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Intellectual Property Matters – February 2015

Intellectual Property Matters – February 2015

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03/02/2016

A decision best served cold: High Court delivers judgment on ice cream van design

Ice cream vans may not be an obvious inspiration for intellectual property litigation but they […]

Ice cream vans may not be an obvious inspiration for intellectual property litigation but they were the focus of the recent High Court judgment in Whitby Specialist Vehicles Ltd v Yorkshire Specialist Vehicles Ltd [1].

In the case, the claimant argued that the defendants’ ice cream van infringed (1) certain UK unregistered design rights in aspects of the design of its own ice cream van; and (2) a UK registered design in respect of the external appearance of its van.

The Court gave judgment for the claimant.

On unregistered design right, there was no dispute that the defendants’ van had been copied from the claimant’s van, as the second and third defendants, being shareholders in the first defendant, admitted copying the claimant’s van by taking mouldings of its panels to construct their own vans. While it was undeniable that there were some modest differences between the two designs, they were nonetheless very similar. Regarding the validity of the design right in the claimant’s van, the Court found that the design was original and that, although it did not denote a significant departure from the existing design corpus, and indeed shared many common features with them, the design could not be said to be commonplace or lacking in originality. Only the design of one feature – the base frame – could be said to be commonplace.

On the validity of the claimant’s registered design, the Court considered that the claimant’s design would produce a different overall impression on the informed user than the closest prior design (incidentally being a prior design of the claimant). On infringement, by contrast, the defendant’s van would produce the same overall impression as the claimant’s registered design.

A claim that the defendant had infringed the claimant’s the trade mark WHITBY MORRISON, which was registered in the UK in respect of various goods, including ice cream vans and parts and fittings for those goods, was also upheld.

The subject matter – ice cream vans – is somewhat unusual but is a reminder of the scope of design right and registered design protection. Possibly the most interesting feature of this case, was the Court’s finding that the defendants’ father, who had invested in their business, was liable as a joint tortfeasor, as he had funded the purchase and conversion of at least two vans, had participated in the copying of the claimant’s design and had sold at least one of the infringing vans.

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[1] [2014] EWHC 4242 (Pat)

Another lesson in jurisdiction for online copyright infringements

The Court of Justice of the European Union (CJEU) has given a ruling on the […]

The Court of Justice of the European Union (CJEU) has given a ruling on the question of whether jurisdiction is conferred on the courts of an EU Member State to hear an infringement action where an allegedly copyright-infringing image is accessible on a website in that Member State, but the website is hosted in another Member State.

Article 5(3) of the so-called Brussels I Regulation [1] on the recognition and enforcement of judgments in civil and commercial matters states that, in copyright disputes, it is possible to bring an action for infringement “in the place where the harmful event occurred or may occur” or where the alleged infringer is domiciled.

In Pez Hejduk v EnergieAgentur [2] the claimant, a photographer living in Austria, consented to some of her photographs to be used at a conference organised by the defendant. After the conference, the defendant, without the claimant’s consent, made those photographs available for downloading on its website. The defendant argued that the mere fact that the website was accessible from Austria was not sufficient to confer jurisdiction on the Austrian court. The Vienna Court referred the issue to the CJEU.

The CJEU considered that, as the photographs could be accessed in Austria, Austria was a place where the alleged damage may have occurred because the claimant’s copyright was protected there. The CJEU emphasised that the likelihood of damage occurring in a particular Member State is subject to the condition that the right whose infringement is alleged is protected in that Member State. It rejected the defendant’s submission that its website (with the German .de domain) was not directed at Austria. The jurisdiction conferred by Article 5(3) does not require that the relevant activity is directed to the country of the court seized of the action. It was immaterial whether or not the website was actually directed at Austria.

As a further point, the CJEU ruled that each national court can only rule on the damage caused in its Member State (e.g. the Austrian courts could only adjudicate on the damage suffered in Austria). The courts of other Member State could rule on the damage suffered in their Member State arising from the same set of facts.

The case can be contrasted with Omnibill (Pty) Ltd v EGPSXXX Ltd (in liquidation) [3], which we reviewed in our last newsletter, concerning the test for determining whether a website is targeted at the UK.

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[1] Council Regulation (EC) No 44/2001
[2] Case C 441/13
[3] [2014] EWHC 3762 (IPEC)

China’s patent targets for 2020

The Chinese Government has recently announced a policy decision to treble the number of patents […]

The Chinese Government has recently announced a policy decision to treble the number of patents filed by local Chinese inventors by the year 2020. More specifically, the hope is to increase the number of patents filed by local inventors from four per 10,000 persons to 14 per 10,000 persons by 2020.

Approximately one-third of the patent applications filed annually world-wide are filed in China and this percentage is currently increasing year on year. We cannot second-guess the reasons for the policy announcement – there is plenty of speculation to be found online – but in the words of the Chinese Government: “Intellectual property is increasingly becoming a vital component of China’s strategic resources and competitive ability”.

Of course, quantity is no guarantee of quality. At the moment, the percentage of Chinese patent applications which are also filed abroad is very small. Merely increasing the number of patents filed is not, of itself, an indication of a boom in innovation.

Accompanying the target for the number of applications is a target to expedite the process for handling patent applications.

The recent increase in the volume of patent applications has been attended by an increase in patent litigation. For Western owners of intellectual property rights, enforcement remains the biggest stumbling block to investing in China, and the actions taken by the Chinese Government following its announcement of its intention to enhance the enforcement regime will be followed closely.

China has been a member of the World Trade Organization (WTO) since 2001 and WTO membership confers an obligation to uphold minimum standards in respect of intellectual property rights. As such, China has an intellectual property system which is readily recognisable to Western eyes. Even so, complaints continue that the system is skewed in favour of local players with IP owners sometimes feeling that they have no alternative other than to negotiate a licence with local infringers.

It has become platitudinous to emphasise the importance of China in the global economy. It is also platitudinous to talk about the importance of intellectual property rights in the global economy. When the two are taken together, then… well, it’s doubly important.

Database right and former employees

Medical Innovations Ltd v Eakins [1] was a summary judgment application in litigation between an […]

Medical Innovations Ltd v Eakins [1] was a summary judgment application in litigation between an employee and his former employer. The parties had entered into a compensation agreement upon termination of the defendant’s employment, which included a provision that he would keep the employer’s information confidential. The employer had subsequently discovered that the defendant had been collaborating with a competitor and it issued proceedings for database right infringement, misuse of confidential information and breach of contract.

The defendant admitted to having taken documents from the employer and to having continued to access the employer’s database after his employment had terminated. In fact, there were two databases in issue: a distributor database (which contained the names and details of the employer’s actual and potential distributors together with comments about a likely attitude to their products), and a customer database (containing information about customers). However, the defendant denied database right infringement on the basis that the employer had no database right in the distributor database because (1) the effort that it had invested in the creation of the database was insufficient; and (2) the database comprised data generated by the employer, which was not capable of protection, as opposed to data collated from other sources, which was capable of protection. In respect of the customer database, he argued that the employer had no database right because third party material was incorporated in it.

The High Court rejected the defendant’s arguments, finding that it was clear that the employer had invested time and effort in collecting the information in the distributor database as opposed to simply generating it. The database contained information pertaining to distributors’ interest in the employer’s products and was capable of protection. In respect of the customer database, the Court held that the fact that the database contained third party information did not mean that it did not attract database right. Accordingly, the Court granted summary judgment.

Cases concerning database right are not all frequent, and if they do arise, the context in which they are do so is often where former employees collaborate with a competitor, as in this case. The case illustrates the focus on how the database was created and how much investment has gone into the creation of the database, as opposed to the value of the database and how damaging it would be to the owner if it fell into the hands of a competitor.

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[1] Unreported

Design right infringement in gilets

In DKH Retail Ltd v H Young (Operations) Ltd [1] the Intellectual Property Enterprise Court […]

In DKH Retail Ltd v H Young (Operations) Ltd [1] the Intellectual Property Enterprise Court (the IPEC) had to determine whether an Animal branded hooded gilet infringed Superdry’s unregistered design right. Animal admitted that it had imported and sold the gilets.

Superdry claimed both UK and Community unregistered design right protection. Animal argued that the Superdry design was commonplace (in respect of the UK unregistered design) and lacked individual character (in respect of the Community unregistered design). The judge rejected this, finding that the Superdry design had sufficient visual impact. The judge also rejected arguments based on the “must fit” and “must match” exceptions.

Animal also challenged Superdry’s title to one of the designs, arguing that Article 27 of the Community Designs Regulation [2] only operated to permit the assignment of existing design right, not future rights. The assignment in question was executed before the design’s creation and therefore covered prospective rights. The judge dismissed this argument as well, noting that section 223 of the Copyright, Designs and Patents Act 1998 permits the assignment of prospective design rights.

On infringement, the judge found that the relevant parts of the Animal gilet were made substantially to the Superdry design. The similarities between the designs significantly outweighed the differences and the overall reaction of the informed user faced with the competing designs would be that they shared the same design concept. Animal’s design would not produce on the informed user a different overall impression to that produced by the first design.

As Animal had been selling and importing the gilets since July 2012, Superdry’s claim for infringement of its UK unregistered design was based on secondary infringement and, as such, required knowledge on the part of Animal. (There is no such requirement for knowledge under Community design right law.) Superdry had given Animal notice of its rights before the infringing action, so it satisfied this requirement to show knowledge on the part of Animal as a secondary infringer. Superdry also argued that it was well known in the clothing industry that intellectual property rights are likely to subsist in clothing items and that Animal’s knowledge could therefore be inferred. The judge did not express a concluded view on this.

The case is a fairly standard design infringement case although the confirmation of the applicability of section 223 to prospective design rights is noteworthy. As a footnote to the case, the usefulness of the IPEC as a venue for determining disputes concerning the design right in clothing should be mentioned. The speed of change in the fashion industry may mean that prospective claimants have felt that it is not worth going to the trouble and cost of issuing infringement proceedings; with the comparative speed and low cost of proceedings in the IPEC, they should no longer be deterred from instituting proceedings for design right infringement.

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[1] [2014] EWHC 4034
[2] Regulation 6/2002

Take a bow: Rihanna’s claim for passing off against Topshop upheld by the Court of Appeal

The case [1] concerned the sale by Topshop of T-shirts bearing an image of the […]

The case [1] concerned the sale by Topshop of T-shirts bearing an image of the popstar Rihanna. Although Topshop had a licence from the photographer to use the image, it did not seek permission from the singer herself. Rihanna argued that the sales of the T-shirts without her consent constituted passing off. She maintained that the sales would be damaging to her goodwill, particularly given her association with the fashion world.

The case was not about image rights, save for confirmation by the Court of Appeal that under English law a celebrity does not have the right to control the use of their image generally. Nor was the case about privacy. It was about passing off and the three elements needed to substantiate a claim, namely:

a goodwill or reputation attached to the relevant goods or services
a misrepresentation by the defendant to the public (whether or not intentional) leading, or likely to lead, the public to believe that the goods or services offered by him are those of the claimant
damage to the claimant, arising from the erroneous belief that the source of the defendant’s goods or services is the same as those offered by the claimant.

Judgment in the High Court was given by His Honour Judge Birss QC. He referred to the High Court decision in Irvine v Talksport [2] in which it had been held that there was nothing in law to prevent a case of passing off being made out in a false endorsement case. He said that this case was not a false endorsement case but a merchandising case, although the legal principles were the same in each case as regards a passing off action. On appeal, Kitchin LJ, who gave the leading judgment, held that Birss J had correctly distinguished between the concepts of merchandising and endorsement, in particular that it was not a necessary feature of merchandising that members of the public thought that the products were endorsed by the celebrity (or the creator of the character in issue in the case of character merchandising).

Kitchin LJ explained that in a claim for passing off in a merchandising case, the claimant had to show:

the application of the name or image to the goods had the consequence that they told a lie. That requirement, which was closely allied to distinctiveness, would not be satisfied if the name or image denoted nothing about the source of the goods
the lie was material and had an effect upon the buying decision.

On the facts of this case Kitchin LJ considered that the sale of the T-shirts bearing Rihanna’s image did amount to a representation that she had endorsed it; many of her fans would regard that endorsement as sufficiently material to cause them to buy the T-shirts.

Kitchin LJ rejected the argument that there was any inconsistency between Birss J’s finding that the use of Rihanna’s image on the T-shirts amounted to a misrepresentation that they had been approved or authorised by Rihanna and the proposition that she did not have an absolute right to prevent traders selling clothing bearing her image.

Kitchin LJ also held that Birss J had acted correctly in taking into account the activities of Topshop in publicising and promoting its association with Rihanna over a period of time, for example, by communicating to the public when the singer wore one of their items or visited one of their stores, and that Topshop was seeking to take advantage of Rihanna’s public position as a “style icon”, who was associated with fashionable clothing.

The use of the word “lie” in Kitchin LJ’s judgment is striking, suggesting that the hurdle for celebrity claimants or the creators of characters (the recent case about Betty Boop for example, which we summarised here) in establishing passing off will be a high one. This is confirmed by the supporting judgment of Underhill LJ who considered that this case was “close to the borderline”. Of particular relevance to Underhill LJ was Rihanna’s past association with Topshop and the particular image in question which was associated with one of her albums, and as such, could be assumed to be part of the marketing campaign for that record. The judgment in this case is particularly fact specific, and should not be taken too readily as authority in other cases with very different factual scenarios.

The Court of Appeal has also upheld the costs order against the retailer as although it had made a number of without prejudice offers, nothing it had offered bettered or matched the injunction granted in the singer’s favour.

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[1] [2015] EWCA Civ 3
[2] [2002] FSR 60

The patentability of embryonic stem cells made from unfertilised eggs

Article 5(1) of the Biotechnology Directive [1] states that “The human body, at the various […]

Article 5(1) of the Biotechnology Directive [1] states that “The human body, at the various stages of its formation and development, and the simple discovery of one of its elements … cannot constitute patentable inventions”. Article 6(2)(c) adds that “uses of human embryos for industrial or commercial purposes” shall be considered unpatentable.

In International Stem Cell Corporation v Comptroller General of Patents [2] ISCC made two UK patent applications relating to human stem cells. The cells in question are created through a process called “parthenogenesis”, a type of asexual reproduction in which the offspring develops from unfertilised eggs. The applications were rejected. On appeal, the hearing officer held that the inventions disclosed in the patent applications were excluded from patentability under paragraph 3(d) of Schedule A2 to the Patents Act 1977, which implements Article 6(2)(c) into English law. ISCC appealed again and the High Court referred the following question for a preliminary ruling:

“Are unfertilised human ova whose division and further development have been stimulated by parthenogenesis, and which, in contrast to fertilised ova, contain only pluripotent cells and are incapable of developing into human beings, included in the term ‘human embryos’ in Article 6(2)(c) of Directive 98/44/EC on the legal protection of biotechnological inventions?”

The Court of Justice answered this question by ruling that an unfertilised human ovum whose division and further development have been stimulated by “parthenogenesis” does not constitute a “human embryo” within the meaning of Article 6(2)(c) if, in the light of the current state of scientific knowledge, it does not, in itself, have the inherent capacity of developing into a human being.

The Court emphasised that its job in this case was not to regulate the use of human embryos in the context of scientific research. Its job was limited to an assessment of the patentability of biotechnological inventions.

The key factor in the Court’s decision was that a human parthenote (an organism produced from an unfertilised ovum, which is incapable of developing beyond the early embryonic stage), due to the effect of the technique used to obtain it, was not capable of commencing the process of development which led to a human being. It will be for the referring court to determine whether or not, in the light of knowledge which was sufficiently tried and tested by international medical science, human parthenotes had the inherent capacity of developing into a human being.

This ruling is good news for the European biotechnology industry, which should encourage the development of cell-based therapies. The applications can now proceed to examination in the usual way.

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[1] Directive 98/44/EC
[2] Case C-364/13

Trade marks: registry review – February 2015

PIANISSIMO [1] On appeal, the EU General Court has upheld the OHIM Board of Appeal’s […]

PIANISSIMO [1]

On appeal, the EU General Court has upheld the OHIM Board of Appeal’s earlier decision to reject the application for the work mark PIANISSIMO in respect of a wide range of engines, machines and electrical devices. It was decided that the mark, meaning “extremely silent” to the Italian speaking public, would be perceived by the relevant public as a promotion of one of the products’ characteristics, rather than as an indication of origin. This decision reminds us that a community trade mark (CTM) has a unitary character, requiring distinctiveness throughout the EU; by virtue of being devoid of distinctive character in Italy, the refusal was just.

TERRAFLEX [2]

An application for the word mark TERRAFLEX in respect of goods in class 1 was opposed by the owner of the earlier identical mark in respect of different goods in class 1 and class 2. In the Opposition Division, it was held that the evidence submitted – a statement claiming that the earlier mark had been used in 12 EU Member States from 2007 to 2011 with a turnover up to EUR 895.505 per year as well as 35 product sheets in English labelled “Technical information TERRAFLEX-F” – was insufficient to prove genuine use of the earlier mark. Although the statement was admissible, as it had been drawn up by the party involved, it was to be given less weight than the independent evidence. The Board of Appeal supported the findings of the Opposition Division. Whether the earlier mark’s use had been genuinely put to use here, this decision is a clear reminder of the importance to keep evidence of use in the life of a trade mark, including information regarding (i) the goods and/or services for which the trade mark has been used; (ii) financial turnover under the trade mark; (iii) examples of sales records, promotion, advertising and sponsorship under the mark; and (iv) the geographical area in which the trade mark has been used.

KENZO [3]

Oppositions to two registrations of the word mark KENZO, in respect of wine and a variety of primarily wine-related goods and services, have been allowed by the EU General Court. The oppositions cited the earlier CTM KENZO for various goods including cosmetics, leather goods and clothing, and were based on the taking of unfair advantage of the earlier mark. The EU General Court approved the OHIM Board of Appeal’s reasoning that the goods and services involved were all part of the “luxury sector”, and therefore it was possible that the owners of the trade mark for cosmetics may also be active in the alcoholic drinks sector. The existence of a link, combined with the strong reputation of the earlier identical mark made sufficient grounds for the board to find a high likelihood that the mark applied for would ride on the coat-tails of the earlier mark. This is an interesting decision, given that few cosmetics producers dabble in the drinks industry.

THE SUBURBS (figurative) [4]

In an application by Suburban Cocktails Limited to register a figurative mark including the words “the suburbs” in class 43, the proposed mark was opposed by the owner of the earlier mark SUBURBIA in classes 41 and 43. The IPO held that the marks had a fairly high degree of visual similarity between them, high degree of aural similarity, and conceptually the marks were, if not identical, similar to the highest degree. When these factors were combined with identical services, the Office held that, even in circumstances where the average consumer exercises a high degree of care, it would lead to “indirect confusion” at the very least. This kind of confusion is interesting, as it is described as that where the average consumer notices the differences in the trade marks, but nonetheless assumes a link between the undertakings. This was sufficient, and the opposition was successful.

Trade Marks Top Tip: Survey Evidence

The admissibility and usefulness of survey evidence in trade mark infringement cases has been a hot topic since the decision in Marks & Spencer plc and another v Interflora Inc and another [5], and has been considered more recently in the decision of Enterprise Holdings, Inc v Europcar Group UK Limited and another [6]. In the High Court decision, Europcar was held to have infringed Enterprise’s registered “e” trade mark in relation to car rental services by use of its own “e” logo in connection with identical services. The decision is interesting, as it is based in part on survey evidence, the admissibility of which was decided in an earlier hearing [7]. In that decision, Morgan J decided that the survey evidence was admissible, in spite of no less than nine different objections being raised, including sample size, demographic bias, leading questions and the date of the surveys. This is a key decision in terms of the application of Interflora, and also demonstrates that properly conducted survey evidence can be of real value in a trade mark case.

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[1] Grundig Multimedia AG v OHIM, Case T-11/14
[2] NU3 N.V v ACTEGA Terra GmbH
[3] Kenzo Tsujimoto v OHIM, Case T-322/13
[4] In the matter of Application No. 3030953 by Suburban Cocktails Limited
[5] [2012] EWCA Civ 1501
[6] [2015] EWHC 17 (Ch)
[7] [2014] EWHC 2498 (Ch)

What a RANDOMS decision

Nestlé is the registered proprietor of two Irish trade marks, the word mark RANDOMS and […]

Nestlé is the registered proprietor of two Irish trade marks, the word mark RANDOMS and the slogan LET YOUR RANDOM SIDE OUT in respect of confectionery. Unilever applied to register the slogan RANDOM ACTS OF HAPPINESS as an Irish trade mark, also in respect of confectionery.

Nestlé opposed the application on the basis that, on account of the similarity of the marks and the identical nature of the goods, there was a likelihood of confusion of relevant consumers, including a likelihood that they would associate Unilever’s products with those of Nestlé.

Unilever argued in response to the opposition that Nestlé’s argument was based on a non-dominant element, namely the word RANDOM, and that the assessment of similarity between the marks could only be carried out on the basis of an overall impression conveyed to the relevant public, taking into account the significance of the dominant element of its mark. It also maintained that evidence of use of phrases and slogans containing the word RANDOM was irrelevant when no rights were claimed in those phrases and slogans.

The opposition was refused with the Controller finding that confusion was unlikely. [1] The Controller accepted that the Nestlé marks had a high degree of inherent and acquired distinctiveness and, as noted, the goods covered were identical. Nonetheless, the Controller found that the overall impression created by the marks was “very different”. More specifically, the wording was “very different” and the concept “somewhat different”.

On concept, the Controller found that RANDOMS was an invented term without meaning. He emphasised that the word was RANDOMS rather than RANDOM and that a customer in a sweet shop was asking for different things when asking for a bag of RANDOMS as opposed to a random bag of sweets. Unilever’s RANDOM ACTS OF HAPPINESS referred to a gesture done to make someone happy and was very different from Nestlé’s RANDOMS mark. Accordingly, the Controller found the risk of a likelihood of confusion to be low.

This decision is an interesting one, even if it is one that it is not easy to comprehend quickly. Commentary appears to be divided on whether the Controller made the right decision. Both parties to the litigation have the necessary means to take the matter on through the appellate courts if needs be, so we may not have seen the last of this case.

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[1] Unilever Plc v Société des Produits Nestlé SA

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Alan Harper, Senior Associate, Intellectual Property & Trade Marks at Walker Morris LLP

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