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Proposal for EU Digital Services Act published

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On 15 December 2020, the European Commission finally published the long-awaited proposal for a Digital Services Act, as well as the proposal for a regulation on digital markets (link to related article).

These new regulations:

  1. provide stronger protection for consumers and their fundamental rights online;
  2. establish high standards of transparency and a clear accountability framework for online platforms; and
  3. will foster innovation, growth and competitiveness in the single market.
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The regulation on digital services, according to the press release published, will introduce a series of new, harmonised EU-wide obligations for digital services, carefully graduated on the basis of the size and impact of those services, such as:

  • rules for removal of illegal goods, services or content online;
  • safeguards for users whose content has been wrongfully removed by platforms;
  • new obligations for platforms to take risk-based action to prevent abuse of their systems;
  • wide-ranging transparency measures, including measures relating to online advertising and to the algorithms used to recommend content to users;
  • new powers to scrutinise how platforms work, including facilitating researchers’ access to key platform data;
  • new rules on traceability of business users in online marketplaces, to help track down sellers of illegal goods or services;
  • an innovative cooperation process among public authorities to ensure effective enforcement across the single market.

Platforms that reach more than 10% of the EU’s population (45 million users) are considered systemic in nature and are subject not only to specific obligations to control their own risks, but also to a new oversight structure. This new accountability framework will be comprised of a board of national digital services coordinators, with special powers for the Commission in supervising very large platforms, including the power to sanction them directly.

The European Parliament and the Member States will now discuss these proposals from the Commission in the ordinary legislative procedure. Once these rules are adopted, they will be directly applicable across the EU. We will have to wait to see what amendments are made during the parliamentary procedure. In any case, this effort to regulate the digital world is certainly the right way forward.

 

Author: Juan José Caselles

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The Court of Justice rules for the first time on the prohibition concerning registration of a trademark filed by an agent

Edificio del palacio de justicia

The Court of Justice issued a judgment on 11 November 2020 (C-809/18 P; MINERAL MAGIC) in which it had the opportunity, for the first time, to establish the requirements that must be fulfilled for application of Article 8(3) of the Regulation on the European Union Trademark (EUTMR).

This precept, which has its origin in Article 6septies of the Paris Convention, concerns the case where an agent (person linked commercially with the proprietor of a foreign trademark) applies in his own name for the trademark of said proprietor without the proprietor’s consent. This is known informally as the case of the “unfaithful agent”.

Edificio del palacio de justicia  

The background to the dispute leading to the judgment in question can be summarised as follows. The UK company JOHN MILLS filed an application for the European Union trademark MINERAL MAGIC to cover a range of goods in class 3. Prior to the application, there was a distribution agreement between JOHN MILLS and the US company JEROME ALEXANDER CONSULTING in relation to goods sold under the designation MAGIC MINERALS BY JEROME ALEXANDER. Having become aware of the filing of the mark MINERAL MAGIC, the US company filed an opposition invoking the application of Article 8(3) EUTMR. They cited, among others, the existence of the registered US trademark MAGIC MINERALS BY JEROME ALEXANDER also covering goods in class 3.

The main issue already addressed in the proceedings before the EUIPO was whether Art. 8(3) EUTMR was applicable when, as in this case, the word designations of the EU mark and the US mark were not completely identical, and the goods covered by the respective marks were not identical either (at least not completely).

Since the dual conditions of identical marks and identical goods were not present, the EUIPO’s Opposition Division rejected the US company’s arguments. However, the subsequent appeal was accepted by the EUIPO’s First Board of Appeal and the mark MINERAL MAGIC was thus refused. The Board of Appeal adopted a flexible interpretation of the provisions of Article 8(3) EUTMR, finding that they could also be applied when the marks in dispute are similar either in respect of the marks or the goods covered.

JOHN MILLS lodged an appeal, which was accepted by the General Court in a judgment dated 15 October 2018 (T-7/17). The General Court essentially adopted a literal interpretation of Article 8(3) EUTMR, which refers to “the trademark”, meaning that, in the opinion of the General Court, the foreign mark and the mark applied for must be the same and, therefore, identical. Moreover, in support of its view, the General Court referred to the preparatory work carried out for the drafting of Regulation 40/94 on the Community trademark. This included a document which expressly indicated that the suggestion of a delegation that the provision concerned should also apply in cases of ‘similar’ trademarks for ‘similar’ goods, had not been adopted. For the General Court, since the wording of Article 8(3) is so clear, there was no need to use other interpretative sources, such as, for example, Article 6septies of the Paris Convention. Consequently, it held that since there was only a mere similarity between the marks in conflict, the conditions for application of Article 8(3) EUTMR were not present.

The Court of Justice, on the other hand, considered that for the application of Article 8(3) EUTMR, it is essential to take into account Article 6septies of the Paris Convention, since the European Union is a member of the World Trade Organization and, as such, is obliged to adhere to the TRIPS Agreement which, in turn, provides that members shall comply with Articles 1 to 12 of the Paris Convention.

While the Court of Justice recognises that in the French-language version (which is the authentic version) of Article 6septies of the Paris Convention the expression ‘cette marque’ is used in reference to the earlier mark, it nevertheless studies the background to the provision. In this regard, the Court of Justice states that in the Acts of the Conference of Lisbon of 1958 (the Conference where the provision was introduced) it is indicated that a trademark applied for by the agent or representative of the proprietor of the earlier mark may also be covered by that provision where the mark applied for is similar to that earlier mark.

Thus, the Court of Justice does not assume that Article 8(3) EUTMR (and its originating provision, Article 6septies of the Paris Convention) only applies where the dual conditions of identical marks and identical goods/services are present and it acknowledges that, in principle, it can also be applied in cases of “similarity”. And in this regard (and for me this argument is very convincing) the Court of Justice clearly states that “if Art. 8(3) EUTMR were only applied in cases where the marks at issue are identical (also including where the goods and/or services are identical), such an interpretation would have the effect of calling into question the general scheme of the European Union Trademark Regulation in that it would result in the proprietor of the foreign mark being deprived of the possibility of opposing, on the basis of Article 8(3), the registration of a similar mark by his agent or representative, even though the agent or representative, following such registration, would be entitled to file opposition, pursuant, in particular, to Article 8(1)(b), against the application for subsequent registration of the initial mark by that proprietor on the ground of its similarity to the mark registered by the agent or representative of that proprietor”.

On the basis of these arguments, the Court of Justice upheld the appeal and even addressed the substance of the matter, finding that in this case the requirements for application of Article 8(3) EUTMR were fulfilled and, therefore, the marks could not be permitted to coexist.

We can therefore conclude that this judgment is of great importance, given that it confirms the necessary conditions for the proprietor of a foreign trademark to be able to prevent the registration of a later mark applied for by his agent or representative. In summary, we can say that the conditions, which are cumulative, are the following.

  1. The first condition is that, specifically in countries where trademarks are acquired through registration, the person intending to exercise his right must be the proprietor of a trademark in a country that is party to the Paris Convention or a member of the World Trade Organization.
  2.  
  3. The second condition is that a commercial relationship must have existed between the applicant and the proprietor of the earlier mark prior to the filing of the contested mark. In this regard, there is agreement that the terms “agent” or “representative” are to be interpreted broadly, including, for example, distributors, as in the case concerned in this judgment.
  4.  
  5. As for the final requirement, on which this judgment has provided clarification, it is not essential for the dual conditions of identical marks and identical goods/services to be present. The provision may also be applied in cases where there is similarity between the marks and similarity in the goods or services claimed by the respective marks.

If these requirements are fulfilled, Article 8(3) EUTMR and Article 6septies of the Paris Convention shall apply,unless, as specified in those legal provisions, the agent is able to justify his actions or has authorisation (which I understand must be express authorisation) from the proprietor of the foreign mark.

 

Author: Jesús Gómez Montero; Former Partner of Elzaburu and Member of the Advisory Board of the Alberto Elzaburu Foundation

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Forthcoming publication of the EU’s Digital Services Act

Inminente publicación de la "DIGITAL SERVICES ACT" de la UE

Online platforms (such as search engines, social media and e-commerce platforms) play an increasingly important role in our everyday lives. However, the current EU rules on digital services have to a large extent remained unaltered since the adoption of the Directive on electronic commerce in the year 2000, with great discrepancies in the way this Directive has been implemented across the EU.

Forthcoming publication of the EU’s Digital Services Act  

The Commission announced the revision of the internal market rules for digital services in its 2019 communication “Shaping Europe’s digital future”. Two public consultations were carried out, which had the following structure and ended on 8 September 2020:

  1. Assessment of the Directive on electronic commerce and clarification of the liability regime for digital services; and
  2. Possible introduction of an ex ante regulatory instrument for controlling the practices of large online platforms with significant network effects acting as gate-keepers.

The European added value assessment of the Digital Services Act was presented in October 2020, with the approval of the European Parliament resolution of 20 October 2020 on the Digital Services Act and fundamental rights issues posed.

The forthcoming next step will be the publication of the Digital Services Act, on 9 December 2020. Special attention must be paid to its final text, in particular with regard to the possible creation of national authorities competent to deal with illegal content. What does seem clear is that freedom of expression may not be asserted to sell counterfeit goods online.

 

Author: Juan José Caselles

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Some thoughts on mandatory use of a registered trademark

I would like to share my thoughts here on the issue of mandatory use of a registered trademark, in the light of the content of some recent decisions handed down by the constituent courts of the Court of Justice of the European Union.

red car fenderIn the Court of Justice’s judgment of 22 October 2020 (C-720/18) concerning the use of Ferrari’s Testarossa (figurative) trademark, I was struck by the citing of a Convention (of whose existence I was frankly unaware) signed back in 1892 between Switzerland and Germany. In this Convention, which is still in force according to the judgment, it is established that the legal disadvantages which, under the laws of the contracting parties, occur when a trademark has not been used within a certain period of time are precluded if use has taken place in the territory of the other party (Art. 5.1).

 

Based on this circumstance, use of a German trademark in Switzerland shall be valid for the purpose of attesting to use of a German national trademark which, therefore, cannot be revoked, even if it has not been used within the territory of Germany. The paradox that arises is that, as pointed out in the judgment, in the event that the same German trademark were used as a basis for opposing a new European Union trademark application, the opposition would fail if the applicant were to ask for proof of use of the German trademark, given that the use has not been made in the territory of the European Union.

Infinite Eight Champagne Extra Brut 2004Another judgment on which I would like to comment is the one handed down by the General Court on 23 September 2020 (T-601/19) ruling on the case relating to opposition proceedings involving the European Union trademark application “in·fi·ni·tu·de” and the earlier Spanish trademark “infinite”, both covering wines. In said proceedings, the opponent was required to attest to use of its trademark. To this end, various documents were submitted showing that the trademark “infinite” had been used in relation to exports of wines to Canada, Puerto Rico and the United States.

Having accepted the use of the trademark “infinite”, the Court assessed whether there was a likelihood of confusion between the trademarks in dispute. In this regard, the Court took as its starting point that the relevant territory was Spain and the relevant public was the general public, whose level of attention was average. The truth is that there are nuances to both aspects, given that, since the trademark is Spanish, it would indeed seem to be correct that the relevant territory is Spain. However, if we consider the matter in detail, it must be acknowledged that the goods are sold and consumed outside the EU. Therefore, based on the reality in the marketplace, the likelihood of confusion, at least from the perspective of the general public, would arise in those countries, as said “general public” would be Canadian or US consumers.

Logically, that relevant public is not valid for the purpose of analysing a conflict between trademarks arising in the European Union. In such cases where use is demonstrated on the basis of exports of the goods to third countries, it would seem more logical to think that the relevant public should consist of the professionals who carry out the import or export of the goods, in which case the pertinent analysis should be carried out by assessing the level of attention of those professionals.

FRIGIDAIREThe last of the judgments on which I wish to comment is the judgment issued by the General Court on 28 October 2020 (T-583/19). This case concerns the trademark FRIGIDAIRE, which was partially revoked by the EUIPO, since sufficient use was not demonstrated for certain goods (washing machines, dishwashers, etc.).

The owner had filed proof of use of the trademark in respect of those electrical appliances, submitting, among other evidence, material referring to sales of such goods for use on US military bases in Belgium and Germany. The General Court held that in such cases there is no use in the territory of the European Union given that the areas occupied by such military bases do not form part of that territory and, therefore, since there is no use of the trademark FRIGIDAIRE in the European Union, it should be revoked in respect of those goods.

As may be seen, the cases concerned in the cited judgments are somewhat unusual and they are a further indication that, when applying trademark law, any assessment made must be based on the individual circumstances of the specific case.

Author: Jesús Gómez Montero. Former Partner of ELZABURU and Member of the Advisory Board of the Alberto Elzaburu Foundation

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Trinidad and Tobago: Another country in the Americas joins the Madrid System for the International Registration of Trademarks

Trinidad y Tobago, mapa y bandera

The latest recently announced addition to the Madrid System is Trinidad and Tobago. One curious detail about this Caribbean island nation is that the name of its capital has clear Spanish roots: Port of Spain.

As of 12 October 2020, Trinidad and Tobago forms part of the long list of countries that belong to the system for the international registration of trademarks. Specifically, it is number 123 on the list.

On that date, 12 October, the country’s authorities deposited its instrument of accession to the Madrid Protocol, which will enter into force on 12 January 2021, if the coronavirus pandemic allows the country to have everything ready for then.

In principle, some legislative aspects in the country are already harmonised. For example, there is a multiclass registration system in force, as well as the eleventh edition of the Nice Classification. The protection period of trademarks is 10 years from the filing date. However, this country has one special feature in this regard, given that when trademarks claim a priority, the protection period is calculated from the priority date and not from the filing of the trademark in Trinidad and Tobago.

For certain sectors of the economy, such as, for example, hydrocarbons, refineries and petrochemicals, or steelmaking, the Madrid Protocol offers a new option for protecting your trademarks in Trinidad and Tobago.

Author: Cristina Arroyo

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