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IP & IT

Battleships: Titanic Spa hits Titanic Hotel but doesn’t sink it
Thursday 5th January 2017

What began as a brutal battle between two northern getaways has ended with a bit of a whimper after Titanic Huddersfield, which runs Titanic Spa, successfully claimed infringement and passing off of its TITANIC SPA trade mark against Titanic Liverpool, the owner of Titanic Hotel Liverpool.

However, Titanic Liverpool had already rebranded the infringing spa service and included disclaimers which the court found were sufficient to avoid infringement, and further Titanic Huddersfield failed in its challenge of the mark TITANIC QUARTER, making Titanic Huddersfield’s victory effectively pyrrhic.

The High Court considered three sets of proceedings. Firstly, an appeal by Titanic Liverpool’s licensor, Titanic Belfast, against an earlier decision at the UK Intellectual Property Office (UKIPO) to cancel its TITANIC QUARTER trade mark. Secondly, a claim by Titanic Huddersfield for infringement and passing off against Titanic Hotel Liverpool for its use of the TITANIC SPA mark. Thirdly, a claim by Titanic Liverpool for infringement of its device mark and an injunction against Titanic Huddersfield relating to its use of the term ‘TITANIC’.

Titanic Liverpool’s appeal against an earlier UKIPO decision

The TITANIC QUARTER trade mark was owned by Titanic Belfast, but used by Titanic Liverpool in a licensing arrangement.  The mark had been cancelled in March 2016 on the basis of non-use, following a UK IPO Hearing Officer’s decision not to admit further evidence of use into the proceedings. Titanic Liverpool subsequently appealed the decision.  On appeal, the High Court held that further evidence should have been admitted. The appeal was allowed, Titanic Liverpool was successful and the mark was declared valid.

Titanic Huddersfield’s claim

Titanic Hotel Liverpool was operating a spa which it branded as ‘T-Spa’.  Following correspondence with Titanic Huddersfield, owners of Titanic Spa, Titanic Liverpool agreed to rebrand the facility as ‘The Spa’ and then, later, as ‘Maya Blue Spa’. However this conciliatory move was not sufficient to prevent a claim being issued.

At court, Judge Henry Carr held that the TITANIC SPA mark had an ‘enhanced distinctive character’ as a result of the use made of it. The average consumer, it was found, may believe that the goods or services provided under the names of the claimant and defendant came from the same, or economically linked undertakings. It was held that Titanic Hotel Liverpool had infringed the TITANIC SPA mark.

The court recognised that Titanic Hotel Liverpool had taken steps to avoid confusion, namely in rebranding its spa. It was thus decided that the placement of a prominent notice on its website distancing its services from those of Titanic Spa, alongside its ceasing use of the word ‘spa’ in connection with its hotel, would be sufficient. This would allow Titanic Hotel Liverpool to then rely on the ‘own name defence’ in the future. As such, no injunction was deemed necessary.

Justice Carr also considered a claim by Titanic Spa that Titanic Hotel Liverpool’s action amounted to passing off. For a claim in passing off to succeed, the claimant must show that it has goodwill/a reputation in the mark and that the defendant’s use of the sign is a misrepresentation which has caused, or is likely to cause, damage to the claimant.

It was held that, prior to rebranding as ‘Maya Blue Spa’, Titanic Hotel Liverpool had been passing off through its use of the term ‘The Spa’. The judge ruled that the notice on the hotel’s website which indicates that the entity is not connected to Titanic Spa would ensure that passing off did not continue.

Titanic Liverpool and Titanic Belfast’s claim

Titanic Liverpool operates Titanic Hotel Liverpool under licence from Titanic Belfast. Titanic Belfast claimed, in this part of proceedings, that should there be a likelihood of confusion between Titanic Spa and Titanic Liverpool, then the same should apply between Titanic Belfast and Titanic Spa, and thus an injunction against Titanic Huddersfield’s use of the sign ‘Titanic Spa’ should be granted.

The judge did not agree with this, as he found a conceptual difference between the TITANIC SPA and TITANIC QUARTER marks. He also found a lack of evidence of confusion between the marks, and a lack of competition between Titanic Huddersfield and Titanic Liverpool. Accordingly, the challenge to the TITANIC SPA mark by Titanic Belfast failed.

Conclusion

This dispute began in 2014. It is multi-faceted and complex, and will therefore have been costly. The cumulative result of the dispute thus far is an order by the High Court that Titanic Hotel Liverpool place a ‘prominent’ disclaimer on its website, distancing itself from the services provided by Titanic Huddersfield, and that it should also cease reference to the word ‘spa’ in relation to its hotel. In the future, however, preventing the use of the term ‘spa’ for spa services is unlikely to be easy.

Although Titanic Huddersfield was technically successful in this case, it may face difficulties in claiming damages from Titanic Hotel Liverpool, as evidence provided by the spa showed that it enjoyed 96% occupancy. It is likely therefore that the damages that Titanic Liverpool will be ordered to pay will be minimal.

As previously mentioned, given the length and complexity of this dispute it is likely to have been costly.  Unsuccessful parties must usually pay at least a portion of the successful party’s costs. However, in this case, as Titanic Hotel Liverpool made multiple attempts to rebrand its spa service, it is likely that it will not have received a particularly onerous costs award against it.  Therefore, in reality, any damages received by Titanic Huddersfield may be outweighed by a less favourable costs award.

By rebranding its spa, Titanic Hotel Liverpool likely prevented a more costly and damaging judgment from being made. This case highlights the importance of attempting peaceful dispute resolution where possible. Taking steps to pacify your opponent may ultimately make the difference between a relatively favourable, and highly unfavourable decision being made at court.


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Plumb out of luck – Two bathroom companies held liable for each other’s ‘confusing’ keyword use
Friday 25th November 2016

Plumb out of luck – Two bathroom companies held liable for each other’s ‘confusing’ keyword use

A recent High Court decision (Victoria Plum Ltd (t/a Victoria Plumb) v Victorian Plumbing Ltd & Ors [2016] EWHC 2911 (Ch) (18 November 2016)) has added to the case law which discusses ‘keyword bidding’, after it was held that keyword use in this particular instance was likely to lead to ‘confusion’.

This is a significant issue for e-commerce businesses, especially online retailers (or e-tailers) which utilise competitors’ trade marks as keywords in their search engine strategies. Previously, the leading case in the UK was Interflora v Marks and Spencer [2014] in which the Court of Appeal reversed a High Court finding of infringement and sent the case back to the High Court for retrial. See our previous blog on this topic here.

What is ‘keyword bidding’?

Keyword bidding is a practice whereby commercial entities bid online for certain specified terms (or ‘keywords’) on platforms such as Google. The winner of the bid will appear at the top of any subsequent internet searches for the specified term, as an advertisement.

The established principle regarding keyword use and trade mark infringement states that ‘the function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty’ to decipher the origin of goods related to that trade mark.

What happened in this case?

Victoria Plum Limited (Victoria) brought a claim for infringement of registered trade mark against Victorian Plumbing Limited (Victorian), which had been bidding heavily for - and using - the ‘Victoria Plumb’ keyword over a number of years. Victoria had already registered ‘Victoria Plumb’ as a national trade mark.

Victoria alleged that this keyword confused the public to a significant degree, and that by bidding for the keywords associated with Victoria, Victorian was using signs identical or confusingly similar to the trademarks of Victoria.

Victorian counterclaimed for passing off, on the basis that the Victoria had historically bid for the term ‘Victorian Plumbing’ as keyword, which relates directly to Victorian’s business.

‘Honest concurrent use’

Victorian also attempted to run the defence of honest concurrent use, whereby long term, honest use of confusing marks between two entities of the same or similar name restricts the ability of either one of the entities to suddenly deny the other of their right to use a mark due to confusion.

The defence was not accepted by the court because:

  • Honest concurrent use entitles a defendant to continue to use its own mark. In this case, the defendant is not using its own mark, but the mark of a competitor.
  • There is no honest use as Victorian has only used the mark complained of as a result of keyword bidding.
  • If the defence was to succeed, then hypothetically the Defendant would be entitled to apply to register the marks ‘Victoria Plumb’ and ‘Victoria Plum’, which cannot be correct.
  • Honest concurrent use arises where a mark has become a guarantee of origin of two unrelated entities, so that it is not an exclusive guarantee of origin of either. In this case, it is clearly an exclusive guarantee of origin of Victoria alone.

Decision

The claim and counterclaim were accepted by the court, due to the ‘propensity for confusion’ which the keywords induced, which was no doubt exacerbated by the confusingly similar trading names of the companies.

The decision references the earlier Court of Appeal and CJEU decisions in Interflora and Google France [2010] Joined Cases C-236/08 and C-236/08   respectively, and also confirmed that keyword advertising was not inherently objectionable. On the contrary, keyword advertising was to be encouraged as fair competition, provided that the origin of the alternative goods or services was clear. The High Court held that the case law establishes the following:

  • A user who searches by reference to a brand name is likely to be looking for that brand. In this context, there is a particular propensity for confusion if the resultant advertising is vague as to origin; Google France at [85]; Interflora at [132].
  • This explains the particular emphasis on ‘transparency’ in the judgement of the CJEU. The reason why transparency is necessary is to protect the consumer from unclear advertising which, in context, is liable to mislead; Google France at [86] – [87]; Interflora at [143].
  • On the other hand, bidding on trade marks as keywords, where the advertiser ensures that his advertisements enable average internet users to ascertain whether the goods or services originate from the trade mark proprietor or an unconnected third-party, cannot be objected to; Google France at [57] – [59]; Interflora at [98].

Conclusion

Whether or not an advertisement enables the average internet user to ascertain whether the goods or services originate from the trade mark proprietor or an unconnected third party, will be a matter to be decided on the individual facts of each case (which is likely to include consideration of the keyword advertising analytics).

This decision may cause e-tailers employing online keyword advertising to reassess their strategies.

The IP team at Brabners have significant experience of keyword bidding disputes. For more information regarding keywords, to discuss your search engine strategies or use of your trade marks by third parties, please contact Colin Bell or one of the Brand Protection Team at trademarks@brabners.com.

 

 

 


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Piracy in a box: Are some set-top boxes infringing copyright?
Monday 3rd October 2016

Everybody knows someone who has, at one point or another, illegally streamed or downloaded some form of copyright protected material. Favourite songs, movies, or must-see football matches can often be found illegally online free of charge.

Illegal streaming and downloading is a growing problem for copyright holders. Infringement is easy - illegal content is often readily available and with few warnings of its illegality, infringers often feel detached from the act. It is also not practical for actions to be brought against everyone who chooses to pirate content. Many perceive the only drawback of streaming to be a lower image and sound quality, and even this is not always the case.

Set-top boxes allow users to stream video and music files. One type of set-top box in particular, Kodi, includes the ability to install plug-ins to stream from a number of services including Amazon and Youtube.

Kodi is open-source, free software which was originally used on the Xbox console to provide easily accessible media in the form of an ‘app’. The software is not restricted to Xbox, and can also be installed on set-top boxes to be connected to a television, hence the Kodi box. Using Kodi software itself is not piracy, however a number of third parties have added ‘extensions’ to the boxes which allow the illicit circumvention of subscription pay walls (for example to Sky) and are selling these as ‘fully-loaded’ Kodi boxes.

In a recent case, an individual trader has been selling so-called fully-loaded boxes, and is accused of selling a device primarily designed for circumvention of effective technological measures, for example pay walls, which protect copyright work. The success of the case depends somewhat on the interpretation of the individual’s intention in selling the devices. The law states that the device or product on sale must be ‘primarily’ for the purpose of breaching copyright. If it could be successfully argued that the primary use of the box is not to breach copyright then the case may fail.

The Federation Against Copyright Theft (FACT) have announced that fully-loaded streaming devices constitute around half of its inquiries, whilst the IP Crime Report 2015/2016 has identified that such devices are a main challenge for the UK Intellectual Property Office. While we await the outcome of the trial, a successful infringement action may go at least some way to putting the lid back on a blasé social attitude to intellectual property crime.


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The link between illegal content and copyright infringement
Monday 19th September 2016

Some have difficulty imagining life without the internet, and I reluctantly count myself in that number.  I am only one year older than the public commercial use of the internet, so have technically ‘grown up’ with Tim Berners-Lee’s invention but even by the age of 16 my school had just 50 computers available for 1,500 students and none of them were attached to the world wide web.  It is fair to say that internet use and exploitation has grown rapidly in the intervening years.

The speed at which we have become so accustomed to the internet has left the laws which govern much of its use struggling to foresee the future. There is nowhere that this is more apparent than in intellectual property. To accommodate for streaming services and You Tube, Skype, hashtags, adwords and everything in between our laws are constantly having to be interpreted on a case-by-case basis.

Most recently, it is the use of hyperlinks that has been the subject of scrutiny in the Dutch case of GS Media v Sanoma Media Netherlands BV, Playboy Enterprises International Inc and Britt Geertruida Dekker (decision here).

In accordance with EU law, the owner of a copyright work has the exclusive right to communicate that work to the public.  In this case a number of third parties infringed the copyright in some photographs which were to be published in Playboy magazine, by publishing a link to an electronic file containing the photographs, on their websites.  At the copyright owner’s request, many of these links were subsequently removed.

GS Media ran a news website called GeenStijl which operated for profit, making its money from the advertisements on the site.  GS Media published links on its website to the links on the third party websites.  It refused to remove these links at the copyright owner’s request and each time the links stopped working it would publish a link to a new infringing site.

The national court of the Netherlands referred to the Court of Justice of the European Union (CJEU).  The question to be decided was whether the fact of posting on a website, hyperlinks to protected works, which are freely available on another website without the consent of the copyright holder, constitutes a ‘communication to the public.’  The CJEU issued its decision on 08 September 2016.

The CJEU decided that the provision of a hyperlink on a website to content that has been illegally placed on the internet constitutes a ‘communication to the public’ if the poster knew or ought to know that that work was published illegally.

It also constitutes an infringement if the hyperlink allows users to circumvent restrictions on the site where the protected work is posted, for example paywalls or subscriptions.

Further, if the posting of the hyperlink is carried out for profit, it is expected that the poster carried out necessary checks to ensure that the work has not been illegally published.  Therefore knowledge of the infringing nature of illegal content is presumed and this constitutes a communication to the public.

Arguably, based on the English translation of the case, the requirements that the poster 1) knew (or ought to know) or that the works were published illegally, and 2) that they acted for financial gain are not cumulative.  Some commentators have suggested that both requirements must be met in order to succeed in an infringement, though this is not how my colleagues and I read the case.  That said, there may be a translational difference.

In the case at hand, GS Media provided the hyperlinks for profit and knew that the photos had been published without the copyright owner’s permission.  It therefore would seem that the national Netherlands courts will find that GS Media is infringing copyright.

Given the circumstances in which knowledge of infringing content is assumed I consider that more parties will be held to be infringing copyright as many more cases are brought in light of the above decision.

From a practical point, putting the other side on notice of your rights by giving them a take-down request would be a sensible first step in any potential copyright infringement action.


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Thinking out loud about copyright claims
Tuesday 23rd August 2016

Ed Sheeran is unlikely to be singing Lucky, Lucky Me this summer, after being hit with a second set of proceedings for allegedly infringing copyright.

The estate of Ed Townsend, the co-writer of Let’s Get It On - which was made a hit by Marvin Gaye - is certainly not getting on with Ed Sheeran, who they accuse of taking the ‘heart’ of the track and transplanting it into Thinking Out Loud, which was a UK No 1 for Sheeran and won Song Of The Year at the 2016 Grammys.

Lawyer Richard Busch is representing the estate. He also represents the writers of Matt Cardle’s hit ‘Amazing’, who are suing Sheeran for allegedly substantially copying that in ‘Photograph’. Perhaps notably, Matt Cardle himself has resiled from the claim.

Last year Busch sued Pharell Williams and Robin Thicke over Blurred Lines on behalf of the estate of Marvin Gaye, a case in which he successfully proved that Williams and Thicke had copied Got To Give It Up, resulting in a $7.3m damages award.

Arguably it was the size of that award that has led to many similar claims being filed. At a time when royalties are low due to the state of the music industry, it is possible that those involved in bringing the claims have an eye towards alternate revenue sources.

Here in the UK damages tend to be less than the headline-grabbing awards made in the US, partly due to the fact that in the US a jury decides on the claim and the amount of damages. Infringement has a two-tier damages system – basic damages, which usually reflect what a willing licensor and licensee may have agreed; and additional damages based on the flagrancy of the infringement and the benefit which accrued, or, under EU legislation damages to reflect ‘unfair profit’ if indeed the infringer has made one.

This claim, like the ones relating to Amazing and Blurred Lines, is being brought in the US. There, like here, each case depends significantly on its facts and the evidence. In Blurred Lines, the argument centred around the ‘groove’ or feel of the track. Whether that is capable of being protected by copyright is questionable. Although in the UK we do have a concept of ‘look and feel’ in copyright infringement, in this case it was possible to show that a substantial part of the musical annotation of the rhythm of Blurred Lines was almost identical to Got to Give It Up – its origins were instantly recognisable.

In the case of Amazing, the writers are arguing that there are 39 identical notes between it and Sheeran’s track Photograph. For such an argument to succeed in the UK, there would need to be claim that there was a ‘substantial’ part of the work copied. The test is qualitative rather than quantitative. In for instance the case involving the Bluebells’ track ‘Young at Heart’, Bobby Valentino won the right to royalties for 4 bars of violin music, which opens the track, is then repeated throughout it and is instantly recognisable – so is therefore qualitatively substantial.

In that case Bobby Valentino was also given a writing credit, which is how many cases settle. Earlier this year Rolling Stone reported that Sam Smith has given Tom Petty writing credit for ‘Stay With Me’, after acknowledging coincidental similarities between that and Petty’s hit ‘Won’t Back Down’. It is unclear whether the credit did or will attract royalties.

In respect of Thinking Out Loud, it is alleged that the chord progression is the same as Let’s Get It On. Some commentators have pointed to a YouTube video of Sheeran slipping from Thinking Out Loud to Let’s Get It On at one of his concerts, suggesting it in some way demonstrates Sheeran acknowledges the similarities between the two songs. However, perusal of videos from his concerts show that mashing songs together is simply something Sheeran does at concerts – it is a part of his set. In the past he has put Thinking Out Loud with I Will Always Love You, and his rap song Take it Back with both Superstition and Ain’t No Sunshine – all very different but made to work by Sheeran. That is unlikely to be a definitive argument.

In copyright, it is crucial to prove the work has been copied – it seems an obvious point, but one must remember that coincidences do happen. Back in June a US jury decided that Led Zeppelin did not copy the opening chords of Stairway to Heaven from a lesser-known band Spirit. Although the openings sound the same, Page and Plant were able to provide evidence of how they wrote Stairway to Heaven.

Whether a jury will find coincidence or copying remains to be seen. No comment has thus far been forthcoming from the Sheeran camp - perhaps he is taking the time to let his conscience be his guide as to whether he can justifiably defend the claim…or maybe he is simply thinking ‘Can I Get A Witness’.

Colin recently spoke to BBC Radio 4 about this issue – you can hear that here .


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Brexit and Intellectual Property Rights: What will probably happen next …
Friday 24th June 2016

Intellectual Property Rights Post-Brexit

The majority of the content in this article was written and published here, prior to the EU referendum on the 23 June 2016. It was drafted from the perspective of how the operation of intellectual property rights (IP) within the UK and Europe would likely be affected in the event of a Leave vote.

Following the decision to leave the EU (Brexit), we have now updated it in to order to provide guidance to IP right owners, to the extent that we are currently able to do so, of how these rights may be affected. However, much of the content remains unchanged given that there is very little certainty as to how the operation of IP rights within the UK and Europe will be affected.

Intellectual property rights are territorial

In reality, many areas of UK law and policy will be affected by Brexit, particularly those areas which are based upon, and influenced by, EU provisions. The UK IP legal framework is one of these areas, and as such, the IP rights of many UK and EU businesses and individuals are likely to be significantly affected by Brexit.

As the UK has been part of the EU, it along with all other Member States are required to comply with certain EU rules regarding the exploitation and operation of IP rights, not just within Europe, but also within that Member State. This has ensured that the legal framework relating to IP is, generally, harmonised within each Member State, so that barriers to trade between Member States are reduced.

In the context of the EU, individuals and businesses within the UK have had two frameworks available to them for protecting much of their IP, due to it being a Member State: one concerning protection solely within the UK, and one concerning protection across the whole EU (including the UK). For example, an individual could gain both UK-only protection for a trade mark, as well as EU protection for the same trade mark, provided that the mark was registered with the respective UK and EU trade mark registries. As such, many UK-based businesses and individuals rely on their registered EU IP rights when operating within Europe. However, it is now likely that such rights will be significantly affected, or withdrawn in a worst-case scenario, reducing those business’ and individual’s IP protection across Europe.

To reiterate, there is uncertainty as to how specific laws will be affected. No specific intellectual property points were raised in David Cameron’s renegotiation summit in Brussels in February. Equally, the most significant European treaties and regulations contain no provisions which address a Member State’s exit of the EU, so it is difficult to accurately determine the impact Brexit will have upon the implementation and validity of EU law in the United Kingdom. Having considered the current EU intellectual property law framework, however, we can attempt to predict how Brexit will likely affect the operation of intellectual property law for UK and EU businesses and individuals.

The European Union Trade Mark (EUTM) and Registered Community Design (RCD) Systems

Any UK registrations, such as a UK-only registered trade mark, are unlikely to be affected given that such rights grant protection solely within the UK, which is unaffected by membership to the EU. However, the EUTM and RCD systems, are highly likely to be affected, both of which operate in a similar manner.

The recently amended European Union Trade Mark Regulation (207/2009) (the Regulation) governs the operation of the EUTM system. Any individual can apply to register a trade mark as a EUTM under the Regulation, and if successfully registered, provides the EUTM owner unitary protection within all 28 Member States of the EU (including the UK).

The Regulation clearly details how the EUTM system will operate in the event that the EU expands but is silent as to how it will operate in the event that a Member State leaves the EU. The wording of Article 1(2) of the Regulation states that the use and existence of EUTMs shall not operate other than “in respect of the whole European Union”. This suggests that once the UK has left the EU, EUTM owners shall have no continuing EUTM rights within the UK.

However, it is arguable that some transitional provisions will come into force which allow the jurisdiction of EUTMs to extend to the UK, or for EUTM owners to convert their marks to UK marks. The latter would obviously reduce the number of territories the trademark or registered design would be protected within.

Such provisions could be implemented by either the EU or the UK. It does seem doubtful, though, that they would be passed by the UK government, as doing so would effectively result in the UK handing over sovereignty to the EU in respect of this aspect of trade mark law.

The adoption of subsequent EU legislation equally seems unlikely. This is particularly the case given that its trade mark legislation has been drafted and implemented in respect of the “European Community” or “European Union”. New legislation allowing a non-EU country to be included within a system, and benefit from rights, intended for those within the EU could potentially be seen as a slippery slope which defeats the purpose of having a clearly define EU. 

RCDs operate in a much similar manner to EUTMs and, like EUTMs. Therefore, it is highly likely that RCD rights would be affected in a similar fashion to EUTMs.

So what could this mean for UK-based EUTM and RCD owners?

Taken literally, and in the absence of transitional provisons, the wording of the Regulation suggests that the protection a EUTM and RCD affords owners will effectively be reduced so as to no longer include protection within the United Kingdom. As such, owners will probably need to ensure that their marks and designs are also registered as UK trade marks or UK registered designs with the UK Intellectual Property Office, if they wish for them to be protected within the UK, and would have to cover the cost of such applications.

What is the likelihood of transitional provisions being implemented?

It is difficult to predict.

Despite the concerns the UK and EU legislator may have implementing transitional provisions, as highlighted above, it seems unlikely that the EU and UK will allow EUTM owners to simply lose all of their trade mark rights within the UK. So how are transitional provisions likely to operate?

The UK or EU legislator could implement provisions which allow EUTM owners to maintain their EUTM registrations and convert such marks to UK registrations for an additional fee. This method was historically used when Ireland became independent to the UK in the early 20th century, which provided UK registered trade mark owners with protection in Ireland whilst marinating their existing UK rights.

Pending EUTM application owners may also be offered a choice of whether to proceed with such applications in relation to the EU or simply convert their application to a UK-based application.

If such methods are exercised, it is also likely that each EUTM benefitting from seniority will also benefit from such seniority within the United Kingdom.

Therefore, we suggest that EUTM owners, and particularly those with large portfolios of EUTMs, should now consider whether protection of their marks within the UK or EU, or both, is necessary and plan accordingly.

Enforcement of EU-wide rights

EU-wide rights, such as EUTMs or RCDs, allow for some owners to claim EU-wide remedies as set out in the Enforcement Directive.

Despite being the subject of debate, the integration of the Enforcement Directive within UK law has allowed some EU-wide remedies, previously unknown to the UK courts, to be granted in favour of claimants by the UK court system. The courts in other Member States have also granted such remedies which are enforceable within the UK.

As the UK is now set to leave the EU, it is possible that other EU Member State courts choose not to recognise the validity of a UK court order relating to an EU-wide remedy. This could therefore mean that IP right holders no longer benefit from a remedy that they previously thought was enforceable within the EU, and that an enforceable remedy will have to be sought in another EU Member State’s court. 

Will UK trade mark law be affected?

The majority of UK trade mark law is based on EU legislation. For example, the Trade Marks Act 1994 is based almost exclusively on the wording of the EU Trade Marks Directive. Despite this, legal critics believe that it is still unlikely to be repealed, particularly given that it has governed the operation of trade mark law within the UK for over 20 years.

UK trade mark law will possibly diverge, however, and now develop in a different manner to that of the European Union. Even to this extent though, any changes to the UK trade mark framework are unlikely to be substantial, particularly if the UK chooses to become part of the European Economic Area (EEA). In that eventually, the UK will want to maintain close ties with other EEA members, and the UK significantly changing its current national trade mark laws would likely be unpalatable to those members, the vast majority of whom remain within the EU and therefore have a harmonised trade mark law framework.

UK judges will have the benefit of exercising a greater level of freedom in their trade mark decisions, however. This is because they will no longer be required to interpret UK legislation in accordance with EU legislative provisions and case law. Whether judges will actually depart from EU decisions is a different matter, though, particularly if the UK remains in the EEA, as explained above.

On the other side of the coin, it must be remembered that some UK judges have previously disagreed with a number of EU trade mark decisions. These decisions were subsequently implemented into UK law. As such, it is possible that newly founded judicial freedom may result in such decisions being reviewed.

What about Patents and Copyright?

Brexit is likely to have much less of an impact on the operation of patents registered by the European Patent Office (EPO) (“classical patents”) and copyright.

Firstly, in relation to classical patents, this is because unlike EUIPO, the EPO was introduced by the European Patent Convention which is a treaty entered into by European (as opposed to EU) countries. As such, Brexit will not affect the UK being a party to the European Patent Convention.

Equally, a classical patent is effectively converted into a package of national patents, and as such, will continue to be effective in each country which was a member state at the time of the grant, regardless of whether or not that country has subsequently left the EU.

However, the introduction of the European Unitary Patent (EUP) and Unitary Patent Court (discussed below) is likely to have an effect on the operation of classical patents. These patents will run in parallel for a period of seven years (extendable to 14 years) once the Unitary Patent Court takes effect. This means that classical patents will be challengeable in both the Unitary Patent Court and the courts of a designated Member State, but after the initial seven year (or up to 14 year) period, classical patents will only be challengeable in the Unitary Patent Court, the operation of which is governed by legislation unlikely to be ratified by the UK. It is therefore unclear as to how classical patent disputes relating to the UK will be resolved after this seven year period.

Given this, it is likely that many patent owners who register their patents as EUPs will also need to register their patents as UK national patents, as EUP protection will not include protection within the UK. This will increase cost for patent owners. 

Brexit is unlikely to significantly impact upon the operation of UK copyright law as although some aspects of it are based upon EU Directives, the majority of it has developed independently of the EU and in that sense is sovereign.

Unitary Patents and the Unitary Patent Court

However, a separate type of patent known as the European Unitary Patent (EUP) (implemented under the Unitary Patent Court (UPC) agreement) which is proposed to come into force in 2017, is likely to be affected.

Unlike the EPO system, EUPs will only have effect within the EU and the law governing EUPs must be ratified by each Member State before it has effect. As the UK has voted to leave the EU, EUPs will only have effect within the UK if the existing draft of the UPC agreement is re-written so as to extend its jurisdiction to either all non-EU countries (which seems unlikely), or just to the UK.

As the UK is likely to continue to be a member of the EU by the time the UPC comes into force, the UK will be required to ratify the UPC agreement as one of the three Member States with the highest number of European patents (France, Germany and the UK).

It is possible that the UK will now choose not to ratify the UPC agreement, in order to not enter into the UPC agreement in the knowledge that it would only participate for a limited amount of time. This is more probable given that the UK government is unlikely to allow its sovereignty to be diminished by the UPC agreement for such a short period of time.  

If the UK does not ratify the UPC agreement, Italy or the Netherlands would be able to ratify it instead, but would only be able to do so once the UK fully exits the EU, which some commentators are suggesting will take at least two years, but arguably longer.

Other parts of the UPC agreement will also likely need to be amended. Currently, the Central Division of the Unified Patent Court is set to be located in Paris, Munich and London. Obviously, having part of the Central Division located in the UK when it is not a member of the EU (and potentially not even the UPC agreement), is likely to be considered unappealing, although there is nothing in the current wording of the UPC to prevent this.

Contract reviews

The obligations and operation of many contracts, including IP licenses, to which UK entities may be parties, contain territorial provisions referencing the “European Union”. Reference to the “European Union” is generally not a defined term within such contracts as it has generally been clear as to what the territory of the European Union is. 

Such a term is now likely to be uncertain as to whether it includes the UK. As such, it may be appropriate to consider introducing a counterpart or amendment to existing contracts where it is unclear that the term “European Union” includes the UK.

Can UK legal practitioners continue to represent clients in respect of EUIPO matters?

Yes, subject to the UK remaining within the European Economic Area. It is unclear as to whether the UK will remain within the EEA, as the original EEA Agreement related to the EU joining the EEA rather than the UK as a separate entity, and there are no provisions within that treaty which relate to a country’s exit from the EU. As such, the EU (as it was in 1992) is a party to the EEA Agreement and not the UK as a separate entity. It is likely that the UK would not be considered to be part of the EEA, and would need to re-join.

If the UK were to re-join the EEA, any UK-based law firm would be able to continue representing clients in respect of EUIPO matters (EUTMs and RCDs). If the UK were not to re-join the EEA, it’s UK-based law firms would not be able to represent clients in respect of EUIPO matters.

Conclusion

Although the above outlines how various types of intellectual property rights are most likely to be affected, there is uncertainty as to what will actually happen.

We recommend that those who currently benefit from intellectual property right protection within the EU or UK take steps to plan for how such rights will continue to take effect in the UK and the EU. If you have any queries in this regard, please contact our Intellectual Property team as soon as you can. 


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UK Standardised Tobacco Packaging Rules OK
Thursday 19th May 2016

Further to the decision of the Court of Justice for the European Union earlier this month (see here), the UK High Court has now handed down its judgment in favour of the Government in the judicial review case of British American Tobacco, Philip Morris International,  Japan Tobacco International, Imperial Tobacco & others v Department of Health [2016] EWHC 1169. This was an application by companies within the Tobacco industry for judicial review of the Standardised Packaging of Tobacco Products Regulations 2015 (the “Regulations”) due to come into force on 20 May 2016.

The judgment is 1,000 paragraphs and 386 pages long, although a summary is available here. This update has been prepared in advance of reviewing the full judgment and is based primarily on the summary.

As expected, the High Court has ruled in favour of the government. The judge, Mr Justice Green, acknowledged that the Regulations “restrict the ability of the tobacco industry to use their valuable brands, trademarks and designs upon tobacco packaging and upon tobacco products” and accepted that they “substantially limit and restrict the use” by the tobacco industry of its property rights (i.e. trade marks, copyright and goodwill). However the judge rejected that this was an “unlawful expropriation of their property rights without fair compensation” as argued by the tobacco companies. The judge held that the rights were not taken away and the limitation and restriction was “for entirely proper and legitimate reasons … striking a fair balance between the right to property and opposing public health interests and rights”. Further the judge held that the tobacco companies were not entitled to any compensation at all, seeing no “logical or rational basis for imposing upon the State a duty to pay compensation to the tobacco companies for ceasing to engage in an activity which facilitates a health epidemic and imposes vast costs upon the state

Earlier in May, the Court of Justice for the European Union (CJEU) has confirmed the validity of various provisions of The European Tobacco Products Directive (2014/40/EU) (the Directive), including several queries submitted by the High Court of Justice of England and Wales (the High Court) relating to provisions concerning standardised packaging. In particular, the CJEU confirmed that Member States would be able to adopt more stringent rules in relation to the packaging of tobacco products, but only to the extent that such requirements do not affect those parts of tobacco packaging which are harmonised within the Directive.

Read more about the provisions of the Directive and the proposed standardisation of cigarette packaging for further information. For more information on how the UK Regulations go further than the EU Directive, in particular in relation to its Standardised Packaging requirements read our previous piece, “House of Commons approve plain packaging for cigarettes”.

The Regulations place significant restrictions and limitations on branding and advertising on the packaging and the tobacco products themselves. The tobacco companies and tipping companies (who produce the tipping paper that wraps around the filter and join the filter to the tobacco rod) had alleged that the:

  • evidential process for preparing the Regulations was biased and unfair as it placed only limited weight on evidence submitted by the tobacco industry
  • Regulations were disproportionate, unsuitable, counter-productive and harmful to health.
  • Regulations were unnecessary as less intrusive measures would have been equally effective.
  • balance between the tobacco industry private law rights to use their trade marks and other intellectual property (on the one hand) and public health interests (on the other) was unfair.
  • Regulations amounted to unlawful expropriation of their property rights without fair compensation.

Concerns regarding illicit trade, counterfeiting and an increase in use of uncontrolled substances had also been raised.

However, rejecting the tobacco industry’s arguments, the judge stated (in the conclusion of the summary)

  • the essence of the case is about whether it is lawful for States to prevent the tobacco industry from continuing to make profits by using their trade marks and other rights to further what the World Health Organisation describes as a health crisis of epidemic proportions and which imposes an immense clean‐up cost on the public purse”
  • “the Regulations are valid and lawful in all respects. There is no basis [to] strike down the Regulations or prevent them coming into effect tomorrow.”

All the applications for judicial review were therefore rejected. Philip Morris International has indicated its disappointment in the decision but that although there were “strong grounds” to do so it has decided not to appeal. British American Tobacco and Japanese Tobacco International are expected to seek leave to appeal.

If you believe that this decision is likely to affect your product’s branding, please contact the intellectual property team


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EU cigarette packaging rules are valid, but will the UK go one step further?
Wednesday 11th May 2016

The European Tobacco Products Directive (2014/40/EU) (the Directive) which seeks to harmonise various aspects of tobacco production and sale within the EU, has been heavily debated upon since its entry into force on the 14th March 2014. This week however, the Court of Justice for the European Union (CJEU) has confirmed the validity of various provisions of the Directive, which are set to come into force and begin to be implemented in the UK on the 20th May. The UK has separate, more stringent, regulations which are also due to come into force later this month. However, they are subject to a separate judicial review (see below).

You can read my previous blog post that discusses the provisions of the Directive and the proposed standardisation of cigarette packaging, for further information.

The CJEU’s judgement (available here) addressed several queries submitted by the High Court of Justice of England and Wales (the High Court) relating to some of the Directive’s provisions concerning standardised packaging.

The first question related to Article 13 of the Directive. Article 13 prohibits the labelling of packaging and any tobacco product itself which includes “any element or feature” that promotes a tobacco product or encourages its consumption by creating an “erroneous impression about its characteristics”. The provision also states that such elements and symbols include “symbols, names, trademarks and figurative or other signs”.

In this case, the High Court asked the CJEU to consider whether Article 13, as well as other provisions relating to the size and position of health warnings and shape of cigarette packaging, complied with the EU principles of proportionality and subsidiarity. It also asked whether tobacco companies would be able to make true or non-misleading statements on its tobacco packaging, and for the CJEU to clarify to what extent Member States would be able to adopt more stringent national rules relating to the standardisation of tobacco packaging.

The CJEU confirmed that its objective in implementing the Directive was to protect consumers against the potential risks related to tobacco use. As such, it considered that this overriding interest of public health protection rendered the Directive’s provisions proportionate and compliant with the principle of subsidiarity.  

The CJEU also confirmed that Article 13 would be understood to prohibit “any element or feature” of labelling of packaging of tobacco products which promote the product or encourage its use, even if such an element or feature was “factually accurate”. Again, the CJEU stated that this interpretation was in the public interest and, as such, the provision was proportionate and compliant with subsidiarity.

Finally, the CJEU held that Member States would be able to adopt more stringent rules in relation to the packaging of tobacco products, but only to the extent that such requirements do not affect those parts of tobacco packaging which are harmonised within the Directive.

Some critics have suggested that the Directive, and its subsequent interpretation by the CJEU, is disproportionate and does not respect the autonomy of Member States. Some tobacco companies have also criticised the provisions, suggesting that it is not clear whether implementation of the Directive’s provisions will reduce smoking rates, and that the Directive is somewhat of a white elephant.

However, it is clear the UK wishes to go one step further in its implementation of the Directive through the draft Standardised Packaging of Tobacco Products Regulations 2015 (the Regulations), which attempts to ban logos and branding on all tobacco products, read our previous blog post "House of Commons approve plain packaging for cigarettes" for more information.

These Regulations were expected to come into force in May 2016, but are now likely to be delayed following four of the world’s largest tobacco manufacturers mounting a judicial review action against the government, the decision of which is expected on the 18th May.

Therefore, it is clear that although the provisions of EU directive has been held to be valid by the CJEU, the more stringent provisions implemented by the UK are still to be ruled by the High Court. However, it does seem that in light of the CJEU’s decision, it is not the Directive which would prevent Member States from implementing more stringent rules on tobacco packaging, provided that the Directive’s provisions were observed. As such, whether the UK’s proposed ban on branding complies with national and wider international laws seems to be the key outstanding issue to be ruled upon prior to implementation of the current draft of the Regulations.

It is generally expected that the High Court will rule in favour of the government and the judicial review action will fail.

An update will be provided when the above UK decision is made public on the 18th May.    

If you believe that this decision is likely to affect your product’s branding, please contact the intellectual property team.  


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5 Compelling Reasons to File Your Trade Mark Right Now
Thursday 24th March 2016

1.  It just got cheaper!

The European Union Intellectual Property Office (EU IPO) has just come into being, replacing the old Office for the Harmonisation in the Internal Market (OHIM).  Apart from the name making much more sense, trade mark filings at the EU IPO are cheaper than they were at OHIM, when filing in 1 or 2 classes.  Trade marks need to be renewed every 10 years to stay registered, but have no fear as the EU IPO has that part covered too, with reduced renewal fees. Hooray!

2.  You don't have to be using your trade mark yet to register.

If you've got a great name for your new business or have a fantastic logo for a product that you know your customers will love but you've not quite got off the ground yet, don't worry.  You can still file for trade make registration as long as you have a genuine intention to use the mark.  Just be mindful that you need to start using the mark within the 5 years after registration otherwise it can become vulnerable to cancellation.

3.  To give yourself time.

We all want more time, right? Well, trade marks need time to register, they don't just happen overnight.  From filing to registration, UK trade marks take 4-6 months and European Trade Marks take longer.  Filing as soon as you can will give you a much better chance of flushing out any potential third party oppositions to your mark before you really invest in your brand.  Plus, the sooner you file, the sooner the mark can be registered, which is when you can start using the ® symbol.  Sounds obvious, but so many companies have wanted to use the ® on products and in advertising but have waited too late to file their mark and have really struggled to meet print and packaging deadlines.  Give yourself breathing space.

4.  Imitation is not the best form of flattery.

Don't let third parties get in there first.  If you've already started trading, you will have already dealt with third parties, such as customers, clients, manufacturers, distributors or competitors. So many clients approach us where third parties have filed their trade marks, or something confusingly similar, and they don't know what to do.  While we can of course help in such situations, having a registered right is much easier (and therefore cheaper) to defend.  And it doesn’t just work for trade mark infringement – you can file domain name complaints and company name complaints based on your trade mark registration too.  Being able to use the ® symbol can also notify third parties of your rights which may prevent them infringing in the first place. Win-win!

5.  It is your property.

Intellectual property rights are just that - property.  You own your rights and can sell, license, franchise and even mortgage them.  Registering your trade marks makes these processes easier.  It's not always possible to foresee how your business will develop in the future, but registering your rights early means you are ready to commercialise your mark in whichever way is best for your business as soon as the opportunity presents itself.

We offer a full trade mark service, including prosecution and litigation.  Please contact Hayley Morgan for information.

 

 


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An interesting case - Trunki and Kiddee Case go head to head
Thursday 10th March 2016

Design right owners and legal practitioners alike have been awaiting the judgement of the UK Supreme Court in ‘the Trunki case’.

The case has been relatively high-profile and you may already be aware of the dispute between Magmatic Limited, the creators of the children’s pull-along suitcase the Trunki, and PMS International Limited, who also sell a children’s pull-along suitcase which it calls the Kiddee Case.

Magmatic is the owner of a Registered European Community design (RCD) which depicts a two-tone image of the Trunki case, shown with no surface ornamentation (below, left).

Magmatic brought a design right infringement action against PMS for their Kiddee Case (e.g. below, right).

(Left to right: Magmatic’s RCD, the Trunki, PMS’s Kiddee Case)

The High Court initially found in Magmatic’s favour holding that the RCD is for a shape of a suitcase so the proper comparison is with the shape of the Kiddee Case and the surface ornamentation is to be ignored.

On appeal, the Court of Appeal overturned this decision, noting that the overall impression of the RCD is of a horned animal and that the absence of any surface decoration on the RCD reinforced this impression – the fact that there was no surface decoration in the RCD was a feature of the design itself. The Court of Appeal also noted that that the wheels and handles on the RCD stood out as features, whereas the Kiddee Case had covered wheels and in some examples had handles in the same colour as the body.

Magmatic appealed to the UK Supreme Court who, on 09 March 2016, dismissed the appeal - the Kiddee Case was found not to infringe the RCD.

Cases like this can divide opinion; but from a design right owner’s perspective, and for those who, like me, represent them, the case highlights points to consider when filing design rights.

It is important to consider what it is about the design that the owner would like to protect.  This may be in the shape of the product, the surface decoration, the contours or the colours.  It may also be specific features of an overall product.

The broadest protection is often achieved by filing more than one right.  In this case, Magmatic filed the design right itself, and only filed one application.  The outcome of this case might well have been different if Magmatic hadn’t used contrasting shades in its filing and had filed a line drawing instead, or had even filed two applications – one in contrasting shades and one as a line drawing.

As is clear from this case, design rights can be a very robust form of intellectual property right provided they are filed effectively.  It is of course impossible to foresee every potential infringement.  That said, each product should be scrutinised and each design considered before any rights are filed to ensure that the owner has the best form of protection for their product against potential infringers now and for the lifetime of the right.

For more information on design rights and how Brabners can assist you in protecting your designs please visit our Brand Protection website or contact Hayley Morgan.


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