The team is joined by GuestKats Mirko Brüß, Rosie Burbidge, Nedim Malovic, Frantzeska Papadopolou, Mathilde Pavis, and Eibhlin Vardy
InternKats: Rose Hughes, Ieva Giedrimaite, and Cecilia Sbrolli
SpecialKats: Verónica Rodríguez Arguijo (TechieKat), Hayleigh Bosher (Book Review Editor), and Tian Lu (Asia Correspondent).

Friday, 28 November 2014

Love the treatise, but what about those indices?

One thing that tends to happen when IP Kittens become hoary IPKats is that we do less and less hands-on legal research. This is particularly so when it comes to researching an issue in a multi-volume treatise. We become so reliant on talented young legal kittens that gradually the very tactile sensation of putting hand to the pages of a multi-volume treatise becomes a forgotten experience. Because of this, I had a real shock this week when I found myself standing in front of a shelf-full of volumes comprising the iconic treatise, McCarthy on Trademarks and Unfair Competition. Bereft of any available research help at the very moment, I sought to examine several basic trade mark topics to get the kind of overview that only the McCarthy treatise can provide.

To do so, I immediately turned to the treatise’s indices: as great as was my expectation, so great was my disappointment. I simply was unable to find index entries that could reasonably take me to the relevant volume and sections. For those Kat readers who might not be familiar with this treatise, be assured that it is regarded as a leading (if not the premier) treatment of U.S. trade mark law. In its binder/loose-leaf format, it spans a number of binders (forgive this Kat if he forgets the exact number). The detail devoted to topics is astounding, leaving the reader with the feeling that maybe the author is providing more information on the topic than is necessary (although I am sure that others will disagree on this).

What is striking is the comparison between the first volume of the treatise, published over 40 years ago (a copy of which this Kat proudly maintains in his office) and the sheer scope of the current format. And therein lies the problem: whereas this Kat easily navigated that earlier form of the treatise from over 40 years ago, its current size makes usable indices a must. However, the scant indices provided were simply not up to the task. The result, this Kat spent a number of unnecessary hours simply trying to figure out where was the best place(s) to look in the treatise to learn more about the topics of interest.

This Kat can hardly be the first reader of the treatise who has felt the frustration due to inadequate indices. Further, as an author of a modest one-volume treatise, he recognizes that the preparation of indices is the task of the publisher and not the author. And so the question: why? A couple of answers come to mind. The first is cost, especially of the manpower needed to pigeon-hole in the indices a burgeoning number of topics within existing index rubrics. This is especially so since the treatise is a “must have” in any trade mark law library. Users will buy the treatise whatever the quality of the indices. Secondly, in light of the fact that there appears to be an electronic version that is available (where one can in effect self-index topics of interest), perhaps it is a way of trying to nudge readers to migrate to the electronic version. Whatever the reason, this Kat’s experience with the indices left an unpleasant taste in his mouth about the commitment of the publisher to provide the reader with a quality experience with the product.

More importantly, however, this Kat has a renewed appreciation for the great work that his legal Kittens do in trying to research challenging trade mark topics in the face of such substandard indices.

Never mind the Oreos and Black Friday: here's a reader's cry for trade mark help

On the whole, this Kat enjoys all that is best about US culture and has few problems with it. Yes, there are exceptions. He sees no basis for importing Black Friday into a country that has no tradition for it and no Thanksgiving immediately preceding it, and he is definitely not enthusiastic about Oreos -- a biscuit (cookie, if you prefer -- he doesn't mind) that is a grey squirrel, displacing many of the more subtle domestic biscuit species and diminishing their markets. The receipt of an email mentioning Oreos on Black Friday was not therefore likely to please him overmuch. That said, the reference to Oreos was quite a respectable one since it provided the context for a reader's query which is in need of a crowd-sourced response from readers of this weblog. She writes:
Thinking about advertising and the horrifying discovery that YouTubers don’t make videos of themselves eating Oreos just for our light entertainment, do any IPKat readers know of any recent cases where trade mark owners have challenged unauthorised use or inclusion of their signs in an artistic or literary work (particularly television/film), either on the basis of trade mark legislation or passing off/false endorsement? 
Or do they perhaps know of any cases that might shed some light on whether unauthorised placement in such works can, in and of itself, constitute use for the purpose of keeping a trade mark registration alive?
This Kat sees some exhaustion of rights issues looming large, not to mention malicious falsehood actions where the portrayal of the trade marked product is effectively defamatory of it. However, he isn't going to leap in at this stage since he is curious to know whether there has been much in the way of litigation.  He recalls the skirmish between Unilever and the far-right British National Party over the inclusion of an IP-protected Marmite jar in one of the latter's political broadcasts but is pretty certain that it never reached court.

Readers, it's up to you! Please post your answers below or email to the IPKat here.

The eating of Oreos on YouTube here, here, here and here
Deep-fried Oreos: competition for deep-fried Mars bars?
Oreos: addictive to rats here
The Oreo Cat here

Where in the world ...? Mercks clash over law governing coexistence deal

It is only a short time since this Kat thundered about the awful consequences of parties entitled to use the same name not getting together to settle their differences by negotiation and mediation rather than litigation. Sadly, even when those parties do get together and sort things out between themselves, there is no guarantee that they will not end up in court as determined adversaries.  One such instance is Merck KGaA v Merck Sharp & Dohme Corp and others [2014] EWHC 3867 (Ch), a Chancery Division, England and Wales, decision of Mr Justice Nugee of 21 November.

Readers may remember that this trade mark spat has already featured several times on this blog. Essentially it is a dispute between two companies called Merck (one German, one American) which once upon a time were the same company, with regard to their respective entitlements to use the name MERCK which has been registered in all sorts of ways as a trade mark. The two Mercks had previously entered into an agreement regulating the use of their respective trade marks throughout the world. However there was some doubt as to the law governing the agreement. First, this blog featured a ruling by the same judge back in February of this year as to whether the question of which law governed the coexistence agreement should be heard as a preliminary issue (answer: yes). Then came a helpful explanation by guest contributor Christian Schalk as to why both companies should be so keen on retaining their right to use the name. The IPKat also ran a readers' poll in which 60% of the unusually round number of 500 respondents opined that the American Merck should give the name back to the German one.

In short, the German Merck ('Merck') owned registered UK and international trade marks for the word MERCK for pharmaceuticals and other goods. In 1932, Merck and its American counterpart ('MSD') struck a deal that MSD would have exclusive use of the word MERCK in the US and certain other countries, leaving Merck with the exclusive right to use the same word in more or less the rest of the world.  So far so good but, in 1943, the US Government decreed that the agreement was an unlawful contract in restraint of trade and ordered MSD not to reserve for Merck any right to use any trade mark adopted by MSD, which now had to obtain approval from the Department of Justice as well as the District Court, New Jersey, if it wished to make any agreement with Merck relating to or affecting its business policy.

In 1955 Merck and MSD entered into an agreement in Germany, regulating use of their respective trade marks throughout the world. Both the US Department of Justice and the District Court New Jersey gave the deal their approval, but that court did not discuss which law governed the agreement. The terms of the agreement were restated in a further agreement in 1970, then further clarified in a letter in 1975.

In this action before Nugee J, Merck alleged that MSD had used its trade mark without consent. At this point the dispute arose as to whether the 1970 agreement and the 1975 letter were governed by German law or by the law of New Jersey, it  being agreed that the governing law of the 1970 agreement and the 1975 letter must be the same as that governing the 1955 agreement. Nugee J therefore had to decide which law governed the 1955 agreement, addressing two questions:
(i) when the US district court approved the 1955 agreement, was it applying US federal law or the law of New Jersey? 
(ii) did the requirement to put the 1955 agreement before the district court for approval mean that New Jersey law was its governing law?
To cut a long story short, Nugee J held, at paras 95 to 97 of a 98 paragraph ruling, as follows:

* while the requirement to obtain a Court order from the District Court in New Jersey demonstrated the existence of a connection with the law of New Jersey, that the transaction as a whole had a connection with German law.

* which was closer, the New Jersey Law or the German? This was  bit of an artificial task since the two were incommensurable, but the connection with German law was "the closer and more real connection" on the basis that the key issue was the substance of the transaction – what the transaction actually did– rather than matters which were "essentially subsidiary and ancillary to the transaction", the requirement of obtaining the approval of the District Court being more relevant to the ability of MSD to enter into the 1955 Agreement than to the agreement's substance.

* the reality of the position was that the 1955 Agreement was a contract made in Germany; its main effect was a grant by a German rights-owner of permission to an American to do things -- something more aptly characterised as a German contract.

The judge also made some fascinating observations concerning the state of American contract law. As he pointed out, if the New Jersey District Court had had to construe the 1955 agreement, it would not have applied federal common law principles: US contract law varied from state to state and there was no nationwide federal contract law available to apply.  If this proposition was correct, the New Jersey court would simply assess the effect of the agreement by reference to its plain language, without applying any particular system of law.

Merpel points out that there were two Merck v Merck rulings by the same judge on the same day, the other being a decision on costs which can be found at [2014] EWHC 3920 (Ch). Here Nugee J had to decide whether it was appropriate in the circumstances for the court to depart from the general rule under the Civil Procedure Rules (CPR r.44.2(2)(a)) that MSD, as the unsuccessful party in these preliminary proceedings, should pay Merck's costs. Ordering MSD to pay 50% of Merck's costs as an interim payment, Nugee J made the following observations:

* in general, it was a salutary principle that those who lost discrete aspects of complex litigation should pay for the discrete applications or hearings which they lost, and should do so when they lost them rather than leaving the costs to be swept up at trial.

* there was no advantage in considering what costs order might have been made in relation to the proper law issue if it had been tried as part of the main trial.

* if Merck's claim ultimately failed, the relevant costs need not have been incurred, but it could equally be said that the costs would not have been incurred at all if MSD had not pleaded that the proper law was New Jersey law.

* neither party had been unrealistic or unreasonable in contending for alternative governing laws -- but that of itself was no reason for not applying the general rule that the unsuccessful party should pay the costs: the mere fact that a reasonable argument with realistic prospects was advanced did not justify departing from the usual consequences if the argument failed.

The IPKat, who thanks Bird & Bird's Peter Brownlow for drawing his attention to the latest round of this litigation, will be watching for further developments, which he will bring to you when he can.

Merpel still thinks MERCK is a dull and unattractive-sounding name, being for English speakers a homophone of murk, and would love to advise one or both of the warring factions to choose a bright new one.

Bird & Bird's summary of this decision here

Bran New Jersey here and here

Thursday, 27 November 2014

Something to read this end-of-year break? Here are a couple of new titles

Legal Innovations In Asia: Judicial Lawmaking and the Influence of Comparative Law, edited by John O. Haley (Affiliate Professor of Law, University of Washington, Professor of Law, Vanderbilt University, among other things) and Toshiko Takenaka (Washington Research Foundation/W. Hunter Simpson Professor of Technology Law, University of Washington School of Law), is the third in the Studies in Comparative Law and Legal Culture series brought out by Edward Elgar Publishing.  According to the book's web page:
Legal Innovations in Asia explores how law in Asia has developed over time as a result of judicial interpretation and innovations drawn from the legal systems of foreign countries.

Expert scholars from around the world offer a history of law in the region while also providing a wider context for present-day Asian law. The contributors share insightful perspectives on comparative law, the role of courts, legal transplants, intellectual property, Islamic law and other issues as they relate to the practice and study of law in Japan, China, Taiwan, Korea and Southeast Asia.
Given the large number of countries that constitute Asia, and the variety of legal systems and judicial traditions which they have nourished, the contributors have given a more representative flavour to this book than the web blurb suggests -- and the book itself really does deliver on its promise of innovations. Islam influences the application of the law, for example, but can it also be established that judicial activism influences the legal application of Islam?

This is not an intellectual property book, but there is a good deal of intellectual property in it. Given Toshiko Takenaka's contribution to patent law in the US and beyond, this is scarcely surprising. The four chapters that comprise Part V of this tome are dedicated to IP, and the pieces on Korea's "transmit rather than create" concept and the prospects of a Thai adoption of the Bayh-Dole Act are well worth a read.

Bibliographic data: Publication date: December 2014. xii + 378 pp. Hardback ISBN 978 1 78347 278 9, ebook ISBN 978 1 78347 279 6. Price US$150 (online price from the publisher US$135). Rupture factor: low. Web page here.


Innovation And Intellectual Property In China: Strategies, Contexts and Challenges, edited by Ken Shao (Professor of Law, University of Western Australia) and Xiaoqing Feng (Professor of Law, China University of Political Science and Law, Beijing), is another well-pitched Edward Elgar Publishing title, which will appeal to anyone who wants that mid-range information which is not too detailed, too long or too historical in its content (there was a time when this author feared that all China IP books would be seriously out of date by the time they were published, given the speed at which law, practice and governance evolve in China and the slow pace at which quality English texts emerged from the production process -- but that time is thankfully largely past). Incidentally, from Graham Dutfield's foreword to Peter K. Yu's clever chapter on the international enclosure of China's innovation space, the book keeps up a fairly fast pace: ideas, explanations, facts, principles, problems just keep tumbling out at the reader.  The chapters are best appreciated if the reader doesn't read straight through but pauses between them for thought.

Says the web-blurb:
China is evolving from a manufacturing-based economy to an innovation-based economy, but the delicate context behind this change has not been properly understood by foreign governments, companies and lawyers [or by many Chinese ones, Merpel ventures to suggest]. This book is an insightful response to ill-conceived notions of, and mis-assumptions regarding, the Chinese innovation economy. It represents an effort to marry a variety of “insiders’ perspectives” from China, with the analysis of international scholars.

With contributions from leading authors - including Dr Kong Xiangjun, President of the Intellectual Property Tribunal at the Supreme People’s Court of China - this book is the first comprehensive response to a highly controversial and largely under-developed field of inquiry. It seeks to unveil and understand the complexities and challenges that confront China’s innovation economy, setting out the cultural and historical context, the strategies that form the basis for this evolution, and the measures China has at its disposal to protect intellectual property. ...
This Kat was unable to identify the illustration on the front cover, which you can see at an angle if you look closely at the image above.  Can any arty reader assist?

Bibliographic data: publication date December 2014. xiv + 266 pp. Hardback ISBN 978 1 78100 159 2, ebook ISBN 978 1 78100 160 8. Price US$125 (online from the publisher $112.50). Rupture factor: small. Web page here

Aldi and the likelihood of consumer confusion: a lesson in self-interest

Sadly this Kat, as is well known to readers of this weblog, is not the world's most talented modern linguist. Accordingly he will occasionally grapple with a foreign language text but generally in order to be baffled by it. However, there are times when actions -- legal actions at any rate -- speak louder than words and times when judicial decisions transcend all barriers to communication. One such decision is yesterday's ruling in Case T-240/13 Aldi Einkauf GmbH & Co. OHG v OHIM, Alifoods, SA, a ruling which this Kat has tackled in French but with a good deal of help from an electronic translation service.

Might consumers believe
that this is Aldi Cat?
A little over four years ago, Alifoods applied to register as a Community trade mark the rather attractive sign (illustrated above, right) for a wide range of tasty foods and drinks in Classes 29 and 32, plus a long list of services relating to them in Class 35. Imagine their surprise and disappointment when this application was opposed by none other than imitation and lookalike specialists Aldi, citing earlier international and Community trade mark registrations in a long list of Classes, including those on which Alifoods' application was based, for the word ALDI. The ground of opposition was that, given the similarity of the marks and the identity or similarity of the parties' respective goods and services, there was a likelihood of confusion of the relevant consumer.

OHIM's Opposition Division dismissed Aldi's objections. The Board of Appeal dismissed Aldi's appeal and yesterday the General Court affirmed their decision. The decision was a carefully reasoned one, spanning some 79 paragraphs, and appears to have addressed and then rejected every one of Aldi's objections and anxieties. Indeed, the court appears to have thought the Board of Appeal erred in considering that there was any similarity at all between the respective marks.

Merpel is delighted that Aldi is so keen to take the part of the consumer and to ensure that no likelihood of confusion exists, so that no-one should ever venture into contact with Alicante-based Alifoods' products and believe for a moment that they are in any way connected with Aldi.  She is however a little surprised that a company such as Aldi, which has shown what might be considered a cavalier disregard for the likelihood of confusion of consumers and for the cherished intellectual property rights of others, should be such a sensitive soul when even an imaginary threat to its own brand name is concerned.

The IPKat expects that Aldi will appeal, because it is cheap and easy to do so, and that the result will remain the same. He also notes that there is another pretty Alifoods logo knocking around (illustrated, right)) and wonders whether there is any connection?

Earlier Katposts on Aldi's, er, robust treatment of the goodwill of others here, here and here
More on Alifoods here.

Wednesday, 26 November 2014

From Earls Court to High Court: when litigation is far from Ideal

Left to oneself and without any knowledge of law, the typical sentient human being, being of sound mind and average judgement, might be prepared to assume that, when one business has been using its name since 1908 and another has been using the same name since 1920, it would be difficult to establish nearly a century later that the use of the name by one of them might infringe the trade mark rights of the other.  However, when it comes to the extension of business activities to the internet, it is easy to see how one business might seek to use that facility as a stick with which to beat the other.  In England and Wales we have seen a couple of examples of previously acquiescent co-users of the same name coming to quite unnecessary blows. One is Reed Executive plc v Reed Business Information plc [2002] EWHC 1015 and [2002] EWHC 2772 (Ch) in which the late and much-loved Pumfrey J lamented the existence of "vanishingly small" damage in litigation that cost the parties a fortune and left them in pretty much the identical position to that before which they started suing (though a good deal the poorer). Another unfounded action was Pitman Training Ltd & another v Nominet UK & another [1997] EWHC Ch 367, in which the real dispute was between two companies that shared the name "Pitman" because they were originally the two halves of the same business.

The latest example of this malady is to be found in IPC Media Ltd v Media 10 Ltd [2014] EWCA Civ 1439, is a Court of Appeal for England and Wales ruling of Lord Dyson MR, Lord Justice Kitchin and Lord Justice Bean, which came out while this Kat was Down Under.

The Ideal Home magazine was originally published in 1920.  From around 1965 its owners, IPC, sold a range of home interest products through that magazine through special offers to its readers. In 2006 IPC secured the registration of the words IDEAL HOME as a trade mark for retail services in class 35. Later, in 2009, IPC launched an online shop, the "Ideal Home Shop". In the same year Media 10 purchased the business of the Ideal Home Show -- a popular event that had been in existence since 1908. Unsurprisingly, since they were run by different businesses, the Ideal Home Show had no connection with the Ideal Home magazine.

In 2011 Media 10 created the Ideal Home Show Plus website and, in May 2012, launched the Ideal Home Show Shop on that website. This triggered proceedings in 2012 in which IPC maintained that Media 10's activities in offering online mail order retail services under the name Ideal Home Show infringed its registered trade mark under Article 5 of Trade Mark Harmonisation Directive 2008/95 (=  the Trade Marks Act 1994 s 10). Media 10 denied infringement, counterclaiming that, in so far as the trade mark had encompassed its activities, its use was liable to be prevented by the law of passing off and its registration was thus contrary to Article 4(4) of the Directive (= section 5(4)(a) of the 1994 Act).

At trial John Baldwin QC [in a decision noted here on this weblog] dismissed both IPC's claim for infringement and Media 10's counterclaim: while there was some confusion between the businesses, it was of little practical consequence since as one was running a show and the other a magazine. What's more, he said, the sale of home interest goods by either party under the Ideal Home name was sufficiently in the middle of the spectrum between the respective core businesses for neither party to be able to succeed against the other in a passing off claim [at that time Merpel wanted to know why no-one told IPC Media not to be so silly as to bring this action in the first place and why the parties couldn't sort out a sensible coexistence agreement for their mutual benefit. To her this looked like an attempt to use the court as a convenient forum for venting a bit of spleen].

Undeterred by Merpel's comment, IPC appealed and Media 10 cross-appealed.

IPC's appeal turned on whether the use by Media 10 of the name Ideal Home Show in relation to internet retail services was liable to have an adverse effect upon the functions of its registered trade mark, in the light of the very many years during which the words Ideal Home had been used in connection with the parties' respective businesses.

Media 10's cross-appeal turned on whether, in his assessment of the attack on the IDEAL HOME mark, the judge had been required to consider a notional use of the trade mark separate and distinct from the context of the Ideal Home magazine.

As Merpel predicted, both the appeal and the cross-appeal were very properly dismissed. Kitchin LJ delivered judgment for the court and there were no great surprises:

IPC's appeal

* the trial judge was entitled to make the findings that he did, and to reject the infringement claim. The confusion that occurred while the parties just ran a show and a magazine respectively had been more in the nature of an administrative inconvenience. There was indeed a possibility of some confusion between the parties' online retail businesses, but that was the inevitable consequence of the use by two separate entities of the same or closely similar names in relation to such similar businesses.

Elvis's Ideal Home ...
* IPC's business was run on a scale and in a manner that didn't generate any reputation or goodwill separate or in any way different from the enormous reputation which the parties had enjoyed in the name Ideal Home as a result of their respective core activities. Consequently, when used in relation to online retail services, the words "Ideal Home" denoted what they had always denoted, sending out a message that those were the services of the entities or entity responsible for the show and the magazine. The likelihood of confusion and the nature of that confusion were just the same as they would have been had the parties begun to offer such retail services at exactly the same time. This was therefore one of those rare cases in which the allegedly infringing use of the mark was honest. It had not, and would not have, an adverse effect upon the essential function of the registered trade mark.

Media 10's cross appeal

* Media 10 totally failed to establish that normal and fair use of IPC's IDEAL HOME mark for online retail services could ever be prevented by an action for passing off -- and the judge had been right to say so.

* the expansion of IPC's business into the provision of online retail services was an entirely natural step for it to take, and the use of the IDEAL HOME trade mark for such services had never denoted that they were those of the entity responsible for the Ideal Home Show and no-one else. Indeed, in the context of home interest services, the name "Ideal Home" had always signified the business of the show or the magazine, or both of them.

Some folk, including this Kat, have argued that mediation is the best way forward when seeking to resolve disputes of this nature, where long-standing businesses have activities that cast shadows over one another's sphere of interest. Mediation doesn't always work, particularly since it may depend upon the common sense, good judgement and ability to visualise a shared future. In cases like this, not to mention Reed v Reed and Pitman v Nominet, Merpel would like to see the party initiating the proceedings take some sort of sanity check, and/or be made to issue a statement to shareholders, explaining what it was trying to do, and why. That might stop some of these disputes getting to trial, or beyond.

Wednesday whimsies

Far, far too slow. Readers of this weblog will recall that this Kat has been complaining endlessly about the absolutely unjustifiable amount of time that it takes before a contested Community trade mark application gets as far as a ruling on appeal to the General Court. Well, it seems that he is not the only person concerned.  "Justice Denied or Simply Delayed? Consequences of Excessive Delay at the EU's General Court" is the title of an article by Tom Jenkins and Gavin Bushell (both of Baker & McKenzie) which has just been published in the Journal of European Competition Law & Practice (JECLAP). It does not deal specifically with Community trade mark or indeed intellectual property issues, though it does mention that the average time to trial in IP cases is 18.7 months.

Not just a canary in the cage? Last week fellow Kat Neil composed a post, "The Consumer Protection Function of Trade Marks: Just so?", to which this Kat added some bold red comments of his own about the heresy of consumer protection being an objective of trade mark law.  The Kats' Commune has now received news of a further paper, "The Image of the Consumer in European Trade Mark Law", by the distinguished pair of Oxford academics Graeme Dinwoodie and Dev Gangjee. This paper, which forms a chapter of a forthcoming Hart publication The Image(s) of the Consumer in EU Law (Leczykiewicz and Weatherill, eds), can be accessed via SSRN here.  According to its abstract:
This chapter ... [explores] the role of the average consumer in European trade mark law. There is in fact a variable concept of the consumer within European trade mark law and the chapter first sets itself the task of mapping these variations. We suggest that for structural reasons European trade mark law may be compelled to work with a differentiated concept of the consumer. However these variations should be approached relationally, with an awareness of the points of difference and their basis. In particular, we suggest that most efforts by courts to identify or construct consumers and the marketplace they inhabit are blended exercises that are part-empirical and part-normative. Explicitly recognising this blend will, we believe, enable a richer debate about the role played by the consumer in European trade mark law and the evidence or considerations to which courts might have regard. It also allows us to explore whether trade mark law in Europe ought — either to achieve its own objectives or to contribute to the broader European project — to adopt an approach to the consumer that is more empirically or normatively grounded as required by the legal context and whether different national courts are (despite different methodological traditions that survive European harmonisation) converging on a common approach to the ‘trade mark consumer’.

Peppa Pig again.  Rebecca Gulbul's little post this morning on Peppa Pig and the embarrassment of one Gabriella Capra (translated as "Gabriella Goat") has been something of a revelation. Not only has it attracted well over 1,000 page views in the few hours since it went live, but it has been the subject of discussion of several of this Kat's professional colleagues who, until now, had been rather coy about their attachment to Peppa Pig. There's not much comfort for Ms Capra, though. This Kat has been directed to this item in the Guardian on how the articulate piglet's merchandise looks set to top the US$ 1 billion mark this year. Incidentally, notes the erudite Merpel, there appears to be something of a cultural allusion in the choice of the name Peppa: "Pig and Pepper" is the title of chapter 6 of Lewis Carroll's children's grown-ups' classic Alice's Adventures in Wonderland.

Bat and ball.  Spanish football club Valencia, whose contested application to register a bat logo as a Community trade mark was the subject of a guest post by Sophie Arrowsmith, have apparently had a rethink concerning their application.  According to a short snippet in this morning's Mail Online, the star team had applied for a "copyright for a new design" which, following DC Comics' objections, they now have "no plans to use".

Attaché case. The UK government has published the independent IP Attache Evaluation Report: Programme Review, which it commissioned in order to evaluate the performance of the British IP attachés who, stationed in Brazil, China, India and South East Asia, are intended as a means of working with local IP enforcement and generally assisting British businesses abroad. This assessment is drawn from a wide range of sources including existing IPO management information, the evaluator’s own surveys and 1-2-1 interviews with business and officials who have had direct contact with the network. Responses have been good, with respondents reporting that 79% of interactions were “valuable”. However, it's disappointing that only 21% of respondents have made contact with or been made aware of the attachés for “pre-emptive protection advice”, given the principle that an ounce of prevention is worth a pound of cure. A Katpat goes to Michael Lin for spotting the review, which you can read in full here.

Ashley Roughton
Many thanks! The IP Publishers and Editors Lunch 2014 took place yesterday in the London offices of law firm Bircham Dyson Bell. The venue had an experimental air to it, as the eating was mainly done in one room while the serious content -- Ashley Roughton's keynote address and the subsequent discussion -- took place in another.  Most of those who registered managed to attend, and those who didn't were cancelled out by last-minute registrants and people who just turned up.  While it's a safe bet that most of the people who attended had little or no interest in Supplementary Protection Certificate law at their point of arrival, this topic suddenly became more exciting when it turned out to be the catalyst for some counterplay between Mr Justice Arnold and the Court of Justice of the European Union.

Next year's event will be on Tuesday 24 November, at a venue to be confirmed, and the keynote speaker will be Peter Groves -- General Editor of the Business Client Handbook, Ipso Jure blogmeister and editor of Motor Law.

Can you be liable for third-party copyright infringements if you offer password-free free internet access? New case referred to CJEU!

Smart idea?
Via Katfriend and copyright aficionado Tom Ohta (Bristows) comes the news that a new depressing exciting case has just been referred to everybody's favourite court, ie the Court of Justice of the European Union (CJEU). 

It is Case C-484/14 McFadden, a reference for a preliminary ruling from CJEU-loving Member State Germany, seeking clarification as regards the liability of internet service providers (ISPs) for third-party copyright infringements.

While sadly no particular details are (yet) provided on the Curia website (with the sole exception that the application was lodged on 3 November last), more information is available via invariably helpful EU Law Radar, which explains what is at stake here:

"If a person offers [free] non-password-protected access to the Internet [this is what apparently Mr McFadden deliberately did, so that everybody could connect to his shop's WLAN], and an unknown user passes a piece of copyright-infringing music over that Internet connection [this is what happened four years ago], then can the person offering the Internet access be absolved of legal liability on the basis that he is but a ‘mere conduit’ under [Article 12 of] the EU’s ‘E-Commerce’ Directive 2000/31/EC [read in light of Recital 42 in the preamble to this very directive]?"

One the main issues is whether Mr McFadden (1) could be actually considered an ISP and, if so (2) could be protected by the Directive’s ‘safe harbors’ (just to borrow from the language of the US Digital Millennium Copyright Act). 

The main obstacle in this respect may be that the internet connection he provided was free, while Recital 17 in the preamble to the ECommerce Directive states that the notion of information society services "covers any service normally provided for remuneration". 

This Kat notes however that Recital 18 in the preamble to this very directive clarifies that “information society services … in so far as they represent an economic activity, extend to services which are not remunerated by those who receive them”. The CJEU has recently clarified the meaning of Recital 18 in its judgment in Case C-291/13 Papasavvas, a case concerning online defamation which the Court decided on 11 September last. There, the CJEU held that information society services extend, in so far as they represent an economic activity, to services ‘which are not remunerated by those who receive them [but are for instance remunerated by income generated by advertisement, as it was the case there], such as those offering on-line information or commercial communications’. That interpretation corresponds to that of the concept of ‘services’ within the meaning of Article 57 TFEU, which also does not require the service to be paid for by those for whom it is performed.

This Kat understands that one of the reasons why Mr McFadden provided password-free free internet access was indeed to drive traffic to his website. So, if ads were displayed there, this might be useful to argue that he got some remuneration from those, and therefore he could be considered an ISP ...  

Coming and going when you please?
Perhaps time to change the rules ...
Anyway, the unofficial translation of the questions referred by Landgericht München I has been also provided by EU Law Radar:

1. When read together with Article 2(a) of the E-Commerce Directive and Article 1(2) of Directive 98/34/EC as amended by Directive 98/48/EC, is the phrase ‘normally provided for remuneration’ in Article 12(1) of the E-Commerce Directive to be interpreted as meaning that the national court must determine whether the person who claims to be a service provider normally provides the service for remuneration; or does it mean that suppliers in the market normally provide this service or comparable ones for remuneration; or that the majority of this or comparable services are offered for a fee?

2. Is the phrase ‘the provision of access to a communication network’ in Article 12(1)(a) of the E-Commerce Directive to be interpreted as meaning that to conform with the Directive that it is significant that the connection is successful when access to a communications network (for example, the Internet) is provided?

3. When Article 2(b) of the E-Commerce Directive refers to ‘provider’, and is read together with Article 12(1)(a), then does the latter provision cover the situation where the information society service actually being provided is a publicly available WLAN, or is for example some other form of promotion or advertising also required?

4. When Article 12(1)(a) of the E-Commerce Directive states a ‘service provider is not liable for the information transmitted’, is this to be interpreted as excluding any claims for injunctive relief, damages, and the recovery of warning costs and court fees, incurred in relation to the copyright infringement concerned, against the access provider or in any event in respect of the initial copyright infringement?

5. Is Article 12(1)(a) of the E-Commerce Directive, when read together with Article 12(3) to be interpreted as meaning that Member States cannot allow a national court from issuing an injunction in proceedings brought against the access provider, whereby the access provider must desist from enabling third parties access via a specific Internet connection to a specific copyright-protected work made electronically available on demand on file-sharing sites?

Surely looking for some inspiration
for his new password
6. Is Article 12(1)(a) of the E-Commerce Directive to be interpreted as meaning that in the circumstances of present case, Article 14(1)(b) applies mutatis mutandis to an injunction?

7. Is Article 12(1)(a) of the E-Commerce Directive when read together with Article 2(b) to be interpreted as meaning that the claims against a service provider are exhausted where a service provider is any natural or legal person who provides an information society service?

8. If the answer to Question 7 is in the negative, then which additional criteria can be required of a service provider when interpreting Article 2(b) of the E-Commerce Directive?

9(a). Taking into account the protection of fundamental legal right of intellectual property, which derives from the right to property (Art 17(2) EU Charter) and the provisions in Directives 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society […], and Directive 2004/48/EC on the enforcement of intellectual property rights […], and taking into account freedom of expression and the freedom to conduct a business in Article 16 of the EU Charter; is Article 12(1)(a) of the E-Commerce Directive to be interpreted as meaning that this does not preclude a decision by the national court in the main proceedings, if that decision makes the access provider liable for costs, and prohibits him from allowing third parties access via a specific internet connection to a specific copyright-protected work or parts thereof, via internet file-sharing sites made electronically available on demand, leaves the access provider free to adopt whichever technical measures in order to comply with this order?

9(b). Does this also apply when the access provider can only really comply with the injunction if he shuts down the internet connection or uses password protection or checks every ongoing communication to see whether that particular copyright-protected work is illicitly exchanged once again, and that this is clear from the start, and does not become apparent only for the first time in the context of enforcement proceedings or sentencing proceedings?

A while ago in a very similar [if not the same altogether?] case a German court ruled that “Private users are obligated to check whether their wireless connection is adequately secured to the danger of unauthorized third parties abusing it to commit copyright violation”. 

This Kat is by no means an expert in German copyright law, but: even if someone like Mr McFadden did not qualify for safe harbor protection under the German equivalent of the ECommerce Directive because he could not be considered an ISP, wouldn't a conclusion of this kind result, to say the least, in transforming secondary infringement into some sort of strict liability regime?

We’ll see what the CJEU says. Certainly, if the CJEU ruled that someone who offers password-free free internet connection may be in principle liable for third-party copyright infringements, this would have far-reaching implications. The most immediate one might be having to forget your free, password-free Starbucks Wi-Fi connection ...

Peppa Pig peppered with claims from Gabriella Capra

I would like to thank Chris Torrero for sending us the following story

The Italian news last week concerned one of Peppa Pig’s cartoon friend, Gabriella Goat. Gabriella Capra, a 40 year old Italian business woman decided to sue the producers of the Peppa Pig cartoons for defamation and has asked for a sum of €100,000. 

In one episode of the series, the Pig family visit Italy where they meet the Goat family. Peppa befriends their daughter Gabriella Goat. In the English episode, the goat character introduces herself by saying: “Hello. I am Gabriella Goat. Baaaaa” while in the Italian translated version, she says: “Buon giorno, sono Gabriella Capra. Baaaaa”, the word "goat" being directly translated into Italian as Capra. Gabriella Capra says that since the episode with Gabriella Goat was aired, she has been ridiculed by her friends and has been left ‘damaged’. 

The Peppa Pig series is one of the most popular in the cartoon realm at the moment. The series is produced by the British company Astley Baker Davies (ABD) whose animation studio is based in London. The Peppa Pig episodes are broadcast in 180 countries, one of which is Italy. 

Gabriella Capra contacted a consumer advocacy group in Milan called the National Foundation of Consumers (NFC), which filed a suit against ABD. NFC said that Ms Capra had been “innocently exposed to public hilarity”. They believe that she has a claim against ABD because the Peppa Pig shows are not preceded by a disclaimer stating that similarities with real life people are only mere coincidences.

Ms Capra is not a world famous personality, so it is unlikely that she was the inspiration behind the producers’ creation of Gabriella Goat. Apart from having a similar name to the character when translated in Italian, there are no similarities between Ms Capra and the cartoon character. This is in contrast with one Peppa Pig episode where Peppa meets the Queen’s cartoon character, which was clearly inspired by the Queen. No claims were ever issued against ABD for that use.

The success of the Peppa Pig series has made the Gabriella Goat character more easily noticeable to her peers. This is a similar problem which has been faced by men called Harry Potter who have led quiet lives until the phenomenal success of the JK Rowling books made their names not only more noticeable, but also the subject of trade mark protection.

There are also people who seek the fame of already famous characters. Some name their children after popular characters from books or the cinema while others have changed their name to be that of their idols, such as Laura Skywalker Matthews, which you can read in my earlier post here.

In this case, it appears that Ms Capra was simply a victim of unfortunate circumstances. We’ll have to wait and see how she gets on with her claim.

Ps: For those whom it may interest, Peppa Pig is a growing brand, and there is now even a Peppa Pig World theme park in Hampshire!

Tuesday, 25 November 2014

ECR-Award - BGH on the registrability of acronyms

A recently published decision by the German Federal Supreme Court (BGH) concerning the registrability of acronyms as trade marks (case reference I ZB 64/13, "ECR-Award", of 22 May 2014, see here in PDF) was quite widely reported (here, here, here) by German legal commentators since it indicates that the highest German court in civil matters is more generous than both the DPMA and the German Federal Patent Court when it comes to deciding on the registrability of a trade mark.
In its decision, the BGH held that, when deciding whether a trade mark consisting of an acronym lacks distinctiveness and is therefore not registrable as a trade mark, it was crucial to establish whether the relevant consumers regarded the sign itself as a descriptive term or as an acronym.  So far so good. However, now for the more 'contentious' part: when determining the view of the average consumer or the "understanding of the relevant circle" (Verkehrsverständnis), the judges took the view that this could not be determined by reference to the specification covered by the mark, but solely by reference to the sign itself.
Efficient consumer response?!
Applying this to the case and trade mark in question: "ECR-Award" covering services in class 41 (in the German original: "Organisation und Durchführung von Preisverleihungen für Manage-mentleistungen, insbesondere im Bereich Efficient Consumer Response, die intelligente Kooperation zum Nutzen der Konsumenten"), the BGH took the view that (German) consumers would not be in a position to understand the acronym "ECR" as a acronym of the English language term "Efficient Consumer Response" without reference to the class 41 specification covered. The judges explained that the average consumer was usually not aware of scope of a trade mark specification and could therefore not conduct an analysis of the goods and/or services covered. Consequently, the trade mark "ECR-Award" disagreed with the DPMA and T was not lacking distinctiveness for the services covered in class 41 and disagreed with the differing assessment by the DPMA and the German Federal Patent Court, which had both had done exactly that - found that the mark ECR-Award was lacking distinctiveness for the services covered in class 41.
Merpel cannot help but feel for the Examiners. How are they meant to assess distinctiveness if they cannot refer to the specification.  Consumers may not be aware of the exact specification as filed but they are faced with the services in question as offered under the trade mark, which should in an ideal world reflect what is covered by the specification, nein?  Is Merpel overcomplicating things and/or missing the point?

Wah-the-ley on Wah-way: a matter of Opinion

He is Melchior Wathelet
too ...
The Opinion of Advocate General Wathelet  in Case C-170/13 Huawei Technologies Co. Ltd v ZTE Corp., ZTE Deutschland GmbH has already attracted a lot of attention, not least because some good souls have rather forgotten that, while the Advocate General is a member of the Court of Justice of the European Union (CJEU) and his rulings, always influential, are adopted by the CJEU in an estimated 75-80% of intellectual property cases, his Opinions are not actually the rulings of the court. Be that as it may, it's not every day that Europe's senior court takes a look at the enforcement of patents in any situation, let alone when they are in that sensitive area of essential technical standards that all market participants will want, indeed need, to use in order to comply with the standard in question.

The questions before the CJEU are as follows:
"Does the proprietor of a standard-essential patent who informs a standardisation body that he is willing to grant any third party a licence on fair, reasonable and non-discriminatory terms abuse his dominant market position if he brings an action for an injunction against a patent infringer although the infringer has declared that he is willing to negotiate concerning such a licence?

... But this is the actual AG 

is an abuse of the dominant market position to be presumed only where the infringer has submitted to the proprietor of a standard-essential patent an acceptable, unconditional offer to conclude a licensing agreement which the patentee cannot refuse without unfairly impeding the infringer or breaching the prohibition of discrimination, and the infringer fulfils his contractual obligations for acts of use already performed in anticipation of the licence to be granted?

If abuse of a dominant market position is already to be presumed as a consequence of the infringer’s willingness to negotiate:

Does Article 102 TFEU [Treaty on the Functioning of the European Union, of which Article 102 deals with abuse of a dominant market position] lay down particular qualitative and/or time requirements in relation to the willingness to negotiate? In particular, can willingness to negotiate be presumed where the patent infringer has merely stated (orally) in a general way that that he is prepared to enter into negotiations, or must the infringer already have entered into negotiations by, for example, submitting specific conditions upon which he is prepared to conclude a licensing agreement?

If the submission of an acceptable, unconditional offer to conclude a licensing agreement is a prerequisite for abuse of a dominant market position:

Does Article 102 TFEU lay down particular qualitative and/or time requirements in relation to that offer? Must the offer contain all the provisions which are normally included in licensing agreements in the field of technology in question? In particular, may the offer be made subject to the condition that the standard-essential patent is actually used and/or is shown to be valid?

If the fulfilment of the infringer’s obligations arising from the licence that is to be granted is a prerequisite for the abuse of a dominant market position:

Does Article 102 TFEU lay down particular requirements with regard to those acts of fulfilment? Is the infringer particularly required to render an account for past acts of use and/or to pay royalties? May an obligation to pay royalties be discharged, if necessary, by depositing a security?

Do the conditions under which the abuse of a dominant position by the proprietor of a standard-essential patent is to be presumed apply also to an action on the ground of other claims (for rendering of accounts, recall of products, damages) arising from a patent infringement?"
The 103 paragraph Opinion is well summarised by the following Curia media release:
According to Advocate General Wathelet [click here for guidance on how to pronounce this name], the proprietor of a standard-essential patent may be required, before seeking an injunction against a company that has infringed that patent, to make that company a specific licensing offer

That applies where the proprietor of the patent is in a dominant position and has made a commitment to the standards body to grant third parties a licence on fair, reasonable and nondiscriminatory terms and where the infringer is ready, willing and able to enter into such a licensing agreement

Huawei [click here for guidance on how to pronounce this name], a Chinese telecommunications company, holds a European patent regarded as ‘essential’ to the ‘Long Term Evolution’ (LTE) standard developed by the European Telecommunications Standards Institute (ETSI). The LTE standard relates to next generation — that is to say, fourth generation — mobile phone communications. Anyone complying with the standard inevitably uses the patent owned by Huawei, which is why that patent is categorised as ‘essential’. Huawei is a member of ETSI and notified the patent to that institute. Huawei also made a commitment to ETSI to grant licences to third parties on fair, reasonable and non-discriminatory (FRAND) terms.

Among the products marketed in Germany by ZTE, a group of Chinese companies, are base stations with LTE software and ZTE is therefore unavoidably making use of Huawei’s patent. Since discussions between Huawei and ZTE regarding the possibility of concluding a licensing agreement on FRAND terms were unsuccessful, Huawei brought an action for infringement against ZTE before the Landgericht Düsseldorf (Düsseldorf Regional Court, Germany). By that action, Huawei seeks an injunction prohibiting continuation of the infringement, an order for the rendering of accounts, recall of products and damages. According to ZTE, the action for a prohibitory injunction constitutes an abuse of a dominant position, since ZTE is willing to negotiate a licence.

The German court has referred a number of questions to the Court of Justice. It is seeking to ascertain whether — and, if so, in what circumstances — an action for infringement brought by the holder of a patent which is ‘essential to a standard developed by a standards body’ (standard essential patent (SEP)) against a manufacturer of products which comply with that standard constitutes an abuse of a dominant position for the purposes of EU competition law where the patent holder has made a commitment to grant licences on FRAND terms.

... Advocate General Melchior Wathelet first notes that the Landgericht Düsseldorf has proceeded on the assumption that Huawei holds a dominant position. However, the Advocate General points out that the fact that a company owns an SEP does not necessarily mean that it holds a dominant position and that it is for the national court to determine, on a case-by-case basis, whether that is indeed so [burden of proof: the AG appears to take the view that there is a rebuttable presumption that the holder of an SEP enjoys a dominant position. Merpel wonders what standard of proof the patent holder will have to achieve in order to rebut a presumption based on a right that excludes others from use of an essential piece of technology].

That said, the Advocate General proposes that the questions referred by the Landgericht Düsseldorf should be answered as follows:
Where the proprietor of a standard-essential patent (SEP) has made a commitment to a standards body to grant third parties a licence on fair, reasonable and non-discriminatory (FRAND) terms, it constitutes an abuse of a dominant position for that proprietor to request corrective measures or to seek an injunction against a company that has infringed the SEP ...  where it is shown that the SEP holder has not honoured its commitment even though the offending company has shown itself to be objectively ready, willing and able to enter into such a licensing agreement [this initiative on the part of the patent proprietor being an action which, if successful, may cause the products and services supplied by the offending company to be excluded from the markets covered by the standard].

Precise amounts only, please
[However, all is not lost for the SEP holder] In order to honour that commitment and to avoid abusing a dominant position, the SEP holder must, before making a request for corrective measures or seeking an injunction, alert the infringer to the infringement at issue in writing, giving reasons, and specifying the SEP concerned and the way in which it has been infringed by that company, unless it has been established that the alleged infringer is fully aware of the infringement [This Kat imagines that these conditions, even cumulatively, won't be much of a burden: the SEP holder is doing this in any event if he is suing]. The SEP holder must, in any event, present the alleged infringer with a written offer of a licence on FRAND terms and that offer must contain all the terms normally included in a licence in the sector in question, including the precise amount of the royalty and the way in which that amount is calculated [Merpel can't imagine that the term "precise amount" is intended to exclude an amount that is contingent on a formula that enables a precise amount to be calculated on the basis of variables that are not quantifiable at the point at which the licence is offered or concluded: is this right?].

The infringer must respond to that offer in a diligent and serious manner. If it does not accept the SEP holder’s offer, it must promptly present the latter with a reasonable counter-offer, in writing, in relation to the clauses with which it disagrees. An application for corrective measures or for an injunction does not constitute an abuse of a dominant position if the conduct of the infringer is purely tactical and/or dilatory and/or not serious [the use of terms such as "purely tactical", "dilatory" and "not serious", if adopted by the CJEU, is likely to attract further references for rulings as to how those terms should be understood and applied, since it is unlikely that national courts will have identical notions as to what they mean].

If negotiations are not commenced or are unsuccessful, the conduct of the alleged infringer cannot be regarded as dilatory or as not serious if it requests that FRAND terms be fixed either by a court or by an arbitration tribunal. In that event, it is legitimate for the SEP holder to ask the infringer either to provide a bank guarantee for the payment of royalties or to deposit a provisional sum at the court or arbitration tribunal in respect of its past and future use of the patent [this seems sensible but begs the question as to what happens when the dispute between SEP holder and would-be licensee relates specifically to the quantum of the royalty and therefore, by implication, to the quantum of the guarantee or sum provisionally deposited].

Nor can an infringer’s conduct be regarded as dilatory or as not serious during negotiations for a licence on FRAND terms if it reserves the right, after entering into an agreement for such a licence, to challenge before a court or arbitration tribunal the validity, use and essential nature of that patent [no surprises there].

In taking legal action to secure the rendering of accounts, the SEP holder does not abuse a dominant position. It is for the national court in question to ensure that the measure is reasonable and proportionate.

In bringing a claim for damages in respect of past use of the patent, for the sole purpose of obtaining compensation for previous infringements of its patent, the SEP holder does not abuse a dominant position [it is difficult to see how this might not be the case, unless the terms deemed to be FRANDly for other licensees include some sort of waiver of the right to collect damages for previous infringements].
How has the Opinion been viewed? According to a Bristows media release, it offers something for everyone:
Advocate General Wathelet has proposed that the European Court adopt a ‘middle-course’ between that taken by the German courts and that of the European Commission. The Advocate General accepts that seeking an injunction on a FRAND-encumbered patent can amount to an abuse of dominance. The Advocate General also made a number of ‘implementer-friendly’ statements in line with the European Commission’s approach. ...

However, Advocate General Wathelet’s approach is more nuanced than that of the European Commission. For example, he recognises that an implementer’s approach to negotiations may be dilatory and that seeking an injunction in such circumstances is legitimate. He also states that it is legitimate for the patentee to ask the implementer either to provide a bank guarantee for the payment of royalties or to deposit a provisional sum at the court or arbitration tribunal in respect of its past and future use of the patent. This requirement will go some way to ensuring that implementers do not abuse the negotiation process. Overall, then, neither Huawei nor ZTE will be too disappointed with the result, given that both companies own technologies and implement them.”
Europe Online magazine regards the Opinion as recommending that Huawei will have to jump through a number of legal hoops if it is to succeed in its action, which sounds a bit melodramatic. Viewed from the US-based Courthouse News, the Opinion is a shot across the bows for "patent trolls and tech inventors", who are warned that a court may not be the first port of call when it comes to pursuing infringers.

The IPKat notes that we are departing from the well-trodden path of essential facilities doctrine, in terms of vocabulary if not also in terms of principle. A word-search of the Opinion shows 34 appearances of the word "essential", while "facilities" gets no mention at all.

Merpel is impressed that both parties to the underlying litigation -- the SEP holder and the defendant in infringement proceedings -- are Chinese. Who says the Chinese aren't taking patents seriously?

The CJEU's ruling usually emerges around six months after the Advocate General's Opinion is published, so we should all know next summer what we can expect.

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