O2 Ltd & Anr v. Hutchison 3G UK Ltd (Pumfrey J.;  EWHC 2571 (Ch); C/128/04; 9.11.04)
The claimants and defendant were both suppliers of mobile phone services. The claimants unsuccessfully applied for interim relief to restrain the defendant from further publishing certain radio, television and press advertisements for pre-pay services.
The claimants made three complaints about the advertisements. Firstly, they claimed that that the price comparison between the claimants’ and defendant’s products shown on the advertisements was grossly misleading and an oversimplification of any legitimate comparison which could be made. Secondly, they argued that the advertisements infringed the claimants’ UK registered trade marks for Bubbles. Thirdly, they claimed that the advertisements infringed the claimants’ UK mark and CTM for O2.
The defendant contended that the price comparison was accurate or, alternatively, fair, and that the bubbles were insufficiently similar to the trade marks to be infringements. Additionally, they argued that the use of the UK marks was entitled to protection under Section 10(6) and the use of the CTM was protected by Article 12(b) of the CTM Regulation.
So far as the Regulation was concerned, the parties were agreed that the law on comparative advertising had to be determined in accordance with the principles in Recitals 13 to 15 of the Comparative Advertising Directive (despite the fact that the Recitals only referred to the Trade Marks Directive and not to the Regulation). Pumfrey J. also had in mind the 13 “robust” criteria set out by Jacob J. in Cable & Wireless plc v British Telecommunications plc  FSR 383. Finally, he noted that an objective comparison was key to the comparative advertising defence and that use of the trade mark had to be “indispensable in order to make comparative advertising effective” (Recital 14 of the Comparative Advertising Directive). This last requirement was particularly important in relation to the case on the Bubbles mark, since the use by the defendant of bubbles in their advertisement was gratuitous and could not be described as “indispensable”.
Pumfrey J. held that he was not required to perform a minute analysis of every aspect of the advertisements but should instead look at the “take home message” aimed at the average consumer interested in acquiring or changing service provider. His preliminary assessment was that it was true. Consequently, the question of honest practices did not arise. But, if he was wrong, Pumfrey J. held that he could not conclude that the advertisement was not honest.
The case on the Bubbles mark was more difficult. Nevertheless, he refused to grant the injunction. When considering the balance of convenience, his considerations included the weakness of the claimants’ case, in particular the lack of evidence of dishonesty, and, in relation to the bubbles, the lack of evidence of confusion.
Bongrain SA’s Application* (Potter, Longmore & Jacob LLJ;  EWCA Civ 1690; 17.12.04)
Bongrain, the manufacturer of SAINT ALBRAY cheese, applied to register two 3-D marks as a series for cheese and dairy products in Class 29 (see below). Protection was sought for the shape of the cheese regardless of its colour or wrapping. The Registrar refused the application. Pumfrey J. ( EWHC 531 (Ch);  CIPA 338) dismissed the appeal. The Court of Appeal dismissed the appeal from Pumfrey J.’s decision.
Jacob L.J. rejected Bongrain’s primary submission that a very fancy shape was sufficient to confer inherent distinctive character under Article 3(1)(b). Just because a shape was unusual for the kind of goods concerned, the public would not automatically take it as denoting trade origin. What mattered were the presumed expectations of the average consumer (Mag Instrument v. OHIM C-136/02;  CIPA 600). In this case, where no other cheese shape was said to be registered, a consumer would be astonished to be told that one shape was a trade mark – consumers did not expect to eat trade marks. Further, mere use of a shape would be insufficient for registration unless, following such use, the shape acquired distinctive character in the trade mark sense. The evidence of use in this case was insufficient for that purpose.
Jacob L.J. also rejected the public interest submission. He held that the depletion in availability argument in Libertel v. Benelux–Merkenbureau  FSR 65 was not restricted to colour marks. Nor was it an independent ground of objection, as it should be considered under, at least, Articles 3(1)(b) and (c). Similarly, the shape-to-cut point, indicating intended purpose, was relevant to both Articles 3(1)(b) and (c).
Finally, Jacob L.J. was critical of the length of time, four and a half years, between the date of application and the Registry decision refusing registration. The Registry was entitled to be firmer in refusing to allow extensions of time for service of additional evidence of use.
La Mer Technology Inc v. Laboratoires Goemar SA (Blackburne J.;  EWHC 2960 (Ch); 21.12.04)
La Mer Technology applied to revoke, for non-use, the mark LABORATOIRE DE LA MER registered in class 3 for perfumes and cosmetics. Although there was very limited use, the hearing officer held that there had been genuine use of the mark in relation to cosmetics. On appeal, Jacob J. (as he then was)  ETMR 34 referred various questions to the ECJ but noted that if it had not been for the reference, he would have dismissed the appeal. Applying the judgments of the ECJ in this case,  FSR 38, and in Ansul BV v. Ajax Brandbeveiling BV RPC 40, Blackburne J. held that the proven use fell short of genuine use. The appeal therefore succeeded.
Blackburne J. noted that Ansul made it clear that genuine use had to reflect the essential function of a trade mark and that there had to be use of the mark on the relevant market. Whether that use was genuine or real depended on the facts and circumstances of the case. The fact that the proprietor intended to use the mark was, of itself, insufficient. The assessment was essentially objective. The only occasion when it would be appropriate to consider the purpose behind the proven use would be where the use was for the purpose of preserving the registration and not for preserving or creating market share.
The question to be decided in this case was whether the very limited use was sufficient to be genuine. The use relied upon was the purchase, by five deliveries, of £800 worth of products. There was nothing to indicate that the products were offered for sale or that steps, whether by advertising or otherwise, were taken to bring the public’s attention to the mark. Blackburne J. held that this use had all the attributes of internal use. Such use did not qualify as genuine use because it did not expose the marked goods to the relevant market.
The Trustees in the CB Simkin Trust and the Trustees in the NC Simkin Trust v. The Commissioner of Inland Revenue of New Zealand* (Lords of the Judicial Committee of the Privy Council; No. 64 of 2003; 14.12.04)
Sections EG1 and OB1 of the Income Tax Act 1994 allows a taxpayer to deduct from his taxable income an amount on account of depreciation for any depreciable intangible property owned by that taxpayer in the tax year in question. Relevant “depreciable intangible property” is listed Schedule 17 and includes “the right to use a trade mark”. This is to be contrasted to a trade mark right, which is not included in Schedule 17 because of the longevity of its useful life.
The Trustees (the appellants in this case) granted exclusive rights to use the trade marks AUTOLODGE and THE MILL for a seven year period. They then claimed a depreciation allowance for that seven year period. Their Lordships were of the opinion that the claim to the depreciation allowance should fail because the Trustees did not own any “depreciable intangible property”. The right to use the trade marks was depreciable intangible property but, during the seven year period, the Trustees did not own that right. That right belonged to the exclusive licensees.
El Cortes Ingles v. OHIM (CFI; T-8/03; 13.12.04) (decision not available in English at the time of writing)
The applicant applied to register EMILIO PUCCI (manuscript handwriting) for toiletries, leather goods, umbrellas, textiles and bedlinen, dresses, shoes and hats in Classes 3, 18, 24 and 25. The application was opposed by El Corte Ingles on the basis of its earlier Spanish mark for EMIDIO TUCCI (manuscript handwriting) registered in respect of toiletries, dresses, shoes, boots and trainers in Classes 3 and 25. The effect of the Board of Appeal’s was to allow registration in respect of certain of the Class 18 goods only. El Corte Ingles appealed.
The CFI dismissed the appeal in its entirety and held that, despite the similarity of the signs, the products covered by the marks in question were not sufficiently similar to lead to a risk of confusion amongst the relevant public. The CFI held that OHIM had been correct in finding that the goods in Class 18 had a nature and purpose different to those covered by the earlier marks in Classes 3 and 25. Furthermore, the materials and textile products in Class 24 differed in nature, purpose, origin and distribution channels to those covered by the earlier marks.
The CFI also held that OHIM had been correct in finding that the appellant had not provided sufficient evidence to establish that its earlier marks had an enhanced distinctive character because of the notoriety they enjoyed in the Spanish market. Finally, the CFI concluded that the additional evidence in support of this last point, presented for the first time before the CFI, was inadmissible in accordance with previous jurisprudence.
The Gillette Company v. LA-Laboratories Ltd Oy (A.G. Tizzano for the ECJ; C-228/03; 9.12.04) (decision not available in English at the time of writing)
LA were selling razor blades in Finland, the package of which stated that they were compatible with Gillette Sensor razors. The reference from the Third Instance Finnish Court concerned principally the meaning of “necessary” in Article 6(1)(c) in the Directive, and the proviso of “honest practices”.
The Opinion (based very largely on the BMW v. Deenik Case C-63/97 decision and, to a lesser extent, on Gerolsteiner Brunnen v. Putsch (KERRY/GERRI) Case C-100/02 and, to an even lesser extent, on the Comparative Advertising Directive) emphasised that the scope of “necessary” could not be determined from the wording of Article 6(1)(c) alone because that would void the derogation of any substantive meaning. In Gerolsteinerthe ECJ had already stated that the objective of Article 6 in limiting the exclusive rights of a trade mark owner was to reconcile the fundamental interests of that owner with the interests of free circulation of goods/free offering of services in the common market in such a way as to enable trade mark law to fulfil its essential role in a system of undistorted competition, the establishment and maintenance of which was the aim of the EC Treaty.
Having regard to the use of “in particular” in Article 6(1)(c) and in answer to the first two questions from the Finnish Court, the A.G. opined that the provision was not limited to accessories or spare parts and could apply to any kind of product or service so long as it did not create confusion as to origin and the usage was “necessary” to indicate intended purpose.
As to the meaning of “necessary”, having regard to the above overall consideration of balancing interests, it was for the national judge to decide whether the impugned usage was the only means of furnishing to consumers complete information about the possible uses of the product. But, relying heavily on the Court’s logic in BMW, the emphasis was more on the honesty test than on the necessity test because it was the former that was decisive in avoiding the likelihood of confusion and thus protecting the trade mark owner. The A.G. acknowledged that there could be quite a margin here for error.
Then there was a question whether the determination of honesty of the impugned use was influenced by the fact that the user of the mark also markets competing products (here, not just razor blades but also razors themselves) and whether then there was an implication that the competing product was equivalent to or was of the same quality as the trade mark owner’s product. The A.G. was of the opinion that these questions were for the national judge but that they should be decided in the context of a “global appreciation, taking all relevant factors into account”; and following BMW again, the usage could be considered honest so long as it did not engender the impression of a commercial connection with the trade mark owner and did not unduly take advantage of the distinctive character or the repute of the trade mark. There was no necessary implication of qualitative equivalence of the respective products. The fact that the alleged infringer also produced products of the same type could be an important element in the appreciation of the legality of the impugned usage but did not modify the criteria for that appreciation.
OHIM v. Zapf Creation AG (ECJ; C-498/01P; 1.12.04)
Following the decision of A.G. Jacobs  ETMR 67, Zapf informed the Court of Justice that it had withdrawn its application for registration of NEW BORN BABY as a CTM. Consequently, it was unnecessary for the ECJ to give judgment. The Court ordered that Zapf pay the costs of proceedings.
Non‑literal copying of software
Navitaire v. easyJet & BulletProof* (Pumfrey J.;  EWHC 1725 (Ch); 30.7.04)
It is well known that software is protected by copyright under the laws in the EC. It is obvious when someone without a licence simply copies a CD-ROM containing software that the elements of copyright infringement are present. But if someone just makes a program to do what another program does, and makes it so that the user would find it hard to distinguish the two programs, does copyright protect the “business logic” underlying the program?
After years of uncertainty in this jurisdiction, the Navitaire case finally answers this important question.
Navitaire had supplied a ticketless airline booking system called OpenRes to easyJet. As relations between the parties deteriorated, easyJet decided to create its own system, which it called eRes, and retained the services of a US corporation, BulletProof, to assist.
None of the actual code supplied by Navitaire was copied – in fact only the source code to one part (TakeFlight, the online booking module) was provided to easyJet – but to a user eRes was barely indistinguishable from OpenRes as it did more or less the same functions.
Navitaire made a number of allegations, including the following:
The individual commands used by users to make inquiries of the system and to make it perform its functions were each a copyright work.
The collection of all these commands was a “compilation” and as such protected by copyright.
The essential similarity of eRes to OpenRes meant that “non-textual” copying had taken place by easyJet and Bulletproof had copied the “business logic”.
Unauthorised copying of the structure of the database had taken place as part of data migration.
Navitaire’s claims for the most part failed. On the detailed facts, the Court found the law to be as follows:
Individual commands (including even complex commands) could not benefit as such from copyright protection.
A set of such commands was more in the nature of a computer language, and did not therefore benefit from copyright protection.
The layout of a GUI screen could be an artistic work as could individual icons (assuming sufficient skill and labour had gone into their design).
It would be an unjustifiable extension of copyright law to protect the “business logic” underlying a computer program and the present case could not be said to be like copying the plot of a novel or a play.
Although some database materials had been copied by easyJet to BulletProof for the purposes of data migration, including for the use of screen shots, a defence existed because these steps were necessary and were therefore permitted by section 50D of the Copyright Designs and Patents Act 1988, and moreover on the precise facts Navitaire’s allegations in this area for the most part failed.
Implications for IT law
The actual case was concerned with commands entered at a prompt (not so common these days of windowing systems) but the case confirms that computer languages and command sets do not benefit from copyright protection.
One upshot of the case is that copying a competitor’s program (what it does and how a user interfaces with it) may well not amount to copyright infringement.
On the other hand, slavish copying of screen displays and icons could well amount to copyright infringement.
More worryingly, some of the activities associated with data migration might be infringements of copyright – since any change to a new computer system will involve a large element of migrating data. A review of best practice in this area is strongly advised.
Microsoft Corp v. Commission of the European Communities(President of the CFI; T-201/04; 22.12.04)
By the Commission’s decision of 24 March 2004 under Article 82 (Case COMP/C-3/37.792), Microsoft was fined almost €500m. The following remedies, amongst others, were also ordered:
By way of remedy for its abusive refusal to make the interoperability information available, i.e. certain communications protocols, but not source code, Microsoft was ordered to grant licences on reasonable and non-discriminatory terms to interested undertakings for the purpose of developing and distributing work group server operating system products
By way of remedy for abusive tying, Microsoft was ordered to offer a fully functioning version of the Windows Client PC operating system which did not incorporate Windows Media Player (previously it had made the former conditional on the simultaneous acquisition of the latter)
Microsoft have appealed the decision but, in these interim proceedings, also applied for interim measures to stay the above two remedies. The President of the CFI dismissed the application. In relation to both issues, the President held that Microsoft submissions could not be regarded as prima facie unfounded and, therefore, the prima facie case for granting the stay was satisfied. However, Microsoft did not prove that the stay was a matter of urgency in that it would cause the company serious and irreparable harm. Since the conditions for granting the stay were cumulative, the application was dismissed.
Microsoft’s attack on the Commission’s decision centred on the finding of the abusive nature of the refusal to make the interoperability information available, which in turn, raised a number of questions including whether the requirements laid down by the ECJ in IMS Health v. NDC Health All ER (EC) 813 were satisfied. Two issues in particular arose:
- Microsoft denied that use of the interoperability information was indispensable for enabling potential competitors to gain access to the market in which Microsoft occupied a dominant position (which also raised issues of decompilation under Article 6 of the Directive on the protection of computer programs)
- Microsoft submitted that its refusal to licence was objectively justified on the grounds of its IP rights. The company argued that by relying on its IP rights it did not have to disclose the interoperability information even if “exceptional circumstances” existed involving abusive conduct. Microsoft further submitted that the Commission had incorrectly weighed up the competing interests; its incentive to innovate versus the impact on the level of innovation of the whole industry. The President held that Microsoft’s arguments could not be rejected outright
In relation to the question of urgency, the President found that most of Microsoft’s concerns could be dealt with in the licences granted to its competitors, for example, they could contain contractual safeguards concerning confidentiality and the use of the information pending the decision in the main action.
The tying issue
Microsoft disputed the factual basis for the Commission’s decision and maintained that Windows and its media functionality were not two distinct products. The company also submitted that:
The Commission applied a new and speculative theory on tying in concluding that the ubiquitous distribution of media functionality in Windows will compel content providers to encode their content almost exclusively in Windows Media formats which will, in turn, eventually drive all competing media players out of the market and then, indirectly, oblige consumers to use only Windows multimedia functionality, i.e. it will have a foreclosure effect in that it will tip the market in favour of Microsoft. This ignored the realities of the market in which consumers were able to obtain third party media players through the Internet, sometimes free of charge. The President described the Commission’s analysis as, in part, “prospective”. The issue raised was complex and could not be resolved in interim proceedings
The Commission should have given greater weight to the advantages flowing from the Windows operating system design concept. The President considered this to be an intricate question, involving consideration of whether the positive effects associated with the increasing standardisation of certain products constituted objective justification or whether, as the Commission contended, the positive effects of standardisation should only be accepted when they resulted from the operation of the competitive process or from decisions taken by standardisation bodies.
Microsoft has set up a very basic web page for those interested in applying for a licence over the communications protocols (see www.microsoft.com/mscorp/legal/eudecision/). It has announced that it will make the version of Windows without the Media Player code available to PC manufacturers in January which, in turn, will mean that it will be available to resellers in February. Microsoft has also stated that the two versions will probably be sold at the same price.
Artistic copyright infringement
PC Media Ltd v. Highbury – SPL Publishing Ltd(Laddie J.;  EWHC 2985 (Ch); 21.12.04)
The claimant in this action was a well known publisher of a monthly home design and decorating magazine entitled ‘Ideal Home’. The defendant published ‘Home’; a competing monthly magazine.
The claimant was unsuccessful in its complaint that the outer covers and various parts of the internal sections of certain ‘Home’ issues infringed the copyright in earlier issues of ‘Ideal Home’. The claimant produced a list of features from the accused ‘Home’ magazines which it alleged were similar to and copied from equivalents in the ‘Ideal Home’ magazines and which, taken together, represented a reproduction of a substantial part of the claimant’s copyright works. It was alleged that each of these ‘Home’ magazines infringed the copyright in all the equivalent ‘Ideal Home’ issues.
The defendant denied copying any of the claimant’s works. It argued that the similarities relied on were trivial and did not raise an inference of copying. The defendant further contended that the similarities which did exist between the magazines were due to the use of design tricks and concepts which were common in the field.
The court was critical of the way the claimant drafted its pleadings. The claimant appeared to be asserting copyright in the ‘Design Elements’ of the magazines, such as design, subject matter, theme and presentational style, rather that the covers and articles themselves. Laddie J. said that this was an illegitimate method as “[c]opyright is not a legal millefeuille with layers of different artistic copyrights”. Although a substantial part of the copyright may consists of the Design Elements so that unlicensed copying of them would amount to copyright infringement, there is only one artistic copyright asserted for each cover and article, namely that in the cover or article as a whole.
This was a case of artistic copyright and therefore the claimant could not complain about words used by the defendant on the ‘Home’ magazines as these would be protected by literary copyright. However, Laddie J. was persuaded by the claimant’s argument that if the defendant copied any words from ‘Ideal Home’ there was an increased chance that it copied other features as well.
Nevertheless, the court held that the claimant had failed to make a credible case of copying. The similarities between the two magazines were minor and at too a high level of generality to amount to infringement. Instead, it was held that this was a case of similarity by excision whereby the court is invited by a claimant to concentrate on features of his work similar to the alleged infringement and lose sight of the differences, which can be just as important, in deciding whether copying has taken place.
The following cases have been reported, but summaries have not been included in the CIPA Journal to date.
Sawkins v. Hyperion Records Ltd (Patten J.;  EWHC 1530 (Ch);  4 All ER 418;  RPC 4): Copyright existed in a musical work based on an existing score provided that the new work was sufficiently original in terms of the skill and labour used to produce it, for example, as here, by correcting the original score and recreating missing parts.
Law Society of Upper Canada v. CCH Canadian Ltd (Supreme Court of Canada;  FSR 44): Copyright subsisted in headnotes and case summaries of judgments. Reported judicial decisions, being a compilation of the catchline, case title, headnote and judgment, were also original works and covered by copyright. In providing self‑service photocopiers, The Great Library did not authorise patrons to breach copyright law. Further, it had not infringed copyright by its request‑based photocopy service as the service came within the “fair dealing” exception for research and private study (s.29 Copyright Act, R.S.C. 1985)which was not to be interpreted restrictively and covered “fair” commercial legal research.
Reporter’s note: I am grateful to my colleagues at Bird & Bird Cristina Garrigues, Rebecca Annison and Zoe Fuller, and to my editor, Tibor, for helping me with the preparation of this month’s report. I am also grateful to Richard Stephens of L.O.R.S. for the summary of theNavitaire decision.
Those decisions marked with a * can be found at www.bailii.org. All CFI and ECJ decisions can be found at http://curia.eu.int/en/content/ juris/index.htm.