Reported Trade Mark Cases November 2008

12 December 2008

Katharine Stephens and Zoe Fuller

Decisions of the ECJ and CFI


Ref no.  

CFI
T-224/07
Imperial Chemical Industries plc v OHIM
(10.10.08)

Application (and where applicable, earlier mark)  

LIGHT & SPACE


- Paints, varnishes, lacquers; driers, thinners, all being additives of paint; preservatives against rust and deterioration of wood; priming preparations (in the nature of paints) (2)

Comment  

The CFI dismissed the appeal, upholding the BoA’s decision to reject the mark for being devoid of distinctive character under Article 7(1)(b).
The CFI confirmed that a sign which fulfils functions other than that of a trade mark in the traditional sense is only distinctive under Article 7(1)(b) if it is perceived immediately as an indication of origin. The BoA had not erred in deciding that the mark applied for would be perceived first and foremost as a promotional message, intended to highlight positive aspects of the goods (e.g. that they help reflect light around interior spaces and make them appear more spacious), rather than an indication of commercial origin.
The CFI rejected ICI’s submission that the BoA was wrong to consider that the perception of the mark would be the same for all the goods covered by the application. All the goods could contribute to reflecting light around interior surfaces. It was therefore legitimate for the BoA to provide an overall statement of reasons.

Ref no. CFI

T-230/06
Rewe-Zentral AG v OHIM
(15.10.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)    PORT LOUIS
- leather and imitations of leather (18)
-  household textile goods (24)
- clothing, footwear, headwear (25)
Comment

The CFI annulled the BoA’s decision to refuse the registration of the sign on the grounds that it was exclusively composed of indications of the geographical origin of the goods applied for and hence was descriptive under Article 7(1)(c) as well as devoid of distinctive character under Article 7(1)(b).


Article 7(1)(c) does not in principle preclude the registration of geographical names which are unknown to the relevant class of persons - or at least unknown as the designation of a geographical location - or of names in respect of which, because of the type of place they designate, such persons are unlikely to believe that the category of goods concerned originates there.  It had not been shown that Port-Louis in Mauritius was currently well-known, or that it was likely to become well-known, to the average consumer in France or the UK for the manufacture or sale of household textile articles.  Accordingly, it upheld the Applicant’s appeal under Article 7(1)(c).


The BoA had deduced from the descriptive character of the sign applied for that it was also devoid of distinctive character for the purposes of Article 7(1)(b).  Accordingly, the CFI also upheld the Applicant’s appeal under Article 7(1)(b).

Ref no. CFI
T-297/07
TridonicAtco GmbH & Co. KG v OHIM
(15.10.08)
(Decision not yet in English)     
Application (and where applicable, earlier mark)


- electric and electronic devices for the operation of lamps; small magnetic and electronic transformers, especially for low voltage lamps; regulating and control devices and equipment for lighting installations and lights (9)
- light-emitting diodes for lighting purposes, electric lamps, lights, light modules and lights with light-emitting diodes as means of lighting (11) 

Comment

The CFI dismissed the appeal from the BoA’s decision to reject the application under Article 7(1)(b).


The BoA was right to conclude that the relevant public was the average English-speaking consumer who would either be a professional or a non-professional having some technical knowledge so that the expression “Intelligent Voltage Guard” could easily be understood as a smart mains voltage control mechanism rather than as a reference to the commercial origin of the goods and services.  Similarly, the BoA had rightly concluded that the relevant public would perceive the figurative element as the typical representation of a voltmeter, and hence a characteristic of the goods in question, rather than as the commercial origin of the goods and services.  As the combination of the verbal and figurative elements were not of a distinctive character, the CFI concluded that the sign as a whole was devoid of distinctive character under Article 7(1)(b). 


The Applicant also criticised the BoA on the ground that it did not state reasons for refusing to register the sign applied for in respect of each of the goods or services covered by the application.  The CFI held that the BoA was not required to do so: where the same ground of refusal is given for a category or group of goods or services, the competent authority may use only general reasoning for all of the goods and services concerned.

Ref no. CFI
T-305/06 to T-307/06
Air Products and Chemicals, Inc.  v OHIM; Messer Group GmbH
(15.10.08)
Application (and where applicable, earlier mark) FERROMIX
INOMIX
ALUMIX  
- gases and gas mixtures, including in liquid or soluble form, for the thermal treatment of materials; welding and cutting gases; protective gases (1)
- liquid and gaseous fuels (4)
FERROMAXX
INOMAXX
ALUMAXX
- gases and gas mixtures for welding, cutting and thermal spraying of aluminium and aluminium alloys (1)
Comment

The CFI annulled the BoA’s decision and upheld all three oppositions, finding that there was a likelihood of confusion under Article 8(1)(b).


The goods covered by the marks in question were in part identical and in part highly similar.  The BoA had been right in holding that all the signs were made up of inherently weak components (both the prefix and suffix of each sign were descriptive, or at least, evocative of the essential characteristics of the goods concerned).


However, the BoA had been wrong to hold that the signs were significantly different visually, phonetically and conceptually. The marks were visually and phonetically similar as (i) the beginning of each mark was identical; and (ii) the suffix of each mark began and ended with the same letter.  Although the marks were conceptually different in some respects, the meanings were not so far apart as to nullify the visual and phonetic similarities. 


Accordingly, the CFI held that there was a likelihood of confusion between the marks in question, despite the fact that the earlier marks had a weak distinctive character.

Ref no. CFI
T-73/06
Jean Cassegrain SAS v OHIM
(21.10.08)
(Decision not yet in English) 
Application (and where applicable, earlier mark)


- bags (18)

Comment

The CFI dismissed the appeal from the BoA’s decision to reject the application under Article 7(1)(b).


The BoA was right to hold that the sign applied for, when considering (i) each individual feature of the sign; and (ii) the sign as a whole, was similar to the usual shape of bags and was therefore devoid of distinctive character.


The BoA had also been right to disregard the way the Applicant was proposing to use the sign applied for when assessing distinctive character. A marketing concept is purely a matter of choice for the Applicant. It is liable to be altered after the CTM has been registered and cannot have any bearing on the assessment of the mark's registrability.  Similarly, the BoA had been right to disregard the commercial success of the sign applied for.  Under Article 7(1)(b), the Applicant must show that consumers did not need to become accustomed to the mark through the use made of it, but that the mark immediately enabled them to distinguish the goods or services bearing the mark from the goods or services of competing undertakings.  Article 7(3) would be redundant if a mark fell to be registered in accordance with Article 7(1)(b) by reason of its having become distinctive in consequence of the use made of it.  In this case, the CFI did not consider Article 7(3) as the Applicant did not plead it.

Ref no. CFI
T-95/07
Aventis Pharma SA v OHIM; Nycomed GmbH
(21.10.08)
Application (and where applicable, earlier mark)  PRAZOL  
- medicine (5)
PREZAL
- pharmaceutical, veterinary and hygiene products (5)
Comment

The CFI upheld the appeal and overturned the BoA’s decision, finding that there was a likelihood of confusion under Article 8(1)(b).


The CFI agreed with the BoA’s findings that (i) the relevant public was composed of medical professionals as well as patients who were likely to display an above-average degree of attention; and (ii) the goods in question were identical.
However, the CFI disagreed with the BoA’s conclusions concerning the comparison of the signs.  Visually, the CFI found that the signs were very similar: both signs consisted of a single word made up of two syllables and had the same number of letters, five of the six were identical and four appeared in the same order.  Phonetically, the CFI also found that the signs were very similar: the first and second syllables of each sign began with the same characteristic sound and the second syllable ended with a sound produced by the same letter.  As a result and since no meaning could be attributed to any of the signs which would enable end-consumers to distinguish between them, the CFI concluded that the signs were very similar.


The fact that the relevant public had an above-average degree of attention was not sufficient to displace the finding of a likelihood of confusion.

Ref no. CFI
T-133/06
TIM The International Music Company AG, TTV Tonträger-Vertrieb-2000 GmbH v OHIM; Past Perfect Ltd
(23.10.08)
Application (and where applicable, earlier mark) PAST PERFECT
- musical recordings; musical recordings in the form of discs; musical recordings in the form of tapes; musical recordings in the form of electronic memory devices; audio and musical compact discs; audio and musical cassettes and tapes; audio and musical mini-discs; audio and musical DVDs (9) The CFI upheld the BoA’s decision that the mark should not be declared invalid under Articles 51(1)(a) and 7(1)(b), (c) and (d).
Comment

The mark was not descriptive of the goods under Article 7(1)(c) in respect of either (i) consumers who did not understand the grammatical meaning of PAST PERFECT (and would consider it too vague to be descriptive of the goods concerned, the time of production or the specific content of the music, such as classical music); or (ii) consumers who would understand the meaning (and would understand the mark as fanciful and not as descriptive of the relevant goods).
The CFI dismissed TIM’s and TTV’s submission that the mark was devoid of distinctive character under Article 7(1)(b).  The mark had a meaning of its own, distinguishing Past Perfect’s goods from others.


The plea under Article 7(1)(d) was dismissed because TIM and TTV had failed to adduce any evidence that the mark had become customary to designate the relevant goods.

Ref no. CFI
T-158/06
Adobe Systems Inc v OHIM
(23.10.08)
Application (and where applicable, earlier mark) FLEX
- various computer software and programs, computer hardware, computer peripherals and data processing equipment (9)
- various computer related services (42)
Comment

The CFI dismissed the appeal and upheld the BoA’s decision to reject the application under Article 7(1)(c) in respect of goods other than computer hardware, computer peripherals and data processing equipment in Class 9 and all services in Class 42.


The BoA was entitled to find that FLEX was descriptive of those goods.  The word ‘flex’ designated a real-time computer language. The fact that the word ‘flex’ has many different meanings was irrelevant.


The CFI rejected the Applicant’s submission that the online dictionary to which the BoA referred was unreliable.


Distinctive character of figurative signs


Inter-Ikea Systems BV v OHIM (CFI (Sixth Chamber); Joined Cases T-387/06 to T-390/06; 10.10.08)


The CFI held that, by failing to examine the distinctive character of the marks in relation to each of the goods and services covered by the applications, the BoA had infringed Article 7(1)(b) in relation to certain designated goods.


Inter-Ikea Systems applied to register four figurative signs (reproduced below) as CTMs for a variety of goods and services in Classes 6, 7, 16, 20, 35, 39 and 42.



 


 


 
The examiner rejected the applications and the BoA rejected the appeals on the ground that the marks applied for were devoid of any distinctive character under Article 7(1)(b).


The CFI observed that the figurative signs consisted of graphic representations of one of the main elements of a loading pallet named “Optiledge’ (reproduced below), a product whose design and appearance differed from those of traditional loading pallets made of wood.
 



In its analysis, the CFI distinguished between goods and services that were (i) loading pallets or goods directly associated with loading pallets; and (ii) unrelated to loading pallets.


The CFI held that the BoA had rightly noted that, whilst the graphic representations had certain features which were different to the ‘Optiledge’ pallet (e.g. the square, round or triangular shaped holes or the rectangular space between the holes and the flange), these features were banal and added no distinctive character. The BoA had therefore purposely considered the signs to be devoid of distinctive character under Article 7(1)(b) in relation to the goods and services which consisted of (or were directly associated with) loading pallets.


The BoA had stated, in relation to all of the goods and services, that the signs were “faithful graphic representations” and that “the average customer …will perceive the mark applied for merely as a simple pallet device and not as an indication of trade origin”. Those considerations made it clear that the BoA had not examined distinctive character, even in general terms, in relation to goods and services that were unrelated to loading pallets.


The CFI therefore annulled the BoA’s decision in respect of these wider goods and services applied for.


Distinctiveness in non-English-speaking jurisdictions


Powerserv Personalservice GmbH v OHIM; Manpower Inc (CFI (Fifth Chamber); T-405/05; 15.10.08)


Manpower applied to register as a CTM the word MANPOWER in Class 35 for employment agency services and temporary personnel services and in Classes 9, 16, 41 and 42 for goods and services in connection with employment agency services. Powerserv applied for a declaration of invalidity under Articles 51(1), 7(1)(c) and 7(3).


OHIM rejected the application for a declaration of invalidity holding that, whilst the word ‘manpower’ was descriptive in English, the mark had acquired distinctive character through use in the relevant English speaking countries (UK and Ireland).  On appeal, the BoA upheld OHIM’s decision and extended OHIM’s finding as regards the member states in which the word ‘manpower’ was descriptive, to also include: German speaking countries (Germany and Austria) where the word ‘manpower’ was listed in dictionaries; and countries in which a substantial proportion of the relevant consumers had sufficient knowledge of, and practice in, business English (Sweden, Denmark, Finland and the Netherlands). Powerserv appealed to the CFI, alleging inter alia breach of Articles 7(1)(c) and 51(2). ower contended that the CFI should annul the BoA’s finding in relation to description. The CFI dismissed Powerserv’s appeal in its entirety and upheld Manpower’s application in part (in respect of the Netherlands, Sweden, Denmark and Finland).


The CFI confirmed that the descriptiveness of a mark should be assessed in accordance with the test laid down in Europig v OHIM (T-207/06): could the word ‘manpower’, in normal usage from the point of view of the target public, serve to designate – either directly or by reference to an essential characteristic – the goods or services protected by the mark? The CFI held that, in view of the broad specification of the services in question, the target public was made up of the entire population of working age, including both employers and employees. The BoA correctly concluded that the word ‘manpower’ was descriptive in the UK and Ireland of the services of an employment agency or a temporary personnel agency and of most of the goods and services protected by the mark in Classes 9, 16, 41 and 42.


The CFI also held that the Europig test should be used to determine descriptiveness in non-English-speaking member states. The CFI considered that there were two situations in which the Europig test would produce a positive answer: firstly, where the English word ‘manpower’ had been received into the language of a country and could be used to replace whatever word in that country’s language meant ‘work-force’ or ‘labour’, at the very least so far as the relevant public was concerned; or secondly, where, in the context of the goods and services protected by the mark, English was used to address the members of the relevant public. Conversely, the CFI concluded that the sole fact of a widespread knowledge of English by the relevant public would not be sufficient to produce a positive answer to the Europig test if English was not actually used in the context of the relevant goods and services. The CFI concluded that the BoA had erred in finding the mark descriptive in the Netherlands, Sweden, Denmark and Finland but was correct in holding that the word ‘manpower’ had entered into German business language and should therefore be considered descriptive in German speaking countries. The CFI therefore rejected Powerserv’s Article 7(1)(c) plea and upheld Manpower’s application to amend the BoA’s decision with respect to the Netherlands, Sweden, Denmark and Finland only.


The CFI roundly rejected Powerserv’s second submission that the BoA was not permitted to take into account any distinctive character of the MANPOWER mark which was acquired through use after registration of such mark for the purposes of Article 51(2). The precise purpose of Article 51(2) is to maintain the registration of such of those marks which, because of the use which made of them, have after their registration acquired distinctive character for the goods or services for which they were registered.


The BoA was correct in holding that the mark had acquired distinctive character through use in the UK, Ireland, Germany and Austria. The CFI considered the following factors important in reaching this conclusion: the high number of Manpower branches; Manpower’s turnover;  the number of client undertakings; the numerous press cuttings indicating the strong position of the mark on the market; and the length of time (25 years) for which Manpower had used the mark in certain jurisdictions. The CFI further held that the BoA was correct in concluding that the distinctive character acquired by the mark for the services in Class 35 could be taken to extend to the goods and services in the other classes.


Time limits for lodging an appeal


K-Swiss Inc. v OHIM (ECJ (Second Chamber); C-144/07; 02.10.08)


K-Swiss asked the ECJ to set aside the CFI’s order dismissing as inadmissible K-Swiss’ action against the decision of OHIM regarding registration of a trade mark on the ground that it was lodged out of time. 


K-Swiss submitted that its appeal was not outside the required time limit because the delivery of the disputed decision by OHIM was not by one of the means of notification provided for in the exhaustive list under Rule 61(2) of Regulation No 2868/95.  The decision was delivered by a courier service and this does not constitute a registered delivery with advice of delivery. 


The ECJ followed the CFI’s judgment, holding that, under Rule 68, where OHIM is unable to prove that a document has been duly notified, or if provisions have not been observed, but that document has reached the addressee, OHIM may produce proof of the date of receipt and that document is deemed to have been notified on that date. Therefore K-Swiss’s appeal was still brought outside of the allowed time limit and was inadmissible. 


Payment of other party’s costs in connection with inadmissible appeal to the BoA


Wilhelm Stepek (residing in Austria) v OHIM; The Masters Golf Company Ltd (CFI (Seventh Chamber); T-294/07; 25.09.08) - Decision not yet in English


The CFI dismissed Wilhelm Stepek’s (the “Applicant”) appeal in its entirety, refusing to (i) acknowledge that the BoA had been wrong to terminate the proceedings and declare the appeal inadmissible; (ii) annul the decision of the BoA; and (iii) order The Masters Golf Company Ltd (the “Intervener”) to pay the Applicant’s costs of the proceedings.


The Applicant applied to register a figurative CTM for goods in Classes 3, 9, 12, 18, 24 and 25. The Intervener opposed the application under Article 8(1)(b) on the basis of its national (UK) figurative trade mark for goods in Class 25 and its figurative CTM for goods in Classes 12, 25 and 28.
 
The Opposition Division upheld the opposition and rejected the application for registration in respect of goods in Classes 12, 25 and 28. The decision was notified to the parties on 6 September 2006 (the “Notification Date”).


Under Article 59, a notice of appeal must be filed within two months, and the grounds of appeal within four months, of the Notification Date in order for the appeal to be admissible. The BoA received a written statement from the Applicant on 9 January 2007, setting out the grounds of appeal, referring to a notice of appeal which allegedly had been filed on 23 October 2006 (within 2 months of the Notification Date). The BoA notified the Applicant of the fact that it had not received the notice of appeal or the appeal fee, and the Applicant subsequently informed the BoA that it wished to withdraw its appeal.  The BoA then terminated the appeal proceedings, declaring the appeal inadmissible and ordered the Applicant to pay the costs of the Intervener.  


The Applicant appealed to the CFI, submitting that the BoA’s decision to terminate the appeal proceedings and declare the appeal inadmissible had been unlawful as the proceedings had already been terminated and the appeal withdrawn at that stage. The CFI rejected the Applicant’s submission, stating that the BoA had been correct to terminate the proceedings and declare the appeal inadmissible as the Applicant had withdrawn the appeal prior to complying with the BoA’s request to provide evidence in support of its claim that the notice of appeal had been filed within two months of the Notification Date. 


The Applicant also submitted that the BoA had been wrong to order it to pay the costs of the Intervener relating to the appeal proceedings as no such costs would have been incurred by the Intervener (due to the appeal having been withdrawn/declared inadmissible). However, the CFI rejected this claim, stating that the Applicant had become liable to pay the Intervener’s costs as a result of the BoA’s decision having become final (Article 94(3) of Regulation 2868/95) and on the basis that the party who terminates the proceedings by withdrawing the appeal shall bear the fees and costs incurred by the other party (Article 81(3) of Regulation 40/94). Whether or not the Intervener had incurred any actual costs in relation to the Applicant’s appeal was therefore irrelevant. The CFI further held that the BoA had been entitled to fix the amount of the costs (to the maximum amount) to be paid to the Intervener (on the basis of Article 81(6) of Regulation 40/94).


Accordingly, the Applicant’s appeal was rejected in its entirety by the CFI.


Ice cream company successful in an action for trade mark infringement and passing off


Tubzee Ltd v Safron Foods Ltd & Ots* (Behrens J; [2008] EWHC B15 (Ch); 09.10.08)


Tubzee Ltd (“Tubzee”), a kulfi ice cream manufacturer and retailer, succeeded in an action for trade mark infringement and passing off against Safron Foods Ltd (“Safron”), another kulfi ice cream manufacturer and retailer which had used packaging for its kulfi ice cream which was confusingly similar to Tubzee’s packaging.


Kulfi is a generic term for a popular South Asian desert made with boiled milk and ice. Tubzee is the registered proprietor of a UK trade mark of a distinctive “K” and a CTM of a device featuring two pots pouring white liquid over a number of ice cubes (both reproduced below).

   
 UK trade mark     CTM
                                       
When considering trade mark infringement under Section 10(2), the Judge considered it plain that Safron had, in the course of trade, used a letter “K” and a device showing two pots pouring white liquid vertically, both of which were similar to registered trade marks belonging to Tubzee. The critical question was whether there was a likelihood of confusion on the part of the public (the average consumer of ice cream). Taking all of the conceptual similarities between the signs used by Safron and Tubzee’s trade marks into account, the Judge came to the clear conclusion that the relevant public would be likely to be confused. It followed that a claim for infringement of Tubzee’s two registered trade marks succeeded.

With respect to passing off, the Judge was satisfied that by June 2007 Tubzee had established goodwill in its goods by association with its packaging. The particular features of Tubzee’s packaging which were important were the distinctive dropped tail “K” and the two pots with white liquid falling vertically from them. The Judge was satisfied that the use of these two features on Safron’s packaging amounted to a misrepresentation as there was a risk of confusion among the public that Safron’s goods would be associated with those of Tubzee. It was plain that Tubzee had suffered some damage; at least two purchasers had bought Safron’s kulfi ice cream when they intended to purchase Tubzee’s kulfi ice cream. As such, the claim for passing off also succeeded.


The Judge was satisfied that, in approving Safron’s packaging, two of its directors were aware of its similarities with Tubzee’s packaging. The two directors incurred personal liability in respect of the trade mark infringement and passing off as they each procured Safron to commit the torts.


Repackaging 


The Wellcome Foundation Ltd v Paranova Pharmazeutika Handels GmbH (Opinion of A.G. Sharpston for the ECJ; C-276/05; 09.10.08)


This case was yet another episode in the long-running saga involving repackaging of pharmaceutical products for the purpose of parallel imports.


The Wellcome Foundation Ltd (“Wellcome”) owned the ZOVIRAX trade mark, registered in Austria for pharmaceutical products and marketed within the EEA by Wellcome or with its consent. Paranova Pharmazeutika Handels GmbH (“Paranova”) imported branded ZOVIRAX products from Greece, where they were sold in packs of 70 tablets. To comply with Austrian regulations, Paranova repackaged the products in packs of 60. Paranova’s packaging differed from the original in that it included the words “Repackaged and imported by Paranova” in bold type and block capitals on the front, the manufacturer was referred to on the sides and back in normal type and there was a blue band at the edges, as regularly used by Paranova.


Paranova informed Wellcome of its intention to market ZOVIRAX in Austria, and enclosed colour prints of the outer packages, the blister packs and the instructions for use. Wellcome requested a complete sample of the packaging and that Paranova disclose the state of export and the exact reasons for the repackaging. While Paranova disclosed the reasons for the repackaging (different sizes of packaging), it refused to disclose the state of export or to provide a sample unless Wellcome paid.


Wellcome sought an injunction preventing Paranova from marketing ZOVIRAX in packaging with the features referred to above and without informing it of the state of export and precise reasons for the repackaging. The dispute reached the Oberster Gerichtshof, which made a referral to the ECJ.


The Oberster Gerichtshof asked whether Article 7 of the Trade Marks Directive (and the case law of the ECJ) should be interpreted as meaning that proof that reliance on the trade mark would contribute to an artificial partitioning of the market must be furnished not only as regards the repackaging in itself, but also as regards the presentation of the new packaging. To the extent that this question is answered in the negative, is the presentation of the new packaging to be measured against the principle of minimum intervention or (only) against whether it is such as to damage the reputation of the trade mark and its proprietor?


The referring court further asked whether Article 7 (and the case law of the ECJ) should be interpreted as meaning that the parallel importer fulfils his duty of notification only if he informs the proprietor of the trade mark also of the state of export and the precise reasons for the repackaging.


The first question had already been answered in the negative in Boehringer II (C-348/04), where it was held that the condition is directed at the fact of repackaging - and the choice between a new carton and oversticking - and not at the manner or style in which it has been repackaged.


The criterion for the presentation of repackaging


The AG was of the opinion that the repackaging must be evaluated with only one consideration in mind: will it damage the reputation of the trade mark and its owner.  The AG rejected Wellcome’s submissions that the presentation of the repackaging must also be assessed by reference to the principle of minimum intervention. The AG was not convinced that Loendersloot (C-249/95), which did not concern pharmaceutical products, was of much assistance in the present case.


In Paranova v Merck (E-3/02) the EFTA court had held that, where the right to repackage was beyond doubt, imposing the necessity requirement on the conduct of the parallel importer, in particular on its strategy of product presentation, would constitute a disproportionate restriction on the free movement of goods. The AG commented that such a statement made no sense if repackaging which goes beyond minimum intervention was automatically unlawful. Moreover, the starting point must be that the trade mark proprietor had exhausted its rights. It was only if there existed “legitimate reasons” for opposing further commercialisation within the meaning of Article 7(2) that those rights revived.


The extent of the duty of notification


The AG confirmed that the purpose of the requirement to give notice was to protect the legitimate interests of the trade mark proprietor. It was clear from Bristol-Myers Squibb (joined cases C-427/93, C-429/93 and C-436/93) that these legitimate interests were: (i) that the consumer should not be misled as to the origin of the product; (ii) that the repackaging does not affect the original condition of the product; (iii) that the presentation is not likely to damage the reputation of the trade mark; and (iv) that the product to be marketed is not counterfeit. The AG agreed with Paranova that none of those interests were served by requiring the parallel importer to identify the state of export. The AG rejected Wellcome’s submission that such information was necessary in order for the trade mark owner to be able to check whether the repackaging was necessary.


The AG opined that the parallel importer was required to give the trade mark owner enough information, in enough detail, to demonstrate necessity. It was then for the trade mark owner to decide whether to accept, on the basis of the information supplied, that the repackaging was necessary, or to take proceedings against the parallel importer. However, the AG also commented that the parallel importer should not be able to “shift his ground” once he has submitted the relevant information. In other words, if a national court found that the parallel importer had not made out necessity based on the probative weight of the material provided to the trade mark owner, the court would prohibit the parallel importer from marketing the repackaged products.


Conclusion


The AG concluded that where a parallel importer of pharmaceutical products repackages the products in new packaging on the ground that this is necessary in order to market the product in the Member State of importation, the lawfulness of new packaging is to be measured solely against whether it is such as to damage the reputation of the trade mark and its proprietor. In such circumstances, the parallel importer, in order to fulfil his duty of notification under Article 7, must give the trade mark proprietor information which objectively demonstrates that the repackaging was necessary. Such information may, but need not necessarily, include identification of the state of export.


COPYRIGHT/DATABASE RIGHT


Copyright and database right – unlawful copying by hired IT consultant


Magical Marking Ltd and Andrew Warden Phillis v Sean Patrick Holly & Ots* (Norris J; [2008] EWHC (Ch) 2428; 16.10.08)


A former director was liable for passing off by attempting to divert business from his old employer’s company. An IT consultant hired by the former director infringed the copyright and database right in the company’s electronic business records by making copies of these because he had not acted with the authority of the company’s former director in making those copies. It was just and equitable that the former director provide the IT consultant with a complete indemnity against damages sought by the company.


Mrs Phillis (“P”) had created and built up the business of Magical Marking Ltd (“Magical”), a playground painting business. Mr Holly (“H”, the first Defendant) was a director. P and H’s relationship became strained and eventually P called for an EGM on 13 February 2003 to remove H from office.


On 13 February 2003, H and an IT consultant hired by H (“C”, the third Defendant), visited Magical’s offices and made a complete copy of Magical’s electronic business records. Magical’s latest data back up tape was removed and its computer system was disabled by the insertion of new passwords which C did not provide to any of Magical’s staff when he left the premises. This action rendered Magical’s business systems completely inoperable. Summary judgment was entered against H for copyright and database right infringement, and also for misuse of confidential information. The current trial centred on the liability of C and his company (“N”, the seventh Defendant).


The Judge stated that the main issue was whether H had had the authority of Magical to instruct C to do what he did. If H had had such authority, it would afford C and N a defence. However, the Judge went on to hold that H had had neither actual nor ostensible authority to instruct C to copy Magical’s business records, and it followed that C and N were liable for copyright infringement under Sections 16 and 17 of the Copyright, Designs and Patents Act 1988 and database infringement under Section 16 of the Copyright and Rights in Databases Regulations 1997. No separate case relating to confidential information was specifically made against C. However, the Judge found that password protected data in Magical’s computer database had been confidential. On that basis, C and N had knowingly copied Magical’s confidential information.


The Judge granted an injunction restraining C and N from infringing Magical’s copyright or database right, or from using or disclosing any of Magical’s confidential information. He also ordered the delivery up of all infringing material which was still in C or N’s possession. Magical was also given the right to elect for an account of profits in lieu of damages or equitable compensation.
The Judge held that H had warranted to C and N that he had power legitimately to instruct them. H was in breach of that warranty. As regards the claims of infringement of copyright and database right and the misuse of confidential information, H was liable in respect of the same damage as C and N. If Magical decided to elect for damages or equitable compensation, it was just and equitable, having regard to the extent of H’s responsibility for the damage in question, that H afford C and N a complete indemnity.


The Judge held that C had uploaded Magical’s systems on to another company’s computers (specifically on to the computers of Quest, which was later taken over by ESP, a company set up and run by H after his departure from Magical). This act of uploading constituted further infringing acts. In connection with these further infringing acts there was no possibility of any defence of “authority” on C’s part. The Judge held that H was ESP’s directing mind. ESP copied the contents of Magical’s systems on to its own system and utilised that material in the conduct of its business. Claims against ESP for infringement of copyright and database right and misuse of confidential information succeeded. Magical was entitled as against ESP to relief in the same terms as that already granted against H in the previous summary judgment (which was unreported).


H admitted that Magical owned the goodwill in the business attaching to Magical. However, H represented to customers and potential customers that ESP was connected with Magical. He also registered the domain name www.magicalmarkings.co.uk (a name confusingly similar to Magical’s name) and caused web customer enquiries to be diverted to a site operated by ESP. The Judge considered it clear that damage had been caused by those representations as ESP had a substantial turnover when it entered administration. As such, Magical was entitled to relief in respect of passing off. Relief would be in the same terms as that granted in respect of the infringement of copyright and database right and the misuse of confidential information (injunction, delivery up and the right to elect between an account of profits, damages or equitable compensation).


COUNTERFEITING


Defence that goods which were so poor in quality as not to confuse the public as to their origin was not a defence to counterfeiting


R v Gary Boulter* (Toulson LJ, Griffith Williams J, Recorder of Winchester; [2008] EWCA Crim 2375; 07.10.08)


An applicant who wished to appeal against his conviction for a counterfeiting offence was seeking to raise a novel defence which did not appear in statute or in case law. The defence that his counterfeited goods were so poor in quality as not to confuse the public as to their origin had no foundation in law.


In 2007, Boulter was convicted of the offence of unauthorised use of a trade mark contrary to Section 92(1)(c). The CoA Criminal Division heard arguments on the renewal of an application for leave to appeal against his conviction following the trial Judge’s refusal. The Court dismissed the application.


In 2005, police seized a stock of counterfeit DVDs and CDs from Boulter’s home, along with equipment used for creating counterfeit goods. EMI and other reputable companies’ logos appeared on the packaging of the DVDs and CDs. 


Boulter’s defence statement proposed that the DVDs and CDs bearing the trade marks were of such poor quality that no one would think that the trade origin of the DVDs or CDs was that of the trade mark owner. Accordingly, the use of the trade marks was not likely to jeopardise the guarantee of origin which constituted the essential function of the trade marks (following Arsenal Football Club plc v Reed [2003] EWCA Civ 696). Boulter denied that he had committed any civil or criminal offence involving use of trade marks. At first instance the trial Judge ruled that the quality of the counterfeiting was immaterial, following which Boulter entered guilty pleas.


Boulter’s defence statement referred to R v Johnstone [2003] UKHL 28 in which it was held that there was no criminal offence under Section 92 if the intended use of the goods was not a civil infringement under Section 10. Boulter argued that in order for there to be a civil infringement there had to be a likelihood of the public being deceived or confused. Toulson LJ held that this was the case for Section 10(2) trade mark infringement, but not for Section 10(1) infringement. In Boulter’s case, he had used an identical sign to that of the trade mark (however badly it had been copied) in relation to goods identical to the goods of the trade mark owner. Accordingly, the trade mark infringement in question was 10(1) infringement and there was no requirement to establish a likelihood of confusion.


Toulson LJ agreed with Boulter’s Counsel that it still had to be established that the intended usage of the goods was a trade mark use. Toulson LJ stated that care was needed in the use of this term as there was no statutory definition of it and it was not always used in the legal authorities in the same sense. Again, Boulter’s defence statement referred to R v Johnstone and Arsenal Football Club plc v Reed (cases which addressed the issue of trade mark use). After deliberating dicta in those two cases, Toulson LJ held that the reasoning in those cases made no practical difference in the present case. In the present case, it could not seriously be suggested that the use of the EMI logo or other logos was anything other than trade mark use as the trade marks were not used descriptively. What the applicant had done amounted to “pure counterfeiting”.


Toulson LJ referred to the judgment of Lord Nicholls in R v Johnstone. Nowhere in his judgment was Lord Nicholls concerned with the question of the quality of the reproduction of a trade mark. Although Lord Nicholls did not expressly address this question, it was clear that Lord Nicholls did not think that it had any relevance.
Toulson LJ considered that allowing a defendant to advance a defence that the quality of goods was so poor as not to give rise to any risk of confusion would go a considerable way to assisting the counterfeiter who sells his goods as “genuine fakes” or who at the point of sale disclaims the authenticity of his goods by describing them as “brand copies” or similar. It was impossible to read Parliament as having intended such a loophole where there was a straightforward counterfeiting of goods bearing a registered trade mark.


The reality was that Boulter was seeking to raise a novel defence which did not appear in statute or in case law.


Reporter’s note: We are grateful to our colleagues at Bird & Bird for their assistance with the preparation of this report: Céline de Andria, Gina Brueton, Emilia Linde, Patrick Rennie, Kathryn Robinson and Alice Sculthorpe


ECJ and CFI decisions can be found at http://curia.eu.int/en/content/juris/index_form.htm and the reported cases marked * can be found at http://www.bailii.org/databases.html#ew