Thursday, 30 December 2010

A message from the Editor

I'd like to thank the journal's contributors for the articles, Current Intelligence notes and other contributions which they have made this year. Since so many JIPLP authors are drawn from the ranks of its readers, the journal has an ideal opportunity to let its contents reflect its readers' prime interests and concerns within the very wide field which is intellectual property today. This in turn is reflected in the journal's buoyant level of subscriptions and high rate of renewals -- no mean feat in a period which, if no longer recessionary, is still only in the early stages of recovery.

I also have some cautionary words. Plagiarism, and its unwelcome cousin -- making use of other people's work without due acknowledgement -- are practices which are endemic in a world which fails to respect intellectual property. Our readers are entitled to be spared from their worst effects, but no journal, not even JIPLP, enjoys an automatic immunity from the unauthorised lifting of text and content from their original authors.

JIPLP affirms its commitment to take a firm line against plagiarism and failure to attribute sources. If any author or reader suspects that he or she is the victim of either of these practices, please email me immediately with as many details as are available, so that steps can be taken to attribute uncited sources and to acknowledge the true authorship of text and tables which have been copied without permission.  Any author who perpetrates these practices will be unwelcome within the JIPLP community and can be assured that this journal will not want to publish further content from a tainted source.

Monday, 27 December 2010

A new issue -- and a guest editorial on IP and the environment

Another year, another journal cover colour. The livery chosen for JIPLP's cover in 2011 is a handsome purple, depicted on the right.  While the January 2011 issue is available online in full to subscribers, its contents are available to everyone and you can check them here.

The editorial for this issue is a guest piece, written by Editorial Board member and Scottish solicitor Gill Grassie (Maclay, Murray & Spens, LLP).  It reads like this:
"Pooling together: IP as hero or villain?

Many stimuli exist for developing sustainable new clean green energy resources and the technologies they involve. Traditional fossil fuels are running out and nuclear is often viewed as unsafe. Crucially, global warming has become an accepted priority for the world to tackle. As the 2012 Kyoto Protocol deadline for reducing greenhouse gas emissions approaches, the focus increases on developing clean, sustainable, energy resources. In Scotland, the First Minister has set a target of 80 per cent electricity generation from renewables by 2020. These factors combine to create a perfect storm in which the renewables industry has an opportunity to take centre stage as the realistic solution to the imminent global crisis.

Can the IP regime play a key role in delivering these ambitious goals, thus becoming a world ‘saviour’, or will it be portrayed as the villain? Can we balance exploiting an organization's technology for monetary gain using the traditional IP system with removing barriers to innovation to establish viable green energy resources? IPRs (particularly patents) are often criticized as inhibiting innovation and as being morally reprehensible. Is this the chance to shake these perceptions off?

At a relatively early stage of the emerging renewables market where some basic technologies are already old, investors and businesses want to protect their investments/technologies by securing patent protection, hence the sharp rise in patent filings in various different green energy sectors since the late 90s (wind energy patent applications in 2007 were around 1400 compared to about 100 in 1995; carbon capture energy technology patent filings have trebled since 2000). Stronger government policies in key markets and growth in private investment have encouraged this rise.

Patent prosecution can take a long time. To accelerate the process, the UK and the USA have introduced a fast-track process to examine green technology patents with a claimed turnaround of 12 months. Whether this timescale is achieved is another question—and patent protection is not enough on its own.

Other initiatives currently under trial include the introduction of green patent databases which collate all so-called ‘green’ patents into one database. This will consist of a fast-tracked patents application process, creating a general pool as opposed to collating specialized sectoral technology (wind, tide, hydro, carbon capture, photovoltaics, biomass, and their subsets). These are all steps in the right direction, but could IP mechanisms play a more prominent role in accelerating these technologies?

If ‘The whole is greater than the sum of its parts’, why not cooperate on R&D? The financial rewards may not be as large but the sharing of knowledge may make the set targets more quickly achievable. One mechanism of potential benefit is patent pooling to create a commercial vehicle facilitating licensing and cross-licensing of the technologies. This tried and tested mechanism has been at the forefront of the telecommunications sector where 3G technology has been pooled successfully and 3G networks are now standard across the industry. Other examples include the pooling of DVD patents among industry players including Samsung, Hitachi, and Panasonic. Perhaps one reason why patent pools have succeeded is that they create a win-win situation in the process of patenting technology and then marketing it. Even patent owners who lack the means to exploit their patent benefit through the licensing of their patented technology to those able to bring it to market; potential licensees benefit from greater time- and cost-efficient licensing; and all parties in the pool have access to the latest technology which can springboard speedier innovation, in turn conferring benefits on society as a whole.

Patent pooling is not an alien concept to ‘green’ industries. In 2008, IBM co-founded the Eco-Patent Commons, a non-commercial pool, administered by the World Business Council for Sustainable Development. Companies donate relevant patents to the pool, which anyone can access. Each patent donor agrees to take no action against users. Pools on this model might be set up specifically for particular types of renewable energy technology.

On the downside, pools might reduce competition both between the parties and their products, stifling innovation rather than encouraging it. Where there is a global drive to develop clean, sustainable, energy resources, governments could incentivize participating organizations. This might remedy worries of innovation slowdown. Concerns regarding reduced competition could be addressed in each pool's headline terms.

Since renewable energy will be a key market for years to come, traders in this area must be able to exploit their technology while contributing to society through further innovation. To achieve that (and hero status?) the challenge for the IP regime and its users is that both must be innovative".

Tuesday, 21 December 2010

An ‘active ingredient’ of a drug must be present when the drug is administered

Author: Bart A. Gerstenblith (Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Washington, DC)

PhotoCure ASA v Kappos, 603 F.3d 1372 (Fed. Cir. 2010), District Court, Eastern District of Virginia

Journal of Intellectual Property Law & Practice (2010) doi: 10.1093/jiplp/jpq188, first published online on 21 December 2010

The term ‘product’ in 35 USC §156(a) means the active ingredient that is present in a drug when administered, not necessarily the ‘active moiety’ of the drug.

Legal context

This appeal from a summary judgment decision of the US District Court for the Eastern District of Virginia concerns the interpretation of the patent term extension provisions of the Drug Price Competition and Patent Term Restoration Act 1984 (the ‘Hatch-Waxman Act’). These provisions are codified at 35 USC §156. In particular, this decision addresses the statutory meaning of the terms ‘product’ and ‘active ingredient’ in section 156, and whether ‘active ingredient’ is synonymous with ‘active moiety’. It also addresses the scope of deference to which an agency that is charged with administering a statute is entitled in these circumstances.

Facts

MAL hydrochloride and ALA hydrochloride
Methyl aminolevulinate hydrochloride (MAL hydrochloride) is the active ingredient in the drug Metvixia, which is used in photochemotherapy or photodynamic therapy to treat actinic keratoses—precancerous cell growths on the skin. When Metvixia is applied to the skin, MAL hydrochloride concentrates in the cells to be treated. The cells use MAL hydrochloride to form an excess amount of protoporphyrin IX (Pp), a naturally-occurring light sensitive compound. Pp is activated on exposure to light, and a chemical reaction ensues that kills the precancerous cells.

MAL Hydrochloride was patented as a new chemical compound in US Patent No. 6,034,267 (the '267 patent). Its patentability was based on its improved therapeutic properties as compared with aminolevulinic acid hydrochloride (‘ALA hydrochloride’), a known compound. ALA hydrochloride was previously reviewed and approved by the US Food and Drug Administration (FDA) for the same therapeutic uses as MAL hydrochloride. MAL is the methyl ester of ALA. The '267 patent describes the biological and physiological advantages of the MAL product over the ALA product, including that MAL is better able to penetrate skin and other tissues, is a better enhancer of Pp production than ALA, and provides improved selectivity for the target tissue to be treated.

FDA approval and PTO denial of patent term extension
Metvixia was considered a ‘new drug’ by the FDA and required full review and approval prior to its commercial marketing and use. Following FDA approval, PhotoCure applied for a patent term extension of the '267 patent under the Hatch-Waxman Act. The US Patent and Trademark Office (PTO) consulted with the FDA. The FDA advised the PTO that MAL hydrochloride is an ester of the previously FDA-approved ALA hydrochloride, and expressed its view that the requirements of 35 USC §156(a)(5)(A) were not met.

The PTO subsequently denied PhotoCure's requested term extension, stating that the ‘active ingredient’ in section 156(f)(2) does not mean the product that was approved by the FDA; rather, it means the ‘active moiety’ of that product. The PTO's view was based on its conclusion that MAL hydrochloride is the ‘same product’ as ALA hydrochloride because the ‘underlying molecule’ of MAL is ALA, and that ‘ALA is simply formulated differently in the two different drugs’. Accordingly, since the same ‘product’ was previously approved by the FDA, the subsequent approval of Metvixia was not the first commercial marketing or use of that ‘product’.

The District Court decision
The district court disagreed with the PTO. In particular, the court considered (1) the separate chemical composition, (2) the separate patentability, and (3) the separate FDA approval of the drugs. The district court found that MAL hydrochloride, not ALA hydrochloride, is the active ingredient in Metvixia® under section 156(f)(2)(A). Accordingly, the statutory requirements for patent term extension were satisfied because the MAL hydrochloride product was subjected to a full FDA regulatory review prior to its commercial marketing and use, under section 156(a)(4), and this FDA review permitted the first commercial marketing and use of the MAL hydrochloride product, under section 156(a)(5)(A). The district court thus held that the PTO's ruling was ‘not in accordance with law’, and that the '267 patent on MAL hydrochloride was subject to term extension.

Analysis

The Director of the PTO appealed to the Federal Circuit, arguing that the district court incorrectly interpreted the statutory terms ‘drug product’ and ‘active ingredient’. The PTO asserted that (1) the statutory term ‘drug product’ means ‘active ingredient’, and ‘active ingredient’ means the ‘active moiety’ of the drug—the part responsible for the pharmacological properties—not the product that is actually present in the approved drug; and (2) that the agency's interpretation is entitled to deference.

The Federal Circuit rejected the PTO's arguments. Initially, it noted that the Patent Term Extension statute was enacted to restore a portion of the patent life lost during the lengthy procedures associated with FDA's regulatory review in order to preserve the economic incentive for development of new therapeutic products. It then reiterated its holding in Glaxo Operations UK, Ltd. v Quigg, 894 F.2d 392, 393 (Fed. Cir. 1990), that ‘product’ in section 156(a) means the product that is present in the drug for which federal approval was obtained. As explained by the district court, and repeated by the Federal Circuit, a compound can only qualify as the active ingredient of a drug if that compound itself is present in the drug when administered (see Hoechst-Roussel Pharms., Inc. v Lehman, 109 F.3d 756, 759 n.3 (Fed. Cir. 1997): ‘For purposes of patent term extension, this active ingredient must be present in the drug product when administered’). As correctly interpreted, the active ingredient of Metvixia was MAL hydrochloride, not ALA hydrochloride, since ALA was not present in the drug when administered. The Federal Circuit also noted that even under the PTO's incorrect statutory interpretation, the approval of Metvixia would meet the criteria for patent term extension because it was not disputed that (1) the pharmacological properties of MAL differ from those of ALA (as explained by the '267 patent); and (2) MAL hydrochloride is a different chemical compound from ALA hydrochloride. Those differences thus warranted separate patenting and separate regulatory approval even though their chemical structures are similar. Accordingly, the Federal Circuit held that they are different ‘products’ with different ‘active ingredients’ as those terms are used in section 156.

The Federal Circuit also addressed the PTO's argument that Pfizer Inc. v Dr. Reddy's Laboratories, Ltd., 359 F.3d 1361 (Fed. Cir. 2004), supported the PTO's statutory interpretation of ‘active ingredient’ as ‘active moiety’. Specifically, it noted that Pfizer did not concern the Glaxo holding that the active ingredient must be present in the drug product as administered. Rather, the issue in Pfizer was whether infringement of an extended patent on the drug amlodipine was avoided by changing the salt form of amlodipine. Also, Pfizer did not hold that an extension is not available when an existing product is substantively changed in a way that produces a new and separately patentable product having improved properties and requiring full FDA approval before commercial marketing and use. Rather, the disputed product in Pfizer was a salt that was included in Pfizer's patent claims and for which Pfizer had provided data to the FDA. Thus, according to the Court, its previous decision in Pfizer did not change the law of section 156 and did not concern a different, separately patented product requiring full regulatory approval.

Finally, the Court found that the PTO's erroneous statutory interpretation was not entitled to deference under Skidmore v Swift & Co., 323 US 134 (1944), or Chevron, USA Inc. v Natural Resources Defense Council, Inc., 467 US 837 (1984). Chevron did not apply because the statute is unambiguous and Skidmore deference was not warranted because the PTO's interpretation was neither persuasive nor consistent. Thus, even if some deference were owed to the PTO's interpretation, neither Chevron nor Skidmore permits a court to defer to an incorrect agency interpretation.

In sum, the Federal Circuit found that the PTO's statutory interpretation, which would have excluded MAL hydrochloride from patent term extension, was contrary to the statutory purpose because MAL hydrochloride is the active ingredient of a new and improved drug product. Accordingly, it affirmed the holding of the district court that the '267 patent on MAL hydrochloride is subject to term extension.


Practical significance

The Federal Circuit's decision endorses the meanings of the terms ‘product’ and ‘active ingredient’ as discussed by the Court in Glaxo. It also clarifies how its decision in Pfizer, which many (including the district court) felt was in conflict with Glaxo, should be understood going forward. The Court seemingly took a narrow view of its holding in Pfizer, by focusing heavily on several key facts in that case that were distinct from those presented here. Even with this narrowing, however, it is hard to rectify Pfizer's repeated endorsement of the term ‘active ingredient’ meaning ‘active moiety’ (see Pfizer, 359 F.3d at 1366, quoting the FDA's statutory interpretation of ‘active ingredient’ as ‘active moiety’ and the FDA's definition of ‘active moiety’), with the results of Glaxo and those reached here. As pointed out by PhotoCure's appellate brief, the result in Pfizer may be more reasonably understood as an issue of fairness rather than statutory interpretation.

In considering whether FDA approval of a new drug warrants patent term extension, this decision clearly places importance on (1) whether the new drug and an existing drug share similar properties, (2) whether the FDA required a full regulatory review of the new drug, (3) whether the PTO considered the new drug separately patentable, and (4) whether the active ingredient that is actually present in the new drug when administered is also present in a previously approved drug when administered.

Monday, 20 December 2010

Court of Justice rules on scope of fair compensation for private copying exceptions

Authors: Ben Allgrove, Michael Hart and Victoria Dockrell (Baker & McKenzie)

Padawan SL v Sociedad General de Authores y Editores de España (SGAE) Case C-467/08, Court of Justice of the European Union, 21 October 2010

Journal of Intellectual Property Law & Practice (2010), doi: 10.1093/jiplp/jpq189, first published online on 17 December 2010

The Court of Justice of the European Union has ruled that the concept of ‘fair compensation for copyright levies must be interpreted uniformly in all Member States which have a private copying exception and must be calculated on the basis of the criterion of the harm, if any, caused to authors of protected works by that exception, so levies should not be applied to equipment, devices and media not made available to private users and clearly reserved for uses other than private copying’.

Legal context

Under Article 2 of Directive 2001/29 (the Information Society Directive), authors, producers and performers have an exclusive right to control the reproduction of their works. However, Article 5(2)(b) providesthat Member States are entitled to provide for a private copying exception to infringement where the copying is ‘made by a natural person for private use and for ends that are neither directly nor indirectly commercial’ provided that the rightsholders obtain ‘fair compensation’ for that use to the extent it is not restricted by technological measures. Such an exception to infringement has been implemented in the vast majority of the 27 EU Member States, with only a few, including the UK and Ireland, electing not to do so. The EU Member States with such exceptions have provided for the required ‘fair compensation’ by giving statutory backing to copyright levy regimes which apply a levy to various forms of reproductive media and/or equipment used for such activities. The types of equipment and media to which such levies are applied and the rates of such levies vary considerably between the Member States.

Facts

SGAE, a Spanish collecting society, applied a levy to the sale of all digital reproductive devices, equipment and media (the ‘Equipment’), payable by retailers, manufacturers and importers into Spain of this Equipment. Under this system Padawan, who markets such Equipment including CD-R, CD-RW, DVD-R, and MP3 devices, was required to pay a levy on its products. Padawan refused to pay the demanded levy claiming that the indiscriminate application of the levy to its products was unfair given that the majority of its customers used the Equipment in question for professional and commercial use, and thus did not fall under or benefit from the private copying exception in Spanish law. Having failed at first instance, Padawan appealed and certain questions were referred to the Court of Justice for the European Union (CJEU), which ruled as follows:
‘1. Fair compensation’ is an EU concept which must be interpreted in a uniform manner across all Member States, even though Member States have the right to choose the system of collection.
2. Whatever the system of fair compensation implemented by a Member State, it must ensure a fair balance is struck between rights holders and those liable to pay the compensation. Fair balance means that fair compensation is calculated on the basis of any harm caused to authors through the private copying of their works. Where Equipment capable of copying is supplied to natural persons as private users, the fact of this harm will be presumed.
3. There must be a link between the application of a levy and the presumed use of the equipment or media on which it is levied.
4. The indiscriminate application of a levy to undertakings and professional persons who clearly purchase digital reproduction devices and media for purposes other than private copying is not compatible with the concept of ‘fair compensation’ in the Directive.
5. The decision as to whether or not the specific Spanish levy in question has been imposed indiscriminately by SGAE on all digital reproduction equipment, devices and media is a matter for the referring court'.
Analysis

This decision has attracted considerable comment in the market from both sides of the debate on copyright levies. Rights holders are heralding the ruling as confirmation of the legitimacy of levy regimes. Véronique Desbrosses, Secretary General of the European Grouping of Societies of Authors and Composers saying: ‘What is very positive is that the court clearly gave support to the compensation schemes that exist in most member states.’ On the other side Bridget Cosgrave, Director-General of DIGITALEUROPE, an industry group for consumer electronics manufacturers, says: ‘The most important result to come out of this decision is that lawmakers recognise the unfair and untransparent methods used by collecting societies when calculating and claiming copyright levies. The judgment presents an opportune moment to address the other inadequacies in the current regime.’ Can these views be reconciled?

The decision reaches a number of conclusions which challenge the existing approach to copyright levies. The CJEU's clear statement that the concept of ‘fair compensation’ is an autonomous EU law concept which must be interpreted uniformly is significant. Copyright levies vary widely across Europe without any clear uniform approach being applied across Member States. The CJEU decision has laid down a marker that a copyright levy can only be fair compensation if it is applied uniformly in all Member States. This raises the prospect of future challenges to levy regimes where there are material inconsistencies between Member States.

More significantly, the CJEU's confirmation that fair compensation must be linked to the harm, if any, suffered by the rightholder arising from the private copying exception sends the message that such harm must be demonstrated and related to both the application and rate of the levy. The CJEU has therefore opened the door for those subject to copyright levies to demand that the collecting society identify and quantify the harm for which the levy seeks to compensate. It clarifies that levies are not a licence but a means of compensation for demonstrable harm and also seems to preclude a restitutionary justification for copyright levies. If that is the case, does a rights holder suffer any harm if a lawful purchaser of a CD format shifts the tracks on that CD to an MP3 player? Is there really a lost sale? Up until 2008, German copyright levies applied a different tariff on printers depending on their speed and whether they printed in colour or black and white. These sort of criteria for levies would seem to have no basis in a regime rooted in addressing harm to the rights holder.

In contrast, rights holders will welcome the CJEU's ruling that there is, in effect, a presumption of harm, though that still leaves open the question as to how one quantifies that harm. Nor does the CJEU tell us whether or not that presumption is rebuttable.

Manufacturers will also welcome the CJEU's ruling that levies are not fair if they are applied indiscriminately. In this case, the CJEU left it to the referring court to decide if Padawan's sales of media to professional users were sales to users who would not benefit from the private use exception in Spanish law. If so, then the levy would be indiscriminate and contrary to European law. This ruling offers opportunities for pushback where media is primarily targeted at business customers.

The CJEU has not clarified the important threshold question in this area. It says that, to justify a levy as fair, a collecting society needs to show that the media/device is capable for being used for private copying: ‘It follows that the fact that that equipment or devices are able to make copies is sufficient in itself to justify the application of the private copying levy, provided that the equipment or devices have been made available to natural persons as private users’ (56). But it later qualifies this low threshold by saying that levies are not justified where devices/media are ‘clearly reserved for uses other than private copying’ (59). This takes us no further towards answering the question of where the line between these two positions is.

The CJEU's analysis of the threshold question is more liberal than the approach previously taken by Member State courts in this area, in particular in Germany. For example, in 2007 it was held in Germany that certain levies could only apply to a single function HP printer where that printer was used in conjunction with a PC and a scanner in a similar way to a traditional photocopier. In doing so the standard being applied was a higher one that merely that the device in question was capable of being used for copying, which the printer clearly was.

Practical significance

While this decision will not entirely satisfy either side of the debate, collecting societies may be more concerned about it; the ruling is likely to embolden those who are asked to pay levies to mount challenges which themselves might ultimately have to be resolved by the CJEU. In particular, further challenges to the application of levies to equipment or media clearly not used for private copying are likely as the CJEU has clearly ruled that such levies are not justifiable. One can expect more heated negotiations with companies with mixed B2C and B2B models.

This also raises the interesting question as to whether those companies that have paid levies on such products are entitled to claim back payments which have been made under what is, in effect, a mistake of law. Given that it is estimated that the consumer electronics industry alone paid some €2bn in levies in 2009, there is a significant enough amount of money involved for people to be taking a close look at this.

SGAE v Padawan is also a precursor to another CJEU reference, Stichting de Thuiskopie v Mijndert van der Lee and Others (Case C-462/09). In that case the CJEU will consider whether both Dutch and German levies are payable when a Dutch online retailer sells products into Germany. If the answer to that question is no, then positioning of services for copyright levy purposes will become a major strategic decision for businesses.

It currently appears that it will be the CJEU rather than the Commission which will lead the way to clarification of the confusion and serious lack of harmonization that exists in the copyright levy world. Previous considerations of intervention by the Commission have not proceeded. Indeed, it has stated that levies will not form part of the framework directive on collective rights management on which it is currently working (expected March/April 2011). This decision seems to indicate that the CJEU is willing to rise to this challenge and its future decisions should be watched with great interest.

Thursday, 16 December 2010

Holy Smokes! British American Tobacco defeats trade mark challenge in the Commonwealth Caribbean

Author: Eddy D. Ventose (Faculty of Law, Cave Hill Campus, University of the West Indies, Barbados)

Philip Morris Products S.A. v British American Tobacco (Brands) Limited, Civil Appeal No. 1 of 2009, In the Matter of the Trade Marks Act, Cap 257 Laws of Belize, Revised Edition 2000

Journal of Intellectual Property Law & Practice (2010), doi: 10.1093/jiplp/jpq185, First published online 16 December 2010

Philip Morris (PM) lost its challenge in the Supreme Court of Belize to the application for registration by British American Tobacco (BAT) in Belize of its cigarette label EMBASSY as a trade mark under the Trade Marks Act, Cap 257, Laws of Belize (BTMA).

Legal context

The first question for the Supreme Court of Belize was whether the MARLBORO trade mark owned by PM was similar to BAT's EMBASSY trade mark, which was being registered for goods identical or similar to those in respect of which MARLBORO was protected, and there existed a likelihood of confusion on the part of the public, which included a likelihood of association with the MARLBORO trade mark, contrary to section 37(2)(b) BTMA (section 5(2) of the UK Trade Marks Act, 1994 (TMA)/Article 4(1)(b) of the Trade Mark Directive 1998. The second question was whether the MARLBORO trademark was a mark with a reputation which, by section 61 BTMA, was protected under Article 6 bis of the Paris Convention for the Protection of Industrial Property. A third question considered was whether MARLBORO was protected under section 37(3) BTMA, which provides that a trade mark which is (a) identical or similar to an earlier trade mark and (b) is to be registered for goods and services which are not similar to those for which the earlier mark is protected, shall not be registered if, or to the extent that, the earlier trade mark has a reputation in Belize and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier mark (see section 5(3) TMA and Article 4(4)(a) Directive).

Facts and analysis

BAT applied to the Belize Intellectual Property Office (BIPO) for registration of its cigarette label EMBASSY as a trade mark. This was opposed by PM, who argued that the EMBASSY trade mark was substantially identical to or deceptively similar to its registered trade mark and the goods in respect of which the BAT application was made were identical or similar to those for which its MARLBORO mark was protected. PM also argued that its mark had acquired a reputation in Belize and that the use of the EMBASSY trade mark was confusingly similar because a similar design to its MARLBORO mark appeared at the bottom of the BAT mark. BAT claimed that its trade mark was not identical with or similar to PM's mark and as such was not likely to deceive or cause confusion in Belize.

Notwithstanding its concession that the MARLBORO mark might have acquired a reputation in Belize, BAT argued that both marks have co-existed peacefully in many markets around the world. The Registrar rejected the opposition on the basis that, while the goods were identical, the marks were not similar and there was thus no likelihood of confusion. PM appealed to the Supreme Court on the basis that, having accepted that PM's mark was a well-known mark under the Paris Convention, the Registrar should have considered the legal implications of that added protection which arose by reason of section 37(3) BTMA and section 61(2) BTMA (which incorporated Paris Convention protection for marks with a reputation).

The decision


Chief Justice Conteh accepted that, given the finding of the Registrar that the goods of the parties, such as cigarettes and cigars, were identical, there might be no need for the Registrar to refer to section 37(3) BTMA which dealt with identical or similar marks on dissimilar goods and services. He pointed out that ‘this was a limited view by the Registrar, given the admitted reputation of Philip Morris's trade mark. He ought to have considered sub-section (3) of the Act’. I am uncertain why this was necessary: a finding that goods are identical precludes examination of section 37(3) BTMA, which refers to dissimilar goods only. Conteh CJ continued that the Registrar should have taken into account the distinctive character of the MARLBORO trade mark and its admitted reputation when determining whether the similarity or identity between PM's goods (cigarettes etc) in respect of its earlier trade mark and those goods covered by BAT's (cigarettes) was sufficient to give rise to a likelihood of confusion. This is startling since the Registrar referred to Case C-251/95 Sabel BV v Puma AG for the view that in assessing the similarity of trade marks, the average consumer usually regarded a trade mark as a whole and does not conduct a detailed analysis of it; in conducting an assessment of the visual, aural and conceptual similarities of the trade marks, reference must be made to the overall impressions created by the trade marks while taking note of their distinctive and dominant components. Admittedly, the Registrar did not make mention of the reputation of the MARLBORO trade mark, but this does not undermine his firm conclusion on the facts that the goods in question were identical.

Conteh CJ claimed that section 37(3) BTMA was aimed at preventing dilution of marks with a reputation even where the goods and services to which the earlier mark and the proposed mark for registration were not similar: it enabled an owner of a trade mark in Belize to raise as a relative ground for refusing the registration of another trade mark that was identical or similar to its trade mark for goods and services that are dissimilar, but only where its registered trade mark had acquired a reputation. Citing the decision of the Court of Justice of the European Union in Case C-292/00 Zino Davidoff v Gofkid, Conteh CJ claimed that the ‘additional’ protection afforded by section 37(3) was against dilution of an earlier trade mark even where the goods and services for which the earlier trade mark and the later trade mark were identical (and, presumably, similar too). Thus, to avail of this ‘additional’ (anti-dilution) protection, the proposed trade mark had to be identical with or similar to the earlier trade mark which had a reputation in Belize.

Conteh CJ also claimed that Article 6 bis of the Paris Convention protected well known trade marks from later trade marks which constituted a reproduction, imitation or translation likely to create confusion with that earlier well known trade mark. In doing so he rejected BAT's contention that the protection afforded by Article 6 bis of the Paris Convention applied only to marks that had not yet been registered under the BTMA but which enjoyed significant reputation outside Belize. That approach was too limited and failed to appreciate the breadth of protection that Article 6 bis of the Paris Convention afforded. He claimed that the owner of a mark with a reputation can gain protection under sections 37(1) and (2) BTMA and even under subsection (3) if its conditions were satisfied: the ‘additional’ protection would also extend to that which obtained under Article 6 bis. Conteh CJ accepted that the rationale for this protective regime under these sections was to protect against confusion in the minds of consumers in relation to goods and services covered by an earlier mark such as to lead them to think that those goods and services were the same as those to which the later mark related or that they had a common design.

Would the use of the EMBASSY trade mark constitute a reduction, an imitation or a translation likely to create confusion with MARLBORO, the well-known trade mark? Conteh CJ accepted the Registrar's finding that the respective goods were identical and, having examined the affidavits submitted by the parties and comparing the two trade marks, held that the two trade marks were neither identical nor similar: the inverted tail-end of the ribbon in the EMBASSY mark, even if it were to be placed to the very top of its mark, would not ‘bear the slightest resemblance, identity or similarity with a roof that is inverted’. This inverted roof was an important feature of the MARLBORO trade mark. A finding that the marks were similar or identical was important because that finding was ‘no doubt central to the protective regime of trade mark law’ under sections 37(2), 37(3) BTMA and under Article 6 bis of the Paris Convention. The Registrar, applying Sabel v Puma correctly, thus reached the correct on similarity.

Conteh CJ held that the dominant and distinctive component of the MARLBORO mark was the roof device, whereas that of the EMBASSY mark was its horizontal ribbon. Not only was there no likelihood of confusion but the use of the EMBASSY trade mark in Belize would not take unfair advantage of or be detrimental to the distinctive character (the roof device) or repute of the MARLBORO trade mark. Further, given the nature of the goods, the average consumer did not engage in any detailed analysis of their marks at the point of purchase but requested the products by name. Since there was surely a phonetic and aural world of difference between the two marks, they could co-exist in Belize. The judge was fortified in his conclusion because decisions in Australia, Korea and Colombia have reached the same conclusion in similar disputes between the parties.

Practical significance

Conteh CJ's analysis of section 37(2)(b) BTMA is sound, focusing on the global assessment of the likelihood of confusion. According to the ECJ in Sabel BV v Puma AG, a global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression given by the marks, bearing in mind, in particular, their distinctive and dominant components. That assessment was still necessary as the court then considered section 37(3) BTMA, even if it applied only to dissimilar goods and services.

Conteh CJ assumed that the jurisprudence of the ECJ applied in Belize, although the BTMA was not expressly based on the TM Directive. However, since the BTMA and the TMA are the same in most respects, they have a similar (or perhaps identical) origin. It is an open question now whether the legislative changes made to the TMA as a result of decisions of the ECJ should also be made in Commonwealth Caribbean countries that have modelled their trade mark legislation on the TMA.

The court also considered the applicability of Article 6 bis of the Paris Convention, which did not first require that both trade marks be identical or similar. However, there was still a requirement that the later mark constitute a reproduction, an imitation or translation likely to create confusion in the minds of the public, so the court was not relieved of the obligation to compare the two trade marks.