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IP & IT

Red Bull GmbH - v - EUIPO - A Turning Point for Colour Combination Marks?
Tuesday 12th December 2017

In a decision which may cause concern to businesses which adopt distinctive colour schemes as part of their branding, the European General Court (Second Chamber) (hereafter “the Court”) has recently handed down its judgment in the case of Red Bull GmbH v European Union Intellectual Property Office (‘EUIPO’).

This case concerned an appeal by Red Bull against the EUIPO’s decision to cancel two of its existing European trade mark registrations (which were registered in 2005 and 2011 respectively).  Each of Red Bull marks in question were “colour combination” marks which aimed to protect the well-known blue and silver colour scheme which Red Bull uses uniformly across its global branding. 

Applicants seeking to register colour combination marks are required to provide the EUIPO with:

(i)             an appropriate representation of the mark that shows the systematic arrangement of the colour combination in a uniform and predetermined manner; and

(ii)            a reference to a generally recognised colour code (e.g. Pantone) relating thereto. 

As a matter of best practice, an applicant should therefor provide the examiner with a precise written description of the use of the colour(s) that they are seeking to protect to accompany the visual representation.

The two Red Bull registrations concerned are depicted below, along with their respective ‘descriptions’:

Dismissing Red Bull’s submissions that the EUIPO had interpreted existing case law in this area ‘unduly strictly’, and that its decision was both “disproportionate and discriminatory”, the Court considered that Red Bull’s marks, even when taken together with their respective descriptions, were no more than the “mere juxtaposition of two or more colours, designated in the abstract”.  As the extent of the protection given by the two registrations could not be “grasped clearly or precisely”, the Court concluded that both ought to be cancelled for lack of precision. 

Among commentators, the Court’s decision has been regarded as the effective ‘death knell’ for the registration of ‘colour combination’ marks.  Indeed, the extensive list of requirements set out in the judgment, which the Court suggests should be met before such marks may be considered valid for registration, could well be seen as being prohibitive in the eyes of prospective applicants. 

However, on closer inspection there do appear to be a number of underlying factors in play here which may better explain the Court’s decision in this case:

1.                The devil is in the detail?

Firstly, the Court was clear in its judgment that, where a description is included in an application for a mark, it will necessarily become an ‘integral’ part of the registration (along with the graphic element).  Looking back at the above descriptions submitted in support of the Red Bull marks, that the Court took issue with the lack of precision in the scope of these registrations is understandable.

To illustrate how the Court’s concerns as to the ‘precision’ of a description might be allayed, it is helpful to consider an example of another colour combination mark which is protected on an EU-wide basis, which is owned by John Deere plc:

This mark protects the distinctive colour scheme adopted across its product range by the global manufacturer of agricultural and construction machinery.  The detailed description submitted in support of this mark certainly helps the reader to visualise how the colour scheme to which it attaches will be systematically used in respect of John Deere’s products (in a way which the Red Bull descriptions do not).  With this in mind, one might well argue that the Court’s decision in the present case was less to do with the registrability of colour combination marks per se, and more to do with the inadequate descriptions which accompanied Red Bull’s registrations.

2.                …and the Legislation?

Secondly, the fact remains that, pursuant to existing EU legislation and accompanying EUIPO guidance, colour combination marks are eligible to be registered as trade marks per se irrespective of any specific shape or configuration attached to them.  The fact that combinations of colours “in the abstract” are stated to be registrable would therefore appear to contradict the Court’s position in this decision that the colours of a combination mark must be presented in some ‘systematic arrangement’ which associates the colours in some ‘predetermined and uniform way’.

The wording of the EU legislation therefore creates scope for an applicant to argue that it is the colours of the combination mark themselves that are the distinctive (and registrable) element, and the arrangements of the colours thereon should not have bearing on the examiner’s decision. Therefore, if an applicant can show that the colours themselves are distinctive in the minds of consumers (as Red Bull had managed to do in their initial applications) then surely there should be no need to also prove that customers can identify with any specific embodiment of them.  Indeed, it could even be argued that if an applicant went too far in describing their colour combination mark, it could inadvertently be rendered a figurative mark.  It is not apparent that Red Bull developed such arguments sufficiently in this case, which could again help to explain why it was ultimately unsuccessful in its appeal.

Conclusion

The decision in this case is perhaps not as significant as it may seem at first glance, and we would submit that, instead of marking a turning point in the law relating to the registration of colour combination marks, should be seen as one which is specific to its facts.  Undoubtedly, the Court was presented with two marks which were accompanied by vague descriptions, though the EUIPO’s objections could well have been effectively rebutted by reference to the legislation underpinning the EU trade mark regime.  While this is little comfort to Red Bull, who must now consider whether there is merit in appealing this decision to the Court of Justice of the European Union, those considering the filing of applications to register colour combination marks in future should not be too disheartened.


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Morrisons Vicariously Liable for Employee’s Deliberate Payroll Data Protection Breach
Tuesday 5th December 2017

Companies around the UK may be shocked to find out that they could be held responsible for data leaks by their employees, even where a court has ruled that the company itself has done nothing wrong.

In a landmark decision last week, the first data-breach class action in the UK, Morrisons, the fourth largest supermarket group in Britain, has been held liable for the actions of a former employee who stole the payroll information of thousands of employees and uploaded it to the internet.

Background

In 2014, Andrew Skelton, an IT auditor at Morrisons’ headquarters was tasked with providing a copy of the company’s payroll data to their auditors, KPMG. Whilst the file was stored on his computer, Mr. Skelton made an illicit copy which he transferred to his personal USB stick. Mr. Skelton later uploaded this data to a file-sharing site and sent CD copies of it to two local newspapers in Yorkshire. It is believed that Mr. Skelton was motivated by his anger at Morrisons in respect of recent disciplinary proceedings that had been taken against him on an unrelated matter.

5,518 former and current workers of Morrisons brought the claim against the company alleging that Morrisons was either directly liable for not complying with the data protection principles in the Data Protection Act 1998 (DPA), or that Morrisons was responsible for Mr. Skelton’s breach of the act as his employer.

Direct liability

The claimants first argument was that Morrisons itself was in breach of principles 1-7 of the DPA. Mr. Justice Langstaff dealt with principles 1-6 first and disposed of them quickly on the grounds that any breach of those principles was committed by Mr. Skelton acting as the data controller of his own copy of the payroll data, Morrisons therefore could not be directly liable.

The seventh data protection principle requires data controllers to have in place “appropriate technical and organisational measures” to prevent unauthorised use of personal data. The claimants argument was that it was inappropriate for Morrisons to have trusted Skelton due to his recent disciplinary proceedings, and that they should have had some organisational measure in place to prevent him being tasked with handling such vast amounts of highly sensitive data.

The judge rejected this argument. Whilst Langstaff J accepted that there clearly were minimum standards that had to be in place, he ruled that a balance must be struck between the risk presented to personal data and the availability and cost of minimising that risk. Mr. Skelton’s previous infraction was only a minor issue and gave no reason to exclude Skelton from particular types of work. Skelton was a trusted employee and had given no real reason to doubt his trustworthiness.

Though he did find a small ‘non-material’ breach relating to a failure to delete the data from a laptop after Mr. Skelton had already taken a copy of them, this was not taken into account as there was no connection between the failure to delete and the loss caused to the claimants. The judge’s ruling was therefore that Morrisons had committed no material breaches of the data protection principles and in particular, had not failed to have organisational measures in place to protect personal data from unauthorised or unlawful disclosure.

Vicarious liability

This was the first case since the DPA came into force to consider the issue of vicarious liability. The doctrine of vicarious liability allows for someone to be held responsible for the act or omission of another, it can commonly arise in the employment context when employers are held to be responsible for the acts of their employees.

The judge followed the 2-limb test for vicarious liability as it had been stated in another case involving Morrisons, the Supreme Court decision Mohamud v William Morrison Supermarkets plc. The test is:

1.             Taken broadly, what was the nature of the position, task or job of the employee? and

2.             Given the nature of the position, task or job was there sufficient connection between that and the wrongful conduct?

In applying the test, the judge found that Mr. Skelton’s ‘task’ had been to receive and store a copy of the data and then transmit it to a third party (KPMG). Therefore, said Justice Langstaff, his act was clearly an improper mode of performing this task and so was sufficiently connected to the task to make Morrisons liable.

The question as the judge saw it, was “not whether Morrisons did wrong, but whether, when Skelton did, his acts were closely connected with his employment.”

Comment

The judgment is clearly a very worrying one for employers. Every employer will hold some personal data in relation to their employees and most will hold significant amounts of sensitive data. As Mr. Justice Langstaff himself recognised in his judgment, there can be no 100% effective system to prevent data breaches occurring, and a particular threat is posed by employees who are trusted with access to personal or sensitive data and yet choose to abuse that trust and commit breaches of the DPA.

This judgment leaves employers exposed to such rogue employees. Even in situations where the employer has taken all possible precautions and put the best protective measures in place, it appears that following this decision, the unauthorised acts of an employee that appeared trustworthy may still lead to significant liability for the employer.

It is also possible that the Information Commissioner’s Office (ICO) could investigate the matter not only in relation to the non-material breach relating to failure to delete data, but also generally. If they do, the ICO has the power to levy additional fines on Morrisons and to require the company to enter into binding undertakings to comply fully with data protection legislation going forward. Although the ruling by the judge that Morrisons did not materially breach any of the data protection principles in the DPA may lessen any sanction imposed by the ICO. However, this point will always turn on the actual facts of the case and it seems a little surprising (and counter-intuitive) that an employee was able to leak this data and at the same time for it to be considered that Morrisons had the appropriate organisational measures in place to protect personal data and not materially be in breach of data protection principles.

Under the General Data Protection Regulation (GDPR) coming into force in May 2018, such fines could be up to €20 million or 4% of annual global turnover (whichever is highest). The GDPR also incorporates a new principle of accountability, requiring data controllers (such as Morrisons in this case) to demonstrate compliance with the GDPR by showing the supervisory body (the ICO in the UK) how the data controller complies on an ongoing basis with GDPR, including through evidence of effective internal compliance measures. Where there has been a breach, such as in the present case, it could prove very difficult for data controllers to prove that their internal compliance measures are effective.

The judgment dealt only with the issue of liability and it remains to be seen what damages will eventually be awarded to the claimants. Additionally, the judge, as well as being firm in ruling that Morrisons had no direct liability in this case, has also granted leave to Morrisons to appeal the ruling on vicarious liability.

In the meantime, employers should seek to ensure that their organisational and technical systems make it as difficult as possible for any rogue employee to steal personal data. It now appears that the only sure defence is preventing the breach in the first place.

This article is part of a series produced between November and December 2017 for Brabners Data Protection Month – you can find all of our data protection articles on our Data Protection Month page.


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ICO Announces Changes to Binding Corporate Rules Applications
Friday 1st December 2017

From this week, organisations making applications to the Information Commissioner’s Office (ICO) for Binding Corporate Rules (BCRs) must ensure that they are compliant with the new General Data Protection Regulation (GDPR), coming into force on 25 May 2018.

What are Binding Corporate Rules?

Under the GDPR, personal data can only be transferred out of the EU if there will be a sufficient level of protection in place at the intended destination to protect the rights and privacy of the people involved. If data is transferred in breach of this, organisations could face fines of up to €20million or 4% of annual worldwide turnover, whichever is greater.

For some countries, the European Commission will issue an ‘adequacy decision’ meaning that the data protection laws in that country are already strong enough to protect any personal data transferred. Where there has been no such decision, however, it is down to each organisation to ensure that they put effective safeguards in place to protect the personal data.

One option is to use BCRs. BCRs are rules that apply to all members of a group of companies (or all participants in a joint venture), they determine how personal data is to be processed and protected within that group. Organisations draft their own BCRs, and once they have been approved by the ICO there is no need to require additional safeguards for intra-group transfers of personal data, even if those transfers are to countries outside of the EU. BCRs, once in place, will continue to apply even if the flow of data within the group is altered or there are changes to the group’s corporate structure.

Applications submitted from now on

From this week, the ICO requires that new applications for BCRs must comply with the requirements of the GDPR regarding adequate safeguarding of the data transferred. These applications, though they can be submitted in anticipation of the GDPR entering force, will not be approved until after the 25 May 2018.

Additional guidance on BCR applications is currently being produced by a data protection working party in the EU. It is expected that this guidance will be published by the end of the year. The ICO will be making the guidance available on their website once released.

Applications currently with the ICO and awaiting approval

Many organisations have already submitted applications for BCRs under the current legislation and are waiting to hear back from the ICO. In a press release this week, the ICO confirmed that they will continue to process these applications, and where necessary to ensure compliance with the GDPR they will be contacting organisations directly to request amendments and updates to the applications.

Binding Corporate Rules already approved and in place

Organisations that have BCRs in place that have previously been approved will also need to update their rules. It is a requirement that BCRs are updated to comply with new regulations as they come into force. As such, organisations currently relying on BCRs for cross-border data transfers must ensure that their rules are GDPR-compliant by 25 May 2018.

The ICO should be informed of any changes made, though this can wait for the next annual update communication. The ICO will be writing to all organisations that have approved BCRs nearer the time, to remind them of their obligation to update their rules and advise on the procedure for doing so.

Further information

If you would like to know more about GDPR readiness, cross-border transfers of data or binding corporate rules, please contact a member of our commercial team, or your usual Brabners contact.

This article is part of a series produced between November and December 2017 for Brabners Data Protection Month – you can find all of our data protection articles on our Data Protection Month page.


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There’s nothing new under the…bed?
Monday 20th November 2017

It’s that time of year when John Lewis’ annual Christmas Advert is released to an eagerly awaiting British public.  The retailer’s latest effort, which premiered on 10th November, features the story of a large, furry, blue monster named “Moz” who forges an unlikely friendship with the little boy under whose bed he lives (and who is kept awake by Moz’s snoring).  Despite again proving popular with the general public, the seemingly harmless tale featured in the advert has nonetheless generated controversy, with the renowned author and illustrator Chris Riddell recently suggesting that John Lewis have in fact “helped themselves” to his intellectual property

 

Mr Riddell draws a comparison between the advert and his earlier work, ‘Mr Underbed’.  ‘Mr Underbed’ is the animated story of a large, furry, blue monster (called “Mr Underbed”) who lives under the bed of a little boy (who is also disturbed by the monster’s snoring).  In a similar fashion to the John Lewis advert, in Riddell’s work it also transpires that the monster is unthreatening, and goes on to form a friendship with the protagonist.

 

However, simply showing a similarity between two works (however close) does not necessarily equate to a successful action for copyright infringement.  Crucially, copyright protects the expression of an idea (e.g. Mr Riddell’s works themselves) and not the idea behind it (i.e. a monster under a bed). Further copyright infringement requires there to be copying. Coincidental similarity is not an infringement of copyright.

 

By way of another example, in 2015 it was alleged by the filmmaker Kelly Wilson that a trailer released by Disney (advertising the upcoming release of “Frozen 2”) was a close copy of her short film ‘The Snowman’, which had been released two years earlier.  In this case, the two works were strikingly similar, each featuring a snowman who loses his ‘nose’ (a carrot) on a frozen pond, and are then required to ‘race’ in humorous fashion against another animal to recover the carrot.  In that case the judge could not overlook the similarities (which one may argue are far closer and more numerous than those between the John Lewis advert and ‘Mr Underbed’) and twice refused to have the case dismissed. However, the parties were able to settle the dispute before the courts were required to rule upon it.

 

Although in the case of the John Lewis advert and Mr Riddell’s work it is not controversial to suggest that there are similarities between general concepts of the stories, and also the respective appearances of Moz and Mr Underbed (both of whom are large blue and furry, and have bulbous noses and two visible fangs), it is quite another thing to suggest that John Lewis’ later work is actually a ‘copy’ of Riddell’s earlier work.  Indeed, and as John Lewis have pointed out, the story of a monster living under a child’s bed is a classic format for children’s stories which was in existence long before Mr Underbed was released in 1986.  This tale as old as time, finds similar monsters including muppets such as Herry Monster (dating back to 1970) and more recently James P Sullivan from Monsters, Inc.

 

When it comes to stories of children confronting their fears of monsters at bedtime, can there really be anything new under the bed?


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The Unitary Patent Court: An Update
Monday 6th March 2017

The Unitary Patent Court Preparatory Committee (UPC PC) has recently estimated that the Unitary Patent Court will be fully operational by 01 December 2017.

The European Union (EU) has been working for over 40 years to establish a common patent court – the Unitary Patent Court (UPC).  The Agreement to establish this court was signed in 2013, but will only enter into force once 13 of the 25 participating member states have ratified it, including France, Germany and UK.

The European-based patent system available at present - the European Patent Convention (EPC) - enables patent protection in multiple European countries following the validation of a national patent right in each country. While the EPC covers countries outside the EU, its critics argue that it is fragmented and incurs substantial translation and administrative costs. Conversely, the Unitary Patent is designed to grant one EU-wide patent which is then enforceable across the 25 participating EU states.

The UPC PC has confirmed that a “Provisional Action Phase” will start in spring 2017, enabling the UPC and its working practices to be established. The UPC PC predict that a minimum opt-out period of three months, starting in September 2017, will allow patent holders to withdraw their patents from the new Unitary Patent system. The UPC itself will hear disputes relating to the Unitary Patent, and will sit primarily in London, Paris and Munich. The UK-based court of the UPC will hear disputes relating to pharmaceutical and life science patents.

As membership of the UPC is based on a country’s membership of the EU, the UK Government’s move to signal its intent to ratify the agreement in November 2016, just months after the UK Brexit vote, was an interesting one. This latest news that the Unitary Patent Court Preparatory Committee (UPC PC) estimates the UPC will be fully operational by the end of 2017 suggests that the UK will be part of the system, regardless of its intention to leave the EU.

Whether it is possible for the UK to remain party to the Unitary Patent Agreement whilst leaving the EU remains unclear, but there is a significant risk that it cannot. That said, the UK’s abandonment of the Unitary Patent System, once it has become a member, reveals many more questions.

The Unitary Patent is designed to comply with the single market by treating patented products as freely-transferrable goods throughout the EU. However, Theresa May’s 17 January 2017 speech, in which she indicated that the UK will be leaving the single market and customs union, seems to sit at odds with the concept of a Unitary Patent, and undoubtedly sits at odds with the ratification by the UK of the agreement.

Moreover, decisions made in the UPC, including those made in the London-based court, must comply and adhere to EU law, and the court must account to the Court of Justice of the European Union (CJEU). Theresa May has already indicated that the UK will reject EU sovereignty over UK laws and courts, but how the UK can remain within a system in which the CJEU takes precedence over national judiciaries, whilst claiming that it wishes to break free from the EU, remains to be seen. At this time, the UK will seemingly be faced with one of three outcomes. It must:

  • accept sovereignty of EU law over Unitary Patents;
  • make a deal with the EU, granting sovereignty of UK law in UP patent decisions heard in the UK court; or
  • forego the Unitary Patent.

The outcome will be decided during - or following the conclusion of - the two-year negotiation period which follows the triggering of Article 50, which allows the UK to leave the EU. Whether a pragmatic solution can be reached remains to be seen, but in any event, it appears that the UK will comply with and partake in the operation of the UPC for the foreseeable future.

The recent UPC PC statement demonstrates the willingness of a troubled EU to develop its IP framework. The UK Government has indicated that it would prefer the UK to remain a key player in the development of the Unitary Patent, but initial Brexit discussions are unlikely to involve a debate on patents or IP, in the light of all the other areas of concern that need addressing. Despite recent announcements, the future of the Unitary Patent in the UK remains uncertain. Patent holders should remain aware of future developments, and consider further filings where necessary to ensure maximum protection.

We have published a series of blogs and articles relating to the UPC and post-Brexit Intellectual Property Law. To view these, please click the links below.

Brexit and Intellectual Property Rights: What will probably happen next …

Brexit - pursued by a Bear: How Intellectual Property rights would likely be affected

One European Patent to rule them all…


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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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