UK: IP Bulletin – March 2012


The Patent Box

A reduced 10 per cent rate of UK corporation tax for profits attributed to patents and similar types of intellectual property.

It was confirmed in this year's UK Budget on 21 March 2012 that the so-called "Patent Box" (first announced in the UK Budget in November 2010) will be phased in over five years from 1 April 2013. Currently the mainstream corporation tax rate is 24 per cent (23 per cent from 1 April 2014). When the Patent Box regime comes fully into force, a reduced 10 per cent rate of UK corporation tax for profits attributed to patents and similar types of intellectual property will be payable.

Full details of the regime (including the precise nature of what will be regarded as "similar types of intellectual property") have yet to be announced.

Handover methods in the mobile telecommunications industry

In a claim in the Patents Court relating to a patent for method of handing over communications between a mobile telephone and a first base station to a second base station, Nokia sought revocation of the patent and also declarations that the patent was not essential to various international telecommunications standards. IPCom, the patentee, did not actively defend the patent in the form it was granted but put forward three alternative sets of proposed amended claims. The Patents Court noted that the declarations sought implied that it is possible to sell a device which conforms to the standards without infringing the patent but nonetheless heard the claims - and revoked the patent, holding that Nokia were entitled to declarations to the effect that none of the claims the subject of any of the applications to amend is essential to the UMTS, GSM or LTE international telecommunications standards.

NOKIA GMBH v IPCOM GMBH & CO KG [2012] EWHC 225 (Pat), 20 February 2012

In another round in the battle between Nokia and IPCom over patents and royalties, the claimant Nokia GmbH sought revocation of IPCom's European Patent (UK) 1 018 849 relating to a method of handing over communications between a mobile telephone and a first base station to a second base station. Nokia also sought declarations that the patent was not essential to certain telecommunications standards.

The validity of the patent in question was not actively defended by IPCom (IPCom did not advance a positive case that the claims as granted were valid and "if there had been anything which could have been said to support the validity of these claims, IPCom would have said it" – paragraph 42 of the judgment). Instead, IPCom put forward three alternative sets of proposed amended claims, two of which Nokia contended were not allowable.

The Patents Court held that the claims of the patent as granted were invalid. IPCom's main application to amend was not allowable because the claims so amended were invalid for lack of novelty and lack of inventive step (paragraphs 83-148 of the judgment). Further, IPCom's first auxiliary application to amend was not allowable as the amendments added subject matter. The claim was in effect a disclosure of a process which was nowhere to be found in the application as filed. The process disclosed in the application as filed had additional features which were technically and functionally related to the features which had been inserted in the claims (paragraph 152). IPCom's second auxiliary application to amend was allowed subject to an application to amend to remove certain passages of the specification identified by Floyd J (paragraphs 161-165).

The judgment details the court's inherent jurisdiction to grant a binding declaration as to whether the claims of a patent are essential or inessential to a particular standard (paragraph 166). "Whether or not a patent is essential to a standard may be important. If it is essential you cannot make apparatus or operate methods in accordance with the standard without infringing the patent. Accordingly, the patent will inevitably be a source of licensing income for the patentee." Nokia sought declarations that the claims were not essential to three telecommunications standards: UMTS (Universal Mobile Telecommunications System), GSM (Global System for Mobile Communications) and LTE (Long Term Evolution).

The court held that none of the claims in the applications to amend were essential to the GSM and UMTS standards (paragraphs 173 and 177). Also, none of the claims were held essential to the relevant releases of the LTE standard (paragraph 186) (LTE was still in the course of development but this did not mean that the court could not grant such a declaration). Accordingly Nokia were entitled to declarations to the effect that none of the claims the subject of any of the applications to amend is essential to the UMTS, GSM or LTE standards.


The risks of a new marketing campaign

Aggressively targeting a competitor's trade marks as part of a new marketing campaign has taken Asda all the way to the Court of Appeal. Questions have also been referred to the ECJ concerning use of the Specsavers' Wordless Logo mark.

Specsavers International Healthcare Ltd and others v Asda Stores Ltd [2012]

EWCA Civ 24, 31 January 2012

The Court of Appeal allowed in part an appeal by the claimant Specsavers against a High Court decision that a new Asda logo (consisting of two abutting white ovals on a green background with the words "Asda" and "Opticians" written across the ovals in green script) and two straplines ("Be a real specsaver at Asda" and "Spec savings at Asda"), used by the defendant Asda in a marketing campaign to relaunch its optical business, infringed some, but not others, of Specsavers' Community trade marks (CTMs) under Article 9(1)(c) of the CTM Regulation (207/2009/EC). The Court also referred questions to the ECJ concerning whether use of Specsavers' Wordless Logo mark and separate word mark together amounted to use of the Wordless Logo mark for the purposes of Article 15 of the Regulation.

The Asda Logo:

Asda had decided to reposition and relaunch its optical business as a result of which a new marketing strategy was developed which culminated in a campaign of newspaper advertisements, roadside billboards, online and in-store promotion of materials. Specsavers, Asda's main competitor, commenced proceedings for trade mark infringement and passing off as soon as it became aware of Asda's new campaign. The High Court rejected all allegations of infringement except one and rejected the claim for passing off. The court also revoked one of Specsavers' marks for non-use. Specsavers appealed against the findings of non-infringement and invalidity for non-use. Asda crossappealed against the one finding of infringement made by the judge.

On appeal:

The Court of Appeal stayed Specsavers' appeal against the order for revocation of its Wordless logo mark and the allegation that the Asda logo infringed this mark under Articles 9(1)(b) and 9(1)(c) pending a reference to the ECJ (paragraph 181).

Specsavers's Wordless Logo Mark:

The Court has asked the ECJ to consider (a) where a proprietor has separate registrations of CTMs for a graphic device mark and a word mark and uses the two together, whether such use is capable of amounting to use under the Regulation of the graphic device mark; and (b) if so, how should the question of use be assessed (does it make a difference if the word mark is superimposed over the graphic device or if the proprietor has the combined device and word mark registered as a CTM or if the average consumer perceives the graphic device and the words to be separate signs or marks, each having an independent distinctive role).

In addition, the Court has also asked the ECJ to consider whether the use, in colour, of a mark registered in black and white is relevant in the assessment of the likelihood of confusion under Article 9(1)(b) or unfair advantage under Article 9(1)(c) of the Regulation and, if so, how. The ECJ's guidance on these matters will be awaited eagerly by owners of wordless marks who may be concerned that such marks should be used without the addition of words in order to prevent revocation for non-use.

Concerning the allegations of infringement, the Court of Appeal dismissed Asda's appeal against the High Court's ruling that the strapline "Be a real spec saver at Asda" infringed Specsavers' word marks under Article 9(1)(c) because it took unfair advantage of the distinctive character or repute of the CTMs. Asda used the strapline intending to bring Specsavers to mind. Use did not involve an objective comparison of verifiable and representative features of the parties' goods and services (paragraph 149 – 151 of the judgment).

The Court of Appeal upheld Specsavers' appeal that the Asda logo and a second strapline "Spec saving at ASDA" infringed Specsavers' marks under Article 9(1)(c) when used as part of its composite advertising campaign finding that the High Court judge had erred by focusing on the differences between the two straplines when in fact they were "very similar to each other". "Despite the context of the second strapline as a whole, which ... would dispel the likelihood of confusion as to origin, ... the average consumer seeing [the second] strapline would make a connection with Specsavers". This was Asda's intention and the court's findings were amply supported by the evidence as to the conception and development of Asda's marketing campaign. Further, the Court held that Specsavers had made out a case of unfair advantage. In assessing unfair advantage, a global assessment was necessary having regard to all relevant circumstances, the significant reputation attached to Specsavers' marks, the fact that the goods were identical and the fact that it was Asda's intention to target the campaign at Specsavers and to convey the message that Asda offered good, if not better, value. Taking these matters into account, the Court of Appeal was satisfied that the use of the Asda logo and straplines was such as to create a link with the Specsavers' Shaded and Unshaded Logo Marks in the mind of the average consumer, that this link did confer an advantage on Asda and that this advantage was unfair and without due cause (paragraph 164).

Accordingly, a finding of infringement of the Specsavers's word marks and the Specsavers's Shaded and Unshaded logo marks (each of which includes the word Specsavers) under Article 9(1)(c) should have followed (paragraphs 153 and 154).

The Specsavers's Shaded Logo Mark:

The Specsavers's Unshaded Logo Mark:

The court dismissed Specsavers' appeal that the straplines and the logo infringed Specsavers' word and logo marks under Article 9(1)(b). The judge approached the issue of the likelihood of confusion arising from the use of the straplines entirely correctly. The average consumer would see the signs "spec saver" and "spec savings" in the context of the straplines and the posters and other materials on which they were used as a whole, and the judge was right to consider them on that basis. Their use and Asda's logo were not likely to cause confusion or association with Specsavers' word and logo marks and no infringement under Article (9)(1)(b) had been established (see paragraphs 88-102 and 185).


No requirement for ISPs to install filter systems

In a recent ruling which will be welcomed by hosting service providers, the European Court of Justice has held that national courts may not require internet service providers to install a system for filtering information to prevent copyright works being made available to the public in breach of copyright.

Belgische Vereniging van Auteurs, Componisten en Uitgevers CVBA (SABAM) v Netlog NV, Case 360/10, 16 February 2012 "

The defendant, Netlog NV, runs an online social networking platform. The claimant SABAM is a management company which represents authors, composers and publishers of musical works, and further authorises the use by third parties of copyright protected works. SABAM claimed that Netlog's social network offered users the opportunity to make use of copyright works in SABAM's repertoire, making those works available to the public in such a way that other users of the network could have access without SABAM's consent and without payment of a fee by Netlog. SABAM approached Netlog hoping to conclude an agreement regarding payment of a fee. Eventually, SABAM summoned Netlog before the Court of First Instance in Brussels seeking an order that

(a) Netlog cease making available copyright works; and

(b) Netlog pay a penalty of EUR 1000 for each day of delay in complying with the order.

In response, Netlog claimed that the imposition of such an order would mean that Netlog would need to introduce a system for filtering most of the information stored on its servers in order to identify electronic files containing material in respect of which SABAM claimed to own rights and, further, that Netlog would be required to block the exchange of such files. Such a system would have implications in terms of processing personal data. The Brussels court decided to refer to the Court of Justice the question of whether a national court may order a hosting service provider to introduce, at its own cost and for an unlimited period, a system for filtering information for the above purposes.

The ECJ held, applying the principles from its November 2011 judgment in Scarlet Extended Case C-70/10 [2011] ECR I-0000, that the Directives on electronic commerce (2000/31/EC), harmonisation of certain aspect of copyright and related rights in the information society (2001/29/EC) and the enforcement of intellectual property rights (2004/48/EC) must be interpreted as precluding a national court from issuing an injunction against a hosting service provider which requires it to install a system for filtering information with a view to prevent copyright infringement.

The ECJ said there is a fair balance to be struck between the right to intellectual property on the one hand and, on the other, the freedom to conduct business, the right to protect personal data and the freedom to receive or impart information.


ECJ rules on whether a registered Community design may infringe an earlier registered design

The European Court of Justice has ruled that in a dispute relating to infringement of the exclusive right conferred by a registered community design, the right to prevent use by third parties of the design extends to any third party who uses a design that does not produce on informed users a different overall impression. Such third party may include the holder of a later registered community design.

Celaya Emparanza y Galdos Internacional SA v Proyectos Integrales de Balizamiento SL, Case C-488/10, 16 February 2012 "

The claimant brought proceedings in a Spanish court alleging that the defendant had infringed the claimant's registered Community design. The defendant submitted that the claimant lacked locus standi to bring the proceedings because the design marketed by the defendant was a reproduction of a Community design that was registered to the defendant. The defendant argued that until such time as the defendant's registration was cancelled, the defendant enjoyed a right of use under the Community Designs Regulation (6/2002/EC ) ("CDR"). The Spanish court referred two questions to the European Court of Justice ("ECJ"):

1. In proceedings for infringement of the exclusive right conferred by a registered Community design, does the right to prevent the use thereof by third parties provided for in Article 19(1) of the CDR... extend to any third party who uses another design that does not produce on informed users a different overall impression or, on the contrary, is a third party who uses a later Community design registered in his name excluded until such time as that design is declared invalid?

2. Is the answer to the first question unconnected with the intention of the third party or does it depend on his conduct, a decisive point being whether the third party applied for and registered the later Community design after receiving an extra-judicial demand from the holder of the earlier Community design calling on him to cease marketing the product on the ground that it infringes rights deriving from that earlier design?'

The ECJ ruled that Article 19(1) of the CDR should be interpreted as meaning that the right to prevent use by third parties of a Community design extends to any third party (including the third party owner of a later registered Community design) who uses a design that does not produce on informed users a different overall impression and that the answer to this question was not connected with the intention or conduct of the third party.

The ECJ also noted that the CDR makes a clear distinction, as regards actions relating to registered Community designs, between those alleging infringement and those seeking a declaration of invalidity. Such actions are distinguished in terms of their object and effects, "so that the fact that it is possible for the holder of an earlier registered Community design to bring infringement proceedings against the holder of a later registered Community design cannot render the bringing of an application for a declaration of invalidity against the latter before OHIM devoid of any purpose".

Consequently "it must be concluded that, in so far as the later registered Community design, use of which is prohibited, remains valid until such time as it has been declared invalid by OHIM or a Community design court in the context of a counterclaim for a declaration of invalidity, the review system established by the Regulation is not undermined by [the ECJ's conclusion set out at paragraph one above].

Accordingly, the owner of a registered Community design may pursue an infringer without first taking steps to invalidate the infringer's later registered design right.


Ministry of Justice issues call for evidence on European data protection proposals

The Government is seeking evidence on the new legislative proposals for data protection published by the European Commission.

The proposals, consist of a draft Regulation setting out a general EU framework for data protection and a draft Directive on protecting personal data processed for the purposes of prevention, detection, investigation or prosecution of criminal offences and related judicial activities, were published on 25 January 2012.

Data controllers, rights groups and other interested parties have been invited to provide information about the likely impact of the proposals in order to assist the Government in its forthcoming negotiations for an effective EU data protection legislative framework.

ICANN consults on defensive applications for gTLDs

ICANN has launched a consultation on addressing concerns about the need for "defensive" applications for new generic top-level domains (gTLDs).

Applications for the new gTLDs opened from 12 January 2012. The new gTLD program includes carefully crafted, new protections for trade mark owners and consumers. However, at the time of opening the new gTLD application window, parties stated their perception that they would need to submit "defensive" gTLD applications in order to protect their own trade marks. ICANN is seeking public comment on the sources of this perception and how the issue may be addressed.

ICANN's trade mark rights protection and dispute resolution mechanisms for GTLDs

WIPO Arbitration and Mediation Center announcement, Trademark Rights Protection Mechanisms for New gTLDs, 2 February 2012.

WIPO has announced ICANN's range of (a) trade mark rights protection mechanisms; and (b) dispute resolution mechanisms for its new generic top-level domains (gTLDs).

The new rights protection mechanisms are available for use before new gTLDs are approved and become operational. In addition, a range of dispute resolution mechanisms are available for use once a new gTLD has been approved and becomes operational. These include a Trademark Clearinghouse (for use with sunrise periods and trade mark claims services), a Uniform Rapid Suspension system and a Post-Delegation Dispute Resolution Procedure. The existing Uniform Domain Name Dispute Resolution Policy will also apply to all new gTLDs.

EU General Court annuls decision concerning opposition to Basmali figurative Mark doclang=EN&mode=lst&dir=&occ=first&part=1&cid=42597

The EU General Court has annulled the decision of the First Board of Appeal of OHIM rejecting an opposition to an application for the figurative mark "Basmali" by Siam Grains Co. Limited for "long rice".

The opponent, Tilda Riceland private Limited, claimed rights in passing off to the word BASMATI under Article 8(4) of the CTM Regulation (40/94/EEC, now replaced by 207/2009/EC). The appeal board found that Tilda had not proved that it was the proprietor of the BASMATI mark and rejected the opposition.

However, the General Court found that the appeal board erred in rejecting the opposition on the ground that the opponent had not proved that it was the proprietor of the sign in question, without analysing specifically whether the opponent had acquired rights over the BASMATI mark in accordance with the law of the United Kingdom.

PCC rules on infringement of "Griller" figurative mark

Waseem Ghias (t/a Griller) v Mohammed Ikram (t/a the Griller Original) and others [2012] EWPCC 3, 24 January 2012

The Patents County Court has ruled that a device mark consisting of the word "Griller" and "flames" (the "Logo") registered for foods, beverages and restaurant, bar and catering services was infringed under section 10(2) of the Trade Marks Act 1994 by the use, by two of the defendants, of the signs "Griller" and "The Griller Original" for fast-food outlets. The court ruled that the manner of use by the fourth defendant of the name "Griller" gave rise to a likelihood of confusion, as the fourth defendant took the dominant element of the Logo, and used it as a sign in relation to identical services to those within the Logo's registration.

The claimant's Logo:

A second mark registered to the claimant (the "Device") was not infringed. The court found that the differences between the Device and the fourth defendant's signs prevented there being a likelihood of confusion between them.

The claimant's Device mark:

However, the court ruled that the Logo was not infringed by use by the defendants of device marks which included the words "Griller King" and "Griller Hut", also for fast-food outlets. The recorder held that there was a low level of similarity between the claimant's Logo and the "Griller King" and "Griller Hut" signs and that there was no infringement in these cases.

The defendants' "Griller King" mark:

The defendants' "Griller Hut" mark:

Three-dimensional mark incorporating stylised fish devoid of distinctive character?

"Deutsche See" GmbH, Case R 892/20011-2, 7 December 2011

The second appeal board of OHIM has upheld an appeal against an examiner's decision that a three-dimensional (3-D) mark comprising a crate with a stylised fish on the side was devoid of distinctive character.

The applicant, Deutsche See, who had an international registration for the 3-D mark had designated the European Union for the registration. However, the examiner said that the registration did not appear eligible for protection because it did not comply with Article 7(1)(b) of the Community Trade Mark Regulation (the mark was "devoid of any distinctive character").

The applicant filed a notice and grounds of appeal. The appeal board allowed the appeal pointing out that, while the crate itself may be devoid of any distinctive character for food containers, the presence of the fish-like logo on the side of the crate was significant.

The appeal board found the logo to be a highly fanciful design (evident in the top-right of the image as filed which would be highly noticeable in a life-size reproduction) consisting of three parallel wave-like bands terminating on the left hand side of the logo in an unmistakeable 'tail fin'. "It is both 'fish' and 'wave', a design which cleverly combines two concepts in a simple but striking form." In the board's view, the fish device constituted "a striking pictorial element on the side of the three dimensional container which enables the mark as a whole to function as a badge of trade origin for the goods and services in question". Accordingly, the appeal was upheld.

European Commission refers ACTA to the European Court of Justice

On 22 February 2012 the European Commission announced that it had decided to refer the Anti-Counterfeiting Trade Agreement ("ACTA") to the European Court of Justice. ACTA, an international trade agreement intended to help countries work together to tackle more effectively large-scale Intellectual Property Rights violations, was adopted by the European Council in December 2011 and passed to national governments for ratification.

However, recently the ratification process of ACTA has triggered a Europe-wide debate on ACTA, the freedom of the internet and the importance of protecting Europe's Intellectual Property. The European Commission has now asked the European Court of Justice to assess whether ACTA is incompatible - in any way - with the EU's fundamental rights and freedoms, such as freedom of expression and information or data protection and the right to property in case of intellectual property.

[Putting] ".ACTA before the European Court of Justice is a needed step. This debate must be based upon facts and not upon the misinformation or rumour that has dominated social media sites and blogs in recent weeks...ACTA is an agreement that aims to raise global standards of enforcement of intellectual property rights. These very standards are already enshrined in European law. What counts for us is getting other countries to adopt them so that European companies can defend themselves against blatant rip-offs of their products and works when they do business around the world."

The Anti-Counterfeiting Trade Agreement may be found by clicking here.

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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Charles Russell's Intellectual Property Group
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