JIPLP: March 2014

JIPLP in court

The Journal of Intellectual Property Law & Practice received a welcome citation in Kennametal Inc v Pramet Tools SRO & Another [2014] EWHC 565 (Pat), a 5 March 2014 decision of Henry Carr QC (Sitting as a Deputy Judge of the High Court). In this patent trial the judge called for assistance from an article by Phillip Johnson. As the judgment indicates:

Section 60(2) [of the UK's Patents Act 1977] is closely based on Article 30 of the Community Patent Convention (now Article 30 of the 1989 Luxembourg Agreement). In Grimme at paragraph 79, Jacob LJ said:

"Advocates should recognise that where a point of patent law of general importance, such as the construction of a provision which by Treaty (either the EPC or the Community Patent Convention) is to be implemented by states parties to those conventions, has been decided by a court, particularly a higher court, of another member state, the decision matters here. For, despite the fact that there is no common ultimate patent court for Europe, it is of obvious importance to all the countries of the European Patent Union or the parties to the Community Patent Convention ("the CPC") that as far as possible the same legal rules apply across all the countries where the provisions of the conventions have been implemented. An important decision in one member state may well be of strong persuasive value in all the others, particularly where the judgment contains clear reasoning on the point."

Counsel were unable to find any decision of another contracting state which deals with this point. At my request, I was referred to an article by Professor Phillip Johnson "Contributing to the wrong: the indirect infringement of patents" (Journal of Intellectual Property Law and Practice, 2010 Volume 5 Number 7) which states at page 516:

"It is not necessary, however, for a person to know he is infringing a patent, only that the means may be used for putting the invention into effect. Accordingly, even if the supplier believed the supply was lawful and non-infringing this is no defence."

This essentially reflects the Claimant's case in relation to Section 60(2). So, in the present case, there is no doubt that the Defendants intended the Pramet inserts should be fitted into the cutter bodies. At that point, assuming that the Pramet inserts satisfied the relevant features of the claim, the combination of cutter body and insert would infringe. That, submitted the Claimant, is enough for the purposes of Section 60(2): if a Defendant intends a particular use to be made of his product it should not matter whether he knows that the resulting combination actually infringes. That must be a matter for the court alone to be decided objectively. Otherwise, a Defendant could escape liability under Section 60(2) by saying that he misunderstood or was ill-advised as to the meaning of the patent.

We are delighted to see Phillip Johnson's article being called for by the judge. The abstract of Phillip's article reads as follows:

Legal context The law of indirect patent infringement is evolving quickly across the various jurisdictions in Europe. The member states of the European Union have similar provisions in their law relating to thing matter by reason of the Community Patent Convention despite the fact it never came into effect.

Key points This article provides a review of the jurisprudence relating to indirect infringement in Europe, with particular emphasis on the law of the United Kingdom. It seeks to provide guidance on the law will develop by comparing the approaches of the Courts in the various Member States.

Practical significance The law in this area is little explored and there have been a number of recent decisions which are little discussed elsewhere.

Phillip Johnson is Associate Professor of Intellectual Property Law, University College Dublin, and a founder member of the The Journal of Intellectual Property Law & Practice editorial board.

Patent litigants beware: awards of attorneys' fees just got easier with Federal Circuit's Kilopass decision

Authors: Paul Keller and Annsley Merelle Ward (1Allen & Overy, New York and London respectively)

Kilopass Technology, Inc v Sidense Corporation No 2013-1193 (Fed Cir Dec 26, 2013), Court of Appeals for the Federal Circuit, USA

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu027, first published online: March 27, 2014

In further clarifying the burden of proof required to prove that fee-shifting should apply under 35 USC s 285, the Federal Circuit's decision continues to demonstrate the court's attempts to minimize gamesmanship in patent infringement cases and discourage unsupported allegations from being brought.

Legal context

Unlike in jurisdictions such as England and Wales, there is no presumption under US law that a proportion of the attorneys' fees of the winning party is to be paid by the losing party. Parties instead bear their own legal costs. However, under 35 USC § 285 and, as expounded in the Court of Appeals for the Federal Circuit (CAFC) in Brooks Furniture Manufacturing v Dutailier, Inc, 393 F3d 1378 (Fed Cir 2005), a District Court can decide to depart from that rule in exceptional circumstances. Under that case, a winning party had to prove

* by clear and convincing evidence (Ruiz v AB Chance Co, 234 F3d 654, 669 (Fed Cir 2000)), that the case is ‘exceptional’ (35 USC s 285; Cybor Corp v FAS Techs, Inc, 138 F3d 1448, 1460 (Fed Cir 1998) (en banc)) or, if absent conduct that makes a case ‘exceptional’, the litigation is brought in subjective bad faith and the litigation is objectively baseless (Professional Real Estate Investors v Columbia Pictures Industries, 508 US 49, 60–61), and

* that an award of attorneys' fees is appropriate.

A case is ‘exceptional’ when there has been ‘some material inappropriate conduct related to the matter in litigation, such as wilful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11 or like infractions’ (see Brooks Furniture, above; Cambridge Prods Ltd v Penn Nutrients, Inc 962 F2d 1048, 1050–51 (Fed Cir 1992); Beckman Instruments, Inc v LKB Produkter AB, 892 F2d 1547, 1551 (Fed Cir 1989)). Rule 11 permits courts to impose sanctions where a claim, defence or other legal contentions are ‘not warranted by existing law or by a non-frivolous argument’.

Facts

California-based Kilopass and Canada-based Sidense are competitors in the embedded non-volatile memory (NVM) market. NVM consists of memory devices that retain their information or state when power is removed. In May 2010, Kilopass commenced patent infringement proceedings in the United States District Court for the Northern District of California against Sidense, alleging both literal infringement and infringement under the doctrine of equivalents in respect of three patents related to programmable memory cells comprising of transistors located at the intersection of a column bitline and a row wordline. Claim 1 of the representative patent, US 6 940 751 requires (i) a first and second doped semiconductor region of the memory cell and (ii) that the second doped region be connected to one of the row wordlines.

Before commencing proceedings in 2005, Kilopass instructed a patent firm to assess whether technology described in a Sidense international patent application that was directed to protecting its 1T-Fuse memory product infringed Kilopass's patents. Kilopass was advised that, if Sidense's actual 1T-Fuse product was the same as that described in the international patent application, Sidense's product did in fact infringe Kilopass's patents. However, if that assumption was wrong and Sidense had eliminated any particular claimed element, most notably, the first doped region, and replaced it with a shallow trench isolation region, then Sidense ‘would not infringe [the] claims literally’ (JA 10601 (emphasis in the original)).

Later, Kilopass was informed by its attorneys that the Sidense ‘area of interest’ had indeed been replaced, and that the redesign had avoided infringement of Kilopass's patents or ‘at least make our case much tougher’ (JA 10604). Another firm retained by Kilopass confirmed the earlier advice it had received—although Kilopass had reasonable arguments that Sidense's field oxide region was equivalent to the doped region in Claim 1, arguing literal infringement ‘may be difficult’ (JA 11497).

At trial, the District Court found that Sidense's product did not infringe any of Kilopass's patents. The court's decision was based primarily on the difference in the ‘area of interest’ and the claimed region. The decision was affirmed by the CAFC.

In addition to its finding of no liability, however, the District Court took pains in its decision to discuss what it considered to be Kilopass's ‘gamesmanship’ in the proceedings. Most notably, the court found that Kilopass had made contrary construction arguments to the USPTO's Board of Patent Appeals and Interferences. The court also criticized Kilopass for attempting to advance previously undisclosed arguments on the doctrine of equivalents without the court's permission. This, the court held, was ‘particularly inappropriate in light of evidence that Kilopass has known for many years that Sidense does not literally infringe its patents’ (Kilopass, 2012 WL 6599428, note 8). Following the District Court's ruling, Sidense filed a motion in the District Court seeking an award of over $4.2 million in attorneys' fees under 35 USC s 285.

Relying on the standard set by the CAFC in Books Furniture, the District Court denied Sidense's motion holding that Sidense had failed to demonstrate by ‘clear and convincing evidence’ that Kilopass had brought or maintained its claim in subjective bad faith. Focusing on Kilopass's ‘good faith’ acts–such as having performed a pre-filing investigation and obtaining infringement opinions from two different law firms–the District Court concluded that Kilopass's acts had not raised to the level required by s 285, and could not grant Sidense's motion for fees (ibid, note 3). Sidense appealed to the CAFC.

Analysis

Sidense advanced four arguments before the CAFC. First, it argued that the District Court applied the wrong legal standard in requiring that it be shown that Kilopass had actual knowledge that its case had no objective foundation (MarcTec, LLC v Jonson & Johnson 664, F3d 907 (Fed Cir 2012)). The CAFC agreed. To demonstrate bad faith for s 285 purposes, proof that the plaintiff was reckless is all that is required (ie, it was known or it should have been known that there was an objective lack of foundation in the claim: Highmark v Alcare Health Management, 687 F3d 1300 (Fed Cir 2012)). The CAFC further clarified that in considering a party's subjective state of mind, courts must take into account ‘the totality of the circumstances’. Focusing narrowly on only on the evidence of ‘good faith,’ as the District Court did, is inadequate under s 285. Objective factors, including the objective merits of Kilopass's claim, must also be taken into account (Professional Real Estate Investors, p 16).

Secondly, Sidense argued that instead of having to prove bad faith and objective baselessness to satisfy the ‘exceptional’ standard under s 285, proving objective baselessness should be enough. Although the CAFC disagreed and re-affirmed that the ‘exceptionality’ inquiry under s 285 requires an analysis of both objective baselessness and subjective bad faith, it did agree that a showing of objective bad faith alone may justify a finding of exceptionality under s 285 (Professional Real Estate Investors, p 22). The Appeals Court found that if such an objective bad faith showing is made, the subjective bad faith requirement ‘may prove to have little effect on this case, as well as many that follow’ (ibid, p 23).

Third, Sidense argued that a winning party should be able to prove exceptionality by a preponderance of evidence, not ‘clear and convincing’ evidence. Here, although the particular CAFC panel hearing the case was sympathetic to Sidense's views, it was bound by the court's previous precedents, and was not in a position to reverse those now. Specifically, in reviewing the origin of the clear and convincing standard in ‘exceptionality’ cases, the CAFC panel reviewed the Supreme Court's decision in Virtue v Creamery Package Manufacturing Company, 227 US 8, 37–38 (1913) and the pronouncement that ‘an assertion of infringement of a duly granted patent is made in good faith’. The panel found, however, that Virtue did not record any such presumption or any requirement that a defendant needs to overcome such a presumption by clear and convincing evidence (Highmark, 687 F3d at 1310 (quoting Medtronic Navigation, Inc v BrainLAB Medizinische Computersysteme GmbH, 603 F3d 943, 954 (Fed Cir 2010)). Other CAFC cases that referred to the clear and convincing standard of proof under s 285 were limited to cases of fraud. Reactive Metals & Allows Corp v ESM Inc, 769 F2d 1578 expanded the clear and convincing burden to all aspects of the s 285 analysis. The panel found that the historical expansion of the standard was ‘unneeded’ and that a ‘preponderance-of-the-evidence standard is typical in civil cases–particularly with respect to compensatory provisions such as Section 285’ (Professional Real Estate Investors, p 24). It could not, however, reverse the full Appeal Court's precedent, and thus could not accept Sidense's position.

Finally, Sidense argued that instead of requiring that a case be objectively baseless to support fee-shifting in the absence of litigation misconduct, the court should find that fee-shifting is appropriate when a patentee has filed or maintained a patent infringement suit that merely has little likelihood of success. The CAFC considered this to be the weakest of the four arguments, holding that in light of the Supreme Court's decision in Professional Real Estate Investors, Inc v Columbia Pictures Industries, Inc 508 US 49 (1993) as long as the patentee has an objectively reasonable basis for its claim, then s 285 fees should not be awarded. The CAFC reiterated that even if a defendant cannot show that a patentee's claim was objectively baseless, there are other bases for fee-shifting under s 285, ie litigation misconduct, wilful infringement or unprofessional behaviour (MarcTec, LLC and Monolithic Power, Sys Inc v O2 Micro International Ltd 726 F3d 1359, 1366 (Fed Cir 2013)). Trial courts retain broad discretion to make findings of exceptionality under s 285 in a wide variety of circumstances; proving objective baselessness and subjective bad faith is just one of them.

In a concurring opinion, Chief Judge Rader endorsed Sidense's arguments that objective baselessness and proof by a preponderance of the evidence should be sufficient for an award of attorneys' fees. He stated that trial judges should be able to assess what fees should be awarded but that Brooks Furniture ‘drastically altered’ (Professional Real Estate Investors, p 23) earlier jurisprudence that gave judges authority to assess what fees should be awarded in the totality of the circumstances. In his opinion, this decision unfairly restricted the discretion of judges to award fees.

The CAFC therefore vacated the District Court's decision denying Sidense's motion for attorney's fees and remanded for consideration whether Kilopass's doctrine of equivalents theory was objectively baseless and then, whether the totality of the circumstances demonstrated that Kilopass acted with subjective bad faith. If the District Court considers that the case is exceptional, then it should determine whether, in its discretion, it should award attorneys' fees to Sidense under s 285 or on alternative grounds, if any exist.

Practical significance

The required showing of exceptionality under s 285 has changed. If, under the totality of the circumstances, an alleged infringer can show by clear and convincing evidence that the patentee's assertions were ‘objectively baseless’, an award of attorneys' fees will be justified. As such, patent litigants considering whether to pursue ‘aggressive’ tactics should take pause and carefully consider the potential risk of losing the matter and the likelihood that they will be required to pay the attorneys' fees of the other side. This additional assessment is important especially now that the impact of non-practising entities (NPEs) is being scrutinized by the judicial and legislative branches of the US government.

Indeed, according to a 2013 report published by the US Government Accountability Office (GAO), between 2007 and 2011 patent infringement suits brought by NPEs in the USA accounted for 19 per cent of all patent lawsuits (United States Government Accountability Office, Report to Congressional Committees, August 2013, ‘Assessing Factors That Affect Patent Infringement Litigation Could Help Improve Patent Quality’, http://www.gao.gov/assets/660/657103.pdf (accessed 29 January 2014)). Although the GAO report did not touch fully on the litigation cost element, the report cited a 2011 American Intellectual Property Lawyers Association survey of patent lawyers that showed that the costs of defending one patent infringement lawsuit was between $650 000 to $5 million in 2011 (AIPLA, Report of the Economic Survey 2011 (Arlington, VA: July 2011)). This decision highlights the risks to those litigants who are not pursuing their claims in good faith but are gaming the litigation process for an improper purpose.

From pillar to post: Volvo's road-trip in the opposition against Solvo

Author: Esther B. Schnepper (Institute for Information Law (IViR), University of Amsterdam)

Case T-394/10 Elena Grebenshikova v OHIM, General Court of the European Union (Third Chamber), 5 December 2013

Journal of Intellectual Property Law & Practice (2014), doi: 10.1093/jiplp/jpu036, first published online: March 25, 2014

In this recent case, the General Court of the European Union (GC) annulled the decision of the Board of Appeal of the Office for Harmonisation in the Internal Market (OHIM) concerning the opposition of Volvo against registration of the trade mark SOLVO, reasoning that there was no likelihood of confusion given the particularly high degree of attention of the relevant public and the inevitability of visual perception of the mark.

Legal context

Article 8(1)(b) of Regulation 207/2009 on the Community trade mark provides that a trade mark shall not be registered in the case of likelihood of confusion with an earlier trade mark in the territory in which the earlier mark is protected, in view of its identity with, or similarity to, the earlier mark and the identity or similarity of the goods or services covered by the trade marks. Settled case law further explains that a likelihood of confusion is constituted by either the impression of the public that the goods or services in question come from the same undertaking or by the impression that these come from economically linked undertakings. Whether there is likelihood of confusion must be assessed globally, taking into account all factors relevant to the circumstances of the case.

Facts

The present case concerns the on-going dispute between Volvo, the well-known producer of cars, and Ms Elena Grebenshikova, who wished to obtain a trade mark that contained the word SOLVO. Grebenshikova applied to register a figurative mark for ‘computer programs for warehouse management systems and computer programs for container terminal systems’ (Class 9) in 2003, whereupon Volvo filed an opposition in 2005 based on the grounds referred to in Article 8(1)(b), as Volvo's trade mark covers not only ‘vehicles’ (Class 12) but other categories such as ‘computer software’ (Class 9). The opposition was also based on Article 8(5), which provides that taking unfair advantage of the reputation of the earlier mark leads to denial of the registration. The Article 8(5) ground is not discussed further, as this case concentrated on the assessment of likelihood of confusion of Article 8(1)(b).

The opposition procedure proved to be a long journey. Initially the opposition was rejected twice, both by the Opposition Division and the Second Board of Appeal, according to which no similarity existed between the marks and consequently Article 8(1)(b) did not apply. However, in an earlier judgment of 2009 the General Court of the European Union (GC) found that the existence of phonetic similarity was sufficient for the applicability of Article 8(1)(b) and that, accordingly, a global assessment of the likelihood of confusion should be made. Subsequently, the case was referred to the First Board of Appeal, which upheld the opposition and rejected the application. The Board of Appeal reasoned that Volvo's reputation in the field of cars led up to the mark having a higher degree of distinctive character for goods such as computer software, particularly given the fact that most cars use computer software. Moreover, purchasing the software did not necessarily imply visual perception of the mark, as the software could be ordered orally. Also the decisive factor in the act of purchase would be the content rather than the visual aspect of the software. Consequently, according to the Board of Appeal, the visual differences did not outweigh the phonetic similarities and therefore likelihood of confusion did exist. In the case in question the GC evaluated the latter judgment of the Board of Appeal.

Analysis

The relevant public

First the GC considered the Board of Appeal's interpretation of the relevant public. Indeed, the product of Grebenshikova was directed exclusively to professionals in the warehouse or container terminal sector: this specialist public was correctly assumed to have a high degree of attention. However, given that purchasing the software would not happen on a daily basis, that the purchase would be a significant investment and that the software would be an essential work tool within the company, the GC found that, instead of a relatively high degree of attention, the relevant public's degree of attention should be particularly high when comparing goods from different producers operating on the market.

Likelihood of confusion

After reaffirming that there was no visual (or conceptual) but only phonetic similarity between the signs, the court assessed the likelihood of confusion. An important basic assumption regarding this assessment was that the visual, phonetic or conceptual (dis)similarities are not always of equal importance, but their weight might fluctuate according to the circumstances of the situation. In the present case, this could result in the phonetic similarity being counterbalanced by their visual dissimilarity, when the marketing of the product would necessarily involve visual perception of the mark by the public.

The GC took the view that such was the case. A purchasing specialist company is assumed to examine scrupulously the characteristics of the goods and the identity of the producers. After all, the purchase of such software entails a significant investment and a high impact on the logistical effectiveness of the company. Further, introducing new software for the logistic system would at least require installation on specialised software and training of the staff using the new system. Before deciding on the purchase of this type of software, it is therefore highly plausible that an elaborate selection process would take place, which may include visiting the producer's website, studying the written presentation of the software, having meetings with the producer's employees and using a trial version of the product. The argument that initially the software trade mark would be referred to orally, as OHIM had put forward, could not alter the conclusion of the court that visual perception of the mark before purchase of the product was inevitable. Consequently, in consideration of the particularly high degree of attention of the relevant public, the scale tipped to no likelihood of confusion and the opposition was annulled.

Practical significance

The judgment of the GC illustrates the complexity of the assessment of likelihood of confusion. Many factors are of importance, each carrying a different weight in different circumstances. The judgment reaffirms the casuistic character of the assessment, as all possible conditions in practice should be taken into consideration. Apparently the degree of attention of the relevant public can be divided into sublevels; in any case into a relatively and a particularly high attention. Further, the manner of marketing and the purchasing process should be investigated conscientiously, as the (absence of) visual or phonetic perception influences the outcome of the assessment. Apart from the legal significance this judgment also illustrates how a trade mark opposition procedure can linger for years; more than ten years have already passed since Grebenshikova filed the application. For trade mark conflicts this is not an unusual time span, but, as appropriately observed in the IPKat article ‘When Volvo met Solvo: a lesson in EU trade mark law’ (here), ten years is quite some time when compared to the life of for instance a patent or an unregistered Community design. Additionally, the results of the various instances can differ significantly, sending the parties from pillar to post. The present judgment for example has the same outcome as the initial two instances, yet on different grounds. However, this GC judgment might not be Volvo's final destination; Volvo could try its last luck at the Court of Justice of the European Union, with possibly yet another conclusion.

HTC v Nokia: In the United Kingdom will an injunction be granted following a finding of patent infringement?

Author: Gary Moss: EIP Legal

HTC Corporation v Nokia Corporation [2013] EWHC 3778 (Pat), Patents Court, England and Wales, 3 December 2013

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu019, first published online: March 16, 2014

In this action Mr Justice Arnold granted a final injunction restraining HTC from continuing to sell products which he had previously determined infringed Nokia's patent. In doing so, he clarified the test to be applied when considering whether to grant a final injunction in patent cases.

Legal context

In May 2013 the author co-authored a paper (R Lundie-Smith and G Moss ‘Bard v Gore: to injunct, or not to injunct, what is the question? Is it right to reward an infringer for successfully exploiting a patent?’ (2013) 8(5) JIPLP 359) analysing the differences in approaches of the courts in the United States and the United Kingdom as to the grant of final injunctions in patent infringement cases. In particular, we drew attention to the fact that, following the decision of the US Supreme Court in eBay Inc v MercExchange, LLC, 547 US 388 (2006), the US courts had adopted a ‘balance of harm’ approach, whereas in the UK the approach still appeared to be that the claimant was entitled to an injunction unless the harm inflicted on the defendant by the grant of the injunction would be ‘grossly disproportionate’ to the continuing damage likely to be suffered by the patentee.

Further opportunity to assess the approach of the UK courts to this issue arose in HTC v Nokia. This followed the decision by Arnold J in October 2013 that HTC had infringed Nokia's European Patent (UK) No. 0,998,024 (the ‘024 patent) and that the patent was valid. The question which arose in the subsequent hearing was as to the consequences which flowed from this decision and, in particular, whether Nokia could secure an injunction?

Facts

An important aspect of the ‘024 patent was that it had not been declared essential to any telecoms standard. This meant that there had not been the usual fair, reasonable, and non-discriminatory (FRAND) undertaking in respect of this patent, and HTC could not avail itself of the defence that Nokia would have been obliged to grant it a licence under the patent had HTC been a willing licensee.

HTC nevertheless argued that, even though it had been found to be infringing Nokia's valid patent, Nokia's remedy should lie in damages alone. HTC relied inter alia on the following factors which, it said were present:

* the patented element formed only a small part of the overall commercial device;

* the royalties were likely to be small;

* Nokia was ‘only interested in money’ since it had licensed its patents to others and was on the verge of selling its handset business to Microsoft;

* Nokia had already granted licences to Apple and RIM and, according to HTC, Google, Samsung and LG were also infringing, but Nokia had not taken action to restrain their activities; and

* the grant of an injunction would have a disproportionately adverse impact on HTC given that the injunction would apply to its best-selling HTC One telephone.

All of which cut very little ice with the Arnold J. One matter which exercised him in particular was that it appeared that alternative, non-infringing solutions were available to HTC, but that HTC had not taken contingency steps to ensure that such alternatives could be implemented immediately, notwithstanding the fact that it had known since 2011 that Nokia was of the view that HTC's chips infringed a number of Nokia's non-standard essential patents.

Analysis

The UK law on whether an injunction will be granted following a successful finding of infringement derives from the decision in Shelfer v City of London Electric Lighting Co (1895) 1 Ch 287. In that case, A L Smith LJ stated that ‘it was a good working rule’ that damages could be given in substitution for an injunction:

* if the injury to the plaintiff's legal rights is small,

* it is one which is capable of being estimated in money,

* it is one which can be adequately compensated by a small money payment, and

* the case is one in which it would be oppressive to the defendant to grant an injunction.

Absent such factors, the claimant was entitled to the injunction.

In Navitaire Inc v EasyJet Airline Co Ltd (No 2) [2004] EWHC 2271 (Ch) Pumfrey J said that he understood the use of the word ‘oppressive’ in A L Smith LJ's formulation to mean that the grant of the injunction had to be ‘grossly disproportionate’ to the right protected. Pumfrey J's interpretation was cited with approval by Jacob LJ in Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2011] EWCA Civ 163.

However, commentators have queried how this sits with Article 3(2) of Directive 2004/48 on the enforcement of intellectual property rights which provides that remedies shall be:

… effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.

The question raised was, how does one square the circle between something which is not ‘grossly disproportionate’ and something which is ‘proportionate’? Theoretically, each should be the mirror image of the other, but in that case what does the word ‘grossly’ add?

Arnold J stated that in his view the time had come to recognize that, in cases concerning infringement of intellectual property rights, the criteria to be applied when deciding whether or not to grant an injunction are those laid down by Article 3(2) of the Enforcement Directive. However, he also pointed out that the provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) dealing with compulsory licences were of relevance in this context, since the effect of refusing an injunction following a finding of infringement was de facto the grant of a compulsory licence to the infringer. Article 30 of TRIPS provides that although Member States can provide limited exceptions to the exclusive rights conferred by a patent, such exceptions should not unreasonably conflict with the normal exploitation of the patent or unreasonably prejudice the legitimate rights of the patent owner. Arnold J concluded thus: I consider that Article 3(2) of the Enforcement Directive permits and requires the court to refuse to grant an injunction where it would be disproportionate to grant one even having regard to the requirements of efficacy and dissuasiveness. Where the right sought to be enforced by the injunction is a patent, however, the court must be very cautious before making an order which is tantamount to a compulsory licence in circumstances where no compulsory licence would be available. It follows that, where no other countervailing right is in play, the burden on the party seeking to show that the injunction would be disproportionate is a heavy one. Arnold J ended by commenting that he suspected that the practical effect of his conclusion was little different from the ‘grossly disproportionate’ test of Pumfrey J.

Applying these conclusions to the case before him, he decided that an injunction should be granted. Nevertheless, there was some relief for HTC in that, although he granted the injunction, he also stayed its implementation in respect of HTC's main product, the One, pending its appeal against his substantive findings on validity and infringement.

Practical significance

This case highlights that in the UK it is still the ‘norm’ that, following a finding of patent infringement, the presumption is in favour of the grant of an injunction. This is primarily due to the very nature of the right granted, ie a right to exclude all others from working the invention, and the fact that the injunction is the primary way of enforcing that right. That is not to say that injunctions follow automatically; each case will turn on its own facts. But, as Arnold J said, the burden on the party seeking to show that the grant of the injunction would be disproportionate is a heavy one.

Contrast this with the position in the USA where, following eBay, the question of whether or not a final injunction will be granted now appears to turn on the balance of equities. Moreover, as highlighted in our earlier paper, the US courts have not shied away from granting what is tantamount to compulsory licences and awarding ongoing royalties.

In the discussions regarding the Rules of Procedure for the Unified Patents Court, some commentators have suggested that when dealing with the power to grant injunctions there should be included so called ‘eBay’ provisions. By that is meant rules specifically providing that the court can only grant an injunction if the case satisfies the proportionality test. However, as this case graphically demonstrates, the European law on ‘proportionality’ in this area is significantly different from the test laid down by the US Supreme Court in eBay. To conflate the two approaches risks weakening the current protections enjoyed by patent owners in Europe and would be tantamount to enacting a change in the substantive law via the back door.

Books in search of a reviewer

The Journal of Intellectual Property Law & Practice (JIPLP) is still seeking suitable reviewers for two books which were recently advertised as being available for review. They are:

• Trademark Valuation: A Tool for Brand Management, 2nd Edition
Authors: Gordon V. Smith and Susan M. Richey
Publisher: Wiley

"The Second Edition of Trademark Valuation is a fresh presentation of basic valuation principles, together with important recent changes in worldwide financial reporting regulations and an update on the current worldwide legal conditions and litigation situation as they relate to trademarks.

A new section discussing issues surrounding valuation of counterfeits and the economic effects of trademark counterfeiting is included in this informative Second Edition."

Further information is available from the book's web page here

*******************************************

• Intellectual Property and the Common Law
Editor: Shyamkrishna Balganesh
Publisher: Cambridge University Press

"In this volume, leading scholars of intellectual property and information policy examine what the common law - a method of reasoning, an approach to rule making, and a body of substantive law - can contribute to discussions about the scope, structure and function of intellectual property. The book presents an array of methodologies, substantive areas and normative positions, tying these concepts together by looking to the common law for guidance. Drawing on interdisciplinary ideas and principles that are embedded within the working of common law, it shows that the answers to many of modern intellectual property law's most puzzling questions may be found in the wisdom, versatility and adaptability of the common law. The book argues that despite the degree of interdisciplinary specialization in the field, intellectual property is fundamentally a creation of the law; therefore, the basic building blocks of the law can shed important light on what intellectual property can and should (and was perhaps meant to) be."

Further information is available from the book's web page here

If you believe that you are suitably equipped to review either of these titles, can you please email Sarah Harris by not later than close of play on Monday 24 March at sarah.harris@oup.com, indicating why you think that you should be the reviewer.

JIPLP also has three further titles which have recently been received for review and which are offered here for the first time. They are

* Originality in EU Copyright
Author: Eleonora Rosati
Publisher: Edward Elgar Publishing

"Full harmonization of the copyright laws of EU Member States has long been a holy grail for copyright lawyers, but with the reality thus far being only limited harmonization resulting from ad-hoc legislative interventions, there are serious questions over the feasibility and indeed desirability of this goal. Notwithstanding, as this book makes eloquently clear, whilst legislative initiatives have been limited, the CJEU has been acting proactively, establishing through its decisional practice the de facto harmonization of an important principle of copyright: the originality requirement.

Through an assessment of the originality requirement, this work guides the reader in interpreting judicial decisions which are of fundamental importance to current and future understanding of EU copyright. The book’s holistic approach and methodology takes in analysis of; recent decisions of the CJEU in light of broader EU copyright reform debate; the implications of CJEU case law in Member States which have traditionally adopted different approaches to copyright (eg the UK); the originality requirement in EU, UK and continental Member States; recent UK decisions from an EU perspective; and academic copyright reform projects, both in Europe and the US".

Further information is available from the book's web page here

*******************************************

* TRIPS and Developing Countries: Towards a New IP World Order?
Editors: Gustavo Ghidini, Rudolph J.R. Peritz, Marco Ricolfi

"TRIPS reflects the dominant view that enforcing strong intellectual property rights is necessary to solve problems of trade and development. The global ensemble of authors in this collection ask, how can TRIPS mature further into an institution that supports a view of economic development which incorporates the human rights ethic already at work in the multilateralist geopolitics driving international relations? In particular, how can these human rights, seen as encompassing a whole ‘new’ set of collective interests such as public health, environment, and nutrition, provide a pragmatic ethic for shaping development policy? Some chapters address these questions by describing recent successes, while others propose projects in which these human rights can provide ethical ground for influencing the forces at play in development policies".

Further information is available from the book's web page here

*******************************************

* European Trade Mark Decisions, 2nd edition
Authors: Jeremy Pennant and others
Published by D Young & Co

"European trade mark law is a complex area, with new and important guidance being issued from the CJ almost daily. European Trade Mark Decisions provides an easy to use guide of all the key judgments. The book is an invaluable resource for brand owners, the media and anyone with an interest in the cases which have had a dramatic impact on some of the biggest names in the fashion, food and beverage, technology and other sectors which thrive on innovation.

European Trade Mark Decisions contains 136 case summaries, with each case presented in a clear and digestible format that includes a brief statement outlining the importance of the case, its date and case reference, key parties, keywords, issues and the most recent ruling. Cases are categorised into ten main sections covering key trade mark subject areas such as: absolute grounds, counterfeit goods, domain name disputes, invalidity and infringement, with a detailed index by case and by section. The book also includes a section covering Community trade mark procedure and practice".

Further information is available from the book's Amazon page here

Again, if you believe that you are suitably equipped to review either of these titles, can you please email Sarah Harris by not later than close of play on Monday 24 March at sarah.harris@oup.com, indicating why you think that you should be the reviewer.

Unincorporated sport associations can seek trade mark protection for the names of non-professional football clubs

Author: Michele Giannino (Desogus Law Office, Italy)

Journal of Intellectual Property Law & Practice (2014) doi: 10.1093/jiplp/jpu021, first published online: March 14, 2014

Associazione Sportiva Entella Chiavari 1914 v Virtus Entella, Court of First Instance of Genoa, Sezione specializzata in materia di Imprese, Order of 21 October 2013

In an interim decision an Italian court ruled that an unincorporated sport association is allowed to seek trade mark protection for the name and crest of a non-professional football team, provided that the place name included in the claimed marks is not a mere geographical indication.

Legal context

By Article 19 of the Italian Intellectual Property Code, any person can obtain the registration of a trade mark that he uses or intends to use for the supplying of goods and services of his enterprise. It is commonly believed that Article 19 allows a person, who does not have the qualification of enterprise according to the definition in Article 2082 of the Italian Civil Code, to register a trade mark. It is, however, not settled whether a person who carries out an economic activity falling outside the concept of enterprise in Article 2082 can invoke trade mark protection for the signs he uses for this activity.

Facts

Entella, an Italian football club founded in 1914, played mainly in semi-professional leagues until 2002 when its then owner, Associazione Calcio Entella Chiavari Srl (AC Entella), became insolvent and went into administration. The club soon became active again and registered with the Italian Football Association (FIGC). Renamed Associazione Calcio Dilettantisca Entella, the team now plays third tier league. The current owner of the team is a private company, Virtus Entella Srl (Virtus Entella), which recently filed a trade mark application for the word ENTELLA and the white and blue crest of the team.

The applicant, Associazione Sportiva Entella Chiavari 1914 (AS Entella), was an unincorporated sport association registered with the FIGC since 1977. In 2003, it changed its name from AS Entella to AC Entella to which it added the year ‘1914’. From then on, it used the name Entella for its football team, now playing in the lowest tier of the amateur league. In 2013, to celebrate the 100th anniversary of the foundation of the Entella football team, Virtus Entella organized many events and activities, including the sale of new kits with the name of former Entella players and celebratory shirts with the names of all the managers of the club.

Believing it enjoyed a trade mark right on the name of the Entella football club and that the activities of Virtus Entella mentioned above amounted to an unauthorized use of such mark, in August 2013 AS Entella commenced proceedings against Virtus Entella. AS Entella sought a judicial declaration establishing that it was the proprietor of an unregistered trade mark on the name of the football team as well as on the crest of the club. It also applied for an interim injunction to prohibit the defendant from using the claimed marks. In its defence, Virtus Entella contended that the applicant did not have the qualification of enterprise and, accordingly, under Italian law, was not allowed to enjoy trade mark rights.

Analysis

In the ensuing preliminary proceedings, in order to decide to award the interim relief sought by AC Entella, the Court of Genoa first had to consider whether the applicant was entitled to invoke trade mark protection for the litigated signs. The court took the view that the trade mark provisions applied only to entities that fell within the definition of ‘enterprise’ in Article 2082 of the Italian Civil Code.

Did an unincorporated sport association, such as Entella AS, constitute an ‘enterprise’? The court referred to case law on the interpretation of Article 2082 under which an entity is considered to be an enterprise when, thanks to stable organization, it consistently offers goods and services to the market and is able to cover its costs using the revenues generated by the sales. AS Entella contended that it met those criteria, and it argued that, despite its being an unincorporated association according to the law, it had to balance the costs incurred in the management of its football team with the revenues generated by it. The court substantially agreed with the applicant's submission that it qualified as an enterprise, though it hinted that the different legal forms of the parties might be of relevance when adjudicating the trade mark infringement claim on the merits.

In support of the finding that Entella AS was an enterprise, the court pointed to the regime for football clubs in force before the enactment of Act 91 of 1981 which considerably amended it. Under the previous regime, even the top-tier professional football clubs were organized as unincorporated sport associations. Notwithstanding this, it was universally agreed that those football clubs were indeed enterprises.

The next issue addressed by the court was whether the name of a football team which also included a geographical name could be protected as a trade mark. First, the court made it clear that trade mark protection also applies to the names of football clubs. Football clubs supply a service in the form of sport shows, such as football matches. The names of football clubs thus carry out the distinctive function of trade marks, enabling fans and consumers to identify the provider of those services. The possibility of registering the names of football clubs as trade marks is also confirmed by Article 8 of the Intellectual Property Code. This provision lays downs that it is possible to register as a trade mark a sign, if it is well known and is used in the field of sports, and in particular, the names or abbreviations of events or entities and associations not having economic purposes.

Finally, the court dealt with the question whether the geographic names of Entella and Chiavari contained in the disputed signs prevented them from being protected as trade marks. In short, the court ruled that the trade mark provision applied to the litigated signs, provided that the claimed trade mark was not a mere geographical indication.

The court then reached the conclusion that the applicant, since it had the qualification of an enterprise, could in theory invoke the trade mark protection for the name of the Entella football team and its crest; eventually, however, the court dismissed the claims of AC Entella. Indeed, the contention of the applicant that it enjoyed trade mark rights on the name and crest of the football team was at odds with the submissions made by the receiver for the AC Entella administration and FIGC. The receiver stated that such rights had not been assigned, whereas FIGC reported that the applicant only filed a ‘change of denomination’ request. The proceedings will now go on to adjudicate on the merits the claims of AS Entella, focusing on the conflict between the unregistered mark claimed by the applicant and the mark lately applied for by Virtus Entella.

Practical significance

In Entella, the court said that unincorporated sport associations may also fall within the definition of enterprise under Article 2082 of the Italian Civil Code. If it is the case, they can invoke the trade mark protection for the names and of emblems of their football teams. If the interim decision is upheld in the final judgment, Entella may have important implications for semi-professional and amateur football teams. The case makes it clear that also smaller football clubs can rely on the tools in the trade mark provisions to control the use and exploitation of their IP assets. In other words, the decision may strengthen their ability to monetize such assets through sponsorship and merchandising and, accordingly, to generate more revenue to fund their teams.

About this weblog

The principal contents of this weblog are drawn from the Current Intelligence features which are published monthly in JIPLP.

Current Intelligence articles are designed to analyse recent key cases, legislation and topical matters. Normally they are of between 500 and 1,500 words (though in exceptional cases a greater word length may be agreed with the Editors).

The selected Current Intelligence articles are now posted on this weblog to enable readers to engage with them, posting comments if they so choose. All comments are moderated, which means that they will not appear immediately upon their being posted.

About the Journal

JIPLP is a peer-reviewed journal dedicated to intellectual property law and practice. Published monthly, coverage includes the full range of substantive IP topics, practice-related matters such as litigation, enforcement, drafting and transactions, plus relevant aspects of related subjects such as competition and world trade law.

The journal is specifically designed for IP lawyers, patent attorneys and trade mark attorneys both in private practice and working in industry. It also aims to be an essential source of reference for academics specialising in IP, members of the judiciary, officials in IP registries and regulatory bodies, and institutional libraries. Subject-matter covered is chosen for its practical relevance and international interest.

Instructions for authors here
Free sample issue here
Subscription details here

... and authors in search of an article

JIPLP is often approached by prospective authors who would like to write something, but who would appreciate guidance regarding subject-matter, style and so forth. Here are a few pointers:

* Ask yourself what is it that you'd like to read in the journal, since that is handy rule of thumb which probably reflects the interests of your colleagues and your competitors;

* IP law and practice is very much a 'here and now' activity for JIPLP subscribers. The history of a right may be inherently interesting, or even sometimes relevant to the resolution of a specific issue, but would you expect a reader to look for it in JIPLP?

* Recycled Masters' dissertations and university essays make poor articles and are often difficult to convert from a piece that is designed to display erudition and research ability into an article that addresses lawyers, businesses and decision-makers. It's usually easier to start afresh by working out who your readers are and what you want to tell them.

* Please comply with the authors' instructions and note the journal's preferred length for articles. Most authors like to publish long ones, but subscribers tend to prefer reading shorter ones.

JIPLP

JIPLP in court

Patent litigants beware: awards of attorneys' fees just got easier with Federal Circuit's Kilopass decision

From pillar to post: Volvo's road-trip in the opposition against Solvo

HTC v Nokia: In the United Kingdom will an injunction be granted following a finding of patent infringement?

Books in search of a reviewer

Unincorporated sport associations can seek trade mark protection for the names of non-professional football clubs

Theories of intellectual property: Is it worth the effort?

April JIPLP now out

Guest Editorial

Theories of intellectual property: Is it worth the effort?

Current Intelligence

Patents: Australian High Court rules on patentability of methods of medical treatment

Court of Appeal confirms messaging patent's invalidity and re-emphasizes limitations of newly-raised arguments

Assessing damages due under a cross-undertaking in damages—more of an art than a science?

Can springboard injunctions be awarded in respect of non-infringing acts?

Trade marks: The Belgian beer battle: the scope of protection afforded to colour marks

Coca-Cola contour bottle trade mark infringement claim rejected

Copyright: Supreme Court of Canada rules on substantial copying

Piracy in Canada: bad faith and poor conduct can have a large impact on damages

Communication to the public or ‘freedom to receive’? A Portuguese bitter-sweet symphony

Breach of confidence: Breach of confidence: polar approaches to the assessment of damages

Articles

Customs seizure proceedings in the European Union and the United States

Belated evidence of proof of use: Court of Justice of the European Union case law reviewed

Calculating damages in copyright infringement actions under Belgian law

Drug safe harbour provisions in the USA and Europe: implications for the emerging biosimilars industry

The notion of famous, well-known trade marks and marks with repute compared

Intellectual property and 3D printing: a case study on 3D chocolate printing

From GRUR Int.

Video game consoles

Limitations and legal aspects of “crowdsourcing”

IP in Review

Braiding intellectual property law with human rights

Chakrabarty's mission to bug cancer and save patent law