NEWSLETTER. July 2010 No. 23 INTELLECTUAL PROPERTY LAW / COMPANY LAW / CONTRACT LAW

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1 NEWSLETTER July 2010 No. 23 INTELLECTUAL PROPERTY LAW / COMPANY LAW / CONTRACT LAW COMPETITION LAW / INSURANCE LAW

2 I. Firm News We are proud to announce that the IP Handbook for year 2010 published by the Managing Intellectual Property has recognized METIDA Law Firm of Reda Zaboliene as one of the leading firms in all major spheres of intellectual property: patent prosecution, patent contentious, trademark prosecution and trademark/copyright contentious in Lithuania. We are grateful to all our Clients and Colleagues for cooperation and recognition of our services. In further work we will seek to assure and improve our performance to meet your expectations. As of 1996 the Managing Intellectual Property performs surveys amongst practitioners and in-house counsel worldwide. The survey is not simply a list of the biggest firms, or a list of those that have the biggest caseload or are the oldest. Instead, it is a qualitative ranking of the leading firms in each category and reveals which firms are rated by their peers for the strength of their expertise and the depth of their ability to service clients. II. Practice of the state patent bureau of the Republic of Lithuania TRADEMARKS CORRESPONDENCE TO THE RELATIVE REQUIREMENTS Misleading similar trademarks: Earlier trademarks Opposed trademarks confusingly similar goods in class 9 COVEX COVEXOR confusingly similar goods in class 5 VELUX 2 Firm News confusingly similar goods in class 9 confusingly similar services in class 43

3 Dissimilar trademarks: Earlier trademarks Opposed trademarks DAYA confusingly similar goods in class 31 IKI EXPRESS confusingly similar goods in class 29 DESIGN GO confusingly similar goods in classes 22 and 25 TRADEMARKS CORRESPONDENCE TO THE ABSOLUTE REQUIREMENTS Regarding the registration of trade marks LTSR muziejus (application No ) LTSR (application No ) and CCCP (application No ) in Lithuania UAB WIGWAM SOLUTIONS vs State Patent Bureau (SPB) On January 19, 2010 the Appeals Division of SPB has examined appeals Nos. 139, 140 and 141 concerning examiner's decision not to register marks LTSR muziejus, LTSR and CCCP as trade marks as contrary to public order and lacking a distinctive character. After the appeals were examined it was stated that LTSR and CCCP as the abbreviations of pre-existing states are not assigned to the symbols whose public use is prohibited. Therefore, the signs provided for registration do not violate any laws which govern the state legal system, the state and functioning of society, so they are not treated as contrary to morality or public order, ethical society norms, principles of humanity. However, in assessing the distinctive character of the mentioned marks, the Appeals Division noted that in respect of the goods of class 16 and services of class 41 of interest universally accepted historically existed state abbreviation will not have any distinctive character. Therefore, the appeals were rejected and the decision not to register the signs LTSR muziejus, LTSR and CCCP was left. Regarding the registration of International trade mark POWERTECH No in Lithuania On the May 27, 2009 the decision not to register International trade mark POWERTECH in Lithuania for the goods of classes 12 and 17 was adopted, motivating that the mark does not have any distinctive character and is composed only of words of descriptive nature and indicates only the characteristics of the intended to be registered goods. After the motivated request to perform re-examination was filed, it was proved that the sign has inherent distinctive character in respect of filed goods in class 17 and corresponds other requirements of trade mark registrability, therefore, there was adopted a decision Practice of the state patent bureau of the Republic of Lithuania 3

4 to provide International trade mark POWERTECH registration in Lithuania with the security of goods in class 17. Regarding the registration of International trade mark ECODRIVE No in Lithuania On August 28, 2009 there was adopted a decision not to register International trade mark ECODRIVE in Lithuania for the goods of class 12 motivating that the mark does not have any distinctive character and indicates only the characteristics of intended to be registered goods. After the motivated request to perform re-examination was filed it was proved that the word ECODRIVE making the registered sign is not a general term namely in respect of the goods of interest in class 12 and neither directly nor indirectly indicates any characteristics of these goods, therefore, it has a distinctive character and corresponds other requirements of trade mark registrability. Taking into consideration the stated arguments the decision was adopted to register International mark ECODRIVE in Lithuania. III. Court judgements of the Republic of Lithuania INTELLECTUAL PROPERTY LAW In April 21, 2010 decision Lithuanian Appeal Court rejected defendant's UAB Dinasas appeal in the civil case No 2A-192/2010 according to plaintiff's Microfibres, Inc. (USA) claim concerning the illegal use of European Community design and copyright object. Vilnius County Court has answered the claim deciding that the defendant illegally distributes furniture fabrics which violate plaintiff's rights to the registered Community design No and copyright, and adjudged compensation of damage LTL The Court decided that UAB Proginis dizainas performed expertise (even though it was not assigned by the court, besides the expertise provided not the evaluation of informed consumer but of people having special knowledge in the design area) in the context of case circumstances is considered as one of evidences grounding the violation of plaintiff's rights. The Court also decided that the adjudged amount of damages corresponds the requirements of provisions because offender's received benefit is related only with the activity in which the violation is made. Therefore, the income received from other offender's activity and expenses incurred because of it are not related with the violation of right and they should not be taken into consideration while determining the amount of damage. The court also decided that while determining the amount of damage incurred because of author's and/or design owner's rights violation it is very important if the illegal actions were deliberate and continuous. In April 30, 2010 decision Lithuanian Appeal Court rejected defendants' I.M., A.M. and VsI SOS gyvūnai appeal in the civil case No 2A-380/2010 according to plaintiff's VsI Gyvūnų globos tarnyba Pifas claim concerning the misleading legal entity name and illegal use of domain name. The case was cancelled in the Court of First instance in the part concerning the prohibition to use word Pifas in its activity as the defendant benevolently agreed to change the name. Therefore, in their appeals the defendants appealed Vilnius County Court judgment to prohibit the use of domain name and to oblige to annulated the registration of this domain name. Lithuanian Appeal Court stated that only 4 Court judgements of the Republic of Lithuania

5 that circumstance that defendant's VsI SOS gyvūnai according to the legal status profit is not the main purpose of the establishment does not annulated its competitive feature. Therefore, while solving the disputes concerning the use of domain name and registration Civil Code of the Republic of Lithuania, Law on Trade Marks of the Republic of Lithuania and Law on Competition of the Republic of Lithuania can be applied. The court decided that after assessing the evidence provided in the case and defendant's I.M. (former manager of plaintiff's company) actions, using plaintiff's used domain name in the activity of newly established VsI Vilniaus Pifas and one more Office Pifas.lt is the basis to state defendants' dishonesty, consumer disorientation and confusion involvement. In June 7, 2010 judgment Vilnius District Court answered plaintiff's UAB Tegros investicija claim for defendant Kim Jarolim Im- und Exprt GmbH concerning international trade mark registration No acknowledgment as invalid in Lithuanian after having ascertained that the defendant provided the application for the registration of this trade mark having bad faith. The court has ascertained that joint authors of this trade mark are R.G. (president of former UAB Tegra ) and K.D. (designer) and the right to this trade mark were transferred for Limited Liability Company Tegra which were later taken by plaintiff. As the defendant and plaintiff are competitors, the defendant produced goods with trade mark P+ according to plaintiff's order, the defendant could not unknow about plaintiff's subjective right to such trade mark. Therefore, the court has decided that the defendant provided the application for the registration of this trade mark having bad faith. The court also stated that defendant's dishonesty is confirmed by circumstances related with other trade marks CYCLONE, PENOPLAST and FOMEPRO registered under defendant's name. COMPANY LAW In June 1, 2010 decision No 3K-3-252/2010 Lithuanian Supreme Court has examined the case in which plaintiff's, who acquired 71 percent of company shares during the privatization process, claim concerning the compensation of damages was answered. The courts stated that because of defendant's illegal actions, i.e. inappropriate company's economic-financial status determination, the announcement of false information (Article of Civil Code), non implementation of the obligation stipulated in Article 8 part 3 of Law on State and Municipalities property privatization to provide the right information about the object being privatized the plaintiff experienced loss, the plaintiff was mislead by the defendant concerning the real value of shares package. As the plaintiff paid for the acquired shares more than they were worth, the courts answered plaintiff's requirement for the compensation of damage of LTL Lithuanian Supreme Court stated the responsibility of privatization object manager (Municipality of Klaipėda city) concerning inappropriate obligation performance while preparing the object for privatization, i.e. violation of Law on State and Municipalities property privatization. In May 31, 2010 resolution No 3K-3-242/2010 Lithuanian Supreme Court spoke about the concept of joint activity, legal assessment of its expiration consequences and the concept of property. The court named such essential features of joint activity: cooperation of several persons' property, intellectual and labor resources (contributions); obligation while using cooperative resources to act together; general participants' purpose and interest- the development of particular activity and the pursuit of the aim. If the contract corresponds such features, it should be qualified as the contract of joint activity. After having assessed concepts of property provided in various laws, the court summarized that Court judgements of the Republic of Lithuania 5

6 in some cases the concept of property means things, property rights and obligations belonging for the person and in other cases it means only the active of property, i.e. things and property rights. I.e. in the wider context, in the law the property is assumed to be all civil law objects and in the narrower context the concept of property includes only things. The panel stated that right to recover income received from general joint activity and which are adjudged according to court judgment which came into force, is a property right which comes into the mass of partners' property and this right can be divided after the contract has expired as any other property. INSURANCE LAW In April 12, 2010 decision Lithuanian Supreme Court partly annulated the judgment of the court of first instance in the civil case No 3K-3-161/2010 and in that part transferred the case to be examined from the beginning in the appellate procedure. Plaintiff's are the wife and children of the employee who died in the accident at work, they asked to adjudge from defendant (employer) compensation of non-material damage, to acknowledge part of employee's and insurance company's signed insurance contract concerning the assignation of benefit recipient in case of death as invalid and adjudge from the employer the part of insurance benefit. The court of first instance answered the claim partly and the court of appellate instance changed the judgment. Plaintiffs provided the causational appeal. The Supreme Court stated that the courts reasonably rejected plaintiffs' requirement concerning the acknowledgement of insurance contract conditions as invalid. With the insurance contract the defendant insured his property interests attempting to pay possible expenses in case of prohibited event, incurred because of the employment of the new employee, the loss because of the stop of labor functions implementation, compensation of loss for which the employer is responsible etc. therefore, the defendant could be the recipient of such benefit according to such contract. As the loss which the insurer insures because of the prohibited event are evaluated objectively in money and the current contract dispute loss of the contract items, the insured employee death, the beneficiary - the employer - is limited to a specific property interests of the insured event loss amount. In this case, the defendant has paid LTL insurance benefit, while the court awarded for the applicants LTL for non-material damage compensation, because it was not clear whether the defendant was reasonably received the remaining of LTL 5000 insurance benefit, i.e. whether the defendant's total cost concerning the employee's death reaches or exceeds LTL , so in this part the case was returned to be examined newly in the appellate procedure. In May 10, 2010 resolution Lithuanian Supreme Court annulated the judgment of appellate instance court in the civil case 3K-3-210/2010 and transferred the case to be examined newly in the appellate procedure. The plaintiff is a dispatcher who obliged to organize international cargo (frozen products) transportation, asked to adjudge from defendant- insurance company- insurance benefit as the cargo broke and was utilized because of inappropriate transportation temperature. The courts of first and appellate instances rejected the claim. The court noted that the cargo sender's (recipient's) and the contracting transporter's contract determines the scope of responsibility and ensures the sender (recipient), that in case of inappropriate execution of the contract the party will be responsible for his losses. If is clear from the contract is clear that the party undertake to transport the cargo, it is 6 Court judgements of the Republic of Lithuania

7 considered as the transporter in sense of CMR contention and responds as a cargo transporter, irrespectively of the fact that factually the cargo was transported by another person. In this case, the plaintiff was not acting merely as a dispatcher, but also as a transporter in sense of CMR convention, therefore he must not only be responsible for his actions and mistakes, but for the actions of his agents and other persons whose services he uses. The court stated that the appellate instance court wrongly decided that the insurer's (plaintiff's) function non implementation to indicate in CMR invoice about the broken cargo influenced the situation that requirement rights to the insurer became impossible to implement because of plaintiff's fault, so the insurer had a basis to rebus to pay insurance benefit according to Article of CC. The dispute parties while making the insurance contract limited the insurer's right to refuse to pay the insurance benefit in the form of insurer's fault form - intentionally, but there is no basis for finding plaintiff's intentional actions, therefore, the courts had no reason to reject the claim. As the appellate court instance did not ascertain the circumstances important to solve a dispute did not compare the amount of damage made by insured event to the increase of this damage resulting from the breach of the contract, the case was returned to be examined from the beginning. IV. Fighting counterfeiting of goods In April 2010, with the representation of owners of registered trade marks GUCCI and LOTTO for whom Customs supervision means are applied, the goods detained by Klaipėda territorial customs were destroyed, produced while violating intellectual property rights: 500 units of GUCCI trade mark signed bells Fighting counterfeiting of goods 7

8 1105 units of LOTTO trade mark signed male shorts The news provided in this newsletter are only for information purpose and it may not be considered as legal conclusion or consultation. For more specific information please contact our firm: 8 Contacts METIDA Law firm of Reda Žabolienė 2010 Business center VERTAS, Gynėjų str. 16, LT Vilnius, Lithuania Tel.: , , fax patent@metida.lt