June 2010

01 June 2010

Katharine Stephens, Zoe Fuller, Gina Brueton

This month we report on the registration of single non-stylised letter marks in OHIM v BORCO in which a company sought to register as a figurative CTM the greek lower case letter alpha for alcoholic beverages and wines; we re-visit the issue of keywords in the case of Eis. de GmbH v BBY Vertriebsgesellschaft mbH which follows Google v Louis Vuitton and we report on the Court of Appeal's judgment in L'Oreal SA & Ots v Bellure NV & Ots, which considers the issue of trade mark infringement through use of comparison lists. We also review a passing off case concerning the 'Henry' vacuum cleaners and look at a case which considers the relationship between Community Registered Designs and trade marks.


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



Decisions of the GC (formerly CFI)


Case  

GC
T-243/08
Ravensburger AG v OHIM; Educa Borras, SA
(19.05.10)

Application (and where applicable, earlier mark)  


- games and playthings (28)
 MEMORY
- various goods including card games (28)
(International and German national marks)
 

Comment

The GC dismissed the appeal from the BoA’s decision that there was no likelihood of confusion between the marks under Arts 53(1)(a) and 8(1)(b).


The GC concurred with the BoA’s conclusion that the element ‘educa’ was the dominant element of the mark in issue.  The element ‘memory game’ was descriptive to German-speakers and the element ‘memory’ did not have an independent distinctive role in the mark.


The BoA was correct to conclude that when comparing the mark, considered as whole, with the earlier marks, there was no visual, phonetic or conceptual identity or similarity.  There was therefore no likelihood of confusion.

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Case GC
T-108/09
Ravensburger AG v OHIM; Educa Borras, SA
(19.05.10)
Application

 MEMORY
- games recorded on data carriers of all kinds (9)
- board games (28)

Comment

The GC dismissed the appeal from the BoA’s decision, finding that the mark MEMORY was descriptive under Arts 52(1)(a) and 7(1)(c).


The mark was registered for goods which included, in particular, memory games, in which the key element for success was that participants used and developed their memory.


The GC concurred with the BoA’s conclusion that the word ‘memory’ described to the average English-speaking consumer directly and specifically one of the characteristics and purposes of the games for which the mark was registered.


The mark was therefore invalid.

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Registration of single non-stylised letter marks


OHIM v BORCO-Marken-Import Matthiesen GmbH & Co. KG (“BORCO”) (AG Bot for the CJ; C-265/09; 06.05.10)


BORCO applied to register as a figurative CTM the Greek lower case letter alpha, depicted below, for alcoholic beverages (except beers) and wines in Class 33.



The OHIM examiner rejected the application for registration under Article 7(1)(b) on the basis that the sign constituted a faithful reproduction of the Greek lower case letter ‘a’, without any graphical modifications, and that Greek-speaking purchasers would not consider the sign to be an indication of the origin of the goods. 


BORCO’s appeal to the BoA was dismissed and BORCO further appealed to the GC. The GC granted BORCO’s application and held that the method used by OHIM for assessing the distinctive character of the sign did not comply with Article 7(1)(b), since OHIM had not carried out an examination of the distinctive character of the sign at issue in relation to the goods specified in the application for registration. OHIM appealed to the CJ, on the grounds, amongst others, that it was not always required when assessing the distinctive character of a sign under Article 7(1)(b) to carry out an examination of the various goods and services covered by the application for registration and that it was acceptable in making its assessment to rely on general statements concerning the perception of the consumer.


AG Bot concluded that, under Article 4, letters are included amongst the registrable signs. An assessment of their distinctive character must be carried out within the context of each specific case, taking into account the nature and particular characteristics of the goods specified in the application for registration.


The AG agreed with the GC that by holding that the general public “might” view the letter as a reference to quality, an indication of size, or a type or kind of alcoholic beverage, the BoA clearly had not carried out a proper examination. By refusing to register single letters without carrying out any examination of the distinctive character of the sign at issue, the BoA had in effect introduced an a priori exclusion from registration of a non-stylised letter and thereby infringed the terms of the Regulation.


The AG advised the CJ to dismiss the appeal.  The AG pointed out that this recommendation did not mean that a single non-stylised letter must be registered, but that in order to refuse such a registration an examination must be carried out of the distinctive character of the sign in relation to the goods specified in the application and reasons should be given for OHIM’s decision to refuse registration.


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Keyword services and trade mark infringement


Eis.de GmbH v BBY Vertriebsgesellschaft mbH (CJ (Fifth Chamber); C-91/09; 26.03.10) (Decision not yet avilable in English)


Following on from the Google v Louis Vuitton (C-266–288/08) and BergSpechte (C-278/08) cases (reported in the CIPA Journal in April 2010), the CJ made an Order on a reference from the German Federal Supreme Court on the interpretation of Article 5(1)(a) of the Directive in relation to the use of keywords.


BBT Vertriebsgesellschaft owned the German word mark BANANABAY and sold erotic items from its website www.bananabay.de.  Eis.de also sold adult entertainment products on the internet and had selected the term ‘bananabay’ as a keyword in the Google Adwords service.


As the reference was almost identical to the first question referred to the CJ in the Google case, the Court relied heavily on that case in its Order.  The CJ ordered that the proprietor of a trade mark was entitled to prohibit an advertiser from advertising identical goods or services using a keyword identical to the trade mark where the advertisement did not enable the average internet user, or only enabled that user with difficulty, to determine whether the goods or services originated from the owner of the trade mark or from a third party.


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Trade Marks and Geographical Indications for Wines


Abadía Retuerta, SA v OHIM (GC (Third Chamber); T-237/08; 11.05.10)


The GC dismissed the appeal from the decision of the BoA, finding that the word mark CUVÉE PALOMAR, which Abadía Retuerta sought to register in relation to ‘wines’ in Class 33 (the “Mark”), was not registrable under Article 7(1)(j).


The BoA had found that there was a large degree of similarity between the local administrative name el Palomar, protected by the Spanish registered designation of origin ‘Valencia’, and the word PALOMAR in the Mark.  The Mark could not be registered as it was not being sought to designate wines from that area of origin. 


In reaching its decision, the GC rejected Abadía Retuerta’s submission that the geographical indication was not enforceable because the list published in the Official Journal did not contain el Palomar. The provisions of Spanish law relating to the registered designation of origin ‘Valencia’, which designated el Palomar as a geographical indication for a quality wine, were, however, referred to in the Official Journal, and the GC found that this was sufficient for enforceability of the geographical indication. 


The GC held that the only condition for the application of the absolute ground of refusal under Article 7(1)(j) was that the mark contained or consisted of a geographical indication identifying a wine where the wine in question did not in fact have that origin.  This condition was satisfied.  The wines of Abadía Retuerta did not originate from the el Palomar region.  It was irrelevant that part of Abadía Retuerta’s estate had the name Palomar.  It was not necessary to consider whether the Mark would deceive the public or lead to a likelihood of confusion regarding the origin of the product.  The fact that the Mark did not contain the article ‘el’ did not change the Court’s conclusion because the name el Palomar did not have its own autonomous meaning which would distinguish it from the name Palomar.  Furthermore, it was not relevant to consider whether the name Palomar was known or could have meanings which moderated its graphically indicative nature.


Although the provisions of the TRIPS Agreement did not have direct effect, the GC held that Article 7(1)(j) had to be interpreted in the light of the wording and purpose of that Agreement. Abadía Retuerta sought to rely on Article 24(5) of TRIPS, which precluded measures that prejudice the validity of trade marks applied for or used in good faith before the relevant geographical indication was protected.  The GC rejected this submission since Abadía Retuerta was not able to demonstrate that the Mark had been applied for or used in good faith prior to the registration of el Palomar as a geographical indication.


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Trade Mark Infringement through Use of Comparison Lists


L’Oréal SA & Ots v Bellure NV & Ots* (Jacob, Wall & Rimer LJJ; [2010] EWCA Civ 535; 21.05.10)


Following the CJ’s decision in Case C-487/07 (L’Oréal & Ots v Bellure & Ots, reported in the CIPA Journal, July 2009), the Court of Appeal (Jacob LJ giving the lead judgment) held that Bellure’s use of comparison lists to promote its range of imitation perfumes constituted infringement of L’Oréal’s registered trade marks under Article 5(1)(a), the conditions in Article 3a(1) of the Comparative Advertising Directive (Directive 87/55/EC (“CAD”)) not being satisfied and Bellure’s conduct therefore falling short of the “honest and commercial practices” required by Article 6(1)(b).  The Court of Appeal considered obiter that Bellure had also infringed L’Oréal’s marks under Article 5(2).  Jacob LJ commented on numerous occasions throughout the judgment that he disagreed with the finding; his strong predilection, absent the ECJ’s decision, would be to hold that trade mark law did not prevent traders from making honest statements about their products where those products are themselves lawful.


Article 5(1)(a)


The CJ’s judgment pointed out that defendants will only escape Article 5(1)(a) if their use is “for purely descriptive purposes”.  However, whilst the CJ indicated that the use by Bellure went beyond purely descriptive use and therefore fell within Article 5(1)(a) it appeared to ask the Court of Appeal to assess whether the use infringed one of the functions of the mark i.e. the function of communication, investment or advertising.  Further, as Jacob LJ pointed out, the CJ indicated that the use in this instance went beyond purely descriptive use because it was use for advertising.  He himself could not see the difference between a statement such as “I can supply a diamond cut in the same shape as Spirit Sun” (see Case C-2/00 Hölterhoff) which was not apparently advertising even though the use of the mark Spirit Sun was being used to gain a sale and an out-and-out general purpose advertising aid such as a comparison list.  Nevertheless, Bellure’s use fell the wrong side of the line because the CJ said so. 


Article 6(1)(b)


The Court of Appeal then went on to consider whether Bellure’s use might nonetheless be protected under the CAD by complying with the conditions specified in Article 3a(1).  In rejecting Bellure’s argument that Article 3(1)(h) of the CAD was confined to counterfeits, the CJ had stated that the provision encompassed both advertisements which explicitly evoked the idea that the product being marketed was an imitation or replica of a product bearing a well-known trade mark, as well as those which implicitly communicated such an idea to the public, taking into account the advertisement’s overall presentation and economic context.  The CJ further held that it was immaterial whether the imitation was of the whole product or of just an essential characteristic of that product such as its smell.  Jacob LJ could see no rational basis for such a rule, but nonetheless was bound by the CJ’s decision and must hold that Bellure’s truthful statement that its product had the same smell as L’Oréal’s products amounted to saying that Bellure’s product was an imitation or replica of L’Oréal’s product.  Further, the CJ had conflated Article 3a(1)(h) and (g) stating that the advantage gained by unlawful comparative advertising within Article 3a(1)(h) must be an advantage taken unfairly of the reputation of the mark within Article 3a(1)(g).  Therefore, Bellure was not protected under Article 3a(1) and consequently its use did not fall within the defence provided by Article 6(1)(b) of the Directive.  


Article 5(2)


Although it was not necessary for the Court of Appeal to rule on infringement under Article 5(2), it nevertheless considered that the CJ’s decision on the meaning of “taking unfair advantage” in the context of Article 5(2) had essentially rendered the word “unfair” obsolete.  As such, the comparison lists were free-riding of the sort condemned by the CJ and there would have been infringement. 


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Decision of the Appointed Person (Q1 and Q2, 2010)


Coca-Cola Company’s Trade Mark, NO HALF MEASURES (Prof Ruth Annand sitting as an Appointed Person; O-079-10; 28.02.10)


Coca-Cola applied to register NO HALF MEASURES in Class 41 for education; providing of training; entertainment including musical entertainment; sporting and cultural activities.  The Hearing Officer, Mr A.J. Pike, refused the application under Section 3(1)(b).  Professor Ruth Annand allowed the appeal.


Since the Hearing Officer’s decision, the CJ had decided Audi (Case C-398/08, reported in the CIPA Journal, February 2010) and had confirmed that it did not matter that (i) the public might perceive a mark (even primarily) as a promotional formula as long as the mark was capable of guaranteeing origin; or (ii) a mark could in principle be used by other undertakings because of its laudatory nature. Audi also confirmed that the fact that a mark could have a number of meanings or would be perceived as imaginative, surprising and unexpected was likely to endow it with distinctive character.


Accordingly, the Hearing Officer was wrong to find that the public would perceive the mark as a non-distinctive promotional statement with no trade mark message. In assessing distinctiveness, the Hearing Officer had been wrong to hold relevant the fact that the message conveyed by the mark (that the services it covered would be as good as the service provider could achieve) was a message that other service providers would wish to convey and wrong to hold irrelevant the fact that the mark could convey a number of meanings.


On her own assessment of the mark, Prof. Annand held that it was distinctive for all the services within the application.  The mark had a certain originality for entertainment services and cultural activities which made it easy to remember.  It was atypical marketing speak for education and training services, thereby creating an element of unexpectedness for the consumer.  Although the mark could be seen as an exhortation to a sporting participant to do his best, it would still require sufficient interpretation by the consumer to be distinctive.


Prof. Annand also allowed the appeal based on breach of Rule 63. The Hearing Officer who had issued the decision to refuse registration was not the Hearing Officer before whom the hearing had been held, the latter having retired. In the circumstances, Prof. Annand held that there should have been a fresh hearing before a Hearing Officer with no involvement in the case.


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Breach of an Exclusive Trade Mark Licence


The Trademark Licensing Company Ltd and Anr v Leofelis S.A.* (Kitchin J; [2010] EWHC 969 (Ch); 06.05.10)


The Claimants were unsuccessful in their application for summary judgment for (1) a declaration that the trade mark licence in dispute was validly terminated; (2) payment by Leofelis of accrued royalties and damages.


The Licence


The Claimants had granted Leofelis an exclusive, royalty-bearing licence to use certain Lonsdale trade marks on clothing and other goods (the “Licence”) in certain EU and other non-EU European countries (the “Leofelis Territories”) for a period of six years.


Prior proceedings


During the term of the Licence, Leofelis and Leeside Srl (to whom Leofelis had granted a sub-licence to use the Lonsdale marks) commenced proceedings against the Claimants and another Lonsdale company (the “Lonsdale Companies”) claiming, inter alia, that following the explicit approval by the Lonsdale Companies of Leofelis’ sub-licence to Leeside in Italy, the Claimants had waived the need for formal approval in relation to an extension of the sub-licence to include the rest of the Leofelis Territories.  Leeside commenced use of the Lonsdale marks in Germany and the Second Claimant applied for, and was granted, an injunction in Germany prohibiting Leeside from using the Lonsdale trade marks in that territory.  The action was heard by Evans-Lombe J, who held that Leeside was a valid sub-licensee in all of the Leofelis Territories (Leofelis SA and Anr v Lonsdale Sports Ltd and Ots [2007] EWHC 451 (Ch), reported in the CIPA Journal, May 2007).  The Claimants appealed.


Following the High Court judgment, Leofelis wrote to the Claimants asserting that maintenance of the German injunction against Leeside represented a continuing and ongoing breach of Leofelis’ rights under the Licence and reserving its right to terminate the Licence with immediate effect whilst the injunction remained in place.  The Claimants did not take any steps to discharge the injunction and Leofelis purported to terminate the Licence.  A royalty payment fell due some days later, which Leofelis did not pay.  The Claimants gave notice that Leofelis was in breach of the Licence for failing to pay the royalty and gave Leofelis 30 days in which to remedy the breach, which it did not do.  The Claimants purported to terminate the Licence with immediate effect.


Some time later, the Court of Appeal gave its judgment (Leofelis SA and Anr v Lonsdale Sports Ltd and Ots [2008] EWCA Civ 640, reported in the CIPA Journal, July 2008) reversing the decision of Evans-Lombe J and holding that no valid or effective sub-licence had ever been granted by Leofelis to Leeside for any of the Leofelis Territories except Italy.  It followed that the Claimants were within their rights to obtain an injunction in Germany and that maintenance of such injunction was not a repudiatory breach of the Licence.


The present application for summary judgment


It having become clear that the ground of termination relied upon by Leofelis was unsustainable, the Claimants applied for summary judgment that Leofelis pay royalties which were outstanding under the Licence.  Leofelis disputed that it was liable for such royalties on the basis that although its termination of the Licence had been based on the German injunction, termination was nevertheless expressed to be “without prejudice to any other breaches on which [it] was entitled to rely”.  At summary judgment, Leofelis therefore raised two further categories of repudiatory breach, which, it claimed, entitled it to terminate the Licence.


(1) Sales in Belgium, Holland, France and Sweden


Leofelis contended that the Claimants had made sales of garments bearing the Lonsdale trade marks in Belgium, Holland, France and Sweden in breach of the exclusive Licence.  Kitchin J held although that the evidence for sales into Belgium and Holland was scanty, such that Leofelis had no real prospect of establishing that such sales could be relied upon to justify termination, evidence that Lonsdale branded products sourced from Punch GmbH (“Punch”), a licensee of the Claimant (as to which see below) were being sold in France and Sweden was sufficiently compelling that Leofelis may be able to establish at trial that Lonsdale branded products were being sold in these territories with the consent of the Claimants.  Kitchin J held that if this allegation was made good, it at least arguably amounted to a repudiation of the Licence sufficient to justify immediate termination.  (As to whether the alleged breaches were sufficiently serious so as to amount to a repudiation of the contract, Kitchin J applied Woodar v Wimpey [1980] 1 WLR 277, in which Lord Wilberforce held that repudiation was a drastic conclusion which should only be held to arise in clear cases of a refusal to perform contractual obligations, in a matter going to the root of the contract.)


(2) The licences to SIA Sports and Clothing (“SIA”) and Punch


Leofelis argued that a licence granted by the Second Claimant to SIA permitting SIA to use the Lonsdale trade marks in relation to sports clothing and footwear in certain territories other than the Leofelis Territories (the “SIA Territories”) was not genuinely limited to the SIA Territories but actually permitted SIA to also use the marks in the Leofelis Territories, thereby constituting a breach of Leofelis’ exclusive rights.  The SIA licence was later amended to permit SIA to grant a sub-licence to Punch and then replaced entirely by a new licence from the Second Claimant to Punch, under which Punch assumed SIA’s responsibilities and permitted to sell Lonsdale branded products in some of the former Leofelis Territories (the Leofelis Licence having been terminated by this time).


In support of its contention, Leofelis relied on, inter alia, that SIA’s total sales during the first year of the licence amounted to €1.5million.  However, all such sales were recorded as being of items of men’s clothing in Latvia, with no sales having been recorded in any of the other permitted SIA Territories.  This equated to sales of over 215,000 garments to a population of only 920,000 men.  Leofelis argued that this was implausible and that it was more likely that all or the bulk of the sales made by SIA were not made in Latvia or in any of the other SIA Territories but were instead made in the Leofelis Territories through Punch.


Furthermore, the Punch Licence which replaced the SIA Licence did not entitle Punch to sell Lonsdale branded products in Latvia.  Given that all of SIA’s sales had purportedly taken place in Latvia, Leofelis contended that it was extraordinary that Punch would not have wished to have the right to sell (and the Claimants the right to collect royalties on such sales) Lonsdale branded products in Latvia if the turnover in that region was genuinely €1.5million.


In response, the Claimants’ stated that it was common for licensees to simply put a single total sales figure into the first convenient place in the relevant template, which explained why all the sales appeared to have been in Latvia.  As to the absence of Latvia in the Punch Licence, the Claimants stated that the Punch Licence was of limited territorial scope in order to test the water with Punch, who was new to the Claimants.


Kitchin J was concerned by the Claimants’ lack of any real explanation as to why they were prepared to forego royalties of approximately €400,000 in Latvia if they truly believed and understood that SIA had an established network in that territory.  The Judge therefore concluded that Leofelis had shown that it is possible that the Claimants licensed SIA or related companies to make sales of Lonsdale branded products in the territories covered by the Licence and had therefore granted to SIA a licence which was inconsistent with the Licence.  The order for summary judgment application should be dismissed.


However, given the Claimants’ response to the allegations, the Judge did not consider that it was probable that Leofelis’ defence would succeed at trial.  Accordingly, the Judge made a conditional order that Leofelis make a payment into court and stated that if Leofelis wished, after seeing the draft judgment, to make an application to support its suggestion that the order would stifle its defence, he would be willing to hear it.


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PASSING OFF


Numatic International Ltd v Qualtex UK Ltd* (Floyd J; [2010] EWHC 1237 (Ch); 28.05.10)


Numatic succeeded in its quia timet action against Qualtex for passing off. Numatic manufacture and sell the well-known range of ‘Henry’ vacuum cleaners, which are characterised by their brightly coloured base, which has a smiley face, a nose and the name ‘Henry’ and a top that resembles a black bowler hat.  Qualtex also manufacture and sell vacuum cleaners and, having ascertained that Henry cleaners were no longer protected by any design rights, decided to develop a replica Henry product.  Qualtex communicated this intention to Numatic but promised that it would apply its own serious and effective branding to the replica in order to avoid any possibility of passing off.  In the event, however, Qualtex developed and exhibited at a large trade show an unbranded replica product (the “Prototype”) (depicted alongside the Numatic cleaner below).



After the show, Qualtex decided to sell both branded cleaners, which would bear the name, “Quick Clean Equipment” and unbranded cleaners, which would be supplied with a blank label onto which the purchaser could have his own name printed.


Qualtex commenced proceedings on a quia timet basis, claiming that Qualtex were threatening to launch a machine onto the market with substantially the appearance of the Prototype.  In its defence, Qualtex explained that since the show it had done further work on the design and branding of the Prototype and now intended to sell a cleaner which had a markedly different appearance to the Henry products.  Qualtex undertook not to offer for sale or sell the Prototype, which had been exhibited at the show.  In light of this, Floyd J held that there was no continuing threat on the part of Qualtex to sell the Prototype or any colourable variation of it.  Thus, the only issue which must be addressed was whether at the time Numatic commenced proceedings, Qualtex were threatening to do acts that amounted to passing off.


The Judge applied the law of passing off as stated in Reckitt & Colman Products Limited v Borden Limited [1990] 1 WLR 491.


Firstly, the Judge found that Numatic had undoubtedly generated sufficient reputation and goodwill in the get-up of its Henry cleaners.


Secondly, the Judge held that there was a real likelihood that at least some members of the public would buy the Qualtex product in the mistaken belief that it was a Henry.  Despite holding that the market research survey Numatic had commissioned in support of its case was misleading because the majority of the questions encouraged the respondent to think that they might know something about, or might be familiar with, the replica product, the Judge nonetheless found that the evidence that 88 out of 500 respondents, when asked about the product gave an answer such as “it looks like a Henry”, to be compelling.  From this, the Judge concluded that the shape of the Henry and its ‘bowler hat’ prompted a strong recognition of the Henry in members of the public and that this recognition was sufficiently strong so as to convey the message that the replica was a genuine Henry.  Thus, it was likely that at least some members of the public would buy the replica thinking it was a Henry.  The Judge held that the public had been educated to recognise the overall shape and black bowler hat as indicia of a genuine Henry and accordingly, the omission of the face and name would not be sufficient to avoid passing off.


The Judge did not consider that Qualtex’s proposed “Quick Clean Equipment” branding would be adequate to avert the risk of confusion because Quick Clean Equipment is a highly descriptive name to which there is no reputation or goodwill attached, which means that the name would not convey to the public any message as to origin.  Furthermore, the public might not know that Henrys were manufactured by Numatic and so the use by Qualtex of a different brand name might not alert them to the fact that the product was not a genuine Henry.


As a result, the Judge held that Numatic might suffer damage through lost sales and injury to goodwill and granted the quia timet injunction.


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DESIGNS


Relationship between Community Registered Designs and trade marks


Beifa Group Co. Ltd v OHIM; Schwan-Stabilo Schwanhaüßer GmbH & Co. KG (GC (Fifth Chamber); T-148/08; 12.05.09)


The GC annulled the BoA’s decision (which had upheld the cancellation of Beifa’s Registered Community Design (RCD)), on grounds that the BoA had not properly compared the design in dispute with the earlier trade mark asserted against it.


Beifa registered the design below as an RCD for ‘instruments for writing’:



Relying on its earlier figurative German trade mark (below) registered for ‘instruments for writing’ in Class 16, Stabilo applied to invalidate the RCD under Article 25(1)(e) and 52 of Regulation 6/2002.  Under Article 25(1)(e), a RCD may be declared invalid if a distinctive sign is used in that design and the owner of the distinctive sign has the right under Community or national law to prohibit such use.



In its appeal to the GC, Beifa relied on three grounds: (i) incorrect interpretation of Article 25(1)(e) (i.e., whether that Article covered use in a design which was merely similar, rather than identical, to a distinctive sign); (ii) error of law vitiating the BoA’s rejection of Beifa’s request for proof of genuine use of Stabilo’s mark; and (iii) incorrect application of Article 25(1)(e) by the BoA.


In response to (i), the GC held that the scope of Article 25(1)(e) extended to distinctive signs which were similar, not just identical, to the design. This was because consumers only retained an imperfect recollection of trade marks. In addition, such a finding was consistent with, and ensured the effective protection of trade marks under, Directive 89/104 and Regulations 40/94 and 207/2009, which contain provisions prohibiting use of similar signs where a likelihood of confusion exists. Beifa’s appeal on this ground was rejected.


When considering (ii), the GC noted that the earlier mark was registered over five years previously. As a result, the German provision under which Stabilo was able to prevent use of a sign similar to its earlier mark was subject to a condition that, upon request, Stabilo prove genuine use of its mark within the preceding five years. As part of the proceedings under Article 25(1)(e), it was therefore open to Beifa to request such proof of use. However, as Beifa had only requested such proof for the first time in its pleadings before the BoA, the request was inadmissible and the BoA had been correct not to examine it. Accordingly, this ground of appeal was also rejected.


However, the GC allowed the appeal under (iii). An application under Article 25(1)(e) could only succeed if the relevant public (here, the German general public) would perceive that use had been made in the design of the distinctive sign relied on. There was no need to show the public perceived the design itself as a distinctive sign. The relevant comparison in this case was solely visual, as no phonetic or conceptual comparison could be performed. The earlier mark was a 2D figurative mark, not a 3D mark. However, significantly, the Cancellation Division and BoA had compared the design with the ‘3D shape’ of the earlier mark, and had therefore based the comparison on a sign other than the earlier mark. This was relevant because it was contrary to the wording of the legislation and because the relevant public might not necessarily perceive a 3D mark in the same way as a figurative mark.


The GC therefore annulled the BoA’s decision upon this third ground of appeal.  Beifa’s interests were sufficiently safeguarded without any need to refer the case back to the Cancellation Division.


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Equitable Ownership of Registered Designs


Victor Ifejika v Charles Ifejika & Anr* (Kay, Rix & Patten LLJ; [2010] EWCA Civ 563; 25.05.10)


Victor successfully appealed the Order of Judge Fysh in which he granted summary judgment declaring UK Registered Design No. 2 003 357 (the “Design”) invalid.


The Design, for a contact lens cleaning device, was said to have originated from drawings produced by a design company, who were allegedly commissioned by Victor.  However, Victor chose to register the Design in the name of CCL Vision Limited (“CCL”) (CCL being incorporated as a joint venture between Victor and his brother Charles, the First Defendant) because CCL was the vehicle by which he intended to exploit the Design.


The Defendants contended that, in the absence of a written legal assignment of the rights in the Design from Victor to CCL, CCL was not the proper proprietor of the Design for the purposes of Section 1(2) of the Registered Designs Act 1949.  The Design was therefore invalid.  Victor contended that it was always his intention that CCL should be vested with the design rights so as to able to exploit and protect them and that this, coupled with registration of the Design in CCL’s name, operated to assign the rights to CCL in equity, thereby giving CCL title as the proprietor under Section 2(2) of the Act.   Judge Fysh found the absence of a prior legal assignment to be fatal and held that the registration was invalid on the basis that the requirements of Section 1(2) of the Act had not been complied with.


On appeal, Patten LJ giving the lead judgment, held that Section 2(2) of the Act envisaged that design rights could be assigned at law or in equity.  Applying the principle from William Brandt’s Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454, Patten LJ held that for property to be assigned in equity, the Court must be able to infer that the property was intended to pass.  This required that there be, in the context of the transaction, sufficient expression of an intention to assign.  Patten LJ held that if Victor could establish at trial that the Design was intended to be transferred to CCL to enable it to exploit and protect the Design, this would constitute adequate evidence of Victor’s intention to assign and an equitable assignment would be created.  Therefore, the order for summary judgment should be dismissed.


Obiter, Patten LJ commented that even if Victor could not establish that there was an equitable assignment, the only consequence would be that he, as the commissioner and therefore original proprietor of the Design, would merely have remained the legal owner of the rights and could have applied to register the Design under Section 1(2) of the Act.  The Register, as it now stood, recorded Victor as the register proprietor of the Design.  Thus, it would be a triumph of form over substance if the Court were to cancel the registration under Section 20 of the Act rather than to order a variation of the Register to reflect the correct basis of registration. 


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COPYRIGHT


Interpretation of fair compensation


Sociedad General de Autores y Editores (“SGAE”) v Padawan S.L. (AG Trstenjak for the CJ; C-467/08; 11.05.10)


The Provincial Court of Barcelona made a reference to the CJ on the interpretation of ‘fair compensation’ in Article 5(2)(b) of Directive 2001/29 on the harmonisation of certain aspects of copyright and related rights in the information society.  The reference contained five questions and was made at a preliminary stage to determine the extent to which SGAE, a Spanish intellectual property rights management society, was entitled to claim fair compensation for private copying from Padawan, a company which marketed electronic storage media. 


Firstly, AG Trstenjak considered that ‘fair compensation’ was a Community law concept to be interpreted uniformly in all Member States; each Member State was responsible for determining appropriate criteria for ensuring compliance with that concept within its own territory.


The AG was of the opinion that fair compensation was achieved by means of balancing the interests of the rightholder and the user.  In connection with private copying as permitted by copyright laws of the Member States, rightholders should receive fair compensation to compensate them adequately as a reward for the use made of their protected works. 


The AG concluded that, regardless of a Member State’s system of collection for compensation, a charge was justified only where the digital reproduction devices and storage media were to be used for private copying.  In addition, the AG regarded a lump sum remuneration method as being in principle compatible with Community law.


In the AG’s opinion, applying charges indiscriminately to undertakings and professionals persons that clearly purchased digital reproduction devices for purposes other than private use could not amount to ‘fair compensation’.  However, Article 5(2)(b) did not preclude a national provision for imposing levies for other reasons.


Finally, the AG considered that a national compensation system which indiscriminately charged for private copying for all devices infringed Article 5(2)(b) where there was insufficient correlation between the fair compensation and the limitation of rights which would justify the compensation, because it could not be presumed that these devices would be used for the private copying.


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Katharine Stephens, Zoe Fuller and Gina Brueton


Reporters’ note: We are grateful to our colleagues at Bird & Bird LLP for their assistance with the preparation of this report: Nick Aries, Taliah Davis, Victoria Evans and Zbigniew Wieckowski.


The reported cases marked * can be found at http://www.bailii.org/databases.html and CJ and GC decisions can be found at http://curia.europa.eu/jcms/jcms/j_6/home.


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