JIPLP: February 2015

Too right: government proposes amendments to the Finnish Copyright Act

Authors: Pessi Honkasalo and Jussi Latola (Krogerus)

Finnish Copyright Act, HE 181/2014 vp 9 October 2014

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv013, first published online: February 26, 2015

The Finnish government has proposed that new provisions on online storage services, amendments for reasons of equity and blocking injunctions be added to the Copyright Act.

Legal context

Currently, online storage services of television programmes are operating in a somewhat grey area in terms of their legal basis. No non-appealable case law has emerged so far.

The provisions for adjusting a contract are found in s 29 of the Copyright Act (404/1961, as amended) which generally refers to the provisions of the Contracts Act (228/1929, as amended). Apart from s 29a of the Copyright Act, stating that the author may not waive his or her right to remuneration for the rental of a copy of a film or a sound recording, there are no supplementing provisions.

Unauthorized internet sharing may currently be addressed by suing the infringer. The court may order the intermediary, in connection with the principal case, to discontinue making copyright-infringing material available to the public. Precautionary measures may also be taken by seeking a temporary injunction against the intermediary prior to suing the infringer. However, in this case the actual infringer must be sued within a month or the court order lapses.

Facts

In October 2014 the Finnish government proposed several amendments to the Finnish Copyright Act. The proposal is currently under consideration by the Finnish parliament and is, if passed by the legislature, intended to become applicable from 1 January 2015.

The main points in the proposal are the following:

adding provisions for the extended collective licence concerning online storage of television programmes;
revision of unfair contract terms whereby the original author has transferred his or her rights to the work; and
improving the possibilities of fighting unauthorized internet sharing.

Analysis

Extended collective licence concerning online storage of television programmes

The main objective of the proposed new provision is to remove the legal uncertainty associated with the currently operating service providers. The proposal strives, it is declared, to consider equally the benefits of the service providers, television stations, copyright holders and consumers by statutorily striking a balance between various stakeholders and their legitimate interests.

A so-called citizens' initiative, based on the proposal that online file storage services be deemed in law to fall under the scope of private use, was previously submitted to the parliament, but it was rejected. The government's proposal, by contrast, is based on the Nordic model of an ‘extended collective licence’ whereby the provider of online file storage would first agree on the usage of the signal as well as the remuneration and the technical implementation of such usage with television companies. The provider would then agree on the right to use the particular works with a copyright management organization. The authorization of individual authors would not be required, and an individual author does not have the right to forbid the recording of his or her work even if he or she is not a member of the management organization.

Revision of an unfair contract

The intention to add provisions regarding the revision of an unfair contract was set out in the government programme of the (still) incumbent government. The proposed amendments do not change the current situation per se, but the objective is to improve the possibilities for revising a contract especially as regards self-employed authors.

Section 36 of the Finnish Contracts Act, which provides for adjustment of unfair contract terms, is proposed to be added to the Copyright Act together with a reference to prevailing good practices in the field which would act as a crucial yardstick for determining whether a contract or its term is unfair or not. The proposal does not, however, set out any levels of compensations or specific terms that are or are not considered reasonable, these being issues that would remain for case law to establish.

The new provisions would only apply to situations where the original author of the work transfers his or her rights (or parts of such rights) to the work. Contracts entered into by other right holders than the original author would, therefore, not be covered.

Actions against unauthorized internet sharing of copyright-protected works

The provisions concerning intervention to unauthorized internet sharing of copyright-protected works are proposed to be amended to make it possible for the right holder to seek a blocking injunction against an online service from which copyright-protected works are shared without the right holder's authorization. This injunction would be directed at the intermediary and would be available when the infringer is unknown or where it is not possible to sue the actual infringer.

A blocking injunction would be subject to the applicant doing the following:

providing sufficient evidence that copyright-protected works are used in the service without authorization;

proving that it is the right holder of the works that are made available in the service or that it represents the right holder;

giving reasoning to the court to point out why the injunction would not be unreasonable;

providing information of the applicant's efforts to find out the identity of the infringer; and

providing information regarding the amount of works available and the user amounts of the service.

IP addresses should also be stated, so that the court is able to give a precise and executable injunction order to the relevant telecommunications company.

Under the proposed provision, it would be necessary to assess the effects of the blocking injunction to the users of the service as the injunction should not be unreasonable to the users of the service. The users' basic rights, chiefly the freedom of expression, would have to be taken into consideration as a factor when assessing the reasonableness of the injunction. The injunction could be considered unreasonable in a situation where, for example, a significant number of right holders who are Finnish, or who live in Finland and are copyright holders in the European Economic Area, use the service to distribute their works.

These injunctions would, in the main, be in force temporarily for a fixed term and could be renewed or amended if necessary. A temporary injunction order would be in force for a maximum period of two months, but the maximum duration for the blocking injunction would be a year.

The costs of an IP/DNS block, according to the government's proposal, are estimated to be around EUR 10,000. This estimate is based on information provided by the telecommunications companies that were earlier ordered to block access to the Pirate Bay website in Finland. These costs would primarily be covered by the telecommunications companies, unless, for example, the applicant withdraws the application or fails to appear at the court hearing or if the application has been unfounded.

Practical significance

By adopting the extended collective licence model in respect of online storage of television programmes, the government, by implication, holds in its proposal that such storage constitutes a prima facie infringement—an issue not yet evaluated by the Court of Justice of the European Union. The amendment would enable television companies to agree with the service providers on an earnings model that best suits the business. This could be the sale of advertisements, for instance. The flip-side is the financial impact on service providers, who would have to pay remuneration for the use of copyright-protected works and possibly be forced to implement technical changes to their existing services. On the consumer side, this amendment would most likely result in an increase in the fees paid by the consumer, especially in relation to services purely based on online file storage. The government argues, however, that the service providers, television companies and the right holders of the television programmes will all benefit from these amendments in the long run, as the extended collective licence would lower the transaction costs in comparison to individually agreeing with each copyright holder for the use of the works. Time will tell.

The practical significance of the proposed amendments relating to revision of assignment contracts likewise remains unknown, but they could certainly lead to more claims for revision of contracts. Existing case law in this area is somewhat scarce. On the other hand, the idea behind introducing more effective adjustment mechanism is its deferent effect, so it is questionable whether the amendment will open the floodgates to litigation. In any event, seeing that only a general provision is proposed, there is no guarantee that the amendment would be a sufficient means for attaining the objective of securing a fair remuneration for the original authors.

As regards the proposed amendments concerning the possibilities of fighting unauthorized internet sharing, it can be expected that there will be an increase in the applications for injunctions due to the new possibility of filing for a blocking injunction when the infringer cannot be identified. The government estimates in its proposal, however, that the yearly amount of such applications would not be more than a few.

Books for review: second time round!

We've just been checking our records and have noticed that there are currently four books which JIPLP has received for review, but for which no offers to review have come in. Accordingly we are re-posting the invitation to review these "orphans". If you are interested, please email Sarah Harris at sarah.harris@oup.com and tell her of your interest, ideally by close of play this Friday, 27 February. If you are not yet known to JIPLP as a contributor or reviewer, do send us your CV or tell us why you think you are the right person to review the book you are are requesting. Don't forget: if you review the book, you get to keep it.

These are the books in question:

The Ownership Problems of Overlaps in European Intellectual Property
Author: Nuno de Araújo Sousa e Silva
Publisher: Nomos

Intellectual Property rights are expanding and, thus, overlapping more than ever before. This poses challenges to a system devised as comprising a set of isolated compartments, each with its defined purpose. The diverging rules concerning ownership and entitlement can lead to different rights on the same object being owned by different persons. What happens then?

This question is addressed under European law, focusing on the existing corpus of EU primary and secondary legislation and jurisprudence and the national laws of France, Germany and the UK.

Five specific cases are considered: trade marks and designs, trade marks and copyright, designs and copyright, data-base sui generis right and copyright and copyright and patents in the field of computer programs. Some solutions to the problem, namely convergence of ownership rules, avoidance of overlaps, prevalence of the closest regime, abuse of rights, implied licences, and expanding copyright solutions by analogy, are analysed.

Further information concerning this title can be obtained from the book's web page here

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Title: Open Source Software and Intellectual Property Rights
Author: Vikrant Narayan Vasudeva
Publisher: Wolters Kluwer

Debate is raging as regards intellectual property and software. Neither copyright law nor patent law seem to satisfy the requirements of software protection. This legal uncertainty has led to the laws becoming subject to exploitation by corporate and other entities for vested agendas. The resentment towards the inadequacies of laws and practices and their subsequent exploitation is highlighted by the emergence of alternative development models, most notably by the open source software model. This book proposes a sui generis model for software, following the pattern of recently developed technological distinctions in such fields as database protection, integrated computer circuits, plant breeders’ rights, and the recognition given to collective rights like collective trademark, geographical indication, and traditional knowledge.

Further information concerning this title can be obtained from the book's web page here

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Innovation And Intellectual Property In China: Strategies, Contexts and Challenges
Editors: Ken Shao and Xiaoqing Feng
Publisher: Edward Elgar Publishing

China is evolving from a manufacturing-based economy to an innovation-based economy, but the delicate context behind this change has not been properly understood by foreign governments, companies and lawyers. This book is an insightful response to ill-conceived notions of, and mis-assumptions regarding, the Chinese innovation economy. It represents an effort to marry a variety of “insiders’ perspectives” from China, with the analysis of international scholars.

With contributions from leading authors - including Dr Kong Xiangjun, President of the Intellectual Property Tribunal at the Supreme People’s Court of China - this book is the first comprehensive response to a highly controversial and largely under-developed field of inquiry. It seeks to unveil and understand the complexities and challenges that confront China’s innovation economy, setting out the cultural and historical context, the strategies that form the basis for this evolution, and the measures China has at its disposal to protect intellectual property.

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

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Information Environmentalism: A Governance Framework for Intellectual Property Rights
Author: Robert Cunningham
Publisher: Edward Elgar Publishing

Information Environmentalism applies four environmental analytical frameworks to the information commons. The book neatly captures the metaphorical relationship between the physical environment and the information environment by alluding to the environmental philosophy of ‘social ecology’ and the emergent informational discourse of ‘cultural environmentalism’. Robert Cunningham builds upon the proposition that the success of the environmental movement can be traced directly to these four analytical frameworks. He develops, refines and integrates the theoretical foundations of ‘cultural environmentalism’ and applies them to the digital age, in which the regulation of information will have a critical impact upon the manner in which human beings conduct their lives, and the manner in which society functions more generally.

Further information about this title can be obtained from the book's web page here

High Court employs ‘intention to target’ approach to determine application of UK copyright law

Author: Nedim Malovic (University of Southampton)

Omnibill (Pty) Ltd v Egpsxxx Ltd (in liquidation) and Another [2014] EWHC 3762 (IPEC), Intellectual Property Enterprise Court, 17 November 2014

Journal of Intellectual Property Law & Practice (2015), doi: 10.1093/jiplp/jpv007, first published online: February 21, 2015

Conclusive evidence brought Birss J to hold a UK company responsible for targeting the UK public by communicating infringing content on a website issued through its services in South Africa.

Legal context and facts

This case related to photographs of escorts that were used on the defendants' website without permission from the claimant. The court had to consider whether infringement had occurred by communicating those works to the public under s 20 of the Copyright Designs and Patents Act 1988 (CPDA). There was no dispute that copyright in the photographs belonged to the claimant.

The first defendant was a UK company which had no employees. The allegedly infringing website was owned by the defendant company and was, at an earlier stage, registered in South Africa, although the company director, Mr Carter, had made arrangements to move its content to the UK. Mr Carter denied any liability for the contents of the website, because it had been set up by a third party who was not an employee, director or shareholder of the defendant company.

Under UK law, for liability to arise the defendant's act must infringe a substantial portion of the copyright owner's exclusive economic rights under s 16 CDPA. Birss J addressed two primary questions: (1) whether the defendants' website or relevant parts of it had been targeted at the UK public, and if so (2) whether the second defendant in the proceedings (Mr Carter), was jointly liable with the first defendant company for damages in tort.

Analysis

Was there a communication to the public, directed at the UK?

Birss J reasoned that the question of whether a website is targeted at a particular country requires a multi-factorial analysis which depends on the circumstances of the case, as well as consideration of both aspects which can be inferred from looking at the content on the website itself and elements arising from the inherent nature of the services offered by the website.

Both parties referred to Arnold J's judgment in EMI Records Ltd v British Sky Broadcasting Ltd [2013] EWHC 379. This had considered a number of rulings of the Court of Justice of the European Union (CJEU) in the ambit of ‘targeting’ towards specific Member States, including Football Dataco v Sportradar GmbH & Sportradar AG (C-173/11, EU:C:2012:642) and Peter Pammer v Reederei Karl Sclüter GmbH & Co KG (C-585/08, EU:C:2010:740). In those decisions, the CJEU suggested a number of non-exhaustive criteria to determine when targeting occurs. These criteria include factors such as whether the trader's activity is directed to the Member State of the consumer's domicile; whether the trader uses a language or a currency other than the language or currency generally used in the Member State in which the trader is established; whether there is any mention of telephone numbers with an international code; whether the trader uses a top-level domain name other than that of the Member State in which the trader is established; and whether there is any mention of an international clientele composed of customers domiciled in various Member States. In EMI, Arnold J accepted the claimant's argument that, where a communication to the public which originated outside the UK is received inside the UK, the communication would be treated as occurring within the UK if it targets the UK public.

Birss J emphasized that evidence that a substantial proportion of visitors to a website is based in the UK may not be determinative, but may nonetheless support a conclusion that the relevant communication is aimed at the public in the UK. A ‘substantial proportion’ may vary between 10 and 25 per cent. Birss J was not convinced that the share of UK visitors to the South African sub-domain was either less then 10 per cent or more then 25 per cent, thus amounting to a substantial proportion.

While the sole purpose of companies placing their services online is to reach out to international clientele, it would be surprising if the intention were to target an international public. The finding that the site is at least in part aimed at the UK is consistent with the purpose of that concept in copyright law. Birss J held that targeting a substantial proportion of the public in the UK could be regarded as conclusive evidence that the claimant's exclusive right to communication to the public was infringed under s 20 CDPA.

Was the second defendant liable?

Birss J established that the first defendant company had been set up in order to shelter liability. Mr Carter had directed the transfer of the content of another website (already hosting unauthorized copies of the claimants' works) to the allegedly infringing website with a view to communicate that content to the public. Because the latter website was found to have infringed the claimant's rights in the UK, Birss J referred with approval to the judgment of Kitchin J in Twentieth Century Fox v Newzbin [2010] EWCH 608 in order to determine Mr Carter's liability in tort for authorizing infringement under s 16 CDPA. Kitchin J held that, in cases involving supply, or authorization by supply, the following circumstances must be considered: the nature of the relationship between authoriser and infringer; whether the equipment or other material supplied constitutes the means used to infringe; the degree of control which the supplier retains; and whether he has taken any steps to prevent infringement.

Birss J concluded that, even if a third party had materially transferred the content of another website to the allegedly infringing website, this had taken place because of Mr Carter's authorization. So Birss J held Mr Carter liable in tort for infringing the claimant's right under s 20 CDPA.

Practical significance

The factors to consider in determining when targeting occurs appear clearer following a number of decisions of the CJEU and their application in UK courts. As regards the application, it is notable that Birss J confirmed his judgment in Thomas Pink Ltd v Victoria's Secret UK Ltd [2014] EWHC 2631. In this case, he held that, though this is a question of fact, it is not necessary that all the contents of a website target the same country to establish that there is an intention to target the public on a certain territory. In Omnibill, Birss J elaborated on this, clarifying that, even if the different sub-domains were aimed at different countries, the website as a whole could be considered as targeting the UK public, provided that certain conditions are met.

Novelty does not necessarily mirror infringement: product-by-process claims

Author: Darren Smyth (EIP)

Hospira UK Ltd v Genentech Inc [2014] EWHC 3857 (Pat), Patents Court, England and Wales, 21 November 2014

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpv030, first published online: February 21, 2015

Mr Justice Birss expounds, interprets and applies the law on construction, novelty and infringement of patent claims that have a ‘product-by-process’ feature.

Legal context

It is frequently held as a fundamental tenet of patent law that, according to the ‘post-infringement’ test for novelty, tests for novelty and infringement must mirror each other: ‘what infringes if after, anticipates, if before’. This was affirmed under pre-1977 law in the UK by the Court of Appeal in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59, which stated ‘the notion behind anticipation is, as we understand it, that it would be wrong to enable the patentee to prevent a man from doing what he has lawfully done before the patent was granted’. However, there are in fact recognized under the current Patents Act 1977 many situations where the novelty test does not mirror the infringement test. For example, it was confirmed by the House of Lords in Synthon BV v Smithkline Beecham plc [2005] UKHL 59 that it is necessary, when considering novelty, for the prior art to have enabling character, whereas there is no equivalent requirement in the infringement test.

The European Patent Office (EPO) interprets a ‘product-by-process claim’—that is, for example, a claim in the form of ‘Substance X obtained/obtainable by process Y’—as a claim to the substance as such. If X is not novel, and if process Y does not necessarily impart some novel feature to X, then the claim is held to lack novelty. This is so whether the language used is ‘obtained’ (on the face of it a narrower wording) or ‘obtainable’ (on the face of it a broader wording).

The question that therefore arises is whether a product-by-process claim should be given a similarly expansive construction for the purposes of infringement.

Facts

The dispute underlying the case concerned two patents, EP (UK) 1 516 628 and EP (UK) 2 275 119, belonging to Genentech, which are divisionals from the same parent. They both relate to lyophilized (ie freeze dried) formulations of trastuzumab, the antibody that is the active ingredient in the well-known anti-cancer drug Herceptin.

Claim 1 of the 628 patent had two product-by-process features, one of the narrower type, ‘lyophilized mixture’, and one of the broader type, ‘obtainable by lyophilizing’ a particular solution. The scope of both the narrower and broader expressions in relation to both novelty and infringement was considered.

Analysis

The leading case previously concerning product-by-process claims is the House of Lords decision in Kirin-Amgen Inc v Hoechst Marion Roussel [2004] UKHL 46, which relates to recombinant erythropoietin. In that case, on the matter of novelty of the product-by-process claim (Claim 26) Lord Hoffmann held (as Birss J summarized) that

a difference in the method of manufacturing did not make a product new and that was so as a matter of law. On that basis the claim could only be novel if the process definition gave the product a new characteristic of some kind.

Because recombinant erythropoietin (rEPO) was not shown to be distinguishable from naturally occurring urinary erythropoietin (uEPO), the claim was held to lack novelty. Thus, on the issue of novelty, Lord Hoffmann aligned the UK approach with that of the EPO.

However, as Birss J observed, this holding in Kirin-Amgen was not a rule of ‘mandatory claim interpretation’, but rather one of novelty. That is because

the House of Lords also decided that the defendant's rEPO did not infringe the patent because it was not the product of the expression of a gene in a host cell … Thus Lord Hoffmann was applying the process feature as a relevant limitation which was not satisfied for the purposes of (non-)infringement but ignoring it for the purposes of novelty. That can only be on the basis that the product by process rule is a rule of novelty law, not claim construction.

This disjunction between novelty and infringement in Kirin-Amgen only emerges from a very careful reading of the judgment and is easily missed. Birss J perhaps had a special understanding of the case from having acted as counsel in the proceedings. He accordingly distilled the following principles from the UK and EPO authorities in relation to product-by-process claims:

A new process which produces a product identical to an old product cannot confer novelty on that product. To be novel a product obtained or obtainable by a process has to have some novel attribute conferred on it by the process as compared to the known product.

This rule is a rule of the law of novelty. It is not a principle of claim construction. Although in effect the rule treats ‘obtained by’ language as ‘obtainable by’ language, nevertheless as a matter of claim construction a claim to a product ‘obtained by’ a process means what it says. That will be the relevant scope of the claim as far as infringement and sufficiency are concerned. Although normally a patent is drafted by the inventor ‘in words of his own choosing’, the EPO will not permit overt product by process language unless there is no other alternative available. By no other alternative, they mean no other way of defining a particular characteristic of the product in question. On this basis, when construing the claims for infringement, the narrower formulation was construed as follows:

The claim is to a ‘lyophilised mixture’. As a matter of language and applying the principles I have just discussed, that is limited to something which has actually been made by lyophilisation. It does not say ‘obtainable by’ lyophilisation, it is a claim to a product ‘obtained by’ lyophilisation. Air dried material which had never been lyophilised might anticipate the claim (but none is suggested to) but it could never infringe.

In contrast, in relation to the ‘obtainable by’ language, Birss J pointed out that for such a claim to be infringed if a different process is used, it ‘must have every single characteristic which is the inevitable consequence of that process’ and If something does not have all those attributes then it is not obtainable by the process. Even if only one attribute is missing, then it is not obtainable.

Thus, even for the broader language, it may practically be very difficult for a patentee to demonstrate infringement of the claim by a product prepared using a different process from that specified in the claim.

Practical significance

Mr Justice Birss's approach to novelty in this decision accords with that of the EPO, as the UK law on novelty has consistently been under both Synthon and Kirin-Amgen. There is no EPO law on infringement, as that is a matter for national courts. German courts have, for example, tended to take an expansive approach to infringement of product-by-process claims, analogous to that adopted by the EPO for novelty, and have considered that a product can infringe if produced by a different process, in principle irrespective of whether ‘obtained’ or ‘obtainable’ language is used, provided that the product has the same ‘fingerprint’ as that produced by the process of the claim. Even though the present decision arguably only makes evident what was always the case under Kirin-Amgen, for the first time there is clearly a divergence between the UK approach and that of other European jurisdictions.

JIPLP-GRUR seminars: save the dates

Save the dates!

Each year JIPLP and GRUR share two seminars, one in London and the other in Munich, in which intellectual property matters of mutual interest to the common law and civil law are aired in a constructive and amicable manner, with speakers on both sides contributing their expertise and their views.

This year's first event takes place in Munich on Monday 8 June. Once details have been finalised we will be posting them here.

The second event is scheduled for the afternoon of Tuesday 8 September. The appropriately Anglo-German law firm of Taylor Wessing has kindly agreed to host it in its lovely London office.

The full cast of speakers and panellists is still work in progress, but Michael Edenborough QC (Serle Court) and Wiebke Baars (Taylor Wessing) have already agreed to participate. The seminar theme will be the impact of Intellectual Property Enforcement Directive 2004/ 48 on litigation before national courts. It is hoped that full details of the programme, and how to register for it, will be published in the next week or so.

Thomas Pink wins PINK trade mark dispute

Alexander Borthwick (Powell Gilbert LLP)

Thomas Pink Limited v Victoria's Secret UK Limited [2014] EWHC 2631 (Ch)

Journal of Intellectual Property Law & Practice (2015) doi: 10.1093/jiplp/jpu252, First published online: February 11, 2015

Following a trial before the High Court, England and Wales, Mr Justice Birss held that use by Victoria's Secret of the sign PINK infringed trade marks owed by Thomas Pink.

Legal context

The court considered issues of infringement and validity under the Trade Marks Act 1994 and the Community Trade Mark Regulation 207/2009.

Facts Thomas Pink's trade marks

Thomas Pink (TP) asserted two trade marks against Victoria's Secret (VS):

(a) A Community trade mark (CTM) for goods in various classes including class 25 (‘clothing, footwear, headgear’):

(b) A UK trade mark (filed as a series of two marks) for goods in various classes including class 25:

Victoria's Secret's uses of the trade marks

From 2012 onwards, VS made various uses of the sign PINK in the UK, as illustrated below.

Thomas Pink's claims

TP argued that VS's use of PINK as described above infringed the trade marks under ss 10(2) and 10(3) of the Act (the equivalent of Articles 9(1)(b) and 9(1)(c) of the Regulation). Briefly, these provisions prevent use in the course of trade of a sign that is identical, or similar, to a registered trade mark in relation to:

goods and services that are at least similar to those for which the mark is registered where there exists a likelihood of confusion on the part of the public and

goods and services, where the mark has a reputation in the Community/UK and the use of the sign is without due cause and takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the mark.

VS argued by way of defence that the UK mark was invalid as lacking distinctiveness and that the CTM should be revoked for non-use.

Analysis

The case gave rise to the following issues of interest.

Validity of the trade marks

As to distinctiveness of the UK mark, Birss J held that this mark did not have inherent distinctiveness: the mark was predominantly the word ‘pink’, which described a characteristic of clothing. In his view, the rectangular box and the lettering did not add anything visually significant.

VS sought to argue that TP had not acquired distinctiveness in the UK mark because TP had not used it in the forms in which it appeared on the register. Birss J disagreed, holding that TP was entitled to rely on use of a registered mark in a form that differed in elements which did not alter the distinctive character of the registered mark: the differences between the trade marks were minor, and the most important element was the word PINK in a special format. Accordingly, the extensive use made by TP of the CTM resulted in the acquisition of distinctiveness by the UK mark. Consequently, the UK mark was held valid.

Regarding revocation of the CTM for non-use, under Article 51(1)(a) of the Regulation, a trade mark is liable to be revoked unless it has been put into genuine use for a continuous period of five years in the Community.

In CIPA v Registrar of Trade Marks (Case C-307/10, ECLI:EU:C:2012:361, the ‘IP Translator case’), the Court of Justice of the European Union (CJEU) ruled on the scope of protection conferred by a trade mark with a specification that uses ‘class headings’. One of the CJEU's rulings was that the goods and services for which an application is made to register the trade must be identified with sufficient clarity and precision to enable the competent authorities and economic operators, on that basis alone, to determine the extent of the protection conferred by the trade mark. Relying on this decision, VS contended that the class heading for class 25, ‘clothing’ was too vague.

Birss J disagreed. He held that ‘clothing’ was a sufficiently clear and precise term. Further, in light of TP's evidence of use in relation to a wide range of garments, ‘clothing’ was a fair description of TP's actual use. Accordingly, there had been genuine use in respect of clothing.

While VS was successful in arguing that a number of other goods should be removed from the specification on the basis of non-use, this outcome did not affect the question of infringement.

Infringement under s 10(2)/Article 9(1)(b)

Following Specsavers v ASDA [2012] EWCA Civ 24, the context in which the defendant's sign appears is relevant to the question of infringement under s 10(2)/Article 9(1)(b). In that case, the Court of Appeal held at paragraph 87 that, ‘[i]n assessing the likelihood of confusion … the sign is not to be considered stripped of its context’.

VS submitted that it was material that each garment had a swing tag or label that featured the words VICTORIA'S SECRET, that the garments were sold in shops which featured numerous prominent references to VICTORIA'S SECRET, and that VS's PINK branded stores were in some instances either part of, or adjacent to, a store branded VICTORIA'S SECRET. However, the judge held that the post-sale context was a realistic and fair context in which to consider the effect of the use of the sign on clothing: where PINK was emblazoned prominently on a garment, the sign was meant to be seen by persons other than the wearer after purchase. The use of VICTORIA'S SECRET on swing tags, on labels and in relation to VS's stores was therefore not part of the assessment for these uses of PINK. In contrast, use of PINK on the swing tags and garment labels was to be considered in the context of VS's stores because that was where the average consumer would encounter them. For the store sign, it was fair to consider the front of the store.

Turning from the context of the allegedly infringing uses to the likelihood of confuson, Birss J held that the use of PINK on VS's clothing gave rise to a likelihood of confusion with TP's trade marks. The goods in question were identical. The sign PINK would not be seen by the average consumer as purely descriptive or decorative; some origin significance would be perceived. Using PINK in a device or slogan slightly reduced the similarity with TP's trade marks—but not enough to avoid a likelihood of confusion. Therefore such use infringed.

Similarly, the store front branding infringed the trade marks: the use of VICTORIA'S SECRET here (not visible in the photograph above) was not sufficiently prominent to dispel the risk of confusion. However, the use of PINK in conjunction with VICTORIA's SECRET on swing tags and labels did not infringe under s 10(2)/Article 9(1)(b). In this instance, the retail context was determinative of confusion. Consumers encountering the sign PINK here knew they were in a VS store and the swing tags, labels and receipts were all clearly marked VICTORIA'S SECRET.

So far as concerns the infringement claim under s 10(3)/Article 9(1)(c), given his findings in relation to s 10(2)/Article 9(1)(b), Birss J considered the use of PINK with VICTORIA'S SECRET only on swing tags and labels in VS stores.

In his judgment, TP's trade marks had sufficient reputation for the purpose of these provisions: TP had established a link between its marks and VS's use since consumers would see a sign reminiscent of them. VS's use was without due cause. In relation to detriment, VS's business was said to aim for ‘sexy, mass market appeal’; as a result of VS's use, TP's trade marks would be associated with a mass market offering, thereby reducing their luxurious reputation.

Practical significance

The finding that a trade mark may acquire distinctiveness through use of a non-identical sign may assist trade mark owners who, as was acknowledged at paragraph 95 of the judgment, ‘do not always and consistently use a mark in precisely the form as registered’. Birss J added that proprietors should not be barred from relying on oral use of prominent parts of a word or device mark to support the acquisition of distinctive character.

In light of Birss J's finding that ‘clothing’ was sufficiently clear, it remains to be determined whether the CJEU's decision in IP Translator has the effect that a lack of clarity in the specification is a basis for revocation of a trade mark (in addition to being a ground for refusal to register the mark). This point is the subject of two conflicting judgments: Total Ltd v YouView TV Ltd [2014] EWHC 1963 (Ch) and Stichting BDO v BDO Unibank, Inc [2013] EWHC 418 (Ch).

Finally, the case illustrates that the applicable context in which the defendant is deemed to use its sign under s 10(2)/Article 9(1)(b) remains a contentious issue and may directly determine infringement. Here, the finding as to likelihood of confusion for the uses of PINK on clothing (where only the post-sale context was held relevant) may be contrasted with that on the swing tags and labels (in which prominent pre-sale use of VICTORIA'S SECRET counteracted the risk of confusion). The rationale for this distinction is expected to receive further consideration when VS's appeal is heard later this year.

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.

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JIPLP

Too right: government proposes amendments to the Finnish Copyright Act

Books for review: second time round!

High Court employs ‘intention to target’ approach to determine application of UK copyright law

Novelty does not necessarily mirror infringement: product-by-process claims

JIPLP-GRUR seminars: save the dates

Thomas Pink wins PINK trade mark dispute

Guest editorial: Copyright Reform - -end of a Dream?

The February JIPLP: packed with exciting content

Guest Editorial

Copyright reform: end of a dream?

Current Intelligence

Patents: Assessing inventive step of a combination pharmaceutical product

Trade marks: General Court holds K-Swiss five-stripe mark invalid

Trade marks: Hauck v Stokke: CJEU clarifies ‘nature of goods’ and ‘substantial value’ exceptions in relation to shape marks

Trade marks: Court of Appeal finds genuine use of the Specsavers logo

Copyright: CJEU rules on notion of parody (but it will not be funny for national courts)

Copyright: BestWater: framing no ‘communication to the public’

Copyright: Dutch judge orders disclosure of source code in China

General: Virtual presence as a basis of territorial jurisdiction in trade mark and copyright infringement suits in India

General: Italy: the exercise of the employer's statutory right of first refusal on the inventions of the employee

Articles

Sovereign trusteeship and multilateral protection of intellectual property rights

Patent litigation and cost shifting in Europe: critical appraisal and proposal of alternative solutions

Whither the ‘six-year rule’? Reconstructing India's law on the presumption of patent validity

The USPTO Guidance in response to Myriad runs counter to Supreme Court precedent and the TRIPS Agreement

Antitrust regulation in the area of IP: Russian judicial practice

From GRUR Int.

EU participation in Negotiations on European Council Agreement on the Protection of Rights of Broadcasting Companies: external competence

Application of Revised Rules on Jurisdiction under Brussels I Regulation to patent lawsuits

IP in Review

This much is true