UK: IP Bulletin – October Edition

KEY CASES AND DEVELOPMENTS

  • Lego Juris A/S v OHIM and MEGA Brands Inc, ECJ- registrability of Lego brick. The ECJ has dismissed Lego's appeal against the EU General Court's decision that its trade mark, consisting of the three-dimensional shape of a Lego brick, was invalid under Article 7(1)(e)(ii) of the CTM Regulation. (See the November 2008 and Jan 2010 Bulletins for the reports on the CFI judgment and Advocate General's Opinion respectively).
  • Oracle America, Inc (formerly Sun Microsystems, Inc) v M-Tech Data Ltd and another, Court of Appeal – judgment in parallel imports case set aside. This case was an appeal from Kitchin J's judgment in which he had granted summary judgment to the claimant, Sun Microsystems, Inc – now Oracle America, Inc. The Court of Appeal has set aside the High Court's decision.

PATENTS

IPO – software patents

Dell Products LP BL O/321/10, 16 September 2010

A hearing officer of the IPO has held that the IPO must follow the decision of the Court of Appeal in Symbian in determining the patentability of computer-implemented inventions, rather than the EPO practice.

In Symbian, it was held that the Court of Appeal may depart from its previous decisions, if it was satisfied that the EPO Enlarged Board of Appeals had formed a settled view on an issue which differed from that arrived at in a previous decision. However, it was not bound to do so.

The Hearing Officer said that if she could be certain that the Court of Appeal would follow the EPO's approach, it might be difficult for her to continue to follow the precedent set in Symbian. However, the Court of Appeal clearly did not consider the law at the EPO to be settled at the time of Symbian.

The Hearing Officer added that it was worth noting that the questions referred by the President which were deemed inadmissible by the Enlarged Board (see May 2010 Bulletin) were not the same as those on which the Court of Appeal sought clarity. Further, even if the Court did now consider the law to be settled, it is not certain that it would adopt the EPO approach, as it is not bound to depart from its earlier precedent.

TRADE MARKS

ECJ - registrability of Lego brick

Lego Juris A/S v OHIM and MEGA Brands Inc, Case C-48/09 P, 14 September 2010

The ECJ has dismissed Lego's appeal against the EU General Court's decision that its trade mark, consisting of the three-dimensional shape of a Lego brick, was invalid under Article 7(1)(e)(ii) of the CTM Regulation. (See the November 2008 and Jan 2010 Bulletins for the reports on the CFI judgment and Advocate General's Opinion respectively).

Article 7(1)(e)(ii) of the CTM Regulation provides that it is not possible to register as a CTM a mark which consists exclusively of the shape of goods which is necessary to obtain a technical result.

Lego Juris A/S was the owner of the CTM below, consisting of the three-dimensional shape of a red Lego brick. Mega Brands applied to have the mark declared invalid.

The ECJ held that the General Court's interpretation was consistent with Philips. The presence of one or more minor arbitrary elements in a three-dimensional sign, all of whose essential characteristics were dictated by the technical solution to which that sign gave effect, did not alter the conclusion that the sign consisted exclusively of the shape of goods which was necessary to obtain a technical result.

The expression "essential characteristics" referred to the most important elements of the sign. Once the essential characteristics of the sign had been identified, it was only necessary to assess whether those characteristics performed the technical function of the product concerned. The technical functionality could be assessed by taking into account previous patents describing the functional elements of the shape concerned, as was the case here.

The restriction on the prohibition in Article 7(1)(e)(ii) to the shape of goods which was "necessary" to obtain a technical result did not mean that the shape at issue must be the only one capable of obtaining that result.

The ECJ rejected Lego's argument that the General Court had been wrong not to have taken into account surveys on the public's perception of the shape of the goods. It said that the situation was different from Article 3(1)(b) of the Trade Marks Directive and Article 7(1)(b) of the CTM Regulation, where the perception of the relevant public must be taken into account to determine whether the sign enabled the goods or services to be recognised as originating from a particular undertaking. There was no such obligation in Article 7(1)(e) of the CTM Regulation.

Court of Appeal – judgment in parallel imports case set aside

Oracle America, Inc (formerly Sun Microsystems, Inc) v M-Tech Data Ltd and another, [2010] EWCA Civ 997, 24 August 2010

This case was an appeal from Kitchin J's judgment in which he had granted summary judgment to the claimant, Sun Microsystems, Inc – now Oracle America, Inc. (See November 2009 Bulletin for the report of the High Court decision.) The Court of Appeal has set aside the High Court's decision.

Oracle had commenced an action for trade mark infringement against the defendant, MTech, in connection with 64 SUN disk drives M-Tech had purchased in the US, imported into the UK and sold to another business. Oracle alleged that these were put on the market without its consent and so constituted trade mark infringement.

M-Tech argued that the disc drives may have been first marketed in the EEA, in which case Oracle's rights were exhausted under Article 7 of the Trade Marks Directive. MTech also argued that Sun's enforcement of its trade mark rights was contrary to the free movement provisions under Articles 34-36 of the Treaty on the Functioning of the EU (formerly Articles 28-30 of the EC Treaty), and that Sun's agreements with its authorised distributors were contrary to Article 101 of the Treaty on the Functioning of the EU (formerly Article 81 of the EC Treaty).

Kitchin J found that the disc drives were first marketed outside the EEA and he did not accept M-Tech's arguments relating to free movement of goods. Although Sun accepted, for the purposes of this application, that its agreements breached Article 101, the judge found that there was no connection between this and the enforcement of its trade mark rights to prevent parallel imports.

M-tech appealed on the basis of its two Euro-defences based on Articles 34, 36 and 101. It also argued that Oracle's action was an abuse of the rights conferred by Article 5 of the Trade Marks Directive (a trade mark owner can prevent use, in the course of trade, of an identical sign on identical goods or services).

The Court of Appeal held that the order for summary judgment should be set aside and the case remitted to the High Court for trial, with a view to the trial judge subsequently making a reference to the ECJ, if appropriate. The principal judgment was given by Arden LJ who concluded that M-tech's defences were properly arguable.

M-tech relied on Oracle's failure to supply any serial mark tracker, and on terms in Oracle's distribution agreements requiring distributors to buy from within the supply network wherever possible. Arden LJ said that there was no case directly on the question of whether such practices or aggressive litigation against parallel importers, could constitute measures "having equivalent effect" to quantitative restrictions on imports for the purpose of Article 34 and, if so, whether such measures would qualify the rights in Articles 5 and 7 of the Trade Marks Directive.

Arden LJ held that there was an arguable point on connection between an allegation that Oracle's distribution agreements were contrary to Article 101 and the enforcement of Oracle's trade mark rights. The ECJ had not held that Article 101 could not be used in trade mark cases.

Although the Court of Appeal appears to have made surprising decisions, this is on the basis of the summary judgment application not being fully argued and the case now being remitted to the High Court to be fully argued at trial.

Court of Appeal – exclusive trade mark licence

Hudson Bay Apparel Brands LLC v Umbro International Limited, [2010] EWCA Civ 949, 11 August 2010

The Court of Appeal has dismissed an appeal by the claimant trade mark licensee, Hudson Bay, against the earlier High Court decision.

The case concerned two trade mark licences granted by Umbro to two different parties to use the same logos on sportswear. One of the licensees, Hudson Bay, claimed for breach of the exclusivity of its licence, and Umbro counterclaimed against Hudson Bay for breach of its licence by marketing goods that were outside the scope of the licence.

The High Court partially rejected Hudson's Bay claim that Umbro had impeded its ability to exploit its licence by breaching the term granting exclusivity, and granted Umbro's counterclaim.

The Court of Appeal dismissed Hudson Bay's appeal. Much of the case concerned whether particular goods fell within the scope of the licences, and whether a representative of the licensor's subsidiary, who was negotiating with the licensee, had authority to bind the parent company.

Advocate General Opinion –"bud" appellation of origin in CTM opposition to BUD trade mark

Anheuser-Busch Inc v Budějovický Budvar, Case C-96/09 P, 14 September 2010

The Advocate General has recommended that the ECJ annul the decision of the EU General court which allowed an opposition by Budvar to an application by Anheuser- Busch Inc. to register the word BUD. The opposition was made under Article 8(4) of the CTM Regulation based on Budvar's appellation of origin "bud" (see December 2008/January 2009 Bulletin).

Article 8(4) of the CTM Regulation provides that:

"Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the law of the Member State governing that sign,

  1. rights to that sign were acquired prior to the date of application for registration of the Community trade mark, or the date of the priority claimed for the application for registration of the Community trade mark;
  2. that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark."

The opinion addresses how "use in the course of trade" should be assessed. The AG said that there were important differences between the "genuine use" test applicable to earlier trade marks cited in opposition and the Article 8(4) use requirements. Use should be in accordance with the essential function of the sign concerned. In the case ofgeographical indications, this is to guarantee the geographical origin or inherent characteristics of a product. If, instead, the geographical indication had been used as a trade mark, then such use may not be within Article 8(4).

Regarding the relevant territory, the AG said that, although Article 8(4) did not refer to use "in the Community", it was logical to assume that the relevant public was that of the place where the right enjoyed protection. The relevant period for assessing use could not include the time between filing and publication of the CTM application

When considering whether a sign had "more than mere local significance", the AG said that the history of use should be taken into account. The fact that the opponent had legal rights in the sign in more than one member state would not necessarily mean that it had such significance; a commercial presence or importance is required. The AG said that "bud" appellation of origin only had local significance, and the fact that it existed in more than one member state did not alter this.

Advocate General Opinion - priority date for PGIs

Bayerischer Brauerbund eV v Bavaria NV, Case C-120/08, 16 September 2010

The Advocate General has given an opinion on the correct priority date for protected designations of origin (PDOs) and protected geographical indications (PGIs) that were registered under the "simplified" procedure" under which there was no requirement to publish details before registration.

His opinion is that priority over trade mark applications for conflicting rights should run from the date when registration of the PGI or PDO was published.

COPYRIGHT

High Court - royalty rates for broadcasting music videos

CSC Media Group Ltd v Video Performance Ltd, [2010] EWHC 2094 (Ch), Floyd J, 10 August 2010

The High Court has allowed an appeal against the first Copyright Tribunal decision concerning the royalty rates payable for broadcasting music videos.

The Tribunal had concluded that the rate should be 12.5% of gross revenue, subject to deduction of advertising and other costs. It ruled that 30% of the anticipated royalty would be a fair proportion to pay in advance. (See August/September 2009 Bulletin).

The court held that the Copyright Tribunal had not given sufficient weight to the terms of other comparable licences, in particular a licence between Video Performance Ltd and BSkyB, which set a rate of 20%. This was contrary to section 129 of the Copyright, Designs and Patents Act 1988. The correct approach should be to start with the most relevant comparable licence and adapt it to the circumstances of the case.

The court remitted the application to a differently constituted Tribunal for a rehearing.

BIS - Online Infringement of Copyright (Initial Obligations) Costs-Sharing

http://www.bis.gov.uk/Consultations/online-infringement-ofcopyright? cat=closedwithresponse http://nds.coi.gov.uk/content/detail.aspx?NewsAreaId=2&ReleaseID=415452&Subje ctId=2

14 September 2010

The Government has responded following the consultation by the Department for Business, Innovation and Skills on the government's proposals for the sharing of costs relating to the initial obligations for dealing with online infringement of copyright under the Digital Economy Act 2010. (See March 2010 Bulletin).

Under the initial obligations, internet service providers (ISPs) are required to notify their subscribers if their internet protocol addresses are included in copyright owners' copyright infringement reports (CIRs), and to provide copyright owners, on an anonymous basis, with copyright infringement lists of subscribers included in a number of CIRs above a certain threshold.

The Government has decided that, as per the consultation proposal, notification costs should be shared between copyright owners and ISPs in the ratio 75:25. The Government also announced that no fee will be charged to consumers who want to appeal a notification.

GENERAL

EPO-USPTO patent prosecution highway- extension

EPO press release, 13 September 2010

The European Patent Office and the United States Patent and Trademark Office have announced that they intend to extend the trial period for the Patent Prosecution Highway (PPH) Programme until 28 January 2012.

IPO-USPTO joint statement on cooperation

IPO press release, 22 September 2010

In March 2010, the United States Patent and Trademark Office and the IPO announced plans to begin cooperation on increasing the efficiency and quality of the patent examination process by making greater use of each other's work on commonly filed patent applications and eliminating duplication of work.

The offices have completed the foundation work and preliminary studies, and will begin work-sharing in October. The initial phase of implementation will focus on maximising reuse during examination of commonly filed applications by providing access to work completed and currently made available by each office. This will be combined with examiner training, data collection and analysis. At the same time the offices will work on such longer-term issues as easier access to each office's application files.

Civil Procedure Rules

Ministry of Justice press release

http://www.justice.gov.uk/civil/procrules_fin/index.htm

The 53rd Update to the Civil Procedure Rules introduces changes in a large number ofareas. All amendments come into force on 1st October 2010.

There are amendments to the rules in Part 63 Intellectual Property Claims and the Part 63 Practice Direction to provide a simpler route for lower value claims including scale costs for each stage of the process with a total cap on costs of £50,000.00 for a claim relating to liability and £25,000 for an inquiry as to damages or account of profits. Consequential amendments are made to PD30, Part 45 and the Costs Practice Direction.

WIPO – online tool for IP laws and treaties

WIPO press release, 20 September 2010

http://www.wipo.int/pressroom/en/articles/2010/article_0033.html

WIPO has launched WIPO Lex, an on-line global intellectual property reference resource which provides up-to-date information on national IP laws and treaties.

WIPO Lex currently features the complete IP legal texts for over 60 countries with substantial coverage for a further 100 legal systems. It also provides, especially for countries that do not yet have their own database of laws, an internet platform to make available information concerning their respective IP legislations.

OHIM – changes in practice

OHIM press release, 2 August 2010

OHIM is introducing changes in practice on suspensions and extensions of time, and new guidelines on the presentation of evidence of proof of use in opposition proceedings.

IPO – cross-examination

Tribunal Practice Notice 3/2010, 10 August 2010

The registrar has reviewed his practice for dealing with requests for cross- examination of a witness in trade mark matters. This Notice sets out the new practice.

Whilst there is a presumption in favour of cross-examination, the registrar has to be satisfied that it is appropriate in all the circumstances. To ensure that the registrar has the necessary information on which to base his decision and to ensure the effective conduct of proceedings, all parties making a request for cross-examination should, with immediate effect, make the request in writing in accordance with the Notice. The other party(ies) will have the opportunity to comment on the request before a decision is made.

IPO – time periods

IPO Tribunal Practice Notice TPN 2/2010, 6 August 2010

The Notice concerns the time periods for the submission of evidence and submissions in inter partes trade mark proceedings.

The Trade Marks Rules 2008 require the Registrar to specify the time periods and Tribunal Practice Notice 3/2008 provided some indicative time periods whilst stressing that individual cases would be assessed on their own merit.

The Registrar has now reviewed the periods normally allowed for filing evidence/submissions and has come to the conclusions set out in the Notice.

EU-Australia wine trade agreement

Europa press release, 1 September 2010

A new agreement governing the wine trade between Australia and the European Union entered into force on 1 September 2010. This agreement replaces the one signed in 1994.

The agreement provides for the immediate protection of some EU Geographical Indications for wines. For the use of other key EU Geographical Indications and traditional expressions for wine, phase out periods have been agreed. Australian producers will not be able to continue the use of "Champagne", "Port", "Sherry" and other European geographical indications, along with some traditional expressions such as, "Amontillado", "Claret", and "Auslese" from 1 September 2011.

The new agreement also outlines the conditions for Australian wine producers to continue to use a number of quality wine terms, such as "vintage", "cream" and "tawny" to describe Australian wines exported to Europe and sold domestically.

In 2009, EU wine exports to Australia were worth € 68 million and Australian exports to the EU were worth € 643 million.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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