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Trademark Infringement in Parallel Importation in China

Background

SPATEN-FRANZISKANER-BRÄU GmbH is the owner of two international trademarks, “Franziskaner” (No. G807592) and “Franziskaner Weissbier” (No. G1241072), licensed to Budweiser Investment (China) Ltd. (hereinafter referred to as “Budweiser”) for the use and maintenance of both trademarks in China.

On March 7, 2019, Budweiser filed a trademark infringement lawsuit, arguing that Guangzhou Oriental Keyuan Import & Export Co. Ltd. (herein after “Keyuan”) had infringed its trademark rights by importing a batch of beer that was identical to the two international trademarks mentioned above without permission. The defendant argued that the imported beer was a legal parallel import, produced in Europe by the trademark owner (SPATEN-FRANZISKANER-BRÄU GmbH) and exported through its affiliated company, which did not constitute an infringement of the trademark rights in question.

barril, cerveza, franziskaner weissbier

 

The Yuexiu District People’s Court ruled in favour of the plaintiff, requiring the defendant to destroy the infringing products and compensate the plaintiff for damages. However, later, on appeal, the Guangzhou Intellectual Property Court overturned the first instance judgment and found that the defendant’s goods constituted legitimate parallel imports.

Findings

The Guangzhou Intellectual Property Court first clarified the definition of “parallel importation of trademarks” as “the cross-border trade of goods produced or sold abroad by the trademark owner with the trademark legally attached, which are imported into a third country or sold through customs without the consent of the trademark owner or its licensee”. Generally speaking, the act of parallel importation of a trademark includes the following five constituent elements:

  1. The right holder has legal authority over the trademark in both the exporting and importing countries;
  2. The parallel imported products are manufactured and released into the foreign market by the trademark owner itself or with its consent;
  3. The trademark rights in the exporting and importing countries are substantially owned by the same person or entity;
  4. The goods are imported into the targeted territory without the consent of the owner of the trademark in the importing country; and
  5. The importation does not violate the normal and lawful customs control procedures of the importing country.

In the main proceedings, the Court found that the beer at issue was originally produced and placed on the market in Germany by SPATEN-FRANZISKANER-BRÄU GmbH, and then sold and exported by INBEV BELGIUM S.A. to OKUNI TRADING BUANGKOK CRESCENT, the authorized importer and distributor of “Franziskaner” beer in Singapore. Later, STARBEV PTE LTD resold the beer purchased from OKUNI TRADING to the defendant, and OKUNI TRADING arranged the shipment from Singapore to China directly in accordance with the sales contract between OKUNI and STARBEV and between STARBEV and the defendant. The evidence available proved that the manufacturer, the seller and shipper in Europe, the licensor who authorized the importation and sale in Singapore, and the plaintiff of this case were all direct or indirect holding companies of ANHEUSER-BUSCH INBEV NV/SA.

Therefore, the court found that the parallel imported goods were genuine.

Secondly, and since the People’s Republic of China does not explicitly prohibit all parallel importation of trademarks, the court shall base its judgment on the legislative purpose and principles of trademark law on a case-by-case basis, i.e., to safeguard the function of trademarks and protect the interests of consumers.

The core function of a trademark is to identify the source of goods. In this case, the trademark used in the allegedly infringing goods was substantially owned by the same right holder in both the country of origin (Germany) and the country of final import (China). Therefore, for the relevant public in the Chinese market, the allegedly infringing trademark did not sever the exclusive link between the trademark owner and the parallel imported goods and did not create a risk of confusion.

In addition, both the parallel imported goods and the goods licensed for sale in the Chinese market were under the control of the same right holder’s product quality control system and were placed on the market by the right holder in accordance with the market rules, which means that the quality assurance inherent in the trademark had been fulfilled.

In view of the above, the court ruled that the Chinese trademark in question had not been infringed, given that the parallel imported goods had neither undermined the functions of the Chinese trademark act nor led to a risk of misidentification of the source of the goods by the consumer public.

Remarks

In this judgment, the court adopted a neutral approach to parallel importation of trademarks, holding that the legality of a parallel importation should be judged on a case-by-case basis considering the circumstances of each particular case. If the trademark rights used on parallel imported goods are substantially vested in the same person as the trademark rights in the importing country, and the function of the Chinese trademark is not affected, there is no reason to prohibit parallel importation.

Author: Dan Liu

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Draft bill amending the Legal Deposit Act (Act no. 23/2011)

In a country such as Spain, which has been characterised by a mix of cultures throughout its history, it is vitally important, with a view to fostering interest in culture, research and information, to have an institution whose purpose is to preserve the bibliographical, audiovisual and digital heritage of the country’s culture at each moment of history.

The institution in question is legal deposit, which enables the General State Administration and the Autonomous Communities to fulfil their duty to compile and preserve copies of publications of all kinds reproduced on any kind of media and intended for distribution or communication to the public, rental or sale by any means.

libros, estantería, mujer, sofá, salón

 

In a world of daily technological advances, it is very important to adapt to those advances as quickly as possible and not be left behind. Therefore, the Council of Ministers recently gave its approval to moving ahead with the draft bill amending the Legal Deposit Act (Act No. 23/2011 [in Spanish]).

This decision was based primarily on the need to adapt the legislation in response to the changes that have taken place in the publishing sector in recent years. The new bill will thus make it possible to play a more effective role in the conservation of the country’s publications and will optimise the management of conservation centres, improving and perfecting the compilation of publications which, in line with current technology, will imply a gradual implementation of digital media in the area of publishing.

However, this new bill will also entail a series of important changes for the Spanish audiovisual sector. Specifically, it will recognise the Filmoteca Española (Spanish Film Archive) as a conservation centre and greater importance will be given, implicitly, to producers.

However, it will not only deal with the legal deposit of “motion picture films” but it will also include the concept of “other audiovisual works” which will refer to those audiovisual works that are not intended to be shown solely in cinemas. Said concept will refer to audiovisual works that are communicated to the public through other media.

For now, the draft bill has been submitted for public consultation. Therefore, we will have to wait to see the new regulation that will apply to legal deposit in Spain.

Author: Claudia Pérez Moneu

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Actress and singer Miley Cyrus is entitled to use name as a trademark

Miley Cyrus

On 16 June 2021 the General Court issued its decision in Smiley Miley Inc v European Union Intellectual Property Office (EUIPO) (Case T‑368/20).

Background

In 2014 Smiley Miley Inc – a company of world-famous artist Miley Cyrus – filed an application with the EUIPO for the registration of MILEY CYRUS as an EU trademark for goods and services in Classes 9, 16, 28 and 41.

Cyrus Trademarks Ltd opposed the application on the ground that it was confusing similar with the earlier EU trademark depicted below for goods in Classes 9 and 20:

CYRUS

In 2018 the EUIPO accepted the opposition in part on the ground that there was a likelihood of confusion between the mark applied for and the earlier mark in respect of most of the goods and services covered by the mark MILEY CYRUS.

That same year, the EUIPO dismissed an appeal filed by Smiley Miley, finding that the signs at issue were visually and phonetically similar to an average degree and that the conceptual comparison was neutral. Smiley Miley lodged an appeal with the General Court.

Decision

Having conducted an in-depth analysis of the case, the General Court annulled the EUIPO’s decision, thus granting the EU trademark MILEY CYRUS.

The General Court focused its decision on two main issues.

First, the court addressed the alleged error made by EUIPO when finding that the element ‘Miley’ (first name) in the mark applied for would be perceived as a less dominant element in comparison with the element ‘Cyrus’ (surname).

The court held that, although there is case law indicating that surnames have, as a general rule, a more distinctive character than first names, it is necessary, however,

to take account of factors specific to the case and, in particular, of the fact that the surname concerned is unusual […], which is likely to have an effect on that distinctive character […] and to take account of whether the person who requests that his or her first name and surname, taken together, be registered as a trademark is well known […].

Bearing in mind that (i) neither ‘Miley’ nor ‘Cyrus’ is a common first name or surname; (ii) the mark applied for refers to the first name and surname of a world-famous artist; and (iii) the artist is known by that first name and that surname taken together, the court stated that those two elements were equally distinctive.

Second, the court held that the EUIPO committed an error when comparing the signs conceptually and considering that the name of the reputed artist Miley Cyrus had no conceptual meaning.

The court underlined that:

a conceptual comparison remains possible where the first name or the surname in question has become the symbol of a concept, due to, for example, the celebrity of the person carrying that first name or surname […].

The well-known character of the American singer and actress meant that it was highly unlikely that consumers would not associate the mark MILEY CYRUS with the name of the artist.

Consequently, the court concluded that, although the marks were similar, the conceptual differences between them were such as to counteract the visual and phonetic similarities.

Comment

The judgment confirms, on the one hand, that names and surnames may have a conceptual meaning and, on the other, the possibility of ‘neutralising’ any visual and phonetic similarities where it is established that the relevant public assigns to one of the signs a clear and specific meaning that can be grasped immediately.

Considering that the courts have followed this same line over the past few years, the decision does not represent a turning point in case law. Nevertheless, it reinforces the protection enjoyed by celebrities through the registration of trademarks, bearing in mind their reputation and worldwide recognition as a result of appearances in the media.

This article first appeared on WTR Daily, part of World Trademark Review, in june, 2021. For further information, please go to www.worldtrademarkreview.com.

Author: Soledad Bernal

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Freedom of information vs the right to honour: The Fariña case

At the beginning of the year the Spanish Supreme Court issued a ruling in the Fariña case. Fariña is a well-known book in Spain that tells the story of Galician drug trafficking and was withdrawn from sale for a period of time as a precautionary measure due to a lawsuit filed for libel and slander.

libro abierto, notas, bolígrafo

 

The book mentions, on several occasions, Mr. Bernabe’s involvement in drug trafficking, which, in the plaintiff’s opinion, violated his right to honor.

To understand the case that concerns us, it is important to bear in mind that Mr. Bernabe has twice been tried for crimes related to drug trafficking and in both cases he was found not guilty with respect to the offences of which he was accused.

The principal issue under debate in this case is the conflict between two fundamental rights: freedom of information and the right to honour.

The Court that what is required of a professional transmitting information are reasonable efforts to verify the facts to avoid undermining the right of everyone to receive truthful information, and the information is to be considered truthful if it is based on objective and reliable sources that are readily identified and verifiable, so that the conclusions reached by the party furnishing the information based on the verified data from those sources are conclusions that the average reader or viewer would also have reached based on the same data.

The Court dismissed the complaint against the book’s author.

This is summary of the case published at Kluwer IP Law Copyright Cases

Author: Inés de Casas

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Legal protection of Databases

base de datos, iconos, azul

Judgment of the Court of Justice (Fifth Chamber), case C-762/19

The Court of Justice of the European Union (hereinafter, the “CJEU”) has issued a ruling in case C-762/19 concerning the prohibition on any third party to “extract” or “re-utilize”, without the maker’s permission, all or a substantial part of the contents of a database.

base de datos, iconos, azul

 

The issue raised in the proceedings concerns the compatibility of the operation of a specialized search engine with the sui generis right contained in Directive 96/9, a matter that the Regional Court of Riga (Latvia) referred to the CJEU for a preliminary ruling in two questions which sought to determine, firstly, whether the display, in the list of results generated by a specialized search engine, of a hyperlink that redirects the user of that search engine to a website, provided by a third party, where the contents of a database of job advertisements can be consulted, falls within the definition of “re-utilization” set out in Article 7(2)(b) of Directive 96/9 and, secondly, whether the information from the meta tags of that website displayed by the search engine is to be interpreted as falling within the definition of “extraction” set out in Article 7(2)(a) of said Directive.

In order to answer these questions, we must first define the scope and purpose of the protection of the sui generis right. The purpose of the sui generis right is to ensure the protection of a substantial investment in the obtaining, verification or presentation of the contents of a database, granting the maker of the database the possibility of preventing the unauthorized extraction or re-utilization of all or a substantial part of the contents, so that the person who has taken the initiative and assumed the risk of making a substantial investment receives a return on his or her investment.

It is also important to note that pursuant to Article 7 of Directive 96/9, the protection of a database by the sui generis right is justified only if there has been quantitatively or qualitatively a substantial investment in the obtaining, verification or presentation of the contents of the database.

With regard to the criteria for concluding that an act by a user constitutes an “extraction” or “re-utilization” within the meaning of Directive 96/9, “extraction” is defined as “the permanent or temporary transfer of all or a substantial part of the contents of a database to another medium by any means and in any form”. As for “re-utilization”, it covers “any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies, by renting, by on-line or other forms of transmission”. Both concepts must be interpreted as referring to any act of appropriating and making available to the public, without the consent of the maker of the database, the results of his or her investment, thus depriving him or her of revenue which should have enabled him or her to redeem the cost of that investment.

The search engine at issue in the proceedings makes it possible to simultaneously explore, by means other than that provided for by the maker of the database concerned, the entire content of several databases, including the plaintiff’s, by making that content available to its own users. By providing the possibility of searching several databases simultaneously, that specialized search engine gives users access, on its own website, to job advertisements contained in those third-party databases. Thus, users are provided with access to the entirety of the content of third-party databases by a means other than that provided for by the makers of those databases.

In the light of the above considerations, the answer to the questions referred for a preliminary ruling is that Article 7(1) and (2) of Directive 96/9 must be interpreted as meaning that an Internet search engine specializing in searching the contents of databases, which copies or indexes all or a substantial part of a database freely accessible on the Internet and then allows its users to search that database on its own website according to criteria relevant to its content, is “extracting” or “re-utilizing” that content within the meaning of that provision, which may be prohibited by the maker of such a database where those acts adversely affect its investment in the obtaining, verification or presentation of that content, namely, that they constitute a risk to the possibility of redeeming that investment through the normal operation of the database in question.

Author: Claudia Pérez Moneu

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