Saturday, 29 August 2015

Mis-Sold Community Trade Marks

Following the judgement of Mr Justice Hacon in The Sofa Workshop Ltd v Sofaworks Ltd [2015] EWHC 1773 on 29 June 2015, there have been a flurry of case notes from the great and the good of the UK trade mark profession drawing attention to the fact that community trademark registrations maybe inappropriate for many clients who don't maintain a presence on the European Union market, but something rather smaller and more local. These case reports include ones from  Cleveland, Marks & Clerk, Dehns, Mewburn Ellis and others.

Those links will take you to the articles which describe the background to the case and the decision.  Essentially, since the mark had been used and promoted only on the UK market for sofas, it was held not to have been used in the manner required by the European Court of Justice when it decided C 149/11 Leno merken, the ONEL reference from Benelux. This was in December 2012, so why the long hiatus before we realised what this all meant.

But wait, the opposition divisions of OHIM and national patent offices have been trying to apply Leno merken all this time. Opposition decisions, though, do not create precedents and are frequently not studied in any detail by academics or the trademark profession.

Leno merken was a clever academic decision that said (unhelpfully, if politically correctly) that we were to  ignore the territorial borders in the European Union. This rather detracted from the important point that it was the use in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it we had to look at. In particular we should  a"take into account the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and the scale of the use as well as its frequency and regularity".

The European market for anything is typically bigger for most goods and services like sofas, but it is often quite difficult for a trade mark agent to provide evidence of the European market for their goods. The CJEU did recognise that some markets could be restricted to a single member state (paragraph 50) but in this world we need to know more about the economic features of a market and (perhaps) provide evidence about it. Help!

On 20 May 2014 in a first instance case 000008263  - the Cancellation Division considered the board game market and made this damning assessment:

The remaining invoices which are dated within the relevant period only show sales to customers in Germany which is a relatively small part of the European Union. In territorial terms and in view of the unitary character of the CTM, the appropriate approach is not that of political boundaries but of markets. As the Court indicated in 'Leno Merken', it is impossible to determine a priori and in the abstract what territorial scope should be applied in order to determine whether the use of the mark is genuine or not (para. 55). All the relevant facts and circumstances must be taken into account, including the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and scale of the use as well as its frequency and regularity (para. 58)....     these 15 invoices are only billed to customers in Germany and as such invoices for three years for a low amount in one country are not sufficient to prove genuine use of the earlier mark.
Nevertheless on 27 February 2015, paying lip service   to Leno the Fifth Board of Appeal decided in RAPIDO  a case concerning goods and services related to lotteries, said:
The evidence submitted in the present case essentially covers France, which considering its geographical size and population density constitutes a substantial part of the European Union. The evidence, therefore, shows that the contested CTM was used in the territory of the European Union
One might have thought that the characteristics of the lottery market in a world of EUROMILLIONS  were such that a presence on it required a little more to sustain a Community Mark as opposed to a French national mark, but no.

The principle of  use relative to the market has brought in a de minimis standard by the back door (not a rule, you understand, a relative standard that takes into account all the circumstances).  This even applies in judging genuine use of national registrations. See Case C-141/13 Reber WALZERTRAUM from 17 July 2014. The case is in German but you can refer to the IPKAT report here.

Nike has added a interesting dimension in its heroic fight to register JUMPMAN in Europe. Its CTM succumbed in  Case T‑233/10 to an opposition based on earlier Spanish registration and was duly converted to national marks, at least in the UK and Benelux, and the same opponent raised an opposition based on an earlier community trade mark for JUMP which was subject to proof of use.

The shopping in Varna
In the UK in October 2014 Oliver Morris assessed the evidence and found it wanting to show genuine use on the market for shoes in the European Union. He applied Leno Merken  with the same aggressive verve as Mr Justice Hacon did later, and also considered Reber. The decision in O/451/14 is here. It was appealed to the Appointed Person and the hearing was on 21 July 2015. Rouse, who acted for the opponent at first instance, have provided an interim report here. The real decision is awaited.

Meanwhile, in Benelux, on a parallel case, where we must assume the evidence was pretty similar, the Benelux IPO decided exactly the same way on 12 August 2015

In both cases the decisions stopped at the proof of use stage and did not consider what would have happened if they had been wrong. I suppose there was no need with Case T‑233/10 lurking in the background.

Now did these two independent tribunals stretch Leno Merken for the benefit of a big brand owner or are their decisions correct. They deny genuine but small use in a shop in Varna, Bulgaria as an  insufficient presence on the European Union footwear market, which Mr Morris held was manifestly huge. He was supplied with a Euromonitor report, but he said its hugeness was self-evident. This leaves us a little in the dark as to when evidence may be required and when not. The Benelux decision does not refer to any evidence about the European footwear market.

OHIM's cancellation division on 30 June 2015 in the case of CECCONI'S had to consider the EU market for celebrity restaurants. The Decision in C000008943 held that one location in Mayfair was enough to sustain a CTM for "restaurant and bar services" but they revoked it for the broader category of "Services for providing food and drink; catering services.". In this case the characteristics of this esoteric market and a nice continuous stream of TRIPADVISOR reviews across the relevant period and from other Europeans,saved the validity of this CTM.

It would be interesting to have input on other cases if you have suffered any surprises.

Although consistency may not always be there in a Europe, which doesn't believe in precedent, it does seem that the selling spiel we were all encouraged to give that the CTM was validated by use in a single country is now wrong. OHIM has become extremely wealthy on the back of a misrepresentation.

Indeed if your client is a lifestyle business with a local footprint and no intentions to expand, the right advice may be to leave even the UK Trade Mark register alone. After all most fights start when a big brand notices and opposes a  startup. Of course, that leaves the lifestyle business relying on a section 11(3)  or Art 111 defence if someone else later registers the same or  a similar mark in the UK or OHIM respectively.

For other clients we now need to make a more careful choice before opting for the hitherto bargain CTM. In some cases it might be wise to surrender and convert a vulnerable CTM. What say you?

Wednesday, 19 August 2015

Affording Regulation

If you wish to object to your regulator, IPReg, increasing your practice fees, then by 7 September you need to email IPReg

Earlier this month you probably received an email about the 2016 business plan and budget. It contained a link to this page which includes a nice little letter from Mr Heap the chairman of our regulator, a draft business plan, draft budget and, significantly, a table showing the proposed increases in fees.

Now the proposed increases don't look much, but they do amount to 7% which in a time of 0% inflation is quite stonking. Due to the fact that everybody pays more than one fee the precise impact is going to vary from firm to firm.

I was surprised to see that attorneys who are retired or inactive are paying to remain on the registers £147 for one or £236 for two . I suspect they won't be for much longer. What is the purpose of being on a register if you are retired, so I suppose this means unemployed and looking for a job - so raising that fee is to encourage them into the unregulated world?

Stop Discrimination against Patent and Trade Mark Attornies

In 2014 I paid  as a solo practitioner with no employees £390 and next year they will want £459. If I could limit my practice to one or other of patents and trademarks, then I could make a saving. However, I'm not too sure why I am penalised for offering more comprehensive service to the consumer. This structure encourages over specialisation and should STOP

Amongst the more interesting things the draft  business plan promises is a policy on stale examinations. They've been promising this for a while (might even be a little stale itself) but I am not sure if it has anything to do with the notorious  CIPA biscuit pixies.

Under Communications they propose to meet with registrants at regular open meetings - which is the same as last year's plan but I can't recall any.

Another thing they intend to do is monitor the enterprise court small claims procedure which is intended to widen access to the lay applicant.  Lay applicants do not use regulated people, why am I funding this?

One thing that isn't there is any review of the Insurance sector. At present rule 17 requires any new entity requiring approval to use PAMIA. Isn't it about time they reviewed the market and approved at least one competitor?

While regulation is necessary it seems desirable that we should stop the cost of it escalating. The Chairman's letter acknowledges that mining into ABS structures costs money. This year perhaps their review of what they did will reveal that it had little regulatory benefit. If IPReg is really too small to be cost effective, it should be looking to merge. Put that in the business plan.

Monday, 10 August 2015

Are we UPP to speed on on Unified Patent Strategy

Patent applications filed at the EPO today could emerge on grant as Unitary Patents or European
High Tech Lemon Squeezing
Patents of Unitary Effect - abbreviated to UPP (which really stands for Unitary Patent Protection). So far most of the news on this exciting topic has concentrated on the preparations for the Unified Patent Court (UPC) and its procedure. UPC even has its own website and its news machine is very exciting and efficient. The date it all goes live could be in 2016.

My latest copy of the CIPA Journal -available to members using Safari or Internet Explorer here contains at page 59 an interesting article by Ellie Purnell reporting on the Manchester meeting which  encouraged us all to keep up-to-date. (If you read it you will understand what I mean when I say "I am squeezing her lemons").

We even know what the renewal fees of the UPP will be when one is eventually granted as this was agreed back in June. They are really very interesting. If you could get an UPP granted quickly you could save a bundle on awful EPO renewal fees on pending applications. Not until the 12th year does a UPP cost more to maintain than an application languishing before the EPO. This is a serious wake-up call to patent attorneys: we need to get patents granted or abandoned. I like their thinking.

Now I expect that all the big firms have been brainstorming their strategies for their clients and are able to advise on whether EPO applications or national applications are the right route on each individual case. However, solos might be a little bit less well positioned for brainstorming so I thought I'd look and see what resources were available to help clients and solo strategists.

The EPO has some useful FAQ here but they are not in the business of offering strategic advice.

The companies filing their priority applications now, the UPP is something they need to take into account, especially if they think they might want national patents rather than put all their eggs in one basket at the unitary patent court. Judging by the is the concern amongst big business for opting out their classical European patents and their distress about the possibility of paying €80 for each opted out patent family, we must expect that industrial patent departments are well abreast of the issues, so are they abandoning the EPO in droves?

The real decision time if you are on the EPO route is after grant. At that stage you have to choose whether to go for a UPP (patent with unitary effect) or national patents or a combination. Combination is necessary because the UPP does not cover all EPO states and will never do so since some of them like Switzerland are outside the European Union. Therefore, you may think it's safe to carry on with the standard PCT EPO route, but is it? If the EPO is going to stall applications with an adverse search report, sticking with the EPO could be an expensive option. Maybe long pendencies are quite attractive to an applicant and therefore choosing our now under-resourced national patent offices for examination might be an interesting option for keeping hopeless patent hopes alive and your competitors wondering.

What do you think. Please draw attention to any relevant articles?

Tuesday, 28 July 2015

Access to Justice Pro-Bono- the Beavis Way

A few days ago (21 -23 July 2015) three days of Supreme Court time were occupied discussing
whether an £85 fine for overstaying in a car park was an unenforceable penalty (which is an important point for all who enter into contracts) or merely unfair under the Unfair Terms in Consumer Contracts Regulations 1999/2083. Those with enough broadband in time can listen to the full argument here.

The Law Society Gazette reported the case here  and it has attracted a great deal of attention from those who comment. Many are concerned about parking, but some are interested in how one deals with unconscionable bargains in the wider world.  The earlier article from the Gazette is here. This discusses the legal issues in more detail. For the answers we will need to wait for the judgement. Even patent and trademark agents are aware of some obvious unconscionable bargains amongst the scam invoices and renewal services offered to their clients unsolicited. Such scammers, though, seldom try to enforce their contracts in the courts like parking contractors do.

Funding the Case

 Mr Beavis, who is said by The Independent to be the owner of the Happy Haddock in Billericay  was fortunate in being able to raise money for an issue that sparked the public interest of motorists at least, by means of a crowd funding appeal. He is not at risk of costs because this was only a "small claim" and he has paid the £85 penalty. Parking operators business models are however in jeopardy. Many other extortionate contracts might also suffer if the Supreme Court decides in favour of Mr Beavis. It should be noted that neither the original judge nor the Court of Appeal were sympathetic to his plight. Even if the Supreme Court decides £85 wasn't unconscionable, it may set guidelines that will keep figures more confined in future contracts.

What if your intellectual property problem does not capture the public imagination like Mr Beavis's car park fine? How will you will obtain economic access to justice if you feel you can't afford to defend your IP or defend a claim that you are guilty of IP infringement? You can become a litigant in person. However, a company does need to be represented. The Chartered Institute of Patent Attorneys now has a working group on pro bono services and if you are interested watch out for an announcement in the CIPA Journal. Meanwhile, your best bet is to work on a pitch for why your case deserves the unpaid help of a professional.

Thursday, 23 July 2015

Money Money Money : Court Fees to be Enhanced Again

Are you still reeling from the rise in English civil court fees to £10,000 in March for unquantified damages claims. Flushed with election success, the fees are to be ENHANCED again. For full details you can see the consultation on the Justice site here
"Bundesarchiv B 145 Bild-F080597-0002, Bundesverfassungsgericht, Richterin Karin GraƟhof" by Bundesarchiv, B 145 Bild-F080597-0002 / Reineke, Engelbert / CC-BY-SA. Licensed under CC BY-SA 3.0 de via Wikimedia Commons.

The fees for the Unified Patent Court have also been consulted on here . Responses on that consultation are due to be sent to the secretariat by 31 July you are running out of time if you want to comment. Details of how to comment are here . Since the UPC Has to cover the costs of setting up an entirely new pan-European court, it wasn't surprising to find that they wanted to set pretty high fees. We are expecting a quality and responsive service. We are expecting to be able to see documents and to be able to monitor cases online in a 21st-century way unlike our national court systems. All this is expensive. It may be so expensive that modest businesses with modest disputes cannot even begin to think about using it. This is something of a shame as the Intellectual Property Enterprise Court in the United Kingdom has shown that there are modest patent disputes that need access to justice. Many more are I understand litigated in Germany. Since it will clearly take some time for big Pharma to get comfortable with the UPC, it seemed to me that it would have been quite smart for them to take on some of these more modest cases to get the system moving efficiently. I'm suggesting that €11,000 is too much for a modest business on day 1 to start their claim - perhaps not a great deal too much.
However a €20,000 fee for a counterclaim for revocation is really unfair. It means any modestly sized defendant is denied what is usually their best defence. I went away from that consultation reconciled to the fact that I wouldn't be seeing any UPC work at all in my lifetime.

Now we come to the enhanced fees that are likely to be applicable in the Intellectual Property Enterprise Court.  On this occasion, the proposal is to lift the maximum fee from £10,000-£20,000. If there are any Russian oligarchs left wishing to litigate in London, then it's all well and good that they should pay. What I would like to see is a proper fee established for unquantified damages claims. Most intellectual property actions cannot be valued readily on day one. We need to recognise that in the fee structure and provide for an initial fee and a damages dependent court fee that is paid at the end of the day.

It would also be nice if the appropriate "other remedies" fee applicable in IPEC could be definitively set. At present whether you are charged the High Court rate or the County Court rate is purely at the whim of the counter attendant. The proposal is that those fees rise to £528 and £308 respectively. In my opinion that is actually a tad too low in IP cases where no other financial remedy is sought (but not too low if you are also paying £20,000 for unquantified damages). Given that in a typical trademark case the costs of pursuing damages are likely to be disproportionately greater than the damages ordered in cases which have been started early, not making a money claim is pragmatic and at present that is something of a bargain.

Application fees are also set to rise. The proposal is that £50 becomes 100 for uncontested applications and £155 becomes £255 if contested. The consultation document says that they do not anticipate that the increases will have any significant impact on demand. This is, of course, looking at civil proceedings across the board. In intellectual property cases, it might be a good idea to decrease the demand for general applications.

Hopefully the CIPA Litigation Committee and the Law Society IP committee  will be looking at preparing a response to draw attention to the IPEC issues.

Thursday, 16 July 2015

UK Patent Office goes Digital View (Beta)

The UK Intellectual property office is going digital and is running a trial of its new UK IPO View Patent Cases and Documents services - its IPSUM for unpublished and pending cases with a more descriptive branding.

Obviously, as soon as I heard about it, I had to beg to be in the trial. Apparently all them big firms have been trialling it for a while so I was expecting it to be super already.

You need a EPO smart card to use the system and the IPO have to register that on their system. This is good. It gives you a nice sense of security because after all you are going to be seeing details over the web of unpublished patent applications. Next they send you an email with a one-time password and a snail mail letter with the user name. You trot off to and attempt the intelligence test of resetting your password. Being of limited intelligence, I failed at my first attempt but seem to have succeeded at the second and was rewarded with a nice list of all my pending UK patent applications on the crisp white background that we are now accustomed to seeing on new .gov applications. It doesn't actually say that there are 20 on each page but that's how many there are. It's nice to know because it helps to reconcile with your home database. If you haven't paid the application fee, the case isn't listed. The default order is the UK serial number so your PCT national phases come in unexpected places.

There are 2 hyperlinks on each record. The one connected to the number shows you a little register entry and the one on the left shows you the documents the IPO have generated. Yours aren't there as they are in IPSUM. You might not notice but lurking on all the screens under the title in that big black bar is a menu That allows you to switch between the case list, recent documents and notifications. The notifications option is simply to allow you to demand an email every time they supply a new document. I suggest you do unless you have someone to check it every day.

It seems that one of my cases in the case list doesn't have a reference. I can't add one in this interface.

I was hoping that my search reports would include a link to the documents in Espacenet, but they don't. When you look at the document it is just a nice crisp PDF. This is nice as now I don't have to scan the paper that comes into the office so I am a happy bunny.

The interface is simple, straightforward and easy to work with. You don't get a manual. You don't need one.

I have some issues with the statuses in the case list. They don't quite seem to reconcile with my database, but I suspect that that is partly because there is a limited number of choices.

There are no communication facilities associated with this application. It is simply passive and a way of delivering documents from the IPO to your desk without using the Royal Mail.

Presumably cases disappear on grant which might be a little disconcerting. I shall watch out to see what happens.

One of the problems I can foresee for the IPO is deciding which of the feedback suggestions they get from agents to implement. Hopefully we can all agree that the document should include the citations. Is there a CIPA committee looking at this. What are they saying on our behalf.  For agents working solo this is a very useful tool and hopefully all of you who want it will be able to get it.

Friday, 10 July 2015

Seeing thing that aren't there: all part of a lawyer's duty

Luffeorm Ltd v Kitsons LLP, a 2 July decision of Jonathan Acton Davis QC sitting in the Queens Bench Division, Bristol, throws light on every lawyer's nightmare -- getting into trouble for not spotting something that isn't there.

Highwayman's Haunt
In this case, the client was a company run by a couple who were, as the Lawtel note puts it, "experienced in the hospitality industry". The company was buying a pub, the Highwayman's Haunt, from its owner, the pub's chef. After the pub was sold, the chef took over a pub in a nearby village (the Claycutter's Arms, just three miles down the road) where, attracted by the magnetic force of his goodwill, a significant proportion of the old pub's clientele took its business. The couple's takings were far lower than predicted and they sold the business at a substantial loss. Said the couple, their solicitor was negligent because he had not spotted the fact that the contract to purchase their pub did not contain a non-compete covenant that would have protected them from the damage caused by the old chef opening up so close by.

Not only had the solicitor not spotted the absence of a non-compete covenant, but might not even have had the time to do so since the couple were in a great rush to sign up and get the pub in time to cash in on the trading opportunities represented by Easter, Mothers' Day and the May bank holidays.

Claycutter's Arms
Yes, said the judge, the solicitor had been negligent. While he was not under a duty to advise on the commercial wisdom of a transaction, particularly where the client was an experienced business person (as was the case here), that principle was not to be taken too far. If a solicitor becomes aware of a potential risk to the client, he is obliged to inform the client of that risk. In this instance, while it wasn't his job to warn the couple of the commercial risks inherent in the transaction -- which this blogger suspects they would have known anyway -- he should have spotted the absence of any covenant in restraint of competition and drawn that absence to the couple's attention. Failure to do so was both negligence and a breach of contract.

That was the bad news. After that, things took a turn for the better. Said the judge, since the couple were determined to proceed with the transaction as quickly as possible and were convinced that they would make a success of the business, taking no advice from any professional valuer of either the business or the premises before making an offer, it was clear that even if the solicitor had drawn to their attention the absence of any restraint of trade covenant, they would still have gone ahead with the acquisition. He added that they would neither have tried to negotiate for a covenant nor withdrawn from the purchase. In other words, his negligence had not caused their loss.

This blogger is sure that readers need no reminder that we are all -- lawyers and clients alike -- working to a great extent under the pressures of time. Some of these pressures are imposed from outside, such as the duty to file responses in trade mark and patent office actions and in litigation, attending to tax returns, paying utility bills, renewing insurance policies and the like.  Other pressures are of our own or our clients' making: here the pressure was caused by the client's desire to take over a business in time to cash in on a lucrative trading period. Sometimes it can be the need to clear one's desk ahead of a long-planned holiday (or the need to get something done before a colleague or secretary goes away). Either way, pressure of time is bound to fall hardest on small and sole practices, where there is little or no assistance or margin of error.