NEWSLETTER. March 2010 No. 22 INTELLECTUAL PROPERTY LAW / COMPANY LAW / CONTRACT LAW COMPETITION LAW / INSURANCE LAW

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1 March 2010 No. 22 Newsletter March 2010 INTELLECTUAL PROPERTY LAW / COMPANY LAW / CONTRACT LAW No.22 NEWSLETTER COMPETITION LAW / INSURANCE LAW

2 I. Firm News In the ratings for the year 2010, published by Chambers Europe, Metida Law Firm of Reda Žabolienė, has been honoured with a title of being one of the leading Law Firm in the area of Intellectual property in Lithuania for the second year in a row. The impressive number of the clients as well as large number of highly skilled professionals, the achievements in the field of trademark disputes and the litigation achievements and desert of Reda Žabolienė for the development of the intellectual property law in Lithuania which were recognized by the colleagues, let to name Metida as the main force on the trade mark registration and litigation scene. "Chambers Global", a well known worldwide legal guide which has been published annually for more than 10 years by "Chambers and partners", publishes about all leading law firms and lawyers. The rating research methodology has been approved by the British Market Research Bureau. 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similar trademarks: Earlier trademarks Opposed trademarks VIA SPIGA Registration of the opposed trademark was withdrawn for the part of the services in class 35, namely, bringing together, for the benefit of others, of a variety of goods (excluding the transport thereof), enabling customers to conveniently view and purchase those goods REX 2 Firm News COAST LUX TV confusingly similar goods in class 3 confusingly similar goods in classes 18 and 25 confusingly similar services in classes 35, 38 and 41

3 Dissimilar trademarks: Earlier trademarks Opposed trademarks XALATAN XALAPROST confusingly similar goods in class 5 COMFO confusingly similar goods in class 11 TRADEMARKS CORRESPONDENCE TO THE ABSOLUTE REQUIREMENTS Regarding the registration of the trade mark (application No ) in Lithuania UAB Peritus grupė vs State Patent Bureau (SPB) On 10 September, 2009, after the examination of the appeal No. 138 by the Appeals Division of SPB regarding the expert's refusal to register the mark as contrary to public order, it was stated, that according to the practice of Lithuanian law, the concept of the public order includes the main principles, which are used to ground the legal system of the state, the functioning of the state and the society. The trade marks are a part of public language, which should not be provided with non-normative words. Considering the fact, that word busikas was recognized by the State Lithuanian Language Commission as being a jargon, which should not be provided to the generic language, Appeals Division decided, that the sign does not conform the normalization requirements for the public generic Lithuanian language and is not registered. Regarding the registration of the trademark esf EUROPOS SOCIALINIS FONDAS, fig. (application No ) in Lithuania European Commission vs European Social Fund Agency The interested person presented an opposition No to the Appeals Division of SPB, motivating that the applicant has not got consent to register an official European Union flag/emblem it its trademark. On 16 June, 2009, after examination of the opposition it was stated, that the official emblems can often include such symbols, which are of a general nature, and it has to be allowed to use them in the marks freely, if only the imitation does not have the heraldic characters, which help to distinguish one emblem from the other one. Considering the fact, that twelve pentagonal stars, laid down in the circle, figures in the flag of the Practice of the state patent bureau of the Republic of Lithuania 3

4 European Union and the opposed mark includes just seven stars which are laid down in the semicircle. As well as the fact, that the colour expression of the opposed mark the combination of yellow, green and red colours is not typical for the aforementioned symbolism. The Appeals Division decided, that the opposed mark does not imitate the emblem of the European Union in the point of view of the heraldry, and the registration was left to be valid. II. Court judgements of the Republic of Lithuania INTELLECTUAL PROPERTY LAW On 2 March, 2010, the Supreme Court of Lithuania in the civil case No. 3K-3-105/2010 partly revoked the decision and the ruling of the lower courts under plaintiff's UAB Liuks and UAB Corpus Medica claim to the respondent Public limited liability company FARMAK regarding the invalidation of the registrations No , 47921, of the trade marks VALIDOL and in this part returned the case to the first instance court for reexamination. The courts, which examined the case, stated justly that the sign Validol (Validolis) regarding its factual use had became customary in the current language, honest and established trade and pharmacy practice for all medical products heart calmative tablets etc., therefore it has lost its own as trademark's characters. The sign Validol (Validolis) could be recognized as conforming the requirements for the trade mark only if it was determined, that because of factual its use in the commercial activity of the respondent for a certain period of time it obtained the fundamental character of differentiation of goods and the interested consumer attributes goods which are marked with it exactly to the respondent, but the respondent has not asserted such circumstances. On the other hand, the Court stated, that courts restricted just to the evaluation of the data and evidences only because of 5th class medical products and did not examine the part of the claim regarding the trade mark's conformation to the non-medical goods of the class 30, for which the trademark was registered, did not provide the legal evaluation regarding such goods, therefore did not have reason to revoke the registration of the respondent's trade mark VALIDOL in it's entirety. On March 1, 2010 the Supreme Court of Lithuania in the civil case No. 3K-3-66/2010 left valid the decision of the appeal instance court, under which the plaintiff's M.B. claim to the respondent UAB ORLEN Lietuva regarding the adjudgement of the honorarium for the patent, has been granted. In 1994 the plaintiff together with other co-authors made an agreement with the respondent, regarding the use of the invention, which was recognised with the patent No. 3884, in the production of the petroleum products. Under the agreement, the honorarium should have been equal to 25 percent of the profit, which was gained when using the invention during its entire life, had to be paid to the authors of the invention. The respondent paid the honorarium just for the year The Court of Appeals of Lithuania decided, that the invention had been used during all its entire life (till 2000), therefore the honorarium had to be paid to the plaintiff. Since the respondent did not provide the assessment of the profitability of the use of the invention, the honorarium was calculated under the economical profitability of using of invention specified in the expertise act. It was the first such character case examined in the Supreme Court of Lithuania. 4 Court judgements of the Republic of Lithuania

5 Under the 23 February 2010 ruling in the case No. 2A-225/2010 the Court of Appeals of Lithuania dismissed the appeal of the plaintiff confectionery corporation Roshen regarding the decision of Vilnius Regional Court, by which its claim to the respondent FERRERO S.p.A regarding the invalidation of the international registration No of the trade mark ROCHER regarding not use has been rejected. The court decided, that the use of the trade mark is not only exceptionally marking of goods or services with the particular mark, therefore the using of mark in the advertising publications, internet websites, bills, entry documents is a suitable evidence of the use of the trademark. Also the court, following the decision No. T-29/04 of European Court of the First Instance, spoke, that two or more marks can be used together or separately, with the name or without the name of the producer's company, therefore the respondent's mark is recognized as used in the other respondent's trade mark FERRERO ROCHER Nr Under the ruling made on 8 February 2010 in the case No. 2A-85/2010 the Court of Appeals of Lithuania partly granted the respondent's UAB Infomedia appeal regarding the decision of Vilnius Regional Court, under which the plaintiff's claim regarding the invalidation of the respondent's TEO LT, UAB trade marks' 118, fig registrations No , 43433, and has been rejected. The court decided that disputable trademarks consists of entirety of various elements verbal, graphic, colour, therefore the plaintiff did not prove that exactly such trademarks had become common. But the Court of Appeals of Lithuania stated, that verbal sign 118 in these trademarks had become common, therefore it revoked the decision of Vilnius District Court and granted the claim partly recognized the sign 118 as disclaimers in the respondent's trademarks. COMPANY LAW In the ruling made on 22 January 2010 by the board of Civil Case Division of the Supreme Court of Lithuania in the case No. 3K-3-13/2010, in making a decision regarding the setting the order of using the corporate item it was clarified, that the joint owner can not apply to court and to require to define as the object of the using of the general partly proprietary right in the way, that ranges and area of the corporate land would be changed. The court noted, that parties have make themselves the proper, rational, reasonable projects which set the order of using corporate items. The court can not prepare the proper project which set the order of using the item, it administers only justice in the concrete cases and is not an institution which prepares such projects. Therefore if all projects of order of using the corporate partly proprietary right object, provided in the joint owners' case, are not proper or faulty, the court is entitled to dismiss them. In the ruling made on 11 January 2010 by the board of Civil Case Division of the Supreme Court of Lithuania in the case No. 3K-3-31/2010 it was spoken regarding the termination of the leasing agreement and the responsibility of lessor. The lessor, executing the leasing agreement, if it is not set differently in the agreement, must purchase the leasing item from the seller which is chosen by the lessee. In such case the purchased item is given not to the buyer (new owner), but to the lessee, which, although is not the party of the Court judgements of the Republic of Lithuania 5

6 buying-selling agreement, has the right to make claim for the quality of the item, complement etc., but does not have the right to terminate the buying-selling agreement without the consent of the lessor. Therefore, the lessor, seeing, that the vehicle acquired under the leasing agreement is not qualitative, has to make claims against the seller and to require to remove the defects of the leasing item or, adjusting with the lessor, to request to break the selling-buying agreement. In the ruling made on 30 December 2009 by the board of Civil Case Division of the Supreme Court of Lithuania in the case No. 3K-3-496/2009 (regarding UAB Baltijos žuvys ) have been explained the provisions of the Law of Restructuring of the Companies of the Republic of Lithuania regarding the presumptions of the restructuring of the companies. The court stated that the process of companies restructuring may be started if there are the following conditions: 1) the company does not settles with the creditor (creditors) for more than three months from the date, specified by the law, other legal acts, as well as in creditor's and company's agreements for the execution of the company's obligations; 2) the company has not stopped the economical commercial activity; 3) the bankruptcy proceedings have not been started against the company and the extrajudicial bankruptcy procedures has not been started. The ruling includes wider explanations of point and meaning of each of these conditions. In the ruling made on 22 December 2009 by the board of Civil Case Division of the Supreme Court of Lithuania in the case No. 3K-3-587/2009 it has been explained, that the prerogative right of JSC shareholders to buy the shares of other shareholders has to be applied equally in case, when shares are being sold to the other shareholders of the same company. The court noted that this prerogative right, stated in the Part 1 Article 47 of Law on Companies can not be abolished in the Statutes of the company. In the ruling made on 21 December 2009 by the board of Civil Case Division of the Supreme Court of Lithuania in the case No. 3K-3-576/2009 it was spoken regarding the responsibilities of the participant of the legal person under the obligations of the legal person, the conception of insolvency specified in the Clause 1 Part 3 Article 60 of the Law on Companies. When the legal person can not execute the obligation regarding the unfair actions of the participant of the legal person, the participant of the legal person is responsible in accordance with the obligation of the legal person with its own property subsidiary. This rule should be applied in the cases, when under the decision made by the general meeting of the shareholders of the joint stock company, the decision to pay dividends is being made and they are paid in violation of the requirements of the law, set in the Clause 1 Part 3 Article 60 of the Law on companies. The insolvency concept included into this norm does not have to be interpreted analogically to the company's insolvency concept which is included into the Companies' bankruptcy law, because its purposes are different. For this reason it can not be justifiable situation, when in case of present unexecuted monetary obligations of the company to other creditors under the obligations, which execution terms are expired, the shareholders of the company make a decision to pay and pay the dividends, denying the underlying creditors' rights. The court has established a presumption: if the company at the moment of making a decision to pay the dividends had monetary obligations, which are overdue, it can be stated that the company was insolvent. 6 Court judgements of the Republic of Lithuania

7 INSURANCE LAW In the ruling made on 23 February 2010 by the Supreme Court of Lithuania in the case No. 3K-3-78/2010 it was identified that because of the accident which was made because of the respondent's fault, the plaintiff insurance company, which had insured its civil responsibility, paid to the aggrieved the insurance payment total LTL, therefore the plaintiff asked to adjudge it from the respondent, who was driving a car being drunk and violated the road rules. The court noted, that in the examined case the lower instance court had to check if the civil responsibility insurer at the moment of paying the insurance pay to the third person (to the insurer of the aggrieved person), properly executed the duty to collaborate, if took care of execution of economical damage obligation, if required reliable evidences of damages. In other words, the court had to check if the amount of damage paid by the plaintiff to the third person (insurer) is reasoned. If it is found that the insurer did not carry these duties, and referred to the documents of damage scope estimation, which are contradictory, do not ground or reliably and really do not prove the extent of the real damage, there occurs the reason to decrease the requested sum under the regressive order or to dismiss the regressive claim because the damages are not proved (Article of Civil Code, Article 178 of Civil Process Code). The insurer has the burden of proving that he has made every effort and in collaboration with his own insurer he sought to execute economically his own damage The Supreme Court of Lithuania in the ruling made on 23 December 2009 in the case No. 3K-3-584/2009 spoke regarding the implementation of the regress law in the insurance cases. The court noted, that the system of compensations paid from the state funds for the policemen who became victims because of service is reputed as a kind of state social insurance, because, in some sense the police institutions perform the function of social insurance institutions, therefore according to the analogy should be applied Part 3 Article of Civil Code and it was determined the recourse of the social insurance institutions which paid social insurance benefit to the person who made a damage. On the other hand, the subject which paid the social insurance benefit can execute the recourse to the person who caused the damage only if there is no the responsible insurer. For example, in case, when after starting bankruptcy proceedings and making a decision regarding the end of the company there is no possibility to direct the claim to the Insurer's Office, the recourse to the can be directed to the person who cause damage only following Article 22 of Law on Compulsory Third Party Liability Insurance for Motor Vehicles. In the examined case the bankruptcy proceedings against the respondent of the insurer have been started, the insurance company was recognized as failed and liquidated because of the bankruptcy, but the decision in the bankruptcy case regarding the end of the company has not been made yet, therefore the insurer of the person who caused the damage is still existing, the list of its creditors can be revised and the recourse to the person who cause the damage can not be realized. Court judgements of the Republic of Lithuania 7

8 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: METIDA Law firm of Reda Žabolienė 2010 Business center VERTAS, Gynėjų str. 16, LT Vilnius, Lithuania Tel.: , , fax patent@metida.lt 8 Contacts