Congress Gothenburg Plenary Session Question Q192: Acquiescence (tolerance) to infringement of Intellectual Property Rights Tuesday, October 10, 2006 (15.05 17.00) Chairman: Klaus HAFT (Germany) Assistant Reporter General: Dariusz SZLEPER (France) The panel consists of Mr. FETTERLEY (USA), Chairman of the Session, Mr. Klaus HAFT (Germany), Chairman of Working Committee Q192, Mr. Ari LAAKKONEN (UK) and Mr. Rogelio NICANDRO (Philippines), Co-Chairs of Q192, Mr. Carles Prat MASIP (Spain), Secretary of Q192 and Mr. Dariusz SZLEPER (France), Assistant to the Reporter General and responsible for Q192. Mr. FETTERLEY opens the session. Mr. SZLEPER gives an introduction into the background of the question and into the history of its development in AIPPI. He also presents a summary of the outcome of the Group reports. AIPPI does not take a position with regard to the necessity or the utility of acquiescence. The purpose of this question is that any regulation to be adopted in a national or multi-national law should be inspired by the proposals of the AIPPI resolution. This is what harmonisation is about. AIPPI is not forcing the national groups to adopt the principle of acquiescence. But if it is introduced it should be based on the result of the fruitful discussions within AIPPI. Mr. FETTERLEY highlights that 70% of the Groups contributed to this question which is a quite high turnout. Mr. HAFT begins with an overview about the resolution. The committee is not proposing the legal effects of acquiescence to countries where this legal principle does not exist. What the committee suggests instead are minimum requirements for those countries where acquiescence is known. The resolution should work as a help for those countries in which this principle is in place. Countries who are planning to introduce it should also benefit from the experience of other countries. The resolution is limited to trademarks and other distinctive rights. The Working Committee could not agree on rules for other IPR. This will need further discussion. For trademarks and other distinctive rights the committee has come up with some minimum requirements and suggestions how the IPR owner can avoid the effects of acquiescence. The scope of acquiescence should in any case not go too far. Finally, the proposed resolution deals with the effect on legal successors and customers. Mr. FETTERLEY invites the plenary for general remarks and questions about the topic. Since no one wishes to speak, he moves to the debate of the Resolution and explains the electronic voting system, the voting device and the rules of debate. 1/7
Mr. HAFT introduces paragraph 1 of the Resolution which explains the limits of Q192. Mr. Paul HARRIS (UK) observes that the term legal effects should be replaced by principle. Mr. HAFT replies that this would be fine with the committee if the amendment is carried. Mr. David PELLISÉ (Spain) mentions that the resolution should not only encompass the acquiescence but also the issue of prescription, since this may have an effect in some countries. Mr. SZLEPER replies that this would go beyond the scope of the question. The Working Guidelines do not include other issues than the tolerance or acquiescence. Mr. Sergio ELLMANN (Argentina) mentions that this may be a translation error in the Spanish version of the Resolution which may be cured later. Mr. Harris formulates a formal proposal to delete the term effects and to replace it by principles. Mr. Kozo YABE (Japan), speaking on his own behalf, expresses his view against the amendment. It may be that, under Japanese law, the amendment would be too broad. The term principle might not be different from legal theory and may still have no effect. Mr. Clark LACKERT (USA) observes that the resolution should also cover unregistered trademarks. Mr. HAFT answers that the term other distinctive signs would also cover unregistered trademarks and geographical indications. Mr. Robert WULFF (Australia) suggests that the term concept instead of principle might be more acceptable. Ms. Béatrice THOMAS (France), in the name of the French Group, supports to take into account the Japanese position, because the amendment would be too vague. Mr. KIM (Korea) proposes on his own behalf to substitute the term effects by consequences. Mr. FETTERLEY puts the suggested amendment to a vote. It is rejected by a vote of 41y/53n/5a. He then invites the plenary to vote on paragraph 1 as a whole. This is passed with a great majority of 85y/15n/0a. Mr. HAFT presents paragraph 2 of the Resolution. Part a) deals with the minimum time required for acquiescence. This should not be shorter than the time provided by national laws. Parts a) and b) should be dealt with separately. Mr. FETTERLEY agrees and invites the plenary for comments to part a). 2/7
Mr. Tom HUNT (Israel) observes that in equating acquiescence with a limitation of time one needs to consider that both are different concepts. He also refers to TRIPS which gives a minimum time for the non-use of trademarks. Mr. HAFT replies that there should be a long period of time before acquiescence comes into effect and that it should not be less than the limitation given. Mr. Fernand DE VISSCHER (Belgium), speaking on his own behalf, observes that there is a small ambiguity in paragraph i) in the word the. It should be replaced by his because it refers to the trademark of the prior right holder. Mr. Bruce MORGAN (Canada) agrees but suggests to use the prior right holder s instead of his. Mr. DE VISSCHER accepts this modification. The French Group states that the term action does not lead to a sufficiently clear identification. Mr. SZLEPER intervenes commenting that the amendment would limit too much the scope of the Resolution because it would only allow the identical use of the prior right holder s trademark or distinctive sign. Mr. Luigi UBERTAZZI (Italy) suggests to replace this term by the infringer s trademark. Mr. de VISSCHER suggests that the word use may not be right but that the phrase should rather read against the alleged infringement of the prior rights holder. Mr. LACKERT adds that, if one amends the phrase, on should also amend the introductory part of paragraph 2 accordingly where the words unauthorized use appear. A member of the Australian Group comments that the words such use would revert back to the unauthorized use. Mr. HAFT suggests to generally replace the word use by alleged infringement. Mr. DE VISCHER notes that the term unauthorized use is more general than the term alleged infringement. Mr. Wouter PORS (the Netherlands) observes that, in a case of a negative declaration, there is no alleged infringement. Mr. LACKERT withdraws his proposal if the term unauthorized use is used throughout the entire resolution. Mr. PORS states that the statute of limitations may not kick in and that in this situation the acquiescence should be considerably shorter in order to console the concerns of Mr. HUNT from Israel. Mr. FETTERLEY puts paragraph 2 a) i) to a vote and it is carried by a great majority with 72y/26n/2a. He then moves to paragraph 2 a) ii). Mr. UBERTAZZI withdraws his proposal. 3/7
The Australian Group suggests to replace the words while being by was. Mr. UBERTAZZI suggests to add the phrase or had the reasonable opportunity to be aware. It would not be right to focus on the subjective circumstances, but rather on the objective situation. Mr. MORGAN speaks against the amendment. In his view the term while being is conjunctive with paragraph i) above. Mr. FETTERLEY takes this as a drafting point. Mr. PORS states that the term presumed takes this into consideration so that the suggested amendment would be superfluous. Mr. UBERTAZZI sees a difference, since a presumption may be rebuttable. Mr. HAFT suggests to avoid further discussions by taking back the second half of the sentence and adopting Mr. UBERTAZZI s suggestion. With this proposal Mr. FETTERLEY puts paragraph 2 a) ii) to a vote and it is carried with a majority of 59y/36n/6a. Mr. FETTERLEY moves to paragraph 2 b). Mr. HAFT explains that this paragraph deals with the minimum requirements for effects of acquiescence. There should be good faith on the side of the user of the younger trademark or distinctive sign, whereby specific conditions should be given for good faith. There is also a need for subjective issues. Finally, a presumption for good faith is needed, since it would be harder to prove those circumstances than the circumstances of bad faith. Mr. UBERTAZZI observes that, in order to be consistent, paragraph ii) should read reasonably possible awareness instead of awareness and paragraph iii) should also contain the words reasonably possible in some form. According to Mr. HAFT this could be accepted by the committee. Mr. Stéphane PAUL (France) comments that one should go back to the original text, because otherwise it would not be possible to have acquiescence. The French Group notes that there should be a high standard for establishing bad faith. The suggested amendment is not in line with what the Working Committee intended. Mr. Kamen TROLLER (Switzerland), speaking on his own behalf, observes that the first line should be worded good faith instead of using a double negation. Mr. FETTERLEY takes this as a drafting point. Mr. DE VISSCHER seconds the French Group and suggests to use the words awareness of existence of a prior trademark instead of awareness of unlawful nature. Mr. PORS confirms that the awareness of a registered trademark is sufficient, because it can easily be established. 4/7
Mr. SZLEPER replies to Mr. DE VISSCHER s comments stating that the Belgian Group in its Group report had expressed a total refusal of the principle of acquiescence. The majority was not in favour of a strong statement. Mr. FETTERLEY puts to a vote the suggested amendment inserting the words reasonably possible in paragraphs ii) and iii). This amendment is defeated with 37y/59n/4a. Mr. DE VISSCHER observes that paragraph 2) speaks about a registration of a later trademark whereas paragraph 4) of the Draft Resolution deals with the use of this trademark. A registration is different from the mere use. He suggests to limit the discussion to the use of a trademark and not to discuss the registration. Therefore, the first half sentence of paragraph 2 b) that application for registration and/or should be deleted. Mr. HAFT replies that both issues should not be confused. The purpose of this paragraph is to define what constitutes good faith. This good faith should be present at a certain time. Mr. Shane SMYTH (Ireland) comments that there should be a comma between distinctive sign and registration. Mr. HAFT rejects this proposal, since the phrase only refers to a distinctive sign registration. Mr. WULFF suggests to use the wording application for registration of a trademark or other distinctive sign [registration]. Mr. SZLEPER reminds the plenary that there was consensus in the Working Committee to define a precise moment at which good faith needs to be present and that this is an argument in favour of the current draft. This moment should be the application for a registered trademark. Mr. FETTERLEY puts the amendment of Mr. DE VISSCHER to a vote. It is defeated by a small majority of 49y/51n. Mr. FETTERLEY then moves to the amendment suggested by the Australian Group. Ms. THOMAS states that the moment should be the application for registration and/or the registration and that it is important to know at what time the good faith needs to be present. Mr. HAFT comments that the registration is not in the hands of the applicant. Mr. UBERTAZZI observes that there are two different situations. The one situation covers the application of a registered trademark. In this case, the application is the decisive moment. The other situation deals with signs which are not registered. Here the commencement of the use is critical. The moment should be either the application or the commencement of the use. Therefore, the word and should be deleted before commencement. Mr. NICANDRO reaffirms that and/or is the proper wording, because both could happen at the same time. Mr. UBERTAZZI objects stating that the use is later than the registration. The time of the application and the use happen at different times. Mr. HAFT once more states that and/or should be kept, because both can coincide. 5/7
Mr. FETTERLEY asks the plenary to vote on the deletion of the word and/ in the second line of paragraph 2 b). This amendment is defeated with a majority of 27y/66n/7a. Mr. Hans HAHN (South Africa) raises as a drafting point to replace the word whereby. Mr. FETTERLEY puts the amendment of inserting and/or registration to a vote. This is also defeated with a majority of 29y/67n/5a. Upon further vote paragraph 2 b) is adopted with 67y/20n/13a. Mr. HAFT then explains the contents of paragraph 3. Its purpose is to define minimum requirements for avoiding the effects of acquiescence. A respective letter may be sufficient if no legal action is taken. Paragraph 3 is adopted with a great majority of 88y/4n/8a. Mr. HAFT presents paragraph 4 of the Draft Resolution. It describes the scope of the effects of acquiescence and the benefits for third parties. They need a clear definition in order to avoid that they become too broad. The introductory part of this paragraph lists the effects whereas parts a) to c) comprise limitations of these effects to make them as narrow as possible. Mr. Istvan GÖDÖLLE (Hungary) observes on behalf of the Hungarian Group that part c) is too specific. It should be worded in a more general way and take into consideration larger and smaller countries. He proposes a wording like country or specific geographical area. Mr. HAFT replies that, if only one geographical area is covered, this should not be extended to other areas. Mr. PORS states that also tradenames which may be limited to small areas should be covered. Mr. FETTERLEY asks for a vote on the amendment suggested by the Hungarian Group to insert the words country or before specific geographical area in part c). This amendment is rejected. Ms. THOMAS refers to decisions of the ECJ regarding the regional scope of Community trademarks and suggests to insert in the beginning of part c) the words and for the nonregistered distinctive sign Mr. SMYTH comments that the exclusion of registered trademarks would not be understandable. Upon request for a vote by Mr. FETTERLEY the amendment is rejected with a clear majority of 19y/81n. Upon a further vote paragraph 4 is adopted with a clear majority of 80y/16n/5a. Mr. DE VISSCHER mentions as another drafting point to use the words unauthorized use in order to be coherent with paragraph 2. Mr. HAFT explains paragraph 5 of the Draft Resolution. It deals with the succession of the benefits to the successor of the rights. Otherwise, a sale of the business would not be 6/7
possible. He also clarifies that it only relates to the successor of the business but not to the assignment of single rights. Upon vote paragraph 5 is accepted with a clear majority of 81y/15n/4a. Mr. HAFT explains the purpose of paragraph 6. The benefits of the acquiescence should also be extended to immediate customers of the beneficiary. Since there was no general consensus as to how far this extension should reach, it was limited to the immediate customers. Mr. PAUL observes that the trademark owner should, however, be able to object to a sale of the goods in other countries or other geographical regions, even it is to the immediate customers of the beneficiary. Mr. SZLEPER states that this situation is already considered by reference to paragraph 4. Mr. Fetterley asks for a vote on paragraph 6 and it is accepted with a great majority of 76y/18n/6a. Mr. HAFT moves to paragraph 7. This deals with situations in which e.g. the younger trademark or the goods for which it has been used are slightly modified. If the parties cannot agree upon the applicability of the acquiescence, there should be the possibility of a court decision. This paragraph is adopted without further discussion by a great majority of 83y/15n/2a. Paragraph 8 shows that the Working Committee did not deal with validity issues of the later right or the effects of acquiescence on other IPR. These questions remain open and should be studied further. This paragraph is adoped unanimously. Mr. FETTERLEY puts the entire Draft Resolution to a vote of the plenary. It is carried with a great majority of 84y/9n/7a. Mr. FETTERLEY expresses his thanks to the plenary and closes the session. 7/7