Exhaustion, economic links and “unitary control” – the AG’s opinion in the Schweppes trade mark reference

Trade mark rights may still be exhausted even if goods are imported bearing identical trade marks (having been applied in another EU Member State (MS) by a separate entity) where, given the economic links between the trade mark holder and the entity applying the trade mark in the exporting MS, it is clear that the marks are under “unitary control” and that the proprietor of the mark in the importing MS has the possibility of determining directly or indirectly the goods to which the trade mark in the exporting State may be affixed and of controlling their quality.

This was the Opinion of Advocate General Mengozzi (delivered on 12 September 2017), in Case C291/16 Schweppes SA v Red Paralela SL, referred to the CJEU by the Commercial Court of Barcelona.  Schweppes SA, the Spanish subsidiary of the Orangina Schweppes Group, opposed the importation into and/or marketing in Spain (where it owns the trade mark SCHWEPPES) of Schweppes branded tonic water which had come from the United Kingdom, where that mark had been applied by and is owned by Coca-Cola.

Exhaustion of rights is an area mentioned as requiring immediate consideration in the recent Commission paper on the future of IPRs in Europe post-Brexit (see our blog posting on this here).  Once outside the EU the EU-wide exhaustion rules would not apply to marks applied in the UK, but it is possible that the UK courts might consider applying international exhaustion principles in their place, barring any other provision on exhaustion enacted by the UK Government in advance of the UK’s withdrawal from the EU.

Author

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
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+44 20 7466 2217

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Filed under Brexit, Consumer products, EU, Trade marks & Passing-off, UK

Commission paper on IPR post-Brexit highlights the importance of resolving key issues prior to withdrawal

The European Commission has published a “Position paper transmitted to EU27 on Intellectual property rights (including geographical indications)” (7 September 2017) which proposes that the (Brexit) Withdrawal Agreement should ensure that:

  • The protection enjoyed in the United Kingdom on the basis of Union law by both UK and EU27 (the remaining EU states) holders of intellectual property rights having unitary character within the Union before the withdrawal date is not undermined by the withdrawal of the United Kingdom from the European Union. The paper suggests there should be automatic recognition of an IP right in the UK on the basis of the existing, unitary character IP right i.e. that, for example, any EU trade mark rights applying in the UK prior to Brexit should be automatically replaced by UK rights post-Brexit. Further, the fact that use may not be in the UK should not be able to form a basis for revocation of the rights. The implementation should be not result in any financial cost for the IPR holders and any administrative burden should be kept to a minimum.  The paper also requires that the UK Government put in place a system to continue the protection of Geographical Indications (GIs) and protected designations of origin (PDOs) which are currently legislated for under EU law and for which there is no current domestic legislation in the UK. However there is no suggestion of a reciprocal recognition of UK-based PDOs or GIs post-Brexit.
  • Procedure-related rights (e.g. right of priority) in relation to an application for an intellectual property right having unitary character within the Union still pending on the withdrawal date are not lost when applying for an equivalent intellectual property right in the United Kingdom ie. that where an application is in progress at the point of the UK’s withdrawal from the EU, the applicant should be entitled to keep the benefit of any priority date when applying after the withdrawal date for an equivalent IPR in the UK.
  • Applications for supplementary protection certificates or for the extension of their duration in the United Kingdom on-going before the withdrawal date are completed in accordance with the conditions set out in Union law (and any certificate so granted or extended should provide for protection equivalent to that provided for by Union law.
  • Databases protected in the EU27 and the UK before the withdrawal date continue to enjoy protection after that date. This involves waiving the requirements of Article 11(1) and (2) in the EU27 Member States in respect of UK nationals and UK companies and firms; and the UK should not exclude EU27 nationals and EU27 companies and firms from legal protection of databases in the UK on nationality or establishment grounds. No provision for any continuing mutual recognition of database rights is referred to however.
  • Exhaustion before the withdrawal date within the Union of the rights conferred by intellectual property rights is not affected by the withdrawal of the United Kingdom from the European Union. The conditions for exhaustion of each IPR should be those defined by Union law.

These points highlight the key areas that have concerned IP stakeholders since the Brexit referendum and serve as a timely reminder to the UK Government that these issues need to be dealt with prior to Brexit, in one way or another.

Joel Smith, Head of IP at Herbert Smith Freehills, commented,Whilst it is reassuring that the Commission recognises that there are important issues for continuity of IP protection to be addressed upon Brexit, this paper only begins to scratch the surface for the number of issues that need examining by UK Government”.

Author

Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
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+44 20 7466 2217

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Filed under Brexit, Consumer products, Databases, Designs, EU, Pharma, Technology, media & telecommunications, Trade marks & Passing-off, UK

Unified Patent Court Agreement still on pause despite 14th ratification

Lithuania has now ratified the UPC Agreement (UPCA) (on 24th August 2017) making it the 14th state to do so (see the UPCA ratification index here).

Under the terms of the UPCA, the Agreement can only come into effect once at least 13 contracting states have ratified, but these must include France, Germany and the UK (if all other ratifications are in place prior to Brexit) or Italy (if post-Brexit). France and Italy have already ratified, as have Austria, Belgium, Bulgaria, Denmark, Estonia, Luxembourg, Malta, the Netherlands, Portugal, Sweden and Finland.  Once all the required ratifications are in place the UPC can commence on the first day of the fourth month after the last required ratification.

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Filed under EU, Patents, Pharma, Technology, media & telecommunications, The Unified Patent Court and the Unitary Patent, UK

Striking a balance on parallel imports

In an article published in the latest edition of CITMA Review, Joel Smith and Emily Bottle comment on the Court of Appeal’s recent judgment in Flynn Pharma Ltd v DrugsRus Ltd [2017] EWCA Civ 226.

This case examined how a balance can be struck between a trade mark owner’s ability to enforce its rights and the fundamental principle of free movement of goods, applying the law in detail to an unusual pharmaceutical fact pattern. Lord Justice Floyd’s detailed analysis of the scope of Article 36 TFEU is a very useful summary of the case law in this area. He confirms that trade mark owners can enforce their marks against imported goods that they did not place on the market and over which they have no control, even where the imported goods are identical goods produced by the same manufacturer.

For the full article, see here.

Author

Joel Smith
Joel Smith
Head of IP - UK
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+44 20 7466 2331
Emily Bottle
Emily Bottle
Associate
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+44 20 7466 2525

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Filed under EU, Pharma, Trade marks & Passing-off, UK

Estonia ratifies the UPC Agreement – 13 ratifications now in place – just Germany and the UK to go

Estonia ratified the UPC Agreement (UPCA) on 1 August 2017, making it the thirteenth contracting member state to do so (see the European Council’s ratification index here). Under the terms of the UPCA, the Agreement can only come into effect once at least 13 contracting states have ratified, but these must include France, Germany and the UK (if all other ratifications are in place prior to Brexit) or Italy (if post-Brexit). France and Italy have already ratified, as have Austria, Belgium, Bulgaria, Denmark, Luxembourg, Malta, the Netherlands, Portugal, Sweden and Finland.  Once all the required ratifications are in place the UPC can commence on the first day of the fourth month after the last required ratification.

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Filed under EU, Patents, Pharma, The Unified Patent Court and the Unitary Patent, UK

Aldi encounters hiccup in the “Champagner Sorbet” CJEU reference

The use of the name “Champagner Sorbet” by the German supermarket chain Aldi for a sorbet dessert containing actual Champagne (12% by volume) was challenged by the Comite Interprofessionel du Vin de Champagne (trade association for Champagne houses) as unapproved (infringing) use of the Protected Designation of Origin (PDO), “Champagne”.

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Filed under Advertising, Consumer products, EU, PDOs

EPO Administrative Council clarifies patentability position of plants and animals

From 1 July 2017, the EPO will no longer grant patents for plants and animals exclusively obtained by means of an “essentially biological process”. This follows a European Commission Notice dated 8 November 2016 (please click here for the full text of the Commission Notice) clarifying that the EU legislator had intended to exclude such plants and animals (either in whole or in part) from patentability when adopting the EU Directive on biotechnological inventions (Directive 98/44/EC) (the “Directive“).

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Filed under Agribio, Agribusiness, Patents, Uncategorized

Luxury brands may be able to limit to the types of on-line sales platforms used by their distributors if AG’s Opinion is followed by CJEU

Brand reputation is intimately connected with the manner and context in which products are purchased, so the Opinion of the Advocate General of the CJEU in the Coty (C‑230/16) reference (issued on 26 July 2017) will be welcomed by luxury brand owners seeking to maintain the highest standards for their brands.

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Filed under Advertising, Consumer products, EU, Technology, media & telecommunications, Trade marks & Passing-off, Transactions, UK

UK SUPREME COURT ADOPTS NEW APPROACH TO PATENT INFRINGEMENT

The Supreme Court has redefined the UK approach to determining patent infringement. In doing so, it has made the approach more permissive, seeking to align the UK approach with that taken in other European countries. Continue reading

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Filed under Patents, Pharma, Technology, media & telecommunications, UK

Herbert Smith Freehills wins IP Team of the Year at the Lawyer Awards

Herbert Smith Freehills has been named IP Team of the Year at The Lawyer Awards 2017, for its work defending one of the largest-ever patent cases to be heard in the UK High Court.

Earlier this month, Herbert Smith Freehills was also awarded Transatlantic IP Team of the Year at the American Lawyer Awards 2017, for the team's successful work on Gilead (and was also named Litigation Team of the Year for work on the disputes surrounding the collapse of the Nortel Networks group).

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Filed under Awards, Patents, Pharma, UK