Intellectual Property Case Law

Transcription

1 Intellectual Property Case Law One Page Summaries eapdlaw.com

2 Real Intellectual Property Case Law At Edwards Angell Palmer & Dodge we know time is precious. We also know how important it is for you to be able to keep your eyes on the road before you. We believe that knowledge is power, and knowing about the lessons others have learned is a great way to avoid speed bumps. That is why we ve developed our Real Intellectual Property Case Law Guide, a handy little tool to fill you in on some of the most significant cases tried to date. So go ahead, keep your eyes on the road before you, we ll be on the lookout for anything that could get in your way. Get Real... Real Lessons. Real IP Case Law.

3 Contents Search Engine Keywords: Brand Owners Need to Monitor Use of Their Trade Marks By Third Parties Within Google s AdWords Programme 4 CTM Applications in Bad Faith: What was the Applicant s Intention? 6 Genuine Use of a Mark: Brand Owners Need to Be Aware that Freebies Cannot Prevent Revocation for Non-use 8 Trade Mark Infringement in the UK: Brand Owners Need to Think Twice Before Applying for Interlocutory Injunctions. 10 Shapes of Products Need to Be Distinctive to Be Enforceable 12 Brand Protection: Even Use of a Distinctive Logo Alongside a Word Element May Not Be Sufficient to Avoid a Likelihood of Confusion with a Word Mark that is Similar to that Word Element 14 Trade Marks With a Reputation: Brand Owners Should Determine Whether Community Trade Marks or National Marks are Better Suited to their EU Business 16 Look-a-likes: The ECJ Finds That an Imitation of a Branded Product Can Take Unfair Advantage of That Brand and Be Unlawful 18 Own Name Defence : Available to Companies As Well As Individuals 20 Aura, Allure and Prestige: Luxury Brands Can Object to Resale of Their Goods in Discount Stores 22 Customs: International Registrations Designating the EU Can Be Recorded with EU Customs Authorities 24 Customs: Brand Owners Cannot Rely on EU Customs Authorities to Seize Counterfeit Goods that are In transit to Non-EU Countries 26 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

4 Copyright: Media Monitoring Services Will Likely Need Consent of Copyright Owners Even if Only a Short Extract of a Copyrighted Article is Reproduced 28 Copyright: The Passage of Time Does Not Preclude an Infringement Claim 30 The Following Two Cases Reaffirm That the Courts Will Grant Legal Costs on the Basis of the Issues Rather Than the Overall Win 32 A Deduction of the Defendant s Costs Was Warranted But the Case Was Not So Exceptional That the Defendant Should Pay the Claimant s Costs 34 Importance of Clear and Concise Drafting and Principles of Construction of Documents 36 Stay of UK Revocation Proceedings Refused 38 Revocation of Patents 40 European Patent Office (EPO) Procedure 42 Supplementary Protection Certificate s 46 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

5 Search Engine Keywords: Brand Owners Need to Monitor Use of Their Trade Marks By Third Parties Within Google s AdWords Programme Google France, Google Inc. v Louis Vuitton Malletier and Others, European Court of Justice, Cases C-236/08, C-237/08 and C-238/08 Google s controversial policy of renting other businesses trade marks as keywords received support from Advocate General Maduro in his opinion of 22 September 2009 for the European Court of Justice (the ECJ). Brand owners need to ensure that they monitor Google and other search engines to ascertain who is using their trade marks. For now, brand owners will need to focus their enforcement on each advertiser rather than on Google. Businesses increasingly rely on the Internet to promote and sell their goods and services. For many businesses, a high ranking on Internet search engine results is vital in directing Internet users to the businesses websites. Google, unlike operators of other leading search engines, has sought to exploit uncertainties in trade mark law and will rent third party trade marks as keywords to the highest bidder. Google refers to this programme as AdWords. In proceedings against Google, the French Courts referred a number of questions to the ECJ, notably: can a trade mark owner rely on trade mark law to prevent Google renting its trade mark as a keyword? Will Renting a Trade Mark As a Keyword Infringe the Trade Mark? Trade mark owners argued that use of a trade mark as a keyword was use of the sign... in advertising under 4 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

6 Article 5(3) of the Trade Marks Directive. The AG disagrees, stating that Article 5(3) is intended to cover the more traditional occurrence of the trade mark being used in the ad itself. The AG also found that, in permitting advertisers to select a trade mark as a keyword, no goods or services are offered to the public under that trade mark. The AG therefore concludes that AdWords is not identical or similar to any of the goods or services covered by the trade marks and that AdWords does not therefore constitute trade mark infringement. What About Selection of the Keyword By the Advertiser? As for the advertiser who selects the keyword, the AG concludes that this is not use in the course of trade : the advertiser is the end customer of Google s AdWords service and that selection of the keyword is not a commercial activity, but a private use of their part. Comment The AG concludes that it is important not to allow the legitimate purpose of preventing certain trade mark infringements to lead all trade mark uses to be prohibited in the context of cyberspace. This assessment appears to have influenced the AG in developing his opinion. Brand owners will be disappointed by this opinion. Should the ECJ follow the AG s opinion, other search engine providers will undoubtedly follow Google s lead and offer trade marks as keywords to the highest bidder. This will place further burden on those seeking to protect and enforce their trade marks. Brand owners will need to be vigilant in monitoring search engines to ensure, where possible, that searches against their trade marks do not provide sponsored links to illegitimate websites. However, any action taken by the trade mark owner will be limited to action against the website, not against the search engine. We await the ECJ s decision and further developments with interest. 5 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

7 CTM Applications in Bad Faith: What was the Applicant s Intention? Chocoladefabriken Lindt & Sprüngli AG v Franz Hauswirth GmbH, European Court of Justice, Case 529/07 In the absence of any relevant legislation, the ECJ has recently given guidance on the circumstances where a Community Trade Marks (CTM) application can be refused on the grounds of having been made in bad faith. Factors to be considered include the intention of the applicant to prevent a third party from legitimately marketing a product. Given that bad faith is a subjective state, it will continue to be difficult to prove. Background Chocolate makers Lindt and Hauswirth have been producing and marketing Easter bunnies for over 40 years. In 2000, Lindt registered as a CTM the representation of the bunny shown. Following registration, Lindt issued infringement proceedings against Hauswirth in Austria in order to restrain the sale of the bunny depicted to the left. Hauswirth counterclaimed that the registration had been made in bad faith. The matter reached the Austrian Supreme Court, which sought a preliminary determination from the ECJ. Factors to be Taken into Account The fact that an applicant knows that a third party has been using an identical or similar trade mark was held not to be sufficient for the establishment of bad faith. The applicant s intention at the time of filing should also be taken into account. In the Court s view, the intention of the applicant to prevent a third party from legitimately marketing a product could in certain circumstances constitute an 6 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

8 element of bad faith, particularly if the sole objective of the applicant is to prevent a third party from entering the market. Another aspect examined by the Court was where the Applicant s competitor had used a similar trade mark for some time such that the trade mark enjoyed some degree of legal protection. An application under these circumstances could point to bad faith. The CTM application, however, could be pursued legitimately where a newcomer in the market was trying to take advantage of that trade mark. According to the ECJ, the nature of the mark applied for may also be relevant to the determination of bad faith. Thus, if a mark consists of the shape of a product, an applicant might be acting in bad faith when his competitors freedom of choice is restricted by technical or commercial factors, so that he is able to prevent them not merely from using a similar mark, but also from marketing comparable products. Finally, consideration may be given to the extent of the reputation enjoyed by a trade mark at the time of filing, as it might justify the applicant s interest in ensuring a wider legal protection for his trade mark. Comment Bad faith is a subjective state, difficult to define. According to the Advocate General s words, It is likely, indeed, that bad faith cannot be defined at all in the sense of determining its precise limits. The Court of Justice gives useful guidance and it does illuminate some aspects of the test for the determination of bad faith. Factors include knowledge and intention of the applicant, as well as the reputation of the earlier mark, the establishment of which the brand owners should invest on. How this preliminary ruling will be applied by the national court remains to be seen. In cases like this, however, queries arise as to whether the mark should have been registered in the first place, given the monopoly obtained in the shape of a product with limited availability. 7 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

9 Genuine Use of a Mark: Brand Owners Need to Be Aware that Freebies Cannot Prevent Revocation for Non-use Silberquelle GmbH v Maselli Strickmode GmbH, European Court of Justice, Case C-495/07 The concept of genuine use of a trade mark was addressed by the ECJ in its decision of 15 January The Court ruled that where a proprietor of a trade mark uses that mark in connection with merchandise which it gives away, free of charge, to purchasers of its goods, it does not make genuine use of that mark in respect of those items. Brand owners often register their trade marks also in relation to goods and services which are not directly related to their respective businesses. This is usually done in order to broaden the scope of protection of their marks beyond their actual commercial interest (eg defensive filings), and/or to cover a promotional use of their brands in respect of merchandising items which, as in this case, may be given away free of charge to customers or potential customers. Trade mark owners will be aware that if they do not put their trade mark to genuine use for five successive years in connection with the goods or services covered, the trade mark shall be liable to revocation. The Case Maselli-Strickmode Gmbh (Maselli), a manufacturer of clothing, registered the WELLNESS mark in Austria for clothing and alcohol-free drinks. Maselli used its mark for an alcohol-free drink which was given away, free of charge, as a promotional gift to the purchasers of its clothing. Silburquelle Gmbh (Silburquelle), which sells alcohol-free drinks, sought to revoke Maselli s WELLNESS mark on the grounds of non-use. 8 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

10 Does Promotional Use of a Mark (Free of Charge) Constitute Genuine Use? In the course of the revocation proceedings, the Austrian Court asked the ECJ to determine whether affixing a trade mark to items that are given away to customers free of charge, amounts to genuine use of that mark in respect of those items. No, Says the ECJ The ECJ held that such a promotional use of a trade mark does not constitute genuine use in respect of those promotional items. According to the ECJ, the concept of genuine use must be understood to denote actual use, consistent with the essential function of a trade mark which is to guarantee the identity of the origin of goods or services to the consumer or end user. The ECJ concluded that given that promotional items were not distributed with the aim of creating or preserving the market for goods in the same class, affixing the mark to those items was not consistent with the essential function of a trade mark; it was not a genuine use. Comment In the light of this decision, trade mark proprietors should bear in mind that if they own a trade mark registration which is older than five years and covers classes of goods for which that mark has been used exclusively to promote, free of charge, goods or services in other classes, the trade mark is likely to be vulnerable to be revoked on the grounds of non-use for those goods. 9 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

11 Trade Mark Infringement in the UK: Brand Owners Need to Think Twice Before Applying for Interlocutory Injunctions. Nude Brands Ltd v Stella McCartney Ltd and Others, High Court (Ch. Div.) Case No: HC 09 C02715 Interlocutory injunctions will generally only be given in the UK if irreparable harm would be caused if no injunction is awarded and if the balance of convenience favours the Claimant. The balance of convenience was further explained and then applied by Mr Justice Floyd of the High Court in London in his decision of 20 August Brand owners who wish to obtain an interim injunction to restrain a trade mark infringement need to be aware that it is not easy to obtain such an order: actual confusion in the market place must be proved, and the court will apply the balance of convenience test. Interim injunctions allow brand owners to block ongoing or imminent trade mark infringements in a very short time frame. Waiting for a decision at trial may sometimes cause irreparable harm to brand owners and their brands. Nude Brands Limited (NBL), owner of the NUDE mark for cosmetics, applied for an injunction to block the launch of the STELLANUDE fragrance by Stella McCartney Limited (SML), claiming infringement on its NUDE mark. The ruling was given only few a days before the expected launch of the new perfume on the UK market. The Request for Consent Before the action was issued, SML had asked for NBL s consent to use the STELLANUDE brand. It was claimed that the letter containing SML s request for consent 10 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

12 never reached the relevant persons at NBL, and therefore no answer was given to SML. Silence was regarded as implied consent, and SML decided to go ahead with the new brand and invested millions of pounds in preparation of its launch. It seems therefore that if such consent had been expressly refused by NBL or SML had adopted a more cautious approach before hugely investing in the STELLANUDE brand, this (ongoing) dispute could have been avoided. The Decision As usual with respect to applications for interlocutory injunctions, the High Court applied the balance of convenience (or balance of injustice ) test. It was considered in the ruling that if NBL s request was accepted, the 2009 launch of the new fragrance would have to be cancelled, most likely permanently, and this would cost SML many millions of pounds in lost investment and would bring an incalculable loss to the goodwill and reputation of SML in the industry, with the media and in the minds of consumers. Mr Justice Floyd concluded that The likely damage to SML if an injunction is wrongly granted outweighs the damage to NBL if it is refused. He added that the effect of an injunction wrongly granted against SML would be to cause a massive disruption to their business, and probably cause them to abandon use of the brand altogether. The High Court also held that in order to obtain an injunction there must be actual confusion in the market place. Mr Justice Floyd ruled that damage to NBL and its brand was likely to be minimal. The risk of confusion between NBL s products and SML s is, in my provisional view, small, he held. The evidence does not show any real basis for supposing that a customer would be led into thinking that some form of association had been created between NBL and SML, he added. Comment Interim injunctions are not easy to obtain. Brand owners need to carefully consider the principles of the balance of convenience and whether there exists actual confusion in the market place on the part of the relevant public before bringing such an action before the High Court. It may make more sense to pursue a trial on the merits within as short a time period as possible. In addition, before investing significant sums in a new brand, brand owners should ensure that their requests for consent to the owner of a prior mark are acknowledged. Silence should never be considered as an implied consent. The decision at the trial on the merits (expected in 2010) is much awaited with interest. 11 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

13 Shapes of Products Need to Be Distinctive to Be Enforceable Whirlpool Corporation & Others v Kenwood Ltd [2009] EWCA Civ 753 Whirlpool failed in its appeal to overturn the High Court decision rejecting its claims of trade mark infringement and passing off in its KitchenAid mixer against Kenwood for its kmix blender. The decision clearly defines the acceptable limits to which three-dimensional trade marks can be enforced. Brand owners who seek to protect and enforce the shape of their products as trade marks will need to ensure these are as distinctive as possible in order to succeed. Whirlpool s claim was based on the shape of its mixer, which was protected as the registered trade mark KitchenAid & Device. The decision stated that (i) although the mixers were similar enough for each to remind people of the other, there was not a likelihood of confusion as to trade origin, and (ii) while one product called the other to the mind of the average consumer, this was not enough to establish a detriment to the distinctive character or repute of Whirlpool s registered trade mark. In its appeal, Whirlpool contended that the High Court made two errors of law: one, that the judge s reference to article 7(1)(e) was a misdirection, and two, that the judge applied a different test for infringement in respect of product shapes. Was the Judge s Reference to Article 7(1)(e) a Misdirection? Article 7(1)(e) of the Community Trade Mark Regulation prohibits registration of trade marks which consist exclusively of the shape of goods which results from the nature of the goods themselves. The judge referred to this article as part of a global assessment, but did not apply the article in his findings. 12 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

14 The Court determined that the judge was correct to make reference to this article without applying it to the present case. Specifically, the Court noted that the nature of Whirlpool s mark and Kenwood s sign, and the nature of the similarity was relevant, and therefore it was appropriate to note that the mark and sign consisted of the shape of the product itself. Did the Judge Apply a Different Test For Infringement in Respect of Product Shapes? The judge stated that it would be excessive, in the realm of product shapes, to apply the concepts of free riding, blurring, tarnishment or dilution more generally so as to hold that the bodywork of the kmix was too close to the bodywork of the Artisan for the purposes of Article 9(1)(c). The Court determined that use of the phrase more generally simply meant that the relevant concepts cannot properly be applied so generally as to find the shape of the Kenwood mixer infringed Whirlpool s trade mark registration for the shape of its KitchenAid mixer. Comment The Court determined that the introduction of a rival product could affect market share by fair and lawful competition without infringing any trade mark rights. Further, it held that Kenwood had not sought to ride on the coat-tails of Whirlpool so as to save itself from making promotional efforts for its new mixer. Although Kenwood s mixer would remind consumers of Whirlpool s mixer, this was not sufficient to take unfair advantage. This decision emphasises the difficulty of enforcing rights in the shape of products, even when they are protected as registered trade marks. Accordingly, the shape must be sufficiently distinctive, and the conduct of the newcomer be seen to take unfair advantage, in order for a brand owner to prevail under these claims. 13 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

15 Brand Protection: Even Use of a Distinctive Logo Alongside a Word Element May Not Be Sufficient to Avoid a Likelihood of Confusion with a Word Mark that is Similar to that Word Element Sun Microsystems Inc. v Sunplus Technology Co Ltd, European Court of Justice, Case C-21/08 The ECJ has confirmed that there can be a high level of similarity between a word mark and a word & figurative mark notwithstanding the visual differences between them, especially if the goods and/or services of the marks are similar and/or identical. The ECJ found that there was a likelihood of confusion between the word mark SUN and the figurative mark SUNPLUS (as shown above) since the goods in question were closely similar. Background The Taiwanese company, Sunplus Technology Co Ltd, applied for CTM registration of the figurative mark SUNPLUS, as set out above, in Class 9. Sun Microsystems Inc. filed an opposition against all of the goods covered by the application. Sun Microsystems relied upon, among other registrations, its earlier Benelux trade mark registration for the word mark SUN in Class 9. Findings of the ECJ OHIM s Board of Appeal found in Sun Microsystems favour, refusing the application. Sunplus appealed to the European Court of First Instance (the CFI), who upheld the decision of the OHIM s Board of Appeal ruling that there was a likelihood of confusion between 14 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

16 SUN (word mark) and the figurative mark SUNPLUS (shown above). The CFI held that, due to the very high degree of similarity between the goods covered by the respective marks and their phonetic and conceptual similarity, confusion would exist among the relevant public. Notably, these similarities were not offset by the visual differences of the additional device element in the figurative mark. On further appeal, this was later confirmed by the ECJ. In particular, the ECJ held that the CFI had correctly assessed the likelihood of confusion, taking into account the visual, phonetic and conceptual similarities between the respective marks, the relevant public and the similarities between the goods. As a consequence, the application for the figurative mark SUNPLUS was refused. Comment Brand owners should remember that in word and figurative marks the word element is more likely to be considered the distinctive element of the mark, and this is central to the determination of whether the marks are confusingly similar. Consequently, word marks and figurative marks can be considered highly similar for the purposes of opposition albeit with visual differences resulting from the design/logo element. The degree of similarity between the marks is especially likely to be high if the goods/ services of the marks are similar or identical. Proprietors of word marks can therefore enforce their rights against not only similar word marks but also figurative marks which contain their word mark. 15 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

17 Trade Marks With a Reputation: Brand Owners Should Determine Whether Community Trade Marks or National Marks are Better Suited to their EU Business PAGO International v Tirol Milch registrierte Genossenschaft mbh, Case C-301/07 This case will be of interest to brand owners with Community Trade Marks (CTM) but who trade in only a small part of the EU. The ECJ confirmed that a commmunity trade mark only has a reputation in the Community if the mark is known by a significant part of the public in a substantial part of the territory. Consequently, trade mark owners may only need to show reputation in one EU Member State or a limited part of the European Community in order to gain Communitywide protection as a mark with reputation. In the proceedings, PAGO International GmbH (PAGO) owned a CTM covering fruit drinks and fruit juices. The mark included a representation of a green glass bottle (used by PAGO for several years) with a distinctive label and a cap next to the full glass of fruit drink. Tirol Milch registrierte Genossenschaft mbh (Tirol Milch) marketed in Austria a fruit and whey drink called Latella packaged in glass bottles whose design resembled that depicted in PAGO s CTM. Further, Tirol Milch advertised its drink similarly to PAGO showing a bottle next to a full glass. Since the bottles were labelled Pago and Latella respectively, both of which were widely known names in Austria, there was no likelihood of confusion between them. 16 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

18 PAGO however claimed that Tirolmilch was taking unfair advantage of the reputation of its mark in Austria without due cause. In this context the Austrian Supreme Court was unsure what the words has a reputation in the Community actually meant in the light of the fact that PAGO s mark only had a reputation in Austria. What is Meant By a Substantial Part of the Community? The ECJ confirmed that a Community trade mark is protected in the whole of the Community on the ground that it has a reputation in a substantial part of the Community. It ruled that what constitutes a substantial part of the Community is not dependent on national boundaries but must be determined by : the public concerned; by the products or services covered by the trade mark; proportion of the public which know of the mark; and the importance of the area in which the reputation exists, as defined by factors such as its geographical extent, population and economic significance. Can One Country Alone Be Regarded As a Substantial Part of the Community? Notably the ECJ confirmed that, a single Member State, such as Austria, may be considered to constitute a substantial part of the territory of the Community. Comment The judgment will be welcomed by trade mark owners who may only need to show reputation in one Member State or a limited part of the European Community in order to be able to gain a Community-wide injunction. However, as the ECJ has also ruled that a Community trade mark which has a reputation in an area which is not a substantial part of the Community does not enjoy protection as a mark with reputation. For this reason, brand owners should review their trade mark portfolios and, in particular, consider whether national marks more appropriately reflect their manner of trading within the EU. For businesses trading in one country only, it may be more straight forward to demonstrate reputation of a national mark than a CTM. 17 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

19 Look-a-likes: The ECJ Finds That an Imitation of a Branded Product Can Take Unfair Advantage of That Brand and Be Unlawful L Oréal SA and others v Bellure NV and Others, European Court of Justice, Case C-487/07 In a case concerning a smell-a-like perfume, the ECJ has confirmed that the owners of well known brands are entitled to prevent third parties from taking unfair advantage of their reputation, even where there is no likelihood of confusion, detriment to the brand, or harm to the function of the brand owner s trade mark. Whilst counterfeit products are of significant concern for many brand owners, the legal position tends to be straight forward. However, until recently, the legal position was still unclear regarding look-a-like products that do not purport to originate from the brand owner, but feature advertising statements which use the brand owner s trade marks to describe characteristics of the imitation product. In this case, the Defendant s goods were perfumes that were designed to have a similar smell to L Oreal s famous scents, and were sold to consumers using direct references to L Oreal s trade marks. Unfair Advantage The ECJ held that an unfair advantage within the meaning of Article 5(2) of the Trade Marks Directive was not conditional on finding that there was a likelihood of confusion, or a likelihood of detriment to the distinctiveness or repute of the earlier trade mark. 18 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

20 It was held that a third party took unfair advantage of an earlier mark with a reputation where that party seeks by that use to ride on the coat-tails of the mark with a reputation in order to benefit from the power of attraction, the reputation and the prestige of that mark and to exploit, without paying any financial compensation, the marketing effort expended by the proprietor of the mark in order to create and maintain the mark s image. The intent of the third party in using the trade mark is therefore a relevant factor in determining whether there is an unfair advantage. If the mark used is similar but not identical to the registered trade mark, it is still necessary to show that there is a sufficient degree of similarity between the mark to cause the relevant section of the public to establish a link between the mark used by the third party and the registered trade mark. Comparative Advertising The Comparative Advertising Directive allows advertisements that objectively compare the differences between the advertiser s products and those of its competitors. However, the Directive prohibits advertisers from stating or implying that their goods or services are an imitation or replica of genuine branded goods. The ECJ also held that such unlawful comparative advertising was also evidence of taking unfair advantage under the Trade Marks Directive. Comment This decision should be welcomed by brand owners as it clarifies the circumstances in which they can lawfully prevent the sale of imitation products which feature their well-known trade marks, even if those marks are not used to designate the origin of those imitation goods. With recent decision making and comparative advertising within the EU easier, this is a useful decision that finds in favour of the brand owner and not the advertiser who seeks to promote its products by reference to a well known trade mark of a competitor. 19 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

21 Own Name Defence : Available to Companies As Well As Individuals Hotel Cipriani SRL v Cipriani (Grosvenor Street) Ltd & Others, High Court (Chancery Division) [2008] EWHC 3032 (Ch) Section 11(2) of the United Kingdom s Trade Marks Act 1994 provides that A registered trade mark is not infringed by the use by a person of his own name or address, provided the use is in accordance with honest practices in industrial or commercial matters. In the present decision, the English High Court has provided valuable guidance on the operation of the own name defence. The Court also confirmed that the defence is available to both legal entities as well as natural persons. The origins of the case began in Venice when Giuseppe Cipriani Senior opened Hotel Cipriani. By 1967 he had sold his interests in the Hotel Cipriani group to the Claimant in this action. Both Giuseppe Cipriani Senior and family members were prohibited from using the Cipriani name for businesses for a period of five years. After a time, members of the Cipriani family opened a number of restaurants under the CIPRIANI name in various countries including the United States, Brazil and Hong Kong. Occasionally, disputes between the owners of the Hotel Cipriani and the Cipriani family would arise over the use of the CIPRIANI name. In the intervening period, the current owners of the Hotel Cipriani obtained a CTM registration for CIPRIANI for hotel related services. In 2004, Cipriani (Grosvenor Street) Limited (the first defendant), a Luxembourg corporation owned by the Cipriani family and the second defendant, Giuseppe Cipriani, who was the sold director of this company opened a restaurant in London called Cipriani London. In 2006 the Claimant sued for infringement of its CTM and alleged that there existed a likelihood of confusion on the part of the public. The Claimant also alleged passing off based on the goodwill in the United Kingdom of the name Hotel Cipriani. 20 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

22 The Defendants counterclaimed, alleging that there had been no instances of confusion in the marketplace and therefore no likelihood of confusion; that the Claimant s CTM was invalid because it had been obtained in bad faith and lastly, they sought to rely on the own name defence. Decision The claim for invalidity and the allegation of bad faith by the Defendants was rejected. While bad faith had been alleged on the basis that Claimant knew of other third parties in the European Union using CIPRIANI for hotel and restaurant services the Court confirmed that a person was presumed to have acted in good faith unless the contrary is proved. In addition, as the CTM was a first to file system, it was up to these other third parties to oppose the application on relative grounds or seek to cancel a registration and even if there were other third party users, an applicant (such as the Claimant) could believe that they had superior rights. Further, the Claimants had been using the CIPRIANI mark in connection with hotels for many years and therefore had an obvious and legitimate interest in applying for the mark (see also Lindt v Franz Hauswirth). The claim for passing off was upheld, due to the unique reputation of Hotel Cipriani and despite the Claimant having never traded in the United Kingdom. The Court found that the Hotel Cipriani was extremely well known and world famous and was rated as one of the top ten hotels in the world. The evidence also showed that Hotel Cipriani consistently received direct bookings from the United Kingdom and, in a six year period, 30% of the rooms were occupied by people from Britain. As a result, it was found that the Claimant had a reputation for CIPRIANI in the United Kingdom and that the use of Cipriani London constituted passing off as the use of Cipriani would mislead the public into thinking that there was a link with Hotel Cipriani. As for the own name defence, it was held that this provision relates only to use of an identical name and in this case Cipriani London was different to the name of the first defendant, Cipriani (Grosvenor Street) Limited and while Cipriani was the surname of the second defendant, this was not of assistance since the London restaurant was owned and operated by the first defendant and not members of the family. Additionally, the requirement of honest commercial practices was found not to have been met by the Defendants. It was found that: they knew of the CTM registration for CIPRIANI when the restaurant was opened; would have known that the Claimant would have objected to the use of Cipriani; in practice used Cipriani on its own, answered the phone Cipriani ; and finally, made no attempt to stop the practice of restaurant reviews and guides shortening the name of the London restaurant to Cipriani. The own name defence was therefore not available. Comment Overall, this is a positive decision for brand owners as a narrow interpretation has been applied to the own name defence thereby minimising the degree to which third parties can use the trade mark of another. The decision also highlighted some practical considerations for brand owners; the need to have a clear agreement upon the sale of business setting out the permitted use by the parties of the relevant intellectual property is essential: the first to file nature of the CTM system is such that registration of a brand should be sought as soon as possible. 21 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

23 Aura, Allure and Prestige: Luxury Brands Can Object to Resale of Their Goods in Discount Stores Copad SA v Christian Dior couture SA and Others, European Court of Justice, Case C-59/08, 23 April 2009 The ECJ has held that owners of luxury brands are permitted to take infringement action against licensees who act in breach of their licence agreement, where the reputation or image of such luxury goods may be tarnished. It was held that the image of luxury and prestige goods is a quality of such products for the purposes of the Trade Marks Directive (89/104/EEC). Providers of luxury goods and services often retain close control over their distribution channels to ensure that these goods and services are only sold by high quality retailers which provide exceptional customer service in a pleasant environment, contributing to the exclusive and high quality image of the brand. Facts of the Case In this case, a licensee (SIL) of Christian Dior coutoure (Dior) sold goods featuring the CHRISTIAN DIOR mark to a discount reseller, Copad, which was outside Dior s selective distribution network. Dior, issued proceedings against Copad and SIL for trade mark infringement. Copad s defence was that Dior s rights were exhausted once the goods were placed on the market by SIL, and that Copad was therefore not liable for infringement. Contravention of a Distribution Agreement By Selling Goods to Undesirable Resellers Article 8(2) of the Trade Marks Directive (89/104/ EEC) allows a brand owner to issue proceedings against a licensee for infringement where the licensee 22 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

24 contravenes any provision in his licensing contract with regard to the quality of the goods manufactured or of the services provided by the licensee. The ECJ held that in the context of luxury goods, that any detriment to the image or luxurious aura of the goods, including their sale in surroundings not befitting of the brand s luxury image, could constitute a breach by the licensee regarding the quality of those goods or services. Exhaustion of Rights Article 7(1) of the Trade Marks Directive provides that a proprietor s rights in a trade mark are exhausted once the goods have been placed on the EU market with the consent of the proprietor. However, in this case, it was held that as the goods were placed on the market in breach of the licence agreement, that this was not done with the proprietor s consent, and therefore Article 7(1) did not apply. It was also held that only the breach of one of the conditions set out in Article 8(2) can amount to a lack of consent for the purposes of Article 7(1). Even where consent exists under Article 7(1), Article 7(2) of the Trade Marks Directive provides an additional exception to the application of Article 7(1), which will not apply where there exist legitimate reasons for the proprietor to oppose further commercialization of the goods, especially where the condition of the goods is changed or impaired after they have been put on the market. The ECJ held that the damage to the reputation of a mark is a relevant consideration when applying Article 7(2). However, in applying Article 7(2), the legitimate interests of the brand owner must be balanced with those of the licensee and retailer. Comment This ruling will be particularly welcome by brand owners who operate in the luxury and prestige markets in preventing their goods from being sold outside the prestigious establishments which contribute to the image of the brand. Licensees will inevitably be more wary of selling luxury goods to discount resellers outside the licensor s selective distribution network, as they may be pursued for trade mark infringement as a result. 23 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

25 Customs: International Registrations Designating the EU Can Be Recorded with EU Customs Authorities Zino Davidoff SA v Bundesfinanzdirektion Südost, European Court of Justice, Case C 302/08 The ECJ confirms that an International Registration designating the EU can be recorded with Customs as a CTM. Background Davidoff lodged an application for customs action with the German Customs Authorities under Article 5(4) of the Customs Regulation No 1383/2003 seeking to rely on 12 of International Registrations designating the Community. The application was dismissed by the German customs authorities on the grounds that Article 5(4) related only to the right-holder of a Community trade mark and that that regulation was not amended to include the CTMs registered under the Madrid Protocol. Davidoff appealed to the German Finance Court, which decided to stay the proceedings and refer the case to the ECJ for a preliminary ruling. The ECJ s Ruling The question of the national court was essentially whether Article 5(4) of the Customs Regulation allows the holder of an International Registration designating the EU to secure action by the Customs Authorities of one or more EU-Member States, just like the proprietor of a community trade mark. 24 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

26 The ECJ first noted that the Customs Regulation was adopted before the accession of the Community trade mark to the Madrid Protocol. However, Article 4(1) of the Protocol provides that the protection of the mark in each of the Contracting Parties designated by the holder of that mark is to be the same as if the mark had been deposited direct with the Office of that Contracting Party. Article 5(4) of the Customs Regulation allows only the right-holder of a Community trade mark, to request in addition to action by the Customs Authorities of the Member State in which the request is lodged, action by the Customs Authorities of one or more other EU member States. The Court noted that it should necessarily be accepted that, in conformity with the Community legislature s intention in acceding to the Protocol, the application of Article 5(4) of the Customs Regulation may also be requested by the holder of an International Registration. Comment The owners of an International Registration designating the Community have the same rights as Community trade mark owners concerning customs action within the EU against goods suspected of infringing their trade mark rights. The main advantage is that by filing of a single application with the customs authorities in any single Member State, the trade mark owner secures the assistance of customs authorities in all 27 Member States of the EU. 25 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

27 Customs: Brand Owners Cannot Rely on EU Customs Authorities to Seize Counterfeit Goods that are In transit to Non-EU Countries Nokia Corp v Revenue & Customs Commissioners, [2009] EWHC 1903 (Ch) The High Court, by its own admission, has come to an unsatisfactory conclusion in determining what constitutes a counterfeit product. In this judicial review, the Court surmised that goods in transit which are not placed on the market within the European Union cannot be considered counterfeit goods. The judgment is a further frustration to rights holders attempting to police the movement of infringing goods between different territories. UK Customs (HMRC) UK Customs (HMRC) had intercepted a consignment of approximately 400 mobile phones and accessories bearing the NOKIA mark. The goods were being shipped from Hong King to Columbia via Heathrow airport. Nokia confirmed the goods were fake and requested that HMRC seize the consignment. HMRC replied that they believed it would be unlawful for them to deprive the owner of goods that were in transit from one non-eu country to another non-eu country. Nokia therefore filed an application for judicial review of HMRC s decision not to seize the consignment. The Law Governing Customs Seizures The Counterfeit Goods Regulations ( the Regulations ) allows Customs to suspend the transit of goods they suspect to be counterfeit. The rights holder is informed, and if the goods are not abandoned by the consignee and consignor, the rights holder must establish that there has been an infringement of their rights. 26 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

28 Whilst the Regulations define counterfeit goods broadly, they also specify that the law to be applied in determining whether an intellectual property right has been infringed is the national law in the territory where the goods are seized. What are Counterfeit Goods Under the Law of England and Wales? The Trade Marks Act 1994 (the UK trade marks legislation) stipulates that trade mark infringement can only occur if the mark in question is used in the course of trade. The Court held that under national law, the consignment of fake Nokia goods could not be considered counterfeit, as they were in transit, not used in trade in the UK. Furthermore, the mere risk that the goods might be diverted onto the market in the UK would not be sufficient to justify a conclusion that the goods were counterfeit. The court also rejected Nokia s argument that the Regulations were clearly intended to apply to fake goods in transit and that the Court should adopt a manufacturing fiction and assume that goods were manufactured, and had therefore been released, in the Member State in question. Comment The judgment will come as a disappointment to brand owners who face the seemingly endless battle against counterfeit goods sold and transported between territories around the world. There is a dichotomy between the apparent purpose behind the Regulations, and how they must be interpreted. Whilst they state that customs should be able to take action against counterfeit goods where they are introduced into the customs territory, which specifically includes their transhipment, such a situation is rendered impossible in the UK by the later qualification that whether or not the goods are counterfeit is to be assessed under the national law. The very fact the goods are in transhipment means they cannot be on the market and therefore considered counterfeit. The judge himself stated that he hoped the case would provoke a review of the measures available to brand owners to combat the international trade of fake goods. Rights-holder must hope the serious legal discrepancies raised by this case will be addressed soon. 27 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

29 Copyright: Media Monitoring Services Will Likely Need Consent of Copyright Owners Even if Only a Short Extract of a Copyrighted Article is Reproduced Infopaq International A/S v Danske Dagblades Forening, European Court of Justice, Case C5/08 The digital age has seen tremendous growth in the number of news and information services and with it, the emergence of specialist companies offering media monitoring and analysis services. These companies analyse the information sources and prepare concise summaries for clients, based on certain keywords, topics or areas of interest. These services invariably raise questions relating to copyright and reproduction. In a decision of 16 July 2009, the ECJ provided useful guidance on the availability of exceptions to copyright infringement under the Copyright Directive. Infopaq International A/S (Infopaq) operated a media monitoring and analysis business which prepared analysis summaries from Danish daily newspapers and periodicals. The summaries were completed by way of a data capture process which consisted of a number of steps: the relevant publications were scanned, resulting in a TIFF (Tagged Image File Format) file; the TIFF file was transferred to an OCR (Optical Character Recognition) server which translated the TIFF file into a text file and the TIFF file manually deleted; the text file was processed to find a pre-defined search word in accordance with the requirements of the particular customer. To assist the reader, the 28 Edwards Angell Palmer & Dodge - Intellectual Property Case Law

30 five words before and after the search word were also captured into an extract of 11 words which was electronically stored and the text file was manually deleted; and as a final step a printed sheet containing this information was printed. Danske Dagblades Forening (DDF) was an association of Danish daily newspaper publishers which complained to Infopaq about the scanning of newspaper articles for commercial purposes without authorisation from the relevant right holders and asserted that consent was necessary. Infopaq denied that consent was required and sought an order from the Højesteret (the Danish Supreme Court) that it was entitled to use its data capture procedure without the consent of DDF or its members as the copying was transient in nature and therefore permitted under the Copyright Directive. The Højesteret referred a number of questions regarding the Copyright Directive to the ECJ. Decision The ECJ held that reproduction of the extract of 11 words from a newspaper article was not transient in nature as required by Article 5(1) of the Copyright Directive. Article 5(1) of the Copyright Directive provides that Temporary acts of reproduction referred to in Article 2, which are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable: (a) a transmission in a network between third parties by an intermediary, or (b) a lawful use of a work or other subject-matter to be made, and which have no independent economic significance, are exempted from the reproduction right provided for in Article 2. The ECJ stated that acts of reproduction must not exceed what is necessary to complete the technical process and deletion of transient acts must be done automatically. In the present matter, the TIFF file and text file deletion were dependant upon a human rather than automatic process. Accordingly, the exemption under Article 5(1) of the Copyright Directive did not apply. Comment For any company that relies on the temporary acts exemption provisions in Article 5(1) of the Copyright Directive, particularly media monitoring and analysis services, this decision is very important in terms of the workflow and data capture process that is utilised. Most relevantly, businesses should ensure that transient copies are deleted automatically (rather than relying on human intervention) as soon as the copies are no longer needed for the relevant technological process. Generally, consent of the copyright owners should be sought. 29 Edwards Angell Palmer & Dodge - Intellectual Property Case Law