January 2009

01 January 2009

Katharine Stephens and Zoe Fuller



This month we report on the ECJ's decision in The Wellcome Foundation v Paranova on the repackaging of pharmaceuticals;  the court's decision on the remuneration of collecting societies; and the CFI's decision in New Look v OHIM in which it considers the relevant territories for assessment of whether a sign in English has acquired a distinctive character through use. <top>


To be taken to your case of interest within the table please click on the below:



Ref no.  

ECJ
C-57/08
Gateway Inc. v OHIM; Fujitsu Siemens Computers GmbH
11.12.08)

Application (and where applicable, earlier mark)  

ACTIVY Media Gateway
- electrical apparatus, computers, software (9)
- storage and retrieval of data and information (35)
- forwarding and distribution of data (38)
Various earlier Community and UK trade marks (word and figurative) containing the term ‘Gateway’
- various IT related goods and services in Classes 9, 35, 36, 37 and 38

Comment  

The ECJ upheld the CFI’s rejection of the opposition under Articles 8(1)(b) and 8(5).


The CFI’s findings that (i) the ‘gateway’ element of the mark applied for was descriptive; and (ii) the element ‘activy’ was dominant, were assessments of a factual nature and not subject to review by the ECJ.  In any event, the CFI held that even if ‘gateway’ had an independent distinctive role, Gateway Inc. had not proved a likelihood of confusion.  The assessment of the similarities of the signs at issue led the CFI to conclude that the signs differed.  The CFI was entitled to find that it was not necessary to make apparent the degree of renown of the earlier marks which it took into consideration.  As the relative marks were not similar or identical there was no likelihood of confusion.


Given the lack of similarity/identity between the marks, the ECJ upheld the CFI’s rejection of the opposition under Article 8(5).  Gateway Inc.’s other pleas were rejected as inadmissible because they challenged the CFI’s finding of fact rather than law.

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Ref no.  

ECJ
C-16/06
Les Éditions Albert René Sàrl v OHIM; Orange A/S
(18.12.08)

Application (and where applicable, earlier mark)  

MOBILIX
- various telecommunications related goods and services in Classes 9, 16, 35, 37, 38 and 42


OBELIX
- various goods and services in Classes 9, 16, 28, 35, 41 and 42

Comment  

The ECJ dismissed all six of Les Éditions Albert René Sàrl’s (“LEAR”) grounds of appeal. Five of the grounds were procedural; the sixth ground alleged infringement of Article 8(1)(b). The ECJ upheld the CFI’s decision that there was no likelihood of confusion between the marks.


The ECJ dismissed LEAR’s submission that the CFI had erred by not carrying out the comparison of the goods/services on the assumption that the marks were identical and the earlier mark was highly distinctive or had a reputation. The CFI had correctly considered the relevant factors (nature, intended purpose and method of use of the goods/services and whether they are in competition with each other or are complementary) when comparing the similarity of the goods/services. Furthermore, the CFI’s finding that the sectors covered by Class 9 of the earlier mark were photography, cinema, optics, teaching and video games, whereas those covered by Classes 9 and 16 of the application were telecommunications based, did not appear inaccurate.


The CFI was entitled to find that conceptual differences between the two marks could counteract visual and aural similarities. Therefore the ECJ dismissed LEAR’s submission that the CFI had misapplied the “counteraction” theory.

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Ref no.  

CFI
T-315/06
Ercros, SA. v OHIM; Degussa GmbH
(19.11.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  


 - chemicals; artificial resins; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving food; tanning substances (1)


Series of Spanish word (including stylised word) marks, all containing the element ‘cros’


- various chemicals and manure (1)

Comment  

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


Visually, the mark applied for was not similar to the earlier marks.  The figurative element and the representation of the words in the mark applied for prevented the element ‘cros’ from dominating that mark.


The marks were neither phonetically nor conceptually similar; they only had the last syllable of the mark applied for in common and were made up of words with no particular meaning.  Accordingly, the BoA was correct in finding that there was no likelihood of confusion between the marks.


Moreover, the BoA had not erred in finding that the specialist Spanish public would not consider that the mark applied for could form part of a series of marks containing the element ‘cros’.  A likelihood of association between the element ‘cros’ and the products in question was also excluded so that there was no risk that new marks containing this element combined with another element would be perceived as a variant of the earlier marks.

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Ref no.  

CFI
T-147/06
En Route International Ltd v OHIM
(26.11.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  

FRESHHH
- meat, fish, poultry and game; preserved, dried and cooked fruits and vegetables; jams; preserved meat, fish, fruits and vegetables; milk products (29)
- bread related products including meat, fish and cheese sandwiches (30)
- various non-alcoholic drinks including fruit and vegetable juices, milk-based drinks (32)

Comment  

The CFI upheld the BoA’s decision that the mark was descriptive under Article 7(1)(c).


Visually the mark applied for did not create a sufficiently different effect compared to ‘fresh’;  the addition of the two ‘h’ letters did not affect the structure of the word ‘fresh’ Despite the possibility that the triple final letter ‘h’ could prolong the pronunciation of the word ‘fresh’, this effect would only be marginal. It would not affect the sounds produced, their order or their syllable distribution.  Accordingly, the mark applied for would be perceived by the average Anglophone consumer to be, visually and phonetically, a variant of the word ‘fresh’ and not a distinctive sign.  As ‘fresh’ could be used to identify a characteristic of the relevant products, the mark applied for was descriptive.


It was not necessary that the mark had actually been in use at the time of the application for registration in a way that was descriptive of the goods.  It was sufficient that the mark could be used for such purposes.

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Ref no.  

CFI
T-325/07
Caisse Fédérale du Crédit Mutuel Centre-Est Europe v OHIM
(26.11.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  

SURFCARD
- memory or microprocessor cards, magnetic cards, magnetic or microprocessor identification cards, magnetic or microprocessor credit or debit payment cards, magnetic data storage, optical data storage (9)
- credit card services, debit card services (36)
- various electronic transmission services (38)

Comment  

The CFI partially upheld the BoA’s decision, concluding that the mark was descriptive under Article 7(1)(c) for the goods and services applied for other than ‘magnetic and optical data storage’ in Class 9 and the services in Class 36.


The average Anglophone consumer would (i) understand that the term ‘surf’ forms part of basic English internet vocabulary; and (ii) associate ‘card’ with computing and the internet and, in particular, with cards such as network cards.


Save for ‘magnetic and optical data storage’, the mark applied for designated the type, quality and function of the remaining Class 9 products as these cards permitted data to be recorded and transmitted over a network such as the internet.  Magnetic or optical data storage were not sufficiently linked to internet activities; these could also be used to record and save data already downloaded from the internet.


The mark was not descriptive in relation to the large diversity of services encompassed by Class 36 which were clearly distinguishable from the cards used to perform these services.


The BoA was correct in finding that the mark applied for was descriptive of the services in Class 38 insofar as it described electronic transmission services which required the use of a card to access communication networks.  The mark was therefore not descriptive when such services were provided independently of a network card.

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Ref no.  

CFI
T-212/07
Harman International Industries, Inc. v OHIM; Barbara Becker
02.12.08)

Application (and where applicable, earlier mark)  

BARBARA BECKER
- various scientific, nautical, surveying, electric, photographic, cinematographic and optical goods  (9)


BECKER
- various electric and electronic apparatus and instruments (9)

Comment  

The CFI allowed the appeal against the BoA’s decision and held that there was a likelihood of confusion between the marks under Article 8(1)(b).


The CFI agreed with the BoA’s finding that the overall impression produced by the marks was one of a certain similarity visually and phonetically on account of their common component ‘Becker’.  However, the CFI disagreed with the BoA’s conclusion that the marks were conceptually distinct.  BECKER would be perceived as a surname whereas BARBARA BECKER as a person’s name consisting of a first name and surname.  As consumers generally attribute greater distinctiveness to the surname than to the forename, ‘Becker’ is likely to have attributed to it a stronger distinctive character than ‘Barbara’ in the mark applied for.  The celebrity status of the name Barbara Becker (being Boris Becker’s wife) in Germany did not mean that the marks were not similar.


The identical or similar nature of the goods covered by the marks at issue not being contested, the CFI held that a likelihood of confusion between the marks existed, even for a public with a relatively high level of attention.

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Ref no.  

CFI
T-67/07
Ford Motor Co. v OHIM
(02.12.08)

Application (and where applicable, earlier mark)  

FUN
- land motor vehicles and parts and fittings thereof (12)

Comment  

The CFI allowed the appeal against the BoA’s decision that the mark was descriptive under Article 7(1)(c) and lacked distinctive character under Article 7(1)(b).


In relation to Article 7(1)(c), the CFI held that the sign FUN did not go beyond suggestion.  Unlike some indications that are descriptive of the characteristics of a vehicle, such as ‘turbo’, ‘ABS’ or ‘4x4’, the sign FUN may only be understood as indicating that they can be amusing or that they can be a source of amusement.  The link between the word ‘fun’ and the relevant goods was too vague, uncertain and subjective to confer a descriptive character.


Given the CFI’s conclusion in relation to Article 7(1)(b), the CFI overturned the BoA’s inference that the mark lacked distinctive character because it was descriptive.

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Ref no.  

CFI
T-136/07
Colgate-Palmolive Co. v OHIM; CMS Hasche Sigle
(09.12.08)

Application (and where applicable, earlier mark)  

VISIBLE WHITE
- toothpaste and mouthwash (3)

Comment  

The CFI dismissed the appeal, upholding the BoA’s decision that the mark was descriptive under Article 7(1)(c).


The words ‘visible’ and ‘white’ were both commonplace and allowed the public to detect immediately and without further reflection the description of a fundamental characteristic of the goods concerned, namely that their use makes the white colour of teeth visible.


Considering the mark as a whole, the CFI held that the association of the two words was not unusual in structure. On the contrary, it made up a familiar expression in English for designating the goods concerned.

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Ref no.  

CFI
T-365/06
Compagnie des bateaux mouches SA v OHIM; Jean-Noël Castanet
(10.12.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  

BATEAUX MOUCHES
- transport by tourist boats and pleasure craft (39)
- entertainment (41)
- hotel and catering services on land or on board tourist boats and pleasure craft (42)

Comment  

The CFI upheld the BoA’s decision that the mark should be declared invalid under Article 7(1)(b).


The relevant public (an average French tourist) would understand the sign to generally refer to transport services offered by tourist boats and pleasure craft as well as entertainment and hotel and catering services on board such types of boats and on this basis dismissed the Appellant’s first plea that the mark had distinctive character.


The CFI dismissed the second plea that the mark had acquired distinctiveness, despite the fact that the Appellant submitted that BATEAUX MOUCHES had been used as a sign since the 1950s and had various evidence in support of its claim such as newspaper articles in which the mark often appeared together with ®; copies of cease and desist letters and undertakings to third parties to cease using the mark generically; and evidence of a surveillance procedure put in place (to prevent unauthorised use of the mark).


The CFI held that these initiatives were not sufficient to show that the mark had acquired a distinctive character as there was no evidence that the relevant public perceived BATEAUX MOUCHES as a trade mark.

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Ref no.  

CFI
T-228/06
Giorgio Beverly Hills, Inc v OHIM; WHG Westdeutsche Handelsgesellschaft mbH
(10.12.08)

Application (and where applicable, earlier mark)  

GIORGIO BEVERLY HILLS
- clothing, footwear, headgear (25)


GIORGIO
- clothing (with the exception of hosiery) (25)


(German national registration)

Comment  

The CFI allowed the appeal, finding that there was no likelihood of confusion under Article 8(1)(b).


The CFI held that, contrary to OHIM’s submissions, the words ‘Beverly Hills’ did not have a weak distinctive character.  The marks were not visually similar as the length of the mark applied for was three times that of the earlier mark.  The CFI also held that the marks were phonetically and conceptually dissimilar; the mark applied for consisted of 6 syllables and was a name of a geographical place that the public was familiar with which was not descriptive of the goods.


The CFI noted that it is common in the clothing sector to use signs consisting of (particularly Italian) forenames and surnames. Very common forenames and surnames are used more frequently for clothing than unusual forenames and surnames.  Accordingly, and in the absence of enhanced distinctiveness, the consumer would not infer from the use of the forename ‘Giorgio’ the existence of an economic link between all the proprietors of marks containing that forename.

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Ref no.  

CFI
T- 275/07
Ebro Puleva, SA v OHIM; Luis Berengel, SL
(10.12.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  

BRILLO’S
- various meats, fruits and vegetables; jellies, jams, fruit sauces; and milk products; edible oils and fats (29)
- various dry foods and condiments (30)
- various agricultural, horticultural and forestry products (31



- rice (30)
- various meats, fruits and vegetables; jellies, jams, fruit sauces; and milk products; edible oils and fats (29)


(Spanish national registrations)

Comment  

The CFI upheld the decision of the BoA that there was no likelihood of confusion within the meaning of Article 8(1)(b) and therefore rejected the opposition.


The CFI considered that the BoA was not incorrect to take the view that the overall visual impressions created by the marks at issue were different. The BoA had not erred in finding that in respect of day to day products which are displayed on supermarkets shelves and picked up by consumers the visual assessment prevails over any phonetic or conceptual similarity.


In this case, the CFI confirmed that on a global appreciation there was no likelihood of confusion between the mark applied for and the earlier marks.

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Ref no.  

CFI
T-290/07
MIP Metro Group Intellectual Property GmbH & Co. KG v OHIM; Metronia SA
(10.12.08)

Application (and where applicable, earlier mark)  


- various goods and services in classes 9, 20, 28 and 41



- various goods and services in classes 9, 20, 28 and 41


(German national registration)

Comment  

The CFI annulled the decision of the BoA, which had found no likelihood of confusion under Article 8(1)(b), concluding that there was a certain aural similarity between the marks.


The CFI concluded that the figurative elements of the mark applied for were not negligible and the ‘metronia’ element was not the dominant component of that mark.  The CFI agreed with the BoA that there was no visual similarity between the marks because of (i) a globe replacing the ‘O’ of ‘metronia’; (ii) the colour scheme; and (iii) the addition of the suffix ‘nia’ in the mark applied for.  It also found no conceptual similarity between the marks as the word ‘metronia’ brought to mind a fictitious place such as Metropolis.  It did, however, conclude that there was a certain aural similarity between the marks as the component ‘nia’ was not sufficient to offset the identical nature of the first two syllables.


It is conceivable that aural similarity alone could create a likelihood of confusion.  Therefore, the CFI concluded that the BoA was wrong to find that there was a complete lack of similarity between the signs and not go on to analyse the likelihood of confusion.

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Ref no.  

CFI
T-295/07 and T- 412/06
Vitro Corporativo SA de CV  v OHIM; VKR Holding A/S
(10.12.08)
(Decisions not yet in English)

Application (and where applicable, earlier mark)  


- glass for use in buildings (glass   blocks), glass for windows, safety glass, insulating glass (19);


VITRAL
- building materials (not of metal), glass roofs, glass for building purposes, door and window frames (not of metal) (19)

Comment  

The CFI dismissed the appeals, upholding the BoA’s decision that there was a likelihood of confusion under Article 8(1)(b) in respect of the goods in Class 19.


The CFI confirmed that the BoA had not erred in holding that the marks applied for were similar to the earlier mark. Visually, the marks shared the first four letters but the stylised ’V’ of the logo mark was not sufficiently important to override the visual similarity between the marks. Phonetically, the marks were also very similar.


Conceptually, even if as alleged by Vitro Corporativo, the term ‘vitral’ has a meaning in the Latin based languages of the Community, the BoA was correct in finding that there existed a risk of confusion in at least those countries in which the languages spoken are not Latin based.


Finally, the CFI also confirmed that BoA was correct in finding that the relevant public was formed not just by professionals but also by the public at large who may purchase those building goods.

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Ref no.  

CFI
T-462/05
JTEKT Corp. v OHIM
(10.12.08)

Application (and where applicable, earlier mark)  

IFS
- steering and power steering, both for vehicles and parts therefore, excluding independent front suspension (12)

Comment  

The CFI allowed the appeal, overturning the BoA’s decision to reject the mark as being descriptive of the goods concerned under Article 7(1)(c).


The relevant public in this case was made up of consumers interested in the purchase of steering and power steering for vehicles, and not the purchase of vehicles as such. They would also have a sound knowledge of technical aspects of the manufacture and repair of vehicles.


The initials ‘IFS’ are an acronym for ‘Independent Front Suspension’. OHIM submitted that the relevant public would perceive the sign as describing one of the essential characteristics of the goods in question, namely the existence of an independent front suspension system in a steering system, or a steering system that is intended to be fitted to a vehicle which already has independent front suspension.


The CFI rejected this and held that on the evidence supplied there would be no technical link in the mind of the relevant consumer between the goods in question (which excluded independent front suspension) and the mark applied for. The question of whether the mark would in fact be misleading under Article 7(1)(g) was not in issue before the BoA or the CFI.

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Ref no.  

 CFI
T-90/06
Tomorrow Focus AG v OHIM; Information Builders (Netherlands) BV
(11.12.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  

TOMORROW FOCUS
Inter alia,
- computers and data processing devices, various computer software for multimedia data (9)
- creation and design of computer programs; maintenance and realisation of programs for the data processing and services of on-line updates (42)



- various computer and analytical products (9)
- computer services, computer programming and computer consultancy (42)

Comment  

The CFI dismissed the appeal finding that there was a likelihood of confusion under Article 8(1)(b).


The CFI held that the verbal element ‘focus’ dominated the overall impression of the earlier mark.  The BoA was correct to find that the term ‘tomorrow’ in the mark applied for had a laudatory connection with the goods and services in question.  However, the BoA was wrong in finding that the word ‘tomorrow’ was less distinctive than ‘focus’, as the latter element was also not especially distinctive of the goods/services in question.  Due to the presence and location of the word ‘tomorrow’ in the mark applied for, the CFI concluded that there was only a small degree of similarity between the marks visually and phonetically.  With regard to conceptual similarity, the CFI considered there to be some similarity as the marks gave rise to the idea of intellectual concentration, though one with an allusion to the future.


Tomorrow Focus AG’s submission that the “maintenance and realisation of programs for the data processing and services of on-line updates” were different from computer services covered by the earlier mark was rejected.  The services of the mark applied for were encompassed by a broader category of the earlier mark.  The identity of the goods and services was sufficient to offset the low degree of similarity between the two marks.

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Ref no.  

CFI
T-357/07
Focus Magazin Verlag GmbH v OHIM; Editorial Planeta, SA
(
16.12.08)

Application (and where applicable, earlier mark)  

FOCUS Radio
- various goods and services in Classes 9, 16, 35, 38, 41 and 42


FOCUS MILENIUM
- various goods and services in Classes 9, 16 and 41.


(Spanish national registration)

Comment  

The CFI dismissed the appeal and held that the BoA was entitled to conclude that there was a likelihood of confusion between the marks under Article 8(1)(b).


The CFI dismissed Focus Magazin Verlag’s submission that the word ‘milenium’ of the earlier mark was more distinctive than the word ‘focus’. The word ‘focus’ had no link with the relevant goods and services and had an average degree of inherent distinctiveness. The misspelling of the word ‘milenium’ did not mean that the relevant (Spanish) public would perceive the mark as a fanciful term, but rather as the Spanish spelling of ‘millennium’, which may be considered allusive to certain characteristics of a product/service (such as timelessness and durability). The word ‘focus’, being placed at the beginning of the mark, was more likely to have a greater impact than the rest of the sign. Similarly, the word ‘focus’ in the mark applied for was likely to have a greater impact than the word ‘radio’. The shared word ’focus’ at the beginning of each mark created a degree of visual and aural similarity. Neither mark had a clear conceptual meaning.


The goods and services at issue in the appeal were identical and therefore the BoA was entitled to find a likelihood of confusion between the two marks.

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Ref no.  

CFI
T-351/07
Somm Srl, v OHIM
(17.12.08)
(Decision not yet in English)

Application (and where applicable, earlier mark)  


- metallic roof coverings, metallic awnings (6)
- non-metallic roof coverings, non metallic awnings (19)

Comment  

The CFI dismissed the appeal, upholding the BoA’s decision to reject the three-dimensional mark as being devoid of distinctive character under Article 7(1)(b) and as not having acquired distinctiveness through use under Article 7(3).


As the shape of the mark applied for was not significantly different from the usual shape of the products associated with the mark, it could not identify the origin of such products.


The evidence of the Applicant’s web page was insufficient to establish that the mark applied for had acquired distinctiveness through use as it did not allow the relevant factors to be established (e.g. market share, extent and location of use etc) and it lacked any indication of date which would determine when any distinctiveness might have been acquired.

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Relevant territories for assessment of whether a sign in English has acquired distinctive character through use


New Look Ltd v OHIM (CFI (Eighth Chamber); T-435/07; 26.11.08)


New Look Ltd (the “Applicant”) applied to register the mark NEW LOOK as a CTM for goods and services falling within Classes 3, 9, 14, 16, 18, 25, 26 and 35 (including cosmetics, sunglasses, jewellery, articles of clothing, stationary, articles made of leather, including bags and footwear, and wigs).  The examiner refused the mark under Articles 7(1)(b) and (c). The BoA dismissed the Applicant’s appeal, holding that the sign was devoid of distinctive character under Article 7(1)(b) and the Applicant had failed to show that the mark had acquired distinctive character under Article 7(3).  The CFI dismissed the appeal.


The BoA had not infringed Article 7(3) by requiring the Applicant to demonstrate that the mark had acquired distinctive character in Member States other than the UK and Ireland.  The case law does not preclude the public of territories other than the UK and Ireland from being concerned by a sign in English.  In ColArt/Americas (T-164/06) the mark in issue (BASICS) concerned ‘above all’ the public of the UK and Ireland, which implied that the sign may also be understood in other territories.


The CFI dismissed the Applicant’s submission that such an approach requires an applicant of a CTM to guess at the level of understanding of English with regard to a specific mark throughout the Community, entailing an extremely complex assessment for which there is no reliable data.   In this instance it was not complex.  The goods and services referred to were targeted at the general public.  The word sign applied for was a banal expression forming part of everyday English and did not present any linguistic difficulty.  That expression would be understood to mean ‘new appearance’ by native English speakers and those with a basic knowledge of English, as such a level of knowledge was sufficient to understand the sign applied for.


In the present case, at the very least, a basic understanding of English on the part of the general public, in the Scandinavian countries, the Netherlands and Finland must be regarded as a well known fact.  Therefore, the BoA was entitled to find that the target public in those countries would understand the sign applied for and would not see it as a badge of a particular trade origin for the goods and services at issue, but as an advertisement with the sole aim of making a claim about the product or the change which that product could confer on a person’s appearance.  Accordingly, the BoA did not err in finding the sign devoid of any inherent distinctive character in those countries.


By contrast, the BoA’s description that the target public included ‘all places where fashion is an important commercial activity’ was so vague that it was not possible to define a specific territory and target public.  It cannot be regarded as a well-known fact that the general public in the fashion centres of the Community have such a good command of English that it may be assumed that they would understand the expression ‘new look’.


The Applicant, having adduced no evidence of use of the sign in the Scandinavian countries, the Netherlands and Finland, had not proved that the sign had acquired distinctive character through use throughout the territory, or throughout the whole linguistic area.








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Genuine use on promotional goods


Silberquelle GmbH v Maselli-Strickmode GmbH (AG Ruiz-Jarabo Colomer for the ECJ; C-495/07; 18.11.08) (Decision not yet in English)


Maselli was the owner of the trade mark WELLNESS, registered in Classes 25 (clothing) and 32 (non-alcoholic drinks).  Maselli gave free bottles of a non-alcoholic drink labelled “Wellness-Drink” to buyers of its clothes. Silberquelle applied to revoke the Class 32 registration for non-use.


The Austrian Court noted that “genuine use” had to be use aimed at establishing or securing a market share of the goods.  It asked the ECJ for a preliminary ruling as to whether use on free promotional goods could constitute “genuine use” for the purposes of Articles 10(1) and 12(1) of Directive 89/104.


In accordance with the ECJ’s decision in Ansul (C-40/01), a trade mark must be used to maintain or create a market for an undertaking’s products; the essential function of a trade mark is to allow consumers to distinguish without confusion between goods and services of different undertakings for this purpose.   The crucial moment arises when a customer selects the product. If there is no conscious decision to choose between different goods there is no ‘use’ of the trade mark distinguishing the goods of the undertaking owning the trade mark from its competitors.  


A trade mark could be genuinely used when applied to promotional goods. However, Maselli had given away drinks labelled with the mark after customers had concluded the purchase of an item of clothing. The AG concluded that this meant that use of the mark on the beverage was totally disconnected from the market for soft drinks. 


The use of the mark on the beverage may have increased customer loyalty to Maselli in the clothing sector but this would not affect the market share of the mark in the drinks sector.  Therefore, the AG concluded that no genuine use had been established for the Class 32 registration.



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Relevant date for proof of use for an international registration


Deepak Rajani v OHIM; Artoz-Papier AG (CFI (Eighth Chamber); T-100/06; 26.11.08)


Deepak Rajani (“Rajani”) applied to register the mark ATOZ as a CTM in respect of various services in Classes 35 and 41. The application was published on 29 October 2001. On 28 January 2002, Artoz-Papier AG opposed the application on the grounds that there was a likelihood of confusion under Article 8(1)(b) with its earlier word mark ARTOZ protected in Germany, Spain, France, Italy, Austria, Portugal and the Benelux by the international registration, filed and registered with WIPO on 29 March 1996 for various services in Classes 35 and 41. Rajani requested proof of use of the international registration under Article 43. Artoz-Papier did not adduce any proof, but stated that the international registration had been admitted to protection in Germany on 11 February 1999.


The Opposition Division allowed the opposition under Article 8(1)(b). The BoA dismissed the appeal on the grounds that, in Germany, the international registration was not subject to a use requirement; that the services covered were identical; that the signs were similar; and that there was a likelihood of confusion on the part of German consumers.  The BoA also noted that, from a teleological interpretation of Article 43(2) read in conjunction with Article 10 Directive 89/104, the date on which the five-year period began to run for proof of use was the date of the actual completion of the registration procedure. Rajani appealed to the CFI, which dismissed the appeal.


The CFI rejected Rajani’s request for proof of use of the international trade mark, concluding that the BoA was correct to hold that the starting point for the five-year time-limit was the 11 February 1999 and that the time-limit had not expired at the date of the publication of the application of the trade mark sought (i.e., 29 October 2001).


As neither Regulation No 40/94 nor the Madrid Agreement specifies the date on which the five-year time-limit begins to run in the case of an international registration having effect in a Member State, it must be a matter for the national law of the Member State concerned.  It is clear from Häupl (C-246/05) that Directive 89/104 does not harmonise the procedural aspect of trade mark registration and it is therefore for the Member State for which the registration application has been filed to determine the time at which the registration procedure comes to an end.


Referring to German trade mark law (following the BoA basing the contested decision on an earlier international registration having effect in Germany), the CFI concluded that, in principle, registrations are regarded as having taken place in Germany on the same day as the international registration except if protection is refused. In this instance the German Patent and Trade Mark Office originally partially refused protection in Germany on 3 April 1997.  Under German law, if protection for an internationally registered trade mark is provisionally refused but subsequently granted, the registration is regarded as having taken place on the date of receipt by WIPO of the final notification that protection has been granted.  Thus that date must be regarded as marking the start of the 5-year-time-limit.  In this case, that date was 11 February 1999.


The CFI also rejected Rajani’s plea under Article 8(1)(b), holding that there was a likelihood of confusion since (i) the services in question were identical; and (ii) the marks were visually and phonetically highly similar and they could not be distinguished conceptually as neither mark conveyed a particular concept or meaning.



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Conflicting OHIM decisions and genuine use


Dada SpA v OHIM; Dada Srl (CFI (Seventh Chamber); T-101/07; 10 December 2008; Decision not yet in English)


Dada SpA (the “Applicant”) applied to register the mark reproduced below as a CTM for computer programming; creation of multimedia systems; hosting and creation and provision of electronic catalogues which allow users to see and purchase products via Internet sites in Class 42 (the “Application”):



Dada Srl (the “Intervener”) opposed the Application on the grounds that there was a likelihood of confusion under Article 8(1)(b) with its earlier Italian national registration for DADA for business management; business administration; office functions, real-estate affairs, telecommunications, education, training, legal services and computer design processes in Classes 35, 37, 38 and 42.


The Opposition Division and the BoA allowed the opposition and the CFI dismissed the Applicant’s appeal that the opposition should be dismissed on the grounds that (1) the decision by the Opposition Division (which was upheld by the BoA) contradicted another decision by the Opposition Division; (2) insufficient evidence of use of the earlier mark had been provided; and (3) there was no risk of likelihood of confusion between the marks.


(1) The decision by the BoA contradicted a decision by the Opposition Division


When making the Application, the Applicant had also applied for DADA (word mark) as a CTM. This mark had also been opposed by the Intervener on the basis of a risk of confusion, with a reference to the earlier national mark. In both proceedings, the Intervener had presented the same evidence of use of the earlier mark. However, whereas the Opposition Division in the present case had concluded that sufficient use of the earlier mark in relation to computer related services had been established, the Opposition Division had dismissed the opposition of the word mark applied for on the basis that the Intervener had not been able to establish sufficient use of the mark. This decision was never appealed and as a result became final. Subsequently, the word mark DADA was allowed to proceed to registration, whereas the Opposition Division (and later the BoA) held that the Application should be rejected and the opposition allowed.


On the basis of the above, the Applicant submitted that the inconsistent decisions by the Opposition Division had been made in breach of Article 3(1)(g) of the EC Treaty (which sets out that the activities of the Community shall include a system ensuring that competition in the internal market is not distorted) and the sixth recital of the Community Trade Mark Regulation (“CTMR”), whose objective is to avoid contradictory judgments involving the same acts and the same parties and which are brought on the basis of a CTM and parallel national trade marks.


The CFI noted that the above argument had not been raised before the Opposition Division during the administrative procedure and as a result, the CFI held that it was not in a position to consider whether the Opposition Division had committed such a breach.  Further, the CFI held that the Applicant’s submission was, in any event, unfounded as the Opposition Division (and the BoA) are not bound by other decisions but should base their decisions solely on the basis of the CTMR.


(2) Genuine use of an earlier mark under Article 43(2) and 43(3)


In support of its alleged use of the earlier mark in relation to computer related services, the Intervener submitted five invoices before the BoA (of which one had been rejected by the BoA on the ground that it did not relate to the provision of computer related services). The four remaining invoices totalled 31,075,000 Italian Lira (approximate current value of which is just over £15,000). 


The CFI noted that the field of computer related services is a sector under continual development, characterised by an increasing level of competition, which makes it difficult to acquire and maintain significant market shares. In addition, most players operating in this field, like the Intervener, are small and medium sized companies operating within a limited territory and with limited capacity, especially with regards to the supply of services of a long-term nature. Further, the CFI noted that computer related services did not constitute the Intervener’s core services but that the invoices supplied to the BoA demonstrated an important diversification of its services.  


Bearing in mind the particular characteristics of the relevant sector, the CFI held that the evidence supplied by the Intervener sufficed to establish that genuine use had been made of the earlier mark in the field of computer related services. 


(3) Likelihood of confusion between the marks


The CFI rejected the Applicant’s submission that there was no likelihood of confusion, referring to the fact that the Applicant did not dispute that (1)  “computer design processes” designated for the earlier mark and “services relating to the programming of computers” were identical services; and (2) that “computer design processes”  and “services relating to the creation and provision of electronic catalogues which allow users to see and purchase products via Internet sites”  were similar services.  In addition, the CFI held that the “creation of multimedia systems” necessarily involves the application of computer design processes.


The CFI thus dismissed the appeal in its entirety.



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Appellation of origin


Budějovický Budvar, národní podnik v OHIM; Anheuser-Busch, Inc. (CFI (First Chamber); Joined Cases T-225/06, T-255/06, T-257/06 and T-309/06; 16.12.08)


Anheuser-Busch applied to register a figurative mark (reproduced below) in respect of various goods and services in Classes 16, 21, 25, and 32, including paper, household or kitchen utensils, clothing, beers and non-alcoholic drinks. Anheuser-Busch also filed three applications to register the word BUD in Classes 32 (beer), 33 (alcoholic beverages), 35 (setting up a database), 38 (telecommunications), 41 (education, entertainment) and 42 (restaurant, bar and pub services; operating a database).



Budvar opposed, relying, under Article 8(1)(b), on an international figurative mark registered for all types of light and dark beer effective in Austria, Benelux and Italy (reproduced below).



Budvar also relied, under Article 8(4), on an appellation of origin ‘bud’ which was registered under the Lisbon Agreement in respect of beer and effective in France, Italy and Portugal and protected in Austria under a bilateral convention with Czechoslovakia.


The BoA held that ‘bud’ was not an appellation of origin since consumers did not perceive it as referring to a specific geographical place in the Czech Republic. There was no evidence that the name of the city where Budvar was established (namely České Budějovice, whose German name is ‘Budweis’) was abbreviated to ‘Bud’. The evidence provided to show use of ‘bud’ in Austria, France, Italy and Portugal was insufficient. Further more, Budvar had not demonstrated that the appellation of origin gave it the right to prohibit use of the word ‘bud’ as a trade mark in Austria or France. The BoA also stated that Budvar no longer appeared to refer to the international figurative mark as the basis for its opposition, but solely to the appellation of origin ‘bud’.


Budvar appealed, alleging infringement of Article 8(4). The CFI allowed the appeal.


In relation to the Lisbon Agreement, the CFI held that the effects of a registered appellation of origin could be declared invalid only by an authority in one of the contracting countries. Although a French Court had ruled the appellation of origin ‘bud’ be invalid, Budvar had lodged an appeal and therefore the appellation had not been declared definitely invalid. Similarly, in relation to the bilateral convention, ongoing proceedings in Austria had not led to a final decision. Therefore the BoA ought to have taken into account Budvar’s earlier right without calling into question the actual classification of that right.


In relation to the requirement under Article 8(4) that the sign be used in the course of trade, the CFI held that the BoA had made an error of law in deciding to apply, by analogy, the provisions of Community law relating to the “genuine use” of an earlier trade mark. Instead, the BoA ought to have determined whether the signs had been used in the context of a commercial activity with a view to economic advantage. The evidence provided by Budvar was sufficient for this purpose. In particular, in relation to the invoices referring to products labelled ‘bud strong’ and ‘bud super strong’, the CFI held that the words ‘strong’ and ‘super strong’ were descriptive and did not change the function of the word ‘bud’.


The CFI further held that, as required by Article 8(4), the earlier rights relied on by Budvar had a significance which was not merely local inasmuch as their protection under the Lisbon Agreement and bilateral convention extended beyond their territory of origin. Lastly, the CFI held that the BoA had made an error by not taking into account all the relevant elements of fact and law in determining whether the law of the Member State concerned conferred on Budvar the right to prohibit the use of a subsequent mark.


Accordingly, the CFI upheld Budvar’s appeals and annulled the decisions of the BoA.



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Exhaustion of trade mark rights


Copad SA v Christian Dior couture SA (AG Kokott for the ECJ; C-59/08; 03.12.08) (Decision not yet in English)


This case considered the effects of a licensing agreement on the exhaustion of rights to the trade mark owner. In particular, the extent to which the trade mark owner may oppose luxury products bearing his mark being sold at discount stores when the licence agreement expressly prohibits the licensee to sell at such establishments.


Christian Dior couture SA (“Dior”) concluded a trade mark licence contract with Societe Industrielle de Lingerie (“SIL”) for the manufacture and distribution of corsetry products. The contract specified that “in order to maintain the reputation and prestige of the mark, the licensee will not sell to wholesalers, communities, discount companies, mail order, door to door sales unless by prior written consent of the grantor, and will take all possible steps to enforce this rule by its distributors or retailers”.


SIL sold products bearing the mark subject to the licence agreement to Copad International (“Copad”) which is a company specialised in discount sales. Copad resold some of these products to third parties. Dior sued SIL and Copad for infringement of its trade mark.


The Court of Appeal of Paris held that SIL had not infringed Dior’s trade mark rights by selling the products to Copad. The Court, however, held that such sales had not exhausted Dior’s trade mark rights. Therefore, Dior could continue to pursue its trade mark rights. The Court ordered an injunction against Copad for the seizure and destruction of the relevant products under Copad’s control.


Both Copad and Dior appealed the decision to the Court of Cassation which in turn sought clarification to the ECJ in respect of a number of questions.


By its first question the Court asked whether Article 8(2) of Directive 89/104 must be interpreted as meaning that the proprietor of a trade mark can invoke the rights conferred by that trade mark against a licensee who contravenes a provision in the licence which prohibits,  on grounds of the trade mark’s prestige, sale to discount stores.


The AG concluded that Article 8(2) should be interpreted as meaning that a trade mark owner can invoke the rights conferred by that mark against a licensee who has breached a clause of the licence which prohibits sales to discount stores, if that sale so damages the prestige/image[1]  of a product that it brings its quality into question.


The French court further asked whether Article 7(1) of the Directive must be interpreted as meaning that a licensee who puts goods bearing a trade mark on the market in the EEA in disregard of a provision of the licensing contract prohibiting, on grounds of the trade mark’s prestige, sale to discount stores, does so without the consent of the trade mark proprietor. If not, can the proprietor invoke such a provision to oppose further commercialisation of the goods, on the basis of Article 7(2) of that Directive?


The AG concluded that Article 7(1) should be interpreted in the sense that a licensee who commercialises products under a mark in breach of a clause of the licence agreement only acts without the consent of the owner of the trade mark if, by commercialisation such goods, it infringes at the same time the rights conferred by the mark under Article 8(2).


Article 7(2) does not permit the owner of the trade mark to oppose the commercialisation of products bearing its mark through a discount store by the mere fact that a clause in the licence prohibits sale of the products to discount stores.



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Repackaging  


The Wellcome Foundation Ltd v Paranova Pharmazeutika Handels GmbH (ECJ (Second Chamber); Case C-276/05; 22.12.2008)


Following a reference from the Austrian Supreme Court, the ECJ ruled on two questions relating to the conditions applicable to repackaging of pharmaceutical products in a parallel imports case. The decision broadly followed the earlier opinion of the Advocate General from October 2008.


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 Austrian Court required clarification as to what is decisive in evaluating the conformity of the new packaging. Does proof that repackaging is necessary – in order not to hinder effective access to the market - need to be shown in relation to just packaging itself, or also the presentation of the packaging?


As such, the Austrian Court asked firstly 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 (Question 1(a)). To the extent that this question is answered in the negative, the referring court further asked whether the presentation of the new packaging is 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 (Question 1(b)).


The referring court finally 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 (Question 2).


Question 1(a) had already been answered in the negative in Boehringer II (C-348/04), where it was held that the condition was 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 had been repackaged.


In considering the remaining questions the ECJ referred to Bristol-Myers Squibb and Others (joined cases C-427/93, C-429/93, and C‑436/93) in which the Court ruled that Article 7(2) must be interpreted as meaning that the trade mark owner may legitimately oppose the further marketing of a pharmaceutical product where the importer had repackaged the product and reaffixed the trade mark unless, amongst other things, the importer gave notice to the trade mark owner before the repackaged product was put on sale, and, on demand, supplied him with a specimen of the repackaged product.


This condition enabled the proprietor to check that the repackaging was not carried out in such a way as to directly or indirectly affect the original condition of the product. It further allowed the proprietor to check that the presentation after repackaging was not likely to damage the reputation of the trade mark. The condition that repackaging was necessary to market the product in the importing member state was directed only at the fact of repackaging the product and not at the manner or style in which it had been repackaged (Boehringer II).  Similarly, the presentation of the new packaging of the product must also not be assessed against the criterion that there should be the minimum possible adverse effect on the trade mark rights.


In conclusion, the answer to Question 1(b) must be that Article 7(2) is to be interpreted as meaning that, where it is established that repackaging of the pharmaceutical product is necessary for further marketing in the Member State of importation, the presentation of the packaging should be assessed only against the condition that it should not be such as to be liable to damage the reputation of the trade mark or that of its proprietor.


As regards Question 2, the ECJ confirmed that that it was for the parallel importer to furnish the trade mark owner with the necessary and sufficient information to enable it to determine whether the repackaging of the product under the trade mark was necessary in order to market it in the Member State of importation. The kind of information to be furnished will depend on the facts in each case. The ECJ could foresee that in exceptional cases the state of export could be required to be disclosed where the absence of that information would prevent the trade mark owner from evaluating the need to repackage.


[1] It should be noted that the French version of the decision refers to the ‘prestige’ of the product while the Spanish version uses the term ‘image’.



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COPYRIGHT


No implied term of copyright ownership


Meridian International Services Limited v Richardson and Ots* (The Chancellor of the High Court and LJs Rix and Rimer; [2008] EWCA Civ 609; 04.06.08)


The first instance decision of Mr Robert Ham QC was upheld on an appeal by Meridian claiming that it owned copyright in software developed by Mr Aldersley (the third Defendant).


Meridian was a software developer which was contracted by the Consumer Healthcare UK division (“CHUK”) of GlaxoSmithKline to develop integrated financial forecasting software known as StratX.  At the time when Meridian was instructed by CHUK in relation to StratX, Messrs Aldersley and Richardson worked for Meridian.  However, following repeated failures by Mr Bobeckyj (the CEO of and sole shareholder in Meridian) to pay them for their work, Mr Richardson resigned and Mr Aldersley followed suit.  Following their departure, Mr Richardson proposed to Mr Bobeckyj that he (Mr Richardson) and Mr Aldersley take over the work on StratX as subcontractors to Meridian.  Meridian would retain the £40,000 that it had already invoiced to CHUK for the preparation of a best practice process and Messrs Aldersley and Richardson would invoice CHUK directly for the development of the StratX software through a new company which they would establish for that purpose.  They would pay 20% of money received from CHUK in relation to StratX to Meridian as a finder’s fee.


A meeting took place between Messrs Richardson, Aldersley and Bobeckyj to discuss Mr Richardson’s proposal and the basis on which Messrs Richardson and Aldersley might complete the StratX project for CHUK.  It was the terms agreed during this meeting which were subsequently disputed, prompting Meridian to file proceedings.


Following the meeting, Mr Aldersley wrote the StratX source code which was ultimately provided to CHUK.


In the High Court, Meridian submitted that it was an implied term of its oral agreement with Messrs Richardson and Aldersley that it would own the copyright in the StratX software. Messrs Richardson and Aldersley disagreed and claimed that they had merely agreed to finish the project and pay a finder's fee to Meridian out of the proceeds that they received from CHUK. The High Court ruled in favour of the Defendants and Meridian appealed to the CoA.


The CoA held that the fact that the final agreed contract between Meridian and CHUK contained a warranty given by Meridian that it owned the software did not justify the implication of the proposed term into the oral agreement with Messrs Richardson and Aldersley.


The CoA agreed with Mr Robert Ham QC that “in the ordinary case of a two-sided contract the courts only imply a term on the grounds that it is obvious that both parties must have intended it, so obvious indeed that if an officious bystander had asked them whether there was to be such a term, both would have suppressed it testily: “Yes, of course””.  In this case, Messrs Richardson and Aldersley clearly did not intend that Meridian should own copyright in the StratX software, even if that was Meridian’s intention.  It was not necessary to imply the term sought by Meridian in order to give business efficacy to the contract and accordingly Mr Robert Ham QC had been correct in declining to do so.



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Collecting Societies – Remuneration Models


Kanal 5 Ltd and TV 4 AB v Föreningen Svenska Tonsättares Internationella Musikbyrå (STIM) upa (ECJ (Fourth Chamber); C-52/07; 11.12.08)


Private television broadcasters Kanal 5 and TV 4 brought proceedings in Sweden against the Swedish music copyright collecting society STIM in relation to STIM’s calculation of remuneration for the use of musical works which Kanal 5 and TV 4 claimed constituted an abuse of a dominant position under Article 82 of the EC Treaty.


STIM used three different methods to determine royalty rates.  Kanal 5 and TV 4’s royalty rates were set as a percentage of their advertising and subscription revenue from broadcasts determined by the proportion of airtime devoted to music.  For public broadcaster SVT, funded from public licence fees, royalties were calculated from fictitious advertising income taking into account projected estimates of airtime devoted to music.  Royalty rates for smaller broadcasters were calculated on actual airtime devoted to music and daily audience figures.


The Swedish Market Court referred four questions to the ECJ in relation to the interpretation of Article 82 as to whether a remuneration model based on the channel’s revenue from a broadcast constituted an abuse of a dominant position where a collecting society had a de facto monopoly position in a Member State.


The ECJ concluded that Article 82 should be interpreted as meaning that a copyright management organisation with a dominant position does not abuse that position where, with respect to remuneration paid for the television broadcast of musical works protected by copyright, it applies to the commercial television channels a remuneration model according to which the amount of royalties corresponds partly to the revenue of those channels, provided that that part is proportionate overall to the quantity of musical works protected by copyright actually broadcast or likely to be broadcast. The ECJ held that this would be the case unless another method existed which enabled the use of those works and the audience to be identified more precisely without resulting in a disproportionate increase in the costs incurred for the management of contracts and the supervision of the use of those works.


In response to the Swedish Court’s question as to whether it would be an abuse of a dominant position if the copyright management organisation calculated the royalties paid differently according to whether the broadcasting companies were commercial or public, the ECJ concluded that such an organisation would be likely to exploit in an abusive manner its dominant position if it applied dissimilar conditions to equivalent services and if it placed them, as a result, at a competitive disadvantage, unless such a practice may be objectively justified.



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Licensing Schemes


Phonographic Performance Limited v The British Hospitality Association and Ots* (Kitchin J; [2008] EWHC 2715 (Ch); 21.11.08)


Phonographic Performance Limited (“PPL”) and various interested parties appealed against a decision of the Copyright Tribunal (the “Tribunal”). Kitchin J held, among other, that the terms of Section 128A of the CDPA embraced licensing schemes which authorise the playing in public of both broadcast and non-broadcast sound recordings and that there was nothing in the terms of Section 128B of the CDPA which limited the Tribunal to a consideration of the terms of a licensing scheme only in so far as it related to “excepted sound recordings”.


PPL is a collective licensing body which acts on behalf of over 50,000 performers and record companies. The interested parties consisted of representative bodies from the pub, catering and retail trades, music users and background music suppliers.


A dispute arose in the context of references made to the Tribunal by the Secretary of State, under Section 128A, of various proposed new licensing schemes developed by PPL for the licensing of the public performance of “excepted sound recordings” in pubs, bars, restaurants, cafes, shops, stores, factories and offices. “Excepted sound recordings” are those sound recordings which are excepted from the free use rights afforded by Section 72 of the CDPA. The new licensing schemes were “delivery system neutral”, that is, they were not limited to the licensing of broadcast sound recordings (i.e. music played over the radio) but extended to all ways of playing background music in public, including by CD, tape or other non broadcast means. Being delivery system neutral meant that licensees did not need to take separate licences in respect of different delivery systems for the same recordings, an approach which was in principle supported by the interested parties. However, the interested parties were deeply divided over the fees which PPL was charging and claimed that the new schemes represented a very substantial departure from the established tariffs in respect of non-broadcast sound recordings.


The Tribunal held that a reference under Section 128A (by which a licensing body must notify the Secretary of State of any proposed licence or licensing scheme) was limited to a consideration of a licensing scheme in so far as it concerned the public performance of broadcast sound recordings only.


Setting aside the decision of the Tribunal, Kitchin J held that: (i) for the purposes of Section 116(1) of the CDPA, anything in the nature of a scheme which sets out the classes of case in which and the terms on which licences are to be granted is a licensing scheme; (ii) the terms of Section 128A (by which a licensing body must notify the Secretary of State of any proposed licence or licensing scheme) were cast in sufficiently general terms as to embrace delivery system neutral schemes which not only authorised the playing in public of excepted sound recordings included in broadcasts but also sound recordings delivered by other systems; (iii) on a natural reading of the sub-sections of Section 128A, any licensing scheme must be notified as a whole; (iv) once the Secretary of State has completed his considerations, he must either refer the licensing scheme to the Tribunal for a determination of whether it is reasonable or notify the licensing body that he does not intend to do so – if he decides to refer the scheme it must be referred as a whole; (v) in the terms of Section 128B (by which the Tribunal must consider whether the licensing scheme is reasonable), there was nothing to suggest that the jurisdiction of the Tribunal was limited to a consideration of the terms of the licensing scheme only in so far as it related to excepted sound recordings included in broadcasts – the Tribunal does have jurisdiction under Section 128B to consider a delivery system neutral licensing scheme as a whole and it was not necessary to consider such systems in two separate sets of proceedings with different procedures; and (vi) dividing up consideration of a licensing scheme into two parts in such a way was inconvenient, cumbersome, expensive and involved a waste of public and judicial resources.


Kitchin J also held that the Tribunal hearing took place to allow it to determine the scope of its jurisdiction under Section 128A and Section 128B. The Tribunal had not been concerned with the substantive merits of the proposed licensing schemes referred to it and he refused to order that previously established tariffs applied to users who only wished to play non-broadcast sound recordings.


Having set aside the Tribunal’s decision, the correct course was to remit the references to the Tribunal for further consideration.



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Reporter’s note: We are grateful to our colleagues at Bird & Bird LLP for their assistance with the preparation of this report: Adrian Howes, Alice Sculthorpe, Brooke Whitaker, Claire Chapman, Cristina Garrigues, Emilia Linde, Kathryn Robinson, Taliah Davis, Tim Harris and Tom Snaith.


Profiles of all of our contributors above can be found on the "our people" page of our site.


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