applicable translation arrangements.

In his Opinion in both cases, [Katnote: the bold black text that follows is all in the Curia media release: it's designed to aid the reader who is just skimming for the juicy bits] Advocate General Yves Bot proposes that the Court of Justice should dismiss Spain’s actions.

As regards the creation of unitary patent protection conferred by a patent (Regulation No 1257/2012), the Advocate General observes that the sole purpose of the contested regulation is to incorporate recognition of unitary effect through a European patent already granted under the Convention. To that end the EU legislature limited itself to stating the nature, conditions for grant and effects of unitary protection, covering only the phase subsequent to the grant of the European patent. The regulation only attributes to European patents an additional characteristic, namely unitary effect, without affecting the procedure regulated by the Convention. The protection conferred is regulated by the uniform implementation provisions of the regulation. That protection brings real benefit in terms of uniformity and hence of integration compared with the situation resulting from the implementation of the rules laid down by the Convention (rules which, in every one of those Contracting States, guarantee protection whose extent is defined by national law). In fact, under the Convention, the effects of the European patent are determined by the national legislation of each Contracting State in respect of which it is granted. Until the regulation becomes applicable, the proprietor of the European patent was therefore obliged to apply for registration of his European patent in each State which was a party to the Convention in which he wished to receive protection. This also meant that, for the same offence committed in a number of Member States, there were as many different procedures and laws applicable to the settlement of disputes, which caused considerable legal uncertainty.

The Advocate General explains that the regulation is not an ‘empty shell’, when the provisions made by it are sufficient and the EU legislature’s competence is shared with the Member States. The Advocate General considers that the EU legislature was able to make reference to national law by providing that the acts against which the European patent provides protection and the applicable limitations will be those defined by the applicable law of the participating Member State. This does not mean, for all that, that the uniform protection will not be guaranteed. Each European patent will be subject to the national law of a single Member State and that legislation will apply throughout the territory of the Member States participating in the enhanced cooperation.

The regulation assigns to the participating Member States the power to set the level of renewal fees for European patents with unitary effect and determine the share of distribution of those fees. In the Advocate General’s view, the exercise of that power takes place within a legislative framework established and clarified by the EU legislature which does not need to be implemented under uniform conditions in all the Member States.

Spain claims that the regulation provides for a specific judicial regime for the European patent with unitary effect which is contained in the Agreement on a Unified Patent Court. It claims that the content of that agreement affects the Union’s powers and confers on a third party the power to determine unilaterally the application of the regulation. The Advocate General takes the view that the Court does not have jurisdiction to review the content of the Agreement on a Unified Patent Court in an action for annulment of the regulation. The Advocate General observes that the Agreement on a Unified Patent Court does not fall within any of the categories of acts the lawfulness of which is subject to judicial review by the Court. It is an intergovernmental agreement negotiated and signed only by certain Member States on the basis of international law. Moreover, the regulation does not approve an international agreement or implement such an agreement, but is intended to implement enhanced cooperation in the area of creation of unitary patent protection.

Spain claims that the application of the regulation is absolutely dependent on the entry into force of the Agreement on a Unified Patent Court, and that the effectiveness of the power exercised by the European Union through the contested regulation thus depends on the will of the Member States which are party to the Agreement on a Unified Patent Court. The Advocate General states that the EU legislature provided for the establishment of a court having jurisdiction in respect of European patents with unitary effect, to be governed by an instrument setting up a unified patent litigation system for European patents and European patents with unitary effect. The EU legislature considered that the establishment of such jurisdiction was essential in order to ensure the proper functioning of the European patent with unitary effect, consistency of case-law and hence legal certainty. In the Advocate General’s view, the objective of the regulation is to ensure such proper functioning. It would be contrary to such principles to apply the contested regulation when the Unified Patent Court has not yet been established.

The principle of sincere cooperation requires the participating Member States to take all appropriate measures to implement enhanced cooperation, including ratification of the Agreement on a Unified Patent Court, as such ratification is necessary for its implementation. By refraining from ratifying the Agreement on a Unified Patent Court, the participating Member States would infringe the principle of sincere cooperation in that they would be jeopardising the attainment of the Union’s harmonisation and uniform protection objectives. Moreover, the link between the regulation and the Agreement on a Unified Patent Court is such that it would have been inconsistent not to make the application of the contested regulation conditional on the entry into force of that agreement.

As regards the language arrangements, (Regulation no 1260/2012) the Advocate General recalls that EU law has no principle of equality of languages. He acknowledges that persons who do not know one of the official languages of the European Patent Office (German, French and English) will be discriminated against and that the EU legislature has thus put in place a difference of treatment. Nevertheless, the Advocate General takes the view that that choice of languages pursues a legitimate objective and is appropriate and proportionate to the guarantees and aspects which attenuate its discriminatory effect.

Currently the system of protection under the European patent is characterised by very high costs, which impede patent protection in the European Union. The system introduced is aimed at ensuring unitary patent protection throughout the territory of the participating Member States whilst avoiding excessively high costs by establishing the language arrangements. This will avoid a situation where economic operators must lodge multiple applications for national validation, with the associated translation costs. The Advocate General highlights the difference in this regard between the European patent with unitary effect and another intellectual property right, the Community trade mark. The patent involves the translation of documents which are more technical, lengthy and complicated to translate. The language arrangements chosen do certainly entail a curtailment of the use of languages, but they pursue a legitimate objective of reducing translation costs.

The Advocate General explains that to limit the number of languages for the European patent with unitary effect is appropriate because it ensures unitary patent protection throughout the territory of the participating Member States whilst enabling a significant reduction in translation costs to be achieved. The Advocate General adds that, if those costs are to be kept down, the EU legislature has no choice but to restrict the number of languages in which the patent must be translated. Since the languages in question are the official languages of the European Patent Office, that choice ensures a certain stability for economic operators and professionals in the patent sector, who are already accustomed to working in those three languages. Moreover, the choice of languages acknowledges the linguistic realities of the patent sector: (i) most scientific papers are published in German, English or French [why does Merpel think most such papers are published in Chinese? Is this just a rumour ...?]; and (ii) those languages are spoken in the Member States from which most of the patent applications in the EU originate.

The Advocate General takes the view that that choice also complies with the principle of proportionality. During the transitional period, all European patents with unitary effect will be available in English. After that time, the European Patent Office will have a high-quality automatic translation system. A compensation scheme to reimburse translation costs up to a certain ceiling is planned for people who have not filed their application for a European patent in one of the official languages of the European Patent Office.

The Advocate General observes that the principle of legal certainty is undeniably better safeguarded when one language is authentic (in the case of the European patent with unitary effect, it will be the language of the case). If all translations were authentic, there would be a risk of discrepancies between the different language versions, which would give rise to legal uncertainty".
This Kat expected as much, and strongly suspects that the CJEU will rule the same way.  What do readers think?

At the point of publishing this blogpost, the full text of the Advocate General's Opinions has not yet been made available.

Teach yourself English here
Teach yourself German here
Teach yourself French here
Esperanto, anyone? Click here

The finances of the European Patent Office - Merpel takes a look

Merpel was in the process of deciding between duck with animal derivative sauce and fisherman’s feast when another type of derivative caught her eye.  Leaving her saucy decision to the side, she though she’d paw through the 2013 financial statements of the European Patent Office. Readers can find them here [pdf].

How does the EPO have a balance sheet of a small profit, larger comprehensive income, assets of nearly €8 bn and liabilities of €12.4 bn?  The answer boils down to its pensions liability. All of this is of great interest to EPO employees and contracting states.

Unlike the occasional bank, the EPO cannot go bankrupt, as contracting states are obliged to finance any deficit. Renewal fees from EPO granted patents contribute the majority of many offices’ revenues.   For national offices, the EPO is both a major source of income and possibly their biggest liability.

Employees are no doubt interested, as recent strikes demonstrate, and the true financial position of the EPO has been an issue in contention in the current employee unrest.  EPO employees are also in an unusual position where they are highly skilled but have few non-EPO employment options.


How did the EPO get to this position?  In 2009, the defined benefit liability (which includes pensions) was only €5.9 bn (even in 2013 Euros, that is only €6.8 bn) compared to the current estimate of €11.1 bn.

Projecting the gains and losses associated with the pension’s liability is an art, not a science (Merpel sniffs at this as her crystal ball always predicts when dinner will arrive.)  There are assumptions and uncertainties in financial projections that can change. For example, an increase in one month of life expectancy at retirement age increases the EPO’s pensions liability by nearly €11 million (this perplexes Merpel, surely every cat has nine lives?)

However, the answer lies in discount rates. The main change between estimates in 2009 and 2013 is that the discount rates used to value future pension obligations dropped from 5.3% in 2009 to 3.9% in 2013.

 How are these magical discount rates set?  The EPO uses actuaries who calculate rates using the interest rates of corporate bonds.  In the aftermath of the 2008 financial crisis, governments began dropping their interest rates and corporate returns followed.  Quantitative easing kicked in, returns dropped further and we now have ballooning pensions deficits across Europe.

For readers who drifted off in the last paragraphs, here is the headline: investment returns have gone way down, so the amount of money need to fund future payments (pensions) has gone way up.

Renewal fees

Unusually, the EPO cannot include future renewal fees in its statements.  This is despite the fact that renewal fees, not procedural fees, cover the costs for EPO-granted patents. However, renewal fees are not a legal obligation and are not counted in all statements.  At the same time, the EPO is required to take them into account when setting its procedural fees.  The 2013 statement estimates future renewal fees as €3.5 bn.

Merpel thinks this is a tricky situation to be in, but it is probably fine as long as patent applications continue to increase.  She also sees this as prudent, as Tesco’s strategy of timing costs and incomes has made her rethink her sardine supplier.

Other mew-sings

How can the EPO afford a new building?  This is where the financial world of numbers splits from the practical world of bricks. Accounting calculates wear and tear on buildings as a cost (depreciation.)  The Hague building has been depreciated to zero as it is at the end of its useful life.  The new building will be listed, not at its market value, but as an asset equal to its price tag minus any depreciation. This can make the gleaming building a bargain, as the annual depreciation may be less than the equivalent rent.

Finally, what about assets of nearly €8 bn? Just over €5 bn of this is the pensions fund itself.  The other €2.8 bn are a mix of tangible and intangible assets, bonds, home loans to staff and other assets.  These assets represent the savings account for the EPO, which has a stabilising influence and serves as a rainy day fund. The question remains whether the pensions liability truly is a storm.

Overall, the EPO faces future incomes that are fairly fixed (patent fees) and costs that are volatile and have seen unprecedented increases (pensions.)   Additionally, it can’t include the bulk of its income (renewal fees), estimated to be €3.5 bn.  This still leaves €8 bn + €3.5 bn = €11.3 bn < €12.4 bn.  Readers may be right to withhold final judgement, as the past decade has demonstrated how wrong financial predictions can be.

What might change this?  Improvement in the economy could reduce liability and increase total fee income.  Yet life expectancy and higher health care expenses are increasing and may increase the pension liability.

Before she returns to her dinner deliberation, Merpel notes that she is not an actuary and hopes that that informed readers will correct her if she’s got the wrong end of the catnip. An enigma wrapped in a tasty conundrum, the EPO’s statements are food for thought.

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