The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Sunday, 10 December 2017

Sunday Surprises

Vacancies

"I've found my place."
IP Lecturer 
At the London College of Fashion -- High Holborn
Check here for more information.

(Dutch) student traineeship (in IP and other fields)
At De brauw
See more information here.

PhD position
At CIIR - Center for informations- og innovationsret 
CIIR welcomes applications within all areas of information and innovation law. 
Further information can be found here

PhD in Fashion and Law 
The challenge of balancing commercial interests with sustainability in the fashion industry
At the Northumbria University
See further information here.

The Branco Weiss Fellowship -- society in science
“Apply with a groundbreaking research idea to secure financial support for up to five years, working at an academic institution of your choice anywhere in the world” -- The complete information can be found here

IP News


Recognizing the need to further advocate for strong IP protection and harmonization as Brexit negotiations unfold, the INTA Board of Directors approved a Brexit position paper at its meeting on 7 November last. 

In the position paper, INTA submits that both the EU and UK should “support, promote, and safeguard the following core principles for brand owners and right-holders during the negotiations as well as when ‘Brexit’ becomes effective: minimal disruption of trade, minimum costs, maximum retention of rights, and maximum transparency and legal clarity.”

Data Protection Framework in the offing in India - Government seeks public comments

The Government of India is seeking comments on a draft White Paper on a proposed Data Protection Framework on principles to be considered for data protection in India to address the increasing concerns on secure digital transactions and data privacy.

Earlier this year, the Government constituted a Committee of Experts under the chairmanship of former Supreme Court Justice Shri B N Srikrishna to suggest a draft Data Protection Bill. The proposed White Paper intends to cover key principles like technology agnosticism and flexibility, applicability to both private sector and government entities, informed consent, data minimization, data controller’s accountability, penalties for wrongful processing and enforcement of data protection framework by a statutory authority.

The deadline for submitting the responses is 31 December 2017 through the Web Form available at here.


Photo courtesy: Qi Cheng.

Role of CJEU post-Brexit to be considered by House of Lords inquiry

The AmeriKat's cousin, the Sand Cat, is as elusive
as understanding what the UK Government
is actually going to do with respect of the CJEU
post-Brexit
The EU Justice Sub-Committee of the House of Lords' EU Committee will consider enforcement and dispute resolution post-Brexit as part of an inquiry launched Wednesday.  The inquiry will focus on whether there is a continuing role of the CJEU post-Brexit and how EU law will be dealt with in national courts.  Written comments are due by Friday, 19 January 2018.

Baroness Kennedy, the Chairman of the EU Justice Sub-Committee, stated that “The evidence that we received from four of the UK’s most senior former judges highlighted the dangers of legal uncertainty post Brexit.".  Those four judges were:
who, on 21 November 2017 gave evidence to the Sub-Committee to help scope out the inquiry into the post-Brexit jurisdiction of the CJEU.  An uncorrected version of the transcript of this oral evidence can be found here.

Baroness Kennedy said that:
“It was apparent that the judges had significant concerns about the operation of ‘retained EU law’ in the UK under Clause 6 of the European Union (Withdrawal) Bill... In addition to concerns about the wide discretion that might be given to the judiciary to take what might be seen as ‘political’ decisions, it is also far from clear that the provisions relating to the interpretation of retained EU law under Clause 6 of the Bill allow for a smooth transition. The Bill was clearly not drafted with a transitional period in mind. It would preclude references to the Court of Justice of the European Union, and not require UK domestic courts to take account of post-Brexit EU law, despite the fact that the UK may continue to be effectively bound by EU law during the transitional period.” 
Lord Thomas
Lord Thomas also raised the influence of the UK in law post-Brexit.  This is one of the issues that the European Law Institute is working on (of which he is a member of the executive committee).  He stated:
"...one of the very big issues that the Committee may wish to think about in due course is how we, in a relatively small jurisdiction set between two very large jurisdictions, the United States and the European Community, will have an influence on the fashioning of the law for this new marketplace once we leave the Community. It is quite a significant issue, because it is inconceivable that being a relatively small country interposed between many other large trading blocs we would have a regime that people would be very happy to go along with. Our better course is to try to influence the other regimes and hope that they produce some kind of overall uniformity.

This is a very, very large topic; it is the future development of our law that is sometimes lost sight of in the debate. We look to the past, but it is equally important to look to the future and how we mould our law, bearing in mind the small size of our jurisdiction in comparison to the United States and Europe."
The inquiry will address the following issues:
  • Whether there could be a role for the CJEU in the UK post-Brexit.
  • How the Government can deal with questions relating to EU law in the domestic courts post-Brexit and during any period of transition (including the potential for divergence between UK law and EU law).
  • The impact Brexit will have on the UK’s ability to influence the development of the law in other jurisdictions including the EU and the United States.
  • The potential impact of excluding the jurisdiction of the CJEU, both on UK domestic law and on securing a workable Withdrawal Agreement and any transitional arrangements under Article 50.
  • Whether anything can be learned from the EFTA Court model, or other alternative models for dispute resolution.
  • The most appropriate method of enforcement and dispute resolution in respect of the Withdrawal Agreement and subsequent partnership arrangements with the EU.
  • If UK citizens should have a direct right of access to any new enforcement or dispute resolution procedures (or whether there should be a reference procedure, as currently exists with the CJEU).
The inquiry was launched prior to Friday morning's announcement of heads of agreement being agreed between the UK and EU negotiators during Phase 1 of the Article 50 negotiations.  Paragraph 38 of the Joint Report  summarizing the agreement states that with respect of rights for citizens established by Union law, "the UK courts shall...have due regard to relevant decisions of the CJEU after the specified date [i.e. at the time of the UK's withdrawal]..." and to "...establish a mechanism enabling UK courts or tribunals" to refer questions to the CJEU on those rights.

The AmeriKat's general feeling about the UK
Government's preparations for a post-Brexit life
Paragraph 91 also states that on civil and commercial maters there needs to be "legal certainty and clarity". It provides that Union law should continue to govern conflict of laws for contractual and non-contractual matters should continue for contracts and damage occurring before the withdrawal date (i.e. Rome I and II Regulations).  Paragraph 91 concludes:
"There was also agreement to provide legal certainty as to the circumstances under which Union law on jurisdiction, recognition and enforcement of judgements (sic) will continue to apply, and that judicial cooperation procedures should be finalised."
This sounds like its pointing to the Brussels Regulation (recast).  But, like with much of the Joint Report, it is what is not being said that is more interesting (and worrying) for us lawyers - be it of the IP persuasion or not.

The AmeriKat does not believe that Friday's announcement will undermine the Sub-Committee's inquiry.  If anything, the agreement at paragraph 38 that the CJEU's case law would continue to be referred to and applied by domestic courts with respect of citizen rights created by Union Law post-Brexit demonstrates the importance of the inquiry.  By analogy, intellectual property rights created by Union law should also be subject to the same fate.  Further, as noted at paragraph 5 of the Joint Report, the agreement was made  "[u]nder the caveat that nothing is agreed until everything is agreed".  As such, the fence posts may well move again and could move in response to the House of Lord's inquiry during Phase 2 of the negotiations.

For us in IP, especially those interested in the Unified Patent Court, the House of Lord's inquiry may be an opportune moment to outline how IP rights owners and users would like to see the operation  and collaboration of the UK's domestic courts and tribunals with those in Europe, including the application of Union law, post-Brexit.

Written evidence can be submitted here
Call of Evidence here
Brexit:  enforcement and dispute resolution inquiry website here
Lords Select Committee website here
Transcript of oral evidence on Jurisdiction of the EU here

Thursday, 7 December 2017

BREAKING: CJEU holds that SPCs cannot be obtained on the basis of an "end of procedure notice" pursuant to Article 3(b) SPC Regulation

The AmeriKat's new tattoo 
Back in July last year right, at the end of the Court's Trinity Term, Mr Justice Arnold referred two questions to the CJEU on the SPC Regulation in Merck Sharp & Dohme v Comptroller-General of Patents [2016] EWHC 1896.   Today, the Court of Justice of the European Union responded to Arnold J's questions in Case C-567/16 holding that an end of procedure notice does not amount to a granted marketing authorization for purposes of Article 3(b).  The AmeriKat summarized the background of the dispute, parties' arguments and referred questions in this post - but for ease she repeats the background for readers below.

The problem and the questions to be referred

What do you do if your patent is about to expire, but despite notice that Member States (MSs) have agreed to grant your marketing authorization (MA) under the decentralized procedure, a MS has not yet taken the step to actually grant it? You still make your SPC application, of course.

What happens after that was subject to a reference to the CJEU (form of questions below).

The SPC Regulation

Nothing makes the AmeriKat happier than SPC law (as far as "legal happiness" goes). For those who have better things to do with their time than to understand the wonderful world of SPCs or to follow the myriad of national and CJEU decisions in this area, the key points are as follows:
  • By law, before a medicinal product can be placed on the market, it requires a MA. Getting a medicinal product to this point cant take upwards to 15 years.
  • By the time a MA for a medicinal product is granted, much of the term of the patent that protects the product will have expired. This means that the effective protection under the patent is insufficient to cover the investment in R&D (see Article 4 of the SPC Regulation).
  • For this reason, a new right - the Supplementary Protection Certificate (SPC) - was introduced by the SPC Regulation in order to address that problem.
  • SPCs provide an additional period of protection - up to a maximum of 5 years - for a product (i) subject to a valid MA at the date of the application (Article 3(b)) and protected by a patent (basic patent) in force at the date of the application (Article 3(a)).
  • National courts and the CJEU have spent many years wrangling with the interpretation and application of the SPC Regulation. 
Oh, why did the SPC Regulation have to
be that clear?  
What's the product?

Atozet is the medicinal product which contains the active ingredients of ezetimibe and atorvastatin. It is used to lower cholesterol. Claim 17 of EP(UK) 0 720 599 (the basic patent) protects a pharmaceutical composition comprising ezetimible and atorvastatin (this was not in dispute). MSD applied for a SPC for the "product" on the basis of this patent for:
"ezetimibe and atorvastatin or pharmaceutically acceptable salts thereof, including atorvastatin as atorvastatin calcium trihydrate". 
The problem was that at the time of the SPC application, there was no granted MA in the UK.

The Facts

MSD obtained a MA and SPC for the mono product - ezetimibe - in 2003. It then obtained a MA and SPC for a combination of ezetimibe and simvastin - in 2004 and 2006, respectively (Merpel was struck by the relevance of this in the decision given that Article 3(c) objections were not in dispute, save for in the Dutch court).

In September 2006, MSD began development of the fixed dose combo of ezetimibe and atorvastatin. However, it encountered formulation difficulties. Seven years later, in September 2013, MSD filed MAs for Atozet in a number of Member States using the decentralized procedure (DCP) of obtaining a MA. MSD designated Germany as the reference Member State (RMS). As the RMS, the German medicines regulatory authority - Bundesinstitut für Arzneimittel und Medizinprodukte - coordinated the approval process, preparing the draft documents and, most importantly, the draft summary of product characteristics (SmPC) on which the other Member States comment. All Member States' respective regulatory bodies need to be happy with the documents before the procedure is closed. Thereafter, once agreement is reached, each Member State has 30 days to grant the MA.

The German medicines authority did not accept that MSD had filed a valid application until 13 February 2014. On 12 September that year - a single day before the patent expired (remember the basic patent has to be in force under Article 3(a)) - MSD applied for its UK SPC at the UK Intellectual Property Office (IPO). However, MSD did not have a granted UK MA. Instead, MSD submitted, with their SPC application, a copy of the end of procedure (EoP) notice from the German medicines agency stating that the DCP had ended with approval. MSD explained that the effect of the EoP notice was that concerned Member States, including the UK, had agreed to grant a MA for Atozet. MSD therefore asked the UK IPO for permission to supplement their application when their UK MA was granted.

Five days later, the UK IPO's examiner said MSD's application did not comply with Article 3(b) because at the time of filing their SPC application, they did not have a valid UK MA. The EoP notice did not satisfy that requirement. The IPO also objected to the application on Article 3(c) grounds. Three weeks later, the UK MHRA granted the MA on 10 October 2014. MSD submitted a copy of the UK MA, together with the first EU MA (from France) and asserted that these documents would rectify any irregularities in the application. The examiner maintained her objections, leading to a hearing in which the hearing officer agreed that Article 3(c) was satisfied but the SPC application fell foul of Article 3(b) which could not be cured under Article 10(3).

The path to a granted SPC under the DCP
The Questions and the Answers

The final form of the questions referred to the Court and the CJEU's answers are set out below:
1. Is an end of procedure notice issued by the reference Member State under Article 28(4) of Directive [2001/83] before expiry of the basic patent to be treated as equivalent to a granted marketing authorisation for the purpose of Article 3(b) of [the SPC Regulation], such that an applicant for [an SPC] in the Member State in question is entitled to apply for and be granted [an SPC] on the basis of the end of procedure notice?  
No - an end of procedure notice issued by a reference Member State in accordance with the DCP is not to be treated as equivalent to an MA.  The natural reading of the word "granted" in Article 3(b) is that the action has to have been completed.  The grant of an SPC is linked to the grant of a MA so an SPC can only be granted if an MA has been granted.  After setting out the specific procedure of the DCP, the CJEU turned to the crux of the issue.  It stated that the adoption of an end of procedure notice under Article 28(4) of Directive 2001/83 represents an intermediate stage in the DCP.  The notice does not have the same legal effect as a "valid" MA.  Although the notice has features of an MA (guaranteeing safety, identifying the product, etc), it importantly does not not permit an applicant to place on the market the medicinal product - an MA does.  This is the "essential feature " of a MA.   
The Court cited Forsgren (C-631/13) on the basis that that Court stated that a patented product may not give rise to the grant of an SPC unless the medicinal product has been granted a MA.  
2. If the answer to question 1 is no: in the circumstances in question, is the absence of a granted marketing authorisation in the Member State in question at the date of the application for [an SPC] in that Member State an irregularity that can be cured under Article 10(3) of [the SPC Regulation] once the marketing authorisation has been granted?
No.  Article 3(b) states an SPC is to be granted "if...a valid authorization to place the product on the market as a medicinal product has been granted".  There needs to be a granted MA in the Member State concerned.  If this condition is not met, then the SPC should be rejected by the relevant MS's authority.  Article 10(3) only relates to irregularities relating to the application for the SPC.  An absence of an MA does not constitute an irregularity of the application - it is "an irregularity in connection with the product, as a medicinal product, not an irregularity in connection with the SPC application."  Essentially Article 10(3) is for curing defects relating to paperwork, not defects relating to the conditions of grant.   
On the strict literal wording of the SPC Regulation, the AmeriKat can understand the reasoning of the Court.  But why should an applicant be penalized because (i) it takes longer to prove the safety and efficacy of a formulated medicinal product and (ii) a national medicines agency's speed may slow the DCP leading to a granted MA? Isn't this time loss exactly why we have an SPC Regulation?  This may be a hangry rant, but the AmeriKat is left searching for the justice of a telelogical approach amongst the black and white interpretation of the drafting of the SPC Regulation in this decision.  Merpel also finds irony in that, seemingly for once, the SPC Regulation is too clear.

Commissioned research opportunity - exhaustion of rights

End-of-term exhaustion of academic Kats
The UK Intellectual Property Office (IPO) has kindly informed us that they are looking to commission research around exhaustion of rights.

As readers are no doubt aware, exhaustion of rights in IP refers to the limits on the rights to control distribution and resale of a good after it has been legitimately put on the market in a specific territory. Once a good has been marketed, depending on the territory, the IPRs (or certain aspects of it) are said to be exhausted. The UK is currently part of a regional exhaustion system, with the region being the European Economic Area (EEA). This means that goods marketed in the EEA cannot be barred from being resold/distributed across member states on the basis of IPRs, but rights holders have the ability to control imports from outside the bloc. (Some recent Kat posts on the topical issue here, here and here.)

As such, the UK IPO, is looking to determine the overall economic and social value of parallel trade arising from the current IP exhaustion regime and how this would vary across the different possible regimes.


This work will encompass multiple research projects with the current proposals looking at: the role of price differentials, sector specific impacts and enforcement impacts.


The IPO would welcome any interest in bidding for this research. Please contact Nirojan Pathmanathan (Nirojan.pathmanathan@ipo.gov.uk) for further details.







Sleepy cat image: Jon Brinn

You snooze (for 40 years) you lose – HABITAT mark (un)enforced in bad faith


Judicial reliance on the principle of bad faith in connection with trademarks can take many forms. A particularly unusual application of the principle recently occurred in a case in Israel, as reported by Kat friend Adar Ortal.

“The District Court of Tel Aviv has ruled in Habitat Ltd. and Avraham Majerowicz vs. CAFOM, Habitat International S.A et al that the trademark HABITAT, registered in Israel in multiple classes more than 40 years ago by a local furniture and houseware retailer, should be cancelled on the ground that it was registered in bad faith, since it was done with the knowledge that HABITAT was an "international mark" that enjoyed "international goodwill." Nevertheless, the District Court ruled that the local retailer will be permitted to continue use of the HABITAT mark in commerce since the holder of the international mark, i.e. Habitat International S.A. and other affiliated companies ("Habitat International"), had acted in bad faith in not seeking to enforce its rights in the mark for over 40 years. In so ruling, the District Court has favored the interest of the parties over that of the public and disregarded the basic notion of likelihood of confusion under trademarks law.

Habitat International is a retailer of household furnishings. It opened its first store under the mark HABITAT in 1964 in London. By 1969, Habitat International had opened eight more stores in the UK and one in Canada and by 1976, it had more than 30 stores worldwide, but none in Israel. Mr. Majerowicz is a furniture retailer who opened a furniture and houseware store in Israel in 1972 under the name "Habitat". In 1976, Mr. Majerowicz sought to register the mark HABITAT in Israel but only then discovered (according to him) that the mark had already been registered by Habitat International in 1973. He thereupon successfully filed a non-use cancellation proceeding against the then-existing registrations. At the time, Habitat International did not file any arguments against cancellation of the mark.

Continuously since 1972, Mr. Majerowicz has used the HABITAT mark in Israel in conjunction with furniture and household retailing activities. On or about 2016, Mr. Majerowicz became aware that Habitat International was contemplating entering the furniture market in Israel under the HABITAT mark. Accordingly, he sued Habitat International, seeking a preliminary injunction on the ground of anticipatory infringement. Habitat International counter-claimed that Habitat Ltd. and Mr. Majerowicz should be enjoined from using Habitat International's well-known mark and that the registration of the HABITAT mark should be cancelled on the ground of bad faith.

In ruling that Mr. Majerowicz had acted in bad faith, the District Court pointed to two major grounds. First, Section 39(a1) of the Israel Trademarks Ordinance [New Version], 1972, provides that "a notice of cancellation of a trademark based on claim that the trademark was registered in bad faith may be submitted at any time". Second, and despite the fact that Habitat International had neither established goodwill nor operated in Israel in 1976 (the year that Mr. Majerowicz filed the HABITAT trademark application in Israel), he was aware of Habitat International and its world-wide operations under the mark. Therefore, the District Court concluded that Mr. Majerowicz had acted in bad faith in registering the mark. It should be noted that the District Court did not set out the test for determining bad faith but rather analyzed the specific facts at hand and then concluded, without more, that they constituted bad faith.

Nevertheless, the District Court ruled, without providing any guidance as to the applicable legal standard, that Habitat International may not enjoin Mr. Majerowicz from using the mark HABITAT in Israel because it is not a well-known mark, nor had it established any goodwill in Israel. Since Habitat International, in bad faith, has not enforced its rights in the mark, it is not entitled to enjoin Mr. Majerowicz from using the mark in Israel, the court concluding as follows:
"Even if it is a legitimate business interest not to enforce trademark rights in Israel whilst there is no business decision to enter into the Israeli market, such decision has its price, especially considering the fact that the defendants had been aware of Mr. Majerowicz's activities in Israel. Such conduct constitutes bad faith and exploiting the [local] trademark, now that it has acquired goodwill by the plaintiffs, constitutes unjust enrichment."
At this stage you might be wondering: what about likelihood of confusion? Did the District Court ignore such a basic notion of trademark law? The answer is "kind of". The District Court noted that "the public's interest should be taken into account but it should not undermine the parties' interests". That said, the District Court asked the parties to seek to reach settlement on the manner of use of the HABITAT mark in Israel. He ruled that if no such settlement is reached within 90 days of the decision, the defendants shall be permitted to use "HABITAT INTERNATIONAL” in their advertising material, and the mark "HABITAT" on the products themselves", while Mr. Majerowicz will be permitted to use the mark HABITAT (in Hebrew). We are already confused… what will happen in practice? If Habitat International registers the mark HABITAT in Israel (since the registration in favor of Mr. Majerowicz will presumably be cancelled), will it nevertheless be disallowed to enforce its rights against Mr. Majerowicz pursuant to the District Court's ruling? This remains to be seen as the District Court's ruling is, to our understanding, being appealed to the Israel Supreme Court.

The upshot is that if you are the holder, or its representative, of a mark used in a number of countries, and you are contemplating entering the Israel market, the instant case might be a bleak peek into your future. That is so, unless you make sure that the mark is not being used or registered in Israel and that you seek to enforce your rights sooner than later.

A final note: This is not the first time that an international brand has sought to enter the Israeli market, only to discover that a local business has already taken over such brand. Examples include the Versace, Saks [Fifth Avenue], and Roots, each of whom has had to confront the "hijacking" of its mark by local businesses.”

Image at top left is by Helen Crook, contributed by Kalory.co.uk and licensed under the Creative Commons Attribution-Share Alike 4.0 International license

Wednesday, 6 December 2017

AIPPI Congress Report 16: Patentability of Computer-Implemented Inventions

The AmeriKat adopting a "wait and see"
approach...until you walk by
The wonderful AusKat, Tom Reid (Accenture), is back with his final report from AIPPI's Congress in Sydney, this time on computer-implemented inventions and the work of AIPPI on this year's resolution.  Over to Tom:  
"Since 1975, AIPPI has taken the view that an invention should not be unpatentable subject matter per se merely because it involves software or is implemented in a computer. In the wake of Alice Corp and other recent judicial and patent office decisions around the world, this difficult topic was again on the agenda at AIPPI’s annual congress in Sydney, resulting in the passing of a further resolution. 
AIPPI has a Standing Committee on Information Technology and Internet, which last year published a useful paper on the patentability of computer-implemented inventions in the US, Japan, Europe, China, Canada, Australia, and New Zealand. The paper makes a macroeconomic argument for an extension of patentability, noting that the services industry is increasingly important to the economies of industrialised countries, and that “developments in the service industry are generally new working methods very often implemented through the use of computer networks such as the Internet”. The paper characterises the policy question as one of “applying the known protection system [ie the patent system] to the economic sector with the strongest growth [ie the service sector, in industrialised countries at least]”. 
But as this year’s resolution recited, that application has in fact been scattered, to the point that none of the US, European, Japanese, Chinese, or Korean patent offices even use the same terminology to describe computer-implemented inventions. 
After reaffirming the principle that patents should be available for inventions in all fields of technology, and that computer-implemented inventions should not be excluded per se, the key tenets of AIPPI’s resolution were as follows:
(a) The eligibility of a computer-implemented invention for patent protection should not depend on the prior art or any assessment of novelty or inventive step. In other words, subject matter eligibility should assessed independently of these other requirements.  
(b) A claim to a computer-implemented invention should pass the eligibility requirement if it defines an invention in at least one field of technology. Whether a claim does so should be assessed on a claim by claim basis, in relation to each claim as a whole. 
The references to a “field of technology” adopt the language of Article 27 of TRIPS and Article 52 of the European Patent Convention. A mooted statement to the effect that a claim should be considered to define an invention in a field of technology only if it makes a novel and inventive contribution to that field of technology was debated, but not adopted in the final resolution. The resolution says nothing further about what it means, in AIPPI’s view, to “define an invention in a field of technology”.

The question therefore remains open. But it is ultimately perhaps important to answer if AIPPI’s goal of international harmonisation of laws is to be achieved. As AIPPI’s study guidelines noted: 
"There is an inherent challenge in providing a definition of the areas of human endeavour which qualify as sources of patentable subject matter. On one view, a “static” definition would frustrate the ultimate purpose of patent law, namely to provide protection for unforeseen, non-obvious subject matter. However, attempts to find a “dynamic” or “open” definition of the scope of patentable subject matter which takes account of this purpose often fail to provide the necessary limitation or boundaries."
The guidelines noted further that patent offices and courts have laboured “without a workable doctrine to underpin the reasoning for their decisions”. 
In the AIPPI 2017 Congress’s host jurisdiction of Australia, a December 2016 government-commissioned review by the Productivity Commission recommended a wait-and-see strategy in relation to public policy on software patents in the wake of two cases, RPL Central and Research Affiliates, which (broadly speaking) followed an approach similar to that in Alice Corp. Wait and see, it seems, is the consensus."

INTA Brand Authenticity Conference (Report 4): Brands, social media and CSR

Packing a punch - leveraging social media to
communicate CSR and generate brand value
With the final report from last week's INTA Brand Authenticity Conference, Alex Woolgar (A&O) reports on final session on a brand's use of social media to communicate their social responsibility initiatives.  Over to Alex: 
"The final session of the conference dealt with the use of social media to communicate on CSR issues. Claus Eckhartt of Bardehle Pagenberg moderated a panel of Adam Garfunkel of Junxion and Michelle Mancino Marsh of Arent Fox
Adam traced the development of brand CSR communications from companies merely saying "trust us", through consumers beginning to ask companies to "tell me" and "show me" their values, and finally to "involve me". In Adam's view, the three key tenets of social media communications in a CSR context are (i) transparency; (ii) communicating innovation; and (iii) creating a sense of community. Adam gave several positive and negative examples of corporate social media engagement. Perhaps most instructive was BP's experience following the Deepwater Horizon disaster in 2010. Twitter users began posting sarcastic tweets using the hashtag #bpcares, and a parody account (@bpglobalpr) was set up. From a legal perspective BP should have been able to have the account suspended (because the account name and bio do not make clear that it is a parody and therefore the account does not comply with Twitter policy). However, to do this presumably would have generated even more negative publicity. From McLibel to the estate of Elvis Presley's recent spat with Brewdog over "Elvis Juice", there are many examples of how heavy-handed application of legal rights can be counter-productive. Adam suggested that perhaps contrary to the first instincts of IP lawyers, brand owners should not seek to control every aspect of their social media output in minute detail, both because of the risk this will backfire, and also because this will reduce the benefits of social media engagement. Adam argued it is good for brands to have a broader community of users independently tweeting positive things about the brand, and flexibility and a sense of humour from employees representing the brand on social media will make a brand appear more engaged, authentic and attractive.

Michelle gave an overview of some legal considerations for brands using social media. "Green" claims or logos must be carefully vetted to avoid misleading consumers and/or "greenwashing". In the US, the Federal Trade Commission (FTC) keeps an eye on communications and claims on social media (and may impose penalties for misleading claims), as do lawyers for (potential) claimants. Linked to this is the importance of ensuring integrity of manufacturing processes and supply chain - Michelle used the example of Nordstrom and JC Penney receiving a $1.3 million FTC fine for erroneously claiming that certain garments were 100% bamboo, when in fact they were 70% rayon. In general, therefore, transparency is best. There are limits to this, however: it is never advisable to disclose details of a proprietary product or process which may later form the basis of a patent application; and brand owners should be cautious about how they communicate seemingly positive developments which may also have hidden drawbacks (e.g. have price cuts been made possible by treating suppliers or employees poorly? If so it is ill-advised to trumpet the positive without addressing the underlying problem). There are therefore benefits to having a social media engagement protocol but, in light of Adam's earlier comments, perhaps this should be as light-touch as possible.

In summary, this guest Kat found the conference to be fascinating and thought-provoking conference. Although there was perhaps some initial scepticism regarding the relative lack of "hard" law, by the end there was general agreement that the bringing together of diverse expertise in the area of brand authenticity was valuable to all. This is an area of great challenge and opportunity for brand owners, and it will require energy and initiative from many disciplines (including lawyers!) to find ways of aligning brands and consumers in pursuit of social and environmental good, as well as the financial bottom line."

AIPPI Congress Report 15: Partial Designs: Full Protection?

The only thing that the AmeriKat is truly
partial to is napping in sunbeams...
Although AIPPI's Sydney Congress seems a distant memory for those now wrapping up in wool coats and battling the winter's darkness, that has not stopped the reports from the conference swinging through.  The latest report is from Daniel Lim (A&O) who details the panel session on partial designs:
"One of the driving goals of AIPPI is improve and promote the protection of intellectual property at both national and international level. As part of this remit AIPPI regularly opines on divergent and complex areas of IP law through the work of its study and standing committees and formal resolutions, with a view to harmonisation of law and practice (where sensible) across different jurisdictions.
Design law is regarded by many as perhaps the least harmonised of the major IP rights, despite its increasing popularity and a storied body of case law, from the early spate of spare part litigation through to Dyson vacuums, Trunki cases and a supporting but significant role in the smartphone/tablet wars.

Accordingly, it was no surprise to see much activity to excite design law enthusiasts at the 2017 AIPPI 2017 World Congress in Sydney, in the form of the launch of a new book edited by Chris Carani, “Design Rights: Functionality and Scope of Protection” born out of the work done on the 2016 AIPPI study question in relation to the requirements for protection of designs, and a very well attended design law panel session focussed on partial designs, pithily titled “Partial Designs: Full Protection?”.

The panel session focused on the increasingly important topic of protection of partial designs, defined by the panel as being “parts(s) of a product less than the whole” – e.g. the handle of a pan (as opposed to the whole pan including the handle). The panel topic was of particular interest to conference attendees given that partial designs formed one of the 2018 AIPPI study committee questions (a fact which itself is a good indicator that this is an important area, worthy of attention).

Moderated by David Stone (Allen & Overy) and featuring Dunstan Barnes (McAndrews, Held & Malloy), Tomohiro Nakamura (Konishi & Nakamura) and Robert Wulff (Griffith Hack), the panel represented a truly international line up of design law expertise, effectively covering the law in 31 countries. The panel gave an overview of the law in relation to partial designs in their respective jurisdictions, with particular focus on 4 key questions: 
  • Can partial designs be protected? 
  • In practice, how can the claimed and disclaimed portions of a partial design be depicted in a design drawing? 
  • Can spare parts be protected? 
  • Can parts (other than spare parts) be protected when invisible in normal use? 
David provided a summary of the position in the EU, noting that partial designs are capable of protection.  They may be depicted by showing just the part, or by showing the whole product and using dotted lines or shading or blurring to indicate claimed and disclaimed portions of the product drawing. Importantly, he noted that an unregistered design right exists in the EU, which allows the right holder to modify the aspects of the design over which protection is claimed in order to reflect the part(s) of their design that have been copied.  
In respect of spare parts, at the level of EU-wide design rights the question that must be asked is whether the part comprises “a component part of a complex product” – if so, then it will only be protectable if it is visible whilst the complex product (which must be capable of being assembled and disassembled) is in “normal use”. In other words there is no protection for the internal workings of a machine. However, David noted that the position in respect of national design laws throughout Europe may differ – some protect non-visible spare parts (France, Germany) whilst others do not (UK, Spain). 
Dunstan noted that in the US, designs are protected in the form of so-called “design patents” and there is no protection for unregistered design rights. Protection is available for partial designs. In contrast to some other jurisdictions which expressly do not allow the use of accompanying text in the application to help describe the design, in the US a short description is in fact a requirement. Such text can be used to describe the meaning of broken lines, shading or other indications in the drawing of what is claimed as part of the design. Spare parts are able to be protected by design rights and, Dunstan noted, there is active lobbying of Congress around this issue.

Nakamura-san stated that partial designs are also capable of protection in Japan, but interestingly noted that (unlike the US or EU) the name of the product to which the design is to be applied will in fact determine the scope of protection – i.e. a registered design for cars cannot be enforced against toy replicas. There is some scope for the protection of unregistered designs through the lens of an unfair competition action or copyright. Spare parts and accessories are capable of protection, whether or not they are visible in normal use. Nakamura-san noted that in Japan, registered designs are often turned to for protection in crowded markets like the auto industry, where it will be difficult to get a patent due to lack of inventive step over the prior art. 
Robert noted that there was a general lack of authoritative Federal Court case law on partial designs and spare parts in Australia (and as someone who formerly practised in Australia I certainly agree!), but that it is the practice of the Australian Designs Office to recognise claims for partial designs (again usually indicated by way of dotted lines or shading). There is no unregistered design right in Australia and Australian copyright law limits the protection for copyright works which are industrially applied to a product (the “copyright/design overlap”). Robert’s view was that the exclusion from infringement of design rights (on policy grounds) for repair of a complex product “so as to restore its overall appearance in whole or part” would generally act to exclude the protection of spare parts.

Following this whistle stop tour of partial design protection in the EU, US, Japan and Australia, the panel took questions and comments from the active and engaged audience, including a quick Canadian overview – partial designs and spare parts protection and use of dotted lines are allowed, but no protection for parts invisible in normal use. David also noted, following a question from a Singaporean participant, that globally there has been a trend towards the separate protection of sets (aka “system designs”), such as a cutlery set, in addition to protection of the individual elements of those sets. 
The panel then brought up a number of partial design examples as case studies and asked the audience to consider whether they would be capable of protection in their home jurisdictions. One of these examples, see slide 19 here, was the “home” button on an iPhone. The consensus was that this partial design would probably be protectable (subject to novelty and obviousness considerations) in the EU, US and Australia albeit perhaps with a narrow scope of protection, but probably not in Japan, due to the complex array of exclusions there. Another example was that of a femoral hip prosthesis [insert slide 20]. Each of the panel members considered this would be protectable in their respective jurisdictions, with David noting that in the EU this would not be considered to be a component part of a complex product in light of the fact that humans are not products. 
Appropriately, given partial designs are a 2018 AIPPI study topic, the session ended with David presenting a number of potential aspects of partial design protection that could be put forward for harmonisation, ranging from the simple principle that partial designs should be registerable, to the idea that there should be no requirement for visibility during normal use for partial designs that are not spare parts (see slide 24 here).  
As study committees around the world take up the partial design baton moving into 2018 and the next AIPPI World Congress in Cancun it was clear from the diversity of views from the audience that partial designs (and design law more generally) remain an area ripe for harmonisation (and perhaps another book!). With plenty to do in this area this is clearly a space to watch!"

BREAKING NEWS - CJEU holds that preserving luxury image of products in selective distribution agreements is not contrary to competition law

The Court of Justice of the European Union has issued its decision in the matter of Coty Germany v Parfümerie Akzente. The Court has essentially sided with the AG Wahl’s opinion on this case [reported on this blog here].

The case saw Coty Germany, a seller of luxury cosmetic goods and its distributor, Parfümerie Akzente, disputing over a contractual clause which prevented the distributor from selling the luxury products on third–party platforms which operate in a discernible manner towards consumers. The distributor was free, however, to use their own electronic shop window or third-party platforms not discernible to the consumers. Coty Germany brought proceedings against Parfümerie Akzente in order to prevent it from selling on the platform “amazon.de”.

The Oberlandesgericht Frankfurt am Main asked the CJEU, essentially, whether this clause is lawful under competition law (the implications of this question for trade mark owners in distribution agreements are extremely relevant).

According to the press release, the CJEU stated that:

“…a selective distribution system for luxury goods, designed primarily to preserve the luxury image of those goods, does not breach the prohibition of agreements, decision and concerted practices laid down in EU law, provided that the following conditions are met: (i) resellers are chosen on the basis of objective criteria of a qualitative nature, laid down uniformly for all potential resellers and not applied in a discriminatory fashion; and (ii) the criteria laid down must not go beyond what is necessary.”

Furthermore it held that, a contractual clause in a selective distribution agreement that: (i) has the objective of preserving the luxury image of the goods in question; (ii) it is laid down uniformly and not applied in a discriminatory fashion; and (iii) it is proportionate in the light of the objective pursued; is not in principle precluded to stop authorised distributors from using, in a discernible manner, third party platforms for internet sales, if these principles are met. It will be the Oberlandesgericht Frankfurt am Main which will have to determine whether these conditions are met in the case at hand.

Also, the Court clarified the vexata quaestio of the scope of the Pierre Fabre (C-439/09) judgment. According to the press release, it held that in Pierre Fabre it did not intend to set out a statement of principle for which the preservation of a luxury image of products cannot justify a restriction of competition. In that case there was a blanket prohibition on internet sales justified by the undertaking with the preservation of the luxury image of its products, which on those terms could not be justified.

The judgment is available here (only in German and French for the moment).

Stay tuned for a more thorough analysis!

Limoges porcelain now protected by French GI scheme

Porcelaine de Limoges
The IPKat is delighted to host the following contribution by fellow blogger (1709 Blog) and attorney (Fidal), Marie-Andrée Weiss, on the new French geographical indication (GI) scheme for Limoges porcelain.

Here’s what Marie-Andrée writes:

“France’s national institute of industrial property, the Institut national de la propriété industrielle (INPI) has approved « Porcelaine de Limoges », the porcelain made in Limoges, in the Haute-Vienne department, as an « indication géographique protégeant les produits industriels et artisanaux »,  a geographical indication protecting industrial and handicraft products. It is the third geographical indication of an industrial and handicraft product approved by the INPI, after the « siège de Liffol » in December 2016 and the « granit de Bretagne » in January 2017. The Limoges porcelain must be both produced and decorated in the Limoges geographical area.

The decision of INPI’s director granting this geographical indication was published on December 1st (p. 5 and following). It comprehensively details the requirements which must be respected to sustain the right to use this new geographical indication. It is an interesting read, as it explains why the porcelain made in the Limoges area is exceptional, details the history of the industry and explains the technical process. The industry is intimately liked to the area as Limoges was found be rich in very fine kaolin, so pure that it was nicknamed “white gold”.

A 2014 law opened up the geographical indication accreditation procedure to industrial and handicraft products. Before this law, only agricultural products and wines could benefit from geographical indication. The law was enacted following a much-commented judicial decision which had not recognized the right of the city of Laguiole to prevent the registration by a third party of “Laguiole” as a trade mark, in several classes. “Laguiole” is a valuable trade mark as “Laguiole” is a famous trade mark in France for knives.

Trade mark law is not an efficient way for cities, regions and other interested parties to protect the use of their names as a trade mark, as it would imply registering the geographical source as a trade mark in all classes, only to have to face a possible revocation of the mark after five years for lack of genuine use. This new geographical indication scheme was enacted to give interested parties an efficient way to protect their names against abusive trade mark registrations.

In order to be granted a geographical indication, a defence organization of the operators concerned must submit a list of requirements, which must highlight “specific and objective criteria for demonstrating how the product can benefit from the geographical indication without risk of confusion for the consumer.” This includes the name of the geographical indication, the product, and the delimitation of the geographical area.

Limoges
The applicant must also describe the “quality, reputation, traditional know-how or other characteristics of the product concerned that can be attributed essentially to that geographical area or location and the elements linking the product to the area geographic location or associated location [andthe description of the process of production, production and processing, including the production or processing operations that must take place in the geographical area or the specific place.

It is particularly important to define the geographical area and to explain which elements of the production process affecting the specific elements of the product can be primarily attributed to the geographical area, and the link between the product and the quality control procedures which will be put in place.  

Once the geographical indication has been granted, article L.711-4 d) of the French intellectual property Code forbids registering a mark which would infringe such geographical indication. As such, the process is an efficient way to prevent subsequent trade mark registrations. Trade marks registered prior to the grant of the geographical indication are not considered to be in conflict with the geographical indication, unless, under article L.713-6 of the French intellectual property Code, such prior trade mark  “is the sole origin of the reputation or knowledge of the consumer of the product for which a geographical indication is requested.”

“Porcelain” is named “china” in English, reflecting that the process was first invented in… China. Could “Limoges” be one day used instead?”

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