Sound Mark Registration Attempt Fizzles Out In EU General Court Appeal

In the first ruling on a sound mark submitted as an audio file (rather than a word description of the sound), the General Court has dismissed the appeal from the EUIPO’s rejection of the application for lack of distinctiveness, whilst also clarifying the criteria for assessing the distinctive character of sound marks and the perception of those marks in general by consumers (Ardagh Metal Beverage Holdings v EUIPO (T-668/19) 7 July 2021).

Background

Ardagh Metal Beverage Holdings GmbH & Co. KG applied for an EU trade mark at the European Union Intellectual Property Office (EUIPO) for the sound of a can opening, followed by one second of silence and nine seconds of a fizzing sound. The application was in the form of an audio file and was applied for in respect of various drinks (both fizzy and non-carbonated drinks) and for metal containers for storage or transport.

The application was rejected by the EUIPO, as the sound was not held not to be distinctive. Ardagh appealed the decision to the EU General Court.

The General Court upheld the decision of the EUIPO and provided clarity on the application of earlier trade mark case law on distinctiveness to a sound mark, whilst also refuting some of the EUIPO’s application of case law or general approach.

The General Court’s decision

  • Criteria for assessing the distinctive character of sound marks

The General Court held that the test for establishing the distinctive character of a sound mark is the same as for other types of trade mark. Therefore, in order for a sound mark to be distinctive, the consumer must be able to align the sound mark with its commercial origin, it “must have a certain resonance which enables the target consumer to perceive it as a trade mark and not as a functional element or as an indicator without any inherent characteristics“. It must function as an indicator of origin on its own, without any combination of other elements like words or logos or other marks, in order to enable the consumer who purchased the product to repeat the same positive choice, distinguishing the product from others of different undertakings.

  • Case law and three-dimensional marks

The General Court commented that the case law that the EUIPO had applied in coming to its conclusion, according to which only a mark that departs significantly from the norm or customs of the sector is not devoid of distinctive character was related to three-dimensional marks. The General Court stated that this case-law is applicable to three-dimensional marks only. It does not establish any new general criteria for assessing the distinctive character of the marks, but simply points out that the perception of the relevant public can be influenced by the (three-dimensional) nature of the sign. According to the General Court, the EUIPO erroneously held that such criteria and case-law could be applicable to sound marks by analogy. Nevertheless this did not change the outcome of the appeal since there were other grounds for dismissing it, including the perception of the mark as a functional element of the goods in question (see below).

  • Sounds and commercial origin

The General Court considered whether the sound produced by the opening of a can would be  considered to be a purely technical and functional element, given the type of goods the mark was being applied for. The court held that this would be the case.

The opening of a can or bottle is inherent to a technical solution connected to the handling of drinks in order to consume them and such a sound will therefore not be perceived as an indication of the commercial origin of those goods“.

The court considered that the relevant public immediately associates the sound of fizzing bubbles with drinks, and that the sounds and silence, when taken as a whole, did not have any inherent characteristic that would make it possible for them to be perceived by that public as being an indication of the commercial origin of the goods. The two allegedly “peculiar” features highlighted by the applicant – one second of silence and nine seconds of a fizzing sound – were considered by the General Court as simply nuances and not distinctive enough in themselves from other sounds in the drinks sector. This was sufficient to confirm the EUIPO’s finding of lack of distinctive character.

The EUIPO had also found that it was unusual in the drinks market to indicate the commercial origin of a product using sounds alone, on the basis that “those goods are silent until they are consumed”. The General Court did not agree with the EUIPO, stating that “most goods are silent in themselves and produce a sound only when they are consumed. Thus, the mere fact that a sound is made only on consumption does not mean that the use of sounds to indicate the commercial origin of a product on a specific market would still be unusual.

Nevertheless, this approach by the EUIPO did not mean that its decision would be annulled as it did not have a decisive influence on the operative part of that decision.

Practice points

It is a well-established trend that in such a competitive market, food businesses are incentivised to invest in new marketing strategies and tools in order to attract consumers – sound marks and other non-traditional advertising activities being examples. They should however be careful not to use sounds that could be considered purely technical and functional element, but instead focus on sounds which could be perceived as an indication of origin if trade mark protection is going to be sought.

Authors and contacts: 

Pietro Pouche
Pietro Pouche
Partner, Milan
+39 02 3602 1394
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 466 2217
Giulia Maienza
Giulia Maienza
Associate, Milan
+39 02 3602 1396

 

 

 

 

 

 

 

 

With thanks also to Debbie Olesin for her contribution to this post

 

The Trade and Cooperation Agreement and its impact on IP, Pharma and Medical Devices

The final Brexit agreement, the Trade and Cooperation Agreement (the “TCA”) was agreed between the UK and the EU on 24 December 2020. Within this agreement are provisions that set out the standards expected to be recognised (mutually) between the EU and the UK in relation to intellectual property (including SPCs and trade secrets). There are some provisions concerning pharmaceutical regulation and product standards, but overall there is a lack of mutual recognition, with the consequence that, for both pharmaceuticals and medical devices, there are now effectively two separate regimes for the EU and the UK.

Intellectual Property

The provisions on IP match or exceed those for IP set out in the various treaties to which the UK and EU have acceded (such as WIPO, WTO and TRIPS agreements).  These IP standards are to be maintained as a minimum. The cited objectives and scope in relation to intellectual property (see Title V) indicate the aims behind these provisions which are to:

(a) facilitate the production, provision and commercialisation of innovative and creative products and services between [the UK and the EU] by reducing distortions and impediments to such trade, thereby contributing to a more sustainable and inclusive economy; and

(b) ensure an adequate and effective level of protection and enforcement of intellectual property rights.

The provisions are intended to “complement and further specify the rights and obligations of each [of the UK and the EU] under the TRIPS Agreement and other international treaties in the field of intellectual property to which they are parties” and do not “preclude either [the UK or the EU] from introducing more extensive protection and enforcement of intellectual property rights than required under [this section of the TCA] provided that such protection and enforcement does not contravene [those provisions]”. However, there are aspects of current UK and EU IP law, such as the dilution provisions in trade mark law, to which the agreement does not refer, instead referring to the Paris Convention provisions on the protection of well known marks. Whether this will be a point of future divergence remains to be seen.

Both the UK and the EU also have the ability to develop their own exhaustion regimes. The provisions on geographical indications (“GIs”) indicate that a mutual future scheme has not be agreed although a review clause on GIs has, which provides that the UK and EU may (if both parties agree it is in their interests) use reasonable endeavours to agree rules for the protection and domestic enforcement of their GIs.

The UK Government’s Summary document that accompanies the TCA (see here) states that the agreement “includes mechanisms for cooperation and exchange of information on IP issues of mutual interest” and “retains regulatory flexibility for each [of the UK and the EU], enabling the UK to develop an IP system in line with [its] domestic priorities“, thus enabling the UK to diverge where it so requires.

We have already commented on the changes to the UK IP regime in the firm’s guide to Brexit here (see the IP section).

The Regulation of Medical Devices and Medicinal Products

Medical devices: The TCA has a chapter (4) (under Trade – Title I) on eliminating unnecessary technical barriers to trade which deals with conformity of standards. However, this only provides for an approach under which each party can agree that its standards bodies (including those relating to medical devices) will conform with international standards and will work together to influence those and to “foster bilateral cooperation with the standardising bodies of the other Party“.

For medical devices, it had been hoped that there would be at least mutual recognition of conformity assessment under which each of the EU and the UK would recognise the other’s certification bodies. However, as things stand, although Great Britain will continue to accept CE marked medical devices until 30 June 2023 those devices certified by the UK and marked as UKCA (standing for UK Conformity Assessed, as discussed in more detail in our post here), will not mutually recognised by the EU.

Medicinal Products: For medicinal products there is a dedicated annex in the TCA, Annex TBT-2 – Medicinal Products (the “Medicinal Products Annex”), which applies to all medicinal products listed in its Annex C, namely:

  • marketed medicinal products for human or veterinary use, including marketed biological and immunological products for human and veterinary use,
  • advanced therapy medicinal products,
  • active pharmaceutical ingredients for human or veterinary use,
  • investigational medicinal products,

with this list being subject to amended by the UK-EU Partnership Council (the main governing body for the agreement and supplementing agreements).

The aim of the Medicinal Product Annex is to “facilitate availability of medicines, promote public health and protect high levels of consumer and environmental protection in respect of medicinal products”.  To help achieve this aim, the Annex provides for:

  • the mutual recognition of Good Manufacturing Practice (“GMP”) inspections and certificates, meaning that manufacturing facilities do not need to undergo separate UK and EU inspections;
  • the individual inspection, on notice, by the EU or UK of each other’s facilities); and
  • for the suspension of the mutual recognition arrangements.

Further, the TCA also states that the EU and the UK should work together to implement agreed international guidelines and that any changes to either the UK or the EU’s regulation regime should be on 60 days’ notice and be subject to discussion by a Working Group on Medicinal Products, which will be established to enable mutual consultation. This Working Group on Medicinal Products will be under supervision of the Trade Specialised Committee on Technical Barriers to Trade, and will monitor and review implementation and ensure the proper functioning of the Medicinal Products Annex. It is noteworthy that the Medicinal Products Annex is specifically excluded from the TCA’s disputes mechanism, however, through its role in facilitating discussions and functioning as an appropriate forum for issues relating to Medicinal Products, it is hoped that it will be a sufficient mechanism to deal with any concerns.

When considering the confidentiality of information supporting applications for marketing authorisations (“MAs”), regulatory protection of pharmaceutical products, and Supplementary Protection Certificates (“SPC”) it is noteworthy that this is not included in the Medicinal Products Annex, but is included in the IP section (Title V) of the TCA.

  • In relation to regulatory data protection generally, the TCA requires that both the UK and the EU ensure that commercially confidential information submitted to obtain an MA is protected against disclosure to third parties, unless there is an overriding public interest or steps are taken to ensure the data is protected from unfair commercial use.
  • For the regulatory protections of data and market exclusivity, the TCA provides that, subject to any international agreement to which both the EU and the UK are party, and without prejudice to any additional periods of protection which either party may wish to provide for in its domestic law, these regulatory protections will be “for a limited period of time to be determined by domestic law”. This allows each of the UK and the EU to determine the length of such regulatory exclusivities under their own regulatory regimes.
  • For SPCs, the TCA records the agreement of both the UK and the EU to provide for further patent protection to compensate for the impact of regulatory administrative procedures but, again, the length of time is not stipulated.

The effect of these provisions is that they provide some comfort that these valuable forms of protection for medicinal products will be maintained by both the UK and the EU.

For detailed commentary on the new regulatory position for Pharma in the UK, and the impact on IP rights generally, see our series of posts on the HSF Intellectual Property Notes blog here.

Other provisions relevant to the pharmaceutical and medical device industry

The TCA also has provisions relating to the UK’s continued participation in EU programmes and on UK / EU cooperation on “serious cross-border threat[s] to health that are relevant for the pharmaceutical industry.

  • Subject to the UK making financial contributions, Part 5 of the TCA includes agreement on the UK’s continued participation in EU programmes, including the EU’s research and innovation funding programme, Horizon Europe.
  • UK / EU cooperation on serious cross-border threat[s] to health is covered by the TCA including agreement between the UK and the EU on emergency relief in relation to importation requirements, tax and road transport exemptions, and agreement to cooperate in relation to international health security systems.

Future developments

Although tariff free and quota-free trade has been agreed, there is little mutual recognition of regulatory provisions. This may not be the end of negotiations, with automatic reviews every 5 years written into the TCA and termination possible on 12 months’ notice.  See the HSF Brexit blog for further information, and the updated Intellectual Property section of our Beyond Brexit Legal Guide is now available, in which we look at the impact of the end of the Brexit transition period on:

  • EU trade mark rights
  • Community design rights
  • Patents & SPCs
  • Copyright
  • Designs
  • .eu Domain names
  • Plant variety rights
  • sui generis database rights
  • Exhaustion of IP rights
  • Licensing
  • Disputes

Key contacts and authors

Jonathan Turnbull
Jonathan Turnbull
Partner, London
+44 20 7466 2174
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217
George McCubbin
George McCubbin
Senior Associate, London
+44 20 7466 2764
Priyanka Madan
Priyanka Madan
Associate - London
+44 20 7466 2986

Geographical Indications – a new scheme for the UK from 1 January 2021

In the same way that trade marks already registered as EU trade marks before the end of transition will be replaced in the UK by equivalent rights post transition, geographical indications (GIs) (by this we refer to protected designations of origin, geographical indications and traditional specialities guaranteed) registered under the EU scheme prior to the end of transition will continue to apply across the remaining EU states post-transition and will also be replaced in the UK by rights under the new UK GI scheme.

However, those GIs registered under the EU scheme from 1 January 2021 will not apply in the UK (this includes all GIs, once registered, where applications were still pending at 1 January 2021).  After 1 January 2021, applications for protection made under the EU scheme for Great Britain (GB) localised GIs, i.e. applications made by producers from England, Scotland and Wales, will be treated as “third country” applications by the EU scheme.

From 1 January 2021, the UK will set up its own GI scheme which will be managed by the Department for Environment, Food and Rural Affairs (DEFRA). The scheme will be open to producers from the UK and from other countries worldwide. New GIs can be registered under the scheme from 1 January.

The UK scheme will cover the geographical names of food, drink and agricultural products (including beer, cider and perry), spirit drinks, wine and aromatised wine. These are the same categories protected under the EU scheme, as under the Withdrawal Agreement, the relevant EU regulations will be incorporated as UK law (unless the UK and the EU come to a different agreement as a result of free trade negotiations). The UK scheme will use the designations of Protected Designation of Origin (PDO), Protected Geographical Indication (PGI) and Traditional Speciality Guaranteed (TSG), which again mirrors the designations available under the EU scheme.

The UK government has issued guidance (Protecting food and drink names from 1 January 2021 (28 September 2020)) on the new scheme, which also provides additional clarification on the interrelationship between this scheme and the EU scheme. From 1 January 2021, the EU scheme will no longer apply to the UK as it does to members of the EU – see the comments made by the European Commission in its Notice to stakeholders – Withdrawal of the United Kingdom and EU rules in the field of geographical indications (6 July 2020).

Current EU scheme: UK GIs registered under the European scheme before the end of the transition period should continue to receive protection in the EU, but applications that are pending with the EU at the end of the transition period will no longer cover the UK.

Under the current (and continuing) EU scheme, to register a product name as a geographical indication, EU producers have to address their application to national authorities for scrutiny. The Member State concerned thereafter forwards the application to the European Commission, who examines the request following the procedures laid down in the above listed EU legislation.

For non-EU product names to be registered as geographic indications in the EU, producers send their applications either directly, or via their national authorities, to the European Commission. From 1 January 2021, Great Britain producers (but not Northern Ireland producers – see below) will be treated as a “third country” under the EU scheme, and will first need to secure protection for new GIs under the UK scheme before applying under the EU scheme. The criteria applied to determine registration of an application from a GB producer are otherwise the same as those which apply to products originating from the EU as outlined in the relevant EU regulations. Once registered, a GB GI under the EU scheme will benefit from the same level of protection as EU GIs.

Protection in Great Britain under the new UK scheme: From 1 January 2021, producers will need to apply for a new GI in Great Britain under the UK scheme.

According to the Withdrawal Agreement (and unless an alternate agreed position is reached regarding GIs), the EU regulations that govern the EU scheme will be directly retained in UK law (save for any amendments made by a statutory instrument to deal with deficiencies). Therefore, the criteria for obtaining protection under the UK scheme should in theory be the same as that required under the EU scheme, though in practice it is possible that the criteria could be applied differently.

Under Article 54 of the Withdrawal Agreement, where a GI ceases to be protected under the EU scheme after 1 January 2021, the UK is not obliged to continue to provide protection for the GI either.

According to the UK government guidance, DEFRA will publish further guidance relating to the application process.

On 22 October 2020, the UK government published a draft statutory instrument, Agricultural Products, Food and Drink (Amendment etc.) (EU Exit) Regulations 2020 (Draft), which amends deficiencies to the retained EU regulations which govern the scheme for geographical indications.

Protection in Northern Ireland (NI): For new applications for protection in Northern Ireland and the EU from 1 January 2021, an application will need to be made under the EU scheme. Northern Ireland producers will need to make a separate application under the UK scheme for protection in Great Britain. Unlike EU producers, Northern Ireland producers will not need to be protected first under the EU scheme before applying for protection under the UK scheme.

In addition, registered GIs in relation to products that can be produced anywhere on the island of Ireland (including Irish Whiskey, Irish Cream and Irish Poteen) will continue to be protected and protectable under both the EU and the new UK schemes.

New UK regime logos: There are logos for each of the three UK designations that can be downloaded and used from 1 January 2021. For food and agricultural GI products produced and for sale in Great Britain and registered from 1 January 2021, the relevant UK logo must appear on the packaging and marketing material from the date of registration. As for food and agricultural GI products produced and for sale in Great Britain and registered under the EU system before 1 January 2021, producers will have until 1 January 2024 to amend the packaging and marketing materials to display the relevant UK logos.

As is the case under the EU scheme, displaying the UK logos will be optional in relation to wine and spirit GIs.

For food and agricultural GI products of EU origin and of Northern Ireland origin (i.e. that are not produced in Great Britain), the use of the UK logos will be optional from 1 January 2021. In accordance with the draft statutory instrument as at the time of writing, EU and Northern Ireland producers that have food and agricultural GI products registered under the EU scheme, even if is also registered under the UK scheme, can continue to use the EU logos on their products for sale in Great Britain from 1 January 2021 and beyond 1 January 2024.

Continued use of EU logos: Food and agricultural GI products of EU origin must, under existing EU regulations, display the relevant EU logos. The same will continue to apply to food and agricultural GI products of Northern Ireland origin that are registered under the EU scheme.

As noted above, for food and agricultural GI products produced and for sale in Great Britain that were protected under the EU scheme before the end of the transition period, the EU logo may continue to be used until 1 January 2024, after which these producers will need to add the UK logos to the relevant packaging and marketing materials. Great Britain GI products that are protected in the EU can continue to use the EU logo on products sold in GB (but it will no longer be mandatory under the EU regulations) in addition to the mandatory UK logo.

International protection: In February 2020, the Geneva Act of the Lisbon Agreement came into force. This treaty establishes the Lisbon System, an international registry for GIs through which registration can be obtained via a single application to WIPO. The EU acceded to the Geneva Act in November 2019, which enabled the Geneva Act to come into force.

The Geneva Act currently applies to the UK during the transition period. However, the UK will not be obliged in its own scheme to continue to protect geographical indications registered through the Lisbon System after the transition period ends (unless the UK ratifies the Geneva Act independently after the transition period). It seems unlikely that the UK will independently ratify the Geneva Act, as this issue is not addressed in the UK government guidance on geographical indications. Further, under Art 54(2) of the Withdrawal Agreement, where protection in the EU is derived from international agreements to which the EU is a party, the same level of protection does not need to be provided in the UK.

The UK government guidance on GIs does state that reciprocal international protection of UK GIs will continue after 1 January 2021, if protection is granted under an EU free trade agreement where the UK has signed a continuity agreement. The UK government guidance lists the Andean Community (being a free trade area comprising Bolivia, Colombia, Ecuador and Peru), Chile and Switzerland as examples, and recent developments in the UK government negotiations mean that a level of protection will also continue in Japan and Korea.  Reciprocal international protection of UK GIs will also continue where protection is granted under other EU third country sectoral agreements (agreements that are not free trade agreements) where the UK has signed a continuity agreement.

It remains to be seen in the upcoming months whether the UK government’s international negotiations mean that reciprocal international protection of UK GIs will have the same jurisdictional coverage as the UK previously had in the EU. If continuity agreements to EU free trade agreements cannot be agreed before 1 January 2021, then the UK is likely to miss out on a level of reciprocity of protection for UK GIs going forward, unless and until alternate agreements can be made.

Authors

Joel Smith
Joel Smith
Partner, IP, London
+44 20 7466 2331
Julie Chiu
Julie Chiu
Senior Associate (Australia), London
+44 20 7466 2658
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, IP, London
+44 20 7466 2217

 

Glaxo’s purple inhalers fail to get trade mark protection

Like Cadbury before them, Glaxo’s hard-fought attempts to register a trade mark for a shade of purple have been rejected. In this case, Glaxo had sought to register the colour of its seretide inhalers and asthma treatments as a trade mark, by providing the description “Purple – Pantone: 2787C” and this sign:

The General Court of the European Union upheld earlier decisions by the European Union Intellectual Property Office and its Board of Appeal, commenting that it was not in the public interest for colours to be monopolised in this context, and found that the mark applied for lacked “inherent distinctive character” and that the evidence of acquired distinctiveness provided by Glaxo (in opinion surveys and comments of doctors and pharmacists on social media and website, as well as sales figures) was not sufficient to demonstrate that it had acquired distinctive character through use (Case T‑187/19). Continue reading

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