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Trademark Review 2007

So many recent developments have been appeals of cases reviewed in my 2006 Review that my updates to that have taken up much material that could have found a place here.

Shop Names and Trademark Use

There is something magical about the name of a shop that has eluded the law makers over the years. Even our highest court, the European Court of Justice cannot give a clear answer. On 11 September 2007 they answered a reference from the French court who wanted to know if a CELINE shop selling clothing for which CELINE was registered infringed that trademark with no more than a definite maybe. They said yes if "the use is in relation to goods in such a way as to affect or to be liable to affect the functions of the mark".

Celine of Paris appear to have complained in 2005 about a CELINE menswear shop in Nancy that opened in 1950 and incorporated in 1992 as Celine SARL so it seems unlikely that consumers were being misled - but big brand controllers do not enjoy any intrusion on their territory once their attention has been drawn to the issue (it was the same for Nasdaq below).  In June 2005 Celine SARL was ordered to change its name and the name of its shop, but it appealed and hence the two year hiatus while the ECJ pondered the issue.  Article 5(1)a of the Directive has no requirement for a likelihood of confusion if the infringement is use of an identical sign on identical goods. Now the ECJ say you still have to look for an impact on the essential function of the trademark. The ECJ held that the purpose of a company, trade or shop name is not, of itself, to distinguish goods or services but they were happy that it was use in relation to the goods. The French appeal court must now judge whether Celine SARL's use does impact on the essential function of the trademark.

There was also consideration of the own name defence but the ECJ hid behind the requirement of the national court to consider whether Celine SARL was using the name in accordance with honest practices. In short they said we told you all we were going to say in the Anheuser Busch case (Case C-245/02 a reference from Finland over the infamous Budweiser Budvar dispute with the Czech business) so go and read that

It seems to me that the ECJ is bored of IP cases and is simply trying to tell the national courts that these are issues of fact on which they really ought now to be brave enough to make their own determinations.

Internet Advertising

Brands and advertising have become increasingly dominant in our lives - In 2004 AOL paid £435m for an Internet advertiser but Microsoft has just paid £6bn making Google's £3bn Doubleclick (hey folks I registered that as a UK mark in 1997 when I had to explain Internet advertising) purchase look like a bargain.  It is not surprising that brand owners want ever wider protection and they also want it to be the same globally.  While governments are generally persuaded of the benefits of harmonisation, it has become evident that the Internet advertisement businesses have almost as much power with the "notice and take down" policies they adopt for complaints. The courts hold the balance between brand owners and their desire for protection and the legitimate rights of other businesses to trade but if their decisions are inconsistent, power rests with the operators.  While they believe they themselves are immune from infringement actions arising out of the use they make of trademarks by selling them as keywords they will design their policies to optimise advertising spend.  Meanwhile Utah is charging a fee for a new form of electronic registration mark under its state trademark legislation

Opposition Onslaught

With the UK abandoning relative grounds examination from 1 October 2007 (see my page for CTM owners here) the UK registry is expecting an onslaught of new oppositions.  However an opposition is a slow route to solving a real conflict and for a young company can divert valuable resources. On 16 July 2007,  Professor Annand acting as the appointed person finally refused registration of the STERITROX mark, which had been filed on 9 October 2002 after an opposition by Sterilox Technologies Inc based on their STERILOX mark. Both companies were offering sterilisation equipment and the Registry managed to confirm a likelihood of confusion when the case came on for its hearing in December 2006.  However the hearing officer then suggested that the specification for sterilising equipment could be accepted if there was a purpose limitation added to the specification. 

“Cleaning apparatus utilizing ozone; filtering apparatus utilizing ozone; sanitizing apparatus utilizing ozone; all for use in the elimination of microbes and odours from high and low care areas, chillers, warehouses, transport containers or other defined spaces.”

This registration would have allowed "Steritrox" to continue to sell their equipment. Clearly this limitation in a trademark specification could not preclude the equipment being used in other ways by the consumer.  This would still lead to confusion. This is one of the few recent appeals in the UK, where an appointed person has decided that intervention is justified.  In this case because the hearing officer displayed "inconsistent reasoning".

Hopefully the new cohort of hearing officers now being trained will result in oppositions being decided more quickly.  For any entrepreneurial company faced with a trademark dispute in their early days it is often more prudent to avoid this type of problem and simply walk away from the problem by rebranding before there is significant goodwill to lose. Here the entrepreneur decides not to give up.  In this case the applicant did not have the benefit of an early preliminary indication, which is part of the opposition procedure introduced on 5 May 2004.  These changes appear to be causing more rapid disposal of opposition with many decisions being taken without hearings.

Dilution Harmonisation in US and Europe?

Does Italian ski goods company, Antartica srl registering NASDAQ Nasdaq logotrademark dilute the rights of the US Nasdaq Stock Market ? On 10 May 2007 the European Court agreed that it did.  From the perspective of global harmonisation of the dilution standard this is an interesting case because it is a dispute that has been argued in both the US and Europe and highlights the common ground between the legislation in these territories.  There have also been cases in Japan and Italy since Antartica adopted this brand in 1998.  Surprisingly they still appear to use the mark so you can judge for yourself.

There are two important differences between the European judgement and the US TTAB decision  in June 2004.  First, there was no use by Antartica in the USA and second, the Nasdaq fame is not the same in the two jurisdictions. The absence of use meant that this was the first US case to confirm that likelihood of dilution was sufficient to win a US opposition based on dilution and actual dilution was not necessary.  The European court also stuck with the likelihood standard and did not want to consider reality.

In the US the fame of  NASDAQ was really beyond doubt as it had been heavily promoted to a primary target group of men, 35 to 64, with at least a $75,000 annual income and they showed a 75% recognition rate amongst investors. The European evidence, which did not convince the opposition division at all, was simply of the use in the context of the indices in the financial media although this is described in the judgement as "omnipresence in the press" which suggests there are more serious private investors on the court benches than amongst OHIM's examination corps. The court also felt that a large part of the European general public were interested in the developments in the financial markets - which is a brave assumption especially if they mean the US financial markets which it is by no means easy to access. 

Links

Both the European and US Jurisprudence require a link between the later mark and the earlier one in the mind of the average consumer- though the US don't use "link" but want a substantial percentage of consumers to be "immediately reminded of the famous mark and associate the junior party’s use with the owner of the famous mark", which sounds the same to me.

The two tribunals also came to different conclusions as to the adoption of the mark based on the same evidence. The TTAB declined to find the applicant had adopted its mark in bad faith,  whereas the CFI were apparently content to follow the strong arguments of OHIM that the applicant intended to create a link with Nasdaq to benefit from the prestige already enjoyed by that trademark in the high-tech economy. OHIM even argued that the applicant would not have to invest in advertising costs to attract public attention to its goods. (That rather assumes that lots of trademark attorneys need ski helmets).  In fact in defending its own Board of Appeal decision OHIM wholeheartedly made all the points one might have expected the intervener - Nasdaq - to make.

So we have much the same law but if anything it looks like an easier ride in Europe to a dilution victory if you have any evidence at all.  But Nasdaq now need to convince a Community Trademark Court that the Italian use is trademark infringement.

The Parallel Importer's Burden

The market in parallel imported drugs within the EU is sufficiently lucrative to pay for protracted trademark litigation. The latest opinion from the ECJ on 26 April 2007 in Case C-348/04, confirms the five "unless" conditions that were set out in the 1996 Bristol-Myers Squibb decision. So a trademark owner can complain unless:

 

Although it says overstickering the ECJ is not too concerned with the manner and style of the repackaging. It might be reboxing and reapplying the trademark.

The ECJ clarified that the burden of showing these conditions have been met belongs to the importer. In respect of the second, it would be enough for the importer to furnish evidence that leads to the reasonable presumption that that condition has been fulfilled. The burden then shifts to the trademark proprietor who is best placed to assess whether the repackaging is liable to damage his reputation and that of the trademark, to prove that they have been damaged.

More Rules?

It always seemed bizarre to me that the Court could impose this notice condition based only on the authority of the harmonisation directive.  Such rules are normally subject to parliamentary debate.  Nevertheless the ECJ did baulk at getting even more detailed and decided that what specifically damaged a trade mark’s reputation is a question of fact for the national court.  Possible parallel importer peccadilloes might include:

but the ECJ was making no more rules.  However it gave great force to the notice requirement and says that if the importer fails to give prior notice to the trade mark proprietor concerning a repackaged pharmaceutical product, he infringes the right of that proprietor on the occasion of any subsequent importation of that product, so long as he has not given the proprietor such notice.  Remedies are not harmonised and the parallel importers had argued that such an infringement should not attract financial remedies. The ECJ was not prepared to give them any such comfort.  Once again the national court must decide having regard to the principles of equivalence, effectiveness and proportionality.

This latest judgement is unlikely to reduce the objections trademark owners make when their product is repackaged.  Indeed it seems inevitable that complaints will fly if the notice provision is not strictly adhered to and no less so when it is, if the drug company can find any element of the new package that could conceivably damage its reputation. I wonder if the extra cost of dealing with notice and design challenges will increase the price enough to spoil the market for parallel imports. Its just as well that jeans don't need repackaging!

small comfort from the European Parliament

The European Parliament finally voted on the Enforcement of intellectual property rights (criminal measures) directive on 25 April 2007.  This provision has attracted a lot of interest from INTA, who are keen that it should provide criminal sanctions against counterfeiting but not put their members at risk if they commit "civil" infringement when adopting a similar mark. Amongst the amendments approved by the Parliament was one to ensure the criminal sanctions would not apply to "parallel importation of original goods from a third country which have been allowed by the rightholder".  If "allowed" is the same as "consent" then these would not be infringing goods anyway but one imagines that the parliamentarians meant real parallel imports.

Scandinavian Names Defeat Community Trademarks

The Alicante News for February 2007 highlights an extraordinary decision of OHIM's cancellation division that means that the personal or trade name of another in Finland or Sweden is sufficient to invalidate an identical Community Trademark for any goods or services. 

The owner of the famous in Finland chocolate brand fazer® had unsuccessfully opposed registration of the identical mark by a Yorkshire golf club supplier who used it for a line of irons and putters no longer advertised on their site.  The opposition and its appeal made it into the reported cases - see the IpKat note here. Not unsurprisingly their original case that someone seeing a golf club would make a link with the Finnish brand was unsuccessful.  Nevertheless a cancellation action was started in the name of two Swedish children and a Finn based merely on their own name rights did succeed.

The Cancellation Division held that the national laws of Finland and Sweden came within Article 52(2) CTMR, which provides

2. A Community trade mark shall also be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings where the use of such trade mark may be prohibited pursuant to another earlier right, and in particular:

(a) a right to a name;

(b) a right of personal portrayal;

(c) a copyright;

(d) an industrial property right.

under the Community legislation or national law governing the protection.

I have added the emphasis. The cancellation division reviewed the evidence of the national law put before them and equated the provisions that allowed national trademarks to be invalidated  if composed of the name of another as effectively prohibiting the use of such trade marks. For Finland they also had one 1988 case where use of Vanto appeared to have been prohibited, but the other case law relied on to support the case concerned the registration of name marks.

Given that the ECJ held in the Nichols case in 2004 (C-404/02)  that surname marks, even common ones, should be assessed like any other sign, this cancellation decision is remarkable. If it is to stand then clearly some pressure must be put on these countries to reduce the name rights in their territories.  Otherwise Finns and Swedes seem to have a disproportionate right to prevent trademarks being registered as Community Trademarks regardless of whether they are putting their names to any commercial use. In this case the Swedish applicants for cancellation were children.

Estoppel

The applicants for cancellation were not the same as the original opponent.  However the cancellation  division would not apparently have found the original opponent to be estopped from bringing the cancellation action themselves despite the failed opposition. In this at least they are in agreement with the UK Court of Appeal in the Special Effects case discussed here.

Fast Track Trademark Registration in the UK

In October 2007 the UK-IPO launched a consultation on fast track trademark registration as recommended in the Gowers Review. You can download the Filemot response (which also deals with the patent side of the consultation) here. Despite or perhaps because of the general disinterest in the proposal the UK IPO have very promptly announced  on 14 January 2008 that this service will be available at an extra fee of £300 from April 2008. The Filemot advice is not to waste your money, while the normal service remains good.  I quite like my idea of cutting down the opposition period to one month extendible on request to three. Now we have cooling off, it seems that this long opposition period is not being used to discuss settlement as originally intended.

For those interested in the fast track patent issue also see my diary.

Portfolio Pointers

Apply to register your service marks in Nigeria - a 2007 ministerial decree means that applications are being accepted now even though the law has not been amended.

Check out your holdings in Syria. Their new law came into force on 12 April 2007 with increased fees but they still ask for boycott declarations. Oppositions have been introduced so check its in your watch.

If you have International Registrations covering Serbia possibly in the docketing system as Yugoslavia you will need to reply within 6 months and pay your CHF63  to the International Bureau notice to maintain protection in Montenegro . If your addresses in the International Register are out of date you might not get the invitation - check here

There's a new country to have in the docketing system too - Kosovo an enclave of Serbia may start registering its own trademarks.

Qatar has also promised to speed up its registration process so it may be as well to check your agent still knows where you are.

Look at the designs and graphics your company has introduced within the last 12 months and consider a Community Registered Design for the lot if the EU is a significant market and you are worried about risks of  imitation. More on this here.

Bye! Feel free to comment!

Take it or "Leaf" it.  Here are some jottings from the leaves of my notebook



Even a crying Swedish child can defeat a Community Trademark if he has the right name



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Copyright 20 January 2008