SkyKick found to infringe SKY trade mark on return to High Court, in a bold decision on bad faith

Sky has succeeded in its claim of infringement by SkyKick of its SKY trade mark, though suffers some collateral damage in having parts of certain of its trade mark registrations found invalid for being filed in bad faith.   Whilst the decision shows that the English Courts are prepared to strike down parts of wide trade mark specifications years later, the “bad faith” needed to do this requires a high evidential burden and cannot be presumed on the basis of the mere finding that, at the time of filing, the applicant had no economic activity corresponding to the goods and services referred to in that application.

On the case’s return to the High Court, following the decision of the CJEU in January (Case C-371/18) on the questions he had referred, Lord Justice Arnold found SkyKick liable for trade mark infringement, whilst also giving Sky the opportunity to withdraw allegations of infringement based upon elements of its trade mark registration specification that he found to be registered in bad faith (Sky v SkyKick [2020] EWHC 990 (Ch), 29 April 2020)

A bold decision opens a new line of attack for defendants

The decision is a bold one, driven by policy, which builds upon the CJEU’s judgment (see our commentary on the CJEU decision here): parts of wide trade mark specifications will be struck down, if certain terms seek over broad protection not justified by actual use or the reasonable prospect of use at the time and not filed for legitimate business reasons.  It also opens a new line of attack for parties defending trade mark claims against brand owners, to force them to open up the history of why broad registrations were filed and seek extensive disclosure as to the trade mark proprietor’s motives at the date of filing.  This will run into uncomfortable areas for in-house teams, either seeking to preserve legally privileged communications or waive privilege to fight.

Bad faith: The CJEU had held that bad faith would only be established in the exceptional circumstances where it could be demonstrated that the applicant deliberately sought to monopolize classes of goods or services in order to block or undermine the interests of other businesses.  Bad faith could not be presumed on the basis of the mere finding that, at the time of filing, the applicant had no economic activity corresponding to the goods and services referred to in that application. The court should look at the motives of the trade mark owner when they filed their application and at whether they intended to abuse the system by blocking a competitor at that time.

This is a very high evidential burden to meet and should only rarely be found – however, today’s High Court decision has shown it is possible to succeed.

Limitation of the specification:The High Court held that certain of Sky’s trade marks were partially invalid on grounds that they were filed in bad faith.  Lord Justice Arnold had already found that certain registrations had been applied for in respect of certain goods and services for which Sky had no reasonable commercial rationale to do so. The Judge innovatively decided to cut down Sky’s registration for “computer software” to arrive at what he believed to be a fair specification, rather than rely upon Skykick’s or Sky’s submissions.  He has given Sky 7 days to withdraw that part of the infringement claim that relates to the removed part of the specification, in return for the court making no order as to the declaration of invalidity sought by SkyKick on that part of the registration.  That leaves Sky not being compelled by court order to adjust its specification.

Infringement by SkyKick: However, crucially for Sky, Skykick did not allege bad faith in relation to two elements of Sky’s registration – “telecommunication services” and “electronic mail services”.  This left the Court able to find SkyKick liable for infringement of “electronic mail services” for SkyKick’s use of email services, under Article 9(2)(b) of the Regulation/Article 10(2)(b) of the Directive.

Authors

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

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

Herbert Smith Freehills’ IP Podcasts – Episode 4: Comparative Advertising

Advertising that makes a comparison with another party’s products or services needs to be considered carefully. In episode 4 of our IP podcast series, Joel Smith and Victoria Horsey provide a short summary of the laws which apply and review the options for challenging misleading and unlawful adverts in the UK.

Listen and subscribe here: https://soundcloud.com/herbert-smith-freehills/intellectual-property-ep4-comparative-advertising

Joel Smith
Joel Smith
Partner
+44 20 7466 2331
Victoria Horsey
Victoria Horsey
Senior Associate
+44 20 7466 2217

Previous episodes in our Intellectual Property Podcast series…


Episode 1: An introduction to FRAND

The UK Supreme Court is soon expected to hand down its judgment in the appeals of Unwired Planet v Huawei and ZTE v Conversant, concerning FRAND, which were heard together. In advance of the decision itself, this podcast provides a reminder of what FRAND is all about (fair, reasonable and non-discriminatory terms required in the licensing of standard essential patents) and what issues are before the Court, as well as some background to the individual disputes. Presented by David Webb and Rachel Montagnon.

Listen and subscribe here – https://soundcloud.com/herbert-smith-freehills/intellectual-property-podcast-ep1-frand


Episode 2: ‘Plausibility’ in patent law

Andrew Wells (one of the winners of the 2019 AIPPI prize for UK AIPPI Group’s study questions for his contribution on the plausibility question) and Rachel Montagnon discuss:

  • The concept of ‘plausibility’ in patent law
  • The EPO approach to inventive step and plausibility
  • How plausibility arises in insufficiency arguments
  • The approach of the English courts
  • The future for the concept of plausibility in patent law
  • Practical implications for innovators and patentees

Listen and subscribe here – https://soundcloud.com/herbert-smith-freehills/intellectual-property-podcast-ep2-plausibility


Episode 3: Architects’ copyright

Rachel Montagnon and Joanna Silver discuss the problems associated with the use of architects’ designs where specific permissions are not in place, and the impact on development projects, including:

  • What sort of works attract copyright?
  • How could these copyright works be infringed?
  • Who owns copyright in architects’ designs?
  • What licences can be implied if no agreement is in place?
  • Termination of engagement and insolvency situations
  • Escrow and collateral warranties
  • Moral rights
  • What relief can architects claim?

Listen and subscribe here: https://soundcloud.com/herbert-smith-freehills/intellectual-property-podcast-ep3-architects-copyright

CJEU Decision in SkyKick offers relief to trade mark owners

The CJEU has today handed down a crucial decision as it seeks to provide clarification on important questions about the extent of the monopoly businesses can obtain legitimately through the registration of a trade mark.

The CJEU held that a registered trade mark cannot be declared wholly or partly invalid as a result of a lack of clarity and precision of the terms used to designate the goods and services covered by that registration. Further, whilst invalidity on the ground of bad faith may be triggered where an applicant registers a mark without any intention to use it in relation to specified goods and services, bad faith will only be established in exceptional circumstances. This outcome is very helpful to existing trade mark proprietors and favours the existing status quo of the trade mark system.

Background

Trade mark protection in the UK and the EU is granted in respect of the specific goods and services which the applicant has determined the mark should cover. However, there are ambiguities in the EU law relating to the relationship between trade mark specifications and the validity of trade marks. Following a reference from the High Court of Justice (England and Wales) (the ‘High Court’) to the CJEU in the case Sky v SkyKick, Case C-371/18 (Sky plc and others v SkyKick UK Limited and other) the CJEU has given judgment.

For the facts giving rise to the dispute in the main proceedings, please see our previous summary of the case in the Herbert Smith Freehills ‘Trade Mark Update for 2018’ here. We previously reported on the Opinion of the Advocate-General (‘AG’) in this case here.

The Decision

The reference to the CJEU focussed on the relationship between the specification of goods and services and the validity of trade marks.

Lack of clarity and precision as a ground of invalidity

The CJEU set out that the grounds of invalidity laid down by EU legislation are exhaustive and therefore rejected the idea that a trade mark could be attacked as a separate ground of invalidity on the basis that the specification of the goods or services lacked clarity or precision, or because such lack of clarity and precision was contrary to public policy. The only way to attack a registered mark is on the basis of revocation for non-use, after the event, if the particular goods or services were not in use after five years.

This decision favours the existing status quo of the trade mark system, where big brands often file extensively and widely, taking into account the likely areas of expansion of their use of the trade mark over time. The decision provides a clear, if unexpected, result, despite the steer from the High Court over concern at broad, undefined terms such as “computer software”.  The Court chose not to focus upon whether it was possible to claim trade mark protection for terms that do not exactly specify for what a trade mark was or was intended to be used.  This contrasts with the AG’s Opinion, which suggested that a lack of clarity in the specification could fall under the public policy absolute ground for refusal of a registration and therefore invalidity. The CJEU found no basis for an attack at all; the only question was whether the trade mark proprietor used the mark and, if not, whether part of the mark could later be revoked for non-use.

Bad faith as a ground for refusal of registration and invalidity

The CJEU confirmed that ‘bad faith’ may be triggered where an applicant registers a mark without any intention to use it in relation to the goods and services covered by that registration. However, it clarified that bad faith will only be established in the exceptional circumstances where it could be demonstrated that the applicant deliberately sought to monopolise classes of goods or services in order to block or undermine the interests of other businesses.  Bad faith cannot be presumed on the basis of the mere finding that, at the time of filing, the applicant had no economic activity corresponding to the goods and services referred to in that application. The court should look at the motives of the trade mark owner when they filed their application and at whether they intended to abuse the system by blocking a competitor at that time. This is a very high evidential burden to meet and would only rarely be found.  Even where it is, the trade mark would only be partially invalid to the extent that the scope of the goods or services had been improperly applied for.

The High Court will now need to reach a final ruling, with the benefit of the CJEU’s Judgment. At present, it had found that SkyKick had infringed Sky’s trade marks, unless it had a defence and counterclaim by way of seeking to make out that Sky’s trade marks were partially or wholly invalid.

Business Impact

This decision is very favourable to existing trade mark proprietors. Critics will say that it misses an opportunity to regulate the ever increasing thicket of broad trade mark registrations and leaves the burden on third parties to contest such marks. However, the decision effectively favours the status quo, so avoids any concerns regarding a radical new approach being thrust upon the UK at the time of Brexit. Had the CJEU followed the AG’s Opinion, all businesses with trade marks, not only big brands, risked their trade marks being found invalid across the EU if they were filed with overly wide specifications, which could have had a chilling effect on companies seeking to enforce their key trade marks in the EU through litigation. Whilst this concern has not materialised, businesses protecting new brands would still be wise to look carefully at the scope of protection that they file for and to be clearer in specifying exactly the goods or services they intend to protect.

This decision will continue to impact businesses in the UK, despite the UK leaving the EU shortly. Following this reference from the UK High Court, the UK Government made detailed submissions to the CJEU upon its interpretation of the legislation.  After the UK leaves the EU, the UK will though lose the ability to seek to influence the outcome of such cases (and will no longer have a judicial representative on the CJEU), but the likely consequence of having trade mark law that is so closely aligned with the EU is that the UK courts will nonetheless continue to apply EU case law.

Joel Smith, Head of IP UK responds to this landmark EU Court ruling here.

Authors

Joel Smith
Joel Smith
Partner, Head of Intellectual Property UK, London
+44 20 7466 2331
Joanna Silver
Joanna Silver
Senior Associate, London
+44 20 7466 2315

Deepfakes: is seeing still believing?

The BBC thriller The Capture has captured the public’s imagination with its portrayal of the relationship between deepfakes and CCTV evidence, and the serious legal risks associated with this technology.

In a recent report published by non-profit research institute Data & Society, deepfakes were found to be “no new threat to democracy”, in that audiovisual media has always been manipulated, for a variety of purposes. What is new is the convincingness of deepfakes; the challenges associated with detecting them; and the risks associated with sharing deepfakes at speed and at scale on social media.

In this post we discuss the issues arising from such fakery and the possible legal counters.

What are deepfakes?

Put simply, deepfakes are fake videos created by artificially intelligent systems, predominantly trained using machine learning methods in order to generate or manipulate human bodies, faces and voices.

In the Data & Society report, deepfakes are distinguished from ‘cheap fakes’: fake videos made using package software or no software at all. Cheap fake techniques may include adjusting the timing of footage, deleting or cutting frames together, re-dubbing sound, or simply re-contextualising footage by changing narration, captions or video titles.

Once confined to academic research groups and Hollywood studios, deepfake technology is now accessible to anyone with enough computational resource to manipulate it. Consumer grade animation software can be used in conjunction with open source programs available on public repositories like GitHub to produce fakes of a similar quality to those created for legitimate purposes by computer scientists.

The first widely-known examples of amateur deepfakes appeared in November 2017, when a Reddit user called “deepfakes” uploaded a number of fake videos depicting celebrities’ faces grafted onto pornography.

Fake history

It is important to remember that audiovisual fakery is nothing new. Since the beginning of motion pictures, efforts have been made to create visual and audio effects using methods other than filming or recording them. Historically, these effects were achieved by manually altering existing footage in the cutting room, or later, in special effects departments. More recently, computer-generated imagery has advanced to a point where fakes in the film industry are now not only remarkably convincing, but commonplace – such as the recreated version of the late Carrie Fisher in recent Star Wars movies.

However, what is new is the potential for deepfake technology to help audiovisual fakery cross the line from expressive content to informative content.

Fake news

Fewer people now consume news via traditional methods such as reading newspapers, instead favouring audiovisual media such as 24/7 news channels or news apps on smartphones. In today’s digital age, news is no longer the exclusive remit of mainstream media coverage; many of us today also consume news via alternative resources, such as Twitter, reddit and other social media platforms.

This means that the phenomenon of fake news is not confined to text media alone, and whilst news articles written or published by unreliable sources are easily discredited, video content is much harder to argue with. Consequently, deepfake technology provides an opportunity for malicious actors to try to pass off fiction as fact. Technology now exists which makes it possible to synthesize entirely fake audiovisual performances by almost anyone, providing the “ability to put words and actions in the mouths and bodies of others”. For example, there have been several high-profile examples of deepfake videos featuring Barack Obama, such as the fake speech video created by researchers at Stanford University, and the “public service announcement” video warning against the dangers of deepfakes, created by BuzzFeed and American actor and comedian Jordan Peele.

However, it is not only public figures who are at risk of their images being faked. It only requires a few hundred images of training data to produce a reasonable quality deepfake, and in today’s digital age, there are plenty of images of most people publically available on their social media profiles. As such, it is relatively easy for any one of us to be “faked”.

It is important to note that fake news is a concern for cheap fakes and deepfakes alike – given the speed and scale at which information is transmitted via social media platforms, content can go viral before moderators, fact checkers, journalists and mainstream media are able to identify that content as being faked. The problem with deepfakes, though, is how much harder they are to detect, even with modern deepfake detection algorithms, which are not yet widely available.

This creates a risk that an unsuspecting journalist or unscrupulous mainstream media outlet may pick up a deepfake news story and perpetuate it via legitimate sources, thereby ‘validating’ the fake content as real news, with potentially harmful consequences.

Fake evidence

The possible implications of deepfakes on the reliability and admissibility of CCTV evidence in court were explored to devastating effect in The Capture: if seeing is no longer believing, do deepfakes change evidence as we know it?

Historically, courts have always struggled with new forms of evidence. For example, expert witnesses were required to justify the admissibility of photographic evidence to 19th century courts, despite its relative reliability as evidence compared with written witness statements and oral testimony.

That is not to say that audiovisual evidence is the same as ‘truth’ – such evidence can, and has, been manipulated in past trials, such as in the famous Rodney King case in the US, in which video evidence of a violent arrest was deliberately slowed in such a way as to undermine allegations of police brutality. The jury said that the slow video had “made all the difference”, and the police officers were acquitted. Consider the potential effects, then, of video ‘evidence’ which is not only manipulated, but which has been entirely fabricated by deepfake software, placing people at crime scenes or even depicting them committing crimes.

With not only CCTV, but photographs, dashcams, amateur footage, and the results of facial recognition software, all playing a potential role in court cases, there will be serious political, security and criminal implications if audiovisual evidence can no longer be trusted as proof.

Technical and legal counters

Whilst a limited amount of legislation dedicated to deepfakes exists in some jurisdictions (for example, Californian legislation which places restrictions on deepfakes depicting politicians within 60 days of an election), there is no UK legislation specifically designed to address deepfakes.

Existing causes of action which could be relevant include:

  • Copyright and social media takedown requests

Currently, social media platforms such as Facebook, Twitter and Youtube, and website hosting companies, benefit from the ‘safe harbour’ principle under US and EU law, meaning that the platforms themselves can’t be held responsible for user content which infringes copyright so long as they have a process for notification and takedown of such content (most providers’ processes are governed by the US Digital Millennium Copyright Act, even if they are not US-based). Content creators can submit evidence of copyright infringement to the platforms (usually via standard-web based forms available on the platforms), and the platforms are then responsible for removing the infringing content.

This mechanism was recently used to remove a Kim Kardashian deepfake from YouTube, and thus offers photographers and filmmakers a relatively straightforward method of removing deepfakes which use their copyrighted work. Additionally, blocking injunctions may be available against internet service providers (ISPs) to tackle repeated and concerted attempts to post infringing content on websites.

However, use of copyright material is permitted under the Copyright, Designs and Patents Act 1988 in a considerable number of circumstances, including for purposes of reporting current events, caricature, parody or pastiche, meaning satirical deepfakes may be exempt from copyright claims. In addition, if only a part of the copyrighted work is used, there could be claims that the deepfake would be exempt under the ‘quotation’/extract provisions.

  • Image rights

Whilst celebrities enjoy the benefit of ‘image rights’ in some jurisdictions, which protect them from misuse of their likeness, these rights do not exist in the UK, so individuals whose images are used in deepfakes must seek other means of redress (often using passing off via false endorsement, as in the Rihanna v Topshop case [2013]). Depending on the context of the deepfake (e.g. if the deepfake is used in a commercial context), options may include bringing a claim under passing off/false endorsement or perhaps trade mark infringement if appropriate images are registered as trade marks.

  • Data privacy

Individuals’ images constitute personal data under Art 4(1) of the General Data Protection Regulation (‘GDPR’). As such, victims of deepfakes may also be able to enforce their data protection rights against the data controller, including the right to rectification (Art 16) and the right to erasure (Art 17). However, identifying the ‘data controller’ (or controllers) in the context of a deepfake video shared online via multiple platforms is unlikely to be a straightforward process.

  • Defamation, harassment and misuse of private information

These offer alternative causes of action in circumstances where the deepfake: would harm an individual’s reputation, amounts to harassment, or is pornographic (which would amount to private information, even though the information is false (McKennit v Ash [2006]).

Proposed measures to counter the “fakes” problem:

The shortcomings associated with existing options set out above are compounded by the fact that, even if the victim is able to make out a case, under one or more of these grounds, they may face difficulty in actually bringing their claim if, for example, the creator of the deepfake cannot be identified, or if there are jurisdictional obstacles.

Consequently, there are widespread calls for further legal and te counters to deepfakes. Potential counters being considered include:

  • Legislation requiring the identification or registration of content creators
  • Legislation forcing individuals to label manipulated content and fine those whose manipulative content is deemed harmful.
  • An improved regulatory and legislative framework around potential rights of action for victims, such as establishing image rights in the UK.
  • Adding invisible ‘noise’ to digital images which deepfake algorithms struggle to process, impacting the quality of the resulting deepfake content.
  • Tracking the provenance of content through use of distributed verification technology (such as Truepic, which uses blockchain technology to verify the authenticity of content).
  • Removing net neutrality for all packets carrying video data, in order to trace them to their real-life creators.
  • Embedding automated fake detection software on social media platforms, search engines and internet browsers.
  • Employing more content moderators and reconsidering platforms’ liability for their role in spreading fake content.
  • Raising awareness of fake audiovisual content and encouraging the public to interrogate their sources.

Summary

Whilst audiovisual manipulation is nothing new, whether in the context of news media or evidence in court, the advent of deepfake technology makes fake content much harder to identify. In a world where seeing is not necessarily believing, and where audiovisual footage is shared at speed and at scale on social media and other platforms, the risks associated with deepfakes and cheap fakes alike are becoming increasingly important to address.

Joel Smith
Joel Smith
Partner, Head of Intellectual Property UK, London
+44 20 7466 2331
Laura Adde
Laura Adde
Associate, London
+44 20 7466 7491
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, London
+44 20 7466 2217

 

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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Challenges for the Consumer sector – Transformative Technology

HSF’s Consumer sector team (including Joel Smith, Victoria Horsey, Sarah Burke and Rachel Montagnon, from our IP group) have just a feature article published in June’s PLC Magazine on Challenges in the Consumer Sector *. This is the first in a series of three articles examining the current issues facing the sector.

The article examines the impact of transformative technology and looks in particular at AI, AR & VR (including IP aspects), data commercialisation, Internet of Things, contextual commerce, data privacy, cyber security, targeted advertising, and on-line infringement of IP rights.

For more on these and other issues affecting the Consumer sector see our Future of Consumer hub.

*http://uk.practicallaw.com/resources/uk-publications/plc-magazine

Authors from HSF the IP group

Joel Smith
Joel Smith
Partner, Head of Intellectual Property, London
+44 20 7466 2331
Victoria Horsey
Victoria Horsey
Senior associate, Intellectual Property, London
+44 20 7466 2701
Sarah Burke
Sarah Burke
Senior associate, Intellectual Property, London
+44 20 7466 2476
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, Intellectual Property & Consumer Sector, London
+44 20 7466 2217

Data Assets – Protecting and Driving Value in a Digital Age

Faced with the exponential rise of data as an asset class in its own right, organisations are now taking a fresh look at the data that are available or accessible to them and the ways in which the value of those data can be safeguarded, unlocked and maximised. Data have become a strategic and valuable asset for many organisations but protecting and exploiting that asset is not always simple.

Our feature article, published in May’s edition of PLC Magazine and linked in this post, considers data as an asset, how intellectual property rights can be employed to protect data, how data can be used effectively and how to minimise associated legal risks.

The article explores key legal considerations for organisations looking to develop or refine a data commercialisation strategy, including in respect of:

  • the concept of so-called data “ownership”;
  • intellectual property rights;
  • contractual rights;
  • information governance;
  • competition law; and
  • corporate transactions.

For the full article please click below:

 

This article was first published in PLC Magazine, May 2019

Edward Du Boulay
Edward Du Boulay
Senior Associate, Digital TMT & Data, London
+44 20 7466 2384
Miriam Everett
Miriam Everett
Partner, Head of Data Protection & Privacy, London
+44 20 7466 2378
Kyriakos Fountoukakos
Kyriakos Fountoukakos
Partner, Competition and Trade, Brussels
+32 2 518 1840
Andrew Moir
Andrew Moir
Partner, Head of Cybersecurity, London
+44 20 7466 2773
Rachel Montagnon
Rachel Montagnon
Professional Support Consultant, Intellectual Property, London
+44 20 7466 2217
Joel Smith
Joel Smith
Partner, Head of Intellectual Property, London
+44 20 7466 2331
Manish Soni
Manish Soni
Senior Associate, London
+44 20 7466 2016

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