snIPpets – January 2013
- Court of Appeal restricts the use of witness gathering exercises in trade mark infringement cases
- Warning for owners of trade marks with a "figurative figleaf of distinctiveness"
- Advocate General advises that registering a CTM should not be a defence to infringement
- 3-D Scrabble Tile: not a sign capable of graphic representation
- Use of a different form of trade mark can still be genuine use
- Yoghurt is Yoghurt
- China trade Mark Practice Note – Retail Services
- English Court flexes its muscles on declarations of non-infringement
- Proposal to make clinical trials less risky and online drug sales safer
- Court of Appeal confirms invalidity of patent for EXELON because it was obvious to resolve racemate using standard techniques
Patents / Competition
Other News: IP Litigation
Changes to Costs Management in IP Litigation
New rules aimed at helping the Courts manage the costs of litigation will apply to IP cases commenced on or after 1 April 2013.
Parties will need to exchange a cost budget covering each stage of the litigation within 28 days of service of the defence and this will need to be signed by a statement of truth. The parties should then try to agree costs budgets but, if this is not possible, the Court will review, make appropriate changes and then approve. This will generally be on the basis of whether the budgeted costs are reasonable and proportionate, taking into account the value of any claim, the complexity of the dispute and wider issues such as public importance or reputation.
The Court will generally then make a costs management order, recording the agreed or approved budget, and manage the case so that it proceeds within the budget. The parties have a continuing obligation to revise a budget, if circumstances warrant it, and get the changes agreed by the other side or approved by the Court. This is important because, when assessing costs after a successful judgment, the Court will look at the last budget recorded in any Court order and will not depart from it unless there are good reasons to do so. Accordingly, disproportionate costs will not be recoverable even if necessarily and reasonably incurred.
The proposals are to be welcomed as a way of keeping litigation costs down. However, litigants will need to get involved in setting the budget and approving how to approach the case in order to keep within the budget as recorded in any court order. The good news is that these changes should mean that there are fewer arguments about costs at the end of a case so successful parties should recover costs from the other side quicker.
EU Consultation on Enforcement of IP Rights
The Commission has confirmed its next steps in consulting on the EU civil enforcement system for IP rights. Since 2010 there has been a public consultation on the IP Enforcement Directive (2004/48/EC), a public hearing on the application of the Enforcement Directive in the digital environment and a conference on the enforcement of IP rights. The Commission now wishes to collect additional data, by way of an online survey, and obtain views on specific issues that have been raised during the consultation process. This information could then be used in a comprehensive assessment of the efficiency and costs of civil enforcement systems.
Amongst other things, the questionnaire asks about the importance of IP enforcement, alternative dispute resolution, the need for launching proceedings in more than one EU jurisdiction, litigation costs, availability of fast and small tracks for litigating IP disputes, obtaining information about IP infringements, interim injunctions, injunctions against intermediaries and corrective measures, including damages.
The deadline for completion of the survey is 30 March 2013. Please let us know if you would like any assistance or advice in providing a response to this consultation.
UK Government announces formation of new IP Crime Unit
The UK business secretary, Vince Cable, has announced the formation of a specialised IP Crime unit within the City of London Police. Members of that force already deal with IP infringements but this formal unit will specialise in targeting copyright infringement and illegal downloading. The government will also run a consumer awareness campaign to educate small businesses and young people on the problems associated with counterfeiting and piracy.
These latest proposals were part of the government's response to the Hargreaves review of Intellectual Property and the force should be set up in 2013.
Both the BPI (the record industry trade body) and the CBI (the UK's leading business organisation) welcomed Cable's announcement and the Government's renewed emphasis on IP enforcement. Others, however, have expressed some concerns about available funding for implementation of the proposals.
Other News: Trade marks
CTM Applications following IP Translator
Following the IP Translator case, reported here, OHIM has been working with National Offices and user associations to find the best way of reflecting the applicants' intention to cover all of the goods/ services including in the alphabetical list of a given class in their CTM applications filed on or after 21 June 2012.
The solution consists of publishing the class heading followed by the alphabetical list of goods/ services of the Nice Classification in the relevant class. OHIM's e-filing system has been adapted to implement this solution.
For applications filed in a non-Office language, the Class heading and alphabetical list of goods/ services have been translated into the second language and will be communicated to the applicants for comments before publication.
Review of Misleading and Comparative Advertising Directive (2006/114/EC)
The European Commission is working towards amending the Misleading and Comparative Advertising Directive with a view to eliminating harmful misleading marketing practices in the business to business sector.
The Commission is aiming to introduce a clearer definition of misleading marketing practices to capture more practices and also to introduce a black-list of the most harmful practices. For example, in its recent consultation, the Commission noted the emerging practice of using misleading advertising to offer to extend protection for trade marks in other countries. In fact the trader only offers a listing in a directory because trade mark protection can only be granted by official bodies.
The Commission also intends to clarify the rules on comparative advertising, in particular its relation with certain IP rights. The Commission has highlighted the use of a competitor's trade mark in comparative advertising as one particular area for clarification based on the jurisprudence of the Court of Justice (eg in the L'Oreal v Bellure case).
Other News: Copyright
UK Government Reforms of Copyright
The UK Business Secretary, Vince Cable, has announced proposals to amend UK copyright legislation and, in particular the exceptions to copyright infringement. The aim is to allow people to use copyright works for various reasons without permission from the copyright owner and to update the exceptions for education, research and the preservation of materials.
The Government has been consulting on its proposals through the process of the Hargreaves Review. In his report in April 2011, Professor Ian Hargreaves concluded that "The UK's current system is falling behind what is needed, especially in the area of copyright" and recommended that the UK needed "an approach to exceptions to copyright which encourages successful new digital technology businesses both within and beyond the creative industries". The current proposals are the Government's response to the report and are in line with the Hargreaves recommendations.
The proposed changes are set out in the IPO press release as follows:
- Private copying - to permit people to copy digital content they have bought onto any medium or device that they own, but strictly for their own personal use such as transferring their music collection or eBooks to their tablet, phone or to a private cloud;
- Education - to simplify copyright licensing for the education sector and make it easier for teachers to use copyright materials on interactive whiteboards and similar technology in classrooms and provide access to copyright works over secure networks to support the growing demand for distance learning handouts for students;
- Quotation and news reporting - to create a more general permission for quotation of copyright works for any purpose, as long as the use of a particular quotation is "fair dealing" and its source is acknowledged;
- Parody, caricature and pastiche - to allow limited copying on a fair dealing basis which would allow genuine parody, but prohibit copying disguised as parody;
- Research and private study - to allow sound recordings, films and broadcasts to be copied for non-commercial research and private study purposes without permission from the copyright holder. This includes both user copying and library copying;
- Data analytics for non-commercial research - to allow non-commercial researchers to use computers to study published research results and other data without copyright law interfering;
- Access for people with disabilities - to allow people with disabilities the right to obtain copyright works in accessible formats where a suitable one is not already on the market;
- Archiving and preservation - to allow museums, galleries, libraries and archives to preserve any type of copyright work that is in their permanent collection which cannot readily be replaced; and
- Public administration - to widen existing exceptions to enable more public bodies to share proactively third party information online, which would reflect the existing position in relation to the use of paper copies.
The Government will, so far as legally possible, prohibit licensors from contractually overriding the exceptions. The IPO will also publish a number of notices to clarify aspects of copyright law.
The private copying exception has perhaps generated the most comment and aims to bring copyright law into line with the practical reality of what many individuals are already doing. By doing this, the Government is hoping to boost respect for copyright laws. Some rights holders have, however, argued that this exception should be combined with a levy applicable to blank media and copying devices in order to compensate rights holders for the harm imposed on their revenues. The Government disagrees and has argued that there will be minimal if any harm to rights holders so a levy is unnecessary.
The Government wants to introduce the changes en bloc by October 2013.
New EU Commission moves to modernise copyright in the digital economy
The European Commission also announced on 5 December 2012 its two stage plan for modernising the copyright framework and ensuring that it is still fit for purpose in today's digital context: "The Commission will work for a modern copyright framework that guarantees effective recognition and remuneration of rights holders in order to provide sustainable incentives for creativity, cultural diversity and innovation; opens up greater access and a wider choice of legal offers to end users; allows new business models to emerge; and contributes to combating illegal offers and piracy".
2013 Stakeholder Dialogue
A structured stakeholder dialogue will be launched at the start of 2013 to work to address the following issues: cross-border portability of content, user-generated content, data- and text-mining, private copy levies, access to audiovisual works and cultural heritage.
The discussions will explore the potential and limits of innovative licensing and technological solutions in making EU copyright law and practice fit for the digital age. Intended topics are fostering cross border online access and the portability of services; user generated content and licensing for small-scale users of protected material; audiovisual sector and cultural heritage institutions; text and data mining. This process will be jointly led by the Single Market and Digital Agenda teams (the latter generally considered to be more sympathetic to technology giants than content and rights-holders). The Commission will take stock of the outcome of the dialogue by December 2013. It is intended to deliver effective market-led solutions but does not disregard legislative reform.
Decision-making in 2014
This will include the completion of the relevant market studies, impact assessment and legal drafting with a view to deciding whether to table legislative reform proposals. The following issues will be addressed: mitigating the effects of territoriality in the Internal Market; agreeing appropriate levels of harmonisation, limitations and exceptions to copyright in the digital age; how best to reduce the fragmentation of the EU copyright market; and how to improve the legitimacy of enforcement in the context of wider copyright reform.
Based on the outcomes of this process the Commission will decide on the next steps to take.
Communication to the Public
There has been a lot of recent discussion on what can constitute a "communication to the public" under Article 3(1) of Directive 2001/29/EC (the "InfoSoc Directive"). For example, there has been the Premier League cases, the UK Meltwater Case, which is due to be heard by the Supreme Court in 2013 and the TV Catchup case, which the CJEU heard in November 2012.
In the case of Nils Svensson, Sten Sjögren, Madelaine Sahlman, Pia Gadd v Retreiver Sverige AB (Case C-466/12), the Swedish Court has now referred important questions to the CJEU on whether linking to websites can constitute an infringing communication to the public. In addition, the reference asks if restricted access to the linked content (e.g. subscription only) can make a difference and whether there is a legal distinction between linking and framing. Finally, the CJEU has been asked whether Member States can expand the meaning of "communication to the public" to cover more than is set out at Article 3(1) of the InfoSoc Directive.
We shall continue to monitor and report on this important case.
EU Consultation on the Protection of Trade Secrets
The EU has launched a consultation on the protection of business and research know-how.
The Consultation acknowledges that know-how is often the only way that businesses have to protect the results of their research and innovative efforts but concerns have been raised about the effectiveness of the associated legal protection. The differences between legal systems across the EU also make it difficult to protect against misappropriation in cross-border business and the Commission is concerned that this may dissuade the sharing of business information with business partners across the region.
The Consultation is in the form of an online questionnaire and the deadline for any response is 8 March 2013. A report of the results will then be made publicly available.
Please let us know if we can be of any assistance in preparing a response to this consultation.
Other News: Patents
EU: Unitary Patents and Unified Patents Court forging ahead
The EU is forging ahead with its proposals to create a unitary EU patent ("UP") and Unified Patent Court for dealing with disputes. Despite criticism and uncertainty, the EU Parliament has paved the way for the new system to be put in place by April 2014.
In our Autumn 2012 edition of Innovate, we reported on the compromise reached in the Summer on the location of the proposed EU Unified Patents Court ("UPC"). The Central Division of the Court of First Instance will be located in Paris, with specialist divisions located in London (chemistry, pharmaceuticals and life sciences) and Munich (mechanical engineering). There was also controversy surrounding the UK government's insistence that Articles 6-8 of the draft Unitary Patent Regulation were to be removed. The fear was that the Court of Justice of the EU ("CJEU") would be determining issues of substantive patent infringement law when it is not a specialist patents Court, which would cause unnecessary delays and increased costs. On the other hand, others had expressed concern that the deletion of the controversial Articles would render the Regulation incompatible with Treaty of the European Union making it susceptible to later challenges.
Despite these continuing uncertainties, Commissioner Barnier announced on 19 November 2012 that the EU Council had reached a compromise position on the proposals and the Council of Ministers endorsed the position on 10 December 2012. This confirmed the removal of Articles 6-8 and the inclusion of a new Article 5 stating that the law of infringement is the national law applicable to the patent. The day after, on 11 December 2012, the European Parliament voted in favour of the package of proposals (creating the unitary patent, translation regime and unified patent litigation system).
Earlier on 11 December 2012, the Advocate General had also rejected Spain and Italy's legal challenge to the translation regime for the proposed unitary patent, which will see validated patents in the language in which it was granted (only French, English or German). Spain and Italy had argued that the use of the enhanced cooperation procedure to forge ahead with the proposals without their involvement was a misuse of the EU Council's powers. The Advocate General rejected all of their claims and, although this is a non-binding opinion, it is widely anticipated that the CJEU will follow-suit when it gives its decision this year.
How it will work in practice
Once the system is in place, it will be possible to apply to the EPO in Munich to obtain a single patent with unitary effect across all participating member states (currently the EU without Spain and Italy). There is, however, no obligation to follow this route so it will still be possible to apply in Munich for a bundle of national rights or to apply to a national patent office for a patent covering only that country. Translation costs should be reduced for unitary patents, however, as applications only need to be translated into French, English and German.
Unified Patent Court
The proposals include transitional arrangements so, for 7 years after commencement, infringement or revocation proceedings may still be brought before the national courts. Ultimately, however, the UPC will have exclusive jurisdiction over infringement and validity questions regarding Unitary Patents.
The UPC will be divided into a Local, Regional and Central Divisions and a Court of Appeal. Every Member State can ask to have a Local Division and, if there are more than 100 patent cases per annum over 3 years, there may be more than one Local Division in a particular country, up to a maximum of 4. Two or more Member States can also join together and form a Regional Division. The Local or Regional Divisional courts will hear patent infringement cases if the infringement took place or was threatened in that member state or if one of the defendants is located there. They will also hear counterclaims for revocation, although these can be passed to the Central Division.
The Central Division will hear infringement cases if the defendant is located outside of the EU as well as applications for declarations of non-infringement. The Court of Appeal will be located in Luxembourg.
There are still uncertainties surrounding the proposed system. In particular, it is still unclear the extent to which referrals can be made to the CJEU on the interpretation of the law on infringement. This concern hasn't been removed altogether by the deletion of Articles 6 - 8 of the Regulation. Spain and Italy may also decide to change their position and join the system now that it is fast becoming a reality.
Many patent practitioners are also concerned that the recent changes have been rushed through without full consideration of their implications. Others are critical that the legislation is deeply flawed and the proposals will be prejudicial to SMEs rather than achieving a more-efficient system for dealing with patents across Europe. Equally, some big industry players had urged the European Parliament to reject the system for creating legal uncertainly and providing a forum for increased patent troll activity.
Despite the continuing uncertainties and criticisms, the EU has pressed ahead with the proposals. The EPO President, Benoît Battistelli, has stated that "the European Union is to be congratulated on this decision, which clears the way for the completion of the European patent system with a unitary patent and a Unified Patent Court, which we have been waiting for in Europe for 40 years".
The agreement establishing the UPC is expected to be signed on 18 February 2013 and will enter into force on the earliest of 1 January 2014 or after the UK, France and Germany and 10 other states ratify it. Whilst the ratification process will provide another opportunity for objection and for member states to delay implementation (or for the UK, France or Germany to effectively veto it), the EU appears confident that it can start to issue EU-wide patents by April 2014.
We wait and see how the system will work in practice and whether it will, in fact, make dealing with European patent issues cheaper and easier.
New designation for Patent Claims
With effect from January 2013, all Patents claims (including SPC's ) will be given a new designation "HP". Accordingly, instead of the current "HC 13 C01234) for Chancery claims, the claim number will be HC 13 C01234.
This change is intended to make it significantly easier to obtain accurate data about the number of patent claims started in the UK in each year as well as electronically identifying these cases. This will be necessary if and when the draft agreement on a Unified Patent Court (UPC) becomes effective.
However, it is expected that it will still be necessary to review the HP cases to establish:
- how many patents were in issue;
- whether there is a revocation counterclaim or anything else that might be characterised as a “patent action” in other parts of Europe,
- whether other patents are added into the claim later, and
- whether any application for interim relief was made.