17 October 2014

Flos putting us all through the Mill

In 1962 Achille and Pier Giacomo Castiglioni designed a floor lamp with a marble base and a curved lead to a bowl shaped reflector.  Those lamps, known as the Arco lamp and you can see a picture of one of those lamps in Achille Castiglioni's studio in Quick History: The Arco Lamp in Apartment Therapy. Original Arco lamps retail for £1,373 but it is possible to buy a reproduction for a fraction of that price as the Prime Minister's wife did recently (see "Samantha Cameron counts the cost of her repro lamp" 3 Oct 2011 The Guardian).  

The reason why it is possible to buy a reproduction lamp is that s.52 (2) of the Copyright, Designs and Patents Act 1988 ("the CDPA"provides that after the end of the period of 25 years from the end of the calendar year in which articles made from an original artistic work in which copyright subsists with the licence of the copyright owner are first marketed, that work may be copied by making articles of any description, or doing anything for the purpose of making articles of any description, and anything may be done in relation to articles so made, without infringing copyright in the work.  Copyright usually subsists in an original artistic work for the life of the author plus 70 years (see s.12 (2) of the CDPA) but s.52 provides an exception to that term. The reason for the exception is that an author of such a work could and should register his or her design under the Registered Designs Act 1949 or the Community Designs Regulation  S.52 reflects the demarcation that has existed for many years between industrial designs which are covered by art 5quinquies of the Paris Convention for the Protection of Industrial Property of March 20, 1883 and artistic works which are protected by art 2 (1) of the Berne Convention for the Protection of Literary and Artistic Works of September 9, 1886.

This demarcation between art and design which had been respected by judges and legislators around the world for well over 130 years has been thrown into disarray by the decision of the Court of Justice of the European Union in Case C168/09 Flos SpA v Semeraro Casa e Famiglia SpA  [2011] ECDR 8, [2011] RPC 10, [2011] EUECJ C-168/09. This decision resulted from a reference under art 234 of the Treaty of Rome (now art 267 of the Treaty on the Functioning of the European Union) from the Tribunal of Milan in the course of an action for copyright infringement. Flos SpA ("Flos") which owned the copyright in the Arco lamp sued Semeraro Casa e Famiglia SpA ("Semeraro") for importing from China a lamp called the ‘Fluida’ lamp, which, in Flos's submission, imitated all the stylistic and aesthetic features of the Arco lamp.

In its defence, Semeraro relied on art 239 of the Italian Intellectual Property Code which provided:
"The protection conferred on industrial designs under point 10 of the first paragraph of Article 2 of Law [No 633/1941] shall not be enforceable as against products based on designs that were in, or had entered into, the public domain prior to the entry into force of Legislative Decree [No 95/2001]."
Flos argued that the exception provided by that article was incompatible with art 17 of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs OJ L289 28.10.1998 p 28 ("the Designs Directive") which provides:
"A design protected by a design right registered in or in respect of a Member State in accordance with this Directive shall also be eligible for protection under the law of copyright of that State as from the date on which the design was created or fixed in any form. The extent to which, and the conditions under which, such a protection is conferred, including the level of originality required, shall be determined by each Member State."
Accordingly, the Tribunal referred the question of compatibility to the CJEU which to the surprise of many (including yours) truly replied:
"1. Article 17 of Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs must be interpreted as precluding legislation of a Member State which excludes from copyright protection in that Member State designs which were protected by a design right registered in or in respect of a Member State and which entered the public domain before the date of entry into force of that legislation, although they meet all the requirements to be eligible for copyright protection.
2. Article 17 of Directive 98/71 must be interpreted as precluding legislation of a Member State which – either for a substantial period of 10 years or completely – excludes from copyright protection designs which, although they meet all the requirements to be eligible for copyright protection, entered the public domain before the date of entry into force of that legislation, that being the case with regard to any third party who has manufactured or marketed products based on such designs in that State – irrespective of the date on which those acts were performed."
If anything could possibly drive me into the arms of UKIP it would be decisions like this one.

This judgment has been criticized widely and it may not be followed because the CJEU has no doctrine of stare decisis as such but it is for the time being the law. Possibly fearing claims against the UK for non-implementation of a directive following Joined cases C-6/90 and C-9/90 Francovich and others v Italian Republic Parliament enacted the Enterprise and Regulatory Reform Act 2013 s.74 of which omits s.52. s.74 (9) (g) and para 20 of Sched 1 to the CDPA. As this repeal will cause all sorts of problems HM government has not yet implemented it.  Instead it is holding a Consultation on transitional provisions for the repeal of Section 52 of the Copyright, Designs and Patents Act 1988 which closes on 27 Oct 2014.

As the repeal will revive long dead copyrights and outlaw purchases such as the one by Mrs Cameron mentioned above it will be wonderful for designers but appalling for consumers and many importers and retailers. Accordingly the government wishes to provide a transition period to implement s.74 of the Enterprise and Regulatory Reform Act 2013:
"The Government’s objective is to ensure that rights holders and designers are able to protect their copyright for the full duration of copyright protection. However, the Government wishes to ensure that the change in law is implemented in a way that provides for a fair and proportionate transition period. A proportionate transition period will fulfil the Government’s other objective of ensuring that businesses have sufficient time to adjust and minimise unnecessary harm to UK businesses that have lawfully relied on the permitted act contained in section 52 of the CDPA."
HMG has considered a number of suggestions for the duration of this transition period ranging from right now to 10 years or longer. As 10 years was considered too long by the CJEU the government is consulting on 3 years.

Another problem, as the consultation document acknowledges, is that "there is uncertainty as to which items would be protected" and "many businesses are unavoidably unsure of what items would be affected by the change in law, and assumptions have been made as to what constitutes an artistic work."  Already solicitors letters are flying about:
"The Government believes that a number of rights holders are likely to assert their intellectual property rights – the Government has seen correspondence from rights holders where they have contacted businesses that trade in unlicensed copies of their licensed products for potential infringement of their intellectual property rights. In some cases, rights holders have written to businesses trading in unlicensed copies of their products, citing copyright infringement of their works, despite section 52 of the CDPA currently remaining in force. The Government has received other anecdotal evidence that some businesses that sell lawfully manufactured or imported unlicensed copies online have been subject to take-down notices or action, and other businesses being accused of being “infringers” or “pirates” despite their business activities being lawful under section 52 of the CDPA."
This is imposing a significant cost on British business:
"The cost to identify which products could infringe copyright could be high, and in some cases it may require potentially expensive legal disputes. These legal disputes are likely to affect smaller businesses disproportionately as they may not have the resources to pursue or defend such actions. The legal uncertainty and fear of copyright infringements (or fear of potential criminal liability due to copyright infringement) could also have a “chilling effect” on planned investment in new products."
One of the questions on which HMG is consulting is whether it should issue non-statutory guidance on what items are likely to attract copyright in the form of a “Copyright Notice”, that is to say a document published by the IPO that provides basic copyright guidance the object of which would be to provide "an authoritative and impartial reference point on areas of copyright law."

This is a complex issue which affects just about everybody. Should there ever be a referendum on EU membership this could well be an issue. New technologies such as 3D printing will complicate the debate, especially since there is now a new exception under s.28B of the CDPA which permits personal copies of copyright works for personal use. If anyone wants to discuss Flos, the repeal of s.52 of the CDPA or any issue of copyright or design law he or she should call me on 020 7404 5252 during office hours or message me through my contact form. You can also tweet me, write on my wall or contact me through Linkedin or Xing.

16 October 2014

Use of a Trade Mark: Specsavers v ASDA

In Community Trade Marks: Specsavers v ASDA 7 Feb 2012 NIPC Law I analysed the litigation that had taken place between two well known retailers in which the Court of Appeal considered how far an aggressive marketing campaign can go without infringing trade mark law. As I said in my case note Specsavers International Healthcare Ltd and others ("Specsavers") had brought an action for trade mark infringement and passing off against the supermarket chain Asda Stores Ltd. ("ASDA") for using the marketing materials that I identified in my note and Asda counterclaimed for revocation of Community trade mark 1358589 depicted above ("the wordless mark") for non-use.

History of the Litigation
The action and counterclaim came on for trial before Mr Justice Mann who found that the strapline "Be a real spec saver at ASDA" infringed the word mark under art 9 (1) (c) of the Community Trade Mark Regulation (Council Regulation (EC) No 207/2009 of 26 Feb 2009 on the Community trade mark) but otherwise dismissed the claim. He also revoked the wordless logo mark for non-use. Both sides appealed to the Court of Appeal (Lord Justice Kitchin, Sir John Thomas, the President of the Queen's Bench Division and Lady Justice Black) which allowed the appeal on some issues but not on others and dismissed Asda's cross-appeal.  The Court of Appeal felt unable to make a decision on the revocation of the wordless trade mark or whether it had been infringed without the guidance of the Court of Justice of the European Union ("the CJEU").

Accordingly, the Court of Appeal referred the following questions to the CJEU:
"1. Where a trader has separate registrations of Community trade marks for
(a) a graphic device mark
(b) a word mark
and uses the two together, is such use capable of amounting to use of the [figurative] mark for the purposes of Articles 15 and 51 of Regulation [No 207/2009]? If yes, how is the question of use of the graphic mark to be assessed?
2. Does it make a difference if:
(a) the word mark is superimposed over the [figurative element]?
(b) the trader also has the combined mark comprising [the figurative element] and [the] word mark registered as a Community trade mark?
3. Does the answer to [the first and second questions] depend upon whether the graphic device and the words are perceived by the average consumer as [on the one hand] being separate signs; or [on the other hand] each having an independent distinctive role? If so, how?
4. Where a Community trade mark is not registered in colour, but the proprietor has used it extensively in a particular colour or combination of colours such that it has become associated in the mind of a significant portion of the public (in a part but not the whole of the [European Union]) with that colour or combination of colours, is the colour or colours with which the defendant uses the sign complained of relevant in the global assessment of [either the] likelihood of confusion under Article 9(1)(b) [of Regulation No 207/2009], or unfair advantage under Article 9(1)(c) of[that regulation]? If so, how?
5. If so, is it relevant as part of the global assessment that the defendant itself is associated in the mind of a significant portion of the public with the colour or particular combination of colours which it is using for the sign complained of?"
The CJEU considered those questions in  C-252/12 Specsavers Optical Superstores Ltd and Others v Asda Stores Ltd [2013] WLR(D) 287, ECLI: EU: C:2013:497, [2013] Bus LR 1277, EU: C: 2013:497, [2013] EUECJ C-252/12 and gave the following answers:
"1. Article 15 (1) and Article 51(1) (a) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that the condition of ‘genuine use’, within the meaning of those provisions, may be fulfilled where a Community figurative mark is used only in conjunction with a Community word mark which is superimposed over it, and the combination of those two marks is, furthermore, itself registered as a Community trade mark, to the extent that the differences between the form in which that trade mark is used and that in which it was registered do not change the distinctive character of that trade mark as registered.
2. Article 9 (1) (b) and (c) of Regulation No 207/2009 must be interpreted as meaning that where a Community trade mark is not registered in colour, but the proprietor has used it extensively in a particular colour or combination of colours with the result that it has become associated in the mind of a significant portion of the public with that colour or combination of colours, the colour or colours which a third party uses in order to represent a sign alleged to infringe that trade mark are relevant in the global assessment of the likelihood of confusion or unfair advantage under that provision.
3. Article 9 (1) (b) and (c) of Regulation No 207/2009 must be interpreted as meaning that the fact that the third party making use of a sign which allegedly infringes the registered trade mark is itself associated, in the mind of a significant portion of the public, with the colour or particular combination of colours which it uses for the representation of that sign is relevant to the global assessment of the likelihood of confusion and unfair advantage for the purposes of that provision."
ASDA and Specsavers settled their differences as far as they could but the appeal against the revocation of the wordless mark remained. As ASDA no longer had an interest in that appeal the Court of Appeal invited the Registrar of Trade Marks to intervene on the public's behalf.  The Registrar's counsel recognized that her client's role was to protect the public interest by intervening to the extent necessary to prevent invalid trade marks being restored to the register and assisted the Court by rehearsing the counter-arguments to Specsavers' appeal, while at the same time maintaining a balanced view consistent with the Registrar's position.

The Issue
The question before the Court was whether the combination of the wordless mark with Specsavers word mark as in the following example ("the Shaded logo mark") constituted "use" of the wordless mark within the meaning of art 15 (1) (a) of the Community trade mark regulation.

The Judgment
After analysing the CJEU's judgment Lord Justice Kitchin summarized the Court of Appeals task as follows:
"in my judgment it follows from all of the foregoing that the national court is required to consider the use which has been made and to ask itself whether the differences between the form in which the mark has been used and that in which it is registered do not change the distinctive character of the mark as registered. In carrying out that exercise the court may ask whether the use relied upon is such that the trade mark as registered (here the Wordless logo mark) serves to identify the goods or services as those of a particular undertaking (here the Specsavers group). Put another way, if the mark as registered (here the Wordless logo mark) is used only as part of a composite mark (here the Shaded logo mark), the use must be such that the mark as registered is itself perceived as indicative of the origin of the goods or services. Moreover, it is permissible to take into consideration that the mark has always been used in a particular colour in so far as this affects how the mark is perceived by the average consumer."
His Lordship did not consider Specsavers' use of the Shaded logo mark in the above example as "a very promising basis for an argument" that they had used the wordless mark since the word Specsavers was distinctive and appeared in prominent letters in a contrasting colour across the centre of the mark. However the CJEU had directed that consideration must be given to all of the use that has been made of the Shaded logo mark, and to the perception of the average consumer and in the particular circumstances of this case there was, perhaps unusually, powerful evidence of both.  First, Specsavers had made very substantial use indeed of the Shaded logo mark over many years. Secondly, none of Specsavers' major competitors had a logo which was remotely similar to the Shaded logo mark or the wordless mark. Thirdly, the way in which ASDA developed its own competing logo while not confusing raised the inference that the public identified Specsavers by reference to the wordless mark. Fourthly, that was supported by the testimony of Dame Mary Perkins
"that, when she visits cities and towns where Specsavers have an outlet, the first thing she does is "look for the shapes" or, in other words, the Shaded logo mark. She also explained that she routinely asks taxi drivers how they recognise a Specsavers outlet, and they commonly tell her, in words of their own, that they look out for the overlapping green elipses."
In a conclusion with which Sir John Thomas (now Chief Justice of England and Wales) and Lady Black agreed, Lord Justice Kitchin said at paragraph [34]:
"Drawing the threads together, I have come to the conclusion that, in the rather unusual circumstances of this case and notwithstanding my initial impression to the contrary, Specsavers have established that much of the use they have made of the Shaded logo mark including, in particular, its use on signage, does also constitute use of the Wordless logo mark, for the evidence in this case shows that it has been such that the Wordless logo mark has served and does serve to identify the goods and services of Specsavers, and that the average consumer has perceived and does perceive the Wordless logo mark as indicative of the origin of the goods and services supplied by Specsavers. In short, much of that use has been such that the differences between the Shaded logo mark and the Wordless logo mark have not changed the distinctive character of the Wordless logo mark; and the Wordless logo mark has itself been seen as a trade mark and not simply as background. It follows that Specsavers have established that they have made genuine use of the Wordless logo mark."
At paragraph [37] Lord Justice Kitchin said that the Registrar had invited the Court of Appeal to make it clear that each case must be determined on its own facts. He ad expressed a concern that were the Court of Appeal to allow the appeal, the Registry might be faced with many applications to register relatively commonplace outline shapes of logo marks. The Court was entirely content to emphasize that each and every case must be decided on its own facts and in the light of all the relevant circumstances. Indeed, Lord Justice Kitchin went further and said that, in general, it was unlikely that the background of a mark would be perceived by the average consumer as an indication of origin. However, this was an unusual case and Specsavers were supported in their appeal by what his Lordship consider to be convincing evidence.

This is an important case and one that is likely to be referred to frequently in future. Despite the cold water liberally poured by the Lord Justice Kitchin on behalf of the Court in paragraph [37] of his judgment I should not be surprised by a significant increase in the number of device mark applications on the strength of this case and the decision of the CJEU. Should anyone wish to discuss it with me or trade marks law generally, he or she should not hesitate to call me on 020 7404 5252 during normal office hours. I can also be reached through my contact form and you can tweet me, write on my wall or contact me through Linkedin or Xing.

18 September 2014

IP concerns everyone - not just elite lawyers and big business

 On 18 Sept 2008 I wrote in IP Yorkshire:
"Team GB may have done very well at the Beijing Olympics but our inventors and entrepreneurs are nothing like as successful in the European patent application stakes. As can be seen from the ..... table [in the article], we trail a poor 7th in the number of European patent applications. Not only do we lag behind the economic super-powers, the USA and Japan, but we compare badly even to France and Germany with similar populations and GDP. We even trail the Netherlands and Switzerland with a third and an eighth of our population respectively and are about to be overtaken by distant South Korea which was a battlefield 50 years ago."
 I considered why the UK does so badly and found that it was because "start-ups and other small businesses, that are the mainspring of innovation in the UK as in most of our competitors, make much less use of the intellectual property system than their equivalents in other countries and, indeed, much less use than multinational enterprises and other big businesses here." I concluded that there were two reasons for that:
"One is that the cost of obtaining and enforcing legal protection for investment in brands, design, technology and the creative works is prohibitive and the other is that the intellectual property services available to small businesses, particularly outside London, is patchy in quality and, when compared to the unit costs that major companies pay, relatively expensive."
Both Gowers and Hargreaves came to similar conclusions in their reviews.

By launching IPEC (Intellectual Property Enterprise Court) with its small claims track and acceding to and implementing the Unified Patent Court Agreement the government has done something about the first problem. Through its outreach programme the Intellectual Property Office is doing what it can in collaboration with the local enterprise partnerships and the Business and IP Centres at the British Library and Birmingham, Leeds, Liverpool, Manchester, Newcastle and Sheffield Central Libraries but it can only do so much.

What is really needed are local networks involving entrepreneurs, inventors, designers and content providers, investors, local enterprise partnerships, patent and trade mark attorneys and specialist counsel and solicitors, patent information units and universities. I established something like that in Yorkshire and the North West and I am now trying to build up similar networks in London, the East and South East of England and the East Midlands. Patent attorney Barbara Cookson saw the value of those networks right from the start. In her blog Solo IP she wrote in "An Alternative Business Model based on Quality"  on 5 Sept 2008:
"As business people know the best advisers are those which come personally recommended by other clients. A recommendation from a peer comes without bias but a business peer may not know whether he has received the best possible device only other advisers know that. Jane is hoping to build a network that can leave Solo practioners running their own practices but with a platform that enables them to work in teams to provide the services the client needs. This is a great idea because there are business consumers who need experience and are offered only inexperience when they approach big branded law firms because they are compelled to ask for the lowest possible fee. Judging by the company last night there are huge opportunities for businesses to achieve excellent value by using solo practitioners and other great value practices that Jane has sought out."
In Yorkshire we have established lively inventors clubs in Leeds and Sheffield, held clinics and workshops throughout the county, publish our own IP Yorkshire blog, have our own twitter account and Facebook and Linkedin groups. Between us, my collaborators and I have helped many innovative and creative businesses in all sorts of industries to get off the ground and prosper.

Our first event in the East Midlands is a workshop and clinic in collaboration with Loven IP and the Intellectual Property Office at Grantham College on 26 Sept 2014 at 14:00. You can find out more about the event in Our contribution to Grantham's Gravity Fields Science Festival: IP Workshop and Clinic 3 Sept 2014. Admission is free but space is limited so you must book in advance. You can do that through our Eventbrite page or by calling George on 020 7404 5252.  Barristers and solicitors attending the event can claim CPD Points as we are accredited by the BSB and SRA.

Other CPD events are our seminars on the Intellectual Property Act 2014 at the offices of QualitySolicitors Jackson & Canter on 29 Sept 2014 at 16:00 and Leeds Business and IP Centre on 15 Oct 2014 at 18:00 as part of Leeds Business Week. Again, booking is essential. You can use the links or call George on 020 7404 5252.  I look forward to meeting you in Grantham, Liverpool or Leeds.

13 September 2014

More on Scotland and Intellectual Property

Scotland's position in the British Isles, Europe and the World
Source Wikipedia

In "What would an independent Scottish government do about Intellectual Property?" I discussed what the Scottish government said it would do about intellectual property if Scotland seceded from the United Kingdom. Today I will consider what the white paper did not say.

The Current Situation
Scotland like the rest of the UK protects intellectual assets (brands, designs, technology and works of art and literature) by a bundle of laws some of which derive from statute such as patents, copyrights and trade marks, some from European Union regulations such as Community designs and trade marks, and some such as confidentiality and passing off from common law. Some of those rights have to be registered with the Intellectual Property Office in Newport, others with the Office for Harmonization in the Internal Market ("OHIM) and European patents with the European Patent Office ("EPO") in Munich. Intellectual property claims are brought in the Court of Session in Edinburgh under Chapter 55 of the Court of Session Rules. There is a designated intellectual property judge in the Court of Session who hears cases that would be brought in the Patents Court and the rest of the Chancery Division in England including the Intellectual Property Enterprise Court ("IPEC") but there is no equivalent to IPEC and certainly nothing like IPEC's small claims track.

UK Statutes
The Registered Designs Act 1949, the Patents Act 1977, the Copyright, Designs and Patents Act 1988 and the Trade Marks Act 1994 apply to Scotland as they do to England and Wales though some provisions apply only to Scotland. Each of those Acts confers monopolies or other exclusive rights that apply throughout the UK. If a judge of the High Court or Court of Session forbids the infringement of one of those monopolies or exclusive rights his or her order applies to the whole of the United Kingdom and is not confined to the territorial jurisdiction of his or her court.

EU Intellectual Property Rights
The Community Trade Mark Regulation (Council Regulation (EC) No 207/2009 of 26 February 2009on the Community trade mark), the Community Design (Council Regulation (EC) of 12 December 2001 on Community designs) and the Community Plant Varieties Regulation (Council Regulation (EC) of 27 July 1994 on Community plant variety rights) create rights that apply throughout the EU. Those rights are enforced in the courts of the member states whose jurisdiction extends throughout the EU. The Court of Session is one of several courts in the UK to be designated as Community trade mark and Community design courts and it is also the court in which actions under the Community Plant Varieties Regulation would be brought against a person domiciled in Scotland by virtue of art 101 of that regulation.

Scottish Common Law
The law of confidence in Scotland developed differently from the law of confidence in England (see Scottish Law Commission's report on breach of confidence, Dec 1984) but the practical effect seems to be the same. That also appears to be true of the law of passing off William Grant & Sons Ltd and Others v Glen Catrine Bonded Warehouse Ltd and Others [2001] ScotCS 116 (16 May 2001).

Effects of Scottish Secession
Were Scotland to secede from the UK there would be diplomatic, institutional and legislative consequences. As for the first of these the new state would have to negotiate continuing membership of, or accession to, the World Trade Organization ("WTO"), the World Intellectual Property Organization ("WIPO") and the European Union. It would also have to.accede to the usual international intellectual property treaties and the European Patent Convention ("EPC"), The second of those consequences is that the territory for which the Intellectual Property Office can grant monopolies will diminish and the Supreme Court will cease to hear appeals from the Court of Session.  The third is that legislation would be required to preserve and adapt the UK intellectual property statutes until they are repealed by a Scottish legislature and to introduce the new Scottish utility model referred to in my previous article.

Diplomatic Consequences
It is unlikely that a secessionist government would face difficulty in joining the WTO or WIPO despite the misgivings of countries like Belgium and Spain which also face the possibility of national dismemberment. Their voices would be stronger in the European Union and European Patent Organization but it is unlikely that they would be able to prevent Scottish accession altogether if all the other countries including England were in favour. Of course, it is always possible for Scotland to decide not to stay in or re-join the EU particularly if it were forced to adopt the euro as the price of continuing membership or accession. As Mr Nigel Farage MEP noted in a recent radio broadcast, Scotland has returned one UKIP candidate to the European Parliament and Euroscepticism in Scotland is not far behind that in the rest of the UK. It is not a given that Scotland will be a member of the EU on the day it secedes from the Union.

Institutional Consequences
If Scotland secedes it  may be possible to establish a single patent office for the whole of the former United Kingdom ("FUK") on the lines of the Benelux Office for Intellectual Property but that will depend on whether the the remainder of the the FUK sees any advantage in such an arrangement. If not, Scotland would have to establish its own patent office to issue its own patents, trade marks and registered designs including any British registered rights that are preserved as Scottish rights after secession.  Such an office would in any case be required to grant Scottish utility models.  Such an establishment will require the recruitment of examiners, training of hearing officers and the like which will cost money and that money will probably be raised from renewal fees and other charges on proprietors of Scottish patents, trade marks and registered designs. As I can see no reason for the IPO's expenses to diminish significantly on Scottish secession its fees are also unlikely to diminish. One immediate consequence of secession will be an increase in the costs of prosecuting and maintaining patent, trade mark and registered design protection throughout the FUK.

As there will be separate monopolies for Scotland and the remainder of the UK the jurisdiction of the intellectual property judge in Edinburgh and the Patents and Enterprise Judges in London in relation to statutory intellectual property rights will shrink to their respective territorial jurisdictions. Accordingly, it will be necessary to bring separate actions in Edinburgh and London to enforce throughout the FUK a right that can presently be enforced by litigation in either city. That is bound to increase significantly the costs of enforcement as well as the costs of prosecution and maintenance of IP rights.

Yet another institutional consequence is that the Court of Session will be the final court of appeal for intellectual property cases in Scotland. That has the advantage of taking away a layer of appeal which should reduce costs but it will remove the possibility of correcting the errors of the court below. The possibility of such error is greater in Scotland than it is in England for the simple reason that there is less IP litigation in Scotland and thus less opportunity to acquire the experience of the Patent and Enterprise Judges in England.

Legislative Changes
The legislation providing for secession will probably provide for the continuance of UK statutes including the he intellectual property enactments mutatis mutandis for the time being. However, new legislation would be required to establish a Scottish patent office and utility models. If Scotland leaves the EU even temporarily the Community trade mark, design and plant varieties regulations would cease to apply. That would be inconvenient for those with accrued rights or obligations under those regulations.

Although as a graduate of Scotland's oldest university and one of the UK's best I fervently hope that Scottish voters will decide not to partition our island on Thursday contingency plans have to be made in case they do. Scottish secession will affect the North of England more than the rest of the country because we shall again be on the frontier. For that reason I shall be following events less than 200 miles away with more interest than most English intellectual property lawyers. Should anyone wish to discuss this article or any issue arising out of Scottish secession he or she may call me during office hours on 020 7404 5252 or message me through my contact form.

10 September 2014

What would an independent Scottish government do about Intellectual Property?

In view of recent opinion polls I have taken another look at page 102 of the Scottish Government's white paper Scotland's Future. That contains a section headed "Intellectual Property" which consists of 4 paragraphs though only the first sets out any policy. The second is concerned with the Scottish Arbitration Centre, the third is on immigration and the fourth is on a joint venture between Visit Scotland and the Walt Disney Company and the exposition of Scottish food and drink in Florida.

So what is the policy? I reproduce the first paragraph of the section on IP in full:
"We will ensure continuity of the legal framework for protecting intellectual property rights. Independence will also allow Scotland to offer a simpler and cheaper, more business-friendly model than the current UK system, which is bureaucratic and expensive, especially for small firms. The UK is one of the few EU countries which does not offer a scheme which covers the basics of protection. Scotland could follow, for example, the German model which protects technical innovations."
As to the first sentence on the continuity of the legal framework, I am very glad to hear it. Of course, a large part of that legal framework derives from EU regulations - Community trade marks, designs and plant breeders' rights - and there will soon be the Unitary Patent which will apply to most of the EU member states. It is by no means certain that Scotland would be allowed to join the EU on the day that it secedes from the Union or indeed at all since Scottish secession would not be welcomed by countries like Spain and Belgium with their own secessionist regions. Scotland would also have to join the World Trade Organization and the World Intellectual Property Organization and accede to and ratify the European Patent Convention, the Paris and Berne Conventions and other intellectual property treaties all of which would take time.

As for the second sentence the biggest problem for small firms is enforcement. We have gone quite a long way in that regard in England and Wales by establishing the Intellectual Property Enterprise Court including the small claims track. There is nothing like that in Scotland.  Intellectual property claims have to proceed in the Court of Session in Edinburgh. On the last occasion I found myself in the small claims track of IPEC I was representing a business in the Highlands in relation to infringements that were alleged to have taken place in Scotland. Both parties found it cheaper and easier to litigate in the small claims track where the costs downside was  minimal than in Edinburgh. In  Buchanan v. Alba Diagnostics Ltd [2004] UKHL 5, 2004 GWD 5-95, 2004 SCLR 273, 2004 SC (HL) 9, (2004) 27(4) IPD 27034, 2004 SLT 255, [2004] RPC 34 which was a case between two Scottish SME the case went on for ages even before it got anywhere near the House of Lords and there were even experiments in the well of the court. It must have cost the parties a fortune.

The third sentence of the policy seems to favour utility models. As Laddie, Prescott and Vitoria have observed we used to have something like utility models in the whole UK until the 1930s when we protected functional designs. Until the Copyright Designs and Patents Act 1988 came into force we provided very extensive protection for industrial designs by treating design and engineering drawings as artistic works and products made to such drawings as infringing copies of those works even though the infringer never had sight of those drawings. Remedies were draconian for each infringing copy was treated as the copyright owner. The decision of the House of Lords in  British Leyland Motor Corp and others v Armstrong Patents Company Ltd and others [1986] 2 WLR 400, [1986] UKHL 7, [1986] RPC 279, (1986) 5 Tr LR 97, [1986] FSR 221, [1986] 1 All ER 850, [1986] ECC 534, [1986] AC 577 prompted the reform of industrial design law.

Both Sir John Whitford and the government of the day considered re-introducing utility models as an alternative to artistic copyright protection of industrial designs but ruled it out as there was no support, and indeed some opposition, from British industry. Much the same happened when the Commission canvassed the idea of a European utility model some years ago. The problem is that utility models are essentially unexamined patents which add to the problems of "patent thickets" which Professor Hargreaves identified in his report.  It is true that we are one of the few countries in the EU not to have utility models but that is because we have something better: unregistered design rights which come into being automatically and cost business nothing. Scottish businesses had the opportunity of objecting to unregistered design right in the consultation on the reform of design law following Hargreaves but none chose to do so.

This very brief and vague statement of policy probably has something to do with the fact that innovation in Scotland is not what it was.  As I showed in "Funding your Invention: R & D Tax Credits"  27 Aug 2014 NIPC Inventors Club there were only 900 British patent applications from Scotland in 2013 compared to 2,822 from South East England, 2,588 from London and 1,802 from East Anglia and only 905 applications for R & D tax credit from Scotland compared to 3,030 from the South East, 2,715 from London and 1,630 from the East of England.  Of course Scotland does have the revenues from North Sea oil for the time being but that will run out one day. Won't it.

06 September 2014

The Intellectual Property Act 2014 (Commencement No. 3 and Transitional Provisions) Order 2014

Jane Lambert

On 14 May 2014 the Intellectual Property Bill received royal assent. The Act made some far reaching changes in patents, registered design and unregistered design right law which I summarized in "Reflections on the Intellectual Property Act 2014"  7 June 2014 4-5 IP Tech and discussed in detail in "How the Intellectual Property Act 2014 changes British Patent Law" 21 June 2014 JD Supra, "How the Intellectual Property Act 2014 changes British Registered Design Law" 19 June 2014 JD Supra and "How the Intellectual Property Act 2014 will change British Unregistered Design Right Law" 11 June 2014 JD Supra 11 June 2014. On 28 Aug 2014 Lady Neville-Rolfe, Minister for Intellectual Property, signed The Intellectual Property Act 2014 (Commencement No. 3 and Transitional Provisions) Order 2014 which will bring many of the provisions of the Act into force.

Art 3 of the Order provides that most of the sections of the Act which are listed in a schedule to the Order will come into force on the 1 Oct 2014.  Most of these will require further secondary legislation but some will come into effect immediately on the commencement day thereby requiring a number of transitional measures which are dealt with in the rest of this Order.

Commissioned Designs
S.6 (1) of the Act repeals 2 (1A) of the Registered Designs Act 1949 so that a person who commissions a design will no longer be treated as the original proprietor of the design subject to any contract or rule of law to the contrary.  Art 4 of the Order provides:
"Section 6(1) of the Act does not apply to—
(a) any design created before the commencement date, or
(b) any design created on or after the commencement date in pursuance of a commission (irrespective of whether the design was commissioned before, on or after the commencement date) provided that—
(i) the designer and the commissioner of the design have entered into a contract relating to the commission of the design, and
(ii) the contract was entered into before the commencement date."
Damages for Patent Infringement
S.62 (1) of the Patents Act 1977 provides:
"In proceedings for infringement of a patent damages shall not be awarded, and no order shall
be made for an account of profits, against a defendant or defender who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed; and a person shall not be taken to have been so aware or to have had reasonable grounds for so supposing by reason only of the application to a product of the word “patent” or “patented”, or any word or words expressing or implying that a patent has been obtained for the product, unless the number of the patent accompanied the word or words in question."
S.15 (1) of the 2014 Act insets the words “or a relevant internet link” after "number of the patent" and the following sub-section (1A) which provides that
"The reference in subsection (1) to a relevant internet link is a reference to an address of a posting on the internet—
(a) which is accessible to the public free of charge, and
(b) which clearly associates the product with the number of the patent.”
Art 5 of the Order provides that  s.15 does not apply in respect of the infringement of a patent referred to in section 62 (1) of the Patents Act 1977 where the infringement occurred before the 1 Oct 2014.

Revoking Invalid Patents
S.16 (4) of the Intellectual Property Act 2014 confers upon the Comptroller-General of Patents. Designs and Trade Marks a new power to revoke patents that are considered to be invalid following a request for an opinion under s.74A of the Patents Act 1977. Art 6 of the Order states that this power shall apply only where a request for an opinion is made after 1 Oct 2014.

Sharing Information with Overseas Patent Offices
S.18 of the Act permits the Comptroller to share certain information relating to unpublished patent applications to overseas patent offices. Art 7 of the Order makes clear that that does not apply to an application for a patent whose date of filing is before the 1 Oct 2014.

Seminar in Leeds
I shall be discussing the Act in detail in a presentation to the Leeds Business and IP Centre at 18:00 on 15 Oct 2014 as part of Leeds Business Week for which SRA, BSB and probably IPReg points will be available. This will be useful for patent and trade mark attorneys ans specialist lawyers as well as business leaders, designers, inventors and their investors. It is based on a talk that I gave on the 19 May 2014 in London. Further details are in "CPD Event - "The Intellectual Property Act 2014 - What it means to you and your clients" Leeds 15 Oct 2014 IP Yorkshire. If you want to attend please call my clerk on 020 7404 5252 or send me a message through my contact form.

31 August 2014

Who's Pink - Thomas Pink or Victoria's Secret?

In Thomas Pink Limited v Victoria's Secret UK Ltd [2014] EWHC 2631 (Ch) (31 July 2014) Mr Justice Birss had to resolve a dispute between two well known retailers. The claimant was Thomas Pink which had started life as a specialist shirt maker in Jeremyn Street. It is now part of the LVMH Group the interests of which range from champagne to fashion.

The defendant was Victoria's Secret UK which is best known for its bras and knickers particularly in the US where it began.

Both retailers are diversifying their businesses.  Thomas Pink's website has a section for "Women" after "New Collection", "Men", "Shirts", "Ties" and "Accessories" while Victoria's Secret is moving into women's clothing generally.

The Dispute
The battle arose over the right to use the word "Pink" as a brand. According to Wikipedia the claimant was named after Thomas Pink, an 18th-century tailor, who made the hunting coats worn by Masters of Foxhounds, whippers-in and huntsmen which are still called hunting pink even though they are actually scarlet in colour. The defendant has launched a new brand in the USA called Pink aimed principally at young women of college age which it wished to bring to Europe. To promote the PINK brand Victoria's Secret had opened a number of shops in the UK under that sign. In his judgment Mr Justice Birss exhibited photographs of one of the claimant's shops (top left) and one of the defendant's to the right.

Thomas Pink's Trade Marks
The claimant had registered the following Community and British trade marks:
  • EU 3,949,906 for a range of goods in classes 3, 14, 18, 25, 26 and 35; and 
  • UK 2,565,078 for a range of goods in classes 14, 18, 25 and 36.
It claimed sales under the sign PINK of between £23 and £28 million in the UK (and between £2 and £4 million in the rest of the UK) every year between 2005 and 2012 through its 35 outlets in the UK, its 2 in France and its further 2 in the Republic of Ireland.

The Issues
The claimant sued for infringement of its Community trade mark ("CTM") under art 9 (1) (b) and (c) of the Community Trade Mark Regulation and s.10 (2) and (3) of the Trade Marks Act 1994 and passing off. The defendant counterclaimed for the revocation of the CTM in relation to some of the specified goods on grounds of non-use and invalidation of the British mark on the ground that it was not distinctive.

The Counterclaim
The judge found that both the Community and British trade marks were valid. He held that the CTM had been put to genuine use for most of the goods for which it had been registered.  Though he decided that the British trade mark was not inherently distinctive at the time of registration he held that it had acquired distinctiveness through use. 

Trade Mark Infringement
Mr Justice Birss found that the defendant had infringed the claimant's Community and British trade marks under both art 9 (1) (b) and (c) and s.10 (2) and (3).

Art 9 (1) (b) and s.10 (2)
In determining whether the defendant had infringed the CTM under art 9 (1) (b) and the British mark under 10 (2) the judge considered the following factors:
"i) Average consumer
ii) Comparison between the goods or services
iii) What sign has the defendant used?
iv) Context of the use
v) Distinctiveness of the registered marks
vi) Evidence of actual confusion?
vii) Comparison between the registered marks and the signs
viii) Conclusions on likelihood of confusion."
At paragraph [117] he said:
"The likelihood of confusion is assessed from the perspective of the average consumer of the goods or services in question. The average consumer is always deemed to be reasonably well informed, observant and circumspect although his or her level of attention may vary depending upon the nature of the goods or services in question and how they are acquired. The average consumer is not a single person but represents a distribution of consumers; see the review of the law in this area by Arnold J in Jack Wills v House of Fraser [2014] EWHC 110 (Ch), paragraphs 63-65. Referring to Interflora v Marks & Spencer [2012] EWCA 1501 (Civ) the defendant emphasised that the average consumer test is normative and it falls to be applied objectively by the judge from the perspective of the relevant construct."
In this case the average consumer was a consumer of clothing and his lordship held that such a consumer has the following characteristics:
"i) The average consumer represents a spectrum of consumers who are from different backgrounds and shop in different ways; some will be tourists, others will be locals to an area, some will shop for themselves, and others will be buying a gift for someone else.ii) Although many consumers of clothing are very brand conscious that does not apply to all consumers. In my judgment the average consumer will exercise a moderate degree of attention to branding but will not scrutinise the fine print of swing tags and labels.
iii) Consumers of clothing vary enormously in their tastes and their means. At times in the argument the defendant appeared to be advancing a case which divided the average consumer into a consumer of low end clothing (who might buy the defendant's products) and a consumer of luxury clothing (who might buy the claimant's products). The extent to which this may be relevant to passing off is something which would only be relevant to that claim, but in relation to the question of registered trademark infringement for a mark registered for clothing it is not relevant. The average consumer represents consumers at all levels of the market.
iv) The average consumer represents both male and female consumers. In addition both sexes will buy products for themselves and for members of the opposite sex as presents.
v) Consumers of clothing shop in different contexts, sometimes people set out to buy a particular thing or to buy something for a particular occasion, but in other circumstances shopping is an end in itself and the consumer is simply browsing. As the claimant submitted, this is evidenced in large shopping malls such as Westfield or Bluewater or at a famous department store where shoppers might go and "have a wander" or perhaps drop into a shop which catches their eye.
vi) Where the average consumer shops in retail stores, he or she is likely to be drawn inside based on material visible from the exterior of the store including signage and promotions and in particular the name of the store and anything in the windows.
vii) Consumers come to expect that a shop front for example on a street or in a shopping centre represents a single store. Two shop fronts, even if adjacent, are not without some other indication going to be assumed to be linked to each other."
He then proceeded with the comparison of registered marks and signs and specified goods and goods for which the signs were used from the perspective of the average consumer and concluded that the use of the sign PINK as a label on clothing, at the point of sale, in promotional literature and on shop front fascias gave rise to a likelihood of confusion.

Art 9 (1) (c) and s.10 (3)
As for the claim under art 9 (1) (c) and s.10 (3) the judge considered the following factors:
"i) Reputation
ii) Link
iii) Due cause
iv) Detriment"
Since the defendant admitted that the claimant had a reputation at least in shirts. a link had been established for the claim under art 9 (1) (b) and s.10 (2) and detriment flowed from the link, the battle focused on due cause. The defendant argued it had used PINK in the USA for many years in essentially the same way it now sought to do in the UK and EU. It had due cause to use PINK in that way here because that activity was simply a natural extension of its substantial activities in the USA. It was not seeking to take advantage of Thomas Pink's rights. The goods it sold are distinct from the goods sold by the claimant. Although there had been a complaint by Thomas Pink in the USA some years ago there had now been co-existence there for a number of years and no evidence of confusion in the USA exists. Its US websites and catalogues have also made consumers here aware both of VICTORIA'S SECRET itself and PINK in particular.

Mr Justice Birss was not impressed. He said at paragraph [198]:
"The corporate group of which the defendant is a part has used PINK in the USA for many years in essentially the same way it now seeks to do in the UK and EU. From the defendant's point of view the activity complained of in this case is a natural extension of its substantial activities in the USA. It is not deliberately seeking to take advantage of Thomas Pink's reputation but the defendant did not pause to consider what the claimant's European or UK trade mark rights actually were before it launched here. It simply went ahead."
The Judge concluded "that the premise on which the defendant decided to enter the European market was adopted in good faith but it was wrong. A reasonable business knowing what the defendant knows now would not continue to act in this way."

Passing off
As the claimant had succeeded on trade mark infringement the judge did not consider that he needed to consider the case in passing off and decided not to do so.

As we have come to expect from Sir Colin since he was first appointed to the circuit bench some 4 years ago there is a lot of meat in his judgments and I have chosen to chew on some of the choicest bits. To my mind his formulation of the factors to be considered when making a similar signs and similar goods comparison has much to commend it and is an improvement on the formulation based exclusively on CJEU cases that are relied upon by hearing officers in our Trade Marks Registry. I found his identification of the average consumer particularly helpful. I also found his approach to the question of whether the defendant had due cause helpful. But this is a very long judgment and there is much in the transcript that I did not discuss for reasons of space which merits reading.

Should anyone wish to discuss this fascinating case or trade marks in general they are welcome to call me on 020 7404 5252 during normal office hours. They can also message me through my contact form, tweet me, write on my wall or message me through G+ and Linkedin at any other time.