UK: Intellectual Property

Last Updated: 24 June 2002

in short... February 2002 Issue No. 24

gossIP

  • Registered Designs: the new Registered Designs Act which brings English law into line with the provisions of the EC Designs Directive came into force on 9 December 2001. For details see Issue 23 and Stop Press November 2001.
  • Community Designs: The Council Regulation on Community Designs was published in the Official Journal on 5 January. The Regulation introduces both a Community Unregistered Design and a Community Registered Design, applied for through OHIM (the Office for Harmonisation in the Internal market). The Regulation comes into force on 6 March 2002.
  • The Copyright, etc and Trade Marks (Offences and Enforcement) Bill has passed through the committee stage in the House of Commons unscathed. The Report stage is due on 12 April. The Bill will then proceed to the House of Lords. The Bill amends the Copyright, Designs and Patents Act 1988 in respect of criminal offences, search warrants, powers of seizure and orders for forfeiture and the Trade Marks Act 1994 in respect of search warrants and powers of seizure and other related matters.
  • Viagra-Patent: On 23 January the Court of Appeal upheld the decision of Mr.Justice Laddie that Pfizer’s European Patent for "Viagra" was invalid because it was not inventive -it was obvious to try to use the patented compounds for the treatment of male impotence.

Designs

The Community Design Regulation

On 12 December 2001 the Council of the European Union adopted the Community Design Regulation – Council Regulation (EC) No 6/2002. The Regulation will enter into force on 6 March this year.

Two new IP rights will be available both to be called "Community Design" – a registered Community Design capable of lasting up to 25 years from registration and an unregistered Community Design capable of lasting for the much shorter period of three years from the date that the design was first made available to the public in the Community.

Applications for the new registered Community Design will be made to OHIM. The Office has yet to pass the enabling procedural regulations and this right will not come into effect until a date yet to be fixed by the Office.

The new unregistered Community Design will confer automatic protection against copying from 6 March. There will be no need to apply for registration – protection is available as soon as the design is first made public in the EU.

Disputes concerning the infringement and validity of both types of Community Design will be heard by Community Design Courts designated by the Member States. The decision of such a court in any one EU country will be binding throughout the EU. As yet the UK has not designated which court will be the Design Court.

The provisions of the Regulation mirror those of the Designs Directive : Directive 98/71/EC.

A Community Design will have a unitary character – it will have equal effect throughout the Community. It can only be registered, transferred, surrendered and declared invalid in respect of the whole of the Community. However, it can be licensed for the whole or part of the Community .

The definition of Community Design is like that for our own new registered design - "design" means the appearance of the whole or part of a product resulting from the features of, in particular (but not limited to) the lines, contours, colours, shape, texture and/or materials of the product itself or its ornamentation. A product can be industrial or a one-off handicraft item and can include a wide range of things except for computer programs although it can include graphic symbols that appear on such programs.

Any feature whose appearance is dictated by its function is not entitled to protection.

The rights conferred by the new Community Designs will not be enforceable against use of designs of component parts of complex products for repair purposes (which includes the manufacture and sale of parts as spare parts for the repair market).

The novelty and individual character requirements mirror the Directive’s. To be a Community Design whether registered or not the design must be "new" and have "individual character".

In the case of an unregistered Community Design a design will be new if, before the date that the design became public no identical design had been publicly available. In the case of a registered Community Design the relevant date is the date that the application for registration is made. In both cases designs are deemed identical if their features differ only in immaterial details.

If a design gives a different overall impression to an informed user (usually the user) to any existing design the later design will have individual character.

There is a 12 month Grace Period for registered designs – the designer can test the water and market the product including the design without his own marketing defeating the novelty of the design provided that he makes an application for a registered Community Design within a year of that first use.

The rules of ownership are straightforward – usually the designer will be the person entitled to the Community Design unless employed in which case the employer will be own the design.

The rights given by the two types of Community Design do differ to reflect their different terms and requirements. The unregistered Community Design provides only limited protection - against copying of the design for a three year period. The same acts are prevented as in the case of the registered Community Design but only in respect of a product which has copied the design. The registered Community Design gives the owner the exclusive right to use the design - anyone making, offering, putting on the market, importing , exporting or using a product including the design whether copied or not is infringing. The registered Community Design can last for a maximum of 25 years.

The Regulation sets out the grounds of invalidity. It will not possible to apply to a court for a declaration of invalidity in respect of a registered Community Design unless as part of a counterclaim to an infringement action. The application must be made to the Office.

The Office will keep a register of registered Community Designs but not of unregistered ones. It is going to be much harder to find out about pre existing unregistered Community Designs. The UK design right is a similar animal but the unregistered Community Design is likely to be more complex. Its short lifespan will mean its benefit is limited. However, in sectors where products come and go very quickly it may provide an important initial period of protection against competitors.

How the new Community Design matures remains to be seen - it is inevitable that with so many possible different interpretations of the Regulation likely throughout the EU a reference will be made to the ECJ for guidance on the meaning of aspects of the Regulation.

However, the Regulation introduces another means of acquiring Community wide protection for an IP right addition to the Community Trade Mark. It will be interesting to see how many designers and companies will take advantage of this new right.

Passing Off

Radio Taxis -v- Dial-a-Cab

Chancery Division 12 October 2001 - unreported

In this recent case between two companies operating radio circuits for licensed black cabs in London, Radio Taxis was unsuccessful in establishing passing off by Dial-a- Cab in relation to Dial-a-Cab’s registration of the domain name "www.radiotaxis.com" and its installation of a direct link between that site and its usual website address, "www.dialacab.co.uk", so that anyone visiting "www.radiotaxis.com" would be taken directly to the Dial-a-Cab site.

The Court pointed out that Radio Taxis was a descriptive or generic name as well as a trading name, that various trading names had been used over the years and when

"Radio Taxis" had been used it had usually been as part of a logo or get-up. It held that whilst Radio Taxis had become known as such in the trade, it had not proved the necessary reputation on the part of the general public for a claim in passing off. This burden was more difficult to discharge in respect of an entirely descriptive or generic name and someone who chose to trade under such a name had to live with the risk that there could be some confusion as a result. As this was a trade organisation, it would not be inherently surprising if no reputation with the general public was proved.

The Court also held that there was no misrepresentation: Dial-a-Cab’s acts were not calculated or likely to lead to the belief on the part of members of the general public that Dial-a-Cab’s business was connected or associated with Radio Taxis. The Court accepted Dial-a-Cab’s evidence that its intention at the time it registered the domain name was to use it to promote Dial-a-Cab’s services as a supplier of radio taxis and the profile of the company generally at a public relations level, including internationally; if anyone wanted to know about radio taxis, Dial-a-Cab would be at the forefront of the material on display. It was not seeking to divert business; the representation was simply that Dial-a-Cab was a business, operating a radio taxi service. The domain name registration was not to be treated as a instrument of fraud in Dial-a-Cab’s hands.

Influencing factors included the fact that the words "Radio Taxis" were frequently used with a generic or descriptive meaning; generic domains are in general use; Dial-a-Cab did operate a radio taxi service; there was nothing in the webpages themselves to give rise to any such confusion; there was a difference between the appearance of the website address as it would appear on the computer screen, "www.radiotaxis.com", and the trading name, "Radio Taxis"; there had been an apparent lack of concern on the part of Radio Taxis when it first learned of the site and direct link; and despite the operation of the domain name and direct link for some two years, there was no evidence of actual confusion. There was also no actual damage during that two year period, and Radio Taxis could not show a likelihood that such damage would be suffered in the future.

Patents

CIL International Limited -v- Vitrashop Limited [2002] FSR 67

This case deals with the cost consequences of an amendment by a Defendant within a patent case of its Particulars of Objection i.e. an amendment to introduce a new piece of prior art to challenge either novelty or obviousness. The Defendant in this case applied to amend its Particulars of Objection some three weeks prior to trial so as to introduce the new piece of prior art. The Claimant was prepared to accept such amendment subject to the Court granting a See -v- Scott-Paine Order subject to costs.

This is the first case of which the Courts have considered the appropriateness of a See -v- Scott-Paine Order under the CPR. A See -v- Scott-Paine Order following amendments to Particulars of Objections, allows the Claimant to discontinue his patent action with the Defendant being responsible for all of the Claimant’s costs from the date of service of the Particulars of Objection and the later amendment. Mr Justice Pumfrey whilst seeing the good sense of the See -v- Scott-Paine Order in general said it was capable of working injustice and was not appropriate in every case. All circumstances as of the date on which the amendment to the Particulars of Objection was sought had to be considered. This included the following factors:

  1. the diligence of the Defendant;
  2. whether the matters which were the subject matter of the proposed amendment were within the knowledge of the patentee;
  3. the lateness of the amendment;
  4. whether the patentee had applied to amend the patent;
  5. the element of surprise to the patentee.

The most important consideration was the diligence of the Defendant in seeking out matters upon which he could rely in making his objection to validity of the patent.

On the facts the judge said that the Defendant had been diligent and that the substance of the new objection could not have come as any surprise to the patentee as it only strengthened a case that had in general already been set out. He allowed the amendment of the Particulars of Objection and without making a See -v- Scott-Paine order. The Defendant therefore had only to pay the Claimant’s costs of and occasioned by the amendment in any event, the usual order on amendment.

Trade Marks

Frank Yu Kwan Yuen v (1) Mcdonald’s Corporation

(2) Mcdonald’s Restaurants Ltd

Chancery Division 27 November 2001

This was an appeal to the High Court against the decision of the Trade Marks Registry Hearing Officer in connection with McDonald’s opposition to an application to register McCHINA for foodstuffs and restaurant services. As the opposed application was filed in 1992, under the provisions of the 1938 Trade Marks Act, the decision is of limited, mainly historical legal interest, although underlying the decision one detects a reluctance to grant broad monopolies which is probably equally relevant to current day practice under the Trade Marks Act 1994.

The opponent was the owner of a number of trade mark registrations for McDONALD’S, MacDONALD’S, MAC and other marks employing the "Mc" prefix for goods and services in the fast food business. Bearing in mind these registrations and the reputation its trade marks had acquired, McDonald’s claimed that the applicant’s use of the McCHINA mark would give rise to confusion, and that the application should be refused under the relevant provisions of the 1938 Act. The Registry Hearing Officer found in favour of McDonald’s on one of the grounds of opposition, but in reaching this decision relied on survey evidence submitted by McDonald’s in different opposition proceedings, but not in the present opposition. The applicant appealed the finding in favour of McDonald’s on this procedural ground, and McDonald’s appealed the point on which it had lost.

On the question of the respective trade marks being confusingly similar, Mr Justice Neuberger applied a strict mark-for-mark test, and found that McCHINA was not similar to McDONALD’S, MAC, or any of the other marks relied upon. On the more general ground relied upon by the opponent, that the applicant’s mark was likely to deceive or cause confusion, the judge criticised the survey evidence relied upon by McDonald’s (a second survey prepared specifically for these proceedings) and was reluctant to find, notwithstanding the considerable reputation demonstrated by the opponent’s evidence, that on the basis of the opponent’s "family" of "Mc" marks, members of the public were likely to be deceived or confused. Whilst, under the 1938 Act, the onus was on the applicant to show that his use of McCHINA, in a normal and fair manner, was not reasonably likely to cause deception and confusion, the judgment in fact reads as if the burden of proof were on the opponent. The reason for this, it seems, is that the judge perceived the opponent’s case as "virtually seeking to monopolise all names and words with prefix Mc or Mac, at least in relation to food or restaurant services". The judge felt that "...a tribunal would have to be particularly careful before upholding an objection on such a very wide ground...the reasoning behind the refusal would be getting precious close to concluding that any user of a name beginning "Mc" or "Mac" in the fast food or take away business would almost ipso facto be at severe risk of being guilty of passing off".

Laboratories Goemar SA -v- La Mer Technology Inc

Chancery Division 19 December 2001 - unreported

Applications were made for revocation of the trade mark LABORATOIRE DE LA MER in classes 3 and 5. The Respondent was a French company specialising in seaweed products. It had appointed an agent in Scotland to sell such products but had achieved limited sales in the UK. In addition the sales had not been over a continuous period. Both registrations had been on the register for more than 5 years.

In relation to the class 5 registration the Respondent argued that the seaweed products were "dietetic products for medical use" and therefore fell within class 5. Mr Justice Jacob rejected this, stating that products which provide health benefits should not necessarily be regarded as products for medical use. A medicine is for the treatment of disease; these products were used by healthy people. The class 5 registration was revoked.

Jacob J then turned to a question of more general application - whether there had been "genuine use" of the mark. The Applicant referred to the Crate & Barrel case where it was held that genuine use involves consideration of both the quantity as well as the nature of the use. Jacob J distinguished the case as being a decision on whether those uses took place in the UK, as opposed to whether a very limited amount of use (undoubtedly in the UK) was sufficient to be "genuine".

Jacob J decided this question was sufficiently important to refer to the European Court of Justice. He was also concerned that other European legislation may not take the same approach to "genuine". It appears some countries have used the word "serious" which may exclude insubstantial sales.

Jacob J’s view was that there was, and should be, no de minimis rule. The Court stated that ". . . there seems no reason to make a trader who has actually made some small, but proper, use of his mark, lose it. Only if his use is in essence a pretence at trade should he do so". This is consistent with the law prior to the 1994 Act. In Imperial Group -v- Philip Morris (the "Nerit" cigarettes case) the decision was made on the basis of whether the use was "genuine" as opposed to the level of sales.

It is suggested that this must be the correct approach. The level of sales can be evidence of whether the use of the mark is "genuine" but a low level of sales per se should not lead to revocation of the mark. This also avoids the difficulty of formulating a de minimis rule which would have to take into account the size of the undertaking, the level of sales, the size of the market and so on. It is hoped that the ECJ will follow Mr Justice Jacob’s approach.

e-commerce corner!

  • Accessing archived materials on-line gives rise to liability for internet publishers

The Court of Appeal has recently confirmed the courts’ view that accessing archived material on-line gives rise to a different instance of publication each time material is viewed (The Times v Dr Loutchansky). Dr Loutchansky had brought action against The Times in respect of articles published in 1999. He took further action when The Times failed to alter or remove the articles from its internet archive and argued that according to the case of Duke of Brunswick v Harmer (1849) each time the archived articles were accessed on-line represented a new publication. The Times argued that this interpretation should not apply to the internet and that this could have a damaging effect for on-line archives of this nature. The Court of Appeal, however, dismissed this argument and said that in such a situation, the newspaper could have attached a note to the archived article to warn against treating it as the truth in instances where there was a possibility (or an actuality) of a libel action.

This seems to follow recent cases relating to the liability of on-line content providers and ISPs where the courts are ruling that liability arises if the ISP has knowledge of defamatory or obscene material and fails to act in order to rectify the situation.

  • ToysRus.com ‘fined’ and told to tighten its privacy policies

In the US, Toys R Us have recently been ordered by the Division of Consumer Affairs to pay $50,000 to the State of New Jersey and to tighten up its privacy policies to ensure that customers know precisely how their data was to be held and processed. Toys R Us were told specifically to provide an accurate summary of its privacy policy and the distribution of data obtained via the website and ensure that its privacy policy could easily be viewed by customers on line. Toys R Us co-operated openly and fully with the DCA and made all the required changes to its policy.

This case shows how seriously Data Protection is being viewed and how important it is to ensure that you are complying with the new act and are maintaining proper procedures.

In Short . . highlights current legal developments. It is not a substitute for proper advice.

This is a commentary to update those involved in regulated banking, investment, or corporate activities, on important developments affecting them. Since this is a quick reference facility, it is not a substitute for obtaining specific professional advice.

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