European Communities Trade Mark Association. No , September 18, ECTA Round Table on: TRADE MARKS AND UNFAIR COMPETITION MUTUAL RELATIONS

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1 Flash ECTA Flash European Communities Trade Mark Association No , September 18, 2006 ECTA Round Table on: TRADE MARKS AND UNFAIR COMPETITION MUTUAL RELATIONS Friday, 20 October :00-17:00 Prague, Czech Republic For further information and registration, please refer to ECTA s website under the Conference/Round Table Section. Table of contents 1. Law - Domain Name.eu ADR Public Consultation 2. Office Practice - Enforcement EU - OHIM Inspection Section of OHIM CTM Recordals 3. Case Law reported by - Rotterdam District Court, NL, /KG ZA ; LJN: AY 6661 Decision which may have an impact on the interpretation of EC Regulation 1383/2003 of July 22, 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights. - Grand Board/BOA R-495/2005-G SCREW YOU Trade mark partly rejected on the basis of Article 7(1)(f) CTMR contrary to public policy or to accepted principles of morality. - Grand Board/BOA R-856/2004-G Lego brick device The Lego brick is not registrable by virtue of 7(1)(e)(ii) CTMR signs which consist exclusively of the shape which gives substantial value to the goods for construction toys. - CFI T-6/05 FIRST DEFENSE dev Bad faith application filed by an agent. - CFI T-133/05 PAM-PAM v PAM-PIM s BABY-PROP The marks are similar and there is a likelihood of confusion. - CFI T-168/04 tree dev. v Arbre Magique dev The marks are similar and there is a likelihood of confusion. - ECJ C-108/05 EUROPLOLIS The necessary territorial extension of the use to be evidenced in order to acquire distinctive character. Taking into consideration the various language regions. 4. ECTA news - 18 th OHIM-Link meeting in Alicante - ECTA Round Table in Prague - OHIM celebration of the 10 years of functioning of the Boards 1

2 1. LAW OFFICE PRACTICE DOMAIN NAME.EU ADR - Public Consultation The ECTA Internet Committee has provided comments on the proposed amendments, made by the Czech Arbitration Court namely (i) to modify the ADR Supplemental Rules; introduce certain discounts on ADR Fees; and (iii) further develop its on-line platform. See ECTA Flash 18/6 The comments can be found on ECTA s website under the Internet Committee/Papers section. 2. OFFICE PRACTICE ENFORCEMENT EU The European Commission has informed ECTA and its members that it has been decided to strengthen the external part of its customs policy by posting a DG TAXUD official in Bangkok. Full Communication can be found on ECTA s website under the Anti-Counterfeiting/Working Document s section. OHIM Inspection Section of OHIM OHIM has informed users that the Inspection Section is only available by telephone between and and and The Inspection Section is clearing a backlog and in order to be able to attend to users' requests as soon as possible, they cannot answer the telephone outside of the specified times. OHIM s communication can be found at: CTM Recordals OHIM has informed users that due to an increase in workload, the time limit for dealing with CTM Recordals has been extended to two and a half months. For this reasons, the staff handling recordals are currently only available to answer telephone enquiries between 10.30am and 12.00pm. 2

3 Full notification can be found at: 3. CASE LAW ENFORCEMENT Court: Rotterdam District Court, The Netherlands (summary proceedings) Case No: / KG ZA ; LJN: AY 6661 Date: 22 August 2006 Parties: Adidas & co v. China Shipping This decision may have an impact on the interpretation of EC Regulation 1383/2003 of July 22, 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights (the Regulation ). However, please note that it concerns a judgment in interlocutory / summary proceedings. Facts: Between May 2005 and April 2006 several containers from China and Cameroon to Russia, Germany, Belgium and The Netherlands had been seized by Dutch customs under the Regulation at the request of 15 right-holders ( Adidas & co ) as they were under the suspicion of containing counterfeit goods. Adidas & co put the shipping agent, China Shipping, on notice to surrender the goods for destruction under Article 11 of the Regulation (the simplified procedure ), which stipulates that: where customs authorities have detained or suspended the release of goods which are suspected of infringing an intellectual property right in one of the situations covered by Article 1 (1), the Member States may provide, in accordance with their national legislation, for a simplified procedure, to be used with the right-holder s agreement, which enables customs authorities to have such goods abandoned for destruction under customs control, without there being any need to determine whether an intellectual property right has been infringed under national law. 1 The destruction of the goods is deemed to be accepted when the declarant, holder or owner of the goods has not explicitly opposed the destruction within a specific period. This is the socalled implied consent theory, which allows to have goods suspected of infringing an intellectual property right destroyed without having to commence legal proceedings. China Shipping refused to surrender the goods for destruction, stating that he could incur liability if he surrendered the goods without being legally obliged to do so and it ever turned out that the proprietor opposed to destruction. Furthermore, the so called demurrage-costs had not been compensated (yet). Adidas & co instituted summary proceedings against China Shipping. China Shipping argued that the simplified procedure as set out in Article 11 has not explicitly been provided for by the Dutch legislator and has no direct effect (see above wording: the 1 Member States shall, in accordance with their national legislation, apply several conditions (i.e. informing the customs authorities in writing within ten working days, taking samples). 3

4 Member States may provide, in accordance with their national legislation, for a simplified procedure ). As stated in the book Enforcement of Intellectual Property Rights through Border Measures, Oxford Press 2006, this hybrid between a Directive and a Regulation is far from ideal, as the provisions of this Article, if they are ever to be implemented by Member States, will possibly be adopted at different times and in different ways 2. In The Netherlands, Article 11 is being applied already without having been implemented / being in accordance with Dutch national legislation 3. There seems to be no example of legislation that allows to having goods suspected of infringing an intellectual property right destroyed without having to commence legal proceedings in Dutch national legislation. However, the Rotterdam District Court now decided that Article 11 does have direct effect, based on Article 249 of the EC Treaty (providing that Regulations are binding and directly applicable in all Member States) and creates subjective rights to the individuals benefit. According to this Court, what Article 11 does require to be effective is not implementation but some legal basis in the respective national law. ( The question is not whether Article 11 has been implemented in the Netherlands, but whether Dutch law does know the simplified procedure as laid down in this provision ). The Court also decided that Dutch law does provide such a basis for Article 11: Article 28 of the Dutch Copyright Law, Article 13bis resp 14bis of the Benelux Trademark and Design Laws, insofar as they entitle the right-holders to claim goods which infringe their rights as their property, and/or to have them destroyed. Unfortunately the Court s reasoning concerning Article 11 is not quite convincing since the above mentioned Articles laid down in Dutch national legislation are presumably only applicable once the goods have been recognised by a Court or any other authority entitled to decide on this issue as infringing a copyright, trade mark or design right. The right-holders personal opinion does not seem relevant. 4 Since attention had also to be paid to the (stringent) conditions imposed on the right-holders by Article 11 of the Regulation, which had unfortunately not been complied with by the rightholders, the claim of Adidas & Co has been rejected by the Rotterdam District Court. Reported by, Maaike Grondman, Banning Advocaten, NL TRADE MARKS To reach the ECTA Info Database including the free Darts Europe Case Law database, please click here The Grand Board of OHIM 1. Case No: R 495/2005-G Date: 6 July 2006 Parties: Jebaraj Kenneth trading as Screw You 2 See Chapter 11, France. Para See Chapter 21, The Netherlands, para See opinion on this case at 4

5 Trade mark: SCREW YOU Classes 9, 10, 25, 28 and 33 The facts: The examiner refused the trade mark on the basis that was not eligible for registration under Article 7(1)(f) CTMR on the grounds that the Office could not accept for registration a trade mark which offends public decency or generally accepted principles of morality. Decision: The wording of Article 7(1)(f) CTMR is very broad and allows a great deal of room for interpretation. A judicious application of this provision necessarily entails balancing the right of traders to freely employ words and images in the signs they wish to register as trade marks against the right of the public not to be confronted with disturbing, abusive, insulting and even threatening trade marks (para. 14). In deciding whether a trade mark should be barred from registration on grounds of public policy or morality, the Office must apply the standards of a reasonable person with normal levels of sensitivity and tolerance. Further, it is also necessary to consider the context in which the mark is likely to be encountered, assuming normal use of the mark in connection with the goods and services covered by the application (para. 21). In the present case, the sign falls within the domain of vulgarity, insult and profanity (para. 22). It is probable that a substantial number of citizens with a normal level of sensitivity and tolerance would be upset by regular commercial exposure to the term (para. 26). The Board dismisses the appeal in relation to the goods in respect of which coverage is sought in Classes 9, 25, 28 and 33 as they are ordinary items marketed in outlets used by the general public and which will be upset and affronted by the use of SCREW YOU in relation with these goods (para 27 and 30). However, the appeal is allowed in respect of condoms, contraceptives, sex toys (vibrators, dolls) as well as regards artificial breasts and breast pumps in Class 10, provided that the specification is modified so as to cover only artificial breasts and breast pumps of a type that is normally sold exclusively in sex shops, as the relevant consuming public is unlikely to be perturbed by the use of the term SCREW YOU as a trade mark. (para 28-30). 2. Case No: R 856/2004-G Date: 10 July 2006 Parties: Megam Brands, Inc v. Lego Juris A/S Trade mark: Classes 28 5

6 The facts: The Lego brick was accepted for registration on the basis of acquired distinctiveness pursuant to Article 7(3) of CTMR. Ritvik Holdings Inc. (successor in title, Mega Brands, Inc.) filed an application, pursuant to Article 51(1)(a) CTMR, for a declaration that the CTM registration was invalid in relation to construction toys in Class 28. The invalidity action was, in turn, based on Article 7(1)(a), (e)(ii), (e)(iii) and (f) CTMR. The Cancellation Division, in its decision No 63 C /1, rejects the CTM registration with respect to construction toys in Class 28 (para. 10). Decision: On the functionality of the Lego brick: The Grand Board confirms contested decision conclusions in that the various features of the Lego brick all perform particular technical functions, namely: - the bosses [studs]: height and diameter for clutch power; number for fixing versatility; layout for fixing arrangement; - the secondary projections: clutch-power, the number for best clutch-power in all positions; the thickness of the wall to act as a spring; - sides: connected with sides of other bricks to produce a wall; - hollow skirt: to mesh with the bosses and to enable fixing for clutch power; - overall shape: brick shape for building; size for children to hold. (para 54-55). On the proprietor s alternative designs argument: The Board concurs with the contested decision that the Lego brick is wholly functional since there is nothing arbitrary nor ornamental present in it. The eye appeal that the Proprietor speaks of, merely stems from the aesthetics of a sound structural and functional form. Consequently the Board, with respect to the Proprietor s Lego brick, can apply the following words of the Remington/Philips judgment, namely that the essential functional characteristics of the shape are attributable solely to the technical result. (para. 63) The Board concludes that the Lego brick is not registrable by virtue of Article 7(1)(e)(ii) CTMR for construction toys covered by Class 28. (para. 66) Court of first Instance of the European Court of Justice On relative grounds for refusal 1. Case No: T 6-05 Date: 6 September 2006 Parties: DEF-TEC Defense Technology GmbH c. OHIM 6

Trade mark: Classes 5, 8 and 16 Contested decision: R0493_2002-2 dated 8 November 2004 Decision: 1.

7 Trade mark: Classes 5, 8 and 16 Contested decision: R0493_ dated 8 November 2004 Decision: 1. Article 8, 3 CTMR (Bad faith application filed by an agent) The Decision applies article 8,3 CTMR which provides that Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor s consent, unless the agent or representative justifies his action. In the present matter, the company DEF-TEC Technology GmbH obtained, in June 1996, from the US company Defense Technology Corporation of America, the right to apply for the mark as depicted above and had done so at OHIM on September 16, In the meantime, the assets of Defense Technology Corporation of America had been purchased by a third party which gave notice of opposition to registration of the mark applied for. The Opposition Division upheld the opposition in part; in so far as it was based on Article 8(3) noting that applicant did not evidence the consent given to the US Company. The Board of Appeal dismissed the appeal. The Court annuls the decision of the Board of Appeal in that the consent of 1 June 1996 was clear, specific and unconditional on that date (para ). The court states that the Board of Appeal ought to have determined whether the consent had survived the purchase of the assets of Defense Technology Corporation of America by the third party that gave notice of opposition. As this was not examined during the proceedings before OHIM, the Court cannot rule on that point (points 49-50). 2. Signature of the decisions by the Board of Appeals Applicant also submitted that the decision of the Opposition Division, which was transmitted to it only by telefax, is void, as it does not bear the signatures of the opposition division members who adopted it. The Court rejects the plea. The court notes that the decision of the division includes the identification of the department and division of OHIM, which adopted it, and the names of the 7

8 officials responsible. Consequently, communication by telecopier of the decision complies with the requirements fixed by the Implementing Regulation (para ). 2. Case No: T-133/05 Date: 7 September 2006 Parties: Gérard Meric c. OHIM Trade mark: PAM-PAM Earlier trade mark PAM-PIM S BABY-PROP Community trade mark applied for Classes 3 and 5 Contested decision: R0250_ dated 17 January 2005 Decision: Regarding the nature of the goods applied for by the earlier mark (napkin-pants made out of paper or cellulose (disposable)), the word combination PAM-PIM S is the dominant element of the mark applied for (para ). The marks are visually and orally similar (para ). The goods covered by both marks are identical; there is a likelihood of confusion between the marks in question (para 74-77). 3. Case No: T-168/04 Date: 7 September 2006 Parties: L&D SA c. OHMI Trade mark: Earlier trade mark Community trade mark applied for Classes 3 and 5 Contested decision: R0326_ dated 15 March 2004 Decision: 1. Acquired distinctiveness. The Court held that the earlier mark has acquired distinctiveness following the use of another mark composed by the same figurative sign in combination with the words arbre magique (para ). 8

9 The Court accepts as evidences of such use, data subsequent to the filing of the application for registration of the mark by the applicant as this data enables the drawing of conclusions on the situation as it was on the date of filing (para ). 2. Similarity of the marks and likelihood of confusion. The marks are visually and conceptually similar despite the fact that the opposed trade mark contains the word element aire limpio, which is of secondary importance (para ). The goods of concern are identical and the Court concludes that there is a likelihood of confusion (para ). 3. Links On the principle of acquired distinctiveness following the use of a different mark see ECJ C-353/03 dated July 7, 2005, Nestlé. On the evidences of use and the possibility to take into consideration data subsequent to the filing of the application for registration, see CFI T-206/04 dated 15 December 2005, Bic (Three-dimensional trade mark in the shape of a lighter). For another recent decision on the protection of same mark, see High Court (UK), 17 March 2006, Julius Samann Ltd c. Tetrosyl Ltd. European Court of Justice Case No: C-108/05 Date: 7 September 2006 Parties: Bovemij Verzekeringen NV v Benelux-Merkenbureau The facts: The Company Bovemij applied to the Benelux Trade Mark Office for the sign EUROPLIS for services in classes 36 and 39. The Benelux Trade Mark Office refuses registration of the application as it is devoid of any distinctive character. Bovemij appealed the decision to the Gerechtshof te s-gravenhage (Regional Court of Appeal, The Hague, NL). It argued, amongst others, that the sign EUROPOLIS has acquired distinctive character through use in a substantial part of the Benelux territory, namely the Netherlands. The Benelux Trade Mark Office, on the other hand, contended that the acceptance of acquireness through use requires that the sign be used throughout the Benelux territory. The Gerechtshof considered that in order to settle this point further clarification was needed on the interpretation of article 3,3 of the Harmonization Directive and therefore stayed the proceedings and referred to the Court of Justice for a preliminary ruling. 9

10 The questions: The questions concerned refer to two points: A : The necessary territorial extension of the use to be evidenced in order to acquire distinctive character Is it necessary that the sign be regarded as a trade mark, by the relevant public throughout the territory for which it has been applied for. Or, is it sufficient that it has been used in a substantial part of it (in the present case, in the Netherlands only for a Benelux application)? B : The taking into consideration of the various language regions When assessing the distinctive character acquired through use of a sign consisting of one or more words of an official language in the territory of a Member State is it necessary to take into account the language regions within that territory? Should the answer be yes, is it sufficient for the sign to be regarded as a trade mark by the relevant section of the public in a substantial part of the language region of the Member State? The answers of the Court: A. The registration of a trade mark can be allowed only if it is proven that that trade mark has acquired distinctive character through use throughout the territory of the Member State in which there exists a ground for refusal. B. If the ground for refusal is raised for linguistic reasons, the various linguistic regions are to be taken into consideration. It must be established that the mark has acquired distinctive character through use throughout the linguistic area in which there exists a ground for refusal. In the linguistic area thus defined, it must be assessed whether the relevant class of persons, or at least a significant proportion thereof, identifies the product or service in question as originating from a particular undertaking because of the trade mark. Short comment: The consequence of the Court decision is that trade mark applicants will encounter serious difficulties in evidencing acquired distinctiveness through use. In accordance with the decision, acquired distinctiveness will have to be evidenced throughout the territory of the Member State in which a ground for refusal exists. This principle, will by analogy, also apply for Community Trade Mark applications. Should an applicant apply for a 3D non-distinctive sign, he will have to evidence acquired distinctiveness throughout the EU. 10

11 This means that anyone having a limited territorial commercial activity within the EU will not have the possibility to obtain a community trade mark registration on the basis of the acquired distinctiveness through use of the mark. Similarly, following the Court s decision, a French company located in the north of France with a limited commercial expansion within that region, would not be able to obtain registration in France of its mark on the basis of the acquired distinctiveness through use of the mark. The Court seems to have taken a strict position, not taking into consideration the reality of the market place. Regrettably, the Court did not follow the CFI where in its decision No T- 262/04 dated 15 December 2005: regarding the three-dimensional trade mark in the shape of a lighter, para. 62 and 69), where the Court considered that the proof of distinctive character acquired in consequence of the use of that mark must be demonstrated in the substantial part of the Community. To find the full text of the national decisions mentioned in ECTA Flashes, please search the ECTA Info Database including the free Darts Europe Case Law database available on ECTA s website in the members only section. 3. ECTA NEWS Meeting with OHIM The 18 th ECTA OHIM-Link meeting will take place in Alicante on 25 September Should you have any issues to be raised at this meeting, please send an to: Joao Pereira da Cruz (Chairperson of the OHIM link Committee) at: jpcruz@mail.telepac.pt, and/or Sandrine Peters (ECTA Legal Co-ordinator) at: Sandrine.peters@ecta.org. ECTA Round Table on: TRADE MARKS AND UNFAIR COMPETITION ECTA is holding a Round Table on: Speakers: TRADE MARKS AND UNFAIR COMPETITION MUTUAL RELATIONS Friday, 20 October :00-17:00 Prague, Czech Republic Dr. Hana Lasáková, Company Executive of IVAX Pharmaceuticals s.r.o. and Director of Legal Affairs and Intellectual Property. Professor Dr. jur. Jan Křiž, Professor in Civil Law at the Law Faculty of Charles University in Prague 11

12 For further information and registration, please refer to ECTA s website under the Conference/Round Table Section. OHIM celebrates the 10 years of functioning of the Boards OHIM will celebrate 10 years of functioning of the Boards on October 27, ECTA will be represented by Mireia Curell, ECTA President. 12

The Community Trade Mark and the National Trade Marks Are they in harmony? The Benelux point of view.

Round Table ECTA-BOIP-OHIM The Community Trade Mark and the National Trade Marks Are they in harmony? The Benelux point of view. Are the CTM and Benelux systems harmonized? Relative grounds of refusal