UK: IP Bulletin – Bumper Summer Edition: August 2010

CASES FROM JULY 2010

KEY CASES AND DEVELOPMENTS

• AstraZeneca AB and AstraZeneca plc v Commission, EU General Court - abuse of dominant position. This case was an appeal by AstraZeneca to the General Court against a decision of the European Commission which had fined AstraZeneca EUR60 million for abuse of its dominant position by patent misuse. The court mainly upheld the Commission's decision, but reduced the fine to EUR52.5 million.
• SAS Institute Inc v World Programming Ltd, High Court – Software Directive reference to ECJ. The High Court has made a reference to the ECJ concerning the interpretation of the Software Directive. The precise wording of the questions has not yet been finalised.
• In the matter of trade mark application no 2528977 in the name of the Chartered Institute of Patent Attorneys, Appointed Person – class headings in trade mark applications. The Appointed Person has made a reference to the ECJ concerning the use of class headings in trade mark applications.

PATENTS

ECJ – Biotechnology Directive

Monsanto Technology LLC v Cefetra BV and others, Case C 428/08, 6 July 2010

The court has followed the Advocate General's opinion on questions referred to the ECJ by the Dutch court on the provisions of the EC Biotechnology Directive (98/44). See the March 2010 Bulletin for the report of the AG Opinion.

EU General Court - Abuse of Dominant Position

AstraZeneca AB and AstraZeneca plc v Commission, Case T-321/05, 1 July 2010

This case was an appeal by AstraZeneca to the General Court against a decision of the European Commission which had fined AstraZeneca EUR60 million for abuse of its dominant position by patent misuse. The court mainly upheld the Commission's decision, but reduced the fine to EUR52.5 million.

The Commission had found in 2005 that AstraZeneca had breached Article 82 of the EC Treaty (now Article 102 of the TFEU) by blocking or delaying market entry by parallel importers and generic competitors of its ulcer drug Losec. AstraZeneca was found to have abused its dominant position by making misleading representations to patent offices and national courts in order to obtain SPCs, and submitting requests for deregistration of marketing authorisations for Losec capsules in Denmark, Norway and Sweden.

In a long judgment, the court agreed with the Commission's conclusions on market definition and dominance. The court upheld the Commission's decision that AstraZeneca had abused its dominant position by making misleading representations to patent offices when applying for SPC's for Losec. AstraZeneca was not entitled to these SPCs, or only entitled to them for a shorter period.

The court also upheld the Commission's finding that AstraZeneca's deregistration of the marketing authorisations for Losec capsule in Denmark, Norway and Sweden, together with the launch of a new Losec product in those countries, amounted to an abuse of a dominant position, in so far as it restricted access to the market for generic products in those countries.

In relation to Sweden, it was clear that the Swedish authorities only granted parallel import licences if there was a valid marketing authorisation in place, as the parallel import licences in Sweden were withdrawn following the deregistration by AstraZeneca. However, the court held that the Commission had failed to establish to the requisite legal standard that the deregistration of the Losec capsule marketing authorisation was capable of excluding parallel imports of Losec capsules in Denmark and Norway. The court, therefore, reduced the fine imposed on AstraZeneca.

Court of Appeal – Person Skilled in the Art

Schlumberger Holdings Limited v Electromagnetic Geoservices AS [2010] EWCA Civ 819, 28 July 2010

The Court of Appeal has allowed an appeal from the High Court decision that patents for the use of an electromagnetic exploration technique (CSEM) in oil exploration were obvious. See the February 2009 Bulletin for the report of the High Court decision. An important issue in this case was whether, for the purpose of considering obviousness, the person(s) skilled in the art was a person (or team) with both exploration geophysics and CSEM skills.

The person skilled in the art is referred to three times in the EPC: in the Protocol to Article 69, Article 83 and Article 56. The first two are concerned with the position post-grant of the patent: Article 69 and its Protocol are concerned with the scope of the claims and Article 83 is concerned with sufficiency of description. Article 56 is about the position pre-patent. It is concerned with whether there is an inventive step.

English and EPO case laws are clear that the person skilled in the art might be a notional team of people having different skills. However, the point of law in issue here, ie whether the notional team had, by law, to be the same for all purposes, was not addressed in any existing case law.

Jacob LJ gave the judgment and said that, in at least some cases, the person skilled in the art for obviousness was not necessarily the same person skilled in the art for performing the invention once it was made.

"The art" was not necessarily the same both before and after the invention was made. The assumption might be correct in most cases, but some inventions were themselves art changing.

In this case, on the issue of obviousness, the idea of combining the skills of exploration geophysicists and experts in the electromagnetic technique was itself inventive.

The court also held that the judge had erred in principle in considering the effect of the secondary evidence of inventiveness.

Secondary evidence was generally only relevant when considering the question "if it was obvious, why was it not done before?" If the problem was shown to have been long standing and solved by the invention, secondary evidence could be important. If a useful development was, in hindsight, seemingly obvious for years and the apparently straightforward technical step from the prior art was not taken, then there was likely to have been an invention. Other types of secondary evidence, such as the commercial success of the patented product (particularly if it met a long-standing need) and the reaction of experts could also point to inventiveness.

European Commission – Monitoring of Patent Settlements

http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/887&format=HTML&aged=0&language=EN&guiLanguage=en

The European Commission has published its report on the monitoring of patent settlements in the pharmaceutical sector for the period July 2008 to December 2009. The number of patent settlements that were potentially problematic under competition law fell to 10% of total patent settlements in the sector compared with 22% for the period January 2000-June 2008. The amount of money involved in the settlements, between the "originator" pharmaceutical companies and producers of generic drugs has decreased from more than € 200 million to less than € 1 million in the more recent period.

The Commission says that the overall number of patent settlements shows that its heightened scrutiny of the sector has not hindered out-of-court settlement of litigation. It will continue monitoring the sector to make sure that the settlements in the sector are not delaying entry of generics in the market, nor contain other restrictions that would be problematic under EU competition law.

TRADE MARKS

ECJ – Google AdWords

Portakabin Ltd and another v Primakabin BV, Case C-558/08, 8 July 2010

The ECJ has responded to questions referred by the Dutch court concerning the use of third-party trade marks and variants of such marks as internet search keywords to advertise the resale of genuine trade marked goods.

The claimant, Portakabin Ltd, made and supplied mobile buildings. It owned a Benelux trade mark for PORTAKABIN in relation to metal and non-metal buildings, parts and building materials.

The defendant, Primakabin Ltd, sold and leased new and second-hand mobile buildings, including units made by Portakabin, which had originally been put on the market within the EEA with Portakabin's consent.

Primakabin chose the keywords "portakabin" and the misspellings "portacabin", "portokabin" and "portocabin" as Google Adwords. The sponsored advertisement shown in response to a user inputting any of these keywords was initially headed "new and used units" and was then subsequently changed to "used portakabins".

Portakabin commenced proceedings for trade mark infringement in the Dutch court which referred questions to the ECJ.

The ECJ held that the use of keywords did constitute use of a sign within the meaning of Article 5(1)(a) of the Trade Marks Directive, and that such use would be infringing unless it was made clear that the advertised goods or services did not emanate from the trade mark proprietor or any entity economically linked with it.

The court said that where this was not clear, Article 6(1) of the Directive (which permits the use of marks to indicate characteristics of the goods) would rarely provide a defence, although it was open to national courts to find that there was such a defence on the specific facts of a case.

In a case such as this involving the sale of second-hand but genuine trade marked goods, the defendant would be permitted to use the trade mark as a keyword by virtue of Article 7 of the Directive (the provision dealing with exhaustion of rights) unless the proprietor had a legitimate reasons to oppose the resale of its goods. The judgment gives guidance on specific circumstances in which such a legitimate reason might exist.

High Court – Threats Action

Best Buy Co Inc and another v Worldwide Sales Corp. Espana SL [2010] EWHC 1666 (Ch), Floyd J, 8 July 2010

The High Court has dismissed an action for unjustified threats of trade mark infringement proceedings concerning CTMs under section 21 of the Trade Marks Act 1994.

The court held that, viewed as a whole, the letter containing the threat complained of was in the context of a negotiating response to the claimant's proposal, and so attracted the protection of privilege.

This was the first time that a threats provision has been applied to a Community right.

The court ruled that section 21 referred to the threat of proceedings in the UK courts, and its extension to CTMs had no widening effect. The section was not concerned with the harmful effects of proceedings threatened in other jurisdictions.

High Court – Infringement And Passing Off

Specsavers International Healthcare Ltd and others v Asda Stores Ltd, [2010] EWHC 2035 (Ch), Mann J, 30 July 2010

The High Court has held that one of Asda's advertising slogans, known as straplines, infringed Specsavers' CTMs under Article 9(1)(c) of the CTM Regulation. The court rejected the other infringement claims and the claim for passing off.

In October 2009, the defendant, Asda Stores Ltd, began a marketing campaign to relaunch its optical business, using certain logos and straplines. The claimant, Specsavers International Healthcare Ltd, began proceedings for trade mark infringement under Articles 9(1)(b) and (c) of the CTM Regulation, and passing off.

Article 9(1)(b) provides for infringement where a sign identical or similar to the CTM is used on identical or similar goods or services, and there exists a likelihood of confusion on the part of the public, including a likelihood of association.

Article 9(1)(c) of the CTM Regulation provides for infringement in the situation where the sign is identical or similar to the CTM and is used in relation to goods or services which are not similar; where the CTM has a reputation in the Community; and where use of the sign, without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the CTM.

Specsavers relied on three marks with five community registrations:

Specsavers complained about Asda's use of two straplines: "Be a real spec saver at Asda" and "Spec saving at ASDA", and the following logo:

The court held that the strapline "Be a real spec saver at Asda" infringed under Article 9(1)(c) of the CTM Regulation because it took unfair advantage of the distinctive character or repute of the CTMs.

The court said that there had to be a link between the registered mark and the sign. It was sufficient if the mark was brought to mind, applying the ECJ's ruling in Intel Corp v CPM United Kingdom Ltd. Specsavers and its word mark were plainly called to mind in Asda's strapline.

In determining whether in doing so Asda was taking an unfair advantage, the court considered the ECJ guidance in L'Oréal SA & others v Bellure NV and others and the Court of Appeal judgment in Whirlpool Corporation and others v Kenwood Limited. The court rejected Asda's argument that this case should be distinguished from L'Oréal v Bellure as it concerned two well-known companies.

The court rejected Specsavers' other infringement claims and its claim for passing off, including its claim that Asda's logo infringed Specsavers' logo marks under Article 9(1)(b) of the CTM Regulation. The court found that although there was a degree of similarity in that both logos had ovals with text inside, the non-overlapping nature of Asda's ovals, with its well-known name on one, would not cause any confusion.

High Court – Exhaustion of Rights

Honda Motor Co Ltd and another v David Silver Spares Ltd, [2010] EWHC 1973 (CH), Mr G Leggatt QC, 28 July 2010

The High Court has rejected an application to strike out, or give summary judgment against the claimant, Honda. Honda had brought a trade mark infringement claim against David Silver Spares Ltd, claiming that their trade marks for HONDA had been infringed by David Silver which dealt in genuine Honda motorcycle spare parts that had been put on the market in the EEA without Honda's consent.

The court held that the burden was on the defendant to prove a defence of exhaustion of rights under Article 7(1) of the Trade Marks Directive, not on the claimant to plead and prove where goods were first put on the market for the purpose of determining whether the trade mark rights had been exhausted.

High Court – VODKAT Passing Off

Diageo North America Inc & another v Intercontinental Brands (ICB) Limited & others, [2010] EWCA Civ 920, 30 July 2010

The Court of Appeal has upheld the High Court's decision that the alcoholic drink VODKAT had been unlawfully passed off as vodka under the extended form of passing off. See the January 2010 Bulletin for the report of the High Court judgment.

Appointed Person – Class HeadingsIIn Trade Mark Applications

In the matter of trade mark application no 2528977 in the name of the Chartered Institute of Patent Attorneys, BL O-215-10, 27 May 2010

The Appointed Person has made a reference to the ECJ concerning the use of class headings in trade mark applications.

Communication No. 4/03 clarified OHIM's approach to the use of the general words of the Class Headings of the Nice Classification in trade mark applications and registrations.

The Communication stated that it was acceptable for the goods or services covered by an application or registration to be identified by means of wording which used 'the general indications or the whole class headings provided for in the Nice Classification'.

In addition, it confirmed that OHIM proceeds upon the basis of a rule that the use of the class headings constitutes a claim to all the goods or services within the relevant class.

CIPA applied to register the word mark IP TRANSLATOR for "education; providing of training; entertainment; sporting and cultural activities" in class 41. These are the general words of the Class Heading for Class 41.

The application was rejected by the IPO. The hearing officer said that, as the wording of the specification adopted the general words of the class heading for class 41, it should be interpreted according to Communication 4/03. Therefore, the application covered translation services in class 41. IP TRANSLATOR could not be registered for translation services under sections 3(1)(b) and (c) of the Trade Marks Act 1994 as it was descriptive, unless CIPA could demonstrate that it had acquired a distinctive character, which it could not.

CIPA appealed to the Appointed Person on the ground that its application did not specify or cover translation services in class 41.

In the reference, the Appointed Person asks if it is permissible to use the general words of the class headings of the Nice Classification for the purpose of identifying the various goods or services covered by a trade mark, and whether OHIM's approach (that the use of class headings constitutes a claim to all the goods or services within the relevant class) is correct.

COPYRIGHT

High Court – Software Directive Reference to ECJ

SAS Institute Inc v World Programming Ltd, [2010] EWHC 1829 (Ch), Arnold J, 23 July 2010

The High Court has made a reference to the ECJ concerning the interpretation of the Software Directive. The precise wording of the questions has not yet been finalised.

SAS Institute Inc, the claimant, alleged that the defendant had committed a number of infringements of copyright in the development of its alternative software. This was developed without access to the claimant's source code.

Article 1(2) of the Software Directive states that:

Article 5(3) states that:

The reference to the ECJ addresses the scope of copyright protection for computer software in the Software Directive, including whether programming languages, interfaces and functionality of software are excluded from protection under Article 1(2) of the Software Directive and the extent of the exclusion from infringement under Article 5(3).

Arnold J's preliminary ruling rejects many of the claimant's arguments: his view is that it is not an infringement of the copyright in a computer program to (among other things) replicate its functions without copying its source code or design. This is consistent with Pumfrey J's ruling in Navitaire Inc v Easyjet Airline Company and the Court of Appeal's decision in Nova Productions Ltd v Mazooma Games Ltd.

High Court – Assessment of Damages

Experience Hendrix LLC and another v Times Newspapers Ltd, [2010] EWHC 1986 (Ch), Sir William Blackburne, 30 July 2010

In this case, the High Court has assessed the damages payable for infringement of copyright and performers' rights in connection with an unauthorised release of recordings of a live concert.

The High Court has assessed the damages payable by Times Newspapers Limited (TNL) for infringing copyright in sound recordings of a 1969 Jimi Hendrix concert, and infringing performers' rights in the performances. TNL issued a CD containing a recording of songs performed at the concert (known in the industry as a "covermount") with The Sunday Times newspaper of 10 September 2006. TNL believed that they had obtained a licence of the relevant rights, but in February 2008 the High Court held that there was no evidence to support this.

The court held that the correct approach to assessing the claimants' damages due to the 12-months delay in releasing their own film, DVDs, CDs and merchandise, was the loss-sustained approach as opposed to the notional licence fee: the claimants were engaged in a joint venture to exploit the recordings and the performances which was suspended as a direct result of the distribution of TNL's covermounts.

The court said that the notional-licence approach would be difficult to apply since it would require the court to assess what would have been a reasonable licence fee to permit TNL to make and distribute a large number of CDs containing poor quality, illicitly obtained recordings which the claimants would never have permitted, not least because to do so would have upset their own project.

The court accepted that the claimants could recover losses both in the UK and abroad which were caused by TNL's infringement of their UK-protected assets. There was no authority which indicated that damages for infringement of copyright or of performers' rights were limited to damage suffered within the territorial jurisdiction of this court.

On the issue of quantum, the court said that the figures on offer by way of advances provided the only firm basis for assessing what independent third parties were willing to pay "up front" as an estimate of the profit which the claimants could expect to make from the distribution of the film, DVDs and CDs. The court found that the claimants had been deprived of the receipt of $5.8 million.

The court refused to award additional damages against TNL, finding, on the facts, that it had not been recklessly indifferent as to whether it was infringing the claimants' rights.

High Court - Modchips

Nintendo Company Ltd and another v Playables Ltd and another [2010] EWHC 1932 (CH), Floyd J, 28 July 2010

The High Court has granted Nintendo's application for summary judgment under sections 296 and 296ZD of the Copyright Designs and Patents Act 1988 in order to prevent the marketing of modchips, designed to avoid copy-protection measures.

The modchips fitted into the Nintendo DS cartridge slot and bypassed the security systems, allowing users to insert memory cards which could be loaded with pirated games downloaded from the internet.

The court rejected the defendants' argument that the modchips allowed users to play home-made games, ruling that the fact that the device could be used for a non-infringing purpose was not a defence.

SABIP – Copyright and Contract Law

SABIP, The relationship between copyright and contract law, 12 July 2010 http://www.sabip.org.uk/contractlaw-report.pdf

The Strategic Advisory Board for Intellectual Property Policy (SABIP) has published a report on the relationship between copyright and contract law.

DESIGNS

High Court – Registered Design Infringement

Dyson Limited v Vax Limited, [2010] EWHC 1923 (Pat), Arnold J, 29 July 2010

The court has found that Dyson's registered design for a two-stage dust-separation cyclonic vacuum cleaner (as an alternative to the use of porous bags) was not infringed by the Vax Ltd's vacuum cleaner.

Representations of the registered design and photographs of the defendant's vacuum cleaner can be seen in the appendices to the judgment at http://www.bailii.org/ew/cases/EWHC/Patents/2010/1923.html.

The Registered Designs Regulations 2001 (SI 2001/3949) amended the Registered Designs Act 1949 in order to implement the provisions of harmonising Designs Directive. The rules introduced a test for individual character in accordance with Article 5 of the Designs Directive which provides that:

The court said that the assessment of whether the design had individual character had to be based on whether the overall impression produced on the informed user differed from that produced on him by the existing design corpus, taking into account the nature of the product, the industrial sector to which it belonged and the degree of freedom of the designer in developing the design.

Dyson's registered design enjoyed very broad protection as it was a striking departure from the existing design corpus at the relevant time, and the designer had a high degree of design freedom.

However, the court said that although there were similarities between Dyson's design and Vax's cleaner, these would not be deemed significant by the informed user, and that there were differences which the informed user would consider significant. The registered design and the allegedly infringing cleaner gave different overall impressions so that there was no infringement.

GENERAL

SABIP – Dissolution

BIS press release http://nds.coi.gov.uk/content/Detail.aspx?ReleaseID=414492&NewsAreaID=2
SABIP press release, 19 July 2010 http://www.sabip.org.uk/home/press/press-release/press-release-20100719.htm

The Department for Business, Innovation and Skills has announced that the Strategic Advisory Board for Intellectual Property Policy (SABIP), will close within the next year. SABIP was created in 2008 to advise the government, including the IPO, on the development of intellectual property policy following a recommendation in the Gowers Review. SABIP's functions will be transferred to the IPO.

IPO – Crime Report

Annual IP Crime Report 2009/10; http://www.ipo.gov.uk/ipcreport09.pdf
IPO press release, 29 July 2010; http://www.ipo.gov.uk/about/press/pressrelease/press-release-2010/press-release-20100729.htm

The IPO has published its annual IP crime report of the IP Crime Group for 2009/10.

CASES FROM JUNE 2010

KEY CASES AND DEVELOPMENTS

• KCI Licensing Inc and others v Smith & Nephew PLC, High Court-claim to priority and contributory infringement. The High Court has upheld the validity of two improvement patents based on a patent previously held to be invalid. The court also held that the patents were entitled to their priority dates and found there to be contributory infringement.
• Ofcom - draft code on ISPs' initial obligations under Digital Economy Act. Ofcom has published a consultation document on a draft code of practice relating to the initial obligations to reduce online copyright infringement imposed on ISPs by the Digital Economy Act 2010.

PATENTS

High Court - Claim To Priority And Contributory Infringement

KCI Licensing Inc and others v Smith & Nephew PLC [2010], EWHC 1487 (Pat), Arnold J, 23 June 2010

The High Court has upheld the validity of two improvement patents based on a patent previously held to be invalid. The patents related to a method of healing major wounds by use of a special dressing which sealed the wound and applied a partial vacuum. The court also held that the patents were entitled to their priority dates and found there to be contributory infringement.

Section 7 of the Patents Act deals with the right to apply for and obtain a patent and provides:

The patents were held to be entitled to a priority claim as the individual US inventor, named as the applicant in the priority application, had signed a confidentiality agreement which contained a clause assigning future inventions to his employer, the owner of the patents. The express assignment of the invention to the employer at the time of the filing of the patent application had been mislaid. The court said that the effect of section 7(2)(b) of the Patents Act 1977 in conjunction with this clause in the confidentiality agreement was to assign legal title to the employer.

The court also held that a single priority applicant could agree to share its rights to the invention with another person, so if both were named as applicants in a later application they were both entitled to priority.

Contributory infringement is dealt with in s.60(2) Patents Act 1977, which states:

The court found that there was contributory infringement on the basis that the required intention "to put the invention into effect" was that of the person supplied rather than the supplier. This is because section 60(2) makes it clear that there can be infringement not only if the supplier knew that the means were intended to put the invention into effect, but also if it is obvious to a reasonable person in the circumstances. That is consistent with the relevant intention being that of the person supplied.

Court of Appeal – Questions Concerning SPC Referred to ECJ

Re: Medeva's SPC applications [2010] EWCA Civ 700, 23 June 2010

The Court of Appeal has referred four questions to the ECJ concerning the interpretation of Article 3 of the Supplementary Protection Certificate Regulation (469/2009/EC).

Article 3 states that:

A "product" means the active ingredient or combination of active ingredients of a medicinal product (Article 1(b), SPC Regulation). A "medicinal product" means "any substance or combination of substances presented for treating or preventing disease ..." (Article 1(a), SPC Regulation).

The questions referred concern the situation where vaccines are marketed in combination doses, so that the marketed product comprises more than the subject matter of the basic patent.

In this case, Medeva, the patentee, owned a patent for a method of making whooping-cough vaccine. This was not marketed as a single vaccine but in combination with other vaccines against various childhood diseases. Medeva had obtained five different marketing authorisations for these combinations and made five applications for SPCs.

The IPO held that the product which was the subject of four of the applications was not "protected" by the patent within the meaning of Article 3(a). Regarding the fifth application, the IPO decided that the marketing authorisation was not valid as required by Article 3(b).

Medeva appealed on the ground that the IPO had wrongly construed the meaning of a "product protected by a basic patent" in Article 3(a), and argued that this should extend to any product which could be subject to successful proceedings for infringement of the patent. Kitchin J dismissed Medeva's appeal but gave Medeva permission to appeal.

The Court of Appeal decided to refer four questions to the ECJ for clarification because the only ECJ case on the interpretation of Article 3 of the SPC Regulation is Farmitalia Carlo Erba SRL's SPC Application in which it is not clear whether either the Advocate General or the court had in mind the particular issue in this case, ie whether the SPC should extend to any product which could itself be the subject of infringement proceedings because it contained the antigen or antigens protected by the patent.

There have been three UK cases which deal with the issue of applying the SPC regulation to mixed products: Takeda, Gilead and Astellas.

In Takeda, Jacob J decided that the issues concerning Article 3(a) were clear because of a Swedish decision. However, this may not now be the position in Norway or Germany. In both Gilead and Astellas, the court considered that at least some of the issues which arose on this appeal were not clear.

Court of Appeal – Claim Construction

Occlutech GmbH v AGA Medical Corporation and another [2010] EWCA Civ 702, 22 June 2010

The Court of Appeal has upheld a High Court decision that the claims of the patent in suit for a medical device were not infringed by the claimant's device.

The court agreed with the construction of the High Court that the claims required clamps at either end of the device.

The judgment includes discussion on the fact that a German appeal court had reached the opposite conclusion in construing the same claims. The judgment compares the German approach to claim construction and equivalents to that of the House of Lords.

IPO – Database of Green Inventions

IPO press release, 4 June 2010

A new database of green inventions to help the development of environmentally-friendly technology has been launched by the IPO.

TRADE MARKS

ECJ – Meaning of "Bad Faith" in .eu Implementing Regulation

Internetportal und Marketing GmbH v Richard Schlicht, Case C-569/08, 3 June 2010

In this reference from the Austrian court, the ECJ has ruled on the provisions of Commission Regulation (EC) No 874/2004 on the implementation of the .eu top-level domain regime, which were designed to counter "domain name grabbing" during the early (sunrise) phase of registration when preference is given to trade mark owners.

The claimant, Internetportal und Marketing GmbH (IMG), an Austrian company, applied to register German generic terms as Swedish trade marks. Each mark included an ampersand ("&") before and after each letter. One of these registrations was for the word "&R&E&I&F&E&N&" in class 9 for safety belts.

IMG then subsequently registered the domain name www.reifen.eu on the basis of this Swedish trade mark by eliminating the special character "&" pursuant to Article 11 of the Implementing Regulation which provides that:

IMG had applied to register 180 domain names consisting of generic terms.

The word 'Reifen' means 'tyres' in German, and the objective of IMG in having the domain name 'www.reifen.eu' registered was to operate an internet portal for trading in tyres. However, in view of the proceedings, it had not yet taken any significant preparatory steps in the construction of that portal.

The defendant, who contested the registration by IMG of the domain name 'www.reifen.eu', was the proprietor of the Benelux registered word mark REIFEN for bleaching preparations for laundry use and window cleaning preparations in classes 3 and 35 respectively. Subsequently, the defendant also applied to register REIFEN as a CTM in the same two classes. The spelling was based on the first three letters of the German words 'Reinigung' (cleaning) and 'Fenster' (window).

Article 21 deals with speculative and abusive registrations, and Article 21(3) sets out how bad faith may be demonstrated. The court held that, in considering whether a trade mark that was the basis for an application for a .eu domain name had been registered in bad faith, the national court is not restricted to considering the circumstances set out in Article 21(3). The issue of whether an applicant was acting in bad faith had to be the subject of an overall assessment, taking into account all the relevant factors relevant, in particular, the conditions under which registration of the trade mark was obtained and those under which the .eu top level domain name was registered.

ECJ – Exhaustion of Rights

Coty Prestige Lancaster Group GmbH v Simex Trading AG, Case C 127/09, 3 June 2010

The ECJ has held that that there was not exhaustion of trade mark rights by making perfume testers available to distributors.

The perfume testers were made available to distributors through a selective distribution system who were referred to as "authorised specialist dealers". They were contractually bound to the trade mark proprietor. The testers were clearly distinguishable, bearing the word "Demonstration" and the statement "Not for Sale". There was no transfer of ownership in the perfume testers.

Under Article 7(1) of the Trade Marks Directive, a trade mark owner may not prohibit use of their trade mark in relation to goods which have been put on the market in the EEA under that mark by the trade mark owner or with their consent.

The court held that making available perfume testers could not, in the absence of evidence to the contrary, be deemed to amount to implied consent to putting the testers on the market under Article 7(1).

ECJ – Name Mark

Barbara Becker v (1) Harman International Industries, Inc. (2) OHIM, Case C-51/09 P, 24 June 2010

The ECJ has followed the opinion of the Advocate General (see March 2010 Bulletin) and has set aside a decision of the EU General Court which found a likelihood of confusion between the marks BECKER and BARBARA BECKER.

The ECJ said that the EU General Court had applied the case law too rigidly without taking into account the specific facts of the case, such as the common nature of the name BECKER and the well-known personality involved, Barbara Becker, who is famous in Germany as the former wife of Boris Becker. This approach would mean that any earlier mark consisting of a surname could automatically be relied on to oppose any later mark consisting of that name combined with a forename, without there being a proper global assessment of similarity.

High Court – Passing Off of Henry Vacuum Cleaner

Numatic International Ltd v Qualtex UK Ltd, [2010] EWHC 1237 (Ch), Floyd J, 28 May 2010

In a quia timet passing off action, the High Court has found that the defendant, Qualtex UK, threatened to place a product on the market with an appearance and get-up which would deceive purchasers into thinking it was a well-known Henry vacuum cleaner belonging to the claimant, Numatic.

The Henry vacuum cleaner, shown on the right below, had a tub-type construction with a domed black lid resembling a bowler hat, a red body and a printed smiling face. The nose was the hole where the hose connected to the side of the tub, giving the appearance of an elephant's trunk. The model at issue here was a commercial cleaner which also had a flange or skirt around the base and was taller than the domestic Henry vacuum cleaner.

The Qualtex prototype, shown on the left below, was similar to the Henry vacuum cleaner except that it did not have a brand name or smiling face, and used a different colour.

The High Court found that there was a real likelihood that some members of the public would buy the Qualtex prototype and believe that it was a Henry vacuum cleaner. This case did not simply concern the shape of a functional article: the shape had a secondary meaning as the Henry vacuum cleaner was seen by the public as having the appearance of a small person.

The omission of the face and the name was not sufficient to avoid passing off because the public recognised the overall shape including the black bowler hat shaped lid as indicia of a genuine Henry vacuum cleaner. Nor was the branding "Quick Clean Equipment" used by Qualtex sufficient to avoid passing off because a significant proportion of members of the public did not know that it was Numatic who manufactured the Henry vacuum cleaner, and the Qualtex product was likely to be displayed in some retailers without the branding applied as the labels were loose in the packaging.

High Court – Co-Existence Agreement

Omega Engineering Incorporated v Omega SA (Omega AG) (Omega Ltd) [2010] EWHC 1211 (Ch), Arnold J, 28 May 2010

The High Court has dismissed an appeal by Omega SA from the IPO's rejection of its opposition to the registration of OMEGA by Omega Engineering, and allowed a summary judgment application by Omega Engineering in an action for breach of contract of a coexistence agreement between the parties.

Omega SA was a Swiss watch manufacturer and Omega Engineering Inc manufactured products for the measurement and control of temperature. The parties entered into a coexistence agreement in 1984 which applied to the UK only. Under clause 5, Omega SA agreed not to object to the use or registration by Omega Engineering of OMEGA for:

"Instruments and apparatus intended for a scientific or industrial application in measuring, signalling, checking, displaying or recording heat or temperature (including such having provision to record heat or temperature over a period of time and/or to display the time of day)" or a form of wording acceptable to the British Registrar of Trade Marks and stated by him to have the same meaning as the above wording".

Omega Engineering applied to register OMEGA in class 9 and 14 which was opposed by Omega SA. The opposition was subsequently limited to class 14 and the class 9 application proceeded to registration. The application in class 14 was for:

"Instruments and apparatus intended for a scientific or industrial application in measuring, signalling, checking, displaying or recording heat or temperature and having provision to display the time of day".

The hearing officer dismissed the opposition, finding that Omega SA has consented to the application under TMA 1994 s.5(5) due to the co-existence agreement. The hearing officer did not accept Omega SA's argument that, under the agreement, it had consented to Omega Engineering using OMEGA for goods in class 9 and not for exactly the same goods in class 14.

Omega Engineering issued separate proceedings for breach of contract, arguing that Omega SA's opposition was in breach of the co-existence agreement.

The court agreed with the hearing officer's construction of the co-existence agreement that it was not limited to goods in class 9. The court rejected Omega SA's defences based on estoppel, variation and acquiescence, and also its argument that TMA 1994 s.5(5) had been impliedly repealed when the Trade Marks (Relative Grounds) Order 2007 (SI 2007/1976) came into force.

OHIM - Figurative and 3-D Marks

Pi-Design AG v Yoshida Metal Industry Co Ltd, Case R 1235/2008-1, 20 May 2010

An OHIM Board of Appeal has found that the mark used on the handle of knives was figurative rather than three-dimensional, but still invalid under Article 7(1)(e)(ii) of the CTM Regulation.

Yoshida Metal Industry was the proprietor of the following CTM for knives and other cutlery in class 8 and household utensils in class 21. When applying for the CTM, Yoshida indicated that it was a figurative mark.

Pi-Design AG applied to invalidate the CTM on the ground that it consisted of a shape that was necessary to obtain a technical result and so was invalid under Article 7(1)(e)(ii) of the CTM Regulation: the dots represented dents which had a function, which was to prevent the knife handle from slipping.

Yoshida argued that the CTM was not a three-dimensional shape (representing dents), but a two-dimensional figurative mark (representing dots), which was therefore unable to obtain any technical result.

The OHIM Board of Appeal held the mark to be invalid. On the basis of Yoshida's own statements and documents, It concluded that it was a figurative mark consisting of the two-dimensional representation of the handle. However, the classification of a mark as "figurative" did not necessarily rule out the applicability of Article 7(1)(e). The board concluded that the dents in the CTM were necessary to obtain a technical result, and that the cancellation division had been wrong not to have considered Yoshida's patents as an aid to understanding the technical features.

COPYRIGHT

Ofcom - Draft Code on ISPs' Initial Obligations Under Digital Economy Act

Ofcom press release, http://www.ofcom.org.uk/media/news/2010/05/nr_20100528

Online infringement of copyright and the Digital Economy Act 2010, Draft Initial Obligations Code, 28 May 2010, http://www.ofcom.org.uk/consult/condocs/copyright-infringement/condoc.pdf

Ofcom has published a consultation document on a draft code of practice relating to the initial obligations to reduce online copyright infringement imposed on ISPs by the Digital Economy Act 2010.

The Digital Economy Act 2010 requires ISPs to notify their subscribers if their internet protocol (IP) addresses are reported by copyright owners, in a copyright infringement report (CIR), as being used to infringe copyright. Section 3 of the draft code sets out a minimum level of information which will need to be included in a CIR which is intended to match the standard of evidence in civil proceedings for copyright infringement. The draft code also sets out a requirement that the copyright owner (or agent acting on its behalf) provide a "quality assurance report" in order to ensure that the underlying evidence gathering is robust and accurate.

The Act also requires ISPs to provide copyright owners with copyright infringement lists (CIL), on an anonymous basis, about subscribers to whom the number of CIRs has exceeded a certain threshold. A copyright owner could apply to the courts for a Norwich Pharmacal order to obtain the names and addresses of those subscribers on the list.

The draft code proposes that notifications be sent to subscribers on receipt of the first CIR, on receipt of a second CIR a month or more later, and on receipt of a third CIR received a month or more after the second. A subscriber would be included in a CIL if they receive three notifications within a year, and the copyright owner requesting the CIL has sent at least one CIR relating to that subscriber within that year.

The draft code also deals with subscriber appeals, administration, information collection, enforcement and dispute resolution.

Ofcom proposes that the draft code will initially cover only fixed-line ISPs with over 400,000 subscribers, that is, the seven largest ISPs: BT, Talk Talk, Virgin Media, Sky, Orange, O2 and the Post Office. It will review the level of copyright infringement on mobile networks and will, if necessary, require mobile operators to participate in the code. It will also review the qualification criteria for ISPs if online copyright infringers migrate to ISPs which are outside the code.

A copy of the draft code, consultation questions, and draft illustrative notifications to subscribers are annexed to the consultation document. The closing date for responses is 30 July 2010.

This consultation is the first in a series of three to be issued this year relating to matters covered in the Digital Economy Act. Ofcom will also issue consultations on the enforcement of the code and the handling of industry disputes (July 2010), and costs sharing (September 2010).

GENERAL

Emergency Budget – Relevance to IP Matters

HM Treasury: June 2010 Budget: Chapter 2, Table 2.4

Measures of relevance to IP in the emergency budget are:

• The introduction of legislation to correct an unintended anomaly affecting the amount of film tax relief for British films that may be claimed where films are produced over more than one accounting period.
• The abolition of the IP ownership condition currently required for SMEs to qualify for enhanced tax relief for R&D expenditure.
• The dropping of a tax relief for the UK video-games industry which had been announced in the March 2010 Budget.
• HMRC is to be given the power to amend the rules on when and how individuals and persons other than UK resident companies must report and pay income tax withheld from patent royalties.

The government has also said that it intends to consult with business to review the taxation of IP, the support that R&D tax credits provide for innovation, and the proposals in the Dyson Review which recommended that tax relief for companies investing in R&D should be refocused on small, high-tech firms to "stimulate a new wave of technology".

WIPO Online Resource

WIPO press release, 2 June 2010

WIPO has launched WIPO GOLD, a free, on-line global intellectual property (IP) reference resource that is intended to provide quick and easy access to a broad collection of searchable IP data and tools relating to, for example, technology, brands, designs, statistics, WIPO standards, IP classification systems and IP laws and treaties.

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.