Tag Archives: Case law

Passions Fly in Shopping Trolley Case

In a passionate dispute over shopping trolleys locks, Valencia Commercial Court No. 2 has found against a supplier who had been displaced at one of Spain’s largest retail chains (Judgment 134/19 of May 6th, 2019 in PO764/2017).

When this happens, emotions tend to run high and the row often ends up in court. The shunned supplier frequently alleges infringement of a utility model together with slavish imitation giving rise to unfair competition. A driving force for such litigiousness is the fact that utility models are not subject to any substantive examination in most European countries, for instance, in Spain and Germany. There is no bar to obtaining an exclusive right based on something which may be lacking in merit. This effectively shifts the State’s functions onto the shoulders of competitors, who are saddled with the burden of proving that the title is invalid. It might be fairer if that burden were shifted to the title-holder who, after all, has obtained an exclusive right based on nothing more than his or her own say-so.

The justification for this system is that it provides SME’s with a route to obtaining fast-track protection for inventions at a reasonable cost, thereby giving them access to the patent system and encouraging innovation. However, SME’s competitors are usually other SME’s who may be unjustifiably precluded from carrying out further developments simply because they cannot bear the cost of litigation. It is only fair to point out however that the system does have some checks and balances. The patent office can carry out a prior art search upon request and in fact this has now become mandatory in Spain before enforcement proceedings can be brought. Unlike the case of patents, a German infringement court can consider validity as a defence – an exception to bifurcation. Post-grant opposition is also available in both countries, which can be undertaken for a fraction of the cost of court proceedings.

In the Valencia case the Court found that the new shopping trolley locks did not infringe the utility model which was described by the Court as a simple alternative lacking in any inventive merit. Whether the lock was a slavish imitation or not was irrelevant from the point of view of unfair competition, as imitation per se is expressly permitted by the Spanish Unfair Competition Act. The Court had not been shown any evidence that the imitation had interfered with the normal workings of the marketplace such as causing a risk of association with the original coin-lock in the mind of the average buyer.

This decision applies settled case law which upholds the principle of free imitation. This comes as a surprise to many people who somehow imagine that their “intellectual property” is automatically protected. The whole point of the free market economy is that the public be offered a range of similar products. The granting of patents and other exclusive rights is in fact an exception to this general rule which is only justified because it encourages innovation.

Author: Colm Ahern
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Criminal conviction for storage for commercial purposes of goods infringing copyright, even in storage facilities separate from the place of sale

Source: Pixabay

The judgment of the CJUE (Case C-572/17) of 19 December was issued within the context of a request for a preliminary ruling from the Swedish Supreme Court in criminal proceedings brought by the Public Prosecutor’s Office of this Court against Mr. Imran Syed concerning the infringement of trade marks and infringements of copyright in literary and artistic works. 

Mr Syed ran a retail shop in Stockholm (Sweden) in which he sold clothes and accessories with rock music motifs. In addition to offering the items for sale in that shop, Mr Syed stored such goods in a storage facility adjacent to the shop and in another storage facility located in Bandhagen, a suburb of Stockholm. It is established that Mr Syed’s shop was regularly restocked with merchandise from those storage facilities.

The issue arising was whether goods stored by someone in a warehouse and bearing a protected motif could be considered as being on sale whenever there are identical goods on sale in a retail establishment run by such person.

In this judgment the CJUE recalls that such an act can constitute an infringement of the exclusive distribution right (Article 4(1) of Directive 2001/29) even if that act is not followed by the transfer of ownership to a purchaser of the protected work or a copy thereof (expressly citing its judgment of 13 May 2015, Dimensione Direct Sales and Labianca, C‑516/13). Therefore, an act prior to the actual sale of a work or a copy thereof protected by copyright, which takes place without the rightholder’s consent and with the objective of making such a sale, may infringe the distribution right. Although carrying out the sale is not a necessary element for the purpose of establishing an infringement of the right of distribution, it must nonetheless be proven that the goods concerned are actually intended to be distributed to the public without the rightholder’s consent, inter alia by their being offered for sale in a Member State where the work at issue is protected.

The fact that a person, selling goods bearing copyrighted motifs in a shop without the rightholder’s authorisation, stores identical goods, may be an indication that the stored goods are also intended to be sold in that shop and that, accordingly, that storage may constitute an act prior to a sale being made, which is liable to infringe that rightholder’s distribution right.

Although the distance between the storage facility and the place of sale may constitute evidence that can be used in seeking to establish that the goods concerned are intended to be sold in that place of sale, that evidence cannot, on its own, be decisive. It may, on the other hand, be taken into account in a concrete analysis of all the factors likely to be relevant, such as, for example, the regular restocking of the shop with goods from the storage facilities at issue, accounting elements, the volume of sales and orders as compared with the volume of stored goods, or current contracts of sale.

The judgment finally rules that the storage by a retailer of goods bearing a motif protected by copyright on the territory of the Member State where the goods are stored may constitute an infringement of the exclusive distribution right when that retailer offers for sale, in a shop without the authorisation of the copyright holder, goods identical to those which he is storing, provided that the stored goods are actually intended for sale on the territory of the Member State in which that motif is protected. The distance between the place of storage and the place of sale cannot, on its own, be a decisive element in determining whether the stored goods are intended for sale in the territory of that Member State.

Once more, with this judgment the CJUE imposes order regarding the problem of copyright-infringing acts or means, prior to the sale of goods, that regrettably and painfully affect creators far too frequently.

  Author: Juan José Caselles

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New CJEU judgment on the distinctive character of the Kit Kat shape

The long-running conflict between Nestlé and Cadbury (now Mondelez) with regard to registration of the Kit Kat shape mark as characteristic for chocolates is still bringing us interesting rulings by the courts on the question of the acquisition of distinctive character by trade marks through use.

   

Recapitulating, first came the refusal of the trade mark in the United Kingdom, which resulted in a referral for a preliminary ruling, addressed by the Court of Justice of the European Union in its judgment of 16 September 2015 (Case C-215/14). Counter to what many had expected, that decision did not move the British High Court of Justice to find in favour of registering Nestlé’s trade mark. Quite the opposite, in his judgment of 20 January 2016 Mr. Justice Arnold’s interpretation was that the CJEU had held that the association between the image of the confection and the Kit Kat chocolate bar by a large majority of people surveyed did not suffice to consider that the shape had acquired distinctiveness as a trade mark. In his opinion, it would have been necessary to show that consumers perceived the product as having a given undertaking as its business origin on the basis of the sign in question alone, without considering any other marks that may also be present. As a result, the refusal of the British trade mark was ultimately upheld.

On the other hand, Nestlé had succeeded in registering the shape of the Kit Kat chocolate bar as a three-dimensional European Union trade mark in 2006. The following year Cadbury filed a request asking the EUIPO to invalidate the registration on grounds that the sign was devoid of distinctive character. The EUIPO’s Board of Appeal held that even though the sign was initially devoid of distinctiveness, Nestlé had proven that it had acquired distinctive character through use. That decision was set aside by the General Court by its judgment of 15 December 2016 on grounds that the findings of the Board of Appeal did not address the acquisition of distinctiveness by the mark in part of the European Union (specifically, in Belgium, Ireland, Greece, and Portugal).

In essence, the issue in dispute was the geographical extent of the evidence of acquisition of distinctive character through use. While Nestlé and the EUIPO maintained that it sufficed to show that the mark had acquired distinctiveness in a significant portion of the European Union, the General Court ruled that this had to be shown in the entire territory of the EU, not just in a substantial part or in the greater part of that territory.

On appeal, by its judgment of 25 July 2018 (Joined Cases C-84/17 P, C-85/17 P, and C-95/17 P), the Court of Justice upheld the General Court’s decision. The CJEU found that Article 7.3 European Union Trade Mark Regulation requires proving distinctiveness in the European Union to have been acquired wherever the sign was not distinctive ab initioWhere this is the case throughout the European Union, the proof needs to encompass the territory of the EU as a whole; evidence dealing with a substantial part of the EU does not suffice.

The Court has clarified, though, that the evidence does not have to consist of separate evidence for each individual EU Member State but that evidence may instead be produced globally for various Member States combined. However, the evidence, whether individual or global, must cover the entire territory of the European Union. In consequence, the Board of Appeal’s decision was vitiated by an error in law in failing to adjudicate on the acquisition of distinctive character by Nestlé’s trade mark in Belgium, Ireland, Greece, and Portugal.

The Court of Justice has set a very high bar for evidence. It should be noted that both the EUIPO and the General Court had deemed Nestlé to have proven acquisition of distinctive character in 10 EU Member States, including the largest ones (Germany, Spain, France, Italy, and the United Kingdom). It would thus seem that owners who, in the event of a challenge, wish to rely on the acquisition of distinctive character through use to defend the validity of their European Union trade marks had best be prepared to embark on a laborious and costly process of compiling evidence.

Author: Carlos Morán 

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Messi scores against Massi

In 2011, the FC Barcelona player Lionel Messi filed European Union trademark application No. 010181154, with the following design, at the EUIPO to cover goods in classes 9, 25 and 28:

That same year, the owner of the earlier European Union trademarks Nos. 3436007 and 414086 MASSI (word), registered in classes 25, 9 and 28 respectively, filed opposition against said application, arguing that there was a likelihood of confusion and/or association (Article 8.1 EUTMR) between the trademark filed by Leo Messi and the earlier MASSI marks.

Having considered the parties’ arguments, in 2013 the EUIPO issued its decision, accepting in full the opposition filed by the owner of the MASSI marks and thus refusing Leo Messi’s application, on the basis that there was a likelihood of confusion between the marks in dispute.

In 2014, the Argentinian superstar lodged an appeal against the refusal, but the EUIPO dismissed the appeal, finding that there was a likelihood of confusion, given that the dominant elements of the marks, that is, MESSI and MASSI, are practically identical both visually and phonetically.

Thus, Leo Messi decided to contest the decision and in September 2014 he lodged an appeal with the General Court of the European Union on grounds that the marks MESSI and MASSI were perfectly able to coexist on the Register, as the EUIPO had not taken into account the importance of the conceptual aspects when analyzing the matter.

Having conducted an in-depth analysis of the case, the General Court issued a judgment on 26 April 2018 accepting Leo Messi’s appeal and annulling the EUIPO’s refusal decisions and thus granting the European Union trademark MESSI.

The arguments put forward by the General Court in its judgment are the following:

  1. First of all, the General Court states that the signs making up the marks in conflict have an average degree of visual similarity, given that the dominant element of the MESSI mark is extremely similar to the word element of the MASSI mark.
  2. However, the Court holds that the EUIPO committed an error when comparing the signs on the conceptual front and considering that the Argentinian footballer’s reputation only concerns football enthusiasts and sports fans in general.
  3. The General Court also underlined that the well-known nature of Leo Messi’s surname means that it is highly unlikely that consumers will not associate the MESSI mark with the player’s surname, since the goods covered by the marks in dispute are sporting articles and clothing.
  4. The General Court therefore concludes that although the marks MESSI and MASSI are very similar, the conceptual differences between them are such as to counteract the visual and phonetic similarities. Moreover, the Court states that a significant part of the relevant public will associate the term “Messi” with the surname of the famous footballer and, consequently, will perceive the term “Massi” as conceptually different.

As usual, the analysis carried out and the arguments put forward by the General Court for this decision are, in our opinion, well-founded and correct, given that the wide recognition and reputation of the FC Barcelona player worldwide among the average consumer of sports-related goods make it hard to believe that any confusion and/or association could arise between the goods offered under the MASSI marks and those offered under the surname making up the MESSI mark.

Furthermore, this decision only reinforces the protection enjoyed by celebrities in the course of trade through the registration of trademarks, bearing in mind their reputation and wide recognition as a result of appearances in the media (press, TV, radio, Internet, etc.).

In any case, it should be noted that the judgment may yet be subject to appeal before the Court of Justice of the European Union (CJEU). We shall see whether the opponent gives up and Leo Messi wins the match or whether the owner of the MASSI marks lodges an appeal, providing for an exciting end to the match.

We will keep an eye on the scoreline.

  Author: Manuel Mínguez Visit our website: http://www.elzaburu.es/en  

How to determine whether design features are solely dictated by their technical function

In its recent judgment C-395/16 of 8 March 2018, DOCERAM vs. CeramTec, the Court of Justice addressed the controversial issue of the bar against registering a shape dictated solely by its technical function as a Community design. Article 8(1) of Council Regulation (EC) No. 6/2002 of 12 December 2001 on Community Designs (CDR) sets out this bar to registration in those terms. As stated in Recital 10 of that Regulation, its purpose is to prevent the grant of exclusive rights to the owner of an industrial design from interfering with technological innovation.

However, to date, interpretation of that Article by the national courts and by the EUIPO has not been uniform. Basically, two different approaches have coexisted side by side.

  1. On the one hand, there is the so-called multiplicity of forms approach, which holds that if there are different alternative forms of an object performing the same technical function, the design in question cannot be regarded as being dictated solely by its function. This criterion has been followed by the courts of various countries, France, Germany, and Spain among them.
  2. In recent decisions, however, the EUIPO has taken a different approach, which holds that what needs to be examined is whether the designer selected the design features based solely on their functionality or based on other considerations as well. Furthermore, this point is to be assessed from the standpoint of a reasonable, objective observer.

To date the CJEU has not had occasion to issue any ruling on this subject. The occasion has now arisen subsequent to a request for a preliminary ruling submitted by the Oberlandesgericht Düsseldorf in proceedings between the German companies DOCERAM GmbH and CeramTec GmbH. The former company owns several Community design registrations covering the shape of ceramic centring pins used with welding machines to hold the pieces to be welded in position.

In response to infringement proceedings brought based on those registrations, CeramTec GmbH counterclaimed seeking a declaration of invalidity on grounds that the designs were barred under Article 8(1) CDR. The counterclaim was successful, and DOCERAM appealed, contending that there were other, alternative forms that fulfil the same technical function for the product in question. At that point, the Düsseldorf court referred its questions to the CJEU for a preliminary ruling as to which criterion should be employed in assessing the bar to registration.

It turns out that the Court of Justice has rejected the multiplicity of forms doctrine. In its view, it does not follow either from Article 8(1) of the CDR or from any other provision of the Regulation that multiplicity of forms is the only criterion for determining application of the Article. Following the Advocate General’s opinion, the Court further ruled that applying this criterion would enable an operator who has registered various alternative forms fulfilling the same technical function to obtain, in practice, exclusive protection equivalent to patent protection without having to meet the requirements of a patent.

Therefore, the CJEU has taken the alternative approach, holding that what has to be considered is whether, when choosing the features of appearance of a product, considerations other than the need for it to fulfil its technical function, in particular those related to its visual aspect, have been taken into account. Thus, the Court concluded that for the bar to registration in Article 8(1) CDR to apply, a product’s technical function must be the only factor that has determined the features of the product’s appearance, the existence of other, alternative designs being irrelevant in that connection.

On the other hand, in its reply to the second question raised by the Oberlandesgericht Düsseldorf, the Court ruled that assessment of that point does not have to be based on the perception of an “objective observer”.

Instead, again following the opinion of the Advocate General, the Court has held that, in their assessments, the national courts need not base their findings on the perception of an “objective observer” but must take account of all the circumstances relevant to the case. The factors to be taken into account include, in particular, the design in question, the objective circumstances informing the choice of the features of appearance of the product, information on its use, and even the existence of alternative designs that fulfil the same technical function.

Clearly, the criteria set by the Court of Justice in this judgment do not particularly simplify the work of the national courts. This question of technical function will doubtless continue to be a significant source of controversy in proceedings dealing with the infringement and invalidity of industrial designs.

  Author: Carlos Morán

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