The UK High Court has granted cigarette and tobacco company Philip Morris a final injunction prohibiting Chinese manufacturer Shenzhen Shunbao Technology Co. Ltd from putting their rival tobacco heating product on the market anywhere within the EU and the UK. How was Philip Morris able to achieve should widespread prevention? By virtue of their Intellectual Property, and specifically, their Registered Community Design.
Philip Morris International (PMI), produce a smoke-free "IQOS" system branded as "a new alternative to smoking that heats tobacco rather than burning it". As part of their intellectual property portfolio in relation to IQOS, which includes a number of trademarks and patents, PMI hold a Registered Community Design protecting the appearance of a device forming part of the IQOS system.
Design protection is a less well-known mechanism by which Intellectual Property can be protected, often taking a backseat to the more prominent patents and trademarks. However, design rights can provide valuable protection for the shape, patterns and colours of a product. Furthermore, obtaining design protection, particularly within the EU, can be a quicker and less expensive process than obtaining patent protection.
PMI took advantage of EU design protection and in 2015 obtained a Registered Community Design to protect the appearance of the IQOS holder, shown below.
In 2018 Shenzhen Shunbao Technology Co. Ltd (Shunbao) marketed in China their "AMO" product, a tobacco heating device, shown below, having a very similar appearance to the IQOS system developed by PMI. Shunbao intended to launch AMO at Vaper Expo 2018, a vaping trade show in the UK, which prompted PMI to commence proceedings against Shunbao in the UK for infringement of their Registered Community Design. At the same time, PMI applied for an urgent interim injunction, to prevent Shunbao from acting pending a decision on the infringement. This urgent interim injunction was granted in January 2019.
On 11 May 2020, the UK High Court granted a default judgement against Shunbao, who did not participate in the proceedings, which included a final injunction prohibiting the putting on the market of the AMO Holder anywhere in the United Kingdom or the European Union.
Design rights: a valuable addition to an IP portfolio
This decision not only shows the value and benefit of registered design rights, which can be somewhat more straightforward to obtain in comparison to other forms of IP, but provides clarity to litigants, that where appropriate, the UK courts are prepared to grant forward-looking orders in view of the changes to UK law that will occur at the end of the Brexit transition period.
After the end of the UK's transition period for leaving the EU, the UK will not remain fully subject to EU law and the above injunction will no longer apply in the UK, as acts done in the UK will not be considered to infringe Registered Community Designs.
Nevertheless, at the end of the transition period, equivalent UK Registered Design Rights will automatically arise for Registered Community Designs that are registered and fully published as at 31 December 2020. As such, the UK High Court were also prepared, at the request of PMI, to grant an injunction against Shunbao in respect of the equivalent UK design right that is yet to arise, thus providing continuity and certainty to judgements that extend post Brexit.
The judgement issued by the UK High Court will likely be exactly what PMI sought, preventing Shunbao's AMO from entering the European market, but, the smoke hasn't gone away just yet for PMI, as on 9 April 2020 R. J. Reynolds filed complaints in the United States against PMI, alleging infringement of a number of their patents relating to vaporizers. It looks like IQOS may be heating up more than just tobacco sticks in the coming years.
Originally published 17 June 2020
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