In a reminder of the dangers of an aggressive marketing campaigns aimed at the trade marks of competitors, the Court of Appeal has allowed part of Specsavers’ appeal against the High Court ruling. The Court of Appeal has ruled that:

-          Asda’s cross-appeal over the use of the strapline “be a real spec saver at Asda” should be rejected because it took unfair advantage (under Article 9(1)(c) of the Community Trade Marks Regulation) without due cause of the distinctive character and use of Specsavers’ registered Community Trade Marks (CTMs).

-          Specsavers’ appeal that the strapline “spec saving at Asda” infringed its CTM should be upheld, also on the basis that it took unfair advantage under Article 9(1)(c).

-          Specsavers’ appeal under Article 9(1)(b) that the straplines and bespectacled logo used by Asda infringed its word and logo marks should be dismissed. For the appeal under Article 9(1)(b) to have succeeded, Specsavers would have had to show that the average consumer would have been likely to have been confused. Here, the overall marks gave a different impression to the average consumer. There was a difference between what the judge described as “living dangerously” and one who intended to confuse customers. This was more of a case here of unfairly taking advantage of the reputation of the brand owner’s mark (for which Specsavers succeeded under Article 9(1)(c)) rather than customers being confused.

-          A further query about a wordless logo mark should be referred to the European Court of Justice for clarification.

This ruling should come as a relief to brand-owners, who argued that the High Court interpreted the definition of “unfair advantage” too restrictively in delivering its initial ruling. The ruling of the Court of Appeal emphasised the importance of the market position held by Specsavers due to its brand and the fact that Asda had intended to target that market position in its advertising campaign. A winning result for the brand, although not everything is seen totally clearly yet until we get the ruling back from the European Court of Justice.

The ruling can be found here: http://curia.europa.eu/juris/document/document.jsf?text=&docid=115783&pageIndex=0&doclang=EN&mode=req&dir=&occ=first&part=1&cid=6211.

The Regulations will remain in force until September 2012, and similar regulations will come into force in Wales and Scotland.

India and China both have an established and successful generics based pharmaceutical industry and as tens of billions of pounds of  patent protected drugs come off patent soon (known as the “patent cliff”), they look set to benefit by releasing cheaper generic  alternatives – making themselves a small fortune in the process. Both the Wall Street Journal and BBC News have reported on the most recent victim of the patent cliff in which India-based firm Ranbaxy Laboratories Limited confirmed the release of an FDA-approved generic version of the 10 billion dollar a year drug “Lipitor” owned by the global pharmaceutical company, Pfizer. The new generic drug will be called “Atorvastatin” and with Lipitor’s patent having now expired, there is nothing Pfizer can do about it – except try to develop itself or buy in the next big thing from another research and developer.

With such a Robin Hood approach to pharmaceuticals there are mixed opinions about the impact the patent cliff is having on the pharmaceutical industry as a whole. The large pharmaceutical companies claim that the patent cliff is affecting their ability to raise funds for research and development which in turn is inhibiting advances in new and improved pharmaceuticals, to the detriment of patients. The smaller generic based companies and some consumer groups however are hailing the patent cliff as an opportunity to offer a wider-ranging and affordable selection of medicines to both the public and private sectors.

Laura Mole, from Matthew Arnold and Baldwin LLP’s Pharmaceutical and Life Sciences Sector Group Team, says, “Whilst I appreciate continued research and development in the pharmaceutical industry as a whole is vital for the production of new, more advanced drugs to combat human illness, I cannot help but see good quality, affordable alternative medicines as a good thing for the consumer and the NHS in these difficult financial times. More drugs will cost less so more patients will benefit. The important thing in the long-term, though, is that there is sufficient funding in the industry to incentivise continued research and development so that patients continue to benefit with further medical advances. More of the early-stage development is being done by start-up companies, with big pharma companies stepping in if the prospects look good.”

There are two totally independent Merck companies. This arose out of the Treaty of Versailles at the end of World War I, under which the two different Merck companies were each given exclusive rights to the brand in different territories.

German Merck claims that it held the rights to material on the web page at www.facebook.com/merck, but it has recently discovered that those rights were now being allocated to the US company. German Merck has no argument with US Merck – its complaint is with the social networking site, which it claims has been less than helpful over the issue.

This case shows the issues that can arise with owners of parallel brands existing in an ever-smaller global market.

The Court dismissed Folly’s arguments that “STALKER” had been used in conjunction with “tackle” as that was not always the case on its website. It also did not agree that “STALKER” was used in a descriptive sense, as that was not how Folly had used it. The Court also had no time for the arguments that “STALKER” was generic or had no distinctiveness.

All in all, the case brought was pure folly and the defendant should have found a better angle to win.

The ASA ruled that the actress appeared below the age of 16 in the advert, although this was disputed by Coty UK. The ruling was also based on the length of the dress worn and the relative positions of the actress’ legs and the bottle of perfume, all of which drew attention to her sexuality. The ASA ruled that the advert was in breach of the CAP Code, the code of practice aimed at ensuring that non-broadcast adverts and material on websites comply with certain minimum standards. As such, it was ruled that the advert should not appear again in its current form.

Responses are requested by 2 December 2011, and it is hoped that the code will allow broadcasters to self-assess whether advertising behaviour is discriminatory and, even if it is, whether it is justified.

The consultation document can be found here.

The IPO ruled that:

• the application represented the mark clearly and distinctively in line with the requirements of the Trade Marks Act; and

• any claim in relation to bad faith was made on the basis that Cadbury did not intend to use the colour on the whole of its packaging; given that Cadbury would at least have to have its product name on the packaging, this could not be considered bad faith – rather, the cause was legal and commercial reality.

In the interview, Holden promoted certain information about the law firm group “QualitySolicitors”, and a presenter of the programme was considered to have endorsed the promotion. Ofcom ruled that “undue prominence” had been given to QualitySolciitors during the interview and ITV had not given sufficient information to viewers as to why the brand was being promoted in an interview with an actress.

The ruling noted that ITV was providing refresher training to its production team to prevent a repeat of the breach.

The Department’s response to the consultation responses can be found here: http://www.culture.gov.uk/images/publications/GovtResponse_advertising_trade_london2012.pdf. The revised draft regulations are here: http://www.legislation.gov.uk/ukdsi/2011/9780111515969.

On appeal, the European Court of Justice has reversed that decision. Average consumers did not generally make assumptions about the origin of products based on the shape of the product or the packaging in the absence of a word mark on the packaging. It could be difficult to pass the threshold for establishing distinctive character. However, that did not mean that whether the threshold had been passed should not have been considered at all. It was not the case that since no bottle had been sold without a label, only the word mark would be a distinguishing feature for consumers. It was possible that the colour and matting of the glass of the bottle could have fulfilled the functions of a trade mark, but a proper test should have been done to assess that.

The European Court of Justice has backed up the French Competition Board’s decision. The ECJ looked specifically at the question of selective distribution networks. It said that establishing those networks are not prohibited by Article 101 if resellers are chosen based on objective criteria, where those criteria are applied uniformly and non-discriminately, where the characteristics of the products need to preserve the quality and ensure proper use, and the criteria only go as far as is necessary. However, provisions within those networks may still end up offending against competition law. The ECJ has not accepted arguments relating to the need to provide individual advice to customers and to ensure their protection against incorrect use of products in the context of non-prescription based products to justify an Internet sales ban. Contract provisions that effectively prohibited Internet sales meant that the benefit of the block exemption did not apply. That said, it would still be for the national court to ascertain whether the contract had an individual exemption, as the failure of an agreement to fall within block exemption parameters does not automatically mean that it will not be found to be individually exempt on other criteria.

It sounds like there’s music left to write on this one.

The High Court sided with Samuel Smith. Given the similarity of the white rose and Cropton Brewery’s name not being clearly identifiable on the front of the label, there was a likelihood that consumers would be confused. Cropton Brewery’s use of the white logo on the Yorkshire Warrior beer was in accordance with honest practices until October 2009, but not afterwards. It knew after that that the MoD had withdrawn the licence to use the logo and it was aware of Samuel Smith’s trade mark rights.

The Court added an interesting note on Samuel Smith’s letter to the supermarket. That had amounted to an unjustified threat of trade mark infringement, which was not allowed under the Trade Marks Act. However, that letter had not adversely affected the supermarket’s relationship with Cropton Brewery, as the supermarket had continued to commission beer from Cropton Brewery.

Trade mark owners need to take great care when wording letters claiming trade mark infringement as they can end up being the wrong-doer, but in this case no damage was done.

The recommendations of the Hargreaves Report that have been accepted are:

-          to create a digital market place where copyright licences can be traded (a “Digital Copyright Exchange”);

-          to allow an exception from copyright infringement for limited private copying, such as copying from a legally purchased CD onto a computer or portable device;

-          to allow an exception from copyright infringement for parodies of other people’s work without first having to obtain the owner’s consent;

-          to allow an exception from copyright infringement for search and analysis techniques known as ‘text and data mining’, which is currently illegal despite its benefits to medical and other science and for which advanced technology exists;

-          to establish licensing and clearance procedures for orphan works (copyright works for which the owner is not known); and

-          to review the role of the Intellectual Property Office.

At the same time, the Government has announced:

-          a new enforcement programme to protect intellectual property rights, which will be further investigated before any specific legislative measures are taken;

-          a notification system to inform Internet users of copyright issues and how to avoid illegal and pirated content; and

-          a five year international strategy to improve the efficiency and effectiveness of the international intellectual property system.

The Government has accepted the Hargreaves Report almost in its entirety, which is a refreshing response for an industry that for so long seems to have been desperate for reform. The reforms to copyright are intended to ensure that the law reflects reality, and for a consumer wanting to move music they have legally bought in the form of a CD onto their iPod, this is a huge step. However, it is the package as a whole which impresses – a Digital Copyright Exchange, a licensing system for orphan works, and reviews of enforcement and international strategies – whilst giving the Government a lot to be getting on with, suggests that intellectual property law in the UK is getting the facelift that many have been demanding for a long time.

The ECJ ruled that Viking was not prevented from offering the refill service by Kosan’s trade marks on the bottles due to the fact that:

• it was industry standard to offer refills of such bottles, regardless of their shape; and
• the bottles were expensive (compared to the gas that would go inside them), had independent economic value and were designed for re-use.

As such, the ECJ ruled that it was unlikely that a consumer might assume a connection between Kosan and Viking, especially as Kosan’s bottle labelling remained intact and Viking had sticky labels to refer to its gas. The ECJ further ruled that a consumer would be unfairly restricted if, having bought the bottle, they could only have it refilled by one supplier, as the bottle had certain advantageous technical characteristics.

Simon Weinberg, solicitor in the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, comments, “This case is interesting as it shows a situation where the industry standard was for the bottles to be refilled, avoiding any contention that a consumer may assume a connection between the supplier and the refiller. This contrasts with another recent case in the High Court in which cage containers for bottles could not be refilled with different bottles due to the confusion it might cause a consumer in thinking that both the bottles and the caged container came from the same source. Although the rulings come from different courts, the contrast clearly shows the importance of industry standards in trade mark rulings.”

The ECJ has now delivered a dramatic ruling as follows:

• Where goods are advertised from outside of the European Economic Area and they have not been put on the market within the EEA with the brand owner’s consent, there is trade mark infringement even where the goods are just targeted as being offered or advertised for sale within the EEA without having to show further that they were actually put on the market in the EEA.
• It would be for a national court to rule on what was meant by “targeted”, but the mere fact that a website was accessible from a particular country would not be enough to satisfy that. The national court would need to consider the context of the offer, such as whether the territory was included in a list of countries to which the seller was willing to send the goods.
• Consumers do not “use” the brand in a trade mark sense when they use the eBay service. However, in this particular case, the people using eBay were deemed to be businesses as they were selling goods in the course of a trade, so they were “using” in a trade mark sense.
• The operator of an online marketplace like eBay does not generally “use” a third party’s trade marks (like L’Oréal’s) when its users advertise goods under those marks.
• However, its exemption from liability for its users’ actions under the E-Commerce Directive is removed when, as in eBay’s case, the operator of an online marketplace buys advertising keywords that are identical to the trade marks in order to optimise the presentation of the online offers. In that case, it is playing an “active role”.
• For the “active role” to apply and the operator to have liability, the trade marks have to be used on the site itself rather than in a sponsored link.
• Where an Internet service provider does not play an “active role”, such that it does not have knowledge or control of the unlawful advert, it is exempt from liability under the E-Commerce Directive, assuming it acts expeditiously in taking down the offending material as soon as it discovers the offending material.
• An online marketplace is not deprived of the exemption from liability merely because it stores offers for sale on its servers, sets terms of service, is paid for the service or provides general information to its users. However, the line is crossed if the online operator helps its customers in other ways such as by promoting or optimising its customers’ adverts. It was then no longer taking a neutral position and had taken an active role.
• Member States must ensure that trade mark owners can obtain an effective, proportionate, dissuasive injunction to stop infringers. This means ensuring effective protection for intellectual property rights. To do this, national courts should have the power to require online service providers to take steps not only to prevent a current infringement but also further infringement. It could be too much to expect ISPs to actively monitor all the data of its customers, but if it is aware of a particular problematic customer, it should not be able to wait until it is told again but there may, for example, be the need for an injunction ordering the ISP to suspend the account of the infringer so as to prevent further infringements by that user.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case creates two interesting developments. Firstly, taking an active role by optimising the material on its site could leave an ISP open to liability. Online intermediaries should therefore reduce their active involvement where they may be at risk of having liability for that content. Previously, they had assumed that they were not liable for their users’ activity unless they were informed otherwise.

“The second major impact is the wider-ranging injunctions mentioned by the ECJ. This could lead to actions by rights holders to try to get an injunction against ISPs to require them to shut down serial infringers’ accounts.”

The two magazine adverts, one relating to “Teint Miracle” foundation by Lancôme featuring the actress Julia Roberts and the other relating to “The Eraser” foundation by Maybelline and featuring the model Christy Turlington, were intended to show how well the foundation worked to have an anti-ageing effect by covering wrinkles. They were challenged by Jo Swinson, an MP, for being misleading and not representative of the results that the products could actually achieve. L’Oréal, owner of both Lancôme and Maybelline, produced evidence that both products were capable of improving the skin’s appearance, and also argued that the subjects, Julia Roberts and Christy Turlington, had naturally healthy skin which added to the effect of the adverts.

In both instances, the ASA ruled that the claims made in the adverts as to the effect of the products were supported by the testing evidence that L’Oréal had produced. However, the ASA also ruled that the image used in each advert was not an accurate reflection of the results that could actually be achieved by using the product. As such, both adverts were ruled to be misleading and cannot appear again in their current form.

The adverts breached the CAP Code. The CAP Code is a code of practice governing the content of adverts and marketing communications and is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

The ASA rulings can be found here and here.

The European Court of Justice has ruled that Fiorucci could object to Edwin’s registration, despite the fact that the rights in the mark had been sold. A well-known person can take advantage of these rights and stop a Community Trade Mark being registered if national law allows that person to object, so said the EU’s top court.

Delta replaced Shütz’s bottles with new bottles produced by different manufacturers and sold the containers on. Delta included various disclaimers on the containers once the bottles had been replaced relating to the bottles themselves, but Shütz issued proceedings for infringement of trade marks and passing off.

The High Court ruled that passing off had been established, and that the replacement of bottles by the defendant infringed the claimant’s trade marks, both in relation to the bottles and the container as a whole, as an end user would see the Shütz name on the cage and presume that the bottles were also manufactured by Shütz. The High Court rejected Delta’s argument that the relevant consumers were the bottle fillers rather than the end users. The High Court considered that the disclaimers included on the containers by Delta were not sufficient to inform an end user that only the cage was from Shütz as they were not positioned prominently, were worded ambiguously and could come off as they were not well attached.

The High Court ruled in favour of the claimant under section 10(2) of the Trade Marks Act 1994, as the marks and services were similar and there was a likelihood that the average consumer would be confused or make a connection between the claimant’s website and the defendant’s business. The High Court rejected a claim for trade mark infringement under section 10(1) – which protects trade mark owners against identical marks for identical services. The telephone recordings did not show that Client Connection had no real prospect of success of showing that it was using a different name, but in any event the services were not identical. The High Court added that, if a claim under section 10(2) had failed, the ruling would have been in favour of the claimant under section 10(3) as the claimant’s business of cold-calling under its trading name might tarnish the claimant’s reputation whilst using the claimant’s reputation for its benefit.

The defendant had issued a counter-claim that the trade marks lacked distinctiveness and were too descriptive and were thus invalid, but the High Court rejected the counter-claim on the grounds that the trade mark was highly distinctive due to its use over a number of years.

Virgin launched a website claiming that rivals were not keeping their promises in relation to broadband speeds, providing a link to the Ofcom report and featuring a video parody of a rival’s advertisement of its broadband speeds. The website asked its users to share the information, and the advert became viral.

The viral aspect of the campaign allowed the ASA to apply the CAP Code to it, and the ASA ruled that the advert went beyond highlighting the disparity that Virgin believed existed between broadband speeds advertised when compared to those delivered. The ruling stated that the campaign implied that Virgin’s rivals were dealing dishonestly with customers, and that meant the campaign cannot appear again in its current form.

Virgin had argued in its defence that the campaign was intended to highlight customer dissatisfaction with its rivals advertising, and followed up the ruling by calling for Ofcom to force broadband providers to advertise typical broadband speeds rather than ‘up to’ speeds.

FP issued proceedings for alleged breach of contract, infringement of copyright and passing off, claiming that the defendants had breached the trading agreement by adopting a logo that was a replica of the ‘Edge’ title logo used on the cover of the gaming magazine. The defendants were also accused of making statements that FP and the defendants were associated.

The High Court has ruled that the use of the obvious replica logo by the defendants had fundamentally breached the agreement, which allowed FP to terminate. In addition, their actions were considered by the High Court to be passing off (as FP had goodwill, there had been a misrepresentation and customers would be confused), as well as copyright in the logo having been infringed.  Furthermore, despite the fact that there had been passing off due to statements being made on the defendants’ website, their trade mark was also held to be revoked for non-use as the US-based defendants did not conduct any genuine business in the UK – despite having infringing statements on their website that were directed at UK customers.

The court said that the Bangladeshi airline’s name was so similar to the US airline name that consumers would ignore any difference between “airline” and “airways” and as the services were the same (despite the routes being different), Section 10(1) was breached. Section 10(1) says that it is an infringement of registered trade mark rights if the same mark is used in respect of same services. Section 10(2) deals with similar names or similar services but with a likelihood of customer confusion. Section 10(3) relates to taking unfair advantage of another strong brand for example use of a name in bad faith. As to passing off, the US’s goodwill was made out, and it was clear that the Bangladeshi company’s use of the name would mislead consumers and cause confusion. There was no realistic prospect of defending any of those four claims, let alone all of them, and so summary judgment was awarded.

However, ICANN is building safeguards into the new system. It would cost US$185,000 to apply for a relevant suffix and the organisation would need to show that they have a genuine claim to that name. They would also need to prove that they meet high technical standards, with IT robustness and intellectual property protections for the brand. The application form would also involve about 50 questions to answer, with each question about 2-3 pages. It will not be easy, but domain name addresses will not look the same again in just a few months’ time as global brands start to change the look of the Internet landscape.

The court ruled that the claimant had built up goodwill in the local area through a long period (although under different owners), and that, despite coexisting with the defendant for six years, the defendant was committing a misrepresentation when trading in the same area (although the court admitted that trading in that patch was rare).

The court ruled that an injunction be issued to prevent the defendant trading under the name ‘Redwood Tree Surgeons’ within specific postcodes in order to protect the goodwill of the claimant and to prevent the passing off of the defendant’s business. In other places, the business could carry on trading as normal.

The ruling is an interesting example of how the courts can tailor their response to a passing off action to a specific location and depending on the size, triviality and effect of the passing off. To obtain wider protection rather than have to prove goodwill and the location of that goodwill, businesses should consider obtaining a registered trade mark, which would give them exclusive rights to use a particular name across the whole of the country for particular goods or services.

The different strands had co-existed for many years and even entered into a trade mark co-existence agreement in 1985 to apportion their various rights. Things became more heated when the two different strands entered into the same field of Formula One racing.

Group Lotus, the car manufacturer, brought a claim for breach of contract, passing off and trade mark infringement against a number of entities involved with the ‘Team Lotus’ Formula One racing team. The parties made various claims and counterclaims against each other relating to the trade marks, including infringement, invalidity and passing off, and there were accusations of repudiatory breaches of a merchandising licence. The facts of the case were very complex based on their developed relationships over time and previous acquiescence to what had gone on before.

In what was effectively a maintenance of the status quo, the High Court dismissed all claims and counterclaims relating to the passing off and infringement of trade marks, except for a revocation claim affecting the defendant’s trade marks as they had not been put to genuine use in the UK for a period of at least five years, when Team Lotus had stopped fielding a Formula One team.

The High Court ruled that the claimant was entitled to terminate a 2009 merchandising licence agreement for a breach by the defendant, and as a result could claim damages for breaches relating to the production of unlicensed products. The High Court also rejected a claim for post-termination misuse of the Lotus name, on the grounds that the defendant still had goodwill in the name and was entitled to continue to use it.

Of most interest in this multi-faceted battle was that the High Court decided that both parties had acquired goodwill in the same name and that goodwill had been retained by the defendant even during the period in which it stopped using the name; and, due to the fact that some entities enter several teams in Formula One under the same branding, the public would be unlikely to confuse the two Formula One teams using the Lotus name.

Therefore, both teams were free to start the race.

The ASA gave two reasons for the ruling:

1. The adverts should have made clear to consumers how they could verify the claims made.
2. The adverts were considered to be misleading as they did not accurately reflect market research on which they were based.

The importance of this ruling is that an advertiser must take care in what information is contained in a comparative advertisement. In order to comply with the CAP Code, an advertiser must enable a consumer to be able to verify the basis of the comparative claims made in the advert. This can be contained in the small print, but must actually be able to guide a consumer to see the data on which the comparison is made so that they can verify the advert personally.

The CAP Code is a code of practice governing the content of adverts and marketing communications, and it is administered by the ASA. Although the Code does not have legal force, it is best practice to comply with it, as failure to do so can result in bad publicity and ultimately an inability to obtain advertising space.

The website is effectively a search engine which will list approved retailers for a particular brand. TSI have been keen to point out that the website is not a one-stop-shop, as some legitimate retailers may not be on the list. However, the website is likely to help divert consumers away from rogue retailers in an attempt to bring down the number of counterfeit goods on the market – 5 million counterfeit items were seized by the UK Border Agency in 2010.

• Continued push for a single European Union patent system.
• Modernisation of the European Community Trade Mark system. This would include speeding up the registration procedure and increasing certainty over what constitutes a registrable trade mark.
• Creating a comprehensive framework for copyright in the digital single market. That would include multi-territorial collective management of copyright so that there would be online copyright licensing. There would also be a consultation on user-generated content to see if there should be more freedom for amateur producers of non-commercial film to be exempt when incorporating other copyright works. In addition, the Commission said it would propose a Directive on permitted uses of orphan works, and it actually proposed the Directive this at the same time as the strategy document.
• Replacement of the Customs Regulation to strengthen enforcement of intellectual property rights. As with the orphan works proposal, this was also introduced at the same time as the publication of the strategy.

For more on the strategy, click here: http://ec.europa.eu/commission_2010-2014/barnier/headlines/news/2011/05/20110524_en.htm.

The Court of Appeal has upheld the High Court’s decision to award summary judgment in favour of the US company. The purpose of the agreement had been to demarcate the field of goods rather than deal with the classes in which the goods could be registered. It was not necessary to imply a term dealing with this. The ruling will ensure certainty amongst contracts and in particular to give effect to coexistence agreements.

• Creation of a Digital Copyright Exchange. This would be a centralised digital copyright works marketplace where licences to copyright content could be readily bought and sold, akin to a copyright shop. This would extend what currently happens with through music collections agencies such as PRS. The aim is to have this implemented by the end of 2012. In addition, the UK should support the European Commission’s proposals to establish a framework for cross-border licensing.
• Introduction of legislation to permit use of orphan works – copyright works where the rights owner has not been ascertained. The European Commission has also come up with similar plans recently.
• Allowing wider exceptions for lawful copying, such as to include format shifting between a laptop and mp3 player, which is still unlawful. This may also include copyright exceptions for non-commercial research, such as digital copying of medical journals for computerised analysis in research. Parody and library archiving would also be exceptions to copyright. The exceptions would be enshrined in law and non-excludable by contracting out by agreement between the parties. There is no place in the report for anything as extensive as the “fair use” exception along the lines that US law has, as that would not be compatible with European Union law.
• Increasing the Intellectual Property Office’s ability to give legally binding opinions on changes to intellectual property law in response to economic or technological changes.
• A careful look at the enforcement of intellectual property rights. The Government should look not just to enforcement but also education, growing legitimate markets and modernising copyright law. Other countries’ experiences should be considered when the Digital Economy Act starts to become operational in 2012.
• Try to remove patent thickets that stifle innovation. Thickets arise where there are overlapping patent claims by multiple applicants, resulting in delays and extra costs in innovation. This should involve cutting backlogs in patent applications. There should also be a disincentive – perhaps through cost of additional fees for patent renewals – to discourage patents that do not add much value. Computer-related patent rules also need to be clearer and stricter to avoid patents being granted for non-technical inventions or business methods.
• Investigate whether the system of protection for designs should be made clearer. The Intellectual Property Office should conduct an assessment based on evidence within the next 12 months to consider the relationship between design rights and innovation.

It now remains to be seen what the Government will do in terms of implementation of the recommendations within the report. There have been other intellectual property reviews previously – most notably the Gowers Review – which were not then followed-up significantly.

• The rights and procedures regarding seizing infringing material would extend from the current position which catches goods infringing patents, trade marks, copyright or design rights. It would also cover trade names and semiconductor topographies.
• Parallel imported goods contrary to European Union law would also be seized.
• A new quicker procedure would be established to enable customs authorities to deal with goods abandoned by their owner for destruction without having to go through formal legal proceedings if the owner does not object within a short period of time.
• Have a new procedure whereby rights owners do not need to be involved with the destruction of small consignments.

In response, Espana’s Spanish representatives put forward a strong position defending Espana’s rights. They stated that Best Buy US’s use of the mark in Europe and particularly in Spain at the time created a conflict with its intellectual property rights, which would entitle it to take appropriate legal action to protect its interests. It added that its “Best Buy” brand had become distinctive and reputed. Use by the US group would cause confusion and lead to an unacceptable association with Espana’s products, causing irreparable and irreversible damage. Examples were given. The letter finished with three paragraphs that opened the door to a negotiated solution if there was sufficient compensation, but that the US group should refrain from using the mark until a negotiated solution was reached. The letter suggested a process to reach agreement.

An agreement was not reached and Best Buy US sued for unlawful threats, contrary to UK trade mark law. Under Section 21 of the Trade Marks Act, it is unlawful to threaten someone else with proceedings for registered trade mark infringement except for their application of the mark to goods or their packaging, their importing of the goods or the supply of services under the mark. The High Court threw out Best Buy US’s claim. However, on appeal, the Court of Appeal has sided with Best Buy US.

The Court of Appeal ruled that Espana’s response letter could amount to a threat. Despite the last three paragraphs of the letter that attempted to settle the matter amicably, the question to be answered was what a reasonable person receiving the letter with knowledge of all relevant circumstances at that time would have understood the writer of the letter to have intended. Following that test, a threat of proceedings had been made by Espana’s representatives, as it stated that the registered marks were distinctive and reputed and it would entitle Espana to take appropriate legal action to defend its interests. A reasonable recipient would have interpreted that to mean not just that Espana was asserting its legal rights but was intending to enforce those rights against Best Buy US. It was clear that the threat related to all of the EU and this included the UK. Accordingly, this threatened legal proceedings in the UK, thus bringing into play the UK’s unlawful threats provisions. The Court of Appeal added that although the letter related to use of the mark in connection with services (retail), it also referred to use of the mark in advertising and the media, which brought it outside of the exceptions to Section 21.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “This case illustrates the dangers of sending threats of trade mark infringement. Letters and emails need to be carefully written to come within the law. Otherwise, the person looking to strongly assert its own rights may end up being the wrong-doer. The particular facts of this case also show the dangers of non-UK lawyers communicating in a way that could impact on UK use of the rights, which could bring the UK Trade Mark law into play in a way that may not have been envisaged. This area is a minefield and specialist UK trade mark law advice should be sought when seeking to protect brands.”

The brand was launched by Tesco earlier this year in an attempt to compete on a higher level in the yogurt industry. However, Eckes-Granni argues that the ‘Yoo’ name is too similar to its ‘Yo’ branding used for fruit syrups, and for which it has held a European Community Trade Mark since 2009. Tesco has countered by arguing that consumers would not be confused between the two brands.

The filing of an opposition is similar to issuing court proceedings. The Intellectual Property Office will now collect evidence and try to decide whether Eckes-Granni’s trade mark rights would be infringed by the later mark.

Whoever said yogurt was good for you (or should that be “yoo”)?

Yell successfully sued for registered trade mark infringement and passing off in the England and Wales Patents County Court, despite the websites being operated from abroad. The judge said that there was no law that a company situated abroad but using a website to commit acts in this jurisdiction escaped liability for those acts.

The High Court agreed that there had been trade mark infringement by using the same name in respect of similar goods, with a likelihood of confusion. Of particular interest was the fact that the need for there to be a likelihood of confusion was satisfied even if the confusion arose after purchase. The High Court said that this proposition was supported by case law from the European Court of Justice.

The Advocate General said that there was no infringement of Interflora’s rights under Article 5(2) of the Trade Marks Directive. Article 5(2) prohibits use of a sign which is identical or similar to a trade mark with a reputation in a way that takes unfair advantage of, or is detrimental to, the distinctive character of the mark. For Article 5(2) to apply, the offending advert would need to mention or display the mark, and either the trade mark is used as a generic term in the advert or the advertiser seeks to benefit from the power of reputation or prestige to exploit the marketing effort of the trade marked image. Since M&S did not display the mark in its advert, that would not be a problem for M&S here.

However, Article 5(1) of the Trade Marks Directive was an issue for M&S. Article 5(1) can enable a trade mark owner to prohibit use in the course of a sign identical to its trade mark in respect of identical goods or services. This can apply when it has been selected as a keyword to be used in keyword advertising on Internet searches without the trade mark owner’s consent. The trade mark owner is entitled to prohibit that conduct when the ad does not enable an average Internet user without difficulty from ascertaining whether the goods or services in the ad originate from the proprietor of the trade mark or a linked entity. It was already established that this be a problem where the trade marked term was used within the ad itself and it did not sufficiently distinguish the advertiser from the trade mark owner. However, this case was a bit different, because Interflora was a well-known mark representing a commercial network of different businesses; therefore, even though M&S did not use “Interflora” within the advert, it was more likely that consumers may have difficulty deciding whether M&S was linked with Inteflora or not. Consumers may well think that M&S was part of the Interflora network.

We await the full ruling of the European Court of Justice in this important case. Advocate Generals’ opinions are often followed, though. If followed, this case could well strike a warning to people who think they are safe to sponsor a competitor’s trade mark in keyword advertising as long as they do not mention the competitor in the ad itself. Watch this space…

The consultation on the draft regulations ends on 30 May 2011. The consultation can be found here: http://www.culture.gov.uk/images/consultations/ConsDoc_Regulations_on_Advertising_and_Trading_London_2012.pdf.

The High Court has agreed with Kingspan. Rockwool had used Kingspan’s trade marks. However, the comparative advertising was not objectively fair and therefore did not comply with the Misleading and Comparative Advertising Directive. Accordingly, the misleading comparative adverts could not be justified under the Trade Marks Act. The adverts had not only wrongly used the same mark in respect of the same goods, but it had also taken unfair advantage of and was detrimental to the distinctive character of a mark with a reputation. The judge found several things wrong with Rockwool’s campaign that made it fail the test, including falsely representing: that Kingspan’s products were not safe when properly installed; they had huge implications in respect of escape times and structural damage; what happened in real life, when the products were not installed as they would be in real life; and that two of the products were roof boards and not surface products.

Many businesses from hot dog stands, to cafes, to hotels to transport companies see a great opportunity to make some money off the back of the London 2012 Olympics. However, the official organisers of the Games have significant intellectual property rights in the brand and also specially passed Acts of Parliament within their armoury. Businesses need to be very careful before associating themselves with the Games unless they are official sponsors, because they may receive fines and court orders if they step over the line.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “We are no doubt going to see ever more attempts by counterfeit suppliers to make illegal money off the back of the Olympics. At the same time, there is going to be ever increased attempts by official Olympic organisers to stop this. There should be plenty more high profile cases in the next year and a half.”

The High Court ruled that two Community Trade Marks had been infringed by WHG, as the goods and services covered by WHG’s marks were similar to those of 32RED’s and confusion between them by an average online gambler was likely. The court ruled that the marks themselves were also similar, suggesting that the conclusion that the casinos were under common ownership or control was possible, and to the average online gambler it would be surprising if they were not connected in some way. The confusion was detrimental to 32RED due to its highly distinctive brand and reputation when compared with that the defendant.

The court rejected a claim by WHG that 32RED’s trade mark, in referring to a roulette result, was descriptive of the goods and services being offered by an online casino and therefore invalid under the Community Trade Mark Regulation.

The court also rejected WHG’s argument that the United Kingdom trade mark registered for the number 32 lacked the necessary level of distinctiveness. Importantly, it said that a two digit number could be sufficiently distinctive. However, the court ruled that this particular mark had not been infringed as it had only been registered two months before WHG stopped using its signs and 32RED had not acquired any separate reputation in that number.

Simon Weinberg, a solicitor in the Commercial/IP/IT team at Matthew Arnold & Baldwin LLP and assistant editor of Upload-IT, comments: “32RED has shown how important it is to have a strong brand supported by registered trade marks. In the face of a threat to its business success through trade mark infringement, it was able to show that it had taken time to decide on its distinctive branding and had sought to protect it. This should be a guide to all small and medium businesses – spending a bit of money now may help in the future to protect the business that you have fought so hard to grow”.