COVID-19: Pressure points: UK Government disables domain names and social media accounts involved in selling fake or unauthorised COVID-19 products

On Saturday (4 April 2020) the UK Government issued a press release on how the medicines and medical devices regulator, the Medicines and Healthcare Products Regulatory Agency (MHRA), is investigating the increasing number of bogus medical products being sold through unauthorised websites claiming to treat or prevent COVID-19 cases of fake or unlicensed COVID-19 medical products.

These concerns were reflected in our blog post of 2 April, COVID Counterfeits, which identified many of the problems facing business supply chains caused by the opportunities that unscrupulous parties see arising from the pandemic, and suggested ways to deal with them using intellectual property rights and advertising regulations inter alia.

The Government’s press release refers to “self-testing kits, ‘miracle cures’, ‘antiviral misting sprays’, and unlicensed medicines” as being amongst the products being promoted, and states very clearly:

At this time, there are currently no medicines licensed specifically for the treatment or prevention of COVID-19 and there are no CE marked self-testing kits approved for home use“.

According to the press release, the MHRA has disabled 9 domain names and social media accounts selling fake or unauthorised COVID-19 products.

Lynda Scammell, MHRA Enforcement Official, is quoted as saying: “There is no medicine licensed specifically to treat or prevent COVID-19, therefore any claiming to do so are not authorised and have not undergone regulatory approvals required for sale on the UK market. We cannot guarantee the safety or quality of the product and this poses a risk to your health.”

Key Contacts and Authors

Joel Smith
Joel Smith
Partner, Head of Intellectual Property, London
+20 7466 2331
Jonathan Turnbull
Jonathan Turnbull
Partner, Intellectual Property & Pharma, London
+44 20 7466 2174
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

 

COVID-19: Pressure points: COVID Counterfeits – combating counterfeiting, product replacement, misleading advertising and cyber crime in the current crisis

Whilst as a global community we have witnessed extreme acts of kindness, compassion and camaraderie since the start of the COVID-19 crisis, regrettably, some have sought to exploit the crisis. From sales of counterfeits, mis-substitution of products and misleading advertising, to reverse engineering and cyber attacks, intellectual property (IP) rights holders are amongst the many becoming victims of such activities. Here we ask what has been happening and what IP holders can do about it. We provide an overview of the options available for IP rights holders to limit the damage caused by such activities, and, if necessary, enforce their rights.

What has been happening?

A range of counterfeit medicines, vaccines and other devices which claim to prevent, test for or even cure COVID-19 have been introduced into the market in the wake of the global epidemic. In some cases these have been found to be relatively non-harmful substances, such as paracetamol or caffeine tablets, whereas in more extreme cases the ingredients have been far more dangerous, such as thiocyanate and hydrogen peroxide. Similarly, for Personal Protection Equipment (“PPE”), counterfeit face masks have been produced that have not been thoroughly tested and consequently do not bear the required “CE” mark.

Incidences of cybercrime are also on the rise as criminals take advantage of the unique opportunity COVID-19 has provided. Included within the broad range of businesses that have been targeted there have been ransomware attacks on scientific testing centres and laboratories and phishing attacks on members of the public, through emails claiming to contain important information from the government.

Supply chains have also been weakened by the crisis, with suppliers either unable to meet demand or unable to sustain themselves with the reduction in demand. In the former case, the temptation is for purchasers to seek alternative sources for required products or component products, leading to an increase in counterfeit or substitute products being offered on the market, possible reverse engineering attempts or misleading advertising of alternatives as suitable replacements.

Although this note focuses on those seeking to exploit the COVID-19 crisis, many people and companies have rallied together to fight the pandemic, such that there have been significant collaborative efforts aimed at solving the medical issues presented by COVID-19 (see our publication COVID-19 Global: Collaboration is key in the race to develop a vaccine).

What can IP rights owners do about it?

Considerations include infringement of patent and trade mark rights, parallel imports, Customs seizure, issues with threatening the supply chain, misleading advertising and passing off, falsified medicines provisions and cyber threats.

Patent infringement

Where the holder of a patent, or the exclusive licensee of a patent, is aware of an infringement of its rights, patent infringement proceedings can be commenced in the national courts where the patent is in force. Where the invention relates to a product, it will be an infringement of the patent right in the country of export to distribute the product, and also an infringement in the country of importation.

A rights holder can also approach the national courts to obtain additional information on possible infringement: for example, in the UK, a type of order called a Norwich Pharmacal order can be sought for the purpose of identifying the wrongdoer (such as the supplier of the allegedly infringing goods or other distributors).  Applications for disclosure and non-party disclosure are also available, where infringement proceedings have been commenced.

Reverse engineering may be attempted to make up for the lack of supply of patented goods or in an attempt to “design around” a patented part or product that cannot be sourced or for which there is a significant delay. If a patent is in force and the inventive concept of the patent is infringed then so-called “designing around” will not avoid infringement, however if alternative ways to achieve the same effect may do so, depending upon the way the patent’s claims are structured.

Trade mark infringement

The Trade Marks Act 1994 (“TMA”) contains provisions covering UK trade mark infringement, as well as criminal offences relating to anti-counterfeiting. Further, both the EU Trademark Regulation (2017/1001), which governs the unauthorised use of EU trade marks, and the EU Customs Enforcement Regulation (608/2013), which concerns the customs enforcement of IP rights by customs authorities, have effect in the UK. The Customs Regulation makes it possible for Customs authorities to have intercepted goods destroyed, without the need for a Court to determine whether any right has been infringed under national law. See more on this above.

Whether opportunistic trade mark applications for “Covid” or “Coronavirus” may have any value is another question. During March 2020, there were 7 UK trade mark applications and one EU trade mark application designating the UK for “Coronavirus” or variants thereof (including for “KEEP CALM AND CORONAVIRUS ON”!), as well as 12 applications for “Covid” or variations thereof, although the earliest two of these have been withdrawn. The remaining applications are under examination and it remains to be seen whether they may be registered.

Civil actions:  For counterfeit goods, the use of a sign in the course of trade will normally be identical to the registered trade mark and in relation to identical goods. Accordingly, this constitutes a subcategory of infringement under Section 10(1) of the TMA) or Article 9(2)(a) of the Trade Mark Regulation in relation to EU trade marks). In the case of use of an identical mark on identical goods, the trade mark owner is not required to demonstrate a likelihood of confusion.

If urgent action is required, in certain circumstances UK courts can grant interim injunctions and search and seizure orders against the infringer. These orders can be applied for without notice to the infringer and granted within days. Where urgent action is not warranted, then the trade mark owner may initiate proceedings seeking permanent injunctions against future infringement, orders for the infringer to pay damages or an account of profits to the trade mark owner, orders for the infringer to deliver up or destroy the infringing goods and costs.

Criminal Actions: Under section 92 of the TMA, it is a criminal offence to use without the proprietor’s consent a sign identical with a trade mark, or likely to be mistaken for that mark, with a view to make a gain or to cause a loss to another. The Fraud Act 2006 and the Proceeds of Crime Act 2002 may also be relevant to criminal IP cases:

  • Under the Fraud Act, it is a criminal offence to dishonestly make a false representation with an intention to make a gain for oneself or another or an intention to cause loss to another or expose another to a risk of loss, and to make or possess articles for use in or in connection with fraud, and to make or supply articles for use in fraud.
  • The Proceeds of Crime Act provides for the recovery of assets and proceeds obtained through crime, including IP crime, as well as recovery of proceeds of crime through civil proceedings where a criminal conviction has not been possible.

Trade mark owners have the right to bring private prosecutions under the various criminal IP provisions. Alternatively, the Crown Prosecutions Service may bring criminal proceedings against suspected offenders, but has no influence over private prosecutions. National Trading Standards also provides national and local protection and enforcement of IP rights, and is empowered to bring criminal prosecutions themselves, issue statutory notices and cautions, and obtain search and seizure orders from the courts. Further, the Police Intellectual Property Crime Unit (PIPCU) is the specialist unit within the police service tasked with tackling serious and organised IP crime and in particular IP crime committed online.

Parallel Imports

During the current times of high demand for particular products and the potential/actual breakdown of normal supply chains, there may be an increase in supply from jurisdictions where products are available at a lower price or simply are still available. This leads to what is called parallel imports or grey goods markets, where products that were only supposed to be supplied to one country’s market are sold into another. IP rights can be used to prevent this except where they have been “exhausted”. IP rights in goods that have been put on the market in the EU with the consent of the IP right owner and are now circulating in the EU are deemed exhausted, unless there has been repackaging of the product in the case of pharmaceuticals, and then generally only where there is some element of risk to the ultimate consumer. It may be possible to prevent importation from third countries however, depending on whether the courts consider international exhaustion of rights to have occurred. Much will depend on evidence of consent or otherwise of the IP right owner.

Customs seizure

When it is not clear whether an infringement of intellectual property rights is occurring, or by whom, it is important to turn to the national customs authorities, which monitor the goods that are passing through their borders each day.

EU Regulation No 608/2013 gives patentees an avenue to ask border authorities to inspect and seize possibly counterfeit and pirated goods upon importation into the member state.  Under this regulation, an application can be made to each customs authority to request them to seize goods that are suspected of infringing an intellectual property right.  Such application should provide the authority with sufficient information in which to identify possibly infringing goods, including detailed descriptions and photographs of the goods and any likely packaging or labelling. (See above for more on trade mark infringing goods).

If possibly infringing goods are seized by customs, the authority is to provide the applicant with information about the goods, including photographs of goods and the names and addresses of the consignee and the holder of the goods, and their origin, provenance and destination. In some instances, it will be possible to request that a sample of the goods be analysed The applicant can request destruction of the goods if they consider that the goods are indeed infringing their rights, and/or the applicant can commence legal proceedings for infringement.

Threatening an infringer’s supply chain

At first glance, it may appear that a quick way to stop infringements would be to contact those retailing the infringing products or supplying materials to the infringer for their manufacture. However, the national laws on unjustified/groundless threats (such as those in the UK, as updated by the Intellectual Property (Unjustified Threats) Act 2017) could result in liability and proceedings against the rights owner making such a threat. Under UK law threats could be actionable as unjustified threats as a matter of patent, trade mark or design law if threats are made in relation to secondary acts of infringement, such as sale or supply of essential means. As a consequence, great care needs to be taken when sending letters threatening action to anyone other than primary infringers for primary infringing acts.

Misleading advertising and passing off

Misleading advertising and adverts that attempt to pass goods off as those of another, are both actionable and injunctions can be obtained to stop these activities. Misleading advertising can also be a criminal offence (corporate and directorial), in a B2B context, under the Business Protection from Misleading Marketing Regulations 2008 (BPRs), and, in a B2C context, under the Consumer Protection from Unfair Trading Regulations 2008 (as amended by the Consumer Protection (Amendment) Regulations) (CPRs).

The CPRs protect the consumer against unfair commercial practices including misleading actions and omissions, which are prohibited under these regulations. The BPRs prohibit advertising that misleads traders and define advertising as misleading where it: “(a)  in any way, including its presentation, deceives or is likely to deceive the traders to whom it is addressed or whom it reaches; and by reason of its deceptive nature, is likely to affect their economic behaviour; or (b)  for those reasons, injures or is likely to injure a competitor”. Anything that would breach the CPRs is also a breach of the BPRs. This could include false attribution of intellectual property rights.  Enforcement is via enforcement authorities (usually Trading Standards) which can require undertakings and bring injunction proceedings.  The BPRs also regulate comparative advertising which is could also be relevant in COVID-19 situations e.g. where products are being advertised or compared as substitutes for example, although there are no criminal sanctions for comparative advertising, only regulatory ones as described above.

For passing off to be made out there has to be an act of misrepresentation that goods/businesses are those of another, that other must have demonstrable goodwill in those goods/business and there must be actual or likely damage.  Passing off actions can be difficult to bring without significant evidence and individual instances of confusion as to the origins of the goods or services being offered. However, the goodwill-owner can bring the action themselves such that it has more control over enforcement and is not reliant on the relevant enforcement authorities to bring actions under the BPRs or CPRs.

Online sales

Online distribution of counterfeit goods is becoming ever more prevalent. Use of social media platforms, including the use hidden closed group on platforms such as Facebook, is now considered to have overtaken the more traditional auction sites and online marketplaces. This can, unfortunately, make such sales harder to detect. Online platforms also have procedures to take down infringing content and listings of counterfeit goods, but the efficiency of these procedures, and scope of what content can be removed, vary between sites.

In addition, the following steps can be considered:

  • An action before Nominet, which is the the ‘.uk’, ‘.cymru’ and ‘.wales’ domain registry,. It offers a domain name dispute resolution service (DRS) that rights holders can use to take down domain names used in relation to online IP infringement. Nominet will also suspend domain names involved in online IP infringement in response to requests from PIPCU, who are focussed on stopping online counterfeit trading and can bring prosecutions and have assets seized under the Proceeds of Crime Act.
  • Seeking an order from the courts against the internet service providers (ISPs) to block websites known to host infringing content under Section 97 of the Copyright, Designs and Patents Act 1988.
  • Involving the National Trading Standards’ e-Crime Team, which is focused on investigating online crime, including counterfeiting and IP crime, and has the power to seize counterfeit goods and takedown of infringing website listings.

Falsified Medicines

In relation to medicines, the Falsified Medicine Directive (the “FMD”)) may be of assistance (Directive 2011/62/EU which amended Directive 2001/83/EC on the Community code relating to medicinal products for human use in order to prevent the entry of falsified medicinal products into the legal supply chain). A falsified medicine is defined by the European Medicines Agency (“EMA”) as a “fake medicine that passes itself off as a real, authorised medicine”.  The FMD contains provisions requiring Member States to impose penalties for acts involving falsified medicinal products however sold.

The UK implemented the FMD via the Human Medicines Regulations 2012, as amended by two further statutory instruments the following year (the “Regulations”). The Regulations make it a criminal offence to import, manufacture or distribute active substances unless they are registered with the relevant licensing authority and meet stringent regulations elsewhere in the legislation.

Therefore, although not a direct remedy for a rights holder, these provisions offer reassurance to pharmaceutical manufacturers as the Regulations provide barriers to, and sanctions against, those involved in activities relating to falsified medicines if they attempt to introduce falsified medicines into the pharmacy supply chain.

 

Key contacts and Authors 

Joel Smith
Joel Smith
Partner, Head of Intellectual Property, London
+20 7466 2331
Jonathan Turnbull
Jonathan Turnbull
Partner, Intellectual Property & Pharma, London
+44 20 7466 2174
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217
Kate Macmillan
Kate Macmillan
Consultant, London
+44 20 7466 3737
Joanna Silver
Joanna Silver
Senior Associate, IP, London
+44 20 7466 2315
George McCubbin
George McCubbin
Associate, IP, London
+44 20 7466 2784
Charlie Madill
Charlie Madill
+44 20 7466 3585

AG’s Opinion in SkyKick maintains the case’s chilling effect on enforcement of trade mark rights, pending clarity from the CJEU

The CJEU’s Advocate-General (‘AG’) has delivered his Opinion that a registered trade mark cannot be declared invalid solely due to the terms used in the mark’s specification lacking ‘sufficient’ clarity and precision. However, this statement came with the substantial caveat that a lack of clarity and precision in the specification could cause the application/registration to fall within the ‘contrary to public policy’ provision, which is a ground for refusal or invalidity of EU and national trade marks. The Opinion also considered ‘intention to use’ and concluded that applying for registration of a trade mark with no intention to use it in connection with specified goods or services, could constitute an element of bad faith (bad faith itself a ground for refusal of registration & invalidity).  The AG’s Opinion follows a reference to the CJEU in the case Sky v SkyKick from the High Court of Justice (England and Wales) (‘the Court’).

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Herbert Smith Freehills’ global Trade Marks Practice lauded a ‘formidable force’ in WTR 1000 rankings

Herbert Smith Freehills has been lauded a ‘class act’, after it was ranked highly in the 2019 edition of World Trademark Review (WTR) 1000.

Now in its ninth year, the WTR 1000 highlights firms and individuals that are deemed outstanding in this area of practice.

Herbert Smith Freehills has been showcased in the research directory as being ‘a formidable force within the trademark sphere’ and a ‘prestigious commercial outfit’, after it was highlighted for having particularly strong trademark experience globally in WTR 1000. The firm’s practices in the UK, Australia, France and Italy were all highly ranked in the directory.

The publication singles out the firm for being “packed to the rafters with world-class talent that consistently exceeds the expectations of clients”.

WTR cites the “hands-on leadership”  of Joel Smith, UK Head of IP as crucial to the side’s recent growth and success and goes on to highlight Joel as “a brilliant strategic thinker” flagging his work for major brands alongside much-praised Paris Partner Alexandra Neri on cross-border trade mark disputes.

Global Head of IP Mark Shillito is lauded as an “exquisite complex problem solver and litigator” and Laura Orlando has also been showcased, after she helped set up our growing Milan office in late 2017. She is flagged for her, “super pragmatic and business oriented” approach, which makes her one of the “best IP lawyers in Italy”.

Celia Davies, who heads Herbert Smith Freehills’ Trademarks prosecution group in Australia, is “a true leader in the trademark market”. Melbourne Partner Shaun McVicar has also been held up as possessing a “commercial and strategic outlook on litigation” which means that brands are in “good hands when he is on a case.” Partner Sue Gilchrist is also singled out as being a “top-flight litigator” and Kristin Stammer as an “eminent adviser with terrific technical trademark knowledge”.

In its write-up of the firm’s trade mark practice, WTR comments, “Herbert Smith Freehills isn’t about being the biggest in trademarks; it focuses, instead, on quality and adding strategic value for blue-chip international rights holders – and routinely surpasses expectations in both regards.”

As with previous editions, to arrive at the 2019 rankings, WTR undertook an exhaustive qualitative research project to identify the firms and individuals that are deemed outstanding in this critical area of practice. The publication says that when identifying the leading firms, factors such as depth of expertise, market presence and the level of work on which they are typically instructed were all taken into account, alongside positive peer and client feedback.

To view the full write-up, please visit: https://www.worldtrademarkreview.com/directories/wtr1000

Brexit “no deal” technical notices published on Patents, Trade marks, Designs, Copyright, GIs, and Exhaustion of rights

The latest tranche of “no deal” technical notices was released yesterday afternoon by the UK Government. Amongst them are several notices that highlight the Brexit issues faced by intellectual property right owners and, in some cases, confirm the Government’s approach to resolving them. The Government also released this news story today which comments on the guidance given in the technical notices and comments on the Government’s longer term aims for IP protection.

Key announcements, in the context of no deal, are:

  • Provision of a new right to replace unregistered Community design rights, to be known as “the supplementary unregistered design right“.
  • Existing EUTMs and Community registered designs will be replaced with new, equivalent rights in the UK at the end of the implementation/transition period, “with minimal administrative burden“.
  • The SPC, compulsory licensing, pharmaceutical product testing exception and patenting of biotechnological inventions regimes will remain unchanged at least initially.
  • If the UPC comes into force the UK will replace unitary patent rights with equivalent rights if the UK needs to withdraw from the new system, although the UK “will explore whether it is possible to remain within it“. The Government’s news story states that “The UK intends to stay in the Unified Patent Court and unitary patent system after we leave the EU.”
  • UK originating sui generis database rights will no longer be enforceable in the EEA; “UK owners may want to consider relying on other forms of protection (e.g. restrictive licensing agreements or copyright where applicable) for their databases
  • The UK will set up its own GI schemewhich will be WTO TRIPS compliant“. The new rights “will broadly mirror the EU regime and be no more burdensome to producers“.  Since the UK would no longer be required to recognise EU GI status, EU producers would be able to apply for UK GI status. Those wishing to protect UK GIs in the EU will need to submit applications on a third country basis.
  • The UK will continue to accept the exhaustion of IP rights in products put on the market in the EEA by, or with the consent of, the rights holder. However, the EU will likely not consider that goods placed on the UK market are exhausted in the EEA, and thus permission may need to be sought from the rights holder to transfer goods to the EEA that have legitimately been put on the market in the UK. The Government news story says that “The UK looks forward to exploring arrangements on IP cooperation that will provide mutual benefits to UK and EU rights holders and we are ready to discuss issues the EU wishes to raise in the negotiations on our future relationship, including exhaustion of IP rights”.

Links to the notices:

  1. Patents
  2. Trade marks and designs
  3. Copyright
  4. Geographical Indications
  5. Exhaustion of IP rights

More detail on each of these is provided below. For those with an interest in Life Sciences please also see our blog post on the notices related to that sector that were released last month.

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HSF Legal Guide to Brexit – an update on provision for intellectual property rights

IP rights which are designated as applying across the EU (EU trade marks, Community plant variety rights, Community registered designs and Community unregistered designs) and those, qualification for which involves activity within the EU (such as database rights), are all at risk of termination in relation to the territory of the UK once the definition ‘EU’ no longer includes the UK. However, the Commission and the UK Government have agreed at negotiator level (as published on 19 March 2018 and subsequently, 19 June 2018) certain sections in the withdrawal agreement including provision of replacement rights for those registered rights thus affected and for the UK Government to provide replacement rights for UK registered rights.

The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property as follows:

• The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;

• Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;

• The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants

In our detailed briefing, we review the proposals for the treatment and protection of intellectual property rights in the UK at Brexit: see Intellectual Property and Brexit (part of the HSF Brexit Legal Guide 2018).

See also the Herbert Smith Freehills Brexit Hub and Brexit Blog.

Authors

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

Intellectual Property and Cyber Security issues considered in UK Government White Paper on the future UK-EU relationship

The UK Government’s White Paper detailing its proposal for the future relationship between the UK and the EU (published on 12 July 2018) includes a limited number of proposals relating to intellectual property and cyber security as follows:

  • The UK intends to explore staying in the Unified Patent Court (UPC) and Unitary Patent system post-Brexit. The UK will work with the member states that have signed up to the UPC Agreement to ensure that the UPC Agreement can continue on a firm legal basis;
  • Arrangements on future co-operation on intellectual property are recognised as important to provide confidence and security to rights holders operating in and between the UK and the EU;
  • The UK and EU will need to continue to co-operate on cyber security to counter cyber threats;
  • The UK will establish its own Geographical Indications (GIs) scheme to provide continuous protection for UK GIs in the UK and protection for new GIs applied for by UK and non-UK applicants

UPC and Unitary Patent

Opinions vary on the likelihood of whether the UK could continue as part of the UPC and Unitary patent system post-Brexit. The Foreword to the White Paper by the Prime Minister states that the proposals in the White Paper would end the jurisdiction of the European Court of Justice in the UK. It is not clear whether the UK would nevertheless accept the role of the European Court of Justice in respect of references from the UPC on matters of European law.

Future Co-operation on intellectual property

The draft withdrawal agreement of 19 March 2018 (as supplemented by the joint statement on 19 June 2018) sets out the text (highlighted in green in the draft) agreed between the Commission and UK at negotiator level, in relation to the replacement of EU-wide rights with equivalent UK rights, which may indicate that there will be substantive future co-operation.

Cyber Security

It is proposed that here will be close collaboration between the UK and the Network and Information Security (NIS) Cooperation Group, Computer Security Incident Response Team (CSIRT) Network (created under the NIS directive) and the European Union Agency for Network and Information Security (ENISA). While the UK’s desire to remain involved in the EU cyber security apparatus is welcome, no details of the legal mechanisms by which this will be achieved are provided at this stage.

Geographic Indications

The provisions in the draft withdrawal agreement relating to GIs have not yet been agreed at negotiator level. However, the White Paper states that the UK wants equivalence arrangements on a broad range of food policy rules, including GIs, noting that GIs provide legal protection against imitation and misrepresentations about quality or geographical origin for agri-food products that have a strong traditional or cultural connection to a particular geographical area. The UK will establish its own GI scheme consistent with (and going beyond) the provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property (TRIPS). The new scheme is to provide a clear and simple set of rules on GIs and continuous protection in the UK for UK GIs notwithstanding exit from the EU. The scheme will be open to new applications from both UK and non-UK applicants.

For further analysis of the impact of Brexit on IP rights and how to moderate this, see the IP section of the HSF Brexit Legal Guide in the Brexit hub of our website (https://www.herbertsmithfreehills.com/latest-thinking/hubs/brexit).

Authors

Mark Shillito
Mark Shillito
Partner
+44 20 7466 2031
Laura Deacon
Laura Deacon
Of Counsel
+44 20 7466 2045
Peter FitzPatrick
Peter FitzPatrick
Associate
+44 20 7466 3711

UK Government agrees elements of the European Commission’s proposals for post-Brexit protection of EU-wide IP rights in the UK in the latest draft of the Withdrawal Agreement

In the latest draft of the Withdrawal Agreement (19 March 2018) the UK Government and European Commission negotiators appear to have agreed text providing for the replacement of EU-wide IP rights having effect in the UK with equivalent UK rights at the end of the transition period post-Brexit (until 31 December 2020). Further, during the transition period, EU-wide rights will still apply to the UK due to the effect of Article 122 which provides that EU law will be applicable to the UK during the transition period and that it will produce the same legal effects in respect of and in the UK as those which is produces within the EU and its Member States and shall be interpreted and applied in accordance with the same methods and general principles, and that during the transition period, any reference to Member States in EU law shall be understood as including the UK.

Other IP related measures include provision for dealing with: exhaustion of rights, pending applications, international registrations designating the EU and the effect of invalidity proceedings that are “on foot” at the end of the transition period, (see Articles 50-57).  Certain provisions (highlighted in green) are now listed as agreed between negotiators, whilst others are still just proposals from the Commission (those un-highlighted) including those on GIs, SPCs and who pays the administration costs involved.

There are still unresolved issues for those who hold IP rights in the EU and those who license (in or out) EU-wide IP rights or have agreements linked to the “EU” as territory, which we discuss below.

Despite the areas of current agreement, there remains the possibility of a “no deal” scenario in relation to the whole agreement, in which case none of the areas agreed would stand (although the UK Government could make separate arrangements to create equivalent rights at the moment of Brexit). Anything agreed between the Commission and the UK under the Withdrawal Agreement needs European Council approval and then European Parliament approval. Thus, although a good start has been made on agreeing the post-Brexit fate of EU-wide IP rights currently having effect in the UK, the final arrangements are still far from certain. Indeed, if the Withdrawal Agreement is not accepted then there will be no transition period at all and a “hard” Brexit will come into effect on 30 March 2019, with all that implies for IP rights (see our comments from January 2017 here).

In summary, the proposals in the revised Withdrawal Agreement, and problems associated with them, are:

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Innovation Disruption and Technology – the legal and commercial issues for your business

Drawing on our practitioners’ experience and understanding of the intellectual property and technology issues facing our clients in the fast changing world in which we all now do business, we made innovation and disruptive technology the key themes at our 2018 IP Update Conference.

Described by one attendee as “The perfect mixture of commercial and legal content”, the event was held in our London offices in February 2018. We were joined by over 140 clients from the Technology, Banking, Consumer, Energy, Manufacturing, Media, Pharmaceutical & Healthcare, and Telecommunications sectors.

Click here for a briefing summarising the legal and commercial issues raised by the Herbert Smith Freehills presenters and our keynote speaker Kevin Mathers, Country Director at Google UK.

Our keynote speaker, Kevin Mathers, set the scene by discussing the current technological landscape for innovation and how Google looks at the future. Taking examples of how artificial intelligence, augmented reality and virtual reality are already being used by Google and looking at the major trends which will dictate our digital future. Kevin’s presentation was a great success, with attendees describing it as “really insightful and inspirational”; “engaging and interesting” and “stimulating and thought-provoking”.

The conference continued with sessions on

  • tackling the impact of AI on your business,
  • on-line risk,
  • open innovation,
  • interoperability and product standards, and
  • targeted advertising and the GDPR.

There was also a panel session at the end of the conference to discuss the issues facing businesses in relation to disruptive technology with contributions from partners and of counsel across the IP and IT practice areas and from several of our European offices.

Clients were impressed by the range of issues presented by the speakers and the practical approaches offered.

 

Joel Smith
Joel Smith
Head of IP - UK
+44 20 7466 2331
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

 

“Two stripes are enough” – adidas succeeds in opposing competitor’s 2 stripe trade mark application on basis of its 3 stripe registration

The similarity between a two stripe design for shoes and adidas’ earlier trade mark for its renowned three stripe shoe, combined with adidas’ significant reputation in that mark, means that adidas can oppose the two stripe application for use on shoes, as there is a substantial risk that the use of the two stripe mark being applied for is taking unfair advantage of the reputation of adidas’ mark.

This decision by the EU General Court on 1 March 2018 (cases T-85/16 and T-629/16) is a reminder that the courts will take a strict view on trade mark applications that sail too close to famous marks.  In this case, the General Court was particularly scathing of a 2007 advertising campaign used once by a licensee of Shoe Branding Europe, which featured the slogan “Two stripes are enough”.  The General Court considered this as evidence of the risk of unfair advantage being taken of the repute of the adidas mark by Shoe Branding Europe.  Care must be taken by brand owners not to engage in, and to ensure that any licensees do not engage in, marketing campaigns that could be misconstrued as taking advantage of, or seeking to trade on, the repute of a similar earlier mark.

The decision also suggests that any use of the two stripes by Shoe Branding will likely be infringing, given the findings of the General Court in relation to registration and the similarity of the tests for trade mark infringement. Last year, adidas sued Puma in relation to the latter’s use of four stripes on sports footwear.

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